AstroNova (ALOT) investor relations material

Executive summary

• Q3 FY26 revenue was $39.2M, up 8.5% sequentially but down 3.1% year-over-year, with net income of $0.4M ($0.05 per share); both Product ID and Aerospace segments contributed to sequential growth, though Aerospace declined year-over-year.

• Gross margin improved to 36.2% in Q3 (up 230 bps year-over-year), driven by favorable product mix and cost reductions; adjusted EBITDA margin reached 10.7%.

• Strong cash generation in Q3, with $3.4M in operating cash flow and $13.5M in liquidity; debt reduced by $3.2M in the quarter and $6.4M year-to-date.

• Restructuring actions included a 10% workforce reduction and MTEX portfolio realignment, expected to yield $3M in annualized savings; $0.3M goodwill impairment and $1.3M restructuring charges recognized.

• Refinanced credit facility, extending maturity to 2028, consolidating foreign debt, and lowering principal payments.

Financial highlights

• Q3 FY26 revenue: $39.2M (down 3.1% YoY, up 8.5% sequentially); gross profit: $14.2M (up 3.5% YoY); gross margin: 36.2%.

• Net income: $0.4M ($0.05/share); adjusted EBITDA: $4.2M (10.7% margin); operating income: $1.3M (3.3% margin).

• Cash from operations: $3.4M for Q3, $8.1M year-to-date; total liquidity at quarter end: $13.5M.

• Net debt leverage ratio at 3.38, below the 4.75 covenant; fixed charge coverage ratio at 1.27, above the 1.05 requirement.

• Capital expenditures were $86,000 for the quarter and $0.2M year-to-date.

Outlook and guidance

• FY26 revenue guidance reiterated at $149M–$154M, with Q4 revenue expected at $36M–$41M.

• Adjusted EBITDA margin for FY26 expected in the 7.5%–8.5% range.

• Anticipates margin tailwind in FY27 from expiration of a major royalty agreement in Aerospace.

• Restructuring expected to complete by end of FY26, with $3M in annualized savings.

• Management anticipates improved Product ID performance as MTEX integration progresses.