-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, BBLZvxapow9yBGzy34uM9SaTpq76bWoo+FK5PjvUzyMaYJXD5k3vbDLPoZXRLRwU 1CdMWhovLYY16YhxnSsDcw== 0000051734-94-000016.txt : 19941208 0000051734-94-000016.hdr.sgml : 19941208 ACCESSION NUMBER: 0000051734-94-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19941029 FILED AS OF DATE: 19941207 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TOYS R US INC CENTRAL INDEX KEY: 0000051734 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-HOBBY, TOY & GAME SHOPS [5945] IRS NUMBER: 135159250 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-01117 FILM NUMBER: 94563674 BUSINESS ADDRESS: STREET 1: 461 FROM RD CITY: PARAMUS STATE: NJ ZIP: 07652 BUSINESS PHONE: 2012627800 FORMER COMPANY: FORMER CONFORMED NAME: INTERSTATE STORES INC DATE OF NAME CHANGE: 19780525 FORMER COMPANY: FORMER CONFORMED NAME: INTERSTATE DEPARTMENT STORES INC DATE OF NAME CHANGE: 19700702 10-Q 1 3RD QUARTER 10-Q FILING UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 29, 1994 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-1117 TOYS "R" US, INC. (Exact name of registrant as specified in its charter) Delaware 13-5159250 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 461 From Road, Paramus, New Jersey 07652 (Address of principal executive offices) (Zip Code) (201) 262-7800 (Registrant's telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. As of November 21, 1994, 277,554,230 shares of common stock were outstanding. INDEX PAGE PART I - FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets 3 Consolidated Statements of Earnings 4 Consolidated Statements of Cash Flows 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion - Results of Operations and Financial Condition 7 PART II - OTHER INFORMATION 8 SIGNATURES 9 Page 3 TOYS "R" US, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands)
October 29, October 30, January 29, 1994 1993 1994 ASSETS Current assets: Cash and cash equivalents $ 103,544 $ 122,348 $ 791,893 Accounts and other receivables 131,693 90,666 98,534 Merchandise inventories 3,207,510 2,898,598 1,777,569 Prepaid expenses and other 73,305 83,718 40,400 Total current assets 3,516,052 3,195,330 2,708,396 Property, equipment and other assets 3,987,279 3,299,283 3,441,213 $ 7,503,331 $ 6,494,613 $ 6,149,609 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term borrowings $ 1,217,214 $ 552,627 $ 239,862 Accounts payable 1,938,200 1,838,189 1,156,411 Accrued expenses and other 423,783 365,195 471,782 Income taxes payable 9,348 11,977 206,996 Total current liabilities 3,588,545 2,767,988 2,075,051 Deferred income taxes 260,000 219,224 202,663 Long-term debt 780,824 702,094 723,613 Stockholders' equity: Common stock 29,794 29,794 29,794 Additional paid-in capital 443,722 491,805 454,061 Retained earnings 3,135,767 2,638,251 3,012,806 Foreign currency translation adjustments (6,970) (58,292) (56,021) Treasury shares, at cost (728,351) (296,251) (292,358) 2,873,962 2,805,307 3,148,282 $ 7,503,331 $ 6,494,613 $ 6,149,609 See notes to consolidated financial statements.
Page 4 TOYS "R" US, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) (In thousands except per share information)
13 Weeks Ended 39 Weeks Ended October 29, October 30, October 29, October 30, 1994 1993 1994 1993 Net sales $1,631,345 $1,449,118 $4,545,395 $4,052,609 Costs and expenses: Cost of sales 1,097,236 982,151 3,081,331 2,767,441 Selling, advertising, general & administrative 394,876 347,532 1,100,976 973,574 Depreciation and amortization 43,202 35,579 116,631 96,908 Interest expense - net 20,845 16,291 51,281 36,276 1,556,159 1,381,553 4,350,219 3,874,199 Earnings before taxes on income 75,186 67,565 195,176 178,410 Taxes on income 27,819 30,108 72,215 70,012 Net earnings $ 47,367 $ 37,457 $ 122,961 $ 108,398 Earnings per share $.17 $.13 $.42 $.37 Common and common equivalent shares 285,402 295,559 289,588 296,896 See notes to consolidated financial statements.
Page 5 TOYS "R" US, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands)
39 Weeks Ended October 29, October 30, 1994 1993 Cash flows from operating activities: Net earnings $ 122,961 $ 108,398 Adjustments to reconcile net earnings to net cash used by operating activities: Depreciation and amortization 116,631 96,908 Deferred income taxes 14,884 18,180 Changes in operating assets and liabilities: Accounts and other receivables (33,159) (21,281) Merchandise inventories (1,429,941) (1,399,927) Prepaid expenses and other operating assets (56,174) (48,336) Accounts payable, accrued expenses and taxes 536,142 748,484 Total adjustments (851,617) (605,972) Net cash used by operating activities (728,656) (497,574) Cash flows from investing activities: Capital expenditures-net (457,860) (411,012) Other assets (33,440) (33,927) Net cash used by investing activities (491,300) (444,939) Cash flows from financing activities: Short-term borrowings, net 977,352 431,855 Long-term borrowings 21,518 19,300 Long-term debt repayments (839) (934) Exercise of stock options 23,382 27,631 Share repurchase program (469,714) (147,134) Net cash provided by financing activities 551,699 330,718 Effect of exchange rate changes on cash and cash equivalents (20,092) (29,578) Cash and cash equivalents: Decrease during period (688,349) (641,373) Beginning of period 791,893 763,721 End of period $ 103,544 $ 122,348 Supplemental disclosures of cash flow information: The Company considers all highly liquid investments purchased as part of its daily cash management activities to be cash equivalents. During the thirty-nine weeks ended October 29, 1994 and October 30, 1993, the Company made income tax payments of $253,080 and $198,337 and interest payments (net of amounts capitalized) of $84,560 and $68,416, respectively. See notes to consolidated financial statements.
