AstroNova(ALOT) - 2025 Q4 - Annual Results

Credit Agreement Amendments - The Borrower, AstroNova, Inc., has requested amendments to the Existing Credit Agreement due to non-compliance with the maximum Consolidated Leverage Ratio and minimum Consolidated Fixed Charge Coverage Ratio for the Measurement Period ended January 31, 2025[4]. - The Lender has agreed to waive the Specified Events of Default, which allows the Borrower to continue its operations without immediate repercussions from the defaults[6]. - The Borrower must provide a 13-week cash flow forecast for its Domestic Subsidiaries starting March 1, 2025, as a condition for the effectiveness of the Agreement[9]. - The Borrower is required to pay all fees and reasonable out-of-pocket costs incurred by the Lender in connection with this Agreement[10]. - The Collateral Documents continue to create a valid security interest in favor of the Lender, which is perfected in accordance with the terms of the Collateral Documents[17]. - The Agreement is governed by the laws of the State of New York, incorporating jurisdiction and waiver of jury trial provisions from the Credit Agreement[20]. - The Borrower and Guarantor have ratified the Credit Agreement and confirmed their obligations under it as of the date of this Agreement[18]. - The waiver of the Specified Events of Default is a one-time waiver and does not obligate the Lender to waive any future defaults[7]. - The Borrower has released the Lender from any claims related to the Loan Documents as of the Effective Date[8]. - The Agreement supersedes all prior agreements and understandings related to the subject matter, ensuring clarity in the terms and obligations of the parties involved[19]. Financial Performance - The company reported a significant increase in revenue, reaching $1.5 billion, representing a 25$1.6 billion and $1.7 billion, which reflects a growth rate of 7$200 million in revenue over the next fiscal year[31]. - The company is investing $50 million in research and development for new technologies aimed at enhancing user experience[31]. - Market expansion efforts include entering three new international markets, projected to increase user base by 15$300 million, expected to enhance product offerings[31]. - Operating expenses increased by 10% to $400 million, primarily due to increased marketing efforts[31]. - The company reported a net profit margin of 20$1.6 billion and $1.7 billion, indicating a growth of 7$200 million, up 10% from the previous quarter, focusing on new technology innovations[32]. - The company plans to implement cost-cutting measures aimed at reducing operational expenses by 5% over the next year[32]. - The overall gross margin improved to 40%, compared to 38% in the previous quarter, indicating better cost management[32]. - Future outlook remains positive, with a projected annual growth rate of 20% over the next three years[34]. Debt and Financial Obligations - The outstanding principal amount of Revolving Loans is $11,500,000, with an existing Danish Term Loan of$4,232,000 and a U.S. Term Loan of $6,000,000[42]. - The total existing outstandings amount to$21,732,000 after a prepayment of $1,500,000 on the U.S. Term Loan[42]. - The company aims to amend and restate the existing credit agreement to re-evidence the obligations outstanding[42]. - The company has established a commitment fee structure based on the Consolidated Leverage Ratio, with rates ranging from 15 bps to 25 bps depending on the level[58]. - The applicable rate for loans is set at 160 bps for a leverage ratio of less than 0.50:1[58]. - For leverage ratios between 0.50:1 and 1.25:1, the applicable rate increases to 185 bps[58]. - The company has outlined various schedules related to subsidiaries, joint ventures, and intellectual property in its financial documentation[36]. - The company is committed to maintaining compliance with the terms of the amended credit agreement to ensure financial stability[42]. Compliance and Regulatory Matters - The company is subject to compliance with the Dodd-Frank Wall Street Reform and Consumer Protection Act, which may affect its operations and financial reporting[86]. - The company’s financial statements are audited annually, ensuring transparency and compliance with GAAP standards[66]. - The company has defined "Change of Control" criteria that could impact its governance structure and shareholder rights[87]. - The company’s definition of "Approved Fund" includes entities engaged in bank loans and credit investments, which may influence its financing strategies[62].