Q1 2026 AstroNova Inc Earnings Call
Greetings and welcome to Ashland now that's first quarter fiscal year 2026 financial results. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. Please press star zero on your telephone keypad.
Operator: Greetings. Welcome to AstroNova First Quarter Fiscal Year 2026 Financial Results. At this time, all participants are in a listen-only mode.
Operator: A question-and-answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.
As a reminder, this conference is being recorded its now my pleasure to introduce Deborah Pawlowski Investor Relations for Australia.
Deborah Pulaski: It is now my pleasure to introduce Deborah Pulaski, Investor Relations for AstroNova. Thank you. You may be. Thank you and good morning everyone. We certainly appreciate your interest in AstroNova and thank you for sharing your time with us today.
Speaker Change: Thank you you may begin.
Speaker Change: Thank you and good morning, everyone. We certainly appreciate your interest in Astra, Nova and thank you for sharing your time with us today.
Deborah Pulaski: Joining me on our call are Greg Woods, our President and Chief Executive Officer, and Tom DeByle, our Chief Financial Officer. You should have the earnings release that went out this morning as well as the slides that will accompany our conversation today. If not, you can find these documents on the Investor Relations section of our website at AstroNovaInc.com If you would turn to slide two, we'll discuss the cautionary statement. As you are likely aware, during the formal presentation, as well as the Q&A session, management may make some forward-looking statements about our current plans, beliefs, and expectations.
Speaker Change: Joining me on our call are Greg Woods, our President Chief Executive Officer, and Tom to buy all our Chief Financial Officer.
Speaker Change: You shouldn't have the earnings release that went out this morning as well as the slides will accompany our conversation today.
Speaker Change: You can find these documents on the Investor Relations section of our website at <unk>, Inc. Com.
Speaker Change: If you would turn to slide two we will discuss the cautionary statement.
Speaker Change: You are likely aware during the formal presentation as well as the Q&A session management may make some forward looking statements about our current plans beliefs and expectations.
Deborah Pulaski: These statements apply to future events that are subject to risks and uncertainties, as well as other factors that could cause actual results to differ materially from what is stated here today. These risks, uncertainties, and other factors are provided in the earnings release, as well as in other documents filed by the company with Securities and Exchange Commission. These documents can be found on our website or at scc.gov. Also, as noted on the slide, management will refer to some non-GAAP financial measures. We believe these will be useful in evaluating our performance. However, you should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP.
Speaker Change: These statements apply to future events that are subject to risks and uncertainties as well as other factors that could cause actual results to differ materially from what is stated here today.
Speaker Change: These risks uncertainties and other factors are provided in the earnings release as well as in other documents filed by the company with the Securities and Exchange Commission fees.
Speaker Change: These documents can be found on our website or at SEC Gov.
Speaker Change: Also as noted on the slide management will refer to certain non-GAAP financial measures. We believe these will be useful in evaluating our performance.
Speaker Change: However, you should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP.
Deborah Pulaski: You can find reconciliations of non-GAP measures with comparable GAP measures in the tables that accompany today's release and slides.
Speaker Change: Can find reconciliations of non-GAAP measures with comparable GAAP measures in the tables that accompany today's release and slides.
Gregory Woods: Now if you will please turn to slide three, I'll turn the call over to Greg. Greg? Thank you, Debbie, and good morning, everyone, and thank you for joining us.
Greg: Now if you will please turn to slide three I'll turn the call over to Greg Greg.
Greg: Thank you Debbie and good.
Greg: Good morning, everyone and thank you for joining us before I get into the details of the quarter I want to reiterate our strategy.
Gregory Woods: Before I get into the details of the quarter, I want to reiterate our strategy to drive long-term revenue growth and improve profitability. AstroNova has a unique position in the global data visualization market with deeply embedded relationships, high-performance technology, and a strong recurring revenue model. Our goal is to leverage our technologies and market position and our streamlined organization to deliver stronger growth and earning. with more predictable performance.
Greg: Drive long term revenue growth and improved profitability.
Greg: <unk> has a unique position in the global data visualization market, it's deeply embedded relationships.
