Post on 21-May-2020
THE DATA VISUALIZATION TECHNOLOGY COMPANY
22nd Annual Needham Growth Conference
Greg Woods, President and CEODavid Smith, CFO
January 15, 2020
2
Safe Harbor and Non-GAAP Financial Measure Provisions
Information included in this presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements are not statements of historical fact, but rather reflect our current expectations concerning future events and results.
These statements may include the use of the words “believes,” “expects,” “intends,” “plans,” “anticipates,” “likely,” “continues,” “may,” “will” and similar
expressions to identify forward-looking statements. Such forward-looking statements involve risks, uncertainties and other factors, some of which are
beyond the Company’s control, which may cause the Company’s actual results, performance or achievements to be materially different from those
expressed or implied by such forward-looking statements. These risks, uncertainties, and factors include, but are not limited to, those factors set forth in
the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2019 and subsequent filings AstroNova makes with the Securities and
Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. Investors are cautioned not to unduly rely on such forward-looking statements when evaluating the information in
this presentation.
In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), this presentation contains the non-GAAP
financial measure EBITDA. The Company believes that this non-GAAP financial measure helps investors to 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 this non-GAAP measure, 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 are also
used by the Company’s management to assist with their financial and operating decision-making. Non-GAAP financial measures are not a substitute for
GAAP financial measures and may not be comparable to similarly titled measures of other companies.
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Data Visualization Technology
4
Revenue and Profitability
$94.7 $98.4 $113.4
$136.7 $141.0
$0
$20
$40
$60
$80
$100
$120
$140
$160
FY 2016 FY 2017 FY 2018 FY 2019 TTM Q3FY20
Revenue($ in millions)
$4.5 $4.4
$3.3
$5.7 $5.4
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
FY 2016 FY 2017 FY 2018 FY 2019 TTM Q3FY20
Net income ($ in millions)
$9.0 $9.2 $9.6
$14.4$13.1
$0
$4
$8
$12
$16
$20
FY 2016 FY 2017 FY 2018 FY 2019 TTM Q3FY20
EBITDA*($ in millions)
13.0% CAGR 8.2% CAGR 17.0% CAGR
* Please refer to the appendix in this presentation for a reconciliation of EBITDA to the nearest GAAP equivalent.
CAGR calculated FY 2016 through FY 2019
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Leading market positions and brands
Continuous improvement culture
Expanding global footprint
Robust product development pipeline
Recurring revenue > 50%
Track record of successful M&A
1
4
2
3
5
6
Investment Thesis
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OPERATIONAL EXCELLENCEGEOGRAPHIC EXPANSIONPRODUCT INNOVATION STRATEGIC M&A
Growth Playbook – 4 Key Elements
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Comprehensive Product PortfolioExecuting a common strategic vision across three lines of business
• Professional Digital Color Label Presses
• Specialty Printers
• Color Inkjet Label Printers
• Digital LED Toner (EP) Printers
• Thermal Transfer Printers
• Media, Inks, Toner and Supplies
• Label Design and Management Software
• Narrow-format Airborne Printers
• Wide-format AirbornePrinters
• Airborne Ethernet Switches
• Aviation Printer Paper and Supplies
• Global Aviation Repair Facilities
• Data Acquisition Systems
• Data Recorders and Printers
• I/O Modules
• Data Visualization and Analysis Software
• Thermal Paper and Supplies
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Market Profile and SegmentationEconomically diverse business with high recurring revenue
$90.4$50.9
Revenue by Segment – TTM Q3 FY20($ in millions)
Revenue by Type – TTM Q3 FY20($ in millions)
Product ID65%
Test & Measurement
35% $90.9
$49.3
$74.0 Supplies53%
Hardware
38%
$52.7
$13.5Service/other9%
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Expanding International Presence
Plus over 165 Dealers
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Worldwide Installed Base
Customers in 155 Countries
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AstroNova Operating SystemIt’s not just what we do, but how we do it
Continuous Improvement
Through operational excellence and lean initiatives, we
consistently strive to increase efficiency and enhance margins
Innovation
Stage-Gate methodology accelerates and streamlines the product development process
Building Value
Our customer-centric philosophy ensures we deliver superior quality, delivery, cost
and growth
One Global Team We work as a unified
organization in a data-driven environment that fosters mutual
trust and respect
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Operating Metrics
$5.9$6.3
$5.4
$8.7
$7.0
6.3% 6.4%4.8%
6.4%5.0%
0.0%
10.0%
20.0%
30.0%
40.0%
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
$9.0
$10.0
FY16 FY17 FY18 FY19 TTM Q3 FY20
Operating Income and Margin
Operating income Operating margin
($ in millions)
$287.7$315.5 $322.2
$365.4 $377.8
$21.0 $21.2 $14.7 $19.5 $20.7
$0.0
$100.0
$200.0
$300.0
$400.0
$500.0
FY16 FY17 FY18 FY19 TTM Q3 FY20
Revenue and EBIT per Employee
Revenue per Employee EBIT per Employee
($ in thousands)
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QL-300
CMYK+ White
Product Identification Segment
New Solutions Enhance Customers’ Capabilities
QL-120XIndustry-best
2-year warranty$67.1 $69.9
$81.7$86.8
$90.9
0%
20%
40%
60%
80%
100%
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
FY16 FY17 FY18 FY19 TTM Q3 FY20
Product ID Revenue
($ in millions)
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TrojanLabel Expands Addressable Product ID Market
• Manufacturer of digital color label presses and specialty printing systems
• Strong presence in EMEA and Asia
• Added 50 dealer partners worldwideDigital Color Label Printer Market
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Industry Spending
• Increasing demand for short runand versioned products
• Corrugated, cartons and flexible packaging
• Labels account for ~15% of total market
Source: Smithers Pira, Company estimates
2019 2024
$18.6billion
$31.6billion
Growth Opportunities in Digitally Printed Labels and Packaging
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Test & Measurement SegmentNew Printers and Data Acquisition Recorders
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Strategic Acquisitions in T&M Segment
$27.5 $28.6$31.7
$49.9 $49.3
0%
20%
40%
60%
80%
100%
$0
$10
$20
$30
$40
$50
$60
FY16 FY17 FY18 FY19 TTM Q3 FY20
T&M Segment Revenue
($ in millions)
Flight deck printer
Ethernet switch
Acquisition Year
Honeywell 2017
RITEC 2016
Miltope 2014
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Aircraft OEMs
Tier 1 integrators
Airline Direct
Addressing the Major Tiers of the Aerospace Value Chain
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0 500 1000 1500 2000
2019
2020
2021
B737 and A320 Estimated Annual Production Rate
B737 A320
1,440
1,356
1,284
12,700B737s and A320s currently in service
12,000Entering into service in next 10 years
Growth of Narrow-body Aircraft Market
Source: Customer estimates
Source: Customer estimates
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OPERATIONAL EXCELLENCE
Rigorously applying the
AstroNova Operating System
suite of lean business
management tools to
continuously improve our cost,
delivery, and quality across the
entire enterprise
GEOGRAPHIC EXPANSION
Identifying new markets where
our technology and products
represent a competitive
advantage, and building our
network of Innovation
Technology Centers
PRODUCT INNOVATION
Innovating new products and
expanding our relationships
with customers across our
Product Identification and Test
& Measurement segments
STRATEGIC M&A
Acquiring fairly-valued assets
that strengthen our core
competencies, extend our
technology advantage to new
end markets or add
complementary technologies
Growth Playbook – 4 Key Elements
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Investment Thesis
Leading market positions and brands
Continuous improvement culture
Expanding global footprint
Robust product development pipeline
Recurring revenue > 50%
Track record of successful M&A
1
4
2
3
5
6
Questions?
Appendix
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Q3 and YTD 2020 Financial Results Summary
In Thousands, Except for Per Share Data(Unaudited) Three Months Ended Nine Months Ended
Nov 2, 2019 Oct 27, 2018 Nov 2, 2019 Oct 27, 2018
Revenue $ 33,318 $ 34,196 $ 102,967 $ 99,490
Gross Profit 12,297 13,908 38,513 39,417
Gross Profit Margin (%) 36.9% 40.7% 37.4% 39.6%
Operating Income, net 447 2,362 4,078 5,791
Net Income 456 1,417 3,108 3,425
Net Income per Common Share – Diluted $ 0.06 $ 0.20 $ 0.43 $ 0.49
Weighted Avg Number of Common Shares Outstanding – Diluted
7,199 7,167 7,272 7,056
Dividends Declared per Common Share $ 0.07 $ 0.07 $ 0.21 $ 0.21
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Select Consolidated Balance Sheet Data
Amounts In Thousands(Unaudited) November 2, 2019 January 31, 2019
Cash & Cash Equivalents $ 4,468 $ 7,534
Current Assets 65,215 62,608
Total Assets 121,365 118,983
Current Liabilities 27,853 24,665
Long-Term Debt, net of current portion 9,004 12,870
Royalty Obligation, net of current portion 8,488 9,916
Total Shareholders’ Equity $ 72,953 $ 69,775
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Reconciliation of Net Income to EBITDA
FY 2016 FY 2017 FY 2018 FY 2019 TTM Q3 FY20
Net Income $ 4,525 $ 4,428 $ 3,286 $ 5,730 $ 5,414
Interest Income (72) (78) (168) (145) (145)
Interest Expense - - 402 876 865
Income Tax Expense 2,384 2,377 1,871 1,578 714
Depreciation/Amortization 2,020 2,431 4,017 6,154 6,213
EBITDA $ 8,857 $ 8,958 $ 9,408 $ 14,193 $ 13,061
($ in thousands)