QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol |
Name of each exchange on which registered | ||
Large accelerated filer | ☐ | ☒ | ||||
Non-accelerated filer |
Smaller reporting company | |||||
Emerging growth company |
Page No. |
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Part I. |
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Item 1. |
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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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6-17 |
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Item 2. |
17-23 |
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Item 3. |
23 |
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Item 4. |
24 |
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Part II. |
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Item 1. |
24 |
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Item 1A. |
24 |
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Item 2. |
24 |
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Item 6. |
25 |
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26 |
Item 1. |
Financial Statements |
April 30, 2022 |
January 31, 2022 |
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(Unaudited) |
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ASSETS |
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CURRENT ASSETS |
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Cash and Cash Equivalents |
$ | $ | ||||||
Accounts Receivable, net |
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Inventories, net |
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Employee Retention Credit Rece i vable |
— | |||||||
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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Intangible Assets, net |
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Goodwill |
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Deferred Tax Assets |
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Right of Use Assets |
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Other Assets |
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TOTAL ASSETS |
$ | $ | ||||||
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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CURRENT LIABILITIES |
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Accounts Payable |
$ | $ | ||||||
Accrued Compensation |
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Other Liabilities and Accrued Expenses |
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Revolving Line of Credit |
|
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— |
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Current Liability – Royalty Obligation |
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Current Portion of Long-Term Debt |
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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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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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Other Long-Term Liabilities |
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Deferred Tax Liabilities |
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TOTAL LIABILITIES |
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SHAREHOLDERS’ EQUITY |
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Common Stock, $ sh |
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Additional Paid-in Capital |
||||||||
Retained Earnings |
||||||||
Treasury Stock, at Cost, |
( |
) | ( |
) | ||||
Accumulated Other Comprehensive Loss, net of tax |
( |
) | ( |
) | ||||
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TOTAL SHAREHOLDERS’ EQUITY |
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|
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TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ | $ | ||||||
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|
|
Three Months Ended |
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April 30, 2022 |
May 1, 2021 |
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Revenue |
$ | $ | ||||||
Cost of Revenue |
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|
