-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Bsh1C9urOOg9WdnpCIQ2CJlXk81w06jNTK/v3LVB6qq+ES7DVzt2pB33pXITg5lv Qstx47FUH9Zf8CbtrVdE9A== 0000950149-96-000093.txt : 19960216 0000950149-96-000093.hdr.sgml : 19960216 ACCESSION NUMBER: 0000950149-96-000093 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960213 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: GOOD GUYS INC CENTRAL INDEX KEY: 0000785931 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-RADIO TV & CONSUMER ELECTRONICS STORES [5731] IRS NUMBER: 942366177 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14134 FILM NUMBER: 96517005 BUSINESS ADDRESS: STREET 1: 7000 MARINA BLVD CITY: BRISBANE STATE: CA ZIP: 94005 BUSINESS PHONE: 4156155000 MAIL ADDRESS: STREET 2: 7000 MARINA BLVD CITY: BRISBANE STATE: CA ZIP: 94005 10-Q 1 FORM 10-Q FOR PERIOD ENDING 12-31-95 1 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 December 31, 1995 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 0-14134 THE GOOD GUYS, INC. (Exact name of registrant as specified in its charter) Delaware 94-2366177 - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 7000 MARINA BOULEVARD, BRISBANE, CALIFORNIA 94005 ----------------------------------------------------- (Address of principal executive offices and zip code) (415)615-5000 ------------- (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 ---- ---- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at January 31, 1996 - ------------------------------ ------------------------------- Common Stock, $.001 par value 13,756,605 Page 1 of 14 2 THE GOOD GUYS, INC. INDEX
Page Part I. FINANCIAL INFORMATION: Item 1 Financial Statements: - ------ Consolidated Balance Sheets as of 3 December 31, 1995 (Unaudited) and September 30, 1995 (Unaudited) Consolidated Statements of Income for the 4 Three Month Periods Ended December 31, 1995 and 1994 (Unaudited) Consolidated Statement of Changes in Shareholders' 5 Equity for the Three Month Period Ended December 31, 1995 (Unaudited) Consolidated Statements of Cash Flows for the 6 Three Month Periods Ended December 31, 1995 and 1994 (Unaudited) Notes to Consolidated Financial Statements 7 Item 2 Management's Discussion and Analysis of - ------ Financial Condition and Results of Operations 8-9 Part II. OTHER INFORMATION 10 SIGNATURE PAGE 11 EXHIBIT INDEX 12 EXHIBIT 11.1 Statement Setting Forth Computation of Earnings per Share 13 Exhibit 27.1 Financial Data Schedule 14
Page 2 of 14 3 THE GOOD GUYS, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (In thousands except share data) (Unaudited) ASSETS
December 31, September 30, 1995 1995 -------- -------- Current assets: Cash and cash equivalents $ 23,819 $ 18,434 Accounts receivable, net 42,467 21,209 Merchandise inventories 168,825 115,806 Prepaid expenses 8,999 10,300 -------- -------- Total current assets 244,110 165,749 Property and equipment 101,674 101,825 Less accumulated depreciation and amortization 44,625 42,584 -------- -------- Property and equipment, net 57,049 59,241 Other assets 2,384 2,739 -------- -------- Total assets $303,543 $227,729 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $104,627 $ 53,504 Accrued expenses and other liabilities: Payroll 13,685 12,435 Sales taxes 10,968 6,025 Other 31,513 19,743 -------- -------- Total current liabilities 160,793 91,707 Shareholders' equity: Preferred stock, $.001 par value; authorized 2,000,000 shares; none issued Common stock,$.001 par value: authorized 40,000,000 shares; issued and outstanding, 13,581,416 at December 31 and September 30 14 14 Additional paid-in capital 61,833 61,833 Retained earnings 80,903 74,175 -------- -------- Total shareholders' equity 142,750 136,022 -------- -------- Total liabilities and shareholders' equity $303,543 $227,729 ======== ========
The accompanying notes are an integral part of these statements. Page 3 of 14 4 THE GOOD GUYS, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (In thousands except per share data) (Unaudited)
Three Months Ended December 31, ------------------ 1995 1994 ---- ---- Net sales $ 306,715 $ 281,658 Cost of sales 236,955 213,702 --------- --------- Gross profit 69,760 67,956 Selling, general and administrative expenses 58,439 53,724 --------- --------- Income from operations 11,321 14,232 Interest income (expense), net (45) (132) --------- --------- Income before income taxes 11,276 14,100 Income taxes 4,548 5,499 --------- --------- Net income $ 6,728 $ 8,601 ========= ========= Net income per common share $ .50 $ .65 ========= ========= Shares used in per share computation 13,581 13,286 ========= =========
The accompanying notes are an integral part of these statements. Page 4 of 14 5 THE GOOD GUYS, INC. CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE THREE-MONTH PERIOD ENDED DECEMBER 31, 1995 (In thousands except share data) (Unaudited)
