<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 April 29, 2000
-------------------------------------------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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 - 4,423,086 shares
(excluding treasury shares) as of June 7, 2000
<PAGE>
ASTRO-MED, INC.
INDEX
Page No.
--------
Part I. Financial Information:
Consolidated Balance Sheets -
January 31, 2000 and April 29, 2000. ........................ 3
Consolidated Statements of Operations -
Three Months Ended May 1, 1999 and April 29, 2000............ 4
Consolidated Statements of Cash Flows -
Three Months Ended May 1, 1999 and April 29, 2000............ 5
Notes to Consolidated Financial Statements -
April 29, 2000............................................... 6,7
Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................... 8-9
Part II. Other Information...................................... 10
-2-
<PAGE>
Part I. FINANCIAL INFORMATION
ASTRO-MED, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
January 31, April 29,
ASSETS 2000 2000
---- ----
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and Cash Equivalents................... $ 4,035,867 $ 1,288,952
Securities Available for Sale............... 7,211,921 7,520,151
Accounts Receivable, Net.................... 9,270,814 9,388,162
Inventories................................. 11,537,478 12,301,586
Prepaid Expenses and Other Current Assets... 1,926,111 1,986,843
----------- -----------
Total Current Assets................... 33,982,191 $32,485,694
PROPERTY, PLANT AND EQUIPMENT 20,089,355 20,369,612
Less Accumulated Depreciation............... (12,577,878) (12,914,098)
----------- -----------
7,511,477 7,455,514
OTHER ASSETS
Excess of Cost Over Net Assets Acquired..... 3,153,371 2,897,246
Amounts Due from Officers................... 480,314 480,314
Other....................................... 257,178 241,435
----------- -----------
3,890,863 3,618,995
----------- -----------
$45,384,531 $43,560,203
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable............................ $ 6,379,792 $ 4,633,284
Accrued Compensation........................ 1,710,622 1,459,411
Accrued Expenses............................ 2,324,593 2,753,592
Income Taxes................................ 1,169,234 958,121
Current Maturities of Long-Term Debt........ 60,452 55,333
----------- ----------
Total Current Liabilities.............. 11,644,693 9,859,741
LONG-TERM DEBT, Less Current Maturities....... 71,588 49,729
DEFERRED INCOME TAXES......................... 447,666 407,283
SHAREHOLDERS' EQUITY
Preferred Stock, $10 Par Value,
Authorized 100,000 Shares, None Issued....
Common Stock, $.05 Par Value, Authorized
13,000,000 Shares, Issued 5,148,035
and 5,148,691 Shares, Respectively........ 257,402 257,435
Additional Paid-In Capital.................. 5,647,791 5,651,481
Retained Earnings........................... 33,065,454 33,046,555
Treasury Stock, at Cost (729,295 Shares))... (5,268,103) (5,268,103)
Accumulated Other Comprehensive Income (Loss) (481,960) (443,918)
----------- ----------
33,220,584 33,243,450
----------- -----------
$45,384,531 $43,560,203
=========== ===========
</TABLE>
-3-
<PAGE>
ASTRO-MED, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended
------------------
May 1, April 29,
1999 2000
---- ----
<S> <C> <C>
Net Sales.................................... $10,377,257 $12,374,201
Cost of Sales................................ 6,322,510 7,204,278
----------- -----------
Gross Profit................................. 4,054,747 5,169,923
Costs and Expenses:
Selling, General and Administrative........ 3,688,050 3,907,078
Research and Development................... 881,009 1,093,090
----------- -----------
4,569,059 5,000,168
----------- -----------
Operating Income (Loss)...................... (514,312) 169,755
Other Income (Expense):
Investment Income.......................... 171,489 119,416
Interest Expense........................... (4,092) (5,484)
Other, Net................................. (14,614) (72,047)
----------- -----------
152,783 41,885
----------- -----------
Income (Loss) before Income Taxes............ (361,529) 211,640
