Scott Solomon - Senior Vice President Greg Woods - President and CEO Joe O’Connell - Senior Vice President and CFO.

Jeremy Hellman - Singular Research Evan Greenberg - Legend Capital Funds Steve Busch - Southpaw Investments Jim Gentrup - Val Vista Capital Tom Spiro - Spiro Capital.

Good day and welcome to the AstroNova Third Quarter Fiscal 2016 Financial Results Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Scott Solomon. Please go ahead, sir..

Thank you, Lisa. Thank you and good morning everyone. Thank you for joining us. Hosting this morning’s call are Greg Woods, AstroNova’s President and CEO; and Joe O’Connell, Senior Vice President and CFO.

Greg will begin the call by reviewing the company’s operating highlights and business outlook; Joe will take you through the financials; Greg will make some 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 earlier today.

If you have not received a copy, please go to the Investors section of the company’s 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 Securities and Exchange Act of 1934.

These forward-looking statements are based on a number of assumptions that could involve risks and uncertainties. Accordingly, actual results could differ materially. Such forward-looking statements speak only as of the date made; except as required by law, the company undertakes no obligation to update these forward-looking statements.

For further information regarding the forward-looking statements, the factors that may cause differences, please see the company’s risk factors in the annual report on Form 10-K and other filings AstroNova makes with the Securities and Exchange Commission. With that, I’ll turn the call over to Greg Woods..

Thanks Scott and good morning everyone. Welcome to the first AstroNova quarterly earnings call. As most of you are hopefully aware by this point, Astro-Med is now doing business as AstroNova, Inc. The name and branding change was formerly announced in September.

The new name and corporate identity are a much better fit with our ongoing business and strategy. Since it has been nearly three years now since we divested the medical business.

The AstroNova name and branding bring together our traditional strength in aerospace industry with our rapidly growing presence in product identification, test and measurements, and other applications where our data visualization technology represents a significant competitive advantage.

Our flight deck and cabin electronics, color inkjet label printers, consumables and data acquisition systems provide a higher return on investment for our customers, allowing them to be nimble, efficient and cost effective in operating their businesses.

As part of our rebranding program, we also launched a new user friendly company website, astronovainc.com. If you haven’t already done so, I encourage you to check it out.

In addition to the expanded product and company section, it includes a new very powerful investor area and a lot of new content, providing deeper insights into our strategy for growth. You’ll also find a new section on the AstroNova Operating System or simply AOS. The AstroNova Operating System is how we execute our strategy and run the business.

An important component of AOS is our suite of lean enterprise tools that we use to expand our operational excellence initiatives. We are focused on deploying our unique operating system to achieve continuous improvements in product quality, manufacturing efficiency, delivery, cost and growth.

Our performance in the third quarter of fiscal 2016 speaks to that effort. To begin with, Q3 marked the 13th consecutive quarter of year-over-year revenue growth, as both our domestic and international businesses were up from the same period of fiscal 2015. The revenue was up 7% to $24.8 million.

And once again, this quarter, our bookings, outpaced shipments coming in at $25.8 million, an increase of nearly 14% over the third quarter last year. Let me provide you with a few more additional insights and perspectives on our performance this quarter. The name change is just one of the transformative events that we undertook in Q3.

The third quarter also marked the first time in the company’s 46-year history that we operated our plants on an around-the-clock basis. As I mentioned in last quarter’s call, the rapid growth of our consumables business was beating to outstrip our capacity to manufacture these products on a two-shift operation.

This strong growth in our QuickLabel Systems business continues this quarter with record sales of $17.7 million. However, the move to a three-shift operation combined with the investments we have made and plants and equipment upgrades have allowed us to keep pace with this growing demand.

Another significant accomplishment this quarter in the Test & Measurement segment was the great strategies made in the integration of the RITEC aerospace printer business. As you might expect, integrating an aerospace business that supports a number of large commercial aircraft program is a very sophisticated process.

