10Q-96-1--AS FILED ELECTRONICALLY WITH THE S.E.C. 1/11/96
FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 26, 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: 0-14394
TOWN & COUNTRY CORPORATION
(Exact name of Registrant as specified in its charter)
Massachusetts 04-2384321
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification
organization) Number)
25 Union Street, Chelsea, Massachusetts 02150
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 884-8500
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
On December 31, 1995, the Registrant had outstanding 21,213,468 shares of Class
A Common Stock, $.01 par value and 2,664,941 shares of Class B Common Stock,
$.01 par value. The Registrant also had 2,288,567 shares of Convertible
Preferred Stock, $1 par value, outstanding on December 31, 1995.
These shares are immediately convertible into 4,577,134 shares of Class A
Common Stock.
<PAGE>
TOWN & COUNTRY CORPORATION Form 10-Q
Page 2
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
November 26, February 26,
1995 1995
ASSETS (Unaudited)
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 2,967,707 $ 3,336,921
Restricted cash 39,513 1,889
Accounts receivable--
Less allowances for doubtful
accounts of $3,090,000 at
11/26/95 and $7,780,000 at
2/26/95 87,388,411 57,472,122
Inventories (Note 3) 87,518,141 80,349,412
Prepaid expenses and other
current assets 2,081,732 573,611
Total current assets $179,995,504 $141,733,955
PROPERTY, PLANT & EQUIPMENT, at cost $ 83,391,775 $ 82,254,863
Less - Accumulated depreciation 42,768,212 39,018,645
$ 40,623,563 $ 43,236,218
INVESTMENT IN AFFILIATES $ 15,385,482 $ 15,385,482
OTHER ASSETS $ 6,971,059 $ 6,267,801
$242,975,608 $206,623,456
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
TOWN & COUNTRY CORPORATION Form 10-Q Page 3
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS (Continued)
November 26, February 26,
1995 1995
LIABILITIES AND STOCKHOLDERS' EQUITY (Unaudited)
CURRENT LIABILITIES:
<S> <C> <C>
Notes payable to banks (Note 2) $ 34,425,165 $ 11,117,827
Current portion of long-term debt 572,462 1,235,477
Accounts payable 30,094,279 17,809,025
Accrued expenses 12,971,122 15,458,912
Accrued taxes 717,845 1,352,523
Total current liabilities $ 78,780,873 $ 46,973,764
LONG-TERM DEBT, less current portion
(Note 2) $ 93,638,339 $ 91,437,975
OTHER LONG-TERM LIABILITIES $ 1,373,517 $ 1,494,524
Total liabilities $173,792,729 $139,906,263
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST $ 5,196,400 $ 4,617,018
EXCHANGEABLE PREFERRED STOCK, $1.00
par value--$14.59 preference value-
Authorized--200,000 shares
Issued and outstanding--152,217 shares
(Note 5) $ 2,289,168 $ 2,265,522
STOCKHOLDERS' EQUITY (Note 5):
Preferred stock, $1.00 par value-
Authorized and unissued--800,000 and
2,266,745 shares, respectively $ -- $ --
Convertible Preferred Stock, $1.00 par
value, $6.50 preference value
Authorized--4,000,000 and
2,533,255, shares respectively
Issued and outstanding--2,220,562 and
2,381,038 shares, respectively 2,220,562 2,381,038
Class A Common Stock, $ .01 par value-
Authorized--40,000,000 shares
Issued and outstanding-- 21,213,468
and 20,784,768 shares, respectively 212,135 207,848
Class B Common Stock, $.01 par value-
Authorized--8,000,000 shares
Issued and outstanding--2,664,941 shares 26,649 26,649
Additional paid-in capital 74,009,635 73,145,286
Retained deficit (14,771,670) (15,926,168)
Total stockholders' equity $ 61,697,311 $ 59,834,653
$242,975,608 $206,623,456
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
TOWN & COUNTRY CORPORATION Form 10-Q
Page 4
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended For the Nine Months End
November 26, November 27, November 26, November 27,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
NET SALES $86,395,380 $96,719,682 $203,560,405 $222,088,070
COST OF SALES 58,990,465 67,887,824 139,614,070 153,900,409
Gross profit $27,404,915 $28,831,858 $ 63,946,335 $ 68,187,661
SELLING, GENERAL &
ADMINISTRATIVE
EXPENSES 17,336,053 25,399,922 51,885,785 68,275,433
Income (loss) from
operations $10,068,862 $ 3,431,936 $ 12,060,550 $ (87,772)
INTEREST EXPENSE, (3,257,106) (3,311,455) (9,306,077) (8,653,946)
net
GAIN ON LITTLE
SWITZERLAND, INC.
