SEC FILE NUMBER
0-6664
FORM 12b-25 U.S. SECURITES AND EXCHANGE COMMISSION CUSIP NUMBER
WASHINGTON, D.C. 20549 482724200
NOTIFICATION OF LATE FILING
(Check One)
_X_ Form 10-K ______ Form 11-K ______ Form 20-F ______ Form 10-Q
For Period Ended: June 30, 1995
If the notification relates to a portion of the filing checked above, identify
the Item(s) to which the notification relates: _________________________________
PART I - REGISTRANT INFORMATION
Full Name Of Registrant
K-tel International, Inc.
Former Name If Applicable
Address of Principal Executive Office (Street and Number)
2605 Fernbrook Lane North
City, State and Zip Code
Minneapolis, Minnesota 55447-4736
PART II - RULES 12b-25 (B) AND (C)
If the subject report could not be filed without unreasonable effort or
expense and the registrant seeks relief pursuant to Rule 12b-25(b), the
following should be completed. (Check box if appropriate)
(a) The reasons described in reasonable detail in Part III on this form
could not be eliminated without unreasonable effort or expense;
(b) The Subject annual report/portion thereof will be filed on or before
[X] the fifteenth calendar day following the prescribed due date; or the
subject quarterly report/portion thereof will be filed on or before
the fifth calendar day following the prescribed due date; and
(c) The accountant's statement or other exhibit required by Rule 12b-25(c)
has been attached if applicable.
PART III - NARRATIVE
State below in reasonable detail the reasons why the Form 10-K, 20-F or
10-Q, or portion thereof, could not be filed within the prescribed time
period.
Financial information from material foreign subsidiaries for the year ended
June 30, 1995 were not received in sufficient time to consolidate the
financial results of the Company and file the 10-K by the prescribed date.
(Attached Extra Sheets if Needed)
PART IV - OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification
Mark Dixon 612 559-6820
(NAME) (AREA CODE) (TELEPHONE NUMBER)
(2) Have all other periodic reports required
(under Section 13 or 15(d) of the Securities
Exchange Act of 1934) during the preceding 12 _X_ YES ___ NO
months (or for such shorter period that the
registrant was required to file such
reports) been filed? If answer is no,
identify report(s)
(3) Is it anticipated that any significant change
in results of operations from the
corresponding period for the last fiscal year
will be reflected by the earnings statements
to be included in the subject report or
portion thereof?
If so, attach an explanation of the anticipated _X_ YES ___ NO
change, both narratively and quantitatively,
and, if appropriate, state the reasons why a
reasonable estimate of the results can not be
made.
K-tel International, Inc.
(NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
has caused this notification to be signed on its behalf by the undersigned
thereunto duly authorized.
Date 9-26-95 By /s/ Mark Dixon
ATTENTION
Intentional misstatements or omissions of fact constitute Federal Criminal
Violations (See 18 U.S.C. 1001)
ATTACHMENT TO FORM 12b-25 K-tel International, Inc.
For the Period Ended: June 30, 1995
PART IV - OTHER INFORMATION
(3) The Company experienced operating losses of $2,006,000 and $1,835,000
for the year and quarter ended June 30, 1995, respectively, compared
to operating income of $223,000 for the year ended June 30, 1995 and
an operating loss of $1,152,000 for the fourth quarter ended June 30,
1994.
Operating income declined in North America for the year ended June 30,
1995 compared to the prior year comparable period as a result of
increases in selling, general and administrative expenses and product
cost and some unsuccessful advertising promotions in the second
quarter of the fiscal year.
Operating losses in Europe for the year ended June 30, 1995 increased
in comparison to the prior year despite very successful entertainment
product operations in Finland and the closedown of operations in a
French subsidiary at the end of fiscal 1994 (that had significant
prior year operating losses) and the discontinuance of unprofitable
consumer convenience product lines in the United Kingdom at the end of
fiscal 1994. This overall increase in European operating losses was
due to continued losses from the Company's German and Spanish entities
and the restructure/closedown of those operations as discussed below.
Selling, general and administrative expenses for the year ended June
30, 1995 are higher than the previous year due to North American
overhead additions necessary to support recent sales growth and
planned future sales growth of retail sales in both entertainment and
consumer convenience product lines. European selling, general and
administrative expenses for the year ended June 30, 1995 are higher in
absolute dollars but lower as a percentage of net sales than the
previous year due primarily to more television direct response
promotions in the current year which produced higher sales revenues
but also resulted in more variable selling and shipping expenses.
European cost of goods sold increased over the previous year due
mainly to the change in product lines in the United Kingdom to a
predominance of budget priced entertainment products (mainly music
products) compared to mainly consumer convenience products sold in the
prior year comparable period. Also in Europe, the Company incurred
some inventory write downs to realizable value as part of an overall
restructuring/downsizing effort in Germany and the closing down of the
Spanish entity. In North America, cost of goods sold increased due
mainly to the sale of some higher priced, lower margin consumer
convenience product items and a product mix of slightly higher cost
music product.
Restructure/closedown charges of $652,000 resulted from fourth quarter
decisions to close loss operations in Spain and to
restructure/downsize loss operations in Germany. Throughout fiscal
year 1995, the Company evaluated various alternatives to improve
operating performance or eliminate future potential negative results
from the German and Spanish operations. Investment banking assistance
was retained to identify strategic partners or buyers for each company
but no suitable agreements were reached resulting in the restructuring
and closing down of the entities. In the fiscal fourth quarter,
management made firm commitments and developed and began
implementation of a formal plan to wind down the operations in Spain
and restructure/downsize the operations in Germany by eliminating
short form (30, 60, 90 second spot television commercials) direct
response consumer convenience product marketing (which was previously
a significant part of the German operations) and downsizing the
current distribution facility to approximately one third of the
current size and cost. The resulting smaller German operation will
focus on short and long form (infomercials, generally 30 minute
commercials) direct response marketing of music products.