U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1994
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended to
Commission File Number: 0-3344
ASTROSYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-5691210
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6 Nevada Drive, Lake Success, New York 11042
(Address of principal executive offices) (Zip Code)
(516) 328-1600
(Registrant's telephone number, including area code)
N/A
(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 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
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Check whether the issuer filed all documents and reports required to be
filed by Sections 12, 13 or 15 (d) of the Exchange Act after the distribution
of securites under a plan confirmed by a court. Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's classes of
common stock equity, as of the latest practicable date:
December 31, 1994 - 4,565,566<PAGE>
PART I - FINANCIAL INFORMATION
ASTROSYSTEMS, INC. AND SUBSIDIARIES
The financial information herein is unaudited. However, in the opinion of
management, such information reflects all adjustments (consisting only of
normal recurring accruals) necessary to a fair presentation of the results
of operations for the periods being reported. Additionally, it should be
noted that the accompanying condensed financial statements do not purport
to be complete disclosures in conformity with generally accepted accounting
principles.
The results of operations for the six months ended December 31, 1994 are not
necessarily indicative of the results of operations for the full fiscal year
ending June 30, 1995.
The balance sheet as at June 30, 1994 was condensed from the audited balance
sheet in the 1994 Annual Report on Form 10-KSB. All other financial
statements presented are unaudited. These condensed financial statements
should be read in conjunction with the Registrant's financial statements for
the year ended June 30, 1994.
<PAGE>
ASTROSYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
As at
December 31, June 30,
1994 1994
(Unaudited)
(In Thousands)
ASSETS
Current Assets:
Cash and cash equivalents $15,542 $22,916
Marketable securities (at lower
of cost or market) 16,806 10,390
Accounts receivable (less estimated
doubtful accounts of $58,000 in December
1994 and June 1994) 3,071 1,977
Accounts receivable - claims 1,083 1,108
Inventories 4,144 4,618
Prepaid expenses and other current assets 430 227
Total current assets $41,076 $41,236
Long-term investments 275 275
Factory, laboratory and other equipment at cost
(less accumulated depreciation of $2,506,000
in December 1994 and $2,414,000 in June 1994) 278 362
Excess of cost over the fair value of
net assets acquired, net of accumulated
amortization 254 277
Other assets 214 233
TOTAL $42,097 $42,383
======= =======
LIABILITIES
Current liabilities:
Accounts payable $ 179 $ 352
Accrued payroll and employee benefits 192 296
Other accrued liabilities 160 347
Income taxes payable 8 11
Total current liabilities $ 539 $ 1,006
Deferred income taxes 7,975 8,000
Total liabilities $ 8,514 $ 9,006
SHAREHOLDERS' EQUITY
Capital Stock
Common-authorized 10,000,000 shares, $.10
par value; issued and outstanding
4,565,566 shares in December 1994 and
4,548,848 shares in June 1994 $ 457 $ 455
Additional paid-in capital 6,771 6,529
Retained Earnings 26,355 26,393
Total shareholders' equity $33,583 $33,377
TOTAL $42,097 $42,383
======= =======
Inventories:
Estimated inventories are comprised of the following:
Raw material $ 1,771 $ 2,100
Work in process 2,373 2,518
TOTAL $ 4,144 $ 4,618
======= =======<PAGE>
ASTROSYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Six Months Ended Three Months Ended
December 31, December 31,
1994 1993 1994 1993
(In Thousands)
(Except Earnings per Common Share)
Sales $5,225 $5,205 $3,020 $3,062
Cost of sales (Note 1) 3,888 3,935 2,158 2,369
Selling, general and administrative
expenses 2,092 2,088 982 976
----- ----- ----- -----
5,980 6,023 3,140 3,345
(Loss) from operations (755) (818) (120) (283)
Investment and other income (net) 692 608 428 312
Earnings (loss) before taxes on income (63) (210) 308 29
Income taxes (benefit) (Note 2) (25) (487) 123 7
Earnings before cumulative effect of
change in accounting principle (38) 277 185 22
Cumulative effect of change in
accounting principle - adoption
of SFAS No. 109 (Note 2) 404
Net (loss) earnings $ (38) $ 681 $ 185 $ 22
======= ======= ======= =======
Primary and fully diluted (loss) earnings per share (Note 2):
Earnings (loss) before cumulative
effect of change in accounting
principle $ (.01) $ .05 $ .03 $ .00
Cumulative effect of change in
accounting principle .08
Net (loss) earnings per share $ (.01) $ .13 $ .03 $ .00
Number of shares
Primary 5,282 4,999 5,286 5,004
Fully Diluted 5,282 4,999 5,286 5,004<PAGE>
ASTROSYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
December 31, December 31,
1994 1993
(In Thousands)
Cash flows from operating activities:
Net (loss) earnings $ (38) $ 681
Adjustments to reconcile net (loss) earnings to net
cash (used in) provided by operating activities:
Cumulative effect of change in accounting
principle (404)
Depreciation and amortization 115 115
Reversal of income tax reserves no longer required (400)
Shares issued to retirement plan 69 61
Compensatory issuance of stock options 175 29
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable (1,069) 3,156
Decrease in inventories 474 497
(Increase) decrease in prepaid expenses and other
current assets (184) 170
(Increase) in prepaid and refundable income taxes (69)
(Decrease) in accounts payable (173) (228)
(Decrease) in accrued payroll
and employee benefits (104) (66)
(Decrease) in other accrued liabilities (187) (89)
(Decrease) in taxes payable (28) (24)
_______ _______
Net cash (used in) provided by operating
activities (950) 3,429
_______ ______
Cash flows from investing activities:
Distribution received from long-term investment 79
Marketable securities (6,416) 1,388
(Acquisition) of equipment (8) (69)
------- ------
Net cash (used in) provided by investing activities (6,424) 1,398
------- ------
Cash flows from financing activities:
Purchase and retirement of shares (124)
------
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS (7,374) 4,703
Cash and cash equivalents, beginning
of period 22,916 19,332
------ ------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $15,542 $24,035
====== ======<PAGE>
ASTROSYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Note 1) For interim financial statements the Registrant estimates its costs
of sales.
