☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
August 1, 2020
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Large accelerated filer | ☐ | Accelerated filer | ☒ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☒ | |||
Emerging growth company | ☐ |
Page No. | |||||||
Part I. | |||||||
Item 1. | |||||||
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3 | |||||||
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6 | |||||||
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8-23 | |||||||
Item 2. | 23-33 | ||||||
Item 3. | 33 | ||||||
Item 4. | 33 | ||||||
Part II. | |||||||
Item | 34 | ||||||
Item 1A. | 34-35 | ||||||
Item 2. | 36 | ||||||
Item 5. | 36 | ||||||
Item 6. | 37-38 | ||||||
39 | |||||||
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Item 1. | Financial Statements |
November 2, 2019 | January 31, 2019 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and Cash Equivalents | $ | 4,468 | $ | 7,534 | ||||
Accounts Receivable, net | 22,094 | 23,486 | ||||||
Inventories, net | 35,594 | 30,161 | ||||||
Prepaid Expenses and Other Current Assets | 3,059 | 1,427 | ||||||
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Total Current Assets | 65,215 | 62,608 | ||||||
Property, Plant and Equipment, net | 11,323 | 10,380 | ||||||
Intangible Assets, net | 26,454 | 29,674 | ||||||
Goodwill | 12,110 | 12,329 | ||||||
Deferred Tax Assets, net | 3,482 | 2,928 | ||||||
Right of Use Assets | 1,767 | — | ||||||
Other Assets | 1,014 | 1,064 | ||||||
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TOTAL ASSETS | $ | 121,365 | $ | 118,983 | ||||
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LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts Payable | $ | 6,674 | $ | 5,956 | ||||
Accrued Compensation | 2,968 | 5,023 | ||||||
Other Liabilities and Accrued Expenses | 3,789 | 2,911 | ||||||
Current Portion of Long-Term Debt | 5,116 | 5,208 | ||||||
Revolving Credit Facility | 6,500 | 1,500 | ||||||
Current Liability – Royalty Obligation | 2,000 | 1,875 | ||||||
Current Liability – Excess Royalty Payment Due | 419 | 1,265 | ||||||
Deferred Revenue | 387 | 373 | ||||||
Income Taxes Payable | — | 554 | ||||||
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Total Current Liabilities | 27,853 | 24,665 | ||||||
Long-Term Debt, net of current portion | 9,004 | 12,870 | ||||||
Royalty Obligation, net of current portion | 8,488 | 9,916 | ||||||
Lease Liabilities, net of current portion | 1,350 | — | ||||||
Deferred Tax Liabilities | 539 | 40 | ||||||
Other Long-Term Liabilities | 1,178 | 1,717 | ||||||
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TOTAL LIABILITIES | 48,412 | 49,208 | ||||||
SHAREHOLDERS’ EQUITY | ||||||||
Common Stock, $0.05 Par Value, Authorized 13,000,000 shares; Issued 10,333,915 shares and 10,218,559 shares at November 2, 2019 and January 31, 2019, respectively | 518 | 511 | ||||||
AdditionalPaid-in Capital | 55,870 | 53,568 | ||||||
Retained Earnings | 51,142 | 49,511 | ||||||
Treasury Stock, at Cost, 3,279,831 and 3,261,672 shares at November 2, 2019 and January 31, 2019, respectively | (33,454 | ) | (32,997 | ) | ||||
Accumulated Other Comprehensive Loss, net of tax | (1,123 | ) | (818 | ) | ||||
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TOTAL SHAREHOLDERS’ EQUITY | 72,953 | 69,775 | ||||||
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 121,365 | $ | 118,983 | ||||
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August 1, 2020 | January 31, 2020 | |||||||
(Unaudited) | ||||||||
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, net | 11,466 | 11,268 | ||||||
Intangible Assets, net | 23,436 | 25,383 | ||||||
Goodwill | 12,552 | 12,034 | ||||||
Deferred Tax Assets, net | 5,103 | 5,079 | ||||||
Right of Use Assets | 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 Liability – 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 | ||||||
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 Liabilities, 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, $0.05 Par Value, Authorized 13,000,000 shares; Issued 10,412,254 shares and 10,343,610 shares at August 1 , 2020 and January 31, 2020, respectively | 520 | 517 | ||||||
Additional Paid-in Capital | 57,284 | 56,130 | ||||||
Retained Earnings | 49,236 | 49,298 | ||||||
Treasury Stock, at Cost, 3,295,188 and 3,281,701 shares at August 1, 2020 and January 31, 2020, respectively | (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 | ||||
Three Months Ended | Nine Months Ended | |||||||||||||||
November 2, 2019 | October 27, 2018 | November 2, 2019 | October 27, 2018 | |||||||||||||
Revenue | $ | 33,318 | $ | 34,196 | $ | 102,967 | $ | 99,490 | ||||||||
Cost of Revenue | 21,021 | 20,288 | 64,454 | 60,073 | ||||||||||||
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Gross Profit | 12,297 | 13,908 | 38,513 | 39,417 | ||||||||||||
Operating Expenses: | ||||||||||||||||
Selling and Marketing | 6,944 | 6,587 | 20,122 | 19,484 | ||||||||||||
Research and Development | 2,076 | 2,123 | 5,868 | 5,844 | ||||||||||||
General and Administrative | 2,830 | 2,836 | 8,445 | 8,298 | ||||||||||||
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Operating Expenses | 11,850 | 11,546 | 34,435 | 33,626 | ||||||||||||
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Operating Income | 447 | 2,362 | 4,078 | 5,791 | ||||||||||||
Other Expense, net | (238 | ) | (538 | ) | (788 | ) | (1,320 | ) | ||||||||
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Income before Income Taxes | 209 | 1,824 | 3,290 | 4,471 | ||||||||||||
Income Tax (Benefit) Provision | (247 | ) | 407 | 182 | 1,046 | |||||||||||
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Net Income | $ | 456 | $ | 1,417 | $ | 3,108 | $ | 3,425 | ||||||||
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Net Income per Common Share—Basic: | $ | 0.06 | $ | 0.21 | $ | 0.44 | $ | 0.50 | ||||||||
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Net Income per Common Share—Diluted: | $ | 0.06 | $ | 0.20 | $ | 0.43 | $ | 0.49 | ||||||||
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Weighted Average Number of Common Shares Outstanding: | ||||||||||||||||
Basic | 7,047 | 6,925 | 7,013 | 6,858 | ||||||||||||
Diluted | 7,199 | 7,167 | 7,272 | 7,056 |
Three Months Ended | Six Months Ended | |||||||||||||||
August 1, 2020 | August 3, 2019 | August 1, 2020 | August 3, 2019 | |||||||||||||
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 | ||||||||||||
Operating Expenses: | ||||||||||||||||
Selling and Marketing | 5,555 | 6,413 | 11,481 | 13,178 | ||||||||||||
Research and Development | 1,493 | 1,785 | 3,433 | 3,792 | ||||||||||||
General and Administrative | 2,535 | 2,616 | 4,861 | 5,615 | ||||||||||||
Operating Expenses | 9,583 | 10,814 | 19,775 | 22,585 | ||||||||||||
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 | ||||||||
Net Income - Basic: | $ | 0 .00 | $ | 0.14 | $ | 0.06 | $ | 0.38 | ||||||||
Net Income per Common Share - Diluted: | $ | 0.0 0 | $ | 0.13 | $ | 0.06 | $ | 0.36 | ||||||||
Weighted Average Number of Common Shares Outstanding: | ||||||||||||||||
Basic | 7,105 | 7,021 | 7,089 | 6,996 | ||||||||||||
Diluted | 7,123 | 7,371 | 7,114 | 7,310 |
Three Months Ended | Nine Months Ended | |||||||||||||||
November 2, 2019 | October 27, 2018 | November 2, 2019 | October 27, 2018 | |||||||||||||
Net Income | $ | 456 | $ | 1,417 | $ | 3,108 | $ | 3,425 | ||||||||
Other Comprehensive Income (Loss), Net of Taxes and Reclassification Adjustments: | ||||||||||||||||
Foreign Currency Translation Adjustments | 87 | (157 | ) | (166 | ) | (775 | ) | |||||||||
Change in Value of Derivatives Designated as Cash Flow Hedge | 62 | 221 | 62 | 766 | ||||||||||||
Losses (Gains) from Cash Flow Hedges Reclassified to Income Statement | 3 | (150 | ) | (201 | ) | (605 | ) | |||||||||
Realized Loss on Securities Available for Sale Reclassified to Income Statement | — | — | — | 3 | ||||||||||||
