U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended to
Commission File Number: 0-3344
ASTROSYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-5691210
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6 Nevada Drive, Lake Success, New York 11042
(Address of principal executive offices) (Zip Code)
(516) 328-1600
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past
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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Check whether the issuer has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Exchange
Act after the distribution of securities under a plan confirmed
by a court. Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's
classes of common stock equity, as of the latest practicable
date: September 30, 1995 - 4,588,728
PART I - FINANCIAL INFORMATION
ASTROSYSTEMS, INC. AND SUBSIDIARIES
The financial information herein is unaudited. However, in the
opinion of management, such information reflects all adjustments
(consisting only of normal recurring accruals) necessary to a
fair presentation of the results of operations for the period
being reported. Additionally, it should be noted that the
accompanying condensed financial statements do not purport to be
complete disclosures in conformity with generally accepted
accounting principles.
The results of operations for the three months ended September
30, 1995 are not necessarily indicative of the results of
operations for the full fiscal year ending June 30, 1996.
The balance sheet as at June 30, 1995 was condensed from the
audited balance sheet in the 1995 Annual Report on Form 10-KSB.
All other financial statements presented are unaudited. These
condensed financial statements should be read in conjunction with
the Registrant's financial statements for the year ended June 30,
1995.
The Board of Directors has adopted a Plan of Complete Liquidation
and Dissolution for the Company (see Management Discussion and
Analysis). This plan requires stockholder approval before
becoming effective.
ASTROSYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
As at
September 30, June 30,
1995 1995
_______________________
(Unaudited)
(In Thousands)
ASSETS
Current Assets:
Cash and cash equivalents $12,329 $13,119
Marketable securities (at lower
of cost or market) 11,678 8,680
Accounts receivable (less estimated
doubtful accounts of $58,000 in
September 1995 and June 1995) 2,108 4,099
Accounts receivable - claims 360 360
Inventories (Note 1) 3,874 3,528
Prepaid expenses and other current assets 564 437
_______ _______
Total current assets $30,913 $30,223
U.S. Treasury Notes 11,924 12,980
Long-term investments 275 275
Factory, laboratory and other equipment at
cost (less accumulated depreciation of
$2,625,000 in September 1995 and
$2,599,000 in June 1995) 177 198
Excess of cost over the fair value of net
assets acquired, net of accumulated
amortization 219 230
Other assets 347 351
_______ _______
TOTAL $43,855 $44,257
======= =======
LIABILITIES
Current liabilities:
Accounts payable $ 242 $ 354
Accrued payroll and employee benefits 166 304
Other accrued liabilities 931 1,034
Income taxes payable 2 3
_______ _______
Total current liabilities $ 1,341 $ 1,695
Deferred income taxes 8,193 8,240
_______ _______
Total liabilities $ 9,534 $ 9,935
======= =======
SHAREHOLDERS' EQUITY
Capital Stock
Common-authorized 10,000,000 shares,
$.10 par value; issued and outstanding
4,588,728 shares in September 1995 and
4,581,727 shares in June 1995 $ 459 $ 458
Additional paid-in capital 6,916 6,848
Retained earnings 26,946 27,016
_______ _______
Total shareholders' equity $34,321 $34,322
_______ _______
TOTAL $43,855 $44,257
======= =======
Inventories:
Estimated inventories are comprised of
the following:
Raw material $ 1,997 $ 1,762
Work in process 1,877 1,766
_______ _______
TOTAL $ 3,874 $ 3,528
======= =======
ASTROSYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
September 30, September 30,
1995 1994
_____________________________
(In Thousands)
(Except Earnings per Common Share)
Sales $1,760 $2,205
Cost of sales (Note 1) 1,408 1,730
Selling, general and
administrative expenses 997 1,110
______ ______
$2,405 $2,840
______ ______
(Loss) from operations (645) (635)
Investment and other income (net) 528 264
______ ______
(Loss) before taxes (benefit) $ (117) $ (371)
Income taxes (benefit) (47) (148)
______ ______
Net (loss) $ (70) $ (223)
====== ======
Primary (loss) per common share $(.02) $(.05)
Weighted average outstanding shares 4,582 4,550
(Note 1) For interim financial statements the Registrant
estimates its costs of sales.
ASTROSYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
September 30, September 30,
1995 1994
__________________________
(In Thousands)
Cash flows from operating activities:
Net (loss) $ (70) $ (223)
Adjustments to reconcile net (loss)
to net cash (used in) provided by
operating activities:
Depreciation and amortization 37 58
Shares issued to retirement plan 69 35
Deferred taxes (47) (148)
Options extended 175
Changes in operating assets
and liabilities:
Decrease in accounts receivable 1,991 56
(Increase) in inventories (346) (6)
(Increase) decrease in prepaid
expenses other current assets,
and other assets (123) 126
(Decrease) in accounts payable (112) (137)
(Decrease) in accrued payroll
and employee benefits (138) (134)
(Decrease) in other accrued
liabilities (103) (147)
(Decrease) in taxes payable (1) (23)
_______ _______
Net cash (used in) provided by
operating activities 1,157 (368)
_______ _______
Cash flows from investing activities:
Marketable securities (1,942) (678)
(Acquisition) of equipment ( 5) (5)
_______ _______
Net cash (used in) investing activities(1,947) (683)
_______ _______
NET (DECREASE) IN CASH AND
CASH EQUIVALENTS (790) (1,051)
Cash and cash equivalents, beginning
of period 13,119 22,916
_______ _______
CASH AND CASH EQUIVALENTS,
END OF PERIOD $12,329 $21,865
======= =======
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Liquidity, Capital Resources and Impact of Inflation
____________________________________________________
The Company's working capital did not materially change since
June 30, 1995.
