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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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DATE OF REPORT: September 16, 1998
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SUN TELEVISION AND APPLIANCES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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Ohio 0-19269 31-1178151
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(STATE OR OTHER (COMMISSION FILE NO.) (IRS EMPLOYER
JURISDICTION OF IDENTIFICATION NUMBER)
INCORPORATION OR
ORGANIZATION)
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6600 Port Road
Groveport, Ohio 43125
(614) 492-5600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER
INCLUDING AREA CODE OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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Not Applicable
(FORMER NAME OR ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 2. BANKRUPTCY OR RECEIVERSHIP
On September 16, 1998, Sun Television and Appliances, Inc. and its
subsidiary Sun TV and Appliances, Inc. (collectively, "Sun TV") filed voluntary
petitions under Chapter 11 of the United States Bankruptcy Code, Case No.
98-2107 (MFW) in the United States Bankruptcy Court for the District of
Delaware, Judge Mary F. Walrath presiding. Sun TV, as Debtors-in Possession,
will continue to operate and manage their affairs and attempt to restructure
their financial obligations.
A copy of the press release issued by Sun TV on September 16, 1998,
reporting the Chapter 11 filings and related matters, is filed herewith as
Exhibit 99.1 and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit No. Description
99.1 News Release of Sun Television and Appliances,
Inc. dated September 16, 1998.
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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.
SUN TELEVISION AND APPLIANCES, INC.
Date: September 25, 1998 By: /s/ Dennis L. May
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Dennis L. May, President
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EXHIBIT INDEX
SUN TELEVISION & APPLIANCES, INC.
FORM 8-K
Exhibit No. Description
99.1 News Release of Sun Television and Appliances,
Inc. dated September 16, 1998.
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EXHIBIT 99.1
COLUMBUS, Ohio, Sept. 16 /PRNewswire/ -- Sun Television and Appliances, Inc.
(Nasdaq: SNTV - news) reported today that it, along with its subsidiary, Sun TV
and Appliances, Inc., filed voluntary petitions for relief under Chapter 11 of
the United States Bankruptcy Code with the United States Bankruptcy Court for
the District of Delaware. Company officials also said that it had entered into
an agreement with its existing secured lender, Bank Boston Retail Finance, Inc.,
to obtain post-petition, debtor-in-possession financing. The post-petition
financing, which is subject to Court approval, will be used to finance normal
operations, including honoring all post-petition trade and employee obligations,
while the Company develops a reorganization plan with its lenders and creditors.
R. Carter Pate, Sun Chairman and CEO said, "Our primary objective is to work in
the best interest of our customers, employees and creditors. While we are not
pleased to seek Chapter 11 relief, we think this action provides us with the
best opportunity to develop a plan to return Sun to financial stability and
close those stores that were unprofitable to operate. We will now have the
opportunity to take further actions to streamline our operations and bring our
expense ratio in line with revenues."
"There were a number of factors that led to our decision to seek protection, not
the least of which was the Company's lack of liquidity. Our revolving credit
availability is tied to inventory levels and since we are at a seasonal low with
our inventory, our borrowing capacity has been severely limited. We are also
operating during one of our seasonally weaker sales quarters, so cash flow has
been particularly strained. At the same time, some vendors have restricted our
terms and credit lines which has further exacerbated our cash availability
problems."
"From an operating perspective, we have yet to experience sales growth in
certain rural markets at the level we had internally projected. While we think
the rural market strategy may still be a viable strategy, what we did not
anticipate is the length of time to develop customer recognition of Sun and its
products in some of the rural markets. In addition, we have also experienced
continued competitive pressure in certain metro markets without adequate funds
available to upgrade older locations in those markets."
Chairman Pate emphasized that neither Sun employees nor customers in the markets
in which Sun plans to maintain its presence should notice any difference in
operations as a result of the filing. "In fact, the filing will give the Company
the time it needs to develop a reorganization plan without sacrificing important
customer services or materially reducing Sun's product offerings," said Pate.