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Other Comprehensive Income (Loss) | 152 | (86 | ) | (305 | ) | (611 | ) | |||||||||
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Comprehensive Income | $ | 608 | $ | 1,331 | $ | 2,803 | $ | 2,814 | ||||||||
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Three Months Ended | Six Months Ended | |||||||||||||||
August 1, 2020 | August 3, 2019 | August 1, 2020 | August 3, 2019 | |||||||||||||
Net Income | $ | 3 | $ | 951 | $ | 434 | $ | 2,652 | ||||||||
Other Comprehensive Income (Loss), Net of Taxes: | ||||||||||||||||
Foreign Currency Translation Adjustments | 351 | (81 | ) | 210 | (253 | ) | ||||||||||
Change in Value of Derivatives Designated as Cash Flow Hedge | (229 | ) | (116 | ) | (270 | ) | — | |||||||||
Losses (Gains) from Cash Flow Hedges Reclassified to Income Statement | 232 | (60 | ) | 193 | (204 | ) | ||||||||||
Cross-Currency Interest Rate Swap Termination | 45 | — | 45 | — | ||||||||||||
Other Comprehensive Income (Loss) | 399 | (257 | ) | 178 | (457 | ) | ||||||||||
Comprehensive Income | $ | 402 | $ | 694 | $ | 612 | $ | 2,195 | ||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | |||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||
Balance February 1, 2019 | 10,218,559 | $ | 511 | $ | 53,568 | $ | 49,511 | $ | (32,997 | ) | $ | (818 | ) | $ | 69,775 | |||||||||||||
Share-Based Compensation | — | — | 601 | — | — | — | 601 | |||||||||||||||||||||
Employee Option Exercises | 27,990 | 1 | 306 | — | (11 | ) | — | 296 | ||||||||||||||||||||
Restricted Stock Awards Vested, net | 9,522 | 1 | (1 | ) | — | (69 | ) | — | (69 | ) | ||||||||||||||||||
Cash Dividend—$0.07 per share | — | — | — | (489 | ) | — | — | (489 | ) | |||||||||||||||||||
Net Income | — | — | — | 1,700 | — | — | 1,700 | |||||||||||||||||||||
Other Comprehensive Loss | — | — | — | — | — | (200 | ) | (200 | ) | |||||||||||||||||||
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Balance May 4, 2019 | 10,256,071 | $ | 513 | $ | 54,474 | $ | 50,722 | $ | (33,077 | ) | $ | (1,018 | ) | $ | 71,614 | |||||||||||||
Share-Based Compensation | — | — | 451 | — | — | — | 451 | |||||||||||||||||||||
Employee Option Exercises | 13,821 | 1 | 198 | — | — | — | 199 | |||||||||||||||||||||
Restricted Stock Awards Vested, net | 45,658 | 2 | (2 | ) | — | (377 | ) | — | (377 | ) | ||||||||||||||||||
Cash Dividend—$0.07 per share | — | — | — | (493 | ) | — | — | (493 | ) | |||||||||||||||||||
Net Income | — | — | — | 951 | — | — | 951 | |||||||||||||||||||||
Other Comprehensive Loss | — | — | — | — | — | (257 | ) | (257 | ) | |||||||||||||||||||
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Balance August 3, 2019 | 10,315,550 | $ | 516 | $ | 55,121 | $ | 51,180 | $ | (33,454 | ) | $ | (1,275 | ) | $ | 72,088 | |||||||||||||
Share-Based Compensation | — | — | 525 | — | — | — | 525 | |||||||||||||||||||||
Employee Option Exercises | 18,365 | 2 | 224 | — | — | — | 226 | |||||||||||||||||||||
Cash Dividend—$0.07 per share | — | — | — | (494 | ) | — | — | (494 | ) | |||||||||||||||||||
Net Income | — | — | — | 456 | — | — | 456 | |||||||||||||||||||||
Other Comprehensive Income | — | — | — | — | — | 152 | 152 | |||||||||||||||||||||
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Balance November 2, 2019 | 10,333,915 | $ | 518 | $ | 55,870 | $ | 51,142 | $ | (33,454 | ) | $ | (1,123 | ) | $ | 72,953 | |||||||||||||
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Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | |||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||
Balance February 1, 2018 | 9,996,120 | $ | 500 | $ | 50,016 | $ | 45,700 | $ | (32,397 | ) | $ | (172 | ) | $ | 63,647 | |||||||||||||
Share-Based Compensation | — | — | 363 | — | — | — | 363 | |||||||||||||||||||||
Employee Option Exercises | 53,010 | 3 | 574 | — | (88 | ) | — | 489 | ||||||||||||||||||||
Restricted Stock Awards Vested, net | 16,981 | 1 | (1 | ) | — | (40 | ) | — | (40 | ) | ||||||||||||||||||
Cash Dividend—$0.07 per share | — | — | — | (480 | ) | — | — | (480 | ) | |||||||||||||||||||
Net Income | — | — | — | 814 | — | — | 814 | |||||||||||||||||||||
Other Comprehensive Loss | — | — | — | — | — | (163 | ) | (163 | ) | |||||||||||||||||||
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Balance April 28, 2018 | 10,066,111 | $ | 504 | $ | 50,952 | $ | 46,034 | $ | (32,525 | ) | $ | (335 | ) | $ | 64,630 | |||||||||||||
Share-Based Compensation | — | — | 466 | — | — | — | 466 | |||||||||||||||||||||
Employee Option Exercises | 40,302 | — | 461 | — | (278 | ) | — | 183 | ||||||||||||||||||||
Restricted Stock Awards Vested, net | 30,084 | 3 | (2 | ) | — | (157 | ) | — | (156 | ) | ||||||||||||||||||
Cash Dividend—$0.07 per share | — | — | — | (481 | ) | — | — | (481 | ) | |||||||||||||||||||
Net Income | — | — | — | 1,194 | — | — | 1,194 | |||||||||||||||||||||
Reclassification of Certain Income Tax Effects from Accumulated Other Comprehensive Loss | — | — | — | 14 | — | — | 14 | |||||||||||||||||||||
Other Comprehensive Loss | — | — | — | — | — | (362 | ) | (362 | ) | |||||||||||||||||||
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Balance July 28, 2018 | 10,136,497 | $ | 507 | $ | 51,877 | $ | 46,761 | $ | (32,960 | ) | $ | (697 | ) | $ | 65,488 | |||||||||||||
Share-Based Compensation | — | — | 510 | — | — | — | 510 | |||||||||||||||||||||
Employee Option Exercises | 54,952 | 3 | 561 | — | — | — | 564 | |||||||||||||||||||||
Restricted Stock Awards Vested, net | 5,306 | — | — | — | — | — | — | |||||||||||||||||||||
Cash Dividend—$0.07 per share | — | — | — | (485 | ) | — | — | (485 | ) | |||||||||||||||||||
Net Income | — | — | — | 1,417 | — | — | 1,417 | |||||||||||||||||||||
Other Comprehensive Loss | — | — | — | — | — | (86 | ) | (86 | ) | |||||||||||||||||||
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Balance October 27, 2018 | 10,196,755 | $ | 510 | $ | 52,948 | $ | 47,693 | $ | (32,960 | ) | $ | (783 | ) | $ | 67,408 | |||||||||||||
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Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | |||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||
Balance February 1, 2020 | 10,343,610 | $ | 517 | $ | 56,130 | $ | 49,298 | $ | (33,477 | ) | $ | (1,093 | ) | $ | 71,375 | |||||||||||||
Share-Based Compensation | — | — | 495 | — | — | — | 495 | |||||||||||||||||||||
Employee Option Exercises | 4,456 | — | 32 | — | — | — | 32 | |||||||||||||||||||||
Restricted Stock Awards Vested, net | 23,638 | 1 | (1 | ) | — | (54 | ) | — | (54 | ) | ||||||||||||||||||
Common Stock – Cash Dividend - $0.07 per share | — | — | — | (497 | ) | — | — | (497 | ) | |||||||||||||||||||
Net Income | — | — | — | 432 | — | — | 432 | |||||||||||||||||||||
Other Comprehensive Loss | — | — | — | — | — | (221 | ) | (221 | ) | |||||||||||||||||||
Balance May 2, 2020 | 10,371,704 | $ | 518 | $ | 56,656 | $ | 49,233 | $ | (33,531 | ) | $ | (1,314 | ) | $ | 71,562 | |||||||||||||
Share-Based Compensation | — | — | 601 | — | — | — | 601 | |||||||||||||||||||||
Employee Option Exercises | 4,874 | — | 29 | — | — | — | 29 | |||||||||||||||||||||
Restricted Stock Awards Vested, net | 35,676 | 2 | (2 | ) | — | (37 | ) | — | (37 | ) | ||||||||||||||||||
Net Income | — | — | — | 3 | — | — | 3 | |||||||||||||||||||||
Other Comprehensive Income | — | — | — | — | — | 399 | 399 | |||||||||||||||||||||
Balance August 1, 2020 | 10,412,254 | $ | 520 | $ | 57,284 | $ | 49,236 | $ | (33,568 | ) | $ | (915 | ) | $ | 72,557 | |||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Shareholders’ Equity | |||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||
Balance February 1, 2019 | 10,218,559 | $ | 511 | $ | 53,568 | $ | 49,511 | $ | (32,997 | ) | $ | (818 | ) | $ | 69,775 | |||||||||||||
Share-Based Compensation | — | — | 601 | — | — | — | 601 | |||||||||||||||||||||
