AstroNova, Inc. (ALOT) on Q1 2022 Results - Earnings Call Transcript

Operator: Good day and welcome to the AstroNova's First Fourth Quarter Fiscal 2022 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 Associates. Please go ahead. David Calusdian: Thank you. Good morning, everyone and thanks for joining us. Hosting this morning's call are Greg Woods, AstroNova's President and CEO; and David Smith, the company's Chief Financial Officer. Greg will discuss the company's operating results, David will comment on the financials, Greg will make concluding comments and then management will be happy to take your questions. By now, you should have received a copy of the earnings release that was issued today. If you do not have a copy, please go to the Investors section of the AstroNova website, www.astronovainc.com. Greg Woods: Thank you, David. Good morning, everyone and thank you for joining us. For the first quarter of fiscal 2022 revenue came in at $29.1 million, down 6% from the prior year, as top-line growth in our product and edification segment, partly offset continued softness in the aerospace portion of our test and measurement segment, due to the effects of the pandemic and the slow recovery in 737 MAX shipments. Although the global economy is still challenged, we're beginning to see signs of recovery in certain areas as economies begin to open up and air travel increases. Our product diversification statement posted record bookings for the quarter and bookings for the aerospace portion of our test and measurement segment, were up 45% sequentially, delivering the first aerospace positive book to bill quarter since fiscal 2020. On the cost side of our team, our team members have done an excellent job over the past year in bringing down our expenses as reflected in our higher margins and increased profitability in the quarter. Operating expenses were essentially flat from the prior year's first quarter and operating profit was up nearly 11%. David Smith: Thanks Greg and good morning everybody. In the first quarter, we continued to manage our costs will while continuing to prudently invest in growing the business. Greg gave a comprehensive segment review. So I'll just mention a few more items from the P&L and balance sheet. I'll also note that our Q1 10-Q will be filed today. Looking at revenue by type, Hardware revenue was $7.6 million in the fiscal 2022 first quarter, compared to $8.9 million in the prior year period, reflecting the decline in the Test And Measurement segment. Supplies revenue was $18.2 million versus $19.1 million in the same period of fiscal 2021. Service and other revenue was $3.2 million up from $2.9 million a year ago. The year-over-year variance in supplies revenue reflected in part weaker aerospace industry demand in the first quarter of this fiscal 2022, associated with COVID-19 as compared to last year, as well as what we now think was some early pandemic supply stocking orders from some Product Identification Customers in the fiscal 2021. It's on the supply chain throughout the pandemic, we've experienced some challenges in obtaining raw materials and components from our, for our products and this continues. So far, we've not really had shortages and I've managed this once with some additional costs for things like expedited shipping and express shipping fees and we don't think that these challenges that materially affected our financial results or relationships with our customers and our current view are that these issues will remain manageable, but it probably will take a couple of quarters before they're worked out of the system. We've been addressing potential supply shortages proactively throughout with long range planning and supplementing inventories as needed. To some extent these strategies have resulted in us carrying more inventory than the reason that inventory is at quarter end were down only modestly from the year end period and for the time being we planned to continue to err on the side of caution. Greg Woods: Thanks, David. We continue to focus on our Core Strategic Tenants, investing in innovation, expanding our global geographic footprint and delivering world-class products that enable our customers to achieve greater efficiency and profitability and test the measurement while the lingering effects with pandemic continue to create uncertainty for the commercial aerospace industry. Domestically, the market seems to be gradually turning a corner over the pace of recovery remains slow and probably the only indication our strategy of addressing adjacent market segments with unique solutions like the T3-OPX is paying off. And then for direct to package printing is growing across the industry. And as a player, we are well positioned to capitalize on that momentum in that segment. Now, David, I'd be happy to take your questions. Operator? Operator: Thank you. . Yeah. Our first question comes from Dick Ryan from Colliers Dick Ryan: Thank you. So Greg, you talked about the tier one status with Airbus, does that now mean you're not required to pay Honeywell anymore fees for their participation and how about on the Boeing side? Greg Woods: Yeah, the Boeing yeah, there are no fees with respect to Boeing. This year we were a tier one supplier for Boeing. With Airbus, yeah, with the completion of this agreement, we can now work to finalize that. There's still some negotiations going on in terms of the exact timing of wrapping up everything for Honeywell. It's kind of three people in that agreement there. It's us, Honeywell and Airbus. So we get the Airbus piece which was the most difficult locked up and now we just need to wind down the Honeywell transition service agreement, piece of that, which we're working on right now. Dick Ryan: Okay. The 737 backlog starts to flow. What, are you seeing there? It looks like obviously the booking strength was pretty much related to the 737 or was it across the spectrum? Greg Woods: Yeah, it was across the spectrum and it's still a very small piece that's coming from the MAX, but we are seeing that just start to ramp up now. It’s still a small number as compared to where we were in 2019. But we are seeing that checkup quarter-by-quarter. The latest information we have from Boeing is in line with what they have said in the past is that they should be getting up to kind of the low levels are at now to the 30, 31 kind of a level as we get into very beginning of 2022. So that's good to hear as they're on track with that. And as of course, as they do that, they'll need more and more printers to support that ramp up in their manufacturing. Dick Ryan: What does that, what is their inventory of printers look like? Can you give a sense of how much inventory they're sitting with? Greg Woods: Yeah, they typically don't keep a lot. They keep it because again, the 737, the airline is actually purchased directly from us and they drop ship it to Boeing in time for the production. So they do keep a buffer. Obviously they don't want to slow it down in case an airline is slow on their delivery, but that's typically kind of the low tens kind of numbers that they keep on hand there in Seattle. Dick Ryan: Okay. On the product ID side, you mentioned increased staffing in China, what the percent of revenues is APAC now and what's the opportunity working in that grow? Greg Woods: Yeah, we don't grow, we breakout specific percentage, but it is a very large economy in China and they've bounced back a lot quicker than most with the pandemic and they're kind of back to normal from what we can see in January. So we just want to get, we have a lot of business, but in business potential, but in the South, we weren't very well-represented cause it's hard to get there from Shanghai. So we expect that we don't publish the actual numbers, but we'd expect our China to double a year-over-year kind of from this point looking at next year as we ramp up that office. Yeah. Because the business in that area is nearly equal to the business we already have and the potential we have in the Northern part of the country. Dick Ryan: Okay. I know you don't give a specific guidance, but can you give us a sense of how you see fiscal '20, '22 kind of flowing from first quarter as a base? Greg Woods: Yeah, we don't what I could say is maybe I just highlight the things that I already have said, which is we're seeing a nice pickup in orders on our Product Identification side and while the orders are still behind where they were obviously you know pre-pandemic level in the aerospace in Test Measurement portions of our Test And Measurement Segment that we're seeing that ramp up to. Operator: Again, . Yeah, no additional questions at this time. I'd like to now turn it back to Mr. Woods for closing remarks. Greg Woods: Hey, well, thanks everyone for joining us this morning. We look forward to keeping you updated on our progress. And we'll talk to you next quarter. I know. Operator: Thank you, ladies and gentlemen, this concludes today's presentation. You may now disconnect.
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AstroNova, Inc. (NASDAQ: ALOT) Director's Significant Share Purchase

  • Quain Mitchell I, a director at AstroNova, Inc. (NASDAQ: ALOT), purchased 10,000 shares, increasing his total holdings to 97,719 shares.
  • The company's commitment to enhancing accountability and transparency aims to build investor trust despite its current financial metrics showing a price-to-earnings (P/E) ratio of -4.33.
  • AstroNova's valuation metrics, such as a price-to-sales ratio of 0.45 and a debt-to-equity ratio of 0.61, reflect its market position and financial health.

AstroNova, Inc. (NASDAQ: ALOT) specializes in data visualization technology, offering products and services across various industries, including aerospace, automotive, and packaging. The company competes with other firms in the data visualization and printing sectors. On June 17, 2025, Quain Mitchell I, a director at AstroNova, made a significant investment by purchasing 10,000 shares at $9.05 each, thereby increasing his total holdings to 97,719 shares.

This strategic purchase by Quain Mitchell I aligns with AstroNova's ongoing efforts to bolster accountability and transparency, as emphasized in a recent shareholder letter. The board's dedication to responsible governance is designed to foster investor trust and confidence, which is vital given the company's current financial metrics. AstroNova's price-to-earnings (P/E) ratio stands at -4.33, signaling negative earnings, a potential red flag for investors.

Despite these challenges, AstroNova's price-to-sales ratio of 0.45 indicates that the stock is priced at 45 cents for every dollar of sales, potentially appealing to investors seeking undervalued opportunities. The enterprise value to sales ratio of 0.71 offers a broader view of the company's market valuation in relation to its sales.

The company's financial stability is also evident in its debt-to-equity ratio of 0.61, suggesting a moderate level of debt management. Furthermore, a current ratio of 1.67 indicates that AstroNova has sufficient current assets to meet its short-term liabilities, providing a safety net for financial obligations. However, the enterprise value to operating cash flow ratio of 47.68, combined with an earnings yield of -23.10%, underscores the challenges AstroNova faces in its earnings performance. Nevertheless, the company's initiatives to improve governance and transparency could mitigate these issues and bolster long-term investor confidence.