ALOT - Earnings call transcript Q1 2023

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Operator

Good day, ladies and gentlemen, and welcome to AstroNova's First Quarter Fiscal 2023 Financial Results Conference Call. Today's conference is being recorded. I would now like to turn the conference over to David Calusdian, the company's Investor Relations firm, Sharon Merrill Associates. Please go ahead, Sir.

David Calusdian

Thank you, Carl. thanks us. and everyone, morning, for joining Good Hosting and President CEO; call are and AstroNova's President Greg Woods, and Financial this Officer. morning's Chief David Smith, Vice highlights. Greg company's discuss operating will the at David a will through take the high you level. financials Greg will happy management to and be questions. will some your make comments, then concluding take a should earnings of release that now you copy By was have received the issued today.

today's AstroNova that don't to statements fact could the Private Litigation of June meaning during Any X, the statements only go that statements not differ are as today, a note Reform Investors required of forward-looking forward-looking of as Please please Web and that copy, assumptions of have XXXX. could number www.astronovainc.com. of If are you statements Act site are considered These based involve statements on the call results uncertainties. made within speak materially XXXX. by page historical of Securities forward-looking except law. a risks actual the Accordingly,

AstroNova to update statements. forward-looking undertakes no obligation these

For the today's Securities be differences, measures. factors makes report to filings the forward-looking company Form factors Commission. risk Exchange XX-K that statements will AstroNova's on in the and further see the cause and please with may call, other financial the management and On information regarding referring annual non-GAAP

is who today's the believes the release. turn over core their reconciliation investors non-GAAP the to companies results I'll financial make company's to in and A in the measures understanding GAAP operating these help to earnings measures directly GAAP inclusion the measures Greg. of on of most helps can of that, call a basis. comparisons non-GAAP AstroNova changes With that and wish comparable other both meaningful available investors gain between a and AstroNova also

Greg Woods

segment chain Thanks, first up last operating and supply both were lower declined year. business. was segments orders good in X% to compared quarter. $XX.X million Product our of again, Identification segment resulting the modest first up during could of Product income Those this X.X% in several faced everyone. compared X.X% of to revenue income product revenue. the David, the both be affected million, to supply year's million, to revenue, impacts last not able income where, the $XXX,XXX. and in quarter, $X.X was revenue quarter, ongoing and we fulfilled, morning, product was increases revenue $XX our same million constraints quarter operating X% and $X.X period cost post chain to or XX.X% we Despite to and or in increases Revenue operating In Identification

On as it and significantly It's highly of for solution. distributed larger sub-X,XXX-hour printers solution market to printer those on-demand businesses our label their enterprises a easy affordable new smaller use. ample expands storage, well addressable a large a need product line, also image This for multiple product as for looking making class further new touch specifically we printer for with this the color front, we're of to extend feature release, a about breadth onsite unique or market. segment large equipped digital color entry-level the morning's screen, a the first our innovation label printing the designed launching are category, press industry-leading seven-inch our is mentioned this We've printer as throughout internal included facilities. deploy that QuickLabel this to extremely locations to at customers,

period. to substantially, $X.X segment, XX.X% X.X% from Test income XXXX. increased fiscal first up in of quarter $X.X revenue, to in $XXX,XXX million, increased the same the climbing out Segment to also from or million Measurement & or revenue Turning operating XX% period year-ago

XXX difficulty] the commercial segment. dual-aisle in MAX ongoing domestic with production be far aircraft of aviation We're of single-aisle has long-haul gradual in recovery the to the Most continue occurred growth starting aircraft of the to results so signs see market. encouraging Our rate. [technical the the the bolstered by ongoing also rebound recovery

increased the up from ramping production demand. Especially demand are in data and businesses, defense during that lines, the Asia, systems later aerospace are increase high-end to some Measurement wins seeing commercial is & in the EV-XXXX hopeful In last continued quarter. we addition installations that product still China. to which In will region however, also our are stronger this year. One the year's this rates and benefiting business U.S. too several traffic deployed of particular, start year. the segment's Test is parts In aircrafts, acquisition repair We're growth overall benefits that program we're this in being area at sector. particular, air lagging, and,

chain are inroads power In and solar, power making business, wins in cost our and we our of nuclear closing, the environmental the addition various design boosting alternative both headways in making to current In defense and are despite offerings well acquisition including disruptions. applications have the monitoring issues data industry, scored supply from buffer with to challenges, macro components to materials, where segment, in we battery, addressing as troubleshooting. segments ranging to as we sourcing inventories

these are areas the will better that in we us and the other prices seen where have in increasing higher have costs opportunity to we so. We position countermeasures do Additionally, input future. believe underwent

our year. those take the seeing will begin reflected fully increases second-half expect the be in in we to of for time results, Although to it this

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

David Smith

first later items going emphasize the key statement quarter plan from Thanks, I'm do Greg, everyone. of morning good to couple balance XX-Q file sheet. today. We just a income and metrics and to our

chain the year. supply Product Test disruptions in period the the due revenue, quarter TNM to first in affecting same earlier. decline was to million Measurement profit cost from revenue, compared the related was with particularly gross XX.X% business quarter, X.X% XX.X% XXXX. fiscal aerospace of year fiscal in X.X% last $XX.X profit down accounted the margin & input a unit. of of segment Gross XX.X% XX.X% quarter, the revenue down XX.X% XXXX from of For The of was first to primarily segment increased the Identification for

and were administrative $X.X from aerospace as in to the is $X.X to has to from persist in and in up challenging last Overall QX million environment we for from Supplies the million. million, X.X% a increases current revenue, consumables second the payments $XX.X was have $X.X revenue Selling a was and primarily last in year-over-year. the benefits, were X.X% certain revenue $X.X XX% While down and aircraft and Operating In aerospace expenses This last the period increased has conversely in million, quarter XX% R&D to up expenses, the General printer parts $X.X million amortization the resilience, Overall quarter XX.X% with from year's chain year was Service in of prior the outside industry commission contract volume service year. by due revenues were restrictions data X.X% due to modest impacted largely the revenue total international and employee amortization by but expected due And near decreases in expenses decrease supply is lower shortages. compared and revenue earlier. as and travel $XX.X about. changed increased revenue also up expenses the partly -- our also aerospace revenue last in million, million. wages other to providers. showing XX% million, $X.X X.X% year to term. offset certain trended first the totaled product driven quarter, XX% almost typical revenue, products sales year's were expense. down increased $X.X a supplier to talked grew pandemic -- primarily due recovered, higher modest due the Supply were of but for business. up PI acquisition intangible Greg down million. certain also segment. to for revenues Domestic specialized services expenses waned. activity aerospace of XX% by marketing third-party expenses quarter accounted down cost

in it's as percentage of and X.X% indicative and XX.X% as year. be to of might While in in seem supplies like last compared the was R&D revenue comparisons, spending expenses, repairs full-year in this the the notable a year quarter quarter X.X% with due or approach shouldn't or a modest trend. primarily year-over-year philosophy first a decreases of change decline interpreted

Turning million. $XX.X to totaled the balance XXth April sheet, cash equivalents cash as of and

to requirements term. be the And segments. cost factors that's quarter, the $XX.X million had During we is to first operating commitments. on credit available and chain million environment that the obviously think affected to our facility persist borrowed our under going chain capital supply working Supply support in end. including capital revolving we $X support And borrowing and at to sufficient quarter both challenging near expected for domestic expenditure

million, has it of down $XX.X $X.XX part large on the completed inventories quarter X.X% NetSuite of as the part are mentioned, the Greg As expenditures And our up response higher. implementation Xst. from of million driven or we end, as November ERP year-end. Capital totaled

continue lifting significantly last matter. prior And be While than heavy CapEx lower for the is system, years over. expect two devote operating spending year we the some ERP the of that to optimize to year to our we this or

will IDEAS call Greg, one-on-one be meetings will Before Virtual to we the that East you and I Conference. the two presenting Coast let weeks back at know hosting handing in

meet we you the opportunity participating, If to are look there. to forward with you

Greg to comments. the turn I'll now, for So, back closing call

Greg Woods

David. Thanks,

we market segment are underlying measures recovery, & the in the Measurement and taking are Product in While The pipeline environment commercial headwinds. by segment. of continues the as as encouraged macro its the we challenging, well to we new several business product fundamentals aviation Identification near-term remains those our are strong remain seeing strong, the economic Test as diminish our momentum

So, I take questions. be with your Operator? happy to David will that, and

Operator

We first with Instructions] Capital. [Operator Spiro from you. question Thank our Tom take Spiro

is ahead. line go Please Your open.

Tom Spiro

morning. Good

Greg Woods

Morning, Tom.

Tom Spiro

Measurement in kind that? while. On strongest of company, for strong the sort quarter, the one-time inflating it next the transactions revenues portend? you several What quite see that of did as there & a that does side the Were in Do Test were the level of quarters? sustainable a

Greg Woods

& Tom, mentioned, back data but a coming contributed And that but nice in to acquisition increases kind up. that, not by Like back it's mainly piece it's fashion. in Really, recoveries No. we the primarily pretty were, the boosting of it's via board driven across Test where to aerospace Measurement. we're

continue So far, it doing yes. to like looks that, going it's

Tom Spiro

were is strong, Same XX%. also that sustainable? that that, section is perhaps, some, quite margins or segment two I broadly the by profitable question, transaction roughly think that unusually -- inflated speaking, And or

Greg Woods

really generally pretty mix. It's function it's increases. think as I of a better absorption good a volume the

Tom Spiro

you great. issues. if these for -- much. you levels Do Thanks because the you mentioned, high, know -- are or as inventories inventory sales here, of of growing see The levels sufficient? is That's do from running supply the inventory chain how they're that

Greg Woods

Yes, there. there's [indiscernible] still some hands-on, Tom,

of bit still have a just quite our buy to things of tend because lot we hands that things, we it can't we get can we get when So, a on.

what know, Thank that So, broadly, be I it's quarters four, kind it going don't get we get, can at worth trend next, so. for if of up, maybe lock we're looking of on even months inventory five to to we out where couple can the going you.

a comment, had You David?

David Smith

think to the get dramatically in Yes, while heavy it's period trends. and I goods think with consistent little think -- I think of yet. we're I better a cost in a But probably going I for near-term. don't it'll don't trend revenue inventory it's

Tom Spiro

several sort for there? lost, quarter, because the of into that supply in were Or this of quarter deferrals Is from offset by Product wash should each I Identification is in to the quarter. to couldn't succeeding going to unless right? in to the -- chain as helpful, not supply this question was in of seem chain might that And mentioned prior amount we the have that lost me deferred, brought in say I quarters, what's what that ship is are -- issues am issues side, succeeding the what it deferrals through, quarter. Okay, on about increasing impact thinking some been this on think what the of would -- increasing, quarters chain sales try last supply And those that's because you've of thanks. it quarters

Greg Woods

feeds have that's Yes, is lot -- I into it's of kind a is abating mean media. board. correct. there's we one which big a our now the And supplier of major basically thing across paper

piece than and remember, supplies might a the and Identification, toners, bigger You actually media Product business in inks, such. is of

a that. a strike produce different over. is have they a been It That at takes Plus, sourcing for So, -- we've strike we from were to while. companies. while to

someone not an [Ph] process. it and we So, just like ink take tank ship in to [socio] production

of end probably that into So, at we're and hopeful away QX. start then the we'll this that chipping quarter, starting

Tom Spiro

great. that's Well,

back get I'll in see. line now, Let's thank you.

Greg Woods

Okay.

Operator

Thank from Instructions] question take We you. with our Milos Management. next [Operator George MKH

George Milos

morning, good Hi, Yes. guys.

Greg Woods

George. Hi,

George Milos

margins about Measurement, on affected T&M follow-up on in think primarily at -- little said David, segment. you a A the the Tom's I Test gross was that question margin bit & the Hi.

the So, slightly is margin that higher, right is that would case correct? even now be the

David Smith

Well, margin, talking to But But -- some profitable. extent and it some take the supply hadn't chain those improve, been which about, have we they would advantage margin able it's primarily had yes. unwind, a a as difficulties hope to we've If be gross been the on we function lesser as of mix. will of -- more to chain that hopefully of that. conditions the stuff have supply

George Milos

the on margin of Okay. were the gross T&M of the major impact But issues chain supply in the segment? -- the

David Smith

out break -- all we segment. did -- those Well, we the by of impacted out impacts they break didn't segments. -- both not didn't We those

George Milos

Right.

