Astronics Corporation

Second-quarter sales were a record $260 million, up 27% from the prior year period. Gross profit was $86.9 million, or 33.4% of sales, versus $52.8 million, or 25.8%, a year ago. Income from operations was a record $40.5 million, and adjusted operating income was $43.2 million with adjusted operating margin of 16.6%. Net income was $35.1 million, or $0.75 per diluted share, and adjusted net income was $32.6 million, or about $0.70 per diluted share. Adjusted EBITDA was $51.5 million, up from $25.4 million last year, with margin of 19.8%. Bookings were $306 million, backlog was record-setting, and full-year revenue guidance was raised to $1.02 billion to $1.04 billion. For Q3, the company expects sales of $265 million to $275 million, with fourth-quarter revenue expected to improve modestly from there.

Peter Gundermann said the quarter showed strong momentum across the business, with records in revenue, operating profit, bookings and backlog. He emphasized four margin levers: higher volume, pricing improvements, better workforce efficiency and portfolio simplification, and said each still has room to run. He also framed the Army radio test award and MV-75 development work as major future contributors, while saying the company is excited to cross the $1 billion revenue threshold for the first time.

Nancy Hedges said Q2 gross profit improved to $86.9 million, or 33.4% of sales, helped by volume, productivity and a $2 million IEEPA tariff refund; she estimated ongoing tariff cost exposure at about $3 million to $4 million per quarter before mitigation. SG&A was $35.6 million, R&D was $10.9 million, and adjusted EBITDA reached $51.5 million with a 19.8% margin. Cash from operations was $30.1 million, capex was $5.7 million in the quarter and $16.9 million year to date, long-term debt ended at $310.3 million, and liquidity was $253.2 million. She said full-year capex should be $40 million to $45 million and the company expects to be free cash flow positive for the remainder of the year.

Analysts focused on what surprised management in the quarter, the outlook for emerging aircraft like eVTOLs and drones, the pricing reset, and the ramp of the Army radio test program. Management said there were no major surprises because results and the two big bookings were broadly anticipated, and noted that the radio test business should begin to show meaningful margin contribution as production ramps and could approach aerospace-like margins once fully running. On pricing, Peter Gundermann said roughly 75% to 80% of the pandemic-era repricing journey is done, with the remaining long-term contracts to be reset over the next 12 to 18 months. He also said BMA is performing reasonably well but is still being integrated and improved, and that labor availability has improved materially versus the pandemic period, though some retention friction remains.