Transcript: AstroNova Fourth Quarter 2025 Earnings Call

AstroNova Q3 Fiscal 2026 Earnings Call Highlights

AstroNova (NASDAQ: ALOT) recently held its earnings call to discuss financial results for the third quarter of fiscal year 2026. Below is a comprehensive overview of the key points and performance metrics shared during the call.

Opening Remarks and Participants

The call began with an introduction from Deborah Pawlowski, Investor Relations, who welcomed participants and introduced the executive team: Yorick Itman, President and CEO, and Tom Debyle, CFO. Attendees were reminded that the discussion may include forward-looking statements subject to risks and uncertainties, as detailed in the company’s SEC filings and earnings materials available on the AstroNova investor relations website.

Business Performance Overview

Yorick Itman highlighted that the third quarter results reflect early progress in AstroNova’s transformation strategy. The company is prioritizing enhanced customer engagement, operational improvements, and a culture of accountability. Notable achievements this quarter include:

• Product ID Segment: Year-over-year revenue growth was driven by better execution and increased shipment cycles. The mill and sheet flat pack printer business saw a 14% rise in sales, aided by productivity gains. Updated direct-to-package overprint printers, including the redesigned AJ800, also contributed to higher sales. Legacy desktop label printer sales increased nearly 5% compared to Q3 last year and 6% over the previous quarter.
• Customer Engagement: The company is reconnecting with previous customers and gaining insights into sales cycles for new, higher-value printer platforms. Next-generation print solutions are being validated in customer environments, providing valuable feedback for further refinement.
• Aerospace Segment: AstroNova maintained its strong market position with major aircraft manufacturers. The transition to the TopRider product family is progressing well, with TopRider accounting for over 80% of flight deck printer shipments this quarter. Orders in aerospace increased 24% year-over-year, supported by improved production schedules at OEM partners.

Financial Results

Tom Debyle provided a detailed financial review:

• Gross Profit: $14.2 million for the quarter, up 3.5% year-over-year, with gross margin expanding by 240 basis points. Sequentially, gross margin improved by 400 basis points due to higher volumes and a better product mix.
• Product ID Operating Income: $1.9 million, consistent with the prior year. Adjusted operating income rose 50% to $2.9 million, representing 10.6% of sales.
• Aerospace Operating Income: $4.5 million, a 39% increase from last year, driven by cost reductions and favorable inventory adjustments. The shift toward Tuff Rider systems is expected to continue benefiting margins.
• Net Income and EBITDA: Net income was $0.4 million ($0.05 per share). Adjusted EBITDA reached $4.2 million, up 29% year-over-year, with a margin of 10.7% for the quarter.
• Cash Flow and Liquidity: Operating cash flow for the quarter was $3.4 million, reflecting strong earnings and reduced working capital needs. Capital expenditures year-to-date were $0.2 million, with full-year expectations below $0.5 million. The company refinanced its credit facility, extending maturity to 2028, consolidating foreign debt into U.S. dollars, and lowering principal payments. Total liquidity as of October 31, 2025, was $13.5 million, including $3.6 million in cash and $9.9 million available on the revolver.
• Debt Reduction: AstroNova paid down $3.2 million in debt during the quarter and has reduced total debt by $6.4 million year-to-date. The net debt leverage ratio stood at 3.38, comfortably below the lending agreement’s maximum.

Order Activity and Strategic Initiatives

Orders for the third quarter totaled $35.9 million, down $1.7 million from the previous year but stable sequentially. Aerospace order strength offset a softer quarter for Product ID, which was impacted by delays in renewing blanket orders. The company is actively engaging with customers to rebuild consistency and strengthen its pipeline.

AstroNova is executing several initiatives to drive profitability and growth:

• Fully implemented $3 million in annualized cost reductions, with benefits realized in Q3.
• Investments in new sales talent and digital marketing to expand qualified opportunities.
• Disciplined resource allocation and improved forecasting processes.
• Transition to an autonomous ink printhead platform for greater supply chain flexibility.
• Anticipated margin improvement in aerospace as a major royalty agreement expires in fiscal 2027.

Outlook

AstroNova reaffirmed its fiscal 2026 guidance, expecting full-year revenue between $149 million and $154 million, with fourth-quarter revenue projected at $36 million to $41 million. Adjusted EBITDA margin is forecasted in the 7.5% to 8.5% range. The company remains focused on building a stable, customer-centric organization and is confident in its ability to deliver improved results moving forward.

Q&A Session and Closing

The call concluded with an invitation for questions, but no questions were received. Management thanked participants and ended the session.

Summary of Key Points

• Q3 revenue growth driven by strong execution and increased shipments in Product ID.
• Aerospace segment maintained leadership, with TopRider printers comprising over 80% of flight deck shipments.
• Gross profit rose to $14.2 million, with notable margin expansion.
• Credit facility refinanced, extending maturity and improving financial flexibility.
• Annualized cost savings of $3 million fully realized; ongoing investments in sales and marketing.
• Fiscal 2026 guidance reiterated: $149–$154 million in revenue and 7.5–8.5% adjusted EBITDA margin.