----

----

**U.S. SECURITIES AND EXCHANGE COMMISSION****Washington, D.C. 20549**

**FORM 10-QSB**

**(Mark One)**
| **ý** | **QUARTERLY  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF  1934.** |
|------------|------------------------------------------------------------------------------------------------|

**For the quarterly period ended             June 30, 2001             **

**OR**
| **o** | **TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|-------|-----------------------------------------------------------------------------------------------|

**For the transition period from___________________ to _________________________**

**Commission file number  1-4530  **

**ASTREX, INC.**(Exact name of smallbusiness issuer as specified in its charter)

| **Delaware**                                                                                            | **13-1930803**                        |
|---------------------------------------------------------------------------------------------------------|---------------------------------------|
| (State  or other jurisdiction of                                                                        | (I.R.S.  Employer Identification No.) |
| incorporation  or organization)                                                                         |                                  |
|                                                                                                    |                                  |
| **205 Express Street,     Plainview, New York      11803** |
| (Address  of principal executive offices)                                                               |
|                                                                                                    |
| **(516) 433-1700**                                                                                      |
| (Issuer’s  telephone number, including area code)                                                  |

****
|                                                                                     |
|-------------------------------------------------------------------------------------|
| (Former  name, former address and former fiscal year, if changed since last report) |

** **

Check  whether the issuer (1) has filedall reports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorter periodthat the registrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90 days.  Yes  ý  No  o

**APPLICABLE ONLY TO CORPORATE ISSUERS**

State the number ofshares outstanding of each of the registrant's classes of common stock, as ofthe latest practicable date.  As of July30, 2001 common shares outstanding were 5,531,277 (does not include Convertible Preferred Stock).

----

----

 

| **ASTREX, INC.** |
|------------------|
|             |   |   |   |
| **INDEX**        |

** **

|                                                                           |                                                    |
|--------------------------------------------------------------------------------|---------------------------------------------------------|
|                                                                           |                                                    |
| ***PART  I:     Financial Information***                   |
|                                                                           |                                                    |
| **Item 1.   Financial Statements:**                                       |
|                                                                           |                                                    |
|                                                                           | Consolidated Balance Sheets                             |
|                                                                           | June 30, 2001 (unaudited)  and March 31, 2001           |
|                                                                           |                                                    |
|                                                                           | Consolidated  Statements of Income (unaudited)          |
|                                                                           | Three months ended  June 30, 2001 and 2000              |
|                                                                           |                                                    |
|                                                                           | Consolidated  Statements of Cash Flows (unaudited)      |
|                                                                           | Three months  ended June 30, 2001 and 2000              |
|                                                                           |                                                    |
|                                                                           | Notes to  Consolidated Financial Statements (unaudited) |
|                                                                           |                                                    |
| **Item  2.  Management's Discussion and  Analysis or Plan of Operations** |
|                                                                           |                                                    |
|                                                                           |                                                    |
| ***PART II:    Other Information***                             |
|                                                                           |                                                    |
| **Other Information and Signatures**                                           |
|                                                                           |                                                    |

** **

 

