-----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, JTOAdpxFWLGu9yJt13GaOS2s41BTDOIFEawgJQ4Z1I1cBbgK3Ttxc6VRu8SyWEZJ rwTKj2SRgFc+tt650Sun1w== 0000927016-99-003936.txt : 19991215 0000927016-99-003936.hdr.sgml : 19991215 ACCESSION NUMBER: 0000927016-99-003936 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991030 FILED AS OF DATE: 19991214 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: 99773912 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 October 30, 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 incorporation (I.R.S. Employer 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: 8,183,213 shares of common --------- stock as of December 5, 1999. ---------------- BROOKSTONE, INC. Index to Form 10-Q
Part I: Financial Information Page No. --------------------- -------- Item 1: Consolidated Balance Sheet as of October 30, 1999, January 30, 1999 and October 31, 1998 3 Consolidated Statement of Operations for the thirteen and thirty-nine weeks ended October 30, 1999 and October 31, 1998 4 Consolidated Statement of Cash Flows for the thirty-nine weeks ended October 30, 1999 and October 31, 1998 5 Notes to Consolidated Financial Statements 6 - 8 Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations 9 - 11 Part II: Other Information ----------------- Item 1: Legal Proceedings 12 Item 2: Change in Securities 12 Item 3: Defaults by the Company upon its Senior Securities 12 Item 4: Submission of Matters to a Vote of Security Holders 12 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) October 30, 1999 January 30, 1999 October 31, 1998 ---------------- ---------------- ---------------- Assets - ------ Current assets: Cash and cash equivalents $ 1,242 $ 17,391 $ 4,028 Receivables, net 5,915 6,256 4,795 Merchandise inventories 64,150 37,444 62,143 Deferred income taxes 8,301 1,781 9,503 Other current assets 6,082 4,623 5,256 -------- -------- -------- Total current assets 85,690 67,495 85,725 Deferred income taxes 2,956 3,643 2,916 Property and equipment, net 43,276 42,124 39,345 Intangible assets 6,377 -- -- Other assets 3,291 1,299 2,446 -------- -------- -------- $141,590 $114,561 $130,432 ======== ======== ======== Liabilities and Shareholders' Equity - ------------------------------------ Current liabilities: Short-term borrowings $ 25,000 $ -- $ 30,000 Accounts payable 28,245 10,727 24,491 Other current liabilities 11,185 18,950 9,968 -------- -------- -------- Total current liabilities 64,430 29,677 64,459 Other long-term liabilities 10,492 9,962 10,017 Long-term obligation under capital lease 2,540 2,612 2,628 Commitments and contingencies Shareholders' equity: Preferred stock, $0.001 par value: Authorized - 2,000,000 shares; issued and outstanding - 0 shares at October 30, 1999, January 30, 1999 and October 31, 1998 Common stock, $0.001 par value: Authorized - 50,000,000 shares; issued and outstanding - 8,171,213 at October 30, 1999, 8,064,586 shares at January 30, 1999 and 8,019,711 shares at October 31, 1998 8 8 8 Additional paid-in capital 49,251 48,330 48,042 Retained earnings 14,916 24,019 5,325 Treasury stock, at cost - 3,616 shares at October 30, 1999, January 30, 1999 and October 31, 1998 (47) (47) (47) -------- -------- -------- Total shareholders' equity 64,128 72,310 53,328 -------- -------- -------- $141,590 $114,561 $130,432 ======== ======== ========
Note: The accompanying notes are an integral part of these financial statements. 3 BROOKSTONE, INC. CONSOLIDATED STATEMENT OF OPERATIONS (In thousands, except per share data) (Unaudited)
Thirteen Weeks Ended Thirty-nine Weeks Ended ----------------------------------- ----------------------------------- October 30, 1999 October 31, 1998 October 30, 1999 October 31, 1998 ---------------- ---------------- ---------------- ---------------- Net sales $ 53,234 $ 43,459 $ 159,439 $ 135,134 Cost of sales 37,270 32,076 110,148 97,561 -------- -------- --------- --------- Gross profit 15,964 11,383 49,291 37,573 Selling, general and administrative expenses 22,723 18,163 63,058 51,731 -------- -------- --------- --------- Loss from operations (6,759) (6,780) (13,767) (14,158) Interest expense, net 528 587 1,011 1,281 -------- -------- --------- --------- Loss before taxes (7,287) (7,367) (14,778) (15,439) Income tax benefit (2,798) (2,903) (5,675) (6,083) -------- -------- --------- --------- Net loss $ (4,489) $ (4,464) $ (9,103) $ (9,356) ======== ======== ========= ========= Loss per share - basic/diluted $ (0.55) $ (0.56) $ (1.12) $ (1.17) ======== ======== ========= ========= Weighted average shares outstanding - basic/diluted 8,164 8,012 8,131 7,967
Note: The accompanying notes are an integral part of these financial statements. 4 BROOKSTONE, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (In thousands) (Unaudited)
