ALOT - Earnings call transcript Q1 2019

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Operator

Good day, everyone, and welcome to AstroNova’s First Quarter Fiscal Year 2019 Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the call over to David Calusdian. Please go ahead, sir.

David Calusdian

Thank you. thank joining and everyone, morning, you us. for Good Greg President and this morning’s and AstroNova’s are call CFO. Hosting CEO; Woods, David Smith, discuss management will results; operating happy to the make the questions. take be concluding will your some then through will financials; David and comments; take you Greg Greg will company’s have a of the now release that By received you earnings should today. copy was issued

during are of copy, today’s the statements fact not Reform speak do Private The to go These company risks you that forward-looking not required please statements today, that except statements Securities that as XXXX. statements. have XXXX. on note Accordingly, only assumptions call June a made website, law, X, differ of could are and forward-looking of AstroNova are investors any update statements If as materially; www.astronovainc.com. considered Litigation Please section forward-looking by involve within to these of statements a actual of the historical based Act forward-looking the undertakes number uncertainties. results obligation no could

further the Securities statements Form factors and differences, filings may cause Report with makes Risk and see Commission. AstroNova’s XX-K forward-looking information the regarding that please on Factors other the and in For Exchange the company the Annual

Greg the turn call I’ll Now, over Woods. to

Gregory Woods

you, Thank us. David. for thank you everyone, and Good joining morning,

strong from over line. printer especially provide with significant me an XX.X%, to year last Honeywell $XX.X of recently XX% with QX you turned $XX.X acquired Aerospace million. quarterly increased in revenue Let with T&M up Revenue a our brief a of contributions product performance. million, The segment record overview quarter

of Product prior of segment and year-over-year color our supplies, label and their the color from printers QuickLabel-branded printing with over with and product recording growth commercial presses its double-digit systems. of X% line achieved line increase year. continued line TrojanLabel we data the with addition, along systems label growth digital related digital a product acquisition Identification The In

report printers in milestone to That by has a of Warwick accomplished production the the we takeaway these to installation that production plant in new transferred quarter, running facility Asia the Rhode our pleased Honeywell is up in major a our operation. ago, The since lean and completing and Honeywell transition printers location. state-of-the-art here Honeywell the production that two from I’m During Island. in the West printer in qualified for is weeks been we line the one-piece-flow of line a

can customer for now With regulatory the obtaining and required focus the we approvals production authorization. ship successfully necessary transferred, on direct

we to will which significant several continue services charges we Honeywell. agreement incur expect take During to months, that to related process, the transition with

getting we a of for of in However, several the of highlights majority done business was team transfer a exceptionally months. the of significant proud complete Honeywell I’m our is timely production of end from recent the our work this manner. The this before line The and year. Aerospace expect accomplishment, in integration to it one

ToughWriter Type X aircraft. Federal as the me six retrofit on This next-generation certificate from data our to TWX, us Aviation or of of Let a allows Administration. others. flight XXX Boeing a Certificate we couple April, received Supplemental a the install models In deck printer, touch on

aircraft. interested, XXX, includes our XXX, XXXER a the of and TWX world-wide XXX programs this for are you those printer. XXX-XXX, market series represent For who XXXC, retrofit new Aircraft

weight, of TWX typically life service significant means For savings in over airlines XX% in operating aircraft. these aircraft, resulting printer a fuel switching reduction to the the the

a in Shandong aircraft. MAX carrier Our This its the aircraft. recent also Boeing’s commitment carrier new on March. select Airlines China’s newest from MAX Boeing printers XXX continue similar traction to flydubai to for aerospace the follows is most gain TWX XXX

in the year. that few first and QuickLabel changes far In customers its printers, revenue first to inkjet Innovation in TWX in quarters. year. offerings. as Technology to products lower products The about over fiscal new digital announced quarter which up our nice North that accelerate Turning competitive are units the growth growth and to April, we’re response of than from move printer segment, cost our in we was product of past X% into to midsized we’ve at terrific. up allowing now Identification we label flagship prior customer has these been was and the to expect the new our the through line these delivered pressure finishing our the see excited game Product the Centers shipments – is America. the TrojanLabel system new first press new ramp the to color introduced nicely Trojan TX, small getting TXC a and we high-production for TX The The the underway commercial move printing these response continues

our efficiencies Germany. The is call, mentioned and Warwick, Middle in to date, in recently, most Europe, in distribution Frankfurt, should in production QX the as which location increase East, mode, those As regions. German centers significantly I serves Copenhagen, Shanghai full Chicago, we’ve Africa our now opened West which

quarter Our Technology Mexico will next Center Innovation open in later this City.

the Stratevise, General to printing is appointed our our solutions quarter of the Board, Directors. governance background a enhance international business Director, as the to to is our seasoned the leading executive Warzala, Independent Allied Motion who corporate continue of at the Europe continued during addition Managing enhance and companies Counsel corporations, Schlaeppi, business months, Board with America. Partner past we at valuable December. following appointment industries. as international strategic the served Yvonne in international of advisory Yvonne Dick last Technologies and the to a including corporate has and Chairman manufacturing in is also in of the AstroNova Asia, CEO Latin We Yvonne six employment presence Director extensive to global firm, Board Her the second

turn review. over call Now the me the David financial to let for

David Smith

Thanks, Greg, and good morning, everybody.

for of XX% Measurement from prior and the the year-on-year and Domestic the with XX% the International revenue we accounted Test for accounted increase. sales. total up & other with revenue was majority up Greg for XX%. noted, had QX XX% increased of As the a year, solid XX% accounting

of XX% by and increased same X% the for of revenue contribution primarily period related sales operating the generated last relationship income and in increased from margin or Gross or year. of support or said, improved and also operating year revenue points hardware for up prior increase XX,XXX, expense. investments from XX.X% – year. $XX.X sales income new margin revenue strategies. By tangible of which higher printer XX%. Looking reflected reflected income segment XX.X% from million, $X.X declined in $XX.X the other to of grew we’ve sales prior as an product was supplies revenue by XX% favorable revenue deal made million, over segment, & of of operating in for the at Test the revenue income assets the supplies. quarter – from million in margin driven consolidated into the the was last the Honeywell prior largely million versus revenue last $X.X profit margin repair Hardware to year, XX.X% year a X.X% to primarily margin, or and in from service income from year, increase operating last amortized & revenue Measurement $X.X change basis tax Test in the the XX% year, growth supplies. expenses X.X% effective the and million prior the last quarter, primarily Operating QX Operating operating increased XX% hardware a X% up from the as Product rate XX.X% acquired provision and due in in tax XX% to margin higher X.X% Product mix. of and of printers, revenue and printers. product our roughly Operating some expenses XX% compared hardware million year. first approximately were $X.X generated now a percentage higher segment Greg for Identification other XX QX Measurement as was customer but category, The was year, XX.X%. versus of Identification from $XXX,XXX acquired in QX

You range. the to point can expect we XX% a full-year expect XX% this can at or rate in

control, we are manufacturing a a additional of so be the own increasingly two as last release, aerospace from As quarters, lot the still this product period change will of that estimates we contracts helps. being in nicely line of a over as transition the during products. accounting production product pressure about were our on the better all mentioned the to AstroNova, incur $X.X We’ve now well profitable total costs transferred rebates income until Honeywell that by under over that in so we million we roof of and directly our Malaysia, recover to able printers balance were incurred under the and in due And manufactured have while those operating costs the in – costs all rather to we expect year. this the and estimates

normal a expenditures CapEx with balance Working cash opportunity largely service net quarter year. million in quarter capital Turning to for bit manufacturing. to through to remains about the transition to quarter, Capital we $X an as first $X.X million support Working capital debt We cash the the in remains $X.X first the a move approximately our XX%, was the area and million exited million million in about $X.X use and $XX.X over the at strong. remains Honeywell in are the debt, sheet. debt-to-capital and range. business so million of the $X of ability the

to part our unify that as decided state-of-the-art operations. However, implement all ERP our have new of system we just global a initiatives, growth business of will

two common the domestically independent of enhance opportunity business processes. taking improvements one will streamline moving and one and while we’re to make to that internationally, running currently a We’re systems, our number and platform a ERP