** **

**PART I - Financial Information**

**ASTREX, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS**

|                                                                                                                          | June 30, 2001                                                                                                                                                                                           |      | March 31, 2001 |   |
|-------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------|----------------|--------|
|                                                                                                                          | (Unaudited)                                                                                                                                                                                             |      |           |   |
|                                                                                                                          |                                                                                                                                                                                                         |      |                |   |
|                                                                                                                          | (000's) Omitted                                                                                                                                                                                         |      |
| Current Assets:                                                                                                               |                                                                                                                                                                                                    |      |           |   |
|                                                                                                                          | Cash and cash equivalents                                                                                                                                                                               | $         | 27             |   | $ | 11 |   |
|                                                                                                                          |                                                                                                                                                                                                    |      |           |   |
|                                                                                                                          | Accounts receivable (net of allowance  for doubtful accounts of $87 at June 30, 2001  and $79 at March 31, 2001)                                                                                        |      |           |   |   |
|                                                                                                                          |                                                                                                                                                                                                    |      |           |
| 2,568                                                                                                                         |                                                                                                                                                                                                    | 2,451     |           |
|                                                                                                                          |                                                                                                                                                                                                    |      |           |   |
|                                                                                                                          | Inventory                                                                                                                                                                                               | 5,185     |           | 5,310  |   |
|                                                                                                                          |                                                                                                                                                                                                    |      |           |   |   |
|                                                                                                                          | Prepaid expenses and other current assets                                                                                                                                                               | 194       |           | 61     |   |
|                                                                                                                          | Deferred tax asset                                                                                                                                                                                      | 200       |           | 200    |   |
|                                                                                                                          |                                                                                                                                                                                                         |      |                |   |
|                                                                                                                          |                                                                                                                                                                                                    |      |           |   |
|                                                                                                                          | Total current assets                                                                                                                                                                                    | 8,174     |           | 8,033  |   |
|                                                                                                                          |                                                                                                                                                                                                    |      |           |   |
| Property, plant and equipment at cost (net of  accumulated depreciation of $634 at June 30,  2001 and $618 at March 31, 2001) |                                                                                                                                                                                                    |      |           |   |
|                                                                                                                          |                                                                                                                                                                                                    |      |           |
| 695                                                                                                                           |                                                                                                                                                                                                    | 701       |           |
| Other long-term assets                                                                                                        | 93                                                                                                                                                                                                      |      | 88             |   |
|                                                                                                                          |                                                                                                                                                                                                         |      |                |   |
|                                                                                                                          |                                                                                                                                                                                                    |      |           |   |
| **Total Assets**                                                                                                              | **$**                                                                                                                                                                                                   | **8,962** | ** **     | **$**  | **8,822** | ** ** |
|                                                                                                                          | ****                                                                                                                                                                                                    |      | ****           |   |
|                                                                                                                          |                                                                                                                                                                                                    |      |           |   |
| Current Liabilities:                                                                                                          |                                                                                                                                                                                                    |      |           |   |
|                                                                                                                          | Accounts payable                                                                                                                                                                                        | 1,521     |           | 1,567  |   |
|                                                                                                                          | Accrued liabilities                                                                                                                                                                                     | 617       |           | 794    |   |
|                                                                                                                          |                                                                                                                                                                                                         |      |                |   |
|                                                                                                                          |                                                                                                                                                                                                    |      |           |   |
|                                                                                                                          | Total current liabilities                                                                                                                                                                               | 2,138     |           | 2,361  |   |
|                                                                                                                          |                                                                                                                                                                                                         |      |                |   |
|                                                                                                                          |                                                                                                                                                                                                    |      |           |   |
|                                                                                                                          | Long-term debt                                                                                                                                                                                          | 2,180     |           | 2,000  |   |
|                                                                                                                          |                                                                                                                                                                                                    |      |           |   |
|                                                                                                                          |                                                                                                                                                                                                    |      |           |   |
| Shareholders' Equity:                                                                                                         |                                                                                                                                                                                                    |      |           |   |
|                                                                                                                          | Preferred Stock, Series A - issued, none                                                                                                                                                                | -         |           | -      |   |
|                                                                                                                          | Convertible Preferred Stock, Series B - $.01 par value;  authorized, 10,000,000; 1,897,381 shares issued  and outstanding at June 30, 2001 and March 31, 2001  (liquidation preference of $.25 a share) |      |           |   |   |
|                                                                                                                          |                                                                                                                                                                                                    |      |           |
|                                                                                                                          |                                                                                                                                                                                                    |      |           |
| 19                                                                                                                            |                                                                                                                                                                                                    | 19        |           |
|                                                                                                                          | Common Stock - par value $.01 par value; authorized,  15,000,000 shares; issued, 6,605,363 at June 30, 2001  and at March 31,2001                                                                       |      |           |   |   |
|                                                                                                                          |                                                                                                                                                                                                    |      |           |
| 66                                                                                                                            |                                                                                                                                                                                                    | 66        |           |
|                                                                                                                          | Additional paid-in capital                                                                                                                                                                              | 3,928     |           | 3,928  |   |
|                                                                                                                          | Retained earnings                                                                                                                                                                                       | 952       |           | 767    |   |
|                                                                                                                          | Deferred compensation                                                                                                                                                                                   | (8        | )              | (11    | ) |
|                                                                                                                          | Treasury stock, at cost (1,074,086 shares at June 30, 2001  and 1,059,086 shares at March 31, 2001)                                                                                                     |      |           |   |   |
| (313                                                                                                                          | )                                                                                                                                                                                                       | (308      | )              |
|                                                                                                                          |                                                                                                                                                                                                         |      |                |   |
|                                                                                                                          |                                                                                                                                                                                                    |      |           |   |
|                                                                                                                          | Total shareholders' equity                                                                                                                                                                              | 4,644     |           | 4,461  |   |
|                                                                                                                          |                                                                                                                                                                                                         |      |                |   |
|                                                                                                                          |                                                                                                                                                                                                    |      |           |   |
| **Total  liabilities and shareholders' equity**                                                                               | **$**                                                                                                                                                                                                   | **8,962** | ** **     | **$**  | **8,822** | ** ** |
|                                                                                                                          |                                                                                                                                                                                                         |      |                |   |
|                                                                                                                               |                                                                                                                                                                                                         |           |                |        |  |  |  |  |

