View
3
Download
0
Category
Preview:
Citation preview
Midwest IDEAS Investor Conference
Greg Woods, President and CEO
David S. Smith, CFO
August 30, 2018
Information included in this presentation may contain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical
fact, but rather reflect our current expectations concerning future events and results. These statements may
include the use of the words “believes,” “expects,” “intends,” “plans,” “anticipates,” “likely,” “continues,”
“may,” “will” and similar expressions to identify forward-looking statements. Such forward-looking
statements, including those concerning growth through acquisitions, involve risks, uncertainties and other
factors, some of which are beyond the Company’s control, which may cause the Company’s actual results,
performance or achievements to be materially different from those expressed or implied by such forward-
looking statements. These risks, uncertainties, and factors include, but are not limited to, those factors set
forth in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2018 and
subsequent filings AstroNova makes with the Securities and Exchange Commission. The Company
undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise. Investors are cautioned not to unduly rely on such forward-
looking statements when evaluating the information in this presentation.
©2018 AstroNova, Inc. all rights reserved. 2
Forward-looking Statements
NASDAQ: ALOT Investor Presentation – August 2018
3
Innovative, Differentiated Products
Aerospace Product Identification Test & Measurement
Unifying Core Technology – Data Visualization
AstroNova products convert analog and digital data into text, graphics, digital signals
• High recurring revenue stream
• Proprietary consumables
• Diverse global markets
NASDAQ: ALOT ©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
4©2018 AstroNova, Inc. all rights reserved.NASDAQ: ALOT Investor Presentation – August 2018
A1 A2 A4
A3
4
AstroNova Financial Snapshot
5NASDAQ: ALOT ©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
NASDAQ: ALOT Russell Microcap® Index(Stock price and yield as of 8/24/2018)
Recent Price $21.15
52-Week Range $11.00 - $21.95
Market Capitalization $143.7 million
Common Stock Outstanding 6.8 million
Enterprise Value $159.6 million
Book Value per Share(1) $9.55
Annualized Dividend $0.28 per share
Yield 1.34%
Q2 FY 2019 Financial Highlights
• Revenue: $33.8 million, up 23% y/y
• Operating income: $2.2 million, up 130% y/y
• Operating margin: 6.4%, up 300 bps y/y
• Diluted EPS: $0.17, up 55% y/y
• Bookings: $35.8 million, up 29% y/y
• Backlog: $24.5 million, up 30%(1)
(1)As of 7/28/2018 vs. 7/29/2017
(1)As of 07/28/18
Annual
$98.4$113.4
$127.0
FY 2017 FY 2018 TTM Q2FY19
$23.3$25.7
$24.5
$27.5$28.8
$32.7$31.5
$33.8
Q3 Q4 Q1 Q2
FY'17 FY'18 FY'19
Revenue Growth
6©2018 AstroNova, Inc. all rights reserved.
+23% +27% +29% +23%
Quarterly ($ in millions) ($ in millions)
Investor Presentation – August 2018
Recent Growth Drivers
7
Strategic M&A• Asset Purchase License Agreement: Honeywell Aerospace
• Integration of TrojanLabel into AstroNova
• Launched game-changing new products in both segments
• Increased demand for ink, labels and other supplies
Operational • Opened new EMEA hub in Germany
• Strengthened leadership team
Organic Initiatives
NASDAQ: ALOT ©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
8
AstroNova Operating System (AOS)
Continuous Improvement Through operational excellence
and lean initiatives, we
consistently strive to increase
efficiency and enhance margins
InnovationStage-Gate methodology
accelerates and streamlines
product development process
Building Value
Our customer-centric philosophy
ensures we deliver superior
quality, delivery, cost and growth
One Global Team
We work as a unified organization
in a data-driven environment that
fosters mutual trust and respect
NASDAQ: ALOT ©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
9
Revenue Per Employee
$216
$259$286
$310$326
$356
$0
$50
$100
$150
$200
$250
$300
$350
$400
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY19 Q2
($ in thousands)
NASDAQ: ALOT
AOS Drives Productivity Improvements
©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
10
Worldwide Reach
165 Dealers, Customers in 154 Countries
©2018 AstroNova, Inc. all rights reserved.NASDAQ: ALOT Investor Presentation – August 2018
11
Business Overview
Reporting
Segments
Business
Units
NASDAQ: ALOT ©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
12
Product Identification Segment
Tabletop and Light Production Label Printers, Specialty Printers,
Software, Consumables, and Service
$43.6$49.1
$59.8
$67.1 $69.9
$81.7
10.0% 10.5% 12.1% 13.9% 14.1% 13.0%
$0
$20
$40
$60
$80
$100
FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
FY 2013-18 Revenue CAGR: 13.4%
($ in millions)
Segment Revenue and
Operating Profit Margin
NASDAQ: ALOT ©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
13
Digital Package Printing:Large, Attractive and Growing Market
Advantages of Digital Package Printing
• Short-run
• On-demand
• Ease of data variability
• Personalization
• Lower cost
NASDAQ: ALOT ©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
14
New Product - Kiaro!® QL-120Launched Worldwide in August 2018
NASDAQ: ALOT ©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
• Professional tabletop digital label printer
• Compact design
• Highest throughput available in a desktop color label printer
• Exceptional color accuracy
• Wide range of capabilities
• Proprietary CQL Pro advanced labeling software
• Low total cost of ownership
User Friendly. Flexible and Productive. Cost Effective.
