ý | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
¨ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
New York (State or other jurisdiction of incorporation or organization) | 16-0959303 (IRS Employer Identification Number) | |
| ||
130 Commerce Way, East Aurora, New York | ||
(Address of principal executive offices) | 14052 (Zip code) |
Large accelerated filer | Accelerated filer | ¨ | ||||
Non-accelerated filer | ¨ | Smaller Reporting Company | ¨ |
PART 1 Item 1 Item 2 Item 3 Item 4 PART II Item 1 Item 1a Item 2 Item 3 Item 4 Item 5 Item 6 PAGE 7-1617222622232424252525252526
Current Assets: Cash and Cash Equivalents Accounts Receivable, Net of Allowance for Doubtful Accounts Inventories Prepaid Expenses and Other Current Assets Total Current Assets Property, Plant and Equipment, Net of Accumulated Depreciation Other Assets Intangible Assets, Net of Accumulated Amortization Goodwill Total Assets Current Liabilities: Current Maturities of Long-term Debt Accounts Payable Accrued Expenses and Other Current Liabilities Customer Advance Payments and Deferred Revenue Total Current Liabilities Long-term Debt Other Liabilities Total Liabilities Shareholders’ Equity: Common Stock Accumulated Other Comprehensive Loss Other Shareholders’ Equity Total Shareholders’ Equity Total Liabilities and Shareholders’ Equity Sales Cost of Products Sold Gross Profit Selling, General and Administrative Expenses Income from Operations Interest Expense, Net of Interest Income Income Before Income Taxes Provision for Income Taxes Net Income Earnings per share: Basic Diluted Net Income Other Comprehensive Loss: Foreign Currency Translation Adjustments Change in Accumulated Income on Derivatives – Net of Tax Retirement Liability Adjustment – Net of Tax Other Comprehensive Loss Comprehensive Income Cash Flows From Operating Activities: Net Income Adjustments to Reconcile Net Income to Cash Provided By Operating Activities: Depreciation and Amortization Provisions for Non-Cash Losses on Inventory and Receivables Stock Compensation Expense Deferred Tax Benefit Other Cash Flows from Changes in Operating Assets and Liabilities: Accounts Receivable Inventories Accounts Payable Accrued Expenses Other Current Assets and Liabilities Customer Advanced Payments and Deferred Revenue Income Taxes Supplemental Retirement and Other Liabilities Cash Provided By Operating Activities Cash Flows From Investing Activities: Acquisition of Business, Net of Cash Acquired Capital Expenditures Other Investing Activities Cash Used For Investing Activities Cash Flows From Financing Activities: Proceeds from Long-term Debt Payments for Long-term Debt Debt Acquisition Costs Acquisition Earnout Payments Proceeds from Exercise of Stock Options Income Tax Benefit from Exercise of Stock Options Cash Provided By Financing Activities Effect of Exchange Rates on Cash Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Period Cash and Cash Equivalents at End of Period Finished Goods Work in Progress Raw Material Land Buildings and Improvements Machinery and Equipment Construction in Progress Less Accumulated Depreciation Patents Trade Names Completed and Unpatented Technology Backlog and Customer Relationships Total Intangible Assets Amortization Expense 2015 2016 2017 2018 2019 2020 Aerospace Test Systems Balance at beginning of period Acquisitions Warranties issued Warranties settled Reassessed warranty exposure Balance at end of period Shares Authorized Share Par Value COMMON STOCK Beginning of Period Conversion of Class B Shares to Common Shares Exercise of Stock Options End of Period ADDITIONAL PAID IN CAPITAL Beginning of Period Stock Compensation Expense Exercise of Stock Options End of Period ACCUMULATED OTHER COMPREHENSIVE LOSS Beginning of Period Foreign Currency Translation Adjustment Retirement Liability Adjustment – Net of Tax End of Period RETAINED EARNINGS Beginning of Period Net Income End of Period TOTAL SHAREHOLDERS’ EQUITY Beginning of Period End of Period Weighted average shares - Basic Net effect of dilutive stock options Weighted average shares - Diluted Foreign Currency Translation Adjustments Retirement Liability Adjustment – Before Tax Tax Benefit Retirement Liability Adjustment – After Tax Accumulated Other Comprehensive Loss Foreign Currency Translation Adjustments Change in Accumulated Income on Derivatives: Reclassification to Interest Expense Mark to Market Adjustments for Derivatives Tax Expense Change in Accumulated Income on Derivatives Retirement Liability Adjustments: Reclassifications to General and Administrative Expense: Amortization of prior service cost Amortization of net actuarial losses Tax Benefit Retirement Liability Adjustment Other Comprehensive Loss Service cost Interest cost Amortization of prior service cost Amortization of net actuarial losses Net periodic cost Service cost Interest cost Amortization of prior service cost Amortization of net actuarial losses Net periodic cost date regarding this provision. Sales Aerospace Test Systems Less Intersegment Sales Total Consolidated Sales Operating Profit (Loss) and Margins Aerospace Test Systems Total Operating Profit Deductions from Operating Profit Interest Expense, Net of Interest Income Corporate Expenses and Other Income Before Income Taxes Aerospace Test Systems Corporate Total Assets Classification Acquisition contingent consideration April 4, 2015 Current Liabilities December 31, 2014 Current Liabilities April 4, 2015 Other Liabilities December 31, 2014 Other Liabilities Aerospace, Inc. Sales Gross Profit (sales less cost of products sold) Gross Margin Selling, General and Administrative Expenses SG&A Expenses as a Percentage of Sales Interest Expense, Net of Interest Income Effective Tax Rate Net Income E&D costs were $21.3 million in the second quarter of 2015 (12.3% of sales), compared to $20.6 million in last year’s second quarter (11.9% of sales). The increase in E&D costs was attributable to the incremental E&D costs of Armstrong ($1.6 million). Sales Operating profit Operating Margin Total Assets Backlog Aerospace Sales by Market Commercial Transport Military Business Jet Other Aerospace Sales by Product Line Electrical Power & Motion Lighting & Safety Avionics Systems Certification Structures Other Sales of Avionics products to the Commercial Transport market increased by $3.3 million. Sales to the Military market decreased $1.5 million when compared with last year’s first six months, due to lower sales of Electrical Power & Motion and Other products, partially offset by higher sales of Lighting & Safety products to this market. Sales to the Business Jet market decreased Sales Less Intersegment Sales Net Sales Operating profit (loss) Operating Margin Total Assets Backlog Test Systems Sales by Market Commercial Electronics Military Long-term Debt Purchase Obligations Interest on Long-term Debt Supplemental Retirement Plan and Post Retirement Obligations Operating Leases Other Long-term Liabilities Total Contractual Obligations April April 4,
