CANACCORD GENUITY GROWTH CONFERENCE August 13, 2015 PETER J. GUNDERMANN PRESIDENT & CEO DAVID C. BURNEY EXECUTIVE VP & CFO NASDAQ: ATRO
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
ASTRONICS CORPORATION NASDAQ: ATRO Index membership Russell 3000 /2000 /Microcap Recent price $55.78 52-week range $41.31 $77.35 Market capitalization Total shares outstanding: Common Class B (10 votes per share) Market data as of close of business on August 10, 2015 [Source: Bloomberg LP]; Ownership as of most recent filing Share price and SHOUT reflect September 2014 20% class B stock distribution 3 $1.2 billion 22.1 million 17.3 million 4.8 million Avg. daily trading volume (3 mos.) 171,000 Ownership (Common and Class B shares combined): Institutional 67.6% Insider 12.4%
INCREASING SALES ($ in millions, except EPS) $661.0 $680-$715 $228.2 $266.4 $339.9 $334.8 Q2 YTD 2011 2012 2013 2014 2015E $1.01 $1.00 $1.24 $2.48 Diluted EPS* Guidance provided as of August 5, 2015 * Adjusted for September 2014 20% Class B Stock distribution 4
SEGMENT REVIEW Electrical Power and Motion (EP&M) In-seat power Airframe power Seat actuation Lighting and Safety (L&S) Aircraft lighting Passenger service units Avionics Databus interface products Ku-Band antennas In-flight entertainment for VVIP Enhanced vision systems Systems Certification Aerospace Commercial aircraft certification solutions for: In-flight connectivity In-flight entertainment Electrical power systems Structures Fuel access doors and diffusers Other Airfield lighting Other PECO products 5 Test Systems Automated test systems Test equipment and instruments Weapons diagnostic test systems 2015E Sales* ($ in millions) $135 - $145 20% Aerospace * Guidance provided as of August 5, 2015 $545 - $570 80% Test Systems
STRATEGIC ACQUISITIONS Armstrong: $52 million purchase January 2015 Aerospace: Systems Certification, Power and Avionics $661.0 EADS N.A. T&S: $69 million purchase February 2014 Test: Commercial and Defense $270.4 PGA: $31 million purchase December 2013 Aerospace: Motion and Avionics $339.9 $39.5 AeroSat: $12 million purchase + earn out October 2013 Aerospace: Avionics $266.4 $300.4 $390.6 PECO: $136 million purchase July 2013 Aerospace: Lighting, Safety, Structures 2012 2013 2014 Organic Sales Acquisition Sales 6
ACQUISITION OF ARMSTRONG AEROSPACE Acquired January 14, 2015 $52 million purchase price 2014 sales of $27 million A leading provider of engineering, design and certification solutions for commercial aircraft, specializing in connectivity, in-flight entertainment, electrical power systems and off-seat power solutions Common customers include Panasonic and Gogo Headquartered in Itasca, IL; approximately 80 employees 7
Q2 2015 TTM SALES Sales by Product Sales by Market Structures 2% Other 3% Systems Certification 2% Avionics 9% Test Systems 23% Lighting & Safety 22% Electrical Power & Motion 39% Other 3% Business Jet 5% Military 6% Test Systems 23% Commercial Transport 63% Q2 2015 TTM Sales: $680.3 Million 8
AEROSPACE: GROWTH DRIVER EXPANDING SHIP SET CONTENT Higher future ship set content Expanded ship set content: $100k - $500k Historic ship set content: <$10,000 9
COMMERCIAL TRANSPORT DELIVERY FORECAST 1600 1400 History Forecast 1200 Aircraft Units 1000 800 600 400 200 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Light/Medium Heavy Source: Airbus & Boeing Actual deliveries through 12/31/2014 / Forecast International (July 2014) 10
OUTLOOK FOR BUSINESS JET DELIVERIES History Forecast ~9,450 Aircraft from 2014-2024 Source: Honeywell Business Aviation Outlook, October 2014 11
ELECTRICAL POWER AND MOTION IN-SEAT AND OFF-SEAT POWER Power Systems for Personal Electronic Devices Outlet Units Rapid adoption rates by global commercial airlines More than 180 airline and OEM customers Cabin power supplier to Thales, Rockwell and Panasonic Installed on business aircraft from Piper to Boeing Business Jet PowerBar & PowerBox off-seat power solutions provide passenger power without modification or recertification of existing seats Installed on over 800,000 seats In-Seat Power Supply 12
ELECTRICAL POWER AND MOTION AIRFRAME POWER Induction Starter Generator System Intelligent Power Management Systems 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: Socata TBM900 Bell 525 Bell V280 Pilatus PC24 13
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 Passenger Information Signs Emergency Egress Lighting Smart Lighting Systems Cockpit Lighting Systems Control Panel Assemblies Military NVIS Lighting Night Vision Modifications Exterior Lighting 14
