Astronics Corporation Reports Record Operating Income on 27% Sales Growth for Second Quarter 2026

• Second quarter sales increased 27.0% to a record $260.0 million
• Record operating income was $40.5 million, or 15.6% of sales
• Second quarter net income was $35.1 million, or $0.75 per diluted share; adjusted EBITDA¹ was $51.5 million, or 19.8% of sales
• Record Aerospace sales of $237.3 million drove Aerospace operating margin of 20.3%; adjusted Aerospace operating margin¹ was 21.4%
• Record quarterly bookings reached $306.2 million for book-to-bill of 1.18 and third consecutive record backlog quarter of $780.6 million
• Generated $30.1 million in cash from operations
• Raising 2026 revenue guidance to $1.02 billion to $1.04 billion

EAST AURORA, N.Y.--(BUSINESS WIRE)--Astronics Corporation (Nasdaq: ATRO) (“Astronics” or the “Company”), a leading supplier of advanced technologies and products to the global aerospace, defense, and other mission critical industries, today reported financial results for the three and six months ended July 4, 2026. Financial results include the acquisition of Bühler Motor Aviation (“BMA”) on October 13, 2025.

Peter J. Gundermann, Chairman, President and Chief Executive Officer, commented, “We had a very strong second quarter, with record sales, operating income, bookings and backlog. Our adjusted EBITDA margin of 19.8% was a multi-year high. We see continued strength across our range of markets and products, resulting in another step up in our forecasted 2026 revenue level. We expect momentum to build during the second half of the year. It is an exciting time for our Company.”

Second Quarter Results

Second Quarter 2026 Results (compared with the prior-year period, unless noted otherwise)

Growth in sales was driven by the Aerospace segment’s continued strength in demand primarily from the Commercial Transport market, including $5.9 million from the acquisition of BMA. Aerospace sales increased $43.7 million, or 22.6%, while Test Systems sales grew $11.6 million, or 105.1%. Test Systems sales in the prior year were negatively impacted by $6.4 million due to revisions of estimated costs to complete certain long-term mass transit contracts.

Gross profit increased $34.1 million to $86.9 million, or 33.4% of sales, a 760 basis point improvement over the comparator quarter. Gross profit growth and margin expansion were primarily attributable to higher volume, improved productivity, and a $2.0 million IEEPA tariff refund. Prior-year gross profit was negatively impacted by a $5.8 million charge related to Aerospace simplification initiatives and a $6.9 million adverse impact related to a revision of estimated costs to complete certain long-term mass transit contracts in the Test Systems segment.

Selling, general and administrative expenses (“SG&A”) decreased $0.9 million. Litigation-related expenses were down $0.9 million, and the prior-year period included a $3.5 million legal fee reimbursement charge relating to the patent infringement dispute in the UK. These decreases were mostly offset by higher wages and benefits, higher incentive-based compensation expenses driven by increased profitability, and incremental expenses related to the acquired BMA business. R&D was down $0.7 million reflecting the timing of projects.

Operating margin expanded 1,330 basis points and adjusted operating margin² expanded 770 basis points as a result of higher volume and improved productivity in the Aerospace segment and improved performance in the Test Systems segment.

Interest expense was down $0.8 million, or 24.7%, on lower rates following the September 2025 refinancing activities. Tax expense in the quarter of $2.8 million reflects the benefits of a partial valuation allowance reversal and research and development costs expected to be expensed.

Consolidated net income of $0.75 per diluted share improved from $0.03 per diluted share in the prior-year period from stronger operating profit. Adjusted EBITDA² increased 102.9% to $51.5 million, and adjusted EBITDA margin² expanded 740 basis points to 19.8% of consolidated sales.

Record bookings of $306.2 million in the quarter resulted in a book-to-bill ratio of 1.18:1. For the trailing twelve months, bookings totaled $1.06 billion and the book-to-bill ratio was 1.13:1. Backlog at the end of the quarter was $780.6 million, representing the third consecutive quarter of record backlog.

Aerospace Segment Review (compared with the prior-year period, unless noted otherwise)

Aerospace segment sales of $237.3 million increased $43.7 million, or 22.6%. Sales in the Commercial Transport market increased $31.4 million, or 21.6%. Growth was primarily related to increased demand for seat motion and inflight entertainment & connectivity (“IFEC”) products. General Aviation sales increased $9.2 million, or 50.3%, to $27.6 million due to higher IFEC product sales of VVIP products. Military Aircraft sales increased $3.2 million, or 11.7%, to $30.6 million from increased sales of flight critical airframe power products.

