UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 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 Number 0-24860
PIERCING PAGODA, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 23-1894725
(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) Number)
3910 Adler Place
Bethlehem, PA 18017
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (610) 691-0437
N/A
(Former Name, Former Address and Former Fiscal
Year, if Changed Since Last Report.)
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 [ ]
The number of shares outstanding of the registrant's common stock is
9,195,389 (as of August 11, 2000)
<PAGE>
PIERCING PAGODA, INC.
INDEX
PAGE
PART I - FINANCIAL INFORMATION NUMBER
Item 1. Financial Statements
Consolidated balance sheets as of
June 30, 2000 (unaudited) and March 31, 2000 3
Consolidated statements of operations for the three
months
ended June 30, 2000 and 1999 (unaudited) 4
Consolidated statements of cash flows for the three
months ended June 30, 2000 and 1999 (unaudited) 5
Notes to consolidated financial statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
Item 3. Quantitative and Qualitative Disclosures About Market
Risk 15
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 16
Item 2. Changes in Securities and Use of Proceeds 16
Item 3. Defaults Upon Senior Securities 16
Item 4. Submission of Matters to a Vote of Security Holders 16
Item 5. Other Information 16
Item 6. Exhibits and Reports on Form 8-K 17
Signatures 18
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PIERCING PAGODA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<TABLE>
<CAPTION>
June 30, March 31,
2000 2000
------------ -------------
Assets (Unaudited)
Current assets
<S> <C> <C>
Cash $ 3,998 $ 1,137
Accounts receivable 2,545 2,909
Inventory 58,557 63,960
Deposits for inventory purchases 433 197
Prepaid expenses and other current assets 1,347 1,476
Deferred tax assets 705 992
------------ -------------
Total current assets 67,585 70,671
Property, fixtures and equipment, net 35,621 35,692
Goodwill, net 18,757 19,155
Other assets 1,705 1,775
------------ -------------
$ 123,668 $ 127,293
============ =============
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 4,843 $ 2,912
Current installments of long-term debt and revolving 11,449 17,639
line of credit
Income taxes payable 29 50
Accrued expenses and other current liabilities 12,415 12,234
------------ -------------
Total current liabilities 28,736 32,835
Long-term debt, less current installments 4,778 4,929
Deferred tax liabilities 4,143 4,144
Other liabilities 685 671
------------ -------------
Total liabilities 38,342 42,579
Commitments and contingencies
Stockholders' equity
Preferred stock, par value $.01 per share,
authorized 3,000,000 shares. None issued. - -
Common stock, par value $.01 per share, authorized
15,000,000 shares.
Issued 9,188,298 shares and 9,179,988 at June 30, 92 92
2000 and
March 31, 2000, respectively.
Additional paid-in capital 41,438 41,339
Treasury stock, at cost (3,191) (3,191)
Retained earnings 46,987 46,474
------------ -------------
Total stockholders' equity 85,326 84,714
------------ -------------
$ 123,668 $ 127,293
============ =============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
PIERCING PAGODA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
June 30,
-------------------
2000 1999
-------- ---------
<S> <C> <C>
Net sales $ 60,166 $ 58,154
Cost of goods sold and occupancy
expenses, (excluding depreciation on kiosks
and store fixtures) 33,328 32,665
-------- ---------
Gross profit 26,838 25,489
Selling, general and administrative
expenses, (including depreciation on kiosks
and store fixtures) 25,382 25,348
-------- ---------
Income from operations 1,456 141
Interest and other income 41 41
Interest expense 646 702
-------- ---------
Earnings (loss) before income taxes 851 (520)
Income tax expense (benefit) 338 (209)
-------- ---------
Net income (loss) $ 513 ($ 311)
======== =========
Basic earnings (loss) per share $ 0.06 ($0.03)
======== =========
Diluted earnings (loss) per share $ 0.06 ($0.03)
======== =========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
PIERCING PAGODA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
Three months ended
June 30,
-------------------------
2000 1999
------------ -----------
Cash flows from operating activities:
