** **

** **

**U.S. SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

** **

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** **

**FORM 10-QSB**

**(Mark One)**

** **

**ý****                                ****QUARTERLY REPORT PURSUANT TO SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.**

** **

**For the quarterly period ended December 31, 2001**

** **

**OR**

** **

**o****                                ****TRANSITION REPORT PURSUANT TO SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

** **

**For the transition period from               to              **

** **

**Commission file number 1-4530**

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**ASTREX, INC.**

(Exactname of small business 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) |

 

** **

(Formername, former address and former fiscal year, if changed since last report)

** **

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** **

Check  whetherthe issuer (1) has filed all reports required to be filed by Section 13 or15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (orfor 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  ý     No o

 

**APPLICABLE ONLY TO CORPORATE ISSUERS**

** **

State the number of shares outstanding of each of theregistrant’s classes of common stock, as of the latest practicable date.  As of **February 1, 2002 common shares outstanding were  5,669,751.**

** **

** **

** **

**ASTREX, INC.**

**INDEX**

 

| ***PART I:***                        | ***Financial Information***                                                                                  |
|--------------------------------------|--------------------------------------------------------------------------------------------------------------|
|                                 |                                                                                                         |
| **Item 1.**                          | **Financial Statements:**                                                                                    |   |
|                                 |                                                                                                         |
|                                 | Consolidated Balance SheetsDecember 31, 2001 (unaudited) and March 31, 2001                                  |
|                                 |                                                                                                         |
|                                 | Consolidated  Statements of Income (unaudited)Nine months and three  months ended December 31, 2001 and 2000 |
|                                 |                                                                                                         |
|                                 | Consolidated  Statements of Cash Flows (unaudited)Nine months ended  December 31, 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** |                                                                                                         |
|                                 |                                                                                                         |
|                                      |                                                                                                              |  |  |  |

** **

** **

2

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**PART I -Financial Information**

** **

**ASTREX, INC. ANDSUBSIDIARIESCONSOLIDATED BALANCE SHEETS**

** **
|                                                                                                                                                                                                                                                   |   | **December 31, 2001**                  |      | **March 31, 2001** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|-----------|--------------------|--------|
|                                                                                                                                                                                                                                                   |   | **(Unaudited)**                        |      |               |   |
|                                                                                                                                                                                                                                                   |   | **(000's) Omitted, except share data** |      |
| Current Assets:                                                                                                                                                                                                                                        |   |                                   |      |               |   |
| Cash and cash equivalents                                                                                                                                                                                                                              |   | $                                      | 198       |               | $      | 8 |   |
| Accounts receivable (net of allowance for doubtful  accounts of $96 at December 31, 2001 and $72 at March 31, 2001)                                                                                                                               |   | 1,473                                  |      | 2,321              |   |
| Inventory                                                                                                                                                                                                                                              |   | 4,933                                  |      | 5,058              |   |
| Prepaid expenses and othercurrent assets                                                                                                                                                                                                               |   | 82                                     |      | 59                 |   |
| Net assets from discontinued operation (Note B)                                                                                                                                                                                                        |   |                                   |      | 311                |   |
| Deferred tax asset                                                                                                                                                                                                                                     |   | 200                                    |      | 200                |   |
|                                                                                                                                                                                                                                                   |   |                                   |      |               |   |
| Total current assets                                                                                                                                                                                                                                   |   | 6,886                                  |      | 7,957              |   |
|                                                                                                                                                                                                                                                   |   |                                   |      |               |   |
| Property, plant and equipment at cost (net of  accumulated depreciation of $669 at December 31, 2001 and $618 at March 31,  2001)                                                                                                                      |   | 703                                    |      | 701                |   |
| Other long-term assets                                                                                                                                                                                                                                 |   | 82                                     |      | 88                 |   |
|                                                                                                                                                                                                                                                   |   |                                   |      |               |   |
| **Total Assets**                                                                                                                                                                                                                                       |   | **$**                                  | **7,671** | ** **         | **$**  | **8,746** | ** ** |
|                                                                                                                                                                                                                                                   |   |                                   |      |               |   |
| Current Liabilities:                                                                                                                                                                                                                                   |   |                                   |      |               |   |
| Accounts payable                                                                                                                                                                                                                                       |   | 616                                    |      | 1,504              |   |
| Accrued liabilities                                                                                                                                                                                                                                    |   | 594                                    |      | 781                |   |
|                                                                                                                                                                                                                                                   |   |                                   |      |               |   |
| Total current liabilities                                                                                                                                                                                                                              |   | 1,210                                  |      | 2,285              |   |
|                                                                                                                                                                                                                                                   |   |                                   |      |               |   |
| Long-term debt                                                                                                                                                                                                                                         |   | 1,900                                  |      | 2,000              |   |
|                                                                                                                                                                                                                                                   |   |                                   |      |               |   |
| Shareholders' Equity:                                                                                                                                                                                                                                  |   |                                   |      |               |   |
| Preferred Stock, Series A - issued, none                                                                                                                                                                                                               |   | -                                      |      | -                  |   |
| Convertible Preferred Stock, Series B - $.01 par  value; authorized, 10,000,000; 1,706,596 shares issued and outstanding at  December 31, 2001 and 1,897,381 shares issued and outstanding at March 31,  2001 (liquidation preference of $.25 a share) |   | 17                                     |      |  

