<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- -- EXCHANGE ACT OF 1934
For the quarterly period ended October 28, 1995
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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 0-13200
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Astro-Med, Inc.
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(Exact name of registrant as specified in its charter)
Rhode Island 05-0318215
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
600 East Greenwich Avenue, West Warwick, Rhode Island 02893
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(Address of principal executive offices) (Zip Code)
(401) 828-4000
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(Registrant's telephone number, including area code)
________________________
Indicate by check mark whether the registrant (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 .
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $.05 Par Value - 5,031,242 shares
(excluding treasury shares) as of December 1, 1995
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ASTRO-MED, INC.
INDEX
Page No.
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Part I. Financial Information:
Consolidated Balance Sheets -
January 31, 1995 and October 28, 1995..................... 3
Consolidated Statements of Income -
Three Months Ended October 29, 1994 and October 28, 1995.. 4
Consolidated Statements of Income -
Nine Months Ended October 29, 1994 and October 28, 1995... 5
Consolidated Statements of Cash Flows -
Nine Months Ended October 29, 1994 and October 28, 1995... 6
Notes to Consolidated Financial Statements -
October 28, 1995.......................................... 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations....................... 8
Part II. Other Information................................... 10
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<PAGE>
Part I. FINANCIAL INFORMATION
ASTRO-MED, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
January 31, October 28,
ASSETS 1995 1995
---- ----
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and Cash Equivalents.................. $ 1,107,191 $ 1,508,725
Securities Available for Sale.............. 6,897,781 6,526,695
Accounts Receivable, Net................... 7,828,393 7,743,493
Inventories................................ 12,893,544 13,998,068
Prepaid Expenses and Other Current Assets.. 2,196,317 1,598,501
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Total Current Assets..................... 30,923,226 31,375,482
PROPERTY, PLANT AND EQUIPMENT 15,888,684 16,717,876
Less Accumulated Depreciation.............. 7,254,555 8,072,368
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8,634,129 8,645,508
OTHER ASSETS
Excess of Cost Over Net Assets Acquired.... 1,047,613 1,021,772
Other...................................... 1,572,326 1,614,099
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2,619,939 2,635,871
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$42,177,294 $42,656,861
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable........................... $ 2,850,382 $ 2,638,478
Note Payable to Bank....................... 200,000
Accrued Compensation....................... 1,015,956 879,033
Accrued Expenses........................... 802,321 591,581
Income Taxes............................... 715,633 624,300
Current Maturities of Long-Term Debt....... 51,703 51,703
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Total Current Liabilities................ 5,435,995 4,985,095
LONG-TERM DEBT, Less Current Maturities..... 244,072 194,072
EXCESS OF NET ASSETS ACQUIRED OVER COST..... 491,115 608,684
DEFERRED INCOME TAXES....................... 726,178 835,143
STOCKHOLDERS' EQUITY
Preferred Stock, $10 Par Value,
Authorized 100,000 Shares, None Issued....
Common Stock, $.05 Par Value, Authorized
13,000,000 Shares, Issued 5,118,268
and 5,120,810 Shares, Respectively........ 255,913 256,041
Additional Paid-In Capital................. 5,515,632 5,538,693
Retained Earnings.......................... 30,355,938 31,051,253
Treasury Stock, at Cost (77,566 Shares
and 90,566 Shares, Respectively).......... (672,755) (788,096)
Cumulative Translation Adjustment.......... (80,722) (28,090)
Net Unrealized Gain (Loss) on Securities
Available for Sale........................ (94,072) 4,066
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35,279,934 36,033,867
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$42,177,294 $42,656,861
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</TABLE>
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ASTRO-MED, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended
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October 29, October 28,
1994 1995
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<S> <C> <C>
Net Sales.................................... $11,220,838 $10,823,820
Cost of Sales................................. 6,253,668 6,587,639
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Gross Profit.................................. 4,967,170 4,236,181
Costs and Expenses:
Selling, General and Administrative......... 3,089,716 3,246,100
Research and Development.................... 688,613 591,821
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3,778,329 3,837,921
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Operating Income.............................. 1,188,841 398,260
Other Income (Expense):
Interest and Dividend Income................ 101,340 84,287
Interest Expense............................ (77,280) (429)
Other, Net.................................. 157,348 (2,747)
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181,408 81,111
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Income before Income Taxes.................... 1,370,249 479,371
Provision for Income Taxes.................... 478,000 199,000
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Net Income.................................... $ 892,249 $ 280,371
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Earnings Per Common Share..................... $.18 $.06
==== ====
Weighted Average Number of Common and Common
Equivalent Shares Outstanding............... 5,099,503 5,097,232
=========== ===========
Dividends Declared Per Common Share........... $.03 $.03
==== ====
</TABLE>
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ASTRO-MED, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Nine Months Ended
-----------------
