- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
for the quarterly period ended September 29, 2001
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 (I.R.S. employer
of incorporation or organization) 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 4,693,095 shares of Common Stock issued and outstanding as of
November 9, 2001.
- --------------------------------------------------------------------------------
Boston Acoustics, Inc.
Index
-----
Page
----
Part I: Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets (Unaudited)
March 31, 2001 and September 29, 2001 4
Consolidated Statements of Income (Unaudited)
Three months and Six months ended September 30, 2000
and September 29, 2001 6
Consolidated Statements of Cash Flows (Unaudited)
Six months ended September 30, 2000 and
September 29, 2001 7
Notes to Unaudited Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 12
Part II: Other Information
Items 1 through 6 15
Signatures 16
2
PART I: FINANCIAL INFORMATION
Item 1: Financial Statements
3
Boston Acoustics, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
Assets
------
March 31, 2001 September 29, 2001
-------------- ------------------
Current Assets:
Cash and cash equivalents $ 2,785,846 $ 5,391,963
Accounts receivable, net of reserves of
approximately $385,000 and $420,000 at
March 31 and September 29, 2001, respectively 11,426,411 11,161,885
Inventories 24,622,417 15,858,062
Deferred income taxes 2,044,000 2,044,000
Prepaid expenses and other current assets 747,844 747,122
----------- -----------
Total current assets 41,626,518 35,203,032
----------- -----------
Property and Equipment, at cost:
Machinery and equipment 15,132,205 15,437,741
Building and improvements 8,816,515 8,834,928
Office equipment and furniture 4,907,967 5,037,912
Land 1,815,755 1,815,755
Motor vehicles 253,164 277,405
----------- -----------
30,925,606 31,403,741
Less-accumulated depreciation
and amortization 15,533,147 16,890,894
----------- -----------
15,392,459 14,512,847
----------- -----------
Other Assets, net 1,012,671 1,039,778
----------- -----------
$58,031,648 $50,755,657
=========== ===========
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 31, 2001 September 29, 2001
--------------- -------------------
Current Liabilities:
Accounts payable $ 2,743,371 $ 4,482,886
Accrued payroll and payroll-
related expenses 1,779,942 1,816,754
Dividends payable 418,990 418,863
Other accrued expenses 2,682,654 1,797,116
Accrued income taxes --- 496,671
Current maturity of line of credit 1,500,000 2,500,000
----------- -----------
Total current liabilities 9,124,957 11,512,290
----------- -----------
Line of credit, net of current maturity 10,000,000 2,000,000
----------- -----------
Commitments
Minority interest in joint venture 27,325 53,169
----------- -----------
Shareholders' Equity:
Common stock, $.01 par value
Authorized -- 8,000,000 shares
Issued - 5,101,814 and 5,100,314 shares at
March 31 and September 29, 2001, respectively 51,018 51,003
Additional paid-in capital 1,191,973 1,191,988
Subscriptions receivable (292,417) (272,917)
Retained earnings 40,357,136 40,426,318
----------- -----------
41,307,710 41,396,392
Less-Treasury stock, 172,500 and 355,300 shares
at cost at March 31 and September 29, 2001,
respectively 2,428,344 4,206,194
----------- -----------
Total shareholders' equity 38,879,366 37,190,198
----------- -----------
$58,031,648 $50,755,657
=========== ===========
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 Six Months Ended
------------------- -----------------
September 30, September 29, September 30, September 29,
2000 2001 2000 2001
(14 weeks) (13 weeks) (27 weeks) (26 weeks)
------------- ------------- ------------- -------------
Net sales $34,584,146 $20,538,723 $57,407,174 $40,434,290
Cost of goods sold 24,873,312 14,140,056 40,432,171 28,525,193
----------- ----------- ----------- -----------
Gross profit 9,710,834 6,398,667 16,975,003 11,909,097
----------- ----------- ----------- -----------
Selling and
marketing expenses 3,360,317 2,645,141 6,069,056 5,175,187
General and
administrative expenses 1,224,866 1,173,794 2,459,052 2,328,887
Engineering and
development expenses 1,404,694 1,233,001 2,780,344 2,557,257
----------- ----------- ----------- -----------
Total operating expenses 5,989,877 5,051,936 11,308,452 10,061,331
----------- ----------- ----------- -----------
