<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED APRIL 29, 2000
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: 000-24603
ELECTRONICS BOUTIQUE HOLDINGS CORP.
------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 51-0379406
------------------------ ------------------------------------
(STATE OF INCORPORATION) (IRS EMPLOYER IDENTIFICATION NUMBER)
931 SOUTH MATLACK STREET
WEST CHESTER, PENNSYLVANIA 19382
------------------------ ------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 610/430-8100
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 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 [ ]
AT JUNE 9, 2000, THERE WERE 22,227,862 SHARES OF COMMON STOCK, $.01 PAR
VALUE PER SHARE, OUTSTANDING.
<PAGE>
ELECTRONICS BOUTIQUE HOLDINGS CORP.
AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets at
April 29, 2000 (unaudited) and January 29, 2000 3
Consolidated Statements of Income (unaudited)
Thirteen weeks ended
April 29, 2000 and May 1, 1999 4
Consolidated Statements of Cash Flows (unaudited)
Thirteen weeks ended
April 29, 2000 and May 1, 1999 5
Notes to Consolidated Financial Statements (unaudited) 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
Part II. Other Information
Item 1. Legal Proceedings 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
</TABLE>
2
<PAGE>
PART I.
ITEM 1. FINANCIAL STATEMENTS
ELECTRONICS BOUTIQUE HOLDINGS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
April 29, January 29,
ASSETS 2000 2000
------------- -------------
(unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 59,666,174 $ 88,356,091
Accounts receivable:
Trade and vendors 6,742,941 9,187,991
Other 297,357 2,630,622
Merchandise inventories 89,499,387 90,550,508
Deferred tax asset 3,691,000 3,691,000
Prepaid expenses 4,577,090 4,524,233
------------- -------------
Total current assets 164,473,949 198,940,445
------------- -------------
Property and equipment:
Leasehold improvements 61,418,778 59,816,209
Fixtures and equipment 47,150,856 45,391,518
Land 2,483,674 908,000
Construction in progress 3,002,017 2,446,460
------------- -------------
114,055,325 108,562,187
Less accumulated depreciation and amortization 47,814,598 45,566,262
------------- -------------
Net property and equipment 66,240,727 62,995,925
Goodwill and other intangible assets 1,404,635 1,503,387
Deferred tax asset 8,545,336 8,505,732
Other assets 3,814,578 3,567,388
------------- -------------
Total assets $ 244,479,225 $ 275,512,877
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ -- $ 8,353
Accounts payable 100,925,205 122,822,260
Accrued expenses 18,373,635 23,437,268
Income taxes payable 4,433,240 10,105,424
------------- -------------
Total current liabilities 123,732,080 156,373,305
------------- -------------
Long-term liabilities:
Deferred rent 2,753,349 2,653,103
------------- -------------
Total liabilities 126,485,429 159,026,408
------------- -------------
Stockholders' equity
Preferred stock - authorized 25,000,000 shares;
$.01 par value; no shares issued and outstanding at
April 29, 2000
Common stock - authorized 100,000,000
shares; $.01 par value; 22,224,814 shares issued - -
and outstanding at April 29, 2000 222,248 222,211
Additional paid-in capital 75,940,168 75,888,405
Accumulated other comprehensive expense (1,188,714) (240,726)
Retained earnings 43,020,094 40,616,579
------------- -------------
Total stockholders' equity 117,993,796 116,486,469
------------- -------------
Total liabilities and stockholders' equity $ 244,479,225 $ 275,512,877
============= =============
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
ELECTRONICS BOUTIQUE HOLDINGS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Thirteen weeks ended
-------------------------
April 29, May 1,
2000 1999
------------- -------------
<S> <C> <C>
Net sales $ 150,150,526 $ 122,743,878
Management fees 924,525 861,487
------------- -------------
Total revenues $ 151,075,051 $ 123,605,365
------------- -------------
Costs and expenses:
Costs of merchandise sold, including freight 112,483,354 90,438,138
Selling, general and administrative 32,112,691 26,025,263
Depreciation and amortization 3,540,774 2,707,082
