UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

For the quarterly period ended OctoberApril 30, 20042005

OR

For the transition period from            to            

Commission file number 0-13200

Astro-Med, Inc.

(Exact name of registrant as specified in its charter)

(401) 828-4000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x.    No  ¨.

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act)    Yes  ¨.    No  x.

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, $.05 Par Value – 5,298,6395,275,723 shares (excluding

(excluding treasury shares) as of December 6, 2004May 31, 2005

ASTRO-MED, INC.

INDEX

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Part I. FINANCIAL INFORMATION

ASTRO-MED, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

See notes to condensed consolidated financial statements.

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ASTRO-MED, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

See notes to condensed consolidated financial statements.

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ASTRO-MED, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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ASTRO-MED, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

-6-See notes to condensed consolidated financial statements.

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ASTRO-MED, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OctoberApril 30, 20042005

NOTENote 1 –- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) The accompanying condensed financial statements have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission, and reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair statement of the results of the interim periods presented. These financial statements do not include all disclosures associated with annual financial statements and, accordingly, should be read in conjunction with footnotes contained in the Company’s annual report on Form 10-K for the year ended January 31, 2004. Certain reclassifications have been made to conform to the current period reporting format.2005.

(b) 10% Stock Dividend: On April 19, 2004, the Company declared a 10% stock dividend to shareholders of record on May 4, 2004 that was distributed to shareholders on May 26, 2004. An amount equal to the fair value of the additional shares was transferred from Retained Earnings to Additional Paid in Capital and Common Stock as of the declaration date. All income per share and weighted average share amounts for all periods have been restated to reflect the impact of the 10% stock dividend.

(c) Net Income Per Share: Net income per common share has been computed and presented pursuant to the provisions of Statement of Financial Accounting Standards (SFAS) No. 128, Earnings“Earnings Per Share.Share”. Net income per share is based on the weighted average number of shares outstanding during the period. Net income per share assuming dilution is based on the weighted average number of shares and, if dilutive, common equivalent shares for stock options outstanding during the period.

For the three-months ended OctoberApril 30, 2005 and May 1, 2004, the diluted per share amounts do not reflect options outstanding of 251,350. These outstanding options were not included in the weighted average common shares outstanding because the exercise price of the option was greater than the average market price. For the three-months ended November 1, 2003, all options outstanding were reflected in the per share amounts.

For the nine-months ended October 30, 2004239,800 and November 1, 2003, respectively, the diluted per share amounts do not reflect options outstanding of 251,350 and 880,030,3,300, respectively. These outstanding options were not included in the weighted average common shares outstanding because the exercise price of the option was greater than the average market price or their effect was anti-dilutive.of the underlying stock during the periods presented.

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ASTRO-MED, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

October 30, 2004(continued)

We follow(d) Stock-Based Compensation: The Company follows Accounting Principles Board Opinion (APB) No. 25, “Accounting for Stock Issued to Employees” and related Interpretationsinterpretations in accounting for our stock-based compensation plans and we have elected to continue to use the intrinsic value-based method to account for stock option grants. We haveThe Company has adopted the disclosure-only provisions of Statement of Financial Accounting StandardsSFAS No. 148, “ Accounting“Accounting for Stock-BasedStock Based Compensation – Transition and Disclosure,”Disclosure”, an amendment of Statement of Financial Accounting StandardsSFAS No. 123. Accordingly, no compensation expense has been recognized for our stock-based compensation plans.

The fair value of each option granted was estimated on the grant date using the Black-Scholes option-pricing model.

In December 2004, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 123 (Revised 2004), “Share-Based Payment” (“SFAS No. 123-R”) which replaces SFAS No. 123, “Accounting for Stock-Based Compensation” (“SFAS No. 123”) and superceded APB No. 25. SFAS No. 123-R requires companies to measure compensation costs for share-based payments to employees, including stock options, at fair value and expense such compensation over the service period beginning with the first interim or annual period after June 15, 2005. In April 2005, the Securities and Exchange Commission delayed the transition date for companies to the first fiscal year beginning after June 15, 2005, effectively delaying the Company’s required adoption until the first quarter of fiscal 2007. The Company is evaluating the requirements of SFAS No. 123-R and has not yet determined the method of adoption of SFAS No. 123-R, nor the effect that SFAS No. 123-R will have on its financial position and results of operations.

