UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

For the quarterly period ended NovemberMay 3, 20072008

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 a large accelerated filer or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ¨.    Accelerated filer  ¨    Non-accelerated filer  ¨    Smaller reporting company  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 6,921,470– 6,999,251 shares (excluding

(excluding treasury shares) as of December 11, 2007June 2, 2008

ASTRO-MED, INC.

INDEX

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Part I. FINANCIAL INFORMATION

ASTRO-MED, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

See Notesnotes to Consolidated Financial Statementscondensed consolidated financial statements.

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ASTRO-MED, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

See Notesnotes to Consolidated Financial Statementscondensed consolidated financial statements.

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ASTRO-MED, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

See Notesnotes to Consolidated Financial Statementscondensed consolidated financial statements.

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ASTRO-MED, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NovemberMay 3, 20072008

(1) Basis of Presentation

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, (“SEC”), and reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the results of the interim periods.periods included herein. 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, 2007.2008.

(2) Principles of Consolidation

The accompanying consolidated condensed consolidated financial statements include the financial statements of Astro-Med, Inc. (the Company) and its wholly-owned subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation.

(2)(3) Net incomeIncome Per Common Share

Net income per common share has been computed and presented pursuant to the provisions of Statement of Financial Accounting Standards (SFAS) No. 128, “Earnings Per Share”. Basic netNet income per share is based on the weighted average number of shares outstanding during the period. Diluted netNet 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-months ended May 3, 2008 and nine-months ended November 3,May 5, 2007, the diluted per share amounts do not reflect 162,400options outstanding of 161,925 and 159,000150,200, respectively. These outstanding options, respectively. Such options were not included inbecause the weighted average common shares outstanding because their exercise prices wereprice of the options was greater than the average market price of the Company’s stock during the related periods . For both the three- months and nine-months ended October 28, 2006 all options outstanding were included in the weighted average common shares outstanding because the exercise prices of all options were less than the average market price of the Company’sunderlying stock during the periods presented.

(3)(4) 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 Company’sseller’s price to the buyer is fixed or determinable and collectibility is reasonably assured in accordance with the 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 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 revenuefee 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 sellingpurchase price of the equipment. The software is deemed incidental to the systemsystems 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 while related shipping and handling costs are included in cost of sales.

Infrequently, the Company also recognizes revenue for non-recurring engineering (NRE) fees for product modification orders upon completion of agreed-upon milestones. Revenue is deferred for any amounts received prior to completion of milestones if delivery is an agreed upon milestone. Somemilestones. Certain of our NRE arrangements include formal customer acceptance provisions. In such cases, we determine whether we have obtained customer acceptance for the specific milestone before recognizing revenue.

Infrequently, the Company receives requests from customers to hold product being purchased from the Company for the customers’ convenience. The Company recognizes revenue for such bill and hold arrangements in accordance with the requirements of SAB No. 104 which requires, among other things, the existence of a valid business purpose for the arrangement, the transfer of ownership of the purchased product, the readiness of the product for shipment, the use of customary payment terms, no continuing performance obligation by the Company and segregation of the product from the Company’s inventories.

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ASTRO-MED, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)(continued)

NovemberMay 3, 20072008

(4)(5) Share-Based Compensation

The Company has one non-qualified stock option plan under which non-qualified options may be granted to officers and key employees and one equity incentive plan under which incentive stock options, non qualified stock options, restricted stock and other equity based awards may be granted to officers and key employees. To date, only options have been granted under these plans. Options granted to employees vest over four years. OptionsAn aggregate of 1,000,000 shares were authorized for awards under the equity incentive plan. Any options granted under the equity incentive plan must be at an exercise price of not less than fair market value at the date of grant. An aggregate of 1,375,000 shares may be grantedwere authorized for grants under the non-qualified stock option plan at option pricesan exercise price of not less than 50% of fair market value at the date of grant. In

At May 2007, the Company’s shareholders approved the 2007 Equity Incentive Plan (the “2007 Plan”) which is designed to provide awards in the form of options, stock appreciation rights, restricted stock awards, performance awards and other stock-based awards to executives, key employees, directors and other eligible individuals. The total number of3, 2008, 910,025 shares of stock that may be issued pursuant to awards granted under the 2007 Plan shall not exceed 1,000,000 shares. The 2007 Plan provides for an automatic annual grant of ten-year options to purchase 5,000 shares of stock to each non-employee director upon the adjournment of each shareholder meeting. Each such option is exercisable at the fair market value as of the grant dateequity incentive plan and vests immediately prior to the next succeeding annual shareholders meeting. During the second quarter of fiscal 2008, 15,000 shares were awarded to non-employee directors pursuant to the 2007 Plan.

