-----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, Qbpmhkymf2iJIsGJcmVdsOmhr4q38NPolzndZmBf9BtFLVt3QQk6udeqQi/f3IfS o9519d/JD/4BRBelyf2jAw== 0000927016-99-003230.txt : 19990915 0000927016-99-003230.hdr.sgml : 19990915 ACCESSION NUMBER: 0000927016-99-003230 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990731 FILED AS OF DATE: 19990914 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: 0130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-21406 FILM NUMBER: 99711039 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 July 31, 1999 ------------- 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: 8,168,838 shares of common --------- stock as of September 3, 1999. ----------------- BROOKSTONE, INC. Index to Form 10-Q
Part I: Financial Information Page No. --------------------- -------- Item 1: Consolidated Balance Sheet as of July 31, 1999, January 30, 1999 and August 1, 1998 3 Consolidated Statement of Operations for the thirteen and twenty-six weeks ended July 31, 1999 and August 1, 1998 4 Consolidated Statement of Cash Flows for the thirteen and twenty-six weeks ended July 31, 1999 and August 1, 1998 5 Notes to Consolidated Financial Statements 6 - 7 Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations 8 - 10 Part II: Other Information ----------------- Item 1: Legal Proceedings 11 Item 2: Change in Securities 11 Item 3: Defaults by the Company upon its Senior Securities 11 Item 4: Submission of Matters to a Vote of Security Holders 11 Item 5: Other Information 12 Item 6: Exhibits and Reports on Form 8-K 12 Signatures 13
2 BROOKSTONE, INC. CONSOLIDATED BALANCE SHEET (In thousands, except share data)
(Unaudited) (Unaudited) July 31, 1999 January 30, 1999 August 1, 1998 ------------- ---------------- -------------- Assets - ------ Current assets: Cash and cash equivalents $ 1,773 $ 17,391 $ 2,510 Receivables, net 5,389 6,256 6,115 Merchandise inventories 39,620 37,444 39,927 Deferred income taxes 4,782 1,781 6,491 Other current assets 5,323 4,623 5,144 --------- --------- --------- Total current assets 56,887 67,495 60,187 Deferred income taxes 3,643 3,643 2,916 Property and equipment, net 42,036 42,124 37,770 Intangible assets 6,506 -- -- Other assets 842 1,299 665 --------- --------- --------- $ 109,914 $ 114,561 $ 101,538 ========= ========= ========= Liabilities and Shareholders' Equity - ------------------------------------ Current liabilities: Short-term borrowings $ 1,840 $ -- $ 8,860 Accounts payable 15,770 10,727 11,820 Other current liabilities 11,183 18,950 10,696 --------- --------- --------- Total current liabilities 28,793 29,677 31,376 Other long-term liabilities 10,193 9,962 9,861 Long-term obligation under capital lease 2,565 2,612 2,652 Commitments and contingencies Shareholders' equity: Preferred stock, $0.001 par value: Authorized - 2,000,000 shares; issued and outstanding - 0 shares at July 31, 1999, January 30, 1999 and August 1, 1998 Common stock, $0.001 par value: Authorized 50,000,000 shares; issued and outstanding - 8,133,838 at July 31, 1999, 8,064,586 shares at January 30, 1999 and 7,994,067 shares at August 1, 1998 8 8 8 Additional paid-in capital 48,997 48,330 47,899 Retained earnings 19,405 24,019 9,789 Treasury stock, at cost - 3,616 shares at July 31, 1999, January 30, 1999 and August 1, 1998 (47) (47) (47) --------- --------- --------- Total shareholders' equity 68,363 72,310 57,649 --------- --------- --------- $ 109,914 $ 114,561 $ 101,538 ========= ========= =========
3 BROOKSTONE, INC. CONSOLIDATED STATEMENT OF OPERATIONS (In thousands, except per share data) (Unaudited)
Thirteen Weeks Ended Twenty-six Weeks Ended ----------------------------------------- -------------------------------------- July 31, 1999 August 1, 1998 July 31, 1999 August 1, 1998 ------------- -------------- ------------- -------------- Net sales $ 64,104 $ 53,756 $ 106,204 $ 91,675 Cost of sales 41,059 36,453 72,878 65,485 --------- --------- --------- --------- Gross profit 23,045 17,303 33,326 26,190 Selling, general and administrative expenses 22,682 17,622 40,334 33,568 --------- --------- --------- --------- Income (loss) from operations 363 (319) (7,008) (7,378) Interest expense, net 348 464 483 694 --------- --------- --------- --------- Income (loss) before taxes 15 (783) (7,491) (8,072) Income tax provision (benefit) 6 (308) (2,877) (3,180) --------- --------- --------- --------- Net income (loss) $ 9 $ (475) $ (4,614) $ (4,892) ========= ========= ========= ========= Earnings (loss) per share - basic/diluted $ 0.00 $ (0.06) $ (0.57) $ (0.62) Weighted average shares outstanding - basic 8,134 7,984 8,115 7,945 ========= ========= ========= ========= Weighted average shares outstanding - diluted 8,413 7,984 8,115 7,945 ========= ========= ========= =========
4 BROOKSTONE, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (In thousands) (Unaudited)