(c)(e) Revenue Recognition:The majority of the Company’s product sales are recorded at the time of shipment, when legal title has transferred and risk of loss passes to the customer, when persuasive evidence of an arrangement exists, the seller’s price to the buyer is fixed or determinable and collectibility is reasonably assured. Provisions are made atassured in accordance with the time the related revenue is recognized for the cost of any installation or training obligations.requirements in Staff Accounting Bulletin (“SAB”) 104, “Revenue Recognition in Financial Statements.” When a sale arrangement involves training or installation, the deliverables in the arrangement are evaluated to determine whether they represent separate units of accounting.accounting in accordance with SAB 104 and EITF 00-21, “Revenue Arrangements With Multiple Deliverables”. This evaluation occurs at inception of the arrangement and as each item in the arrangement is delivered. The total fee from the arrangement is allocated to each unit of accounting based on its relative fair value. Fair value for each element is established generally based on the sales price charged when the same or similar element is sold separately. Revenue is recognized when revenue recognition criteria for each unit of accounting are met. When other significant obligations remain after products are delivered, revenue is recognized only after such obligations are fulfilled. All of the Company’s equipment contains embedded operating systems and data management software which is included in the purchase price of the equipment. The software is deemed incidental to the system as a whole as it is not sold separately or marketed separately and its production costs are minor as compared to those of the hardware system. Returns and customer credits are infrequent and are recorded as a reduction to sales. Rights of return are not included in sales arrangements. Revenue associated with products that contain specific customer acceptance criteria is not recognized before the customer acceptance criteria are satisfied. Discounts from list prices are recorded as a reduction to sales. Amounts billed to customers for shipping and handling fees are included in sales.

NOTENote 2 –- COMPREHENSIVE INCOME

The Company’s total comprehensive income is as follows:

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ASTRO-MED, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

October 30, 2004(continued)

NOTENote 3 –- INVENTORIES

Inventories net of reserves are stated at the lower of cost (first-in, first-out) or market and include material, labor and manufacturing overhead. The components of inventories were as follows:

NOTENote 4 –- INCOME TAXES

An income tax expense of $29,000 and $159,000 were$224,124 was recorded forin the three-months ending October 30, 2004 and November 1, 2003, respectively. Thefirst quarter of the current year which is equal to an effective tax rate for the three-months ending October 30, 2004 and November 1, 2003 wereof 36% and 15%, respectively. For the nine-months ending October 30, 2004, a $199,000. This compares to an income tax benefit was incurred as a resultof $567,102 in the first quarter of the recording ofprior year. The prior year income tax benefit includes 1) an income tax expense on the current year’squarter’s income of $740,000$372,000 which is equal to an effective rate of 36% and 2) a $939,000 one-time non-cash tax benefit recorded in the first quarter of the current fiscal year related to the release of the valuation allowance on the net deferred tax asset that was established in fiscal year 2003. In fiscal year 2003, as required by SFAS 109 “Accounting for Income Taxes”, the Company established a full valuation allowance on its net deferred tax asset as a result of the uncertainty as to whether these deferred tax assets would “more likely than not” be realized in the future. Based on the facts and circumstances at that time, it was determined that a full valuation allowance was required and it was stated that until an appropriate level of profitability could be sustained no tax benefits would be realized. As of the first quarter of fiscal year 2005, Management believesbelieved that an appropriate level of profitability has been established and maintained and it is more likely than not the deferred tax assets will be realized in the future. Management made this determination based on a review of the facts and circumstances as of May 1, 2004. This review consisted of an analysis of the Company’s performance, the market environment in which the Company currently operates, the length of carryforward periods, the existing sales backlog and the future sales projections.

For the nine months ending November 1, 2003, an income tax expense of $391,000 was recorded which equaled a 15% effective tax rate. The effective tax rate for the nine-months ending November 1, 2003 reflected the favorable impact of the net operating loss carryforward and the utilization of certain other deferred tax assets which were fully reserved. The effective income tax rates used in the interim condensed financial statements are estimates of the full year’s rates.