Fortunately, our team’s experience with the Miltope acquisition last year has proved extremely helpful in this effort. The RITEC integration is proceeding rapidly; and at this point, we expect to hit our fiscal yearend target completion date.

At that point, pending normal regulatory approval, we will consolidate the manufacturing into our West Warwick facility. Another important contributor to the performance in the third quarter has been our international expansion.

As we continue to build out our global footprint, we’re seeing an increasing percentage of our products being exported outside of United States. Excluding the foreign currency impact, international customers accounted for 30% of our revenue this past quarter.

We made great progress in adding high caliber personnel around the globe, and we’re continuing to explore additional overseas market opportunities. Before turning the call over to Joe, let me also highlight our strong balance sheet, which we continue to manage prudently and conservatively, and our increasing free cash flow.

Through the first nine months of this fiscal year, we have generated $6.1 million in free cash flow, about half of that coming in the third quarter. By comparison, free cash flow for the first nine months of the fiscal 2015 was $300,000. Now, let me hand it over to Joe for a more in-depth review of the financials..

QuickLabel Systems posted sales of $17.7 million, beating the record set in fiscal two. The 16.3% increase in sales to Q3 of fiscal 2015 is reflective of the demand of our entire Kiaro! family of products, particularly our inks, labels and other consumables.

Sales in the Test & Measurement segment which includes both our ruggedized products of our aerospace market as well as our data acquisition systems came in at $7 million for the quarter. While that’s down from the $7.9 million in the same period of last year, the delta reflects orders that some aerospace customers have extended to future quarters.

Looking at the sales by product category, consumables saw another quarter of strong double-digit growth, increasing 27% year-over-year to $13.9 million and representing 56% of our total quarterly sales.

As Greg noted, we’re running now a third shift in our media plant in West Warwick and that certainly has enabled us to increase the capacity of our facility as well as shorten customer lead times.

Hardware sales were down approximately 18% from a year earlier to $8.7 million in the quarter, again largely reflecting timing of orders to certain aerospace customers. We would expect to see a pickup in hardware revenues as these orders are placed in subsequent quarters.

Sales from our service, parts and repairs totaled $2 million in the quarter that’s a 38% increase from the same period of fiscal 2015. Gross profit for the fiscal 2016 third quarter was $10.1 million that’s unchanged from the prior year. Our gross margin in the quarter was 41% versus 43.9% for the third quarter of fiscal 2015.

The variance in gross margin related largely to product mix and cost associated with product line integrations and absorption in our manufacturing operation. Operating expenses for the quarter rose 9.4% to $8.3 million from $7.6 million for the same period of a year ago.

The increase came largely from discrete cost associated with the RITEC transaction, our rebranding initiative, and fees related to the sale of the Massachusetts building owned by our subsidiary. That sale was completed at the end of October of $1.8 million, resulting in $1.7 million of increased cash.

Operating income in the third quarter was $1.9 million or an operating margin of 7.5% compared with the operating income of $2.6 million or 11.1% for the comparable period in fiscal 2015. Turning to the segment operating profit, QuickLabel Systems generated $2.9 million in segment operating profit for record margin of 16.4%.

The Test & Measurement segment had operating income of approximately $850,000 on a corresponding margin of 12.1%. Our federal, state and foreign tax provision in the quarter was $873,000, representing an effective tax rate of 39.8% versus last year’s 38.5%.

Third quarter net income was $1.3 million or $0.18 per diluted share and it compares to $1.6 million or $0.20 per diluted share in the third quarter of fiscal 2015. We continued to maintain a healthy and very liquid balance sheet. Total assets at the end of the third quarter were $79.9 million.

Our equity balance for the same time frame was $66.6 million, representing a book value of $9.12 per share. Cash and marketable securities at the end of the quarter totaled $22.5 million compared to $23.1 million at fiscal 2015 year-end, with $18.3 million at the end of the second quarter of this fiscal year.

