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 October 28, 2000
-------------------------------------------------May 5, 2001
----------------------------------
OR
__ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________________ to _______________________from_____________to______________
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
- --------------------------------------------------------------------------------
(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 - 4,229,1274,264,324 shares
(excluding treasury shares) as of November 30, 2000June 1, 2001
-1-
ASTRO-MED, INC.
INDEX
Page No.
--------
Part I. Financial Information:
Consolidated Balance Sheets -
May 5, 2001 and January 31, 2000 and October 28, 2000 ......................2001.................................... 3
Consolidated Statements of Income -
Three Months Ended October 30, 1999May 5, 2001 and October 28, 2000....April 29, 2000................... 4
Consolidated Statements of Income -
Nine Months Ended October 30, 1999 and October 28, 2000 .... 5
Consolidated Statements of Cash Flows -
NineThree Months Ended October 30, 1999May 5, 2001 and October 28, 2000 .... 6April 29, 2000................... 5
Notes to Consolidated Financial Statements -
October 28, 2000 ........................................... 7,8May 5, 2001......................................................... 6-7
Management's Discussion and Analysis of Financial
Condition and Results of Operations......................... 9-11Operations................................. 8-9
Part II. Other Information..................................... 12Information............................................. 10
-2-
Part I. FINANCIAL INFORMATION
ASTRO-MED, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
May 5, January 31,
October 28,
ASSETS 2000 20002001 2001
---- ----
(Unaudited)
CURRENT ASSETS
Cash and Cash Equivalents...................Equivalents.................. $ 4,035,8671,613,564 $ 2,442,534806,069
Securities Available for Sale............... 7,211,921 6,186,565Sale.............. 4,315,911 5,362,523
Accounts Receivable, Net.................... 9,270,814 9,368,028
Inventories................................. 11,537,478 11,238,268Net................... 9,067,923 10,663,624
Inventories................................ 11,352,548 10,782,425
Prepaid Expenses and Other Current Assets... 1,926,111 1,946,444
----------- -----------Assets.. 2,037,035 2,038,227
------------ ------------
Total Current Assets................... 33,982,191 $31,181,839Assets..................... 28,386,981 29,652,868
PROPERTY, PLANT AND EQUIPMENT 20,089,355 20,687,49522,999,047 22,547,305
Less Accumulated Depreciation............... (12,577,878) (13,509,836)
----------- -----------
7,511,477 7,177,659Depreciation.............. (14,553,889) (14,259,992)
------------ ------------
8,445,158 8,287,313
OTHER ASSETS
Goodwill, Net of Accumulated Amortization... 3,153,371 2,797,025Goodwill................................... 2,430,886 2,465,494
Amounts Due from Officers...................Officers.................. 480,314 480,314
Other....................................... 257,178 121,916
----------- -----------
3,890,863 3,399,255
----------- -----------
$45,384,531 $41,758,753
=========== ===========Other...................................... 110,787 172,941
------------ ------------
3,021,987 3,118,749
------------ ------------
$ 39,854,126 $ 41,058,930
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable............................Payable........................... $ 6,379,7923,594,235 $ 4,986,6483,711,248
Accrued Compensation........................ 1,710,622 1,432,008Compensation....................... 1,232,348 1,974,223
Accrued Expenses............................ 2,324,593 2,128,763Expenses........................... 1,511,662 1,916,597
Income Taxes................................ 1,169,234 327,690Taxes Payable....................... 156,369 96,058
Current Maturities of Long-Term Debt........ 60,452 57,038
----------- ----------Debt....... 47,735 46,832
------------ ------------
Total Current Liabilities.............. 11,644,693 8,932,147Liabilities................ 6,542,349 7,744,958
LONG-TERM DEBT, Less Current Maturities....... 71,588 26,290Maturities..... 12,492 24,755
DEFERRED INCOME TAXES......................... 447,666 388,769TAXES....................... 939,804 996,157
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 5,158,3875,161,904
5,160,780 Shares, Respectively........ 257,402 257,926respectively............ 258,093 258,039
Additional Paid-In Capital.................. 5,647,791 5,698,758Capital................. 5,625,644 5,706,870
Retained Earnings........................... 33,065,454 32,261,730Earnings.......................... 32,648,326 32,667,859
Treasury Stock, at Cost (729,295 Shares).... (5,268,103) (5,268,103)(897,895 and
930,895 Shares, respectively)............. (5,860,610) (6,076,003)
Accumulated Other Comprehensive Income (Loss) (481,960) (538,764)
----------- -----------
33,220,584 32,411,547
----------- -----------
$45,384,531 $41,758,753
=========== ===========Loss....... (311,972) (263,705)
------------ ------------
32,359,481 32,293,060
------------ ------------
$ 39,854,126 $ 41,058,930
============ ============
-3-
ASTRO-MED, INC.
