Greetings, and welcome to AstroNova's Second Quarter Fiscal Year 2026 Financial Results. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Deborah Pawlowski. Thank you. You may begin.

Thank you, and good morning, everyone. We certainly appreciate your interest in AstroNova, and thank you for sharing your time with us today. I am pleased to introduce you to Yorek Itmann, who was appointed President and Chief Executive Officer of AstroNova effective August 15 this year. Also joining us is Thomas DeByle, our Chief Financial Officer, who should be familiar to most of you. You should have the earnings release that crossed the wires earlier this morning as well as the slides that will accompany our conversation today. If not, you can find these documents on the Investor Relations segment of our website, AstroNova, Inc. Please turn to Slide 2 to review cautionary statements. 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, uncertainties, and other factors that could cause actual results to differ materially from what is stated here today. These risks and 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 or 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 turn to Slide 3, I will turn the call over to Yorek. Yorek?

Thank you, Debbie. Good morning, everyone, and thank you for joining us today. I'm excited to take on this new leadership role and confident in the future of AstroNova. We have a leading market position in aerospace with a loyal customer base and long-term contracts as a first-tier supplier to major aircraft manufacturers. In our product identification segment, our new commercial print technologies have begun to ship. As these new print solutions are validated by our customers, we expect to be able to address the full funnel of interest we have been generating to drive sales. But I know we have a lot of work to do to get our growth and profitability on track. On Slide 3, you see my priorities for AstroNova. Starting first with our product ID segment, we began the restructuring of our sales team earlier this year to be much more customer-centric. The company has been losing customers over the last number of years, and I believe it's because of how we went to market and how our sales organization was compensated. I reorganized sales into two teams: customer acquisition and customer retention. This reorients our focus on taking care of our current customers and winning back those we have lost while gaining new customers. Also working to change the skills of our sales team to align with our new product offerings. Our new print solutions, especially the significantly larger and higher value print solutions, we're now offering are capital projects for our customers. This is a very different sales process from how we have sold our legacy tabletop printers. The sales cycle is longer, and customers' needs are more specific. We've been making progress with our new go-to-market strategy and believe results will begin to demonstrate it over the next several quarters. Our success…

Thank you, Yorek, and good morning, everyone. On Slide 4, you can see the second-quarter revenue of $36.1 million declined 10.9% year over year and sequentially 4.2%. Seventy percent of this quarter's revenue was recurring. By segment, product ID and aerospace decreased 8.9% and 15.1%, respectively. Lower sales in product identification in the quarter were primarily driven by a $2.6 million decline in recurring supplies, parts, and service from customer attrition. This is partially offset by higher demand for the mail-in sheet flat pack products. In July, we began shipping our new professional label printers, the QL 425 and 435 models. And in August, we shipped the 800, a new direct-to-package printer line that was upgraded from the former Emtek model. For aerospace, the year-over-year decline was a result of a tough comparison against last year's second quarter, which benefited from a $1.3 million and unusually large spare printer shipments to both the airline and a defense customer, as well as nonrecurring engineering revenue from an OEM project. For 2026, revenue of $73.8 million increased marginally year over year due to higher hardware sales offsetting the decline in recurring supplies, parts, and service revenue. Turning to Slide 5, gross profit in the second quarter was $11.6 million, down $2.7 million year over year, reflecting lower sales and unfavorable mix primarily related to the decline in aerospace volume. For the first half of fiscal 2026, gross profit was $24.3 million or 32.9% of sales, a $2 million decline from the same period last year as a result of a less favorable product mix primarily in the aerospace segment. For the second half of the year, we expect aerospace gross margin to improve on similar volume since we began shipping the ToughRider to a major OEM in June. Higher volume and improved…

Thanks, Tom. We had orders of $35.9 million in 2026, which were relatively unchanged from the prior year period but up $1 million sequentially as a solid improvement in aerospace more than offset a very weak order quarter for product ID. As we discussed earlier, we have changed the team structure and are actively meeting with current, past, and prospective customers. Aerospace orders were up $3.8 million for the trailing first quarter. I'm seeing how much variation this business can have from quarter to quarter. We do expect that as Boeing increases its build rates and if it levels out, we should see steady growth in hardware sales related to new builds. Backlog for the quarter was down $4.6 million year over year to $25.3 million and represents about 30% of expected shipments for the second half of the year at the midpoint of our guidance range. If you will turn to Slide 11, I will summarize the work we have to do to put AstroNova on track to deliver stronger profitability and improve sales. There unfortunately is not any single lever to pull to make this work. We have to reengage with our customers and simplify our processes to improve our responsiveness. We need to measurably improve our customer retention rate. We have to evolve our sales approach for new higher value printers. We also are addressing production challenges in the mail-in sheet flat pack printer operation. We need to streamline processes to take out costs and reduce our lead times. We're simplifying operations in Portugal and better prioritizing and allocating our resources. I remain encouraged as we move forward. We expect to see a full benefit of the $3 million in annualized cost reductions in the second half of the fiscal year. We'll have a much better understanding of the potential of our new printers over the next few months. And our aerospace business provides a stable base with a couple of tailwinds, including increasing aircraft build rates and a benefit to profit margin we will realize in fiscal 2028 as Honeywell royalty rolls off. I'm looking forward to the challenge of improving the business and driving change toward AstroNova. Operator, let's open the line for questions.

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