ASTRONICS CORP 10-Q

Item 1. Financial Statements ASTRONICS CORPORATION Consolidated Condensed Balance Sheets April 4, 2026 with Comparative Figures for December 31, 2025 (Unaudited) (In thousands) April 4, 2026 December 31, 2025 Current Assets: Cash and Cash Equivalents $ 11,867 $ 18,180 Accounts Receivable, Net of Allowance for Estimated Credit Losses 217,024 204,672 Inventories 211,945 196,860 Prepaid Expenses and Other Current Assets 27,792 18,027 Total Current Assets 468,628 437,739 Property, Plant and Equipment, Net of Accumulated Depreciation 115,481 107,078 Operating Right-of-Use Assets 32,626 32,269 Other Assets 13,742 11,316 Intangible Assets, Net of Accumulated Amortization 52,320 55,353 Goodwill 64,346 62,923 Total Assets $ 747,143 $ 706,678 Current Liabilities: Accounts Payable $ 55,873 $ 41,080 Current Operating Lease Liabilities 5,986 5,802 Accrued Expenses and Other Current Liabilities 66,183 68,324 Customer Advance Payments and Deferred Revenue 29,666 26,069 Total Current Liabilities 157,708 141,275 Long-term Debt 334,885 334,451 Long-term Operating Lease Liabilities 38,239 38,101 Other Liabilities 54,609 52,777 Total Liabilities 585,441 566,604 Shareholders’ Equity: Common Stock 386 385 Accumulated Other Comprehensive Loss ( 5,438 ) ( 4,410 ) Other Shareholders’ Equity 166,754 144,099 Total Shareholders’ Equity 161,702 140,074 Total Liabilities and Shareholders’ Equity $ 747,143 $ 706,678 See notes to Consolidated Condensed Financial Statements. 3 Table of Contents ASTRONICS CORPORATION Consolidated Condensed Statements of Operations Three Months Ended April 4, 2026 with Comparative Figures for 2025 (Unaudited) (In thousands, except per share data) Three Months Ended April 4, 2026 March 29, 2025 Sales $ 230,619 $ 205,936 Cost of Products Sold 155,486 145,087 Gross Profit 75,133 60,849 Research and Development Expenses 12,089 11,067 Selling, General and Administrative Expenses 35,814 36,645 Income from Operations 27,230 13,137 Other Expense (Income), Net 109 ( 187 ) Interest Expense, Net of Interest Income 2,336 3,150 Income Before Income Taxes 24,785 10,174 (Benefit from) Provision for Income Taxes ( 755 ) 646 Net Income $ 25,540 $ 9,528 Earnings Per Share: Basic $ 0.71 $ 0.27 Diluted $ 0.67 $ 0.26 See notes to Consolidated Condensed Financial Statements. 4 Table of Contents ASTRONICS CORPORATION Consolidated Condensed Statements of Comprehensive Income Three Months Ended April 4, 2026 with Comparative Figures for 2025 (Unaudited) (In thousands) Three Months Ended April 4, 2026 March 29, 2025 Net Income $ 25,540 $ 9,528 Other Comprehensive (Loss) Income: Foreign Currency Translation Adjustments ( 1,155 ) 752 Retirement Liability Adjustment – Net of Tax 127 ( 236 ) Total Other Comprehensive (Loss) Income ( 1,028 ) 516 Comprehensive Income $ 24,512 $ 10,044 See notes to Consolidated Condensed Financial Statements. 5 Table of Contents ASTRONICS CORPORATION Consolidated Condensed Statements of Cash Flows Three Months Ended April 4, 2026 with Comparative Figures for 2025 (Unaudited) Three Months Ended (In thousands) April 4, 2026 March 29, 2025 Cash Flows from Operating Activities: Net Income $ 25,540 $ 9,528 Adjustments to Reconcile Net Income to Cash Flows from Operating Activities: Non-cash items: Depreciation and Amortization 5,894 5,588 Amortization of Deferred Financing Fees 607 602 Provisions for Non-cash Losses on Inventory and Receivables 1,441 1,728 Equity-based Compensation Expense 2,556 2,345 Deferred Tax Expense (Benefit) 62 ( 1,125 ) Operating Lease Non-cash Expense 1,463 1,550 Non-Cash Litigation Provision Adjustment — 6,228 Other 681 ( 214 ) Changes in Operating Assets and Liabilities Providing (Using) Cash: Accounts Receivable ( 13,420 ) ( 2,037 ) Inventories ( 16,404 ) 515 Accounts Payable 14,997 2,867 Operating Lease Liabilities ( 1,515 ) ( 1,071 ) Accrued Expenses ( 6,655 ) ( 11,514 ) Income Taxes ( 982 ) 959 Customer Advance Payments and Deferred Revenue 3,614 2,776 Cloud Computing Implementation Costs ( 2,370 ) — Supplemental Retirement Plan Liabilities ( 181 ) ( 101 ) Other Assets and Liabilities ( 4,722 ) 2,018 Net Cash Provided by Operating Activities 10,606 20,642 Cash Flows from Investing Activities: Capital Expenditures ( 11,160 ) ( 2,105 ) Net Cash Used by Investing Activities ( 11,160 ) ( 2,105 ) Cash Flows from Financing Activities: Proceeds from Long-term Debt 30,000 1,143 Principal Payments on Long-term Debt ( 30,000 ) ( 10,000 ) Financing-related Costs — ( 740 ) Stock Award Activity ( 5,441 ) ( 1,730 ) Other ( 60 ) ( 44 ) Net Cash Used by Financing Activities ( 5,501 ) ( 11,371 ) Effect of Exchange Rates on Cash ( 258 ) 354 (Decrease) Increase in Cash and Cash Equivalents and Restricted Cash ( 6,313 ) 7,520 Cash and Cash Equivalents and Restricted Cash at Beginning of Period 18,180 18,428 Cash and Cash Equivalents and Restricted Cash at End of Period $ 11,867 $ 25,948 Supplemental Disclosure of Cash Flow Information Non-Cash Investing Activities: Capital Expenditures in Accounts Payable $ 425 $ — Interest Paid $ 2,668 $ 2,724 Income Taxes Paid, Net of Refunds $ 195 $ 827 See notes to Consolidated Condensed Financial Statements. 6 Table of Contents ASTRONICS CORPORATION Consolidated Condensed Statements of Shareholders’ Equity Three Months Ended April 4, 2026 with Comparative Figures for 2025 (Unaudited) (In thousands) Three Months Ended April 4, 2026 March 29, 2025 Common Stock Beginning of Period $ 345 $ 329 Net Issuance of Common Stock for Restricted Stock Units (“RSUs”) 2 1 Class B Stock Converted to Common Stock 1 3 End of Period 348 333 Convertible Class B Stock Beginning of Period 40 51 Class B Stock Converted to Common Stock ( 2 ) ( 3 ) End of Period 38 48 Additional Paid in Capital Beginning of Period 4,898 144,149 Equity-based Compensation Expense and Net Exercise of Stock Options, including ESPP 2,556 2,345 Tax Withholding Related to Issuance of RSUs ( 5,441 ) ( 1,730 ) End of Period 2,013 144,764 Accumulated Comprehensive Loss Beginning of Period ( 4,410 ) ( 3,863 ) Foreign Currency Translation Adjustments ( 1,155 ) 752 Retirement Liability Adjustment – Net of Taxes 127 ( 236 ) End of Period ( 5,438 ) ( 3,347 ) Retained Earnings Beginning of Period 216,699 192,208 Net Income 25,540 9,528 End of Period 242,239 201,736 Treasury Stock Beginning of Period ( 77,498 ) ( 76,777 ) End of Period ( 77,498 ) ( 76,777 ) Total Shareholders’ Equity $ 161,702 $ 266,757 See notes to Consolidated Condensed Financial Statements. 