2015 December 31,
2014 (Unaudited) $ 22,563 $ 21,197 76,346 88,888 120,784 115,053 17,628 20,680 237,321 245,818 124,917 116,316 6,382 5,632 112,033 94,991 119,630 100,153 $ 600,283 $ 562,910 $ 2,658 $ 2,796 34,875 27,903 31,063 33,465 37,039 45,052 105,635 109,216 214,099 180,212 43,558 45,305 363,292 334,733 221 219 (15,434 ) (11,949 ) 252,204 239,907 236,991 228,177 $ 600,283 $ 562,910 July 4,
2015 December 31,
2014 (Unaudited) Current Assets: Cash and Cash Equivalents $ 23,767 $ 21,197 Accounts Receivable, Net of Allowance for Doubtful Accounts 98,836 88,888 Inventories 133,418 115,053 Prepaid Expenses and Other Current Assets 18,057 20,680 Total Current Assets 274,078 245,818 Property, Plant and Equipment, Net of Accumulated Depreciation 126,329 116,316 Other Assets 8,995 5,632 Intangible Assets, Net of Accumulated Amortization 114,230 94,991 Goodwill 114,578 100,153 Total Assets $ 638,210 $ 562,910 Current Liabilities: Current Maturities of Long-term Debt $ 2,702 $ 2,796 Accounts Payable 38,609 27,903 Accrued Expenses and Other Current Liabilities 35,996 33,465 Customer Advance Payments and Deferred Revenue 32,588 45,052 Total Current Liabilities 109,895 109,216 Long-term Debt 228,469 180,212 Other Liabilities 43,698 45,305 Total Liabilities 382,062 334,733 Shareholders’ Equity: Common Stock 222 219 Accumulated Other Comprehensive Loss (14,840 ) (11,949 ) Other Shareholders’ Equity 270,766 239,907 Total Shareholders’ Equity 256,148 228,177 Total Liabilities and Shareholders’ Equity $ 638,210 $ 562,910 AprilJuly 4, 2015 With Comparative Figures for 2014 Three Months Ended April 4,
2015 March 29,
2014 $ 161,638 $ 140,951 121,476 110,946 40,162 30,005 22,619 16,378 17,543 13,627 1,246 2,323 16,297 11,304 5,614 3,797 $ 10,683 $ 7,507 $ 0.49 $ 0.35 $ 0.47 $ 0.33 Six Months Ended Three Months Ended July 4,
2015 June 28,
2014 July 4,
2015 June 28,
2014Sales $ 334,794 $ 315,514 $ 173,156 $ 174,563 Cost of Products Sold 245,180 242,307 123,704 131,361 Gross Profit 89,614 73,207 49,452 43,202 Selling, General and Administrative Expenses 43,916 37,099 21,297 20,721 Income from Operations 45,698 36,108 28,155 22,481 Interest Expense, Net of Interest Income 2,357 4,882 1,111 2,559 Income Before Income Taxes 43,341 31,226 27,044 19,922 Provision for Income Taxes 14,968 10,575 9,354 6,778 Net Income $ 28,373 $ 20,651 $ 17,690 $ 13,144 Earnings Per Share: Basic $ 1.29 $ 0.96 $ 0.80 $ 0.61 Diluted $ 1.24 $ 0.91 $ 0.77 $ 0.58 AprilJuly 4, 2015 With Comparative Figures for 2014 Three Months Ended April 4,
2015 March 29,
2014 $ 10,683 $ 7,507 (3,646 ) (386 ) — 20 161 102 (3,485 ) (264 ) $ 7,198 $ 7,243 Six Months Ended Three Months Ended July 4,
2015 June 28,
2014 July 4,
2015 June 28,
2014Net Income $ 28,373 $ 20,651 $ 17,690 $ 13,144 Other Comprehensive (Loss) Income: Foreign Currency Translation Adjustments (3,214 ) (568 ) 432 (182 ) Change in Accumulated Loss on Derivatives – Net of Tax — (8 ) — (28 ) Retirement Liability Adjustment – Net of Tax 323 208 162 106 Other Comprehensive (Loss) Income (2,891 ) (368 ) 594 (104 ) Comprehensive Income $ 25,482 $ 20,283 $ 18,284 $ 13,040 ThreeAprilJuly 4, 2015 April 4,
2015 March 29,
2014 $ 10,683 $ 7,507 6,127 4,838 (74 ) 312 506 394 (40 ) (816 ) 110 (879 ) 18,563 (37,632 ) (3,474 ) 8,699 5,517 9,520 (4,535 ) (1,275 ) (633 ) (382 ) (8,796 ) 9,203 2,416 2,776 409 308 26,779 2,573 (52,615 ) (70,275 ) (7,059 ) (16,906 ) (300 ) — (59,974 ) (87,181 ) 40,000 58,000 (5,663 ) (405 ) — (280 ) — (53 ) 402 588 708 1,261 35,447 59,111 (886 ) (21 ) 1,366 (25,518 ) 21,197 54,635 $ 22,563 $ 29,117 July 4,
2015 June 28,
2014Cash Flows From Operating Activities: Net Income $ 28,373 $ 20,651 Adjustments to Reconcile Net Income to Cash Provided By Operating Activities: Depreciation and Amortization 12,545 10,309 Provisions for Non-Cash Losses on Inventory and Receivables 957 510 Stock Compensation Expense 1,143 866 Deferred Tax Benefit (576 ) (2,765 ) Non-Cash Earnout Liability Adjustment (1,268 ) (83 ) Other 158 (565 ) Cash Flows from Changes in Operating Assets and Liabilities: Accounts Receivable (3,797 ) (33,723 ) Inventories (16,786 ) 17,736 Accounts Payable 9,192 3,702 Accrued Expenses (857 ) 760 Other Current Assets and Liabilities (352 ) (1,319 ) Customer Advanced Payments and Deferred Revenue (13,287 ) 3,852 Income Taxes 4,610 2,684 Supplemental Retirement and Other Liabilities 820 615 Cash Provided By Operating Activities 20,875 23,230 Cash Flows From Investing Activities: Acquisition of Business, Net of Cash Acquired (52,615 ) (67,851 ) Capital Expenditures (12,277 ) (23,091 ) Other Investing Activities (2,678 ) — Cash Used For Investing Activities (67,570 ) (90,942 ) Cash Flows From Financing Activities: Proceeds from Long-term Debt 55,000 58,150 Payments for Long-term Debt (6,331 ) (25,883 ) Debt Acquisition Costs — (280 ) Acquisition Earnout Payments (2 ) (42 ) Proceeds from Exercise of Stock Options 638 804 Income Tax Benefit from Exercise of Stock Options 708 1,261 Cash Provided By Financing Activities 50,013 34,010 Effect of Exchange Rates on Cash (748 ) (108 ) Increase (Decrease) in Cash and Cash Equivalents 2,570 (33,810 ) Cash and Cash Equivalents at Beginning of Period 21,197 54,635 Cash and Cash Equivalents at End of Period $ 23,767 $ 20,825 Aprilmonth periodand six months ended AprilJuly 4, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.