The Company announced on October 23, 1992 a Board of Directors
authorization for the repurchase of up to 500,000 shares of
Common Stock to be made from time to time through open market and
privately negotiated transactions. Since that time 408,727
shares have been repurchased. No repurchases were made during
the three month period ending September 30, 1995.
Inflation has not materially impacted the operations of the
Company.
The Board of Directors adopted, subject to stockholder
approval, a Plan of Complete Liquidation and Dissolution of the
Company. See "Plan of Complete Liquidation and Dissolution"
below.
Results of Operations
_____________________
Comparison of three months ended September 30, 1995 vs three
months ended September 30, 1994
_____________________________________________________________
Cost of Sales as a percentage of revenue for the three months
ended September 30, 1995 was 80% of revenue versus 78% for the
prior equivalent period. The trend in Cost of Sales as a
percentage of revenue is increasing as sales orders and backlog
continue to decrease. Included in Cost of Sales are fixed
expenses such as rent; in addition, the Company's Government
contracts and subcontracts require certain fixed expenses such as
quality assurance personnel, which cannot be reduced in
proportion to revenue. The Company, under its liquidation plan
(see "Plan of Complete Liquidation and Dissolution" below), will
attempt to sell or distribute all of its operating assets and
subsequently cease operations.
Selling, General and Administrative expenses for the period
ended September 30, 1995 decreased from the prior period
primarily due to a charge included in the period ended
September 30, 1994 for a non-cash item of $175,000 for the
extension of employee stock options.
Investment income for the three months ended September 30,
1995 increased primarily due to a higher percentage of funds
being invested in higher yielding U.S. Treasury obligations.
Plan of Complete Liquidation and Dissolution
____________________________________________
The Board of Directors of the Company has adopted a Plan of
Complete Liquidation and Dissolution for the Company (the "Plan")
to be submitted to stockholders for approval. Pursuant to the
Plan, the Company intends to sell such of its assets as are not
to be distributed in kind to its stockholders, to provide for
payment of all expenses, liabilities and obligations of the
Company and to liquidate via distributions to stockholders. The
Board concluded, after consideration of the potential liquidation
value of the Company in relation to its current and historical
market trading values, that liquidation would maximize the value
of the Company to its stockholders.
Although the Board has not established a firm timetable for
distributions to stockholders if the Plan is approved, the Board
will, subject to exigencies inherent in winding up the Company's
business, make such distributions as promptly as practicable.
The Company anticipates making the first cash distribution in
1996. The Board is, however, currently unable to predict the
precise amount of any distributions of cash pursuant to the
Plan. The actual amount and timing of, and record date for, all
distributions will be determined by the Board of Directors, in
its sole discretion, and will depend in part upon the Board's
determination as to whether particular assets are to be
distributed in kind or otherwise disposed of, and the amounts
deemed necessary by the Board to pay or provide for all the
Company's liabilities and obligations.
The Company has entered into a letter of intent with regard to
the sale of its Industrial Automation Division. Revenues for
Industrial were 13.8% of the Company's consolidated revenues for
the fiscal year ended June 30, 1995. The consummation of the
transaction contemplated by the letter of intent is subject to a
number of conditions, including the execution of a definitive
purchase agreement. No assurances can be given that the
transaction will be completed. The consummation of the sale of
the Industrial Automation Division is not contingent upon
stockholder approval of the Plan.
PART II - OTHER INFORMATION
Item 5. Other Information
The discussion of the Company's Plan of Complete
Liquidation and Dissolution, as set forth under "Management's
Discussion and Analysis or Plan of Operation" of Part II
hereof, is incorporated herein by reference.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
2(a) - Plan of Complete Liquidation and Dissolution
- - incorporated by reference to Exhibit A to preliminary Proxy
Statement filed with the Securities and Exchange Commission on
November 1, 1995 (File No. 0-3344).
(b) Reports on Form 8-K
None
No other reportable items
SIGNATURES
In accordance with the requirements of the Exchange Act,
the Registrant caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
ASTROSYSTEMS, INC.
November 13, 1995 BY: /S/
_______________________ ____________________________
Date Gilbert H. Steinberg,
Vice President
November 13, 1995 /S/
_______________________ ___________________________
Date Gilbert H. Steinberg,
Treasurer and
Chief Financial Officer