Second-Quarter Fiscal 2021 Summary
- Bookings of $25.3 million
- Backlog of $23.7 million
- Revenue of $27.7 million
- Operating income breakeven
- Net income of $0.0 million, or $0.00 per diluted share
- EBITDA of $2.3 million, or 8.4% of revenue
AstroNova, Inc. (NASDAQ: ALOT), a global leader in data
visualization technologies, today announced financial results for
the fiscal 2021 second quarter ended August 1, 2020.
CEO Commentary
“After a slow start to the quarter, we were pleased to see that
our largest segment, Product Identification, representing nearly
80% of AstroNova revenue, made good progress adapting to the new
normal by accelerating the transition to digital business practices
from our traditional in-person sales and marketing approach,” said
Greg Woods, AstroNova’s President and Chief Executive Officer.
“This switch, combined with customer enthusiasm for our recently
refreshed printer offerings, resulted in a solid pick-up in printer
sales and supplies in the latter part of the quarter. Based upon
our unique full-solution offerings and our well-established strong
position in resilient market segments such as food & beverage,
cleaning supplies and medical, we expect this growth trend to
continue as we move through the second half of the year.
“In our Test & Measurement segment, the combination of the
continued 737 MAX grounding and the COVID-19 pandemic further
depressed revenue in the quarter,” Woods said. “We adjusted by
taking significant additional actions to reduce expenses to better
align this business with the current macro environment. These
initiatives better position us to emerge stronger with increased
profitability as the industry rebounds.
“While a full rebound in the aerospace industry is likely to
take many quarters, we are starting to see some positive signs.
During the second quarter our repair business started to rebound as
the number of global flights increased. We believe that this
momentum will continue based on the gradual but steady increase in
the number of aircraft being flown. Additionally, many of the final
steps required for the Boeing 737 MAX’s return to service
authorization have now been completed,” continued Woods.
“Meanwhile, we continue to make progress on further increasing our
direct to airline market penetration, especially in the narrow-body
segment. For example, we recently announced an exclusive multi-year
commitment from a major North American carrier to standardize on
our ToughWriter® narrow-format flight deck printers for its Boeing
737 MAX aircraft. These market share gains enhance our ability to
grow at a faster rate as the industry recovers.
“Despite the impacts of the COVID-19 pandemic, our team around
the globe is doing well and has continued to demonstrate an
unwavering commitment to providing our customers with the
highest-quality products and services,” Woods said. “Our team’s
health and safety is of utmost importance and we deeply appreciate
their dedication and adherence to our rigorous protection
protocols, which have kept them healthy and all of our worldwide
facilities fully operational.
Business Outlook
“We have taken – and will continue to take ─ aggressive
cost-reduction actions to enable more rapid profit improvement as
the market recovers. We have also strengthened our liquidity
position to drive the growth of our Product Identification segment
and weather the downturn in the aerospace industry. Based on the
strength of Product Identification’s large and diversified global
installed base, and the renewed new printer sales growth driven by
our digital transformation, we expect growth in the Product
Identification segment to increase beginning in the second half of
the fiscal year. Additionally, we are encouraged by recent demand
trends and expect to see total revenues grow sequentially in the
third and fourth quarters of this fiscal year,” concluded
Woods.
Liquidity Position
Early in May, AstroNova received a $4.4 million Payroll
Protection Program loan under the CARES Act. Additionally, on July
30, 2020, the Company entered into an amended and restated credit
facility with its current lender, providing increased available
credit, reduced amortization requirements and financial covenants
aligned with the current market realities. The Company believes
that these two credit facilities have remedied the short-term
overhang that the combined 737 MAX and COVID challenges placed on
its prior credit structure. AstroNova also believes that these
credit facilities, together with its cost-reductions; tactical
business segment actions; the April 2020 decision by the Board of
Directors to suspend the Company’s quarterly cash dividend; as well
as improved quarterly cash from operations, position AstroNova to
successfully navigate through the economic impacts of the COVID-19
pandemic from a liquidity perspective. On August 1, 2020, the
Company had cash and cash equivalents of $11.3 million on its
balance sheet plus $8 million available under its revolving credit
line. During the fiscal 2021 second quarter, the Company reduced
its net debt position by $4.3 million to $9.4 million.
