Financial Performance - Revenue for Q2 FY 2025 was $40.5 million, representing a 14.1% increase year over year[1] - Gross margin improved to 35.3%, up 800 basis points from the previous year; non-GAAP gross margin remained at 35.6%[1] - Operating income was $1.1 million, with non-GAAP operating income at $2.2 million[1] - Net loss per share decreased to $(0.04) from $(0.22) in Q2 FY 2024; non-GAAP diluted earnings per share was $0.08 compared to $0.15[1] - Adjusted EBITDA for the quarter was $3.9 million, a 5.3% increase year over year[1] - Bookings for Q2 FY 2025 were $35.8 million, up from $30.1 million in the same period last year[6] - Net revenue for the three months ended August 3, 2024, was $40,539 thousand, a 14.2% increase from $35,524 thousand in the same period of 2023[18] - Gross profit for the six months ended August 3, 2024, was $26,298 thousand, representing a 19.9% increase from $22,096 thousand in the prior year[18] - Operating income for the three months ended August 3, 2024, was $1,061 thousand, a significant recovery from an operating loss of $1,198 thousand in the same period of 2023[18] - Net income for the six months ended August 3, 2024, was $869 thousand, compared to a net loss of $769 thousand in the same period of 2023[21] - Adjusted EBITDA for the six months ended August 3, 2024, was $6,314,000, compared to $6,710,000 for the same period last year[30] Segment Performance - Product Identification segment revenue increased by over 5% year-over-year, while Test & Measurement segment revenue grew by 37% sequentially and year-over-year[2] - Segment operating profit for the Product Identification segment was $2,348,000, compared to a loss of $461,000 in the prior year[22] - Total Segment Operating Profit for the six months ended July 29, 2023, was $10,895 million, down from $6,044 million in the previous year, indicating a decline of 44.5%[32] - Non-GAAP Segment Operating Profit for the six months ended August 3, 2024, was $11,015 million, compared to $9,464 million for the same period in 2023, representing an increase of 16.4%[32] - The Test & Measurement segment reported an Operating Profit of $1,917 million for the three months ended July 29, 2023, compared to $3,989 million for the same period in 2024, a decrease of 52.0%[32] Acquisition Impact - The integration of the MTEX NS acquisition generated $0.8 million in revenue and an operating loss of $1.4 million during the quarter[3] - The company expects MTEX to contribute $8 million to $10 million in revenue for the full fiscal year 2025[3] - The company completed the acquisition of MTEX, resulting in a cash outflow of $20,729 thousand for the six months ended August 3, 2024[21] Financial Position - Total assets increased to $169,017 thousand as of August 3, 2024, up from $133,251 thousand at the end of January 2024[19] - Current liabilities rose to $44,519 thousand as of August 3, 2024, compared to $29,761 thousand at the end of January 2024[19] - Cash provided by operating activities for the six months ended August 3, 2024, was $7,066 thousand, an increase from $4,718 thousand in the prior year[21] Future Guidance - Adjusted EBITDA margin estimate for FY 2025 has been reduced to 9% to 10%, with expectations of 13% to 14% in FY 2026[4] - The company is focusing on market expansion and new product development as part of its strategic initiatives moving forward[32] - Future guidance indicates a cautious outlook with emphasis on cost management and operational efficiency improvements[32]

Core Viewpoint - AstroNova's share price has declined nearly 20% from approximately $18 per share, primarily due to year-over-year sales declines across both segments, which are viewed as largely temporal. The current share price of around $14 suggests it is undervalued, presenting an intriguing risk/reward opportunity for investors [2]. Test & Measurement Segment - The Test & Measurement (T&M) segment, primarily consisting of flight deck printers, reported sales of $9.78 million in Q1, down about 5% year-over-year and nearly 25% sequentially. The decline is attributed to order delivery timing and temporary component shortages, which impacted $3 million in potential sales [3][4]. - Adjusting for the component shortages, normalized sales could imply a growth of approximately 24%, indicating stronger demand trends than reported [3]. - Despite a challenging environment, the segment's EBIT margins were 17.6%, down from 20.05% year-over-year, primarily due to fixed cost deleverage from lower sales [4]. - The acquisition of Honeywell has allowed AstroNova to push more ToughWriter printers, which are higher margin products, potentially improving future margins as the company aims to increase ToughWriter sales from 40% to 90% by 2027 [3][4]. Product Identification Segment - The Product Identification (PI) segment reported sales of $23.19 million in Q1, down nearly 7% year-over-year and 13% sequentially, primarily due to delayed shipments from customer specification changes [5]. - The decline in sales is also linked to lower utilization of printers due to previous quality issues with ink suppliers, which may still be affecting sales [5][6]. - Despite the challenges, the segment's EBIT margins improved to 12.9%, up from 10% year-over-year, attributed to operational efficiencies and a favorable mix of higher-margin products [6][7]. Valuation and Future Outlook - The acquisition of MTEX for $19 million is expected to enhance AstroNova's product offerings and sales potential, with projected sales of approximately $9 million this fiscal year [8][9]. - The company is expected to generate $172 million in sales and $32.8 million in segment EBIT by FY27, with a projected free cash flow of around $14.5 million [9][10]. - The current market cap of approximately $111 million suggests that the company is undervalued, with a potential market cap of $196 million by FY27 based on conservative growth estimates [10][11].

