-----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, BAp4GA/zHGrij+XHUIlq9/frwIeYetWYEs6jErQTDV2TH0pKFO+FYJS7pmEciDD6 n6kadXGFFJ9fYQE/lvt7rQ== 0000927016-96-001990.txt : 19961217 0000927016-96-001990.hdr.sgml : 19961217 ACCESSION NUMBER: 0000927016-96-001990 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19961102 FILED AS OF DATE: 19961216 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BROOKSTONE INC CENTRAL INDEX KEY: 0000830134 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-RETAIL STORES, NEC [5990] IRS NUMBER: 061182895 STATE OF INCORPORATION: DE FISCAL YEAR END: 0201 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-21406 FILM NUMBER: 96681402 BUSINESS ADDRESS: STREET 1: 17 RIVERSIDE STREET CITY: NASHUA STATE: NH ZIP: 03062 BUSINESS PHONE: 6038809500 MAIL ADDRESS: STREET 1: 17 RIVERSIDE ST CITY: NASHUA STATE: NH ZIP: 03062 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 2, 1996 ---------------- 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 number 0-21406 . ---------------------------------------------- Brookstone, Inc. . --------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 06-1182895 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 17 Riverside Street, Nashua, NH 03062 -------------------------------------- (address of principal executive offices, zip code) 603-880-9500 ------------ (Registrant's telephone number, including area code) - ------------------------------------------------------------------------------ (Former name, former address and former fiscal year, if changed since last report) 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 ------- ------- APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No ------- ------- APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: _________ shares of Common Stock as of _______________. BROOKSTONE, INC. INDEX TO FORM 10-Q
Part I: Financial Information Page No. --------------------- -------- Item 1: Consolidated Balance Sheet as of November 2, 1996, February 3, 1996, and October 28, 1995 3 Consolidated Statement of Operations for the thirteen and thirty-nine weeks ending November 2, 1996 and October 28, 1995 4 Consolidated Statement of Cash Flows for the thirty-nine weeks ending November 2, 1996 and October 28, 1995 5 Notes to Consolidated Financial Statements 6 Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations 7-8 Part II: Other Information ----------------- Item 1: Legal Proceedings 9 Item 2: Change in Securities 9 Item 3: Defaults by the Company upon its Senior Securities 9 Item 4: Submission of matters to a vote of Security Holders 9 Item 5: Other Information 9 Item 6: Exhibits and Reports on Form 8-K 9 Signatures 10
2 BROOKSTONE, INC. CONSOLIDATED BALANCE SHEET (IN THOUSANDS, EXCEPT SHARE DATA)
(Unaudited) (Unaudited) November 2, 1996 February 3, 1996 October 28, 1995 ---------------- ---------------- ---------------- Assets ------ Current Assets: Cash and cash equivalents $ 1,694 $11,333 $ 1,530 Receivables, net 5,250 4,312 3,542 Merchandise inventories 50,245 25,744 43,486 Deferred income taxes 5,675 150 5,940 Other current assets 5,850 2,999 5,076 -------- ------- ------- Total current assets 68,714 44,538 59,574 -------- ------- ------- Deferred income taxes 1,864 1,864 1,627 Property and equipment, net 31,817 30,157 30,015 Other assets 2,470 1,198 3,289 -------- ------- ------- $104,865 $77,757 $94,505 ======== ======= ======= Liabilities and Shareholders' Equity - ------------------------------------ Current liabilities: Current Portion of obligation under capital lease $ 84 $ 75 $ 71 Short term borrowings 22,985 -- 15,000 Accounts payable 22,407 9,464 23,414 Other current liabilities 7,561 9,069 8,435 -------- ------- ------- Total current liabilities 53,037 18,608 46,920 Other long term liabilities 8,547 8,572 8,357 Long term obligation under capital lease 2,805 2,863 2,882 Commitments and contingencies Shareholders' Equity: Preferred stock, $0.001 par value: Authorized - 2,000,000 shares; issued and outstanding - 0 shares at November 2, 1996, February 3, 1996 and October 28, 1995 Common stock, $0.001 par value Authorized 50,000,000 shares; issued and outstanding - 7,768,613 at November 2, 1996, 7,680,708 shares at February 3, 1996 and 7,680,712 shares at October 28, 1995 8 8 8 Additional paid-in capital 46,529 46,293 46,135 Retained earnings / (Accumulated deficit) (6,014) 1,460 (9,750) Treasury stock, at cost - 3,616 shares at November 2, 1996, February 3, 1996 and October 28, 1995 (47) (47) (47) -------- ------- ------- Total Shareholders' Equity 40,476 47,714 36,346 -------- ------- ------- $104,865 $77,757 $94,505 ======== ======= =======
3 BROOKSTONE, INC. CONSOLIDATED STATEMENT OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) (Unaudited)
