AstroNova Reports Fiscal 2024 Third-Quarter Financial Results

About this update from Astronova, Inc.

Company to Host Conference Call at 9:00 a.m. ET Today Third-Quarter Fiscal 2024 Financial Highlights Revenue of $37.5 million , down 4.7% year over year (YoY) Gross margin of 39.4%, up 770 basis points YoY Operating margin of 12.3%, up 890 basis points YoY Diluted EPS of $0.37 , up 825% YoY Record quarterly Adjusted EBITDA of $5.7 million , or 15% of revenue, up 135% YoY WEST WARWICK, R.I. --(BUSINESS WIRE)-- AstroNova, Inc. (Nasdaq: ALOT), a global leader in data visualization technologies, today reported financial results for the fiscal 2024 third quarter ended October 28, 2023 . GAAP diluted earnings per share were $0.37 compared with $0.04 per diluted share in the year-earlier period. Last year’s third-quarter GAAP results included transaction costs of $0.07 per diluted share associated with the acquisition of Astro Machine, Inc. at the beginning of that quarter. This is the first quarter in which Astro Machine’s results are included in all comparisons with the prior-year periods. Commentary from Greg Woods , President and Chief Executive Officer “We delivered significantly improved earnings performance in the third quarter despite an 11% YoY revenue decline in our Product Identification (PI) segment. This decline was largely driven by sidelined printers that were affected by the previously discussed ink quality issues from one of our suppliers and, to a lesser degree, the exit of some low margin printers last quarter from our portfolio. As our retrofitting program continues, the supplies revenue from these printers is expected to recover over the coming quarters. “Our strong profit and cash flow improvement was fueled by a combination of favorable product mix in both segments, continued focus on expense control and the benefits of the PI segment realignment last quarter. “Our PI segment generated a 62% increase in third-quarter operating profit as we focus on more profitable products, transition more printer manufacturing from Asia and West Warwick to the Astro Machine plant in Illinois , exit low margin or low volume label printer models, consolidate international sales and distribution facilities, and streamline our global channel partner network. “Our Test and Measurement segment maintained its strong performance in the third quarter, bolstered by the ongoing post-pandemic rebound of the commercial aviation market. Segment revenue increased 16%, while segment operating profit was up 50%. “The recently completed strategic restructuring has significantly improved the cost structure and margin profile of the business and we expect both segments to perform in line with these results again in the fourth quarter.” Third-Quarter Fiscal 2024 Income Statement Summary ($ in thousands, except per share data) Q3 2024 Q3 2023 YoY Revenue $37,549 $39,405 (5%) Gross Profit $14,779 $12,482 18% Gross Margin 39.4% 31.7% 770 bps Operating Expenses $10,161 $11,136 (9%) Operating Income $4,618 $1,346 243% Operating Margin 12.3% 3.4% 890 bps Net Income $2,752 $289 870% Net Income Per Diluted Share $0.37 $0.04 825% Third-Quarter Fiscal 2024 Financial Summary Total revenue was $37.5 million , down 4.7% from the year-earlier period. The decrease reflected lower revenue in the PI segment, due primarily to lower supplies revenue from printers impacted by the defective ink from one of our larger suppliers and, in part, to the Company’s product rationalization initiatives. The decline in PI was partly offset by higher revenue from the Test & Measurement segment. Hardware revenue was $12.9 million , a 7.7% increase from the prior-year period. Supplies revenue was $20.0 million , down 13% from the same period in fiscal 2023. Revenue from Service/Other was $4.7 million , up 4.4% from the comparable period last