It’s worth reiterating that we have strengthened our cash position from Q2, even with the $7.4 million acquisition of the RITEC product volume. To echo Greg’s comment, this speaks to the successful deployment of our product group, our geographic expansion and the ongoing operational improvements across the organization.

We also continued to improve our working capital. Accounts receivable at the end of the quarter were $14.9 million, representing 48 days sales outstanding and compares with 52 days sales outstanding at the end of fiscal 2015, and 54 days sales outstanding at the end of the second quarter of this current fiscal year.

Inventory levels at the end of the quarter were $15.1 million, representing some 93 days of inventory on hand. This compares favorably to inventories of $15.6 million at the end of the prior year, representing a 104 days on hand.

Capital expenditures in the quarter were $870,000, primarily related to information technology, building, improvements, machinery and equipment, tools and dyes. The company returned $512,000 to shareholders in the third quarter in the form of cash dividends which represented $0.07 per share.

Our employee population stood at 331 at the end of the quarter. Sales per employee increased to $278,000 per employee, up 6% from last year’s $262,000 for the same time frame. Orders received in the third quarter increased 13.5% to $25.8 million, reflecting a strong demand for our products.

We exited the third quarter with a backlog of $16.8 million, approximately 39% higher than at the end of our previous fiscal year. The strength of our liquidity is also evident in the $3.1 million in free cash flow generated in the quarter which was up 6 times the amount we generated in the same period last year.

Before turning it back to Greg, let me remind you that Greg and I will be presenting at the LD Micro’s Main Event Investor Conference on Thursday December 3rd at 1:30 pm Pacific Time. If you are planning to attend, please email alot@investorrelations.com, to schedule meeting. Now, let me turn back the call to Greg for closing comments..

Thanks Joe. From both the financial and operational perspective, we ended the fourth quarter of fiscal 2016 well-positioned for continued growth. Based on the current business environment, we remain on track to achieve our full year revenue guidance of $93 million to $103 million with an EPS of $0.70 to $0.75.

With that, Joe and I will be happy to take your questions..

Thank you, sir. [Operator Instructions] And we will take our first question from Jeremy Hellman with Singular Research..

First off, I have got a few. First, on the back on the new website, I think it looks great. When we spoke at our conference back in September, we talked about some of the cost of that.

Can you just remind me again what that quarterly expense was that we could look to, not have running through P&L going forward, just tied to the website and rebranding?.

Yes, probably -- Jeremy, it’s probably in the neighborhood of about $50,000 order of that. So that’s as you say, that should slow down in the subsequent quarters..

Okay.

And turning now where you have got the third shift running at your site in Rhode Island, should there be a read-through that you need to start looking to take on that, looking at acquiring or building another facility in the next couple of years, is that on the planning horizon?.

I don’t think so. I think we feel that -- and Greg can talk a little bit more at length about this. We are also looking at equipment improvements which we think will be much allowing us to improve the productivity of the factory in media. So, we are not really anticipating any increase in bricks and mortars, at least for the foreseeable future.

We think we have a strategy that’s going to allow us to improve productivity and consequently, improve our capacity..

Yes, Jeremy, we took a look at this actually at the beginning of this year, and we actually contracted with a manufacturer to build a custom piece of equipment, the first of which actually hit our floor a few weeks ago.

And the combination of that plus the operational excellence initiatives we have done and some relay out of the factory, we expect within that footprint we can do double the volume that we are at right now.

So, I mean if we didn’t make those changes, yes, we would have to probably double the size of the building, but we feel within the existing footprint, we can do 2x the volume at least..

And then just kind of backing out a little bit, you’ve got some real nice trends going in the QuickLabel segment. And I wanted to try and just dig into the demand drivers that you think are fuelling that right now.

