UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to __________
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(Exact name of registrant as specified in its charter)
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
The number of shares of the registrant’s common stock, $.05 par value per share, outstanding as of May 31, 2024 was
ASTRONOVA, INC.
INDEX
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Page No. |
Part I. |
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Item 1. |
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Unaudited Condensed Consolidated Balance Sheets – April 27, 2024 and January 31, 2024 |
1 |
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2 |
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3 |
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4 |
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5 |
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Notes to the Condensed Consolidated Financial Statements (unaudited) |
6-17 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
17-23 |
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Item 3. |
23 |
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Item 4. |
23-24 |
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Part II. |
24 |
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Item 1. |
24 |
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Item 1A. |
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Item 2. |
25 |
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Item 6. |
26 |
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27 |
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
ASTRONOVA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
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April 27, 2024 |
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January 31, 2024 |
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(Unaudited) |
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ASSETS |
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CURRENT ASSETS |
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Cash and Cash Equivalents |
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$ |
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$ |
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Accounts Receivable, net |
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Inventories, net |
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Prepaid Expenses and Other Current Assets |
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Total Current Assets |
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Property, Plant and Equipment, net |
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Identifiable Intangibles, net |
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Goodwill |
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Deferred Tax Assets, net |
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Right of Use Asset |
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Other Assets |
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TOTAL ASSETS |
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$ |
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$ |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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CURRENT LIABILITIES |
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Accounts Payable |
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$ |
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$ |
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Accrued Compensation |
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Other Accrued Expenses |
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Revolving Line of Credit |
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Current Portion of Long-Term Debt |
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Current Liability—Royalty Obligation |
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Current Liability—Excess Royalty Payment Due |
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Income Taxes Payable |
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Deferred Revenue |
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Total Current Liabilities |
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NON-CURRENT LIABILITIES |
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Long-Term Debt, net of current portion |
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Royalty Obligation, net of current portion |
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Lease Liabilities, net of current portion |
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Income Taxes Payable |
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Deferred Tax Liabilities |
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TOTAL LIABILITIES |
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SHAREHOLDERS’ EQUITY |
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Preferred Stock, $ |
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Common Stock, $ |
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Additional Paid-in Capital |
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Retained Earnings |
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Treasury Stock, at Cost, |
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( |
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( |
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Accumulated Other Comprehensive Loss, net of tax |
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( |
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( |
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TOTAL SHAREHOLDERS’ EQUITY |
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
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$ |
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$ |
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See Notes to condensed consolidated financial statements (unaudited).
1
ASTRONOVA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Data)
(Unaudited)
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Three Months Ended |
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April 27, 2024 |
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April 29, 2023 |
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Revenue |
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$ |
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$ |
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Cost of Revenue |
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Gross Profit |
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Operating Expenses: |
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Selling and Marketing |
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Research and Development |
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General and Administrative |
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Operating Expenses |
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Operating Income |
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Other Income (Expense), net: |
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Interest Expense |
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Gain (Loss) on Foreign Currency Transactions |
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( |
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Other, net |
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( |
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Total Other Income (Expense) |
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( |
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( |
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Income Before Income Taxes |
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Income Tax Provision (Benefit) |
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( |
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Net Income |
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$ |
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$ |
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Net Income per Common Share—Basic |
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$ |
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$ |
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Net Income per Common Share—Diluted |
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$ |
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$ |
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Weighted Average Number of Common Shares Outstanding: |
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Basic |
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Diluted |
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See Notes to condensed consolidated financial statements (unaudited).
2
ASTRONOVA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands)
(Unaudited)
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Three Months Ended |
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April 27, 2024 |
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April 29, 2023 |
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Net Income |
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$ |
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$ |
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Other Comprehensive Income (Loss), net of taxes: |
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Foreign Currency Translation Adjustments |
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( |
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Other Comprehensive Income (Loss) |
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( |
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Comprehensive Income |
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$ |
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$ |
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See Notes to condensed consolidated financial statements (unaudited).