Thirteen Weeks Ended Thirty-Nine Weeks Ended ------------------------------------ ----------------------------------- November 2, 1996 October 28, 1995 November 2,1996 October 28, 1995 ----------------- ----------------- ---------------- ----------------- Net Sales $35,022 $31,519 $105,704 $ 91,257 Cost of Sales 25,473 22,542 75,025 64,868 ------- ------- -------- -------- Gross Profit 9,549 8,977 30,679 26,389 Selling, general and administrative expenses 15,357 13,779 43,957 37,673 ------- ------- -------- -------- Loss from Operations (5,808) (4,802) (13,278) (11,284) Other income (718) (1,353) (1,510) (760) Interest expense, net 325 245 565 538 ------- ------- -------- -------- Loss before taxes (5,415) (3,694) (12,333) (11,062) Income tax benefit (2,134) (1,419) (4,859) (4,469) ------- ------- -------- -------- Net loss $(3,281) $(2,275) $ (7,474) $ (6,593) ======= ======= ======== ======== Net loss per share $(0.42) $(0.30) $(0.97) $(0.86) ======= ======= ======== ======== Weighted Average shares outstanding 7,761 7,678 7,734 7,656
4 BROOKSTONE, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (IN THOUSANDS) (Unaudited)
Thirty-Nine Weeks Ended ----------------------------------- November 2, 1996 October 28, 1995 ---------------- ---------------- Cash flows from operating activities: Net loss $ (7,474) $ (6,593) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation and amortization 4,236 3,770 Deferred income taxes (5,525) (4,639) Increase in other assets (1,272) (2,532) Decrease in other long term liabilities (25) 466 Changes in working capital: Accounts receivable, net (938) 157 Merchandise Inventories (24,501) (14,405) Other current assets (2,851) (2,213) Accounts Payable 12,943 15,090 Other current liabilities (1,508) (2,143) -------- -------- Net cash used by operating activities (26,915) (13,042) -------- -------- Cash flows from investing activities: Expenditures for property and equipment (5,896) (4,718) -------- -------- Net cash used for investing activities (5,896) (4,718) -------- -------- Cash flows from financing activities: Borrowings from revolving credit 22,985 15,000 Payments for capitalized lease (49) (51) Proceeds from exercise of stock options and related tax benefits 236 183 -------- -------- Net cash provided by financing activities 23,172 15,132 -------- -------- Net decrease in cash and cash equivalents (9,639) (2,628) Cash and cash equivalents at beginning of period 11,333 4,158 -------- -------- Cash and cash equivalents at end of period $ 1,694 $ 1,530 ======== ========
5 BROOKSTONE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. The results of the thirteen and thirty-nine week periods ending November 2, 1996, are not necessarily indicative of the results for the full fiscal year. The Company's business, like the business of retailers in general, is subject to seasonal influences. Historically, the Company's fourth fiscal quarter, which includes the Christmas selling season, has produced a disproportionate amount of the Company's net sales and generally all of its income from operations. The Company expects that its business will continue to be subject to such seasonal influences. 2. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles and practices consistently applied; and in the opinion of the Company, contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position and the results of operations for the periods reported. Certain information and footnote disclosures normally included in financial statements presented in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that the accompanying consolidated financial statements be read in conjunction with the annual financial statements and notes thereto which may be found in the Company's 1995 annual report. 3. The exercise of stock options which have been granted under the Company's stock option plans gives rise to compensation which is includable in the taxable income of the optionees and deductible by the Company for tax purposes upon exercise. Such compensation reflects an increase in the fair market value of the Company's Common Stock subsequent to the date of grant. For financial reporting purposes, the tax effect of this deduction is accounted for as a credit to additional paid-in capital rather than as a reduction of income tax expense. Such exercises resulted in a tax benefit to the Company of approximately $166,000 for the thirty-nine week period November 2, 1996. 