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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

For the fiscal year ended January 31, 2003

OR

For the transition period from                        to                        

Commission file number 0-13200

Astro-Med, Inc.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: (401) 828-4000

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $.05 Par Value

(Title of Class)

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     x

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 by check mark whether the registrant is an accelerated filer.    Yes  ¨     No  x

State the aggregate market value of the voting stock held by

non-affiliates of the registrant as of March 21, 2003.

Common Stock, $0.05 Par Value: $9,954,805

Indicate the number of shares outstanding (excluding treasury shares)

of each of the issuer’s classes of common stock as of March 21, 2003.

Common Stock, $0.05 Par Value: 4,270,712 shares

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Company’s definitive proxy statement for the 2003 annual meeting of shareholders are incorporated by reference into Part III.

Table of Contents

ASTRO-MED, INC.

FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS

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ASTRO-MED, INC.

PART I

Item 1. Business

General

Astro-Med, Inc., (the Company) is an enterprise that is strategically structured to design, develop, manufacture and distribute a diverse line of technology-advanced products and services. The Company is organized around a suite of core competencies including Research & Development, Manufacturing, Information Technology and Administrative Management. The Company markets and sells its products and services through three distinct product groups; Test & Measurement (T&M), QuickLabel^® Systems (QLS), and Grass-Telefactor (G-T). T&M develops and manufactures data acquisition instruments that serve the test and measurement market. QLS develops and manufactures digital printers and consumable products that serve the product identification market. Grass-Telefactor develops and manufactures clinical neurophysiology (EEG and epilepsy monitoring), polysomnography (PSG – Sleep monitoring), biomedical research instrumentation and supplies that serve the life sciences market. The Company’s products are distributed both in North America and internationally through its direct sales force and authorized distributors and agents located in approximately forty countries. Approximately 27% of the Company’s sales were made outside of the United States.

The Company and its subsidiaries and their representatives may from time to time make written or oral statements, including statements contained in the Company’s filings with the Securities and Exchange Commission (SEC) and in its reports to shareholders which constitute or contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 or by the SEC in its rules, regulations and releases.

All statements, other than statements of historical facts included in this annual report regarding the Company’s financial position and operating and strategic initiatives and addressing industry developments are forward-looking statements. Where, in any forward-looking statement, the Company or its management expresses an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will result or be achieved or accomplished. Factors which could cause actual results to differ materially from those anticipated include, but are not limited to, general economic, financial and business conditions; declining demand in the test and measurement markets, especially defense and aerospace; competition in the specialty printer industry; ability to develop market acceptance of the QLS color printer products and effective design of customer required features; competition in the data acquisition industry; competition in the neurophysiology industry; the impact of changes in foreign currency exchange rates on the results of operations; the ability to successfully integrate acquisitions; the ability to realize the anticipated cost reductions from restructuring and streamlining the business; the business abilities and judgment of personnel and changes in business strategy.

Narrative Description of Business

Products

Overview

The Company develops and manufactures systems that have the ability to acquire electronic data, process, analyze, store and present the data in a variety of useable forms. The T&M data acquisition systems record scientific signals and print the output onto charts or electronic media. The QLS digital printer systems and media products create product and packaging labels and tags in one or many colors. The Grass-Telefactor products electronically record signals that reflect the physiological status of living creatures for digital or analog access. The Company supplies a range of products that include the hardware, software, and supplies to customers who are in a variety of industries.

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T&M Products

The Company’s T&M products are a comprehensive line of data recording instruments for the aerospace, automotive, pulp and paper, metal mill, transportation and manufacturing industries. These recording solutions provide customers with a complete record of their data, whether they are troubleshooting a process, performing preventative maintenance or gathering mission critical data. Using contemporary technologies, T&M products are designed to handle customers ever-changing requirements now and into the future.

Telemetry Recorders

The Everest Telemetry-Recorder Workstation is the flagship product of T&M’s line of telemetry recorders. Designed for the unique requirements of the aerospace and defense industries, the Everest provides engineers with vital data on test products during pre-flight checkout and flight tests. Intended to seamlessly integrate into off-the-shelf telemetry systems, the Everest is used to test fighter planes, missiles, helicopters, satellites and commercial aircraft.