Income from operations 3,720,957 1,346,731 5,666,551 1,847,766
Interest income 20,403 49,436 39,620 93,177
Interest expense (146,879) (85,739) (251,999) (245,767)
Other expense (13,589) (38,173) (33,796) (49,267)
----------- ----------- ----------- -----------
Income before provision
for income taxes 3,580,892 1,272,255 5,420,376 1,645,909
Provision for income taxes 1,343,000 536,000 2,033,000 739,000
----------- ----------- ----------- -----------
Net income $ 2,237,892 $ 736,255 $ 3,387,376 $ 906,909
=========== =========== =========== ===========
Net income per share:
Basic $ .46 $ .15 $ .69 $ .18
=========== =========== =========== ===========
Diluted $ .45 $ .15 $ .69 $ .18
=========== =========== =========== ===========
Weighted average common shares outstanding (Note 3):
Basic 4,908,245 4,900,153 4,908,245 4,914,633
Diluted 4,954,202 4,908,321 4,925,629 4,918,685
Dividends per share $ .085 $ .085 $ .17 $ .17
=========== =========== =========== ===========
The accompanying notes are an integral part of these consolidated financial
statements.
6
Boston Acoustics, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended
----------------
September 30, 2000 September 29, 2001
------------------ ------------------
Cash flows from operating activities:
Net income $ 3,387,376 $ 906,909
Adjustments to reconcile net income to net cash
provided by (used in) operating activities -
Depreciation and amortization 1,639,585 1,359,757
Changes in assets and liabilities -
Accounts receivable (4,046,345) 264,526
Inventories (7,329,438) 8,764,355
Prepaid expenses and other current assets (128,410) 722
Accounts payable 4,308,015 1,739,515
Accrued payroll and other accrued expenses 376,102 (848,726)
Accrued income taxes 546,467 496,671
----------- -----------
Net cash (used in) provided by operating activities (1,246,648) 12,683,729
----------- -----------
Cash flows from investing activities:
Purchases of property and equipment, net (2,504,385) (478,135)
Increase in other assets (114,028) (3,273)
----------- -----------
Net cash used in investing activities (2,618,413) (481,408)
----------- -----------
Cash flows from financing activities:
Dividends paid (834,403) (837,854)
Purchase of treasury stock --- (1,777,850)
Proceeds from line of credit 5,500,000 ---
Repayments of line of credit (834,308) (7,000,000)
Decrease in subscriptions receivable --- 19,500
----------- -----------
Net cash provided by (used in) financing activities 3,831,289 (9,596,204)
----------- -----------
Increase (decrease) in cash and cash equivalents (33,772) 2,606,117
Cash and cash equivalents, beginning of period 1,506,741 2,785,846
----------- -----------
Cash and cash equivalents, end of period $ 1,472,969 $ 5,391,963
=========== ===========
Supplemental Disclosure of NonCash Financing Activities:
Dividends payable $ 417,201 $ 418,863
=========== ===========
Minority interest in foreign subsidiary $ --- $ 25,844
=========== ===========
Supplemental Disclosure of Cash Flow Information:
Cash paid for income taxes $ 1,548,500 $ 361,000
=========== ===========
Cash paid for interest $ 220,427 $ 275,604
=========== ===========
The accompanying notes are an integral part of these consolidated financial
statements.
7
Boston Acoustics, Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
(1) Basis of Presentation
The unaudited consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission and include, in the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of interim period results. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. The Company
believes, however, that its disclosures are adequate to make the information
presented not misleading. The results for the three and six-month periods ended
September 29, 2001 are not necessarily indicative of results to be expected for
the full fiscal year. These financial statements should be read in conjunction
with the Company's Annual Report included in its Form 10-K for fiscal year ended
March 31, 2001.
(2) Inventories
Inventories are stated at the lower of cost (first-in, first-out) or market
and consist of the following:
March 31, 2001 September 29, 2001
-------------- ------------------
Raw materials and work-in-process $ 8,374,305 $ 6,828,417
Finished goods 16,248,112 9,029,645
----------- -----------
$24,622,417 $15,858,062
=========== ===========
Work-in-process and finished goods inventories consist of materials, labor
and manufacturing overhead.
