<PAGE>
- --------------------------------------------------------------------------
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 September 26, 1998
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 No. 33-9875
-----------------
BOSTON ACOUSTICS, INC.
(Exact name of registrant as specified in its charter)
Massachusetts 04-2662473
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
300 Jubilee Drive
Peabody, Massachusetts 01960
(Address of Principal Executive Offices) (Zip Code)
(978) 538-5000
(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 [ ]
There were 4,989,378 shares of Common Stock issued and outstanding as of
November 6, 1998.
- --------------------------------------------------------------------------
<PAGE>
Boston Acoustics, Inc.
Index
-----
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I: Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets (Unaudited)-
March 28, 1998 and September 26, 1998 4
Consolidated Statements of Income (Unaudited)Three months and
Six months ended September 27, 1997
and September 26, 1998 6
Consolidated Statements of Cash Flows (Unaudited)-
Six months ended September 27, 1997 and
September 26, 1998 7
Notes to Unaudited Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 10
Part II: Other Information
Items 1 through 6 14
Signatures 15
</TABLE>
2
<PAGE>
PART I: FINANCIAL INFORMATION
Item 1: Financial Statements
3
<PAGE>
Boston Acoustics, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
Assets
<TABLE>
<CAPTION>
March 28, 1998 September 26, 1998
-------------- ------------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents ................................................. $ 3,870,569 $ 669,216
Accounts receivable, net of reserves of
approximately $402,000
and $406,000, respectively .............................................. 11,439,178 13,141,668
Inventories ............................................................... 12,617,077 19,115,504
Deferred income taxes ..................................................... 1,092,000 1,092,000
Prepaid expenses and other current assets ................................. 395,087 546,907
----------- -----------
Total current assets ................................................... 29,413,911 34,565,295
----------- -----------
Property and Equipment, at cost:
Land ...................................................................... 1,433,365 1,433,365
Building and improvements ................................................. 7,061,479 7,090,321
Machinery and equipment ................................................... 8,667,671 9,754,875
Office equipment and furniture ............................................ 1,847,326 2,754,974
Motor vehicles ............................................................ 288,948 289,084
----------- -----------
19,298,789 21,322,619
Less-accumulated depreciation
and amortization ....................................................... 8,005,621 9,114,750
----------- -----------
11,293,168 12,207,869
----------- -----------
Other Assets:
Other assets, net ......................................................... 1,792,125 1,533,524
----------- -----------
$42,499,204 $48,306,688
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
Boston Acoustics, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
Liabilities and Shareholders' Equity
<TABLE>
<CAPTION>
March 28, 1998 September 26, 1998
<S> <C> <C>
Current Liabilities:
Accounts payable ............................................................... $ 3,224,208 $ 9,051,800
Accrued payroll and payroll-
related expenses .......................................................... 1,392,171 1,625,265
Dividends payable .............................................................. 414,287 424,097
Other accrued expenses ......................................................... 922,216 1,331,516
Accrued income taxes ........................................................... 142,075 --
Current maturity of line of credit ............................................. 3,000,000 3,000,000
--------- ---------
Total current liabilities .................................................. 9,094,957 15,432,678
--------- ----------
Line of credit, net of current portion .......................................... 9,500,000 5,000,000
Commitments
Shareholders' Equity:
Common stock, $.01 par value
Authorized -- 8,000,000 shares
Issued -- 6,936,327 and 6,954,259
shares at March 28, 1998 and
September 26, 1998, respectively ....................................... 69,363 69,543
Additional paid-in capital ...................................................... 5,831,724 6,058,253
Retained earnings ............................................................... 46,245,277 49,988,331
---------- ----------
52,146,364 56,116,127
Less-Treasury stock, 1,964,881 and 1,964,881
shares at March 28, 1998 and
September 26, 1998, respectively, at cost ................................. 28,242,117 28,242,117
---------- ----------
Total shareholders' equity ............................................ 23,904,247 27,874,010
---------- ----------
$42,499,204 $48,306,688
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
Boston Acoustics, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
September 27, September 26, September 27, September 26,
1997 1998 1997 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales ................................................ $ 18,135,969 $ 26,350,362 $ 30,551,245 $ 47,850,326
Cost of goods sold ....................................... 10,909,372 17,462,999 17,883,510 31,452,937
------------ ------------ ------------ ------------
