Q4 2025 AstroNova Inc Earnings Call
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Speaker Change: Good morning, and welcome to the Astor know about fiscal fourth quarter and full well.
Unknown Attendee: Good morning and welcome to the AstroNova fiscal fourth quarter and full year 2025 financial results conference call. Today's call is being recorded.
Rob: Full year 2025 financial results Conference call. Today's call is being recorded my name is Rob and I will be your coordinator on today's call. If you would like to ask a question. Please press star followed by one on your telephone keypad now if you change your mind. Please press star followed by two I would now.
Unknown Attendee: My name is Ezra and I will be your coordinator on today's call. If you would like to ask a question, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by two.
Scott Solomon: I would now like to turn the conference call over to Scott Solomon of the company's investor relations firm, Sharon Merrill Advisors. Please go ahead, sir.
Speaker Change: Like to turn the conference call over to Scott Solomon of the company's Investor Relations firm Sharon Merrill Advisors. Please go ahead Sir.
Scott Solomon: Thank you Asher and good morning, everyone.
Scott Solomon: Thank you, Esra, and good morning, everyone. Our Q4 fiscal 2025 earnings release and the slide presentation accompanying management's prepared remarks are posted on the investor relations page of our website www.astronovainc.com. Turning to slide two of the presentation.
Speaker Change: Our Q4 fiscal 2025 earnings release, and the slide presentation accompanying managements prepared remarks.
Scott Solomon: And on the Investor Relations page of our website Www Dot <unk> dot com.
Scott Solomon: Turning to slide two of the presentation statements made on today's call them. They are not statements of historical fact are considered forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
Scott Solomon: 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.
Scott Solomon: 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.
Scott Solomon: Any forward looking statements speak only as of today April 14th 2025, Astro undertakes no obligation to update these forward looking statements or other information regarding the forward looking statements.
Scott Solomon: Any forward-looking statements speak only as of today, April 14, 2025. AstroNova undertakes no obligation to update these forward-looking statements for other information regarding the forward-looking statements and the factors that may cause differences.
Scott Solomon: Factors that may cause differences please.
Scott Solomon: Please see the risk factors in AstroNova's annual report on Form 10-K and other filings that the company makes with the Securities and Exchange Commission.
Scott Solomon: Please see the risk factors and the astronauts astronaut was annual report on Form 10-K, and other filings the company makes with the Securities and Exchange Commission.
Scott Solomon: On today's call, management will refer to non-GAAP financial measures. AstroNova believes that the inclusion of these financial measures help investors gain a meaningful understanding of the changes in a company's core operating results and helps investors who wish to make comparisons between AstroNova and other companies on both a GAAP and a non-GAAP basis. The non-GAAP financial measures are reconciled to the most directly comparable GAAP measures in today's earnings bill. Turning to slide three.
Scott Solomon: On today's call management will refer to non-GAAP financial measures.
Scott Solomon: Astra Noble believes that the inclusion of these financial measures help investors gain a meaningful understanding of the changes in the company's core operating results and it helps investors who wish to make comparisons between Astro Nova and other companies on both a GAAP and non-GAAP basis.
Scott Solomon: The non-GAAP financial measures are reconciled to the most of the most directly comparable GAAP measures in today's earnings release.
Speaker Change: Turning to slide three hosting this morning's call are Greg Woods.
Scott Solomon: Hosting this morning's call are Greg Woods, AstroNova's President and Chief Executive Officer, and Thomas DeByle, AstroNova's VP and Chief Financial Officer. Greg will begin the call with an overview of management strategy to make AstroNova a stronger company.
Speaker Change: He is president and Chief Executive Officer, and founder bile acid, <unk>, VP and Chief Financial Officer.
Speaker Change: Greg will begin the call with managements and overview of management strategy to make astronaut stronger company Tal will review financial results.
Scott Solomon: Tom will review financial results and pass it back to Greg for concluding comment.
Greg Woods: It back to Greg for his concluding comments.
Scott Solomon: will follow the formal presentation with time for management to take your questions.
Speaker Change: We will follow the formal presentation with time for management to take your questions now.
Gregory Woods: Now please turn to slide four as I hand the call over to Greg.
Greg Woods: Now please turn to slide four as I hand, the call over to Greg.
Speaker Change: Okay.
Greg Woods: Thank you Scott.
Gregory Woods: Thank you, Scott. Good morning, everyone, and thank you for joining us. We had a challenging year in fiscal 2025, but have been aggressively making changes at AstroNova to improve our performance. We had a tough integration of the MTEX acquisition. faced lower demand resulting from the Boeing strike and had delays in large defense industry orders. While disappointed in our performance in fiscal 2025, there were some bright spots. For example, our test and measurement segment, which will be renamed the aerospace segment, starting in the first quarter of fiscal 2026, had record revenue. This name change better reflects the end markets we serve with that business segment.
