AstroNova Q1 2027 Earnings Results & Report

AstroNova EPS Results

• Actual EPS: $0.19
• Consensus EPS: $0.05
• Beat/Miss: Beat by +$0.14
• One Year Ago EPS: -$0.05

AstroNova Revenue Results

• Actual Revenue: $39.36 million
• Expected Revenue: $30.67 million
• Beat/Miss: Beat by +$8.69 million
• YoY Revenue Growth: N/A

AstroNova (NASDAQ:ALOT) is a technology company that designs, manufactures and distributes specialty equipment used for data acquisition, recording, printing and related information-management applications. The company serves customers in aerospace, defense, transportation, industrial and other markets where reliable data capture and documentation are important.

AstroNova’s product portfolio includes test and measurement systems that record and analyze physical and electrical parameters, as well as airborne printing systems and flight-deck printers used in commercial and military aircraft. Its aerospace products are designed for applications such as flight-data recording, cockpit documentation and aircraft systems monitoring. The company also provides specialty printers, consumables and related products for industrial and other demanding environments.

Founded in 1969 and originally known as Astro-Med, Inc., the company adopted the AstroNova name in 2014. Based in West Warwick, Rhode Island, AstroNova serves customers in the United States and international markets through direct sales, distributors and other channel partners. Gregory A. Woods serves as the company’s president and chief executive officer.

AstroNova Q1 2027 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Revenue and profitability improved in the quarter, with consolidated revenue up over 4% to $39.4 million and adjusted EBITDA margin expanding to 10.5% as gross margin rose sharply.
• Positive Sentiment: Aerospace was the key growth engine, with sales up 16.3% year over year, commercial aircraft sales up 46%, and orders jumping to a 147% book-to-bill ratio.
• Positive Sentiment: Product ID showed operational progress even as revenue declined modestly, with operating income more than doubling and orders increasing year over year as the company transitions to newer platforms.
• Positive Sentiment: Cash generation and balance sheet leverage improved, as the company produced $3 million of operating cash flow, reduced debt to $36 million, and lowered net debt leverage to 2.6x.
• Positive Sentiment: Backlog and future margin support look constructive, with total orders up 33%, backlog at $32.4 million, and management highlighting the expected expiration of a royalty obligation that should add about $2 million of annualized gross profit starting in Q4.

Presentation

[Operator]

Welcome to AstroNova's first quarter fiscal year 2027 financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Deb Pawlowski, Investor Relations. Thank you. You may begin.

[Deborah Pawlowski, Investor Relations at AstroNova]

Thank you. Good morning, everyone. We appreciate your interest in AstroNova. With me are Jorik Ittmann, our President and Chief Executive Officer, and Tom DeByle, our Chief Financial Officer. You should have a copy of the earnings release that crossed the wires after market close, as well as the slide deck for today's call. If you do not, you can find both on the investor relations section of our website. Please turn to slide two for our cautionary statement.

[Deborah Pawlowski, Investor Relations at AstroNova]

As a reminder, during this call, we may make forward-looking statements about our current plans, beliefs, and expectations. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. These risks and uncertainties are described in today's earnings release and in our SEC filings, which are available on our website and at sec.gov.

[Deborah Pawlowski, Investor Relations at AstroNova]

We do not undertake any obligation to update these forward-looking statements. We will also refer to certain non-GAAP financial measures. We believe these measures provide investors with additional insight into our core operating performance. However, they should not be considered in isolation or as a substitute for GAAP results. Reconciliations of non-GAAP to GAAP measures are included in the tables accompanying today's release and slide presentation. With that, please turn to slide three, and I'll hand the call over to Jorik to discuss the quarter and our progress. Jorik?

[Jorik Ittmann, President and CEO at AstroNova]

Thank you, Debbie, and good morning, everyone. We had a solid start to fiscal 2027, continuing the momentum from the second half of last year as we drive greater sales, marketing, and operating discipline. First quarter revenue grew over 4%, primarily due to the strong aerospace performance, while margins also expanded nicely, resulting in an adjusted EBITDA margin of 10.5%. Our bookings grew 32.6%, also driven by aerospace, and our Product ID order rate is averaging up on a trailing 12-month basis.

