ASTRONICS CORPATRO
ASTRONICS CORP Segments Disclosure
SEGMENTS
The Company reports segment information based on the management approach, which designates the internal reporting used by the Chief Operating Decision Maker (“CODM”) for making decisions and assessing performance as the source of the Company’s reportable segments. The CODM, which is the Company’s Chief Executive Officer, allocates resources and assesses the performance of each operating segment based on historical and potential future product sales, gross margin associated with those sales, and operating income (loss) before interest, taxes, and corporate expenses. The Company has determined its reportable segments to be Aerospace and Test Systems based on the information used by the CODM.
Segment information and reconciliations to consolidated amounts for the years ended December 31 are as follows:
| (In thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Sales: | |||||||||||||||||
| Aerospace | $ | 797,353 | $ | 706,746 | $ | 605,001 | |||||||||||
| Less Inter-segment Sales | (34) | (62) | (171) | ||||||||||||||
| Total Aerospace Sales | 797,319 | 706,684 | 604,830 | ||||||||||||||
| Test Systems | 65,243 | 88,874 | 84,376 | ||||||||||||||
| Less Inter-segment Sales | (434) | (132) | — | ||||||||||||||
| Test Systems | 64,809 | 88,742 | 84,376 | ||||||||||||||
| Total Consolidated Sales | $ | 862,128 | $ | 795,426 | $ | 689,206 | |||||||||||
Less1 | |||||||||||||||||
| Cost of Products Sold: | |||||||||||||||||
| Aerospace | $ | 548,879 | $ | 502,558 | $ | 451,911 | |||||||||||
| 68.8 | % | 71.1 | % | 74.7 | % | ||||||||||||
| Test Systems | $ | 55,091 | $ | 72,440 | $ | 62,763 | |||||||||||
| 85.0 | % | 81.6 | % | 74.4 | % | ||||||||||||
Other Segment Items2 | |||||||||||||||||
| Aerospace | $ | 135,236 | $ | 141,720 | $ | 128,290 | |||||||||||
| Test Systems | $ | 17,563 | $ | 24,779 | $ | 30,358 | |||||||||||
| (In thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Operating Income (Loss) and Margins: | |||||||||||||||||
| Aerospace | $ | 113,204 | $ | 62,406 | $ | 24,629 | |||||||||||
| 14.2 | % | 8.8 | % | 4.1 | % | ||||||||||||
| Test Systems | (7,845) | (8,477) | (8,745) | ||||||||||||||
| (12.1) | % | (9.6) | % | (10.4) | % | ||||||||||||
| Total Operating Income (Loss) | $ | 105,359 | $ | 53,929 | $ | 15,884 | |||||||||||
| 12.2 | % | 6.8 | % | 2.3 | % | ||||||||||||
| Additions to (Deductions from) Operating Profit: | |||||||||||||||||
| Net Gain on Sale of Businesses | $ | — | $ | — | $ | 3,427 | |||||||||||
| Loss on Settlement of Debt | (32,644) | (10,148) | — | ||||||||||||||
| Interest Expense, Net of Interest Income | (12,561) | (21,998) | (23,328) | ||||||||||||||
| Corporate and Other Expenses, Net | (28,209) | (29,650) | (22,294) | ||||||||||||||
| Income (Loss) before Income Taxes | $ | 31,945 | $ | (7,867) | $ | (26,311) | |||||||||||
1 The significant expenses and amounts presented align with the segment-level information that is regularly provided to the CODM. Inter-segment expenses are included within the amounts shown. 2 Other segment items include Selling, General and Administrative Expenses, Research and Development Expenses, and sublease and rental income. | |||||||||||||||||
| Depreciation and Amortization: | |||||||||||||||||
| Aerospace | $ | 18,866 | $ | 19,458 | $ | 20,801 | |||||||||||
| Test Systems | 2,932 | 4,813 | 5,068 | ||||||||||||||
| Corporate | 40 | 195 | 235 | ||||||||||||||
| Total Depreciation and Amortization | $ | 21,838 | $ | 24,466 | $ | 26,104 | |||||||||||
| Assets: | |||||||||||||||||
| Aerospace | $ | 570,294 | $ | 498,528 | |||||||||||||
| Test Systems | 119,603 | 128,828 | |||||||||||||||
| Corporate | 16,781 | 21,408 | |||||||||||||||
| Total Assets | $ | 706,678 | $ | 648,764 | |||||||||||||
| Capital Expenditures: | |||||||||||||||||
| Aerospace | $ | 30,741 | $ | 7,346 | $ | 5,003 | |||||||||||
| Test Systems | 932 | 1,066 | 2,640 | ||||||||||||||
| Corporate | — | 16 | — | ||||||||||||||
| Total Capital Expenditures | $ | 31,673 | $ | 8,428 | $ | 7,643 | |||||||||||
During the year ended December 31, 2024 and 2023, reserves associated with customer bankruptcies of $3.2 million and $11.1 million, respectively, negatively impacted Aerospace Operating Income.