Everyone and thank you for joining us.
Speaker Change: We had a challenging year in fiscal 2025, but had been aggressively making changes at Astro Nova to improve our performance.
Greg Woods: We had a tough integration of the <unk> acquisition.
Speaker Change: Hey, slower demand, resulting from the Boeing strike and had delays in large defense industry orders.
Speaker Change: While disappointed in our performance in fiscal 'twenty fives, there were some bright spots.
Speaker Change: For example, our test and measurement segment.
Speaker Change: Which will be renamed the aerospace segment, starting in the first quarter of fiscal 2026 had record revenue.
Speaker Change: This name change better reflects the end markets, we serve with that business segment.
Gregory Woods: I'll be referring to this segment as aerospace throughout my prepared remarks.
Speaker Change: I'll be referring to this segment is aerospace throughout my prepared remarks.
Speaker Change: Nonetheless, given the situation our management team and board took immediate and decisive actions to address the challenges of growth and profitability.
Gregory Woods: Nonetheless, given the situation, our management team and board took immediate and decisive actions to address the challenges of growth and profitability. This includes executing on a restructuring plan that is expected to deliver $3 million in annual cost savings. We also are right-sizing our product portfolio to focus on higher-margin, higher-growth products.
Speaker Change: This included executing on our restructuring plan that is expected to deliver $3 million in annual cost savings.
Speaker Change: We also are right sizing our product portfolio to focus on higher margin higher growth products.
Speaker Change: I should note that we recently strengthened our board with the appointment of Darius Nevin as director last month.
Gregory Woods: I should note that we recently strengthened our board with the appointment of Darius Nevin as director last month. Darius enhances our board's experience and knowledge with significant financial acumen and public company leadership experience. We look forward to his contributions to our future. MTEX has required a lot of work. We are reorganizing and realigning the business and have made solid progress in implementing a new level of accountability and discipline for its operation. We plan to leverage the key technologies and impressive manufacturing facilities of EmTechs while rethinking our operating structure, product portfolio, go-to-market strategies, and how to drive operational excellence.
Speaker Change: Darius enhances our board's experience and knowledge with significant financial acumen and public company leadership experience, we look forward to his contributions to our future.
Speaker Change: And in Texas required a lot of work.
Speaker Change: We are reorganizing and realigning the business and have made solid progress in implementing our new level of accountability and discipline for its operations.
Speaker Change: We plan to leverage the key technologies and impressive manufacturing facilities of ametek's well rethinking.
Speaker Change: Our operating structure product portfolio go to market strategies, and how to drive operational excellence.
Gregory Woods: We believe that we are positioned to drive market share gains with new product launches, tangible sales synergies, and unique supply sourcing opportunities in fiscal 26.
Speaker Change: We believe that we are positioned to drive market share gains with new product launches tangible sales synergies and unique supply sourcing opportunities in fiscal 'twenty six.
Speaker Change: We have on fiscal years product roadmap.
Gregory Woods: we have on fiscal year's product roadmap. Five next-generation products based on Emtek's pre-engine technology, and also four from our legacy product offering. As I'll discuss in more detail shortly, we are currently in the initial stages of deploying this pre-engine technology across the MTEK product platform. and Aerospace, we are continuing to transition customers to our advanced Tuff Reuter printers. We remain confident in AstroNova's ability to deliver long-term shareholder value and in the promise of EmTechs to expand our application capabilities, strengthen our competitive position, and deliver improved printer reliability and print quality to our customers with this game-changing technology.
Speaker Change: Five next generation products based on <unk> pretty engine technology and also for from our legacy product offerings.
Speaker Change: As I'll discuss in more detail. Shortly we are currently in the initial stages of deploying this technology across the amtech product platform.
Speaker Change: In aerospace we are continuing to transition customers to our advanced tough grader printers.
Speaker Change: We remain confident in <unk> ability to deliver long term shareholder value and the promise of amtech to expand our application capabilities.
Speaker Change: And our competitive position and deliver improved print of reliability and print quality to our customers with this game changing technology.
Speaker Change: Turning to slide five the.
Gregory Woods: during the slide five.
Gregory Woods: The driving force behind AstroNova is data visualization technology, the engine that powers the products we manufacture. This technology expertise enables us to develop solutions that process analog and digital data in a fast, efficient, and often proprietary manner. Our technologies capture that data and convert it into usable formats, such as graphics or text.