3
ASTRONOVA, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
($ In Thousands, Except per Share Data)
(Unaudited)
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Common Stock |
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Additional |
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Retained |
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Treasury |
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Accumulated |
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Total |
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Shares |
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Amount |
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Capital |
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Earnings |
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Stock |
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Income (Loss) |
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Equity |
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Balance January 31, 2023 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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Share-Based Compensation |
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— |
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— |
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— |
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— |
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— |
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Employee Option Exercises |
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— |
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— |
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— |
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— |
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Restricted Stock Awards Vested |
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— |
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— |
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Net Income |
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— |
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— |
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— |
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— |
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— |
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Foreign Currency Translation Adjustment |
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— |
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— |
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— |
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— |
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— |
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Balance April 29, 2023 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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Balance January 31, 2024 |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Share-Based Compensation |
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— |
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— |
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— |
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— |
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— |
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Employee Option Exercises |
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— |
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— |
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— |
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— |
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Restricted Stock Awards Vested |
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( |
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— |
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— |
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Net Income |
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— |
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— |
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— |
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— |
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— |
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Foreign Currency Translation Adjustment |
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— |
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— |
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— |
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— |
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— |
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( |
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( |
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Balance April 27, 2024 |
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See Notes to condensed consolidated financial statements (unaudited).
4
ASTRONOVA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
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Three Months Ended |
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April 27, 2024 |
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April 29, 2023 |
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Cash Flows from Operating Activities: |
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Net Income |
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$ |
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$ |
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Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: |
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Depreciation and Amortization |
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Amortization of Debt Issuance Costs |
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Share-Based Compensation |
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Changes in Assets and Liabilities: |
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Accounts Receivable |
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Inventories |
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( |
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Income Taxes |
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Accounts Payable and Accrued Expenses |
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( |
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Deferred Revenue |
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( |
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Other |
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( |
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Net Cash Provided by Operating Activities |
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Cash Flows from Investing Activities: |
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Purchases of Property, Plant and Equipment |
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( |
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( |
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Net Cash Used for Investing Activities |
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( |
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( |
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Cash Flows from Financing Activities: |
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Net Cash Proceeds from Employee Stock Option Plans |
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Net Cash Proceeds from Share Purchases under Employee Stock Purchase Plan |
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Net Cash Used for Payment of Taxes Related to Vested Restricted Stock |
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( |
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( |
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Repayment under Revolving Credit Facility |
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( |
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Payment of Minimum Guarantee Royalty Obligation |
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( |
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( |
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Principal Payments of Long-Term Debt |
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( |
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( |
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Net Cash Used for Financing Activities |
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( |
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( |
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Effect of Exchange Rate Changes on Cash and Cash Equivalents |
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Net Increase (Decrease) in Cash and Cash Equivalents |
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Cash and Cash Equivalents, Beginning of Period |
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Cash and Cash Equivalents, End of Period |
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$ |
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$ |
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Supplemental Disclosures of Cash Flow Information: |
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Cash Paid During the Period for: |
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Cash Paid During the Period for Interest |
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$ |
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$ |
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Cash Paid During the Period for Income Taxes, net of refunds |
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$ |
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$ |
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Non-Cash Transactions: |
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Capital Lease Obtained in Exchange for Capital Lease Liabilities |
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$ |
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$ |
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See Notes to condensed consolidated financial statements (unaudited).
5
ASTRONOVA, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Note 1 – Business and Basis of Presentation
Overview
Headquartered in West Warwick, Rhode Island, AstroNova, Inc. leverages its expertise in data visualization technologies to design, develop, manufacture and distribute a broad range of specialty printers and data acquisition and analysis systems. Our products are employed around the world in a wide range of applications in the aerospace, apparel, automotive, avionics, chemical, computer peripherals, communications, distribution, food and beverage, general manufacturing, packaging and transportation industries.
Our business consists of
PI products sold under the QuickLabel, TrojanLabel and GetLabels brands are used in brand owner and commercial applications to provide product packaging, marketing, tracking, branding, and labeling solutions to a wide array of industries. The PI segment offers a variety of digital color label tabletop printers and light commercial label printers, direct-to-package printers, high-volume presses, and specialty original equipment manufacturer (“OEM”) printing systems, as well as a wide range of label, tag and other supplies, including ink and toner, allowing customers to mark, track, protect and enhance the appearance of their products. PI products sold under the Astro Machine brand also include a variety of label printers, envelope and packaging printing, and related processing and handling equipment.
In the T&M segment, we have a long history of using our technologies to provide networking systems and high-resolution flight deck and cabin printers for the aerospace market. In addition, the T&M segment includes data acquisition recorders, sold under the AstroNova brand, to enable our customers to acquire and record visual and electronic signal data from local and networked data streams and sensors. The recorded data is processed, analyzed, stored and presented in various visual output formats.
