<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 quarter period ended March 31, 1997
------------------------------
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 0-14134
THE GOOD GUYS, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-2366177
(State of jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7000 Marina Boulevard, Brisbane, California 94005
(Address of principal executive offices) (zip code)
(415) 615-5000
(Registrant's telephone number including area code)
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
------ ------
The registrant had 13,620,045 shares of common stock outstanding as of April 30,
1997.
<PAGE> 2
THE GOOD GUYS, INC.
INDEX
<TABLE>
<CAPTION>
Page
Part I. FINANCIAL INFORMATION
<S> <C>
Item 1 Financial Statements:
Consolidated Balance Sheets as of
March 31, 1997 (Unaudited) and
September 30, 1996 (Unaudited) 3
Consolidated Statements of Operations
for the Three and Six Month Periods Ended
March 31, 1997 and 1996 (Unaudited) 4
Consolidated Statement of Changes in
Shareholders' Equity for the Six Month
Period Ended March 31, 1997 (Unaudited) 5
Consolidated Statements of Cash Flows
for the Six Month Periods Ended
March 31, 1997 and 1996 (Unaudited) 6
Notes to Consolidated Financial Statements 7
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-9
Part II. OTHER INFORMATION 10
SIGNATURE PAGE 11
EXHIBIT INDEX 12
EXHIBIT 10.18 First Amendment to Amended and
Restated Credit Agreement, dated
February 28, 1997, Among The Good Guys -
California, Inc., Bank of America
National Trust and Savings Association
and The Union Bank of California N.A. 13-15
EXHIBIT 10.19 Second Amendment to Amended and
Restated Credit Agreement, dated
April 28, 1997, Among The Good Guys -
California, Inc., Bank of America
National Trust and Savings Association
and The Union Bank of California N.A. 16-18
EXHIBIT 11.1 Statement Setting Forth Computation of Earnings
per Share 19
EXHIBIT 27.1 Financial Data Schedule 20
</TABLE>
2
<PAGE> 3
THE GOOD GUYS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
March 31, September 30,
1997 1996
------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 12,651 $ 21,965
Accounts receivable, net 22,769 21,601
Income taxes receivable 1,224 8,372
Merchandise inventories 137,298 123,802
Prepaid expenses 6,778 6,613
-------- --------
Total current assets 180,720 182,353
Property and equipment 112,741 111,284
Less accumulated depreciation and amortization 54,428 49,614
-------- --------
Property and equipment, net 58,313 61,670
Other assets 1,884 1,992
-------- --------
Total assets $240,917 $246,015
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 64,696 $ 73,531
Accrued expenses and other liabilities:
Payroll 12,591 12,630
Sales taxes 5,243 5,447
Other 30,352 25,139
-------- --------
Total current liabilities 112,882 116,747
Shareholders' equity:
Preferred stock, $.001 par value;
authorized 2,000,000 shares;
none issued
Common stock, $.001 par value;
authorized 40,000,000 shares;
issued and outstanding, 13,620,045 shares and
13,554,862 shares, respectively 14 14
Additional paid-in capital 61,381 61,298
Retained earnings 66,640 67,956
-------- --------
Total shareholders' equity 128,035 129,268
-------- --------
Total liabilities and shareholders' equity $240,917 $246,015
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE> 4
THE GOOD GUYS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended March 31, Ended March 31,
------------------------ -----------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $ 205,091 $210,415 $ 491,656 $517,130
Cost of sales 153,137 162,666 368,007 399,621
--------- -------- --------- --------
Gross profit 51,954 47,749 123,649 117,509
Selling, general and
administrative expenses 57,147 47,208 125,323 105,647
--------- -------- --------- --------
Income (loss) from operations (5,193) 541 (1,674) 11,862
Interest expense, net 129 60 371 105
--------- -------- --------- --------
Income (loss) before income
taxes (5,322) 481 (2,045) 11,757
Income tax expense (benefit) (2,040) 192 (729) 4,740
--------- -------- --------- --------
Net income (loss) $ (3,282) $ 289 $ (1,316) $ 7,017
========= ======== ========= ========
Net income (loss) per common share $ (.24) $ .02 $ (.10) $ .52
========= ======== ========= ========
Weighted average shares 13,616 13,650 13,539 13,616
========= ======== ========= ========
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE> 5
