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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

☒ | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended April 2, 2022
or

☐ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to
Commission File Number 0-7087

ASTRONICS CORPORATION
(Exact name of registrant as specified in its charter)

New York (State or other jurisdiction of incorporation or organization) | 16-0959303 (IRS Employer Identification Number)
130 Commerce Way, East Aurora, New York (Address of principal executive offices) | 14052 (Zip code)

(716) 805-1599
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:

Title of each class | Trading Symbol | Name of each exchange on which registered
Common Stock, $.01 par value per share | ATRO | NASDAQ Stock Market

NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

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Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “large accelerated filer”, an “accelerated filer”, a “non-accelerated filer” and a “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer | ☐ | Accelerated filer | ☒ | Emerging growth company | ☐
Non-accelerated filer | ☐ | Smaller Reporting Company | ☐ |  |

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)
of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý
As of May 2, 2022, 31,889,644 shares of common stock were outstanding consisting of 25,557,155 shares of common stock ($.01 par value) and 6,332,489 shares of Class B common stock ($.01 par value).

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TABLE OF CONTENTS

|  |  |  |  |  |  | PAGE
PART I |  | FINANCIAL INFORMATION |
|  | Item 1 |  | Financial Statements: |
|  |  |  | • |  | Consolidated Condensed Balance Sheets as of April 2, 202 2 and December 31, 20 21 | 3
|  |  |  | • |  | Consolidated Condensed Statements of Operations for the Three Months Ended April 2, 202 2 and April 3, 20 21 | 4
|  |  |  | • |  | Consolidated Condensed Statements of Comprehensive Loss for the Three Months Ended April 2, 202 2 and April 3, 2021 | 5
|  |  |  | • |  | Consolidated Condensed Statements of Cash Flows for the Three Months Ended April 2, 202 2 and April 3, 202 1 | 6
|  |  |  | • |  | Consolidated Condensed Statements of Shareholders' Equity for the Three Months Ended A pril 2, 202 2 and April 3, 202 1 | 7
|  |  |  | • |  | Notes to Consolidated Condensed Financial Statements | 9
|  | Item 2 |  | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 20
|  | Item 3 |  | Quantitative and Qualitative Disclosures about Market Risk | 26
|  | Item 4 |  | Controls and Procedures | 26
PART II |  | OTHER INFORMATION |
|  | Item 1 |  | Legal Proceedings | 27
|  | Item 1a |  | Risk Factors | 27
|  | Item 2 |  | Unregistered Sales of Equity Securities and Use of Proceeds | 27
|  | Item 3 |  | Defaults Upon Senior Securities | 27
|  | Item 4 |  | Mine Safety Disclosures | 27
|  | Item 5 |  | Other Information | 27
|  | Item 6 |  | Exhibits | 28
SIGNATURES | 29

2

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Part I – Financial Information
Item 1. Financial Statements
ASTRONICS CORPORATION
Consolidated Condensed Balance Sheets
April 2, 2022 with Comparative Figures for December 31, 2021
(Unaudited)
(In thousands)

| April 2, 2022 |  | December 31, 2021
Current Assets: |  |  |
Cash and Cash Equivalents | $ | 24,015 |  |  | $ | 29,757 |
Accounts Receivable, Net of Allowance for Estimated Credit Losses | 117,495 |  |  | 107,439 |
Inventories | 166,088 |  |  | 157,576 |
Prepaid Expenses and Other Current Assets | 18,331 |  |  | 45,089 |
Total Current Assets | 325,929 |  |  | 339,861 |
Property, Plant and Equipment, Net of Accumulated Depreciation | 93,028 |  |  | 95,236 |
Operating Right-of-Use Assets | 14,736 |  |  | 16,169 |
Other Assets | 5,961 |  |  | 5,270 |
Intangible Assets, Net of Accumulated Amortization | 90,504 |  |  | 94,320 |
Goodwill | 58,313 |  |  | 58,282 |
Total Assets | $ | 588,471 |  |  | $ | 609,138 |
Current Liabilities: |  |  |
Accounts Payable | $ | 43,400 |  |  | $ | 34,860 |
Current Operating Lease Liabilities | 6,095 |  |  | 6,778 |
Accrued Expenses and Other Current Liabilities | 44,492 |  |  | 49,619 |
Customer Advance Payments and Deferred Revenue | 27,198 |  |  | 27,356 |
Total Current Liabilities | 121,185 |  |  | 118,613 |
Long-term Debt | 137,000 |  |  | 163,000 |
Long-term Operating Lease Liabilities | 10,964 |  |  | 12,018 |
Other Liabilities | 59,240 |  |  | 58,903 |
Total Liabilities | 328,389 |  |  | 352,534 |
Shareholders’ Equity: |  |  |
Common Stock | 354 |  |  | 353 |
Accumulated Other Comprehensive Loss | (14,325) |  |  | (14,495) |
Other Shareholders’ Equity | 274,053 |  |  | 270,746 |
Total Shareholders’ Equity | 260,082 |  |  | 256,604 |
Total Liabilities and Shareholders’ Equity | $ | 588,471 |  |  | $ | 609,138 |

See notes to consolidated condensed financial statements.
3

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ASTRONICS CORPORATION
Consolidated Condensed Statements of Operations
Three Months Ended April 2, 2022 With Comparative Figures for 2021
(Unaudited)
(In thousands, except per share data)

|  |  | Three Months Ended
|  |  |  |  | April 2, 2022 |  | April 3, 2021
Sales |  |  |  |  | $ | 116,176 |  |  | $ | 105,857 |
Cost of Products Sold |  |  |  |  | 96,243 |  |  | 91,584 |
Gross Profit |  |  |  |  | 19,933 |  |  | 14,273 |
Selling, General and Administrative Expenses |  |  |  |  | 24,100 |  |  | 23,785 |
Loss from Operations |  |  |  |  | (4,167) |  |  | (9,512) |
Net Gain on Sale of Business |  |  |  |  | (11,284) |  |  | — |
Other Expense, Net of Other Income |  |  |  |  | 462 |  |  | 534 |
Interest Expense, Net of Interest Income |  |  |  |  | 1,631 |  |  | 1,758 |
Income (Loss) Before Income Taxes |  |  |  |  | 5,024 |  |  | (11,804) |
Provision for Income Taxes |  |  |  |  | 8,125 |  |  | 105 |
Net Loss |  |  |  |  | $ | (3,101) |  |  | $ | (11,909) |
Loss Per Share: |  |  |  |  |  |  |
Basic |  |  |  |  | $ | (0.10) |  |  | $ | (0.39) |
Diluted |  |  |  |  | $ | (0.10) |  |  | $ | (0.39) |

See notes to consolidated condensed financial statements.
4

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ASTRONICS CORPORATION
Consolidated Condensed Statements of Comprehensive Loss
Three Months Ended April 2, 2022 With Comparative Figures for 2021
(Unaudited)
(In thousands)

|  |  | Three Months Ended
|  |  |  |  | April 2, 2022 |  | April 3, 2021
Net Loss |  |  |  |  | $ | (3,101) |  |  | $ | (11,909) |
Other Comprehensive Income (Loss): |  |  |  |  |  |  |
Foreign Currency Translation Adjustments |  |  |  |  | (181) |  |  | (637) |
Retirement Liability Adjustment – Net of Tax |  |  |  |  | 351 |  |  | 434 |
Total Other Comprehensive Income (Loss) |  |  |  |  | 170 |  |  | (203) |
Comprehensive Loss |  |  |  |  | $ | (2,931) |  |  | $ | (12,112) |

See notes to consolidated condensed financial statements.
5

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ASTRONICS CORPORATION
Consolidated Condensed Statements of Cash Flows
Three Months Ended April 2, 2022 With Comparative Figures for 2021

(Unaudited, In thousands) | Three Months Ended
| April 2, 2022 |  | April 3, 2021
Cash Flows from Operating Activities: |  |  |
Net Loss | $ | (3,101) |  |  | $ | (11,909) |
Adjustments to Reconcile Net Loss to Cash Flows from Operating Activities: |  |  |
Depreciation and Amortization | 7,088 |  |  | 7,453 |
Provisions for Non-Cash Losses on Inventory and Receivables | 175 |  |  | 1,269 |
Equity-based Compensation Expense | 2,101 |  |  | 2,097 |
Non-Cash Accrued 401K Contribution | 1,011 |  |  | — |
Deferred Tax Benefit | — |  |  | (51) |
Operating Lease Non-Cash Expense | 1,424 |  |  | 1,185 |
Net Gain on Sale of Business, Before Taxes | (11,284) |  |  | — |
Other | 513 |  |  | 1,315 |
Cash Flows from Changes in Operating Assets and Liabilities: |  |  |
Accounts Receivable | (10,024) |  |  | (6,010) |
Inventories | (9,015) |  |  | 430 |
Accounts Payable | 8,625 |  |  | (4,171) |
Accrued Expenses | (1,380) |  |  | (685) |
Other Current Assets and Liabilities | (363) |  |  | 961 |
Customer Advance Payments and Deferred Revenue | (113) |  |  | 2,915 |
Income Taxes | 16,492 |  |  | (246) |
Operating Lease Liabilities | (1,724) |  |  | (1,307) |
Supplemental Retirement Plan and Other Liabilities | (109) |  |  | (109) |
Cash Flows from Operating Activities | 316 |  |  | (6,863) |
Cash Flows from Investing Activities: |  |  |
Proceeds from Sale of Businesses | 21,961 |  |  | — |
Capital Expenditures | (1,160) |  |  | (1,905) |
Cash Flows from Investing Activities | 20,801 |  |  | (1,905) |
Cash Flows from Financing Activities: |  |  |
Proceeds from Long-term Debt | 17,925 |  |  | — |
Principal Payments on Long-term Debt | (43,925) |  |  | — |
Stock Award Activity | 108 |  |  | (52) |
Finance Lease Principal Payments | (23) |  |  | (501) |
Debt Acquisition Costs | (771) |  |  | — |
Cash Flows from Financing Activities | (26,686) |  |  | (553) |
Effect of Exchange Rates on Cash | (173) |  |  | (362) |
Decrease in Cash and Cash Equivalents | (5,742) |  |  | (9,683) |
Cash and Cash Equivalents at Beginning of Period | 29,757 |  |  | 40,412 |
Cash and Cash Equivalents at End of Period | $ | 24,015 |  |  | $ | 30,729 |

