<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 DECEMBER 25, 1999
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 4,949,264 shares of Common Stock issued and outstanding as of
February 4, 2000.
- --------------------------------------------------------------------------
<PAGE>
Boston Acoustics, Inc.
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Part I: Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets (Unaudited)-
March 27, 1999 and December 25, 1999 4
Consolidated Statements of Income (Unaudited)-
Three months and Nine Months ended December 26, 1998
and December 25, 1999 6
Consolidated Statements of Cash Flows (Unaudited)-
Nine Months ended December 26, 1998 and
December 25, 1999 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
Exhibit Index 17
</TABLE>
2
<PAGE>
PART I: FINANCIAL INFORMATION
Item 1: Financial Statements
<PAGE>
Boston Acoustics, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
March 27, 1999 December 25, 1999
-------------- -----------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 2,096,246 $ 1,795,388
Accounts receivable, net of reserves of
approximately $463,000
and $505,000, respectively 12,586,919 17,217,879
Inventories 21,651,847 18,935,663
Deferred income taxes 1,524,000 1,524,000
Prepaid expenses and other current assets 478,174 954,079
----------- -----------
Total current assets 38,337,186 40,427,009
----------- -----------
Property and Equipment, at cost:
Land 1,433,365 1,805,861
Building and improvements 7,113,384 7,240,133
Machinery and equipment 10,890,563 12,986,600
Office equipment and furniture 3,862,578 4,109,938
Motor vehicles 360,963 264,224
----------- -----------
23,660,853 26,406,756
Less-accumulated depreciation
and amortization 9,699,448 11,590,069
----------- -----------
13,961,405 14,816,687
----------- -----------
Other Assets 940,226 1,014,782
----------- -----------
$53,238,817 $56,258,478
=========== ===========
</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 27, 1999 December 25, 1999
-------------- -----------------
<S> <C> <C>
Current Liabilities:
Accounts payable $ 2,465,201 $ 7,188,537
Accrued payroll and payroll-
related expenses 1,553,933 1,828,905
Dividends payable 425,967 424,342
Other accrued expenses 796,795 1,410,271
Accrued income taxes 359,689 2,118
Current maturity of line of credit 3,265,018 1,726,223
----------- -----------
Total current liabilities 8,866,603 12,580,396
----------- -----------
Line of credit, net of current portion 10,500,000 6,600,000
Commitments
Shareholders' Equity:
Commonstock, $.01 par value Authorized -- 8,000,000 shares
Issued - 5,011,700 and 5,080,764
shares at March 27, 1999 and
December 25, 1999, respectively 50,117 50,807
Additional paid-in capital 636,581 918,534
Retained earnings 33,185,516 37,386,460
----------- -----------
33,872,214 38,355,801
Less-Treasury stock, 88,500 shares at
December 25, 1999, at cost -- 1,277,719
----------- -----------
Total shareholders' equity 33,872,214 37,078,082
----------- -----------
$53,238,817 $56,258,478
=========== ===========
</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 Nine Months Ended
------------------ -----------------
December 26, December 25, December 26, December 25,
1998 1999 1998 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales $ 37,305,613 $ 30,567,062 $ 85,155,939 $ 81,091,896
Cost of goods sold 25,070,440 20,158,335 56,523,377 55,005,437
------------ ------------ ------------ ------------
Gross profit 12,235,173 10,408,727 28,632,562 26,086,459
------------ ------------ ------------ ------------
Selling and
marketing expenses 2,975,878 3,003,881 7,372,786 8,219,810
General and
administrative expenses 1,460,654 1,207,442 3,561,538 3,603,966
Engineering and
development expenses 1,374,400 1,478,941 3,677,003 4,643,589
------------ ------------ ------------ ------------
Total operating expenses 5,810,932 5,690,264 14,611,327 16,467,365
------------ ------------ ------------ ------------
Income from operations 6,424,241 4,718,463 14,021,235 9,619,094
Interest income 17,815 18,821 71,217 65,467
Interest expense (219,618) (173,353) (542,081) (546,599)
------------ ------------ ------------ ------------
Income before provision
for income taxes 6,222,438 4,563,931 13,550,371 9,137,962
Provision for income taxes 2,269,000 1,764,000 5,015,000 3,526,000
------------ ------------ ------------ ------------
Net income $ 3,953,438 $ 2,799,931 $ 8,535,371 $ 5,611,962
============ ============ ============ ============
Net income per share
Basic $ .79 $ .55 $ 1.71 $ 1.11