THE GOOD GUYS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 1997
(In thousands except share data)
(Unaudited)
<TABLE>
<CAPTION>
Common Stock Additional
------------------------- paid-in Retained
Shares Amount capital earnings Total
------ ------ ------- -------- -----
<S> <C> <C> <C> <C> <C>
Balance at
September 30, 1996 13,554,862 $ 14 $ 61,298 $ 67,956 $ 129,268
Issuance of common stock 200,683 1 1,091 -- 1,092
Repurchase and retirement of common
stock (135,500) (1) (1,008) -- (1,009)
Net loss for the six-month period
Ended March 31, 1997 -- -- -- (1,316) (1,316)
----------- ---- -------- -------- ---------
Balance at
March 31, 1997 13,620,045 $ 14 $ 61,381 $ 66,640 $ 128,035
=========== ==== ======== ======== =========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE> 6
THE GOOD GUYS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended March 31,
--------------------------
1997 1996
---- ----
<S> <C> <C>
Cash Flows from Operating Activities:
Net income (loss) $ (1,316) $ 7,017
-------- --------
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
Depreciation and amortization 4,828 4,548
Change in assets and liabilities:
Accounts receivable (1,168) (7,489)
Income taxes receivable 7,148 --
Merchandise inventories (13,496) (23,357)
Prepaid expenses and other assets (57) 2,510
Accounts payable (8,835) 16,314
Accrued expenses and other liabilities 4,968 (3,585)
-------- --------
Total adjustments (6,612) (11,059)
-------- --------
Net cash used in operating activities (7,928) (4,042)
-------- --------
Cash Flows from Investing Activities:
Capital expenditures (1,469) (2,363)
-------- --------
Net cash used in investing activities (1,469) (2,363)
-------- --------
Cash Flows from Financing Activities:
Issuance of common stock 1,092 1,341
Repurchase and retirement of common stock (1,009) (2,313)
-------- --------
Net cash provided by (used in) financing activities 83 (972)
-------- --------
Net decrease in cash and
cash equivalents (9,314) (7,377)
Cash and cash equivalents at
beginning of period 21,965 18,434
-------- --------
Cash and cash equivalents at
end of period $ 12,651 $ 11,057
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
6
<PAGE> 7
THE GOOD GUYS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
and reflect all adjustments (consisting only of normal recurring
accruals) necessary for a fair presentation of the information
contained therein. The results of operations for the three and six
month periods ended March 31, 1997 and 1996 are not necessarily
indicative of the results to be expected for the full year. The
consolidated financial statements should be read in conjunction with
the financial statements, notes and supplementary data included and
incorporated by reference in the Company's Annual Report on Form 10-K
for the fiscal year ended September 30, 1996.
2. At March 31, 1997, there were no borrowings under the Company's
committed unsecured line of credit agreement. The Company was in
compliance with or had received waivers for each of the covenants
required by the agreement for the quarter ended March 31, 1997.
3. The weighted average number of shares outstanding during the three and
six months ended March 31, 1997 has been computed by taking the number
of days each share is outstanding and dividing by the number of days in
the quarter. Stock options are not included in the calculation of
earnings per share for the three and six months ended March 31, 1997
and 1996 as the dilutive effect of the options was less than 3%.
4. New Accounting Pronouncement: In February 1997, the Financial
Accounting Standards Board issued Statement of Financial Accounting
Standards No. 128, "Earnings per Share" (SFAS 128). The Company is
required to adopt SFAS 128 in the first quarter of fiscal 1998 at which
time it will restate earnings per share (EPS) data for prior periods to
conform with SFAS 128. Earlier application is not permitted.
SFAS 128 replaces current EPS reporting requirements and requires a
dual presentation of basic and diluted EPS. Basic EPS excludes dilution
and is computed by dividing net income available to common shareholders
by the weighted average of common shares outstanding for the period.
Diluted EPS reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or
converted into common stock.
Pro forma income (loss) for basic and diluted EPS assuming SFAS 128 had
been in effect for the quarter and year-to-date periods would not have
differed from the reported amounts.