At November 3, 2007, options covering 331,600 shares under the non-qualified plan and 985,000 shares under the 2007 Equity Incentivestock option plan were available for grant.grants.

The Company has estimated the fair value of each option grant on the date of grant using the Black-Scholes option-pricing model. The volatility assumption is based on the historical weekly price data of the Company’s common stock over a period equivalent to the weighted average expected life of the Company’s options. Management evaluated whether there were factors during that period which were unusual and would distort the volatility figure if used to estimate future volatility and concluded that there were no such factors. In determining the expected life of the option grants, the Company has observed the actual terms of prior grants with similar characteristics, the actual vesting schedule of the grant, and assessed the expected risk tolerance of different option groups. The risk-free interest rate is based on the actual U.S. Treasury zero coupon rates for bonds matching the expected term of the option as of the option grant date. The risk-free interest rate was 3.95% and 4.54% for all options granted in the first quarter of 2009 and 2008, respectively.

The Company did not grant any options during the three months ended November 3, 2007. The fair value of stock options granted during the nine monthsquarters ended NovemberMay 3, 20072008 and October 28, 2006May 5, 2007 was estimated on the date of grant using the following assumptions:

The fair value per share for options granted were $3.43 and $3.19 during the first quarter of fiscal 2009 compared to $4.81 and $4.63 during the first quarter of fiscal 2008.

Aggregated information regarding the Company’s stock option plans for the nine months ended Novemberas of May 3, 20072008 is summarized below:

The fair value per share for options granted was $4.81 and $4.79 during the first and second quarters of fiscal 2008, respectively, compared to $4.63 during the first quarter of fiscal 2007. No options were granted during the third quarters of fiscal 2008 and 2007.

Share-based compensation expense was recognized as follows:

As of NovemberMay 3, 20072008 there was $902,283$964,023 of unrecognized compensation expense related to unvested options.

The Company has an Employee Stock Purchase Plan allowing eligible employees to purchase shares of common stock at a 10%15% discount from fair value on the date of purchase. A total of 247,500 shares were initially reserved for issuance under the Plan. During the quartersthree months ended NovemberMay 3, 2008 and May 5, 2007, 914 and October 28, 2006, 764 and 718709 shares respectively, were purchased under the Plan. During the nine months ended Novemberplan. As of May 3, 2007 and October 28, 2006, 2,220 and 2,034 shares, respectively, were purchased under the Plan. Approximately 101,0042008, 99,278 shares remain available as of November 3, 2007.available.

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ASTRO-MED, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)(continued)

NovemberMay 3, 20072008

(5)(6) Comprehensive Income

The Company’s total comprehensive income is as follows:

(6)(7) 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 arewere as follows:

(7)(8) Income Taxes

The Company’sIncome tax expense of $573,574 was recorded in the first quarter of the current year which is equal to an effective tax rates forrate of 39%. This compares to an income tax expense of $348,033 in the periods presented herein are as follows:first quarter of the prior year which is equal to an effective tax rate of 40%.

TheEffective February 1, 2007, the Company adopted FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes”Taxes – an interpretation of FASB Statement 109” (“FIN No. 48”), effective February 1, 2007.. FIN No. 48 clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements in accordance with FAS No. 109, “Accounting for Income Taxes.” FIN No. 48 prescribes a two-step process to determinecomprehensive model for recognizing, measuring, presenting and disclosing in the amount offinancial statements tax benefitpositions taken or expected to be recognized. First, thetaken on a tax return, including a decision whether to file or not to file in a particular jurisdiction. For those benefits to be recognized, a tax position must be evaluatedmore likely than not to determine the likelihood that it will be sustained upon examination by taxing authorities. IfThe amount recognized is measured as the tax position is deemed “more-likely-than-not” to be sustainable, the tax position is then assessed to determine thelargest amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50 percent likelihoodlikely of being realized upon ultimate settlement.

