Earnings call transcript: Astronics Q2 2025 beats expectations, stock slips

Astronics Corporation (market cap: $1.26 billion) reported its second-quarter 2025 earnings, showcasing a strong financial performance with an EPS of $0.38, surpassing the forecasted $0.29 by 31.03%. Revenue reached $204.67 million, slightly above the expected $203.94 million. The company’s stock has demonstrated remarkable momentum, gaining over 121% year-to-date. Despite these positive results, the stock fell 1.31% in after-hours trading, closing at $35.37. According to InvestingPro analysis, the stock is currently trading near its Fair Value, with 12 additional exclusive insights available to subscribers.

Key Takeaways

• Astronics’ EPS exceeded expectations by 31.03%.
• Revenue was slightly above forecasts, indicating steady growth.
• Stock price decreased by 1.31% post-earnings announcement.
• The company is focusing on in-flight entertainment and connectivity technologies.
• Positive book-to-bill ratio suggests strong future demand.

Company Performance

Astronics Corporation demonstrated a robust performance in Q2 2025, with sales increasing by 3.3% year-over-year to $205 million. Year-to-date sales also saw a significant rise, reaching $411 million, up 7.2% from the previous year. The company continues to strengthen its position in the aerospace sector, particularly in commercial transport and military aircraft segments, bolstered by its FAA certification capabilities.

Financial Highlights

• Revenue: $205 million, up 3.3% from Q2 2024.
• Earnings per share: $0.38, nearly double the $0.20 from the prior year.
• Adjusted EBITDA: $25.4 million, representing 12.4% of sales.
• Book-to-bill ratio: 1.11, indicating strong demand.

Earnings vs. Forecast

Astronics exceeded earnings expectations with an EPS of $0.38 compared to the forecasted $0.29, a 31.03% surprise. The revenue of $204.67 million slightly surpassed the anticipated $203.94 million, marking a 0.36% surprise. This performance indicates a positive trend compared to previous quarters.

Market Reaction

Despite the earnings beat, Astronics’ stock fell by 1.31% in after-hours trading, closing at $35.37. This decline might reflect investor caution or profit-taking. With a beta of 1.65, the stock shows higher volatility than the broader market. The stock remains near its 52-week high of $37.32, suggesting overall investor confidence in the company’s long-term prospects despite the immediate dip.

Outlook & Guidance

Astronics is optimistic about the second half of 2025, expecting sales to potentially double those of the first half. The company has set a revenue guidance range of $840-$860 million for the year, representing a 6.9% increase. InvestingPro data shows that two analysts have recently revised their earnings estimates upward, with a consensus recommendation indicating a positive outlook. The company’s Financial Health Score stands at "GOOD," supported by strong momentum and growth metrics. Strategic initiatives include focusing on in-flight entertainment and connectivity technologies and exploring opportunities in the Low Earth Orbit satellite network market.

Executive Commentary

CEO Pete Gunderman highlighted the company’s strong performance and future potential, stating, "We expect sales in the second half could possibly double the total from the first half." He also noted the strength in the retrofit market, saying, "We’re continuing to see pretty strong opportunities in retrofit."

Risks and Challenges

• Tariff impacts estimated at $15-$20 million annually.
• Potential supply chain disruptions affecting production.
• Competitive pressures in the aerospace industry.
• Fluctuations in commercial aerospace production rates.
• Economic uncertainties impacting customer spending.

Q&A

During the earnings call, analysts inquired about the impact of tariffs, which are estimated to cost $15-$20 million annually. Executives expressed confidence in maintaining aerospace margins around 16% and highlighted successful pricing negotiations with customers. The company is also evaluating strategic options for its Test segment, aiming to improve its performance.

Full transcript - Astronics Corporation (ATRO) Q2 2025:

Conference Operator: Greetings, and welcome to the Astronics Corporation Second Quarter Fiscal Year twenty twenty five Financial Results Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Debbie Prowlowski, Investor Relations for Astronics.

Please go ahead.

Nancy Hedges, Chief Financial Officer, Astronics Corporation: Thanks, and good afternoon.

