U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 1997
____ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________to _________
Commission file number 1-8289
ASTRO COMMUNICATIONS, INC.
(Exact name of small business issuer as specified in its charter)
Oklahoma 73-0973183
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
c/o Steven A. Hirsh
2 North LaSalle Street - Suite 400
Chicago, IL 60602
(Address of principal executive offices)
312-621-0653
(Issuer's telephone number)
N/A
(Former name, former address and former fiscal year, if changed since last
year)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. YES X NO__
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court. Yes ______ NO _______
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest applicable date: 4,241,856.
PART 1. FINANCING INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ASTRO COMMUNICATIONS, INC.
CONDENSED BALANCE SHEET
AT APRIL 30, 1997 AND AT OCTOBER 31, 1996
April 30, October 31,
1997 1996
(UNAUDITED) (AUDITED)
ASSETS
Current Assets
Cash and Cash Equivalents $ 239,603 $ 781,777
Marketable Securities at Fair Value 883,000 741,332
Accounts Receivable 577,858 928,998
Prepaid Expenses and Other 19,148 26,275
Inventory 936,303 784,643
__________ __________
Total Current Assets 2,655,912 3,263,025
Other Assets
Cost in Excess of Fair Market
Value of Net Assets of Business
Acquired, net 2,329,936 2,380,829
Investments - Long Term at
Fair Value 1,440,000 800,000
Other 2,961 3,886
__________ __________
Total Other Assets 3,772,897 3,184,715
Property and Equipment, net 127,015 147,812
__________ __________
TOTAL ASSETS $6,555,824 $6,595,552
========== ==========
See Accompanying Notes to Condensed Financial Statements.
<PAGE>
ASTRO COMMUNICATIONS, INC.
CONDENSED BALANCED SHEET
AT JULY 31, 1997 AND OCTOBER 31, 1996
July 31, October 31,
1997 1996
(UNAUDITED) (AUDITED)
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities
Accounts Payable and Accrued
Liabilities $ 337,209 $ 699,763
Due Former Unilux Shareholders 4,964 592,964
Income Tax Payable 58,377 58,719
Line of Credit 300,000
____________ ____________
Total Current Liabilities $ 700,550 $ 1,351,446
Stockholders' Equity
Common Stock (4,241,856 Outstandings) 71,818 71,818
Capital in Excess of Par Value 10,209,482 10,209,482
Accumulated Deficit (1,632,059) (2,243,227)
____________ ____________
8,649,241 8,038,073
Less: Treasury Stock at Cost (2,793,967) (2,793,967)
(2,939,944 shares at 10/31/96
2,939,944 shares at 4/30/97) ___________ ___________
Total Stockholders' Equity $ 5,855,274 $ 5,244,106
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 6,555,824 $ 6,595,552
============ ============
See Accompanying Notes to Condensed Financial Statements.
<PAGE>
ASTRO COMMUNICATIONS, INC.
CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTH PERIODS ENDED
APRIL 30, 1997 AND APRIL 30, 1996
April 30, April 30,
1997 1996
(UNAUDITED) (AUDITED)
Sales $1,098,337 $ 974,710
Cost of Goods Sold 309,057 265,547
__________ __________
Gross Profit 789,280 709,163
General and Administrative Expenses 607,227 510,682
__________ __________
Income from Operations 182,053 198,481
Investment and Other Income 151,332 83,139
__________ __________
Income Before Provision for Income Taxes 172,592 160,286
Provision for Income Taxes 17,360 18,518
__________ __________
Net Income $ 316,025 $ 263,102
Net Income per Weighted Average
Common Share $ 0.07 $ 0.05
Weighted Average Common Shares
Outstanding 4,241,856 4,252,067
Common Shares Outstanding at end
of Period 4,241,856 4,249,856
See Accompanying Notes to Condensed Financial Statements.
<PAGE>
ASTRO COMMUNICATIONS, INC.
CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTH PERIODS ENDED
JULY 31, 1997 AND JULY 31, 1996
April 30, April 30,
1997 1996
(UNAUDITED) (AUDITED)
Sales $2,962,935 $3,207,302
Cost of Goods Sold 802,739 887,773
__________ __________
Gross Profit 2,160,196 2,319,529
General and Administrative Expenses 1,728,778 1,553,809
__________ __________
Income from Operations 431,418 765,720
Investment and Other Income 224,184 206,687
__________ __________
Income Before Provision for Income Taxes 655,602 972,407
Provision for Income Taxes 44,434 71,627
__________ __________
Net Income $ 611,168 $ 900,780
Net Income per Weighted Average
Common Share $ 0.14 $ 0.21
Weighted Average Common Shares
Outstanding 4,241,856 4,258,238
Common Shares Outstanding at end
of Period 4,241,856 4,249,656
See Accompanying Notes to Condensed Financial Statements.
