AstroNova Inc (ALOT) 2005 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to Astro-Med Inc. fiscal 2006 first-quarter results conference call. (OPERATOR INSTRUCTIONS).

I would now like to turn the conference over to Mr. Albert Ondis, Chief Executive Officer.

Please go ahead, sir.

Thank you, Rob.

Good afternoon, everybody, and thank you all for participating in today's teleconference.

With me today as usual are Everett Pizzuti, President and Chief Operating Officer, and Joseph O'Connell, Vice President and Chief Financial Officer.

Each of us will make a presentation, and then we will take your questions.

Today's report, which crossed the wires about an hour ago, does not tell the whole story, and I hope that at the end of this teleconference you will share our optimism for the balance of the year.

In the first quarter, we received 15 million new orders with all three product groups experiencing improvements from the prior year.

While sales in the quarter were flat, I am happy to say that Grass-Telefactor continued its pattern of improvement which we believe will continue and recorded sales of $4.5 million.

Test and Measurement experienced a small decline from the prior year due to the continued slide in Aerospace telemetry.

Test and Measurement is in a transition from its long dependence on Aerospace telemetry due to the much more diversified markets with our growing portfolio of Dash portable data recording systems sold to industrial customers including power generation and transmission; steel, aluminum and paper producers; light rail transportation; automotive, medical and pharmaceutical and many others.

Of course, real growth is coming from our very successful ruggedized products including the cockpit printer and ethernet switch contract that we have with Boeing, Airbus, Panasonic and several other companies.

This business will be achieving significant volume later this year as planes such as the much touted Airbus A380 begin to go into production.

Next year and for many years to come, shipments will grow significantly.

We are attracting new contract possibilities not just for major airplanes such as the Boeing 787 and the Airbus A350 and the Airbus A400M, but also from the extensive retrofitting of existing fleets of both commercial and military aircraft which will be taking place in the future.

We are one of just three companies in the world who are capable of designing and manufacturing these high-performance systems, and we have been getting most of the recent contracts.

Certainly this is no guarantee we will continue to get all of them, but we are paying very very close attention to the needs of airplane companies meeting with them frequently both at their facilities and here at headquarters.

And our meetings with the airplane manufacturers include our people in research and development, our people in manufacturing, quality control, sales and, of course, top management.

For example, I will be visiting Airbus in Toulouse, France in early June.

That is my third visit to Airbus in the past 18 months.

We thoroughly understand the demanding need of premier customers such as Boeing and Airbus and we can deliver.

We have the people, the equipment, the facility and the necessary capital to undertake these important and very long-term contracts.

You have probably noticed that the growth of QuickLabel Systems slowed both during the fourth quarter and the first quarter of the current year.

And since QuickLabel is our most rapidly growing product group, I want to discuss what is going on there.

QuickLabel makes a complete line of color and monochrome label printers, all-digital.

Our color label printers are the most important part of our QuickLabel printer lineup.

In addition to the printers, we manufacture a very complete line of labels and thermal transfer ribbons which are the consumables, as well as a very comprehensive software package which enables the user to create beautiful color labels instantly and without printing plates.

These color labels can be produced in minutes just when they are needed.

Our printers are valuable to companies who produce all manner of products from springwater to foods to pharmaceuticals, auto tires, electric motors, novelty items and so on.

The list is endless.

Our color printers are of special value to companies who do private branding of their products to sell by others especially in the foods, nutriceuticals, beauty aids, beverage and like the like because with our digital color label printers a beautiful custom label can be instantly created to take advantage of marketing programs, new product rollouts and so on.

We, as you may know, invented the digital color label printer.

There were none until we invented the first one, and although we have encountered some competition, we are the world leaders.

Last fall we began to encounter some nominal nuisance type competition from low-cost inkjet label printers, and the reason is because they are priced very low they were attractive to our potential customers.

They are cheap because they are really simply warmed over desk computer printers.

But they print very slowly and they print only on special high cost label stock, and the ink in a inkjet printer is very costly.

In fact, labels produced by these inkjet printers can cost four to seven times more than they would cost when they are made by our printers.

In summary, you've got a low-cost printer with slow output and high label costs and high ink costs.

Sure some of these printers have been sold, but many if not most have been set-aside.

However, these inkjet printers were heavily promoted throughout the winter and early spring, and the effect of all this promotion has been a temporary slowdown in the sale of our high-performance high-end printers.