LIGHTING AND SAFETY PASSENGER SERVICE UNITS Passenger Service Unit: Lights, Speakers, Signage Oxygen Masks Air Ventilation System Creating value through innovation by redesign of full air ventilation system Largest customer: Boeing 777 - approximately $235k in content (passenger service units, fuel access doors) 737 - approximately $100k in content (BSI passenger service units, fuel access doors) 787 - approximately $45k in content (fuel access doors) 747 approximately $30k in content (passenger service units, fuel access doors) 15
AVIONICS ANTENNA SYSTEMS Satellite-Based Broadband In-flight internet and TV connectivity Ku Band connectivity solution: current leading technology, lower cost, flexible applications, efficient Expansive intellectual property portfolio Targeting commercial, business, and military aircraft applications Providing GoGo KU Band satellite antennas for commercial international flights VVIP Broadband Solution High-speed connectivity for data, voice and video Worldwide coverage from the moment you step on the aircraft Superior performance with unlimited growth capacity Simple, end-to-end solution with hardware, service, support and certification 16
AVIONICS DIVERSE PRODUCT OFFERINGS VVIP IFEC Large private and government jets $2 million to $10 million per install 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 Enhanced Vision Systems Provides real-time display for increased visibility in adverse weather conditions FAA Certified on more than 200 aircraft models 17
AEROSPACE SEGMENT: WELL POSITIONED Wide range of high profile next generation aircraft platforms Embraer Phenom 100/300: Exterior lighting UH-60 Blackhawk: Exterior cockpit lighting V-22 Osprey: Cabin, cockpit & exterior lighting Cessna: Exterior & cockpit lighting 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 & starter generator Airbus 350: Emergency egress lighting & passenger power Bell 525 & V280: Airframe power 737MAX: Exterior lighting system Current Ramping Next Generation 18
TEST SYSTEMS LEADING PROVIDER OF HIGHLY ENGINEERED AUTOMATED TEST SYSTEMS, SUBSYSTEMS, AND INSTRUMENTS FOR THE COMMERCIAL AND DEFENSE MARKETS Strong capabilities of both hardware and software expertise Family of test systems support all levels of performance verification Highly customized test solutions Expected Test Systems sales of $135 million to $145 million in 2015* * Guidance provided as of August 5, 2015 19
FINANCIALS
SOLID SALES, GROWING BOOKINGS ($ in millions, except EPS) Sales Annual Bookings $680-$715 [1] $661.0 $674.7 $694.1 $228.2 $266.4 $339.9 $234.0 $271.2 $357.5 $334.8 2014 Q2 YTD YTD $495.0 2011 2012 2013 2014 2015E $1.01 $1.00 $1.24 $2.48 2011 2012 2013 2014 Q2 2015 TTM Diluted EPS [2] [1] Guidance provided as of August 5, 2015 [2] Adjusted for September 2014 20% Class B Stock distribution 21
SOLID MARGINS ($ in millions) Gross Profit & Margin Operating Profit & Margin $167.0 $183.4 $60.5 $69.4 $87.9 $30.8 $32.6 $42.3 $87.4 $97.0 26.5% 26.1% 25.8% 25.3% 27.0% 13.5% 12.2% 12.4% 13.2% 14.3% 2011 2012 2013 2014 Q2 2015 TTM 2011 2012 2013 2014 Q2 2015 TTM 22
Q2 2015 SNAPSHOT ($ in millions) Bookings Sales Net Income $174.6 $173.2 $139.0 $146.7 $13.1 $17.7 7.5% 10.2% % of Sales Q2 2014 Q2 2015 Q2 2014 Q2 2015 Q2 2014 Q2 2015 Q2 2014 included $8.7 million, pre-tax, of inventory fair value step-up expense of acquired businesses compared with $0.1 million, pre-tax, in Q2 2015 23
STRONG BALANCE SHEET ($ in millions) Cash & Cash Equivalents $54.6 Cash From Operations $99.9 $97.5 $7.4 $21.2 $23.8 $24.2 $49.5 2012 2013 2014 7/4/2015 2012 2013 2014 Q2 2015 TTM Funded Debt & Shareholder s Equity $200.3 $30.0 $125.1 $171.5 $183.0 $231.2 $228.2 $256.1 2012 2013 2014 7/4/2015 Shareholder s Equity Funded Debt $16.7 Capital Expenditures $6.9 $40.9 $12.3 2012 2013 2014 2015E * Guidance provided as of August 5, 2015 $20-$27* Q2 YTD 24
DEVELOP AND CAPITALIZE ON TECHNICAL EXPERTISE ($ in millions) Engineering & Development Expense $76.7 $75-$80 Identify market opportunities $36.1 $44.9 $52.8 Develop/acquire technical capability 15.8% 16.9% 15.5% 11.6% 11%-12% 2011 2012 2013 2014 2015E* Earn higher returns by providing innovative solutions Percent of Sales Q2 2015 YTD E&D Expense: $43.6 Million * Guidance provided as of August 5, 2015. 25
CANACCORD GENUITY GROWTH CONFERENCE August 13, 2015 NASDAQ: ATRO
SUPPLEMENTAL SLIDES
MAJOR COMPETITORS Electrical Power & Motion Lighting & Safety Avionics Test Systems 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) Aeroflex (Cobham) Lockheed National Instruments Zodiac Honeywell OEM internal processes Goodrich Whelen Diehl Aerospace Numerous smaller suppliers Kontron Panasonic / Mitsubishi MELCO Agilent Teradyne 28
ASTRONICS LOCATIONS Itasca, IL Connectivity In-flight Entertainment, Electrical Power Systems 29
CANACCORD GENUITY GROWTH CONFERENCE August 13, 2015 NASDAQ: ATRO