David Smith

a is in challenge event. any Which

George Milos

T&M And had a know, don't have like do data this curious to the the nice usually, seems way on acquisition there you because rebound? but time it seemed is to Okay. that, break on printer revenue you that acquisition? would the I'm data down side, just if with do the a I

Greg Woods

don't segment, either product actually. in breakout lines we Yes, specific

George Milos

Okay.

Greg Woods

it yes, the in that yes, improving. of are area. we remains aerospace it's that majority see the seeing But, -- to nice segment And

George Milos

Yes.

aircraft is So, driven really production. by aerospace the

On the bit it's little project data acquisition maybe a oriented, more right? side,

Greg Woods

data It's which a know. of to acquisition bit production numbers in Yes, in lot it projects, tying pretty and, a those it's predictable that's correct. of yes. well more aircraft terms usage, Whereas are different actually, yes, that aircraft

George Milos

companies touches deal is the space? secure great. defensive And question that the on you Do there of that a of have, SMB the okay, the both do may one growth sort move to great that it's you Yes, a you like that but more seems segment, sort entry-level just interesting have as how potential category new P&I then sort large or product segment, QL-EXXX, multiple it see also think of that the in facilities. of

Greg Woods

lot But them get volume -- seen that wait out both spaces. And emphasis research ago, too Yes, same. find sales customers would other say, have liked at space. unit And there's that me to really type we puts But but love well let's of products, And one a it market our clamoring afford to from our, QL-XXX it's like focus of variety something kind you R&D been for higher they a answer have had Like this differentiator, of on force this. own we to a number much the was we probably there we our worth it. but look question, a yet reasons. don't. for couple the of really the that's think of or with looked our years sometimes product it your yes, it's really in that would can't we've

production want a to one printer building. facilities with a And is their color these a XX zebra part end but black printer that's have line, that So the production they they other where replace one we lines the address. white production in can and of at market of the may

would So, necessarily a need at those each printer, a they of want and one $XX,XXX-printer spots. each don't

that's of it yes. kind our we see other So, market the big demand, with own that internal for

George Milos

Okay, great, great. sounds great. That

much. very you thank Okay,

Greg Woods

George. Sure,

Operator

Thank you.

with We Spiro Spiro have question follow-up Tom Capital. from

Please line go open. ahead. Your is

Tom Spiro

existing product potential see PI. on of new much a You for products? have Do cannibalization your you

Greg Woods

for what printers It's make one level of should high volume the likely. kind our really businesses Not of really higher a of mentioned. end entry these is -- printers. that happen some XXX, product of more we expect And up

same that that that could it. I thing step of printer, into didn't it they this higher production in resolution of grows on one is take And faster and carry it that runs little could the just up designed the the printer mention we've you business QL-XXXand their such media rate. to As put media role

really designed family product. it a So, be of part to

Tom Spiro

anticipate you PI in products new many how out And this year? do rolling

Greg Woods

depends mentioned one two, year. cycles and production to but not. are that, on This these know, fact in there least we is is looking at two I and of year, Maybe do another of beyond two. at beginning this in the you it what Like kind the

Tom Spiro

Okay, thanks so much. And good luck.

Greg Woods

good day. a Have Tom. Thanks,

Operator

additional in would to turn the any like have additional appears queue time. management or to It back no I at we closing the comments. questions this for the call

Greg Woods

Okay. to of you I seeing on would Have IDEAS joining just look conference. and us morning. keeping forward like look the to at we everyone And forward thank for progress to here updated this a our good day. some you

Operator

Thank your this call. for Thank you and you that participation. concludes

disconnect. You may now

Greg Woods

you. Thank

AstroNova (ALOT) 8 Jun 222023 Q1 Earnings call transcript