See notes to consolidated condensed financial statements.
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ASTRONICS CORPORATION
Consolidated Condensed Statements of Shareholders' Equity
Three Months Ended April 2, 2022 With Comparative Figures for 2021
(Unaudited)
(In thousands)

|  |  | Three Months Ended
|  |  |  |  | April 2, 2022 |  | April 3, 2021
Common Stock |  |  |  |  |  |  |
Beginning of Period |  |  |  |  | $ | 289 |  |  | $ | 278 |
Net Issuance of Common Stock for Restricted Stock Units (“RSU’s”) |  |  |  |  | 1 |  |  | — |
Class B Stock Converted to Common Stock |  |  |  |  | — |  |  | 1 |
End of Period |  |  |  |  | 290 |  |  | 279 |
Convertible Class B Stock |  |  |  |  |  |  |
Beginning of Period |  |  |  |  | 64 |  |  | 69 |
Class B Stock Converted to Common Stock |  |  |  |  | — |  |  | (1) |
End of Period |  |  |  |  | 64 |  |  | 68 |
Additional Paid in Capital |  |  |  |  |  |  |
Beginning of Period |  |  |  |  | 92,037 |  |  | 82,187 |
Net Exercise of Stock Options and Equity-based Compensation Expense |  |  |  |  | 2,501 |  |  | 2,045 |
Tax Withholding Related to Issuance of RSU’s |  |  |  |  | (293) |  |  | — |
End of Period |  |  |  |  | 94,245 |  |  | 84,232 |
Accumulated Comprehensive Loss |  |  |  |  |  |  |
Beginning of Period |  |  |  |  | (14,495) |  |  | (16,450) |
Foreign Currency Translation Adjustments |  |  |  |  | (181) |  |  | (637) |
Retirement Liability Adjustment – Net of Taxes |  |  |  |  | 351 |  |  | 434 |
End of Period |  |  |  |  | (14,325) |  |  | (16,653) |
Retained Earnings |  |  |  |  |  |  |
Beginning of Period |  |  |  |  | 287,225 |  |  | 312,803 |
Net Loss |  |  |  |  | (3,101) |  |  | (11,909) |
Reissuance of Treasury Shares for 401K Contribution |  |  |  |  | (5,077) |  |  | — |
End of Period |  |  |  |  | 279,047 |  |  | 300,894 |
Treasury Stock |  |  |  |  |  |  |
Beginning of Period |  |  |  |  | (108,516) |  |  | (108,516) |
Shares Issued to Fund 401K Obligation |  |  |  |  | 9,277 |  |  | — |
End of Period |  |  |  |  | (99,239) |  |  | (108,516) |
Total Shareholders’ Equity |  |  |  |  | $ | 260,082 |  |  | $ | 260,304 |

See notes to consolidated condensed financial statements.
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ASTRONICS CORPORATION
Consolidated Condensed Statements of Shareholders' Equity, Continued
Three Months Ended April 2, 2022 With Comparative Figures for 2021
(Unaudited)
(In thousands)

|  |  | Three Months Ended
(Shares) |  |  |  |  | April 2, 2022 |  | April 3, 2021
Common Stock |  |  |  |  |  |  |
Beginning of Period |  |  |  |  | 28,911 |  |  | 27,825 |
Net Issuance from Exercise of Stock Options |  |  |  |  | 20 |  |  | 19 |
Net Issuance of Common Stock for RSU’s |  |  |  |  | 42 |  |  | — |
Class B Stock Converted to Common Stock |  |  |  |  | 36 |  |  | 53 |
End of Period |  |  |  |  | 29,009 |  |  | 27,897 |
Convertible Class B Stock |  |  |  |  |  |  |
Beginning of Period |  |  |  |  | 6,375 |  |  | 6,877 |
Net Issuance from Exercise of Stock Options |  |  |  |  | 24 |  |  | 13 |
Class B Stock Converted to Common Stock |  |  |  |  | (36) |  |  | (53) |
End of Period |  |  |  |  | 6,363 |  |  | 6,837 |
Treasury Stock |  |  |  |  |  |  |
Beginning of Period |  |  |  |  | 3,808 |  |  | 3,808 |
Shares Issued to Fund 401K Obligation |  |  |  |  | (325) |  |  | — |
End of Period |  |  |  |  | 3,483 |  |  | 3,808 |

See notes to consolidated condensed financial statements.
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ASTRONICS CORPORATION
Notes to Consolidated Condensed Financial Statements
April 2, 2022
(Unaudited)
1) Basis of Presentation
The accompanying unaudited statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included.
Operating Results
The results of operations for any interim period are not necessarily indicative of results for the full year. In addition, the COVID-19 pandemic has increased the volatility we experience in our financial results in recent periods and this could continue in future interim and annual periods. Operating results for the three months ended April 2, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.
The balance sheet at December 31, 2021 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements.
For further information, refer to the financial statements and footnotes thereto included in Astronics Corporation’s 2021 annual report on Form 10-K.
Description of the Business
Astronics Corporation (“Astronics” or the “Company”) is a leading provider of advanced technologies to the global aerospace, defense and electronics industries. Our products and services include advanced, high-performance electrical power generation, distribution and motion systems, lighting and safety systems, avionics products, systems and certification, aircraft structures and automated test systems.
We have principal operations in the United States (“U.S.”), Canada, France and England, as well as engineering offices in the Ukraine and India.
On February 13, 2019, the Company completed a divestiture of its semiconductor test business within the Test Systems segment. The transaction included two elements of contingent earnouts. In December 2021, the Company agreed to a payment of $10.7 million for the calendar 2020 earnout, which was recorded in the fourth quarter of 2021 and was received by the Company in early January 2022. In March 2022, the Company agreed with the earnout calculation for the calendar 2021 earnout in the amount of $11.3 million. The Company recorded the gain and received the payment in the first quarter of 2022.
Impact of the COVID-19 Pandemic
On March 11, 2020, the World Health Organization classified the COVID-19 outbreak as a pandemic. The spread of the COVID-19 pandemic disrupted businesses on a global scale, led to significant volatility in financial markets and affected the aviation and industrial industries. Substantially all of our operations and production activities have, to-date, remained operational. However, the impacts of the pandemic have placed labor and supply chain pressures on our business and we have been impacted by customer demand variability. Although we saw stable and growing backlog during the first half of 2022 in our aerospace business, COVID-19 related disruptions are ongoing and continue to adversely challenge our commercial transport market. While we remain bullish about the aerospace business, we believe the recovery to pre-pandemic activity, particularly in the widebody market, will take longer than originally anticipated at the outset of the pandemic. As economic activity continues to recover, we will continue to monitor the situation, assessing further possible implications on our operations, supply chain, liquidity, cash flow and customer orders.
The Company qualified for government subsidies from the Canadian and French governments as a result of the COVID-19 pandemic’s impact on our foreign operations. The Canadian and French subsidies are income-based grants intended to reimburse the Company for certain employee wages. The grants are recognized as income over the periods in which the Company recognizes as expenses the costs the grants are intended to defray. The amount recognized in the first quarter of 2022 was immaterial.
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In September 2021 the Company was awarded a grant of up to $14.7 million from the U.S. Department of Transportation (“USDOT”) under the Aviation Manufacturing Jobs Protection Program (“AMJP”). The Company received $7.4 million under the grant in 2021 and $5.2 million in the first quarter of 2022. The Company expects to receive the remainder in 2022. The receipt of the full award is primarily conditioned upon the Company committing to not furlough, lay off or reduce the compensation levels of a defined group of employees during the six-month period of performance between September 2021 and March 2022. The grant benefit is being recognized ratably over the six-month performance period as a reduction to cost of products sold in proportion to the compensation expense that the award is intended to defray. During the quarter ended April 2, 2022, the Company recognized $6.0 million of the award.
The following table presents the COVID-19 related government assistance, including AMJP, recorded during the three months ended April 2, 2022:

|  |  | Three Months Ended
(In thousands) |  |  |  |  | April 2, 2022 |  | April 3, 2021
Cost of Products Sold |  |  |  |  | $ | 6,085 |  |  | $ | 545 |
Selling, General and Administrative Expenses |  |  |  |  | 14 |  |  | 68 |
Total |  |  |  |  | $ | 6,099 |  |  | $ | 613 |

