-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TwK6UDBSRgpK3xnwDF48SiigRDxWt+reJdaDRorgh5V5CfkUfQsjpqQG449na/Bj /Sjyca27yM/A2SVZsWUEsA== 0000927016-02-004043.txt : 20020813 0000927016-02-004043.hdr.sgml : 20020813 20020813153054 ACCESSION NUMBER: 0000927016-02-004043 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020629 FILED AS OF DATE: 20020813 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOSTON ACOUSTICS INC CENTRAL INDEX KEY: 0000805268 STANDARD INDUSTRIAL CLASSIFICATION: HOUSEHOLD AUDIO & VIDEO EQUIPMENT [3651] IRS NUMBER: 042662473 STATE OF INCORPORATION: MA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-15193 FILM NUMBER: 02729540 BUSINESS ADDRESS: STREET 1: 300 JUBILEE DRIVE STREET 2: P O BOX 6015 CITY: PEABODY STATE: MA ZIP: 01961-6015 BUSINESS PHONE: 5085385000 MAIL ADDRESS: STREET 1: 300 JUBILEE DRIVE STREET 2: P O BOX 6015 CITY: PEABODY STATE: MA ZIP: 01961-6015 10-Q 1 d10q.txt BOSTON ACOUSTICS FORM 10-Q - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------- FORM 10-Q (Mark One) [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 29, 2002 or [_] Transition Report pursuant Section 13 or 15 (d) of the Securities Exchange Act of 1934 for the transition period from __________ to __________ Commission File No. 33-9875 ----------------- BOSTON ACOUSTICS, INC. (Exact name of registrant as specified in its charter) Massachusetts 04-2662473 (State or other jurisdiction (I.R.S. employer of incorporation or identification no.) organization) 300 Jubilee Drive Peabody, Massachusetts 01960 (Address of Principal Executive Offices) (Zip Code) (978) 538-5000 (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 [_] There were 4,595,595 shares of Common Stock issued and outstanding as of August 13, 2002. - -------------------------------------------------------------------------------- Boston Acoustics, Inc. Index -----
Page ---- Part I: Financial Information Item 1. Financial Statements Consolidated Balance Sheets (Unaudited)- March 30, 2002 and June 29, 2002 4 Consolidated Statements of Income (Unaudited)- Three months ended June 30, 2001 and June 29, 2002 6 Consolidated Statements of Cash Flows (Unaudited)- Three months ended June 30, 2001 and June 29, 2002 7 Notes to Unaudited Consolidated Financial Statements 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 Part II: Other Information Items 1 through 6 15 Signatures 16
2 PART I: FINANCIAL INFORMATION Item 1: Financial Statements 3 Boston Acoustics, Inc. and Subsidiaries Consolidated Balance Sheets (Unaudited) Assets ------
March 30, 2002 June 29, 2002 -------------- ------------- Current Assets: Cash and cash equivalents $ 5,134,558 $ 4,779,845 Accounts receivable, net of allowance for doubtful accounts of approximately $366,000 and $357,000 at March 30, 2002 and June 29, 2002, respectively 10,830,538 11,110,685 Inventories 14,370,308 14,567,342 Deferred income taxes 1,724,000 1,724,000 Prepaid expenses and other current assets 1,010,792 1,078,529 ----------- ----------- Total current assets 33,070,196 33,260,401 ----------- ----------- Property and Equipment, at Cost: Machinery and equipment 16,833,179 17,010,553 Building and improvements 8,795,567 8,795,567 Office equipment and furniture 5,067,810 5,138,787 Land 1,815,755 1,815,755 Motor vehicles 255,956 255,956 ----------- ----------- 32,768,267 33,016,618 Less-Accumulated depreciation and amortization 18,848,303 19,649,788 ----------- ----------- 13,919,964 13,366,830 ----------- ----------- Other Assets, Net 1,428,286 1,427,444 ----------- ----------- $48,418,446 $48,054,675 =========== ===========
The accompanying notes are an integral part of these consolidated financial statements. 4 Boston Acoustics, Inc. and Subsidiaries Consolidated Balance Sheets (Unaudited) Liabilities and Shareholders' Equity ------------------------------------
March 30, 2002 June 29, 2002 -------------- ------------- Current Liabilities: Accounts payable $ 5,230,684 $ 6,163,954 Accrued payroll and payroll- related expenses 1,185,529 1,228,858 Dividends payable 390,626 390,626 Other accrued expenses 1,095,369 1,113,660 Current maturity of line of credit 2,500,000 1,250,000 ----------- ----------- Total current liabilities 10,402,208 10,147,098 ----------- ----------- Minority Interest in Joint Venture 18,265 23,620 ----------- ----------- Shareholders' Equity: Common stock, $.01 par value - Authorized -- 8,000,000 shares Issued -- 5,100,314 shares 51,003 51,003 Additional paid-in capital 1,191,988 1,191,988 Subscriptions receivable (272,917) (272,917) Retained earnings 42,648,558 42,534,542 ----------- ----------- 43,618,632 43,504,616 Less-Treasury stock, 504,700 shares, at cost 5,620,659 5,620,659 ----------- ----------- Total shareholders' equity 37,997,973 37,883,957 ----------- ----------- $48,418,446 $48,054,675 =========== ===========
The accompanying notes are an integral part of these consolidated financial statements. 5 Boston Acoustics, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited)