7
<PAGE> 8
Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This Form 10-Q includes forward-looking statements, which are subject to certain
risks and uncertainties, including but not limited to increases in promotional
activities of the Company's competitors, changes in consumer buying attitudes,
the presence or absence of new products or product features in the Company's
merchandise categories, changes in vendor support for advertising and
promotional programs, changes in the Company's merchandise sales mix, general
economic conditions, and other factors referred to in the Company's 1996 Annual
Report on Form 10-K under "Information Regarding Forward Looking Statements".
RESULTS OF OPERATIONS
Net sales for the quarter ended March 31, 1997 were $205.1 million, a decrease
of 3% from $210.4 million for the quarter ended March 31, 1996. During the
second quarter of fiscal 1997, comparable store sales declined 9%. This decrease
in sales was partially offset by sales related to the increase in the total
number of stores in operation from 70 at March 31, 1996 to 76 at March 31, 1997.
On a year-to-date basis, net sales for the period ended March 31, 1997 decreased
5% to $491.7 million, compared to $517.1 million during the same period in 1996.
Comparable store sales decreased 11% for the six months ended March 31, 1997.
The Company believes the decrease correlates with the general slowdown in demand
for consumer electronics.
Gross profit as a percentage of net sales was 25.3% and 25.1% for the quarter
and six months ended March 31, 1997, respectively, as compared to 22.7% for the
quarter and six months ended March 31, 1996. The increases in gross profit
percentage reflect a gross margin improvement in all product categories.
For the quarter and six months ended March 31, 1997, selling, general and
administrative expenses were 28.0% and 25.5% of net sales, respectively,
compared to 22.5% and 20.4% for the comparable 1996 periods. These increases are
primarily due to the decline in store sales and an increase in net advertising
expense.
The effective income tax rates for the quarter and six months ended March 31,
1997 were 38.3% and 35.6% respectively, compared with 39.9% and 40.3%
respectively, for such periods in the prior fiscal year. The 1997 effective tax
rate is impacted by California net operating loss carryforward limitations. The
1996 effective tax rate was positively impacted by the utilization of job tax
credits during the first half of the year.
8
<PAGE> 9
The net loss for the quarter ended March 31, 1997 was $3.3 million ($.24 per
share) or 1.6% of net sales. These results compare to net income of $289,000
($.02 per share) or 0.1% of net sales for the same period last year. For the six
months ended March 31, 1997 the net loss was $1.3 million ($.10 per share) or
0.3% of net sales, compared to net income of $7.0 million ($0.52 per share) or
1.4% of net sales for the same period last year.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1997, the Company had working capital of $67.8 million. Net cash
used in operating activities was $7.9 million for the six months ended March 31,
1997, compared to $4.0 million for the six months ended March 31, 1996. The
increase in net cash used in operating activities was primarily due to the net
loss, an increase in inventory and a decrease in accounts payable, partially
offset by the receipt of income tax refunds.
Net cash used in investing activities, which primarily consists of expenditures
for stores, distribution facilities and administrative property and equipment,
was $1.5 million for the six months ended March 31, 1997 as compared to $2.4
million during the same period last year. This decrease was attributable to the
decrease in the number of stores opened; in the first half of fiscal 1997 one
store opened and one store remodeled, compared with five stores opened during
the first half of fiscal 1996.
The Company maintains a revolving line of credit of up to $50 million. The
credit agreement contains restrictive loan covenants which if violated could be
used as a basis for termination of the agreement. For the quarter ended March
31, 1997, the Company was in compliance with or had received waivers for each of
these covenants. During the quarter ended March 31, 1997 there were two
amendments to the credit agreement which are being filed as exhibits with this
Form 10-Q. There were no borrowings outstanding under the credit agreement at
March 31, 1997.
The Company expects to be able to fund its working capital requirements and
expansion plans with a combination of cash flows from operations, normal trade
credit, financing arrangements and continued use of lease financing.
The Company believes that because of competition among manufacturers and the
technological changes in the consumer electronics industry, inflation has not
had an effect on net sales and cost of sales.
9
<PAGE> 10
PART II. OTHER INFORMATION
ITEM 1-3 Not applicable
ITEM 4 Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Shareholders of The Good Guys, Inc.
held on February 11, 1997, 12,131,801 shares were present in
person or by proxy out of 13,419,362 outstanding shares on
December 16, 1996, the record date. The shareholders voted on
the following matters:
1. The nominees for election as Directors of the
Corporation were elected without opposition.
