-----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, SJNJXYEnp6kdmo4m1oj7plOVQzWiGH0/8Gr321oGzCIx5ZNoKuUGNBJvHCljqfGj qFBiRJXfzbU1wLNmdbN78w== 0000096289-96-000010.txt : 19960816 0000096289-96-000010.hdr.sgml : 19960816 ACCESSION NUMBER: 0000096289-96-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TANDY CORP /DE/ CENTRAL INDEX KEY: 0000096289 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-RADIO TV & CONSUMER ELECTRONICS STORES [5731] IRS NUMBER: 751047710 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05571 FILM NUMBER: 96612526 BUSINESS ADDRESS: STREET 1: 1800 ONE TANDY CNTR STREET 2: P O BOX 17180 CITY: FORT WORTH STATE: TX ZIP: 76102 BUSINESS PHONE: 8173903700 MAIL ADDRESS: STREET 1: P O BOX 17180 CITY: FORTH WORTH STATE: TX ZIP: 76102 FORMER COMPANY: FORMER CONFORMED NAME: TANDY LEATHER CO DATE OF NAME CHANGE: 19681216 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN HIDE & LEATHER CO DATE OF NAME CHANGE: 19660825 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE --- SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 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 No. 1-5571 TANDY CORPORATION (Exact name of registrant as specified in its charter) Delaware 75-1047710 State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1800 One Tandy Center, Fort Worth, Texas 76102 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (817) 390-3700 N/A (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 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 --- --- The number of shares outstanding of the issuer's Common Stock, $1 par value, on July 31, 1996 was 59,466,704. Index to Exhibits is on Sequential Page No. 18. Total pages 101. PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS TANDY CORPORATION AND SUBSIDIARIES Consolidated Statements of Income (Unaudited) Three Months Ended Six Months Ended June 30, June 30, ---------------------------- ---------------------------- (In thousands, except per share amounts) 1996 1995 1996 1995 ---------------------------------------- ----------- ----------- ----------- ----------- Net sales and operating revenues $ 1,352,863 $ 1,185,047 $ 2,799,792 $ 2,411,669 Cost of products sold 878,867 739,278 1,834,129 1,519,321 ----------- ----------- ----------- ----------- Gross profit 473,996 445,769 965,663 892,348 ----------- ----------- ----------- ----------- Expenses: Selling, general and administrative 401,518 365,126 815,445 738,836 Depreciation and amortization 26,963 22,153 52,314 44,455 Provision for restructuring cost 25,500 -- 25,500 -- Impairment of long-lived assets -- -- 26,033 -- Interest income (3,663) (8,430) (7,473) (31,832) Interest expense 8,887 5,190 16,017 15,850 ----------- ----------- ----------- ----------- 459,205 384,039 927,836 767,309 ----------- ----------- ----------- ----------- Income before income taxes 14,791 61,730 37,827 125,039 Provision for income taxes 5,492 23,766 14,048 48,140 ----------- ----------- ----------- ----------- Net income 9,299 37,964 23,779 76,899 Preferred dividends 1,571 1,631 3,176 3,298 ----------- ----------- ----------- ----------- Net income available to common shareholders $ 7,728 $ 36,333 $ 20,603 $ 73,601 =========== =========== =========== =========== Net income available per average common and common equivalent share $ 0.13 $ 0.55 $ 0.34 $ 1.10 =========== =========== =========== =========== Average common and common equivalent shares outstanding 61,011 66,240 61,189 67,189 =========== =========== =========== =========== Dividends declared per common share $ 0.20 $ 0.18 $ 0.40 $ 0.36 =========== =========== =========== =========== The accompanying notes are an integral part of these financial statements.
TANDY CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets (Unaudited) June 30, December 31, June 30, (In thousands, except share amounts) 1996 1995 1995 ------------------------------------ ----------- ----------- ----------- Assets Current assets: Cash and short-term investments $ 140,093 $ 143,498 $ 80,566 Accounts and notes receivable, less allowance for doubtful accounts 266,568 320,588 300,245 Inventories, at lower of cost or market 1,487,271 1,511,984 1,359,690 Other current assets 63,008 72,175 80,864 ----------- ----------- ----------- Total current assets 1,956,940 2,048,245 1,821,365 Property, plant and equipment, at cost, less accumulated depreciation 603,586 577,720 536,590 Other assets, net of accumulated amortization 87,944 96,098 172,571 ----------- ----------- ----------- $ 2,648,470 $ 2,722,063 $ 2,530,526 =========== =========== =========== Liabilities and Stockholders' Equity Current liabilities: Short-term debt, including current maturities of long-term debt $ 374,461 $ 189,861 $ 153,984 Accounts payable 342,604 365,131 286,947 Accrued expenses 235,386 321,939 227,391 Income taxes payable 45,612 82,978 12,160 ----------- ----------- ----------- Total current liabilities 998,063 959,909 680,482 ----------- ----------- ----------- Long-term debt and capital leases, excluding current maturities 107,261 140,813 148,863 Other non-current liabilities 19,423 20,006 20,057 ----------- ----------- ----------- Total other liabilities 126,684 160,819 168,920 ----------- ----------- ----------- Stockholders' Equity: Preferred stock, no par value, 1,000,000 shares authorized Series A junior participating, 100,000 shares authorized and none issued -- -- -- Series B convertible, 100,000 shares authorized and issued 100,000 100,000 100,000 Common stock, $1 par value, 250,000,000 shares authorized with 85,645,000 shares issued 85,645 85,645 85,645 Additional paid-in-capital 104,480 102,819 95,672 Retained earnings 2,329,532 2,332,120 2,223,124 Foreign currency translation effects (3,173) (1,094) 3,788 Common stock in treasury, at cost, 25,544,000, 23,918,000 and 20,191,000 shares, respectively (1,041,899) (963,301) (768,262) Unearned deferred compensation related to TESOP (50,862) (54,854) (58,843) ----------- ----------- ----------- Total stockholders' equity 1,523,723 1,601,335 1,681,124 Commitments and contingent liabilities ----------- ----------- ----------- $ 2,648,470 $ 2,722,063 $ 2,530,526 =========== =========== =========== The accompanying notes are an integral part of these financial statements.
TANDY CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows (Unaudited) Six Months Ended June 30, -------------------------- (In thousands) 1996 1995 -------------- ---------- ---------- Cash flows from operating activities: Net income $ 23,779 $ 76,899 Adjustments to reconcile net income to net cash provided by operating activities: Provision for restructuring cost 25,500 -- Impairment of long-lived assets 26,033 -- Depreciation and amortization 52,314 44,455 Provision for credit losses and bad debts 649 11,304 Other items 1,793 1,868 Changes in operating assets and liabilities: Sale of credit card portfolios -- 342,822 Receivables 57,132 115,651 Inventories 24,713 130,557 Other current assets 1,482 (3,662) Accounts payable, accrued expenses and income taxes (173,516) (385,588) ---------- ---------- Net cash provided by operating activities 39,879 334,306 ---------- ---------- Investing activities: Additions to property, plant and equipment (86,639) (97,100) Proceeds from sale of property, plant and equipment 1,624 2,696 Other investing activities (5,765) 1,805 ---------- ---------- Net cash used by investing activities (90,780) (92,599) ---------- ---------- Financing activities: Purchase of treasury stock (105,106) (288,193) Sale of treasury stock to employee stock purchase program 22,785 25,170 Proceeds from exercise of stock options 6,772 13,401 Dividends paid, net of taxes (26,692) (37,475) Changes in short-term borrowings, net 150,763 (25,377) Additions to long-term borrowings 1,324 1,706 Repayments of long-term borrowings (2,350) (56,006) ---------- ---------- Net cash provided (used) by financing activities 47,496 (366,774) ---------- ---------- Decrease in cash and short-term investments (3,405) (125,067) Cash and short-term investments, beginning of period 143,498 205,633 ---------- ---------- Cash and short-term investments, end of period $ 140,093 $ 80,566 ========== ========== The accompanying notes are an integral part of these financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1-BASIS OF FINANCIAL STATEMENTS The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and 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 six months ended June 30, 1996 are not necessarily indicative of the results that may be expected for the year ending December 31, 1996. For further information, refer to the consolidated financial statements and management's discussion and analysis of results of operations and financial condition included in Tandy Corporation's ("Tandy" or the "Company") Form 10-K for the year ended December 31, 1995. NOTE 2-RESTRUCTURING CHARGES On May 21, 1996, the Company announced a restructuring plan for its Incredible Universe division which includes an overhead reduction plan, the closing of two stores and costs for the abandonment of certain real estate sites held for new store development. A streamlining of the division's overhead costs will include the elimination of approximately 20 non-selling positions per store, reorganization of some central unit functions, and a significant change in advertising strategy. The two stores located in Potomac Mills, Virginia and Charlotte, North Carolina, were closed in the second quarter of 1996 due to inadequate sales volumes. The Company incurred a pre-tax charge of approximately $25,500,000 which relates primarily to future lease obligations, disposition of fixed assets, certain termination costs associated with employees as well as inventory markdowns associated with liquidation sales. The components of this restructuring charge and an analysis of the amounts charged against the reserve are outlined in the following table: Charges Original Through Balance (In thousands) Reserve 6/30/96 6/30/96 -------------- ---------- ---------- ---------- Real estate obligations $ 10,750 $ (376) $ 10,374 Disposal of fixed assets 8,000 (970) 7,030 Inventory impairment 2,574 (500) 2,074 Termination benefits 2,500 (1,793) 707 Other 1,676 (755) 921 ---------- ---------- ---------- Total $ 25,500 $ (4,394) $ 21,106 ========== ========== ==========
Sales and operating revenues associated with the two closed stores were approximately $21,054,000 for the six months ended June 30, 1996. Operating losses associated with the two store operations approximated $4,525,000 for the six months ended June 30, 1996. The Company will continue to monitor the operating results of this division and will take appropriate action if the division's results of operations do not materially improve. These actions may include a further restructuring including store closures of under-performing locations, further streamlining of personnel, alliances with non-related retailers to increase traffic in the stores and further changes in advertising strategies and employee compensation. Management is optimistic that its current restructuring strategy will improve this division's operations; however, there can be no assurance that it will be successful. NOTE 3-PAYMENT OF AST NOTE On July 12, 1996, the Company received $60,000,000 in cash and $30,000,000 in AST Research Inc. ("AST") common stock as final payment of a $90,000,000 note payable from AST to the Company. The approximately 4,500,000 shares of AST common stock Tandy owns represent approximately 7.8% of the outstanding common stock of AST. This common stock was issued to Tandy as partial payment of AST's obligation under a promissory note dated July 12, 1993. This note was payable to the Company pursuant to the terms of the Agreement for Purchase and Sale of Assets dated June 30, 1993. On June 11, 1996, AST filed a Registration Statement on Form S-3 with the Securities and Exchange Commission ("SEC") to register the common stock issued to the Company under the Securities Act of 1933. As of August 12, 1996, such Registration had not yet been declared effective by the SEC; however, the shares received are non-restricted and fully tradable. Depending on a variety of factors, including market conditions and prices, the Company might dispose of some or all of its shares of AST common stock. The disposition of the shares of common stock may be effected from time to time in one or more transactions. In connection with its ownership of the common stock, the Company may from time to time, at its sole discretion, engage in hedging transactions with broker/dealers or other financial institutions. The AST common stock is subject to mark to market adjustments for each reporting period based upon its current market value. Based on the common stock price of $5.00 at August 12, 1996, the market value of the AST common stock approximated $22,500,000. Pursuant to FAS 115, the Company would recognize an unrealized loss of approximately $7,500,000 from its recorded value at August 12, 1996. NOTE 4-IMPAIRMENT OF ASSETS In March 1995, the Financial Accounting Standards Board (the "FASB") issued Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" ("FAS 121"), which is effective for fiscal years beginning after December 15, 1995. Effective