AstroNova Announces Fiscal Second-Quarter 2024 Financial Results

About this update from Astronova, Inc.

Company to Host Conference Call at 9:00 a.m. ET Today WEST WARWICK, R.I. --(BUSINESS WIRE)-- AstroNova, Inc. (Nasdaq: ALOT), a global leader in data visualization technologies, today announced financial results for the second quarter ended July 29, 2023 . Summary Second-quarter revenue of $35.5 million , up 10% YoY, driven by Astro Machine acquisition and continued momentum in aerospace industry Second-quarter GAAP results included pre-tax strategic restructuring charges and related expenses totaling $3.5 million Second-quarter GAAP net loss per share was $0.22 ; non-GAAP diluted earnings per share, which excludes the impact of restructuring charges and retrofit costs, was $0.15 Q2 2024 Financial Highlights GAAP Non-GAAP (excluding impact of restructuring and related expenses) (in thousands, except per share data) Q2 FY 2024 Q2 FY 2023 YoY Q2 FY 2024 Q2 FY 2023 YoY Revenue $35,524 $32,259 10% $35,524 $32,259 10% Gross Profit 9,710 11,382 (15%) 12,658 11,382 11% Gross Margin 27.3% 35.3% (8.0 pts.) 35.6% 35.3% 0.3 pts. Operating Expenses 10,908 10,147 7% 10,353 10,147 2% Operating Income (Loss) (1,198) 1,235 n/m* 2,305 1,235 87% Operating Margin (3.4%) 3.8% n/m* 6.5% 3.8% 2.7 pts. Net Income (Loss) ( $1,617 ) 584 n/m* $1,089 $584 86% Net Income (Loss) per Common Share ( $0.22 ) $0.08 n/m* $0.15 $0.08 83% *Not meaningful See reconciliations between GAAP and non-GAAP measures provided below. CEO Commentary “Our second-quarter financial results reflected the strategic realignment of our Product Identification segment, an initiative that allows us to further capitalize on the synergies of our 2022 acquisition of Astro Machine,” said Greg Woods , AstroNova’s President and Chief Executive Officer. “The strategic realignment enables us to concentrate the segment's resources on the highest-return opportunities by consolidating our PI product line and moving more PI manufacturing from Asia and West Warwick to our Astro Machine plant in Illinois . Although the realignment had a negative effect on our GAAP performance in the second quarter, we believe that it puts us in a position to achieve an anticipated annualized cost savings of $2.4 million , benefitting our results in the quarters to come. “Aside from the restructuring impact, we continued to make operating efficiency improvements in Q2 and we posted double-digit top-line growth highlighted by Astro Machine and ongoing momentum in the aerospace market,” Woods said. “Additionally, we have accelerated our new product development program and, this quarter, we will introduce four new innovative PI products for labeling applications as well as direct-to-package overprinting and high-speed mailing and addressing. These and other new products are among the solutions we will showcase in the coming weeks at major industry events including PACK EXPO in Las Vegas , Labelexpo Europe in Brussels , and PRINTING United Expo in Atlanta . “In our Test & Measurement segment, robust airline passenger traffic and increased aircraft deliveries are creating stronger demand trends for our aerospace printers, supplies, and services. We continue to focus on upgrading and transitioning aerospace customers to our more advanced and feature-rich ToughWriter family of printers, which will help us achieve greater economies of scale as we move forward,” Woods concluded. Second-Quarter Fiscal 2024 Financial Summary Total revenue for the second quarter of fiscal 2024 was $35.5 million , up 10.1% from the year-earlier period. The growth reflected higher revenue in the Product Identification segment as a result of the acquisition of Astro Machine, as well as an increase in Test & Measurement segment revenue associated with continued strength in the aerospace market. Hardware revenue was $11.3 million , a 30.5% increase from the prior-year