$13.2
$23.2
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
2017 2022
Projected Growth of Digitally Printed
Labels and Packaging
($ in b
illio
ns)
Source: Smithers Pira, AstroNova
NASDAQ: ALOT
Labels represent ~ 15-20%
©2018 AstroNova, Inc. all rights reserved. 15Investor Presentation – August 2018
Digital Package Printing:Disrupting the Packaging Industry
16
TrojanLabel
• Acquired in February 2017
• European manufacturer of digital color label presses and specialty printing systems
• Products focused on a broad range of end markets
• Strong presence in EMEA and Asia
• 50 dealer partners worldwide
• Profitable and growing
• Robust R&D pipeline
NASDAQ: ALOT ©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
Expands Addressable Product ID Market
17NASDAQ: ALOT ©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
Expands Addressable Product ID Market
18NASDAQ: ALOT ©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
19
Commercial Production
Trojan T2-C
• World’s first affordable production digital label mini press
• Fast print speed – up to 12 inches per second
• Ideal for label converters print shops, contract packaging
Trojan T4
• Professional label press and finishing system for compact production
• Fast print speed – up to 12 inches per second
• Ideal for label converters print shops, contract packaging
NASDAQ: ALOT
New Products, Launched Q4 FY’18
©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
20
OEM Equipment for Converters and Manufacturers
Trojan T3-OP
• Digital professional packaging & converting overprinting system
• High quality, full-color printing directly onto ink-receptive surfaces
NASDAQ: ALOT
New Category IJP Technology
©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
21
Test & Measurement Segment
Airborne Printers, Networking Hardware and
Data Acquisition Systems
$17.6$19.5
$28.6$27.5
$28.6
$31.7
17.6%13.6%
19.7%
13.3% 15.4%11.8%
$0
$5
$10
$15
$20
$25
$30
$35
$40
FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
FY 2013-18 Revenue CAGR: 12.5%
Segment Revenue and
Operating Profit Margin
NASDAQ: ALOT
FY18-up 11% over FY17
©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
22
Aerospace Products: Significant Worldwide Opportunity
• Graphical flight deck and cabin printers
• Avionic networking products
• PMA certified products, parts, supplies
• Certified FAA repair facility
Growth Catalysts: Global Aircraft Demand
(Upgrades, Service, Supplies)
Military Commercial Business/
Regional Jet
In-flight
Entertainment
Leading Customers
NASDAQ: ALOT ©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
23
Addressing the Top 3 Tiersof the Aerospace Value Chain
AirlineDirect
Aircraft OEMs
Tier 1 Systems Integrators
NASDAQ: ALOT ©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
• ANI to manufacture Honeywell’s narrow-format commercial flight deck printers
• Primarily used on Boeing 737 and Airbus A320
• Covers production of new printers as well as repair, support services and supplies
• Expected to be accretive in first full year of ownership
Honeywell AerospaceProduct Line Acquisition:
Significant Growth Driver
24NASDAQ: ALOT ©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
14,300B737s and A320s currently in service
10,000Entering into service in next 10 years
25
Source: Customer estimates
NASDAQ: ALOT ©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
26
B737 and A320 Estimated Annual Production Rate 2017-19
0 200 400 600 800 1000 1200 1400 1600
2017
2018
2019
B737 A320
1,032
1,210
1,402
Source: Customer estimates
NASDAQ: ALOT
B737 + A320 ~60% of all commercial deliveries
©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
27
Real-time Data Acquisition & Analysis
Applications
• Aircraft equipment qualification and certification
• Monitoring rail and automotive performance
• Validating fixed plant control instrumentation
• Wireless remote monitoring and data acquisition
Growth Catalysts: Regulatory,
Safety Complianceand Quality Assurance
Primary Markets
Aerospace, transportation, energy, industrial, telemetry
New Products
Everest®EV-5000DDX100
SmartCorder®
Daxus® DX-100TMX ®
NASDAQ: ALOT ©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
Financial Highlights
28NASDAQ: ALOT ©2018 AstroNova, Inc. all rights reserved.