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ASTRO-MED, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

October 30, 2004

NOTENote 5 –- SEGMENT INFORMATION

Summarized below areThe Company reports three reporting segments consistent with its sales product groups: Test & Measurement (T&M); QuickLabel Systems (QuickLabel) and Grass-Telefactor (G-T). The Company evaluates segment performance based on the salessegment profit (loss) before corporate and segment operating profit for each reporting segment for three-months ended October 30, 2004 and November 1, 2003:financial administration expenses.

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ASTRO-MED, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Summarized below are the sales and segment operating profit (loss) for each reporting segment for the nine-monthsthree-months ended OctoberApril 30, 20042005 and NovemberMay 1, 2003:2004.

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ASTRO-MED, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTENote 6 – PRODUCT WARRANTY LIABILITY

Changes in the Company’s product warranty liability during the period ending Octoberquarters ended April 30, 20042005 and NovemberMay 1, 2003,2004, respectively are as follows:

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ASTRO-MED, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Business Overview

This section should be read in conjunction with the Condensed Consolidated Financial Statements of the Company included elsewhere herein and the Company’s January 31, 20042005 Form 10-K.

Astro-Med, Inc. is a multi-national enterprise, which designs, develops, manufactures, distributes and services a broad range of products that acquire, store, analyze and present data in multiple formats. The Company organizes its structure around a core set of competencies, including research and development, manufacturing, service, marketing and distribution. It markets and sells its products and services through the following three business segments:segments including:

The Company’s Test and& Measurement Product Group (T&M) representsproducts are a suitecomprehensive line of telemetry recorder products sold todata recording instruments for the aerospace, automotive, pulp and defense industries,paper, metal mill, transportation and manufacturing industries. These recording solutions provide customers with a complete record of their data, whether they are troubleshooting a process, performing preventative maintenance or gathering mission critical data. The ruggedized products include printers and Ethernet switches designed to withstand the rigors of airborne and other military applications.

The Company’s QuickLabel Systems (QuickLabel) product group provides a complete system for producing “the labels that you want when you need them.” QuickLabel’s flagship products, the digital color label printers, and its line of entry-level barcode/single-color digital label printers, are used by manufacturers and producers to print short runs of custom labels in-house. QuickLabel’s printing supplies and label creation software are integral parts of the printing system that enhance output quality and user experience. QuickLabel’s digital label printers also generate revenue through label, tag and thermal transfer ribbon consumable sales. QuickLabel engineers and manufactures certain unique printing supplies especially for use in optimizing the performance of the QuickLabel brand of digital printers, as well as portable data acquisition recorders, which offer diagnosticin the use of all other major brands of desktop and test functions to a wide range of manufacturers, including paper, energy, automotive and steel fabrication.

QuickLabel Systems Product Group (QLS) offers hardware, software and media products that create digital images, store the images and present the images in color or non-color formats on a broad range of media substrates.tabletop printers.

Grass-Telefactor Product Group (G-T) encompasses diagnostic and monitoring products that serve the clinical neurophysiology markets as well asproduct group offers a range of biomedical instrumentation products and supplies focused on the life sciences markets.for clinical and biomedical research applications. The clinical product line includes in-lab, in-hospital, and ambulatory integrated systems for clinical EEG and PSG, epilepsy diagnosis and surgery, critical care and intraoperative neuromonitoring. These products offer a variety of features including networking, database and report generation capabilities in addition to powerful data acquisition and analysis tools.

The Company markets and sells its products and services globally through a diverse distribution structure of sales personnel, manufacturing representatives and dealers that deliver a full complement of branded products and services to customers in our several markets.

In the first nine-months of fiscal year 2005, the Company’s sales were approximately flat with last year. The T&M product group’s sales decline is a result of declining Everest sales resulting from the shift in defense spending from research to armaments. QuickLabel’s customers continued to respond positively to color printer systems as an effective solution to product identification, product control (barcode) and product promotion (color) needs. The Grass-Telefactor product group sales were impacted by seasonal delays of clinical and research product purchases in the third quarter of the current fiscal year.