period. Supplies revenue was $19.7 million , 2.8% higher than the same period in fiscal 2023. Revenue from Service/Other was $4.6 million , up 2.2% from the comparable period last year. Gross profit under generally accepted accounting principles (GAAP) for the second quarter of fiscal 2024 was $9.7 million , or 27.3% of revenue, compared with gross profit of $11.4 million , or 35.3% of revenue, in the year-earlier period. In the 2024 period, gross profit included $2.1 million in charges related to the restructuring of the Company’s Product Identification segment and $852,000 in costs associated with an ongoing program to retrofit certain printers affected by quality and reliability issues from one of the Company’s suppliers. Excluding those charges, gross profit on a non-GAAP basis for the second quarter of fiscal 2024 was $12.7 million , or 35.6% of revenue. GAAP operating expenses in the second quarter of fiscal 2024 totaled $10.9 million , an increase of 7.5% from the same period last year. In the 2024 period, operating expenses included $555,000 in restructuring charges. Excluding those charges, operating expenses on a non-GAAP basis were $10.4 million . The Company reported a GAAP operating loss of $1.2 million for the second quarter of fiscal 2024 versus operating income of $1.2 million a year earlier. Excluding the restructuring charges and retrofit costs in the 2024 period, non-GAAP operating income was $2.3 million . GAAP net loss for the second quarter of fiscal 2024 was $1.6 million , or $0.22 per share, compared with net income of $584,000 , or $0.08 per diluted share, for the comparable period of fiscal 2023. The net loss for the 2024 period included $2.0 million in after-tax restructuring charges and $658,000 in after-tax costs related to the retrofit program. Net income on a non-GAAP basis was $1.1 million , or $0.15 per diluted share. Adjusted EBITDA, which the Company defines as earnings before interest, taxes, depreciation, amortization and share-based compensation, was $154,000 in the second quarter of fiscal 2024, compared with $2.2 million in the same period of fiscal 2023. Further adjusted to exclude restructuring charges and retrofit costs, Adjusted EBITDA would have increased nearly 70% year-over-year to $3.7 million in the second quarter of fiscal 2024. Bookings for the second quarter of fiscal 2024 decreased 13.7% to $30.1 million from $34.8 million in the second quarter of fiscal 2023. Backlog as of July 29, 2023 increased 4.6% to $33.3 million from $31.8 million as of July 30, 2022 . Second-Quarter Fiscal 2024 Operating Segment Results Product Identification Product Identification segment revenue was $25.8 million in the second quarter of fiscal 2024, compared with $23.4 million in the fiscal 2023 second quarter, driven by the acquisition of Astro Machine. Segment operating loss impacted by the restructuring was $461,000 , or (1.8%) of revenue, compared with segment operating profit of $1.6 million , or 7.0% of revenue, a year earlier. Excluding the restructuring and retrofit costs in the 2024 period, non-GAAP operating profit was $3.0 million , or 8.3% of revenue. Test & Measurement Test & Measurement segment revenue increased to $9.7 million in the second quarter of fiscal 2024 from $8.9 million in the second quarter of fiscal 2023. Segment operating profit was $1.9 million , or 19.7% of revenue, compared with segment operating profit of $2.2 million , or 24.4% of revenue, a year earlier. Earnings Conference Call AstroNova will discuss its second-quarter fiscal 2024 financial results in an investor conference call at 9:00 a.m. ET today. To participate on the conference call, please dial (833) 470-1428 ( U.S. and Canada ) or (929) 526-1599 (International) approximately 10 minutes prior to the start time and enter access code 159098. A real-time and an archived audio webcast of the call will be available through