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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 earlest event reported): April 7, 1997
POLK AUDIO, INC.
(Exact Name of Registrant as Specified in Charter)
<TABLE>
<S> <C> <C>
MARYLAND 000-14729 52-0954180
(State or Other Jurisdiction of Incorporation) (Commission File Number) (IRS Employer Identification No.)
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5601 METRO DRIVE, BALTIMORE, MARYLAND 21215
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (410) 358-3600
(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events
On April 7, 1997, Polk Audio, Inc. (the "Company") announced an
operational restructuring whereby finished product warehousing and all
remaining manufacturing and service operations will be consolidated with the
Company's operations in San Diego, CA.
On April 9, 1997, the Company announced the reactivation of its share
buyback program, authorized by the Board in November, 1993. Of the 400,000
shares originally authorized to be repurchased, the Company purchased 4,777
shares in 1994 and none in 1995 and 1996.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) and (b) Financial Statements and Pro Forma Information. Not applicable.
(c) Exhibits. The following exhibits are filed with this report, and the
foregoing description is modified by reference to such exhibits:
99(1) Polk Audio, Inc. Press Release dated April 7, 1997.
99(2) Polk Audio, Inc. Press Release dated April 9, 1997.
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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
undersigned hereunto duly authorized.
Polk Audio, Inc.
By: /s/ George M. Klopfer
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George M. Klopfer
Chief Executive Officer
Date: April 22, 1997
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EXHIBIT 99.1
[POLKAUDIO LETTERHEAD]
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PRESS RELEASE
Contact: George Klopfer, CEO
Gary Davis, CFO
(410) 358 3600
Date: April 7, 1997
For Immediate Release
- --------------------------------------------------------------------------------
Baltimore, MD: Polk Audio, Inc. (Amex symbol: PKA) announced today that its
sales for the fourth fiscal quarter ended March 30, 1997 were $13.2 million,
down 27% compared to the same quarter in the prior year.
The Company also announced an operational restructuring, to be completed within
the next 90 days, whereby finished product warehousing and all remaining
manufacturing and service operations will be consolidated into the Company's
operations in San Diego, CA. This will involve the elimination of
approximately 16 positions net and a nonrecurring charge to earnings for
severance and other related costs will be applied in the March 1997 quarter.
With this expected restructuring charge taken into account, the Company
anticipates a modest loss for the March 1997 quarter, compared to a profit of
$742,000 or 44 cents per share, in the March 1996 quarter.
George Klopfer, CEO, commented as follows: "We were anticipating that sales for
March of this year would not equal those of last March, when we made very
substantial initial deliveries of the Eosone product line to Best Buy Co. That
said, we nevertheless were disappointed with the overall sales results for the
March 1997 quarter. The general situation of many of our retail dealers in the
USA is a difficult one, with many of them experiencing declines in sales and
margins. This has of course affected our sales and margins, too. Some related
factors affecting our sales and margins include an increasingly conservative
posture on our part in extending trade credit, additions to reserves for bad
debts and price discounting in certain product lines in order to maintain sales
momentum."
Mr Klopfer also added:
"In the medium term our industry is going to introduce some very powerful new
technologies into the marketplace, including High Definition Television (HDTV)
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Polk Audio - April 7, 1997
page 2
and the Digital Video Disk (DVD). For its part, Polk Audio is also planning an
elevated rate of new product introductions to take advantage of the excitement
that will result from the introduction of these new technologies to the
consumer. We believe that, once introduced, these new technologies and products
will reverse some of the negative operating trends affecting consumer
electronics retailers in the past year. Accordingly, we are optimistic about
the medium term outlook for our company and our industry, despite our concerns
about the near term picture. Beyond that, we are in solid financial condition
and if in fact there is more trouble ahead for our industry in the near term, I
am confident that we will weather it without serious difficulty."
Safe Harbor Statement under the Securities Litigation Reform Act of 1995: This
Press Release contains a variety of forward looking statements representing the
current beliefs of the Company's management, which are subject to substantial
uncertainty, and no assurance can be, or is hereby given that any of them will
actually occur or develop as presented herein. In addition to the specific
uncertainty factors cited in connection with certain of the forward looking
statements contained herein, all forward looking statements in this Press
Release are subject to a variety of factors which are difficult or impossible
to predict with total reliability, including but not limited to planned or
unplanned changes in the quantity and/or quality of the distribution outlets
available for the Company's products, the actions of suppliers of other types
of audio and video components which are used by consumers in combination with
the Company's products, changes in the cost or availability of raw materials,
interruptions in transport or manufacturing operations, casualty and general
business conditions in the economy.
Polk Audio is a manufacturer of high-quality loudspeaker systems based in
Baltimore, Maryland.
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EXHIBIT 99.2
[POLKAUDIO LETTERHEAD]
- --------------------------------------------------------------------------------
PRESS RELEASE
Contact: George Klopfer, CEO
Gary Davis, CFO
(410) 358 3600
Date: April 9, 1997
For Immediate Release
- --------------------------------------------------------------------------------
Baltimore, MD: Polk Audio, Inc. (Amex: PKA) announced today that it expects
within the next sixty days to enter into a definitive licensing agreement with
a US based computer manufacturer to use the registered trademark "Polk Audio"
and certain patented technologies of the Company, on loudspeakers to be sold
with multimedia computer systems starting early Summer of 1997. The Company
cautioned that negotiations with the licensee have not been finalized, no
written agreements have yet been consummated, and no assurance can be given
that such a transaction will actually materialize. The amount and timing of
royalties, if any, will be subject to a variety of factors well outside the
Company's control and any forecast of royalties would therefore be subject to a
wide degree of uncertainty. These factors include how successful the multimedia
computer systems are in the marketplace, overall conditions in the market for
personal computers, and the level of satisfaction of the licensee with its
arrangements with third parties for actual manufacture of the speakers. The
Company does not expect to be directly involved in the actual manufacturing of
these speakers.
The Company also announced the reactivation of its share buyback program, which
was authorized by its Board in November 1993. That buyback program authorized
the repurchase, in the aggregate, of up to 400,000 shares of the Company's
common stock. The Company purchased 4,777 shares in 1994 but did not purchase
any shares during 1995 and 1996.
The Company's Board believes that at current prices the Company's shares are
valued quite modestly relative to the underlying assets and income, and
moreover that reductions in the number of shares outstanding could enhance
per-share results going forward. Furthermore, the Board believes that the
Company's balance sheet is strong and that the retirement of up to 10% of the
shares outstanding could be accomplished without materially compromising the
Company's operational flexibility and financial stability. Finally, the Board
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Polk Audio Press Release
April 9, 1997
page 2 of 2
believes that although in the near term business conditions in the Company's
markets may continue to be difficult, in the medium term the Company's
prospects for continuing growth are good.
Safe Harbor Statement under the Securities Litigation Reform Act of 1995: This
Press Release contains forward looking statements representing the current
beliefs of the Company's management, which are subject to substantial
uncertainty, and no assurance can be, or is hereby given that any of them will
actually occur or develop as presented herein. In addition to the specific
uncertainty factors cited in connection with the forward looking statements
contained herein, all forward looking statements in this Press Release are
subject to a variety of factors which are difficult or impossible to predict
with total reliability, including but not limited to planned or unplanned
changes in the quantity and/or quality of the distribution outlets available
for the Company's products, the actions of suppliers of other types of audio
and video components which are used by consumers in combination with the
Company's products, changes in the cost or availability of raw materials,
interruptions in transport or manufacturing operations, casualty and general
business conditions in the economy.
Polk Audio is a manufacturer of high-quality loudspeaker systems based in
Baltimore, Maryland.
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