Astronics Corporation (NASDAQ:ATRO) Q4 2022 Earnings Call Transcript

So €“ and we think that that initial order is just the beginning. This is going to be a standard for the U.S. Army. They have a lot of radios and a lot of units and families that we will €“ that our product will be testing. We think that could be a decade. So more on that as it develops FLRAA, I’ve used this analogy to describe the importance of this program for us.

. : And again, we have a little bit of a gag order, but I’ve used this analogy I said, imagine a wide body airplane where we put absolutely everything that we might possibly put on that airplane. That’s in our toolkit. And this is a little different than Mike €“ how I answered Michael’s question earlier, because this is a theoretical airplane that’s never really existed, but if it comes down to production line and we put power on it, we put a full suite of IFE equipment on it, we put an antenna on the roof, we put a radio and then we put a full cockpit lighting suite, a full exterior lighting suite, a full interior lighting suite in terms of passenger service units, et cetera, et cetera. You €“ and you add all that up, you probably get to somewhere in the neighborhood of a $700,000, $750,000 airplane.

And while we aren’t under contract and there’s movement in the ship set and things that are going to change, we expect that our FLRAA content will be well north of that. So €“ and then you ask, well, how many aircraft are they going to build? And that’s a whole another kind of guessing game at this point. It’s a replacement for the Blackhawk. There are 4,000 Blackhawks out there. Nobody expects a one for one replacement, but what do you expect? A little bit of a guessing game, but even if you guess conservatively for a company like us, it’s a real significant over time game changer of a program.

Jon Tanwanteng: Got it. No, that helps put it in perspective. Thank you, Pete. I assume that doesn’t go into production until much later, though, in this decade, right? So the initial development revenue is what we’re thinking about, which would be

Pete Gundermann: I think I’m older than you are, Jon, but we buy both route be retired before we know how far this program’s going to go and hit real volumes. But if it’s anything like €“ well, the Blackhawk’s been in production now for 50 years?

Jon Tanwanteng: Right. No, that €“ it could be check. Yes. Okay, great. Last question for me just on the labor issue, let’s assume your supply chain cooperates and you get all these wide body orders that you have to facilitate. Can you reach that 180 run rate with the workforce that you have now? Or is it going to take more work just to get those people in the door and supplying that?

Pete Gundermann: Yes, for the most part, I would €“ I guess, my feeling is that labor is certainly not our biggest problem. Supply chain has been our biggest problem. Your question is insightful, if all of a sudden the supply chain snapped to attention and the trucks pulled up full of parts. Then yes, we would be short labor to turn those that quickly. But for the most part, in most places of our business, the labor side of it is a little bit better than what it was say 1.5 years ago at the height of COVID. Nobody wanted to come out of their houses to work. That’s changing a little bit. We certainly have parts of our business that are struggling for labor, but for the most part, kind of across the board. I think that we have a general feeling that we’re okay and that we can adjust our headcount and our capacity to the scheduling of the major programs as they happen. Dave, I don’t know if you’d answer that in any different way.

Dave Burney: No.