Cover Page - USD ($)	12 Months Ended
Cover Page - USD ($)	Jan. 31, 2020	Apr. 03, 2020	Aug. 02, 2019
Cover [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Jan. 31, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Entity Registrant Name	AstroNova, Inc.
Entity Central Index Key	0000008146
Current Fiscal Year End Date	--01-31
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Well-known Seasoned Issuer	No
Entity Filer Category	Accelerated Filer
Trading Symbol	ALOT
Entity Shell Company	false
Entity Small Business	true
Entity Emerging Growth Company	false
Title of 12(b) Security	Common Stock
Security Exchange Name	NASDAQ
Document Annual Report	true
Document Transition Report	false
Entity Address, State or Province	RI
Entity Public Float			$ 158,496,000
Entity Common Stock, Shares Outstanding		7,097,000

Consolidated Balance Sheets - USD ($) $ in Thousands	Jan. 31, 2020	Jan. 31, 2019
CURRENT ASSETS
Cash and Cash Equivalents	$ 4,249	$ 7,534
Accounts Receivable, net of reserves of $856 in 2020 and $521 in 2019	19,784	23,486
Inventories	33,925	30,161
Prepaid Expenses and Other Current Assets	2,193	1,427
Total Current Assets	60,151	62,608
Property, Plant and Equipment, net	11,268	10,380
Identifiable Intangibles, net	25,383	29,674
Goodwill	12,034	12,329
Deferred Tax Assets, net	5,079	2,928
Right of Use Asset	1,661
Other	1,088	1,064
TOTAL ASSETS	116,664	118,983
CURRENT LIABILITIES
Accounts Payable	4,409	5,956
Accrued Compensation	2,700	5,023
Other Accrued Expenses	4,711	2,911
Revolving Credit Facility	6,500	1,500
Current Portion of Long-Term Debt	5,208	5,208
Current Liability — Royalty Obligation	2,000	1,875
Current Liability — Excess Royalty Payment Due	773	1,265
Deferred Revenue	466	373
Income Taxes Payable		554
Total Current Liabilities	26,767	24,665
NON CURRENT LIABILITIES
Long-Term Debt, net of current portion	7,715	12,870
Royalty Obligation, net of current portion	8,012	9,916
Lease Liabilities, net of current portion	1,279
Deferred Tax Liabilities	435	40
Other Long-Term Liabilities	1,081	1,717
TOTAL LIABILITIES	45,289	49,208
Commitments and Contingencies (See Note 19)
SHAREHOLDERS' EQUITY
Preferred Stock, $10 Par Value, Authorized 100,000 shares, None Issued
Common Stock, $0.05 Par Value, Authorized 13,000,000 shares; Issued 10,343,610 shares in 2020 and 10,218,559 shares in 2019	517	511
Additional Paid-in Capital	56,130	53,568
Retained Earnings	49,298	49,511
Treasury Stock, at Cost, 3,281,701 shares in 2020 and 3,261,672 shares in 2019	(33,477)	(32,997)
Accumulated Other Comprehensive Loss, net of tax	(1,093)	(818)
TOTAL SHAREHOLDERS' EQUITY	71,375	69,775
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 116,664	$ 118,983

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jan. 31, 2020	Jan. 31, 2019
Statement of Financial Position [Abstract]
Accounts Receivable, Reserves	$ 856	$ 521
Preferred Stock, Par Value	$ 10	$ 10
Preferred Stock, Shares Authorized	100,000	100,000
Preferred Stock, Shares Issued	0	0
Common Stock, Par Value	$ 0.05	$ 0.05
Common Stock, Shares Authorized	13,000,000	13,000,000
Common Stock, Shares Issued	10,343,610	10,218,559
Treasury Stock, Shares	3,281,701	3,261,672

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Income Statement [Abstract]
Revenue	$ 133,446	$ 136,657	$ 113,401
Cost of Revenue	84,688	82,658	69,399
Gross Profit	48,758	53,999	44,002
Costs and Expenses:
Selling and Marketing	26,884	26,343	22,234
Research and Development	8,084	7,813	7,453
General and Administrative	11,357	11,123	8,903
Operating Expenses	46,325	45,279	38,590
Operating Income	2,433	8,720	5,412
Other Expense:
Interest Expense	(826)	(876)	(402)
Investment Income	143	145	168
Other, Net	(380)	(681)	(21)
Other Expense, net	(1,063)	(1,412)	(255)
Income before Income Taxes	1,370	7,308	5,157
Income Tax Provision (Benefit)	(389)	1,578	1,871
Net Income	$ 1,759	$ 5,730	$ 3,286
Net Income Per Common Share—Basic	$ 0.25	$ 0.83	$ 0.48
Net Income Per Common Share—Diluted	$ 0.24	$ 0.81	$ 0.47
Weighted Average Number of Common Shares Outstanding—Basic	7,024	6,881	6,911
Dilutive Effect of Common Stock Equivalents	214	203	104
Weighted Average Number of Common Shares Outstanding—Diluted	7,238	7,084	7,015

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Statement of Comprehensive Income [Abstract]
Net Income	$ 1,759	$ 5,730	$ 3,286
Other Comprehensive Income (Loss), net of taxes and reclassification adjustments:
Foreign Currency Translation Adjustments	(133)	(671)	867
Change in Value of Derivatives Designated as Cash Flow Hedge	122	622	(1,036)
(Gains) Losses from Cash Flow Hedges Reclassified to Income Statement	(264)	(600)	1,048
Unrealized Gain (Loss) on Securities Available for Sale			5
Realized Gain on Securities Available for Sale Reclassified to Income Statement		3
Other Comprehensive Income (Loss)	(275)	(646)	884
Comprehensive Income	$ 1,484	$ 5,084	$ 4,170

Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Beginning Balance at Jan. 31, 2017	$ 70,537	$ 492	$ 47,524	$ 44,358	$ (20,781)	$ (1,056)
Beginning Balance, Shares at Jan. 31, 2017		9,834,906
Share-Based Compensation	1,583		1,583
Employee Option Exercises	$ 642	$ 4	913		(275)
Employee Option Exercises, Shares	84,025	90,042
Restricted Stock Awards Vested, net	$ (103)	$ 4	(4)		(103)
Restricted Stock Awards Vested, net, Shares		71,172
Repurchase of Common Stock	(11,238)				(11,238)
Common Stock – cash dividend	(1,944)			(1,944)
Net Income	3,286			3,286
Other Comprehensive Income (Loss)	884					884
Ending Balance at Jan. 31, 2018	63,647	$ 500	50,016	45,700	(32,397)	(172)
Ending Balance, Shares at Jan. 31, 2018		9,996,120
Share-Based Compensation	1,886		1,886
Employee Option Exercises	$ 1,310	$ 7	1,669		(366)
Employee Option Exercises, Shares	150,125	150,125
Restricted Stock Awards Vested, net	$ (233)	$ 4	(3)		(234)
Restricted Stock Awards Vested, net, Shares		72,314
Reclassification due to adoption of ASU 2018-02	14			14
Common Stock – cash dividend	(1,933)			(1,933)
Net Income	5,730			5,730
Other Comprehensive Income (Loss)	(646)					(646)
Ending Balance at Jan. 31, 2019	69,775	$ 511	53,568	49,511	(32,997)	(818)
Ending Balance, Shares at Jan. 31, 2019		10,218,559
Share-Based Compensation	1,775		1,775
Employee Option Exercises	$ 782	$ 3	790		(11)
Employee Option Exercises, Shares	57,175	65,121
Restricted Stock Awards Vested, net	$ (469)	$ 3	(3)		(469)
Restricted Stock Awards Vested, net, Shares		59,930
Common Stock – cash dividend	(1,972)			(1,972)
Net Income	1,759			1,759
Other Comprehensive Income (Loss)	(275)					(275)
Ending Balance at Jan. 31, 2020	$ 71,375	$ 517	$ 56,130	$ 49,298	$ (33,477)	$ (1,093)
Ending Balance, Shares at Jan. 31, 2020		10,343,610

Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Statement of Stockholders' Equity [Abstract]
Cash dividend per share	$ 0.28	$ 0.28	$ 0.28

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2018
Cash Flows from Operating Activities:
Net Income	$ 1,759	$ 5,730	$ 3,286
Adjustments to Reconcile Net Income to Net Cash Provided By Operating Activities:
Depreciation and Amortization	6,284	6,152	3,994
Amortization of Debt Issuance Costs	49	51	34
Share-Based Compensation	1,775	1,886	1,583
Deferred Income Tax Provision (Benefit)	(1,638)	(1,638)	744
Changes in Assets and Liabilities, Net of Impact of Acquisitions:
Accounts Receivable	3,594	(1,493)	(4,722)
Inventories	(3,938)	(2,872)	(5,509)
Accounts Payable and Accrued Expenses	(2,732)	(2,342)	5,207
Income Taxes Payable	(1,773)	(151)	(801)
Other	(156)	(318)	(92)
Net Cash Provided by Operating Activities	3,224	5,005	3,724
Cash Flows from Investing Activities:
Proceeds from Sales/Maturities of Securities Available for Sale		1,511	5,539
Purchases of Securities Available for Sale			(321)
Cash Paid for TrojanLabel Acquisition, Net of Cash Acquired			(9,007)
Cash Paid for Honeywell Asset Purchase and License Agreement		(400)	(14,873)
Payments Received on Line of Credit and Note Receivable			85
Additions to Property, Plant and Equipment	(2,906)	(2,645)	(2,204)
Net Cash Used by Investing Activities	(2,906)	(1,534)	(20,781)
Cash Flows from Financing Activities:
Net Proceeds from Common Shares Issued Under Employee Benefit Plans and Employee Stock Option Plans, Net of Payment of Minimum Tax Withholdings	313	1,077	539
Purchase of Treasury Stock			(11,238)
Proceeds from Issuance of Long-Term Debt			24,200
Borrowings under Revolving Credit Facility, net	5,000	1,500
Change in TrojanLabel Earn Out Liability			(1,438)
Payment of Minimum Guarantee Royalty Obligation	(1,875)	(1,625)
Principal Payments on Long-Term Debt	(5,208)	(5,130)	(828)
Payments of Debt Issuance Costs			(234)
Dividends Paid	(1,972)	(1,933)	(1,944)
Net Cash (Used) Provided by Financing Activities	(3,742)	(6,111)	9,057
Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents	139	(3)	79
Net Decrease in Cash and Cash Equivalents	(3,285)	(2,643)	(7,921)
Cash and Cash Equivalents, Beginning of Year	7,534	10,177	18,098
Cash and Cash Equivalents, End of Year	4,249	7,534	10,177
Supplemental Information:
Cash Paid During the Period for Interest	531	636	246
Cash Paid During the Period for Income Taxes, Net of Refunds	2,913	3,472	1,940
Schedule of non-cash financing activities:
Value of Shares Received in Satisfaction of Option Exercise Price	$ 11	$ 366	$ 275

Summary of Significant Accounting Policies

12 Months Ended

Jan. 31, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 1—Summary of Significant Accounting Policies

Basis of Presentation:

The accompanying financial data have been prepared by us pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and are presented in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Our fiscal year end is January 31. Unless otherwise stated, all years and dates refer to our fiscal year.