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $33 million, down 7% from the prior year due to lower sales in both Product Identification (P&I) and Test & Measurement (T&M) segments [18] - Gross margin increased to 36.3%, up 130 basis points from the same period last year, reflecting higher margins in both segments [18] - Adjusted EBITDA was $2.5 million, representing 7.5% of revenue, down 19% from last year [22] - Diluted EPS for the quarter was $0.15 compared to $0.11 in the first quarter last year [22] Business Line Data and Key Metrics Changes - In the Product Identification segment, revenue was $23.2 million, down from $25.1 million in Q1 2024, primarily due to delayed shipments [23] - Operating profit in the P&I segment was $3 million, or 12.9% of segment revenue, compared to $2.5 million, or 10% of segment revenue last year [23] - In the Test & Measurement segment, revenue was $9.8 million, down from $10.3 million last year, with operating profit at $1.7 million, or 17.6% of segment revenue [24] Market Data and Key Metrics Changes - Supplies accounted for 57% of revenue in Q1 2025, up from 54% in Q1 2024, while hardware accounted for about 27% of revenue, down 6 points from last year [25] - The service/other category made up just over 16% of revenue, up from 13.2% in Q1 of last year, primarily due to the T&M segment [25] Company Strategy and Development Direction - The company is transitioning most Aerospace customers from legacy products to newer ToughWriter branded printers, which is expected to lower manufacturing costs and improve supply chain efficiency [7][8] - The acquisition of MTEX NS is expected to generate $8 million to $10 million in revenue for the fiscal year and is seen as a strategic move to expand market presence and product offerings [10] - The company aims for organic revenue growth in the mid-single digits and an adjusted EBITDA margin in the range of 13% to 14% for fiscal 2025 [9][29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in Q1 due to temporary component shortages affecting shipments, but remains optimistic about resolving these issues within the fiscal year [7][9] - The company is focused on debt reduction and aims to repay most revolving credit debt by the end of the year [27] - Management expressed confidence in the long-term profitability benefits from transitioning to higher-margin products [28] Other Important Information - Cash and equivalents at the end of Q1 were $4 million, down from the previous fiscal year [26] - The company generated $6.9 million in cash from operations during the quarter and reduced revolving debt by $5.5 million [26] Q&A Session Summary - No questions were posed during the Q&A session, and the call concluded without further inquiries [30][31]

1st Quarter Fiscal 2025 FINANCIAL RESULTS June 6, 2024 Forward-Looking Statements Information included in this presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact, but rather reflect our current expectations concerning future events and results. These statements may include the use of the words “believes,” “expects,” “intends,” “plans,” “anticipates,” “likely,” “contin ...