Gross profit ............................................. 7,226,597 8,887,363 12,667,735 16,397,389
------------ ------------ ------------ ------------
Selling and
marketing expenses ................................. 1,944,403 2,356,617 3,748,072 4,396,908
General and
administrative expenses ............................ 1,162,937 1,098,351 2,080,942 2,100,884
Engineering and development expenses ..................... 587,049 1,205,100 1,563,349 2,302,603
------------ ------------ ------------ ------------
Total expenses .................................. 3,694,389 4,660,068 7,392,363 8,800,395
------------ ------------ ------------ ------------
Income from operations .......................... 3,532,208 4,227,295 5,275,372 7,596,994
Interest income .......................................... 45,699 21,643 142,613 53,402
Interest expense ......................................... (374,560) (125,957) (441,404) (322,463)
------------ ------------ ------------ ------------
Income before provision for income taxes ........ 3,203,347 4,122,981 4,976,581 7,327,933
Provision for income taxes ............................... 1,227,000 1,560,000 1,866,000 2,746,000
------------ ------------ ------------ ------------
Net income ......................................... $ 1,976,347 $ 2,562,981 $ 3,110,581 $ 4,581,933
============ ============ ============ ============
Basic earnings per share ................................. $ .40 $ .51 $ .57 $ .92
============ ============ ============ ============
Diluted earnings per share ............................... $ .39 $ .48 $ .55 $ .86
============ ============ ============ ============
Weighted average common shares outstanding
Basic ........................................... 4,952,780 4,983,187 5,498,720 4,978,831
Diluted ......................................... 5,077,278 5,300,982 5,630,171 5,319,593
Dividends per share ...................................... $ .083 $ .085 $ .167 $ .168
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
6
<PAGE>
Boston Acoustics, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
----------------
September 27, 1997 September 26, 1998
------------------ ------------------
<S> <C> <C>
Cash flows from operating activities:
Net income ........................................... $ 3,110,581 $ 4,581,933
Adjustments to reconcile net income to net cash
provided by (used in) operating activities-
Depreciation and amortization ........................ 809,523 1,405,703
Compensation expense related to restricted
stock and warrants ................................ 181,012 --
Changes in assets and liabilities --
Accounts receivable .................................. (3,587,889) (1,702,490)
Inventories .......................................... (3,811,650) (6,498,427)
Prepaid expenses and other current assets ............ 447,156 (151,820)
Accounts payable ..................................... 1,816,182 5,827,592
Accrued payroll and other accrued expenses ........... 621,615 642,394
Accrued income taxes ................................. 325,028 (142,075)
------------ -----------
Net cash provided by (used in) operating activities (88,442) 3,962,810
------------ -----------
Cash flows from investing activities:
Purchase of property and equipment, net .............. (503,435) (2,023,830)
Proceeds from sale of held-to-maturity investments ... 2,941,065 --
Increase in other assets ............................. (29,301) (37,973)
------------ -----------
Net cash provided by (used in) investing activities 2,408,329 (2,061,803)
------------ -----------
Cash flows from financing activities:
Dividends paid ....................................... (934,700) (829,069)
Stock dividend fractional share payment .............. -- (480)
Purchase of treasury stock ........................... (23,912,452) --
Net proceeds (payments) from line of credit .......... 18,300,000 (4,500,000)
Proceeds from exercise of stock options .............. 270,177 227,189
------------ -----------
Net cash used in financing activities ............. (6,276,975) (5,102,360)
------------ -----------
Decrease in cash and cash equivalents ...................... (3,957,088) (3,201,353)
Cash and cash equivalents, beginning of period ............. 4,937,232 3,870,569
------------ -----------
Cash and cash equivalents, end of period ................... $ 980,144 $ 669,216
============ ===========
Supplemental Disclosure of NonCash Financing Activities:
Dividends payable .................................... $ 413,462 $ 424,097
============ ===========
Supplemental Disclosure of Cash Flow Information:
Cash paid for income taxes ........................... $ 1,540,582 $ 3,164,142
============ ===========
Cash paid for interest ............................... $ 441,404 $ 363,049
============ ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
7
<PAGE>
Boston Acoustics, Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(1) Basis of Presentation
The unaudited consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission and include, in the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of interim period results. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations. The Company believes, however,
that its disclosures are adequate to make the information presented not
misleading. The results for the three and six-month periods ended September 26,
1998 are not necessarily indicative of results to be expected for the full
fiscal year. These financial statements should be read in conjunction with the
Company's Annual Report included in its Form 10-K for fiscal year ended
March 28, 1998.