Twenty-Six Weeks Ended ------------------------------------- July 31, 1999 August 1, 1998 ------------------ ------------------ Cash flows from operating activities: Net loss $ (4,614) $ (4,892) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation and amortization 4,311 3,700 Amortization of debt issuance costs 75 69 Deferred income taxes (3,001) (3,686) Decrease in other assets 382 400 Increase in other long-term liabilities 231 49 Changes in working capital: Accounts receivable, net 867 (583) Merchandise inventories 227 (2,642) Other current assets 579 (4,258) Accounts payable 5,043 (2,620) Other current liabilities (8,498) (5,906) --------- -------- Net cash used by operating activities (4,398) (20,369) --------- -------- Cash flows from investing activities: Expenditures for property and equipment (4,064) (3,616) Expenditure for Gardeners Eden acquisition (9,616) ---- --------- -------- Net cash used for investing activities (13,680) (3,616) --------- -------- Cash flows from financing activities: Borrowings from revolving credit 1,840 8,860 Payments for capitalized lease (47) (46) Proceeds from exercise of stock options and related tax benefits 667 775 --------- -------- Net cash provided by financing activities 2,460 9,589 --------- -------- Net decrease in cash and cash equivalents (15,618) (14,396) Cash and cash equivalents at beginning of period 17,391 16,906 --------- -------- Cash and cash equivalents at end of period $ 1,773 $ 2,510 ========= ========
5 BROOKSTONE, INC. Notes to Consolidated Financial Statements 1. The results of the twenty-six week period ended July 31, 1999 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 winter holiday selling season, has produced a disproportionate amount of the Company's net sales and 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. In the opinion of the Company, these financial statements 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 Fiscal 1998 annual report. 3. The exercise of stock options which has 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 $124,000 for the twenty-six week period ended July 31, 1999. 4. Business conducted by the Company can be segmented into two distinct areas determined by the method of distribution channel. The retail segment is comprised of all full-year stores in addition to all temporary stores and kiosks. Retail product distribution is conducted directly through the store location. The direct marketing segment is comprised of the Hard-to-Find Tools, Brookstone Gift Collection and Gardeners Eden catalogs, products promoted via SkyMall and the interactive Internet site www.Brookstone.com. ------------------ Direct marketing product distribution is conducted through the Company's direct marketing call center and distribution facility located in Mexico, Missouri. Both segments of the Company sell similar products, although not all Company products are fully available within both segments. 6 All costs directly attributable to the direct marketing segment are charged accordingly while all remaining operating costs are charged to the retail segment. The Company's management does not review assets by segment. The tables below disclose segment net sales and pre-tax income (loss) for the thirteen and twenty-six week periods ended July 31, 1999 and August 1, 1998, respectively (in thousands):
Thirteen Weeks: (in thousands) Net Sales Pre-tax Income (Loss) --------------------------------- ------------------------------- July 31, August 1, July 31, August 1, 1999 1998 1999 1998 --------------------------------- ------------------------------- Reportable segment: Retail $ 53,824 $ 49,082 $ 570 $ 68 Direct marketing 10,280 4,674 (207) (387) Reconciling items: Interest expense --- --- (348) (464) --------------------------------- ------------------------------- Consolidated: $ 64,104 $ 53,756 $ 15 $ (783) ================================= =============================== Twenty-six Weeks: (in thousands) Net Sales Pre-tax Loss --------------------------------- ------------------------------- July 31, August 1, July 31, August 1, 1999 1998 1999 1998 --------------------------------- ------------------------------- Reportable segment: Retail $ 91,126 $ 83,143 $ (6,107) $ (6,209) Direct marketing 15,078 8,532 (901) (1,169) Reconciling items: Interest expense --- --- (483) (694) --------------------------------- ------------------------------- Consolidated: $ 106,204 $ 91,675 $ (7,491) $ (8,072) ================================= ===============================
5. Effective May 3, 1999 the Company acquired certain assets relating to the Gardeners Eden catalog from Williams-Sonoma, Inc. at a purchase price of approximately $9.6 million. The acquisition was accounted for as a purchase. The assets acquired were comprised of inventory valued at approximately $2.4 million and deferred catalog costs valued at approximately $1.3 million. The value of these assets was offset by a liability of approximately $0.7 million for open customer orders under the Gardeners Eden continuity program. The Company allocated the remaining purchase price, approximately $6.6 million, to the valuation of intangible assets consisting of trade name and customer lists. 