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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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[X] Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the fiscal year ended September 30, 1997
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Commission File Number 0-14134
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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 94005-1840
(Address of principal executive offices)
Registrant's telephone number, including area code: (415) 615-5000
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value
(Title of Class)
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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by nonaffiliates of the
registrant was approximately $100,424,205 as of December 15, 1997.
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
On December 15, 1997, there were 13,180,130 shares of common stock
outstanding.
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DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of Annual Report to Shareholders for fiscal year ended September
30, 1997. (Part II of Form 10-K)
(2) Portions of definitive proxy statement filed with Securities and Exchange
Commission relating to the Company's 1998 Annual Meeting of Shareholders.
(Part III of Form 10-K)
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PART I
ITEM 1. BUSINESS
General
THE GOOD GUYS! is a leading specialty retailer of consumer electronics
products. The Company currently operates 76 stores: In California, 19 stores are
located in the San Francisco Bay area, 25 in the greater Los Angeles/Orange
County metropolitan area, three in Sacramento, seven in San Diego, and one each
in Bakersfield, Fresno, Modesto and Stockton. In Washington, Oregon and Nevada,
THE GOOD GUYS! operates nine stores, five stores and four stores, respectively.
The Good Guys, Inc. was incorporated in California in 1976. On March
4, 1992, the Company changed its state of incorporation from California to
Delaware by merging into a wholly-owned Delaware subsidiary formed for that
purpose. In September 1995, The Good Guys, Inc. transferred substantially all of
its assets and liabilities to The Good Guys - California, Inc., its wholly-owned
operating subsidiary. Unless the context otherwise requires, the terms "THE GOOD
GUYS!" and "Company" refer to The Good Guys, Inc., together with its operating
subsidiary.
Information Regarding Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides
companies with a "safe harbor" when making forward-looking statements.
Statements of the Company that are not historical facts, including statements
about management's expectations for fiscal year 1998 and beyond, are
forward-looking statements and involve certain risks and uncertainties. Factors
that could cause the Company's actual results to differ materially from
management's projections, forecasts, estimates and expectations include, but are
not limited to, the following:
(a) Demand for the Company's products, which in turn is dependent upon
factors such as economic trends, the availability of consumer credit,
the introduction and acceptance of new products and new product
features, and the continued popularity of existing products.
(b) Changes in the amount of promotional activities of current
competitors and potential new competition from both retail stores and
alternative methods of distribution such as electronic and telephone
shopping services and mail order.
(c) Changes in the Company's product mix.
(d) The Company's ability to continue to locate suitable store sites
and to hire and train skilled personnel.
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(e) Changes in the cost of the Company's advertising or in the support
received from vendors for advertising and promotional programs.
(f) The ability of the Company to achieve economies of scale in its
advertising.
(g) Changes in availability of capital expenditure, working capital
and credit card financing.
(h) Availability of sources of supply for the products the Company
desires to sell.
(i) Adoption of new laws or regulations placing restrictions on the
sale of products and/or services by the Company.
(j) Adverse results in significant litigation matters.
Business Strategy
THE GOOD GUYS! goal is to be a leading specialty retailer of consumer
electronics products in each of its markets. The cornerstones of its business
strategy include:
Differentiated customer service. THE GOOD GUYS! believes that superior
service is the single most important factor in overall customer satisfaction,
and that the Company differentiates itself from other consumer electronics
retailers by providing superior service to its shoppers. The Company believes
that friendly and knowledgeable sales associates are critical to satisfying
customers interested in more fully featured, middle to high-end consumer
electronics products. The Company's objective is to generate long-term repeat
business from its customers.
Merchandising. The Company's merchandising strategy is to provide
shoppers with a broad and compelling selection of brand name consumer
electronics products, with an emphasis on more fully featured merchandise.
Merchandise is offered at competitive prices and backed by a low price
guarantee.
Marketing. The Company aggressively uses newspaper, direct mail and
broadcast advertising to build name recognition, to position THE GOOD GUYS! in
its markets, and to increase store traffic. Stores are designed to be exciting
and easy to shop and are located in high visibility and high traffic commercial
areas.
Expansion. The Company plans to continue to expand its store base.