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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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|
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Operating Income |
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Other Expense, net |
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|
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Income Before Income Taxes |
||||||||
Income Tax Provision ( Benefit) |
( |
) | ||||||
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|
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Net Income |
$ | $ | ||||||
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|
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Net Income per Common Share—Basic: |
$ | $ | ||||||
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|
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Net Income per Common Share—Diluted: |
$ | $ | ||||||
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|
|
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Weighted Average Number of Common Shares Outstanding: |
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Basic |
||||||||
Diluted |
Three Months Ended |
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April 30, 2022 |
May 1, 2021 |
|||||||
Net Income |
$ | $ | ||||||
Other Comprehensive Loss, Net of Taxes: |
||||||||
Foreign Currency Translation Adjustments |
( |
) | ( |
) | ||||
Loss |
||||||||
|
|
|
|
|||||
Other Comprehensive Loss |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Comprehensive Income (Loss) |
$ | ( |
) | $ | ||||
|
|
|
|
Common Stock |
Additional Paid-in |
Retained |
Treasury |
Accumulated Other Comprehensive |
Total Shareholders’ |
|||||||||||||||||||||||
Shares |
Amount |
Capital |
Earnings |
Stock |
Income (Loss) |
Equity |
||||||||||||||||||||||
Balance January 31, 2021 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||
Share-Based Compensation |
— | — | — | — | — | |||||||||||||||||||||||
Employee Option Exercises |
— | — | — | — | ||||||||||||||||||||||||
Restricted Stock Awards Vested, net |
( |
) | — | ( |
) | — | ( |
) | ||||||||||||||||||||
Net Income |
— | — | — | — | — | |||||||||||||||||||||||
Other Comprehensive Loss |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
|
|
|
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Balance May 1, 2021 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||
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|
|
|
|
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Common Stock |
Additional Paid-in |
Retained |
Treasury |
Accumulated Other Comprehensive |
Total Shareholders’ |
|||||||||||||||||||||||
Shares |
Amount |
Capital |
Earnings |
Stock |
Income (Loss) |
Equity |
||||||||||||||||||||||
Balance January 31, 2022 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||
Share-Based Compensation |
— | — | — | — | — | |||||||||||||||||||||||
Employee Option Exercises |
1 |
— | — | — | ||||||||||||||||||||||||
Restricted Stock Awards Vested, net |
( |
) | — | ( |
) | — | ( |
) | ||||||||||||||||||||
Net Income |
— | — | — | — | — | |||||||||||||||||||||||
Other Comprehensive Loss |
— | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||
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|
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Balance April 30, 202 2 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
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April 30, 2022 |
May 1, 2021 |
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Cash Flows from Operating Activities: |
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Net Income |
$ | $ | ||||||
Adjustments to Reconcile Net Income to Net Cash Provided (Used) by Operating Activities: |
||||||||
Depreciation and Amortization |
||||||||
Amortization of Debt Issuance Costs |
||||||||
Share-Based Compensation |
||||||||
Changes in Assets and Liabilities: |
||||||||
Accounts Receivable |
( |
) | ||||||
Other Receivable – Employee Retention Credit Receivable |
— | |||||||
Inventories |
( |
) | ||||||
Income Taxes |
( |
) | ||||||
Accounts Payable and Accrued Expenses |
( |
) | ( |
) | ||||
Other |
( |
) | ||||||
|
|
|
|
|||||
Net Cash Provided (Used) by Operating Activities |
( |
) | ||||||
Cash Flows from Investing Activities: |
||||||||
