NASDAQ:ALOT AstroNova Q4 2024 Earnings Report $9.89 +0.09 (+0.92%) Closing price 04/17/2025 04:00 PM EasternExtended Trading$9.90 +0.01 (+0.10%) As of 04/17/2025 04:32 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings History Brookline Bancorp EPS ResultsActual EPS$0.33Consensus EPS N/ABeat/MissN/AOne Year Ago EPSN/ABrookline Bancorp Revenue ResultsActual Revenue$39.59 millionExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/ABrookline Bancorp Announcement DetailsQuarterQ4 2024Date3/22/2024TimeN/AConference Call DateFriday, March 22, 2024Conference Call Time9:00AM ETUpcoming EarningsBrookline Bancorp's Q1 2025 earnings is scheduled for Wednesday, April 23, 2025, with a conference call scheduled on Thursday, April 24, 2025 at 1:30 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Annual Report (10-K)Earnings HistoryCompany ProfilePowered by Brookline Bancorp Q4 2024 Earnings Call TranscriptProvided by QuartrMarch 22, 2024 ShareLink copied to clipboard.There are 9 speakers on the call. Operator00:00:00Good morning, and welcome to the AstroNova Fiscal 4th 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 Calazian of the company's Investor Relations firm, Sharon Merrill Advisors. Operator00:00:19Please go ahead, sir. Speaker 100:00:22Thank you, Carla, and good morning, everyone. By now, you should have received a copy of the earnings release issued this morning. If you've not received a copy, please go to the Investors page of the AstroNova website, www.astronovainc.com. Please note that beginning this quarter, we will be using an earnings slide deck that follows along with our prepared remarks. You may access the deck on the Investors section of our website at astronovainc.com under Events and Presentations. Speaker 100:00:55Turning to Slide 2 in that deck. Statements made on today's call that are not statements of historical fact are considered forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements are based on a number assumptions that could involve risks and uncertainties. Accordingly, actual results could differ materially except as required by law. Any forward looking statements speak only as of today, March 22, 2024. Speaker 100:01:24AstroNova undertakes no obligation to update these forward looking statements. For other information regarding the forward looking statements and the factors that may cause differences, please see the Risk Factors in AstroNova's Annual Report on Form 10 ks and other filings that the company makes with the Securities and Exchange Commission. On today's call, management will refer to non GAAP financial measures. AstroNova believes that the inclusion of these financial measures helps investors gain a meaningful understanding of the changes in the company's core operating results and also helps investors who wish to make comparisons between AstroNova and other companies on both a GAAP and non GAAP basis. A reconciliation of the non GAAP financial measures to their most directly comparable GAAP measures is available in today's earnings release. Speaker 100:02:13Turning to Slide 3. Joining me on this call this morning are Greg Woods, AstroNova's President and Chief Executive Officer and David Smith, Vice President and Chief Financial Officer. Greg will discuss segment operating highlights and share the company's fiscal 2025 financial targets and outlook. David will take you through the financials at a high level. Greg will make some concluding comments and then management will be happy to take your questions. Speaker 100:02:39If you've not received a copy of this morning's earnings release, please go to the Investors page of the AstroNova website atastronovainc.com. Now please turn to Slide 4 as I turn the call over to Greg. Speaker 200:02:53Thank you, David, and good morning, everyone. I'd like to begin by recognizing the excellent work of the AstroNova team. Every one of our more than 360 team members contributed to our solid performance in fiscal 2024. Their skills, dedication and hard work are the driving force behind what we accomplished this year, moving AstroNova to a stronger and more profitable financial trajectory. As I reflect on fiscal 2024, 3 key achievements actually stand out. Speaker 200:03:28First, the strategic realignment of our product identification segment, which we completed last summer. By consolidating PI, we have created a far leaner and more efficient business. Our strategic focus is on delivering the best engineered solutions for our customers and the highest return opportunities for the company. The simplification of our PI segment enables us to do just that. 2nd, the resurgence of our Test and Measurement segment, which in fiscal 2024 posted its highest revenue in 4 years. Speaker 200:04:03Our portfolio of aerospace products and MRO services is the primary driver powering the T and M segment. Fueled largely by the rebound in commercial air travel and aircraft build rates, T and M is well on its way to returning to its pre COVID highs. And third, the launching of new PI products in fiscal 2024 in each of our QuickLabel, TrojanLabel and Astra Machine brands. These include the QuickLabel 900, the TrojanLabel T2 Pro and T3 Pro as well as Astra Machine's 2 new flat pack printing solutions. All of these new products feature improved performance and expanded printing with capability. Speaker 200:04:48The initial deliveries of these products have been well received by our customers and we expect them to gain full production momentum in the second half of this fiscal year. Turning to our full year results on Slide 5. We reported fiscal 2024 revenue of more than $148,000,000 the most in our history. Our 4% top line growth was primarily driven by the T and M segment, which posted a revenue increase of nearly 12%. PI segment revenue was up slightly year over year as we work through the previously discussed retrofit of certain printers affected by the ink quality and reliability issues related to a large supplier. Speaker 200:05:30Our full year consolidated margin results reflected an easing of supply chain pressures, the benefit of the PI realignment, improving pricing in T and M and disciplined cost management. Compared with fiscal 2023, gross margin improved by 110 basis points on a GAAP basis and 290 points on a non GAAP basis. We posted record operating profit for the full year. Operating margin increased 210 points and 380 points on a GAAP and non GAAP basis respectively. For the full year, adjusted EBITDA excluding restructuring and retrofit items, increased 60% to $17,600,000 Adjusted EBITDA margin was 11.9% in fiscal 2024, 420 basis points ahead