Our PI products are sold by direct field salespersons, OEMs and independent dealers and representatives, while our T&M products are sold predominantly through direct sales and independent representatives. In the United States, we have factory-trained direct field salespeople located throughout the country specializing in PI products. We also have direct field sales or service centers in Canada, China, Denmark, France, Germany, Malaysia, Mexico, Singapore, and the United Kingdom staffed by our own employees and dedicated third party contractors. Additionally, we utilize over 100 independent dealers and representatives selling and marketing our products in over 60 countries.
Unless otherwise indicated, references to “AstroNova,” “we,” “our,” and “us” in this Quarterly Report on Form 10-Q refer to AstroNova, Inc. and its consolidated subsidiaries.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles and reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the results of the interim periods included herein. These financial statements do not include all disclosures associated with annual financial statements and, accordingly, should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended January 31, 2024.
The presentation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported and disclosed in the condensed consolidated financial statements and accompanying notes, including those that require consideration of forecasted financial information using information that is reasonably available to us at this time. Some of the more significant estimates relate to revenue recognition, the allowances for doubtful accounts, inventory valuation, income taxes, valuation of long-lived assets, intangible assets and goodwill, share-based compensation, and warranty reserves. Management’s estimates are based on the facts and circumstances available at the time estimates are made, historical experience, risk of loss, general economic conditions and trends, and management’s assessments of the probable future outcome of these matters. Consequently, actual results could differ from those estimates.
Results of operations for the interim periods presented herein are not necessarily indicative of the results that may be expected for the full year.
6
Certain amounts in the prior year’s financial statements have been reclassified to conform to the current year’s presentation.
Principles of Consolidation
The accompanying condensed consolidated financial statements include the accounts of AstroNova, Inc. and its wholly-owned subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation.
Note 2 – Summary of Significant Accounting Policies Update
The accounting policies used in preparing the condensed consolidated financial statements in this Form 10-Q are the same as those used in preparing our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2024.
Recent Accounting Pronouncements Not Yet Adopted
On March 6, 2024, the SEC adopted the final rule under SEC Release No. 33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors. This rule will require registrants to disclose certain climate-related information in registration statements and annual reports on Form 10-K including, among other things, material climate-related risks and their impact; activities to mitigate or adapt to material climate-related risks; governance and oversight of climate-related risks; material climate-related targets or goals and their financial impact; and qualitative and quantitative disclosures regarding greenhouse gas emissions. The final rules follow a phase-in timeline and would begin to apply prospectively to our fiscal year beginning February 1, 2027. In April 2024, the SEC voluntarily stayed the effectiveness of the rules pending completion of judicial review of the consolidated challenges to the final rules. We are currently monitoring the legal challenges and evaluating the potential impact of these rules on our consolidated financial statements and disclosures.
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”) to enhance the transparency and decision usefulness of income tax disclosures primarily related to the rate reconciliation and income taxes paid information. ASU 2023-09 modifies the requirement for income tax disclosures to include (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. We will adopt this standard beginning with our fiscal year ending January 31, 2025. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.
In November 2023, the FASB issued Accounting Standards Update No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating decision maker (CODM), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. ASU 2023-07 also requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss. Public entities will be required to provide all annual disclosures currently required by ASU 2023-07 in interim periods. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, with early adoption permitted. We will adopt this standard beginning with our fiscal year ending January 31, 2025, and for interim periods beginning with our first quarter of fiscal 2026. We are currently evaluating the new disclosure requirements of ASU 2023-07 and do not expect the adoption of this guidance to have a material impact on our consolidated financial statements or disclosures.
No other new accounting pronouncements, issued or effective during the first three months of the current year, have had or are expected to have a material impact on our consolidated financial statements.
7
Note 3 – Revenue Recognition
We derive revenue from the sale of (i) hardware, including digital color label printers and specialty OEM printing systems, portable data acquisition systems, and airborne printers and networking hardware used in the flight deck and cabin of military, commercial and business aircraft, (ii) related supplies required in the operation of the hardware, (iii) repairs and maintenance of hardware and (iv) service agreements.
Revenues disaggregated by primary geographic markets and major product types are as follows:
Primary geographical markets
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Three Months Ended |
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(In thousands) |
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April 27, 2024 |
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April 29, 2023* |
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United States |
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$ |
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$ |
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Europe |
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Canada |
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Central and South America |
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Asia |
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Other |
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Total Revenue |
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$ |
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$ |
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*Certain amounts have been reclassified to conform to the current year's presentation.
