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What changed in AstroNova, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of AstroNova, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+278 added−222 removedSource: 10-K (2025-04-15) vs 10-K (2024-04-12)

Top changes in AstroNova, Inc.'s 2025 10-K

278 paragraphs added · 222 removed · 173 edited across 7 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

66 edited+28 added−16 removed95 unchanged
Biggest changeThe loss of our Honeywell license agreement could have a material adverse impact on our business. Operating outside the United States also exposes us to additional intellectual property risk. The laws and enforcement practices of certain jurisdictions in which we operate do not protect our intellectual property rights to the same extent as in the United States.
Biggest changeThe laws and enforcement practices of certain jurisdictions in which we operate do not protect our intellectual property rights to the same extent as in the United States. Any diminution in our ability to defend against the unauthorized use of these rights and assets could have an adverse effect on our results of operations and financial condition.
There is no assurance that we will not be subject to claims that we have violated applicable laws or codes of conduct, that we will be able to successfully defend against such claims or that we will not be subject to significant fines and penalties in the event we are found not to be in compliance with such laws or codes of conduct.
There is no assurance that we will not be subject to claims that we have violated applicable laws or codes of conduct, that we will be able to defend against such claims successfully, or that we will not be subject to significant fines and penalties in the event we are found not in compliance with such laws or codes of conduct.
We are also required to comply with other covenants and conditions, set forth in the credit agreement, including, among others, limitations on our and our subsidiaries’ ability to incur future indebtedness, to place liens on assets, to pay dividends or distributions on their capital stock, to repurchase or acquire their capital stock, to conduct mergers or acquisitions, to sell assets, to alter their capital structure, to make investments and loans, to change the nature of their business, and to prepay subordinated indebtedness, in each case subject to certain exceptions and thresholds as set forth in the credit agreement.
We are also required to comply with other covenants and conditions, set forth in our Amended Credit Agreement, including, among others, limitations on our and our subsidiaries’ ability to incur future indebtedness, to place liens on assets, to pay dividends or distributions on their capital stock, to repurchase or acquire their capital stock, to conduct mergers or acquisitions, to sell assets, to alter their capital structure, to make investments and loans, to change the nature of their business, and to prepay subordinated indebtedness, in each case subject to certain exceptions and thresholds as set forth in the credit agreement.
Any customer uncertainty regarding the timeline for rolling out new products or our plans for future support of existing products may cause customers to delay purchase decisions or purchase competing products which would adversely affect our business and operating results. Operational and Business Strategy Risks: We are dependent upon contract manufacturers for some of our products.
Any customer uncertainty regarding the timeline for rolling out new products or our plans 7 for future support of existing products may cause customers to delay purchase decisions or purchase competing products which would adversely affect our business and operating results. Operational and Business Strategy Risks: We are dependent upon contract manufacturers for some of our products.
Additional qualified subcontractors may not be available or may not be available on a timely or cost-competitive 8 basis. Any interruption in the supply, increase in the cost of the products manufactured by a third-party subcontractor, or failure of a subcontractor to meet quality standards could have a material adverse effect on our business, operating results and financial condition.
Additional qualified subcontractors may not be available or may not be available on a timely or cost-competitive basis. Any interruption in the supply, increase in the cost of the products manufactured by a third-party subcontractor, or failure of a subcontractor to meet quality standards could have a material adverse effect on our business, operating results and financial condition.
If we are unable to demonstrate that it is more likely than not that we will not be able to generate sufficient future taxable income to realize the net carrying value of deferred tax assets, we will record a valuation allowance to reduce the deferred tax assets to estimated realizable value, which could result in a material income tax charge.
If we are unable to demonstrate that it is more likely than not that we will not be able to generate sufficient future taxable income to realize the net carrying value of deferred tax assets, we 12 will record a valuation allowance to reduce the deferred tax assets to estimated realizable value, which could result in a material income tax charge.
Thus, we have and will continue to generate a generally limited amounts of hazardous waste in our operations. We manage our compliance with laws and regulations and the proper mitigation of risks internally and through the input of external consultants and outside service providers and we believe we are in material compliance with all applicable environmental laws and regulations.
Thus, we have and will continue to generate a generally limited amounts of hazardous waste in our operations. We manage our compliance with laws and regulations and the proper mitigation of risks internally and through the input of external consultants and outside service providers, and we believe we are 16 in material compliance with all applicable environmental laws and regulations.
In certain instances, as permitted by applicable law and NASDAQ rules, acquisitions, such as the Astro Machine acquisition, may be consummated without seeking and obtaining shareholder approval, in which case shareholders will not have an opportunity to consider and vote upon the merits of such an acquisition.
In certain instances, as permitted by applicable law and NASDAQ rules, acquisitions, such as the MTEX and Astro Machine acquisition, may be consummated without seeking and obtaining shareholder approval, in which case shareholders will not have an opportunity to consider and vote upon the merits of such an acquisition.
As part of our review, we consider positive and negative evidence, including cumulative results of recent years. If we are unable to successfully comply with our credit agreement with Bank of America or secure alternative financing, our business and financial condition could be materially adversely affected.
As part of our review, we consider positive and negative evidence, including cumulative results of recent years. If we are unable to comply with our credit agreement with Bank of America or secure alternative financing, our business and financial condition could be materially adversely affected.
Foreign Corrupt Practices Act and other applicable U.S. and foreign laws prohibiting corrupt payments to 15 government officials and other third parties. For example, the increased use of sanctions in U.S. international relations recently has increased our cost of compliance with the regulations intended to enforce them.
Foreign Corrupt Practices Act and other applicable U.S. and foreign laws prohibiting corrupt payments to government officials and other third parties. For example, the increased use of sanctions in U.S. international relations recently has increased our cost of compliance with the regulations intended to enforce them.
Financial and Economic Risks: We face risks related to recession, inflation, stagflation and other economic conditions . Customer demand for our products may be impacted by weak economic conditions, inflation, stagflation, recession, rising interest rates, equity market volatility or other negative economic factors in the U.S. or other nations.
We face risks related to recession, inflation, stagflation and other economic conditions. Customer demand for our products may be impacted by weak economic conditions, inflation, stagflation, recession, rising interest rates, equity market volatility or other negative economic factors in the U.S. or other nations.
We compete based on technology, performance, price, quality, reliability, brand, distribution and customer service and support. Our success in future performance is largely dependent upon our ability to compete successfully in the markets we currently serve and to expand into additional market segments.
We compete based on technology, performance, price, quality, reliability, brand, distribution and customer service and support. Our success in future performance is largely dependent upon our ability to compete successfully in the 8 markets we currently serve and to expand into additional market segments.
Our credit agreement with Bank of America, N.A. requires us, among other things, to satisfy certain financial ratios on an ongoing basis, consisting of a maximum consolidated leverage ratio, a minimum consolidated fixed charge coverage ratio and an asset coverage ratio.
Our credit agreement with Bank of America, N.A. requires us, among other things, to satisfy certain financial ratios on an ongoing basis, consisting of a maximum consolidated leverage ratio and certain minimum consolidated fixed charge coverage ratios.
Changes in these rules or their interpretation or changes in underlying assumptions, estimates, or judgments could significantly change our reported or expected financial performance or financial condition. Item 1B. Unreso lved Staff Comments None.
Changes in these rules or their interpretation or changes in underlying assumptions, estimates, or judgments could significantly change our reported or expected financial performance or financial condition. 17 Item 1B. Unreso lved Staff Comments None.
For example, under these conditions or the expectation of such conditions, our customers may cancel orders, delay purchasing decisions, or reduce their use of 11 our services.
For example, under these conditions or the expectation of such conditions, our customers may cancel orders, delay purchasing decisions, or reduce their use of our services.
We may be required in the future to record a significant charge to earnings in our financial statements during the period in which any impairment of our long-lived assets is determined. Such charges could have a significant adverse impact on our results of operations and our financial condition.
We may be required in the future to record additional significant charges to earnings in our financial statements during the period in which any impairment of our long-lived assets is determined. Such charges could have a significant adverse impact on our results of operations and our financial condition.
There are numerous federal, state, local, and international laws and regulations regarding privacy and the 16 storage, sharing, use, processing, disclosure and protection of this kind of information, the scope of which are changing, inconsistent and conflicting and subject to differing interpretations.
There are numerous federal, state, local, and international laws and regulations regarding privacy and the storage, sharing, use, processing, disclosure, and protection of this kind of information, the scope of which is changing, inconsistent, conflicting, and subject to differing interpretations.
These systems are vulnerable to damage, disruptions and/or shutdowns due to attacks by cyber-criminals, data breaches, employee error, power outages, computer viruses, telecommunication or utility failures, systems failures, natural disasters, catastrophic events, or other unforeseen events.
These systems are vulnerable to damage, disruptions, and/or shutdowns due to attacks by cyber-criminals, data breaches, employee errors, power outages, computer viruses, telecommunication or utility failures, systems failures, natural disasters, catastrophic events, or other unforeseen events.
We have identified a material weakness in our internal control over financial reporting and that weakness has led to a conclusion that our internal control over financial reporting and disclosure controls and procedures were not effective as of January 31, 2024.
In fiscal 2024, we identified a material weakness in our internal control over financial reporting and that weakness has led to a conclusion that our internal control over financial reporting and disclosure controls and procedures were not effective as of January 31, 2024.
If our risk assessments prove incorrect and we were to have a loss not fully covered by insurance, our financial condition and results of operations could be materially negatively impacted. We depend on our key employees and other highly qualified personnel and our ability to attract and develop new, talented professionals.
If our risk assessments prove incorrect and we have a loss that is not fully covered by insurance, our financial condition and results of operations could be materially negatively impacted. We depend on our key employees and other highly qualified personnel and our ability to attract and develop new, talented professionals.
We have significant inventories on hand. We maintain a significant amount of inventory, and as a result of recent supply chain disruptions and announced or anticipated price increases from suppliers, we have further increased the amount of inventory we maintain on hand to ensure we are able to meet market demand for our products at a reasonable price.
We maintain a significant amount of inventory, and as a result of recent supply chain disruptions and announced or anticipated price increases from suppliers and possibly from tariffs, we have further increased the amount of inventory we maintain on hand to ensure we are able to meet market demand for our products at a reasonable price.
While in the past, we have successfully obtained partial compensation from suppliers for their contribution to product quality issues, we may not be successful in such a recovery in the future, and these recoveries have not in the past and are not in the future likely to fully offset the full financial impact on us.
While in the past, we have successfully obtained partial compensation from suppliers for their contribution to product quality issues, we may not be successful in such a recovery in the future, and these recoveries have not in the past and are not in the future likely to fully offset all of the financial impact on us.
Revenue from international operations, which includes both direct and indirect sales to customers outside the U.S., accounted for approximately 43% of our total revenue for fiscal 2024, and we anticipate that international sales will continue to account for a significant portion of our revenue. In addition, we have employees, suppliers, contractors and facilities located outside the U.S.
Revenue from international operations, which includes both direct and indirect sales to customers outside the U.S., accounted for approximately 41% of our total revenue for fiscal 2025, and we anticipate that international sales will continue to account for a significant portion of our revenue. In addition, we have employees, suppliers, contractors and facilities located outside the U.S.