$22.2$21.3 million and $17.2$20.6 million for the three months ended AprilJuly 4, 2015 and March 29,June 28, 2014, respectively, and $43.6 million and $37.9 million for the six months ended July 4, 2015 and June 28, 2014, respectively. Selling, general and administrative expenses include costs primarily related to our sales and marketing departments and administrative departments. Interest expense is shown net of interest income. Interest income was insignificant for the three and six months ended AprilJuly 4, 2015 and March 29,June 28, 2014.month periodand six months ended March 29,June 28, 2014. The Company classified the cash flows from hedging transactions in the same category as the cash flows from the respective hedged items. No derivative instruments were outstanding at or for the three month periodor six months ended AprilJuly 4, 2015.periods ending Aprilthree and six months ended July 4, 2015 and March 29,June 28, 2014.(In thousands) April 4,
2015 December 31,
2014 $ 33,021 $ 28,763 25,134 28,488 62,629 57,802 $ 120,784 $ 115,053 (In thousands) July 4,
2015 December 31,
2014Finished Goods $ 32,784 $ 28,763 Work in Progress 31,202 28,488 Raw Material 69,432 57,802 $ 133,418 $ 115,053 (In thousands) April 4,
2015 December 31,
2014 $ 11,258 $ 10,008 76,314 74,755 79,126 73,062 7,447 4,757 174,145 162,582 49,228 46,266 $ 124,917 $ 116,316 (In thousands) July 4,
2015 December 31,
2014Land $ 11,162 $ 10,008 Buildings and Improvements 78,900 74,755 Machinery and Equipment 83,380 73,062 Construction in Progress 5,417 4,757 178,859 162,582 Less Accumulated Depreciation 52,530 46,266 $ 126,329 $ 116,316 April 4, 2015 December 31, 2014 (In thousands) Weighted
Average Life Gross Carrying
Amount Accumulated
Amortization Gross Carrying
Amount Accumulated
Amortization 6 Years $ 2,146 $ 1,124 $ 2,146 $ 1,077 9 Years 8,217 1,472 8,304 1,288 7 Years 17,957 4,852 18,107 4,396 12 Years 113,539 22,378 93,448 20,253 8 Years $ 141,859 $ 29,826 $ 122,005 $ 27,014 July 4, 2015 December 31, 2014 (In thousands) Patents 6 Years $ 2,146 $ 1,171 $ 2,146 $ 1,077 Non-compete Agreement 5 Years 2,600 238 — — Trade Names 9 Years 10,230 1,748 8,304 1,288 Completed and Unpatented Technology 7 Years 24,079 5,584 18,107 4,396 Backlog and Customer Relationships 12 Years 107,928 24,012 93,448 20,253 Total Intangible Assets 8 Years $ 146,983 $ 32,753 $ 122,005 $ 27,014 Three Months Ended (In thousands) April 4,
2015 March 29,
2014 $ 2,852 $ 2,467 Six Months Ended Three Months Ended (In thousands) July 4,
2015 June 28,
2014 July 4,
2015 June 28,
2014Amortization Expense $ 5,772 $ 4,904 $ 2,920 $ 2,437 (In thousands) $ 11,100 10,710 10,293 9,980 9,579 9,524 (In thousands) 2015 $ 11,452 2016 10,791 2017 10,361 2018 10,048 2019 9,647 2020 9,094 (In thousands) December 31,
2014 Acquisition Foreign
Currency
Translation April 4,
2015 $ 100,153 $ 20,325 $ (848 ) $ 119,630 — — — — $ 100,153 $ 20,325 $ (848 ) $ 119,630 (In thousands) December 31,
2014 Acquisition July 4,
2015Aerospace $ 100,153 $ 15,174 $ (749 ) $ 114,578 Test Systems — — — — $ 100,153 $ 15,174 $ (749 ) $ 114,578 0.25%25 and 0.50% per annum50 basis points on the unused portion of the total revolving credit commitment, based on the Company’s leverage ratio.AprilJuly 4, 2015 there was $200.0$215.0 million outstanding on the revolving credit facility and there remains approximately $148.9$133.9 million available, net of outstanding letters of credit. The credit facility allocates up to $20 million of the $350 million revolving credit line for the issuance of letters of credit, including certain existing letters of credit. At AprilJuly 4, 2015, outstanding letters of credit totaled $1.1 million.two2 fiscal quarters following the closing of an acquisition permitted under the Agreement. The Company will pay interest on the unpaid principal amount of the facility at a rate equal to one-, three- or six-month LIBOR plus between 137.5 basis points and 225 basis points based upon the Company’s leverage ratio. The Company will also pay a commitment fee to the Lenderslenders in an amount equal to between 17.5 basis points and 35 basis points on the undrawn portion of the credit facility, based upon the Company’s leverage ratio. The fixed charge coverage ratio under the Original Facility has been replaced with a minimum interest coverage ratio (Adjusted EBITDA to interest expense) of 3.0 to 1 for the term of the Agreement. The Company’s interest coverage ratio was 22.830.9 to 1 at AprilJuly 4, 2015. The Company’s leverage ratio was 1.51.7 to 1 at AprilJuly 4, 2015.twelve12 to sixty60 months. The Company determines warranty reserves needed by product line based on experience and current facts and circumstances. Activity in the warranty accrual is summarized as follows: Three Months Ended (In thousands) April 4,
2015 March 29,
2014 $ 4,884 $ 2,796 500 790 738 329 (726 ) (334 ) 76 156 $ 5,472 $ 3,737 Six Months Ended Three Months Ended (In thousands) July 4,
2015 June 28,
2014 July 4,
2015 June 28,
2014Balance at Beginning of Period $ 4,884 $ 2,796 $ 5,472 $ 3,737 Acquisitions 500 790 — — Warranties Issued 1,139 876 401 547 Warranties Settled (1,427 ) (803 ) (701 ) (469 ) Reassessed Warranty Exposure 223 266 147 110 Balance at End of Period $ 5,319 $ 3,925 $ 5,319 $ 3,925 AprilJuly 4, 2015 or December 31, 2014, nor were any penalties or interest costs included in expense for the three month periods ending Aprilor six months ended July 4, 2015 and March 29,June 28, 2014. The years under which we conducted our evaluation coincided with the tax years currently still subject to examination by major federal and state tax jurisdictions, those being 2012 through 2014 for federal purposes and 2011 through 2014 for state purposes.AprilJuly 4, 2015 and March 29,June 28, 2014, were approximately 34.4% and 33.6%, respectively. The effective tax rate for the second quarter and first quarterssix months of 2015 and 2014 were lower than the federal statutory rate, due to the domestic production activity deduction and lower effective tax rates on foreign income.threesix months ended AprilJuly 4, 2015 are summarized as follows: Number of Shares (Dollars and Shares in thousands) Amount Common
