<PAGE>
SECURITIES & 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 Period Ended March 31, 1996
---------------
/ / 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 1-9357
------
TYCO TOYS, INC.
- -------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 13-3319358
- ------------------------ -------------------
(State of incorporation) (I.R.S. Employer
Identification No.)
6000 Midlantic Drive, Mt. Laurel, New Jersey 08054
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (609) 234-7400
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
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, and (2) has been subject to such filing requirements
for the past 90 days.
YES X NO
------- -------
Number of shares outstanding of each class of Registrant's Stock as of
April 30, 1996
Common, $.01 par value.............................34,826,668 shares
Preferred, $.10 par value..............................53,631 shares
<PAGE>
TYCO TOYS, INC.
FORM 10-Q
MARCH 31, 1996
INDEX
Part I. Financial Information Page
- ------------------------------- ----
Item 1. Financial Statements
Consolidated Balance Sheets - March 31, 1996 and 1995
and December 31, 1995 3
Consolidated Statements of Operations - For the Quarters
Ended March 31, 1996 and 1995 4
Consolidated Statements of Stockholders' Equity - For the
Three Months Ended March 31, 1996 and
for the Year Ended December 31, 1995 5
Consolidated Statements of Cash Flows - For the Three Months
Ended March 31, 1996 and 1995 6
Notes to Consolidated Financial Statements 7-10
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 11-13
Part II. Other Information
- ---------------------------
Item 1. Legal Proceedings 13
Item 6. Exhibits and Reports on Form 8-K 13
<PAGE>
Part I. Financial Information.
Item 1. Financial Statements.
Tyco Toys, Inc.
Consolidated Balance Sheets
(in thousands, except share amounts)
<TABLE>
<CAPTION>
March 31, December 31,
--------------------------- ------------
1996 1995 1995
---------- --------- ----------
(Unaudited)
ASSETS
- ------
<S> <C> <C> <C>
Current assets
Cash and cash equivalents $ 9,880 $ 13,280 $ 27,604
Receivables, net 108,529 132,658 187,503
Inventories, net 59,757 74,070 56,710
Prepaid expenses and other current assets 17,343 23,514 19,738
Deferred taxes 13,007 17,275 13,008
-------- -------- --------
Total current assets 208,516 260,797 304,563
Property and equipment, net 33,147 46,498 33,021
Goodwill, net of accumulated amortization 224,282 231,010 226,112
Deferred taxes 34,030 27,998 28,560
Other assets 21,985 21,660 22,876
-------- -------- --------
Total assets $521,960 $587,963 $615,132
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities
Notes payable $ 35,468 $ 37,008 $ 60,923
Current portion of long-term debt 942 1,123 1,053
Accounts payable 21,493 36,002 45,557
Accrued expenses and other current liabilities 59,574 76,418 93,179
-------- -------- --------
Total current liabilities 117,477 150,551 200,712
Long-term debt 147,057 147,359 147,180
Other liabilities 2,151 2,371 1,900
Stockholders' equity
Preferred stock, Series B $.10 par value, $1,050
liquidation value per share, 1,000,000 shares
authorized; 52,839, 49,789 and 52,059 shares
issued and outstanding as of March 31, 1996
and 1995 and December 31, 1995, respectively 5 5 5
Common stock, $.01 par value, 75,000,000
shares authorized; 35,017,158, 34,933,516 and
35,017,158 shares issued as of March 31, 1996
and 1995 and December 31, 1995, respectively 350 349 350
Additional paid-in capital 347,852 344,067 347,033
Accumulated deficit (69,285) (35,285) (58,261)
Treasury stock, at cost (1,676) (1,595) (1,676)
Cumulative translation adjustment (21,971) (19,859) (22,111)
------- -------- --------
Total stockholders' equity 255,275 287,682 265,340
------- ------- -------
Total liabilities and stockholders' equity $521,960 $587,963 $615,132
======== ======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
Tyco Toys, Inc.
Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
For the Quarters Ended
March 31,
---------------------------
1996 1995
------- -------
<S> <C> <C>
Net sales $ 95,768 $116,060
Cost of goods sold 55,133 66,957
--------- --------
Gross profit 40,635 49,103
--------- --------
Marketing, advertising and promotion 24,967 28,868
Selling, distribution and administrative expenses 25,047 27,399
Amortization of goodwill 1,607 1,593
--------- --------
Total operating expenses 51,621 57,860
--------- --------
Operating loss (10,986) (8,757)
Interest expense, net 5,276 5,865
Other income, net (574) (4,329)
--------- --------
Loss before income taxes (15,688) (10,293)
Income tax benefit (5,491) (3,624)
--------- --------
Net loss (10,197) (6,669)
Preferred stock dividends 827 784
--------- --------
Net loss applicable to common shareholders $(11,024) $ (7,453)
========= ==========
Net loss per common share $ (0.32) $ (0.21)
Weighted average number of common shares outstanding 34,827 34,757
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
Tyco Toys, Inc..
