Item 1. BUSINESS
"Operations in Different Industries" on page 18 of the Annual Shareholders' Report for the year ended December 31, 2001 is incorporated herein by reference.
General Development of Business
The major factors affecting the development of the business in 2001 are discussed under the caption "Net Sales" on page 21 of the Annual Shareholders' Report for the year ended December 31, 2001, and is incorporated herein by reference.
Sources and Availability of Raw Materials
"Quantitative and Qualitative Disclosures About Market Risks" on page 23 of the Annual Shareholders' Report for the year ended December 31, 2001 is incorporated herein by reference.
Seasonality
The Printing-Packaging segment is somewhat seasonal. Typical annual business patterns see 55 - 58% of this segment's revenues realized in the second half of the year, with the fourth quarter generally being the strongest.
Practices as to Maintaining Working Capital
"Liquidity" on page 22 of the Annual Shareholders' Report for the year ended December 31, 2001 is incorporated herein by reference.
Competitive Conditions
Astronics experiences considerable competition in its segments, principally in the areas of product performance and price, from various competitors, many of which are substantially larger and have greater resources. Success in the Aerospace-Electronics segment depends upon product innovation, customer support, responsiveness, and cost management. Astronics continues to invest in developing the technologies and engineering support critical to competing in our Aerospace-Electronics markets. Success in Printing-Packaging is dependent upon competitive pricing, innovative and responsive customer support and short lead time delivery performance. Astronics has invested and will continue to invest in state-of-the-art process and systems technology.
Backlog
"Backlog" on page 23 of the Annual Shareholders' Report for the year ended December 31, 2001 is incorporated herein by reference.
Patents
The Company has a number of patents and has filed numerous applications for others. While the aggregate protection of these patents is of value, the Company does not consider that the successful conduct of any material part of its business is dependent upon the protection afforded by these patents. The Company's patents and patent applications relate to electroluminescence, instrument panels, keyboard technology and various components used in their manufacture. The Company regards its expertise and techniques as proprietary and relies upon trade secret laws and contractual arrangements to protect its rights.
Research Activities
The Company is engaged in a variety of research and development activities directed to the substantial improvement or new application of the Company's technologies. The extent of the Company's engagement in basic research, however, is not material.
Employees
The Company employed approximately 700 employees as of December 31, 2001, including 432 in the Aerospace-Electronics segment, 263 in the Printing-Packaging segment and 5 at the corporate level, compared to 703 as of December 31, 2000, including 435 in the Aerospace-Electronics segment, 268 in the Printing-Packaging segment and 6 at the corporate level as of that date. The Company considers its relations with its employees to be good.
Item 2.
Item 2. PROPERTIES
Corporate Headquarters
The Company's corporate office occupies approximately 2,000 square feet at 1801 Elmwood Avenue, Buffalo, NY 14207, in a building which is shared with the Printing-Packaging segment.
Aerospace-Electronics
The Company owns manufacturing and office facilities of approximately 70,000 square feet in the Buffalo, New York area and 80,000 square feet in Lebanon, New Hampshire. Montreal, Quebec, Canada operations are in leased facilities of approximately 15,000 square feet. The lease expires in 2006.
Printing-Packaging
The Company owns buildings totaling approximately 250,000 square feet in the Buffalo, New York area for its manufacturing and office facilities.
The Company believes that its properties are suitable and adequate for the purpose for which they are employed. Additions and expansions are made as needed. In general, the capacity of the Company's properties are in excess of its current requirements.
Item 3.
Item 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings, other than routine litigation incidental to the business, to which the Registrant or any of its subsidiaries is a party or of which any of their property is the subject.
Item 4.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
PART II
Item 5.
Item 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Information with respect to the market price of and dividends on the Company's Common Stock and related shareholder matters appears on the inside back cover and pages 20, 23 and 25 of the Company's Annual Report to Shareholders for the fiscal year ended December 31, 2001, and is incorporated herein by reference.
Item 6.
Item 6. SELECTED FINANCIAL DATA
Selected Financial Data appears on page 20 of the Company's Annual Report to Shareholders for the fiscal year ended December 31, 2001, and is incorporated herein by reference.
Item 7.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's discussion and analysis of financial condition, changes in financial condition and results of operations appears on pages 21 through 23 of the Company's Annual Report to Shareholders for the fiscal year ended December 31, 2001, and is incorporated herein by reference.
Item 7A.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk disclosures appears on page 23 of the Company's Annual Report to Shareholders for the fiscal year ended December 31, 2001, and is incorporated herein by reference.
Item 8.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Financial Statements of Astronics Corporation which are incorporated by reference in this Annual Report on Form 10-K are described in the accompanying Index to Financial Statements at Item 14 of this Report.
Item 9.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
PART III
Item 10.
Item 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The information regarding directors is contained under the captions "Election of Directors" and "Record Date and Voting Securities" in the Company's definitive Proxy Statement dated March 25, 2002 and is incorporated herein by reference.
Certain information regarding executive officers is contained under the captions "Executive Compensation" and "Record Date and Voting Securities" in the Company's definitive Proxy Statement dated March 25, 2002 and on the back inside cover of the Company's Annual Report to Shareholders for the fiscal year ended December 31, 2001, submitted herewith as an exhibit, which are both incorporated herein by reference.