As of May 3, 2008, the Company had cumulative unrecognized tax benefits of $1,326,063. As of January 31, 2008 the Company had cumulative unrecognized tax benefits of $1,372,767. The decrease in the cumulative unrecognized tax benefits is a result of implementing FIN No. 48, we recognized a cumulativedecreases in tax positions for prior years resulting from the effect adjustment of $1,147,633 to decrease the February 1, 2007 retained earnings balance. Prior to the adoption of FIN No. 48, our policy was to classify accruals for uncertain positions as a current liability. We reclassified $734,788 of income tax liabilities from current to non-current liabilities because a cash settlement of these liabilities is not anticipated within one year of the balance sheet date.

Weforeign currency translation. The Company continues to recognize accrued interest expense and penalties related to unrecognized tax benefits in the income tax matters in income tax expense. As of Novemberprovision. During the three months ended May 3, 2007 we had accrued $107,8502008, approximately $20,000 of interest and penalties.before tax benefits was accrued.

We have concluded all U.S. federal income tax matters for years through fiscal 2004. During the fourth quarter of fiscal 2007 the Internal Revenue Service (IRS) commenced an examination of the Company’s income tax returns for fiscal 2005 and fiscal 2006. During the third quarter of fiscal 2008 the IRS effectively settled its examination of the Company’s income tax returns for the two years under examination which is expected to result in a refund to the Company of approximately $130,000 and the reduction of certain tax credit carryforwards.

During the third quarter of fiscal 2008, the Company recognized an income tax expense of approximately $346,000 which included 1) expense of $792,000 on the quarter’s pre-tax income 2) benefit of $167,000 related to the completion of the IRS exam 3) benefit of $319,000 related to changes in uncertain R&D and foreign tax credit positions and 4) expense of $40,000 related to differences between the prior year tax provision and the actual return as filed. During the third quarter of fiscal 2007 the Company recognized an income tax expense of approximately $2,251,000 which included 1) expense of $355,000 on the quarter’s pre-tax income, excluding the gain on the real estate sale 2) a $231,000 favorable adjustment related to differences between the prior year tax provision and the actual return as filed primarily relating to additional foreign tax credits, R&D credits and lower state income taxes and 3) expense of $2,127,000 related to the net gain on the sale of the Braintree real estate.

During the nine months ended November 3, 2007 the Company recognized an income tax expense of approximately $1,285,000 which included 1) expense of $1,731,000 on the nine months pre-tax income 2) benefit of $167,000 related to the completion of the IRS exam 3) benefit of $319,000 related to changes in uncertain R&D and foreign tax credit positions and 4) expense of $40,000 related to differences between the prior year tax provision and the actual return as filed. During the nine months ended October 28, 2006 the Company recognized an income tax expense of approximately $3,038,000 which included 1) expense of $1,141,000 on the nine months pre-tax income, excluding the gain on the real estate sale 2) a $231,000 favorable adjustment related to differences between the prior year tax provision and the actual return as filed primarily relating to additional foreign tax credits, R&D credits and lower state income taxes and 3) expense of $2,127,000 related to the net gain on the sale of the Braintree real estate.

As a result of the effective settlement of the IRS exam for fiscal 2005 and 2006, the Company’s liability for uncertain tax positions was reduced from $1,882,000 at February 1, 2007 (date of adoption of FIN 48) to $945,000 at November 3, 2007. As noted above, of the net reduction of $937,000, $319,000 was recognized as a reduction of the provision for income taxes for the third quarter ended November 3, 2007. The $319,000 reduction to the provision for income taxes related to the resolution of certain R&D tax credit positions, partially offset by an increase in the liability for uncertain state tax positions.-8-

ASTRO-MED, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)(continued)

NovemberMay 3, 20072008

(8)(9) Segment Information

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

Summarized below are the sales and segment operating profit for each reporting segment for threethe three-months ended May 3, 2008 and nine months ended November 3, 2007 and October 28, 2006:May 5, 2007.