Consolidated Statements of Stockholders' Equity
For the three months ended March 31, 1996 (Unaudited)
and for the year ended December 31, 1995
(in thousands, except share data)
<TABLE>
<CAPTION>
Preferred Stock Common Stock Additional
---------------------- ----------------------- Paid - In Accumulated
Shares Amount Shares Amount Capital Deficit
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994 49,055 $5 34,893,516 $349 $343,213 $(27,832)
Issuance of restricted stock - - 42,342 - 338 -
Exercise of stock options - - 81,300 1 328 -
Acquisition of treasury stock - - - - - -
Preferred stock dividends 3,004 - - - 3,154 (3,200)
Foreign currency translation adjustment - - - - - -
Net Loss - - - - - (27,229)
- ----------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1995 52,059 5 35,017,158 350 347,033 (58,261)
Preferred stock dividends 780 - - - 819 (827)
Foreign currency translation adjustment - - - - - -
Net loss - - - - - (10,197)
- ----------------------------------------------------------------------------------------------------------------------
Balance at March 31, 1996 52,839 $5 35,017,158 $350 $347,852 $(69,285)
======================================================================================================================
</TABLE>
(RESTUBBED TABLE)
<TABLE>
<CAPTION>
Treasury Stock Cumulative
------------------- Translation
Shares Amount Adjustment Total
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance at December 31, 1994 (175,590) $(1,595) $(17,908) $296,232
Issuance of restricted stock - - - 338
Exercise of stock options - - - 329
Acquisition of treasury stock (14,900) (81) - (81)
Preferred stock dividends - - - (46)
Foreign currency translation adjustment - - (4,203) (4,203)
Net Loss - - - (27,229)
- -----------------------------------------------------------------------------------------
Balance at December 31, 1995 (190,490) (1,676) (22,111) 265,340
Preferred stock dividends - - - (8)
Foreign currency translation adjustment - - 140 140
Net loss - - - (10,197)
- -----------------------------------------------------------------------------------------
Balance at March 31, 1996 (190,490) $(1,676) $(21,971) $255,275
========================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
Tyco Toys, Inc.
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 1996 and 1995
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Cash Flows From Operating Activities:
Net loss $(10,197) $ (6,669)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation 4,809 5,750
Amortization 2,409 2,722
Decrease in allowance for bad debts, returns, markdowns, discounts
and other receivable reserves (22,983) (19,471)
Increase (decrease) in allowance for obsolescence and other
inventory reserves (2,542) 48
Change in assets and liabilities:
Decrease in receivables 102,080 98,941
Increase in inventories (391) (9,511)
Decrease in prepaid expenses and other current assets 2,406 2,425
Increase in deferred taxes (5,486) (4,310)
(Increase) decrease in other assets 89 (1,217)
Decrease in accounts payable (23,648) (15,091)
Decrease in accrued expenses and other current liabilities (34,128) (18,251)
Increase in other liabilities 285 198
-------- --------
Total adjustments 22,900 42,233
-------- --------
Net cash provided by operating activities 12,703 35,564
-------- --------
Cash Flows From Investing Activities:
Disposition of property and equipment - 98
Capital expenditures (4,960) (4,078)
Acquisition - (1,144)
-------- --------
Net cash utilized by investing activities (4,960) (5,124)
-------- --------
Cash Flows From Financing Activities:
Financing costs -- (4,545)
Repayment of long-term debt (137) (201)
Repayment of notes payable, net (25,406) (41,946)
-------- --------
Net cash utilized by financing activities (25,543) (46,692)
-------- --------
Effect of exchange rate changes on cash 76 (944)
-------- --------
Net Decrease in Cash and Cash Equivalents (17,724) (17,196)
Cash and Cash Equivalents, Beginning of Year 27,604 30,476
-------- --------
Cash and Cash Equivalents, End of Period $ 9,880 $ 13,280
======== ========
Cash Payments During Period For:
Interest $ 7,985 $ 9,946
Taxes 3,044 150
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
TYCO TOYS, INC.
