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UNITED STATES 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 April 30, 2005
[ ] 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 1-4626
-----------------------------
Harvey Electronics, Inc.
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(Exact name of small business registrant as specified in its charter)
New York 13-1534671
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(State of other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
205 Chubb Avenue, Lyndhurst, New Jersey, 07071_
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(Address of principal executive offices and zip code)
201-842-0078
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(Registrant's telephone number)
Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past 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 whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
As of June 14, 2005, 3,508,584 shares of the registrant's common stock, par
value $.01 per share, were outstanding.
Harvey Electronics, Inc.
FORM 10-Q
INDEX
PART I. Financial Information
Item 1. Financial Statements: Page No.
Statements of Operations (Unaudited) - Twenty-six Weeks Ended
April 30, 2005 and May 1, 2004 and Thirteen Weeks Ended April 30,
2005 and May 1, 2004........................................................ 3
Balance Sheets - April 30, 2005 (Unaudited) and October 30, 2004
(Restated)....................................................................4
Statement of Shareholders' Equity (Unaudited) - Twenty-six Weeks Ended
April 30, 2005...............................................................5
Statements of Cash Flows (Unaudited) - Twenty-six Weeks Ended April 30,
2005 and May 1, 2004........................................................6
Notes to Financial Statements (Unaudited)......................................7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations ..............................................13
Item 4. Disclosure Controls and Procedures .............................21
PART II. Other Information
Item 1. Legal Matters...................................................23
Item 6. Exhibits and Reports on Form 8-K................................25
Signatures ...................................................................26
Exhibit Number 31.1...........................................................27
Exhibit Number 31.2...........................................................29
Exhibit Number 32.1...........................................................31
Exhibit Number 32.2...........................................................32
PART I. Financial Information
Harvey Electronics, Inc.
Statements Of Operations
(Unaudited)
Item 1. Financial Statements
Twenty-six Weeks Twenty-six Weeks Thirteen Weeks Thirteen Weeks
Ended Ended Ended Ended
April 30, May 1, April 30, May 1,
2005 2004 2005 2004
-------------------- --------------------- ------------------- ------------------
Net sales $21,812,894 $22,741,970 $9,727,880 $10,346,078
Other income 10,000 22,160 4,000 17,743
-------------------- --------------------- ------------------- ------------------
21,822,894 22,764,130 9,731,880 10,363,821
-------------------- --------------------- ------------------- ------------------
Cost of sales 12,670,690 13,378,526 5,682,826 5,978,032
Selling, general and administrative expenses 8,902,544 8,549,481 4,298,582 4,171,374
Interest expense 98,679 110,745 53,436 59,325
-------------------- --------------------- ------------------- ------------------
21,671,913 22,038,752 10,034,844 10,208,731
-------------------- --------------------- ------------------- ------------------
Income (loss) before income taxes (benefit) 150,981 725,378 (302,964) 155,090
Income taxes (benefit) 62,000 290,000 (118,000) 70,000
-------------------- --------------------- ------------------- ------------------
Net income (loss) 88,981 435,378 (184,964) 85,090
Preferred Stock dividend requirement 26,904 35,148 12,750 17,574
-------------------- --------------------- ------------------- ------------------
Net income (loss) applicable to Common Stock $62,077 $400,230 ($197,714) $67,516
==================== ===================== =================== ==================
Net income (loss) per share applicable to
common shareholders:
Basic $0.02 $0.12 ($0.06) $0.02
==================== ===================== =================== ==================
Diluted $0.02 $0.11 ($0.06) $0.02
==================== ===================== =================== ==================
Shares used in the calculation of net income
(loss) per common share:
Basic 3,482,285 3,324,525 3,508,584 3,324,525
==================== ===================== =================== ==================
Diluted 3,684,469 4,035,397 3,508,584 3,394,418
==================== ===================== =================== ==================
See accompanying notes to financial statements.
Harvey Electronics, Inc.
Balance Sheets
April October
30, 2005 30, 2004 (1)
(Unaudited)
--------------- ------------------
Assets
Current assets:
Cash and cash equivalents $17,490 $15,990
Accounts receivable, less allowance of $20,000 and $20,000 459,563 898,088
Inventories 7,456,813 7,287,564
Prepaid expenses and other current assets 534,131 189,669
Deferred taxes 301,000 301,000
--------------- ------------------
Total current assets 8,768,997 8,692,311
--------------- ------------------
Property and equipment:
Leasehold improvements 3,990,005 3,459,826
Furniture, fixtures and equipment 2,683,990 2,355,549
Internet website 456,870 456,870
--------------- ------------------
7,130,865 6,272,245
Less accumulated depreciation and amortization 4,272,569 3,960,341
--------------- ------------------
2,858,296 2,311,904
Equipment under capital leases, less accumulated amortization
of $394,117 and $391,549 3,704 6,272
Intangible asset-software 163,649 -
Deferred taxes 987,000 1,049,000
Goodwill 125,000 125,000
Reorganization value in excess of amounts allocable to
identifiable assets 283,440 283,440
Other assets, less accumulated amortization of $285,740 and $273,398 307,924 330,736
--------------- ------------------
Total assets $13,498,010 $12,798,663
=============== ==================
Liabilities and shareholders' equity
Current liabilities:
Trade accounts payable $2,458,953 $2,066,014
Customer deposits 1,647,998 1,955,440
Accrued expenses and other current liabilities 1,198,950 1,425,988
Income taxes payable 1,296 48,800
Cumulative Preferred Stock dividends payable 16,802 23,432
Current portion of long-term debt 53,942 -
-------------- ------------------
Total current liabilities 5,377,941 5,519,674
--------------- ------------------
Long-term liabilities:
Revolving line of credit facility 2,457,143 1,825,320
Long-term debt 96,621 -
Deferred rent 334,450 283,891
--------------- ------------------
Total long-term liabilities 2,888,214 2,109,211
--------------- ------------------
Commitments and contingencies
Shareholders' equity:
8-1/2% Cumulative Convertible Preferred Stock, par value $1,000 per
share; authorized 10,000 shares; issued and outstanding 600 shares-- 2005,
827 shares-- 2004, (aggregate liquidation preference $600,000--
2005, $827,000--2004) 275,682 379,982
Common Stock, par value $.01 per share; authorized 10,000,000 shares;
issued and outstanding 3,508,584 shares--2005 and 3,324,525 shares--2004 35,086 33,245
Additional paid-in capital 8,436,384 8,333,925
Accumulated deficit (3,515,297) (3,577,374)
--------------- ------------------
Total shareholders' equity 5,231,855 5,169,778
--------------- ------------------
Total liabilities and shareholders' equity $13,498,010 $12,798,663
=============== ==================
(1)--Derived from the audited restated balance sheet at October 30, 2004.