Investor Relations, Astronics Corporation: We appreciate your time today and your interest in Astronics. Joining me here are Pete Gunderman, our Chairman, President and CEO and Nancy Hedges, our Chief Financial Officer. Our second quarter results crossed the wires after the market closed today, and you can find that release on our website at astronics.com. As you are aware, we may make some forward looking statements during the formal discussion and the Q and 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 are provided in the earnings release as well as with other documents filed with the Securities and Exchange Commission. You can find those documents on our website or at sec.gov. During today’s call, we’ll also discuss some non GAAP measures, 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?

Pete Gunderman, Chairman, President and CEO, Astronics Corporation: Hello everybody and welcome to the call. I’ll open the call with my comments on the second quarter, which had a number of puts and takes, but also showed consistent progress towards improved performance for the business, which has been our goal as we work our way through 2025. I’ll then turn it to Nancy to cover the details and later I’ll talk about our strengthened outlook for the remainder of the year. Sales for the quarter were just under $2.00 $5,000,000 similar to the first quarter and up 3.3% from the 2024. This was driven by record sales for our Aerospace segment, which compensated for lower Test segment sales.

Test sales were low due to a 6,400,000.0 adjustment driven by our ongoing program review process, which has caused us to reevaluate our financial position on a few programs. Year to date sales are $411,000,000 up 7.2% from $383,000,000 last year. So our sales momentum remains solid. Our margins continue to make progress also driven by the success of our Aerospace segment. We had adjusted EBITDA of $25,400,000 or 12.4% of sales in the quarter.

On a rolling twelve month basis, adjusted EBITDA as we calculated has been $114,700,000 This is up from $71,000,000 for the previous twelve month period. So we have continued to make pretty good progress. Second quarter bookings were on the light side at $177,000,000 for a book to bill of 0.86, primarily as a result of timing following a record level of bookings in the first quarter. Market demand for our products remains strong. Our book to bill for the 2025 is positive at 1.11 and for the last twelve months also it’s positive at 1.02.

So while our revenues have been ramping over recent periods, our bookings have been keeping up just fine, which is a good indication of continued strength going forward. Our quarter results were colored by some large and unusual adjustments resulting from the business review we described in our first quarter call. That review, as I mentioned a minute ago, led us to a $6,800,000 EAC related adjustment in our segment. The EAC charge is to level set certain long term development contracts in our Transit business specifically. Our review concluded that we’re not as far along on the programs as we thought leading to the reset.

Our work is being verified currently by an outside consultant firm hired to help us implement management systems to minimize any recurrences in the future. Our program review also led us to step away from a couple of aerospace segment product lines that we have concluded are non core to our future. This simplification initiative resulted in $6,200,000 of restructuring charges in the aerospace segment. These product lines have proven to be low growth and low margin, and the charges relate to write downs of inventory on certain facility assets. These two product lines, which include satellite antennas and contract engineering and manufacturing programs are expected to contribute sales of only 4,000,000 to 8,000,000 in all of 2025.

We expect to exit a couple of facilities related to these actions over the next twelve to eighteen months. As an aside, including these two facilities, we’ve closed eight facilities in recent years, significantly reducing our footprint and simplifying our organization. The contract engineering and manufacturing initiative is one that we entered into in the heat of the pandemic to leverage some manufacturing space and engineering resources that were underutilized at the time. Over time we found the program risks were too high and the resulting margins did not justify the effort. The discontinuation of any further development of our satellite antenna product line, which has been focused on large business jets and commercial transports operating with geosynchronous satellite constellations was the result of having a low market share and recognition that conditions have slowed as customers contemplate emerging low earth orbit constellations.

We decided that the investment in developing new antennas specific to either the LEO and or GEO market would be too risky to justify the required financial investment. But to be clear, the antenna decision does not mean we are walking away from LEO as a technology. To the contrary, the vast majority of our in flight entertainment and connectivity capabilities are as relevant to LEO networks as they are to GEO and to air to ground ATG topologies. The market is in a state of flux currently as customers consider the merits of the competing technologies, but we are optimistic that we will be able to create value in the emerging LEO world as we have in the past with GEO and ATG. We made a small acquisition in our Aerospace segment at the beginning of the third quarter.

Envoy Aerospace is an ODA, which stands for Organizational Designation Authority. ODA is a program in which the FAA grants certification approval authority to outside organizations through which the FAA extends its capacity and reach. We believe that having an ODA will be a competitive differentiator as we are often involved in aircraft retrofit programs and FAA certification is becoming a more important capability in competitive situations. Having certification authority lessens program and schedule risk for both us and our customers. Envoy has sales of about $8,000,000 and will report through our Astronics CSC operation.