Three Months Ended ------------------ June 30, 2001 June 29, 2002 ------------- ------------- Net sales $20,442,904 $ 18,257,277 Cost of goods sold 14,932,474 12,448,444 ----------- ------------ Gross profit 5,510,430 5,808,833 ----------- ------------ Selling and marketing expenses 2,530,046 2,626,924 General and administrative expenses 1,155,093 1,231,520 Engineering and development expenses 1,324,256 1,554,583 ----------- ------------ Total operating expenses 5,009,395 5,413,027 ----------- ------------ Income from operations 501,035 395,806 Interest income 43,741 31,137 Interest expense (160,028) (19,165) Other income (expense) (11,094) 18,831 ----------- ------------ Income before provision for income taxes 373,654 426,609 Provision for income taxes 203,000 150,000 ----------- ------------ Net income $ 170,654 $ 276,609 =========== ============ Net income per share Basic $ .03 $ .06 =========== ============ Diluted $ .03 $ .06 =========== ============ Weighted average common shares outstanding (Note 3): Basic 4,929,114 4,595,595 Diluted 4,941,282 4,673,688 Dividends per share $ .085 $ .085 =========== ============
The accompanying notes are an integral part of these consolidated financial statements. 6 Boston Acoustics, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended ------------------ June 30, 2001 June 29, 2002 ------------- ------------- Cash flows from operating activities: Net income $ 170,654 $ 276,609 Adjustments to reconcile net income to net cash provided by operating activities - Depreciation and amortization 671,973 801,485 Changes in assets and liabilities - Accounts receivable 148,588 (280,147) Inventories 5,445,141 (197,034) Prepaid expenses and other current assets (60,031) (67,737) Accounts payable 560,674 933,270 Accrued payroll and other accrued expenses (1,068,284) 61,621 Accrued income taxes 73,365 - ----------- ----------- Net cash provided by operating activities 5,942,080 1,528,067 ----------- ----------- Cash flows from investing activities: Purchases of property and equipment (210,997) (248,351) Decrease in other assets 11,582 6,197 ----------- ----------- Net cash used in investing activities (199,415) (242,154) ----------- ----------- Cash flows from financing activities: Dividends paid (418,990) (390,626) Repayments on line of credit (4,000,000) (1,250,000) ----------- ----------- Net cash used in financing activities (4,418,990) (1,640,626) ----------- ----------- Net increase (decrease) in cash and cash equivalents 1,323,675 (354,713) Cash and cash equivalents, beginning of period 2,785,846 5,134,558 ----------- ----------- Cash and cash equivalents, end of period $ 4,109,521 $ 4,779,845 =========== =========== Supplemental Disclosure of Non-cash Financing and Investing Activities: Dividends payable $ 418,863 $ 390,626 =========== =========== Forgiveness of subscription receivable $ 19,500 $ - =========== =========== Minority interest in foreign subsidiary $ 14,080 $ 5,355 =========== =========== Supplemental Disclosure of Cash Flow Information: Cash paid for income taxes $ 39,000 $ 22,000 =========== =========== Cash paid for interest $ 157,629 $ 19,557 =========== ===========
The accompanying notes are an integral part of these consolidated financial statements. 7 Boston Acoustics, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements (1) Basis of Presentation The unaudited consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission and include, in the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of interim period results. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The Company believes, however, that its disclosures are adequate to make the information presented not misleading. The results for the three-month period ended June 29, 2002 are not necessarily indicative of results to be expected for the full fiscal year. These financial statements should be read in conjunction with the Company's Annual Report included in its Form 10-K for fiscal year ended March 30, 2002. (2) Inventories Inventories are stated at the lower of cost (first-in, first-out) or market and consist of the following: March 30, 2002 June 29, 2002 -------------- ------------- Raw materials $ 4,345,760 $ 4,997,623 Work-in-process 1,317,223 1,168,787 Finished goods 8,707,325 8,400,932 ----------- ----------- $14,370,308 $14,567,342 =========== =========== Work-in-process and finished goods inventories consist of materials, labor and manufacturing overhead. (3) Net Income Per Common Share The Company follows the provisions of Statement of Financial Accounting Standards (SFAS) No. 128, Earnings per Share. SFAS No. 128 establishes standards for computing and presenting earnings per share (EPS) and applies to entities with publicly held common stock or potential common stock. Basic EPS is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution from common stock equivalents (stock options). This standard requires presentation of both basic and diluted earnings per share on the face of the consolidated statements of income. These financial statements have been prepared and presented based on this standard. For the three-month periods ended June 29, 2002 and June 30, 2001, there were 190,800 and 412,600 options respectively, that have been excluded from the weighted average number of common and dilutive potential shares outstanding, as their effect would be antidilutive. 