Astronics Corporation

Greetings and welcome to the Astronics Corporation first quarter fiscal year 2026 financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Deborah Pawlowski, Investor Relations for Astronics. Please go ahead.

Thanks, Rachelle, and good afternoon, everyone. We certainly appreciate your time today and your interest in Astronics. On the call with me here are Peter Gunderman, our Chairman, President, and CEO, and Nancy Hedges, our Chief Financial Officer. You should have a copy of our first quarter 2026 financial results, which crossed the wires after the market closed today. If you do not have the release, you can find it on our website at astronics.com. As you are aware, we may make some forward-looking statements during the formal discussion and the Q&A session of this conference call. 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 earnings release, as well as with other documents filed with Securities and Exchange Commission. You can find those documents on our website as well as at SEC.gov. During today's call, we'll have some non-GAAP measures that we'll discuss, which we believe 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 tables that accompany today's release. So with that, I will turn it over to Pete to begin. Peter?

Thanks, Debbie, and hello, everybody. Welcome to the call. We're here to talk about our first quarter results and our outlook for the remainder of the year. Nancy and I will do our usual back and forth and then open up the lines for questions. In summary, the first quarter, we feel, was a strong start to the year for Astronics. Revenue of $230 million was at the high end of our guided range and our second highest quarterly total ever, second only to the previous quarter, the fourth quarter of 2025. The strong volume combined with the range of improvement initiatives we have put in place across the business resulted in solid margin improvement compared to the year-ago quarter. I'll leave it to Nancy to talk through the details, but I will point out that our adjusted EBITDA margin of 16.4% compared to 14.9% in the comparator quarter shows continued improvement in this important metric. I also want to call attention to our bookings, which were on the high end of $290 million in the quarter for a book-to-bill of 1.26%. The bookings total was an all-time record, and even though we had a strong shipping quarter, resulted in a backlog of $734 million at the end of the quarter, which is another all-time record. We call attention to our bookings because it is a leading indicator of where our business will be going in the near to mid-term. Bookings can certainly be lumpy quarter to quarter, but the overall trend, say, over a rolling four-quarter period is telling. Further, the strong booking performance in the first quarter was not the result of any large or unusual orders that boosted the total. Rather, it was driven by growing customer demand across our business, demonstrating strong market conditions for our full range of products. Our strong start to 2026 has caused us to increase our expectations for the rest of the year. We're increasing our revenue guidance to the range of $970 million to $1 billion, up from the original range of $950 to $990. The midpoint of the new range would be a 14% increase over 2025 sales. The high end of the range, which is certainly possible, would be an increase of 16%. This is all assumed to be organic growth. As an aside, because I know we will get questions, we have seen no impact from the current slate of global geopolitical confrontations on our business, and I'm particularly referring to the Iran war. We have seen no war-related push-outs, delays, or cancellations since hostilities began in late February. We believe we are well positioned for a strong showing in 2026 and are benefiting from a wide range of factors that are driving us forward. I'm going to turn it over to Nancy now to cover some of the specifics of our first quarter results as well as the change to our reporting practice. But when I get the mic back, I'll briefly talk through the major market tailwinds that we are enjoying. Nancy?