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AstroNova Reports Third-Quarter Fiscal 2021 Financial Results

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·12 min read
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  • Bookings of $27.9 million

  • Backlog of $23.2 million

  • Revenue of $28.0 million

  • Operating income of $0.4 million

  • Net income of $0.0 million, or $0.00 per diluted share

  • EBITDA of $1.7 million, or 6.1% of revenue

AstroNova, Inc. (NASDAQ: ALOT), a global leader in data visualization technologies, today announced financial results for the fiscal 2021 third quarter ended October 31, 2020.

"Our Product Identification segment delivered both revenue and margin improvements in the quarter while Test & Measurement continued to reflect the effects of the Boeing 737 MAX grounding and COVID-19 on the commercial aerospace industry," said Greg Woods, AstroNova’s President and Chief Executive Officer. "Overall performance was aided by continuous improvement initiatives and reduced operating expenses. During the quarter we continued to invest in new products and technologies to support growth across our businesses.

"In Product Identification, strong demand from our TrojanLabel®, QuickLabel® and GetLabels® product lines drove year-on-year and sequential growth in both revenue and operating profit," Woods said. "Our product and technology innovations are attracting a broader base of customers to our color label and specialty printing systems. We are helping businesses across a wide spectrum of industries enhance efficiency, eliminate waste and increase brand recognition.

"In our Test & Measurement segment, growth in our defense business partly offset weakness in commercial aerospace caused by the external headwinds. Looking ahead, recent progress on the potential approval of multiple coronavirus vaccines, and the FAA’s November decision that cleared the 737 MAX for a return to service, bode well for the T&M segment as we move through fiscal 2022 and beyond," Woods concluded.

Q3 FY 2021 Operating Segment Results

Product Identification segment revenue was $22.9 million, compared with $21.7 million in the prior-year period. Segment operating income was $3.5 million, or 15.4% of revenue, compared with $1.9 million, or 8.6% of revenue, in the prior year, reflecting both increased efficiencies and reductions in operating costs.

Test & Measurement segment revenue was $5.1 million, compared with $11.6 million in the same period of fiscal 2020, due to the continued grounding of the Boeing 737 MAX and rapid demand falloff in the aerospace industry related to COVID-19. The Test & Measurement segment recorded an operating loss of $0.8 million, or negative 14.7% of revenue, compared with segment operating income of $1.4 million, or 12.1% of revenue, in the comparable period of fiscal 2020, a direct result of declines in aerospace printer sales and adverse mix, despite lower manufacturing and operating costs.

Hardware revenue dropped to $7.7 million, compared with $12.2 million in the prior-year period due to Test & Measurement weakness. Supplies revenue was $18.0 million versus $17.7 million in the same period of fiscal 2020. Service/other revenue was $2.4 million, compared with $3.5 million a year earlier.

Q3 FY 2021 Results Summary

Revenue totaled $28.0 million, compared with $33.3 million in the year-earlier period, with a decline in Test & Measurement revenue partly offset by higher revenue in the Product Identification segment.

Gross profit was $9.7 million, or 34.7% of revenue, compared with $12.3 million, or 36.9% of revenue, in the same period of fiscal 2020. The decrease reflected lower revenue and less favorable product mix in the 2021 period, primarily in the Test & Measurement segment.

Operating expenses totaled $9.3 million, down 21.4% compared with $11.9 million in the third quarter of fiscal 2020, reflecting the Company’s cost-reduction actions.

Operating income was $0.4 million in the third quarters of fiscal 2021 and 2020.

Other expense included foreign exchange losses resulting from the weaker Euro and Danish Kroner on exposures in those currencies and higher interest expense.

Net income was $12,000, or $0.00 per share, compared with net income of $0.5 million, or $0.06 per diluted share, for the third quarter of fiscal 2020.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) were $1.7 million, compared with $2.0 million in the third quarter of fiscal 2020. EBITDA is a non-GAAP financial measure explained in greater detail below under "Use of Non-GAAP Financial Measure." Please refer to the financial reconciliation table included in this news release for a reconciliation of EBITDA to net income for the fiscal third quarters ended October 31, 2020 and November 2, 2019.

Bookings were $27.9 million, compared with $32.6 million in the third quarter of fiscal 2020.