We also expect that there will continue to be new laws, regulations, and industry standards concerning privacy, data protection, and information security proposed and enacted in various jurisdictions. For example, in 2016 the European Commission adopted the General Data Protection Regulation (GDPR), a comprehensive privacy and data protection reform that became effective in May 2018.
We also expect that new laws, regulations, and industry standards will continue to be proposed and enacted in various jurisdictions concerning privacy, data protection, and information security proposed and passed in multiple jurisdictions. For example, in 2016, the European Commission adopted the General Data Protection Regulation (GDPR), a comprehensive privacy and data protection reform effective May 2018.
Additionally, other jurisdictions have enacted or are enacting data localization laws that require data generated in or relating to the residents of those jurisdictions to be physically stored within those jurisdictions. In many cases, these laws and regulations apply not only to transfers between unrelated third parties but also to transfers between us and our subsidiaries.
Additionally, other jurisdictions have enacted or are enacting data localization laws that require data generated in or relating to the residents of those jurisdictions to be physically stored within those jurisdictions. In many cases, these laws and regulations apply to transfers between unrelated third parties and transfers between us and our subsidiaries.
In addition, through our acquisitions, we have assumed, and may in the future, assume liabilities related to products previously developed by an acquired company that may not have been subjected to adequate product development, testing and quality control processes, and may have unknown or undetected defects.
In addition, through our acquisitions of Astro Machine and MTEX, we have assumed, and may in the future, assume liabilities related to products previously developed by an acquired company that may not have been subjected to adequate product development, testing and quality control processes, and may have unknown or undetected defects.
In any acquisition that we complete, we cannot be certain that: • We will successfully integrate the operations of the acquired business with our own; • All the benefits expected from such integration will be realized; • Management’s attention will not be diverted or divided, to the detriment of current operations; • Amortization of acquired intangible assets or possible impairment of acquired intangibles will not have a negative impact on operating results or other aspects of our business; • Delays or unexpected costs related to the acquisition will not have a detrimental impact on our business, operating results and financial condition; • Customer dissatisfaction with, or performance problems at, an acquired company will not have an adverse impact on our reputation; • We will successfully implement effective disclosure controls and internal controls over financial reporting at the acquired business in a timely fashion; and • Respective operations, management and personnel will be compatible.
In any acquisition that we complete, we cannot be certain that: • We will successfully integrate the operations of the acquired business with our own; • All the benefits expected from such integration will be realized; • Management’s attention will not be diverted or divided, to the detriment of current operations; • Amortization of acquired intangible assets or possible impairment of acquired intangibles will not have a negative impact on operating results or other aspects of our business; • Delays or unexpected costs related to the acquisition will not have a detrimental impact on our business, operating results and financial condition; • Customer dissatisfaction with, or performance problems at, an acquired company will not have an adverse impact on our reputation; • Our acquisitions will achieve the planned objectives, return on investment or future earnings expectations; • We will successfully implement effective disclosure controls and internal controls over financial reporting at the acquired business in a timely fashion; and • Respective operations, management and personnel will be compatible.
Accordingly, our business, operating results and financial condition could be harmed by a variety of factors, including: • Interruption to transportation flows for delivery of parts to us and finished goods to our customers; • Customer and vendor financial stability; • Fluctuations in foreign currency exchange rates; • Changes in a specific country’s or region’s environment including political, economic, monetary, regulatory, or other conditions; • Trade protection measures and import or export licensing requirements; • Negative consequences from changes in tax laws; • Difficulty in managing and overseeing operations that are distant and remote from corporate headquarters; • Difficulty in obtaining and maintaining adequate staffing; • Differing labor regulations; • Failure to comply with complex and rapidly changing government economic sanctions against other countries, especially arising from responses to armed conflict; • Unexpected changes in regulatory requirements; and • Geopolitical turmoil, including terrorism, war and public health disruptions, such as that caused by the COVID-19 pandemic or Russia’s invasion of Ukraine.
Accordingly, our business, operating results and financial condition could be harmed by a variety of factors, including: • Interruption to transportation flows for delivery of parts to us and finished goods to our customers; • Customer and vendor financial stability; • Fluctuations in foreign currency exchange rates; 11 • Changes in a specific country’s or region’s environment including political, economic, monetary, regulatory, or other conditions; • Trade protection measures and import or export licensing requirements, including the imposition of additional sanctions, tariffs or other trade restrictions or embargoes; • Negative consequences from changes in tax laws; • Difficulty in managing and overseeing operations that are distant and remote from corporate headquarters; • Difficulty in obtaining and maintaining adequate staffing; • Differing labor regulations; • Failure to comply with complex and rapidly changing government economic sanctions against other countries, especially arising from responses to armed conflict; • Unexpected changes in regulatory requirements; and • Geopolitical turmoil, including terrorism, war, market dislocations, and public health disruptions, such as that caused by the COVID-19 pandemic, the Russia-Ukraine war or the impact of recently announced tariffs and other trade protection measures.
If we are unable to compete successfully, our customers could seek alternative solutions from our competitors and we could lose market share, which could materially and adversely affect our business, results of operations and financial position. Our profitability is dependent upon our ability to obtain adequate pricing for our products and to control our cost structure .
If we are unable to compete successfully, our customers could seek alternative solutions from our competitors and we could lose market share, which could materially and adversely affect our business, results of operations and financial position. Our profitability is dependent upon our ability to control our cost structure .
If we are not able to successfully integrate or divest businesses, products, technologies or personnel that we acquire or divest, or able to realize the expected benefits of our acquisitions, divestitures or strategic partnerships, our business, results of operations and financial condition could be adversely affected.
If we are not able to successfully integrate or divest businesses, products, technologies or personnel that we acquire or divest, or if we are not able to realize the expected benefits of our acquisitions, divestitures or strategic partnerships, our business, results of operations and financial condition could be adversely affected. 14 If we are unable to realize the benefits of our acquisition of MTEX, our business could be harmed.
We collect and store certain data, including proprietary business information, and may have access to confidential or personal information that is subject to privacy and security laws, regulations and customer-imposed controls. Security breaches or other unauthorized access to, or the use or transmission of, personal user information could result in a variety of claims against us, including privacy-related claims.
We collect and store specific data, including proprietary business information, and may have access to confidential or personal information subject to privacy and security laws, regulations, and customer-imposed controls. Security breaches or other unauthorized access to, or the use or transmission of, personal user information could result in various claims against us, including privacy-related claims.
All these evolving compliance and operational requirements impose significant costs that are likely to increase over time. While we continue to assess these requirements and the ways they may impact the conduct of our business, we believe that we materially comply with applicable laws and industry codes of conduct relating to privacy and data protection.
All these evolving compliance and operational requirements impose significant costs that will likely increase over time. While we continue to assess these requirements and how they may impact our business's conduct, we believe that we materially comply with applicable laws and industry codes of conduct relating to privacy and data protection.
We actively manage these risks through a variety of hardware and software-based techniques that we own, license, or otherwise procure from third parties under contract to safeguard our systems, and we own or procure from third parties system data storage redundancy and disaster recovery capability.
We actively manage these risks through various hardware and software-based techniques that we own, license, or otherwise procure from third parties under contract to safeguard our systems. We also own or procure data storage redundancy and disaster recovery capability from third parties.
To date, the impact of the Russian invasion of Ukraine and the resulting governmental sanctions and our decision to halt all activities in the affected areas has had an immaterial direct impact on our revenues.
To date, the impact of the Russia-Ukraine war and the resulting governmental sanctions followed by our decision to halt all activities in the affected areas, has had an immaterial direct impact on our revenues.
The credit agreement governing our credit facility with Bank of America, N.A. contains, and any future debt agreements may include several restrictive covenants that impose significant operating and financial restrictions on us and our subsidiaries.
The agreements governing our indebtedness subject us to various restrictions that limit our ability to pursue business opportunities. The credit agreement governing our credit facility with Bank of America, N.A. contains, and any future debt agreements may include, several restrictive covenants that impose significant operating and financial restrictions on us and our subsidiaries.
For example, in the recently acquired Astro Machine business, revenues are concentrated in a relatively small number of customers.
For example, Astro Machine revenues are concentrated in a relatively small number of customers.
However, in the future, such events could result in legal claims or proceedings, liability or penalties under privacy laws, disruption in operations, and damage to our brand and reputation, all of which could adversely affect our business, operating results and financial condition.
However, in the future, such events could result in legal claims or proceedings, liability or penalties under privacy laws, disruption in operations, and damage to our brand and reputation, all of which could adversely affect our business, operating results, and financial condition. We maintain insurance for various cybersecurity risks to mitigate their possible impact.
In addition, in response to these higher costs, we may choose to reduce the amount of insurance we maintain because we believe our improvements in our cybersecurity profile have reduced our risk exposure relative to the increased cost of insurance.
If we can do so, it may be at substantially higher costs. In addition, in response to these higher costs, we may choose to reduce the amount of insurance we maintain because our improvements in our cybersecurity profile have reduced our risk exposure relative to the increased cost of insurance.
Any of these factors could cause us to experience an effective tax rate significantly different from previous periods or our current expectations. 12 Changes to tax laws and regulations or changes to the interpretation thereof, the ambiguity of tax laws and regulations, the subjectivity of factual interpretations, uncertainties regarding the geographic mix of earnings in any particular period, and other factors could have a material impact on our estimates of our effective tax rate and our deferred tax assets and liabilities.
Changes to tax laws and regulations or changes to the interpretation thereof, the ambiguity of tax laws and regulations, the subjectivity of factual interpretations, uncertainties regarding the geographic mix of earnings in any particular period, and other factors could have a material impact on our estimates of our effective tax rate and our deferred tax assets and liabilities.
Management is taking action to remediate this material weakness in its internal controls over financial reporting by designing an effective control environment and expanding our existing enterprise resource planning system to include the Astro Machine subsidiary.
As of January 31, 2025, management successfully remediated this material weakness in its internal controls over financial reporting by designing an effective control environment and expanding our existing enterprise resource planning system to include the Astro Machine subsidiary.
Such restrictive covenants may significantly limit our ability to: • Incur future indebtedness; • Place liens on assets; • Pay dividends or distributions on our and our subsidiaries’ capital stock; • Repurchase or acquire our capital stock; • Conduct mergers or acquisitions; • Sell assets; and/or • Alter our or our subsidiaries’ capital structure, to make investments and loans, to change the nature of their business, and to prepay subordinated indebtedness. 13 We may not realize the anticipated benefits of past or future acquisitions, divestitures and strategic partnerships, and integration of acquired companies or divestiture of businesses may negatively impact our overall business.
Such restrictive covenants may significantly limit our ability to: • Incur future indebtedness; • Place liens on assets; • Pay dividends or distributions on our and our subsidiaries’ capital stock; • Repurchase or acquire our capital stock; • Conduct mergers or acquisitions; 13 • Sell assets; and/or • Alter our or our subsidiaries’ capital structure, to make investments and loans, to change the nature of their business, and to prepay subordinated indebtedness.
If we were to violate the terms of the credit agreement and we were unable to renegotiate its terms at that time or secure alternative financing, it could have a material adverse impact on us. The agreements governing our indebtedness subject us to various restrictions that limit our ability to pursue business opportunities.
