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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

For the quarterly period ended October 30, 2004

OR

For the transition period from              to            

Commission file number 0-13200

Astro-Med, Inc.

(Exact name of registrant as specified in its charter)

(401) 828-4000

(Registrant’s telephone number, including area code)

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

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

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

Common Stock, $.05 Par Value – 5,298,639 shares (excluding treasury shares) as of December 6, 2004

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ASTRO-MED, INC.

INDEX

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Part I. FINANCIAL INFORMATION

ASTRO-MED, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

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ASTRO-MED, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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ASTRO-MED, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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ASTRO-MED, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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ASTRO-MED, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

October 30, 2004

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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

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

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

For the nine-months ended October 30, 2004 and November 1, 2003, respectively, the diluted per share amounts do not reflect options outstanding of 251,350 and 880,030, respectively. These outstanding options were not included in the weighted average common shares outstanding because the exercise price of the option was greater than the average market price or their effect was anti-dilutive.

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ASTRO-MED, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

October 30, 2004

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

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

(c) Revenue Recognition: The majority of the Company’s product sales are recorded at the time of shipment and when persuasive evidence of an arrangement exists, the seller’s price to the buyer is fixed or determinable and collectibility is reasonably assured. Provisions are made at the time the related revenue is recognized for the cost of any installation or training obligations. When a sale arrangement involves training or installation the deliverables in the arrangement are evaluated to determine whether they represent separate units of accounting. This evaluation occurs at inception of the arrangement and as each item in the arrangement is delivered. The total fee from the arrangement is allocated to each unit of accounting based on its relative fair value. Fair value for each element is established generally based on the sales price charged when the same or similar element is sold separately. Revenue is recognized when revenue recognition criteria for each unit of accounting are met. When other significant obligations remain after products are delivered, revenue is recognized only after such obligations are fulfilled.

NOTE 2 – COMPREHENSIVE INCOME

The Company’s total comprehensive income is as follows:

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ASTRO-MED, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

October 30, 2004

NOTE 3 – INVENTORIES

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

NOTE 4 – INCOME TAXES

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

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

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ASTRO-MED, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

October 30, 2004

NOTE 5 – SEGMENT INFORMATION

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

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

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ASTRO-MED, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 6 – PRODUCT WARRANTY LIABILITY

Changes in the Company’s product warranty liability during the period ending October 30, 2004 and November 1, 2003, respectively are as follows:

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ASTRO-MED, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Business Overview

This section should be read in conjunction with the Condensed Consolidated Financial Statements of the Company included elsewhere herein and the Company’s January 31, 2004 Form 10-K.

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

Test and Measurement Product Group (T&M) represents a suite of telemetry recorder products sold to the aerospace and defense industries, as well as portable data acquisition recorders, which offer diagnostic and test functions to a wide range of manufacturers, including paper, energy, automotive and steel fabrication.

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

Grass-Telefactor Product Group (G-T) encompasses diagnostic and monitoring products that serve the clinical neurophysiology markets as well as a range of biomedical instrumentation products and supplies focused on the life sciences markets.

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

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

Results of Operations

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

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ASTRO-MED, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Results of Operations (continued):

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

Sales in the quarter were $13,246,000, down approximately 8% from the prior year’s third quarter sales of $14,386,000. Domestic sales were $9,459,000, down 12% from $10,719,000 for the third quarter of the prior fiscal year. Sales through the Company’s international channels were $3,786,000, up 3% over previous the year’s third quarter sales of $3,669,000 and related primarily to the change in foreign exchange rates.

Gross profit dollars were $5,152,000 which generated a margin yield of 38.8% for the quarter as compared to a margin yield in last year’s third quarter of 41.1%. This quarter’s decline in the gross profit percentage can be attributed to product mix and lower manufacturing absorption rates.

Operating expenses in the quarter were $5,145,000. Selling and general administrative (SGA) spending increased 4% from last year to $4,076,000 as a result of increased personnel costs from the addition of field sales staff and foreign exchange conversion rates. Research & Development spending increased 12% from last year to $1,069,000. The increase in research & development spending can be attributed to an increase in personnel and project spending.

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

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

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

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

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ASTRO-MED, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Results of Operations (continued):

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

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

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

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

Sales for the first nine-months of the current year were $41,478,000, approximately flat with $41,623,000 from the first nine-months of the prior year. Domestic sales were $29,142,000, down 2% from $29,810,000 for the nine-months of the prior fiscal year. Sales through the Company’s international channels were $12,334,000, up 4% over previous year’s nine-months sales of $11,814,000. Excluding the favorable impact of foreign exchange rates, international sales were down 2% from the prior year.

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

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

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ASTRO-MED, INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Results of Operations (continued):

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

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

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

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

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