-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JM/L9JZVaZlkva8jy2dlJ3DTeKa0PuLCDLYxg0jVXgU6JeOx4VvIVbXJ4SLG3aQm 1lTIDKJQJJcXcef6wBM9gw== 0000927016-98-003374.txt : 19980907 0000927016-98-003374.hdr.sgml : 19980907 ACCESSION NUMBER: 0000927016-98-003374 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980801 FILED AS OF DATE: 19980904 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASTRO MED INC /NEW/ CENTRAL INDEX KEY: 0000008146 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER PERIPHERAL EQUIPMENT, NEC [3577] IRS NUMBER: 050318215 STATE OF INCORPORATION: RI FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-13200 FILM NUMBER: 98704678 BUSINESS ADDRESS: STREET 1: 600 E GREENWICH AVE CITY: WEST WARWICK STATE: RI ZIP: 02893 BUSINESS PHONE: 4018284000 MAIL ADDRESS: STREET 1: 600 E GREENWICH AVENUE CITY: WEST WARWICK STATE: RI ZIP: 02893 FORMER COMPANY: FORMER CONFORMED NAME: ATLAN TOL INDUSTRIES INC DATE OF NAME CHANGE: 19850220 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended August 1, 1998 ----------------------------- 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 0-13200 ------------------ Astro-Med, Inc. ------------------------------------------ (Exact name of registrant as specified in its charter) Rhode Island 05-0318215 ----------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 600 East Greenwich Avenue, West Warwick, Rhode Island 02893 -------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (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 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 - 4,517,736 shares (excluding treasury shares) as of August 31,1998 -1- ASTRO-MED, INC. INDEX
Page No. -------- Part I. Financial Information: Consolidated Balance Sheets - January 31, 1998 and August 1, 1998 ...................... 3 Consolidated Statements of Income - Three Months Ended August 2, 1997 and August 1, 1998...... 4 Consolidated Statements of Income - Six Months Ended August 2, 1997 and August 1, 1998........ 5 Consolidated Statements of Cash Flows - Six Months Ended August 2, 1997 and August 1, 1998........ 6 Notes to Consolidated Financial Statements - August 1, 1998............................................ 7,8 Management's Discussion and Analysis of Financial Condition and Results of Operations....................... 9,10,11 Part II. Other Information................................. 12
-2- Part I. FINANCIAL INFORMATION ASTRO-MED, INC. UNAUDITED CONSOLIDATED BALANCE SHEETS
January 31, August 1, 1998 1998 ------------- ------------- (Unaudited) ASSETS CURRENT ASSETS Cash and Cash Equivalents...................... $ 5,659,552 $ 5,569,437 Securities Available for Sale.................. 7,472,693 7,661,023 Accounts Receivable, Net....................... 7,828,064 7,504,698 Inventories.................................... 10,341,856 10,214,733 Prepaid Expenses and Other Current Assets...... 1,561,313 1,391,290 ----------- ----------- Total Current Assets......................... 32,863,478 32,341,181 PROPERTY, PLANT AND EQUIPMENT 18,056,693 18,401,519 Less Accumulated Depreciation.................. (10,155,952) (10,857,431) ----------- 7,900,741 7,544,088 OTHER ASSETS Excess of Cost Over Net Assets Acquired........ 940,084 921,934 Amounts Due from Officers...................... 453,264 453,264 Other.......................................... 656,147 655,542 ----------- ----------- 2,049,495 2,030,740 ----------- ----------- $42,813,714 $41,916,009 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts Payable............................... $ 2,267,722 $ 2,489,681 Accrued Compensation........................... 1,221,662 1,420,909 Accrued Expenses............................... 1,470,849 1,205,479 Income Taxes................................... 614,631 669,571 Current Maturities of Long-Term Debt........... 177,774 177,774 ----------- ----------- Total Current Liabilities.................... 5,752,638 5,963,414 LONG-TERM DEBT, Less Current Maturities......... 227,998 140,102 EXCESS OF NET ASSETS ACQUIRED OVER COST......... 326,519 217,679 DEFERRED INCOME TAXES........................... 747,560 747,560 SHAREHOLDERS' EQUITY Preferred Stock, $10 Par Value, Authorized 100,000 Shares, None Issued........ Common Stock, $.05 Par Value, Authorized 13,000,000 Shares, Issued 5,140,448 and 5,142,031 Shares, Respectively............ 257,023 257,076 Additional Paid-In Capital..................... 5,649,101 5,656,471 Retained Earnings.............................. 33,085,917 32,787,195 Treasury Stock, at Cost (355,895 Shares and 446,395 Shares, Respectively)............. (3,062,945) (3,688,070) Accumulated Other Comprehensive Income (Loss) (170,097) (165,418) ----------- ----------- 35,758,999 34,847,254 ----------- ----------- $42,813,714 $41,916,009 =========== ===========
-3- ASTRO-MED, INC. UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended ------------------------ August 2, August 1, 1997 1998 ----------- ---------- Net Sales.................................................. $10,676,531 $10,528,111 Cost of Sales.............................................. 6,675,149 6,258,930 ----------- ----------- Gross Profit............................................... 4,001,382 4,269,181 Costs and Expenses: Selling, General and Administrative....................... 3,250,544 3,503,524 Research and Development.................................. 697,369 734,332 ----------- ----------- 3,947,913 4,237,856 ----------- ----------- Operating Income........................................... 53,469 31,325 Other Income (Expense): Investment Income......................................... 200,718 209,953 Interest Expense.......................................... (10,055) (6,066) Other, Net................................................ (64,462) 19,195 ----------- ----------- 126,201 223,082 ----------- ----------- Income before Income Taxes................................. 179,670 254,407 Provision for Income Taxes................................. 42,000 66,000 ----------- ----------- Net Income................................................. $ 137,670 $ 188,407 =========== =========== Earnings Per Common Share-basic............................ $.03 $.04 ==== ==== Earnings Per Common Share-diluted.......................... $.03 $.04 ==== ==== Weighted Average Number of Common and Common Equivalent Shares Outstanding-basic....................... 4,865,841 4,740,523 =========== =========== Weighted Average Number of Common and Common Equivalent Shares Oustanding-diluted...................... 4,927,211 4,775,098 =========== =========== Dividends Declared Per Common Share........................ $.04 $.04 ==== ====