Thirty-nine Weeks Ended --------------------------------- October 30, October 31, 1999 1998 ----------- ----------- Cash flows from operating activities: Net loss $ (9,103) $ (9,356) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation and amortization 6,672 5,605 Amortization of debt issuance costs 115 108 Deferred income taxes (5,833) (6,698) Increase in other assets (828) (1,489) Increase in other long-term liabilities 530 205 Changes in working capital: Accounts receivable, net 341 737 Merchandise inventories (24,305) (24,858) Other current assets (1,459) (4,301) Accounts payable 17,518 10,051 Other current liabilities (8,501) (6,634) --------- -------- Net cash used by operating activities (24,853) (36,630) --------- -------- Cash flows from investing activities: Expenditures for property and equipment (7,535) (7,096) Expenditure for Gardeners Eden acquisition (9,616) ---- --------- -------- Net cash used for investing activities (17,151) (7,096) --------- -------- Cash flows from financing activities: Borrowings from revolving credit 25,000 30,000 Payments for capitalized lease (66) (70) Proceeds from exercise of stock options and related tax benefits 921 918 --------- -------- Net cash provided by financing activities 25,855 30,848 --------- -------- Net decrease in cash and cash equivalents (16,149) (12,878) Cash and cash equivalents at beginning of period 17,391 16,906 --------- -------- Cash and cash equivalents at end of period $ 1,242 $ 4,028 ========= ========
Note: The accompanying notes are an integral part of these financial statements. 5 BROOKSTONE, INC. Notes to Consolidated Financial Statements 1. The results of the thirty-nine week period ended October 30, 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 substantially 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 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 $314,000 for the thirty-nine week period ended October 30, 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 loss for the thirteen and thirty-nine week periods ended October 30, 1999 and October 31, 1998, respectively (in thousands):
Thirteen Weeks: (in thousands) Net Sales Pre-tax Loss --------------------------------- ----------------------------------- October 30, October 31, October 30, October 31, 1999 1998 1999 1998 --------------------------------- ----------------------------------- Reportable segment: Retail $ 43,235 $ 38,654 $ (6,120) $ (6,358) Direct marketing 9,999 4,805 (639) (422) Reconciling items: Interest expense --- --- (528) (587) --------------------------------- ----------------------------------- Consolidated: $ 53,234 $ 43,459 $ (7,287) $ (7,367) ================================= ===================================
Thirty-nine Weeks: (in thousands) Net Sales Pre-tax Loss --------------------------------- ---------------------------------- October 30, October 31, October 30, October 31, 1999 1998 1999 1998 --------------------------------- ---------------------------------- Reportable segment: Retail $ 134,362 $ 121,797 $ (12,227) $ (12,567) Direct marketing 25,077 13,337 (1,540) (1,591) Reconciling items: Interest expense --- --- (1,011) (1,281) --------------------------------- ---------------------------------- Consolidated: $ 159,439 $ 135,134 $ (14,778) $ (15,439) ================================= ==================================
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. The Company recorded amortization expense of $289,000 for the thirty-nine week period ended October 30, 1999 relating to the intangible assets. 7 6. Basic and diluted earnings per share (EPS) were calculated for the thirteen and thirty-nine week periods ended October 30, 1999 and October 31, 1998 as follows: (In thousands, except per share data) (Unaudited)
Thirteen Weeks Ended Thirty-nine Weeks Ended ----------------------------------------- -------------------------------------- October 30, 1999 October 31, 1998 October 30, 1999 October 31, 1998 ------------------- ------------------- ------------------ ------------------ Net loss $ (4,489) $ (4,464) $ (9,103) $ (9,356) =============== =============== ============== =============== Weighted average number of common shares outstanding 8,164 8,012 8,131 7,967 Effect of dilutive securities: Stock options --- --- --- --- Weighted average number of common --------------- --------------- -------------- --------------- shares as adjusted 8,164 8,012 8,131 7,967 =============== =============== ============== =============== Net loss per share - basic/diluted $ ( 0.55) $ (0.56) $ (1.12) $ (1.17) =============== =============== ============== ===============