19         |   |
| Common Stock - par value $.01 par value; authorized,15,000,000 shares; issued, 6,796,148 at December 31 , 2001 and  6,605,363 at March 31,2001                                                                                                         |   | 68                                     |      | 66                 |   |
| Additional paid-in capital                                                                                                                                                                                                                             |   | 3,928                                  |      | 3,928              |   |
| Retained earnings                                                                                                                                                                                                                                      |   | 877                                    |      | 767                |   |
| Deferred compensation                                                                                                                                                                                                                                  |   | (3                                     | )         | (11                | )      |
| Treasury stock, at cost (1,127,086 shares at December  31, 2001and 1,059,086 shares at March  31, 2001)                                                                                                                                                |   | (326                                   | )         | (308               | )      |
|                                                                                                                                                                                                                                                   |   |                                   |      |               |   |
| Total shareholders' equity                                                                                                                                                                                                                             |   | 4,561                                  |      | 4,461              |   |
|                                                                                                                                                                                                                                                   |   |                                   |      |               |   |
| **Total liabilities and shareholders'  equity**                                                                                                                                                                                                        |   | **$**                                  | **7,671** | ** **         | **$**  | **8,746** | ** ** |

** **

See accompanying notes to unaudited consolidatedfinancial statements.

** **

 

3

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**ASTREX, INC. ANDSUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF INCOME**