If, in the future, we were to violate the terms of our credit agreement and we were unable to renegotiate its terms at that time or secure alternative financing, it could have a material adverse impact on us. Our business has substantial indebtedness.
When these changes or events occur, we may incur costs to change our business strategy and may need to write down the value of assets or sell certain assets.
When these changes or events occur, we may incur costs to change our business strategy and may need to write down the value of assets or sell certain assets. In any of these events our costs may increase, and we may have significant charges or losses associated with the write-down or divestiture of assets.
We test our goodwill balances annually, or more frequently if indicators are present or changes in circumstances suggest that impairment may exist. We assess goodwill for impairment at the reporting unit level and monitor the key drivers of fair value to detect events or other changes that would warrant an interim impairment test of our goodwill and intangible assets.
We assess goodwill for impairment at the reporting unit level and monitor the key drivers of fair value to detect events or other changes that would warrant an interim impairment test of our goodwill and intangible assets.
Public company compliance costs are increasing due to the increase in SEC regulations and enforcement actions, and the heightened scrutiny that we and the public accounting industry face from the Public Companies Accounting Oversight Board. Additionally, certain new and proposed regulations in the State of Rhode Island, where we are headquartered, are likely to increase compliance costs.
Public company compliance costs are increasing due to the increase in SEC regulations and enforcement actions, and the heightened scrutiny that we and the public accounting industry face from the Public Companies Accounting Oversight Board.
The GDPR, which is applicable to all companies processing data of European Union residents, imposes significant fines and sanctions for violations. These requirements are complicated, and compliance is technically complex to maintain.
The GDPR, which applies to all companies processing data of European Union residents, imposes significant fines and sanctions for violations. These requirements are complicated, and compliance is technically complex to maintain. We contract with outside experts to advise and conduct internal and external compliance training.
Declines in the future performance and cash flows of a reporting unit or asset group, changes in our reporting units or in the structure of our business as a result of future reorganizations, acquisitions or divestitures of assets or businesses, or changes in other key assumptions, may result in the recognition of significant asset impairment charges, which could have a material adverse impact on our results of operations.
Declines in the future performance and cash flows of a reporting unit or asset group, changes in our reporting units or in the structure of our business as a result of future reorganizations, acquisitions or divestitures of assets or businesses, or changes in other key assumptions, may result in the recognition of significant asset impairment charges, which could have a material adverse impact on our results of operations. 10 We also review our long-lived assets including property, plant and equipment, and other intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.
Any sustained labor shortage or increased turnover rates within our employee base, could lead to increased costs and lost profitability and could otherwise compromise our ability to efficiently operate our business. We may record future impairment charges, which could materially adversely impact our results of operations.
Any sustained labor shortage or increased turnover rates within our employee base could lead to increased costs and lost profitability and could otherwise compromise our ability to efficiently operate our business.
Legal and Regulatory Risks: Certain of our products require certifications by customers, regulators or standards organizations, and our failure to obtain or maintain such certifications could negatively impact our business. In certain industries and for certain products, such as those used in aircraft, we must obtain certifications for our products by customers, regulators or standards organizations.
In certain industries and for certain products, such as those used in aircraft, we must obtain certifications for our products by customers, regulators or standards organizations.
Any diminution in our ability to defend against the unauthorized use of these rights and assets could have an adverse effect on our results of operations and financial condition. Litigation may be necessary to protect our intellectual property rights or defend against claims of infringement, which could result in significant costs and divert our management’s focus away from operations.
Litigation may be necessary to protect our intellectual property rights or defend against claims of infringement, which could result in significant costs and divert our management’s focus away from operations. We have significant inventories on hand.
We have made strategic investments in other companies, products and technologies, including our August 2022 acquisition of Astro Machine LLC. We will continue to identify and pursue acquisitions of complementary companies and strategic assets, such as customer bases, products and technology. However, there can be no assurance that we will be able to identify suitable acquisition opportunities.
In the future we may identify and pursue acquisitions of additional complementary companies and strategic assets, such as customer bases, products and technology. However, there can be no assurance that we will be able to identify suitable acquisition opportunities.
Some types of defects may not be detected until the product is installed in a user environment. This may cause us to incur significant warranty, repair, or re-engineering costs. As such, it could also divert the attention of engineering personnel from product development efforts, which may result in increased costs and lower profitability.
Some types of defects may not be detected until the product is installed in a user environment. This may cause us to incur significant warranty, repair, or re-engineering costs.
For example, in fiscal 2024 we implemented a restructuring plan in our PI segment to reduce operating costs within that segment. As changes in our business environment occur, we may need to adjust our business strategies to meet these changes, or we may otherwise find it necessary to restructure our operations or particular businesses or assets.
As changes in our business environment occur, we may need to adjust our business strategies to meet these changes, or we may otherwise find it necessary to restructure our operations or particular businesses or assets.
If action to remediate this material weakness is not completed on a timely basis, or if other remediation efforts are not successful, we may, in the future, identify additional internal control deficiencies that could rise to the level of a material weakness or uncover other errors in financial reporting.
We may, in the future, identify additional internal control deficiencies that could rise to the level of a material weakness or uncover other errors in our financial reporting.
However, if these efforts to constrain the cost of our operations are inadequate to offset higher product and employee wage costs, our results of operations and financial position could be materially adversely affected. 9 Our inability to adequately enforce and protect our intellectual property defend against assertions of infringement or the loss of certain licenses could prevent or restrict our ability to compete.
However, if these efforts to constrain the cost of our operations are inadequate to offset higher product and employee wage costs, our results of operations and financial position could be materially adversely affected.
However, due to the complexity of our systems, and especially due to the ever-increasing sophistication of cyber-criminals, there is no assurance that our efforts will be sufficient to prevent cyber-attacks, security 10 breaches, or the other potential exploitation of vulnerabilities or systems failures. In any such circumstance, our system redundancy and other disaster recovery planning may be ineffective or inadequate.
We have increased our investment in tools, techniques, and training that we believe will reduce our vulnerability to attacks by cybercriminals. However, due to the complexity of our systems, and especially the ever-increasing sophistication of cyber-criminals, there is no assurance that our efforts will be sufficient to prevent cyber-attacks, security breaches, or other potential exploitation of vulnerabilities or systems failures.
It is possible, however, that our actual liabilities may exceed our estimates of losses. We may also experience an unexpectedly large number of claims that result in costs or liabilities in excess of our projections, which could cause us to record additional expenses, which could adversely impact our business, financial condition, results of operations and cash flow.
We may also experience an unexpectedly large number of claims that result in costs or liabilities in excess of our projections, which could cause us to record additional expenses, which could adversely impact our business, financial condition, results of operations and cash flow. 15 Legal and Regulatory Risks: Certain of our products require certifications by customers, regulators or standards organizations, and our failure to obtain or maintain such certifications could negatively impact our business.
While we have experienced, and expect to continue to experience, these types of threats to our information technology networks and infrastructure, none of them to date has had a material impact.
In any such circumstance, our system redundancy and other disaster recovery planning may be ineffective or inadequate. While we have experienced, and expect to continue to experience, these types of threats to our information technology networks and infrastructure, none of them to date has led to an event that has had a material impact.
Any decline in our customers’ markets or their general economic conditions would likely result in a reduction in demand for our products.
Any decline in our customers’ markets or their general economic conditions would likely result in a reduction in demand for our products. For example, the late 2024 strike at Boeing has negatively affected our volume of airborne printer deliveries.
While demand for air travel has recently increased, the impact of air-safety incidents or of another viral pandemic or other widespread health emergency could negatively impact this trend in the future.
In addition, the impact of air-safety incidents or of another viral pandemic or other widespread health emergencies could negatively impact our business in the future.
If we are unable to obtain adequate pricing for our products and services, our results of operations and financial position could be materially adversely affected. We are also continually reviewing our operations with a view towards reducing our cost structure, including but not limited to reducing our labor cost-to-revenue ratio, improving process and system efficiencies and outsourcing certain internal functions.
Our profitability is directly impacted by our levels of fixed and variable costs. We are continually reviewing our operations with a view towards reducing our cost structure, including but not limited to reducing our labor cost-to-revenue ratio, improving process and system efficiencies and outsourcing certain internal functions.
In fiscal 2024, we engaged in restructuring actions to reduce our cost structure in our PI segment.
In fiscal 2024, we engaged in restructuring actions to reduce our cost structure in our PI segment and we recently announced that we will implement another restructuring action focused on the PI segment in fiscal 2026.
We could experience a significant disruption in or security breach of our information technology system, which could harm our business and adversely affect our results of operations.
As such, it could also divert the attention of engineering personnel from product development efforts, which may result in increased costs and lower profitability. 9 We could experience a significant disruption in, or a security breach of, our information technology system, which could harm our business and adversely affect our results of operations.
We maintain insurance for a variety of cybersecurity risks to mitigate their possible impact, but because of the prevalence of claims in the market for cybersecurity insurance, the cost for that insurance has increased and the underwriting criteria to obtain such insurance has become far more demanding.
Due to the prevalence of claims in the market for cybersecurity insurance, the cost for that insurance has increased, and the underwriting criteria to obtain such insurance have become far more demanding. There is no assurance that we will be able to obtain such insurance in the future despite our substantial investments in cybersecurity.
We rely on patents, trademarks, licenses, and proprietary knowledge and technology, both internally developed and acquired, in order to maintain a competitive advantage. Our competitors may develop technologies that are similar or superior to our proprietary technologies or design technologies around the intellectual property protections or licenses that we currently own.
Our inability to adequately enforce and protect our intellectual property or defend against assertions of infringement or the loss of certain licenses could prevent or restrict our ability to compete. We rely on patents, trademarks, licenses, and proprietary knowledge and technology, both internally developed and acquired, in order to maintain a competitive advantage.
At the end of fiscal 2024, we had approximately $4.5 million of cash and cash equivalents. Our cash and cash equivalents are held in bank demand deposit accounts and foreign bank accounts.
Adverse conditions in the global banking industry and credit markets could impair our liquidity or interrupt our access to capital markets, borrowings or financial transactions to hedge certain risks. At the end of fiscal 2025, we had $5.1 million of cash and cash equivalents. Our cash and cash equivalents are held in bank demand deposit accounts and foreign bank accounts.
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For example, the 2020 grounding, suspension and subsequent slow restart of the Boeing B737 MAX, coupled with the 7 impact of the COVID-19 pandemic reduced the demand for our airborne printers, as well as for the related repairs and supplies, which negatively affected our business.
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Our competitors may develop technologies that are similar or superior to our proprietary technologies or design technologies around the intellectual property protections or licenses that we currently own. The loss of our Honeywell license agreement could have a material adverse impact on our business. Operating outside the United States also exposes us to additional intellectual property risk.
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Although we have experienced a significant recovery in the demand for our airborne printers following the negative impact of the COVID-19 pandemic on the demand for new aircraft and travel, demand remains lower than it was pre-pandemic, and currently the outlook is uncertain.
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We have recorded significant goodwill impairment charges and may be required to record additional charges to future earnings if our goodwill or intangible assets become further impaired, which could materially adversely impact our results of operations. We test our goodwill balances annually, or more frequently if indicators are present or changes in circumstances suggest that impairment may exist.