7 Table of Contents ASTRONICS CORPORATION Consolidated Condensed Statements of Shareholders’ Equity, Continued Three Months Ended April 4, 2026 with Comparative Figures for 2025 (Unaudited) (In thousands) Three Months Ended (Shares) April 4, 2026 March 29, 2025 Common Stock Beginning of Period 34,464 32,871 Net Issuance of Common Stock for RSUs 160 143 Class B Stock Converted to Common Stock 162 287 End of Period 34,786 33,301 Convertible Class B Stock Beginning of Period 3,966 5,086 Net Issuance from Exercise of Stock Options 1 — Class B Stock Converted to Common Stock ( 162 ) ( 287 ) End of Period 3,805 4,799 Treasury Stock Beginning of Period 2,751 2,694 End of Period 2,751 2,694 See notes to Consolidated Condensed Financial Statements. 8 Table of Contents ASTRONICS CORPORATION Notes to Consolidated Condensed Financial Statements April 4, 2026 (Unaudited) 1) Basis of Presentation The accompanying unaudited statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP 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. Operating results for the three months ended April 4, 2026, are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. The balance sheet on December 31, 2025, 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. GAAP for complete financial statements. For further information, refer to the Consolidated Financial Statements and the notes thereto included in Astronics Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the Securities and Exchange Commission (“SEC”) on February 26, 2026 (the “2025 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 inflight entertainment and connectivity products and services, lighting and safety systems, flight critical electrical power generation and distribution systems, seat motion systems and automated test systems. We have principal operations in the United States (“U.S.”), Canada, France and Germany, as well as engineering offices in Ukraine and India. The Company has two reportable segments, Aerospace and Test Systems. The Aerospace segment designs and manufactures products for the global aerospace and defense industry. Our Test Systems segment designs, develops, manufactures and maintains automated test systems that support the aerospace and defense, communications and mass transit industries. Acquisition Activities On June 30, 2025, the Company purchased the membership interests of Envoy Aerospace, LLC (“Envoy Aerospace”), located in Aurora, Illinois. Envoy Aerospace is an FAA Organization Designation Authorization (“ODA”) services provider. Envoy Aerospace is included in our Aerospace segment. The total purchase price was approximately $ 8.3 million, net of cash acquired and the estimated closing adjustment. Of the purchase price, $ 4.5 million was paid at the closing date. Payments of $ 2.0 million and $ 1.8 million will become payable by the Company following the first and second anniversary of the closing date, respectively, based on the achievement of certain milestones. On October 13, 2025, the Company acquired all of the issued and outstanding capital stock of Bühler Motor Aviation (“BMA”), located in Uhldingen-Mühlhofen, Germany. BMA is an established manufacturer of aircraft seat actuation systems with a broad product portfolio that includes actuators, electronics, control panels, pneumatic systems, and lighting. BMA is included in our Aerospace segment. The total purchase price was approximately $ 18.0 million, net of cash acquired and the estimated closing adjustment. The purchase price was paid at the closing date. Restricted Cash Under the provisions of the ABL Revolving Credit Facility (as defined and discussed below in Note 7, Long-term Debt and Notes Payable) which was terminated on October 22, 2025, the Company had a cash dominion arrangement with the banking institution for its accounts within the United States whereby daily cash receipts were contractually utilized to pay down outstanding balances on the ABL Revolving Credit Facility. Account balances that had not yet been applied to the ABL Revolving Credit Facility were classified as restricted cash in the applicable Consolidated Condensed Balance Sheets. The 9 Table of Contents following table provides a reconciliation of cash and restricted cash included in Consolidated Condensed Balance Sheets to the amounts included in the Consolidated Condensed Statements of Cash Flows. (In thousands) April 4, 2026 March 29, 2025 Cash and Cash Equivalents $ 11,867 $ 24,805 Restricted Cash — 1,143 Total Cash and Restricted Cash Shown in Statements of Cash Flows $ 11,867 $ 25,948 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 changes in allowances for estimated credit losses for the three months ended April 4, 2026 and March 29, 2025 consisted of the following: Three Months Ended (In thousands) April 4, 2026 March 29, 2025 Balance at Beginning of the Period $ 847 $ 2,377 Bad Debt Expense, Net of Recoveries 652 ( 128 ) Write-off Charges Against the Allowance and Other Adjustments ( 136 ) 42 Balance at End of the Period $ 1,363 $ 2,291 Cloud Computing Arrangements The Company incurs costs to implement cloud computing arrangements that are hosted by third-party vendors. Implementation costs associated with cloud computing arrangements are capitalized when incurred during the application development phase. Amortization begins when the related cloud computing solution is ready for its intended use and is calculated on a straight-line basis over the contractual term of the cloud computing arrangement. Implementation costs associated with cloud computing arrangements are reflected in Cash from Operating Activities on the Consolidated Condensed Statements of Cash Flows in accordance with ASC Topic 350-40, Intangibles - Goodwill and Other - Internal-Use Software . The Company capitalized implementation costs related to such arrangements of $ 5.0 million and $ 2.8 million as of April 4, 2026 and December 31, 2025, respectively, within other non-current assets in the Consolidated Condensed Balance Sheets. Amortization expense was insignificant for the three months ended April 4, 2026 and March 29, 2025. Valuation of Goodwill and Long-Lived Assets 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. 