<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 30, 2000
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 (I.R.S. EMPLOYER
OF INCORPORATION OR IDENTIFICATION NO.)
ORGANIZATION)
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 5,082,464 shares of Common Stock issued and 4,909,864 shares
outstanding as of November 10, 2000.
<PAGE>
Boston Acoustics, Inc.
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I: Financial Information
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets
March 25, 2000 and September 30, 2000 4
Consolidated Statements of Income
Three months and Six Months ended September 25, 1999
and September 30, 2000 6
Consolidated Statements of Cash Flows
Six Months ended September 25, 1999 and
September 30, 2000 7
Notes to Unaudited Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 11
Part II: Other Information
Items 1 through 6 15
Signatures 16
</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 25, 2000 September 30, 2000
-------------- ------------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 1,506,741 $ 1,472,969
Accounts receivable, net of reserves of
approximately $345,000
and $369,000, respectively 12,632,632 16,678,977
Inventories 19,333,515 26,662,953
Deferred income taxes 1,545,000 1,545,000
Prepaid expenses and other current assets 1,151,536 1,279,946
----------- -----------
Total current assets 36,169,424 47,639,845
----------- -----------
Property and Equipment, at cost:
Land 1,815,755 1,815,755
Building and improvements 7,925,701 8,989,008
Machinery and equipment 13,517,432 14,600,850
Office equipment and furniture 4,131,718 4,501,153
Motor vehicles 259,319 247,544
----------- -----------
27,649,925 30,154,310
Less-accumulated depreciation
and amortization 12,035,891 13,673,466
----------- -----------
15,614,034 16,480,844
----------- -----------
Other Assets 1,080,569 1,192,587
----------- -----------
$52,864,027 $65,313,276
=========== ===========
</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 25, 2000 September 30, 2000
-------------- ------------------
<S> <C> <C>
Current Liabilities:
Accounts payable $ 6,002,158 $10,310,173
Accrued payroll and payroll-
related expenses 2,148,272 2,353,651
Dividends payable 417,201 417,201
Other accrued expenses 1,171,200 1,341,923
Accrued income taxes -- 546,467
Current maturity of line of credit 1,602,287 1,517,979
----------- -----------
Total current liabilities 11,341,118 16,487,394
----------- -----------
Line of credit, net of current portion 4,850,000 9,600,000
Commitments
Shareholders' Equity:
Common stock, $.01 par value
Authorized -- 8,000,000 shares
Issued - 5,080,764 50,807 50,807
Additional paid-in capital 918,534 918,534
Retained earnings 38,131,912 40,684,885
----------- -----------
39,101,253 41,654,226
Less-Treasury stock, 172,500 shares, at cost 2,428,344 2,428,344
----------- -----------
Total shareholders' equity 36,672,909 39,225,882
----------- -----------
$52,864,027 $65,313,276
=========== ===========
</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 25, September 30, September 25, September 30,
1999 2000 1999 2000
(13 Weeks) (14 Weeks) (26 Weeks) (27 Weeks)
------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Net sales $ 28,679,502 $ 34,584,146 $ 50,524,834 $ 57,407,174
Cost of goods sold 20,041,878 24,873,312 34,847,102 40,432,171
------------ ------------ ------------ ------------
Gross profit 8,637,624 9,710,834 15,677,732 16,975,003
------------ ------------ ------------ ------------
Selling and
marketing expenses 2,694,756 3,360,317 5,215,929 6,069,056
General and
administrative expenses 1,296,701 1,238,455 2,396,524 2,492,848
Engineering and
development expenses 1,764,517 1,404,694 3,164,648 2,780,344
------------ ------------ ------------ ------------
Total operating expenses 5,755,974 6,003,466 10,777,101 11,342,248
------------ ------------ ------------ ------------
Income from operations 2,881,650 3,707,368 4,900,631 5,632,755
Interest income 22,330 20,403 46,646 39,620
Interest expense (177,392) (146,879) (373,246) (251,999)
------------ ------------ ------------ ------------
Income before provision
for income taxes 2,726,588 3,580,892 4,574,031 5,420,376
Provision for income taxes 1,054,000 1,343,000 1,762,000 2,033,000
------------ ------------ ------------ ------------
Net income $ 1,672,588 $ 2,237,892 $ 2,812,031 $ 3,387,376
============ ============ ============ ============
Net income per share
Basic $ .33 $ .46 $ .56 $ .69