Speaker Change: Performance technology, and a strong recurring revenue model.
Speaker Change: Our goal is to leverage our technologies and market position and our streamlined organization to deliver stronger growth and earnings.
Speaker Change: With more predictable performance.
Gregory Woods: core to the strategy are three strategic drivers. First, our aerospace segment, which has a leading market share in cockpit printers, is rapidly advancing the transition of customers from our legacy models to our high-performance and high-reliability Toughwriter printers. This transaction deepens our position with leading aerospace customers, decouples us from royalty costs associated with legacy products, and simplifies our product portfolio, which reduces supply chain complexity and inventory levels, improving cash generation and margins. The transition also enables us to capture a larger percentage of aftermarket sales. Our Tough Rider technology enables us to better leverage the positive macro backdrop of the commercial aerospace market as both Boeing and Airbus continue to ramp up their build rate.
Speaker Change: Core to the strategy, our three strategic drivers.
Speaker Change: First our aerospace segment, which has a leading market share in cockpit printers is rapidly advancing the transition of customers from our legacy models for our high performance and high reliability tough writer printers.
Speaker Change: This transaction deepens, our position with leading aerospace customers decoupled from royalty costs associated with legacy products, and simplifying our product portfolio, which reduces supply chain complexity and inventory levels, improving cash generation and margins.
Speaker Change: The transition also enables us to capture a larger percentage of aftermarket sales.
Speaker Change: Our tough writer technology enables us to better leverage the positive macro backdrop of the commercial aerospace market as both Boeing and Airbus continuing to ramp up their build rates.
Gregory Woods: The second strategic driver is the launch of highly disruptive next-generation product identification solutions. These commercial-scale printing solutions unlock new end markets with large customers that have higher volume printing needs. They also allow us to better control the supply chain for our ink and critical print engine components, lowering costs over time. This provides more avenues for growth, and we have already been gaining traction with both new and existing customers.
Speaker Change: The second strategic driver is the launch of highly disruptive next generation product identification solutions.
Speaker Change: These commercial scale printing solutions unlock new end markets with large customers that have higher volume printing needs.
Speaker Change: They also allow us to better control the supply chain for our ink and critical print engine components.
Speaker Change: Lowering costs over time.
Speaker Change: This provides more avenues for growth and we have already been gaining traction with both new and existing customers.
Gregory Woods: And the third strategic driver is further streamlining operations through headcount reductions and restructuring while strengthening segment-level accountability. We are working to structure incentive compensation with key performance indicators, including growth, profitability, cash generation, and earnings per share to further improve alignment between management and shareholders. We are laser focused on executing this strategy.
Speaker Change: And the third strategic driver.
Speaker Change: There's further streamlining operations through head count reductions and restructuring while strengthening segment level of accountability.
Speaker Change: We are working to structure incentive compensation with key performance indicators, including growth.
Speaker Change: Profitability cash generation and earnings per share to further improve alignment between management and shareholders.
Speaker Change: We are laser focused on executing this strategy.
Gregory Woods: With that, if you'll turn to slide four, let me touch on the quarterly highlights. We believe that our first quarter of fiscal 2026 results are an early indication of the traction we are making with our strategy. We delivered double-digit growth in both segments and increased consolidated adjusted operating income by 13.5% year-over-year. This was driven by our continued Tough Rider transition. renewed defense shipments of half a million dollars, higher demand for our desktop label printers, and a $1.4 million increase in product sales from last year's acquisition. We also accelerated our previously announced $3 million annualized cost reduction plan by completing $1.9 million of annualized cost-saving actions in the quarter, most of which will begin to be realized in the second quarter.
Speaker Change: With that if you'll turn to slide four let me touch on the quarterly highlights.
Speaker Change: We believe that our first quarter of fiscal 2026 results are an early indication.
Speaker Change: Of this traction we are making with our strategy.
Speaker Change: Delivered double digit growth in both segments and increased consolidated adjusted operating income by 13% year over year.
Speaker Change: This was driven by a continued tough writer transition.
Speaker Change: Renewed defense shipments of half a million dollars higher demand for our desktop label printers.
Speaker Change: And a $1 4 million dollar increase in product sales from last year's acquisition.