of fiscal 2023. Speaker 200:06:26On the bottom line, Astra Machine earned $0.63 per diluted share on a GAAP basis in fiscal 2023 point 4, sorry, up 75% from the year earlier, while non GAAP diluted EPS was $0.97 more than double the $0.43 earned in fiscal 2023. During the year, we generated $12,400,000 in cash from operating activities, the majority of which was used to pay down debt. David will discuss our balance sheet and cash flow highlights in more detail in his financial review. Looking at our full year segment performance on Slide 6. Product ID segment revenue was $104,000,000 just under $1,000,000 ahead of fiscal 2023. Speaker 200:07:17Increases in revenue from hardware and the service and other category offset lower revenue in PI Supplies that was attributed primarily to the retrofit program. PI segment operating profit was $2,200,000 in fiscal 2024 on a GAAP basis and $5,300,000 on a non GAAP basis. T and M revenue increased to $44,000,000 compared to $39,400,000 in fiscal 2023, primarily on strong hardware revenue growth. The supplies and service categories also posted gains year over year. T and M segment operating profit increased $1,200,000 from 2023. Speaker 200:08:00The rebound in airline passenger traffic towards pre pandemic levels, the increasing number of daily flights and favorable commercial aircraft order and delivery trends provide a favorable growth runway for our aerospace product line. The data acquisition product line within our T and M segment gained traction as we went through the year and performed well in the second half of fiscal twenty twenty four, highlighted by strong order volume in end markets such as energy and defense. I'd like to conclude by taking you through our fiscal 2025 targets. Turning now to Slide 7. Our global teams are committed to continuous improvement and applying the tools of the AstroNova operating system to drive sustained product innovations, operating efficiencies and margin enhancement. Speaker 200:08:52For fiscal 2025, AstroNova expects to achieve full year organic revenue percentage growth in the mid single digits. Additionally, as we continue to drive operational improvements throughout the business, we expect our full year adjusted EBITDA margin to be 13% to 14% this year and to further improve by 100 basis points per year over the following 2 fiscal years. Now I'll turn the call over to David for his financial review. David? Speaker 300:09:23Thanks, Greg, and good morning, everybody. Greg acknowledged the tremendous AstroNova team effort, and I'll say that I'm happy and proud to be part of it. We've made great strides in focusing our investments and streamlining our cost structure and we all share Greg's enthusiasm about the future. The initiatives he outlined do put us in what I believe is a clear path to execute on our longer term financial objectives, a key metric. We generated strong cash flow for the year with cash from operating activities at $12,400,000 from which we paid down $7,000,000 of debt on our revolving credit facility. Speaker 300:10:06Debt reduction is our current primary use of cash after the working capital and modest capital expenditures inherent in supporting the business. We have ample unused capacity committed in the credit facility with the bank. Turning to Slide 8 and our 4th quarter results. The $39,600,000 of Q4 revenue was in line with the comparable period in fiscal 2023 with a 10% increase in TNM, largely offsetting a 5% decline in PI. GAAP gross margin of 37.2 percent in the 4th quarter increased by 3 20 basis points from the same period in fiscal 2023, reflecting a more favorable mix in PI in the 2024 period. Speaker 300:11:02Operating expenses for the quarter were down $634,000 or approximately 6% year over year to $10,800,000 The key driver was a 10% decline in selling and marketing expense, which reflected the benefit of our strategic realignment of the PI segment. It is also overall a function of a broad based commitment to efficient use of our resources throughout the organization in keeping with the AstroNova operating system. When we announced the restructuring last August, we projected an annualized cost savings of more than 2,400,000 dollars All of the elements of that restructuring are in place and we now see that the run rate is in line and can be seen in our results. The strength of the higher gross margin and lower operating expenses led to operating margin increasing 4 60 basis points in the Q4 to 9.9% compared with 5.3% in the Q4 of last year. As disclosed in the tables in Q4, we took back $210,000 of the $852,000 provision reserved for the product retrofit program as the costs were not as high as projected as some planned retrofits were not needed or wanted by some customers and the program is complete. Speaker 300:12:37Again, take a look at the reconciliation of non GAAP results to the most directly comparable GAAP results that's available in the release. Adjusted EBITDA improved 4% in the 4th quarter to $5,500,000 or nearly 14% of revenue from $3,900,000 or 10 percent of revenue a year earlier. Order volume remained strong. Q4 bookings were a record $39,800,000 9.7 percent above the same period in fiscal 2023. Turning to Slide 9. Speaker 300:13:18In the Q4 segment performance, PI revenue declined 5 percent year over year to $26,600,000 in large measure due to the market impact of the supplier's quality and reliability issues. PI segment operating margin increased by 560 basis points to 12.2% driven by the strategically driven activities Craig's already explained and frankly the effect of a whole host of improvements by the AstroNova team that are starting to show real results in aggregate. T and M segment revenue increased 10% to $13,000,000 with contributions from both the Aerospace and Data acquisition product lines and segment operating profit was up 14% to $3,700,000 and there was a 90 basis point improvement in the segment operating margin. Moving to Slide 10. Hardware accounted for about 34% of revenue in the 4th quarter, 3 points higher than the year earlier period driven by the T and M segment. Speaker 300:14:27Although supplies revenue declined year over year, again largely due to the same ink issues, our businesses continue to generate a high returning revenue stream that averages about 50% and sometimes higher. Service and other revenue accounted for about 14% in the quarter versus 13% in the same period last year. The repair and paper supplies part of the aerospace product lines is a major focus of the team and it's helping both revenue and margins. Geographically, we saw a pickup of nearly $1,000,000 