-4- ASTRO-MED, INC. UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
Six Months Ended ------------------------- August 2, August 1, 1997 1998 ----------- ----------- Net Sales.................................................. $22,383,036 $20,584,551 Cost of Sales.............................................. 13,877,745 12,439,763 ----------- ----------- Gross Profit............................................... 8,505,291 8,144,788 Costs and Expenses: Selling, General and Administrative....................... 6,389,643 7,011,214 Research and Development.................................. 1,406,696 1,492,296 ---------- ----------- 7,796,339 8,503,510 ---------- ----------- Operating Income (Loss).................................... 708,952 (358,722) Other Income (Expense): Investment Income......................................... 394,918 418,757 Interest Expense.......................................... (13,294) (12,209) Other, Net................................................ (88,480) 65,718 ---------- ----------- 293,144 472,266 ---------- ----------- Income before Income Taxes................................. 1,002,096 113,544 Provision for Income Taxes................................. 286,055 29,000 ---------- ----------- Net Income................................................. $ 716,041 $ 84,544 ========== =========== Earnings Per Common Share-basic............................ $.15 $.02 ==== ==== Earnings Per Common Share-diluted.......................... $.15 $.02 ==== ==== Weighted Average Number of Common and Common Equivalent Shares Outstanding-basic....................... 4,889,827 4,760,447 ========== =========== Weighted Average Number of Common and Common Equivalent Shares Oustanding-diluted...................... 4,939,486 4,796,971 ========== =========== Dividends Declared Per Common Share........................ $.08 $.08 ==== ====
-5- ASTRO-MED, INC. UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended ------------------------------- August 2, August 1, 1997 1998 ----------- ----------- Cash Flows from Operating Activities: Net Income........................................ $ 716,041 $ 84,544 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and Amortization................... 588,869 610,789 Other........................................... (93,147) 20,954 Changes in Assets and Liabilities: Accounts Receivable.......................... 1,274,405 323,366 Inventories.................................. (203,493) 127,123 Other........................................ 308,308 170,024 Accounts Payable and Accrued Expenses........ 679,910 155,836 Income Taxes................................. (518,303) 54,940 ----------- ----------- Total Adjustments.......................... 2,036,549 1,463,032 Net Cash Provided by Operating Activities...... 2,752,590 1,547,576 Cash Flows from Investing Activities: Proceeds from Sales of Securities Available for Sale.............................. 167,018 3,553,884 Purchases of Securities Available for Sale...... (1,202,173) (3,757,883) Additions to Property, Plant and Equipment........ (303,517) (344,826) ----------- ----------- Net Cash Used by Investing Activities........... (1,338,672) (548,825) Cash Flows from Financing Activities: Principle Payments on Capital Leases.............. (89,078) (87,896) Proceeds from Common Shares Issued Under Employee Benefit Plans.................... 14,069 7,421 Purchases of Treasury Stock....................... (725,210) (625,125) Dividends Paid.................................... (342,310) (383,266) ----------- ----------- Net Cash Used by Financing Activities........... (1,142,529) (1,088,866) Net Increase (Decrease) in Cash and Cash Equivalents........................................ 271,389 (90,115) Cash and Cash Equivalents, Beginning of Period....... 6,561,184 5,659,552 ----------- ----------- Cash and Cash Equivalents, End of Period............. $ 6,832,573 $ 5,569,437 =========== =========== Supplemental Disclosures of Cash Flow Information: Cash Paid During the Period for: Interest...................................... $ 19,858 $ 13,146 Income Taxes.................................. $ 600,956 $ 0 Other Non-Cash Transactions: Acquisition of Leased Equipment............... $ 200,000 $ 0
-6- ASTRO-MED, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS August 1, 1998 Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) The accompanying financial statements have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission, and reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results of the interim periods presented. 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, 1998. (b) Earnings per common share have been computed and presented pursuant to the provisions of Statement of Financial Accounting Standards No. 128, Earnings Per Share, which was adopted in fiscal 1998. Net income per share is based on the weighted average number of shares outstanding during the period. Net income per share assuming dilution is based on the weighted average number of shares and common equivalent shares for stock options outstanding during the period.