Income Taxes................................. (91,000) 53,780
----------- -----------
Net Income (Loss)............................ $ (270,529) $ 157,860
=========== ===========
Income (Loss) Per Common Share-basic......... $(.06) $.04
==== =====
Income (Loss) Per Common Share-diluted....... $(.06) $.04
==== =====
Weighted Average Number of Common and Common
Equivalent Shares Outstanding-basic........ 4,474,873 4,418,982
========= =========
Weighted Average Number of Common and Common
Equivalent Shares Oustanding-diluted....... 4,474,873 4,479,972
========= =========
Dividends Declared Per Common Share.......... $.04 $.04
==== ====
</TABLE>
-4-
<PAGE>
ASTRO-MED, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
------------------
May 1, April 29,
1999 2000
---- ----
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income (Loss)............................ $ (270,529) $ 157,860
Adjustments to Reconcile Net Loss to
Net Cash Provided by Operating Activities:
Depreciation and Amortization............. 350,384 367,346
Deferred Income Taxes..................... - (97,873)
Other..................................... (159,576) 83,488
Changes in Assets and Liabilities:
Accounts Receivable.................... 718,876 (117,348)
Inventories............................ (513,347) (764,108)
Other.................................. (169,473) 12,499
Accounts Payable and Accrued Expenses.. (420,958) (1,568,719)
Income Taxes........................... (44,155) (211,113)
--------- -----------
Total Adjustments.................... (238,249) (2,295,828)
Net Cash Used by Operating Activities...... (508,778) (2,137,968)
Cash Flows from Investing Activities:
Proceeds from Sales of Securities
Available for Sale......................... 1,891,670 385,241
Purchases of Securities Available
for Sale................................... (1,969,034) (693,471)
Refund of Purchase Price for Acquisition..... - 225,000
Additions to Property, Plant and Equipment... (356,200) (325,710)
---------- ----------
Net Cash Used by
Investing Activities..................... (433,564) (408,940)
Cash Flows from Financing Activities:
Principle Payments on Capital Leases......... (58,207) (26,978)
Proceeds from Common Shares Issued
Under Employee Benefit Plans............... 4,316 3,730
Purchases of Treasury Stock.................. (96,313) -
Dividends Paid............................... (180,499) (176,759)
---------- ----------
Net Cash Used by Financing Activities...... (330,703) (200,007)
Net Decrease in Cash and Cash Equivalents...... (1,273,045) (2,746,915)
Cash and Cash Equivalents, Beginning of Period. 4,946,289 4,035,867
---------- ----------
Cash and Cash Equivalents, End of Period....... $3,673,244 $1,288,952
========== ===========
Supplemental Disclosures of Cash Flow
Information:
Cash Paid During the Period for:
Interest................................. $ 3,155 $ 5,537
Income Taxes............................. $ 45,830 $ 232,823
</TABLE>
-5-
<PAGE>
ASTRO-MED, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 29, 2000
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, 2000.
(b) Net Income/Loss per common share has been computed and presented
pursuant to the provisions of Statement of Financial Accounting Standards No.
128, Earnings Per Share, which was adopted in fiscal 1998. Net income/loss per
share is based on the weighted average number of shares outstanding during the
period. Net income/loss per share assuming dilution is based on the weighted
average number of shares and, if dilutive, common equivalent shares for stock
options outstanding during the period.
<TABLE>
<CAPTION>
Three Months Ended
May 1, April 29,
1999 2000
---- ----
<S> <C> <C>
Weighted Average Common Shares
Outstanding-basic....................... 4,474,873 4,418,982
Diluted Effect of Options Outstanding..... - 60,990
Weighted Average Common Shares Outstanding
diluted................................. 4,474,873 4,479,972
========= =========
</TABLE>
For the three month's ended April 29, 2000 and May 1, 1999, the diluted per
share amounts do not reflect options outstanding of 987,850 and 939,375
respectively, because their effect is anti-dilutive.