(10) New Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 157, “Fair Value Measurements” (“SFAS No. 157”). SFAS No. 157 clarifies the principle that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. Under SFAS No. 157, fair value measurements would be separately disclosed by level within the fair value hierarchy. The provisions of SFAS No. 157 are effective for the fiscal years beginning after November 15, 2007. However, in February 2008, the FASB issued FASB Staff Position No. 157-2, “Effective Date of FASB Statement No. 157” (“FSP 157-2”) that amended SFAS No. 157 to delay the effective date for all non-financial assets and non-financial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (that is, at least annually). FSP 157-2 defers the effective date of SFAS No. 157 to fiscal years beginning after November 15, 2008, and interim periods within those fiscal years for items within the scope. We are currently evaluating the effect, if any, that the adoption of items deferred under FSP 157-2 may have on our financial statements. As referenced in Note 12, during the first quarter of the current fiscal year the Company adopted the provisions of SFAS 157 for financial assets and liabilities.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities-Including an amendment of FASB Statement No. 115”, (“SFAS No. 159”). This statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This statement is effective for fiscal years beginning after November 15, 2007. The adoption of SFAS No. 159 had no impact on our financial statements.

In December 2007, the FASB issued SFAS No. 141 (Revised 2007), “Business Combinations” (“SFAS No. 141(R)”). This statement improves the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial reports about a business combination and its effects. It establishes principles and requirements for how the acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree; recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This statement is effective for fiscal years beginning after December 15, 2008. This statement will have no effect on our financial statements until such time as we acquire another entity.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB No. 133”. (“SFAS No. 161”). This statement amends SFAS No. 133 by requiring enhanced disclosures about an entity’s derivative instruments and hedging activities, but does not change SFAS No. 133’s scope or accounting. SFAS No. 161 requires increased qualitative, quantitative and credit-risk disclosures about the entity’s derivative instruments and hedging activities. SFAS 161 is effective for fiscal years, and interim periods within those fiscal years, beginning after November 15, 2008, with earlier adoption permitted. As we do not currently engage in activities accounted for under the provision of SFAS No. 133, the adoption of SFAS No. 161 had no impact on our financial statements.

(11) Securities Available for Sale

Pursuant to our investment policy, securities available for sale may include corporate debt securities, governmental obligations and state and municipal securities with various contractual or anticipated maturity dates, including Auction Rate Securities. Governmental obligations include U.S. Government and Federal Agency securities. Auction rate securities are a type of long-term state and municipal securities issued in the form of variable rate bonds having interest rate resets through a modified Dutch auction, at predetermined short-term intervals, usually every 7, 28 or 35 days.

At May 3, 2008 we had approximately $4,605,016 invested in AAA-rated municipal auction rate securities of which $481,000 is invested in a state sponsored entity engaged in the business of investing in student loans. Beginning in February 2008, a decrease in liquidity in the global credit markets caused auctions to fail for substantially all of the remaining municipal auction rate securities we held. When these auctions failed to clear, higher interest rates for many of those securities went into effect. However, the principal amounts of those securities will not be accessible until a successful auction occurs, a buyer is found outside of the auction process, the issuer calls the security, the issuer repays principal over time from cash flows prior to final maturity, or the security matures according to contractual terms ranging from one to 30 years. We continue to believe that the credit quality of our auction rate securities is high and we expect that we will receive the principal amounts of these securities through one of the means described above.

We continue to classify our auction rate securities, except for the one security for $481,000 noted above, as a current asset as market information we have been able to obtain indicates that these securities will be refunded by the issuers during the next year.

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ASTRO-MED, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)(continued)

(Unaudited)May 3, 2008

(9) Purchase(12) Fair Value

Effective February 1, 2008, we adopted certain provisions of Real EstateSFAS No. 157 which describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. See note 10 for a further description of this standard. The fair value hierarchy is summarized as follows:

On March 13, 2007,

The following table represents the fair value hierarchy for our financial assets (cash, cash equivalents and investments in marketable securities) measured at fair value on a recurring basis as of May 3, 2008

Level 3 assets consist of auction rate securities whose underlying assets are backed by either municipal assets or state-issued student and educational loans. They are variable rate bonds tied to short-term interest rates with maturities on the purchase priceface of the securities in excess of 90 days and have interest rate resets through a modified Dutch auction, at predetermined short-term intervals, usually every 7, 28 or 35 days. Auction rate securities traded at par value and are callable at par value at the option of the issuer. Interest received during a given period is based upon the interest rate determined through the auction process. While we continue to earn interest on our auction rate securities at maximum contractual rates, these investments are not currently trading and therefore do not currently have a readily determinable market value. Therefore, the estimated fair value of auction rate securities no longer approximates par value. Accordingly, we recorded an unrealized loss of approximately $3,181,000 which was paid by$69,984 related to our auction rate securities as of May 3, 2008. We believe this unrealized loss is primarily attributable to the Company in cash at the timelimited liquidity of these investments and have no reason to believe that any of the closing.

