AstroNova Reports Strong Financial Results for the Second Quarter of Fiscal 2022
Commercial Air Travel’s Continued Recovery and the Product Identification Segment’s Solid Performance Drive Sequential and Year-Over-Year Growth
Second-Quarter Fiscal 2022 Summary
- Bookings of $30.6 million, up 18% year-over-year
- Revenue of $29.8 million, up 8% year-over-year
- Backlog of $24.3 million
- GAAP operating income of $3.5 million
- Non-GAAP operating income of $1.3 million
- GAAP net income of $7.0 million, or $0.96 per diluted share, including $0.83 per diluted share in CARES Act benefits
- Non-GAAP net income of $978,000, or $0.13 per diluted share, compared with break-even results in the prior year’s second quarter
- Adjusted EBITDA of $9.2 million, or 30.8% of revenue
- Excluding CARES Act benefits, Adjusted EBITDA of $2.6 million or 8.7% or revenue
- Company anticipates sequential and year-over-year top-line growth in the second half of fiscal 2022
WEST WARWICK, R.I.--(BUSINESS WIRE)--AstroNova, Inc. (NASDAQ: ALOT), a global leader in data visualization technologies, today announced financial results for the fiscal 2022 second quarter ended July 31, 2021.
“We expect to report year-over-year and sequential top-line growth for the second half of fiscal 2022”Tweet this
“We reported year-over-year and sequential revenue growth in the second quarter in both the Test & Measurement and Product Identification segments, as we capitalized on an improved demand picture across the business,” said Gregory A. Woods, President and Chief Executive Officer of AstroNova. “In the Test & Measurement segment, revenue from hardware, supplies, and parts and repairs all increased as air passenger traffic continued to rebound. We also saw solid contributions across the Product Identification product line, with another strong quarter from the T3-OPX wide-format durable direct-to-package printing system. We performed particularly well given the ongoing global supply chain constraints and continuing COVID-19 headwinds.”
“We expect to report year-over-year and sequential top-line growth for the second half of fiscal 2022,” continued Woods. “The aerospace market is recovering a bit more quickly than we had anticipated, and we expect continued improved demand in the Product Identification segment. At the same time, we recognize the uncertainty caused by supply chain constraints and the continuing pandemic. Looking further ahead, we believe that we are well positioned to capitalize on many growth opportunities across both our Test & Measurement and Product Identification segments when markets fully recover.”
CARES Act Benefits
During the second quarter of this fiscal year, the principal and interest were forgiven on the Paycheck Protection Program (PPP) loan AstroNova received last year. In addition, the Company became eligible for an Employee Retention Credit (ERC) authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. In total for the second quarter, these two items (the CARES Act benefits) benefited net income by $6.0 million and earnings per diluted share by $0.83.
Q2 FY 2022 Operating Segment Results
Product Identification segment revenue in the second quarter of fiscal 2022 increased 8.6% to $23.5 million, with gains in both hardware and supplies, versus $21.6 million in the prior-year period. GAAP segment operating income was $4.4 million, or 18.8% of revenue, compared with $3.1 million, or 14.5% of revenue, in the prior year. On a non-GAAP basis, excluding the CARES Act benefits, segment operating income in the second quarter of fiscal 2022 was $3.0 million, or 12.7% of revenue.
Test & Measurement segment revenue in the second quarter of fiscal 2022 was $6.4 million, compared with $6.0 million in the same period of fiscal 2021. The Test & Measurement segment recorded GAAP operating income of $1.7 million, or 26.9% of revenue, compared with a segment operating loss of $0.4 million, or negative 6.8% of revenue, in the comparable period of fiscal 2021. Non-GAAP segment operating income in the second quarter of fiscal 2022, excluding the CARES Act benefits, was $908,000, or 14.3% of sales, helped by lower manufacturing costs and operating expenses versus the year-earlier period, as well as a change in amortization for aerospace-related intangibles that resulted in an additional $587,000 in operating profit. This is the best result since the second half of fiscal 2020, when revenue was significantly higher.
Q2 FY 2022 Results Summary
Revenue for the second quarter of fiscal 2022 totaled $29.8 million, up 8% compared with $27.7 million in the year-earlier period.