year. Gross profit totaled $14.8 million , or 39.4% of revenue, compared with gross profit of $12.5 million , or 31.7% of revenue, in the year-earlier period. The increase was attributable primarily to favorable product mix, lower manufacturing variances and reduced period costs and the Company’s strategic realignment of its PI segment. Operating expenses were $10.2 million , a decrease of 8.8% from $11.1 million in the same period last year, driven primarily by lower general and administrative expenses. Operating income increased to $4.6 million , or 12.3% of revenue, from $1.3 million , or 3.4% of revenue, in the same period of fiscal 2023. The Company reported net income of $2.8 million , or $0.37 per diluted share, compared with $289,000 , or $0.04 per diluted share, a year earlier. Net income under Generally Accepted Accounting Principles (GAAP) for the third quarter of fiscal 2023 included transaction costs of $540,000 , or $0.07 per diluted share, associated with the August 2022 acquisition of Astro Machine. On a non-GAAP basis, net income for the third quarter of fiscal 2023 was $829,000 , or $0.11 per diluted share. Earnings before interest, taxes, depreciation, and amortization (EBITDA) was $5.3 million for the third quarter of fiscal 2024, compared with $2.0 million for the same period in fiscal 2023. Excluding the Astro Machine transaction costs, EBITDA for the third quarter of fiscal 2023 was $2.7 million . Adjusted EBITDA, which the Company defines as earnings before interest, taxes, depreciation, amortization and share-based compensation, was $5.7 million , or 15% of revenue, in the third quarter of fiscal 2024, compared with $2.4 million , or 6% of revenue, in the same period of fiscal 2023. Excluding transaction costs, Adjusted EBITDA for the third quarter of fiscal 2023 was $3.1 million . Bookings for the third quarter of fiscal 2024 increased 1% to $35.5 million from $35.0 million in the third quarter of fiscal 2023. Backlog as of October 28, 2023 decreased 20% to $31.2 million from $39.3 million as of October 29, 2022 . Third-Quarter Fiscal 2024 Operating Segment Results Product Identification PI segment revenue was $26.5 million in the third quarter of fiscal 2024, down 11.2% from $29.9 million in the same period a year earlier. Segment operating profit was $4.8 million , or 18.1% of revenue, compared with $3.0 million , or 9.9% of revenue, in the same period of fiscal 2023. Test & Measurement Test & Measurement segment revenue increased 15.5% to $11.0 million in the third quarter of fiscal 2024 from $9.5 million in the same period last year. Segment operating profit was $2.6 million , or 23.2% of revenue, compared with $1.7 million , or 18.0% of revenue, a year earlier. Earnings Conference Call Information AstroNova will discuss the third-quarter fiscal 2024 financial results in an investor conference call at 9:00 a.m. ET today. To access the conference call, please dial (833) 470-1428 ( U.S. and Canada ) or (404) 975-4839 (International) approximately 10 minutes prior to the start time and enter access code 519743. 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 EBITDA, Adjusted EBITDA, non-GAAP net income and non-GAAP net income per diluted share. 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 nine months ended October 28, 2023 and October 29, 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 be able to realize the expected synergies from our acquisition of Astro Machine, (ii) the risk that apparent improvements in the Aerospace and Defense sectors may not continue and (iii) 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 Nine Months Ended October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022 Net Revenue $ 37,549 $ 39,405 $ 108,493 $ 102,674 Cost of Revenue 22,770 26,923 71,618 68,080 Gross Profit 14,779 12,482 36,875 34,594 Total Gross Profit Margin 39.4% 31.7% 34.0% 33.7% Operating Expenses: Selling & Marketing 5,744 5,908 18,451 17,771 Research & Development 1,683 1,903 5,028 5,021 General & Administrative 2,734 3,325 8,514 8,456 Total Operating Expenses 10,161 11,136 31,993 31,248 Operating Income 4,618 1,346 4,882 3,346 Total Operating Margin 12.3% 3.4% 4.5% 3.3% Other Expense, net 917 955 2,161 1,665 Income Before Taxes 3,701 391 2,721 1,681 Income Tax Provision 949 102 738 383 Net Income $ 2,752 $ 289 $ 1,983 $ 1,298 Net Income per Common Share - Basic $ 0.37 $ 0.04 $ 0.27 $ 0.18 Net Income per Common Share - Diluted $ 0.37 $ 0.04 $ 0.27 $ 0.18 Weighted Average Number of Common Shares - Basic 7,428 7,324 7,407 7,299 Weighted Average Number of Common Shares - Diluted 7,485 7,485 7,477 7,363 ASTRONOVA, INC. Consolidated Balance Sheets In Thousands (Unaudited) October 28, 2023 January 31, 2023 ASSETS CURRENT ASSETS Cash and Cash Equivalents $ 4,827 $ 3,946 Accounts Receivable, net 21,999 21,598 Inventories, net 47,005 51,324 Prepaid Expenses and Other Current Assets 3,056 2,894 Total Current Assets 76,887 79,762 PROPERTY, PLANT AND EQUIPMENT 56,572 55,394 Less Accumulated Depreciation (42,320 ) (41,106 ) Property, Plant and Equipment, net 14,252 14,288 OTHER ASSETS Intangible Assets, net 19,420 21,232 Goodwill 14,440 14,658 Deferred Tax Assets 6,903 6,907 Right of Use Asset 650 794 Other Assets 1,651 1,566 TOTAL ASSETS $ 134,203 $ 139,207 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES Accounts Payable $ 4,893 $ 8,479 Accrued Compensation 3,256 2,750 Other Liabilities and Accrued Expenses 4,410 3,308 Revolving Line of Credit 14,900 15,900 Current Portion of Long-Term Debt 2,700 2,100 Current Portion of Royalty Obligation 1,500 1,725 Current Liability – Excess Royalty Payment Due 542 562 Income Taxes Payable 56 786 Deferred Revenue 1,441 1,888 Total Current Liabilities 33,698 37,498 NON-CURRENT LIABILITIES Long-Term Debt, net of current portion 10,039 12,040 Royalty Obligation, net of current portion 2,476 3,415 Lease Liability, net of current portion 459 555 Income Taxes Payable 491 491 Deferred Revenue - 674 Deferred Tax Liabilities 152 167 TOTAL LIABILITIES 47,315 54,840 SHAREHOLDERS’ EQUITY Common Stock 540 534 Additional Paid-in Capital 62,340 61,131 Retained Earnings 61,158 59,175 Treasury Stock (34,588 ) (34,235 ) Accumulated Other Comprehensive Loss, net of tax (2,562 ) (2,238 ) TOTAL SHAREHOLDERS’ EQUITY 86,888 84,367 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 134,203 $ 139,207 ASTRONOVA, INC. Revenue and Segment Operating Profit In Thousands (Unaudited) Revenue Segment Operating Profit Revenue Segment Operating Profit Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended October 28 , 2023 October 29 , 2022 October 28 , 2023 October 29 , 2022 October 28 , 2023 October 29 , 2022 October 28 , 2023 October 29 , 2022 Product Identification $ 26,543 $ 29,879 $ 4,794 $ 2,960 $ 77,416 $ 74,985 $ 6,848 $ 6,019 Test & Measurement 11,006 9,526 2,558 1,711 31,077 27,689 6,548 5,783 Total $ 37,549 $ 39,405 7,352 4,671 $ 108,493 $ 102,674 13,396 11,802 Corporate Expenses 2,734 3,325 8,514 8,456 Operating Income 4,618 1,346 4,882 3,346 Other Income (Expense), net (917 ) (955 ) (2,161 ) (1,665 ) Income Before Income Taxes 3,701 391 2,721 1,681 Income Tax Provision 949 102 738 383 Net Income $ 2,752 $ 289 $ 1,983 $ 1,298 ASTRONOVA, INC. Reconciliation of GAAP to Non-GAAP Results In Thousands Except for Per Share Data (Unaudited) Three Months Ended Nine Months Ended October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022 GAAP Revenues $ 37,549 $ 39,405 $ 108,493 $ 102,674 Non-GAAP Revenues $ 37,549 $ 39,405 $ 108,493 $ 102,674 GAAP Cost of Revenues $ 22,770 $ 26,923 $ 71,618 $ 68,080 Restructuring Charges - - 2,096 - Product Retrofit Costs - - 852 - Non-GAAP Cost of Revenues $ 22,770 $ 26,923 $ 68,670 $ 68,080 GAAP Gross Profit $ 14,779 $ 12,482 $ 36,875 $ 34,594 Restructuring Charges - - 2,096 - Product Retrofit Costs - - 852 - Non-GAAP Gross Profit $ 14,779 $ 12,482 $ 39,823 $ 34,594 GAAP Operating Expenses $ 10,161 $ 11,136 $ 31,993 $ 31,248 Transaction Costs - (717 ) - (717 ) Restructuring Charges - - (555 ) - Non-GAAP Operating Expenses $ 10,161 $ 10,419 $ 31,438 $ 30,531 GAAP Operating Income $ 4,618 $ 1,346 $ 4,882 $ 3,346 Transaction Costs - 717 - 717 Restructuring Charges - - 2,651 - Product Retrofit Costs - - 852 - Non-GAAP Operating Income $ 4,618 $ 2,063 $ 8,385 $ 4,063 GAAP Other Income/(Expense) $ (917 ) $ (955 ) $ (2,161 ) $ (1,665 ) Non-GAAP Other Income/(Expense) $ (917 ) $ (955 ) $ (2,161 ) $ (1,665 ) GAAP Income Tax Expense $ 949 $ 102 $ 738 $ 383 Tax Adjustments of Non-GAAP Adjustments - 177 797 177 Non-GAAP Income Tax Expense $ 949 $ 279 $ 1,535 $ 560 GAAP Net Income $ 2,752 $ 289 $ 1,983 $ 1,298 Transaction Costs - 540 - 540 Restructuring Charges - - 2,048 - Product Retrofit Costs - - 658 - Non-GAAP Net Income $ 2,752 $ 829 $ 4,689 $ 1,838 GAAP Diluted Earnings Per Share $ 0.37 $ 0.04 $ 0.27 $ 0.18 Transaction Costs - - - 0.07 Restructuring Charges - - 0.28 - Product Retrofit Costs - - 0.09 - Non-GAAP Diluted Earnings Per Share $ 0.37 $ 0.04 $ 0.63 $ 0.25 ASTRONOVA, INC. Reconciliation of Net Income to EBITDA Amounts In Thousands (Unaudited) Three Months Ended Nine Months Ended October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022 GAAP Net Income $ 2,752 $ 289 $ 1,983 $ 1,298 Interest Expense 630 701 1,919 1,086 Income Tax Expense 949 102 738 383 Depreciation/Amortization 1,014 915 3,158 2,737 EBITDA $ 5,345 $ 2,007 $ 7,798 $ 5,504 Transaction Costs - 540 - 540 Restructuring Charges - - 2,048 - Product Retrofit Costs - - 658 - Income Tax Expense - Transaction Costs - 176 - 176 Income Tax Expense - Restructuring Charges - - 603 - Income Tax Expense - Product Retrofit Costs - - 194 - EBITDA Less Restructuring & Retrofit Items $ 5,345 $ 2,723 $ 11,301 $ 6,220 ASTRONOVA, INC. Reconciliation of Net Income to Adjusted EBITDA Amounts In Thousands (Unaudited) Three Months Ended Nine Months Ended October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022 GAAP Net Income $ 2,752 $ 289 $ 1,983 $ 1,298 Interest Expense 630 701 1,919 1,086 Income Tax Expense 949 102 738 383 Depreciation/Amortization 1,014 915 3,158 2,737 Share-Based Compensation 311 405 1,065 977 Adjusted EBITDA $ 5,656 $ 2,412 $ 8,863 $ 6,481 Transaction Costs - 540 - 540 Restructuring Charges - - 2,048 - Product Retrofit Costs - - 658 - Income Tax Expense - Transaction Costs - 176 - 176 Income Tax Expense - Restructuring Charges - - 603 - Income Tax Expense - Product Retrofit Costs - - 194 - Adjusted EBITDA Less Restructuring & Retrofit Items $ 5,656 $ 3,128 $ 12,366 $ 7,197 ASTRONOVA, INC. Reconciliation of Segment GAAP to Non-GAAP Operating Income Amounts In Thousands (Unaudited) Three Months Ended Nine Months Ended October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022 Product Identification Test & Measurement Total Product Identification Test & Measurement Total Product Identification Test & Measurement Total Product Identification Test & Measurement Total GAAP - Segment Operating Profit $ 4,794 $ 2,558 $ 7,352 $ 2,960 $ 1,711 $ 4,671 $ 6,848 $ 6,548 $ 13,396 $ 6,019 $ 5,783 $ 11,802 Restructuring Charges - - - - - - 2,568 - 2,568 - - - Product Retrofit Costs - - - - - - 852 - 852 - - - Non-GAAP - Segment Operating Profit $ 4,794 $ 2,558 $ 7,352 $ 2,960 $ 1,711 $ 4,671 $ 10,268 $ 6,548 $ 16,816 $ 6,019 $ 5,783 $ 11,802 View source version on businesswire.com : https://www.businesswire.com/news/home/20231205741891/en/ Scott Solomon Senior Vice President Sharon Merrill Advisors (857) 383-2409 [email protected] Source: AstroNova

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