Good day, and welcome to AstroNova's Second Quarter Fiscal 2022 Financial Results Conference Call. Today's conference is being recorded. I would now like to turn the conference over to David Calusdian of the company's Investor Relations firm, Sharon Merrill Associates. Please go ahead, sir.
Thank you, Keith. Good morning, everyone, and thanks for joining us. Hosting this morning's call are Greg Woods, AstroNova's President and CEO And David Smith, the company's Chief Financial Officer. Greg will discuss the company's operating results. David will comment on the financials.
Greg will make concluding comments and then management will be happy to take your questions. By now, you should have received a copy of the earnings release that was issued today. If you do not have a copy, please go to the Investors page of the AstroNova website, www.astronovainc.com. Please note that statements made during today's call that are not statements of historical fact are considered forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1934. These forward looking statements are based on a number of assumptions that could cause involve risks and uncertainties.
Accordingly, actual results could differ materially except as required by law. Any forward looking statements speak only as of today, September 14, 2021. The company undertakes no obligation to update these forward looking statements. For further information regarding the forward looking statements and the factors that may cause differences, Please see the risk factors in AstroNova's annual report on Form 10 ks and the other filings the company makes with the Securities and Exchange Commission. On today's call, management will be referring to non GAAP financial measures, including non GAAP net income, non GAAP net income or diluted share, Non GAAP gross profit, non GAAP operating expenses, non GAAP segment operating income, earnings before interest, Taxes, depreciation and amortization or EBITDA, EBITDA excluding the CARES Act benefits and adjusted EBITDA and adjusted EBITDA excluding the CARES Act benefits.
Gastronovo believes that the inclusion of these measures helps investors gain a meaningful understanding The chart changes in the company's core operating results and also can help investors who wish to make comparisons between AstroNova and other companies on both a GAAP and non GAAP basis. A reconciliation of this non GAAP measure to its most directly comparable GAAP measures is available in today's earnings release. And with that, I'll turn the call over to Greg.
Thank you, David. Good morning, everyone, and thank you for joining us. We reported year over year and sequential revenue growth in the 2nd quarter in both the Test and Measurement and Credit Identification segments as we capitalize on a positive demand picture across the business. Overall revenue of $29,800,000 Our sales performance is even more impressive when you consider the various global supply chain constraints and COVID-nineteen headwinds. While supply chain issues did not have a major effect on our Q2, we were nonetheless unable to fulfill all the demand we would have wanted to have shipped.
Addressing these supply chain issues has our logistics teams working overtime to ensure that we get the required items needed into our manufacturing facilities in a timely and efficient manner. Since we expect these conditions to persist on and off throughout the year, We are increasing certain inventory levels as a precaution. I'm proud of the dedication and commitment of our team to operate as effectively as possible within this dynamic environment to get our product to our customers. Turning to our Q2 performance by segment. Product Identification revenue was up 9% to $23,100,000 with solid contributions across the product line.
We saw sales increases in the hardware, supplies and service categories. Our T3 OPX wide format durable Direct to package printing system continues to receive positive customer reviews and is performing well in markets around the world. Brand owners, commercial printers and other customers are seeing the product's benefits in terms of greater efficiency and a high return on investment. From a geographic standpoint, we saw continued improvements in several markets from the realignment programs and additions that we have made to our global Salesforce in various regions. During the Q2, we began to attend smaller regional trade shows again.
And our sales teams have also begun meeting customers face to face when possible. We're thrilled to be attending in person 2 major trade shows later this month, TAC Expo in Las Vegas and the Fostok European Packaging Show in Germany. As we're able to increase our face to face meetings with customers and attend more trade shows, these high quality interactions are an We made major improvements in the digital area since the beginning of the pandemic. We continue to invest in expanding our ebooks, Case studies, support videos and other digital tools to enhance both our sales and customer support activities. Our product introduction plans in this segment have historically included 1 or more new products per year, and we're currently on track to meet that schedule.
Looking at our Test and Measurement segment, 2nd quarter revenue was up 5% from the same period in fiscal 2021 and up 6% from the sequential Q1. Within our Aerospace business, the market has been recovering a bit faster However, international travel is still far behind its pre pandemic peak due to travel restrictions in various countries. During the quarter, sales of printers, supplies, parts and repairs all increased. Orders for our ToughWriter 640 FLOYDECK printer continue to increase, demonstrating the progress we've gained in the marketplace with our newest printer. With its compact design and the lowest weight and power consumption industry, the ToughRider 640 is a great example of the innovative sustainability Another innovative sustainability solution was launched in the data acquisition side of our business, where we have begun to provide a solution to enhance the efficiency of solar farms.