Stock Convertible
Class B Stock 40,000 10,000 $ 0.01 $ 0.01 $ 219 16,608 5,322 — 411 (411 ) 2 68 81 $ 221 17,087 4,992 $ 49,659 506 1,108 $ 51,273 $ (11,949 ) (3,646 ) 161 $ (15,434 ) $ 190,248 10,683 $ 200,931 $ 228,177 $ 236,991 Number of Shares (Dollars and Shares in thousands) Amount Shares Authorized 40,000 10,000 Share Par Value $ 0.01 $ 0.01 COMMON STOCK Beginning of Period $ 219 16,608 5,322 Conversion of Class B Shares to Common Shares — 569 (569 ) Exercise of Stock Options 3 94 102 End of Period $ 222 17,271 4,855 ADDITIONAL PAID IN CAPITAL Beginning of Period $ 49,659 Stock Compensation Expense 1,143 Exercise of Stock Options 1,343 End of Period $ 52,145 ACCUMULATED OTHER COMPREHENSIVE LOSS Beginning of Period $ (11,949 ) Foreign Currency Translation Adjustment (3,214 ) Retirement Liability Adjustment – Net of Tax 323 End of Period $ (14,840 ) RETAINED EARNINGS Beginning of Period $ 190,248 Net Income 28,373 End of Period $ 218,621 TOTAL SHAREHOLDERS’ EQUITY Beginning of Period $ 228,177 End of Period $ 256,148 Three Months Ended (In thousands) April 4,
2015 March 29,
2014 22,011 21,544 795 1,108 22,806 22,652 Six Months Ended Three Months Ended (In thousands) July 4,
2015 June 28,
2014 July 4,
2015 June 28,
2014Weighted Average Shares - Basic 22,055 21,616 22,100 21,684 Net Effect of Dilutive Stock Options 765 1,032 736 954 Weighted Average Shares - Diluted 22,820 22,648 22,836 22,638 The number ofThere were no common shares covered by out-of-the-money stock options were insignificant at AprilJuly 4, 2015.(In thousands) April 4,
2015 December 31,
2014 $ (7,000 ) $ (3,354 ) (12,975 ) (13,223 ) 4,541 4,628 (8,434 ) (8,595 ) $ (15,434 ) $ (11,949 ) (In thousands) July 4,
2015 December 31,
2014Foreign Currency Translation Adjustments $ (6,568 ) $ (3,354 ) Retirement Liability Adjustment – Before Tax (12,726 ) (13,223 ) Tax Benefit 4,454 4,628 Retirement Liability Adjustment – After Tax (8,272 ) (8,595 ) Accumulated Other Comprehensive Loss $ (14,840 ) $ (11,949 ) Three Months Ended (In thousands) April 4,
2015 March 29,
2014 $ (3,646 ) $ (386 ) — 15 — 14 — (9 ) — 20 130 136 118 27 (87 ) (61 ) 161 102 $ (3,485 ) $ (264 ) Six Months Ended Three Months Ended (In thousands) July 4,
2015 June 28,
2014 July 4,
2015 June 28,
2014Foreign Currency Translation Adjustments $ (3,214 ) $ (568 ) $ 432 $ (182 ) Change in Accumulated Income on Derivatives: Reclassification to Interest Expense — 34 — 17 Mark to Market Adjustments for Derivatives — (45 ) — (59 ) Tax Expense — 3 — 14 Change in Accumulated Income on Derivatives — (8 ) — (28 ) Retirement Liability Adjustments: Reclassifications to General and Administrative Expense: Amortization of Prior Service Cost 260 265 130 129 Amortization of Net Actuarial Losses 237 54 119 27 Tax Benefit (174 ) (111 ) (87 ) (50 ) Retirement Liability Adjustment 323 208 162 106 Other Comprehensive Loss $ (2,891 ) $ (368 ) $ 594 $ (104 ) Three Months Ended (In thousands) April 4,
2015 March 29,
2014 $ 48 $ 62 211 188 124 130 112 27 $ 495 $ 407 Six Months Ended Three Months Ended (In thousands) July 4,
2015 June 28,
2014 July 4,
2015 June 28,
2014Service Cost $ 97 $ 124 $ 48 $ 62 Interest Cost 422 376 211 188 Amortization of Prior Service Cost 247 260 124 130 Amortization of Net Actuarial Losses 225 54 112 27 Net Periodic Cost $ 991 $ 814 $ 495 $ 407 Three Months Ended (In thousands) April 4,
2015 March 29,
2014 $ 2 $ 1 10 8 6 6 6 — $ 24 $ 15 Six Months Ended Three Months Ended (In thousands) July 4,
2015 June 28,
2014 July 4,
2015 June 28,
2014Service Cost $ 3 $ 1 $ 2 $ 1 Interest Cost 19 16 10 8 Amortization of Prior Service Cost 13 12 6 6 Amortization of Net Actuarial Losses 12 — 7 — Net Periodic Cost $ 47 $ 29 $ 25 $ 15 twothree major customers, each in excess of 10% of consolidated sales. The loss of eitherany of these customers would significantly, negatively impact our sales and earnings.twothree customers represented 24%22%, 14% and 15%11% of consolidated sales for the six months ended July 4, 2015 and 20%, 13% and 18% for the three months ended AprilJuly 4, 2015. Sales to these customers were in the Aerospace segment.and Test Systems segments. Accounts receivable from these customers at AprilJuly 4, 2015 was approximately $21.2$47.4 million.twothree customers in the Aerospace segmentand Test Systems segments that represented 20%17%, 15% and 17% of consolidated sales for the six months ended June 28, 2014 and 15%, 14% and 23% of consolidated sales for the three months ended March 29,June 28, 2014.However, ifOn July 15, 2015, Lufthansa providesadvised AES of their intention to enforce the required bank guarantees specified inaccounting provisions of the decision, the Company may be requiredwhich require AES to offer a recall of products which are in the distribution channels in Germany, and provide certain financial information regarding sales of the infringing product to enable Lufthansa to make an estimate of requested damages. AES is currently evaluating the information requirements. Additionally, if Lufthansa provides the additional required bank guarantees specified in the decision, the Company may be required to cease distribution of infringing products in Germany (if any). No such bank guarantees haveguarantee has been issued to date.AprilJuly 4, 2015.AprilJuly 4, 2015.AprilJuly 4, 2015 and March 29,June 28, 2014 and a reconciliation of segment operating profit to income before income taxes. Operating profit is net sales less cost of products sold and other operating expenses excluding interest and corporate expenses. Cost of products sold and other operating expenses are directly identifiable to the respective segment. Three Months Ended (Dollars in thousands) April 4,
2015 March 29,
2014 $ 142,352 $ 122,372 19,341 18,689 (55 ) (110 ) 19,286 18,579 $ 161,638 $ 140,951 $ 23,402 $ 17,490 16.4 % 14.3 % (2,225 ) (1,695 ) (11.5 )% (9.1 )% 21,177 15,795 13.1 % 11.2 % 1,246 2,323 3,634 2,168 $ 16,297 $ 11,304 Six Months Ended Three Months Ended (Dollars in thousands) July 4,
