AstroNova, Inc.

Please stand by. We're about to begin. Good day and welcome to the AstroNova's second quarter fiscal 2020 financial results conference call. Today's conference is being recorded. At this time, I would like to turn the call over to Mr. Scott Solomon from the company's investor relations firm, Sharon Merrill Associates. Sir, you may go ahead.

Thank you, Rochelle. Good morning, everyone, and thank you for joining us. Hosting this morning's call are Greg Woods, AstroNova's president and CEO, and David Smith, the company's chief financial officer. Greg will discuss the company's operating results. David will take you through the financials. Greg will make some concluding comments, and then management will be happy to take your questions. By now, you should have received a copy of the earnings release that was issued today. If you do not have a copy, please go to the Investors section of the AstroNova website, www.astronovainc.com. Please note that statements made today during today's call that are not statements of historical fact are considered forward-looking statements within the Private Securities Litigation Reform Act of 1934. These forward-looking statements are based on a number of 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, August 28, 2019. The company undertakes no obligation to update these forward-looking statements. For further 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-K and the other filings the company makes with the Securities and Exchange Commission. I'll now turn the call over to Greg.

Thank you, Scott. Good morning, everyone. Thank you for joining us on the call today. As outlined in this morning's earnings release, a confluence of short-term headwinds affected both our product identification and test and measurement segments. adversely impacting our expectations for revenue and margins in the quarter. These headwinds, however, do not alter our perspective on our overall growth strategy or the fundamentals of our strong positions in our served markets. In test and measurement, the ongoing grounding of the 737 MAX had a more pronounced effect than we had anticipated on revenue and margin mix in the quarter. In addition to lower revenue on new installs, The grounding is having repercussions on our aftermarket business as well. Retrofit printer upgrades and optional maintenance on older model aircraft are being delayed so those planes can be brought back into service to fill the gaps created by the grounding. The other dynamic at play in test and measurement during the quarter was an order release pushout related to a multi-year upgrade contract we were awarded for military flight deck printers and related networking gear. We now expect to fill that order in the second half of this year. Results in our product identification segment were mixed. Revenue increased in the quarter, but only modestly, due primarily to a few customer-specific issues in Asia that we associate partly with the macroeconomic climate in that region. From a global perspective, we were especially pleased with the continued growth of our Quick Label QL300 and Trojan Label T2C products throughout the second quarter. In addition to the ramp-up of those products, Our development investments have built up a strong pipeline of new products to ensure we maintain and extend our leadership position in our PI markets. Right at the end of the second quarter, we launched another significant new product, the QL120X. This is the first tabletop digital color label printer with a best-in-industry two-year warranty. Equipped with next-generation printed technology, the QL120X enables users to print three times more labels while using up to 35% less ink, making it fast, convenient, and cost-effective for virtually any production environment. We also continue to expand our global presence of our Quick Label and Trojan Label brands during the quarter with the opening of our ninth Innovation Technology Center in Kuala Lumpur, Malaysia. We now have ITCs in seven countries across four continents. During the second quarter, we exhibited our products at more than 25 trade shows worldwide. and in September, we will participate in the most significant events of the season, Pack Expo in Las Vegas, Label Expo Europe in Brussels, and FockPock in Germany. Historically, we've generated a very high level of leads and favorable customer response from these large-scale events. We're particularly looking forward to this show season because we will be launching some significant new additions to our product identification lineup at these shows. You'll be seeing announcements on those new offerings in the coming weeks. Turning to operational improvements, we made good progress on several fronts during the quarter. Our global IT upgrade program has now moved into the hardware upgrade phase where we have started replacing a substantial portion of our hardware infrastructure. We completed a record number of Kaizen improvement projects during the quarter as our AOS operational excellence initiatives drive down deeper into the company's various business units. On the organizational side, We've recently hired several key executives from the aerospace industry to further strengthen that portion of our business. We've still got a couple of spots we'd like to fill, but overall, this puts the right team in place to deliver high-quality, sustainable growth for the years ahead. Before I turn it over to David, let me reiterate something I said in this morning's earnings release, and that is that the temporary challenges we encountered in Q2 do not affect our positive long-term view are the strong underlying fundamentals of our business. We are managing the business for the long term. We are confident that we have the right strategy and processes in place to continue to deliver value to our shareholders. Now let me turn it over to David for the financial review.