See accompanying notes to financial statements.
Harvey Electronics, Inc.
Statement of Shareholders' Equity
(Unaudited)
Additional Total
Preferred Stock Common Stock Paid-in Accumulated Shareholders'
----------------------- --------------------------
Shares Amount Shares Amount Capital Deficit Equity
-------- -------------- ------------ ---------------------------------------------------------
Balance at October 30, 2004 (restated) 827 $ 379,982 3,324,525 $ 33,245 $ 8,333,925 $(3,577,374) $ 5,169,778
Net income for the period - - - - - 88,981 88,981
Preferred Stock dividend - - - - - (26,904) (26,904)
Conversion of Preferred Stock to
Common Stock (227) (104,300) 184,059 1,841 102,459 - 0
---- -------- ------- ----- ------- ------- -------
Balance at April 30, 2005 600 $ 275,682 3,508,584 $ 35,086 $ 8,436,384 $(3,515,297) $ 5,231,855
=== =========== ========= =========== =========== =========== ===========
See accompanying notes to financial statements.
Harvey Electronics, Inc
Statements of Cash Flows
(Unaudited)
Twenty-six Weeks Twenty-six Weeks
Ended Ended
April 30, May 1,
2005 2004
----------------- ----------------
Operating activities
Net income $88,981 $435,378
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 327,138 334,020
Deferred tax expense/income tax equivalent provision 62,000 290,000
Straight-line impact of rent escalations 50,559 24,438
Miscellaneous 10,470 12,994
Changes in operating assets and liabilities:
Accounts receivable 438,525 214,126
Inventories (169,249) (152,006)
Prepaid expenses and other current assets (109,134) (31,211)
Trade accounts payable 182,938 (74,123)
Customer deposits (307,442) 107,821
Accrued expenses, other current liabilities
and income taxes (509,870) (252,286)
------------------ -----------------------
Net cash provided by operating activities 64,916 909,151
------------------ -----------------------
Investing activities
Purchases of property and equipment excluding
Internet website development (478,861) (131,427)
Intangible asset-software (163,649) 0
Purchases of other assets 0 (1,510)
------------------ -----------------------
Net cash used in investing activities (642,510) (132,937)
------------------ -----------------------
Financing activities
Payments on revolving credit facility (23,611,627) (27,283,990)
Borrowings on revolving credit facility 24,243,450 26,612,405
Preferred Stock dividends paid (33,534) (35,436)
Principal payments on note payable (19,195) -
Fees paid in connection with new credit facility - (67,704)
------------------ -----------------------
Net cash provided by (used) in financing activities 579,094 (774,725)
------------------ -----------------------
Increase in cash and cash equivalents 1,500 1,489
Cash and cash equivalents at beginning of period 15,990 16,000
------------------ -----------------------
Cash and cash equivalents at end of period $17,490 $17,489
================== =======================
Supplemental cash flow information:
Interest paid $90,000 $128,000
================== =======================
Taxes paid $48,000 $110,000
================== =======================
See accompanying notes to financial statements.
Harvey Electronics, Inc.
Notes to Financial Statements
April 30, 2005
(Unaudited)
1. Basis of Presentation and Description of Business
Basis of Presentation
The accompanying unaudited interim financial statements of Harvey Electronics,
Inc. (the "Company") have been prepared in accordance with accounting principles
generally accepted in the United States of America for interim financial
reporting and with the instructions to Form 10-Q. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
Management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included.
Operating results for the twenty-six week period ended April 30, 2005 are not
necessarily indicative of the results that may be expected for the fifty-two
weeks ending October 29, 2005. Net sales and operating results for the Company's
first quarter of its fiscal year are positively affected by the holiday shopping
season. For further information, refer to the financial statements and footnotes
thereto included in the Company's Annual Report on Form 10-K for the year ended
October 30, 2004.
The preparation of the unaudited interim financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures at the date of the interim
financial statements and the reported amounts of revenues and expenses during
the reporting period. Management bases its estimates on certain assumptions,
which they believe are reasonable in the circumstances, and does not believe
that any change in those assumptions would have a significant effect on the
financial position or results of operations. Actual results could differ from
those estimates and assumptions.
Certain items in the audited balance sheet as of October 30, 2004 have been
adjusted and restated. See Note 8 for additional information.
Description of Business
The Company is a specialty retailer and custom installer of high quality
audio/video consumer electronics and home theater products in the Metropolitan
New York area. Operations of the Company consist solely of this single segment.
The Company's fiscal year ends the Saturday closest to October 31.
Net sales includes the sale of goods to customers and custom installation
revenue. Retail sales are recorded at the time of the sale to the customer.
Custom installation revenue, which is comprised of both the sale of products and
the labor in connection with the installation of the products, are recorded in
accordance with the provisions of EITF 00-21, "Revenue Arrangements with
Multiple Deliverables". The revenue related to the sale of the products is
recognized when the product is delivered to the customers. The revenue related
to the labor in
Harvey Electronics, Inc.
Notes to Financial Statements
April 30, 2005
(Unaudited)
connection with the installation of the products, is recorded when the service
has been substantially performed.
In addition, the Company sells extended warranty contracts on behalf of a third
party provider. The profit on extended warranty sales is considered commission
at the time of sale. The net amount earned on these sales, which is not
significant, is recorded in net sales, in accordance with EITF 99-19, "Reporting
Revenue Gross as a Principal Versus Net as an Agent."
2. Revolving Line of Credit Facility
In November 2003, the Company entered into a new five-year $7.5 million credit
facility with Webster Business Credit Corporation ("Webster"), a subsidiary of
Connecticut based Webster Bank. This new credit facility replaced the line of
credit facility with Wells Fargo Retail Finance ("Wells Fargo"). Under the new
credit facility, the Company can borrow up to $7.5 million based upon lending
formulas calculated on eligible credit card receivables and inventory, less
certain reserves, as defined. The Webster credit facility expires November 21,
2008.