in revenue in the U. S. Speaker 300:15:06As well as higher revenue in Asia. And though those gains were offset elsewhere mostly in Europe. I'll finish up by summarizing the balance sheet and cash flow highlights, and you'll find those on Slide 11. Cash and equivalents at the end of the fiscal year were $4,500,000 up slightly from the end of the year last year. And that range is where we're currently comfortable in operating our global operations safely, consistently and efficiently. Speaker 300:15:43We generated strong cash from operations, the $12,400,000 I mentioned before, and we used $7,000,000 of that to pay down our revolving credit debt. Total debt was $21,800,000 at the end of the year, and our total debt to trailing 12 month EBITDA on a bank basis was 1.3 times. Our financial condition is strong and can certainly report support our operations and strategy. I believe the responsible and effective way that the AstroNova team managed through the now historical crises of the MAX crash and COVID impacts on our business, plus the results delivered by our debt funded acquisitions have enhanced our credibility and access to the capital market as we seek to grow organically and through further acquisition. So now let me turn the call back to Greg for closing comments. Speaker 200:16:44Thanks, David. Summary is now on Slide 12. AstroNova is well positioned as we move forward in fiscal 2025. We have well respected brands across our businesses and we continue to launch innovative products that satisfy our customers' most challenging needs and strength in our leading market positions. This sets up a nice position for us to capitalize on strong secular trends in both our Product Identification and Test and Measurement segments, including the increasing demand for a wide range of printing solutions to satisfy mass customization of packaging for consumer goods as well as the resurgent airline industry. Speaker 200:17:29We also continue to benefit from the high recurring revenue contribution from our Supplies business and expect that to increase as we continue to place more hardware in the hands of our customers. And finally, we have a strong track record of value generating M and A, and we continue actively seeking complementary strategic acquisitions that broaden our presence and capabilities in our growth markets. We start the New Year in a strong financial position and are committed to achieving our 2025 and long term financial objectives. With that, David and I would be happy to take your questions. Operator? Operator00:18:08Thank you, We have a question from Samuel Koening from Data Analytics. Speaker 400:18:34Good morning, Greg. Good morning, guys. First of all, congratulations on the Congratulations on the wonderful accomplishments this year. I think it's magnimonious and really is impressive. I just wanted to ask you one question regarding Boeing and Airbus. Speaker 400:18:56I understand if I'm correct that during the past year, you also began to put in your printers in Airbus. Is that correct? Speaker 200:19:06Well, we've always had our I shouldn't say always. We've had our printers on the Airbus aircraft for quite a while. So that's true. Do We have different brands on the different aircraft that we have. Speaker 400:19:19What I wanted to ask you also was with all the detrimental news on Boeing and a lot of companies delaying their acquisitions of the different planes from Boeing and Boeing was also saying there was transportation and other related items to this incident. How do you think that that will affect you or will that be taken up by the increase in the Airbus orders? Speaker 200:19:52Yes. As I mentioned earlier, the overall industry is growing. So we're on a wide range of aircraft. Obviously in commercial, Boeing and Airbus are the biggest, but pretty much any aircraft that you might be flying on probably has our products on it. So in general, we're pretty well diversified there. Speaker 200:20:08As far as Boeing, I'm sure that they'll have they have these items to deal with. But looking at it from our standpoint, from a forecast and talking to their supply management people, our forecasts and projections from them have not changed. So we're still shipping on schedule and expect that to increase. The increased rate might be a little bit less than what we anticipated last year going into this year, but hopefully, we'll see that pick up as we go later into the year. Speaker 400:20:37And are you my final question and wishing you all a great weekend and happy Easter is, are there upgrades coming in these printers? Are you having upgrades at all? Or are these the same like newer products and upgrades in the printers? Speaker 200:20:57Yes. Well, as we mentioned in our press deck, last investor deck that we posted, we have a big encouragement program going on with airlines and aircraft manufacturers to transition to our ToughWriter brand, which is a more modern printer. So we have a number of airlines as well as OEMs taking us up on that. And we expect to have within the 3 year period, the majority of our shipments transition to the ToughWriter brand, which is a newer, more up to date printer. Speaker 400:21:34Thank you guys and keep up the good work. Great. Speaker 200:21:38Thanks for your call. Speaker 500:22:13Our next question today comes from Sameer Patel from Aspiladin Capital Management. Please go ahead. Speaker 600:22:20Hey, guys. Congrats again on the great quarter and thanks for initiating guidance. I know we've been talking about that for a while. On that topic, I wanted to kind of dive into that guidance. So it seems like there's some level of conservatism embedded in that. Speaker 600:22:35Obviously, year on year growth, but kind of seems more flattish to the last couple of quarters of the year. Is that attributable to seasonality, conservatism on the macro kind of given like the previous caller referenced some of the issues at Boeing? Maybe you could just kind of expound on that a little bit. Speaker 200:22:54Yes. Hi, Sameer. Yes, it's we would really like to kind of be in the lane there and not everything is predictable. So we don't see any huge headwinds with respect to that. There are some things obviously that can move it higher as well. Speaker 200:23:12But that's what when we take a look at it right now, we're comfortable with what we said. And if we need to revise that later in the year, if things if we're going ahead of ourselves, we'll adjust it at that point. Okay. Speaker 600:23:26So it's kind of that's what you're starting with. And then it's more I guess the bias would be more towards upward