EXCHANGE (NOTE 5) -- 17,277,988 -- 17,277,988
INCOME FROM
AFFILIATES -- 193,049 -- 576,049
MINORITY INTEREST (306,465) (368,475) (641,116) (692,489)
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
TOWN & COUNTRY CORPORATION Form 10-Q
Page 5
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
(Unaudited)
For the Three Months Ended For the Nine Months Ended
November 26, November 27, November 26, November 27,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
INCOME BEFORE
INCOME TAXES $ 6,505,291 $17,223,043 $ 2,113,357 $ 8,419,830
PROVISION (BENEFIT) FOR
INCOME TAXES (131,002) 799,000 172,500 1,643,177
NET INCOME $ 6,636,293 $16,424,043 $ 1,940,857 $ 6,776,653
ACCRETION OF DISCOUNT
PREFERRED STOCKS 255,320 479,551 786,359 1,426,299
INCOME ATTRIBUTABLE
TO COMMON
STOCKHOLDERS $ 6,380,973 $15,944,492 $ 1,154,498 $ 5,350,354
INCOME PER COMMON
SHARE (Note 4): $ 0.27 $ 0.68 $ 0.05$ 0.23
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING
(Note 4): 23,834,596 23,432,449 23,728,355 23,429,811
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
TOWN & COUNTRY CORPORATION Form 10-Q
Page 6
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Nine Months Ended
November 26, November 27,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net Income $ 1,940,857 $ 6,776,653
Adjustments to reconcile net income
to net cash used in operating activities-
Depreciation and amortization 3,158,261 3,672,238
Loss (gain) on disposal of certain
assets (417,220) 4,275
Gain on Little Switzerland, Inc. exchange -- (17,277,988)
Undistributed earnings of affiliates,
net of minority interest 641,116 116,439
Interest paid with issuance of debt 4,200,569 7,647,666
Change in assets and liabilities--
Decrease (increase) in accounts
receivable (29,916,289) (33,950,574)
Decrease (increase) in inventory (7,168,729) (6,189,594)
Decrease (increase) in prepaid
expenses and other current assets (1,508,121) 289,853
Decrease (increase) in other assets (945,989) 5,064,340
Increase (decrease) in accounts
payable 12,285,254 13,993,972
Increase (decrease) in accrued
expenses (2,487,790) (5,854,186)
Increase (decrease) in accrued taxes (634,678) 597,406
Increase (decrease) in other
liabilities (121,007) (169,858)
Net cash used in operating
activities $(20,973,766) $(25,279,358)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures $ (1,964,608) $ (2,411,243)
Proceeds from sale of certain assets 950,772 5,318
Net cash used in investing
activities $ (1,013,836) $ (2,405,925)
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
TOWN & COUNTRY CORPORATION Form 10-Q
Page 7
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
For the Nine Months Ended
November 26, November 27,
1995 1994
CASH FLOWS FROM FINANCING ACTIVITIES:
<S> <C> <C>
Payments on revolving credit facilitie $(170,254,833) $(180,579,784)
Proceeds from borrowings under
revolving credit facilities 193,562,171 209,280,999
Payments on long-term debt (1,535,039) (4,549,851)
Proceeds from the issuance of common sto 12,072 14,637
Increase in restricted cash (37,624) (722,900)
Change in notes payable -- 2,021,926
Payment of dividends (128,359) --
Net cash provided by
financing activities $ 21,618,388 $ 25,465,027
NET INCREASE(DECREASE)IN CASH
AND CASH EQUIVALENTS $ (369,214) $ (2,220,256)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 3,336,921 3,273,876
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 2,967,707 $ 1,053,620
SUPPLEMENTAL CASH FLOW DATA:
Cash paid during the period for:
Interest $ 8,033,387 $ 3,089,777
Income taxes 810,265 1,102,135
Supplemental Disclosure of Noncash Investing and Financing Activities (Note 6)
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
PART I - FINANCIAL INFORMATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 26, 1995
(1) Significant Accounting Policies
The unaudited consolidated financial statements presented herein have been
prepared by the Company and contain all adjustments (consisting of only normal
recurring adjustments) necessary to present fairly and on a basis consistent
with the consolidated financial statements for the year ended February 26, 1995,
the Company's financial position as of November 26, 1995, and the results of its
operations for the three- and nine-month periods ended November 26, 1995, and
November 27, 1994, and cash flows for the nine-month periods ended November 26,
1995, and November 27, 1994.
The significant accounting policies followed by the Company are set forth in
Note (1) of the Company's consolidated financial statements for the year ended
February 26, 1995, which have been included in the Annual Report on Form 10-K,
Commission File Number 0-14394, for the fiscal year ended February 26, 1995. The
Company has made no change in these policies during the nine months ended
November 26, 1995.
The consolidated financial statements include the accounts of subsidiary
companies more than fifty percent owned.
The results of operations for the nine months ended November 26, 1995, are not
necessarily indicative of the results to be expected for the year due to the
seasonal nature of the Company's operations.
(2) Loan Arrangements
During the first quarter of fiscal 1996, the Company issued approximately $4.2
million in new 13% Senior Subordinated Notes, due May 31, 1998, as
payment-in-kind of the semiannual interest due May 15, 1995. On November 15,
1995, the Company made a cash interest payment of approximately $4.5 million.
As of November 26, 1995, approximately $34.4 million was outstanding under the
Company's revolving credit agreement with Foothill Capital Corporation
("Foothill"). During the quarter, the Company reached an agreement with Foothill
which provides for a seasonal increase to the revolving credit agreement. During
the period from November 1 through December 31, the loan limit is $38 million.
As of November 26, 1995, approximately 68,000 ounces of gold valued at
approximately $25.9 million were on consignment under the Company's domestic
gold consignment facilities.
<PAGE>
These facilities had a maximum availability of approximately 70,000 ounces as of
November 26, 1995. The Company's existing gold agreements with a group of gold
suppliers to supply secured gold consignment availability are terminable upon
thirty days' written notice. During the third quarter of fiscal 1996, the
Company and the gold suppliers reached agreements providing that the gold
suppliers could not exercise their termination rights through February 28, 1996,
unless the Company became in default under the amended gold agreements. After
February 28, 1996, the rights of the gold suppliers will revert back to the
status which existed prior to this amendment. In consideration for this
assurance, the Company agreed to various modifications in the gold agreements.
These modifications include (i) reducing the aggregate amount of gold which may
be on consignment to approximately 67,000 ounces by February 14, 1996, (ii)
making modifications and additions to the existing financial covenants (also
agreed to by Foothill) in which most existing covenants were made more
restrictive but interest coverage was made less restrictive for the remainder of
fiscal 1996 , (iii) adding performance based limitations on the compensation
which C. William Carey may receive during fiscal 1996, (iv) requiring that a
plan for the disposition of certain assets be created, such plan to be
implemented if certain performance based goals are not achieved and (v)
requiring that the Company engage an investment banker to evaluate the Company
and to assist the Company in the development of a strategy for replacing certain
of the current gold suppliers.
A foreign subsidiary of the Company has an agreement with a gold supplier to
provide secured gold consignment availability of up to approximately 11,000 troy
ounces. There were approximately 4,000 ounces on consignment at November 26,
1995, valued at approximately $1.5 million.
On April 3, 1995, the Company repaid approximately $181,000 of its obligation
under the New York City Industrial Revenue Development Agency Industrial Revenue
Bonds ("IRB"). On April 3, 1995, the remaining obligation, approximately
$367,000, was purchased by Foothill. The interest rate for the outstanding bonds
has been modified to be the same as that on the Company's revolving line of
credit. The debt is secured by the Company's New York real estate and fixtures
attached thereto. At November 26, 1995, the Company's obligation on these notes
was approximately $333,000 and is expected to be repaid during the Company's
fourth quarter.
