AstroNova Announces Fiscal Second-Quarter 2024 Financial Results

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 [phone] (U.S. and Canada) or [phone] (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
			Product Identification		Test & Measurement		Total			Product Identification		Test & Measurement		Total			Product Identification		Test & Measurement		Total			Product Identification		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

 

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The AstroNova Stock at the time of publication of the news with a fall of -2,17 % to 13,50EUR on Frankfurt stock exchange (06. September 2023, 08:00 Uhr).