Shares of AstroNova, Inc. (ALOT) have gained 11.3% since the company reported its earnings for the quarter ended Oct. 31, 2025. This compares to the S&P 500 index’s 0.3% decline over the same time frame. Over the past month, the stock has declined 5.6% compared with the S&P 500’s 2.8% growth.AstroNova reported a fiscal third-quarter 2026 adjusted net income of 20 cents per share, which increased more than threefold from the prior-year quarter’s figure. Revenues of $39.2 million indicated a decline of 3.1% f ...

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Revenue Performance - Revenue for the third quarter of fiscal 2026 was $39.2 million, a 3.1% decrease compared to $40.4 million in the prior year[139]. - Domestic revenue for the third quarter was $24.1 million, reflecting a 2.4% increase from $23.5 million in the prior year, while international revenue decreased by 10.7% to $15.1 million[139]. - Revenue for the first nine months of fiscal 2026 was $113.0 million, a 0.8% decrease from $113.9 million in the prior year[148]. - Hardware revenue for the first nine months increased by 6.4% to $34.9 million, driven by a 15.3% increase in the Product ID segment[149]. - Supplies revenue for the first nine months decreased by 1.2% to $61.1 million, with declines in both Product ID and Aerospace segments[150]. - Revenue from the Product ID segment increased by $1.2 million or 1.6% to $77.9 million in the first nine months of the current year compared to $76.7 million in the prior year[160]. - Aerospace segment revenue for the first nine months was $35.1 million, a decrease from $37.3 million in the prior year[156]. Profitability - Gross profit for the third quarter was $14.2 million, a 3.5% increase from $13.7 million in the prior year, with a gross profit margin of 36.2%[143]. - Gross profit for the first nine months was $38.5 million, a 3.8% decrease from $40.0 million in the prior year, with a gross profit margin of 34.1%[152]. - The Product ID segment recognized an operating income of $6.6 million, reflecting a profit margin of 8.5%, down from $7.2 million and a margin of 9.4% in the prior year[160]. - Aerospace segment operating profit increased to $9.7 million from $8.8 million[156]. - Net income for the third quarter was $0.4 million, or $(0.05) per diluted share, impacted by restructuring and legal fees totaling $0.7 million[147]. - The company reported a net loss of $1.2 million, or $0.16 per diluted share, for the first nine months of the current year, impacted by various non-recurring costs related to the MTEX acquisition[155]. Operating Expenses - Operating expenses for the current quarter were $12.9 million, a 3.7% increase from $12.5 million in the prior year, including $0.3 million in goodwill impairment charges[144]. - Operating expenses for the first nine months of the current fiscal year were $37.3 million, a 2.7% increase from $36.3 million in the prior year[153]. - Selling and marketing expenses decreased by 11.8% to $16.9 million compared to $19.1 million in the previous year, with a 14.7% decrease when excluding certain non-recurring costs[153]. - G&A expenses increased by 22.7% to $15.1 million from $12.3 million in the prior year, primarily due to increased employee benefits and insurance expenses[153]. - R&D spending was $5.0 million, a 3.3% increase from $4.9 million in the prior year, representing 4.4% of revenue compared to 4.3% in the previous year[153]. Cash Flow and Financial Position - Net cash provided by operating activities was $8.1 million for the first nine months of fiscal 2026, compared to $2.3 million for the same period in the previous year[181]. - Cash position at October 31, 2025 was $3.6 million, down from $5.1 million at year end, primarily due to cash outflows of $8.6 million for long-term debt and capital expenditures[183]. - The remaining balance for the MTEX Term Loan was EUR 1.4 million ($1.6 million) as of October 31, 2025[178]. - Accounts receivable balance decreased to $20.4 million at the end of Q3 FY 2026 from $21.2 million at year end[182]. - Inventory balance decreased to $45.1 million at the end of Q3 FY 2026 from $47.9 million at year end, reflecting a strategic decision to reduce advance purchasing[182]. - Cash outflows included $1.0 million for guaranteed royalty obligations and $0.2 million for capital expenditures[183]. Taxation - The effective tax rate for the first nine months was 28.9%, influenced by various tax expenses and benefits, compared to an effective tax rate of (14.3)% in the prior year[154]. Foreign Currency Exposure - Foreign currency translation exposure primarily relates to subsidiaries with functional currencies in Danish Kroner and Euro[191]. - A hypothetical 10% change in foreign currency rates would result in a net income impact of less than $0.5 million for Q3 FY 2026[191]. - Foreign exchange losses from transactional exposure were less than $0.1 million for the nine months ended October 31, 2025[192]. Acquisition and Integration - The integration of MTEX has been more resource-intensive than anticipated, with ongoing investigations into potential breaches of representations and warranties from the acquisition[157].