Speaker Change: We also accelerated our previously announced 3 million dollar annualized cost reduction plan by completing $1 $9 million of annualized cost saving actions in the quarter.
Speaker Change: Most of which will begin to be realized in the second quarter.
Gregory Woods: We plan to complete the remainder of the cost-saving actions in the second quarter.
Speaker Change: We plan to complete the remainder of the cost saving actions in the second quarter.
Gregory Woods: During Q1, we launched three next-generation product identification solutions ahead of schedule. The QL425 and the QL435 were launched as an extension of our flagship QuickLabel line of high-resolution color-label printers, bringing a new level of speed, flexibility, and cost efficiency to our professional labeling customers. We also released a new direct-to-package printer, the AJ800, which enables printing on sustainable packaging materials like corrugated cardboard, die-cut boxes, and paper bags, as well as wood. and the AG 800 expands our product portfolio into larger print media and higher volume production. We are ahead of schedule with the rollout of two additional next generation products that we have in our pipeline.
Speaker Change: During Q1, we launched three next generation product and application solutions ahead of schedule.
Speaker Change: The Q O four to five and the Q 0435 were launched as an extension of our flagship quickly a whole line of high resolution color label printers.
Speaker Change: A new level of speed flexibility and cost efficiency to our professional labeling customers.
Speaker Change: We also released a new direct to package printer the H 800.
Speaker Change: Which enables printing on sustainable packaging materials like corrugated cardboard.
Boxes, and paper bags as well as wood.
Speaker Change: And the H 800 expands our product portfolio into larger print media and higher volume production.
Speaker Change: We are ahead of schedule with the rollout of two additional next generation products that we have in our pipeline.
Gregory Woods: These are expected to be launched in this second quarter.
Speaker Change: These are expected to be launched in the second quarter.
Gregory Woods: In Q1, we up-trained and upgraded our sales team, implemented a new targeted sales strategy under our recently appointed segment leadership, and restructured our go-to-market approach. We are pleased with the progress the team has made already and encouraged by the early interests and orders they have generated.
Speaker Change: In Q1, we upped trained and upgraded our sales team.
Speaker Change: In Florida, a new targeted sales strategy under our recently appointed segment leadership.
Speaker Change: And restructured our go to market approach.
Speaker Change: We're pleased with the progress the team has made already and encouraged by the early interest and orders they have generated.
Gregory Woods: In aerospace, at the end of the quarter, we announced a renewed $10 million multi-year contract win for the delivery of our Tough Raider products over the next five years to a prime defense contractor. and shipments on this program began late in Q1. We expect to realize $1.7 million of revenue this fiscal year from this program.
Speaker Change: In aerospace.
Speaker Change: We ended the quarter, we announced a renewed $10 million multiyear contract win for the delivery of our tougher air products over the next five years to a prime defense contractor.
Speaker Change: And shipments on this program began late in Q1.
Speaker Change: We expect to realize $1 $7 million of revenue this fiscal year from this program.
Gregory Woods: The hard work and hard decisions we made over the past six months are improving results, but we still have more work to do. We expect our margin profile and aftermarket sales to strengthen as the rollout of our new product ID solutions gain market acceptance and our tough rate of transition continues to advance.
Speaker Change: The hard work and hard decisions, we made over the past six months, our improving results but.
Speaker Change: But we still have more work to do.
Speaker Change: We expect our margin profile and aftermarket sales to strengthen as the rollout of our new product ideas solutions gain market acceptance and are tougher to transition continues to advance.
Gregory Woods: For the full year, we continue to expect to deliver revenue in the range of $160 to $165 million and adjusted EBITDA margin in the range of 8.5% to 9.5%. This is a critical juncture for AstroNova, and we are confident in our ability to deliver long-term shareholder value through the focused execution of our strategy.
Speaker Change: For the full year, we continue to expect to deliver revenue in the range of $160 million to $165 million and adjusted EBITDA margin in the range of 8.5% to 95%.
Speaker Change: This is a critical juncture for.
Speaker Change: Astra, Nova and we are confident in our ability to deliver long term shareholder value through the focused execution of our strategy.