Trade Accounts Receivable and Contract Assets
The allowance for estimated credit losses is based on the Company’s assessment of the collectability of customer accounts. The Company regularly reviews the allowance by considering factors such as the age of the receivable balances, historical experience, credit quality, current economic conditions, and reasonable and supportable forecasts of future economic conditions that may affect a customer’s ability to pay. The allowance for estimated credit losses balance was $2.9 million and $3.2 million at April 2, 2022 and December 31, 2021, respectively. The Company’s bad debt included insignificant expense during the three months ended April 2, 2022, and expense of $0.3 million in the three months ended April 3, 2021. Total write offs charged against the allowance were $0.1 million in the three months ended April 2, 2022, and insignificant in the three months ended April 3, 2021. Total recoveries were $0.2 million and insignificant in the three months ended April 2, 2022 and April 3, 2021, respectively.
The Company's exposure to credit losses may increase if its customers are adversely affected by global economic recessions, disruption associated with the current COVID-19 pandemic, industry conditions, or other customer-specific factors. Although the Company has historically not experienced significant credit losses, it is possible that there could be a material adverse impact from potential adjustments of the carrying amount of trade receivables and contract assets as airlines and other aerospace companies’ cash flows are impacted by the COVID-19 pandemic.
Research and Development Expenses
Research and development costs are expensed as incurred and include salaries, benefits, consulting, material costs and depreciation. Research and development expenses amounted to $12.2 million and $10.3 million for the three-month periods ended April 2, 2022 and April 3, 2021, respectively. These costs are included in Cost of products sold.
Goodwill Impairment
The Company tests goodwill at the reporting unit level on an annual basis or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.
As of April 2, 2022, the Company concluded that no indicators of impairment relating to intangible assets or goodwill existed and an interim test was not performed in the three months then ended.
Valuation of Long-Lived Assets
Long-lived assets are evaluated for recoverability whenever adverse effects or changes in circumstances indicate that the carrying value may not be recoverable. The recoverability test consists of comparing the undiscounted projected cash flows with the carrying amount. Should the carrying amount exceed undiscounted projected cash flows, an impairment loss would be recognized to the extent the carrying amount exceeds fair value. As of April 2, 2022 and for the three month period then ended, the Company concluded that no indicators of impairment relating to long-lived assets existed.
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Foreign Currency Translation
The aggregate foreign currency transaction gain or loss included in operations was insignificant for the three months ended April 2, 2022 and April 3, 2021.
Recent Accounting Pronouncement
Recent Accounting Pronouncement Adopted

Standard | Description | Financial Statement Effect or Other Significant Matters
ASU No. 2021-08 Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers | This amendment requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with Topic 606, Revenue from Contracts with Customers, as if it had originated the contracts. Under the current business combinations guidance, such assets and liabilities are recognized by the acquirer at fair value on the acquisition date. The standard will not impact acquired contract assets or liabilities from business combinations occurring prior to the adoption date. | This ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. The impact of adoption on the Company's consolidated financial statements will be prospective only and depend on the magnitude of future business acquisitions. Date of adoption: Q1 2022

We consider the applicability and impact of all ASUs. ASUs not listed above were assessed and determined to be either not applicable, or had or are expected to have minimal impact on our financial statements and related disclosures.
2) Revenue
On April 2, 2022, we had $475.1 million of remaining performance obligations, which we refer to as total backlog. We expect to recognize approximately $364.3 million of our remaining performance obligations as revenue in the remainder of 2022.
We recognized $6.0 million and $8.3 million during the three months ended April 2, 2022 and April 3, 2021, respectively, in revenues that were included in the contract liability balance at the beginning of the period.
The Company's contract assets and contract liabilities consist primarily of costs and profits in excess of billings and billings in excess of cost and profits, respectively. The following table presents the beginning and ending balances of contract assets and contract liabilities during the three months ended April 2, 2022:

(In thousands) |  | Contract Assets |  | Contract Liabilities
Beginning Balance, January 1, 2022 |  | $ | 25,941 |  |  | $ | 28,495 |
Ending Balance, April 2, 2022 |  | $ | 29,841 |  |  | $ | 28,214 |

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The following table presents our revenue disaggregated by Market Segments as follows:

|  |  |  | Three Months Ended
(In thousands) |  |  |  |  |  | April 2, 2022 |  | April 3, 2021
Aerospace Segment |  |  |  |  |  |  |  |
Commercial Transport |  |  |  |  |  | $ | 64,089 |  |  | $ | 38,208 |
Military |  |  |  |  |  | 14,976 |  |  | 20,982 |
Business Jet |  |  |  |  |  | 15,867 |  |  | 14,028 |
Other |  |  |  |  |  | 6,462 |  |  | 8,198 |
Aerospace Total |  |  |  |  |  | 101,394 |  |  | 81,416 |
Test Systems Segment |  |  |  |  |  |  |  |
Aerospace & Defense |  |  |  |  |  | 14,782 |  |  | 24,441 |
Test Systems Total |  |  |  |  |  | 14,782 |  |  | 24,441 |
Total |  |  |  |  |  | $ | 116,176 |  |  | $ | 105,857 |

The following table presents our revenue disaggregated by Product Lines as follows:

|  |  |  | Three Months Ended
(In thousands) |  |  |  |  |  | April 2, 2022 |  | April 3, 2021
Aerospace Segment |  |  |  |  |  |  |  |
Electrical Power & Motion |  |  |  |  |  | $ | 44,467 |  |  | $ | 29,344 |
Lighting & Safety |  |  |  |  |  | 29,211 |  |  | 27,100 |
Avionics |  |  |  |  |  | 18,875 |  |  | 14,843 |
Systems Certification |  |  |  |  |  | 1,002 |  |  | 878 |
Structures |  |  |  |  |  | 1,377 |  |  | 1,053 |
Other |  |  |  |  |  | 6,462 |  |  | 8,198 |
Aerospace Total |  |  |  |  |  | 101,394 |  |  | 81,416 |
Test Systems |  |  |  |  |  | 14,782 |  |  | 24,441 |
Total |  |  |  |  |  | $ | 116,176 |  |  | $ | 105,857 |

3) Inventories
Inventories consisted of the following:

(In thousands) | April 2, 2022 |  | December 31, 2021
Finished Goods | $ | 29,952 |  |  | $ | 28,579 |
Work in Progress | 26,866 |  |  | 22,954 |
Raw Material | 109,270 |  |  | 106,043 |
| $ | 166,088 |  |  | $ | 157,576 |

The Company has evaluated the carrying value of existing inventories and believe they are properly reflected at their lower of carrying value or net realizable value. Future changes in demand or other market developments could result in future inventory charges. The Company is actively managing inventories and aligning them to meet known current and future demand.
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4) Property, Plant and Equipment
Property, Plant and Equipment consisted of the following:

(In thousands) | April 2, 2022 |  | December 31, 2021
Land | $ | 8,608 |  |  | $ | 8,632 |
Buildings and Improvements | 70,430 |  |  | 70,566 |
Machinery and Equipment | 122,467 |  |  | 121,960 |
Construction in Progress | 6,183 |  |  | 5,680 |
| 207,688 |  |  | 206,838 |
Less Accumulated Depreciation | 114,660 |  |  | 111,602 |
| $ | 93,028 |  |  | $ | 95,236 |

5) Intangible Assets
The following table summarizes acquired intangible assets as follows:

|  | April 2, 2022 |  | December 31, 2021
(In thousands) | Weighted Average Life |  | Gross Carrying Amount |  | Accumulated Amortization |  | Gross Carrying Amount |  | Accumulated Amortization
Patents | 11 years |  | $ | 2,146 |  |  | $ | 2,000 |  |  | $ | 2,146 |  |  | $ | 1,979 |
Non-compete Agreement | 4 years |  | 11,082 |  |  | 10,719 |  |  | 11,082 |  |  | 10,592 |
Trade Names | 10 years |  | 11,426 |  |  | 8,732 |  |  | 11,447 |  |  | 8,518 |
Completed and Unpatented Technology | 9 years |  | 47,898 |  |  | 31,561 |  |  | 47,932 |  |  | 30,441 |
Customer Relationships | 15 years |  | 142,211 |  |  | 71,247 |  |  | 142,276 |  |  | 69,033 |
Total Intangible Assets | 12 years |  | $ | 214,763 |  |  | $ | 124,259 |  |  | $ | 214,883 |  |  | $ | 120,563 |

All acquired intangible assets other than goodwill and one trade name are being amortized. Amortization expense for acquired intangibles is summarized as follows:

|  |  |  | Three Months Ended
(In thousands) |  |  |  |  |  | April 2, 2022 |  | April 3, 2021
Amortization Expense |  |  |  |  |  | $ | 3,765 |  |  | $ | 3,855 |