We believe the inkjet fad will soon pass.

We, of course, are on a fast-track to strengthen our hold on this important market.

And as you may recall, we announced last fall that some new models would be coming out in the new year.

In fact, we will begin shipments of another high-end color label printer in the second half of this year, and that new product will address a segment of the market which are present products do not address.

Let me summarize.

We are the strongest manufacturer of digital color label printers.

We have a broad line of printers for almost every segment of the market, and we have a complete range of the very important consumables.

And we are introducing strong new models.

We are known the world over, and we are very confident that QuickLabel will soon resume its 12 to 15% growth rate.

At this point, I'm going to ask Everett Pizzuti to make some appropriate comments on operations, and then Joseph O'Connell will give a brief financial report, following which we will take your questions.

Everett?

Thank you, Albert.

Let me just add a couple of footnotes to some of the points that you raised.

First of all, sales and orders for our Grass-Telefactor product group were higher than the trailing quarter as well as last year's first quarter, spurred by demand for sleep systems as well as our long-term epilepsy monitoring products.

We are planning to add two more of our strategically placed field salespeople domestically, and we have added some additional dealers internationally.

Our sales to countries such as South Korea, Japan, Mexico, Turkey and Russia continue to grow.

We are making inroads into Eastern Europe where we see great opportunities for the Grass-Telefactor products.

As we mentioned last time, we are now procuring for an introduction of some important new sleep products at a major tradeshow in June.

These new sleep products include ambulatory with onboard memory, wireless with Bluetooth broadcasting, and new software to enhance the productivity of the sleep labs.

With respect to QuickLabel, sales and orders for our QuickLabel products both increased from the comparable quarter of last year.

Both the 4100 Xe and the consumable drove the increase.

Our apparel segment printers sold exclusively by Avery Dennison recently went through a model change as we added a more powerful controller to speed up the processing of the new label formats to make the printers even more productive.

We see some new growth in this segment of our business.

Finally, a little bit on consumables.

As you know, each of our product groups has an important and profitable consumable.

In the case of T&M, it is chart paper for the data acquisition and cockpit printers.

For QuickLabel, it is the labels and thermal transfer ribbons for color and bar-code printers.

And for Grass-Telefactor it is electrodes, electrode cream, chart paper and certain transducers for EEG and sleep applications.

Consumables represented 45% of our sales for the quarter and increased 8% compared to the first quarter of last year.

Thank you, Everett.

Joe, Joe O'Connell, will you please give us your report?

Thank you, Albert.

Good afternoon, everybody.

Well, as you heard, Astro-Med sales in the first quarter reached $14,200,000, and that is approximately flat with the prior year's first-quarter sales of 14,243,000 and some 2 percentage points below the fourth-quarter sales of 14,500,000.

Our sales through our domestic channels reached 9.9, which is consistent with the previous year's sales through the domestic channels of 9.9 and normally ahead of the fourth-quarter sales through our domestic channels of 9.7 million.

International revenues reached 4.3 million and represent the 30% of our total revenues in the quarter.

Relative to the prior year, this quarter's international sales were lower by 1.4%, but on a -- affecting the foreign exchange impact, actual sales international are below by 5.5%.

Profiling the first-quarter sales by product group, we have QuickLabel Systems as you heard with sales of 7.1, an increase of 2% over the prior year QuickLabel Systems in the first quarter.

Although as we heard the shipments of our 4100 Xe line were up 10%, overall printer sales were down from the last year.

However, our sales of consumers and related service products were very strong and continued their growth path increasing 7% from the prior year's sales volume.

Grass-Telefactor sales reached 4.5 in the quarter and representing a 3.4% increase over the prior year's first-quarter sales.

The product lines responsible for this include as you heard the long-term monitoring systems, sleep, and the clinical markets, research products and our consumable products especially electrodes and creams.

Graphs in the Test and Measurement -- excuse me, sales of the Test and Measurement products were 2.6 in the first quarter.

This sales level was 11% behind last year and reflects the current soft demand in the Aerospace markets related to our high-end telemetry workstation recorders.

However, as you have heard also, the product lines in this particular group were also strong, including the Dash series.

We had portable recorders were up 10%, as well as the ruggedized suite of products including the printers and the tough switches which were up 22% respectively.

Gross profits in the first quarter reached 5.7.

That is 2% below last year's first-quarter results of 5.8 and provide a gross margin of 40.1% on sales.