ASTRO COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIODS ENDED
APRIL 30, 1997 AND APRIL 30, 1996
April 30, April 30,
1997 1996
(UNAUDITED) (UNAUDITED)
Cash Flows from Operating Activities
Net Income $ 611,168 $ 900,780
__________ ___________
Adjustments to Reconcile Net Income
to Net Cash (provided by) Operating
Activities:
Depreciation and Amortization 124,079 114,662
Net Book Value of Rental Equipment
Sold 13,315 14,736
Gain on Sale of Investments (7,752.) (9,137.)
Unrealized Gain on Investments (125,262.) (132,000.)
(Increase) Decrease in Accounts
Receivable 207,696 (126,016.)
(Increase) Decrease in Interest
Receivable -- --
(Increase) Decrease in Inventory (206,324.) (235,664.)
(Increase) Decrease in Prepaid
Expenses 7,127 21,067
(Increase) Decrease in Security
Deposits -- (500.)
(Increase) Decrease in Deferred Lease
Costs 925 2,084
Increase (Decrease) in Accounts
Payable 21,586 68,477
Increase (Decrease) in Accrued
Liabilities (384,140.) (7,563.)
Increase (Decrease) in Corporate
Taxes Payable (342.) (88,510.)
__________ ___________
Net Cash Provided By (Used in)
Operating Activities 262,076 525,333
__________ ___________
Cash Flows from Investing Activities
Capital Expenditures (11,040.) (4,814.)
Proceeds from Sale of Investments 252,437 1,310,542
Purchase of Investments (792,997.) (1,100,000.)
__________ ___________
Net Cash Provided by (Used in)
Investing Activities (551,600.) 205,728
__________ ___________
Cash Flows from Financing Activities
Payments on Notes Payable -- (833)
Receipt of Loan & Line of Credit 535,350 10,000
Repurchase of Treasury Stock -- (62,865)
Net Cash Provided by (Used in)
Financing Activities (588,000.) (479,043.)
__________ ___________
Increase (Decrease) in Cash and
Cash Equivalents (542,174.) (532,741.)
Cash and Cash Equivalents - Beginning 781,777 188,050
__________ ___________
Cash and Cash Equivalents - Ending 239,603 $ 386,370
Supplemental Disclosures of Cash Flow
Information
Cash Paid For:
Interest $ 9,846 $ --
Income Taxes 40,591 19,000
Non-Cash Investing and Financing Activities
During the three months ended July 31, 1997 and 1996, the Company transferred
$54,664 and $53,643 of Inventory to Rental Equipment.
During the year ended October 31, 1996, the Company capitalized as goodwill
$588,905, which represents contingent payments to former Unilux shareholders.
ASTRO COMMUNICATIONS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. In the opinion of the Company, the accompanying condensed financial
statements contain all adjustments (consisting only of normal recurring
accruals) necessary to present fairly the results of operations and changes
in financial position for the three months ended July 31, 1997.
2. The results of operations for the three months ended July 31, 1997 are
not necessarily indicative of the results expected for the full year.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONDENSED FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
During the nine months ended July 31, 1997 the Company's cash balances decreased
from $542,000 while short term debt increased $300,000. The $842,000 reduction
in liquidity occurred as a result of making a $588,000 payment to former Unilux
shareholders and the net purchase of $540,000 of securities. These items used
$1,128,000 of cash. Net income for the period amounted to $611,000 and the net
income plus the use of $542,000 cash balances during the period provided
$1,153,000 to fund the $1,128,000. For the quarter ended July 31, 1997, the
Company's cash balances increased while the Company's short term debt decreased
in amounts consistent with the $316,000 earned in the quarter. The company's
cash and marketable securities continue to be in excess of operating cash needs.
RESULTS OF OPERATIONS
Sales for the quarter ended July 31, 1997, increased by 13% over the prior year.
Gross profit margins from Unilux were virtually unchanged from the prior year,
and gross profits increased from $709,000 to $789,000. The Company's investment
operation enjoyed an excellent quarter with investment income of $151,000 versus
$83,000 generated in the prior year. General and administrative expenses
increased from $510,000 to $607,000; a 19% increase. This increase is higher
than desirable and above the historic level, and occurred across several cost
categories at both the Parent and Unilux operations. These expenses are being
closely monitored. Combining the above accounts resulted in a quarterly
increase in income before taxes from $282,000 to $333,000; an 18% increase. The
13% sales gain from Unilux was in line with management's expectation while
the investment income was higher than anticipated for the quarter. Due to the
volatility of some of the company's investments in marketable securities,
income for the final quarter of the year cannot be foreseen at this time.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material pending legal proceedings other than ordinary
litigation incidental to the business to which the Company or its
subsidiaries is a party.
