Astornova, Inc. (ALOT) Annual Report (10-K) for the fiscal year ended January 31, 2025
AstroNova, Inc. filed its Annual Report on Form 10-K for the fiscal year ended January 31, 2025. The company reported total revenue of $143.1 million, a 10% increase from the prior year. Net income was $12.3 million, or $1.63 per diluted share, compared to net income of $10.4 million, or $1.38 per diluted share, in the prior year. The company’s cash and cash equivalents increased to $44.1 million, up from $34.5 million at the end of the prior year. The report also includes information on the company’s financial condition, results of operations, and management’s discussion and analysis of financial condition and results of operations.
Overview of the Company’s Financial Performance
AstroNova, Inc. is a multi-national enterprise that designs, develops, manufactures, and services products that acquire, store, analyze, and present data in multiple formats. The company operates in two main segments: Product Identification (PI) and Test and Measurement (T&M).
In fiscal year 2025, AstroNova reported total revenue of $151.3 million, a 2.2% increase from the prior year. The PI segment generated $102.3 million in revenue, a 1.6% decrease, while the T&M segment saw an 11.1% increase in revenue to $48.9 million.
The company’s gross profit was $52.7 million, up 2.2% from the previous year, with a gross profit margin of 34.9% that remained consistent with the prior year. However, AstroNova reported a net loss of $14.5 million, or $1.93 per diluted share, compared to net income of $4.7 million, or $0.63 per diluted share, in fiscal 2024.
Discussion of Revenue and Profit Trends
The decrease in PI segment revenue was primarily due to delays in the release of an OEM printer within the Astro Machine product line, as well as declines in legacy hardware sales and QuickLabel supply revenue. This was partially offset by increased supplies sales in the Trojan Label product line and $4.2 million in revenue contribution from the acquired MTEX business.
The T&M segment saw revenue growth driven by increased parts and repairs revenue in the aerospace product lines, including a large backlog of replacement parts shipped during the year. This was partially offset by declines in hardware sales for both the aerospace printer and data recorder product lines.
The company’s overall gross profit margin remained flat year-over-year, as the increase in T&M segment gross profit was offset by a decrease in the PI segment gross profit, excluding the MTEX contribution. The PI segment’s gross profit was impacted by higher costs, including those associated with the MTEX acquisition, product mix, lower sales volume in Europe, and the delayed Astro Machine product release.
The net loss in fiscal 2025 was primarily due to a $13.4 million goodwill impairment charge related to the underperformance of the MTEX acquisition, as well as $1.2 million in transaction costs and a $0.2 million inventory step-up charge associated with the MTEX acquisition. Additionally, the company incurred $0.4 million in CFO transition charges.
Analysis of Strengths and Weaknesses
One of AstroNova’s key strengths is its diverse product portfolio and market presence across the PI and T&M segments. The company’s T&M segment, particularly the aerospace printer product line, has been a strong performer, with increased parts and repairs revenue driving segment profit growth.
However, the company’s PI segment has faced some challenges, including delays in new product releases, declines in legacy hardware and supplies sales, and the underperformance of the MTEX acquisition. The $13.4 million goodwill impairment charge related to MTEX highlights the integration and execution risks associated with the company’s acquisition strategy.
Another potential weakness is the company’s reliance on certain key customers and suppliers. The decline in Astro Machine hardware sales was partly due to a major customer’s design changes, and the company also experienced a supply disruption of specialized motors that impacted its black and white printer sales.
Outlook and Future Prospects
Looking ahead, AstroNova has announced restructuring actions for fiscal 2026 that include a 10% reduction in the global workforce, primarily in the PI segment, and the realignment of the underperforming MTEX operation. The company expects these actions to generate $3.0 million in annualized savings.
The company has also amended its credit agreement with Bank of America to provide more favorable terms, including modified debt repayment schedules and interest rate margins. This should help improve the company’s financial flexibility and liquidity as it focuses on reducing its debt levels in fiscal 2026.
In the PI segment, the company plans to address the challenges it faced in fiscal 2025 by introducing new superior technology in its MTEX product line and continuing to integrate the MTEX acquisition. In the T&M segment, the company will likely continue to benefit from strong demand for its aerospace printer and networking products, as well as opportunities to expand its data recorder and other product offerings.
Overall, while AstroNova faced some significant headwinds in fiscal 2025, the company’s diverse product portfolio, ongoing restructuring efforts, and amended credit agreement provide a foundation for potential improvement in its financial performance and outlook in the coming years.