Q2 FY 2021 Operating Segment
Results
Product Identification segment revenue in the second
quarter of fiscal 2021 was $21.6 million, compared with $22.1
million in the prior-year period. Segment operating income was $3.1
million, or 14.5% of revenue, compared with $2.2 million, or 10.0%
of revenue, in the prior year, primarily reflecting a reduction in
both manufacturing and operating costs.
Test & Measurement segment revenue in the second
quarter of fiscal 2021 was $6.0 million, compared with $11.3
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 $0.4 million, or negative
6.8% of revenue, compared with segment operating income of $1.6
million, or 13.7% 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.
Q2 FY 2021 Results
Summary
Revenue totaled $27.7 million, compared with $33.5 million in
the year-earlier period.
Gross profit was $9.8 million, or 35.4% of revenue, compared
with $12.0 million, or 35.8% 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 $9.6 million, down approximately
11.4% compared with $10.8 million in the second quarter fiscal
2020, reflecting the Company’s cost-reduction actions.
Other income included foreign exchange gains from the impact of
a strengthening Euro dollar and Danish Kroner on exposures in those
currencies. Taxes were unfavorably impacted by discrete expenses
related to foreign jurisdictions and a windfall shortfall on
employee stock vestings, compounded by the effect of accounting for
improvements in projected earnings for the year from the first to
second quarters.
Net income was $3,000, or $0.00 per diluted share, compared with
net income of $951,000, or $0.13 per diluted share, for the second
quarter of fiscal 2020.
Earnings before interest, taxes, depreciation and amortization
(EBITDA) were $2.3 million, compared with $2.7 million in the
second 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 second quarters ended August 1, 2020
and August 3, 2019.
Bookings were $25.3 million, compared with $29.1 million in the
second quarter of fiscal 2020.
Backlog at August 1, 2020 was $23.7 million versus $22.3 million
at the end of the fiscal 2020 second quarter.
Second-Quarter Fiscal 2021 Conference
Call
AstroNova will discuss its second-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
5364836.
You can hear a replay of the conference call from 12:00 p.m. ET
Wednesday, September 9, 2020 until 12:00 p.m. ET on Wednesday,
September 16, 2020 by dialing (888) 203-1112 (U.S. and Canada) or
(719) 457-0820 (International). The passcode is 5364836. 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 the appearance of their products. 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,
the effect of the grounding of the 737 MAX, and the impact of the
COVID-19 outbreak, 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
Six Months Ended
August 1, 2020
August 3, 2019
August 1, 2020
August 3, 2019
Net Revenue
$27,658
$33,468
$58,578
$69,649
Cost of Revenue
17,871
21,491
37,935
43,433
Gross Profit
9,787
11,977
20,643
26,216
35.4%
35.8%
35.2%
37.6%
Operating Expenses: Selling & Marketing
5,555
6,413
11,481
13,178
Research & Development
1,493
1,785
3,433
3,792
General & Administrative
2,535
2,616
4,861
5,615
9,583
10,814
19,775
22,585
Operating Income
204
1,163
868
3,631
0.7%
3.5%
1.5%
5.2%
Other Income (Expense), Net
328
(183)
(23)
(550)
Income Before Taxes
532
980
845
3,081
Income Tax Provision
529
29
411
429
Net Income
$3
$951
$434
$2,652
Net Income per Common Share - Basic
$0.00
$0.14
$0.06
$0.38
Net Income per Common Share - Diluted
$0.00
$0.13
$0.06
$0.36
Weighted Average Number of Common Shares - Basic
7,105
7,021
7,089
6,996
Weighted Average Number of Common Shares - Diluted
7,123
7,371
7,114
7,310
ASTRONOVA, INC.
