<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 1997
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-4530
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ASTREX, INC.
(Exact name of small business issuer as specified in its charter)
DELAWARE 13-1930803
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
205 EXPRESS STREET, PLAINVIEW, NEW YORK 11803
(Address of principal executive offices)
(516) 433-1700
(Issuer's telephone number, including area code)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if
changed since last report)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
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 CORPORATE ISSUERS
State the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date. As of August 7, 1997 common
shares outstanding were 5,375,363.
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ASTREX, INC.
INDEX
Page
No.
PART 1:
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FINANCIAL STATEMENTS:
Consolidated Balance Sheets
June 30, 1997 (unaudited) and March 31, 1997 1
Consolidated Statements of Income (unaudited)
Three months ended June 30, 1997 and 1996 2
Consolidated Statements of Cash Flows (unaudited)
Three months ended June 30, 1997 and 1996 3
Notes to Consolidated Financial Statements (unaudited) 4
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS 5-6
PART II:
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OTHER INFORMATION AND SIGNATURES 7
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PART I - FINANCIAL INFORMATION
ASTREX, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, 1997 March 31, 1997
(Unaudited)
---------------- ----------------
(000) Omitted
<S> <C> <C>
Current Assets:
Cash $2 $2
Accounts receivable (net of allowance
for doubtful accounts of $87
at June 30, 1997
and at March 31, 1997) 1,720 1,584
Merchandise inventories 2,972 3,313
Prepaid expenses and other
current assets 124 67
---------------- ----------------
Total current assets 4,818 4,966
Property, plant and equipment at cost (net of
accumulated depreciation of
$277 at June 30,
1997 and $249 at March 31, 1997) 823 841
---------------- ----------------
TOTAL Assets $5,641 $5,807
================ ================
Current Liabilities:
Accounts payable 1,040 868
Accrued liabilities 368 483
Current portion of
capital lease obligation 45 43
---------------- ----------------
Total current liabilities 1,453 1,394
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Capital lease obligation 114 125
Loans payable 891 1,226
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2,458 2,745
Shareholders' Equity:
Preferred Stock, Series A - issued, none -- --
Preferred Stock, Series B - issued, none -- --
Common Stock - par value $.01 per
share; authorized, 15,000,000 shares;
issued, 5,375,363 at June 30, 1997
and at March 31, 1997 54 54
Additional paid-in capital 3,621 3,621
Accumulated deficit (472) (591)
---------------- ----------------
3,203 3,084
Less: deferred compensation (20) (22)
---------------- ----------------
Total shareholders' equity 3,183 3,062
---------------- ----------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $5,641 $5,807
================ ================
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
1
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ASTREX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
1997 1996
------------------------------
(000) Omitted
<S> <C> <C>
Net sales $3,963 $3,759
Cost of sales 3,033 2,855
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Gross profit 930 904
Selling, general and
administrative expenses 766 772
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Income from operations 164 132
Interest expense 38 49
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Income before provision
for income taxes 126 83
Provision for income taxes 8 8
------ ------
NET INCOME $118 $75
====== ======
Per share data for the three months ended June 30, 1997 and 1996 are as follows:
Weighted average
number of
common shares
outstanding 5,375,363 5,255,857
========= =========
Net income per share $0.02 $0.01
========= =========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
2
<PAGE>
ASTREX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED JUNE 30,
1997 1996
------------------------------------
(000) Omitted
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $118 $75
ADJUSTMENTS TO RECONCILE NET INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Depreciation and amortization 28 14
Stock compensation 2 1
CHANGES IN ASSETS AND LIABILITIES:
(Increase) decrease in accounts receivable, net (136) 204
Increase in prepaid expenses and other
current assets (57) (68)
Decrease in inventory 341 405
Increase (decrease) in accounts payable 172 (431)
Decrease in accrued liabilities (115) (13)
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NET CASH PROVIDED BY OPERATING ACTIVITIES 353 187
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Cash flows used in investing activities:
Capital expenditures (9) (5)
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NET CASH USED IN INVESTING ACTIVITIES (9) (5)
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Cash flows from financing activities:
Proceeds from issuance of common stock -- 47
Principal payments under capital lease obligations (9) --
Repayments of loans payable, net (335) (229)
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NET CASH USED IN FINANCING ACTIVITIES (344) (182)
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Net increase in cash for the three months
ended June 30 0 0
Cash - beginning of period 2 2
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Cash - end of period $2 $2
======= =======
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
3
<PAGE>
ASTREX, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED FINANCIAL STATEMENTS
In the opinion of the Company, the accompanying unaudited consolidated financial
statements contain all adjustments (consisting only of normal recurring
accruals) necessary to present fairly its financial position as of June 30,
1997. The results of operations and cash flows for the three month period ended
June 30, 1997 and 1996 are not necessarily indicative of the results to be
expected for the full year. In the opinion of management, the information in
this interim report for the three months ended June 30, 1997 and 1996 presents
fairly the Company's financial position consistent with the Company's accounting
practices and principles used in interim reports. Accordingly, certain items
included in these statements are based upon best estimates, particularly cost of
goods sold. For the three month periods ended June 30, 1997 and 1996 these costs
have principally been determined by utilizing perpetual inventory records. The
calculation of the actual cost of goods sold amount is predicated upon a
physical inventory taken only at the end of each fiscal year.