(2) Inventories
Inventories are stated at the lower of cost (first-in, first-out) or market
and consist of the following:
<TABLE>
<CAPTION>
March 28, 1998 September 26,1998
-------------- -----------------
<S> <C> <C>
Raw materials and work-in process ............................................ $ 7,473,368 $11,258,126
Finished goods ............................................................... 5,143,709 7,857,378
----------- -----------
$12,617,077 $19,115,504
=========== ===========
</TABLE>
Work-in-process and finished goods inventories consist of materials, labor
and manufacturing overhead.
(3) Stock Split
On July 13, 1998, the Company's Board of Directors authorized an increase
in the authorized shares of common stock to 8.0 million shares and a
three-for-two stock split effected in the form of a stock dividend. All share
and per share amounts in the accompanying financial statements and footnotes
have been retroactively restated to reflect the stock split. Accordingly,
approximately $23,000 was transferred from additional paid-in capital to common
stock.
(4) Net Income Per Common Share
In February 1997, the Financial Accounting Standards Board issued SFAS No.
128, Earnings per Share. SFAS No. 128 establishes standards for computing and
presenting earnings per share (EPS) and applies to entities with publicly held
common stock or potential common stock. The Company has restated earnings per
share for the comparative period for fiscal 1998 as required by SFAS No. 128.
Basic EPS is computed by dividing net income by the weighted average number of
common shares outstanding for the period. Diluted EPS reflects the potential
dilution from common stock equivalents (stock options and warrants). For the
periods ended September 27, 1997 and September 26, 1998, there were no
antidilutive shares for purposes of earnings per share.
8
<PAGE>
Basic and diluted income per share, as required by SFAS No. 128, is as
follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------ --------------------------------
September 27, September 26, September 27, September 26,
1997 1998 1997 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net Income .................. $ 1,976,347 $ 2,562,981 $ 3,110,581 $ 4,581,933
============= ============= ============= =============
Basic weighted
average common
shares outstanding ........ 4,952,780 4,983,187 5,498,720 4,978,831
Dilutive effect of
assumed exercise of
stock options and warrant . 124,498 317,795 131,451 340,762
------------- ------------- ------------- -------------
Weighted average
common shares
outstanding assuming
dilution .................. 5,077,278 5,300,982 5,630,171 5,319,593
============= ============= ============= =============
Basic net income per share .. $ .40 $ .51 $ .57 $ .92
============= ============= ============= =============
Diluted net income per share $ .39 $ .48 $ .55 $ .86
============= ============= ============= =============
</TABLE>
(5) Stock Options
The following is a summary of stock option activity:
<TABLE>
<CAPTION>
Weighted
Number of Price Average
Options Range Price
------- ----- -----
<S> <C> <C> <C>
Outstanding at March 28, 1998 501,854 $11.33 - $19.89 $ 14.86
Options granted -- -- --
Options exercised (17,951) $11.33 - $13.00 $ 12.66
Options canceled -- -- --
- ------------------------------------------------------------------------------------------------
Outstanding at September 26, 1998 483,903 $11.67 - $19.89 $ 14.94
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
Exercisable at September 26, 1998 141,224 $11.67 - $14.67 $ 13.79
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
The following table sets forth the results of operations for the three-month and
six-month periods ended September 27, 1997 and September 26, 1998 expressed as
percentages of net sales.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
September 27, September 26, September 27, September 26,
