Greetings. Welcome to AstroNova'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. As a reminder, this conference is being recorded. It's now my pleasure to introduce Deborah Pawlowski, Investor Relations for AstroNova. Thank you. You may begin.

Thank you. Good morning, everyone. We certainly appreciate your interest in AstroNova, and thank you for sharing your time with us today. Joining me on our call are Gregory Woods, our President and Chief Executive Officer, and Thomas 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. 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 the Securities and Exchange Commission. These documents can be found on our website at sec.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. You can find reconciliations of non-GAAP measures with comparable GAAP measures in the tables that accompany today's release and slides. 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. 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 with more predictable performance. Core to our 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 ToughWriter 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. 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. 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…

Thank you, Greg. Good morning, everyone. On slide seven, you can see our first-quarter revenue of $37.7 million grew 14.4% year over year and 0.9% sequentially. Eighty-three percent of the quarter's revenue was recurring. The first quarter is a seasonally slow quarter, so we expect improvements throughout fiscal 2026. Year-over-year revenue growth was 13.8% in identification and 16.8% in aerospace. Product identification sales increased for the quarter, driven by $1.4 million incremental Emtek sales and higher demand for tabletop 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 2026, with continued growth of our recurring media and supply sales as we increase the installed base. 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 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 ToughWriter shipments from an existing commercial aerospace customer beginning in the second quarter as we transition away from the legacy cockpit printers. ToughWriter aerospace printers were 42% of the first-quarter shipments, and we remain on track to double the percentage by the fiscal year-end. Turning to slide eight, gross profit was $12.7 million, up $0.7 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 dilution related…

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. We expect to launch six more disruptive solutions before the end of fiscal 2026. Second, we continue to make rapid progress on the ToughWriter transition program with several large commercial and defense customers transitioning to ToughWriters 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. We believe the actions we have taken in the past six to twelve 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. We are reiterating our guidance for the full year of fiscal 2026. We expect to deliver year revenue of $160 million to $165 million, a 7% year-over-year increase at the midpoint, and 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 position 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. Now, Tom and I will be happy to take your questions.

And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, it is star one on your telephone keypad if you would like to ask a question. We will now open for questions. We'll just pause for one brief moment to see if there are any final questions. There are no questions at this time. 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. Enjoy the weekend, and we'll talk to you guys soon.

Have a good day. Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.