Employee Option Exercises | 27,990 | 1 | 306 | — | (11 | ) | — | 296 | ||||||||||||||||||||
Restricted Stock Awards Vested, net | 9,522 | 1 | (1 | ) | — | (69 | ) | — | (69 | ) | ||||||||||||||||||
Common Stock – Cash Dividend - $0.07 per share | — | — | — | (489 | ) | — | — | (489 | ) | |||||||||||||||||||
Net Income | — | — | — | 1,700 | — | — | 1,700 | |||||||||||||||||||||
Other Comprehensive Loss | — | — | — | — | — | (200 | ) | (200 | ) | |||||||||||||||||||
Balance May 4, 2019 | 10,256,071 | $ | 513 | $ | 54,474 | $ | 50,722 | $ | (33,077 | ) | $ | (1,018 | ) | $ | 71,614 | |||||||||||||
Share-Based Compensation | — | — | 451 | — | — | — | 451 | |||||||||||||||||||||
Employee Option Exercises | 13,821 | 1 | 198 | — | — | — | 199 | |||||||||||||||||||||
Restricted Stock Awards Vested, net | 45,658 | 2 | (2 | ) | — | (377 | ) | — | (377 | ) | ||||||||||||||||||
Common Stock – Cash Dividend - $0.07 per share | — | — | — | (493 | ) | — | — | (493 | ) | |||||||||||||||||||
Net Income | — | — | — | 951 | — | — | 951 | |||||||||||||||||||||
Other Comprehensive Loss | — | — | — | — | — | (257 | ) | (257 | ) | |||||||||||||||||||
Balance August 3, 2019 | 10,315,550 | $ | 516 | $ | 55,121 | $ | 51,180 | $ | (33,454 | ) | $ | (1,275 | ) | $ | 72,088 | |||||||||||||
Nine Months Ended | ||||||||
November 2, 2019 | October 27, 2018 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net Income | $ | 3,108 | $ | 3,425 | ||||
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | ||||||||
Depreciation and Amortization | 4,692 | 4,633 | ||||||
Amortization of Debt Issuance Costs | 37 | 38 | ||||||
Share-Based Compensation | 1,576 | 1,339 | ||||||
Deferred Income Tax Provision | — | (67 | ) | |||||
Changes in Assets and Liabilities: | ||||||||
Accounts Receivable | 1,296 | 248 | ||||||
Inventories | (5,412 | ) | (1,140 | ) | ||||
Income Taxes | (2,639 | ) | (244 | ) | ||||
Accounts Payable and Accrued Expenses | (1,586 | ) | (4,793 | ) | ||||
Other | (84 | ) | (916 | ) | ||||
|
|
|
| |||||
Net Cash Provided by Operating Activities | 988 | 2,523 | ||||||
Cash Flows from Investing Activities: | ||||||||
Proceeds from Sales/Maturities of Securities Available for Sale | — | 1,511 | ||||||
Honeywell Asset Purchase and License Agreement—TSA Agreement Payment | — | (400 | ) | |||||
Additions to Property, Plant and Equipment | (2,422 | ) | (1,902 | ) | ||||
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|
|
| |||||
Net Cash Used by Investing Activities | (2,422 | ) | (791 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Net Cash Proceeds from Common Shares Issued Under Employee Benefit Plans and Employee Stock Option Plans, Net of Payment of Minimum Tax Withholdings | 276 | 1,041 | ||||||
Borrowings under Revolving Credit Facility | 5,000 | 3,000 | ||||||
Repayment under Revolving Credit Facility | — | (1,500 | ) | |||||
Payment of Minimum Guarantee Royalty Obligation | (1,375 | ) | (1,250 | ) | ||||
Principal Payments of Long-Term Debt | (3,998 | ) | (4,012 | ) | ||||
Dividends Paid | (1,477 | ) | (1,446 | ) | ||||
|
|
|
| |||||
Net Cash Used by Financing Activities | (1,574 | ) | (4,167 | ) | ||||
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| |||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | (58 | ) | 74 | |||||
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|
| |||||
Net Decrease in Cash and Cash Equivalents | (3,066 | ) | (2,361 | ) | ||||
Cash and Cash Equivalents, Beginning of Period | 7,534 | 10,177 | ||||||
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| |||||
Cash and Cash Equivalents, End of Period | $ | 4,468 | $ | 7,816 | ||||
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| |||||
Supplemental Disclosures of Cash Flow Information: | ||||||||
Cash Paid During the Period for Interest | $ | 350 | $ | 449 | ||||
Cash Paid During the Period for Income Taxes, Net of Refunds | $ | 2,746 | $ | 3,154 | ||||
Schedule ofNon-Cash Financing Activities: | ||||||||
Value of Shares Received in Satisfaction of Option Exercise Price | $ | 11 | $ | 366 |
Six Months Ended | ||||||||
August 1, 2020 | August 3, 2019 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net Income | $ | 434 | $ | 2,652 | ||||
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | ||||||||
Depreciation and Amortization | 3,133 | 3,142 | ||||||
Amortization of Debt Issuance Costs | 24 | 25 | ||||||
Share-Based Compensation | 1,096 | 1,052 | ||||||
Changes in Assets and Liabilities: | ||||||||
Accounts Receivable | 5,069 | 2,754 | ||||||
Inventories | 1,767 | (6,872 | ) | |||||
Income Taxes | 143 | (2,037 | ) | |||||
Accounts Payable and Accrued Expenses | (1,244 | ) | 533 | |||||
Other | (1,258 | ) | (237 | ) | ||||
Net Cash Provided by Operating Activities | 9,164 | 1,012 | ||||||
Cash Flows from Investing Activities: | ||||||||
Additions to Property, Plant and Equipment | (1,201 | ) | (1,538 | ) | ||||
Net Cash Used for Investing Activities | (1,201 | ) | (1,538 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Net Cash Proceeds from Employee Stock Option Plans | 6 | 443 | ||||||
Net Cash Proceeds from Share Purchases under Employee Stock Purchase Plan | 55 | 53 | ||||||
Net Cash Used for Payment of Taxes Related to Vested Restricted Stock | (91 | ) | (446 | ) | ||||
Borrowings under Revolving Credit Facility | 5,000 | 2,000 | ||||||
Repayment under Revolving Credit Facility | (9,500 | ) | — | |||||
Payment of Minimum Guarantee Royalty Obligation | (1,000 | ) | (875 | ) | ||||
Proceeds from Long-Term Debt – PPP Loan | 4,422 | — | ||||||
Proceeds from Long-Term Debt Borrowings | 15,232 | — | ||||||
Payoff of Long-Term Debt | (11,732 | ) | — | |||||
Principal Payments of Long-Term Debt | (2,104 | ) | (2,788 | ) | ||||
Payment of Debt Issuance Costs | (89 | ) | — | |||||
Dividends Paid | (497 | ) | (982 | ) | ||||
Net Cash Used for Financing Activities | (298 | ) | (2,595 | ) | ||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | (679 | ) | 110 | |||||
Net Increase (Decrease) in Cash and Cash Equivalents | 6,986 | (3,011 | ) | |||||
Cash and Cash Equivalents, Beginning of Period | 4,249 | 7,534 | ||||||
Cash and Cash Equivalents, End of Period | $ | 11,235 | $ | 4,523 | ||||
Supplemental Disclosures of Cash Flow Information: | ||||||||
Cash Paid During the Period for Interest | $ | 309 | $ | 352 | ||||
Cash Paid During the Period for Income Taxes, Net of Refunds | $ | 251 | $ | 2,469 | ||||
Schedule of Non-Cash Financing Activities: | ||||||||
Value of Shares Received in Satisfaction of Option Exercise Price | $ | — | $ | 11 |
The
2020.
2020.
Leases
Recent Accounting Standards Not Yet Adopted
Internal-Use Software
In August 2018, the FASB issued Accounting StandardsStandard Update (“ASU’ASU”)2018-15, “Intangibles—Goodwill andOther—Internal-Use Software (Subtopic350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” ASU2018-15 reduces complexity for the accounting for costs of implementing a cloud computing service arrangement and aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtaininternal-use software (and hosting arrangements that include an internal use software license). This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 (Q1 fiscal 2021 for AstroNova), with early adoption permitted. Implementation should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is currently evaluating the impact this new guidance will have on its consolidated financial statements.
Fair Value Measurement
In August 2018, the FASB issued ASUThis ASU is effective for annual periods beginning after December 15, 2019 including interim periods within those fiscal years (Q1 fiscal 2021 for AstroNova), with early adoption permitted. The provisions of ASUCompany is currently evaluating theadoption of this guidance did not have a material impact this new guidance will have on itsour consolidated financial statements and related disclosures.