Page 6 TOYS "R" US, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Interim Reporting The interim financial statements are unaudited and are subject to year-end adjustments. However, in the opinion of management, all known adjustments (which consist only of normal recurring accruals) have been made to present fairly the consolidated operating results for the unaudited periods. Because of the seasonal nature of the Company's business, results for interim periods are not indicative of results to be expected for the fiscal year. 2. Earnings Per Share Earnings per share for the thirteen and thirty-nine weeks ended October 29, 1994 and October 30, 1993 are computed by dividing net earnings by the weighted average number of common shares outstanding, after reduction for treasury shares and assuming exercise of dilutive stock options computed by the treasury stock method using the average market price during the period. Page 7 MANAGEMENT'S DISCUSSION - RESULTS OF OPERATIONS AND FINANCIAL CONDITION Results of Operations Sales increased by $182,227,000 or 12.6% in the third quarter and $492,786,000 or 12.2% for the thirty-nine weeks over the prior year's comparable periods due primarily to sales from new toy and children's clothing stores, offset by the closing of 21 children's clothing stores since the beginning of fiscal 1993. Comparable USA toy store sales increased by 5.3% for the quarter and 4.6% for the thirty-nine weeks. International toy store comparable sales decreased due to adverse local economic conditions. Kids "R" Us had comparable store sales increases. Cost of sales as a percentage of sales decreased .5% for the third quarter and the thirty-nine weeks versus the prior year's comparable periods due to a more favorable product mix and reduced markdowns associated with strong inventory controls. Selling, advertising, general and administrative expenses as a percentage of sales increased .2% for the third quarter and the thirty-nine weeks versus the prior year's comparable periods as a result of continued international expansion and lower comparable international toy store sales. Net interest expense increased in the third quarter and the thirty-nine weeks compared to the prior year's comparable periods, principally as a result of higher average short term borrowings due primarily to our share repurchase program and a decrease in interest income (for the quarter there was no significant impact and for the first nine months, it decreased from $13,876,000 in 1993 to $10,197,000 in 1994). The effective tax rate decreased from 44.6% and 39.2% in the third quarter and thirty-nine weeks ended October 30, 1993, respectively, to 37% in the current year due to the impact of a retroactive change in the U.S. tax rate resulting in a one-time charge of $5 million or 1.7 cents per share during the third quarter of 1993. Since January 29, 1994, foreign currency exchange rates have experienced fluctuations, however, the impact on net earnings was not significant. Financial Condition By the end of 1994, 37 U.S.A. and 59 international toy stores including our first stores in Denmark, Sweden and Luxembourg and 6 Kids "R" Us children's clothing stores will have opened. The Company has closed 17 of the 20 Kids "R" Us stores that were anticipated to be closed this year, with no significant impact on the Company's financial condition. Annual capital expenditures for new and existing facilities are estimated to be between $600 to $650 million. Seasonal cash requirements will continue to be met through operations, the issuance of short-term commercial paper, bank borrowings for certain foreign subsidiaries and the issuance of long-term debt, if advantageous. Page 8 PART II - OTHER INFORMATION Item 5. Other Information On November 15, 1994, the Company and Petrie Stores Corporation ("Petrie") received a favorable ruling from the Internal Revenue Service ("IRS") holding that the proposed exchange by Petrie of approximately 39.9 million shares of Company common stock, par value $.10 per share ("Company Common Stock") and cash for shares of Company Common Stock and the distribution by Petrie of such shares to Petrie shareholders upon the liquidation of Petrie will qualify as a tax-free reorganization under the Internal Revenue Code. The IRS ruling confirms that the exchange will not have an effect on the results of operations of the Company. The exchange of shares of Company Common Stock for shares of Company Common Stock held by Petrie will be treated by the Company as a treasury stock transaction and the issuance of shares of Company Common Stock for cash will be treated as an issuance of treasury stock. Petrie shareholders are expected to vote on the exchange of shares of Company Common Stock with the Company and the liquidation of Petrie on or about January 20, 1995. Item 6. Exhibits and Reports on Form 8-K (a) Exhibit 27 - Financial Data Schedule. (b) The Company was not required to file any reports on Form 8-K during the 13 weeks ended October 29, 1994. Page 9 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: December 6, 1994 Toys "R" Us, Inc. (Registrant) s/Louis Lipschitz (Signature) Louis Lipschitz Senior Vice President - Finance and Chief Financial Officer INDEX TO EXHIBITS The following is a list of all exhibits filed as part of this document:
Exhibit Page No. No. Document 27 Financial Data Schedule
EX-27 2
5 This schedule contains summary financial information extracted from the Consolidated Balance Sheets and Consolidated Statements of Earnings as reported in the Form 10-Q and is qualified in its entirety by reference to such financial statements. 0000051734 TOYS "R" US, INC. 1,000 9-MOS JAN-28-1995 OCT-29-1994 103,544 0 131,693 0 3,207,510 3,516,052 4,369,466 755,884 7,503,331 3,588,545 780,824 29,794 0 0 2,844,168 7,503,331 4,545,395 4,545,395 3,081,331 1,100,976 116,631 0 51,281 195,176 72,215 122,961 0 0 0 122,961 0.42 0.42
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