- Unaudited revenue of approximately $198 million for fourth quarter 2019 exceeded guidance
- 2020 revenue guidance withdrawn due to uncertainty related to 737 MAX
- New VVIP IFE platform “Avenir” successfully launched
- Expects restructuring charges related to antenna business of $29 million to $35 million in fourth quarter 2019
- Estimating intellectual property damages of an additional $18 million in fourth quarter; Company has filed appeal and is vigorously defending position
- Temporarily pausing stock buyback initiatives
East Aurora, NY | February 3, 2020- Astronics Corporation (Nasdaq: ATRO), a leading provider of advanced technologies for global aerospace, defense, and other mission critical industries, today provided an update on various projects and events impacting 2019 results and expectations for 2020.
Fourth Quarter Revenue and 2020 Guidance
The Company ended 2019 with unaudited preliminary revenue of approximately $198 million in the fourth quarter, slightly exceeding the high end of guidance that was issued on November 5, 2019. Preliminary bookings were
$156 million in the fourth quarter and preliminary backlog at year-end was $359 million. Bookings were negatively impacted by uncertainty in the market, which the Company believes is related to the ongoing 737 MAX grounding. In addition, the Company cancelled orders of approximately $7 million related to the restructuring and refocusing of its antenna business. Unaudited preliminary revenue for the full year totaled approximately $773 million.
Given the uncertain 2020 production schedule for the 737 MAX and timing of its return to service, along with the related impact on aftermarket spending by commercial airlines, the Company is rescinding its initial 2020 revenue guidance issued in November 2019. Astronics expects to issue revised revenue guidance as the outlook becomes clearer.
Peter Gundermann, Astronics Chairman and CEO, said, “The ongoing 737 MAX grounding affects our business both because of the production pause and because it leaves many of our airline customers short of capacity. This makes them reluctant to take planes out of service to install the types of products they buy from us. The situation is likely to persist until the 737 MAX returns to service. We will publish revenue expectations when we have more insight on the situation. In the meantime, we have taken actions to align our cost structure, anticipating a lower level of production and an extended disruption in the market.”
Astronics has line fit content of approximately $95 thousand on each 737 MAX as well as buyer furnished equipment, such as passenger power and connectivity hardware, that varies depending on aircraft configuration.
Completed Development of Avenir VVIP Inflight Entertainment and Connectivity Solution (“IFEC”)
Late in the fourth quarter, the Company delivered a functional Avenir shipset to its launch customer, completing the design and development phase of the Avenir platform for the VVIP inflight entertainment and connectivity (“IFEC”) market. This effort has required significant financial investment by the Company’s Custom Control Concepts (“CCC”) operating unit for the last two years. While the program will require limited additional refinement during launch, the substantial levels of investment are completed. The Company expects that CCC will be profitable in the second half of 2020 and substantially breakeven for the year.
The best-in-class Avenir solution provides significant increases in bandwidth and speed for IFEC applications both on and off the aircraft. Astronics is now actively promoting the Avenir system and recently secured an additional undisclosed customer.
Restructuring and Refocusing the Antenna Operation
Astronics has made significant progress with the restructuring of its antenna business. The plan narrows the initiatives for the business to focus primarily on near-term opportunities pertaining to business jet connectivity. As a result of the narrowed focus, the Company anticipates total restructuring charges of approximately $29 million to $35 million that will be recorded in the fourth quarter of 2019. Approximately $29 million of the charge will be non- cash, including the write-down of goodwill, intangible assets, fixed assets, inventory and other assets associated with the refocusing of the business activity. The emerging plan has a downsized manufacturing operation remaining in New Hampshire, with significantly reduced personnel and operating expenses. After restructuring, breakeven for the business will be approximately $10 million in revenue.
Mr. Gundermann commented, “We are putting an end to the high level of losses we have incurred in our antenna business the last few years. Simplifying the business and focusing more narrowly on the business jet market gives us the best chance of success. There remains some level of risk with our plan, but we have begun to lower annual fixed cost by about $11 million by reducing operating and R&D costs, while leaving the business positioned to pursue our best near-term opportunity.”
Intellectual Property Dispute
Late in the fourth quarter, the Company received an unfavorable ruling from a German court regarding the scope and calculation of damages in its long-running patent infringement suit. As a result, the Company estimates that an additional $18 million in damages will be recorded in the fourth quarter of 2019. The ruling pertains to shipments of in-seat power systems the Company directly or indirectly made into Germany between 2007 and 2014. Astronics believes the court’s ruling in this matter is deficient and has initiated an appeal that will likely extend resolution into late 2021.
