Good day and welcome to the AstroNova third quarter 2020 financial results conference call. Today’s conference is being recorded. At this time, I would like to turn the call over to Scott Solomon from the company’s investor relations firm, Sharon Merrill Associates. Sir, please go ahead.

Thank you Brittany. Good morning everyone and thank you for joining us. Hosting this morning’s call are Greg Woods, AstroNova’s President and CEO, and David Smith, the company’s Chief Financial Officer. Greg will discuss the company’s operating results, David will 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 earnings release that was issued today. If you do not have a copy, please go to the Investors section of the AstroNova website, www.astronovainc.com. Please note that statements made during 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 1934. 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. Any forward-looking statements speak only as of today, December 4, 2019. 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 Risk Factors in AstroNova’s annual report on Form 10-K and the other filings the company makes with the Securities and Exchange Commission. I’ll now turn the call over to Greg.

Thank you Scott. Good morning everyone. Thank you for joining us on today’s call. AstroNova’s third quarter results reflected a continuation of the industry headwinds that affected revenue mix and margins in both our product identification and test and measurement segments in the second quarter of this fiscal year. As noted on our Q2 call, these near term challenges do not compromise our confident positive outlook or the strong secular tailwinds that we believe position us well for long term profitability and growth. We continue to focus on accelerating revenue growth in areas not impacted by these specific headwinds and on improving operational efficiencies throughout the company. Additionally, we are continuing to invest in new products and technologies as well as strengthening our global talent to achieve our long term strategic objectives. Looking at our segments, test and measurement continued to be adversely affected by the ripple effect related to the grounding of the 737 MAX which has been idled since March. As we discussed on our Q2 call, this grounding affects us not only in terms of new installs but also deferrals on optional maintenance and retrofit printer upgrades to aircraft that are needed to fill the void until the MAX returns to service. As to when that will be, the status of the situation is well covered by the industry and general business press. Based on that information, we expect that the effects will continue through the fourth quarter and likely impact the first quarter as well. Boeing’s longer term outlook for the airplane remains robust, which bodes well for our long term business as well. On a previous call, I also referenced the delay of a multi-year upgrade contract for the military avionics and related networking gear. The good news on that front is that we began…

Thanks Greg, and good morning everybody. Revenue for the quarter came in at $33.3 million versus $34.2 million for the same period last year. Through the first nine months of the current fiscal year, revenue was $103 million compared with $99.5 million for the year earlier period. Domestic revenue was $21.8 million in the third quarter and accounted for 65.5% of total sales. International revenue was $11.5 million or 34.5% of total revenue. Year to date domestic revenue was $64.5 million or 62.6% of total sales, while international revenue was $38.5 million or 37.4% of total sales. Hardware revenue in the quarter was $12.2 million, down $900,000 from last year primarily for the aerospace printer and Asian customer issues that Greg mentioned. Supplies revenue was $17.7 million, down $400,000 from last year as declines in QuickLabel printer-related supplies was partly offset by good increases on the TrojanLabel side. Service and other revenue was $3.5 million, a 17% increase from last year primarily due to parts and repairs for aerospace printers. The noticeable impact of the 737 issue Greg mentioned was tempered somewhat by an increase in the test and measurement product line and the sales of the ToughSwitch products in aerospace. The gross margin decline of 380 basis points from last year’s third quarter to 36.9% is a function of lower sales in aerospace and adverse mix dynamics in both segments. Operating expenses in the third quarter were up $300,000 from a year ago, all in selling and marketing due primarily to the heavy fall trade show calendar this year. As a result of that plus the adverse mix dynamics and lower revenue growth, third quarter segment operating profit was $3.3 million or 9.8% compared with $5.2 million or 15.2% a year ago. Year to date segment operating profit was…

Thanks David. In summary, our overall outlook remains positive and we continue to expect modest revenue growth in fiscal 2020. While the combination of industry headwinds and investments we are making in future growth are likely to impact near term results, we are confident in our long term growth prospects and are well positioned to address favorable secular growth trends across our business. Now I’ll be happy to take your questions. Operator?

[Operator instructions] Our first question comes from Dick Ryan with Dougherty.

Thank you. Hopefully you can hear me, guys. I’ve got a bad reception here.

Yes, we can hear you.

Okay, great. As you see the MAX issues likely linger even into Q1, can you maybe give a little bit more specifics how did that look versus the previous quarter, and maybe on the Airbus side of the business, is everything going along well there?

Yes, last part first. Airbus is going fine, it’s not affected by this 737 MAX. They may be gaining a few more orders, but that’s years out, so no impact, and we’re seeing actually a nice growth in the Airbus units quarter over quarter, so Airbus is not an issue. On the Boeing, yes, like I mentioned in my comments, if you go to the Boeing website, you can see what they say there. They keep inching it out. The latest thing that they’re projecting, I looked at it again this morning, is they still expect to have an approval from the FAA this quarter, so for them that means this month. If they get that, then it’s a matter of what does that actually say and what are the retraining requirements going to be, so that’s why we say it’s going to impact not only Q4 but Q1, because it’s likely there will be some training requirements and then you have to restart a lot of these aircraft on the ground, so there’s kind of a restarting program to get that going.

Okay. [Indiscernible] moving from a global footprint there. How should we see that flowing through in the quarters down the road? Will we be seeing better efficiency turn into higher margins, or what should we be looking for?

We don’t boil those specific changes down. The reason we did it, though, is both to accelerate the revenue side of things, so by having different groups in different parts of the world doing different things, we’re not as efficient as we should be, so certainly the efficiencies should help us on the profitability, but I think more importantly on the revenue growth side. We can spot a trend in one part of the world and very rapidly disseminate that to all the players around the world, either to challenge that or confirm that, and then we can take appropriate actions in a much more timely manner. In going through our records, and before we made these changes, that was one of the big things that we looked at, is a nice improvement to our overall sales effectiveness by having a single point of command there, so that’s why we made that change. We started some of the lower level adjustments in Q2 and then Q3, we put these three leaders in place that we’re very excited about and they’re very knowledgeable on that business.

Okay. Dave, you mentioned on opex, sort of trade shows and whatever coming through in the quarter. How should we look at opex going forward over the next few quarters?

There’s not--we don’t really predict exactly how that’s going to flow, but there’s no--let’s put it this way. There is no crazy high expenses that we see, other than the typical year-end trade shows are the big thing that we have. Again, we’re planning on attending those, Label Expo and Pack Expo this year. We did add drupa to the mix, which is a new show for us, but that’s only every several years, so we wanted to make sure we participated in that show. That’s every three or four years. drupa would be in the end of our second quarter, and then the other two shows are in our third quarter.

Great, thanks Greg.

Sure, talk to you later, Dick.

Thank you. At this time, I will turn the call back over to Mr. Woods for closing remarks.

Okay, well thank you for joining us here this morning. We look forward to keeping you updated on our progress and we’ll talk to you soon. Have a good day.

Thank you everyone. This concludes today’s teleconference. You may now disconnect.