-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TYfp3WgoLMZKNZyL7LrIp9N56iZSp9BJU5LwC69PNIALmeQFb8GUvkqTkK5XR8Up LzSCO1D8hyjkpNrVo2ipeQ== 0000051734-95-000009.txt : 19951211 0000051734-95-000009.hdr.sgml : 19951211 ACCESSION NUMBER: 0000051734-95-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951028 FILED AS OF DATE: 19951208 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: 95600221 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 28, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 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 20, 1995, 273,085,642 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 28, October 29, January 28, 1995 1994 1995 ASSETS Current assets: Cash and cash equivalents ..................... $ 220,308 $ 103,544 $ 369,833 Accounts and other receivables ................ 138,057 131,693 115,914 Merchandise inventories ....................... 3,646,362 3,207,510 1,999,148 Prepaid expenses and other .................... 78,301 73,305 45,818 Total current assets ..................... 4,083,028 3,516,052 2,530,713 Property, equipment and other assets ............. 4,353,478 3,987,279 4,040,480 $ 8,436,506 $ 7,503,331 $ 6,571,193 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term borrowings ......................... $ 1,493,486 $ 1,217,214 $ 122,661 Accounts payable .............................. 2,201,752 1,938,200 1,339,081 Accrued expenses and other .................... 338,925 423,783 472,653 Income taxes payable .......................... 23,863 9,348 202,548 Total current liabilities ................ 4,058,026 3,588,545 2,136,943 Deferred income taxes ............................ 235,099 260,000 219,927 Long-term debt ................................... 782,223 780,824 785,448 Stockholders' equity: Common stock .................................. 29,795 29,794 29,795 Additional paid-in capital .................... 505,412 443,722 521,295 Retained earnings ............................. 3,599,716 3,135,767 3,544,573 Foreign currency translation adjustments ...... 37,752 (6,970) (25,121) Treasury shares, at cost ...................... (811,517) (728,351) (641,667) 3,361,158 2,873,962 3,428,875 $ 8,436,506 $ 7,503,331 $ 6,571,193 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 28, October 29, October 28, October 29, 1995 1994 1995 1994 Net sales ............................................. $1,714,545 $1,631,345 $4,821,720 $4,545,395 Costs and expenses: Cost of sales ....................................... 1,168,533 1,097,236 3,290,340 3,081,331 Selling, advertising, general & administrative ...... 436,154 394,876 1,237,198 1,100,976 Depreciation and amortization ....................... 50,715 43,202 140,403 116,631 Interest expense - net .............................. 26,031 20,845 66,252 51,281 1,681,433 1,556,159 4,734,193 4,350,219 Earnings before taxes on income ....................... 33,112 75,186 87,527 195,176 Taxes on income ....................................... 12,251 27,819 32,384 72,215 Net earnings .......................................... $ 20,861 $ 47,367 $ 55,143 $ 122,961 Earnings per share .................................... $.08 $.17 $.20 $.42 Common and common equivalent shares ................... 275,222 285,402 277,847 289,588 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 28, October 29, 1995 1994 Cash flows from operating activities: Net earnings ............................................ $ 55,143 $ 122,961 Adjustments to reconcile net earnings to net cash used by operating activities: Depreciation and amortization ....................... 140,403 116,631 Deferred income taxes ............................... (6,550) 14,884 Changes in operating assets and liabilities: Accounts and other receivables .................... (19,939) (33,159) Merchandise inventories ........................... (1,638,924) (1,429,941) Prepaid expenses and other operating assets ....... (23,371) (56,174) Accounts payable, accrued expenses and taxes ...... 539,986 536,142 Total adjustments ....................................... (1,008,395) (851,617) Net cash used in operating activities ........... (953,252) (728,656) Cash flows from investing activities: Capital expenditures-net ................................ (347,746) (457,860) Other assets ............................................ (40,025) (33,440) Net cash used in investing activities ........... (387,771) (491,300) Cash flows from financing activities: Short-term borrowings, net .............................. 1,370,825 977,352 Long-term borrowings .................................... - 21,518 Long-term debt repayments ............................... (2,835) (839) Exercise of stock options ............................... 14,505 23,382 Share repurchase program ................................ (200,238) (469,714) Net cash provided by financing activities ....... 1,182,257 551,699 Effect of exchange rate changes on cash and cash equivalents ............................................ 9,241 (20,092) Cash and cash equivalents: Decrease during period .................................. (149,525) (688,349) Beginning of period ..................................... 369,833 791,893 End of period ........................................... $ 220,308 $ 103,544 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 28, 1995 and October 29, 1994, the Company made income tax payments of $204,579 and $253,080 and interest payments (net of amounts capitalized) of $86,022 and $84,560, 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 28, 1995 and October 29, 1994 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 $83 million or 5.1% in the third quarter and $276 million or 6.1% 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 19 children's clothing stores since the beginning of 1994. Comparable USA toy store sales decreased by 3.0% for the third quarter and 4.5% for the thirty-nine weeks, and excluding action figures, have increased 1.2% for the quarter and decreased 3.4% for the thirty-nine weeks. International toy stores also experienced a decline in comparable sales for both the quarter and thirty-nine weeks due primarily to the continued poor retail environment in much of Europe. Kids "R" Us had comparable store sales decreases for both the quarter and thirty-nine weeks due to the weak apparel sales environment in the U.S. Cost of sales, as a percentage of sales, increased .9% in the third quarter and .4% for the thirty-nine weeks versus the prior year's comparable periods due to the Company's aggressive pricing strategy and changes in the sales mix, predominately higher sales of low margin video game hardware and lower sales of higher margin action figures. Selling, advertising, general and administrative expenses as a percentage of sales increased by 1.2% in the third quarter and 1.4% in the thirty-nine weeks versus the prior year's comparable periods as a result of overall comparable store sales declines, new store growth and the Company's initiatives to promote customer service and strategically position the business for the future. Net interest expense increased in the third quarter and in the thirty-nine weeks compared to the prior years comparable periods, principally as a result of higher average short-term borrowings due primarily to higher inventories and the share repurchase program. The effective tax rate remained constant at 37% for all periods presented. Since January 28, 1995, foreign currency exchange rates have experienced fluctuations, however, the impact on net earnings was not significant. Financial Condition By the end of 1995, 35 USA and 45 international toy stores, and 9 Kids "R" Us children's clothing stores will have opened. Annual capital expenditures for new and existing facilities are estimated to be approximately $575 million. Cash requirements for operations, capital expenditures, lease commitments and the share repurchase program will be met primarily through operating activities, borrowings under the $1 billion revolving credit facility, issuance of short-term commercial paper and bank borrowings for foreign subsidiaries. Other Matters On October 26, 1995, the Company entered into an agreement to franchise its Toys "R" Us store operations in Sweden and Denmark effective April 27, 1996. The Company continues to evaluate its worldwide operations to enhance shareholder value where appropriate. Page 8 PART II - OTHER INFORMATION 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 28, 1995. 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 8, 1995 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 FDS 3RD QUARTER 1995
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 FEB-03-1996 OCT-28-1995 220,308 0 138,057 0 3,646,362 4,083,028 4,874,175 938,797 8,436,506 4,058,026 782,223 29,795 0 0 3,331,363 8,436,506 4,821,720 4,821,720 3,290,340 1,237,198 140,403 0 66,252 87,527 32,384 55,143 0 0 0 55,143 0.20 0.20
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