ALOT AstroNova, Inc.

Management Discussion

• Three Months Ended August 3, 2019 vs. Three Months Ended July 28, 2018
• Revenue for the second quarter of the current year was $33.5 million, representing a slight decrease compared to the previous year second quarter revenue of $33.8 million. Revenue through domestic channels for the second quarter of the current year was $20.6 million, an increase of 3.4% over the prior year’s second quarter. International revenue for the second quarter of the current year was $12.9 million, a 7.3% decrease over the previous year second quarter, and represents 38.3% of AstroNova’s second quarter revenue. Current year second quarter international revenue includes an unfavorable foreign exchange rate impact of $0.3 million.
• Hardware revenue in the current quarter was $12.4 million, a 3.7% decrease compared to the prior year’s second quarter revenue of $12.9 million. The decrease is attributable to both segments, as T&M hardware revenue decreased 3.0% and PI hardware revenue decreased 5.2% compared to the second quarter of the prior year. The decrease in hardware sales for the T&M segment is primarily due to a decline in the Aerospace printer product line sales as a result of the ripple effects of the Boeing 737 Max grounding, due in part to new aircraft shipment reductions as well as deferral of several retrofit printer upgrade orders so that those planes could remain in service. Although total hardware sales for the PI segment were down for the current quarter, the product launch of the new QL -300 provided a significant contribution to second quarter revenue and both Quick Label monochromatic printers and TrojanLabelT2-C printers experienced continued growth during the current quarter.