Amortization expense for acquired intangible assets expected for 2022 and for each of the next five years is summarized as follows:

(In thousands) |
2022 | $ | 14,918 |
2023 | $ | 13,878 |
2024 | $ | 12,856 |
2025 | $ | 10,935 |
2026 | $ | 9,533 |
2027 | $ | 7,825 |

6) Goodwill
The following table summarizes the changes in the carrying amount of goodwill for the three months ended April 2, 2022:

(In thousands) | December 31, 2021 |  |  |  |  |  | Foreign Currency Translation |  | April 2, 2022
Aerospace | $ | 36,648 |  |  |  |  |  |  | $ | 31 |  |  | $ | 36,679 |
Test Systems | 21,634 |  |  |  |  |  |  | — |  |  | 21,634 |
| $ | 58,282 |  |  |  |  |  |  | $ | 31 |  |  | $ | 58,313 |

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The Company tests goodwill at the reporting unit level on an annual basis or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.
As of April 2, 2022 and April 3, 2021, the Company concluded that no indicators of impairment relating to intangible assets or goodwill existed and an interim test was not performed in the three months then ended.
7) Long-term Debt and Notes Payable
The Company's long-term debt consists of borrowings under its Fifth Amended and Restated Credit Agreement (the “Agreement”). On March 1, 2022, the Company executed an amendment to the Agreement, which reduced the revolving credit line from $375 million to $225 million and extended the maturity date of the loans under the facility from February 16, 2023 to May 30, 2023. Interest is payable on the unpaid principal amount of the facility at a rate equal to the Secured Overnight Financing Rate (“SOFR”, which shall be at least 1.00%), plus between 1.50% to 3.25% based upon the Company’s leverage ratio. The Company also pays a commitment fee to the lenders in an amount equal to 0.10% to 0.40% on the undrawn portion of the Amended Facility, based upon the Company’s leverage ratio. The amendment provided for the payment of a consent fee of 10 basis points of the commitment for each consenting lender.
At April 2, 2022, there was $137.0 million outstanding on the revolving credit facility and there remained $86.9 million available subject to the minimum liquidity covenant discussed below, net of outstanding letters of credit. The credit facility allocates up to $20 million of the $375 million revolving credit line for the issuance of letters of credit, including certain existing letters of credit. At April 2, 2022, outstanding letters of credit totaled $1.1 million. The amendment will require the Company to maintain minimum liquidity, defined as unrestricted cash plus the unused revolving credit commitments, of $35 million. The maximum net leverage ratio is set at 4.75 to 1 for the first and second quarters of 2022 and 3.75 to 1 thereafter, and the definition of Adjusted EBITDA has been modified to exclude income from earnout payments and asset sales. The Company was in compliance with its financial covenants at April 2, 2022.
The Amended Facility temporarily restricts certain activities, including dividend payments, acquisitions and share repurchases, through the third quarter of 2022. The Company’s obligations under the Amended Facility are jointly and severally guaranteed by each domestic subsidiary of the Company other than non-material subsidiaries.
The obligations are secured by a first priority lien on substantially all of the Company’s and the guarantors’ assets. In the event of voluntary or involuntary bankruptcy of the Company or any subsidiary, all unpaid principal and other amounts owing under the Amended Facility automatically become due and payable. Other events of default, such as failure to make payments as they become due and breach of financial and other covenants, change of control, judgments over a certain amount, and cross default under other agreements give the agent the option to declare all such amounts immediately due and payable.
While we expect to be able to refinance, replace or extend the maturity date of our credit facility before it matures, we cannot be sure that we will be able to obtain such debt refinancing on commercially reasonable terms or at all. We are currently in the process of evaluating terms and conditions for a new long-term financing arrangement. The extent to which we will be able to effect such refinancing, replacement or maturity extension on terms that are favorable to us or at all is dependent on a number of highly uncertain factors, including then-prevailing credit and other market conditions, economic conditions, particularly in the aerospace and defense markets, disruptions or volatility caused by factors such as COVID-19, regional conflicts, inflation, and supply chain disruptions. In addition, rising interest rates could limit our ability to refinance our existing credit facility when it matures or cause us to pay higher interest rates upon refinancing. As the Company’s long-term debt approaches maturity, if the Company is unable to refinance, replace or extend the maturity on its credit facility, the Company’s liquidity, results of operations, and financial condition could be materially adversely impacted. If we are unable to obtain a new long-term financing facility before we file our second quarter 2022 Form 10-Q to replace our existing debt facility, borrowings outstanding under our existing credit facility will come due within 12 months of that filing date and could result in substantial doubt about our ability to continue as a going concern in the event that we are not reasonably assured to have sufficient cash balances to repay the remaining obligations at maturity.
8) Product Warranties
In the ordinary course of business, the Company warrants its products against defects in design, materials and workmanship typically over periods ranging from twelve to sixty months. The Company determines warranty reserves needed by product line based on experience and current facts and circumstances.
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Activity in the warranty accrual is summarized as follows:

|  |  |  | Three Months Ended
(In thousands) |  |  |  |  |  | April 2, 2022 |  | April 3, 2021
Balance at Beginning of Period |  |  |  |  |  | $ | 8,183 |  |  | $ | 7,018 |
Warranties Issued |  |  |  |  |  | 785 |  |  | 808 |
Warranties Settled |  |  |  |  |  | (163) |  |  | (685) |
Reassessed Warranty Exposure |  |  |  |  |  | (756) |  |  | (299) |
Balance at End of Period |  |  |  |  |  | $ | 8,049 |  |  | $ | 6,842 |

9) Income Taxes
The effective tax rates were approximately 161.7% and (0.9)% for the three months ended April 2, 2022 and April 3, 2021, respectively. Beginning with the 2022 tax year, certain research and development costs are required to be capitalized and amortized over sixty months for income tax purposes. The tax rate in the 2022 period was impacted by a valuation allowance applied against the deferred tax asset associated with the research and development costs that are expected to be capitalized and was partially offset by the removal of valuation allowances related to net operating losses, tax credit carryovers, and certain timing differences that are expected to reverse during 2022.
The Company records a valuation allowance against the deferred tax assets if and to the extent it is more likely than not that the Company will not recover the deferred tax assets. In evaluating the need for a valuation allowance, the Company weights all relevant positive and negative evidence, and considers among other factors, historical financial performance, projected future taxable income, scheduled reversals of deferred tax liabilities, the overall business environment, and tax planning strategies. Losses in recent periods and cumulative pre-tax losses in the three year period ending with the current year, combined with the significant uncertainty brought about by the COVID-19 pandemic, is collectively considered significant negative evidence under ASC 740 when assessing whether an entity can use projected income as a basis for concluding that deferred tax assets are realizable on a more-likely than not basis. For purposes of assessing the recoverability of deferred tax assets, the Company determined that it could not include future projected earnings in the analysis due to recent history of losses and therefore had insufficient objective positive evidence that the Company will generate sufficient future taxable income to overcome the negative evidence of cumulative losses. Accordingly, during the years ended December 31, 2021 and 2020, the Company determined that a portion of its deferred tax assets are not expected to be realizable in the future and the Company continues to maintain the valuation allowance against its deferred tax assets as of April 2, 2022.
10) Earnings Per Share
Basic and diluted weighted-average shares outstanding are as follows:

|  |  |  | Three Months Ended
(In thousands) |  |  |  |  |  | April 2, 2022 |  | April 3, 2021
Weighted Average Shares - Basic |  |  |  |  |  | 31,933 |  |  | 30,903 |
Net Effect of Dilutive Stock Options |  |  |  |  |  | — |  |  | — |
Weighted Average Shares - Diluted |  |  |  |  |  | 31,933 |  |  | 30,903 |

Stock options with exercise prices greater than the average market price of the underlying common shares are excluded from the computation of diluted earnings per share because they are out-of-the-money and the effect of their inclusion would be anti-dilutive. The number of common shares covered by out-of-the-money stock options was approximately 848,000 shares as of April 2, 2022 and 652,000 shares as of April 3, 2021. Further, due to our net loss in the three month periods ended April 2, 2022 and April 3, 2021, the assumed exercise of stock compensation had an antidilutive effect and therefore was excluded from the computation of diluted loss per share.
Currently, the Company expects to fund the 401K contribution for the quarter ended April 2, 2022 with treasury stock in lieu of cash. The earnings per share calculation for the quarter ended April 2, 2022 is inclusive of the approximately 0.1 million in shares outstanding for the equivalent shares needed to fulfill the obligation using the closing share price as of April 2, 2022. Actual shares issued may differ based on the sale price on the settlement date.
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11) Shareholders' Equity
Share Buyback and Reissuance
The Company’s Board of Directors from time to time authorizes the repurchase of common stock, which allows the Company to purchase shares of its common stock in accordance with applicable securities laws on the open market or through privately negotiated transactions. Common shares repurchased by the Company are recorded at cost as treasury shares and result in a reduction of equity. Under its current credit agreement, and as described further in Note 7, the Company is currently restricted from further stock repurchases.
When treasury shares are reissued, the Company determines the cost using an average cost method. The difference between the cost of the treasury shares and reissuance price is included in Additional paid-in capital or Retained earnings. During the three months ended April 2, 2022, the Company reissued 325,000 treasury shares and recorded the difference between the cost and the reissuance price, $5.1 million, as a reduction to Retained earnings.
Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss)
The components of accumulated other comprehensive loss are as follows:

(In thousands) | April 2, 2022 |  | December 31, 2021
Foreign Currency Translation Adjustments | $ | (5,588) |  |  | $ | (5,407) |
Retirement Liability Adjustment – Before Tax | (11,019) |  |  | (11,370) |
Tax Benefit of Retirement Liability Adjustment | 2,282 |  |  | 2,282 |
Retirement Liability Adjustment – After Tax | (8,737) |  |  | (9,088) |
Accumulated Other Comprehensive Loss | $ | (14,325) |  |  | $ | (14,495) |

The components of other comprehensive income (loss) are as follows:

|  |  | Three Months Ended
(In thousands) |  |  |  |  | April 2, 2022 |  | April 3, 2021
Foreign Currency Translation Adjustments |  |  |  |  | $ | (181) |  |  | $ | (637) |
Retirement Liability Adjustments: |  |  |  |  |  |  |
Reclassifications to General and Administrative Expense: |  |  |  |  |  |  |
Amortization of Prior Service Cost |  |  |  |  | 101 |  |  | 101 |
Amortization of Net Actuarial Losses |  |  |  |  | 250 |  |  | 333 |
Retirement Liability Adjustment |  |  |  |  | 351 |  |  | 434 |
Other Comprehensive Income (Loss) |  |  |  |  | $ | 170 |  |  | $ | (203) |

12) Supplemental Retirement Plan and Related Post Retirement Benefits
The Company has two non-qualified supplemental retirement defined benefit plans (“SERP” and “SERP II”) for certain current and retired executive officers. The following table sets forth information regarding the net periodic pension cost for the plans.

|  |  | Three Months Ended
(In thousands) |  |  |  |  | April 2, 2022 |  | April 3, 2021
Service Cost |  |  |  |  | $ | 34 |  |  | $ | 49 |
Interest Cost |  |  |  |  | 209 |  |  | 191 |
Amortization of Prior Service Cost |  |  |  |  | 97 |  |  | 97 |
Amortization of Net Actuarial Losses |  |  |  |  | 239 |  |  | 323 |
Net Periodic Cost |  |  |  |  | $ | 579 |  |  | $ | 660 |

Participants in the SERP are entitled to paid medical, dental and long-term care insurance benefits upon retirement under the plan. The Company also has a defined benefit plan related to its subsidiary in France. The net periodic cost for both plans for the three months ended April 2, 2022 and April 3, 2021 is immaterial.
The service cost component of net periodic benefit costs above is recorded in Selling, General and Administrative Expenses within the Consolidated Condensed Statements of Operations, while the remaining components are recorded in Other Expense, Net of Other Income.
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13) Sales to Major Customers
The loss of major customers or a significant reduction in business with a major customer would significantly, negatively impact our sales and earnings. In the three months ended April 2, 2022, the Company had one customer in excess of 10% of consolidated sales. Sales to The Boeing Company (“Boeing”) accounted for 13.4% of sales in the three months ended April 2, 2022. Accounts receivable from Boeing at April 2, 2022 were approximately $13.3 million. In the three months ended April 3, 2021, the Company had no customers in excess of 10% of consolidated sales.
14) Legal Proceedings
Lufthansa
One of the Company’s subsidiaries is involved in numerous patent infringement actions brought by Lufthansa Technik AG (“Lufthansa”) in Germany, UK and France. The Company is vigorously defending all such litigation and proceedings. Additional information about these legal proceedings can be found in Note 19 “Legal Proceedings” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The reserve for the German indirect claim and UK damages and interest was approximately $24.8 million at April 2, 2022, which included an additional $0.2 million in interest accrued during the three months then ended. We currently believe it is unlikely that the appeals process will be completed or the damages and related interest will be paid within the next twelve months. Therefore, the liability related to these matters is classified within Other Liabilities (non-current) in the Consolidated Condensed Balance Sheets at April 2, 2022 and December 31, 2021. There were no other significant developments in any of these matters during the three months ended April 2, 2022.
At December 31, 2021, we had recorded a liability of $1.0 million for reimbursement of Lufthansa’s legal expenses associated with the UK matter. During the quarter ended April 2, 2022, $0.2 million was paid. The remaining liability of $0.8 million is expected to be paid within the next twelve months and, as such, is classified in Accrued Expenses and Other Current Liabilities in the accompanying Consolidated Condensed Balance Sheet as of April 2, 2022.
Other
On March 23, 2020, Teradyne, Inc. filed a complaint against the Company and its subsidiary, Astronics Test Systems (“ATS”) (together, “the Defendants”) in the United States District Court for the Central District of California alleging patent and copyright infringement, and certain other related claims. The Defendants moved to dismiss certain claims from the case. On November 6, 2020, the Court dismissed the Company from the case, and also dismissed a number of claims, though the patent and copyright infringement claims remain. The case is currently in discovery. In addition, on December 21, 2020, ATS filed a petition for inter partes review (“IPR”) with the US Patent Trial and Appeal Board (“PTAB”), seeking to invalidate the subject patent, and on July 21, 2021, the PTAB instituted IPR. ATS requested and, on August 26, 2021, the District Court granted, a stay of litigation during the IPR proceeding. Oral arguments on the IPR were held on April 21, 2022 and a final written decision is expected by July 2022. No amounts have been accrued for this matter in the April 2, 2022 or December 31, 2021 financial statements, as loss exposure was neither probable nor estimable at such times.
Other than these proceedings, we are not party to any significant pending legal proceedings that management believes will result in a material adverse effect on our financial condition or results of operations.
15) Segment Information
Below are the sales and operating profit (loss) by segment for the three months ended April 2, 2022 and April 3, 2021 and a reconciliation of segment operating profit (loss) to income before income taxes. Operating profit is net sales less cost of products sold and other operating expenses excluding interest and corporate expenses. Cost of products sold and other operating expenses are directly identifiable to the respective segment.
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|  |  | Three Months Ended
(In thousands) |  |  |  |  | April 2, 2022 |  | April 3, 2021
Sales: |  |  |  |  |  |  |
Aerospace |  |  |  |  | $ | 101,394 |  |  | $ | 81,430 |
Less Inter-segment Sales |  |  |  |  | — |  |  | (14) |
Total Aerospace Sales |  |  |  |  | 101,394 |  |  | 81,416 |
Test Systems |  |  |  |  | 14,798 |  |  | 24,745 |
Less Inter-segment Sales |  |  |  |  | (16) |  |  | (304) |
Total Test Systems Sales |  |  |  |  | 14,782 |  |  | 24,441 |
Total Consolidated Sales |  |  |  |  | $ | 116,176 |  |  | $ | 105,857 |
Segment Measure of Operating Profit (Loss) and Margins |  |  |  |  |  |  |
Aerospace |  |  |  |  | $ | 3,050 |  |  | $ | (5,563) |
|  |  |  |  | 3.0 | % |  | (6.8) | %
Test Systems |  |  |  |  | (1,787) |  |  | 1,189 |
|  |  |  |  | (12.1) | % |  | 4.9 | %
Total Segment Measure of Operating Profit (Loss) |  |  |  |  | 1,263 |  |  | (4,374) |
|  |  |  |  | 1.1 | % |  | (4.1) | %
Deductions from Segment Measure of Operating Profit (Loss) |  |  |  |  |  |  |
Net Gain on Sale of Business |  |  |  |  | (11,284) |  |  | — |
Interest Expense, Net of Interest Income |  |  |  |  | 1,631 |  |  | 1,758 |
Corporate Expenses and Other |  |  |  |  | 5,892 |  |  | 5,672 |
Profit (Loss) Before Income Taxes |  |  |  |  | $ | 5,024 |  |  | $ | (11,804) |

Total Assets:

(In thousands) |  | April 2, 2022 |  | December 31, 2021
Aerospace |  | $ | 465,611 |  |  | $ | 458,334 |
Test Systems |  | 96,285 |  |  | 105,335 |
Corporate |  | 26,575 |  |  | 45,469 |
Total Assets |  | $ | 588,471 |  |  | $ | 609,138 |