Speaker Change: The driving force behind the Astro Nova is data visualization technology.
Speaker Change: Engine that powers the products we manufacture.
Speaker Change: Technology expertise enables us to develop solutions that process analog and digital data in a fast efficient and often proprietary matter.
Speaker Change: Our technologies capture that data and converted into usable formats, such as graphics or text.
Gregory Woods: Our strategy is to leverage our proprietary data visualization technology to provide highly differentiated products that drive a significant recurring revenue model. By referring revenue, I'm referring to consumables such as ink, labels, paper, and other media, as well as service agreements, repairs, and upgrades to provide us with consistent, more predictable revenue streams. In fiscal 2025, recurring revenue accounted for 71% of consolidated sales.
Speaker Change: Our strategy is to leverage our proprietary data visualization technology to provide highly differentiated products that drive a significant recurring revenue model.
Speaker Change: By referring revenue I'm, referring to consumables, such as ink label paper and other media.
Speaker Change: As well as service agreements repairs and upgrades that provide us with consistent more predictable revenue streams.
Speaker Change: In fiscal 2025 recurring revenue accounted for 71% of consolidated sales.
Speaker Change: Let's now turn to our reporting segments, starting with aerospace on slide six.
Gregory Woods: Let's now turn to our reporting segments, starting with aerospace on slide six. In fiscal 2025, aerospace contributed a record $48.9 million in revenue, representing approximately one-third of our consolidated sales. The segment also posted record full year operating profit of 22.8%. resulted in a five-year compound annual growth rate of 17.4%. Aerospace remains a critical driver of our business, supported by a robust installed base of flight deck printers currently deployed across more than 30,000 aircraft worldwide. These numbers reflect the significant role we play in the advanced aerospace safety, innovation, and reliability. Recurring revenue, which includes parts, specialized thermal paper, service and repairs, accounted for 49% of the aerospace segment revenue this past year.
Speaker Change: In fiscal 2025 aerospace contributed a record $48 9 million in revenue representing approximately one third of our consolidated sales.
Speaker Change: Segment also posted record full year operating profit of 22, 8%.
Speaker Change: Resulting in a five year compound annual growth rate of 17, 4%.
Speaker Change: Aerospace remains a critical driver of our business supported by a robust installed base of flight deck printers currently deployed across more than 30000 aircrafts worldwide.
Speaker Change: These numbers reflect the significant role we play in the advanced Aerospace safety.
Speaker Change: Innovation and reliability.
Speaker Change: Recurring revenue, which includes parts specialized thermal paper service and repairs.
Speaker Change: For 49% of the aerospace segment revenue of this past year.
Gregory Woods: with hardware contributing the other 51%.
Speaker Change: With hardware contributing the other 51%.
As shown in slide seven there are two important growth catalyst for our aerospace segment.
Gregory Woods: As shown in slide 7, there are two important growth catalysts for our aerospace segment. The first is the ongoing transition to our advanced and higher margin Toughwriter branded family of printers away from the legacy brand. We estimate the tough rate of printer as a percentage of total printer deliveries will more than double to 86% by the end of the fiscal year. Our Tupperware printers have a strong value proposition for our customers. They are lighter in weight for better fuel savings and improved aircraft efficiency. They also provide a significant increase in consistent, reliable performance, enhancing safety during flight operations.
Speaker Change: The first is the ongoing transition to our advanced and higher margin tough Rader branded family of printers away from the legacy brands.
Speaker Change: We estimate the tougher it a printer.
Speaker Change: As a percentage of total printer deliveries will more than double to 86% by the end of the fiscal year.
Speaker Change: Are tougher to printers have a strong value proposition for our customers.
Speaker Change: They were lighter in weight for better fuel savings and improved aircraft efficiency. They also provide.
Speaker Change: A significant increase and consistent reliable performance enhancing safety during flight operations.
Speaker Change: And finally, the much higher print resolution improves readability for pilots, allowing for faster decision, making when reviewing flight plans and other critical updates.
Gregory Woods: And finally, the much higher print resolution improves readability for pilots, allowing for faster decision-making when reviewing flight plans and other critical updates. The strategic shift to tough riders enhances margins and will drive an estimated $4 million reduction in royalty obligations on legacy products. It's worth noting that these royalty obligations are set to roll off in the fourth quarter of fiscal 28, incrementally contributing to a stronger margin profile for the company.
Speaker Change: The strategic shift to tough writers enhances margins and will drive an estimated $4 million reduction in royalty obligations on legacy products.
Speaker Change: It's worth noting that these royalty obligations are set to roll off in the fourth quarter of fiscal 'twenty eight incrementally contributing to a stronger margin profile for the company.
