<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 December 31, 1996
-----------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
---------------- -------------------
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 ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Checkmark whether the registrant has filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934
subsequent to the distribution of securities under a plan confirmed by a court.
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 February 10, 1997, common
shares outstanding were 5,375,363.
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ASTREX, INC.
INDEX
PAGE
NO.
PART I:
FINANCIAL STATEMENTS:
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1996 (UNAUDITED) AND MARCH 31, 1996 . . . . . . 1
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
NINE MONTHS AND THREE MONTHS ENDED
DECEMBER 31, 1996 AND 1995 . . . . . . . . . . . . . . . . 2
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
NINE MONTHS ENDED DECEMBER 31, 1996 AND 1995 . . . . . . . . 3
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) . . . 4
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS . . . . . 5-6
PART II:
OTHER INFORMATION AND SIGNATURES . . . . . . . . . . . . . . . . . . . 7
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<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
ASTREX, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1996 MARCH 31, 1996
(UNAUDITED)
------------------- ------------------
(000) OMITTED
CURRENT ASSETS:
<S> <C> <C>
CASH $3 $2
ACCOUNTS RECEIVABLE (NET OF ALLOWANCE
FOR DOUBTFUL ACCOUNTS OF $86 AT DECEMBER
31, 1996 AND $87 AT MARCH 31, 1996) 1,402 1,765
MERCHANDISE INVENTORIES 3,357 3,934
PREPAID EXPENSES AND OTHER
CURRENT ASSETS 77 21
-- --
TOTAL CURRENT ASSETS 4,839 5,722
PROPERTY, PLANT AND EQUIPMENT AT COST (NET OF
ACCUMULATED DEPRECIATION OF $232 AT DECEMBER
31, 1996 AND $185 AT MARCH 31, 1996) 689 692
--- ---
TOTAL ASSETS $5,528 $6,414
====== ======
CURRENT LIABILITIES:
LOANS PAYABLE $1,276 $1,782
ACCOUNTS PAYABLE 875 1,650
ACCRUED LIABILITIES 419 280
--- ---
TOTAL CURRENT LIABILITIES 2,570 3,712
----- -----
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 DECEMBER 31, 1996 AND
5,090,363 AT MARCH 31, 1996 54 51
ADDITIONAL PAID-IN CAPITAL 3,604 3,548
ACCUMULATED DEFICIT (690) (897)
---- ----
2,968 2,702
LESS: DEFERRED COMPENSATION (10) -
--- ---
TOTAL SHAREHOLDERS' EQUITY 2,958 2,702
----- -----
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $5,528 $6,414
====== ======
</TABLE>
SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.
1
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<TABLE>
<CAPTION>
ASTREX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
NINE MONTHS ENDED THREE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995
--------------------------- ----------------------------
(000) OMITTED (000) OMITTED
<S> <C> <C> <C> <C>
Net sales $10,977 $9,786 $3,483 $3,308
Cost of sales 8,300 7,366 2,625 2,482
----- ----- ----- -----
Gross profit 2,677 2,420 858 826
Selling, general and
administrative expenses 2,302 2,016 765 690
----- ----- --- ---
Income from operations 375 404 93 136
Interest expense 137 176 43 59
--- --- -- --
Income before provision
for income taxes 238 228 50 77
Provision for income taxes 31 11 14 8
-- -- -- -
Net income $207 $217 $36 $69
==== ==== === ===
Per share data for the nine months and three months ended december 31, 1996 and 1995 are as follows:
Weighted average number of
common shares outstanding 5,334,781 4,912,585 5,375,363 5,090,363
========= ========= ========= =========
Net income per share $0.04 $0.04 $0.01 $0.01
===== ===== ===== =====
</TABLE>
SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS.
2
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<TABLE>
<CAPTION>
ASTREX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE NINE MONTHS ENDED DECEMBER 31,
1996 1995
--------------------------------------
(000) OMITTED
Cash Flows From Operating Activities:
<S> <C> <C>
Net income $207 $217
ADJUSTMENTS TO RECONCILE NET INCOME TO NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Depreciation and amortization 46 42
Stock award compensation expense 3 12
CHANGES IN OPERATING ASSETS AND LIABILITIES:
Decrease in accounts receivable 363 11
(Increase) decrease in prepaid expenses and
other current assets (56) 46
Decrease in merchandise inventories 577 43
Decrease in accounts payable (775) (341)
Increase (decrease) in accrued liabilities 139 (75)
--- ---
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 504 (45)
--- ---
Cash flows used in investing activities:
Purchases of fixed assets (44) (24)
--- ---
NET CASH USED IN INVESTING ACTIVITIES (44) (24)
--- ---
Cash flows from financing activities:
Proceeds from issuance of common stock 47 -
(Repayments of) proceeds from loans payable, net (506) 68
---- --
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (459) 68
---- --
Net increase (decrease) in cash for the nine months
ended December 31 1 (1)
Cash - beginning of period 2 3
Cash - end of period $3 $2
== ==
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
3
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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 December 31,
1996. The results of operations and cash flows for the nine month period ended
December 31, 1996 and 1995 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 and nine months ended December 31, 1996 and
1995 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 and nine month periods
ended December 31, 1996 and 1995 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. These financial statements, which are unaudited (except for
the Consolidated Balance Sheet as of March 31, 1996 which is audited), are based
on certain estimates and are subject to year end audit adjustments.