(3) Inventories
Inventories consisted of the following at November 26, 1995, and February 26,
1995:
November 26, February 26,
1995 1995
Raw Materials $19,931,765 $16,932,724
Work-in-Process 9,659,789 8,266,255
Finished Goods 57,926,587 55,150,433
$87,518,141 $80,349,412
<PAGE>
(4) Income Per Common Share
Income per common share is computed by adjusting the Company's net income for
the accretion of discount and dividends on preferred stocks and dividing by the
weighted average number of common and common equivalent shares, where dilutive,
outstanding during each period.
(5) Preferred Stock
On November 23, 1994, holders of approximately 94% of the Company's Exchangeable
Preferred Stock exchanged their shares for shares of Little Switzerland, Inc.
Common Stock held by the Company on a share-for-share basis. In addition, the
Company issued to each participant one share of new Convertible Preferred Stock
with each share of Little Switzerland, Inc. Common Stock. In November, 1995, the
Company made a dividend payment of approximately $67,000 to holders of the
Exchangeable Preferred Stock as of November 15, 1995.
Each share of Convertible Preferred Stock is initially convertible, at the
option of the holder, into two shares of Class A Common Stock, subject to
adjustment in certain circumstances. During fiscal 1996, approximately 197,000
shares of Convertible Preferred Stock have been converted. The
Convertible Preferred Stock has a liquidation value of $6.50 per share and
accrues cumulative dividends at the rate of 6% of the liquidation value per
annum. Dividends are payable in cash or in additional shares of Convertible
Preferred Stock as defined by the agreement. During fiscal 1996, dividends of
approximately $237,000 were paid with the issuance of approximately 36,000 new
shares of Convertible Preferred Stock. At November 26, 1995, cumulative unpaid
dividends amounted to approximately $657,000.
(6) Supplemental Disclosure of Noncash Investing and Financing Activity
On May 15, 1995 and 1994, the Company issued approximately $4.2 million and $3.7
million, respectively, in new 13% Senior Subordinated Notes due May 31, 1998, as
payment-in-kind of the semiannual interest installments. Approximately $2.5
million and $2.2 million of these amounts were classified as accrued expenses in
the February 26, 1995, and February 27, 1994, Consolidated Balance Sheets,
respectively. On November 15, 1994, the Company issued approximately $3.9
million in new 13% Senior Subordinated Notes due May 31, 1998, as
payment-in-kind of the semi-annual interest installment.
During September 1994, the Company had fixed asset additions of approximately
$700,000 funded by increases in capital lease obligations.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations for the Nine Months Ended November 26, 1995 Compared to
the Nine Months Ended November 27, 1994
Net sales for the nine months ended November 26, 1995, decreased $18.5 million
or 8.3% from $222.1 million in fiscal 1995 to $203.6 million in fiscal 1996.
Current year sales of fine jewelry have decreased approximately $15.2 million or
9.8% over the corresponding period in fiscal 1995. The Company believes that
sales have been affected by a general softening of demand for colored-stone
products. The Company believes that this is due, to some extent, to the fact
that diamond product has become more price competitive with colored-stone
product. Also contributing to the decrease in fine jewelry sales has been the
continuing efforts of management to manage the credit extended to certain
customers and to eliminate low margin contributors from the sales mix. Sales of
licensed sports products have also decreased.
Gross profit for the nine months ended November 26, 1995, decreased
approximately $4.2 million from $68.2 million in fiscal 1995 to $63.9 million in
fiscal 1996. Gross profit margin increased 0.7% from 30.7% in fiscal 1995 to
31.4% in fiscal 1996. The decrease in gross profit results from the decrease in
sales of high margin licensed sports products. Margin has been positively
affected by operational improvements and lower inventory reserve requirements
for fine jewelry. These benefits have, to a great extent, been offset by lower
margins in licensed sports products.
Selling, general, and administrative expenses for the current period decreased
approximately $16.4 million or 24.0% from $68.3 million in fiscal 1995 to $51.9
in fiscal 1996. As a percentage of net sales, selling, general, and
administrative expenses were approximately 5.2% less in the current year than
for the nine months ended November 27, 1994. Decreases primarily relate to lower
costs associated with the Company's consumer products business of licensed
sports and other specialty products. Management has refocused the Company's
distribution into this market segment by selling to organizations which are in
the business of marketing such products rather than by selling directly to the
retail consumer.
On November 23, 1994, holders of approximately 94% of the Company's Exchangeable
Preferred Stock exchanged on a share-for-share basis their shares for shares of
Little Switzerland, Inc. Common Stock held by the Company. Such an exchange was
provided for by the terms of the Exchangeable Preferred Stock. In addition, the
Company issued to each participant one share of new Convertible Preferred Stock
with each share of Little Switzerland, Inc. Common Stock. Since the carrying
value of the Company's investment in Little Switzerland, Inc. was substantially
less than the recorded value of the Exchangeable Preferred Stock, the
transaction resulted in a nonrecurring, noncash gain of approximately $17.3
million, net of the estimated fair value, of the Convertible Preferred Stock
issued.
Net interest expense for the nine months ended November 26, 1995, increased
approximately $0.7 million relative to the corresponding period in fiscal 1995.
<PAGE>
This increase is primarily the result of an increase in average borrowings from
approximately $107 million in fiscal 1995 to approximately $116 million in
fiscal 1996 and an increase in the weighted average interest rate of
approximately 25 basis points from approximately 11% for the nine months ended
November 27, 1994.
The Company recorded a tax provision of approximately $0.2 million for the nine
months ended November 26, 1995. The tax provision was primarily due to the
Company's requirements to provide for foreign income taxes.
Liquidity and Working Capital
Cash used in operating activities for the nine months ended November 26, 1995,
was approximately $21.0 million, compared with a use of $25.3 million for the
corresponding period of fiscal 1995 an improvement of approximately $4.3
million. Operating results improved by approximately $12.0
million, in fiscal 1996. The Company, however, was required to pay, in cash,
$4.5 million of interest due on the Senior Subordinate Notes which had
previously been paid with additional notes. Also, in the first nine months of
fiscal 1995, the Company benefited from approximately $5.0 million in gross
proceeds related to the Zale bankruptcy claim which was not reflected in
operations; while in the same period in fiscal 1996, gross proceeds were
approximately $1.4 million and were included in operating results.
Cash used in investing activities for the nine months ended November 26, 1995
was $1.0 million versus $2.4 million for the corresponding period in fiscal
1995. The improvement is due to lower capital expenditures in the current fiscal
year and to proceeds from the sale of a facility.
