2016 East Coast IDEAS Investor Conferences2.q4cdn.com/797845863/files/doc_presentations/... ·...

2016 East Coast

IDEAS Investor Conference June 28, 2016

Gregory A. Woods, President and CEO

Joseph P. O’Connell, SVP and CFO

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Forward-looking Statements

2AstroNova NASDAQ: ALOT

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, as well as statements relating to future operating targets, involve risks, uncertainties, and other

factors, some of which are beyond the Company’s control, which may cause its 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 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. The reader

is cautioned not to unduly rely on such forward-looking statements when evaluating the information

presented in this presentation.

AstroNova Financial Snapshot

3

NASDAQ: ALOT Russell Microcap® Index(Stock price and yield as of 6/23/2016)

Recent Price $15.15

52-Week Range $11.18 - $15.94

Market Capitalization $112.51 million

Common Stock Outstanding 7.4 million

Enterprise Value(1) $82.6 million

Book Value per Share(1) $9.28

Annualized Dividend $0.28 per share

Yield 1.81%

Q1 FY 2017 Financial Highlights(2)

• Net sales: $24.1 million

• Net income: $1.0 million

• Diluted EPS: $0.14 GAAP

AstroNova NASDAQ: ALOT

Solid Capital Structure

• Cash & Marketable Securities: $23.3 million(3)

• No Debt

• Strong Free Cash Flow(3)At 4/30/2016

(2)Three months ended 4/30/2016

(1)As of 4/30/2016

Our Business

4

Data Visualization Technology:


Our products process analog and digital data in a

fast, efficient, and often proprietary manner, then

convert it into human useable formats.

AerospaceProduct

IdentificationTest & Measurement

Unique Technology Creates Wide Moat

5

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

Reasons to Invest

Complementary acquisitions strengthen

product platforms

Higher revenue and improved efficiencies

increase free cash flow

VOC Stage-gate methodology accelerates and streamlines

product development process

Operations excellence helps fuel improved margins

AOS Tools drive improved quality, delivery, cost and Growth


How the AstroNova Operating System Delivers Value

7

AstroNova Business Model


Increased Shareholder Value

AOS – Best Quality, Cost, Delivery

Common Core: R&D, FIN, IT, OPS, M&A

Data Visualization Technology

Strategic Planning & Deployment Process

AerospaceProduct

Identification Test &

Measurement

Unique Go To Market Teams

Stage Gate Product Management

Voice of the

Customer

Pro

fita

ble

sale

s g

row

th

8

Near-Term:

1-2 Years

Longer-Term:

3-5 Years

• Accelerate product launches and channel build out

• Innovate game-changing products

• Automate key processes

• Build management team depth

• Pursue smaller bolt-on acquisitions

• Broaden product lines and recurring revenue opportunities

• Focus AOS on growing market share and operating margins

• Increase global presence

• Pursue larger bolt-on acquisitions

Five-year Growth Strategy


Strong Financials

9

$61.6

$76.4

$88.3

$102.3

$0

$20

$40

$60

$80

$100

$120

FY 2013 FY 2014 FY 2015 FY 2016

Bookings ($M)


Revenue and Net Income ($M)

$61.2

$68.6

$88.3

$94.7

$10.8

$3.2$4.7 $4.5

$0

$10

$20

$30

$40

$0

$20

$40

$60

$80

$100

FY 2013 FY 2014 FY 2015 FY 2016

Revenue Net Income

Improved Cash Generation


*Free cash flow is a Non-GAAP metric which AstroNova defines as net cash from operating activities less capital expenditures. Please see

Appendix for reconciliation of Non-GAAP results to their most directly comparable GAAP results.

($ in thousands)

$(386)

$(1,269)

$(756)

$4,666

-$2,000

-$1,000

$0

$1,000

$2,000

$3,000

$4,000

$5,000

FY2013 FY2014 FY2015 FY2016

FCF

CAPEX

Free Cash Flow* and CapEx($M)

Global Reach, Worldwide Customer Base

11

Canada

USA

Mexico

Representative CustomersAstroNova Offices

France

Germany

UK

China

Malaysia

Singapore

World Headquarters – West Warwick, RI


Operations Excellence is Yielding Improved Productivity


$203

$226

$259

$288

$0

$5

$10

$15

$20

$25

$30

$35

$40

$0

$50

$100

$150

$200

$250

$300

$350

FY2013 FY2014 FY2015 FY2016

EB

IT / E

mp

loye

e

Sa

les

/ E

mp

loye

e

Sales / Emp

EBIT / Emp

($ in thousands)