Relative to the prior year margin of 4.7, this quarter's margin is lower by some 60 basis points and due to product mix and higher manufacturing costs.

Operating expenses in the first quarter specifically related to selling, G&A and R&D reached $5.2 million.

These expenses represent the 6% increase over the prior year and are traceable to rough funding initiatives in the field selling related to new hires, marketing related to trade shows and advertising and travel, and specifically some impact associated with foreign exchange.

Operating income as a result in the first quarter reached 516,000.

That provides a return on our sales of 3.6%.

The operating income in the first quarter of the previous year was 936,000, which has a current sales of 6.6%.

Other income in the first quarter reached 107,000.

That is a 9% improvement over last year's other income of 95,000.

Our other income is dominated by interest and dividend income related to our Company's marketable securities.

Income taxes in the first quarter were 224,000, which reflects an effective tax rate of 36%.

This quarter's provision compares to last year's income tax benefit of 567,000 which reflects the combination of an income tax provision of 372,000 as well as a 939,000 onetime non-cash benefit related to the release of the valuation allowance that was established in fiscal year 2003.

Our net income in the quarter was 399,000.

That represents a 3% return on sales and on an earnings per diluted share basis $0.07.

The corresponding period in the previous year net income was 1.6 million with a return associated of diluted -- with an earnings per share of $0.27.

On a pro forma basis, if we exclude the favorable impact of the valuation allowance, net income was 660,000 or $0.11 per diluted share.

Just to quickly go through the balance sheet here, our cash and marketable securities at the end of the quarter stood at 13.7 million.

That is 2% below the year-end balance of 14 million.

The working capital accounts of Accounts Receivable and inventories both increased from the year-end balances.

Specifically Accounts Receivable rose 6% to 9.9 million at quarter's end.

The balance represents some 58 days outstanding, up three days from the year-end DSO of 55 days.

This quarter's Accounts Receivable balances do include a $500,000 receivable from an European customer who has remitted total payment of that balance in May.

This balance represents some 3.2 days outstanding.

Inventory investments increased 5% during the quarter to 9.8 million.

This balance represents a turnover rate of three times or approximately 122 days of inventory on hand.

The Company's current liabilities rose 9% to 8.1 which represents an increase associated with our Accounts Payable related to inventory purchases.

The Company's current ratio at the end of the quarter stands at 4.6 to 1.

Capital expenditures in the quarter reached 305 and related to machinery and equipment, information technology, tools, guides and fixtures.

We paid dividends of 213,000 in the quarter at the rate of $0.04 per share.

We did a buyback during the quarter of 3 million -- sorry, 3384 shares in the open market during the first quarter.

Currently management has board authorization to purchase an additional 547,589 shares.

The book value per share at the end of the quarter was $7.30, up normally from the Company's year-end book value of $7.28.

The Company's employee population at the end of the first quarter stands at 365 employees with our sales per employee at 156,000, which is slightly lower than the prior year sales per employee of 158,000.

That concludes the financial report, Albert.

Thank you.

Rob, I think we're ready to take questions now, please.

(OPERATOR INSTRUCTIONS).

Jim Gentrup, Provident Equity Research.

The competition that you mentioned in the QLS segment, in the printer segment, could you give us -- is this coming from one competitor, or is this a number of competitors rolling out just options or --?

It is primarily one.

Okay.

And so you are attributing the slower growth to this one competitor coming out?

Attracting the attention of people who are prepared to buy our product because the price differential is very substantial.

And where do you see this beginning to change again?

I mean when and why?

Well, I thought I indicated that we already see it turning back in our direction, and the reason that it was turning back is because the inkjet printer is so slow and the cost per label is so many times higher than the cost per label of our printer.

Albert, to your knowledge were they promoting this through the same industry publication that you used, or were they doing telesales?

How are they promoting this heavily?

Promoting it heavily through advertising in the same publications that we use and by participating in the same trade shows that we attended.

They basically just followed our lead when it comes to promotion.

And were do you think they were taking most of the sales from, the 4100, the 8100 or --?

4100, yes.

All right and then on the Aerospace business, can you give us a little more detail also on what is happening here?

I know there's obviously weakness for the past couple of quarters.

This is mostly with the Everest shipments, correct?

Yes, yes.

This weakness that you have seen, do you expect this -- obviously it's very promising here because of the printers you know towards the second half of the year.

But what about the Everest orders?

Are people just delaying these?