2015 June 28,
2014 July 4,
2015 June 28,
2014Sales Aerospace $ 274,522 $ 243,895 $ 132,170 $ 121,523 Test Systems 60,327 71,856 40,986 53,167 Less Intersegment Sales (55 ) (237 ) — (127 ) 60,272 71,619 40,986 53,040 Total Consolidated Sales $ 334,794 $ 315,514 $ 173,156 $ 174,563 Operating Profit and Margins Aerospace $ 43,673 $ 38,251 $ 20,271 $ 20,761 15.9 % 15.7 % 15.3 % 17.1 % Test Systems 7,638 2,335 9,863 4,030 12.7 % 3.2 % 24.1 % 7.6 % Total Operating Profit 51,311 40,586 30,134 24,791 15.3 % 12.9 % 17.4 % 14.2 % Deductions from Operating Profit Interest Expense, Net of Interest Income 2,357 4,882 1,111 2,559 Corporate Expenses and Other 5,613 4,478 1,979 2,310 Income Before Income Taxes $ 43,341 $ 31,226 $ 27,044 $ 19,922 (In thousands) April 4,
2015 December 31,
2014 $ 512,777 $ 468,481 64,413 69,247 23,093 25,182 $ 600,283 $ 562,910 (In thousands) July 4,
2015 Aerospace $ 518,424 $ 468,481 Test Systems 91,817 69,247 Corporate 27,969 25,182 Total Assets $ 638,210 $ 562,910 AprilJuly 4, 2015 and December 31, 2014:(In thousands) Total Level 1 Level 2 Level 3 $ (1,578 ) — — $ (1,578 ) — — — — $ (173 ) — — $ (173 ) $ (1,651 ) — — $ (1,651 ) (In thousands) Classification Total Level 1 Level 2 Level 3 Acquisition contingent consideration July 4, 2015 Current Liabilities $ (308 ) — — $ (308 ) December 31, 2014 Current Liabilities — — — — July 4, 2015 Other Liabilities $ (175 ) — — $ (175 ) December 31, 2014 Other Liabilities $ (1,651 ) — — $ (1,651 ) month periodand six months ended AprilJuly 4, 2015 is primarily due to accretion, which is classifiedfair value adjustments of $1.3 million, resulting from the re-evaluation of the probability of the achievement of the contingent consideration targets. This adjustment was recorded within interest expenseSG&A expenses in the consolidated condensed statement of operations.AprilJuly 4, 2015, the fair value of goodwill and intangible assets classified using Level 3 inputs are comprised of the Armstrong goodwill and intangible assets acquired on January 14, 2015, which are currently valued based on management’s best estimates. When the accounting for the acquisition is finalized, these intangible assets will be valued using discounted cash flow methodology.AprilJuly 4, 2015, the Company concluded that no indicators of impairment relating to intangible assets or goodwill existed and an interim test was not performed.ThisOn July 9, 2015, the FASB voted to defer the effective date by one year to December 15, 2017 for interim and annual reporting periods beginning after that date and permitted early adoption of the standard, but not before the original effective date of December 15, 2016. Therefore, this authoritative guidance will be effective as of the Company’s first quarter of fiscal 2017. However, the FASB has proposed a deferral of the effective date of the new revenue standard by one year.2018. The Company is currently evaluating the impact that adoption of this guidance will have on its consolidated financial statements and disclosures.In April 2015, the FASB issued authoritative guidance regarding customer’s accounting for fees paid in a cloud computing arrangement. The authoritative guidance provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the guidance requires the software license element of the arrangement to be accounted for consistent with other software license agreements. This authoritative guidance will be effective as of the Company’s first quarter of fiscal 2016, with early adoption permitted. The Company is currently evaluating the impact that adoption of this guidance will have on its consolidated financial statements. approximately $52.6 million in cash. Armstrong, located in Itasca, Illinois, is a leading provider of engineering, design and certification solutions for commercial aircraft, specializing in connectivity, in-flight entertainment, and electrical power systems. Armstrong will beis included in our Aerospace segment. This transaction was not considered material to the Company’s financial position or results of operations.approximately $69.4 million in cash, including a net working capital adjustment of approximately $16.4 million. Located in Irvine, California, ATS is a leading provider of highly-engineered automated test systems, subsystems and instruments for the semiconductor, commercial electronics, commercial aerospace and defense industries. ATS provides fully customized testing systems and support services for these markets. It also designs and manufactures test equipment under the test instrument brands known as Racal and Talon. The acquisition strengthens our service offerings and expertise in the test market. This subsidiary is included in our Test Systems segment. The purchase price allocation for this acquisition has been finalized. Purchased intangible assets are deductible for tax purposes.OEMsOEM's and prime government contractors for both commercial electronics and military products. approximately $52.6 million in cash. Specializing in connectivity, in-flight entertainment, and electrical power systems, Armstrong is a leading provider of engineering design and certification solutions for commercial aircraft, and is located in Itasca, Illinois. Armstrong is included in our Aerospace segment.approximately $69.4 million in cash. The addition of ATS complements products and technologies that the Test Systems segment offers. Three Months Ended (Dollars in thousands) April 4,
2015 March 29,
2014 $ 161,638 $ 140,951 $ 40,162 $ 30,005 24.8 % 21.3 % $ 22,619 $ 16,378 14.0 % 11.6 % $ 1,246 $ 2,323 34.4 % 33.6 % $ 10,683 $ 7,507 Six Months Ended Three Months Ended (Dollars in thousands) July 4,
2015 June 28,
2014 July 4,
2015 June 28,
