Brandon Daniel's questions to AstroNova (ALOT) leadership • Q2 2025
Question
The analyst questioned the implied low profitability of MTEX in the FY26 guidance and challenged the rationale of the MTEX acquisition as a better use of capital compared to a share buyback, seeking clarity on future capital allocation and shareholder returns.
Answer
The executive explained the FY26 guidance reflects a delay in the margin improvement timeline due to MTEX's integration challenges. The acquisition's value is in its high-margin technology, which will be integrated into future products. The immediate capital allocation priority is debt repayment and organic investment, with other options like buybacks remaining under consideration.