Gregory Woods: Looking at slide 5, we review orders and backlog and discuss the opportunities we are seeing in our markets. Earth quarter orders of $34.9 million were up 5.4% or $1.8 million compared with prior year period, driven by a combination of higher demand for new and existing product identification hardware and supplies. Product ID orders were up $3.3 million to $26.2 million.
Speaker Change: Looking at slide five.
Speaker Change: We will review orders in backlog and discuss the opportunities we are seeing in our markets.
Speaker Change: First quarter orders of $34 $9 million.
Speaker Change: We're up five 4% for $1.8 million compared with prior year period, driven by a combination of higher demand for new and existing products unification hardware and supplies.
Speaker Change: Product orders were up $3 3 million to $226 2 million.
Gregory Woods: We secured a three-year label supply contract with a multinational beauty company, which is a new account for us. We also captured a renewed upsized contract from a large private label coffee grocer in the UK. This current customer also will be upgrading its entire fleet of quick label printers.
Speaker Change: We secured a three year labor supply contract with a multinational beauty company, which is a new account for us.
Speaker Change: Also captured a renewed upsized contract from a large private label coffee roaster in the U K.
Speaker Change: This current customer also will be upgrading its entire fleet label printers.
Gregory Woods: While declines of $1.5 million in aerospace orders partially offset overall order growth, we continue to have strong demand for tough riders, reflecting the improved bill rates of the major commercial aircraft OEMs. As we have previously pointed out, Aerospace orders can vary quarter to quarter based on timing of customer contract.
Speaker Change: While declines of one and a half million dollars in aerospace orders, partially offset overall order growth.
Speaker Change: Continued to have strong demand for tough writers, reflecting the improved bill rates, but the major commercial aircraft Oems.
Speaker Change: As we have previously pointed out.
Speaker Change: Aerospace orders can vary quarter to quarter based on timing of customer contracts.
Gregory Woods: For example, shortly after the end of Q1, we received a $1 million Tough Raider printer order from an in-flight entertainment customer. During the quarter, we did also further expand our space launch data acquisition business.
Speaker Change: Example, shortly after the end of Q1.
Speaker Change: Seemed a $1 million tougher it or printer order from an in flight entertainment customer.
Speaker Change: During the quarter. We did also further expand our space launch data acquisition business.
Gregory Woods: We secured an order from a new customer, Amazon Kuiper Systems, for our data acquisition systems to be used on their low-Earth orbit satellite program. Backlog for the quarter declined by $2.8 million year-over-year to $25.5 million, primarily driven by clearing previously delayed shipments. As we move through fiscal 2026, we expect to benefit from our new product introductions and the increasing build rates with Airbus and Boeing.
Speaker Change: We secured an order from a new customer Amazon paper systems for our data acquisition systems to be used on their low Earth orbit satellite program.
Speaker Change: Backlog for the quarter declined by $2 $8 million year over year to $25 $5 million, primarily driven by clearing previously delayed shipments.
Speaker Change: As we move through fiscal 2020 six we expect to benefit from our new product introductions, and the increasing build rates with Airbus and Boeing.
Gregory Woods: Before I pass the call over to Tom, please turn to slide six, and I will touch on what we are seeing regarding tariffs. The headline commentary is that so far the impacts have been negligible for our business. Our aerospace shipments are insulated from many of the tariffs due to the contracts we have in place, which essentially hedge our exposure on the sales side. Most of our exposure comes from the component part. However, due to the expense and regulatory difficulties associated with making changes to aerospace avionics, we typically carry large inventories of the most critical components.
Speaker Change: Before I pass the call over to Tom.
Speaker Change: Please turn to slide six and I will touch on what we are seeing regarding tariffs.
Speaker Change: The headline commentary is that so far the impacts have been negligible for our business.
Speaker Change: Our aerospace shipments are insulated from many of the tariffs due to the contracts we have in place, which essentially hedge our exposure on the sales side.
Speaker Change: Most of our exposure comes from the component parts.
Speaker Change: However, due to the expense and regulatory difficulties associated with making changes to arris aerospace avionics, we typically carry large inventories of the most critical components.