6 BROOKSTONE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE THIRTEEN AND THIRTY-NINE WEEK PERIODS ENDED NOVEMBER 2, 1996 Results of Operations - --------------------- For the thirteen and thirty-nine week periods ended November 2, 1996, net sales increased 11.1% and 15.8% over comparable periods last year. Comparable store sales for the thirteen and thirty-nine week periods increased 3.7% and 7.8%, respectively. The sales increase reflects the results of opening 4 new stores in the fourth quarter during Fiscal 1995 and 10 new stores during Fiscal 1996, partially offset by the loss of sales from closing one store in the first quarter of Fiscal 1996. The total Brookstone stores open at the end of the thirty-nine week period ended November 2, 1996 was 153 versus 140 at the end of the comparable period in Fiscal 1995. Mail order sales increased 16.6% and 15.3% for the same thirteen and thirty-nine week periods. This increase was driven primarily by increased catalog circulation of 28.9% and 20.1% for the thirteen and thirty-nine week periods respectively. Gross Profit as a percentage of net sales was 27.3% for the thirteen week period ended November 2, 1996, versus 28.5% for the comparable period last year. This decrease is primarily the result of a decrease in net material margin coupled with an increased shrinkage charge resulting from the Company's pre- holiday physical inventory and an increase in occupancy costs as a result of the new stores opened during the fiscal quarter. Gross Profit as a percentage of net sales was 29.0% for the thirty-nine week period ended November 2, 1996, versus 28.9% for the comparable period last year. This increase in gross profit as a percentage of net sales is primarily the result of leveraging occupancy costs associated with the increases in net sales for the thirty-nine week period, partially offset by a decrease in the net material margin and the increased shrinkage charge recorded during the third quarter. Selling, general and administrative expenses as a percentage of net sales were 43.8% and 41.6% for the thirteen and thirty-nine week periods ended November 2, 1996 versus 43.7% and 41.3% for the comparable periods last year. The increase in the year to date percentage is primarily the result of increased advertising relating to Brookstone's catalog operations, including costs associated with increased circulation and production costs. The increase in production costs year to date principally resulted from the increase in paper costs in the first half of the year as compared to the first half of 1995. Other income, which represents inventory capitalization, was $718,000 and $1,510,000 for the thirteen and thirty-nine week periods ended November 2, 1996 as compared to $1,353,000 and $760,000 for the comparable periods last year. Net interest expense for the thirteen and thirty-nine week periods ended November 2, 1996, was $325,000 and $565,000 compared to $245,000 and $538,000 during the comparable periods last year. The increase for the thirteen and thirty-nine week periods is related to increased borrowings under the revolving credit agreement during 1996 compared with 1995. As a result of the foregoing, the Company reported a net loss of $3,281,000 or $0.42 per share, for the thirteen week period ended November 2, 1996, as compared to a net loss of $2,275,000 or $0.30 per share for the comparable period last year. For the thirty-nine week period ended November 2, 1996, the Company reported a net loss of $7,474,000 or $0.97 per share compared to a net loss of $6,593,000 or $0.86 per share for the comparable period last year. Financial Condition - ------------------- At November 2, 1996, working capital was $15.7 million, a $10.2 million decrease from February 3, 1996. This decline reflects capital expenditures of $5.9 million, a $12.9 million increase in accounts payable and the seasonal operating loss, partially offset by a $24.5 million increase in merchandise inventories. The capital expenditures were principally related to the remodeling of eight retail stores and the opening of 10 new stores year to date. The increase in 7 inventory is primarily the result of the Company building its merchandise inventories for the upcoming holiday season and to support the new stores opened and new stores scheduled to open during Fiscal 1996. Working capital at November 2, 1996, increased $3.0 million from October 28, 1995. This increase is primarily the result of the net income the Company recorded in the fourth quarter of Fiscal 1995, partially offset by the seasonal operating loss recorded to date, a $6.8 million increase in merchandise inventories, and a $1.0 million decrease in Accounts Payable, offset by capital expenditures of $7.9 million and an $8.0 million increase in short term borrowings. The capital expenditures relate to the 14 stores opened and eight stores remodeled during the previous 12 months. The decrease in accounts payable relates to an increase in imported merchandise and proprietary products, which generally have reduced payment terms. The inventory increase is to support anticipated sales volume and new stores opened and new stores scheduled to open during Fical 1996. The Company maintains a revolving credit agreement to finance inventory purchases, which historically peak in the third quarter in anticipation of the holiday selling season. At November 2, 1996, the Company had $23.0 million in outstanding borrowings under its revolving credit agreement, and at October 28, 1995, it had $15.0 million in borrowings. To ensure that it has adequate liquidity during the third and fourth quarter the Company amended it's revolving credit agreement on September 30, 1996. The amended credit agreement provides the Company with an additional $5.0 million during the pre-holiday inventory building period of October through December each year. 8 PART II OTHER INFORMATION Item 1: LEGAL PROCEEDINGS ----------------- The Company is involved in various legal proceedings arising in the normal course of business. The Company believes that the resolution of these matters will not have a material effect on the Company's financial condition or results of operations. Item 2: CHANGES IN SECURITIES --------------------- None Item 3: DEFAULT UPON SENIOR SECURITIES ------------------------------ None Item 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS --------------------------------------------------- None Item 5: OTHER INFORMATION ----------------- John J. Rahilly resigned his position as Executive Vice President of Finance and Administration effective November 20, 1996. Philip Roizin has been appointed Executive Vice President of Finance and Administration, effective December 9, 1996. Item 6: EXHIBITS AND REPORTS ON FORM 8-K -------------------------------- A) Exhibits 10.19.1 - First Amendment to Revolving Credit Agreement dated September 30, 1996 (filed herewith) 10.25 - Employment Agreement dated November 3, 1996 between the Company and Philip Roizin (filed herewith). 11 - Computation of Net Loss Per Share B) Reports on Form 8-K No reports on Form 8-K were filed during the period for which this report is filed. 9 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. Brookstone, Inc. ---------------- (Registrant) /s/ Michael F. Anthony ----------------------------------- December 16, 1996 (Signature) --- Michael F. Anthony President, Chief Executive Officer (Acting Principal Financial Officer and duly authorized to sign on behalf of registrant) EX-10.19.1 2 AMENDMENT TO REVOLVING CREDIT AGREEMENT ============================================================================== EXHIBIT 10.19.1 FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT Dated as of September 30, 1996 Among BROOKSTONE, INC., BROOKSTONE COMPANY, INC. and BROOKSTONE STORES, INC. and THE FIRST NATIONAL BANK OF BOSTON ============================================================================== FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT This FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT is entered into as of September 30, 1996 by and among BROOKSTONE, INC., a Delaware corporation (the "Parent"), BROOKSTONE COMPANY, INC., a New Hampshire corporation (the "Company") and BROOKSTONE STORES, INC., a New Hampshire corporation ("Stores;" the Parent, the Company and Stores are referred to herein collectively as the "Companies" and the Company and Stores are referred to herein individually as a "Borrower" and collectively as the "Borrowers") and THE FIRST NATIONAL BANK OF BOSTON, a national banking association. Recitals -------- The Companies and the Bank are parties to a Revolving Credit Agreement dated as of January 11, 1996 (the "Credit Agreement"). All capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Credit Agreement. The Companies desire to amend the Credit Agreement to provide for a temporary increase in the Commitment Amount to $35,000,000 for the period from October 1, 1996 through January 31, 1997 and again for the period from October 31, 1997 through January 31, 1998. The Bank is willing to amend the Credit Agreement to provide for such temporary increases on the terms and conditions set forth herein. NOW, THEREFORE, the Companies and the Bank hereby amend the Credit Agreement as follows: Section 1. Definitions. Section 1.1 of the Credit Agreement is hereby ----------- amended by deleting the definition of "Commitment Amount" in its entirety and substituting therefor the following: "Commitment Amount. (a) $30,000,000 through ----------------- September 30, 1996, (b) $35,000,000 for the period from October 1, 1996 through December 31, 1996, (c) $30,000,000 for the period from February 1, 1997 through September 30, 1997, and (d) $35,000,000 for the period from October 1, 1997 through December 31, 1997, or in each case such lesser amount, including zero, resulting from a termination or reduction of such amount in accordance with Section 2.4 or Section 7.2." Section 2. Revised Promissory Note. The Bank and the Borrowers hereby agree ----------------------- that the Borrowers, jointly and severally, shall execute and deliver to the Bank the Promissory Note in the form of Exhibit A hereto to evidence the Loans, which note, from and --------- after the date hereof, shall be deemed to be the Note under the Credit Agreement. Accrued interest on the Borrowers' Promissory Note dated January 11, 1996 through the date hereof shall be paid at the times provided in the Credit Agreement. Section 3. Effectiveness: Conditions to Effectiveness. This First Amendment ----------------------------------------- to Revolving Credit Agreement shall become effective as of September 30, 1996 upon execution hereof by the Borrowers and the Bank and satisfaction of the following conditions. (a) Promissory Note. The Borrowers shall have delivered to the Bank a --------------- revised Promissory Notes in the form of Exhibit A hereto. --------- (b) Officers' Certificate. The Borrowers shall have delivered to the Bank -------------------- an Officers' Certificate in the form of Exhibit B hereto. --------- (c) Opinion of Counsel. The Borrowers shall have delivered to the Bank an ------------------ opinion of Wiggin & Nourie, P.A., counsel to the Borrowers, in form and substance satisfactory to the Bank. (d) Facility Fee. The Borrowers shall have paid to the Bank a facility ------------ fee of $35,000, which shall be deemed earned in full by the Bank on the date hereof. Section 4. Representations and Warranties: No Default. The Borrowers hereby ------------------------------------------ confirm to the Bank the representations and warranties of the Borrowers set forth in Section IV of the Credit Agreement (as amended hereby) as of the date hereof, as if set forth herein in full. The Borrowers hereby certify that no Default exists under the Credit Agreement. Section 5. Miscellaneous. The Borrowers, jointly and severally agree to pay ------------- on demand all the Bank's reasonable expenses in preparing, executing and delivering this First Amendment to Revolving Credit Agreement, and all related instruments and documents, including, without limitation, the reasonable fees and out-of-pocket expenses of the Bank's special counsel, Goodwin, Procter & Hoar LLP. This First Amendment to Revolving Credit Agreement shall be a Lender Agreement and shall be governed by and construed and enforced under the laws of The Commonwealth of Massachusetts. 2 IN WITNESS WHEREOF, the Companies and the Bank have caused this First Amendment to Revolving Credit Agreement to be executed by their duly authorized officers as of the first set forth above. BROOKSTONE, INC. By: /s/ Michael F. Anthony ------------------------------ Name: Michael F. Anthony Title: President BROOKSTONE COMPANY, INC. By: /s/ Michael F. Anthony ------------------------------ Name: Michael F. Anthony Title: President BROOKSTONE STORES, INC. By: /s/ Michael F. Anthony ------------------------------ Name: Michael F. Anthony Title: President THE FIRST NATIONAL BANK OF BOSTON By: /s/ Virginia W. Dennett ------------------------------ Name: Virginia W. Dennett Title: Vice President 3 Acknowledgement of Guarantors ----------------------------- The undersigned Guarantors under an Unlimited Guaranty dated as of January 11, 1996 hereby acknowledge the foregoing First Amendment to Revolving Credit Agreement and agree that all obligations of the Borrowers under the Credit Agreement, as so amended, will constitute "Obligations" under the Unlimited Guaranty. BROOKSTONE PROPERTIES, INC. BROOKSTONE HOLDINGS, INC. BROOKSTONE PURCHASING, INC. BROOKSTONE BY MAIL, INC. BY: /s/ Michael F. Anthony ------------------------------ 4 EX-10.25 3 EMPLOYMENT AGREEMENT DATED NOVEMBER 3, 1996 November 1, 1996 Mr. Philip Roizin 51 Deepdale Road Strafford, PA 19087 Dear Philip: The Brookstone Company and I are extremely pleased to offer you the position of Executive Vice President, Finance & Administration. There are many exciting challenges ahead and we look forward to both a mutually productive and an enjoyable relationship. As reviewed, here are the details of the offer we are extending to you: * You will be joining Brookstone as Executive Vice President, Finance & Administration reporting directly to me. * Your start date will be on or about December 9, 1996. * Your base salary will be $210,000 subject to review at the end of the fiscal '97 year. * You will participate in our Management Incentive Bonus (MIB) program (threshold 30%). Based on performance you will be eligible for up to 50% of your base salary in cash (if your performance exceeds the 50% level, you will be paid the remainder in stock options). * Upon Board approval you will be granted a total of 50,000 shares of stock options. Twenty-five thousand (25,000) shares will vest at 25% (6,250) per year over a 4 year period. The remaining 25,000 shares will cliff vest in the year 2001. The 50,000 shares of stock options will be presented for approval at the next Board of Directors Meeting, which