ALOT - Earnings call transcript Q4 2024

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Operator

Good morning, and welcome to the AstroNova Fiscal Fourth Quarter and Full Year 2024 Financial Results Conference Call. Today's conference is being recorded.

I would now like to turn the conference over to David Calusdian of the company's Investor Relations firm, Sharon Merrill Advisors. Please go ahead, sir.

David Calusdian

Thank you, Kayla, and good morning, everyone. have morning. copy should release the you this issued now, received of a earnings By

not a you've of If received the Investors to AstroNova page the website, www.astronovainc.com. copy, please go

be beginning quarter, that that along prepared our with earnings note Please follows we will slide using this deck remarks. an

of Presentations. may section the access astronovainc.com at on deck website You under the Investors our Events &

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

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

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

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

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

Slide X. to Turning

Chief Executive Vice David this morning Officer. are Joining Woods, President me President Financial Smith, Greg call and on and AstroNova's Officer; and Chief this

concluding through outlook. take and highlights XXXX comments company's take and fiscal will will happy some management Greg a to financial your you targets at segment David be and We financials make level. questions. high the then will discuss share will the operating

at the AstroNova page you've copy release, of please not to earnings website of astronovainc.com. a morning's go Investors If received the this

Now over as I turn X call please turn the Greg. to to Slide

Gregory Woods

by and Thank one excellent hard good team you, work of we accomplished skills, David, fiscal profitable morning, year, and of the more begin and work performance AstroNova members what than stronger contributed Every driving are solid I'd trajectory. financial the our force moving Their more dedication XXXX. XXX like this recognizing the to our to to in behind AstroNova everyone. a team.

on key actually As reflect standout. fiscal I XXXX, three achievements

we business. have far First, PI, realignment which completed the consolidating Identification a strategic our summer. created of efficient more and we Product By segment, last leaner

best to customers of focus on segment just return engineered the our PI enables Our company. highest solutions do and the strategic for delivering that. simplification is the for us opportunities our The

in of resurgence Test Measurement XXXX four posted years. its in segment, fiscal revenue our highest the & Second, which

primary Fueled is MRO aircraft rates, powering segment. T&M by Aerospace the driver commercial its the T&M Our the services on and well largely portfolio way highs. to of pre-COVID to travel rebound build its is returning and in products of air

the products And each QuickLabel, Machine's QuickLabel as and as brands. well flat QL-XXX, fiscal TrojanLabel Machine in the new include our TrojanLabel solutions. of of printing TX-PRO Astro PI These new launching third, pack and the TX-PRO in two XXXX Astro

production of expect products second expanded products momentum this our new have capability. and initial half these year. of performance of to deliveries well fiscal them printing gain we and width improved customers the The All feature in by these received been full

in our full We million, history. the our to year fiscal than X. revenue reported Slide Turning more most results of XXXX $XXX on

related we up previously by primarily was XX%. and slightly the reliability ink growth line through the affected T&M a posted segment, top to year-over-year the certain retrofit issues quality revenue driven printers X% by worked a as of segment PI large supplier. revenue nearly increase discussed which was Our of

of easing in reflected the results margin disciplined consolidated management. realignment, and pressures, pricing supply the chain cost T&M PI in of benefit year improving full Our

on profit and points increased basis points Compared year. improved XXX by the GAAP on a Operating posted margin and basis operating basis, for record XXX gross XXX XXX with full non-GAAP a and points XXXX, non-GAAP margin respectively. fiscal points GAAP basis. on We a

For the EBITDA, ahead basis items, restructuring fiscal excluding and $XX.X to full retrofit year, fiscal million. in XXXX, margin was XXX XXXX. increased Adjusted EBITDA adjusted points XX% XX.X% of

XX% GAAP line, bottom while diluted year earlier on share in fiscal $X.XX XXXX. 'XX $X.XX, a Astro sorry, earned earned the the XXXX than more basis was per non-GAAP in diluted EPS up On from -- fiscal double $X.XX Machine the

cash debt. Dave million cash we of balance to the majority sheet our review. financial discuss which During in more $XX.X flow detail was year, in in used highlights will from the activities, operating his down generated pay and

operating was our segment in year million PI was segment million that and the at fiscal performance lower basis Looking $XXX offset on on and Product basis. million of $X from XXXX. ID Increases revenue X. revenue on supplies GAAP attributed was under non-GAAP fiscal retrofit category, other million, the a to service in in revenue segment primarily profit full a and XXXX $X.X Slide $X.X ahead PI program. just hardware

in the order volume performed and commercial of and highlighted fiscal runway to of T&M daily provide fiscal gains for year-over-year. operating passenger toward by strong service data pre-pandemic segment a profit as year energy as categories million from growth. levels, hardware million our XXXX, in strong our the favorable aircraft segment million to $X.X within revenue revenue primarily The rebound growth favorable The in product line and defense. The product aerospace increased and half traffic increasing went $XX in traction well airline compared T&M also second acquisition XXXX. such end markets trends flights and XXXX, line. $XX.X gained on T&M increased the order supplies posted delivery we through number

by conclude to fiscal our XXXX like through targets. you I'd taking

now Turning to X. Slide

efficiencies system AstroNova product committed teams operating the to are applying the sustained global operating drive Our of innovations, improvement and enhancement. margin to continuous tools and

revenue to digits. organic mid-single year expects fiscal percentage full For the in growth AstroNova XXXX, achieve

Additionally, to by and XX% XX% margin as drive years. year business, XXX to fiscal further year year basis throughout improve our we the adjusted full over per points to we this operational two be improvements continue expect following the EBITDA to

I'll turn over to review. for call David? David the his financial Now

David Smith

the structure believe and future. longer-term is on great share Greg execute great streamlining tremendous enthusiasm Thanks, morning, everybody. effort do our AstroNova part financial Greg, acknowledged and initiatives focusing path team of that what in proud good be the clear and made cost objectives. us The to and I'll investments happy our our I all in it. to about put outlined he we say We've I'm our a and strides

debt our capital cash metric, from working capital inherent with revolving from expenditures in key which facility. strong for and Debt down year our supporting primary the million flow on million, at business. generated is A $XX.X the $X paid after cash we operating of reduction credit use modest activities of the we cash

have capacity, credit We facility the unused committed ample bank. in with the

our PI PI. 'XX, mix to quarter the XX.X% fourth points offsetting from million was or was $XX.X in The throughout quarter strategic margin in quarter commitment period. period Slide the revenue basis the our Turning by also It resources expenses to The marketing reflecting overall QX GAAP of same were approximately our in use largely fiscal with AstroNova increase comparable efficient a with results. and PI of driver fourth segment. in X of in decline in the $XXX,XXX the a period in in XXX and realignment of key the line more X% gross Operating keeping selling of a decline of the a reflected XX% in broad-based increased favorable the 'XX, T&M, is $XX.X XX% fiscal X% with year-over-year to million. a system. expense, the down XXXX a which benefit for in function operating organization

of announced we an $X.X restructuring we than cost savings annualized When August, projected the more million. last

restructuring last quarter the and that the the to of see compared of can in strength gross are in the operating be higher X.X% margin X.X% quarter rate year. our elements in in increasing lower the now fourth expenses run results. of margin XXX that we of The fourth in to basis and points operating place and line with is seen led All

not at the look needed provision $XXX,XXX take not or $XXX,XXX of high that's product wanted reconciliation some available in the were by as planned disclosed took as As the costs some Again, in retrofit customers and retrofits the the we as results a the program is projected most back the in release. program QX, as to GAAP non-GAAP tables, for reserve were complete. results the comparable of directly

in fiscal record improved X% Order or year bookings quarter revenue were from EBITDA volume above in of $XX.X $X.X XX% Adjusted to X.X% million of nearly earlier. QX a a revenue period or million same XX% the million, $X.X strong. the remains XXXX. fourth

Slide XXX explained. XX.X%, a segment revenue quality by to to segment issues. increased X% million, of measure points improvements large by results the and to whole operating suppliers' declined real aggregate. PI PI are effect strategically-driven year-over-year show frankly, the the In the starting to activities team basis already Turning host market margin AstroNova Greg's QX And by the driven to X. of in due reliability a the that $XX.X impact of performance,

segment increased to basis revenue in there segment data a and and XX to $X.X with profit XX% Aerospace and XX% product both margin. was million operating the improvement segment acquisition million up T&M $XX lines the from operating was contributions point

XX% of than the Slide the revenue segment. to higher Hardware points year Moving about fourth T&M in period, the accounted for X earlier driven by XX. quarter,

in Aerospace a Geographically, returning Supplies and same repair the of team higher for those businesses XX% XX% paper elsewhere and product same gains offset nearly helping saw continue high in revenue as it's a the versus the the margins. were due largely revenue quarter as averages XX% we declined in revenue year-over-year, in and focus last part higher. to Service/Other in major The $X of supplies is our issues, again, year. period though revenue generate in Europe. and that revenue stream Although accounted of million ink about well Asia and both a U.S. revenue mostly about lines the sometimes the pickup to

consistently $XX.X before our to safely, from XX-month down beginning our debt balance I'll finish bank in global generated X.Xx. up of you'll year We was slightly mentioned revolving EBITDA trailing cash of and on the sheet our million strong the of and operating operations, $XX.X highlights were flow year $X.X Cash those the debt comfortable range cash end was and we're last million operations Total at credit and of And fiscal $X basis and end the at we to debt. a by where efficiently. total from Slide summarizing used that the XX. year. equivalents on million and is pay that million, find currently the up I the year

debt-funded results grow I ] strategy. further through impacts and financial the business, effective historical plus we Our our our to operations and access seek and AstroNova COVID acquisition. and [ the believe and strong support delivered on enhanced credibility condition crises team can certainly the have acquisitions the the managed that responsible MAX to is capital our market crash now as the and through our way by organically of

let me back now for to call the comments. turn So closing Greg

Gregory Woods

Slide is David. on now Thanks, XX. Summary

is AstroNova positioned XXXX. as well fiscal we in move forward

brands well-respected to have positions. continue innovative in our needs launch and challenging our most that We our products leading we satisfy across market strength customers' businesses,

to solutions for our customization and mass Measurement increasing airline This well for range position printing resurgent consumer us trends the sets & to goods on up packaging in capitalize both as the a a of of Test secular demand industry. wide as strong including for satisfy segments, Identification Product nice

in continue business high of as we increase our revenue that recurring also customers. and expect place hands contribution continue supplies hardware our the from to more to the to We benefit from

We And strategic capabilities finally, record we growth value-generating seeking long-term strong year financial we our acquisitions have achieving start and financial position that new our a XXXX are a actively in presence strong in committed to markets. M&A the complementary our and broaden and of track continue and objectives.

questions. take With that, would your happy to be Operator? I and Dave

Operator

Samuel from from ] [Operator Delta We question [ Analytics. have a Instructions] Koenig

Unknown Analyst

the on year. this Congratulations accomplishments wonderful

I in you if understand impressive. printers it's I'm that you one I Airbus. ] I to also to question began the past and year, magnanimous is your that regarding and correct? think in wanted just Boeing Is Airbus. ask correct put really [ in

Gregory Woods

on a our say for our aircraft we've always printers Well, had always, said -- quite I while. we've Airbus

we [indiscernible] that true. brands the have. have that's So aircraft different different on

Unknown Analyst

up affect you that that the lot you? What by Or of will be also was detrimental on Boeing their Airbus [indiscernible] you acquisitions planes incident, all other from orders? saying a related Boeing the with to that, I was Boeing ask will delaying wanted and that cash items taken also the different this how and the increase and do think to news companies in of

Gregory Woods

Yes.

is overall As I mentioned the growing. industry earlier,

range Obviously, you are the on flying in on a probably of pretty any Airbus products much and aircraft that our we're biggest, wide commercial, So aircraft. Boeing has it. be but on might

So there. pretty well diversified in general, we're

have their far changed. and looking and As forecast from them Boeing, -- supply have management they'll to from our at a it these as from have But I'm items talking to they deal projections sure forecast not with. standpoint, our people, that

So we we're last up expect still increase. less rate later year hopefully, this shipping year. might anticipated the as increased on a little into that pick than that The going we'll schedule year. be and But to into see what bit go we

Unknown Analyst

printers? Easter these question is, Do Or upgrades printers? are newer my have -- the there you all these any in all? and coming at products same and are upgrades final you upgrades great and a in you are happy wishing And like weekend

Gregory Woods

we that our printer. a as last with going deck, investor brand, posted, which more our airlines ToughWriter a to we in we on encouragement is manufacturers big Well, press program mentioned transition and to modern deck aircraft have

majority airlines we newer, brand, expect a which that. ToughWriter up the as up-to-date to have within to OEMs of transition the have of number X-year taking we as us So more the shipments a is And our printer. well on period,

Unknown Analyst

up Thank keep you, good guys, and the work.

Operator

Patel [Operator from comes Our next Askeladden today Instructions] Management. Capital question Samir from

Samir Patel

I about wanted we've thanks for of On Congrats guidance. dive while. topic, and guidance. the initiating been kind quarter, on that talking that I again to great a for know into that

could seasonality, the macro seems the it the on of in growth, level kind bit. of conservatism Is it that like you obviously, issues of So like year. embedded expound to conservatism that, flattish kind there's but of the last of that to little just Boeing. more attributable Maybe at some the kind of referenced of year-on-year given seems couple some caller a on previous quarters

Gregory Woods

-- of it's we predictable. and Samir, the Yes. in to there lane yes, be is kind will not everything like

comfortable to to it are what see we're if don't could what right we and we look with respect we take with need the said ahead later we'll adjust now, some that. higher So at And well. But at any that we year, that ourselves, we it as move that's revise -- things that -- if it in a headwinds huge point. get if of things, when obviously, there

Samir Patel

Okay.

revisions it? starting So comfortable of And below to you're happen of things that in of with. that anticipate it's guess, that of things then it's would -- go be kind of what I you're might you a not come that bias kind more that's you're face in the if Is more going towards kind the fair that. interpreting well, upward way whatever

Gregory Woods

about Yes, that's think it. to a way good

Samir Patel

Okay.

similar about going retrofit The strong what level as there kind we've despite know Product should was think margins second on quite ongoing program. QX gets I Can revenues. script this on back question next into was, to that obviously I your in in were conversation head margins. about in and had QX kind of of They segment explain QX. mentioned that you ID what we for you we year? the know

Gregory Woods

us the setting go increasing revenue, move that products David Yes. that, that online on Well, we're don't And that aside, also helps which other in into but more but really as those those a year, of didn't -- there exactly helps side this obviously adjustment have QX. about looking an Trojan-related through visibility is that you talk was there drive margins at maybe the and coming -- back But on of could things. should ] looking [ margin what should growth, helps we have supplies as we're be because you TX-C at the year. this

to that? David, do you want to anything add

David Smith

Yes. something sat -- it in there that's Astro quarter We that a the did some not to was have the Machine fourth Obviously, adjustments recur. inventory going on in bit. little that's margins

the from should what in certainly think So moving we the mix will the -- fourth forward margins, improve that quarter. happened

Operator

from question MKH from next The George Management. Melas is

George Melas

previous Greg exactly question. asked and the caller operator. David, my Thank you,

So have I'm I any don't other, sorry.

