-----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, FhMpiiKtoV7UHim/de/E31i8sCbEiTwpOZJYao3YksnNCjE+pBolNTjeSKxVHy6A ycSKwlkFhbqMWZj/bWl4Ww== 0001047469-99-004087.txt : 19990210 0001047469-99-004087.hdr.sgml : 19990210 ACCESSION NUMBER: 0001047469-99-004087 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981226 FILED AS OF DATE: 19990209 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: SEC FILE NUMBER: 000-15193 FILM NUMBER: 99526309 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 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 DECEMBER 26, 1998 OR [] TRANSITION REPORT PURSUANT TO 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 5,011,381 shares of Common Stock issued and outstanding as of February 5, 1999. - -------------------------------------------------------------------------- Boston Acoustics, Inc. Index -----
Page ---- Part I: Financial Information Item 1. Financial Statements Consolidated Balance Sheets (Unaudited)- March 28, 1998 and December 26, 1998 4 Consolidated Statements of Income (Unaudited)- Three months and Nine Months ended December 27, 1997 and December 26, 1998 6 Consolidated Statements of Cash Flows (Unaudited)- Nine Months ended December 27, 1997 and December 26, 1998 7 Notes to Unaudited Consolidated Financial Statements 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 Part II: Other Information Items 1 through 6 14 Signatures 15
2 PART I: FINANCIAL INFORMATION Item 1: Financial Statements 3 Boston Acoustics, Inc. and Subsidiaries Consolidated Balance Sheets (Unaudited) Assets
March 28, 1998 December 26, 1998 -------------- ----------------- Current Assets: Cash and cash equivalents $ 3,870,569 $ 1,163,469 Accounts receivable, net of reserves of approximately $402,000 and $516,000, respectively 11,439,178 19,194,033 Inventories 12,617,077 28,032,852 Deferred income taxes 1,092,000 1,092,000 Prepaid expenses and other current assets 395,087 215,940 ----------- ----------- Total current assets 29,413,911 49,698,294 ----------- ----------- Property and Equipment, at cost: Land 1,433,365 1,433,365 Building and improvements 7,061,479 7,146,284 Machinery and equipment 8,667,671 10,734,232 Office equipment and furniture 1,847,326 3,553,929 Motor vehicles 288,948 361,090 ----------- ----------- 19,298,789 23,228,900 Less-accumulated depreciation and amortization 8,005,621 9,928,116 ----------- ----------- ----------- ----------- 11,293,168 13,300,784 ----------- ----------- Other Assets: Other assets, net 1,792,125 1,394,848 ----------- ----------- $42,499,204 $64,393,926 ----------- ----------- ----------- -----------
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 28, 1998 December 26, 1998 -------------- ----------------- Current Liabilities: Accounts payable $ 3,224,208 $ 14,290,926 Accrued payroll and payroll- related expenses 1,392,171 1,723,357 Dividends payable 414,287 424,140 Other accrued expenses 922,216 1,387,011 Accrued income taxes 142,075 104,274 Current maturity of line of credit 3,000,000 3,000,000 ----------- ----------- Total current liabilities 9,094,957 20,929,708 ----------- ----------- Line of credit, net of current portion 9,500,000 12,078,353 Commitments Shareholders' Equity: Common stock, $.01 par value Authorized -- 8,000,000 shares Issued - 6,936,327 and 4,990,380 shares at March 28, 1998 and December 26, 1998, respectively 69,363 49,904 Additional paid-in capital 5,831,724 484,000 Retained earnings 46,245,277 30,851,961 ----------- ----------- 52,146,364 31,385,865 Less-Treasury stock, 1,964,881 shares at March 28, 1998, at cost. 28,242,117 --- ----------- ----------- Total shareholders' equity 23,904,247 31,385,865 ----------- ----------- $42,499,204 $64,393,926 ----------- ----------- ----------- -----------
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 Nine Months Ended ------------------ ----------------- December 27, December 26, December 27, December 26, 1997 1998 1997 1998 ------------ ------------ ------------ ------------ Net sales $ 27,187,429 $ 37,305,613 $ 57,738,674 $ 85,155,939 Cost of goods sold 16,727,826 25,070,440 34,611,336 56,523,377 ------------ ------------ ------------ ------------ Gross profit 10,459,603 12,235,173 23,127,338 28,632,562 ------------ ------------ ------------ ------------ Selling and marketing expenses 2,267,937 2,975,878 6,016,009 7,372,786 General and administrative expenses 1,023,254 1,460,654 3,104,196 3,561,538 Engineering and development expenses 927,535 1,374,400 2,490,884 3,677,003 Total expenses 4,218,726 5,810,932 11,611,089 14,611,327 ------------ ------------ ------------ ------------ Income from operations 6,240,877 6,424,241 11,516,249 14,021,235 Interest income 26,159 17,815 168,772 71,217 Interest expense (347,676) (219,618) (789,080) (542,081) ------------ ------------ ------------ ------------ Income before provision for income taxes 5,919,360 6,222,438 10,895,941 13,550,371 Provision for income taxes 2,307,000 2,269,000 4,173,000 5,015,000 ------------ ------------ ------------ ------------ Net income $ 3,612,360 $ 3,953,438 $ 6,722,941 $ 8,535,371 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Basic earnings per share $ .73 $ .79 $ 1.26 $ 1.71 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Diluted earnings per share $ .70 $ .75 $ 1.23 $ 1.62 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Weighted average common shares outstanding Basic 4,964,022 4,989,609 5,320,415 4,982,424 Diluted 5,137,211 5,270,648 5,463,671 5,278,824 Dividends per share $ .083 $ .085 $ .250 $ .253 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