4
<PAGE>
ASTREX, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATIONS
RESULTS OF OPERATIONS
Net income for the three months ended june 30, 1997 was approximately
$118,000, an increase of 57% over the same quarter last fiscal year. This
increase is principally the result of higher sales and lower expenses.
Sales increased by approximately $204,000, or 5.4%, for the three months
ended June 30, 1997, from the comparable three month period in 1996. This
increase is the result of the Company's improved and restructured marketing
efforts.
Gross profit percentages decreased marginally to 23.5% from 24.0% for the
three months ended June 30, 1997 from the comparable period in 1996. Despite
ongoing price pressures, the Company was able to maintain essentially stable
margins.
Selling, general and administrative expenses decreased approximately
$6,000, or 1%, for the three months ended June 30, 1997 from the comparable
previous three month period in 1996, in spite of higher sales and commission
expense.
Interest expense decreased approximately $11,000 for three months ended
June 30, 1997, from the previous comparable three month period in 1996. This
decrease is due primarily to a lower loan balance. The interest rates for the
two periods was 10.50%. As of July 9, 1997, the Company entered into a new
lending agreement at a substantially lower interest rate.
5
<PAGE>
ASTREX, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company generated $353,000 in cash from its operating activities which was
used to primarily paydown the outstanding loan payable balance. At June 30,
1997, the Company had working capital of $3,365,000 and its stockholders' equity
was $3,183,000. The Company believes that its present working capital, cash
generated from operations and amounts available under the new loan agreement
will be sufficient to meet its cash needs during the next year. The Company's
principal credit facility is a line of credit ("Line") measured by its inventory
and receivables and secured by substantially all of the Company's assets
including a negative pledge of (i.e. that the Company will not otherwise
mortgage to any other person) its Plainview office/warehouse facility. On June
30, 1997 the Company owed approximately $891,000 on the Line. On July 9, 1997,
the Company changed its secured lender. The terms of the new secured lending
arrangement (expiring in July 1999) are substantially the same as the previous
arrangement except that (i) the lender is a commercial bank, and (ii) the
interest rate is appreciably lower. The Company's relationship with its new and
previous secured lenders is and was satisfactory. The change in secured lenders
was voluntarily made by the Company in order to obtain a lower interest rate.
The Company believes that the new secured lending arrangement will be adequate
for the foreseeable future.
The Company entered into a capital lease for a new computer hardware and
software system for approximately $160,000. The lease is effective January 1,
1997 and will be repaid over a term of 4 years. The Company has no other plans
for major comittments for capital expenditures.
6
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(A) Exhibits
Previously Filed and
Incorporated
Exhibit Description by reference or Filed Herewith
- ------- ----------- ------------------------------
3 (a) Certificate of Incorporation Filed as Exhibit 3 (a)
of Astrex, Inc. to the Form 10-K
(a Delaware corporation) of the Company for year
ended March 31, 1993
3 (b) By-Laws of Astrex, Inc., as amended Filed as Exhibit 3 (b)
to the Form
10-QSB of the Company
for the quarter
ended September 30, 1996
27 Financial Data Schedule Filed herewith
(B) Reports on Form 8-K:
None
SIGNATURES
In accordance with the requirements of Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ASTREX, INC.
Date: August 11, 1997 By: s/ Michael McGuire
---------------- ------------------
Michael McGuire
Director, President and
Chief Executive Officer
By: s/ Irene S. Lyons
-----------------
Irene S. Lyons
Chief Financial Officer,
Vice President,
Treasurer and Secretary
7
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Financial Statements at June 30, 1997 (unaudited) and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> JUN-30-1997
<CASH> 2
<SECURITIES> 0
<RECEIVABLES> 1807
<ALLOWANCES> (87)
<INVENTORY> 2972
<CURRENT-ASSETS> 4818
<PP&E> 1100
<DEPRECIATION> (277)
<TOTAL-ASSETS> 5641
<CURRENT-LIABILITIES> 1453
<BONDS> 0
0
0
<COMMON> 54
<OTHER-SE> 3129
<TOTAL-LIABILITY-AND-EQUITY> 5641
<SALES> 3963
<TOTAL-REVENUES> 3963
<CGS> 3033
<TOTAL-COSTS> 3033
<OTHER-EXPENSES> 766
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 38
<INCOME-PRETAX> 126
<INCOME-TAX> 8
<INCOME-CONTINUING> 118
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 118
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