(3) Net Income Per Common Share
The Company follows the provisions of Statement of Financial Accounting
Standards (SFAS) No. 128, Earnings per Share. SFAS No. 128 establishes
standards for computing and presenting earnings per share (EPS) and applies to
entities with publicly held common stock or potential common stock. Basic EPS
is computed by dividing net income by the weighted average number of common
shares outstanding for the period. Diluted EPS reflects the potential dilution
from common stock equivalents (stock options). For the three-month and six-
month periods ended September 29, 2001, there were 533,100 stock options that
have been excluded from the weighted average number of common and dilutive
shares outstanding as their effect would be anti-dilutive. For the three-month
and six-month periods ended September 30, 2000, there were 174,104 and 425,860
stock options, respectively, that have been excluded from the weighted average
number of common and dilutive shares outstanding as their effect would be anti-
dilutive.
8
A reconciliation of the number of shares used in the calculation of basic and
diluted net income per share, is as follows:
Three Months Ended Six Months Ended
------------------ ----------------
September 30, September 29, September 30, September 29,
2000 2001 2000 2001
------------- ------------- ------------- -------------
Weighted
average common
shares outstanding 4,908,245 4,900,153 4,908,245 4,914,633
Dilutive effect of
assumed exercise of
stock options 45,957 8,168 17,384 4,052
--------- --------- --------- ---------
Weighted average
common shares
outstanding assuming
dilution 4,954,202 4,908,321 4,925,629 4,918,685
========= ========= ========= =========
(4) Segment Reporting
The Company has two reportable segments: 1) core, and 2) original equipment
manufacturer (OEM) and multimedia.
The accounting policies of the segments are the same as those described in
the summary of significant accounting policies. The Company does not allocate
operating expenses between its two reportable segments. Accordingly, the
Company's measure of profit for each reportable segment is based on gross
profit.
Three Months Ended September 29, 2001
- -------------------------------------
OEM and
Fiscal 2002 Core Multimedia Total
----------- ---- ---------- -----
Net Sales $13,402,971 $ 7,135,752 $20,538,723
=========== =========== ===========
Gross profit $ 5,226,363 $ 1,172,304 $ 6,398,667
=========== =========== ===========
Three Months Ended September 30, 2000
- -------------------------------------
OEM and
Fiscal 2001 Core Multimedia Total
----------- ---- ---------- -----
Net Sales $15,546,388 $19,037,758 $34,584,146
=========== =========== ===========
Gross profit $ 5,491,318 $ 4,219,516 $ 9,710,834
=========== =========== ===========
9
Six Months Ended September 29, 2001
- -------------------------------------
OEM and
Fiscal 2002 Core Multimedia Total
----------- ---- ---------- -----
Net Sales $26,225,707 $14,208,583 $40,434,290
=========== =========== ===========
Gross profit $ 9,811,141 $ 2,097,956 $11,909,097
=========== =========== ===========
Six Months Ended September 30, 2000
- -------------------------------------
OEM and
Fiscal 2001 Core Multimedia Total
----------- ---- ---------- -----
Net Sales $28,957,720 $28,449,454 $57,407,174
=========== =========== ===========
Gross profit $10,317,094 $ 6,657,909 $16,975,003
=========== =========== ===========
(5) Significant Customers
For the three-month periods ended September 29, 2001 and September 30,
2000, two customers represented approximately 48% and 59% of the Company's net
sales, respectively. The same two customers accounted for approximately 47% and
55% of the net sales for the six months ended September 29, 2001 and September
30, 2000 respectively.
(6) International Operations
The Company maintains sales concentrations in Europe, Asia, and Canada in
addition to distributing product through three foreign subsidiaries. Export
sales accounted for approximately 15% of sales for the three-month periods ended
September 29, 2001 and September 30, 2000. For the six-month periods ended
September 29, 2001 and September 30, 2000, export sales accounted for 17% and
16%, respectively.