revisions if things go well, but you're comfortable that kind of in the face of whatever things you anticipate might happen that you're not going to kind of come in below that. Is that a fair way of interpreting it? Speaker 200:23:43Yes. That's a good way to think about it. Speaker 600:23:45Okay. The second question was, I know we've had this ongoing conversation on product ID margins. They were quite strong in Q3. Q4 kind of dips back to that Q2 level despite similar revenues. I know you mentioned in your script about the retrofit program. Speaker 600:24:04Can you kind of explain what was going on there and what we should think about for margins in that segment as we head into next year? Speaker 200:24:14Yes. Well, you don't really have didn't have a really release exactly on that. But there was an adjustment that David could maybe talk about there in Q4. But setting that aside, what we're looking at as we go into this year is that should also those margins should be increasing because we're looking at more of those T2C and your other children related products coming back online as we move through this year. And that helps drive the supplies revenue, which obviously helps growth, but also helps on the margin side of things. Speaker 200:24:49David, do you want to add anything to that? Speaker 300:24:53Yes. We did have some inventory adjustments at Astra Machine in the 4th quarter that sat on the margins there a little bit. Obviously, it was that's not something that's going to recur. So we think that the margins, the mix moving forward certainly will should improve from what happened in the 4th quarter. Speaker 500:25:39The next question is from George Melas from MKH Management. Please go ahead. Speaker 700:25:47Thank you, operator. Hi, Greg and David. The previous caller asked exactly my question. So I don't have any other. I'm sorry. Speaker 700:25:57Thank you. Speaker 200:26:00Okay. All right. Good catching up with you. Speaker 700:26:02Okay. Speaker 500:26:05The next question is from Dennis Scannell from ROTHENBERGER Capital. Please go ahead. Speaker 800:26:13Yes. Good morning, Greg and David. And just echoing what everybody else has said, really nice quarter and nice end to the end of the year, nice to see this rebound. So my question is also similar to the previous two questionnaires. So but maybe to get a little granular or frame it a little differently. Speaker 800:26:35So QuickLabel in the Q3 by my numbers did I'm sorry, product identification did 18.1% operating margins, I think the highest I've ever seen. And then we're 12% in the 4th quarter. And David, you said that maybe there were some inventory adjustments at Astromachining. I know historically the group has been as high as I think 14%. So kind of on a go forward basis, can we look more at the high teens for this business like what we showed in the Q3? Speaker 800:27:10Were there some unusual things going on in the Q3 that make that kind of an unrealistic expectation. Speaker 200:27:22So I'll just answer in general, maybe David can be more specific about it. But yes, the inventory adjustment that he mentioned had a big impact on it. And if when you average that out, you get more into the longer term trend that we're talking about getting back into the I think we're kind of in the 14% range before. So driving more towards kind of that mid teens, I think is a more realistic thing to think about as we go forward. Speaker 700:27:51Got it. Excellent. Well that's Yes, go ahead please David. Yes, I agree Speaker 300:27:55with that. That's the way I would have framed it. We said that you kind of take a look at the average there. Speaker 800:28:01Absolutely. No, that sounds great. Speaker 600:28:03Thank you. Thank you for Speaker 800:28:04the further clarity. That's great. Thank you. Speaker 200:28:08All right. Thanks, Dennis. Operator00:28:18Our next question is from Samir Patel for Askelen Capital Management. Your line is now open. Speaker 600:28:26Yes. Hey, I think we got cut off before. Sorry about that. I just wanted to follow-up and Speaker 700:28:32see if you Speaker 600:28:32had any comments on the M and A pipeline. Speaker 200:28:37Yes. Well, it's similar as we've talked about before. We've got some interesting opportunities in both T and M and the PI segment. And we'll see if we can finish any of those up. Typically, it's about 1% or 2% of the things that we look at that we end closing. Speaker 200:28:58But we're actively looking at it. As David mentioned, we're in great shape from a financial position to be able to pursue acquisitions in the size of the last one we did or even larger. So we're out there and hopefully we do something this year. And if not, that means we didn't find a good one here. So we're kind of prudent about that as well to make sure it's a good strategic fit and also that we don't overpay, of course. Speaker 600:29:27Makes sense. And again, sorry if you guys I'm not sure if you referenced this in the script, but David, we talked about your inventory levels and kind of cash flow. You gave guidance on EBITDA, but maybe if you could talk a little bit about sort of cash flow dynamics that you expect this year. I mean, do you expect inventories kind of to stay flattish at these levels to continue coming down? Any other kind of working capital or other items you call out? Speaker 300:29:57Inventory continues to be a focus, and it needs to be. We do see what I like to call areas of opportunity for improvement. We have had to make still some commitments to bring in inventory to support the supplies business in PI on primarily Inc, which has drawn off a lot of cash, would have otherwise been able to pay down more debt more recently. And we continue to have some commitments that we need to make on the T and M side of the business. I think as we move through the year, the combination of improvement on the inventory side and obviously the benefit of the higher margins are going to give us the ability to really go after the remaining portion of the revolving credit debt barring acquisitions, of course, which would cause us to take on more debt. Speaker 300:31:11And I think by the end of the year we'll have taken a very large bite out of what remains there and have the dry powder to do some things on the acquisition side. And that will probably be the pattern. It's been the pattern for a while and we hope that continues pay down the debt and redeploy it first to support operations and then to do acquisitions. Speaker 600:31:44Makes sense. Thanks. Operator00:31:50We currently have no further questions. So I will hand back over to Greg Woods to conclude. Speaker 200:31:58Great. Thank you, operator. So thanks everyone for joining us here this morning. In June, we'll be presenting at the East Coast Ideas Conference New York City. And we hope to see many of you there in person as well. Speaker 200:32:10And have a great weekend, everyone. Bye now.