ALOT - Earnings call transcript Q1 2020

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Operator

Ladies and gentlemen, good day and welcome to the AstroNova's fiscal 2020 first quarter results conference call. Today's conference is being recorded.

At this time, I would like to turn the call over to Mr. David Calusdian from the company's Investor Relations firm, Sharon Merrill Associates. Sir, please go ahead.

David Calusdian

you. Thank and joining everyone you thank morning us. for Good Greg President company's and this Financial morning's and AstroNova's are call the Hosting CEO Woods, David Officer. Chief Smith, Greg operating the will results. discuss company's you the take will David financials. through to some concluding then be Greg will take comments questions. make your management and will happy

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

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

are statements statements considered today made during call by of statements risks Private historical results Accordingly, not Litigation of XXXX. fact on and statements that Act note Please required actual involve law. number could Securities forward-looking that today's that the are within of are materially could differ a as uncertainties. assumptions Reform These based forward-looking except

of statements June undertakes forward-looking speak The company update as obligation statements. forward-looking XXXX. only no X, to these today, Any

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

over I Greg. now call to the turn will

Greg Woods

Thank call you fiscal The morning David. is you start. year today. strong to off a new us on and for thank joining Good the everyone

reflects performance Our first AstroNova the plan continuous our on improvement by our strategic consistent quarter focused ongoing execution and driven to commitment Operating System.

that revenue, On delivered of digit the and to income operating bookings, while a EPS, we a in basis, percentage growth year-over-year growth bottomline. driving greater double

the our from line million data prior top with XXX Revenue standard and acquisition lines. for contributions first Operating quarter X% solid product test measurement product In measurement and both the led growth segments. operating System basis an of in both or and our ability increased income by and increased revenue Our segment, of up leverage over and test and year's increase of was identification processes XX% to to realize bottom the highlighted growth aerospace AstroNova the points. and and $X.X tools quarter margin efficiencies operating the XX%

substantially Looking at AstroNova the operational year-end. highlights, transition of the integration should is customer up to of remaining be wrapped by Honeywell complete and business the contracts

to several a printer business commercial leasing deals, our flight Asian we global as airlines in Asia deck with strengthen companies. four as contracts in key announced this market. further month, international which expand We leader flight major These to continued and in from well. our range eight years deck avionics aerospace position growth multiyear Last

of more next passenger that in the of Asia region customer base area. an According accounting we traffic to in located decades throughout Asia growth, this Singapore station to biggest for Transportation Association, region. additional two the support be the International established than our in To authorized will over Southeast repair expanding recently growth total the Asia-Pacific a of Air the driver industrial half new the support

Before segment, turning XXX Boeing me aircraft. comment product to grounding first the identification let of on the

so margins. While largely unaffected impact this second slight been may the in that our on a expect situation by prolonged event, we far quarter result we have

on or is not aircraft regular and impact beyond in to the quarter any Boeing second are contact closely. Whether We watching when close returned continues are service. dependent with the developments is the

QL-XXX segment's product new, this printer. Key our Turning behind segment. tabletop included demand to XX% growth for identification now drivers five-color the label

alike of run high-quality, allows to QL-XXX Just label range specialty printers produce labels materials. been broader much short strong. expand launched commercial end The to has of their at and demand ability the on January, end-users and

for growing reflecting printing enjoyed order TrojanLabel TXC product and well the Our quarter a finishing strong demand as compact as label also Trojan TX the line professional system.

In an expansion been penetration helped is TrojanLabel of important the of identification and strategy, at our by the segment. the distribution our identification quarter of world. of we midst worldwide than product around the a in more the are of tradeshows global network. exhibiting that the of QuickLabel growth XX momentum The our second has ongoing for product support part busy strategy brand positive business Increasing

reach regions. of broadening eight technology In Mexico We establishing centers our a addition, the France, in total and key have by global now ITCs Denmark, innovation U.S., China. we are Germany, in

in the Before David, the acknowledge over certainly participating functional pulling growth. the profitable to cross have wouldn't From world. in to possible it events to team I all excellent the our I work talked members leveraged our the to our Earlier, factor in same Kaizen are biggest of our System drive people success. Operating XXX without AstroNova turning be want team the of members work the around we That teams, about direction. way dedicated

Now over to it turn let David. me

David Smith

by everybody. my good first organic $XXX,XXX. leverage. From our from grew expenses The the healthy are results both Thanks Greg operating grew segments drive quarter across perspective, our million year-over-year and to growth takeaways key while $X.X morning topline and continuing expense ability operating by the

prudently We our deliver higher expenses to manage and continue margins. hard work operating to operating

operating a operating As expenses to profit up XXX basis points. margin down XX.X% of basis was points XXX Gross margin and XX points basis were improved revenues, percentage to X.X%.

