21 Annual Needham Growth Conferences2.q4cdn.com/797845863/files/doc_presentations/... · Market...

21st Annual Needham Growth Conference Greg Woods, President and CEO

David S. Smith, CFO

January 16, 2019

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 five-year operating model targets and 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.

©2019 AstroNova, Inc. all rights reserved. 2

Forward-looking Statements

NASDAQ: ALOT Investor Presentation – January 2019

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 ©2019 AstroNova, Inc. all rights reserved.Investor Presentation – January 2019

AstroNova Financial Snapshot

4NASDAQ: ALOT ©2019 AstroNova, Inc. all rights reserved.Investor Presentation – January 2019

NASDAQ: ALOT Russell Microcap® Index(Stock price and yield as of 1/9/2019)

Recent Price $19.40

52-Week Range $12.55 - $23.95

Market Capitalization $134.9 million

Common Stock Outstanding 6.9 million

Enterprise Value $150.5 million

Book Value per Share(1) $9.73

Annualized Dividend $0.28 per share

Yield 1.44%

Q3 FY 2019 Financial Highlights

• Revenue: $34.2 million, up 19% y/y

• Operating income: $2.4 million, up 45% y/y

• Operating margin: 6.9%, up 120 bps y/y

• Diluted EPS: $0.20, down 5% y/y

• Bookings: $34.2 million, up 10% y/y

• Backlog: $24.5 million, up 15%(1)

(1)As of 10/27/2018 vs. 10/28/2017

(1)As of 11/21/18

49-Year History of Innovation

5

1969

Company founded

1975First data acquisition

recorders

1983

Nasdaq listing

1994Grass Technology

acquired

1994First color

label printer2001

First Aerospace printer

2012First color inkjet

label printer

2013Grass

Technologydivested

2013AOS

launched

2014Miltopeacquired

2015RITEC

acquired

2015AstroNovaREBRANDING

Calendar years

20165yr accelerated

growth plan

2017TrojanLabel

acquired

2017Honeywell

acquired

New Growth Strategy

Implemented FY13

Investor Presentation – January 2019 NASDAQ: ALOT ©2019 AstroNova, Inc. all rights reserved.

Strategic Transformation

6

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

FY1992

FY2002

FY2012

FY2018

ALOT Revenue

New Growth Strategy Implemented

($ thousands)

Fiscal Year

FY19 Q2 TTM


7

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


Financial Highlights

8NASDAQ: ALOT ©2019 AstroNova, Inc. all rights reserved.

9

Revenue Per Employee

($ in thousands)

NASDAQ: ALOT

AOS Drives Productivity Improvements

©2019 AstroNova, Inc. all rights reserved.Investor Presentation – January 2019

$216

$267 $286

$310 $326

$368

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 TTM Q3 FY19

Five-Year Revenue History

$68

$88$95

$98

$113

$132

$0

$20

$40

$60

$80

$100

$120

$140

FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 TTM Q3 FY19

Annual Revenue

Investor Presentation – January 2019 NASDAQ: ALOT ©2019 AstroNova, Inc. all rights reserved. 10

($ in millions)

Annual

$98.4$113.4

132.2

FY 2017 FY 2018 TTM Q3 FY 19

$25.7$24.5

$27.5$28.8

$32.7$31.5

$33.8 $34.2

Q4 Q1 Q2 Q3

FY'17 FY'18 FY'19

Recent Revenue Growth

11©2019 AstroNova, Inc. all rights reserved.

+27% +29% +23% +19%

Quarterly ($ in millions) ($ in millions)

Investor Presentation – January 2019 NASDAQ: ALOT

12

63%

37%

53%38%

9%

Revenue by Product Type

Supplies

$18.1M

Hardware

$13.1M

Service/Other

$3.0M

Revenue by Channel

Domestic

$21.5M

International

$12.7M

($ in millions) ($ in millions)

Q3 FY 2019 Revenue Profile

NASDAQ: ALOT

Large Recurring Revenue International Revenue +19% y/y


13

Worldwide Reach

165 Dealers, Customers in 154 Countries

©2019 AstroNova, Inc. all rights reserved.NASDAQ: ALOT Investor Presentation – January 2019

14

Worldwide Installed Base


15

Business Overview

Reporting

Segments

Business

Units


16

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


17

Digital Package Printing:Large, Attractive and Growing Market

Advantages of Digital Package Printing

• Short-run

• On-demand

• Ease of data variability

• Personalization

• Lower cost


18

New Product - Kiaro!® QL-120Launched Worldwide in January 2019


• 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%

©2019 AstroNova, Inc. all rights reserved. 19Investor Presentation – January 2019

Digital Package Printing:Disrupting the Packaging Industry

Expands Addressable Product ID Market


QuickLabelTrojanLabel

21

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


22

Food Safe, Flexible Packaging Solution

Introduced at PACK EXPO 2018

• Designed for use with the entire range of the TrojanLabel printers

• Opens new opportunities in food, medical and pharmaceutical packaging

markets

• Flexible packaging lowers material cost, reduces waste, increases

consumer convenience and enhances brand differentiation


23

Market Leading PortfolioDigital Color Label Printers & Supplies


24

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


25

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


• 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


14,300B737s and A320s currently in service

10,000Entering into service in next 10 years

27

Source: Customer estimates


28

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


29

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 ®


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


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


32

Five-Year Operating Model

NASDAQ: ALOT ©2019 AstroNova, Inc. all rights reserved.

FY 2018 (actual) 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

*Targets dependent on additional acquisitions

FY 2021 targets as established in FY 2016

Investor Presentation – January 2019

33

Reasons to Invest


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

36

Q3 and 9M FY 2019 Financial Results Summary


In Thousands Except for Per Share Data

(Unaudited) Three Months Ended Nine Months Ended

October 27, 2018 October 28, 2017 October 27, 2018 October 28, 2017

Revenue $34,196 $28,760 $99,490 $80,701

Gross Profit 13,908 11,794 39,417 31,359

Gross Profit Margin (%) 40.7% 41.0% 39.6% 38.9%

Operating Income 2,362 1,632 5,791 3,281

Operating Margin (%) 6.9% 5.7% 5.8% 4.1%

Net Income 1,417 1,419 3,425 2,657

Net Income per Common Share – Diluted $0.20 $0.21 $0.49 $0.38

Weighted Avg Number of Common Shares

Outstanding – Diluted 7,167 6,821 7,056 7,078

Dividends Declared per Common Share $0.07 $0.07 $0.21 $0.21

37

Select Consolidated Balance Sheet Data


Amounts In Thousands

(Unaudited) October 27, 2018 January 31, 2018

Cash and Cash Equivalents $7,816 $10,177

Current Assets $59,877 $62,948

Total Assets $116,056 $122,313

Current Liabilities $21,891 $25,912

Long-Term Debt, net of current portion $14,068 $17,684

Royalty Obligation, net of current portion $10,408 $11,760

Shareholders’ Equity $67,408 $63,647

21 Annual Needham Growth Conferences2.q4cdn.com/797845863/files/doc_presentations/... · Market...

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