Gregory Woods: This gives us a multi-month protection from vendor and or tariff issues.
Speaker Change: This gives us a multi month protection from vendor indoor tariff issues.
Gregory Woods: For product ID, our next generation print engine allows us to source ink from across the world, providing flexibility on supply cost. Additionally, our global manufacturing presence in the United States, Europe, and Canada gives us more options for rerouting our shipments. To further combat tariffs, we implemented price increases on April 1st and tariff surcharges in the first week of May. We continue to remain agile and look for ways we can partner with and source from alternative suppliers to minimize cost impact.
Speaker Change: For prototype D. Our next generation print engine allows us to sourcing from across the world providing flexibility on supply costs.
Speaker Change: Additionally, our global manufacturing presence in the United States, Europe, and Canada gives us more options for rerouting our shipments.
Speaker Change: To further combat tariffs, we implemented price increases on April 1st and tariff surcharges in the first week of May.
Speaker Change: We continue to remain agile and look for ways, we can partner with and sourced from alternative suppliers to minimize cost impacts.
Thomas DeByle: And I'll hand the call over to Tom for the financial review. Thank you, Greg.
Tom: I'll now hand, the call over to Tom for the financial review.
Speaker Change:
Tom: Thank you Greg good morning, everyone on.
Thomas DeByle: Good morning, everyone. On slide seven, you can see our first quarter revenue of $37.7 million through 14.4% year-over-year and 0.9% sequentially. 83% of the quarter's revenue was reoccurring.
Tom: On slide seven you can see our first quarter revenue of $37 7 million grew 14, 4% year over year and 0.9% sequentially.
Tom: 83% of the quarter's revenue was reoccurring.
Thomas DeByle: The first quarter is a seasonally slow quarter, so we expect improvements throughout fiscal 2026. Year-over-year revenue growth was 13.8% in product identification and 16.8% in aerospace. Product identification sales increased for the quarter was driven by 1.4 million incremental MTEK sales and higher demand for tabletop and direct-to-package printers and supplies. Importantly, we unveiled three new product identification solutions at the FESPA Global Print Expo in Germany. We expect these product launches to help drive product identification hardware sales in the second half of fiscal 26, with continued growth of our recurring media and supply sales as we increase the install base.
Tom: First quarter is a seasonally slow quarter. So we expect improvements throughout fiscal 2026.
Tom: Year over year revenue growth was 13, 8% and product dynamic vacation and 16, 8% and aerospace.
Tom: Product identification sales decrease for the quarter was driven by $1 4 million incremental amtech sales and higher demand for tabletop interactive package printers and supplies.
Tom: Importantly, we unveiled three new product identification solutions at the basketball global print textbook in Germany.
Tom: We expect these product launches to help drive product identification hardware sales in the second half of fiscal 'twenty, six but continued growth of our reoccurring media and supply sales as we increase the install base.
Thomas DeByle: For aerospace, increased printer shipments to a major OEM and the carryover of shipments to a defense contractor under the recently renewed contract primarily drove revenue growth. The $10 million multi-year contract award began shipping in the first quarter, and we expect to ship the remaining portion of the expected $1.7 million in orders before our fiscal year end. We also expect an increase in the Tough Rider shipments from an existing commercial aerospace customer beginning in the second quarter as we transition away from the legacy cockpit printers. Tough Rider aerospace printers were 42% of the first quarter shipments, and we remain on track to double the percentage by the fiscal year end.
Speaker Change: For aerospace increased printer shipments to a major OEM and the carryover of shipments to a defense contractor under the recently renewed contract primarily drove revenue growth.
Speaker Change: The $10 million multi year contract, where it began shipping in the first quarter and we expect to ship. The remaining portion of the expected $1 7 million in orders before our fiscal year and we also expect an increase in the tough writer shipments from an existing commercial aerospace customer beginning in the second quarter.
Speaker Change: As we transition away from the legacy Cott printer.
Speaker Change: Printers.
Speaker Change: Operator, aerospace printers were 42% of the first quarter shipments and we remain on track to double the percentage by the fiscal year at.
Thomas DeByle: Turning to slide 8, gross profit was $12.7 million, a $1.7 million increase year-over-year, representing 33.6% of sales. Adjusted gross profit was $13.1 million, a $1.1 million increase year-over-year, representing 34.6% of sales. The increase in gross profit was primarily driven by higher sales volume, but year-over-year margin was negatively impacted by delusion related to the acquisition and a legacy aerospace printer contract, which we expect to be completed by the end of the second quarter of fiscal 2026. On an adjusted basis, gross margin increased 30 basis points from the trailing period, reflecting higher volume in the quarter.
Speaker Change: Turning to slide eight gross profit was $12 7 million.
Speaker Change: One 7 million increase year over year, representing 33, 6% of sales.
Speaker Change: Adjusted gross profit was $13 1 million or $1 1 million increase year over year, representing 34, 6% of sales.
Speaker Change: The increase in gross profit was primarily driven by higher sales volume, but year over year margin was negatively impacted by dilution related to the acquisition and our legacy aerospace printer contract, which we expect to be completed by the end of the second quarter of fiscal 2026.
Speaker Change: On an adjusted basis gross margin increased 30 basis points from the trailing period, reflecting higher volume in the quarter.
Thomas DeByle: Going forward, we expect gross profit and margin to improve throughout fiscal 26 as we increase the percentage of Tough Rider sales and the next generation product ID printer sales and supplies. Looking at slide 9, product ID operating income for the quarter was $2.8 million, or 10.6% of sales, compared with $3 million in the prior year period. On a non-GAAP basis, operating income was $3.1 million, or 11.9% of revenue. The year-over-year and quarter-over-quarter improvement in non-GAAP operating income was driven by higher sales and was partially offset by lower margins on the acquired legacy technology. Looking at slide 10, aerospace operating income for the quarter was $2.8 million, a 24.2% of sales, compared to $1.7 million in the prior year period.
Speaker Change: Going forward, we expect gross profit and margin improved throughout fiscal 'twenty six as we increase the percentage of tougher later sales in the next generation product I D printer sales and supplies.
Speaker Change: Looking at slide nine product IV operating income for the quarter was $2 8 million or 10, 6% of sales compared with $3 million from the prior year period.
Speaker Change: On a non-GAAP basis.
Speaker Change: Operating income was $3 1 million or 11, 9% of revenue.
Speaker Change: The year over year and quarter over quarter improvement in non-GAAP operating income was driven by higher sales was partially offset by lower margins on the acquired legacy technology.
Speaker Change: Looking at Slide 10, aerospace operating income for the quarter was $2 8 million or 24, 2% of sales.
Speaker Change: Compared to $1 7 million in the prior year period.
Thomas DeByle: On a non-GAAP basis, operating income was $2.9 million, or 25.7% of revenue. The sequential and the year-over-year growth of operating income and margin were driven by improved product mix as we transitioned commercial and defense customers to our higher margin Tough Rider solutions and benefited from operating leverage gained on higher volume. Operating income was partially offset by legacy printer contract that is expected to be completed in the second quarter.
Speaker Change: On a non-GAAP basis operating income was $2 9 million or 25, 7% of revenue.
Speaker Change: The sequential and the year over year growth of operating income and margin were driven by improved product mix as we transition commercial and defense customers to our higher margin stuff writer solutions and benefited from operating leverage gained on higher volume.
Speaker Change: Operating income was partially offset by legacy printer contract that is expected to be completed in the second quarter.
Thomas DeByle: Aerospace operating expense was lowered year over year as we benefited from a 0.3 million reserve reversal related to a commercial airline.
Speaker Change: Aerospace operating expense was lower year over year as we benefited from a point $3 million reserve reversal related to a commercial airline.
Thomas DeByle: Turning to slide 11. Net loss was $0.4 million or a negative $0.05 per share compared with net income of $1.2 million or $0.15 per share in the prior year period. Adjusted net income was $0.4 million or $0.05 per share.
Speaker Change: Turning to slide 11.
Speaker Change: Net loss was <unk> 4 million or a negative five cents per share compared with net income of $1 2 million or <unk> 15 per share in the prior year period.
