<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 August 3, 1996
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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.
- --------------------------------------------------------------------------------
(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 - 4,964,178 shares
(excluding treasury shares) as of August 26, 1996
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ASTRO-MED, INC.
INDEX
Page No.
--------
Part I. Financial Information:
Consolidated Balance Sheets -
January 31, 1996 and August 3, 1996....................... 3
Consolidated Statements of Income -
Three Months Ended July 29, 1995 and August 3, 1996....... 4
Consolidated Statements of Income
Six Months Ended July 29, 1995 and August 3, 1996......... 5
Consolidated Statements of Cash Flows -
Six Months Ended July 29, 1995 and August 3, 1996......... 6
Notes to Consolidated Financial Statements -
August 3, 1996............................................ 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations....................... 8,9
Part II. Other Information................................... 10,11
Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K
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<PAGE>
Part I. FINANCIAL INFORMATION
ASTRO-MED, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
January 31, August 3,
ASSETS 1996 1996
------------ ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and Cash Equivalents.................. $ 2,033,713 $ 5,202,209
Securities Available for Sale.............. 6,659,828 6,806,141
Accounts Receivable, Net................... 8,318,005 7,511,152
Inventories................................ 12,533,553 11,674,043
Prepaid Expenses and Other Current Assets.. 1,424,757 1,652,147
----------- -----------
Total Current Assets..................... 30,969,856 32,845,692
PROPERTY, PLANT AND EQUIPMENT 17,063,855 16,972,821
Less Accumulated Depreciation.............. (8,350,722) (8,896,835)
----------- -----------
8,713,133 8,075,986
----------- -----------
OTHER ASSETS
Excess of Cost Over Net Assets Acquired.... 1,012,693 994,534
Other...................................... 1,607,049 543,072
----------- -----------
2,619,742 1,537,606
----------- -----------
$42,302,731 $42,459,284
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable........................... $ 2,136,825 $ 1,699,931
Accrued Compensation....................... 1,200,082 929,341
Accrued Expenses........................... 730,345 1,232,150
Income Taxes............................... 432,540 728,308
Current Maturities of Long-Term Debt....... 50,000 50,000
----------- -----------
Total Current Liabilities................ 4,549,792 4,639,730
LONG-TERM DEBT, Less Current Maturities..... 175,000 125,000
EXCESS OF NET ASSETS ACQUIRED OVER COST..... 761,879 653,039
DEFERRED INCOME TAXES....................... 834,754 834,754
STOCKHOLDERS' EQUITY
Preferred Stock, $10 Par Value,
Authorized 100,000 Shares, None Issued....
Common Stock, $.05 Par Value, Authorized
13,000,000 Shares, Issued 5,123,310
and 5,132,249 Shares, Respectively........ 256,166 256,613
Additional Paid-In Capital................. 5,554,100 5,596,790
Retained Earnings.......................... 31,079,623 31,825,143
Treasury Stock, at Cost (103,066 Shares
and 153,071 Shares, Respectively)......... (902,169) (1,331,736)
Cumulative Translation Adjustment.......... (38,368) (119,757)
Net Unrealized Gain (Loss) on Securities
Available for Sale........................ 31,954 (20,292)
----------- -----------
35,981,306 36,206,761
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$42,302,731 $42,459,284
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</TABLE>
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ASTRO-MED, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended
------------------
July 29, August 3,
1995 1996
----------- ---------
<S> <C> <C>
Net Sales...................................... $10,787,593 $11,178,773
Cost of Sales.................................. 6,174,010 6,775,828
---------- -----------
Gross Profit................................... 4,613,583 4,402,945
Costs and Expenses:
Selling, General and Administrative.......... 3,444,216 3,131,111
Research and Development..................... 602,762 597,592
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4,046,978 3,728,703
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Operating Income............................... 566,605 674,242
Other Income (Expense):
Investment Income............................ 75,944 151,669
Interest Expense............................. (11,188) (3,958)
Other, Net................................... 55,522 17,515
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120,278 165,226
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Income before Income Taxes..................... 686,883 839,468
Provision for Income Taxes..................... 161,000 253,000
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Net Income..................................... $ 525,883 $ 586,468
========== ===========
Earnings Per Common Share...................... $.10 $.12
========== ===========
Weighted Average Number of Common and Common
Equivalent Shares Outstanding................ 5,098,020 5,031,192
========== ===========
Dividends Declared Per Common Share............ $.03 $.03
========== ===========
</TABLE>
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<PAGE>
ASTRO-MED, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Six Months Ended
-------------------------
July 29, August 3,
1995 1996
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<S> <C> <C>
Net Sales.................................... $21,742,889 $21,668,594
Cost of Sales................................ 12,886,280 13,307,354