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Also, we believe that the pandemic negatively impacted our customers’ financial capacity materially enough to alter their strategies and industry dynamics, but the increase in travel demand has caused the industry profitability to rebound.
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In fiscal 2025, we recorded a goodwill impairment charge of $13.4 million related to our MTEX acquisition, due in part to MTEX’s post-acquisition performance and changes to our management’s expectations with regard to MTEX’s performance in future periods.
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For example, as a result of the global COVID-19 pandemic, there was a disruption to our supply chain due to the delays of component shipments from our vendors in China and other jurisdictions in which normal business operations were disrupted.
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Financial and Economic Risks: Changes to United States tariff and import/export regulations and potential countermeasures could increase our costs and disrupt our global supply chain, which could negatively impact the results of our operations.
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The supply chain disruption continues to affect our business as it has become difficult to ramp up production as quickly as needed to respond to the post-COVID increase in customer demand.
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The United States has recently instituted or proposed changes in trade policies that include the renegotiation or termination of trade agreements, the imposition of higher tariffs on imports into the United States, economic sanctions on individuals, corporations or countries, and other government regulations affecting trade between the United States and other countries.
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Our success depends on our ability to obtain adequate pricing for our products and services. For a variety of complex reasons, many of which were triggered by the COVID-19 pandemic, the general economy has been significantly impacted by supply chain disruptions.
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There continues to exist significant uncertainty about the future relationship between the U.S. and other countries with respect to tariffs and other trade matters. In response to these actions, other countries have announced retaliatory tariffs and other trade measures against the United States.
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Examples of some of these impacts on us include reduced availability of certain electronic components and the need to pay premium prices to obtain them, and noticeably higher costs for a wide array of other parts and raw material components in both of our product segments.
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These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States, which could impact the way in which we do business and could increase the cost of our products.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWhile we continue to invest in our infrastructure environment and monitoring capability, and in due diligence with respect to the third parties with whom we interact, there can be no assurance that we can prevent, mitigate, or remediate the risk of any compromise or failure in the cybersecurity infrastructure owned or controlled by us or any third-party vendor or service providers that we use. 17 Our Information Technology team reports to senior management and is responsible for assessing and maintaining our cybersecurity risk management program.
Biggest changeWe remain committed to investing in risk management tools and processes as cybersecurity threats evolve. Despite our efforts, we cannot guarantee that we can prevent, mitigate, or remediate risks in our own or third-party cybersecurity infrastructure. Our Information Technology team which reports to senior management, is responsible for maintaining our cybersecurity risk management program.
The board of directors oversees management’s programs, policies and processes in place that identify, monitor, assess, and respond to cybersecurity, data privacy, and other information technology risks to which we are exposed.
The board of directors oversees management’s programs, policies and processes in place that identify, monitor, assess, and respond to cybersecurity, data privacy, and other information technology risks to which we are exposed. 18
Our board of directors has oversight responsibility for our overall enterprise risk management and directly oversees our cybersecurity risk management. As part of its enterprise risk management efforts, our board of directors regularly receives reports from management on our cybersecurity programs with regard to any risks that may arise from specific cybersecurity threats and incidents.
As part of its enterprise risk management efforts, our board of directors regularly receives reports from management on our cybersecurity programs with regard to any risks that may arise from specific cybersecurity threats and incidents.
Cybersecurity threats have the potential to materially affect our company, including our business strategy, results of operations, and financial condition. While we have not experienced material adverse effects from cybersecurity threats to date, we recognize the evolving nature of these risks and remain vigilant in our efforts to mitigate potential impacts.
While we have not experienced material adverse effects from cybersecurity threats to date, we recognize the dynamic nature of these risks and remain vigilant in our efforts to mitigate potential impacts.
In addition, they collaborate with third-party security specialists as necessary, aiming for thorough risk assessments and system improvements. Together with our third-party security service providers, the Information Technology team oversees our processes for the prevention, detection, mitigation, and resolution of cybersecurity incidents. Throughout the year, we regularly train our employees on cybersecurity awareness and confidential information protection.
They collaborate with third-party security specialists as they believe necessary to conduct thorough risk assessments and system improvements. Together with our third-party security service providers, the Information Technology team oversees cybersecurity incidents, prevention, detection, mitigation, and resolution.
Our process consists of steps for identifying the source of a cybersecurity threat or incident, including whether such cybersecurity threat or incident is associated with a third-party vendor or service provider; implementing cybersecurity countermeasures and mitigation strategies, and informing management and our board of directors of potentially material cybersecurity threats and incidents or other significant changes in the evolving cybersecurity threat landscape.
We utilize various tools and processes to identify, monitor, evaluate, and address cybersecurity threats and incidents, including those involving third-party vendors and service providers. Our process includes identifying the source of a threat or incident, implementing countermeasures and mitigation strategies, and informing management and our board of directors about significant threats and changes in the cybersecurity landscape.
Item 1C. Cybersec urity Cybersecurity Risk Management and Strategy We have made substantial investments in cybersecurity risk management, and it is an integral part of our overall enterprise risk management program.
Item 1C. Cybersec urity Cybersecurity Risk Management and Strategy We continue to invest substantially in cybersecurity risk management, which is a core part of our overall enterprise risk management program. Our security program is based on ISO27001, NIST 800-53, and GDPR frameworks to support our global business.
Cybersecurity Governance Our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), and Information Technology team are responsible for identifying and assessing cybersecurity risks on an ongoing basis, establishing processes designed to provide reasonable assurance that such potential cybersecurity risk exposures are monitored, instituting appropriate mitigation and remediation measures, and maintaining cybersecurity programs.
Cybersecurity Governance Our management, including our Chief Executive Officer, Chief Financial Officer , Chief Technology Officer (“CTO”), and Information Technology team, is responsible for identifying and assessing cybersecurity risks, establishing monitoring processes and implementing mitigation and remediation measures. In fiscal 2025, we hired a full-time Director of Information Technology, who is a Certified Information Security Professional.
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We have implemented a variety of tools and a process designed to identify, monitor, evaluate and respond to cybersecurity threats and incidents, including those associated with our use of third-party vendors and service providers.
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We regularly train our employees on cybersecurity awareness and confidential information protection and continuously review and update our policies to adapt to the evolving threat landscape and legal developments. Cybersecurity threats have the potential to materially affect our company, including our business strategy, results of operations, and financial condition.
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We intend to continue to make substantial investments in cybersecurity risk management to improve our tools and processes because the cybersecurity threat continues to evolve.
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Our cybersecurity programs are managed under the direction of our CTO and the Director of Information Technology, with support from internal and external third-party resources. Our IT Steering Committee, which consists of our CEO. CFO, and other senior leadership employees, is responsible for coordinating our day-to-day management of cybersecurity risk.
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We review or update our cybersecurity policies and the effectiveness of our programs to manage cybersecurity risk on a continuing basis, to account for changes in the evolving cybersecurity threat landscape, as well as for any related legal and regulatory developments that may occur.
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Each quarter, the IT Steering Committee receives reports from the CTO and Director of Information Technology on our cybersecurity program performance and emerging threats and incidents. The IT Steering Committee makes recommendations intended to ensure that hawse have adequate resources to address information technology risks.
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Additionally, since we do not have a full time Chief Information Security Officer, we obtain additional domain expertise from third party outside resources. Our cybersecurity programs are managed under the direction of our CFO, who receives reports from our Information Technology team and third-party resources to monitor the prevention, detection, mitigation, and remediation of cybersecurity risks.
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Our board of directors has ultimate oversight responsibility for our overall enterprise risk management and, with input from our senior management, oversees our cybersecurity risk management.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following information pertains to each location: Location Approximate Square Footage Principal Use Dietzenbach, Germany 18,630 Manufacturing, sales and service (PI segment) Copenhagen, Denmark 4,800 R&D, sales and service (PI segment) Brossard, Quebec, Canada 4,500 Manufacturing, sales and service (PI segment) Elancourt, France 4,150 Sales and service (PI segment) Shah Alam, Selangor, Malaysia 2,067 Sales (PI segment) Singapore 2,400 Sales (T&M segment) Shanghai, China 425 Sales (PI segment) Mexico City, Mexico 97 Sales (PI segment) We believe all our facilities are well maintained in good operating condition and generally adequate to meet our needs for the foreseeable future. 18
Biggest changeThe following information pertains to each location: Location Approximate Square Footage Principal Use Porto, Portugal 80,822 * Manufacturing, sales and service (PI segment) Dietzenbach, Germany 18,630 Manufacturing, sales and service (PI segment) Copenhagen, Denmark 4,800 R&D, sales and service (PI segment) Brossard, Quebec, Canada 4,500 Manufacturing, sales and service (PI segment) Elancourt, France 4,150 Sales and service (PI segment) Shah Alam, Selangor, Malaysia 2,067 Sales (PI segment) Singapore 2,400 Warehouse (T&M segment) Shanghai, China 425 Sales (PI segment) Sherman Oaks, California USA 160 Sales (PI segment) Mexico City, Mexico 97 Sales (PI segment) *This consists of five separate leased properties located in Porto, Portugal we assumed in connection with the acquisition of MTEX.
Item 2. P roperties The following table sets forth information regarding our principal owned properties. The West Warwick property is subject to a security agreement and a mortgage in favor of the lender under our credit facility.
Item 2. Properties The following table sets forth information regarding our principal owned properties. The West Warwick property is subject to a security agreement and a mortgage in favor of the lender under our credit facility.
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We believe all our facilities are well maintained in good operating condition and generally adequate to meet our needs for the foreseeable future.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Leg al Proceedings We are party to various legal proceedings arising from normal business activities. Management believes that the ultimate resolution of these matters will not have a material adverse effect on our financial position, results of operations or cash flows.
Biggest changeWe are party to other various legal proceedings arising from normal business activities. Management believes that the ultimate resolution of these matters will not have a material adverse effect on our financial position, results of operations or cash flows.
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Item 3. Leg al Proceedings On March 11, 2025, Effort Premier Solutions LDA (“Effort”) and Elói Serafim Alves Ferreira initiated arbitration proceedings against us and our subsidiary AstroNova Portugal, Unipessoal, Lda.
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(“AstroNova Portugal”) in the Arbitration Center located in Oporto, Portugal (Centro de Arbitragem do Instituto de Arbitragem Comercial), alleging, among other things, breaches of the MTEX acquisition agreement and damage to Mr. Ferreira’s professional reputation. On March 31, 2025, we made a preliminary reply rejecting Effort and Mr.
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Ferreira’s claims and formally notified the Arbitration Center of our intention to file counterclaims against Effort and Mr. Ferreira, on the grounds of, among other things, breaches of the MTEX acquisition agreement. As of April 11, 2025, neither party has formally presented their formal allegations or demands for relief to the Court of Arbitration.