(10) Subsequent Event

On December 10, 2007, the Company committed to close its sales and service offices locatedunderlying issuers are presently at risk of default. The following table provides a summary of changes in Italy and the Netherlands as part of a consolidation of these operations with other officesfair value of the Company. Company’s auction rate securities as of May 3, 2008:

During the fourthfirst quarter of fiscal 2009 the Company’s investment advisor redefined variable rate demand notes as fixed income municipal securities as these investments continue to trade in a liquid market.

We have also adopted the provisions of FSP 157-2 delaying the effective date of SFAS No. 157 by one year for nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements.

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ASTRO-MED, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

May 3, 2008

(13) Restructuring

The following table summarizes the activity and balances of the reserve established for the Italy and Netherlands restructuring:

The Company expects to recordcomplete the utilization of the reserve related to this restructuring charges inby the amountend of $500,000 to $600,000 as a result of this action. These restructuring charges include severance costs, lease termination costs, professional fees and reserves on certain assets.fiscal 2009.

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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 fiscal year ended January 31, 2007.2008.

The Company develops and manufactures systems that have the ability to acquire, process, analyze, store and present electronic data in a variety of useable forms. The Company sells its productsproduct under brand names including Astro-Med Test & Measurement (T&M), QuickLabel Systems (QuickLabel) and Grass Technologies formerly known as Grass Telefactor.(GT). Products sold under the Astro-Med brand acquire and record data and print the output onto charts or electronic media. Products sold under the QuickLabel Systems brand create product and packaging labels and tags in one or many colors. Products sold under the Grass Technologies brand electronically capture and record neurological data that is used to diagnose epilepsy or to study sleep disorders. The Company supplies a range of products that include hardware, software and consumables to customers who are in a variety of industries.

The Company competes worldwide in many markets including clinical and research medicine, aerospace, avionics, automotive and general manufacturing. The Company retains a competitive position in its respective markets by virtue of proprietary technology, product reputation, on-time delivery, technical assistance and service to customers. The Company markets its products worldwide by advertising and promotion using major national and international trade journals, scientific meetings and trade shows, direct mailing campaigns and the internet. The products are sold by direct field sales persons as well as independent dealers and representatives. In the United States, the Company has direct field sales people located in major cities from coast to coast specializing in either T&M Recorders and Data Acquisitions systems, QuickLabel Color Label printers and media systems, or Grass Technologies Neurological Instrumentation products. Additionally, the Company has direct field sales and service centers in Canada, England, France Germany, Italy and the Netherlands (The Company’s offices in Italy and the Netherlands are currently in the process of being closed with the related sales and service responsibilities being transferred to Germany).Germany. In the remaining parts of the world, the Company utilizes approximately 8580 independent dealers and representatives selling and marketing its products in 40 countries.

Products sold under the Astro-Med brand include ToughWriter page printers and ToughSwitches for use in passenger and military aircraft. ToughWriter page printers are used in both the cockpit and the cabins of aircraft. ToughSwitches are also used in military vehicles. These and other similar products are ruggedized and comply with rigorous military standards specifications for operation under extreme environmental conditions. The Company is currently furnishing ToughWriters for the Airbus A380, the Boeing C-17, B-787, B-777, B-747, B-767, and the Lockheed C-130. Other products sold under the Astro-Med brand include the Everest, a telemetry workstation used widely in the aerospace industry to monitor and track space vehicles, aircraft and missiles under test. The Everest ranges in price from $18,000 to $35,000 depending on features and options selected. The Astro-Med brand Dash Series constitute a family of portable electronic data acquisition systems which are used as maintenance and troubleshooting instruments for pulp, paper, metal mills, power plants, automotive R & D centers and manufacturing plants. Included in the Dash Series are the Dash 2EZ, Dash 8X, Dash 8HF, Dash 8XPM, Dash 32HF and the Dash 18 and they range in price from $3,500 to $20,000 depending on model and features and options selected.