The interest rate on all borrowings under the credit facility is either 0.25%
over Webster Bank's prime rate (5.75% at April 30, 2005) or LIBOR plus 2.75%, at
the Company's option. The Company paid Webster a $25,000 commitment fee in two
equal installments of $12,500, on November 21, 2003 and November 21, 2004,
respectively. Under the credit facility, the Company pays Webster a reduced
maintenance fee of $1,000 per month and a monthly unused line fee, as defined in
the credit facility. Simultaneously, with the closing of the Webster credit
facility, the Company paid all outstanding amounts due to Wells Fargo,
aggregating $2,504,000, and Wells Fargo's senior security interest in the
Company's assets was terminated.
In connection with the credit facility, the Company granted Webster a senior
security interest in all of the Company's assets. The credit facility provides
Webster with rights of acceleration upon the occurrence of certain customary
events of default. The Company is restricted from paying dividends on its Common
Stock, retiring or repurchasing its Common Stock and entering into additional
indebtedness (as defined).
Pursuant to the credit facility, the Company cannot exceed certain advance rates
on eligible inventory and must maintain certain monthly and quarterly levels of
earnings before interest, taxes, depreciation and amortization. Additionally,
the Company's annual capital expenditures cannot exceed a predetermined amount.
The Company was in compliance with all Webster covenants at April 30, 2005.
As the credit facility expires in four years and does not include both a
subjective acceleration clause and a lock box arrangement, in accordance with
EITF 95-22, the Company classified the balance outstanding, at April 30, 2005
($2,457,000), under the credit facility as a long-term liability.
Harvey Electronics, Inc.
Notes to Financial Statements
April 30, 2005
(Unaudited)
3. Net Advertising Expense
In accordance with EITF 02-16, "Accounting by a Customer for Certain
Consideration Received from a Vendor" ("EITF 02-16") which addresses how and
when to reflect consideration received from suppliers in the financial
statements, the Company's advertising expense, net of cooperative advertising
allowances, is charged to operations when the advertising takes place. Net
advertising expense is included in Selling, general and administrative expenses
in the Company's Statements of Operations.
Manufacturer rebates received by the Company are recorded based on the quarterly
estimated progress in earning such rebates. The Company's estimates, to record
these rebates are based on historical information and current programs with such
vendors.
The following represents the gross amounts of advertising expenditures,
cooperative advertising reimbursements and net advertising expense for the
periods reported:
Six Months Ended Second Quarter Ended
April 30, 2005 May 1, 2004 April 30, 2005 May 1, 2004
-------------- ----------- -------------- -----------
Gross advertising expenditures $1,535,000 $1,467,000 $570,000 $646,000
Cooperative advertising
reimbursements 1,065,000 1,132,000 425,000 516,000
--------- --------- --------- ---------
Net advertising expense $ 470,000 $ 335,000 $ 145,000 $130,000
========== ========== ========= ========
4. Income (Loss) Per Share
Basic and diluted earnings (loss) per share are calculated in accordance with
SFAS No. 128, "Earnings Per Share" ("SFAS No. 128"). Basic earnings (loss) per
share excludes the dilutive effects of options and convertible preferred stock.
Diluted earnings (loss) per share includes only the dilutive effects of common
stock equivalents such as stock options and convertible preferred stock.
The following table sets forth the computation of basic and diluted earnings
(loss) per share for the periods presented pursuant to SFAS No. 128.
Twenty-Six Weeks Ended Thirteen Weeks Ended
April 30, 2005 May 1, 2004 April 30, 2005 May 1, 2004
-------------- ----------- -------------- -----------
Numerator:
Net income (loss) $ 88,981 $ 435,378 $ (184,964) $ 85,090
Dividends on convertible preferred stock
(26,904) (35,148) (12,750) (17,574)
----------- ----------- ----------- -----------
Numerator for basic earnings per share
- - income(loss) attributable to
common stockholders 62,077 400,230 (197,714) 67,516
Effect of dilutive securities:
Dividends on convertible preferred
stock - 35,148 - -
----------- ----------- ----------- -----------
Numerator for diluted earnings per
share - income (loss) available to
common stockholders after
assumed conversion $ 62,077 $ 435,378 $ (197,714) $ 67,516
Denominator:
Denominator for basic earnings per
share - weighted average shares
outstanding during the period 3,482,285 3,324,525 3,508,584 3,324,525
Effect of dilutive securities:
Stock options 202,184 40,313 - 69,893
Convertible preferred stock - 670,559 - -
----------- ----------- ----------- -----------
Denominator for diluted earnings per
share - adjusted weighted average
shares and assumed conversions 3,684,469 4,035,397 3,508,584 3,394,418
=========== =========== =========== ===========
Basic net income (loss) per share $ .02 $ .12 $ (.06) $ .02
=========== =========== =========== ===========
Diluted net income (loss) per share $ .02 $ .11 $ (.06) $ .02
=========== =========== =========== ===========
The conversion price of the Company's preferred stock is $1.2333 (see note 8).
Convertible preferred stock was not included in the diluted earnings per share
calculation for the twenty-six and thirteen weeks ended April 30, 2005, as well
as the thirteen weeks ending May 1, 2004, as they were anti-dilutive.
Harvey Electronics, Inc.
Notes to Financial Statements
April 30, 2005
(Unaudited)
5. Income Taxes (Benefit)
In connection with the Company's emergence from its reorganization proceeding
under Chapter 11 of the United States Bankruptcy Code on December 26, 1996, the
Company adopted Fresh Start Accounting in accordance with AICPA Statement of
Position 90-7, "Financial Reporting by Entities in Reorganization under the
Bankruptcy Code." Fresh Start Accounting requires that the Company report an
income tax equivalent provision when there is book income and a
pre-reorganization net operating loss carryforward. This requirement applies
despite the fact that the Company's pre-reorganization net operating loss
carryforward will be utilized to reduce the related income tax payable. The
current and any future year benefit arising from utilization of the
pre-reorganization carryforward is not reflected as a reduction of the tax
equivalent provision in determining net income, but instead is recorded first as
a reduction of reorganization value in excess of amounts allocable to
identifiable assets until exhausted and thereafter as a direct addition to
paid-in-capital.