Revenue Performance - Total revenue for the first quarter of fiscal 2025 was $32.96 million, a decrease of 6.9% compared to $35.42 million in the same quarter of the previous year[96]. - Revenue from the Product Identification (PI) segment was $23.19 million, down 7.6% from $25.10 million year-over-year, primarily due to hardware sales declines[102]. - Test and Measurement (T&M) segment revenue was $9.78 million, a decrease of 5.3% from $10.32 million in the prior year, attributed to component shortages affecting hardware shipments[103]. - Domestic revenue for the first quarter was $18.10 million, a decrease of 12.5% from $20.70 million in the prior year, while international revenue was $14.90 million, reflecting a 0.9% increase[96]. Profitability - Gross profit for the current quarter was $12.00 million, a 3.3% decrease from $12.40 million in the prior year, with a gross profit margin of 36.3%[96]. - Net income for the first quarter was $1.18 million, or $0.15 per diluted share, compared to $0.80 million, or $0.11 per diluted share in the prior year[98]. - The company recognized a federal, state, and foreign income tax benefit of $0.40 million, resulting in an effective tax rate of (58.1)%[98]. Expenses - Operating expenses decreased by 2.7% to $10.60 million compared to $10.90 million in the prior year, with selling and marketing expenses down 5.9%[96]. - Research and development expenses were $1.60 million, a decrease of 10.3% from the prior year, representing 4.9% of revenue[96]. Cash Flow and Working Capital - Net cash provided by operating activities increased to $6.9 million for the first three months of fiscal 2025, compared to $2.6 million for the same period in the previous year, primarily due to an increase in cash provided by working capital[115]. - Accounts receivable decreased to $17.9 million at the end of the first quarter of fiscal 2025, down from $23.1 million at year-end, with days sales outstanding improving to 49 days from 52 days[116]. - Inventory balance at the end of the first quarter of fiscal 2025 was $45.2 million, a decrease from $46.4 million at year-end, while inventory days on hand increased to 194 days from 168 days[116]. - Cash position at April 27, 2024, was $4.0 million, down from $4.5 million at year-end, primarily due to cash outflows including repayments on revolving credit of $5.5 million and principal payments on long-term debt of $0.7 million[117]. Financing Activities - The company entered into a revised credit agreement to finance the acquisition of MTEX, with a new term loan of $6.0 million and an increase in the revolving credit facility from $22.5 million to $25.0 million[107]. - The company entered into a secured equipment loan facility agreement in January 2024, borrowing $0.8 million for production equipment, maturing on January 23, 2029, with a fixed interest rate of 7.06%[113]. - A Third Amendment to the Amended Credit Agreement was executed on May 6, 2024, providing a new term loan of EUR 14,000,000 and increasing the revolving credit facility from $25.0 million to $30.0 million until January 31, 2025[114]. - The term loan repayment schedule includes quarterly installments of EUR 14,000,000 and existing loans through April 30, 2027, with the entire remaining balance due on August 4, 2027[114]. - The company believes it is in compliance with all covenants in the Credit Agreement as of April 27, 2024[111]. - Interest rates under the Amended Credit Agreement range from 1.60% to 2.50% based on the consolidated leverage ratio, with additional fees on the undrawn portion of the revolving credit facility ranging from 0.15% to 0.35%[110]. - The company is subject to various financial and non-financial covenants, including a maximum consolidated leverage ratio and minimum asset coverage ratio[111].

Financial Performance - Bookings for Q1 FY 2025 totaled $33.1 million, down from $38.4 million in Q1 FY 2024[6] - Revenue for Q1 FY 2025 was $32.961 million, a decrease of 7% compared to $35.419 million in Q1 FY 2024[5] - Net income increased by 39% to $1.181 million in Q1 FY 2025, compared to $848,000 in Q1 FY 2024[5] - Earnings per diluted share rose to $0.15, up 36% from $0.11 in the same quarter last year[5] - Adjusted EBITDA for Q1 FY 2025 was $2.465 million, a decline of 19% from $3.053 million in Q1 FY 2024[5] - Total revenue for the three months ended April 27, 2024, was $32,961,000, a decrease of 12.4% from $35,419,000 for the same period in 2023[20] - Operating income for the same period was $1,346,000, down from $1,461,000, reflecting a decrease of 7.9%[20] - Net income for the three months ended April 27, 2024, was $1,181,000, compared to $848,000 for the same period in 2023, representing an increase of 39.2%[20] - Adjusted EBITDA for the three months ended April 29, 2023, was $3,053,000, reflecting the company's operational performance[22] Segment Performance - The Product Identification segment generated revenue of $23.2 million, down from $25.1 million year-over-year, but operating profit margin increased by 290 basis points[7] - The Test & Measurement segment reported revenue of $9.8 million, a decrease from $10.3 million in the prior year, with an operating profit margin of 17.6%[8] Expectations and Guidance - The company expects mid-single-digit organic revenue growth and Adjusted EBITDA margins of 13% to 14% for the full fiscal year 2025[4] Acquisition and Market Position - AstroNova's acquisition of MTEX NS enhances its position in the color digital printing market and expands its product range significantly[4] Backlog and Assets - Backlog as of April 27, 2024, was $31.6 million, down from $38.7 million at the end of Q1 FY 2024[6] - Total current assets decreased to $70,272,000 as of April 2024, down from $76,674,000 as of January 31, 2024, a decline of 8.4%[19] - Total liabilities decreased to $35,394,000 as of April 2024, down from $42,969,000 as of January 31, 2024, a reduction of 17.6%[19] - Cash and cash equivalents decreased to $3,990,000 from $4,527,000, a decline of 11.8%[19] - Accounts receivable, net, decreased to $17,863,000 from $23,056,000, a decrease of 22.5%[19] - Inventories, net, decreased slightly to $45,177,000 from $46,371,000, a decline of 2.6%[19] Corporate Expenses - The company reported corporate expenses of $3,367,000 for the three months ended April 27, 2024, compared to $3,126,000 for the same period in 2023, an increase of 7.7%[20]

Acquisition and Business Segments - Astro Machine LLC was acquired on August 4, 2022, and is included in the PI segment starting Q3 of fiscal 2023[12]. - The PI segment includes brands such as QuickLabel, TrojanLabel, and GetLabels, providing a variety of digital color label printers and related supplies[14]. - The T&M segment includes high-speed data acquisition systems and products sold to industries such as aerospace, defense, and automotive[21]. - The company operates in approximately 100 countries, maintaining a leadership position in tabletop digital color label printing and flight deck printers[29]. Product Development and Offerings - The company introduced the QL-900, a wider format inkjet color label printer, in fiscal 2024, while obsoleting the QL-850 and QLS-4100 Xe to streamline product lines[17]. - The ToughWriter series of airborne printers is currently used in various aircraft, with approximately one-third of airborne printers sold being ToughWriter branded[23]. - The PI segment offers training and support, as well as specialized software for label design and printer management[20]. Financial Performance and Debt - The order backlog as of January 31, 2024, was $31.4 million, down from $35.8 million in 2023[31]. - The company has a total indebtedness of $12.2 million in term loan variable-rate debt and $8.9 million under its revolving credit facility as of January 31, 2024[134]. - The weighted average interest rate on the company's variable rate debt was 7.54% during fiscal 2024, while the revolving credit facility had a weighted average interest rate of 7.70%[135]. - A hypothetical 10% change in foreign currency exchange rates would result in an increase or decrease in consolidated net income of less than $0.1 million for the year ended January 31, 2024[133]. - Foreign exchange losses from transactional exposure amounted to $0.1 million for the year ended January 31, 2024[133]. Workforce and Company Culture - As of January 31, 2024, the company employed 365 full-time employees, with the majority located in the United States[36]. - The company is committed to diversity and inclusion, with targeted recruitment initiatives for women in technical and engineering roles[39]. - The company emphasizes a culture of integrity and compliance to ensure honest and environmentally responsible business practices[37]. - The company’s core values include Customer First, One Global Team, Innovation, Continuous Improvement, and Building Shareholder Value[38]. Quality and Operational Goals - The AstroNova Operating System (AOS) is utilized to manage business processes aimed at continuous improvements in quality, delivery, cost, and growth[37]. - The company aims for zero defects in its products, reflecting a strong commitment to quality[37]. - The company’s revenue is affected by the variable size of individual customer transactions, leading to fluctuations from quarter to quarter[40].

Core Viewpoint - AstroNova is positioned as a compelling investment opportunity with potential for growth in earnings and free cash flow over the next 24-48 months, despite recent sales pressures in its Product Identification segment [2] Product Identification Segment - Product Identification (PI) sales decreased by 5% in Q4 to $26.6 million, influenced by macroeconomic factors and specific issues such as a faulty ink supplier affecting printer sales [3][4] - The company anticipates a recovery in sales as repair issues are resolved and normalized supply volumes are expected to increase in FY25 [4] - Competitive risks exist, particularly from commercial printer vendors, but AstroNova has maintained market share through continuous product improvements [4][5] Test & Measurement Segment - Test & Measurement (T&M) sales increased by approximately 11% to $13 million in Q4, benefiting from improved airplane production orders [5] - Long-term demand for T&M products is expected to grow due to a backlog in aircraft deliveries, despite potential near-term risks associated with Boeing's production issues [5][6] - The segment is projected to maintain healthy margins, with EBIT margins around 24% based on current sales levels [6][9] Margins and Cost Structure - PI segment EBIT margins improved to approximately 12% from 7% year-over-year, attributed to a reduced cost base despite lower sales volumes [6] - T&M segment EBIT margins were around 28%, with price increases contributing to margin growth [6][7] - Future margin improvements are expected as restructuring costs decrease and the mix of higher-margin products increases [6][7] Valuation - AstroNova's current market cap is approximately $133 million, with an enterprise value of around $150 million after accounting for cash and debt [8] - The company is valued at a 12x free cash flow multiple, which is considered reasonable given the stable demand for its products [9] - Projected growth in T&M sales and margin improvements could lead to a market cap of approximately $220 million by FY28, representing an attractive investment opportunity [9][10] Conclusion - AstroNova presents a favorable risk/reward profile with internal growth opportunities and expected market growth, although risks related to Boeing's production issues and potential operational challenges remain [10]