Principles of Consolidation:

The consolidated financial statements include the accounts of AstroNova, Inc. and its subsidiaries. All material intercompany accounts and transactions are eliminated in consolidation.

Reclassification:

Certain amounts in prior year’s financial statements have been reclassified to conform to the current year’s presentation.

Use of Estimates:

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect these financial statements and accompanying notes. Some of the more significant estimates relate to the allowances for doubtful accounts, inventory valuation, valuation and estimated lives of intangible assets, impairment of long-lived assets, goodwill, income taxes, share-based compensation and warranty reserves. Management’s estimates are based on the facts and circumstances available at the time estimates are made, past 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.

Cash and Cash Equivalents:

Highly liquid investments with an original maturity of 90 days or less are considered to be cash equivalents. Similar investments with original maturities beyond three months are classified as securities available for sale. At January 31, 2020 and 2019, $3.4 million and $3.9 million, respectively, was held in foreign bank accounts.

Inventories:

Inventories are stated at the lower of cost

(first-in,

first-out)

or net realizable value and include material, labor and manufacturing overhead.

Property, Plant and Equipment:

Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is provided on the straight-line basis over the estimated useful lives of the assets (land improvements—10 to 20 years; buildings and leasehold improvements—10 to 45 years; machinery and equipment—3 to 10 years and computer equipment and software—3 to 10 years).

Revenue Recognition:

On February 1, 2018 we adopted Accounting Standards Update (“ASU”)

2014-09, “Revenue

from Contracts with Customers (“Topic 606”),” which superseded nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of Topic 606 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. Topic 606 defines a five step process to recognize revenue and requires more judgment and estimates within the revenue recognition process than required under previous U.S. GAAP, which includes identifying contracts with customers, identifying performance obligations in the contract, determining and estimating the amount of any variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation and recognizing revenue when the entity satisfies each performance obligation.

We adopted this standard using the modified retrospective method and have applied the guidance to all contracts within the scope of Topic 606 as of the February 1, 2018 adoption date. Under Topic 606, based on the nature of our contracts and consistent with prior practice, we recognize most of our revenue upon shipment, which is when the performance obligation has been satisfied. Accordingly, the adoption of this standard did not have a material impact on our revenue recognition and there was no cumulative effective adjustment as of February 1, 2018 as a result of the adoption of Topic 606.

The vast majority of our revenue is generated from the sale of distinct products. Revenue is measured as the amount of consideration we expect to receive in exchange for such products, which is generally at the contractually stated prices, and is recognized when we satisfy a performance obligation by transferring control of a product to a customer. The transfer of control generally occurs at one point in time, upon shipment, when title and risk of loss pass to the customer. Returns and customer credits are infrequent and are recorded as a reduction to revenue. Sales taxes and value added taxes collected concurrently with revenue generating activities are excluded from revenue.

Many of the contracts entered into with customers are commonly comprised of a combination of equipment, supplies, installation and/or training services. We determine performance obligations by assessing whether the products or services are distinct from other elements of the contract. In order to be distinct, the product must perform either on its own or with readily available resources and must be separate within the context of the contract.

Most of our hardware products contain embedded operating systems and data management software which is included in the purchase price of the equipment. The software is deemed incidental to the systems as a whole, as it is not sold or marketed separately, and its production costs are minor compared to those of the hardware system. Hardware and software elements are typically delivered at the same time and are accounted for as a single performance obligation for which revenue is recognized at the point in time when ownership is transferred to the customer.

Installation and training services vary based on certain factors such as the complexity of the equipment, staffing availability in a geographic location and customer preferences, and can range from a few days to a few months. The delivery of installation and training services are not assessed to determine whether they are separate performance obligations, as the amounts are not material to the contract.

Shipping and handling activities that occur after control over a product has transferred to a customer are accounted for as fulfillment activities rather than performance obligations, as allowed under a practical expedient provided by Topic 606. The shipping and handling fees charged to customers are recognized as revenue and the related costs are included in cost of revenue at the point in time when ownership of the product is transferred to the customer.

We may perform service at the request of the customer, generally for the repair and maintenance of products previously sold. These services are short in duration, typically less than one month, and total less than 10% of revenue for the year ended January 31, 2020. Revenue is recognized as services are rendered and accepted by the customer. We also provide service agreements on certain of our Product Identification equipment. Service agreements are purchased separately from the equipment and provide for the right to obtain service and maintenance on the equipment for a period of typically one to two years. Accordingly, revenue on these agreements is recognized over the term of the agreements. The portion of service agreement contracts that are uncompleted at the end of any reporting period are included in deferred revenue.

We generally provide warranties for our products. The standard warranty period is typically 12 months for most hardware products except for airborne printers, which typically have warranties that extend for

4-5

years, consistent with industry practice. Such assurance-type warranties are not deemed to be separate performance obligations from the hardware product and costs associated with providing the warranties are accrued in accordance with ASC 450, “Contingencies,” as we have the ability to ascertain the likelihood of the liability and can reasonably estimate the amount of the liability. Our estimate of costs to service the warranty obligations is based on historical experience and expectations of future conditions. To the extent that our experience in warranty claims or costs associated with servicing those claims differ from the original estimates, revisions to the estimated warranty liability are recorded at that time, with an offsetting adjustment to cost of revenue. On occasion, customers request a warranty period longer than our standard warranty. In those instances, in which extended warranty services are separately quoted to the customer, an additional performance obligation is created, and the associated revenue is deferred and recognized as service revenue ratably over the term of the extended warranty period. The portion of service contracts and extended warranty services agreements that are uncompleted at the end of any reporting period are included in deferred revenue.

We recognize an asset for the incremental direct costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. There has been no change in the Company’s accounting for these contracts as a result of the adoption of Topic 606. Costs related to obtaining sales contracts for our aerospace printer products have been capitalized and are being amortized based on the forecasted number of units sold over the estimated benefit term. We apply the practical expedient to expense costs incurred for costs to obtain a contract when the amortization period would have been less than a year These costs include sales commissions paid to the internal direct sales team as well as to third-party representatives and distributors. Contractual agreements with each of these parties outline commission structures and rates to be paid. Generally speaking, the contracts are all individual procurement decisions by the customers and do not include renewal provisions and as such the majority of the contracts have an economic life of significantly less than a year.

Accounts Receivables and Allowance for Doubtful Accounts:

Standard payment terms are typically 30 days after shipment but vary by type and geographic location of our customer. Credit is extended based upon an evaluation of the customer’s financial condition. In circumstances where we are aware of a customer’s inability to meet its financial obligations, an allowance is established. The remainder of the allowance established is based on a variety of factors, including the age of amounts outstanding relative to their contractual due date, historical

write-off

experience and current market assessments. Accounts receivable are stated at their estimated net realizable value.

Research and Development Costs:

We charge costs to expense in the period incurred, and these expenses are presented in the consolidated statement of income. The following costs are included in research and development expense: salaries and benefits, external engineering service costs, engineering related information costs and supplies.

Foreign Currency Translation:

The financial statements of foreign subsidiaries and branches are measured using the local currency as the functional currency. Foreign currency-denominated assets and liabilities are translated into U.S. dollars at

year-end

exchange rates with the translation adjustment recorded as a component of accumulated comprehensive income (loss) in shareholders’ equity. Revenues and expenses are translated at the average monthly exchange rates in effect during the related period. We do not provide for U.S. income taxes on foreign currency translation adjustments associated with our subsidiaries in Germany, Denmark and China since their undistributed earnings are considered to be permanently invested. Our net transactional foreign exchange losses included in the consolidated statements of income were $0.4 million in fiscal 2020, $0.7 million in fiscal 2019 and $0.2 million for fiscal 2018.

Advertising:

The Company expenses advertising costs as incurred. Advertising costs including advertising production, trade shows and other activities are designed to enhance demand for our products and amounted to approximately $1.8 million; $1.9 million and $1.8 million in fiscal 2020, 2019 and 2018, respectively.

Long-Lived Assets:

Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. If the projected undiscounted cash flows are less than the carrying value, then an impairment charge would be recorded for the excess of the carrying value over the fair value, as determined by the discounting of future cash flows. For 2020, 2019 and 2018, there were no impairment charges for long-lived assets.

Intangible Assets:

Intangible assets include the value of customer and distributor relationships, existing technology and

non-competition

agreements acquired in connection with business and asset acquisitions and are stated at cost (fair value at acquisition) less accumulated amortization. These intangible assets have a definite life and are amortized over the assets’ useful lives using a systematic and rational basis which is representative of the assets’ use. Intangible assets with a definite life are tested for impairment whenever events or circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable. If necessary, an impairment loss is recognized when the carrying amount of an asset exceeds the estimated undiscounted cash flows used in determining the fair value of the asset. The amount of the impairment loss recorded is calculated by the excess of the asset’s carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis. For 2020, 2019 and 2018, there were no impairment charges for intangible assets.