----------- -----------
Gross Profit................................. 8,856,609 8,361,240
Costs and Expenses:
Selling, General and Administrative........ 6,880,573 6,482,377
Research and Development................... 1,220,102 1,203,507
--------- -----------
8,100,675 7,685,884
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Operating Income............................. 755,934 675,356
Other Income (Expense):
Investment Income.......................... 175,168 670,708
Interest Expense........................... (17,276) (7,913)
Other, Net................................. 237,110 35,433
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395,002 698,228
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Income before Income Taxes................... 1,150,936 1,373,584
Provision for Income Taxes................... 283,000 344,000
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Net Income................................... $ 867,936 $ 1,029,584
========== ===========
Earnings Per Common Share.................... $.17 $ .20
========== ===========
Weighted Average Number of Common and Common
Equivalent Shares Outstanding.............. 5,100,921 5,034,633
========== ===========
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 29, August 3,
1995 1996
----------- -----------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income...................................... $ 867,936 $1,029,584
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and Amortization............... 757,996 455,432
Gain on Sale of Investment.................. (416,090)
Deferred Income Taxes....................... 19,310
Other....................................... (5,423)
Changes in Assets and Liabilities:
Decrease in Accounts Receivable........... 299,529 806,853
(Increase) decrease in Inventories........ (1,209,527) 859,510
[Decrease(increase)in] Other.............. 357,180 (352,201)
(Decrease) increase in Accounts
Payable and Accrued Expenses.............. (1,138,306) (205,830)
(Decrease) increase in Accrued
Income Taxes.............................. (17,103) 295,768
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Total Adjustments....................... (936,344) 1,443,442
Net Cash Provided by
Operating Activities........................ (68,408) 2,473,026
Cash Flows from Investing Activities:
Proceeds from Sales of Securities
Available for Sale............................ 3,325,128 1,487,684
Purchases of Securities Available
for Sale...................................... (2,759,908) (146,313)
Proceeds from Sale of Building.................. 515,935
Additions to Property, Plant and Equipment...... (765,688) (425,966)
---------- ----------
Net Cash Provided by
Investing Activities........................ (200,468) 1,431,340
Cash Flows from Financing Activities:
Payments of Long-Term Debt...................... (25,000) (50,000)
Short-Term Borrowing from Bank.................. 500,000
Proceeds from Common Shares Issued
Under Employee Benefit Plans.................. 74,912 43,137
Purchases of Treasury Stock..................... (176,254) (429,567)
Dividends Paid.................................. (302,096) (299,440)
---------- ----------
Net Cash (Used) by Financing Activities....... 71,562 (735,870)
Net Increase/(Decrease) in Cash and Cash
Equivalents..................................... (197,314) 3,168,496
Cash and Cash Equivalents, Beginning of Period.... 1,107,191 2,033,713
---------- ----------
Cash and Cash Equivalents, End of Period.......... $ 909,877 $5,202,209
========== ==========
Supplemental Disclosures of Cash Flow
Information:
Cash Paid During the Period for:
Interest.................................... $ 48,179 $ 24,410
Income Taxes................................ $ 254,407 $ 48,714
</TABLE>
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ASTRO-MED, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
August 3, 1996
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. All accounting policies have been applied in a manner
consistent with prior periods. 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, 1996.
(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 would not be 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, August 3,
1996 1996
----------- -----------
<S> <C> <C>
Materials and Supplies.. $ 6,460,730 $ 7,672,000
Work-In-Process......... 1,381,220 967,043
Finished Goods.......... 4,691,603 3,035,000
----------- -----------
$12,533,553 $11,674,043
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</TABLE>
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<PAGE>
ASTRO-MED, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations:
- ---------------------
Second quarter Net Sales increased 4% over the same period of the prior
year. For the first six months, this year's Net Sales are virtually flat with
last year. All product groups achieved sales growth in the second quarter,
including the traditional Astro-Med recorder and data acquisition products,
media products, and the Company's Grass Instruments Division. New product
offerings from the printer line, including Sundance, as well as the new data
acquisition product, Astro-DAQ, contributed to the increase. The Company's
expansion into international markets continued during the second quarter.
International markets now represent 28% of the Company's Net Sales.
Consolidated Gross Profits were 39% in the second quarter, producing a yield
which was lower than the 43% in Gross Profits of a year ago. Product mix was
the primary reason for this year's lower yield. For the first two quarters, the
Company's Gross Profits stand at 39% as compared to last year's 41%. The
Company expects increased demand for its core products and the effect of the new
product offerings to drive higher gross profit margins.