8 The computation of basic and diluted shares outstanding, as required by SFAS No. 128, is as follows: For the three months ended June 30, 2001 June 29, 2002 ------------- ------------- Basic weighted average common shares outstanding 4,929,114 4,595,595 Dilutive effect of assumed exercise of stock options 12,168 78,093 --------- --------- Weighted average common shares outstanding assuming dilution 4,941,282 4,673,688 ========= ========= (4) Revenue Recognition The Company recognizes revenue in accordance with the Securities and Exchange Commission's Staff Accounting Bulletin 101 (SAB 101), Revenue Recognition. Revenue is recognized when products are shipped to customers, provided that there are no uncertainties regarding customer acceptance, there is persuasive evidence of an arrangement, the sales price is fixed or determinable and collection of the related receivable is probable. The Company's standard sales terms provide that shipping terms are FOB shipping point, and that title and risk of loss or damage pass to customer upon delivery of products to the carrier. At the time of revenue recognition, the Company provides reserves for sales returns and rebates, timely pay discounts, and freight reserves. The Company charges many of its customers shipping and freight costs related to the delivery of its products. Accordingly, the Company follows the provisions of Emerging Issues Task Force Issue No. 00-10, Accounting for Shipping and Handling Fees and Costs. Amounts charged to customers for shipping and handling costs are included in net sales in the accompanying consolidated statements of income. The related shipping and handling costs are recorded in cost of sales in the accompanying consolidated statements of income. (5) Segment Reporting The Company has determined that it has two reportable segments: 1) core, and 2) original equipment manufacturer (OEM) and multimedia. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company does not allocate operating expenses between its two reportable segments. Accordingly, the Company's measure of profit for each reportable segment is based on gross profit. 9
OEM and Three months ended June 29, 2002 Core Multimedia Total -------------------------------- ---- ---------- ----------- Net Sales $12,800,078 $ 5,457,199 $18,257,277 =========== =========== =========== Gross profit $ 4,968,339 $ 840,494 $ 5,808,833 =========== =========== =========== OEM and Three months ended June 30, 2001 Core Multimedia Total -------------------------------- ---- ---------- ----------- Net Sales $13,336,052 $ 7,106,852 $20,442,904 =========== =========== =========== Gross profit $ 4,584,778 $ 925,652 $ 5,510,430 =========== =========== ===========
(6) Significant Customers and Concentration of Credit Risk For the three-month periods ended June 29, 2002 and June 30, 2001, one OEM/Multimedia customer represented approximately 29% and 32% of the Company's net sales, respectively, and one core customer represented approximately 13% of net sales for both reporting periods. One OEM/Multimedia customer represented approximately 16% of net accounts receivable and two core customers represented approximately 22% and 12% of net accounts receivable at June 29, 2002, respectively. (7) International Operations The Company maintains sales concentrations in Europe, Asia, and Canada in addition to distributing product through three foreign subsidiaries. Export sales accounted for approximately 15% and 19% of net sales for the three-month periods ended June 29, 2002 and June 30, 2001, respectively. (8) Accounting for Customer Consideration The Company adopted the provisions of Emerging Issues Task Force Issue No. 00-25, Vendor Income Statement Characterization of Consideration Paid to a Reseller of the Vendor's Products, (EITF 00-25), as codified by EITF 01-09 beginning January 1, 2002. EITF 00-25 addresses whether consideration given to a customer from a vendor should be classified as an adjustment to the selling price of the product sold or as a cost of the product sold. The task force reached a consensus that cash consideration given by a vendor to a customer is presumed to be a reduction of the selling price of the vendor's products or services and therefore, should be characterized as a reduction of revenue when recognized in the vendor's income statement. The Company offers cooperative advertising programs to its largest customers whereby the customers can earn sales credits for approved advertisements involving the Company's products. The Company has historically recorded these credits as an adjustment to the selling price of its products. For the three-month periods ending June 29, 2002 and June 30, 2001, cooperative advertising credits included as sales adjustments were approximately $633,000 and $436,000, respectively. (9) Reclassifications Certain amounts in the prior-period consolidated financial statements have been reclassified to conform to the current period's presentation. 