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 March 31, 1996
or
[ ] 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)
Registrant's telephone number, including area code: (516) 328-1600
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 securites 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, as of the latest practicable date:
March 31, 1996 - 4,434,048
ASTROSYSTEMS, INC. AND SUBSIDIARIES
INDEX
Page No.
Part I - FINANCIAL INFORMATION
Item 1. Statement of Net Assets in Liquidation 4
March 31, 1996
Statement of Changes in Net Assets in Liquidation 5
Two Months Ended March 31, 1996
Condensed Consolidated Balance Sheet 6
June 30, 1995
Condensed Consolidated Statements of Operations 7
One Month Ended February 2, 1996 and
Three Months Ended March 31, 1995
Seven Months Ended February 2, 1996 and
Nine Months Ended March 31, 1995
Consolidated Statements of Cash Flows 8
Seven Months Ended February 2, 1996 and
Nine Months Ended March 31, 1995
Item 2. Management's Discussion and Analysis or
Plan of Operation 9
Part II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 6. Exhibits and Reports on Form 8-K 11
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 for the periods 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.
On February 2, 1996, the Stockholders of the Company approved a
Plan of Complete Liquidation and Dissolution (the "Plan"). Therefore,
the financial statements for the period of February 2, 1996 to March
31, 1996 are presented in accordance with the liquidation basis of
accounting.
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.
ASTROSYSTEMS, INC. AND SUBSIDIARIES
STATEMENT OF NET ASSETS IN LIQUIDATION
(amounts in thousands, except per share amounts)
March 31,
1996
________
Assets
______
Cash and cash equivalents (1) $20,956
U.S. government securities 18,800
Other assets (2) 2,447
_______
$42,203
Liabilities
___________
Accrued expenses/contingency reserve (3) 11,735
_______
Net assets in liquidation $30,468
=======
Number of common shares (4) 6,114
Net assets in liquidation per share (4) $ 6.12
(1) Includes one million dollars held in an escrow account pursuant
to an asset purchase agreement.
(2) Assumes no material value for the Company's holdings in
AstroPower Inc.
(3) The Company believes that the Accrued expenses/contingency
reserve will be adequate for payment of all expenses and other
known liabilities and possible contingent obligations, as well as
an amount estimated to be required to carry out the Plan.
Existing liabilities at March 31, 1996:
Accounts payable, accrued expenses and miscellaneous $ 1,300
Deferred income taxes 7,596
Minimum payments on nonrecourse obligation 163
Shut down costs and estimated operating costs
(including compensation) to administer the Plan
through dissolution 4,230
Estimated interest income (2,064)
Estimated tax benefit of losses through dissolution (790)
Reserve for other contingencies 1,300
_______
$11,735
=======
In the event that the Accrued expenses/contingency reserve
account is not adequate for payment of the Company's expenses and
liabilities, each stockholder could be held liable for pro rata
payments to creditors in an amount not to exceed the
stockholder's prior distributions from the Company.
(4) Assumes the exercise of all dilutive stock options; 1,680,063
options at an average exercise price of $3.15 per share. Net
assets in liquidation per share includes the effect of these
options as shown below:
Number of common shares 6,114
=======
Net assets in liquidation $30,468
Proceeds from the exercise of dilutive stock options 5,286
Estimated tax benefit of compensatory stock options 1,666
_______
Adjusted net assets in liquidation $37,420
=======
Net assets in liquidation per share $6.12
=======
ASTROSYSTEMS, INC. AND SUBSIDIARIES
STATEMENT OF CHANGES IN NET ASSETS IN LIQUIDATION
(dollars in thousands)
Two Month
Period Ended
March 31, 1996
______________
(1)
Net assets in liquidation at February 2, 1996 $30,250
Changes in estimated liquidation values of
assets and liabilities (2) 218
_______
Net assets in liquidation at March 31, 1996 $30,468
Note (1) Represents changes since adoption of the Plan of Complete
Liquidation and Dissolution on February 2, 1996.
(2) Includes adjustment in estimated liquidation value of certain
assets and liabilities:
Cash and securities $3,690
Accounts receivable (860)
Inventories (3,813)
Other assets 128
Shut down costs 1,267
Other reserve items (194)
_____
Changes in estimated liquidation values $ 218
ASTROSYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
As at
June 30,
1995
________
(Unaudited)
(In Thousands)
ASSETS
______
Current Assets:
Cash and cash equivalents $13,119
Marketable securities 8,680
Accounts receivable (less estimated doubtful
accounts of $58,000) 4,099
Accounts receivable - claims 360
Inventories 3,528
Prepaid expenses and other current assets 437
_______
Total current assets $30,223
U.S. Treasury Notes 12,980
Long-term investments 275
Factory, laboratory and other equipment at cost
(less accumulated depreciation of $2,599,000) 198
Excess of cost over the fair value of net
assets acquired, net of accumulated amortization 230
Other assets 351
_______
TOTAL $44,257
LIABILITIES
___________
Current liabilities:
Accounts payable $ 354
Accrued payroll and employee benefits 304
Other accrued liabilities 1,034
Income taxes payable 3
_______
Total current liabilities $ 1,695
Deferred income taxes 8,240
_______
Total liabilities $ 9,935
SHAREHOLDERS' EQUITY
____________________
Capital Stock
Common-authorized 10,000,000 shares, $.10 par
value; issued and outstanding 4,581,727 shares $ 458
Additional paid-in capital 6,848
Retained Earnings 27,016
_______
Total shareholders' equity $34,322
_______
TOTAL $44,257
=======
ASTROSYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In Thousands)
(Except Earnings per Common Share)
One Month Seven Month Three Nine
Period Period Months Months
Ended Ended Ended Ended
February 2, February 2, March 31, March 31,
1996 1996 1995 1995
---------- ---------- -------- ---------
(1) (1)
Sales $ 768 $ 4,385 $3,329 $8,554
Cost of sales (Note 2) 932 4,048 2,296 6,184
Selling, general and
administrative expenses 388 2,208 1,112 3,204
Issuance of compensatory ----- ------
stock options (Note 3) 3,125 3,125
------ -------
4,445 9,381 3,408 9,388
------ ------- ------ ------
(Loss) from
operations (Note 3) (3,677) (4,996) (79) (834)
Investment and other
income (net) 168 1,213 461 1,153
Earnings (loss) before
taxes on income (3,509) (3,783) 382 319
Income taxes (benefit) (1,279) (1,389) 153 128
Net earnings (loss) $(2,230) $(2,394) $ 229 $ 191
Primary earnings (loss)
per common share $ (.49) $ (.52) $ .04 $ .04
Weighted average
outstanding shares 4,578 4,585 5,297 5,285
Note (1) Represents operating results prior to adoption of the Plan
of Complete Liquidation and Dissolution on February 2, 1996.
(2) The Company sold all of its operating assets as of February
7, 1996.
(3) Represents a non-cash charge reflecting the difference
between newly issued option exercise prices and the market
price on the day of issuance. On January 11, 1996,
1,036,113 stock options at an average exercise price of
$3.06 per share were canceled by mutual consent. In
addition, 101,184 stock options at an average price
of $2.96 per share expired on December 14, 1995. On January
11, 1996, 1,172,763 options were granted at an average
exercise price of $2.96 per share. A total of 480,732 of
the canceled options and all of the expired options were
incentive stock options for purposes of the Internal Revenue
Code of 1986, as amended, which when exercised would not
have yielded a tax deduction for corporate tax purposes.
The newly granted options are not incentive stock options
and therefore represent a potential tax benefit to the
Company when exercised.
ASTROSYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Seven Month Nine Month
Period Period
Ended Ended
February 2, March 31,
1996 1995
__________ __________
(1) (1)
(In Thousands)
Cash flows from operating activities:
Net cash provided by operating activities 1,649 53
Cash flows from investing activities:
Marketable securities 999 (10,358)
(Acquisition) of equipment (42) (17)
_______ _______
Net cash provided by (used in)
investing activities 957 (10,375)
_______ _______
Cash flows from financing activities:
Purchase and retirement of shares (391)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 2,215 (10,322)
Cash and cash equivalents, beginning of period 13,119 22,916
_______ _______
CASH AND CASH EQUIVALENTS, END OF PERIOD $15,334 $12,594
======= =======
Note (1) Represents activities prior to adoption of the Plan of
Complete Liquidation and Dissolution on February 2, 1996.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Liquidity, Capital Resources and Impact of Inflation
____________________________________________________
The Board of Directors adopted, and the stockholders approved on
Feburary 2, 1996, a Plan of Complete Liquidation and Dissolution (the
"Plan") of the Company. See "Plan of Complete Liquidation and
Dissolution" below.
The Company announced on March 26, 1996 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 (in addition to the 500,000 shares previously
authorized on October 23, 1992). To date, 572,227 shares have been
repurchased.