For the twenty-six weeks ended May 1, 2004, the income tax equivalent provision
and the associated reduction of reorganization value in excess of amounts
allocable to identifiable assets amounted to $290,000 (40.0% effective tax
rate). For the second quarter of fiscal 2004, the Company recorded an income tax
equivalent provision of $70,000 (45.1% effective tax rate).
For the twenty-six weeks ended April 30, 2005, the Company's income tax
provision represents deferred tax expense of $62,000 (41.1% effective tax rate).
As a result, the Company's long-term deferred tax asset was reduced by the same
amount. This income tax provision will not require a significant use of the
Company's cash. For the second quarter of fiscal 2005, the Company recorded a
deferred tax benefit of $118,000 (38.9% effective tax benefit).
6. Goodwill and Other Intangible Assets
In accordance with Statements of Financial Accounting Standard ("SFAS") SFAS No.
142, Goodwill and Other Intangible Assets, goodwill and intangible assets deemed
to have indefinite lives are no longer amortized but are subject to annual
impairment tests in accordance with SFAS 142. Other intangible assets continue
to be amortized over their estimated useful lives.
The Company follows the provisions of SFAS No. 142, and accordingly, both
goodwill and the Company's other intangible asset, reorganization value in
excess of amounts allocable to identifiable assets, are no longer amortized but
are instead subject to an annual impairment test.
In the second quarter of fiscal 2005 and fiscal 2004, the Company engaged a
qualified independent firm to perform a valuation of the Company and to prepare
the necessary goodwill impairment analysis. After completion, this independent
firm found no impairment of the Company's goodwill and other intangible asset,
reorganization value in excess of amounts allocable to identifiable assets.
Goodwill and this other intangible asset will continue to be tested annually to
identify if impairment has occurred.
Harvey Electronics, Inc.
Notes to Financial Statements
April 30, 2005
(Unaudited)
7. New Store Opening
The Company expects to open its new 4,500 square foot Harvey showroom in
Bridgewater, New Jersey in June 2005. This will be the Company's ninth retail
store.
8. Beneficial Conversion of Preferred Stock
875 shares of 8.5% convertible preferred stock were originally issued in
conjunction with the Company's reorganization, effective October 26, 1996. As
specified in the Company's By-laws, the preferred stock has a conversion
feature.
Prior to January 1, 2001, 50% of the preferred stock was convertible at a price
of $6.00 per share and 50% of the preferred stock was convertible at $7.50 per
share. Commencing January 1, 2001, each share of preferred stock became
convertible into shares of common stock at a conversion price equal to the
average of the closing bid price of one share of common stock over the 45
trading days preceding January 1, 2001, if traded on the NASDAQ SmallCap Market.
This new conversion price was set at $1.2333 on January 1, 2001.
When the preferred stock was issued in October 1996, the conversion reset
provision at January 1, 2001 represented a contingent event. In accordance with
EITF Issue No. 00-27, Application of Issue No. 98-5 to Certain Convertible
Instruments, Issue 7, paragraph 23, the Company has determined that a beneficial
conversion feature existed at the issuance date. In accordance with EITF No.
00-27, the Company recalculated the intrinsic value of the conversion feature,
which was reset on January 1, 2001, and has determined that retained earnings
should have been reduced by $711,000, while additional paid-in capital should
have been increased by the same amount in fiscal 2001. This adjustment
ultimately had no effect on shareholders' equity or earnings. In fiscal 2001,
the $711,000 would have been recorded as a dividend to the preferred
shareholders and would have impacted the loss per share applicable to common
shareholders. In fiscal 2001, the Company reported a loss and, as a result, the
loss per share applicable to common shareholders would have been increased to
$.62 per share from $.40 per share. As this adjustment only impacted certain
components of shareholders' equity, having no effect on total equity and no
effect on earnings, the Company corrected the equity accounts in the second
quarter of fiscal 2005, and in addition restated the balance sheet as of October
30, 2004, for comparative purposes. Financial statements prior to fiscal year
2004 were not restated.
Harvey Electronics, Inc.
Notes to Financial Statements
April 30, 2005
(Unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operatons
The following management's discussion and analysis and this Form 10-Q contain
forward-looking statements, which involve risks and uncertainties. When used
herein, the words "anticipate," "believe," "estimate," and "expect" and similar
expressions as they relate to the Company or its management are intended to
identify such forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. The Company's actual results,
performance or achievements could differ materially from the results expressed
in or implied by these forward-looking statements. Historical results are not
necessarily indicative of trends in operating results for any future period.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date the statement was made.
Results of Operations
General
The following discussion should be read in conjunction with the Company's
audited financial statements for the fiscal years ended October 30, 2004 and
November 1, 2003, included in the Company's Annual Report on Form 10K.
Twenty-Six and Thirteen Weeks Ended April 30, 2005 as Compared to Twenty-Six and
Thirteen Weeks Ended May 1, 2004
Net Income (loss). The Company's pretax income for the twenty-six weeks ended
April 30, 2005 was $151,000 as compared to $725,000 for the same period last
year. Net income for the twenty-six weeks ended April 30, 2005 was $89,000 as
compared to $435,000 for the same period last year.
The Company reported a pretax loss of $303,000 for its second quarter ended
April 30, 2005, as compared to pretax income of $155,000 for the same quarter
last year. The net loss for the second quarter of fiscal 2005 was $185,000, as
compared to net income of $85,000 for the same quarter last year.
The Company believes the non-GAAP measurement of earnings before interest,
taxes, depreciation and amortization ("EBITDA") is an important operational
measure. Depreciation and amortization have historically been significant in
relation to net income (loss). The Company's depreciation and amortization
expense, as is interest expense from its line of credit, primarily relates to
the Company's retail stores and expansion of its retail stores. The Company's
income tax equivalent provisions (benefit) or deferred tax expense (benefit)
have also had a significant impact on earnings, but have primarily not required
the use of the Company's cash, due to the reporting requirements of Fresh Start
Accounting.
Harvey Electronics, Inc.
Notes to Financial Statements
April 30, 2005
(Unaudited)
Net Income (continued)
The Company's Management, Board of Directors and Webster comparably review
EBITDA monthly, quarterly and annually to gauge the Company's performance.