16) Fair Value
A fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. Fair value is based upon an exit price model. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and involves consideration of factors specific to the asset or liability.
The Company follows a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.
Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value.
On a Recurring Basis:
A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.
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On October 4, 2019, the Company acquired the stock of the primary operating subsidiaries as well as certain other assets from mass transit and defense market test solution provider, Diagnosys Test Systems Limited for $7.0 million in cash, plus an earn-out estimated at a fair value of $2.5 million at the time of acquisition. The terms of the Diagnosys acquisition allow for a potential earn-out of up to an additional $13.0 million over the three years post-acquisition based on achievement of new order levels of over $72.0 million during that period. The fair value assigned to the earnout was determined using the real options method, which requires Level 3 inputs such as new order forecasts, discount rate, volatility factors, and other market variables to assess the probability of Diagnosys achieving certain order levels over the period. Based on actual and forecasted new orders, the fair value was zero as of April 2, 2022 and December 31, 2021.
There were no other financial assets or liabilities carried at fair value measured on a recurring basis at December 31, 2021 or April 2, 2022.
On a Non-recurring Basis:
There were no non-recurring fair value measurements performed in the quarters ending April 2, 2022 and April 3, 2021.
Due to their short-term nature, the carrying value of cash and equivalents, accounts receivable, accounts payable, and notes payable approximate fair value. The carrying value of the Company’s variable rate long-term debt instruments also approximates fair value due to the variable rate feature of these instruments.
17) Restructuring Charges
The COVID-19 pandemic has significantly impacted the global economy, and particularly the aerospace industry, resulting in reduced expectations of the Company’s anticipated future operating results. As a result, the Company executed restructuring activities in the form of workforce reduction, primarily in the second quarter of 2020, to align capacity with expected demand. Additional restructuring activities occurred during 2021 to align the workforce to expected activities and to consolidate certain facilities.
There were $0.1 million and in restructuring-related severance charges and other charges recorded in the three months ended April 2, 2022. There were no restructuring charges recorded in the three months ended April 3, 2021.
The following tables reconcile the beginning and ending liability for restructuring charges:

|  | 2022
Balance as of January 1 |  | $ | 2,400 |
Restructuring Charges |  | 84 |
Cash Paid |  | (1,275) |
Balance as of April 2 |  | $ | 1,209 |

The liability is recorded within Accounts Payable ($0.9 million) and Accrued Expenses and Other Current Liabilities ($0.3 million) and is comprised of payments to be made under AeroSat’s non-cancelable inventory purchase commitments as well as employee termination benefits expected to be paid within the next 12 months. The non-cancelable purchase commitments are for inventory which was not expected to be purchased prior to the expiration date of such agreements as a result of the restructuring plan.
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Item 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(The following should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the Company’s Form 10-K for the year ended December 31, 2021.)
OVERVIEW
Astronics Corporation (“Astronics” or the “Company”) is a leading supplier of advanced technologies and products to the global aerospace and defense industries. Our products and services include advanced, high-performance electrical power generation and distribution systems, seat motion solutions, lighting and safety systems, avionics products, aircraft structures, systems certification, and automated test systems.
Our Aerospace segment designs and manufactures products for the global aerospace industry. Product lines include lighting and safety systems, electrical power generation, distribution and seat motions systems, aircraft structures, avionics products, systems certification, and other products. Our primary Aerospace customers are the airframe manufacturers (“OEM”) that build aircraft for the commercial, military and general aviation markets, suppliers to those OEM’s, aircraft operators such as airlines, suppliers to the aircraft operators, and branches of the U.S. Department of Defense (“USDOD”). Our Test Systems segment designs, develops, manufactures and maintains automated test systems that support the aerospace and defense, communications and mass transit industries as well as training and simulation devices for both commercial and military applications. In the Test Systems segment, Astronics’ products are sold to a global customer base including OEM's and prime government contractors for both electronics and military products.
Our strategy is to increase our value by developing technologies and capabilities, either internally or through acquisition, and using those capabilities to provide innovative solutions to our targeted markets where our technology can be beneficial.
Important factors affecting our growth and profitability are the ongoing impacts of the COVID-19 pandemic and the timing and extent of recovery (as discussed more fully below), supply chain pressures, the rate at which new aircraft are produced, government funding of military programs, our ability to have our products designed into new aircraft and the rates at which aircraft owners, including commercial airlines, refurbish or install upgrades to their aircraft. New aircraft build rates and aircraft owners spending on upgrades and refurbishments is cyclical and dependent on the strength of the global economy. Once designed into a new aircraft, the spare parts business is frequently retained by the Company. Future growth and profitability of the Test Systems business is dependent on developing and procuring new and follow-on business. The nature of our Test Systems business is such that it pursues large, often multi-year, projects. There can be significant periods of time between orders in this business which may result in large fluctuations of sales and profit levels and backlog from period to period. Test Systems segment customers include the USDOD, prime contractors to the USDOD, mass transit operators and prime contractors to mass transit operators.
In September 2021 the Company also entered into an agreement with the U.S. Department of Transportation (“USDOT”) under the Aviation Manufacturing Jobs Protection Program (“AMJP”) for a grant of up to $14.7 million. The Company received $7.4 million under the grant in 2021 and $5.2 million in the first quarter of 2022. The Company expects to receive the remainder in the second or third quarter of 2022 upon final confirmation from the USDOT of the Company meeting its grant commitments. The receipt of the full award is primarily conditioned upon the Company committing to not furlough, lay off or reduce the compensation levels of a defined group of employees during the six-month period of performance between September 2021 and March 2022. The grant benefit will be recognized over the six-month performance period as a reduction to cost of products sold in proportion to the compensation expense that the award is intended to defray. The Company recognized the remaining $6.0 million of the award during the quarter ended April 2, 2022.
On February 13, 2019, the Company completed a divestiture of its semiconductor test business within the Test Systems segment. The total proceeds of the divestiture amounted to $103.8 million plus certain contingent purchase consideration (“earn-out”).
The transaction included two elements of contingent earnouts. In the fourth quarter of 2021, the Company agreed to an earnout payment of $10.7 million for the calendar 2020 earnout, which was recorded in 2021 as a separate line item below operating loss and was received by the Company in early January 2022. In March 2022, the Company agreed with the earnout calculation for the calendar 2021 earnout in the amount of $11.3 million. The Company recorded the gain and received the payment in the first quarter of 2022.
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CONSOLIDATED RESULTS OF OPERATIONS AND OUTLOOK

|  |  | Three Months Ended
($ in thousands) |  |  |  |  | April 2, 2022 |  | April 3, 2021
Sales |  |  |  |  | $ | 116,176 |  |  | $ | 105,857 |
Gross Profit (sales less cost of products sold) |  |  |  |  | $ | 19,933 |  |  | $ | 14,273 |
Gross Margin |  |  |  |  | 17.2 | % |  | 13.5 | %
Selling, General and Administrative Expenses |  |  |  |  | $ | 24,100 |  |  | $ | 23,785 |
SG&A Expenses as a Percentage of Sales |  |  |  |  | 20.7 | % |  | 22.5 | %
Net Gain on Sale of Businesses |  |  |  |  | $ | (11,284) |  |  | $ | — |
Interest Expense, Net of Interest Income |  |  |  |  | $ | 1,631 |  |  | $ | 1,758 |
Effective Tax Rate |  |  |  |  | 161.7 | % |  | (0.9) | %
Net Loss |  |  |  |  | $ | (3,101) |  |  | $ | (11,909) |

A discussion by segment can be found at “Segment Results of Operations and Outlook” in this MD&A.
CONSOLIDATED FIRST QUARTER RESULTS
Consolidated sales were up $10.3 million from the first quarter of 2021. Aerospace sales were up $20.0 million, or 24.5%, and Test System sales decreased $9.7 million. While demonstrating some improvement, sales continued to reflect the ongoing impacts of the COVID-19 pandemic on the global aerospace industry. Supply chain pressures continue to impact delivery schedules and costs, limiting the Company’s ability to respond to desired requests from customers and delaying shipments. Supply chain challenges caused about $15 million in revenue to slide out of the quarter. These orders were not lost and will remain in backlog until the required raw materials arrive.
Consolidated cost of products sold in the first quarter of 2022 was $96.2 million, compared with $91.6 million in the prior-year period. The increase was primarily due to higher volume as the global aerospace industry continues its recovery from the COVID-19 pandemic. The current year period benefited from $6.0 million recognized as an offset to cost of products sold related to the AMJP award. Research and development expenses increased $1.9 million due to higher innovation spend.
Selling, general and administrative (“SG&A”) expenses were $24.1 million in the first quarter of 2022 compared with $23.8 million in the prior-year period.
In March 2022, the Company agreed with the earnout calculation from the buyer of its former semiconductor test business for an earnout in the amount of $11.3 million related to performance in calendar 2021. The Company recorded the gain and received the payment in the first quarter of 2022. The semiconductor test business was sold in 2019.
The effective tax rate for the quarter was 161.7%, compared with (0.9)% in the first quarter of 2021. In the past, research and development costs were deducted as incurred. However, beginning with the 2022 tax year, these costs are required to be capitalized for tax purposes and amortized over 5 years. The tax rate was also impacted by a valuation allowance applied against the associated deferred tax asset created by the new treatment, due to the Company’s cumulative losses over the last three years.
Consolidated net loss was $3.1 million, or $0.10 per diluted share, compared with net loss of $11.9 million, or $0.39 per diluted share, in the prior year.
Bookings were $175.6 million, for a book-to-bill ratio of 1.51:1. Backlog at the end of the quarter was $475.1 million. Approximately $364.3 million, or 77%, of backlog is expected to ship in the remainder of 2022.
COVID-19 Impacts on Our Business
On March 11, 2020, the World Health Organization classified the COVID-19 outbreak as a pandemic. The spread of the COVID-19 pandemic disrupted businesses on a global scale, led to significant volatility in financial markets and affected the aviation and industrial industries. Substantially all of our operations and production activities have, to-date, remained operational. However, the impacts of the pandemic have placed labor and supply chain pressures on our business and we have been impacted by customer demand variability. Although we saw stable and growing backlog during the first half of 2022 in our aerospace business, COVID-19 related disruptions are ongoing and continue to adversely challenge our commercial transport market. While we remain bullish about the aerospace business, we believe the recovery to pre-pandemic activity, particularly in the widebody market, will take longer than originally anticipated at the outset of the pandemic. As economic
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activity continues to recover, we will continue to monitor the situation, assessing further possible implications on our operations, supply chain, liquidity, cash flow and customer orders.
See Part II, Item 1A, Risk Factors, for an additional discussion of risk related to supply chain disruptions and the recent government vaccine mandates.
Outlook
We are maintaining our previous revenue guidance of $550 million to $600 million for the year. We believe this range accommodates the supply chain and labor challenges that we are likely to face, although some unpredictability certainly exists. We expect volume to ramp as we move though the year. We expect revenue in the second quarter will be between $125 million and $135 million, with similar rates of improvement in the third and fourth quarters.
Consolidated backlog at April 2, 2022 was $475.1 million. Approximately 77% of the backlog is expected to be recognized as revenue in 2022.
Planned capital expenditures for 2022 are expected to be approximately $15 million to $20 million.
While core aerospace markets have strengthened as vaccination rates rise and passenger traffic accelerated, the ultimate impact of COVID-19 on our business, results of operations, financial condition and cash flows is dependent on future developments, including the duration of the pandemic, virus variants, vaccination rates and efficacy and the related length of impact on the global economy, supply chain and specifically on the markets we are active in, which are uncertain and cannot be predicted at this time.
SEGMENT RESULTS OF OPERATIONS AND OUTLOOK
Operating profit, as presented below, is sales less cost of products sold and other operating expenses, excluding interest expense, other corporate expenses and other non-operating sales and expenses. Cost of products sold and other operating expenses are directly identifiable to the respective segment. Operating loss is reconciled to loss before income taxes in Note 15 of the Notes to Consolidated Condensed Financial Statements included in this report.
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AEROSPACE SEGMENT