Results of Operations

Three-Months Ending OctoberApril 30, 20042005 vs. Three-Months Ending NovemberMay 1, 20032004

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ASTRO-MED, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Results of Operations (continued):(Continued)

Three-Months Ending OctoberApril 30, 20042005 vs. Three-Months Ending NovemberMay 1, 20032004

Sales revenue in the first quarter were $14,193,000, comparable to the prior year’s first quarter sales revenue of $14,242,000. The Company’s sales in its QuickLabel Systems and G-T product groups reported nominal increments, whereas sales from the T&M product group were down 11% from the previous year’s first quarter sales. Sales through the Company’s channels of distribution were mixed with domestic sales being flat with the prior year, while international sales were down 1.4% from the prior year. However, excluding the $180,000 favorable impact of foreign exchange rates, international sales decreased 5.5%.

Hardware sales in the quarter were $13,246,000, down approximately 8%$6,394,000 reflecting a 9.5% decrease from the prior year’s third quarterhardware sales of $14,386,000. Domestic$7,069,000. The decrease from the prior year is traceable to a decline in first quarter shipments of the T&M product group’s Everest product. Sales of these high end telemetry workstation recorders were off as new orders from aerospace customers were weak due to funding constraints. Other hardware products that contributed to the lower volume include G-T EEG sales, were $9,459,000, down 12% from $10,719,000 for$184,000 due to pricing pressures and monochrome printer sales off $180,000 due to a blanket shipment of monochrome printers to an international customer reported in the thirdfirst quarter of the prior fiscal year. Sales throughNotwithstanding the volume of overall hardware sales, the Company’s international channelshardware shipments were $3,786,000,bolstered by unit volume for the QLS 4100XE color printer line, up 3% over previous10%, G-T sleep and epilepsy product offerings, up 9%, as well the T&M product group’s Dash series of portable recorder products up 10%.

The Company’s consumable sales continue to grow with the first quarter volume reaching $6,354,000, reflecting an increase of 8.4% from the prior year. The product lines driving the growth include the QuickLabel media products of color ribbons and labels, up 6.6% and G-T product group’s suite of supplies, up 36.6% from the prior year.

Sales of the Company’s service related-products in the quarter were $1,446,000, increasing 10% from the prior year’s third quarter sales of $3,669,000as demand for the Company’s service contracts, parts and related primarilyrepair services continue to the change in foreign exchange rates.be strong.

Gross profit dollars were $5,152,000$5,689,000, which generated a margin yield of 38.8%40.1% for the quarter as compared to a margin yield in last year’s third quarteryear of 41.1%40.7%. This quarter’sThe decline in the gross profit percentage can be attributed to productmargin was an outgrowth of sales mix and lower manufacturing overhead absorption rates.associated with flat sales.

Operating expenses were $5,172,000 for the quarter in the current fiscal year compared to $4,859,000 for the same quarter in the previous fiscal year. Selling expenses increased 9.6% from the prior year as a result of additional direct field selling expense in our QuickLabel product group and the approximately $60,000 unfavorable foreign exchange rate impact on our foreign office expenses. G&A was essentially flat with the prior year. Research and development spending was also flat with the prior year. Operating income margins in the quarter were $5,145,000. Selling and general administrative (SGA) spending increased 4% from last year to $4,076,000 as a result3.6% which was 300 basis points behind the operating income margin of increased personnel costs from6.6% reported in the addition of field sales staff and foreign exchange conversion rates. Research & Development spending increased 12% from last year to $1,069,000. The increase in research & development spending can be attributed to an increase in personnel and project spending.prior year.

An income tax expense of $29,000 and $159,000$224,124 was recorded for the three-months ending October 30, 2004 and November 1, 2003, respectively. The effective tax rate for the three-months ending October 30, 2004 and November 1, 2003 was 36% and 15%, respectively. The effective tax rate for the three-months ending November 1, 2003 reflected the favorable impact of a net operating loss carryforward and the utilization of certain other deferred tax assets which were fully reserved.

The Company reports three reporting segments consistent with its sales product groups: Test & Measurement (T&M), QuickLabel Systems (QLS) and Grass-Telefactor (G-T). The Company evaluates segment performance based on the segment profit (loss) before corporate and financial administration expenses.