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallBrookline Bancorp Q4 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Annual report(10-K) Brookline Bancorp Earnings HeadlinesBrookline Bancorp (BRKL) Expected to Announce Earnings on WednesdayApril 16 at 3:13 AM | americanbankingnews.comBrookline Bancorp, Inc. 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There are 9 speakers on the call. Operator00:00:00Good morning, and welcome to the AstroNova Fiscal 4th 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 Calazian of the company's Investor Relations firm, Sharon Merrill Advisors. Operator00:00:19Please go ahead, sir. Speaker 100:00:22Thank you, Carla, and good morning, everyone. By now, you should have received a copy of the earnings release issued this morning. If you've not received a copy, please go to the Investors page of the AstroNova website, www.astronovainc.com. Please note that beginning this quarter, we will be using an earnings slide deck that follows along with our prepared remarks. You may access the deck on the Investors section of our website at astronovainc.com under Events and Presentations. Speaker 100:00:55Turning to Slide 2 in that deck. Statements made on today's call that are not statements of historical fact are considered forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements are based on a number assumptions that could involve risks and uncertainties. Accordingly, actual results could differ materially except as required by law. Any forward looking statements speak only as of today, March 22, 2024. Speaker 100:01:24AstroNova undertakes no obligation to update these forward looking statements. For other information regarding the forward looking statements and the factors that may cause differences, please see the Risk Factors in AstroNova's Annual Report on Form 10 ks and other filings that the company makes with the Securities and Exchange Commission. On today's call, management will refer to non GAAP financial measures. AstroNova believes that the inclusion of these financial measures helps investors gain a meaningful understanding of the changes in the company's core operating results and also helps investors who wish to make comparisons between AstroNova and other companies on both a GAAP and non GAAP basis. A reconciliation of the non GAAP financial measures to their most directly comparable GAAP measures is available in today's earnings release. Speaker 100:02:13Turning to Slide 3. Joining me on this call this morning are Greg Woods, AstroNova's President and Chief Executive Officer and David Smith, Vice President and Chief Financial Officer. Greg will discuss segment operating highlights and share the company's fiscal 2025 financial targets and outlook. David will take you through the financials at a high level. Greg will make some concluding comments and then management will be happy to take your questions. Speaker 100:02:39If you've not received a copy of this morning's earnings release, please go to the Investors page of the AstroNova website atastronovainc.com. Now please turn to Slide 4 as I turn the call over to Greg. Speaker 200:02:53Thank you, David, and good morning, everyone. I'd like to begin by recognizing the excellent work of the AstroNova team. Every one of our more than 360 team members contributed to our solid performance in fiscal 2024. Their skills, dedication and hard work are the driving force behind what we accomplished this year, moving AstroNova to a stronger and more profitable financial trajectory. As I reflect on fiscal 2024, 3 key achievements actually stand out. Speaker 200:03:28First, the strategic realignment of our product identification segment, which we completed last summer. By consolidating PI, we have created a far leaner and more efficient business. Our strategic focus is on delivering the best engineered solutions for our customers and the highest return opportunities for the company. The simplification of our PI segment enables us to do just that. 2nd, the resurgence of our Test and Measurement segment, which in fiscal 2024 posted its highest revenue in 4 years. Speaker 200:04:03Our portfolio of aerospace products and MRO services is the primary driver powering the T and M segment. Fueled largely by the rebound in commercial air travel and aircraft build rates, T and M is well on its way to returning to its pre COVID highs. And third, the launching of new PI products in fiscal 2024 in each of our QuickLabel, TrojanLabel and Astra Machine brands. These include the QuickLabel 900, the TrojanLabel T2 Pro and T3 Pro as well as Astra Machine's 2 new flat pack printing solutions. All of these new products feature improved performance and expanded printing with capability. Speaker 200:04:48The initial deliveries of these products have been well received by our customers and we expect them to gain full production momentum in the second half of this fiscal year. Turning to our full year results on Slide 5. We reported fiscal 2024 revenue of more than $148,000,000 the most in our history. Our 4% top line growth was primarily driven by the T and M segment, which posted a revenue increase of nearly 12%. PI segment revenue was up slightly year over year as we work through the previously discussed retrofit of certain printers affected by the ink quality and reliability issues related to a large supplier. Speaker 200:05:30Our full year consolidated margin results reflected an easing of supply chain pressures, the benefit of the PI realignment, improving pricing in T and M and disciplined cost management. Compared with fiscal 2023, gross margin improved by 110 basis points on a GAAP basis and 290 points on a non GAAP basis. We posted record operating profit for the full year. Operating margin increased 210 points and 380 points on a GAAP and non GAAP basis respectively. For the full year, adjusted EBITDA excluding restructuring and retrofit items, increased 60% to $17,600,000 Adjusted EBITDA margin was 11.9% in fiscal 2024, 420 basis points ahead of fiscal 2023. Speaker 200:06:26On the bottom line, Astra Machine earned $0.63 per diluted share on a GAAP basis in fiscal 2023 point 4, sorry, up 75% from the year earlier, while non GAAP diluted EPS was $0.97 more than double the $0.43 earned in fiscal 2023. During the year, we generated $12,400,000 in cash from operating activities, the majority of which was used to pay down debt. David will discuss our balance sheet and cash flow highlights in more detail in his financial review. Looking at our full year segment performance on Slide 6. Product ID segment revenue was $104,000,000 just under $1,000,000 ahead of fiscal 2023. Speaker 200:07:17Increases in revenue from hardware and the service and other category offset lower revenue in PI Supplies that was attributed primarily to the retrofit program. PI segment operating profit was $2,200,000 in fiscal 2024 on a GAAP basis and $5,300,000 on a non GAAP basis. T and M revenue increased to $44,000,000 compared to $39,400,000 in fiscal 2023, primarily on strong hardware revenue growth. The supplies and service categories also posted gains year over year. T and M segment operating profit increased $1,200,000 from 2023. Speaker 200:08:00The rebound in airline passenger traffic towards pre pandemic levels, the increasing number of daily flights and favorable commercial aircraft order and delivery trends provide a favorable growth runway for our aerospace product line. The data acquisition product line within our T and M segment gained traction as we went through the year and performed well in the second half of fiscal twenty twenty four, highlighted by strong order volume in end markets such as energy and defense. I'd like to conclude by taking you through our fiscal 2025 targets. Turning now to Slide 7. Our global teams are committed to continuous improvement and applying the tools of the AstroNova operating system to drive sustained product innovations, operating efficiencies and margin enhancement. Speaker 200:08:52For fiscal 2025, AstroNova expects to achieve full year organic revenue percentage growth in the mid single digits. Additionally, as we continue to drive operational improvements throughout the business, we expect our full year adjusted EBITDA margin to be 13% to 14% this year and to further improve by 100 basis points per year over the following 2 fiscal years. Now I'll turn the call over to David for his financial review. David? Speaker 300:09:23Thanks, Greg, and good morning, everybody. Greg acknowledged the tremendous AstroNova team effort, and I'll say that I'm happy and proud to be part of it. We've made great strides in focusing our investments and streamlining our cost structure and we all share Greg's enthusiasm about the future. The initiatives he outlined do put us in what I believe is a clear path to execute on our longer term financial objectives, a key metric. We generated strong cash flow for the year with cash from operating activities at $12,400,000 from which we paid down $7,000,000 of debt on our revolving credit facility. Speaker 300:10:06Debt reduction is our current primary use of cash after the working capital and modest capital expenditures inherent in supporting the business. We have ample unused capacity committed in the credit facility with the bank. Turning to Slide 8 and our 4th quarter results. The $39,600,000 of Q4 revenue was in line with the comparable period in fiscal 2023 with a 10% increase in TNM, largely offsetting a 5% decline in PI. GAAP gross margin of 37.2 percent in the 4th quarter increased by 3 20 basis points from the same period in fiscal 2023, reflecting a more favorable mix in PI in the 2024 period. Speaker 300:11:02Operating expenses for the quarter were down $634,000 or approximately 6% year over year to $10,800,000 The key driver was a 10% decline in selling and marketing expense, which reflected the benefit of our strategic realignment of the PI segment. It is also overall a function of a broad based commitment to efficient use of our resources throughout the organization in keeping with the AstroNova operating system. When we announced the restructuring last August, we projected an annualized cost savings of more than 2,400,000 dollars All of the elements of that restructuring are in place and we now see that the run rate is in line and can be seen in our results. The strength of the higher gross margin and lower operating expenses led to operating margin increasing 4 60 basis points in the Q4 to 9.9% compared with 5.3% in the Q4 of last year. As disclosed in the tables in Q4, we took back $210,000 of the $852,000 provision reserved for the product retrofit program as the costs were not as high as projected as some planned retrofits were not needed or wanted by some customers and the program is complete. Speaker 300:12:37Again, take a look at the reconciliation of non GAAP results to the most directly comparable GAAP results that's available in the release. Adjusted EBITDA improved 4% in the 4th quarter to $5,500,000 or nearly 14% of revenue from $3,900,000 or 10 percent of revenue a year earlier. Order volume remained strong. Q4 bookings were a record $39,800,000 9.7 percent above the same period in fiscal 2023. Turning to Slide 9. Speaker 300:13:18In the Q4 segment performance, PI revenue declined 5 percent year over year to $26,600,000 in large measure due to the market impact of the supplier's quality and reliability issues. PI segment operating margin increased by 560 basis points to 12.2% driven by the strategically driven activities Craig's already explained and frankly the effect of a whole host of improvements by the AstroNova team that are starting to show real results in aggregate. T and M segment revenue increased 10% to $13,000,000 with contributions from both the Aerospace and Data acquisition product lines and segment operating profit was up 14% to $3,700,000 and there was a 90 basis point improvement in the segment operating margin. Moving to Slide 10. Hardware accounted for about 34% of revenue in the 4th quarter, 3 points higher than the year earlier period driven by the T and M segment. Speaker 300:14:27Although supplies revenue declined year over year, again largely due to the same ink issues, our businesses continue to generate a high returning revenue stream that averages about 50% and sometimes higher. Service and other revenue accounted for about 14% in the quarter versus 13% in the same period last year. The repair and paper supplies part of the aerospace product lines is a major focus of the team and it's helping both revenue and margins. Geographically, we saw a pickup of nearly $1,000,000 in revenue in the U. S. Speaker 300:15:06As well as higher revenue in Asia. And though those gains were offset elsewhere mostly in Europe. I'll finish up by summarizing the balance sheet and cash flow highlights, and you'll find those on Slide 11. Cash and equivalents at the end of the fiscal year were $4,500,000 up slightly from the end of the year last year. And that range is where we're currently comfortable in operating our global operations safely, consistently and efficiently. Speaker 300:15:43We generated strong cash from operations, the $12,400,000 I mentioned before, and we used $7,000,000 of that to pay down our revolving credit debt. Total debt was $21,800,000 at the end of the year, and our total debt to trailing 12 month EBITDA on a bank basis was 1.3 times. Our financial condition is strong and can certainly report support our operations and strategy. I believe the responsible and effective way that the AstroNova team managed through the now historical crises of the MAX crash and COVID impacts on our business, plus the results delivered by our debt funded acquisitions have enhanced our credibility and access to the capital market as we seek to grow organically and through further acquisition. So now let me turn the call back to Greg for closing comments. Speaker 200:16:44Thanks, David. Summary is now on Slide 12. AstroNova is well positioned as we move forward in fiscal 2025. We have well respected brands across our businesses and we continue to launch innovative products that satisfy our customers' most challenging needs and strength in our leading market positions. This sets up a nice position for us to capitalize on strong secular trends in both our Product Identification and Test and Measurement segments, including the increasing demand for a wide range of printing solutions to satisfy mass customization of packaging for consumer goods as well as the resurgent airline industry. Speaker 200:17:29We also continue to benefit from the high recurring revenue contribution from our Supplies business and expect that to increase as we continue to place more hardware in the hands of our customers. And finally, we have a strong track record of value generating M and A, and we continue actively seeking complementary strategic acquisitions that broaden our presence and capabilities in our growth markets. We start the New Year in a strong financial position and are committed to achieving our 2025 and long term financial objectives. With that, David and I would be happy to take your questions. Operator? Operator00:18:08Thank you, We have a question from Samuel Koening from Data Analytics. Speaker 400:18:34Good morning, Greg. Good morning, guys. First of all, congratulations on the Congratulations on the wonderful accomplishments this year. I think it's magnimonious and really is impressive. I just wanted to ask you one question regarding Boeing and Airbus. Speaker 400:18:56I understand if I'm correct that during the past year, you also began to put in your printers in Airbus. Is that correct? Speaker 200:19:06Well, we've always had our I shouldn't say always. We've had our printers on the Airbus aircraft for quite a while. So that's true. Do We have different brands on the different aircraft that we have. Speaker 400:19:19What I wanted to ask you also was with all the detrimental news on Boeing and a lot of companies delaying their acquisitions of the different planes from Boeing and Boeing was also saying there was transportation and other related items to this incident. How do you think that that will affect you or will that be taken up by the increase in the Airbus orders? Speaker 200:19:52Yes. As I mentioned earlier, the overall industry is growing. So we're on a wide range of aircraft. Obviously in commercial, Boeing and Airbus are the biggest, but pretty much any aircraft that you might be flying on probably has our products on it. So in general, we're pretty well diversified there. Speaker 200:20:08As far as Boeing, I'm sure that they'll have they have these items to deal with. But looking at it from our standpoint, from a forecast and talking to their supply management people, our forecasts and projections from them have not changed. So we're still shipping on schedule and expect that to increase. The increased rate might be a little bit less than what we anticipated last year going into this year, but hopefully, we'll see that pick up as we go later into the year. Speaker 400:20:37And are you my final question and wishing you all a great weekend and happy Easter is, are there upgrades coming in these printers? Are you having upgrades at all? Or are these the same like newer products and upgrades in the printers? Speaker 200:20:57Yes. Well, as we mentioned in our press deck, last investor deck that we posted, we have a big encouragement program going on with airlines and aircraft manufacturers to transition to our ToughWriter brand, which is a more modern printer. So we have a number of airlines as well as OEMs taking us up on that. And we expect to have within the 3 year period, the majority of our shipments transition to the ToughWriter brand, which is a newer, more up to date printer. Speaker 400:21:34Thank you guys and keep up the good work. Great. Speaker 200:21:38Thanks for your call. Speaker 500:22:13Our next question today comes from Sameer Patel from Aspiladin Capital Management. Please go ahead. Speaker 600:22:20Hey, guys. Congrats again on the great quarter and thanks for initiating guidance. I know we've been talking about that for a while. On that topic, I wanted to kind of dive into that guidance. So it seems like there's some level of conservatism embedded in that. Speaker 600:22:35Obviously, year on year growth, but kind of seems more flattish to the last couple of quarters of the year. Is that attributable to seasonality, conservatism on the macro kind of given like the previous caller referenced some of the issues at Boeing? Maybe you could just kind of expound on that a little bit. Speaker 200:22:54Yes. Hi, Sameer. Yes, it's we would really like to kind of be in the lane there and not everything is predictable. So we don't see any huge headwinds with respect to that. There are some things obviously that can move it higher as well. Speaker 200:23:12But that's what when we take a look at it right now, we're comfortable with what we said. And if we need to revise that later in the year, if things if we're going ahead of ourselves, we'll adjust it at that point. Okay. Speaker 600:23:26So it's kind of that's what you're starting with. And then it's more I guess the bias would be more towards upward revisions if things go well, but you're comfortable that kind of in the face of whatever things you anticipate might happen that you're not going to kind of come in below that. Is that a fair way of interpreting it? Speaker 200:23:43Yes. That's a good way to think about it. Speaker 600:23:45Okay. The second question