During the year ended December 31, 2023, $5.8 million was recognized in sales related to the reversal of a deferred revenue liability assumed with an acquisition and associated with a customer program within our Test Systems Segment which is no longer expected to occur, which also benefits Test Systems’ operating loss for the year.
Corporate expenses and other for the year ended December 31, 2023, includes income of $1.8 million associated with the reversal of a liability related to an equity investment, as we are no longer required to make the associated payment. This amount is included in Other Income, Net. The higher level of Aerospace capital expenditures in 2025 is related to ongoing facility expansion activities and growth and maintenance expenditures that had been previously deferred during the pandemic.
The following table summarizes the Company’s sales into the following geographic regions for the years ended December 31:
| (In thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| United States | $ | 615,096 | $ | 593,943 | $ | 518,096 | |||||||||||
| North America (excluding United States) | 14,635 | 13,107 | 14,878 | ||||||||||||||
| Asia | 73,265 | 44,176 | 26,165 | ||||||||||||||
| Europe | 153,396 | 139,384 | 123,682 | ||||||||||||||
| South America | 2,117 | 1,445 | 2,071 | ||||||||||||||
| Other | 3,619 | 3,371 | 4,314 | ||||||||||||||
| Total | $ | 862,128 | $ | 795,426 | $ | 689,206 | |||||||||||
The following table summarizes the Company’s property, plant and equipment by country for the years ended December 31:
| (In thousands) | 2025 | 2024 | |||||||||
| United States | $ | 97,325 | $ | 73,749 | |||||||
| France | 6,507 | 5,625 | |||||||||
| Germany | 2,155 | — | |||||||||
| India | 255 | 357 | |||||||||
| Canada | 836 | 956 | |||||||||
| Total | $ | 107,078 | $ | 80,687 | |||||||
Sales recorded by the Company’s foreign operations were $90.1 million, $82.1 million and $69.3 million in 2025, 2024 and 2023, respectively. Net income from foreign operations was $8.2 million, $7.6 million and $5.3 million in 2025, 2024 and 2023, respectively. Net assets held outside of the U.S. total $67.8 million and $41.3 million at December 31, 2025 and 2024, respectively. The exchange gain (loss) included in determining net income was insignificant in 2025, 2024 and 2023. Cumulative translation adjustments amounted to $5.2 million and $8.2 million at December 31, 2025 and 2024, respectively.
The Company has a significant concentration of business with The Boeing Company (“Boeing”). Sales to Boeing are primarily in the Aerospace segment. The following is information relating to the activity with this customer:
| 2025 | 2024 | 2023 | |||||||||||||||
| Percent of Consolidated Sales | |||||||||||||||||
| Boeing | 10.4% | 10.2% | 11.0% | ||||||||||||||
| (In thousands) | 2025 | 2024 | |||||||||
| Accounts Receivable at December 31, | |||||||||||
| Boeing | $ | 19,679 | $ | 10,474 | |||||||
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.