I’ll turn it over to Nancy now to cover segment results and other details relating to our second quarter results. Nancy?

Nancy Hedges, Chief Financial Officer, Astronics Corporation: Thanks, Pete. I’ll review the key drivers and other impacts to our consolidated Q2 performance and then touch on segment level results. As Pete noted, revenue in the second quarter grew 3% over the prior year period and was in line with the trailing first quarter. This was despite the $6,400,000 impact to revenue of the adjustment to the estimated cost at completion of certain test systems projects. Growth was driven by record quarterly aerospace sales.

Operating profit and margins reflected the $6,900,000 total P and L impact associated with the EAC adjustments and $6,200,000 in costs for footprint rationalization and the portfolio reshaping that Pete discussed. Additionally, as part of a further follow-up hearing in the latter part of May with respect to The UK patent dispute, we were ordered to make a partial reimbursement of the plaintiff’s legal fees associated with the damages phase amounting to $3,500,000 This was partially offset by a $1,700,000 reduction in legal fees and a reduction of R and D expense in the amount of $2,600,000 due to project timing. On an adjusted basis, gross margin expanded 120 basis points over the prior year to 29.2% and operating margin expanded two fifty basis points to 8.9%. Adjusted EBITDA was $25,400,000 or 12.4% of sales, up from 10.2% last year, primarily reflecting improved profitability from higher volume and increasing productivity in the Aerospace segment. As a reminder, we did not add back the EAC impact in our adjustments and had a 2.9 negative impact to our adjusted EBITDA margin.

Interest expense declined 47% year over year to $3,100,000 in the quarter, reflecting our successful refinancing last November of the prior term loan and the ABL. The lower interest rate on our convertible debt provides meaningful savings in both interest and reduced cash payouts, and provides a solid liquidity cushion. GAAP earnings per share was unchanged year over year at $04 Non GAAP adjusted EPS for the quarter was $0.38 nearly double the $0.20 from the prior year period. Turning to our segment level results. Our Aerospace segment delivered another quarterly sales record of $193,600,000 a 9% increase year over year.

Commercial transport sales was the primary driver and was up 13%, driven by continued strength in cabin power and in flight entertainment and connectivity products. Military sales were also strong, increasing 11%, driven by increased demand for lighting and safety products. Operating profit in Aerospace was impacted by the portfolio realignment previously discussed. Adjusted aerospace operating profit was $31,500,000 in the quarter compared with $23,500,000 a year ago. And on an adjusted basis, aerospace achieved 48% operating leverage on the higher volume.

Adjusted operating margin improved by 300 basis points year over year to 16.3%. Turning to the Test segment. As we discussed on our last call, the Test business was expected to be weak in the quarter, but the EAC adjustment further deteriorated the results. Sales of 11,100,000 reflect the most recent estimates for completion, which lowered the percentage of work completed, which reduced revenue by $6,400,000 We reported an adjusted operating loss of $6,600,000 in the test business. Again, we did not adjust for the impact of the EAC change, which was $6,900,000 on operating income, including about a $500,000 loss reserve that’s reflected in cost of goods sold.

These adjustments masked the positive impact of approximately $5,000,000 in annualized cost savings that started to flow through in the quarter. We expect these benefits will be more visible in the second half of the year. Stronger test bookings in the quarter included a follow on order under the radio test programs for the Marines. The U. S.

Army radio test program apparently requires another level of process within the Army that we have to wait for them to complete. We expect this process will push the program out six to eight weeks and still hope to see a production order before the end of the year. We used $7,600,000 in cash from operations. As expected, this reflected the $21,600,000 in payments related to The UK patent dispute for damages, interest and the legal fee reimbursement, and $12,000,000 in income tax payments. This was a $9,500,000 increase over last year’s second quarter income tax payments and included the full year federal payment for 2024, as well as the resumption of quarterly estimated federal payments given our improved liquidity.

With those large payments behind us, we expect to generate solid operating cash flow in the second half of the year. We finished the quarter with $13,500,000 in cash and factoring in the liquidity block, approximately $178,000,000 of availability under our ABL facility. This resulted in about $191,000,000 in total liquidity at quarter end. We’re currently undrawn on our revolver and expect that cash from operations can fund the business in the near term. Our healthy balance sheet provides flexibility to consider value creating initiatives, including acquisitions and share repurchases.