10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations The following table sets forth the results of operations for the three-month period ended June 30, 2001 and June 29, 2002 expressed as percentages of net sales. Three Months Ended ------------------ June 30, 2001 June 29, 2002 ------------- ------------- Net sales 100.0 % 100.0 % Cost of goods sold 73.0 68.2 ----- ----- Gross profit 27.0 31.8 ----- ----- Selling and marketing expenses 12.4 14.4 General and administrative expenses 5.6 6.8 Engineering and development expenses 6.5 8.5 ----- ----- Total operating expenses 24.5 29.7 ----- ----- Income from operations 2.5 2.1 Interest income (expense), net (0.6) 0.1 Other income (expense) (0.1) 0.1 ----- ----- Income before provision for income taxes 1.8 2.3 Provision for income taxes 1.0 0.8 ----- ----- Net income 0.8 % 1.5 % ===== ===== Net sales decreased 11 percent, from approximately $20,443,000 during the first quarter of fiscal 2002 to approximately $18,257,000 during the first quarter of fiscal 2003. The overall reduction in net sales is the result of the continued difficult economic environment and its impact on the Company's business segments, particularly OEM and multimedia speaker sales. Net sales of the Company's core products decreased approximately 4 percent or approximately $536,000 compared to the same three-month period a year ago, while net sales of the OEM and Multimedia Retail segment were down 23 percent or approximately $1,650,000. During the three-month period ended June 29, 2002, the Company introduced upgraded versions of its in-wall/in-ceiling speaker systems. The DSi Series of speaker systems consist of nine models; 4 in-wall models and 5 in-wall/in-ceiling round speakers which can be used for stereo, home theater or, whole-house music applications and range in price from $150 to $600 per pair. Introductions of upgraded versions of existing product offerings, while permitting the Company to remain competitive, are not likely to result in significant increases in revenue over the long term. During the last week of June 2002, the Company launched one of its new high performance after-market component speakers. The Z6 has a suggested retail of $1,000 and has a highly stylized design that minimizes installation effort and cost. Although sales of this new automotive product did not have a material effect on the Core segment sales during the quarter (primarily because of the timing of the introduction late during the quarter), the Z component speakers are expected to enhance the Company's leadership in the premium after-market component speaker business and may result in additional revenues in subsequent periods. 11 Expenses included in the cost of goods sold line item are raw material, direct labor, freight, and indirect costs associated with the Company's manufacturing operations. The Company's gross margin for the three-month period ended June 29, 2002 increased as a percentage of net sales from 27.0% to 31.8% due primarily to improved margins from the Core segment of sales. The Core segment of products have higher gross margins and have also benefited from the continued improvements in manufacturing efficiencies. Gross margin for the OEM/Multimedia segment sales increased slightly as a result of a changing product mix as compared to the same three-month period a year ago. Selling and marketing expenses include payroll and payroll-related costs as well as corporate advertising and literature costs associated with the sale and marketing of the Company's products. Expenses included in the general and administrative expenses line item are management and administrative payroll and other expenses associated with the Company's operations outside of manufacturing, research and development and sales and marketing, and include professional services, consulting arrangements, and investor relations expenditures. Engineering and development expenses include payroll and payroll-related expenses attributed to the design and enhancement of existing products along with the creation of new products; associated expenses include supplies, samples, test equipment, and inventory consumed. Total operating expenses increased in both absolute dollars and as a percentage of net sales during the three-month period ended June 29, 2002. This increase was anticipated and resulted from the Company's investment in personnel and process (approximately $300,000 as compared to the corresponding three-month period a year ago) to meet new business opportunities in new markets, particularly the OEM automotive market. Selling and marketing expenses have increased in absolute dollars (approximately $97,000) and as a percentage of sales primarily due to increased corporate advertising and literature expenses compared to the same period a year ago. General and administrative expenses increased in absolute dollars (approximately $76,000) and as a percentage of sales due to the value of donations contributed to charitable organizations as compared to the same three-month period a year ago. Engineering and development expenses have increased in absolute dollars (approximately $230,000) and as a percentage of sales in preparation to meet new business challenges particularly the OEM automotive market. This has resulted in increased personnel expenses and consulting fees for the first quarter of fiscal 2003 as compared to the corresponding period in fiscal 2002. The Company posted net interest income of approximately $12,000 for the three-month period ended June 29, 2002 compared to net interest expense of approximately $116,000 for the corresponding period last year. The turnaround is due to a reduction in the Company's outstanding line of credit balance for the period ended June 29, 2002 as compared to the period ended June 30, 2001. At June 29, 2002, there was $1,250,000 outstanding on the Company's line of credit as compared to $7,500,000 at June 30, 2001. The Company's effective income tax rate decreased to 35.2% for the three-month period ended June 29, 2002 from 54.3% for the three-month period ended June 30, 2001. The effective income tax rate for the three-month period ended June 30, 2001 was unusually high as a result of operating losses at the Company's foreign subsidiaries that could not be benefited. Net income for the three-month period ended June 29, 2002 increased from approximately $171,000 to $277,000 while diluted earnings per share doubled from $.03 to $.06 per share. The increase is primarily attributable to improved margins in the Core segment, a shift in the product mix towards higher margin Core products, lower interest expense and a lower effective income tax rate. 12 Liquidity and Capital Resources As of June 29, 2002, the Company's working capital was approximately $23,113,000, an increase of $445,000 since the end of fiscal 2002. The increase in working capital was due to increases in accounts receivable, inventory and payments made on the Company's line of credit borrowings partially offset by increased accounts payable. The Company's cash and cash equivalents were approximately $4,780,000 at June 29, 2002, a decrease of $355,000 since March 30, 2002. Current liabilities decreased by approximately $255,000 due to repayments on the line of credit offset by an increase in accounts payable. The Company has two lines of credit with two banking institutions totaling $26,500,000. At June 29, 2002, the Company had borrowings totaling $1,250,000 under its $25 million revolving credit agreement, and $0 outstanding under its $1.5 million revolving credit agreement. Based on current market prices, management believes that the Company's stock is undervalued and that the current Company stock repurchase program is a good investment of available funds. Repurchases are made from time to time on the open market at prevailing market prices and in negotiated transactions off the market. The repurchase program is expected to continue through the end of the current fiscal year unless extended or shortened by the Board of Directors. Repurchased shares will be held in treasury and, at the present, the Company has no plans for their reissuance. Given the company's historical profitability and its ability to manage expenses, the Company believes that its current resources are adequate to meet its requirements for working capital and capital expenditures through the foreseeable future. Significant Customers The Company's financial results for the three-month period ending June 29, 2002 include significant OEM sales of multimedia speaker systems to Gateway, Inc. ("Gateway"). For the three-month period ended June 29, 2002, Gateway accounted for 29.4% of the Company's net sales. The terms of these sales are governed by a Master Supply Agreement between Gateway and the Company which defines such issues as ordering and invoicing procedures, shipping charges, warranties, repair service support, product safety requirements, etc. This Master Supply Agreement with Gateway does not contain minimum or scheduled purchase requirements; therefore, purchase orders by Gateway may fluctuate significantly from quarter to quarter. Based on information currently available from our OEM customer, the Company anticipates that our OEM sales should decrease during fiscal 2003 as compared to fiscal 2002. Although the loss of Gateway as a customer or the loss of any significant portion of orders from Gateway could have a material adverse effect on the Company's business, results of operations and