$9.6

$4.6

$20.4$21.0

Sales/Employee CAGR: 12.4%

EBIT/Employee CAGR: 29.8%

AstroNova Businesses

13

Product Identification Test & Measurement

Color Label Printers and

Consumables

Data Acquisition

Systems

Aerospace Printers

and Electronics


Product Identification: Capitalizing on Demand for Customization

14

$43.6$49.1

$59.8

$67.1

10.0% 10.5% 12.1% 13.9%

$0

$20

$40

$60

$80

FY 2013 FY 2014 FY 2015 FY 2016

($ in millions)

Annual Revenue and

Segment Operating Profit Growth Catalysts:

Mass Customization and

Personalization


CAGR: 15.5%

To Each Their Own

15

Combining Quality and Flexibility Across a Broad Range of Applications

16

Cosmetics Electrical Pharmaceutical

& Nutraceutical

Food and Beverage FDA and GHS Compliance(Globally Harmonized System of Classification)


Automotive

Comprehensive Product LineCommercial, Industrial, and Medical Markets

17

Narrow and Wide Format Inkjets Light Emitting

Diode-Toner Thermal

Leader in On-Demand Digital Color Label Printers


End-to-end solution: Software, printer, die-cut blank labels,

inks & toner, field service

High Recurring Revenue Streams Consumables Revenue of $10K / yr. per Printer

18

• Branded labels, toner, and ink supplies

• In-house development and laboratory testing

• Multiple production facilities

• Dedicated media sales and support team


Aerospace Products:Significant Worldwide Opportunity

19

• Graphical flight deck printers

• Rugged Ethernet switches

• Aviation grade Thermal paper

• Certified FAA repair facility

ToughWriter 4® ToughWriter 5® Miltope Printers

Networking Electronics

ToughWriter

640


Growth Catalysts: Global Aircraft Demand

(Replacement and Growth)

Global Aircraft FleetNew and Existing Aircraft – 2015-2034


Existing FleetNew Aircraft Demand:

2015-2034

Single-aisle 14,140 26,730

Wide body 4,880 8,830

Regional jets 2,580 2,490

Business jets 15,735 9,200*

Total 36,975 38,050

Sources: Boeing Long-Term Outlook, Bombardier Market Forecast

*10 year forecast

Large and growing Markets

Aerospace Products

Select Contracts

21

Military Transport

& Tanker Aircraft Business Jet Commercial In-Flight

Entertainment

C-130J – TW4

A400M – TW4

C-130T – TW4

KC-390 – TW5

Airbus A380 – TW4

Boeing 787 – TW4

Boeing 737NG – TW5

Confidential – TW5

Global 5000/6000 – TW5




Panasonic Avionics – TW5

Zodiac Inflight Innov. – TW4

Thales Avionics – TW4

Deep Aerospace Relationships


Addressing the Top 3 Tiers of the Aerospace Value Chain

AirlineDirect

Aircraft OEMs

Tier 1 Systems Integrators


Miltope & RITEC Acquisitions Significantly ExpandAerospace Printer Business

23

• Acquired Miltope business in 2014

• Acquired RITEC business in 2015

• Vaults AstroNova to No. 1 position in

wide-format aerospace printers

• Expands global customer base

• Adds long-term contracts with multiple

commercial, business, and military

customers


Data Acquisition Systems Real-Time Data Analysis

24

Applications

• Aircraft equipment qualification and certification

• Monitoring rail and automotive performance

• Validating fixed plant control instrumentation

• Wireless remote monitoring and data acquisition


Signal capture and analysis

• Main markets: aerospace, transportation, industrial

Growth Catalysts: Regulatory,

Safety Complianceand Quality Assurance

DDX 100

SMARTCORDER Daxus

New Products

Data Acquisition Technology A380 Qualification and Testing

25

Compliance testing


Operating Model


FY 2016 FY 2021 (targets)

