AstroNova Reports Fiscal 2025 Second Quarter Financial Results

About this update from Astronova, Inc.

Company to host conference call at 9:30 a.m. ET today Revenue of $40.5 million , up 14.1% year over year Gross margin of 35.3%, up 800 basis points year over year; non-GAAP gross margin of 35.6%, unchanged year over year Operating income of $1.1 million ; non-GAAP operating income of $2.2 million Net loss per share of $(0.04) vs. $(0.22) in the second quarter of fiscal year 2024; non-GAAP diluted earnings per share of $0.08 vs. $0.15 in the second quarter of fiscal 2024 Adjusted EBITDA of $3.9 million , up 5.3% year over year WEST WARWICK, R.I. --(BUSINESS WIRE)-- AstroNova, Inc. (Nasdaq: ALOT), a global leader in data visualization technologies, today announced financial results for its fiscal 2025 second quarter ended August 3, 2024 . CEO Commentary “We demonstrated the resilience of our Product Identification (PI) and Test & Measurement (T&M) segments during a second quarter in which we began shipping a previously delayed order and benefited from the resolution of supply chain shortages,” said Greg Woods , AstroNova’s President and Chief Executive Officer. “In PI, total revenue increased more than 5% year-over-year and more than 17% sequentially, driven primarily by organic growth. T&M revenue grew 37% sequentially and year-over-year, reflecting continued momentum from our Aerospace product line. “During the quarter we began the process of integrating our May acquisition of MTEX NS. Because MTEX was an entrepreneurial, private company, the integration got off to a slow start in the quarter, generating revenue of only $0.8 million and an operating loss of $1.4 million . We expect it to take through the remainder of fiscal 2025 to transition MTEX’s systems, processes and business tools to those of the AstroNova Operating System,” Woods said. “We remain excited about MTEX’s core strengths, including its engineering and manufacturing capabilities and especially its game-changing ink and printhead technologies. In the coming months we will be devoting additional resources to integrating that technology into more of our Product Identification products. Buoyed by several large tradeshows since the acquisition, MTEX has built a strong product backlog that we expect to begin shipping in the third and fourth quarters, which will enable the business to meet our target revenue contribution of $8 million to $10 million for full-year fiscal 2025.” Business Outlook “Looking ahead, we are optimistic about our growth prospects,” Woods continued. “We are well-positioned to continue driving organic growth, supported by our commitment to delivering innovative, high-margin products while maintaining strong cost controls. We anticipate achieving our fiscal year targets for revenue growth. As a result of the MTEX integration, we have reduced our consolidated FY 2025 Adjusted EBITDA margin estimate to a range of 9% to 10% and expect to be within the range of 13% to 14% in fiscal 2026.” Q2 FY 2025 Financial Results GAAP Non-GAAP ($ in thousands except per share data) Q2 FY25 Q2 FY24 YoY Q2 FY25 Q2 FY24 YoY Revenue $40,539 $35,524 14.1% Gross Profit $14,326 $9,710 47.5% $14,446 $12,659 14.1% Gross Margin 35.3% 27.3% 800 pts 35.6% 35.6% - Operating Margin 2.6% (3.4%) 600 pts 5.5% 6.5% (100 pts) Net (Loss) Income $(311) $(1,617) - $572 $1,089 (47.5%) Net (Loss) Income Per Common Share $(0.04) $(0.22) - $0.08 $0.15 (46.7%) See reconciliation tables GAAP to Non-GAAP reconciliations. Adjusted EBITDA was $3.9 million for the second quarter of fiscal 2025, compared with $3.7 million in the comparable period of fiscal 2024. Adjusted EBITDA for the fiscal 2025 period excludes the impact of $1.7 million in costs related to stock-based compensation, CFO transition and MTEX acquisition-related expenses. Adjusted EBITDA