8-K
AstroNova, Inc. (ALOT)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
Date of report (Date of earliest event reported): December 7, 2020
ASTRONOVA, INC.
(Exact name of registrant as specified in its charter)
| Rhode Island | 0-13200 | 05-0318215 |
|---|---|---|
| (State or other jurisdiction<br> <br>of incorporation) | (Commission<br> <br>File Number) | (I.R.S. Employer<br> <br>Identification No.) |
| 600 East Greenwich Avenue | ||
| --- | ||
| West Warwick, RI 02893 | ||
| (Address of principal executive offices) (Zip Code) |
(401) 828-4000
Registrant’s telephone number, including area code
Not applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading<br> <br>Symbol(s) | Name of Each Exchange<br> <br>on which Registered |
|---|---|---|
| Common Stock, $0.05 Par Value | ALOT | NASDAQ Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On December 7, 2020, we issued a press release reporting the financial results for our fiscal third quarter ended October 31, 2020. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information contained in Item 2.02 of this report and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
| Item 9.01 | Financial Statement and Exhibits. |
|---|---|
| (d) | Exhibits |
| --- | --- |
| Exhibit<br>No. | Exhibit |
| --- | --- |
| 99.1 | Press Release dated December 7, 2020 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ASTRONOVA, INC. | ||
|---|---|---|
| Dated: December 7, 2020 | By: | /s/ David S. Smith |
| David S. Smith | ||
| Vice President, Chief Financial Officer and Treasurer |
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EX-99.1
Exhibit 99.1
AstroNova Reports Third-Quarter Fiscal 2021 Financial Results
| • | Bookings of $27.9 million |
|---|---|
| • | Backlog of $23.2 million |
| --- | --- |
| • | Revenue of $28.0 million |
| --- | --- |
| • | Operating income of $0.4 million |
| --- | --- |
| • | Net income of $0.0 million, or $0.00 per diluted share |
| --- | --- |
| • | EBITDA of $1.7 million, or 6.1% of revenue |
| --- | --- |
WEST WARWICK, R.I. — December 7, 2020 — AstroNova, Inc. (NASDAQ: ALOT), a global leader in data visualization technologies, today announced financial results for the fiscal 2021 third quarter ended October 31, 2020.
“Our Product Identification segment delivered both revenue and margin improvements in the quarter while Test & Measurement continued to reflect the effects of the Boeing 737 MAX grounding and COVID-19 on the commercial aerospace industry,” said Greg Woods, AstroNova’s President and Chief Executive Officer. “Overall performance was aided by continuous improvement initiatives and reduced operating expenses. During the quarter we continued to invest in new products and technologies to support growth across our businesses.
“In Product Identification, strong demand from our TrojanLabel^®^, QuickLabel^®^ and GetLabels^®^^^product lines drove year-on-year and sequential growth in both revenue and operating profit,” Woods said. “Our product and technology innovations are attracting a broader base of customers to our color label and specialty printing systems. We are helping businesses across a wide spectrum of industries enhance efficiency, eliminate waste and increase brand recognition.
“In our Test & Measurement segment, growth in our defense business partly offset weakness in commercial aerospace caused by the external headwinds. Looking ahead, recent progress on the potential approval of multiple coronavirus vaccines, and the FAA’s November decision that cleared the 737 MAX for a return to service, bode well for the T&M segment as we move through fiscal 2022 and beyond,” Woods concluded.
Q3 FY 2021 Operating Segment Results
Product Identification segment revenue was $22.9 million, compared with $21.7 million in the prior-year period. Segment operating income was $3.5 million, or 15.4% of revenue, compared with $1.9 million, or 8.6% of revenue, in the prior year, reflecting both increased efficiencies and reductions in operating costs.
Test & Measurement segment revenue was $5.1 million, compared with $11.6 million in the same period of fiscal 2020, due to the continued grounding of the Boeing 737 MAX and rapid demand falloff in the aerospace industry related to COVID-19. The Test & Measurement segment recorded an operating loss of $0.8 million, or negative 14.7% of revenue, compared with segment operating income of $1.4 million, or 12.1% of revenue, in the comparable period of fiscal 2020, a direct result of declines in aerospace printer sales and adverse mix, despite lower manufacturing and operating costs.