Three Months Ended | Nine Months Ended | |||||||||||||||
(In thousands) | November 2, 2019 | October 27, 2018 | November 2, 2019 | October 27, 2018 | ||||||||||||
United States | $ | 21,831 | $ | 21,542 | $ | 64,471 | $ | 60,752 | ||||||||
Europe | 7,059 | 7,573 | 22,408 | 23,292 | ||||||||||||
Asia | 1,396 | 1,560 | 7,063 | 4,653 | ||||||||||||
Canada | 1,441 | 1,860 | 4,346 | 5,836 | ||||||||||||
Central and South America | 1,019 | 921 | 3,232 | 3,078 | ||||||||||||
Other | 572 | 740 | 1,447 | 1,879 | ||||||||||||
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Total Revenue | $ | 33,318 | $ | 34,196 | $ | 102,967 | $ | 99,490 | ||||||||
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|
Three Months Ended | Six Months Ended | |||||||||||||||
(In thousands) | August 1, 2020 | August 3, 2019 | August 1, 2020 | August 3, 2019 | ||||||||||||
United States | $ | 17,866 | $ | 20,648 | $ | 37,655 | $ | 42,640 | ||||||||
Europe | 6,314 | 7,473 | 13,764 | 15,349 | ||||||||||||
Canada | 1,452 | 1,389 | 2,880 | 2,905 | ||||||||||||
Central and South America | 914 | 1,325 | 1,868 | 2,213 | ||||||||||||
Asia | 831 | 2,218 | 1,841 | 5,667 | ||||||||||||
Other | 281 | 415 | 570 | 875 | ||||||||||||
Total Revenue | $ | 27,658 | $ | 33,468 | $ | 58,578 | $ | 69,649 | ||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
(In thousands) | November 2, 2019 | October 27, 2018 | November 2, 2019 | October 27, 2018 | ||||||||||||
Hardware | $ | 12,160 | $ | 13,096 | $ | 37,514 | $ | 37,989 | ||||||||
Supplies | 17,655 | 18,107 | 55,463 | 52,690 | ||||||||||||
Service and Other | 3,503 | 2,993 | 9,990 | 8,811 | ||||||||||||
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| |||||||||
Total Revenue | $ | 33,318 | $ | 34,196 | $ | 1 02,967 | $ | 99,490 | ||||||||
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|
Three Months Ended | Six Months Ended | |||||||||||||||
(In thousands) | August 1, 2020 | August 3, 2019 | August 1, 2020 | August 3, 2019 | ||||||||||||
Hardware | $ | 8,439 | $ | 12,437 | $ | 17,354 | $ | 25,355 | ||||||||
Supplies | 17,140 | 18,080 | 36,258 | 37,808 | ||||||||||||
Service and Other | 2,079 | 2,951 | 4,966 | 6,486 | ||||||||||||
Total Revenue | $ | 27,658 | $ | 33,468 | $ | 58,578 | $ | 69,649 | ||||||||
2020, offset by cash payments received in advance of satisfying performance obligations.
Three Months Ended | Nine Months Ended | |||||||||||||||
November 2, 2019 | October 27, 2018 | November 2, 2019 | October 27, 2018 | |||||||||||||
Weighted Average Common Shares Outstanding – Basic | 7,046,803 | 6,924,554 | 7,012,595 | 6,858,365 | ||||||||||||
Effect of Dilutive Options, Restricted Stock Awards and Restricted Stock Units | 151,795 | 242,074 | 259,840 | 197,760 | ||||||||||||
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|
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| |||||||||
Weighted Average Common Shares Outstanding – Diluted | 7,198,598 | 7,166,628 | 7,272,435 | 7,056,125 | ||||||||||||
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|
Three Months Ended | Six Months Ended | |||||||||||||||
August 1, 2020 | August 3, 2019 | August 1, 2020 | August 3, 2019 | |||||||||||||
Weighted Average Common Shares Outstanding – Basic | 7,105,241 | 7,020,890 | 7,089,169 | 6,995,679 | ||||||||||||
Effect of Dilutive Options, Restricted Stock Awards and Restricted Stock Units | 17,354 | 350,312 | 24,359 | 313,862 | ||||||||||||
Weighted Average Common Shares Outstanding – Diluted | 7,122,595 | 7,371,202 | 7,113,528 | 7,309,541 | ||||||||||||
November 2, 2019 | January 31, 2019 | |||||||||||||||||||||||||||||||
(In thousands) | Gross Carrying Amount | Accumulated Amortization | Currency Translation Adjustment | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Currency Translation Adjustment | Net Carrying Amount | ||||||||||||||||||||||||
Miltope: | ||||||||||||||||||||||||||||||||
Customer Contract Relationships | $ | 3,100 | $ | (1,947 | ) | $ | — | $ | 1,153 | $ | 3,100 | $ | (1,723 | ) | $ | — | $ | 1,377 | ||||||||||||||
RITEC: | ||||||||||||||||||||||||||||||||
Customer Contract Relationships | 2,830 | (988 | ) | — | 1,842 | 2,830 | (725 | ) | — | 2,105 | ||||||||||||||||||||||
Non-Competition Agreement | 950 | (823 | ) | — | 127 | 950 | (681 | ) | — | 269 | ||||||||||||||||||||||
TrojanLabel: | ||||||||||||||||||||||||||||||||
Existing Technology | 2,327 | (968 | ) | 92 | 1,451 | 2,327 | (711 | ) | 140 | 1,756 | ||||||||||||||||||||||
Distributor Relations | 937 | (273 | ) | 34 | 698 | 937 | (200 | ) | 56 | 793 | ||||||||||||||||||||||
Honeywell: | ||||||||||||||||||||||||||||||||
Customer Contract Relationships | 27,243 | (6,060 | ) | — | 21,183 | 27,243 | (3,869 | ) | — | 23,374 | ||||||||||||||||||||||
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Intangible Assets, net | $ | 37,387 | $ | (11,059 | ) | $ | 126 | $ | 26,454 | $ | 37,387 | $ | (7,909 | ) | $ | 196 | $ | 29,674 | ||||||||||||||
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|
August 1, 2020 | January 31, 2020 | |||||||||||||||||||||||||||||||
(In thousands) | Gross Carrying Amount | Accumulated Amortization | Currency Translation Adjustment | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Currency Translation Adjustment | Net Carrying Amount | ||||||||||||||||||||||||
Miltope: | ||||||||||||||||||||||||||||||||
Customer Contract Relationships | $ | 3,100 | $ | (2,176 | ) | $ | — | $ | 924 | $ | 3,100 | $ | (2,021 | ) | $ | — | $ | 1,079 | ||||||||||||||
RITEC: | ||||||||||||||||||||||||||||||||
Customer Contract Relationships | 2,830 | (1,236 | ) | — | 1,594 | 2,830 | (1,076 | ) | — | 1,754 | ||||||||||||||||||||||
Non-Competition Agreement | 950 | (950 | ) | — | — | 950 | (871 | ) | — | 79 | ||||||||||||||||||||||
TrojanLabel: | ||||||||||||||||||||||||||||||||
Existing Technology | 2,327 | (1,222 | ) | 160 | 1,265 | 2,327 | (1,053 | ) | 78 | 1,352 | ||||||||||||||||||||||
Distributor Relations | 937 | (344 | ) | 69 | 662 | 937 | (297 | ) | 27 | 667 | ||||||||||||||||||||||
Honeywell: | ||||||||||||||||||||||||||||||||
Customer Contract Relationships | 27,243 | (8,252 | ) | — | 18,991 | 27,243 | (6,791 | ) | — | 20,452 | ||||||||||||||||||||||
Intangible Assets, net | $ | 37,387 | $ | (14,180 | ) | $ | 229 | $ | 23,436 | $ | 37,387 | $ | (12,109 | ) | $ | 105 | $ | 25,383 | ||||||||||||||
August 3, 2019.
(In thousands) | Remaining 2020 | 2021 | 2022 | 2023 | 2024 | |||||||||||||||
Estimated amortization expense | $ | 1,050 | $ | 4,071 | $ | 3,983 | $ | 3,978 | $ | 3,975 |
(In thousands) | Remaining 2021 | 2022 | 2023 | 2024 | 2025 | |||||||||||||||
Estimated amortization expense | $ | 1,993 | $ | 3,969 | $ | 3,963 | $ | 3,965 | $ | 3,393 |
(In thousands) | November 2, 2019 | January 31, 2019 | ||||||
Materials and Supplies | $ | 21,116 | $ | 17,517 | ||||
Work-In-Process | 1,586 | 1,633 | ||||||
Finished Goods | 18,170 | 15,688 | ||||||
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| |||||
40,872 | 34,838 | |||||||
Inventory Reserve | (5,278 | ) | (4,677 | ) | ||||
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| |||||
$ | 35,594 | $ | 30,161 | |||||
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|
(In thousands) | August 1, 2020 | January 31, 2020 | ||||||
Materials and Supplies | $ | 21,287 | $ | 20,151 | ||||
Work-In-Process | 1,857 | 1,408 | ||||||
Finished Goods | 16,927 | 17,992 | ||||||
40,071 | 39,551 | |||||||
Inventory Reserve | (7,703 | ) | (5,626 | ) | ||||
$ | 32,368 | $ | 33,925 | |||||
The Company has a revolving line of credit under its existing Credit Agreement and Debt
At November 2, 2019, $6.5 million has been drawn on the revolving line of credit. The outstanding balance bears interest at a weighted average annual rate of 5.26% and $93,000 and $39,000 of interest has been incurred on this obligation and included in other expense in the accompanying condensed consolidated income statement for the nine month periods ended November 2, 2019 and October 27, 2018, respectively. At November 2, 2019, there was $3.5 million available for borrowing under the revolving credit facility.
