UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

For the quarterly period ended July 31, 200430, 2005

OR

For the transition period from            to            

Commission file number 0-13200

Astro-Med, Inc.

(Exact name of registrant as specified in its charter)

(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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act)    Yes  ¨.    No  x.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)    Yes  ¨.    No  x.

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 - 5,309,691– 5,278,403 shares

(excluding treasury shares) as of August 20, 200422, 2005

ASTRO-MED, INC.

INDEX

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Part I. FINANCIAL INFORMATION

ASTRO-MED, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

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ASTRO-MED, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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ASTRO-MED, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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ASTRO-MED, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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ASTRO-MED, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

July 31, 200430, 2005

(Unaudited)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) The accompanying condensed 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 consisting of normal recurring 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, 2004.2005. Certain reclassifications have been made to conform to the current period reporting format.

(b)10% Stock Dividend: On April 19, 2004, the Company declared a 10% stock dividend that was distributed to shareholders on May 26, 2004. An amount equal to the fair value of the additional shares was transferred from Retained Earnings to Additional Paid inPaid-in Capital and Common Stock as of the declaration date. AllThe net income per common share and weighted average share amounts for allthe three and six month periods have been restated to reflectended July 31, 2004 were computed assuming the impactstock dividend had occurred at the beginning of the 10% stock dividend.periods.

(c) Net income per common share has been computed and presented pursuant to the provisions of Statement of Financial Accounting Standards No. 128, Earnings Per Share. Net income per share is based on the weighted average number of shares outstanding during the period. 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.

For the three-monthsthree-month and six-month periods ended July 30, 2005 and July 31, 2004, and August 2, 2003, the diluted per share amounts do not reflect options outstanding of 252,450236,500 and 889,130,252,450, respectively. These outstanding options were not included in the weighted average common shares outstanding because the exercise priceprices of the option was greater than the average market price.

For the six-months ended July 31, 2004 and August 2, 2003, respectively, the diluted per share amounts do not reflect options outstanding of 252,450 and 1,121,725, respectively. These outstanding options were not included in the weighted average common shares outstanding because the exercise price of the option was greater than the average market price or their effect was anti-dilutive.of the Company’s stock during the periods presented.

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ASTRO-MED, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

July 31, 200430, 2005

(Unaudited)

As permitted by Statement on Financial Standards (SFAS) No. 123, “Accounting for(d) Stock-Based Compensation,” theCompensation: The Company accounts for its stock-based compensation under the intrinsic value method in accordance withfollows Accounting Principles Board Opinion (APB) Opinion No. 25, “Accounting for Stock Issued to Employees”. Had compensation cost and related interpretations in accounting for the Company’sits stock-based compensation plans been determined based onand has elected to continue to use the fair value atintrinsic value-based method to account for stock option grants. The Company has adopted the grant dates consistent with the method set forth underdisclosure-only provisions of SFAS No. 123, the Company’s net income148, “Accounting for Stock Based Compensation – Transition and net income per share would have changed to the pro forma amounts indicated below:

Disclosure”, an amendment of SFAS No. 123. Accordingly, no compensation expense has been recognized for stock-based compensation plans. The fair value of each option granted was estimated on the grant date using the Black-Scholes option-pricing model.