(7) Recent Accounting Pronouncements
In June 2001, the FASB issued SFAS No. 141, Business Combinations. SFAS 141
requires all business combinations initiated after June 30, 2001 to be accounted
for using the purchase method. The Company does not expect the adoption of this
statement to have a material impact on its operations.
In June 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible
Assets. With the adoption of SFAS No. 142, goodwill is no longer subject to
amortization over its estimated useful life, but instead is subject to at least
an annual assessment for impairment by applying a fair-value-based test. The
Company does not expect the adoption of this statement to have a material impact
on its operations.
In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations. This statement addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. This statement applies to all entities. It
applies to legal obligations associated with the retirement of long-lived assets
that result from the acquisition, construction, development and (or) the normal
operation of a long-lived asset, except for certain obligations of lessees. This
statement amends FASB Statement No. 19 and is effective for financial statements
issued for fiscal years beginning after June 15, 2002. The Company is currently
evaluating the ultimate impact of this statement on its results of operations or
financial position until such time as its provisions are applied.
10
In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets. This statement supercedes FASB Statement No.
121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of, and the accounting and reporting provisions of
Accounting Principles Board Opinion No. 30, Reporting the Results of Operations
- - Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions.
Under this statement, it is required that one accounting model be used for long-
lived assets to be disposed of by sale, whether previously held and used or
newly acquired, and it broadens the presentation of discontinued operations to
include more disposal transactions. The provisions of this statement are
effective for financial statements issued for fiscal years beginning after
December 15, 2001, and interim periods within those fiscal years, with early
adoption permitted. The Company is currently evaluating the ultimate impact of
this statement on its results of operations or financial position until such
time as its provisions are applied.
(8) Reclassifications
Certain amounts in the prior-period consolidated financial statements have
been reclassified to conform to the current period's presentation.
11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
The following table sets forth the results of operations for the three-month and
six-month periods ended September 30, 2000 and September 29, 2001 expressed as
percentages of net sales.
Three Months Ended Six Months Ended
------------------- ----------------
September 30, September 29, September 30, September 29,
2000 2001 2000 2001
(14 weeks) (13 weeks) (27 weeks) (26 weeks)
------------- ------------- ------------- -------------
Net sales 100.0 % 100.0 % 100.0 % 100.0 %
Cost of goods sold 71.9 68.8 70.4 70.5
----- ----- ----- -----
Gross profit 28.1 31.2 29.6 29.5
----- ----- ----- -----
Selling and marketing
expenses 9.7 12.9 10.6 12.8
General and administrative
expenses 3.5 5.7 4.3 5.8
Engineering and development
expenses 4.1 6.0 4.8 6.3
----- ----- ----- -----
17.3 24.6 19.7 24.9
----- ----- ----- -----
Income from operations 10.8 6.6 9.9 4.6
Interest income (expense), net (0.4) (0.2) (0.4) (0.4)
Other Expense 0.0 (0.2) (0.1) (0.1)
----- ----- ----- -----
Income before provision for
income taxes 10.4 6.2 9.4 4.1
Provision for income taxes 3.9 2.6 3.5 1.9
----- ----- ----- -----
Net income 6.5 % 3.6 % 5.9 % 2.2 %
===== ===== ===== =====
Net sales for the second quarter decreased 41%, from approximately $34,584,000
last year to approximately $20,539,000 for the current fiscal period. For the
six-month period ended September 29, 2001, net sales decreased 30% from
approximately $57,407,000 during Fiscal 2001 to approximately $40,434,000. The
three-month period ended September 29, 2001 includes 13 weeks of sales and
earnings compared to 14 weeks for the corresponding three-month period a year
ago. The overall sales decrease for the three-month period ended September 29,
2001 was the result of a 63% sales decrease in the OEM and
12
multimedia segment accompanied with a 14% decrease in the Core business segment
compared to the same period a year ago. Both business segments have been
impacted by the continued softening of the global economy, as well as, a
substantial sales decrease in the month of September 2001.