Following the completion of the third quarter of fiscal 2020, the Company entered into a Fourth Amendment to the Credit Agreement to, among other things, temporarily increase the revolving line of credit from $10.0 million to $17.5 million and modify certain of the financial covenants with which the Company must comply thereunder. For additional information on the amendment and the resulting changes to the terms of the agreement, see Note 17 – Subsequent Events.
The Company is We are also required to pay a commitment fee on the undrawn portion of the revolving credit facility atthat varies within a range of
Note 8 –property, (b) net cash proceeds from certain issuances of equity, (c) net cash proceeds from certain issuances of additional debt and (d) net cash proceeds from certain extraordinary receipts.
(In thousands) | November 2, 2019 | January 31, 2019 | ||||||
USD Term Loan (3.30% as of November 2, 2019 and 4.02% as of January 31, 2019); maturity date of November 20, 2022 | $ | 9,000 | $ | 11,250 | ||||
USD Term Loan (3.30% as of November 2, 2019 and 4.02% as of January 31, 2019); maturity date of January 31, 2022 | 5,244 | 6,992 | ||||||
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| |||||
$ | 14,244 | $ | 18,242 | |||||
Debt Issuance Costs, net of accumulated amortization | (124 | ) | (164 | ) | ||||
Current Portion of Term Loans | (5,116 | ) | (5,208 | ) | ||||
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| |||||
Long-Term Debt | $ | 9,004 | $ | 12,870 | ||||
|
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|
|
(In thousands) | August 1, 2020 | January 31, 2020 | ||||||
USD Term Loan (4.65% as of August 1, 2020); maturity date of June 15, 2022 | $ | 14,430 | $ | — | ||||
USD Term Loan (3.03% as of January 31, 2020) | — | 8,250 | ||||||
USD Term Loan (3.03% as of January 31, 2020) | — | 4,784 | ||||||
$ | 14,430 | $ | 13,034 | |||||
Debt Issuance Costs, net of accumulated amortization | (179 | ) | (111 | ) | ||||
Current Portion of Term Loans | (4,392 | ) | (5,208 | ) | ||||
Long-Term Debt | $ | 9,859 | $ | 7,715 | ||||
| ||||
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| ||||
Following
(In thousands) | ||||
Fiscal 2021, remainder | $ | 1,854 | ||
Fiscal 20 22 | 5,326 | |||
Fiscal 202 3 | 7,250 | |||
$ | 14,430 | |||
The Company has
The
The
August 1, 2020 | January 31, 2020 | |||||||||||||||||||||||
Cash Flow Hedges | Fair Value Derivatives | Fair Value Derivatives | ||||||||||||||||||||||
(In thousands) | Notional Amount | Asset | Liability | Notional Amount | Asset | Liability | ||||||||||||||||||
Cross-currency Interest Rate Swap | $ | — | $ | — | $ | — | $ | 4,489 | $ | — | $ | 250 | ||||||||||||
Interest Rate Swap | $ | — | $ | — | $ | — | $ | 8,250 | $ | — | $ | 96 |
Cash Flow Hedges | November 2, 2019 | January 31, 2019 | ||||||||||||||||||||||
(In thousands) | Fair Value Derivatives | Fair Value Derivatives | ||||||||||||||||||||||
Notional Amount | Asset | Liability | Notional Amount | Asset | Liability | |||||||||||||||||||
Cross-currency Interest Rate Swap | $ | 4,949 | $ | — | $ | 329 | $ | 6,329 | $ | — | $ | 600 | ||||||||||||
Interest Rate Swap | $ | 9,000 | $ | — | $ | 88 | $ | 11,250 | $ | 85 | $ | — |
Cross-currency Interest Rate Swap and the Interest Rate swap are included in other long-term liabilities on the condensed consolidated balance sheets for the period ended January 31, 2020.
Three Months Ended | ||||||||||||||||||
Amount of Gain (Loss) Recognized in OCI on Derivative | Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Expense) | Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Expense) | ||||||||||||||||
Cash Flow Hedge (In thousands) | November 2, 2019 | October 27, 2018 | November 2, 2019 | October 27, 2018 | ||||||||||||||
Swap Contracts | $ | 80 | $ | 283 | Other Income (Expense) | $ | (3 | ) | $ | 192 | ||||||||
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Nine Months Ended | ||||||||||||||||||
Amount of Gain (Loss) Recognized in OCI on Derivative | Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Expense) | Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Expense) | ||||||||||||||||
Cash Flow Hedge (In thousands) | November 2, 2019 | October 27, 2018 | November 2, 2019 | October 27, 2018 | ||||||||||||||
Swap Contracts | $ | 82 | $ | 981 | Other Income (Expense) | $ | 259 | $ | 775 | |||||||||
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August 3, 2019:
Three Months Ended | ||||||||||||||||||||
Amount of Gain (Loss) Recognized in OCI on Derivative | Location of Gain (Loss) Reclassified from Accumulated OCI into Income | Amount of Gain (Loss) Reclassified from Accumulated OCI into Income | ||||||||||||||||||
Cash Flow Hedge (In thousands) | August 1, 2020 | August 3, 2019 | August 1, 2020 | August 3, 2019 | ||||||||||||||||
Swap contracts | $ | (290 | ) | $ | (147 | ) | Other Income (Expense) | $ | (297 | ) | $ | 77 | ||||||||
Six Months Ended | ||||||||||||||||||||
Amount of Gain (Loss) Recognized in OCI on Derivative | Location of Gain (Loss) Reclassified from Accumulated OCI into Income | Amount of Gain (Loss) Reclassified from Accumulated OCI into Income | ||||||||||||||||||
Cash Flow Hedge (In thousands) | August 1, 2020 | August 3, 2019 | August 1, 2020 | August 3, 2019 | ||||||||||||||||
Swap contracts | $ | (340 | ) | $ | 2 | Other Income (Expense) | $ | (248 | ) | $ | 262 | |||||||||
August 1, 2020.
Policy
On February 1, 2019 the Company adopted ASC 842, Leases. This new guidance requires a lessee to recognize assets and liabilities on the balance sheet for all leases, with the result being the recognition of a right of use (ROU) asset and a lease liability. The lease liability is equal to the present value of the minimum lease payments for the term of the lease, including any optional renewal periods determined to be reasonably certain to be exercised, using a discount rate determined at lease commencement. This discount rate is the rate implicit in the lease, if known; otherwise, the incremental borrowing rate for the expected lease term is used. The Company’s incremental borrowing rate approximates the rate the Company would have to pay to borrow on a collateralized basis over a similar term at lease inception. The value of the ROU asset is equal to the initial measurement of the lease liability plus any lease payments made to the lessor at or before the commencement date and any unamortized initial direct costs incurred by the lessee, less any unamortized lease incentives received.
There are two types of leases, operating leases and finance leases. Lease classification is determined at lease commencement. All of the Company’s leases are classified as operating leases. Operating lease expense is recognized on a straight-line basis over the lease term and included in general and administrative expense on the condensed consolidated statement of income. For operating leases, ROU assets are classified in other long-term assets, short-term lease liabilities are classified in other current liabilities, and long-term lease liabilities are classified in other long-term liabilities on the condensed consolidated balance sheet. On the cash flow statement, payments for operating leases are classified as operating activities.
The Company enters
In addition, several of our lease agreements includenon-lease components for items such as common area maintenance and utilities which are accounted for separately from the lease component.
Adoption Method and Impact
The Company applied ASC 842 to all leases in effect at February 1, 2019 and adopted the accounting standard using thenon-comparative transition option, which does not require the restatement of prior years. Comparative information has not been adjusted and continues to be reported under the previous accounting guidance. The Company has elected the package of practical expedients, which allows entities to not reassess (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. The Company has made an accounting policy election to apply the short-term exception, which does not require the capitalization of leases with terms of 12 months or less. On February 1, 2019, the Company recognized $2.0 million of ROU assets and lease liabilities on its consolidated balance sheet. The adoption did not have a material impact on the Company’s results of operations or cash flows.
Disclosure
Our leases have remaining lease terms of 1 to 128 years, some of which include options to extend the lease term for periods of up to five years when it is reasonably certain the Companythat we will exercise such options.
The company leases office space from an affiliate. This lease is classified as an operating lease with annual rental payments of approximately $64,000 and $66,000 in fiscal 2020 and 2021, respectively.
