UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

For the quarterly period ended July 30,October 29, 2005

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 by check mark whether the registrant is a shell company (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 – 5,278,4035,312,843 shares

(excluding (excluding treasury shares) as of August 22,December 1, 2005

ASTRO-MED, INC.

INDEX

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Part I. FINANCIAL INFORMATION

ASTRO-MED, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

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ASTRO-MED, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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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

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ASTRO-MED, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

July 30,October 29, 2005

(Unaudited)

NOTE 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 (“SEC”), and reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair statementpresentation of the results of the interim periods presented.periods. 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, 2005. Certain reclassifications have been made to conform to the current period reporting format.

(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-inPaid in Capital and Common Stock as of the declaration date. The net incomeIncome per common share and weighted average share amounts for all prior periods have been restated to reflect the three and six month periods ended July 31, 2004 were computed assuming the stock dividend had occurred at the beginningimpact of the periods.10% stock dividend.

(c) Net income per common share has been computed and presented pursuant to the provisions of Statement of Financial Accounting Standards (SFAS) No. 128, Earnings Per 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-month and six-monthnine-month periods ended July 30,October 29, 2005 and July 31,October 30, 2004, the diluted per share amounts do not reflect options outstanding of 236,5003,300 and 252,450,251,350, respectively. These outstanding options were not included in the weighted average common shares outstanding because the exercise prices of the options were greater than the average market price of the Company’s stock during the periods presented.

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ASTRO-MED, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

July 30,October 29, 2005

(Unaudited)

(d) Stock-Based Compensation:Compensation: The Company follows Accounting Principles Board Opinion (APB) No. 25, “Accounting for Stock Issued to Employees” and related interpretations in accounting for its stock-based compensation plans and has elected to continue to use the intrinsic value-based method to account for stock option grants. The Company has adopted the disclosure-only provisions of SFAS No. 148, “Accounting for Stock Based Compensation – Transition and Disclosure”, an amendment of SFAS No. 123. Accordingly, no compensation expense has been recognized for stock-based compensation plans. The fair value of each option granted was estimated on the grant date using the Black-Scholes option-pricing model.

(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’sselling price to the buyer is fixed or determinable and collectibility is reasonably assured in accordance with the requirements in the SEC’s 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 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 purchaseselling 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.

(f) New Accounting Pronouncements:In December 2004, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 123 (Revised 2004), “Share-Based Payment” (“SFAS No. 123-R”) which, upon becoming effective, will replace SFAS No. 123, “Accounting for Stock-Based Compensation” (“SFAS No. 123”) and will supersede 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 annual period after June 15, 2005. 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.

In May 2005, the FASB issued SFAS No. 154, “Accounting for Changes and Error Corrections – a Replacement of APB Opinion No. 20 and SFAS No. 3”, which changes the requirements for accounting and reporting of a change in accounting principle. The Statement applies to all voluntary changes in accounting principles and to changes required by an accounting pronouncement in the event that the pronouncement does not include specific transition provisions. This statement requires retroactive application to prior period financial statements of change in accounting principle, unless it is impracticable to determine either the period specific effects or the cumulative effect of the change. The Company is required to adopt this statement during the first quarter of fiscal 2007. We do2007 and does not expect the adoption of this statement to have a material impact on ourits financial condition or results of operations.

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ASTRO-MED, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

July 30,October 29, 2005

(Unaudited)

NOTE 2 – COMPREHENSIVE INCOME

The Company’s total comprehensive income is as follows:

NOTE 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:

NOTE 4 – INCOME TAXES

During the quarter ended May 1,October 29, 2005, the Company recognized an income tax benefit of $177,000. The quarter’s income tax benefit includes 1) an income tax expense of $184,000 which equals an effective tax rate of 37% on the current quarter’s pre-tax income and 2) the $361,000 reversal of tax reserves related to the favorable resolution of certain income tax examinations. This compares to an income tax expense of $29,000 equaling an effective tax rate of 36% on the quarter’s pre-tax income recorded during the quarter ended October 30, 2004.

During the nine months ended October 29, 2005, the Company’s effective tax rate was 20%. The effective tax rate includes 1) an income tax expense of $783,000 which equals an effective tax rate of 37% on the period’s pre-tax income and 2) the $361,000 reversal of tax reserves noted above. This compares to an effective tax rate of 1% recorded during the nine months ended October 30, 2004. During the nine months ended October 30, 2004, the Company recognizedrecorded 1) an income tax expense of $740,000 which equals an effective tax rate of 36% on the period’s pre-tax income and 2) a $939,000 one-time non-cash tax benefit 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 believed that an appropriate level of profitability hashad been established and maintained and it iswas more likely than not the deferred tax assets will be realized in the future.