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The parties’ arbitrators are currently in the process of choosing the third arbitrator which is a required step before the Arbitration Court is installed and the arbitration can be initiated. If a third arbitrator cannot be chosen by agreement the President of the Centro de Arbitragem will designate one.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe shares delivered were valued at a market value of $15.16 per share and are included with treasury stock in the consolidated balance sheet. Item 6. [Reserved] 20
Biggest changeThe shares delivered were valued at a market value of $15.91 per share and are included with treasury stock in our consolidated balance sheet as of January 31, 2025 included elsewhere in this Annual Report on Form 10-K.
Item 5. Market for the Registrant’s Common Stock, R elated Stockholder Matters and Issuer Purchases of Equity Securities Our common stock trades on the NASDAQ Global Market under the symbol “ALOT.” As of April 5, 2024, we had approximately 370 shareholders, which does not reflect shareholders with beneficial ownership in shares held in nominee name.
Item 5. Market for the Registrant’s Common Stock, R elated Stockholder Matters and Issuer Purchases of Equity Securities Our common stock trades on the NASDAQ Global Market under the symbol “ALOT.” As of April 11, 2025, we had approximately 238 shareholders, which does not reflect shareholders with beneficial ownership in shares held in nominee name.
Stock Repurchases During the fourth quarter of fiscal 2024, we made the following repurchases of our common stock: Total Number of Shares Repurchased Average Price paid Per Share ($) 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 November 1 – November 30 — — — — December 1 – December 31 309(a) 15.16(a) — — January 1 – January 31 — — — — (a) An executive of the company delivered 309 shares of our common stock toward the satisfaction of taxes due in connection with the vesting of restricted shares.
Stock Repurchases During the fourth quarter of fiscal 2025, we made the following repurchases of our common stock: Total Number of Shares Repurchased 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 November 1 – November 30 — — — — December 1 – December 31 300 (a) 15.91 (a) — — January 1 – January 31 1,200 (b) 11.36 (b) — — (a) An employee of the Company delivered 300 shares of our common stock toward the satisfaction of taxes due in connection with the vesting of restricted shares.
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(b) A former executive of the Company delivered 1,200 shares of our common stock toward the satisfaction of taxes due in connection with the vesting of restricted shares.
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The shares delivered were valued at a market value of $11.36 per share and are included with treasury stock in our consolidated balance sheet as of January 31, 2025 included elsewhere in this Annual Report on Form 10-K.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeIndebtedness Term Loan 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 $375,000; and 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, 2023 through April 30, 2027 is $675,000.
Biggest changeThe Amended Credit Agreement requires that the remaining balance of the Term Loan be paid in quarterly installments on the last day of each of our fiscal quarters through April 30, 2027 in the principal amount of $675,000 each, and the entire then remaining principal balance of the Term Loan is required to be paid on August 4, 2027.
While it is impossible to ascertain the ultimate legal and financial liability with respect to contingent liabilities, including lawsuits, we believe that the aggregate amount of such liabilities, if any, in excess of amounts provided, or covered by insurance, will not have a material adverse effect on our consolidated financial position or results of operations.
While it is impossible to ascertain the ultimate legal and financial liability with respect to contingent liabilities, including lawsuits, we believe that the aggregate amount of such liabilities, if any, in excess of the amounts provided, or covered by insurance, will not have a material adverse effect on our consolidated financial position or results of operations.
Intangible assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition.
Intangible assets that are 30 subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition.
Goodwill is the excess of cost of an acquired entity over the fair value amounts assigned to assets acquired and liabilities assumed in a business combination and is not amortized. Goodwill is tested for impairment at the reporting unit.
Goodwill is the excess of cost of an acquired entity over the fair value amounts assigned to assets acquired and liabilities assumed in a business combination and is not amortized. Goodwill is tested for impairment at the reporting unit level.
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.
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 Third Amendment.
The process for evaluating and recording obsolete and excess inventory provisions consists of analyzing the inventory supply on hand and estimating the net realizable value of the inventory based on historical experience, current business conditions and anticipated future revenue.
The process for evaluating and recording obsolete and excess inventory provisions consists of analyzing the inventory supply on hand and estimating the net realizable value of the inventory 29 based on historical experience, current business conditions and anticipated future revenue.
If the projected undiscounted cash flows are less than the carrying value, then an impairment charge would be recorded for the excess of the carrying value over the fair value, which is determined by the discounting of future cash flows. No impairment of intangible assets was identified for the years ended January 31, 2024 or January 31, 2023.
If the projected undiscounted cash flows are less than the carrying value, then an impairment charge would be recorded for the excess of the carrying value over the fair value, which is determined by the discounting of future cash flows. No impairment of intangible assets was identified for the years ended January 31, 2025 or January 31, 2024.
At January 31, 2024, we had provided valuation allowances for future tax benefits resulting from certain domestic R&D tax credits, foreign tax credit carryforwards, and China net operating losses, all of which are expected to expire unused.
At January 31, 2025, we had provided valuation allowances for future tax benefits resulting from certain domestic and foreign R&D tax credits, foreign tax credit carryforwards, and China net operating losses, all of which are expected to expire unused.
Bad debt expense was less than 1% of net sales in each of fiscal 2024 and 2023. 27 Warranty Claims: We offer warranties on some of our products. We establish a reserve for estimated costs of warranties at the time the product revenue is recognized.
Bad debt expense was less than 1% of net sales in each of fiscal 2025 and 2024. Warranty Claims: We offer warranties on some of our products. We establish a reserve for estimated costs of warranties at the time the product revenue is recognized.
Results of Operations Fiscal 2024 compared to Fiscal 2023 The following table presents the revenue of each of our segments, as well as the percentage of total revenue and change from the prior year.
Results of Operations Fiscal 2025 compared to Fiscal 2024 The following table presents the revenue of each of our segments, as well as the percentage of total revenue and change from the prior year.
Goodwill is first qualitatively assessed to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value.
Goodwill is first quantitatively assessed to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value.
We spent approximately $6.9 million in fiscal 2024 and $6.8 million in both fiscal 2023 and 2022, on Company-sponsored product development. We are committed to continuous product development as essential to our organic growth and expect to continue our focus on research and development efforts in fiscal 2025 and beyond.
We spent approximately $6.6 million in fiscal 2025, $6.9 million in fiscal 2024 and $6.8 million in fiscal 2023, on Company-sponsored product development. We are committed to continuous product development as essential to our organic growth and expect to continue our focus on research and development efforts in fiscal 2026 and beyond.
Fiscal 2023 compared to Fiscal 2022 For a comparison of our results of operations for the fiscal years ended January 31, 2023, and January 31, 2022, see “Part II, Item 7.
Fiscal 2024 compared to Fiscal 2023 For a comparison of our results of operations for the fiscal years ended January 31, 2024, and January 31, 2023, see “Part II, Item 7.
Fiscal 2023 compared to Fiscal 2022 For a comparison of our cash flow for the fiscal years ended January 31, 2023, and January 31, 2022, see “Part II, Item 7.
Fiscal 2024 compared to Fiscal 2023 For a comparison of our cash flow for the fiscal years ended January 31, 2024, and January 31, 2023, see “Part II, Item 7.
Dollars, the applicable quoted rate), plus a margin that varies within a range of 1.60% to 2.50% based on our consolidated leverage ratio, or (b) a fluctuating reference rate equal to the highest of (i) the federal fund rate plus 0.50%, (ii) Bank of America’s publicly announced prime rate, (iii) the BSBY Rate plus 1.00%, or (iv) 0.50%, plus a margin that varies within a range of 0.60% to 1.50% based on our consolidated leverage ratio.
Dollars, the applicable 25 quoted rate), plus a margin that varies within a range of 1.60% to 2.50% based on our consolidated leverage ratio, or (b) a fluctuating reference rate equal to the highest of (i) the federal fund rate plus 0.50%, (ii) Bank of America’s publicly announced prime rate, (iii) the Term SOFR rate plus 1.00%, or (iv) 0.50%, plus a margin that varies within a range of 0.60% to 1.50% based on our consolidated leverage ratio.
Management’s Discussion and Analysis of Liquidity and Capital Resources” in our annual report on Form 10-K for the fiscal year ended January 31, 2023, filed with the SEC on April 17, 2023. Contractual Obligations, Commitments and Contingencies As of January 31, 2024, we had contractual obligations related to lease arrangements, debt and royalty obligation arrangements and purchase commitments.
Management’s Discussion and Analysis of Liquidity and Capital Resources” in our Annual Report on Form 10-K for the fiscal year ended January 31, 2024, filed with the SEC on April 12, 2024. Contractual Obligations, Commitments and Contingencies As of January 31, 2025, we had contractual obligations related to lease arrangements, debt and royalty obligation arrangements and purchase commitments.
The results for this period were impacted by expense of $2.6 million ($2.0 million net of tax or $0.27 per diluted share) related to the 2024 Restructuring Plan and expense of $0.6 million ($0.5 million net of tax or $0.07 per diluted share) related to the 2024 Product Retrofit Program.
The results for fiscal 2024 were impacted by expense of $2.6 million ($2.0 million net of tax or $0.27 per diluted share) related to the 2024 Restructuring Plan and expense of $0.6 million ($0.5 million net of tax or $0.07 per diluted share) related to the 2024 Product Retrofit Program.
The lease arrangements are for certain of our facilities at various locations worldwide. As of January 31, 2024, we had fixed lease payment obligations of $0.6 million, with $0.2 million due within 12 months. Refer to Note 11, “Leases,” in our audited consolidated financial statements included in this Annual Report on Form 10-K for further details.
The lease arrangements are for certain of our facilities at various locations worldwide. As of January 31, 2025, we had fixed lease payment obligations of $2.3 million, with $0.4 million due within 12 months. Refer to Note 11, “Leases,” in our audited consolidated financial statements included in this Annual Report on Form 10-K for further details.
T&M revenue in fiscal 2024 and 2023 was also impacted by $1.3 million and $1.1 million, respectively, of revenue recognized as the result of successful claims for component cost increases for printer shipments to one customer as described in Note 3, “Revenue Recognition,” in our consolidated financial statements included elsewhere in this report.
T&M revenue in fiscal 2025 and 2024 was also impacted by $0.8 million and $1.3 million, respectively, of revenue recognized as the result of successful claims for component cost increases for 24 printer shipments to one customer as described in Note 3, “Revenue Recognition,” in our consolidated financial statements included elsewhere in this report.
Refer to Note 2 “Acquisitions” and Note 10, “Royalty Obligation,” in our audited consolidated financial statements included in this Annual Report on Form 10-K for further details. 26 In order to meet our manufacturing demands and, in some cases, lock in particular pricing structures for specific goods used in manufacturing, we enter into purchase commitments with our suppliers.
Refer to Note 10, “Royalty Obligations,” in our audited consolidated financial statements included in this Annual Report on Form 10-K for further details. In order to meet our manufacturing demands and, in some cases, lock in particular pricing structures for specific goods used in manufacturing, we enter into purchase commitments with our suppliers.
A reporting unit is an operating segment or a business unit one level below an operating segment if discrete financial information for that business is prepared and regularly reviewed by segment management. However, components within an operating segment are aggregated as a single reporting unit if they have similar economic characteristics.
A reporting unit is an operating segment or a business unit one level below an operating segment if discrete financial information for that business is prepared and regularly reviewed by segment management. Components within an operating segment can be aggregated as a single reporting unit if they have similar economic characteristics.