============ ============ ============ ============
Diluted $ .75 $ .51 $ 1.62 $ 1.05
============ ============ ============ ============
Weighted average common shares outstanding
Basic 4,989,609 5,048,868 4,982,424 5,042,091
Diluted 5,270,648 5,448,015 5,278,824 5,339,945
Dividends per share $ .085 $ .085 $ .253 $ .255
============ ============ ============ ============
</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>
Nine Months Ended
-----------------
December 26, 1998 December 25, 1999
----------------- -----------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 8,535,371 $ 5,611,962
Adjustments to reconcile net income to net cash
provided by (used in) operating activities-
Depreciation and amortization 2,368,964 2,192,365
Changes in assets and liabilities, net of acquisition --
Accounts receivable (7,754,855) (4,630,960)
Inventories (15,415,775) 2,716,184
Prepaid expenses and other current assets 179,147 (604,002)
Accounts payable 11,066,718 4,723,336
Accrued payroll and other accrued expenses 795,981 888,448
Accrued income taxes (37,801) (357,571)
- -------------------------------------------------------------- ------------ ------------
Net cash provided by (used in) operating activities (262,250) 10,539,762
------------ ------------
Cash flows from investing activities:
Purchase of property and equipment, net (3,930,111) (2,745,903)
Increase in other assets (1,306) (239,824)
------------ ------------
Net cash used in investing activities (3,931,417) (2,985,727)
------------ ------------
Cash flows from financing activities:
Dividends paid (1,253,168) (1,284,546)
Stock dividend fractional share payment (480) --
Purchase of treasury stock -- (1,277,719)
Proceeds from line of credit 9,600,000 --
Payments on line of credit (7,100,000) (5,438,795)
Proceeds from exercise of stock options 240,215 146,167
------------ ------------
Net cash provided by (used in) financing activities 1,486,567 (7,854,893)
------------ ------------
Decrease in cash and cash equivalents (2,707,100) (300,858)
Cash and cash equivalents, beginning of period 3,870,569 2,096,246
------------ ------------
Cash and cash equivalents, end of period $ 1,163,469 $ 1,795,388
============ ============
Supplemental Disclosure of NonCash Financing Activities:
Dividends payable $ 424,140 $ 424,342
============ ============
Supplemental Disclosure of Cash Flow Information:
Cash paid for income taxes $ 5,052,800 $ 4,259,871
============ ============
Cash paid for interest $ 557,672 $ 531,446
============ ============
</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 nine-month
periods ended December 25, 1999 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 27, 1999.
(2) Inventories
Inventories are stated at the lower of cost (first-in, first-out) or
market and consist of the following:
<TABLE>
<CAPTION>
March 27, 1999 December 25, 1999
-------------- -----------------
<S> <C> <C>
Raw materials and work-in process $ 9,425,814 $10,703,593
Finished goods 12,226,033 8,232,070
----------- -----------
$21,651,847 $18,935,663
=========== ===========
</TABLE>
Work-in-process and finished goods inventories consist of materials,
labor and manufacturing overhead.
(3) Net Income Per Common Share
The Company follows the provisions of 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. 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 December 25, 1999, there were
361,917 shares, and for the nine-month period ended there were 212,768 shares
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
and nine-month periods ended December 26, 1998, no antidilutive shares have been
excluded for purposes of earnings per share.
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 Nine Months Ended
------------------ -----------------
December 26, December 25, December 26, December 25,
1998 1999 1998 1999
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Weighted
average common
shares outstanding 4,989,609 5,048,868 4,982,424 5,042,091
Dilutive effect of
assumed exercise of
stock options and warrant 281,039 399,147 296,400 297,854
--------- --------- --------- ---------
Weighted average
common shares
outstanding assuming
dilution 5,270,648 5,448,015 5,278,824 5,339,945
========= ========= ========= =========
</TABLE>
(4) Segment Reporting
The Company adopted SFAS No. 131, DISCLOSURES ABOUT SEGMENTS OF AN
ENTERPRISE AND RELATED INFORMATION effective March 27, 1999. SFAS No. 131
requires certain financial and supplementary information to be disclosed on an
annual and interim basis for each reportable segment of an enterprise.
