UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X[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
------------------------------------------------May 3, 1997
_________________________________________
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
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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 [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 - 4,966,1834,886,635 shares
(excluding treasury shares) as of October 25, 1996May 23,1997
-1-
ASTRO-MED, INC.
INDEX
Page No.
--------
Part I. Financial Information:
Consolidated Balance Sheets -
January 31, 19961997 and November 2,1996......................May 3, 1997. ........................ 3
Consolidated Statements of Income -
Three Months Ended October 28, 1995May 4, 1996 and November 2, 1996..May 3, 1997............ 4
Consolidated Statements of Income
Nine Months Ended October 28, 1995 and November 2, 1996... 5
Consolidated Statements of Cash Flows -
NineThree Months Ended October 28, 1995May 4, 1996 and November 2, 1996... 6May 3, 1997............ 5
Notes to Consolidated Financial Statements -
November 2, 1996.......................................... 7May 3, 1997............................................... 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations....................... 8,97
Part II. Other Information................................... 10,11
Item 6. Exhibits and Reports on Form 8-K
2Information.................................... 8,9
-2-
Part I. FINANCIAL INFORMATION
ASTRO-MED, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
January 31, November 2,May 3,
ASSETS 1996 19961997 1997
------------ ------------
(Unaudited)
CURRENT ASSETS
Cash and Cash Equivalents.................. $ 2,033,7136,561,184 $ 6,138,9427,157,818
Securities Available for Sale.............. 6,659,828 6,942,4977,099,358 7,185,894
Accounts Receivable, Net................... 8,318,005 8,331,1168,311,736 7,698,071
Inventories................................ 12,533,553 11,628,88910,361,505 10,392,399
Prepaid Expenses and Other Current Assets.. 1,424,757 1,402,3901,441,505 1,661,549
----------- -----------
Total Current Assets..................... 30,969,856 34,443,83433,775,288 34,095,731
PROPERTY, PLANT AND EQUIPMENT 17,063,855 17,196,31017,046,969 17,168,045
Less Accumulated Depreciation.............. (8,350,722) (9,189,923)(8,986,149) (9,342,068)
----------- -----------
8,713,133 8,006,3878,060,820 7,825,977
OTHER ASSETS
Excess of Cost Over Net Assets Acquired.... 1,012,693 985,459976,384 967,310
Other...................................... 1,607,049 532,838508,935 782,640
----------- -----------
2,619,742 1,518,2971,485,319 1,749,950
----------- -----------
$42,302,731 $43,968,518$43,321,427 $43,671,658
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable........................... $ 2,136,8251,614,986 $ 2,528,6462,041,006
Accrued Compensation....................... 1,200,082 880,0031,115,026 1,371,972
Accrued Expenses........................... 730,345 1,194,3951,318,103 899,850
Income Taxes............................... 432,540 1,072,153819,535 937,950
Current Maturities of Long-Term Debt....... 50,000 50,00097,706 98,860
----------- -----------
Total Current Liabilities................ 4,549,792 5,725,1974,965,356 5,349,638
LONG-TERM DEBT, Less Current Maturities..... 175,000 125,000258,135 227,706
EXCESS OF NET ASSETS ACQUIRED OVER COST..... 761,879 598,619544,199 489,779
DEFERRED INCOME TAXES....................... 834,754 834,754794,895 794,895
STOCKHOLDERS' EQUITY
Preferred Stock, $10 Par Value,
Authorized 100,000 Shares, None Issued....
Common Stock, $.05 Par Value, Authorized
13,000,000 Shares, Issued 5,123,3105,136,737
and 5,135,5785,137,530 Shares, Respectively........ 256,166 256,779256,837 256,881
Additional Paid-In Capital................. 5,554,100 5,615,5715,624,239 5,631,070
Retained Earnings.......................... 31,079,623 32,385,27232,772,044 33,202,587
Treasury Stock, at Cost (103,066(209,395 Shares
and 169,395250,895 Shares, Respectively)......... (902,169) (1,468,111)(1,804,986) (2,118,821)
Cumulative Translation Adjustment.......... (38,368) (82,176)(76,649) (131,747)
Net Unrealized Gain (Loss) on Securities
Available for Sale........................ 31,954 (22,387)(12,643) (30,330)
----------- -----------
35,981,306 36,684,94836,758,842 36,809,640
----------- -----------
$42,302,731 $43,968,518$43,321,427 $43,671,658
=========== ===========
3-3-
ASTRO-MED, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
--------------------------
October 28, November 2,
1995-------------------------
May 4, May 3,
1996 ------------ ------------1997
----------- -----------
Net Sales.................................... $10,823,820 $11,110,514Sales...................................... $10,489,822 $11,706,507
Cost of Sales................................. 6,587,639 6,572,197
----------Sales.................................. 6,531,526 7,202,596
----------- -----------
Gross Profit.................................. 4,236,181 4,538,317Profit................................... 3,958,296 4,503,911
Costs and Expenses:
Selling, General and Administrative......... 3,246,100 3,017,702Administrative.......... 3,351,265 3,139,098
Research and Development.................... 591,821 643,092
----------Development..................... 605,921 709,328
----------- 3,837,921 3,660,794
---------------------
3,957,186 3,848,426
----------- -----------
Operating Income.............................. 398,260 877,523Income............................... 1,110 655,485
Other Income (Expense):
Investment Income........................... 84,287 157,489Income............................ 519,039 194,199
Interest Expense............................ (429) (3,349)Expense............................. (3,955) (3,239)
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
========== ===========
4
ASTRO-MED, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
Nine Months Ended
--------------------
October 28, November 2,
1995 1996
------------ ------------
Net Sales.................................... $32,566,709 $32,779,109
Cost of Sales................................ 19,473,919 19,879,552Net................................... 17,917 (24,018)
----------- -----------
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
----------- -----------
476,113 894,031533,001 166,942
----------- -----------
Income before Income Taxes.................... 1,630,307 2,446,910Taxes..................... 534,111 822,427
Provision for Income Taxes.................... 482,000 733,620Taxes..................... (91,000) (244,055)
----------- -----------
Net Income ..................................Income..................................... $ 1,148,307443,111 $ 1,713,290578,372
=========== ===========
Earnings Per Common Share.....................$ .23 $ .34Share...................... $.09 $.12
=========== ===========
Weighted Average Number of Common and Common
Equivalent Shares Outstanding............... 5,099,676 5,025,371Outstanding................ 5,038,008 4,964,505
=========== ===========
Dividends Declared Per Common Share...........$ .09 $ .09Share............ $.03 $.04
=========== ===========
5-4-
ASTRO-MED, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
NineThree Months Ended
--------------------------
October 28, November 2,
1995------------------------
May 4, May 3,
1996 ------------ ------------1997
----------- -----------
Cash Flows from Operating Activities:
Net Income..................................... $1,148,307 $ 1,713,290443,111 $ 578,372
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and Amortization.............. 961,223 703,175204,006 310,573
Gain on Sale of Investment................. (416,090)
Deferred Income Taxes...................... 108,965
Other...................................... (41,773)(72,785)
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 inReceivable...................... 1,670,259 613,665
Inventories.............................. (171,833) (30,894)
Other.................................... 9,034 (580,285)
Accounts Payable and Accrued Expenses............. (559,567) 535,791
(Decrease) increase in AccruedExpenses.... (189,403) 264,713
Income Taxes............................. (91,333) 639,61352,787 118,415
---------- ---------------------
Total Adjustments...................... (28,764) 2,331,6611,158,760 623,402
Net Cash Provided by
Operating Activities....................... 1,119,543 4,044,9511,601,871 1,201,774
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)Sale..................................... (77,216)
Proceeds from Sale of Building................. 515,935
Additions to Property, Plant and Equipment..... (829,192) (649,455)(146,150) (121,076)
---------- ---------------------
Net Cash (used) Provided by
Investing Activities....................... (322,865) 1,071,4951,780,253 (121,076)
Cash Flows from Financing Activities:
Payments of Long-Term Debt..................... (350,000) (50,000)
Short-Term Borrowing from Bank................. 500,000(25,000) (29,275)
Proceeds from Common Shares Issued
Under Employee Benefit Plans................. 84,102 62,08415,933 6,875
Purchases of Treasury Stock.................... (176,254) (565,942)(434,379) (313,835)
Dividends Paid................................. (452,992) (457,359)(150,065) (147,829)
---------- ---------------------
Net Cash (Used) by Financing Activities...... (395,144) (1,011,217)(593,511) (484,064)
Net Increase/(Decrease)Increase in Cash and Cash
Equivalents.................................... 401,534 4,105,2292,788,613 596,634
Cash and Cash Equivalents,
Beginning of Period... 1,107,191Period............................ 2,033,713 6,561,184
---------- --------------------
Cash and Cash Equivalents, End of Period......... $1,508,725 $ 6,138,942$4,822,326 $7,157,818
========== =====================
Supplemental Disclosures of Cash Flow
Information:
Cash Paid During the Period for:
Interest................................... $ 21,9428,643 $ 24,4777,099
Income Taxes............................... $ 260,86938,224 $ 69,85533,456
========== ==========
6-5-
ASTRO-MED, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
November 2, 1996May 3, 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. 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, 1996.1997.
(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 first quarter of fiscal year 1997 were equal to $.09.
Pro-Forma basic and diluted earnings per share had the Company adopted
SFAS No. 128 for the first quarter of fiscal year 1998 were equal to $.12.
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:
January 31, November 2,
1996 1996May 3
1997 1997
----------- -----------
Materials and Supplies.. $ 6,460,7305,558,216 $ 6,289,6585,732,069
Work-In-Process......... 1,381,220 1,234,000779,337 933,770
Finished Goods.......... 4,691,603 4,105,2314,023,952 3,726,560
----------- -----------
$12,533,553 $11,628,889$10,361,505 $10,392,399
=========== ===========
7-6-
ASTRO-MED, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations:
- ----------------------
Net Sales rose 12% in the Company's third fiscalfirst quarter increased 3%over the prior year's first
quarter. The increase was due to an 18% increase over the prior year fiscal third quarter. Growth was most evidentin the
domestic channels. International sales declined 5% from last year as the
strength of the US dollar tempered the local currency growth realized in our
domestic channels
where Sales increased 7% over last year. Internationally, volume was comparable
to last year although our Asian, UK and ItalianEuropean markets. All three product groups reported sales revenues experienced
growth. The Company continues to expand new product offerings during the third
quarterincrements with the
Printing Systems including Sundance, Data Acquisition SystemsBarcode and Astro-DAQ. DemandGrass Products Groups posting single digit growth rates and the Core
Products Group reporting double digit growth rates.
Gross Profit percentages were 39% in the first quarter as compared to 38%
in the prior year first quarter. The improved percentage was healthy for both the Company's traditional core
recorderresult of an
improved mix of sales of higher margin products as well as the Grass Instrument linesales volume
itself which increased the factory overhead absorption rate.
Selling, Research & Development and General & Administrative expenses
declined 3% from last year's first quarter. These operating expenses consumed
33% of products.the first quarter's sales as compared to last year's rate of 38%. Most
of the reduction in spending results from lower professional fees.
The third quarter sales mix generated $4,538,000 in Gross Profits for the
three month period. This resultCompany's Other Income was 7% higherlower this year than last year's third quarter
and producedfirst
quarter. The decrease results from a yield of 40.8% as compared withone time gain reported last year from the
prior year's mark of 39.1%.
The Company has improved its Gross Profit Percent during each quartersale of the current fiscal year toCompany's investment position in a nine month Gross Profit Percent of 39.4%. Although
this level is behind last year's 40.2%,limited partnership.
Financial Condition:
- -------------------
The Company's Assets increased 1% in 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 $196,000quarter. Working Capital dollars
declined slightly 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$28,745,000. Cash and Cash Equivalents rose
$597,000 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$7,158,000 at quarter's end. Accounts Receivable decreased 7% to
$7,698,000, whereas Inventories were virtually flat at $10,392,000. Long Term
Debt representing capital lease obligations decreased by $30,000 in accordance
with the pay down schedule of these agreements.
The growth in the accounts receivable investment
was the primary factor.
8
The Company's cash and cash equivalent balances have risen by $4,105,000Company purchased 41,500 shares of its Common Stock during
the current fiscal year. The result is traceablequarter in accordance with its Common Stock repurchase plan. Shareholders'
Equity increased by 3% during the period to Operations which
have produced $4,033,000 in operating cash flow while$36,809,000
at the Company's Investing
and Financing activities have offset their respective cash flows.
9quarter's end.
-7-
PART II. OTHER INFORMATION
Item 4. Results of Votes of Security Holders
An Annual Meeting of Shareholders of the registrant was held May 20, 1997.
A proposed stock option plan was presented to the 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's 1997 Incentive Stock Option Plan was approved by the following
vote: For--3,541,689; Against--71,559; Abstain--47,151.
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 4,644,638 11,739
Everett V. Pizzuti 4,646,088 10,289
Jacques V. Hopkins 4,645,638 10,739
Hermann Viets 4,646,088 10,289
Neil K. Robertson 4,646,088 10,289
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, 1996May 20, 1997 By /s/ A. W. Ondis
-----------------------------____________________________
A. W. Ondis, Chairman
(Principal Executive Officer)
Date: December 2, 1996May 20, 1997 By /s/ Joseph P. O'Connell
-----------------------------____________________________
Joseph P. O'Connell, Vice
President and Treasurer
(Principal Financial Officer)
10-8-
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.
11May 3, 1997.
-9-