------------- -------------
Operating income 2,938,232 4,434,882
Interest (income) expense, net (1,045,054) (289,736)
------------- -------------
Income before income taxes 3,983,286 4,724,618
Income tax expense 1,579,771 1,852,049
------------- -------------
Net income $ 2,403,515 $ 2,872,569
============= =============
Net income per share-basic $ 0.11 0.14
============= =============
Weighted average shares outstanding-basic 22,223,443 20,169,200
============= =============
Net income per share-diluted $ 0.11 0.14
============= =============
Weighted average shares outstanding-diluted 22,417,430 20,312,657
============= =============
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
ELECTRONICS BOUTIQUE HOLDINGS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Thirteen weeks ended
--------------------------------
April 29, May 1,
2000 1999
--------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,403,515 $ 2,872,569
Adjustments to reconcile net income to cash used in
operating activities:
Depreciation of property and equipment 3,442,021 2,664,352
Amortization of other assets 98,752 42,730
Loss on disposal of property and equipment 24,892 11,507
Changes in assets and liabilities:
Decrease (increase) in:
Accounts receivable 4,757,130 (1,926,836)
Due from affiliates -- 583,670
Merchandise inventories 351,446 (12,695,064)
Prepaid expenses (75,574) (3,186,651)
Other long-term assets (324,211) 146,264
(Decrease) increase in:
Accounts payable (21,195,335) 847,579
Accrued expenses (4,939,295) (4,216,461)
Due to affiliate -- (97,585)
Income taxes payable (5,606,447) (5,548,971)
Deferred rent 105,898 (17,406)
------------ ------------
Net cash used in operating activities (20,957,208) (20,520,303)
------------ ------------
Cash flows used in investing activities:
Purchases of property and equipment (7,169,012) (5,040,308)
Proceeds from disposition of assets 15,000 --
------------ ------------
Net cash used in investing activities (7,154,012) (5,040,308)
------------ ------------
Cash flows from financing activities:
Proceeds from issuance of common stock 51,800 --
Repayments of long-term debt (8,353) (30,385)
------------ ------------
Net cash (used in) provided by financing activities 43,447 (30,385)
------------ ------------
Effects of exchange rates on cash (622,144) 128,691
Net decrease in cash and cash equivalents (28,689,917) (25,462,305)
Cash and cash equivalents, beginning of period 88,356,091 42,006,179
------------ ------------
Cash and cash equivalents, end of period $ 59,666,174 $ 16,543,874
============ ============
See accompanying notes to consolidated financial statements
</TABLE>
5
<PAGE>
ELECTRONICS BOUTIQUE HOLDINGS CORP.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Electronics
Boutique Holdings Corp. and its wholly owned subsidiaries ("Electronics
Boutique"). All intercompany transactions have been eliminated in consolidation.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
The accompanying unaudited consolidated financial statements of Electronics
Boutique have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. These financial statements should
be read in conjunction with the more complete disclosures contained in the
consolidated financial statements and notes thereto for the fiscal year ended
January 29, 2000 contained in Electronics Boutique's Form 10-K filed with the
Securities and Exchange Commission. Operating results for the thirteen week
period ended April 29, 2000 are not necessarily indicative of the results that
may be expected for the fiscal year ending February 3, 2001.
(2) NET INCOME PER SHARE
Basic net income per share is computed on the basis of the weighted average
number of shares outstanding during the period. Diluted net income per share is
computed on the basis of the weighted average number of shares outstanding
during the period plus the dilutive effect of stock options.
(3) INCOME TAXES
Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.
(4) DEBT
Electronics Boutique has available a revolving credit facility with Fleet
Capital Corporation for maximum borrowings of $50.0 million. As of April 29,
2000, there were no outstanding borrowings on this facility.