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Operating Leases (In thousands) | Balance Sheet Classification | August 1, 2020 | January 31, 2020 | |||||||
Lease Assets | Right of Use Assets | $ | 1,541 | $ | 1,661 | |||||
Lease Liabilities – Current | Other Liabilities and | 394 | 416 | |||||||
Lease Liabilities – Long Term | Lease Liabilities | 1,191 | 1,279 |
Three Months Ended | Nine Months Ended | |||||||||
Operating Leases (In thousands) | Statement of Income Classification | November 2, 2019 | November 2, 2019 | |||||||
Operating Lease Costs | General and Administrative Expense | $ | 119 | $ | 329 |
Three Months Ended | Six Months Ended | |||||||||
Operating Leases (In thousands) | Statement of Income Classification | August 1, 2020 | August 1, 2020 | |||||||
Operating Lease Costs | General and Administrative Expense | $ | 122 | $ | 242 | |||||
Three Months Ended | Six Months Ended | |||||||||
Operating Leases (In thousands) | Statement of Income Classification | August 3, 2019 | August 3, 2019 | |||||||
Operating Lease Costs | General and Administrative Expense | $ | 118 | $ | 210 |
(In thousands) | November 2, 2019 | |||
2020 | $ | 94 | ||
2021 | 420 | |||
2022 | 354 | |||
2023 | 302 | |||
2024 | 275 | |||
Thereafter | 564 | |||
|
| |||
Total Lease Payments | 2,009 | |||
Less: Imputed Interest | (230 | ) | ||
|
| |||
Total Lease Liabilities | $ | 1,779 | ||
|
|
(In thousands) | August 1, 2020 | |||
2021 | $ | 214 | ||
2022 | 363 | |||
2023 | 312 | |||
2024 | 286 | |||
2025 | 179 | |||
Thereafter | 419 | |||
Total Lease Payments | 1,773 | |||
Less: Imputed Interest | (188 | ) | ||
Total Lease Liabilities | $ | 1,585 | ||
Three Months Ended | Nine Months Ended | |||||||
(In thousands) | November 2, 2019 | November 2, 2019 | ||||||
Cash paid for amounts included in the measurement of lease liabilities: | $ | 108 | $ | 306 |
As previously disclosed in our fiscal year 2019 Annual Report on Form10-K and under the previous lease accounting standard, future minimum operating lease commitments that had initial or remainingnon-cancelable lease terms in excess of one year at January 31, 2019 were as follows:
(In thousands) | ||||
2020 | $ | 574 | ||
2021 | 520 | |||
2022 | 387 | |||
2023 | 294 | |||
2024 | 273 | |||
Thereafter | 568 | |||
|
| |||
$ 2,616 | ||||
|
|
Three Months Ended | Six Months Ended | |||||||
(In thousands) | August 1, 2020 | August 1, 2020 | ||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
Operating cash flows for operating leases | $ | 125 | $ | 231 | ||||
Three Months Ended | Six Months Ended | |||||||
(In thousands) | August 3, 2019 | August 3, 2019 | ||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
Operating cash flows for operating leases | $ | 98 | $ | 198 |
(In thousands) | Foreign Currency Translation Adjustments | Cash Flow Hedges | Total | |||||||||
Balance at January 31, 2019 | $ | (852 | ) | $ | 34 | $ | (818 | ) | ||||
Other Comprehensive Loss before reclassification | (166 | ) | 62 | (104 | ) | |||||||
Amounts reclassified from AOCL to Earnings | 0 | (201 | ) | (201 | ) | |||||||
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|
|
|
|
| |||||||
Other Comprehensive Loss | (166 | ) | (139 | ) | (305 | ) | ||||||
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|
|
|
|
| |||||||
Balance at November 2, 2019 | $ | (1,018 | ) | $ | (105 | ) | $ | (1,123 | ) | |||
|
|
|
|
|
|
(In thousands) | Foreign Currency Translation Adjustments | Cash Flow Hedges | Total | |||||||||
Balance at January 31, 2020 | $ | (985 | ) | $ | (108 | ) | $ | (1,093 | ) | |||
Other Comprehensive Loss before reclassification | 210 | (270 | ) | (60 | ) | |||||||
Amounts reclassified from AOCL to Earnings | — | 193 | 193 | |||||||||
Other Comprehensive Income (Loss) | 210 | (32 | ) | 178 | ||||||||
Balance at August 1, 2020 | $ | (775 | ) | $ | (140 | ) | $ | (915 | ) | |||
as of August 1, 2020.
On January 31, 2019, the compensation committee of the Company’s board of directors adopted an Amended and Restated
In March 2019, the Company granted 47,474 RSUs and 50,148 PSUs to certain key employees.
Three Months Ended | Nine Months Ended | |||||||||||||||
(In thousands) | November 2, 2019 | October 27, 2018 | November 2, 2019 | October 27, 2018 | ||||||||||||
Stock Options | $ | 148 | $ | 215 | $ | 487 | $ | 571 | ||||||||
Restricted Stock Awards and Restricted Stock Units | 371 | 290 | 1,074 | 757 | ||||||||||||
Employee Stock Purchase Plan | 6 | 5 | 15 | 11 | ||||||||||||
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|
|
|
|
|
|
| |||||||||
Total | $ | 525 | $ | 510 | $ | 1,576 | $ | 1,339 | ||||||||
|
|
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|
|
|
|
|
Three Months Ended | Six Months Ended | |||||||||||||||
(In thousands) | August 1, 2020 | August 3, 2019 | August 1, 2020 | August 3, 2019 | ||||||||||||
Stock Options | $ | 131 | $ | 127 | $ | 264 | $ | 339 | ||||||||
Restricted Stock Awards and Restricted Stock Units | 465 | 320 | 822 | 704 | ||||||||||||
Employee Stock Purchase Plan | 5 | 4 | 10 | 9 | ||||||||||||
Total | $ | 601 | $ | 451 | $ | 1,096 | $ | 1,052 | ||||||||
| ||||
| ||||
| ||||
|
There were no stock options granted during the three month period ended October 27, 2018. The weighted average fair value per share for stock options granted was $7.41 during the nine month period ended October 27, 2018.
Number of Options | Weighted Average Exercise Price | |||||||
Outstanding at January 31, 2019 | 771,145 | $ | 14.30 | |||||
Granted | — | — | ||||||
Exercised | (55,175 | ) | 11.68 | |||||
Forfeited | (8,275 | ) | 16.72 | |||||
Canceled | (400 | ) | 6.22 | |||||
|
|
|
| |||||
Outstanding at November 2, 2019 | 707,295 | $ | 14.48 | |||||
|
|
|
|
Number of Options | Weighted Average Exercise Price | |||||||
Outstanding at January 31, 2020 | 679,044 | $ | 14.46 | |||||
Granted | — | — | ||||||
Exercised | (800 | ) | 7.36 | |||||
Forfeited | (48,374 | ) | 12.83 | |||||
Canceled | (1,400 | ) | 7.36 | |||||
Outstanding at August 1, 2020 | 628,470 | $ | 14.61 | |||||
Outstanding | Exercisable | |||||||||||||||||||||||
Range of Exercise prices | Number of Shares | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Life | Number of Shares | Weighted- Average Exercise Price | Weighted Average Remaining Contractual Life | ||||||||||||||||||
$5.00-10.00 | 55,881 | $ | 7.97 | 2.4 | 55,881 | $ | 7.97 | 2.4 | ||||||||||||||||
$10.01-15.00 | 414,814 | $ | 13.62 | 6.1 | 326,794 | $ | 13.64 | 5.6 | ||||||||||||||||
$15.01-20.00 | 236,600 | $ | 17.53 | 8.1 | 112,795 | $ | 17.08 | 7.8 | ||||||||||||||||
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|
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| |||||||||||||
707,295 | $ | 14.48 | 6.5 | 495,470 | $ | 13.78 | 5.8 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
August 1, 2020:
Outstanding | Exercisable | |||||||||||||||||||||||
Range of Exercise prices | Number of Shares | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Life | Number of Shares | Weighted- Average Exercise Price | Weighted Average Remaining Contractual Life | ||||||||||||||||||
$5.00-10.00 | 42,281 | $ | 7.98 | 1.8 | 42,281 | $ | 7.98 | 1.8 | ||||||||||||||||
$10.01-15.00 | 364,464 | $ | 13.63 | 5.4 | 319,166 | $ | 13.65 | 5.0 | ||||||||||||||||
$15.01-20.00 | 221,725 | $ | 17.48 | 7.3 | 167,367 | $ | 17.22 | 7.2 | ||||||||||||||||
628,470 | $ | 14.61 | 5.8 | 528,814 | $ | 14.33 | 5.5 | |||||||||||||||||
(RSAs)
RSUs, PSUs & RSAs | Weighted Average Grant Date Fair Value | |||||||
Outstanding at January 31, 2019 | 133,667 | $ | 13.99 | |||||
Granted | 113,522 | 20.16 | ||||||
Vested | (55,180 | ) | 16.62 | |||||
Forfeited | (2,100 | ) | 19.45 | |||||
|
|
|
| |||||
Outstanding at November 2, 2019 | 189,909 | $ | 16.85 | |||||
|
|
|
|
RSAs & RSUs | Weighted Average Grant Date Fair Value | |||||||
Outstanding at January 31, 2020 | 134,634 | $ | 16.79 | |||||
Granted | 245,131 | 7.61 | ||||||
Vested | (59,314 | ) | 17.66 | |||||
Forfeited | (530 | ) | 18.39 | |||||
Outstanding at August 1, 2020 | 319,921 | $ | 9.59 | |||||
AstroNova has
available
The Company’s
Three Months Ended | Nine Months Ended | |||||||
Fiscal 2020 | (118.2 | )% | 5.5 | % | ||||
Fiscal 2019 | 22.3 | % | 23.4 | % |
The Company determines its
Three Months Ended | Six Months Ended | |||||||
Fiscal 2021 | 99.4 | % | 48.6 | % | ||||
Fiscal 2020 | 3.0 | % | 13.9 | % |
During the nine months ended November 2, 2019, the Company recognized an income tax expense of approximately $182,000. The effective tax rate in this period was directly impacted by 1)year and a $359,000$78,000 tax benefit related to the reversal of previously uncertain tax positions due to the finalization of an IRS audit and the expiration of the statute of limitations on previously uncertain tax positions and 2) a $251,000 tax benefit arising from windfall tax benefits related to the Company’s stock.positions. During the ninesix months ended October 27, 2018, the Company August 3, 2019,
The Company maintainsposition and a $232,000 tax benefit arising from windfall tax benefits related to
August 1, 2020.