And from where I sit, I look at things, just cherry picking one, industry for example, you look at kraft brewers for example a bit, aren’t going to be running at the size of Miller or Budweiser but are going to have unique labeling needs. And as they introduce seasonal beers, you see all that punk and spice beer around holiday for example.

Is that a general trend emblematic of the demand drivers that are fuelling the demand for your business there?.

Yes, and that’s a big piece. I mean the food and beverage is the biggest sub segment within the QuickLabel business and that within that area, a lot of it is the customization you’re talking about or the individualization of the brands.

So, certainly, a customer -- we don’t fuel Budweiser for example but yes, kraft brews we do, we do wines, we do some small vineyards but also customization there, a good example would be a lot of them will do custom -- you want to have 20 cases for a wedding, they’ll do specially labeled bottles.

So, they’ve taken the printer and done additional things with it that they didn’t realize they could do. First, it is you just not have to deal with outside vendors and running at them labels and having the, wrong labels and now they’re actually kind of inventing kind of new business areas to go after because they have this technology..

Okay, yes, because I mean when you really kind of look at what’s going on within the broader food and beverage domain, it seems that there’s just a macro trend to locally produced smaller batch type stuff, this farmers markets and things like that which seem to be have durable trend; and so that’s the sort of thing I think that gives you guys a nice durable trend to play in..

Yes, and even those -- I mean I think I’ve mentioned before, we are -- our range of customers goes from global 500/1000 sized companies down to kind of mom and pop stores that have a new type of chop it [ph] for example.

And even though smaller customers typically print several hundred thousand to a million labels per year, just that there’s a wide variety. So, instead of having two or three label types, you may have 25 to 250 label types..

And then one last one from and I’ll hop out.

Since RITEC integration is just about done, kind of what are your thoughts in terms of potential M&A opportunities over the next call it, 12 months?.

Yes. Well, of course we don’t comment on individual activities there. But within all three of the product groups, we have the data acquisition and aerospace within Test & Measurement segment and we have the -- within the Product Identification or we have QuickLabel business, we actually have things that we’re looking at in all three of those segments.

So, it looks -- it’s fairly busy; it’s been -- can’t really comment on whether it’s busier or not in earlier in the year. But this is pretty steady in terms of the number of things we see. We have a pretty robust funnel and funnel process that we screen these deals through. And we have at given point, five to six that are fairly active..

And we’ll now take our next question from Evan Greenberg with Legend Capital Funds..

Couple of things, number one, how do you breakout that $0.5 million in expenses on the acquisition integration costs?.

It’s -- some of it relates to the factory itself and there’s a good piece of it having to do with R&D as well, in terms of the products and sales getting the products qualified. As I think we have explained in the past, each of the products has to be qualified as a result of the FAA requirements.

And then, there’s also a piece associated as you might suspect, with legal expense, associated with the transaction..

And also, is there any way, and it’s really rough, because -- I love, the QLS is working like a machine now; so, it’s going great. You guys are doing a wonderful job in general. Is there any way this -- there’s really no way I think to smooth out what goes on in T&M.

I mean is there any way you could come up with something that enables you to smooth out the ruggedization of the quarters?.

So, it’s a different nature of the business, right? So, if I go back to that example we gave a few minutes ago about the little chocolate manufacturer company. I mean that’s a type of thing where one of our QLS sales people might go in there, do a demonstration and the owner brings out a credit card and says I’ll take the machine now.

And the difference between the aerospace and data acquisition business is it’s more a project based. So that’s really where the difference is. So, it’ll smooth out with increasing volume, that’ll help, because each individual release won’t be as dramatic up or down, but that’s a biggest way to do that.

And there also is a growing consumables piece and service piece within that segment. And that’ll help as we move forward as well to smooth out the revenue..

And the last question had to do with gross margin and mix.

I mean the thing is if you just look at QLS, if you broke this company out and QLS was separate, this would be valued as an entirely different stock; people think of it as a dynamic aggressive growth company, instead of thinking of as a stogy [ph] New England manufacturer which they are completely wrong on.

