UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SEC File Number
000-27882
NOTIFICATION OF LATE FILING
CUSIP Number
224173
(Check One): [X] Form 10-K and Form 10-KSB [ ] Form 20-F [ ] Form 11-K
[ ] Form 10-Q and Form 10-QSB [ ] Form N-SAR
For Period Ended: DECEMBER 31, 1996
[ ] Transition Report on Form 10-K
[ ] Transition Report on Form 20-F
[ ] Transition Report on Form 11-K
[ ] Transition Report on Form 10-Q
[ ] Transition Report on Form N-SAR
Form the Transition Period Ended:
================================================================================
READ INSTRUCTION SHEET BEFORE PREPARING FORM. PLEASE PRINT OR TYPE.
Nothing in this form shall be construed to imply that the Commission has
verified any information contained herein.
================================================================================
If the notification relates to a portion of the filing checked above, identify
the Item(s) to which the notification relates:
- --------------------------------------------------------------------------------
PART I - REGISTRANT INFORMATION
CRAIG CONSUMER ELECTRONICS, INC.
--------------------------------
Full Name of Registrant
N/A
---
Former Name if Applicable
13845 Artesia Boulevard
-----------------------
Address of Principal Executive Office (Street and Number)
Cerritos, California 90703-9000
-------------------------------
City, State and Zip Code
PART II - RULES 12b-25(b) and (c)
If the subject report could not be filed without unreasonable effort or expense
and the registrant seeks relief pursuant to Rule 12b-25(b), the following should
be completed. (Check box if appropriate).
[X] (a) The reasons described in reasonable detail in Part III of this form
could not be eliminated without unreasonable effort or expense;
[X] (b) The subject annual report, semi-annual report, transition report on
Form 10-K, Form 20-F, Form 11-K, or Form N-SAR, or portion thereof,
will be filed on or before the fifteenth calendar day following the
prescribed due date; or the subject quarterly report or transition
report on Form 10-Q, or portion thereof, will be filed on or before
the fifth calendar day following the prescribed due date; and
<PAGE>
[*X] (c) The accountant's statement or other exhibit required by Rule 12b-25(c)
has been attached if applicable.
* TO BE FILED BY SUPPLEMENT.
PART III - NARRATIVE
State below in reasonable detail the reasons why the Form 10-K and Form 10-KSB,
11-K, 20-F, 10-Q and Form 10-QSB, N- SAR, or the transition report or portion
thereof, could not be filed within the prescribed period.
The Registrant has, in the course of completing its 1996 year-end audit, with
its independent auditors, conducted an investigation of certain accounting
matters (including those relating to prior period results), and an investigation
of the actions of certain of its personnel. The investigations are substantially
complete and it is the Registrant's expectation that the 1996 audit and
restatement of its 1995 financial statements will be concluded in the next few
days. However, the process has delayed the Registrant's ability to logistically
complete the steps necessary to prepare an accurate Management Discussion and
Analysis and other material parts of the Form 10-K. Additionally, the
Registrant, by reason of these delays and the management effort involved in the
investigations, is just completing negotiations with its various financing
sources for its long-term capital needs, which negotiations are an element of
the audit's completion and are required for an accurate description of the
Registrant's capital needs and resources.
PART IV - OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification:
JEFFREY D. WARREN 602 528-4060
---------------------------------------------------------------------------
(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under Section 13 or 15(d) of the
Securities Exchange Act of 1934 or Section 30 of the Investment Company Act
of 1940 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) been filed? If answer is no,
identify report(s).
[X] Yes [ ] No
(3) Is it anticipated that any significant change in results of operations from
the corresponding period for the last fiscal year will be reflected by the
earnings statements to be included in the subject report or portion
thereof?
[X] Yes [ ] No
If so, attach an explanation of the anticipated change, both narratively
and quantitatively, and, if appropriate, state the reasons why a reasonable
estimate of the results cannot be made.
As disclosed in the previously filed Form 8-K attached hereto, management
has determined to make certain changes to the 1995 financial statements.
The changes are quantified in the Form 8-K attached and they will be
reflected in the Form 10-K when filed. The changes are not, in management's
view, materially adverse to the Registrant's current financial condition.
2
<PAGE>
CRAIG CONSUMER ELECTRONICS, INC.
--------------------------------
(Name of Registrant as Specified in Charter)
has caused this notification to be signed on its behalf by the undersigned
thereunto duly authorized.
Date: March 28 , 1997. By: /s/ Donna Richardson
----------------- -----------------------------------
Donna Richardson,
Treasurer and Chief Financial Officer
INSTRUCTION: The form may be signed by an executive officer of the registrant or
by any other duly authorized representative. The name and title of the person
signing the form shall be typed or printed beneath the signature. If the
statement is signed on behalf of the registrant by an authorized representative
(other than an executive officer), evidence of the representative's authority to
sign on behalf of the registrant shall be filed with the form.
================================================================================
ATTENTION
INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL
CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001).
================================================================================
GENERAL INSTRUCTIONS
1. This Form is required by Rule 12b-25 (17 CFR 240.12b-25) of the General
Rules and Regulations under the Securities Exchange Act of 1934.