A vote of the common stock with respect to this
election was:
Number of Shares
<TABLE>
<CAPTION>
Nominees For Withheld
- -------- --- --------
<S> <C> <C>
Stanley R. Baker 11,024,573 1,107,228
Robert A. Gunst 10,875,048 1,256,753
Russell M. Solomon 11,029,992 1,101,809
W. Howard Lester 11,027,302 1,104,499
John E. Martin 11,027,300 1,104,501
</TABLE>
2. A vote of the common stock to approve an increase in
the number of shares covered by the Employee Stock
Purchase Plan by 600,000 was:
<TABLE>
<CAPTION>
Number of shares
<S> <C>
For the proposal: 10,087,107
Against the proposal: 1,519,310
Withheld: 264,537
Non-Votes: 260,847
</TABLE>
3. Ratification of the appointment of Deloitte & Touche,
LLP as independent Certified Public Accountants.
<TABLE>
<CAPTION>
Number of shares
<S> <C>
For the proposal: 12,082,991
Against the proposal: 20,353
Withheld: 28,457
</TABLE>
ITEM 5 Not applicable
10
<PAGE> 11
ITEM 6 Exhibits and Reports on Form 8-K
<TABLE>
<CAPTION>
(a) Exhibit Description
<S> <C>
10.18 First Amendment to Amended
and Restated Credit
Agreement, dated February
28, 1997, Among The Good
Guys - California, Inc.,
Bank of America National
Trust and Savings
Association and The Union
Bank of California N.A.
10.19 Second Amendment to Amended
and Restated Credit
Agreement, dated April 28,
1997, Among The Good Guys -
California, Inc., Bank of
America National Trust and
Savings Association and The
Union Bank of California N.A.
11.1 Statement Setting Forth Computation of
Earnings Per Share
27.1 Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter
for which this report is filed.
</TABLE>
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.
THE GOOD GUYS, INC.
Registrant
May 14, 1997 /s/ DENNIS C. CARROLL
- ------------------------------------ --------------------------
Date Dennis C. Carroll
Chief Financial Officer
11
<PAGE> 12
<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
NUMBER DESCRIPTION PAGE
<S> <C> <C>
10.18 First Amendment to Amended and
Restated Credit Agreement, dated
February 28, 1997, Among The
Good Guys - California, Inc.,
Bank of America National Trust and Savings
Association and The Union Bank of California N.A. 13-15
10.19 Second Amendment to Amended and
Restated Credit Agreement, dated
April 28, 1997, Among The Good Guys
- California, Inc., Bank of America
National Trust and Savings Association
and The Union Bank of California N.A. 16-18
11.1 Statement Setting Forth Computation
of Earnings Per Share 19
27.1 Financial Data Schedule 20
</TABLE>
12
<PAGE> 1
EXHIBIT 10.18
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
This Amendment is entered into as of February 28, 1997, among
Bank of America National Trust and Savings Association ("BofA"), The Union Bank
of California, N.A., as successor by merger to the Bank of California N.A.
("UBOC") and The Good Guys - California, Inc., a California corporation
("Borrower"). BofA and UBOC are sometimes referred to as "Banks" and each is a
"Bank."
RECITALS
A. The Banks and the Borrower entered into a certain Amended
and Restated Credit Agreement dated as of December 27, 1996 (the "Credit
Agreement").
B. The Banks and the Borrower desire to amend the Agreement.
AGREEMENT
1. Definitions. Capitalized terms used but not defined in this
Agreement shall have the meaning given to them in the Credit Agreement.
2. Amendments. The Credit Agreement is hereby amended as
follows:
2.1 Paragraph 6.4 is hereby amended to read as
follows:
6.4 Adjusted Tangible Net Worth. Maintain on
a consolidated basis Adjusted Tangible Net Worth of at least
One Hundred Thirty Million Dollars ($130,000,000) as of the
end of each calendar quarter. "Adjusted Tangible Net Worth"
means Tangible Net Worth minus the proceeds of any public or
private offering of stock of the Guarantor on or after
September 30, 1996, including stock sold under the Employee
Stock Purchase Plan.