October 29, October 28,
1994 1995
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<S> <C> <C>
Net Sales...................................... $26,865,409 $32,566,709
Cost of Sales.................................. 14,810,334 19,473,919
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Gross Profit................................... 12,055,075 13,092,790
Costs and Expenses:
Selling, General and Administrative.......... 8,187,415 10,126,673
Research and Development..................... 1,914,626 1,811,923
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10,102,041 11,938,596
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Operating Income............................... 1,953,034 1,154,194
Other Income (Expense):
Interest and Dividend Income................. 422,958 259,455
Interest Expense............................. (96,566) (17,705)
Other, Net................................... 253,586 234,363
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579,978 476,113
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Income before Income Taxes..................... 2,533,012 1,630,307
Provision for Income Taxes..................... 789,000 482,000
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Net Income .................................... $ 1,744,012 $ 1,148,307
=========== ===========
Earnings Per Common Share...................... $.34 $.23
==== ====
Weighted Average Number of Common and Common
Equivalent Shares Outstanding................ 5,096,495 5,099,676
=========== ===========
Dividends Declared Per Common Share............ $.09 $.09
==== ====
</TABLE>
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<PAGE>
ASTRO-MED, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
-----------------
October 29, October 28,
1994 1995
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<S> <C> <C>
Cash Flows from Operating Activities:
Net Income..................................... $ 1,744,012 $ 1,148,307
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and Amortization.............. 826,676 961,223
Deferred Income Taxes...................... 19,310 108,965
Other...................................... 45,132 (41,773)
Changes in Assets and Liabilities:
Accounts Receivable...................... (1,040,456) 84,900
Inventories.............................. (2,557,647) (1,104,524)
Other.................................... 155,458 613,345
Accounts Payable and Accrued Expenses.... 742,968 (559,567)
Income Taxes............................. (206,557) (91,333)
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Total Adjustments...................... (2,015,116) (28,764)
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Net Cash Provided (Used) by
Operating Activities....................... (271,104) 1,119,543
Cash Flows from Investing Activities:
Proceeds from Sales of Securities
Available for Sale........................... 12,475,607 2,696,728
Purchases of Securities Available
for Sale..................................... (9,078,877) (2,190,401)
Purchases of Investments....................... (500,000)
Additions to Property, Plant and Equipment..... (786,452) (829,192)
Acquisition of New Business, Net of
Cash Acquired................................ 4,296,545
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Net Cash Provided (Used) by
Investing Activities....................... (2,186,267) (322,865)
Cash Flows from Financing Activities:
Payments of Debt............................... (276,703) (350,000)
Short-Term Borrowing from Bank................. 3,400,000 500,000
Proceeds from Common Shares Issued
Under Employee Benefit Plans................. 31,477 84,102
Purchases of Treasury Stock.................... (176,254)
Dividends Paid................................. (453,104) (452,992)
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Net Cash Provided (Used) by
Financing Activities....................... 2,701,670 (395,144)
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Net Increase in Cash and Cash
Equivalents.................................... 244,299 401,534
Cash and Cash Equivalents, Beginning of Period. 1,300,132 1,107,191
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Cash and Cash Equivalents, End of Period......... $ 1,544,431 $ 1,508,725
=========== ===========
Supplemental Disclosures of Cash Flow
Information:
Cash Paid During the Period for:
Interest................................... $ 79,251 $ 21,942
Income Taxes............................... $ 914,608 $ 260,869
</TABLE>
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ASTRO-MED, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
October 28, 1995
Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) The accompanying financial statements have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission, and reflect all adjustments which, in the opinion of
management, are necessary for a fair statement of the results of the interim
periods presented. These financial statements do not include all disclosures
associated with annual financial statements and, accordingly, should be read in
conjunction with footnotes contained in the Company's annual report on Form 10-K
for the year ended January 31, 1995.
(b) Earnings per common share are computed based on the weighted average
number of common shares and common share equivalents outstanding during each
period. Common share equivalents include the dilutive effect of certain stock
options under the treasury stock method. Fully diluted earnings per share have
not been separately presented since they are not materially different.
Note 2 - INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out) or market
and include material, labor and manufacturing overhead. The components of
inventories were as follows:
<TABLE>
<CAPTION>
January 31, October 28,
1995 1995
---- ----
<S> <C> <C>
Materials and Supplies.. $ 7,508,626 $ 7,827,192
Work-In-Process......... 2,475,326 2,663,992
Finished Goods.......... 2,909,592 3,506,884
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$12,893,544 $13,998,068
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</TABLE>
Note 3 - ACQUISITION
On August 1, 1994, the Company acquired Grass Instrument Co., a privately
held corporation ("Grass"), and Cannon Manufacturing Company, a privately held
corporation ("Cannon") affiliated with Grass by common ownership. Following a
merger, the combined businesses of Grass and Cannon continue as a wholly-owned
subsidiary of the Company under the name "Grass Instrument Co."