**(Unaudited)**

** **
|                                                                                            |   | **NINE MONTHS ENDED** |    | **THREE MONTHS ENDED** |   |
|-------------------------------------------------------------------------------------------------|--------|-----------------------|---------|------------------------|--------|
|                                                                                            |   | **DECEMBER 31,**      |    | **DECEMBER 31,**       |   |
|                                                                                            |   | **2001**              |    | **2000**               |   | **2001** |   | **2000** |   |
|                                                                                            |   | **(000's) Omitted**   |    | **(000's) Omitted**    |   |
| Net sales                                                                                       |   | $                     | 12,601  |                   | $      | 12,870 |   | $ | 3,508 |   | $ | 4,360 |   |
| Cost of sales                                                                                   |   | 9,775                 |    | 10,053                 |   | 2,736 |   | 3,388 |   |
|                                                                                            |   |                  |    |                   |   |   |   |   |   |
| Gross profit                                                                                    |   | 2,826                 |    | 2,817                  |   | 772 |   | 972 |   |
|                                                                                            |   |                  |    |                   |   |   |   |   |   |
| Selling, general andadministrative expenses                                                     |   | 2,254                 |    | 2,144                  |   | 690 |   | 733 |   |
|                                                                                            |   |                  |    |                   |   |   |   |   |   |
| Income from operations                                                                          |   | 572                   |    | 673                    |   | 82 |   | 239 |   |
|                                                                                            |   |                  |    |                   |   |   |   |   |   |
| Interest expense                                                                                |   | 95                    |    | 121                    |   | 25 |   | 37 |   |
|                                                                                            |   |                  |    |                   |   |   |   |   |   |
| Income from continuing operations before provision  for income taxes                            |   | 477                   |    | 552                    |   | 57 |   | 202 |   |
|                                                                                            |   |                  |    |                   |   |   |   |   |   |
| Provision for income taxes                                                                      |   | 21                    |    | -                      |   | 6 |   | - |   |
|                                                                                            |   |                  |    |                   |   |   |   |   |   |
| **Net income from continuing  operations**                                                      |   | **$**                 | **456** | ** **             | **$**  | **552** | ** ** | **$** | **51** | ** ** | **$** | **202** | ** ** |
|                                                                                            |   |                  |    |                   |   |   |   |   |   |
| **Discontinued operations:**                                                                    |   |                  |    |                   |   |   |   |   |   |
| Net loss from discontinued operations, net of taxes  (Note B)                                   |   | $                     | (80     | )                      | $      | (50 | ) | $ | (14 | ) | $ | (13 | ) |
| Net loss from disposal (Note B)                                                                 |   | $                     | (265    | )                      | $      | 0 |   | $ | (265 | ) | $ | 0 |   |
|                                                                                            |   |                  |    |                   |   |   |   |   |   |
| **Net income(loss)**                                                                            |   | **$**                 | **111** | ** **             | **$**  | **502** | ** ** | **$** | **(228** | **)** | **$** | **189** | ** ** |
|                                                                                            |   |                  |    |                   |   |   |   |   |   |
|                                                                                            |   |                  |    |                   |   |   |   |   |   |
| Per  share data for the nine and three months ended December 31, 2001 and 2000 are  as follows: |   |
|                                                                                            |   |                  |    |                   |   |   |   |   |   |
| Weighted average common shares and common equivalent  shares outstanding:                       |   |                  |    |                   |   |   |   |   |   |
|                                                                                            |   |                  |    |                   |   |   |   |   |   |
| Basic                                                                                           |   | 5,547,880             |    | 5,624,081              |   | 5,635,037 |   | 5,618,717 |   |
| Diluted                                                                                         |   | 7,418,509             |    | 6,825,754              |   | 7,395,006 |   | 7,581,098 |   |
|                                                                                            |   |                  |    |                   |   |   |   |   |   |
| Net income per share:                                                                           |   |                  |    |                   |   |   |   |   |   |
| Basic                                                                                           |   |                  |    |                   |   |   |   |   |   |
| Net  income  from continuing operations                                                    |   | $                     | 0.08    |                   | $      | 0.10 |   | $ | 0.01 |   | $ | 0.04 |   |
| Net loss from discontinued operations                                                           |   | $                     | (0.01   | )                      | $      | (0.01 | ) | $ | (0.00 | ) | $ | (0.00 | ) |
| Net loss from disposal of discontinued operations                                               |   | $                     | (0.05   | )                      | $      | 0.00 |   | $ | (0.05 | ) | $ | 0.00 |   |
| Net income(loss) per share                                                                      |   | $                     | 0.02    |                   | $      | 0.09 |   | $ | (0.04 | ) | $ | 0.04 |   |
|                                                                                            |   |                  |    |                   |   |   |   |   |   |
| Diluted                                                                                         |   |                  |    |                   |   |   |   |   |   |
| Net  income  from continuing operations                                                    |   | $                     | 0.06    |                   | $      | 0.08 |   | $ | 0.01 |   | $ | 0.03 |   |
| Net loss from discontinued operations                                                           |   | $                     | (0.01   | )                      | $      | (0.01 | ) | $ | (0.00 | ) | $ | (0.00 | ) |
| Net loss from disposal of discontinued operations                                               |   | $                     | (0.04   | )                      | $      | 0.00 |   | $ | (0.04 | ) | $ | 0.00 |   |
| Net income(loss) per share                                                                      |   | $                     | 0.01    |                   | $      | 0.07 |   | $ | (0.03 | ) | $ | 0.03 |   |
|                                                                                                 |        |                       |         |                        |        |  |  |  |  |  |  |  |  |  |

** **

Seeaccompanying notes to unaudited consolidated financial statements.

