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ALOT's Q1 Adjusted EPS Declines Y/Y Due to Elevated Costs
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Shares of AstroNova, Inc. (ALOT - Free Report) have declined 1.1% since the company reported its earnings for the quarter ended April 30, 2025. This compares unfavorably to the S&P 500 index’s 0.7% growth during the same period. Over the past month, ALOT’s stock has seen a marginal decrease of 0.1%, while the S&P 500 has advanced 3.1%, indicating underperformance relative to the broader market.
AstroNova incurred a net loss of 5 cents per share for the first quarter of fiscal 2026 against a net income of 15 cents per share in the prior-year quarter. Adjusted net income stood at 5 cents per share, down from 15 cents per share in the prior-year quarter. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
The company’s revenues rose 14.4% year over year to $37.7 million, buoyed by double-digit growth in both of its reporting segments. Revenues from the Product Identification (Product ID) segment increased 13.4% to $26.3 million, aided by demand for desktop label printers and contributions from the recently acquired MTEX. The Aerospace segment grew 16.8% to $11.4 million, driven by increased ToughWriter shipments to commercial and defense customers.
Despite the top-line strength, profitability metrics declined on a GAAP basis. Operating income dropped to $0.6 million from $1.3 million a year ago, and the company posted a net loss of $0.4 million, against a net income of $1.2 million in the prior-year quarter. Adjusted net income, however, stood at $0.4 million.
Adjusted EBITDA improved 27.6% year over year to $3.1 million, and the margin expanded by 80 basis points to 8.3%.
In Product ID, AstroNova launched three new next-generation printing solutions: the QL-425 and QL-435 for professional labeling and the AJ-800 for direct-to-package printing. While operating income for this segment declined 6.7% to $2.8 million, the adjusted operating income rose 4.4% to $3.1 million, suggesting margin pressure from restructuring and acquisition-related costs.
The Aerospace business delivered operating income of $2.8 million, up 60.5% year over year. Adjusted operating income rose to $2.9 million, or 25.7% of revenue, thanks to higher volumes and product mix improvements. Notably, 42% of Aerospace unit shipments in the quarter came from ToughWriter printers, with management targeting over 80% by year-end.
Orders and Backlog:
Orders rose 5.4% year over year to $34.9 million, supported by growth in Product ID, including a three-year label supply contract with a multinational beauty firm and a renewed agreement with a U.K.-based coffee company. However, backlog declined to $25.5 million as of April 30, 2025 from $28.3 million at fiscal 2025-end, largely due to fulfillment of previously delayed shipments and timing in Aerospace orders.
Management Commentary
CEO Greg Woods emphasized progress on strategic initiatives, particularly the transition to high-margin ToughWriter products in Aerospace and the commercialization of next-generation Product ID printers. Management highlighted that 83% of revenue was recurring and attributed improved adjusted operating income to the synergy from the MTEX acquisition and cost reduction efforts.
Woods also reinforced the company’s aim to strengthen the margin profile and profitability through supply chain simplification and restructured operations. These include a flatter organizational structure and revised compensation plans tied to key performance indicators.
Factors Influencing the Results
The quarter's results were shaped by both structural and cyclical factors. Gross margin dipped to 33.6% from 36.3% in the prior year due to acquisition-related dilution and legacy contract mix. However, adjusted gross margin came in at 34.6%, showing improvement from the previous quarter, driven by higher volumes and favorable mix in Aerospace.
Interest expenses nearly doubled to $0.9 million due to higher debt and financing costs associated with the MTEX acquisition. Operating expenses rose largely due to increased healthcare costs and professional fees.
Management noted minimal impact from tariffs, citing favorable contract terms and a globally diversified manufacturing base across the United States, the EU and Canada. Price increases implemented in April and May are expected to help mitigate inflationary pressures.
Guidance
AstroNova reaffirmed its full-year fiscal 2026 outlook. The company continues to expect revenue between $160 million and $165 million, representing about 7% growth at the midpoint. Adjusted EBITDA margin is projected to range from 8.5% to 9.5%, indicating continued margin expansion from cost containment and operational improvements.
Other Developments
During the quarter, AstroNova completed the integration of MTEX into its Product ID segment, which contributed $1.4 million in revenues. The company also executed $1.9 million in annualized cost reductions as part of a broader $3 million restructuring initiative expected to be completed by the second quarter. Additionally, AstroNova paid down $3.9 million in debt, improved its liquidity position to $12.6 million, and reported free cash flow of $4.4 million for the quarter.