============ ============ ============ ============
Diluted $ .31 $ .45 $ .54 $ .69
============ ============ ============ ============
Weighted average common shares outstanding
Basic 5,064,715 4,908,245 5,038,702 4,908,245
Diluted 5,320,674 4,954,202 5,254,793 4,925,629
Dividends per share $ .085 $ .085 $ .17 $ .17
============ ============ ============ ============
</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 25, 1999 September 30, 2000
------------------ ------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,812,031 $ 3,387,376
Adjustments to reconcile net income to net cash
provided by (used in) operating activities-
Depreciation and amortization 1,631,016 1,639,585
Changes in assets and liabilities, net of acquisition --
Accounts receivable (942,372) (4,046,345)
Inventories 2,542,977 (7,329,438)
Prepaid expenses and other current assets (512,430) (128,410)
Accounts payable 976,966 4,308,015
Accrued payroll and other accrued expenses 987,107 376,102
Accrued income taxes (357,592) 546,467
----------- -----------
Net cash provided by (used in) operating activities 7,137,703 (1,246,648)
----------- -----------
Cash flows from investing activities:
Purchases of property and equipment, net (2,037,992) (2,504,385)
Increase in other assets (121,358) (114,028)
----------- -----------
Net cash used in investing activities (2,159,350) (2,618,413)
----------- -----------
Cash flows from financing activities:
Dividends paid (852,810) (834,403)
Proceeds from line of credit --- 5,500,000
Repayments of line of credit (4,491,267) (834,308)
Proceeds from exercise of stock options 126,667 ---
----------- -----------
Net cash provided by (used in) financing activities (5,217,410) 3,831,289
----------- -----------
Decrease in cash and cash equivalents (239,057) (33,772)
Cash and cash equivalents, beginning of period 2,096,246 1,506,741
----------- -----------
Cash and cash equivalents, end of period $ 1,857,189 $ 1,472,969
=========== ===========
Supplemental Disclosure of NonCash Financing Activities:
Dividends payable $ 431,736 $ 417,201
----------- -----------
Supplemental Disclosure of Cash Flow Information:
Cash paid for income taxes $ 2,540,147 $ 1,548,500
=========== ===========
Cash paid for interest $ 371,020 $ 220,427
=========== ===========
</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 30, 2000 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 25, 2000.
(2) Inventories
Inventories are stated at the lower of cost (first-in, first-out) or
market and consist of the following:
<TABLE>
<CAPTION>
March 25, 2000 September 30, 2000
-------------- ------------------
<S> <C> <C>
Raw materials and work-in process $10,547,363 $13,317,638
Finished goods 8,786,152 13,345,315
----------- -----------
$19,333,515 $26,662,953
=========== ===========
</TABLE>
Work-in-process and finished goods inventories consist of materials,
labor and manufacturing overhead.
(3) Net Income Per Common Share
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 three-month period ended September 30, 2000, there were
174,104 stock options, and for the six-month period there were 425,860 stock
options that have been excluded from the weighted average number of common
and dilutive shares outstanding as their effect would be anti-dilutive. For
the three-month period ended September 25, 1999, there were 207,877 stock
options, and for the six-month period there were 208,195 stock options that
have been excluded from the weighted average number of common and dilutive
shares outstanding as their effect would be anti-dilutive.
8
<PAGE>
A reconciliation of the number of shares used in the calculation of basic
and diluted net income per share, is as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
-------------------------------------- ---------------------------------
September 25, September 30, September 25, September 30,
1999 2000 1999 2000
-------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Weighted
average common
shares outstanding 5,064,715 4,908,245 5,038,702 4,908,245
Dilutive effect of
assumed exercise of
stock options and warrant 255,959 45,957 216,091 17,384
--------- --------- --------- ---------
Weighted average
common shares
outstanding assuming
dilution 5,320,674 4,954,202 5,254,793 4,925,629
========= ========= ========= =========
</TABLE>
(4) Segment Reporting
The Company has two reportable segments: 1) Core, and 2) Original
Equipment Manufacturer (OEM) and Multimedia.