(c)(e) Revenue Recognition:The majority of the Company’s product sales are recorded at the time of shipment, when legal title has transferred and risk of loss passes to the customer, when persuasive evidence of an arrangement exists, the seller’s price to the buyer is fixed or determinable and collectibility is reasonably assured. Provisions are made atassured in accordance with the time the related revenue is recognized for the cost of any installation or training obligations.requirements in Staff Accounting Bulletin (“SAB”) 104, “Revenue Recognition in Financial Statements.” When a sale arrangement involves training or installation, the deliverables in the arrangement are evaluated to determine whether they represent separate units of accounting.accounting in accordance with SAB 104 and EITF 00-21, “Revenue Arrangements With Multiple Deliverables”. This evaluation occurs at inception of the arrangement and as each item in the arrangement is delivered. The total fee from the arrangement is allocated to each unit of accounting based on its relative fair value. Fair value for each element is established generally based on the sales price charged when the same or similar element is sold separately. Revenue is recognized when revenue recognition criteria for each unit of accounting are met. When other significant obligations remain after products are delivered, revenue is recognized only after such obligations are fulfilled. All of the Company’s equipment contains embedded operating systems and data management software which is included in the purchase price of the equipment. The software is deemed incidental to the system as a whole as it is not sold separately or marketed separately and its production costs are minor as compared to those of the hardware system. Returns and customer credits are infrequent and are recorded as a reduction to sales. Rights of return are not included in sales arrangements. Revenue associated with products that contain specific customer acceptance criteria is not recognized before the customer acceptance criteria are satisfied. Discounts from list prices are recorded as a reduction to sales. Amounts billed to customers for shipping and handling fees are included in sales.

(f) New Accounting Pronouncements:In December 2004, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 123 (Revised 2004), “Share-Based Payment” (“SFAS No. 123-R”) which, upon becoming effective, will replace SFAS No. 123, “Accounting for Stock-Based Compensation” (“SFAS No. 123”) and will supersede APB No. 25. SFAS No. 123-R requires companies to measure compensation costs for share-based payments to employees, including stock options, at fair value and expense such compensation over the service period beginning with the first annual period after June 15, 2005. The Company is evaluating the requirements of SFAS No. 123-R and has not yet determined the method of adoption of SFAS No. 123-R, nor the effect that SFAS No. 123-R will have on its financial position and results of operations.

In May 2005, the FASB issued SFAS No. 154, “Accounting for Changes and Error Corrections – a Replacement of APB Opinion No. 20 and SFAS No. 3”, which changes the requirements for accounting and reporting of a change in accounting principle. The Statement applies to all voluntary changes in accounting principles and to changes required by an accounting pronouncement in the event that the pronouncement does not include specific transition provisions. This statement requires retroactive application to prior period financial statements of change in accounting principle, unless it is impracticable to determine either the period specific effects or the cumulative effect of the change. The Company is required to adopt this statement during the first quarter of fiscal 2007. We do not expect the adoption of this statement to have a material impact on our financial condition or results of operations.

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ASTRO-MED, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

July 30, 2005

(Unaudited)

NOTE 2 – COMPREHENSIVE INCOME

The Company’s total comprehensive income is as follows:

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ASTRO-MED, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

July 31, 2004

NOTE 3 – INVENTORIES

Inventories, net of reserves 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:

NOTE 4 – INCOME TAXES

An income tax expense of $339,000 and $200,000 were recorded forDuring the three-months ending July 31,quarter ended May 1, 2004, and August 2, 2003, respectively. The effective tax rate for the three-months ending July 31, 2004 and August 2, 2003 were 36% and 20%, respectively. For the six-months ending July 31, 2004, a $228,000 income tax benefit was incurred as a result of the recording of 1) an income tax expense on the current year’s income of $711,000 which is equal to an effective rate of 36% and 2)Company recognized a $939,000 one-time non-cash tax benefit recorded in the first quarter of the current fiscal year related to the release of the valuation allowance on the net deferred tax asset that was established in fiscal year 2003. In fiscal year 2003, as required by SFAS 109 “Accounting for Income Taxes”, the Company established a full valuation allowance on its net deferred tax asset as a result of the uncertainty as to whether these deferred tax assets would “more likely than not” be realized in the future. Based on the facts and circumstances at that time, it was determined that a full valuation allowance was required and it was stated that until an appropriate level of profitability could be sustained no tax benefits would be realized. As of the first quarter of fiscal year 2005, Management believesbelieved that an appropriate level of profitability has been established and maintained and it is more likely than not the deferred tax assets will be realized in the future. Management made this determination based on a review of the facts and circumstances as of May 1, 2004. This review consisted of an analysis of the Company’s performance, the market environment in which the Company currently operates, the length of carryforward periods, the existing sales backlog and the future sales projections.

