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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JANUARY 20, 2000
TWEETER HOME ENTERTAINMENT GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-24091 04-3417513
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
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10 PEQUOT WAY
CANTON, MASSACHUSETTS 02021
(ADDRESS, INCLUDING ZIP CODE OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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Item 5. Other Events
On January 20, 2000, the registrant announced that it had reached an
agreement in principle to acquire United Audio Centers, Inc., a seven-store
specialty consumer electronics retailer located in the greater Chicago, Illinois
area. The agreement in principle to acquire United Audio Centers, Inc. is
subject to various terms and conditions, and is subject to regulatory approval.
The registrant also announced its earnings results for the quarter
ended December 31, 1999.
A copy of the press releases issued by the registrant regarding the
foregoing are filed herewith as Exhibit 99.1 and Exhibit 99.2 and are
incorporated herein by reference.
Item 7. Financial Statements and Exhibits
(a) Exhibits
Exhibit Number
99.1 Press Release dated January 20, 2000
99.2 Press Release dated January 20, 2000
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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
under-signed hereunto duly authorized.
TWEETER HOME ENTERTAINMENT GROUP, INC.
Registrant
DATED: January 20, 2000
By: /s/ Joseph G. McGuire
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Joseph G. McGuire
Chief Financial Officer
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Exhibit 99.1
TWEETER HOME ENTERTAINMENT GROUP ANNOUNCES AN AGREEMENT IN PRINCIPLE TO ACQUIRE
UNITED AUDIO CENTERS, INC. IN CHICAGO.
CANTON, MA. January 20, 2000 -- Tweeter Home Entertainment Group, Inc., (Nasdaq:
TWTR) announced today that it has reached an agreement in principle to acquire
United Audio Centers, Inc., located in the greater Chicago, Illinois area.
United Audio is a seven-store specialty consumer electronics retailer with
annual sales of approximately $48 million, and has been in business in the
Chicago market for over 40 years. The companies expect to complete the
transaction on or about April 1, 2000. The agreement in principle to acquire
United Audio is subject to various terms and conditions, and is subject to
regulatory approval.
Tweeter Home Entertainment Group expects to exchange Tweeter common stock with
an approximate current value of $6.5 million, for 100% of the common stock of
United Audio. The company intends to issue these shares from its shelf
registration filed on April 13, 1999, and amended on December 23, 1999. The
transaction is expected to qualify as a tax-free reorganization for tax
purposes, and will be accounted for as a purchase.
Jeffrey Stone, Tweeter's President and Chief Executive Officer said, "The United
Audio acquisition is another important step in Tweeter's growth. Recognized by
Audio Video International Magazine as one of the top ten retailers in the
consumer electronics industry in 1999, United is an industry leader in combining
quality products, knowledgeable sales consultants and high levels of service.
Tweeter expects to grow United Audio's presence in the greater Chicago area over
the next several years and use the Chicago marketplace as a springboard into
other surrounding cities."
Shelley Miller, United's CEO will be joining the Tweeter Home Entertainment
Group in a Senior Vice President capacity and will be moving his family to the
Boston area. A 26-year veteran of the industry, Shelley will add depth to the
Company's already strong executive team and will play an important role in the
continued expansion of the business.
Stone added that, "We also expect to open up to 11 more new stores between now
and the end of fiscal 2000 and relocate three more existing stores. This is in
addition to the three new stores and one relocation that have already been
completed this year. With the addition of the seven United Audio stores, we
expect to add a total of 21 stores in fiscal 2000, up from the previously
announced 16 stores."
According to Joe McGuire, Tweeter's CFO, "We expect that the acquisition of
United Audio will have a neutral effect on our earnings for the remainder of the
fiscal year. After fiscal 2000, we expect this acquisition to contribute to
earnings per share growth as we further develop the greater Chicago market where
United Audio currently operates."
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Tweeter Home Entertainment Group, Inc. (Nasdaq: TWTR) was founded in 1972 by
current Chairman Sandy Bloomberg. Based in Canton, Massachusetts, the company is
a specialty retailer of mid- to high-end audio and video consumer electronics
products. The company's fiscal 1999 revenues were $283.3 million, and it was
named "Consumer Electronics Retailer of the Year" for 1996, 1997 and 1999 by
AudioVideo International Magazine, the country's leading consumer electronics
industry trade publication. The company employs approximately 1,700 associates.
It operates 76 stores under the Tweeter, etc, Bryn Mawr Stereo & Video, HiFi
Buys, Home Entertainment and DOW Stereo/Video names in the New England,
Mid-Atlantic, Southeastern, Texas and San Diego California markets,
respectively.
# # # # # #
For further information, contact Anne-Marie Boucher at 781 830 3478,
fax 781 830 3223 or email at [email protected]. Additional information on
Tweeter Home Entertainment Group can also be found on the company's
web site at www.twtr.com.
# # #
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Certain statements contained in this press release, including, without
limitation, statements containing the words "expects," "anticipates,"
"believes," and words of similar import, constitute "forward looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. The
financial and other projections included in this press release concerning United
Audio's results following the planned acquisition are based on various
assumptions, including that Tweeter will complete the acquisition as currently
contemplated. It is possible that Tweeter's acquisition of United Audio will not
be completed as currently planned. Further, these projections involve future
operations and revenues and are therefore speculative. While Tweeter's
management believes that the projections are based on reasonable assumptions
concerning United Audio's operations and revenues following the completion of
the planned acquisition, such operations and revenues may differ significantly
from management's current expectations. These forward looking statements and
projections are subject to various risks and uncertainties, including risks
associated with the difficulty of integrating United Audio with the Tweeter
business model, the potential failure to achieve the beneficial synergies
expected to result from the acquisition, risks associated with management of
growth, the risks of economic downturns generally, and in Tweeter's industry
specifically, the risks associated with competitive pricing pressure and
seasonal fluctuations, the risks associated with the potential failure by
Tweeter to anticipate and react to changes in consumer demand and preferences,
Tweeter's dependence on key personnel, the risks associated with obtaining
financing for our business model, and those risks referred to in Tweeter's
Registration Statement on Form S-3 (SEC file number 333-94433) and Tweeter's
other filings with the Securities and Exchange Commission (copies of which may
be accessed through the SEC's web site at http:\\www.sec.gov), that could cause
actual future results and events to differ materially from those currently
anticipated. Readers are cautioned not to place undue reliance on these
forward-looking statements and financial projections.
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Exhibit 99.2
TWEETER HOME ENTERTAINMENT GROUP REPORTS RECORD EARNINGS FOR ITS FIRST QUARTER
ENDING DECEMBER 31, 1999
CANTON, MA., January 20, 2000 -- Tweeter Home Entertainment Group, Inc. (Nasdaq:
TWTR) announced its earnings results for the first quarter ended December 31,
1999.
For the quarter ended December 31, 1999, total revenue increased 43.8% to $124.8
million from $86.8 million in the same period last year. Comparable store sales
increased by 11.9%, excluding the Home Entertainment and DOW Stereo/Video
chains. Net income for the quarter increased 78.2% to $8.1 million from $4.6
million for the same period last year. Earnings per share were $0.48 on a
diluted basis, compared to $0.32 for the same period last year.
Income from operations, as a percentage of total revenue, increased to 11.0% for
the quarter ended December 31, 1999 from 9.0% in the same period last year. This
was due to an increase in gross margin, as well as a reduction in general and
administrative expenses as a percent of total revenue. Gross margin increased to
36.6% from 34.1% for the same quarter last year, due to increased sales of
higher margin products such as DVD players, high end digital receivers, digital
camcorders and digital televisions. With greater sales volume, general and
administrative expenses as a percent of revenue decreased to 3.7% from 4.7% for
the same quarter last year.
Tweeter Home Entertainment Group, Inc. is a specialty retailer of mid to
high-end audio and video consumer electronics products. The Company operates 76
stores under the Tweeter etc, Bryn Mawr Stereo & Video, HiFi Buys, Home
Entertainment and DOW Stereo/Video names in the New England, Mid-Atlantic,
Southeast, Texas and Southern California markets, respectively. The Company's
stores feature an extensive selection of home and car audio systems and
components, portable audio equipment, and home video products, including large
screen televisions, DVD players, digital satellite systems, video cassette
recorders and camcorders.
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TWEETER HOME ENTERTAINMENT GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1999 AND 1998
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED
DECEMBER 31,
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1999 1998
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Total revenue $ 124,814 $ 86,784
Cost of sales 79,165 57,233
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Gross Profit 45,649 29,551
Selling expenses 26,982 17,499
Corporate, general and administrative expenses 4,647 4,041
Goodwill 332 215
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Income from operations 13,688 7,796
Income from joint venture 107 --
Interest expense 258 201
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Income before income taxes 13,537 7,595
Income tax expense 5,415 3,038
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Net income $ 8,122 $ 4,557
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Basic earnings per share ----------- -----------
Net income $ 0.53 $ 0.36
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Diluted earnings per share ----------- -----------
Net income $ 0.48 $ 0.32
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Weighted average shares outstanding
Basic 15,276,825 12,713,122
Diluted 17,044,278 14,204,200
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TWEETER HOME ENTERTAINMENT GROUP, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, SEPTEMBER 30,
ASSETS 1999 1999
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CURRENT ASSETS:
Cash and cash equivalents....................... $ 3,727,724 $ 999,495
Accounts receivable, net........................ 18,597,703 9,556,846
Inventory....................................... 67,891,889 62,135,516
Other current assets............................ 2,476,413 2,578,408
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Total current assets....................... 92,693,729 75,270,265
Property and equipment, net..................... 37,101,112 34,243,241
Other assets, net............................... 5,509,390 2,037,982
Goodwill, net................................... 29,928,095 30,067,691
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TOTAL...................................... $165,232,326 $141,619,179
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt............... $ 33,384 $ 35,551
Amount due to bank.............................. 8,232,174 6,023,056
Accounts payable, accrued expenses and other
current liabilities........................... 55,845,107 37,687,674
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Total current liabilities.................. 64,110,665 43,746,281
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LONG-TERM DEBT:
Note payable to bank............................ 27,707 5,716,805
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Total long-term debt....................... 27,707 5,716,805
Other long-term liabilities..................... 4,926,942 4,910,922
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Total liabilities.......................... 69,065,314 54,374,008
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COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY 96,167,012 87,245,171
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TOTAL...................................... $165,232,326 $141,619,179
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Tweeter Home Entertainment Group news and financial releases can be found on the
Company's investor relations website at WWW.TWTR.COM. For further information,
please contact Joe McGuire, Chief Financial Officer at (781) 830-3314 voice,
(781) 821-9956 fax, or via email at [email protected]
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Certain statements contained in this press release, including, without
limitation, statements containing the words "expects," "anticipates,"
"believes," and words of similar import, constitute "forward looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
These forward looking statements are subject to various risks and uncertainties,
including those related to Company growth and acquisitions, dependence on key
personnel, the need for additional financing, competition and seasonal
fluctuations, and those referred to in the Tweeter's Registration Statement
filed on Form S-3 (SEC file number 333-94433) on January 11, 2000 and in the
Company's Annual Report on Form 10-K filed on December 10, 1999, that could
cause actual future results and events to differ materially from those currently
anticipated. Readers are cautioned not to place undue reliance on these forward
looking statements.
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