the “Investors” section of the AstroNova website, https://investors.astronovainc.com . Use of Non-GAAP Financial Measures In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), this news release contains the non-GAAP financial measures non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, non-GAAP earnings per diluted share, and Adjusted EBITDA. AstroNova believes that the inclusion of these non-GAAP financial measures helps investors gain a meaningful understanding of changes in the Company’s core operating results and can help investors who wish to make comparisons between AstroNova and other companies on both a GAAP and a non-GAAP basis. AstroNova’s management uses these non-GAAP financial measures, in addition to GAAP financial measures, as the basis for measuring its core operating performance and comparing such performance to that of prior periods and to the performance of its competitors. These measures are also used by the Company’s management to assist with their financial and operating decision-making. Please refer to the financial reconciliation tables included in this news release for a reconciliation of GAAP measures to the most directly comparable non-GAAP measures for the three and six months ended July 29, 2023 and July 30, 2022 . About AstroNova AstroNova (Nasdaq: ALOT), a global leader in data visualization technologies since 1969, designs, manufactures, distributes, and services a broad range of products that acquire, store, analyze, and present data in multiple formats. The Product Identification segment provides a wide array of digital, end-to-end product marking and identification solutions including hardware, software, and supplies for OEMs, commercial printers, and brand owners. The Test and Measurement segment provides products designed for airborne printing solutions, avionics, and data acquisition. Our aerospace products include flight deck printing solutions, networking hardware, and specialized aerospace-grade supplies. Our data acquisition systems are used in research and development, flight testing, missile and rocket telemetry production monitoring, power, and maintenance applications. AstroNova is a member of the Russell Microcap® Index and the LD Micro Index (INDEXNYSEGIS: LDMICRO). Additional information is available by visiting https://astronovainc.com/ . Forward-Looking Statements Information included in this news release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact, but rather reflect our current expectations concerning future events and results. These statements may include the use of the words “believes,” “expects,” “intends,” “plans,” “anticipates,” “likely,” “continues,” “may,” “will,” and similar expressions to identify forward-looking statements. Such forward-looking statements, including those concerning the Company’s anticipated performance, involve risks, uncertainties and other factors, some of which are beyond our control, which may cause our actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. These risks, uncertainties and factors include, but are not limited to, (i) the risk that we may not successfully execute or achieve the expected benefits of our restructuring plan for our Product Identification segment, (ii) the risk that we may not be able to realize the expected synergies from our acquisition of Astro Machine, (iii) the risk that apparent improvements in the Aerospace and Defense sectors may not continue and (iv) those factors set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2023 and subsequent filings AstroNova makes with the Securities and Exchange Commission . The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The reader is cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this news release. ASTRONOVA, INC. Condensed Consolidated Statements of Income (Loss) In Thousands Except for Per Share Data (Unaudited) Three Months Ended Six Months Ended