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Core Viewpoint - AstroNova is engaging with investors to discuss its recent earnings release and performance outlook [2][3]. Group 1: Company Overview - The conference call is led by Deborah Pawlowski, with participation from the CEO Jorik Ittmann and CFO Tom DeByle [3]. - The earnings release and accompanying slides are available on the company's Investor Relations website [3]. Group 2: Financial Performance - Management will discuss forward-looking statements regarding the company's plans and expectations, which are subject to various risks and uncertainties [4]. - Non-GAAP financial measures will be referenced to provide additional insights into the company's performance [5].

Financial Data and Key Metrics Changes - Gross profit for Q3 was $14.2 million, up 3.5% year-over-year, with gross margin expanding by 240 basis points despite lower revenue [7] - Year-to-date gross profit was $38.5 million, or 34.1% of sales, reflecting a $1.5 million decline from the previous year due to an unfavorable product mix [7] - Net income was $0.4 million, or $0.05 per share, indicating improved financial performance [9] - Adjusted EBITDA was $4.2 million, up 29% from the prior year, with an adjusted EBITDA margin of 10.7% for Q3 [9] Business Line Data and Key Metrics Changes - Product ID segment saw revenue growth in Q3, with mill and sheet flat pack printer sales up 14% due to productivity improvements [4] - Sales of legacy desktop label printers increased nearly 5% year-over-year and 6% sequentially [5] - Aerospace operating income for the quarter was $4.5 million, up 39% from last year, driven by cost reductions and a shift towards ToughWriter systems [8] Market Data and Key Metrics Changes - Orders totaled $35.9 million in Q3, down $1.7 million year-over-year, with a decline in Product ID orders due to delays in renewing blanket orders [12] - Aerospace orders increased by 24% year-over-year, benefiting from improving production schedules at major OEMs [6] Company Strategy and Development Direction - The company is focused on improving customer engagement, operational performance, and building a culture of accountability [4] - Ongoing transition to autonomous ink printhead platform aims to enhance supply chain flexibility [15] - The company is investing in growth by adding new sales talent and employing digital marketing outreach campaigns [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to improve performance and deliver a stronger AstroNova, reiterating guidance for full-year revenue of $149 million to $154 million [16] - The upcoming expiration of a major royalty agreement in September 2026 is expected to provide a $2.2 million annualized margin tailwind [8] Other Important Information - Cash provided from operations in Q3 was $3.4 million, attributed to strong cash earnings and reduced working capital requirements [9] - The company refinanced its credit facility, extending maturity to 2028 and consolidating foreign debt into U.S. dollars, which provides greater flexibility [10] Q&A Session Summary - There were no questions during the Q&A session, and management concluded the call without further inquiries [17][18]