2014Sales $ 334,794 $ 315,514 $ 173,156 $ 174,563 Gross Profit (sales less cost of products sold) $ 89,614 $ 73,207 $ 49,452 $ 43,202 Gross Margin 26.8 % 23.2 % 28.6 % 24.7 % Selling, General and Administrative Expenses $ 43,916 $ 37,099 $ 21,297 $ 20,721 SG&A Expenses as a Percentage of Sales 13.1 % 11.8 % 12.3 % 11.9 % Interest Expense, Net of Interest Income $ 2,357 $ 4,882 $ 1,111 $ 2,559 Effective Tax Rate 34.5 % 33.9 % 34.6 % 34.0 % Net Income $ 28,373 $ 20,651 $ 17,690 $ 13,144 firstsecond quarter of 2015 increased 14.7%were $173.2 million, down slightly from $174.6 million for the same period last year as strength in Aerospace sales helped to $161.6offset lower Test Systems segment sales. The 2015 second quarter included $7.1 million compared with $141.0in sales from Armstrong Aerospace, Inc. (“Armstrong”), acquired on January 14, 2015. Organic sales for the quarter decreased $8.5 million, or 4.9%, on lower Test System segment sales.Aerospace segment sales increased $19.9 million to $142.4 million and Test Systems segment sales increased $0.7 million to $19.3 million. First quarter 2014 sales reflect four weeks of activity for ATS, which was acquired on February 28, 2014. The 2015 first quarter included incremental sales of $6.6 million from Armstrong acquired on January 14, 2015 (see Notes to Consolidated Condensed Financial Statements, Note 18), while organic sales increased $14.0 million, or 9.9% to $155.0 million.Consolidated costCost of products sold increased $10.6in the second quarter of 2014 was negatively impacted by $8.7 million related to $121.5inventory step-up expense of acquired businesses, as compared to $0.1 million in the firstsecond quarter of 2015 from $110.9 million for the same period last year.2015. The increase was primarily due to the incremental cost of products sold associated with Armstrong of $4.9$5.5 million increasedwere largely offset by lower cost of products sold associated with increased organicresulting from the decreased sales volumes and increased engineering and development (“E&D”) costs. E&D costs were $22.2 millionvolume in the first quarter of 2015, compared to $17.2 million in last year’s first quarter . The increase in E&D costs were largely attributable to the incremental E&D costs of ATS ($1.9 million) and Armstrong ($1.3 million). Cost of products sold in the first quarter of 2014 included approximately $8.7 million related to inventory step-up expense, as compared to $0.6 million in the first quarter of 2015.Test Systems segment. Consolidated cost of products sold as a percentage of sales was 75.2%71.4% in the firstsecond quarter of 2015 compared with 78.7%75.3% in the firstsecond quarter of 2014.$22.6$21.3 million, or 14.0%12.3% of sales, in the firstsecond quarter of 2015 compared with $16.4$20.7 million, or 11.6%11.9% of sales, in the same period last year. The increase was due primarily to the incremental SG&A costs of ATSArmstrong, which added $1.6 million to SG&A in the second quarter of 2015, including $0.7 million of amortization expense for acquired intangible assets of that business.$3.1$4.4 million to SG&A in the first quartersix months of 2015, including $0.8$1.7 million of amortization expense for acquired intangible assets of those businesses. Additionally, higher SG&A expense reflects increased headcount and compensation costs to support growth.34.4%approximately 34.5% and 33.6%33.9% for the six months and 34.6% and 34.0% for the three months ended AprilJuly 4, 2015 and March 29,June 28, 2014, respectively. The effective tax rate for the second quarter and first quarterssix months of 2015 and 2014 were lower than the federal statutory rate, due to the domestic production activity deduction and lower effective tax rates on foreign income.AprilJuly 4, 2015, the earnings per share increase, as compared to the respective periodperiods in the prior year,is due primarily to the increasein net income. Earnings per share for all prior periods presented have been calculated reflecting the effect of the one-for-five Class B share distribution for shareholders of record on September 5, 2014.$740$715 million. Approximately $550$545 million to $580$570 million of forecasted 2015 revenue is expected from the Aerospace segment, while approximately $130$135 million to $160$145 million of the forecasted revenue is expected from the Test Systems segment.AprilJuly 4, 2015 was $378.5$352.0 million, of which approximately $314.1$263.0 million is expected to ship in 2015. Three Months Ended (In thousands) April 4,
2015 March 29,
2014 $ 142,352 $ 122,372 $ 23,402 $ 17,490 16.4 % 14.3 % April 4,
2015 December 31,
2014 $ 512,777 $ 468,481 $ 233,955 $ 223,769 Three Months Ended (In thousands) April 4,2015 March 29,
2014 $ 120,194 $ 99,287 9,258 8,958 8,092 9,866 4,808 4,261 $ 142,352 $ 122,372 Three Months Ended (In thousands) April 4,
2015 March 29,2014 $ 69,570 $ 65,833 42,077 35,091 17,367 12,752 4,574 — 3,956 3,638 4,808 5,058 $ 142,352 $ 122,372 Six Months Ended Three Months Ended (In thousands) July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 Sales $ 274,522 $ 243,895 $ 132,170 $ 121,523 Operating Profit $ 43,673 $ 38,251 $ 20,271 $ 20,761 Operating Margin 15.9 % 15.7 % 15.3 % 17.1 % Aerospace Sales by Market (In thousands) Commercial Transport $ 227,823 $ 195,790 $ 107,629 $ 96,504 Military 19,827 21,310 10,569 12,352 Business Jet 17,153 18,175 9,061 8,308 Other 9,719 8,620 4,911 4,359 $ 274,522 $ 243,895 $ 132,170 $ 121,523 Aerospace Sales by Product Line (In thousands) Electrical Power & Motion $ 137,415 $ 126,482 $ 67,844 $ 60,651 Lighting & Safety 79,985 74,598 37,907 39,507 Avionics 29,030 25,250 11,663 12,497 Systems Certification 10,344 — 5,771 — Structures 8,029 7,343 4,074 3,704 Other 9,719 10,222 4,911 5,164 $ 274,522 $ 243,895 $ 132,170 $ 121,523 (In thousands) July 4, 2015 December 31, 2014 Total Assets $ 518,424 $ 468,481 Backlog $ 236,264 $ 223,769 $19.9$10.6 million, or 16.3%8.8%, when compared with the prior year’s firstsecond quarter to $142.4$132.2 million. Organic sales grew 10.9%2.9%, or $13.3$3.5 million, and sales from Armstrong added $6.6$7.1 million.