Additions to Property, Plant and Equipment |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net Cash Used for Investing Activities |
( |
) | ( |
) | ||||
Cash Flows from Financing Activities: |
||||||||
Net Cash Proceeds from Employee Stock Option Plans |
||||||||
Net Cash Proceeds from Share Purchases under Employee Stock Purchase Plan |
||||||||
Net Cash Used for Payment of Taxes Related to Vested Restricted Stock |
( |
) | ( |
) | ||||
Borrowings under Revolving Credit Facility |
||||||||
Payment of Minimum Guarantee Royalty Obligation |
( |
) | ( |
) | ||||
Proceeds from Long-Term Debt Borrowings |
||||||||
Payoff of Long-Term Debt |
— |
( |
) | |||||
Principal Payments on Long-Term Debt |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net Cash Provided by (Used) for Financing Activities |
( |
) | ||||||
|
|
|
|
|||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents |
||||||||
|
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|
|
|||||
Net Increase (Decrease) in Cash and Cash Equivalents |
( |
) | ||||||
Cash and Cash Equivalents, Beginning of Period |
||||||||
|
|
|
|
|||||
Cash and Cash Equivalents, End of Period |
$ | $ | ||||||
|
|
|
|
|||||
Supplemental Disclosures of Cash Flow Information: |
||||||||
Cash Paid During the Period for Interest |
$ | $ | ||||||
Cash Paid (Received) During the Period for Income Taxes, Net of Refunds |
$ | ( |
) | $ |
Three Months Ended |
||||||||
(In thousands) |
April 30, 2022 |
May 1, 2021 |
||||||
United States |
$ | $ | ||||||
Europe |
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Canada |
||||||||
Asia |
||||||||
Central and South America |
||||||||
Other |
||||||||
|
|
|
|
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Total Revenue |
$ | $ | ||||||
|
|
|
|
Three Months Ended |
||||||||
(In thousands) |
April 30, 2022 |
May 1, 2021 |
||||||
Hardware |
$ | $ | ||||||
Supplies |
||||||||
Service and Other |
||||||||
|
|
|
|
|||||
Total Revenue |
$ | $ | ||||||
|
|
|
|
Three Months Ended |
||||||||
April 30, 2022 |
May 1, 2021 |
|||||||
Weighted Average Common Shares Outstanding – Basic |
||||||||
Effect of Dilutive Options, Restricted Stock Awards and Restricted Stock Units |
||||||||
|
|
|
|
|||||
Weighted Average Common Shares Outstanding – Diluted |
||||||||
|
|
|
|
April 30, 2022 |
January 31, 2022 |
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(In thousands) |
Gross Carrying Amount |
Accumulated Amortization |
Currency Translation Adjustment |
Net Carrying Amount |
Gross Carrying Amount |
Accumulated Amortization |
Currency Translation Adjustment |
Net Carrying Amount |
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Miltope: |
||||||||||||||||||||||||||||||||
Customer Contract Relationships |
$ | $ | ( |
) | $ | — | $ | $ | $ | ( |
) | $ | — | $ | ||||||||||||||||||
RITEC: |
||||||||||||||||||||||||||||||||
Customer Contract Relationships |
( |
) | — | ( |
) | — | ||||||||||||||||||||||||||
TrojanLabel: |
||||||||||||||||||||||||||||||||
Existing Technology |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Distributor Relations |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
Honeywell: |
||||||||||||||||||||||||||||||||
Customer Contract Relationships |
( |
) | — | ( |
) | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Intangible Assets, net |
$ | $ | ( |
) | $ | ( |
) | $ | $ | $ | ( |
) | $ | $ | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
Remaining 2023 |
2024 |
2025 |
2026 |
2027 |
|||||||||||||||
Estimated amortization expense |
$ | $ | $ | $ | $ |
(In thousands) |
April 30, 2022 |
January 31, 2022 |
||||||
Materials and Supplies |
$ | $ | ||||||
Work-In-Process |
||||||||
Finished Goods |
||||||||
|
|
|
|
|||||
Inventory Reserve |
( |
) | ( |
) | ||||
|
|
|
|
|||||
$ | $ | |||||||
|
|
|
|
(In thousands) |
April 30, 2022 |
January 31, 2022 |
||||||
USD Term Loan ( |
$ | $ | ||||||
Debt Issuance Costs, net of accumulated amortization |
( |
) | ( |
) | ||||
Current Portion of Term Loans |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Long-Term Debt |
$ | $ | ||||||
|
|
|
|
(In thousands) |
||||
Fiscal 2023, remainder |
$ | |||
Fiscal 2024 |
||||
Fiscal 2025 |
||||
Fiscal 2026 |
||||
|
|
|||
$ | ||||
|
|
Three Months Ended |
||||||||||||||||||||
Amount of Gain (Loss) Recognized in OCI on Derivative |
Location of Gain (Loss) Reclassified from Accumulated OCI into Income |