The accompanying notes are an integral part of these consolidated financial statements. 6 Boston Acoustics, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended ----------------- December 27, 1997 December 26, 1998 ----------------- ----------------- Cash flows from operating activities: Net income $ 6,722,941 $ 8,535,371 Adjustments to reconcile net income to net cash provided by (used in) operating activities- Depreciation and amortization 1,274,934 2,368,964 Provision for doubtful accounts 69,800 133,100 Compensation expense related to restricted stock and warrants 434,227 --- Changes in assets and liabilities -- Accounts receivable (6,230,433) (7,887,955) Inventories (2,725,103) (15,415,775) Prepaid expenses and other current assets 573,335 179,147 Accounts payable 1,695,336 11,066,718 Accrued payroll and other accrued expenses 870,065 795,981 Accrued income taxes 195,639 (37,801) ----------------- ----------------- Net cash provided by (used in) operating activities 2,880,741 (262,250) ----------------- ----------------- Cash flows from investing activities: Purchase of property and equipment, net (657,904) (3,930,111) Proceeds from sale of held-to-maturity investments 3,361,422 --- Increase in other assets (31,892) (1,306) ----------------- ----------------- Net cash provided by (used in) investing activities 2,671,626 (3,931,417) ----------------- ----------------- Cash flows from financing activities: Dividends paid (1,348,162) (1,253,168) Stock dividend fractional share payment --- (480) Purchase of treasury stock (23,912,402) --- Proceeds from line of credit 21,125,000 9,600,000 Payments on line of credit (5,125,000) (7,100,000) Proceeds from exercise of stock options 333,795 240,215 ----------------- ----------------- Net cash used in financing activities (8,926,769) 1,486,567 ----------------- ----------------- Decrease in cash and cash equivalents (3,374,402) (2,707,100) Cash and cash equivalents, beginning of period 4,937,232 3,870,569 ----------------- ----------------- Cash and cash equivalents, end of period $ 1,562,830 $ 1,163,469 ----------------- ----------------- ----------------- ----------------- Supplemental Disclosure of NonCash Financing Activities: Dividends payable $ 413,871 $ 424,140 Retirement of treasury stock $ --- $ 28,242,117 ----------------- ----------------- Supplemental Disclosure of Cash Flow Information: Cash paid for income taxes $ 4,003,599 $ 5,052,800 ----------------- ----------------- ----------------- ----------------- Cash paid for interest $ 789,080 $ 557,672 ----------------- ----------------- ----------------- -----------------
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 and nine-month periods ended December 26, 1998 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 28, 1998. (2) Inventories Inventories are stated at the lower of cost (first-in, first-out) or market and consist of the following:
March 28, 1998 December 26, 1998 --------------- ----------------- Raw materials and work-in process $ 7,473,368 $11,232,701 Finished goods 5,143,709 16,800,151 $ 12,617,077 $28,032,852 --------------- ----------------- --------------- -----------------
Work-in-process and finished goods inventories consist of materials, labor and manufacturing overhead. (3) Stockholders Equity On July 13, 1998, the Company's Board of Directors authorized an increase in the authorized shares of common stock to 8.0 million shares and a three-for-two stock split effected in the form of a stock dividend. All share and per share amounts in the accompanying financial statements and footnotes have been retroactively restated to reflect the stock split. Accordingly, approximately $23,000 was transferred from additional paid-in capital to common stock. In October 1998, the Company retired 1,964,881 shares of treasury stock that had a cost of approximately $28,242,000. As a result of the retirement of these shares, the Company charged approximately $22,635,000 to retained earnings. (4) Net Income Per Common Share In February 1997, the Financial Accounting Standards Board issued 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. The Company has restated earnings per share for the comparative periods for fiscal 1998 as required by SFAS No. 128. 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 and 8 warrants). For the periods ended December 27, 1997 and December 26, 1998, there were no antidilutive shares for purposes of earnings per share. A reconciliation of basic and diluted shares outstanding, as required by SFAS No. 128, is as follows:
Three Months Ended Nine Months Ended ------------------ ----------------- December 27, December 26, December 27, December 26, 1997 1998 1997 1998 ----------- ----------- ----------- ----------- Basic weighted average common shares outstanding 4,964,022 4,989,609 5,320,415 4,982,424 Dilutive effect of assumed exercise of stock options and warrant 173,189 281,039 143,256 296,400 ----------- ----------- ----------- ----------- Weighted average common shares outstanding assuming dilution 5,137,211 5,270,648 5,463,671 5,278,824 ----------- ----------- ----------- -----------
(5) Stock Options The following is a summary of stock option activity:
Weighted Number of Price Average Options Range Price - ------------------------------------------------------------------------------------------------------ Outstanding at March 28, 1998 501,854 $11.33 - $19.89 $14.86 Options granted 63,750 $20.25 $20.25 Options exercised (18,953) $11.33 - $13.00 $12.67 - ------------------------------------------------------------------------------------------------------ Outstanding at December 26, 1998 546,561 $11.67 - $20.25 $15.56 - ------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------ Exercisable at December 26, 1998 162,240 $11.67 - $14.67 $13.69 - ------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------
9 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 and six-month periods ended December 27, 1997 and December 26, 1998 expressed as percentages of net sales.
Three Months Ended Nine Months Ended ------------------ ----------------- December 27, December 26, December 27, December 26, 1997 1998 1997 1998 ----------- ----------- ----------- ----------- Net sales 100.0 % 100.0 % 100.0 % 100.0 % Cost of goods sold 61.5 67.2 59.9 66.4 ----------- ----------- ----------- ----------- Gross profit 38.5 32.8 40.1 33.6 ----------- ----------- ----------- ----------- Selling and marketing expenses 8.3 8.0 10.4 8.6 General & administrative expenses 3.8 3.9 5.4 4.2 Engineering & development expenses 3.4 3.7 4.3 4.3 ----------- ----------- ----------- ----------- 15.5 15.6 20.1 17.1 ----------- ----------- ----------- ----------- Income from operations 23.0 17.2 20.0 16.5 Interest income (expense), net (1.2) (0.5) (1.1) (0.6) ----------- ----------- ----------- ----------- Income before provision for income taxes 21.8 16.7 18.9 15.9 Provision for income taxes 8.5 6.1 7.3 5.9 ----------- ----------- ----------- ----------- Net income 13.3 % 10.6 % 11.6 % 10.0 % ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net sales increased 37%, from approximately $27,187,000 during the third quarter of fiscal 1998 to approximately $37,306,000 during the third quarter of fiscal 1999. For the nine months ended December 26, 1998 net sales increased approximately 48% from approximately $57,739,000 to approximately $85,156,000. The overall sales increase for both the three-month and nine-month periods ended December 26, 1998 was primarily due to the OEM sales of multimedia speaker systems to Gateway, Inc. ("Gateway"), a leading global direct marketer of PC products. These products included the BA635 10 three-piece system, the Digital MediaTheater(TM) three-piece system, and the DigitalTheater(TM) 6000, a complete Dolby(R) Digital 5.1 Channel Home Theater System. During the three-month and nine-month periods ended December 26, 1998, growth in the Company's core business was primarily the result of the continued success of the ProSeries automotive component speaker systems and the subwoofer/satellite home theater speaker systems. The Company's gross margin for the three-month and nine-month periods ended December 26, 1998 increased in absolute dollars but decreased as a percentage of net sales due primarily to a shift in the sales mix to loudspeaker models with slightly lower margins, particularly the Company's OEM multimedia speaker systems. Total operating expenses increased in absolute dollars for both the three-month and nine-month periods ended December 26, 1998, while remaining relatively stable as a percentage of net sales during the three-month period ended December 26, 1998 and decreasing as a percentage of net sales for the nine-month period ended December 26, 1998 compared to the corresponding periods a year ago. Selling and marketing expenses for the three-month and nine-month periods ended December 26, 1998 have increased in absolute dollars primarily due to increased salaries and benefits relating to additional personnel and increased marketing expenses associated with the direct-to-consumer program for the Company's Personal Desktop Audio(TM) products. General and administrative expenses have increased in absolute dollars primarily due to increased depreciation expenses relating to updated computerized systems. As a percentage of net sales, general and administrative expenses remained relatively stable during the three-month period ended December 26, 1998 and decreased as a percentage of net sales for the nine-month period ended December 26, 1998 compared to the corresponding periods a year ago. Engineering and development expenses for the three-month and nine-month periods ended December 26, 1998 have increased in absolute dollars due primarily to increased salaries and benefits relating to additional personnel and increased expenses associated with new product development. As a result of these increases, engineering and development expenses increased as a percentage of net sales for the three-month period ended December 26, 1998 while remaining stable during the nine-month period, as compared to the same periods a year ago. Net interest expense has decreased during the three-month and nine-month periods ended December 26, 1998 compared to the corresponding periods a year ago. The decrease is primarily due to lower interest expense as a result of the Company's repayments on the Company's line of credit borrowing during the first six months of fiscal 1999 which was partially offset by additional borrowings during the three-month period ended December 26, 1998. The Company's effective income tax rate decreased slightly for the three-month period ended December 26, 1998 from 39% to 36.5% as compared to the same period a year ago, primarily due to lower state income taxes. For the nine-month period of fiscal 1999 the effective tax rate decreased from approximately 38.3% to 37%. Net income for the third quarter increased 9%, from approximately $3,612,000 in fiscal 1998 to approximately $3,953,000 in fiscal 1999 while diluted earnings per share increased from $.70 to $.75 per share. Net income for the nine-month period ended December 26, 1998 increased 27%, from approximately $6,723,000 in fiscal 1998 to approximately $8,535,000 in fiscal 1999, while diluted earnings per share for the nine-month period increased from $1.23 to $1.62 per share. The increase in net income for the three and nine-month periods ended December 26, 1998 was primarily the result of the increased sales growth, which was offset slightly by the operating loss of the Snell subsidiary included in the consolidated results of operations. Liquidity and Capital Resources During the first nine months of fiscal 1999, the Company financed its growth principally with net proceeds of $2,500,000 from the Company's revolving line of credit. As of December 26, 1998 the Company's working capital was approximately $28,769,000, an increase of approximately $8,450,000 from March 28, 1998. The increase in working capital was primarily due to increased inventory and accounts receivable which were partially offset by increased accounts payable balances and the borrowings on the Company's line of credit during the first nine 11 months of fiscal 1999. The Company's cash and cash equivalents were approximately $1,163,000 at December 26, 1998. The Company's cash and cash equivalents at December 26, 1998 decreased by approximately $2,707,000 from March 28, 1998 primarily due to increased inventory levels, increased accounts receivable balances and purchases of property and equipment relating to production tooling and computerized equipment. The Company's increased inventory levels, both in absolute dollars and as a percentage of net sales, was principally the result of an increase of OEM products relating to the timing of Gateway orders placed during the last three months. In addition, inventory levels of certain core products contributed to the overall inventory increase. The increase in the Company's accounts receivable balance is principally the result of the 48% increase in net sales for the nine-month period ended December 26, 1998 and the timing of payments by certain larger customers which were subsequently received after December 26, 1998. Current liabilities increased by approximately $11,835,000 primarily as a result of increases in accounts payable related to inventory purchases and other accrued expenses. Long-term debt increased by approximately $2,600,000 as a result of borrowings under the Company's line of credit. The Company has two lines of credit with two banking institutions totaling $26,500,000. At December 26, 1998 the Company had borrowings totaling $15,000,000 under its $25 million revolving credit agreement. The Company believes that its existing resources are adequate to meet its requirements for working capital and capital expenditures through the next twelve months. Significant Customers The Company's financial results for the three-month and nine-month periods ending December 26, 1998 include significant OEM sales of multimedia speaker systems to Gateway. These sales are pursuant to various contracts that currently run through June 1999. Since these contracts do not contain schedules with which Gateway must comply in placing orders, orders by Gateway may