Products sold under the QuickLabel System brand include a family of digital color label printers including the Vivo!, the first electrophotographic roll-to-roll printer, the QLS-4100 XE, QLS-8100 XE, QLS-2000 and QLS-3000 thermal transfer label printers, the ZEO inkjet printer which was introduced in fiscal 2008, as well as a line of monochrome thermal transfer digital label printers including the Pronto! Series. This Series includes four models used in printing bar code labels. QuickLabel digital color label printers are sold via a direct sales force throughout the US, Canada and Western Europe, and serviced by a factory-trained, direct technical support staff. In the rest of the world, QuickLabel uses a broad network of dealers to sell and support its products. QuickLabel’s unique labeling solutions are aimed at label printing applications in which product packaging requires frequent content changes. QuickLabel digital color label printers fill a critical need in environments that require on-demand flexibility to package multiple product variations, and to add value to the product itself, as in private labeling, to produce OEM packaging, and to customize virtually any product. Industries that require instant label production flexibility include food and beverage, foodservice distribution, grocery retailing, chemical and sanitary supplies, pharmaceutical and medical products, personal care products, advertising specialties, tire manufacturing and apparel. Custom QuickLabel, a custom label creation software package, is an integral part of the QuickLabel printing system, and was designed by the same team of engineers who designed the digital label printers. The latest generation of QuickLabel’s proprietary user-friendly label creation software offers significant new tools for simplifying label creation and for controlling and enhancing label output. The Company’s patented MicroCell^® half-toning algorithms have been improved in this latest version of the software, so that printers driven by Custom QuickLabel now render process-color print quality that closely approximates digital artwork. QuickLabel digital label printers generate revenue through label, tag, thermal transfer ribbon and toner cartridge consumables sales. The Company engineers and manufactures unique printing supplies especially for use in optimizing the performance of the QuickLabel brand of digital label printers.

Products sold under the Grass Technologies (GT) brand include systems, instruments and software products to detect, amplify and display the electrical activity of the human brain commonly called electroencephalography (EEG). EEG data is used by clinicians to diagnose epilepsy and other neurological conditions including sleep apnea. Included in the GT line of products are the Comet, the Aura, the wireless Aura PSG, and the Beehive. These systems are all operated under the Twin software system, a Windows-based multi-module software program developed by the Company over the past six years. Included also is a line of amplifiers, electrodes, transducers and stimulators used by clinicians and researchers. Products sold under the Grass Technologies brand are sold to hospitals, sleep centers, clinics and doctors offices. All GT clinical products which are connected to the human body are approved by the Food and Drug Administration (FDA).

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ASTRO-MED, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Results of Operations

Three-Months Ended NovemberMay 3, 20072008 vs. Three-Months Ended October 28, 2006May 5, 2007

Sales revenue in the first quarter was $18,688,000, up 13.9% from the prior year’s first quarter sales revenue of $16,407,000. Sales through each of the Company’s product groups increased with T&M increasing 6.5%, QuickLabel increasing 9.3% and GT increasing 23.7%. Sales through the Company’s domestic channel of distribution were $13,037,000, up 9.1% from the prior year. Sales through the Company’s international channel of distribution were $5,651,000, up 26.7% from the prior year. Excluding the $473,000 favorable impact of the change in foreign exchange rates, international sales would have increased 16.1%.

Hardware sales in the quarter were $8,956,000 reflecting a 25.1% increase from the prior year’s hardware sales of $7,161,000. Each product group experienced increases in hardware sales with T&M increasing 16.8%, QuickLabel increasing 21.5% and GT increasing 37.1%.

The Company’s consumable sales continue to expand with the first quarter volume reaching $8,359,000, reflecting an increase of 5.7% from the prior year’s consumable sales of $7,907,000. The increase was driven by the Quicklabel Consumables which were up 6.5% from the prior year. T&M and GT consumable sales were essentially flat.

