Astronova Stock Earnings Reports

Key points for investors: Revenue grew 7.7% year-over-year to $40.4M in Q3 FY2025, driven by strong Aerospace/Test & Measurement (T&M) performance (T&M revenue +28.2%), but consolidated margins and profitability declined materially. The recently acquired MTEX business has been the primary drag — MTEX reported an operating loss of $1.1M on $1.7M revenue in the quarter and required a $2.7M working capital loan from AstroNova. Management says MTEX integration has been more time- and resource-intensive than expected; all MTEX functions now report directly to AstroNova and the company has launched a company-wide cost reduction and product-line rationalization initiative. Despite near-term issues, management remains confident in MTEX technology and plans to retrofit/integrate it across product lines; they expect MTEX integration and optimization to extend through mid‑calendar 2025. Test & Measurement/Aerospace is a bright spot (higher margins sequentially) and a planned ToughWriter brand transition (to ~89% of shipments by FY2027) and sharply lower royalty expense (from ~$4M+ to $0.375M in FY2028) are cited as longer‑term margin levers. Cash and leverage have tightened: cash $4.4M, funded debt $48.9M, liquidity $14.7M; cash flow and free cash flow are down year-to-date versus prior year. Management has suspended fiscal ’25/’26 guidance because of the MTEX timeline and will present longer‑term targets in March. Key near-term investor considerations: MTEX remediation risk (management is seeking remedies from the seller), timing to profitability (mid‑2025 target), impact on margins and cash, and the offsetting strength and margin improvement potential from the Aerospace/T&M business and ToughWriter transition.