Speaker Change: Adjusted net income was <unk> 4 million or five cents per share.
Thomas DeByle: Adjusted EBITDA of $3.1 million increased 27.6% compared with the prior year period and grew 28% compared with the trailing fourth quarter of fiscal 25. Adjusted EBITDA margin for the first quarter expanded 80 base points year over year and sequentially.
Speaker Change: Adjusted EBITDA of $3 1 million increased 27, 6% compared with the prior year period and grew 28% compared with the trailing fourth quarter of fiscal 'twenty five adjust.
Speaker Change: Adjusted EBIT margin for the first quarter bad at 80 basis points year over year and sequentially.
Thomas DeByle: We are expecting operating expenses to benefit from the restructuring program for the remainder of fiscal 26.
Speaker Change: We are expecting operating expenses to be benefit from the restructuring program for the remainder of fiscal 'twenty six.
Thomas DeByle: Moving to slide 12, during the quarter we strengthened our balance sheet by paying down $3.9 million in debt and improved liquidity. We ended the quarter with $12.6 million in total liquidity, including $5.4 million in cash and $7.2 million in revolver availability. Our leverage ratio of funded debt to EBITDA is 3.5 times.
Speaker Change: Moving to slide 12 during the quarter, we strengthened our balance sheet by paying down $3 9 million in debt and improve liquidity. We ended the quarter with $12 6 million and total liquidity, including $5 4 million in cash and $7 $2 million in revolver availability.
Speaker Change: Our leverage ratio of funded debt to EBITDA is three five times, our targeted leverage ratio is approximately two times at the end of the quarter, we were in compliance with our covenants of our lending agreement.
Thomas DeByle: Our targeted leverage ratio is approximately 2 times. At the end of the quarter, we are in compliance with our covenants of our lending agreement. Cash provided by operations in the first quarter was $4.4 million, down from $6.9 million in the prior year period. The decline was primarily driven by the timing of associated with bulk replenishment of legacy ink, printheads, and media supplies, mounting to about $3 million.
Speaker Change: Cash provided by operations in the first quarter was $4 4 million down from $6 9 million in the prior year period. The decline was primarily driven by the timing of associated with bulk replenishment of legacy ink print heads and media supplies amounting to about $3 million.
Thomas DeByle: We are focused on improving our inventory terms from current levels of approximately two times to more than three times over the fiscal 26 and 27 years. Capital expenditures were $60,000 in the quarter, and we expect to be less than $2 million for the full fiscal year.
Speaker Change: We are focused on improving our inventory turns from current levels of approximately two times to more than three times over the fiscal 'twenty six 'twenty seven years capital expenditures were 60000 in the quarter and we expect.
Speaker Change: To be less than $2 million and for the full fiscal year.
Gregory Woods: Now please turn to slide 13 and I'll hand the call back to Greg for closing comments.
Greg: Now please turn to slide 13, and I'll hand, the call back to Greg for closing comments.
Gregory Woods: Thanks, Tom. We are executing a clear strategy to deliver revenue growth and improve our profitability. We have implemented changes in the organization and are working diligently to deliver on our strategic plan. We believe that this quarter reflected a positive turning point in our business as we gained traction in both of our segments and controlled our costs. We have several catalysts that we are confident will propel our growth in fiscal 2026 and beyond. First, we are focused on launching our innovative product ID solutions, three of which have already been launched and are receiving strong customer interest and orders.
Greg: Thanks, Tom.
Greg: We are executing a clear strategy to deliver revenue growth and improve our profitability.
Greg: We have implemented changes in the organization and are working diligently to deliver on our strategic plan.
Speaker Change: I believe that this quarter reflected a positive turning point in our business as we gain traction in both of our segments and controlled our costs.
Speaker Change: We have several catalysts that we are confident will propel our growth in fiscal 2026 and beyond.
Speaker Change: <unk>.
Speaker Change: We are focused on launching our innovative product ideas solutions three of which have already been launched and are receiving strong customer interest and orders.
