AstroNova (ALOT) investor relations material

Executive summary

• Q2 FY26 revenue was $36.1 million, down 10.9% year-over-year, with declines in both Product Identification and Aerospace segments due to shipment challenges and tough prior-year comparisons.

• New CEO appointed, focusing on customer-centric restructuring, operational improvements, and rebuilding stakeholder trust.

• Restructuring actions included a 10% workforce reduction, realignment of MTEX operations, and a culture shift toward collaboration and accountability.

• Aerospace segment advanced transition to higher-margin ToughWriter printers, with over 50% of shipments now from this line and a target of 80% by year-end.

• Emphasis on regaining lost customers, improving sales team skills, and validating new print technologies.

Financial highlights

• Q2 FY26 revenue was $36.1M (down 10.9% YoY); Product ID revenue declined 8.9% YoY, Aerospace revenue declined 15.1% YoY.

• Q2 gross profit was $11.6M (down $2.7M YoY); gross margin declined to 32.2% from 35.3% YoY.

• Q2 net loss was $1.2M ($0.16 per share); adjusted EBITDA was $2.1M (5.7% margin); operating loss was $0.7M.

• Cash from operations in H1 FY26 was $4.6M; CapEx was $0.1M; $5.1M in debt paid down in H1 FY26.

• Cash and equivalents at quarter end: $3.9M; net debt: $39.6M; total liquidity: $10.4M.

Outlook and guidance

• FY26 revenue guidance revised to $149M–$154M, with adjusted EBITDA margin expected between 7.5% and 8.5%.

• Modest revenue growth and margin improvement anticipated in 2H26, driven by new Product ID solutions and higher-margin ToughWriter sales.

• Full benefit of $3M in annualized cost reductions anticipated in the second half; restructuring expected to complete by fiscal year-end.

• Honeywell royalty roll-off in fiscal 2028 expected to benefit profit margins.

• Effective tax rate for FY26 expected to be approximately 32.8%.