Are they pushing these out?

Or is that new order account that you are giving us is that actually just orders being pushed back or --?

No.

We are attempting to say that the Aerospace telemetry market is continuing to decline.

We do not see that it will ever return to its prior glory.

That business is being replaced by us through the sale of our Dash products which are portable instruments sold through a very wide range of customers, whereas the Everest, which was aimed squarely at the Aerospace telemetry market, had in effect a narrow but fairly deep market potential.

The Dash products, which are priced at approximately half the selling price of the Everest, have a much broader appeal to a wide range of customers.

So we do not see the Aerospace telemetry business recovering.

It will never go away completely, but it will never be a major segment of our business.

Instead, our T&M business will rely on this growing family of Dash products plus the ruggedized product which we sell.

These are airborne products whereas the telemetry products are basically ground-based, not entirely but they are mainly ground-based, and they used during the development of airplanes, whereas the ruggedized product, the cockpit printer and the ethernet switches are used constantly during flight.

They are requirements of the flight system, and they will be constantly flying and every printer, every plane will be installed with one or more of these devices.

Okay.

Were your orders by the way -- were your orders -- did you receive more towards the back-end like the I guess the last month, the last few weeks did you see a pickup toward the end?

I don't remember.

For which product group?

Normally that is the trend there, Jim.

We did see -- normally we would because if we are in a 445 basis, so we obviously in the five weeks we pickup more orders than we do in the first two.

Okay.

I guess that question I guess would have to be answered for each -- I realized after I said that, that would probably be for each product group I guess.

But is that -- is that a normal trend, though?

Is that a normal pattern that you get more towards the end of the quarter or no?

Well, because the last month of the quarter is a five-week month, if you're looking to know whether that is an indicator of the trend of the business, we feel that since our new orders were up significantly above actual sales it certainly is an indicator of the trend of the business.

All right.

You had mentioned, Albert, in your prepared remarks about a new product in the QLS division towards the -- we will be shipping in the second half, and you said it will be addressing a new segment of the market.

I wondered if you could give us a little more detail on what segment of the market you are referring to?

Well, we're going to be introducing that product in about three weeks at a major tradeshow at the Jacobs Javits Convention Center in New York.

At the time we announce it and show it, we are going to make a complete disclosure.

But at this point, I would rather not feel the thunder from the marketing people who have planned a nice interesting rollout.

It will just be about three weeks, but shipments will not begin until after the second quarter ends.

All right.

I will let somebody else jump in, guys.

Thank you very much.

Brian Kowalchyk, WestPark Capital.

Can you maybe help us understand to try and size the market opportunity that you're trying to address.

I think in the past you have given some statistics as to the contract opportunities that you guys are pursuing.

And remind us what that might be and how it is divided?

You are referring to the ruggedized product?

For the ruggedized partners.

Yes, I'm sorry.

Yes.

I think --

Well, at our last teleconference, Brian, we mentioned it was 150 million over the next 10 years or so.

And so that is comprised of both the commercial and the military applications.

That is the same number that we mentioned in our conference in March.

It is okay.

I just wanted to make sure that that number had not changed much.

No, it has not changed.

In fact, generally it is probably going to go up somewhere in the mix of a number of new proposals that we are negotiating that may develop a little later in the quarter, and that would certainly expand that number.

But right now that number is the same as we quoted in March.

Very good and can you also help me understand a little bit about the cabinet printer contract, which I think was probably snuck under the radar screen of most people and probably released with little fanfare.

Help me understand the potential size of that contract relative to the contract which everybody got excited about which was the cockpit printer.

Right.

The cabin printer that we announced for the A380, the contract that we have with Panasonic -- Panasonic is a major supplier of the in flight entertainment system of most commercial aircraft.

And so typically of the in flight cabin, one to three cockpit-type printers would be used.

So it is the same printer that we are using in the cockpit, except it is in the cabin, so it's not a different printer.

It is the same printer.

So in the case of the A380, there are two used in the cockpit of every plane, and then there will be one to three used in the cabin of every 380.

Now that same ratio may or may not apply to other planes such as the 787.

Sorry, you kind of jumped ahead of me there, but that is where I was going next.

Are there other opportunities to pursue cabin printers with Panasonic beyond the 380, and I guess by your answer, you are considering that?

Absolutely correct.

That is correct.

And these printers carry similar average sales prices and margins I would assume as the cockpit printers?

Yes, they are essentially the same printer.