7 BROOKSTONE, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations for the Thirteen-Week and Twenty-Six Week Periods Ended July 31, 1999 Results of Operations - --------------------- For the thirteen-week and twenty-six week periods ended July 31, 1999, net sales increased 19.3% and 15.8% respectively over the comparable periods last year. Comparable store sales for the thirteen-week and twenty-six week periods increased 6.2% and 3.8% respectively. The sales increase reflected the results of opening 15 new stores in Fiscal 1998 subsequent to the second quarter of Fiscal 1998 and six new stores during Fiscal 1999, offset by the closing of one store subsequent to the second quarter of Fiscal 1998. The total number of Brookstone stores open at the end of the twenty-six week period ended July 31, 1999 was 202 versus 182 at the end of the comparable period in Fiscal 1998. Direct marketing sales increased 76.7% over the comparable twenty-six week period last year. This increase was driven by sales from the recently acquired Gardeners Eden catalog and increased Hard-to-Find Tools and Brookstone Gift Collection catalog circulation. Gross profit as a percentage of net sales was 35.9% and 31.4% for the thirteen and twenty-six week periods ended July 31, 1999 versus 32.2% and 28.6% for the comparable periods last year. The increase in the percentage was primarily attributable to a decrease in net material costs resulting from lower sourcing costs, combined with a decrease in occupancy percentage resulting from the strong comparable store sales performance and the increase in direct marketing sales. Selling, general and administrative expenses as a percentage of net sales were 35.4% and 38.0% for the thirteen and twenty-six week periods ended July 31, 1999 versus 32.8% and 36.6% for the comparable periods last year. This increase in percentage was primarily the result of costs associated with the acquisition and integration of the Gardeners Eden catalog, the increased Hard-to-Find Tools and Brookstone Gift Collection catalog circulation and costs associated with new information processing systems. Net interest expense for the thirteen-week and twenty-six week periods ended July 31, 1999 was $348,000 and $483,000, compared to $464,000 and $694,000 during the comparable periods last year. The decrease for the thirteen and twenty-six week periods was related to decreased borrowings under the revolving credit agreement during comparable periods for Fiscal 1999 compared with Fiscal 1998. As a result of the foregoing, the Company reported net income of $9,000 or $0.00 per basic/diluted share for the thirteen-week period ended July 31, 1999, as compared to a net loss of $475,000 or $0.06 per basic/diluted share for the comparable period last year. For the twenty-six week period ended July 31, 1999 the Company reported a net loss of $4,614,000 or $0.57 per basic/diluted share, compared to a net loss of $4,892,000 or $0.62 per basic/diluted share for the comparable period last year. Financial Condition - ------------------- For the twenty-six week period ended July 31, 1999, net cash used by operating activities totaled $4.4 million, reflecting primarily the net loss and the payment of income taxes, offset by an increase in the accounts payable balance due to the timing of expense and merchandise payments. Cash used for investment activities during the twenty-six week period of Fiscal 1999, representing the purchase of property and equipment and the acquisition of the Gardeners Eden catalog, amounted to $13.7 million. Cash from financing activities during the twenty-six week period of Fiscal 1999 amounted to $2.5 million, acquired primarily through borrowings under the Company's revolving credit agreement and the exercise of stock options and related tax benefits. For the twenty-six week period ended August 1, 1998, net cash used by operating activities totaled $20.4 million, primarily as a result of the net loss, purchase of inventory and payment of income taxes. Cash used for investment activities during the twenty-six week period of Fiscal 1998, representing the purchase of property and equipment, 8 amounted to $3.6 million. Cash from financing activities during the twenty-six week period of Fiscal 1998 amounted to $9.6 million, acquired primarily through borrowings under the Company's revolving credit agreement. Merchandise inventories were $39.6 million at July 31, 1999 compared to $37.4 million at January 30, 1999. The increase in inventory was primarily due to the acquisition of the Gardeners Eden catalog. The accounts payable balance was $15.8 million at July 31, 1999 compared to $10.7 million at January 30, 1999. This increase was primarily due to the timing of expense and merchandise payments. For the twenty-six week period ended July 31, 1999, the Company's capital expenditures were principally related to the remodeling of three retail stores and the opening of six new stores. The Company anticipates opening approximately 14 to 18 new stores, including as many as six airport locations, and remodeling approximately 10 stores during Fiscal 1999. The Company maintains a revolving credit agreement to finance inventory purchases, which historically peak in the third quarter in anticipation of the winter holiday selling season. At July 31, 1999, the Company had $1.8 million in outstanding borrowings under its revolving credit agreement as compared to an outstanding balance of $8.9 million at August 1, 1998. The Company believes that available borrowings, cash on hand and anticipated cash generated from operations will be sufficient to finance planned retail store openings / remodelings and other capital requirements throughout Fiscal 1999. Outlook: Important Factors and Uncertainties - -------------------------------------------- Statements in this quarterly report which are not historical facts, including statements about the Company's confidence or expectations, plans for opening new stores, capital needs and liquidity and other statements about the Company's operational outlook, are forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from those set forth in such forward-looking statements. Such risks and uncertainties include, without limitation, risks of changing market conditions in the overall economy and the retail industry, consumer demand, the availability of appropriate real estate locations and the ability to negotiate favorable lease terms in respect thereof, customer response to the Company's direct marketing initiatives, availability of products, availability of adequate transportation of such products, unforeseen difficulties arising from the Company's or its vendors' systems as a result of the Year 2000 problem, and other factors detailed from time to time in the Company's annual and other reports filed with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. The Company undertakes no obligations to publicly release any revisions to these forward-looking statements or reflect events or circumstances after the date hereof. Year 2000 Software Compliance - ----------------------------- Many computer programs in use today were originally written using two-digit fields to identify years instead of four digits to define century and year. These programs were written without considering the impact of the upcoming change in the century and may experience difficulty in handling dates beyond December 31, 1999. This phenomenon, sometimes referred to as "the year 2000 problem" or "the Y2K problem", could cause computer software to fail or create erroneous results unless corrective or alternative measures are instituted. The Company relies on software for the efficient operation of many of its important functions, including inventory purchasing, shipping and receiving, logistics, inventory forecasting and replenishment, payroll and human resource record-keeping, direct marketing operations, point-of-purchase transaction recording and financial reporting. Nearly all of the software relied upon in the Company's operations is purchased from outside sources (who, in some instances, modify or customize pre-packaged software to fit the Company's needs). In addition, the Company has entered into maintenance contracts from such vendors to ensure that such programs will remain operable or will be upgraded at marginal incremental cost to the Company in the event that such a program is not functioning optimally. Since 1996, the Company has been working with its outside software vendors to (i) assess the Y2K readiness of their products, (ii) implement changes and upgrades necessary to eliminate the risk of Y2K problems and (iii) test the Company's systems and components to ensure proper functionality. During the second quarter of Fiscal 1999, the Company completed the implementation and testing of a year 2000 compliant point-of-purchase system. The Company is currently in the process of upgrading its employee timekeeping system, which it expects to complete in the fall of 1999. With the exception of the timekeeping software, each of the software products involved in the Company's significant operations has been represented to be year 2000 compliant, or has been upgraded to versions that have been represented to be year 2000 compliant, by their respective vendors. In addition, the Company has received representations from its primary bank and its credit card processors that the software programs they operate to facilitate services provided to the Company are, or are in the process of becoming, year 2000 compliant. Because the Y2K problem is often not immediately apparent, the Company believes that the evaluation of its systems and the assessment of their readiness must be a continuous process. During Fiscal 1999, the Company has continued to test and evaluate its systems for year 2000 compliance and will continue to perform this testing and evaluating process through the remainder of the fiscal year. As part of that testing program, the Company leased an additional IBM AS/400 computer system and transferred to it copies of the Company's key software applications and their associated data. Starting in June 1999, the Company used this system to test its key operational systems (including point of sale, inventory planning and tracking, product 9 distribution, financial reporting, and payroll and other human resources systems) on several "high-risk" dates identified by the Company, including September 9, 1999 ("9/9/99"), December 31, 1999, January 1, 2000, January 31, 2000 (the end of the Company's 1999 fiscal year) and February 29, 2000. The Company conducted similar tests using the Hewlett-Packard computer systems that are used to operate the Company's direct marketing operations. The testing disclosed only minor problems, all of which have been addressed. Finally, the actual September 9, 1999 date has now passed without any incidents relating to the Company's computer systems date. The Company expects that the combined incremental cost of testing and hardware and software upgrades relating to the Year 