ITEM 2. CHANGES IN SECURITIES - None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following documents are exhibits to this Form 10-QSB. Each document
marked by an asterisk (*) is hereby incorporated by reference to the identical
document contained in the Registrant's Annual Report on form 10-K for the fiscal
year indicated.
Exhibit
Number Document
3(a) *Registrant's Amended Articles of Incorporation (filed Exhibit 3(a)
to Form 10-K for fiscal year ended 10/31/88)
3(b) *Registrant's Amended By-Laws approved July 18, 1983 (filed as
Exhibit 3(b) to Form 10-K for fiscal year ended 10/31/88)
4(b) *Restated Stock Purchase Agreement dated September 12, 1985 (without
exhibits) (filed as Exhibit 4(a)(xvi) to form 10-K for fiscal year
ended 9/30/85)
4(c) *Amendment to Stock Purchase Agreement dated September 12, 1985 with
Amendment dated January 1, 1986 (without exhibits) (filed as
Exhibit 4(a)(xvii) to Form 10-K for fiscal year ended 9/30/85)
4(d) *Escrow Agreement dated September 13, 1985 covering NAFE purchase
(filed as Exhibit 4(a)(vii) to Form 10-K for fiscal year ended
9/30/85)
10(a) *1982 Incentive Stock Option Plan for Employees of Registrant and
subsidiaries (filed as Exhibit to Form 10-K for fiscal year ended
10/31/88)
10(b) *Loan Agreement dated as of April 30, 1997 by and between American
Bank and Trust Company of Chicago and Registrant (filed as Exhibit
to Form 10-QSB for the quarter ended April 30, 1997)
10(c) *Amendment to Loan and Security Agreement (Item 10(b) above) dated
April 30, 1997 (filed as Exhibit to Form 10-QSB for the quarter
ended April 30, 1997)
10(d) *Promissory Note of Registrant to American Bank and Trust Company of
Chicago dated April 30,1 997 (filed as Exhibit to Form 10-QSB for
the quarter ended April 30, 1997)
10(e) *Stock Purchase Agreement dated October 30, 1990 by and between
various stockholders of Unilux, Inc., dealing with the acquisition
of 94% of the outstanding common stock of Unilux, Inc. (filed as
Exhibit 10(h) to Form 10-K for the fiscal period ended 10/31/91)
10(f) *Unilux, Inc. Profit Sharing Plan (filed as Exhibit 10(f) to form
10-K for the fiscal period ended 10/31/92)
10(g) *Stock Purchase Agreement dated January 24, 1992 between Charles F.
Sarratt and Astro Communications, Inc. (filed as Exhibit 10(g) to
form 10-K for the fiscal period ending 10/31/92)
10(j) *Assets Purchase Agreement dated as of 10/20/94 by and between
National Association for Female Executives, Inc., the Company and
NAFE Acquisition Corporation (filed as Exhibit 10(j) to Form 8-K
dated 10/25/94)
16 *Form 8-K dated September 11, 1989 containing letter from Ernst &
Young dated September 15, 1989 regarding a change in certifying
accountant (filed as Exhibit to Form 10-K for fiscal year ended
10/31/89)
22 *Subsidiaries of registrant (filed as Exhibit 22 to Form 10-K for
the fiscal year ending 10/31/92)
27 Financial Date Schedule
(b) Reports on Form 8-K
There were no reports on form 8-K filed during the three months ended April
30, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ASTRO COMMUNICATIONS, INC.
(Registrant)
/s/ Steven A. Hirsch September 3, 1997
__________________
______________________ Date
STEVEN A. HIRSH
Chairman and President
(Chief Executive Officer and
Chief Financial Officer)
<TABLE> <S> <C>
<ARTICLE>5
<CIK> 0000351385
<NAME> ASTRO COMMUNICATIONS, INC.
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-1-1995
<PERIOD-END> JUL-31-1997
<CASH> 239,603
<SECURITIES> 883,000
<RECEIVABLES> 574,458
<ALLOWANCES> 0
<INVENTORY> 936,303
<CURRENT-ASSETS> 2,655,912
<PP&E> 1,161,891
<DEPRECIATION> 1,034,876
<TOTAL-ASSETS> 6,555,824
<CURRENT-LIABILITIES> 700,550
<BONDS> 0
0
0
<COMMON> 71,818
<OTHER-SE> 8,649,241
<TOTAL-LIABILITY-AND-EQUITY> 6,555,824
<SALES> 1,098,000
<TOTAL-REVENUES> 1,249,000
<CGS> 309,000
<TOTAL-COSTS> 933,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,000
<INCOME-PRETAX> 333,000
<INCOME-TAX> 17,000
<INCOME-CONTINUING> 316,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 316,000
<EPS-PRIMARY> 0.07
<EPS-DILUTED> 0
</TABLE>