****See accompanying notes to unaudited consolidated financial statements.

 

|   | **ASTREX, INC.  AND SUBSIDIARIES**     |
|--------|----------------------------------------|
|   | **CONSOLIDATED  STATEMENTS OF INCOME** |
|   | **(Unaudited)**                        |

 

|                                                                              |                     |      |    |       |
|-----------------------------------------------------------------------------------|--------------------------|-----------|---------|------------|
|                                                                              | THREE MONTHS ENDED       |      |
|                                                                              |                     |
|                                                                              | JUNE 30,                 |      |
|                                                                              | 2001                     |      | 2000    |       |
|                                                                              |                          |      |
|                                                                              | (000's) Omitted          |      |
|                                                                              |                     |      |    |       |
| Net sales                                                                         | $                        | 5,157     |    | $          | 4,567 |   |
| Cost of sales                                                                     | 3,974                    |      | 3,542   |       |
|                                                                              |                          |      |         |       |
|                                                                              | Gross profit             | 1,183     |    | 1,025      |   |
|                                                                              |                     |      |    |       |
| Selling, general and                                                              |                     |      |    |       |
| administrative  expenses                                                          | 954                      |      | 829     |       |
|                                                                              |                          |      |         |       |
|                                                                              | Income from  operations  | 229       |    | 196        |   |
|                                                                              |                     |      |    |       |
| Interest expense                                                                  | 39                       |      | 43      |       |
|                                                                              |                          |      |         |       |
|                                                                              | Income before  provision |      |    |       |   |
|                                                                              | for income  taxes        | 190       |    | 153        |   |
|                                                                              |                     |      |    |       |
| Provision for income taxes                                                        | 6                        |      | 0       |       |
|                                                                              |                          |      |         |       |
|                                                                              | **Net income**           | **$**     | **184** | ** ** | **$** | **153** |   |
|                                                                              |                          |      |         |       |
|                                                                              |                     |      |    |       |
|                                                                              |                     |      |    |       |
| Per share data for the three months ended June 30,  2001 and 2000 are as follows: |                     |      |    |       |
|                                                                              |                     |      |    |       |
| Weighted average common shares and                                                |                     |      |    |       |
| common  equivalent shares outstanding:                                            |                     |      |    |       |
|                                                                              | Basic                    | 5,471,552 |    | 5,626,777  |   |
|                                                                              |                     |           |    |            |   |
|                                                                              | Diluted                  | 7,433,933 |    | 5,628,206  |   |
|                                                                              |                          |      |         |       |
| Net income per share:                                                             |                     |      |    |       |
|                                                                              | Basic                    | $         | 0.03    |       | $ | 0.03 |   |
|                                                                              |                     |           |    |            |   |
|                                                                              | Diluted                  | $         | 0.02    |       | $ | 0.03 |   |
|                                                                              |                          |      |         |       |
|                                                                                   |                          |           |         |            |  |  |  |  |  |