Aerospace segment operating profit of $48.3 million, or 20.3% of sales, improved over the prior-year period reflecting the leverage gained on higher volume, improving production efficiencies, a $2.0 million IEEPA tariff refund, a $4.6 million decrease in litigation-related expenses and legal reserve adjustments related to the UK patent dispute previously discussed, and the absence of a $6.2 million charge for simplification initiatives in the prior-year period. Adjusted Aerospace operating profit² increased 61.0% to $50.7 million, or 21.4% of sales, a 510-basis point expansion over the comparator quarter.

Aerospace bookings were $243.1 million for a book-to-bill ratio of 1.02:1. During the second quarter, the contract for the current engineering phase of the MV-75 FLRAA program was finalized, which resulted in a booking of $27.4 million. Record backlog for the Aerospace segment was $657.2 million at quarter end.

Mr. Gundermann commented, “Our Aerospace business delivered excellent results for the second quarter, achieving record quarterly sales and a 20.3% operating margin. A highlight in the quarter was the finalization of the development contract for the MV-75 FLRAA program, which resulted in a net booking of $27 million. We continue to perform well on that program with expected completion of the development program occurring in mid-2027. Overall, demand for our products remains robust, the team is executing well and we believe we are well positioned for further growth.”

Test Systems Segment Review (compared with the prior-year period, unless noted otherwise)

Test Systems segment sales of $22.7 million were up $11.6 million from the comparator quarter in 2025. Segment sales in the prior-year period were negatively impacted by a $6.4 million revision of estimated costs to complete certain long-term mass transit contracts, reducing revenue recognized in the period.

Test Systems segment operating profit was $0.6 million, compared with an operating loss of $6.7 million in the second quarter of 2025. The revisions to the estimated costs to complete had a $6.9 million detrimental impact to operating income in the prior year. Test Systems profitability continues to be negatively affected by mix and under absorption of fixed costs at current volume levels, as well as approximately $4.1 million of revenue in the current quarter at no margin related to dedicated raw materials for the U.S. Army and U.S. Marine Corps Radio Test Set programs. Margin on that revenue will be recognized through 2026 as production on those programs progress further.

Bookings for the Test Systems segment in the quarter were $63.1 million, inclusive of a $44.7 million order from the U.S. Army initiating full rate production for the TS-4549/T Radio Test Sets Program, which is expected to cover deliveries over the next 18 months. The book-to-bill ratio for the quarter was 2.78:1. Backlog for the Test Systems segment was $123.3 million at quarter end.

Mr. Gundermann commented, “The big news in the second quarter for our Test business was the first production order for the U.S. Army’s TS-4549/T Radio Test program. Its contribution to our second quarter results was marginal, but the program’s impact will be significant as it ramps up in the coming quarters. This first production order is expected to be followed by similar annual orders in each of the coming four years.”

Balance Sheet and Liquidity

Cash provided by operations in the second quarter of 2026 was $30.1 million, reflecting higher cash earnings offset by higher working capital requirements, including higher inventory levels to support anticipated revenue growth in the coming quarters. Capital expenditures in the quarter were $5.7 million and $16.9 million year-to-date. Elevated capital expenditures reflect necessary catch-up investments on previously deferred spending as well as the consolidation of operations and capacity improvement in a new Seattle facility. The Company expects to be free cash flow positive for the remainder of the year.

Long-term debt decreased $24.1 million to $310.3 million at July 4, 2026, compared with the end of 2025. The Company had available liquidity of $253.2 million at quarter-end, including $15.4 million in available cash and $237.8 million in availability on its revolver.

Update on Favorable Appeal Ruling from UK Court of Appeal

As previously announced, a favorable judgment was issued on July 27, 2026, by the United Kingdom Court of Appeal regarding the Company’s long-running patent infringement dispute with Lufthansa Technik AG. The Company’s position is that approximately $2.2 million (including interest) of the damages paid by the Company to Lufthansa is due to be repaid to the Company. The Company also expects to be reimbursed for a portion its legal fees and those previously paid to Lufthansa, but the amount cannot be estimated at this time. Any reimbursements will be recorded when received, which is expected to be in the third quarter of 2026.

2026 Outlook

Astronics expects to set another annual sales record in 2026 with revenue estimated to be $1.02 billion to $1.04 billion for the year, with third quarter sales of $265 million to $275 million. Record backlog at the end of the second quarter was $780.6 million, of which approximately 82% is expected to drive revenue over the next twelve months.

Mr. Gundermann concluded, “We expect to set yet another quarterly sales record in the third quarter, with revenue in the fourth quarter to improve modestly from there. Given our record backlog and the continued strength in our order book, we believe we are well situated to deliver growth for the foreseeable future.”