29
59%
41%
53%38%
9%
Revenue by Product Type
Supplies
$17.9M
Hardware
$12.9M
Service/Other
$3.0M
Revenue by Channel
Domestic
$20.0M
International
$13.8M
($ in millions) ($ in millions)
Q2 FY 2019 Revenue Profile
NASDAQ: ALOT
Large Recurring Revenue International Revenue +34% y/y
©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
30
ANI FY19 Priorities
• Complete Honeywell & TrojanLabel Integrations
• Accelerated use of AOS to drive operating income improvements
• Transition to a unified Global IT and Logistics platform
NASDAQ: ALOT ©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
31
Five-Year Growth Strategy (est. FY16)
Near-Term:
1-2 Years
Longer-Term:
3-5 Years
• Accelerate product launches and channel build out
• Innovate game-changing, technology-based products
• Automate key processes
• Build management team depth
• Pursue smaller bolt-on acquisitions
• Focus AOS on improving operating margins and FCF
• Broaden product lines and recurring revenue opportunities
• Increase global presence
• Pursue larger bolt-on acquisitions
FY17
FY18
FY19
FY20
FY21
NASDAQ: ALOT ©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
32
Five-Year Operating Model
FY 2018 FY 2021 (targets)
Revenue $113.4M $250M
5-year CAGR 13.1% 17%
Operating Margin 4.8% 15%
Strategic Driving Force Data Visualization Technology
End Market Focus Aerospace, Data Acquisition, Industrial
Fast-Moving Consumer Goods
Growth Strategy (Organic growth of current platforms) + (bolt-on M&A)
Management Approach AstroNova Operating System
NASDAQ: ALOT
Long-range targets established in FY 2016
©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
33
Reasons to Invest
NASDAQ: ALOT ©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
Track record of successful M&A
Recurring revenue >50%
Robust product development pipeline
Expanding global footprint
Continuous improvement culture
Leading market positions and brands
High Barriers to Entry
THANK YOU
NASDAQ: ALOT 34©2018 AstroNova, Inc. all rights reserved.
Financial Overview
35NASDAQ: ALOT ©2018 AstroNova, Inc. all rights reserved.
36
Q2 and 1H FY 2019 Financial Results Summary
NASDAQ: ALOT ©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
In Thousands Except for Per Share Data
(Unaudited) Three Months Ended Six Months Ended
July 28, 2018 July 29, 2017 July 28, 2018 July 29, 2017
Revenue $33,807 $27,483 $65,294 $51,941
Gross Profit 13,399 10,259 25,510 19,565
Gross Profit Margin (%) 39.6% 37.3% 39.1% 37.7%
Operating Income 2,165 942 3,429 1,649
Operating Margin (%) 6.4% 3.4% 5.3% 3.2%
Net Income 1,914 727 2,010* 1,238
Net Income per Common Share – Diluted $0.17 $0.11 $0.29* $0.17
Weighted Avg Number of Common Shares
Outstanding – Diluted 6,860 6,727 6,825 7,097
Dividends Declared per Common Share $0.07 $0.07 $0.14 $0.14
* Results for the three months ended January 31, 2018 were negatively impacted by
$1.1 million, or $0.16 per share, in taxes due to the enactment of the Tax Cuts and Jobs Act.
37
Select Consolidated Balance Sheet Data
NASDAQ: ALOT ©2018 AstroNova, Inc. all rights reserved.Investor Presentation – August 2018
Amounts In Thousands
(Unaudited) July 28, 2018 January 31, 2018
Cash & Cash Equivalents $5,949 $11,688
Current Assets $60,160 $62,948
Total Assets $117,070 $122,313
Current Liabilities $22,884 $25,912
Long-Term Debt, net of current portion $15,249 $17,684
Royalty Obligation $10,901 $11,760
Shareholders’ Equity $65,488 $63,647
THANK YOU
NASDAQ: ALOT ©2018 AstroNova, Inc. all rights reserved.
Recommended