<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 November 2, 1996
------------------------------------------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
--
EXCHANGE ACT OF 1934
For the transition period from to
------------- -------------
Commission file number 0-13200
--------------------------------------------------------
Astro-Med, Inc.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Rhode Island 05-0318215
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
600 East Greenwich Avenue, West Warwick, Rhode Island 02893
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(401) 828-4000
- -------------------------------------------------------------------------------
(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 - 4,966,183 shares
(excluding treasury shares) as of October 25, 1996
<PAGE>
ASTRO-MED, INC.
INDEX
Page No.
--------
Part I. Financial Information:
Consolidated Balance Sheets -
January 31, 1996 and November 2,1996...................... 3
Consolidated Statements of Income -
Three Months Ended October 28, 1995 and November 2, 1996.. 4
Consolidated Statements of Income
Nine Months Ended October 28, 1995 and November 2, 1996... 5
Consolidated Statements of Cash Flows -
Nine Months Ended October 28, 1995 and November 2, 1996... 6
Notes to Consolidated Financial Statements -
November 2, 1996.......................................... 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations....................... 8,9
Part II. Other Information................................... 10,11
Item 6. Exhibits and Reports on Form 8-K
2
<PAGE>
Part I. FINANCIAL INFORMATION
ASTRO-MED, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
January 31, November 2,
ASSETS 1996 1996
------------ ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and Cash Equivalents.................. $ 2,033,713 $ 6,138,942
Securities Available for Sale.............. 6,659,828 6,942,497
Accounts Receivable, Net................... 8,318,005 8,331,116
Inventories................................ 12,533,553 11,628,889
Prepaid Expenses and Other Current Assets.. 1,424,757 1,402,390
----------- -----------
Total Current Assets..................... 30,969,856 34,443,834
PROPERTY, PLANT AND EQUIPMENT 17,063,855 17,196,310
Less Accumulated Depreciation.............. (8,350,722) (9,189,923)
----------- -----------
8,713,133 8,006,387
OTHER ASSETS
Excess of Cost Over Net Assets Acquired.... 1,012,693 985,459
Other...................................... 1,607,049 532,838
----------- -----------
2,619,742 1,518,297
----------- -----------
$42,302,731 $43,968,518
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable........................... $ 2,136,825 $ 2,528,646
Accrued Compensation....................... 1,200,082 880,003
Accrued Expenses........................... 730,345 1,194,395
Income Taxes............................... 432,540 1,072,153
Current Maturities of Long-Term Debt....... 50,000 50,000
----------- -----------
Total Current Liabilities................ 4,549,792 5,725,197
LONG-TERM DEBT, Less Current Maturities..... 175,000 125,000
EXCESS OF NET ASSETS ACQUIRED OVER COST..... 761,879 598,619
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 5,135,578 Shares, Respectively........ 256,166 256,779
Additional Paid-In Capital................. 5,554,100 5,615,571
Retained Earnings.......................... 31,079,623 32,385,272
Treasury Stock, at Cost (103,066 Shares
and 169,395 Shares, Respectively)......... (902,169) (1,468,111)
Cumulative Translation Adjustment.......... (38,368) (82,176)
Net Unrealized Gain (Loss) on Securities
Available for Sale........................ 31,954 (22,387)
----------- -----------
35,981,306 36,684,948
----------- -----------
$42,302,731 $43,968,518
=========== ===========
</TABLE>
3
<PAGE>
ASTRO-MED, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended
--------------------------
October 28, November 2,
1995 1996
------------ ------------
<S> <C> <C>
Net Sales.................................... $10,823,820 $11,110,514
Cost of Sales................................. 6,587,639 6,572,197
---------- -----------
Gross Profit.................................. 4,236,181 4,538,317
Costs and Expenses:
Selling, General and Administrative......... 3,246,100 3,017,702
Research and Development.................... 591,821 643,092
---------- -----------
3,837,921 3,660,794
---------- -----------
Operating Income.............................. 398,260 877,523
Other Income (Expense):
Investment Income........................... 84,287 157,489
Interest Expense............................ (429) (3,349)
Other, Net.................................. (2,747) 41,665
---------- -----------
81,111 195,805
---------- -----------
Income before Income Taxes.................... 479,371 1,073,328
Provision for Income Taxes.................... 199,000 389,620
---------- -----------
Net Income.................................... $ 280,371 $ 683,708
========== ===========
Earnings Per Common Share..................... $.06 $.14
========== ===========
Weighted Average Number of Common and Common
Equivalent Shares Outstanding............... 5,097,232 5,014,191
========== ===========
Dividends Declared Per Common Share........... $.03 $.03
========== ===========
