AstroMed Inc. Reports Operating Results (10-Q)
Astromed Inc. has a market cap of $55 million; its shares were traded at around $7.64 with a P/E ratio of 22.5 and P/S ratio of 0.8. The dividend yield of Astromed Inc. stocks is 3.2%.ALOT is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations: Operating expenses for the current quarter were $6,244,000, relatively flat as compared to prior years first quarter operating expenses of $6,273,000. Current quarter selling and marketing expenses decreased 1.1% to $3,841,000 representing 22.5% of sales as compared to the previous years first quarter selling and marketing expenses of $3,883,000 representing 26.5% of sales. The decrease in selling and marketing for the current quarter was primarily the result of lower commissions, benefits and trade show spending, slightly offset by a increase in travel and outside service spending. General and administrative (G&A) expenses increased 1.9% to $1,184,000 in the first quarter of the current year as compared to prior years first quarter G&A expenses of $1,162,000. The increase in G&A as compared to prior year was primarily due to an increase in outside services partially offset by a decrease in professional services. Spending on research & development (R&D) in the first quarter of the current year of $1,219,000 remained approximately flat with prior years first quarter spending of $1,228,000. The current years spending in R&D represents 7.1% of sales, a decline from prior years first quarter level of 8.4%.
The Company recognized net income of $430,000 for the first quarter of the current year, reflecting a return on sales of 2.5% and generating EPS of $0.06 per diluted share. On a comparative basis, prior years first quarter recognized a net loss of $231,000 reflecting a negative return of 1.6% on sales and generating a loss of $0.03 per diluted share.
Test & Measurement sales revenue decreased 12.5% to $3,210,000 for the first quarter of the current fiscal year compared to sales of $3,669,000 for the same period in the prior year. Within the product group, the Dash, Ruggedized and Everest product lines were down from the prior year, as our industrial customers have continued to defer purchases of monitor recorders during this economic slowdown. In addition, delays in the introduction of new aircraft by the airplane manufactures, Boeing and Airbus, have slowed the pace of placing Ruggedized printers. Demand for the new TMX product line is expected to continue to grow and will have positive affects on the TMX sales volume in the months ahead. Within the product group, we did experience growth from both the consumable and service and other product lines which both reported double digit increments over the prior year. Operating expenses were lower in the quarter by 10.3% from the previous years spending level. Notwithstanding T&Ms lower sales in the first quarter, segment operating profit increased 9.5% to $301,000 resulting in a 9.4% operating profit margin as compared to prior years segment operating profit of $275,000 and related operating profit margin of 7.5%. The improvement in both segment operating profit and related margin was due to lower operating expenses and product mix.
Sales revenues from the QuickLabel Systems product group were $10,153,000 in the first quarter as compared to $7,495,000 in the same quarter of the prior year. The increase in sales is primarily due to the consumable product lines which increased $2,358,000 or 40.6% from the prior year. Within the consumable line, label and tag product lines sales made a significant contribution to the overall growth rate in consumable products, with a notable contribution from the Companys recently acquired label and tag manufacturer in North Carolina. Revenues from QuickLabels service, parts and repairs also reported a double-digit growth rate over the previous year. QuickLabels current quarter segment operating profit was $652,000 reflecting a profit margin of 6.4%, a strong increase from prior years first quarter segment profit of $132,000 and related profit margin of 1.8%.
The Companys statements of cash flows for the three months ended May 1, 2010 and May 2, 2009 are included on page 5. Net cash flows provided by operating activities were $492,000 in the current year compared to net cash provided by operating activities of $573,000 in the previous year. The declining cash flows provided in the first quarter of the current year as compared to the same period in the previous year are primarily related to the increase in accounts receivable and investment in inventory balances, as well as a decrease in accounts payable and accrued expenses. Inventory balances increased to $12,861,000 at the end of the first quarter compared to $12,039,000 at year end, while inventory days on hand decreased to 113 days at the end of the current quarter from 114 days at year end. Accounts receivable increased to $9,365,182 at the end of the first quarter as compared to $9,172,857 at year end, however, the accounts receivable collection cycle decreased to 47 days sales outstanding at the end of the quarter as compared to 49 days outstanding at year end. Offsetting the growth in both accounts receivable and inventory and the decline in accounts payables and accruals was the collection of the legal settlement of $1,495,000 in the first quarter of 2011.
The Companys cash, cash equivalents and investments, at the end of the first quarter totaled $23,674,000 relatively comparable to the $23,760,000 at year end. The slight decrease in cash from year end can be attributed to cash used for financing and investing activities including capital expenditures of $233,000 and dividends paid of $504,000 partially offset by the proceeds received from the legal settlement of $1,495,000.
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