<S> <C> <C>
Net income (loss) $ 513 ($ 311)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization 2,125 1,983
Loss on disposal of property, fixtures and equipment 182 -
Other changes in other assets 42 20
Deferred income taxes 286 72
Change in operating assets and liabilities
net of effects of acquisitions:
Accounts receivable 364 166
Inventory 5,403 (158)
Deposits for inventory purchases (236) (1,455)
Prepaid expenses and other current assets 129 535
Prepaid income taxes - (211)
Accounts payable 1,931 681
Accrued expenses and other current liabilities 181 (1,631)
Income taxes payable (21) (125)
Other liabilities 14 (71)
------------ -----------
Net cash provided by (used in) operating activities 10,913 (505)
Cash flows from investing activities:
Additions to property, fixtures and equipment (1,765) (2,296)
Payments for purchase of businesses - (298)
Noncurrent deposits, net 9 (42)
------------ -----------
Net cash used in investing activities (1,756) (2,636)
Cash flows from financing activities:
Repayments of long-term debt (141) (146)
Revolving line of credit, net (6,200) 2,800
Loan fees paid (54) (13)
Net proceeds from issuance of common stock under 99 70
employee share plans
------------ -----------
Net cash provided by (used in) financing activities (6,296) 2,711
------------ -----------
Net increase (decrease) in cash 2,861 (430)
Cash at beginning of period 1,137 4,068
------------ -----------
Cash at end of period $3,998 $ 3,638
============ ===========
</TABLE>
<PAGE>
PIERCING PAGODA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(In thousands)
(Unaudited)
<TABLE>
Three months ended
June 30,
-------------------------
2000 1999
------------ -----------
Supplemental disclosures of cash flow information: Cash paid during the period
for:
<S> <C> <C>
Interest $ 647 $ 703
============ ===========
Income taxes, net $ 73 $ 55
============ ===========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 Summary of significant accounting policies
The accompanying consolidated financial statements of Piercing Pagoda, Inc.
and subsidiaries (the "Company") have been prepared in accordance with the
instructions to Form 10-Q and do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. These consolidated financial statements include the
results of operations for Piercing Pagoda, Inc. and its wholly owned
subsidiaries. All intercompany transactions have been eliminated in
consolidation. These consolidated financial statements should be read in
conjunction with the Company's consolidated financial statements and notes
thereto for the year ended March 31, 2000. The financial information included
herein is unaudited; however, the information reflects all adjustments
(consisting solely of normal recurring adjustments) that are, in the opinion of
management, necessary for a fair presentation of the financial position, results
of operations and cash flows for the interim periods.
Operating results for the three-month period ended June 30, 2000 are not
necessarily indicative of the results that may be expected for the entire fiscal
year.
Note 2 Earnings Per Share
The following weighted average number of shares of common stock were used
in the calculations for earnings (loss) per share. The diluted weighted average
number of shares includes the net shares that would be issued upon the exercise
of outstanding stock options, using the treasury stock method.
<TABLE>
<CAPTION>
2000 1999
--------- ---------
<S> <C> <C>
Basic 8,930,866 9,143,105
Dilutive effect of outstanding
stock options, using the
treasury stock method (1) 220,509 -
--------- ---------
Diluted 9,151,375 9,143,105
========= =========
</TABLE>
(1) For the period ended June 30, 1999, the dilutive effect of outstanding
stock options was not considered in the calculation of diluted loss per share
because their effects were anti-dilutive.
Basic earnings (loss) per share is computed by dividing income available to
common stockholders by the weighted average number of common shares outstanding
during the period. Diluted earnings per share is computed by dividing income
available to common stockholders by the weighted average number of common shares
outstanding during the period increased to include the number of additional
common shares that would have been outstanding if the dilutive potential common
shares had been issued.
