Earnings call transcript Q1 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and welcome to the AstroNova's First Fiscal Quarter 2024 Financial Results Conference Call. Today's conference call is being recorded.

I would now like to hand the conference over to Scott Solomon of the company's Investor Relations firm, Sharon Merrill Associates. Please go ahead, sir.

Scott Solomon

Thank you, Ellen. thanks us. and everyone, morning, for joining Good Hosting and Smith, Chief call are Vice AstroNova's President Greg Woods, Executive and Financial this Chief morning's President Officer. Officer; and David the discuss Greg operating will company's highlights. through will the David you financials a high at level. take and concluding to questions. Greg will your management comments, make be then will some happy take

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

page copy, of have you a please go the don't AstroNova the Investors website, www.astronovainc.com. If to

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

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

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

management to measures. non-GAAP be today's will financial On call, referring

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

call the turn to I'll Greg. that, with And over

Gregory Woods

morning, solid climate remains us. performance. first everyone, volatile, Good we thank and you, joining macroeconomic a you that Despite quarter delivered a Thank for Scott.

aviation our expense and commercial first, progress X rebound Our disciplined capitalizing Astro of the integrating Machine; results of third, on the management; second, market. continuing maintaining areas: the acquisition key highlighted in

Identification revenue members our growth exceptional the double-digit segments. the generated we Product work and in Measurement Through around Test globe, both of & our team

aggressive income. drive cost-disciplined and on in XXX measures in increase operating increase focus This to improvement implementing a helped Our margin. point maintaining translated operating a XX% basis

bottom share fiscal On or compared diluted same $XXX,XXX net $X.XX period in per with income per share the or $XXX,XXX to $X.XX of the diluted XXXX. line, grew

engineering, segments, Now at quarter Identification, nearly of The plan the of acquired with terms each in Product which look year in let's we higher of of West proceeding product Village. earlier August development revenue Warwick by between operations the is period. our was reported increase cross-pollination last Machine than of manufacturing Astro rapid beginning $XX.X a first The which integration Elk addition the XX% million, year. and driven level on Astro of with Grove Machine, and of in

this one be before the of later For jointly and has already month, developed example, more our first will developed been end jointly should the and printer released at additional least completed printer be released year.

higher XXXX operating quarter segment improved in period. XXX the margin more a First mix favorable points XX%, ID Product reflecting revenue to the basis from profit

the in to production. forward, to from ink last by supplier-related the returned sidelined year Going restored those also are as a revenue full printers issue of that field expect benefit mix units we were and retrofitting since quality

year. issue before end fully to the of fiscal this expect be We resolved the

array number were generated the number of a XXXX and leads across We featured of Print Munich. traction of customers by gaining with new and in Global a and kicked trade European we shows high-quality accessories, the off products our X our delighted in couple season responses shows latest The Product products our and an of applications. with we are weeks large in ID at FESPA Düsseldorf later, trade last interpack month show great Germany. Expo

and research printers as site, to e-commerce milestone want month, solution customers their has well we launch products another status. throughout ability new experience. a had Internet. giving for and that check and for last with the our year. will to directly very of over and continue searching AstroNova customers we functionality customers positive, purchase ideal It's supplies the important Also been existing the user-friendly to reorder customer account provides or as site Initial order response a The convenient, add site to the the

was driven Test improvement continuing market. profit up increased basis Segment to segment. but operating down aerospace of the Revenue to year-over-year Turning to Measurement points XX.X% the modestly, by commercial & XX% of $XX.X margin was revenue. XX million

global aircraft strong. air printers, is supplies in travel service coming aerospace XXXX. anticipates outlook our XXXX, projected from for XX,XXX the demand by A With in XX,XXX in Airbus for services total and XX% the are XX,XXX decades, up the next XX that years. to with replace massive airline from growth be support service. aircraft in likewise to projects the those to fleets XX% expected of be a deliveries will Boeing new over jump retired and of

segment. to of portion Turning data Measurement the Test & acquisition

landed to programs, of products. look new power monitoring have our the new to performance acquisition addition to and forward aerospace this several growing in due accuracy segment and quarters. defense data coming exceptional core we In projects We our generation the

year-over-year totaled from see were first end. sequentially bookings Backlog With than $XX.X up year-end. in million the fiscal to more we million. the $XX.X the more quarter strengthening X% our further over XX%, and than of company-wide backlog, is at Finally, were XX% pleased up that quarter

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

David Smith

good XX% solid the Thanks, revenue $XX.X At our contributions top revenue segments. we morning, recurring always highlight increased -- We everybody. million business revenue of posted Greg, and model. and to the both nature from overall line,

more revenue than primarily the in the Astro addition revenue Machine of hardware Driven revenue XX% more in by was than segment X% The more than increased Product at ID up increased X% more segment, million. demand category revenue by $XX.X by service grew million, supplies $X.X looking XX% to $XX.X And growth type, to by by segments. million. than to to and other reflecting both

remaining and revenue quarter; the total XX%. XX%; of for XX% the first the total, hardware in supplies, in So other, and revenue accounted service

both supplies service year-over-year, while and of up were a was revenue, hardware As about down revenue X%. percentage

to XXX of cost which in increase in this from excuse -- to noted lower was a in strict quarters. XX% the with margin. the notice XX.X% a that operating basis quarter. profit first in along quarter expense point control a focus year, gross decreased me, a the -- X Operating same margins expenses increase prior point Greg in last very I'll quarter for operating basis the led That XX remains as the quarter revenue XX.X% I'll note the us. percentage than

last accounted total for the revenue, XX.X% a a revenue From revenue XX.X% compared International total of up first same XX.X% in XX.X% growth year. perspective, revenue percentage of in in and quarter geographic Central dollars, for in In and year the a accounted with earlier. from quarter we domestic single America quarter double-digit and South the percentage growth Europe. high -- high saw of Asia

the revenue slightly million which EBITDA normal compensation, last $X.X the at plus than lower was or end define was year. end year-end. we $XX.X Cash to quarter Adjusted as million higher debt year. revenue at EBITDA, the million, $X.X X.X% of of share-based X.X% increased to of compared Total

checks trailing full year in in XX-month Total a our Astro that agreement includes debt and of at Machine, calculated EBITDA X.Xx. bank is to

through X.Xx. comfortable EBITDA debt would On the this expect absent adjusted be level. the with GAAP acquisitions. historical to year We're financials, to do leverage, We the any decline though,

demand our will And efficiency support about sufficient of the our new growth. capacity primarily. some $X.X use hardware business, for with that secured got to operating we equipment keep capital will up We've and and supplies improve needs equipment manufacturing million upgrade financing to

supply in increased quarter where instance, in investment need experiencing T&M to some bit extra to the stocks. electronic segment. Inventory T&M support the as primarily we purchase a struggles the buffer segment and components a area chain our in We're PI in still little well, few

use move free that However, as chain through are there confident issues , We'll our will we're in signs cash those reduce aggregate that the year. shrink inventory are and to clear supply debt. the we

With that, the Greg. turn back call I'll to

Gregory Woods

Thanks, fiscal in commercial is top initiatives economy, ID, driving T&M In to slated the and aerospace multiple products should year new to larger we mark margin segment. the began performance our momentum important goal business. continued our XXXX lines towards global and business, enhancement. that focus David. this underway Barring fiscal with Product improved the In closing, results step XXXX an favorably downturn of any across in technology with growth line other innovation expect sustained contribute launch which our see on for of our we of

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

Operator

Instructions]. [Operator

first Patel. Our from comes question Samir

Samir Patel

Product question on One side. ID the

that the first a QX, of was there some revenue seasonality is and the QX you in this business? step-down noticed I So QX that Astro the Machine there kind to from there, in have I business Is sequential levels. that know

Gregory Woods

does few there the a There enough we've the -- the don't half numbers a second seem be of from kind that have of on that but the favorability to good of at. looked exactly to read And of talked a out. bear we've year that, that customers we

build don't to they of tends cycle, do cycle. QX that kind of be of commit what to Although is it seems seen. a It but kind we've up exactly that type QX, to supplies

Operator

Instructions]. [Operator

comes Company. question & next Our Peter from Sidoti Sidoti from

Peter Sidoti

year? a Gentleman, budget One, for you capital give two spending me can this quick questions.

Gregory Woods

We you do that? can to address give David, approximate. want you

David Smith

about got pipeline. sort the in of million $X.X We've Yes. legitimately

So I'm that million. at $X end up about estimate we'll going to

Peter Sidoti

Okay.

pay down an the operations along? acquisition used that cash excess to from comes unless the So flow will be debt? assumption, Is

David Smith

Yes, that's correct.

Gregory Woods

That makes sense.

Peter Sidoti

they'll stay flat given you'll growth? you be bring Or think And think them the inventories, you able down? do do to

David Smith

commit able We not down. bring to to to I'm them going number. should be a

the down And of we over said the It's we're a think abating. issues year. I down. in them are the I my get supply but levels getting process, slow concentrate As inventory balance going will to comments, the on chain

Gregory Woods

Right.

Peter Sidoti

point? Okay. Greg. for at your And XXXX this economic assumptions simple What's one question,

Gregory Woods

My economic assumptions?

Peter Sidoti

all of Yes. over XX What the going will affect you views the next with economy And think going think is you? do you different how to There's months? do on... it what's happen

Gregory Woods

very as to But works see probably to well driver the be strongest Yes. to not in do there big I'm indicator I'll is doesn't seems in now, admit, an so mentioned I I affected at as economist. in strong all solidly But we and that right the demand -- the presentation far. long be as seem the aerospace. a it mentioned my -- That's up. economy have

driver. see big a that we as So

Peter Sidoti

Okay.

see of in So your sectors point? you slowing at down no this any

Gregory Woods

global very aerospace, different a market it business the our segments. ID, and in said I is of Well, lot a Product in

So Obviously, better economy not the do. will it's better what to macro the the we may or economy, affect may hard predict exactly the that.

Operator

[Operator Instructions].

from question Tom from next comes Spiro Our Capital. Spiro

Thomas Spiro

core call run Capital. if Product like did look low right Spiro, revenues something down. what Tom Astro Machine's revenues it On would about -- ID If annual the quarter. like in to million, to I that Spiro recall, $X I it and right? like in I'm I'll was Product million a me Am mid-XXs, $X ID, something as that QX,

Gregory Woods

out the We would But don't QX by the I break exactly. was business, it Astro yes, driven say growth correct. Machine in

Thomas Spiro

the product simply growth. like ID not Product down. it's core -- was looks No, It

Gregory Woods

break don't different Tom. the out We segments,

Thomas Spiro

Okay. issue if And this time. fiscal take recall I quality you year. I The be quality the your That the of to of it's in issue a first fiscal reports. emerged earlier, resolved -- from to end going Why? one comments very as I long annual understood your 'XX, think by seems

Gregory Woods

on actually We to of that, honest third you. fix are with be iteration our for

happened effective long recommendations which implemented their not the supplier, X what we So is prove run. did first with worked and the in we

seem well. last to stringently very to does in So very tested the And third we a that that working be X, we X months. reverted

So some is have to very But the machines sustainable now upgrade latest upgraded, rolling we we that to does fix. we're out the the now. news this again it look Unfortunately, board. of good across

Thomas Spiro

lines product by are Which quality affected issue? the

Gregory Woods

the Trojan-label products. of most It's

X only the very -- or -- the of Trojan-label mostly of It's actually, of QuickLabel. Some line. X little in it's

Thomas Spiro

does of has -- And these.... someone if one

Gregory Woods

applications, was as say, for why be, to perform well to needs those machines. as certain we're I some works it but going fine, redoing applications and didn't that's in it it

Thomas Spiro

it from at one the all? see. see, do machine And I What of simply using the does at prevent problem I'm I a machines, me I do? I lower the folks do one rate? of Or the if affected use who has

Gregory Woods

-- application. your on be depends it able may You

So applications different our of labels some there's applications markets. and -- types of in and a labels wide different of variety

issue application the it cause. -- but no the some just require an just kind that others, issue, not applications where then we at can for their intermittent because work see treating some of specific So see they very root doesn't symptoms all, And address requirements.

it's -- several mix hundred So a printers, yes.

Thomas Spiro

or receive we've we recall, suffered a I expecting did modest ago no? from problem. years for what compensation some Are this the further couple compensation As vendor of we for

Gregory Woods

with the a do it the it like We But can't a that exactly has of agreements some and disclose and at we there's had a future not the there. won't concessions, concessions outset variety of because But -- it's then that -- payment elements. to made. we clear combination

Operator

Patel next from Our question comes from Capital. Samir Askeladden

Samir Patel

up just look I accurate, don't don't of you but at turns your maybe issue. X early following inventory way here, David, the pin except I this decade. XXXX at it kind But from late I in I all the want down know looks inventories call XXXX, pulled of that if if like a and specific to know on October brief to or for a is number. very period it, data were above, through,

data turns source to according inventory at those my Today, are X.X.

Xx think X.X, getting structurally where inventory chain today? is the So to business is as abate is structural there a I that you target? mean, reasonable -- turns maybe about the business supply X, do Or back in something different headwinds there something your

David Smith

I that bones. that enough I'll those at faith. your wish I keep had back take us long the should getting No, to my levels. around good from about math in I question. been love business the inherently to there's But nothing have

have the turns. aerospace long-term PI sure you the And very, entire over of old support to turn think to you inventory that to think long of buys have you I make reasons, components have technology, the the including the business a that that And business on variety slower time. last-time for a fact sort do than period. if to for I very will have the that's printers drag these you always printers build

And turns and should and the so business struggles more business I turn business across recent inventories in But secular aerospace slowdown the PI We have think a the should why are improve there much forth. The board business. think this during the quickly. did our most no, PI the aerospace improve. pandemic reasons I with

the So no, couple next our years. I think of turn improve should over

Samir Patel

mean it basis. levels I trailing another comparable your makes last That the looking that time sense. is a at at way revenues were of on

were, I million as inventories this opposed million $XX Your $XX now. to think, data according to

I mean you're sounds kind is is quite but of I be number, time XX be over to XX you like what I guess out it in between? wanting know not it expect could a put and So months, months, that that frame realized? that meaningful to -- mean, do I somewhere

David Smith

bought Yes. I mean the Astro business is bigger Machine. and we

are So a of the have step-up. going bit to a little inventories

are as think it's the I to this during levels committing as take we'll speculative expect that's going future hopefully, I I able cash going number. to into I'm But -- that not to inventory year, generation year, our to think well. we -- years this And move specific get improve through comments, and said the in -- flow I at a we point. better. be the

Gregory Woods

when you especially past our is like. above had that found we add Samir, up in where a going supply well part that, so on think this normal supply if chain year our now, said business, issues we've back to we the run a could of definitely I issues, And our rates. over stocked of PI little as we bit color I these

start that just the off, orders to those suppliers to in So bleed It's will are X for months typically future. actually. X

this continue So will some bleed off next into going year. of actually is and that year it to

Samir Patel

you implemented while topic a the haven't one talked little Okay. then I system. Perfect. know is you And for ERP about new

the going about helping I were and how forward. of run when the talk excited you Astro some were Maybe see integrating there some that visibility you You you business gave that about the Machine. you, benefits of just think,

Gregory Woods

different of operations. the biggest it integrated And is having amongst Yes. our benefits one

West now a in process. optimizing Warwick, It's here, through a because of it's here off very operation. processes. We we're matter kicked far it's it of Machine Astro the very kind at So smaller domestic, rapidly

to kind So that time by October expect the probably we done have one of frame.

France branch Canada, locations, very So moving directly and we'll move to quickly. the Germany. U.K., that's And then

NetSuite Have instances of over had that time. different they've

to of Machine. just all the be need those, that we consolidate focus after which So Astro will

that getting part on what's to instantaneously. amount systems, and with that's those the the system So have side up financial going also because But sales of same reporting the clears the of whole helps NetSuite, that having CRM mainly inefficiencies everyone deal team the of business. just we marketing fair know a on in integrated, globally

Samir Patel

you. Got I'm And probably I to about guess hear time wait excited data. e-commerce for but more next

As far as...

Gregory Woods

say, site AstroNova If click just you go Product your can want going you to to and just our it own. out, check were ID -- and the on you explore Shop on button, was to it

Samir Patel

I will that. do

within is more As the Test your Or I do control, timing talk kind side, Measurement are to both not you I the pipeline? about them? far opportunities know of seeing ID of as M&A, side, the mean, you & but Product want on

Gregory Woods

Yes.

pretty Product typically in have -- number seriously things about And handful Measurement few of in We ID we're segment segment. it's the in So X a terms Test good at and interesting. of elements. have that a there's a & to look looking both I'd X that say,

-- it's right? interesting. it So that, you So know never looks

start the And we see if do. And we of talking. of can don't in away. we we're you we'll like You what deals walk type kind conservative see,

on with So about what's have to closely it. Machine, we'll one the of we -- -- can And obviously, those for balance sheet. we find have parameters going we'll if you've if get the Astro be we on jumping heard

if from right we efforts. later can a nice a to out be diligence the one year in deal in the we do our So should get good position vetted

Samir Patel

the Am presses. what the I part said. am website. to that? seeing Okay. only of e-commerce the buy Greg, I'm that component of a did Or ability I actually of is website? missing I and on supplies And you sort printers the

Gregory Woods

there. can go No, in you

all a different labels. buy can label -- You

were... buy you You them if actually can

Samir Patel

it see I Okay. now.

Gregory Woods

bought you competitor Unfortunately, a printer.

actually that You label can get to printer results. the better buy too for

Operator

Our next Management. Melas from question MKH comes George from

George Melas

machines issue. in A Thomas the Spiro's field. the It affected quality are follow-up on clearly that questions about

supply Was it So Trojan sell impacts that it machines the sales. also having? you the issues hardware given Did sales? impact just hard it to were

Gregory Woods

mainly channel in segment. certain through our models, Yes,

So we know machines which into. indications sell we can the

able So aggressively incrementally. of on a we in the it. a go-forward fix have, do to course, go little place we more basis, so on And now can that we're

the it and -- to regain channel can channel issues, if the you're and you a until partner see sales. a But number do prove you're solution had you out of those imagine, reluctant you new

we're is get now with online, partners working yes, they customer a back generate channel we're back that lot what what that's sales. and go but to need a of working, exactly doing So make did have the explain sure here. -- we And solid solution to them their to out we

hardware So was impact a reasons. there for those

George Melas

sales? Okay. like of is help or for channel direct And much us revenue channel? what Trojan, the understand, How maybe Trojan percentage is how important is through the

Gregory Woods

piece larger OEM QuickLabel. important of good it. lot a channel There's as some the a of of the an so direct But accounts equipment, accounts, accounts of for or to It's amount happen less be with either OEMs, Trojan well. sales the

George Melas

Okay.

the deals? bit Great. board? just They seem sort a the little large was color be of like of it any question bookings. Maybe Or of give a Maybe bookings. the to us few Okay. on Was a particular on strength? it Was area really strong. there across

Gregory Woods

& in and wasn't different segment. Product products there. There It's an outsized Test was much the across Measurement deal pretty both the Yes. in segment spread that involved ID

David Smith

products the trend in the The favorable. is is trend generally Yes. aerospace --

George Melas

of do the continuous it it kind of is is a just guys Or very aerospace How I sort order? lumpy? patterns? order Okay. mean,

Gregory Woods

that's I'll it's the it. segment, So more one -- on was depends it in the Test wish but latter, this former, it we how We put into report because the Measurement & right?

say, of a lines, government a data or airline depends XXXs acquisition those get -- who with defense be the to Airbus on And of you it airplanes. kind So XX product so lumpy. which it's tend XX contracts, aerospace XXX Boeing the whether buys, and then that's very it's lot aerospace -- -- new

in. to talking come or which put product they Airbus -- category or us they it you're about. on then then And -- to go depends and That orders their Boeing

So could over spread be be it XX order, might longer. a that or even big months

there. a it's an as sometimes lumpiness it can't We in And where even that But forecast. book comes order. that's

orders. part term, X the see well. months that's But typically jump we it need of into a short some the X in when other There's pretty hey, product as can of It's business that the around aerospace. goes in more But -- surge there's pretty that lot something airplane. or shipping Sometimes assembly the of forecast, don't parts There's months the rare. in get predictable. wasn't we're of We we of final advance parts it. spare that

George Melas

Okay.

as David, as helpful. business as quick Okay. line That's you some the percentage final the for -- question Great. of coming a as revenues, in line, on grows? revenue do you that G&A see basically expect of percentage David. the And just a then G&A leverage I G&A mean, future a down?

David Smith

Yes. That's the makes that sense goal. will that, happen. It

percentages goal. a haven't guidance talked certainly, our that that's specific that, and would But happen, standpoint. make it We from about sense would

I that's think I happen. what we're -- will think

George Melas

particular And a the ERP give can there is the implementation you in quarter? Okay. costs about number

David Smith

the Most are mirror. in implementation the rearview of costs

global are guidance We'll in for on capital capital at We are numbers convergence those spending my year. on with work the Machine. spend the overall But spending capital in some system. more Astro some European this implementation

huge. -- So not they're it's

Operator

There line. are questions more the no on

Woods back closing hand for any I'll So remarks. now to Mr.

Gregory Woods

Great. Thanks a lot.

Have thanks, We day. a to here morning. everyone, forward us for our So updated good look future. in this joining progress keeping the on you

Operator

conference That for concludes joining. today's Thank everyone, you, call.

You may day. lines. lovely Have rest a your now disconnect of your

AstroNova (ALOT) 8 Jun 232024 Q1 Earnings call transcript