January 1, 1996, the Company adopted FAS 121 which requires that long-lived assets (primarily property, plant and equipment and goodwill) held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the net book value of the asset may not be recoverable. An impairment loss is recognized if the sum of the expected future cash flows (undiscounted and before interest) from the use of the asset is less than the net book value of the asset. The amount of the impairment loss will be measured as the difference between the net book value of the assets and the estimated fair value of the related assets. Upon adoption in the first quarter of 1996, the Company recorded an initial pre-tax impairment loss of approximately $26,033,000 to conform with this statement, primarily as a result of grouping assets at their lowest level of cash flows to determine impairment as required by this statement. This charge provided for the writedown of certain intangibles, adjustment to market valuation of foreign real estate and the revaluation of selected retail fixed assets. Whenever events or changes in circumstances occur, the Company will review long-lived assets for impairment pursuant to FAS 121. NOTE 5-SHARE REPURCHASE PROGRAM On December 18, 1995, the Company announced that its Board of Directors had authorized management to purchase up to 5,000,000 shares of its common stock in addition to shares required for employee plans. These purchases are in addition to the share repurchase program which began in August 1994 and concluded in December 1995, under which the Company repurchased 12,500,000 shares. Purchases will be made from time to time in the open market, and it is expected that funding of the program will come from operating cash flow and existing borrowing facilities. During the quarter and the six months ended June 30, 1996, the Company repurchased approximately 715,000 and 1,757,000 shares under the program, respectively. No purchases were made during 1995 under this new program. NOTE 6-CONTINGENCY The IRS Dallas office had previously referred certain issues in the Company's 1987 tax return to the IRS National Office. The issues involved the private letter rulings issued by the IRS in connection with the spin-off of InterTAN Inc. ("InterTAN") and certain other tax matters. On June 20, 1996, the IRS notified the Company that it would no longer challenge the private letter ruling issued in connection with the InterTAN spin-off. The IRS is, however, continuing to challenge certain other tax matters associated with the separation of InterTAN from the Company. Management believes that these other tax matters should not have a material impact on the Company's financial condition. The Company was a defendant in a consolidated action titled O'Sullivan Industries Holdings, Inc. Securities Litigation, ---------------------------------------------------------- which was commenced in 1994 before the United States District Court for the Western District of Missouri. The Court on July 2, 1996, approved the settlement of this litigation and entered a Final Judgment thereby resolving this entire litigation. The Company had previously reserved for the financial impact of the settlement. The settlement did not have a material adverse effect on its results of operations, financial condition or cash flows. NOTE 7-HEDGING AND DERIVATIVE ACTIVITY The Company enters into interest rate swap agreements to manage its interest rate exposure by effectively trading floating interest rates for fixed interest rates. As the Company has used the swaps to hedge certain obligations with floating rates, the difference between the floating and fixed interest rate amounts, based on these swap agreements, is recorded as income or expense. Through June 30, 1996, the Company has entered into five swaps with regard to notional amounts totaling $90,000,000. The swap agreements all expire during the third quarter of 1999. Prior to 1995 the Company was not a party to any interest rate swaps. The Board of Directors has authorized management to enter into interest rate swaps up to notional amounts not exceeding $250,000,000. At June 30, 1996, the Company would have to pay approximately $3,542,000 to terminate the interest rate swaps in place. This amount was obtained from the counterparties and represents the estimated fair value of the swap agreements; the amount is not recognized in the consolidated financial statements. The Company has no intention of terminating the interest rate swap agreements at this time. At June 30, 1996, the weighted average interest rate of the floating rate obligations being hedged was 5.9%, and the weighted average interest rate of the fixed rate obligations imposed by the swap agreements was 7.7%. The interest rate swap agreements have been entered into with major financial institutions which are expected to fully perform under the terms of the swap agreements. NOTE 8-RELATIONS WITH INTERTAN Summarized in the tables below are the amounts recognized by the Company at June 30, 1996 and 1995, and for the periods ended June 30, 1996 and 1995, in relation to its agreements with InterTAN. The Company purchased the notes at a discount, and InterTAN has an obligation to pay the gross amount of the notes. Balance at June 30, -------------------------- (In thousands) 1996 1995 -------------- ---------- ---------- Gross amount of notes $ 31,311 $ 48,361 Discount 10,198 14,193 ---------- ---------- Net amount of notes $ 21,113 $ 34,168 ========== ========== Current portion of notes $ 4,692 $ 4,445 Non-current portion of notes 16,421 29,723 Other current receivables 4,496 3,704 ---------- ---------- $ 25,609 $ 37,872 ========== ==========
Three Months Ended Six Months Ended June 30, June 30, -------------------------- -------------------------- (In thousands) 1996 1995 1996 1995 -------------- ---------- ---------- ---------- ---------- Sales and commission income $ 1,811 $ 2,116 $ 3,607 $ 4,465 ========== ========== ========== ========== Interest income $ 769 $ 1,030 $ 1,697 $ 2,029 Accretion of discount 966 1,053 1,963 2,150 ---------- ---------- ---------- ---------- $ 1,735 $ 2,083 $ 3,660 $ 4,179 ========== ========== ========== ========== Royalty income $ 259 -- $ 534 -- ========== ========== ========== ==========
Through July 1996 InterTAN has met all of its payment obligations to Tandy. On May 17, 1996, InterTAN paid the full principal amount of the Series B Note and the accrued interest on the B Note to May 16, 1996, pursuant to an agreement signed between InterTAN and Tandy on May 16, 1996. The principal of the B Note approximated $10,000,000 and was originally due on August 25, 1996. Nothing has come to the attention of management which would indicate that InterTAN would not be able to meet its payment obligations pursuant to these debt agreements. See the Company's Annual Report on Form 10-K for the year ended December 31, 1995 for further information. Canadian tax authorities are reviewing InterTAN's Canadian subsidiary's 1987-89 tax returns. The Company cannot determine whether the ultimate resolution of that review will have an effect on InterTAN's ability to meet its obligations to Tandy, but at present, nothing has come to the attention of the Company which would lead it to believe that the ultimate resolution of this review would impair InterTAN's ability to meet its obligations to Tandy. Effective July 1, 1996, the Company extended the license agreements which allow InterTAN to use Tandy Corporation trade names in designated countries for revenue-based royalty. The trade names covered by the agreement include Tandy (the U.K.), Tandy Electronics (Australia) and Radio Shack (Canada). The previous agreement would have expired on June 30, 2000. The agreement was extended to June 30, 2006, with automatic annual extensions to June 30, 2010. The license agreements may be terminated with five years prior written notice by either party. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION With the exception of historical information, the matters discussed herein are forward-looking statements that involve risks and uncertainties including, but not limited to, economic conditions including consumer installment debt levels and interest rate fluctuations, product demand, competitive products and pricing, availability of products, inventory risks due to shifts in market demand, the regulatory and trade environment including future changes, if any, of national minimum wage legislation and other risks indicated in filings with the Securities and Exchange Commission such as the Company's most recent Form 10-K. Net Sales and Operating Revenues Net sales and operating revenues for the periods ended June 30 were: Three Months Ended Six Months Ended June 30, % Increase June 30, % Increase ------------------------ ------------------------- (In thousands) 1996 1995 (Decrease) 1996 1995 (Decrease) -------------- ---------- ---------- ---------- ---------- ---------- ---------- Radio Shack $ 682,136 $ 680,885 (1) 0.2% $1,390,701 $1,343,954 (1) 3.5% Incredible Universe 194,140 132,330 46.7 414,393 266,083 55.7 Computer City 460,038 352,078 30.7 959,695 730,641 31.4 ---------- ---------- ---------- ---------- 1,336,314 1,165,293 14.7 2,764,789 2,340,678 18.1 Tandy Name Brand (closed) (18) (219) NM (38) 28,131 NM Other sales 16,567 19,973 (17.1) 35,041 42,860 (18.2) ---------- ---------- ---------- ---------- $1,352,863 $1,185,047 14.2% $2,799,792 $2,411,669 16.1% ========== ========== ========== ========== (1) Restated to include the 73 Tandy Name Brand retail units which remained open in 1995. NM Not meaningful.
Retail operations had 14.7% and 18.1% sales gains for the three and six-month periods ended June 30, 1996. Tandy Corporation's overall comparable store sales results for U.S. and Canadian operations were a decrease of 0.7% for the quarter and an increase of 0.9% for the six-month period. RadioShack comparable store sales results for the three and six-month periods ended June 30, 1996, decreased 1.7% and increased 1.8%, respectively. The prior year comparable quarter revenue was aided by strong cellular phone sales, especially in the California market area, as certain laws were enacted which greatly increased consumer demand in these market areas. Sales of audio/video products were weak during the second quarter of 1996. Core RadioShack categories such as batteries and parts and accessories experienced sales increases for the six-month period. Digital satellite system sales could be positively impacted by fall advertising campaigns and the alliance with PrimeStar(R), an operator of small-dish satellites. Monitored security provided by ADT(R), a home security firm, will be available in all RadioShack(SM) stores by the end of the third quarter. Computer City had comparable store sales gains of 2.8% and 1.4% for the quarter and six-month period. Sales of peripherals, software and accessories increased, while sales of computers were flat due in part to slow sales of non-MS-DOS machines. Comparable store sales for the third quarter will be challenged as Windows(R)95 was introduced in the third quarter of 1995. Sales results have been positive from the commission sales plan, low price guarantee, focus on in-stock rate and overall customer service. By the end of the third quarter, joint selling should commence under the alliance with EDS(R) which is geared toward improving corporate and institutional sales. Same-store sales for the quarter and six-month period at Incredible Universe decreased 4.8% and 5.2%, respectively. The strongest categories in the second quarter of 1996 were appliances, small office/home office computer products and satellite systems. Incredible Universe has launched a new marketing campaign focused on the theme "It's Worth the Drive. Guaranteed."(SM) This campaign includes emphasis on competitive pricing with a 110% low price guarantee, broad selection of products, and a high level of product demonstration. Also see Restructuring Charges below for a further discussion of material changes being implemented at Incredible Universe to improve its results of operations. RETAIL OUTLETS -------------- June 30, March 31, December 31, September 30, June 30, March 31, 1996 1996 1995 1995 1995 1995 -------------------------------------------------------------------------------------------------- RadioShack Company owned 4,869 4,840 4,831 4,787 4,709 4,671 Dealer/Franchise 1,950 1,954 2,005 2,017 2,017 2,015 Computer City 103 101 99 86 78 73 Incredible Universe 16 18 17 14 10 9 ----- ----- ----- ----- ----- ----- Total Number of Stores 6,938 6,913 6,952 6,904 6,814 6,768 ===== ===== ===== ===== ===== =====