<PAGE>
Note 3 Property, Fixtures and Equipment
A summary of major classes of property, fixtures and equipment follows (in
thousands):
<TABLE>
<CAPTION>
June 30, March 31,
2000 2000
---------------- ------------
<S> <C> <C>
Land $ 688 $ 688
Furniture and fixtures 6,725 6,416
Kiosks 34,344 33,744
Buildings and improvements 7,335 7,327
Computer equipment, software and other equipment 9,692 12,988
---------------- ------------
58,784 61,163
Less accumulated depreciation and amortization 23,163 25,471
---------------- ------------
$ 35,621 $ 35,692
================ ============
</TABLE>
Note 4 Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities are summarized as follows
(in thousands):
<TABLE>
<CAPTION>
June 30, March 31,
2000 2000
---------------- ------------
<S> <C> <C>
Accrued payroll, vacation and related taxes $ 5,596 $ 5,083
Sales tax payable 887 834
Accrued rents payable 974 1,129
Liability under jewelry club program 590 540
Liability under product guarantee program 801 901
Accrued store closure costs 486 493
Other accrued expenses 3,081 3,254
---------------- ------------
$ 12,415 $ 12,234
================ ============
</TABLE>
During the period ended June 30, 2000, the Company disposed of two kiosks
during the period for which disposal costs had previously been accrued at March
31, 2000. Accordingly, the Company's accrual for store closure costs was reduced
to reflect this activity.
<PAGE>
Note 5 Revolving Line of Credit
On July 24, 2000, the Company entered into a new revolving credit and gold
consignment facility with a syndicate of banks led by its primary lender. This
new agreement provides for maximum borrowings of $115.0 million through a
combination of cash advances, standby letters of credit (which may not exceed
$10.0 million) and gold consignment (which may not exceed $80.0 million.)
Amounts borrowed under the new facility generally accrue interest at the higher
of (i) the prime rate of the Company's primary lender or (ii) a rate based on
overnight federal funds transactions with Federal Reserve System members plus 50
basis points. However, the Company may elect to have all or any portion of the
outstanding balance under the facility accrue interest at a rate based on one,
two, three or six month LIBOR plus a LIBOR Margin of 150 to 187.5 basis points.
The LIBOR margin is determined quarterly based upon the Company's Fixed Charge
Coverage Ratio as defined in the agreement. Fees are paid on letters of credit
based on amounts outstanding at an annual rate equivalent to the current LIBOR
Margin.
The new loan agreement contains various covenants which, among other
things, limit certain corporate acts of the Company such as mergers and
acquisitions; requires the Company to maintain certain minimum financial ratios,
place limitations on the Company's ability to incur additional debt or grant
security interests in its assets and restricts the redemption, purchase or
retirement of its capital stock. The Company was in compliance with these
covenants as of June 30, 2000.
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Background
The Company's consolidated net sales are comprised solely of sales
generated by the Company's stores. Cost of goods sold and occupancy expenses
include the cost of merchandise, rent and occupancy, and the cost of preparing
merchandise for sale. Selling, general and administrative expenses include store
and supervisory payroll, corporate overhead and non-occupancy store expenses
including depreciation of kiosks and amortization of goodwill.
Results of operations
Three months ended June 30, 2000 and 1999
Consolidated net sales increased $2.0 million, or 3%, from $58.2 million
for the three months ended June 30, 1999 to $60.2 million for the three months
ended June 30, 2000. This increase was due primarily to a $1.1 million, or 2%,
increase in comparable store net sales. There were a total of 939 stores open at
June 30, 2000 compared to 934 at June 30, 1999, an increase of 1%. During the
three months ended June 30, 2000, the Company opened 11 stores and closed 12.
The average jewelry units sold per comparable store during the quarter decreased
4% to 2,400 for the three months ended June 30, 2000 compared to 2,500 at June
30, 1999. The average price per jewelry unit sold increased to $26.70 for the
three months ended June 30, 2000 compared to $25.05 for the three months ended
June 30, 1999. The decrease in average jewelry units sold and in the increase in
average price per jewelry unit sold reflect the introduction of new merchandise
styles with higher gross profit margins and a reduction in the level of
promotional activity in the current period compared to the same period last
year.