The Company has determined that it has two reportable segments: Core and
original equipment manufacturer (OEM) and Multimedia. Prior to fiscal 1998, the
Company operated as a single segment.
The Company's reportable segments are strategic business units that sell
the Company's products to distinct distribution channels. Both segments derive
their revenues from the sale of audio systems. They are managed separately
because each segment requires different selling and marketing strategies as the
class of customers within each segment is different. The Company's disclosure of
segment performance is based on the way that management organizes the segments
within the enterprise for making operating decisions and assessing performance.
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.
9
<PAGE>
THREE MONTHS ENDED DECEMBER 25, 1999
<TABLE>
<CAPTION>
OEM and
Fiscal 2000 Core Multimedia Total
- ----------- ---- ---------- -----
<S> <C> <C> <C>
Net Sales $17,868,003 $12,699,059 $30,567,062
=========== =========== ===========
Gross profit $ 7,606,264 $ 2,802,463 $10,408,727
=========== =========== ===========
</TABLE>
THREE MONTHS ENDED DECEMBER 26, 1998
<TABLE>
<CAPTION>
OEM and
Fiscal 1999 Core Multimedia Total
- ----------- ---- ---------- -----
<S> <C> <C> <C>
Net Sales $17,089,853 $20,215,760 $37,305,613
=========== =========== ===========
Gross profit $ 7,752,054 $ 4,483,119 $12,235,173
=========== =========== ===========
</TABLE>
NINE MONTHS ENDED DECEMBER 25, 1999
<TABLE>
<CAPTION>
OEM and
Fiscal 2000 Core Multimedia Total
- ----------- ---- ---------- -----
<S> <C> <C> <C>
Net Sales $44,434,630 $36,657,266 $81,091,896
=========== =========== ===========
Gross profit $17,705,657 $ 8,380,802 $26,086,459
=========== =========== ===========
</TABLE>
NINE MONTHS ENDED DECEMBER 26, 1998
<TABLE>
<CAPTION>
OEM and
Fiscal 1999 Core Multimedia Total
- ----------- ---- ---------- -----
<S> <C> <C> <C>
Net Sales $41,450,954 $ 43,704,985 $85,155,939
=========== ============ ===========
Gross profit $17,442,750 $11,189,812 $28,632,562
=========== ============ ===========
</TABLE>
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
nine-month periods ended December 26, 1998 and December 25, 1999 expressed as
percentages of net sales.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------ -----------------
December 26, December 25, December 26, December 25,
1998 1999 1998 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of goods sold 67.2 65.9 66.4 67.8
----- ----- ----- -----
Gross profit 32.8 34.1 33.6 32.2
----- ----- ----- -----
Selling and marketing
expenses 8.0 9.8 8.6 10.1
General & administrative
expenses 3.9 4.0 4.2 4.5
Engineering & development
expenses 3.7 4.8 4.3 5.7
----- ----- ----- -----
15.6 18.6 17.1 20.3
----- ----- ----- -----
Income from operations 17.2 15.5 16.5 11.9
Interest income (expense), net (0.5) (0.6) (0.6) (0.6)
----- ----- ----- -----
Income before provision for
income taxes 16.7 14.9 15.9 11.3
Provision for income taxes 6.1 5.8 5.9 4.4
----- ----- ----- -----
Net income 10.6% 9.1% 10.0% 6.9%
===== ===== ===== =====
</TABLE>
Net sales decreased 18%, to approximately $30,567,000 during the third quarter
of fiscal 2000 from approximately $37,306,000 during the third quarter of fiscal
1999. For the nine months ended December 25, 1999 net sales decreased
approximately 5% from approximately $85,156,000 to approximately $81,092,000.