But, if on the currency side, I guess that may have impacted gross margin.

Was it mix related; was it ruggedized printers and just T&M have higher margins?.

It was more mix related than anything else to be honest with you, Evan..

And we’ll go now to Steve Busch with Southpaw Investments..

Hi, Greg and Joe. Good morning and happy Thanksgiving. So, another great quarter; I like what you’re doing.

Just wondering, most of my questions have been answered, could you drill down a little bit on what caused delay in T&M for aircraft ruggedized first?.

Yes, it’s really a matter of orders and deliveries. So, if you look at the order book, that continues to grow nicely, but just the staging of those orders, and we have some newer programs. And there is just -- some of this is a delay in actually getting these printers certified and getting them on aircraft and getting them into full production.

So that’s kind of just what was happening with the T&M segment here..

Most of them are already certified or these were new….

No, we’ve got a number of new programs that we’re working on. And that’s kind of where the R&D expense goes, so within that segment as well as the qualification efforts. And for example, one program I won’t name names here but we thought we would have it done in June and they came back. So, we want some additional certification tests.

You make changes to the printer; it goes to the lab; you put the printer on an aircraft; they have to flight test it and just getting a plane ready to be able to take it up and fly around. You have to wait sometimes two, three months to get that window to do that..

So, when you say later quarters, do you think to delay it two quarters, five quarters, any kind of estimate or is it just up in the air?.

No, we kind of know from the orders where they are going. It kind of flows out over the next four quarters or so in terms of the different programs that we have, they should be all on line..

So, between the three shifts around-the-clock, which is excellent or QuickLabel and maybe an uptick in these Test & Measurement ruggedized printer orders, should our gross margins and our overall earnings be trending up over the next few quarters you would think? I mean are we getting a benefit now from utilizing our manufacturing around-the-clock?.

Yes, we have, and maybe Joe can speak a little bit more to this. But, the consumables plant, we have fully addressed that. Now, we need to have it happen on the hardware plant. We’re actually getting that up into higher volumes. Right now, we have -- there is certain fixed overhead, you need to run that.

And getting that volume up bit more from where we are right now led us just improve the gross margins from that point of view..

I think that’s right. The mix on the hardware will really have a real impact, as those orders start to translate into releases, you’ll see that evident in -- certainly in the -- most likely in the next quarter and certainly I think in fiscal ‘17..

And then, I guess my last question, when we complete the RITEC transition, also it’s like the boost in margin there consolidating facilities or…?.

Well, I think we’re probably, as you know, Steve, we just really bought the product line. So, it’s really a case of integrating the product, as you say, into our operation here. And so, certainly that will translate itself in terms of increased sales and obviously there will be some related improvement in margins as well..

And do we make money on the sales building or..?.

Let’s say just say we broke even..

And we’ll go now to Jim Gentrup with Val Vista Capital..

Most of my questions have been answered; I just wanted to know a little bit more about the capacity of the Test & Measurement business.

I know you’ve got a lot of orders and some delays, but what can you -- what’s the overall capacity?.

Well, I think in the hardware, we’re in pretty good shape. We only have a one shift operation with respect to the -- if you remember, Jim, we have the two facilities here. So, we have real capacity, if you will, we could probably only -- we’re only probably about 50% of capacity in terms of the hardware.

We have ample room for continuous growth in terms of the existing facility..

Yes, I would say -- and I think Joe’s already on the mark there. We could certainly double our volume in this -- again, in the footprint of the hardware facility.

And probably that goes to the operation’s excellence, lean initiatives you put in place there, we have -- we just went through a whole work cell conversion, I should say call because it’s about two-thirds done now, but we will be done with it probably near the end of this year.