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 4, 2026 and March 29, 2025, 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-month periods then ended. Foreign Currency Translation The aggregate foreign currency transaction gain or loss included in operations was immaterial for the three months ended April 4, 2026 and March 29, 2025. New or Recent Accounting Pronouncements We consider the applicability and impact of all ASUs. There have been no new applicable accounting pronouncements or changes in accounting pronouncements during the three months ended April 4, 2026 as compared with the recent accounting 10 Table of Contents pronouncements described in the 2025 10-K. ASUs not disclosed 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 4, 2026, we had $ 734.3 million of remaining performance obligations, which we refer to as total backlog. We expect to recognize approximately $ 596.2 million of our outstanding performance obligations as revenue over the next twelve months and the balance thereafter. 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: (In thousands) Contract Assets Contract Liabilities Beginning Balance, January 1, 2026 $ 54,687 $ 26,962 Ending Balance, April 4, 2026 $ 65,147 $ 30,464 The increase in contract assets reflects the net impact of new revenue recognized in excess of billings exceeding billing of previously unbilled revenue during the period. For the three months ended April 4, 2026, the increase reflects a $ 2.8 million impact to revenue from a change in estimate due to updated variable consideration. The increase in contract liabilities reflects the net impact of new customer advances or deferred revenues recorded in excess of revenue recognized. The Company recognized $ 6.6 million and $ 11.6 million during the three months ended April 4, 2026 and March 29, 2025, respectively, in revenues that were included in the contract liability balance at the beginning of the period. The Company recognizes an asset for certain, material costs to fulfill a contract if it is determined that the costs relate directly to a contract or an anticipated contract that can be specifically identified, generate or enhance resources that will be used in satisfying performance obligations in the future, and are expected to be recovered. Such costs are amortized on a systematic basis that is consistent with the transfer to the customer of the goods to which the asset relates. Start-up costs are expensed as incurred. Capitalized fulfillment costs are included in Inventories in the accompanying Consolidated Condensed Balance Sheets. Should future orders not materialize or it is determined the costs are no longer probable of recovery, the capitalized costs are written off. The Company’s capitalized fulfillment costs amounted to $ 6.3 million and $ 6.0 million on April 4, 2026 and December 31, 2025, respectively. Amortization of fulfillment costs recognized within Cost of Products Sold was $ 0.1 million and $ 3.3 million for the three months ended April 4, 2026 and March 29, 2025, respectively. Beginning in the current year, the Company reorganized its product line structure to align with changes in internal reporting. Prior‑period disaggregated revenue information has been recast to conform to the current‑period presentation, including all prior years presented. There was no impact on total revenue as a result of this change. The Company’s disaggregation of revenue by market segments remains unchanged from the Company’s prior presentation. The following table presents our revenue disaggregated by Market Segments for the periods indicated: Three Months Ended (In thousands) April 4, 2026 March 29, 2025 Aerospace Segment Commercial Transport $ 156,419 $ 137,542 Military Aircraft 33,502 33,263 General Aviation 21,449 15,243 Other 2,450 5,327 Aerospace Total 213,820 191,375 Test Systems Segment Government & Defense 16,799 14,561 Test Systems Total 16,799 14,561 Total $ 230,619 $ 205,936 11 Table of Contents The following table presents our revenue disaggregated by Product Lines for the periods indicated: Three Months Ended Recast (In thousands) April 4, 2026 March 29, 2025 Aerospace Segment Inflight Entertainment & Connectivity $ 110,748 $ 103,110 Lighting & Safety 52,807 51,957 Flight Critical Electrical Power 24,763 21,314 Seat Motion 19,879 6,672 Other 5,623 8,322 Aerospace Total 213,820 191,375 Test Systems 16,799 14,561 Total $ 230,619 $ 205,936 Inflight Entertainment & Connectivity (“IFEC”) is a combination of the previous Avionics and Systems Certification product lines, as well as cabin power products which were included in the previous Electrical Power & Motion product line. The remainder of the previous Electrical Power & Motion product line is now split into two discrete product lines, Flight Critical Electrical Power and Seat Motion. Lighting and Safety remains consistent and Structures is now reported within Other Aerospace revenue. The following table presents our revenue disaggregated by Product Lines for the fiscal years ended December 31, 2025 and 2024 as follows: Recast Recast (In thousands) 2025 2024 Aerospace Segment Inflight Entertainment & Connectivity $ 434,239 $ 383,679 Lighting & Safety 216,583 188,355 Flight Critical Electrical Power 73,706 68,368 Seat Motion 47,242 35,229 Other 25,549 31,053 Aerospace Total 797,319 706,684 Test Systems 64,809 88,742 Total $ 862,128 $ 795,426 The Company’s updated disaggregation of revenue by product lines is consistent with the