ALOT - Earnings call transcript Q2 2019

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Operator

Good day, and welcome to the AstroNova's Second Quarter Fiscal 2020 Results Conference Call. Today's conference call is being recorded.

At this time, I would like to turn the call over to Mr. Scott Solomon from the company's Investor Relations firm, Sharon Merrill Associates. Sir, you may go ahead.

Scott Solomon

Rochelle. you, Thank and everyone for us. joining Good thank morning you Greg President company's and Hosting Financial this and AstroNova's are call the morning's CEO; Woods, David Officer. Chief Smith,

David the Greg take the management to some operating the happy will and results, be your discuss concluding comments, you Greg financials, take through will will make company's will questions.

you release today. issued that should received copy a have now, was By of earnings the

please go AstroNova you to investors a do If the not section website, copy, www.astronovainc.com. have of the

made statements statements are forward-looking Securities that Please based today's not assumptions number statements XXXX. during Private on note that are of of uncertainties. are that today of call the forward-looking Act historical considered statements could Litigation a and These involve facts Reform within risks

materially law. undertakes company forward-looking could required as as only speak results these Any statements obligation today, actual August XXXX. by of statements. to update Accordingly, differ XX, forward-looking no The except

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

now the call I'll over Greg. turn to

Greg Woods

Good Scott. on call Thank you morning for the joining us everyone. today. you, Thank

on a confluence These headwinds, our however, outlined in serve this Measurement overall margins markets. the in our our quarter. short-term our strategy and our in strong perspective morning's growth fundamentals earnings of Identification expectations headwinds do affected impacting As alter both and adversely of release, over Product segments, position & Test for the our revenue not

and we a the had of the quarter. more than effect MAX margin Measurement, XXX in grounding had In & ongoing mix Test anticipated on revenue pronounced the

aftermarket installs, lower on revenue is as on well. addition business grounding repercussions the to In new having our

the planes optional and by back be brought the those service can maintenance aircraft upgrades so gaps printer to on created fill grounding. being into model delayed, are older Retrofit

gear. multi-year order & to of the that release in dynamic other to an printers awarded for during was this We quarter networking a at upgrade push-up were The Measurement contract military fill deck the now half year. related play we related expect second flight in Test order and

Results few primarily in mixed. we the increased issues but Revenue Asia segment a associate due that to only quarter, macroeconomic Product our modestly customer-specific partly region. in that in in Identification climate were with the

especially QL-XXX From products QuickLabel and a we throughout the global second our perspective, quarter. with growth were TrojanLabel continued TX-C of the pleased

have PI leadership products we addition of In the products, markets. built our ramp-up pipeline ensure to our investments position a in to of our extend and new strong those development up maintain

launched printer Right the end labels, convenient product, more and a quarter, cost-effective at environment. production QL-XXXX. ink up digital Equipped warranty. technology, enables of less second times to with making virtually it QL-XXXX the is next-generation print for printer we with three two-year users the card using to tabletop first label the any another XX% This best-in-industry while significant the new fast,

now We also ninth Malaysia. with to expand ITCs brands Center of of across QuickLabel our We quarter seven TrojanLabel our four the during in countries Technology Kuala have in our presence the continents. Innovation global and continue opening Lumpur,

EXPO we quarter, Fachpack of more and in worldwide. at Brussels, will Europe the most in we in exhibited second the During season, in significant And our than September, XX the tradeshows participate PACK Germany. Labelexpo Las products events Vegas, in

large-scale of level we've Historically, these generated customer leads response events. from high a favorable and very

some season looking our shows' to are to these forward additions Identification lineup shows. launching will at these because We be particularly Product we significant

in weeks. those new on announcements offerings seeing be the You'll coming

to we Turning progress several on good quarter. improvements, fronts made operational the during

a we substantial the our started upgrade replacing hardware Our have where global upgrade hardware now has into program of IT portion moved phase infrastructure.

various company's initiatives and record of drive AOS quarter excellence business as operational during a the our into improvement projects completed number down units. the We deeper

of in organizational On place portion team still ahead. key high-quality, like of puts the growth to side, a deliver several we business. overall, our strengthen right sustainable years for couple this fill further industry we'd We recently the got that from the aerospace the spots executives to to hired but

let long-term I the Before it read challenge I that me strong in our business. and fundamentals earnings encountered the not we this turn affect or do morning's something in is over our to David, release, that of underlying said temporary QX positive view

have and managing to deliver business in and for place processes confident to to the the are we long-term value our strategy We are we the that continue right shareholders.