for the fiscal 2024 period excludes the impact of stock-based compensation, retrofit and restructuring costs of $3.9 million . Bookings for the second quarter of fiscal 2025 were $35.8 million compared with $30.1 million in the second quarter of fiscal 2024. Bookings were primarily higher in the Test and Measurement segment. Backlog as of August 3, 2024 , was $29.9 million , compared with $31.6 million at the end of the first quarter of fiscal 2025, as some shipments delayed in the first quarter were shipped in the second quarter. Q2 FY 2025 Operating Segment Results Product Identification PI segment revenue was $27.2 million in the second quarter of fiscal 2025, compared with $25.8 million in the second quarter of 2024, reflecting organic growth and the addition of MTEX NS. Segment operating profit was $2.3 million , or 8.6% of revenue, compared with a segment operating loss of $461,000 , or (1.8%) of revenue, in the same period last year. Excluding the results of MTEX in fiscal 2025 and certain expenses in both periods (see reconciliation tables below for GAAP reconciliation), non-GAAP operating profit was $3.6 million , or 13.7% of revenue in the fiscal 2025 period, compared with non-GAAP operating profit of $3.0 million , or 11.5% of revenue, in the same period of fiscal 2024. Test & Measurement Test & Measurement (T&M) segment revenue was $13.4 million in the second quarter of fiscal 2025, compared with $9.7 million in the same period of fiscal 2024, representing a 37.2% increase. Segment operating profit was $3.8 million , or 28.7% of revenue, in the second quarter of fiscal 2025 compared with $1.9 million , or 19.7% of revenue, in the second quarter of fiscal 2024. This improvement reflected higher revenue and $1.3 million in revenue and $1.0 million in operating profit related to non-recurring items. Earnings Conference Call Information AstroNova will discuss its fiscal 2025 second quarter financial results in an investor conference call at 9:30 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 381674. 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 income, non-GAAP operating margin, non-GAAP net income, non-GAAP net income (loss) per common 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 table included in this news release for a reconciliation of the non-GAAP measures to the most directly comparable GAAP measures for the three months ended August 3, 2024 , and July 29, 2023 . AstroNova has not reconciled the forward-looking Adjusted EBITDA growth percentage included in its 2025 financial targets and outlook to the most directly comparable forward-looking GAAP measure because this cannot be done without unreasonable effort due to the lack of predictability regarding cost of sales, operating expenses, depreciation and amortization, and stock-based compensation. The impact of any of these items, individually or in the aggregate, may be significant. 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 MTEX NS, (ii) the risk that apparent improvements in the Aerospace sector may not continue, (iii) the risk that supply chain issues may persist longer than we expect, (iv) the risk that we may not be able to incorporate customer-requested design enhancements into our products on the timeframe that we expect or at all, (v) the risk that we may not be able to ship delayed hardware items on the timeline we expect or at all, and (vi) those factors set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2024 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 In Thousands Except for Per Share Data (Unaudited) Three Months Ended August 3 , 2024 July 29 , 2023 Net Revenue $ 40,539 $ 35,524 Cost of Revenue 26,213 25,814 Gross Profit 14,326 9,710 Total Gross Profit Margin 35.3 % 27.3 % Operating Expenses: Selling & Marketing 6,732 6,697 Research & Development 1,412 1,557 