Our data acquisition products are able to analyze the cells that are not working up to capacity, enabling operators to more quickly make repairs or replacements in order to improve the energy efficiency and yield of the solar farm. In the aerospace and defense market, our sales team landed a new government program featuring some of our most advanced data acquisition equipment. This is a significant multiyear program with initial shipments starting already in the 3rd quarter. Looking at the second half of the year, we're anticipating a good revenue trajectory for the Test and Measurement segment. We expect to report increased revenue on a sequential and year over year basis in the second half.
Now let me turn the call over to David for the financial review.
Thanks, Greg, and good morning, everyone. In addition to the revenue growth that Greg discussed, We reported another solid quarter on the operating and net income lines as we continue to effectively manage costs While prudently investing to grow the business. In the press release we issued this morning, we've discussed both our GAAP and non GAAP financial results. I'll take a few minutes to make some comments on this distinction so that you can understand the results a little bit better. This quarter, we recorded the benefit of 2 CARES Act programs.
These were the payroll protection program, Loan forgiveness and the impact of the employee retention tax credit or ERC program. To remind you, last year, we applied for and received a PPP loan. The cash from that loan has been on our balance sheet since we received it. But this quarter, that loan, both principal and interest, was forgiven under the terms of the program. Therefore, we eliminated the loan and the interest amounts on our balance sheet and recorded the benefit of that forgiveness in our income statement as other income.
In addition, this quarter, As a result of some enabling legislation after the CARES Act, we have qualified for the employee retention credit. And we report that in the Q2. We get it because our revenues declined more than 20% from the Calendar 2019 1st 3 months to the calendar 2021 1st 3 months and we expect to see those cash benefits through our payroll tax filings. Well, we booked the impact of this credit now under the rules. The tax refund is pending.
It's a receivable on the balance sheet and will convert Later on today, we'll file our Q2 10 Q, which will provide more detail about the impact of all these items as disclosed in the press release. So read the SEC filings as Mr. Kalustian suggested. That said, in summary, we've carefully and intentionally differentiated between the income statement impact of the benefits We recorded in our GAAP financial results, which have those 2 CARES Act programs in them and the results that we would have reported Had those items not been there and we've done this to help you focus attention on the underlying Operating results of the business and we call that pre exact or non GAAP in our press release disclosure. It doesn't that's not to minimize the favorable impact that those items have had on our GAAP income And more importantly, in our balance sheet, both our cash position and our equity accounts.
With all
of that in mind and because the results that Greg has already mentioned are very solid, I'll just Make comments about the results on a pre CARES Act basis. Those results are pretty strong. Bookings of $30,600,000 were up 21% from last year. Backlog of $24,400,000 is up 3% last year and it would have been higher but for some of the Bookings that came in just after the end of the quarter. As Greg said, revenue is up in total 8% to $29,800,000 of that revenue is up 5.4 percent to 6,400,000 Product Identification revenue is up 8.6 percent to 23,500,000 Gross profit was $11,100,000 up 13% and at 37.1 Percent was up 170 basis points from last year.
Operating income of 1,322,200 It was 6.5 times last year's result. Net income of 978,000 or $0.13 per diluted share was up from essentially breakeven last year. EBITDA was $2,100,000 or 7.2 percent of revenue and adjusted EBITDA, which adds back stock based compensation, It was $2,600,000 or 8.6 percent of revenue. PI operating income was 188,000 lower than the prior year. It was 12.7% of revenues, down from last year when we had curtailed spending sharply, but was up from the Q1 of this year by more than 90 basis points.
Operating spending was up sequentially from the Q1 by $255,000 as we continue to invest in sales growth and new product development. T and M segment operating profit of $907,000 was up $1,300,000 from last year's loss And the segment operating margin was 14.3%. This quarter, we completed the Airbus contract, for which we incurred some costs in getting it completed, which were capitalized. We took a look at that and we amortized We've decided to amortize those costs over the life of the A320 program of an estimated 20 years. And so at that time, we We reevaluated the amortization of the rest of the aerospace intangibles and changed the estimate of the period we should amortize them over The 20 years as well.
This change in intangible amortization accounting does not impact cash flow, of course, but it does impact segment profit favorably. With or without that impact though, segment Profit and margins were higher than they've been at any point since the second half of fiscal twenty twenty when revenues were considerably higher. We do think that this accounting change provides you with a much more realistic Informative perspective on the performance of this. Moving on, looking at Total revenue by type hardware revenue in the quarter was 7,900,000 compared to $6,000,000 in the prior year and the fact that A and M and Aerospace revenue Was still strong last year. Supplies revenue was $8,700,000 up 9.4% From $17,100,000 in the same period of fiscal 2021, service and other revenue was $3,300,000 up $2,100,000 from a year earlier.
