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 September 30, 1997
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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
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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)
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(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 November 3, 1997 common
shares outstanding were 5,375,363.
ASTREX, INC."
INDEX
Page
No.
PART I:
Financial Statements:
Consolidated Balance Sheets
September 30, 1997 (unaudited) and March 31, 1997 . . . . . . . .1
Consolidated Statements of Income (unaudited)
Six months and three months ended September 30, 1997 and 1996 . 2
Consolidated Statements of Cash Flows (unaudited)
Six months ended September 30, 1997 and 1996 . . . . . . . . . . 3
Notes to Consolidated Financial Statements (unaudited) . . . . . .4
Management's Discussion and Analysis or Plan of Operations . . 5-6
PART II:
Other Information and Signatures . . . . . . . . . . . . . . . . 7-8
PART I - Financial Information
ASTREX, INC. AND SUBSIDIARIES"
CONSOLIDATED BALANCE SHEETS
September 30, 1997 March 31, 1997
(Unaudited)
----------- -----------------
(000) Omitted
Current Assets:
Cash $37 $2
Accounts receivable (net of allowance
for doubtful accounts of $86 at
September 30, 1997"
and $87 at March 31, 1997) 1,636 1,584
Inventory 2,876 3,313
Prepaid expenses and other
current assets 93 67
----- -----
Total current assets 4,642 4,966
Property, plant and equipment at cost (net of
accumulated depreciation of $302 at September 30,
1997 and $249 at March 31, 1997) 805 841
----- -----
TOTAL ASSETS $5,447 $5,807
====== ======
Current Liabilities:
Accounts payable 647 868
Accrued liabilities 350 483
Current portion of capital lease obligation 46 43
Total current liabilities 1,043 1,394
Capital lease obligation 102 125
Loans payable 1,000 1,226
----- -----
2,145 2,745
Shareholders' Equity:
Preferred Stock, Series A - issued, none -- --
Preferred Stock, Series B - issued, none -- --
Common Stock - par value $.01 per share; authorized, 15,000,000 shares;
issued, 5,375,363 at September 30, 1997 and at
March 31, 1997 54 54
Additional paid-in capital 3,621 3,621
Accumulated deficit (355) (591)
----- ------
3,320 3,084
Less: deferred compensation (18) (22)
----- ------
Total shareholders' equity 3,302 3,062
----- ------
Total liabilities and shareholders' equity $5,447 $5,807
====== ======
See accompanying notes to unaudited consolidated financial statements.
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ASTREX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
SIX MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996
--------------------------------------------------------------------------------
(000) Omitted (000) Omitted
Net sales $7,787 $7,494 $3,824 $3,735
Cost of sales 5,987 5,676 2,954 2,821
----- ----- ----- -----
Gross profit 1,800 1,818 870 914
Selling, general and
administrative
expenses 1,487 1,536 721 764
----- ----- ----- -----
Income from
operations 313 282 149 150
Interest expense 65 94 27 45
----- ----- ----- -----
Income before
provision for
income taxes 248 188 122 105
Provision for
income taxes 11 17 4 9
----- ----- ----- -----
Net income $237 $171 $118 $96
===== ===== ===== =====
Per share data for the six months and three months ended September 30, 1997 and
1996 are as follows:
Weighted average
number of
common shares
outstanding 5,375,363 5,314,379 5,375,363 5,375,363
========= ========= ========= =========
Net income
per share $0.04 $0.03 $0.02 $0.02
========= ========= ========= =========
See accompanying notes to unaudited consolidated financial statements.
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ASTREX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE SIX MONTHS ENDED SEPTEMBER 30,
1997 1996
----------------------------------------------
(000) Omitted
Cash Flows From Operating Activities:
Net income $237 $171
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 51 30
Stock compensation 4 2
Changes in assets and liabilities:
(Increase) decrease in accounts receivable, net (52) 126
Increase in prepaid expenses and other
current assets (26) (43)
Decrease in inventory 437 509
Decrease in accounts payable (221) (442)
Decrease in accrued liabilities (131) (7)
---- ----
NET CASH PROVIDED BY OPERATING ACTIVITIES 299 346
---- ----
Cash flows used in investing activities:
Capital expenditures (17) (19)
---- ----
Net cash used in investing activities (17) (19)
---- ----
Cash flows from financing activities:
Proceeds from issuance of common stock -- 47
Principal payments under capital lease obligations (21) --
Repayments of loans payable, net (226) (374)
---- ----
NET CASH USED IN FINANCING ACTIVITIES (247) (327)
---- ----
Net increase in cash for the six months
ended September 30 35 0
Cash - beginning of period 2 2
---- ----
Cash - end of period $37 $2
==== ====
See accompanying notes to unaudited consolidated financial statements.
-3-
ASTREX, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED FINANCIAL STATEMENTS
- ------------------------------
In the opinion of the Company, the accompanying unaudited consolidated financial
statements contain all adjustments (consisting only of normal recurring
accruals) necessary to present fairly its financial position as of September 30,
1997. The results of operations and cash flows for the six month period ended
September 30, 1997 are not necessarily indicative of the results to be expected
for the full year. In the opinion of management, the information in this interim
report for the six months ended September 30, 1997 and 1996 presents fairly the
Company's financial position consistent with the Company's accounting practices
and principles used in interim reports. Accordingly, certain items included in
these statements are based upon best estimates, particularly cost of goods sold.
For the six month and three month periods ended September 30, 1997 and 1996
these costs have principally been determined by utilizing perpetual inventory
records. The calculation of the actual cost of goods sold amount is predicated
upon a physical inventory taken only at the end of each fiscal year.
-4-
ASTREX, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATIONS
RESULTS OF OPERATIONS
NET INCOME FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997 WAS APPROXIMATELY
$237,000, AN INCREASE OF 39% OVER THE SAME PERIOD LAST FISCAL YEAR. THIS
INCREASE IS PRINCIPALLY THE RESULT OF HIGHER SALES AND REDUCTIONS IN selling,
general and administrative expenses AND INTEREST EXPENSE.
Sales increased by approximately $293,000, or 3.9%, for the six months and
approximately $89,000, or 2.4%, for the three months ended September 30, 1997,
from the comparable six and three month periods in 1996, respectively.
Gross profit percentages decreased to 23.1% from 24.3% for the six months,
and to 22.8% from 24.5% for the three months ended September 30, 1997 and 1996,
respectively. These decreases are a result of continued price pressures in a
somewhat soft overall market.
Selling, general and administrative expenses decreased approximately
$49,000, or 3.2%, for the six months and approximately $43,000, or 5.6%, for the
three months ended September 30, 1997 from the comparable previous six and three
month periods in 1996, in spite of higher sales and commission expense. These
decreases are a result of the Company's ongoing efforts to operate more
efficiently.
Interest expense decreased approximately $29,000, or 30.9% for six months,
and approximately $18,000, or 40.0% for the three months ended September 30,
1997, from the previous comparable six and three month periods in 1996. This
decrease is due to both a lower loan balance and a substantially reduced
interest rate, as a result of the Company entering into a new lending agreement
on July 9, 1997.
-5-
ASTREX, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company generated $299,000 in cash from its operating activities which was
used to primarily paydown the outstanding loan payable balance. At September 30,
1997, the Company had working capital of $3,599,000 and its stockholders' equity
was $3,302,000. The Company believes that its present working capital, cash
generated from operations and amounts available under the new loan agreement
will be sufficient to meet its cash needs during the next year (the new loan
agreement is described in the Company's June 30, 1997 Form 10-QSB). The
Company's principal credit facility is a line of credit ("Line") measured by its
inventory and receivables and secured by substantially all of the Company's
assets including a negative pledge of (i.e. that the Company will not otherwise
mortgage to any other person) its Plainview office/warehouse facility. On
September 30, 1997 the Company owed $1,000,000 on the Line.
-6-
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(A) Exhibits
---------
Previously Filed and Incorporated
Exhibit Description by reference or Filed Herewith
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3 (a) Certificate of Incorporation Filed herewith
of Astrex, Inc., as amended
(a Delaware corporation)
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
10(a) Credit and Security Agreement Filed herewith
(Revolver) between Astrex,
Inc. and Fleet National Bank
dated July 9, 1997
10(b) Appendix A to Credit and Security Filed herewith
Agreement (Revolver)
between Astrex, Inc. and Fleet
National Bank dated July 9, 1997
10(c) Pledge Agreement between Astrex, Filed herewith
Inc. and Fleet National
Bank dated July 9, 1997
10(d) Revolving Credit Promissory Note Filed herewith
between Astrex, Inc. and
Fleet National Bank dated July 9, 1997
10(e) Guaranty Agreement between Filed herewith
AVest, Inc. and Fleet National
Bank dated July 9, 1997
10(f) Guaranty Agreement between Filed herewith
T.F. Cushing, Inc. and Fleet
National Bank dated July 9, 1997
27 Financial Data Schedule Filed herewith
(B) Reports on Form 8-K:
None
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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 by the
undersigned, thereunto duly authorized.
ASTREX, INC.
Date: November 11, 1997 By: /s/ Michael McGuire
------------------ -------------------
Michael McGuire
Director, President and
Chief Executive Officer
By: /s/ Irene S. Lyons
------------------
Irene S. Lyons
Chief Financial Officer,
Vice President,
Treasurer and Secretary
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