Gross profit increased $1.3 million, or 5%, from $25.5 million for the
three months ended June 30, 1999 to $26.8 million for the three months ended
June 30, 2000. The Company's gross profit margin increased from 43.8% for the
three months ended June 30, 1999 to 44.6% for the three months ended June 30,
2000. This increase primarily reflects a change in the Company's promotional
strategy and the introduction of new merchandise with higher gross profit
margins partially offset by higher rent and occupancy costs as a percentage of
net sales. Beginning in the last fiscal year, the Company implemented certain
changes to its merchandise selection that had a favorable impact on sales and
gross profit margin. These changes include the introduction of new 10k and 14k
gold merchandise styles with higher gross profit margins and increasing the
selection of non-gold merchandise. In addition, the Company has modified its
promotional strategy, reducing the amount of storewide promotions in favor of
promotions on selected merchandise. As a result, a greater amount of sales were
achieved at a higher average unit price and produced better gross profit dollars
and margin. Rent increased slightly as a percentage of net sales reflecting
increases in rent and occupancy costs that were only partially offset by
increases in net sales.
<PAGE>
Selling, general and administrative expenses were virtually unchanged at
$25.3 million for the three months ended June 30, 1999 from $25.4 million for
the three months ended June 30, 2000. As a percentage of net sales, selling,
general and administrative expenses decreased from 43.6% for the three months
ended June 30, 1999 to 42.2% for the three months ended June 30, 2000. The
change in selling, general and administrative expenses primarily reflects
reductions in store supervisory payroll and related expenses, offset by
increases in corporate overhead, depreciation and amortization. In the fourth
quarter of fiscal 2000, the Company implemented a reorganization of its field
supervisory staff, significantly reducing the number of store supervisors. This
reduction is reflected in lower supervisor payroll and related expenses in the
three months ended June 2000 compared to the same period last year. The
Company's corporate overhead expense increased due to higher marketing costs
associated with the Company's revised "Jewelry Club" program, costs incurred to
close stores that were not previously accrued and higher payroll for expansion
in the Company's human resource and training functions. Depreciation and
amortization expense increased 5% to $2.1 million in the three months ended June
30, 2000 from $2.0 million in the three months ended June 30, 1999 due primarily
to capital expenditures for new stores and the upgrading of kiosks in existing
locations.
Interest expense decreased $56,000, or 8.0%, from $702,000 for the three
months ended June 30, 1999 to $646,000 for the three months ended June 30, 2000,
and as a percentage of net sales decreased from 1.2% for the three months ended
June 30, 1999 to 1.1% for the three months ended June 30, 2000. The decrease in
interest expense reflects lower average balances on the Company's revolving line
of credit agreement and lower average gold consignment rates, offset by higher
average interest charged on borrowings under the Company's revolving line of
credit.
As a result of the foregoing, the Company's net income increased from a
loss of $311,000 for the three months ended June 30, 1999 to net income of
$513,000 for the three months ended June 30, 2000.
<PAGE>
Liquidity and capital resources
The Company's primary ongoing short-term capital requirements have been to
fund an increase in inventory and to fund capital expenditures and working
capital (mostly inventory) for new and acquired stores. The Company's long-term
liquidity requirements relate principally to the maturity of its long-term debt
in July of 2003, operating lease commitments and store expansion. The Company's
primary sources of liquidity have been funds provided from operations, a gold
consignment program and a revolving credit facility. The Company's working
capital increased to $38.8 million at June 30, 2000 from $37.8 million at March
31, 2000. At June 30, 2000, the Company had outstanding borrowings of $11.0
million under its revolving line of credit and $5.2 million of long-term debt
outstanding, including $449,000 classified as a current liability. In addition,
the Company had consigned 140,209 ounces of gold under its gold consignment
program valued at approximately $40.4 million.
