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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported): June 5, 1998
NATURAL WONDERS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 0-20035 77-0141610
(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification No.)
4209 TECHNOLOGY DRIVE, FREMONT, CALIFORNIA 94538
(Address of principal executive offices)
(Zip code)
510-252-9600
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS
See the following press release, dated June 15, 1998, announcing the
settlement of pending litigation and adjustment of previously reported First
Quarter Results.
FOR IMMEDIATE RELEASE
CONTACT: Peter G. Hanelt
Chief Executive Officer/CFO
Natural Wonders, Inc.
(510) 252-6607
NATURAL WONDERS INC. ANNOUNCES
------------------------------
THE SETTLEMENT OF PENDING LITIGATION AND
----------------------------------------
ADJUSTMENT OF PREVIOUSLY REPORTED FIRST QUARTER RESULTS
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Fremont, CA June 15, 1998 -- Peter G. Hanelt, Chief Executive
Officer/Chief Financial Officer, Natural Wonders, Inc. (NASDAQ:NATW), today
announced that Natural Wonders, Inc. reached a negotiated settlement
effective June 5, 1998, of the patent infringement claim disclosed in the
Company's annual report and Form 10K as of
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fiscal year end January 31, 1998. The claim involved the sale of product
primarily in the company's fiscal years of 1996 and 1997 ending January 28,
1997 and January 31, 1998 respectively. The current year impact of the
settlement, including the cash settlement paid, legal expenses and reserves,
net of amounts previously accrued, is approximately $525,000 or $0.04 per
share. As a result of the settlement, the Company has adjusted its first
quarter earnings as previously reported on May 14, 1998. The adjusted net
loss for its first fiscal quarter ended May 2, 1998, is $4,576,000 or $.57
per share, previously reported as $4,246,000 or $.53 per share.
The matters discussed in this news release contain forward-looking
statements that involve risks and uncertainties, including changes in
consumer demands and preferences, competition from other retailers and
uncertainties generally associated with gift retailing. The historical
results achieved are not necessarily indicative of future prospects of the
Company.
# # #
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NATURAL WONDERS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
QUARTER ENDED
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May 2, May 3,
1998 1997
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<S> <C> <C>
Net sales $23,265 $22,236
Cost of goods sold and
store occupancy expenses 19,438 16,419
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Gross margin 3,827 5,817
Selling, general and administrative expenses 11,048 9,173
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Operating loss (7,221) (3,356)
Interest and other, net 43 86
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Loss before income taxes (7,264) (3,442)
Income taxes (2,688) (1,343)
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Net loss $(4,576) $(2,099)
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Net loss per share, basic and diluted: $ (0.57) $ (0.26)
Shares used in computing per share amounts,
basic and diluted: 8,072 7,988
Stores open at end of period 173 152
</TABLE>
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NATURAL WONDERS, INC.
CONDENSED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
<TABLE>
<CAPTION>
May 2, May 3,
1998 1997
-------- --------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 3,247 $ 3,471
Short-term investments 3,002 13,000
Merchandise inventories 27,072 23,098
Prepaid expenses and other current assets 7,798 6,374
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Total current assets 41,119 45,943
Property and Equipment:
Leasehold improvements 29,510 26,037
Property and equipment under capital lease 4,993 13,181
Furniture, fixtures and equipment 28,287 14,564
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62,790 53,782
Less accumulated depreciation and amortization (33,760) (27,871)
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29,030 25,911
Other Assets 2,216 1,778
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Total Assets $ 72,365 $ 73,632
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable $ 8,423 $ 6,876
Accrued compensation and related costs 2,184 1,961
Accrued liabilities 4,119 2,629
Income taxes payable 312 198
Current portion of capital lease obligations 755 1,603
Current portion of long-term debt 1,235 1,547
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Total current liabilities 17,028 14,814
Capital Lease Obligations 271 1,019
Long-Term Debt 211 1,769
Deferred Rent 3,723 3,971
Commitments and Contingencies
Stockholders' Equity:
Common Stock, par value $.0001; authorized
17,000,000 shares; outstanding
8,072,292 and 7,987,514 shares 1 1
Capital in excess of par value 34,434 34,252
Retained earnings 16,697 17,806
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Total stockholders' equity 51,132 52,059
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Total Liabilities and Stockholders' Equity $ 72,365 $ 73,632
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</TABLE>
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SIGNATURE
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.
Dated: June 16, 1998
NATURAL WONDERS, INC.
(Registrant)
/s/ Peter G. Hanelt
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Peter G. Hanelt,
Acting Chief Executive Officer,
Chief Financial Officer
(Signing on behalf of the registrant and
as Principal Accounting and Financial Officer)
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