** **

** **

**4**

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**ASTREX, INC. ANDSUBSIDIARIES**

**CONSOLIDATEDSTATEMENTS OF CASH FLOWS**

**(Unaudited)**

** **
|                                                                                  |   | **FOR THE NINE MONTHS ENDED DECEMBER 31,** |       |
|---------------------------------------------------------------------------------------|--------|--------------------------------------------|------------|
|                                                                                  |   | **2001**                                   |       | **2000** |   |
|                                                                                  |   | **(000's) Omitted**                        |       | **(000's) Omitted** |   |
| Cash Flows From Operating Activities:                                                 |   |                                       |       |   |   |
| Net income from Continuing Operations                                                 |   | $                                          | 456        |   | $ | 552 |   |
| *Adjustments to reconcile net income  to net**cash provided by operating activities:* |   |                                       |       |   |   |
| Depreciation and amortization                                                         |   | 52                                         |       | 74 |   |
| Amortization of deferred stock compensation                                           |   | 8                                          |       | 10 |   |
| *Changes in assets and liabilities:*                                                  |   |                                       |       |   |   |
| Decrease (increase) in accounts receivable, net                                       |   | 848                                        |       | (78 | ) |
| Decrease (increase) in inventory                                                      |   | 125                                        |       | (729 | ) |
| Increase in prepaid expenses and othercurrent assets                                  |   | (23                                        | )          | (50 | ) |
| (Decrease) increase in accounts payable                                               |   | (888                                       | )          | 197 |   |
| (Decrease) increase in accrued liabilities                                            |   | (187                                       | )          | 256 |   |
|                                                                                  |   |                                       |       |   |   |
| **Net cash provided by continuing  operations**                                       |   | **391**                                    | ** ** | **232** | ** ** |
| **Net operating activities from  discontinued operations**                            |   | **(35**                                    | **)**      | **(45** | **)** |
| **Net cash provided by operating  activities**                                        |   | **356**                                    | ** ** | **187** | ** ** |
|                                                                                  |   |                                       |       |   |   |
| Cash flows used in investing activities:                                              |   |                                       |       |   |   |
| Capital expenditures                                                                  |   | (54                                        | )          | (57 | ) |
|                                                                                  |   |                                       |       |   |   |
| **Net cash used in investing  activities**                                            |   | **(54**                                    | **)**      | **(57** | **)** |
|                                                                                  |   |                                       |       |   |   |
| Cash flows from financing activities:                                                 |   |                                       |       |   |   |
| Purchase of Treasury Stock                                                            |   | (18                                        | )          | (25 | ) |
| Deferred financing costs                                                              |   | 6                                          |       | 8 |   |
| Principal payments under capital lease obligations                                    |   | -                                          |       | (28 | ) |
| Payments/(proceeds) under loans payable, net                                          |   | (100                                       | )          | (135 | ) |
|                                                                                  |   |                                       |       |   |   |
| **Net cash used in financing  activities**                                            |   | **(112**                                   | **)**      | **(180** | **)** |
|                                                                                  |   |                                       |       |   |   |
|                                                                                  |   |                                       |       |   |   |
| Net change in cash and cash equivalents                                               |   | 190                                        |       | (50 | ) |
|                                                                                  |   |                                       |       |   |   |
| Cash and cash equivalents - beginning of period                                       |   | 8                                          |       | 57 |   |
|                                                                                  |   |                                       |       |   |   |
| Cash and cash equivalents - end of period                                             |   | $                                          | 198        |   | $ | 7 |   |

** **

See accompanying notes to unaudited consolidated financialstatements.