|  |  | Three Months Ended
(In thousands) |  |  |  |  | April 2, 2022 |  | April 3, 2021
Sales |  |  |  |  | $ | 101,394 |  |  | $ | 81,430 |
Less Inter-segment Sales |  |  |  |  | — |  |  | (14) |
Total Aerospace Sales |  |  |  |  | $ | 101,394 |  |  | $ | 81,416 |
Operating Profit (Loss) |  |  |  |  | $ | 3,050 |  |  | $ | (5,563) |
Operating Margin |  |  |  |  | 3.0 | % |  | (6.8) | %
Aerospace Sales by Market |  |  |  |  |  |  |
(In thousands) |  |  |  |  |  |  |
Commercial Transport |  |  |  |  | $ | 64,089 |  |  | $ | 38,208 |
Military |  |  |  |  | 14,976 |  |  | 20,982 |
Business Jet |  |  |  |  | 15,867 |  |  | 14,028 |
Other |  |  |  |  | 6,462 |  |  | 8,198 |
|  |  |  |  | $ | 101,394 |  |  | $ | 81,416 |
Aerospace Sales by Product Line |  |  |  |  |  |  |
(In thousands) |  |  |  |  |  |  |
Electrical Power & Motion |  |  |  |  | $ | 44,467 |  |  | $ | 29,344 |
Lighting & Safety |  |  |  |  | 29,211 |  |  | 27,100 |
Avionics |  |  |  |  | 18,875 |  |  | 14,843 |
Systems Certification |  |  |  |  | 1,002 |  |  | 878 |
Structures |  |  |  |  | 1,377 |  |  | 1,053 |
Other |  |  |  |  | 6,462 |  |  | 8,198 |
|  |  |  |  | $ | 101,394 |  |  | $ | 81,416 |

(In thousands) | April 2, 2022 |  | December 31, 2021
Total Assets | $ | 465,611 |  |  | $ | 458,334 |
Backlog | $ | 394,043 |  |  | $ | 334,659 |

AEROSPACE FIRST QUARTER RESULTS
Aerospace segment sales increased $20.0 million, or 24.5%, to $101.4 million. Commercial aerospace sales increased 67.7%, or $25.9 million, and drove the improvement. Sales to this market were $64.1 million, or 55.1% of consolidated revenue in the quarter, compared with $38.2 million, or 36.1% of consolidated revenue in the first quarter of 2021. Improving domestic travel, increased narrowbody production rates including the 737 MAX and higher fleet utilization are driving increased demand for Astronics products.
General Aviation sales increased $1.8 million, or 13.1%, to $15.9 million as higher demand in the business jet market somewhat offset lower VVIP activity. The Company expects the strong demand being realized in the business jet industry to translate into higher demand for its products as OEM production levels increase.
Military Aircraft sales decreased $6.0 million, or 28.6%, to $15.0 million. The prior-year period benefited from incremental non-recurring engineering revenue associated with development of new programs and higher sales of lighting and safety products.
Aerospace segment operating profit was $3.1 million compared with operating loss of $5.6 million for the same period last year. The improvement was driven by increased sales and the $6.0 million AMJP benefit, partially offset by a $0.8 million increase of expense associated with the reinstated 401K contribution accrual.
Sequentially, compared with the fourth quarter of 2021, Aerospace revenue grew 2.6% and operating profit improved $5.3 million to $3.1 million.
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AEROSPACE OUTLOOK
Aerospace bookings in the first quarter of 2022 were $160.8 million, for a book-to-bill ratio of 1.59:1. The Aerospace segment’s backlog at the end of the first quarter of 2022 was $394.0 million with approximately $322.5 million expected to be recognized as revenue over the remaining part of 2022 and $356.0 million scheduled over the next 12 months.
Demand has been strong across our aerospace product range, with a book-to-bill of 1.48 over the last twelve months and record high backlog of at the end of the first quarter. Most of this demand has been driven by recovery in the narrowbody market, though in the first quarter we saw signs that the widebody market is picking up also, which is necessary to return to pre-COVID levels in the near future.
TEST SYSTEMS SEGMENT

|  |  | Three Months Ended
(In thousands) |  |  |  |  | April 2, 2022 |  | April 3, 2021
Sales |  |  |  |  | $ | 14,798 |  |  | $ | 24,745 |
Less Inter-segment Sales |  |  |  |  | (16) |  |  | (304) |
Total Test Systems Sales |  |  |  |  | $ | 14,782 |  |  | $ | 24,441 |
Operating (Loss) Profit |  |  |  |  | $ | (1,787) |  |  | $ | 1,189 |
Operating Margin |  |  |  |  | (12.1) | % |  | 4.9 | %

All Test Systems sales are to the Aerospace and Defense Market.

(In thousands) | April 2, 2022 |  | December 31, 2021
Total Assets | $ | 96,285 |  |  | $ | 105,335 |
Backlog | $ | 81,095 |  |  | $ | 81,033 |