UNAUDITED
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
October 30, October 28,
1999-------------------
May 5, April 29,
2001 2000
---- ----
(Unaudited)
Net Sales.................................... $11,044,728 $11,730,836Sales................................... $12,435,979 $12,530,201
Cost of Sales................................ 6,470,743 7,497,955
-----------Sales............................... 7,383,886 7,360,278
---------- -----------
Gross Profit................................. 4,573,985 4,232,881Profit................................ 5,052,093 5,169,923
Costs and Expenses:
Selling, General and Administrative........ 3,376,717 4,148,908Administrative....... 4,127,067 3,907,078
Research and Development................... 770,182 978,439Development.................. 908,533 1,093,090
---------- -----------
5,035,600 5,000,168
---------- -----------
4,146,899 5,127,347
Operating Income (Loss)...................... 427,086 (894,466)Income............................ 16,493 169,755
Other Income (Expense):
Investment Income.......................... 166,353 111,698Income......................... 85,128 119,416
Interest Expense........................... (3,718) (3,841)Expense.......................... (1,289) (5,484)
Other, Net................................. (40,962) (143,364)
------------Net................................ 86,763 (72,047)
---------- -----------
121,673 (35,507)170,602 41,885
---------- -----------
Income (Loss) before Income Taxes............ 548,759 (929,973)
Provision forTaxes.................. 187,095 211,640
Income Tax Expense (Benefit)... 138,314 (232,000)
------------ ------------Taxes................................ 37,420 53,780
---------- -----------
Net Income (Loss)............................Income.................................. $ 410,445149,675 $ (697,973)157,860
========== ===========
===========
Earnings (Loss)Income Per Common Share-basic.......Share - Basic and Diluted. $ .09 $(.16)
==== =====
Earnings (Loss) Per Common Share-diluted.....0.04 $ .09 $(.16)
==== =====0.04
========== ===========
Weighted Average Number of Common and Common
Equivalent Shares Outstanding-basic........ 4,410,402 4,428,825
========= =========Outstanding-Basic....... 4,241,211 4,418,982
========== ===========
Weighted Average Number of Common and Common
Equivalent Shares Oustanding-diluted....... 4,451,715 4,446,487
========= =========Outstanding-Diluted....... 4,245,088 4,479,972
========== ===========
Dividends Declared Per Common Share.......... $.04 $.04
==== ====$ .04 $ .04
========== ===========
-4-
ASTRO-MED, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
Nine Months Ended
October 30, October 28,
1999 2000
---- ----
Net Sales.................................... $32,506,666 $37,324,509
Cost of Sales................................ 19,311,685 22,519,119
----------- -----------
Gross Profit................................. 13,194,981 14,805,390
Costs and Expenses:
Selling, General and Administrative........ 10,640,132 12,054,515
Research and Development................... 2,444,022 3,214,073
----------- -----------
13,084,154 15,268,588
----------- -----------
Operating Income (Loss)...................... 110,827 (463,198)
Other Income (Expense):
Investment Income.......................... 512,620 342,178
Interest Expense........................... (11,291) (6,038)
Other, Net................................. (63,397) (234,264)
----------- ----------
437,932 101,876
----------- -----------
Income (Loss) before Income Taxes............ 548,759 (361,322)
Provision for Income Tax Expense (Benefit)... 138,314 ( 88,953)
----------- ------------
Net Income (Loss)............................ $ 410,445 $ (272,368)
=========== ===========
Earnings (Loss) Per Common Share-basic. ..... $ .09 $(.06)
=== =====
Earnings (Loss) Per Common Share-diluted..... $ .09 $(.06)
==== =====
Weighted Average Number of Common and Common
Equivalent Shares Outstanding-basic........ 4,439,580 4,424,321
========= =========
Weighted Average Number of Common and Common
Equivalent Shares Oustanding-diluted....... 4,498,602 4,463,154
========= =========
Dividends Declared Per Common Share.......... $.12 $.12
==== ====
-5-
ASTRO-MED, INC.