** **

** **

5

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**ASTREX, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

** **

** **

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NOTE A - UNAUDITED FINANCIALSTATEMENTS

** **

** **

The consolidatedbalance sheet as of December 31, 2001 and the consolidated statements of incomefor the nine months and three months ended December 31, 2001 and 2000 and thestatement of cash flows for the nine months ended December 31, 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 December 31, 2001 (and forall periods presented) have been made.

** **

Certain information and note disclosures, normallyincluded in financial statements prepared in accordance with accountingprinciples generally accepted in the United States of America, have beencondensed or omitted.  It is suggestedthat these consolidated financial statements be read in conjunction with thefinancial statements and notes thereto included in the Annual Report on Form10-KSB for the year ended March 31, 2001 filed by the Company.  The results of operations for the periodsended December 31, 2001 and 2000 are not necessarily indicative of theoperating results for the respective full years.

** **

** **

** **

NOTE B — DISCONTINUED OPERATIONS

** **

** **

On November 1,2001, the measurment date, the Company approved a plan to close TF Cushing,Inc., (TF Cushing) a wholly owned subsidiary of the Company.  The decision was made based on TF Cushing’sdeclining sales over the past several years, and the Company’s opinion that areturn to profitability was unlikely. The Company also felt that TF Cushing’scustomer base, supplier base, and business focus (MRO vs OEM) weresignificantly different from the Company’s core business and therefore noteasily integrated into the Company’s core operations. The Company recognized aloss for the period ended December 31, 2001 from discontinued operations ofapproximately $80,000 (net of state net worth tax of $1,400) for the sevenmonths up to the measurement date.  TheCompany recognized a loss from disposal of its discontinued operations ofapproximately $265,000 from the measurement date to December 31, 2001.  The loss on disposal includes operatinglosses from the measurement date of approximately $44,000, loss on disposal ofinventory of approximately $70,000 and estimates for further impairment ofinventory caused by the disposal decision of $100,000.

 

 

6

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The remainder of the disposal loss includesliabilities for severance and estimates for miscellaneous expenses related tothe disposal of its TF Cushing subsidiary. The Company has retained TF Cushing’s remaining assets and assumed itsliabilities at December 31, 2001, consisting of net accounts receivable ofapproximately $44,000, net inventory of approximately $15,000 and liabilitiesof approximately $59,000. There were no net assets for the TF Cushingsubsidiary at December 31, 2001 and approximately $311,000 at March 31,2001.  For the nine months and threemonths ended December 31, 2000, the loss from discontinued operations wasapproximately $50,000 and $13,000, respectively.

 

 

** **

NOTE C — EARNINGS PER COMMON SHARE

 

 

The followingtable sets forth the reconciliation of the weighted average number of commonshares:

** **

** **

** **

** **
|                                                         |   | **Nine months ended** |       |
|--------------------------------------------------------------|--------|-----------------------|------------|
|                                                         |   | **December 31,**      |       |
|                                                         |   | **2001**              |       | **2000** |   |
|                                                         |   | **(Unaudited)**       | ** ** | **(Unaudited)** |   |
| Basic                                                        |   | 5,547,880             |       | 5,624,081 |   |
|                                                         |   |                  |       |   |   |
| Effect  of series B convertible preferred stock              |   | 1,816,756             |       | 1,159,127 |   |
| Effect  of dilutive securities (non-vested restricted stock) |   | 53,873                |       | 42,546 |   |
| Diluted                                                      |   | **7**,418,509         |       | 6,825,754 |   |