Common Stock Additional ------------ paid-in Retained Shares Amount capital earnings Total ------ ------ ------- -------- ----- Balance at September 30, 1995 13,581,416 $ 14 $ 61,833 $ 74,175 $ 136,022 Net income for the three-month period ended December 31, 1995 -- -- -- 6,728 6,728 Issuance of common stock -- -- -- -- -- ---------- ---------- ---------- ---------- ---------- Balance at December 31, 1995 13,581,416 $ 14 $ 61,833 $ 80,903 $ 142,750 ========== ========== ========== ========== ==========
The accompanying notes are an integral part of these statements. Page 5 of 14 6 THE GOOD GUYS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
Three Months Ended December 31, ------------------------ 1995 1994 -------- -------- Cash Flows from Operating Activities: Net income $ 6,728 $ 8,601 -------- -------- Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 2,264 2,488 Change in assets and liabilities: Accounts receivable (21,258) (25,446) Merchandise inventories (53,019) (84,891) Prepaid expenses and other assets 1,656 1,566 Accounts payable 51,123 80,931 Accrued expenses and other liabilities 17,963 19,314 -------- -------- Total adjustments (1,271) (6,038) -------- -------- Net cash provided by operating activities 5,457 2,563 -------- -------- Cash Flows from Investing Activities: Purchase of property and equipment - net (72) (3,959) -------- -------- Net cash used in investing activities (72) (3,959) -------- -------- Cash Flows from Financing Activities: Issuance of common stock -- 37 -------- -------- Net cash provided by financing activities -- 37 -------- -------- Net increase (decrease) in cash and cash equivalents 5,385 (1,359) Cash and cash equivalents at September 30, 1995 and 1994 18,434 21,661 -------- -------- Cash and cash equivalents at December 31, 1995 and 1994 $ 23,819 $ 20,302 ======== ========
The accompanying notes are an integral part of these statements. Page 6 of 14 7 THE GOOD GUYS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note A - Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles and reflect, in the opinion of management, all adjustments necessary for a fair presentation of the information contained therein, all of which adjustments are of a normal recurring nature. The consolidated financial statements should be read in conjunction with the financial statements, notes, supplementary data and financial statement schedules included and incorporated by reference in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1995. The weighted average number of shares outstanding during the quarter has been computed by taking the number of days each share is outstanding and dividing by the number of days in the quarter. Stock options are not included in the calculation of earnings per share for the quarter ended December 31, 1995 as the dilutive effect of the options was less than 3%. Page 7 of 14 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Sales for the quarter ended December 31, 1995 reached $306.7 million, an increase of 9% over sales of $281.7 million for the quarter ended December 31, 1994. This increase was due to an increase in the total number of stores in operation from 59 at December 31, 1994 to 70 at December 31, 1995, partially offset by a 6% decrease in comparable store sales. Gross profit as a percentage of sales was 22.7% for the quarter ended December 31, 1995, as compared to 24.1% for the quarter ended December 31, 1994. This decrease was primarily caused by the increased proportion of sales represented by computer products, which typically carry lower gross margins, and by a highly promotional consumer electronics market. During the first quarter of fiscal 1996, the Company continued to control its selling, general and administrative costs, maintaining the same percentage of sales, 19.1%, as the first quarter of fiscal 1995. The effective income tax rate for the quarter ended December 31, 1995 was 40.3%, compared to 39.0% for the quarter ended December 31, 1994 which included the benefit of the utilization of job tax credits. Net income for the quarter ended December 31, 1995 was $6.7 million ($0.50 per share) or 2.2% of sales for the period. These results compare to income of $8.6 million ($0.65 per share) or 3.1% of sales for the quarter ended December 31, 1994. Liquidity and Capital Resources At December 31, 1995, the Company had working capital of $83.3 million. Net cash provided by operating activities was $5.5 million for the quarter ended December 31, 1995 as compared to $2.6 million for the quarter ended December 31, 1994. This increase in net cash from operating activities was primarily attributable to a decrease in merchandise inventories offset by a corresponding decrease in accounts payable. The decrease in merchandise inventories and accounts payable was due to effective management of holiday season inventories. Net cash used in investing activities, which primarily consists of expenditures for stores, distribution facilities and administrative property