1997 1998 1997 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net sales .................... 100.0% 100.0% 100.0% 100.0%
Cost of goods sold ........... 60.2 66.3 58.5 65.7
----- ----- ----- -----
Gross profit ............... 39.8 33.7 41.5 34.3
----- ----- ----- -----
Selling and marketing
expenses ............ 10.7 8.9 12.3 9.2
General & administrative
expenses ............ 6.4 4.2 6.8 4.4
Engineering & development
expenses ............ 3.2 4.6 5.1 4.8
----- ----- ----- -----
20.3 17.7 24.2 18.4
----- ----- ----- -----
Income from operations ..... 19.5 16.0 17.3 15.9
Interest income (expense), net (1.8) (0.4) (1.0) (0.6)
Income before provision for
income taxes .............. 17.7 15.6 16.3 15.3
Provision for income taxes ... 6.8 5.9 6.1 5.7
----- ----- ----- -----
Net income ................ 10.9% 9.7% 10.2% 9.6%
----- ----- ----- -----
----- ----- ----- -----
</TABLE>
Net sales increased 45%, from approximately $18,136,000 during the second
quarter of fiscal 1998 to approximately $26,350,000 during the second quarter of
fiscal 1999. For the six months ended September 26, 1998 net sales increased
approximately 57% from approximately $30,551,000 to approximately $47,850,000.
The overall sales increase was primarily due to the OEM sales of multimedia
speaker systems to Gateway, Inc. ("Gateway"), a leading global direct marketer
of PC products. These products included the BA635 three-piece system, the
MediaTheater(TM) three-piece system, and the DigitalTheater(TM) 6000. During the
three-month period ended September 26, 1998, sales of the Company's
10
<PAGE>
ProSeries automotive component speaker systems and the subwoofer/satellite home
theater speaker systems stimulated growth in the core business.
The Company's gross margin for the three-month and six-month periods ended
September 26, 1998 increased in absolute dollars but decreased as a percentage
of net sales due primarily to a shift in the sales mix to loudspeaker models
with slightly lower margins, particularly the Company's OEM multimedia speaker
systems.
Total operating expenses increased in absolute dollars but decreased as a
percentage of net sales during both the three-month and six-month periods ended
September 26, 1998. Selling and marketing expenses have increased in absolute
dollars primarily due to increased salaries and benefits relating to additional
personnel and increased marketing expenses associated with the
direct-to-consumer program for the Company's Personal Desktop Audio(TM) products
launched during the quarter of fiscal 1999. General and administrative expenses
have remained relatively stable in absolute dollars, and as a result have
decreased as a percentage of net sales for the three-month and six-month periods
ended September 26, 1998 compared to the corresponding periods a year ago.
Engineering and development expenses for the three-month and six-month periods
ended September 26, 1998 have increased in absolute dollars due primarily to
increased salaries and benefits relating to additional personnel and increased
expenses associated with new product development. As a result of these increases
during the second fiscal quarter, engineering and development expenses have
increased as a percentage of sales for the three-month period ended September
26, 1998, as compared to the same period a year ago.
Net interest expense has decreased during the three-month and six-month periods
ended September 26, 1998 compared to the corresponding periods a year ago,
primarily due to lower interest expense as a result of the Company's repayments
on the Company's line of credit borrowing during the fiscal year.
The Company's effective income tax rate decreased slightly for the three-month
period ended September 26, 1998 from 38.3% to 37.8% as compared to the same
period a year ago, primarily due to lower state income taxes. For the six-month
period of fiscal 1999 the effective tax rate remained stable at 37.5% as
compared to the same period a year ago.