We can continue to advance on our financing structure as well. As profitability continues to improve, we will evaluate a transition to a cash flow based revolver, which is less restrictive and eliminates the current liquidity block. We may evaluate other options as well, especially given the positive progression of our operational performance, solid visibility into future demand and the related stock price improvement. Capital expenditures in the quarter remained low at $4,700,000 and are $6,700,000 for the 2025. We continue to expect a much higher level of CapEx for the full year and are now forecasting spend to be in the range of $40,000,000 to $50,000,000 We have advanced on the project for the facility consolidation and capacity expansion for our electrical power and motion products in Redmond, Washington, and expect that spend to measurably step up in the 2025.

I should note that even with the elevated CapEx spend in the second half, we are projecting positive free cash flow. On the tariff front, the changes enacted in recent weeks result in an impact to our costs of about 15,000,000 to $20,000,000 We believe mitigation efforts can reduce these costs by at least half. While price adjustments are already being pursued, now that the situation is stabilized to some degree, we can consider other mitigation actions like free trade zones, duty drawbacks and bonded warehouses, in addition to evaluating our supply chain options. Other actions we have taken with the business to drive profitability will help to offset the tariff impact as well. Overall, we’re pleased with the strong first half.

We expect with the resilient strengthening of underlying performance trends in our core aerospace business and expected improvements in test systems, we will have an even stronger 2025. We remain focused on disciplined capital allocation, productivity to drive further margin expansion, accelerating our working capital turns, free cash flow generation and consistently executing on continuous improvement. And with that, let me turn it back to Pete.

Pete Gunderman, Chairman, President and CEO, Astronics Corporation: As Nancy said, we are expecting a strong second half to twenty twenty five. Our aerospace business will continue to enjoy the strong tailwinds prevalent in the industry, including increasing passenger traffic, aircraft utilization, aircraft build rates and adoption of modern passenger entertainment and connectivity systems. We also expect solid improvement in our test business based on strong recent bookings and the EAC adjustments we have just taken. We expect sales in the second half could possibly double the total from the first half, even with the possibility that the production start of our US Army radio test program known as 4,549 T may slide into 2026. Given all this, we are increasing our 2025 revenue guide to $840,000,000 to $860,000,000 up from $820,000,000 to $860,000,000 an increase of $10,000,000 at the midpoint.

The midpoint $850,000,000 would represent an increase of 6.9% sales year over year. Expect the third quarter to be up marginally from the pace of the first half with the fourth quarter up more substantially. Percent We expect it will be a positive and exciting second half setting up another positive year in 2026. And with that, Kate, we’ll open it up for questions.

Conference Operator: Thank you. We will now be conducting a question and answer session. Our first question comes from the line of John Tanwanteng with CJS Securities. Please go ahead with your question.

John Tanwanteng, Analyst, CJS Securities: Hi. Thanks for taking my questions. Pete, if you could first talk about the magnitude and I guess the drivers overall of the aerospace momentum that you’re seeing that’s allowing you to raise your revenue guidance? Maybe the test business as well, you know, where where is that coming from? You know, with the backdrop that you’re exiting some businesses, you got the CAC impact as well as the push out of of the radio business.

Help me frame the size of all those things that you have together?

Pete Gunderman, Chairman, President and CEO, Astronics Corporation: Sure. It’s a pretty comprehensive list of things actually. On the aerospace side, production rates, first of all, are a pretty big driver. We’ve got seven thirty seven rates going up, A320, there’s upward pressure, all those supply chain problems. Seven eighty seven, A350, those are the four main ones that have increased or expected to increase in the near future.

Seven thirty seven to give you an idea, we’ve been shipping somewhere in the neighborhood of low 20, mid-twenty ship sets per month, and most recently stepping up to the low 30s. And we are on a glide path to step up again to like high 30s and even up to the low 40s potentially by the end of the year if Boeing gets permission to go there. So that’s a big driver as we look forward. Beyond that, we have a program that we’ve announced with the Airbus A220 up in Montreal should be a pretty big driver as we move through 2026. So that’s a positive picture in general.