The accounting policies of the segments are the same as those described
in the summary of significant accounting policies. The Company does not
allocate operating expenses between its two reportable segments. Accordingly,
the Company's measure of profit for each reportable segment is based on gross
profit.
<TABLE>
<CAPTION>
Three Months Ended September 30, 2000
-------------------------------------
OEM and
Fiscal 2001 Core Multimedia Total
----------- ---- ---------- -----
<S> <C> <C> <C>
Net Sales $15,546,388 $19,037,758 $34,584,146
=========== =========== ===========
Gross profit $ 5,491,318 $ 4,219,516 $ 9,710,834
=========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended September 25, 1999
-------------------------------------
OEM and
Fiscal 2000 Core Multimedia Total
----------- ---- ---------- -----
<S> <C> <C> <C>
Net Sales $13,659,147 $15,020,355 $28,679,502
=========== =========== ===========
Gross profit $ 4,914,756 $ 3,722,868 $ 8,637,624
=========== =========== ===========
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Six Months Ended September 30, 2000
-----------------------------------
OEM and
Fiscal 2001 Core Multimedia Total
----------- ---- ---------- -----
<S> <C> <C> <C>
Net Sales $28,957,720 $28,449,454 $57,407,174
=========== =========== ===========
Gross profit $10,317,094 $ 6,657,909 $16,975,003
=========== ============ ===========
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended September 25, 1999
-----------------------------------
OEM and
Fiscal 2000 Core Multimedia Total
----------- ---- ---------- -----
<S> <C> <C> <C>
Net Sales $26,566,627 $23,958,207 $50,524,834
=========== =========== ===========
Gross profit $10,099,393 $ 5,578,339 $15,677,732
=========== =========== ===========
</TABLE>
(5) Significant Customers
For the three-month periods ended September 30, 2000 and September 25,
1999, two customers represented approximately 59% and 61% of the Company's
net sales respectively. The same two customers accounted for approximately
55% and 56% of the net sales for the six months ended September 30, 2000 and
September 25, 1999 respectively.
(6) International Operations
The Company maintains sales concentrations in Europe, Asia, and Canada
in addition to distributing product through two foreign subsidiaries. Export
sales accounted for approximately 14% of sales for the three-month periods
ended September 30, 2000 and September 25, 1999, and approximately 15% for
the six-month periods ended September 30, 2000 and September 25, 1999.
(7) Recent Accounting Pronouncements
In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities. SFAS No. 133 establishes accounting and
reporting disclosure standards for derivative instruments including certain
derivative instruments embedded in other contracts (collectively referred to
as derivatives) and for hedging activities. SFAS No. 133, as amended by SFAS
No. 137, Accounting for Derivative Instruments and Hedging Activities --
Deferral of the Effective Date of FASB Statement No. 133, is effective for
all fiscal quarters of all fiscal years beginning after June 15, 2000. The
Company does not expect adoption of this statement to have a material impact
on its consolidated financial position or results of operations.
The Securities and Exchange Commission issued Staff Accounting Bulletin (SAB)
No. 101, Revenue Recognition, in December 1999. The Company believes that the
guidance provided in SAB No. 101 will not have a material impact on future
operating results.
In March 2000, the FASB issued Interpretation No. 44, Accounting for Certain
Transactions Involving Stock Compensation -- an Interpretation of APB Opinion
No. 25 in certain situations, as defined. The interpretation is effective
July 1, 2000, but covers certain events during the period after December 15,
1998 but before the effective date. The Company expects that the adoption of
this interpretation will not have any effect on the accompanying financial
statements.