Summarized below are the sales and segment operating profit for each reporting segment for three-months ended October 30, 2004 and November 1, 2003:

T&M’s sales were $2,554,000, down 24% from the $3,380,000 in the thirdfirst quarter of the previous year. This decrease in T&M’s sales can be attributed to delays in Everest Telemetry Workstation orders tempered by increases in Dash 18 and Dash 8X Recorder sales. T&M’s segment operating profit declined from the previous year as result of lower gross profit margins due to sales mix and under absorption rates in manufacturing.

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ASTRO-MED, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Results of Operations (continued):

Three-Months Ending October 30, 2004 vs. Three-Months Ending November 1, 2003

QLS’s sales increased to $6,931,000, a 12% increase over the $6,210,000 of sales reported in the third quarter of the previous year. Printer and media sales increased 5% and 15%, respectively. However, growth through the domestic channels was up 17% and 13%, respectively. This increase in QLS’s printer sales can be attributed to the sales generated from the 4100Xe and the 8100Xe printers. QLS’s third quarter segment operating profit margin improved to 10% up from 9% in the previous year. The increase in margin is attributed to the higher sales volume and lower manufacturing costs.

G-T sales in the quarter were $3,761,000, down 21% from $4,796,000 reported in the third quarter of the previous year. The lower sales are traceable to lower Long-term Epilepsy Monitoring (LTM) sales, as well as other clinical and research instrumentation product sales. However, this segment’s Comet EEG and PSG products, as well as Auro EEG products all reported sales growth. The G-T segment operating profit margin decreased to 6% in the third quarter from 14% in the previous year. The decrease can be attributed to the lower sales.

Nine-Months Ending October 30, 2004 vs. Nine-Months Ending November 1, 2003

Sales for the first nine-months of the current year were $41,478,000, approximately flat with $41,623,000 fromwhich is equal to an effective tax rate of 36%. This compares to an income tax benefit of $567,102 in the first nine-monthsquarter of the prior year. Domestic sales were $29,142,000, down 2% from $29,810,000 for the nine-months of theThe prior fiscal year. Sales through the Company’s international channels were $12,334,000, up 4% over previous year’s nine-months sales of $11,814,000. Excluding the favorable impact of foreign exchange rates, international sales were down 2% from the prior year.

Gross profit dollars were $16,866,000, which generated a margin yield of 40.6% for the nine-months of the current year as compared to a margin yield for the first nine-months of last year of 40.3%. The higher margin percentage for the first nine-months of this year can be attributed to the change in sales mix, the completion and delivery on a non-recurring engineering development contract and lower manufacturing costs.

Operating expenses for the nine-months were $15,006,000. Selling and general administrative spending was up 4% from last year to $12,014,000. The increase in selling and general administrative spending can be attributed to the increase in field sales personnel costs and increases in advertising expenses. Research and development funding increased 9% from the prior year to $2,993,000. This increase can be attributed primarily to the increase in personnel costs.

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ASTRO-MED, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Results of Operations (continued):

Nine-Months Ending October 30, 2004 vs. Nine-Months Ending November 1, 2003

For the nine-months ending October 30, 2004, a $199,000 income tax benefit was incurred as a result ofincludes 1) an income tax expense on the current year’squarter’s income of $740,000$372,000 which is equal to an effective tax rate of 36% and 2) a $939,000 one-time non-cash tax benefit recorded in the first quarter of the current fiscal year related to the release of the valuation allowance on the net deferred tax asset that was established in fiscal year 2003. In fiscal year 2003, as required by SFAS 109 “Accounting for Income Taxes”, the Company established a full valuation allowance on its net deferred tax assetassets as a result of the uncertainty as to whether these deferred tax assetsasset would “more likely than not” be realized in the future. Based on the facts and circumstances at that time, it was determined that a full valuation allowance was required and it was stated that until an appropriate level of profitability could be sustained no tax benefits would be realized. As of the first quarter of fiscal year 2005, Management believesbelieved that an appropriate level of profitability has been established and maintained and it is more likely than not the deferred tax assets will be realized in the future. Management made this determination based on a review of the facts and circumstances as of May 1, 2004. This review consisted of an analysis of the Company’s performance, the market environment in which the Company currently operates, the length of carryforward periods, the existing sales backlog and the future sales projections.