2000 problem will not exceed $1,000,000. There can be no assurance that the Company's operating results would not be adversely affected if any of its largest vendors were unable to fill the Company's orders. The Company has received written statements from each of its largest vendors which represent that each such vendor has addressed, or is in the process of addressing, the year 2000 issue such that manufacturing and shipping activities will not be disrupted by the Y2K problem. The Company's merchandising team is also considering other sources for similar products in the event that such vendors are unable to meet the Company's needs. Because the products sold by the Company are oftentimes unique in the marketplace, however, there can be no assurance that adequate substitute products will be available. See "Outlook: Important Factors and Uncertainties -- Dependence on Innovative Merchandising" on pages 21 - 23 of the Company's 1998 Annual Report on Form 10- K. The Company does not currently use advance shipping notification ("ASN") technology with its vendors. The Company is currently implementing an electronic purchase order confirmation system that uses standard email systems to exchange orders and confirmations with its vendors. The Company believes that it has established appropriate measures to minimize the risk of disruption to its business as it approaches the year 2000. This belief is a forward-looking statement and is premised, in part, on representations provided to the Company by third-party sources and vendors, the accuracy of which is in many cases difficult or impossible for the Company to validate. If any such representation relating to a software product relied upon for a significant business function, or a representation from a significant vendor, ultimately proves inaccurate, the Company could incur material remediation expenses and/or lost sales. In addition, like most other retailers, the Company could be materially adversely affected by disruption in the externally controlled distribution channel (including ports, United States Customs and transportation vendors), the banking and credit systems and electric and other utility suppliers. 10 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 --------------------------------------------------- A) The 1999 Annual Meeting of Stockholders of the Company was held on June 15, 1999. B) The following persons were elected Directors at the 1999 Annual Meeting for a one-year term expiring at the 2000 Annual Meeting of Stockholders. For Withheld --------- -------- Michael F. Anthony 7,777,647 57,193 Mone Anathan III 7,114,295 720,545 Adam Kirsh 7,302,365 532,475 Michael L. Glazer 7,811,561 23,279 Robert F. White 7,811,461 23,379 C) Approval and adoption of the Company's 1999 Equity Incentive Plan. For Against Abstain No Vote --------- --------- --------- ----------- 4,639,766 807,107 17,455 2,370,512 D) The appointment of PricewaterhouseCoopers LLP as the independent accountants to examine the financial statements of the Company and its subsidiaries for the fiscal year ending January 29, 2000 was ratified. For Against Abstain --------- --------- --------- 7,825,715 5,097 4,028 11 Item 5: OTHER INFORMATION ----------------- None Item 6: EXHIBITS AND REPORTS ON FORM 8-K -------------------------------- A) Exhibits 11 - Computation of Basic and Diluted Earnings (Loss) Per Common Share B) Reports on Form 8-K On May 14, 1999, a report on Form 8-K was filed by the Company, reporting the issuance of a press release dated May 12, 1999 relative to the agreement of the Company to acquire certain assets of the Gardeners Eden division of Williams-Sonoma, Inc. 12 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/ Philip W. Roizin ------------------------------------- September 14, 1999 (Signature) Philip W. Roizin Executive Vice President Finance and Administration, Treasurer and Secretary (Principal Financial Officer and duly authorized to sign on behalf of registrant) 13 EX-11 2 COMPUTATION OF BASIC AND DILUTED EARNINGS Exhibit 11 ---------- BROOKSTONE, INC. Computation of Basic and Diluted Earnings (Loss) Per Common Share (In thousands, except per share data) (Unaudited)
Thirteen Weeks Ended Twenty-Six Weeks Ended ---------------------------------------- -------------------------------------- July 31, 1999 August 1, 1998 July 31, 1999 August 1, 1998 ------------------ ------------------- ------------------ ----------------- Net income (loss) $ 9 $ (475) $ (4,614) $ (4,892) =========== ========= ========== ========== Weighted average number of common shares outstanding 8,134 7,984 8,115 7,945 Effect of dilutive securities: Stock options 279 --- --- --- =========== ========= ========== ========== Weighted average number of common shares as adjusted 8,413 7,984 8,115 7,945 =========== ========= ========== ========== Net earnings (loss) per share - basic/diluted $ 0.00 $ (0.06) $ (0.57) $ (0.62) =========== ========= ========== ==========
14 EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS JAN-29-2000 MAY-02-1999 JUL-31-1999 1,773 0 5,657 268 39,620 56,887 86,616 44,580 109,914 28,793 0 0 0 8 68,355 68,363 106,204 106,204 72,878 113,212 0 0 483 (7,491) (2,877) (4,614) 0 0 0 (4,614) (0.57) (0.57)
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