Revenue $94.7M $250M

3-year CAGR 15.7% 17%

Operating Margin 6.3% 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

FY 2017 Priorities


• Maintain sales momentum of current platforms through organic growth

and strategic acquisitions

• Use AOS to broaden competitive advantages

• IT systems integration and process automation

• Expand direct sales presence in Asia

• Grow and top-grade global distribution channels

• Achieve double-digit growth and long-term shareholder returns well

above peer average


Financial Overview

Q1 ‘17 Financial Highlights


• Net sales increased 8.6% year-over-year to $24.1 million driven by growth

in the Product Identification and Test & Measurement segments

• Significant new product releases in both segments

• International sales up 13% on strong performance in Europe and Asia

• Free cash flow* of $2.7 million, up 17% year-over-year

• Backlog of $17.0 million, up 17% year-over-year

Free cash flow* is a Non-GAAP metric which AstroNova defines as net cash from operating activities less capital

expenditures. Please see Appendix for reconciliation of Non-GAAP results to their most directly comparable GAAP

results.

Quarterly Revenue Growth

30

$20.8

$22.4

$23.1

$22.1 $22.2$22.2

$23.9

$24.7

$23.8$24.1

Q1 Q2 Q3 Q4 Q1

FY 2015 FY 2016 FY 2017

($ in millions)

+7.0% +7.0%+7.0% +8.6%


+7.7%

Net Sales by Type Q1 FY 2017 vs. Q1 FY 2016

31

$ in millions (% of total sales)

Hardware36%

Q1 FY17: $8.7

Q1 FY16: $8.4 38% Consumables

Q1 FY17: $13.4

Q1 FY16: $11.8

56%53%

Service and other

Q1 FY17: $2.0

Q1 FY16: $2.0

8%

9%

Q1 FY17: $24.1

Q1 FY16: $22.2

Net Sales


Net Sales by Channel Q1 FY 2017 vs. Q1 FY 2016

32

70%

70%30% 30%

$ in millions (% of total sales)

Q1 FY17: $16.8

Q1 FY16: $15.7

International

Q1 FY17: $7.3

Q1 FY16: $6.5

Q1 FY17: $24.1

Q1 FY16: $22.2

Domestic

Net Sales(1)

29%


(1) Includes unfavorable foreign exchange rate impact of $40,000 for Q1 2017 and$953,000 for Q1 2016

71%

Net Sales by Segment Q1 FY 2017 vs. Q1 FY 2016

33

69%

Product ID

$16.6

Test &

Measurement

$7.5

Q1 FY 2017

$ in millions (% of total)

$24.1

31%

70%

Product ID

$15.6

Test &

Measurement

$6.6

Q1 FY 2016

$22.2

30%


63%

Operating Profit by SegmentQ1 FY 2017 vs. Q1 FY 2016

34

69%

Product ID

$2.0- Profit

Margin 12.0%

Test & Measurement

$1.2 - Profit

Margin 16.0%

$ in millions (% of total)

$3.2

37%Product ID

$2.0 - Profit

Margin 12.6%

$0.9 - Profit

Margin 14.2%

Q1 FY 2016

$2.9

31%

Test & Measurement

Q1 FY 2017


Financial Highlights

35

(In thousands, except per share data) Three Months Ended

April 30, 2016 May 2, 2015

Net Sales $24,110 $22,206

Gross Profit $9,473 $9,030

Gross Profit Margin (%) 39.3% 40.7%

Operating Income $1,547 $1,448

Net Income $1,019 $1,211

Net Income Per Share – Diluted $0.14 $0.16

Weighted Avg Number of Common Shares Outstanding – Diluted 7,358 7,280

Cash Dividends Per Share $0.07 $0.07

Book Value Per Common Share(1) $9.28 $8.87

(1) Based on the number of shares outstanding at each quarter end


Selected Balance Sheet Data

36

($ in thousands)

As of

April 30, 2016

(Unaudited)

As of

January 31, 2016

(Audited)

Cash & Marketable Securities $23,308 $20,419

Current Assets $57,672 $54,514

Total Assets $80,737 $77,963

Current Liabilities $11,175 $9,548

Shareholders’ Equity $68,474 $67,373



Appendix

Reconciliation: Net Cash Provided by Operating Activities to Free Cash Flow


($ in thousands) Three Months Ended 12 Months Ended

April 30, 2016 May 2, 2015 January 31, 2016 January 31, 2015

Net Cash Provided by Operating Activities $2,914 $2,972 $7,727 $1,491

Capital Expenditures ($195) ($654) ($3,061) ($2,247)

Free Cash Flow $2,719 $2,318 $4,666 ($756)

2016 East Coast IDEAS Investor Conferences2.q4cdn.com/797845863/files/doc_presentations/... ·...

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