Net income for the second quarter increased 30%, from approximately $1,976,000
in fiscal 1998 to $2,563,000 in fiscal 1999 while diluted earnings per share
increased from $.39 to $.48 per share. Net income for the six-month period ended
September 26, 1998 increased 47%, from approximately $3,111,000 in fiscal 1998
to approximately $4,582,000 in fiscal 1999, while diluted earnings per share for
the six-month period increased from $.55 to $.86 per share. The increase in net
income for the three and six-month periods ended September 26, 1998 is primarily
the result of the increased sales growth, which was offset slightly by the
operating loss of the Snell subsidiary included in the consolidated results of
operations.
Liquidity and Capital Resources
During the first six months of fiscal 1999, the Company financed its growth with
cash generated by operations. As of September 26, 1998 the Company's working
capital was approximately $19,133,000, a decrease of approximately $1,186,000
from March 28, 1998. The decrease in working capital was primarily due to the
repayments made on the Company's line of credit borrowing. The Company's cash
and cash equivalents were approximately $669,000 at September 26, 1998. The
Company's cash and cash equivalents at September 26, 1998 decreased by
approximately $3,201,000 from March 28, 1998 primarily due to increased
inventory levels, increased accounts receivable balances and purchases of
property and equipment relating to production tooling and computerized
equipment. Current liabilities increased by approximately 6,338,000 primarily as
a result of increases in accounts payable related to inventory purchases and
other accrued expenses. Long-term debt decreased by $4,500,000 as a result of
repayments of borrowings under the Company's line of credit. The Company has two
lines of credit with two banking
11
<PAGE>
institutions totaling $26,500,000. At September 26, 1998 the Company had
borrowings totaling $8,000,000 under its $25 million revolving credit agreement.
The Company believes that its existing resources are adequate to meet its
requirements for working capital and capital expenditures through the next
twelve months.
Significant Customers
The Company's financial results for the three-month and six-month periods ending
September 26, 1998 include significant OEM sales of multimedia speaker systems
to Gateway. These sales are pursuant to various contracts that currently run
through June 1999. Since these contracts do not contain schedules with which
Gateway must comply in placing orders, orders by Gateway may fluctuate
significantly from quarter to quarter over the terms of the contracts. Assuming
Gateway places orders in the quantities required under the terms of the
contracts by June 1999, a substantial portion of the Company's revenues for the
second half of fiscal 1999 is expected to be derived from its contracts with
Gateway. The loss of Gateway as a customer or any significant portion of orders
from Gateway could have a material adverse affect on the Company's business,
results of operations and financial condition. In addition, the Company also
could be materially adversely affected by any substantial work stoppage or
interruption of production at Gateway or if Gateway were to reduce or cease
conducting operations.
Year 2000 Compliance
The Company has undertaken an internal assessment of its operations,
including its information and financial systems and its manufacturing
equipment in order to determine the extent to which the Company may be
adversely affected by Year 2000 issues. The Company is currently in the
process of updating its computer systems and applications to improve the
scalability and functionality of the Company's overall manufacturing,
planning and inventory related systems and to ensure that they are Year 2000
compliant. The Company believes that the Company's computer system will be
Year 2000 compliant. The financial impact to the Company of its Year 2000
compliance programs has not been and is not anticipated to be material to its
financial position or results of operations in any given year. The Company
has also commenced a survey of its suppliers' Year 2000 compliance status and
is anticipating responses from theses suppliers before the end of the current
fiscal year. While the Company does not believe it will suffer any major
effects from the Year 2000 issue, it is possible that such effects could
materially impact future financial results, or cause reported financial
information not to be necessarily indicative of future operating results or
future financial condition. In addition, if any of the Company's significant
customers or suppliers do not successfully and in a timely manner achieve
Year 2000 compliance, the Company's business could be materially affected. At
present, the Company has not developed contingency plans, but intends to
determine whether to develop any such plans by the end of fiscal year 1999.
Cautionary Statements
The Private Securities Litigation Reform Act of 1995 contains certain safe
harbors regarding forward-looking statements. From time to time, information
provided by the Company or statements made by its directors, officers, or
employees may contain "forward-looking" information which involve risk and
uncertainties. Any statements in this report that are not statements of
historical fact are forward-looking statements (including, but not limited to,
statements concerning the characteristics and growth of the Company's market and
customers, the Company's objectives and plans for future operations, the
Company's expected liquidity and capital resources and the Company's ability and
the Company's suppliers' and customers' ability to replace, modify or upgrade
computer programs in ways to adequately address the Year 2000 issue). Such
forward-looking statements are based on a number of assumptions and involve a
number of risks and uncertainties, and accordingly, actual results could differ
materially. Factors that may cause such differences include, but are not limited
to: the continued and future acceptance of the Company's products, the rate of
growth in the audio industry; the presence of competitors with greater technical
marketing and financial resources; the Company's ability to promptly and
effectively respond to technological change to meet evolving consumer demands;
capacity and supply constraints or difficulties;
12
<PAGE>
and the Company's ability to successfully integrate new operations. The words
"believe,' "expect," "anticipate," "intend" and "plan" and similar expressions
identify forward-looking statements. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date
the statement was made. For a further discussion of these and other significant
factors to consider in connection with forward-looking statements concerning the
Company, reference is made to Exhibit 99 of the Company's Form 8-K filed on July
18, 1996.
13
<PAGE>
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of the Shareholders of the Company held on August
11, 1998, shareholders acted affirmatively to elect nominees for
directors proposed by management. Each Director is to serve until the
next Annual Meeting of Shareholders and thereafter until his/her
successor is elected and qualified.
<TABLE>
<CAPTION>
Votes "For" Votes "Withheld"
----------- ----------------
<S> <C> <C>
Andrew G. Kotsatos ........... 2,817,427 2,920
Fred E. Faulkner, Jr ......... 2,816,951 3,396
George J. Markos ............. 2,806,827 13,520
Lisa M. Mooney ............... 2,816,551 3,796
Gerald Walle ................. 2,808,427 11,920
</TABLE>
Shareholders also voted to amend the Company's Articles of
Organization to provide that the Company shall have authority to issue
a total of eight million (8,000,000) shares of common stock $.01 par
value per share. A total of 2,787,126 votes were cast in favor of the
proposal, 31,001 votes were cast against, and there were 2,220
abstentions.
Shareholders also voted to ratify the action of the Directors in
selecting Arthur Andersen LLP as auditors of the Company. A total of
2,814,624 votes were cast in favor of the proposal, 1,153 votes were
cast against, and there were 4,570 abstentions.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
Exhibit 27 -- Financial Data Schedule
b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
September 26, 1998.
14
<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.
Boston Acoustics, Inc.
-------------------------------
Registrant
Date: November 6, 1998 By: /s/Andrew G. Kotsatos
-------------------------------
Andrew G. Kotsatos
Director, Chief Executive Officer
and Treasurer
Date: November 6, 1998 By: /s/Fred E. Faulkner, Jr.
-------------------------------
Fred E. Faulkner, Jr.
President and Chief
Operating Officer
Date: November 6, 1998 By: /s/Debra A. Ricker-Rosato
-------------------------------
Debra A. Ricker-Rosato
Vice President and
Chief Accounting Officer
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THE COMPANY'S FINANCIAL STATEMENTS IN ITS QUARTERLY REPORT ON FORM 10-Q FOR THE
QUARTERLY PERIOD ENDED SEPTEMBER 26, 1998.
</LEGEND>
<CIK> 0000805268
<NAME> BOSTON ACOUSTICS, INC.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-27-1999
<PERIOD-END> SEP-26-1998
<CASH> 669216
<SECURITIES> 0
<RECEIVABLES> 13141668
<ALLOWANCES> 406000
<INVENTORY> 19115504
<CURRENT-ASSETS> 34565295
<PP&E> 21322619
<DEPRECIATION> 9114750
<TOTAL-ASSETS> 48306688
<CURRENT-LIABILITIES> 15432678
<BONDS> 5000000
0
0
<COMMON> 69543
<OTHER-SE> 56046584
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