<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 2, 1997
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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 - 4,813,954 shares
(excluding treasury shares) as of September 8, 1997
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ASTRO-MED, INC.
INDEX
Page No.
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Part I. Financial Information:
Consolidated Balance Sheets -
January 31, 1997 and August 2, 1997.......................... 3
Consolidated Statements of Income -
Three Months Ended August 3, 1996 and August 2, 1997......... 4
Consolidated Statements of Income -
Six Months Ended August 3, 1996 and August 2, 1997........... 5
Consolidated Statements of Cash Flows -
Six Months Ended August 3, 1996 and August 2, 1997........... 6
Notes to Consolidated Financial Statements -
August 2, 1997............................................... 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................... 8,9
Part II. Other Information................................... 10,11
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Part I. FINANCIAL INFORMATION
ASTRO-MED, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
January 31, August 2,
ASSETS 1997 1997
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and Cash Equivalents.................. $ 6,561,184 $ 6,832,573
Securities Available for Sale.............. 7,099,358 7,318,876
Accounts Receivable, Net................... 8,311,736 7,037,331
Inventories................................ 10,361,505 10,564,998
Prepaid Expenses and Other Current Assets.. 1,441,505 1,673,457
----------- -----------
Total Current Assets..................... 33,775,288 33,427,235
PROPERTY, PLANT AND EQUIPMENT............... 17,046,969 17,550,487
Less Accumulated Depreciation.............. (8,986,149) (9,665,708)
----------- -----------
8,060,820 7,884,779
OTHER ASSETS
Excess of Cost Over Net Assets Acquired.... 976,384 958,234
Other...................................... 508,935 784,313
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1,485,319 1,742,547
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$43,321,427 43,054,561
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable........................... $ 1,614,986 $ 2,543,012
Accrued Compensation....................... 1,115,026 1,168,546
Accrued Expenses........................... 1,318,103 1,016,467
Income Taxes............................... 819,535 301,232
Current Maturities of Long-Term Debt....... 97,706 150,628
----------- -----------
Total Current Liabilities................ 4,965,356 5,179,885
LONG-TERM DEBT, Less Current Maturities..... 258,135 316,135
EXCESS OF NET ASSETS ACQUIRED OVER COST..... 544,199 435,359
DEFERRED INCOME TAXES....................... 794,895 794,895
STOCKHOLDERS' EQUITY
Preferred Stock, $10 Par Value,
Authorized 100,000 Shares, None Issued....
Common Stock, $.05 Par Value, Authorized
13,000,000 Shares, Issued 5,136,737
and 5,138,507 Shares, Respectively........ 256,837 256,925
Additional Paid-In Capital................. 5,624,239 5,638,220
Retained Earnings.......................... 32,772,044 33,145,777
Treasury Stock, at Cost (209,395 Shares
and 291,895 Shares, Respectively)......... (1,804,986) (2,530,196)
Cumulative Translation Adjustment.......... (76,649) (169,702)
Net Unrealized (Loss) on Securities
Available for Sale........................ (12,643) (12,737)
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36,758,842 36,328,287
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$43,321,427 $43,054,561
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</TABLE>
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ASTRO-MED, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended
------------------
August 3, August 2,
1996 1997
---- ----
<S> <C> <C>
Net Sales...................................... $11,178,773 $10,676,531
Cost of Sales.................................. 6,775,828 6,675,149
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Gross Profit................................... 4,402,945 4,001,382
Costs and Expenses:
Selling, General and Administrative........... 3,131,111 3,250,544
Research and Development...................... 597,592 697,369
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3,728,703 3,947,913
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Operating Income............................... 674,242 53,469
Other Income (Expense):
Investment Income............................. 151,669 200,718
Interest Expense.............................. (3,958) (10,055)
Other, Net.................................... 17,515 (64,462)
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165,226 126,201
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Income before Income Taxes..................... 839,468 179,670
Provision for Income Taxes..................... 253,000 42,000
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Net Income..................................... $ 586,468 $ 137,670
=========== ===========
Earnings Per Common Share...................... $.12 $.03
==== ====
Weighted Average Number of Common and Common
Equivalent Shares Outstanding................. 5,031,192 4,927,211
=========== ============
Divividends Declared Per Common Share.......... $.03 $.04
==== ====
</TABLE>
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ASTRO-MED, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Six Months Ended
----------------
August 3, August 2,
