CANACCORD ANNUAL GROWTH CONFERENCE

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Transcription:

CANACCORD ANNUAL GROWTH CONFERENCE AUGUST 10, 2017 NASDAQ: ATRO David C. Burney Executive VP & CFO

Safe Harbor Statement These slides (and the accompanying oral discussion) contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to differ materially from the results expressed or implied by such statements, including general economic and business conditions, conditions affecting the industries served by the Company and its subsidiaries, conditions affecting the Company s customers and suppliers, competitor responses to the Company s products and services, the overall market acceptance of such products and services, the effect of the Company s strategy and other factors disclosed in the Company s periodic reports filed with the Securities and Exchange Commission. Consequently, such forward-looking statements should be regarded as the Company s current plans, estimates and beliefs. The Company does not undertake and specifically declines any obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. 2

About Astronics Corporation (NASDAQ: ATRO) As a trusted partner to the world s leading manufacturers, we create INNOVATIVE solutions with TECHNOLOGIES, SYSTEMS and SERVICES that enhance everything from commercial jets to military programs to the smart phone in your pocket. Shares Out 29.0 million Market Cap $730.8 million Avg. Daily Volume (3 mos.) 151,814 Recent Price $25.20 52-Week Range $23.95 $41.03 Index membership: Russell 3000 /2000 Institutional ownership 68% Insider ownership 14% Market data as of August 4, 2017 [Source: Bloomberg]; ownership as of most recent filing 3

Product Offerings in Two Business Segments Aerospace» Electrical Power and Motion (EP&M)» Lighting and Safety (L&S)» Avionics» Systems Certification SALES US$ in millions $692.3 $661.0 $166.3 $142.5 $633.1 $625- $645 $99.1 $90-$95» Structures $339.9 Test Systems $9.4 $494.7 $549.8 $534.0 $535- $550» Semiconductor $330.5» Aerospace & Defense 2013 2014 2015 2016 2017E* Aerospace Test Systems *Guidance provided as of August 2, 2017 Segment sales tally may differ due to rounding 4

Diverse Sales Composition Sales by Product Sales by Market Other 3% Systems Certification 2% Avionics 6% Test: Semiconductor 6% Structures 4% Test: A&D 9% Lighting & Safety 26% Electrical Power & Motion 44% Business Jet 5% Test: Semiconductor 6% Other 3% Military 9% Test: A&D 9% Commercial Transport 68% Q2 2017 TTM Sales: $612.7 Million 5

Aircraft Units Commercial Transport Delivery Forecast 2000 History Forecast 1800 1600 1400 1200 1000 800 600 400 200 0 20002001200220032004200520062007200820092010201120122013201420152016201720182019202020212022202320242025 Single Aisle Wide Body Source: Airbus & Boeing actual deliveries through 12/31/2015 / Forecast International (July 2016) 6

Business Jet Delivery Forecast ~8,600 Aircraft from 2016-2026 Source: Honeywell Business Aviation Market Update, October 2016 7

Leading Provider of Passenger Power EP&M: In-Seat Power Supply (ISPS)» In-seat power installed on 1 million+ seats on over 200 airlines worldwide» IFE power supplier to Thales, Panasonic and Zodiac» ASP: $750-$850 per seat» Currently 90%+ market share in growing market of seat power worldwide» Large growth opportunity with narrow body adoption Outlet Units In-Seat Power Supply Master Control Unit 8

Establishing Market Leadership EP&M: Airframe Power Intelligent Power Management Systems Induction Starter Generator System Solid-state systems replace extensive wiring and traditional electromechanical components with modular electronics & software» Increased Reliability» Reduced Weight» Automation» Flexibility» Lower Life Cycle Cost Wins: DAHER TBM 900 Bell 505, 525 & V280 Pilatus PC-24 Cessna Denali 9

Specialize in High-End Seat Technology EP&M: Seat Actuation Gen VI Smart Motion System Gen V Nano Smart Motion System 10

Established Position on 777X and 737 MAX Lighting and Safety: Passenger Service Units (PSUs)» Recently won Embraer E2 Strong position with Boeing» 777 / 777X - approximately $235k in content (PSUs, fuel access doors)» 737 - approximately $100k in content (BSI PSUs, fuel access doors)» 787 - approximately $45k in content (fuel access doors)» 747 - approximately $30k in content (PSUs, fuel access doors) 11