In fiscal 2024, 2023, and 2022, revenue from customers in various geographic areas outside the United States, primarily in Western Europe, Canada and Asia, amounted to $63.3 million, $59.0 million, and $49.3 million, respectively. 21 We maintain an active program of product research and development.
In fiscal 21 2025, 2024, and 2023, revenue from customers in various geographic areas outside the United States, primarily in Western Europe, Canada and Asia, amounted to $61.8 million, $63.3 million, and $59.0 million, respectively. We maintain an active program of product research and development.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our annual report on Form 10-K for the fiscal year ended January 31, 2023, filed with the SEC on April 17, 2023. Segment Analysis We report two segments consistent with our product revenue groups: PI and T&M.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended January 31, 2024, filed with the SEC on April 12, 2024. 23 Segment Analysis We report two segments consistent with our product revenue groups: PI and T&M.
We are subject to a guaranteed minimum royalty payment obligation over the next five years pursuant to the Honeywell Agreements, which, at January 31, 2024 included a balance due of $4.7 million, with $2.6 million due within 12 months.
We are subject to a guaranteed minimum royalty payment obligation over the next five years pursuant to the Honeywell Agreements, which, at January 31, 2025 included a balance due of $2.5 million, with $1.4 million due within 12 months.
Prior year other expense included interest expense on debt and revolving credit facility of $1.7 million, and net foreign exchange loss of $0.5 million, offset by other income of $0.1 million. We recognized $1.4 million of income tax expense for the current fiscal year, resulting in an effective tax rate of 22.7% compared to 22.0% in fiscal 2023.
Prior year other expense included interest expense on debt and revolving credit facility of $2.7 million and net foreign exchange loss of $0.1 million, partially offset by other income of $0.1 million. We recognized $2.2 million of income tax expense for the current fiscal year, resulting in an effective tax rate of (17.9)% compared to 22.7% in fiscal 2024.
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.
The Term Loan and revolving credit loans bear interest at a rate per annum equal to, at our option, either (a) the Term SOFR rate as defined in the Amended Credit Agreement (or, in the case of revolving credit loans denominated in Euros or another currency other than U.S.
In connection with our 2024 Restructuring Plan, we identified the need to address quality and reliability issues in certain models of our PI printers as a result of faulty ink provided by one of our larger suppliers. We identified approximately 150 printers sold to our customers that were affected by the faulty ink.
Additionally, in connection with our 2024 Restructuring Plan, we identified the need to address quality and reliability issues in certain models of our PI printers as a result of faulty ink provided by one of our larger suppliers.
In order to remedy these issues and maintain solid customer relationships, during the second quarter of fiscal 2024, we initiated a program to retrofit all of the affected printers sold to our customers (the “2024 Product Retrofit Program”).
We identified approximately 150 printers sold to our customers that were affected by the faulty ink and in order to remedy these issues and maintain solid customer relationships, during the second quarter of fiscal 2024, we initiated a program to retrofit all of the affected printers sold to our customers (the “2024 Product Retrofit Program”).
The costs associated with this program, which included the cost of parts, labor and travel, were $0.6 million and were included in cost of revenue in our consolidated income statement for the year ended January 31, 2024.
The costs associated with this program were $0.6 million, which included the cost of parts, labor and travel, and were included in cost of revenue in our consolidated income statement for the year ended January 31, 2024. As of January 31, 2024, both the 2024 Restructuring Plan and the 2024 Product Retrofit Program were completed and concluded.
Debt arrangements under our Amended Credit Agreement with Bank of America, N.A., consist of a term loan with an outstanding principal balance of $12.2 million at January 31, 2024, of which $2.7 million is due within the 12 months after that date.
Debt arrangements under our Amended Credit Agreement with Bank of America, N.A., consist of a Term Loan with an outstanding principal balance of $9.5 million at January 31, 2025, of which $2.7 million is due within the 12 months after that date; a Euro-denominated A-2 Term Loan with an outstanding principal balance of $12.7 million at January 31, 2025, of which $2.4 million is due within the 12 months after that date, and a revolving credit facility with an outstanding principal loan balance of $20.5 million at January 31, 2025.
If actual product failure rates and/or corrective costs differ from the estimates, we revise our estimated warranty liability accordingly. Inventories: Inventories are stated at the lower of average and standard cost or net realizable value.
If actual product failure rates and/or corrective costs differ from the estimates, we revise our estimated warranty liability accordingly. Inventories: Inventories are stated at the lower of average and standard cost or net realizable value. Cost is determined using an average cost method that approximates the first-in, first-out (FIFO) method.
Fiscal 2024 international revenue reflects a favorable foreign exchange rate impact of $0.4 million, compared to an unfavorable foreign exchange rate impact of $3.5 million in fiscal 2023.
Fiscal 2025 international revenue reflects an unfavorable foreign exchange rate impact of $0.3 million, compared to a favorable foreign exchange rate impact of $0.4 million in fiscal 2024. Our 2024 acquisition of MTEX contributed $4.2 million in international revenue in fiscal 2025.
If this qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then a quantitative assessment is required for the reporting unit. The quantitative assessment compares the fair value of the reporting unit with its carrying value.
If this qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then a quantitative assessment is required for the reporting unit. Additionally, we can elect to forgo the qualitative assessment and perform the quantitative test.
We market and sell our products and services globally through a diverse distribution structure of direct sales personnel, manufacturers’ representatives, OEMs, and authorized dealers that deliver a full complement of branded products and services to customers in our respective markets.
Refer to Note 20, “Restructuring,” in our consolidated financial statements included elsewhere in this report for further details. We market and sell our products and services globally through a diverse distribution structure of direct sales personnel, manufacturers’ representatives, OEMs, and authorized dealers that deliver a full complement of branded products and services to customers in our respective markets.
Cash provided from financing activities for fiscal 2023 includes $15.9 million for borrowings under the revolving credit facility and $6.0 million of proceeds from long term borrowings, which were partially offset by $2.0 million in guaranteed royalty obligation payments and $1.0 million of principle payments on long term debt .
Cash provided by financing activities for fiscal 2025 primarily includes $15.1 million of proceeds from our debt borrowings and $11.5 million of borrowing under the revolving credit facility, offset by $9.0 million of principal payments on our long term debt and guaranteed royalty obligation payments of $1.9 million.
We also continue to invest in sales and marketing initiatives by expanding and improving the existing sales force and using various marketing campaigns to achieve our goals of sales growth and increased profitability. Impact of COVID-19 The lingering impact of the COVID-19 pandemic continues to affect our business, most notably in our T&M segment.
We also continue to invest in sales and marketing initiatives by expanding and improving the existing sales force and using various marketing campaigns to achieve our goals of sales growth and increased profitability.
We market and sell our products and services through the following two segments: • Product Identification (“PI”) – offers color and monochromatic digital label printers, over-printers and custom OEM printers.
We market and sell our products and services through the following two segments: • Product Identification (“PI”) – offers color and monochromatic digital label printers, direct-to-package printers, industrial wide-format printers for both flexible and rigid materials and custom OEM printers.
If the fair value of the reporting unit exceeds the carrying value of the net assets including goodwill assigned to that unit, goodwill is not impaired. If the carrying value of the reporting unit’s net assets including goodwill exceeds the fair value of the reporting unit, then we record an impairment charge based on that difference.
Based on the results of the quantitative assessment, if the fair value of the reporting unit exceeds the carrying value of the net assets, including goodwill assigned to that unit, goodwill is not impaired.
The loans under the Amended Credit Agreement are subject to certain mandatory prepayments, subject to various exceptions, from (a) net cash proceeds from certain dispositions of property, (b) net cash proceeds from certain issuances of equity, (c) net cash proceeds from certain issuances of additional debt and (d) net cash proceeds from certain extraordinary receipts.
The loans under the Amended Credit Agreement are subject to certain mandatory prepayments, subject to various exceptions, from net cash proceeds from certain dispositions of property, certain issuances of equity, certain issuances of additional debt and certain extraordinary receipts. Amounts repaid under the revolving credit facility may be reborrowed, subject to our continued compliance with the Amended Credit Agreement.
Current year revenue through domestic channels was $84.8 million, an increase of 1.4% from prior year domestic revenue of $83.6 million. International revenue of $63.3 million for fiscal 2024 increased 7.4% compared to prior year international revenue of $59.0 million.
Current year revenue through domestic channels was $89.5 million, an increase of 5.6% from prior year domestic revenue of $84.8 million. International revenue of $61.8 million for fiscal 2025 decreased 2.4% compared to prior year international revenue of $63.3 million.
The T&M segment includes a line of aerospace printers used to print hard copies of data required for the safe and efficient operation of aircraft, including navigation maps, clearances, arrival and departure procedures, NOTAMs, 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.
The T&M segment is the leading supplier of aerospace printers for commercial, military transport, business, and regional aircraft. The printers 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, NOTAMs, flight itineraries, weather maps, performance data, passenger data, and various air traffic control data.
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 AstroNova 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 and secured by substantially all of the personal property assets of Astro Machine. 25 Equipment Loan In January 2024, we entered into a secured equipment loan facility agreement with Banc of America Leasing & Capital, LLC and borrowed the principal amount of $0.8 million thereunder for the financing of our purchase of production equipment.
Our obligations under the Amended Credit Agreement continue to be secured by substantially all of our personal property assets (including a pledge of the equity interests we hold in ANI Scandinavia ApS, AstroNova GmbH, AstroNova SAS and the Purchaser), subject to certain exceptions, and by a mortgage on our owned real property in West Warwick, Rhode Island, and are guaranteed by, and secured by substantially all of the personal property assets of, Astro Machine.
($ in thousands) 2024 2023 Revenue As a % of Total Revenue % Change Over Prior Year Revenue As a % of Total Revenue PI $ 104,041 70.3 % 0.9 % $ 103,089 72.3 % T&M 44,045 29.7 % 11.7 % 39,438 27.7 % Total $ 148,086 100.0 % 3.9 % $ 142,527 100.0 % Net revenue in fiscal 2024 was $148.1 million, a 3.9% increase compared to net revenue of $142.5 million for fiscal 2023.
($ in thousands) 2025 2024 Revenue As a % of Total Revenue % Change Over Prior Year Revenue As a % of Total Revenue PI $ 102,345 67.7 % (1.6 )% $ 104,041 70.3 % T&M 48,938 32.3 % 11.1 % 44,045 29.7 % Total $ 151,283 100.0 % 2.2 % $ 148,086 100.0 % Net revenue in fiscal 2025 was $151.3 million, a 2.2% increase compared to net revenue of $148.1 million for fiscal 2024.
In connection with our purchase of Astro Machine on August 4, 2022, we entered into a Second Amendment to Amended and Restated Credit Agreement (the “Second Amendment”) with Bank of America, N.A., as lender (the “Lender”).
In connection with our acquisition of MTEX, on May 6, 2024, we entered into a Third Amendment to Amended and Restated Credit Agreement (the “Third 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 the Company and the Lender.