General & Administrative 5,121 2,654 Total Operating Expenses 13,265 10,908 Operating Income (Loss) 1,061 (1,198 ) Total Operating Margin 2.6 % (3.4 )% Other Expense, net 1,111 809 Income (Loss) Before Taxes (50 ) (2,007 ) Income Tax Provision (Benefit) 261 (390 ) Net Income (Loss) $ (311 ) $ (1,617 ) Net Income (Loss) per Common Share - Basic $ (0.04 ) $ (0.22 ) Net Income (Loss) per Common Share - Diluted $ (0.04 ) $ (0.22 ) Weighted Average Number of Common Shares - Basic 7,516 7,420 Weighted Average Number of Common Shares - Diluted 7,516 7,420 Six Months Ended August 3 , 2024 July 29 , 2023 Net Revenue $ 73,500 $ 70,943 Cost of Revenue 47,202 48,847 Gross Profit 26,298 22,096 Total Gross Profit Margin 35.8 % 31.1 % Operating Expenses: Selling & Marketing 12,388 12,707 Research & Development 3,015 3,345 General & Administrative 8,488 5,780 Total Operating Expenses 23,891 21,832 Operating Income 2,407 264 Total Operating Margin 3.3 % 0.4 % Other Expense, net 1,711 1,244 Income (Loss) Before Taxes 696 (980 ) Income Tax Provision (Benefit) (173 ) (211 ) Net Income (Loss) $ 869 $ (769 ) Net Income (Loss) per Common Share - Basic $ 0.12 $ (0.10 ) Net Income (Loss) per Common Share - Diluted $ 0.11 $ (0.10 ) Weighted Average Number of Common Shares - Basic 7,489 7,396 Weighted Average Number of Common Shares - Diluted 7,617 7,396 ASTRONOVA, INC. Consolidated Balance Sheets In Thousands (Unaudited) August 3 , 2024 January 31 , 2024 ASSETS CURRENT ASSETS Cash and Cash Equivalents $ 4,824 $ 4,527 Accounts Receivable, net 23,450 23,056 Inventories, net 50,569 46,371 Prepaid Expenses and Other Current Assets 4,218 2,720 Total Current Assets 83,061 76,674 PROPERTY, PLANT AND EQUIPMENT 69,215 57,046 Less Accumulated Depreciation (50,465 ) (42,861 ) Property, Plant and Equipment, net 18,750 14,185 OTHER ASSETS Intangible Assets, net 27,314 18,836 Goodwill 25,368 14,633 Deferred Tax Assets 10,854 6,882 Right of Use Asset 1,920 603 Other Assets 1,750 1,438 TOTAL ASSETS $ 169,017 $ 133,251 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES Accounts Payable $ 10,456 $ 8,068 Accrued Compensation 3,577 2,923 Other Liabilities and Accrued Expenses 4,369 2,706 Revolving Line of Credit 13,354 8,900 Current Portion of Long-Term Debt 6,513 2,842 Short-Term Debt 3,092 - Current Portion of Royalty Obligation 1,575 1,700 Current Liability – Excess Royalty Payment Due 798 935 Income Taxes Payable - 349 Deferred Revenue 785 1,338 Total Current Liabilities 44,519 29,761 NON-CURRENT LIABILITIES Long-Term Debt, net of current portion 22,675 10,050 Royalty Obligation, net of current portion 1,663 2,093 Lease Liability, net of current portion 1,633 415 Grant Deferred Revenue 1,476 - Contingent Liability Earn Out 1,629 - Income Tax Payables 551 551 Deferred Tax Liabilities 3,121 99 TOTAL LIABILITIES 77,267 42,969 SHAREHOLDERS’ EQUITY Common Stock 546 541 Additional Paid-in Capital 63,563 62,684 Retained Earnings 64,739 63,869 Treasury Stock (35,025 ) (34,593 ) Accumulated Other Comprehensive Loss, net of tax (2,073 ) (2,219 ) TOTAL SHAREHOLDERS’ EQUITY 91,750 90,282 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 169,017 $ 133,251 ASTRONOVA, INC. Condensed Consolidated Statements of Cash Flows (In Thousands) (Unaudited) Six Months Ended August 3, 2024 July 29, 2023 Cash Flows from Operating Activities: Net Income (Loss) $ 869 $ (769 ) Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and Amortization 2,216 2,144 Amortization of Debt Issuance Costs 14 11 Share-Based Compensation 806 754 Restructuring - non-cash - 2,040 Changes in Assets and Liabilities, net of impact of acquisition: Accounts Receivable 3,612 3,612 Inventories (384 ) 283 Income Taxes (721 ) (1,461 ) Accounts Payable and Accrued Expenses 2,409 (2,267 ) Deferred Revenue (619 ) - Other (1,136 ) 371 Net Cash Provided by Operating Activities 