During flight test, the Everest provides engineers with real-time access to data to allow them to make split second decisions and prevent costly retesting. After flight test, data from the Everest is available in both paper and digital formats, allowing engineers to analyze data faster than ever before.

Dash Series Data Acquisition Recorders

The Company’s Dash Series recorders are used as maintenance and troubleshooting tools for pulp and paper mills, power plants, transportation test centers, steel mills, automotive R&D centers and manufacturing plants. With downtime costing these facilities tens of thousands of dollars per day, the Dash Series data acquisition recorders can pay for themselves by preventing a single outage. Completely self-contained in rugged aluminum cases, the Dash Series data acquisition recorders are ideally suited for use in harsh environments where computer-based or other systems will not perform.

Seven data acquisition recorders form the Dash series line: the Dash 2, Dash 4u, Dash 8n, Dash 8u, Dash 8X, Dash 16u and Dash 18. Priced from $8,000 to $23,000, the Company offers a product for any budget. The Dash 8X is the latest portable data acquisition recorder to be introduced. With such leading edge technology as a touchscreen display, integral web browser and network interface, the Dash 8X is an important troubleshooting tool for virtually any environment.

Ruggedized Printers and Ethernet Switches

The Company also manufactures a line of ruggedized printers and Ethernet switches. The ToughWriter 3 is a ruggedized airborne cockpit printer used to print weather maps, communications and other flight critical information. The ToughWriter 3 meets MIL-STD requirements for shock, vibration and temperature, making it ideal for use on both commercial and military aircraft.

The ToughSwitch is an eight port, ruggedized Ethernet switch that also meets MIL-STD requirements for shock, vibration and temperature. Designed to withstand the rigors of commercial/military aviation and the harsh environments of the battlefield, the ToughSwitch is ideally suited for applications where standard or industrial grade hubs will not survive.

QLS Products

The Company’s QLS product line is composed of an array of high-technology digital color label printers, automatic labelers, and print and apply systems, as well as labeling software and consumables. Innovative QLS products continue to change the way companies do business by providing just-in-time, in-plant label production capabilities and labeling automation through the Company’s advanced digital thermal transfer printing technologies. QLS’s packaging, barcoding and labeling solutions are used throughout the world.

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Digital Color Label Printers

QLS digital color labels printers are designed to print multiple colors, text and barcodes in a single pass on labels, tags and tickets of all kinds. Using Astro-Med’s proprietary MicroCell^™ color halftoning technology, these printers create near lithographic quality labels that can be generated on and printed directly from a customer’s personal computer, mainframe or AS/400 midrange computing platform.

In late fiscal year 2002, the Company introduced the new advanced four-color digital label printer, the QLS-4100X. The QLS-4100X, priced at $17,995, is the Company’s fourth-generation process color printer, which incorporates new features deriving from the Company’s research and development, thermal printing experience, and feedback from users around the world.

With the Company’s patented Ribbon Ration^™ technology for economizing thermal transfer ribbon, enhanced mechanical design for precise color registration, robust performance for long runs, and more user-friendly operation, the QLS-4100X is QLS’s flagship.

QLS’s digital color label printer offering also includes the following models: the QLS-2000, QLS-2001, QLS-3000, and QLS-3001. With either two or three print stations, the QLS-2000 and QLS-3000 printers represent the Company’s value line of color printers, providing color-labeling solutions for general product identification applications at price points of $6,550 and $10,995 respectively. The QLS-2001 and QLS-3001 models, priced at $6,995 and $9,995, are used in specialty and niche applications, including the printing of Tyvek pouches used in the packaging of surgical instruments. These models also comprise the core of QLS’s Apparel Printing Systems, designed to print apparel care tags, hang tags and price tickets in manufacturing environments, retail applications, and service bureau operations worldwide.

Marketing of the QLS printers targets applications such as the private labeling of foods and beverages, chemicals and cleaning supplies, pharmaceutical and medical products, personal care products, and others.