fluctuate significantly from quarter to quarter over the terms of the contracts. Assuming Gateway places orders in the quantities required under the terms of the contracts by June 1999, a substantial portion of the Company's revenues for the fourth quarter of fiscal 1999 is expected to be derived from its contracts with Gateway. As a result of recent discussions with Gateway, the Company anticipates a decline in the quantity of products sold to Gateway during the last quarter of fiscal 1999 and in subsequent quarters, although the Company expects Gateway to continue as a significant customer. The loss of Gateway as a customer or any significant portion of orders from Gateway could have a material adverse affect on the Company's business, results of operations and financial condition. In addition, the Company also could be materially adversely affected by any substantial work stoppage or interruption of production at Gateway or if Gateway were to reduce or cease conducting operations. Year 2000 Compliance The Company has undertaken an internal assessment of its operations, including its information and financial systems and its manufacturing equipment in order to determine the extent to which the Company may be adversely affected by Year 2000 issues. The Company is currently in the process of updating its computer systems and applications to improve the scalability and functionality of the Company's overall manufacturing, planning and inventory related systems and to ensure that they are Year 2000 compliant. The Company believes that the Company's updated computer system will be Year 2000 compliant. The financial impact to the Company of its Year 2000 compliance programs has not been and is not anticipated to be material to its financial position or results of operations in any given year. The Company has also commenced a survey of its suppliers' Year 2000 compliance status and is anticipating responses from theses suppliers before the end of the current fiscal year. While the Company does not believe it will suffer any major effects from the Year 2000 issue, it is possible that such effects could materially impact future financial results, or cause reported financial information not to be necessarily indicative of future operating results or future financial condition. In addition, if any of the Company's significant customers or suppliers do not successfully and in a timely manner achieve Year 2000 compliance, the Company's business could be materially affected. At present, the Company has not developed contingency plans, but intends to determine whether to develop any such plans by the end of fiscal 1999. Possible Adverse Effect of Euro Conversion On January 1, 1999, 11 of the 15 member countries of the European Union established fixed conversion rates between their existing currencies and a new common currency called the "euro." This represented an initial step in a process expected to culminate in the replacement of the existing currencies with the euro. The conversion to the euro will have operational and legal implications for some of our international business activities. We have begun evaluating these implications, but we have yet to estimate the potential impact on our business, operating results and financial condition. Our preliminary judgment, however, is that the nature of our business and customers makes a material impact unlikely. 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, the Company's expected liquidity and capital resources and the Company's ability and the Company's 12 suppliers' and customers' ability to replace, modify or upgrade computer programs in ways to adequately address the Year 2000 issue). 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. 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. 13 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 a) Exhibits Exhibit 27 -- Financial Data Schedule b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter ended December 26, 1998. 14 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: February 5, 1999 By: s/Andrew G. Kotsatos --------------------- Andrew G. Kotsatos Director, Chief Executive Officer and Treasurer Date: February 5, 1999 By: s/Fred E. Faulkner, Jr. ----------------------- Fred E. Faulkner, Jr. President and Chief Operating Officer Date: February 5, 1999 By: s/Debra A. Ricker-Rosato ------------------------ Debra A. Ricker-Rosato Vice President and Chief Accounting Officer 15 EX-27 2 EX-27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S FINANCIAL STATEMENTS IN ITS QUARTERLY REPORT ON FORM 10Q FOR THE QUARTERLY PERIOD ENDED DECEMBER 26, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000805268 BOSTON ACOUSTICS, INC. 9-MOS MAR-27-1999 DEC-26-1998 1163469 0 19194033 516000 28032852 49698294 23228900 9928116 64393926 20929708 0 0 0 49904 31335961 64393926 85155939 85155939 56523377 14611327 0 0 542081 13550371 5015000 8535371 0 0 0 8535371 1.71 1.62
-----END PRIVACY-ENHANCED MESSAGE-----