Note 2 - COMPREHENSIVE INCOME
Effective February 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income". This statement
requires presentation of the components of comprehensive income, including the
changes in equity from non-owner sources such as unrealized gains (losses) on
securities and foreign currency translation adjustments. The Company's total
comprehensive income is as follows.
-6-
<PAGE>
Note 2 - COMPREHENSIVE INCOME (continued)
<TABLE>
<CAPTION>
Three Months Ended
------------------
May 1, April 29,
1999 2000
---- ----
<S> <C> <C>
Comprehensive Income (Loss):
Net Income (Loss) $(270,529) $ 157,860
--------- ---------
Other Comprehensive Income (Loss):
Foreign currency translation adjustments,
net of tax (88,018) (12,413)
Unrealized gain(loss) on securities:
Unrealized holding gain (loss)
arising during the period, net
of tax (62,210) 35,102
Reclassification adjustment for gain
(loss) included in net income, net
of tax 2,148 (1,875)
--------- ---------
Other Comprehensive Income (Loss): (148,080) 20,814
--------- ---------
Comprehensive Income (Loss) $(418,609) $ 178,674
========= =========
</TABLE>
Note 3 - 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:
January 31, April 29,
2000 2000
---- ----
Materials and Supplies... $ 5,835,050 $ 6,943,065
Work-In-Process.......... 1,557,734 1,480,681
Finished Goods........... 4,144,694 3,877,840
----------- -----------
$11,537,478 $12,301,586
=========== ===========
Note 4 - Purchase Price Refund
During the quarter ended April 29, 2000, the Company received $225,000
that was held in escrow relative to the acquisition of Telefactor Corporation.
The amount represents a reduction in purchase price. The purchase price is
subject to further post-closing price adjustments, which are currently in
negotiation.
-7-
<PAGE>
ASTRO-MED, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS:
Sales revenues in the first quarter were $12,374,000, a 19% increase
over the prior year's first quarter sales of $10,377,000. Sales from the
Company's recent acquisition, Telefactor, contributed to the first quarter
increment with sales revenues of $1,408,000. Domestic sales were $8,901,000 an
increase of $1,569,000 or 21% over the domestic sales of first quarter of fiscal
year 2000. Revenues through the Company's international channels were
$3,473,000, an increase of $428,000 or 14% over last year's first quarter export
sales.
The Company's product groups reported mixed results. QuickLabel Systems
(QLS) products led the Company's sales growth in the first quarter with sales of
$4,887,000. The QLS sales increase was 19% over last year with exceptional
growth through the Company's domestic channels being the prime reason for the
increment. Test & Measurement (T & M) sales in the quarter were virtually flat
with last year at $3,293,000. Sales of this product group varied by channel with
unit growth realized from the Company's domestic and foreign office branches,
whereas sales through the Company's international dealer network lagged behind
last year. Grass-Telefactor sales in the first quarter were mixed at $4,194,000
as compared to $2,940,000 for the prior year period. Although Telefactor product
sales were 11% of the Company's total sales in the quarter, Telefactor sales
were lower than expectations. Integration related activities of the Telefactor
and Grass Instrument product lines delayed shipments in the quarter. The Grass
Instrument's Heritage product line reported 13% growth in unit sales from last
year's first quarter.
Gross profit dollars were $5,170,000, a 27% increase over last year.
The Gross profit margin realized in the quarter was 41.8%, a notable improvement
over last year's margin of 39.1%. Product mix and improved margins in each
product group account for this quarter's result.
Operating Expenses in the quarter were $5,000,000, consuming 40(CENTS)
of the sales dollar. Selling and general administrative spending rose 6% from
last year to $3,907,000. The increment is due to additions in sales and
administration personnel from the Telefactor acquisition. Research and
development funding increased 24% from the prior year to $1,093,000, as the
Company increased its commitment to new product development by additions in
engineering personnel related to the Grass-Telefactor product group. In the
quarter, R & D spending was 9% of sales up from last year's run rate of 8%.