The overall sales decrease for both the three-month and nine-month periods ended
December 25, 1999 was primarily due to the decrease in OEM sales of multimedia
speaker systems to Gateway, Inc. ("Gateway"), a leading global direct marketer
of PC products. During the three-month period ended December 25, 1999,
Gateway purchased four systems, the Digital BA 735 Subwoofer/Satellite system
introduced in the first quarter of fiscal 2000,
11
<PAGE>
the Digital MediaTheater-TM- three-piece system, the DigitalTheater-TM- 6000
Dolby-Registered Trademark- Digital 5.1 channel Home Theater System and the
BA 7500-Registered Trademark- thin panel audio system designed for desktop
theater applications, such as DVDs and PC games. The current products are
available either as a component of certain pre-configured computer systems
offered by Gateway, or as an upgrade option on those configurations that do
not include Boston Acoustics' products as standard. The quantity of product
sold as an upgrade option could fluctuate significantly from quarter to
quarter and have an impact on the unit volume of OEM multimedia products.
During the three-month and nine-month periods ended December 25, 1999, growth
in the Company's core business sales was primarily the result of the
continued success of the VR-M monitor bookshelf speaker systems and the
powered subwoofer systems for use in home theater systems introduced during
the second quarter of fiscal 2000, as well as the DigitalTheater 6000 audio
system first introduced a year ago. In addition, during the three-month
period ended December 25, 1999, the Company introduced its new Competitor
Series of subwoofers for the automotive audio aftermarket. The Competitor
Series subwoofers are available in 15-inch, 12-inch, 10-inch and 8-inch sizes
and are priced between $279 and $199 ea. MRSP.
The Company's overall gross margin for the three-month period ended December
25, 1999 increased as a percentage of net sales due primarily to a shift in
the sales mix to loudspeaker models with slightly higher margins compared to
the same period a year ago. The Company's gross margin for the nine-month
period ended December 25, 1999 decreased as a percentage of net sales
primarily due to the lower margin sales of the Company's OEM Multimedia
products and expenses associated with new product introductions during the
first half of fiscal 2000.
Total operating expenses decreased in absolute dollars but increased as a
percentage of net sales during the three-month period ended December 25, 1999
primarily due to the decrease in sales from the same period a year ago.
Operating expenses for the nine-month period ended December 25, 1999 increased
in both absolute dollars and as a percentage of net sales. Selling and marketing
expenses remained relatively constant for the three-month period ended December
25, 1999 but increased for the nine-month period primarily due to increased
salaries and benefits relating to additional personnel as compared to the same
period a year ago. General and administrative expenses decreased in absolute
dollars for the three-month period ended December 25, 1999 compared to the
corresponding period a year ago while increasing slightly during the nine-month
period ended December 25, 1999 as compared to the same period in 1998.
Engineering and development expenses for the three-month and nine-month periods
ended December 25, 1999 have increased in absolute dollars due primarily to
increased salaries and benefits relating to additional personnel and increased
expenses associated with new product development.
Net interest expense for both the three-month and nine-month periods ended
December 25, 1999 remained stable as a percentage of net sales compared to the
corresponding periods as year ago, primarily due to the utilization of working
capital and repayments of a certain portion of the Company's line of credit
obligations.
The Company's effective income tax rate increased both for the three-month and
nine-month periods ended December 25, 1999 compared to the same periods a year
ago. The increase is primarily due to a smaller proportion of the Company's
income being derived outside the U.S., thereby reducing the tax benefits
associated with the Company's foreign sales corporation.
Net income for the third quarter decreased from approximately $3,953,000 in
fiscal 1999 to $2,800,000 in fiscal 2000 while diluted earnings per share
decreased from $.75 to $.51 per share. Net income for the nine-month period
ended December 25, 1999 decreased from approximately $8,535,000 in fiscal 1999
to approximately $5,612,000 in fiscal 2000, while diluted earnings per share for
the nine-month period decreased from $1.62 to $1.05 per share. The decrease in
net income for the three-month period ended December 25, 1999 is primarily the
result of the decrease in net sales and gross profit, partially offset by a
decrease in operating expenses. The decrease in net income for the nine-month
period ended December 25, 1999 is due to the decrease in sales and gross profit
and the increase in operating expenses as compared to the same period a year
ago.
