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 April 29, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-1117
TOYS "R" US, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-5159250
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
461 From Road, Paramus, New Jersey 07652
(Address of principal executive offices) (Zip Code)
(201) 262-7800
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of May 22, 1995, 276,354,608 shares of common stock were outstanding.
<PAGE>
INDEX
PAGE
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Earnings 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion - Results of Operations
and Financial Condition 7
PART II - OTHER INFORMATION 8
SIGNATURES 9
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<TABLE>
Page 3
TOYS "R" US, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
<CAPTION>
April 29, April 30, January 28,
1995 1994 1995
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 248,828 $ 238,189 $ 369,833
Accounts and other receivables 100,945 92,912 115,914
Merchandise inventories 2,393,629 2,025,726 1,999,148
Prepaid expenses and other 63,629 57,472 45,818
Total current assets 2,807,031 2,414,299 2,530,713
Property, equipment and other assets 4,233,609 3,557,299 4,040,480
$ 7,040,640 $ 5,971,598 $ 6,571,193
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 902,168 $ 410,456 $ 122,661
Accounts payable 1,186,448 1,055,931 1,339,081
Accrued expenses and other 401,434 348,822 472,653
Income taxes payable 74,506 67,437 202,548
Total current liabilities 2,564,556 1,882,646 2,136,943
Deferred income taxes 242,085 221,906 219,927
Long-term debt 828,405 738,725 785,448
Stockholders' equity:
Common stock 29,795 29,794 29,795
Additional paid-in capital 516,383 449,325 521,295
Retained earnings 3,563,013 3,050,386 3,544,573
Foreign currency translation adjustments 20,964 (45,754) (25,121)
Treasury shares, at cost (724,561) (355,430) (641,667)
3,405,594 3,128,321 3,428,875
$ 7,040,640 $ 5,971,598 $ 6,571,193
<FN>
See notes to consolidated financial statements.
</TABLE>
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<TABLE>
Page 4
TOYS "R" US, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In thousands except per share information)
<CAPTION>
13 Weeks Ended
April 29, April 30,
1995 1994
<S> <C> <C>
Net sales $1,492,965 $1,461,933
Costs and expenses:
Cost of sales 1,017,300 1,001,203
Selling, advertising, general & administrative 385,946 350,232
Depreciation and amortization 44,512 36,445
Interest expense - net 15,938 14,402
1,463,696 1,402,282
Earnings before taxes on income 29,269 59,651
Taxes on income 10,829 22,071
Net earnings $ 18,440 $ 37,580
Earnings per share $.07 $.13
Common and common equivalent shares 280,860 292,741
<FN>
See notes to consolidated financial statements.
</TABLE>
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<TABLE>
Page 5
TOYS "R" US, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
<CAPTION>
13 Weeks Ended
April 29, April 30,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 18,440 $ 37,580
Adjustments to reconcile net earnings to net cash used by
operating activities:
Depreciation and amortization 44,512 36,445
Deferred income taxes 4,889 4,926
Changes in operating assets and liabilities:
Accounts and other receivables 14,969 5,622
Merchandise inventories (394,481) (248,157)
Prepaid expenses and other operating assets (16,898) (20,622)
Accounts payable, accrued expenses and taxes (352,813) (362,999)
Total adjustments (699,822) (584,785)
Net cash used by operating activities (681,382) (547,205)
Cash flows from investing activities:
Capital expenditures-net (95,893) (100,437)
Other assets (23,497) (5,869)
Net cash used by investing activities (119,390) (106,306)
Cash flows from financing activities:
Short-term borrowings, net 779,507 170,594
Long-term borrowings 7,387 1,218
Long-term debt repayments (1,404) (221)
Exercise of stock options 3,600 3,194
Share repurchase program (91,406) (71,002)
Net cash provided by financing activities 697,684 103,783
Effect of exchange rate changes on cash and cash
equivalents (17,917) (3,976)
Cash and cash equivalents:
Decrease during period (121,005) (553,704)
Beginning of period 369,833 791,893
End of period $ 248,828 $ 238,189
<FN>
Supplemental disclosures of cash flow information:
The Company considers all highly liquid investments purchased as part of its daily cash
management activities to be cash equivalents.
During the thirteen weeks ended April 29, 1995 and April 30, 1994, the Company made
income tax payments of $134,121 and $154,727 and interest payments (net of amounts
capitalized) of $22,171 and $18,896, respectively.
