Note 1 – Business and Basis of Presentation

Overview

AstroNova, Inc., headquartered in West Warwick, Rhode Island, is a global provider of printing technologies serving regulated and industrial markets. The Company designs, manufactures, distributes, and services solutions that enable customers to identify, track, and communicate essential product and safety information across a wide range of applications and media. AstroNova supports customers by enabling safety, accuracy and durability for flight deck communications, medical device and healthcare products, essential chemical products, and mission-critical industrial components, while ensuring compliance with local and regional regulatory requirements.

Our business consists of two segments, Product Identification (“Product ID”) and Aerospace.

Product ID Segment

The Product ID segment designs and manufacturers professional product branding solutions including digital label printers and presses as well as direct-to-package printers. We expanded our product offerings with our May 2024 acquisition of Portugal-based MTEX New Solution, S.A. (“MTEX”) to include mid-to-high volume direct-to-package printers, flexible packaging printers, and label printers primarily targeting the industrial and commercial printing segments. Label printers are specialized equipment used to print on different types of media, such as sticky labels, tags, and stickers. Product labels printed by our customers provide their consumers with essential details such as ingredients, usage instructions, safety warnings, and branding elements using text, barcodes, logos and graphics. Our direct-to-package digital printers print on a broad variety of media including paper bags, corrugated cardboard boxes, sheets, cardboard, envelopes, postcards, wooden planks and other rigid to semi-flexible materials and streamline the packaging process. We provide these solutions to original equipment manufacturers (“OEMs”), commercial printers, and brand owners across a variety of industries. In particular, we are focused on the life sciences, chemical and industrial markets where our label and packaging solutions are directly embedded in customers’ products and workflows, making reliability, durability and regulatory compliance critical to their outcomes. Labels and packaging must be durable to withstand heavy handling and harsh environments, and both the label and the ink must meet regulatory standards. In addition, label content can change frequently to address regulatory updates.

Our Product ID products are sold by direct field salespersons and independent dealers and representatives. In the United States, we have factory-trained direct field salespeople located throughout the country specializing in Product ID products. We also have direct field sales or service centers in Canada, China, Denmark, France, Germany, Malaysia, Portugal, and Singapore, staffed by our own employees and dedicated third party contractors. Additionally, we utilize over 145 independent dealers and representatives selling and marketing our products in approximately 60 countries.

Aerospace Segment

The Aerospace segment consists of our line of Aerospace products, including our branded ToughWriter® flight deck printers, as well as licensed flight deck printers, networking hardware, and related accessories. We have a long history of serving the commercial and defense markets where our flight deck printers are an important safety element within the cockpit. We also provide parts, service, specialty paper and other supplies for our aerospace customers. In addition, we design and manufacture test and measurement data acquisition systems sold under the AstroNova® brand name that enable our customers to acquire and record visual and electronic signal data from local and networked data streams and sensors. The recorded data is processed, analyzed, stored and presented in various visual output formats. Hardware comprises approximately 68% of segment revenue and the remaining 32% is recurring sales of supplies, parts and service. Customers include aircraft OEMs, commercial airlines, and defense industry prime contractors. Customers for these solutions include the United States Navy, the United States Air Force, and defense industry prime contractors, as well as other entities that utilize these solutions in high precision applications for power, rail, and industrial applications. Our Aerospace products are predominantly sold directly and through a limited number of independent representatives.

Unless otherwise indicated, references to “AstroNova,” the “Company,” “we,” “our,” and “us” in this Quarterly Report on Form 10-Q refer to AstroNova, Inc. and its consolidated subsidiaries.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the results of the interim periods included herein. These financial statements do not include all disclosures associated with annual financial statements and, accordingly, should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended January 31, 2026.

The presentation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the condensed consolidated financial statements and accompanying notes, including those that require consideration of forecasted financial information using information that is reasonably available to us at this time. Some of the more significant estimates relate to revenue recognition, allowances for doubtful accounts, inventory valuation, income taxes, valuation of long-lived assets, intangible assets and goodwill, share-based compensation, and warranty reserves. Management’s estimates are based on the facts and circumstances available at the time estimates are made, historical experience, risk of loss, general economic conditions and trends, and management’s assessments of the probable future outcome of these matters. Consequently, actual results could differ from those estimates.

Results of operations for the interim periods presented herein are not necessarily indicative of the results that may be expected for the full year.

Certain amounts in prior year’s financial statements have been reclassified to conform to the current year’s presentation. In the fourth quarter of fiscal 2026, we revised our methodology for allocating certain costs between cost of revenue and operating expenses. As a result of this change, prior period cost of goods sold and operating expenses have been recast in the accompanying condensed consolidated statements of income (loss) for the period ended April 30, 2025. Also, in the fourth quarter of fiscal 2026, we refined our reporting to better reflect segment performance by allocating certain costs previously included in corporate general and administrative expenses to the operating expenses of the applicable reporting segments. See Note 16, “Segment Reporting” for further details on the impact of these changes to prior year segment reporting.

The accompanying condensed consolidated financial statements include the accounts of AstroNova, Inc. and its wholly-owned subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation.

Tariff Matters and Potential IEEPA Refunds

In February 2026, the United States Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”) were not authorized. Subsequent rulings by the U.S. Court of International Trade directed U.S. Customs and Border Protection (“CBP”) to establish an administrative process for refunding previously collected IEEPA tariffs. In April 2026, CBP initiated a phased process for importers to submit refund claims.

We paid tariffs on certain imported components and products during fiscal 2026 that may be eligible for refunds under this process. We are evaluating our eligibility and, where applicable, intend to submit claims for recovery of such amounts. However, the timing, amount, and ultimate realization of any such refunds remain uncertain due to the evolving administrative procedures, potential legal challenges, and the review process undertaken by CBP.

In accordance with ASC 450‑30, Gain Contingencies, we account for potential recoveries of previously paid tariffs as a gain contingency. Under this guidance, gain contingencies are not recognized in the financial statements until realized or realizable. Accordingly, as of April 30, 2026, we have not recorded a receivable or other asset related to potential IEEPA tariff refunds.

To the extent we receive refunds in future periods, such amounts will be recognized when realized. Any recoveries would be recorded as a reduction of cost of revenues or inventory, depending on whether the underlying inventory remains on hand at the time of receipt.

Additionally, certain customer arrangements may require us to refund a portion of any tariff recoveries to customers where tariff-related charges were previously passed through or incorporated into pricing. The Company is evaluating these arrangements; however, given the uncertainty regarding the realization and measurement of any tariff recoveries, no liability has been recorded as of April 30, 2026 related to potential customer reimbursements.