Three Months Ended Six Months Ended -------------------------- -------------------------- August 2, August 1, August 2, August 1, 1997 1998 1997 1998 ----------- ----------- ----------- ----------- Weighted Average Common Shares Outstanding-basic...... 4,865,841 4,740,523 4,889,827 4,760,447 Diluted Effect of Options Outstanding................. 61,370 34,575 49,659 36,524 --------- --------- --------- --------- Weighted Average Common Shares Outstanding-diluted.... 4,927,211 4,775,098 4,939,486 4,796,971 ========= ========= ========= =========
Note 2 - CHANGE IN ACCOUNTING PRINCIPLES Effective February 1, 1998, the Company adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income". This statement requires presentation of the components of comprehensive income, including the changes in equity from non-owner sources such as unrealized gains (losses) on securities and foreign currency translation adjustments. The Company's total comprehensive income is as follows.
Three Months Ended Six Months Ended -------------------------- -------------------------- August 2, August 1, August 2, August 1, 1997 1998 1997 1998 ----------- ----------- ----------- ----------- Comprehensive Income: Net Income............................................ $137,670 $188,407 $716,041 $ 84,544 -------- -------- -------- -------- Other Comprehensive Income(Loss): Foreign currency translation adjustments............. (37,955) (38,624) (93,053) 19,784 Unrealized gain(loss) on securities: Unrealized holding gain (loss) arising during the period....................................... 17,593 10,191 (94) (12,604) Less: reclassification adjustment for gains included in net income........................... - (2,501) - (2,501) -------- -------- -------- -------- Other comprehensive Income (Loss): ................... (20,362) (30,934) (93,147) 4,679 Income tax benefit (expense) related to items of other comprehensive income................................ 4,760 8,024 26,547 (1,195) -------- -------- -------- -------- Other Comprehensive Income (Loss), net of tax......... (15,602) (22,910) (66,600) 3,484 Comprehensive Income.................................. $122,068 $165,497 $649,441 $ 88,028 ======== ======== ======== ========
-7- Note 3 - INVENTORIES Inventories are stated at the lower of cost (first-in, first-out) or market and include material, labor and manufacturing overhead. The components of inventories were as follows:
January 31, August 1, 1998 1998 ----------- ----------- Materials and Supplies....... $ 5,620,041 $ 6,017,704 Work-In-Process.............. 993,149 802,096 Finished Goods............... 3,728,666 3,394,933 ----------- ----------- $10,341,856 $10,214,733 =========== ===========
-8- ASTRO-MED, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations: - --------------------- Net Sales in the second quarter reached $10,528,000 rising 5% from the first quarter's sales of $10,056,000 but were 1% behind last year's second quarter sales of $10,677,000. Sales through the domestic channels were $7,689,000 whereas our international sales were $2,839,000 in the quarter. Domestic sales were lower than last year's second quarter sales of $8,177,000. International sales were healthy with revenues 13% ahead of last year's sales with most international branches posting double digit sales increases. After six months, sales revenues in the current fiscal year were $20,584,000 which are down 8% from the prior year level of $22,383,000. Domestically, sales were $15,606,000, whereas the international sales volume was $4,978,000. Gross Profit dollars in the second quarter were $4,269,000, 7% better than last year and 10% higher than the first quarter's gross profit dollars. The second quarter's gross margin percentage of 41% compares favorably to the prior year margin of 38% as well as the first quarter's margin of 39%. This quarter's result is an outgrowth of product mix and improved margins in both the QLS and Grass Instrument product lines. After six months, Gross Profit dollars were $8,145,000 reflecting a margin of 40%. This year's gross margin percentage marks an improvement over the prior year margin of 38%. The improvement is traceable to improved margins and product mix. Spending in the Selling, Research and Development and General and Administrative accounts was $4,238,000 during the quarter. This quarter's expenses were higher by 7% from last year and are traceable to increases in sales personnel, R & D projects and Information Technology requirements. After six months operating expenses were $8,503,000, an increase of 9% from last year's expense levels. The increase was due to higher spending in selling & marketing, new product development and G & A expenses. Other Income in the quarter was $223,000 reflecting a sharp increase over the prior year's income level of $126,000. The improvement is due to increases in dividend and interest income as well as reductions in losses realized on foreign currency translations. For the six month period other income was $472,000 against last year's level of $293,000, and was due to favorable results in foreign currency translation and improved interest income. Net Income in the second quarter was $188,000 or 4c per share. This year's result was an improvement of 37% over the prior year's second quarter net income and translates into an improvement of 1c per share. Net income after six months is $85,000 or 2c per share as compared to the prior year net income of $716,000 or 15c per share. -9- Financial Condition: - ------------------- The Company's balance sheet remains strong with cash and marketable securities increasing $98,000 from year end to $13,230,000 at second quarter's end. Accounts Receivable dollars declined 4% to $7,505,000. Inventories also declined $127,000 to $10,215,000. The working capital balance declined from year end to $26,378,000 but still reflects a strong current ratio of 5:42 to 1. Capital expenditures during the first six months were $345,000 reflecting a mix of purchases including production equipment, hardware and software technology investments, and building improvements. During the first half of the current fiscal year, the Company has purchased 90,500 shares of its Common Stock with 62,500 shares purchased during the second quarter. The Board of Directors approved repurchase plan currently authorizes the purchase of another 311,176 shares of its common stock. Cash Dividends of 4c per share were paid to shareholders of record during the first quarter and second quarter of the current fiscal year. Shareholders' equity was $34,847,000 at the end of the second quarter. Year 2000: - --------- The Year 2000 issue is the result of computer programs being written using two digits (rather than four) to define the applicable year. Any of the Company's computer programs that have date-sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000, which could result in system failures or miscalculations. The Company is currently working to resolve the Year 2000 issue and has established processes for evaluating and managing the risks and costs associated with products sold as well as products purchased by the Company. The Company will utilize both internal and external resources to reprogram or replace, and test the software for Year 2000 modifications. In addition, the Company is communicating with suppliers and customers with whom the Company does business to coordinate the Year 2000 conversion. The Company's present state of readiness and costs to address the Year 2000 issues have been summarized in the following chart: -10-
YEAR 2000 COSTS -------------------------------- Time Table Incurred Est. to Total Est. System Type for Completion to-Date Complete Cost ------------- ---------------- -------- -------- ---------- IT Systems: A/S 400 IBM Midrange System Completed - 1/98 $200,751 $ - $200,751 Financial/Manufacturing/ October, 1998 321,243 15,000 336,243 Distribution Business Software Systems Other Internal IT and Non-IT Hardware and April, 1999 30,294 255,000 285,294 Software -------- -------- -------- $552,288 $270,000 $822,288 ======== ======== ========
Safe Harbor Statement - --------------------- This document contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. The factors that could cause actual results to differ materially include the following: general economic conditions and growth rates in the data acquisition, digital color printing, and neurophysiology markets, including but not limited to the electronic, printing, and medical markets; competitive factors and pricing pressures; changes in product mix; changes in the seasonality of demand patterns; the timely development and acceptance of new products; inventory risks due to shifts in market demand; component constraints and shortages; risk of non-payment of accounts receivable; ramp up and expansion of manufacturing capacity; and the risks described from time to time in Astro-Med's reports filed with the Securities and Exchange Commission. -11- PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: None. (b) Reports on Form 8-K: No reports on Form 8-K have been filed during the quarter for which this report is filed. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ASTRO-MED, INC. (Registrant) Date: September 4, 1998 By --------------------------------- A. W. Ondis, Chairman (Principal Executive Officer) Date: September 4, 1998 By --------------------------------- Joseph P. O'Connell, Vice President and Treasurer (Principal Financial Officer) -12- EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS JAN-31-1999 MAY-03-1998 AUG-01-1998 5,569,437 7,661,023 7,504,698 0 10,214,733 32,341,181 18,401,519 10,857,431 41,916,009 5,963,414 100,000 0 0 257,076 34,590,178 41,916,009 10,528,111 10,528,111 6,258,930 6,258,930 4,237,856 0 6,066 254,407 66,000 188,407 0 0 0 188,407 .04 .04
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