Financial Data and Key Metrics Changes - Gross profit for Q3 was $14.2 million, up 3.5% year-over-year, with gross margin expanding 240 basis points on lower revenue [9] - Year-to-date fiscal 2026 gross profit was $38.5 million, or 34.1% of sales, reflecting a $1.5 million decline from the same period last year due to a less favorable product mix [9] - Net income was $0.4 million, or $0.05 per share, indicating improved financial performance this quarter [11] - Adjusted EBITDA was $4.2 million, up 29% from the prior year, with an adjusted EBITDA margin of 10.7% for Q3 [11] Business Line Data and Key Metrics Changes - Product ID segment saw year-over-year revenue growth in Q3, with sales up 14% in the mill and sheet flat pack printer business [5] - Aerospace operating income for the quarter was $4.5 million, up 39% from last year, driven by cost reductions and a shift towards ToughWriter systems [10] - Orders for Product ID were impacted by delays in renewing blanket orders, while Aerospace experienced strong order activity from major OEMs [14] Market Data and Key Metrics Changes - Orders totaled $35.9 million in Q3, down $1.7 million from the prior year, with a decline in Product ID backlog not fully offset by growth in Aerospace backlog [14][15] - Aerospace remains a stable and profitable business, with orders increasing 24% year-over-year and expectations for continued demand [7] Company Strategy and Development Direction - The company is focused on improving customer engagement, operational performance, and building a culture of accountability [5] - Ongoing transition to autonomous ink printhead platform aims to enhance supply chain flexibility [18] - The company is investing in growth by adding new sales talent and employing active digital marketing outreach campaigns [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to improve performance and deliver a stronger, more resilient AstroNova [18] - The company reiterated guidance for full-year fiscal 2026 revenue of $149 million to $154 million, with an expected adjusted EBITDA margin of 7.5% to 8.5% [18] Other Important Information - The company refinanced its credit facility, extending maturity to 2028 and consolidating foreign debt into U.S. dollars, which provides greater flexibility [12] - Cash provided from operations in Q3 was $3.4 million, attributed to strong cash earnings and reduced working capital requirements [11] Q&A Session Summary - There were no questions during the Q&A session, and management concluded the call without further inquiries [19][20]

Financial Performance - Consolidated recurring revenue is at 68%[13] - Q3 FY26 revenue for Product ID increased by 8.5% Q/Q[11] - Q3 FY26 revenue for Aerospace increased by 8.6% Q/Q[12] - Adjusted Gross Profit Margin for Q3 2026 is 37.2%, compared to 34.0% in Q3 2025[20] - Adjusted EBITDA Margin for Q3 2026 is 10.7%, compared to 8.0% in Q3 2025[33] - Net cash provided by operating activities for the nine months ended October 31, 2025, was $8.1 million[35] Segment Performance - Aerospace segment operating income margin increased to 36.8% in Q3 FY26 from 23.0% in Q3 FY25[27] - Product ID segment adjusted operating income margin increased to 10.6% in Q3 FY26 from 7.2% in Q3 FY25[25] Orders and Backlog - Product ID orders decreased by $4.3 million Y/Y due to delays in renewing blanket orders[38] - Aerospace orders increased 24% Y/Y due to improved OEM demand[38]