Hardware revenue dropped to $7.7 million, compared with $12.2 million in the prior-year period due to Test & Measurement weakness. Supplies revenue was $18.0 million versus $17.7 million in the same period of fiscal 2020. Service/other revenue was $2.4 million, compared with $3.5 million a year earlier.
Q3 FY 2021 Results Summary
Revenue totaled $28.0 million, compared with $33.3 million in the year-earlier period, with a decline in Test & Measurement revenue partly offset by higher revenue in the Product Identification segment.
Gross profit was $9.7 million, or 34.7% of revenue, compared with $12.3 million, or 36.9% of revenue, in the same period of fiscal 2020. The decrease reflected lower revenue and less favorable product mix in the 2021 period, primarily in the Test & Measurement segment.
Operating expenses totaled $9.3 million, down 21.4% compared with $11.9 million in the third quarter of fiscal 2020, reflecting the Company’s cost-reduction actions.
Operating income was $0.4 million in the third quarters of fiscal 2021 and 2020.
Other expense included foreign exchange losses resulting from the weaker Euro and Danish Kroner on exposures in those currencies and higher interest expense.
Net income was $12,000, or $0.00 per share, compared with net income of $0.5 million, or $0.06 per diluted share, for the third quarter of fiscal 2020.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) were $1.7 million, compared with $2.0 million in the third quarter of fiscal 2020. EBITDA is a non-GAAP financial measure explained in greater detail below under “Use of Non-GAAP Financial Measure.” Please refer to the financial reconciliation table included in this news release for a reconciliation of EBITDA to net income for the fiscal third quarters ended October 31, 2020 and November 2, 2019.
Bookings were $27.9 million, compared with $32.6 million in the third quarter of fiscal 2020.
Backlog at October 31, 2020 was $23.2 million versus $20.8 million at the end of the fiscal 2020 third quarter.
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Recent Highlights
| • | AstroNova launched a range of new products that expanded its addressable market beyond label printing at the PACK<br>EXPO Connects 2020 international packaging tradeshow. These products included the TrojanLabel T2-C Print and Apply Solution that eliminates intermediate steps in the typical labeling process. Also demonstrated<br>were in-line barcode verification systems and label finishing systems. |
|---|---|
| • | AstroNova received an exclusive, multi-year commitment from a major North American air carrier to purchase the<br>Company’s ToughWriter brand of narrow-format flight deck printers for the carrier’s Boeing 737 aircraft. |
| --- | --- |
Q3 FY 2021Conference Call
AstroNova will discuss its third-quarter fiscal 2021 financial results in an investor conference call at 9:00 a.m. ET today. To participate on the conference call, please dial (800) 367-2403 (U.S. and Canada) or (334) 777-6978 (International) approximately 10 minutes prior to the start time and enter confirmation code 2309769.
You can hear a replay of the conference call from 12:00 p.m. ET Monday, December 7, 2020 until 12:00 p.m. ET on Monday, December 14, 2020 by dialing (888) 203-1112 (U.S. and Canada) or (719) 457-0820 (International). The passcode is 2309769. 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 Measure
In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), this news release contains the non-GAAP financial measure earnings before interest, taxes, depreciation, and amortization (EBITDA). AstroNova believes that the inclusion of this non-GAAP financial measure helps investors gain a meaningful understanding of changes in the Company’s core operating results, and also 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 EBITDA, 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. EBITDA also is used by the Company’s management to assist with their financial and operating decision-making.
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About AstroNova
AstroNova, Inc. (NASDAQ: ALOT), a global leader in data visualization technologies since 1969, designs, manufactures, distributes, and services a broad range of products that acquire, store, analyze, and present data in multiple formats. The Product Identification segment offers a complete line-up of labeling hardware and supplies, allowing customers to mark, track, and enhance their products’ appearance. The segment is comprised of three business units: QuickLabel^®^, the industry leader in tabletop digital color label printing; TrojanLabel^®^, an innovative leader for professional label presses; and GetLabels^™^, the premier supplier of label materials, inks, toners, ribbons, and adhesives, all compatible with the major printer brands. 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, which 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 and the cabin; and the Test and Measurement business unit, which offers a suite of products and services that acquire, record, and analyze electronic signal data from local and networked sensors. AstroNova is a member of the Russell Microcap^®^ 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, clearance of the 737 MAX to return to service, and the potential approval of a coronavirus vaccine, 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, 2020 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.
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ASTRONOVA, INC.
