Good day, and welcome to AstroNova's Quarter 1 Fiscal Year 2018 Earnings Conference Call. Today's conference is being recorded. And at this time, I'd like to turn the call over to David Calusdian. Please go ahead, sir.

Thank you. Good morning, everyone, and thank you for joining us. Hosting this morning's call is Greg Woods, AstroNova President and CEO; and John Jordan, Vice President and CFO. Greg will begin the call by reviewing the company's operating highlights and business outlook. John 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 do not have a copy, please go to the Investors section of the AstroNova website, www.astronovainc.com. Please note that statements made during today's call that are not statements of historical facts 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 and the factors that may cause differences, please see the Risk Factors in the AstroNova annual report on Form 10-K and other filings the company makes with the Securities and Exchange Commission. Now I'll hand the call over to Greg Woods.

Thank you, David. Good morning, everyone. Let me start with a high-level perspective on some of the key takeaways this past quarter and update you on the integration of TrojanLabel, which complements and strengthens our Product Identification segment. To begin with, we're making excellent progress on the integration. In the 14 weeks since acquiring TrojanLabel, we have completed key IT and financial reporting conversions, held sales training meetings for our sales teams around the globe and conducted Kaizen events at TrojanLabel's manufacturing facility. The purpose behind these events was to train and align the TrojanLabel team with the AstroNova Operating System, which is our bedrock for improving efficiency, reducing waste and strengthening processes across the organization. Ensuring that people, processes and technology are in sync enables TrojanLabel to keep pace with the expanded manufacturing volumes we anticipate as we move forward. In addition to completing the financial reporting and IT integrations, we've aligned the company's product roadmaps, integrated the engineering documentation and made good headway on the sales channel integration. AstroNova is a lean and efficient organization, so it should not be surprising that the integration process has taken a fair amount of our time, attention and focus. Whereas our Miltope and RITEC deals were product line acquisitions, in TrojanLabel, we have acquired an entire organization, one base outside of the U.S. Our goal is to finish all of the heavy lifting associated with the integration by the end of this quarter. And I believe we're well on our way towards achieving that objective. From a customer-facing perspective, last week, we showcased the QuickLabel and TrojanLabel product lines side-by-side at the interpack 2017 trade fair in Germany. And our new addition garnered significant customer interest. For those of you who may not be familiar with TrojanLabel, it fits perfectly within…

Thank you, Greg. Good morning, everyone. Revenue in the first quarter increased $348,000 to $24.5 million. Domestic revenue of $15.7 million was down about $1 million from the prior year's first quarter. Revenue from international sales increased 19%, with higher sales in most international markets. Fluctuations in foreign exchange tempered revenue by approximately $314,000. Revenue in the Product Identification segment was $18.6 million in the quarter, 12.3% higher than the first quarter of fiscal 2017, reflecting the contribution of TrojanLabel as well as the continuation of the strong demand for printer supplies. Revenue for the Test & Measurement segment was $5.8 million, below the prior year by 23%, traceable to a transition to our next-generation data acquisition products and the timing of aerospace order releases. By product category, printer supplies posted another solid quarter and increased 11% to $14.8 million, 61% of total revenues. Hardware revenue of $7.3 million was 16.5% lower than last year's first quarter, largely related to order timing, as we ramp up the new products in both Product Identification and Test & Measurement. Revenue from service, parts and repairs was $2.3 million in the quarter, up 16% over the prior year's first quarter. Gross margin in the quarter was 38%, 1.3 percentage points less than the prior year quarter. Gross profit was $9.3 million, off about $167,000 from the prior year quarter. The delta was primarily a function of product mix. Operating expenses of $8.6 million in the first quarter were approximately $674,000 or 7% higher than prior year's first quarter due to the addition of the TrojanLabel workforce. Operating expenses as a percentage of revenue increased to 35.2% in the first quarter of fiscal 2018 from 32.9% in the same period a year earlier. Operating income of $707,000 in the quarter was less than the…

Thank you, John. We expect fiscal 2018 to be strong for AstroNova as we continue to focus on building out our management team, expanding our addressable markets and driving profitable growth. We believe we are well positioned to achieve our long-term financial and operating objectives. With that, John and I will be happy to take your questions. Operator?

[Operator Instructions] Okay. And we'll take our first question.

Tom Spiro, Spiro Capital. A couple of questions. First, Greg, could you update us on the progress of the QL-800? It seemed to get off to a great start last quarter. How's it faring now?

Well, it's being well received by our customers, Tom. So it's -- like I mentioned, I had a little blurb in there, where I talked about the interpack 2017. I was actually out there in Düsseldorf and a very strong interest from the product. As a matter fact, the guys in Europe have -- they're really actually ahead of their sales plan now in the QL-800. But it fits in really nicely because it gives us that wide-format, very high-quality print with very good value proposition on the price of the product.

Do the bookings and backlog numbers that we reported at the end of this quarter include the TrojanLabel bookings and backlog?

They do, yes.