2. One signed original and four conformed copies of this Form and amendments
thereto must be completed and filed with the Securities and Exchange
Commission, Washington, D.C. 20549, in accordance with Rule 0-3 of the
General Rules and Regulations under the Act. The information contained in
or filed with the Form will be made a matter of the public record in the
Commission files.
3. A manually signed copy of the form and amendments thereto shall be filed
with each national securities exchange on which any class of securities of
the registrant is registered.
4. Amendments to the notifications must also be filed on Form 12b-25 but need
not restate information that has been correctly furnished. The Form shall
be clearly identified as an amended notification.
5. Electronic Filers. This Form shall not be used by electronic filers unable
to timely file a report solely due to electronic difficulties. Filers
unable to submit a report within the time period prescribed due to
difficulties in electronic filing should comply with either Rule 201 or
Rule 202 of Regulation S-T or apply for an adjustment in filing date
pursuant to Rule 13(b) of Regulation S-T.
3
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 10, 1997
-------------------
Craig Consumer Electronics, Inc.
--------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-27882 95-04228391
-------- ------- -----------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
13845 Artesia Boulevard, Cerritos, California 90703-9000
- --------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 562-926-9944
---------------
Not Applicable
--------------
(Former name or former address, if changed since last report.)
<PAGE>
ITEM 5. OTHER EVENTS.
On March 10, 1997, in connection with the completion of the Registrant's
1996 audit, the Registrant, together with its independent certified public
accounts, determined that adjustments to 1995 earnings were to be made as a
result of certain bookkeeping errors. The Registrant, upon becoming aware of
certain errors, undertook an investigation which resulted in the determination
to make the following adjustments. As to 1995, the adjustment reduced previously
reported net earnings and earnings per share by $763,000 and $0.32,
respectively. Accordingly, the Company will amend its 1995 financial statements
to present net income and earnings per share of $29,000 and $0.01, respectively.
Adjustments made to earnings during 1995 have a corresponding beneficial
effect for 1996 and possibly subsequent results of operations, therefore the
lack of any material current financial impact.
Although there is no impact on what would otherwise be the presentation
of the Registrant's current financial condition, earnings are also to be
adjusted to a limited extent for two quarters during 1996 (particularly, the
second and third quarters). The restated earnings for the applicable quarters
are as follows:
As Reported As Restated
----------- -----------
Quarter ended June 30, 1996
Cost of sales $ 9,824,000 $ 10,101,000
Net loss $ (535,000) $ (737,000)
Loss per share $ (0.20) $ (0.27)
Quarter ended September 30, 1996
Cost of sales $ 21,123,000 $ 21,336,000
Net income $ 579,000 $ 387,000
Earnings per share $ 0.16 $ 0.11
These quarterly adjustments account for the Company's conservative
treatment for reserves associated with the "Net Realizable Value" of goods to be
reconditioned in China and returned for resale.
The specific transactions for which certain errors and adjustments were
made are as follows:
The Registrant determined to adjust 1995 earnings downward by $131,557
as a result of an error in the accounting for certain inventory
returned to the Registrant's Chinese joint venture for refurbishment.
Particularly, inventory was returned during October 1995 to a Chinese
joint venture in which the Registrant has an interest, but then
returned to the Registrant's own warehouse due to problems with
customs. The goods were re-shipped to the Chinese joint venture in
December of 1995. Problems arose because, through inadvertence, no
entry was made to record the receipt of goods when returned. As a
result, when the goods were reshipped, another entry was made that had
the result of overstating inventory held by the Chinese joint venture
for refurbishment.
During 1996, a write-off of inventory totaling $171,531 occurred as a
result of defective inventory which had been previously sent back to
the Registrant's vendor in Hong Kong for refund, without making a
corresponding accounting entry to reduce the amount of Overseas
Inventory at the Registrant's joint venture.
5
<PAGE>
An additional downward reduction of $340,334 was made as a result of
Hong Kong inventory having been improperly booked as such (i.e., as
product remaining in inventory) although the goods were the subject of
sales transactions and were intended for delivery directly from Hong
Kong to the particular customer (instead of in transit to the
Registrant).
The final adjustment resulted from an inappropriate entry crediting
the "Cost of Goods Sold" account instead of the "Inventory In Transit"
account totaling $145,903 (again on goods shipped from Asia). There is
no support for this journal entry and Management's investigation
revealed the entry was the result of misjudgment by the staff person
making the entry. As with most of the adjustments, this created a
timing but not a realization problem with respect to the financial
reports. More frequent reconciliation of inventory and inventory in
transit to costs of goods sold and sales should foreclose any delay in
discerning any similar incorrect journal entries.
A minor adjustment with respect to reserves for vacation accrual is
also to be made for 1995.
The release of the Registrant's 1996 financial results, had been delayed due to
the time and effort involved to investigate and accurately understand and
document the foregoing described adjustments.
6
<PAGE>
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 hereunto duly authorized.
Craig Consumer Electronics, Inc.
Date: March 14, 1997 By: /s/ Richard I. Berger
-----------------------------------
Its Chairman of the Board of Directors
and President (Principal Executive)
Date: March 14, 1997 By: /s/ Donna Richardson
-----------------------------------
Treasurer & Chief Financial Officer
(Principal Accounting Officer)
7