July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022 Net Revenue $ 35,524 $ 32,259 $ 70,943 $ 63,269 Cost of Revenue 25,814 20,877 48,847 41,158 Gross Profit 9,710 11,382 22,096 22,111 Total Gross Profit Margin 27.3% 35.3% 31.1% 34.9% Operating Expenses: Selling & Marketing 6,697 5,981 12,707 11,863 Research & Development 1,557 1,595 3,345 3,118 General & Administrative 2,654 2,571 5,780 5,131 Total Operating Expenses 10,908 10,147 21,832 20,112 Operating Income (Loss) (1,198) 1,235 264 1,999 Total Operating Margin -3.4% 3.8% 0.4% 3.2% Other Expense, net 809 431 1,244 710 Income (Loss) Before Taxes (2,007) 804 (980) 1,289 Income Tax Provision (Benefit) (390) 220 (211) 280 Net Income (Loss) $ (1,617) $ 584 $ (769) $ 1,009 Net Income (Loss) per Common Share - Basic $ (0.22) $ 0.08 $ (0.10) $ 0.14 Net Income (Loss) per Common Share - Diluted $ (0.22) $ 0.08 $ (0.10) $ 0.14 Weighted Average Number of Common Shares - Basic 7,420 7,310 7,396 7,287 Weighted Average Number of Common Shares - Diluted 7,420 7,348 7,396 7,355 ASTRONOVA, INC. Consolidated Balance Sheets In Thousands (Unaudited) July 29, 2023 January 31, 2023 ASSETS CURRENT ASSETS Cash and Cash Equivalents $ 4,530 $ 3,946 Accounts Receivable, net 18,005 21,598 Inventories, net 49,081 51,324 Prepaid Expenses and Other Current Assets 2,914 2,894 Total Current Assets 74,530 79,762 PROPERTY, PLANT AND EQUIPMENT 55,934 55,394 Less Accumulated Depreciation (42,043) (41,106) Property, Plant and Equipment, net 13,891 14,288 OTHER ASSETS Intangible Assets, net 20,033 21,232 Goodwill 14,760 14,658 Deferred Tax Assets 6,909 6,907 Right of Use Asset 735 794 Other Assets 1,692 1,566 TOTAL ASSETS $ 132,550 $ 139,207 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES Accounts Payable $ 5,356 $ 8,479 Accrued Compensation 2,668 2,750 Other Liabilities and Accrued Expenses 4,753 3,308 Revolving Line of Credit 13,900 15,900 Current Portion of Long-Term Debt 2,700 2,100 Current Portion of Royalty Obligation 1,600 1,725 Current Liability – Excess Royalty Payment Due 613 562 Income Taxes Payable - 786 Deferred Revenue 1,858 1,888 Total Current Liabilities 33,448 37,498 NON-CURRENT LIABILITIES Long-Term Debt, net of current portion 10,709 12,040 Royalty Obligation, net of current portion 2,789 3,415 Lease Liability, net of current portion 530 555 Income Taxes Payable 491 491 Deferred Revenue - 674 Deferred Tax Liabilities 182 167 TOTAL LIABILITIES 48,149 54,840 SHAREHOLDERS’ EQUITY Common Stock 540 534 Additional Paid-in Capital 62,004 61,131 Retained Earnings 58,406 59,175 Treasury Stock (34,585) (34,235) Accumulated Other Comprehensive Loss, net of tax (1,964) (2,238) TOTAL SHAREHOLDERS’ EQUITY 84,401 84,367 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 132,550 $ 139,207 ASTRONOVA, INC. Revenue and Segment Operating Profit (Loss) In Thousands (Unaudited) Revenue Segment Operating Profit (Loss) Revenue Segment Operating Profit (Loss) Three Months Ended Three Months Ended Six Months Ended Six Months Ended July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022 Product Identification $ 25,777 $ 23,382 $ (461) $ 1,644 $ 50,872 $ 45,106 $ 2,055 $ 3,058 Test & Measurement 9,747 8,877 1,917 2,162 20,071 18,163 3,989 4,072 Total $ 35,524 $ 32,259 1,456 3,806 $ 70,943 $ 63,269 6,044 7,130 Corporate Expenses 2,654 2,571 5,780 5,131 Operating Income (1,198) 1,235 264 1,999 Other Income (Expense), net (809) (431) (1,244) (710) Income (Loss) Before Income Taxes (2,007) 804 (980) 1,289 Income Tax Provision (Benefit) (390) 220 (211) 280 Net Income (Loss) $ (1,617) $ 584 $ (769) $ 1,009 ASTRONOVA, INC. Reconciliation of GAAP to Non-GAAP Results In Thousands Except for Per Share Data (Unaudited) Three Months Ended Six Months Ended July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022 GAAP Revenues $ 35,524 $ 32,259 $ 70,943 $ 63,269 Non-GAAP Revenues $ 35,524 $ 32,259 $ 70,943 $ 63,269 GAAP Cost of