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ASTRO-MED, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

July 30,October 29, 2005

(Unaudited)

NOTE 5 – SEGMENT INFORMATION

Summarized below are the sales and segment operating profit (loss) for each reporting segment for three-months ended July 30,October 29, 2005 and July 31,October 30, 2004:

Summarized below are the sales and segment operating profit (loss) for each reporting segment for the six-monthsnine-months ended July 30,October 29, 2005 and July 31,October 30, 2004:

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ASTRO-MED, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(Unaudited)

NOTE 6 – PRODUCT WARRANTY LIABILITY

Changes in the Company’s product warranty liability during the six monthsperiod ended July 30,October 29, 2005 and July 31,October 30, 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 Form 10-K for the year ended January 31, 2005.2005 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 three business segments including:

The Company’s Test & Measurement (T&M) products are a comprehensive line of data recording instruments for the aerospace, automotive, pulp and 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 T&M product group includes a suite of ruggedized avionic products which consistconsists of printers, and Ethernetethernet switches designed to withstand the rigors of airborne and other electronic instruments for commercial and military aircraft 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 sales through a broad consumable line of consumable products including label, tag and thermal transfer ribbons and monochrome transfer ribbons. QuickLabel engineers and manufactures certain unique printing supplies especially designed for use in optimizing the performance of the QuickLabel brand of digital printers, as well as in the use of all other major brands of desktop and tabletop printers.

Grass-Telefactor (G-T) product group offers a range of instrumentation and supplies 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, monitoring and analysis tools.

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

Results of Operations

Three-Months Ended July 30,October 29, 2005 vs. Three-Months Ended July 31,October 30, 2004

Sales by product group, percent change, and percent of total sales for the three months ended July 30, 2005 and July 31, 2004 were:

		October 29, 2005			Sales as a % of Total Sales			October 30, 2004			Sales as a % of Total Sales			% Increase (Decrease) Over Prior Year
T&M		$	3,173,000		21.9	%		$	2,554,000		19.2	%		24.2	%
QuickLabel			7,113,000		49.2	%			6,931,000		52.3	%		2.6	%
G-T			4,169,000		28.9	%			3,761,000		28.5	%		10.8	%
Total		$	14,455,000		100.0	%		$	13,246,000		100.0	%		9.1	%

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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 Ended July 30,October 29, 2005 vs. Three-Months Ended July 31,October 30, 2004

Sales in the quarter were $14,648,202,$14,455,179, an increase of 4.7%9.1% from prior year’s secondthird quarter sales of $13,990,031.$13,246,011. The Company’s sales in itsT&M, Quicklabel Systems and G-T product groups increased 4.5%24.2%, 2.6% and 8.4%10.8%, respectively. Sales in the T&M product group were flat with the prior year. Sales through our domestic channelchannels were $10,157,033,$10,337,231, up 3.6%9.2% from the prior year.year sales of $9,459,571. Sales through the Company’s international channels were $4,491,169,$4,117,953, up 7.3%8.7% from the previous year’s second quarterprior year sales of $4,185,830.$3,786,436. The favorable impact of the change in foreign exchange rates was approximately $50,000$5,041 which had a nominal effect on the Company’s international sales.sales increase.

Hardware and software sales were $6,871,624$6,825,395 for the quarter, essentially flat with the prior year’s sales of $6,851,727. Flat hardware sales in the quarter was due to a blend of healthy growth in the Ruggedized products, up almost 100%10.2% from the prior year sales of $6,192,016. The increase was driven by gains within the T&M Dash series, Ruggedized products and G-T’sGT sleep and EEG systems up 65.1% and 34.7%, respectively. These increases were tempered by lower sales from G-T’s long term monitoring systemsin the Everest and T&M’s Dash series. The prior year’s hardware sales also included a $300,000 non-recurring engineering contract from an OEM customer.QLS printer lines.

The Company’s consumable sales continue to grow with the secondthird quarter sales volume reaching $6,587,667, a 12.3%$6,293,143, an 8.6% increase over the prior year’s sales of $5,865,026.$5,793,691. The products driving the increase include the Quicklabel mediaconsumable products, up 14.0%10.0% and the G-T product groupsgroup’s suite of supplies and electrodes,consumable products, up 14.7%9.0% from the prior year.

Sales of the Company’s service related products were $1,188,912, down 6.6%$1,336,641, up 6.1% from the prior year’s sales of $1,273,278.$1,260,294. The decreaseincrease was driven by lowerhigher parts sales.

