By DAVID ROBINSON (5/12/2007 10:36:47 AM)
Astronics Corp.’s new $7.5 million addition to its East Aurora factory is empty now as the expansion project enters its final stages, but company chief executive Peter Gundermann doesn’t expect it to stay vacant for long.
“Come back in a year. It will be a lot different,” Gundermann said Wednesday, following Astronics annual shareholder’s meeting.
The 57,000-square-foot expansion at Astronics’ East Aurora factory will roughly double the size of of the facility, which makes many of the company’s aircraft lighting products and currently is “bursting at the seams,” Gundermann said.
With Astronics’ aviation markets booming, the company is in the midst of a major expansion program that not only is adding capacity in East Aurora, but also doubling the size of its factory for its booming cabin electronics business in Redmond, Wash.
In East Aurora, that growth — a 49 percent jump in revenues last year and a projected 26 percent increase this year — helped the company add about 55 new jobs over the last year, boosting its local work force to roughly 350 people, said Richard C. Miller, an Astronics vice president. And the company has said it expects to create another 100 new jobs over the next three years.
Fueling much of the growth is the push by airlines to add in-flight entertainment systems that let passengers watch movies or play games during their flights, as well as in-seat power supplies that let them run their laptop computers or other electronic devices.
That contributed to a near tripling of first-quarter sales at Astronics’ cabin electronics business and helped the company more than triple its profits during the first three months of the year. That sparked a furious rally in Astronics stock that has pushed up the shares by 25 percent to a record high close of $25.98 over the last two days.
“Managing growth is a challenging issue,” Gundermann said. “I think it’s harder than shrinking a company. It’s more fun, but it’s harder.”
Gundermann said the expansions in East Aurora and at Astronics AES in Washington will give the company — which expects revenues to rise by about 26 percent this year to $140 million — enough capacity to handle $200 million in sales. Astronics sales have more than tripled over the last two years.
“The critical mass is just coming together,” said Kevin Keane, Astronics’ chairman.
Astronics, which lost money as recently as 2004 after investing heavily in developing products for new aircraft even as the aviation market weathered a post 9/11 collapse, now is reaping the benefits of that development program as those planes enter production in a now robust market, especially among overseas airlines.
“The challenge for a company like ours is to win new programs while they are in development,” said Gundermann, who said Astronics likely will have to go through another cycle of heightened development expenses within a few years.
Shareholders also rejected, by a nearly 5-to-1 margin, a proposal to eliminate the the company’s two classes of stock, which give super voting rights to its Class B shareholders who are dominated by executives and directors.
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