(Note 2) Income taxes
During the quarter ended September 30, 1993, the Company changed its
method of accounting for income taxes, effective as of July 1, 1993, to
comply with the provisions of Statement of Financial Accounting Standards
No. 109 (SFAS 109), "Accounting for Income Taxes." Deferred income taxes are
based on the liability method as prescribed by SFAS 109, which requires an
adjustment to the deferred tax liability to reflect income tax rates
currently in effect rather than historical rates. When income tax rates
increase or decrease, a corresponding adjustment to income tax expense is
currently recorded by applying the rate change to the cumulative temporary
differences. As permitted under SFAS 109, prior years financial statements
have not been restated. The cumulative effect of adopting SFAS 109 through
June 30, 1993 was $404,000.
Included in income taxes benefit for the period ended December 31, 1993
was a reversal made in the first quarter of Fiscal June 30, 1994 of federal and
state tax accruals of $400,000 or $.08 per share which are no longer required.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Liquidity, Capital Resources and Impact of Inflation
The Company's working capital did not materially change since June 30, 1994.
The Company announced on October 23, 1992 a Board of Directors author-
ization for the repurchase of up to 500,000 shares of Common Stock to be
made from time to time through open market and privately negotiated trans-
actions. Since that time 408,727 shares have been repurchased. No repurchases
were made during the six month period ending December 31, 1994.
Inflation has not materially impacted the operations of the Company.
Results of Operations
Comparison of six months ended December 31, 1994 vs six months ended
December 31, 1993
Cost of Sales as a percentage of revenue for the six months ended
December 31, 1994 was 74% of revenue versus 76% for the prior equivalent
period. Cost of Sales as a percentage of revenues were lower primarily due
to the settlement of a contract claim with the government for which a major
portion of the costs had been expensed in prior periods.
Selling, General and Administrative expenses for the period ended
December 31, 1994 included a non cash charge of $175,000 for the extension of
employee stock options. Selling, General and Administrative expenses did not
increase over the prior period by the amount of this charge, primarily due to a
decrease in commissions and other sales expenses.
Investment and other income for the period ended December 31, 1994 was
higher than the prior equivalent period due to the sale of floating rate
preferred stock and the investment of the proceeds in higher interest bearing
securities.
In 1993, cumulative effect of change in accounting principle is due to a
recalculation of deferred income taxes in compliance with Statement of
Financial Accounting Standards No. 109. In addition, included in Income Taxes
Benefit for the period ended December 31, 1993 is a reversal made in the first
quarter of fiscal June 30, 1994 of tax reserves in the amount of $400,000
(or $.08 per share) which are no longer required.
Net earnings for the six month period ended December 31, 1993 included
$404,000 or $.08 per share from the cumulative effect of a change in
accounting principle relating to accounting for income taxes (SFAS No. 109)
and 400,000 or $.08 per share relating to the effects of the reversal of
income tax reserves as discussed above.
Deliveries of Torpedo Power Supplies, which remain the Company's current
major defense product, are currently scheduled for completion in June of
1995. The Company is attempting to offset a prospective substantial
decline in Defense Electronics orders by increased sales for Industrial
Automation Products and Behlman Electronics as well as seeking niche Defense
Electronic markets such as repair and maintenance of the Company's products
and those of other manufacturers. However, there is no assurance that this
strategy will be successful in the long run and the Company anticipates
sales for fiscal 1995 will be below the prior year's results.
Due to the nature of the Company's business, there are significant
differences in period sales and therefore the results for a single period
are not necessarily indicative of the entire year.
Comparison of three months ended December 31, 1994 vs three months ended
December 31, 1993
Cost of Sales as a percentage of revenue for the three months ended
December 31, 1994 was 71% of revenue versus 77% for the prior equivalent
period. Cost of Sales were lower primarily due to the settlement of a
contract claim with the government for which a major portion of the costs had
been expensed in prior periods.
Investment and other income for the three month period ended
December 31, 1994 was higher than the prior equivalent period due to higher
interest rates on investments.
Due to the nature of the Company's business, there are significant
differences in period sales and therefore the results for a single period
are not necessarily indicative of the entire year.
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
On December 1, 1994 at an Annual Meeting of Stockholders, the stock-
holders of the Company elected a Board of five directors consisting of
Seymour Barth, Gilbert H. Steinberg, Elliot J. Bergman, Elliot D. Spiro and
Walter Steinberg, and ratified the appointment of Richard A. Eisner &
Company LLP as the Company's independent auditors for the fiscal year
ending June 30, 1995. The number of affirmative votes, negative votes and
abstentions with regard to the foregoing were as follows:
(i) Election of Directors
Voted for Did not vote
Nominee Election for Election
Seymour Barth 3,440,085 46,959
Gilbert H. Steinberg 3,439,085 47,959
Elliot J. Bergman 3,439,435 47,609
Elliot D. Spiro 3,440,484 46,560
Walter Steinberg 3,432,934 54,110
(ii) Ratification of Auditors
For: 3,444,624 Against: 16,878 Abstain: 25,542<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
ASTROSYSTEMS, INC.
February 13, 1995 BY:
Date Gilbert H. Steinberg, Vice President
February 10, 1995
Date Gilbert H. Steinberg, Treasurer and
Chief Financial Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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