$20.9$11.1 million, of which $6.6$7.1 million was related to the acquisition of Armstrong, primarily comprised of Systems Certification sales. The remaining increase was primarily related to higher organic sales of Lighting & Safety, Avionics and Electrical Power & Motion products which increased $8.0 million or 13.9%, partially offset by lower sales of Avionics products. Organic Lighting and Safety product sales to the Commercial Transport market increased by $5.4 million. Organic salesSales of Avionics products to the Commercial Transport market decreased by $2.6 million. Sales to the Military market decreased $1.8 million when compared with last year’s second quarter as Electrical Power & Motion and Other product sales decreased. Sales to the Business Jet market increased $0.8 million compared with the same period last year as increased Avionics sales were partially offset by lower Lighting & Safety product sales.$5.0$30.6 million, or 12.6%, when compared with the prior year’s first six months, to $274.5 million. Organic sales grew 6.9%, or $16.8 million, and sales from Armstrong added $13.8 million.$3.5$12.6 million, or 10.5%. Sales of Lighting & Safety products to the Commercial Transport market increased by $5.0 million.$1.8$1.0 million when compared with last year’s first quarter,during this period due to lower organic sales of avionics and lightingLighting & Safety products to this market.quartersix months of 2015 was $23.4$43.7 million, or 16.4%15.9% of sales, compared with $17.5$38.3 million, or 14.3%15.7% of sales, in the same period last year. Approximately $0.6 million in operating profit was related to Armstrong, which was acquired in January 2015. Armstrong inventory step-up expense was $0.6 in the first quarter of 2015. Operating profit in the first quarter of 2014 included expense of $2.4 million associated with inventory step-up, primarily related to AeroSat and PGA, which were acquired in the fourth quarter of 2013. Operating leverage gained on increased volume for the organic business was partially offset by approximately $1.9 million of higher organic E&D costs.costs of approximately $2.3 million. Aerospace SG&A expense increased $2.6$4.3 million in the first quartersix months of 2015 as compared with 2014. The increaseIncremental SG&A from Armstrong was due primarily to the incremental SG&A of Armstrong which added $1.2$2.7 million, including $0.4$1.1 million of purchased intangible asset amortization expense for acquired intangible assets.Outlook The first six months of 2014 included inventory step-up costs of $2.4 million that reduced normal operating margins for Aerospace – that period.$550$545 million to $580$570 million. The Aerospace segment’s backlog at the end of the firstsecond quarter of 2015 was $234.0$236.3 million with approximately $209.5$187.6 million expected to be shipped over the remaining part of 2015 and $219.8$214.6 million is expected to ship over the next 12 months. Three Months Ended (In thousands) April 4,
2015 March 29,
2014 $ 19,341 $ 18,689 (55 ) (110 ) $ 19,286 $ 18,579 $ (2,225 ) $ (1,695 ) (11.5 )% (9.1 )% April 4,
2015 December 31,
2014 $ 64,413 $ 69,247 $ 144,514 $ 146,964 Three Months Ended (In thousands) April 4,
2015 March 29,
2014 $ 4,752 $ 14,337 14,534 4,242 $ 19,286 $ 18,579 Six Months Ended Three Months Ended (In thousands) July 4, 2015 June 28, 2014 July 4, 2015 June 28, 2014 Sales $ 60,327 $ 71,856 $ 40,986 $ 53,167 Less Intersegment Sales (55 ) (237 ) — (127 ) Net Sales $ 60,272 $ 71,619 $ 40,986 $ 53,040 Operating profit (loss) $ 7,638 $ 2,335 $ 9,863 $ 4,030 Operating Margin 12.7 % 3.2 % 24.1 % 7.6 % Test Systems Sales by Market (In thousands) Commercial Electronics $ 36,258 $ 57,457 $ 31,507 $ 43,120 Military 24,014 14,162 9,479 9,920 $ 60,272 $ 71,619 $ 40,986 $ 53,040 (In thousands) July 4, 2015 December 31, 2014 Total Assets $ 91,817 $ 69,247 Backlog $ 115,770 $ 146,964 first quarter increased $0.7decreased $12.0 million to $19.3$41.0 million compared to the same period in 2014, a decrease of 22.7%.$18.6$71.6 million for the same period in 2014. During 2014 ATS completed delivery of units with its primary customer indue to lower shipments to the Commercial Electronics market. Sales to the Commercial Electronics market and will begin delivery on a follow on orderdecreased $21.2 million compared with the same period in the second or third quarter of this year. The decrease in the Commercial Electronics market2014, which was partially offset by increased sales of $9.9 million to the Military market, primarily resulting from incrementalmarket. attributable to the acquisition of ATS. Operating loss for the first quarter of 2015 was $2.2 million compared with an operating loss$2.3 million, or 3.2% of $1.7 million in the same period last year, primarily as a result of $0.3 million of incremental amortization expense related to the ATS intangible assetssales, in the first quartersix months of 2015 as compared to the2014. The first quartersix months of 2014.Outlook for Test Systems – 2014 reflects inventory step-up costs of $15.0 million that reduced normal operating margins in that period.$130$135 million to $160$145 million. The Test Systems segment’s backlog at the end of the firstsecond quarter of 2015 was $144.5$115.7 million with approximately $104.6$75.4 million expected to be shipped over the remaining part of 2015 and approximately $112.6$96.7 million scheduled to ship over the next 12 months. By the end of 2014, we delivered the final unit under our initial contract with our major customer. We received a follow-on order from this customer, and expect to begin delivery of the associated units in the second or third quarter of 2015.$26.8$20.9 million for the first threesix months of 2015, as compared with $2.6$23.2 million during the same period in 2014. Cash flow from operating activities increaseddecreased primarily due to higher net income as adjusted for non-cash expenses and by the impact of decreasesincreases in net operating assets for the first threesix months of 2015 when compared with the first threesix months of 2014.