It is anticipated that during calendar 1996 RadioShack will open, net of closings, approximately 100-120 company-owned stores. Computer City plans to open about 15 units, plus additional stores within Incredible Universe. Incredible Universe closed two units in May 1996 and will open two new units in 1996, one of which opened in the first quarter, resulting in no net increase in the number of stores in 1996. Gross Profit Gross profit as a percent of net sales was 35.0% during the three months ended June 30, 1996 as compared to 37.6% during the corresponding 1995 period. For the six months ended June 30, 1996 and 1995, the gross profit percentages were 34.5% and 37.0%, respectively. This trend toward lower gross margins is expected to continue as Computer City(R) and Incredible Universe(R) stores contribute a larger proportion of sales because they operate at lower margins. In the second quarter of 1996, Computer City and Incredible Universe accounted for approximately 48.4% of consolidated sales, compared to 40.9% in the second quarter of 1995. For the six months ended June 30, 1996 and 1995, Computer City and Incredible Universe accounted for approximately 49.1% and 41.3% of consolidated sales, respectively. RadioShack's gross margin for the quarter and six-month period increased slightly in comparison with the prior year periods. The increase is due to increased sales of higher-margin core products such as batteries and parts and accessories and to a lower proportion of the lower-margin cellular products in the sales mix in 1996, as compared to 1995. Computer City's gross margin increased 1.2 and 0.8 percentage points as compared to the second quarter and six-month period of 1995, respectively. The increases are due to a higher percentage of service-related business and sales of peripherals and software in 1996 as compared to 1995. Gross margin at Incredible Universe decreased 2.6 and 1.6 percentage points in the second quarter and six-month period, respectively, due to an increase in the relative percentage of lower margin computer sales the chain is experiencing and to lower pricing which supports the 110% low price guarantee. Selling, General and Administrative Expenses Selling, general and administrative ("SG&A") expenses as a percent of sales and operating revenues for the second quarter of 1996 declined 1.1 percentage points in comparison with the second quarter of 1995 and declined 1.5 percentage points in comparison with the six months ended June 30, 1995. The rate of decrease in SG&A as a percent of sales has slowed this quarter due primarily to the softer sales volumes. Company-wide cost reduction programs have been put into place to reduce expenses. All major expense categories, including advertising, rent, payroll and utilities, were lower as a percent of sales for the first six months in 1996 as compared with the same prior year period. The lower rent and payroll costs as a percent of sales reflect the lower relative costs associated with the Company's newer retail formats. As a result of Computer City and Incredible Universe expansion into new markets, consolidated advertising costs increased $10,664,000, or 11.1%, during the six months ended June 30, 1996 in comparison with the prior year period. Payroll expenses increased $43,525,000, or 13.8%, during the six-month period in 1996, in comparison with the prior year period, because of the Company's retail store expansions. As a result of the Company selling the private label credit card portfolios at the end of the first quarter in 1995, bad debt expense decreased significantly in the first six months of 1996 as compared to that of the prior year. The Company expects SG&A expenses as a percent of sales to continue to decrease over the remainder of the fiscal year as Computer City and Incredible Universe, which operate at lower relative costs than consolidated Tandy Corporation, become more significant portions of the Company's total business. Restructuring Charges On May 21, 1996, the Company announced a restructuring plan for its Incredible Universe division which includes an overhead reduction for all stores, the closing of two stores and costs for the abandonment of certain real estate sites held for new store development. A streamlining of the division's overhead costs will include the elimination of approximately 20 non-selling positions per store, reorganization of certain central unit functions and a significant change in advertising strategy. The two stores located in Potomac Mills, Virginia and Charlotte, North Carolina, were closed due to inadequate sales volume. The change in marketing strategy will include more emphasis on the "It's Worth the Drive. Guaranteed." theme. This campaign includes emphasis on competitive pricing with a 110% low price guarantee, broad selection, and a high level of product demonstration. The Company has recognized a pre-tax restructuring charge of approximately $25,500,000 in the quarter ended June 30, 1996, primarily related to future lease obligations of the closed stores, certain termination costs associated with employees, disposition of furniture, fixtures and equipment as well as inventory markdowns associated with liquidation sales. The components of this restructuring charge and an analysis of the amount charged against the reserve are outlined in the following table: Charges Original Through Balance (In thousands) Reserve 6/30/96 6/30/96 -------------- ---------- ---------- ---------- Real estate obligations $ 10,750 $ (376) $ 10,374 Disposal of fixed assets 8,000 (970) 7,030 Inventory impairment 2,574 (500) 2,074 Termination benefits 2,500 (1,793) 707 Other 1,676 (755) 921 ---------- ---------- ---------- Total $ 25,500 $ (4,394) $ 21,106 ========== ========== ==========
Sales and operating revenues associated with the two closed stores were approximately $21,054,000 for the six months ended June 30, 1996. Operating losses associated with the two store operations approximated $4,525,000 for the six months ended June 30, 1996. The Company will continue to monitor the operating results of this division and will take appropriate action if the division's results of operations do not materially improve. These actions may include a further restructuring including store closures of under-performing locations, further streamlining of personnel, alliances with non-related retailers to increase traffic in the stores and further changes in advertising strategies and employee compensation. Management is optimistic that its current restructuring strategy will improve this division's operations; however, there can be no assurance that it will be successful. Impairment of Assets In March 1995, the Financial Accounting Standards Board (the "FASB") issued Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" ("FAS 121"), which is effective for fiscal years beginning after December 15, 1995. Effective January 1, 1996, the Company adopted FAS 121 which requires that long-lived assets (primarily property, plant and equipment and goodwill) held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the net book value of the asset may not be recoverable. An impairment loss is recognized if the sum of the expected future cash flows (undiscounted and before interest) from the use of the asset is less than the net book value of the asset. The amount of the impairment loss will be measured as the difference between the net book value of the assets and the estimated fair value of the related assets. Upon adoption in the first quarter of 1996, the Company recorded an initial pre-tax impairment loss of approximately $26,033,000 to conform with this statement, primarily as a result of grouping assets at their lowest level of cash flows to determine impairment as required by this statement. This charge provided for the writedown of certain intangibles, adjustment to market valuation of foreign real estate and the revaluation of selected retail fixed assets. Whenever events or changes in circumstances occur, the Company will review long-lived assets for impairment pursuant to FAS 121. Accounting for Stock-Based Compensation In October 1995, the FASB issued FAS No. 123, "Accounting for Stock-Based Compensation" ("FAS 123"), which is effective for fiscal years beginning after December 15, 1995. Effective January 1, 1996, the Company adopted FAS 123 which establishes financial accounting and reporting standards for stock-based employee compensation plans. The pronouncement defines a fair value based method of accounting for an employee stock option or similar equity instrument and encourages all entities to adopt that method of accounting for all of their employee stock option compensation plans. However, it also allows an entity to continue to measure compensation cost for those plans using the intrinsic value based method of accounting as prescribed by Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25"). Entities electing to remain with the accounting in APB 25 must make pro forma disclosures of net income and earnings per share as if the fair value based method of accounting defined in FAS 123 had been applied. The Company will continue to account for stock-based employee compensation plans under the intrinsic method pursuant to APB 25 and will make the disclosures in its footnotes as required by FAS 123. Stock options issued for stock-based employee compensation plans in the second quarter of 1996 were not material. Net Interest Income Interest income for the quarter ended June 30, 1996 decreased $4,767,000 from $8,430,000 in the second quarter of 1995. Interest income for the six months ended June 30, 1996 decreased $24,359,000 from $31,832,000 in the comparable prior year period. These decreases are due to the sale of the Company's credit card portfolios in the first quarter of 1995 and increased utilization of cash for the ongoing share repurchase program and capital expenditures related to new stores. Interest expense increased $3,697,000 for the quarter ended June 30, 1996 in comparison with the same prior year period because of increased average short-term borrowing levels. Provision for Income Taxes Provision for income taxes for each quarterly period is based on the estimate of the annual effective tax rate for the fiscal year as evaluated at the end of each quarter. The effective tax rates for the second quarters of 1996 and 1995 were 37.1% and 38.5%, respectively. The decrease is due primarily to the favorable resolution of a foreign tax issue. The IRS Dallas office had previously referred certain issues in the Company's 1987 tax return to the IRS National Office. The issues involved the private letter rulings issued by the IRS in connection with the spin-off of InterTAN Inc. ("InterTAN") and certain other tax matters. On June 20, 1996, the IRS notified the Company that it would no longer challenge the private letter ruling issued in connection with the InterTAN spin-off. The IRS is, however, continuing to challenge certain other tax matters associated with the separation of InterTAN from the Company. Management believes that these other tax matters should not have a material impact on the Company's financial condition. Earnings Per Share Net income per average common and common equivalent share is computed by dividing net income less the Series B convertible stock dividends by the weighted average common and common equivalent shares outstanding during the period. During 1995, the Preferred Equity Redemption Convertible Stock ("PERCS") mandatorily converted into common stock. As a result, they were considered outstanding common stock and the dividends were not deducted from net income for purposes of calculating net income per average common and common equivalent share. The prior year quarter and year-to-date weighted average share calculations included approximately 11,816,000 common shares relating to the conversion of the PERCS into common stock on March 10, 1995. Fully diluted earnings available per common and common equivalent share are not presented since dilution is less than 3%. Cash Flow and Financial Condition Cash flow from operating activities generated less cash in the six-month period ended June 30, 1996 as compared with the same period of the prior year. This change relates primarily to the sale of the credit card portfolios in 1995. Cash used by investing activities for the six-month period ended June 30, 1996 includes property, plant and equipment additions related to fixtures required for new RadioShack stores and the Company's expansion of its Computer City and Incredible Universe store formats. Management anticipates that capital expenditure requirements will approximate $65,000,000 to $75,000,000 for the remainder of 1996, primarily to support retail expansion, refurbishments and other capital expenditures such as updated point of sale and other information systems. Cash provided by financing activities for the six-month period ended June 30, 1996 includes an increase in seasonal short-term debt. In 1995 the Company utilized funds received from the sale of the credit card portfolios and thus seasonal debt resources were employed less than what has been necessary in 1996. Cash used by financing activities includes the repurchase of common stock under the new share repurchase program, authorized on December 18, 1995. Repayments of long-term borrowings in 1995 included the $45,000,000 of 8.69% senior notes and medium-term notes of $6,000,000. The Company believes that its cash flow from operations, cash on hand and availability under its existing debt facilities are adequate to fund the planned expansion of its store formats and share repurchase program. In addition, most of the Company's new store expansion is being funded through operating leases. Cash and short-term investments at June 30, 1996 were $140,093,000 as