One example is just the way that the original -- we had benches that were 20 years old and they’re kind of fixed three foot by six foot, let’s call it and we just lay out each cell now with exactly what we need with custom made benches, so we build -- if we need 2.2 feet by 4.1, then we build the bench exactly of that footprint.

And once you start doing things like that, you free-up a lot of floor spaces. So with that conversion, plus a few other things that we’ve been doing around here, we feel comfortable we could actually double our hardware volume as well..

So, I mean looking longer term or I don’t know how long term I should -- maybe I should ask -- turn that open asset as an open ended question, but this business seemingly has these orders in backlog; they’ve been there for a while, so I mean, I just wonder what you see is this business doubling in five years or sooner or what’s the longer term look here?.

I hope it would double in less than five years but that’s going to be a function of what kind of orders we can bring in and how quickly we can bring them in. From a production point of view though, which we’d have no problem handling the capacity footprint..

And we’ll go now to Tom Spiro from Spiro Capital. .

First on the Test & Measurement side of the house, as I recall, we rolled a new product, the Daxus not long ago and a refreshed product, the DMX-8000, and I was curious what the early reports have been?.

The early reports are good. We’ve got actually -- not a lot of units have been sold so far, again because of the nature of that business, it’s -- keep going back to the chop it, [ph] factory and so on or the chop [ph] now when you walk and get a POL. We’ve gotten some of those. Most of those are larger programs.

Matter of fact, we just were at the Auto Test Show in October where it’s kind of like the first public revealing of those products. And I think our leads were up 2.5x from where they were -- we had the same show last year. So there’s lot of interest in it.

We actually have some nice customers that we’re working with now that we hope to convert to those products. But again, that doesn’t happen overnight. It’s probably going to take several quarters to see a big impact from that. The good news is that the products work well; the quality is there; the features are what people are looking for.

So we’ve got lot of good increase going right now with those products. .

That’s great. Secondly on QLS with consumables up as much as they were, I guess the implication is that the hardware sales in QLS were flattish, perhaps up a little bit. I think that’s Kiaro! which was up, hardware sales were up little bit. If I’m interpreting correctly, has the rate of sales growth of Kiaro! declined? The hardware I’m talking about..

I think the hardware is pretty steady. Quarter-over-quarter, it continues to increase. We don’t publish the actual numbers but you will see this in revenue, you can probably figure it out from there. But like we had talked in the past, the units that we sold three years ago are producing labels and so are the ones we’ve sold last week.

So, you get this cumulative effect where the consumables goes at a much more rapid rate, than the actually unit sales..

Yes, I guess that’s my point.

It seems like the unit sales are really not growing that fast or perhaps I should say growing at a about the same rate as the last year or two; is that about right, I don’t know, few percent a year or some number like that?.

No, actually, Tom, they’re doing pretty well. I think the other opportunities that we have and as we opened up new opportunities in Southeast Asia, we’re starting to see some demand that we hadn’t seen before. So, actually we’re impressed at the growth of the units. We think it can be better but certainly I think we’re seeing the trend is encouraging..

I see.

Speaking of Southeast Asia and elsewhere overseas, can you give us any sort of a progress report on them, any of your initiatives to shift some of our costs into the euros of the -- currency issues aren’t quite as important as they are right now to us?.

In Southeast Asia, we’re mainly there at this point; we’re doing more selling than buoying, so we haven’t really shifted cost of that part of the world. Although we’re sourcing some components there, we started that about six months ago.

So, that will be -- we’ll get some pickup from that in terms of the associated costs of those components but we’re also taking look at other facilities, things that we can do kind of in a three-region area. So in a long run, we’d like to be able to manufacture in Europe, North America as well as Asia. It will take a while to get that set up.

But the infrastructure we put in place and some of the key hires that we’re making are people that are capable of running those kinds of operations..

How about shifting cost into the euro? I mean, anyway to shift, I don’t know whether it’s distribution or transportation or other kinds of things into the euro or is that it’s really not possible?.

Well, I think in the year, we’re looking at couple of things in Europe, Tom, which we [indiscernible] to right now but as Greg mentions, one of the initiatives is to reconfigure the position that we have currently in Europe with an opportunity to address the exchange issue..

I see. As I recall, I guess it was the last quarter’s conference call and I think you mentioned it briefly here that you were getting some new equipment that would boost the productivity in the consumable side. In fact, I think you mentioned a few moments ago the first piece of equipment arrived a few weeks ago.

I wondered what your early sense is of how effective that piece of equipment is..

Yes, that’s very impressive. It’s I don’t provide a lot of the detail, from a competitive point of view. But it takes -- existing equipment that we’ve been using is, I don’t is either -- Joe might know better 20 to 30 years old equipment that we use for the converting and of course this is brand new.

And it’s all turbo [ph] driven, vision systems, computer controlled. The bottom-line is it essentially is about -- I look at it from a operational point of view, it’s probably one of these new presses to work of 3 to 4 of the old one..

What do you think of placing order for another one?.

The guys are all over us right now. We are going through the final ring out of it. So, I would think either December or January we’ll probably place an order for what we think we are going to need for next year. We are going through our overall budgeting process right now, because obviously January 31 is the year end.

So, this is a time of year where we review our strategy, put together our CapEx program along with our full budget. And there is at least a few of those machines already in the list there..

So, you rolled out the new Oracle system a number of months ago. I wonder have you reached a point now where you think it’s actually helping you or rather than hindering you or you are still in the learning curve..

Well, I think it’s certainly helping, Tom. I mean I think just the access of information and the integration of the data has been a really plus. But again, I think as we mentioned before, the other advantage is we need to be able to integrate that with Salesforce.com and Product Life Style product that we have right now.

We think once those -- and that’s earmarked for the first half of the fiscal ‘17. We think that will again be another boost of productivity and ease of information and provide lot more analytics, if you will, than we have had historically with the old products.

So, I think each day we get better and more knowledgeable and more productive in terms of having information available to us on a timely basis..

When do you plan to extend it to the branches?.

That’s a great question. We have got a lot things earmarked for ‘17. I don’t think us get into that probably until the latter part of ‘17. But the NetSuite product is okay. I think as you know all four branches have run the NetSuite cloud-based applications.

So, I think that can handle it for ‘17, I think probably the first part of ‘18 you will see that activity take place..

I see. As I recall....

If you look at -- go ahead..

No, go ahead. .

No, I was just going to say is that our strategy was to again have the best of breed in each of the functional areas which we feel we now have with the Oracle system, the Salesforce.com and our PLM product. And now in ‘17 the first priority is to integrate all of those. So, we have an integrated system.

And then once we know that works well, then we’ll roll it on a global basis, and that will be our standard going forward for the next several years..

And we will now take a question from Joe Furst from Furst Associates. [Ph].

My question is this, over the last -- since January 1st, the stock is down about 20% and it’s not because you are not doing a good job but it’s because your company is not very well known.

What are you doing to try to get your story out a little better other than I know you are making this one presentation but what else you are doing to actually get the company known? So you have got a great story to tell..

Well, I think a great question Joe. I think we are working with the IR firm that we have really for a year now in terms of identifying specifics locations that we would like to be able to go and present the story of AstroNova. We have identified some additional conferences that we will earmark and present the story in fiscal ‘17.

I think there will be a lot of information about how the company is being communicated and its capabilities being communicated to a broader investing platform..

And we will now take a follow up from Evan Greenberg with Legend Capital Funds..

Hey, I just wanted to ask about -- I missed the beginning of the call, did you talk about the appointment of April Ondis, what April brings to the table, so we all know? I know she is a large shareholder and I know she has history with the company; I just figured I would ask the question..

Yes, sure, Evan. We didn’t mention that; of course we did do a press release on that election of April to the Board. And as you might be aware, April was the -- is the daughter of the founder of the company, so she has been associated for a long time. She has worked here for a number of years.