Cash provided by financing activities was approximately $21.6 million for the
period ended November 26, 1995, compared with $25.5 million for the period ended
November 27, 1994. Financing cash was primarily used to fund operations during
both periods. Improvements in operating performance during fiscal 1996 have
resulted in lower requirements than during the corresponding period in fiscal
1995.
The Company is required to escrow, for the benefit of the holders of the Senior
Secured Notes, cash payments resulting from share redemptions and dividends
related to its investment in Solomon Brothers Limited and net proceeds with
respect to the Zale bankruptcy claim. During the current
fiscal year, the Company has redeemed approximately $0.7 million of Senior
Secured Notes, versus approximately $3.4 million in fiscal 1995, with proceeds
from the Zale bankruptcy claim.
During the first quarter of fiscal 1996, the Company issued approximately $4.2
million in new 13% Senior Subordinated Notes, due May 31, 1998, as
payment-in-kind of the semiannual interest due May 15, 1995. On November 15,
1995, the Company made a $4.5 million cash interest payment of the semiannual
interest due on the 13% Senior Subordinated Notes.
The Company's net cash position decreased from approximately $3.3 million at
February 26, 1995, to approximately $3.0 million at November 26, 1995.
<PAGE>
The Company had approximately 68,000 ounces of gold on consignment under its
domestic gold consignment agreements as of November 26, 1995. These agreements
had a maximum availability of approximately 70,000 ounces as of November 26,
1995. The Company's existing gold agreements with a group of gold suppliers to
supply secured gold consignment availability are terminable upon thirty days'
written notice. During the third quarter of fiscal 1996, the Company and the
gold suppliers reached agreements providing that the gold suppliers could not
exercise their termination rights through February 28, 1996, unless the Company
became in default under the amended gold agreements. After February 28, 1996,
the rights of the gold suppliers will revert back to the status which existed
prior to this amendment. In consideration for this assurance, the Company agreed
to various modifications in the gold agreements. These modifications include (i)
reducing the aggregate amount of gold which may be on consignment to
approximately 67,000 ounces by February 14, 1996, (ii) making modifications and
additions to the existing financial covenants (also agreed to by Foothill) in
which most existing covenants were made more restrictive but interest coverage
was made less restrictive for the remainder of fiscal 1996, (iii) adding
performance based limitations on the compensation which C. William Carey may
receive during fiscal 1996, (iv) requiring that a plan for the disposition of
certain assets be created, such plan to be implemented if certain performance
based goals are not achieved and (v) requiring that the Company engage an
investment banker to evaluate the Company and to assist the Company in the
development of a strategy for replacing certain of the current gold suppliers.
Based on the accounts receivable and inventory balances at November 26, 1995,
the Company had total availability of $3.6 million under its revolving credit
facility. The outstanding loan balance on this facility at November 26, 1995,
was $34.4 million. During the quarter, the Company reached an agreement with
Foothill which provides for a seasonal increase to the revolving credit
agreement. During the period from November 1 through December 31, the loan limit
is $38 million.
The Company believes that it can meet its future working capital needs through
cash flow from operations and availability from its secured borrowing facility
and gold consignment facilities.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10 Material Contracts
10.1 Fourth Amendment to the Amended and Restated
Consignment Agreement by and between Town & Country Corporation,
L. G. Balfour Company, Inc., Gold Lance, Inc., and Town & Country
Fine Jewelry Group, Inc. and Rhode Island Hospital Tru
Amendments which are substantially similar have been entered into
with Fleet Precious Metals, Inc., ABN Amro Bank, N.V., and Republic
National Bank of New York. 10.2 Amendment Number Five to Loan
Agreement by and between Town & Country Corporation, L.G. Balfour
Company, Inc., Gold Lance, Inc., and Town & Country Fine Jewelry
Group, Inc. and Foothill Capital Corporation dated November 1, 1995.
11 Earnings Per Share Computations
27 Financial Data Schedule
(b) Reports on Form 8-K
There were no Form 8-K filings during the quarter ended November 26, 1995.
<PAGE>
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.
TOWN & COUNTRY CORPORATION
(Registrant)
Date: January 10, 1996 /s/ Francis X. Correra
----------------------------
Francis X. Correra
Senior Vice President and
Chief Financial Officer
<PAGE>
FOURTH AMENDMENT TO
AMENDED AND RESTATED CONSIGNMENT AGREEMENT
This FOURTH AMENDMENT TO AMENDED AND RESTATED CONSIGNMENT AGREEMENT ("Fourth
Amendment") is made and entered into as of this 27th day of August, 1995 (the
"Closing Date"), by and between RHODE ISLAND HOSPITAL TRUST NATIONAL BANK, a
national banking association with its principal office at One Hospital Trust
Plaza, Providence, Rhode Island 02903 ("Consignor") and TOWN & COUNTRY
CORPORATION, a Massachusetts corporation ("T&C"), TOWN & COUNTRY FINE JEWELRY
GROUP, INC., a Massachusetts corporation ("Group"), L.G. BALFOUR COMPANY, INC.,
a Delaware corporation ("Balfour"), and GOLD LANCE, INC., a Massachusetts
corporation ("GLI") (T&C, Group, Balfour and GLI are herein referred to, jointly
and severally, as "Buyer").
BACKGROUND
A. Buyer and Consignor are parties to that certain Amended and Restated
Consignment Agreement dated as of May 14, 1993 (as it has been amended from time
to time, the "Existing Consignment Agreement") and certain related security and
other documents (collectively, the "Consignment Documents") pursuant to which
Consignor has provided Buyer with a gold consignment facility.
B. Buyer and Consignor desire to amend and modify the terms of the Existing
Consignment Agreement in certain respects.
C. In order to document these amendments and modifications, Consignor and Buyer
have agreed to enter into this Fourth Amendment.
D. All capitalized terms used herein but not defined herein shall have the
meanings ascribed to them, respectively, in the Existing Consignment Agreement.
NOW, THEREFORE, incorporating the foregoing Background by reference, for good
and valuable consideration, the receipt and legal sufficiency of which is hereby
acknowledged, Consignor and Buyer agree as follows:
AMENDMENTS TO EXISTING AGREEMENT 1. The definition of "Consignment Limit"
contained in Section 1 of the Existing Consignment Agreement is hereby deleted
in its entirety and a new definition is hereby added as follows:
"Consignment Limit" shall mean the least of: (a) (i) as of August 31, 1995 and
thereafter, twenty-two thousand three hundred seventy three (22,373) troy ounces
of fine gold; (ii) as of November 15, 1995 and thereafter, twenty-one thousand
nine hundred and two (21,902) troy ounces of fine gold; (iii) as of December 31,
1995 and thereafter, twenty-one thousand four hundred thirty-two (21,432) troy
ounces of fine gold; and (iv) as of February 14, 1996 and thereafter, and at all
times thereafter, twenty-one thousand one hundred nineteen (21,119) troy ounces
of find gold;
<PAGE>
(b) subject to the provisions of Section 5 hereof, Consigned Precious Metal with
a Fair Market Value (or unpaid Purchase Price in the case of Consigned Precious
Metal for which the Purchase Price has been agreed but as to which payment has
not been received by Consignor) equal to: (i) as of August 31, 1995 and
thereafter, $9,508,525, (ii) as of November 15, 1995 and thereafter, $9,308,350;
(iii) as of December 31, 1995 and thereafter, $9,108,600; and (iv) as of
February 14, 1996, and thereafter, $8,975,575 or;
(c) eighty-three percent (83%) of Buyer's inventory of Precious Metal
(including, for such purpose, Consigned Precious Metal and, for the purposes of
paragraph 1 of Section 2 hereof, the Precious Metal requested by Buyer but
excluding (i) Precious Metal owned, leased or consigned by any
other party (Precious Metal purchased by Buyer pursuant to term receivable or
other financing arrangements which remain unpaid shall be included as Consigned
Precious Metal), (ii) the amount of Precious Metal necessary to satisfy the
aggregate Precious Metal equity requirements of other consignors, (iii) Precious
Metal included in Balfour Purchased Inventory or the Zale Consigned Inventory
(as each such term is defined in the Intercreditor Agreement), and (iv) the
amount of Buyer's Precious Metal, if any, outstanding in the possession of
foreign Subsidiaries or foreign sales representatives in excess of the amount
permitted by Section 12(h) hereof.
2. A new Section 11(s) is hereby added to the Existing Consignment Agreement as
follows: (s) Permit consultants retained by Consignor to inspect or conduct
field examinations, at Buyer's sole expense (including, without limitation, the
fees and expenses of such consultants), at any time and from time to time during
normal business hours and without notice, the Buyer's inventory of Precious
Metal and Buyer's books and records and to make abstracts or reproductions of
such books and records. The provisions of this Paragraph 11(s) shall be in
addition to and not in limitation of the provisions of Paragraph 11(g) hereof.
3. Section 12(h) of the Existing Consignment Agreement is hereby amended in its
entirety to read as follows: (h) Consign Precious Metal to foreign Subsidiaries
or deliver Precious Metal to foreign sales representatives;
<PAGE>
4. Section 12(j) of the Existing Consignment Agreement is hereby amended by
replacing the phrase "fifteen thousand (15,000)" with the phrase "seven thousand
five hundred (7,500)." The remaining provisions of Section 12(j) of the Existing
Consignment Agreement shall continue in full force an effect.
5. Section 12(k) of the Existing Consignment Agreement is hereby amended by
replacing the phrase "twenty thousand (20,000)" with the phrase "fifteen
thousand (15,000)." The remaining provisions of Section 12(k) of the Existing
Consignment Agreement shall continue in full force and effect.
6. Section 12(m) of the Existing Consignment Agreement is hereby amended by
replacing the phrase "thirteen thousand (13,000)" with the phrase "twelve
thousand (12,000)." The remaining provisions of Section 12(m) of the Existing
Consignment Agreement shall continue in full force and effect.
7. Section 12(n) of the Existing Consignment Agreement is hereby amended in its
entirety to read as follows: (n) Permit at any time its Consolidated Tangible
Net Worth to be less than: (i) from August 27, 1995 through and including
November 25, 1995, $49,000,000; (ii) from November 26, 1995 through and
including February 24, 1996, $56,000,000; or (iii) at all times from and after
February 25, 1996, $55,000,000;
8. Section 12(o) of the Existing Consignment Agreement is hereby amended in its
entirety to read as follows: (o) Permit at any time the ratio of (i) its
Consolidated Total Senior Liabilities to its Consolidated Tangible Capital Base
to exceed 0.75:1.00; or (ii) its Consolidated Adjusted Total Senior Liabilities
to its Consolidated Tangible Capital Base to exceed 1.00:1.00;
9. Section 12(p) of the Existing Consignment Agreement is hereby amended in its
entirety to read as follows: (p) Permit at any time its Working Capital to be
less than $85,000,000;
10. Section 12(q) of the Existing Consignment Agreement is hereby amended in its
entirety to read as follows: (q) Permit at any time the ratio of Buyer's
Consolidated Current Assets divided by its Consolidated Current Liabilities to
be less than 2.20:1.00;
11. Section 12(r) of the Existing Consignment Agreement is hereby amended in its
entirety to read as follows: (r) Permit at any time Buyer's Consolidated
Interest Coverage Ratio to be less than 1.50:1.00 as of August 27, 1995;
1.15:1.00 as of November 26, 1995; or 1.25:1.00 as of February 26, 1996 (for
purposes hereof, the Consolidated Interest Coverage Ratio will be calculated
based upon the most recently completed twelve (12) month period);
<PAGE>
12. Section 12(s) of the Existing Consignment Agreement is hereby amended by
replacing the phrase "Six Million Dollars ($6,000,000)" with the phrase "Three
Million Thirty Four Thousand Dollars ($3,034,000)." The remaining provisions of
Section 12(s) shall remain in full force and effect.