On the military aircraft side, you notice some pretty big growth there. One of the drivers is our engineering and development work year over year with FLRA, which shows signs of accelerating. It’s a little early to talk about that, but there’s demand from customer to move that in sooner rather than later. And on our test side, the big drivers are the programs we’ve talked about quite a bit here, including primarily the 40 five-forty nine T program for the US Army. We’re making a lot of progress on that program.

We think it’s a very healthy program going forward. The unfortunate situation there is that our customer at the US Army has been delayed by a DoD requirement for a certain health and safety analysis that needs to be completed. This is something that the DoD completes, it’s nothing that we do. And that at this point seems to be the long pole in the tent. I don’t mean to imply it’s the only thing going on in that program.

There are a number of other under cross current things going on under the covers, but that’s the thing that may push us from starting a production phase out of the fourth quarter into the first quarter. But even with that, we think that our Test business is lined up for a pretty strong improvement in revenue in the second half of the year, including the current quarter compared to what it did in the first half. So I don’t if that answers your question, John. A long list of tailwinds really that are pushing us in our activity level. Perhaps even higher than what our financials show.

I mean, we’re turning in a quarter of $2.00 $4,000,000 after the EAC reduction. As a matter of activity, you can imagine what it was like without the EAC reduction and then we’d be within spitting distance of an all time record high with revenue for the company in the quarter.

John Tanwanteng, Analyst, CJS Securities: Got it. No, that’s very helpful. Thanks Pete. Can you talk maybe about just what you expect on the margin for the year? You got the EAC.

I don’t know if you can make that up in the back half. You’ve got tariffs, additional tariffs coming in. Just help us think the margin expectation of exiting the year.

Pete Gunderman, Chairman, President and CEO, Astronics Corporation: The tariff situation, I feel is still a little bit hard to predict. We’ve kind of got through the August deadlines of the Trump administration throughout there for everybody, but they’re relatively new and there’s a lot of expectation that the rates may adjust a little bit. To give you some color on our tariff situation, Almost half of the tariff burden comes from a single country, Malaysia. Malaysia got a 19% tariff, which is consistent with what a lot of other countries in the region got. But what we source from Malaysia is relatively resourceable, guess, I don’t if that’s a word, but you can source it from other places.

It’s nothing all that critical that were locked into Malaysia. Another quarter of our total tariff load basically comes from China. That’s harder to move. There are China negotiations are ongoing. We don’t really know where those are going to end up yet.

So Nancy talked a little bit about some of the efforts or actions we could take. And while we may see a tariff hit in the short term on the Malaysia front anyway, I think we’ll be able to bring those down if necessary by moving production or moving suppliers or resourcing pretty easily. The China part is too early to tell. And then of course there are pricing opportunities and passing it on the customers. That’s what everybody wants to do.

The reality is nobody wants to pay tariffs. So how it all settles out, it’s a little bit too early to tell. But looking back at the second quarter, I’m pretty happy with our continued improvement to our aerospace margins. Our adjusted operating margin excluding those two portfolio shaping actions that we took were up around 16%, which we think shows pretty good progress. If we Nancy mentioned a 49% marginal contribution or contribution on marginal sales, I guess I should say.

And so if we can achieve a continued ramp on the aerospace side, I think we’re going to be in pretty good shape by the end of the year on margins on that side of the business. The test business is harder to predict. We certainly hope that the EAC adjustment we took here is enough to carry us and get us through the programs that we’re working on for some period of time. I don’t think our test business is going to impress the world with margins in the second half of the year, but I’m hoping for an adjusted EBITDA level somewhere around breakeven, maybe small single digit positive. And we’re at this point 85%, 90% aerospace.

So the aerospace business will drive margins, at least for the foreseeable future until we get the radio test program going, which again will most likely happen in 2026.

John Tanwanteng, Analyst, CJS Securities: Perfect, thanks. And just a quick clarification, Is the tariff impact that you guys outlined, is that for the remainder of the year or is that annualized?

Pete Gunderman, Chairman, President and CEO, Astronics Corporation: That’s annualized based on historical purchasing patterns with little or no mitigation in place.

John Tanwanteng, Analyst, CJS Securities: Got it. Thank you.

Nancy Hedges, Chief Financial Officer, Astronics Corporation: Sure.

Conference Operator: Thank you. Our next question comes from the line of Michael Ciarmoli with True Securities. Please go ahead with your question.

Michael Ciarmoli, Analyst, True Securities: Hey, good evening, guys. Thanks for taking the question.