1996 1997
---- ----
<S> <C> <C>
Net Sales...................................... $21,668,594 $22,383,036
Cost of Sales.................................. 13,307,354 13,877,745
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Gross Profit................................... 8,361,240 8,505,291
Costs and Expenses:
Selling, General and Administrative........... 6,482,377 6,389,643
Research and Development...................... 1,203,507 1,406,696
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7,685,884 7,796,339
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Operating Income............................... 675,356 708,952
Other Income (Expense):
Investment Income............................. 670,708 394,918
Interest Expense.............................. (7,913) (13,294)
Other, Net.................................... 35,433 (88,480)
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698,228 293,144
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Income before Income Taxes..................... 1,373,584 1,002,096
Provision for Income Taxes..................... 344,000 286,055
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Net Income .................................... $ 1,029,584 $ 716,041
=========== ===========
Earnings Per Common Share...................... $.20 $.15
==== ====
Weighted Average Number of Common and Common
Equivalent Shares Outstanding................. 5,034,633 4,939,486
=========== ===========
Dividends Declared Per Common Share............ $.06 $.08
==== ====
</TABLE>
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<PAGE>
ASTRO-MED, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
----------------
August 3, August 2,
1996 1997
---- ----
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income................................. $1,029,584 $ 716,041
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and Amortization............ 455,432 588,869
Gain on Sale of Investment............... (416,090)
Other.................................... (93,147)
Changes in Assets and Liabilities:
Accounts Receivable.................... 806,853 1,274,405
Inventories............................ 859,510 (203,493)
Other.................................. (352,201) 308,308
Accounts Payable and Accrued Expenses.. (205,830) 679,910
Income Taxes........................... 295,768 (518,303)
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Total Adjustments..................... 1,443,442 2,036,549
Net Cash Provided by
Operating Activities..................... 2,473,026 2,752,590
Cash Flows from Investing Activities:
Proceeds from Sales of Securities
Available for Sale........................ 1,487,684 167,018
Purchases of Securities Available
for Sale.................................. (146,313) (1,202,173)
Proceeds from Sale of Building............. 515,935
Additions to Property, Plant and
Equipment................................ (425,966) (303,517)
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Net Cash Provided by
Investing Activities..................... 1,431,340 (1,338,672)
Cash Flows from Financing Activities:
Payments of Long-Term Debt................. (50,000) (89,078)
Proceeds from Common Shares Issued
Under Employee Benefit Plans.............. 43,137 14,069
Purchases of Treasury Stock................ (429,567) (725,210)
Dividends Paid............................. (299,440) (342,310)
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Net Cash (Used) by Financing Activities... (735,870) (1,142,529)
Net Increase in Cash and Cash
Equivalents................................ 3,168,496 271,389
Cash and Cash Equivalents, Beginning
of Period..................................... 2,033,713 6,561,184
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Cash and Cash Equivalents, End of Period...... $5,202,209 $6,832,573
========== ==========
Supplemental Disclosures of Cash Flow
Information:
Cash Paid During the Period for:
Interest................................. $ 24,410 $ 19,858
Income Taxes............................. $ 48,714 $ 600,956
Other Non-Cash Transactions:
Acquisition of Leased Equipment.......... $ 200,000
</TABLE>
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<PAGE>
ASTRO-MED, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
August 2, 1997
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, 1997.
(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.
In February, 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard (SFAS) No. 128, Earnings Per Share,
which supercedes APB Opinion 15. The Statement's objective is to simplify and
harmonize the computation of earnings per share and to make the U.S. standard
for computing earnings per share more compatible with the EPS standards of other
countries and with that of the International Accounting Standards Committee. As
required by SFAS No. 128, the Company will adopt this statement for the fiscal
year ending January 31, 1998.
Pro-Forma basic and diluted earnings per share had the Company adopted
SFAS No. 128 for the second quarter of fiscal year 1997 would have been $.12.
Pro-Forma basic and diluted earnings per share had the Company adopted SFAS No.
128 for the six month period of fiscal year 1997 would have been $.20 and $.21,
respectively.
Pro-Forma basic and diluted earnings per share had the Company adopted
SFAS No. 128 for the second quarter of fiscal year 1998 would have been $.03.
Pro-Forma basic and diluted earnings per share had the Company adopted SFAS No.