During the second quarter of Fiscal 2002, the Company made initial shipments of
its new VRi Series of installed speaker systems consisting of six models of
unique in-wall rectangles and ceiling-mount rounds. The VRi Series, with
suggested retails ranging from $350 to $1,000 per system, offer high-end in-home
solutions for custom installations. The Company also introduced its new Boston
Bravo(TM), a multi-purpose, compact speaker suitable for any audio application
where it is important that the speaker blends into the seams of a room. The
Boston Bravo, available in white or black, retails for $200 each.
The Company's gross margin percentage for the quarter ended September 29, 2001
increased as compared to the corresponding period in the prior fiscal year. The
increase was due primarily to improved manufacturing efficiencies, reduced scrap
and rework costs, elimination of contract labor and off-site warehousing costs
as compared to the same period a year ago. Gross margins were also positively
impacted by the sales mix as the OEM/Multimedia segment of sales, which has
lower gross margins, represented a smaller portion of total net sales during the
three-month period ended September 29, 2001 as compared to the same period a
year ago. For the six-month period ended September 29, 2001, the gross margin
percentage was about the same as the corresponding period last year.
Total operating expenses, despite increasing as a percentage of net sales due to
the lower sales level, decreased in absolute dollars during both the three-month
and six-month periods ended September 29, 2001. Selling and marketing expenses
have decreased in absolute dollars primarily due to decreased salaries and
related expenses and reduced advertising costs relating to both the core and
multimedia retail segments. The decrease in absolute dollars of general and
administrative expenses for the three-month and six-month periods ended
September 29, 2001 is attributed to a reduction of outside consulting services
and reduced insurance costs. Engineering and development expenses for the three-
month and six-month periods ended September 29, 2001 have decreased in absolute
dollars due primarily to lower payroll-related costs, consulting fees and
reduced expenses relating to the termination of off-site rented office space in
August 2000 as compared to the same periods a year ago.
Net interest expense has decreased both in absolute dollars and as a percentage
of net sales during the quarter ended September 29, 2001 as compared to the
corresponding period a year ago. The decrease is due to reduced line of credit
borrowings and respective borrowing rates. During the six-month comparative
period, net interest expense has decreased in absolute dollars while remaining
relatively stable as a percentage of net sales.
The Company's effective income tax rate increased to 42.1% for the three-month
period and 44.9% for the six-month period ended September 29, 2001 as compared
to 37.5% for both the three-month and six-month periods ended September 30,
2000. This increase is primarily a result of the Company's inability to benefit
from losses sustained by the Company's subsidiaries outside the U.S.
Net income for the second quarter decreased from approximately $2,238,000 in
Fiscal 2001 to approximately $736,000 in Fiscal 2002 while diluted earnings per
share decreased from $.45 to $.15 per share. Net income for the six-month
period ended September 29, 2001 decreased from approximately $3,387,000 in
Fiscal 2001 to approximately $907,000, while diluted earnings per share
decreased from $.69 to $.18 per share. The decrease in net income for the
three and six-month periods ended September 29, 2001 is primarily the result of
the overall decrease in net sales.
Liquidity and Capital Resources
As of September 29, 2001, the Company's working capital was approximately
$23,691,000, a decrease of approximately $8,811,000 since the end of Fiscal
2001. The decrease in working capital was primarily due to the repayments made
on the Company's line of credit borrowings, as well as reductions in inventory
13
balances and increases in accounts payable which were offset by an increase in
cash. The Company's cash and cash equivalents were approximately $5,392,000 at
September 29, 2001, an increase of approximately $2,606,000 from March 31, 2001
primarily due to the reduction in inventory levels. Current liabilities
increased by approximately $2,387,000 primarily as a result of accounts payable
balances not due until after the quarterly period had ended. Long term debt
decreased by $8,000,000 as a result of repayments under the Company's line of
credit and reclassifying a portion of the debt to current liabilities. The
Company has two lines of credit with two banking institutions totaling
$26,500,000. At September 29, 2001, the Company had borrowings totaling
$4,500,000 under its $25,000,000 revolving credit agreement, and $0 outstanding
under its $1.5 million revolving credit agreement.
The Company believes that its current resources are adequate to meet its
requirements for working capital and capital expenditures for the foreseeable
future.