Revenues $ 25,814 $ 20,877 $ 48,847 $ 41,158 Restructuring Charges 2,096 - 2,096 - Product Retrofit Costs 852 - 852 - Non-GAAP Cost of Revenues $ 22,866 $ 20,877 $ 45,899 $ 41,158 GAAP Gross Profit $ 9,710 $ 11,382 $ 22,096 $ 22,111 Gross Profit Adjustments 2,948 - 2,948 - Non-GAAP Gross Profit $ 12,658 $ 11,382 $ 25,044 $ 22,111 GAAP Operating Expenses $ 10,908 $ 10,147 $ 21,832 $ 20,112 Restructuring Charges 555 - 555 - Non-GAAP Operating Expenses $ 10,353 $ 10,147 $ 21,277 $ 20,112 GAAP Operating Income/(Loss) $ (1,198) $ 1,235 $ 264 $ 1,999 Restructuring Charges 2,651 - 2,651 - Product Retrofit Costs 852 - 852 - Non-GAAP Operating Income/(Loss) $ 2,305 $ 1,235 $ 3,767 $ 1,999 GAAP Other Income/(Expense) $ (809) $ (431) $ (1,244) $ (710) Non-GAAP Other Income/(Expense) $ (809) $ (431) $ (1,244) $ (710) GAAP Income Tax Expense/(Benefit) $ (390) $ 220 $ (211) $ 280 Tax Adjustments of Non-GAAP Adjustments (797) - (797) - Non-GAAP Income Tax Expense/(Benefit) $ 407 $ 220 $ 586 $ 280 GAAP Net Income/(Expense) $ (1,617) $ 584 $ (769) $ 1,009 Restructuring Charges (2,048) - (2,048) - Product Retrofit Costs (658) - (658) - Non-GAAP Net Income/(Expense) $ 1,089 $ 584 $ 1,937 $ 1,009 GAAP Diluted Earnings/(Loss) Per Share $ (0.22) $ 0.08 $ (0.10) $ 0.14 Restructuring Charges (0.28) - (0.28) - Product Retrofit Costs (0.09) - (0.09) - Non-GAAP Diluted Earnings/(Loss) Per Share $ 0.15 $ 0.08 $ 0.27 $ 0.14 ASTRONOVA, INC. Reconciliation of Net Income to EBITDA Amounts In Thousands (Unaudited) Three Months Ended Six Months Ended July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022 GAAP Net Income/(Loss) $ (1,617) $ 584 $ (769) $ 1,009 Interest Expense 674 210 1,289 385 Income Tax Expense/(Benefit) (390) 220 (211) 280 Depreciation/Amortization 1,089 908 2,144 1,820 EBITDA $ (244) $ 1,922 $ 2,453 $ 3,494 Restructuring Charges 2,048 - 2,048 - Product Retrofit Costs 658 - 658 - Income Tax Expense/(Benefit) - Restructuring Charges 603 - 603 - Income Tax Expense/(Benefit) - Product Retrofit Costs 194 - 194 - EBITDA Less Restructuring & Retrofit Items $ 3,259 $ 1,922 $ 5,956 $ 3,494 ASTRONOVA, INC. Reconciliation of Net Income to Adjusted EBITDA Amounts In Thousands (Unaudited) Three Months Ended Six Months Ended July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022 GAAP Net Income/(Loss) $ (1,617) $ 584 $ (769) $ 1,009 Interest Expense 674 210 1,289 385 Income Tax Expense/(Benefit) (390) 220 (211) 280 Depreciation/Amortization 1,089 908 2,144 1,820 Share-Based Compensation 398 235 754 572 Adjusted EBITDA $ 154 $ 2,157 $ 3,207 $ 4,066 Restructuring Charges 2,048 - 2,048 - Product Retrofit Costs 658 - 658 - Income Tax Expense/(Benefit) - Restructuring Charges 603 - 603 - Income Tax Expense/(Benefit) - Product Retrofit Costs 194 - 194 - Adjusted EBITDA Less Restructuring & Retrofit Items $ 3,657 $ 2,157 $ 6,710 $ 4,066 ASTRONOVA, INC. Reconciliation of Segment GAAP to Non-GAAP Operating Profit Amounts In Thousands (Unaudited) Three Months Ended Six Months Ended July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022 ProductIdentification Test& Measurement Total ProductIdentification Test& Measurement Total ProductIdentification Test& Measurement Total ProductIdentification Test& Measurement Total GAAP - Segment Operating Profit/(Loss) $ (461) $ 1,917 $ 1,456 $ 1,644 $ 2,162 $ 3,806 $ 2,055 $ 3,989 $ 6,044 $ 3,058 $ 4,072 $ 7,130 Restructuring Charges 2,568 - 2,568 - - - 2,568 - 2,568 - - - Product Retrofit Costs 852 - 852 - - - 852 - 852 - - - Non-GAAP - Segment Operating Profit/(Loss) $ 2,959 $ 1,917 $ 4,876 $ 1,644 $ 2,162 $ 3,806 $ 5,475 $ 3,989 $ 9,464 $ 3,058 $ 4,072 $ 7,130 View source version on businesswire.com : https://www.businesswire.com/news/home/20230905022990/en/ Scott Solomon Senior Vice President Sharon Merrill Associates, Inc. (857) 383-2409 [email protected] Source: AstroNova

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