Successful expansion will depend, among other things, on the Company's ability
to continue to locate suitable store sites and to hire and train skilled
personnel. It will also depend on the Company's ability to open new stores
quickly in existing markets, to achieve economies of scale in advertising and
distribution, and to continue to gain market share from established competitors.
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Customer Service
The Company believes that knowledgeable and friendly sales associates
are critical to providing superior customer service. As of September 30, 1997,
the Company had over 2,400 highly trained part-time and full-time sales
associates. Sales associates are paid under an incentive compensation program
with a salary guarantee that is applied against incentives earned. Incentives
are based on the gross profit realized, the amount of "repeat" business the
sales associate generates, performance against sales goals and peer ranking,
which evaluates a number of performance standards. The Company believes this
incentive structure creates long-term repeat customers for THE GOOD GUYS!.
All sales associates attend a full-time, in-house initial training
program. The Company's training program is continually updated and is designed
to develop good sales practices and techniques and to provide associates with
the knowledge base to explain and demonstrate to shoppers the use and operation
of store merchandise. This training enables associates to better understand
customer needs and to help them select products that meet those needs.
The Company holds training meetings daily at each store to keep sales
associates trained and focused on the principles of superior customer service,
Company procedures and policies, and to update them on competitive information,
current product introductions, product availability and pricing. Manufacturers
also conduct in-store training sessions to familiarize sales associates with
existing and new products.
The Company hosts a product show annually. All associates attend the
product show and are required to participate in training sessions focused on
product knowledge and selling skills. Manufacturers are in attendance with
product displays and are available to answer questions. Additionally, regional
training workshops are conducted twice a year to enhance the sales associates'
product knowledge. These sessions are conducted by a combination of
manufacturers, corporate trainers and the corporate buyers. Customer service and
sales techniques are also incorporated into these training workshops.
The Company's satisfaction guaranteed policy provides that a product
generally may be returned within 30 days of purchase for a full refund or in
exchange for another product. When purchasing a product from the Company,
customers may elect to purchase a Premier Performance Guarantee under which a
third party provides extended service coverage beyond the period covered by the
manufacturer's warranty.
All merchandise purchased from THE GOOD GUYS! and in need of repair
may be returned to any of the Company's stores for service. Such merchandise is
sent to either a Company-operated or an independent factory authorized repair
facility and is returned to the store after repair. The Company has its own
regional service facilities, which service all of its stores. The Company also
operates car audio and car cellular phone installation facilities at almost all
of its locations.
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The majority of the Company's sales are made through credit cards. The
Company currently honors MasterCard, VISA, American Express and various other
credit cards, as well as THE GOOD GUYS! "Preferred Customer Card" issued by an
independent third party. Because of the relatively high cost of many of the
consumer electronics products sold by the Company, its business could be
affected by consumer credit availability.
The Company places emphasis on developing the managerial skills of its
employees in order to provide a source of quality management personnel for
current and future stores. The Company has been able to fill most sales
managerial positions by promoting sales associates and, similarly, to fill most
store management positions by promoting sales managers.
Merchandising
The Company offers its customers a broad range of high quality
consumer electronics products supplied primarily by manufacturers of nationally
known brands. This selection comprises approximately 4,600 products from over
240 vendors and is intended to cover all of the popular price points within each
product category.
The following table shows the approximate percentage of sales for each
major product category for the last three fiscal years. Historical percentages
may not be indicative of percentages in future years.
Year Ended September 30,
------------------------
Category 1997 1996 1995*
- -------- ---- ---- -----
Video ............................... 38% 39% 38%
Audio and cellular phones ........... 30% 29% 32%
Home office ......................... 19% 20% 19%
Other (accessories, repair service,
and premier performance
guarantee)........................ 13% 12% 11%
--- --- ---
100% 100% 100%
=== === ===
- --------
*Certain reclassifications have been made to the 1995 financial data in
order to conform to the present year's presentation.
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For the year ended September 30, 1997, the Company's three
leading suppliers for video products were, in alphabetical order, Mitsubishi,
Panasonic and Sony and for audio and cellular products were, in alphabetical
order, Denon, Sony and Yamaha. The three leading suppliers of home office
products were, in alphabetical order, Hewlett Packard, Panasonic, and Sony.