Gregory Woods: We expect to launch six more disruptive solutions before the end of fiscal 2026. Second, we continue to make rapid progress on the Tough Rider transition program with several large commercial and defense customers transitioning to Tough Riders that will ramp up shipping in Q2 and beyond. Importantly, we are looking critically at our cost structure and cash flow generation. We are on track to complete our $3 million cost reduction program by Q2, and we will continue to manage our costs prudently as we roll out next generation and higher margin solutions across our product ID and aerospace segments.
Speaker Change: We expect to launch six floor disruptive solutions before the end of fiscal 2026.
Speaker Change: Second.
Speaker Change: We continue to make rapid progress on the tough rate of transition program with several large commercial and defense customers transitioning to tough writers that will ramp up shipping in Q2 and beyond.
Speaker Change: Importantly, we are looking critically at our cost structure and cash flow generation.
Speaker Change: We are on track to complete our $3 million cost reduction program by Q2, and we will continue to manage our cost prudently as we rollout next generation and higher margin solutions across our product I D and aerospace segment.
Gregory Woods: We believe the actions we have taken in the past 6 to 12 months put us in a position to scale into new end markets and new geographies with high margin solutions. Furthermore, we have additional long-term opportunities to improve margins through the roll-off of royalties from legacy cockpit printers and through our multi-source ink supply program based on our new print engine technology.
Speaker Change: We believe the actions we have taken in the past six to 12 months, but it's in a position to scale into new end markets and new geographies with high margin solutions.
Speaker Change: Furthermore.
Speaker Change: We have additional long term opportunities to improve margins through the roll off of royalties from legacy cockpit printers and through our multi source ink supply program based on our new print engine technology.
Gregory Woods: We are reiterating our guidance for the full year of fiscal 2026. We expect to deliver full-year revenue of $160 million to $165 million, a 7% year-over-year increase at the midpoint, an adjusted EBITDA margin in the range of 8.5% to 9.5%, or an 80 basis point expansion year-over-year at the midpoint. In summary, we are pleased with the progress that has been made this quarter, but we have more work to do. I want to thank our team for their hard work and positioning us for the future. We remain confident in our plan and believe we have the right people, infrastructure and go-to-market strategy in place to drive long-term growth and profitability.
Speaker Change: We are reiterating our guidance for the full year of fiscal 2026.
Speaker Change: We expect to deliver full year revenue of 116 million to 165, million% to 7% year over year increase at the midpoint.
Speaker Change: And adjusted EBITDA margin in the range of 85%, 95% or an 80 basis point expansion year over year at the midpoint.
Speaker Change: In summary, we are pleased with the progress that has been made this quarter, but we have more work to do.
Speaker Change: I want to thank our team for their hard work and position us for the future.
Speaker Change: We remain confident in our plan and believe we have the right people infrastructure and go to market strategy in place.
Speaker Change: <unk> long term growth and profitability.
Gregory Woods: Now, Tom and I will be happy to take your questions. Thank you.
Speaker Change: Now, Tom and I will be happy to take your questions.
Speaker Change: Thank you if he would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue.
Operator: If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.
Operator: And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Operator: Once again, it is star 1 on your telephone keypad if you would like to ask a question, and we will pause for a brief moment to poll for questions. Once again, we will pull for questions.
Speaker Change: Once again it is star one on your telephone keypad, if he would like to ask a question and we will pause for a brief moment to poll for questions.
Speaker Change: Once again.
Speaker Change: He will poll for questions.
Speaker Change: Well just pledged for one brief moment see if there are any final questions.
Operator: Please pause for one brief moment to see if there are any final questions.
Operator: There are no questions at this time.
Speaker Change: There are no questions at this time I would like to turn the conference back over to management for closing remarks.
Operator: I would like to turn the conference back over to management for closing remarks. Great, thank you and thank everyone for joining us here today. We look forward to keeping you updated on our progress at AstroNova and enjoy the weekend and we'll talk to you guys. Thank you.
Speaker Change: Great. Thank you and thank everyone for joining us here today, we look forward to keeping you updated on our progress at Astro Nova.
Speaker Change: Enjoy the weekend and we'll talk to you guys soon.
Speaker Change: Have a good. Thank you. This will conclude today's conference you may disconnect. Your lines at this time and thank you for your participation.
Operator: This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].