 

| See accompanying notes to  unaudited consolidated financial statements. |   |
|-------------------------------------------------------------------------|--------|

 

 

| **ASTREX, INC.  AND SUBSIDIARIES**         |
|--------------------------------------------|
| **CONSOLIDATED  STATEMENTS OF CASH FLOWS** |
| **(Unaudited)**                            |

 

|                                                          | FOR THE THREE MONTHS ENDED JUNE  30,                   |       |
|---------------------------------------------------------------|--------------------------------------------------------|------------|
|                                                          | 2001                                                   |       | 2000 |   |
|                                                          |                                                        |       |
|                                                          | (000's) Omitted                                        |       |
|                                                          |                                                   |       |   |   |
| Cash Flows From Operating Activities:                         |                                                   |       |   |   |
|                                                          |                                                   |       |   |   |
|                                                          | Net income                                             | $          | 184 |   | $ | 153 |   |
|                                                          |                                                   |       |   |   |
|                                                          | *Adjustments to  reconcile net income to net*          |       |   |   |   |
|                                                          | *cash (used in)  operating activities:*                |       |   |   |   |
|                                                          | Depreciation and amortization                          | 16         |   | 24 |   |
|                                                          | Amortization of deferred stock  compensation           | 4          |   | - |   |
|                                                          | *Changes in  assets and liabilities:*                  |       |   |   |   |
|                                                          | (Increase)/decrease in accounts  receivable, net       | (117       | ) | 274 |   |
|                                                          | Increase in prepaid expenses and  other current assets | (133       | ) | (111 | ) |
|                                                          | Decrease in inventory                                  | 125        |   | 49 |   |
|                                                          | Increase in non-current assets                         | (8         | ) | - |   |
|                                                          | Decrease in  accounts payable                          | (46        | ) | (370 | ) |
|                                                          | Decrease in  accrued liabilities                       | (177       | ) | (56 | ) |
|                                                          |                                                        |       |  |   |
| **Net cash (use****d in) operating activities**               | **(152**                                               | **)**      | **(37** | **)** |
|                                                          |                                                   |       |   |   |
| Cash flows used in investing activities:                      |                                                   |       |   |   |
|                                                          | Capital  expenditures                                  | (10        | ) | (9 | ) |
|                                                          |                                                        |       |  |   |
| **Net cash (used  in) investing activities**                  | **(10**                                                | **)**      | **(9** | **)** |
|                                                          |                                                        |       |  |   |
| Cash flows  from financing activities:                        |                                                   |       |   |   |
|                                                          | Purchase of  Treasury Stock                            | (5         | ) | - |   |
|                                                          | Deferred  financing costs                              | 3          |   | 3 |   |
|                                                          | Principal  payments under capital lease obligations    | -          |   | (12 | ) |
|                                                          | Proceeds from  loans payable, net                      | 180        |   | - |   |
|                                                          |                                                        |       |  |   |
| **Net cash  provided by/(used in) financing activities** | **178**                                                | ** ** | **(9** | **)** |
|                                                          |                                                        |       |  |   |
|                                                          |                                                   |       |   |   |
| Net change in cash and cash equivalents                       | 16                                                     |       | (55 | ) |
|                                                          |                                                   |       |   |   |
| Cash and cash equivalents - beginning of period               | 11                                                     |       | 57 |   |
|                                                          |                                                        |       |  |   |
| Cash and cash equivalents - end of period                     | $                                                      | 27         |   | $ | 2 |   |
|                                                          |                                                        |       |  |   |
|                                                               |                                                        |            |  |  |  |  |  |  |  |  |

 

| See accompanying notes to  unaudited consolidated financial statements. |   |
|-------------------------------------------------------------------------|--------|

** **

 

 

**ASTREX, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIALSTATEMENTS**

NOTE A- UNAUDITED FINANCIAL STATEMENTS

The consolidated balancesheet as of June 30, 2001 and the consolidated statements of income and thestatement of cash flows for the three months ended June 30, 2001 and 2000 andthe statement of cash flows for the three months ended June 30, 2001 and 2000,have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include onlynormally recurring adjustments) necessary to present fairly the financialposition, results of operations and cash flows at June 30, 2001 (and for allperiods presented) have been made.