Operating expenses were 8% lower than last year's second quarter level.
After six months operating expenses are 5% lower than last year. The Company
continues to control and reduce selling and administration expenses while
insuring strategic growth requirements such as R & D and marketing commitments
are funded.
During the second quarter the Company reported other income of $165,000.
The result, an improvement over last year's net of $120,000, was attributable to
increases in interest income. For the first six months other income, net is
$303,000 higher than the prior year totals, due to gains realized this year from
the sale of investment securities as well as additional interest income earned
on the Company's portfolio of short term securities.
Financial Condition:
- --------------------
The Company's cash flow increased by $380,000 during the second quarter,
with the prime source being operations and specifically inventory reductions.
Cash was consumed in the quarter on capital expenditures, payment of the
quarterly dividend, and increasing the investment in accounts receivable. The
working capital balance rose slightly during the second quarter to $28,200,000,
while the Company maintained a 7:1 current ratio.
The Company's cash balances increased $3,168,000 during the first six months
of this fiscal year. The increase was drawn from operating activities,
$2,473,000, specifically net income and accounts receivable and inventory
reductions; as well as investing activities, $1,431,000, being proceeds from the
sale of securities and real estate.
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<PAGE>
Long Term Debt consists of the balance due on an industrial development
revenue bond which was used to finance facilities construction and acquisition
of machinery and equipment.
In the second quarter the Company increased its treasury stock level by
purchasing 8000 shares of the Company's common stock.
The balance sheet is well positioned to fund the Company's growth plans. At
present no additional long term financing is planned.
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<PAGE>
PART II. OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders
On May 21, 1996, the Company held its Annual Meeting of Shareholders.
Albert W. Ondis, Everett V. Pizzuti, Jacques V. Hopkins, Hermann Viets and Neil
K. Robertson were elected to be the Directors of the Company. Set forth below
are the results of each matter voted upon at the Annual Meeting:
<TABLE>
<CAPTION>
1. Election of Directors:
For Withheld
--- --------
<S> <C> <C>
(a) Albert W. Ondis 4,489,794 6,651
(b) Everett V. Pizzuti 4,491,144 5,301
(c) Jacques V. Hopkins 4,490,694 5,751
(d) Hermann Viets 4,491,144 5,301
(e) Neil K. Robertson 4,490,469 5,976
</TABLE>
2. Approval of the Non-Employee Stock Option Plan:
For Against Abstentions
--- ------- -----------
4,233,249 144,214 116,079
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 3, 1996 By /s/ A. W. Ondis
---------------------------------
A. W. Ondis, Chairman
(Principal Executive Officer)
Date: September 3, 1996 By /s/ Joseph P. O'Connell
---------------------------------
Joseph P. O'Connell, Vice
President and Treasurer
(Principal Financial Officer)
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<PAGE>
SAFE HARBOR STATEMENT
Statements which are not historical facts including statements about our
expectations on new and existing products and opportunities, market growth,
demand and acceptance of new and existing products are forward looking
statements that involve risks and uncertainties. Those uncertainties include
but are not limited to product demand and market acceptance risks; the impact of
competitive products and pricing; delays or difficulties in developing,
producing, testing and selling new products and technologies; capacity and
supply constraints or difficulties; trade, legal, social and economic risks such
as licensing, and trade restrictions, including those affecting international
trade; and other risk factors listed from time to time in the Company's SEC
reports including but not limited to the report on Form 10-Q for the quarter
ended August 3, 1996.
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-START> MAY-05-1996
<PERIOD-END> AUG-03-1996
<CASH> 5,202,209
<SECURITIES> 6,806,141
<RECEIVABLES> 7,511,152
<ALLOWANCES> 0
<INVENTORY> 11,674,043
<CURRENT-ASSETS> 32,845,692
<PP&E> 16,972,821
<DEPRECIATION> 8,896,835
<TOTAL-ASSETS> 42,459,284
<CURRENT-LIABILITIES> 4,639,730
<BONDS> 125,000
0
0
<COMMON> 256,613
<OTHER-SE> 35,950,148
<TOTAL-LIABILITY-AND-EQUITY> 42,459,284
<SALES> 11,178,773
<TOTAL-REVENUES> 11,178,773
<CGS> 6,775,828
<TOTAL-COSTS> 6,775,828
<OTHER-EXPENSES> 3,728,703
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,062
<INCOME-PRETAX> 839,468
<INCOME-TAX> 253,000
<INCOME-CONTINUING> 586,468
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 586,468
<EPS-PRIMARY> .12
<EPS-DILUTED> .12
</TABLE>