3. Representations and Warranties. When the Borrower signs
this Amendment, the Borrower represents and warrants to the Banks that:
(a) There is no event which is, or with notice or
lapse of time or both would be, an Event of Default under the
Agreement;
(b) The representations and warranties in the
Agreement are true and correct as of the date of this Amendment as
if made on the date of this Amendment;
13
<PAGE> 2
(c) This Amendment is within the Borrower's powers,
has been duly authorized, and does not conflict with any of the
Borrower's organizational papers; and
(d) This Amendment does not conflict with any law,
agreement, or obligation by which the Borrower is bound.
4. Effect of Amendment. Except as provided in this
Amendment, all of the terms and conditions of the Agreement shall remain
in full force and effect.
5. Counterparts. This Amendment may be executed in
counterparts, each of which when so executed shall be deemed an original,
but all such counterparts together shall constitute but one and the same
instrument.
This Amendment is executed as of the date first stated above.
BANK OF AMERICA NATIONAL THE GOOD GUYS - CALIFORNIA,
TRUST AND SAVINGS ASSOCIATION INC.
By Hagop Bouldoukian By /s/ Dennis C. Carroll
------------------------------ -----------------------------
Title Vice President Title CFO
------------------------------ -----------------------------
By By
------------------------------ -----------------------------
Title Title
------------------------------ -----------------------------
THE UNION BANK OF CALIFORNIA
N.A.
By Wanda Headrick
------------------------------
Title Vice President
------------------------------
By
------------------------------
Title
------------------------------
14
<PAGE> 3
Guarantor's Acknowledgment and Agreement
The Guarantor acknowledges the covenants applicable to it as set forth in the
foregoing Amendment and agrees to comply with them until full and final payment
of all of the Borrower's obligations under the Credit Agreement and any
instrument or agreement required under the Credit Agreement.
Date: February 28, 1997
THE GOOD GUYS, INC.
By /s/ Dennis C. Carroll
------------------------------
Title CFO
------------------------------
By
------------------------------
Title
------------------------------
15
<PAGE> 1
EXHIBIT 10.19
SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
This Amendment is entered into as of April 28, 1997, among
Bank of America National Trust and Savings Association ("BofA"), The Union Bank
of California, N.A., as successor by merger to the Bank of California N.A.
("UBOC") and The Good Guys - California, Inc., a California corporation
("Borrower"). BofA and UBOC are sometimes referred to as "Banks" and each is a
"Bank."
RECITALS
A. The Banks and the Borrower entered into a certain Amended and
Restated Credit Agreement dated as of December 27, 1996 (as previously amended,
the "Credit Agreement").
B. The Banks and the Borrower desire to amend the Agreement.
AGREEMENT
1. Definitions. Capitalized terms used but not defined in this
Agreement shall have the meaning given to them in the Credit Agreement.
2. Amendments. The Credit Agreement is hereby amended as follows:
2.1 The definition of "Spread" in paragraph 1.1 of the
Agreement is hereby amended to read as follows:
"Spread" means one and three-quarters (1.75)
percentage points.
2.2 The first sentence of paragraph 2.4(b) of the Agreement is
hereby amended to read as follows:
Except as provided below, advances made by BofA under
this Agreement shall bear interest at a rate per annum equal
to BofA's Reference Rate plus one-quarter of one (0.25)
percentage point, and advances made by UBOC under this
Agreement shall bear interest at a rate per annum equal to
UBOC's Prime Rate plus one-quarter of one (0.25) percentage
point.
2.3 Paragraph 2.9 is hereby amended to read as follows:
2.9 Default Rate. Upon the occurrence and during the
continuation of any Event of Default under Paragraph 6.4, 6.5,
6.7, or 7.1 below and without
16
<PAGE> 2
constituting a waiver of any such Event of Default, advances
under this Agreement from either Bank shall at the option of
such Bank bear interest at a rate per annum which is two
percentage points (2.00%) higher than the rate of interest
otherwise provided under this Agreement. Upon the expiration
of any Interest Period, the relevant Portion shall thereafter
bear interest at BofA's Reference Rate plus two and
one-quarter percentage points (2.25%) or UBOC's Prime Rate
plus two and one-quarter percentage points (2.25%).
