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- **Revenue Record**: Q3 2025 revenue of $211.4 million, second-highest on record, with aerospace segment driving 16.2% operating margin.
- **Margin Expansion**: Adjusted operating margin 12.3%, highest since 2020, supported by cost reductions and higher volume.
- **Strategic Acquisitions**: Envoy Aerospace (FAA ODA) and BMA (seat actuation) to enhance competitiveness and reduce dilution risk.
- **Debt Restructuring**: 0% convertible bond refinancing cuts interest costs and caps dilution at $86/share.
- **2026 Growth**: 10%+ revenue growth expected, driven by aerospace build rates and Test program ramp-up.

**【CEO Summary Section】**
- **Revenue Growth**: Q3 2025 revenue of $211.4 million, second-highest quarterly level, driven by aerospace segment ($192.7 million) and improved supply chain efficiency. Test segment revenue ($18.7 million) showed progress despite lower volume.
- **Margin Expansion**: Operating margin of 10.9% (12.3% adjusted), with aerospace segment margin at 16.2%. Test segment breakeven (negative 0.1%) marked improvement.
- **Bookings and Backlog**: Q3 bookings of $210 million (book-to-bill 1.0), ending with $647 million backlog. 2026 revenue expected to grow 10%+.
- **Acquisitions**: Envoy Aerospace (FAA ODA certification authority) and Bühler Motor Aviation (seat actuation systems) to enhance competitiveness and reduce dilution risk.
- **Refinancing**: $225 million 0% convertible bond issued to repurchase 80% of prior 5.5% convertible notes, reducing interest costs and dilution potential.

**【CFO Financial Commentary】**
- **Profitability**: Gross profit $64.5 million (30.5% margin), up 17% YoY. Aerospace gross margin 31.4%, Test 21.6%. Operating income $23 million (2.5x YoY growth).
- **Cash Flow**: $34 million cash from operations, $21 million free cash flow. Q4 CapEx ~$20-30 million for Redmond facility consolidation.
- **Debt Restructuring**: $32.6 million non-cash loss on debt settlement. New 0% convertible bond capped call raises conversion price to $83, reducing dilution risk.
- **Balance Sheet**: Debt $334 million post-refinancing, liquidity $169 million. Shareholder equity reduced by $152 million due to refinancing costs.

**【Q&A Highlights】**
- **Q4 Outlook**: Revenue $225-235 million (40-50% margin contribution), driven by aerospace build rates and Test program ramp-up. Test revenue expected $20-21 million.
- **FLRAA Program**: 2025 revenue $28 million, 2026 ~$38-40 million. Margins to improve post-development phase.
- **Acquisition Integration**: BMA to integrate with French PGA operations; Envoy to enhance FAA certification capabilities.
- **Financial Metrics**: Q4 interest expense ~$1.5 million, CapEx $20-30 million, D&A ~$3 million.


Astronics Corporation (ATRO) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

ATRO

ATRO fundamentals

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