Major product types
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Three Months Ended |
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(In thousands) |
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April 27, 2024 |
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April 29, 2023 |
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Hardware |
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$ |
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$ |
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Supplies |
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Service and Other |
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Total Revenue |
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$ |
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$ |
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In December 2022, we entered into an amended contract with one of our T&M customers that provided for a total payment of $
Contract Assets and Liabilities
We normally do not have contract assets, which are primarily unbilled accounts receivable that are conditional on something other than the passage of time.
Our contract liabilities, which represent billings in excess of revenue recognized, are related to advanced billings for purchased service agreements and extended warranties. Contract liabilities were $
8
Contract Costs
We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. We have determined that certain costs related to obtaining sales contracts for our aerospace printer products meet the requirement to be capitalized. These costs are deferred and amortized over the remaining useful life of these contracts, which we currently estimate to be approximately
Note 4 – Net Income Per Common Share
Basic net income per share is calculated by dividing net income by the weighted average number of shares outstanding during the period. Diluted net income per share is calculated by dividing net income by the weighted average number of shares and, if dilutive, common equivalent shares, determined using the treasury stock method for stock options, restricted stock awards and restricted stock units outstanding during the period.
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Three Months Ended |
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April 27, 2024 |
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April 29, 2023 |
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Weighted Average Common Shares Outstanding – Basic |
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Effect of Dilutive Options, Restricted Stock Awards and |
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Weighted Average Common Shares Outstanding – Diluted |
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For the three months ended April 27, 2024 and April 29, 2023, the diluted per share amounts do not reflect weighted average common equivalent shares outstanding of
Note 5 – Intangible Assets
Intangible assets are as follows:
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April 27, 2024 |
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January 31, 2024 |
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(In thousands) |
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Gross |
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Accumulated |
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Currency |
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Net |
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Gross |
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Accumulated |
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Currency |
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Net |
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RITEC: |
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Customer Contract |
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$ |
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$ |
( |
) |
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$ |
— |
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$ |
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$ |
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$ |
( |
) |
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$ |
— |
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$ |
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TrojanLabel: |
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Distributor Relations |
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( |
) |
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( |
) |
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Honeywell: |
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Customer Contract |
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( |
) |
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— |
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( |
) |
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— |
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Astro Machine: |
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Customer Contract |
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( |
) |
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— |
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( |
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— |
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Trademarks |
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( |
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— |
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( |
) |
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— |
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Intangible Assets, net |
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$ |
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$ |
( |
) |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
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There were
With respect to the acquired intangibles included in the table above, amortization expense of $
9
Estimated amortization expense for the next five fiscal years is as follows:
(In thousands) |
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Remaining |
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2026 |
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2027 |
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2028 |
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2029 |
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Estimated amortization expense |
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$ |
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$ |
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$ |
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$ |
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$ |
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Note 6 – Inventories
Inventories are stated at the lower of cost (standard and average methods) or net realizable value and include material, labor and manufacturing overhead.
(In thousands) |
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April 27, 2024 |
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January 31, 2024 |
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Materials and Supplies |
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$ |
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$ |
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Work-In-Process |
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Finished Goods |
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Inventory Reserve |
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( |
) |
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( |
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$ |
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$ |
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Note 7 – Property, Plant and Equipment
Property, plant and equipment consist of the following:
(In thousands) |
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April 27, 2024 |
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January 31, 2024 |
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Land and Land Improvements |
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$ |
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$ |
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Buildings and Leasehold Improvements |
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Machinery and Equipment |
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Computer Equipment and Software |
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Gross Property, Plant and Equipment |
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Accumulated Depreciation |
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( |
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( |
) |
Net Property Plant and Equipment |
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$ |
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$ |
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Depreciation expense on property, plant and equipment was $
Note 8 – Credit Agreement and Long-Term Debt
On August 4, 2022, we entered into a Second Amendment to the Amended and Restated Credit Agreement (the “Second Amendment”) with Bank of America, N.A., as lender (the “Lender”). The Second Amendment amended the Amended and Restated Credit Agreement dated as of July 30, 2020, as amended by the First Amendment to Amended and Restated Credit Agreement, dated as of March 24, 2021, and the LIBOR Transition Amendment, dated as of December 24, 2021 (the “Existing Credit Agreement,” and the Existing Credit Agreement as amended by the Second Amendment, the “Amended Credit Agreement”), between us and the Lender.
