FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): October 29, 1999
TOPS APPLIANCE CITY, INC.
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(Exact name of registrant as specified in its charter)
New Jersey 0-20498 22-3174554
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
45 Brunswick Avenue, Edison, New Jersey 08818
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code:(908) 248-2850
N/A
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(Former name or former address, if changed since last report)
Item 1. Changes in Control of Registrant
Not Applicable
Item 2. Acquisition or Disposition of Assets
Not Applicable
Item 3. Bankruptcy or Receivership
Not Applicable
Item 4. Changes in Registrant's Certifying Accountant
Not Applicable
Item 5. Other Events
The Registrant closed the transaction pursuant to which it
sold three of its store leases to Best Buy. Attached hereto
are the pro forma financials statements relating to such
closing.
Item 6. Resignations of Registrant's Directors
Not Applicable
Item 7. Financial Statements and Exhibits
(a) Financial statements of business acquired.
Not Applicable
(b) Pro forma financial information
Attached
(c) Exhibits
Not Applicable
Item 8. Change in Fiscal Year
Not Applicable
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 hereunto duly authorized.
TOPS APPLIANCE CITY, INC.
BY: /s/ Thomas L. Zambelli
---------------------------------
THOMAS L. ZAMBELLI
Executive Vice President
Dated: November 15, 1999
<PAGE>
PRO FORMA FINANCIAL INFORMATION
The following Unaudited Pro Forma Condensed Combined Statements of Operations
for the fiscal year ended December 29, 1998 and for the nine months ended
September 28, 1999, and the Unaudited Pro Forma Condensed Combined Balance Sheet
as of September 28, 1999 have been prepared to illustrate the estimated effects
of the sale of 3 store leases to Best Buy Co. Inc. The Unaudited Pro Forma
Combined Statements of Operations were prepared as if the transaction was
consummated at the beginning of the earliest fiscal year presented. The
Unaudited Pro Forma Condensed Combined Balance Sheet was prepared as if
the transaction was effective September 28, 1999. The Unaudited Pro Forma
Condensed Combined Financial Information does not purport to project the
financial position or results of operations of the Company as of any future
date or period.
The Unaudited Pro Forma Condensed Combined Statements of Operations includes the
historical sales and cost of sales of the Company adjusted for the effects of
the transaction. The unaudited pro forma financial information should be read in
conjunction with the Company's consolidated financial statements and the related
notes appearing in the Company's Annual Report on Form 10-K.
<PAGE>
12 MONTHS ENDED 12/29/98
-----------------------------------
Elimination
As of Stores As
Reported Sold (a) Adjusted
-------- ----------- --------
Net Sales & Service 290,359 $106,432 $183,927
Cost of Sales 226,642 81,841 144,801
------- -------- --------
Gross Margin 63,717 24,591 39,126
S G & A 59,485 15,670 43,815
------- -------- --------
Income from Operations 4,232 8,921 (4,689)
Interest Expense (6,282) - (6,282)
Loss in Equity of Joint Venture (385) - (385)
------- -------- --------
Income (loss) before taxes and (2,435) 8,921 (11,356)
extraordinary item
Income taxes - - -
------- -------- --------
Income (loss) before
extraordinary item (2,435) 8,921 (11,356)
Extraordinary item - gain
on debt extinguishment 1,309 - 1,309
------- -------- --------
Net income (loss) $(1,126) $ 8,921 $(10,047)
======= ======== =======
Loss per common share before
extraordinary item $ (0.26) $ (1.20)
Income per common share
attributable to
extraordinary item 0.14 0.14
------- --------
Net loss per common share $ (0.12) $ (1.06)
========= =========
Common Shares outstanding -
basic and diluted 9,491,593 9,491,593
========== ==========
<PAGE>
9 MONTHS ENDED 9/28/99
-----------------------------------
Elimination
As of Stores As
Reported Sold (a) Adjusted
-------- ----------- --------
Net Sales & Service $ 214,593 $72,847 $ 141,746
Cost of Sales 166,528 56,333 110,195
----------- ------- ----------
Gross Margin 48,065 16,514 31,551
S G & A 48,979 11,761 37,218
----------- ------- ----------
Income from Operations (914) 4,753 (5,667)
Interest Expense (4,574) - (4,574)
Loss in Equity of Joint Venture (254) - (254)
----------- ------- ----------
Income (loss) before taxes (5,742) 4,753 (10,495)
Income taxes - - -
----------- ------- ----------
Net income (loss) $ (5,742) $ 4,753 $ (10,495)
=========== ======= ==========
Net loss per common share $ (0.38) $ (0.70)
=========== ==========
Common shares outstanding - 14,973,936 14,973,936
basic =========== ==========
<PAGE>
AS OF 9/28/99
-----------------------------------
As Adjust As
Reported For Sale Adjusted
-------- -------- --------
ASSETS
Current Assets
Cash & cash equivalents $ 2,526 $ 9,450 (b) $ 11,976
Accounts receivable, net 3,672 3,672
Merchandise inventory 36,177 36,177
Prepaid expenses & other current
assets 1,801 1,801
-------- ------- --------
Total Current Assets 44,176 9,450 53,626
Property, equipment & leasehold
improvements, net 28,606 (3,469) (c) 25,137
Deferred taxes 2,958 2,958
Other assets 5,251 5,251
-------- ------- --------
Total Assets $ 80,991 $ 5,981 $ 86,972
======== ======= ========
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings 19,091 19,091
Accounts payable 7,131 7,131
Current portion of capital lease 124 124
Accrued liabilities & taxes payable 1,313 1,313
Customer deposits 2,864 2,864
Deferred taxes 2,958 2,958
-------- ------- --------
Total Current Liabilities 33,481 - 33,481
Long-term debt 20,368 20,368
Capital lease, net of current
portion 15,887 15,887
Deferred rent 2,709 (493) (d) 2,216
Other liabilities 696 696
Shareholders' equity 7,850 6,474 (e) 14,324
-------- ------- --------
Total Liabilities &
Shareholders' Equity $ 80,991 $ 5,981 $ 86,972
======== ======= ========
<PAGE>
Notes
a) Represents the full operation of the store sites sold. Although certain
product lines will continue to be sold at replacement locations, these have not
been considered in the presentation. Additionally, the effect of
eliminating certain overhead and other administrative costs as a result of this
sale has not been considered.
b) Represents the net cash proceeds of the transaction, after accounting for all
estimated costs to be borne by the Company.
c) Represents the net book value of assets to be disposed as part of the sale of
the store leases.
d) Represents elimination of the accumulated liability of scheduled rent
increases at the sold sites which have been accounted for on a straight-line
basis.
e) Represents the estimated net gain resulting from the transaction, after
accounting for all components affecting shareholders' equity.