Backlog at October 31, 2020 was $23.2 million versus $20.8 million at the end of the fiscal 2020 third quarter.

Recent Highlights

  • AstroNova launched a range of new products that expanded its addressable market beyond label printing at the PACK EXPO Connects 2020 international packaging tradeshow. These products included the TrojanLabel T2-C Print and Apply Solution that eliminates intermediate steps in the typical labeling process. Also demonstrated were in-line barcode verification systems and label finishing systems.

  • AstroNova received an exclusive, multi-year commitment from a major North American air carrier to purchase the Company’s ToughWriter brand of narrow-format flight deck printers for the carrier’s Boeing 737 aircraft.

Q3 FY 2021 Conference Call

AstroNova will discuss its third-quarter fiscal 2021 financial results in an investor conference call at 9:00 a.m. ET today. To participate on the conference call, please dial (800) 367-2403 (U.S. and Canada) or (334) 777-6978 (International) approximately 10 minutes prior to the start time and enter confirmation code 2309769.

You can hear a replay of the conference call from 12:00 p.m. ET Monday, December 7, 2020 until 12:00 p.m. ET on Monday, December 14, 2020 by dialing (888) 203-1112 (U.S. and Canada) or (719) 457-0820 (International). The passcode is 2309769. 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 Measure

In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), this news release contains the non-GAAP financial measure earnings before interest, taxes, depreciation, and amortization (EBITDA). AstroNova believes that the inclusion of this non-GAAP financial measure helps investors gain a meaningful understanding of changes in the Company's core operating results, and also 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 EBITDA, 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. EBITDA also is used by the Company’s management to assist with their financial and operating decision-making.

About AstroNova

AstroNova, Inc. (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 offers a complete line-up of labeling hardware and supplies, allowing customers to mark, track, and enhance their products' appearance. The segment is comprised of three business units: QuickLabel®, the industry leader in tabletop digital color label printing; TrojanLabel®, an innovative leader for professional label presses; and GetLabels™, the premier supplier of label materials, inks, toners, ribbons, and adhesives, all compatible with the major printer brands. Supported by AstroNova's customer application experts and technology leadership in printing, material science, and high-speed data processing, customers benefit from an optimized, "total solution" approach. The Test and Measurement segment includes the AstroNova Aerospace business unit, which designs and manufactures flight deck printers, networking hardware, and related accessories serving the world's aerospace and defense industries with proven advanced airborne technology solutions for the cockpit and the cabin; and the Test and Measurement business unit, which offers a suite of products and services that acquire, record, and analyze electronic signal data from local and networked sensors. AstroNova is a member of the Russell Microcap® Index and the LD Micro Index (INDEXNYSEGIS: LDMICRO). Additional information is available by visiting www.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, clearance of the 737 MAX to return to service, and the potential approval of a coronavirus vaccine, 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, those factors set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2020 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

Nine Months Ended

October 31, 2020

November 2, 2019

October 31, 2020

November 2, 2019

Net Revenue

$

28,017

$

33,318

$

86,595

$

102,967

Cost of Revenue

18,282

21,021

56,218

64,454

Gross Profit

9,735

12,297

30,377

38,513

Total Gross Profit Margin

34.7%

36.9%

35.1%

37.4%

Operating Expenses:

Selling & Marketing

5,553

6,944

17,033

20,122

Research & Development

1,412

2,076

4,845

5,868

General & Administrative

2,353

2,830

7,214

8,445

Total Operating Expenses

9,318

11,850

29,092

34,435

Operating Income

417

447

1,285

4,078

Total Operating Margin

1.5%

1.3%

1.5%

4.0%

Other Expense, net

437

238

459

788

Income (Loss) Before Taxes

(20)

209

826

3,290

Income Tax (Benefit) Provision

(32)

(247)

379

182

Net Income

$

12

$

456

$

447

$

3,108

Net Income per Common Share - Basic

$

0.00

$

0.06

$

0.06

$

0.44

Net Income per Common Share - Diluted

$

0.00

$

0.06

$

0.06

$

0.43

Weighted Average Number of Common Shares - Basic

7,120

7,047

7,100

7,013

Weighted Average Number of Common Shares - Diluted

7,185

7,199

7,137

7,272

ASTRONOVA, INC.