Significant Customers
The Company's financial results for the three-month and six-month periods ended
September 29, 2001 include significant OEM sales of multimedia speaker systems
to Gateway, Inc. ("Gateway"). The terms of these sales are governed by a Master
Supply Agreement between Gateway and the Company which defines such issues as
ordering and invoicing procedures, shipping charges, warranties, repair service
support, product safety requirements, etc. This Master Supply Agreement with
Gateway does not contain minimum or scheduled purchase requirements; therefore,
purchase orders by Gateway may fluctuate significantly from quarter to quarter.
Based on information currently available from our OEM customer, the Company
anticipates that its OEM sales will be substantially reduced for the fiscal year
ending March 30, 2002 as compared to Fiscal 2001. The loss of Gateway as a
customer or any significant portion of orders from Gateway could have a material
adverse affect on the Company's business, results of operations and financial
condition. In addition, the Company could also be materially adversely affected
by any substantial work stoppage or interruption of production at Gateway or if
Gateway were to reduce or cease conducting operations.
Cautionary Statements
The Private Securities Litigation Reform Act of 1995 contains certain safe
harbors regarding forward-looking statements. From time to time, information
provided by the Company or statements made by its directors, officers, or
employees may contain "forward-looking" information which involve risk and
uncertainties. Any statements in this report that are not statements of
historical fact are forward-looking statements (including, but not limited to,
statements concerning the characteristics and growth of the Company's market and
customers, the Company's objectives and plans for future operations, and the
Company's expected liquidity and capital resources). Such forward-looking
statements are based on a number of assumptions and involve a number of risks
and uncertainties, and accordingly, actual results could differ materially.
Factors that may cause such differences include, but are not limited to: the
continued and future acceptance of the Company's products, the rate of growth in
the audio industry; the presence of competitors with greater technical,
marketing and financial resources; the Company's ability to promptly and
effectively respond to technological change to meet evolving consumer demands;
capacity and supply constraints or difficulties; and the Company's ability to
successfully integrate new operations. The words "believe," "expect,"
"anticipate," "intend" and "plan" and similar expressions identify forward-
looking statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date the statement was
made. For a further discussion of these and other significant factors to
consider in connection with forward-looking statements concerning the Company,
reference is made to Exhibit 99 of the Company's Form 8-K filed on July 18,
1996.
14
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
None
Item 2. Changes in Securities
---------------------
None
Item 3. Defaults Upon Senior Securities
-------------------------------
None
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
At the Annual Meeting of the Shareholders of the Company held on
August 14, 2001, shareholders acted affirmatively to elect nominees
for directors proposed by management. Each Director is to serve until
the next Annual Meeting of Shareholders and thereafter until his/her
successor is elected and qualified.
Nominee Votes "For" Votes "Withheld"
------- ----------- ----------------
Andrew G. Kotsatos 4,279,301 241,780
Moses A. Gabbay 4,270,851 250,230
Alexander E. Aikens, III 4,296,901 224,180
George J. Markos 4,288,433 232,648
Lisa M. Mooney 4,287,951 233,130
Fletcher H. Wiley 4,291,908 229,173
Shareholders also voted to ratify the action of the Directors in
selecting Arthur Andersen LLP as auditors of the Company for the
ensuing fiscal year. A total of 4,494,941 votes were cast in favor of
the proposal, 23,340 votes were cast against, and there were 2,800
abstentions.
In addition, the shareholders voted to increase by 500,000 the number
of shares covered by the 1997 Stock Plan. There were 1,945,905 votes
cast in favor of the proposal, 1,213,448 votes cast against, and there
were 146,650 abstentions.
Item 5. Other Information
-----------------
None
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
No reports on Form 8-K were filed during the quarter ended September
29, 2001.
15
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.
Boston Acoustics, Inc.
----------------------
Registrant
Date: November 9, 2001 By: /s/ Andrew G. Kotsatos
----------------------
Andrew G. Kotsatos
Director, Chief Executive Officer
and Treasurer
Date: November 9, 2001 By: /s/ Moses A. Gabbay
-------------------
Moses A. Gabbay
Director, President and
Chief Operating Officer
Date: November 9, 2001 By: /s/ Debra A. Ricker-Rosato
--------------------------
Debra A. Ricker-Rosato
Vice President and
Chief Accounting Officer
16