Business Wire | Dec 8, 2021 07:30AM EST

AstroNova Reports Financial Results for the Third Quarter of Fiscal 2022

Dec. 08, 2021

WEST WARWICK, R.I.--(BUSINESS WIRE)--Dec. 08, 2021--AstroNova, Inc. (NASDAQ: ALOT), a global leader in data visualization technologies, today announced financial results for the fiscal 2022 third quarter ended October 30, 2021.

CEO Commentary

Gregory A. Woods, AstroNova's President and Chief Executive Officer, stated, "Orders were strong again this quarter, as demand for our products continued to expand. Although sales were somewhat hampered by supply chain challenges affecting both segments of our business, total revenue nevertheless increased 3% year-over-year, as the ongoing recovery of the commercial aviation market helped drive double-digit growth in our Test & Measurement segment. In the Product Identification segment, in-person tradeshow activity continued to pick up in the quarter, as we demonstrated our latest printing and labeling products at major industry events including PACK EXPO in the U.S. and FACHPACK, the European trade fair for packaging, technology and processing.

Business Outlook

"Third-quarter bookings increased 16% to $32.3 million, highlighting strong demand trends heading into the final quarter of the year," Woods continued. "Based on these trends and our expanding backlog, we believe we are well positioned for sequential and year-over-year growth in the fourth quarter of fiscal 2022."

Q3 FY 2022 Operating Segment Results

Product Identification segment revenue in the third quarter of fiscal 2022 was $21.9 million compared with $22.9 million in the same period of fiscal 2021. Segment operating income was $1.8 million, or 8.3% of revenue, compared with $3.5 million, or 15.4% of revenue, in the prior year.

Test & Measurement segment revenue in the third quarter of fiscal 2022 increased 35.4% to $6.9 million from $5.1 million in the same period of fiscal 2021. The Test & Measurement segment recorded operating income of $0.8 million, or 12.2% of revenue, compared with a segment operating loss of $0.8 million, or a loss of 14.7% of revenue, in the comparable period of fiscal 2021.

Q3 FY 2022 Results Summary

Revenue for the third quarter of fiscal 2022 totaled $28.9 million, up 3.0% compared with $28.0 million in the year-earlier period.

Gross profit for the third quarter of fiscal 2022 was $10.4 million, or 36.0% of revenue, compared with $9.7 million, or 34.7% of revenue, in the same period of fiscal 2021. The increase compared with the same quarter last year reflects higher revenue and the impact of favorable product mix.

Operating expenses for the third quarter of fiscal 2022 totaled $10.1 million, compared with $9.3 million in the third quarter fiscal 2021, primarily reflecting investments in Research & Development and marketing expenses to support the business.

On a GAAP basis, AstroNova reported a net loss of $425,000, or $0.06 per share, which includes costs of $0.5 million (after-tax) associated with the write-off of the Company's legacy enterprise resource planning (ERP) system. During the quarter, AstroNova completed the initial transition to a new global ERP system. On a non-GAAP basis, excluding the ERP write-off, net income was $0.1 million, or $0.01 per diluted share, in the third quarter of fiscal 2022. Net income for the third quarter of fiscal 2021 was $12,000, or $0.00 per share.

Earnings before interest, taxes, depreciation and amortization (EBITDA) was $0.3 million for the third quarter of fiscal 2022, compared with $1.7 million for the same period in fiscal 2021. Third-quarter fiscal 2022 EBITDA, excluding ERP write-off costs, was $0.7 million, or 2.4% of revenue.

Adjusted EBITDA, which is EBITDA further adjusted for share-based compensation, was $0.7 million, or 2.5% of revenue, and $1.1 million, or 3.8% of revenue, excluding ERP write-off costs. This compares with Adjusted EBITDA of $2.3 million, or 8.2% of revenue, in the same period of the prior year.

Non-GAAP net income, non-GAAP earnings per diluted share, EBITDA, EBITDA excluding ERP write-off costs, EBITDA excluding ERP write-off costs and CARES Act benefits, Adjusted EBITDA, Adjusted EBITDA excluding ERP write-off costs, and Adjusted EBITDA excluding ERP write-off costs and CARES Act benefits are non-GAAP financial measures explained in greater detail below under "Use of Non-GAAP Financial Measures." Please refer to the financial reconciliation table included in this news release for a reconciliation of non-GAAP measures to the closest comparable GAAP measures for the fiscal third quarter and nine months ended October 30, 2021 and October 31, 2020.

Bookings for the third quarter of fiscal 2022 were $32.3 million, compared with $27.9 million in the third quarter of fiscal 2021.

Backlog at October 30, 2021 was $26.8 million versus $23.2 million as of October 31, 2020.

Third-Quarter Fiscal 2022 Conference Call

AstroNova will discuss its third-quarter fiscal 2022 financial results in an investor conference call at 9:00 a.m. ET today. To participate on the conference call, please dial (800) 430-8332 (U.S. and Canada) or (773) 341-1662 (International) approximately 10 minutes prior to the start time and enter confirmation code 3080960.

You can hear a replay of the conference call from 12:00 p.m. ET Wednesday, December 8, 2021 until 12:00 p.m. ET Wednesday, December 15, 2021 by dialing (888) 203-1112 (U.S. and Canada) or (719) 457-0820 (International). The passcode is 3080960. A real-time and an archived audio webcast of the call will be available through the "Investors" section of the AstroNova website, https://investors.astronovainc.com.

Use of Non-GAAP Financial Measures

In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), this news release contains the non-GAAP financial measures: non-GAAP net income, non-GAAP net income per diluted share, non-GAAP gross profit, non-GAAP operating expenses, non-GAAP segment operating income, earnings before interest, taxes, depreciation and amortization (EBITDA), EBITDA excluding ERP write-off costs and CARES Act benefits, Adjusted EBITDA, and Adjusted EBITDA excluding ERP write-off costs and CARES Act benefits. AstroNova believes that the inclusion of these non-GAAP financial measures helps investors gain a meaningful understanding of changes in the Company's core operating results, and can help investors who wish to make comparisons between AstroNova and other companies on both a GAAP and a non-GAAP basis. AstroNova's management uses these measures, in addition to GAAP financial measures, as the basis for measuring its core operating performance and comparing such performance to that of prior periods and to the performance of its competitors. These measures also are used by the Company's management to assist with their financial and operating decision-making.

About AstroNova

AstroNova, Inc. (NASDAQ: ALOT), a global leader in data visualization technologies since 1969, is focused on designing, manufacturing, distributing and servicing a broad range of products that acquire, store, analyze and present data in multiple formats. The Company's Product Identification segment offers a complete line-up of label and direct-to-package printing hardware and supplies, allowing customers to mark, track and enhance their products' appearance. Supported by AstroNova's customer application experts and technology leadership in printing, material science and high-speed data processing, customers benefit from an optimized, "total solution" approach. The Test and Measurement segment includes the AstroNova Aerospace business unit. This segment designs and manufactures flight deck printers, networking hardware and related accessories serving the world's aerospace and defense industries with proven advanced airborne technology solutions for the cockpit, the cabin and so much more. AstroNova is a member of the Russell Microcap(r) Index and the LD Micro Index (INDEXNYSEGIS: LDMICRO). Additional information is available by visiting www.astronovainc.com.?

Forward-Looking Statements

Information included in this news release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact, but rather reflect our current expectations concerning future events and results. These statements may include the use of the words "believes," "expects," "intends," "plans," "anticipates," "likely," "continues," "may," "will," and similar expressions to identify forward-looking statements. Such forward-looking statements, including those concerning the Company's anticipated performance, involve risks, uncertainties and other factors, some of which are beyond our control, which may cause our actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. These risks, uncertainties and factors include, but are not limited to, those factors set forth in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2021 and subsequent filings AstroNova makes with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The reader is cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this news release.