She did leave the company this year to pursue other interest. And then the Board did take a look at for qualifications. And one of the main drivers for that really was her deep knowledge as a marketer, so not just in one segment but she’s familiar with all of the segments of the business for a while, headed up the marketing of all of our products.

So, she has deep knowledge of the various market segments which brings a nice dynamic to the Board meetings in terms of her knowledge of the market, the competitors, and strategies that a lot of our competitors are pursuing. So that was the thought process there..

And ladies and gentlemen, this does conclude our question-and-answer session. I would like to turn the conference back over to Mr. Woods for closing comments. Oh, sorry, I do apologize. We have a late person that entered the queue.

Is it okay to take that person?.

Sure..

And Ronald Cohen, [ph] your line is open..

Well, you guys did a great job with the quarter and I’m glad some color participant asked about April Ondis. I’ve known April Ondis for a long time. And I think she’s going to bring a lot to the table as serving on the Board of Astro-Med. She’s quite familiar with the markets, as you expressed to the caller, great.

My question is, I’ve been calling and participating shareholder meetings for a long time. And what I’m seeing is a failure to do anything to increase shareholder value. I know you’re going to conference calls -- conferences , not calls, conferences and trying to get the word out about story about AstroNova.

I was ready to say Astro-Med, so I’ve to get my mindset on the new company name AstroNova. I’d like to know, why you were not increasing the dividend. We have not done a stock split since 2006. And I don’t think we’re doing enough to increase shareholder value.

And I know I’m right because what I’m seeing is the volume is going down and the share price is not moving. It’s down from the high.

And if you went to business school, I took some courses, shares are driven by -- well, they’re driven number one by optimistic views, euphoria I guess would be, I’m little tired, this morning, 6’O clock here in California, and they’re driven by revenue and profits.

You guys are increasing the revenue but our share price is going nowhere and our volume is going nowhere. So, I would like to know what you’re going to do about this. That question is for you, Greg..

Our main focus, quite frankly is on the operational side here and building the business. So, we are not so much focused on quarter-to-quarter. Obviously we’d like to see the highest share price -- in our opinion and we’d like to see it quite a bit higher. But we don’t focus on trying to drive the price up per se.

Fundamentally, in the long run, the price of the stock is a function of the value of the company. And if -- you can see what we’re doing from the financial results, return on invested the capital for this business is much better than where you can get in many other businesses.

So, in the long run, we believe people will see that if we continue to execute on our strategy, build the company and increase the operating profits, and as you saw the free cash flow. If you take the net present value of these cash flows, that’s the true value of the company. And the share price should reflect that.

It may take some time for people to understand that and more people understand that. But we believe that will be case going forward..

My question is why have you not increased the dividend? You keep talking about this great cash flow and we just got $1.8 million cash infusion from the sale of some properties. I just don’t understand why increase our -- I feel our payout ratio as a company on the dividend is too low.

So why don’t you stimulate this -- the share price by increasing the dividend?.

Because -- what we do is -- every Board meeting is -- and I think we’ve talked about this in the past, we do take a look at capital allocation and the Board does discuss that. And we make a decision on a quarter-to-quarter basis on the best use of our capital.

And on a call or in the public domain, we don’t divulge all the possibilities we have for capital deployment. And it’s the Board’s opinion that we have much better usage for the cash and dividends with respect to the total returning for shareholders. And that’s how we make those decisions..

And ladies and gentlemen, this does conclude our question-and-answer session for today. Now, I would like to give the conference back over to Mr. Woods for additional or closing comments..

Great, thank you. Well, with that let me just thank everyone for joining us here this morning. We look forward to keeping you updated on our further progress. And have a wonderful Thanksgiving..

And ladies and gentlemen, this does conclude today’s conference. We do thank you for your participation. Have a wonderful rest of your day..