U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended December 31, 2000
------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________ to ________________
Commission file number 1-4530
ASTREX, INC.
(Exact name of small business issuer as specified in its charter)
DELAWARE 13-1930803
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
205 EXPRESS STREET, PLAINVIEW, NEW YORK 11803
(Address of principal executive offices)
(516) 433-1700
(Issuer's telephone number, including area code)
- -------------------------------------------------------------------------------
(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 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
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date. As of February 2, 2001 common
shares outstanding were 5,606,277.
ASTREX, INC.
INDEX
Page
No.
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS:
Consolidated Balance Sheets
December 31, 2000 (unaudited) and March 31, 2000 ............................ 1
Consolidated Statements of Income (unaudited)
Nine months and three months ended December 31, 2000 and 1999 .............. 2
Consolidated Statements of Cash Flows (unaudited)
Nine months ended December 31, 2000 and 1999 ................................ 3
Notes to Consolidated Financial Statements (unaudited) .................... 4-5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS ............... 6-7
PART II: OTHER INFORMATION
OTHER INFORMATION AND SIGNATURES .................................................. 8-10
PART I - FINANCIAL INFORMATION
ASTREX, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, March 31,
2000 2000
(Unaudited)
----------- ----------
(000) Omitted
Current Assets:
Cash and cash equivalents $ 7 $ 57
Accounts receivable (net of allowance
for doubtful accounts of $73 at December 31, 2000
and $79 at March 31, 2000) 2,377 2,299
Inventory 5,136 4,437
Prepaid expenses and other
current assets 96 46
------ ------
Total current assets 7,616 6,839
Property, plant and equipment at cost (net of
accumulated depreciation of $607 at December 31,
2000 and $533 at March 31, 2000) 686 703
Other long-term assets 156 164
------ ------
TOTAL ASSETS $8,458 $7,706
====== ======
Current Liabilities:
Accounts payable 1,346 1,172
Accrued liabilities 852 598
Current portion of capital lease obligations 4 32
------ ------
Total current liabilities 2,202 1,802
------ ------
Long-term debt 2,115 2,250
Shareholders' Equity:
Preferred Stock, Series A - issued, none - -
Convertible Preferred Stock, Series B - $.01 par value;
authorized, 10,000,000; 1,897,381 shares issued
and outstanding at December 31, 2000 (liquidation
preference of $.25 a share) 19 -
Common Stock - par value $.01 par value; authorized,
15,000,000 shares; issued, 6,605,363 at December
31, 2000 and 6,540,363 at March 31, 2000 66 65
Additional paid-in capital 3,928 3,902
Retained earnings(accumulated deficit) 434 (47)
Deferred Compensation (16) (1)
Treasury stock, at cost (999,086 shares at December 31, 2000
and 913,586 shares at March 31, 2000) (290) (265)
------ ------
Total shareholders' equity 4,141 3,654
------ ------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $8,458 $7,706
====== ======
See accompanying notes to unaudited
consolidated financial statements.
1
ASTREX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
NINE MONTHS ENDED THREE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
2000 1999 2000 1999
------------------------ ------------------------
(000) Omitted (000) Omitted
Net sales $13,798 $11,947 $ 4,672 $ 4,089
Cost of sales 10,693 9,237 3,607 3,129
------- ------- ------- -------
Gross profit 3,105 2,710 1,065 960
Selling, general and
administrative expenses 2,482 2,292 839 777
------- ------- ------- -------
Income from operations 623 418 226 183
Interest expense 121 139 37 45
------- ------- ------- -------
Income before provision
for income taxes 502 279 189 138
Provision for income taxes - 25 - 6
------- ------- ------- -------
NET INCOME $ 502 $ 254 $ 189 $ 132
======= ======= ======= =======
Per share data for the nine and three months ended December 31, 2000 and 1999
are as follows:
Weighted average common shares and common equivalent shares outstanding:
Basic 5,624,081 5,526,777 5,618,717 5,526,777
========== ========== ========== =============
Diluted 6,825,754 5,629,277 7,581,098 5,629,277
========== ========== ========== =============
Net income per share:
Basic $0.09 $0.05 $0.03 $0.02
========== ========== ========== =============
Diluted $0.07 $0.05 $0.02 $0.02
========== ========== ========== =============
See accompanying notes to unaudited consolidated
financial statements.
2
ASTREX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE NINE MONTHS ENDED DECEMBER 31,
2000 1999
----------------------
(000) Omitted
Cash Flows From Operating Activities:
Net income $ 502 $ 254
ADJUSTMENTS TO RECONCILE NET INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Depreciation and amortization 74 71
Amortization of deferred stock compensation 10 0
CHANGES IN ASSETS AND LIABILITIES:
Increase in accounts receivable, net (78) (55)
Increase in prepaid expenses and other
current assets (50) (7)
(Increase)decrease in inventory (699) 288
(Increase)decrease in accounts payable 174 (99)
(Increase)decrease in accrued liabilities 254 (154)
------ ------
NET CASH PROVIDED BY OPERATING ACTIVITIES 187 298
------ ------
Cash flows used in investing activities:
Capital expenditures (57) (74)
------ ------
NET CASH USED IN INVESTING ACTIVITIES (57) (74)
------ ------
Cash flows from financing activities:
Deferred financing costs 8 -
Principal payments under capital lease obligations (28) (34)
Purchase of treasury stock (25)
Payments/proceeds from loans payable, net (135) (190)
------ ------
NET CASH USED IN FINANCING ACTIVITIES (180) (224)
------ ------
Net change in cash (50) -
Cash and cash equivalents- beginning of period 57 2
------ ------
Cash and cash equivalents- end of period $ 7 $ 2
====== ======
See accompanying notes to unaudited consolidated
financial statements.
3
ASTREX, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - UNAUDITED FINANCIAL STATEMENTS
The consolidated balance sheet as of December 31, 2000 and the consolidated
statements of income and the statement of cash flows for the nine months and
three months ended December 31, 2000 and 1999 and the statement of cash flows
for the nine months ended December 31, 2000 and 1999, have been prepared by the
Company without audit. In the opinion of management, all adjustments (which
include only normally recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flows at December 31, 2000
(and for all periods presented) have been made.
Certain information and note disclosures, normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America, have been condensed or omitted. It is suggested
that these consolidated financial statements be read in conjunction with the
financial statements and notes thereto included in the Annual Report on Form
10-KSB for the year ended March 31, 2000 filed by the Company. The results of
operations for the periods ended December 31, 2000 and 1999 are not necessarily
indicative of the operating results for the respective full years.
NOTE B - EARNINGS PER COMMON SHARE
Statement of Financial Accounting Standards No. 128 ("SFAS No. 128"), "Earnings
Per Share," replaced the calculation of primary and fully diluted earnings
(loss) per share with basic and diluted earnings per share. Pursuant to SFAS No.
128, earnings (loss) per common share is computed by dividing net income (loss)
available to common stockholders by the weighted average number of shares
outstanding during the period. Diluted earnings per share reflect the potential
dilution that could occur if securities or other contracts to issue common stock
were exercised or converted into common stock or resulted in the issuance of
common stock. For purposes of determining basic earnings per share, common stock
issued to certain employees but subject to forfeiture upon eventualities are not
counted until fully vested. Prior to vesting such shares are counted in
determining the diluted earnings per share.
4
The following table sets forth the reconciliation of the weighted average number
of common shares:
Nine months ended
December 31,
2000 1999
(Unaudited) (Unaudited)
--------- ---------
Basic 5,624,081 5,526,777
Effect of Series B Convertible Preferred Stock 1,159,127
Effect of dilutive securities (non-vested restricted stock) 42,546 102,500
--------- ---------
Diluted 6,825,754 5,629,277
========= =========
Three months ended
December 31,
2000 1999
(Unaudited) (Unaudited)
--------- ---------
Basic 5,618,717 5,526,777
Effect of Series B Convertible Preferred Stock 1,897,381
Effect of dilutive securities (non-vested restricted stock) 65,000 102,500
--------- ---------
Diluted 7,581,098 5,629,277
========= =========
NOTE C - SHAREHOLDERS' EQUITY
In December 2000, the Company purchased 85,500 shares of its common stock
through a series of transactions on the open market. These shares were
recorded as treasury stock at their aggregate cost of $25,221.
5
ASTREX, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATIONS
RESULTS OF OPERATIONS
Net income for the nine months ended December 31, 2000 was approximately
$502,000, an increase of $248,000 or 98% from the same nine month period last
fiscal year. This increase is principally the result of higher sales volume.
Sales increased by approximately $1,851,000 or 15%, for the nine months and
approximately $583,000 or 14% for three months ended December 31, 2000, from the
comparable nine and three month period in 1999, respectively. This increase is
largely due to strong component demand in both export and domestic markets.
The Company's gross margin of approximately 23% remained unchanged from the
comparable nine and three month period in 1999.
Selling, general and administrative expenses increased by approximately
$190,000, or 8%, for the nine months and increased by approximately $62,000, or
8% for the three months ended December 31, 2000 from the comparable previous
nine and three month period in 1999.
Interest expense decreased by approximately $18,000 for the nine months and
$8,000 for the three months ended December 31, 2000, from the previous
comparable nine months and three month period in 1999 due to a reduction in
borrowings.
The provision for income taxes for the nine months and three months ended
December 31, 1999 consists principally of state and local taxes. The Company did
not record a provision for income tax expense for the nine months and three
months ended December 31, 2000 based on the recognition of certain tax benefits
available to the Company. The Company has and plans to continue utilizing the
available net operating loss carryforwards.
6
ASTREX, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company generated approximately $187,000 in cash from its operating
activities for the nine months ended December 31, 2000. At December 31, 2000,
the Company had working capital of $5,414,000 and its stockholders' equity was
$4,141,000. The Company believes that its present working capital, cash
generated from operations and amounts available under the loan agreement will
be sufficient to meet its cash needs during the next year. The Company's
principal credit facility is a line of credit and a term loan from the same
bank lender ("Line"). The Line is secured by substantially all of the
Company's assets including a mortgage on the 205 Express Street property. The
term of the Line runs to April 30, 2002. Borrowings under the line of credit
portion of the Line, are based on the Company's inventory and receivables. On
December 31, 2000, the Company owed $2,115,000 on the Line. The Company's
relationship with its secured lender is satisfactory and the Company believes
that the lending arrangement will be adequate for the foreseeable future.
CAUTIONARY LANGUAGE REGUARDING FORWARD LOOKING STATEMENTS
When used herein, the words "believe," "anticipate," "think," "intend," "will
be," "expect" and similar expressions identify forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
statements are not guarantees of future performance and involve certain risks
and uncertainties discussed herein, which could cause actual results to differ
materially from those in the forward-looking statements. Readers are cautioned
not to place undue reliance on the forward-looking statements, which speak only
as of the date hereof. Readers are also urged carefully to review and consider
the various disclosures made by the Company which attempt to advise interested
parties of the factors which affect the Company's business, including, without
limitation, the disclosures made in the Company's Annual Report on Form 10-KSB
for the fiscal year ended March 31, 2000 under the caption "Management's
Discussion and Analysis of Financial Condition and Results of Operation."
7
PART II - OTHER INFORMATION
Item 2. Changes in Securities.
none
Item 4. Submission of Matters to a Vote of Security Holders.
none
Item 5. Other Information
In December 2000, the Company purchased 85,500 shares of its stock through
a series of transactions on the open market. These shares were recorded as
treasury stock at their aggregate cost of $25,221.
8
Item 6. Exhibits and Reports on Form 8-K.
none
(A) EXHIBITS
Exhibit Description Previously Filed and Incorporated
by reference or Filed Herewith
3 (a) Certificate of Incorporation of Astrex, Inc., as amended Filed as Exhibit 3(a) to the Form 10-QSB
(a Delaware corporation) of the Company for the quarter ended
September 30, 1997
3 (b) By-Laws of Astrex, Inc., as amended Filed as Exhibit 3(b) to the Form 10-QSB
of the Company for the quarter ended
September 30, 1996
4 Astrex, Inc. Certificate of Designations, Preferences and Filed as Exhibit 4 to the Form 10-QSB of
Rights of Series B Convertible Preferred Stock the Company for the quarter ended June
30, 2000
(B) Reports on Form 8-K:
None
9
SIGNATURES
In accordance with the requirements of Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf, thereunto
duly authorized.
ASTREX, INC.
Date: February 10, 2000 By: /s/ Michael McGuire
------------------ ------------------------
Michael McGuire
Director, President and
Chief Executive Officer
CHIEF FINANCIAL OFFICER
OF ASTREX, INC.
Date: February 10, 2000 By: /s/ Lori A. Sarnataro
------------------ -------------------------
Lori A. Sarnataro
Chief Financial Officer,
Executive Vice President,
Treasurer, and Secretary
10