7,066 4,718 Cash Flows from Investing Activities: Purchases of Property, Plant and Equipment (830 ) (494 ) Cash Paid for MTEX Acquisition, net of cash acquired (20,729 ) - Net Cash Provided (Used) for Investing Activities (21,559 ) (494 ) Cash Flows from Financing Activities: Net Cash Proceeds from Employee Stock Option Plans 13 71 Net Cash Proceeds from Share Purchases under Employee Stock Purchase Plan 65 54 Net Cash Used for Payment of Taxes Related to Vested Restricted Stock (432 ) (350 ) Borrowings under Revolving Credit Facility 3,912 - Repayment under Revolving Credit Facility - (2,000 ) Proceeds from Long-Term Debt Borrowings 15,078 - Payment of Minimum Guarantee Royalty Obligation (750 ) (875 ) Principal Payments of Long-Term Debt (3,274 ) (750 ) Payments of Debt Issuance Costs (35 ) - Net Cash Provided (Used) for Financing Activities 14,577 (3,850 ) Effect of Exchange Rate Changes on Cash and Cash Equivalents 213 210 Net Increase in Cash and Cash Equivalents 297 584 Cash and Cash Equivalents, Beginning of Period 4,527 3,946 Cash and Cash Equivalents, End of Period $ 4,824 $ 4,530 Supplemental Disclosures of Cash Flow Information: Cash Paid During the Period for: Cash Paid During the Period for Interest $ 1,008 $ 1,184 Cash Paid During the Period for Income Taxes, net of refunds $ 540 $ 1,264 Non-Cash Transactions: Capital Lease Obtained in Exchange for Capital Lease Liabilities $ 1,455 $ — ASTRONOVA, INC. Revenue and Segment Operating Profit In Thousands (Unaudited) Revenue Segment Operating Profit Three Months Ended Three Months Ended August 3 , 2024 July 29 , 2023 August 3 , 2024 July 29 , 2023 Product Identification $ 27,165 $ 25,777 $ 2,348 $ (461 ) Test & Measurement 13,374 9,747 3,834 1,917 Total $ 40,539 $ 35,524 6,182 1,456 Corporate Expenses 5,121 2,654 Operating Income (Loss) 1,061 (1,198 ) Other Expense, net 1,111 809 Income (Loss) Before Income Taxes (50 ) (2,007 ) Income Tax Provision (Benefit) 261 (390 ) Net Income (Loss) $ (311 ) $ (1,617 ) Revenue Segment Operating Profit Six Months Ended Six Months Ended August 3 , 2024 July 29 , 2023 August 3 , 2024 July 29 , 2023 Product Identification $ 50,350 $ 50,872 $ 5,340 $ 2,055 Test & Measurement 23,150 20,071 5,555 3,989 Total $ 73,500 $ 70,943 10,895 6,044 Corporate Expenses 8,488 5,780 Operating Income 2,407 264 Other Expense, net 1,711 1,244 Income (Loss) Before Income Taxes 696 (980 ) Income Tax Provision (Benefit) (173 ) (211 ) Net Income (Loss) $ 869 $ (769 ) ASTRONOVA, INC. Reconciliation of GAAP to Non-GAAP Items In Thousands Except for Per Share Data (Unaudited) Three Months Ended August 3 , 2024 July 29 , 2023 Gross Profit $ 14,326 $ 9,710 Inventory Step-Up 120 - Restructuring Charges - 2,096 Product Retrofit Costs - 852 Non-GAAP Gross Profit $ 14,446 $ 12,658 Operating Expenses $ 13,265 $ 10,908 MTEX-related Acquisition Expenses (625 ) - CFO Transition Costs (432 ) - Restructuring Charges - (555 ) Non-GAAP Operating Expenses $ 12,208 $ 10,353 Operating Income (Loss) $ 1,061 $ (1,198 ) MTEX-related Acquisition Expenses 625 - CFO Transition Costs 432 - Inventory Step-Up 120 - Restructuring Charges - 2,651 Product Retrofit Costs - 852 Non-GAAP Operating Income $ 2,238 $ 2,305 Net Income (Loss) $ (311 ) $ (1,617 ) MTEX-related Acquisition Expenses, net 470 - CFO Transition Costs, net 328 - Inventory Step-Up, net 85 - Restructuring Charges, net - 2,048 Product Retrofit Costs, net - 658 Non-GAAP Net Income $ 572 $ 1,089 Diluted Earnings (Loss) Per Share $ (0.04 ) $ (0.22 ) MTEX-related Acquisition Expenses 0.06 - CFO Transition Costs 0.05 - Inventory Step-Up 0.01 - Restructuring Charges - 0.28 Product Retrofit Costs - 0.09 Non-GAAP Diluted Earnings (Loss) Per Share $ 0.08 $ 0.15 Six Months Ended August 3 , 2024 July 29 , 2023 Gross Profit $ 26,298 $ 22,096 Inventory Step-Up 120 - Restructuring Charges - 2,096 Product Retrofit Costs - 852 Non-GAAP Gross Profit $ 26,418 $ 25,044 Operating Expenses $ 23,891 $ 21,832 MTEX-related Acquisition Expenses (625 ) - CFO Transition Costs (432 ) - Restructuring Charges - (555 ) Non-GAAP Operating Expenses $ 22,834 $ 21,277 Operating Income $ 2,407 $ 264 MTEX-related Acquisition Expenses 625 - CFO Transition Costs 432 - Inventory Step-Up 120 - Restructuring Charges - 2,651 Product Retrofit Costs - 852 Non-GAAP Operating Income $ 3,584 $ 3,767 Net Income (Loss) $ 869 $ (769 ) MTEX-related Acquisition Expenses, net 470 - CFO Transition Costs, net 328 - Inventory Step-Up, net 85 - Restructuring Charges, net - 2,048 Product Retrofit Costs, net - 658 Non-GAAP Net Income $ 1,752 $ 1,937 Diluted Earnings (Loss) Per Share $ 0.11 $ (0.10 ) MTEX-related Acquisition Expenses 0.06 - CFO Transition Costs 0.05 - Inventory Step-Up 0.01 - Restructuring Charges - 0.28 Product Retrofit Costs - 0.09 Non-GAAP Diluted Earnings Per Share $ 0.23 $ 0.27 ASTRONOVA, INC. Reconciliation of GAAP to Non-GAAP Items for PI Segment Amounts In Thousands (Unaudited) Q2 FY25 Q2 FY24 Total PI Segment as Reported MTEX As Reported Inventory Step Up Adj MTEX (Non Gaap) PI Excluding MTEX (Non Gaap) Total PI Segment as Reported Restructuring and Product Retrofit Adjustments Total PI Segment (Non Gaap) Sales $ 27,165 $ 768 $ - $ 768 $ 26,397 $ 25,777 $ - $ 25,777 Cost of Revenue 18,544 836 (120 ) 716 17,828 19,487 (2,948 ) 16,539 Gross Profit 8,621 (68 ) 120 52 8,569 6,290 2,948 9,238 Operating Expenses 6,273 1,328 - 1,328 4,945 6,751 (472 ) 6,279 Segment Operating Profit $ 2,348 $ (1,396 ) $ 120 $ (1,276 ) $ 3,624 $ (461 ) $ 3,420 $ 2,959 ASTRONOVA, INC. Reconciliation of Net Income (Loss) to Adjusted EBITDA Amounts In Thousands (Unaudited) Three Months Ended August 3, 2024 July 29, 2023 Net Income (Loss) $ (311 ) $ (1,617 ) Interest Expense 938 674 Income Tax Expense (Benefit) 261 (390 ) Depreciation & Amortization 1,305 1,089 EBITDA $ 2,193 $ (244 ) Share-Based Compensation 481 398 MTEX-related Acquisition Expenses 625 - CFO Transition Costs 432 - Inventory Step-Up 120 - Restructuring Charges - 2,651 Product Retrofit Costs - 852 Adjusted EBITDA $ 3,851 $ 3,657 Six Months Ended August 3, 2024 July 29, 2023 Net Income (Loss) $ 869 $ (769 ) Interest Expense 1,419 1,289 Income Tax Expense (Benefit) (173 ) (211 ) Depreciation & Amortization 2,216 2,144 EBITDA $ 4,331 $ 2,453 Share-Based Compensation 806 754 MTEX-related Acquisition Expenses 625 - CFO Transition Costs 432 - Inventory Step-Up 120 - Restructuring Charges - 2,651 Product Retrofit Costs - 852 Adjusted EBITDA $ 6,314 $ 6,710 ASTRONOVA, INC. Reconciliation of Segment Operating Income (Loss) to Non-GAAP Operating Income Amounts In Thousands (Unaudited) Three Months Ended August 3, 2024 July 29, 2023 Product Identification Test & Measurement Total Product Identification Test & Measurement Total Segment Operating Profit (Loss) $ 2,348 $ 3,834 $ 6,182 $ (461 ) $ 1,917 $ 1,456 Inventory Step-Up 120 - 120 - - - Restructuring Charges - - - 2,568 - 2,568 Product Retrofit Costs - - - 852 - 852 Non-GAAP - Segment Operating Profit $ 2,468 $ 3,834 $ 6,302 $ 2,959 $ 1,917 $ 4,876 Six Months Ended August 3, 2024 July 29, 2023 Product Identification Test & Measurement Total Product Identification Test & Measurement Total Segment Operating Profit $ 5,340 $ 5,555 $ 10,895 $ 2,055 $ 3,989 $ 6,044 Inventory Step-Up 120 - 120 - - - Restructuring Charges - - - 2,568 - 2,568 Product Retrofit Costs - - - 852 - 852 Non-GAAP - Segment Operating Profit $ 5,460 $ 5,555 $ 11,015 $ 5,475 $ 3,989 $ 9,464 View source version on businesswire.com : https://www.businesswire.com/news/home/20240916638067/en/ Scott Solomon Senior Vice President Sharon Merrill Advisors (857) 383-2409 [email protected] Source: AstroNova

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