Condensed Consolidated Statements of Income
In Thousands Except for Per Share Data
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| October 31, 2020 | November 2, 2019 | October 31, 2020 | November 2, 2019 | |||||||||
| Net Revenue | $ | 28,017 | **** | $ | 33,318 | $ | 86,595 | **** | $ | 102,967 | ||
| Cost of Revenue | **** | 18,282 | **** | 21,021 | **** | 56,218 | **** | 64,454 | ||||
| Gross Profit | **** | 9,735 | **** | 12,297 | **** | 30,377 | **** | 38,513 | ||||
| Total Gross Profit Margin | **** | 34.7 | % | 36.9 | % | **** | 35.1 | % | 37.4 | % | ||
| Operating Expenses: | ||||||||||||
| Selling & Marketing | **** | 5,553 | **** | 6,944 | **** | 17,033 | **** | 20,122 | ||||
| Research & Development | **** | 1,412 | **** | 2,076 | **** | 4,845 | **** | 5,868 | ||||
| General & Administrative | **** | 2,353 | **** | 2,830 | **** | 7,214 | **** | 8,445 | ||||
| Total Operating Expenses | **** | 9,318 | **** | 11,850 | **** | 29,092 | **** | 34,435 | ||||
| Operating Income | **** | 417 | **** | 447 | **** | 1,285 | **** | 4,078 | ||||
| Total Operating Margin | **** | 1.5 | % | 1.3 | % | **** | 1.5 | % | 4.0 | % | ||
| Other Expense, net | **** | 437 | **** | 238 | **** | 459 | **** | 788 | ||||
| Income (Loss) Before Taxes | **** | (20 | ) | 209 | **** | 826 | **** | 3,290 | ||||
| Income Tax (Benefit) Provision | **** | (32 | ) | (247 | ) | **** | 379 | **** | 182 | |||
| Net Income | $ | 12 | **** | $ | 456 | $ | 447 | **** | $ | 3,108 | ||
| Net Income per Common Share - Basic | $ | 0.00 | **** | $ | 0.06 | $ | 0.06 | **** | $ | 0.44 | ||
| Net Income per Common Share - Diluted | $ | 0.00 | **** | $ | 0.06 | $ | 0.06 | **** | $ | 0.43 | ||
| Weighted Average Number of Common Shares - Basic | **** | 7,120 | **** | 7,047 | **** | 7,100 | **** | 7,013 | ||||
| Weighted Average Number of Common Shares - Diluted | **** | 7,185 | **** | 7,199 | **** | 7,137 | **** | 7,272 |
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ASTRONOVA, INC.
Balance Sheet
InThousands
(Unaudited)
| October 31, 2020 | January 31, 2020 | |||||
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| CURRENT ASSETS | ||||||
| Cash and Cash Equivalents | $ | 9,603 | **** | $ | 4,249 | |
| Accounts Receivable, net | **** | 15,662 | **** | 19,784 | ||
| Inventories, net | **** | 30,868 | **** | 33,925 | ||
| Prepaid Expenses and Other Current Assets | **** | 2,769 | **** | 2,193 | ||
| Total Current Assets | **** | 58,902 | **** | 60,151 | ||
| PROPERTY, PLANT AND EQUIPMENT | **** | 50,252 | **** | 48,046 | ||
| Less Accumulated Depreciation | **** | (38,308 | ) | (36,778 | ) | |
| Property, Plant and Equipment, net | **** | 11,944 | **** | 11,268 | ||
| OTHER ASSETS | ||||||
| Intangible Assets, net | **** | 22,413 | **** | 25,383 | ||
| Goodwill | **** | 12,466 | **** | 12,034 | ||
| Deferred Tax Assets | **** | 5,099 | **** | 5,079 | ||
| Right of Use Asset | **** | 1,436 | **** | 1,661 | ||
| Other Assets | **** | 1,049 | **** | 1,088 | ||
| TOTAL ASSETS | $ | 113,309 | **** | $ | 116,664 | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
| CURRENT LIABILITIES | ||||||
| Accounts Payable | $ | 4,825 | **** | $ | 4,409 | |
| Accrued Compensation | **** | 2,749 | **** | 2,700 | ||
| Other Liabilities and Accrued Expenses | **** | 3,481 | **** | 4,711 | ||
| Current Portion of Long-Term Debt | **** | 4,984 | **** | 5,208 | ||
| Revolving Credit Facility | **** | — | **** | 6,500 | ||