Speaker Change: Another catalyst for growth is the opportunity to grow our service and supplies business in aerospace, we expect to increase our market share in the highly regulated aerospace.
Gregory Woods: Another catalyst for growth is the opportunity to grow our service and supplies business in Aerosmith. We expect to increase our market share in the highly regulated aerospace printer paper business, and expand our international affiliate repair business. Our aerospace segment also offers data acquisition products for the defense industry. These include specialized telemetry products used primarily in rocket and missile testing and portable ultra high precision data acquisition systems used in markets including defense and nuclear power.
Speaker Change: Printer paper business and expand our international affiliate repair business.
Speaker Change: Our aerospace segment also offers data acquisition products for the defense industry.
Speaker Change: These include specialized telemetry products used primarily in rocket and missile testing and portable ultra high precision data acquisition systems used in markets, including defense and nuclear power.
Speaker Change: This summer we plan to release, a new flagship data acquisition unit. The T. M X 200, and integrated hardware and software solution that expands our addressable market.
Gregory Woods: This summer, we plan to release a new flagship data acquisition unit, the TMX-200, an integrated hardware and software solution that expands our addressable market.
Speaker Change: Looking at slide eight.
Gregory Woods: looking at slide eight. Our PI segment provides digital labeling and product marketing solutions, including printers, software, and supplies used across packaging, labeling, and mailing applications. We have an installed base of more than 10,000 printers. collectively drive recurring revenue of 82%.
Speaker Change: <unk> segment provides digital labeling and product marketing solutions, including printers software and supplies used across the packaging labeling and mailing applications.
Speaker Change: The installed base of more than 10000 printers.
Speaker Change: Which collectively drive recurring revenue of 82%.
Speaker Change: From a financial standpoint.
Gregory Woods: From a financial standpoint, the segment was down year over year, primarily due to softer demand for hardware and supplies, along with continued integration challenges at MTC.
Speaker Change: The segment was down year over year, primarily due to softer demand for hardware and supplies along with continued integration channel challenges at <unk>.
Speaker Change: T I reported a loss for the quarter due to the goodwill impairment and acquisition accounting adjustments.
Thomas DeByle: TI reported a loss for the quarter due to the goodwill impairment and acquisition accounting adjustment. On a non-gap basis, operating profit for the segment was about 9% of sales. excluding GammaTax. margins were consistent with historic levels reflecting the strength of our legacy business.
Speaker Change: On a non-GAAP basis operating profit for the segment was about 9% of sales.
Speaker Change: Excluding <unk>.
Speaker Change: Margins were consistent with historic levels, reflecting the strength of our legacy business.
Speaker Change: We are revamping the Ti sales organization.
Thomas DeByle: We are revamping the PI sales organization to streamline operations, strengthen our global channel strategy, and drive greater alignment across teams. In addition, We are expanding the portfolio of AstroMachine, which was acquired in 2022 with new mail handling. further enhancing our product lineup and opening new market opportunities.
Speaker Change: Mine operations strengthen our global channel strategy and drive greater alignment across teams.
Speaker Change: In addition.
Speaker Change: We are expanding the portfolio of Astro machine, which was acquired in 2022 with new mail handling equipment.
Speaker Change: Enhancing our product lineup and opening new market opportunities.
Speaker Change: Turning to slide nine.
Thomas DeByle: Turn to slide nine. Let me dive a little deeper into the changes we are making at MPI. We have a history of bringing cohesion and organizational excellence to past acquisitions, and while MTEX has presented its own set of hurdles, we are executing our standard integration process. We quickly identify what is not working and address it aggressively. In Emtex's case, we identified several key areas for improvement to elevate Emtex to public company standards. Many organizational details have had to be addressed, such as formalizing employment agreements, centralizing management structures, and providing direction, focus, and prioritization. We are aligning leadership and driving accountability across the organization.
Speaker Change: Let me dive a little deeper into the changes we are making at <unk>.
We have a history of bringing cohesion and organizational excellence to past acquisitions.
Speaker Change: <unk> has presented its own set of hurdles, we are executing our standard integration processes.
Speaker Change: We quickly identify what is not working and address it aggressively.
Speaker Change: And the Texas case, we identified several key areas for improvement to elevated <unk> to public company standards.
Speaker Change: Many organizational details that had to be addressed such as formalizing employment agreements centralizing management structures, and providing direction focus and prioritization.
Speaker Change: We are aligning leadership and driving accountability across the organization.
Speaker Change: This is a large cultural change as we create a unified vision and develop stronger team dynamics.