12
<PAGE>
Liquidity and Capital Resources
During the first nine months of fiscal 2000, the Company financed its growth
principally with cash generated by operations. As of December 25, 1999 the
Company's working capital was approximately $27,847,000, a decrease of
approximately $1,624,000 since the end of fiscal 1999. The decrease in working
capital was primarily due to the repayment made on the Company's line of credit
borrowings. The Company's cash and cash equivalents were $1,795,388 at December
25, 1999, a decrease of approximately $301,000 from March 27, 1999 primarily due
to the purchase of land adjacent to the Company's corporate headquarters
facility, tooling expenditures related to new products, costs related to the
Company's new state-of-the art automated woofer assembly line, and the
repayments made on the Company's line of credit borrowings. The Company has two
lines of credit with two banking institutions totaling $26,500,000. At December
25, 1999 the Company had borrowings totaling $8,000,000 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 the next
twelve months.
Significant Customers
The Company's financial results for the three-month and nine-month periods
ended December 25, 1999 include significant OEM sales of multimedia speaker
systems to Gateway. These sales are pursuant to the Master Supply Agreement
between Gateway and Boston Acoustics, Inc. On July 19, 1999, the Company
entered into a new three year Master Supply Agreement with Gateway. Since
this Master Supply Agreement with Gateway does not contain minimum or
scheduled purchase requirements, purchase orders by Gateway may fluctuate
significantly from quarter to quarter over the term of the agreement. 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
To date, the Company's internal business systems have experienced no adverse
impact from the transition to the Year 2000. In addition, the Company is not
aware of any Year 2000 related issues with any of its customers, suppliers or
other third parties with whom it has business relationships. The Company does
not expect to incur any significant additional costs relating to Year 2000
issues.
Possible Adverse Effect of Euro Conversion
On January 1, 1999, 11 of the 15 member countries of the European Union
established fixed conversion rates between their existing currencies and a new
common currency called the "euro." This represented an initial step in a process
expected to culminate in the replacement of the existing currencies with the
euro. The conversion to the euro will have operational and legal implications
for some of our international business activities. The Company has begun
evaluating these implications, but the Company has yet to estimate the potential
impact on our business, operating results and financial condition. The Company's
preliminary judgement, however, is that the nature of the Company's business and
customers makes a material impact unlikely.
13
<PAGE>
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 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
None
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
December 25, 1999.
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: February 4, 2000 By: s/Andrew G. Kotsatos
-------------------------
Andrew G. Kotsatos
Director, Chief Executive Officer
and Treasurer
Date: February 4, 2000 By: s/Fred E. Faulkner, Jr.
-----------------------
Fred E. Faulkner, Jr.
President and Chief
Operating Officer
Date: February 4, 2000 By: s/Debra A. Ricker-Rosato
------------------------
Debra A. Ricker-Rosato
Vice President and
Chief Accounting Officer
16
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Page
- -------------- ----
<S> <C> <C>
Exhibit 27 Financial Data Schedule
</TABLE>
- --------------------
2
<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 DECEMBER 25, 1999
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-25-2000
<PERIOD-END> DEC-25-1999
<CASH> 1,795,388
<SECURITIES> 0
<RECEIVABLES> 17,217,879
<ALLOWANCES> 505,000
<INVENTORY> 18,935,663
<CURRENT-ASSETS> 40,427,009
<PP&E> 26,406,756
<DEPRECIATION> 11,590,069
<TOTAL-ASSETS> 56,258,478
<CURRENT-LIABILITIES> 12,580,396
<BONDS> 0
0
0
<COMMON> 50,807
<OTHER-SE> 37,027,275
<TOTAL-LIABILITY-AND-EQUITY> 56,258,478
<SALES> 81,091,896
<TOTAL-REVENUES> 81,091,896
<CGS> 55,005,437
<TOTAL-COSTS> 16,467,365
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 546,599
<INCOME-PRETAX> 9,137,962
<INCOME-TAX> 3,526,000
<INCOME-CONTINUING> 5,611,962
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,611,962
<EPS-BASIC> 1.11
<EPS-DILUTED> 1.05
</TABLE>