compared to $143,498,000 at December 31, 1995 and $80,566,000 at June 30, 1995. Total debt as a percentage of total capitalization was 24.0% at June 30, 1996, compared to 17.1% at December 31, 1995 and 15.3% at June 30, 1995. Long-term debt as a percentage of total capitalization was 5.4% at June 30, 1996 compared to 7.3% at December 31, 1995 and 7.5% at June 30, 1995. The debt-to-capitalization ratios could increase as Tandy continues to repurchase shares under the existing authorization and fund new store openings and other capital expenditures. During the second quarter of 1996, Tandy renewed and increased its revolving credit facility with a syndicate of 18 banks. The facility now totals $500,000,000, $200,000,000 of which is a one-year facility maturing June 1997, with the remaining $300,000,000 in a five-year facility maturing June 2001. The revolving credit facility is used as a backup for the commercial paper program. On December 18, 1995, the Company announced that its Board of Directors had authorized management to purchase up to 5,000,000 shares of its common stock in addition to shares required for employee plans. Purchases will be made from time to time in the open market, and it is expected that funding of the program will come from operating cash flow and existing borrowing facilities. During the quarter and six months ended June 30, 1996, the Company repurchased approximately 715,000 and 1,757,000 shares under the program, respectively. No purchases were made during calendar 1995 under this new program. Inventory Compared to June 30, 1995, total inventories at June 30, 1996 increased $127,581,000 or 9.4%. The increase in total inventory levels included additional inventory to support new RadioShack, Computer City and Incredible Universe stores, offset by an overall reduction in Radio Shack inventory as a result of an inventory reduction program. Inventory is primarily comprised of finished goods. Changes in Stockholders' Equity Outstanding (In thousands) Common Shares Dollars -------------- ------------- ---------- Balance at December 31, 1995 61,727 $1,601,335 Foreign currency translation adjustments, net of deferred taxes -- (2,079) Sale of treasury stock to employee plans 527 22,785 Purchase of treasury stock (2,385) (106,840) Exercise of stock options 203 7,778 Director stock payments 2 108 Restricted stock awards 27 1,099 Repurchase of preferred stock -- (1,867) Preferred stock dividends, net of tax -- (2,064) TESOP deferred compensation earned -- 3,992 Common stock dividends -- (24,303) Net income -- 23,779 ------- ---------- Balance at June 30, 1996 60,101 $1,523,723 ======= ==========
InterTAN Update Summarized in the tables below are the amounts recognized by the Company at June 30, 1996 and 1995, and for the periods ended June 30, 1996 and 1995, in relation to its agreements with InterTAN. The Company purchased the notes at a discount, and InterTAN has an obligation to pay the gross amount of the notes. Balance at June 30, -------------------------- (In thousands) 1996 1995 -------------- ---------- ---------- Gross amount of notes $ 31,311 $ 48,361 Discount 10,198 14,193 ---------- ---------- Net amount of notes $ 21,113 $ 34,168 ========== ========== Current portion of notes $ 4,692 $ 4,445 Non-current portion of notes 16,421 29,723 Other current receivables 4,496 3,704 ---------- ---------- $ 25,609 $ 37,872 ========== ==========
Three Months Ended Six Months Ended June 30, June 30, -------------------------- -------------------------- (In thousands) 1996 1995 1996 1995 -------------- ---------- ---------- ---------- ---------- Sales and commission income $ 1,811 $ 2,116 $ 3,607 $ 4,465 ========== ========== ========== ========== Interest income $ 769 $ 1,030 $ 1,697 $ 2,029 Accretion of discount 966 1,053 1,963 2,150 ---------- ---------- ---------- ---------- $ 1,735 $ 2,083 $ 3,660 $ 4,179 ========== ========== ========== ========== Royalty income $ 259 -- $ 534 -- ========== ========== ========== ==========
Through July 1996 InterTAN has met all of its payment obligations to Tandy. On May 17, 1996, InterTAN paid the full principal amount of the Series B Note and the accrued interest on the B Note to May 16, 1996, pursuant to an agreement signed between InterTAN and Tandy on May 16, 1996. The principal of the B Note approximated $10,000,000 and was originally due on August 25, 1996. Nothing has come to the attention of management which would indicate that InterTAN would not be able to meet its payment obligations pursuant to these debt agreements. See the Company's Annual Report on Form 10-K for the year ended December 31, 1995 for further information. Canadian tax authorities are reviewing InterTAN's Canadian subsidiary's 1987-89 tax returns. The Company cannot determine whether the ultimate resolution of that review will have an effect on InterTAN's ability to meet its obligations to Tandy, but at present, nothing has come to the attention of the Company which would lead it to believe that the ultimate resolution of this review would impair InterTAN's ability to meet its obligations to Tandy. Effective July 1, 1996, the Company extended the license agreements which allow InterTAN to use Tandy Corporation trade names in designated countries for revenue-based royalty. The trade names covered by the agreement include Tandy (the U.K.), Tandy Electronics (Australia) and Radio Shack (Canada). The previous agreement would have expired on June 30, 2000. The agreement was extended to June 30, 2006, with automatic annual extensions to June 30, 2010. The license agreements may be terminated with five years prior written notice by either party. Payment of AST Note On July 12, 1996, the Company received $60,000,000 in cash and $30,000,000 in AST Research Inc. ("AST") common stock as final payment of a $90,000,000 note payable from AST to the Company. The approximately 4,500,000 shares of AST common stock Tandy owns represent approximately 7.8% of the outstanding common stock of AST. This common stock was issued to Tandy as partial payment of AST's obligation under a promissory note dated July 12, 1993. This note was payable to the Company pursuant to the terms of the Agreement for Purchase and Sale of Assets dated June 30, 1993. On June 11, 1996, AST filed a Registration Statement on Form S-3 with the Securities and Exchange Commission ("SEC") to register the common stock issued to the Company under the Securities Act of 1933. As of August 12, 1996, such Registration had not yet been declared effective by the SEC; however, the shares received are non-restricted and fully tradable. Depending on a variety of factors, including market conditions and prices, the Company might dispose of some or all of its shares of AST common stock. The disposition of the shares of common stock may be effected from time to time in one or more transactions. In connection with its ownership of the common stock, the Company may from time to time, at its sole discretion, engage in hedging transactions with broker/dealers or other financial institutions. The AST common stock is subject to mark to market adjustments for each reporting period based upon its current market value. Based on the common stock price of $5.00 at August 12, 1996, the market value of the AST common stock approximated $22,500,000. Pursuant to FAS 115, the Company would recognize an unrealized loss of approximately $7,500,000 from its recorded value at August 12, 1996. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. The Company was a defendant in a consolidated action titled O'Sullivan Industries Holdings, Inc. Securities Litigation, ---------------------------------------------------------- which was commenced in 1994 before the United States District Court for the Western District of Missouri. The Court on July 2, 1996, approved the settlement of this litigation and entered a Final Judgment thereby resolving this entire litigation. The Company had previously reserved for the financial impact of the settlement and, therefore, the settlement has not had a material adverse effect on its results of operations or financial condition. Tandy has various claims, lawsuits, disputes with third parties, investigations and pending actions involving allegations of negligence, product defects, discrimination, infringement of intellectual property rights, securities matters, tax deficiencies, violations of permits or licenses, and breach of contract and other matters against the Company and its subsidiaries incident to the operation of its business. The liability, if any, associated with these matters was not determinable at June 30, 1996. While certain of these matters involve substantial amounts, and although occasional adverse settlements or resolutions might occur and negatively impact earnings in the year of settlement, it is the opinion of management that their ultimate resolution will not have a materially adverse effect on Tandy's financial position. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. At the Annual Meeting of Stockholders held on May 16, 1996, the Company elected directors to serve for the ensuing year. Out of the 62,771,378 eligible votes, 54,929,914 votes were cast at the meeting either by proxies solicited in accordance with Schedule 14A or by security holders voting in person. There were 5,466,305 broker non-votes which are not included in the following table as they were not treated as being present at the meeting. In the case of directors, abstentions are treated as votes withheld and are included in the table. The tabulation of votes for each nominee is set forth below: NOMINEES FOR DIRECTORS ---------------------- VOTES VOTES DIRECTORS FOR WITHHELD --------- ---------- --------- James I. Cash, Jr. 54,490,634 439,280 Donna R. Ecton 54,244,619 685,295 Lewis F. Kornfeld, Jr. 54,181,574 748,340 Jack L. Messman 54,499,366 430,548 William G. Morton, Jr. 54,506,221 423,693 Thomas G. Plaskett 54,284,661 645,253 John V. Roach 54,150,441 779,473 Alfred J. Stein 54,484,161 445,753 William E. Tucker 54,156,519 773,397 Jesse L. Upchurch 54,512,595 417,319 John A. Wilson 54,495,243 434,671 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. a) Exhibits Required by Item 601 of Regulation S-K. A list of the exhibits required by Item 601 of Regulation S-K and filed as part of this report is set forth in the Index to Exhibits on page 18, which immediately precedes such exhibits. b) Reports on Form 8-K. There were no Form 8-K reports filed during the quarter ended June 30, 1996. 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. Tandy Corporation (Registrant) Date: August 12, 1996 By /s/ Richard L. Ramsey ------------------------------- Richard L. Ramsey Vice President and Controller (Authorized Officer) Date: August 12, 1996 /s/ Dwain H. Hughes ------------------------------- Dwain H. Hughes Senior Vice President and Chief Financial Officer (Principal Financial Officer) TANDY CORPORATION INDEX TO EXHIBITS Exhibit Sequential Number Description Page No. 2a Agreement for Purchase and Sale of Assets dated as of June 30, 1993 between AST Research, Inc., as Purchaser and Tandy Corporation, TE Electronics Inc., and GRiD Systems Corporation, as Sellers (without exhibits) (filed as Exhibit 2 to Tandy's July 13, 1993 Form 8-K filed on July 27, 1993, Accession No. 0000096289-93-000004 and incorporated herein by reference). 2b Amended and Restated Stock Exchange Agreement dated February 1, 1994 by and among O'Sullivan Industries Holdings, Inc., and TE Electronics Inc. (filed as Exhibit 2b to Tandy's Form 10-K filed on March 30, 1994, Accession No. 0000096289-94-000029 and incorporated herein by reference). 2c U.S. Purchase Agreement dated January 26, 1994 by and among O'Sullivan Industries Holdings, Inc., TE Electronics Inc. and the U.S. Underwriters which included Merrill Lynch & Co., Wheat First Butcher & Singer, The Chicago Dearborn Company and Rauscher Pierce Refsnes, Inc. (filed as Exhibit 2c to Tandy's Form 10-K filed on March 30, 1994, Accession No. 0000096289-94-000029 and incorporated herein by reference). 2d International Purchase Agreement dated January 26, 1994 by and among O'Sullivan Industries Holdings, Inc., TE Electronics Inc. and the U.S. Underwriters which included Merrill Lynch International Limited and UBS Limited (filed as Exhibit 2d to Tandy's Form 10-K filed on March 30, 1994, Accession No. 0000096289-94-000029 and incorporated herein by reference). 2e Acquisition Agreement dated January 18, 1995 between Hurley State Bank, as purchaser and Tandy Credit Corporation as seller (without exhibits) (filed as Exhibit (c) to Tandy's January 18, 1995 Form 8-K filed on February 2, 1995, Accession No. 0000096289- 95-000008 and incorporated herein by reference). 2e(i) Amendment No. 1 to Acquisition Agreement dated January 18, 1995 between Tandy Credit Corporation, Tandy National Bank and Hurley State Bank (filed as Exhibit 2 to Tandy's March 30, 1995 Form 8-K filed on April 12, 1995, Accession No.0000096289-95-000012 and incorporated herein by reference). 2f Agreement Plan of Merger dated March 30, 1995 by and among Tandy Corporation, Tandy Credit Corporation, Hurley State Bank and Hurley Receivables Corporation (filed as Exhibit 3 to Tandy's March 30, 1995 Form 8-K filed on April 12, 1995, Accession No. 0000096289-95-000012 and incorporated herein by reference). 