AstroNova(US:ALOT)2023-12-05 16:00Revenue Performance - Revenue for the third quarter of fiscal year 2024 was $37.5 million, a decrease of 4.7% compared to $39.4 million in the same quarter of the previous year[127]. - Product Identification (PI) segment revenue was $26.5 million, representing 70.7% of total revenue, down 11.2% from $29.9 million in the prior year[128]. - Test and Measurement (T&M) segment revenue increased by 15.5% to $11.0 million, up from $9.5 million in the previous year[128]. - Revenue for the first nine months of the current year was $108.5 million, a 5.7% increase compared to the previous year's revenue of $102.7 million[138]. - Domestic revenue for the first nine months was $61.8 million, a 1.0% increase from $61.2 million in the prior year, while international revenue was $46.7 million, a 12.6% increase from $41.5 million[138]. - Hardware revenue increased by 19.8% to $35.8 million, driven by a 25.8% increase in the PI segment and a 15.4% increase in the T&M segment[139]. - Supplies revenue decreased by 2.2% to $58.7 million, primarily due to a decline in Quick Label product group supplies revenue[140]. - Service and other revenues increased by 9.5% to $13.9 million, supported by contributions from Astro Machine and increased parts and repair revenue[141]. Profitability - Gross profit for the third quarter was $14.8 million, an 18.4% increase from $12.5 million in the prior year, with a gross profit margin of 39.4%[132]. - Gross profit for the first nine months was $36.9 million, a 6.6% increase, with a gross profit margin of 34.0%, up from 33.7% in the prior year[142]. - Net income for the third quarter was $2.8 million, or $0.37 per diluted share, compared to $0.3 million, or $0.04 per diluted share, in the prior year[135]. - Net income for the first nine months was $2.0 million, or $0.27 per diluted share, impacted by restructuring and product retrofit expenses[147]. - The PI segment revenue increased by 3.2% to $77.4 million, with an operating profit of $6.8 million and a profit margin of 8.8%[151]. - The T&M segment revenue increased by 12.2% to $31.1 million, with an operating profit of $6.5 million and a profit margin of 21.1%[152]. Expenses and Restructuring - Operating expenses decreased by 8.8% to $10.1 million compared to $11.1 million in the prior year, with R&D expenses at $1.7 million, down 11.6%[133]. - Operating expenses increased by 2.4% to $32.0 million, with selling and marketing expenses rising by 3.8% due to increased amortization and restructuring costs[143]. - The company recognized a pre-tax restructuring expense of $2.7 million in the second quarter, primarily due to inventory write-offs and severance costs related to the PI segment restructuring[119]. Cash Flow and Financing - Cash flow from operations for the first nine months of fiscal 2024 was $5.9 million, compared to cash used of $7.5 million in the same period last year, primarily due to improved working capital[165]. - As of October 28, 2023, the company had $4.8 million in cash and cash equivalents, with $14.9 million borrowed on the revolving line of credit and $10.1 million available for borrowing[157]. - The company plans to finance $1.5 million to $2.0 million for capital investments to upgrade production machinery to support revenue growth and cost reduction objectives[154]. - The Amended Credit Agreement includes a new term loan of $6.0 million and increased the revolving credit facility from $22.5 million to $25.0 million[156]. - Principal payments on long-term debt for the quarter included $1.4 million, alongside a guaranteed royalty obligation of $1.4 million[167]. - The term loan repayment schedule requires quarterly installments of $675,000 from October 31, 2023, through April 30, 2027[158]. - The company believes it is in compliance with all covenants in the Amended Credit Agreement as of October 28, 2023[161]. Inventory and Accounts Receivable - The company’s accounts receivable balance increased to $22.0 million at the end of Q3 fiscal 2024, with days sales outstanding rising to 53 days from 49 days at the prior year end[166]. - Inventory decreased to $47.0 million at the end of Q3 fiscal 2024, down from $51.3 million at year end, with inventory days on hand increasing to 186 days[166]. - The company anticipates focusing on inventory reduction and debt reduction under the revolving credit facility in fiscal 2024[154]. Other Notable Events - Approximately 150 printers were identified as affected by faulty ink, with estimated costs for retrofitting at $0.9 million[120]. - The company completed the acquisition of Astro Machine for $17.1 million, which is now part of the PI segment[121]. - The company anticipates that it will take one to three years for the aerospace industry to fully recover from the impacts of the COVID-19 pandemic[126].