AstroNova Inc Q2 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Thomas Spiro - Spiro Capital - Analyst : First on the restructuring and retrofit initiatives. With respect to retrofit, the charge I see is $852,000. My recollection is that a month or so ago, you folks estimated that at $600,000. If I'm recalling correctly, can you explain the difference?

Question: Thomas Spiro - Spiro Capital - Analyst : And this process will be complete by the end of the fiscal year?

Question: Thomas Spiro - Spiro Capital - Analyst : I see. Okay. That's very helpful. There's some low-volume and low-margin products that we're withdrawing from. We're streamlining channel partners, et cetera, et cetera. Roughly speaking, how much by way of sales will be -- will we be walking away from through these initiatives? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 06, 2023 / 1:00PM, ALOT.OQ - Q2 2024 AstroNova Inc Earnings Call

Question: Thomas Spiro - Spiro Capital - Analyst : And on the streamlining of channel partners or reducing channel partners, are we doing that domestically primarily? Is that where that's occurring? Is that overseas? Is it both?

Question: Thomas Spiro - Spiro Capital - Analyst : I see. And on Astro Machine, as I recall, when we acquired it, its sales were running something like $21 million, $22 million, $23 million a year. And then I believe last quarter, it seemed kind of a little weak on a quarterly basis. Is it still running at that annual rate of $21 million, $22 million, $23 million? Has it changed much?

Question: Thomas Spiro - Spiro Capital - Analyst : I see. I see. So product -- I'm sorry, did I cut you off?

Question: Thomas Spiro - Spiro Capital - Analyst : I see. So if I were to look at the PI sales for the quarter of just under 26% and back out 5-ish, PI is running well under where it was last year.

Question: Thomas Spiro - Spiro Capital - Analyst : Yes. Okay. All right. This is most helpful.

Question: John Deysher - Pinnacle Value Fund - Analyst : Just a quick question on the retrofit expense, $852,000. That seems to be a supplier-related issue. And I'm just curious, are they sharing in any of the cost of retrofitting the machines? And do we have any recourse against them?

Question: John Deysher - Pinnacle Value Fund - Analyst : Sorry, I must have missed that. Where was that disclosed?

Question: John Deysher - Pinnacle Value Fund - Analyst : Limitation of liability. Okay.

Question: John Deysher - Pinnacle Value Fund - Analyst : Okay. I just got to say, so there's really no recourse at this point against the supplier?

Question: John Deysher - Pinnacle Value Fund - Analyst : Okay.

Question: John Deysher - Pinnacle Value Fund - Analyst : Go ahead.

Question: John Deysher - Pinnacle Value Fund - Analyst : Okay.

Question: John Deysher - Pinnacle Value Fund - Analyst : Well, I guess what I'm trying to understand, is the supplier matching that obligation? Or who's on the hook primarily here, you or the supplier?

Question: John Deysher - Pinnacle Value Fund - Analyst : Okay.