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 July 31, 2004
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 incorporation or organization) |
(I.R.S. Employer 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 by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act) Yes ¨. No x.
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 - 5,309,691 shares
(excluding treasury shares) as of August 20, 2004
ASTRO-MED, INC.
| Page No. | ||
| Part I. Financial Information: | ||
| Item 1. Financial Statements |
||
| Condensed Consolidated Balance Sheets - July 31, 2004 and January 31, 2004 |
3 | |
| 4 | ||
| Condensed Consolidated Statements of Operations - Six-Months Ended July 31, 2004 and August 2, 2003 |
5 | |
| Condensed Consolidated Statements of Cash Flows - Six-Months Ended July 31, 2004 and August 2, 2003 |
6 | |
| Notes to Condensed Consolidated Financial Statements - July 31, 2004 |
7-11 | |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
12-15 | |
| Item 3. Quantitative and Qualitative Disclosures about Market Risk |
17 | |
| 17 | ||
| Part II. Other Information | 17 | |
| Item 6. Exhibits and Reports on Form 8-K |
18 | |
| 18 | ||
| Management Certifications |
||
-2-
CONDENSED CONSOLIDATED BALANCE SHEETS
| July 31, 2004 |
January 31, 2004 |
|||||||
| (Unaudited) | ||||||||
| ASSETS |
||||||||
| CURRENT ASSETS |
||||||||
| Cash and Cash Equivalents |
$ | 5,729,959 | $ | 4,998,643 | ||||
| Securities Available for Sale |
7,409,904 | 7,678,684 | ||||||
| Accounts Receivable, Net |
10,092,044 | 9,814,784 | ||||||
| Inventories |
9,235,239 | 9,110,167 | ||||||
| Deferred Tax Assets |
3,720,346 | — | ||||||
| Prepaid Expenses and Other Current Assets |
729,119 | 414,833 | ||||||
| Total Current Assets |
36,916,611 | 32,017,111 | ||||||
| PROPERTY, PLANT AND EQUIPMENT |
25,894,050 | 25,166,761 | ||||||
| Less Accumulated Depreciation |
(18,637,508 | ) | (18,042,022 | ) | ||||
| 7,256,542 | 7,124,739 | |||||||
| OTHER ASSETS |
||||||||
| Goodwill |
2,336,721 | 2,336,721 | ||||||
| Amounts Due from Officers |
480,314 | 480,314 | ||||||
| Other |
167,314 | 106,072 | ||||||
| $ | 47,157,502 | $ | 42,064,957 | |||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| CURRENT LIABILITIES |
||||||||
| Accounts Payable |
$ | 2,371,506 | $ | 2,156,896 | ||||
| Accrued Compensation |
1,425,356 | 2,509,434 | ||||||
| Accrued Expenses |
3,548,187 | 2,817,118 | ||||||
| Income Taxes Payable |
253,594 | 34,380 | ||||||
| Total Current Liabilities |
7,598,643 | 7,517,828 | ||||||
| DEFERRED TAX LIABILITIES |
1,219,606 | — | ||||||
| SHAREHOLDERS’ EQUITY |
||||||||
| Preferred Stock, $10 Par Value, Authorized 100,000 Shares, None Issued |
— | — | ||||||
| Common Stock, $.05 Par Value, Authorized 13,000,000 Shares, Issued, 6,281,386 and 5,716,061 Shares, respectively (Note 1) |
314,069 | 285,803 | ||||||
| Additional Paid-In Capital (Note 1) |
15,780,131 | 8,336,806 | ||||||
| Retained Earnings (Note 1) |
28,245,716 | 31,703,077 | ||||||
| Treasury Stock, at Cost, 971,695 and 969,695 Shares, respectively |
(6,115,860 | ) | (6,095,755 | ) | ||||
| Accumulated Other Comprehensive Income |
115,197 | 317,198 | ||||||
| 38,339,253 | 34,547,129 | |||||||
| $ | 47,157,502 | $ | 42,064,957 | |||||
-3-
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Three-Months Ended |
||||||||
| July 31, 2004 |
August 2, 2003 |
|||||||
| (Unaudited) | ||||||||
| Net Sales |
$ | 13,990,031 | $ | 14,023,364 | ||||
| Cost of Sales |
8,070,197 | 8,206,989 | ||||||
| Gross Profit |
5,919,834 | 5,816,375 | ||||||
| Costs and Expenses: |
||||||||
| Selling, General and Administrative |
4,036,545 | 3,932,498 | ||||||
| Research and Development |
966,139 | 906,754 | ||||||
| 5,002,684 | 4,839,252 | |||||||
| Operating Income |
917,150 | 977,123 | ||||||
| Other Income (Expense): |
||||||||
| Investment Income |
89,959 | 47,028 | ||||||
| Other, Net |
(65,725 | ) | (13,987 | ) | ||||
| 24,234 | 33,041 | |||||||
| Income Before Income Taxes |
941,384 | 1,010,164 | ||||||
| Income Tax Provision |
(338,905 | ) | (200,227 | ) | ||||
| Net Income |
$ | 602,479 | $ | 809,937 | ||||
| Net Income Per Common Share: |
||||||||
| Basic |
$ | 0.11 | $ | 0.17 | ||||
| Diluted |
$ | 0.10 | $ | 0.16 | ||||
| Weighted Average Number of Common Shares Outstanding: |
||||||||
| Basic |
5,307,253 | 4,638,138 | ||||||
| Diluted |
5,817,430 | 5,031,628 | ||||||
| Dividends Declared Per Common Share |