The Amended Credit Agreement provides for (i) a new term loan in the principal amount of $
The Amended Credit Agreement requires that the term loan be paid in quarterly installments on the last day of each of our fiscal quarters over the term of the Amended Credit Agreement on the following repayment schedule: the principal amount of each quarterly installment required to be paid on the last day of each of our fiscal quarters ending on or about October 31, 2022 through July 31, 2023 is $
10
premium or penalty (other than customary breakage costs, if applicable). We may repay borrowings under the revolving credit facility at any time without premium or penalty (other than customary breakage costs, if applicable), but in any event no later than August 4, 2027, and any outstanding revolving loans thereunder will be due and payable in full, and the revolving credit facility will terminate, on such date. We may reduce or terminate the revolving line of credit at any time, subject to certain thresholds and conditions, without premium or penalty.
The interest rates under the Amended Credit Agreement are as follows: the term loan and revolving credit loans bear interest at a rate per annum equal to, at our option, either (a) the BSBY Rate as defined in the Amended Credit Agreement (or, in the case of revolving credit loans denominated in a currency other than U.S. Dollars, the applicable quoted rate), plus a margin that varies within a range of
Amounts repaid under the revolving credit facility may be reborrowed, subject to our continued compliance with the Amended Credit Agreement. No amount of the term loan that is repaid may be reborrowed.
We must comply with various customary financial and non-financial covenants under the Amended Credit Agreement. The financial covenants under the Amended Credit Agreement consist of a maximum consolidated leverage ratio, a minimum consolidated fixed charge coverage ratio and a minimum consolidated asset coverage ratio. The primary non-financial covenants limit our and our subsidiaries’ ability to incur future indebtedness, to place liens on assets, to pay dividends or distributions on our or our subsidiaries’ capital stock, to repurchase or acquire our or our subsidiaries’ capital stock, to conduct mergers or acquisitions, to sell assets, to alter our or our subsidiaries’ capital structure, to make investments and loans, to change the nature of our or our subsidiaries’ business, and to prepay subordinated indebtedness, in each case subject to certain exceptions and thresholds as set forth in the Amended Credit Agreement, certain of which provisions were modified by the Second Amendment. As of April 27, 2024, we believe we are in compliance with all of the covenants in the Credit Agreement.
The Lender is entitled to accelerate repayment of the loans and to terminate its revolving credit commitment under the Amended Credit Agreement upon the occurrence of any of various customary events of default, which include, among other events, the following (which are subject, in some cases, to certain grace periods): failure to pay when due any principal, interest or other amounts in respect of the loans, breach of any of our covenants or representations under the loan documents, default under any other of our or our subsidiaries’ significant indebtedness agreements, a bankruptcy, insolvency or similar event with respect to us or any of our subsidiaries, a significant unsatisfied judgment against us or any of our subsidiaries, or a change of control.
Our obligations under the Amended Credit Agreement continue to be secured by substantially all of our personal property assets (including a pledge of the equity interests we hold in ANI Scandinavia ApS, AstroNova GmbH and AstroNova SAS), subject to certain exceptions, and by a mortgage on our owned real property in West Warwick, Rhode Island, and are guaranteed by, and secured by substantially all of the personal property assets of Astro Machine.
On May 6, 2024, we entered into a Third Amendment to the Amended and Restated Credit Agreement, which further amended the Amended Credit Agreement. See Note 15, “Subsequent Event” for further information regarding the Third Amendment to the Amended and Restated Credit Agreement.