Net cash provided by operating activities was $10.9 million for the three
months ended June 30, 2000 compared to net cash used in operating activities of
$505,000 for the same period in the prior year. Net cash provided by operating
activities primarily reflects net earnings plus depreciation and amortization, a
decrease in inventory, and other changes in operating assets and liabilities.
Net cash used in operating activities in the quarter ended June 30, 1999
primarily reflects increases in inventory deposits made to secure production of
holiday merchandise and reductions in accrued expenses, partially offset by
depreciation and amortization.
Net cash used in investing activities was $1.8 million during the three
months ended June 30, 2000 compared to $2.6 million during the three months
ended June 30, 1999. Net cash used in investing activities primarily reflects
the addition of property, fixtures and equipment in connection with the opening
of new stores, and the renovation of existing stores.
Net cash used in financing activities was $6.3 million for the three months
ended June 30, 2000 versus cash provided by financing activities of $2.7 million
during the three months ended June 30, 1999. Net cash used in financing
activities during the three months ended June 30, 2000 primarily reflects
payments on the Company's then current revolving line of credit as well as
payments on long-term debt. Net cash provided by financing activities during the
three months ended June 30, 1999 primarily reflects increased borrowings under
the Company's existing line of credit to fund operations.
The Company's revolving credit facility in existence at June 30, 2000
provided for maximum borrowings of $105.0 million through a combination of cash
advances (which may not exceed $65 million) and letters of credit (which may not
exceed $70 million) to support the Company's gold consignment financing program.
At June 30, 2000, the Company had $49.9 million available to be borrowed under
its then existing revolving credit facility and was in compliance with covenants
contained in the agreement.
<PAGE>
On July 24, 2000, the Company entered into a new revolving credit and gold
consignment facility with a syndicate of banks led by its primary lender. This
new agreement provides for maximum borrowings of $115.0 million through a
combination of cash advances, standby letters of credit (which may not exceed
$10.0 million) and gold consignment (which may not exceed $80.0 million.)
Amounts borrowed under the new facility generally accrue interest at the higher
of (i) the prime rate of the Company's primary lender or (ii) a rate based on
overnight federal funds transactions with Federal Reserve System members plus 50
basis points. However, the Company may elect to have all or any portion of the
outstanding balance under the facility accrue interest at a rate based on one,
two, three or six month LIBOR plus a LIBOR Margin of 150 to 187.5 basis points.
The LIBOR margin is determined quarterly based upon the Company's Fixed Charge
Coverage Ratio as defined in the agreement. Fees are paid on letters of credit
based on amounts outstanding at an annual rate equivalent to the current LIBOR
Margin.
The Company believes that the expected cash flows from operations, its gold
consignment program and bank borrowings will be sufficient to fund the Company's
currently anticipated capital and liquidity needs for the foreseeable future.
<PAGE>
Year 2000 compliance
The information set forth in this section is a Year 2000 Readiness
Disclosure as defined in the Year 2000 Information Readiness and Disclosure Act.
The Company successfully transitioned into the Year 2000 (Y2K) without any
major disruption of systems or business operations. No significant Y2K issues
were experienced relative to the Company's merchandise and other third party
vendors. Accordingly, it has not been necessary to invoke any of the Company's
contingency plans, which were developed for use in the event of supplier
delivery delay or failure, or critical system or support equipment interruption
or failure. The Company will continue to monitor its computer applications and
those of its suppliers and vendors throughout the year to ensure that any latent
Y2K matters that may arise are addressed promptly.
Expenditures for Y2K efforts have been funded through operating cash flows.
Any expenses incurred in the current fiscal year did not have a material adverse
effect on the Company's financial condition or operating results. The Company
does not believe that the Y2K issue presents a material risk to the Company's
future results of operations, liquidity or capital resources.