Certain information andnote disclosures, normally included in financial statements prepared inaccordance with accounting principles generally accepted in the United Statesof America, have been condensed or omitted. It is suggested that these consolidated financial statements be read inconjunction with the financial statements and notes thereto included in theAnnual Report on Form 10-KSB for the year ended March 31, 2001 filed by theCompany.  The results of operations forthe periods ended June 31, 2001 and 2000 are not necessarily indicative of theoperating results for the respective full years.

NOTE B– EARNINGS PER COMMON SHARE

The following table setsforth the reconciliation of the weighted average number of common shares:

|                                                           | Three months ended |   |
|----------------------------------------------------------------|--------------------|--------|
|                                                           | June 30,           |   |
|                                                           |               |   |
|                                                           | **2001**           |   | **2000** |   |
|                                                           | (Unaudited)        |   | (Unaudited) |   |
|                                                           |                    |   |  |   |
|                                                           |               |   |   |   |
| Basic                                                          | 5,471,552          |   | 5,626,777 |   |
| Effect  of Series B Convertible  Preferred Stock               | 1,897,381          |   |   |   |
| Effect  of dilutive securities (non-  vested restricted stock) | 65,000             |   | 1,429 |   |
|                                                           |                    |   |  |   |
| Diluted                                                        | 7,433,933          |   | 5,628,206 |   |
|                                                           |                    |   |  |   |

 

NOTEC  - SHAREHOLDERS’ EQUITY

During the first quarter of fiscalyear ended March 31, 2002, the Company purchased 15,000 shares of its stock onthe open market.  These shares wererecorded as treasury stock at their aggregate cost of approximately$5,000.  In fiscal year ended March 31,2001, the Company purchased 145,500 shares of its common stock for $43,042 onthe open market.  These shares are beingheld as treasury shares.

**ASTREX, INC.AND SUBSIDIARIESMANAGEMENT'S DISCUSSION AND ANALYSISOR PLAN OF OPERATIONS**

**RESULTS OF OPERATIONS**

             Net incomefor the three months ended June 30, 2001 was approximately $184,000, anincrease of $31,000 or 20% from the same three month period last fiscalyear.  This increase is principally theresult of higher sales volume.

             Sales increased by approximately$590,000 or 13%, for the three months ended June 30, 2001, from the comparablethree month period in 2000. To asignificant extent "Sales" reflect shipping of past confirmed orders(i.e. "backlog") as opposed to placement of orders during the quarter(i.e. "bookings"). During the quarter ended June 30, 2001 backlogincreased approximately 7% with confirmed but unshipped orders at June 30, 2001of approximately $4,496,000 as compared to approximately $4,220,000 at June 30,2000. Bookings for the quarter ended June 30, 2001 were basically even ascompared to the comparable quarter in 2000, $4,679,000 compared to $4,721,000,but with some slippage toward the end of the quarter ended June 30, 2001 whichhas continued into the quarter ended September 30, 2001.

**            **The Company’s gross margin remained relatively constant at22.9% for three months ended June 30, 2001 as compared to 22.4% for the sameperiod last fiscal year.

             Selling, general and administrativeexpenses increased by approximately $125,000, or 15%, for the three monthsended June 30, 2001 from the comparable previous three month period in 2000. This increase was primarily the result of advertising,salary, bonus, commission and employee benefit related expenses.

             Interest expense decreased byapproximately $4,000 for the three months ended June 30, 2001, from theprevious comparable three month period in 2000 due to a reduction in interestrates.

             The provision for income taxes for the three monthsended June 30, 2001 consists principally of state and local taxes. The Companydid not record a provision for income tax expense for the three months endedJune 30, 2000 based on the recognition of certain tax benefits available to theCompany.

