David S. Smith, CFO · 2019-03-28 · David S. Smith, CFO March 28, ... label printer 2001 First...

Sidoti & Company, LLC Spring 2019 Investor Conference

David S. Smith, CFO March 28, 2019

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, including those concerning five-year operating model targets and growth

through acquisitions, 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, 2018 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.

©2019 AstroNova, Inc. all rights reserved. 2

Forward-looking Statements

NASDAQ: ALOT Investor Presentation – March 2019

3

Innovative, Differentiated Products

Aerospace Product Identification Test & Measurement

Unifying Core Technology – Data Visualization

AstroNova products convert analog and digital data into text, graphics, digital signals

• High recurring revenue stream

• Proprietary consumables

• Diverse global markets

NASDAQ: ALOT ©2019 AstroNova, Inc. all rights reserved.Investor Presentation – March 2019

AstroNova Financial Snapshot

4NASDAQ: ALOT ©2019 AstroNova, Inc. all rights reserved.Investor Presentation – March 2019

NASDAQ: ALOT Russell Microcap® Index(Stock price and yield as of 3/25/2019)

Recent Price $19.62

52-Week Range $13.76 - $23.95

Market Capitalization $136.4 million

Common Stock Outstanding(1) 6.95 million

Enterprise Value $148.5 million

Book Value per Share(2) $9.74

Annualized Dividend $0.28 per share

Yield 1.43%

Q4 FY 2019 Financial Highlights

• Bookings*: $38.6 million, up 11%

• Revenue*: $37.2 million, up 14%

• Operating income*: $2.9 million, up 37%

• EPS: $0.32, up 256%

(1) As of November 30, 2018

(2) Fiscal year ended January 31, 2019

FY 2019 Financial Highlights

• Bookings*: $141.9 million, up 19%

• Revenue*: $136.7 million, up 21%

• Operating income*: $8.7 million, up 61%

• Backlog*: $25.6 million, up 20%

• EPS: $0.81, up 72%

*Company record

50-Year History of Innovation

5

1969

Company founded

1975First data acquisition

recorders

1983

Nasdaq listing

1994Grass Technology

acquired

1994First color

label printer2001

First Aerospace printer

2012First color inkjet

label printer

2013Grass

Technologydivested

2013AOS

launched

2014Miltopeacquired

2015RITEC

acquired

2015AstroNovaREBRANDING

Calendar years

20165yr accelerated

growth plan

2017TrojanLabel

acquired

2017Honeywell

acquired

New Growth Strategy

Implemented FY13

Investor Presentation – March 2019 NASDAQ: ALOT ©2019 AstroNova, Inc. all rights reserved.

6

Strategic Transformation


$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

$140.0

FY 1992 FY 2002 FY 2012 FY 2019

New Growth Strategy

Implemented

ALOT Revenue$ in millions

7

AstroNova Operating System (AOS)

Continuous Improvement Through operational excellence

and lean initiatives, we

consistently strive to increase

efficiency and enhance margins

InnovationStage-Gate methodology

accelerates and streamlines

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


Financial Highlights

8NASDAQ: ALOT ©2019 AstroNova, Inc. all rights reserved.

9

Revenue Per Employee

($ in thousands)

NASDAQ: ALOT

AOS Drives Productivity Improvements

©2019 AstroNova, Inc. all rights reserved.Investor Presentation – March 2019

$216

$267 $286

$310

$352 $374

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Five-Year Revenue History

$68

$88$95 $98

$113

$137

$0

$20

$40

$60

$80

$100

$120

$140

$160

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

Annual Revenue

Investor Presentation – March 2019 NASDAQ: ALOT ©2019 AstroNova, Inc. all rights reserved. 10

($ in millions)

Annual

$98.4$113.4

$136.6

FY 2017 FY 2018 FY 2019

$24.5

$27.5$28.8

$32.7$31.5

$33.8 $34.2

$37.2

Q1 Q2 Q3 Q4

FY'17 FY'18 FY'19

Recent Revenue Growth

11©2019 AstroNova, Inc. all rights reserved.