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income |
||||||||||||||||||
Cash Flow Hedge (In thousands) |
April 30, 2022 |
May 1, 2021 |
April 30, 2022 |
May 1, 2021 |
||||||||||||||||
Swap contracts |
$ | — | $ | $ | ( |
) | $ | ( |
) | |||||||||||
Operating Leases (In thousands) |
Balance Sheet Classification |
April 30, 2022 |
January 31, 2022 |
|||||||||
Lease Assets |
Right of Use Assets | $ | $ | |||||||||
Lease Liabilities – Current |
Other Liabilities and Accrued Expenses | |||||||||||
Lease Liabilities – Long Term |
Lease Liabilities | $ |
Three Months Ended |
||||||||||||
Operating Leases (In thousands) |
Statement of Income Classification |
April 30, 2022 |
May 1, 2021 |
|||||||||
Operating Lease Costs |
General and Administrative Expense | $ | $ |
(In thousands) |
April 30, 2022 |
|||
2023, remaining |
$ | |||
2024 |
||||
2025 |
||||
2026 |
||||
2027 |
||||
Thereafter |
||||
Total Lease Payments |
||||
Less: Imputed Interest |
( |
) | ||
Total Lease Liabilities |
$ | |||
Three Months Ended |
||||||||
(In thousands) |
April 30, 2022 |
May 1, 2021 |
||||||
Cash paid for amounts included in the measurement of lease liabilities: |
||||||||
Operating cash flows for operating leases |
$ | $ |
(In thousands) |
Foreign Currency Translation Adjustments |
Cash Flow Hedges |
Total |
|||||||||
Balance at January 31, 2022 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Other Comprehensive Loss before reclassification |
( |
) | — | ( |
) | |||||||
Amounts reclassified from AOCL to Earnings |
— | |||||||||||
|
|
|
|
|
|
|||||||
Other Comprehensive Income (Loss) |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Balance at April 30, 2022 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
|
|
|
|
|
|
Three Months Ended |
||||||||
(In thousands) |
April 30, 2022 |
May 1, 2021 |
||||||
Stock Options |
$ | $ | ||||||
Restricted Stock Awards and Restricted Stock Units |
||||||||
Employee Stock Purchase Plan |
||||||||
|
|
|
|
|||||
Total |
$ | $ | ||||||
|
|
|
|
Number of Options |
Weighted Average Exercise Price |
|||||||
Outstanding at January 31, 202 2 |
$ | |||||||
Granted |
||||||||
Exercised |
( |
) | ||||||
Forfeited |
( |
) | ||||||
Canceled |
( |
) | ||||||
|
|
|
|
|||||
Outstanding at April 30, 2022 |
$ | |||||||
|
|
|
|
Outstanding |
Exercisable |
|||||||||||||||||||||||
Range of Exercise prices |
Number of Shares |
Weighted- Average Exercise Price |
Weighted- Average Remaining Contractual Life |
Number of Shares |
Weighted- Average Exercise Price |
Weighted Average Remaining Contractual Life |
||||||||||||||||||
$ |
$ | $ | ||||||||||||||||||||||
$ |
$ | $ | ||||||||||||||||||||||
$ |
$ | $ | ||||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|||||||||||||
$ | $ | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
RSAs & RSUs |
Weighted Average Grant Date Fair Value |
|||||||
Outstanding at January 31, 2022 |
$ | |||||||
Granted |
||||||||
Vested |
( |
) | ||||||
Forfeited |
( |
) | ||||||
|
|
|
|
|||||
Outstanding at April 30, 2022 |
$ | |||||||
|
|
|
|
First Quarter Ended |
||||
Fiscal 2023 |
% | |||
Fiscal 2022 |
( |
)% |
Three Months Ended |
||||||||||||||||
Revenue |
Segment Operating Profit |
|||||||||||||||
(In thousands) |
April 30, 2022 |
May 1, 2021 |
April 30, 2022 |
May 1, 2021 |
||||||||||||
Product Identification |
$ | $ | $ | $ | ||||||||||||
T&M |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | $ | ||||||||||||||
|
|
|
|
|||||||||||||
Corporate Expenses |
||||||||||||||||
|
|
|
|
|||||||||||||
Operating Income |
||||||||||||||||
Other Expense, Net |
||||||||||||||||
|
|
|
|
|||||||||||||
Income Before Income Taxes |
||||||||||||||||
Income Tax Provision (Benefit) |
( |
) | ||||||||||||||
|
|
|
|
|||||||||||||
Net Income |
$ | $ | ||||||||||||||
|
|
|
|
April 30, 2022 |
||||||||||||||||||||
Fair Value Measurement |
||||||||||||||||||||
(In thousands) |
Level 1 |
Level 2 |
Level 3 |
Total |
Carrying Value |
|||||||||||||||
Long-Term debt and related current maturities |
$ | — | $ | — | $ | $ | $ |
January 31, 2022 |
||||||||||||||||||||
Fair Value Measurement |
||||||||||||||||||||
(In thousands) |
Level 1 |
Level 2 |
Level 3 |
Total |
Carrying Value |
|||||||||||||||
Long-Term debt and related current maturities |
$ | — | $ | — | $ | $ | $ |
