AstroNova, Inc.

Good day and welcome to the Astronovus Fiscal Fourth Quarter and Full Year 2023 Financial Results Conference Call. Today's conference is being recorded. If you would like to ask a question during the Q&A portion of today's call, please do so by pressing start followed by one on your telephone keypad. I would now like to turn the conference over to Scott Solomon of the company's investor relations firm, Sharon Merrill Associates. Please go ahead, sir.

Thank you, Emily. Good morning everyone and thanks for joining us. Hosting this morning's call are Greg Woods, Astronomers President and Chief Executive Officer, and David Smith, Vice President and Chief Financial Officer. Greg will discuss the company's operating highlights. David will take you through the financials at a high level. 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 this morning. If you don't have a copy, please go to the investor's page of the AstroNova website, www.astronovainc.com. Please note that statements made on 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 1995. 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 seek only as of today, March 23, 2023. Astronova 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 other filings the company makes with the Securities and Exchange Commission. On today's call, management will be referring to non-GAAP financial measures. Ashtonova believes that the inclusion of these financial measures helps investors gain a meaningful understanding of the changes in the company's core operating results. It also helps investors who wish to make comparisons between Ashtonova and other companies on both a GAAP and a non-GAAP basis. A reconciliation of the non-GAAP financial measures to their most directly comparable GAAP measures is available in today's earnings release. And with that, I'll turn the call over to Greg.

Thank you, Scott. Good morning, everyone, and thank you for joining us. I'd like to begin by recognizing the great work of our team members across the globe in contributing to a profitable year for Astronova against the backdrop of a challenging macroeconomic environment. High inflation and geopolitical tensions created significant supply chain disruptions across our end markets throughout much of the year. However, our team remained focused on working through these issues and on meeting the needs of our customers. by continuing to drive performance initiatives to improve quality, delivery, cost efficiency, and growth. Overall, we grew 34% on our revenue in the fourth quarter to a record $39.9 million. The top line increase was attributable to gains in both segments, with product identification up 5.7 million, or 26%, to $28.1 million, and tested measurement up 4.4 million, or 61%, to nearly $11.8 million. While supply chains remain challenged for certain products, we have been able to resolve some of the more extreme supply chain issues we experienced over the past two years with notable improvement in the fourth quarter, particularly in our T&M segment. Compared to last quarter, our unshippable backlog of scheduled orders decreased by roughly $1 million. However, we still left about 1.1 million of scheduled orders that were unfilled at the end of the quarter, primarily in the T&M segment. Based on the work we are doing with our supply chain, we expect to continue to make progress improving our on-time shipments as we move through fiscal 2024. Looking at growth drivers by segment, test and measurement benefited from a combination of contractors within our aerospace product group which manufactures, markets, and services flight deck printers and electronics for commercial and defense customers. These factors included favorable pricing adjustment, greater cost efficiencies, and the ongoing production ramp-up in aircraft deliveries. In addition to hardware revenue, we've also seen further improvement in our supplies business from our maintenance, overhaul, and repair services all driven by increases in passenger air traffic and fleet utilization. Today, we produce and market a large range of flight deck printers, including models acquired from Milto, Ritech, and Honeywell, in addition to our own Tuffrider family of products. To further enhance our manufacturing efficiencies, we continue to upgrade and transition customers to our more advanced and feature-rich Tuffrider family of printers. Turning to the data acquisition portion of the test and measurement segment, we have won a number of design-ins for defense-related programs, and these agreements are presently working their way through the governmental procurement process. While exact timing is tough to predict, we're pleased to have been selected for these programs and look forward to keeping you updated on the progress of the awards as we move through fiscal 24. Based on current business conditions, we are excited about the outlook for our test and measurement segment in fiscal 2024. Switching over to the product identification segment, Q4 was the first full quarter with Astra Machine, which we acquired in August. While the acquisition is still in its early days, the business is performing very well and in line with our expectations as we advance through the integration process. In particular, We have already made good progress integrating products between our two sales channels. AstroMachine has historically produced good operating margins, and we are focused on further integration with our sales channels to grow the top line and drive additional profitability through better customer focus, operational improvements, and accelerated new product development. We remain excited and confident about the new component of our product identification business as it grows platform in the years ahead. By combining the resources of our joint research and development teams, we will soon introduce several new product offerings. Two of these offerings, which target current and prospective OEM customers, leverage much of the technology used in our very successful direct-to-package overprinting solutions. Separately, during the fourth quarter, we launched the production release of the QL-E100, our full-color label printer designed for small businesses just getting started with the in-house label printing, as well as larger enterprises that require a large number of distributed print stations throughout their facilities. Production shipments are underway and the initial customer response to this new solution has been very positive. The driver behind this introductory level printer launch is to deploy our unique full solution model to a wider audience, whereby customers new to in-house on-demand digital label printing can take full advantage of our combined easy-to-access printer with carefully matched supplies and service offerings. Before turning the call over to David, I'd just like to comment on our improving financial strength. Our balance sheet remains healthy, and we begin the new fiscal year on a solid financial footing with reduced leverage metrics at year-end. We continue to pursue the M&A portion of our growth strategy and are confident we will have plenty of capacity to execute the right strategic acquisitions. Our strong backlog and healthy order demand position gets us set for a continued execution on our strategic priorities. Powered by the Astronova operating system, the foundation of our continuous improvement strategy, we are excited about the opportunities to grow across the markets we serve. I'll now turn the call over to David for the financial review.