information used by the Chief Operating Decision Maker (“CODM”) to evaluate operating performance and allocate resources. The recast of prior‑period information does not affect the Company’s reportable segments or the measurement of segment profit or loss. 3) Inventories Inventories consisted of the following: ( In thousands ) April 4, 2026 December 31, 2025 Finished Goods $ 34,516 $ 32,838 Work in Progress 45,593 38,686 Raw Material 131,836 125,336 $ 211,945 $ 196,860 12 Table of Contents 4) Property, Plant and Equipment Property, Plant and Equipment consisted of the following: (In thousands) April 4, 2026 December 31, 2025 Land $ 8,878 $ 8,902 Buildings and Improvements 96,360 83,482 Machinery and Equipment 141,875 131,610 Construction in Progress 7,228 19,616 Total Property, Plant and Equipment, Gross 254,341 243,610 Less Accumulated Depreciation 138,860 136,532 Total Property, Plant and Equipment, Net $ 115,481 $ 107,078 5) Intangible Assets The following table summarizes acquired intangible assets as follows: April 4, 2026 December 31, 2025 (In thousands) Weighted Average Life Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Patents 11 years $ 2,146 $ 2,146 $ 2,146 $ 2,146 Non-compete Agreement 4 years 11,082 11,082 11,082 11,082 Trade Names 10 years 11,549 10,587 11,565 10,541 Completed and Unpatented Technology 9 years 47,953 45,733 47,980 45,207 Backlog 4 years 3,916 390 3,991 177 Customer Relationships 15 years 145,664 105,845 145,773 104,531 Licensing Agreement 13 years 6,760 967 6,760 260 Total Intangible Assets 13 years $ 229,070 $ 176,750 $ 229,297 $ 173,944 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 4, 2026 March 29, 2025 Amortization Expense $ 2,887 $ 2,975 Amortization expense for acquired intangible assets expected for 2026 and for each of the next five years is summarized as follows: (In thousands) 2026 $ 11,261 2027 $ 9,498 2028 $ 8,711 2029 $ 7,161 2030 $ 4,406 2031 $ 4,195 13 Table of Contents 6) Goodwill The following table summarizes the changes in the carrying amount of goodwill for the three months ended April 4, 2026: (In thousands) December 31, 2025 Acquisition Adjustments Foreign Currency Translation April 4, 2026 Aerospace $ 41,288 $ 851 $ 572 $ 42,711 Test Systems 21,635 — — 21,635 $ 62,923 $ 851 $ 572 $ 64,346 7) Long-term Debt and Notes Payable Under the terms of the Company’s former asset-based revolving credit facility (the “ABL Revolving Credit Facility”), the Company paid interest on the unpaid principal amount of the ABL Revolving Credit Facility at a rate equal to SOFR plus a term SOFR adjustment in the amount of 0.10 % per annum (which collectively shall be at least 1.00 %) plus an applicable margin ranging from 2.75 % to 3.25 % determined based upon the Company’s Excess Availability (as defined in the ABL Revolving Credit Facility). The Company was required to pay a quarterly commitment fee under the ABL Revolving Credit Facility on undrawn revolving credit commitments in an amount equal to 0.25 % or 0.375 % based on the Company’s average excess availability under the ABL Revolving Credit Facility. The maturity date of borrowings under the ABL Revolving Credit Facility was July 11, 2027. On October 22, 2025, the Company entered into a $ 300.0 million senior secured, cash flow-based revolving credit facility (the “Revolving Credit Facility”). The Revolving Credit Facility replaced the Company’s ABL Revolving Credit Facility, which was terminated on October 22, 2025. The scheduled maturity date for the Revolving Credit Facility is October 16, 2030. Under the terms of the Revolving Credit Facility, the Company pays interest on the unpaid principal amount outstanding under the Revolving Credit Facility at a rate equal to Term SOFR (as defined in the Revolving Credit Facility) plus an applicable margin ranging from 1.25 % to 2.125 % determined based upon the Company’s Total Net Debt Leverage Ratio (as defined in the Revolving Credit Facility). The Company pays a quarterly commitment fee under the Revolving Credit Facility on unused Revolving Commitments ranging from 0.20 % to 0.35 % determined based upon the Company’s Total Net Debt Leverage Ratio. Pursuant to the Revolving Credit Facility, the Company is subject to a total leverage ratio covenant that requires that the Company’s Total Net Debt Leverage Ratio may not exceed 4.50 to 1.00. The Company is also subject to a consolidated interest coverage ratio covenant that requires that the Company’s Consolidated Interest Coverage Ratio (as defined in the Revolving Credit Facility) may not be less than 3.50 to 1.00 and a secured net debt leverage ratio covenant that requires that the Company’s Secured Net Debt Leverage Ratio (as defined in the Revolving Credit Facility) may not exceed 3.00 to 1.00. As of April 4, 2026, the Company was in compliance with these covenants. There was $ 85.0 million outstanding on the Revolving Credit Facility and there remained $ 212.8 million available for future borrowings, net of outstanding letters of credit on both April 4, 2026 and December 31, 2025. The Revolving Credit Facility has an accordion feature, which allows the Company to request incremental commitments of up to $ 100.0 million plus additional incremental amounts so long as maximum leverage requirements are met. Debt issuance cost amortization expense was $ 0.6 million and $ 0.6 million for the three months ended April 4, 2026 and March 29, 2025, respectively. All costs are amortized to interest expense over the term of the respective agreement. Unamortized deferred debt issuance costs associated with the Revolving Credit Facility ($ 2.9 million and $ 3.0 million as of April 4, 2026 and December 31, 2025, respectively) are recorded within Other Assets. Interest expense was $ 2.3 million and $ 3.2 million for the three months ended April 4, 2026 and March 29, 2025, respectively. 