Note 16—Nature of Operations, Segment Reporting and Geographical Information

The Company’s operations consist of the design, development, manufacture and sale of specialty printers and data acquisition and analysis systems, including both hardware and software and related consumable supplies. The Company organizes and manages its business as a portfolio of products and services designed around a common theme of data acquisition and information output. The Company has two reporting segments consistent with its revenue product groups: Product Identification (PI) and Test & Measurement (T&M).

The Product Identification segment produces an array of high-technology digital color and monochrome label printers and mini presses, labeling software and consumables for a variety of commercial industries worldwide. AstroNova’s T&M segment produces data acquisition systems used worldwide for a variety of recording, monitoring and troubleshooting applications for many industries including aerospace, automotive, defense, rail, energy, industrial and general manufacturing.

Business is conducted in the United States and through foreign branch offices and subsidiaries in Canada, Europe, China, Southeast Asia and Mexico. Manufacturing activities are primarily conducted in the United States. Revenue and service activities outside the United States are conducted through wholly-owned entities and, to a lesser extent, through authorized distributors and agents. Transfer prices are intended to produce gross profit margins as would be associated with an arms-length transaction.

On September 28, 2017, AstroNova entered into the Honeywell Agreement to acquire the exclusive perpetual world-wide license to manufacture Honeywell’s narrow format flight deck printers for two aircraft families. Revenue from the sales of these printers is reported as part of our T&M segment beginning in the third quarter of fiscal 2018. Refer to Note 3, “Acquisitions,” for further details.

On February 1, 2017, AstroNova completed its acquisition of TrojanLabel. TrojanLabel is reported as part of our Product Identification segment beginning with the first quarter of fiscal 2018. Refer to Note 3, “Acquisitions,” for further details.

The accounting policies of the reporting segments are the same as those described in the summary of significant accounting policies herein. The Company evaluates segment performance based on the segment profit before corporate and financial administration expenses.

Summarized below are the revenue and segment operating profit (both in dollars and as a percentage of revenue) for each reporting segment:


($ in thousands)	Revenue						Segment Operating Profit						Segment Operating Profit as a % of Revenue
	2019		2018		2017		2019		2018		2017		2019			2018			2017
Product Identification	$	86,786	$	81,681	$	69,862	$	7,910	$	10,561	$	9,821		9.1	%		12.9	%		14.1	%
T&M		49,871		31,720		28,586		11,933		3,754		4,399		23.9	%		11.8	%		15.4	%

Total	$	136,657	$	113,401	$	98,448		19,843		14,315		14,220		14.5	%		12.6	%		14.4	%

Corporate Expenses								11,123		8,903		7,939

Operating Income								8,720		5,412		6,281
Other Income (Expense), Net								(1,412)		(255)		324

Income Before Income Taxes								7,308		5,157		6,605
Income Tax Provision								1,578		1,871		2,377

Net Income							$	5,730	$	3,286	$	4,228

No customer accounted for greater than 10% of net revenue in fiscal 2019, 2018 and 2017.

Other information by segment is presented below:


(In thousands)	Assets
	2019		2018
Product Identification	$	49,091	$	49,832
T&M		62,250		60,579
Corporate*		7,642		11,902

Total	$	118,983	$	122,313

*	Corporate assets consist principally of cash, cash equivalents and securities available for sale.


(In thousands)	Depreciation and Amortization						Capital Expenditures
	2019		2018		2017		2019		2018		2017
Product Identification	$	1,888	$	1,536	$	885	$	1,935	$	1,497	$	767
T&M		4,264		2,458		1,546		710		707		471

Total	$	6,152	$	3,994	$	2,431	$	2,645	$	2,204	$	1,238

Geographical Data

Presented below is selected financial information by geographic area:


(In thousands)	Revenue						Long-Lived Assets*
	2019		2018		2017		2019		2018
United States	$	83,668	$	69,795	$	69,850	$	36,750	$	39,432
Europe		31,574		29,948		18,848		3,223		3,808
Asia		8,207		3,808		1,664		—		—
Canada		6,692		5,373		5,008		81		145
Central and South America		4,147		3,402		3,053		—		—
Other		2,369		1,075		25		—		—

Total	$	136,657	$	113,401	$	98,448	$	40,054	$	43,385

*	Long-lived assets excludes goodwill assigned to the T&M segment of $4.5 million at both January 31, 2019 and 2018 and $7.8 million assigned to the PI segment at January 31, 2019.