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Astronics Corporation (NASDAQ:ATRO)

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All | Acquisitions | Comments & Business Outlook

Tuesday, June 11, 2013

Acquisitions

EAST AURORA, N.Y., May 28, 2013 (GLOBE NEWSWIRE) -- Astronics Corporation (Nasdaq:ATRO), a leading provider of advanced technologies for the global aerospace and defense industries, today announced that it has entered into a definitive agreement to acquire the outstanding shares of PECO Inc. (PECO) for approximately $136 million in cash. The agreement is expected to close in late June 2013, and is subject to certain conditions, including a review under the Hart-Scott-Rodino Antitrust Improvements Act and the successful arrangement of debt financing by Astronics.

PECO, located in Portland, Oregon, designs and manufacturers highly engineered commercial aerospace interior components and systems for the aerospace industry. The company specializes in Passenger Service Units (PSUs) which incorporate air handling, emergency oxygen, electrical power management and cabin lighting systems. It also manufactures a wide range of fuel access doors that meet stringent strength, fuel sealing and anti-corrosion requirements. PECO enjoys a longstanding relationship with many aerospace customers, including The Boeing Company, for which it provides a variety of products across its line of commercial airliners.

"We believe PECO is an excellent strategic fit with Astronics. PECO is a leader in the critical equipment it designs and manufactures and has successfully established a number of positive relationships with aerospace customers. We believe that Astronics will be able to both strengthen and benefit from those solid relationships," stated Peter J. Gundermann, President and CEO of Astronics. "We are excited to welcome the PECO team to Astronics. We expect the combination of world class capabilities from both organizations will serve to further our mutual goals."

PECO had 2012 sales of $77.8 million and has projected 2013 sales of approximately $83 million, with adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) margins consistent with Astronics' past performance. Excluding one-time acquisition related charges the acquisition is expected to be accretive to earnings in 2013. PECO employs approximately 240 people.

Astronics has the option to make an election under IRS code section 338(h) (10) before the end of 2013 which would provide certain tax benefits. If the election is made, Astronics will be responsible for additional costs including indemnifying the sellers for additional income taxes they incur as a result of the election.

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Thursday, May 6, 2010

Comments & Business Outlook

Peter J. Gundermann, President and Chief Executive Officer of Astronics, commented “First quarter results provided a strong start for 2010. Demand was higher than expected, especially for our in-seat power products, and our aggressive cost cutting over the last year drove solid margins. We are also encouraged with the bookings level which gives us increased confidence for the rest of the year.”

Backlog at April 3, 2010 was $92.8 million, above backlog at the end of the fourth quarter of 2009 of $85.4 million and down from backlog at the end of the first quarter of 2009 of $111.7 million. Approximately $71 million of total backlog is expected to ship by the end of 2010 and approximately $79 million of total backlog is expected to ship in the next 12 months.

Mr. Gundermann stated, “We are off to a better start to the year than we anticipated, but are not ready to increase our revenue guidance for 2010. Aerospace has had a better start than expected, while Test Systems is off to a somewhat slower start. We continue to expect that sales for the year will be in the range of $170 to $190 million.”

Astronics anticipates that approximately $145 million to $155 million of projected 2010 revenue will be from the Aerospace segment, while approximately $25 million to $35 million will be from the Test Systems segment.

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