Seasonality
The Company's business is highly seasonal. Due to the impact of the
year-end holiday shopping season, the Company experiences a substantial portion
of its annual net sales and profitability in its third fiscal quarter (ending
December 31st). The Company has generally experienced lower net sales in each of
the first, second and fourth quarters and lower net income or net losses in each
of those quarters.
The Company's results of operations may fluctuate significantly from
quarter to quarter as a result of a variety of factors, including fluctuations
in the price of gold, the amount and timing of acquisitions and new store
openings, the integration of recently acquired and newly opened stores into the
operations of the Company, the timing of promotions, and changes in national and
regional economic conditions.
<PAGE>
Forward-looking statements
The Private Securities Litigation Reform Act of 1995 provides a safe harbor
for forward-looking statements. A number of the matters and subject areas
discussed in "Management's Discussion and Analysis of Financial Condition and
Results of Operations," are not limited to historical or current facts and deal
with potential future circumstances and developments. Prospective investors are
cautioned that such forward-looking statements are only predictions and that
actual events or results may differ materially. A variety of factors could cause
the Company's actual results to differ materially from the expected results
expressed in the Company's forward-looking statements, including, without
limitation: the Company's ability to secure suitable store sites on a timely
basis and on satisfactory terms; the Company's ability to hire, train and retain
qualified personnel; the availability of adequate capital resources and the
successful integration of new stores into the Company's existing operations; the
Company's ability to successfully implement and improve management information
systems, procedures and controls on a timely basis and in such a manner as is
necessary to accommodate the increased number of transactions and customers and
the increased size of the Company's operations; fluctuations in quarterly net
sales, and, in particular, third quarter net sales; fluctuations in gold prices;
competitive conditions; economic conditions affecting disposable consumer
income, such as employment, business conditions, interest rates and taxation, as
well as trends with respect to mall shopping generally and the ability of mall
anchor tenants and other attractions to generate customer traffic in the
vicinity of the Company's stores; and the possibility of the enactment of
legislation, or the modification of existing or pending legislation, in
jurisdictions in which the Company operates, that would adversely affect the
Company's ear piercing or other activities.
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There were no material changes in market risk exposures that affect the
quantitative and qualitative disclosures presented as of March 31, 2000.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material legal proceedings against the Company.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
On August 11, 2000, Zale Corporation ("Zale") and the Company entered into
a definitive agreement for Zale to acquire the Company.
Under the terms of the agreement, a subsidiary of Zale will commence a
tender offer for all of the outstanding shares of the Company common stock at
$21.50 per share in cash. The tender offer will be subject to at least a
majority of the outstanding the Company shares, on a fully diluted basis, being
validly tendered and not withdrawn. The tender offer will also be subject to
regulatory approvals and other customary conditions.
Copies of the Agreement and Plan of Merger, Tender and Voting Agreement and
Restrictive Covenant Agreement are filed as exhibits to this Form 10-Q.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
10.64 Agreement and Plan of Merger dated August 11, 2000.
10.65 Tender and Voting Agreement dated August 11, 2000.
10.66 Restrictive Covenant Agreement dated August 1, 2000.
27 Financial Data Schedule.
b) Reports on Form 8-K
During the quarter ended June 30, 2000, no reports on Form 8-K were
filed.
<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.
PIERCING PAGODA, INC.
(Registrant)
Date: August 11, 2000 /s/ John F. Eureyecko
John F. Eureyecko
President,
Chief Operating Officer
(Principal Financial Officer)
Date: August 11, 2000 /s/ Brandon R. Lehman
Brandon R. Lehman
Treasurer
(Principal Accounting Officer)
<PAGE>
INDEX TO EXHIBITS
Sequentially
Exhibit Number Numbered
Page
10.64 Agreement and Plan of Merger dated August 11, 2000. 20
10.65 Tender and Voting Agreement dated August 11, 2000. 67
10.66 Restrictive Covenant Agreement dated August 11, 2000. 90
27 Financial Data Schedule 94