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

David Smith

morning everyone. and Greg Thanks good

a quarter, the for revenue lower by decreased year-over-year lower revenue, do the points and less reflecting basis managing was operating mix. we to of job to continued revenue good favorable While XX expenses, which XX.X%

margin points of operating Gross revenue. XXX year. while both operating came percentage at in as margin the X.X% basis profit in with profit to down compared Year-to-date, profit down were dollars and was XX.X%, slightly a prior gross X.X% up

down versus quarter $X.XX Through of year earlier. second current last $X.XX, diluted a per per the earnings $X.XX half were from for quarter. share in first $X.XX share year, Earnings year the the were fiscal

Domestic outlined a revenue was related our sales. operating and Test million to of XX.X% of or million QX $XX.X million or or all from from Combined, total of $X.X XX.X% total Greg in year $XX.X revenue headwinds was down & profits Measurement Asia was ago, million XX.X% segment XX.X% and segment. International revenue. the accounted for $X

period revenue XX.X% QX for profit segment Non-hardware or versus accounted point year. or quarter, in percentage revenue $X.X total year. was up last of the about Year-to-date, a operating the second million XX% X.X% in XX.X% same last from

only $XX,XXX provision certain be that tax would discrete tax due was and full year the X% income XX%. in rate lower items. for We're to only of both rate expecting now around Income effective tax QX

approximately million of me, shape and outlined exited at with -- consistent $X.X ratio track still balance debt, levels. our Looking $X.X million; last along net quarter. with in capital debt-to-capital We cash we're sheet, excuse XX%. X.X% the in expect implementation good the the the in in new million quarter a having we project historical ERP still year full around The $X range continues expenditures of

only than infrastructure that higher spending year. of referenced half first half $XXX,XXX this So, CapEx Greg technology was the second which the half, be in information on the of our will because second

terms Amortization $X.XXX stock-based In was $XXX,XXX depreciation non-cash was quarter, charges million. was and of for $XXX,XXX. compensation the

I Before to turn Thursday, and September Xth, the call back the one-on-one presenting at Minneapolis. Conference Greg, be in Institutional we'll meetings Investor next hosting Doherty

look seeing If there. forward you're to attending, we you

for Now, call Greg closing back I'll hand comments. the to

Greg Woods

David. Thanks

for a maintain expectation We long-term have positive growth modest revenue business our our XXXX. for in fiscal and outlook

are the encountered trends to the likely in in are the our margin near-term, revenue strategy and secular confident our our business. we we While impact and supporting positive QX performance headwinds in

This growth, development, confidence products, investments is profitability. to expansion underscored high-quality, sustainable in ongoing talent by drive and geographic our new and

Now, happy take questions. David to be would and your Operator? I

Operator

Thank Instructions] you. [Operator

And our first we'll question, Dick hear from with Dougherty. Ryan

Dick Ryan

a pushed what Thank I kind could comment, about? that excuse you. half, about were you the me, military Greg, correctly, has if order your missed but of I'm that second not sure into you talking repeat think I I heard

Greg Woods

now reasons, this in a we to and second decent wasn't about think in side. through Yes, we'd it will quarter on for contract the a various so the fully second to a in has That kick release the release quarter. relatively operational customer that come It's have size the that to do we released expected I some things year for half. year being second process in multi-year that have awarded It's expect with ago. and schedule were released of

Dick Ryan

Okay.

number of the has handed obviously airline of integration off, through are in where the far where been On as the Honeywell but you that you working are as assets, the process? manufacturing contracts,

Greg Woods

of That of there's most with those organization a completed good piece not of most it, customers. We're working We're fronts. that on lot the making Airbus still We're completely the pretty part transferred. Boeing of progress almost with on it.

to the happen second half. that expect We in

And expectation then organization. pretty The late meantime, that right Honeywell the through earlier appraisal I ship I Honeywell on product. QX can wrap on Airbus the our mentioned ships is early it calls, to probably think We in looks as the to we manufacture it to good up. now;

Dick Ryan

quarter, Okay. more deliveries that? a talked performance you Or you that provide in And and look on the was Can upgrade new of about upgrades, little the you in broad-based? concentrated it was & customers? of pushes, Test color couple at a when Measurement

Greg Woods

broad-based. well pretty it's Yes,

We put on get and to are once relationships our people but are key that'll good, occurred, of number go, ready up all a situation hold. things keyed the have XXX MAX

to then And offline people comments this, I mentioned variety planes get in to trying in are not trying right there now. the my them it's actually part big airline a taking many flying, can interested as are that companies of -- people, upgrades do the to they a

in and there. know what how Obviously, they're of that's all kind any of the do good than they talking flying anyone read our more resolved they either, our big customers, to else is and shake but have part So, we handle waiting things it start and plane and don't we on get again. out that get a you QX, to but see it it that information some don't hopes

Dick Ryan

Okay.

issues ID talk specific to you Product in customer Asia. the On side,

point? some made Europe organizational previously looking You've changes, how's this at

Greg Woods

undergoing. two well. but positions trying German we're that Europe In got hire that's to very area, actually is the We've transformation, running it. key that's as far still positions as for open now, right

and over probably in we still upgrades have people on reorganization bring we're to on again, working those areas but completed QX expect in some Some QX. and there, board it

Dick Ryan

you. Thank great. Okay,

Greg Woods

Sure.

Operator

turn to any call at no further over the for are Wood's or to I like back would remarks. additional this there And closing Mr. questions time.

Greg Woods

day. look everyone our a Great. this good us here for We updated Thank keeping forward thank you. morning. Well, progress. joining on Have you you, to

Operator

that participation. And thank your for today's We will conclude call. you

AstroNova (ALOT) 28 Aug 192019 Q2 Earnings call transcript