The executive officers of the Company, their ages, their positions and offices with the Company, and the date each assumed their office with the Company are as follows:
Name and Age
of Executive Officer
Positions and Offices with Astronics
Year First Elected Officer
Kevin T. Keane
Age 69
Chairman of the Board, President, Chief Executive Officer and Director of the Company
Peter J. Gundermann
Age 39
President, Luminescent Systems, Inc., an Astronics subsidiary
Daniel G. Keane
Age 36
President, MOD-PAC CORP, an Astronics subsidiary
C. Anthony Rider
Age 50
Vice President-Finance and Treasurer, and Chief Financial Officer of the Company.
Prior to joining the Company in July 2000, Mr. Rider was a partner in the firm of Ernst & Young LLP in the Buffalo, New York office. The principal occupation and employment for all other executives listed above for the past five years has been with the Company.
Item 11.
Item 11. EXECUTIVE COMPENSATION
The information contained under the caption "Executive Compensation" in the Company's definitive Proxy Statement dated March 25, 2002 is incorporated herein by reference.
Item 12.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information contained under the caption "Record Date and Voting Securities" in the Company's definitive Proxy Statement dated March 25, 2002 is incorporated herein by reference.
Item 13.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information contained under the caption "Certain Relationships and Related Transactions" in the Company's definitive Proxy Statement dated March 25, 2002 is incorporated herein by reference.
PART IV
Item 14.
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The documents filed as a part of this report are as follows:
1. Consolidated Financial Statements
2. Financial Statement Schedules
See Index to Financial Statements and Financial Statement Schedules.
All other consolidated financial schedules are omitted because they are inapplicable, not required, or the information is included elsewhere in the consolidated financial statements or the notes thereto.
3. Exhibits
Exhibit No.
Description
3(a)
Restated Certificate of Incorporation, as amended; incorporated by reference to exhibit 3(a) of the Registrant's December 31, 1988 Annual Report on Form 10-K.
(b)
By-Laws, as amended; incorporated by reference to exhibit 3(b) of the Registrant's December 31, 1996 Annual Report on Form 10-K.
10.1*
Restated Thrift and Profit Sharing Retirement Plan; incorporated by reference to exhibit 10.1 of the Registrant's December 31, 1994 Annual Report on Form 10-KSB.
10.2*
Incentive Stock Option Plan; incorporated by reference to the Registrant's definitive proxy statement dated March 26, 1982.
10.3*
Director Stock Option Plan; incorporated by reference to the Registrant's definitive proxy statement dated March 16, 1984.
10.4*
1992 Incentive Stock Option Plan; incorporated by reference to the Registrant's definitive proxy statement dated March 30, 1992.
10.5*
1993 Director Stock Option Plan; incorporated by reference to the Registrant's definitive proxy statement dated March 19, 1993.
10.6*
1997 Director Stock Option Plan; incorporated by reference to the Registrant's definitive proxy statement dated March 14, 1997.
10.7*
2001 Stock Option Plan; incorporated by reference to the Registrant's definitive proxy statement dated March 19, 2001.
10.8*
Non-Qualified Supplemental Retirement Plan; incorporated by reference from the Registrant's 1999 Annual Report on Form 10-K.
2001 Annual Report to Shareholders; filed herewith.
(Except for those portions which are expressly incorporated by reference in this Annual Report on Form 10-K, this exhibit is furnished for the information of the Securities and Exchange Commission and is not deemed to be filed as part of this Annual Report on Form 10-K.)
Subsidiaries of the Registrant; filed herewith.
Consent of Independent Auditors; filed herewith.
*identifies a management contract or compensatory plan or arrangement as required by Item 14(a)(3) of Form 10-K.
(b)
Reports on Form 8-K
None
<PAGE>
ASTRONICS CORPORATION
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The consolidated financial statements, together with the report thereon of Ernst & Young LLP dated January 25, 2002, appearing on pages 8 to 19 of the accompanying 2001 Annual Report to Shareholders are incorporated by reference in this Annual Report on Form 10-K.
Financial schedules for the years 2001, 2000, and 1999:
Page
Valuation and Qualifying Accounts
<PAGE>
SCHEDULE II
ASTRONICS CORPORATION
VALUATION AND QUALIFYING ACCOUNTS
(in thousands)
Year
Description
Balance at the Beginning of Period
Charged to Costs and Expense
Write-offs/ Recoveries
Balance at
End of Period
Allowance for Doubtful Accounts $182 $ 95 $ (29) $ 248
Allowance for Doubtful Accounts $178 $ 54 $ (50) $ 182
Allowance for Doubtful Accounts $238 $(55) $ (5) $ 178
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 27, 2002.
Astronics Corporation
By: /s/ Kevin T. Keane
Kevin T. Keane, President
and Chief Executive Officer
By: /s/ C. Anthony Rider
C. Anthony Rider, Vice-President-Finance
and Treasurer, Principal Financial and
Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Robert T. Brady
Robert T. Brady
Director
March 27, 2002
/s/ John B. Drenning
John B. Drenning
Director
March 27, 2002
/s/ Peter J. Gundermann
Peter J. Gundermann
Director
March 27, 2002
/s/ Daniel G. Keane
Daniel G. Keane
Director
March 27, 2002
/s/ Kevin T. Keane
Kevin T. Keane
Director
March 27, 2002
/s/ Robert J. McKenna
Robert J. McKenna
Director
March 27, 2002
ASTRONICS CORPORATION
INDEX TO EXHIBITS
*identifies a management contract or compensatory plan or arrangement as required by Item 14(a)(3) of Form 10-K.