SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
þ Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
for the quarterly period ended December 28, 2002
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 of incorporation or organization) |
(I. R. S. employer identification no.) | |
| 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 4,401,595 shares of Common Stock issued and outstanding as of February 10, 2003.
Index
| Page | ||||
| Part I: Financial Information |
||||
| Item 1. |
Financial Statements |
|||
| Consolidated Balance Sheets (Unaudited) March 30, 2002 and December 28, 2002 |
4 | |||
| 6 | ||||
| 7 | ||||
| 8 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
12 | ||
| Item 4. |
16 | |||
| Part II: Other Information |
||||
| 17 | ||||
| 18 | ||||
| 19 | ||||
2
PART I: FINANCIAL INFORMATION
Item 1: Financial Statements
3
Boston Acoustics, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
Assets
| March 30, 2002 |
December 28, 2002 | |||||
| Current Assets: |
||||||
| Cash and cash equivalents |
$ |
5,134,558 |
$ |
6,044,018 | ||
| Accounts receivable, net of allowance for doubtful accounts of approximately $366,000 and $381,000 at March 30, 2002 and December 28, 2002, respectively |
|
10,830,538 |
|
11,117,858 | ||
| Inventories |
|
14,370,308 |
|
12,619,557 | ||
| Deferred income taxes |
|
1,724,000 |
|
1,724,000 | ||
| Prepaid expenses and other current assets |
|
1,010,792 |
|
900,384 | ||
| Total current assets |
|
33,070,196 |
|
32,405,817 | ||
| Property and Equipment, at Cost: |
||||||
| Machinery and equipment |
|
16,833,179 |
|
16,299,897 | ||
| Building and improvements |
|
8,795,567 |
|
8,795,567 | ||
| Office equipment and furniture |
|
5,067,810 |
|
5,384,246 | ||
| Land |
|
1,815,755 |
|
1,815,755 | ||
| Motor vehicles |
|
255,956 |
|
290,167 | ||
|
|
32,768,267 |
|
32,585,632 | |||
| Less-accumulated depreciation and amortization |
|
18,848,303 |
|
20,168,782 | ||
|
|
13,919,964 |
|
12,416,850 | |||
| Other Assets, Net |
|
1,428,286 |
|
1,426,593 | ||
| $ |
48,418,446 |
$ |
46,249,260 | |||
The accompanying notes are an integral part of these consolidated financial statements.
4
Boston Acoustics, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
Liabilities and Shareholders’ Equity
| March 30, 2002 |
December 28, 2002 |
|||||||
| Current Liabilities: |
||||||||
| Accounts payable |
$ |
5,230,684 |
|
$ |
7,778,681 |
| ||
| Accrued payroll and payroll-related expenses |
|
1,185,529 |
|
|
877,738 |
| ||
| Dividends payable |
|
390,626 |
|
|
374,136 |
| ||
| Other accrued expenses |
|
1,095,369 |
|
|
1,321,112 |
| ||
| Current maturity of line of credit |
|
2,500,000 |
|
|
— |
| ||
| Total current liabilities |
|
10,402,208 |
|
|
10,351,667 |
| ||
| Minority Interest in Joint Venture |
|
18,265 |
|
|
43,519 |
| ||
| Shareholders’ Equity: |
||||||||
| Common stock, $.01 par value |
||||||||
| Authorized—8,000,000 shares |
||||||||
| Issued—5,100,314 shares |
|
51,003 |
|
|
51,003 |
| ||
| Additional paid-in capital |
|
1,191,988 |
|
|
1,191,988 |
| ||
| Subscriptions receivable |
|
(272,917 |
) |
|
(272,917 |
) | ||
| Retained earnings |
|
42,648,558 |
|
|
42,933,509 |
| ||
|
|
43,618,632 |
|
|
43,903,583 |
| |||
| Less-Treasury stock, 504,700 and 698,700 shares, at cost, at March 30, 2002 and December 28, 2002, respectively |
|
5,620,659 |
|
|
8,049,509 |
| ||
| Total shareholders’ equity |
|
37,997,973 |
|
|
35,854,074 |
| ||
| $ |
48,418,446 |
|
$ |
46,249,260 |
| |||
The accompanying notes are an integral part of these consolidated financial statements.
5
Boston Acoustics, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
| Three Months Ended |
Nine Months Ended |
|||||||||||||||
| December 29, 2001 |
December 28, 2002 |
December 29, 2001 |
December 28, 2002 |
|||||||||||||
| Net sales |
$ |
23,205,624 |
|
$ |
20,463,831 |
|
$ |
64,715,137 |
|
$ |
57,248,724 |
| ||||
| Cost of goods sold |
|
15,322,323 |
|
|
13,868,471 |
|
|
44,922,739 |
|
|
39,143,179 |
| ||||
| Gross profit |
|
7,883,301 |
|
|
6,595,360 |
|
|
19,792,398 |
|
|
18,105,545 |
| ||||
| Selling and marketing expenses |
|
2,766,884 |
|
|
2,757,206 |
|
|
7,942,071 |
|
|
8,013,754 |
| ||||
| General and administrative expenses |
|
1,308,806 |
|
|
1,297,776 |
|
|
3,637,693 |
|
|
3,788,377 |
| ||||
| Engineering and development expenses |
|
1,293,566 |
|
|
1,646,131 |
|
|
3,850,823 |
|
|
4,563,581 |
| ||||
| Total operating expenses |
|
5,369,256 |
|
|
5,701,113 |
|
|
15,430,587 |
|
|
16,365,712 |
| ||||
| Income from operations |
|
2,514,045 |
|
|
894,247 |
|
|
4,361,811 |
|
|
1,739,833 |
| ||||
| Interest income |
|
36,339 |
|
|
27,366 |
|
|
129,516 |
|
|
86,103 |
| ||||
| Interest expense |
|
(35,722 |
) |
|
(9,674 |
) |
|
(281,489 |
) |
|
(41,314 |
) | ||||
| Other income (expense) |
|
(92,851 |
) |
|
114,239 |
|
|
(142,118 |
) |
|
267,226 |
| ||||
| Income before provision for income taxes |
|
2,421,811 |
|
|
1,026,178 |
|
|
4,067,720 |
|
|
2,051,848 |
| ||||
| Provision for income taxes |
|
906,000 |
|
|
237,000 |
|
|
1,645,000 |
|
|
628,000 |
| ||||
| Net income |
$ |
1,515,811 |
|
$ |
789,178 |
|
$ |
2,422,720 |
|
$ |
1,423,848 |
| ||||
| Net income per share: |
||||||||||||||||
| Basic |
$ |
.32 |
|
$ |
.18 |
|
$ |
.50 |
|
$ |
.31 |
| ||||
| Diluted |
$ |
.32 |
|
$ |
.18 |
|
$ |
.50 |
|
$ |
.31 |
| ||||
| Weighted average common shares outstanding (Note 3): |
||||||||||||||||
| Basic |
|
4,674,124 |
|
|
4,401,595 |
|
|
4,834,463 |
|
|
4,516,679 |
| ||||
| Diluted |
|
4,679,669 |
|
|
4,478,779 |
|
||||||||||