Goodwill:

Management evaluates the recoverability of goodwill annually or more frequently if events or changes in circumstances, such as declines in revenue, earnings or cash flows, or material adverse changes in the business climate indicate that the carrying value of an asset might be impaired. Goodwill is tested for impairment at the reporting unit level. A reporting unit is an operating segment, or a business unit one level below an operating segment if discrete financial information for that business is prepared and regularly reviewed by segment management. However, components within an operating segment are aggregated as a single reporting unit if they have similar economic characteristics. We determined that each of our operating segments (Product Identification and T&M) represents a reporting unit for purposes of goodwill impairment testing.

The accounting guidance related to goodwill impairment testing allows for the performance of an optional qualitative assessment of whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. Factors that management considers in this qualitative assessment include macroeconomic conditions, industry and market considerations, overall financial performance (both current and projected), changes in management and strategy and changes in the composition or carrying amount of net assets. If this qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then a quantitative assessment is required for the reporting unit. The quantitative assessment compares the fair value of the reporting unit with its carrying value. We estimate the fair value of our reporting units using the income approach based upon a discounted cash flow model. We believe that this approach is appropriate because it provides a fair value estimate based upon the reporting unit’s expected long-term operating cash flow performance. In addition, the Company uses the market approach, which compares the reporting unit to publicly traded companies and transactions involving similar business, to support the conclusions based upon the income approach. The income approach requires the use of many assumptions and estimates including future revenue, expenses, capital expenditures, and working capital, as well as discount factors and income tax rates. If the fair value of the reporting unit exceeds the carrying value of the net assets including goodwill assigned to that unit, goodwill is not impaired. If the carrying value of the reporting unit’s net assets including goodwill exceeds the fair value of the reporting unit, then we record an impairment charge based on that difference.

We performed a qualitative assessment for our fiscal 2020 analysis of goodwill. Based on this assessment, management does not believe that it is more likely than not that the carrying values of the reporting units exceed their fair values. Accordingly, no quantitative assessment was performed, as management believes that there are no impairment issues in regard to goodwill at this time.

Leases:

On February 1, 2019 the Company adopted ASC 842, Leases. This new guidance requires a lessee to recognize assets and liabilities on the balance sheet for all leases, with the result being the recognition of a right of use (ROU) asset and a lease liability. The lease liability is equal to the present value of the minimum lease payments for the term of the lease, including any optional renewal periods determined to be reasonably certain to be exercised, using a discount rate determined at lease commencement. This discount rate is the rate implicit in the lease, if known; otherwise, the incremental borrowing rate for the expected lease term is used. The Company’s incremental borrowing rate approximates the rate the Company would have to pay to borrow on a collateralized basis over a similar term at lease inception. The value of the ROU asset is equal to the initial measurement of the lease liability plus any lease payments made to the lessor at or before the commencement date and any unamortized initial direct costs incurred by the lessee, less any unamortized lease incentives received. Several of the Company’s lease contracts include options to extend the lease term and the Company includes the renewal options for these leases in the determination of the ROU asset and lease liability when the likelihood of renewal is determined to be reasonably certain.

The Company enters into lease contracts for certain of its facilities at various locations worldwide. At inception of a contract, the Company determines whether the contract is or contains a lease. If the Company has a right to obtain substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the asset, then the contract contains a lease.

There are two types of leases, operating leases and finance leases. Lease classification is determined at lease commencement. The Company has made an accounting policy election to apply the short-term exception, which does not require the capitalization of leases with terms of 12 months or less. All of the Company’s leases are classified as operating leases. Operating lease expense is recognized on a straight-line basis over the lease term and included in general and administrative expense on the consolidated statement of income. ROU assets are classified in other long-term assets, short-term lease liabilities are classified in other current liabilities, and long-term lease liabilities are classified in other long-term liabilities on the consolidated balance sheet at January 31, 2020. On the statement of cash flow, payments for operating leases are classified as operating activities for the year ending January 31, 2020.

In addition, several of our lease agreements include

non-lease

components for items such as common area maintenance and utilities which are accounted for separately from the lease component.

Income Taxes:

We use the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting basis and tax basis of the assets and liabilities and are measured using statutory tax rates that will be in effect when the differences are expected to reverse. The Company’s deferred taxes are presented as

non-current

in the accompanying consolidated balance sheet. An allowance against deferred tax assets is recognized when it is

more-likely-than-not

that some portion or all of the deferred tax assets will not be realized. At January 31, 2020 and 2019, a valuation allowance was provided for deferred tax assets attributable to certain

domestic

R&D credit carryforwards. In addition, during fiscal 2020, the Company provided a valuation allowance for deferred tax assets attributable to foreign tax credit carryforwards and net operating loss carryforwards in China, both of which would expire unused.

AstroNova accounts for uncertain tax positions in accordance with the guidance provided in ASC 740, “Accounting for Income Taxes.” This guidance describes a recognition threshold and measurement attribute for the financial statement disclosure of tax positions taken or expected to be taken in a tax return and requires recognition of tax benefits that satisfy a

more-likely-than-not

threshold. ASC 740 also provides guidance on

de-recognition,

classification, interest and penalties, accounting in interim periods and disclosure.

On December 22, 2017, the 2017 Tax Cuts and Jobs Act (“Tax Act”) was enacted into law and the new legislation contains several key tax provisions that affected us, including a

one-time

mandatory transition tax on accumulated foreign earnings and a reduction of the corporate income tax rate to 21% effective January 1, 2018, among others. We are required to recognize the effect of the tax law changes in the period of enactment, such as determining the transition tax, remeasuring our U.S. deferred tax assets and liabilities as well as reassessing the net realizability of our deferred tax assets and liabilities. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), which allows us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. All accounting under SAB 118 was finalized during the quarter ending January 31, 2019 with no material changes from the provisional amounts previously recorded.

Net Income Per Common Share:

Basic net income per share is based on the weighted average number of shares outstanding during the period. Diluted net income per share is based on the basic weighted average number of shares and potential common equivalent shares for stock options, restricted stock awards and restricted stock units outstanding during the period using the treasury stock method. In fiscal years 2020, 2019 and 2018, there were 202,187, 326,275 and 675,600, respectively, of common equivalent shares that were not included in the computation of diluted net income per common share because their inclusion would be anti-dilutive.

Fair Value Measurement:

We measure our financial assets at fair value on a recurring basis in accordance with the guidance provided in ASC 820, “Fair Value Measurement and Disclosures,” which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In addition, ASC 820 establishes a three-tiered hierarchy for inputs used in management’s determination of fair value of financial instruments that emphasizes the use of observable inputs over the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that reflect management’s belief about the assumptions market participants would use in pricing a financial instrument based on the best information available in the circumstances.

The fair value hierarchy is summarized as follows:

•

Level 1—Quoted prices in active markets for identical assets or liabilities;

•

Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

•

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities

Cash and cash equivalents, accounts receivable, accounts payable, accrued compensation, other accrued expenses and income tax payable are reflected in the consolidated balance sheet at carrying value, which approximates fair value due to the short-term nature of these instruments.

Self-Insurance:

We are self-insured for

U.S.

medical and dental benefits for qualifying employees and maintain stop-loss coverage from a third party which limits our exposure to large claims. We record a liability associated with these benefits that includes an estimate of both claims filed and losses incurred but not yet reported based on historical claims experience. In estimating this accrual, we utilize an independent third-party broker to estimate expected losses, which are based on analyses of historical data. Assumptions are closely monitored and adjusted when warranted by changing circumstances. Our liability for self-insured claims is included within accrued compensation in our consolidated balance sheets and was $0.6 million and $0.1 million, as of January 31, 2020 and 2019.

Share-Based Compensation:

Share-based compensation expense is measured based on the estimated fair value of the share-based award when granted and is recognized as an expense over the requisite service period (generally the vesting period of the equity grant). We have estimated the fair value of each option on the date of grant using the Black-Scholes option-pricing model. Our estimate of share-based compensation requires several complex and subjective assumptions including our stock price volatility, employee exercise patterns (expected life of the options), the risk-free interest rate and the Company’s dividend yield. The stock price volatility assumption is based on the historical weekly price data of our common stock over a period equivalent to the weighted average expected life of our options. Management evaluated whether there were factors during that period which were unusual and would distort the volatility figure if used to estimate future volatility and concluded that there were no such factors. In determining the expected life of the option grants, the Company has observed the actual terms of prior grants with similar characteristics and the actual vesting schedule of the grant and has assessed the expected risk tolerance of different option groups. The risk-free interest rate is based on the actual U.S. Treasury zero coupon rates for bonds matching the expected term of the option as of the option grant date. The dividend assumption is based upon the prior year’s average dividend yield. No compensation expense is recognized for options that are forfeited for which the employee does not render the requisite service. Our accounting for share-based compensation for restricted stock awards (RSA) and restricted stock units (RSU) is also based on the fair value method. The fair value of the RSUs and RSAs is based on the closing market price of the Company’s common stock on the grant date. Reductions in compensation expense associated with forfeited awards are estimated at the date of grant, and this estimated forfeiture rate is adjusted periodically based on actual forfeiture experience.

Cash flow from tax deductions in excess of the compensation cost recognized for those options (excess tax benefits) is classified with other income tax cash flows as an operating activity.

Share-based compensation becomes deductible for determining income taxes when the related award vests, is exercised, or is forfeited depending on the type of share-based award and subject to relevant tax law.

Derivative Financial Instruments:

The Company uses derivative instruments as part of its overall strategy to manage its exposure to market risks primarily associated with fluctuations in foreign currency exchange rates and interest rates. Derivative instruments are recognized as either assets or liabilities in the balance sheet at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in the statement of income during the current period. For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation.

For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income (OCI) and reclassified into earnings in the same line item associated with the forecasted transaction, and in the same period or periods during which the hedged transaction affects earnings (e.g., in “Interest Expense” when the hedged transactions are interest cash flows associated with floating-rate debt, or “Other, Net” for portions reclassified relating to the remeasurement of the debt). The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of future cash flows of the hedged item, if any, are recognized in the statement of income during the current period.