Sales of the Company’s service and other related-product revenue in the quarter was $1,374,000, up 2.6% from the prior year’s service and other related product revenue of $1,339,000.

Gross profit dollars were $8,187,733, generating a gross profit margin of 43.8% in the quarter which was higher than the prior year’s gross profit margin of 41.7%. The gross margin increase was the result of an improvement in product mix associated with the higher hardware sales and improved manufacturing absorption associated with the higher sales volume.

Operating expenses were $6,893,024 for the quarter compared to $6,224,892 for the same quarter in the prior year. Selling & Marketing expenses increased 8.6% from the prior year as a result of additional personnel costs, commission expenses, advertising expenses and trade show expenses. G&A increased 18.1% as a result of personnel costs and professional fees. As a percent of sales SG&A decreased to 30.3% from 31.2% in the prior year. Research and development spending increased 11.6% as a result of increases in personnel costs and outside development expenses. R&D expenses represented 6.6% of sales which was consistent with the prior year. Operating income was $1,294,709 which was up 108% from the prior year. Operating margins were 6.9% which was up from the prior year’s operating margin of 3.8%.

Other income was $175,994 for the quarter, down 29.2% from the prior year. The decrease was driven by lower investment income and lower foreign currency transaction gains.

An income tax expense of $573,574 was recorded in the first quarter of the current year which was equal to an effective tax rate of 39.0%. This compares to an income tax expense of $348,033 in the first quarter of the prior year which was equal to an effective tax rate of 40.0%.

Net income in the first quarter was $897,129 reflecting a 4.8% return on sales and an EPS of $0.12 per diluted share. For the comparable period in the previous year, net income was $521,999, reflecting a 3.2% return on sales and an EPS of $0.07 per diluted share.

-13-

ASTRO-MED, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Results of Operations (Continued)

Three-Months Ended May 3, 2008 vs. Three-Months Ended May 5, 2007

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

Net Sales by product group, percent change, and percent of total Net Sales for the three months ended November 3, 2007 and October 28, 2006 were:

Sales in the quarter were $19,139,000, an increase of 19.3% from prior year’s third quarter sales of $16,043,000. Sales in the Company’s T&M product group were $4,458,000, an increase of 15.3% over the prior year. Sales in the Company’s QLS product group were $9,919,000, an increase of 28.4% over the prior year sales. Sales in the Company’s GT product group were $4,762,000, an increase of 6.9% over the prior year sales. Sales through the Company’s domestic channel were $13,623,000, up 10.6% from the prior year’s third quarter sales of $12,312,000. Sales through the Company’s international channel were $5,516,000, up 47.8% from the prior year’s third quarter sales of $3,731,000. The favorable impact of the change in foreign exchange rates was approximately $351,000 during the quarter. Had this favorable impact not occurred, sales through the Company’s international channel would have been up 38.4% from the prior year.

The Company’s hardware and software sales were $9,626,000 for the quarter, up 21.9% from the prior year’s sales of $7,897,000. The increase from the prior year was driven by the T&M Dash and Ruggedized products, QLS printer systems and GT EEG and LTM diagnostic equipment. These hardware increases were tempered by decreases within the T&M Everest series and the GT sleep systems.

The Company’s consumable sales were $8,178,000 for the quarter, up 16.4% from the prior year’s sales of $7,027,000. The growth in the consumable sales was lead by shipments of QLS consumable and GT Electrodes products.

Sales of the Company’s service related products were $1,335,000 for the quarter, up 19.4% from the prior year’s sales of $1,118,000. The increase was driven by replacement parts.

Gross profit dollars were $8,372,262, generating a gross profit margin of 43.7% for the quarter as compared to 40.1% for the third quarter in the prior year. The improvement in this year’s gross profit margin is the result of improved manufacturing absorption and efficiencies driven by the increase in sales.

