WEST WARWICK – In the fiscal year ended Jan. 31, Astro-Med Inc. (Nasdaq: ALOT) saw its annual profit fall 31.23 percent to $2.96 million, from FY 2007’s $4.31 million, on revenue that dipped 0.81 percent to $71.78 million.
Earnings per diluted share fell to 40 cents, from FY 2007’s 57 cents, but still came in at the upper end of the company’s earnings guidance last month, when Astro-Med predicted earnings of 38 to 40 cents per diluted share on revenue of $71.78 million. (READ MORE)
The year-ago results included FY 2007 tax benefits of $1.18 million, or 15 cents per diluted share, related to the closing of Astro-Med’s sales and service offices in Italy and the Netherlands, which were partly offset by fourth-quarter after-tax restructuring charges of $316,000, or 4 cents per diluted share.
“During the year, we introduced four new major products, strengthened our field sales organization and formalized our acquisition strategy,” said Albert W. Ondis, the company’s CEO.
In FY 2008, Astro-Med “improved the gross profit margin to 43.3 percent, ” from the previous year’s 43.0 percent (READ MORE); “raised the operating income margin to 6.4 percent; and earned net income of approximately $3 million, or 40 cents per diluted share,” Ondis said in a March 17 statement. “In addition, the company added $4.50 million to its cash and marketable securities balance of $22.10 million, to maintain a current ratio of 6.08:1.”
Nonetheless, “as we stated in our preliminary earnings and sales statement of Feb. 18, the effects of the economic slowdown were rather broadly felt, particularly in our QuickLabel Systems product lines.” the CEO said.
Because QuickLabel serves the packaging industry, it is especially vulnerable to fluctuations in consumer demand, he said. “As retail consumers cut back on purchases in all geographic markets, sales of our label printing consumables and label printers slowed significantly. The sales decline was felt most in the United States, but our export sales were also affected.
“We also felt a rather sudden slowdown in sales of our Test & Measurement product lines, since these data recorder and telemetry products are considered capital equipment purchases,” a category on which “many businesses and organizations applied the brakes quite summarily.”
And sales in the Ruggedized Products line – “consisting principally of the special cockpit printers we make for aircraft such as the new Boeing 787, the Airbus A380, and certain models of the Boeing 747 and Boeing 777 – were negatively impacted by the well-publicized production delays at both Boeing and Airbus, [amid] the slowdown in passenger air travel.”
But the company’s Grass Technologies medical-products division gained ground last year, “as our sleep diagnostic and other neurological diagnostic and research products gathered increased acceptance from customers around the world,” Ondis said.
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For the fiscal quarter ended Jan. 31, the company posted net income of $263,000,a 80.37 percent decline from the year-ago period’s record $1.34 million, on fourth quarter sales that fell 13.79 to $15.63 million.
Earnings per diluted share fell to 4 cents from the FY 2007 fourth quarter’s 18 cents. Results for the year-ago quarter included a tax benefit of $739,000 or 10 cents per diluted share, related to the closing of Astro-Med’s sales and service offices in Italy and the Netherlands, which was partly offset by the above-mentioned after-tax restructuring charge of $316,000 or 4 cents per diluted share.
“To mitigate the effects of the business slowdown,” the company has “already instituted an austerity program,” Ondis said. “Included – and already in effect – are wage and salary freezes, layoffs and a general reduction in the working hours of most of our employees involved in production.”
Research and development will continue unabated, however, “as we believe that the development of advanced new products will promote the growth and profitability of Astro-Med,” he added.
A regular quarterly dividend of 6 cents per common share – a 20 percent increase from the FY 2007 fourth-quarter dividend of 5 cents per common share – was declared by the Astro-Med board of directors on March 5. The dividend is payable April 3 to shareholders of record on March 20.
Full-year dividends per common share rose to 24 cents per common share from the FY 2007 total of 20 cents per common share.
Astro-Med Inc. (Nasdaq: ALOT) is a maker of specialty printing, testing and measurement systems for the aviation industry and other industrial, scientific and medical applications. Additional information is available at www.Astro-MedInc.com.