See notes to consolidated financial statements.
</TABLE>
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Page 6
TOYS "R" US, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Interim Reporting
The interim financial statements are unaudited and are subject to year-end
adjustments. However, in the opinion of management, all known adjustments
(which consist only of normal recurring accruals) have been made to present
fairly the consolidated operating results for the unaudited periods.
Because of the seasonal nature of the Company's business, results for
interim periods are not indicative of results to be expected for the fiscal
year.
2. Earnings Per Share
Earnings per share for the thirteen weeks ended April 29, 1995 and
April 30, 1994 are computed by dividing net earnings by the weighted
average number of common shares outstanding, after reduction for treasury
shares and assuming exercise of dilutive stock options computed by the
treasury stock method using the average market price during the period.
<PAGE>
Page 7
MANAGEMENT'S DISCUSSION - RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
Results of Operations
Sales increased by $31 million or 2.1% in the first quarter over the prior
year's comparable period due primarily to sales from new toy and children's
clothing stores, offset by the closing of 19 children's clothing stores since
the beginning of 1994. Comparable USA toy store sales decreased by 10% for the
quarter, and excluding consumables, video game products and hanging clothing,
have declined 3%. International toy stores also experienced a decline in
comparable sales due primarily to the continued poor retail environment in
Central Europe. Kids "R" Us had comparable store sales decreases due to the
weak apparel sales environment.
Cost of sales, as a percentage of sales, decreased from 68.5% in the first
quarter of 1994 to 68.1% in the first quarter of 1995 due to a more favorable
product mix.
Selling, advertising, general and administrative expenses as a percentage of
sales increased to 25.9% for the first quarter versus 24.0% for the prior year's
comparable period as a result of overall comparable store sales declines and new
store growth.
Net interest expense increased in the quarter compared to the prior year's
quarter, principally as a result of higher average short-term borrowings
due primarily to higher inventories and the share repurchase program.
The effective tax rate remained constant at 37% for the first quarter of 1995 as
compared to the first quarter of 1994.
Since January 28, 1995, foreign currency exchange rates have experienced
fluctuations, however, the impact on net earnings was not significant.
Financial Condition
Plans are underway for approximately 40 USA and 50 international toy stores,
and 10 Kids "R" Us children's clothing stores. Annual capital expenditures for
new and existing facilities are estimated to be approximately $575 million. Cash
requirements for operations, capital expenditures, lease commitments and the
share repurchase program will be met primarily through operating activities,
borrowings under the $1 billion revolving credit facility, issuance of
short-term commercial paper and bank borrowings for foreign subsidiaries.
<PAGE>
Page 8
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule.
(b) The Company was not required to file any reports on Form 8-K
during the 13 weeks ended April 29, 1995.
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Page 9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: June 5, 1995 Toys "R" Us, Inc.
(Registrant)
s/Louis Lipschitz
(Signature)
Louis Lipschitz
Senior Vice President - Finance and
Chief Financial Officer
<PAGE>
INDEX TO EXHIBITS
The following is a list of all exhibits filed as part of this document:
<TABLE>
<CAPTION>
Exhibit Page
No. No. Document
<S> <C> <C>
27 Financial Data Schedule
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Conslidated Balance Sheets and Consolidated Statements of Earnings as reported
in the Form 10-Q and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000051734
<NAME> TOYS "R" US, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> FEB-03-1996
<PERIOD-END> APR-29-1995
<CASH> 248,828
<SECURITIES> 0
<RECEIVABLES> 100,945
<ALLOWANCES> 0
<INVENTORY> 2,393,629
<CURRENT-ASSETS> 2,807,031
<PP&E> 4,643,679
<DEPRECIATION> 851,252
<TOTAL-ASSETS> 7,040,640
<CURRENT-LIABILITIES> 2,564,556
<BONDS> 828,405
<COMMON> 29,795
0
0
<OTHER-SE> 3,375,799
<TOTAL-LIABILITY-AND-EQUITY> 7,040,640
<SALES> 1,492,965
<TOTAL-REVENUES> 1,492,965
<CGS> 1,017,300
<TOTAL-COSTS> 385,946
<OTHER-EXPENSES> 44,512
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,938
<INCOME-PRETAX> 29,269
<INCOME-TAX> 10,829
<INCOME-CONTINUING> 18,440
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,440
<EPS-PRIMARY> 0.07
<EPS-DILUTED> 0.07
</TABLE>