Unique Product Offering Lighting and Safety: Aircraft Lighting Exterior Lighting Systems» Beacon & Formation» Taxi & Landing» Position / Anti-Collision» Pioneered Application of Hi-Res / Low-Power LEDs for Aircraft Lighting» LED Lighting on 737 Max Cabin Lighting Systems» Emergency Egress Lighting» Emergency Signs» Passenger Information Signs» Flood Lights» Smart Lighting Systems Cockpit Lighting Systems» Panels» Avionics HMI» Lighting Controllers» Control Panel Assemblies» Night Vision Modifications Exterior Lighting 12

Industry Leading Technologies Avionics: Databus Solutions» Aircraft Interface Device (AID): Translation devices that enable varying system protocols to communicate Interface between EFB and Aircraft Systems» Embedded Computers, Systems & Function Cards Data/protocol conversion Data concentration/separation Domain isolation Firewall Operational processing» Gather aircraft data» Run custom software or a variety of Type A/B EFB applications» Securely view applications on choice of wireless devices 13

Connectivity Solutions Avionics: Antenna Systems Satellite-Based Broadband» Cost effective solutions for in-flight internet and TV connectivity» Ku-band: leading technology, lower cost, flexible applications, efficient, upgrading» Suited for commercial, business, VVIP and military aircraft applications» Dedicated global connectivity solution for VVIP/Bizjet market with Panasonic Avionics 14

Specialized Capabilities Avionics: In-flight Entertainment for VVIP» Large private and government jets» $1 million to $10 million per install» UHD Media Center First aeronautical player with 4K Ultra HD technology 15

Engineering Solutions Systems Certification» A leading provider of engineering, design and certification solutions for commercial aircraft Specialize in connectivity, in-flight entertainment, electrical power systems and off-seat power solutions» Customers include Panasonic and Gogo» New capability to bring to the market and leverage across the company internally» Launched AeroShield low drag radome and composite adapter plate Composite plate expected to be certified in 2017 16

Aerospace Segment Well Positioned on Wide Range of High Profile Next-Gen Aircraft Embraer Phenom 100/300 Exterior lighting UH-60 Blackhawk Exterior cockpit lighting V-22 Osprey Cabin, cockpit & exterior lighting Cessna Exterior & cockpit lighting CURRENT Airbus A380 Cabin lighting & cabin electronics Boeing 787 Passenger power & fuel doors Boeing 737 NG & BSI PSU, fuel doors & passenger power available F-35 JSF Exterior lighting suite & lighting controllers Pilatus PC-24 Airframe power & induction starter generator NEXT GENERATION Boeing 777X PSU & fuel doors 737MAX Exterior lighting system & PSU Airbus 350 Emergency egress lighting & passenger power Embraer E2 Interior and exterior emergency lighting system & PSU Cessna Denali Induction starter generator, electronic circuit breakers & passenger power Bell 505, 525 & V280 Airframe power 17

A&D Test Systems» Test instruments, automated test systems, and training and simulation systems» Integrated logistics support» Validate operating performance on multiple toppriority defense communications and weapons systems platforms Expanding test instrument business with next-gen PXI platform offerings Next-gen radio test set that combines 16+ field test capabilities in one device 18

Unique Solution for Semiconductor Testing Supported the largest smart device ramps in history Shortened Time to Volume Rapid test development and deployment Reduced Cost of Test massively parallel, system level test dramatically reduces cost of test (COT) The new ATS 5034 SLT Platform delivers a high throughput and low cost of test for testing semiconductor devices at the system level. Innovative Test Solutions Engineer to engineer design and manufacturing philosophy Flexibility & Scalability Configurable systems accommodate the device under test (DUT) and test objectives; copy-exact methodologies support global scaling Opportunities» More programs with major customer» Developing new customers 19

FINANCIALS 20

Sales & Bookings (US$ in millions; except EPS) SALES Annual Bookings $661.0 $692.3 $633.1 $625-$645 $674.7 $584.5 $616.8 $579.2 $339.9 $357.5 2013 2014 2015 2016 2017E Diluted EPS² $0.94 $1.87 $2.22 $1.61 1 2013 2014 2015 2016 Q2 2017 TTM ¹ Guidance provided as of August 2, 2017 ² Adjusted for October 2016 15% Class B Stock distribution 21