+29% +23% +19% +14%

Quarterly

($ in millions)

($ in millions)

Investor Presentation –March 2019 NASDAQ: ALOT

12

62%

38%

50%

41%

9%

Revenue by Product Type

Supplies

$18.5M

Hardware

$15.2M

Service/Other

$3.5M

Revenue by Channel

Domestic

$22.9M

International

$14.3M

($ in millions) ($ in millions)

Q4 FY 2019 Revenue Profile

NASDAQ: ALOT

Large Recurring Revenue Domestic Revenue +22% y/y


13

61%

39%

52%39%

9%

Revenue by Product Type

Supplies

$71.2M

Hardware

$53.2M

Service/Other

$12.3M

Revenue by Channel

Domestic

$83.7M

International

$53.0M

($ in millions) ($ in millions)

FY 2019 Revenue Profile


Large Recurring Revenue International Revenue +22% y/y

14

Worldwide Reach

165 Dealers, Customers in 154 Countries

©2019 AstroNova, Inc. all rights reserved.NASDAQ: ALOT Investor Presentation – March 2019

15

Worldwide Installed Base


16

Business Overview

Reporting

Segments

Business

Units


17

Product Identification Segment

Tabletop and Light Production Label Printers, Specialty Printers,

Software, Consumables, and Service

$49.1

$59.8

$67.1$69.9

$81.7$86.8

10.5% 12.1% 13.9% 14.1% 13.0%9.1%

$0

$20

$40

$60

$80

$100

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

FY 2014-19 Revenue CAGR: 12.1%

($ in millions)

Segment Revenue and

Operating Profit Margin


18

Digital Package Printing:Large, Attractive and Growing Market

Advantages of Digital Package Printing

• Short-run

• On-demand

• Ease of data variability

• Personalization

• Lower cost


19

New Product - QuickLabel® QL-300Launched Worldwide in February 2019


• 5-color, toner-based tabletop digital label printer

• Can print white and CMYK in 1200 dpi

• Greatly expands labeling opportunities

• Label print is durable, water-fast and UV resistant

• Wide range of capabilities

• Low total cost of ownership

User Friendly. Flexible and Productive. Cost Effective.

$13.2

$23.2

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

2017 2022

Projected Growth of Digitally Printed

Labels and Packaging

($ in b

illio

ns)

Source: Smithers Pira, AstroNova

NASDAQ: ALOT

Labels represent ~ 15-20%

©2019 AstroNova, Inc. all rights reserved. 20Investor Presentation – March 2019

Digital Package Printing:Disrupting the Packaging Industry

Expands Addressable Product ID Market

21NASDAQ: ALOT ©2019 AstroNova, Inc. all rights reserved.Investor Presentation –March 2019

QuickLabelTrojanLabel

22

TrojanLabel

• Acquired in February 2017

• European manufacturer of digital color label presses and specialty printing systems

• Products focused on a broad range of end markets

• Strong presence in EMEA and Asia

• 50 dealer partners worldwide

• Profitable and growing

• Robust R&D pipeline


23

Food Safe, Flexible Packaging Solution

Introduced at PACK EXPO 2018

• Designed for use with the entire range of the TrojanLabel printers

• Opens new opportunities in food, medical and pharmaceutical packaging

markets

• Flexible packaging lowers material cost, reduces waste, increases

consumer convenience and enhances brand differentiation


24

Market Leading PortfolioDigital Color Label Printers & Supplies


25

Test & Measurement Segment

Airborne Printers, Networking Hardware and

Data Acquisition Systems

$19.5

$28.6 $27.5 $28.6$31.7

$49.9

13.6%

19.7%

13.3% 15.4%11.8%

23.9%

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019

FY 2014-19 Revenue CAGR: 20.7%

Segment Revenue and

Operating Profit Margin

NASDAQ: ALOT

FY19 Revenue Up 57% Y/Y


26

Aerospace Products: Significant Worldwide Opportunity

• Graphical flight deck and cabin printers

• Avionic networking products

• PMA certified products, parts, supplies

• Certified FAA repair facility

Growth Catalysts: Global Aircraft Demand

(Upgrades, Service, Supplies)

Military Commercial Business/

Regional Jet

In-flight

Entertainment

Leading Customers


• ANI to manufacture Honeywell’s narrow-format commercial flight deck printers

• Primarily used on Boeing 737 and Airbus A320

• Covers production of new printers as well as repair, support services and supplies

