<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 July 29, 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)
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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 - 5,029,869 shares
(excluding treasury shares) as of September 6, 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 July 29, 1995........................ 3
Consolidated Statements of Income -
Three Months Ended July 30, 1994 and July 29, 1995........ 4
Consolidated Statements of Income -
Six Months Ended July 30, 1994 and July 29, 1995.......... 5
Consolidated Statements of Cash Flows -
Six Months Ended July 30, 1994 and July 29, 1995.......... 6
Notes to Consolidated Financial Statements -
July 29, 1995............................................. 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations....................... 8
Part II. Other Information................................... 9
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Part I. FINANCIAL INFORMATION
ASTRO-MED, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
January 31, July 29,
ASSETS 1995 1995
------------ ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and Cash Equivalents.................. $ 1,107,191 $ 909,877
Securities Available for Sale.............. 6,897,781 6,447,734
Accounts Receivable, Net................... 7,828,393 7,528,864
Inventories................................ 12,893,544 14,103,071
Prepaid Expenses and Other Current Assets.. 2,196,317 1,873,449
----------- -----------
Total Current Assets..................... 30,923,226 30,862,995
PROPERTY, PLANT AND EQUIPMENT 15,888,684 16,654,372
Less Accumulated Depreciation.............. 7,254,555 7,836,244
----------- -----------
8,634,129 8,818,128
OTHER ASSETS
Excess of Cost Over Net Assets Acquired.... 1,047,613 1,029,454
Other...................................... 1,572,326 1,577,749
----------- -----------
2,619,939 2,607,203
----------- -----------
$42,177,294 $42,288,326
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable........................... $ 2,850,382 $ 2,238,982
Note Payable to Bank....................... 500,000
Accrued Compensation....................... 1,015,956 734,177
Accrued Expenses........................... 802,321 557,194
Income Taxes............................... 715,633 698,530
Current Maturities of Long-Term Debt....... 51,703 51,703
----------- -----------
Total Current Liabilities................ 5,435,995 4,780,586
LONG-TERM DEBT, Less Current Maturities..... 244,072 219,072
EXCESS OF NET ASSETS ACQUIRED OVER COST..... 491,115 649,263
DEFERRED INCOME TAXES....................... 726,178 745,488
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 5,119,846 Shares, Respectively........ 255,913 255,992
Additional Paid-In Capital................. 5,515,632 5,529,552
Retained Earnings.......................... 30,355,938 30,921,778
Treasury Stock, at Cost (77,566 Shares
and 90,566 Shares, Respectively).......... (672,755) (788,096)
Cumulative Translation Adjustment.......... (80,722) (30,960)
Net Unrealized Gain (Loss) on Securities
Available for Sale........................ (94,072) 5,651
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35,279,934 35,893,917
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$42,177,294 $42,288,326
=========== ===========
</TABLE>
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<PAGE>
ASTRO-MED, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended
-------------------------
July 30, July 29,
1994 1995
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<S> <C> <C>
Net Sales..................................... $9,093,616 $10,787,593
Cost of Sales................................. 4,899,829 6,174,010
---------- -----------
Gross Profit.................................. 4,193,787 4,613,583
Costs and Expenses:
Selling, General and Administrative......... 2,513,031 3,444,216
Research and Development.................... 598,684 602,762
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3,111,715 4,046,978
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Operating Income.............................. 1,082,072 566,605
Other Income (Expense):
Interest and Dividend Income................ 165,391 75,944
Interest Expense............................ (8,059) (11,188)
Other, Net.................................. 28,815 55,522
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186,147 120,278
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Income before Income Taxes.................... 1,268,219 686,883
Provision for Income Taxes.................... 363,000 161,000
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Net Income.................................... $ 905,219 $ 525,883
========== ===========
Earnings Per Common Share..................... $.18 $.10
==== ====
Weighted Average Number of Common and Common
Equivalent Shares Outstanding............... 5,091,601 5,098,020
========== ===========
Dividends Declared Per Common Share........... $.03 $.03
==== ====
</TABLE>
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ASTRO-MED, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Six Months Ended
--------------------------
July 30, July 29,
1994 1995
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<S> <C> <C>
Net Sales...................................... $15,644,571 $21,742,889
Cost of Sales.................................. 8,556,666 12,886,280
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Gross Profit................................... 7,087,905 8,856,609
Costs and Expenses:
Selling, General and Administrative.......... 5,097,699 6,880,573
Research and Development..................... 1,226,013 1,220,102
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6,323,712 8,100,675
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Operating Income............................... 764,193 755,934
Other Income (Expense):
Interest and Dividend Income................. 321,618 175,168
Interest Expense............................. (19,286) (17,276)
Other, Net................................... 96,238 237,110
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398,570 395,002
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Income before Income Taxes..................... 1,162,763 1,150,936
Provision for Income Taxes..................... 311,000 283,000
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Net Income..................................... $ 851,763 $ 867,936
========== ===========
Earnings Per Common Share...................... $.17 $.17
==== ====
Weighted Average Number of Common and Common
Equivalent Shares Outstanding................ 5,095,147 5,100,921
========== ===========