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ALOT's Q1 Adjusted EPS Declines Y/Y Due to Elevated Costs
Shares of AstroNova, Inc. (ALOT - Free Report) have declined 1.1% since the company reported its earnings for the quarter ended April 30, 2025. This compares unfavorably to the S&P 500 index’s 0.7% growth during the same period. Over the past month, ALOT’s stock has seen a marginal decrease of 0.1%, while the S&P 500 has advanced 3.1%, indicating underperformance relative to the broader market.
AstroNova incurred a net loss of 5 cents per share for the first quarter of fiscal 2026 against a net income of 15 cents per share in the prior-year quarter. Adjusted net income stood at 5 cents per share, down from 15 cents per share in the prior-year quarter. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
The company’s revenues rose 14.4% year over year to $37.7 million, buoyed by double-digit growth in both of its reporting segments. Revenues from the Product Identification (Product ID) segment increased 13.4% to $26.3 million, aided by demand for desktop label printers and contributions from the recently acquired MTEX. The Aerospace segment grew 16.8% to $11.4 million, driven by increased ToughWriter shipments to commercial and defense customers.
Despite the top-line strength, profitability metrics declined on a GAAP basis. Operating income dropped to $0.6 million from $1.3 million a year ago, and the company posted a net loss of $0.4 million, against a net income of $1.2 million in the prior-year quarter. Adjusted net income, however, stood at $0.4 million.
Adjusted EBITDA improved 27.6% year over year to $3.1 million, and the margin expanded by 80 basis points to 8.3%.
AstroNova, Inc. Price, Consensus and EPS Surprise
AstroNova, Inc. price-consensus-eps-surprise-chart | AstroNova, Inc. Quote
Other Key Business Metrics
Segment Performance:
In Product ID, AstroNova launched three new next-generation printing solutions: the QL-425 and QL-435 for professional labeling and the AJ-800 for direct-to-package printing. While operating income for this segment declined 6.7% to $2.8 million, the adjusted operating income rose 4.4% to $3.1 million, suggesting margin pressure from restructuring and acquisition-related costs.
The Aerospace business delivered operating income of $2.8 million, up 60.5% year over year. Adjusted operating income rose to $2.9 million, or 25.7% of revenue, thanks to higher volumes and product mix improvements. Notably, 42% of Aerospace unit shipments in the quarter came from ToughWriter printers, with management targeting over 80% by year-end.
Orders and Backlog:
Orders rose 5.4% year over year to $34.9 million, supported by growth in Product ID, including a three-year label supply contract with a multinational beauty firm and a renewed agreement with a U.K.-based coffee company. However, backlog declined to $25.5 million as of April 30, 2025 from $28.3 million at fiscal 2025-end, largely due to fulfillment of previously delayed shipments and timing in Aerospace orders.
Management Commentary
CEO Greg Woods emphasized progress on strategic initiatives, particularly the transition to high-margin ToughWriter products in Aerospace and the commercialization of next-generation Product ID printers. Management highlighted that 83% of revenue was recurring and attributed improved adjusted operating income to the synergy from the MTEX acquisition and cost reduction efforts.
Woods also reinforced the company’s aim to strengthen the margin profile and profitability through supply chain simplification and restructured operations. These include a flatter organizational structure and revised compensation plans tied to key performance indicators.
Factors Influencing the Results
The quarter's results were shaped by both structural and cyclical factors. Gross margin dipped to 33.6% from 36.3% in the prior year due to acquisition-related dilution and legacy contract mix. However, adjusted gross margin came in at 34.6%, showing improvement from the previous quarter, driven by higher volumes and favorable mix in Aerospace.
Interest expenses nearly doubled to $0.9 million due to higher debt and financing costs associated with the MTEX acquisition. Operating expenses rose largely due to increased healthcare costs and professional fees.
Management noted minimal impact from tariffs, citing favorable contract terms and a globally diversified manufacturing base across the United States, the EU and Canada. Price increases implemented in April and May are expected to help mitigate inflationary pressures.
Guidance
AstroNova reaffirmed its full-year fiscal 2026 outlook. The company continues to expect revenue between $160 million and $165 million, representing about 7% growth at the midpoint. Adjusted EBITDA margin is projected to range from 8.5% to 9.5%, indicating continued margin expansion from cost containment and operational improvements.
Other Developments
During the quarter, AstroNova completed the integration of MTEX into its Product ID segment, which contributed $1.4 million in revenues. The company also executed $1.9 million in annualized cost reductions as part of a broader $3 million restructuring initiative expected to be completed by the second quarter. Additionally, AstroNova paid down $3.9 million in debt, improved its liquidity position to $12.6 million, and reported free cash flow of $4.4 million for the quarter.