** **

** **

7

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** **
|                                                         |   | **Three months ended** |       |
|--------------------------------------------------------------|--------|------------------------|------------|
|                                                         |   | **December 31,**       |       |
|                                                         |   | **2001**               |       | **2000** |   |
|                                                         |   | **(Unaudited)**        | ** ** | **(Unaudited)** |   |
| Basic                                                        |   | 5,635,037              |       | 5,618,717 |   |
|                                                         |   |                   |       |   |   |
| Effect  of series B convertible preferred stock              |   | 1,714,969              |       | 1,897,381 |   |
| Effect  of dilutive securities (non-vested restricted stock) |   | 45,000                 |       | 65,000 |   |
| Diluted                                                      |   | 7,395,006              |       | 7,581,098 |   |

** **

 

 

 

NOTE C  — SHAREHOLDERS’ EQUITY

** **

During the nine months ended December 31, 2001, theCompany purchased 68,000 shares of its stock on the open market.  These shares were recorded as treasury stockat their aggregate cost of approximately $18,500.  During the fiscal year ended March 31, 2001, the Companypurchased 145,500 shares of its common stock for approximately $43,000 on theopen market.  These shares are beingheld as treasury shares.

 

On August 1, 2001, 20,000 shares of the Company’scommon stock which were granted to to the President on July 31, 2000, becamefully vested.  During the period August1, 2001 through December 31, 2001, 190,785 shares of the Company’s Series BConvertible Preferred Stock were converted into the Company’s common stock.

 

8

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**ASTREX, INC. AND SUBSIDIARIES**

**MANAGEMENT’S DISCUSSION AND ANALYSIS**

# **OR PLANOF OPERATIONS**

** **

** **

** **

**RESULTS OF OPERATIONS**

** **

                Duringthe quarter ending December 31, 2001 the Company approved and implemented aplan to close its wholly owned subsidiary, TF Cushing. TF Cushing had operatedas a separate Maintenance Repair Organization (“MRO”) distributor ofelectronic, electrical, and industrial supplies, with a customer base, supplierbase and business focus (MRO vs Original Equipment Manufacturer (“OEM”)),  significantly different from the Company’score business. Based on several years of declining sales, the potential loss oftwo key franchises, the Company’s opinion that a return to profitability wasextremely unlikley, and the Company’s opinion that TF Cushing’s business couldnot be efficiently integrated into its core business, the decision was made todiscontinue operations.

** **

                Thefollowing discussion of results of operations is from continuing operations andexclusive of the Company’s TF Cushing subsidiary.

** **

                Net income from continuingoperations for the nine months ended December 31, 2001 was approximately$456,000, a decrease of $96,000 or 17% from the same nine month period lastfiscal year. Net income from continuing operations for the three months endedDecember 31, 2001 was approximately $51,000, a decrease of $151,000 or 75% fromthe same three month period last fiscal year. The decrease for the nine month period ended December 31, 2001 isprimarily the result of lower sales volume in the third quarter of this year ascompared to the third quarter of last year offset by increases in sales for thefirst six months of this year.  Thedecrease in the three month period is primarily the result of a decrease insales volume for the three month period ended December 31, 2001 as compared tothe same three month period last year.

** **

                Salesdecreased by approximately $269,000 or 2%, for the nine months ended December31, 2001, from the comparable nine month period in 2000.  Sales decreased for the three months endedDecember 31, 2001, from the comparable three month period in 2000, byapproximately $852,000 or 20%. During the quarter ended December 31,2001, backlog decreased with confirmed but unshipped orders atJanuary 1, 2002 of approximately $3,527,000 as compared to approximately$4,376,000 on January 1, 2001, a decrease of approximately 19%.** **Bookings for the quarter endedDecember 31, 2001, were approximately $3,248,000 as compared to approximately$4,745,000 for the quarter ended December 31, 2000, or a decrease ofapproximately 32%.** **TheCompany attributes these weakening numbers to the overall weakness in thenational economy, and the much publicized decline in the overall globalelectronics market.

** **

** **

9

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**               **The Company’s grossmargin remained constant at 22% for both the nine month and three month periodsending December 31, 2001 as compared to the same nine month period last year.