Operating income in the quarter was $170,000, a $684,000 improvement
from last year and provided a 1.4% yield on sales.
Other income decreased to $42,000 from last year's $153,000. The result
stems from lower interest and dividend income due to a reduced level of
investable funds.
-8-
<PAGE>
Net Income in the first quarter was $158,000 equal to 4(CENTS) earnings
per share. This compares to a net loss of $271,000, equal to 6(CENTS) loss per
share in the prior year's first quarter.
FINANCIAL CONDITION:
On the balance sheet, total assets were $43,560,000 at the end of the
first quarter, lower by 4% from the fiscal year 2000 year-end balance of
$45,385,000.
Cash and securities available for sale declined $2,439,000 in the
quarter to $8,809,000 at quarter's end. The demand placed on the Company's cash
balances during the year was traceable to working capital requirements, capital
expenditures and cash dividends.
Accounts Receivable balances rose 1% to $9,388,000 and reflects 62 days
sales outstanding.
Inventory dollars rose 7% to $12,302,000 from the year-end level as the
Company increased its build of components in anticipation of the new product
launch of the Everest and LRU product lines.
Capital expenditures were $326,000 in the quarter as the Company
purchased machinery and equipment, information technology hardware and software
and tools and dies.
The Company paid cash dividends in the quarter of $177,000 or 4(CENTS)
per common share. The book value per share remained at $7.42, matching the book
value per share at fiscal year 2000 year-end.
SAFE HARBOR STATEMENT
This document contains forward-looking statements based on current
expectations that involve a number of risks and uncertainties. The factors that
could cause actual results to differ materially include the following: general
economic conditions and growth rates in the data acquisition, digital color
printing, and neurophysiology markets, including but not limited to the
electronic, printing, and medical markets; competitive factors and pricing
pressures; changes in product mix; changes in the seasonality of demand
patterns; the timely development and acceptance of new products; inventory risks
due to shifts in market demand; component constraints and shortages; risk of
non-payment of accounts receivable; ramp up and expansion of manufacturing
capacity; risks associated with the Euro conversion; and the risks described
from time to time in Astro-Med's reports filed with the Securities and Exchange
Commission.
-9-
<PAGE>
PART II. OTHER INFORMATION
Item 4. Results of Votes of Security Holders
An Annual Meeting of Shareholders of the registrant was held May 16,
2000. A proposed increase in the maximum shares under the 1997 Incentive Stock
Option Plan of 500,000 to 1,250,000 was presented to shareholders for their
approval. Also, shareholders were asked to elect a Board of Directors to serve
until the next Annual Meeting of Shareholders or until their successors are
elected and qualified.
The Company proposed increase in the maximum share under the 1997
Incentive Stock Option Plan was approved by the following vote: For-2,307,026;
Against-568,362; Abstain-12,131.
In an uncontested election, nominees for directors were elected by the
following votes:
Name of Nominee Votes Votes
for Director For Withheld
--------------- ---- --------
Albert W. Ondis 3,859,637 377,082
Everett V. Pizzuti 3,859,637 377,082
Jacques V. Hopkins 3,859,862 376,857
Hermann Viets 3,859,862 376,857
Neil K. Robertson 3,859,862 376,857
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
None.
(b) Reports on Form 8-K:
On February 25, 2000 the Company filed Amendment No. 1 to the Form
8-K indicating that under the provisions of Regulation S-K no financial
statements were required to be filed with respect to the acquisition of
Telefactor Corporation.
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: June 7, 2000 By ____________________________
A. W. Ondis, Chairman
(Principal Executive Officer)
Date: June 7, 2000 By ____________________________
Joseph P. O'Connell, Vice
President and Treasurer
(Principal Financial Officer)
-10-