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
NineThree Months Ended
-----------------
October 30, October 28,
1999------------------
May 5, April 29,
2001 2000
---- ----(Unaudited)
Cash Flows from Operating Activities:
Net Income (Loss) ...........................Income...................................... $ 410,445149,675 $ (272,368)157,860
Adjustments to Reconcile Net Income (Loss) to Net
Cash Provided(Used) by Operating Activities:
Depreciation and Amortization .......... 950,283 1,063,305
Gain on Sale of Assets ................. 3,912 --
Other .................................. (895) 69,661
Changes in Assets and Liabilities:
Accounts Receivable ..................... (399,864) (97,214)
Inventories ............................. (267,732) 299,210
Other ................................... (98,441) 37,156
Accounts Payable and Accrued Expenses ... 1,057,768 (1,867,588)
Income Taxes ............................ 45,541 (841,544)
----------- -----------
Total Adjustments ..................... 1,290,572 (1,337,014)
Net Cash Provided (Used) by Operating
Activities:
................... 1,701,017 (1,609,382)Depreciation and Amortization............... 328,505 367,346
Deferred Income Taxes....................... (56,353) (97,873)
Other....................................... (20,878) 83,488
Changes in Assets and Liabilities:
Accounts Receivable....................... 1,595,701 (117,348)
Inventories............................... (692,708) (764,108)
Other..................................... 63,535 12,499
Accounts Payable and Accrued Expenses..... (1,134,057) (1,568,719)
Income Taxes Payable...................... 60,311 (211,113)
---------- -----------
Total Adjustments....................... 144,056 (2,295,828)
Net Cash Provided (Used) by Operating
Activities................................ 293,731 (2,137,968)
Cash Flows from Investing Activities:
Proceeds from Sales of Securities
Available for Sale ........................ 3,386,519 3,109,928Sale............................ 1,942,713 385,241
Purchases of Securities Available
for Sale .................................. (3,670,486) (2,084,572)
Proceeds from Sales of Assets ............... 2,800 --Sale...................................... (896,101) (693,471)
Refund of Purchase Price for Acquisition ....Acquisition........ - 225,000
Additions to Property, Plant and Equipment .. (867,871) (705,731)
-----------Equipment...... (356,546) (325,710)
---------- -----------
Net Cash Provided (Used) Provided by
Investing Activities .................... (1,149,038) 544,625Activities........................ 690,066 (408,940)
Cash Flows from Financing Activities:
PrinciplePrincipal Payments on Capital Leases ........ (188,733) (48,712)
Proceeds from Capital Lease Obligations ..... 135,615 --Leases............ (11,360) (26,978)
Proceeds from Common Shares Issued
Under Employee Benefit Plans .............. 14,495 51,492
Purchases of Treasury Stock ................. (451,001) --Plans.................. 4,266 3,730
Dividends Paid .............................. (535,141) (531,356)
-----------Paid.................................. (169,208) (176,759)
---------- -----------
Net Cash Used by Financing Activities ..... (1,024,765) (528,576)Activities......... (176,302) (200,007)
Net DecreaseIncrease (Decrease) in Cash and Cash
Equivalents ....... (472,786) (1,593,333)Equivalents................................... 807,495 (2,746,915)
Cash and Cash Equivalents, Beginning of Period .. 4,946,289Period. 806,069 4,035,867
---------- -----------
-----------Cash and Cash Equivalents, End of Period .............Period.......... $1,613,564 $ 4,473,503 $ 2,442,534
===========1,288,952
========== ===========
Supplemental Disclosures of Cash Flow
Information:
Cash Paid During the Period for:
Interest ................................Interest.................................... $ 10,9791,289 $ 3,2465,537
Income Taxes ............................Taxes................................ $ 45,83020,900 $ 752,591232,823
-6--5-
ASTRO-MED, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
October 28, 2000May 5, 2001
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, 2000.2001. Certain reclassifications have been made to
conform to the current period reporting format.