Balance Sheet

In Thousands

(Unaudited)

October 31, 2020

January 31, 2020

ASSETS

CURRENT ASSETS

Cash and Cash Equivalents

$

9,603

$

4,249

Accounts Receivable, net

15,662

19,784

Inventories, net

30,868

33,925

Prepaid Expenses and Other Current Assets

2,769

2,193

Total Current Assets

58,902

60,151

PROPERTY, PLANT AND EQUIPMENT

50,252

48,046

Less Accumulated Depreciation

(38,308)

(36,778)

Property, Plant and Equipment, net

11,944

11,268

OTHER ASSETS

Intangible Assets, net

22,413

25,383

Goodwill

12,466

12,034

Deferred Tax Assets

5,099

5,079

Right of Use Asset

1,436

1,661

Other Assets

1,049

1,088

TOTAL ASSETS

$

113,309

$

116,664

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES

Accounts Payable

$

4,825

$

4,409

Accrued Compensation

2,749

2,700

Other Liabilities and Accrued Expenses

3,481

4,711

Current Portion of Long-Term Debt

4,984

5,208

Revolving Credit Facility

-

6,500

Current Portion of Royalty Obligation

2,000

2,000

Current Liability – Excess Royalty Payment Due

147

773

Deferred Revenue

313

466

Total Current Liabilities

18,499

26,767

NON-CURRENT LIABILITIES

Long-Term Debt, net of current portion

8,488

7,715

Royalty Obligation, net of current portion

6,624

8,012

Long-Term Debt - PPP Loan

4,422

-

Lease Liability, net of current portion

1,105

1,279

Other Long-Term Liabilities

657

1,081

Deferred Tax Liabilities

476

435

TOTAL LIABILITIES

40,271

45,289

SHAREHOLDERS’ EQUITY

Common Stock

521

517

Additional Paid-in Capital

57,894

56,130

Retained Earnings

49,248

49,298

Treasury Stock

(33,568)

(33,477)

Accumulated Other Comprehensive Loss, net of tax

(1,057)

(1,093)

TOTAL SHAREHOLDERS’ EQUITY

73,038

71,375

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

113,309

$

116,664

ASTRONOVA, INC.

Revenue and Segment Operating Profit

In Thousands

(Unaudited)

Revenue

Segment Operating Profit (Loss)

Revenue

Segment Operating Profit (Loss)

Three Months Ended

Three Months Ended

Nine Months Ended

Nine Months Ended

October 31, 2020

November 2, 2019

October 31, 2020

November 2, 2019

October 31, 2020

November 2, 2019

October 31, 2020

November 2, 2019

Product Identification

$

22,898

$

21,749

$

3,521

$

1,880

$

66,907

$

67,484

$

9,813

$

6,990

Test & Measurement

5,119

11,569

(751)

1,397

19,688

35,483

(1,314)

5,533

Total

$

28,017

$

33,318

2,770

3,277

$

86,595

$

102,967

8,499

12,523

Corporate Expenses

2,353

2,830

7,214

8,445

Operating Income

417

447

1,285

4,078

Other Expense, net

437

238

459

788

Income (Loss) Before Income Taxes

(20)

209

826

3,290

Income Tax (Benefit) Provision

(32)

(247)

379

182

Net Income

$

12

$

456

$

447

$

3,108

ASTRONOVA, INC.

Reconciliation of Net Income to EBITDA

Amounts in Thousands

(Unaudited)

Three Months Ended

Nine Months Ended

October 31, 2020

November 2, 2019

October 31, 2020

November 2, 2019

Net Income − GAAP

$

12

$

456

$

447

$

3,108

Interest Income

(3)

(1)

(6)

(4)

Interest Expense

286

206

707

513

Income Tax Expense

(32)

(247)

379

182

Depreciation/Amortization

1,438

1,550

4,572

4,692

EBITDA

$

1,701

$

1,964

$

6,099

$

8,491

View source version on businesswire.com: https://www.businesswire.com/news/home/20201207005207/en/

Contacts

Scott Solomon
Senior Vice President
Sharon Merrill Associates
(617) 542-5300
ALOT@investorrelations.com