ASTRONOVA, INC.

Condensed Consolidated Statements of Income

In Thousands Except for Per Share Data

(Unaudited)

Three Months Ended Nine Months Ended

October October October October 30, 2021 31, 2020 30, 2021 31, 2020

Revenue $ 28,857 $ 28,017 $ 87,780 $ 86,595

Cost of Revenue 18,472 18,282 53,792 56,218

Gross Profit 10,385 9,735 33,988 30,377

Total Gross Profit Margin 36.0 % 34.7 % 38.7 % 35.1 %

Operating Expenses:Selling & Marketing 5,777 5,553 16,931 17,033

Research & Development 1,948 1,412 5,203 4,845

General & Administrative 2,364 2,353 7,372 7,214

Total Operating Expenses 10,089 9,318 29,506 29,092

Operating Income 296 417 4,482 1,285

Total Operating Margin 1.0 % 1.5 % 5.1 % 1.5 %

Other Income (Expense), net:Extinguishment of Debt - PPP - - 4,466 - LoanLoss on Disposal of Assets (696 ) - (696 ) -

Interest Expense (135 ) (286 ) (526 ) (776 )

Gain (Loss) on Foreign (117 ) (85 ) (231 ) 314 Currency TransactionsOther, net 53 (66 ) (11 ) 3

(895 ) (437 ) 3,002 (459 )

Income (Loss) Before Taxes (599 ) (20 ) 7,484 826

Income Tax (Benefit) (174 ) (32 ) 297 379 ProvisionNet Income (Loss) $ (425 ) $ 12 $ 7,187 $ 447

Net Income (Loss) per Common $ (0.06 ) $ 0.00 $ 1.00 $ 0.06 Share - BasicNet Income (Loss) per Common $ (0.06 ) $ 0.00 $ 0.98 $ 0.06 Share - Diluted Weighted Average Number of 7,234 7,120 7,196 7,100 Common Shares - BasicWeighted Average Number of 7,234 7,185 7,325 7,137 Common Shares - Diluted ASTRONOVA, INC.Balance Sheet

In Thousands

(Unaudited)

October 30, January 31, 2021 2021

ASSETSCURRENT ASSETSCash and Cash Equivalents $ 8,727 $ 11,439

Accounts Receivable, net 16,351 17,415

Inventories, net 31,661 30,060

Prepaid Expenses and Other Current Assets 6,451 1,807

Total Current Assets 63,190 60,721

PROPERTY, PLANT AND EQUIPMENT 50,624 50,839

Less Accumulated Depreciation (38,950) (38,828)

Property, Plant and Equipment, net 11,674 12,011

OTHER ASSETSIntangible Assets, net 19,637 21,502

Goodwill 12,415 12,806

Deferred Tax Assets 5,942 5,941

Right of Use Asset 1,106 1,389

Other Assets 1,658 1,103

TOTAL ASSETS $ 115,622 $ 115,473

LIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIESAccounts Payable $ 6,866 $ 5,734

Accrued Compensation 4,370 2,852

Other Liabilities and Accrued Expenses 3,835 3,939

Current Portion of Royalty Obligation 2,000 2,000

Current Portion of Long-Term Debt 938 5,326

Current Liability - Excess Royalty Payment 220 177DueDeferred Revenue 284 285

Income Taxes Payable - 655

Total Current Liabilities 18,513 20,968

NON-CURRENT LIABILITIESLong-Term Debt, net of current portion 8,397 7,109

Royalty Obligation, net of current portion 4,811 6,161

Long-Term Debt - PPP Loan - 4,422

Lease Liability, net of current portion 826 1,065

Other Long-Term Liabilities 557 681

Deferred Tax Liabilities 336 384

TOTAL LIABILITIES 33,440 40,790

SHAREHOLDERS' EQUITYCommon Stock 528 521

Additional Paid-in Capital 59,502 58,049

Retained Earnings 57,272 50,085

Treasury Stock (33,944) (33,588)

Accumulated Other Comprehensive Loss, net of (1,176) (384)taxTOTAL SHAREHOLDERS' EQUITY 82,182 74,683

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 115,622 $ 115,473

ASTRONOVA, INC.Revenue and Segment Operating Profit (Loss)

In Thousands

(Unaudited)

Revenue Segment Operating Revenue Segment Operating Profit (Loss) Profit (Loss)

Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended

October October October October October October October October 30, 2021 31, 2020 30, 2021 31, 2020 30, 2021 31, 2020 30, 2021 31, 2020

Product $ 21,928 $ 22,898 $ 1,818 $ 3,521 $ 68,519 $ 66,907 $ 8,952 $ 9,813 IdentificationTest & 6,929 5,119 842 (751 ) 19,261 19,688 2,902 (1,314 )MeasurementTotal $ 28,857 $ 28,017 2,660 2,770 $ 87,780 $ 86,595 11,854 8,499

Corporate 2,364 2,353 7,372 7,214 ExpensesOperating 296 417 4,482 1,285 IncomeOther Income (895 ) (437 ) 3,002 (459 )(Expense), netIncome (Loss) (599 ) (20 ) 7,484 826 Before IncomeTaxesIncome Tax (174 ) (32 ) 297 379 (Benefit)ProvisionNet Income $ (425 ) $ 12 $ 7,187 $ 447 (Loss) ASTRONOVA, INC.Reconciliation of GAAP to Non-GAAP - Gross Profit

Amounts in Thousands

(Unaudited)

Three Months Ended Nine Months Ended

October October October 30, October 31, 30, 2021 31, 2020 2021 2020

Gross Profit - GAAP $ 10,385 $ 9,735 $ 33,988 $ 30,377

Employee Retention - - (1,641 ) -Credit, net Gross Profit - Non-GAAP $ 10,385 $ 9,735 $ 32,347 $ 30,377

ASTRONOVA, INC.Reconciliation of GAAP to Non-GAAP - Operating Expenses

Amounts in Thousands

(Unaudited)

Three Months Ended Nine Months Ended

October October October 30, October 31, 30, 2021 31, 2020 2021 2020

Operating Expenses - GAAP $ 10,089 $ 9,318 $ 29,506 $ 29,092

Employee Retention - - 489 -Credit, net Operating Expenses - $ 10,089 $ 9,318 $ 29,995 $ 29,092Non-GAAPASTRONOVA, INC.Reconciliation of GAAP to Non-GAAP - Operating Income

Amounts in Thousands

(Unaudited)

Three Months Ended Nine Months Ended

October October October 30, October 31, 30, 2021 31, 2020 2021 2020

Operating Income - GAAP $ 296 $ 417 $ 4,482 $ 1,285

Employee Retention - - (2,130 ) -Credit, net Operating Income - $ 296 $ 417 $ 2,352 $ 1,285Non-GAAP ASTRONOVA, INC.Reconciliation of GAAP to Non-GAAP - Net Income (Loss)

Amounts in Thousands

(Unaudited)

Three Months Ended Nine Months Ended

October October October 30, October 31, 30, 2021 31, 2020 2021 2020

Net Income (Loss) - GAAP $ (425 ) $ 12 $ 7,187 $ 447

Oracle EnterpriseOne ERP $ 528 - $ 528 -Write-off Employee Retention Credit, - - (1,615 ) -net PPP Loan Forgiveness - - (4,426 ) -

Net Income (Loss) - $ 103 $ 12 $ 1,674 $ 447Non-GAAP ASTRONOVA, INC.Reconciliation of GAAP to Non-GAAP - Diluted Earnings Per Share

(Unaudited)

Three Months Ended Nine Months Ended

October October October 30, October 31, 30, 2021 31, 2020 2021 2020

Diluted Earnings Per Share - $ (0.06 ) $ 0.00 $ 0.98 $ 0.06GAAP Oracle EnterpriseOne ERP 0.07 - 0.07 -Write-off Employee Retention Credit, - - (0.22 ) -net PPP Loan Forgiveness - - (0.60 ) -

Diluted Earnings Per Share - $ 0.01 $ 0.00 $ 0.23 $ 0.06Non-GAAP ASTRONOVA, INC.Reconciliation of Net Income to EBITDA

Amounts in Thousands

(Unaudited)

Three Months Ended Nine Months Ended

October October October October 30, 2021 31, 2020 30, 2021 31, 2020

Net Income - GAAP $ (425 ) $ 12 $ 7,187 $ 447

Interest Expense 135 286 526 776

Income Tax Expense (Provision) (174 ) (32 ) 297 379

Depreciation/Amortization 796 1,438 3,070 4,571

EBITDA $ 332 $ 1,704 $ 11,080 $ 6,173

Net Income - Employee Retention - - (1,615 ) -CreditNet Income - PPP Loan - - (4,426 ) -ForgivenessNet Income - Oracle 528 - 528 -EnterpriseOne ERP Write-offIncome Tax Expense - Employee - - 515 -Retention CreditIncome Tax Expense - PPP Loan - - 40 -ForgivenessIncome Tax Expense - Oracle (168 ) - (168 ) -EnterpriseOne ERP Write-offEBITDA Excluding ERP Write-off $ 692 $ 1,704 $ 5,954 $ 6,173and CARES Act Benefits ASTRONOVA, INC.Reconciliation of Net Income (Loss) to Adjusted EBITDA

Amounts in Thousands

(Unaudited)

Three Months Ended Nine Months Ended

October October October October 30, 2021 31, 2020 30, 2021 31, 2020

Net Income (Loss) - GAAP $ (425 ) $ 12 $ 7,187 $ 447

Interest Expense 135 286 526 776

Income Tax (Provision) Expense (174 ) (32 ) 297 379

Depreciation/Amortization 796 1,438 3,070 4,571

Share-Based Compensation 398 591 1,345 1,687

Adjusted EBITDA $ 730 $ 2,295 $ 12,425 $ 7,860

Net Income - Employee Retention - - (1,615 ) -CreditNet Income - PPP Loan Forgiveness - - (4,426 ) -

Net Income - Oracle EnterpriseOne 528 - 528 -ERP Write-offIncome Tax Expense - Employee - - 515 -Retention CreditIncome Tax Expense - PPP Loan - - 40 -ForgivenessIncome Tax Expense - Oracle (168 ) - (168 ) -EnterpriseOne ERP Write-offAdjusted EBITDA Excluding $ 1,090 $ 2,295 $ 7,299 $ 7,860ERP Write-off and CARES ActBenefits ASTRONOVA, INC.Reconciliation of Segment GAAP to Non-GAAP Operating Income (Loss)

Amounts in Thousands

(Unaudited)

Three Months Ended Nine Months Ended

October 30, 2021 October 31, 2020 October 30, 2021 October 31, 2020

Product Test & Product Test & Product Test & Product Test & Total Total Total Total Identification Measurement Identification Measurement Identification Measurement Identification Measurement

Segment Operating Profit $ 1,818 $ 842 $ 2,660 $ 3,521 $ (751 ) $ 2,770 $ 8,952 $ 2,902 $ 11,854 $ 9,813 $ (1,314 ) $ 8,499(Loss) - GAAP Employee Retention Credit, net - - - - - - (1,430 ) (802 ) (2,232 ) - - -

Segment Operating Profit - $ 1,818 $ 842 $ 2,660 $ 3,521 $ (751 ) $ 2,770 $ 7,523 $ 2,100 $ 9,623 $ 9,813 $ (1,314 ) $ 8,499Non-GAAP View source version on businesswire.com: https://www.businesswire.com/news/home/20211208005368/en/

CONTACT: Scott Solomon Senior Vice President Sharon Merrill Associates (617) 542-5300 ALOT@investorrelations.com