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 March 31, 1995
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended to
Commiission 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 has 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, as of the latest practicable date:
March 31, 1995 - 4,573,281<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 nine months ended March 31, 1995 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
March 31, June 30,
1995 1994
(Unaudited)
(In Thousands)
ASSETS
Current Assets:
Cash and cash equivalents $12,594 $22,916
Marketable securities (at lower
of cost or market) 20,748 10,390
Accounts receivable (less estimated
doubtful accounts of $58,000 in March
1995 and June 1994) 3,657 1,977
Accounts receivable - claims 519 1,108
Inventories (Note 1) 3,974 4,618
Prepaid expenses and other current assets 435 227
------- -------
Total current assets $41,927 $41,236
Long-term investments 275 275
Factory, laboratory and other equipment at
cost (less accumulated depreciation of
$2,553,000 in March 1995 and $2,414,000
in June 1995) 240 362
Excess of cost over the fair value of net
assets acquired, net of accumulated
amortization 242 277
Other assets 219 233
------- -------
TOTAL $42,903 $42,383
======= =======
LIABILITIES
Current liabilities:
Accounts payable $ 446 $ 352
Accrued payroll and employee benefits 248 296
Other accrued liabilities 173 347
Income taxes payable 191 11
------- -------
Total current liabilities $ 1,058 $ 1,006
Deferred income taxes 8,000 8,000
------- -------
Total liabilities $ 9,058 $ 9,006
SHAREHOLDERS' EQUITY
Capital Stock
Common-authorized 10,000,000 shares, $.10
par value; issued and outstanding 4,573,281
shares in March 1995 and 4,548,848 shares
in June 1994 $ 457 $ 455
Additional paid-in capital 6,804 6,529
Retained Earnings 26,584 26,393
------- -------
Total shareholders' equity $33,845 $33,377
------- -------
TOTAL $42,903 $42,383
======= =======
Inventories:
Estimated inventories are comprised of the following:
Raw material $ 1,761 $ 2,100
Work in process 2,213 2,518
------- -------
TOTAL $ 3,974 $ 4,618
======= =======
<PAGE>
ASTROSYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Nine Months Ended Three Months Ended
March 31, March 31,
1995 1994 1995 1994
(In Thousands)
(Except Earnings per Common Share)
Sales $8,554 $ 8,407 $3,329 $3,202
------ ------- ------ ------
Cost of sales (Note 1) 6,184 6,405 2,296 2,470
Selling, general and administrative
expenses 3,204 3,182 1,112 1,094
------ ------ ------ ------
9,388 9,587 3,408 3,564
Earnings (loss) before other income (834) (1,180) (79) (362)
Investment and other income (net) 1,153 757 461 149
------ ------ ------ ------
Earnings (loss) before taxes on income 319 (423) 382 (213)
Income taxes (benefit) (Note 2) 128 (575) 153 (88)
------ ------ ------ ------
Earnings (loss) before cumulative effect
of change in accounting principle 191 152 229 (125)
Cumulative effect of change in account-
ing principle - adoption of SFAS
No. 109 (Note 2) 404
------ ------ ------ ------
Net earnings (loss) $ 191 $ 556 $ 229 $ (125)
====== ====== ====== ======
Primary and fully diluted (loss) earnings per share (Note 2):
Earnings (loss) before cumulative effect of change
in accounting principle $ .04 $ .03 $ .04 $ (.02)
Cumulative effect of change in
accounting principle .08
------ ------ ------ ------
Net earnings (loss) per share $ .04 $ .11 $ .04 $ (.02)
====== ====== ====== ======
Number of shares
Primary 5,285 5,308 5,297 5,296
Fully Diluted 5,285 5,312 5,297 5,311
<PAGE>
ASTROSYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
March 31, March 31,
1995 1994
(In Thousands)
Cash flows from operating activities:
Net earnings $ 191 $ 556
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Cumulative effect of change in
accounting principle (404)
Depreciation and amortization 174 143
Reversal of excess income tax accruals (400)
Unrealized loss on securities 100
Compensatory issuance of stock options 175 29
Shares issued to retirement plan 102 103
Provision for doubtful accounts 20
Changes in operating assets and liabilities:
(Increase) Decrease in accounts receivable (1,091) 3,381
Decrease in inventories 644 1,317
(Increase) Decrease in prepaid expenses
and other current assets (194) 143
(Increase) in prepaid and refundable income
taxes (160)
Increase (Decrease) in accounts payable 94 (331)
(Decrease) in accrued payroll and
employee benefits (48) (56)
Increase (Decrease) in other accrued
liabilities (174) 5
(Decrease) Increase in taxes payable 180 (24)
------- -------
Net cash provided by operating activities 53 4,422
------- -------
Cash flows from investing activities:
Distribution received from long-term investment 79
Marketable securities (10,358) (521)
(Acquisition) of equipment (17) (81)
------- -------
Net cash (used in) investing activities (10,375) (523)
------- -------
Cash flows from financing activities:
Purchase and retirement of shares (172)
-------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (10,322) 3,727
Cash and cash equivalents, beginning
of period 22,916 19,332
------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD $12,594 $23,059
======= =======<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 nine months ended March 31,
1994 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>
MANAGEMENTS 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
authorization 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
transactions. Since that time 408,727 shares have been repurchased. No
repurchases were made during the nine month period ending March 31, 1995.