Recent Accounting Pronouncements

Recently Adopted:

Leases

In February 2016, the Financial Accounting Standards Board (“FASB”) issued

ASU2016-02,

“Leases (Topic 842).” ASU

2016-02

and its subsequent amendments superseded previous guidance related to accounting for leases and are intended to increase transparency and comparability among organizations by requiring lessees to recognize assets and liabilities in the balance sheet for operating leases with lease terms greater than twelve months. The updates also require improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases.

The Company applied ASU

2016-02

to all leases in effect at February 1, 2019 and adopted this standard using the

non-comparative

transition option, which does not require the restatement of prior years. Accordingly, comparative information has not been adjusted and continues to be reported under the previous accounting guidance. The Company has elected the package of practical expedients, which allows entities to not reassess (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. Also, the Company has made an accounting policy election to apply the short-term exception, which does not require the capitalization of leases with terms of 12 months or less. On February 1, 2019, the Company recognized $2.0 million of Right of Use (“ROU”) assets and lease liabilities on its consolidated balance sheet and currently has $1.7 million of ROU assets as of January 31, 2020. The adoption did not have a material impact on the Company’s results of operations or cash flows.

Recent Accounting Standards Not Yet Adopted:

Fair Value Measurement

In August 2018, the FASB issued ASU

2018-13, “Fair

Value Measurement (Topic 820), Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement.” ASU

2018-13

modifies the disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures. This ASU is effective for annual periods beginning after December 15, 2019 including interim periods within those fiscal years (Q1 fiscal 2021 for AstroNova), with early adoption permitted. The provisions of ASU

2018-13

relating to changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. The remaining provisions should be applied retrospectively to all periods presented upon their effective date. This standard is not expected to have a material impact on the Company’s consolidated financial statements and related disclosures.

No other new accounting pronouncements, issued or effective during fiscal 2020, have had or are expected to have a material impact on our consolidated financial statements.

Revenue Recognition

12 Months Ended

Jan. 31, 2020

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Note 2—Revenue Recognition

We derive revenue from the sale of (i) hardware including, digital color label printers and specialty OEM printing systems, portable data acquisition systems and airborne printers used in the flight deck and in the cabin of military, commercial and business aircraft, (ii) related consumable supplies including paper, labels, tags, inks, toners and ribbons, (iii) repairs and maintenance of equipment and (iv) service agreements.

Revenues disaggregated by primary geographic markets and major product types are as follows:

Primary geographical markets:


	Year Ended
(In thousands)	January 31, 2020		January 31, 2019		January 31, 2018
United States	$	83,671	$	83,668	$	69,795
Europe		29,617		31,574		29,948
Asia		8,316		8,207		3,808
Canada		5,719		6,692		5,373
Central and South America		4,145		4,147		3,402
Other		1,978		2,369		1,075

Total Revenue	$	133,446	$	136,657	$	113,401

Major product types:


	Year Ended
(In thousands)	January 31, 2020		January 31, 2019		January 31, 2018
Hardware	$	48,959	$	53,207	$	37,501
Supplies		71,838		71,178		65,265
Service and Other		12,649		12,272		10,635

Total Revenue	$	133,446	$	136,657	$	113,401

Contract Assets and Liabilities

We normally do not have contract assets, which are primarily unbilled accounts receivable that are conditional on something other than the passage of time. Our contract liabilities, which represent billings in excess of revenue recognized, are related to advanced billings for purchased service agreements and extended warranties. Contract liabilities were $466,000 and $373,000 at January 31, 2020 and January 31, 2019, respectively and are recorded as deferred revenue in the consolidated balance sheet. During the year ended January 31, 2020, the Company recognized $361,000 of revenue that was included in the contract liability balance at the beginning of the period.

Contract Costs

We have determined that certain costs related to obtaining sales contracts for our aerospace printer products meet the requirement to be capitalized. These costs are deferred and amortized based on the forecasted number of units sold over the estimated benefit term. The balance of these contract assets at January 31, 2019 was $903,000 of which $109,000 was reported in other current assets and $794,000 was reported in other assets in the consolidated balance sheet. In fiscal 2020, the Company incurred an additional $120,000 in incremental direct costs which were deferred. Amortization of incremental direct costs was $79,000 for the period ended January 31, 2020. The balance of the deferred incremental direct contract costs net of accumulated amortization at January 31, 2020 is $944,000, of which $59,000 was reported in other current assets and $885,000 was reported in other assets in the consolidated balance sheet. The contract costs are expected to be amortized over the estimated remaining period of benefit, which we currently estimate to be approximately 6 years.

Intangible Assets

12 Months Ended

Jan. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Note 3—Intangible Assets

Intangible assets are as follows:


	January 31, 2020									January 31, 2019
(In thousands)	Gross Carrying Amount		Accumulated Amortization			Currency Translation Adjustment		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Currency Translation Adjustment		Net Carrying Amount
Miltope:
Customer Contract Relationships	$	3,100	$	(2,021	)	$	—	$	1,079	$	3,100	$	(1,723	)	$	—	$	1,377
RITEC:
Customer Contract Relationships		2,830		(1,076	)		—		1,754		2,830		(725	)		—		2,105
Non-Competition Agreement		950		(871	)		—		79		950		(681	)		—		269
TrojanLabel:
Existing Technology		2,327		(1,053	)		78		1,352		2,327		(711	)		140		1,756
Distributor Relations		937		(297	)		27		667		937		(200	)		56		793
Honeywell:
Customer Contract Relationships		27,243		(6,791	)		—		20,452		27,243		(3,869	)		—		23,374

Intangible Assets, net	$	37,387	$	(12,109	)	$	105	$	25,383	$	37,387	$	(7,909	)	$	196	$	29,674

There were no impairments to intangible assets during the periods ended January 31, 2020 and 2019. Amortization expense of $4.2 million; $4.1 million and $2.2 million with regard to acquired intangibles has been included in the consolidated statements of income for years ended January 31, 2020, 2019 and 2018, respectively.

Estimated amortization expense for the next five fiscal years is as follows:


(In thousands)	2021		2022		2023		2024		2025
Estimated amortization expense	$	4,069	$	3,972	$	3,966	$	3,969	$	3,394

Inventories

12 Months Ended

Jan. 31, 2020

Inventory Disclosure [Abstract]

Inventories

Note 4—Inventories

The components of inventories are as follows:


	January 31
	2020			2019
(In thousands)
Materials and Supplies	$	20,151		$	17,517
Work-in-Progress		1,408			1,633
Finished Goods		17,992			15,688

		39,551			34,838
Inventory Reserve		(5,626	)		(4,677	)

Balance at January 31	$	33,925		$	30,161

Finished goods inventory includes $3.4 million and $2.1 million of demonstration equipment at January 31, 2020 and 2019, respectively.

Property, Plant and Equipment

12 Months Ended

Jan. 31, 2020

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Note 5—Property, Plant and Equipment

Property, plant and equipment consist of the following:


	January 31
	2019			2019
(In thousands)
Land and Land Improvements	$	967		$	967
Buildings and Leasehold Improvements		12,524			12,165
Machinery and Equipment		23,167			22,810
Computer Equipment and Software		11,388			9,385

Gross Property, Plant and Equipment		48,046			45,327
Accumulated Depreciation		(36,778	)		(34,947	)

Net Property Plant and Equipment	$	11,268		$	10,380

Depreciation expense on property, plant and equipment was $2.0 million for both of the years ended January 31, 2020 and 2019 and $1.8 million for the year ended January 31, 2018.

Accrued Expenses

12 Months Ended

Jan. 31, 2020

Payables and Accruals [Abstract]

Accrued Expenses

Note 6—Accrued Expenses

Accrued expenses consisted of the following:


	January 31
	2020		2019
(In thousands)
Warranty	$	850	$	832
Professional Fees		697		403
Lease Liability		416		—
Dealer Commissions		236		320
Stockholder Relation Fees		194		40
Accrued Payroll & Sales Tax		193		97
Other Accrued Expenses		2,125		1,219

	$	4,711	$	2,911

Long- Term Debt and Other Financing Arrangements

12 Months Ended

Jan. 31, 2020

Debt Disclosure [Abstract]

Long- Term Debt and Other Financing Arrangements

Note 7—Long- Term Debt and Other Financing Arrangements

Long-term debt in the accompanying condensed consolidated balance sheets is as follows:


	January 31
(In thousands)	2020			2019
USD Term Loan (3.03% and 4.02% as of January 31, 2020 and 2019, respectively); maturity date November 30, 2022	$	8,250		$	11,250
USD Term Loan (3.03% and 4.02% as of January 31, 2020 and 2019, respectively); maturity date of January 31, 2022		4,784			6,992

		13,034			18,242
Debt Issuance Costs, net of accumulated amortization		(111	)		(164	)
Current Portion of Term Loan		(5,208	)		(5,208	)

Long-Term Debt	$	7,715		$	12,870

The schedule of required principal payments remaining during the next five years on long-term debt outstanding as of January 31, 2020 is as follows:


(In thousands)
Fiscal 2021	$	5,208
Fiscal 2022		5,576
Fiscal 2023		2,250
Fiscal 2024		—
Fiscal 2025		—

	$	13,034

Revolving Line of Credit

The Company has a $17.5 million revolving line of credit under its existing Credit Agreement with Bank of America. Revolving credit loans may be borrowed, at the Company’s option, in U.S. Dollars or, subject to certain conditions, Euros, British Pounds, Canadian Dollars or Danish Kroner. Amounts borrowed under the revolving credit facility bear interest at a rate

per annum

equal to, at the Company’s option, either (a) the LIBOR rate (or in the case of revolving credit loans denominated in a currency other than U.S. Dollars, the applicable quoted rate), plus a margin that varies within a range of 1.0% to 1.5% based on the Company’s consolidated leverage ratio, or (b) a fluctuating reference rate equal to the highest of (i) the federal funds’ rate plus 0.50%, (ii) Bank of America’s publicly announced prime rate or (iii) the LIBOR rate plus 1.00%, plus a margin that varies within a range of 0.0% to 0.5% based on the Company’s consolidated leverage ratio.