Barcode Label Printers

QLS has a new family of barcode label printers: the Pronto series. This new line of low-cost, feature-rich barcode printers includes the Pronto 442 and Pronto 472. Both of these printers have 203 dpi resolution. The Pronto series also includes the high-resolution 400 dpi Pronto 474 and the 8.6” wide Pronto 843. These competitively-priced Pronto models mark the Company’s re-entry into mainline barcode printing applications and serve as important vehicles for the sale of QLS’s thermal transfer ribbon and label products.

QLS’s barcode printer line also includes the robust, industrial monochrome barcode printer, the Top Hand^™ QLS-500 printer. With a rugged design for harsh environment applications, the $2,995 Top Hand printer produces labels up to 5 inches wide at speeds of up to 10 inches per second.

QuickLabel Software

An important component of the Company’s digital printing systems is the software that produces the label formatting and the printing functionality required for successful in-plant printing. This software, marketed under the brand name Color QuickLabel^™, allows customers to tap the true power inherent in the QuickLabel printers. CQL99, a 32-bit Windows^®-based label creation and printing suite, supports high-color imaging, MicroCell^™ image halftoning, full network printing, and multiple database compatibility. CQL99 software further advances integration of the QuickLabel Systems printers within today’s high-technology production environments.

QuickLabel Automatic Label Applicators and Print & Apply Systems

To complement the QLS printers, the Company manufactures a complete line of automatic labelers that can apply labels to all types of products, from cartons to primary product packaging to cylindrical containers. Applicator models include the AD-2800 and AD-2600 roll-on label applicators. The Company also offers a high-speed bottle labeling system utilizing its AD-2800 label applicator. The CPA-350, the Company’s ruggedized print and apply system, offers companies the ability to print a label on-demand and apply it to a product as it passes on a conveyor. The CPA-350 can be configured with air tamp, air blast, dual apply or corner wrap applicator heads to apply a label to two sides of the same carton or pallet.

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Consumables: Thermal Transfer Ribbon and Labels

Rounding out the QLS products is a wide array of printer consumables including thermal transfer ribbons in many colors and formulations, and both paper and synthetic labels and tags. A full line of high quality materials, developed and qualified by the Company, is available to guarantee a finished label that meets almost any requirements from single-use paper labels to garment labels, to outdoor signage and product labels.

Grass-Telefactor Products

The Grass-Telefactor product group offers a range of instrumentation and supplies for clinical and biomedical research applications.

Grass-Telefactor enjoys a reputation built on decades of innovative technology and thoughtful design. The clinical product line includes in-lab or in-hospital integrated systems for clinical EEG and PSG (Polysomnography), epilepsy diagnosis and surgery, critical care and intraoperative neuromonitoring. These products offer a variety of features including networking, database and report generation capabilities in addition to powerful data acquisition and analysis tools. Grass-Telefactor utilizes a Windows^®-based product line which includes the Beehive^™ Millennium used for long term epilepsy monitoring, the Aurora^™ digital EEG system and the recently introduced Aurora^™ digital PSG system. The products and services offered by Grass-Telefactor are used worldwide by universities, medical centers, and companies engaged in a variety of clinical and research activities.

On the research side, Grass-Telefactor offers a complete solution for any biomedial research project. This product line includes transducers which read signals directly off of a subject, amplifiers that clean up the signals and amplify them to appropriate recording levels, and software that records the information and allows for straightforward analysis and review.

Grass-Telefactor offers a complete line of clinical and research supplies, including stimulators, transducers, electrodes and consumables. The supplies and accessories product line now uses e-commerce to reach an even wider market through the Grass-Telefactor Online Store, www.grass-telefactor.com.

Technology

The core technologies of the Company relate to (1) acquiring data, (2) conditioning the data, (3) displaying the data on hard copy, monitor, or electronic storage media, and finally (4) analyzing the data. All three-product groups of the Company—T&M, QLS and G-T use these technologies.

The Company is continually improving the performance and functionality of core technologies, enabling the Company to lead the competition with innovative products.

Patents and Copyrights

The Company holds a number of product patents in the United States and in foreign countries. It has filed applications for other patents that are pending. The Company has patents covering its T&M recording products as well as several patents for its QLS dual sided label printers and four-color label printers. In addition, the Company has two other patents pending on its multi-color printing technology. The Company considers its patents to be important but does not believe that its business is materially dependent on them. The Company copyrights its extensive software and registers its trademarks.

