ALOT - Earnings call transcript Q2 2023

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Operator

Good day, ladies and gentlemen, and welcome to AstroNova Second Quarter Fiscal Year 2023 Financial Results Conference Call. Today's conference is being recorded. I would now like to turn the conference over to Scott Solomon of the Company Investor Relations firm Sharon Merrill Associates. Please go ahead, sir.

Scott Solomon

Thank you, Kyle. 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.

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

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

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

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

Greg Woods

secular We solid in packaging, products with increasing print orders second Thank quarter. bookings up demand trends, you, travel to growth sequentially. the digital achieved continue the Good our and everyone. air services for of year-over-year and and including drive Strong morning Scott. for growth

reached $XX.X business first be setback For the by grew our costs half and AstroNova's of shy expected in of increased of first to less nicely supply high Revenue chain in so just previous million, areas certain XXXX. continue the also fiscal affected disruptions, higher total bookings XXXX the expenses. quarter, than fiscal freight half component

moderate We have of to those taken several drivers, of Reflecting in quarter. second generated increases the growth our challenges. including implementation X% top price actions, selective we line demand the impact

increases and for primarily continued especially with increased of from & were bookings Measurement commercial the in the Test first services in having our considerably increase fiscal X% and travel. segment, repair higher our XX% demand driven with orders, by military An XXX XXXX. parts MAX. rebound Boeing Our air year-over-year quarter the the associated related aircraft, These of ramp-up production

other was segment. million, quarterly million and the service for the this $X.X record year-over-year in revenue importance up about a demonstrating recurring QX revenue or XX% of Our to $X.X company,

year-over-year, Turning QX from essentially X% to our this but QX year. flat up was Identification Product revenue segment, of almost

late in and orders quarter, capacity, of exceed supplies. for While our shipping manufacturing we our the lead some and especially products extended of the in accelerated volume see are the to times, pace PI pleased did resulting

models sale. but affected issue made of certain quarters the also of as and quality return the a half to printers good discussed printers. impacts Over improved supplier addressing and we we we second normal the Having you of these obviously label our move past production up shipments our We've delayed customer PI have our ago, we on the with weeks, site rates year. times to several the through offline expect progress couple at that catch lead

our for return quickly working teams aggressively the operating retrofitting are them the effected to of condition printers technical customers. to process Our full

Although has expense in resulted unplanned taking the steps segment. these in some

For of AstroNova foundation is system. is us, the first operating quality customer paramount,

experience a to every has customer our with sure products. priority make Our is great

is solution the TX-OPX, The segment, directly print the such areas e-commerce environmentally materials TX-OPX packaging our houses this PI system unique the market. digital direct choice solutions automated brands, A packaging of digital while Machine. we PI including Astro promotional the market their and of reasons of one to Within packaged market of customers the of products printing growth for new acquisition The to and It's adjacency business. into create leading for also marketing becoming about is branded mailers, the is applications our The equipment label, another important waste. strength manufacturers. a shaping of channel growth for friendly we're the recent for megatrend showcase the of using of are color excited eliminating printing plays manufacturer as packaging global for us. particularly e-commerce and one the about material thrilled

From has boxes Machine proceeded a As a use margins company. strategy. the than transaction checking as of XXXX planned. also and effective basis, on at all Culturally, full-year a on weeks M&A our and month fit and less few and an of the trailing acquisition profile. of standpoint a times valuation of was revenue smoothly expense our a operating efficient the attractive I the great with multiple noted our a our have favorable integration And ago, one XX purchase price it's weeks capital, operating Astro early call

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

David Smith

the release to more be second tables, XXXX. the growth operating -- million, XX.X it. the as through benefits year's year, the benefits to that in first you lens through the comments reconciliations up of our performance XXXX XXXX. GAAP CARES Act was non-GAAP related in of the earnings in discussing had half air contributed with to Thanks, and XX% I'll revenue included our of the well the and non-GAAP midpoint are to Greg, commercial everybody. But the financial I'll morning tables provides comparisons driven as that to reflecting last of good GAAP first some our Please well pandemic attributable reconciliation MAX in continues At year we half by about detailed We to the Act results. fiscal revenue this the appropriate X.X% the T&M results includes our our believe on are results our return $XX.X quarter. press perspective excluding T&M of fiscal results the note the the half recede. and travel a primarily CARES that is ramp give on fiscal the the million, XXX up primarily first and release to segment. GAAP in

parts aerospace part This the lines business of six discussed. to year, margins Greg Product were particularly year of relatively and than this $XX.X higher the came product through first average. issues also our revenue due As in Greg suggested, million robust. X% at prior fiscal ID down the from about repair has months overhaul the the

year-to-year $XXX,XXX year. comparing million was same due from of by X.X% million, XX% increase year Service revenue costs revenue quarter or unchanged first -- while was and they profit XX% to expenses XX.X% year. type, period. of [climbed] in $X.X this to to $XX.X about under half compared operating were supplies through first Most months $XXX,XXX business good recovers. essentially XX.X% million, the Combined over at $X other through the of or million as six revenue up on Looking hardware up came to months the of through from the revenue, (ph) a when control, $XX.X to almost remain up prior segment at about $XX.X million, first the year. Operating six last revenue the year of and QX is basis employee-related the six in the of last months

cost As catch well as after two controls. up some of COVID broad years induced

we see grew that, more operating leverage and revenue than as expectation Our slowly expenses and will recovers plan is revenue. operating

points the compared period than So points same or this the expenses operating revenue year -- XXX of income were the of basis far last at percentage year during was million in last that's first of revenue, of revenue half about the year. $X.X $X.X X.X% basis Operating been as a fiscal year million case, to lower XX% XX.X%. XXX

As remained X% with year. $XX.X last up the Greg fiscal from ’XX bookings half at strong highlighted, through of product demand million, first about

for midpoint revenue international at up of XX%. the the US fiscal-year remainder revenue region, our with making XX% business, at total accounted Looking by of

balance end of has the million to grown year. of and Turning product QX, At $XXX,XXX presented sheet, of almost up about inventory $X.X substantially grown about million end since that. delayed of the $X since of since associated inventory the with the the shipments prevented $X.X lack last of of has quarter, of last end second million segment quarter, T&M about in half the the parts

able we've to make part response part to to customers also supply begun those quarters recently but to Additionally, couple somewhat increased PI T&M started these a In consistent delivery to we significant our chain build a to a of and been our and it of some with and their could moved timely the will accomplish buffer take shortages see We by to intentionally customer needs the to months be earlier as is has to demand, buffer Maintaining ease also this demand and to constraints the increased certainly there's the business in the stocks segment experienced unwind numerous stocks fully. higher consumables absolutely disruptions to to strategy. provide inventory we've support of value consumables. access this critical respond year of proposition inventories, pulses. segment, supply build inventory multiple

we'll release and in Machine the to contribution to the the quarter quarterly in but and effect this acquisition and after income reiterate, conference expect accretive the even talk after earnings sheet impact we detail, do year, As more completed we press of about of half this their in the But transaction we much Astro statement second in call. recent balance our next discussed to expenses. be call,

to So I'll call back over Greg now. the turn

Greg Woods

David. Thanks,

with close me from today's Let call. takeaways three key

trends demand underlying tailwinds for with creating secular favorable growth. robust is First,

are David in our questions. happy with offerings, printer handling, expands we expertise Machine, gives to continue with our cross-selling product With we have take be opportunities added automation will our as other your that, us strategy we to confident new development. component in third, adds and and And domestic record of label M&A on of important to Second, track increase I build and generated color base, meaningful our value long-term Astro which and PI strategic Operator? our manufacturing business. areas material

Operator

Thank you. questions Well, queue. we [Operator have it in looks the Instructions] no like

Woods any closing So to turn the I back will for call Mr. comments.

Greg Woods

here thanks or of being then. September right this everyone the summer up and you forward and at All end us QX catching packaging shows, remaining with most morning October. one notably to the Well, with the end of of enjoy Pack the fall and for labeling of [indiscernible] look weeks the at Expo,

long So for now.

Operator

your for you disconnect. you you. With may Thank participation, that, concludes Thank this today's call. now

AstroNova (ALOT) 7 Sep 222023 Q2 Earnings call transcript