3. Representations and Warranties. When the Borrower signs
this Amendment, the Borrower represents and warrants to the Banks that:
(a) Other than the violation of Paragraph 6.4 as of March
31, 1997, which has been waived by the Banks by waivers dated April
21 and April 22, 1997, there is no event which is, or with notice or
lapse of time or both would be, an Event of Default under the
Agreement;
(b) The representations and warranties in the Agreement are
true and correct as of the date of this Amendment as if made on the
date of this Amendment;
(c) This Amendment is within the Borrower's powers, has
been duly authorized, and does not conflict with any of the Borrower's
organizational papers; and
(d) This Amendment does not conflict with any law,
agreement, or obligation by which the Borrower is bound.
4. Effect of Amendment. Except as provided in this Amendment,
all of the terms and conditions of the Agreement shall remain in full force
and effect.
5. Counterparts. This Amendment may be executed in
counterparts, each of which when so executed shall be deemed an original, but
all such counterparts together shall constitute but
17
<PAGE> 3
one and the same instrument.
This Amendment is executed as of the date first stated above.
BANK OF AMERICA NATIONAL TRUST AND THE GOOD GUYS - CALIFORNIA, INC.
SAVINGS ASSOCIATION
By /s/ Dennis C. Carroll
By /s/ Hagop Bouldoukian -------------------------------
---------------------------- Title CHIEF FINANCIAL OFFICER
Title VICE PRESIDENT -----------------------------------
---------------------------- By
By ---------------------------------
---------------------------- Title
Title ------------------------------
----------------------------
THE UNION BANK OF CALIFORNIA N.A.
By /s/ Wanda Headrick
----------------------------
Title VICE PRESIDENT
----------------------------
By
----------------------------
Title
----------------------------
18
<PAGE> 1
Exhibit 11.1
THE GOOD GUYS, INC. AND SUBSIDIARY
STATEMENT SETTING FORTH COMPUTATION
OF EARNINGS PER SHARE
(In thousands except per share data)
<TABLE>
<CAPTION>
March 31, March 31,
1997 1996
-------------- ------------
<S> <C> <C>
Net income (loss) $ (3,282) $ 289
1 As presented in the 10-Q:
Shares used in per share computation 13,616 13,650
Net income (loss) per common share
and common share equivalents $ (.24) $ 0.02
======== =======
2 Computation of primary and fully diluted earnings per share including
common stock equivalents
a) Primary earnings per common share
Weighted average number of
shares:
Common stock (A) 13,616 13,650
Stock options (B) 2 61
-------- -------
Total 13,618 13,711
Primary earnings per share $ (.24) $ 0.02
======== =======
b) Fully diluted earnings per share
Weighted average number of
shares:
Common stock (A) 13,616 13,650
Stock options (B) 2 75
-------- -------
Total 13,618 13,725
Fully diluted earnings per share $ (.24) $ 0.02
======== =======
</TABLE>
(A) The weighted average number of common shares outstanding during the
quarter has been computed by taking the number of days each share is
outstanding and dividing by the number of days in the quarter.
(B) Stock options used in the primary earnings per share are calculated
using the average market price. Stock options in fully diluted earnings
per share are calculated using the higher of the ending market price or
the average market price.
19
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<CASH> 12,651
<SECURITIES> 0
<RECEIVABLES> 24,934
<ALLOWANCES> 941
<INVENTORY> 137,298
<CURRENT-ASSETS> 180,720
<PP&E> 112,741
<DEPRECIATION> 54,428
<TOTAL-ASSETS> 240,917
<CURRENT-LIABILITIES> 112,882
<BONDS> 0
0
0
<COMMON> 14
<OTHER-SE> 128,021
<TOTAL-LIABILITY-AND-EQUITY> 240,917
<SALES> 205,091
<TOTAL-REVENUES> 205,091
<CGS> 153,137
<TOTAL-COSTS> 153,137
<OTHER-EXPENSES> 57,147
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 129
<INCOME-PRETAX> (5,322)
<INCOME-TAX> (2,040)
<INCOME-CONTINUING> (3,282)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,282)
<EPS-PRIMARY> (.24)
<EPS-DILUTED> (.24)
</TABLE>