**ASTREX, INC. AND SUBSIDIARIESMANAGEMENT'S DISCUSSION ANDANALYSISOR PLAN OF OPERATIONS**

**LIQUIDITY AND CAPITAL RESOURCES**

The Company utilizedapproximately $152,000 in cash from its operating activities for the threemonths ended June 30, 2001.  At June 30,2001, the Company had working capital of $6,036,000 and its stockholders’ equitywas $4,644,000.  The Company believesthat its present working capital, cash generated from operations and amountsavailable under the loan agreement will be sufficient to meet its cash needsduring the next year. The Company's principal credit facility is a line ofcredit and a term loan from the same bank lender (“Line”).  The Line is secured by substantially all ofthe Company's assets including a mortgage on the 205 Express Streetproperty.  The term of the Line runs toApril 30, 2002.  Borrowings under theline of credit portion of the Line, are based on the Company’s inventory andreceivables. On June 30, 2001, the Company owed $2,180,000 on the Line. TheCompany’s relationship with its secured lender is satisfactory and the Companybelieves that the lending arrangement will be adequate for the foreseeablefuture.

 

CAUTIONARY LANGUAGEREGUARDING FORWARD LOOKING STATEMENTS

When used herein, thewords “believe,” “anticipate,” “think,” “intend,” “will be,” “expect” andsimilar expressions identify forward-looking statements within the meaning ofthe Private Securities Litigation Reform Act of 1995.  Such statements are notguarantees of future performance and involve certain risks and uncertaintiesdiscussed herein, which could cause actual results to differ materially fromthose in the forward-looking statements. Readers are cautioned not to place undue reliance on the forward-lookingstatements, which speak only as of the date hereof.  Readers are also urged carefully to review and consider thevarious disclosures made by the Company which attempt to advise interestedparties of the factors which affect the Company’s business, including, withoutlimitation, the disclosures made in the Company’s Annual Report on Form 10-KSBfor the fiscal year ended March 31, 2001 under the caption “Management’sDiscussion and Analysis of Financial Condition and Results of  Operation.”

**PART II - OTHER INFORMATION**

Item 2.  Changes in Securities.

             none

Item 4.  Submission of Matters to a Vote of SecurityHolders.

             none

 

Item 5.  Other Information

In thethree months ended June 30, 2001, the Company purchased 15,000 shares of itsstock  on the open market.  These shares were recorded as treasury stockat their aggregate cost of approximately $5,000.

Item 6.   Exhibits and Reports on Form 8–K.

             none

 

(A)         Exhibits

| Exhibit | Description                                                                                               | Previously Filed and Incorporated by reference or Filed  Herewith                                 |
|---------|-----------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------|
| 3 (a)   | Certificate of Incorporation of Astrex, Inc., as amended (a  Delaware corporation)                        | Filed as Exhibit 3(a) to the Form 10-QSB of the Company for  the quarter ended September 30, 1997 |
| 3 (b)   | By-Laws of Astrex, Inc., as amended                                                                       | Filed as Exhibit 3(b) to the Form 10-QSB of the Company for  the quarter ended September 30, 1996 |
| 4       | Astrex, Inc. Certificate of Designations, Preferences and  Rights of Series B Convertible Preferred Stock | Filed as Exhibit 4 to the Form 10-QSB of the Company for  the quarter ended June 30, 2000         |

 

(B)        Reports on Form 8-K:

             None

SIGNATURES

In accordance with therequirements of Securities Exchange Act of 1934, the registrant has duly causedthis report to be signed on its behalf, thereunto duly authorized.

|                         | ASTREX, INC.                                                                 |
|------------------------------|------------------------------------------------------------------------------|
|                         |                                                                         |
| Date:  August 10,  2001 | By: s/ Michael McGuire                                                       |
|                         | Michael McGuire                                                              |
|                         | Director, President and                                                      |
|                         | Chief Executive Officer                                                      |
|                         |                                                                         |
|                         |                                                                         |
|                         | CHIEF FINANCIAL OFFICER                                                      |
|                         | OF ASTREX, INC.                                                              |
|                         |                                                                         |
| Date:  August 10, 2001  | By: s/ Lori A. Sarnataro                                                     |
|                         | Lori A. Sarnataro                                                            |
|                         | Chief Financial Officer, Executive Vice  President, Treasurer, and Secretary |

** **