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Write-downs lead to Astronics loss

Astronics Corp. lost $180,000 during the fourth quarter as the East Aurora aircraft lighting and electronics manufacturer was stung by the bankruptcy of one of its major customers.

The bankruptcy filing in November by Eclipse Aviation Corp. forced Astronics to write down $7.5 million in assets and wiped out what otherwise would have been a near-doubling of its operating profits.

Peter Gundermann, Astronics' president and chief executive officer, said he expects "a reasonable year" in 2009 because of the relative stability in the company's military markets, as well as the long lead times on commercial jet production.

"It's certainly better than one might expect give the economic gloom that's pervading the world these days," Gundermann said.

The company also said it expects last month's acquisition of weapons and communications test equipment manufacturer DME Corp. to allow Astronics to increase its sales this year by 33 percent to 40 percent to between $230 million to $245 million, compared with $174 million last year.

All of the increase, however, is expected to come from the acquisition. Astronics said it expects its existing aircraft lighting and electronics business will soften by 5 percent to 10 percent as weakness in the business jet market offsets relative stability in the company's defense and commercial aviation markets.

Astronics loss during the fourth quarter equaled 2 cents per share, compared with a profit of $2.07 million, or 19 cents per share, a year earlier. The 44 cents per share that Astronics earned excluding the write-off handily beat the 31 cents per share that was expected by analysts.

Sales rose 22 percent to $44.4 million, the company's second-highest quarterly sales ever, from $36.3 million. Order flow also remained healthy, rising by 7 percent to $41.3 million in the fourth quarter.

The Eclipse bankruptcy cuts deeply into Astronics' business because the company accounted for about a quarter of its business-jet revenues last year. Astronics continues to supply Eclipse on a cash basis and still has about $2.7 million in inventory associated with the aircraft maker on its books.

The company also expects to continue to invest heavily in new products and technology, with plans to spend about $20 million this year on engineering and development work, down only slightly from last year's unusually large $22.9 million.

e-mail: drobinson@buffnews.com

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