Gregory Woods

with All Good right. catching Okay. up you.

Operator

Dennis question Capital. is next from from Scannell Rutabaga The

Dennis Scannell

said, quarter echoing rebound. Nice nice Greg see just and really to of has and what a the nice David, year. this everybody end else

So to also my previous similar questioners. question the is two

a granular -- maybe little get little or to So differently. but it frame a

QuickLabel So then in and I've ever in did numbers XX.X% some Machining. Product by I the quarter. And think XX% operating we're Identification inventory there fourth the the my that I'm third adjustments margins, highest quarter, -- maybe you were sorry, at said seen Astro David, did

high the as, historically, been think, I group as I know has XX%.

a of in the the that on expectation? at high more business, of what Or quarter? we that kind we look can like in quarter teens on So some things make for were an third unusual go-forward the going this third basis, there showed kind unrealistic

Gregory Woods

you it be you answer just on maybe big impact that into David you I'll about longer-term yes, that when getting it. mentioned So a adjustment more I the -- it. -- And before. about out, average trend had inventory general But talking the more XX% specific in of the range can and if we're in that into think back we're get the kind

towards about realistic more go think thing is think mid-teens, So a of as that to forward. driving more I we kind

David Smith

I I the take of I would frame have a said agree you with there. that. way at That's look the average it. that kind would

Dennis Scannell

-- That's great. sounds no, absolutely that

Operator

Samir Instructions] Capital is for Patel Management. [Operator Our from next Askeladden question

Samir Patel

We're had see any I to the on you pipeline. sorry that. think and cut about wanted M&A comments off. just got I if we follow up

Gregory Woods

we P&I the it's segment about those X% similar that in looking Well, we finish look We've and T&M some that at or before. we'll got end talked things the But we've X% we're actively as up about we it. of Typically, closing. Yes. if of see any and at both can it's up. opportunities interesting

As size one David the acquisitions from the mentioned, we last to a to be position did financial of larger. we're even in pursue shape great in able or

So not, And find hopefully, means we we're didn't And if good do a there. something it we out year. this one.

that to we're also of strategic as make well and a So of we course. prudent overpay, kind about it's that don't good sure fit

Samir Patel

sure kind talked if this -- and levels guys I'm Makes but we've again, sorry, sense. referenced And David, not in you script, flow. about inventory your cash you the of if

a of inventories talk of expect you sort of out? on we You stay coming guidance about capital expect or flow bit flattish gave I Any working kind EBITDA, this you dynamics levels kind your year? mean, other at could maybe but continue little to to you that these call items cash other down.

David Smith

to Inventory continues needs areas it We opportunity be and like do to for I a see improvement. to what call be. focus of

been make commitments had have the primarily to still the have cash inventory of business. support recently, otherwise more to to on of business, has Supplies lot on and continue we ink, pay have side would in to T&M that make which to off We able need bring the some we a to more debt down drawn NPI commitments some

some very while debt we to barring improvement do the by as give the of think large support the have be bite the year, and portion continuous on operations a there obviously, remains powder take ability and for go acquisition would pattern. side down us to that to revolving first the work on which of take and it really the remaining the the that and combination side things It's we'll then course, to a debt. inventory I are dry acquisitions. what the And of to we the end and pattern us move will year, do margins higher the probably cause pay the after to think more redeploy I debt and through on the acquisitions, been the credit of going to benefit of of the

Operator

We currently questions. have no further

I will conclude. over to hand So Woods back Greg to

Gregory Woods

operator. you, Great. Thank

of thanks, East great here now. Bye York June, well, be City. and Coast the Conference person many New Ideas morning. this in everyone. you in us presenting as So everyone, weekend, to for we'll have In a joining We see there hope at

Operator

concludes call. today's you Thank for This joining.

lines. your may You now disconnect

AstroNova (ALOT) 22 Mar 242024 Q4 Earnings call transcript