Astronics (ATRO) CJS Securities 25th Annual “New Ideas for the New Year” Investor Conference summary

Company Overview and Recent Performance

• Focuses on aerospace (90% of sales) and test equipment (10%), with strong exposure to commercial transport, business jets, and military aircraft.

• Product lines include electrical power, lighting and safety, avionics, certification, structures, and test solutions, with strong market positions in commercial aerospace and defense.

• Revenues rebounded from a pandemic low of $445M to preliminary $796M in 2024, averaging over 20% annual growth in the last three years; 2025 guidance is $820M–$860M, representing mid-single digit growth.

• Gross margin improved to 23.2% in Q3 2024, with adjusted operating margin at 9.6% and adjusted EBITDA of $27.1M.

• Supply chain and labor challenges have eased, improving operational efficiency and stability.

Key Programs and Growth Opportunities

• Won the $250M U.S. Army Radio Test Program, with full-rate production expected by late 2025.

• Major partner in the U.S. Army FLRAA program, developing electrical power systems for the Black Hawk replacement; first flight expected in 2026, initial fielding in 2030, and development effort valued at ~$65M from 2024–2026.

• Expanded test systems business with major defense and transit contracts, including a $215M U.S. Army contract and restructuring actions to improve profitability.

• Business jet and commercial transport segments show upside potential due to growing backlogs and production rates.

• FLRAA engineering revenue of ~$45M expected to be split between 2025 and 2026; production phase could yield $1M+ per shipset.

Supply Chain, Tariffs, and Inflation

• Electronics supply chain has improved, with much contract manufacturing shifted from China to other countries.

• Industry is better prepared to handle inflation and potential tariffs, with more flexible contract terms and willingness to renegotiate.

• Tariffs or geopolitical risks could be inflationary, but the industry is expected to adapt and protect margins.