Thomas DeByle: This is a large cultural change as we create a unified vision and develop stronger team dynamics. We've overhauled the finance and accounting process. We've addressed gaps in accounting practices to U.S. GAAP standards. This includes changes in accounting for consignment sales, accounts receivable management, inventory oversight, and reserve recognition. Additionally, we've implemented a formalized structure to ensure compliance. We believe we have established a solid foundation from which we can build.
We've overhauled the finance and accounting processes.
Speaker Change: We've addressed gaps and accounting practices to U S GAAP standards.
Speaker Change: This includes changes in accounts purchase accounting for consignment sales accounts receivable management inventory oversight and reserve recognition.
Speaker Change: Additionally, we've implemented a formalized structure to ensure compliance.
Speaker Change: We believe we have established a solid foundation from which we can build.
Speaker Change: Finally, there are many operational enhancements, we have been executing to take a private company mentality to a more proactive fact based approach by <unk>.
Thomas DeByle: Finally, there are many operational enhancements we have been executing to take a private company mentality to a more proactive, fact-based approach. By incorporating the tools and management practices of the AstroNova operating system within Emtex, there is now a more disciplined product development process, strengthened quality controls, and more formalized contract terms and conditions for our customers. We have also strategically refocused the product portfolio to prioritize high margin opportunities. We're excited about the technology, the synergies we can capture, and the strong vertical manufacturing capabilities and put As I noted on our Q3 call, the path to fully realizing the benefits of the MSEC's acquisition is longer and more complex than anticipated.
Speaker Change: Incorporating the tools and management practices of the Astra Nova operating system within Ametek's. There is now a more disciplined product development process.
Speaker Change: And quality controls and more formalized contract terms and conditions for our customers.
Speaker Change: We are also strategically refocus the product portfolio.
Speaker Change: Prioritize high margin opportunities.
Speaker Change: We're excited about the technology the synergies, we can capture and a strong vertical manufacturing capabilities and footprint.
Speaker Change: As I noted on our Q3 call the path to fully realizing the benefits of the <unk> acquisition is longer and more complex than anticipated.
Thomas DeByle: However, we believe the strategic upside is significant. In fact, Together with MTEX, we have developed new, highly disruptive print engine technology. This technology allows our products to use a broader range of inks that can be multisourced, which we believe will dramatically lower our ink costs and reduce our dependence on the limited set of suppliers on which we have had to rely.
Speaker Change: However, we believe the strategic upside is significant.
Speaker Change: In fact.
Speaker Change: Together with <unk>, we have developed new highly disruptive print engine technology.
Speaker Change: This technology allows our products to use a broader range of things that can be multi sourced which we believe will dramatically lower in costs and reduce our dependence on a limited set of suppliers in which we have had to rely on.
Speaker Change: Moving to slide 10.
Thomas DeByle: Moving to slide 10. The next generation products incorporating the new print engine technology will give users flexibility to use either dye or pigment inks, provide live over-the-air software updates, and allow for real-time equipment monitoring. Between now and the end of the year, we plan to introduce five next-generation products based on the Emtex print engine technology. Enhanced versions of the MTEX Atom 2 and Atom 3 label printers will be launched as the QuickLabel 425 and 435, respectively. The Multi 800 and the Multi 1300 industrial packaging printers will be launched this summer under the new Versaprint brand.
Speaker Change: The next generation products, incorporating the new print engine technology will give users flexibility to use either die or pigment inks provide live over the air software updates and allow for real time equipment monitoring.
Speaker Change: Between now and the end of the year, we plan to introduce five next generation products based on the <unk> prevention technology.
Speaker Change: Enhanced versions of the <unk> Adam to an item three label printers will be launched as the quick label for two five and $4 five respectively.
Speaker Change: The multi 800 and the multi 1300 industrial packaging printers will be launched this summer under the new first the print brands.
Thomas DeByle: And in the fall, we will introduce the Versaprint 1200, the next generation of our Emtek AquaFlex flexible package.
And in the fall, we will introduce the <unk> 1200, the next generation of our <unk> Alpha flux flexible packaging system.
Speaker Change: The charts on slide 11 depicts how these next generation products can increase consumables revenue through increased usage of labor media and supplies.
Thomas DeByle: The charts on slide 11 depict how these next generation products can increase consumables revenue through increased usage of label media and supplies. We anticipate a meaningful increase in average annual label media and revenue on a per-installed unit basis for our next-gen mid-market printers. Ink consumption is also projected to rise, reflecting both increased utilization and the flexibility of our new print engine technology. In our packaging printer lineup, the next generation systems feature wider formats and higher throughput, which naturally lead to greater ink usage per installed unit, further supporting our consumables-driven growth model.
