-----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, LlQdkgaSczfH6jc2FtsOVA0uesfVVSB4TD2IegsNrbrXiIaZRv2Guk2jlYbR5Ka+ beUkue8u0KsViP24AjdK2Q== 0000098246-07-000126.txt : 20070531 0000098246-07-000126.hdr.sgml : 20070531 20070531172953 ACCESSION NUMBER: 0000098246-07-000126 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070531 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070531 DATE AS OF CHANGE: 20070531 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TIFFANY & CO CENTRAL INDEX KEY: 0000098246 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-JEWELRY STORES [5944] IRS NUMBER: 133228013 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09494 FILM NUMBER: 07891849 BUSINESS ADDRESS: STREET 1: 727 FIFTH AVE CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2122305317 MAIL ADDRESS: STREET 1: 727 FIFTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 8-K 1 form8k_053107.txt FORM 8K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------- FORM 8-K CURRENT REPORT ----------------------- Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934 Date of Report: May 31, 2007 TIFFANY & CO. (Exact name of Registrant as specified in its charter) Delaware 1-9494 13-3228013 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 727 Fifth Avenue, New York, New York 10022 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (212) 755-8000 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02. Results of Operations and Financial Condition. On May 31, 2007, Registrant issued a press release announcing its unaudited earnings and results of operations for the first quarter ended April 30, 2007. A copy of the May 31, 2007 press release is attached hereto as Exhibit 99.1 to this Form 8-K. The information in this Current Report on Form 8-K is being furnished pursuant to Item 2.02 Results of Operations and Financial Condition. In accordance with General Instruction B.2 of Form 8-K, the information in this report shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly stated by specific reference in such filing. Item 9.01. Financial Statements and Exhibits. (c) Exhibits 99.1 Press Release dated May 31, 2007. SIGNATURE 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. TIFFANY & CO. BY: /s/ Patrick B. Dorsey ------------------------------------- Patrick B. Dorsey Senior Vice President, General Counsel and Secretary Date: May 31, 2007 EXHIBIT INDEX Exhibit No. Description 99.1 Text of Press Release issued by Tiffany & Co., dated May 31, 2007. EX-99 2 ex_99-1.txt EXHIBIT 99.1 PRESS RELEASE 1 Exhibit 99.1 TIFFANY & CO. NEWS RELEASE Contacts: Fifth Avenue & 57th Street --------- New York, N.Y. 10022 James N. Fernandez (212) 230-5315 Mark L.Aaron (212)230-5301 TIFFANY REPORTS ITS FIRST QUARTER RESULTS; ------------------------------------------ NET SALES RISE 15% AND E.P.S. INCREASES 20% TO $0.36; ----------------------------------------------------- COMPANY TO EXPAND WHOLESALE DISTRIBUTION OF WATCHES --------------------------------------------------- New York, N.Y., May 31, 2007 - Tiffany & Co. (NYSE: TIF) reported 15% increases in both net sales and net earnings in its first quarter ended April 30, 2007. Net sales rose 15% to $620,875,000. Growth was geographically broad-based, with the exception of Japan. On a constant-exchange-rate basis which excludes the effect of translating foreign-currency-denominated sales into U.S. dollars (see attached "Non-GAAP Measures" schedule), net sales increased 14% and worldwide comparable store sales rose 8%. Net earnings in the first quarter rose 15% to $49,659,000 from $43,142,000 a year ago, and earnings per diluted share rose 20% to $0.36 from $0.30 in the prior year. Sales by channel of distribution were as follows: - ------------------------------------------------- o U.S. Retail sales rose 15% to $298,684,000, primarily due to increased spending per transaction. Comparable store sales growth of 12% was achieved through a 26% increase in the New York flagship store and a 9% increase in branch store sales. Results from six new stores opened in the past year meaningfully contributed. The Company opened a store in Austin, Texas in the first quarter and operated 65 TIFFANY & CO. U.S. stores at the end of the period. 