$60.0$67.6 million for the first threesix months of 2015 compared with $87.2$90.9 million used in the same period of 2014. Cash used for the acquisition of Armstrong in January 2015 was $52.6 million. Cash used for capital expenditures of $7.1 million related primarily to the modifications of the new buildings in Clackamas, Oregon.was $12.3 million. The Company expects capital spending in 2015 to be in the range of $20 million to $27 million.Armstrong and principal payments against our outstanding balance on the senior facility. In January 2015, we borrowed $40.0 million to fund the acquisition of Armstrong. Through the end of the first quarter of 2015 we made principal payments of $5.7 million, primarily from funds generated by operations. In the first quarter of 2014, we made principal payments of $0.4 million. April22.830.9 to 1 and the leverage ratio was 1.51.7 to 1 at AprilJuly 4, 2015.AprilJuly 4, 2015 was $378.5$352.0 million compared with $370.7 million at December 31, 2014 and $362.4$326.8 million at March 29,June 28, 2014.AprilJuly 4, 2015: Payments Due by Period (In thousands) Total 2015 2016-2017 2018-2019 After 2019 $ 216,757 $ 1,934 $ 5,286 $ 204,505 $ 5,032 132,894 127,463 4,994 437 — 19,028 4,105 7,955 6,637 �� 331 21,880 303 807 804 19,966 9,163 2,214 3,858 2,962 129 1,891 21 1,772 26 72 $ 401,613 $ 136,040 $ 24,672 $ 215,371 $ 25,530 Payments Due by Period (In thousands) Total 2015 2016-2017 2018-2019 After 2019 Long-term Debt $ 231,171 $ 1,315 $ 5,327 $ 219,565 $ 4,964 Purchase Obligations 108,107 101,219 6,828 60 — Interest on Long-term Debt 19,835 3,989 8,448 7,067 331 Supplemental Retirement Plan and Post Retirement Obligations 21,780 202 807 804 19,967 Operating Leases 9,295 1,849 4,104 3,194 148 Other Long-term Liabilities 620 19 503 26 72 Total Contractual Obligations $ 390,808 $ 108,593 $ 26,017 $ 230,716 $ 25,482 ThisOn July 9, 2015, the FASB voted to defer the effective date by one year to December 15, 2017 for interim and annual reporting periods beginning after that date and permitted early adoption of the standard, but not before the original effective date of December 15, 2016. Therefore, this authoritative guidance will be effective as of the Company’s first quarter of fiscal 2017. However, the FASB has proposed a deferral of the effective date of the new revenue standard by one year.2018. The Company is currently evaluating the impact that adoption of this guidance will have on its consolidated financial statements and disclosures.In April 2015, the FASB issued authoritative guidance regarding customer’s accounting for fees paid in a cloud computing arrangement. The authoritative guidance provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the guidance requires the software license element of the arrangement to be accounted for consistent with other software license agreements. This authoritative guidance will be effective as of the Company’s first quarter of fiscal 2016, with early adoption permitted. The Company is currently evaluating the impact that adoption of this guidance will have on its consolidated financial statements.
a) The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of AprilJuly 4, 2015. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of AprilJuly 4, 2015.
b) | Changes in Internal Control over Financial Reporting - There have been no changes in our internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. |
date regarding this provision.Astronics Advanced Electronic Systems Corp. (“AES”)AES sold, marketed and brought into use in Germany a power supply system which infringes upon a German patent held by Lufthansa. The relief sought by Lufthansa includes requiring AES to stop selling and marketing the allegedly infringing power supply system, a recall of allegedly infringing products sold to commercial customers since November 26, 2003 and compensation for damages. The claim does not specify an estimate of damages and a damages claim will be made by Lufthansa only if it receives a favorable ruling on the determination of infringement.However, ifOn July 15, 2015, Lufthansa providesadvised AES of their intention to enforce the required bank guarantees specified inaccounting provisions of the decision, the Company may be requiredwhich require AES to offer a recall of products which are in the distribution channels in Germany, and provide certain financial information regarding sales of the infringing product to enable Lufthansa to make an estimate of requested damages. AES is currently evaluating the information requirements. Additionally, if Lufthansa provides the additional required bank guarantees specified in the decision, the Company may be required to cease distribution of infringing products in Germany (if any). No such bank guarantees haveguarantee has been issued to date. has appealed and believes it has valid defenses to refute the decision. The appeal process is estimated to extend up to two years. The enforcement of the accounting provision of the decision, as discussed above, has no impact on the appeals process. As a result, we do not currently have sufficient information to provide an estimate of AES’s potential exposure related to this matter. As loss exposure is neither probable nor estimable at this time, the Company has not recorded any liability with respect to this litigation as of AprilJuly 4, 2015.AprilJuly 4, 2015.
(a) Total number (c) Total number of January 1, 2015 – January 31, 2015 February 1, 2015 – February 28, 2015 March 1, 2015 – April 4, 2015 Total (c)The following table summarizes the Company’s purchases of its common stock for the quarter ended April 4, 2015:Period
of shares
Purchased (b)
Average
Price Paid
per Share
shares Purchased
as part of Publicly
Announced Plans
or Programs (d)
Maximum Number
of Shares that May
Yet Be Purchased
Under the Plans or
Programs 1,856 $ 55.27 — — 1,066 56.06 — — 2,405 70.79 — — 5,327 $ 60.71 — — In connection with the exercise
/s/ Exhibit 31.1 Section 302 Certification - Chief Executive Officer Exhibit 31.2 Section 302 Certification - Chief Financial Officer Exhibit 32. Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Exhibit 101.1* Instance Document Exhibit 101.2* Schema Document Exhibit 101.3* Calculation Linkbase Document Exhibit 101.4* Labels Linkbase Document Exhibit 101.5* Presentation Linkbase Document Exhibit 101.6* Definition Linkbase Document * Submitted electronically herewith. ASTRONICS CORPORATION(Registrant)ASTRONICS CORPORATION (Registrant) Date: August 11, 2015 May 13, 2015By: David C. BurneyDavid C. Burney 26