EBITDA may also be used in simple valuation measures of the Company, by its
shareholders and potential investors. Management understands that there are
limitations associated with the use of this non-GAAP measure of EBITDA as
compared to net income. Specifically, a portion of interest expense does relate
to the Company's operations and a portion of the income tax equivalent provision
does relate to the payment of certain state taxes, although these amounts are
not material. Additionally, the Company will not eliminate any other recurring
or non-recurring expenses in its reconciliation of the Company's net income
(loss) to EBITDA.
The following is a reconciliation of the Company's net income (loss) to the
non-GAAP measure of EBITDA:
Twenty-Six Weeks Ended Thirteen Weeks Ended
April 30, 2005 May 1, 2004 April 30, 2005 May 1, 2004
-------------- ----------- -------------- -----------
Net Income (loss) $88,981 $435,378 $(184,964) $85,090
Add back:
Interest expense 98,679 110,745 53,436 59,325
Income taxes (benefit) 62,000 290,000 (118,000) 70,000
Depreciation and amortization 327,138 334,020 168,645 173,682
------- ------- ------- -------
EBITDA $576,798 $1,170,143 $(80,883) $388,097
======== ========== ========= ========
The Company's net income for the first half of fiscal 2005 and 2004, included
net advertising expense of $470,000 and $335,000, respectively. The Company's
net loss for the second quarter of fiscal 2005 included net advertising expense
of $145,000, while net income for the same quarter of fiscal 2004 included net
advertising expense of $130,000. The Company's advertising expenditures for the
first half of fiscal 2005 increased 4.6% to approximately $1,535,000, as
compared to approximately $1,467,000 for the same period last year.
For the twenty-six weeks ended April 30, 2005, the Company recorded an income
tax provision representing deferred tax expense of $62,000 (41.1% effective tax
rate). For the second quarter of fiscal 2005, the Company recorded a deferred
tax benefit of $118,000 (38.9% effective tax benefit).
For the twenty-six weeks ended May 1, 2004, the income tax equivalent provision
recorded by the Company was $290,000 (40% effective tax rate). In the second
quarter of fiscal 2004, the Company recorded an income tax equivalent provision
of $70,000 (45.1% effective tax rate).
The Company's pre-tax loss for the second quarter of fiscal 2005 was negatively
impacted by reduced comparable store sales and a reduction in the gross profit
margin as discussed below.
Harvey Electronics, Inc.
Notes to Financial Statements
April 30, 2005
(Unaudited)
Revenues. For the six months ended April 30, 2005, net sales aggregated $21.8
million, a decrease of $929,000 or 4.1% from the same period last year.
Comparable store sales for the six-month period ended April 30, 2005 decreased
approximately $994,000 or 4.4% from the same period last year.
For the second quarter of fiscal 2005, net sales aggregated $9.7 million, a
decrease of approximately $618,000 or 6% from the same quarter last year.
Comparable store sales for the second quarter of fiscal 2005 decreased
approximately $669,000, or 6.5% from the same quarter last year.
The Company experienced a slowdown in comparable store sales which began in
January 2005. Management believes this slowdown was due to a deceleration of
consumer spending resulting from uncertainties in the financial markets as well
as consumer expectations that flat panel television prices will continue to
decline, thus delaying the purchase decision in this product category. A decline
in comparable store sales during the Company's second quarter has also been
reported by other reporting electronics retailers in the industry.
Overall net sales benefited from the strong sales results of the Company's
Greenvale, Long Island store which continues to benefit from strong custom
installation demand related to various construction projects. This store's
positive results were offset by sales declines at the Company's other existing
stores. The Company's Eatontown and Paramus, New Jersey stores experienced the
greatest decline in sales during the first six months of fiscal 2005 due to a
reduction in both store traffic and custom installation projects. However, the
Company's Paramus store did experience a resurgence in net sales in the second
quarter due to improved store traffic.
As previously disclosed, the Company elected not to renew the lease for its Bang
& Olufsen store in Greenwich, Connecticut, which expired in April 2005.
Management decided to relocate and consolidate this operation within its Harvey
Greenwich store, one block away. This relocation was completed in late April
2005. This store within-a-store concept presents Bang & Olufsen products in a
unique and separate showcase within a Harvey store. The Company is excited about
this new store-within-a-store concept. Management believes this consolidation
will give the Company the ability to retain a strong percentage of its Bang &
Olufsen sales without the overhead of a separate store.
The Company believes it continues to benefit from the strong demand for its
custom installation services. Additionally, despite increased competition,
customer demand continues to be strong for digital video products including
plasma flat screen, LCD flat panel, high-definition and DLP televisions,
integrated remote controls and related custom home installations. Custom
installation projects continue to increase, as a percentage of net sales, and
accounted for 60% of net sales for the first half of fiscal 2005 as compared to
approximately 58% of net sales for the same period last year. Custom
installation sales, including both equipment sales and labor income aggregated
$13.3 million for the first half of fiscal 2005, as compared to $13.4 million
for the same period last year. The Company's custom installation services yield
higher gross profit margins and stronger net profitability, as compared to
normal retail store sales.
Harvey Electronics, Inc.
Notes to Financial Statements
April 30, 2005
(Unaudited)
Revenues (continued)
The Company believes it differentiates itself by offering sophisticated custom
installation services, including programming capabilities that address complex
technological integration issues giving its customers easy remote control
operations for a variety of functions. Management believes installations of
dedicated theater rooms, hard drive video and audio storage and distribution,
lighting systems in the home, as well as network cabling will continue to
attract affluent customers to the Company. The theater room will be the
forefront of the smart home, for the desired integration of all electronics,
lighting, security and networking within the home. These offerings should
continue to benefit sales, enhance gross margins and improve overall store
profitability.
The Company recently launched its new service initiative called "Harvey on
Demand". The Company believes it can expand its service niche in offering custom
labor and other accessories for both Harvey customers and customers that have
purchased products elsewhere, specifically on the internet or from mass
merchants. The Company is currently marketing this new service group and is
offering a forty-eight hour response time to address the needs of a qualified
customer at an additional labor cost. Additionally, the Company has been working
with Cablevision and Time Warner companies in offering and installing their high
speed cable modems and digital cable boxes in conjunction with our installation
services. The Company plans to expand this initiative in fiscal 2005 and beyond.