The dispute was previously argued and resolved in the Company’s favor in the United States. Cases are now beginning in the United Kingdom and France. Astronics does not expect these cases to be resolved during 2020.
Pause in Stock Buyback Program
To conserve cash, the Company is cancelling its 10b5-1 trading plan for its share buyback program and is temporarily postponing initiatives related to stock buybacks until market conditions are clearer, especially the circumstances surrounding the 737 MAX. The Board authorized a $50 million share buyback program in September 2019, which remains in place. Under the plan, Astronics has repurchased approximately 310 thousand shares through Friday, January 31, 2020 at an average price of $27.47
Mr. Gundermann concluded, “While external factors are providing new challenges for 2020, we believe we have taken the steps to improve the operating performance of the business by addressing the losses incurred by our challenged operating units. We expect to face challenging market conditions until the 737 MAX situation improves, but we will continue to work on promising innovation and growth prospects in the meantime, maximizing our performance in the near term while pursuing growth and stronger earnings in the long term.”
Future-Proof Technology Supports Full Interoperability with New Frequencies and Satellite Constellations
Hawthorne, California | March 28, 2019– ThinKom Solutions, Inc. today announced that more than 1,000 of its phased array satellite antennas have been installed on commercial aircraft around the world.
Statistics reveal that the company’s ThinAir® Ku-band satellite terminals are currently being used on more than 3,900 flights daily and have accrued more than 6.5 million flight hours.
ThinKom’s ultra-efficient phased arrays are currently in use by over 15 major airlines, consistently supporting 98 percent and higher total end-to-end system availability with industry-leading connectivity and throughput rates.
“Our proven record of best-in-class performance and reliability is unmatched in the industry, and our super low-profile antenna radome produces near-zero aerodynamic drag, yielding maximum fuel savings for airlines,” said Bill Milroy, ThinKom’s Chief Technology Officer.
“We have good reason to be proud of our achievements to date, and we are actively pushing ahead to ensure our technology performs equally well with the new frequency bands and next-generation satellite constellations that will be deployed in the coming years.”
Ka-Band IFC Antennas Now Available
ThinKom’s ThinAir Ka2517 Ka-band phased arrays have successfully completed a battery of ground and air tests and are now commercially available. Last month, ThinKom conducted a series of live on-air ground tests that measured unprecedented data speeds of 185 Mbps downlink and 35 Mbps uplink with zero dropped data packets over a geostationary Ka-band satellite. Late last year, ThinKom also conducted a series of successful in-flight demo tests of the Ka2517 on a number of different geostationary (GEO) satellite networks.
The Ka2517 terminals are now in full production and operational on a fleet of U.S. government aircraft, with multiple commercial STC projects underway.
Future Proof Technology
ThinKom is actively testing its phased array technology with the next generation of satellites in low earth orbits (LEO) and medium earth orbits (MEO), as well as the new GEO high-throughput satellites (HTS).
“Beam agility to make rapid break-before-make handoffs between a setting and rising satellite is a mandatory requirement for IFC antennas to be interoperable with the fast-moving LEO and MEO satellites,” said Milroy. “Tests have demonstrated that our phased array achieves switching speeds of less than one second with no interruption in connectivity. Importantly, ThinKom’s antenna architecture substantially outperforms the promised performance of electronically steered antennas (ESAs) in terms of size, reliability, spectral efficiency, channel bandwidth, low-elevation angle performance and power consumption.”
“We foresee a future in which there will be a large number of choices for satellite connectivity, with hundreds, if not thousands, of satellites in low, medium and high orbits,” said Milroy. “Our vision is to offer an IFC antenna system that can provide the automatic beam switching, rapid outage recovery and network optimization necessary to support a multi-constellation solution with seamless, gap-free, pole-to-pole connectivity.”
ThinKom will be exhibiting in Booth 4C42 at AIX 2019 in Hamburg April 2-4.
Dublin | June 22, 2018–The “Aircraft Antenna – Global Market Outlook (2017-2026)” report has been added to ResearchAndMarkets.com’s offering.
The Global Aircraft Antenna market accounted for $268.56 million in 2017 and is expected to reach $501.30 million by 2026 growing at a CAGR of 7.2%.
Some of the factors fuelling the market growth are growing aircraft deliveries, increasing demand for active and durable aircraft antennas and rising need for unmanned aerial vehicles in many military applications.
However, huge manufacturing cost of aircraft antennas, strict regulatory norms required to assure safety aircraft operations are inhibiting the market growth.