At January 31, 2020, the Company had an outstanding balance of $6.5 million on the revolving credit line. As of January 31, 2020. the outstanding balance bore interest at a weighted average annual rate of 3.68% and $0.1 million of interest was incurred on this obligation and included in other expense in the accompanying consolidated income statement for the period ended January 31, 2020. As of January 31, 2020, there is $11.0 million available for borrowing under the revolving credit facility.

The Company is required to pay a commitment fee on the undrawn portion of the revolving credit facility at the rate of 0.25%

per annum

.

Credit Agreement

The Company and the Company’s wholly owned Danish subsidiaries, ANI ApS and TrojanLabel ApS (collectively the “Parties”), are parties to a credit agreement (the “Credit Agreement”) with Bank of America, N.A. The Credit Agreement and its subsequent amendments through fiscal 2019 provided for a secured credit facility consisting of a term loan to ANI ApS in the principal amount of $9.2 million, a term loan to the Company in the principal amount of $15.0 million and a revolving credit facility for the Company.

The term loans bear interest at a rate

per annum

equal to the LIBOR rate plus a margin that varies within a range of 1.0% to 1.5% based on the Company’s consolidated leverage ratio. In connection with the Credit Agreement, AstroNova and ANI ApS entered into certain hedging arrangements with the Lender to manage the variable interest rate risk and currency risk associated with its payments in respect of the $9.2 million term loan. In connection with the Second Amendment to the Credit Agreement, AstroNova entered into certain hedging arrangements with the Lender to manage the variable interest rate risk and currency exchange risk associated with its payments in respect of the $15.0 million term loan. Refer to Note 8, “Derivative Financial Instruments and Risk Management” for further information about these arrangements.

The Parties must comply with various customary financial and

non-financial

covenants under the Credit Agreement. The Credit Agreement contains limitations, in each case subject to various exceptions and thresholds, on the Company’s and its subsidiaries’ ability to incur future indebtedness, to place liens on assets, to conduct mergers or acquisitions, to sell assets, to alter their capital structure, to make investments and loans, to change the nature of their business, and to prepay subordinated indebtedness. The Credit Agreement permits the Company to pay cash dividends on and repurchase shares of its common stock, subject to certain limitations.

The Lender is entitled to accelerate repayment of the loans and to terminate its revolving credit commitment under the Credit Agreement upon the occurrence of any of various customary events of default, which include, among other events, the following: failure to pay when due any principal, interest or other amounts in respect of the loans, breach of any of the Company’s covenants or representations under the loan documents, default under any other of the Company’s or its subsidiaries’ significant indebtedness agreements, a bankruptcy, insolvency or similar event with respect to the Company or any of its subsidiaries, a significant unsatisfied judgment against the Company or any of its subsidiaries, or a change of control of the Company.

The obligations of ANI ApS in respect of the $9.2 million term loan are guaranteed by the Company and TrojanLabel ApS. The Company’s obligations in respect of the $15.0 million term loan, revolving credit facility and its guarantee in respect of the ANI ApS term loan are secured by substantially all of the assets of the Company (including a pledge of a portion of the equity interests held by the Company in ANI ApS and the Company’s wholly-owned German subsidiary AstroNova GmbH), subject to certain exceptions.

On December 9, 2019, the Parties entered into a Fourth Amendment (the “Fourth Amendment”) to the Credit Agreement. The Fourth Amendment amended the Credit Agreement to, among other things, (i) increase the aggregate amount available for borrowings under the revolving line of credit from $10.0 million to $17.5 million through the second quarter of fiscal 2021 and (ii) modify the financial covenants with which the Company must comply thereunder by excluding certain capital expenditures from the calculation of the Company’s consolidated fixed charge coverage ratio, providing that the minimum consolidated fixed charge coverage ratio covenant will be suspended through the second quarter of fiscal 2021, and adding a minimum consolidated EBITDA covenant commencing with the fourth quarter of fiscal 2020 and continuing through the second quarter of fiscal 2021. As of January 31, 2020, the Company believes it is in compliance with all of the covenants in the Credit Agreement.

Derivative Financial Instruments and Risk Management

12 Months Ended

Jan. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments and Risk Management

Note 8—Derivative Financial Instruments and Risk Management

The Company has entered into a cross-currency interest rate swap to manage the interest rate risk and foreign currency exchange risk associated with the floating-rate foreign currency-denominated term loan borrowing by our Danish Subsidiary and an interest rate swap to manage the interest rate risk associated with the variable rate term loan borrowing by the Company. Both swaps have been designated as cash flow hedges of floating-rate borrowings and are recorded at fair value.

The cross-currency interest rate swap agreement utilized by the Company effectively modifies the Company’s exposure to interest rate risk and foreign currency exchange rate risk by converting the Company’s floating-rate debt denominated in U.S. Dollars on our Danish subsidiary’s books to a fixed-rate debt denominated in Danish Kroner for the term of the loan, thus reducing the impact of interest-rate and foreign currency exchange rate changes on future interest expense and principal repayments. This swap involves the receipt of floating rate amounts in U.S. Dollars in exchange for fixed-rate interest payments in Danish Kroner, as well as exchanges of principal at the inception spot rate, over the life of the term loan.

The interest rate swap agreement utilized by the Company on the term loan effectively modifies the Company’s exposure to interest rate risk by converting the Company’s floating-rate debt to fixed-rate debt for the next five years, thus reducing the impact of interest-rate changes on future interest expense. This swap involves the receipt of floating rate amounts in U.S. dollars in exchange for fixed rate payments in U.S. dollars over the life of the term loan.

The following table summarizes the notional amount and fair value of the Company’s derivative instrument:


Cash Flow Hedges (In thousands)	January 31, 2020						January 31, 2019
Cash Flow Hedges (In thousands)			Fair Value Derivatives						Fair Value Derivatives
	Notional Amount		Asset		Liability		Notional Amount		Asset		Liability
Cross-currency Interest Rate Swap	$	4,489	$	—	$	250	$	6,329	$	—	$	600
Interest Rate Swap	$	8,250	$	—	$	96	$	11,250	$	85	$	—

The following tables present the impact of the derivative instruments in our consolidated financial statements for the years ended January 31, 2020 and 2019:


	Years Ended
	Amount of Gain Recognized in OCI on Derivative				Location of Gain Reclassified from Accumulated OCI into Income		Amount of Gain Reclassified from Accumulated OCI into Income
Cash Flow Hedge (In thousands)	January 31, 2020		January 31, 2019				January 31, 2020		January 31, 2019
Swap contracts	$	159	$	797		Other Income	$	338	$	769

At January 31, 2020, the Company expects to reclassify approximately $0.1 million of net gains on the swap contracts from accumulated other comprehensive loss to earnings during the next 12 months due to changes in foreign exchange rates and the payment of variable interest associated with the floating-rate debt.

Royalty Obligation

12 Months Ended

Jan. 31, 2020

Royalty Obligation Disclosure [Abstract]

Royalty Obligation

Note 9—Royalty Obligation

In fiscal 2018, AstroNova, Inc. entered into an Asset Purchase and License Agreement with Honeywell International, Inc. to acquire an exclusive, perpetual, world-wide license to manufacture Honeywell’s narrow-format flight deck printers for two aircraft families along with certain inventory used in the manufacturing of the licensed printers. The purchase price included a guaranteed minimum royalty payment of $15.0 million, to be paid in quarterly installments over a ten year period. Royalty payments are based on gross revenues from the sales of the printers, paper and repair services of the licensed products. The royalty rates vary based on the year in which they are paid or earned and product sold or service provided, and range from single-digit to mid double-digit percentages of gross revenue.

The guaranteed minimum royalty payment obligation was recorded at the present value of the minimum annual royalty payments using a present value factor of 2.8%, which is based on the estimated

after-tax

cost of debt for similar companies. As of January 31, 2020, the Company had paid an aggregate of $3.5 million of the guaranteed minimum royalty obligation. At January 31, 2020, the current portion of the outstanding guaranteed minimum royalty obligation of $2.0 million is to be paid over the next twelve months and is reported as a current liability and the remainder of $8.0 million is reported as a long-term liability on the Company’s consolidated balance sheet. In addition to the guaranteed minimum royalty payments, for the periods ended January 31, 2020 and January 31, 2019, the Company also incurred excess royalty expense of $1.2 million and $2.8 million, respectively, which is included in cost of revenue in the Company’s consolidated statements of income. A total of $0.8 million of excess royalty is payable and reported as a current liability on the Company’s condensed consolidated balance sheet at January 31, 2020.

Leases

12 Months Ended

Jan. 31, 2020

Leases [Abstract]

Leases

Note 10—Leases

The Company enters into lease contracts for certain of its facilities at various locations worldwide. Our leases have remaining lease terms of one to eight years, some of which include options to extend the lease term for periods of up to five years when it is reasonably certain the Company will exercise such options.

The company leases office space from an affiliate. This lease is classified as an operating lease with annual rental payments of approximately $63,000 and $61,000 as of January 31, 2020 and 2019, respectively.

Balance sheet and other information related to our leases is as follows:


Operating Leases (In thousands)	Balance Sheet Classification	January 31, 2020
Lease Assets	Right of Use Assets	$	1,661
Lease Liabilities — Current	Other Liabilities and Accrued Expenses		416
Lease Liabilities — Long Term	Lease Liabilities	$	1,279

Lease cost information is as follows:

Year Ended

Operating Leases

(In thousands)

Statement of Income Classification

January 31,
2020

Operating Lease Costs

General and Administrative Expense

$

449

Maturities of operating lease liabilities are as follows:


(In thousands)	January 31, 2020
2021	$	416
2022		358
2023		300
2024		273
2025		169
Thereafter		389

Total Lease Payments		1,905
Less: Imputed Interest		(210	)

Total Lease Liabilities	$	1,695

As of January 31, 2020, the weighted-average remaining lease term and weighted-average discount rate for our operating leases are 5.6 years and 3.96%, respectively. We calculated the weighted-average discount rate using incremental borrowing rates, which equal the rates of interest that we would pay to borrow funds on a fully collateralized basis over a similar term.