Item 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• | Product Identification (“PI”) – offers color and monochromatic digital label printers, direct-to-package on-site and remote service, spare parts and various service contracts. |
• | Test and Measurement (“T&M”) – offers a suite of products and services that acquire data from local and networked data streams and sensors as well as wired and wireless networks. The T&M segment includes a line of aerospace printers that are used to print hard copies of data required for the safe and efficient operation of aircraft including navigation maps, clearances, arrival and departure procedures, flight itineraries, weather maps, performance data, passenger data, and various air traffic control data. Aerospace products also include aircraft networking systems for high-speed onboard data transfer. T&M also provides repairs, service and spare parts. |
(Dollars in thousands) |
April 30, 2022 |
As a % of Revenue |
May 1, 2021 |
As a % of Revenue |
% Change Compared to Prior Year |
|||||||||||||||
Product Identification |
$ | 21,724 | 70.1 | % | $ | 23,098 | 79.4 | % | (5.9 | )% | ||||||||||
T&M |
9,286 | 29.9 | % | 5,980 | 20.6 | % | 55.3 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 31,010 | 100.0 | % | $ | 29,078 | 100.0 | % | 6.6 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
||||||||||||||||
Revenue |
Segment Operating Profit |
|||||||||||||||
(In thousands) |
April 30, 2022 |
May 1, 2021 |
April 30, 2022 |
May 2, 2020 |
||||||||||||
Product Identification |
$ | 21,724 | $ | 23,098 | $ | 1,413 | $ | 2,729 | ||||||||
T&M |
9,286 | 5,980 | 1,911 | 350 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | 31,010 | $ | 29,078 | 3,324 | 3,079 | ||||||||||
|
|
|
|
|||||||||||||
Corporate Expenses |
2,560 | 2,344 | ||||||||||||||
|
|
|
|
|||||||||||||
Operating Income |
764 | 735 | ||||||||||||||
Other Expense, Net |
279 | 369 | ||||||||||||||
|
|
|
|
|||||||||||||
Income Before Income Taxes |
485 | 366 | ||||||||||||||
Income Tax Provision (Benefit) |
60 | (227 | ) | |||||||||||||
|
|
|
|
|||||||||||||
Net Income |
$ | 425 | $ | 593 | ||||||||||||
|
|
|
|
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
Item 4. |
Controls and Procedures |
Item 1. |
Legal Proceedings |
Item 1A. |
Risk Factors |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
Total Number of Shares Repurchased |
Weighted Average Price paid Per Share |
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
Maximum Number of Shares That May Be Purchased Under the Plans or Programs |
|||||||||||||
February 1—February 28 |
— | $ | — | — | — | |||||||||||
March 1—March 31, |
11,591 | (a)(b) | $ | 14.82 | (a) (b) | — | — | |||||||||
April 1—April 30 |
5,159 | (c) | $ | 14.92 | (c) | — | — |
(a) | Executives of the Company delivered 4,094 shares of the Company’s common stock toward the satisfaction of taxes due with respect to vesting of restricted shares. The shares delivered were valued at an average market value of $14.70 per share and are included with treasury stock in the consolidated balance sheet. These transactions were not part of a publicly announced purchase plan or program. |
(b) | Executives of the Company delivered 7,497 shares of the Company’s common stock toward the satisfaction of taxes due with respect to vesting of restricted shares. The shares delivered were valued at a weighted-average market value of $14.89 per share and are included with treasury stock in the consolidated balance sheet. These transactions were not part of a publicly announced purchase plan or program. |
(c) | Executives of the Company delivered 5,159 shares of the Company’s common stock toward the satisfaction of taxes due with respect to vesting of restricted shares. The shares delivered were valued at a weighted-average market value of $14.92 per share and are included with treasury stock in the consolidated balance sheet. These transactions were not part of a publicly announced purchase plan or program. |
Item 6. |
Exhibits |
ASTRONOVA, INC. (Registrant) | ||||||
Date: June 8, 2022 | By | /s/ Gregory A. Woods | ||||
Gregory A. Woods, | ||||||
President and Chief Executive Officer | ||||||
(Principal Executive Officer) | ||||||
By | /s/ David S. Smith | |||||
David S. Smith, | ||||||
Vice President, Chief Financial Officer and Treasurer | ||||||
(Principal Accounting Officer and Principal Financial Officer) |