(5) COMPREHENSIVE INCOME
Effective February 1, 1998, Electronics Boutique adopted Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income." This
statement requires that all items recognized under accounting standards as
components of comprehensive income be reported in an annual financial statement
that is displayed with the same prominence as other financial statements.
Comprehensive income is computed as follows:
<TABLE>
<CAPTION>
Thirteen weeks ended
--------------------------------
April 29, May 1,
2000 1999
------------ -------------
<S> <C> <C>
Net income $ 2,403,515 $ 2,872,569
Foreign currency translation adjustment (947,988) 360,898
============ =============
Comprehensive income $ 1,455,527 $ 3,233,467
============ =============
</TABLE>
6
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Electronics Boutique believes that it is among the world's largest specialty
retailers of electronic games. Our primary products are video games and PC
entertainment software, supported by the sale of video game hardware, PC
productivity software and accessories. As of April 29, 2000, we operated a total
of 628 stores in 46 states, Puerto Rico, Canada, Australia and South Korea,
primarily under the names Electronics Boutique and Stop 'N Save Software. In
addition, we operated a commercial website under the URL address of
www.ebworld.com. As of such date, we also provided management services for
Electronics Boutique Plc., which operated 280 stores and 18 department
store-based concessions in the United Kingdom, Ireland and Sweden. As of April
29, 2000, we also managed 5 mall-based Waldensoftware stores for Borders Group,
Inc. We are a holding company and do not have any significant assets or
liabilities, other than all of the outstanding capital stock of our
subsidiaries.
RESULTS OF OPERATIONS
The following table sets forth certain income statement items as a
percentage of total revenues for the periods indicated:
<TABLE>
<CAPTION>
Thirteen weeks ended
--------------------
April 29, May 1,
2000 1999
------ ------
<S> <C> <C>
Net sales 99.4% 99.3%
Management fees 0.6 0.7
------ ------
Total revenues 100.0 100.0
Cost of goods sold 74.5 73.2
------ ------
Gross profit 25.5 26.8
Operating expenses 21.3 21.0
Depreciation and amortization 2.3 2.2
------ ------
Income from operations 1.9 3.6
Interest income, net (0.7) (0.2)
------ ------
Income before income tax expense 2.6 3.8
Income tax expense 1.0 1.5
------ ------
Net income 1.6% 2.3%
======= =======
</TABLE>
THIRTEEN WEEKS ENDED APRIL 29, 2000 COMPARED TO THIRTEEN WEEKS ENDED MAY 1, 1999
Net sales increased by 22.3% from $122.7 million in the thirteen weeks ended
May 1, 1999 to $150.2 million in the thirteen weeks ended April 29, 2000. The
increase in net sales was primarily attributable to a 10.9% increase in
comparable store sales, which resulted in a $13.1 million increase in net sales,
and the additional sales volume resulting from 78 net new stores opened since
May 1, 1999. Comparable store sales were positively impacted in the current
quarter by a solid performance in the video game category fueled by a number of
successful new software titles and strong sales of Sega Dreamcast, Nintendo Game
Boy, and Nintendo 64 systems, as well as continued strong sales of Pokemon
trading cards.
Management fees increased by 7.3% from $861,000 in the thirteen weeks ended
May 1, 1999 to $925,000 in the thirteen weeks ended April 29, 2000. The increase
was primarily attributable to additional fees earned from Electronics Boutique
plc., which were partially offset by lower continuing fees earned under the
consulting agreement with Borders Group, Inc. In May 1999, Electronics Boutique
plc. completed an acquisition of a competitor. Approximately $369,000 of
additional management fees were earned in the current quarter on the combined
sales of the Electronics Boutique plc. stores compared to the prior year period.
Last year's results
7
<PAGE>
included an additional $248,000 for a performance fee earnedin fiscal 1999
under the consulting agreement with Border's Group, Inc.
