AstroNova(ALOT) - 2026 Q1 - Quarterly Report

Revenue Performance - For the first quarter ended April 30, 2025, total revenue was $37.7 million, a 14.4% increase from$ 32.9 million in the prior year[132]. - Product ID segment revenue was $26.3 million, representing a 13.4% increase compared to$ 23.2 million in the prior year, while Aerospace segment revenue increased by 16.8% to $11.4 million from$ 9.8 million[132]. - Domestic revenue for the first quarter was $22.7 million, up 15.9% from$ 19.6 million in the prior year, while international revenue was $15.0 million, reflecting a 12.2% increase[132]. - Supplies revenue increased by 13.1% to$ 21.1 million, driven by a $2.3 million increase in the Product ID segment[134]. - Service and other revenues decreased by 2.2% to$ 5.3 million, primarily due to a decline in the Product ID segment[135]. - Direct to package/overprint printers sales surged by $1.6 million or 90% year-over-year, contributing significantly to the revenue increase[143]. - Aerospace segment revenue rose by$ 1.6 million or 16.8% to $11.4 million in the first quarter of 2025, compared to$ 9.8 million in the same period of 2024[145]. - Defense market sales in the Aerospace segment increased by $2.2 million or 660.5% due to a renewed defense contract[145]. Profitability and Expenses - Gross profit for the current quarter was$ 12.7 million, a 5.7% increase from $12.0 million in the prior year, with a gross profit margin of 33.6%, down from 36.3%[136]. - Operating expenses increased by 13.7% to$ 12.1 million, primarily due to $1.0 million in operating costs at MTEX and$ 0.2 million in restructuring costs[137]. - The company reported a net loss of $0.4 million or$ (0.05) per diluted share for the first quarter, compared to a net income of $1.2 million or$ 0.15 per diluted share in the prior year[140]. - Aerospace segment operating profit was $2.8 million with a profit margin of 24.2%, up from$ 1.7 million and 17.6% in the prior year[145]. Debt and Financial Position - As of April 30, 2025, cash and cash equivalents were $5.3 million, with$ 18.3 million borrowed on the revolving line of credit[153]. - The revolving credit facility was increased from $25.0 million to$ 30.0 million until January 31, 2025, after which it will revert to $25.0 million[151]. - The outstanding principal balance of the Term Loan was$ 9.5 million as of the effective date of the Fourth Amendment, with scheduled repayments through April 30, 2027[154]. - The company plans to focus on reducing outstanding debt under credit agreements in fiscal 2026[147]. - The company believes it is in compliance with all covenants in the Further Amended Credit Agreement as of April 30, 2025[161]. - The company entered into a secured equipment loan facility agreement for $0.8 million at a fixed interest rate of 7.06%, maturing on January 23, 2029[165]. - The long-term debt obligations assumed from MTEX include a term loan of EUR 1.5 million ($ 1.6 million) with monthly payments of EUR 17,402 ( $18,795) starting October 2024, maturing on December 21, 2033, at a fixed rate of 6.022%[166]. - MTEX has government assistance in the form of interest-free loans totaling EUR 0.7 million ($ 0.8 million), which must be repaid to government agencies[167]. Cash Flow and Working Capital - Net cash provided by operating activities decreased to $4.4 million for the first three months of fiscal 2026, down from$ 6.9 million in the same period last year[169]. - Accounts receivable increased to $21.4 million at the end of the first quarter of fiscal 2026, with days sales outstanding rising to 52 days[170]. - Inventory balance rose to$ 51.5 million, up from $47.9 million at year-end, with inventory days on hand increasing to 185 days[170]. - Cash position improved slightly to$ 5.4 million compared to $5.1 million at year-end, attributed to reduced cash outflows[171]. Risks and Foreign Exchange - The company faces risks including declining demand in the test and measurement markets and the ability to develop new products[177]. - A hypothetical 10% change in foreign currency exchange rates would impact consolidated net income by less than$ 0.1 million for the quarter ended April 30, 2025[179]. - Foreign exchange losses from transactional exposure were less than $0.1 million for the year ended April 30, 2025[180]. Integration and Restructuring - The acquisition of MTEX is expected to enhance customer service and integrate advanced technology, although the integration process has been more resource-intensive than anticipated[142]. - The company anticipates annualized savings of$ 3.0 million from restructuring actions, which include a 10% reduction in the global workforce[131].