Earnings Labs

AstroNova, Inc. (ALOT)

Q1 2016 Earnings Call· Tue, May 19, 2015

$13.78

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Transcript

Operator

Operator

Good day and welcome to the Astro-Med First Quarter Fiscal 2016 Financial Results Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to David Calusdian of Sharon Merrill Associates. Please go ahead, sir.

David Calusdian

Management

Thank you and good morning everyone. Hosting this morning’s call are Greg Woods, Astro-Med’s President and CEO, and Joe O’Connell, Senior Vice President and CFO. Greg will begin today’s call by reviewing the company’s operating highlights and business outlook. Joe will then take you through the financials. Greg will make some concluding comments and then management will be happy to take your questions. By now, you should have received a copy of the news release which was issued earlier today. If you have not received a copy, please go to the investor section of the company’s website, www.astro-medinc.com. Please note that statements made during this call that are not statements of historical fact are considered forward-looking statements within the meaning of the Securities and Exchange Act of 1934. These forward-looking statements are based on a number of assumptions that could involve risks and uncertainties. Actual results could differ materially. Such forward-looking statements speak only as of the date made, except as required by law, the company undertakes no obligation to update these forward-looking statements. For further information regarding the forward-looking statements and the factors that may cause differences, please see the company’s risk factors in the company’s annual report on Form 10-K and other filings Astro-Med makes with the Securities and Exchange Commission. I’ll now turn the call over to Greg Woods.

Greg Woods

Management

Thanks, David, and good morning everyone. There are three key points I’d like to cover on today’s call. First, we delivered strong first quarter results while continuing to invest strategically to introduce new products, enhance our operations and grow our business. Second, as evidenced by the record orders received in Q1, the strategic steps we have taken to focus the company on data visualization technology are contributing to a high level of demand both here in the U.S. and abroad. And third, we are seeing that our emphasis on continuous improvement and operational excellence is putting the company on a path towards improved profitability and working capital utilization. In a minute Joe will discuss our financial results in detail, but let me take you through the Q1 highlights. The first quarter of this year marked the eight consecutive quarter in which we have registered year-on-year revenue growth. Net sales were up 7% for the quarter to $22.2 million with growth across all product lines and geographic markets. Earnings per share were up 14% to $0.16 in the first quarter of fiscal 2016 from $0.14 in the same period last year. And gross margin after dipping below our target range in Q4 came back up to 40.7% in the first quarter. So what’s driving our performance? Well there a number of factors at work here. They are driven by our strategic focus on data visualization technology. First and foremost we’re a technology company and more specifically we are innovators in the field of data visualization technology. Our products are based on it, our R&D is focussed on it; we are committed to developing it and owning it, both through organic initiatives and potential M&A opportunities. Everything we do revolves around improving our customer’s ability to visually communicate, interpret and impart information…

Greg Woods

Management

Thanks, Joe. At the start of this morning’s call I opened by referencing three themes. I’d like to restate them again now as we wrap up. First, the strong Q1 results, record orders with improving revenue and profitability. Second, our focus data visualization technology strategy is gaining traction. We are seeing robust demand for our products in the U.S. and abroad, we are having an increasing number of sales conversations with Global 1000 organizations interested in multi unit orders for several countries. And third, our operational excellence efforts are paying off. Sales per employee is up again this quarter from 232,000 to 269,000 per employee and our inventory was reduced by over $1 million. In summary, we expect to deliver another year of strong growth and profitability in fiscal 2016 while making new investments and improvements necessary to generate increasing returns for our shareholders. Finally, as we did last year at this time we will close with full year guidance based on the current business environment we expect to generate revenue for fiscal 2016 in the range of $93 million to $103 million and earnings per diluted share of between $0.70 and $0.75. With that, Joe and I will be happy to take your questions. Operator?

Greg Woods

Management

Well great. Well thanks everyone for joining us here this morning. We look forward to keeping you updated on our progress, and enjoy the rest of the day. Thank you. Joe O’Connell: Bye now.