13. Section 12(w) of the Existing Consignment Agreement is hereby amended in its
entirety to read as follows: (w) Permit at any time the aggregate outstanding
balance of all consigned Precious Metal from the Metal Consignors to exceed (i)
prior to September 29, 1995, 73,347 fine troy ounces; (ii) from September 29,
1995 through and including November 14, 1995, 71,347 fine troy ounces; (iii)
from November 15, 1995 through and including December 30, 1995, 69,847 fine troy
ounces; (iv) from December 31, 1995 through and including February 13, 1996,
68,347 fine troy ounces; (v) after February 13, 1996, 67,347 fine troy ounces;
14. A new Section 12(y) is hereby added to the Existing Consignment Agreement as
follows: (y) Permit Group's cumulative gross profit to be less than $13,700,000
as of August 27, 1995; $27,400,000 as of November 26, 1995, or $34,200,000 as of
February 25, 1996;
15. A new Section 12(z) is hereby added to the Existing Consignment Agreement as
follows: (z) Permit Group's cumulative operating income to be less than
$3,600,000 as of the fiscal quarter ending August 27, 1995; $11,500,000 as of
the fiscal quarter ending November 26, 1995; or $13,000,000 as of the fiscal
quarter ending February 25, 1996;
16. A new Section 12(aa) is hereby added to the Existing Consignment Agreement
as follows: (aa) Incur a cumulative operating loss for Balfour in an amount
greater than $885,000 as of the fiscal quarter ending August 27, 1995; or
$393,000 as of the fiscal quarter ending November 26, 1995; or permit Balfour's
cumulative operating income to be less than $32,000 as of the fiscal quarter
ending February 25, 1996;
17. A new Section 12(bb) is hereby added to the Existing Consignment Agreement
as follows: (bb) Permit its consolidated cumulative operating income to be less
than $800,000 as of the fiscal quarter ending August 27, 1995; $11,600,000 as of
the fiscal quarter ending November 26, 1995; or $13,800,000 as of the fiscal
quarter ending February 25, 1996;
<PAGE>
18. A new Section 12(cc) is hereby added to the Existing Consignment Agreement
as follows: (cc) Incur a consolidated cumulative loss before payment of taxes
and Minority Interest in an amount greater than $5,300,000 as of the fiscal
quarter ending August 27, 1995, or permit its consolidated cumulative income
before payment of taxes and Minority Interest to be less than $2,200,000 as of
the fiscal quarter ending November 26, 1995 or $1,400,000 as of February 25,
1996;
19. A new Section 12(dd) is hereby added to the Existing Consignment Agreement
as follows: (dd) Permit the total number of troy ounces of Precious Metal (less
Equity Precious Metal) at, or in transit to or from, fabricators, refiners,
sales representatives, agents or foreign Subsidiaries to be greater than or
equal to ten percent (10%) of total Consigned Precious Metal from the Metal
Consignors;
20. A new Section 12(ff) is hereby added to the Existing Consignment Agreement
as follows:
(ff) Permit aggregate salary, withdrawals, bonuses or other compensation
("Compensation") paid to C. William Carey ("Carey") during the fiscal year
ending February 26, 1996 to exceed the following amount:
(i) in the event that Buyer's consolidated operating income for fiscal year-end
1996 is equal to or greater than ninety-five percent (95%) of that projected in
the Buyer's fiscal plan incorporated by reference in this Agreement as Exhibit
"N" (the "FYE 96 Plan"), the amount as provided under Carey's existing contract
with Buyer;
(ii) in the event that Buyer's consolidated operating income for fiscal year-end
1996 is greater than eighty-five percent (85%) but less than ninety-five percent
(95%) of that projected in the FYE 96 Plan, an amount not to exceed nine-hundred
thirty thousand dollars ($930,000);
(iii) in the event that Buyer's consolidated operating income for fiscal
year-end 1996 is equal to or less than eighty-five percent (85%) of that
projected in the FYE 96 Plan, an amount not to exceed eight- hundred thirty
three thousand dollars ($833,000).
It is hereby agreed that in furtherance of the foregoing, until such time as the
financial statements of Buyer required to be delivered to Consignor pursuant to
this Agreement for the period ending December 26, 1995 (the "December '95
Statements"), are available, Buyer may pay Carey Compensation up to $833,000 in
accordance with his contract. Upon receipt of the December '95 Statements, Buyer
shall calculate (and pay to Carey in accordance with his contract, if
appropriate) the balance of the Compensation permitted to be paid in accordance
with the first sentence of this subsection 12(f)(f) by comparing the amount of
its consolidated operating income year to date as reflected on the December '95
Statements to that projected for the same period in the FYE 96 Plan. Buyer shall
furnish Consignor with a certificate calculating the total amount of
Compensation payable to Carey at the time it furnishes to Consignor the December
'95 Statements.
<PAGE>
21. A new Exhibit "N" is hereby added to and incorporated by reference in the
Existing Consignment Agreement in the form of the attached Schedule 1.
ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS
22. Within one week of submission to the Buyer from Consignor of an invoice in
reasonable detail therefor, Buyer covenants and agrees to deliver to Consignor a
check made payable to Consignor in an amount equal to the reasonable attorneys'
fees and costs incurred by Consignor in connection with the negotiation and
preparation of this Fourth Amendment.
23. On or before October 31, 1995, Buyer shall deliver to Consignor a detailed
plan for the orderly disposition of Balfour (the "Disposition Plan"); which
Disposition Plan shall be available for implementation in the event: (i) the
financial performance of Buyer, or Balfour fails to meet the financial
performance set forth in Buyer's Plan for Fiscal Year 1996 which Buyer submitted
to Consignor on August 3, 1995, or (ii) an Event of Default occurs under this
Agreement.
24. Within forty-five (45) days after the Closing Date, Buyer shall engage the
services of an investment banker (the "Investment Banker") acceptable to
Consignor for the purpose of evaluating the Buyer's operations and financial
performance. Buyer shall cause the Investment Banker to furnish Consignor on or
before November 15, 1995 with a proposed plan outlining (i) a recommended course
of action for the repayment in full on or before February 28, 1996 of all of
Buyer's obligations to Consignor under the Existing Consignment Agreement and
the other Consignment Documents; and (ii) a recommended course of action for
repayment in full of the Buyer's obligations to Consignor through the sale of
all or part of Buyer's assets in the event the Buyer's financial performance
causes an Event of Default related to the failure to meet financial covenants as
set forth in Section 12 of the Consignment Agreement.
25. For purposes of clarification, Buyer and Consignor hereby confirm their
agreement that any expenses or fees paid by Buyer in connection with this
amendment transaction, including fees paid to consultants or investment bankers,
the legal fees paid to Consignor's counsel, the amendment fee payable herewith
or otherwise shall be excluded from the computation made by Buyer in determining
compliance with the financial ratios under the Consignment Agreement, as amended
hereby.