The Company's marketing efforts increased for the first half of fiscal 2005 as
compared to the same period last year. These efforts included radio, newspaper
and direct mail advertisements, and the continued promotion of the Company's
website, www.harveyonline.com. For the remainder of fiscal 2005, the Company
anticipates that its advertising expenditures will not be materially reduced and
will be used primarily for radio, print and direct mail advertising. The Company
anticipates that it will continue to promote its brand and image to both men and
women. The Company also expects to make certain improvement to its website in
fiscal 2005.
For the remainder of fiscal 2005, the Company also will endeavor to put
additional efforts and resources into its important customer relations
management initiatives and plans to be more aggressive with specific e-mail
promotions to its customers.
Cost and Expenses. Total cost of goods sold for the twenty-six weeks ended April
30, 2005 decreased 5.3% to $12,671,000 as compared to the same period last year.
Cost of goods sold for the second quarter of fiscal 2005 decreased 4.9% to
$5,683,000 as compared to the same quarter last year. The decline in cost of
goods sold was primarily due to the decrease in net sales as noted above. This
decline was offset by an increase in the Company's gross profit margin for the
first half of fiscal 2005.
The gross profit margin for the first half of fiscal 2005 increased to 41.9%
from 41.2% for the same period last year. The gross profit margin for the second
quarter of fiscal 2005 decreased to 41.6% from 42.2% from the same quarter last
year.
Harvey Electronics, Inc.
Notes to Financial Statements
April 30, 2005
(Unaudited)
Cost and Expenses. (Continued)
The increase in the gross profit margin for the first half of fiscal 2005 was
due to a decline in the Company's overall video business, which generally has
lower margins than audio and labor sales. This was offset by additional higher
margin audio sales, labor income and wire and cable sales.
The decline in the gross profit margin for the second quarter was due to lower
margins realized for the Company's audio, video and labor sales, offset by
additional higher margin cable and wire sales. While the Company also
experienced a decline in its lower margin video business in the second quarter
of fiscal 2005, it also experienced a slight decline in its overall higher
margin audio business, as compared to the same quarter last year.
The Company's overall video sales have been negatively impacted by price
compression in the industry as well as competitive pressures in the market.
Management believes this trend will continue. While video sales have declined to
approximately 41.9% of net sales in the first half of fiscal 2005, from 47.5% of
net sales for the same period last year, the Company's gross profit margin on
its video sales has actually improved. This is primarily due to the mix of video
products sold, coupled with the increase in related custom installation projects
and aided by higher margin extended warranty sales relating to these video
products.
The Company's higher margin audio sales for the first half of fiscal 2005 have
increased to more than 48.4% of net sales from 44.5% of net sales for the same
period last year. Audio sales were positively impacted by additional cable
sales, headphones, furniture, radio and portables and other audio accessories.
Labor income for the first half of fiscal 2005 represented 9.8% of net sales as
compared to approximately 8% of net sales for the same period last year.
The Company's total cost of goods sold includes freight costs, purchase
discounts and inventory shrink. The Company's gross profit margin may not be
comparable to other reporting electronics retailers as other entities may
include the costs relating to their warehousing and distribution networks.
Warehouse and distribution network costs for the first half and second quarter
of fiscal 2005 approximated $374,000 and $176,000, respectively, and are
included in SG&A expenses.
Selling, general and administrative expenses ("SG&A expenses") for the
twenty-six weeks ended April 30, 2005 increased by approximately $353,000 or
4.1% as compared to the same period last year. SG&A expenses for the second
quarter of fiscal 2005 increased approximately $127,000, or 3% as compared to
the same quarter last year. SG&A expenses increased from additional payroll and
payroll related costs, net advertising expense, professional fees, occupancy
costs, truck expenses, EDP expenses and various other general store operating
expenses, offset by a decline in communication expense, bad debt expense,
supplies expense and other selling expenses.
The Company plans to continue to hire additional custom installation personnel,
as needed, and incur the necessary associated expenses relating to the expansion
of its custom installation services. Management believes these services
differentiate Harvey and are vital to the Company's business plan.
Harvey Electronics, Inc.
Notes to Financial Statements
April 30, 2005
(Unaudited)
Cost and Expenses. (Continued)
As the Company's overall business for the first half of fiscal 2005 has declined
from the same period last year, Management expects to realize less cooperative
advertising support from its vendors. As a result, net advertising expense,
which is included in Selling, general and administrative expenses in the
Company's Statements of Operations, has increased 40.3% to $470,000 for the
first half of fiscal 2005, as compared to the same period last year and is
expected to increase for the remainder of fiscal 2005, as compared to fiscal
2004.
Due to the slowdown in the Company's business, Management has elected to begin a
cost reduction program which will begin in the third quarter of fiscal 2005.
Management will implement a one-week non-paid furlough for all non-union
employees, will reduce its work force where appropriate and will review all SG&A
expenses for reduction.
Interest expense decreased by approximately $12,000 or 10.9% for the first half
of fiscal 2005, as compared to the same period last year. For the second quarter
of fiscal 2005, interest expense declined by approximately $6,000 or 9.9% as
compared to the same quarter last year. This was primarily due to reduced
borrowings offset by higher interest rates. The Company's balance outstanding on
its credit facility is expected to increase as the Company uses the credit
facility to finance the construction of its new retail store in Bridgewater, New
Jersey.
In connection with the Company's emergence from its reorganization proceeding,
the Company adopted Fresh Start Accounting. Fresh Start Accounting requires that
the Company report an income tax equivalent provision when there is book income
and pre-organization net operating loss carryforward. This requirement applies
despite the fact that the Company's pre-organization net operating loss
carryforward will be utilized to reduce the related income tax payable. The
current and any future year benefit arising from utilization of the
pre-reorganization carryforward is not reflected as a reduction of the tax
equivalent provision in determining net income, but instead is recorded first as
a reduction or reorganization value in excess of amounts allocable to
identifiable assets until exhausted, and thereafter as a direct addition to
paid-in capital.
As noted above, in the first half of fiscal 2004, the income tax equivalent
provision and the reduction of the organization value in excess of amounts
allocable to identifiable assets was $290,000.
For the first half of fiscal 2005, the Company's income tax provision represents
deferred tax expense of $62,000. As a result, the Company's long-term deferred
tax asset was reduced by the same amount. This income tax provision will not
require a material use of the Company's cash.
Liquidity and Capital Resources
At April 30, 2005 and October 30, 2004, the Company's ratio of current assets to
current liability was 1.63 and 1.57, respectively.
Harvey Electronics, Inc.
Notes to Financial Statements
April 30, 2005
(Unaudited)
Liquidity and Capital Resources (continued)
The improvement in the current ratio at April 30, 2005 was positively impacted
by the Company's pretax income. Other factors improving working capital included
the reduction of accounts receivable and the reduction of customer deposits.
Net cash provided by operating activities was $65,000 for the first half of
fiscal 2005 as compared to $909,000 for the same period last year. This
reduction was due to the decline in pretax income as the Company experienced a
slowdown in its business, coupled with the reduction of customer deposits.
Net cash used in investing activities was $643,000 for the first half of fiscal
2005 as compared to $133,000 for the same period last year. Net cash was used
for the purchase of leasehold improvements, equipment and software, aggregating
$643,000 for the first half of fiscal 2005. These improvements related to the
construction in progress of a new retail store and the planned replacement of
the Company's legacy computer system which is expected to be completed in May
2006. For the first half of fiscal 2004, purchases of equipment and leasehold
improvements aggregated $131,000.
Net cash provided by financing activities was $579,000 for the first half of
fiscal 2005, as compared to net cash used in financing activities of $775,000
for the same period last year. Financing activities for the first half of fiscal
2005 included net borrowings of $632,000, increasing the revolving line of
credit facility, preferred stock dividends paid of $33,000 and principal
payments on note payables of $19,000. The net borrowings on the credit facility
was necessary to fund the ongoing capital improvements relating to the new store
being constructed in Bridgewater, New Jersey. Financing activities for the first
half of fiscal 2004 included net payments of $672,000, reducing the revolving
line of credit facility, preferred stock dividends paid of $35,000 and
commitment and deferred legal fees relating to the new credit facility of
$68,000.
In November 2003, the Company entered into a five-year $7.5 million credit
facility with Webster Business Credit Corporation ("Webster"), a subsidiary of
Connecticut based Webster Bank. This credit facility replaced the credit
facility with Wells Fargo Retail Finance, ("Wells Fargo"). Under the credit
facility, the Company can borrow up to $7.5 million based upon lending formulas
calculated on eligible credit card receivables and inventory, less certain
reserves, as defined. The credit facility expires November 21, 2008.
The interest rate on all borrowings under the credit facility is 0.25% over
Webster Bank's prime rate (5.75% at April 30, 2005) or LIBOR plus 2.75%, at the
Company's option. The Company paid Webster a $25,000 commitment fee in two equal
installments of $12,500, on November 21, 2003 and November 21, 2004,
respectively.
Harvey Electronics, Inc.
Notes to Financial Statements
April 30, 2005
(Unaudited)
Liquidity and Capital Resources (continued)
In connection with the credit facility, the Company granted Webster a senior
security interest in all of the Company's assets. The credit facility provides
Webster with rights of acceleration upon the occurrence of certain customary
events of default. The Company is restricted from paying dividends on its Common
Stock, retiring or repurchasing its Common Stock and entering into additional
indebtedness (as defined).
Pursuant to the credit facility, the Company cannot exceed certain advance rates
on eligible inventory and must maintain certain levels of earnings before
interest, taxes, depreciation and amortization. Additionally, the Company's
capital expenditures cannot exceed a predetermined amount. The Company was in
compliance with all Webster covenants at April 30, 2005.
At June 7, 2005, there was approximately $3,031,000 in outstanding borrowings
under the credit facility, with approximately $1,758,000 available to borrow
under this credit facility. The increase in the outstanding balance at June 7,
2005, from April 30, 2005, is due primarily to the continued funding of
leasehold improvements relating to the new retail store being constructed in
Bridgewater, New Jersey.
The Company has authorized 10,000 shares of 8.5% Cumulative Convertible
Preferred Stock ("Preferred Stock") with a par value of $1,000 per share. The
conversion price of the Company's preferred stock is $1.2333. At October 30,
2004, 827 shares of Preferred Stock were issued and outstanding and were
convertible into 670,559 shares of Common Stock. In December 2004, 227 shares of
Preferred Stock were converted to 184,059 shares of the Company's Common Stock
by three preferred shareholders. As a result, 600 shares of Preferred Stock,
held by one shareholder, are currently outstanding and convertible into 486,500
shares of Common Stock at April 30, 2005.
The Company's newest 4,500 square foot Harvey retail showroom in Bridgewater,
New Jersey is under construction. The Company will finance all necessary
leaseholds, equipment, furniture and fixtures, pre-opening costs and inventory,
expected to aggregate between $1,000,000 - $1,200,000, with its new credit
facility. The new retail store is expected to open in late June of 2005. In
fiscal 2005, the Company expects to make remaining improvements to one of its
Harvey retail showrooms, including the installation of a movie theater within
this store and make miscellaneous purchases of computer equipment, software and
other assets, all approximating between $300,000 - $400,000, and financed using
the Company's credit facility.
In December 2004, the Company entered into a three-year note agreement to
finance the purchase of a new phone system. This note payable aggregated
$129,000 and was financed through an affiliate of Webster Bank. In March 2005,
the Company entered into a second three-year note agreement with this affiliate
of Webster to complete the installation of the phone system aggregated $40,000.
Harvey Electronics, Inc.
Notes to Financial Statements
April 30, 2005
(Unaudited)
Liquidity and Capital Resources (continued)
The Company intends to continue its advertising campaign in fiscal 2005,
primarily with print, radio and direct mail.
The Company's website gives its customers access to one of Harvey's upscale
retail showrooms or offers its customers a private, in-home consultation through
the convenience of the Internet. The anticipated costs of maintaining and
improving the website are not expected to be material for 2005.
In fiscal 2004, the Company amended and extended the lease for its flagship
store in Midtown Manhattan. This lease amendment will increase the Company's
occupancy costs in fiscal 2005 but to a greater extent beginning in fiscal 2006.