[Jorik Ittmann, President and CEO at AstroNova]

Aerospace was the primary driver of our first quarter results. The predominance of ToughWriter shipments and strong industry tailwinds are delivering growth and profitability. Commercial aircraft build rates are projected to increase over the next few years, and we have captured a significant share of that opportunity with our ToughWriter printers.

[Jorik Ittmann, President and CEO at AstroNova]

We're also working to improve our aftermarket service processes to increase throughput and capture more of that attractive business. In Product ID, we're making good progress. Although revenue was slightly down from the prior year period, operating income doubled. Higher and sustained sales of certain legacy products helped offset the impact of the ongoing transition to our newer direct to packaging printer platform.

[Jorik Ittmann, President and CEO at AstroNova]

This, along with improving productivity and better cost control, supported margin expansion. The comprehensive settlement agreement announced in May resolved the arbitration and related proceedings tied to the Mtex acquisition and mutually discharged all liabilities arising from related agreements. This removes a source of uncertainty and distraction and allows us to stay focused on execution, customer service, and realizing the strategic value of the platform within Product ID. We continue to make investments in the team to sustain our momentum.

[Jorik Ittmann, President and CEO at AstroNova]

We have recently added a global sales director who is reshaping our channels to market. While we have strong channel partners, they are not aligned with the markets we are targeting. As discussed last quarter, the life sciences, chemical, and industrial markets value the technical capabilities and quality of our printers and labels. In these markets, we're a critical element to address regulatory requirements, safety, and longevity.

[Jorik Ittmann, President and CEO at AstroNova]

We also have added a global operations director, adding much needed talent to take a critical eye at our manufacturing processes and footprint. As you know, the board is evaluating a range of potential strategic alternatives to maximize shareholder value. That process is ongoing. We will not speculate on potential outcomes, timing, or specific alternatives. We do not intend to comment further unless and until the board approves a specific course of action or disclosure is otherwise required.

[Jorik Ittmann, President and CEO at AstroNova]

At the same time, remain fully focused on running the business, improving performance, and executing the strategy that is driving better results across both segments. With that, please turn to slide four. I will hand the call over to Tom to review the financials in more detail. Tom?

[Tom DeByle, CFO at AstroNova]

Thank you, Jorik. Good morning, everyone. As shown on the slide, consolidated revenue increased to $39.4 million in the quarter from $37.7 million a year ago and from $37.5 million in the fourth quarter. Tariff mitigation actions contributed approximately $0.7 million to revenue in the quarter. Foreign currency translation provided a $0.6 million benefit.

[Tom DeByle, CFO at AstroNova]

Aerospace was a clear driver, with sales up 16.3% year-over-year to $13.3 million. Commercial aircraft sales increased 46%, supported by increasing build rates. We also had strength in regional and business jet aircraft, resulting in hardware revenue increasing $2.5 million, or 38%, year-over-year. In Product Identification, revenue was down modestly, but underlying trends are encouraging. Desktop labeling revenue grew sequentially.

[Tom DeByle, CFO at AstroNova]

Aftermarket revenue remained approximately 82% of segment sales, and orders were up year-over-year. The direct-to-package business remains in transition from our legacy platform to newer products. While this transition affected our first quarter revenue, we believe it positions us better over the long term with a strong technology platform and a clearer roadmap for our customers. Please turn to slide five.

[Tom DeByle, CFO at AstroNova]

Gross profit increased to $14.4 million from $12 million in the prior year quarter, and gross margin expanded 490 basis points to 36.6%. On an adjusted basis, gross margin was 36.9%, up 410 basis points year-over-year, reflecting Aerospace volume, better mix, and ongoing operational improvements. Turning to slide six, higher gross profit combined with cost containment initiatives result in an operating income increasing $1 to 1.6 million.

[Tom DeByle, CFO at AstroNova]

While operating expenses included higher legal and professional fees, we still delivered a substantial improvement in profitability. Non-GAAP operating income increased 70% to $2.6 million. Aerospace non-GAAP operating income was $3.4 million, or 25.6% of revenue, and Product Identification non-GAAP operating income more than doubled year-over-year. Turning to slide seven, our progress has translated to an improving bottom line.

