AstroNova Reports Fiscal 2024 Third-Quarter Financial Results
AstroNova, Inc. (Nasdaq: ALOT) reported third-quarter fiscal 2024 financial highlights including a revenue of $37.5 million, down 4.7% YoY, gross margin of 39.4%, up 770 basis points YoY, operating margin of 12.3%, up 890 basis points YoY, and diluted EPS of $0.37, up 825% YoY. The company's President and CEO, Greg Woods, commented on the improved earnings performance despite an 11% YoY revenue decline in the Product Identification segment. The Test & Measurement segment also showed strong performance with a 16% revenue increase and a 50% operating profit increase. The company will host an investor conference call at 9:00 a.m. ET today to discuss the financial results.
Positive
Improved gross margin and operating margin YoY
Significant increase in diluted EPS YoY
Record quarterly Adjusted EBITDA of $5.7 million, up 135% YoY
Strong performance in the Test & Measurement segment with a 16% revenue increase and a 50% operating profit increase
Negative
Revenue decline of 4.7% YoY
PI segment revenue decrease of 11.2% YoY
Backlog as of October 28, 2023, decreased 20% YoY
12/06/2023 - 07:30 AM
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
ALOT@investorrelations.com
Source: AstroNova
What are AstroNova, Inc.'s (Nasdaq: ALOT) third-quarter fiscal 2024 financial highlights?
AstroNova reported a revenue of $37.5 million, down 4.7% YoY, gross margin of 39.4%, up 770 basis points YoY, operating margin of 12.3%, up 890 basis points YoY, and diluted EPS of $0.37, up 825% YoY.
What did the President and CEO, Greg Woods, comment on regarding the third-quarter fiscal 2024 financial performance?
Greg Woods commented on the improved earnings performance despite an 11% YoY revenue decline in the Product Identification segment and the strong performance of the Test & Measurement segment.
When will AstroNova, Inc. (Nasdaq: ALOT) host an investor conference call to discuss the financial results?
The company will host an investor conference call at 9:00 a.m. ET today to discuss the financial results.
What were the positive aspects of AstroNova, Inc.'s (Nasdaq: ALOT) third-quarter fiscal 2024 financial performance?
Improved gross margin and operating margin YoY, significant increase in diluted EPS YoY, and record quarterly Adjusted EBITDA of $5.7 million, up 135% YoY.
What were the negative aspects of AstroNova, Inc.'s (Nasdaq: ALOT) third-quarter fiscal 2024 financial performance?
Revenue decline of 4.7% YoY, PI segment revenue decrease of 11.2% YoY, and backlog as of October 28, 2023, decreased 20% YoY.