was, I know we've had this ongoing conversation on product ID margins. They were quite strong in Q3. Q4 kind of dips back to that Q2 level despite similar revenues. I know you mentioned in your script about the retrofit program. Speaker 600:24:04Can you kind of explain what was going on there and what we should think about for margins in that segment as we head into next year? Speaker 200:24:14Yes. Well, you don't really have didn't have a really release exactly on that. But there was an adjustment that David could maybe talk about there in Q4. But setting that aside, what we're looking at as we go into this year is that should also those margins should be increasing because we're looking at more of those T2C and your other children related products coming back online as we move through this year. And that helps drive the supplies revenue, which obviously helps growth, but also helps on the margin side of things. Speaker 200:24:49David, do you want to add anything to that? Speaker 300:24:53Yes. We did have some inventory adjustments at Astra Machine in the 4th quarter that sat on the margins there a little bit. Obviously, it was that's not something that's going to recur. So we think that the margins, the mix moving forward certainly will should improve from what happened in the 4th quarter. Speaker 500:25:39The next question is from George Melas from MKH Management. Please go ahead. Speaker 700:25:47Thank you, operator. Hi, Greg and David. The previous caller asked exactly my question. So I don't have any other. I'm sorry. Speaker 700:25:57Thank you. Speaker 200:26:00Okay. All right. Good catching up with you. Speaker 700:26:02Okay. Speaker 500:26:05The next question is from Dennis Scannell from ROTHENBERGER Capital. Please go ahead. Speaker 800:26:13Yes. Good morning, Greg and David. And just echoing what everybody else has said, really nice quarter and nice end to the end of the year, nice to see this rebound. So my question is also similar to the previous two questionnaires. So but maybe to get a little granular or frame it a little differently. Speaker 800:26:35So QuickLabel in the Q3 by my numbers did I'm sorry, product identification did 18.1% operating margins, I think the highest I've ever seen. And then we're 12% in the 4th quarter. And David, you said that maybe there were some inventory adjustments at Astromachining. I know historically the group has been as high as I think 14%. So kind of on a go forward basis, can we look more at the high teens for this business like what we showed in the Q3? Speaker 800:27:10Were there some unusual things going on in the Q3 that make that kind of an unrealistic expectation. Speaker 200:27:22So I'll just answer in general, maybe David can be more specific about it. But yes, the inventory adjustment that he mentioned had a big impact on it. And if when you average that out, you get more into the longer term trend that we're talking about getting back into the I think we're kind of in the 14% range before. So driving more towards kind of that mid teens, I think is a more realistic thing to think about as we go forward. Speaker 700:27:51Got it. Excellent. Well that's Yes, go ahead please David. Yes, I agree Speaker 300:27:55with that. That's the way I would have framed it. We said that you kind of take a look at the average there. Speaker 800:28:01Absolutely. No, that sounds great. Speaker 600:28:03Thank you. Thank you for Speaker 800:28:04the further clarity. That's great. Thank you. Speaker 200:28:08All right. Thanks, Dennis. Operator00:28:18Our next question is from Samir Patel for Askelen Capital Management. Your line is now open. Speaker 600:28:26Yes. Hey, I think we got cut off before. Sorry about that. I just wanted to follow-up and Speaker 700:28:32see if you Speaker 600:28:32had any comments on the M and A pipeline. Speaker 200:28:37Yes. Well, it's similar as we've talked about before. We've got some interesting opportunities in both T and M and the PI segment. And we'll see if we can finish any of those up. Typically, it's about 1% or 2% of the things that we look at that we end closing. Speaker 200:28:58But we're actively looking at it. As David mentioned, we're in great shape from a financial position to be able to pursue acquisitions in the size of the last one we did or even larger. So we're out there and hopefully we do something this year. And if not, that means we didn't find a good one here. So we're kind of prudent about that as well to make sure it's a good strategic fit and also that we don't overpay, of course. Speaker 600:29:27Makes sense. And again, sorry if you guys I'm not sure if you referenced this in the script, but David, we talked about your inventory levels and kind of cash flow. You gave guidance on EBITDA, but maybe if you could talk a little bit about sort of cash flow dynamics that you expect this year. I mean, do you expect inventories kind of to stay flattish at these levels to continue coming down? Any other kind of working capital or other items you call out? Speaker 300:29:57Inventory continues to be a focus, and it needs to be. We do see what I like to call areas of opportunity for improvement. We have had to make still some commitments to bring in inventory to support the supplies business in PI on primarily Inc, which has drawn off a lot of cash, would have otherwise been able to pay down more debt more recently. And we continue to have some commitments that we need to make on the T and M side of the business. I think as we move through the year, the combination of improvement on the inventory side and obviously the benefit of the higher margins are going to give us the ability to really go after the remaining portion of the revolving credit debt barring acquisitions, of course, which would cause us to take on more debt. Speaker 300:31:11And I think by the end of the year we'll have taken a very large bite out of what remains there and have the dry powder to do some things on the acquisition side. And that will probably be the pattern. It's been the pattern for a while and we hope that continues pay down the debt and redeploy it first to support operations and then to do acquisitions. Speaker 600:31:44Makes sense. Thanks. Operator00:31:50We currently have no further questions. So I will hand back over to Greg Woods to conclude. Speaker 200:31:58Great. Thank you, operator. So thanks everyone for joining us here this morning. In June, we'll be presenting at the East Coast Ideas Conference New York City. And we hope to see many of you there in person as well. Speaker 200:32:10And have a great weekend, everyone. Bye now.Read morePowered by