The Third 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, the LIBOR Transition Amendment, dated as of December 14, 2021, the Second Amendment to Amended and Restated Credit Agreement dated as of August 4, 2022, and the Joinder Agreement relating to Astro Machine dated as of August 26, 2022 (as so amended, the “Existing Credit Agreement”; the Existing Credit Agreement as amended by the Third Amendment, the “Amended Credit Agreement”), between AstroNova, Inc. as the borrower, Astro Machine as a guarantor, and the Lender.
The entire remaining principal balance of the term loan is required to be paid on August 4, 2027. We may voluntarily prepay the term loan, in whole or in part, from time to time without premium or penalty (other than customary breakage costs, if applicable).
We may voluntarily prepay the Term A-2 Term Loan or the Term Loan, in whole or in part, from time to time without premium or penalty (other than customary breakage costs, if applicable).
PI current year segment operating profit was $10.1 million with a profit margin of 9.7%, compared to the prior year segment operating profit of $7.9 million and related profit margin of 7.7%.
Prior year segment operating profit was $10.1 million which includes $3.1 million in costs related to the 2024 Restructuring Plan and the 2024 Product Retrofit Program, with a related profit margin of 9.7%.
In addition, we use the market approach, which compares the 28 reporting unit to publicly traded companies and transactions involving similar business, to support the conclusions based upon the income approach. The income approach requires the use of many assumptions and estimates including future revenue, expenses, capital expenditures, and working capital, as well as discount factors and income tax rates.
In addition, we use the market approach, which compares the reporting unit to publicly traded companies and transactions involving similar business, to support the conclusions based upon the income approach.
($ in thousands) Revenue Segment Operating Profit Segment Operating Profit as a % of Revenue 2024 2023 2022 2024 2023 2022 2024 2023 2022 P I $ 104,041 $ 103,089 $ 90,915 $ 10,087 $ 7,889 $ 10,411 9.7 % 7.7 % 11.5 % T&M 44,045 39,438 26,565 10,200 8,989 3,398 23.2 % 22.8 % 12.8 % Total $ 148,086 $ 142,527 $ 117,480 20,287 16,878 13,809 13.7 % 11.8 % 11.8 % Corporate Expenses 11,491 11,435 9,553 Operating Income 8,796 5,443 4,256 Other Income (Expense), Net (2,723 ) (2,033 ) 2,778 Income Before Income Taxes 6,073 3,410 7,034 Income Tax Provision 1,379 749 605 Net Income $ 4,694 $ 2,661 $ 6,429 Product Identification Revenue from the PI segment increased 0.9% in fiscal 2024, with revenue of $104.0 million compared to revenue of $103.1 million in the prior year.
($ in thousands) Revenue Segment Operating Profit (Loss) Segment Operating Profit (Loss) as a % of Revenue 2025 2024 2023 2025 2024 2023 2025 2024 2023 PI $ 102,345 $ 104,041 $ 103,089 $ (3,967 ) $ 10,087 $ 7,889 (3.9 )% 9.7 % 7.7 % T&M 48,938 44,045 39,438 11,143 10,200 8,989 22.8 % 23.2 % 22.8 % Total $ 151,283 $ 148,086 $ 142,527 7,176 20,287 16,878 4.7 % 13.7 % 11.8 % Corporate Expenses 15,816 11,491 11,435 Operating Income (Loss) (8,640 ) 8,796 5,443 Other Income (Expense), Net (3,647 ) (2,723 ) (2,033 ) Income (Loss) Before Income Taxes (12,287 ) 6,073 3,410 Income Tax Provision 2,202 1,379 749 Net Income (Loss) $ (14,489 ) $ 4,694 $ 2,661 Product Identification During the second quarter of the current year we acquired MTEX, a Portugal-based manufacturer of digital printing equipment.
At January 31, 2024, our cash and cash equivalents were $4.5 million and we had an outstanding balance of $8.9 million drawn and outstanding under our revolving credit facility. At January 31, 2024, we had $16.1 million available for borrowing under that facility.
At January 31, 2025 our cash and cash equivalents were $5.1 million. As of January 31, 2025, $20.5 million was borrowed and outstanding under our revolving credit facility with Bank of America and $4.5 million was available for borrowing under that revolving credit facility.
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.
We must comply with various customary financial and non-financial covenants under the Amended Credit Agreement.
Current year other expense includes $2.7 million of interest expense on our debt and revolving credit facility and $0.1 million of net foreign exchange loss, offset by net other income of $0.1 million.
Other expense in fiscal 2025 was $3.6 million compared to $2.7 million in fiscal 2024. Current year other expense includes $3.2 million of interest expense on our debt and revolving credit facilities and net other expense of $0.8 million, partially offset by a net foreign exchange gain of $0.3 million.
No goodwill impairment was identified for the years ended January 31, 2024 or January 31, 2023. We recognize intangibles assets in accordance with ASC 350. Acquired intangible assets subject to amortization are stated at fair value and are amortized using the straight-line method over the estimated useful lives of the assets.
Refer to Note 4, “ Intangible Assets and Goodwill” in our consolidated financial statements included elsewhere in this report for further details. We recognize intangibles assets in accordance with ASC 350. Acquired intangible assets subject to amortization are stated at fair value and are amortized using the straight-line method over the estimated useful lives of the assets.
T&M current year segment operating profit was $10.2 million resulting in a 23.2% profit margin compared to the prior year segment operating profit of $9.0 million and related operating margin of 22.8%. The increased profit and margins were primarily attributable to higher revenue from high-margin product lines.
The current year T&M segment revenue increase was partially offset by a decline in hardware sales in both the aerospace printer and data recorder product lines. T&M current year segment operating profit was $11.1 million resulting in a 22.8% profit margin compared, to the prior year segment operating profit of $10.2 million and related operating profit margin of 23.2%.
Refer to Note 2, “Acquisition,” in our consolidated financial statements included elsewhere in this report for further details. On July 26, 2023, we adopted a restructuring plan (the “2024 Restructuring Plan”) for our PI segment that transitioned a portion of the printer manufacturing within that segment from our facility in Rhode Island to our Astro Machine facility located in Illinois.
On July 26, 2023, we adopted a restructuring plan (the “2024 Restructuring Plan”) for our PI segment that transitioned a portion of the printer manufacturing within that segment from our facility in Rhode Island to our Astro Machine facility located in Illinois, ceased the sale of certain of our older, lower-margin or low-volume PI segment products and made targeted reductions to our workforce.
By their nature, these judgments are subject to an inherent degree of uncertainty. We periodically evaluate the judgments and estimates used for our critical accounting policies to ensure that such judgments and estimates are reasonable for our interim and year-end reporting requirements.
We periodically evaluate the judgments and estimates used for our critical accounting policies to ensure that such judgments and estimates are reasonable for our interim and year-end reporting requirements. These judgments and estimates are based on our historical experience, current trends and information available from other sources, as appropriate.
Critical Accounting Policies and Estimates Our discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. Certain of our accounting policies require the application of judgment in selecting the appropriate assumptions for calculating financial estimates.
It is possible, however, that our results of operations for any future period could be materially affected by changes in our assumptions or strategies related to these contingencies or changes out of our control. 28 Critical Accounting Policies and Estimates Our discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.
Hardware revenue in fiscal 2024 was $49.4 million, a $7.0 million or 16.5% increase compared to fiscal 2023 hardware revenue of $42.4 million due to increased hardware sales in both the T&M and PI segments. T&M hardware sales increased 15.8% or $3.8 million compared to the prior year primarily due to increased sales in our aerospace printer product line.
Hardware revenue in fiscal 2025 was $44.6 million, a $4.8 million or 9.7% decrease compared to fiscal 2024 hardware revenue of $49.4 million due to decreased hardware sales in both the T&M and PI segments.
If a quantitative assessment is required, we estimate the fair value of our reporting units using the income approach based upon a discounted cash flow model. We believe that this approach is appropriate because it provides a fair value estimate based upon the reporting unit’s expected long-term operating cash flow performance.
The quantitative assessment compares the fair value of the reporting unit with its carrying value. If a quantitative assessment is required, we estimate the fair value of our reporting units using a combination of both an income approach based upon a discounted cash flow model and a market approach.
The total cost of this plan was $2.5 million, comprised primarily of non-cash charges related to inventory write-offs and facility exit costs, and cash charges related to severance-related costs. As of January 31, 2024, we have completed the 2024 Restructuring Plan. Refer to Note 19, “Restructuring,” in our consolidated financial statements included elsewhere in this report for further details.
As part of the 2024 Restructuring Plan, we also consolidated certain of our international PI sales and distribution facilities and streamlined our channel partner network. The total cost of this plan was $2.5 million, comprised primarily of non-cash charges related to inventory write-offs and facility exit costs, and cash charges related to severance-related costs.
Net cash used by investing activities for fiscal 2024 was $0.9 million for capital expenditures, compared to fiscal 2023 cash used of $17.2 million, which includes $17.0 million related to the acquisition of Astro Machine and $0.2 million for capital expenditures. Net cash used by financing activities for fiscal 2024 was $11.0 million.
This compares to fiscal 2024 cash used by investing activities of $0.9 million for capital expenditures. Net cash provided by financing activities for fiscal 2025 was $15.4 million.
T&M also provides repairs, service and spare parts. On August 4, 2022, we completed the acquisition of Astro Machine, an Illinois-based manufacturer of printing equipment, including label printers, tabbers, conveyors, and envelope feeders, for aggregate consideration of $17.1 million. Astro Machine is reported as part of our PI segment beginning with the third quarter of fiscal 2023.
We have reported MTEX as a part of our PI segment since the May 6, 2024 closing date of that transaction. On August 4, 2022, we completed the acquisition of Astro Machine, an Illinois-based manufacturer of printing equipment, including label printers, over printers, tabbers, conveyors, and envelope feeders.
We believe that in the coming year and in the longer term, cash flow generation from operations and available unused credit capacity under our credit facility will support our anticipated needs.
These sources have also typically funded the majority of our capital expenditures. We have funded acquisitions by borrowing under bank credit facilities. We believe cash flow generation from operations and available unused credit capacity under our revolving credit facility will support our anticipated needs.
Specifically, the changes in accounts receivable, inventory, income taxes, accounts payable and accrued expenses for the current year increased cash by $1.0 million in fiscal 2024 compared to a decrease in cash of $14.3 million in the prior year. Our accounts receivable balance increased to $23.1 million at January 31, 2024, compared to $21.6 million at January 31, 2023.
The decrease in net cash provided by operations for the current year is primarily due to lower net income and a decrease in cash provided by working capital, as the changes in accounts receivable, inventory, income taxes, deferred revenue and accounts payable and accrued expenses for the current year decreased cash by $0.3 million in fiscal 2025 compared to an increase in cash of $0.7 million in the prior year.
Service and other revenue in fiscal 2024 was $19.4 million, a 7.7% or $1.4 million increase compared to fiscal 2023 service and other revenue of $18.0 million. The increase is primarily due to the inclusion of a full year of Astro Machine parts revenue in the PI segment for the current year, compared to six months in fiscal 2023.
Service and other revenue in fiscal 2025 was $25.2 million, a $5.8 million or 30.1% increase compared to fiscal 2024 service and other revenue of $19.4 million. The increase is primarily due to a $6.0 million or 51.9% increase in parts and repairs revenue in the aerospace printer product line in the T&M segment.