3a(i) Restated Certificate of Incorporation of Tandy dated December 10, 1982 (filed as Exhibit 4A to Tandy's 1993 Form S-8 for the Tandy Corporation Incentive Stock Plan, Reg. No.33-51603, filed on November 12, 1993, Accession No.0000096289-93-000017 and incorporated herein by reference). 3a(ii) Certificate of Amendment of Certificate of Incorporation of Tandy Corporation dated November 13, 1986 (filed as Exhibit 4A to Tandy's 1993 Form S-8 for the Tandy Corporation Incentive Stock Plan, Reg. No. 33-51603, filed on November 12, 1993, Accession No. 0000096289- 93-000017 and incorporated herein by reference). 3a(iii) Certificate of Amendment of Certificate of Incorporation, amending and restating the Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock dated June 22, 1990 (filed as Exhibit 4A to Tandy's 1993 Form S-8 for the Tandy Corporation Incentive Stock Plan, Reg. No. 33-51603, filed on November 12, 1993, Accession No. 0000096289-93- 000017 and incorporated herein by reference). 3a(iv) Certificate of Designations of Series B TESOP Convertible Preferred dated June 29, 1990 (filed as Exhibit 4A to Tandy's 1993 Form S-8 for the Tandy Corporation Incentive Stock Plan, Reg. No. 33-51603, filed on November 12, 1993, Accession No. 0000096289- 93-000017 and incorporated herein by reference). 3a(v) Certificate of Designation, Series C Conversion Preferred Stock dated February 13, 1992 (filed as Exhibit 4A to Tandy's 1993 Form S-8 for the Tandy Corporation Incentive Stock Plan, Reg. No. 33-51603, filed on November 12, 1993, Accession No. 0000096289- 93-000017 and incorporated herein by reference). 3b Tandy Corporation Bylaws, restated as of January 1, 1996 (filed as Exhibit 3b to Tandy's Form 10-K filed on March 28, 1996, Accession No. 0000096289-96-000004 and incorporated herein by reference). 4a Amended and restated Rights Agreement with the First National Bank of Boston dated June 22, 1990 for Preferred Share Purchase Rights (filed as Exhibit 4b to Tandy's Form 10-K filed on March 30, 1994, Accession No. 0000096289-94-000029 and incorporated herein by reference). 4b Revolving Credit Agreement between Tandy Corporation and Texas Commerce Bank, individually and as Agent for sixteen other banks, dated as of May 27, 1994 (without exhibits) (filed as Exhibit 4c to Tandy's Form 10Q filed on August 15, 1994, Accession No. 0000096289-94-000039 and incorporated herein by reference). 4c First Amendment to the Revolving Credit Agreement between Tandy Corporation and Texas Commerce Bank as Agent for sixteen other banks, dated as of May 26, 1995 (Facility A) (filed as Exhibit 4c to Tandy's Form 10-K filed on March 28, 1996, Accession No. 0000096289-96-000004 and incorporated herein by reference). 4d First Amendment to the Revolving Credit Agreement between Tandy Corporation and Texas Commerce Bank as Agent for sixteen other banks, dated as of May 26, 1995 (Facility B) (filed as Exhibit 4d to Tandy's Form 10-K filed on March 28, 1996, Accession No. 0000096289-96-000004 and incorporated herein by reference). 4e Second Amendment to the Revolving Credit Agreement between Tandy Corporation and Texas Commerce Bank as Agent for sixteen other banks, dated as of May 24, 1996 (Facility A) 22 4f Second Amendment to the Revolving Credit Agreement between Tandy Corporation and Texas Commerce Bank as Agent for eighteen banks, dated as of June 28, 1996 (Facility B) 45 4g Third Amendment to the Revolving Credit Agreement between Tandy Corporation and Texas Commerce Bank as Agent for eighteen banks, dated as of June 28, 1996 (Facility A) 74 10a* Salary Continuation Plan for Executive Employees of Tandy Corporation and Subsidiaries including amendment dated June 14, 1984 with respect to participation by certain executive employees, as restated October 4, 1990 (filed as Exhibit 10a to Tandy's Form 10-K filed on March 30, 1994, Accession No. 0000096289-94-000029 and incorporated herein by reference). 10b* Form of Executive Pay Plan Letters (filed as Exhibit 10b to Tandy's Form 10-K filed on March 28, 1996, Accession No.0000096289- 96-000004 and incorporated herein by reference). 10c* Post Retirement Death Benefit Plan for Selected Executive Employees of Tandy Corporation and Subsidiaries as restated June 10, 1991 (filed as Exhibit 10c to Tandy's Form 10-K filed on March 30, 1994, Accession No. 0000096289-94-000029 and incorporated herein by reference). 10d* Tandy Corporation Officers Deferred Compensation Plan as restated July 10, 1992 (filed as Exhibit 10d to Tandy's Form 10-K filed on March 30, 1994, Accession No. 0000096289-94-000029 and incorporated herein by reference). 10e* Special Compensation Plan No. 1 for Tandy Corporation Executive Officers, adopted in 1993 (filed as Exhibit 10e to Tandy's Form 10-K filed on March 30, 1994, Accession No. 0000096289-94-000029 and incorporated herein by reference). 10f* Special Compensation Plan No. 2 for Tandy Corporation Executive Officers, adopted in 1993 (filed as Exhibit 10f to Tandy's Form 10-K filed on March 30, 1994, Accession No. 0000096289-94-000029 and incorporated herein by reference). 10g* Special Compensation Plan for Directors of Tandy Corporation dated November 13, 1986 (filed as Exhibit 10g to Tandy's Form 10-K filed on March 30, 1994, Accession No. 0000096289-94-000029 and incorporated herein by reference). 10h* Director Fee Resolution (filed as Exhibit 10h to Tandy's Form 10-K filed on March 30, 1994, Accession No. 0000096289-94- 000029 and incorporated herein by reference). 10i* Tandy Corporation 1985 Stock Option Plan as restated effective August 1990 (filed as Exhibit 10i to Tandy's Form 10-K filed on March 30, 1994, Accession No. 0000096289- 94-000029 and incorporated herein by reference). 10j* Tandy Corporation 1993 Incentive Stock Plan as restated May 18, 1995 (filed as Exhibit 10j to Tandy's Form 10-Q filed on August 14, 1995, Accession No. 0000096289- 95-000016 and incorporated herein by reference). 10k* Tandy Corporation Officers Life Insurance Plan as amended and restated effective August 22, 1990 (filed as Exhibit 10k to Tandy's Form 10-K filed on March 30, 1994, Accession No.0000096289-94-000029 and incorporated herein by reference). 10l* First Restated Trust Agreement Tandy Employees Supplemental Stock Program through Amendment No. IV dated January 1, 1996 (filed as Exhibit 4d to Tandy's Form 10-K filed on March 28, 1996, Accession No. 0000096289- 96-000004 and incorporated herein by reference). 10m* Forms of Termination Protection Agreements for (i) Corporate Executives, (ii) Division Executives, and (iii) Subsidiary Executives (filed as Exhibit 10m to Tandy's Form 10-Q filed on August 14, 1995, Accession No. 0000096289-95-000016 and incorporated herein by reference). 10n* Tandy Corporation Termination Protection Plans for Executive Employees of Tandy Corporation and its Subsidiaries (i) the Level I and (ii) Level II Plans (filed as Exhibit 10n filed on August 14, 1995, Accession No. 0000096289-95-000016 to and incorporated herein by reference). 10o* Forms of Bonus Guarantee Letter Agreements with certain Executive Employees of Tandy Corporation and its Subsidiaries (i) Formula, (ii) Discretionary, and (iii) Pay Plan (filed as Exhibit 10o to Tandy's Form 10-K filed on March 30, 1994, Accession No. 0000096289-94-000029 and incorporated herein by reference). 10p* Form of Indemnity Agreement with Directors, Corporate Officers and two Division Officers of Tandy Corporation (filed as Exhibit 10p to Tandy's Form 10-K filed on March 28, 1996, Accession No. 0000096289-96-000004 and incorporated herein by reference). 11 Statement of Computation of Earnings per Share 100 12 Statement of Computation of Ratios of Earnings to Fixed Charges 101 27 Financial Data Schedule _______________________ * Each of these exhibits is a "management contract or compensatory plan, contract, or arrangement". EX-27 2
5 This schedule contains summary financial information extracted from the consolidated balance sheets and consolidated statements of income contained in Tandy Corporation's second quarter report on Form 10Q and is qualified in its entirety by reference to such financial statements. 1000 6-MOS DEC-31-1996 JUN-30-1996 140,093 0 266,568 0 1,487,271 1,956,940 603,586 0 2,648,470 998,063 107,261 0 100,000 85,645 1,338,078 2,648,470 2,799,792 2,799,792 1,834,129 1,834,129 0 0 8,544 37,827 14,048 23,779 0 0 0 23,779 0.34 0.34
EX-4 3 EXHIBIT 4e SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT (FACILITY A) THIS SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT (FACILITY A) (this "Amendment") dated as of May 24, 1996 is among TANDY CORPORATION, a --------- Delaware corporation (the "Company"), and the banks and other financial ------- institutions listed on the signature pages under the heading Banks ("Banks"), and TEXAS COMMERCE BANK NATIONAL ASSOCIATION, as agent (in such ----- capacity, the "Agent") for the Banks. ----- PRELIMINARY STATEMENT --------------------- (a) The Company, certain of the Banks, BARCLAYS BANK PLC ("Barclays") -------- and the Agent entered into a Revolving Credit Agreement (FACILITY A) (the "Original Credit Agreement") dated as of May 27, 1994. ------------------------- (b) The Company, the Banks, Barclays and the Agent entered into the Agreement and First Amendment To Revolving Credit Agreement (FACILITY A) ("First Amendment") dated as of May 26, 1995 modifying the Original Credit --------------- Agreement (the Original Credit Agreement as amended by the First Amendment being the "Credit Agreement"), which inter alia added CITICORP USA, INC. ---------------- ("Citicorp"), and COMMERZBANK AKTIENGELLSCHAFT, ATLANTA AGENCY -------- ("Commerzbank"), as Banks under the Credit Agreement, retired Barclays as a ----------- Bank thereunder, modified the Commitment amount for each Bank and amended the definition of "Maturity Date". (c) There are no outstanding loan balances or any advances owed by the Company to any of the Banks pursuant to the Credit Agreement. (d) The Company has requested that the definition of the term "Maturity Date" be amended. (e) All capitalized terms defined in the Credit Agreement and not otherwise defined herein shall have the same meanings herein as in the Credit Agreement. NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the Company, the Banks and the Agent hereby agree as follows: SECTION 1. Amendment to Section 1.01 of the Credit Agreement. The ------------------------------------------------- definition of the term "Maturity Date" contained in Section 1.01 of the Credit Agreement is hereby amended in its entirety to read as follows: "'Maturity Date' means July 31, 1996, or the earlier termination of the Commitments pursuant to Section 7.01." ------------ SECTION 2. Conditions to Effectiveness. This Amendment shall become --------------------------- effective when, and only when, the following conditions have been fulfilled: (a) the Company and the Banks shall have executed a counterpart of this Amendment; (b) the Agent shall have executed a counterpart of this Amendment and shall have received counterparts of this Amendment executed by the Company and the Banks; and (c) the Agent shall have received from the Company a certificate of the Secretary or Assistant Secretary of the Company certifying that attached thereto is (i) a true and complete copy of the general borrowing resolutions of the Board of Directors of the Company authorizing the execution, delivery and performance of the Credit Agreement, as amended hereby, and (ii) the incumbency and specimen signature of each officer of the Company executing this Amendment. SECTION 3. Representations and Warranties True; No Default or Event -------------------------------------------------------- of Default. The Company hereby represents and warrants to the Agent and ---------- the Banks that after giving effect to the execution and delivery of this Amendment (a) the representations and warranties set forth in the Credit Agreement are true and correct on the date hereof as though made on and as of such date and (b) no Default or Event of Default has occurred and is continuing. SECTION 4. Reference to the Credit Agreement and Effect on the Notes. --------------------------------------------------------- (a) Upon the effectiveness of this Amendment, each reference in the Credit Agreement to "this Agreement", "hereunder", "herein" or words of like import shall mean and be a reference to the Credit Agreement, as amended and affected hereby. (b) Upon the effectiveness of this Amendment, each reference in the Notes to "the Credit Agreement" shall mean and be a reference to the Credit Agreement, as amended and affected hereby. (c) Upon the effectiveness of this Amendment, each reference in the Credit Agreement and the Notes to the "Maturity Date" shall mean and be a reference to such term as modified pursuant to Section 1. --------- (d) The Credit Agreement and the Notes, as amended and affected hereby, shall remain in full force and effect and are hereby ratified and confirmed. SECTION 5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND ------------- CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAW AND SHALL BE BINDING UPON THE