Strong demand for its cabin electronics and aircraft lighting equipment fueled an 87 percent surge in Astronics Corp.'ssecond-quarter profits, the East Aurora-based company said Tuesday.
The earnings growth was driven partly by an 18 percent increase in sales, along with improved profitability stemming from the increase in Astronics' workload, company officials said.
The company, which has about 240 employees in EastAurora, also raised its sales forecast for this year by 3 percent.
"We continue to feel things are falling into place, in spite of the craziness of the world," said Peter Gundermann, Astronics' president and CEO, during a conference call.
Despite the big increase in earnings and a stronger-than-forecast rise in sales, the profits still were lower than analysts were expecting.
Astronics earned $4.5 million, or 39 cents per share, up from $2.4 million, or 22 cents per share, a year earlier.
The profits were less than the 42 cents per share that the three analysts who follow the company had forecast.
The company's sales grew to $55.5 million from $47.1 million, which was better than the $53.9 million that analysts had predicted.
Astronics also said it made a filing with the Securities and Exchange Commission to raise up to $150 million by selling additional stock or issuing debt at some point. Astronics said it has no immediate plans to sell more stock or debt, but made the so-called "shelf registration" filing to reduce the time the company would need to conduct a sale.
"We do not have any immediate needs for liquidity," Gundermann said. "It's one of those things we felt we needed to do to prepare for the future."
Gundermann said the company's profitability during the second quarter was hurt by higher legal costs, ranging from its purchases of facilities in Florida and Seattle, as well as a contract dispute.
The company's struggling test systems business in Florida in June was awarded an Air Force contract that could be worth $5 million to $20 million over three to five years, but one of the losing bidders has protested the award. The federal government's General Accounting Office is reviewing the award, and Gundermann said he expected a favorable ruling next month.
The disputed contract involves a joint bid Astronics submitted with the Patrick Wolffe Group to build and support the Air Force's Versatile Depot Automatic Test Station program. Astronics would be responsible for the logistics and systems support for the testers, which will be produced by Patrick Wolffe Group or another provider.
"It's a big one. It's the biggest one we've had since we've been in the test systems business," Gundermann said. "It's the first time we've been involved with the Air Force on this kind of scale."
Astronics said it now expects sales to rise to $220 million to $230 million this year, up from its previous forecast of $210 million to $225 million, and better than its $196 million in revenues last year.
All of the company's profits came from its aerospace products business, which accounts for 94 percent of Astronics' revenues. Operating profits at that business grew by 32 percent to $9 million, while sales increased by 19 percent to $52 million.
The company's test systems business, which had turned a tiny operating profit in the first quarter, struggled again during the second quarter, losing $500,000, although that loss was smaller than the $1 million it lost a year ago. Test systems sales, which had grown sharply during the first quarter, were flat at $3.5 million during the second quarter.
"We are expecting, and hoping for, much better things" from the test systems business, Gundermann said.