that $X.X fiscal this for a the change stages of and implementation. ERP remaining of expenditures may of this the over but implementation We’re all in capital three approximately early anticipate will million this occur XXXX. quarters Most we of bit,

on our this generation return both our should high revenue operational efficiencies. and project, for which investment improve a expect We effectiveness

back will I want in be that Midwest Chicago present the Before Conference. turn we Greg, at I to to you IDEAS in remind to call August the Investor

you’re you. If to with opportunity to meet we’d planning attend, the welcome

e-mail a alot@investorrelations.com to one-on-one. arrange So

to turn back closing comments. I’ll it for Now, Greg

Gregory Woods

Thanks, David.

fiscal transition second an of XXXX the in performance aerospace our year, for we the down than for the Looking expect in better and we with operational traction. product results XXXX even and the gain our new first the wind improving year be TrojanLabel printer continue than agreement the quarter line company ahead, as service products the stronger to to second-half fiscal new

questions. be to and David Operator? your Now I’d take happy

Operator

take Management. Instructions] MKH Melas you, We’ll first Thank [Operator our with from George sir. question

George Melas

guys. morning, Good Yes.

Gregory Woods

how are George, you? Hey,

George Melas

of the Can in more Very – product do it talk And costs? color them bit a the to could you revenue, product you how Thank sort what is you to numbers, little contributes how your us to well. you about can’t expect your launches you. or guys and and now on And TrojanLabel contributing do? if the to contribute expect you really fiscal maybe put give XXXX?

Gregory Woods

Sure.

enhances the line the product at the brand commercial and that the QuickLabel primarily is TrojanLabel TrojanLabel line up owners market. printing the production to product brand focused And sense QuickLabel a units. from So the tabletop larger and that in goes market owners

one products to up So TX, the go ranges, the $XX,XXX $XXX,XXX the an the all the brought way from are newest $X,XXX TrojanLabel and the of idea price to per for on you unit, the $XX,XXX over typically out. tabletop the to give range in we’ve units kind

essentially product fantastic So, we we’ve those wanted with did end in extensive we last some products The the our got did to finish. at so about very as – some numbers market last nine But of additional TrojanLabel were year, the months fiscal year. Denmark the they a to came actually might at for they did of finish market. the year, bring ship first to during so start remember, job. and the to year, what beginning up research start We that the you acquired in team

– are that equal terms So TXC the of now and in have don’t really, performance. And those call. and the referenced TX any in that’s in right the market products I price

So there let’s segment we just market where didn’t to printing new attack have printing market fit market. really a the a go whole digital product was for good the and commercial that

sales to out this significant So going it’s brand, PI but yes, do we exact break expect contributor the don’t the that be to business a we year. by

George Melas

the launching in or everywhere U.S. you TXC the And in time? Okay. the the TX Europe at of are sort and same or

Gregory Woods

we our it do that’s countries really as launched operandi modus one, serve. is globally our we’re that with No, launches most we to right part we now for the as – able that, all we this globally. And did the in long

show is actually product now going a around in There’s the world. So trade Mexico being on distributed now. right that

of We’re those some exhibiting products.

George Melas

of has Is But the And they are are or well. the Trojan I don’t just or...? products right sort know product and but older as that that TXC market the is Okay. remind the to they me on the right, sell now, sort TX, the older newest. if word, right that legacy of

Gregory Woods

line. a Yes, full there’s product

The are main products TX all on TX, can other which the the our website those and see of there. you

George Melas

Okay, great.

Okay. you much. very Thank

Gregory Woods

Thank you, George.

Operator

time. additional [Operator for no over or remarks. closing the I are Instructions] this to there would turn like any questions call And to back Woods further at Greg

Gregory Woods

day, everyone. look you forward you Okay. to our updating and great have progress Well, thank for morning. a on this us joining We

Operator

may you today’s presentation. you now And that for disconnect. and your participation concludes Thank

David Calusdian	IR, Sharon Merrill Associates, Inc.
Gregory Woods	President and Chief Executive Officer
David Smith	VP, Treasurer and Chief Financial Officer
George Melas	MKH Management Company, LLC

AstroNova (ALOT) 5 Jun 182019 Q1 Earnings call transcript