Ladies and gentlemen, good morning and welcome to the AstroNova's Second Quarter Fiscal 2021 Financial Results Conference Call. [Operator Instructions] I will now turn the call over to Mr. David Calusdian, of the company’s Investor Relations firm, Sharon Merrill. Please go ahead, sir.

Thank you, David. 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 make a few comments on the financials, Greg will make 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 historical statements of historical facts 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, September 09, 2020. 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 will now turn the call over to Greg.

Thank you, David. Good morning, everyone and thank you for joining us today. While the COVID-19 pandemic has generated significant challenges for all of us, I'd like to start the call today by thanking our employees around the world for their commitment and extraordinary efforts and adapting to this new reality. The team's adherence to our core values and the structure of the AstroNova operating system has led to the implementation of several innovative ways to address these challenges. I will highlight a few of these examples in today's comments. Now let's get into the drivers of our second quarter performance. Starting with our largest segment, Product Identification, which accounts for nearly 80% of our business, revenue was down by 2% from the second quarter of fiscal 2020 and by about 3% from the sequential first quarter of fiscal 2021. This segment traditionally relies heavily on tradeshow participation, in-person sales calls and product demos to generate demand. For the stay-at-home mandate, social distancing measures, and bans on large gatherings severely restricted those marketing opportunities, particularly at the beginning of the quarter. However, as we moved through the quarter, the Product Identification team made good progress adapting to the COVID challenges by accelerating the transition to digital business practices. This switch to digital combined with the customer enthusiasm for our recently refreshed printer offerings resulted in a solid pick up in printer sales and supplies in the later part of the quarter. Based upon our unique full solution offerings and our well established strong position in resilient market segments, such as food and beverage, cleaning supplies, and medical products, we expect this growth trend to continue as we move through the second half of the year. Let me share a few examples as to how we've adapted the business. Digital sales…

Thank you, Greg, and good morning, everybody. Rather than repeating a lot of the numbers in this morning's press release, I'll give you just a few additional comments in key areas. I also want to point out or let you know that we plan to file the 10-Q for the second quarter later today. In the second quarter income statement, operating expenses declined by about 11% or $1.2 million from the year ago quarter and by about 6% or $600,000 from last quarter, that is the first quarter of this year. During last year's fourth quarter, and then this year’s first quarter, as a result of the lower sales volume related to the 737 MAX grounding, we being again implementing a number of headcount reduction in cost savings measures. Then, more recently, as we continued to respond to that, plus also the COVID crisis, we took other measures including furloughs and work share arrangement, along with further expense reduction actions. For example, these actions in the second quarter included a reduction in executive compensation and across the board freeze on all other employee compensation at 2019 levels, and reduced professional and other outside service expenses. On a year-to-date basis, operating expenses are down $2.8 million from the same period last year. And if we're able to maintain our current cost structure, as we currently expect to be able to do, we expected the full year reduction in operating expenses year-over-year will be in the range of about $7 million. There are additional savings that show up in lower cost of sales, but those impacts are muted or hidden by the adverse consequences of the lower aerospace volume. And we're going to continue to look for other ways to realign the cost structure to the revenue outlook and we'll report on…

Thanks, David. Looking ahead, the resilience and innovative nature of the AstroNova team has enabled us to dynamically adapt too many of the challenges of the current macro environment. We have taken aggressive cost reduction actions, enabled more rapid profit improvement as the market recovers. And as David mentioned, we have strengthened our liquidity position to drive the growth of our Product Identification segment and weather the downturn in the aerospace industry. Based on the strength of the Product Identifications large and diversified global installed base, and the renewed new printer sales growth driven by our digital transformation, we expect growth in Product Identification segment to increase beginning in the second half of the fiscal year. Additionally, we are encouraged by recent demand trends and expect to see total revenues grow sequentially in the third and fourth quarters of this year. With that, David, I will be happy to take your questions.

Thank you. [Operator Instructions] At this time, we have no question. So I'll turn it back to Mr. Woods for closing comments.

Thank you all for joining us here this morning. And we look forward to keeping you updated on our progress. Stay safe and stay well. Yes, do you have a question?

Yes, sir. We did have a question or queue up and this question comes from Mr. Dick Ryan with Colliers.

Great, thanks.

Thank you. Sorry, Greg. I hit star one, but I didn't take first time. Can you, the guidance for sequential growth Q3, Q4 obviously is heavily weighted on the Product ID side. Can you give a sense of where your aero business should be? I mean, if we hit bottom at this kind of $6 million a quarter level, or as, you were seeing a slight uptick in flight, so how should we look at that for the rest of the year?

Yes, it was a little bit hard to hear you there Dick, but I think you're saying can we predict if we hit bottom or not? And - so your question was?

Yes, in the aero side, now should we look at aero for Q3 and Q4? Is it kind of based at the $6 million a quarter and could we see some growth there or is that probably pushed into next year?

Yes, it's a little bit difficult to predict that aerospace market as it seems to change every few weeks with one thing or another. We just saw this week with one thing or another, we just saw this week some issues with 787s. It doesn't impact the production yet, but you never know how those things are going to trickle through. It's tough for us to predict that. I mean, I get different reports from different analysts and our customer contacts. Like I mentioned in my comments, it seems like there's a number of things are kind of breaking towards the positive side, but I think it's a little too early to predict that at this point. I think we'll have a better picture on that in Q3. It's really tough to nail it down right now, but it's at a fairly low level right now. So hopefully, we'll see some improvements as we move through the year, but the exact timing is tough to predict.

Okay, great. Nice win and the ToughWriter. So that's your, AstroNova’s form factor rather than Honeywell. Can you talk a little bit more about the recent win and how did you get it? What were the dynamics behind the contract award?

Yes, so that in that case, it kind of expands our market because it was someone that hadn't purchased a lot of our products in the past, so that was a nice win. But in general, the ToughWriter 640 is by far the best product out there in the marketplace. The Honeywell product, of course that we manufacture and we licensed, it's a solid product. It's had a 20-year track record. It's very reliable. But the new 640 is roughly half the weight, has better printer resolution, Ethernet. It has a lot of kind of nice features that pilots would like to have. So the team has been working on this around the world in terms of different airlines and trying to get airline direct business, because with the 737 MAX the airline is the one, who actually makes the purchasing decision and we drop ship the printers to Boeing. So hopefully we'll see several more of those in the future. It's a pickup; it's a benefit to the airline in terms of weight reduction and cost efficiencies and it's a benefit, of course, to us in terms of increasing the volume of our own product.

And you said 200 over the life of the contract, how should we look at that let's say next year going forward?

Yes, so it depends on how fast they take; either upgrade existing aircraft or take on new aircraft, but it's a multiyear deal. So, you wouldn't expect to see all that in one year, but you should expect to see some of that starting next year for sure.

Okay, great. Thank you.

Great, thanks Dick.

Thank you, speakers. At this time, no further questions.

Okay, again, let me just thank everyone for joining us here this morning. We look forward to keeping you guys updated and we'll talk to you after next quarter. Bye now.