Statement of Net Assets in Liquidation
______________________________________
Pursuant to the Plan, the Company consummated the sales of the
assets of its three operating units (Military Division, Behlman
Electronics subsidiary and Industrial Automation Division) as of
February 7, 1996. The exact amount of the proceeds to the Company of
such sales is dependent upon a final fixed asset and inventory
valuation. In connection with the sale of the Military and Behlman
operations, $1,000,000 of the purchase price is being held in escrow
to provide for indemnification claims that the buyer may assert
against the Company or Behlman under the sale agreement.
The Company has set aside, as Accrued expenses/contingency
reserve, an amount believed to be adequate for payment of all expenses
and other known liabilities and possible contingent obligations,
including potential tax obligations. Any portion of the contingency
reserve which the Company determines is no longer required will
be made available for distribution to its shareholders. In the event
that the Accrued expenses/contingency reserve account is not adequate
for payment of the Company's expenses and liabilities, each
stockholder could be held liable for pro rata payments to creditors in
an amount not to exceed the stockholder's prior distributions from the
Company.
Statement of Changes in Net Assets in Liquidation
_________________________________________________
The total of Net Assets in liquidation on March 31, 1996 did not
change materially from the total on February 2, 1996.
Accrued expenses/contingency reserve was reduced primarily
due to the payment of various shutdown costs.
Results of Operations
_____________________
The Company, under the Plan, has sold all of its operating assets
as of February 7, 1996.
Plan of Complete Liquidation and Dissolution
____________________________________________
On February 2, 1996, the stockholders of the Company approved a
Plan of Complete Liquidation and Dissolution for the Company.
Pursuant to the Plan, the Company has sold its three operating units
and intends to sell such of its remaining assets as are not to be
distributed in kind to its stockholders. The Company intends to
provide for payment of all expenses, liabilities and obligations
of the Company and liquidate via distributions to stockholders.
The Board is currently unable to predict the precise amount of any
distributions pursuant to the Plan. The actual amount and timing of,
and record date for, all such 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.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
On February 2, 1996 at an Annual Meeting of Stockholders, the
stockholders of the Company voted in favor of a Plan of Complete
Liquidation and Dissolution, elected a Board of five directors
consisting of Seymour Barth, Gilbert H. Steinberg, Elliot J. Bergman,
Elliot D. Spiro and Walter Steinberg, ratified the appointment of
Richard A. Eisner & Company, LLP as the Company's independent auditors
for the fiscal year ending June 30, 1996 and approved an Asset
Purchase Agreement among the Company, its subsidiary, Behlman
Electronics, Inc., Orbit International Corp. and a subsidary of Orbit.
The number of affirmative votes, negative votes and abstentions with
regard to the foregoing were as follows:
(i) Company's Plan of Complete Liquidation
______________________________________
For: 3,398,383 Against: 10,284 Abstain: 10,880
(ii) Asset Purchase Agreement
________________________
For: 3,396,757 Against: 10,634 Abstain: 12,156
(iii) Election of Directors
_____________________
Voted for Withheld Proxy
Nominee Election to vote for Election
_______ _________ ____________________
Seymour Barth 4,153,339 57,650
Gilbert H. Steinberg 4,153,239 57,750
Elliot J. Bergman 4,153,239 57,750
Elliot D. Spiro 4,153,369 57,620
Walter Steinberg 4,153,269 57,720
(iv) Ratification of Auditors
________________________
For: 4,172,035 Against: 12,729 Abstain: 12,225
Item 6. Exhibits and Reports on Form 8-K.
_________________________________
(a) Exhibits.
2. Plan of Complete Liquidation and Dissolution -
incorporated by reference to Exhibit A to Proxy Statement
of the Company dated January 12, 1996 with respect to
Annual Meeting of Stockholders held February 2, 1996
(File No. 0-3344).
3. (a) Certificate of Incorporation - incorporated by
reference to Exhibit 3 (a) to the Company's Annual Report
on Form 10-KSB for the fiscal year ended June 30, 1993
(File No. 0-3344).
(b) By-Laws - incorporated by reference to Exhibit
3(b) to the Company's Annual Report on Form 10-KSB for the
fiscal year ended June 30, 1993 (File No. 0-3344).
10. Asset Purchase Agreement dated as of January 11,
1996 by and among Astrosystems, Inc., Behlman Electronics,
Inc., Orbit International Corp. and Cabot Court, Inc. -
incorporated by reference to Exhibit B to Proxy Statement of
the Company dated January 12, 1996 with respect to Annual
Meeting of Stockholders held February 2, 1996 (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.
May 17, 1996 BY: /S/
______________________ ____________________________
Date Gilbert H. Steinberg,
Vice President
May 17, 1996 /S/
______________________ ____________________________
Date Gilbert H. Steinberg,
Treasurer and
Chief Financial Officer