Fiscal 2026 Second Quarter Financial Results Overview [Executive Summary](index=1&type=section&id=executive-summary) Skillsoft achieved Q2 FY26 TDS revenue growth and positive free cash flow, revising full-year guidance due to market softness - Achieved a **fourth consecutive quarter of revenue growth** in the TDS enterprise solution, reinforcing the durability and potential of the core business[4](index=4&type=chunk) - Economic uncertainty continued into Q2, weighing on revenue, primarily due to weaker discretionary demand for live training[4](index=4&type=chunk) - Accelerating execution to reimagine learning, with September announcements introducing AI Innovation based products and a reshaped go-to-market strategy[4](index=4&type=chunk) - Revised full-year revenue guidance range to account for softness in federal and live learning spending[5](index=5&type=chunk) - Generated positive free cash flow year-to-date and remains on track to deliver on adjusted EBITDA and free cash flow targets for the balance of the year[5](index=5&type=chunk) [Fiscal 2026 Second Quarter Select Metrics and Financial Measures](index=1&type=section&id=fiscal-2026-second-quarter-select-metrics-and-financial-measures) Skillsoft reported a 3% year-over-year decrease in total revenue for Q2 FY26, reaching $129 million, with improved GAAP net loss | Metric | Q2 FY26 (Millions) | Q2 FY25 (Millions) | YoY Change | | :----- | :----------------- | :----------------- | :--------- | | Total Revenue | $129 | $132 | -3% | | Talent Development Solutions (TDS) Revenue | $101 | $101 | 0% | | Global Knowledge (GK) Revenue | $28 | $31 | -10% | | GAAP Net Loss | ($24) | ($40) | Improved | | GAAP Net Loss per share | ($2.78) | ($4.84) | Improved | | Adjusted EBITDA | $28 | $28 | 0% | | Adjusted EBITDA Margin | 22% | 21% | +1 pp | | Free Cash Flow (Q2) | ($23) | ($16) | Worsened | | Free Cash Flow (YTD) | $4 | N/A | Positive | [Fiscal 2026 Second Quarter Business Highlights](index=1&type=section&id=fiscal-2026-second-quarter-business-highlights) Key business achievements in Q2 FY26 included positive Free Cash Flow, expanded market reach, and significant growth in technology and AI learners - Achieved positive Free Cash Flow in both the year-to-date and last-twelve-month periods[9](index=9&type=chunk) - Announced availability in AWS Marketplace, simplifying and accelerating the purchasing process[9](index=9&type=chunk) - Expanded reach through partnership with Salesforce to bring Skillsoft CAISY™ agent actions to Agentforce and the Salesforce ecosystem[9](index=9&type=chunk) - Achieved **50% year-over-year increase in technology learners**, **74% increase in AI learners**, and **158% increase in total AI learning hours** on the Skillsoft platform[9](index=9&type=chunk) [Full-Year Fiscal 2026 Financial Outlook](index=1&type=section&id=full-year-fiscal-2026-financial-outlook) Skillsoft revised its full-year fiscal 2026 financial outlook, projecting GAAP Revenue between $510 million and $530 million | Metric | Full-Year Fiscal 2026 Outlook | | :----- | :---------------------------- | | GAAP Revenue | $510 million – $530 million | | Adjusted EBITDA | $112 million – $118 million | [Segment Reporting Changes](index=2&type=section&id=segment-reporting-changes) The company adjusted segment reporting components in Q4 FY25 to enhance transparency and peer comparability - Changes made to segment result components in Q4 FY25 to increase transparency and improve segment comparability to peers[10](index=10&type=chunk) - All prior period comparatives have been recast to conform to the current presentation[10](index=10&type=chunk) Company Information [Webcast and Conference Call Information](index=3&type=section&id=webcast-and-conference-call-information) Skillsoft hosted a conference call and webcast on September 9, 2025, to discuss financial results, with a replay available - Skillsoft hosted a conference call and webcast on September 9, 2025, at 5:00 p.m. Eastern Time to discuss financial results[11](index=11&type=chunk) - A replay of the event will be available for twelve months on the Investor Relations section of Skillsoft's website[11](index=11&type=chunk) [About Skillsoft](index=3&type=section&id=about-skillsoft) Skillsoft empowers organizations and learners with personalized, AI-powered learning experiences to address skill gaps and future-proof workforces - Skillsoft (NYSE: SKIL) empowers organizations and learners with personalized, interactive, AI-powered learning experiences and enterprise-ready solutions[12](index=12&type=chunk) - The platform helps customers solve complex business challenges like bridging skill gaps, improving talent retention, driving digital transformation, and future-proofing the workforce[12](index=12&type=chunk) - Skillsoft is the talent development partner for thousands of organizations, including **60% of the Fortune 1000**, serving over **105 million learners globally**[12](index=12&type=chunk) [Investor and Media Contacts](index=6&type=section&id=investor-and-media-contacts) Contact information for investor relations and media inquiries is provided - Investors can contact Ross Collins or Stephen Poe at SKIL@alpha-ir.com[25](index=25&type=chunk) - Media inquiries can be directed to Cameron Martin at cameron.martin@skillsoft.com[25](index=25&type=chunk) Non-GAAP Financial Measures and Key Performance Metrics [Introduction and Rationale](index=3&type=section&id=introduction-and-rationale) Skillsoft utilizes non-GAAP financial measures and key performance metrics to supplement GAAP information for performance evaluation and comparability - Non-GAAP measures and key performance metrics are used by analysts and investors to evaluate companies and provide insight into U.S. GAAP financial disclosures[13](index=13&type=chunk) - Management uses these measures to assess operating performance, financial leverage, resource allocation, and to provide normalized period-to-period comparisons[13](index=13&type=chunk) - Non-GAAP measures have limitations as analytical tools, are not GAAP presentations, and should not be considered alternatives to GAAP profit/loss or operating cash flows[13](index=13&type=chunk) - Quantitative reconciliations for forward-looking non-GAAP financial measures are not provided due to variability and difficulty in making accurate forecasts[15](index=15&type=chunk) [Key Performance Metric: Dollar Retention Rate (DRR)](index=3&type=section&id=key-performance-metric-dollar-retention-rate-drr) Dollar Retention Rate (DRR) measures the long-term value of customer contracts and the ability to retain and expand revenue from existing customers - DRR represents subscription renewals, upgrades, churn, and downgrades for existing customers divided by their beginning total renewable base[16](index=16&type=chunk) - DRR is used to measure the long-term value of customer contracts and the ability to retain and expand revenue from existing customers[17](index=17&type=chunk) [Non-GAAP Financial Measure Definitions](index=4&type=section&id=non-gaap-financial-measure-definitions) This section defines various non-GAAP financial measures used by Skillsoft, primarily excluding non-cash and discrete items for enhanced comparability [Adjusted Net Income (Loss)](index=4&type=section&id=adjusted-net-income-loss) Adjusted net income (loss) excludes non-cash items, discrete and event-specific costs, and certain accounting income/expenses - Adjusted net income (loss) excludes non-cash items, discrete and event-specific costs not representing normal cash operating expenses, and certain accounting income/expenses[18](index=18&type=chunk) - Exclusions include impairment charges, amortization of acquired intangible assets, acquisition and integration related costs, restructuring charges, transformation costs, system migration costs, long-term incentive compensation expenses, executive exit costs, fair value adjustments, and other (income) expense, net[18](index=18&type=chunk) [Adjusted EBITDA](index=5&type=section&id=adjusted-ebitda) Adjusted EBITDA is defined as net income (loss) with specific exclusions, including amortization, depreciation, and income taxes - Adjusted EBITDA is defined as net income (loss) excluding the same items as adjusted net income (loss), plus additional exclusions[19](index=19&type=chunk) - Additional exclusions for Adjusted EBITDA are amortization of intangible assets (other than those recognized as part of business combination accounting), depreciation expense, and provision for (benefit from) income taxes[19](index=19&type=chunk) [Other Adjusted Operating Measures](index=5&type=section&id=other-adjusted-operating-measures) This section defines other adjusted operating measures including adjusted total operating expenses, free cash flow, and adjusted net leverage - Adjusted total operating expenses exclude depreciation, long-term incentive compensation, system migration, and transformation costs[19](index=19&type=chunk) - Free cash flow is defined as net cash provided by (used in) operating activities less net purchases of property and equipment and internally developed software[19](index=19&type=chunk) - Adjusted net leverage is defined as current maturities of long-term debt, plus borrowings under accounts receivable facility, plus long-term debt, less cash and equivalents and restricted cash, divided by adjusted EBITDA for the preceding twelve-month period[19](index=19&type=chunk) Unaudited Condensed Consolidated Financial Statements [Balance Sheets](index=7&type=section&id=balance-sheets) As of July 31, 2025, Skillsoft reported total assets of $969.4 million, with a decrease in total liabilities and shareholders' equity | Metric (in thousands) | July 31, 2025 | January 31, 2025 | Change | | :-------------------- | :------------ | :--------------- | :----- | | Total assets | $969,426 | $1,106,069 | ($136,643) | | Total liabilities | $927,000 | $1,012,223 | ($85,223) | | Total shareholders' equity (deficit) | $42,453 | $93,846 | ($51,393) | | Accounts receivable, net | $96,778 | $178,989 | ($82,211) | | Deferred revenue (current

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Quarterly Period Ended July 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Transition Period From To Commission File Number: 001-34755 LIMONEIRA COMPANY (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or ...

Exhibit 99.1 Limoneira Company Announces Third Quarter Fiscal Year 2025 Financial Results Company On Track to Merge Citrus Sales and Marketing into Sunkist Growers with $5 Million in Annual Selling and Marketing Cost Savings and EBITDA Improvement Beginning in Fiscal Year 2026 Company Reiterates Avocado and Lemon Volume Guidance for Fiscal Year 2025 Company Explores Providing Housing on the Limco Del Mar Ranch to Address Ventura County's Housing Needs SANTA PAULA, Calif.-- (BUSINESS WIRE) – September 9, 202 ...

Executive Summary & First Quarter Highlights [First Quarter Highlights](index=1&type=section&id=1.1.%20First%20Quarter%20Highlights) AeroVironment reported a strong first quarter for fiscal year 2026, marked by the successful acquisition of BlueHalo, which significantly contributed to record revenue and backlog. The company also achieved substantial year-over-year growth in both total and legacy revenue - Successfully closed the acquisition of BlueHalo, which contributed **$235.2 million** of revenue in the first quarter[5](index=5&type=chunk) Q1 FY2026 Revenue Highlights | Metric | Q1 FY2026 | YoY Change | | :------------------- | :---------- | :--------- | | Record First Quarter Revenue | $454.7 million | +140% | | Legacy Revenue | $219.5 million | +16% | - Achieved record first quarter backlog of **$1.1 billion** and bookings of **$399.0 million**[5](index=5&type=chunk) - Visibility of **82%** to the midpoint of fiscal year 2026 revenue guidance range as of September 9, 2025[5](index=5&type=chunk) [CEO Commentary](index=1&type=section&id=1.2.%20CEO%20Commentary) CEO Wahid Nawabi highlighted the continued strength across both Autonomous Systems and Space, Cyber and Directed Energy segments, driven by record revenue and backlog. He expressed confidence in the company's ability to deliver best-in-class solutions aligned with customer priorities and to capture growing demand through innovative solutions and scalable manufacturing capacity - Continued strength across both Autonomous Systems and Space, Cyber and Directed Energy segments with record revenue and backlog[1](index=1&type=chunk) - Confident in the ability to deliver best-in-class solutions aligned to customers' highest priorities across all domains[1](index=1&type=chunk) - Exceptionally well positioned to capture growing demand due to innovative solutions and manufacturing capacity that can quickly scale[1](index=1&type=chunk) Fiscal 2026 First Quarter Financial Performance [Revenue Analysis](index=1&type=section&id=2.1.%20Revenue%20Analysis) AeroVironment reported record revenue for the first quarter of fiscal 2026, significantly increasing year-over-year, primarily driven by the BlueHalo acquisition and growth in both product sales and service revenue across its segments Q1 FY2026 Revenue Performance | Metric | Q1 FY2026 (Millions) | Q1 FY2025 (Millions) | YoY Change | | :---------------- | :------------------- | :------------------- | :--------- | | Total Revenue | $454.7 | $189.5 | +140% | | Product Sales | $313.5 | $159.5 | +96.5% | | Contract Services | $141.1 | $29.9 | +371.9% | - The acquisition of BlueHalo contributed **$123.7 million** to product revenue and **$111.5 million** to service revenue in the current quarter[2](index=2&type=chunk) Q1 FY2026 Segment Revenue | Segment | Revenue (Millions) | | :---------------- | :----------------- | | Autonomous Systems (AxS) | $285.3 | | Space, Cyber and Directed Energy (SCDE) | $169.4 | [Gross Margin](index=1&type=section&id=2.2.%20Gross%20Margin) Gross margin increased in absolute terms but decreased significantly as a percentage of revenue due to higher intangible amortization and other non-cash purchase accounting expenses, as well as an increased proportion of service revenue resulting from the BlueHalo acquisition Q1 FY2026 Gross Margin Performance | Metric | Q1 FY2026 (Millions) | Q1 FY2025 (Millions) | YoY Change | | :---------------- | :------------------- | :------------------- | :--------- | | Total Gross Margin | $95.1 | $81.5 | +17% | | Gross Margin % | 21% | 43% | -22 ppts | - Gross margin was negatively impacted by **$37.4 million** of intangible amortization and other related non-cash purchase accounting expenses in Q1 FY2026, compared to **$3.7 million** in Q1 FY2025[3](index=3&type=chunk) [Operating Income/Loss](index=1&type=section&id=2.3.%20Operating%20Income%2FLoss) The company reported an operating loss in Q1 FY2026, a significant decline from operating income in the prior year, primarily due to increased selling, general and administrative (SG&A) and research and development (R&D) expenses, heavily influenced by BlueHalo acquisition-related expenses and intangible amortization Q1 FY2026 Operating Performance | Metric | Q1 FY2026 (Millions) | Q1 FY2025 (Millions) | | :-------------------- | :------------------- | :------------------- | | (Loss) Income from Operations | $(69.3) | $23.1 | - The current quarter was negatively impacted by **$79.7 million** of intangible amortization and other related non-cash purchase accounting expenses, compared to **$4.8 million** in the prior year[4](index=4&type=chunk) - SG&A expense increased by **$97.5 million**, including **$41.2 million** of intangible amortization and **$23.7 million** of acquisition-related expenses. R&D expense increased by **$8.5 million**[4](index=4&type=chunk)[6](index=6&type=chunk) [Other Income/Loss and Tax Impact](index=3&type=section&id=2.4.