AstroNova, Inc.

Good day, and welcome to the Astronova's first fiscal quarter 2024 financial results conference call. Today's conference call is being recorded. 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, Ellen. Good morning, everyone, and thanks for joining us. Hosting this morning's call are Greg Woods, Astronova's 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 investors 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 speak only as of today, June 8, 2023. Astranova underdates 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 Astranova'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. Astranova 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 Astronova 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. Despite a macroeconomic climate that remains volatile, we delivered a solid first quarter performance. Our results highlighted our progress in three key areas. First, integrating the acquisition of Astra Machine. Second, maintaining disciplined expense management. And third, capitalizing on the continuing rebound of the commercial aviation market. Through the exceptional work of our team members around the globe, we generated double digit revenue growth in both our product identification and test and measurement segments. Our aggressive focus on implementing and maintaining cost discipline measures helped drive a 91% increase in operating income. This increase translated to 160 basis point improvement in operating margin. On the bottom line, net income grew to 800,000 or 11 cents per diluted share. compared with $400,000 or $0.06 per diluted share in the same period of fiscal 2023. Now let's look at each of the segments, beginning with product identification, which reported first quarter revenue of $25.1 million, nearly 16% higher than the year earlier period. The increase was driven by the addition of Astra Machines, which we acquired in August of last year. The integration of Astra Machines is proceeding on plan with a rapid level of cross-pollination in terms of engineering, manufacturing, and product development between our operations in West Warwick and Elk Grove Village. For example, our first jointly developed printer has already been completed and will be released later this month. At least one more additional jointly developed printer should be released before the end of the year. First quarter segment operating profit margin improved 350 basis points to 10%. reflecting the higher product ID revenue from a more favorable mix in the 2024 period. Going forward, we expect revenue mix to also benefit from the retrofitting of printers in the field that were sidelined since last year by a supplier-related ink quality issue as those units are restored and returned to full production. We expect this issue to be fully resolved before the end of the fiscal year. We kicked off our product ID trade show season last month with great responses at two large European trade shows in Germany, Interpac 2023 in Düsseldorf, and a couple weeks later, FESPA Global Print Expo in Munich. The shows featured a number of our latest products and accessories, and we were delighted by the number of high-quality leads we generated and the traction our new products are gaining with customers across an array of applications. Also last month, we hit another important milestone with the launch of our e-commerce site, giving customers the ability to research and purchase Astronova printers and supplies directly over the Internet. It's ideal for new customers searching for a solution, as well as existing customers that want to reorder or check their account order status. The site provides a convenient, user-friendly experience. Initial customer response has been very positive, and we will continue to add products and functionality to the site throughout the year. Turning to the test and measurement segments, Revenue increased 11% year over year to 10.3 million, driven by continuing improvement of the commercial aerospace market. Segment operating profit was up modestly, but margin was down 50 basis points to 20.1% of revenue. With the projected global demand for air travel in the coming decades, the outlook for our aerospace printers, supplies, and services is strong. Airbus anticipates 46,930 aircraft in service by 2041. up from 22,800 in 2020. A total of 39,490 of those are expected to be new deliveries, with 60% to support growth and 40% to replace aircraft that will be retired from service. Boeing likewise projects a massive jump in airline fleets over the next 18 years. Turning to the data acquisition portion of test and measurement segment, in addition to our core aerospace and defense programs, We have landed several new power generation monitoring projects due to the exceptional accuracy and performance of our data acquisition products. We look forward to growing this new segment in the coming quarters. Finally, we were pleased to see the company-wide bookings in the first quarter were up over 18%, 38.4 million. With further strengthening of our backlog, that totaled 38.7 million at quarter end. Backlog is up more than 32% year over year and more than 8% sequentially from the fiscal year end. Now, let me turn the call over to David for additional financial review.