AstroNova(US:ALOT)2020-09-09 20:17Revenue Performance - Total revenue for the second quarter of fiscal 2020 was $27.7 million, a 17.4% decrease from $33.5 million in the same quarter of the previous year[118]. - Product Identification segment revenue was $21.6 million, accounting for 78.2% of total revenue, while Test and Measurement segment revenue was $6.0 million, representing 21.8% of total revenue, reflecting a 46.8% decline compared to the prior year[118]. - Revenue for the first six months of the current year was $58.6 million, a 15.9% decrease from $69.6 million in the prior year[129]. - Revenue from the Product Identification segment decreased 3.8% to $44.0 million in the first six months of the current year[140]. - Revenue from the Test & Measurement segment was $6.0 million for the second quarter, a 46.8% decrease from $11.3 million in the prior year[142]. - Revenue from the T&M segment was $14.6 million for the first six months of the current fiscal year, a 39.1% decrease compared to $23.9 million for the same period in the prior year[143]. Segment Performance - Hardware revenue decreased by 32.1% to $8.4 million, primarily due to a 44.3% decline in the Test and Measurement segment's hardware sales[120]. - Hardware revenue decreased by 31.6% to $17.4 million compared to $25.4 million in the prior year[130]. - Supplies revenue was $17.1 million, a 5.2% decrease from $18.1 million in the prior year, mainly due to lower sales in the QuickLabel product group[121]. - Supplies revenue was $36.3 million, a 4.1% decrease from $37.8 million in the prior year[131]. - Service and other revenues decreased by 29.5% to $2.1 million, primarily due to declines in repair revenue related to the aerospace printer product line[122]. - Service and other revenues were $5.0 million, a 23.4% decrease from $6.5 million in the prior year[132]. Profitability and Expenses - Gross profit for the current quarter was $9.8 million, an 18.3% decrease from $12.0 million in the prior year, with a gross profit margin of 35.4%[123]. - Operating expenses for the current quarter were $9.6 million, an 11.4% decrease from $10.8 million in the prior year[124]. - Current quarter selling and marketing expenses were $5.5 million, a 13.4% decrease compared to the prior year[124]. - Research and development (R&D) expenses were $1.5 million, a 16.4% decrease from $1.8 million in the prior year, representing 5.4% of revenue[124]. - Net income for the first six months of the current year was $0.4 million, or $0.06 per diluted share, compared to $2.7 million, or $0.36 per diluted share in the prior year[137]. Cash Flow and Liquidity - Net cash provided by operating activities was $9.2 million for the first six months of fiscal 2021, compared to $1.0 million for the same period of the previous year[164]. - Cash and cash equivalents were $11.2 million as of August 1, 2020, with an outstanding balance on the revolving line of credit of $2.0 million[152]. - The A&R Credit Agreement includes a term loan of $15.2 million and a $10.0 million revolving credit facility for general corporate purposes[148]. - The company borrowed $4.4 million under the Paycheck Protection Program, which is unsecured and bears interest at a rate of 1.0% per annum[161]. - The principal amount of each quarterly installment under the A&R Credit Agreement is $0.8 million for the first two quarters, increasing to $1.1 million and $1.4 million in subsequent quarters[153]. Market Conditions and Risks - The decline in demand for products has had a material adverse impact on revenues and results of operations, expected to continue until demand recovers[107]. - The COVID-19 pandemic has significantly impacted sales, particularly in the Product Identification hardware products due to travel restrictions and the cancellation of trade shows[108]. - The company acknowledges that estimates and assumptions used in financial statements may not be accurate, leading to potential material differences[171]. - Forward-looking statements indicate that actual results may differ due to various risks, including the ongoing COVID-19 pandemic and competition in the specialty printer industry[172]. - No material changes were reported in market risk disclosures for the six months ended August 1, 2020[174]. Inventory and Receivables - Accounts receivable balance decreased to $14.8 million at the end of the second quarter, down from $19.8 million at year end, reflecting a $5.0 million decrease due to lower sales[165]. - Inventory balance was $32.4 million at the end of the second quarter, down from $33.9 million at year end, with inventory days on hand increasing to 163 days from 151 days[166]. Credit and Payment Issues - The company experienced a limited number of cases where aerospace customers failed to pay on time, leading to increased reserves for potential losses[151].