TEST SYSTEMS FIRST QUARTER RESULTS
Test Systems segment sales were $14.8 million, down $9.7 million compared with the prior-year period driven by lower defense revenue.
Test Systems operating loss was $1.8 million, or 12.1% of sales, compared with operating profit of $1.2 million, or 4.9% of sales, in the first quarter of 2021. Operating loss in the first quarter of 2022 was negatively affected primarily by lower volume. Operating profit in the first quarter of 2021 was negatively affected by $0.9 million in legal fees related to infringement claims.
TEST SYSTEMS OUTLOOK
Bookings for the Test Systems segment in the quarter were $14.8 million, for a book-to-bill ratio of 1.00:1 for the quarter. The Test Systems segment’s backlog at the end of the first quarter of 2022 was $81.1 million, with approximately $41.8 million expected to be recognized as revenue over the remainder of 2022 and approximately $51.1 million scheduled over the next 12 months.
The first quarter was one of treading water for our Test business, with light shipments and bookings. We are pursuing some significant projects which are scheduled for award mid-year. Those awards will largely determine the trajectory of the business through the end of 2022 and into 2023.
LIQUIDITY AND CAPITAL RESOURCES
Operating Activities:
Cash provided by operating activities totaled $0.3 million for the first three months of 2022, as compared with $6.9 million cash used for operating activities during the same period in 2021. Cash flow from operating activities increased compared with the same period of 2021 primarily related to cash received from income tax refunds and the AMJP program, offset by changes in net operating assets, including increase in accounts receivable and inventory as sales and demand increases.
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Investing Activities:
Cash provided by investing activities was $20.8 million for the first three months of 2022 compared with $1.9 million in cash used for investing activities in the same period of 2021. Investing cash flows in 2022 were positively impacted by the receipt of $10.7 million and $11.3 million related with the calendar 2020 and 2021 earnouts, respectively, from the sale of the semiconductor business. The Company expects capital spending in 2022 to be in the range of $15 million and $20 million.
Financing Activities:
Cash used for financing activities totaled $26.7 million for the first three months of 2022, as compared with $0.6 million cash used for financing activities during the same period in 2021. Cash used for financing activities increased compared with the same period of 2021 due to net payments on our senior credit facility of $26.0 million in the first three months of 2022, coupled with $0.8 million in costs associated with the March 1, 2022 amendment of our credit facility.
At April 2, 2022, there was $137.0 million outstanding on the revolving credit facility and there remained $86.9 million available subject to the minimum liquidity covenant discussed below, net of outstanding letters of credit. The credit facility allocates up to $20 million of the $225 million revolving credit line for the issuance of letters of credit, including certain existing letters of credit. At April 2, 2022, outstanding letters of credit totaled $1.1 million.
On March 1, 2022, the Company executed an amendment to the Amended Facility, which reduced the revolving credit line from $375 million to $225 million and extended the maturity date of the loans under the facility from February 16, 2023 to May 30, 2023. Interest will be payable on the unpaid principal amount of the facility at a rate equal to the Secured Overnight Financing Rate (“SOFR”, which shall be at least 1.00%), plus between 1.50% to 3.25% based upon the Company’s leverage ratio. The Company will also pay a commitment fee to the lenders in an amount equal to 0.10% to 0.40% on the undrawn portion of the Amended Facility, based upon the Company’s leverage ratio. The amendment provided for the payment of a consent fee of 10 basis points of the commitment for each consenting lender.
The amendment requires the Company to maintain minimum liquidity, defined as unrestricted cash plus the unused revolving credit commitments, of $35 million. The maximum net leverage ratio is set at 4.75 to 1 for the first and second quarters of 2022 and 3.75 to 1 thereafter, and the definition of Adjusted EBITDA has been modified to exclude income from earnout payments and asset sales. The Company was in compliance with its financial covenants at April 2, 2022.
The Amended Facility continues the temporary restrictions on certain activities, including dividend payments, acquisitions and share repurchases, through the third quarter of 2022. The Company’s obligations under the Amended Facility are jointly and severally guaranteed by each domestic subsidiary of the Company other than non-material subsidiaries. The obligations are secured by a first priority lien on substantially all of the Company’s and the guarantors’ assets.
In the event of voluntary or involuntary bankruptcy of the Company or any subsidiary, all unpaid principal and other amounts owing under the Amended Facility automatically become due and payable. Other events of default, such as failure to make payments as they become due and breach of financial and other covenants, change of control, judgments over a certain amount, and cross default under other agreements give the agent the option to declare all such amounts immediately due and payable.
We intend to refinance the amended agreement with a new long-term financing facility in the coming months. We are currently in the process of evaluating terms and conditions for a new long-term financing arrangement. If we are unable to obtain a new long-term financing facility before we file our second quarter 2022 Form 10-Q to replace our existing debt facility, borrowings outstanding under our existing debt facility will come due within 12 months of that filing date and could result in substantial doubt about our ability to continue as a going concern in the event that we are not reasonably assured to have sufficient cash balances to repay the remaining obligations at maturity.
Other
In 2021, the Company was awarded a grant of up to $14.7 million as part of the Aviation Manufacturing Jobs Protection (“AMJP”) Program. The grant was being recognized ratably over the six-month period of performance. In the first quarter of 2022, $6.0 million was recognized as an offset to cost of products sold. The period of performance concluded in March 2022.
OFF BALANCE SHEET ARRANGEMENTS
We do not have any material off balance sheet arrangements that have or are reasonably likely to have a material future effect on our results of operations or financial condition.
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BACKLOG
The Company’s backlog at April 2, 2022 was $475.1 million compared with $415.7 million at December 31, 2021 and $297.5 million at April 3, 2021.
CONTRACTUAL OBLIGATIONS AND COMMITMENTS
Except as noted below, our contractual obligations and commitments have not changed materially from the disclosures in our 2021 Annual Report on Form 10-K.
Absent any legislative changes, the Company expects to pay approximately $10 million to $12 million in income tax payments related to the 2022 tax year. These expected tax payments are largely the result of the requirement to capitalize and amortize certain research and development expenses for U.S. tax purposes beginning in 2022.
MARKET RISK
The Company believes that there have been no material changes in the current year regarding the market risk information for its exposure to interest rate fluctuations. Although the majority of our sales, expenses and cash flows are transacted in U.S. dollars, we have exposure to changes in foreign currency exchange rates related primarily to the Euro and the Canadian dollar. The Company believes that the impact of changes in foreign currency exchange rates in 2022 have not been significant.
CRITICAL ACCOUNTING POLICIES
Refer to Note 2 of the Notes to Consolidated Condensed Financial Statements included in this report for the Company’s critical accounting policies with respect to revenue recognition. For a complete discussion of the Company’s other critical accounting policies, refer to the Company’s annual report on Form 10-K for the year ended December 31, 2021.
RECENT ACCOUNTING PRONOUNCEMENTS
Refer to Note 1 of the Notes to Consolidated Condensed Financial Statements included in this report.
FORWARD-LOOKING STATEMENTS
Information included in this report that does not consist of historical facts, including statements accompanied by or containing words such as “may,” “will,” “should,” “believes,” “expects,” “expected,” “intends,” “plans,” “projects,” “approximate,” “estimates,” “predicts,” “potential,” “outlook,” “forecast,” “anticipates,” “presume” and “assume,” are forward-looking statements. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and are subject to several factors, risks and uncertainties, the impact or occurrence of which could cause actual results to differ materially from the expected results described in the forward-looking statements. Certain of these factors, risks and uncertainties are discussed in the sections of this report entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” New factors, risks and uncertainties may emerge from time to time that may affect the forward-looking statements made herein. Given these factors, risks and uncertainties, investors should not place undue reliance on forward-looking statements as predictive of future results. We disclaim any obligation to update the forward-looking statements made in this report.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
See Market Risk in Item 2, above.
Item 4. Controls and Procedures
a.Evaluation of Disclosure Controls and Procedures
The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of April 2, 2022. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of April 2, 2022.
b.Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Currently, we are involved in legal proceedings relating to an allegation of patent infringement and, based on rulings to date we have concluded that losses related to these proceedings are probable. For a discussion of contingencies related to legal proceedings, see Note 14 of the Notes to Consolidated Condensed Financial Statements.
Item 1a. Risk Factors
In addition to other information set forth in this report, you should carefully consider the factors discussed in Part 1, Item 1A. “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2021, which could materially affect our business, financial condition or results of operations. The risks described in our Annual Report on Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or results of operations.
Item 2. Unregistered sales of equity securities and use of proceeds
The following table summarizes our purchases of our common stock for the quarter ended April 2, 2022.

Period | Total Number of Shares Purchased |  | Average Price Paid Per Share |  | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |  | Maximum Dollar Value of Shares that may yet be Purchased Under the Program (2)
January 1, 2022 - January 29, 2022 | — |  |  | $ | — |  |  | — |  |  | $ | 41,483,815 |
January 30, 2022 - February 26, 2022 | — |  |  | $ | — |  |  | — |  |  | $ | 41,483,815 |
February 27, 2022 - April 2, 2022 (1) | 29,464 |  |  | $ | 13.56 |  |  | — |  |  | $ | 41,483,815 |
Total | 29,464 |  |  | $ | 13.56 |  |  | — |  |  |

(1) Represents shares withheld by the Company upon the exercise of stock options and vesting of restricted stock to satisfy tax withholding obligations. On February 28, 2022, we accepted delivery of 7,269 shares at $14.71 in connection with the exercise of stock options. On March 8, 2022, we accepted delivery of 22,195 shares at $13.18 in connection with the vesting of restricted stock.
(2) Previously, the Board of Directors authorized share repurchase programs that authorized repurchases up to certain monetary limits in accordance with applicable securities laws on the open market or through privately negotiated transactions. Under those programs, we purchased approximately 3,498,000 shares for $100 million.
On September 17, 2019, the Board of Directors authorized an additional share repurchase program. This program authorizes repurchases of up to $50 million of common stock. Cumulative repurchases under this plan were approximately 310,000 shares at a cost of $8.5 million before the 10b5-1 plan associated with the share repurchase program was terminated on February 3, 2020. There have been no repurchases since that date.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
None.
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Item 6. Exhibits

Exhibit 31.1 |  | Section 302 Certification - Chief Executive Officer
Exhibit 31.2 |  | Section 302 Certification - Chief Financial Officer
Exhibit 32 |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 101.1* |  | Instance Document
Exhibit 101.2* |  | Schema Document
Exhibit 101.3* |  | Calculation Linkbase Document
Exhibit 101.4* |  | Labels Linkbase Document
Exhibit 101.5* |  | Presentation Linkbase Document
Exhibit 101.6* |  | Definition Linkbase Document

* | Submitted electronically herewith.

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SIGNATURES
Pursuant to the requirements 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.

|  |  | ASTRONICS CORPORATION
|  |  | (Registrant)
Date: | May 9, 2022 |  | By: | /s/ David C. Burney
|  |  |  | David C. Burney Executive Vice President and Chief Financial Officer (Principal Financial Officer)

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