%20Other%20Income%2FLoss%20and%20Tax%20Impact) Other loss, net, increased substantially due to higher interest expense from BlueHalo acquisition financing, while the company recorded a benefit from income taxes due to the pre-tax loss Q1 FY2026 Other Loss and Tax Impact | Metric | Q1 FY2026 (Millions) | Q1 FY2025 (Millions) | | :-------------------- | :------------------- | :------------------- | | Other (Loss) Income, net | $(15.1) | $(0.5) | | Benefit from Income Taxes | $(15.2) | $1.5 (Provision) | - The increase in other loss was primarily due to an increase in interest expense related to the term and revolver facility loans obtained in conjunction with the BlueHalo acquisition[7](index=7&type=chunk) - The decrease in income tax provision year-over-year was primarily due to the loss before income taxes[8](index=8&type=chunk) [Net Income/Loss and EPS](index=3&type=section&id=2.5.%20Net%20Income%2FLoss%20and%20EPS) AeroVironment reported a net loss and negative diluted EPS for Q1 FY2026, a significant reversal from net income in the prior year, largely due to the substantial impact of intangible amortization and other non-cash purchase accounting expenses related to the BlueHalo acquisition Q1 FY2026 Net Income/Loss and EPS | Metric | Q1 FY2026 | Q1 FY2025 | | :-------------------- | :------------------- | :------------------- | | Net (Loss) Income | $(67.4) million | $21.2 million | | Diluted EPS | $(1.44) | $0.75 | - The current quarter was negatively impacted by **$79.7 million**, or **$1.34** per diluted share, of intangible amortization and other related non-cash purchase accounting expenses, compared to **$4.8 million**, or **$0.13** per diluted share, in the prior-year period[9](index=9&type=chunk) [Non-GAAP Financial Measures (Q1)](index=3&type=section&id=2.6.%20Non-GAAP%20Financial%20Measures%20(Q1)) Non-GAAP adjusted EBITDA increased year-over-year, while non-GAAP diluted EPS decreased, reflecting adjustments for acquisition-related expenses and intangible amortization Q1 FY2026 Non-GAAP Financial Measures | Metric | Q1 FY2026 | Q1 FY2025 | YoY Change | | :-------------------- | :------------------- | :------------------- | :--------- | | Non-GAAP Adjusted EBITDA | $56.6 million | $37.2 million | +52.1% | | Non-GAAP Earnings per Diluted Share | $0.32 | $0.89 | -64% | Backlog and Bookings AeroVironment achieved a record funded backlog as of August 2, 2025, significantly increasing from the previous fiscal year-end, with strong bookings during the quarter, providing substantial revenue visibility for the current fiscal year Backlog and Bookings Data | Metric | As of August 2, 2025 | As of April 30, 2025 | | :---------------- | :------------------- | :------------------- | | Funded Backlog | $1.1 billion | $726.6 million | | Bookings (Q1 FY2026) | $399.0 million | N/A | - The company has visibility of **80%** of fiscal year 2026 revenue[11](index=11&type=chunk) Fiscal 2026 Full Year Outlook [Full Year Guidance](index=3&type=section&id=4.1.%20Full%20Year%20Guidance) The company reiterated its full-year fiscal 2026 guidance, projecting significant revenue growth and positive non-GAAP adjusted EBITDA, while expecting a net loss and GAAP loss per diluted share Fiscal Year 2026 Guidance | Metric | Range | | :-------------------------- | :------------------- | | Revenue | $1.9 billion - $2.0 billion | | Net Loss | $(77) million - $(72) million | | Non-GAAP Adjusted EBITDA | $300 million - $320 million | | Loss per Diluted Share | $(1.63) - $(1.53) | | Non-GAAP Earnings per Diluted Share | $3.60 - $3.70 | [Forward-Looking Statements and Risks](index=3&type=section&id=4.2.%20Forward-Looking%20Statements%20and%20Risks) The company's outlook is forward-looking and reflects management's view of current and future market conditions, subject to various risks and uncertainties. These include challenges related to integrating acquisitions, securing government contracts, responding to market demand, competitive pressures, regulatory changes, and general economic conditions - Estimates are forward-looking and reflect management's view of current and future market conditions, subject to certain risks and uncertainties[13](index=13&type=chunk)[19](index=19&type=chunk) - Key risk factors include: the impact of successfully integrating acquisitions (e.g., BlueHalo), reliance on U.S. government sales and funding availability, ability to win R&D and procurement programs, changes in government spending, supply chain disruptions, and compliance with extensive regulatory requirements[13](index=13&type=chunk)[20](index=20&type=chunk) - Other risks involve unexpected technical and marketing difficulties, potential security and cyber threats, failure to innovate or expand into new markets, unexpected changes in operating expenses, and litigation activity[20](index=20&type=chunk) Consolidated Financial Statements [Consolidated Statements of Operations](index=8&type=section&id=5.1.%20Consolidated%20Statements%20of%20Operations) This section presents the detailed breakdown of revenues, costs, and expenses, leading to the net loss for the three months ended August 2, 2025, compared to the prior year, reflecting the significant impact of the BlueHalo acquisition - Provides a comprehensive view of the company's financial performance, detailing product sales, contract services, cost of sales, gross margin, operating expenses (SG&A, R&D), other income/loss, and tax provision, culminating in net income/loss and earnings per share[23](index=23&type=chunk) [Consolidated Balance Sheets](index=9&type=section&id=5.2.%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's assets, liabilities, and stockholders' equity as of August 2, 2025, compared to April 30, 2025, showing significant increases in total assets, goodwill, intangibles, and long-term debt primarily due to the BlueHalo acquisition Consolidated Balance Sheet Highlights | Metric | August 2, 2025 (Thousands) | April 30, 2025 (Thousands) | | :-------------------------- | :------------------------- | :------------------------- | | Total Assets | $5,624,037 | $1,120,567 | | Cash and Cash Equivalents | $685,803 | $40,862 | | Intangibles, net | $1,118,848 | $48,711 | | Goodwill | $2,539,560 | $256,781 | | Total Liabilities | $1,106,958 | $234,061 | | Long-term debt | $725,703 | $30,000 | | Total Stockholders' Equity | $4,427,079 | $886,507 | [Consolidated Statements of Cash Flows](index=10&type=section&id=5.3.%20Consolidated%20Statements%20of%20Cash%20Flows) This section details the cash flows from operating, investing, and financing activities for the three months ended August 2, 2025, highlighting a significant net increase in cash primarily from financing activities related to the BlueHalo acquisition, despite cash used in operating and investing activities Consolidated Statements of Cash Flows Highlights | Metric | Q1 FY2026 (Thousands) | Q1 FY2025 (Thousands) | | :------------------------------------ | :-------------------- | :-------------------- | | Net cash (used in) provided by operating activities | $(123,726) | $28,351 | | Net cash used in investing activities | $(876,648) | $(6,613) | | Net cash provided by financing activities | $1,645,443 | $(13,954) | | Net increase in cash and cash equivalents | $644,941 | $7,861 | | Cash and cash equivalents at end of period | $685,803 | $81,162 | - Business acquisitions, net of cash acquired, accounted for **$(844,580) thousand** in investing activities[27](index=27&type=chunk) - Financing activities included proceeds from shares issued (**$968,515 thousand**) and convertible debt (**$726,944 thousand**)[27](index=27&type=chunk) Reportable Segment Results The report provides segment-level revenue and adjusted EBITDA, showing the significant contribution of the newly acquired Space, Cyber and Directed Energy (SCDE) segment and continued growth in the Autonomous Systems (AxS) segment Q1 FY2026 Segment Revenue | Segment | Revenue (Thousands) | | :------------------------------------ | :------------------ | | Autonomous Systems (AxS) | $285,324 | | Space, Cyber and Directed Energy (SCDE) | $169,352 | | Total | $454,676 | Q1 FY2026 Segment Adjusted EBITDA | Segment | Adjusted EBITDA (Thousands) | | :------------------------------------ | :-------------------------- | | Autonomous Systems (AxS) | $52,760 | | Space, Cyber and Directed Energy (SCDE) | $3,796 | | Total | $56,556 | - In Q1 FY2025, only the AxS segment reported revenue of **$189,483 thousand** and adjusted EBITDA of **$37,178 thousand**, indicating the new contribution from SCDE[29](index=29&type=chunk) Non-GAAP Measures Reconciliation and Explanation [Non-GAAP Earnings per Diluted Share Reconciliation](index=11&type=section&id=7.1.%20Non-GAAP%20Earnings%20per%20Diluted%20Share%20Reconciliation) This section reconciles GAAP diluted EPS to non-GAAP diluted EPS by adjusting for items such as amortization of acquired intangible assets, acquisition-related expenses, and equity method/securities investment activity, providing a clearer view of operational performance Q1 FY2026 Non-GAAP EPS Reconciliation | Item | Per Diluted Share | | :---------------------------------------------------------------- | :---------------- | | (Loss) earnings per diluted share (GAAP) | $(1.44) | | Amortization of acquired intangible assets and other purchase accounting adjustments | $1.34 | | Acquisition-related expenses | $0.52 | | Equity method and equity securities investments activity, net | $(0.10) | | Earnings per diluted share as adjusted (non-GAAP) | $0.32 | - The forecast for FY2026 non-GAAP earnings per diluted share is **$3.60 - $3.70**, adjusted from a forecast GAAP loss per diluted share of **$(1.63) - $(1.53)**[34](index=34&type=chunk) [Non-GAAP Adjusted EBITDA Reconciliation](index=11&type=section&id=7.2.%20Non-GAAP%20Adjusted%20EBITDA%20Reconciliation) This section reconciles GAAP net income/loss to non-GAAP adjusted EBITDA by adding back interest, taxes, depreciation, amortization, stock-based compensation, acquisition-related expenses, and other non-cash items, offering a measure of core operating profitability Q1 FY2026 Non-GAAP Adjusted EBITDA Reconciliation | Item | Amount (Millions) | | :---------------------------------------------------------------- | :---------------- | | Net (loss) income (GAAP) | $(67.4) | | Interest expense, net | $17.4 | | Provision for income taxes | $(15.2) | | Depreciation and amortization | $90.3 | | EBITDA (non-GAAP) | $25.1 | | Amortization of cloud computing arrangement implementation | $0.9 | | Stock-based compensation | $11.4 | | Acquisition-related expenses | $23.7 | | Equity method and equity securities investments activity, net | $(4.5) | | Adjusted EBITDA (non-GAAP) | $56.6 | - The forecast for FY2026 non-GAAP adjusted EBITDA is **$300 - $320 million**, adjusted from a forecast GAAP net loss of **$(77) - $(72) million**[35](index=35&type=chunk) [Statement Regarding Non-GAAP Measures](index=7&type=section&id=7.3.%20Statement%20Regarding%20Non-GAAP%20Measures) The company utilizes non-GAAP measures to provide additional insights into its long-term profitability trends and to facilitate comparisons with prior periods and peers, emphasizing that these measures should be considered supplementary to GAAP and may not be comparable to similarly titled measures reported by other companies - Non-GAAP measures are considered in addition to, not as a replacement for or superior to, comparable GAAP measures[21](index=21&type=chunk)[36](index=36&type=chunk) - Management believes these measures provide useful information by offering additional ways of viewing results, helping investors understand long-term profitability trends and compare performance[36](index=36&type=chunk) - Non-GAAP EPS excludes acquisition-related expenses, intangible amortization, and equity investment activities for consistent comparisons. Adjusted EBITDA is defined as net income before interest, taxes, depreciation, and amortization, adjusted for certain non-cash and non-operating items[37](index=37&type=chunk)[38](index=38&type=chunk) Company Overview [About AeroVironment, Inc.](index=5&type=section&id=8.1.%20About%20AeroVironment,%20Inc.) AeroVironment is a defense technology leader delivering integrated capabilities across air, land, sea, space, and cyber. The company specializes in developing and deploying autonomous systems, precision strike systems, counter-UAS technologies, and other advanced defense solutions to meet current and future mission needs - AeroVironment is a defense technology leader delivering integrated capabilities across air, land, sea, space, and cyber[18](index=18&type=chunk) - The company develops and deploys autonomous systems, precision strike systems, counter-UAS technologies, space-based platforms, directed energy systems, and cyber and electronic warfare capabilities[18](index=18&type=chunk) - Possesses a national manufacturing footprint and a deep innovation pipeline, delivering proven systems and future-defining capabilities with speed, scale, and operational relevance[18](index=18&type=chunk) Investor Information [Conference Call and Presentation](index=3&type=section&id=9.1.%20Conference%20Call%20and%20Presentation) AeroVironment hosted a conference call and webcast on September 9, 2025, to discuss the Q1 FY2026 results, with access details provided for live participation and subsequent replay, along with a supplementary investor presentation - A conference call was hosted on Tuesday, September 9, 2025, at 4:30 pm Eastern Time[14](index=14&type=chunk) - Investors could access the live audio webcast via a participant registration link or the Investor Relations page of the company's website[15](index=15&type=chunk) - A supplementary investor presentation for the first quarter fiscal year 2026 is accessible at https://investor.avinc.com/events-and-presentations, and an audio replay will be archived on the Investor Relations section of the Company's website[16](index=16&type=chunk)[17](index=17&type=chunk) [Contact Information](index=14&type=section&id=9.2.%20Contact%20Information) Contact details for investor relations are provided for further inquiries regarding AeroVironment - Contact Person: Denise Pacioni[40](index=40&type=chunk) - Phone: **+1 805-795-4108**[40](index=40&type=chunk) - Email: ir@avinc.com; Website: https://investor.avinc.com/contact-and-faq/contact-us[40](index=40&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to ___________ Commission File Number 001-14505 KORN FERRY (Exact Name of Registrant as Specified in its Charter) (State or Other Jurisdiction of Inc ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 2025 Or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file number: 0-14939 AMERICA'S CAR-MART, INC. (Exact name of registrant as specified in its charter) Texas 63-0851141 (S ...