Pete Gunderman, Chairman, President and CEO, Astronics Corporation: Hi,

Michael Ciarmoli, Analyst, True Securities: Michael. Hey, Pete, just to how are you? Just to put a finer point on the margin topic there. Within Aerospace, you think you could hold this kind of 16% plus adjusted level? I mean, I know you just said the tariff impact was annualized, that didn’t include any mitigation efforts.

But do you have pretty good line of sight into aero margins, especially if you get some further volume in the fourth quarter?

Pete Gunderman, Chairman, President and CEO, Astronics Corporation: Yes, I think we’re pretty comfortable with it. Again, tariffs are a little bit of an unknown at this point. So I’m kind of ignoring that for the moment. But with marginal further sales growth, The other thing I didn’t mention earlier is pricing increases that we’ve negotiated into certain of our contracts are also helping us quite a bit on the margin front. They’re coming through as we work our way through 2025.

And I think we’ll see more of that as we go through the third quarter and the fourth quarter. So I don’t view that adjusted level of 16% as a blip at all, except for the possible impact on tariffs as we move forward.

Michael Ciarmoli, Analyst, True Securities: Okay. On that pricing, wanted to ask on that. Are you having success on both the supplier furnished and buyer furnished? I I guess, you having success pushing price to Boeing and Airbus as well as the airline customers?

Pete Gunderman, Chairman, President and CEO, Astronics Corporation: We have been successful there. I think the whole world has realized that inflation has changed people’s price cost structures and reality needs to set in. And so we have been successful. We continue to be successful. And I think more and more we’re pretty happy with our price levels compared to where we were say a year ago or a year and a half ago.

Michael Ciarmoli, Analyst, True Securities: And I know you gave some color on the new build side of commercial aerospace. Any color you could provide on what’s happening maybe with the aftermarket or kind of planned retrofits from some of the bigger carriers? It

Pete Gunderman, Chairman, President and CEO, Astronics Corporation: continues to be a very good market for us. I mean, the production rate side of it is pretty easy to see. There are a lot of sources of information out there and we would concur that especially in Boeing side of things that improvement seems to be pretty evident and pretty persuasive. The retrofit side continues to be a very positive place for us also. I know you and I have discussed this before, but we sit in a nice spot where consumer electronic life cycles move on whether there’s a pandemic or not.

And in order to keep up with those shortened consumer electronic life cycles, certain updates are necessary and certain modification efforts are necessary. And when airlines do that, they generally do it across their fleet, both with new build aircraft and with their existing fleet. So we’re continuing to see pretty strong opportunities there. Really hasn’t flown down even with the shortage of capacity that’s out there in the airline fleet around the world. We’re pretty pleased with how that’s all going.

Michael Ciarmoli, Analyst, True Securities: Okay, good. Last question for me. You’re taking a lot of strategic actions, which is great to see. I know TEST has seemingly been a work in progress for, I don’t know, five, ten, fifteen years. You’ve got the EACs, but you’re also bringing in outside consultants.

Mean, you is there a thought process to maybe more broadly just evaluate strategic alternatives for the entire test segment and move to be just a pure play aerospace company?

Pete Gunderman, Chairman, President and CEO, Astronics Corporation: We don’t have any immediate actions in place along those lines. Frankly, we’ve got our head down trying to get through this difficult patch that we’re in. And we think we have line of sight towards improved performance. It’s too early to talk about 2026, but I expect that when we get to the end of the third quarter and we start our budgeting process for the next year, the outlook for our test business will be much better than it has been or is now. And at that point, we may sit back and take a few deep breaths and figure out where we go from there.

But at this point, that is not an active discussion here.

Michael Ciarmoli, Analyst, True Securities: Okay, got it. Fair enough. I’ll jump back in the queue. Thanks guys.

Nancy Hedges, Chief Financial Officer, Astronics Corporation: Thank you.

Conference Operator: Thank you. This now concludes our question and answer session. I would like to turn the floor back over to management for closing comments.

Pete Gunderman, Chairman, President and CEO, Astronics Corporation: Thank you all for tuning into the call. We look forward to reporting again to the third quarter when we presume we will have a much cleaner quarter to talk about. Thank you for your attention. Have a nice day.

Conference Operator: Ladies and gentlemen, thank you for your participation. This does conclude today’s teleconference. You may disconnect your lines and have a wonderful day.

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