10
<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 25, 1999 and September 30, 2000
expressed as percentages of net sales.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------------- -------------------------------------
September 25, September 30, September 25, September 30,
1999 2000 1999 2000
(13 Weeks) (14 Weeks) (26 Weeks) (27 Weeks)
---------------- -------------- ------------------ -------------
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of goods sold 69.9 71.9 69.0 70.4
----- ---- ---- ----
Gross profit 30.1 28.1 31.0 29.6
----- ---- ---- ----
Selling and marketing
expenses 9.4 9.7 10.3 10.6
General & administrative
expenses 4.5 3.6 4.7 4.4
Engineering & development
expenses 6.2 4.1 6.3 4.8
----- ----- ----- -----
20.1 17.4 21.3 19.8
----- ----- ----- -----
Income from operations 10.0 10.7 9.7 9.8
Interest income (expense), net (0.5) (0.3) (0.6) (0.4)
----- ----- ----- -----
Income before provision for
income taxes 9.5 10.4 9.1 9.4
Provision for income taxes 3.7 3.9 3.5 3.5
----- ----- ----- -----
Net income 5.8% 6.5% 5.6% 5.9%
===== ====== ===== =====
</TABLE>
Net sales increased approximately 21%, from $28,679,502 during the second
quarter of Fiscal 2000 to $34,584,146 during the second quarter of Fiscal
2001. For the six months ended September 30, 2000 net sales increased
approximately 14% from $50,524,834 during the second quarter of Fiscal 2000
to $57,407,174. The second quarter of Fiscal 2001 includes 14 weeks of sales
and earnings compared to 13 weeks for the second quarter of Fiscal 2000. The
overall sales increase included sales increases in both the Core and
Multimedia segments of the business. The Core business increase during the
three months ended September 30, 2000 was the result of $1.2 million back
orders from the first quarter of Fiscal 2001 and new product introductions
11
<PAGE>
in our Core home entertainment product categories. The VR-MC center channel
speaker system and the VR-MX surround speaker were introduced during the
second quarter to compliment the VR-M50 and VR-M60 Monitor bookshelf speaker
systems introduced last fiscal year. The VR-MC with a suggested retail of
$600 each and the VR-MX with a suggested retail of $800 per pair are both
available in cherry or black ash real wood veneer. The Lynnfield VR910 and
VR920 high performance center channel speaker systems with suggested retails
of $350 and $600 respectively have end caps shaped and colored to match the
design of our Lynnfield VR900 series of floorstanding speakers and were
introduced during the first quarter of Fiscal 2001. The Multimedia segment
included increased sales of the BA265 two-piece speaker system introduced in
June of the first quarter of Fiscal 2001 and available through our OEM
customer, Gateway, Inc. ("Gateway"). In addition, during the second quarter
the Company began shipments of the BA65 analog two-piece system to its
Multimedia retail customers.
The Company's gross margin for the three-month and six-month periods ended
September 30, 2000 decreased as a percentage of net sales due primarily to
increased production expenses including those associated with the Company's
efforts to fill the back orders in the early part of the second quarter.
These expenses included the hiring of temporary contract labor, as well as,
increased overtime expenses. In addition, the Company experienced higher
scrap, rework and warehousing costs as compared to the same period a year ago.
Total operating expenses increased in absolute dollars while decreasing as a
percentage of net sales during both the three-month and six-month periods
ended September 30, 2000. Selling and marketing expenses have increased in
absolute dollars primarily due to increased salaries and benefits relating to
additional personnel and increased advertising costs relating to both the
Core and Multimedia retail segments. General and administrative expenses have
remained relatively stable for the three-months ended September 30, 2000. The
slight increase in general and administrative expenses for the six months
ended September 30, 2000 is attributed to increased payroll related costs and
insurance expense. Engineering and development expenses for the three-month
and six-month periods ended September 30, 2000 have decreased in absolute
dollars due primarily to lower consulting fees and lower outside service
expenses as compared to the same periods a year ago.
Net interest expense has decreased in both absolute dollars and as a
percentage of net sales during the three-month and six-month periods ended
September 30, 2000 compared to the corresponding periods a year ago, despite
an increase in the Company's line of credit borrowings during the second
fiscal quarter from $6 million to $11 million.
The Company's effective income tax rate decreased to 37.5% for the
three-month and six-month periods ended September 30, 2000 compared to 38.5%
for the same periods a year ago due to lower state income taxes.
Net income for the second quarter increased from approximately $1,673,000 in
Fiscal 2000 to approximately $2,238,000 in Fiscal 2001 while diluted earnings
per share increased from $.31 to $.45 per share. Net income for the six-month
period ended September 30, 2000 increased from approximately $2,812,000 in
Fiscal 2000 to approximately $3,387,000 in Fiscal 2001, while diluted
earnings per share for the six-month period increased from $.54 to $.69 per
share. The increase in net income for the three and six-month periods ended
September 30, 2000 is primarily the result of the increase in net sales,
partially offset by an increase in cost of goods sold.