Maybe the only difference is maybe we have maybe a different source or a different connector, but the basic printer is the same.

So that is an advantage also to the manufacturer of the aircraft because they have the same parts and training curves for the printers both in the cabin as well as in the cockpit.

Very good.

I thought in the back of my mind that the cabin printer market might be the same market opportunity as the cockpit printer.

It is good to hear you confirm that for me.

Yes, that was correct.

Very good.

Help me understand where we are a little bit with the status of the big Boeing bid?

RFP has been submitted or the bid has been submitted?

Where are you there?

Yes, bids have been submitted with Honeywell who is the signed contractor on that aircraft for Boeing, and we are currently in negotiations so we cannot say anything more than that.

We would anticipate that a decision will be made sometime in June.

Do you know if the competitive landscape is pretty much the partners that we all know, or are there any new players in there?

No, as far as we know, the competitive landscape is exactly the three players that we have in mind, ourselves and two others.

Very good.

Thanks for the update.

Look forward to hearing from you guys at the end of June.

Sam Robasky (ph), SCRS Debt Management (ph).

The projection you had as far as the Needham conference, as far as your sales etc., where were we at and where are we relative to our sales projections for the current year with new products, etc.?

Well, with respect to new products, we are probably right where we thought we would be.

But total sales are slightly below where we thought they would be.

But we -- at this point,Sam, we're not going to comment any further on the guidance we gave at that conference.

So at the end of the second quarter, we will give you a complete recap on how we see the rest of the year rolling out.

Certainly our new products, new product introductions, are probably a little ahead of where we thought we would be.

So in essence the previous products were not keeping up with your projections, but you have additional products that may come on stream that may permit you to catch up, but until you sort of get some kind of responses from your bids, you're really not sure I guess?

That is exactly right, exactly right.

Okay.

It's a difficult business to be in when you're dependent on so many different people I guess.

Your R&D you have been using outside sources for the R&D.

Isn't that the same as you have been doing your --?

No, it is all in-house.

It is all in-house?

All in-house.

You're not doing any contract research outside?

No, we're not.

We have about 36 engineers and scientists on our payroll right now, and we have them all actively working on new products.

I think that two things happened in the first quarter which are worth commenting on.

One is that the Everest, which is the product sold to the Aerospace telemetry market, is declining a little more rapidly than we thought it would.

So we saw a little shortfall there.

Secondly, as I mentioned, the QuickLabel printer group encountered some nuisance type inkjet printer competition which simply slowed down the process.

But we are confident that we will overcome that, are overcoming that.

But all things considered the new products that we are launching, which certainly include the ruggedized products, are significantly ahead of where we thought they would be at this point in terms of incoming orders.

That is good.

You mentioned that consumes were up by 8% and were about 45% in the current quarter.

Is that your expectation going forward, or what is your thoughts on consumables for the rest of the year?

I believe that the consumables may grow at a slightly higher -- 8% growth in the first quarter, we think that is kind of low.

We think that -- I'm shooting from the hip now, but I believe that we anticipate our consumables should grow in the range of 12 to 15%.

And your profit margins on the consumables are higher?

They are not.

They are not?

No.

They range because there are quite a few consumables, but on balance they are slightly slightly lower than our instruments, but not materially lower.

Well, good luck.

Hopefully you'll get these contracts that you are bidding on.

Thank you, Sam.

Evan Greensburg (ph), Lynnebird Capital (ph).

I wanted to get an idea on the backlog of 15 million.

Was -- is that all shippable next quarter?

Excuse me (multiple speakers) backlog.

The 15 is the bookings.

Right, the bookings, okay.

Some of that has been -- the actual backlog is about 4 million.

Okay.

Now the booking number, what was that up from?

We had actually done about 14.1 in the fourth quarter, and it is up over last year -- it is about almost 4%.

Last year for the first quarter we did 14 -- we did a 14.5.

Now I would assume that much of that comes from -- first of all, I'm glad to see sales recovering in Grass-Telefactor, which if you go on based on this quarter, you probably end up with the $18.5 million range on Grass-Telefactor.

Yes, that is right.

Which is good news considering if we can get it back to 20, we will all be thrilled.

I would assume a lot of these new -- a lot of the new bookings are coming from the T&M side and coming from the new cockpit printers.

Is that a fair assumption, or is it too early for those bookings right now?

No, that is a reasonable assumption.