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Manufacturing and Supplies

The Company designs its products and manufactures many of the component parts. The balance of the parts is produced to the Company’s specifications by suppliers. Raw materials required for the manufacture of products, including parts produced to the Company’s specifications, are generally available from numerous suppliers.

Product Development

The Company has maintained an active program of product research and development since its inception. During fiscal 2003, 2002 and 2001, the Company incurred costs of $4.3 million, $3.7 million, and $4.3 million, respectively, on Company-sponsored product development. The Company is committed to product development as a requisite to its growth and expects to continue its focus on research and development efforts in fiscal 2004.

Marketing and Competition

The Company competes worldwide in many markets including clinical and research medicine, aerospace, automotive and general manufacturing. The Company retains a competitive position in its respective markets by virtue of proprietary technology, product reputation, delivery, technical assistance and service to customers.

The products of the Company are marketed worldwide by advertising and promotion using major national and international trade journals, scientific meetings and trade shows, direct mailing campaigns, and the Internet.

The products are sold by direct field sales persons as well as independent dealers and representatives. In the United States, the Company has twenty-two direct field sales people located in major cities from coast to coast specializing in either T&M’s Recorders and Data Acquisitions systems, QLS’s Color Label printers and media systems, or G-T Neurological Instrumentation products. Additionally, the Company has direct field sales and service centers in Canada, England, France, Germany, Italy and Holland. In the remaining parts of the world, the Company utlitizes approximately 80 independent dealers and representatives selling and marketing its products in 40 countries. In fiscal 2003, 27% of the Company’s revenues were from international sales.

The Company has a number of competitors in each of the three products groups and markets that it serves. In the T&M area, the Company feels that it leads the field in Data Acquisition Recorders. It competes with the Gould Instrument Division of Nicolet, a Thermo Electron company and Western Graphtec, the US subsidiary of Graphtec, a Japanese company.

In the Color Label Printer product group, the Company believes it leads the world in color printing using the thermal transfer printing technology. The Company introduced the very first thermal transfer color printers late in 1995 and to this date faces only one competitor, TEC.

The Grass-Telefactor products of the Company are devoted to clinical applications in EEG, Polysomnography (PSG), and Long Term Epilepsy Monitoring (LTM). There are about fourteen companies that compete in one or more of the three modalities (EEG, PSG, LTM) but none are the clear leader. The Company feels it offers superior products based upon its long history and pioneering the field since 1935. The Company, unlike most of its competitors, designs, manufactures, and produces complete systems including transducers, amplifiers, sensors, and Windows based application software. Additionally, the Company produces a range of life science products for the research market. Many of the latter products eventually find their way into clinical applications.

No single customer accounted for 10% of the Company’s net sales in any of the last three fiscal years. The Company’s products were sold to approximately 5,000 customers.

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International Sales

The Company had a Foreign Sales Corporation subsidiary that qualified for certain tax benefits on its exports. Effective December 31, 2001, the Company dissolved this subsidiary as a result of rule changes made by the World Trade Organization and tax authorities.

In fiscal 2003, 2002 and 2001, net sales to customers in various geographic areas outside the United States, primarily in Canada and Western Europe, amounted to $13.0 million, $13.8 million, and $13.9 million, respectively.

Order Backlog

The backlog fluctuates regularly. It consists of a blend of orders for end user customers as well as original equipment manufacturer customers. Manufacturing is geared to forecasted demands and applies a rapid turn cycle to meet customer expectations. Accordingly, the amount of order backlog does not indicate future sales trends and the Company does not normally carry any material backlog.

Other Information

The Company’s business is not seasonal in nature.

Most of the Company’s products are generally warranted for one year against defects in materials or workmanship. Warranty expenses have generally averaged approximately $240,500 a year for the Company’s last five fiscal years.

As of March 21, 2003 the Company employed approximately 335 persons. The Company is generally able to satisfy its employment requirements. No employees are represented by a union. The Company believes that employee relations are good.

Item 2.   Properties

The following table sets forth information regarding the Company’s principal owned properties, all of which are included in the consolidated balance sheet appearing elsewhere in this report.

The Company also leases facilities in eight locations. The following information pertains to each location:

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The Company believes its facilities are well maintained, in good operating condition and generally adequate to meet its needs for the foreseeable future.