Marketing
The Company believes that its advertising activities have
resulted in significant name recognition in its markets and have increased the
number of qualified potential customers visiting its stores. The Company's
advertising vehicles include newspaper, direct mail and broadcast.
All of the Company's print and direct mail advertisements are
created, produced and placed by the Company's advertising staff. The Company
believes that the use of its own personnel maximizes its control over
advertising effectiveness, increases its flexibility, allows quick response to
changing market conditions, and enables it to purchase media on advantageous
terms.
The Company's advertisements promote the Company as an "audio-
video specialist" and emphasize competitive prices, extensive selection, and
superior customer service from knowledgeable sales associates.
Expansion
Since the end of fiscal 1985, the Company has grown from 7 to 76
stores. Over the past five years, the Company has expanded its store base at a
compound rate of approximately 13% per year. During fiscal 1997, THE GOOD GUYS!
opened a WOW!, MULTIMEDIA SUPERSTORE, in Long Beach, California, the second WOW!
concept store, which is jointly operated with Tower Records. In fiscal 1997, the
Company also introduced its new Audio/Video Exposition format in its newly
remodeled Redondo Beach and Beverly Hills, California stores, as discussed in
the Store Operations section below. The Company also opened its first
Audio/Video Exposition store in Northern California, at its newly remodeled
Hayward location in October 1997.
In calendar 1998, the Company intends to open two new WOW! stores
incorporating design aspects of the Audio/Video Exposition format in Southern
California, one new Audio/Video Exposition WOW! store in Northern California,
and a new Audio/Video Exposition store in Palo Alto, California. The Company
also plans to renovate four to seven existing stores to the Audio/Video
Exposition concept during calendar 1998.
Store Operations
The Company's stores range in size from approximately 9,000 to
32,000 square feet. Most of the newer stores reflect the ongoing evolution in
the Company's store design and are approximately 25,000 to 30,000 square feet in
size. All of the Company's stores are located in high visibility, high traffic
commercial areas and are open seven days a week, including most holidays.
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THE GOOD GUYS! stores are designed to reinforce the Company's
merchandising philosophy and its desire to provide a customer friendly shopping
experience. Merchandise is generally displayed by category to facilitate
comparison of brands, models and prices.
On November 1, 1996, the Company introduced its Audio/Video Exposition
store design. The Audio/Video Exposition format provides greater merchandising
flexibility and connectivity between existing categories of product, featuring
hands-on demonstrations of product interactivity throughout the store and a
central area for customers to meet with sales consultants to design system
solutions for their homes. The Company expects the Audio/Video Exposition
concept to be the cornerstone of its expansion and renovation program. The
Company currently has three Audio/Video Exposition stores and has identified and
begun to initiate additional store relocations/renovations using that concept.
The Company opened its second WOW!, MULTIMEDIA SUPERSTORE in Long Beach,
California on October 31, 1996, and plans to open three new WOW! stores in
calendar 1998, incorporating design aspects of the Audio/Video Exposition
format. These concept stores, which are jointly operated with Tower Records,
provide the same full range of consumer electronics offered at all THE GOOD
GUYS! stores, as well as a full range of music, video, computer software and
books and magazines offered by Tower Records. THE GOOD GUYS! occupies
approximately 32,000 square feet in each of the WOW! stores.
Each store generally has one store manager, three sales managers and an
operations manager. The store manager oversees the store's operations and the
sales managers supervise the sales associates. Sales associates are specialized
by product category. Sales associates handle all aspects of the customer
interface: providing customers with the information necessary to determine the
best product for their specific need, tendering the invoice and handling the
payment, and bringing the goods from the stockroom to the customer.
Store operations are overseen by a senior management team which holds
frequent meetings with the store managers. Merchandising and store operation
policies for all stores are established by senior management.
Distribution
The Company operates a 460,000 square foot operations center in Hayward,
California, which has the capacity to handle deliveries to more than 100 stores
in the western United States. Deliveries are generally made to each store six or
seven days a week, as ordered by the Company's automated replenishment system.
The Company believes that this frequency of delivery maximizes availability of
merchandise at the stores while minimizing store level and overall inventories.
Management Information Systems
The Company's management information system is a distributed, on-line
network of computers that links all stores, delivery locations, service centers,
credit providers, the distribution facility and the corporate offices into a
fully
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integrated system. Each store has its own system which allows store management
to track sales and inventory at the product, customer or sales associate level.
The Company's point of sale system allows the capture of sales data and customer
information and allows the tracking of merchandising trends and inventory levels
on a daily basis. Management believes that its current systems are adequate to
support THE GOOD GUYS! anticipated growth.
Competition
The business of the Company is highly competitive. The Company
competes primarily with other specialty stores, independent electronics and
appliance stores, department stores, mass merchandisers, discount stores and
catalog showrooms. To some extent, the Company also competes with drugstores,
supermarkets and others that make incidental sales of electronics products.
Competitors of the Company include Circuit City Stores, Best Buy, Sears,
Montgomery Ward, Target, several smaller electronics chains and independent
stores.
The Company's strategy is to compete by being a value-added
retailer, offering a broad selection of top national brand name merchandise sold
at competitive prices by a friendly, knowledgeable and motivated team of
associates.
Seasonality
As is the case with many other retailers, the Company's sales are
higher during the Christmas season than during other periods of the year.
Employees
At September 30, 1997, the Company employed approximately 4,200
persons, of whom 700 were salaried, 1,100 were hourly non-selling associates and
2,400 were salespeople on commission against a minimum guarantee. At September
30, 1997, approximately 300 of its employees were employed in the Company's
executive offices; the balance were employed in its stores, distribution center,
home delivery center, and service centers. There are no collective bargaining
agreements covering any of the Company's employees. The Company has never
experienced a strike or work stoppage and management believes that relations
with its employees are excellent.
Trademarks and Service Marks
The Company has registered the name "THE GOOD GUYS!" as a
trademark with the United States Patent and Trademark Office and the State of
California. Federal registration of the trademark extends through 2000 and is
renewable indefinitely. The Company has registered "THE GOOD GUYS!" as a service
mark through 1999, which is renewable indefinitely. The Company's name is an
integral part of its advertising and is important to its business.
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ITEM 2. PROPERTIES
Of the Company's stores in California, 19 are located in the San
Francisco Bay area, 25 in the greater Los Angeles/Orange County metropolitan
area, 3 in Sacramento, 7 in San Diego; and one each in Bakersfield, Fresno,
Modesto and Stockton, California. In addition, THE GOOD GUYS! operates 9 stores
in the State of Washington, 5 stores in Oregon and 4 stores in Nevada. All of
the stores are leased under leases that have expiration dates (assuming that
lease options are exercised) in years ranging from 1999 to 2038.
The Company's operations center is located in a 460,000 square
foot facility in Hayward, California under a lease, the term of which expires
(assuming that lease options are exercised) in 2011.
The Company also maintains executive offices in Brisbane,
California at 7000 Marina Boulevard under a lease, the term of which expires
(assuming that lease options are exercised) in 2004.
ITEM 3. LEGAL PROCEEDINGS
On September 7, 1995, the Company was named as a defendant in two
purported class actions, entitled Long v. Packard Bell Electronics, et al., Case
No. 7515706, filed in Orange County Superior Court on August 21, 1995, and
Sutter v. Acer America Corporation, et al., Case No. 95A505027, Sacramento
County Superior Court. In both cases, plaintiffs have named a large number of
computer manufacturers, wholesalers and retailers, alleging that since 1986 the
defendants have misrepresented to the public the screen size of certain computer
monitors. A settlement has been entered into between the plaintiffs and most of
the defendants, including the Company, under which the Company has agreed to
make a payment to resolve the litigation that is not material to the financial
condition of the Company. The settlement has been preliminarily approved by the
Court and is awaiting final approval.
On July 19, 1996, McBride-Newell, Inc. dba Carphones, Inc. and
numerous other individuals and entitled McBride-Newell, Inc., et al. v.
Mobilworks, Inc. et al., San Diego Superior Court Case No. 695897. Plaintiffs,
who are small agents of the cellular service providers offering cellular
telephone products and service in the San Diego area, allege a conspiracy to
sell cellular telephone equipment below cost with the intent to drive the
plaintiffs out of business. Plaintiffs seek treble damages under the California
antitrust laws. Defendants, including the Company, have filed a motion to
dismiss the case as a sanction for abuse of the discovery process. The Company
believes it has meritorious defenses to the claims alleged in the lawsuit and
intends to defend the action vigorously.
On or about July 22, 1996, Joe Quattrini dba Sand Canyon Cellular
and numerous other individuals and entities filed a complaint against the
Company and 20 other named defendants entitled Quattrini, et al. v. Pana-Pacific
Corp., et al., Orange County Superior Court Case No. 766649. Plaintiffs, who are
small agents or subagents of the cellular service providers offering cellular
telephone products and service in the Orange County area, allege a conspiracy to
sell cellular telephone equipment
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below cost with the intent to drive plaintiffs out of business. Plaintiffs seek
treble damages under the California antitrust laws. Defendants, including the
Company, have filed demurrers to the complaint seeking dismissal. The Company
believes it has meritorious defenses to the claims alleged in the lawsuit and
intends to defend the action vigorously.
In November 1995, the Company, along with several other consumer
electronics retailers, was named as a defendant in an action captioned as Littau
et al. v. Circuit City, et al., No. 973978, San Francisco Superior Court.
Plaintiffs' complaint, which is styled as a class action, alleges that the
Company has engaged in false advertising and unfair competition in the manner in
which it has advertised personal computers sold with pre-installed, "bundled"
software. Plaintiff's primary allegation is that the Company's advertisement
overstated the value of this software. The Company believes it has meritorious
defenses to the claims alleged in the suit and also believes it has meritorious
claims for indemnification from the computer manufacturers from which it has
purchased personal computers. However, the Company, along with other Defendants,
has engaged in extensive settlement negotiations in order to resolve the
litigation. A draft settlement agreement has been prepared, but has not yet been
executed by the parties and any final settlement would be subject to court
approval. If the suit were to be settled on the basis set forth in the draft
settlement agreement, the settlement would not have a material effect on the
Company's financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
Not Applicable.
ITEM 4A. EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company and their respective ages
and positions with the Company are as follows:
Name Age Position
- ---- --- --------
Robert A. Gunst 49 President and Chief Executive Officer
Dennis C. Carroll 38 Senior Vice President, Finance and
Administration, Chief Financial Officer and
Secretary
Jayne Spiegelman 42 Senior Vice President, Merchandising
Brad S. Bramy 45 Vice President, Advertising
John G. Duken 37 Vice President, Operations
Kevin M. McNeill 44 Vice President, Sales
William B. Perlstein 47 Vice President, Sales
Cathy Stauffer 38 Vice President, Quality
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Gregory L. Steele 50 Vice President, Real Estate and
Development
Geradette M. Vaz 44 Vice President, Human Resources
All executive officers are elected by and serve at the discretion
of the Board of Directors.
Robert A. Gunst became the President and Chief Operating Officer
of the Company in May 1990 and its Chief Executive Officer in January 1993.
Brad S. Bramy was named Vice President, Advertising in May 1995.
Prior to holding this position, Mr. Bramy served in various positions in the
advertising department since joining the Company in 1983.
Dennis C. Carroll, who had served as controller of the Company
from 1990 to 1993, rejoined the Company as Vice President, Chief Financial
Officer and Secretary in May 1996. In September 1997, Mr. Carroll was named
Senior Vice President, Finance and Administration and retained his position as
Chief Financial Officer and Secretary. Mr. Carroll served as Vice President and
Chief Financial Officer of Beverages, & more!, a specialty retailer, from
February 1994 to April 1996 and as Vice President, Controller and Treasurer of
Supercuts, Inc., an owner and franchisor of hair salons, from May 1993 to
January 1994.
Jayne Spiegelman joined the Company in August 1997 as Vice
President of Merchandising. From 1995 to 1997, Ms. Spiegelman was a Strategy
Consultant with Andersen Consulting, serving retail clients worldwide. Prior to
joining Andersen Consulting, Ms. Spiegelman served in a variety of senior
merchandising management positions at Federated Department Stores and Macy's
West.
John G. Duken joined the Company in September 1993 as General
Manager of Store Operations and was named Vice President, Store Operations in
June 1994. In July 1997, Mr. Duken was named Vice President, Operations. From
June 1988 to August 1993 he held several positions with Circuit City Stores,
Inc., including Divisional Operations Manager of the Northern California
Division and General Operations Manager of the Midwest Division.
Kevin M. McNeill became Vice President, Sales in April 1997. From
1981 until April 1997, Mr. McNeill served the Company in various positions in
the store organization.
William B. Perlstein joined the Company as Regional Sales Manager
in March 1987, was named Vice President, Store Operations in January 1993, and
was named Vice President, Stores in June 1993.
Cathy Stauffer became Vice President, Quality in August 1997.
From January 1989 to April 1993, Ms. Stauffer served as Vice President,
Advertising of the Company. She returned to the Company as a consultant in
January 1997 and was named Vice President, Quality in August 1997.
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Gregory L. Steele has served as Vice President, Real Estate and
Development since April 1986.
Geradette M. Vaz has served as Vice President, Human Resources
since July 1986.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND
RELATED SECURITY HOLDER MATTERS
Incorporated by reference from page 24 of the Company's 1997
Annual Report to Shareholders.
ITEM 6. SELECTED FINANCIAL DATA
Incorporated by reference from page 13 of the Company's 1997
Annual Report to Shareholders.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Incorporated by reference from pages 10 through 12 of the
Company's 1997 Annual Report to Shareholders.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Incorporated by reference from pages 14 through 23 of the
Company's 1997 Annual Report to Shareholders.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not Applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information relating to directors of the Company required to
be furnished pursuant to this item is incorporated by reference from portions of
the Company's definitive Proxy Statement for its annual meeting of shareholders
to be filed with the Securities and Exchange Commission pursuant to Regulation
14A within 120 days after September 30, 1997 (the "Proxy Statement") under the
caption "Election of Directors." Certain information relating to executive
officers of the Company is set forth in Item 4A of Part I of this Form 10-K
under the caption "Executive Officers of Registrant."
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ITEM 11. EXECUTIVE COMPENSATION
Incorporated by reference from portions of the Proxy Statement
under the captions "Compensation of Directors and Executive Officers" and
"Certain Relationships and Related Transactions."
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated by reference from portions of the Proxy Statement
under the captions "Certain Shareholders" and "Compensation of Directors and
Executive Officers."
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated by reference from portions of the Proxy Statement
under the caption "Compensation of Directors and Executive Officers" and
"Certain Relationships and Related Transactions."
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)1. FINANCIAL STATEMENTS
Included in Part II of this report by incorporation by
reference from the 1997 Annual Report to Shareholders:
Independent Auditors' Report (page 23 of the 1997
Annual Report to Shareholders)
Consolidated statements of operations for each of
the three years in the period ended September 30,
1997 (page 15 of the 1997 Annual Report to
Shareholders)
Consolidated balance sheets as of September 30,
1997 and 1996 (page 14 of the 1997 Annual Report to
Shareholders)
Consolidated statements of shareholders' equity for
each of the three years in the period ended
September 30, 1997 (page 16 of the 1997 Annual
Report to Shareholders)
Consolidated statements of cash flows for each of
the three years in the period ended September 30,
1997 (page 17 of the 1997 Annual Report to
Shareholders)
Notes to consolidated financial statements (pages
18 through 22 of the 1997 Annual Report to
Shareholders)
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(a)2. FINANCIAL STATEMENT SCHEDULES
All schedules are omitted because they are not required (in some
cases because the information is not material), or are not
applicable, or the information is included in the financial
statements.
(a)3. EXHIBITS
3.1 Certificate of Incorporation. (Exhibit 3.1 to the Company's Form 8-K
Report for March 4, 1992; incorporated herein by reference.)
3.2 Bylaws. (Exhibit 3.2 to the Company's Form 8-K Report for March 4, 1992;
incorporated herein by reference.)
10.1 1985 Stock Option Plan, as amended.* (Exhibit 10.1 to the Company's Form
10-K Annual Report for the fiscal year ended September 30, 1997;
incorporated herein by reference.)
10.2 Form of Nonqualified Stock Option Agreements.* (Exhibit 4.3 to the
Company's Registration Statement on Form S-8 as filed on January 28, 1991,
registration number 33-38749; incorporated herein by reference.)
10.3 Letter Agreement with Robert A. Gunst, dated March 30, 1990.* (Exhibit
10.14 to the Company's Form 10-K Annual Report for its fiscal year ended
September 30, 1990; incorporated herein by reference.)
10.4 Employee Stock Purchase Plan, as amended.* (Exhibit 10.7 to the Company's
Form 10-K Annual Report for the fiscal year ended September 30, 1997;
incorporated herein by reference.)
10.5 Amended and Restated 1994 Stock Incentive Plan.*
10.6 Assignment and Assumption Agreement, dated September 26, 1995, by and
between The Good Guys, Inc. and The Good Guys - California, Inc. (Exhibit
10.18 to the Company's Form 10-K Annual Report for the fiscal year ended
September 30, 1995; incorporated herein by reference.)
10.7 Operating Agreement, dated effective as of April 15, 1995, between MTS,
Inc., a California corporation, dba Tower Records/Book/Video, and The Good
Guys, Inc., a Delaware corporation. (Exhibit 10.20 to the Company's Form
10-K Annual Report for the fiscal year ended September 30, 1995;
incorporated herein by reference.)
10.8 Loan Agreement between the Good Guys-California, Inc. and Wells Fargo
Bank, National Association, as Agent, dated as of September 29, 1997.
11.1 Statement re Computation of Per Share Earnings.
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*Compensatory plan or arrangement.
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13.1 Annual Report to Shareholders for fiscal year ended September 30, 1997
(pages incorporated by reference).
21.1 List of Subsidiaries.
23.1 Independent Auditors' Consent.
24.1 Powers of Attorney.
27.1 Financial Data Schedule.
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(b) REPORTS ON FORM 8-K.
There were no reports on Form 8-K for the quarter ended September
30, 1997.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Dated: December 22, 1997 THE GOOD GUYS, INC.
By /s/ ROBERT A. GUNST
--------------------------------------
Robert A. Gunst
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ ROBERT A. GUNST Director, President and December 22, 1997
- ------------------------- Chief Executive Officer
(Robert A. Gunst) (Principal Executive Officer)
/s/ DENNIS C. CARROLL Senior Vice President, December 22, 1997
- ------------------------- Finance and Administration,
(Dennis C. Carroll) and Chief Financial Officer
(Principal Financial Officer)
/s/ LESLIE S. BENSON Controller (Principal December 22, 1997
- ------------------------- Accounting Officer)
(Leslie S. Benson)
/s/ STANLEY R. BAKER* Director December 22, 1997
- -------------------------
(Stanley R. Baker)
/s/ RUSSELL M. SOLOMON* Director December 22, 1997
- -------------------------
(Russell M. Solomon)
/s/ JOHN E. MARTIN* Director December 22, 1997
- -------------------------
(John E. Martin)
/s/ W. HOWARD LESTER* Director December 22, 1997
- -------------------------
(W. Howard Lester)
/s/ HORST H. SCHULZE* Director December 22, 1997
- -------------------------
(Horst H. Schulze)
*By /s/ DENNIS C. CARROLL
- -------------------------
Dennis C. Carroll,
Attorney-in-Fact
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EXHIBIT INDEX
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Number Description
10.5 Amended and Restated 1994 Stock Incentive Plan.
10.8 Loan Agreement between the Good Guys-California, Inc. and Wells Fargo
Bank, National Association, as Agent, dated as of September 29, 1997.
11.1 Statement re Computation of Per Share Earnings.
13.1 Annual Report to Shareholders for fiscal year ended September 30,
1997 (pages incorporated by reference).
21.1 List of Subsidiaries.
23.1 Independent Auditors' Consent.
24.1 Powers of Attorney.
27.1 Financial Data Schedule
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