Balance Sheet
In Thousands
(Unaudited)
August 1,
2020
January 31,
2020
ASSETS CURRENT ASSETS Cash and Cash Equivalents
$
11,235
$
4,249
Accounts Receivable, net
14,816
19,784
Inventories, net
32,368
33,925
Prepaid Expenses and Other Current Assets
2,899
2,193
Total Current Assets
61,318
60,151
PROPERTY, PLANT AND EQUIPMENT
49,371
48,046
Less Accumulated Depreciation
(37,905
)
(36,778
)
Property, Plant and Equipment, net
11,466
11,268
OTHER ASSETS Intangible Assets, net
23,436
25,383
Goodwill
12,552
12,034
Deferred Tax Assets
5,103
5,079
Right of Use Asset
1,541
1,661
Other Assets
1,063
1,088
TOTAL ASSETS
$
116,479
$
116,664
LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES Accounts
Payable
$
5,127
$
4,409
Accrued Compensation
2,575
2,700
Other Liabilities and Accrued Expenses
3,637
4,711
Current Portion of Long-Term Debt
4,392
5,208
Revolving Credit Facility
2,000
6,500
Current Portion of Royalty Obligation
2,000
2,000
Current Liability – Excess Royalty Payment Due
147
773
Deferred Revenue
351
466
Total Current Liabilities
20,229
26,767
NON CURRENT LIABILITIES Long-Term Debt, net of current portion
9,859
7,715
Royalty Obligation, net of current portion
7,087
8,012
Long-Term Debt - PPP Loan
4,422
-
Lease Liability, net of current portion
1,191
1,279
Other Long-Term Liabilities
652
1,081
Deferred Tax Liabilities
482
435
TOTAL LIABILITIES
43,922
45,289
SHAREHOLDERS’ EQUITY Common Stock
520
517
Additional Paid-in Capital
57,284
56,130
Retained Earnings
49,236
49,298
Treasury Stock
(33,568
)
(33,477
)
Accumulated Other Comprehensive Loss, net of tax
(915
)
(1,093
)
TOTAL SHAREHOLDERS’ EQUITY
72,557
71,375
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
116,479
$
116,664
ASTRONOVA, INC. Revenue and Segment Operating
Profit In Thousands (Unaudited)
Three Months Ended
Six Months Ended
Revenue
Segment Operating Profit
(Loss)
Revenue
Segment Operating Profit
(Loss)
August 1, 2020
August 3, 2019
August 1, 2020
August 3, 2019
August 1, 2020
August 3, 2019
August 1, 2020
August 3, 2019
Product Identification
$
21,629
$
22,144
$
3,146
$
2,224
$
44,009
$
45,735
$
6,292
$
5,110
T&M
6,029
11,324
(407
)
1,555
14,569
23,914
(563
)
4,136
Total
$
27,658
$
33,468
2,739
3,779
$
58,578
$
69,649
5,729
9,246
Corporate Expenses
2,535
2,616
4,861
5,615
Operating Income
204
1,163
868
3,631
Other (Income) Expense, Net
328
(183
)
(23
)
(550
)
Income Before Income Taxes
532
980
845
3,081
Income Tax Provision
529
29
411
429
Net Income
$
3
$
951
$
434
$
2,652
ASTRONOVA, INC.
Reconciliation of Net Income
to EBITDA
(In Thousands)
(Unaudited)
Three Months Ended
August 1, 2020
August 3, 2019
Net Income
$3
$951
Interest Income
(36)
(36)
Interest Expense
259
212
Income Tax Expense
529
29
Depreciation/Amortization
1,565
1,559
EBITDA
$2,320
$2,715
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200909005340/en/
Scott Solomon Senior Vice President Sharon Merrill Associates
(617) 542-5300 ALOT@investorrelations.com
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