PART I FINANCIAL INFORMATION This section presents the Company's unaudited financial statements and management's discussion and analysis [ITEM 1 Financial Statements (Unaudited)](index=3&type=section&id=ITEM%201%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of earnings, comprehensive income, cash flows, and shareholders' equity, along with detailed notes explaining the basis of presentation, significant accounting policies, and specific financial line items for the periods ended August 2, 2025, and August 3, 2024 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the Company's financial position, detailing assets, liabilities, and equity at specific reporting dates Condensed Consolidated Balance Sheets | ($ thousands) | August 2, 2025 | August 3, 2024 | February 1, 2025 | | :-------------- | :------------- | :------------- | :--------------- | | **Assets** | | | | | Cash and cash equivalents | $ 191,494 | $ 51,753 | $ 29,636 | | Total current assets | 1,099,418 | 939,700 | 836,509 | | Total assets | $ 2,152,228 | $ 2,019,985 | $ 1,894,754 | | **Liabilities and Equity** | | | | | Borrowings under revolving credit agreement | $ 387,500 | $ 146,500 | $ 219,500 | | Total current liabilities | 1,015,087 | 860,423 | 757,933 | | Total equity | 621,944 | 613,484 | 605,949 | | Total liabilities and equity | $ 2,152,228 | $ 2,019,985 | $ 1,894,754 | - Cash and cash equivalents **significantly increased** to **$191.5 million** as of August 2, 2025, from **$51.8 million** on August 3, 2024, and **$29.6 million** on February 1, 2025, primarily due to increased borrowings to fund the Stuart Weitzman acquisition[4](index=4&type=chunk) - Total current assets rose to **$1,099.4 million** as of August 2, 2025, from **$939.7 million** on August 3, 2024, and **$836.5 million** on February 1, 2025[4](index=4&type=chunk) - Borrowings under the revolving credit agreement increased to **$387.5 million** as of August 2, 2025, from **$146.5 million** on August 3, 2024, reflecting funding for the Stuart Weitzman acquisition[4](index=4&type=chunk) [Condensed Consolidated Statements of Earnings](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings) This section presents the Company's financial performance over specific periods, detailing net sales, gross profit, operating earnings, and earnings per share Condensed Consolidated Statements of Earnings | ($ thousands, except per share amounts) | Thirteen Weeks Ended Aug 2, 2025 | Thirteen Weeks Ended Aug 3, 2024 | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :--------------------------------- | :------------------------------- | | Net sales | $ 658,519 | $ 683,317 | $ 1,272,740 | $ 1,342,515 | | Gross profit | 285,795 | 310,878 | 564,489 | 619,973 | | Operating earnings | 9,292 | 42,529 | 20,876 | 85,288 | | Net earnings attributable to Caleres, Inc. | $ 6,713 | $ 29,958 | $ 13,656 | $ 60,898 | | Basic EPS | $ 0.20 | $ 0.85 | $ 0.40 | $ 1.73 | | Diluted EPS | $ 0.20 | $ 0.85 | $ 0.40 | $ 1.73 | - Net sales decreased by **3.6%** for the thirteen weeks ended August 2, 2025, and by **5.2%** for the twenty-six weeks ended August 2, 2025, compared to the prior year periods[5](index=5&type=chunk) - Operating earnings saw a **significant decline**, dropping by **78.2%** for the thirteen weeks and **75.5%** for the twenty-six weeks ended August 2, 2025, primarily due to lower net sales, reduced gross profit, and increased restructuring charges[5](index=5&type=chunk) - Diluted EPS decreased from **$0.85** to **$0.20** for the thirteen weeks and from **$1.73** to **$0.40** for the twenty-six weeks ended August 2, 2025, reflecting the overall decline in profitability[5](index=5&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This section outlines comprehensive income, including net earnings and other comprehensive earnings from non-owner sources Condensed Consolidated Statements of Comprehensive Income | ($ thousands) | Thirteen Weeks Ended Aug 2, 2025 | Thirteen Weeks Ended Aug 3, 2024 | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :-------------- | :------------------------------- | :------------------------------- | :--------------------------------- | :------------------------------- | | Net earnings | $ 7,061 | $ 30,273 | $ 13,006 | $ 61,071 | | Other comprehensive earnings, net of tax | 18 | 4,530 | 6,915 | 4,841 | | Comprehensive income | 7,079 | 34,803 | 19,921 | 65,912 | | Comprehensive income attributable to Caleres, Inc. | $ 6,656 | $ 34,606 | $ 20,448 | $ 65,929 | - Comprehensive income attributable to Caleres, Inc. **decreased significantly** to **$6.7 million** for the thirteen weeks ended August 2, 2025, from **$34.6 million** in the prior year, and to **$20.4 million** for the twenty-six weeks, from **$65.9 million** in the prior year[7](index=7&type=chunk) - Other comprehensive earnings, net of tax, **decreased substantially** for the thirteen-week period (from **$4,530k** to **$18k**) but **increased** for the twenty-six-week period (from **$4,841k** to **$6,915k**), primarily driven by foreign currency translation adjustments and pension/postretirement benefit adjustments[7](index=7&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section details cash flows from operating, investing, and financing activities over specific periods Condensed Consolidated Statements of Cash Flows | ($ thousands) | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :-------------- | :--------------------------------- | :------------------------------- | | Net cash provided by operating activities | $ 41,646 | $ 115,696 | | Net cash used for investing activities | (34,072) | (21,808) | | Net cash provided by (used for) financing activities | 154,221 | (63,426) | | Increase in cash and cash equivalents | 161,858 | 30,395 | | Cash and cash equivalents at end of period | $ 191,494 | $ 51,753 | - Net cash provided by operating activities decreased by **$74.0 million** to **$41.6 million** for the twenty-six weeks ended August 2, 2025, compared to **$115.7 million** in the prior year, mainly due to a smaller increase in trade accounts payable, lower net earnings, and a larger increase in inventory[9](index=9&type=chunk)[162](index=162&type=chunk) - Net cash provided by financing activities **significantly increased** to **$154.2 million** for the twenty-six weeks ended August 2, 2025, from a net cash outflow of **$63.4 million** in the prior year, primarily driven by net borrowings on the revolving credit agreement to fund the Stuart Weitzman acquisition[9](index=9&type=chunk)[164](index=164&type=chunk) - Cash and cash equivalents at the end of the period **increased substantially** to **$191.5 million**, up from **$51.8 million** in the prior year, reflecting the increased financing activities[9](index=9&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) This section presents changes in shareholders' equity, including retained earnings and other comprehensive loss Condensed Consolidated Statements of Shareholders' Equity | ($ thousands) | August 2, 2025 | August 3, 2024 | February 1, 2025 | | :-------------- | :------------- | :------------- | :--------------- | | Total Caleres, Inc. shareholders' equity | $ 613,296 | $ 606,062 | $ 599,024 | | Noncontrolling interests | 8,648 | 7,422 | 6,925 | | Total equity | $ 621,944 | $ 613,484 | $ 605,949 | - Total Caleres, Inc. shareholders' equity increased to **$613.3 million** as of August 2, 2025, from **$606.1 million** on August 3, 2024, and **$599.0 million** on February 1, 2025[10](index=10&type=chunk) - Retained earnings increased to **$446.3 million** as of August 2, 2025, from **$451.3 million** on August 3, 2024, and **$442.4 million** on February 1, 2025, reflecting net earnings and dividend payments[10](index=10&type=chunk) - Accumulated other comprehensive loss improved slightly to **$(27.2) million** as of August 2, 2025, from **$(29.5) million** on August 3, 2024, and **$(34.0) million** on February 1, 2025[10](index=10&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the financial statements [Note 1 Basis of Presentation and General](index=8&type=section&id=Note%201%20Basis%20of%20Presentation%20and%20General) This note describes financial statement presentation, accounting policies, and business context, including acquisitions - The Company's business is seasonal, with historically higher earnings in the third fiscal quarter, though recent years show a more equal distribution[13](index=13&type=chunk) - The Company consolidates CLT Brand Solutions, a **50/50** joint venture with Brand Investment Holding Limited for selling footwear in China, on a one-month lag[16](index=16&type=chunk) CLT Brand Solutions Net Sales and Operating Earnings (Loss) | ($ thousands) | Thirteen Weeks Ended Aug 2, 2025 | Thirteen Weeks Ended Aug 3, 2024 | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :-------------- | :------------------------------- | :------------------------------- | :--------------------------------- | :------------------------------- | | Net sales | $ 13,374 | $ 10,098 | $ 20,584 | $ 15,820 | | Operating earnings (loss) | 700 | 688 | (1,296) | 388 | - The Company completed the acquisition of Stuart Weitzman from Tapestry, Inc. on August 4, 2025, for **$120.2 million** (net purchase price **$108.7 million**), which will be included in the Brand Portfolio segment starting Q3 2025[21](index=21&type=chunk) [Note 2 Impact of New Accounting Pronouncements](index=10&type=section&id=Note%202%20Impact%20of%20New%20Accounting%20Pronouncements) This note discusses the potential impact of recently issued accounting standards on financial statements - ASU 2023-09 (Income Taxes) is effective for the Company in fiscal year 2025 and is not expected to have a material impact on financial statement disclosures[22](index=22&type=chunk) - ASU 2024-03 (Disaggregation of Income Statement Expenses) is effective for annual disclosures in fiscal year 2027 and interim periods beginning Q1 2028; the Company is currently evaluating its impact[23](index=23&type=chunk) [Note 3 Revenues](index=11&type=section&id=Note%203%20Revenues) This note disaggregates net sales by channel and segment, with information on loyalty programs and credit losses Disaggregation of Revenues (Thirteen Weeks Ended) | ($ thousands) | August 2, 2025 | August 3, 2024 | | :-------------- | :------------- | :------------- | | Retail stores | $ 364,422 | $ 387,656 | | E-commerce - Company websites | 109,292 | 103,170 | | E-commerce - wholesale drop-ship | 23,166 | 22,520 | | Wholesale - e-commerce | 44,895 | 51,515 | | Wholesale - landed | 103,130 | 92,457 | | Wholesale - first cost | 11,740 | 22,598 | | Licensing and royalty | 1,724 | 3,261 | | Net sales | $ 658,519 | $ 683,317 | Disaggregation of Revenues (Twenty-Six Weeks Ended) | ($ thousands) | August 2, 2025 | August 3, 2024 | | :-------------- | :------------- | :------------- | | Retail stores | $ 662,972 | $ 709,274 | | E-commerce - Company websites | 209,782 | 205,654 | | E-commerce - wholesale drop-ship | 52,798 | 51,542 | | Wholesale - e-commerce | 108,002 | 119,302 | | Wholesale - landed | 213,693 | 211,997 | | Wholesale - first cost | 21,558 | 38,334 | | Licensing and royalty | 3,643 | 6,126 | | Net sales | $ 1,272,740 | $ 1,342,515 | - The loyalty programs liability increased by **$10.7 million** due to points earned and decreased by **$8.9 million** due to expirations and redemptions during the twenty-six weeks ended August 2, 2025[35](index=35&type=chunk) Allowance for Expected Credit Losses Activity (Twenty-Six Weeks Ended) | ($ thousands) | August 2, 2025 | August 3, 2024 | | :-------------- | :------------- | :------------- | | Balance, beginning of period | $ 8,323 | $ 8,820 | | Adjustment for expected credit losses | 2,322 | (769) | | Uncollectible account recoveries, net | 16 | 316 | | Balance, end of period | $ 10,661 | $ 8,367 | [Note 4 Earnings Per Share](index=14&type=section&id=Note%204%20Earnings%20Per%20Share) This note details basic and diluted earnings per share calculations, including share repurchases Earnings Per Share (Thirteen Weeks Ended) | ($ thousands, except per share amounts) | August 2, 2025 | August 3, 2024 | | :-------------------------------------- | :------------- | :------------- | | Net earnings attributable to Caleres, Inc. | $ 6,713 | $ 29,958 | | Basic EPS | $ 0.20 | $ 0.85 | | Diluted EPS | $ 0.20 | $ 0.85 | Earnings Per Share (Twenty-Six Weeks Ended) | ($ thousands, except per share amounts) | August 2, 2025 | August 3, 2024 | | :-------------------------------------- | :------------- | :------------- | | Net earnings attributable to Caleres, Inc. | $ 13,656 | $ 60,898 | | Basic EPS | $ 0.40 | $ 1.73 | | Diluted EPS | $ 0.40 | $ 1.73 | - The Company repurchased **300,000** shares during the twenty-six weeks ended August 2, 2025, and **416,000** shares during the twenty-six weeks ended August 3, 2024, under its share repurchase program[38](index=38&type=chunk) - An immaterial amount of excise taxes were incurred on share repurchases during the twenty-six weeks ended August 2, 2025, and August 3, 2024, as per the Inflation Reduction Act of 2022[39](index=39&type=chunk) [Note 5 Restructuring and Other Special Charges](index=15&type=section&id=Note%205%20Restructuring%20and%20Other%20Special%20Charges) This note outlines restructuring and special charges, including severance and acquisition-related expenses - The Company incurred **$4.5 million** (**$3.3 million** after-tax, or **$0.10** per diluted share) in severance and related costs for expense reduction initiatives during the thirteen weeks ended August 2, 2025[40](index=40&type=chunk) - Legal and other related costs for the Stuart Weitzman acquisition amounted to **$2.3 million** (**$1.7 million** after-tax, or **$0.05** per diluted share) for the thirteen weeks and **$2.9 million** (**$2.1 million** after-tax, or **$0.06** per diluted share) for the twenty-six weeks ended August 2, 2025[41](index=41&type=chunk) [Note 6 Business Segment Information](index=17&type=section&id=Note%206%20Business%20Segment%20Information) This note presents financial information by operating segments, detailing net sales and operating earnings Segment Net Sales and Operating Earnings (Thirteen Weeks Ended) | ($ thousands) | Famous Footwear | Brand Portfolio | Eliminations and Other | Total | | :-------------- | :-------------- | :-------------- | :--------------------- | :---- | | Net sales (Aug 2, 2025) | $ 399,593 | $ 275,620 | $ (16,694) | $ 658,519 | | Operating earnings (loss) (Aug 2, 2025) | $ 18,551 | $ 6,649 | $ (15,908) | $ 9,292 | | Net sales (Aug 3, 2024) | $ 420,289 | $ 285,497 | $ (22,469) | $ 683,317 | | Operating earnings (loss) (Aug 3, 2024) | $ 34,384 | $ 23,620 | $ (15,475) | $ 42,529 | Segment Net Sales and Operating Earnings (Twenty-Six Weeks Ended) | ($ thousands) | Famous Footwear | Brand Portfolio | Eliminations and Other | Total | | :-------------- | :-------------- | :-------------- | :--------------------- | :---- | | Net sales (Aug 2, 2025) | $ 727,269 | $ 571,015 | $ (25,544) | $ 1,272,740 | | Operating earnings (loss) (Aug 2, 2025) | $ 23,525 | $ 24,064 | $ (26,713) | $ 20,876 | | Net sales (Aug 3, 2024) | $ 769,841 | $ 602,708 | $ (30,034) | $ 1,342,515 | | Operating earnings (loss) (Aug 3, 2024) | $ 51,240 | $ 65,045 | $ (30,997) | $ 85,288 | - Famous Footwear's operating earnings decreased by **$15.8 million** (**46%**) for the thirteen weeks and **$27.7 million** (**54%**) for the twenty-six weeks ended August 2, 2025, compared to the prior year[43](index=43&type=chunk)[44](index=44&type=chunk) - Brand Portfolio's operating earnings decreased by **$16.9 million** (**71%**) for the thirteen weeks and **$41.0 million** (**63%**) for the twenty-six weeks ended August 2, 2025, compared to the prior year[43](index=43&type=chunk)[44](index=44&type=chunk) [Note 7 Inventories](index=19&type=section&id=Note%207%20Inventories) This note provides a breakdown of inventory composition, including raw materials, work-in-process, and finished goods Inventory Composition ($ thousands) | Category | August 2, 2025 | August 3, 2024 | February 1, 2025 | | :-------------- | :------------- | :------------- | :--------------- | | Raw materials | $ 15,700 | $ 13,964 | $ 14,352 | | Work-in-process | 751 | 606 | 644 | | Finished goods | 676,831 | 646,576 | 550,245 | | Inventories, net | $ 693,282 | $ 661,146 | $ 565,241 | - Net inventories increased to **$693.3 million** as of August 2, 2025, from **$661.1 million** on August 3, 2024, and **$565.2 million** on February 1, 2025, primarily driven by an increase in finished goods[47](index=47&type=chunk) [Note 8 Goodwill and Intangible Assets](index=19&type=section&id=Note%208%20Goodwill%20and%20Intangible%20Assets) This note details goodwill and intangible assets, including amortization expense and impairment assessments Goodwill and Intangible Assets, Net ($ thousands) | Category | August 2, 2025 | August 3, 2024 | February 1, 2025 | | :-------------- | :------------- | :------------- | :--------------- | | Total intangible assets, net | $ 181,800 | $ 192,836 | $ 187,318 | | Total goodwill | 4,956 | 4,956 | 4,956 | | Goodwill and intangible assets, net | $ 186,756 | $ 197,792 | $ 192,274 | - Total intangible assets, net, decreased to **$181.8 million** as of August 2, 2025, from **$192.8 million** on August 3, 2024, primarily due to accumulated amortization[48](index=48&type=chunk) - Amortization expense for intangible