Operating expenses in the third quarter were $6,633,870, compared to $5,799,265 in the third quarter of the prior year. Selling and general administrative (SG&A) spending increased 13.1% from last year to $5,449,905. The increase was driven by higher personnel costs, travel and trade show expenses, commissions and professional fees. During the third quarter the Company spent approximately $111,000 in connection with preparations related to Sarbanes-Oxley 404 requirements. As a percent of sales, SG&A was 28.5% in the current quarter compared to 30.0% in the prior year. Research & development spending increased 20.8% to $1,183,965 as a result of higher personnel costs. As a percent of sales, R&D spending was 6.2% in the third quarter of the current year compared to 6.1% in the third quarter of the prior year. Operating income was $1,738,392 in the current quarter which represented a 177.0% increase over the prior year after excluding the gain on the sale of real estate in fiscal 2007. Operating margins were 9.1% in the current quarter compared to 3.9% in the prior year after excluding the prior year gain on the sale of real estate.

During the third quarter of the prior year the Company completed the sale of its property located in Braintree Massachusetts for the price of $6,100,000 which was received in cash at the closing. The net pretax gain on the sale of this property after professional fees, management bonus expense and other miscellaneous fees was $5,252,000.

Other income in the third quarter was $169,705, compared to $348,661 in the third quarter of the prior year. The decrease of $178,956 was driven by lower investment income, the sale of GT research contracts for $75,000 which was recorded in the prior year and lower miscellaneous income compared to the prior year.

Excluding the effects of the one-time tax adjustments discussed in Note 7 of the accompanying notes to unaudited condensed consolidated financial statements, the effective tax rate was 41.5% in the current quarter compared to 36.5% in the same quarter of the prior year. The increase in the effective tax rate was driven by the reduction of certain R&D tax credits and the disallowance of the loss related to the Italian subsidiary which increased in Fiscal 2008.

ASTRO-MED, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Summarized below are the sales and segment operating profit for each reporting segment for three-months ended November 3, 2007 and October 28, 2006:segment.

Test & Measurement – T&M

T&M’s&M sales were $4,458,000$3,960,000 for the quarter compared to $3,865,000 for the same quarter$3,465,000 in the prior year. The increase of $593,000,$495,000, or 15.3% in T&M sales14.3%, was primarily driven by higher Dash sales. Ruggedized products were up slightly while Everest sales were down slightly. Consumable sales were down slightly and Dash product sales. The Everest product line was lower compared toService & Other were up slightly from the prior year. T&M Consumable salesGross profit margins increased slightly overas a result of improved product mix and higher volume. Operating expenses increased 17.6% due to higher foreign selling expense. Segment operating margins were 15.9% for the quarter which was up from the prior year and Service and Other sales were flat. T&Myear’s segment operating margins were 26.1% in the current quarter compared to 21.2% in the prior year. The increase was driven by higher gross margins from improved manufacturing absorption driven by higher sales.of 11.9%.

QuicklabelQuickLabel Systems – QLS

Quicklabel SystemsQuickLabel sales were $9,919,000$9,749,000 for the quarter compared to $7,723,000 for the same quarter$8,916,000 in the prior year. The increase of $2,196,000,$833,000, or 28.4%9.3%, was driven by an increase in printer productsboth hardware and consumable sales. Service and OtherHardware sales also increased during21.4% for the quarter compared towhile consumable sales increased 6.5%. Gross profit margins were essentially flat in the quarter. Operating expenses increased 8.5% as a result of higher personnel costs and higher commission expense associated with the increase in sales. Segment operating margins were 10.4% for the quarter which was consistent with the prior year. Quicklabelyear’s segment operating margins were 10.8% in the quarter compared to 1.1% in the prior year. The increase was driven by better hardware sales mix and higher gross margins from improved manufacturing absorption driven by higher sales.of 10.2%.

Grass Technologies – GT

GT sales were $4,762,000$4,979,000 for the quarter compared to $4,455,000 for the same quarter$4,026,000 in the prior year. The increase of $307,000,$953,000 or 6.9%23.7% was primarily driven by increases within sleep system sales and research product sales. Consumable sales increased hardware sales within the clinical product lines, as well as GT electrode consumable sales. Service and Other sales also increased slightly4.8% during the quarter. GT segment operatingGross profit margins were 10.8%higher for the quarter compared to 13.3% in the prior year. The decrease from the prior year segment operating margins was driven by an increase in R&D spending during the quarter.

ASTRO-MED, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Nine-Months Ended November 3, 2007 vs. Nine-Months Ended October 28, 2006

Net Sales by product group, percent change, and percent of Total Net Sales for the nine months ended November 3, 2007 and October 28, 2006 were: