AstroNova (ALOT) 12 Dec 242025 Q3 Earnings call transcript

Good morning, and welcome to the AstroNova Fiscal Third Quarter 2025 Financial Results Conference Call. Today's call is being recorded. I would now like to turn the conference call over to Scott Solomon of the company's Investor Relations firm, Sharon Merrill Advisors. Please go ahead, sir.

Thank you, Ezra, and good morning, everyone.

Our Q3 fiscal 2025 earnings release and the slide presentation accompanying management's prepared remarks are posted to the Investors page of our website, www.astronovainc.com.

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

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

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

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

Slide Tom call the to your turn questions. Please take Greg. Executive performance. to DeByle, and Hosting Turning Greg the begin will Slide then happy VP Greg call be an as Greg of call make AstroNova's Officer. to Chief will Officer; and Financial segment Tom I and quarter President will third results. with and turn this discuss Woods, AstroNova's company's will are some overview X. Chief morning's concluding management comments, over X the to

joining for thank Good Thank morning, you, Scott. and today. you everyone, us

May. In the ongoing a has a decrease completed Product were of $X.X third than Much third MTEX of million. intensive into increase our our notable in million loss of this more in operating be an had to disappointing. quarter NS when consolidated by We the start the me we consuming we the and anticipated tied Let integration MTEX results is performance. segment, an far to of operating our in and integration expenses. year-over-year acquisition Identification margins addressing significant $X.X proven saw revenue that time resource on quarter, Overall,

see did revenue sequential not the expectations. did and our meet volumes, initial contributions margins sales we While improvement, some revenue

We to rectify quickly have been mobilizing situation. this

now reporting path ensuring accelerating we focus on foundational Our performance the to realignment profitability quarters are MTEX's structure. ahead. To and support is positioned recently its full to MTEX's completed in organizational this, of facilitate a capabilities stronger

to All resources, Identification This marketing, Product sales leadership. and key of within to the aligns our it implementation MTEX's we finance of best consistent for technology, strive AstroNova change excellence and speed manufacturing, aims functions, and the our MTEX's broader across process, operational report with up directly company. human now standards, ensuring sales segment practices

certain inconsistent integration part definitive of details discovered AstroNova MTEX the the originally the by provided team with our appear agreements. the be to process, information During that seller as

We and seeking are continuing from agreements. seller remedies to these research under matters the are potential these

Given this relationships, be on our topic the nature we not confidential today's call. will on taking of customer questions

reduction and We've sharpen evolving the to cost line underscore is not our the aimed comprehensive our new we product a market's at progress astronobl-wide expenses, also reducing effort have our is product competitive of some that at confidence launched initiative. process, part rationalization edge. Early As portfolio but an orders offerings. significant encouraging. refining integration This only closed in

that working we began had committed inkjet customer-requested extend and shipping XXXX. to allow PI operations enhancements. strategically but printer and a to fiscal we is drive of mid-calendar sustainable gains. One optimization delayed our large product order long-term In been segment. full through this will recognize some are through We to MTEX's launch multi-phase deliberately update we integration from step a QX, each the However, that anticipate journey year that

dollars million several contribute over will order the next PI quarters. to segment's our the line top that several expect We

challenges, inkjet remain product combined management Moving in in integrate X. conjunction want emphasize our rationalization technology our with the the quarters printer continued program, technology. MTEX's our product intend lines. monitoring compelling. to solutions, In of and confidence and integration-related with to printing software I into their ahead, to Despite most Their Slide unique real-time we MSIs

We also ownership. give and this several plan to global cost of lower improved models will within We performance large our base. approach a ultimately customers total retrofit believe installed our

Turning X. Slide to

by the and largely Our segment. within total aerospace the line X% quarter, revenue nearly in Measurement product third our increased in the Test driven momentum

defense balling the even provide strike, would is stronger nearly role aviation for to it months which the and been advantage X of AstroNova. The competitive Our supplier continues leading segment's shipments. not and delayed had commercial, strong business for performance been electronics printers Flotek for have

strike shipments we we're now and stronger volume expect fiscal as ramping sales close the back With we resolved, up XXXX. out

margin of our on for outlook shown when XX% enhancement Today, about coming deck As the expected X, segment, aerospace XX% shipments by ToughWriter shipments, are factors that printer the brands. Slide The of T&M our our acquired drive flight brands. are mind longer-term X considering in our to in remaining represented years. key Keep proprietary printer

narrow discussed we we of the format are printers. upgrading have prior in process brands X our branded the customers calls, ToughWriter As wide to acquired from on and

of brand that shipments. for I account our estimate our fiscal will think of XX% approximately XXXX, we ToughWriter

having in will the be manufacturing We expect By improving year costs, plan this reduce by margins. the overall services and thereby customers. and transition completed our XXXX, resulting end ToughWriter technology experience fiscal fewer parts enhanced SKUs, of our for to transition streamline

those from to 'XX million to addition in through in shown year royalty projected In 'XX fiscal $XXX,XXX fiscal dropped dramatically XXXX. $X just expenses, as X, per our benefits, on over Slide

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

Greg, you, morning, everyone. and good Thank

overview offsetting of financial for revenue in was our our million, revenue TM $XX.X begin with Slide on in third with PI. modest to segment, me an Net X.X% up Let X. performance a quarter decline the growth

prior third for MTEX, profit quarter total was period. million, were margin to accounted XX.X% primarily million head million $X.X of due X% the margins higher key XX.X% of MTEX. costs. Non-GAAP technology The margins a count additions the increase. up costs third $X.X increased period period, the MTEX, increase and related at down information and cost and is $X.X for income to in Gross and for for Non-GAAP $X.X of in in organization, came the the for lower at loss expenses were XX.X% higher million third European sales to profit XXXX the Excluding sales from compared sales. mix the hardware period. net related earlier personnel versus with prior and the lower year MTEX remaining in year revenue million $XX.X quarter year in quarter. Gross quarter operating the expenses finance the due prototype operating quarter to

$X.XX the of $XX.X $XX.X quarter $X.XX compared in million with a the ago. of per $XX.X end at further the was as to with million compared As of in costs compared third quarter, third fiscal control in diluted year those XXXX, second $X.X year share year million in period. X, million were with Bookings the Backlog affected period. $XX.X our XXXX. AstroNova compared was the the earlier November was the environment MTEX's third with management of and with services and in fiscal $X.X prior XXXX for product, million quarter million the quarter results. Adjusted the third of quarter intention earnings align EBITDA Non-GAAP

prior period Slide on $XX.X Revenue PI XX. down year was from our to X% segment to Turning million. results the

decrease revenue. MTEX million profit compares the sales. due higher and sales XX.X% product with mix, down This in or associated XXXX, the was acquisition, operating of of release. and of costs MTEX were of with Excluding reflects Europe fiscal in in in hardware lower primarily to delayed volume product the third the X.X% PI X.X%, fiscal $X.X quarter The segment the revenue third PI in lower XXXX. million segment sales XXXX part quarter $X.X or acquisition, in fiscal

XX.X% segment from for driven XX. $XX.X fiscal the Test in period product prior top million versus operating the to $X.X growth, the the to up Measurement million margins by 'XX Moving $X.X year, million, $X.X were & Reflecting XX.X%. QX or year million Slide line. increased prior aerospace line revenue

by $XXX,XXX on and QX. $XX.X the all million was the million. The and receivable Cash The of drop million $XX.X QX QX, of at of from QX Funded the accounts liquidity Slide end debt payments and in the payable occurred balance higher equivalents key liquidity sheet Lower down at payment $X.X QX. suppliers, the increased in to our cash quarter at reflects with from end $XX.X the FY of at the terms. Looking million, up from as end longer to the timing XX. end of quarter, were million accounts $X.X leverage shipments 'XX. at down of end aerospace

loan capital revolver. MTEX million our with $X.X working AstroNova also supported directly from of

$X.X million Year-to-date, cash months year X first operations Turning flow we million to same period Through cash $X.X of 'XX, $X.X same the the free period was on with earlier. generated versus for of XXXX. fiscal from a XX. Slide million million the for $X.X fiscal cash of flow compared

the we prior accounts versus accounts driven lower quarter. receivable, aerospace lower and During higher from by used million. This of quarter, operations cash $X.X EBITDA was payable

As comprehensive and our ensure strategic they with of operational a Greg and priorities goals. align noted, evaluation we are initiating costs to expenses

in for we We line forward integration providing March. financial presenting these on extended fiscal and results to targets. Instead, 'XX our we guidance along the of will provide for look the MTEX, Given call longer-term longer no targets to time the be plan evaluations, with 'XX.

turn call to Greg? over the I'll Now comments. closing for Greg

can Tom. on strengthen innovative established recognition, identification as AstroNova's and our we our core the Thanks, Slide innovative markets of Summarizing strong operational solutions. technology MTEX's with and existing leader in customer product believe advanced in relationships that strengths, XX. integrating our excellence, brand growth accelerate We position the

anticipated, to is more of the upside acquisition fully realizing benefits complex than MTEX is longer the path the and strategic the significant. Although

Now to for take questions. will the happy be open I Operator, please your Q&A. line Tom and

Capital. [Operator comes Atai Instructions] Daniel with Our from first question Brandon

my if I earlier in missed this Sorry comments.

some have order Is that business? MTEX's related legacy [indiscernible] that's to clarity the delayed. the to or On been that business Just here.

It's a bit quick? hear you, Brandon. little question hard that you Can repeat to

better, hear Yes, Gary, me you now? can sorry. this Is

muted, go kind just little of a bit go Yes, ahead. but ahead,

Yes.

that louder. jet business is order, talk a or [indiscernible] MTEX, legacy I'll bit So far I the little as that PI to related as On

relates units legacy got And we a That's business. want we add accommodate they It very first add them. customer back year, that a that? of actually. could you to good very actually the It's this, from out, shipped could the a the customer. beginning an And order back they as we said, got to and you obviously, large at

and it. get put enhancements we started month. just shipping this product those out of So even all better we those And

yes, different a a new it's but legacy generation but a So product technology, technology. of that's -- but inkjet with MTEX not -- product, also it's the

Robert question Management. with from Favera [Operator next is Capital Instructions] Our

hear Can me you guys that. about now? Sorry

couple So I a of have questions. just quick

MTEX's of I around much for you G&A, how So could are it line gather, corporate can in think from that I $XXX,XXX. filing expenses the confirm just item? was like

I and $XXX,XXX think then G&A $XXX,XXX the expense. it's onetime

you that? just provide on right? I'm that can Or is So color curious, any

you can Yes. Tom, grab that go one. ahead,

Okay.

If you administrative for expenses. expenses where MTEX press $XXX,XXX you look at and -- that research see $XXX,XXX $XXX,XXX had on our broken it's the selling out quarter, development, for you final on we the can the Page the MTEX XX, were and for can and release, general

Okay.

-- segment just $XXX,XXX below that operating that, line acquisition is the right? general the so G&A assume onetime that And and corporate in is and sort expense, the administrative for profit, of I item

Yes.

we and results. balance at which is it was corporate, our in So a credit in offset actually, reflected by MTEX, then $XXX,XXX, their paid

MTEX for figures real a as the entity. that's stand-alone MTEX, So

a just then And on it. Got question quick T&M. Okay.

I So the orders, Boeing are pretty margins. those high delayed assume

of is would have be would that the That reasons why declined my sequentially? X margins guess. So

on those Yes, But make Those you're we pretty orders. there. we're higher back It margin shipments glad typically are see track between Yes. varies them different good come online and now. orders, there. the are much to

it. just Okay. quick. one, then pretty final should Got be And my

to then answered in just a stuff of legacy I answer PID question. maybe that's But result kind think business? on other of sequential mix, That's delayed assume the his right? order some margins, Brandon this I primarily and just the a the with

already, for significant a a have inventory of That's that Yes. is lot good. which we order the

of kind of big in that part those So There's in but that's other traditional it. a biggest the factor things cranking business. there, the out. we're was But mix Yes.

very you much. Thank

At questions. I comments. now for Woods the call back this to turn no have closing We will time, Mr.

good progress. here forward season. We everyone all day. has for on us to a a Well, morning. thank our keeping hope wonderful this updated you look you And I holiday Have joining

Thank thank This everyone, you today's you, and concludes very much, call. Greg, joining. for

disconnect may You now lines. your