</TABLE>
4
<PAGE>
ASTRO-MED, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
Nine Months Ended
--------------------
<TABLE>
<CAPTION>
October 28, November 2,
1995 1996
------------ ------------
<S> <C> <C>
Net Sales.................................... $32,566,709 $32,779,109
Cost of Sales................................ 19,473,919 19,879,552
----------- -----------
Gross Profit................................. 13,092,790 12,899,557
Costs and Expenses:
Selling, General and Administrative........ 10,126,673 9,500,079
Research and Development.................... 1,811,923 1,846,599
----------- -----------
11,938,596 11,346,678
----------- -----------
Operating Income.............................. 1,154,194 1,552,879
Other Income (Expense):
Investment Income........................... 259,455 828,197
Interest Expense............................ (17,705) (15,366)
Other, Net.................................. 234,363 81,200
----------- -----------
476,113 894,031
----------- -----------
Income before Income Taxes.................... 1,630,307 2,446,910
Provision for Income Taxes.................... 482,000 733,620
----------- -----------
Net Income .................................. $ 1,148,307 $ 1,713,290
=========== ===========
Earnings Per Common Share.....................$ .23 $ .34
=========== ===========
Weighted Average Number of Common and Common
Equivalent Shares Outstanding............... 5,099,676 5,025,371
=========== ===========
Dividends Declared Per Common Share...........$ .09 $ .09
=========== ===========
</TABLE>
5
<PAGE>
ASTRO-MED, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
--------------------------
October 28, November 2,
1995 1996
------------ ------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income..................................... $1,148,307 $ 1,713,290
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and Amortization.............. 961,223 703,175
Gain on Sale of Investment................. (416,090)
Deferred Income Taxes...................... 108,965
Other...................................... (41,773)
Changes in Assets and Liabilities:
Decrease in Accounts Receivable.......... 84,900 60,389
(Increase) decrease in Inventories..... (1,104,524) 904,664
[Decrease(increase)in] Other............. 613,345 (95,881)
(Decrease) increase in Accounts
Payable and Accrued Expenses............. (559,567) 535,791
(Decrease) increase in Accrued
Income Taxes............................. (91,333) 639,613
---------- -----------
Total Adjustments...................... (28,764) 2,331,661
Net Cash Provided by
Operating Activities....................... 1,119,543 4,044,951
Cash Flows from Investing Activities:
Proceeds from Sales of Securities
Available for Sale........................... 2,696,728 1,487,684
Purchases of Securities Available
for Sale................................... (2,190,401) (282,669)
Proceeds from Sale of Building................. 515,935
Additions to Property, Plant and Equipment..... (829,192) (649,455)
---------- -----------
Net Cash (used) Provided by
Investing Activities....................... (322,865) 1,071,495
Cash Flows from Financing Activities:
Payments of Long-Term Debt..................... (350,000) (50,000)
Short-Term Borrowing from Bank................. 500,000
Proceeds from Common Shares Issued
Under Employee Benefit Plans................. 84,102 62,084
Purchases of Treasury Stock.................... (176,254) (565,942)
Dividends Paid................................. (452,992) (457,359)
---------- -----------
Net Cash (Used) by Financing Activities...... (395,144) (1,011,217)
Net Increase/(Decrease) in Cash and Cash
Equivalents.................................... 401,534 4,105,229
Cash and Cash Equivalents, Beginning of Period... 1,107,191 2,033,713
---------- -----------
Cash and Cash Equivalents, End of Period......... $1,508,725 $ 6,138,942
========== ===========
Supplemental Disclosures of Cash Flow
Information:
Cash Paid During the Period for:
Interest................................... $ 21,942 $ 24,477
Income Taxes............................... $ 260,869 $ 69,855
</TABLE>
6
<PAGE>
ASTRO-MED, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
November 2, 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, November 2,
1996 1996
----------- -----------
<S> <C> <C>
Materials and Supplies.. $ 6,460,730 $ 6,289,658
Work-In-Process......... 1,381,220 1,234,000
Finished Goods.......... 4,691,603 4,105,231
----------- -----------
$12,533,553 $11,628,889
=========== ===========
</TABLE>
7
<PAGE>
ASTRO-MED, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations:
- ----------------------
Net Sales in the Company's third fiscal quarter increased 3% over the prior
year fiscal third quarter. Growth was most evident in our domestic channels
where Sales increased 7% over last year. Internationally, volume was comparable
to last year although our Asian, UK and Italian sales revenues experienced
growth. The Company continues to expand new product offerings during the third
quarter with the Printing Systems including Sundance, Data Acquisition Systems
and Astro-DAQ. Demand was healthy for both the Company's traditional core
recorder products as well as the Grass Instrument line of products.