Revenue and Income - Revenue for the third quarter of fiscal 2026 was $39.2 million, reflecting an 8.5% sequential growth compared to the previous quarter[4] - Net income was $0.4 million, or $0.05 per diluted share, while non-GAAP net income was $1.5 million, or $0.20 per diluted share[4] - Adjusted EBITDA for the quarter was $4.2 million, representing 10.7% of sales, an increase from the previous quarter[4] - Revenue for the three months ended October 31, 2025, was $39,169,000, a decrease of 3.1% compared to $40,422,000 for the same period in 2024[32] - Net income for the three months ended October 31, 2025, was $378,000, representing a significant increase of 57.3% compared to $240,000 in the same period last year[32] - The company reported a total revenue of $112,979,000 for the nine months ended October 31, 2025, slightly down from $113,922,000 for the same period in 2024[38] Segment Performance - Product Identification (Product ID) segment revenue was $26.8 million, up 2.0% year-over-year and 8.5% sequentially[11] - Aerospace segment revenue decreased by 12.7% to $12.3 million due to atypical orders in the prior-year period[13] - Operating income for the Product ID segment was $1.9 million, with a non-GAAP operating income of $2.9 million, up 50% year-over-year[12] - Segment operating income for Product ID was $1,878,000 with a segment operating margin of 7.0%, while Aerospace segment operating income was $4,531,000 with a margin of 36.8%[38] - The segment gross profit for the Aerospace division was $6,391,000, resulting in a gross profit margin of 51.9% for the three months ended October 31, 2025[58] - Non-GAAP segment gross profit for the Aerospace division was $14,126,000 for the nine months ended October 31, 2025, with a non-GAAP gross profit margin of 40.3%[58] Cash Flow and Debt - The company generated $3.4 million in operating cash during the quarter, totaling $8.1 million year-to-date[15] - Debt was reduced by $3.2 million in the quarter, bringing total debt down to $40.3 million[16] - Cash and cash equivalents decreased to $3,606,000 as of October 31, 2025, down from $5,050,000 at the beginning of the period[34] - The company reported a net cash provided by operating activities of $8,057,000 for the nine months ended October 31, 2025, compared to $2,324,000 in the prior year[36] Guidance and Future Outlook - The company expects fiscal 2026 revenue to be in the range of $149 million to $154 million, with fourth-quarter revenue projected between $36 million and $41 million[21] - Bookings for the Product ID segment were $22.5 million, down $4.3 million year-over-year, while Aerospace segment orders increased by 23.7% to $13.4 million[18][19] - New bookings during the fourth quarter of FY 2025 totaled $38,576,000, contributing to a total of $145,112,000 for the fiscal year[46] - The backlog at the end of the period was $25,291,000, down from $28,307,000 at the beginning of the period[46] Impairments and Provisions - Goodwill impairment of $297,000 was recorded in the three months ended October 31, 2025, compared to no impairment in the same period last year[32] - The company incurred restructuring charges of $338,000 for the three months ended October 31, 2025[59] - Inventory provisions amounted to $360,000 for the three months ended October 31, 2025, reflecting adjustments in inventory valuation[58] Corporate Expenses and Interest - Corporate expenses increased to $(5,122,000) for the three months ended October 31, 2025, compared to $(3,855,000) in the prior year[38] - Interest expense for the three months ended October 31, 2025, was $827,000, a decrease from $944,000 in the same period last year[38]

Core Viewpoint - AstroNova, Inc. reported disappointing financial results for the second quarter of fiscal 2026, leading to a significant decline in its stock price and highlighting ongoing challenges in its Product Identification segment [1][2][7]. Financial Performance - The company incurred a net loss of $1.2 million, or 16 cents per share, compared to a loss of $0.3 million, or 4 cents per share, in the prior-year period [2][3]. - Revenues fell 10.9% year over year to $36.1 million from $40.5 million [2]. - Gross profit dropped 18.8% to $11.6 million, with gross margin compressing to 32.2% from 35.3% [3]. Segment Performance - The Product Identification segment generated $24.8 million in revenue, down 8.9% year over year, with operating income falling to $1.9 million and operating margin slipping to 7.7% [4]. - The Aerospace segment posted revenues of $11.3 million, a 15.1% decline compared to last year's $13.4 million, with operating profit sliding 37.1% to $2.4 million [5]. Orders and Backlog - Orders for the quarter remained steady at $35.9 million, with a backlog of $25.3 million, slightly down from $25.5 million in the previous quarter [6]. Management Commentary - The CEO described the quarter's results as "disappointing," emphasizing the need to rebuild customer relationships and improve execution [7]. - The CFO noted expectations for modest revenue growth in the second half of the year, driven by an improving product mix and cost-cutting efforts [8]. Factors Influencing Results - The revenue decline was primarily due to shipment delays in the Product ID segment and challenging comparisons against last year's unusual Aerospace orders [9]. - Operating expenses were reduced by approximately $0.9 million, but these savings were insufficient to offset the impact of weaker sales and gross profit [9]. Guidance - Management revised fiscal 2026 revenue guidance downward to $149-$154 million, implying revenues to be roughly flat with fiscal 2025 [10]. - Adjusted EBITDA margin expectations were trimmed to 7.5-8.5% from a previous range of 8.5-9.5% [11]. Other Developments - The company shipped redesigned printers using MTEX's autonomous ink printheads and launched shipments of its ToughWriter 640 printer to a major aircraft manufacturer [12]. - AstroNova amended its credit agreement after breaching a covenant and is negotiating a restructuring into a real estate-backed loan expected within 60 days [12].