| Current Portion of Royalty Obligation | **** | 2,000 | **** | 2,000 | ||
| Current Liability – Excess Royalty Payment Due | **** | 147 | **** | 773 | ||
| Deferred Revenue | **** | 313 | **** | 466 | ||
| Total Current Liabilities | **** | 18,499 | **** | 26,767 | ||
| NON-CURRENT LIABILITIES | ||||||
| Long-Term Debt, net of current portion | **** | 8,488 | **** | 7,715 | ||
| Royalty Obligation, net of current portion | **** | 6,624 | **** | 8,012 | ||
| Long-Term Debt - PPP Loan | **** | 4,422 | **** | — | ||
| Lease Liability, net of current portion | **** | 1,105 | **** | 1,279 | ||
| Other Long-Term Liabilities | **** | 657 | **** | 1,081 | ||
| Deferred Tax Liabilities | **** | 476 | **** | 435 | ||
| TOTAL LIABILITIES | **** | 40,271 | **** | 45,289 | ||
| SHAREHOLDERS’ EQUITY | ||||||
| Common Stock | **** | 521 | **** | 517 | ||
| Additional Paid-in Capital | **** | 57,894 | **** | 56,130 | ||
| Retained Earnings | **** | 49,248 | **** | 49,298 | ||
| Treasury Stock | **** | (33,568 | ) | (33,477 | ) | |
| Accumulated Other Comprehensive Loss, net of tax | **** | (1,057 | ) | (1,093 | ) | |
| TOTAL SHAREHOLDERS’ EQUITY | **** | 73,038 | **** | 71,375 | ||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 113,309 | **** | $ | 116,664 |
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ASTRONOVA, INC.
Revenue and Segment Operating Profit
In Thousands
(Unaudited)
| Revenue | Segment Operating Profit (Loss) | Revenue | Segment Operating Profit (Loss) | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | ||||||||||||||||
| October 31,2020 | November 2,<br>2019 | October 31,2020 | November 2,<br>2019 | October 31,2020 | November 2,<br>2019 | October 31,2020 | November 2,<br>2019 | ||||||||||||
| Product Identification | $ | 22,898 | $ | 21,749 | $ | 3,521 | **** | $ | 1,880 | $ | 66,907 | $ | 67,484 | $ | 9,813 | **** | $ | 6,990 | |
| Test & Measurement | **** | 5,119 | 11,569 | **** | (751 | ) | 1,397 | **** | 19,688 | 35,483 | **** | (1,314 | ) | 5,533 | |||||
| Total | $ | 28,017 | $ | 33,318 | **** | 2,770 | **** | 3,277 | $ | 86,595 | $ | 102,967 | **** | 8,499 | **** | 12,523 | |||
| Corporate Expenses | **** | 2,353 | **** | 2,830 | **** | 7,214 | **** | 8,445 | |||||||||||
| Operating Income | **** | 417 | **** | 447 | **** | 1,285 | **** | 4,078 | |||||||||||
| Other Expense, net | **** | 437 | **** | 238 | **** | 459 | **** | 788 | |||||||||||
| Income (Loss) Before Income Taxes | **** | (20 | ) | 209 | **** | 826 | **** | 3,290 | |||||||||||
| Income Tax (Benefit) Provision | **** | (32 | ) | (247 | ) | **** | 379 | **** | 182 | ||||||||||
| Net Income | $ | 12 | **** | $ | 456 | $ | 447 | **** | $ | 3,108 |
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ASTRONOVA, INC.
Reconciliation of Net Income to EBITDA
Amounts in Thousands
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| October 31, 2020 | November 2, 2019 | October 31, 2020 | November 2, 2019 | |||||||||
| Net Income – GAAP | $ | 12 | **** | $ | 456 | $ | 447 | **** | $ | 3,108 | ||
| Interest Income | **** | (3 | ) | (1 | ) | **** | (6 | ) | (4 | ) | ||
| Interest Expense | **** | 286 | **** | 206 | **** | 707 | **** | 513 | ||||
| Income Tax Expense | **** | (32 | ) | (247 | ) | **** | 379 | **** | 182 | |||
| Depreciation/Amortization | **** | 1,438 | **** | 1,550 | **** | 4,572 | **** | 4,692 | ||||
| EBITDA | $ | 1,701 | **** | $ | 1,964 | $ | 6,099 | **** | $ | 8,491 |