<PAGE>
26. To induce Consignor to enter into this Fourth Amendment, Buyer
hereby (a) represents and warrants to Consignor that on and as of the date
hereof, Buyer is not in material default of any covenant set forth in the
Existing Consignment Agreement, and (b) except as disclosed in writing t
Consignor contemporaneously with Buyer's execution hereof, restates as of the
date hereof and incorporates herein by reference all representations and
warranties set forth in the Existing Consignment Agreement.
27. Consignor covenants and agrees that, so long as Buyer remains in compliance
with all of the terms and conditions of this Fourth Amendment, the Existing
Consignment Agreement and each of the other Consignment Documents, Consignor
will not terminate the Existing Consignment Agreement b sending to Buyer a
Termination Notice pursuant to Section 13(a) of the Existing Consignment
Agreement until February 28, 1996; provided, however, that nothing in this
Section 26 shall be interpreted to limit the right of Consignor to declare an
Event of Default and/or terminate the Existing Consignment Agreement by sending
a Termination Notice to Buyer upon and following the occurrence of an Event of
Default or an event which, but for the passage of time or the giving of notice
or both, would constitute an Event of Default.
CONDITIONS PRECEDENT
28. Consignor's obligations hereunder are subject to and conditioned upon each
of the following: (i) the payment by Buyer to Consignor of a non-refundable
amendment fee in the amount of $97,750.00; (ii) the execution and delivery by
Buyer of this Fourth Amendment and such other documents as Consignor may
reasonably require; and (iii) the delivery to Consignor of executed
documentation by and between Buyer and the other Metal Consignors providing for
amendments to their respective Consignment Agreements which are consistent with
the terms of this Fourth Amendment.
MISCELLANEOUS
29. Except as expressly amended herein, the Existing Consignment Agreement shall
remain in full force and effect and Buyer and Consignor hereby ratify and
confirm their rights, duties, obligations, representations and warranties under
the Existing Consignment Agreement.
<PAGE>
30. Buyer hereby releases, waives and forever discharges Consignor of, from and
with respect to any and all manner of action and actions, cause and causes of
actions, suits, disputes, claims, counterclaims and/or liabilities, cross
claims, defenses, and/or any claims for avoidance or other remedies available to
a debtor, its estate and/or any trustee or representatives thereof, pursuant to
the United States Bankruptcy Code (11 U.S.C. 101-1330) or otherwise, whether now
known or unknown, suspected or unsuspected, past or present, asserted or
unasserted, contingent or liquidated, whether or not well founded in fact or
law, whether in contract, in tort or otherwise, at law or in equity, which Buyer
had or now has, claims to have had, now claims to have or hereafter can, shall
or may claim to have based upon, relating to or arising out of any and all
transactions, relationships or dealings with or loans or consignments made to
Buyer at or at any time prior to the execution of this Fourth Amendment.
31. Buyer agrees to take such further action to execute and deliver to Consignor
such additional agreements, instruments and documents as may reasonably be
required to carry out the purposes of this Fourth Amendment.
32. This Fourth Amendment shall be governed and construed in accordance with the
substantive laws, and not the law of conflicts, of the State of Rhode Island.
33. This Fourth Amendment contains the entire agreement among the parties hereto
with respect to the subject matter hereof and may not be modified or changed in
any way except in writing signed by all parties.
34. This Fourth Amendment may be executed in any number of counterparts, all of
which taken together shall constitute one and the same Fourth Amendment.
<PAGE>
IN WITNESS WHEREOF, Consignor and Buyer have caused this Fourth Amendment to be
duly executed by their duly authorized officers, all as of the day and year
first above written.
RHODE ISLAND HOSPITAL TRUST NATIONAL BANK
By: /s/ Thomas F. Lyons
Thomas F. Lyons
First Vice President
TOWN & COUNTRY CORPORATION
By: /s/ Francis X. Correra
Name: Francis X. Correra
Title: Senior Vice President
and Chief Financial Officer
TOWN & COUNTRY FINE JEWELRY GROUP, INC.
By: /s/ Francis X. Correra
Name: Francis X. Correra
Title: Vice President and Treasurer
L.G. BALFOUR COMPANY, INC.
By: /s/ Francis X. Correra
Name: Francis X. Correra
Title: Executive Vice President and Treasurer
GOLD LANCE, INC.
By: /s/ Francis X. Correra
Name: Francis X. Correra
Title: Treasurer
<PAGE>
AMENDMENT NUMBER FIVE TO LOAN AGREEMENT
(TOWN & COUNTRY CORPORATION AND SUBSIDIARIES)
THIS AMENDMENT NUMBER FIVE TO LOAN AGREEMENT, (this "Amendment"), dated as of
November 1, 1995, is entered into by and among Town & Country Corporation, a
Massachusetts corporation, Gold Lance, Inc., a Massachusetts corporation, L. G.
Balfour Company, Inc., a Delaware corporation (which
aforesaid corporations, individually and collectively, jointly and severally,
and together with their successors and assigns, are herein referred to as
"Borrower"), and Foothill Capital Corporation, a California corporation
("Foothill"), in light of the following:
WHEREAS, Borrower and Foothill are parties to that certain Loan Agreement
dated as of May 14, 1993 (as from time to time amended, modified, supplemented,
renewed, extended, or restated, the "Loan Agreement"); and
WHEREAS, Borrower has requested that certain provisions of the Loan
Agreement be amended, and Foothill has agreed to amend such provisions in
accordance with the terms hereof.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants,
conditions, and provisions as hereinafter set forth, the parties hereto agree as
follows:
1. Initially capitalized terms used herein have the meanings defined in the Loan
Agreement unless otherwise defined herein.
2. The following definitions contained in Section 1.1 of the Loan Agreement are
hereby amended and restated in their entirety as follows:
"Maximum Amount" means (i) Thirty Eight Million Dollars ($38,000,000) during
November 1995, and December 1995; (ii) Thirty Three Million Dollars
($33,000,000) during January 1996; (iii) Thirty Million Dollars ($30,000,000)
during January, February, March, April, May, June, July and August
of any other year; and (iv) Thirty Five Million Dollars ($35,000,000) during
September, October, November and December of any other year."