Liquidity and Capital Resources
During the first six months of Fiscal 2001, the Company financed its growth
principally with net proceeds of approximately $4,700,000 from the Company's
revolving line of credit. As of September 30, 2000 the Company's working
capital was approximately $31,152,000, an increase of approximately
$6,324,000 since the end of Fiscal 2000. The increase in working capital was
primarily due to increases in inventory and accounts receivable which were
partially offset by increased accounts payable balances and the borrowings
12
<PAGE>
on the Company's line of credit during the three-month period ending
September 30, 2000. The Company's cash and cash equivalents were
approximately $1,473,000 at September 30, 2000, a decrease of approximately
$34,000 from March 25, 2000 primarily due to increased inventory levels,
increased accounts receivable balances and increased building improvements.
The Company's increased inventory levels were principally the result of
increased Multimedia finished goods expected to ship during the Company's
third fiscal quarter. The increase in the Company's accounts receivable
balance is principally the result of the timing of payments by certain larger
customers which were subsequently received after September 30, 2000. Current
liabilities increased by approximately $5,100,000 primarily as a result of
increases in accounts payable related to inventory purchases and other
accrued expenses. Long term debt increased by $4,750,000 as a result of
borrowings under the Company's line of credit. The Company has two lines of
credit with two banking institutions totaling $26,500,000. The increase in
borrowings is primarily the result of a temporary increase in accounts
receivable and inventory as of September 30, 2000. At September 30, 2000 the
Company had borrowings totaling $11,000,000 under its $25,000,000 revolving
credit agreement.
The Company believes that its current resources are adequate to meet its
requirements for working capital and capital expenditures through Fiscal 2001.
Significant Customers
The Company's financial results for the three-month and six-month periods
ended September 30, 2000 include significant OEM sales of multimedia speaker
systems to Gateway. The terms of these sales are governed by a Master Supply
Agreement between Gateway and the Company dated July 19, 1999, which defines
such issues as ordering and invoicing procedures, shipping charges,
warranties, repair service support, product safety requirements, etc. This
Master Supply Agreement with Gateway does not contain minimum or scheduled
purchase requirements; therefore, purchase orders by Gateway may fluctuate
significantly from quarter to quarter over the terms of the agreement.
Based on information currently available from our OEM customer, the Company
anticipates that our OEM sales should increase slightly during the fiscal
year ending March 31, 2001 as compared to the fiscal year ended March 25,
2000. 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.
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, and 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; 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
13
<PAGE>
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.
14
<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 8, 2000, 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>
Nominee Votes "For" Votes "Withheld"
------- ---------- ---------------
<S> <C> <C>
Andrew G. Kotsatos 4,254,351 29,661
Moses A. Gabbay 4,244,026 39,986
George J. Markos 4,249,851 34,161
Lisa M. Mooney 4,253,951 30,061
</TABLE>
Shareholders also voted to ratify the action of the Directors in
selecting Arthur Andersen LLP as auditors of the Company. A total of
4,270,077 votes were cast in favor of the proposal, 4,875 votes were
cast against, and there were 9,060 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 30, 2000.
15
<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 13, 2000 By: /s/ Andrew G. Kotsatos
---------------------
Andrew G. Kotsatos
Director, Chief Executive
Officer and Treasurer
Date: November 13, 2000 By: /s/ Moses A. Gabbay
------------------
Moses A. Gabbay
Director and Chief Operating
Officer
Date: November 13, 2000 By: /s/ Debra A. Ricker-Rosato
--------------------------
Debra A. Ricker-Rosato
Vice President and
Chief Accounting Officer
16
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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 thereunto duly authorized.
Boston Acoustics, Inc.
----------------------
Registrant
Date: November 13, 2000 By:
-------------------------------
Andrew G. Kotsatos
Director, Chief Executive Officer
and Treasurer
Date: November 13, 2000 By:
-------------------------------
Moses A. Gabbay
Director and Chief Operating
Officer
Date: November 13, 2000 By:
-------------------------------
Debra A. Ricker-Rosato
Vice President and
Chief Accounting Officer
17