Speaker Change: We anticipate a meaningful increase in average annual legal media and revenue on a per installed unit basis for our Nextgen Midmarket printers.
Speaker Change: Ink consumption is also projected to rise, reflecting both increased utilization and the flexibility of our new print engine technology.
Speaker Change: And our packaging printer lineup. The next generation systems feature wider formats, and higher throughput, which naturally lead to greater ink usage per installed unit further.
Speaker Change: Further supporting our consumables driven growth model.
Tom: I'll now hand, the call over to Tom for the financial review.
Thomas DeByle: And I'll hand the call over to Tom for the financial review. Tom. Thank you, Greg. And good morning, everyone. I'll begin with an overview of our financial performance on slide 13. Net revenue for the fourth quarter was down 5.6% to $37.4 million on lower sales in both segments. Gross profit was $12.7 million for the quarter, resulting in a gross profit margin of 34.1%, down from the prior year period, compared with a gross profit of $14.7 million and a gross profit of 37.2% for the same period in fiscal 2024. Lower revenue and less favorable product mix in the 2025 period.
Speaker Change: Tom.
Tom: Thank you, Greg and good morning, everyone I'll begin with an overview of our financial performance on slide 13.
Tom: Net revenue for the fourth quarter was down five 6% to $37 4 million on lower sales in both segments.
Tom: Gross profit was $12 7 million for the quarter, resulting in a gross profit margin of 34, 1% down from the prior year period compared with the gross profit of $14 7 million.
Tom: Gross profit of 37, 2% for the same period in fiscal 2024.
Tom: Collecting.
Tom: Lower revenue and less favorable product mix in the 2025 period Q.
Thomas DeByle: Q4 FY25 showed operating expenses of $25 million versus $10.8 million in Q4 of FY24.
Tom: Q4, FY 'twenty five showed operating expenses of 25 million versus $10 8 million in Q4 of FY 'twenty four.
Thomas DeByle: As noted in our earnings release, our GAAP results included a $13.4 million non-cash goodwill impairment charge related to the PI segment, largely associated with the company's Emtex business. Unless otherwise noted, I'll be discussing our non-GAAP results, which we believe help investors gain a meaningful understanding of the changes in the company's core operating results. Non-GAAP operating expenses for the fourth quarter were $11.4 million, up 4.8% or $0.5 million from the prior year. Excluding Mtek, operating expenses were down. Non-GAAP operating income came in at $1.4 million for the fourth quarter versus $3.6 million in the year-earlier period, primarily due to lower sales volume and a loss at MTEX.
Tom: <unk> noted in our earnings release, our GAAP results included a $13 4 million non cash goodwill impairment charge related to the Pi segment.
Tom: Really associated with the company's amtech business.
Tom: Yes, otherwise noted I'll be discussing our non-GAAP results, which we believe help investors gain a meaningful understanding of the changes in the company's core operating results.
Tom: non-GAAP operating expenses for the fourth quarter were $11 4 million up four 8% or <unk> 5 million from the prior year.
Tom: Excluding ametek's operating expenses were down.
Tom: non-GAAP operating income came in at $1 4 million for the fourth quarter versus $3 6 million in the year earlier period, primarily due to lower sales volume and a lawsuit ametek's adjusted.
Thomas DeByle: Adjusted EBITDA was $2.8 million for the fourth quarter of fiscal 2025 compared with the adjusted EBITDA of $5.2 million for the fourth quarter of fiscal 2024. Order backlog was $28.3 million as of January 31, 2025, compared with $31.4 million at the end of fiscal 2024.
Tom: Adjusted EBIT was $2 8 million for the fourth quarter of fiscal 2025, compared with the adjusted EBITDA of $5 2 million for the fourth quarter of fiscal 2024.
Tom: Order backlog was $28 3 million as of January 31, 2025, compared with $31 4 million at the end of fiscal 2024.
Tom: Turning to our segment results on Slide 14 revenue was down three 6% from the prior year period to $25 7 million, excluding amtech sales in <unk> were down nine 8%, primarily due to lower sales of hardware and supplies.
Thomas DeByle: Turning to our PI segment results on slide 14, revenue was down 3.6% from the prior year period to $25.7 million. Excluding Amtek, sales and PI were down 9.8 percent, primarily due to lower sales of hardware and supplies.
Thomas DeByle: On a GAAP basis, our PI segment reported a loss of $11.2 million, primarily driven by MTEX in a lower unit volume. On a non-GAAP basis, the PI segment recorded an operating profit of $2.3 million, or 8.9% of revenue, compared with the segment operating profit of $3 million, or 11.1% of segment revenue for the fourth quarter of fiscal 2024.