Domestic revenue was 57 0.7% of total revenue and international was 42.3%. As Greg mentioned, we have challenges From a supply chain perspective, obtaining raw materials and components has resulted in some additional Costs for expedited and express shipping and things like this, while it has not made a major disruptive impact on our results, It has been a slight headwind for revenue and it's also put a slight drag on margins. We're addressing potential supply Shortages proactively through long range planning and supplementing inventories as needed. And the strategies have resulted us resulting in us carrying more inventory than we normally would and certainly more than we had planned. While we still expect to manage through what we think are temporary locations, We certainly expect that inventory will increase in the Q3 as lead times continue to be extended.
Turning to our balance sheet, our cash and debt positions continue to improve. Cash and equivalents at the end of the quarter stood at 11,400,000 Flat, but debt continues to decline and at the end of the quarter was $9,500,000 That's down about $3,000,000 from year end. We really are in a wonderful position relative to our covenant structure and we have ample unused committed bank credit capacity to support our growth and capitalize on future opportunities. With all that, I'll turn it back to Greg for closing comments.
Thanks, David. And we did this in a quarter Looking at the remainder of the year, we expect to report We continue to focus on our core strategic tenants Now David and I will be happy to take your questions.
And we'll now take our first question. It comes from Dick Ryan of Colliers. Please go ahead.
Thank you. So Greg, I don't know if this was on my end or you going Dave through the commentary back to you, you pretty much So that could be me or I don't know if that was the whole of the conference call. Anyway, I can circle back with your Closing comments, but how much on the supply chain issues, how much of revenue would you say was kind of pushed from those challenges?
Yes, it was not a significant amount, but it was would have made a little bit of a difference there. It wasn't like a huge delta there, but there were things that we had planned to move out and just in the Kind of final weeks of the quarter weren't able to pull everything together to move it out, but we have since done so.
Okay. And Dave, I'm not sure I heard, what was the supply number, so the recurring revenue aspect for Q2?
Keep going to your questions while I look up the answer to your question.
Greg, Boeing just came out with their updated commercial transport outlook, obviously, still calling for very strong Multi year growth in single aisle, what are you seeing with your MAX and then the 2020 business, maybe on a more shorter term level, are they getting through any inventory issues that were out there? Or How does the rebounding airline delivery Demand look for you.
Yes. So for us, it's again, we've mentioned on previous calls, deliveries don't matter so much. I mean, they do matter from an operating point of view because we get MRO benefits from that. But as far as new printers, that's a function of their build rate. We do see good pull through on that.
Obviously, the Airbus aircraft is ahead still. But Boeing seems to be getting the marks that they've told us and what they have in their forecast. So we seem to be tracking Pretty close to what they're estimating right now. The bigger impact, Dick, is the actual air travel, right? So The single aisle aircrafts are used in the domestic travel, which is kind of dominant traffic pattern right now.
Yes. Can you give some more details on the new win and the A and D side?
Yes. It was in our Test and Measurement segment, of course, and that's we make a range of data acquisition equipment and we have some you can take kind of take a look at our website. I I call it the exact product, but it would be in the higher range of those products, a bit more sophisticated data acquisition equipment I can handle a huge number of channels and data and present that in a bigger screen format as well as printed format. So it's something we've been working on for a couple of years now. And like I mentioned, it's a multiyear program.
So we should kind of enjoy the benefits of that Hard work that the guys have put in over the past couple of years now for, I'd say, at least a couple of years going forward. And it's a multi location type of situation as well.
Okay.
And, Dexter, I'll jump in and just answer your I was going to jump in and answer your earlier question. The supplies revenue in the quarter was 18 point $7,000,000 That was up 9% from the prior year.
Okay.
And service and other was $3,300,000 up from $2,100,000 in the same period last year.
Okay. And on your guidance for sequential and year over year second half performance, are you going to be seeing that in both segments?
We didn't call it out specifically, but at this point, they both look good for the second half.
It appears we have no further questions at this time. I'd now like to hand the call back to Greg Woods for any additional comments or closing remarks.
Great. Thank you. Well, thank you, everyone, for joining us here today. We look forward to speaking with you at our next call, and Enjoy the rest of the day. Bye now.
This concludes today's call. Thank you for your participation. You may now disconnect.