Margins (US$ in millions) Gross Profit and Margin Operating Profit and Margin $187.9 $167.0 $159.5 $147.6 $87.9 $87.4 $98.8 $73.1 $61.3 $42.3 2013 2014 2015 2016 Q2 2017 TTM Margin 25.8% 25.3% 27.1% 25.2% 24.1% 2013 2014 2015 2016 Q2 2017 TTM Margin 12.4% 13.2% 14.3% 11.6% 10.0% 22

Develop and Capitalize on Technical Expertise (US$ in millions) Engineering & Development Expense $52.8 15.5% $76.7 11.6% $90.1 $90.2 13.0% 14.2% $96-$99 14.9%- 15.8% 2013 2014 2015 2016 2017E*» Majority focused on customer specific projects» Identify market opportunities» Develop/acquire technical capability» Earn higher returns by providing innovative solutions Percent of Sales *Guidance provided as of August 2, 2017 23

Balance Sheet and Cash Flow (US$ in millions) Cash from Operations Capital Expenditures $99.9 $78.5 $40.9 $49.5 $48.9 $30.1 2013 2014 2015 2016 Q2 2017 TTM Funded Debt & Shareholders Equity $200.3 $171.5 Shareholder s Equity $183.0 $228.2 $169.8 $300.2 Funded Debt $148.1 $163.0 $337.4 $347.7 2013 2014 2015 2016 Q2 2017 $6.9 $18.6 $13.0 $21-$25 $5.8 2013 2014 2015 2016 2017* Capital allocation priorities: 1. Organic growth 2. Acquisitions 3. Pay down debt 4. Stock repurchases Tolerance for debt:» 2x - 3x» Willing to flex up 1H 17 *Guidance provided as of August 2, 2017 24

CANACCORD ANNUAL GROWTH CONFERENCE AUGUST 10 2017 NASDAQ: ATRO

SUPPLEMENTAL SLIDES 26

Major Competitors POWERED AIRCRAFT LIGHTED AIRCRAFT AVIONICS» Airbus KID Systeme» Hamilton» Sundstrand/UTC» Crane Aerospace» Zodiac» Honeywell» Esterline» Hamilton Sundstrand/UTC» Draeger (B/E Aerospace)» GE» North Atlantic Industries» TECOM (Smiths Group)» Zodiac» Honeywell» OEM internal processes» Goodrich» Whelan» Diehl Aerospace» Numerous small suppliers» Kontron» Panasonic TEST SYSTEMS» Aeroflex (Cobham)» Lockheed» National Instruments» Keysight» Teradyne 27

Astronics Locations A Broad Footprint For Capacity and Collaboration NORTH AMERICA FRANCE KIRKLAND, WA» Airframe Power» In-Seat Power KENT, WA» VVIP In-flight Entertainment EVERETT, WA» Avionics Databus Solutions ITASCA, IL» System Installs» Systems Certification» Electrical Power Systems EAST AURORA, NY Corporate Headquarters» Aircraft Lighting MONTREAL, Quebec» Aircraft Lighting LEBANON, NH» Aircraft Lighting AMHERST, NH» Connectivity Systems CLACKAMAS, OR» PSUs & Structures» Enhanced Vision Systems» Contract Manufacturing IRVINE, CA» Test Instruments» Integrated Test Systems FORT LAUDERDALE, FL» Aircraft Safety» Airfield Lighting ORLANDO, FL» Integrated Test Systems» Simulation and Training CHÂTEAUROUX, France» Seat Actuation» VVIP In-flight Entertainment 28

Adding Technology, Building Solutions Recent Acquisitions for the Astronics Brand PECO Manufacturing» July 2013» Aerospace: Interior & Structures PGA Avionics» December 2013» Aerospace: Motion, VVIP Armstrong Aerospace» January 2015» Aerospace: Systems Certification, Power and Avionics 2013 2014 2015 2016 2017 AeroSat» October 2013» Aerospace: Connectivity EADS N.A. Test» February 2014» Test: Commercial and Defense Custom Control Concepts» April 2017» Aerospace: VVIP 29

For More Information, Contact: Company: David C. Burney Chief Financial Officer 716-805-1599 x159 david.burney@ Investor Relations: Deborah K. Pawlowski Kei Advisors LLC 716-843-3908 dpawlowski@keiadvisors.com 30