The third quarter sales mix generated $4,538,000 in Gross Profits for the
three month period. This result was 7% higher than last year's third quarter
and produced a yield of 40.8% as compared with the prior year's mark of 39.1%.
The Company has improved its Gross Profit Percent during each quarter of the
current fiscal year to a nine month Gross Profit Percent of 39.4%. Although
this level is behind last year's 40.2%, the Company expects the improvement
trend to continue.
Astro-Med's quarterly operating expenses of $3,660,000 were 5% lower than
last year. This result is consistent with this year's pace in spending which is
also 5% behind last year's level for nine months, as the Company has reduced its
selling expenses and administrative personnel from prior year levels.
Other Income was $196,000 in the quarter against last year's results of
$81,000 for the same quarter. This year's improvement is a result of additional
interest earned on the Company's expanded investment portfolio. After nine
months the Company has other income of $894,000 in comparison to last year's
$476,000. The improvement is attributable to gains on sale of investments and
interest income.
Net Income in the quarter was $684,000 generating a 6.2% return on sales.
This quarter's income was better than last year's 3rd quarter by $404,000 or
144%. The Company has earned $1,713,000 in Net Income after nine months of the
current fiscal year against a prior year result of $1,148,000 for the same time
frame.
Financial Condition:
- --------------------
The Company increased its cash position by $937,000 in the 3rd quarter.
Normal operations generated $1,563,000 in cash available while Investing
requirements of $359,000 including capital expenditures and Financing activities
of $267,000 including (dividends and treasury stock) purchases consumed cash.
The Net Working Capital balances rose $513,000 in the three months to
$28,718,000 at quarter's end. The growth in the accounts receivable investment
was the primary factor.
8
<PAGE>
The Company's cash and cash equivalent balances have risen by $4,105,000
during the current fiscal year. The result is traceable to Operations which
have produced $4,033,000 in operating cash flow while the Company's Investing
and Financing activities have offset their respective cash flows.
9
<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 2, 1996 By /s/ A. W. Ondis
-----------------------------
A. W. Ondis, Chairman
(Principal Executive Officer)
Date: December 2, 1996 By /s/ Joseph P. O'Connell
-----------------------------
Joseph P. O'Connell, Vice
President and Treasurer
(Principal Financial Officer)
10
<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 November 2, 1996.
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-START> AUG-04-1996
<PERIOD-END> NOV-02-1996
<CASH> 6,138,942
<SECURITIES> 6,942,497
<RECEIVABLES> 8,257,616
<ALLOWANCES> 0
<INVENTORY> 11,628,889
<CURRENT-ASSETS> 34,443,834
<PP&E> 17,196,310
<DEPRECIATION> 9,189,923
<TOTAL-ASSETS> 43,968,518
<CURRENT-LIABILITIES> 5,725,197
<BONDS> 125,000
0
0
<COMMON> 256,779
<OTHER-SE> 36,428,169
<TOTAL-LIABILITY-AND-EQUITY> 43,968,518
<SALES> 11,110,514
<TOTAL-REVENUES> 11,110,514
<CGS> 6,572,197
<TOTAL-COSTS> 6,572,197
<OTHER-EXPENSES> 3,660,794
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,349
<INCOME-PRETAX> 1,073,328
<INCOME-TAX> 389,620
<INCOME-CONTINUING> 683,708
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 683,708
<EPS-PRIMARY> .14
<EPS-DILUTED> .14
</TABLE>