assets was **$2.8 million** for both thirteen-week periods and **$5.5 million** for both twenty-six-week periods[50](index=50&type=chunk) - No goodwill or indefinite-lived intangible asset impairment charges were recorded during the twenty-six weeks ended August 2, 2025, or August 3, 2024[51](index=51&type=chunk)[52](index=52&type=chunk) [Note 9 Leases](index=20&type=section&id=Note%209%20Leases) This note provides information on lease arrangements, including lease expense, right-of-use assets, and obligations - The Company recorded asset impairment charges of **$0.7 million** and **$0.8 million** during the twenty-six weeks ended August 2, 2025, and August 3, 2024, respectively, primarily related to underperforming retail stores[56](index=56&type=chunk) - New or amended leases resulted in the recognition of **$58.6 million** in right-of-use assets and lease obligations during the twenty-six weeks ended August 2, 2025[57](index=57&type=chunk) Lease Expense ($ thousands) | Category | Thirteen Weeks Ended Aug 2, 2025 | Thirteen Weeks Ended Aug 3, 2024 | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :-------------- | :------------------------------- | :------------------------------- | :--------------------------------- | :------------------------------- | | Operating lease expense | $ 41,712 | $ 40,251 | $ 82,289 | $ 80,273 | | Variable lease expense | 10,060 | 10,871 | 21,791 | 21,606 | | Short-term lease expense | 362 | 362 | 506 | 669 | | Total lease expense | $ 52,134 | $ 51,484 | $ 104,586 | $ 102,548 | [Note 10 Financing Arrangements](index=21&type=section&id=Note%2010%20Financing%20Arrangements) This note describes credit facilities, outstanding borrowings, and compliance with financial covenants - The Company amended its revolving credit facility on June 27, 2025, increasing the available amount by **$200.0 million** to **$700.0 million** and extending the maturity to June 27, 2030[60](index=60&type=chunk) - As of August 2, 2025, the Company had **$387.5 million** in borrowings outstanding and **$230.8 million** in additional borrowing availability under the credit agreement[65](index=65&type=chunk) - Borrowings under the revolving credit agreement were used to fund the Stuart Weitzman acquisition, which closed on August 4, 2025[65](index=65&type=chunk) - The Company was in compliance with all covenants and restrictions under the Credit Agreement as of August 2, 2025[64](index=64&type=chunk) [Note 11 Shareholders' Equity](index=24&type=section&id=Note%2011%20Shareholders'%20Equity) This note details changes in shareholders' equity components, particularly accumulated other comprehensive loss Changes in Accumulated Other Comprehensive Loss (OCL) ($ thousands) | Component | Balance at May 3, 2025 | Other comprehensive loss before reclassifications | Net reclassifications | Balance at August 2, 2025 | | :-------------- | :--------------------- | :------------------------------------------------ | :-------------------- | :------------------------ | | Foreign Currency Translation | $ (28) | $ (1,075) | $ — | $ (1,103) | | Pension and Other Postretirement Benefits | $ (27,145) | $ — | $ 1,018 | $ (26,127) | | Total OCL | $ (27,173) | $ (1,075) | $ 1,018 | $ (27,230) | - Accumulated other comprehensive loss slightly increased from **$(27.173) million** at May 3, 2025, to **$(27.230) million** at August 2, 2025, primarily due to foreign currency translation adjustments, partially offset by pension and other postretirement benefit adjustments[67](index=67&type=chunk) [Note 12 Share-Based Compensation](index=24&type=section&id=Note%2012%20Share-Based%20Compensation) This note outlines share-based compensation plans, including expense recognition and awards granted - Share-based compensation expense was **$4.1 million** for the thirteen weeks and **$6.9 million** for the twenty-six weeks ended August 2, 2025[68](index=68&type=chunk) - The Company granted **50,852** restricted shares during the thirteen weeks and **798,915** restricted shares during the twenty-six weeks ended August 2, 2025, with graded vesting over three years[70](index=70&type=chunk) - No performance share awards were granted during the twenty-six weeks ended August 2, 2025, but long-term incentive awards payable in cash were granted with a target value of **$6.7 million** for the 2025-2027 performance period[71](index=71&type=chunk)[72](index=72&type=chunk) - **75,035** RSUs were granted to non-employee directors during the thirteen weeks ended August 2, 2025, including dividend equivalents, with a weighted-average grant date fair value of **$13.18**[75](index=75&type=chunk) [Note 13 Retirement and Other Benefit Plans](index=27&type=section&id=Note%2013%20Retirement%20and%20Other%20Benefit%20Plans) This note provides details on pension and other postretirement benefit plans, including net periodic benefit expense Net Periodic Benefit Expense (Income) ($ thousands) | Component | Pension Benefits (13 Weeks Ended Aug 2, 2025) | Other Postretirement Benefits (13 Weeks Ended Aug 2, 2025) | Pension Benefits (26 Weeks Ended Aug 2, 2025) | Other Postretirement Benefits (26 Weeks Ended Aug 2, 2025) | | :-------------- | :-------------------------------------------- | :--------------------------------------------------------- | :-------------------------------------------- | :--------------------------------------------------------- | | Service cost | $ 1,115 | $ — | $ 2,339 | $ — | | Interest cost | 3,623 | 11 | 7,244 | 24 | | Expected return on assets | (5,561) | — | (11,117) | — | | Amortization of actuarial loss (gain) | 1,378 | (19) | 2,856 | (39) | | Amortization of prior service cost | 12 | — | 19 | — | | Total net periodic benefit expense (income) | $ 567 | $ (8) | $ 1,341 | $ (15) | - Total net periodic pension benefit expense increased to **$567k** for the thirteen weeks and **$1,341k** for the twenty-six weeks ended August 2, 2025, compared to **$491k** and **$902k** in the prior year periods, respectively[76](index=76&type=chunk) - Other postretirement benefits showed a net income of **$(8)k** for the thirteen weeks and **$(15)k** for the twenty-six weeks ended August 2, 2025[76](index=76&type=chunk) [Note 14 Fair Value Measurements](index=27&type=section&id=Note%2014%20Fair%20Value%20Measurements) This note explains the fair value measurement hierarchy and details assets and liabilities measured at fair value - The Company uses a fair value hierarchy (Level 1, 2, 3) to categorize valuation techniques based on input observability[78](index=78&type=chunk)[83](index=83&type=chunk) - Non-qualified deferred compensation plan assets and liabilities, non-qualified restoration plan assets and liabilities, and deferred compensation plan liabilities for non-employee directors are measured at fair value using Level 1 inputs (quoted market prices)[80](index=80&type=chunk)[81](index=81&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) Fair Value Measurements (August 2, 2025) | ($ thousands) | Total | Level 1 | Level 2 | Level 3 | | :-------------- | :---- | :------ | :------ | :------ | | Non-qualified deferred compensation plan assets | $ 11,603 | 11,603 | $ — | $ — | | Non-qualified deferred compensation plan liabilities | (11,603) | (11,603) | — | — | | Non-qualified restoration plan assets | 453 | 453 | — | — | | Non-qualified restoration plan liabilities | (453) | (453) | — | — | | Deferred compensation plan liabilities for non-employee directors | (784) | (784) | — | — | | Restricted stock units for non-employee directors | (820) | (820) | — | — | Long-Lived Asset Impairment Charges ($ thousands) | Segment | Thirteen Weeks Ended Aug 2, 2025 | Thirteen Weeks Ended Aug 3, 2024 | Twenty-Six Weeks Ended Aug 2, 2025 | Twenty-Six Weeks Ended Aug 3, 2024 | | :-------------- | :------------------------------- | :------------------------------- | :--------------------------------- | :------------------------------- | | Famous Footwear | $ 420 | $ 305 | $ 697 | $ 500 | | Brand Portfolio | 5 | 250 | 5 | 300 | | Total | $ 425 | $ 555 | $ 702 | $ 800 | [Note 15 Income Taxes](index=31&type=section&id=Note%2015%20Income%20Taxes) This note details effective tax rates, significant tax benefits, and deferred tax considerations - The consolidated effective tax rate was a benefit of **22.0%** for the thirteen weeks and **8.8%** for the twenty-six weeks ended August 2, 2025, compared to a provision of **25.0%** and **24.0%** for the prior year periods, respectively[93](index=93&type=chunk) - The lower effective tax rate for the current periods was primarily due to a discrete tax benefit of **$2.5 million** from the resolution of the remaining transition tax for mandatory deemed repatriation of foreign earnings[93](index=93&type=chunk) - No deferred taxes have been provided on accumulated unremitted earnings of foreign subsidiaries considered indefinitely reinvested[94](index=94&type=chunk) [Note 16 Commitments and Contingencies](index=31&type=section&id=Note%2016%20Commitments%20and%20Contingencies) This note describes environmental remediation commitments and other legal contingencies - The Company is involved in environmental remediation activities at its Redfield site in Colorado, with cumulative expenditures of **$35.0 million** through August 2, 2025[96](index=96&type=chunk)[98](index=98&type=chunk) - The reserve for anticipated future remediation activities at Redfield is **$8.9 million** as of August 2, 2025, with **$4.5 million** for off-site and **$4.4 million** for on-site remediation[98](index=98&type=chunk) - The Company expects to spend approximately **$0.1 million** in 2025, **$0.1 million** in each of the following four years, and **$12.0 million** thereafter for on-site remediation[98](index=98&type=chunk) - Management believes the outcome of ordinary course legal proceedings and litigation will not have a material adverse effect on the Company's results of operations or financial position[101](index=101&type=chunk) [ITEM 2 Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=ITEM%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial performance, condition, and results of operations for the second quarter and first six months of fiscal year 2025, discussing key trends, financial highlights, segment performance, liquidity, and capital resources [OVERVIEW](index=34&type=section&id=OVERVIEW) This section summarizes the Company's business, key financial results, macroeconomic impacts, and acquisitions - The Company is a global footwear company operating retail stores, e-commerce websites, and designing, developing, sourcing, manufacturing, and distributing footwear[103](index=103&type=chunk) - Macroeconomic factors, including lighter consumer traffic and tariff volatility, negatively impacted Q2 2025 financial results, with tariffs estimated to have a **$10 million** negative impact on net sales due to factory order cancellations and delayed receipts[104](index=104&type=chunk) - Restructuring actions in Q2 2025 are expected to decrease selling and administrative expenses by approximately **$15 million** on an annualized basis[104](index=104&type=chunk) - The Company's liquidity position remains strong with **$191.5 million** in cash and cash equivalents and **$230.8 million** in excess availability on its revolving credit agreement as of August 2, 2025[105](index=105&type=chunk) - The acquisition of Stuart Weitzman was completed on August 4, 2025, for **$120.2 million**, funded by the revolving credit agreement, strengthening the Company's position in luxury footwear[106](index=106&type=chunk) [Financial Highlights](index=35&type=section&id=Financial%20Highlights) This section presents a concise summary of the Company's key consolidated financial performance metrics Consolidated Financial Highlights (Thirteen Weeks Ended) | Metric | August 2, 2025 | August 3, 2024 | Change ($) | Change (%) | | :-------------- | :------------- | :------------- | :--------- | :--------- | | Consolidated net sales | $658.5 | $683.3 | ($24.8) | (3.6)% | | Famous Footwear segment net sales | $399.6 | $420.3 | ($20.7) | (4.9)% | | Famous Footwear comparable sales % change | (3.4)% | (2.9)% | n/m | n/m | | Brand Portfolio segment net sales | $275.6 | $285.5 | ($9.9) | (3.5)% | | Gross profit | $285.8 | $310.9 | ($25.1) | (8.1)% | | Gross margin | 43.4 % | 45.5 % | n/m | (210 bps) | | Operating earnings | $9.3 | $42.5 | ($33.2) | (78.2)% | | Diluted earnings per share | $0.20 | $0.85 | ($0.65) | (76.5)% | - Consolidated net sales decreased by **3.6%** to **$658.5 million**, and operating earnings plummeted by **78.2%** to **$9.3 million** for the second quarter of 2025[107](index=107&type=chunk) - Gross margin declined by **210 basis points** to **43.4%** in Q2 2025, primarily due to lower merchandise margins from tariffs and higher inventory markdowns[107](index=107&type=chunk) [Metrics Used in the Evaluation of Our Business](index=35&type=section&id=Metrics%20Used%20in%20the%20Evaluation%20of%20Our%20Business) This section defines key operational and financial metrics used by management to assess business performance - Comparable sales measure revenue for stores open over a year, including e-commerce sales that extend a retail chain, and are used to assess existing store performance[108](index=108&type=chunk) - Sales per square foot evaluate sales efficiency based on retail store square footage in North America, excluding e-commerce and the China joint venture[109](index=109&type=chunk) - Direct-to-consumer sales, including retail stores, company websites, and drop-ship sales, are monitored for their higher gross margin and ability to reinforce brand image and consumer connection[110](index=110&type=chunk) [CONSOLIDATED RESULTS](index=36&type=section&id=CONSOLIDATED%20RESULTS) This section analyzes overall financial performance, including net sales, gross profit, operating earnings, and net earnings Consolidated Results Summary ($ millions) | Metric | 13 Weeks Ended Aug 2, 2025 | % of Net Sales | 13 Weeks Ended Aug 3, 2024 | % of Net Sales | 26 Weeks Ended Aug 2, 2025 | % of Net Sales | 26 Weeks Ended Aug 3, 2024 | % of Net Sales | | :-------------- | :------------------------- | :------------- | :------------------------- | :------------- | :------------------------- | :------------- | :------------------------- | :------------- | | Net sales | $ 658.5 | 100.0 % | $ 683.3 | 100.0 % | $ 1,272.7 | 100.0 % | $ 1,342.5 | 100.0 % | | Gross profit | 285.8 | 43.4 % | 310.9 | 45.5 % | 564.5 | 44.4 % | 620.0 | 46.2 % | | Selling and administrative expenses | 269.7 | 40.9 % | 268.4 | 39.3 % | 536.2 | 42.1 % | 534.7 | 39.8 % | | Restructuring and other special charges, net | 6.8 | 1.1 % | — | — % | 7.4 | 0.6 % | — | — % | | Operating earnings | 9.3 | 1.4 % | 42.5 | 6.2 % | 20.9 | 1.7 % | 85.3 | 6.4 % | | Net earnings attributable to Caleres, Inc. | $ 6.7 | 1.0 % | $ 30.0 | 4.4 % | $ 13.7 | 1.1 % | $ 60.9 | 4.5 % | - Consolidated net sales decreased by **$24.8 million** (**3.6%**) for the second quarter and **$69.8 million** (**5.2%**) for the first six months of 2025, with declines in both Famous Footwear and Brand Portfolio segments[113](index=113&type=chunk)[114](index=114&type=chunk) - Gross profit decreased by **$25.1 million** (**8.1%**) for the second quarter and **$55.5 million** (**8.9%**) for the first six months of 2025, with gross margin declining due to tariffs, higher inventory markdowns, and increased freight costs[115](index=115&type=chunk)[116](index=116&type=chunk) - Selling and administrative expenses increased slightly, but as a percentage of net sales, they rose to **40.9%** (Q2) and **42.1%** (YTD) due to deleveraging on lower sales, higher retail facilities costs, and increased marketing/IT expenses[118](index=118&type=chunk)[119](index=119&type=chunk) - Operating earnings **significantly decreased** by **$33.2 million** (**78.2%**) for the second quarter and **$64.4 million** (**75.5%**) for the first six months of 2025, primarily due to lower sales, reduced gross profit, and restructuring charges[121](index=121&type=chunk)[122](index=122&type=chunk) - Interest expense, net, increased by **$1.2 million** (**36.3%**) for the second quarter and **$1.2 million** (**16.8%**) for the first six months of 2025, reflecting higher average borrowings on the revolving credit facility, particularly for the Stuart Weitzman acquisition[123](index=123&type=chunk) - The effective tax rate was a benefit of **22.0%** for Q2 2025 and **8.8%** for the first six months, driven by a **$2.5 million** discrete tax benefit related to foreign earnings repatriation[125](index=125&type=chunk) [FAMOUS FOOTWEAR](index=40&type=section&id=FAMOUS%20FOOTWEAR) This section analyzes Famous Footwear segment performance, detailing net sales, operating earnings, and comparable sales Famous Footwear Segment Performance ($ millions, except sales per square foot) | Metric | 13 Weeks Ended Aug 2, 2025 | % of Net Sales | 13 Weeks Ended Aug 3, 2024 | % of Net Sales | 26 Weeks Ended Aug 2, 2025 | % of Net Sales | 26 Weeks Ended Aug 3, 2024 | % of Net Sales | | :-------------- | :------------------------- | :------------- | :------------------------- | :------------- | :------------------------- | :------------- | :------------------------- | :------------- | | Net sales | $ 399.6 | 100.0 % | $ 420.3 | 100.0 % | $ 727.3 | 100.0 % | $ 769.8 | 100.0 % | | Gross profit | 174.7 | 43.7 % | 189.3 | 45.0 % | 323.1 | 44.4 % | 350.3 | 45.5 % | | Selling