For the nine months ending November 1, 2003, an income tax expense of $391,000 was recorded which equaled a 15% effective tax rate. The effective tax rate for the nine-months ending November 1, 2003 reflected the favorable impact of the net operating loss carryforward and the utilization of certain other deferred tax assets which were fully reserved. The effective income tax rates used in the interim condensed financial statements are estimates of the full year’s rates.

Net income in the first quarter was $399,000, reflecting a 2.8% return on sales and an EPS of $0.07 per diluted share. For the comparable period in the previous year, net income was $1,598,000, reflecting an 11.2% return on sales and an EPS of $0.27 per diluted share. The prior year net income includes a $939,000, or $0.16 per diluted share one-time, non-cash tax benefit related to the release of the valuation allowance on the net deferred tax assets that was established in fiscal 2003.

The Company reports three reporting segments consistent with its sales product groups: Test & Measurement (T&M); QuickLabel Systems (QLS)(QuickLabel) and Grass-Telefactor (G-T). The Company evaluates segment performance based on the segment profit (loss) before corporate and financial administration expenses.

Summarized below are the sales and segment operating profit (loss) for each reporting segment for the nine-months ended October 30, 2004 and November 1, 2003:

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ASTRO-MED, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Results of Operations (continued):(Continued)

Nine-MonthsThree-Months Ending OctoberApril 30, 20042005 vs. Nine-MonthsThree-Months Ending NovemberMay 1, 2003 (Continued)2004

Summarized below are the sales and segment operating profit (loss) for each reporting segment.

Test & Measurement

T&M’s product&M sales were $8,135,000, down 4% from$2,622,000 for the $8,443,000quarter compared to $2,942,000 in the first nine-monthsprior year. The decrease of the previous year. This decrease$320,000, or 10.8%, was driven entirely by a reduction in T&M’sHardware sales. Everest sales can be attributed to a decrease in Everest Telemetry Workstation salesdecreased approximately 50% from the prior year. T&M’s segment profit margin decreasedSales of these high end telemetry workstation recorders were off as new orders from aerospace customers were weak due to a loss of approximately (1%)funding constraints. Tempering the Everest results were sales increases in the period fromDash series and the Toughwriter product lines. Consumables and Service & Other were consistent with the prior year. Operating expenses were also consistent with the prior year. As a profitconsequence of 6% in the previous year. The decrease in T&M’s margin is attributed to the lower sales and higher selling and R&D expenses.volume, the T&M segment experienced an operating loss.

QLS’sQuickLabel Systems

QuickLabel sales increasedwere $7,054,000 for the quarter compared to $21,132,000, a 15% increase over the $18,325,000, of sales reported$6,931,000 in the first nine-months of the previous year. This increase is attributed to a 19% growth in printer sales and a 14% increase in media sales. The increase in printer sales can be attributed primarily to the increased sales of the 4100Xe and 8100Xe printers. QLS’s segment profit margin increased to 13% in the first nine-months, up from 10% from the previousprior year. The increase of $123,000, or 1.7%, was driven by an increase in margin is primarily attributedthe 4100XE and consumables. Service & Other was consistent with the prior year. Operating expenses increased 15.7% as QuickLabel made investments in field sales personnel when compared to the higherprior year. As a consequence of the increase in the field sales volume andexpense with the change1.7% increase in sales, mix within the group.

G-T sales decreased to $12,211,000, down 18% from $14,855,000 reported in the first nine-months of the previous year. The lower sales are traceable to the lower Long-term Epilepsy Monitoring (LTM), PSG (sleep monitoring) and research instrumentation product sales. The G-TQuickLabel segment operating profit margin declined to 11%8% from 12% in the prior year.

Grass-Telefactor

G-T sales were $4,517,000 for the first nine-months of this year from 15%quarter compared to $4,369,000 in the previousprior year. The declineincrease of $148,000, or 3.3% was driven by an increase in electrode consumables, sleep and LTM hardware sales along with a slight decrease in EEG hardware sales. During the quarter operating expenses were consistent with the prior year. As a consequence of a sales mix shift and lower manufacturing absorption, the G-T segments operating profit margin is attributeddecreased to 16% from 17% in the lower sales volume.prior year.