$ | 0.04 | $ | 0.04 | ||||
-4-
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Six-Months Ended |
||||||||
| July 31, 2004 |
August 2, 2003 |
|||||||
| (Unaudited) | ||||||||
| Net Sales |
$ | 28,232,298 | $ | 27,237,484 | ||||
| Cost of Sales |
16,518,360 | 16,371,376 | ||||||
| Gross Profit |
11,713,938 | 10,866,108 | ||||||
| Costs and Expenses: |
||||||||
| Selling, General and Administrative |
7,937,730 | 7,625,222 | ||||||
| Research and Development |
1,923,558 | 1,776,383 | ||||||
| 9,861,288 | 9,401,605 | |||||||
| Operating Income |
1,852,650 | 1,464,503 | ||||||
| Other Income (Expense): |
||||||||
| Investment Income |
198,609 | 94,964 | ||||||
| Other, Net |
(78,707 | ) | (11,237 | ) | ||||
| 119,902 | 83,727 | |||||||
| Income Before Income Taxes |
1,972,552 | 1,548,230 | ||||||
| Income Tax Benefit (Provision) |
228,197 | (232,234 | ) | |||||
| Net Income |
$ | 2,200,749 | $ | 1,315,996 | ||||
| Net Income Per Common Share: |
||||||||
| Basic |
$ | 0.42 | $ | 0.28 | ||||
| Diluted |
$ | 0.38 | $ | 0.27 | ||||
| Weighted Average Number of Common Shares Outstanding: |
||||||||
| Basic |
5,276,321 | 4,658,105 | ||||||
| Diluted |
5,834,141 | 4,856,583 | ||||||
| Dividends Declared Per Common Share |
$ | 0.08 | $ | 0.08 | ||||
-5-
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Six-Months Ended |
||||||||
| July 31, 2004 |
August 2, 2003 |
|||||||
| (Unaudited) | ||||||||
| Cash Flows from Operating Activities: |
||||||||
| Net Income |
$ | 2,200,749 | $ | 1,315,996 | ||||
| Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: |
||||||||
| Depreciation and Amortization |
603,429 | 714,998 | ||||||
| Deferred Income Taxes |
(938,917 | ) | — | |||||
| Changes in Assets and Liabilities: |
||||||||
| Accounts Receivable |
(277,260 | ) | (631,390 | ) | ||||
| Inventories |
(261,355 | ) | (803,614 | ) | ||||
| Other |
118,975 | 87,135 | ||||||
| Income Taxes Payable |
219,214 | 181,356 | ||||||
| Accounts Payable and Accrued Expenses |
(490,999 | ) | 691,286 | |||||
| Total Adjustments |
(1,026,913 | ) | 239,771 | |||||
| Net Cash Provided by Operating Activities |
1,173,836 | 1,555,767 | ||||||
| Cash Flows from Investing Activities: |
||||||||
| Proceeds from Maturities of Securities Available for Sale |
2,329,043 | 821,989 | ||||||
| Purchases of Securities Available for Sale |
(2,179,410 | ) | (1,525,216 | ) | ||||
| Additions to Property, Plant and Equipment |
(623,117 | ) | (262,127 | ) | ||||
| Net Cash Used by Investing Activities |
(473,484 | ) | (965,354 | ) | ||||
| Cash Flows from Financing Activities: |
||||||||
| Principal Payments on Capital Leases |
— | (4,483 | ) | |||||
| Proceeds from Common Shares Issued Under Employee Benefit Plans and Exercises of Stock Options |
453,066 | 266,992 | ||||||
| Shares Repurchased |
(20,105 | ) | (235,146 | ) | ||||
| Dividends Paid |
(401,997 | ) | (339,131 | ) | ||||
| Net Cash Provided (Used) by Financing Activities |
30,964 | (311,768 | ) | |||||
| Net Increase in Cash and Cash Equivalents |
731,316 | 278,645 | ||||||
| Cash and Cash Equivalents, Beginning of Period. |
4,998,643 | 3,217,035 | ||||||
| Cash and Cash Equivalents, End of Period |
$ | 5,729,959 | $ | 3,495,680 | ||||
| Supplemental Disclosures of Cash Flow Information: |
||||||||
| Cash Paid During the Period for: |
||||||||
| Income Taxes |
$ | 66,835 | $ | 50,878 | ||||
| Non-cash Transfer from Retained Earnings to Capital Stock and Additional Paid in Capital Due to the Issuance of the 10% Stock Dividend |
$ | 5,245,927 | $ | — | ||||
-6-
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 31, 2004
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) The accompanying condensed 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 consisting of normal recurring 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, 2004. Certain reclassifications have been made to conform to the current period reporting format.
(b) 10% Stock Dividend: On April 19, 2004, the Company declared a 10% stock dividend that was distributed to shareholders on May 26, 2004. An amount equal to the fair value of the additional shares was transferred from Retained Earnings to Additional Paid in Capital and Common Stock as of the declaration date. All income per share and weighted average share amounts for all periods have been restated to reflect the impact of the 10% stock dividend.
(c) Net income per common share has been computed and