COMPANY, THE BANKS AND THE AGENT AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS. SECTION 6. Descriptive Headings. The section headings appearing in -------------------- this Amendment have been inserted for convenience only and shall be given no substantive meaning or significance whatever in construing the terms and provisions of this Amendment. SECTION 7. FINAL AGREEMENT OF THE PARTIES. THE CREDIT AGREEMENT ------------------------------ (INCLUDING THE EXHIBITS AND SCHEDULE THERETO), AS AMENDED HEREBY, THE NOTES, THE AGENT'S LETTER AND THE OTHER LOAN DOCUMENTS, CONSTITUTE A "LOAN AGREEMENT" AS DEFINED IN SECTION 26.02(a) OF THE TEXAS BUSINESS AND COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES RESPECTING THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES RESPECTING THE SUBJECT MATTER HEREOF AND THEREOF. SECTION 8. Execution in Counterparts. This Amendment may be executed ------------------------- in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed effective as of the date first stated herein, by their respective officers thereunto duly authorized. TANDY CORPORATION By: /s/ Loren K. Jensen ------------------------------ Name: Loren K. Jensen Title: Vice President-Treasurer TEXAS COMMERCE BANK NATIONAL ASSOCIATION, as Agent By: /s/ B.B. Wuthrich ------------------------------ Name: B.B. Wuthrich Title: Vice President Commitment: Banks ---------- ----- $15,000,000 BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION By: /s/ W. Thomas Barnett ------------------------------ Name: W. Thomas Barnett Title: Vice President Commitment: Banks ---------- ----- $15,000,000 THE BANK OF NEW YORK By: /s/ Charlotte Sohn ------------------------------ Name: Charlotte Sohn Title: Vice President Commitment: Banks ---------- ----- $7,500,000 BANK ONE, TEXAS, N.A. By: /s/ John D. Hudgens ------------------------------ Name: John D. Hudgens Title: Vice President Commitment: Banks ---------- ----- $10,000,000 THE BANK OF TOKYO TRUST COMPANY By: /s/ J. Bruce Meredith ------------------------------ Name: J. Bruce Meredith Title: Senior Vice President and Manager Commitment: Banks ---------- ----- $7,500,000 THE CHASE MANHATTAN BANK, N.A. By: /s/ Ellen L. Gertzog ------------------------------ Name: Ellen L. Gertzog Title: Vice President Commitment: Banks ---------- ----- $15,000,000 CONTINENTAL BANK N.A. By: /s/ ------------------------------ Name: Title: REPLACED BY COMBINED BANK OF AMERICA Commitment: Banks ---------- ----- $15,000,000 CREDIT LYONNAIS NEW YORK BRANCH By: /s/ Robert Ivosevich ------------------------------ Name: Robert Ivosevich Title: Senior Vice President Commitment: Banks ---------- ----- $10,000,000 THE FIRST NATIONAL BANK OF BOSTON By: /s/ Judith C. E. Kelly ------------------------------ Name: Judith C. E. Kelly Title: Vice President Commitment: Banks ---------- ----- $7,500,000 FIRST UNION NATIONAL BANK OF NORTH CAROLINA By: /s/ Jane W. Workman ------------------------------ Name: Jane W. Workman Title: Senior Vice President Commitment: Banks ---------- ----- $10,000,000 MELLON BANK, N.A. By: /s/ Marc T. Kennedy ------------------------------ Name: Marc T. Kennedy Title: Assistant Vice President Commitment: Banks ---------- ----- $15,000,000 NATIONAL WESTMINSTER BANK, Plc New York Branch By: /s/ Marilyn A. Windsor ------------------------------ Name: Marilyn A. Windsor Title: Vice President NATIONAL WESTMINSTER BANK, Plc Nassau Branch By: /s/ Marilyn A. Windsor ------------------------------ Name: Marilyn A. Windsor Title: Vice President Commitment: Banks ---------- ----- $15,000,000 NATIONSBANK OF TEXAS, N.A. By: /s/ Todd Shipley ------------------------------ Name: Todd Shipley Title: Senior Vice President Commitment: Banks ---------- ----- $10,000,000 SOCIETE GENERALE, SOUTHWEST AGENCY By: /s/ Louis P. Laville, III ------------------------------ Name: Louis P. Laville, III Title: Vice President Commitment: Banks ---------- ----- $7,500,000 THE SUMITOMO BANK, LIMITED HOUSTON AGENCY By: /s/ Harumitsu Seki ------------------------------ Name: Harumitsu Seki Title: General Manager Commitment: Banks ---------- ----- $20,000,000 TEXAS COMMERCE BANK NATIONAL ASSOCIATION By: /s/ B.B. Wuthrich ------------------------------ Name: B.B. Wuthrich Title: Vice President Commitment: Banks ---------- ----- $10,000,000 TORONTO DOMINION (TEXAS), INC. By: /s/ Diane Bailey ------------------------------ Name: Diane Bailey Title: Vice President Commitment: Banks ---------- ----- $5,000,000 CITICORP USA, INC. By: /s/ Marjorie Futornick ------------------------------ Name: Marjorie Futornick Title: Vice President Commitment: Banks ---------- ----- $5,000,000 COMMERZBANK, AKTIENGESELLSCHAFT, ATLANTA AGENCY By: /s/ Andreas K. Bremer ------------------------------ Name: Andreas K. Bremer Title: Senior Vice President & Manager By: /s/ Harry P. Yergey ------------------------------ Name: Harry P. Yergey Title: Vice President EX-4 4 EXHIBIT 4f AGREEMENT AND SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT (FACILITY B) THIS AGREEMENT AND SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT (FACILITY B) (this "Amendment") dated as of June 28, 1996 is among TANDY --------- CORPORATION, a Delaware corporation (the "Company"), the Retiring ------- Bank (as defined below), the banks and other financial institutions listed on the signature pages under the heading Banks including the New Banks (as defined below) (collectively, the "Banks"), and TEXAS COMMERCE BANK ----- NATIONAL ASSOCIATION, as agent (in such capacity, the "Agent") for the ----- Banks. PRELIMINARY STATEMENT --------------------- (a) The Company, certain of the Banks, BARCLAYS BANK PLC ("Barclays"), -------- the Retiring Banks and the Agent entered into a Revolving Credit Agreement (Facility B) (the "Original Credit Agreement") dated as of May 27, 1994. ------------------------- (b) The Company, certain of the Banks, the Retiring Bank, Barclays and the Agent entered into the Agreement and First Amendment To Revolving Credit Agreement (Facility B) ("First Amendment") dated as of May 26, 1995 --------------- modifying the Original Credit Agreement (the Original Credit Agreement, as amended by the First Amendment, being the "Credit Agreement") by inter alia ---------------- adding CITICORP USA, INC. ("Citicorp"), and COMMERZBANK AKTIENGELLSCHAFT, -------- ATLANTA AGENCY ("Commerzbank"), as Banks under the Credit Agreement, ----------- retiring Barclays as a Bank thereunder and modifying the Commitment amount for each Bank. (c) There are no outstanding loan balances or any advances owed by the Company to any of the Banks pursuant to the Credit Agreement. (d) The Company has requested that certain provisions of the Credit Agreement be amended, that the Total Commitment be increased from $200,000,000 to $300,000,000 and that each of the Banks have a Commitment equal to the amount shown opposite its signature on the signature pages hereof. (e) THE CHASE MANHATTAN BANK, N.A. (the "Retiring Bank"), no longer -------------- wishes to be a party to the Credit Agreement, and each of UNION BANK OF SWITZERLAND and THE SAKURA BANK, LIMITED (collectively, the "New Banks"), --------- wishes to become a party to the Credit Agreement as amended hereby. (f) All capitalized terms defined in the Credit Agreement and not otherwise defined herein shall have the same meanings herein as in the Credit Agreement. NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the Company, the Banks, the Retiring Bank and the Agent hereby agree as follows: SECTION 1. Amendment to Section 1.01 of the Credit Agreement. The ------------------------------------------------- definitions of the terms "Applicable Fee Percentage", "Applicable Margin" and "Maturity Date" contained in Section 1.01 of the Credit Agreement are hereby amended in their entirety to read as follows: "'Applicable Fee Percentage' means, on any date, the applicable percentage set forth below based upon the ratings applicable on such date to the Company's senior, unsecured, non-credit-enhanced long term indebtedness for borrowed money ("Index Debt"): Applicable Fee Category 1 Percentage ---------- ---------- A or higher by S&P; and .0800 A2 or higher by Moody's Category 2 ---------- Lower than A and equal to or .1000 greater than BBB+ by S&P; and Lower than A2 and equal to or greater than Baa1 by Moody's Category 3 ---------- BBB by S&P; and .1250 Baa2 by Moody's Category 4 ---------- BBB - or lower by S&P; or .1875 Baa3 or lower by Moody's For purposes of the foregoing: (a) if neither Moody's nor S&P shall have in effect a rating for Index Debt, then both such rating agencies will be deemed to have established ratings for Index Debt in Category 4; (b) if only one of Moody's and S&P shall have in effect a rating for Index Debt, the Company and the Banks will negotiate in good faith to agree upon another rating agency to be substituted by an amendment to this Agreement for the rating agency which shall not have a rating in effect, and pending the effectiveness of such amendment the Applicable Fee Percentage will be determined by reference to the available rating; (c) if the ratings established or deemed to have been established by Moody's and S&P shall fall within different Categories, the Applicable Fee Percentage shall be determined by reference to the superior (or numerically lower) Category; and (d) if any rating established or deemed to have been established by Moody's or S&P shall be changed (other than as a result of a change in the rating system of either Moody's or S&P), such change shall be effective as of the date on which such change is first announced by the rating agency making such change. Each change in the Applicable Fee Percentage shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change. If the rating system of either Moody's or S&P shall change prior to the Maturity Date, the Company and the Banks shall negotiate in good faith to amend the references to specific ratings in this definition to reflect such changed rating system." . "'Applicable Margin' means, on any date, with respect to Eurodollar Loans, Certificate of Deposit Loans or Alternate Base Rate Loans, as the case may be, the applicable spreads set forth below based upon the ratings applicable on such date to the Index Debt. Eurodollar Certificate of Deposit Alternate Rate Category 1 Loan Spread Loan Spread Loan Spread ---------- ----------- ----------- ----------- A or higher by S&P; and .1700% .3000% 0% A2 or higher by Moody's Category 2 ---------- Lower than A and equal to or .2000% .3250% 0% greater than BBB+ by S&P; and Lower than A2 and equal to or greater than Baa1 by Moody's Category 3 ---------- BBB by S&P; and .2750% .4000% 0% Baa2 by Moody's Category 4 ---------- BBB - or lower by S&P; or .4375% .5625% 0% Baa3 or lower by Moody's For purposes of the foregoing: (a) if neither Moody's nor S&P shall have in effect a rating for Index Debt, then both such rating agencies will be deemed to have established ratings for Index Debt in Category 4; (b) if only one of Moody's and S&P shall have in effect a rating for Index Debt, the Company and the Banks will negotiate in good faith to agree upon another rating agency to be substituted by an amendment to this Agreement for the rating agency which shall not have a rating in effect, and pending the effectiveness of such amendment the Applicable Margin will be determined by reference to the available rating; (c) if the ratings established or deemed to have been established by Moody's and S&P shall fall within different Categories, the Applicable Margin shall be determined by reference to the superior (or numerically lower) Category; and (d) if any rating established or deemed to have been established by Moody's or S&P shall be changed (other than as a result of a change in the rating system of either Moody's or S&P), such change shall be effective as of the date on which such change is first announced by the rating agency making such change. Each change in the Applicable Margin shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change. If the rating system of either Moody's or S&P shall change prior to the Maturity Date, the Company and the Banks shall negotiate in good faith to amend the references to specific ratings in this definition to reflect such changed rating system.". "'Maturity Date' means June 26, 2001, or the earlier termination of the Commitments pursuant to Section 7.01.". ------------ SECTION 2. Amendment to Section 6.10 of the Credit Agreement. Section ------------------------------------------------- 6.10 of the Credit Agreement is hereby amended in its entirety to read as follows: "The Company will not permit its Consolidated Tangible Net Worth to be less than $1,000,000,000.". SECTION 3. Commitment of Banks. Effective as of the date hereof, ------------------- each of the Banks shall have a Commitment equal to the amount shown opposite its signature on the signature pages hereof (such Bank's "New Commitment"). -------------- SECTION 4. Conditions to Effectiveness. This Amendment shall become --------------------------- effective when, and only when, the following conditions have been fulfilled: (a) the Company and the Banks shall have executed a counterpart of this Amendment; (b) the Agent shall have executed a counterpart of this Amendment and shall have received counterparts of this Amendment executed by the Company and the Banks; (c) the Agent shall have received a Note dated of even date herewith executed by the Company and payable to the order of each New Bank; and (d) the Agent shall have received from the Company a certificate of the Secretary or Assistant Secretary of the Company certifying that attached thereto is (i) a true and complete copy of the general borrowing resolutions of the Board of Directors of the Company authorizing the execution, delivery and performance of the Credit Agreement, as amended hereby, and (ii) the incumbency and specimen signature of each officer of the Company executing this Amendment. SECTION 5. Representations and Warranties True; No Default or Event -------------------------------------------------------- of Default. The Company hereby represents and warrants to the Agent and the ---------- Banks that after giving effect to the execution and delivery of this Amendment (a) the representations and warranties set forth in the Credit Agreement are true and correct on the date hereof as though made on and as of such date and (b) no Default or Event of Default has occurred and is continuing. SECTION 6. Reference to the Credit Agreement and Effect on the Notes. --------------------------------------------------------- (a) Upon the effectiveness of this Amendment, each reference in the Credit Agreement to "this Agreement", "hereunder", "herein" or words of like import shall mean and be a reference to the Credit Agreement, as amended and affected hereby. (b) Upon the effectiveness of this Amendment, each reference in the Notes to "the Credit Agreement" shall mean and be a reference to the Credit Agreement, as amended and affected hereby. (c) Upon the effectiveness of this Amendment, each reference in the Credit Agreement and the "Notes to the Applicable Fee Percentage", "Applicable Margin" and "Maturity Date" shall mean and be a reference to such terms as modified pursuant to Section 1. --------- (d) Upon the effectiveness of this Amendment, each reference in the Credit Agreement and the Notes to a Bank's "Commitment" shall mean and be a reference to such Bank's New Commitment. (e) Upon the effectiveness of this Amendment, the Retiring Bank shall cease to be a Bank and to have any obligation to the Company under the Credit Agreement and under the Credit Agreement as amended hereby, and the Company shall have no further obligations to the Retiring Bank under the Credit Agreement and under the Credit Agreement as amended hereby, except under any indemnities contained in the Credit Agreement as amended hereby that expressly provide that they survive the termination of the Credit Agreement. (f) The Credit Agreement and the Notes, as amended and affected hereby, shall remain in full force and effect and are hereby ratified and confirmed. SECTION 7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND ------------- CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAW AND SHALL BE BINDING UPON THE COMPANY, THE BANKS AND THE AGENT AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS. SECTION 8. Descriptive Headings. The section headings appearing in -------------------- this Amendment have been inserted for convenience only and shall be given no substantive meaning or significance whatever in construing the terms and provisions of this Amendment. SECTION 9. FINAL AGREEMENT OF THE PARTIES. THE CREDIT AGREEMENT ------------------------------ (INCLUDING THE EXHIBITS AND SCHEDULE THERETO), AS AMENDED HEREBY, THE NOTES, THE AGENT'S LETTER AND THE OTHER LOAN DOCUMENTS, CONSTITUTE A "LOAN AGREEMENT" AS DEFINED IN SECTION 26.02(a) OF THE TEXAS BUSINESS AND COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES RESPECTING THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES RESPECTING THE SUBJECT MATTER HEREOF AND THEREOF. SECTION 10. Execution in Counterparts. This Amendment may be ------------------------- executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed effective as of the date first stated herein, by their respective officers thereunto duly authorized. TANDY CORPORATION By: /s/ Loren K. Jensen ------------------------------ Name: Loren K. Jensen Title: Vice President-Treasurer TEXAS COMMERCE BANK NATIONAL ASSOCIATION, as Agent By: /s/ B.B. Wuthrich ------------------------------ Name: B.B. Wuthrich Title: Vice President Commitment: Banks ---------- ----- $ 21,000,000.00 BANK OF AMERICA ILLINOIS, as successor to Bank of America National Trust and Savings Association By: /s/ W. Thomas Barnett ------------------------------ Name: W. Thomas Barnett Title: Vice President Commitment: Banks ---------- ----- $ 21,000,000.00 THE BANK OF NEW YORK By: /s/ Charlotte Sohn ------------------------------ Name: Charlotte Sohn Title: Vice President Commitment: Banks ---------- ----- $ 13,500,000.00 BANK ONE, TEXAS, N.A. By: /s/ John D. Hudgens ------------------------------ Name: John D. Hudgens Title: Vice President Commitment: Banks ---------- ----- $ 13,500,000.00 BANK OF TOKYO - MITSUBISHI TRUST COMPANY, SUCCESSOR BY MERGER TO THE BANK OF TOKYO TRUST COMPANY By: /s/ M. R. Marron ------------------------------ Name: M. R. Marron Title: Vice President Commitment: Banks ---------- ----- $ 21,000,000.00 CREDIT LYONNAIS NEW YORK BRANCH By: /s/ Robert Ivosevich ------------------------------ Name: Robert Ivosevich Title: Senior Vice President Commitment: Banks ---------- ----- $ 13,500,000.00 THE FIRST NATIONAL BANK OF BOSTON By: /s/ Judith C. E. Kelly ------------------------------ Name: Judith C. E. Kelly Title: Vice President Commitment: Banks ---------- ----- $ 13,500,000.00 FIRST UNION NATIONAL BANK OF NORTH CAROLINA By: /s/ Jane W. Workman ------------------------------ Name: Jane W. Workman Title: Senior Vice President Commitment: Banks ---------- ----- $ 21,000,000.00 MELLON BANK, N.A. By: /s/ Marc T. Kennedy ------------------------------ Name: Marc T. Kennedy Title: Assistant. Vice President Commitment: Banks ---------- ----- $ 13,500,000.00 NATIONAL WESTMINSTER BANK, Plc By: /s/ Marilyn A. Windsor ------------------------------ Name: Marilyn A. Windsor Title: Vice President NATIONAL WESTMINSTER BANK, Plc Nassau Branch By: /s/ Marilyn A. Windsor ------------------------------ Name: Marilyn A. Windsor Title: Vice President Commitment: Banks ---------- ----- $ 21,000,000.00 NATIONSBANK OF TEXAS, N.A. By: /s/ Todd Shipley ------------------------------ Name: Todd Shipley Title: Senior Vice President Commitment: Banks ---------- ----- $ 13,500,000.00 SOCIETE GENERALE, SOUTHWEST AGENCY By: /s/ Louis P. Laville, III ------------------------------ Name: Louis P. Laville, III Title: Vice President Commitment: Banks ---------- ----- $ 13,500,000.00 THE SUMITOMO BANK, LIMITED HOUSTON AGENCY By: /s/ Harumitsu Seki ------------------------------ Name: Harumitsu Seki Title: General Manager Commitment: Banks ---------- ----- $ 25,500,000.00 TEXAS COMMERCE BANK NATIONAL ASSOCIATION By: /s/ B.B. Wuthrich ------------------------------ Name: B.B. Wuthrich Title: Vice President Commitment: Banks ---------- ----- $ 13,500,000.00 TORONTO DOMINION (TEXAS), INC. By: /s/ David G. Parker ------------------------------ Name: David G. Parker Title: Vice President Commitment: Banks ---------- ----- $ 21,000,000.00 CITICORP USA, INC. By: /s/ Marjorie Futornick ------------------------------ Name: Marjorie Futornick Title: Vice President Commitment: Banks ---------- ----- $ 13,500,000.00 COMMERZBANK, AKTIENGESELLSCHAFT, ATLANTA AGENCY By: /s/ A. K. Bremer ------------------------------ Name: A. K. Bremer Title: Senior Vice President By: /s/ E. Kagerer ------------------------------ Name: E. Kagerer Title: Assistant Vice President Commitment: Banks ---------- ----- $ 13,500,000.00 UNION BANK OF SWITZERLAND, New York Branch By: /s/ Michael J Ahearn ------------------------------ Name: Michael J. Ahearn Title: Managing Director By: /s/ Freddy Imholz ------------------------------ Name: Freddy Imholz Title: Vice President Commitment: Banks ---------- ----- $ 13,500,000.00 THE SAKURA BANK, LIMITED By: /s/ Akira Hara ------------------------------ Name: Akira Hara Title: General Manager Retiring Bank ------------- THE CHASE MANHATTAN BANK, N.A. By: /s/ Ellen L. Gertzog ------------------------------ Name: Ellen L. Gertzog Title: Vice President EX-4 5 EXHIBIT 4g THIRD AMENDMENT TO REVOLVING CREDIT AGREEMENT (FACILITY A) THIS THIRD AMENDMENT TO REVOLVING CREDIT AGREEMENT (FACILITY A) (this "Amendment") dated as of June 28, 1996 is among TANDY --------- CORPORATION, a Delaware corporation (the "Company"), the Retiring Bank ------- (as defined below), and the banks and other financial institutions listed on the signature pages under the heading Banks including the New Banks (as defined below) (collectively, the "Banks"), and TEXAS ----- COMMERCE BANK NATIONAL ASSOCIATION, as agent (in such capacity, the "Agent") for the Banks. ----- PRELIMINARY STATEMENT --------------------- (a) The Company, certain of the Banks, BARCLAYS BANK PLC ("Barclays"), the Retiring Bank and the Agent entered into a Revolving -------- Credit Agreement (Facility A) (the "Original Credit Agreement") dated ------------------------- as of May 27, 1994. (b) The Company, certain of the Banks, the Retiring Bank, Barclays and the Agent entered into the Agreement and First Amendment To Revolving Credit Agreement (Facility A) ("First Amendment") dated as of May 26, 1995 --------------- modifying the Original Credit Agreement by inter alia adding CITICORP USA, INC. ("Citicorp"), and COMMERZBANK AKTIENGELLSCHAFT, ATLANTA -------- AGENCY ("Commerzbank"), as Banks under the Credit Agreement, retiring ----------- Barclays as a Bank thereunder, modifying the Commitment amount for each Bank and amending the definition of "Maturity Date". (c) The Company, certain of the Banks, the Retiring Bank, and the Agent entered into the Second Amendment to Revolving Credit Agreement (Facility A) (the "Second Amendment") dated as of May 24, 1996 ---------------- modifying the Original Credit Agreement, as amended by the First Amendment, by further amending the definition of Maturity Date (the Original Credit Agreement as amended by the First Amendment and the Second Amendment being the "Credit Agreement"). ---------------- (d) There are no outstanding loan balances or any advances owed by the Company to any of the Banks pursuant to the Credit Agreement. (e) The Company has requested certain provisions of the Credit Agreement be amended, and that each of the Banks have a Commitment equal to the amount shown opposite its signature on the signature pages hereof. (f) THE CHASE MANHATTAN BANK, N.A. (the "Retiring Bank"), no longer ------------- wishes to be a party to the Credit Agreement and each of UNION BANK OF SWITZERLAND and THE SAKURA BANK, LIMITED (collectively, the "New Banks"), --------- wishes to become a party to the Credit Agreement as amended hereby. (g) All capitalized terms defined in the Credit Agreement and not otherwise defined herein shall have the same meanings herein as in the Credit Agreement. NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the Company, the Banks, the Retiring Bank and the Agent hereby agree as follows: SECTION 1. Amendment to Section 1.01 of the Credit Agreement. The ------------------------------------------------- definitions of the terms "Applicable Fee Percentage", "Applicable Margin" and "Maturity Date" contained in Section 1.01 of the Credit Agreement are hereby amended in their entirety to read as follows: "'Applicable Fee Percentage' means, on any date, .07%.". "'Applicable Margin' means, on any date, with respect to Eurodollar Loans, .23%; Certificate of Deposit Loans, .355%; and Alternate Base Rate Loans, 0%.". "'Maturity Date' means June 26, 1997, or the earlier termination of the Commitments pursuant to Section 7.01.". ------------ SECTION 2. Amendment to Section 6.10 of the Credit Agreement. ------------------------------------------------- Section 6.10 of the Credit Agreement is hereby amended in its entirety to read as follows: "The Company will not permit its Consolidated Tangible Net Worth to be less than $1,000,000,000.". SECTION 3. Commitment of Banks. Effective as of the date hereof, ------------------- each of the Banks shall have a Commitment equal to the amount shown opposite its signature on the signature pages hereof (such Bank's "New Commitment"). -------------- SECTION 4. Conditions to Effectiveness. This Amendment shall become --------------------------- effective when, and only when, the following conditions have been fulfilled: (a) the Company and the Banks shall have executed a counterpart of this Amendment; (b) the Agent shall have executed a counterpart of this Amendment and shall have received counterparts of this Amendment executed by the Company and the Banks; (c) the Agent shall have received a Note dated of even date herewith executed by the Company and payable to the order of each New Bank; and (d) the Agent shall have received from the Company a certificate of the Secretary or Assistant Secretary of the Company certifying that attached thereto is (i) a true and complete copy of the general borrowing resolutions of the Board