On an unaudited proforma basis, assuming Grass and Cannon had been acquired
on February 1, 1994, the Company's consolidated net sales would have been
$31,699,192 for the nine months ended October 29, 1994. The proforma effect on
net income and earnings per share is not material.
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ASTRO-MED, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations:
- ---------------------
Net sales in the current quarter decreased 4% compared to the prior year
quarter. Sales of Grass Instrument Co., a business acquired at the beginning of
the prior year quarter (see Note 3 of Notes to Consolidated Financial
Statements), accounted for the decrease. In the prior year quarter, sales of
this business were higher than typical for a third quarter.
Net sales in the current nine months increased 21% compared to sales in the
prior year nine months. Excluding sales of the new business for the first six
months of the current year, sales on a comparable basis increased 4% in the
current nine months.
In all periods, changes in sales have been spread between all products in
all geographic market sectors. Export sales have shown the most growth in the
current year. The Company anticipates an overall sales increase in the last
quarter of the current year.
Consolidated gross profit as a percentage of sales was 39% for the third
quarter of the current year and 44% for the same quarter of the prior year. The
decline is attributable mainly to less than expected sales, with and without the
new business. Such lower volume resulted in an unfavorable rate of overhead
absorption.
The consolidated gross profit percentage was 40% for the nine months of the
current year and 45% for the same period of the prior year. In addition to the
identified impact on the current quarter, the decline reflects inclusion of the
new business for the first six months of the current year but not of the prior
year. This business historically has experienced substantially lower margins.
In keeping with the anticipated sales increase, the Company anticipates an
increase in gross profit in the fourth quarter of the current year.
As compared to prior year totals, selling, general and administrative
expenses rose by 5% in the current quarter and, excluding the new business
acquired, by 9% in the current nine months. There have been no individually
significant expenses affecting the totals. The most substantial changes in the
current year resulted from increased advertising and from additional sales
personnel and their related expenses.
There were no individual research and development costs in either the
current quarter or nine months which varied significantly from comparable
previous year totals. The level of such costs remains high, however, reflecting
the Company's commitment to the development of new and improved products.
Interest and dividend income, particularly for the current nine months,
decreased noticeably compared to such income in the prior year because of a
reduction in invested funds following the acquisition for cash of a new business
as mentioned above.
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ASTRO-MED, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Continued)
Financial Condition:
- -------------------
Long-term debt appearing in the consolidated balance sheets as of the end of
each respective period consists of the remainder of an industrial development
revenue bond financing used in prior years to construct facilities and make
major acquisitions of machinery and equipment.
The Company's present cash and investment securities, together with funds
generated from operations and capital resources available to it, are expected to
satisfy requirements for working capital and other needs for the foreseeable
future. The increased investment in inventories shown in the latest balance
sheet is in accordance with business plans. No additional long-term financing
is planned.
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<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
None.
(b) Reports on Form 8-K:
No reports on Form 8-K have been filed during the quarter for which this
report is filed.
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-MED, INC.
(Registrant)
Date: December 12, 1995 By /s/ A. W. Ondis
------------------------
A. W. Ondis, Chairman
(Principal Executive Officer)
Date: December 12, 1995 By /s/ Eugene S. Libby
------------------------
Eugene S. Libby, Vice
President and Treasurer
(Principal Financial Officer)
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-START> FEB-01-1995
<PERIOD-END> OCT-28-1995
<CASH> 1,508,725
<SECURITIES> 6,526,695
<RECEIVABLES> 7,743,493
<ALLOWANCES> 0
<INVENTORY> 13,998,068
<CURRENT-ASSETS> 31,375,482
<PP&E> 16,717,876
<DEPRECIATION> 8,072,368
<TOTAL-ASSETS> 42,656,861
<CURRENT-LIABILITIES> 4,985,095
<BONDS> 194,072
<COMMON> 256,041
0
0
<OTHER-SE> 35,777,826
<TOTAL-LIABILITY-AND-EQUITY> 42,656,861
<SALES> 32,566,709
<TOTAL-REVENUES> 32,566,709
<CGS> 19,473,919
<TOTAL-COSTS> 31,412,515
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,705
<INCOME-PRETAX> 1,630,307
<INCOME-TAX> 482,000
<INCOME-CONTINUING> 1,148,307
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,148,307
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
</TABLE>