Item 3.   Legal Proceedings

There are no pending or threatened legal proceedings against the Company believed to be material to the financial position or results of operations of the Company.

Item 4.   Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of the Company’s security holders, through solicitation of proxies or otherwise, during the last quarter of the period covered by this report.

PART II

Item 5.   Market for the Registrant’s Common Stock and Related Stockholder Matters

The Company’s common stock trades on The NASDAQ Stock Market under the symbol ALOT. The following table sets forth dividend data and the range of high and low closing prices, as furnished by NASDAQ, for the periods indicated.

The Company had approximately 390 shareholders of record on March 21, 2003, which does not reflect shareholders with beneficial ownership in shares held in nominee name.

Shareholder Services

Shareholders of Astro-Med, Inc. who desire information about the Company are invited to contact the Investor Relations Department, Astro-Med, Inc., 600 East Greenwich Avenue, West Warwick, RI 02893 or call (401) 828-4000. Visit our Investor Relations website at www.astro-med.com. We make available free of charge on our Internet website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

Dividend Policy

The Company began a program of paying annual cash dividends in the second quarter of fiscal 1992. Previously, no cash dividends had been declared or paid by the Company since inception. The Company anticipates that it will continue to pay cash dividends on a annual basis.

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Item 6.   Selected Financial Data

(Dollars in Thousands, Except Per Share Amounts)

Item 7.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

Fiscal 2003 compared to Fiscal 2002

The Company’s sales in fiscal 2003 were $49.0 million, down less than 1.0% from the prior year’s sales of $49.4 million. Domestic sales increased $0.3 million to $36.0 million, a 1.0% increase over fiscal 2002, while international sales declined $0.7 million to $13.0 million.

Gross profit decreased 5.3% to $18.1 million in fiscal 2003 from $19.1 million in fiscal 2002. The Company’s gross profit margin declined to 36.9% from 38.7%. The decline in gross profit can be attributed primarily to the change in sales mix.

Selling, general and administrative spending (SG&A) declined 7.5% to $14.9 million from $16.1 million. The decline in SG&A expenses can be attributed to lower personnel costs, lower advertising expenses, lower commissions and the elimination of goodwill amortization. Research & Development (R&D) expenses increased to $4.3 million in fiscal 2003 from $3.7 million in fiscal 2002. R&D as a percentage of sales increased to 8.8% in this fiscal year as compared 7.6% in the prior year.

In fiscal year 2003, the Company implemented an organizational restructuring in an effort to reduce costs and streamline operations. The restructuring included workforce reductions in all areas of the Company and a significant curtailment of its Pennsylvania research facility. The Company eliminated 28 employees or approximately 8% of its workforce. In fiscal 2003, the Company recorded $490,000 of restructuring and impairment charges. These charges included $364,000 of severance and related termination benefit costs and a $126,000 charge to write-down the value of equipment used at the research facility. At January 31, 2003, $336,000 of severance and related termination benefit costs were accrued. The majority of these costs will be paid in the first quarter of fiscal year 2004. The Company anticipates eliminating approximately $2.0 million of payroll and other costs through the workforce reduction.

Interest and dividend income declined in fiscal 2003 to $198,000 from $248,000 in fiscal 2002. The decrease is due to lower yields on investments. Other income/expense, net for fiscal 2003 was $329,000 as compared to last fiscal year’s other income/expense, net of $192,000. The favorable $137,000 change in other income/expense, net is attributed primarily to $145,000 of favorable foreign exchange gains during fiscal 2003.

The Company recorded a tax expense of $0.8 million for fiscal 2003. This provision was primarily the result of providing a full valuation allowance for the Company’s deferred tax assets. The Company had previously provided valuation allowances only for certain foreign losses. As a result of a review undertaken at January 31, 2003 and our cumulative loss position at that date, management concluded that it was appropriate to establish a full valuation allowance for its net deferred tax assets.

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The Company reports three segments that mirror the Company’s sales product groups (i.e., T&M, QLS and G-T). The Company evaluates segment performance based on the operating segment’s profit before corporate and financial administration expenses.

The following table summarizes selected financial information by segment: