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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 12b-25
NOTIFICATION OF LATE FILING
Commission File Number 001-09630
/X/ Form 10-K / / Form 20-F / / Form 11-K / / Form 10-Q / / Form N-SAR
(Check One):
For Period Ended: July 31, 1998
[ ] 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
For the Transition Period Ended: _______________________
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Read Instruction (on back page) 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.
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If the notification relates to a portion of the filing checked above, identify
the Item(s) to which the notification relates:
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PART I -- REGISTRANT INFORMATION
CML GROUP, INC.
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Full Name of Registrant
N/A
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Former Name if Applicable
524 Main Street
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Address of Principal Executive Office (Street and Number)
Acton, MA 01720
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City, State and Zip Code
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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, 20-F, 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
[X] (c) The accountant's statement or other exhibit required by Rule
12b-25(c) has been attached if applicable.
PART III -- NARRATIVE
State below in reasonable detail the reasons why the Form 10-K, 11-K, 20-F,
10-Q, N-SAR, or the transition report or portion thereof, could not be filed
within the prescribed time period. (ATTACH EXTRA SHEETS IF NEEDED)
The Registrant's Annual Report on Form 10-K for the fiscal year ended July 31,
1998 could not be filed within the prescribed time period because certain
information relating to the financing and operation of one of the Registrant's
two principal subsidiaries could not be prepared by the Registrant within such
time period without unreasonable effort or expense.
PART IV -- OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification.
John A. C. Pound (978) 264-4155
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(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 separate, state the reasons why a reasonable
estimate of the results cannot be made.
The Registrant has reported operating results for the fiscal year ended
July 31, 1998. A copy of the Registrant's press release is attached.
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CML GROUP, INC.
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(Name of Registrant as Specified in Charter)
has caused this notification to be signed on its behalf by the undersigned
hereunto duly authorized.
Date: OCTOBER 30, 1998 By: /s/ John A. C. Pound
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John A. C. Pound, Chairman and
Chief Executive 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
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INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL
CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001).
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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 have been 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 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.
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CML NEWS RELEASE
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524 Main Street
Acton, Massachusetts 01720
Telephone: (978) 264-4155
Fax: (978) 264-4073
CONTACT: Lynn Harrison
Director of Investor Relations
(978) 264-4155
FOR IMMEDIATE RELEASE
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October 29, 1998
CML REPORTS FISCAL 1998 RESULTS
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Acton, Mass., October 29, 1998 -- CML Group, Inc. (NYSE: CML) today
reported a consolidated net loss of $127,378,000, or $2.54 per share, for the
fiscal year ended July 31, 1998, compared with a net loss of $40,214,000, or
$0.81 per share, in fiscal 1997. The Company's consolidated results for fiscal
1998 included a provision for income taxes of $31,416,000, reflecting a
reduction of the Company's deferred income tax balances. The consolidated
results for the prior year reflected an income tax benefit of $20,717,000.
The net loss for fiscal 1998 also included restructuring and asset
impairment charges of $11,767,000, which NordicTrack recorded for the shutdown
of its manufacturing and distribution facility in Glencoe, Minnesota, and to
exit the direct response and catalog businesses. Sales for fiscal 1998 totaled
$274,360,000, compared with $341,315,000 for fiscal 1997, primarily reflecting
the Company's decision to exit the unprofitable direct response and catalog
distribution channels.
For fiscal 1998, Smith & Hawken's operating profit was $2,801,000, compared
with an operating profit of $2,008,000 in fiscal 1997. NordicTrack's operating
loss, including restructuring and asset impairment charges for fiscal 1998, was
$85,649,000, compared with an operating loss of $58,641,000 in fiscal 1997. For
fiscal 1998, sales at Smith & Hawken increased 19.7% over fiscal 1997 to
$88,041,000, while sales at NordicTrack decreased 30.4% to $186,319,000. The
sales decrease at NordicTrack was primarily attributable to the decision made in
January to exit the direct response and catalog sales channels.