Inflation has not materially impacted the operations of the Company.
Results of Operations
- ---------------------
Comparison of nine months ended March 31, 1995 vs nine months ended March 31,
1994
- ----------------------------------------------------------------------------
Cost of Sales as a percentage of revenue for the nine months ended March
31, 1995 was 72% of revenue versus 76% for the prior equivalent period. Cost
of Sales as a percentage of revenues was 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. The general trend in Cost of Sales as a
percentage of revenue is increasing as sales orders and backlog continue to
decrease. Included in Cost of Sales are fixed expenses such as rent; in
addition, the Company's Government contracts and subcontracts require certain
fixed expenses such as quality assurance personnel, which cannot be reduced in
proportion to revenue.
Selling, General and Administrative expenses for the period ended March
31, 1995 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 March 31, 1995 was
higher than the prior equivalent period due to investments in higher interest
bearing securities.
In fiscal 1994, the 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 March 31, 1994 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 nine month period ended March 31, 1994 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
year 1995 will be below the prior year's results. Unless the Company is
successful on one of its major Defense Electronics proposal efforts prior to
the end of fiscal 1995, fiscal 1996 revenue could be substantially below
fiscal 1995 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 March 31, 1995 vs three months ended March
31, 1994
- ---------------------------------------------------------------------------
Cost of Sales as a percentage of revenue for the three months ended
March 31, 1995 was 69% of revenue versus 77% for the prior equivalent period.
Cost of Sales as a percentage of revenue was lower primarily due to shipment
of products with higher gross profit margins in the 1995 period.
Investment and other income for the three month period ended March 31,
1995 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>
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.
May 15, 1995 BY: /S/
Date Gilbert H. Steinberg, Vice President
May 15, 1995 /S/
Date Gilbert H. Steinberg, Treasurer and
Chief Financial Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<PERIOD-TYPE> 9-MOS QTR-3
<FISCAL-YEAR-END> JUN-30-1995 JUN-30-1995
<PERIOD-END> MAR-31-1995 MAR-31-1995
<CASH> 12,594 12,594
<SECURITIES> 20,748 20,748
<RECEIVABLES> 4,176 4,176
<ALLOWANCES> 58 58
<INVENTORY> 3,974 3,974
<CURRENT-ASSETS> 41,927 41,297
<PP&E> 2,793 2,793
<DEPRECIATION> 2,553 2,553
<TOTAL-ASSETS> 42,903 42,903
<CURRENT-LIABILITIES> 1,058 1,058
<BONDS> 0 0
<COMMON> 457 457
0 0
0 0
<OTHER-SE> 33,388 33,388
<TOTAL-LIABILITY-AND-EQUITY> 42,903 42,903
<SALES> 8,554 3,329
<TOTAL-REVENUES> 8,554 3,329
<CGS> 6,184 2,296
<TOTAL-COSTS> 9,388 3,408
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 319 382
<INCOME-TAX> 128 153
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 191 229
<EPS-PRIMARY> .04 .04
<EPS-DILUTED> .04 .04
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