The increase in rent expense for this store, calculated on a straight-line
basis, beginning in fiscal 2006 is expected to approximate $200,000 per year.
In July 2003, the Company received a notice and information request from the
Pennsylvania Department of Environmental Protection ("PADEP"). See Part II, Item
1, Legal Matters, for details on this matter.
The Securities and Exchange Commission has extended the compliance dates for
non-accelerated filers, pursuant to 404 of the Sarbanes-Oxley Act of 2002. The
Company will further evaluate its implementation plan in fiscal 2005 to meet its
compliance requirements for fiscal year ending October 28, 2006. In connection
with this significant effort, Management believes that expenses related to
implementation of the required current provisions of the Act may be in the range
of $250,000 - $350,000 for fiscal 2006.
Item 4. Disclosure Controls and Procedures
Under the supervision and with the participation of the Company's Management,
including the Chief Executive Officer/President and the Chief Financial Officer,
the Company carried out an evaluation of the effectiveness of the design and
operation of the disclosure controls and procedures, as defined in Rules
13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Based upon that evaluation, the Company's Chief Executive
Officer/President and Chief Financial Officer concluded that the Company's
disclosure controls and procedures are effective, as of the end of the period
covered by this Report (April 30, 2005), in ensuring that material information
relating to the Company required to be disclosed by the Company in reports that
it files or submits under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in the Securities and Exchange
Commission's rules and forms, including ensuring that such material information
is accumulated and communicated to the Company's Management, including the
Company's Chief Executive Officer/President and Chief Financial Officer, as
appropriate to allow timely decisions regarding required disclosure.
Harvey Electronics, Inc.
Notes to Financial Statements
April 30, 2005
(Unaudited)
Item 4. Disclosure Controls and Procedures (Continued)
As noted above, the Securities and Exchange Commission has extended the
compliance dates for non-accelerated filers, pursuant to 404 of the
Sarbanes-Oxley Act of 2002. The Company will further evaluate its implementation
plan in fiscal 2005 to meet its compliance requirements for fiscal year ending
October 28, 2006.
There were no changes in the Company's internal control over financial reporting
(as required by the Exchange Act) that occurred during the Company's last fiscal
quarter that have materially affected, or are reasonable likely to materially
affect, the Company's internal controls over financial reporting.
Harvey Electronics, Inc.
Notes to Financial Statements
April 30, 2005
(Unaudited)
PART II. OTHER INFORMATION:
Items 2, 3, 4 and 5 were not applicable in the second quarter ended April 30,
2005.
Item 1. Legal Matters
In July 2003, the Company received a notice and information request from the
Pennsylvania Department of Environmental Protection ("PADEP"). The notice stated
that PADEP considers the Company a potentially responsible party for
contamination related to a septic drain field located at a former Chem Fab
Corporation ("Chem Fab") in Doylestown, Pennsylvania.
PADEP's notice stated that if Chem Fab was previously owned by Harvey Radio,
Inc. ("Harvey Radio") and if the Company was a successor to Harvey Radio, then
the Company could be, in part, responsible for any environmental investigation
or clean up actions necessary at this site.
Harvey Radio was the predecessor of The Harvey Group, Inc. ("Harvey Group"),
which filed for relief under Chapter 11 of the United States Bankruptcy Code in
August 1995. The Company is the surviving retail business of the Harvey Group,
which emerged from bankruptcy in December 1996. Chem Fab was a wholly-owned
subsidiary of Harvey Radio as of September 1967. The capital stock of Chem Fab
(a then wholly-owned subsidiary of Harvey Group) was sold by the Company to the
Boarhead Corporation in January 1978. The disposition of Chem Fab was prior in
time to the Company's bankruptcy petition date of August 3, 1995.
On August 29, 2003, the Company sent its response letter to PADEP. The Company's
response stated that any action by PADEP to recover any money from the Company
relating to any environmental investigation or cleanup related to Chem Fab is in
violation of the injunctions imposed by virtue of the Company's 1995 Bankruptcy
proceeding. The response letter to PADEP specifically referred to two cases,
with respect to entities subject to a discharge in bankruptcy by the Southern
District of New York and the Second Circuit Court of Appeals. These cases may
support the Company's position enjoining any further action against the Company.
The Company believes PADEP's claim, even absent the bankruptcy injunction, would
be improper against the Company, as Harvey Group was a shareholder of Chem Fab
and Chem Fab's capital stock was sold in 1978, as previously stated.
The Company advised PADEP that any further action to pursue a claim against the
Company would result in the Company bringing a motion to reopen its bankruptcy
case, solely to address the PADEP claim and further, the Company would commence
contempt proceedings against PADEP. To date, the Company has not received a
response from PADEP.
Harvey Electronics, Inc.
Notes to Financial Statements
April 30, 2005
(Unaudited)
The Company has also retained special environmental counsel for advice with
respect to PADEP's request for information and other matters with respect to the
claim.
Furthermore, the number of other parties that may be responsible, their ability
to share in the cost of a clean up and whether the Company's existing or prior
insurance policies provide coverage for this matter is not known. At this time,
it is impossible for the Company to determine the outcome or cost to the Company
on this matter.
Harvey Electronics, Inc.
Notes to Financial Statements
April 30, 2005
(Unaudited)
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit Number Description
-------------- -----------
Exhibit 31.1 Certification - Chief Executive Officer/President
Exhibit 31.2 Certification - Chief Financial Officer
Exhibit 32.1 Certification - Chief Executive Officer/President
Exhibit 32.2 Certification - Chief Financial Officer
(b) Reports on Form 8-K
On March 16, 2005, the Company filed Form 8-K with the Securities and Exchange
Commissions announcing the operating results of its first quarter ended January
29, 2005.
On May 16, 2005, the Company filed Form 8-K with the Securities and Exchange
Commission announcing sales results for its second quarter ended April 30, 2005.
Harvey Electronics, Inc.
Notes to Financial Statements
April 30, 2005
(Unaudited)
Signatures
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized on June 14, 2005.
Harvey Electronics, Inc.
By:/s/Franklin C. Karp
- ----------------------
Franklin C. Karp
Chief Executive Officer/President
By:/s/Joseph J. Calabrese
- -------------------------
Joseph J. Calabrese
Executive Vice President, Chief Financial Officer, Treasurer &
Secretary