2030 Convertible Notes On December 3, 2024, the Company issued $ 165.0 million aggregate principal amount of 5.500 % Convertible Senior Notes due 2030 (the “2030 Convertible Notes”). The 2030 Convertible Notes bear interest at a rate of 5.500 % per annum, payable semi-annually in arrears on March 15 and September 15 of each year, beginning on March 15, 2025. The 2030 Convertible Notes will mature on March 15, 2030, unless earlier converted, redeemed or repurchased. The initial conversion rate is 43.6814 shares of common stock per $1,000 principal amount of 2030 Convertible Notes, which represent the initial conversion price of $ 22.89 per share. The 2030 Convertible Notes are convertible at the option of the holders at any time on or after December 15, 2029, until the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, the Company will satisfy its conversion obligations by paying and/or delivering, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at its election. Beginning March 20, 2028, if the Company’s stock price has been at least 130 % of the conversion price for a specified period of time, the 2030 Convertible Notes may be 14 Table of Contents called at the option of the issuer. Under the same conditions, the Company can elect to redeem the 2030 Convertible Notes for cash. After the first quarter of 2025, if the Company’s stock price has been at least 130 % of the conversion price for 20 of 30 trading days ending on and including the last trading day of the immediately preceding quarter, the 2030 Convertible Notes may be called at the option of the holder. During the fiscal quarter ended April 4, 2026, our stock price met the price trigger defined above, and therefore, holders of our 2030 Convertible Notes have the ability to convert their notes at their option at any time during the fiscal quarter ended July 4, 2026. 2031 Convertible Notes On September 15, 2025, the Company issued $ 225.0 million aggregate principal amount of Convertible Senior Notes due 2031 (the “2031 Convertible Notes”) for net proceeds of $ 216.7 million. The Company used part of the net proceeds to repurchase a portion of the 2030 Convertible Notes and the remainder to enter into the capped call transactions, as further described below. The 2031 Convertible Notes do not bear any interest and will mature on January 15, 2031, unless earlier converted, redeemed or repurchased. The initial conversion rate is 18.2243 shares of common stock per $1,000 principal amount of 2031 Convertible Notes, which represents the initial conversion price of $ 54.87 per share. The 2031 Convertible Notes are convertible at the option of the holders at any time on or after October 15, 2030, until the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, the Company will satisfy its conversion obligations by paying cash up to the aggregate principal amount of the 2031 Convertible Notes to be converted and paying and/or delivering, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at its election, in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of the Notes being converted. Beginning January 22, 2029, if the Company’s stock price has been at least 130 % of the conversion price for a specified period of time, the 2031 Convertible Notes may be called at the option of the issuer. After the fourth quarter of 2025, if the Company’s stock price has been at least 130 % of the conversion price for 5 of the first 20 trading days of such fiscal quarter, the 2031 Convertible Notes may be redeemed at the option of the holder during the 30 -trading day period beginning on, and including, the 21st trading day of such quarter. During the fiscal quarter ended April 4, 2026, our stock price met the price trigger defined above, and holders of our 2031 Convertible Notes had the ability to convert their notes at their option during the 30 -trading day period beginning on, and including, the 21st trading day of the quarter. No notes were converted. Partial Repurchase of 2030 Convertible Notes The Company used approximately $ 189.8 million of the net proceeds from the issuance of the 2031 Convertible Notes, together with approximately $ 85.0 million of borrowings under its ABL Revolving Credit Facility and approximately $ 11.0 million of cash on hand, to repurchase approximately $ 132.0 million in aggregate principal amount of outstanding 2030 Convertible Notes pursuant to privately negotiated exchange agreements entered into with certain holders of the 2030 Convertible Notes. The total cash paid in connection with this repurchase was approximately $ 285.8 million. The following table presents the outstanding principal amount and carrying value of the Convertible Notes as of the dates indicated: April 4, 2026 December 31, 2025 (In thousands) Principal Unamortized Debt Issuance Costs Carrying Value Principal Unamortized Debt Issuance Costs Carrying Value 2030 Convertible Notes $ 33,000 $ ( 963 ) $ 32,037 $ 33,000 $ ( 1,023 ) $ 31,977 2031 Convertible Notes 225,000 ( 7,152 ) 217,848 225,000 ( 7,526 ) 217,474 Total $ 258,000 $ ( 8,115 ) $ 249,885 $ 258,000 $ ( 8,549 ) $ 249,451 The Company estimates the fair value of the convertible notes based on quoted prices for these instruments in active markets, classified as Level 1 measurements within the fair value hierarchy. The fair value of the 2031 Convertible Notes was approximately $ 323.4 million and $ 264.1 million as of April 4, 2026 and December 31, 2025, respectively. The fair value of the 2030 Convertible Notes was approximately $ 105.8 million and $ 84.8 million as of April 4, 2026 and December 31, 2025, respectively. Capped Call Transactions In connection with the issuance of the 2031 Convertible Notes, we entered into capped call transactions (the “Capped Calls”) with certain financial institutions. The Capped Calls are generally expected to reduce the potential dilution to the Company’s common stock upon any conversion of the 2031 Convertible Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of converted 2031 Convertible Notes, as the case may be, with such reduction and/or offset subject to a cap. The cap price of the Capped Calls is initially approximately $ 83.41 per share of the 15 Table of Contents Company’s common stock and is subject to certain adjustments under the terms of the capped call transactions. The Capped Calls expire January 15, 2031. We used approximately $ 26.9 million of the net proceeds from the 2031 Convertible Notes to purchase the Capped Calls. These instruments are classified as equity and recorded within additional paid-in capital in the Consolidated Condensed Statements of Changes in Stockholders’ Equity. 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. Activity in the warranty accrual, which is included in Accrued Expenses and Other Current Liabilities on the Consolidated Condensed Balance Sheets, is summarized as follows: Three Months Ended (In thousands) April 4, 2026 March 29, 2025 Balance at Beginning of Period $ 20,740 $ 18,081 Warranties Issued 949 907 Warranties Settled ( 1,809 ) ( 1,320 ) Change in Warranty Estimate ( 355 ) ( 57 ) Balance at End of Period $ 19,525 $ 17,611 9) Income Taxes The effective tax rates were approximately ( 3.0 )% and 6.3 % for the three months ended April 4, 2026 and March 29, 2025, respectively. Beginning with the 2025 tax year, U.S. domestic research and development costs can be expensed as incurred. In addition, there are options to expense any remaining unamortized research and development costs that were previously capitalized during the 2022 through 2024 tax years. The tax rate in the 2026 period was favorably impacted by the reversal of valuation allowances related to net operating losses expected to be utilized in the 2026 period and previously capitalized research and development costs that are expected to be expensed in the 2026 period, partially offset by certain timing differences. In addition, the tax rate in the 2026 period was impacted by state and foreign income taxes and a discrete adjustment to recognize a benefit from deductible stock-based compensation expense. 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 weighs 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. After considering the losses in recent periods and cumulative pre-tax losses in the three-year period ending with the current year, the Company determined that projections of future taxable income could not be relied upon as a source of income to realize its deferred tax assets. However, the Company is relying on a significant portion of its existing deferred tax liabilities for the realizability of deferred tax assets. Accordingly, during the years ended December 31, 2025 and 2024, the Company determined that a portion of its deferred tax assets were 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 4, 2026. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law in the United States. The OBBBA permanently extends and modifies significant provisions enacted in 2017 as part of the Tax Cuts and Jobs Act (“TCJA”) that were originally set to expire at the end of 2025. In addition, the OBBBA makes changes to certain U.S. corporate tax provisions, many of which were not in effect until 2026. Key provisions of the Tax Act relevant to the Company’s operations include immediate expensing of certain domestic research and development expenses and domestic capital expenditures beginning in 2025 as well as changes to various U.S. international tax provisions beginning in 2026. These provisions of the Tax Act have favorably impacted the Company’s effective tax rate and cash tax rate for the 2025 and 2026 tax years and are expected to have favorable impacts in future years. Changes in tax laws may affect recorded deferred tax assets and deferred tax liabilities and our effective tax rate in the future and the Company is continuing to evaluate the impacts of the new legislation. 16 Table of Contents 10) Earnings Per Share The following table sets forth the computation of basic earnings per share: Three months ended (In thousands, except per share amounts) April 4, 2026 March 29, 2025 Basic Earnings per Common Share: Net Income - Basic $ 25,540 $ 9,528 Weighted Average Shares - Basic 35,736 35,285 Basic Earnings per Common Share $ 0.71 $ 0.27 The following table sets forth the computation of diluted net income (loss) per share: Three months ended (In thousands, except per share amounts) April 4, 2026 March 29, 2025 Diluted Earnings per Common Share: Net Income - Basic $ 25,540 $ 9,528 Convertible Notes Interest Expense, Net of Tax — 1,792 Net Income - Diluted $ 25,540 $ 11,320 Weighted Average Shares - Basic 35,736 35,285 Net Effect of Dilutive Stock Awards 1,495 464 Net Effect of Dilutive Convertible Notes 992 7,208 Weighted Average Shares - Diluted 38,223 42,957 Diluted Earnings per Common Share $ 0.67 $ 0.26 The Company includes the dilutive effect of shares issuable upon conversion of its Convertible Notes in the calculation of diluted income per share using the if-converted method. The Company has the option for the 2030 Convertible Notes to settle the conversion value in any combination of cash or shares, and as such, the maximum number of shares issuable are included in the dilutive share count if the effect would be dilutive. The Company excluded all impacts of the 2030 Convertible Notes from the computation of diluted earnings per share at April 4, 2026 as the effect would be anti-dilutive. The Company will settle the principal amount of the 2031 Convertible Notes by paying cash and settle the premium in any combination of cash or shares. The Company’s average stock price during the period outstanding was above the conversion price for the 2031 Convertible Notes, therefore incremental shares were included in diluted earnings per share at April 4, 2026. 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. Antidilutive shares excluded from diluted earnings per share computations as of the date indicated were as follows: (In thousands) April 4, 2026 March 29, 2025 Stock Options and Unvested RSUs — 471 2030 Convertible Notes 1,442 — Total Antidilutive Securities 1,442 471 11) Shareholders’ Equity Share Buyback Program 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. The Company has the capacity under the currently authorized program to repurchase additional shares of its common stock with a maximum dollar value of $ 41.5 million. 17 Table of Contents At-the-Market Equity Offering On August 8, 2023, the Company initiated an at-the-market equity offering program (the “ATM Program”) for the sale from time to time of shares of the Company’s common stock, par value $ 0.01 per share, having an aggregate offering price of up to $ 30.0 million. During the three months ended April 4, 2026 and March 29, 2025, the Company did not sell any shares of our common stock under the ATM Program. As of April 4, 2026, the Company had remaining capacity under the ATM Program to sell shares of common stock having an aggregate offering price up to approximately $ 8.2 million. Comprehensive (Loss) Income and Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss are as follows: (In thousands) April 4, 2026 December 31, 2025 Foreign Currency Translation Adjustments $ ( 6,307 ) $ ( 5,152 ) Retirement Liability Adjustment – Before Tax ( 1,413 ) ( 1,540 ) Tax Benefit of Retirement Liability Adjustment 2,282 2,282 Retirement Liability Adjustment – After Tax 869 742 Accumulated Other Comprehensive Loss $ ( 5,438 ) $ ( 4,410 ) The components of other comprehensive (loss) income are as follows: Three Months Ended (In thousands) April 4, 2026 March 29, 2025 Foreign Currency Translation Adjustments $ ( 1,155 ) $ 752 Retirement Liability Adjustments: Reclassifications to Selling, General and Administrative Expenses: Amortization of Prior Service Cost 97 96 Amortization of Net Actuarial (Gains) Losses 30 ( 332 ) Retirement Liability Adjustment 127 ( 236 ) Other Comprehensive (Loss) Income $ ( 1,028 ) $ 516 12) Sales to Major Customers The loss of major customers or a significant reduction in business with a major customer would significantly, and negatively impact our sales and earnings. In the three months ended April 4, 2026, the Company had one major customer over 10% of consolidated sales primarily in the Aerospace segment. Sales to The Boeing Company (“Boeing”) accounted for 10.1 % of consolidated sales in the three months ended April 4, 2026. Accounts receivable from Boeing on April 4, 2026 were approximately $ 19.8 million. In the three months ended March 29, 2025, the Company had one major customer over 10% of consolidated sales primarily in the Aerospace segment. Sales to the Safran Group (“Safran”) accounted for 10.3 % of consolidated sales in the three months ended March 29, 2025. 13) Legal Proceedings and Other Matters Legal Proceedings One of the Company’s subsidiaries is involved in numerous patent infringement actions brought by Lufthansa Technik AG (“Lufthansa”) in Germany, the United Kingdom (“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 and Other Matters, to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, in the 2025 10-K. As previously disclosed, Lufthansa and AES have filed requests with the German Federal Supreme Court to be granted leave to file appeals against the decision in both the direct and indirect matter. On February 25, 2026, the German Federal Supreme Court rejected Lufthansa’s and AES’s petitions for leave to appeal in both matters. Therefore, the decisions of the Higher Regional Court of Karlsruhe have become final. The reserve for the German indirect claim and interest was approximately $ 17.7 million at April 4, 2026 and $ 17.6 million on December 31, 2025. The Company currently believes it is unlikely that the damages in the German indirect proceedings and related interest will be paid within the next twelve months. Therefore, the liability related to this matter is classified within Other Liabilities (non-current) in the Consolidated Condensed Balance Sheets at April 4, 2026 and December 31, 2025. 18 Table of Contents In the matter before the UK High Court of Justice, Lufthansa had pleaded its case for monetary compensation at a separate trial which was conducted in October 2024. Both the Company and Lufthansa submitted to the UK High Court of Justice calculations of the estimated profits derived from the reports of the parties’ respective financial experts. The account of profits trial judgment was published on February 21, 2025 by the court in the amount of $ 11.9 million. Such amount was recorded as a liability in the Company’s Consolidated Financial Statements as of December 31, 2024. Following a consequential hearing on March 20, 2025, the amount was adjusted upwards by $ 0.5 million related to the resolution of a provisional item. Additionally, on April 30, 2025, the UK High Court of Justice issued a draft order related to interest associated with damages, which obligated the Company to accrue a reserve estimate of $ 5.7 million relating to such interest associated with the damages. Both of these amounts were recorded in the three months ended March 29, 2025 within Selling, General and Administrative Expenses in the Company’s Consolidated Condensed Statement of Operations. There was a further consequential hearing on May 16, 2025 which addressed applications concerning interest on the ordered damages, permission to appeal the court’s findings in these matters, as well as the issue of reimbursement of legal fees in the damages phase of the litigation. The Company was ordered to make payments of $ 5.7 million in relation to the previously accrued interest and $ 3.5 million for partial reimbursement of Lufthansa’s legal costs. The interest amount was recorded in the first quarter of 2025, while the legal cost reimbursement was recorded in the second quarter. Both the Company and Lufthansa have been granted permission to appeal the rulings by the UK High Court of Justice. The appeals are scheduled to be heard by the UK Court of Appeal in July 2026. A liability for reimbursement of Lufthansa’s legal expenses associated with the UK matter, exclusive of the damages phase, was approximately $ 1.0 million at April 4, 2026 and December 31, 2025, which 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 Sheets as of April 4, 2026 and December 31, 2025. With respect to the proceeding in France, the Court of Appeal of Paris is set to hear the appeal on nullity on October 28, 2026. Should the Court find the patent to be valid, the trial date for the infringement and damages is scheduled for December 2027. As loss exposure is not probable and estimable at this time, the Company has not recorded any liability with respect to the French matter at April 4, 2026 or December 31, 2025. Each of the German, France and UK claims are separate and distinct. Validity and infringement of the Lufthansa patent in each country is a matter for the courts in each of these countries, whose laws differ from each other. In addition, the principles of calculating damages in each jurisdiction differ substantially. Therefore, the Company has assessed each matter separately and cannot apply the same calculation methodology as in the German direct and indirect matters. However, it is reasonably possible that additional damages and interest could be incurred if the appellate court in France was to rule in favor of Lufthansa, or if damages in the UK matter upon conclusion of the appeal are calculated on a different basis than the initial judgment. There were no other significant developments in any of these matters during the three months ended April 4, 2026. 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. Other Matters On February 20, 2026, the U.S. Supreme Court struck down certain tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). Following the Supreme Court decision, the U.S. Administration announced a new 10% global tariff under Section 122 of the Trade Act of 1974, which was subsequently struck down on May 7, 2026 by the U.S. Court of International Trade. As of the filing date, it remains uncertain what impact these decisions will have on our future financial results, including the process and availability of obtaining refunds of amounts previously paid for the IEEPA tariffs or any fluctuations of the level of replacement tariffs imposed or the addition of any new tariffs through other means. 14) Segment Information The Company reports segment information based on the management approach, which designates the internal reporting used by the 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 profit (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. 19 Table of Contents Segment information and reconciliations to consolidated amounts are as follows: Three Months Ended (In thousands) April 4, 2026 March 29, 2025 Sales: Aerospace $ 213,843 $ 191,388 Less Inter-segment Sales ( 23 ) ( 13 ) Total Aerospace Sales 213,820 191,375 Test Systems 16,824 14,592 Less Inter-segment Sales ( 25 ) ( 31 ) Total Test Systems Sales 16,799 14,561 Total Consolidated Sales 230,619 205,936 Less 1 Cost of Products Sold: Aerospace 143,127 132,892 66.9 % 69.4 % Test Systems 12,359 12,195 73.6 % 83.8 % Other Segment Items 2 Aerospace 35,361 36,219 Test Systems 4,037 4,589 Operating Profit and Margins: Aerospace 35,332 22,264 16.5 % 11.6 % Test Systems 403 ( 2,223 ) 2.4 % ( 15.3 ) % Total Operating Profit 35,735 20,041 15.5 % 9.7 % Deductions from Segment Measure of Operating Profit: Interest Expense, Net of Interest Income 2,336 3,150 Corporate Expenses and Other 8,614 6,717 Income Before Income Taxes $ 24,785 $ 10,174 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. (In thousands) April 4, 2026 December 31, 2025 Total Assets: Aerospace $ 604,480 $ 570,294 Test Systems 120,115 119,603 Corporate 22,548 16,781 Total Assets $ 747,143 $ 706,678 20 Table of Contents Three Months Ended (In thousands) April 4, 2026 March 29, 2025 Depreciation and Amortization: Aerospace $ 5,379 $ 4,498 Test Systems 505 1,078 Corporate 10 12 Total Depreciation and Amortization $ 5,894 $ 5,588 Capital Expenditures: Aerospace $ 10,731 $ 2,082 Test Systems 429 23 Total Capital Expenditures $ 11,160 $ 2,105 15) Fair Value There were no financial assets or liabilities carried at fair value measured on a recurring basis on April 4, 2026 or December 31, 2025. There were no non-recurring fair value measurements performed in the three months ended April 4, 2026 and March 29, 2025. Due to their short-term nature, the carrying value of cash and equivalents, accounts receivable, and accounts 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. Refer to Note 7, Long-term Debt and Notes Payable, for additional information relating to the fair value of the Company’s outstanding fixed-rate Convertible Notes. 16) Acquisitions Envoy Aerospace, LLC On June 30, 2025, the Company purchased the membership interests of Envoy Aerospace, LLC (“Envoy Aerospace”), located in Aurora, Illinois. Envoy Aerospace is an FAA Organization Designation Authorization (“ODA”) services provider. Envoy Aerospace is included in our Aerospace segment. The total purchase price was approximately $ 8.3 million, net of cash acquired and the estimated closing adjustment. Of the purchase price, $ 4.5 million was paid at the closing date. Payments of $ 2.0 million and $ 1.8 million will become payable by the Company following the first and second anniversary of the closing date, respectively, based on the achievement of certain milestones. The Company has finalized the purchase price allocation. Purchased intangible assets and goodwill are expected to be deductible for tax purposes over 15 years. This transaction was not considered material to the Company’s financial position or results of operations. Bühler Motor Aviation On October 13, 2025, the Company acquired all of the issued and outstanding capital stock of Bühler Motor Aviation (“BMA”), located in Uhldingen-Mühlhofen, Germany. BMA is an established manufacturer of aircraft seat actuation systems with a broad product portfolio that includes actuators, electronics, control panels, pneumatic systems, and lighting. BMA is included in our Aerospace segment. The total purchase price was approximately $ 18.0 million, net of cash acquired and the estimated closing adjustment. The purchase price was paid at the closing date. The Company has not yet finalized the purchase price allocation. 21 Table of Contents