Cost of goods sold increased by 24.4% from $90.4 million in the thirteen
weeks ended May 1, 1999 to $112.5 million in the thirteen weeks ended April 29,
2000. As a percentage of net sales, cost of goods sold increased from 73.7% in
the thirteen weeks ended May 1, 1999 to 74.9% in the thirteen weeks ended April
29, 2000. The increase in cost of goods sold as a percentage of net sales was
primarily attributable to a shift in the sales mix to a higher quantity of video
game products than PC software, accessories and toys, which have higher overall
margins.
Selling, general and administrative expense increased by 23.4% from $26.0
million in the thirteen weeks ended May 1, 1999 to $32.1 million in the thirteen
weeks ended April 29, 2000. As a percentage of total revenues, selling, general
and administrative expense increased from 21.0% in the thirteen weeks ended May
1, 1999 to 21.3% in the thirteen weeks ended April 29, 2000. The $6.1 million
increase was primarily attributable to the increase in Electronics Boutique's
domestic and international store base and the associated increases in store,
distribution, and headquarter operating expenses. Also included in this increase
were expenses associated with sales, development and support of our internet
business which were not in place in the prior year's period. The increase in
selling, general and administrative expense as a percentage of total revenues
was primarily attributable to the impact of the above factors on operating
expenses, partially offset by the increase in net sales.
Depreciation and amortization expense increased by 30.8% from $2.7 million
in the thirteen weeks ended May 1, 1999 to $3.5 million in the thirteen weeks
ended April 29, 2000. This increase was primarily attributable to capitalized
expenditures for leasehold improvements and furniture and fixtures for new store
openings and remodeling of existing stores.
Operating income decreased by 33.7% from $4.4 million in the thirteen weeks
ended May 1, 1999 to $2.9 million in the thirteen weeks ended April 29, 2000. As
a percentage of total revenues, operating income decreased from 3.6% in the
thirteen weeks ended May 1, 1999 to 1.9% in the thirteen weeks ended April 29,
2000, as a result of the increase in cost of goods sold, operating expenses and
depreciation and amortization expense as a percentage of total revenues.
Interest income, net, increased by 261% from income of $0.3 million in the
thirteen weeks ended May 1, 1999 to income of $1.0 million in the thirteen weeks
ended April 29, 2000. The increase was primarily attributable to interest income
earned on short-term investments of the proceeds of Electronics Boutique's
secondary offering in November 1999.
As a result of all the above factors, Electronics Boutique's income before
income taxes decreased by 15.7% from income of $4.7 million in the thirteen
weeks ended May 1, 1999 to income of $4.0 million in the thirteen weeks ended
April 29, 2000.
Income tax expense decreased by 14.7% from $1.9 million in the thirteen
weeks ended May 1, 1999 to $1.6 million in the thirteen weeks ended April 29,
2000. As a percentage of pre-tax income, income tax expense increased from 39.2%
in the thirteen weeks ended May 1, 1999 to 39.7% in the thirteen weeks ended
April 29, 2000. The increase as a percentage of pre-tax income was primarily due
to foreign tax expense.
SEASONALITY AND QUARTERLY RESULTS
Electronics Boutique's business, like that of most retailers, is highly
seasonal. A significant portion of our net sales, management fees and profits
are generated during our fourth fiscal quarter, which includes the holiday
selling season. Results for any quarter are not necessarily indicative of the
results that may be achieved for a full fiscal year. Quarterly results may
fluctuate materially depending upon, among other factors, the timing of new
product introductions and new store openings, net sales contributed by new
stores, increases or decreases in comparable store sales, adverse weather
conditions, shifts in the timing of certain holidays or promotions and changes
in our merchandise mix.
8
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Electronics Boutique has historically financed its operations through a
combination of cash generated from operations and bank debt. On November 23,
1999, we completed a secondary offering of common stock which resulted in net
proceeds (after offering expenses) of approximately $40.0 million. Our working
capital decreased from $42.6 million at January 29, 2000 to $40.7 million at
April 29, 2000, primarily due to the funding of capital expenditures in excess
of proceeds generated from income with working capital. At April 29, 2000 we had
no borrowings under our $50 million revolving credit facility.
Electronics Boutique used $20.9 million in cash from operations in the
thirteen week period ended April 29, 2000 and used $20.5 million of cash from
operations during the thirteen weeks ended May 1, 1999. The $20.9 million of
cash used in operations in the current year period was primarily the result of
payment of accounts payable, accrued expenses and income taxes payable that were
outstanding at the end of the prior fiscal year, partially offset by cash
generated from net income, non-cash charges to net income and collections of
accounts receivable. The $20.5 million of cash used in operations in last year's
period was primarily the result of an increase in merchandise inventories,
payment of accrued expenses and income taxes payable that were outstanding at
the end of the fiscal year, and an increase in prepaid expenses associated with
rent expense, partially offset by cash generated from net income and non-cash
charges to net income.
Electronics Boutique made capital expenditures of $7.2 million in the
thirteen weeks ended April 29, 2000, primarily to open new stores and remodel
existing stores, for leasehold improvements at our headquarters and distribution
centers, and for the purchase of land on which new distribution centers are to
be built later this year in Canada and Australia. We made capital expenditures
of $5.0 million in the thirteen weeks ended May 1, 1999, primarily for opening
new stores, to remodel existing stores and for leasehold improvements at the
corporate headquarters and primary distribution center.
Electronics Boutique believes that cash generated from our operating
activities, offering proceeds and available bank borrowings will be sufficient
to fund our operations and store expansion programs.
On March 31, 2000, Electronics Boutique entered into a definitive merger
agreement for the acquisition of all outstanding shares of Funco, Inc. for
$17.50 per share or approximately $110 million in cash. On April 6, 2000, Funco,
Inc. received a competing offer from Barnes and Noble Inc., for $135 million or
approximately $21.00 per share. On April 20, 2000, Electronics Boutique raised
our cash offer to $21.00 per share to match the competing offer by Barnes &
Noble Inc., which was accepted by Funco, Inc. On April 26, 2000, Barnes and
Noble Inc. raised its cash offer to $24.75 per share. On May 2, 2000,
Electronics Boutique notified Funco, Inc. that we did not intend to raise our
offer and would not pursue the acquisition. Subsequently, Electronics Boutique
received a payment of $3.5 million representing a termination fee and
reimbursement of fees and expenses in accordance with the original merger
agreement. Electronics Boutique will record the income associated with this
payment net of all expenses, approximately $1.8 million, associated with the
proposed acquisition in the quarter ending July 29, 2000.
IMPACT OF INFLATION
Electronics Boutique does not believe that inflation has had a material
effect on our net sales or results of operations.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the FASB issued Statement of Financial Accounting Standards
No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
133"). This statement establishes accounting and reporting standards for
derivative instruments and for hedging activities. It requires that an entity
recognize all derivatives as either assets or liabilities in the statement of
financial position and measures those instruments at fair value. The adoption of
this standard is not expected to materially impact the Company's results of
operations, financial condition or long-term liquidity.
9
<PAGE>
In June 1999, the FASB issued Statement of Financial Accounting Standards
No. 137, Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of FASB Statement No. 133 ("SFAS 137"). SFAS
137 delays the implementation of SFAS No. 133 until the year 2002.
YEAR 2000 READINESS
Electronics Boutique met our Year 2000 project objectives and completed the
project prior to December 31, 1999. We have not experienced any disruption in
our operations as a result of non-compliance of vendors, financial institutions,
or other third parties or external systems. At this time, the possibility of a
third-party risk arising, which could have a material risk on the Electronics
Boutique is not reasonably likely to occur. We developed a Year 2000 program to
identify, evaluate, test, upgrade, or replace each of our computer based systems
in connection with Year 2000 readiness. We completed the process of modifying,
upgrading, remediating and replacing major computer related systems that were
identified as potentially non-compliant by December 31, 1999. Total costs
associated with our Year 2000 project were funded with operating cash flow and
approximated $823,000, of which approximately $517,000 was incurred in fiscal
1999 and approximately $306,000 was incurred in fiscal 2000.
SAFE HARBOR PROVISIONS UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
The Private Securities Litigation Reform Act of 1995 provides a safe harbor
for forward-looking statements. A number of matters and subject areas discussed
in "Management's Discussion and Analysis of Financial Condition and Results of
Operations", are not limited to historical or current facts and deal with
potential future circumstances and developments. Readers are cautioned that such
forward-looking statements are subject to risks and uncertainties that could
cause actual results to differ materially. These risks include, but are not
limited to, the Company's dependence on the continued introduction of new and
enhanced video games and PC hardware and software; the cyclical nature of the
video game market; the rapid technological changes which occur in the video game
and PC industry; the Company's ability to open and operate new stores on a
profitable basis; the intensely competitive nature of the electronic game
industry and its rapid changes in consumer preferences and frequent new product
introductions; the seasonal nature of the retail industry; the Company's
dependence on its suppliers for products; risks associated with the Year 2000
issue; risks inherent to conducting international operations; and consumer
spending patterns and prevailing economic conditions. Please refer to the
Company's Annual Report on Form 10-K for the year ended January 29, 2000 on file
with the SEC for a more detailed discussion of these and other factors that
could cause results to differ materially.
10
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Electronics Boutique is involved from time to time in legal proceedings
arising in the ordinary course of our business. In the opinion of management, no
pending proceedings will have a material adverse effect on our results of
operations or financial condition.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits:
<TABLE>
<S> <C>
2.1 Agreement and Plan of Merger, dated as of March 31, 2000,
by and among Electronics Boutique, EB Acquisition Corporation
and Funco, Inc.(1)
11.1 Statement regarding computation of per share earnings
27.1 Financial Data Schedule
</TABLE>
------------
(1) Incorporated by reference to Electronics Boutique's Current
Report on From 8-K dated March 31, 2000.
b. Reports on Form 8-K
Electronics Boutique filed the following Current Reports on
Form 8-K during the three month period ended April 29, 2000:
On April 6, 2000, Electronics Boutique filed a Current Report
on Form 8-K dated March 31, 2000, reporting under Item 5, the
execution by Electronics Boutique and Funco, Inc. ("Funco") of
an Agreement and Plan of Merger (the "Merger Agreement"),
pursuant to which a wholly-owned subsidiary of Electronics
Boutique would acquire control of Funco through a cash tender
offer to purchase all of Funco's issued and outstanding common
stock for $17.50 per share, or an aggregate purchase price of
approximately $110 million.
On April 25, 2000, Electronics Boutique filed a current Report
on Form 8-K dated April 20, 2000, reporting under Item 5, the
execution of an amendment to the Merger Agreement pursuant to
which a wholly-owned subsidiary of Electronics Boutique would
acquire control of Funco through a cash tender offer to
purchase all of Funco's issued and outstanding common stock
for $21.00 per share, or an aggregate purchase price of
approximately $135 million.
11
<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 thereunto duly authorized.
Electronics Boutique Holdings Corp.
-----------------------------------
(Registrant)
Date: June 12, 2000 By: /S/ Joseph J. Firestone
-----------------------
Joseph J. Firestone
President and Chief
Executive Officer
(Principal Executive Officer)
Date: June 12, 2000 By: /S/ John R. Panichello
----------------------
John R. Panichello
Senior Vice President and
Chief Financial Officer
(Principal Financial and Accounting Officer)
12
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<S> <C>
11.1 Statement Regarding Computation of Per Share Earnings
27.1 Financial Data Schedule
</TABLE>
13