1 o International Retail sales rose 15% to $248,007,000. On a constant-exchange-rate basis, sales rose 13% (4% on a comparable store sales basis) due to growth in most international markets except Japan. Detailed sales results by geographical region are noted on the attached "Non-GAAP Measures" schedule. Tiffany added a net of three Company-operated retail locations, including three in Japan (and closed two), one in Korea and one in Singapore, and operated 106 TIFFANY & CO. international stores and boutiques at quarter-end. o Direct Marketing sales rose 11% to $33,296,000 due to growth in both the number of orders and in the average amount spent per order. o Other sales increased 22% to $40,888,000. The increase was due to a $5.2 million increase in wholesale sales of diamonds, as well as growth in the Company's specialty retail sales at LITTLE SWITZERLAND and IRIDESSE stores. Other financial highlights were: - -------------------------------- o Gross margin (gross profit as a percentage of net sales) was 54.5% versus 55.8% in 2006's first quarter. The decline largely reflected higher product costs, as well as increased wholesale sales of diamonds and changes in sales mix toward higher-ticket, lower-gross margin jewelry. The Company recorded a LIFO inventory charge of $6,889,000, versus a charge of $1,366,000 in the prior year's quarter. o Selling, general and administrative ("SG&A") expenses rose 13%, primarily due to planned increases in store-and marketing-related costs. As a percentage of net sales, SG&A expenses were 41.4% in the first quarter, versus 42.1% a year ago. o The Company's effective tax rate was 36.5%, versus 38.6% in the prior year. The lower rate in 2007 reflected the Company's recording of favorable reserve adjustments related to the expiration of certain statutory periods. 2 o Net inventories at April 30, 2007 were 14% above the prior year, due to new store openings, broadened product assortments, higher precious metal costs and expanded diamond manufacturing and sourcing operations. o The Company repurchased and retired 520,618 shares of its Common Stock in the first quarter at a total cost of $24,997,000, or an average cost of $48.01 per share. Approximately $670 million remains available for repurchases through December 2009 under the currently authorized program. o Total debt as a percentage of stockholders' equity was 28% at April 30, 2007 versus 27% a year ago. Michael J. Kowalski, chairman and chief executive officer, said, "We are pleased to start 2007 with these results and excited about our plans for the full year. We will increase the number of our company-operated TIFFANY & CO. locations by approximately 10%, and introduce a wide range of new product designs." He added, "We are now one month into the second quarter and sales in May are achieving our overall expectation. Strong sales growth in the U.S. and in most international markets is offsetting continued weakness in Japan. Based on our planned initiatives and a continued favorable retail environment, our full year 2007 expectation now calls for approximately 12% sales growth, an improved operating margin and earnings per diluted share in a range of $2.10 - $2.15." Separately, the Company plans to launch a significant expansion of its wholesale distribution of TIFFANY & CO. watches in 2008 in major U.S. and international markets. Mr. Kowalski said, "Tiffany has developed a very strong, competitive watch assortment in the past several years, always with a long-term objective to increase watch sales as a percentage of our overall business. We are now well-positioned to take the next step in this evolution, and believe that expanding our distribution through other fine jewelry and watch retailers will enable us to build customer awareness and generate 3 meaningful incremental sales growth. The initial offering will include our MARK, ATLAS, GRAND and T-57 collections, as well as a selection of jeweled timepieces." Today's Conference Call - ----------------------- The Company will host a conference call today at 8:30 a.m. (EST) to review these results and its outlook. Investors may listen to the call at www.tiffany.com (click on "About Tiffany," "Shareholder Information," "Conference Call") and www.streetevents.com. Next Scheduled Announcement - --------------------------- The Company intends to report its second quarter results on August 30, 2007 with a conference call at 8:30 a.m. (EST) that day, to be broadcast at www.tiffany.com and www.streetevents.com. To receive future notifications of conference calls and news release alerts, please register at www.tiffany.com (click on "About Tiffany," "Shareholder Information," "Calendar of Events" and "News by E-Mail"). Company Description - ------------------- Tiffany & Co. operates jewelry and specialty retail stores and manufactures products through its subsidiary corporations. Its principal subsidiary is Tiffany and Company. The Company operates TIFFANY & CO. retail stores and boutiques in the Americas, Asia-Pacific and Europe and engages in direct selling through Internet, catalog and business gift operations. Other operations include consolidated results from ventures operated under trademarks or tradenames other than TIFFANY & CO. For additional information, please visit www.tiffany.com or call our shareholder information line at 800-TIF-0110. This document contains certain "forward-looking" statements concerning the Company's objectives and expectations with respect to sales, store openings, operating margin and earnings. Actual results might differ materially from those projected in the forward-looking statements. Information concerning risk factors that could cause actual results to differ materially is set forth in the Company's 2006 Annual Report on Form 10-K and in other reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances. # # # 4 TIFFANY & CO. AND SUBSIDIARIES (Unaudited) NON-GAAP MEASURES - ----------------- The Company's reported sales reflect either a translation-related benefit from strengthening foreign currencies or a detriment from a strengthening U.S. dollar. The Company reports information in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). Internally, management monitors its international sales performance on a non-GAAP basis that eliminates the positive or negative effects that result from translating international sales into U.S. dollars ("constant-exchange-rate basis"). Management believes this constant-exchange-rate measure provides a more representative assessment of the sales performance and provides better comparability between reporting periods. The Company's management does not, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. The Company presents such non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate the Company's operating results. The following table reconciles sales percentage increases (decreases) from the GAAP to the non-GAAP basis versus previous year: Three Months Ended April 30, 2007 ----------------------------------------------- Constant- GAAP Translation Exchange- Reported Effect Rate Basis ----------------------------------------------- Net Sales: - ---------- Worldwide 15% 1% 14% U.S. Retail 15% - 15% International Retail 15% 2% 13% Japan Retail (3)% (1)% (2)% Other Asia- Pacific 35% 3% 32% Europe 27% 12% 15% Comparable Store Sales: - ----------------------- Worldwide 9% 1% 8% U.S. Retail 12% - 12% International Retail 6% 2% 4% Japan Retail (8)% (1)% (7)% Other Asia- Pacific 27% 3% 24% Europe 23% 12% 11% 5 TIFFANY & CO. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited, in thousands, except per share amounts)
Three Months Ended April 30, ------------------------------- 2007 2006 ------------- --------------- Net sales $ 620,875 $ 539,241 Cost of sales 282,386 238,115 ------------- --------------- Gross profit 338,489 301,126 Selling, general and administrative expenses 257,035 226,879 ------------- --------------- Earnings from operations 81,454 74,247 Other (income) expenses, net 3,216 3,975 ------------- --------------- Earnings before income taxes 78,238 70,272 Provision for income taxes 28,579 27,130 ------------- --------------- Net earnings $ 49,659 $ 43,142 ============= =============== Net earnings per share: Basic $ 0.36 $ 0.30 ============= =============== Diluted $ 0.36 $ 0.30 ============= =============== Weighted-average number of common shares: Basic 136,488 141,941 Diluted 139,724 144,367
6 TIFFANY & CO. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in thousands)
April 30, January 31, April 30, 2007 2007 2006 --------------------- ----------------------- ------------------------ ASSETS - ------ Current assets: Cash and cash equivalents and short-term investments $ 127,269 $ 192,003 $ 226,716 Accounts receivable, net 162,047 168,973 156,124 Inventories, net 1,295,150 1,214,622 1,140,829 Deferred income taxes 71,697 73,455 73,501 Prepaid expenses and other current assets 74,048 57,591 54,180 ----------------- ----------------- ----------------- Total current assets 1,730,211 1,706,644 1,651,350 Property, plant and equipment, net 938,600 932,389 888,221 Other assets, net 229,835 206,477 212,280 ----------------- ----------------- ----------------- $ 2,898,646 $ 2,845,510 $ 2,751,851 ================= ================= ================= LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ Current liabilities: Short-term borrowings $ 115,811 $ 106,681 $ 47,726 Current portion of long-term debt 5,451 5,398 6,244 Accounts payable and accrued liabilities 177,888 215,967 210,215 Income taxes payable 36,479 63,114 38,040 Merchandise and other customer credits 62,332 61,511 55,614 ----------------- ----------------- ----------------- Total current liabilities 397,961 452,671 357,839 Long-term debt 401,716 406,383 428,450 Pension/postretirement benefit obligations 89,937 84,466 73,949 Other long-term liabilities 138,713 97,095 87,865 Stockholders' equity 1,870,319 1,804,895 1,803,748 ----------------- ----------------- ----------------- $ 2,898,646 $ 2,845,510 $ 2,751,851 ================= ================= =================
7 -----END PRIVACY-ENHANCED MESSAGE-----