GAAP gross profit for the second quarter of fiscal 2022 was $12.7 million, or 42.6% of revenue, compared with $9.8 million, or 35.4% of revenue, in the same period of fiscal 2021. Non-GAAP gross profit in the second quarter of fiscal 2022, excluding the CARES Act benefits, was $11.1 million, or 37.1% of revenue, up 170 basis points from the gross profit in the same period of the prior year. The increase compared with the same quarter last year reflects higher revenue and the impact of favorable product mix.
GAAP operating expenses for the second quarter of fiscal 2022 totaled $9.3 million, down approximately 3.3% compared with $9.6 million in the second quarter fiscal 2021. On a non-GAAP basis, excluding the CARES Act benefits, operating expenses for the second quarter of fiscal 2022 were $9.8 million, primarily due to higher wages and benefits compared with the prior-year second quarter, when COVID-related furloughs and work-share programs were in effect.
Other income of $4.3 million included a $4.5 million gain, related to the forgiveness indebtedness income related to the PPP loan.
GAAP net income for the second quarter of fiscal 2022 was $7.0 million, or $0.96 per diluted share, compared with net income of $3,000, or $0.00 per diluted share, in the second quarter of fiscal 2021. On a non-GAAP basis, excluding the CARES Act benefits, net income for the second quarter of fiscal 2022 was $978,000, or $0.13 per diluted share.
Earnings before interest, taxes, depreciation and amortization (EBITDA) were $8.7 million, compared with $2.4 million in the second quarter of fiscal 2021. Second-quarter fiscal 2022 EBITDA, excluding the CARES Act benefits, was $2.1 million, or 7.2% of revenue. Adjusted EBITDA was $9.2 million, or 30.8% of revenue, and $2.6 million, or 8.7% of revenue, excluding the effect of the CARES Act benefits. This compares with Adjusted EBITDA of $3.0 million, or 10.7% of revenue, for the comparable period of fiscal 2021.
Non-GAAP net income, non-GAAP earnings per diluted share, non-GAAP gross profit, non-GAAP operating expenses, non-GAAP segment operating income, EBITDA, EBITDA excluding the effect of the PPP loan forgiveness and ERC, Adjusted EBITDA and Adjusted EBITDA excluding the CARES Act benefits are non-GAAP financial measures explained in greater detail below under “Use of Non-GAAP Financial Measures.” Please refer to the financial reconciliation table included in this news release for a reconciliation of non-GAAP measures to the closest comparable GAAP measures for the fiscal second quarters ended July 31, 2021 and August 1, 2020.
Bookings for the second quarter of fiscal 2022 were $30.6 million, compared with $25.3 million in the second quarter of fiscal 2021.
Backlog at July 31, 2021 was $24.4 million versus $23.7 million on August 1, 2020.
Second-Quarter Fiscal 2022 Conference Call
AstroNova will discuss its second-quarter fiscal 2022 financial results in an investor conference call at 9:00 a.m. ET today. To participate on the conference call, please dial (800) 437-2398 (U.S. and Canada) or (929) 477-0577 (International) approximately 10 minutes prior to the start time and enter confirmation code 1881865.
You can hear a replay of the conference call from 12:00 p.m. ET Tuesday, September 14, 2021 until 12:00 p.m. ET on Tuesday, September 21, 2021 by dialing (888) 203-1112 (U.S. and Canada) or (719) 457-0820 (International). The passcode is 1881865. 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 Measures
In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), this news release contains the non-GAAP financial measures: non-GAAP net income, non-GAAP net income per diluted share, non-GAAP gross profit, non-GAAP operating expenses, non-GAAP segment operating income, earnings before interest, taxes, depreciation and amortization (EBITDA), EBITDA excluding the CARES Act benefits, and Adjusted EBITDA and Adjusted EBITDA excluding the CARES Act benefits. AstroNova believes that the inclusion of these non-GAAP financial measures 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 these measures, 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. These measures also are used by the Company’s management to assist with their financial and operating decision-making.
AstroNova, Inc. (NASDAQ: ALOT), a global leader in data visualization technologies since 1969, is focused on designing, manufacturing, distributing and servicing a broad range of products that acquire, store, analyze and present data in multiple formats. The Company's Product Identification segment offers a complete line-up of label and direct-to-package printing hardware and supplies, allowing customers to mark, track and enhance their products' appearance. 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. This segment 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 ****pit, the cabin and so much more. 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.