For the thirteen and thirty-nine week periods ended October 30, 1999, antidilutive shares of 266,108 and 261,661, respectively, were excluded from the computation of diluted earnings per share. For the thirteen and thirty- nine week periods ended October 31, 1998, antidilutive shares of 238,386 and 305,129, respectively, were excluded from the computation of diluted earnings per share. 8 BROOKSTONE, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations for the Thirteen-Week and Thirty-nine Week Periods Ended October 30, 1999 Results of Operations - --------------------- For the thirteen-week and thirty-nine week periods ended October 30, 1999, net sales increased 22.5% and 18.0% respectively over the comparable periods last year. Comparable store sales for the thirteen-week and thirty-nine week periods increased 6.0% and 4.5% respectively. The sales increase reflected the results of opening 10 new stores during the fourth quarter of Fiscal 1998 and 12 new stores during Fiscal 1999, offset by the closing of one store during the fourth quarter of Fiscal 1998. The total number of Brookstone stores open at the end of the thirty-nine week period ended October 30, 1999 was 208 versus 187 at the end of the comparable period in Fiscal 1998. Direct marketing sales increased 88.0% over the comparable thirty-nine 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 30.0% and 30.9% for the thirteen and thirty-nine week periods ended October 30, 1999 versus 26.2% and 27.8% 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 42.7% and 39.5% for the thirteen and thirty-nine week periods ended October 30, 1999 versus 41.8% and 38.3% 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 thirty-nine week periods ended October 30, 1999 was $528,000 and $1,011,000, compared to $587,000 and $1,281,000 during the comparable periods last year. The decrease for the thirteen and thirty-nine 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 a net loss of $4,489,000 or $0.55 per basic/diluted share for the thirteen-week period ended October 30, 1999, as compared to a net loss of $4,464,000 or $0.56 per basic/diluted share for the comparable period last year. For the thirty-nine week period ended October 30, 1999, the Company reported a net loss of $9,103,000 or $1.12 per basic/diluted share, compared to a net loss of $9,356,000 or $1.17 per basic/diluted share for the comparable period last year. Financial Condition - ------------------- For the thirty-nine week period ended October 30, 1999, net cash used by operating activities totaled $24.9 million, reflecting primarily the net loss, purchase of inventory 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 thirty-nine week period of Fiscal 1999, representing the purchase of property and equipment and the acquisition of the Gardeners Eden catalog, amounted to $17.2 million. Cash from financing activities during the thirty-nine week period of Fiscal 1999 amounted to $25.9 million, acquired primarily through borrowings under the Company's revolving credit agreement and the exercise of stock options and related tax benefits. 9 For the thirty-nine week period ended October 31, 1998, net cash used by operating activities totaled $36.6 million, primarily as a result of the net loss, purchase of inventory and payment of income taxes. Cash used for investment activities during the thirty-nine week period of Fiscal 1998, representing the purchase of property and equipment, amounted to $7.1 million. Cash from financing activities during the thirty-nine week period of Fiscal 1998 amounted to $30.8 million, acquired primarily through borrowings under the Company's revolving credit agreement and the exercise of stock options and related tax benefits. Merchandise inventories were $64.2 million at October 30, 1999 compared to $37.4 million at January 30, 1999. The increase in inventory was primarily to support the heightened holiday selling season needs, the acquisition of the Gardeners Eden catalog and the new stores opened. The accounts payable balance was $28.2 million at October 30, 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 thirty-nine week period ended October 30, 1999, the Company's capital expenditures were principally related to the remodeling of six retail stores and the opening of 12 new stores. The Company anticipates opening a total of approximately 15 new stores, including as many as two 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 October 30, 1999, the Company had $25.0 million in outstanding borrowings under its revolving credit agreement as compared to an outstanding balance of $30.0 million at October 31, 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. 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. 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 10 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 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 29, 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. 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. 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. 11 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 ----------------- None Item 6: EXHIBITS AND REPORTS ON FORM 8-K -------------------------------- A) Exhibits None B) Reports on Form 8-K No reports on Form 8-K were filed during the period for which this report is filed. 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 ----------------------------------------------- December 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-27 2 FINANCIAL DATA SCHEDULE
5 1,000 9-MOS JAN-29-2000 JAN-31-1999 OCT-30-1999 1,242 0 6,192 277 64,150 85,690 89,124 45,848 141,590 64,430 0 8 0 0 64,120 141,590 159,439 159,439 110,148 173,206 0 0 1,011 (14,778) (5,675) 0 0 0 0 (9,103) (1.12) (1.12)
-----END PRIVACY-ENHANCED MESSAGE-----