financial condition, the Company's management has taken steps (including pursuit of additional OEM customers, expansion of the Company's automotive products offerings and renewed efforts to increase sales of the Company's Core products) which it believes will mitigate the adverse consequences of the expected decline in orders from Gateway. Cautionary Statements The Private Securities Litigation Reform Act of 1995 contains certain safe harbors regarding forward-looking statements. From time to time, information provided by the Company or statements made by its directors, officers, or employees may contain "forward-looking" information which involve risk and uncertainties. Any statements in this report that are not statements of historical fact are forward-looking statements (including, but not limited to, statements concerning the characteristics and growth of the Company's market and customers, the Company's objectives and plans for future operations, and the Company's expected liquidity and capital resources). Such forward-looking statements are based on a number of assumptions and involve a number of risks and uncertainties, and accordingly, actual results could differ materially. Factors that may cause such differences include, but are not limited to: the continued and future acceptance of the Company's products, the rate of growth in the audio industry; the presence of competitors with greater technical, marketing and financial resources; the Company's ability to promptly and effectively respond to technological change to meet evolving consumer demands; capacity and supply constraints or difficulties; and the Company's ability to successfully integrate new operations. 13 The words "believe," "expect," "anticipate," "intend" and "plan" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. For a further discussion of these and other significant factors to consider in connection with forward-looking statements concerning the Company, reference is made to Exhibit 99 of the Company's Form 8-K filed on July 18, 1996. 14 PART II: OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes in Securities None Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K The following exhibits are filed herewith: Exhibit 99.1 Certification Pursuant to 18 U.S.C. Section 1350 Exhibit 99.2 Certification Pursuant to 18 U.S.C. Section 1350 The following reports on Form 8-K were filed during the quarter ended June 29, 2002: a.) Item 5. Announcement of the Company's entry into the automotive audio systems OEM market. b.) Item 4. Reporting the dismissal of Arthur Andersen LLP as the Company's independent auditor. 15 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Boston Acoustics, Inc. ---------------------- Registrant Date: August 13, 2002 By: /s/ Andrew G. Kotsatos ---------------------- Andrew G. Kotsatos Director, Chairman of the Board and Treasurer Date: August 13, 2002 By: /s/ Moses A. Gabbay ------------------- Moses A. Gabbay Director and Chief Executive Officer Date: August 13, 2002 By: /s/ Allan J. Evelyn ------------------- Allan J. Evelyn Director and President Date: August 13, 2002 By: /s/ Debra A. Ricker-Rosato -------------------------- Debra A. Ricker-Rosato Vice President and Chief Accounting Officer 16 EX-99.1 3 dex991.txt CERTIFICATION FROM CEO Exhibit 99.1 Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes - Oxley Act of 2002 In connection with the Quarterly Report of Boston Acoustics, Inc., a Massachusetts corporation (the "Company"), on Form 10-Q for the period ended June 29, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, the Chief Executive Officer, hereby certifies pursuant to 18 U.S.C. ss.1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that: (1) the Report of the Company filed today pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), fully complies with the requirements of Section 13(a) of the Exchange Act; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. By: /s/ Moses A. Gabbay ------------------------- Moses A. Gabbay Chief Executive Officer August 13, 2002 EX-99.2 4 dex992.txt CERTIFICATION FROM VICE PRESIDENT - FINANCE Exhibit 99.2 Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes - Oxley Act of 2002 In connection with the Quarterly Report of, Boston Acoustics, Inc., a Massachusetts corporation (the "Company"), on Form 10-Q for the period ended June 28, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, as Vice President - Finance and chief financial officer of the Company, hereby certifies pursuant to 18 U.S.C. ss.1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that: (1) the Report of the Company filed today pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), fully complies with the requirements of Section 13(a) of the Exchange Act; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. By: /s/ Debra A. Ricker-Rosato -------------------------- Debra A. Ricker-Rosato Vice President - Finance August 13, 2002 -----END PRIVACY-ENHANCED MESSAGE-----