AstroNova Reports Fiscal 2024 Third-Quarter Financial Results

December 6, 2023

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

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

 

Scott Solomon
Senior Vice President
Sharon Merrill Advisors
(857) 383-2409
ALOT@investorrelations.com

Source: AstroNova

IR Contact

AstroNova, Inc.
Investor Relations Department
600 East Greenwich Avenue
West Warwick, RI 02893
Scott Solomon
Senior Vice President Sharon Merrill
Phone: (617) 542-5300
Email: ALOT@investorrelations.com

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AstroNova, Inc.

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