We also have substantial new orders from, of course, QuickLabel and Grass.

But certainly the cockpit printers are important.

They are important in our new order scheme during the first quarter.

Was it the first quarter you saw substantial numbers from that area?

Yes.

I believe -- was the first quarter the first quarter that we -- (multiple speakers)?

Well, for new orders?

Yes.

Well, no, because the Airbus A380 contract, which we got over a year ago, was the first major order in the commercial field.

Then the Panasonic order, which we got in the first quarter, was the first one --

Quite substantial.

But you did not disclose the dollar amount on that order.

No, we are prohibited from doing that due to the confidentiality clauses in the contract.

Okay.

If I can add, the T&M business was very strong for the first quarter relative to the fourth quarter.

The bookings in the first quarter were 3.3, up from 2.4 in the fourth quarter.

So it was a reasonably strong quarter for us in T&M business.

Okay.

Could we assume the next quarter we have got a more robust outlook than we did for this quarter?

Is that a fair assumption?

Yes, it is.

(OPERATOR INSTRUCTIONS).

Jim Gentrup, Provident Equity Research.

Gentlemen, could I go back to the consumable growth again just regarding the QLS, the 7% number that you gave us?

That was for the QLS.

I just wanted to ask, obviously part of that slowdown was due to fewer new printer sales, but is there anything else that attributed to the lack of the double-digit?

Because usually your Q1 is a pretty -- historically it has been pretty strong as far as replacement of the consumables.

So was there anything else that we could take away from there why it was under double-digits?

No, I don't see -- there is nothing significant -- nothing significant happens.

Just the timing of orders is about all that we can say accounted for it.

And actually the bookings in the first quarter actually are double-digit, so we're very pleased with the consumable business.

It is from an order rate we continue to see pretty much as you say as you indicated that double-digit profile for the consumables.

Okay.

So this mainly is just a timing issue?

It could very well be.

Okay.

So the key (inaudible) sounds like it's going to go back to the normal growth?

Yes.

Okay.

And then on the expense side, SG&A was up about 8%, a little over 8%, and I imagine you're still seeing some impact from new salespeople.

Should we expect that kind of an increase year-over-year as we go over that or go away a little bit as we go through --?

Some of those folks came on board later in the year.

You will start to normalize it a little bit, but I think the run-rate is probably consistent to what you're looking at.

The run-rate is -- okay -- all right.

And how about on the R&D side?

It looks like it's pretty flat over last year.

Should we expect some more of that as well, or do you have other things in the pipeline that will increase it or decrease it?

It will probably increase slightly this year.

We are continuing to put new products into development, and we are tooling them as we go and roll out our introductions.

We're going into fairly sophisticated tooling and testing.

So we're doing the job far more conservatively and far more thoroughly than we ever did in the past.

And on the Grass-Telefactor side, the sales, the rebound there, can you attribute that more to just a rebound in the cyclicality of the orders coming from the hospitals or especially for the long-term monitoring, or is that due to better market coverage because I know you added some salespeople there?

Definitely due to the better market coverage and to the impact of some new products.

Just a combination of exciting new products and stronger domestic, as well as international distribution.

And, Joe, just to confirm, the 9.9 million of Accounts Receivable, that was a 6.6% increase.

What was the percent increase?

That is correct.

The AR is up -- that is correct.

Okay.

It is up actually -- roughly it is exactly right.

It is up 6%, actually even -- 6% even, Jim.

6% even.

All right.

Thank you very much.

At this time, we have no further questions in queue.

I would like to turn the conference back to management for any concluding comments.

Please go ahead.

I think that we have covered most of the questions that were raised, and at this point, I'm going to ask Joe to read an important little essay for us.

Joe?

Thank you, Albert.

Of course, this is (inaudible) Safe Harbor statement.

It says, during this conference call we may have made forward-looking statements within the meaning of the Securities Exchange Act of 1934.

These statements are based on the Company's present expectations and beliefs concerning the future events and are not necessarily based on certain assumptions which are subject to risks and uncertainties.

Actual results may differ materially from those discussed here.

More information on these risk factors is included in the Company's filings with the Securities and Exchange Commission.

Thank you very much, Joe, and thank you all for participating.

We will be talking to you again in August if not sooner.

Thank you and good night.

And, ladies and gentlemen, that does conclude Astro-Med Inc. fiscal 2006 first-quarter results conference.

Thank you again for your participation on today's conference, and you may now disconnect.