Profit falls at Astro-Med as expenses increase and currency rates hurt
By PBN Staff
WEST WARWICK – Astro-Med Inc. announced a second-quarter profit Tuesday that was “at the low end of the range” of expectations as sales for two of the company’s brands did not meet forecasts and operating expenses grew.
Astro-Med reported a profit of $323,000, or 4 cents per diluted share, in the three months ended July 31, compared with a profit of $585,000, or 8 cents per diluted share, a year earlier. Revenue rose 8.1 percent to $17.75 million.
The company saw its gross profit margin fall to 39.6 percent this quarter, compared with 42.3 percent in the same quarter last year. Additionally, operating expenses for the quarter increased 6.8 percent year-over-year.
“Results for the quarter came in at the low end of the range we were forecasting, although our QuickLabel Systems brand was a stand-out performer with sales of more than $10 million for the quarter,” said Astro-Med CEO Albert W. Ondis in a press release.
Meanwhile, sales of the company’s Grass Technologies and Test & Measurement brands did not reach company forecasts. Second-quarter sales were also affected by foreign currency exchange rates, which lowered sales by $227,000, or 1.4 percent, compared with a year earlier.
“The products of Astro-Med Inc. enter many segments of the worldwide economy where, although we continue to see resistance to capital equipment purchases, we are beginning the third quarter with a very full pipeline of active sales prospects,” Ondis continued. “As a result, we feel the balance of the year will be good, if not excellent.”
Ondis also noted that softer sales of its QuickLabel Systems are expected in the third quarter as the company prepares for a “major color printer model change.”
The specialty electronics manufacturer has $21.9 million in cash and marketable securities, and has no debt.