Astronics Corporation

Greetings and welcome to the Astronics Corporation fourth quarter fiscal year 2021 financial results conference call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to Deborah Polosky, Investor Relations for Astronics Corporation. Thank you. You may begin.

Thanks, Daryl, and good morning, everyone. We appreciate your time today and your interest in Astronics. Joining me on the call are Pete Gunderman, our President and CEO, Chairman and President and CEO, and Dave Burney, our Chief Financial Officer. You should have a copy of our fourth quarter 2021 financial results, which we released earlier this morning. And if not, you can find it on our website at Astronics.com. As you are likely aware, we may make some forward-looking statements during the formal discussion as well as during the Q&A session. These statements apply to future events that are subject to risks and uncertainties as well as other factors that could cause actual results to differ materially from what is stated here today. These risks and uncertainties and other factors are provided in the release as well as with other documents filed with Securities and Exchange Commission. You can find the documents on our website or at sec.gov. During today's call, we will also discuss some non-GAAP financial measures. We believe these will be useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. We have provided reconciliations of non-GAAP measures with comparable GAAP measures in the table that accompanies today's release. So with that, let me turn it over to Pete to begin. Peter?

Thank you, Debbie, and good morning, everybody. Thanks for tuning in for our year-end 2021 conference call. Our topics today include a range of fourth quarter headlines. Sales were in the expected range at $116 million, but the income statement was clouded by a pretty long list of unusual items. Dave will walk us through those in a few minutes. The highlight of the quarter, which I'll spend some time covering, were bookings. Way up, again, a book-to-bill of 1.53 for the quarter set us up with a record backlog at year-end. We also have reworked our financing arrangement with the banks, getting a small three-month extension. Dave will talk through that. And then we'll spend some time looking at 2022 and To cut to the chase, we expect it to be a year of strong growth. There are a lot of caveats here, as you might expect, but we are establishing an initial range for revenue for 2022 of $550 to $600 million. The midpoint there would represent something like 30% growth over where we ended up for 2021. And then we'll end up with questions and answers. Fourth quarter summary, sales, as I said, 116 million. Last time we talked, we predicted a range of 115 to 118, so we were safely in there. This was despite ongoing supply chain and labor challenges, which will be a theme throughout this conversation, and is not inconsistent with what's going on out there in the world in general. We ended the year with what we feel was about 15 to 17 million of scheduled product that could not ship for one reason or another, typically having to do with supply chain challenges. As for labor, we're operating at about 2,200 people right now. Before the pandemic, we were at about 3,400, and we would like to be right now about 2,400. We're facing challenges on the labor side. Again, we'll talk about that a little bit more later when we talk about our current environment going forward. We don't expect to be profitable with $116 million, and depending on the metric you look at, we weren't. Gap net income was 1.4%. or 1.6 million and adjusted EBITDA of a negative 800,000 or a negative 0.7%. Again, Dave will walk through the forces that were in play in our fourth quarter results. The bright spot, as I said, was bookings, $177 million against shipments of $116 million for a book-to-bill of 1.53%. Both of our segments had very strong booking performances in the fourth quarter, but consolidated over the last four quarters, the trend has been very encouraging. The last four quarters being all four quarters of 2021. In succession, we went from $120 million in the first quarter to $126 million to $154 million to $177 million in bookings. for a total of $577 million for the year and a book-to-bill of $1.3 million. Let's remember that $577 million booking when we try to explain our anticipated growth in 2022. Looking at arrow bookings, aerospace, for the quarter it was $148 million, a book-to-bill of $1.49 million. That's two quarters in a row at $1.49 million. The cumulative total for the last four quarters was $509 million, again for an impressive book-to-bill for the year of $1.39. Our test segment had a rebound quarter with respect to bookings of $30 million. That's a book-to-bill of $1.72. The $30 million somewhat compensates for... very weak bookings in the second quarter and third quarter. We said at the time that we weren't losing things, they were just delayed and a lot of them came through in the fourth quarter, helping to cover those weak spots in the second quarter and the third quarter. But we're not out of the woods in the sense that we continue to see COVID-related delays in the order flow in our test business for the year. we had bookings of 68 million versus shipments of 80 million a book to bill of 0.86 so we look to improve that booking performance over the course of 2022 and we have a number of pursuits that we think could decisively kind of change the equation of the game if we're successful so the bookings Left us at year end with a backlog of 416 million. As I said, that's a new record for the company. Up from 283 million as the year began. So we started at 283, we ended at 416. A little lesson from history, the last time we were at that level with a backlog, We were doing annual sales of about $800 million. That was late in 2018. So that backlog is something we take quite a bit of comfort in as we enter 2022. I think I'll turn it over to Dave here at this point to talk through the details of the income statement and our financing situation. Dave?