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For the fourth quarter of fiscal 1998, CML reported a net loss on a
consolidated basis of $25,007,000, or $0.49 per share. The net loss for the
quarter included restructuring charges of $357,000 related to the strategic
repositioning of NordicTrack which began during the second quarter of the fiscal
year. For the fourth quarter of fiscal 1997, the Company reported a net loss of
$12,776,000, or $0.26 per share. Sales for the fourth quarter of fiscal 1998
totaled $47,529,000, compared with $62,915,000 for the corresponding period of
fiscal 1997.
For the fourth quarter of fiscal 1998, Smith & Hawken's operating income
equaled $3,968,000, compared with operating income of $2,874,000 in the
corresponding period of fiscal 1997. NordicTrack's operating loss for the fourth
quarter of fiscal 1998 was $23,986,000, compared with an operating loss of
$21,205,000 in the corresponding period of the fiscal 1997.
Sales at Smith & Hawken for the fourth quarter of fiscal 1998 totaled
$28,125,000, an increase of 23.8% over the corresponding quarter of fiscal 1997,
while sales at NordicTrack totaled $19,404,000, representing a decrease of 51.7%
over the prior year quarter. The sales decrease at NordicTrack was primarily
attributable to the decision made in January to exit the direct response and
catalog sales channels.
Separately, CML place to file an application with The Securities and
Exchange Commission (SEC) for a 15-day extension in the filing of the Company's
Annual Report on Form 10-K for the fiscal year ended July 31, 1998. The Company
also disclosed that as a result of the Company's recurring losses from
operations and stockholders' deficit, the Company expects that its independent
auditors report on the Company's fiscal 1998 consolidated financial statements
will contain an explanatory paragraph relating to uncertainty with respect to
the Company's ability to continue as a going concern in its present
configuration.
As previously announced, CML is taking steps to position its Smith &
Hawken subsidiary to execute its strategic plan. To that end, CML is in
discussions with its lenders to provide Smith & Hawken with continued and
expanded financing for its retail store expansion strategy. The Company's
lenders have indicated their intent to provide continued and expanded financing
to Smith & Hawken subject to final agreement on terms and conditions.
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CML is a marketer of products for consumers that enhance healthy, active
lifestyles. Its products are sold under the trade names Smith & Hawken,
NordicTrack and Nordic Advantage.
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This news release contains forward-looking statements relating to the
Company's future strategic prospects and opportunities, and such statements
involve risks and uncertainties. In addition to the risk factors referred to in
the Company's Annual Report on Form 10-K for the fiscal year ended July 31,
1997, factors which may affect the Company's future operating results include:
the market's response to the Company's new and existing products; the impact of
competition in the Company's marketplace; the ability of the Company to
successfully manage its marketing channels, including its wholesale channel; the
Company's continuing efforts to reduce costs; the Company's ability to
successfully execute the NordicTrack restructuring plan; the Company's ability
to successfully introduce new NordicTrack product lines; the availability of
capital resources; and delays in the introduction of new products.
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FINANCIAL TABLE, NEXT PAGE
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CML GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL INFORMATION
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(In 000's, except per share data and shares outstanding)
<TABLE>
<CAPTION>
THREE MONTHS ENDED FOR THE YEAR ENDED
July 31, 1998 July 31, 1997 July 31, 1998 July 31, 1997
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<S> <C> <C> <C> <C>
Net sales $ 47,529 $ 62,915 $ 274,360 $ 341,315
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Less costs and expenses:
Cost of goods sold 34,036 34,946 161,875 164,081
Selling, general and administrative expenses 32,443 46,616 185,606 235,765
Impairment charges - - - 106 2,877 603
Restructuring charges 357 - - - 8,890 - - -
Interest expense 5,700 605 11,074 1,797
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Total costs and expenses 72,536 82,273 370,322 402,246
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Loss from operations before income taxes (25,007) (19,358) (95,962) (60,931)
Income tax provision (benefit) - - - (6,582) 31,416 (20,717)
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Net loss $ (25,007) $ (12,776) $ (127,378) $ (40,214)
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Loss per share, basic and diluted $ (0.49) $ (0.26) $ (2.54) $ (0.81)
Weighted average shares outstanding 50,831,605 49,913,333 50,207,014 49,837,026
</TABLE>
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