Tom: GAAP basis RPI segment.
Tom: <unk> a loss of $11 2 million, primarily driven by amtech and a lower unit volume.
Tom: On a non-GAAP.
Tom: Basis. The segment recorded an operating profit of $2 3 million or eight 9% of revenue compared with the segment operating profit of $3 million or 11, 1% of segment revenue for the fourth quarter of fiscal 2024.
Thomas DeByle: This segment is not expected to perform strongly out of the gate in fiscal 2026, but we expect that these actions we are taking on cost reductions and portfolio realignment will be demonstrated as we move through the second half of the fiscal year.
Tom: This segment is not expected to perform strongly out of the gate in fiscal 2026, but we expect that these actions we are taking on cost reductions and portfolio.
Tom: Realignment.
Tom: We will be demonstrated as we move through the second half of the fiscal year.
Tom: Moving to slide 15 test and measurement.
Thomas DeByle: Moving to slide 15, test and measurement, or now known to be as aerospace segment, revenue was down 9.9% in the quarter from the prior year period to $11.7 million. The decline was primarily due to a delayed defense order and to a lesser extent, deferred deliveries associated with the Boeing strike.
Tom: Or now known to be as Aerospace segment revenue was down nine 9% in the quarter from the prior year period to $11 7 million. The decline was primarily due to a.
Tom: Delayed defense order and to a lesser extent deferred deliveries associated with the Boeing strike.
Thomas DeByle: segment operating profit was $2.3 million for Q4 2025 versus $3.7 million in the prior year. We have some benefits. for the aerospace segment as we advance through the fiscal 2026 to include the release of the 2.2 million military transport contract, a major OEM transition to the Tough Raider, and easier comps as we lap the Boeing Strike.
Tom: Segment operating profit was $2 3 million for Q4, 2025 versus $3 7 million in the prior year.
Tom: We have some benefits.
Tom: For the aerospace segment as we advance through the fiscal 2026 to include the release of the $2 2 million military transport contract a major OEM transitioned to the tough freighter.
Tom: And easier comps as we lap the.
Tom: The Boeing strike.
Tom: Looking at our balance sheet and leverage on slide 16, cash and cash equivalents at the end of the quarter were $5 1 million up 700000 from the end of Q3.
Thomas DeByle: Looking at our balance sheet and leverage on slide 16, cash and cash equivalents at the end of the quarter were $5.1 million, up $700,000 from the end of Q3. Funded debt decreased by $2.2 million to $46.7 million from $48.9 million at the end of Q3.
Tom: Funded debt decreased by $2 2 million to $46 7 million from $48 9 million at the end of Q3.
Thomas DeByle: Liquidity was $9.7 million at the end of the quarter, down from Q3 by $5 million. The revolver in our fourth quarter was reduced from $30 million to $25 million on the existing bank agreement with Bank of America, causing a drop in liquidity by $5 million.
Tom: Liquidity was $9 7 million at the end of the quarter.
Tom: Round from Q3 by 5 million <unk>.
Tom: Our revolver and our fourth quarter was reduced from 30 million to $25 million on the existing bank agreement with bank of America, causing a drop in liquidity by $5 million.
Tom: Turning to cash flow on slide 17 in fiscal 2025, we generated cash from operations of $4 8 million compared with $12 4 million for fiscal 2020 for.
Thomas DeByle: Turning to cash flow on slide 17. In fiscal 2025, we generated cash from operations of $4.8 million, compared with $12.4 million for fiscal 2024. free cash flow was $3.7 million versus $11.5 million in the year earlier period.
Tom: Free cash flow was $3 7 million versus $11 5 million in the year earlier period.
Thomas DeByle: Free cash flow for the fourth quarter was $2.4 million, compared with $6.9 million in Q4 of fiscal 2024. This reflected lower debt income from our legacy business, operating losses at Amtec and higher inventory in the 2025 period.
Tom: Free cash flow for the fourth quarter was $2 4 million compared with $6 9 million in Q4 of fiscal 2024.
Tom: This reflected lower that had come from our legacy business operating losses at amtech and higher inventory in the 2025 period.
Tom: Yeah.
Tom: Turning to guidance on slide 18, as we stated in our pre announcement on April seven for fiscal 'twenty. Six we are anticipating that revenue in the range of $160 million to $165 million, representing a year over year growth of seven 4% at the midpoint from FIS.