Financial Data and Key Metrics Changes - AstroNova reported fiscal 2024 revenue of over $148 million, marking a 4% increase year-over-year, primarily driven by the Test & Measurement (T&M) segment, which saw a nearly 12% revenue increase [10][12] - Gross margin improved by 110 basis points on a GAAP basis and 290 basis points on a non-GAAP basis compared to fiscal 2023 [10] - Adjusted EBITDA increased by 60% to $17.6 million, with an adjusted EBITDA margin of 11.9%, up 420 basis points from fiscal 2023 [11] Segment Performance Changes - Product Identification (PI) segment revenue was $104 million, slightly above fiscal 2023, with operating profit of $2.2 million on a GAAP basis and $5.3 million on a non-GAAP basis [12] - T&M segment revenue increased to $44 million from $39.4 million in fiscal 2023, with operating profit rising by $1.2 million [12] - The data acquisition product line within the T&M segment performed well, particularly in the second half of fiscal 2024, driven by strong order volume in energy and defense markets [13] Market Data and Key Metrics Changes - The U.S. market saw nearly $1 million in revenue growth, with higher revenue also reported in Asia, although these gains were offset in Europe [20] - The rebound in airline passenger traffic and increasing daily flights contributed positively to the T&M segment's performance [12] Company Strategy and Development Direction - The company is focused on continuous improvement and operational efficiencies, targeting mid-single-digit organic revenue growth for fiscal 2025 [14] - AstroNova aims to enhance its adjusted EBITDA margin to 13% to 14% in fiscal 2025, with a goal of improving by 100 basis points annually over the next two years [14] - The company is actively seeking strategic acquisitions to broaden its presence and capabilities in growth markets [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's financial trajectory and operational improvements, highlighting a strong cash flow generation of $12.4 million for the year [15] - The overall industry is growing, and despite challenges faced by Boeing, AstroNova's forecasts and projections remain unchanged, with expectations for increased shipments [27] Other Important Information - The company completed a strategic realignment of its PI segment, resulting in a leaner and more efficient business model [8] - AstroNova launched new PI products in fiscal 2024, which have been well received and are expected to gain momentum in the second half of the fiscal year [9] Q&A Session Summary Question: Impact of Boeing and Airbus on AstroNova - Management confirmed that AstroNova has had printers on Airbus aircraft for a while and remains diversified across various aircraft, with no significant changes in forecasts despite Boeing's challenges [25][27] Question: Guidance and Seasonality - Management acknowledged a conservative approach in guidance, indicating that while there are uncertainties, they are comfortable with their projections and may adjust them later in the year if necessary [34][36] Question: Product Identification Segment Margins - Management noted that inventory adjustments impacted margins in the PI segment, but they expect margins to improve moving forward as more products come back online [38][42] Question: M&A Pipeline - Management stated that they are actively looking for acquisition opportunities in both T&M and PI segments, with a strong financial position to pursue suitable targets [46][47] Question: Cash Flow Dynamics - Management highlighted a focus on inventory management and cash flow, indicating that improvements in inventory and higher margins will allow for significant debt reduction and potential acquisitions [50]

FY24 Financial Performance - AstroNova achieved record revenue of $148.1 million, a 4% year-over-year increase[8] - The company reported record operating income of $8.8 million, up 62% year-over-year[8] - Non-GAAP diluted EPS was $0.97, a 126% increase[8] - Adjusted EBITDA less restructuring and retrofit-related items reached $17.6 million, up 60% year-over-year[8] - The company generated $12.4 million in cash from operating activities, compared to a use of $3 million in the previous year[8] Q4 2024 Financial Performance - Revenue was $39.594 million, a slight decrease of 1% year-over-year[22] - Gross profit increased to $14.746 million, up 9% year-over-year[22] - Operating income increased significantly to $3.915 million, up 87% year-over-year[22] - Net income increased to $2.711 million, up 99% year-over-year[22] - Adjusted EBITDA less restructuring and retrofit items was $5.2 million, up 33% year-over-year[23] FY25 Financial Targets and Outlook - The company anticipates mid-single-digit organic revenue percentage growth[20] - AstroNova is targeting an Adjusted EBITDA margin of 13% to 14% for FY25[20] - The company expects continued Adjusted EBITDA margin improvement of 100 basis points over the following two fiscal years[20]