Supplemental cash flow information related to leases is as follows:


	Year Ended
(In thousands)	January 31, 2020
Cash paid for operating lease liabilities	$	406

Accumulated Other Comprehensive Loss

12 Months Ended

Jan. 31, 2020

Equity [Abstract]

Accumulated Other Comprehensive Loss

Note 11—Accumulated Other Comprehensive Loss

The changes in the balance of accumulated other comprehensive loss by component are as follows:


(In thousands)	Foreign Currency Translation Adjustments			Unrealized Holding Gain (Loss) on Available for Sale Securities			Net Unrealized Gain (Losses) on Cash Flow Hedges			Total
Balance at January 31, 2017	$	(1,048	)	$	(8	)	$	—		$	(1,056	)
Other Comprehensive Loss Income (Loss) before reclassification		867			5			(1,036	)		(164	)
Amounts Reclassified to Net Income		—			—			1,048			1,048

Net Other Comprehensive Income		867			5			12			884

Balance at January 31, 2018	$	(181	)	$	(3	)	$	12		$	(172	)
Other Comprehensive Income (Loss) before reclassification		(671	)		—			622			(49	)
Amounts reclassified from AOCI to Earnings		—			3			(600	)		(597	)

Other Comprehensive Income (Loss)		(671	)		3			22			(646	)

Balance at January 31, 2019	$	(852	)	$	—		$	34		$	(818	)
Other Comprehensive Income (Loss) before reclassification		(133	)		—			122			(11	)
Amounts reclassified from AOCI to Earnings		—			—			(264	)		(264	)

Other Comprehensive Loss		(133	)		—			(142	)		(275	)

Balance at January 31, 2020	$	(985	)	$	—		$	(108	)	$	(1,093	)

The amounts presented above in other comprehensive income (loss) are net of taxes except for translation adjustments associated with our German and Danish subsidiaries.

Shareholders' Equity

12 Months Ended

Jan. 31, 2020

Federal Home Loan Banks [Abstract]

Shareholders' Equity

Note 12—Shareholders’ Equity

During fiscal 2020, 2019 and 2018, certain of the Company’s employees delivered a total of 20,329, 33,430 and 26,561 shares, respectively, of the Company’s common stock to satisfy the exercise price and related taxes for stock options exercised and restricted stock vesting. The shares delivered were valued at a total of $0.5 million, $0.6 million and $0.4 million, respectively, and are included in treasury stock in the accompanying consolidated balance sheets at January 31, 2020, 2019 and 2018. These transactions did not impact the number of shares authorized for repurchase under the Company’s current repurchase program.

Share-Based Compensation

12 Months Ended

Jan. 31, 2020

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation

Note 13—Share-Based Compensation

The Company maintains the following share-based compensation plans:

Stock Plans:

We have one equity incentive plan from which we are authorized to grant equity awards, the AstroNova, Inc. 2018 Equity Incentive Plan (the “2018 Plan”). The 2018 Plan provides for, among other things, the issuance of awards, including incentive stock options,

non-qualified

stock options, stock appreciation rights, time-based restricted stock units (RSUs), performance-based restricted stock units (PSUs)

and restricted stock awards (RSAs). At our annual meeting of shareholders held on June 4, 2019, the 2018 Plan was amended to increase the number of shares of the Company’s common stock available for issuance by 300,000, bringing the total number of shares available for issuance under the 2018 Plan from 650,000 to 950,000, plus an additional number of shares equal to the number of shares subject to awards granted under the 2018 Plan or our 2015 Equity Incentive Plan (the “2015 Plan”) that are forfeited,

cancelled

, satisfied without the issuance of stock, otherwise terminated (other than by exercise), or, for shares of stock issued pursuant to any

unvested

award, reacquired by the Company at not more than the grantee’s purchase price (other than by exercise). Under the 2018 Plan, all awards to employees generally have a minimum vesting period of one year. Options granted under the 2018 Plan must be issued at an exercise price of not less than the fair market value of the Company’s common stock on the date of grant and expire after ten years. As of January 31, 2020, 110,909

unvested

shares of restricted stock and options to purchase an aggregate of 138,999 shares were outstanding under the 2018 Plan.

In addition to the 2018 Plan, we previously granted equity awards under the 2015 Plan and our 2007 Equity Incentive Plan (the “2007 Plan”). No new awards may be issued under the 2015 Plan or the 2007 Plan, but outstanding awards will continue to be governed by those plans. As of January 31, 2020, 1,007 unvested shares of restricted stock and options to purchase an aggregate of 373,345 shares were outstanding under the 2007 Plan and 22,718 unvested shares of restricted stock and options to purchase an aggregate of 166,700 shares were outstanding under the 2015 Plan.

On January 31, 2019, the compensation committee of the Company’s board of directors adopted an Amended and Restated

Non-Employee

Director Annual Compensation Program (the “New Program”), which became effective as of February 1, 2019. Pursuant to the New Program, beginning with fiscal 2020, each

non-employee

director automatically receives a grant of restricted stock on the date of their

re-election

to the Company’s board of directors. The number of whole shares to be granted equals the number calculated by dividing the stock component of the director compensation amount determined by the compensation committee for that year by the fair market value of our stock on that day. The value of the restricted stock award for fiscal 2020 was $60,000. To account for the partial year beginning on February 1, 2019 and continuing through the 2019 annual meeting and thereby provide for the alignment of the timing of annual grants of restricted stock under the New Program with the election of directors at the annual meeting, on February 1, 2019, each

non-employee

director was granted shares of restricted stock with a fair market value of $18,000. Other than the shares granted on February 1, 2019, which vested on June 1, 2019, shares of restricted stock granted under the New Program will become vested on the first anniversary of the date of grant, conditioned upon the recipient’s continued service on the Board through that date.

Share-Based Compensation:

Share-based compensation expense has been recognized as follows:


	Years Ended January 31
	2020		2019		2018
(In thousands)
Stock Options	$	616	$	783	$	437
Restricted Stock Awards and Restricted Stock Units		1,136		1,088		1,134
Employee Stock Purchase Plan		23		15		12

Total	$	1,775	$	1,886	$	1,583

Stock Options:

Aggregated information regarding stock options granted under the plans is summarized below:


	Number of Shares			Weighted- Average Exercise Price Per Share
Options Outstanding, January 31, 2017		685,456		$	11.96
Options Granted		187,189			13.57
Options Exercised		(84,025	)		10.08
Options Forfeited		(18,750	)		14.49
Options Cancelled		(24,600	)		11.76

Options Outstanding, January 31, 2018		745,270		$	12.52
Options Granted		196,000			18.21
Options Exercised		(150,125	)		10.62
Options Forfeited		(16,300	)		15.10
Options Cancelled		(3,700	)		8.95

Options Outstanding, January 31, 2019		771,145		$	14.30
Options Granted		—			—
Options Exercised		(57,175	)		11.60
Options Forfeited		(34,526	)		15.73
Options Cancelled		(400	)		6.22

Options Outstanding, January 31, 2020		679,044		$	14.46

Set forth below is a summary of options outstanding at January 31, 2020:


Outstanding							Exercisable
Range of Exercise prices	Number of Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life		Number of Shares		Weighted- Average Exercise Price		Weighted Average Remaining Contractual Life
$5.00-10.00		54,881	$	7.97		2.1		54,881	$	7.97		2.1
$10.01-15.00		396,564		13.61		5.8		322,094		13.64		5.4
$15.01-20.00		227,599		17.50		7.8		112,445		17.07		7.6

		679,044	$	14.46		6.2		489,420	$	13.79		5.6

The fair value of each stock option granted was estimated on the grant date using the Black-Scholes option-pricing model with the following weighted-average assumptions:


	Years Ended January 31
	2019			2018
Risk-Free Interest Rate		2.6	%		1.9	%
Expected Life (years)		9			9
Expected Volatility		39.4	%		39.0	%
Expected Dividend Yield		1.5	%		2.0	%

No options were granted during fiscal 2020. The weighted-average estimated fair value of options granted during fiscal 2019 and 2018 was $7.43 and $4.79, respectively. As of January 31, 2020, there was $0.8 million of unrecognized compensation expense related to the unvested stock options granted under the plans. This expense is expected to be recognized over a weighted-average period of 1.5 years.

As of January 31, 2020, the aggregate intrinsic value (the aggregate difference between the closing stock price of the Company’s common stock on January 31, 2020, and the exercise price of the outstanding options) that would have been received by the option holders if all options had been exercised was $0.3 million for all exercisable options and $0.3 million for all options outstanding. The total aggregate intrinsic value of options exercised during 2020, 2019 and 2018 was $0.5 million, $1.1 million and $0.4 million, respectively

.

Restricted Stock Units (RSUs) and Restricted Stock Awards (RSAs):

Aggregated information regarding RSUs and RSAs granted under the Plan is summarized below:


	RSAs & RSUs			Weighted-Average Grant Date Fair Value
Outstanding at January 31, 2017		213,868		$	14.08
Granted		43,737			13.78
Vested		(71,171	)		14.12
Forfeited		(9,087	)		14.05

Outstanding at January 31, 2018		177,347		$	13.99
Granted		108,790			17.85
Vested		(67,447	)		14.26
Forfeited		(85,023	)		14.17

Outstanding at January 31, 2019		133,667		$	16.90
Granted		119,522			19.86
Vested		(59,930	)		14.50
Forfeited		(58,625	)		19.00

Outstanding at January 31, 2020		134,634		$	16.79

As of January 31, 2020, there was $1.5 million of unrecognized compensation expense related to unvested RSUs and RSAs. This expense is expected to be recognized over a weighted average period of 1.0 years.

Employee Stock Purchase Plan (ESPP):

AstroNova’s ESPP allows eligible employees to purchase shares of common stock at a 15% discount from fair market value on the date of purchase. A total of 247,500 shares were initially reserved for issuance under this plan. Summarized plan activity is as follows:


	Years Ended January 31
	2020			2019			2018
Shares Reserved, Beginning		33,853			39,207			45,224
Shares Purchased		(8,879	)		(5,354	)		(6,017	)

Shares Reserved, Ending		24,974			33,853			39,207

Income Taxes

12 Months Ended

Jan. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Note 14—Income Taxes

The components of income (loss) before income taxes are as follows:


	January 31
	2020			2019		2018
(In thousands)
Domestic	$	1,930		$	6,859	$	2,110
Foreign		(560	)		449		3,047

	$	1,370		$	7,308	$	5,157

The components of the (benefit) provision for income taxes are as follows:


	January 31
	2020			2019			2018
(In thousands)
Current:
Federal	$	660		$	1,807		$	592
State		221			457			251
Foreign		368			952			284

		1,249			3,216			1,127

Deferred:
Federal	$	(1,364	)	$	(843	)	$	903
State		(282	)		(170	)		(25	)
Foreign		8			(625	)		(134	)

		(1,638	)		(1,638	)		744

	$	(389	)	$	1,578		$	1,871

Total income tax (benefit)/provision differs from the expected tax (benefit)/provision as a result of the following:


	January 31
	2020			2019			2018
(In thousands)
Income Tax Provision at Statutory Rate	$	288		$	1,534		$	1,697
U.S. Corporate Rate Change		—			52			1,010
State Taxes, Net of Federal Tax Effect		(48	)		226			149
Foreign Rate Deferential		315			558			752
Transition Tax on Repatriated Earnings		—			14			104
Meals and Entertainment		31			56			40
Share Based Compensation		(145	)		(127	)		24
Change in Valuation Allowance		256			—			—
Change in Reserves Related to ASC 740 Liability		(352	)		(34	)		(20	)
Domestic Production Deduction		—			—			(47	)
Return to Provision Adjustment		(207	)		58			(122	)
TrojanLabel Earn Out Liability Adjustment		—			—			(316	)
Global Intangible Low Taxed Income		107			—			—
R&D Credits		(209	)		(218	)		(537	)
Foreign Derived Intangible Income		(107	)		(53	)		—
Foreign Tax Credits		(344	)		(477	)		(833	)
Other		26			(11	)		(30	)

	$	(389	)	$	1,578		$	1,871

The Company’s effective tax rate for 2020 was (28.4)% compared to 21.6% in 2019 and 36.3% in 2018. The decrease in the effective tax rate in 2020 from 2019 is primarily related to lower

pre-tax

income in 2020 compared to 2019 and 2018. Specific items decreasing the effective tax rate include foreign derived intangible income (“FDII”), the release of ASC 740 liabilities, R&D credit utilization, and return to provision adjustments. This decrease was offset by valuation allowances recorded on unbenefited losses in China and on carryforward foreign tax credits expected to expire unused.

The decrease in the effective tax rate for 2019 as compared to 2018 is primarily related to impacts of the Tax Act including the reduction in the statutory tax rate from 35% to 21% along with the absence of the

one-time

U.S. deferred remeasurement and Transition Tax charges. This decrease was offset by the absence of R&D credits from amended tax returns and the absence of the

non-taxable

TrojanLabel earn out liability adjustment in TrojanLabel ApS impacting the fiscal 2018 effective tax rate.

The components of deferred income tax expense arise from various temporary differences and relate to items included in the statement of income. The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and liabilities are as follows:


	January 31
	2020			2019
(In thousands)
Deferred Tax Assets:
Inventory	$	2,094		$	1,800
Honeywell Royalty Liability		2,583			3,146
State R&D Credits		1,496			1,305
Share-Based Compensation		582			493
Compensation Accrual		159			155
Warranty Reserve		205			201
Unrecognized State Tax Benefits		116			133
Deferred Service Contract Revenue		111			91
Bad Debt		165			101
Net Operating Loss		443			505
Foreign Tax Credit		113			—
Other		295			142

		8,362			8,072
Deferred Tax Liabilities:
Intangibles		776			2,660
Accumulated Tax Depreciation in Excess of Book Depreciation		1,002			982
Other		188			238

		1,966			3,880

Subtotal		6,396			4,192
Valuation Allowance		(1,752	)		(1,304	)

Net Deferred Tax Assets	$	4,644		$	2,888

The valuation allowance of $1.8 million at January 31, 2020 and $1.3 million at January 31, 2019 related to domestic research and development tax credit carryforwards, foreign tax credit carryforwards, and net operating loss carryforwards in China, all of which are expected to expire unused. The valuation allowance increased $0.5 million in 2020 due to the generation of domestic research and development credits, and foreign tax credits in excess of the Company’s ability to currently utilize them. The Company also recorded a full valuation allowance against the carryforward net operating losses in China, as the future realization is not reasonably assured. The Company has reached these conclusions after considering the availability of taxable income in prior carryback years, tax planning strategies, and the likelihood of future taxable income and credits exclusive of reversing temporary differences and carryforwards in the relevant jurisdictions.

We believe that it is reasonably possible that some unrecognized tax benefits, accrued interest and penalties could decrease income tax expense in the next year due to either the review of previously filed tax returns or the expiration of certain statutes of limitation. The changes in the balances of unrecognized tax benefits, excluding interest and penalties are as follows:


	2020			2019			2018
(In thousands)
Balance at February 1	$	618		$	665		$	708
Increases in current period tax positions		2			7			55
Reductions related to lapse of statutes of limitations		(26	)		(54	)		(98	)
Reductions related to settlement with tax authorities		(232	)		—			—

Balance at January 31	$	362		$	618		$	665

During fiscal 2020, the Company recognized $114,000 of income and $8,000 and $24,000 of expense in 2019 and 2018, respectively, related to a change in interest and penalties, which are included as a component of income tax expense in the accompanying statements of income. The Company has accrued potential interest and penalties of $0.3 million and $0.5 million at the end of January 31, 2020 and 2019, respectively.

The Company and its subsidiaries file income tax returns in U.S. federal jurisdictions, various state jurisdictions, and various foreign jurisdictions. The Company was previously under audit by the IRS for the tax years ended January 31, 2015, 2016, and 2017. On June 6, 2019, the Company received formal communication regarding the close of the audit with no additional changes made by the IRS. Therefore, the Company’s reserves for federal uncertain tax positions relating to the years in question have been released. The Company released $232,000 relating to the federal tax exposure for the years previously under audit and $74,000 of related interest (net of federal benefit) and penalties.

The Company was also notified of an income tax audit from the state of Rhode Island, but, no significant items have been raised at this time other than information requests. No assessments have been made as of January 31, 2020.

U.S. income taxes have not been provided on $4.9 million of undistributed earnings of the Company’s foreign subsidiaries since it is the Company’s intention to permanently reinvest such earnings offshore. If the earnings were distributed in the form of dividends, the Company would not be subject to U.S. tax as a result of the Tax Act but could be subject to foreign income and withholding taxes. Determination of the amount of this unrecognized deferred income tax liability is not practical.

Nature of Operations, Segment Reporting and Geographical Information

12 Months Ended

Jan. 31, 2020

Segment Reporting [Abstract]

Nature of Operations, Segment Reporting and Geographical Information

Note 15—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 PI segment produces an array of high-technology digital color and monochrome label printers and mini presses, labeling software and supplies 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. The T&M segment also includes the Company’s line of aerospace flight deck and cockpit printers.

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.

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
	2020		2019		2018		2020			2019		2018		2020			2019			2018
Product Identification	$	88,116	$	86,786	$	81,681	$	7,509		$	7,910	$	10,561		8.5	%		9.1	%		12.9	%
T&M		45,330		49,871		31,720		6,281			11,933		3,754		13.9	%		23.9	%		11.8	%

Total	$	133,446	$	136,657	$	113,401		13,790			19,843		14,315		10.3	%		14.5	%		12.6	%

Corporate Expenses								11,357			11,123		8,903

Operating Income								2,433			8,720		5,412
Other Expense, Net								(1,063)			(1,412)		(255)

Income Before Income Taxes								1,370			7,308		5,157
Income Tax Provision (Benefit)								(389	)		1,578		1,871

Net Income							$	1,759		$	5,730	$	3,286

No customer accounted for greater than 10% of net revenue in fiscal 2020, 2019 or 2018.

Other information by segment is presented below:


(In thousands)	Assets
	2020		2019
Product Identification	$	55,427	$	51,639
T&M		56,988		59,702
Corporate*		4,249		7,642

Total	$	116,664	$	118,983

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


(In thousands)	Depreciation and Amortization						Capital Expenditures
	2020		2019		2018		2020		2019		2018
Product Identification	$	1,928	$	1,888	$	1,536	$	2,001	$	1,935	$	1,497
T&M		4,356		4,264		2,458		905		710		707

Total	$	6,284	$	6,152	$	3,994	$	2,906	$	2,645	$	2,204

Geographical Data

Presented below is selected financial information by geographic area:


(In thousands)	Revenue						Long-Lived Assets*
	2020		2019		2018		2020		2019
United States	$	83,671	$	83,668	$	69,795	$	34,072	$	36,750
Europe		29,617		31,574		29,948		2,544		3,223
Asia		8,316		8,207		3,808		—		—
Canada		5,719		6,692		5,373		35		81
Central and South America		4,145		4,147		3,402		—		—
Other		1,978		2,369		1,075		—		—

Total	$	133,446	$	136,657	$	113,401	$	36,651	$	40,054

*	Long-lived assets exclude goodwill assigned to the T&M segment of $4.5 million at both January 31, 2020 and 2019 and $7.5 million and $7.8 million assigned to the PI segment at January 31, 2020 and 2019, respectively.

Employee Benefit Plans

12 Months Ended

Jan. 31, 2020

Postemployment Benefits [Abstract]

Employee Benefit Plans

Note 16—Employee Benefit Plans

AstroNova sponsors a Profit-Sharing Plan (the “Plan”) which provides retirement benefits to all eligible domestic employees. The Plan allows participants to defer a portion of their cash compensation and contribute such deferral to the Plan through payroll deductions. The Company makes matching contributions up to specified levels. The deferrals are made within the limits prescribed by Section 401(k) of the Internal Revenue Code.

All contributions are deposited into trust funds. It is the policy of the Company to fund any contributions accrued. The Company’s annual contribution amounts are determined by the Board of Directors. Contributions paid or accrued amounted to $0.5 million in each year in fiscal 2020, 2019 and 2018.

Product Warranty Liability

12 Months Ended

Jan. 31, 2020

Guarantees and Product Warranties [Abstract]

Product Warranty Liability

Note 17—Product Warranty Liability

AstroNova offers a manufacturer’s warranty for the majority of its hardware products. The specific terms and conditions of warranty vary depending upon the products sold and country in which the Company does business. The Company estimates the warranty costs based on historical claims experience and records a liability in the amount of such estimates at the time product revenue is recognized. The Company regularly assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. Activity in the product warranty liability, which is included in other accrued expenses in the accompanying consolidated balance sheet, is as follows:


	January 31
	2020			2019			2018
(In thousands)
Balance, beginning of the year	$	832		$	575		$	515
Provision for Warranty Expense		1,733			1,680			1,294
Cost of Warranty Repairs		(1,715	)		(1,423	)		(1,234	)

Balance, end of the year	$	850		$	832		$	575

Concentration of Risk

12 Months Ended

Jan. 31, 2020

Risks and Uncertainties [Abstract]

Concentration of Risk

Note 18—Concentration of Risk

Credit is generally extended on an uncollateralized basis to almost all customers after review of credit worthiness. Concentration of credit and geographic risk with respect to accounts receivable is limited due to the large number and general dispersion of accounts which constitute the Company’s customer base. The Company periodically performs

on-going

credit evaluations of its customers. The Company has not historically experienced significant credit losses on collection of its accounts receivable.

During the years ended January 31, 2020, 2019 and 2018, one vendor accounted for 21.2%, 21.6% and 31.3% of purchases, and 28.0%, 28.7% and 26.6% of accounts payable, respectively, as of January 31, 2020, 2019 and 2018.

Commitments and Contingencies

12 Months Ended

Jan. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 19—Commitments and Contingencies

The Company is subject to contingencies, including legal proceedings and claims arising in the normal course of business that cover a wide range of matters including, among others, contract and employment claims; workers compensation claims; product liability; warranty and modification; and adjustment or replacement of component parts of units sold.

Direct costs associated with the estimated resolution of contingencies are accrued at the earliest date at which it is deemed probable that a liability has been incurred and the amount of such liability can be reasonably estimated. While it is impossible to ascertain the ultimate legal and financial liability with respect to contingent liabilities, including lawsuits, we believe that the aggregate amount of such liabilities, if any, in excess of amounts provided or covered by insurance, will not have a material adverse effect on the consolidated financial position or results of operations. It is possible, however, that future results of operations for any particular future period could be materially affected by changes in our assumptions or strategies related to these contingencies or changes out of the Company’s control.

Fair Value Measurements

12 Months Ended

Jan. 31, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 20—Fair Value Measurements

Assets and Liabilities Recorded at Fair Value on a Recurring Basis

The following tables provide a summary of the financial assets and liabilities that are measured at fair value:


Assets measured at fair value:	Fair value measurement at January 31, 2020								Fair value measurement at January 31, 2019
(in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Interest Rate Swap Contract (included in Other Assets)		—		—		—		—		—		85		—		85

Total assets	$	—	$	—	$	—	$	—	$	—	$	85	$	—	$	85


Liabilities measured at fair value:	Fair value measurement at January 31, 2020								Fair value measurement at January 31, 2019
(in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cross-Currency Interest Rate Swap Contract (included in Other Long-Term Liabilities)	$	—	$	250	$	—	$	250	$	—	$	600	$	—	$	600
Interest Rate Swap Contract (included in Other Long-Term Liabilities)		—		96		—		96		—		—		—		—
Earnout Liability (included in Other Liabilities)		—		—		14		14		—		—		14		14

Total liabilities	$	—	$	346	$	14	$	360	$	—	$	600	$	14	$	614

We use the market approach to measure fair value of our derivative instruments. These derivative instruments were measured at fair value using readily observable market inputs, such as quotations on interest rates and foreign exchange rates and are classified as Level 2 because they are

over-the-counter

contracts with a bank counterparty that are not traded in an active market.

The fair value of the earn out liability incurred in connection with the Company’s 2017 acquisition of TrojanLabel was determined using the option approach methodology which includes using significant inputs that are not observable in the market and therefore classified as Level 3. Key assumptions in estimating the initial fair value of the contingent consideration liability included (1) the estimated earnout targets over the next seven years of $0.5 million-$1.4 million, (2) the probability of success (achievement of the various contingent events) from

0.0%-0.9%

and (3) a risk-adjusted discount rate of approximately

2.68%-4.9%

used to adjust the probability-weighted earnout payments to their present value. At each reporting period, the contingent consideration liability is recorded at its fair value with changes reflected in general and administrative expense in the condensed consolidated statements of operations.

Assets and Liabilities Not Recorded at Fair Value on the Consolidated Balance Sheet

The Company’s long-term debt, including the current portion of long-term debt not reflected in the financial statements at fair value, is reflected in the table below:


	Fair Value Measurement at January 31, 2020
(In thousands)	Level 1		Level 2		Level 3		Total		Carrying Value
Long-Term Debt and Related Current Maturities	$	—	$	—	$	13,258	$	13,258	$	13,034

	Fair Value Measurement at January 31, 2019
(In thousands)	Level 1		Level 2		Level 3		Total		Carrying Value
Long-Term Debt and Related Current Maturities	$	—	$	—	$	18,857	$	18,857	$	18,242

The fair value of the Company’s long-term debt, including the current portion, is estimated by discounting the future cash flows using current interest rates at which similar borrowings with the same maturities would be made to borrowers with similar credit ratings and is classified as Level 3.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Subsequent Event

12 Months Ended

Jan. 31, 2020

Subsequent Events [Abstract]

Subsequent Event

Note 21—Subsequent Event

On March 11, 2020, the World Health Organization announced that

COVID-19,

a respiratory illness, caused by a novel coronavirus first identified in China, is a

pandemic. COVID-19

has spread to many of the countries in which we, our customers, our suppliers and our other business partners conduct business. Governments in affected regions have implemented, and may continue to implement, safety precautions which include quarantines, travel restrictions, business closures, cancellations of public gatherings and other measures as they deem necessary. Many organizations and individuals, including the Company and its employees are taking additional steps to avoid or reduce infection, including limiting travel and staying home from work. These measures are disrupting normal business operations both in and outside of affected areas and have had significant negative impacts on businesses and financial markets worldwide.

The Company continues to monitor its operations and government recommendations and has made modifications to its normal operations because of the

COVID-19

outbreak, including requiring most of its

non-production

related team members to work remotely. The Company has maintained a substantial portion of its manufacturing operational capacity at its primary manufacturing facility located at West Warwick, Rhode Island, as well as its manufacturing facilities in Canada and Germany, at this time, and has instituted heightened cleaning and sanitization standards and several health and safety protocols and procedures to safeguard its team members.

The

COVID-19

outbreak has caused the Company to experience a number of adverse impacts, including reductions in demand for its products, delays and cancellations of orders for its products, difficulties in obtaining raw materials and components for its products, shortages of labor to manufacture products, inefficiencies caused by remote worker’s difficulties in performing their normal work outputs, closures of the facilities of some of its suppliers and customers, and delays in collecting accounts receivable. Disruptions in the capital markets as a result of the

COVID-19

outbreak may also adversely affect the Company if these impacts continue for a prolonged period and the Company needs additional liquidity.

The rapid development and uncertainty of the impacts of the

COVID-19

pandemic precludes any prediction as to the ultimate adverse impact of the

COVID-19

outbreak on the Company’s business. However,

COVID-19

and the measures taken to contain it present material uncertainty and risk with respect to the Company’s performance and financial results. In particular, the aerospace industry, which the Company serves through its aerospace printer product line, has been significantly disrupted by the

COVID-19

outbreak, both inside and outside of the United States. The decline in air travel and the impact of that decline on demand for the Company’s products from its airplane manufacturing customers, the airlines to which it sells directly and through the manufacturers, and the repair and overhaul market and the market for the paper consumed in the printers, could have a material adverse impact on the Company’s financial results.

In April 2020, the Company applied for a loan in the amount of approximately $4.4 million from Bank of America, N.A. pursuant to the Paycheck Protection Program administered by the United States Small Business Administration and authorized by the Keeping American Workers Employed and Paid Act, which is part of the Coronavirus Aid, Relief, and Economic Security Act, enacted on March 27, 2020. There can be no assurance that the Company will receive any or all of the requested loan proceeds under this program.

Schedule II - Valuation and Qualifying Accounts and Reserves

12 Months Ended

Jan. 31, 2020

SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]

Schedule II - Valuation and Qualifying Accounts and Reserves

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS AND RESERVES


Description	Balance at Beginning of Year		Provision/ (Benefit) Charged to Operations		Deductions(2)			Balance at End of Year
Allowance for Doubtful Accounts(1):
(In thousands)
Year Ended January 31,
2020	$	521	$	546	$	(211	)	$	856
2019	$	377	$	310	$	(166	)	$	521
2018	$	266	$	119	$	(8	)	$	377

(1)	The allowance for doubtful accounts has been netted against accounts receivable in the balance sheets as of the respective balance sheet dates.

(2)	Uncollectible accounts written off, net of recoveries.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Jan. 31, 2020

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation:

The accompanying financial data have been prepared by us pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and are presented in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”). Our fiscal year end is January 31. Unless otherwise stated, all years and dates refer to our fiscal year.

Principles of Consolidation

Principles of Consolidation:

The consolidated financial statements include the accounts of AstroNova, Inc. and its subsidiaries. All material intercompany accounts and transactions are eliminated in consolidation.

Reclassification

Reclassification:

Certain amounts in prior year’s financial statements have been reclassified to conform to the current year’s presentation.

Use of Estimates

Use of Estimates:

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect these financial statements and accompanying notes. Some of the more significant estimates relate to the allowances for doubtful accounts, inventory valuation, valuation and estimated lives of intangible assets, impairment of long-lived assets, goodwill, income taxes, share-based compensation and warranty reserves. Management’s estimates are based on the facts and circumstances available at the time estimates are made, past 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.

Cash and Cash Equivalents