is scheduled for November 14, 1996. The option price will be fixed at the close of business on your first day of employment. * You are eligible to receive a car allowance of $500 towards a leased or purchased automobile. Brookstone will pay for insurance, registration, maintenance, repairs, and all gas expenses related to company business. Philip Roizin November 1, 1996 Page 2 * You will be eligible for 4 weeks of vacation in 1997 and thereafter. * You and your family will be covered under our comprehensive Medical plan effective 30 days from your date of hire. See attached information. * After a six month waiting period you will be eligible to participate in our dental plan. See attached information. * You will be eligible for long and short term disability insurance at no cost to you. * You will be eligible to participate in the Company's Pension Plan. The Company contributes 100% of the potential benefits. Benefits vest after 5 years. * After 1 year of service you will be eligible to participate in the Company's 401K plan. * Brookstone will bear the reasonable cost of temporary housing accommodations for you and your family. * When you relocate, Brookstone will bear the reasonable cost of packing your household. You will submit three (3) bids to Jo-Ann Karalus, Vice President - Human Resources for approval. * You will receive incidental pay for one week when you move into your new home. Please advise this office when this takes place. * You, like all Company executives, will be required to sign a Confidentiality Agreement. * In the unlikely event your employment is terminated by the Company other than for cause, you will receive a severance package consisting of your base salary for a maximum period of up to twelve (12) months. Any self- employment or other income employment earned during the 12 month period following termination shall reduce the severance package payable. Philip Roizin November 1, 1996 Page 3 The executive staff and I are very pleased with your acceptance of this offer and believe you will be an excellent addition to our team. Brookstone is the type of company where your contributions will be utilized and recognized. Kindly indicate your acknowledgment and acceptance of the terms of this letter by signing the enclosed copy on the space provided. Please keep one copy for your records and return a copy to this office. Warmest regards, Michael Anthony President and Chief Executive Officer November 5, 1996 Mr. Philip Roizin 51 Deepdale Road Strafford, PA 19087 Dear Philip: This letter will serve as an amendment to the original offer letter dated November 1, 1996. * You are eligible to receive a car allowance of $500 per month towards a leased or purchased automobile. Brookstone will pay for insurance, registration, maintenance, repairs, and all gas expenses related to company business. * Brookstone will reimburse you for usual closing costs and legal expenses involved in purchasing your new home in New Hampshire or Massachusetts, including up to two mortgage points. Kindly indicate your acknowledgment and acceptance of the terms of this letter by signing the enclosed copy on the space provided. Please keep one copy for your records and return a copy to this office. Philip, we look forward to your arrival on December 9, 1996 Sincerely, Jo-Ann B. Karalus Vice President, Human Resources - ----------------------------------- ---------------------- Philip Roizin Date EX-11 4 COMPUTATION OF NET LOSS PER SHARE Exhibit 11 ---------- BROOKSTONE, INC. COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS (LOSS) -------------------------------------------------------- PER COMMON SHARE (IN THOUSANDS, EXCEPT PER SHARE DATA) ------------------------------------- (Unaudited) -----------
Thirteen Weeks Ended Thirty-Nine Weeks Ended ----------------------------------- ------------------------------------ November 2, 1996 October 28, 1995 November 2, 1996 October 28, 1995 ---------------- ---------------- ---------------- ---------------- Net loss $(3,281) $(2,275) $(7,474) $(6,593) ======= ======= ======= ======= Weighted average number of common shares outstanding 7,681 7,603 7,681 7,603 Adjustments to weighted average common shares outstanding: Common stock issued upon exercise of options 80 75 53 53 ------- ------- ------- ------- Weighted average number of common shares as adjusted 7,761 7,678 7,734 7,656 ======= ======= ======= ======= Net loss primary and fully diluted earnings per share $ (0.42) $ (0.30) $ (0.97) $ (0.86) ======= ======= ======= =======
EX-27 5 FINANCIAL DATA SCHEDULE
5 3-MOS FEB-01-1997 FEB-04-1996 NOV-02-1996 1,694 0 5,387 137 50,245 68,714 58,606 26,789 104,865 53,037 0 0 0 8 40,468 104,865 35,022 35,022 25,473 15,357 (718) 0 325 (5,415) (2,134) (3,281) 0 0 0 (3,281) ($0.42) ($0.42)
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