Dividends Declared Per Common Share............ $.06 $.06
==== ====
</TABLE>
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<PAGE>
ASTRO-MED, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
-------------------------
July 30, July 29,
1994 1995
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<S> <C> <C>
Cash Flows from Operating Activities:
Net Income ..................................... $ 851,763 $ 867,936
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and Amortization............... 568,705 757,996
Deferred Income Taxes....................... 19,310 19,310
Other....................................... (16,705) (5,423)
Changes in Assets and Liabilities:
Accounts Receivable....................... (806,499) 299,529
Inventories............................ (2,056,132) (1,209,527)
Other..................................... 126,708 357,180
Accounts Payable and Accrued Expenses..... 1,117,080 (1,138,306)
Income Taxes.............................. (246,875) (17,103)
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Total Adjustments....................... (1,294,408) (936,344)
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Net Cash Provided (Used) by
Operating Activities........................ (442,645) (68,408)
Cash Flows from Investing Activities:
Proceeds from Sales of Securities
Available for Sale............................ 6,069,697 3,325,128
Purchases of Securities Available
for Sale...................................... (4,665,070) (2,759,908)
Purchases of Investments........................ (500,000)
Additions to Property, Plant and Equipment...... (446,971) (765,688)
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Net Cash Provided (Used) by
Investing Activities........................ 457,656 (200,468)
Cash Flows from Financing Activities:
Payments of Long-Term Debt...................... (176,703) (25,000)
Short-Term Borrowing from Bank.................. 500,000
Proceeds from Common Shares Issued
Under Employee Benefit Plans.................. 25,379 74,912
Purchases of Treasury Stock..................... (176,254)
Dividends Paid.................................. (301,962) (302,096)
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Net Cash Provided (Used) by
Financing Activities........................ (453,286) 71,562
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Net Increase (Decrease) in Cash and Cash
Equivalents..................................... (438,275) (197,314)
Cash and Cash Equivalents, Beginning of Period. 1,300,132 1,107,191
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Cash and Cash Equivalents, End of Period.......... $ 861,857 $ 909,877
=========== ===========
Supplemental Disclosures of Cash Flow
Information:
Cash Paid During the Period for:
Interest.................................... $ 20,931 $ 48,179
Income Taxes................................ $ 607,000 $ 254,407
</TABLE>
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ASTRO-MED, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 29, 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, July 29,
1995 1995
----------- -----------
<S> <C> <C>
Materials and Supplies.. $ 7,508,626 $ 8,359,157
Work-In-Process......... 2,475,326 1,993,220
Finished Goods.......... 2,909,592 3,750,694
----------- -----------
$12,893,544 $14,103,071
=========== ===========
</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
$11,510,508 for the three months ended July 30, 1994 and $20,478,354 for the six
months ended July 30, 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 and six months increased 19% and 39%,
respectively, compared to prior year totals. Excluding sales of the new
business acquired (see note 3 of Notes to Consolidated Financial Statements),
net sales for the second quarter of the current fiscal year decreased
approximately 6% as compared to the second quarter a year ago. For the six
months of the current fiscal year, comparable net sales were approximately 9%
higher than for the same period of the prior year. Changes in sales have been
spread between recorders/printers and bar code printer products in all
geographic market sectors.
Consolidated gross profit as a percentage of sales was 43% for the second
quarter and 41% for the six months of the current year. For the prior year, the
percentages were 46% and 45%, respectively. The declines were due in part to
the inclusion of sales of the new business which historically has experienced
substantially lower margins. Excluding sales of the new business, gross profit
was 43% in the current second quarter and 43% for the current six months. Gross
profit margins of the new business have been improved through the introduction
of certain manufacturing efficiencies and selected modest price increases.
Overall, margins in the current year have been affected by product sales mix and
increased sales of certain products to dealers and independent sales
representatives who receive a resale discount.
Selling, general and administrative expenses without the new business
acquired rose by approximately 12% in both the second quarter and six months of
the current fiscal year as compared to amounts for the same periods in the prior
fiscal year. There were 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.
Research and development costs in the current second quarter and six months
did not vary 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 decreased noticeably in the current second
quarter and six months compared to prior year totals because of a reduction in
invested funds following the acquisition for cash of the business referred to
above.
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<PAGE>
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: September 7, 1995 By /s/ A. W. Ondis
----------------------------
A. W. Ondis, Chairman
(Principal Executive Officer)
Date: September 7, 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> 6-MOS
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-START> FEB-01-1995
<PERIOD-END> JUL-29-1995
<CASH> 909,877
<SECURITIES> 6,447,734
<RECEIVABLES> 7,528,864
<ALLOWANCES> 0
<INVENTORY> 14,103,071
<CURRENT-ASSETS> 30,862,995
<PP&E> 16,654,372
<DEPRECIATION> 7,836,244
<TOTAL-ASSETS> 42,288,326
<CURRENT-LIABILITIES> 4,780,586
<BONDS> 219,072
<COMMON> 255,992
0
0
<OTHER-SE> 35,637,925
<TOTAL-LIABILITY-AND-EQUITY> 42,288,326
<SALES> 21,742,887
<TOTAL-REVENUES> 21,742,887
<CGS> 12,886,280
<TOTAL-COSTS> 20,986,955
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,276
<INCOME-PRETAX> 1,150,936
<INCOME-TAX> 283,000
<INCOME-CONTINUING> 867,936
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 867,936
<EPS-PRIMARY> .17
<EPS-DILUTED> .17
</TABLE>
