AstroNova, Inc.

and welcome to the Astronova's Fiscal Fourth Quarter and Full-Year 2021 Financial Results Conference Call. Today's conference is being recorded. I would now like to turn the conference over to David Kaluzian of the company's investor relations firm, Sharon Merrill Associates. Please go ahead.

Thank you. Good morning, everyone, and thanks 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 comment on the financials. Greg will make 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 investor section of the Astronova website, www.astronovainc.com. Please note that statements made during today's call that are not statements of historical fact are considered forward-looking statements within the meaning of 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, March 25, 2021. 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 Astonova's annual report on Form 10-K and the other filings the company makes with the Securities and Exchange Commission. On today's call, management will be referring to the non-GAAP financial measure adjusted earnings before interest, taxes, depreciation, amortization, and share-based compensation, or adjusted EBITDA. Astronova believes that the inclusion of this measure helps investors gain a meaningful understanding of the 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 non-GAAP basis. A reconciliation of this non-GAAP measure to its most directly comparable GAAP measure is available in today's earnings release. And with that, I'll turn the call over to Greg.

Thank you, David. Good morning, everyone, and thank you for joining us. Overall, the Astronova team performed well in fiscal 2021 in spite of the significant challenges created by COVID-19 and the grounding of the Boeing 737 MAX aircraft. Amid these unprecedented challenges, We remain focused on the areas within our control. We move quickly to realign our workforce, reduce costs, and increase liquidity to ensure that we continue to make progress on our long-term strategic objectives. In our product identification segment, we adapted rapidly and launched a comprehensive digital marketing initiative with new interactive content and other tools to accommodate the new virtual environment in which our customers suddenly found themselves. The pandemic and the max grounding caused a nearly $20 million revenue drop in our strong gross margin test and measurement business. However, through a combination of focused expense reduction and increased efficiencies on a total company basis, AstraNova was able to post full year operating income of $2.4 million which is actually level with fiscal 2020, despite a 13% or $17.4 million overall decrease in revenue on a year-over-year basis. On the bottom line, we reported full-year net income of $1.3 million, down $475,000 from a year earlier. However, adjusted EBITDA increased by $825,000 year-over-year. Now turning to the segmental results, product identification turned in another strong quarter with revenue increasing more than 13% to $23.4 million and double-digit percentage growth across the board in hardware, supplies, and our services compared to last year's Q4. Full-year segmental revenue came in at $90.3 million, marking eight straight years of year-over-year growth. Product identification hardware revenue notched record highs for both the fourth quarter and fiscal year, and we shipped the highest number of color printers in over two years, driven in part by continued strong demand for the T3 OPX printer. With its launch last year, the T3 OPX opened up the adjacent product identification market known as direct-to-product printing. Its ability to print in full color on surfaces from folded boxes to paper bags to wooden planks and many others, the T3 OPX is the ideal product to meet the demand for a high-performance overprinting solution for brand owners and other customers across a range of end markets. Our printer sales drive our supplies business, so the record hardware sales we saw in FISLA 2021 portends well for our supplies business moving forward. The combination of higher revenue and cost efficiencies translated to gains in the PI segment operating profit margin for both the fourth quarter and the full year. Product margin for the fourth quarter was 13.2%, compared with 2.5% in the fourth quarter of 2020. It's worth noting that for the year, the segment posted an operating profit of 14.3%, which is a record for this segment. Turning now to our testing measurement revenue in the fourth quarter dropped to 6.1 million compared to 9.8 million in the same period of fiscal 2020 due to the adverse impacts of the continued grounding of the 737 max and the aerospace industry demand fall off due to the COVID-19 pandemic. However, in Q4, T&M revenue did increase 19% sequentially, quarter over quarter. That increase was in part due to a military aerospace shipment, but we are now seeing early signs of a pickup in the commercial aerospace business as well, especially in our repairs and supplies portion of that business. There are two main drivers to this recovery. One factor is the MAX's return to service in all major markets except China, and we're hopeful that China will come on board soon. And Boeing's max production rates are forecast to ramp up from the current 10 per month to 30 per month in the next year. Clearly, demand is moving in the right direction. The number of carriers placing max orders has been increasing in recent weeks, and there are now at least 13 airlines flying the max. The other factor is the increasing number of passengers returning to the skies due to the rollout of several vaccines. For instance, in the U.S., over 20% of the population has already received at least one vaccine dose, according to health officials. And while airlines are nowhere near returning to the pre-COVID levels yet, recent reports indicate that U.S. air travel has reached its highest level since the pandemic began. Now looking at geographic mix, domestic revenue accounted for approximately 56% of total revenue in the fourth quarter. compared with 63% or compared with 63 period for the same period in 2020. International revenue increased to 44% of total revenue in the fourth quarter of fiscal 2021, up from 37% a year earlier. We saw particular strength in EMEA, where we recently enhanced our marketing team. On a related note, We are also expanding our presence in China by opening an office in the southern port city of Guangzhou, complementing our location in Shanghai's pilot-free trade zone. Before handing the call to David, I want to first thank our team members around the globe for their dedication and commitment in fiscal 2021. Because of the critical role we play for the aerospace and medical industries, AstraNova was deemed an essential business. All of our global facilities have remained fully operational throughout the pandemic, incorporating all of the necessary health and safety precautions. From the outset, we've had no severe COVID-related incidents. That is a credit to our entire team, which over the past year has worked vigilantly to keep themselves and one another safe, allowing us to continue to meet the demands and requirements of our customers. Now let me turn the call over to David for the financial review.