Based on application, navigation & surveillance segment commanded the largest market share owing to increasing bandwidths and uses of aircraft consisting of high frequencies for navigation & surveillance.
In addition, OEM is leading the market and the growth of this segment can be attributed to increasing number of aircraft deliveries across the globe.
Coverage
- Market share assessments for the regional and country level segments
- Market share analysis of the top industry players
- Strategic recommendations for the new entrants
- Market forecasts for a minimum of 9 years of all the mentioned segments, sub segments and the regional markets
- Market Trends (Drivers, Constraints, Opportunities, Threats, Challenges, Investment Opportunities, and recommendations)
- Strategic recommendations in key business segments based on the market estimations
- Competitive landscaping mapping the key common trends
- Company profiling with detailed strategies, financials, and recent developments
- Supply chain trends mapping the latest technological advancements
Companies Mentioned
- Harris
- Antcom
- Sensor Systems
- Honeywell
- Azimut
- Tecom
- Mcmurdo
- Boeing
- Cobham
- Rami
For more information about this report visit https://www.researchandmarkets.com/research/5g95nn/world_aircraft?w=4
- Cobham SATCOM’s leading role in supplying next generation avionics and broadband communications to increase safety and optimise fleet performance reinforced by agreement to install AVIATOR 350D on new A321neo fleet
Lyngby, Denmark | December 5, 2016– Leading manufacturer of satellite communications solutions Cobham SATCOM has announced that its AVIATOR 350D system has been selected by Hawaiian Airlines (HAL) for installation on its new Airbus A321neo (new engine option) fleet.
The Cobham system, supporting Inmarsat’s IP-based SwiftBroadband-Safety (SB-S) service, will deliver satellite connectivity to the cockpit for all voice and data applications on Hawaiian Airlines’ new single aisle aircraft and will connect to Cobham HGA-7001 High Gain antennas that are being line fit by Airbus.
The next generation IP-based broadband capabilities enabled by the Cobham solution enhance airline safety and operations through better communications and the availability of real-time, in-air information for pilots, crew and air traffic management.
This selection means that the AVIATOR 350D will be installed on the Hawaiian Airlines A321neo aircraft via the Avionics Support Group, Inc. (ASG) Supplemental Type Certification (STC) (FAA STC # ST04150AT), which has been granted for the A319, A320 and A321 families of aircraft.
The new agreement expands the current partnership between Hawaiian Airlines, Cobham, Rockwell Collins and Inmarsat, established during on-going in-flight evaluations of Cobham’s purpose-built AVIATOR solution and Inmarsat SB-S on-board Hawaiian Airlines’ Boeing 767-300 aircraft, as part of a Federal Aviation Administration (FAA) supervised technology evaluation.
Brian Anderson, Air Transport Sales Manager, Americas, Cobham SATCOM, said: “We are delighted to announce this selection by Hawaiian Airlines, which is the latest demonstration of how we are continuing to lead the way in the development of the next generation IP-based safety service SATCOM systems.
“The selection is a direct result of our team’s recent success with the Hawaiian B767 program for the FAA evaluations of SwiftBroadband-Safety service which is affirming the reliability and performance of the Cobham hardware and the Inmarsat’s satellite network.”
Captain Mary McMillan, Inmarsat Aviation Vice President of Safety and Operational Services, said: “Airlines with eyes on the big picture are seeking innovative ways to achieve efficiency gains and dynamically manage their fleets through the use of digital solutions. We are pleased that Hawaiian Airlines has experienced the benefits of SwiftBroadband-Safety delivered through Cobham advanced AVIATOR avionics and has now chosen to expand its commitment to high speed broadband in the flight deck with its A321neo’s. Clearly, the evaluation has been a great success.”
Both Cobham SATCOM’s next-generation AVIATOR S Series and SB-S have received a high level of industry support, including the recent selection by Airbus of the Cobham and Inmarsat solutions for its A320 and A330 aircraft families and the successful ongoing evaluations with Hawaiian Airlines.
Rockwell Collins provides the managed service between the Inmarsat ground stations that enable the aircraft to seamlessly communicate with HAL’s host systems, ground crews and regulatory agencies anywhere in the world without interruption.
SwiftBroadband-Safety (SB-S) is Inmarsat’s next generation communications platform offering global, high-speed, secure IP connectivity for the flight deck. It represents a paradigm shift in aviation safety services, delivering “always on, always secure” applications such as flight data streaming (“Black Box in the Cloud”) and real-time Electronic Flight Bag (EFB) applications, including networked graphical weather.
The new IFExpress website looks great!! What an improvement over the old site... it is like a whole new world. Cheers and kudos from New York City.”