Equipment Financing
In January 2024, we entered into a secured equipment loan facility agreement with Banc of America Leasing & Capital, LLC and borrowed a principal amount of $
11
Summary of Outstanding Debt
Revolving Credit Facility
At April 27, 2024, we had an outstanding balance of $
Long-Term Debt
Long-term debt in the accompanying condensed consolidated balance sheets is as follows:
(In thousands) |
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April 27, |
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January 31, |
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$ |
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$ |
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Equipment Loan ( |
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Total Debt |
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Less: Debt Issuance Costs, net of accumulated amortization |
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Current Portion of Debt |
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Long-Term Debt |
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$ |
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$ |
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During the three months ended April 27, 2024 and April 29, 2023, we recognized interest expense on debt of $
The schedule of required principal payments remaining during the next five years on long-term debt outstanding as of April 27, 2024 is as follows:
(In thousands) |
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Fiscal 2025, remainder |
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$ |
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Fiscal 2026 |
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Fiscal 2027 |
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Fiscal 2028 |
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Fiscal 2029 |
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$ |
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Note 9 – Royalty Obligation
In fiscal 2018, we entered into an Asset Purchase and License Agreement with Honeywell International, Inc. (“Honeywell”) to acquire an exclusive, perpetual, world-wide license to manufacture Honeywell’s narrow-format flight deck printers for two aircraft families along with certain inventory used in the manufacturing of the licensed printers. The purchase price included a guaranteed minimum royalty payment of $
The guaranteed minimum royalty payment obligation was recorded at the present value of the minimum annual royalty payments. As of April 27, 2024, we had paid an aggregate of $
12
all periods presented. A total of $
In fiscal 2023, we entered into an Asset Purchase and License Agreement with Honeywell International Inc. (“New HW Agreement”) to acquire an exclusive, perpetual, world-wide license to manufacture Honeywell’s flight deck printers for the Boeing 787 aircraft. The New HW Agreement provides for royalty payments to Honeywell based on gross revenues from the sales of the printers, paper and repair services of the licensed products in perpetuity. The royalty rates vary based on the year in which they are paid or earned and as products are sold or as services are provided and range from single-digit to mid-double-digit percentages of gross revenue. The New HW Agreement includes a provision for guaranteed minimum royalty payments to be paid in the event that the royalties earned by Honeywell do not meet the minimum for the preceding calendar year as follows: $
As of January 31, 2024, the total outstanding royalty obligation under the New HW Agreement was $
Note 10 – Leases
We enter into lease contracts for certain of our facilities at various locations worldwide. Our leases have remaining lease terms of one to nine years, some of which include options to extend the lease term for periods of up to five years when it is reasonably certain that we will exercise such options.
Balance sheet and other information related to our leases is as follows:
Operating Leases (In thousands) |
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Balance Sheet Classification |
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April 27, |
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January 31, |
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Lease Assets |
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Right of Use Assets |
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$ |
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$ |
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Lease Liabilities – Current |
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Other Accrued Expenses |
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$ |
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$ |
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Lease Liabilities – Long Term |
|
Lease Liabilities |
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$ |
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$ |
|
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Lease cost information is as follows:
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Three Months |
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|||||
Operating Leases (In thousands) |
|
Statement of Income Classification |
|
April 27, |
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April 29, |
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Operating Lease Costs |
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General and Administrative Expense |
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$ |
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$ |
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Maturities of operating lease liabilities are as follows:
(In thousands) |
|
April 27, |
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Fiscal 2025, remaining |
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$ |
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Fiscal 2026 |
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Fiscal 2027 |
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Fiscal 2028 |
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Fiscal 2029 |
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Thereafter |
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Total Lease Payments |
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Less: Imputed Interest |
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( |
) |
Total Lease Liabilities |
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$ |
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As of April 27, 2024, the weighted-average remaining lease term and weighted-average discount rate for our operating leases are
13
Supplemental cash flow information related to leases is as follows:
|
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Three Months |
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|||||
(In thousands) |
|
April 27, |
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April 29, |
|
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Cash paid for operating lease liabilities |
|
$ |
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$ |
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Note 11 – Share-Based Compensation
We have one equity incentive plan from which we are authorized to grant equity awards, the AstroNova, Inc. 2018 Equity Incentive Plan (the “2018 Plan”). The 2018 Plan provides for, among other things, the issuance of awards, including incentive stock options, non-qualified stock options, stock appreciation rights, time-based restricted stock units (“RSUs”), or performance-based restricted stock units (“PSUs”) and restricted stock awards (“RSAs”). At the June 6, 2023 annual meeting of shareholders, the 2018 Plan was amended to increase the number of shares of the Company’s common stock available for issuance by
In addition to the 2018 Plan, we previously granted equity awards under our 2015 Equity Incentive Plan (the “2015 Plan”) and our 2007 Equity Incentive Plan (the “2007 Plan”). No new awards may be issued under either the 2007 Plan or 2015 Plan, but outstanding awards will continue to be governed by those plans. As of April 27, 2024, options to purchase an aggregate of