of Directors of the Company authorizing the execution, delivery and performance of the Credit Agreement, as amended hereby, and (ii) the incumbency and specimen signature of each officer of the Company executing this Amendment. SECTION 5. Representations and Warranties True; No Default or Event -------------------------------------------------------- of Default. The Company hereby represents and warrants to the Agent and ---------- the Banks that after giving effect to the execution and delivery of this Amendment (a) the representations and warranties set forth in the Credit Agreement are true and correct on the date hereof as though made on and as of such date and (b) no Default or Event of Default has occurred and is continuing. SECTION 6. Reference to the Credit Agreement and Effect on the Notes. --------------------------------------------------------- (a) Upon the effectiveness of this Amendment, each reference in the Credit Agreement to "this Agreement", "hereunder", "herein" or words of like import shall mean and be a reference to the Credit Agreement, as amended and affected hereby. (b) Upon the effectiveness of this Amendment, each reference in the Notes to "the Credit Agreement" shall mean and be a reference to the Credit Agreement, as amended and affected hereby. (c) Upon the effectiveness of this Amendment, each reference in the Credit Agreement and the Notes to the "Applicable Fee Percentage", "Applicable Margin" and "Maturity Date" shall mean and be a reference to such terms as modified pursuant to Section 1. --------- (d) Upon the effectiveness of this Amendment, each reference in the Credit Agreement and Notes to a Bank's "Commitment" shall mean and be a reference to such Bank's New Commitment. (e) Upon the effectiveness of this Amendment, the Retiring Bank shall cease to be a Bank and to have any obligation to the Company under the Credit Agreement and under the Credit Agreement as amended hereby, and the Company shall have no further obligations to the Retiring Bank under the Credit Agreement and under the Credit Agreement as amended hereby, except under any indemnities contained in the Credit Agreement as amended hereby that expressly provide that they survive the termination of the Credit Agreement. (f) The Credit Agreement and the Notes, as amended and affected hereby, shall remain in full force and effect and are hereby ratified and confirmed. SECTION 7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND ------------- CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAW AND SHALL BE BINDING UPON THE COMPANY, THE BANKS AND THE AGENT AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS. SECTION 8. Descriptive Headings. The section headings appearing in -------------------- this Amendment have been inserted for convenience only and shall be given no substantive meaning or significance whatever in construing the terms and provisions of this Amendment. SECTION 9. FINAL AGREEMENT OF THE PARTIES. THE CREDIT AGREEMENT ------------------------------ (INCLUDING THE EXHIBITS AND SCHEDULE THERETO), AS AMENDED HEREBY, THE NOTES, THE AGENT'S LETTER AND THE OTHER LOAN DOCUMENTS, CONSTITUTE A "LOAN AGREEMENT" AS DEFINED IN SECTION 26.02(a) OF THE TEXAS BUSINESS AND COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES RESPECTING THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES RESPECTING THE SUBJECT MATTER HEREOF AND THEREOF. SECTION 10. Execution in Counterparts. This Amendment may be ------------------------- executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed effective as of the date first stated herein, by their respective officers thereunto duly authorized. TANDY CORPORATION By: /s/ Loren K. Jensen ------------------------------ Name: Loren K. Jensen Title: Vice President-Treasurer TEXAS COMMERCE BANK NATIONAL ASSOCIATION, as Agent By: /s/ B.B. Wuthrich ------------------------------ Name: B.B. Wuthrich Title: Vice President Commitment: Banks ---------- ----- $ 14,000,000.00 BANK OF AMERICA ILLINOIS, as successor to Bank of America National Trust and Savings Association By: /s/ W. Thomas Barnett ------------------------------ Name: W. Thomas Barnett Title: Vice President Commitment: Banks ---------- ----- $ 14,000,000.00 THE BANK OF NEW YORK By: /s/ Charlotte Sohn ------------------------------ Name: Charlotte Sohn Title: Vice President Commitment: Banks ---------- ----- $ 9,000,000.00 BANK ONE, TEXAS, N.A. By: /s/ John D. Hudgens ------------------------------ Name: John D. Hudgens Title: Vice President Commitment: Banks ---------- ----- $ 9,000,000.00 BANK OF TOKYO-MITSUBISHI TRUST COMPANY, SUCCESSOR BY MERGER TO THE BANK OF TOKYO TRUST COMPANY By: /s/ M. R. Marron ------------------------------ Name: M. R. Marron Title: Vice President Commitment: Banks ---------- ----- $ 14,000,000.00 CREDIT LYONNAIS NEW YORK BRANCH By: /s/ Robert Ivosevich ------------------------------ Name: Robert Ivosevich Title: Senior Vice President Commitment: Banks ---------- ----- $ 9,000,000.00 THE FIRST NATIONAL BANK OF BOSTON By: /s/ Judith C. E. Kelly ------------------------------ Name: Judith C. E. Kelly Title: Vice President Commitment: Banks ---------- ----- $ 9,000,000.00 FIRST UNION NATIONAL BANK OF NORTH CAROLINA By: /s/ Jane W. Workman ------------------------------ Name: Jane W. Workman Title: Senior Vice President Commitment: Banks ---------- ----- $ 14,000,000.00 MELLON BANK, N.A. By: /s/ Marc T. Kennedy ------------------------------ Name: Marc T. Kennedy Title: Assistant Vice President Commitment: Banks ---------- ----- $ 9,000,000.00 NATIONAL WESTMINSTER BANK, Plc By: /s/ Marilyn A. Windsor ------------------------------ Name: Marilyn A. Windsor Title: Vice President NATIONAL WESTMINSTER BANK, Plc Nassau Branch By: /s/ Marilyn A. Windsor ------------------------------ Name: Marilyn A. Windsor Title: Vice President Commitment: Banks ---------- ----- $ 14,000,000.00 NATIONSBANK OF TEXAS, N.A. By: /s/ Todd Shipley ------------------------------ Name: Todd Shipley Title: Senior Vice President Commitment: Banks ---------- ----- $ 9,000,000.00 SOCIETE GENERALE, SOUTHWEST AGENCY By: /s/ Louis P. Laville, III ------------------------------ Name: Louis P. Laville, III Title: Vice President Commitment: Banks ---------- ----- $ 9,000,000.00 THE SUMITOMO BANK, LIMITED HOUSTON AGENCY By: /s/ Harumitsu Seki ------------------------------ Name: Harumitsu Seki Title: General Manager Commitment: Banks ---------- ----- $ 17,000,000.00 TEXAS COMMERCE BANK NATIONAL ASSOCIATION By: /s/ B.B. Wuthrich ------------------------------ Name: B.B. Wuthrich Title: Vice President Commitment: Banks ---------- ----- $ 9,000,000.00 TORONTO DOMINION (TEXAS), INC. By: /s/ David G. Parker ------------------------------ Name: David G. Parker Title: Vice President Commitment: Banks ---------- ----- $ 14,000,000.00 CITICORP USA, INC. By: /s/ Marjorie Futornick ------------------------------ Name: Marjorie Futornick Title: Vice President Commitment: Banks ---------- ----- $ 9,000,000.00 COMMERZBANK, AKTIENGESELLSCHAFT, ATLANTA AGENCY By: /s/ A. Bremer ------------------------------ Name: A. Bremer Title: Senior Vice President By: /s/ E. Kagerer ------------------------------ Name: E. Kagerer Title: Assistant Vice President Commitment: Banks ---------- ----- $ 9,000,000.00 UNION BANK OF SWITZERLAND By: /s/ Michael J Ahearn ------------------------------ Name: Michael J. Ahearn Title: Managing Director By: /s/ Freddy Imholz ------------------------------ Name: Freddy Imholz Title: Vice President Commitment: Banks ---------- ----- $ 9,000,000.00 THE SAKURA BANK, LIMITED By: /s/ Akira Hara ------------------------------ Name: Akira Hara Title: General Manager Retiring Bank ------------- THE CHASE MANHATTAN BANK, N.A. By: /s/ Ellen L. Gertzog ------------------------------ Name: Ellen L. Gertzog Title: Vice President EX-11 6 TANDY CORPORATION EXHIBIT 11 STATEMENT OF COMPUTATION OF EARNINGS PER SHARE Three Months Ended June 30, Six Months Ended June 30, -------------------------- -------------------------- (In thousands, except per share amounts) 1996 1995 1996 1995 - ---------------------------------------- ---------- ---------- ---------- ---------- Primary Earnings Per Share Reconciliation of net income per statements of income to amounts used in computation of primary earnings per share: Net income, as reported $ 9,299 $ 37,964 $ 23,779 $ 76,899 Less dividends on preferred stock: Series B (1,571) (1,631) (3,176) (3,298) ---------- ---------- ---------- ---------- Net income available to common shareholders for primary earnings per share $ 7,728 $ 36,333 $ 20,603 $ 73,601 ========== ========== ========== ========== Weighted average number of common shares outstanding 60,565 65,763 60,851 62,216 Weighted average number of $2.14 depositary shares, representing Series C preferred stock, treated as common stock due to mandatory conversion (c) -- -- -- 4,505 Weighted average number of common shares issuable under stock option plans, net of assumed treasury stock repurchases at average market prices 446 477 338 468 ---------- ---------- ---------- ---------- Weighted average number of common and common equivalent shares outstanding 61,011 66,240 61,189 67,189 ========== ========== ========== ========== Net income available per average common and common equivalent share $ 0.13 $ 0.55 $ 0.34 $ 1.10 ========== ========== ========== ========== Fully Diluted Earnings Per Share (a) Reconciliation of net income per statements of income to amounts used in computation of fully diluted earnings per share: Net income available to common shareholders $ 7,728 $ 36,333 $ 20,603 $ 73,601 Adjustments for assumed conversion of Series B preferred stock to common stock as of the beginning of the period: Plus dividends on Series B preferred stock (b) 1,631 (b) 3,298 Less additional contribution that would have been required for the TESOP if Series B preferred stock had been converted (b) (938) (b) (1,870) ---------- ---------- ---------- ---------- Net income available per common and common equivalent share, as adjusted $ 7,728 $ 37,026 $ 20,603 $ 75,029 ========== ========== ========== ========== Reconciliation of weighted average number of shares outstanding to amount used in computation of fully diluted earnings per share: Weighted average number of shares outstanding 61,011 66,240 61,189 67,189 Adjusted to reflect assumed exercise of stock options as of the beginning of the period (b) 164 175 197 Adjustment to reflect assumed conversion of Series B preferred stock to common stock as of the beginning of the period (b) 1,915 (b) 1,926 ---------- ---------- ---------- ---------- Weighted average number of common and common equivalent shares outstanding, as adjusted 61,011 68,319 61,364 69,312 ========== ========== ========== ========== Fully diluted net income available per average common and common equivalent share $ 0.13 $ 0.54 $ 0.34 $ 1.08 ========== ========== ========== ========== (a) This calculation is submitted in accordance with Regulation S-K, Item 601(b)(11) although not required by footnote 2 to paragraph 14 of APB Opinion No. 15 because it results in dilution of less than 3%. (b) For the three and six months ended June 30, 1996, these items are anti-dilutive and thus are omitted from the calculation. (c) The amount in 1995 represents the pro rata portion of the Series C preferred stock outstanding prior to their conversion effective March 10, 1995.
EX-12 7 EXHIBIT 12 TANDY CORPORATION STATEMENT OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS Three Months Ended June 30, Six Months Ended June 30, -------------------------- -------------------------- (In thousands, except ratios) 1996 1995 1996 1995 - ----------------------------- ---------- ---------- ---------- ---------- Ratio of Earnings to Fixed Charges: Net income $ 9,299 $ 37,964 $ 23,779 $ 76,899 Plus provision for income taxes 5,492 23,766 14,048 48,140 ---------- ---------- ---------- ---------- Income before income taxes 14,791 61,730 37,827 125,039 ---------- ---------- ---------- ---------- Fixed charges: Interest expense and amortization of debt discount 8,887 5,190 16,017 15,850 Amortization of issuance expense 62 134 125 203 Appropriate portion (33 1/3%) of rentals 19,357 17,227 39,152 34,975 ---------- ---------- ---------- ---------- Total fixed charges 28,306 22,551 55,294 51,028 ---------- ---------- ---------- ---------- Earnings before income taxes and fixed charges $ 43,097 $ 84,281 $ 93,121 $ 176,067 ========== ========== ========== ========== Ratio of earnings to fixed charges 1.52 3.74 1.68 3.45 ========== ========== ========== ========== Ratio of Earnings to Fixed Charges and Preferred Dividends: Total fixed charges, as above $ 28,306 $ 22,551 $ 55,294 $ 51,028 Preferred dividends 1,571 1,631 3,176 8,122 ---------- ---------- ---------- ---------- Total fixed charges and preferred dividends $ 29,877 $ 24,182 $ 58,470 $ 59,150 ========== ========== ========== ========== Earnings before income taxes, fixed charges and preferred dividends $ 43,097 $ 84,281 $ 93,121 $ 176,067 ========== ========== ========== ========== Ratio of earnings to fixed charges and preferred dividends 1.44 3.49 1.59 2.98 ========== ========== ========== ==========
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