AstroNova reports
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
Revenue | Segment Operating Profit | Revenue | Segment Operating Profit | |||||||||||||||||||||||||||||
(In thousands) | November 2, 2019 | October 27, 2018 | November 2, 2019 | October 27, 2018 | November 2, 2019 | October 27, 2018 | November 2, 2019 | October 27, 2018 | ||||||||||||||||||||||||
Product Identification | $ | 21,749 | $ | 21,684 | $ | 1,880 | $ | 2,014 | $ | 67,484 | $ | 63,407 | $ | 6,990 | $ | 5,833 | ||||||||||||||||
T&M | 11,569 | 12,512 | 1,397 | 3,184 | 35,483 | 36,083 | 5,533 | 8,256 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Total | $ | 33,318 | $ | 34,196 | 3,277 | 5,198 | $ | 102,967 | $ | 99,490 | 12,523 | 14,089 | ||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Corporate Expenses | 2,830 | 2,836 | 8,445 | 8,298 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Operating Income | 447 | 2,362 | 4,078 | 5,791 | ||||||||||||||||||||||||||||
Other Expense, Net | (238 | ) | (538 | ) | (788 | ) | (1,320 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Income Before Income Taxes | 209 | 1,824 | 3,290 | 4,471 | ||||||||||||||||||||||||||||
Income Tax (Benefit) Provision | (247 | ) | 407 | 182 | 1,046 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Net Income | $ | 456 | $ | 1,417 | $ | 3,108 | $ | 3,425 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||
Revenue | Segment Operating Profit (Loss) | Revenue | Segment Operating Profit (Loss) | |||||||||||||||||||||||||||||
(In thousands) | 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 | ||||||||||||||||||||||||
Assets measured at fair value: | Fair value measurement at November 2, 2019 | Fair value measurement at January 31, 2019 | ||||||||||||||||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Interest Rate Swap Contract (included in Other Assets) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 85 | $ | — | $ | 85 | ||||||||||||||||
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| |||||||||||||||||
Total Assets | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 85 | $ | — | $ | 85 | ||||||||||||||||
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| |||||||||||||||||
Liabilities measured at fair value: | Fair value measurement at November 2, 2019 | Fair value measurement at January 31, 2019 | ||||||||||||||||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Cross-Currency Interest Rate Swap Contract (included in Other Long-Term Liabilities) | $ | — | $ | 329 | $ | — | $ | 329 | $ | — | $ | 600 | $ | — | $ | 600 | ||||||||||||||||
Interest Rate Swap Contract (included in Other Long-Term Liabilities) | — | 88 | — | 88 | — | — | — | — | ||||||||||||||||||||||||
Earnout Liability (included in Other Long-Term Liabilities) | — | — | 14 | 14 | — | — | 14 | 14 | ||||||||||||||||||||||||
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| |||||||||||||||||
Total Liabilities | $ | — | $ | 417 | $ | 14 | $ | 431 | $ | — | $ | 600 | $ | 14 | $ | 614 | ||||||||||||||||
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|
2020:
Liabilities measured at fair value: | Fair value measurement at August 1, 2020 | Fair value measurement at January 31, 2020 | ||||||||||||||||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Cross-Currency Interest Rate Swap Contract (included in Other Long-Term Liabilities) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 250 | $ | — | $ | 250 | ||||||||||||||||
Interest Rate Swap Contract (included in Other Long-Term Liabilities) | — | — | — | — | — | 96 | — | 96 | ||||||||||||||||||||||||
Earnout Liability (included in Other Long-Term Liabilities) | — | — | — | — | — | — | 14 | 14 | ||||||||||||||||||||||||
Total Liabilities | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 346 | $ | 14 | $ | 360 | ||||||||||||||||
The fair value
The Company’s
November 2, 2019 | ||||||||||||||||||||
Fair Value Measurement | Carrying Value | |||||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Long-Term Debt and related current maturities | $ | — | $ | — | $ | 14,545 | $ | 14,545 | $ | 14,244 | ||||||||||
January 31, 2019 | ||||||||||||||||||||
Fair Value Measurement | Carrying Value | |||||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Long-Term Debt and related current maturities | $ | — | $ | — | $ | 18,857 | $ | 18,857 | $ | 18,242 |
The
August 1, 2020 | ||||||||||||||||||||
Fair Value Measurement | ||||||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Total | Carrying Value | |||||||||||||||
Long-Term debt and related current maturities | $ | — | $ | — | $ | 14,430 | $ | 14,430 | $ | 14,430 |
January 31, 2019 | ||||||||||||||||||||
Fair Value Measurement | ||||||||||||||||||||
(In thousands) | Level 1 | Level 2 | Level 3 | Total | Carrying Value | |||||||||||||||
Long-Term debt and related current maturities | $ | — | $ | — | $ | 13,258 | $ | 13,258 | $ | 13,034 |
Note 17 – Subsequent Event
On December 9, 2019, the Company and its wholly owned Danish subsidiaries, ANI ApS and TrojanLabel ApS (the “Parties”), entered into a Fourth Amendment (the “Fourth Amendment”) to the Credit Agreement dated as of February 28, 2017 between the Parties and Bank of America, N.A. (as previously amended, the “Credit Agreement”). The Fourth Amendment amends the Credit Agreement to, among other things, (i) increase the aggregate amount available for borrowings under the revolving line of credit prior to November 1, 2020 from $10.0 million to $17.5 million and (ii) modify the financial covenants with which the Company must comply thereunder by excluding certain capital expenditures from the calculation of the Company’s consolidated fixed charge coverage ratio, providing that the minimum consolidated fixed charge coverage ratio covenant will be suspended through the second quarter of fiscal 2021, and adding a minimum consolidated EBITDA covenant commencing with the fourth quarter of fiscal 2020 and continuing through the second quarter of fiscal 2021.
Item 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
2020.
The Company markets and sells itssell our products and services globally through a diverse distribution structure of direct sales personnel, manufacturers’ representatives and authorized dealers that deliver a full complement of branded products and services to customers in our respective markets. Our growth strategy centers on organic growth through product innovation made possible by research and development initiatives, as well as strategic acquisitions that fit into or complement existing core businesses.
(Dollars in thousands) | November 2, 2019 | As a % of Revenue | October 27, 2018 | As a % of Revenue | % Change Over Prior Year | |||||||||||||||
Product Identification | $ | 21,749 | 65.3 | % | $ | 21,684 | 63.4 | % | 0.3 | % | ||||||||||
T&M | 11,569 | 34.7 | % | 12,512 | 36.6 | % | (7.5 | )% | ||||||||||||
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| |||||||||||
Total | $ | 33,318 | 100.0 | % | $ | 34,196 | 100.0 | % | (2.6 | )% | ||||||||||
|
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|
|
(Dollars in thousands) | August 1, 2020 | As a % of Revenue | August 3, 2019 | As a % of Revenue | % Change Compared to Prior Year | |||||||||||||||
Product Identification | $ | 21,629 | 78.2 | % | $ | 22,144 | 66.2 | % | (2.3 | )% | ||||||||||
T&M | 6,029 | 21.8 | % | 11,324 | 33.8 | % | (46.8 | )% | ||||||||||||
Total | $ | 27,658 | 100.0 | % | $ | 33,468 | 100.0 | % | (17.4 | )% | ||||||||||
revenue.
Service and other revenue was $3.5 million in the current quarter, a 17.0% increase over the prior year revenue of $3.0 million. The current quarter increase is primarily due to an increase in parts and repair revenue related to the AstroNova aerospace printer product lines in the T&M segment.
period costs.
The Companygrants.
Nine2020.