Thomas DeByle: Turning to guidance on slide 18, as we stated in our pre-announcement of April 7th, for fiscal 26, we are anticipating net revenue in the range of $160 to $165 million, representing a year-over-year growth of 7.4% at the midpoint from fiscal 2025. For the adjusted EBITDA margin, we are anticipating a range of 8.5% to 9.5%, representing a year-over-year growth of 60 basis points from fiscal 25 at the midpoint. There are two key drivers behind our growth assumptions.
Tom: 2025 for.
Tom: The adjusted EBIT margin, we are anticipating a range of eight five to nine 5% representing a year over year growth of 60 basis points from fiscal 'twenty five at the midpoint.
Tom: There are two key drivers behind our growth assumptions first the successful integration of our new print engine and <unk> technology in Pi, which should begin to contribute to our results in the latter part of the fiscal year.
Thomas DeByle: First, the successful integration of our new print engine and ink technology and PI, which should begin to contribute to our results in the latter part of the fiscal year. Second is our new aerospace segment, the continued transition of the OEMs and Airline Direct customers to our Tough Rider branded family of printers from the other brands in our portfolio.
Tom: Second is our new aerospace segment, the continued transition of the Oems and airline direct customers to our tough rader branded family of printers from the other brands in our portfolio.
Greg Woods: Now please turn to slide 19, as I hand, the call back to Greg for his closing comments.
Gregory Woods: Now, please turn to slide 19 as I hand the call back to Greg for his closing comments. Thanks, Tom. In summary, we are laser focused on integrating MTEX's transformative technologies across multiple printer platforms, accelerating growth in supplies and service revenue, and working to unlock new market synergy. By leveraging the proven AstroNova operating system, we are seeking to expand customer offerings, achieve operational excellence, and drive strong returns on investment. and Aerospace. We're advancing the transition of the Toughrader printer line. In the quarters ahead, we also plan to grow the service and supplies portion of the Aerospace product line and drive sales of our new TMX200 data acquisition recorder.
Tom: Okay.
Greg Woods: Thanks, Tom.
Greg Woods: In summary, we are laser focused on integrating <unk>, Texas trends formative technologies across multiple printer platforms accelerating growth in supplies and service revenue and working to unlock new market synergies by.
Speaker Change: By leveraging the proven and asking all of our operating system, we are seeking to expand customer offerings achieve operational excellence and drive strong returns on investment.
Greg Woods: In aerospace, we're advancing the transition of the tough rater printer line.
Greg Woods: In the quarters ahead, we also plan to grow the service and supplies portion of the aerospace product line and drive sales of our new Tms 200 data acquisition recorder.
Greg Woods: Profitability remains the priority.
Gregory Woods: Profitability remains the priority. We aim to increase sales of higher margin hardware and supplies while completing restructuring efforts to streamline operations, take out costs, and position us for sustainable growth. Finally, we're taking decisive action to reduce debt and improve cash flow through an inventory reduction program. These initiatives reflect our commitment to financial discipline and delivering value to our shareholders. We've made solid progress this quarter, but still have work to be done and are excited about the opportunities ahead.
Greg Woods: We aim to increase sales of higher margin hardware and supplies, while completing restructuring efforts to streamline operations take out costs and position us for sustainable growth.
Greg Woods: Finally, we're taking decisive action to reduce debt and improve cash flow through an inventory reduction program.
Greg Woods: These initiatives reflect our commitment to financial discipline and delivering value to our shareholders.
Greg Woods: We've made solid progress this quarter, but still have work to be done and are excited about the opportunities ahead.
Greg Woods: Now, Tom and I'll be happy to take your questions.
Gregory Woods: Now, Tom and I'd be happy to take your questions. Thank you very much.
Greg Woods: Thank you very much if you would like to ask a question. Please press star followed by one on your telephone keypad now if.
Unknown Attendee: If you would like to ask a question, please press star followed by one on your telephone keypad now. If you change your mind or your question has already been answered, please press star followed by.
Greg Woods: If you change your mind or your question has already been answered. Please press star followed by two.
Greg Woods: We will now pause for a moment to get any questions registered.
Unknown Attendee: We will now pause for a moment to get any questions registered.
Mr. Woods: I will now hand back over to Mr. Woods for any closing remarks.
Gregory Woods: I will now hand back over to Mr. Woods for any closing remarks. Thanks everyone for joining the call today, and we look forward to keeping you updated on our progress. Have a good day. Thank you very much.
Greg Woods: Yes.
Greg Woods: Thanks to everyone for joining the call today, and we look forward to keeping you updated on our progress have a good day.
Greg Woods: Thank you very much that concludes today's conference call you may now disconnect your lines.
Unknown Attendee: That concludes today's conference call. You may now disconnect your line.
Greg Woods: Yeah.
Greg Woods: [music].