and administrative expenses | 156.0 | 39.1 % | 154.9 | 36.8 % | 299.5 | 41.2 % | 299.1 | 38.8 % | | Operating earnings | $ 18.6 | 4.6 % | $ 34.4 | 8.2 % | $ 23.5 | 3.2 % | $ 51.2 | 6.7 % | | Comparable sales % change | (3.4)% | | (2.9)% | | (3.9)% | | (2.6)% | | | Ending stores | 830 | | 855 | | 830 | | 855 | | - Famous Footwear net sales decreased by **4.9%** for Q2 2025 and **5.5%** for the first six months, with comparable sales declining **3.4%** and **3.9%** respectively, primarily due to reduced consumer traffic[130](index=130&type=chunk)[132](index=132&type=chunk) - E-commerce sales penetration increased to **14%** of net sales in Q2 2025, and the launch of the Jordan brand contributed to a strong back-to-school season[130](index=130&type=chunk) - Gross profit margin decreased to **43.7%** for Q2 2025 and **44.4%** for the first six months, driven by higher promotional activity and increased freight costs[133](index=133&type=chunk)[134](index=134&type=chunk) - Operating earnings decreased by **$15.8 million** (**46%**) for Q2 2025 and **$27.7 million** (**54%**) for the first six months, reflecting lower sales, reduced gross profit, and increased selling and administrative expenses[138](index=138&type=chunk)[139](index=139&type=chunk) - The segment ended Q2 2025 with **830** stores, having opened **2** and closed **7** during the quarter, and converted **21** stores to the FLAIR concept during the first half of 2025, which continue to outperform traditional stores[131](index=131&type=chunk)[132](index=132&type=chunk)[135](index=135&type=chunk) [BRAND PORTFOLIO](index=42&type=section&id=BRAND%20PORTFOLIO) This section analyzes Brand Portfolio segment performance, detailing net sales, operating earnings, and direct-to-consumer sales Brand Portfolio Segment Performance ($ millions) | Metric | 13 Weeks Ended Aug 2, 2025 | % of Net Sales | 13 Weeks Ended Aug 3, 2024 | % of Net Sales | 26 Weeks Ended Aug 2, 2025 | % of Net Sales | 26 Weeks Ended Aug 3, 2024 | % of Net Sales | | :-------------- | :------------------------- | :------------- | :------------------------- | :------------- | :------------------------- | :------------- | :------------------------- | :------------- | | Net sales | $ 275.6 | 100.0 % | $ 285.5 | 100.0 % | $ 571.0 | 100.0 % | $ 602.7 | 100.0 % | | Gross profit | 111.1 | 40.3 % | 121.9 | 42.7 % | 240.3 | 42.1 % | 269.7 | 44.7 % | | Selling and administrative expenses | 102.6 | 37.2 % | 98.3 | 34.4 % | 214.5 | 37.6 % | 204.7 | 33.9 % | | Operating earnings | $ 6.7 | 2.4 % | $ 23.6 | 8.3 % | $ 24.0 | 4.3 % | $ 65.0 | 10.8 % | | Direct-to-consumer (% of net sales) | 36 % | | 33 % | | 35 % | | 33 % | | | Unfilled order position at end of period | $ 244.2 | | $ 251.6 | | | | | | - Brand Portfolio net sales decreased by **3.5%** for Q2 2025 and **5.3%** for the first six months, primarily due to soft consumer demand and cautious wholesale buying, with tariffs negatively impacting Q2 net sales by an estimated **$10 million**[141](index=141&type=chunk)[142](index=142&type=chunk) - Direct-to-consumer sales increased to **36%** of net sales in Q2 2025, up from **33%** in the prior year[141](index=141&type=chunk) - Gross profit margin decreased to **40.3%** for Q2 2025 and **42.1%** for the first six months, driven by tariff impacts, higher inventory markdowns, and costs associated with moving inventory out of China[144](index=144&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk) - Operating earnings decreased to **$6.7 million** for Q2 2025 (from **$23.6 million**) and **$24.0 million** for the first six months (from **$65.0 million**), reflecting lower sales, reduced gross profit, and increased selling and administrative expenses[150](index=150&type=chunk)[151](index=151&type=chunk) - The segment expanded its international presence, with **118** stores in East Asia and **145** international franchise locations as of August 2, 2025[141](index=141&type=chunk) [ELIMINATIONS AND OTHER](index=43&type=section&id=ELIMINATIONS%20AND%20OTHER) This section explains the financial impact of intersegment eliminations and unallocated corporate expenses Eliminations and Other Operating Loss ($ millions) | Metric | 13 Weeks Ended Aug 2, 2025 | % of Net Sales | 13 Weeks Ended Aug 3, 2024 | % of Net Sales | 26 Weeks Ended Aug 2, 2025 | % of Net Sales | 26 Weeks Ended Aug 3, 2024 | % of Net Sales | | :-------------- | :------------------------- | :------------- | :------------------------- | :------------- | :------------------------- | :------------- | :------------------------- | :------------- | | Net sales | $ (16.7) | 100.0 % | $ (22.5) | 100.0 % | $ (25.5) | 100.0 % | $ (30.0) | 100.0 % | | Operating loss | $ (15.9) | 95.2 % | $ (15.5) | 68.9 % | $ (26.7) | 104.8 % | $ (31.0) | 103.2 % | - Net sales elimination decreased by **$5.8 million** (**25.8%**) for Q2 2025 and **$4.5 million** (**14.9%**) for the first six months, reflecting a decrease in intersegment product sales from Brand Portfolio to Famous Footwear[153](index=153&type=chunk) - Selling and administrative expenses decreased by **$4.1 million** for Q2 2025 and **$8.7 million** for the first six months, primarily due to lower expenses related to cash and share-based incentive compensation[154](index=154&type=chunk)[155](index=155&type=chunk) - Restructuring and other special charges of **$4.8 million** for Q2 2025 and **$5.5 million** for the first six months were recorded for expense reduction initiatives and Stuart Weitzman acquisition costs[156](index=156&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=45&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses cash flow, debt obligations, borrowing capacity, and working capital, highlighting funds - Total debt obligations increased by **$241.0 million** to **$387.5 million** at August 2, 2025, from **$146.5 million** at August 3, 2024, primarily to fund the Stuart Weitzman acquisition[158](index=158&type=chunk) - The Company had **$230.8 million** in additional borrowing availability under its **$700.0 million** revolving credit facility as of August 2, 2025, and was in compliance with all covenants[157](index=157&type=chunk)[159](index=159&type=chunk) Cash Flow Summary ($ millions) | ($ millions) | August 2, 2025 | August 3, 2024 | Change ($) | | :----------- | :------------- | :------------- | :--------- | | Net cash provided by operating activities | $ 41.7 | $ 115.7 | $ (74.0) | | Net cash used for investing activities | (34.1) | (21.8) | (12.3) | | Net cash provided by (used for) financing activities | 154.2 | (63.4) | 217.6 | | Increase in cash and cash equivalents | $ 161.9 | $ 30.4 | $ 131.5 | - Working capital increased by **$5.0 million** from August 3, 2024, to **$84.3 million** at August 2, 2025, driven by higher cash, lower trade accounts payable, and higher inventory, partially offset by increased borrowings[167](index=167&type=chunk) - The debt-to-capital ratio increased to **38.4%** as of August 2, 2025, from **19.3%** at August 3, 2024[167](index=167&type=chunk) - The Company declared and paid dividends of **$0.07** per share in Q2 2025 and expects to continue dividend payments[168](index=168&type=chunk) [CRITICAL ACCOUNTING POLICIES AND ESTIMATES](index=46&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) This section confirms no material changes to critical accounting policies and estimates since the last fiscal year - No material changes have occurred related to critical accounting policies and estimates since the end of the most recent fiscal year (February 1, 2025)[170](index=170&type=chunk) [RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS](index=46&type=section&id=RECENTLY%20ISSUED%20ACCOUNTING%20PRONOUNCEMENTS) This section refers to detailed information on new accounting pronouncements in the financial statements notes - Information on recently issued accounting pronouncements and their impact is detailed in Note 2 to the condensed consolidated financial statements[171](index=171&type=chunk) [FORWARD-LOOKING STATEMENTS](index=47&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section cautions about forward-looking statements, outlining risks and uncertainties affecting future results - The report contains forward-looking statements subject to various risks and uncertainties, including changes in trade policies, consumer demands, inflation, supply chain disruptions, and intense competition[172](index=172&type=chunk) - The Company does not undertake any obligation to update these forward-looking statements[172](index=172&type=chunk) [ITEM 3 Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=ITEM%203%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there have been no material changes in quantitative and qualitative disclosures about market risk since the end of the most recent fiscal year - No material changes have occurred in the quantitative and qualitative information about market risk since the end of the most recent fiscal year (February 1, 2025)[173](index=173&type=chunk) [ITEM 4 Controls and Procedures](index=47&type=section&id=ITEM%204%20Controls%20and%20Procedures) This section details the evaluation of the Company's disclosure controls and procedures, concluding that they were effective at a reasonable assurance level as of August 2, 2025, with no material changes to internal controls over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective at the reasonable assurance level as of August 2, 2025[175](index=175&type=chunk) - No changes in internal controls over financial reporting materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting during the quarter ended August 2, 2025[177](index=177&type=chunk) PART II OTHER INFORMATION This section provides additional information not in financial statements, covering legal, risks, equity, and exhibits [ITEM 1 Legal Proceedings](index=49&type=section&id=ITEM%201%20Legal%20Proceedings) This section states that the Company is involved in ordinary course legal proceedings and litigation, but management does not expect their outcome to have a material adverse effect on financial results or position - Management believes the outcome of legal proceedings and litigation arising in the ordinary course of business will not have a material adverse effect on the Company's results of operations or financial position[178](index=178&type=chunk) [ITEM 1A Risk Factors](index=49&type=section&id=ITEM%201A%20Risk%20Factors) This section highlights material changes to risk factors, specifically emphasizing the adverse impact of changes in U.S. and international trade policies, including tariffs, on the Company's business, results of operations, and financial condition - Changes in U.S. and international trade policies, including tariffs, trade restrictions, and retaliatory actions, may adversely impact the Company's business, results of operations, and financial condition[181](index=181&type=chunk) - Tariffs negatively impacted net sales and gross margins in the Brand Portfolio segment during Q2 2025, and the uncertainty surrounding future tariff policies poses a **significant risk**[181](index=181&type=chunk) - The Company is implementing strategies to mitigate tariff effects, such as shifting production and negotiating with suppliers, but there is no assurance these measures will be successful[181](index=181&type=chunk) [ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=ITEM%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section provides information on common stock repurchases during the second quarter of 2025, noting that no shares were repurchased under the publicly announced program during the thirteen weeks ended August 2, 2025, but 300,000 shares were repurchased during the twenty-six weeks Common Stock Repurchases (Second Quarter 2025) | Fiscal Period | Total Number of Shares Purchased | Average Price Paid per Share | | :---------------------- | :------------------------------- | :--------------------------- | | May 4, 2025 - May 31, 2025 | 14,739 | $ 16.49 | | June 1, 2025 - July 5, 2025 | 1,535 | $ 13.30 | | July 6, 2025 - August 2, 2025 | — | — | | Total | 16,274 | $ 16.19 | - No shares were repurchased under the 2022 Program during the thirteen weeks ended August 2, 2025, but **300,000** shares were repurchased during the twenty-six weeks ended August 2, 2025[184](index=184&type=chunk) - As of August 2, 2025, **3,366,055** shares remained authorized for repurchase under the 2022 Program[184](index=184&type=chunk) [ITEM 3 Defaults Upon Senior Securities](index=50&type=section&id=ITEM%203%20Defaults%20Upon%20Senior%20Securities) This section indicates that there were no defaults upon senior securities - There were no defaults upon senior securities[185](index=185&type=chunk) [ITEM 4 Mine Safety Disclosures](index=50&type=section&id=ITEM%204%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the Company - Mine safety disclosures are not applicable to the Company[186](index=186&type=chunk) [ITEM 5 Other Information](index=50&type=section&id=ITEM%205%20Other%20Information) This section reports on Director and Section 16 Officer trading arrangements, specifically noting the termination of a Rule 10b5-1 plan by Daniel Friedman, Chief Sourcing Officer, on July 8, 2025 - Daniel Friedman, Chief Sourcing Officer, terminated a Rule 10b5-1 plan on July 8, 2025, which had provided for the sale of up to **16,782** shares[187](index=187&type=chunk) - No other director or Section 16 officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the thirteen weeks ended August 2, 2025[188](index=188&type=chunk) [ITEM 6 Exhibits](index=51&type=section&id=ITEM%206%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including agreements related to the Stuart Weitzman acquisition, corporate governance documents, credit agreements, and certifications - Key exhibits include the Sale and Purchase Agreement for Stuart Weitzman, the Seventh Amendment to the Fourth Amended and Restated Credit Agreement, and certifications from the CEO and CFO[189](index=189&type=chunk) [Signature](index=52&type=section&id=Signature) This section contains the signature of the Company's Principal Financial Officer, Jack P. Calandra, certifying the filing of the report - The report was signed by Jack P. Calandra, Senior Vice President and Chief Financial Officer, on September 9, 2025[193](index=193&type=chunk)

[Part I. FINANCIAL INFORMATION](index=3&type=section&id=Part%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's unaudited condensed consolidated financial statements and accompanying notes are presented [Unaudited Condensed Consolidated Balance Sheets](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets%20%E2%80%93%20July%2031%2C%202025%20and%20January%2031%2C%202025) **Condensed Consolidated Balance Sheet Highlights (in thousands)** | Item | July 31, 2025 | January 31, 2025 | | :--- | :--- | :--- | | Total Assets | $143,149 | $145,595 | | Total Liabilities | $67,363 | $69,845 | | Total Shareholders' Equity | $75,786 | $75,750 | | Cash and Cash Equivalents | $3,855 | $5,050 | | Accounts Receivable, net | $18,535 | $21,218 | | Inventories, net | $48,393 | $47,894 | | Revolving Line of Credit | $19,079 | $20,929 | | Long-Term Debt, net of current portion | $18,566 | $19,044 | [Unaudited Condensed Consolidated Statements of Income (Loss)](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)%20%E2%80%93%20Three%20and%20Six%20Months%20Ended%20July%2031%2C%202025%20and%20August%203%2C%202024) **Condensed Consolidated Statements of Income (Loss) (in thousands, except per share data)** | Item | Three Months Ended July 31, 2025 | Three Months Ended August 3, 2024 | Six Months Ended July 31, 2025 | Six Months Ended August 3, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $36,102 | $40,539 | $73,810 | $73,500 | | Gross Profit | $11,633 | $14,326 | $24,286 | $26,298 | | Operating Income (Loss) | $(708) | $1,061 | $(135) | $2,407 | | Net Income (Loss) | $(1,243) | $(311) | $(1,619) | $869 | | Net Income (Loss) per Common Share—Diluted | $(0.16) | $(0.04) | $(0.21) | $0.11 | [Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20%E2%80%93%20Three%20and%20Six%20Months%20Ended%20July%2031%2C%202025%20and%20August%203%2C%202024) **Condensed Consolidated Statements of Comprehensive Income (Loss) (in thousands)** | Item | Three Months Ended July 31, 2025 | Three Months Ended August 3, 2024 | Six Months Ended July 31, 2025 | Six Months Ended August 3, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) | $(1,243) | $(311) | $(1,619) | $869 | | Foreign Currency Translation Adjustments | $47 | $343 | $1,022 | $146 | | Comprehensive Income (Loss) | $(1,196) | $32 | $(597) | $1,015 | [Unaudited Condensed Consolidated Statements of Changes in Shareholders' Equity](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity%20%E2%80%93%20Three%20and%20Six%20Months%20Ended%20July%2031%2C%202025%20and%20August%203%2C%202024) **Changes in Shareholders' Equity (in thousands)** | Item | January 31, 2025 | July 31, 2025 | | :--- | :--- | :--- | | Common Stock | $547 | $552 | | Additional Paid-in Capital | $64,215 | $65,023 | | Retained Earnings | $49,380 | $47,761 | | Treasury Stock | $(35,043) | $(35,223) | | Accumulated Other Comprehensive Loss | $(3,349) | $(2,327) | | **Total Shareholders' Equity** | **$75,750** | **$75,786** | - Retained Earnings decreased by **$1,619 thousand** from January 31, 2025, to July 31, 2025, primarily due to net losses incurred during the period[15](index=15&type=chunk) - Accumulated Other Comprehensive Loss improved by **$1,022 thousand**, mainly driven by foreign currency translation adjustments[15](index=15&type=chunk)[99](index=99&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20%E2%80%93%20Six%20Months%20Ended%20July%2031%2C%202025%20and%20August%203%2C%202024) **Condensed Consolidated Statements of Cash Flows (in thousands)** | Cash Flow Activity | Six Months Ended July 31, 2025 | Six Months Ended August 3, 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $4,644 | $7,066 | | Net Cash Used for Investing Activities | $(107) | $(21,559) | | Net Cash Provided by (Used for) Financing Activities | $(5,968) | $14,576 | | Net (Decrease) Increase in Cash and Cash Equivalents | $(1,195) | $297 | | Cash and Cash Equivalents, End of Period | $3,855 | $4,824 | - Net cash used for investing activities **significantly decreased in 2025** due to the absence of a major acquisition like MTEX, which occurred in 2024[18](index=18&type=chunk) - Net cash provided by operating activities **decreased by $2,422 thousand**, primarily due to a shift from net income to net loss and a decrease in cash provided by working capital[18](index=18&type=chunk)[194](index=194&type=chunk) [Notes to the Condensed Consolidated Financial Statements (unaudited)](index=8&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) [Note 1 – Business and Basis of Presentation](index=8&type=section&id=Note%201%20%E2%80%93%20Business%20and%20Basis%20of%20Presentation) - AstroNova, Inc operates in two segments: **Product Identification (Product ID)** and **Aerospace** (formerly Test & Measurement)[21](index=21&type=chunk) - The Test & Measurement segment was renamed "Aerospace" effective February 1, 2025, to better reflect its end markets, with no change to segment composition[21](index=21&type=chunk) - The company acquired MTEX New Solution, S.A on May 6, 2024, integrating its digital printing equipment into the Product ID segment[23](index=23&type=chunk) - Product ID segment revenue is approximately **20% hardware sales** and **80% recurring supplies**, parts, and service revenue[24](index=24&type=chunk) - Aerospace segment revenue is approximately **57% hardware sales** and **43% recurring supplies**, parts, and service revenue[26](index=26&type=chunk) [Note 2 – Summary of Significant Accounting Policies Update](index=9&type=section&id=Note%202%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies%20Update) - The accounting policies remain consistent with the Annual Report on Form 10-K for the fiscal year ended January 31, 2025[32](index=32&type=chunk) - ASU 2024-03 (Expense Disaggregation Disclosures) and ASU 2023-09 (Improvements to Income Tax Disclosures) are **not expected to have a material impact** on consolidated financial statements or disclosures upon adoption[33](index=33&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) [Note 3 – Acquisition](index=10&type=section&id=Note%203%20%E2%80%93%20Acquisition) - AstroNova acquired MTEX New Solution, S.A on May 6, 2024, for a final purchase price of **$19,473 thousand**[37](index=37&type=chunk)[39](index=39&type=chunk) **Final Purchase Price Allocation of MTEX Acquisition (in thousands)** | Item | Amount | | :--- | :--- | | Cash | $364 | | Accounts Receivable | $1,212 | | Inventory | $3,607 | | Property, Plant and Equipment | $4,802 | | Identifiable Intangible Assets | $7,539 | | Goodwill | $14,279 | | Accounts Payable and Other Current Liabilities | $(6,095) | | Debt Assumed | $(7,918) | | Other Long-Term Liabilities | $(4,826) | | **Total Purchase Price** | **$19,473** | - Goodwill of **$14.3 million** was recognized, allocated to the Product ID segment, and is not deductible for tax purposes[43](index=43&type=chunk) **MTEX Financial Results Included in Consolidated Statements of Income (Loss) (in thousands)** | Item | Three Months Ended July 31, 2025 | Six Months Ended July 31, 2025 | | :--- | :--- | :--- | | Revenue | $711 | $2,114 | | Gross Profit | $(522) | $(403) | | Operating Loss | $(1,879) | $(2,796) | | Earnings (Loss) before Taxes | $(47) | $(1,103) | [Note 4 – Revenue Recognition](index=13&type=section&id=Note%204%20%E2%80%93%20Revenue%20Recognition) - Revenue is derived from the sale of hardware, related supplies, repairs and maintenance, and service agreements[49](index=49&type=chunk) **Revenue by Major Product Type (in thousands)** | Product Type | Six Months Ended July 31, 2025 | Six Months Ended August 3, 2024 | % Change | | :--- | :--- | :--- | :--- | | Hardware | $22,231 | $21,234 | 4.7% | | Supplies | $40,576 | $40,977 | (1.0)% | | Service and Other | $11,003 | $11,289 | (2.5)% | | **Total Revenue** | **$73,810** | **$73,500** | **0.4%** | - Deferred revenue increased to **$1,459 thousand** at July 31, 2025, from $543 thousand at January 31, 2025, including a $1.1 million advance payment for an Aerospace product line[9](index=9&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) [Note 5 – Net Income (Loss) Per Common Share](index=14&type=section&id=Note%205%20%E2%80%93%20Net%20Income%20(Loss)%20Per%20Common%20Share) **Net Income (Loss) per Common Share** | Item | Three Months Ended July 31, 2025 | Six Months Ended July 31, 2025 | | :--- | :--- | :--- | | Net Income (Loss) per Common Share—Basic | $(0.16) | $(0.21) | | Net Income (Loss) per Common Share—Diluted | $(0.16) | $(0.21) | - Weighted average common stock equivalent shares of 38,232 (three months) and 51,130 (six months) were **excluded from diluted EPS computation** for July 31, 2025, due to their anti-dilutive effect given the net loss[55](index=55&type=chunk) [Note 6 – Intangible Assets](index=15&type=section&id=Note%206%20%E2%80%93%20Intangible%20Assets) **Intangible Assets, Net (in thousands)** | Item | July 31, 2025 | January 31, 2025 | | :--- | :--- | :--- | | Intangible Assets, net | $22,729 | $23,519 | - Amortization expense for acquired intangible assets was **$1.4 million** for the six months ended July 31, 2025[59](index=59&type=chunk) **Estimated Amortization Expense for Next Five Fiscal Years (in thousands)** | Fiscal Year | Estimated Amortization Expense | | :--- | :--- | | 2026 | $1,439 | | 2027 | $2,878 | | 2028 | $2,376 | | 2029 | $2,009 | | 2030 | $2,009 | [Note 7 – Inventories](index=15&type=section&id=Note%207%20%E2%80%93%20Inventories) **Inventories, Net (in thousands)** | Item | July 31, 2025 | January 31, 2025 | | :--- | :--- | :--- | | Materials and Supplies | $32,839 | $35,181 | | Work-In-Process | $2,602 | $2,559 | | Finished Goods | $22,401 | $19,879 | | Inventory Reserve | $(9,449) | $(9,725) | | **Total Inventories, net** | **$48,393** | **$47,894** | [Note 8 – Property, Plant and Equipment](index=16&type=section&id=Note%208%20%E2%80%93%20Property%2C%20Plant%20and%20Equipment) **Net Property, Plant and Equipment (in thousands)** | Item | July 31, 2025 | January 31, 2025 | | :--- | :--- | :--- | | Gross Property, Plant and Equipment | $63,094 | $62,361 | | Accumulated Depreciation | $(46,076) | $(44,722) | | **Net Property, Plant and Equipment** | **$17,018** | **$17,639** | - Depreciation expense on property, plant and equipment was **$1.1 million** for the six months ended July 31, 2025[62](index=62&type=chunk) [Note 9 – Credit Agreement and Long-Term Debt](index=16&type=section&id=Note%209%20%E2%80%93%20Credit%20Agreement%20and%20Long-Term%20Debt) - The company entered into a **Fourth Amendment** to its credit agreement on March 20, 2025, modifying Term Loan repayment terms and interest rate margins[65](index=65&type=chunk)[66](index=66&type=chunk)[72](index=72&type=chunk) - As of July 31, 2025, the company was **not in compliance** with the minimum consolidated fixed charge coverage ratio but received a waiver via a Fifth Amendment on September 8, 2025[76](index=76&type=chunk)[217](index=217&type=chunk) **Summary of Outstanding Debt (in thousands)** | Debt Type | July 31, 2025 | January 31, 2025 | | :--- | :--- | :--- | | USD Term Loan | $8,800 | $9,450 | | Euro Term Loan | $12,667 | $12,719 | | MTEX Euro Term Loan | $1,590 | $1,514 | | MTEX Euro Government Grant Term Loan | $561 | $876 | | Equipment Loan | $605 | $680 | | **Total Debt** | **$24,223** | **$25,239** | | Revolving Line of Credit (Current Liability) | $19,079 | $20,929 | - As of July 31, 2025, **$5.9 million remained available** for borrowing under the revolving credit facility[82](index=82&type=chunk) [Note 10 – Financial Instruments and Risk Management](index=19&type=section&id=Note%2010%20%E2%80%93%20Financial%20Instruments%20and%20Risk%20Management) - The company uses foreign currency-denominated debt to partially hedge its net investment in European operations, specifically in its German operation as of January 31, 2025[85](index=85&type=chunk) - A foreign currency translation gain of **$1,022 thousand** was recognized in Other Comprehensive Income for the six months ended July 31, 2025[14](index=14&type=chunk)[99](index=99&type=chunk) [Note 11 – Royalty Obligation](index=20&type=section&id=Note%2011%20%E2%80%93%20Royalty%20Obligation) - As of July 31, 2025, **$13.5 million** of the $15.0 million guaranteed minimum royalty obligation with Honeywell has been paid[87](index=87&type=chunk) - The remaining guaranteed minimum royalty obligation is **$1.0 million (current)** and **$0.5 million (long-term)** at July 31, 2025[87](index=87&type=chunk) - A new royalty agreement for Boeing 787 aircraft printers has an outstanding obligation of **$0.5 million** as of July 31, 2025, including $0.2 million current[89](index=89&type=chunk) [Note 12 – Leases](index=20&type=section&id=Note%2012%20%E2%80%93%20Leases) **Operating Lease Information (in thousands)** | Item | July 31, 2025 | January 31, 2025 | | :--- | :--- | :--- | | Right of Use Assets | $2,689 | $1,781 | | Lease Liabilities – Current | $547 | $320 | | Lease Liabilities – Long Term | $2,235 | $1,535 | | **Total Lease Liabilities** | **$2,782** | **$1,855** | - Operating lease costs were **$341 thousand** for the six months ended July 31, 2025[90](index=90&type=chunk) - The weighted-average remaining lease term is **5.8 years**, with a weighted-average discount rate of **6.10%** as of July 31, 2025[92](index=92&type=chunk) [Note 13 – Government Grants](index=22&type=section&id=Note%2013%20%E2%80%93%20Government%20Grants) - MTEX receives government grants from Portugal for operations and capital projects[95](index=95&type=chunk) - As of July 31, 2025, **$1.3 million** in short and long-term deferred revenue for capital grants is recognized[97](index=97&type=chunk) - Grant revenue of **$0.1 million** (capital-related) was recognized as an offset to depreciation expense, and **$0.2 million** (operational-related) was offset against selling and marketing expense for the six months ended July 31, 2025[97](index=97&type=chunk)[98](index=98&type=chunk) [Note 14 – Accumulated Other Comprehensive Loss](index=22&type=section&id=Note%2014%20%E2%80%93%20Accumulated%20Other%20Comprehensive%20Loss) **Accumulated Other Comprehensive Loss (in thousands)** | Item | January 31, 2025 | July 31, 2025 | | :--- | :--- | :--- | | Balance | $(3,349) | $(2,327) | | Other Comprehensive Income | N/A | $1,022 | | **Change** | **N/A** | **$1,022** | - The improvement in accumulated other comprehensive loss is primarily due to **foreign currency translation adjustments**[99](index=99&type=chunk) [Note 15 – Share-Based Compensation](index=22&type=section&id=Note%2015%20%E2%80%93%20Share-Based%20Compensation) **Share-Based Compensation Expense (in thousands)** | Item | Three Months Ended July 31, 2025 | Six Months Ended July 31, 2025 | | :--- | :--- | :--- | | Stock Options | $35 | $35 | | Restricted Stock Awards and Restricted Stock Units | $421 | $702 | | Stock-Settled Performance Awards | $43 | $43 | | Employee Stock Purchase Plan | $0 | $25 | | **Total** | **$499** | **$805** | - Approximately **$1.1 million** of unrecognized compensation expense related to RSUs, PSUs, and RSAs is expected to be recognized over a weighted average period of 2.3 years[108](index=108&type=chunk) - The Employee Stock Purchase Plan (ESPP) was **terminated** effective April 22, 2025[111](index=111&type=chunk) [Note 16 – Income Taxes](index=24&type=section&id=Note%2016%20%E2%80%93%20Income%20Taxes) **Effective Tax Rates** | Period | Fiscal 2026 | Fiscal 2025 | | :--- | :--- | :--- | | Three Months Ended July 31 | 26.8% | (522.0)% | | Six Months Ended July 31 | 18.9% | (24.9)% | - An income tax benefit of **$378 thousand** was recognized for the six months ended July 31, 2025[115](index=115&type=chunk) - The "One Big Beautiful Bill Act" (OBBBA), enacted on July 4, 2025, is **not expected to have a material impact** on the consolidated financial statements[116](index=116&type=chunk) [Note 17 – Segment Information](index=25&type=section&id=Note%2017%20%E2%80%93%20Segment%20Information) - AstroNova operates in two reporting segments: **Product ID** and **Aerospace** (formerly Test & Measurement)[118](index=118&type=chunk)[119](index=119&type=chunk) **Revenue by Segment (in thousands)** | Segment | Three Months Ended July 31, 2025 | Three Months Ended August 3, 2024 | Six Months Ended July 31, 2025 | Six Months Ended August 3, 2024 | | :--- | :--- | :--- | :--- | :--- | | Product ID | $24,754 | $27,165 | $51,043 | $50,350 | | Aerospace | $11,348 | $13,374 | $22,767 | $23,150 | | **Total Revenue** | **$36,102** | **$40,539** | **$73,810** | **$73,500** | **Segment Operating Income (in thousands)** | Segment | Three Months Ended July 31, 2025 | Three Months Ended August 3, 2024 | Six Months Ended July 31, 2025 | Six Months Ended August 3, 2024 | | :--- | :--- | :--- | :--- | :--- | | Product ID | $1,916 | $2,348 | $4,707 | $5,340 | | Aerospace | $2,410 | $3,834 | $5,176 | $5,555 | | **Total Segment Operating Income** | **$4,326** | **$6,182** | **$9,883** | **$10,895** | [Note 18 – Fair Value](index=27&type=section&id=Note%2018%20%E2%80%93%20Fair%20Value) - The fair value of long-term debt, including the current portion, is estimated at **$24,115 thousand** as of July 31, 2025, and is classified as a Level 3 measurement[126](index=126&type=chunk) [Note 19 – Restructuring](index=27&type=section&id=Note%2019%20%E2%80%93%20Restructuring) - A restructuring plan for fiscal 2026 was announced on March 20, 2025, including a **10% global workforce reduction** and realignment of the MTEX operation[127](index=127&type=chunk) - The plan involves cutting approximately **70% of the MTEX product portfolio** to focus on higher-margin products and integrating MTEX sales, marketing, and customer support functions[127](index=127&type=chunk) - The company anticipates **$3.0 million in annualized savings** and has recognized **$1.2 million in pre-tax restructuring charges** as of July 31, 2025[127](index=127&type=chunk)[128](index=128&type=chunk) [Note 20 – Subsequent Events](index=28&type=section&id=Note%2020%20%E2%80%93%20Subsequent%20Events) - On September 8, 2025, the company entered into a **Fifth Amendment** to its credit agreement, which waived a covenant default as of July 31, 2025[130](index=130&type=chunk)[217](index=217&type=chunk) - The Fifth Amendment also requires the company to provide a mortgage on its Elk Grove Village, Illinois property and obtain a Phase II environmental site assessment for its West Warwick, Rhode Island property[130](index=130&type=chunk)[217](index=217&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes financial condition, operational results, liquidity, and the impact of acquisitions and restructuring [Business Overview](index=28&type=section&id=Business%20Overview) - AstroNova operates in Product Identification and Aerospace segments, focusing on organic growth through product innovation and customer-centric strategies[132](index=132&type=chunk)[133](index=133&type=chunk)[136](index=136&type=chunk) - The MTEX acquisition (May 2024) was integrated into the Product ID segment, but its integration has been challenging, leading to an investigation of potential breaches of representations and warranties[134](index=134&type=chunk)[159](index=159&type=chunk) - A fiscal 2026 restructuring plan, announced March 20, 2025, includes a **10% global workforce reduction** and realignment of MTEX operations, aiming for **$3.0 million in annualized savings**[135](index=135&type=chunk) - Jorik E Ittmann was appointed President and Chief Executive Officer, effective August 15, 2025[137](index=137&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) [Three Months Ended July 31, 2025 vs. Three Months Ended August 3, 2024](index=29&type=section&id=Three%20Months%20Ended%20July%2031%2C%202025%20vs.%20Three%20Months%20Ended%20August%203%2C%202024) **Revenue by Segment (in thousands)** | Segment | July 31, 2025 | August 3, 2024 | % Change | | :--- | :--- | :--- | :--- | | Product ID | $24,754 | $27,165 | (8.9)% | | Aerospace | $11,348 | $13,374 | (15.1)% | | **Total** | **$36,102** | **$40,539** | **(10.9)%** | - Gross profit **decreased by 18.8% to $11.6 million**, with gross profit margin declining 3.1 points to 32.2%, primarily due to unfavorable product mix and lower sales[142](index=142&type=chunk) - Net loss for the quarter was **$1.2 million**, or $(0.16) per diluted share, impacted by $0.7 million in restructuring charges, $0.1 million in legal fees, and $0.4 million in proxy solicitation costs[146](index=146&type=chunk) [Six Months Ended July 31, 2025 vs. Six Months Ended August 3, 2024](index=30&type=section&id=Six%20Months%20Ended%20July%2031%2C%202025%20vs.%20Six%20Months%20Ended%20August%203%2C%202024) **Revenue by Segment (in thousands)** | Segment | July 31, 2025 | August 3, 2024 | % Change | | :--- | :--- | :--- | :--- | | Product ID | $51,043 | $50,350 | 1.4% | | Aerospace | $22,767 | $23,150 | (1.7)% | | **Total** | **$73,810** | **$73,500** | **0.4%** | - Gross profit **decreased by 7.7% to $24.3 million**, with gross profit margin declining 2.9 percentage points to 32.9%, primarily due to lower sales, product mix, and $0.4 million in restructuring costs[151](index=151&type=chunk)[152](index=152&type=chunk) - The company reported a **net loss of $1.6 million**, or $(0.21) per diluted share, a shift from net income of $0.9 million in the prior year, significantly impacted by $1.2 million in restructuring charges and other non-recurring costs[156](index=156&type=chunk) [Segment Analysis](index=31&type=section&id=Segment%20Analysis) [Product ID Segment Analysis](index=32&type=section&id=Product%20ID%20Segment%20Analysis) - Product ID segment revenue **decreased by 8.9% in Q2 2025**, primarily due to declines in desktop, professional label, and direct-to-package printers[162](index=162&type=chunk) - For the six months ended July 31, 2025, Product ID revenue **increased by 1.4%**, driven by direct-to-package/overprinters and mail & sheet/flat pack printers[163](index=163&type=chunk) - Segment operating profit margin for Product ID **decreased to 7.7% in Q2 2025 and 9.2% for H1 2025**, primarily due to lower sales, unfavorable product mix, and higher costs associated with restructuring[162](index=162&type=chunk)[163](index=163&type=chunk) - The integration of MTEX has been more challenging than anticipated, leading to an investigation of potential breaches of representations and warranties and a **reduction of 70% of the MTEX product portfolio**[159](index=159&type=chunk)[135](index=135&type=chunk) [Aerospace Segment Analysis](index=33&type=section&id=Aerospace%20Segment%20Analysis) - Aerospace segment revenue **decreased by 15.1% in Q2 2025**, mainly due to a 25.2% decrease in commercial aircraft sales, partially offset by a 72.2% increase in defense market sales[168](index=168&type=chunk) - For the six months ended July 31, 2025, Aerospace revenue **decreased by 1.7%**, with declines in commercial aircraft and regional/business jet markets, partially offset by a 98.3% increase in defense market sales[169](index=169&type=chunk) - Segment operating profit margin for Aerospace **decreased to 21.2% in Q2 2025 and 22.7% for H1 2025**, due to lower revenue and product mix[168](index=168&type=chunk)[169](index=169&type=chunk) - Certain sales amounts for the three months ended April 30, 2025, were reclassified between market categories to correct a presentation error, with no impact on total net sales or financial statements[166](index=166&type=chunk)[167](index=167&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) [Overview of Liquidity](index=35&type=section&id=Overview%20of%20Liquidity) - Primary liquidity sources are cash from operating activities and borrowings under the revolving credit facility[171](index=171&type=chunk) - Despite net losses for the three and six months ended July 31, 2025, management believes current liquidity sources will support anticipated needs[172](index=172&type=chunk) - As of July 31, 2025, the company **failed to satisfy certain financial covenants** under its credit agreement but received a waiver from the Lender[173](index=173&type=chunk) - Cash and cash equivalents were **$3.9 million** at July 31, 2025, with **$5.9 million available** under the revolving credit facility[177](index=177&type=chunk) [Indebtedness](index=35&type=section&id=Indebtedness) - The **Fourth Amendment** (March 20, 2025) modified repayment installments for the Term Loan and adjusted interest rate margins for various loans[176](index=176&type=chunk)[178](index=178&type=chunk)[183](index=183&type=chunk) - The **Fifth Amendment** (September 8, 2025) waived a covenant default as of July 31, 2025, and required additional collateral, including a mortgage on an Illinois property[187](index=187&type=chunk) - Assumed MTEX financing obligations include a Term Loan (**$1.6 million remaining**) and interest-free Government Grant Term Loans (**$0.6 million remaining**) as of July 31, 2025[191](index=191&type=chunk)[192](index=192&type=chunk) [Cash Flow](index=37&type=section&id=Cash%20Flow) - Net cash provided by operating activities **decreased to $4.6 million** for the six months ended July 31, 2025, from $7.1 million in the prior year, primarily due to a shift to net loss and decreased cash from working capital[194](index=194&type=chunk) - Net cash used for investing activities **significantly decreased to $(0.1) million** in 2025, compared to $(21.6) million in 2024, due to the absence of the MTEX acquisition[18](index=18&type=chunk)[194](index=194&type=chunk) - Accounts receivable decreased to $18.5 million, with days sales outstanding **improving to 47 days** from 51 days[195](index=195&type=chunk) - Inventory increased to $48.4 million, primarily to satisfy ink supply obligations, with inventory days on hand **increasing to 178 days** from 175 days[195](index=195&type=chunk) [Contractual Obligations, Commitments and Contingencies](index=38&type=section&id=Contractual%20Obligations%2C%20Commitments%20and%20Contingencies) - No material changes to contractual obligations, commitments, and contingencies have occurred since the Annual Report on Form 10-K for January 31, 2025, other than those in the ordinary course of business[197](index=197&type=chunk) [Critical Accounting Policies, Estimates and Certain Other Matters](index=38&type=section&id=Critical%20Accounting%20Policies%2C%20Estimates%20and%20Certain%20Other%20Matters) - The preparation of financial statements involves significant estimates and assumptions, including revenue recognition, inventory valuation, income taxes, and valuation of long-lived assets[198](index=198&type=chunk)[29](index=29&type=chunk) - Management continuously re-evaluates these estimates based on facts, historical experience, and economic conditions, acknowledging that actual results may differ materially[199](index=199&type=chunk) - There have been **no material changes** to the application of critical accounting policies since the Annual Report on Form 10-K for January 31, 2025[200](index=200&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=38&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) - The report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from expectations[201](index=201&type=chunk) - Key risk factors include general economic conditions, declining demand, new product development, supply chain dependence, competition, intellectual property, cybersecurity, and the ability to manage debt and integrate acquisitions[201](index=201&type=chunk) - The company assumes no obligation to update or revise any forward-looking statement[201](index=201&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks involve foreign currency exchange rates and interest rate fluctuations [Foreign Currency Exchange Risk](index=39&type=section&id=Foreign%20Currency%20Exchange%20Risk) - The company is exposed to foreign currency exchange risk from translating foreign subsidiary financial statements (primarily Danish Kroner and Euro) and from transactional exposure[203](index=203&type=chunk)[204](index=204&type=chunk) - A hypothetical **10% change in exchange rates** would result in an increase or decrease in consolidated net income of **less than $0.1 million** for the quarter ended July 31, 2025[203](index=203&type=chunk) - Foreign exchange losses from transactional exposure were **less than $0.1 million** for the six months ended July 31, 2025[204](index=204&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of July 31, 2025 [Evaluation of Disclosure Controls and Procedures](index=39&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Management, with CEO and CFO participation, concluded that disclosure controls and procedures were **effective** as of July 31, 2025[206](index=206&type=chunk) [Changes in Internal Control over Financial Reporting](index=39&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - **No changes** in internal control over financial reporting materially affected or are reasonably likely to materially affect the company's internal control over financial reporting during the fiscal quarter ended July 31, 2025[207](index=207&type=chunk) [Part II. OTHER INFORMATION](index=39&type=section&id=Part%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in arbitration proceedings related to the MTEX acquisition, with a ruling expected in 2026 - Arbitration proceedings were initiated on March 11, 2025, by Effort Premier Solutions LDA and Elói Serafim Alves Ferreira, alleging breaches of the MTEX acquisition agreement[208](index=208&type=chunk) - AstroNova has rejected the claims and intends to file counterclaims based on breaches of the MTEX acquisition agreement[208](index=208&type=chunk) - The evidentiary process and hearings are planned over the next six months, with a ruling not expected until the first half of 2026[209](index=209&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) Non-compliance with the credit agreement could have a material adverse impact on the company's business - Readers should carefully consider the risk factors discussed in Part I, Item 1A of the Annual Report on Form 10-K for the fiscal year ended January 31, 2025[211](index=211&type=chunk) - A significant risk is the **inability to comply with the credit agreement** or secure alternative financing, which could materially adversely affect the business and financial condition[212](index=212&type=chunk) - As of July 31, 2025, the company was **not in compliance** with the minimum consolidated fixed charge coverage ratio under its credit agreement, though a waiver was subsequently obtained[212](index=212&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased common stock from employees to cover tax obligations from vested restricted shares **Common Stock Repurchases (Q2 FY2026)** | Period | Total Number of Shares Repurchased | Weighted Average Price Paid Per Share | | :--- | :--- | :--- | | June 1 - June 30 | 2,739 | $9.01 | - The shares were repurchased from employees to satisfy taxes due in connection with the vesting of restricted shares[214](index=214&type=chunk) [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) A Fifth Amendment to the credit agreement waived a covenant default and added new collateral requirements - On September 8, 2025, the company entered into a **Fifth Amendment** to its credit agreement, waiving the event of default for non-compliance with the minimum consolidated fixed charge coverage ratio as of July 31, 2025[217](index=217&type=chunk) - The Fifth Amendment requires the company to provide a mortgage on its Elk Grove Village, Illinois property and obtain a Phase II environmental site assessment for its West Warwick, Rhode Island property[217](index=217&type=chunk) - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended July 31, 2025[217](index=217&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including key agreements and required certifications - The exhibits include organizational documents (Restated Articles of Incorporation, By-laws), key agreements (Stock-Settled Performance Award, Separation Agreement, Fifth Amendment to Credit Agreement), and certifications (CEO, CFO)[220](index=220&type=chunk) [Signatures](index=43&type=section&id=Signatures) The report is officially signed by the CEO and CFO, confirming its submission on September 9, 2025 - The report was signed on September 9, 2025, by Jorik E Ittmann, President and Chief Executive Officer, and Thomas D DeByle, Vice President, Chief Financial Officer and Treasurer[224](index=224&type=chunk)

EXHIBIT 99.1 News Release 25-23-TR For Immediate Release Date: September 9, 2025 Teck and Anglo American to combine through merger of equals to form a global critical minerals champion Vancouver, B.C. – Teck Resources Limited (TSX: TECK.A and TECK.B, NYSE: TECK) ("Teck") and Anglo American plc ("Anglo American") announce they have reached an agreement to combine the two companies in a merger of equals ("the Merger") to form the Anglo Teck group ("Anglo Teck"), a global critical minerals champion and top fiv ...

[Executive Summary & Business Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Highlights) AstroNova reported disappointing Q2 FY26 results, leading to a revised outlook and strategic re-evaluation, despite new product advancements [CEO Statement & Strategic Priorities](index=1&type=section&id=CEO%20Statement%20%26%20Strategic%20Priorities) CEO Jorik Ittmann expressed disappointment with Q2 FY26 results, prompting a strategic re-evaluation focused on Product ID turnaround and operational efficiency - CEO Jorik Ittmann expressed disappointment with **Q2 FY26 financial results** and adjusted the company's outlook[3](index=3&type=chunk) - Strategic priorities include turning around the **Product ID segment**, rebuilding customer relationships, securing new customers, and improving operational efficiency[3](index=3&type=chunk) [Key Business Updates](index=1&type=section&id=Key%20Business%20Updates) AstroNova launched new Product ID printers with MTEX printheads and began shipping the ToughWriter 640 flight deck printer for its Aerospace segment - Shipped first redesigned **Product ID printers** incorporating **MTEX's autonomous ink printheads** (QL-425, QL-435 professional label presses, and AJ-800 direct-to-packaging print solution)[4](index=4&type=chunk)[6](index=6&type=chunk) - Aerospace business began shipping the **ToughWriter 640 flight deck printer** to a major aircraft manufacturer, aiming for **over 80% of flight deck printer shipments** to be ToughWriters by end of fiscal 2026[5](index=5&type=chunk)[6](index=6&type=chunk) [Fiscal 2026 Second Quarter Highlights](index=1&type=section&id=Fiscal%202026%20Second%20Quarter%20Highlights) Q2 FY26 revenue declined **10.9%** to **$36.1 million** due to Product ID challenges, leading to revised FY26 revenue guidance of **$149-$154 million** and **7.5%-8.5%** adjusted EBITDA margin Q2 FY26 Key Highlights | Metric | Value | Change | Notes | | :--- | :--- | :--- | :--- | | Revenue | $36.1 million | -10.9% YoY | Reflects challenges in Product Identification shipments | | Redesigned Product ID MTEX label presses | Shipped | N/A | Advanced from development to commercial release | | ToughWriter® shipments to major OEM | Started | N/A | On track for >80% of flight deck printer shipments by end of FY26 | | Revised FY26 Revenue Guidance | $149 - $154 million | Downward | Previously $160 - $165 million | | Revised FY26 EBITDA Margin Guidance | 7.5% - 8.5% | Downward | Previously 8.5% - 9.5% | [Financial Performance Overview](index=2&type=section&id=Financial%20Performance%20Overview) AstroNova's Q2 FY26 financial performance was challenging, marked by significant declines in consolidated revenue and gross profit, leading to an operating loss and widened net loss [Consolidated Financial Results (GAAP)](index=2&type=section&id=Consolidated%20Financial%20Results%20(GAAP)) AstroNova's Q2 FY26 GAAP results showed significant declines in revenue and gross profit, resulting in an operating loss and a widened net loss Three Months Ended July 31, 2025 (vs. August 3, 2024) | Metric | July 31, 2025 ($ thousands) | August 3, 2024 ($ thousands) | $ Variance ($ thousands) | % Variance | | :--- | :--- | :--- | :--- | :--- | | Revenue | $36,102 | $40,539 | $(4,437) | (10.9)% | | Gross Profit | $11,633 | $14,326 | $(2,693) | (18.8)% | | Gross Profit Margin | 32.2% | 35.3% | | | | Operating Income (Loss) | $(708) | $1,061 | $(1,769) | (166.7)% | | Operating Margin | (2.0)% | 2.6% | | | | Net Income (Loss) | $(1,243) | $(311) | $(932) | 299.7% | | Net Income (Loss) per Common Share – Basic | $(0.16) | $(0.04) | | | - Revenue declined **$4.4 million** due to delays in new product launches in Product Identification and a difficult year-over-year comparison in Aerospace[7](index=7&type=chunk) - Gross profit decline and margin reduction were attributed to lower sales volume and unfavorable product mix[8](index=8&type=chunk) - Operating loss primarily resulted from lower sales volume, partially offset by approximately **$0.9 million** in lower operating expenses[8](index=8&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) Both Product Identification and Aerospace segments experienced revenue and operating income declines in Q2 FY26, driven by new technology deployment delays and tough prior-year comparisons [Product Identification Segment](index=2&type=section&id=Product%20Identification%20Segment) The Product ID segment's revenue decreased by **8.9%** to **$24.8 million**, primarily due to delays in new technology deployment, longer sales cycles, and lower legacy product sales, leading to reduced operating income Product ID Segment Performance (Q2 FY26 vs. Q2 FY25) | Metric | Q2 FY26 ($ millions) | Q2 FY25 ($ millions) | $ Variance ($ millions) | % Variance | | :--- | :--- | :--- | :--- | :--- | | Revenue | $24.8 | $27.2 | $(2.4) | (8.9)% | | Operating Income | $1.9 | $2.3 | $(0.4) | N/A | | Operating Margin | 7.7% | 8.6% | | | - Lower revenue was attributed to delays in new technology deployment, longer sales cycles for higher-value printing equipment, and decreased sales for legacy QuickLabel® and TrojanLabel® products[10](index=10&type=chunk) - Operating income reflected lower sales volume and **$0.1 million** in restructuring charges[11](index=11&type=chunk) [Aerospace Segment](index=3&type=section&id=Aerospace%20Segment) The Aerospace segment experienced a **15.1%** revenue decrease to **$11.3 million**, largely due to higher comparable sales in the prior year from atypical orders, resulting in a significant drop in operating profit Aerospace Segment Performance (Q2 FY26 vs. Q2 FY25) | Metric | Q2 FY26 ($ millions) | Q2 FY25 ($ millions) | $ Variance ($ millions) | % Variance | | :--- | :--- | :--- | :--- | :--- | | Revenue | $11.3 | $13.4 | $(2.0) | (15.1)% | | Operating Profit | $2.4 | $3.8 | $(1.4) | (37.1)% | - Revenue decrease was driven by higher prior-year comparable sales from atypical orders, including large spare printer orders and non-recurring engineering revenue[13](index=13&type=chunk) [Balance Sheet and Cash Flow](index=3&type=section&id=Balance%20Sheet%20and%20Cash%20Flow) Cash and cash equivalents decreased by **$1.2 million** in H1 FY26, with lower cash from operations, while total debt was reduced by **$3.2 million**, and the company is exploring real estate-backed financing Balance Sheet & Cash Flow Highlights (H1 FY26) | Metric | July 31, 2025 ($ millions) | Change from Jan 31, 2025 ($ millions) | | :--- | :--- | :--- | | Cash and Cash Equivalents | $3.9 | Down $1.2 | | Cash provided by operations (H1 FY26) | $4.6 | Down from prior year | | Capital expenditures (H1 FY26) | $0.1 | Down $0.7 from prior year | | Total Debt Reduction (H1 FY26) | $3.2 | N/A | | Net Debt (July 31, 2025) | $39.6 | Down from $41.6 (Jan 31, 2025) | - The company entered into an amended credit agreement, waiving non-compliance with a minimum fixed charge coverage ratio covenant for Q2 FY26, and is discussing restructuring financing into a real estate-backed loan[17](index=17&type=chunk) [Orders and Backlog](index=3&type=section&id=Orders%20and%20Backlog) Overall orders for Q2 FY26 remained relatively flat at **$35.9 million**, with total backlog slightly decreasing to **$25.3 million**, as Product ID's book-to-bill was **95%** and Aerospace's was **110%** Orders and Backlog (Q2 FY26 vs. Q2 FY25) | Metric | Q2 FY26 ($ millions) | Q2 FY25 ($ millions) | Change | | :--- | :--- | :--- | :--- | | Total Orders | $35.9 | $35.8 | Relatively unchanged | | Total Backlog (July 31, 2025) | $25.3 | N/A | Down from $25.5 (Q1 FY26) | | Product ID Orders | $23.4 | $23.4 | Relatively unchanged | | Product ID Book-to-Bill Ratio | 95% | N/A | | | Aerospace Orders | $12.5 | $12.5 | Relatively unchanged | | Aerospace Book-to-Bill Ratio | 110% | N/A | | - Product ID backlog decreased by **$1.3 million** from Q1 FY26, while Aerospace backlog increased by **$1.1 million** due to timing variability[19](index=19&type=chunk)[20](index=20&type=chunk) [Fiscal Year 2026 Outlook](index=3&type=section&id=Fiscal%20Year%202026%20Outlook) AstroNova revised its FY26 revenue guidance downward to **$149-$154 million** and adjusted EBITDA margin to **7.5%-8.5%**, anticipating modest growth in the second half from new Product ID solutions and cost restructuring Revised Fiscal 2026 Guidance | Metric | Previous Guidance ($ millions) | Revised Guidance ($ millions) | Change | | :--- | :--- | :--- | :--- | | Revenue | $160 - $165 | $149 - $154 | Downward | | Adjusted EBITDA Margin | 8.5% - 9.5% | 7.5% - 8.5% | Downward | | Expected Effective Tax Rate | N/A | ~32.8% | N/A | - Modest revenue growth and improved EBITDA margin are expected in the second half of FY26, driven by recently launched Product ID solutions and the full impact of cost restructuring efforts[21](index=21&type=chunk) [Company Information & Non-GAAP Measures](index=4&type=section&id=Company%20Information%20%26%20Non-GAAP%20Measures) This section provides details on AstroNova's earnings call, company profile, rationale for using Non-GAAP financial measures, and important forward-looking statement disclaimers [Earnings Conference Call Information](index=4&type=section&id=Earnings%20Conference%20Call%20Information) AstroNova hosted a conference call and webcast on September 9, 2025, to discuss Q2 FY26 financial and operating results, with replays available for review - Conference call and webcast held on September 9, 2025, at 10:00 a.m. ET to review Q2 FY26 results[24](index=24&type=chunk) - Telephonic replay available until September 23, 2025, and webcast replay on the Investor Relations section of the company's website[25](index=25&type=chunk) [About AstroNova, Inc.](index=4&type=section&id=About%20AstroNova%2C%20Inc.) AstroNova (Nasdaq: ALOT) is a leading innovator in specialized print technology solutions, focusing on profitable growth through innovation, expanding its installed base, and strategic aftermarket sourcing - AstroNova (Nasdaq: ALOT) specializes in print technology solutions, providing products that acquire, store, analyze, and present data[26](index=26&type=chunk) - Strategy: drive profitable growth via innovative technologies, expand installed base for recurring revenue, and strategically source aftermarket products[26](index=26&type=chunk) - Segments include Product Identification (digital marking and identification solutions) and Aerospace (airborne printing, avionics, data acquisition)[27](index=27&type=chunk) [Use of Non-GAAP Financial Measures](index=4&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) AstroNova utilizes Non-GAAP financial measures to provide investors with a clearer understanding of core operating results and facilitate comparisons, acknowledging limitations in reconciling forward-looking Adjusted EBITDA - Non-GAAP measures (e.g., Non-GAAP gross profit, operating income, net income, Adjusted EBITDA) are used to help investors understand core operating results and compare performance[28](index=28&type=chunk) - Management uses Non-GAAP measures for evaluating core operating performance, comparing to prior periods and competitors, and for financial/operating decision-making[28](index=28&type=chunk) - Forward-looking Adjusted EBITDA margin cannot be reconciled to GAAP without unreasonable effort due to the unpredictability of cost of sales, operating expenses, depreciation, amortization, and stock-based compensation[29](index=29&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This news release contains forward-looking statements subject to various risks and uncertainties that could cause actual results to differ materially, with no obligation for the company to update them - Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from expectations[31](index=31&type=chunk) - Key risks include the success of Product ID sales improvement, customer adoption of redesigned print solutions, realization of cost-reduction benefits, Aerospace customer build rates, benefits from next-generation print engine technology, and successful restructuring of financing arrangements[31](index=31&type=chunk) - The company undertakes no obligation to publicly update or revise any forward-looking statements[31](index=31&type=chunk) [Financial Statements (GAAP)](index=6&type=section&id=Financial%20Statements%20(GAAP)) This section provides AstroNova's unaudited condensed consolidated GAAP financial statements, including statements of income (loss), balance sheets, and cash flow, for the specified periods [Condensed Consolidated Statements of Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)) This section presents AstroNova's unaudited condensed consolidated statements of income (loss), detailing revenue, gross profit, operating income (loss), and net income (loss) for the three and six months ended July 31, 2025, and August 3, 2024 Condensed Consolidated Statements of Income (Loss) (Three Months Ended) | Metric | July 31, 2025 ($ thousands) | August 3, 2024 ($ thousands) | $ Variance ($ thousands) | % Variance | | :--- | :--- | :--- | :--- | :--- | | Revenue | $36,102 | $40,539 | $(4,437) | (10.9)% | | Gross Profit | $11,633 | $14,326 | $(2,693) | (18.8)% | | Operating Income (Loss) | $(708) | $1,061 | $(1,769) | (166.7)% | | Net Income (Loss) | $(1,243) | $(311) | $(932) | 299.7)% | | Net Income (Loss) per Common Share – Basic | $(0.16) | $(0.04) | | | Condensed Consolidated Statements of Income (Loss) (Six Months Ended) | Metric | July 31, 2025 ($ thousands) | August 3, 2024 ($ thousands) | $ Variance ($ thousands) | % Variance | | :--- | :--- | :--- | :--- | :--- | | Revenue | $73,810 | $73,500 | $310 | 0.4% | | Gross Profit | $24,286 | $26,298 | $(2,012) | (7.7)% | | Operating Income (Loss) | $(135) | $2,407 | $(2,542) | (105.6)% | | Net Income (Loss) | $(1,619) | $869 | $(2,488) | (286.3)% | | Net Income (Loss) per Common Share – Basic | $(0.21) | $0.12 | | | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents AstroNova's unaudited condensed consolidated balance sheets as of July 31, 2025, and January 31, 2025, providing a snapshot of the company's financial position, including assets, liabilities, and shareholders' equity Condensed Consolidated Balance Sheets Highlights | Metric | July 31, 2025 ($ thousands) | January 31, 2025 ($ thousands) | | :--- | :--- | :--- | | Total Current Assets | $75,230 | $78,017 | | Property, Plant and Equipment, net | $17,018 | $17,639 | | Total Assets | $143,149 | $145,595 | | Total Current Liabilities | $43,876 | $46,346 | | Total Liabilities | $67,363 | $69,845 | | Total Shareholders' Equity | $75,786 | $75,750 | [Condensed Consolidated Statements of Cash Flow](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flow) This section provides AstroNova's unaudited condensed consolidated statements of cash flow for the six months ended July 31, 2025, and August 3, 2024, detailing the sources and uses of cash from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flow Highlights (Six Months Ended) | Metric | July 31, 2025 ($ thousands) | August 3, 2024 ($ thousands) | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $4,644 | $7,066 | | Net Cash Used for Investing Activities | $(107) | $(21,559) | | Net Cash Provided by (Used for) Financing Activities | $(5,968) | $14,576 | | Net (Decrease) Increase in Cash and Cash Equivalents | $(1,195) | $297 | | Cash and Cash Equivalents, End of Period | $3,855 | $4,824 | [Segment Financials & Non-GAAP Reconciliations](index=9&type=section&id=Segment%20Financials%20%26%20Non-GAAP%20Reconciliations) This section provides detailed GAAP and Non-GAAP segment financial data, including sales, profit, revenue breakdown, bookings, backlog, and comprehensive reconciliations of GAAP to Non-GAAP measures [Segment Sales and Profit (GAAP)](index=9&type=section&id=Segment%20Sales%20and%20Profit%20(GAAP)) This section presents AstroNova's unaudited GAAP segment sales and profit data for Product ID and Aerospace, detailing revenue, gross profit, and operating income for the three and six months ended July 31, 2025, and August 3, 2024 Segment Sales and Profit (GAAP) - Three Months Ended July 31, 2025 | Metric | Product ID ($ thousands) | Aerospace ($ thousands) | Total ($ thousands) | | :--- | :--- | :--- | :--- | | Revenue | $24,754 | $11,348 | $36,102 | | Gross Profit | $7,677 | $3,956 | $11,633 | | Gross Profit Margin | 31.0% | 34.9% | 32.2% | | Segment Operating Income | $1,916 | $2,410 | $4,326 | | Segment Operating Margin | 7.7% | 21.2% | 12.0% | [Segment Sales and Non-GAAP Profit](index=10&type=section&id=Segment%20Sales%20and%20Non-GAAP%20Profit) This section presents AstroNova's unaudited Non-GAAP segment sales and profit for Product ID and Aerospace, providing a view of performance adjusted for specific non-recurring items for the three and six months ended July 31, 2025, and August 3, 2024 Segment Sales and Non-GAAP Profit - Three Months Ended July 31, 2025 | Metric | Product ID ($ thousands) | Aerospace ($ thousands) | Total ($ thousands) | | :--- | :--- | :--- | :--- | | Revenue | $24,754 | $11,348 | $36,102 | | Non-GAAP Gross Profit | $7,679 | $3,952 | $11,631 | | Non-GAAP Gross Profit Margin | 31.0% | 34.8% | 32.2% | | Non-GAAP Segment Operating Income | $2,019 | $2,411 | $4,430 | | Non-GAAP Segment Operating Margin | 8.2% | 21.2% | 12.3% | [Revenue by Market and Type](index=11&type=section&id=Revenue%20by%20Market%20and%20Type) This section details AstroNova's revenue breakdown by market categories and by type (Hardware vs. Recurring Supplies, Parts & Service) for both Product ID and Aerospace segments across several fiscal quarters Product ID Revenue by Market (Q2 FY26) | Market Category | Q2 FY26 Revenue ($ thousands) | | :--- | :--- | | Desktop Label Printers | $15,190 | | Mail & Sheet/Flat Pack Printers | $3,740 | | Professional Label Printers | $3,506 | | Direct to Package/Overprint Printers | $2,230 | | Flexible Packaging Printers | $69 | | Other | $19 | | **TOTAL Product ID** | **$24,754** | Consolidated Revenue by Type (Q2 FY26) | Revenue Type | Q2 FY26 Revenue ($ thousands) | | :--- | :--- | | AstroNova HW | $10,936 | | AstroNova Recurring Supplies, Parts & Service | $25,166 | | **TOTAL CONSOLIDATED** | **$36,102** | [Bookings and Backlog Details](index=12&type=section&id=Bookings%20and%20Backlog%20Details) This section provides detailed bookings and backlog information for AstroNova consolidated, Product ID, and Aerospace segments across several fiscal quarters, including book-to-bill ratios AstroNova Consolidated Bookings and Backlog (Q2 FY26) | Metric | Q2 FY26 ($ thousands) | | :--- | :--- | | Beginning backlog (incl. MTEX) | $25,491 | | Revenue Recognized (Billings) | $36,102 | | New Bookings During Period | $35,901 | | Backlog End of Period | $25,291 | | Book/Bill% | 99% | Segment Book-to-Bill Ratios (Q2 FY26) | Segment | Book/Bill% | | :--- | :--- | | Product Identification | 95% | | Aerospace | 110% | [Reconciliation of GAAP to Non-GAAP Items](index=13&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Items) This section provides a detailed reconciliation of GAAP to Non-GAAP financial measures, adjusting for items like inventory step-up, restructuring charges, and acquisition expenses to present core operational performance Key Non-GAAP Adjustments (Three Months Ended July 31, 2025) | Adjustment Type | Impact on Non-GAAP Operating Income ($ thousands) | | :--- | :--- | | MTEX-related Acquisition Expenses | $(25) | | Restructuring Charges | $689 | | Non-Recurring Legal Expenses | $69 | | Non-Recurring Proxy Costs | $355 | Key Non-GAAP Adjustments (Six Months Ended July 31, 2025) | Adjustment Type | Impact on Non-GAAP Operating Income ($ thousands) | | :--- | :--- | | MTEX-related Acquisition Expenses | $311 | | Inventory Step-Up | $61 | | Restructuring Charges | $1,247 | | Non-Recurring Legal Expenses | $69 | | Non-Recurring Proxy Costs | $355 | [Reconciliation of Net Income and Margin to Adjusted EBITDA and Margin](index=15&type=section&id=Reconciliation%20of%20Net%20Income%20and%20Margin%20to%20Adjusted%20EBITDA%20and%20Margin) This section reconciles Net Income (Loss) and Margin to Adjusted EBITDA and Margin, adjusting for interest, tax, depreciation, amortization, share-based compensation, and non-recurring items to show profitability before non-operating and non-cash charges Adjusted EBITDA Reconciliation (Three Months Ended July 31, 2025) | Metric | Value ($ thousands) | | :--- | :--- | | Net Income (Loss) | $(1,243) | | EBITDA | $468 | | Adjusted EBITDA | $2,055 | | Adjusted EBITDA Margin | 5.7% | Adjusted EBITDA Reconciliation (Six Months Ended July 31, 2025) | Metric | Value ($ thousands) | | :--- | :--- | | Net Income (Loss) | $(1,619) | | EBITDA | $2,355 | | Adjusted EBITDA | $5,203 | | Adjusted EBITDA Margin | 7.0% | [Reconciliation of Segment Gross Profit and Margin to Non-GAAP Gross Profit and Margin](index=16&type=section&id=Reconciliation%20of%20Segment%20Gross%20Profit%20and%20Margin%20to%20Non-GAAP%20Gross%20Profit%20and%20Margin) This section reconciles GAAP Segment Gross Profit and Margin to Non-GAAP Segment Gross Profit and Margin for Product ID and Aerospace, adjusting for inventory step-up and restructuring charges to show segment-specific gross profitability Non-GAAP Segment Gross Profit & Margin (Q2 FY26) | Segment | GAAP Gross Profit ($ thousands) | Non-GAAP Gross Profit ($ thousands) | GAAP Gross Profit Margin | Non-GAAP Gross Profit Margin | | :--- | :--- | :--- | :--- | :--- | | Product ID | $7,677 | $7,679 | 31.0% | 31.0% | | Aerospace | $3,956 | $3,952 | 34.9% | 34.8% | | Total | $11,633 | $11,631 | 32.2% | 32.2% | [Reconciliation of Segment Operating Profit and Margin to Non-GAAP Operating Profit and Margin](index=17&type=section&id=Reconciliation%20of%20Segment%20Operating%20Profit%20and%20Margin%20to%20Non-GAAP%20Operating%20Profit%20and%20Margin) This section reconciles GAAP Segment Operating Income and Margin to Non-GAAP Segment Operating Income and Margin for Product ID and Aerospace, with adjustments for inventory step-up and restructuring charges, providing a segment-level view of operating performance Non-GAAP Segment Operating Profit & Margin (Q2 FY26) | Segment | GAAP Operating Income ($ thousands) | Non-GAAP Operating Income ($ thousands) | GAAP Operating Margin | Non-GAAP Operating Margin | | :--- | :--- | :--- | :--- | :--- | | Product ID | $1,916 | $2,019 | 7.7% | 8.2% | | Aerospace | $2,410 | $2,411 | 21.2% | 21.2% | | Total | $4,326 | $4,430 | 12.0% | 12.3% |