(b) EarningsNet Income per common share has been computed and presented pursuant to
the provisions of Statement of Financial Accounting Standards No. 128, Earnings
Per Share. Earning (loss)Net income per share - basic is based on the weighted average number of
shares outstanding during the period. Earnings (loss)Net income 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.
Three Months Ended Nine Months Ended
October 30, October 28, October 30, October 28,
1999 2000 1999 2000
---- ---- --- ----
Weighted Average Common Shares
Outstanding-basic ..................... 4,410,402 4,428,825 4,439,580 4,424,321
Diluted Effect of Options Outstanding..... 41,313 17,662 59,022 38,833
--------- ---------- --------- ---------
Weighted Average Common Shares
Outstanding - diluted................... 4,451,715 4,446,487 4,498,602 4,463,154Three Months Ended
------------------
May 5, April 29,
2001 2000
----- ----
Weighted Average Common Shares
Outstanding - Basic....................... 4,241,211 4,418,982
Diluted Effect of Options Outstanding....... 3,877 60,990
Weighted Average Common Shares Outstanding --------- ---------
- Diluted................................. 4,245,088 4,479,972
========= ========= ========= =========
For the three month's ended October 30, 1999May 5, 2001 and October 28,April 29, 2000,
respectively, the diluted per
share amounts do not reflect options outstanding of 545,3751,668,075 and 1,125,825,987,850
respectively, because their effect is anti-dilutive.
For(c) Derivative Instruments and Hedging: On February 1, 2001, the
nine month's ended October 30, 1999Company adopted SFAS No. 133, Accounting for Derivative Instruments and October 28,Hedging
Activities, as amended by SFAS No. 137, Accounting for Derivative Instruments
and Hedging Activities - Deferral of the Effective Date of SFAS No. 133, and as
amended in June 2000 respectively,by SFAS No. 138 Accounting for Certain Derivative
Instruments and Certain Hedging Activities - an Amendment to SFAS No. 133
(combined SFAS No. 133). The statement requires companies to record derivatives
on the diluted per sharebalance sheet as assets or liabilities, measured at fair value. Gains or
losses resulting from changes in the values of those derivatives would be
accounted for depending on the use of the derivative and whether it qualifies
for hedge accounting. The adoption of this statement did not have a material
impact on the Company's results of operations or financial position.
(d) Revenue Recognition: Revenue is recognized when products or services
are performed and the risk and rewards of ownership have been transferred.
(e) In July 2000, the Emerging Issues Task Force, a body of the Financial
Accounting Standards Board, reached a consensus on Issue No. 00-10, Accounting
for Shipping and Handling Fees and Costs. The consensus
-6-
requires companies to start reporting amounts do not reflect options outstandingbilled to customers in a sales
transaction related to shipping and handling as revenue in the fourth quarter of
545,375 and 943,875, respectively because their effect is anti-dilutive.
-7-
fiscal year 2001. The Company previously reported these amounts as a reduction
of cost of goods sold. All previous periods presented have been reclassified to
conform to the current practice. The amount reclassed for three months ending
April 29, 2000 was $156,000.
Note 2 - COMPREHENSIVE INCOME
The components ofCompany's total comprehensive income including the changes in equity
from non-owner sources suchis as unrealized gains (losses) on securities and
foreignfollows.
Three Months Ended
------------------
May 5, April 29,
Comprehensive Income (Loss): 2001 2000
---- ----
Net Income ................................ $149,675 $157,860
-------- --------
Other Comprehensive Income (Loss):
Foreign currency translation adjustments,
are as follows.
Three Months Ended Nine Months Ended
October 30, October 28, October 30, October 28,
1999 2000 1999 2000
---- ---- ---- ----
Comprehensive Income:
Net Income (Loss) .................... $ 410,445 $(697,973) $ 410,445 $(272,368)
--------- --------- --------- ---------
Other Comprehensive Income (Loss):
Foreign currency translation
adjustments, net of tax ...... 6,858 (95,480) (16,805) (168,572)
Unrealized gain (loss)
in securities:
Unrealized holding gain (loss)
arising during the period,
net of tax .................. (31,666) 65,220 (191,243) 111,768
Reclassification adjustment
for gain (loss) included in
net income, net of tax ...... -- -- -- --
--------- --------- --------- ---------
Other Comprehensive Loss ............. (24,808) (30,260) (208,048) (56,804)
Comprehensive Income (Loss) ............. $ 385,637 $(728,233) $ 202,397 $(329,172)
========= ========= ========= =========
net of tax........................... (71,390) (12,413)
Unrealized gain on securities:
Unrealized holding gain
arising during the period, net
of tax................................ 22,498 35,102
Reclassification adjustment for gain
(loss) included in net income, net of tax 625 (1,875)
-------- ---------
Other Comprehensive Income (Loss).......... (48,267) 20,814
-------- ---------
Comprehensive Income....................... $101,408 $178,674
======== ========
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, October 28,
2000 2000
---- ----
Materials and Supplies... $ 5,835,050 $ 5,583,992
Work-In-Process.......... 1,557,734 1,298,125
Finished Goods........... 4,144,694 4,356,151
----------- -----------
$11,537,478 $11,238,268May 5, January 31,
2001 2001
---- ----
Materials and Supplies.. $ 6,242,777 $ 5,921,934
Work-In-Process......... 1,488,964 1,282,466
Finished Goods.......... 3,620,807 3,578,025
----------- -----------
$11,352,548 $10,782,425
=========== ===========
-8-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 represented a reduction in purchase price.
-7-
ASTRO-MED, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS:
FOR THREE-MONTHS ENDING OCTOBER 28, 2000 VS. OCTOBER 30, 1999:
NetResults of Operations:
- ----------------------
Sales were $11,731,000 up 6% over last year's quarter sales of
$11,045,000. Excluding Telefactor, which was acquired in December of 1999, our
net sales for the first quarter were essentially flat. However, the $680,000$12,436,000, a decrease of Telefactor products sold during the quarter was well below the breakeven level
required by Telefactor's current cost structure. Hence, this quarter's low
volume of Telefactor shipments together with the weak demand for Astro-Med
products in our export markets, were the prime contributors to the third
quarter's loss of $698,000.
Profiling the sales by Product Group has QuickLabel Systems (QLS) sales
at $4,233,000, up 5% from the third quarter of last year. The Grass-Telefactor
product sales were $3,648,000, up 41% over last year's quarter with Telefactor
accounting for 26% of increase. Test & Measurement's (T & M) sales were
$3,850,000, down 13% over last year. The decline in T & M sales is attributed
primarily to the lower volume of Everest sales, the Company's new touch screen
windows based data recorder. The Everest was introduced in the second quarter of
this year to replace older technology in the telemetry markets.
In our domestic markets, sales rose 13% over last year to $9,082,000.