$XX.X first said, total revenue more International was earnings share, representing then quarter $X.XX are than per XX% $XX.X year. XX% quarter revenue from of QX increased first up in million. Greg as Domestic million, last revenue. to the Obviously,

segments. provides breakout of a and profit release by Earnings operating revenue

a is the to all us. for not fourth $X.X and I revenue from the first of the basis, from go year will initiatives. quarter reflecting On period note growth decline am pattern or million sequential new that in or typical the combined of that the earlier million detail. through revenue a products to $X.X going revenue in I profit XX.X% So operating XX.X% segment to increased in

base recurring element business is solid of model of our key a profitable A revenue.

also our for support to certainly ago we the $XXX,XXX for rate happy segment, was XX%. So XX% QX result tax provision are growth effective inks, non-hardware to expect This the XX.X% quarter service in Income the we tax rate demand and but revenue approximately to for to first other compared an ID quarter year product aerospace in be total tax reflects repair of accounted our revenue that period. XX% and in of speaks second business. robust the of labels growing the supplies and

Looking sheet. the balance at

to cash continue XX%. million our in debt debt, a $X.X net the debt and about in with million we reduce capital $XX.X of exited quarter and approximately We to ratio

delay than update of implementation To due live bit of said project. go this year, ERP the a the the well, The year, now on you project end expect to is later We going earlier. start at we new that likely With range be to of efforts cost team, now slight the is a this expected capital to the prudent. but $X.XX we million. is have time, decided the of in more the total entire additional

continue reached for our balance where the will accounting point a be have of it and don't degree, and the in expenses impacted project our We rules intensifies that's project year. allow training The into cost to included while and the some in training to capitalized work the be will outlook.

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

to Please schedule Before back Coast at a I next call the meeting. look Greg, presenting forward alot@investorrelations.com Thursday, to hosting in the Conference be turn to East seeing we Boston. email and please IDEAS that will We one-on-ones you. note

to call Greg. And over I am to going back turn the

Greg Woods

David. Thanks

labeling, believe our quarter print, we we data objectives. high-speed tailwinds Our to acquisition performance operate and packaging, in execution reflects focused strong aerospace strategic secular our to on our end-markets support provide consistent plan. digitally long-term commercial that to commitment growth first strong From

their Operating the continue For expand AstroNova full diligent to revenue move the great our forward. the modest let as for year in year, drive work of we start we positioning our to leverage off hard as profitable and application team markets the businesses. overall getting closing, our growth us System fiscal we thank entire to in expect continue In and increased again well operating growth to me across a

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

Operator

[Operator Instructions].

Ryan Dick from Dougherty. come with will question first Our

Dick Ryan

the and you Good but the regions organizational product are morning on last had on update America different North you some seeing you just made Greg, provide you were quarter that had some I Europe expansion, ID side an underperformed, what changes. and guys. Asia, good think, sales Say, seeing? Can talked

Greg Woods

Yes.

see but there. and make doesn't So in then and There quarter. slightly work I our there if I say, starting be adding continue and North did holds look more in Europe partners. And you done still at Asia, a what America, expectations outperformed some to improvements nice strong first and progress distribution overnight, we in on there the regions, it and is we other to some are the more would profile happen growth they said true now

year, If formerly the had the in sales where you force middle started American there. a direct primarily add we remember, of we market into back last North dealers to

but we just past a from dealers. some kicking nice see So our and won't actually of I mention weeks specifics those of in it's guys any to orders couple the several new nice had

to So that's see. great

Dick Ryan

year? think, the have Are you planning eight, any new IT openings this You you I said. center

Greg Woods

Yes.

now. have We eight

We right don't next an have I that But should the of say lease. where where we update to one in right you for are now. I kind in the where want Asia. now is. the We negotiating won't it It's in quarter. works say on exactly have

Dick Ryan

Okay.

measurement Asian customers Honeywell customers and or your side, test leasing they or new airlines companies, nice win the on additions? the existing was the were those On previous and

Greg Woods

mix. a was It

either us. new or they were to So Honeywell

So we had kind of both.

customers agreements. And Honeywell some well. some we able as onto were to customers convert had them to new we AstroNova So get our and

Dick Ryan

I color Airbus those a how potential kind know on even don't aerospace give revenue the But you from the flavor aerospace us within impact on the breaks And Boeing data out Okay. that and or Boeing. P&M the issue the acquisition out and you can break margins? of more and maybe little and between

Greg Woods

look specifics in of is guess game, XXX grounding. are at relatively are at, number could unit deliveries for give the on irrespective I if of low you I point at say this the their on can't I what that MAX we the that. aircraft Yes.

to to hard it's say going exactly happen. what's So

dates weekend, past August [Airbus] from variety a [ph] with the I Christmas. about reports of talking of till CEO the read was Over different

it we it former a short big the I see probable, So here. impact. more not will is been probably develops think the In how but term, has

to summer. mentioned, deliveries the up to but had we and the from they flying back the next, to thing it by expect we far move one so few this get of out like a the As end seems U.S. in quarter

Dick Ryan

on not airlines standard decision Okay. Airbus, Boeing, it’s that's on offering And to make. a of just kind clarify,

Greg Woods

Correct.

Dick Ryan

Great. you. Okay. Thank

Greg Woods

Sure Dick.

Operator

have Instructions]. queue. further [Operator we time, questioners At the in no this

Gregory for closing So to turn comments. I back will Woods it Mr.

Greg Woods

talk in everyone keeping you right. interest Thank will you. now. AstroNova. our on time for forward to and we All next to We look progress and updated your Bye, Thanks quarter. you

Operator

quarter Thank you. fiscal that AstroNova's conference results call. first and concludes gentlemen, XXXX Ladies

disconnect today. now and thank may You joining you us for

AstroNova (ALOT) 5 Jun 192020 Q1 Earnings call transcript