[Tom DeByle, CFO at AstroNova]

Net income increased by $0.7 million, or $0.08 per diluted share, compared with the net loss in the prior year period. This also reflects lower interest expense, which decreased by $0.2 million year-over-year to $0.7 million as a result of lower outstanding debt. Non-GAAP net income was $1.4 million, or $0.19 per diluted share. Adjusted EBITDA increased to $4.1 million, and adjusted EBITDA margin improved to 10.5%, reflecting both stronger underlying performance and disciplined cost management.

[Tom DeByle, CFO at AstroNova]

If you turn to slide eight, I'll review cash flow, debt reduction, and liquidity. We generated $3 million of cash from operations, reduced debt by $1.7 to 36 million, and ended the quarter with $17.4 million in liquidity, including $4.7 million in cash and cash equivalents and $12.7 million of borrowing capacity on our revolver.

[Tom DeByle, CFO at AstroNova]

Stronger cash earnings were partially offset by higher working capital requirements due to the timing of receivable and inventories needs to support growth. Capital expenditures were only $36,000 in the quarter, which resulted in a free cash flow of $3 million. Debt was $36 million at the end of the quarter, down from $37.7 million at fiscal year-end and $44.8 million a year ago.

[Tom DeByle, CFO at AstroNova]

Our net debt leverage ratio improved to 2.6x , well inside our covenant threshold. Overall, we are pleased with the continued progress we are making in improving profitability, generating cash, and strengthening our balance sheet. Turning to slide nine, total orders in the quarter were $46.3 million, up 33% over the prior year period, producing a book-to-bill ratio of 118%. Total backlog ended the quarter at $32.4 million.

[Tom DeByle, CFO at AstroNova]

Growth in orders was also driven by aerospace, which had orders of $19.5 million and a book-to-bill ratio of 147%. Aerospace backlog at the end of the quarter was $18.2 million, more than double the prior year level. Product Identification orders increased to $26.8 million. Backlog rose sequentially to $14.2 million, our go-to-market strategy continues to gain traction in the verticals where our solutions are the most differentiated and the customer relationships tend to be the stickiest.

[Tom DeByle, CFO at AstroNova]

Our orders and backlog trends, along with customer feedback, provide good visibility and support confidence in the direction of the business. With that, please turn to slide 10, I'll hand the call back to Jorik to conclude our comments. Jorik?

[Jorik Ittmann, President and CEO at AstroNova]

Thank you, Tom. We are encouraged by the start to fiscal 2027 and believe the business is moving the right direction. In aerospace, we continue to see favorable demand trends and the benefit of the ToughWriter transition. In Product ID, our focus remains on converting pipeline into revenue growth, improving operational consistency, and supporting the migration to our new technology platforms while building on the traction we are seeing in our target verticals.

[Jorik Ittmann, President and CEO at AstroNova]

Looking ahead, our positive outlook is supported by strong aerospace demand, improving execution in Product ID, growing backlog, and the anticipated expiration of a major royalty obligation in the third quarter of fiscal 2027. This will provide approximately $2 million of annualized gross profit benefit beginning in the fourth quarter. As we move through the year, we remain committed to creating value for shareholders.

[Jorik Ittmann, President and CEO at AstroNova]

That includes continuing to execute our operating plan while the board evaluates strategic alternatives. With improving margins, stronger backlog, and a continued debt reduction, AstroNova is better positioned to deliver more consistent and a resilient performance. With that, operator, we're ready to open the line for questions.

[Operator]

Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. We will pause for a brief moment to see if there's any questions. There are no questions at this time. I would like to turn the call back over to management for closing remarks.

[Jorik Ittmann, President and CEO at AstroNova]

Thank you, everyone. I mean, we truly appreciate your support going through this journey. To all the employees, thank you for your hard work and dedication. It is truly appreciated. Thank you.

[Operator]

Thank you. This will conclude today's conference. You may disconnect at this time. Thank you for your participation.

Participants

Executives

• Deborah Pawlowski, Investor Relations
• Jorik Ittmann, President and CEO
• Tom DeByle, CFO