Planned capital expenditures in 2026 are expected to be in the range of $40 million to $45 million driven largely by costs associated with the Seattle operation consolidation, which will conclude in the third quarter.

The Company estimates future IEEPA tariff refunds will range from $6 million to $8 million although the timing of such receipts cannot be confirmed at this time.

Second Quarter 2026 Webcast and Conference Call

The Company will host a teleconference today at 4:45 p.m. ET. During the teleconference, management will review the financial and operating results for the period and discuss Astronics’ corporate strategy and outlook. A question-and-answer session will follow.

The Astronics conference call can be accessed by calling (201) 493-6784. The listen-only audio webcast can be monitored at investors.astronics.com. To listen to the archived call, dial

(412) 317-6671 and enter replay pin number 13761059. The telephonic replay will be available from 8:00 p.m. on the day of the call through Tuesday, August 25, 2026. The webcast replay can be accessed via the investor relations section of the Company’s website where a transcript will also be posted once available.

About Astronics Corporation

Astronics Corporation (Nasdaq: ATRO) serves the world’s aerospace, defense, and other mission-critical industries with proven innovative technology solutions. Astronics works side-by-side with customers, integrating its array of power, connectivity, lighting, structures, interiors, and test technologies to solve complex challenges. For over 50 years, Astronics has delivered creative, customer-focused solutions with exceptional responsiveness. Today, global airframe manufacturers, airlines, military branches, completion centers, and Fortune 500 companies rely on the collaborative spirit and innovation of Astronics. The Company’s strategy is to increase its value by developing technologies and capabilities that provide innovative solutions to its targeted markets.

Safe Harbor Statement

This news release contains forward-looking statements as defined by the Securities Exchange Act of 1934. One can identify these forward-looking statements by the use of the words “expect,” “anticipate,” “plan,” “may,” “will,” “estimate,” “feeling” or other similar expressions and include all statements with regard to the Company’s 2026 outlook including record annual and quarterly sales, the level of activity in the second half of 2026, the strength of the Company’s market position and product demand as well as any level of growth into the foreseeable future, operating leverage gained on higher volume and resulting profitability, the significance of the U.S. Army Radio Test Set program to results, any future potential orders and the rate and level of sales growth and profitability improvement in the Test segment related to ramping the program up to full rate production, the amount of reimbursement related to the favorable UK award for the intellectual property case and the amount of tariff refunds to be received. The forward-looking statements also include all statements related to achieving any revenue or profitability expectations, expectations of continued growth, the level of liquidity, the level of cash generation and free cash flow, the level of demand by customers and markets and the amount of expected capital expenditures, the amount of investment in an ERP system, the amount of backlog to be recognized as revenue over the next twelve months, statements regarding the amount of opportunities available to be executed and the effectiveness of the Company’s execution in its operations. Because such statements apply to future events, they are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated by the statements. Important factors that could cause actual results to differ materially from what may be stated here include the trend in growth with passenger power and connectivity on airplanes, the state of the aerospace and defense industries, commercial aircraft build rates, the market acceptance of newly developed products, internal production capabilities, the timing of orders received, the status of customer certification processes and delivery schedules, the demand for and market acceptance of new or existing aircraft which contain the Company’s products, the impact of regulatory activity, the need for new and advanced test equipment, customer preferences and relationships, the effectiveness of the Company’s supply chain and execution on opportunities, and other factors which are described in filings by Astronics with the Securities and Exchange Commission. Except as required by applicable law, the Company assumes no obligation to update forward-looking information in this news release whether to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results, financial conditions or prospects, or otherwise.

Use of Non-GAAP Financial Metrics and Additional Financial Information

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, Astronics provides Adjusted Non-GAAP information as additional information for its operating results. References to Adjusted Non-GAAP information are to non-GAAP financial measures. These measures are not required by, in accordance with, or an alternative for, GAAP and may be different from non-GAAP financial measures used by other companies. Astronics management uses these measures for reviewing the financial results of Astronics for budget planning purposes and for making operational and financial decisions. Management believes that providing these non-GAAP financial measures to investors, as a supplement to GAAP financial measures, help investors evaluate Astronics core operating and financial performance and business trends consistent with how management evaluates such performance and trends.

FINANCIAL TABLES FOLLOW

For more information, contact:
Company:
Nancy L. Hedges, Chief Financial Officer
Phone: (716) 805-1599
Email: invest@astronics.com

Investor Relations:
Deborah K. Pawlowski, Alliance Advisors LLC
Phone: (716) 843-3908
Email: dpawlowski@allianceadvisors.com