For the six months ending August 2, 2003, an income tax expense of $232,000 was recorded which equaled a 15% effective tax rate. The effective tax rate for the six-months ending August 2, 2003 reflected the favorable impact of the net operating loss carryforward and the utilization of certain other deferred tax assets which were fully reserved. The effective income tax rates used in the interim condensed financial statements are estimates of the full year’s rates.

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ASTRO-MED, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

July 31, 200430, 2005

(Unaudited)

NOTE 5 – SEGMENT INFORMATION

Summarized below are the sales and segment operating profit for each reporting segment for three-months ended July 30, 2005 and July 31, 2004 and August 2, 2003:2004:

Summarized below are the sales and segment operating profit (loss) for each reporting segment for the six-months ended July 30, 2005 and July 31, 2004 and August 2, 2003:2004:

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ASTRO-MED, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

NOTE 6 – PRODUCT WARRANTY LIABILITY

Changes in the Company’s product warranty liability during the period endingsix months ended July 30, 2005 and July 31, 2004, and August 2, 2003, respectively, are as follows:

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ASTRO-MED, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Business Overview

This section should be read in conjunction with the Condensed Consolidated Financial Statements of the Company included elsewhere herein and the Company’s Form 10-K for the year ended January 31, 2004 Form 10-K.2005.

Astro-Med, Inc. is a multi-national enterprise, which designs, develops, manufactures, distributes and services a broad range of products that acquire, store, analyze and present data in multiple formats. The Company organizes its structure around a core set of competencies, including research and development, manufacturing, service, marketing and distribution. It markets and sells its products and services through the following three business segments:segments including:

The Company’s Test and& Measurement Product Group (T&M) representsproducts are a comprehensive line of data recording instruments for the aerospace, automotive, pulp and paper, metal mill, transportation and manufacturing industries. These recording solutions provide customers with a complete record of their data, whether they are troubleshooting a process, performing preventative maintenance or gathering mission critical data. The T&M product group includes a suite of telemetry recorderruggedized products soldwhich consist of printers and Ethernet switches designed to withstand the aerospacerigors of airborne and defense industries,other military applications.

The Company’s QuickLabel Systems (QuickLabel) product group provides a complete system for producing “the labels that you want when you need them.” QuickLabel’s flagship products, the digital color label printers, and its line of entry-level barcode/single-color digital label printers, are used by manufacturers and producers to print short runs of custom labels in-house. QuickLabel’s printing supplies and label creation software are integral parts of the printing system that enhance output quality and user experience. QuickLabel’s digital label printers also generate sales through a broad consumable line of products including label, tag and thermal transfer ribbons and monochrome transfer ribbons. QuickLabel engineers and manufactures certain unique printing supplies especially designed for use in optimizing the performance of the QuickLabel brand of digital printers, as well as portable data acquisition recorders, which offer diagnosticin the use of all other major brands of desktop and test functions to a wide range of manufacturers, including paper, energy, automotive and steel fabrication.

QuickLabel Systems Product Group (QLS) offers hardware, software and media products that create digital images, store the images and present the images in color or non-color formats on a broad range of media substrates.tabletop printers.

Grass-Telefactor Product Group (G-T) encompasses diagnostic and monitoring products that serve the clinical neurophysiology markets as well asproduct group offers a range of biomedical instrumentation products and supplies focused on the life sciences markets.for clinical and biomedical research applications. The clinical product line includes in-lab, in-hospital, and ambulatory integrated systems for clinical EEG and PSG, epilepsy diagnosis and surgery, critical care and intraoperative neuromonitoring. These products offer a variety of features including networking, database and report generation capabilities in addition to powerful data acquisition, monitoring and analysis tools.

The Company markets and sells its products and services globally through a diverse distribution structure of sales personnel, manufacturing representatives and dealers that deliver a full complement of branded products and services to customers in severalour diverse global markets.

In the first six-months of fiscal year 2005, the Company’s sales grew 4% from last year. The growth was dominated by shipments in QLS and T&M product groups where sales increments of 17% and 10% respectively were realized. Our Grass-Telefactor sales volume declined 16% during this time frame. QuickLabel’s customers continued to respond positively to color printer systems as an effective solution to product identification, product control (barcode) and product promotion (color) needs. The T&M product group’s strong sales performance is a result of the increased demand for the Portable Dash 18 and 8x Data Recorders. The Grass-Telefactor product group sales were impacted by the cyclical Long-term Epilepsy Monitoring (LTM) sales, and seasonal delays of clinical and research product purchases in the 2^nd quarter of the current fiscal year.

Results of Operations

Three-Months EndingEnded July 30, 2005 vs. Three-Months Ended July 31, 2004 vs. Three-Months Ending August 2, 2003

Sales by product group, percent change, and percent of total sales for the three months ended July 30, 2005 and July 31, 2004 were:

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ASTRO-MED, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Results of Operations (continued):

Three-Months EndingEnded July 30, 2005 vs. Three-Months Ended July 31, 2004 vs. Three-Months Ending August 2, 2003

Sales in the quarter were $13,990,000, approximately flat with the$14,648,202, an increase of 4.7% from prior year’s second quarter sales of $14,023,000. Hardware$13,990,031. The Company’s sales in its Quicklabel Systems and software system sales decreased 7% overG-T product groups increased 4.5% and 8.4%, respectively. Sales in the prior year’s second quarter. Supplies and media sales increased 10% overT&M product group were flat with the prior year. Domestic salesSales through our domestic channel were $9,804,000,$10,157,033, up less than 1%3.6% from $9,729,000 for the second quarter of the prior fiscal year. Sales through the Company’s international channels were $4,186,000, down 3% over$4,491,169, up 7.3% from the previous the year’s second quarter sales of $4,294,000.$4,185,830. The favorable impact of the change in foreign exchange rates was approximately $50,000 which had a nominal effect on the Company’s international sales.

Hardware and software sales were $6,871,624 for the quarter, essentially flat with the prior year’s sales of $6,851,727. Flat hardware sales in the quarter was due to a blend of healthy growth in the Ruggedized products, up almost 100% from the prior year, and G-T’s sleep and EEG systems up 65.1% and 34.7%, respectively. These increases were tempered by lower sales from G-T’s long term monitoring systems and T&M’s Dash series. The prior year’s hardware sales also included a $300,000 non-recurring engineering contract from an OEM customer.

The Company’s consumable sales continue to grow with the second quarter sales volume reaching $6,587,667, a 12.3% increase over the prior year’s sales of $5,865,026. The products driving the increase include the Quicklabel media products, up 14.0% and the G-T product groups suite of supplies and electrodes, up 14.7% from the prior year.

Sales of the Company’s service related products were $1,188,912, down 6.6% from the prior year’s sales of $1,273,278. The decrease was driven by lower parts sales.

Gross profit dollars were $5,920,000 which generated$6,330,65, generating a margin yieldpercentage of 42.3%43.2% for the quarter as compared to a margin yieldpercentage of 42.3% for the quarter in last year’s second quarter of 41.5%.the prior year. The higher gross profit percentage in the second quarter can be attributed to the betterhigher margins in each of the QuickLabelthree product group resulting fromgroups as sales shifted to a more favorable product mix within both hardware and the completion and delivery of a non-recurring engineering development contract.consumables.

Operating expenses in the second quarter were $5,003,000.$5,425,714, compared to $5,002,684 in the second quarter of the prior year. Selling and general administrative (SGA) spending increased 3%9.8% from last year to $4,037,000.$4,434,295. The increase was driven by higher personnel costs, travel and trade show expenses and the impact of foreign exchange. Research & Development spending increased 7%2.5% from last year to $966,000. The increase in research & development spending can be attributed$991,419.

Other income increased $68,024 to an increase in personnel.$92,258 as a result of a higher investment yield on cash and marketable securities, as well as rental income and the settlement of a lawsuit.

An income tax expense of $339,000$375,262 and $200,000$338,905 was recorded for the three-months endingended July 30, 2005 and July 31, 2004, and August 2, 2003, respectively. The effective tax rate for the three-months endingended July 30, 2005 and July 31, 2004 was 37% and August 2, 2003 was 36% and 20%, respectively. The effective tax rate for the three-months ending August 2, 2003 reflected the favorable impact of a net operating loss carryforward and the utilization of certain other deferred tax assets which were fully reserved.

The Company reports three reporting segments consistent with its sales product groups: Test & Measurement (T&M), QuickLabel Systems (QLS) and Grass-Telefactor (G-T). The Company evaluates segment performance based on the segment profit (loss) before corporate and financial administration expenses.

Summarized below are the sales and segment operating profit for each reporting segment for three-months ended July 30, 2005 and July 31, 2004 and August 2, 2003:2004:

Test & Measurement

T&M’s sales were $2,628,000 for the quarter compared to $2,639,000 down 15% fromfor the $3,120,000same quarter in the secondprior year. Sales for the quarter of the previous year. This decrease in T&M’swere driven by lower Dash Series and chart paper sales. These lower sales can be attributed to delays in Everest Telemetry Workstation orders temperedwere offset by an increase in Dash 18ruggedized products. Service and Dash 8X Recorderother sales were comparable with the prior year. As an outgrowth of a favorable product mix, T&M achieved higher gross margins and consistent operating profits when compared to the prior year.

Quicklabel Systems

Quicklabel System sales were $7,599,000 for the quarter compared to $7,272,000 for the same quarter in the prior year. The increase of $327,000, or 4.5% was driven by a 14.2% increase in media sales, tempered by lower hardware sales. T&M’s segmentExcluding the impact of the non-recurring engineering fees, hardware sales would have been up from the prior year. Service and Other sales were down slightly from the prior year. Gross profit margins were comparable year over year. Quicklabel increased investment in promotional activities and field selling expense lowered the product group’s operating profit margin declined to 9%13.0% from 16.2% in the quarter from 11% in the previous year as result of the leverage lost on the previous year’s higher sales.prior year.

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ASTRO-MED, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Results of Operations (continued):

Three-Months Ending July 31, 2004 vs. Three-Months Ending August 2, 2003Grass-Telefactor

QLS’s sales increased to $7,271,000, a 19% increase over the $6,104,000 of sales reported in the second quarter of the previous year. Printer and media sales increased 34% and 12%, respectively. Excluding the impact of a non-recurring engineering development contract, printer sales increased 18%. This increase in QLS’s printer sales can be attributed to the sales generated from the 4100Xe and the 8100Xe printers. QLS’s second quarter segment operating profit margin improved to 15% up from 12% in the previous year. The increase in margin is attributed to the higher sales volume, the non-recurring engineering development contract and lower manufacturing costs.

G-T sales were $4,421,000 for the quarter compared to $4,079,000 for the same quarter in the quarter were $4,080,000, down 15% from $4,799,000 reported in the second quarter of the previousprior year. The lowerincrease of $342,000, or 8.4% was driven by increased hardware sales are traceable to lower Long-term Epilepsy Monitoring (LTM) sales,in sleep systems and EEG monitoring systems, as well as clinical and research instrumentation product sales. The G-T segment operating profit margin decreased to 8%increases in the second quarter from 13% in the previous year. The decrease can be attributed to the lower sales.Company’s electrode consumables.

Six-Months EndingEnded July 30, 2005 vs. Six-Months Ended July 31, 2004 vs. Six-Months Ending August 2, 2003