The increased gross profit and related profit margin for the current year compared to the prior year is primarily attributable to higher margins on a favorable product mix. 22 Operating expenses for the current year were $42.8 million, representing a 0.3% increase from the prior year’s operating expenses of $42.7 million.
Note that the fiscal 2024 gross profit margin included $2.1 million of restructuring costs and $0.7 million of product retrofit costs that did not repeat in the current year. Operating expenses for the current year were $61.4 million, representing a 43.3% increase from the prior year’s operating expenses of $42.8 million.
Test & Measurement Revenue from the T&M product group was $44.0 million for fiscal 2024, an 11.7% increase compared to revenue of $39.4 million in the prior year. The increase in revenue for the current year was primarily attributable to strong hardware sales in our aerospace product lines as a result of increased aerospace printer product unit volume.
Test & Measurement Revenue from the T&M segment was $48.9 million for fiscal 2025, an 11.1% increase compared to revenue of $44.0 million in the prior year.
In fiscal 2025 (after required debt amortization and payment of minimum guaranteed royalty payments to Honeywell), we will be focused on inventory reduction and reduction of debt outstanding under our revolving credit facility, to the degree possible as constrained by supply chain management challenges.
Additionally, as discussed below, we amended the terms of our credit agreement with Bank of America to finance our acquisition of MTEX. In fiscal 2026 (after required debt amortization and payment of minimum guaranteed royalty payments to Honeywell), we plan to focus on reduction of debt outstanding under our credit agreement.
Additionally, in January 2024, we entered into a secured equipment loan facility agreement and borrowed the principal amount of $0.8 million thereunder to finance our purchase of production equipment, of which $0.1 million is due within the 12 months after such date.
We also have an outstanding amount of $0.7 million for our secured equipment loan facility, of which $0.2 million is due within the 12 months after such date.
Liquidity and Capital Resources Overview Historically, our primary sources of short-term liquidity have been cash generated from operating activities and borrowings under our revolving credit facility. These sources have also historically funded the majority of our capital expenditures and contractual contingent consideration obligations.
The increased profit and decrease in margins were primarily attributable to higher revenue from high-margin product lines, partially offset by increased manufacturing, period costs and operating expenses in fiscal 2025. Liquidity and Capital Resources Overview Historically, our primary sources of short-term liquidity have been cash generated from operating activities and borrowings under our revolving credit facility.
Current year general and administrative expense was also impacted by $0.1 million of restructuring costs related to the 2024 Restructuring Plan. Research & development (“R&D”) costs in fiscal 2024 of $6.9 million increased 1.2% from fiscal 2023, as increases in outside consulting and service expenses were substantially offset by decreases in employee wage and bonus expenses.
Research & development (“R&D”) costs in fiscal 2025 of $6.6 million decreased 4.3% from fiscal 2024, as decreases in employee wages and bonuses were partially offset by increases in outside consulting and service expenses. The R&D spending level for fiscal 2025 represents 4.4% of net revenue, compared to the prior year level of 4.7%.
The loan matures on January 23, 2029, and bears interest at a fixed rate of 7.06%. Cash Flow The statements of cash flows for the years ended January 31, 2024, 2023, and 2022 are included on page F-7 of this Form 10-K.
Cash Flow The statements of cash flows for the years ended January 31, 2025, 2024, and 2023, are included on page F-8 of this Annual Report on Form 10-K. Net cash provided by operating activities was $4.8 million in fiscal 2025 compared to net cash provided by operating activities of $12.4 million in the previous year.
PI also provides software to design, manage and print labeling and packaging images locally and across networked printing systems, as well as all related printing supplies such as pressure-sensitive labels, tags, inks, toners and thermal transfer ribbons used by digital printers.
As a full solution supplier, PI offers a wide variety of carefully application-matched printing supplies such as pressure-sensitive labels, tags, inks, toners, and thermal transfer ribbons used by digital printers.
The Amended Credit Agreement provides for (i) a new term loan in the principal amount of $6.0 million, which term loan was in addition to the existing term loan outstanding under the Existing Credit Agreement in the principal amount of $9.0 million as of the effective date of the Second Amendment, and (ii) an increase in the aggregate principal amount of the revolving credit facility available thereunder from $22.5 million to $25.0 million.
The amount and availability and repayment terms of the existing $25.0 million revolving credit facility available to us under the Further Amended Credit Agreement were not modified by the Fourth Amendment; the outstanding principal balance under the revolving credit facility as of the effective date of the Fourth Amendment was $21.7 million.
Our gross profit margin of 34.9% in fiscal 2024 reflects a 1.1 percentage point increase compared to fiscal 2023 gross profit margin of 33.8%.
Our gross profit margin of 34.9% in fiscal 2025 remained consistent with our fiscal 2024 gross profit margin.
At January 31, 2024, our purchase commitments totaled $25.8 million, with $23.1 million due within 12 months, some of which are non-cancelable.
At January 31, 2025, our purchase commitments totaled $29.0 million, with $27.4 million due within 12 months, some of which are non-cancelable. Subsequent to year end we entered into a three-year purchase commitment agreement with one of our vendors for a total of $5.2 million, of which $1.7 million is due within the next 12 months.
Net income for fiscal 2023 was $2.7 million, or $0.36 per diluted share. The results for the fiscal 2023 year were impacted by expenses of $0.7 million ($0.5 million net of tax, or $0.07 per diluted share) related to transaction costs of the Astro Machine acquisition.
The results for this period were impacted by an inventory step up cost of $0.2 million ($0.2 million net of tax or $ 0.02 per diluted share) and transaction costs of $1.2 million ($0.9 million net of tax or $0.12 per diluted share), both related to the MTEX acquisition and CFO transition charges of $0.4 million ($0.3 million net of tax or $0.04 per diluted share).
The increase in PI hardware sales for the current year was slightly offset by a decline in sales of our QuickLabel and TrojanLabel product line printers. Revenue from supplies in fiscal 2024 was $79.3 million, a 3.4% or $2.8 million decrease compared to fiscal 2023 supplies revenue of $82.1 million.
The decline in current quarter revenue was partially offset by an increase in supplies sales in the Trojan Label product line and the contribution of $4.2 million from MTEX hardware, supply and parts revenues.
This increase was partially offset by other factors decreasing the effective tax rate such as foreign derived intangible income deduction, share based compensation, and the R&D tax credit. Net income for fiscal 2024 was $4.7 million, or $0.63 per diluted share.
Net income for fiscal 2024 was $4.7 million, or $0.63 per diluted share.
The increase in the effective tax rate in fiscal 2024 from fiscal 2023 is primarily related to the impact of the valuation allowance recorded on China net operating losses, the increase in the current provision for state and local taxes, and the change in the foreign rate differential.
The decrease in the effective tax rate in fiscal 2025 from fiscal 2024 is primarily related to the decrease in pre-tax book income and federal income tax provision associated with the goodwill impairment and MTEX losses, the decrease in return to provision adjustments, and the decrease in the valuation allowance associated with China losses.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAt January 31, 2024, the term loan bears interest at a BSBY (Bloomberg Short-Term Bank Yield) rate plus a margin that varies between 1.60% and 2.30% based on our 29 consolidated leverage ratio.
Biggest changeAt January 31, 2025, the USD term loan and our revolving credit facility debt bears interest at the SOFR rate as defined in the Amended Credit Agreement plus a margin that varies between 1.60% and 2.50% based on our consolidated leverage ratio and the Euro term loan bears interest at a rate per annum equal to the EURIBOR rate as defined in the Amended Credit Agreement, plus a margin that varies within a range of 1.60% to 2.50% based on our consolidated leverage ratio.
The cumulative foreign currency translation adjustment is recorded as a component of accumulated other comprehensive loss in shareholders’ equity. The reported results of our foreign subsidiaries will be influenced by their translation into U.S. dollars by currency movements against the U.S. dollar.
The cumulative foreign currency translation adjustment is recorded as a component of accumulated other comprehensive income (loss) in shareholders’ equity. The reported results of our foreign subsidiaries will be influenced by their translation into U.S. dollars by currency movements against the U.S. dollar.
Foreign Currency Exchange Risk The functional currencies of our foreign subsidiaries and branches are the local currencies—the British Pound in the U.K., the Canadian Dollar in Canada, the Danish Kroner in Denmark, the Chinese Yuan in China, and the Euro in France and Germany.
Foreign Currency Exchange Risk The functional currencies of our foreign subsidiaries and branches are the local currencies—the British Pound in the U.K., the Canadian Dollar in Canada, the Danish Kroner in Denmark, the Chinese Yuan in China, and the Euro in France, Germany and Portugal.
The impact on our results of operations of a 100 basis point change in the interest rates on the outstanding balance of our variable-rate debt and revolving credit facility would be approximately $0.3 million annually.
The impact on our results of operations of a 100 basis point change in the interest rates on the outstanding balance of our variable-rate term debt and revolving credit facility debt would be approximately $0.4 million annually. 31
During fiscal 2024, the weighted average interest rate on our variable rate debt was 7.54% and the weighted average interest rate on our revolving credit facility was 7.70%.
During fiscal 2025, the weighted average interest rate on our variable rate debt was 6.71%, and the weighted average interest rate on our revolving credit facility debt was 7.28%.
Transactions in foreign currencies are recorded at the exchange rate prevailing at the date of the transaction. The resulting monetary assets and liabilities are translated into the appropriate functional currency at exchange rates prevailing at the balance sheet date and the resulting gains and losses are reported as foreign exchange gain (loss) in the consolidated statements of income.
The resulting monetary assets and liabilities are translated into the appropriate functional currency at exchange rates prevailing at the balance sheet date and the resulting gains and losses are reported as foreign exchange gain (loss) in the consolidated statements of income. Foreign exchange losses resulting from transactional exposure were $0.5 million for the year ended January 31, 2025.
A hypothetical 10% change in the rates used to translate the results of our foreign subsidiaries would result in an increase or decrease in our consolidated net income of less than $0.1 million for the year ended January 31, 2024. Transactional exposure arises where transactions occur in currencies other than the functional currency.
Our primary currency translation exposure is related to our subsidiaries that have functional currencies denominated in Danish Kroner and the Euro. A hypothetical 10% change in the rates used to translate the results of our foreign subsidiaries would result in an increase or decrease in our consolidated net income of $1.9 million for the year ended January 31, 2025.
Foreign exchange losses resulting from transactional exposure were $0.1 million for the year ended January 31, 2024. Interest Rate Risk At January 31, 2024, our total indebtedness included an outstanding principal amount of $12.2 million of term loan variable-rate debt and an outstanding principal balance of $8.9 million under our revolving credit facility.
Interest Rate Risk At January 31, 2025, our total indebtedness primarily consists of an outstanding principal amount of $9.5 million of USD term loan variable-rate debt, $12.7 million of Euro term loan variable-rate debt, and an outstanding principal balance of $20.5 million under our revolving credit facility, which bears interest at a variable rate.
Removed
Our primary currency translation exposure is related to our subsidiaries that have functional currencies denominated in Danish Kroner and the Euro.
Added
Transactional exposure arises where transactions occur in currencies other than the functional currency. Transactions in foreign currencies are recorded at the exchange rate prevailing at the date of the transaction.

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