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. 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 36% year over year, with adjusted EBITDA margin of 19.8%. Operating income was a record $40.5 million, and adjusted operating income was $43.2 million. Aerospace sales were $237.3 million, and Test Systems sales were $22.7 million. Bookings were $243.1 million in Aerospace and $63.1 million in Test Systems, for total quarterly bookings of $306 million. Backlog ended at a record $657.2 million in Aerospace and $123.3 million in Test Systems. For Q3, management expects sales of $265 million to $275 million and said Q4 revenue should improve modestly from there. Full-year revenue guidance was raised to $1.02 billion to $1.04 billion.

Peter Gundermann called the quarter very strong across revenue, operating profit, bookings, backlog and adjusted EBITDA, and said Astronics is entering the second half with strong momentum. He emphasized that the company is benefiting from several margin levers at once: higher volume, pricing recovery on long-term contracts, better workforce efficiency, and simplification of the business. He also highlighted major program wins in the $27 million MV-75 FLRAA development order and the $45 million Army radio test production award, describing both as important to Astronics’ future.

Nancy Hedges said the quarter delivered record sales of $260 million, gross profit of $86.9 million, operating income of $40.5 million, net income of $35.1 million, and adjusted EBITDA of $51.5 million with a 19.8% margin. She noted gross margin expanded 760 basis points to 33.4%, helped by higher volume, productivity, and a $2 million IEEPA tariff refund, while ongoing tariff costs run about $3 million to $4 million per quarter at current volumes before mitigation. Cash from operations was $30.1 million, capital expenditures were $5.7 million in the quarter and $16.9 million year to date, long-term debt fell to $310.3 million, and liquidity was $253.2 million. She said full-year CapEx should be $40 million to $45 million and that the company expects to be free cash flow positive for the rest of the year.

Analysts focused on what surprised management, the outlook for emerging aircraft and defense opportunities, Test Systems margins as Army radio test ramps, pricing recovery, MV-75 funding visibility, BMA integration, M&A appetite, and labor availability. Management said there were no major surprises in the quarter, that bookings and results largely matched or beat internal expectations, and that the Army radio test program should increasingly support margins as production ramps toward full run rate by the fourth quarter. They said eVTOL and drone opportunities are promising but mostly a 2027 item, pricing is now roughly 75% to 80% through the major post-inflation reset, the MV-75 work remains supported by Bell, BMA is progressing well, M&A is opportunistic rather than core, and labor availability has improved materially even though retention still takes more hires than before the pandemic.