Growth in those channels was affected by a 12% increase in QLS's sales as well
as by a 60% increase in Grass-Telefactor sales volume, with 34% of the increase
attributed to Telefactor sales. T & M's domestic sales decreased 12% from last
year's third quarter sales. In the international markets, export sales declined
12% to $2,649,000 as compared to last year's third quarter. The decline can be
attributed to the continued strength of the dollar rendering our products less competitive in foreign markets. To address these pricing pressures we are
developing and introducing new lower cost products to compete with foreign
manufacturers.
Gross Profit was $4,233,000 in the third quarter, a 7% decline over
last year. The gross profit margin for the quarter was 36.1% compared to last
year's gross profit margin of 41.4%. The decline in the third quarter margin is
mainly attributable to 1) product mix and the decline in the sales volume; 2)
costs associated with transferring Telefactor's Pennsylvania manufacturing
operation to our Braintree, Massachusetts facility and 3) the severance costs
relating to the Telefactor workforce reduction.
Operating expenses reached $5,127,000 in the quarter, increasing 24%
from last year's expense level. The increment is traceable exclusively to
general and administrative functions associated with the Telefactor acquisition
as well as personnel additions in sales, service, research and development.
Spending in the quarter consumed 43.7CENTS of each sales dollar up from last
year's level of 37.5CENTS. In addition, the Company continues to make strategic
investments in its new product initiatives through its research and development
(R&D) spending. R&D as a percentage of sales in the third quarter was 8.3% up
from 7.0% over last year.
An operating loss of $894,000 was incurred this year as compared to
operating income of $427,000 in the prior year.
-9-
FOR THREE-MONTHS ENDING OCTOBER 28, 2000 VS. OCTOBER 30, 1999 (CONTINUED):
The Company incurred a loss of $36,000 in the quarter from its
non-operating activities, downthan 1%
from the prior year's income levelfirst quarter sales of $122,000.
This decline is attributed to lower investment income stemming$12,530,000. Domestic sales were
$9,041,000 down slightly from a lower
level of investments and foreign currency translation and transactions losses of
$136,000.
Net loss in the third quarter was $698,000 or 16CENTS loss per share.
The Company reported net income of $410,000 or 9CENTS earnings per share$9,057,000 for the prior year's third quarter.
FOR NINE-MONTHS ENDED OCTOBER 28, 2000 VS. OCTOBER 30, 1999
After nine months, sales are $37,325,000, 15% higher than last year's
sales of $32,507,000. QLS's sales were $13,735,000, up 13% from last year while
Grass-Telefactor sales were $12,880,000, up 53% over the last year with
Telefactor contributing 46% of the increase. Although T & M's sales of
$10,710,000 are behind last year's by 10%, the current trend in T & M continues
to be positive. We have experienced sales growth in each succeedingfirst quarter of the currentprior
fiscal year. Sales through domesticthe Company's international channels were $27,319,000, up 14% from last
year. Export$3,395,000,
down 2% over previous year's first quarter sales of $3,473,000. Our
international sales were $10,006,000, up 16% from last year with Telefactor
accounting fornegatively impacted by the majoritystrengthening of the increase. GrowthU.S.
dollar that occurred during the first quarter because on a local currency basis
international sales increased 6% from the previous year.
The Company's product groups reported mixed sales results. Grass-
Telefactor's sales increased to $4,519,000, a 6% increase over the $4,256,000
of sales reported in the domestic channels was
helped by the increase in QLS's sales to $9,341,000, up 17% over last year and
an increase in Grass-Telefactor's sales to $9,506,000, up 47% over last year
with 40%first quarter of the increase attributed to Telefactor. T & M's domestic net sales
decreased to $8,472,000, down 10% over last year's sales.
On a year to date basis, gross profit was $14,805,000, reflecting a
gross profit margin of 39.7%, a decline over last year's margin of 40.6%. The
decline in gross margin can be attributed directly to the third quarter product
mix and the previously mentioned Telefactor costs. Prior to the third quarter,
the year to date gross profit margin was 41.3%.
After nine months, operating expenses were $15,269,000, representing a
17% increase over lastprevious year. This increase is
primarily attributed to the Telefactor factors previously mentioned. Spendingincrease in the Grass-Telefactor research and
supplies sales. QuickLabel Systems (QLS) product sales were $4,899,000, down 2%
from the $5,024,000 record level achieved in the first quarter of the previous
year. This decrease is attributed to the decrease in hardware sales. Test &
Measurement (T&M) sales in the quarter consumed
40.9CENTSwere $3,018,000, down 7% from $3,250,000
reported in the first quarter of eachthe previous year. The decline in T&M sales
dollar upcan be attributed to international channels as T&M's domestic sales increased 6%
when compared to the previous fiscal year.
Gross profit dollars were $5,052,000, a 2% decrease over last year. The
gross profit margin realized in the quarter was 40.6%, a decrease from last
year's levelmargin of 40.3CENTS.
After three-quarters,41.3%. Product mix and lower margins in T&M account for this
quarter's result.
Operating Expenses in the operating loss incurred was $463,000
reflecting a $574,000 declinequarter were $5,036,000. Selling and general
administrative spending rose 6% from last year to $4,127,000 due to higher
international dealer commissions in this quarter as compared to last year.
Research and development funding decreased 17% from the prior year to
$909,000. In the quarter, R & D spending was 7.3% of sales down from last
year's operatingrate of 8.7%.
Operating income of
$111,000.in the quarter was $16,000 a $154,000 decline from last
year.
Other income forincreased to $171,000 from last year's $42,000. The increase
is attributed to a $125,000 gain relating to the nine monthssettlement of litigation on a
contract dispute.
Net income in the first quarter was $102,000 as compared with $438,000
for the previous year. Lower investment income and $239,000 of foreign currency
translation and transaction losses accounted for the decrease.
After nine months the Company's net loss is $272,000 or 6CENTS loss$150,000 equal to $0.04 earnings per
share as comparedshare. This compares to a net income of $410,000 or 9CENTS$158,000, equal to $0.04 earnings per
share in the prior year's first quarter.
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Financial Condition:
- --------------------
The Company's Statements of Cash Flows for the prior year.
FINANCIAL CONDITION:
The Company's statements of cash flow for the nine-months ended October
28,three-months ending May 5,
2001 and April 29, 2000 and October 30, 1999 are included on page 6.5. Net cash flow from
operationsprovided by
operating activities for the thirdcurrent quarter equaled $629,000, down 3% from last year. Netwas $294,000 versus cash flow used
by operations foroperating activities of $2,138,000 in the nine-monthsfirst quarter of the current fiscal year equaled
$1,609,000. This significantprevious year.
Cash and securities available for sale declined $239,000 from year-end.
The demand placed on the Company's cash outflow from operations can be mainly
attributedbalances during the quarter was
traceable to an effort to bring accounts payable current and meeting income tax
payment obligations.
During the nine-months ended, approximately $3.0 million of debt
securities matured of which $1.0 million was used to fund operating activitiesworking capital requirements and capital expenditures.
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FINANCIAL CONDITION (CONTINUED):
We paid cash dividends during the third quarter of 4CENTS per share.
The Company's book value per sharecollection cycle improved by four days decreasing to 62 days sales
outstanding at the end of the third quarter was $7.32,
down slightlyas compared to the 66 days outstanding at
year-end.
Inventory rose to $11,353,000 from the year end value of $7.39 per share.
On November 22, 2000,year-end level as the Company
repurchased 201,600 sharesincreased its build of its
common stock for $806,400.
NEW ACCOUNTING PRONOUNCEMENTS:
In June 1998,components in anticipation of the Financial Accounting Standards Board (FASB) issued
Statementproduct launch of Financial Accounting Standards (SFAS) No. 133 "Accounting for
Derivative Instrumentsthe
new Dash 18 and Hedging Activities." SFAS 133 requires an entityPronto product lines. As a result, inventory turns declined to
recognize all derivatives2.2 times from 2.5 times at year-end.
Capital expenditures were $357,000 in the quarter ended May 5, 2001 as either assets or liabilitiesthe
Company purchased machinery and measure those
instruments at fair value. In June 1999, the FASB issued SFAS 137, which
deferred the effective date of SFAS 133 to all fiscal quarters of years
beginning after June 15, 2000. In June 2000, the FASB issued SFAS 138 which
addressed issues causing implementation difficulties with SFAS 133equipment, information technology hardware and
also
amended the accountingsoftware and reporting standards of SFAS 133 for certain
derivative instrumentstools and hedging activities.dies.
The Company does not currently
enter into derivative transactions; however, the Company is evaluating whether
the use of foreign exchange contracts will minimize its foreign currency
exposurespaid cash dividends in the future.
In December 1999, the Securities and Exchange Commission (SEC) issued
Staff Accounting Bulletin (SAB) 101, "Revenue Recognition in Financial
Statements," which summarizes the staff's views regarding the application of
generally accepted accounting principles to selected revenue recognition issues.
In June 2000, the SEC issued SAB 101B which delayed the implementation date of
SAB 101 until no later than the fourth quarter of 2000.
The Company is still in the process of evaluating the impact of the
adoption of SAB 101 on the results of operations and financial position.
In July 2000, the Emerging Issues Task Force (EITF) reached a consensus
on Issue No. 00-10, "Accounting for Shipping and Handling Fees and Costs". The
consensus provides guidance as to how a seller of goods should classify costs
incurred for shipping and handling in the income statement. The EITF determined
that amounts billed to a customer in a sale transaction related to shipping and
handling should be classified as revenue. The EITF requires that the Company
adopt this guidance in the fourth quarter. The Company currently includes
amounts billed to customers as a reduction of shipping and handling costs which
are included in the cost of sales. Upon adoption, the Company will present such
costs as revenue.
SAFE HARBOR STATEMENT:$169,000 or $0.04 per
common share.
Safe Harbor Statement
- ---------------------
This document contains forward-looking statements based on current
expectations that involve a number of risks and uncertainties. The factors thatFactors which
could cause actual results to differ materially from those anticipated include,
the following:but are not limited to, general economic, conditionsfinancial and growth ratesbusiness conditions;
declining demand in the test and measurement markets, especially defense and
aerospace; competition in the specialty printer industry; ability to develop
market acceptance of the QLS color printer products and effective design of
customer required features; competition 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; changesindustry;
competition 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;neurophysiology industry; the impact of changes in foreign
currency exchange rates on the result fromresults of operations; the ability to
successfully integrate acquisitionsacquisitions; the business abilities and eliminate redundant costsjudgment of
personnel and the risks
described from time to timechanges in Astro-Med's reports filed with the Securities and
Exchange Commission.
-11-business strategy.
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PART II. OTHER INFORMATION
Item 4. Results of Votes of Security Holders
An Annual Meeting of Shareholders of the registrant was held May 15, 2001.
A proposed increase in the maximum shares under the 1998 Non-Qualified Stock
Option Plan of 600,000 to 1,000,000 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 1998
Non-Qualified Stock Option Plan was approved by the following vote:
For-2,216,049; Against-518,303; Abstain-4,611.
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 3,707,640 375,360
Everett V. Pizzuti 3,705,640 377,360
Jacques V. Hopkins 3,711,565 371,435
Hermann Viets 3,711,340 371,660
Neil K. Robertson 3,711,471 371,529
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.None.
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 4, 2000June 11, 2001 By ____________________________/s/ A. W. Ondis
--------------------------------
A. W. Ondis, Chairman
(Principal Executive Officer)
Date: December 4, 2000June 11, 2001 By ____________________________/s/ Joseph P. O'Connell
--------------------------------
Joseph P. O'Connell,
Vice President and Treasurer
(Principal Financial Officer)
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