Gross profit dollars were $6,330,65,$5,783,672, generating a gross margin percentage of 43.2%40.0% for the quarter as compared to a margin percentage of 42.3%38.9% for the same quarter in the prior year. The higher gross profit percentage in the second quartercurrent year can be attributed to higher margins in each of the three product groups as sales shifted to a more favorable product mix within both hardware and consumables.mix.

Operating expenses in the secondthird quarter were $5,425,714,$5,303,989, compared to $5,002,684$5,145,123 in the secondthird quarter of the prior year. Selling and general administrative (SGA) spending increased 9.8%5.9% from last year to $4,434,295.$4,316,543. The increase was driven by higher personnel costs, travel and trade show expenses. Research & Development spending decreased 7.6% from last year to $987,446. R&D expenses remain at approximately 7% of sales.

Other income was $16,731 in the third quarter compared to $75,152 in the third quarter of the prior year. The decrease was the result of slightly lower investment income and the impact of the unfavorable change in foreign exchange. Research & Development spending increased 2.5% from last year to $991,419.exchange rates on payments denominated in foreign currencies.

OtherDuring the quarter ended October 29, 2005 the Company recognized an income increased $68,024 to $92,258 as a resulttax benefit of a higher investment yield on cash and marketable securities, as well as rental$177,000. The quarter’s income and the settlement of a lawsuit.

Antax benefit includes 1) an income tax expense of $375,262 and $338,905 was recorded for the three-months ended July 30, 2005 and July 31, 2004, respectively. The$184,000 which equals an effective tax rate forof 37% on the three-monthscurrent quarter’s pre-tax income and 2) the $361,000 reversal of tax reserves related to the favorable resolution of certain income tax examinations. This compares to an income tax expense of $29,000, equaling an effective tax rate of 36% on the quarter’s pre-tax income recorded during the quarter ended JulyOctober 30, 2005 and July 31, 2004 was 37% and 36%, respectively.2004.

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 July 30,October 29, 2005 and July 31,October 30, 2004:

Test & Measurement

T&M’s sales were $2,628,000 for the quarter compared to $2,639,000 for the same quarter in the prior year. Sales for the quarter were driven by lower Dash Series and chart paper sales. These lower sales were offset by an increase in ruggedized products. Service and other sales were comparable with the prior year. As an outgrowth of a favorable product mix, T&M achieved higher gross margins and consistent operating profits when compared to the prior year.

Quicklabel Systems

Quicklabel System sales were $7,599,000 for the quarter compared to $7,272,000 for the same quarter in the prior year. The increase of $327,000, or 4.5% was driven by a 14.2% increase in media sales, tempered by lower hardware sales. Excluding the impact of the non-recurring engineering fees, hardware sales would have been up from the prior year. Service and Other sales were down slightly from the prior year. Gross profit margins were comparable year over year. Quicklabel increased investment in promotional activities and field selling expense lowered the product group’s operating profit margin to 13.0% from 16.2% in the prior year.

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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 Ended October 29, 2005 vs. Three-Months Ended October 30, 2004

Grass-TelefactorTest & Measurement

G-TT&M’s sales were $4,421,000$3,173,000 for the quarter compared to $4,079,000$2,554,000 for the same quarter in the prior year. Sales for the quarter were driven by higher Dash Series and Ruggedized Product sales. Consumable sales were comparable with the prior year. Service and other sales were higher than the prior year as a result of an increase in the sale of parts. As an outgrowth of a higher sales and favorable product mix, T&M achieved higher gross margins and operating profits when compared to the prior year.

Quicklabel Systems

Quicklabel sales were $7,113,000 for the quarter compared to $6,931,000 for the same quarter in the prior year. The increase of $342,000,$182,000, or 8.4%2.6% was driven by a 10.0% increase in consumable sales, tempered by lower hardware sales. Service and Other sales were down slightly from the prior year. Operating profit margins increased slightly to 10.5% from 9.9% in the prior year.

Grass-Telefactor

G-T sales were $4,169,000 for the quarter compared to $3,761,000 for the same quarter in the prior year. The increase of $408,000, or 10.8% was driven by increased hardware sales in sleep systems (PSG) and EEGlong term monitoring systems (LTM), as well as increasescontinued growth in the Company’s electrode consumables.consumable products. Operating profit margins increased to 10.2% from 6.4% as a result of the higher sales and improved gross margins resulting from product mix.

Six-MonthsNine-Months Ended July 30,October 29, 2005 vs. Six-MonthsNine-Months Ended July 31,October 30, 2004

Sales by product group, percent change, and percent of total sales for the six months ended July 30, 2005 and July 31, 2004 were: