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The extra shares will not increase the value of an Astronics shareholder's investment in the company because the move will reduce the price of each share of stock by 25 percent. But by putting more shares of stock in the hands of investors, Astronics executives said Wednesday that they hope to drum up interest in the stock by making it easier for investors to buy and sell the shares.
The distribution "is designed to reward our current stockholders, encourage long-term ownership and interest in Astronics and increase the total number of shares outstanding," said Peter J. Gundermann, the company's president and chief executive officer.
The extra shares, which will be distributed to investors in the form of a 25 percent stock dividend, will increase the number of shares in circulation to about 10.2 million shares from the current 8.2 million.
Astronics shares, which fell $1.57 to $19.54 on Wednesday, have tumbled by 51 percent this year as the company's profits have been squeezed by rising engineering and development expenses.
Under the distribution, shareholders will receive an additional share of Class B stock for every four shares of common stock that they own. The company's top executives and directors own 52 percent of Astronics' Class B stock, which has stronger voting rights than the company's common stock.
Shareholders of Class B stock also will receive one new Class B share for every four shares they own. Each Class B share has 10 votes, while each share of common stock has one vote. The additional shares will be distributed on Oct. 17 to shareholders of record on Oct. 6.
drobinson@buffnews.com
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