 

** **

                Selling,general and administrative expenses increased by approximately $110,000, or 5%,for the nine months ended December 31, 2001 from the comparable previous ninemonth period in 2000 and decreased $43,000 or 6% for the three month periodended December 31, 2001 as compared to the same three month period lastyear.  The increase for the nine monthperiod was primarily the result of increases in advertising, salary, bonus,commission and employee benefit related expenses.   The decrease for the three month period is primarily the resultof reductions in direct sales related expenses such as bonuses, andcommissions.

** **

** **

                Interest expense decreased by approximately $26,000or 22% for the nine months and $12,000 or 32% for the three months endedDecember 31, 2001, from the previous comparable nine and three month period in2000 due to a reduction in outstanding principal balances and interest rates.

** **

** **

**               **The provision for incometaxes for the nine months and three months ended December 31, 2001 consistsprincipally of state and local taxes. The Company did not record a provisionfor income tax expense for the nine month and three months ended December 31,2000 based on the recognition of certain tax benefits available to the Company.

** **

# ** **

** **

** **

** **

**LIQUIDITY AND CAPITAL RESOURCES**

** **

TheCompany generated approximately $356,000 in cash from its operating activitiesfor the nine months ended December 31, 2001. At December 31, 2001, the Company had working capital of $5,676,000 andits stockholders’ equity was $4,561,000. The Company believes that its present working capital, cash generatedfrom operations and amounts available under the loan agreement will besufficient to meet its cash needs during the next year. The Company’s principalcredit facility is a line of credit and a term loan from a bank (“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 eligibleinventory and receivables, as defined. On December 31, 2001, the Company owed$1,900,000 on the Line. The Company’s relationship with its secured lender issatisfactory and the Company believes that the lending arrangement will beadequate for the foreseeable future.  TheCompany is currently renegotiating its current line of credit and intends toenter into a new facility agreement before April 30, 2002.

 

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CAUTIONARY LANGUAGE REGUARDING FORWARDLOOKING 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 theCompany’s business, including, without limitation, the disclosures made in theCompany’s Annual Report on Form 10-KSB for the fiscal year ended March 31, 2001under the caption “Management’s Discussion and Analysis of Financial Conditionand Results of  Operation.”

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# ** **

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**PART II - OTHER INFORMATION**

** **

** **

** **

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Item 2.  Changes in Securities and use of proceeds.

** **

**       **None

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Item 3. Defaults upon Senior Securities

** **

None

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Item 4.  Submission of Matters to a Vote of Security Holders.

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                None

 

 

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Item 5.  OtherInformation

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** **

In the nine months ended December 31, 2001, theCompany purchased 68,000 shares of its stock on the open market.  These shareswere recorded as treasury stock at their aggregate cost of approximately$18,500.

 

During the second and third quarter of fiscal yearended March 31, 2002, 190,785 shares of the Company’s Series BConvertible Preferred Stock have been converted to the Company’s common stock.

 

 

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

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** **

** **

** **

                 
| (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                                                                                                      |   |                                                                                              |

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SIGNATURES

** **

In accordance with the requirements of SecuritiesExchange Act of 1934, the registrant has duly caused this report to be signedon its behalf, thereunto duly authorized.

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** **

** **

|   |                           | ASTREX,  INC.                                       |
|--------|--------------------------------|-----------------------------------------------------|
|   |                           |                                                |
| Date:  | February  14, 2002        |                                                | By: | s/ Michael McGuire |
|   |                           | Michael McGuire                                     |
|   |                           | Director, President and                             |
|   |                           | Chief Executive Officer                             |
|   |                           |                                                |
|   |                           |                                                |
|   |                           | CHIEF FINANCIAL OFFICER                             |
|   |                           | OF ASTREX, INC.                                     |
|   |                           |                                                |
| Date:  |  February   14, 2002 |                                                | By: | s/  Lori A. Sarnataro |
|   |                           | Lori  A. Sarnataro                                  |
|   |                           | Chief  Financial Officer, Executive Vice President, |
|   |                           | Treasurer, and Secretary                            |
|        |                                |                                                     |  |  |  |

** **

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