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AstroMed Inc. Reports Operating Results (10-Q)

December 13, 2010 | About:
10qk

10qk

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AstroMed Inc. (ALOT) filed Quarterly Report for the period ended 2010-10-30.

Astromed Inc. has a market cap of $52.98 million; its shares were traded at around $7.2 with a P/E ratio of 26.67 and P/S ratio of 0.83. The dividend yield of Astromed Inc. stocks is 3.89%. Astromed Inc. had an annual average earning growth of 6.5% over the past 5 years.ALOT is in the portfolios of Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Operating expenses for the current quarter were $6,694,000, a 9.8% increase from prior years third quarter operating expenses of $6,098,000. Specifically, selling and marketing expenses for the current quarter increased 10.2% to $4,232,000 as compared to the previous years third quarter selling and marketing expenses of $3,840,000. The increase in selling and marketing for the current quarter was primarily the result of increases in commissions and wages due to personnel additions and increased sales. The increase in sales and marketing was also due to increased travel spending. General and administrative (G&A) expenses decreased 1.5% to $1,079,000 in the third quarter of the current year as compared to prior years third quarter G&A expenses of $1,095,000. The decrease in G&A was primarily due to a decrease in banking and professional service fees as compared to prior year. Spending on research & development (R&D) in the third quarter of the current year of $1,383,000 represents an 18.9% increase compared to prior years third quarter spending of $1,163,000 primarily due to the increase in outsourced development services fees. The current quarter spending in R&D represents 7.5% of sales, an increase from the prior years third quarter level of 7.0%.

In the third quarter of the current year, the Company recognized an income tax benefit of $61,000, reflecting an effective tax rate of negative 8.4%. The current quarter tax benefit is due to the recognition of $251,000 related to the favorable resolution of a previously uncertain tax position and $150,000 related to the difference between the prior years tax provision and the actual returns as filed. This result compares to the prior years third quarter income tax expense of $353,000, reflecting an effective tax rate of 34.1%.

The Company reported $792,000 in net income for the third quarter of the current year, reflecting a return on sales of 4.3% and generating EPS of $0.11 per diluted share. Included in net income is a tax benefit of $401,000, or $0.05 per diluted share, related to the favorable resolution of a previously uncertain tax position and favorable adjustment in the filing of the prior years tax returns. On a comparative basis, prior years third quarter recognized net income of $683,000, reflecting a return on sales of 4.1% and an EPS of $0.09 per diluted share.

Operating expenses in the nine months of the current year were $19,413,000, representing a 5.3% increase from the prior year. Selling and marketing expenses for the nine months of the current year increased 7.9% from the prior year to $12,349,000 with the increase traceable primarily to wages and benefits due to personnel additions as well as higher travel and outside service spending. R&D spending for the current nine months of $3,737,000 represents a 4.8% increase as compared to prior year R&D of $3,566,000. Current year spending in R&D represents 7.0% of the current years sales compared to 7.5% of sales in the prior year. General and administrative (G&A) expenses for the nine months of the current year were $3,327,000, a 2.8% decrease from the prior year. The lower spending level for G&A in the current year is mainly attributed to the lower professional service fees.

Net income earned during the nine months of the current fiscal year was $1,545,000 reflecting a return on sales of 2.9% and generating EPS of $0.21 per diluted share. Included in net income is a tax benefit of $401,000, or $0.05 per diluted share, related to the favorable resolution of a previously uncertain tax position and favorable adjustment in the filing of the prior years tax returns. On a comparative basis, prior years third quarter year to date net income was $1,037,000 reflecting a return on sales of 2.2% and an EPS of $0.14 per diluted share.

For the nine months of the current fiscal year, sales revenues of the T&M product group were $10,964,000 representing a 2.2% decrease as compared to $11,213,000 for the same period of the previous year. The decrease in sales stems from lower sales in the recorder and data acquisition product lines as compared to the prior year. The decrease in current year to date sales was tempered by the demand for the new TMX product line, as well as increases in Ruggedized and consumables product line sales and an increase in repair revenue. For the first nine months of the current year, T&Ms segment operating profit was $910,000, resulting in an 8.3% segment operating profit margin, as compared to segment operating profit of $1,025,000 and related margin of 9.1% for the same period in the prior year. The decrease in T&Ms segment operating profit and related margin is traceable to lower sales and higher manufacturing costs due to unfavorable factory absorption, as well as higher operating expenses, specifically, research and development, in the current fiscal year.

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