AstroNova(ALOT) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Overall revenue for Q2 2022 was $29.8 million, an increase of 8% year-over-year and 3% sequentially from Q1 2022 [7][17] - Gross profit reached$ 11.1 million, up 13% from the previous year, with a gross margin of 37.1%, an increase of 170 basis points [17] - Net income was $978,000, or$ 0.13 per diluted share, compared to essentially break-even last year [17] - EBITDA was reported at $2.1 million, representing 7.2% of revenue, while adjusted EBITDA was$ 2.6 million, or 8.6% of revenue [17] Business Line Data and Key Metrics Changes - Product Identification revenue increased by 9% to $23.1 million, with strong contributions from hardware, supply, and service categories [9] - Test & Measurement segment revenue rose by 5% year-over-year and 6% sequentially, with notable sales increases in printers, supplies, parts, and repairs [11] - Operating income for the Product Identification segment was$ 188,000, down from the prior year, while Test & Measurement segment operating profit was $907,000, up from a loss last year [18] Market Data and Key Metrics Changes - Domestic revenue accounted for 57.7% of total revenue, while international revenue made up 42.3% [19] - The aerospace market showed signs of recovery, particularly in the U.S., Europe, and China, although international travel remains below pre-pandemic levels [11] Company Strategy and Development Direction - The company is focusing on increasing inventory levels as a precaution against ongoing supply chain issues [8] - Continued investment in digital marketing and product development is emphasized, with plans to attend major trade shows to enhance customer engagement [10] - The company is positioned to capitalize on growth opportunities in both the Product Identification and Test & Measurement segments [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged supply chain challenges but noted they did not significantly impact revenue [20] - The company anticipates a positive revenue trajectory for the Test & Measurement segment in the second half of the year [12] - Management expressed confidence in the recovery of the aerospace market and the demand for their products [11] Other Important Information - The company recorded benefits from the CARES Act, including loan forgiveness and employee retention credits, which positively impacted financial results [14][15] - Cash equivalents at the end of the quarter were$ 11.4 million, with debt reduced to $9.5 million [21] Q&A Session Summary Question: How much of revenue was impacted by supply chain issues? - Management indicated that while supply chain issues did have some effect, it was not significant and they were able to fulfill most demand [24][25] Question: What is the recurring revenue aspect for Q2? - Supplies revenue for the quarter was$ 18.7 million, up 9% from the prior year [31] Question: What is the outlook for the A&D side? - Management highlighted a new multiyear government program in the Test & Measurement segment, indicating strong future benefits from this initiative [30] Question: Will both segments see growth in the second half? - Management confirmed that both segments are expected to perform well in the second half of the year [33]