Pate said that the Company has sought approval from the Bankruptcy Court to
close 29 stores in five states. If approved by the Court, the Company will close
seven stores in Greater Pittsburgh, Pennsylvania; six stores in Greater
Cincinnati, Ohio; six stores in the Northern Ohio region including locations in
Mentor, N. Olmstead, Parma, Elyria, North Randall and Mayfield; three stores in
Buffalo, New York, and one store each in Frankfort and Owensboro, Kentucky;
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Pottsville and Lebanon, Pennsylvania; Richmond, Kentucky; Morristown, Tennessee
and Staunton, Virginia.
"For the markets in which we continue to operate, all aspects of our business
will remain the same including store hours, return and exchange policies,
delivery, repair services covered under extended service contracts, and other
customer service initiatives. We have already begun to contact vendors and
believe they will continue to support Sun during the reorganization period. We
will also continue to accept our private-label credit card and other major
credit cards," said Pate.
Pate continued, "We have successfully executed many of the initiatives that we
had set out to when we began the turnaround a year and a half ago.
Unfortunately, given the Company's liquidity problems we were unable to continue
with the plan without the relief afforded by the Chapter 11 filing."
Pate concluded, "By utilizing the benefits of the Chapter 11 process, we believe
we can capitalize on the initiatives we've already put in place, as well as
complete additional restructuring activities to ensure Sun's ongoing viability.
We have already identified a number of actions we can take to improve our
performance and will be working diligently with our lenders and creditors to
quickly develop a reorganization plan to emerge from Chapter 11."
Sun also announced that Dennis L. May has been promoted to President of the
Company. May, who joined Sun in early 1990 as a computer buyer, has assumed
positions of increasing responsibility with the Company including Vice President
of Sales and Marketing in 1996 and was named Executive Vice President and Chief
Operating Officer in May, 1997.
Sun Television and Appliances, Inc. is a leading regional specialty retailer of
high-quality, brand name consumer electronics, home appliance and office
products. The Company operates 59 stores in Ohio, Indiana, Pennsylvania, New
York, West Virginia, Virginia, Tennessee and Kentucky.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
Statements made in this press release that are not historical facts may be
deemed forward-looking statements, and, as such, are subject to certain risks
and uncertainties. Actual results may differ materially from those anticipated
as a result of these certain risks and uncertainties, including, but not limited
to, the ability of the Company to complete a Chapter 11 reorganization plan, to
negotiate satisfactory terms with lenders, vendors and creditors, to obtain
court approval of post-petition financing. In addition, further deterioration of
the Company's financial performance, adverse change in the Company's ongoing
business relationships with vendors and suppliers relative to products shipments
and credit terms, and adverse economic conditions. Further information
concerning factors that could cause actual results to differ materially from
those in the forward-looking statements are contained from time to time in the
Company's SEC filings, including but not limited to the Company's report on Form
10-k for the year ended February 28,
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1998, and the Company's report on Form 10-q for the quarter ended May 30, 1998.
Copies of these filings may be obtained by contacting the Company or the SEC.
To access this year's news releases for Sun via facsimile transmission, please
call Company News on Call at 1-800-758-5804, Company Code 829172 or access
through the internet at http://www.prncwswire.com/ or
http://www.investor-access.com/suntv.html
INVESTOR RELATIONS/MEDIA CONTACTS:
AT THE COMPANY: DENNIS MAY, EXECUTIVE VICE PRESIDENT AND CHIEF OPERATING
OFFICER, OR BETH SAVAGE, CHIEF FINANCIAL OFFICER AND TREASURER (614 492-5600.
MEDIA CALLS: MELODYE DEMASTUS, MELROSE CONSULTING (614) 529-4497.
INVESTOR CALLS: MELODYE DEMASTUS, MELROSE CONSULTING (614) 771-0860.