4
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ASTREX, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATIONS
RESULTS OF OPERATIONS
REVENUES
Sales increased by approximately $1,191,000, or 12.2%, for the nine months and
approximately $175,000, or 5.3%, for the three months ended December 31, 1996,
from the comparable nine and three month periods in 1995, respectively. This
increase is the result of the Company's improved and restructured marketing
efforts as well as stronger military sales.
GROSS PROFIT
The gross profit percentages decreased marginally to 24.4% from 24.7% for the
nine months, and to 24.6% from 25.0% for the three months ended December 31,
1996 and 1995, respectively. Despite ongoing price pressures, the Company was
able to maintain essentially stable margins.
SELLING, GENERAL & ADMINISTRATIVE
Selling, general and administrative expenses increased approximately $286,000,
or 14.2%, for the nine months and approximately $75,000, or 10.9%, for the three
months ended December 31, 1996 from the comparable previous nine and three month
periods in 1995. This increase is primarily due to the increase in salaries,
commissions and other costs needed to generate and support the higher sales
volume.
INTEREST EXPENSE
Interest expense decreased approximately $39,000 for the nine months, and
approximately $16,000 for the three months, ended December 31, 1996, from the
previous comparable nine and three month periods in 1995. This decrease is due
primarily to a lower loan balance and a reduction in the interest rate to
approximately 10.4% from approximately 12.4% for the nine months and to
approximately 10.3% from approximately 12.3% for the three months ended December
31, 1996 and 1995, respectively.
5
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ASTREX, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company generated $504,000 in cash from its operating activities, and
$47,000 in proceeds from the issuance of restricted common stock to employees
(pursuant to approval by the Board of Directors). The Company used this cash
primarily to partially paydown the outstanding loan payable balance. The
Company's loan agreement, collateralized by substantially all of the Company's
assets, provides for a line of credit based on the amount of the Company's
inventory and accounts receivable, but which cannot exceed $2,500,000. The term
of the loan presently expires on July 31, 1997 at which time the Company
anticipates, but cannot assure, that it will be renewed or replaced. The
Company's relations with its secured lender are satisfactory. The Company
believes that its current cash position as well as its available credit facility
are adequate for the foreseeable future. The amount outstanding under this loan
was approximately $1,276,000 at December 31, 1996 and $1,782,000 at March 31,
1996.
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) to the Form
of Astrex, Inc.(a Delaware 10-K of the Company for year ended
corporation) March 31, 1993
3 (b) By-Laws of Astrex, Inc., Filed as Exhibit 3 (b) to the Form
as amended 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: February 11, 1997 By: s/ Michael McGuire
----------------- ----------------------
Michael McGuire
President
Chief Executive Officer
By: s/ Irene S. Marcic
----------------------
Irene S. Marcic
Chief Financial Officer, Vice President,
Treasurer and Secretary
7
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Financial Statements at December 31, 1996 (unaudited) and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> DEC-31-1996
<CASH> 3
<SECURITIES> 0
<RECEIVABLES> 1488
<ALLOWANCES> (86)
<INVENTORY> 3357
<CURRENT-ASSETS> 4839
<PP&E> 921
<DEPRECIATION> (232)
<TOTAL-ASSETS> 5528
<CURRENT-LIABILITIES> 2570
<BONDS> 0
0
0
<COMMON> 54
<OTHER-SE> 2904
<TOTAL-LIABILITY-AND-EQUITY> 5528
<SALES> 10977
<TOTAL-REVENUES> 10977
<CGS> 8300
<TOTAL-COSTS> 8300
<OTHER-EXPENSES> 2302
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 137
<INCOME-PRETAX> 238
<INCOME-TAX> 31
<INCOME-CONTINUING> 207
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 207
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