128 for the six month period of fiscal year 1998 would have been $.15.
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 2,
1997 1997
---- ----
<S> <C> <C>
Materials and Supplies.. $ 5,558,216 $ 5,866,270
Work-In-Process......... 779,337 1,088,201
Finished Goods.......... 4,023,952 3,610,527
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$10,361,505 $10,564,998
=========== ===========
</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 of $10,677,000 were lower than the prior year's
second quarter by 5%. The decrease was primarily due to the Company's
international channel which had a 20% decline from last year's second quarter
net sales. The strong US dollar adversely affected international net sales
dollars although unit volumes in France, England and Asia were also down from
last year. Domestically, net sales rose 2% over last year's second quarter. A
sales profile by product group indicates Bar Code/Label Printer Products and
Grass Products reported single digit growth rates and Core Products reported a
13% decline from last year's second quarter. For the six-month period, the
Company's net sales are $22,383,000 reflecting a 3% increase over the prior
year's net sales for the same period. The sales results by channel are mixed
with domestic volumes being up 9% over the prior year while international sales
are behind last year by 13%.
Gross Profit Margins reached 38% in the second quarter as compared to 39%
in last year's second quarter. The lower gross margin percentage is due to an
unabsorbed factory overhead stemming from the lower sales volume. The six-month
period has a similar profile with gross profit margins of 38% compared with last
year's gross profit margins of 39%.
Operating Expenses of $3,948,000 rose 6% from last year's second quarter
level and were 3% higher than this year's first quarter. The increase in
spending was due to additions in field sales personnel and Research &
Development expenditures. General & Administrative spending was 10% lower than
last year's second quarter and 11% lower than the first quarter. After six
months, Operating Expenses are $7,797,000, a 1% increment over the prior year
level. Selling and R & D expenses were up 5% and 17%, respectively, and G & A
spending was 20% lower than last year.
Second quarter other income, net of $126,000 which is net of currency
exchange loss of $92,000 was lower than last year's second quarter by $38,000.
Other income, net was $293,000 as compared to last year's $698,000 for the first
two quarters. The difference results from last year's gain of $416,000 realized
on the sale of a partnership interest from the Company's investment portfolio.
Financial Condition:
- --------------------
On the Balance Sheet, Assets rose 1% from the previous year. Cash and
Marketable Securities increased 18% to $14,151,000 while the Company's working
capital dollars remained flat at $28,247,000. Capital Expenditures were $398,000
during the second quarter with the primary investment being a capital lease
associated with the purchase of application software for the Company's
Information Technology architecture. The Company continued its
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<PAGE>
stock repurchase plan by purchasing 41,000 shares during the second quarter.
The Company's Shareholders' Equity balance rose slightly from a year ago to
$36,328,000 while the Company's book value per common share rose 3% to $7.50 at
the end of the second quarter.
Cash Flow decreased $325,000 during the second quarter as an outgrowth of
the lower earnings and the disbursements made for Treasury Stock, $411,000 and
Dividends, $196,000. For the six-month period of the current fiscal year, the
Company's cash flow has increased $272,000.
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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 8, 1997 By /s/ A. W. Ondis
____________________________
A. W. Ondis, Chairman
(Principal Executive Officer)
Date: September 8, 1997 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 2, 1997.
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-START> MAY-04-1997
<PERIOD-END> AUG-02-1997
<CASH> 6,832,573
<SECURITIES> 7,318,876
<RECEIVABLES> 7,037,331
<ALLOWANCES> 0
<INVENTORY> 10,564,998
<CURRENT-ASSETS> 33,427,235
<PP&E> 17,550,487
<DEPRECIATION> 9,665,708
<TOTAL-ASSETS> 43,054,561
<CURRENT-LIABILITIES> 5,179,885
<BONDS> 313,135
0
0
<COMMON> 256,925
<OTHER-SE> 36,071,362
<TOTAL-LIABILITY-AND-EQUITY> 43,054,561
<SALES> 10,676,531
<TOTAL-REVENUES> 10,676,531
<CGS> 6,675,149
<TOTAL-COSTS> 6,675,149
<OTHER-EXPENSES> 3,947,913
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,055
<INCOME-PRETAX> 179,670
<INCOME-TAX> 42,000
<INCOME-CONTINUING> 137,670
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 137,670
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