They do? So if I just look at that, back a little bit out of those numbers for TrojanLabel, it would appear that our bookings and backlog, ex TrojanLabel, were something on the order of flattish, perhaps even down a little, but call it flattish versus last year, ex TrojanLabel. Is that -- am I missing something?

Yes, it's kind of in that range. And as we mentioned, you could see in the numbers there. So we're looking at the biggest impact in that was in the Test & Measurement segment, where we had, again, as we've talked about in the past, it tends to be lumpy in terms of aviation releases. So that was the biggest contributor to that.

The bookings in QL-800 remaining strong?

Yes. The 800 is looking very good. It should be -- it's a higher price point than our Kiaro!. So I was going to say it might be up there in that same league, though, in terms of units by the end of the year.

I see. Wow. Well, that's great. That's great. I didn't catch your estimates or projections for the year's revenues and earnings you typically do at the end of Q1. Are you planning to do that or no?

We're going to do that at Q2 this year, mainly having to do with a number of things we have going on right now with the integration. But we're going to do that in Q2. So stay tuned for that, and we'll give you an update in Q2.

[Operator Instructions] And we'll go once again to Tom Spiro with Spiro Capital.

Wow. I guess, it's just me, guys. I wonder if you could give us an update on the progress of the new data acquisition product. It's been several quarters now since they were introduced. How are they faring?

Yes. We're doing well with the deck, the standard DDX100, because the DDX100 is the newer product with the display screen on it. And we've got -- I don't want to steal their thunder, but the guys have a new addition to that product line they're bringing out at the end of May in Germany again at a test and sensor show. So a little bit more that, but it's part of the whole theme of that Daxus product line, is that it's a common platform, but multiple iterations and specific products designed to attack certain niches in the marketplace. So we'll have that. That's actually out ahead of time. We're hoping that that's done by the end of summer. And we'll actually, as I said, display that at the end of May.

That's helpful, Greg. And then just lastly, on the Trojan acquisition. It sound -- Trojan 2 and Trojan 3 sound like the most exciting product at the moment, but which of those 2 do you think has the greater potential?

It's hard for me to quantify between the 2 of them. They're kind of in unique markets, right? So the Trojan 2 is a higher-volume mini press targeted at the label converters commercial printers. A little more traditional, but it fills a gap in that its price point is far below the competition. The Trojan 3 is really a disruptive technology, quite frankly, and we're finding uses for that almost on a daily basis. I mean, one I'll just give you as a reference point is we have some wine manufacturers actually in a couple of different locations now. We can actually print right on the wine boxes on wood directly without any special treatment of the wood prior to the printing. And if you go to the website, you can see pizza boxes, mailing products, envelopes. There's a wide variety of things that people are finding to do with this product. So we could be surprised that, that could jump way ahead, but it's early days and that one still only came out at the fall of last year. But it's pretty exciting to see what people are able to do with it, things that we didn't even think of.

Are they both now available in the United States, Trojan 2 and Trojan 3?

Oh, yes. They're available around the world, actually.

Well, that's great. And lastly, you mentioned the new innovation technology centers. I didn't really appreciate why you're doing that, what the idea is. Could you just give us a little more color, please?

Sure. So if you haven't seen the Trojan 2, of course, it's a pretty good-size product. And not something you can put in the back of a car and drive it to the customer. So that -- we have been toying around with the idea for a while. And that kind of cinched it for us to say, "Look, let's prepare technology centers that have the full range of product." A lot of times people come to see one product, and they leave. And they go home, and they're happy to buy their product. And then they come back to us a few months later to say, I never knew you had such and such. So now, we have all the products in one location. So we can actually do a compare and contrast. We can show different applications. And as I mentioned, these are, you know, not huge facilities. They're typically 1,000 to a few thousand square feet. But they're in high-traffic locations, usually near airports. So customers can fly in or drive in, see the product, have it be professionally demonstrated, running -- for example, the printer industry label printing, they can actually print their products. So on site, try different materials, make the buying decision right there. We can also provide technical support and some customizations. And more and more of our products are -- have software features that allow customization circle to do that on site with the customers.

That sounds great. One other, again, on TrojanLabel. John, what were the acquisition expenses that ran through the income statement this quarter?

They were quite a bit less than $100,000, Tom.

I see. Ex of that, was TrojanLabel a profitable additive to the -- in the quarter?

Before amortization expense, it was pretty close. It was just about breakeven.

How much is amortization expense roughly?

$104,000.

And we'll go to our next question from Scott Lewis with Lewis Capital Management.

I just wanted to ask if the ToughWriter arrangement on the new Chinese aircraft was added exclusive for you guys?

Yes. As we said in the press release, that's an exclusive contract.

And we have no further questions at this time. I'd like to turn the call back to Mr. Woods for any additional or closing remarks.

I'd just like to say thank you for joining us here this morning, and we look forward to keeping you updated on our progress. Have a good day.

This concludes today's conference. We appreciate your participation. You may now disconnect.