• Expected to be accretive in first full year of ownership

Honeywell AerospaceProduct Line Acquisition:

Significant Growth Driver

27NASDAQ: ALOT ©2019 AstroNova, Inc. all rights reserved.Investor Presentation – March 2019

14,300B737s and A320s currently in service

10,000Entering into service in next 10 years

28

Source: Customer estimates


29

B737 and A320 Estimated Annual Production Rate 2017-19

0 200 400 600 800 1000 1200 1400 1600

2017

2018

2019

B737 A320

1,032

1,210

1,402

Source: Customer estimates

NASDAQ: ALOT

B737 + A320 ~60% of all commercial deliveries


30

Real-time Data Acquisition & Analysis

Applications

• Aircraft equipment qualification and certification

• Monitoring rail and automotive performance

• Validating fixed plant control instrumentation

• Wireless remote monitoring and data acquisition

Growth Catalysts: Regulatory,

Safety Complianceand Quality Assurance

Primary Markets

Aerospace, transportation, energy, industrial, telemetry

New Products

Everest®EV-5000DDX100

SmartCorder®

Daxus® DX-100TMX ®


31

FY 2020 Priorities

• Accelerate use of AOS to drive operational excellence

• Complete transition to unified Global IT and Logistics platform

• Enhance liquidity through working capital improvements


32

Five-Year Growth Strategy (est. FY16)

Near-Term:

1-2 Years

Longer-Term:

3-5 Years

• Accelerate product launches and channel build out

• Innovate game-changing, technology-based products

• Automate key processes

• Build management team depth

• Pursue smaller bolt-on acquisitions

• Focus AOS on improving operating margins and FCF

• Broaden product lines and recurring revenue opportunities

• Increase global presence

• Pursue larger bolt-on acquisitions

FY17

FY18

FY19

FY20

FY21


33

Five-Year Operating Model

NASDAQ: ALOT ©2019 AstroNova, Inc. all rights reserved.

FY 2019 (actual) FY 2021 (targets)*

Revenue $136.7M $250M

5-year CAGR 14.9% 17%

Operating Margin 6.4% 15%

Strategic Driving Force Data Visualization Technology

End Market Focus Aerospace, Data Acquisition, Industrial

Fast-Moving Consumer Goods

Growth Strategy (Organic growth of current platforms) + (bolt-on M&A)

Management Approach AstroNova Operating System

*Targets dependent on additional acquisitions

FY 2021 targets as established in FY 2016

Investor Presentation – March 2019

34

Reasons to Invest


Track record of successful M&A

Recurring revenue >50%

Robust product development pipeline

Expanding global footprint

Continuous improvement culture

Leading market positions and brands

High Barriers to Entry

37

Q4 and FY 2019 Financial Results Summary


In Thousands Except for Per Share Data

(Unaudited) Three Months Ended 12 Months Ended

January 31, 2019 January 31, 2018 January 31, 2019 January 31, 2018

Revenue $37,167 $32,699 $136,657 $113,401

Gross Profit 14,581 12,642 53,999 44,002

Gross Profit Margin (%) 39.2% 38.7% 39.5% 38.8%

Operating Income 2,930 2,130 8,720 5,412

Operating Margin (%) 7.9% 6.5% 6.4% 4.8%

Net Income 2,306 628 5,730 3,286

Net Income per Common Share – Diluted $0.32 $0.09 $0.81 $0.47

Weighted Avg Number of Common Shares

Outstanding – Diluted 7,163 6,847 7,084 7,015

Dividends Declared per Common Share $0.07 $0.07 $0.28 $0.28

38

Select Consolidated Balance Sheet Data


Amounts In Thousands

(Unaudited) January 31, 2019 January 31, 2018

Cash and Cash Equivalents $7,534 $10,177

Current Assets $62,608 $63,780

Total Assets $118,983 $122,313

Current Liabilities $24,665 $25,912

Long-Term Debt, net of current portion $12,870 $17,648

Royalty Obligation, net of current portion $9,916 $11,760

Shareholders’ Equity $69,774 $63,647

David S. Smith, CFO · 2019-03-28 · David S. Smith, CFO March 28, ... label printer 2001 First...

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