August 3, 2019
(Dollars in thousands) | November 2, 2019 | As a % of Revenue | October 27, 2018 | As a % of Revenue | % Change Over Prior Year | |||||||||||||||
Product Identification | $ | 67,484 | 65.5 | % | $ | 63,407 | 63.7 | % | 6.4 | % | ||||||||||
T&M | 35,483 | 34.5 | % | 36,083 | 36.3 | % | (1.7 | )% | ||||||||||||
|
|
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|
|
|
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|
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| |||||||||||
Total | $ | 102,967 | 100.0 | % | $ | 99,490 | 100.0 | % | 3.5 | % | ||||||||||
|
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|
|
(Dollars in thousands) | August 1, 2020 | As a % of Revenue | August 3, 2019 | As a % of Revenue | % Change Compared to Prior Year | |||||||||||||||
Product Identification | $ | 44,009 | 75.1 | % | $ | 45,735 | 65.7 | % | (3.8 | )% | ||||||||||
T&M | 14,569 | 24.9 | % | 23,914 | 34.3 | % | (39.1 | )% | ||||||||||||
Total | $ | 58,578 | 100.0 | % | $ | 69,649 | 100.0 | % | (15.9 | )% | ||||||||||
fiscal 2021.
TrojanLabel product group.
The Companymillion.
The Companyposition resulting in a 13.9% effective tax rate.
2020.
The Company reports
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
Revenue | Segment Operating Profit | Revenue | Segment Operating Profit | |||||||||||||||||||||||||||||
(In thousands) | November 2, 2019 | October 27, 2018 | November 2, 2019 | October 27, 2018 | November 2, 2019 | October 27, 2018 | November 2, 2019 | October 27, 2018 | ||||||||||||||||||||||||
Product Identification | $ | 21,749 | $ | 21,684 | $ | 1,880 | $ | 2,014 | $ | 67,484 | $ | 63,407 | $ | 6,990 | $ | 5,833 | ||||||||||||||||
T&M | 11,569 | 12,512 | 1,397 | 3,184 | 35,483 | 36,083 | 5,533 | 8,256 | ||||||||||||||||||||||||
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| |||||||||||||||||
Total | $ | 33,318 | $ | 34,196 | 3,277 | 5,198 | $ | 102,967 | $ | 99,490 | 12,523 | 14,089 | ||||||||||||||||||||
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|
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| |||||||||||||||||||||||||
Corporate Expenses | 2,830 | 2,836 | 8,445 | 8,298 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Operating Income | 447 | 2,362 | 4,078 | 5,791 | ||||||||||||||||||||||||||||
Other Expense, Net | (238 | ) | (538 | ) | (788 | ) | (1,320 | ) | ||||||||||||||||||||||||
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|
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|
|
| |||||||||||||||||||||||||
Income Before Income Taxes | 209 | 1,824 | 3,290 | 4,471 | ||||||||||||||||||||||||||||
Income Tax (Benefit) Provision | (247 | ) | 407 | 182 | 1,046 | |||||||||||||||||||||||||||
|
|
|
|
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|
| |||||||||||||||||||||||||
Net Income | $ | 456 | $ | 1,417 | $ | 3,108 | $ | 3,425 | ||||||||||||||||||||||||
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|
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||
Revenue | Segment Operating Profit (Loss) | Revenue | Segment Operating Profit (Loss) | |||||||||||||||||||||||||||||
(In thousands) | 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 | ||||||||||||||||||||||||
Total current quarter revenue
Revenues from the Product Identification segment increased 6.4% to $67.5 million in the first nine months of the current year, from $63.4with revenue of $21.6 million compared to $22.1 million in the same period of the prior year. The current year increasequarter decrease in revenue is primarily attributable to strong demand fordeclines in the QuickLabel product group as a result of lower ink jet, thermal paper supplies and hardware product sales, as well as lower parts and repair revenue. The overall revenue decrease in PI was tempered by increased sales of both hardware and supplies within the TrojanLabel product group, specifically, TrojanLabel’s
operating costs.
in the current quarter.
in the current year.
Generally,
Our cash and cash equivalents athave funded acquisitions by borrowing under bank term loan facilities.
The Company’s backlog decreased 18.8% fromyear-end to $20.8 million at the end of the third quarter of fiscal 2020.
Indebtedness
In fiscal 2018, the Company and the Company’s wholly owned Danish subsidiaries, ANI ApS and TrojanLabel ApS, entered into a credit agreementfinancial covenants in our Credit Agreement dated February 28, 2017 (the “Existing Credit Agreement”) with Bank of America, N.A. (the “Lender”), which, as amended through November. On June 22, 2020, we entered into a letter agreement with the Lender wherein it agreed to waive compliance with those financial covenants for the measurement period ended May 2, 20192020.
Both term loans bear interest at a rate per annum equal to the LIBOR rate plus a margin that varies within a range of 1.0% to 1.5% based on the Company’s consolidated leverage ratio.
Existing Credit Agreement. In connection with our entry into the A&R Credit Agreement, ANI ApSwe entered into an Amended and Restated Security and Pledge Agreement and a hedging agreement to managemortgage in favor of the variable interest rate risk and currency risk associated with its payments in respect to the term loan. Under this combined arrangement, payments of principal and interestLender with respect to approximately $8.9 millionour owned real property in West Warwick, Rhode Island. Under the A&R Credit Agreement, AstroNova, Inc. is the sole borrower and its obligations are guaranteed by ANI ApS and TrojanLabel.
general corporate purposes. Revolving credit loans may be borrowed, at the Company’sour option, in U.S. Dollars or, subject to certain conditions, Euros, British Pounds, Canadian Dollars or Danish Kroner. Amounts
The obligations of ANI ApSto prepay subordinated indebtedness, in respect of the $9.2 million term loan are guaranteed by the Company and TrojanLabel ApS. The Company’s obligations in respect of the $15.0 million term loan, revolving credit facility and its guarantee in respect of the ANI ApS term loan are secured by substantially all of the assets of the Company (including a pledge of a portion of the equity interests held by the Company in ANI ApS and the Company’s wholly owned German subsidiary, AstroNova GmbH),each case subject to certain exceptions.
exceptions and thresholds as set forth in the A&R Credit Agreement.
The Parties must comply with various customary financial andnon-financialdefault, which include, among other events, the following (which are subject, in some cases, to certain grace periods): failure to pay when due any principal, interest or other amounts in respect of the loans, breach of any of our covenants or representations under the Credit Agreement.
On December 9, 2019,loan documents, default under any other of our or our subsidiaries’ significant indebtedness agreements, a bankruptcy, insolvency or similar event with respect to us or any of our subsidiaries, a significant unsatisfied judgment against us or any of our subsidiaries, or our undergoing a change of control.
The Company believes it is in compliance with allPPP Loan proceeds we spend on payroll, rent, utilities and interest on certain debt during the twenty-four week period following incurrence of the covenantsPPP Loan may be forgiven under the PPP. The amount of the PPP Loan to be forgiven in respect of rent, utilities and interest on certain debt will be capped at 40% of the amended Credit Agreement.
forgiven amount, with the remaining forgiven amount allocated to payroll costs. We have fully utilized the PPP Loan proceeds for qualifying expenses and intend to apply for forgiveness of the PPP Loan during the third quarter of the current fiscal year. Whether our application for forgiveness will be granted and in what amount is subject to an application to, and approval by, the SBA and may also be subject to further requirements in any regulations and guidelines the SBA may adopt.
The Company’s
The2020.
2020 and a decline in days sales outstanding for the second quarter of the current year, which was 47 compared to 55 days at prior year end. The decline in days sales outstanding is largely due to the relative decline in sales of aerospace products, which tend to have longer collection cycles.
aerospace product group resulted in unconsumed assembly and finished goods inventories, offsetting some of the Product Identification inventory decreases. Inventory days on hand increased by virtue of the lower aerospace sell through.
The process of determining significant estimates is fact-specific and takes into account factors such as historical experience, current and expected economic conditions, product mix, and in some cases, actuarial and appraisal techniques. We constantly
2020.
Item 3. |
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Item 4. |
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COVID-19
Item 1. |
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Item 1A. | Risk Factors |
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year ended January 31, 2020 (the “Annual Report”). We are providing the following information regarding changes that have occurred to the previously disclosed risk factors in our Annual Report on
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
There have been no material updates to the risk factors previously disclosed in the Company’s Annual Report onForm 10-K for the fiscal year ended January 31, 2019.
Total Number of Shares Repurchased | Average Price paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares That May Be Purchased Under The Plans or Programs | |||||||||||||
May 1—May 31 | — | $ | — | — | — | |||||||||||
June 1—June 30 | 7,917 | (a) | $ | 6.63 | (a) | — | — | |||||||||
July 1—July 31 | — | $ | — | — | — |
Item 5. |
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The Company is
the
Item 6. |
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32.2 | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
101.SCH Inline XBRL Taxonomy Extension Schema Document | ||
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document | ||
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document | ||
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||
104 Cover Page Interactive Data File (embedded within the |
* | Management contract or compensatory plan or arrangement. |
ASTRONOVA, INC. | ||||||
(Registrant) | ||||||
Date: | By | /s/ Gregory A. Woods | ||||
Gregory A. Woods, | ||||||
President and Chief Executive Officer | ||||||
(Principal Executive Officer) | ||||||
By | /s/ David S. Smith | |||||
David S. Smith, | ||||||
Vice President, Chief Financial Officer and Treasurer (Principal Accounting Officer and Principal Financial Officer) |
34