"Maximum Foothill Amount" means that portion of the Maximum Amount for which
Foothill is responsible, exclusive of any participations with Participants,
which amount is (i) Twenty Two Million One Hundred Sixty Five Thousand Four
Hundred Dollars ($22,165,400) during November 1995 and December 1995;
<PAGE>
(ii) Nineteen Million Two Hundred Forty Eight Thousand Nine
Hundred Dollars ($19,248,900); (iii) Seventeen Million Five Hundred Thousand
Dollars ($17,500,000) during January, February, March, April, May, June, July
and August of any other year; and (iv) Twenty Million Four Hundred Sixteen
Thousand Six Hundred Sixty Seven Dollars ($20,416,667) during
September, October, November and December of any other year; provided, however,
that each time the Maximum Amount is reduced pursuant to Section 2.3 hereof, the
Maximum Foothill Amount shall be reduced proportionately."
2. Foothill shall charge Borrower's account an overline fee in the amount of
$10,000 and a documentation fee in the amount of $500.00 upon execution and
delivery of the Amendment to Foothill. This fee shall be in addition to any
other fees, expenses or compensation payable to Foothill under
any Loan Document, shall be compensation to Foothill for entering into this
Amendment, shall be fully earned at the time it is so charged, and shall be
non-refundable.
3. Foothill and Borrower also agree that:
(a) The execution, delivery and performance by Borrower of this Amendment have
been duly authorized by all necessary corporate and other action and do not and
will not require any registration with, consent or approval of, or notice to or
action by, any Person in order to be effective an enforceable.
(b) The Agreement, as amended by this Amendment, constitutes the legal, valid
and binding obligation of Borrower, enforceable against Borrower in accordance
with its terms, without defense, counterclaim or offset.
4. Foothill and Borrower also agree that:
(a) Except as herein expressly amended, all terms, covenants and provisions of
the Loan Agreement are and shall remain in full force and effect and all
references therein to the Loan Agreement shall henceforth refer to the Loan
Agreement as amended by this Amendment. This Amendment shal be deemed
incorporated into, and a part of, the Loan Agreement.
(b) This Amendment shall be governed by, and construed and enforced in
accordance with, the laws of the State of California.
(c) This Amendment may be executed in any number of counterparts, each of which
shall be deemed an original, and all such counterparts together shall constitute
but one and the same instrument. This Amendment shall become effective when each
party has executed and delivered a counterpar hereof. Upon this Amendment
becoming effective, the changes to the provisions of Section 1.1 of the Loan
Agreement provided for in this Amendment shall operate prospectively and not
retroactively.
(d) This Amendment, together with the Loan Agreement and other Loan Documents,
contains the entire and exclusive agreement of the parties hereto with reference
to the matters discussed herein and therein. This Amendment supersedes all prior
drafts and communications with respect thereto
This Amendment may not be amended except in writing executed by both of the
parties hereto.
<PAGE>
(e) If any term or provisions of this Amendment shall be deemed prohibited by or
invalid under any applicable law, such provision shall be invalidated without
affective the remaining provisions of this Amendment or the Loan Agreement,
respectively.
IN WITNESS HEREOF, this Amendment has been executed and delivered as of the
date first set forth of above.
FOOTHILL CAPITAL CORPORATION TOWN & COUNTRY CORPORATION
By /s/ Steve M. Cole By /s/ Francis X. Correra
print Name:Steve M. Cole
Title: Vice President Print Name: Francis X. Correra
Title: Senior Vice President and
Chief Financial Officer
TOWN & COUNTRY FINE JEWELRY GROUP, INC.
By: /s/ Francis X. Correra
Print Name: Francis X. Correra
Title: Vice President
and Treasurer
GOLD LANCE, INC.
By: /s/ Francis X. Correra
Print Name: Francis X. Correra
Title: Treasurer
L.G. BALFOUR COMPANY
By: /s/ Francis X. Correra
Print Name: Francis X. Correra
Title: Executive Vice
President and Treasurer
TOWN & COUNTRY CORPORATION EXHIBIT 11
Earnings Per Share Computations
(Unaudited)
For the Three Months Ended For the Nine Months Ended
November 26, November 27, November 26, November 27,
1995 1994 1995 1994
PRIMARY EPS:
Net income $ 6,636,293 $16,424,043 $ 1,940,857 $ 6,776,653
Accretion of discount
and dividends on
preferred stocks 255,320 479,551 786,359 1,426,299
Loss attributable
to common
stockholders $ 6,380,973 $15,944,492 $ 1,154,498 $ 5,350,354
Weighted average
common shares
outstanding 23,834,596 23,432,449 23,728,355 23,429,811
Weighted shares issued
from exercise and
assumed execise of:
warrants -- -- -- --
Shares for EPS
calculation 23,834,596 23,432,449 23,728,355 23,429,811
REPORTED EPS:
Net income $ 0.28 $ 0.70 $ 0.08 $ 0.29
Accretion of discount
and dividends
on preferred stocks (0.01) (0.02) (0.03) (0.06)
Income per
common share $ 0.27 $ 0.68 $ 0.05 $ 0.23
FULLY DILUTED EPS:
For the periods presented in this exhibit, there is no dilution from Primary
EPS. 6)
This exhibit should be reviewed in conjunction with Note 4 of Notes to
Consolidated Financial Statements.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000768608
<NAME> ROBERT C. MACCREADY
<MULTIPLIER> 1
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> FEB-25-1996
<PERIOD-START> AUG-28-1995
<PERIOD-END> NOV-26-1995
<EXCHANGE-RATE> 1.000
<CASH> 2,967,707
<SECURITIES> 0
<RECEIVABLES> 90,478,411
<ALLOWANCES> 3,090,000
<INVENTORY> 87,518,141
<CURRENT-ASSETS> 179,995,504
<PP&E> 83,391,775
<DEPRECIATION> 42,768,212
<TOTAL-ASSETS> 242,975,608
<CURRENT-LIABILITIES> 78,780,873
<BONDS> 93,638,339
<COMMON> 238,784
2,289,168
2,220,562
<OTHER-SE> 59,237,965
<TOTAL-LIABILITY-AND-EQUITY> 242,975,608
<SALES> 203,560,405
<TOTAL-REVENUES> 203,560,405
<CGS> 139,614,070
<TOTAL-COSTS> 139,614,070
<OTHER-EXPENSES> 50,045,945
<LOSS-PROVISION> 1,839,840
<INTEREST-EXPENSE> 9,306,077
<INCOME-PRETAX> 2,113,357
<INCOME-TAX> 172,500
<INCOME-CONTINUING> 1,940,857
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,154,498
<EPS-PRIMARY> 0.05
<EPS-DILUTED> 0.05
</TABLE>