and equipment, was less than $100,000 for the three months ended December 31, 1995 as compared to $4.0 million during the same period in fiscal 1995. This decrease was attributable to the decrease in the number of new stores opened, 4 stores opened in the first quarter of 1996 versus 7 stores opened during the first quarter of 1995, and a more effective use of lease financing during the first quarter of 1996. The Company maintains a revolving line of credit of up to $75 million, the availability of which fluctuates seasonally. The credit agreement contains restrictive loan covenants which if violated could be used as a basis for termination of the agreement. Page 8 of 14 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONT'D.) The Company was in compliance with all covenants under the credit agreement as of December 31, 1995. There were no borrowings outstanding under the credit agreement at December 31, 1995. The Company expects to be able to fund its working capital requirements and expansion plans with a combination of anticipated cash flow from operations, normal trade credit, financing arrangements and continued use of lease financing. Page 9 of 14 10 PART II. OTHER INFORMATION ITEMS 1-3 Not applicable ITEM 4 Submission of Matters to a Vote of Security Holders At the Annual Meeting of Shareholders of The Good Guys, Inc. held on January 24, 1996, 12,191,351 shares were present in person or by proxy out of 13,581,416 outstanding shares. The shareholders voted on the following matters: 1. The nominees for election as Directors of the Corporation were elected without opposition. A vote of the common stock with respect to this election was: Number of Shares
Nominees For Withheld -------- --- --------- Stanley R. Baker 11,992,218 199,133 Robert A. Gunst 11,989,521 201,830 Russell Solomon 12,094,160 97,191 W. Howard Lester 12,096,082 95,269 John Martin 12,098,756 92,595 Ron Unkefer was withdrawn from nomination due to his resignation from the Board of Directors on January 22, 1996.
2. Ratification of the appointment of Deloitte & Touche LLP as independent public accountants. For the proposal: 12,160,356 Against the proposal: 14,250 Withheld: 16,745
ITEM 5 Not applicable ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibit Description 11.1 Statement of Computation of Per Share Earnings 27.1 Financial Data Schedule (b) Forms 8-K On February 7, 1996 the Company filed a current report on Form 8-K, to report the following events: 1. The resignation of Ronald A. Unkefer, as Chairman of the Board of Directors and as a Director, effective January 22, 1996. 2. On January 29, 1996 the Board of Directors authorized the purchase of up to 500,000 shares of its common stock in open-market purchases or in private transactions. Page 10 of 14 11 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE GOOD GUYS, INC. ------------------- Registrant February 13, 1996 /s/ROBERT A. GUNST - ----------------- ------------------------------------- Date Robert A. Gunst President and Chief Executive Officer (Principal Financial Officer) Page 11 of 14 12 EXHIBIT INDEX
NUMBER DESCRIPTION PAGE 11.1 Statement of Computation of Per Share 13 Earnings 27.1 Financial Data Schedule 14
Page 12 of 14
EX-11.1 2 STATEMENT OF COMPUTATION OF PER SHARE EARNINGS 1 THE GOOD GUYS, INC. Exhibit 11.1 STATEMENT SETTING FORTH COMPUTATION OF EARNINGS PER SHARE (In thousands except per share data)
December 31, December 31, 1995 1994 ------- ------- Net Income $ 6,728 $ 8,601 1. As presented in the 10-Q Shares used in per share computation 13,581 13,286 Net income per common share and common share equivalents $ .50 $ .65 ======= ======= 2. Computation of primary and fully diluted earnings per share including common stock equivalents a) Primary earnings per common share Weighted average number of shares: Common stock (A) 13,581 13,286 Stock options (B) 126 188 ------- ------- Total 13,707 13,474 Primary earnings per share $ .49 $ .64 ======= ======= b) Fully diluted earnings per share Weighted average number of shares: Common stock (A) 13,581 13,286 Stock options (B) 126 188 ------- ------- Total 13,707 13,474 Fully diluted earnings per share $ .49 $ .64 ======= =======
(A) The weighted average number of common shares outstanding during the quarter has been computed by taking the number of days each share is outstanding and dividing by the number of days in the quarter. (B) Stock options used in the primary earnings per share are calculated using the average market price. Stock options in fully diluted earnings per share are calculated using the higher of the ending market price or the average market price. Page 13 of 14
EX-27.1 3 FINANCIAL DATA SCHEDULE
5 1000 3-MOS SEP-30-1996 DEC-31-1995 23819 0 43081 614 148825 244110 101674 44625 303543 160793 0 0 0 14 142736 303543 306715 306715 236955 236955 58439 0 45 11276 4548 6728 0 0 0 6728 .49 .49
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