Notes to Consolidated Financial Statements
(Unaudited)
(1) Basis of Presentation
---------------------
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions to Form 10-Q and do not include all the
information and footnotes required by generally accepted accounting principles
for complete financial statements. The consolidated financial statements include
the accounts of Tyco Toys, Inc. (the Company, Tyco or Tyco Toys) and its
subsidiaries. All intercompany transactions have been eliminated in
consolidation. Investments in unconsolidated joint ventures and other companies
are accounted for on the equity method or cost basis depending upon the level of
the investment and/or the Company's ability to exercise influence over operating
and financial policies. In the opinion of management, all adjustments
(consisting of a normal recurring nature) considered necessary for a fair
presentation of results for interim periods have been made. Certain items in the
prior period's financial statements have been reclassified to conform with the
current year's presentation. Due to the seasonal nature of the Company's
business, the results of operations for the interim periods are not necessarily
indicative of the results for a full year. The unaudited financial statements
herein should be read in conjunction with the Company's Annual Report on Form
10-K for the year ended December 31, 1995 which is on file with the Securities
and Exchange Commission.
(2) Accounting For Income Taxes
---------------------------
The Company adopted Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" (SFAS 109), effective January 1, 1993. In
accordance with SFAS 109, deferred income taxes reflect the impact of temporary
differences between values recorded for assets and liabilities for financial
reporting purposes and the values utilized for measurement in accordance with
current tax laws. SFAS 109 requires the Company to record the net deferred tax
benefits of net operating loss and tax credit carryforwards, if realization is
more likely than not.
Management believes, considering all available evidence, including the Company's
history of earnings from prior years (after adjustments for nonrecurring items,
restructuring charges and permanent differences and other appropriate
adjustments) and after considering appropriate tax planning strategies, it is
more likely than not that the Company will generate sufficient taxable income in
the appropriate carryforward periods to realize the benefit of certain net
operating losses and future deductible temporary differences. The total net
deferred tax assets (both current and noncurrent) have been reduced to the
amount management considers realizable by establishing valuation allowances
aggregating $82,207,000. Based on the weight of available evidence, management
has concluded that more likely than not, its future taxable income will be
sufficient to support the current recognition of the total net deferred tax
assets of $47,037,000.
The valuation allowances have been established due to management's analysis
indicating that certain tax credit and net operating loss carryforwards, which
are limited under the income tax laws, may expire prior to their full
utilization. The valuation allowances include $16,168,000 related to the
preacquisition net operating losses of Matchbox. Any subsequently recognized
benefits related to these net operating losses will be allocated to reduce
goodwill.
<PAGE>
TYCO TOYS, INC.
Notes to Consolidated Financial Statements
(Unaudited)
(3) Receivables, Net (in thousands):
----------------
<TABLE>
<CAPTION>
March 31,
--------------------- December 31,
1996 1995 1995
--------------------- ------------
<S> <C> <C> <C>
Trade receivables $135,640 $151,177 $237,041
Other receivables 5,630 12,791 6,186
Less:
Doubtful accounts 5,430 4,549 6,052
Returns, markdowns, discounts
and other reserves 27,311 26,761 49,672
-------- -------- --------
$108,529 $132,658 $187,503
======== ======== ========
</TABLE>
(4) Inventories, Net (in thousands):
----------------
<TABLE>
<CAPTION>
March 31,
--------------------- December 31,
1996 1995 1995
--------------------- ------------
<S> <C> <C> <C>
Raw materials $13,760 $15,868 $ 15,483
Work-in-process 1,641 2,331 1,534
Finished goods 49,682 68,891 47,561
Less obsolescence and other
reserves 5,326 13,020 7,868
------- ------ -------
$59,757 $74,070 $56,710
====== ====== ======
</TABLE>
<PAGE>
TYCO TOYS, INC.
Notes to Consolidated Financial Statements
(Unaudited)
(5) Legal Proceedings
-----------------
Italian Litigation
- ------------------
In 1994, court action was initiated against the Company in Milan, Italy by a
plaintiff who is the former managing director of the Company's Italian
subsidiary; the claims alleged breach of a letter of intent for the sale of the
subsidiary. The Company has received a favorable ruling in this litigation, and
the Milan Tribunal assessed damages, certain costs, and attorney's fees against
the plaintiff, but in the opinion of the management and its outside counsel such
appeal, if pursued, is not likely to have a material adverse impact on the
Company's earnings, financial condition or liquidity.
U.S. Customs
- ------------
In 1992, the U.S. Customs Service issued a penalty notice of an assessment for
lost duty in the amount of $1,500,000, penalties for gross negligence of
$5,800,000, and penalties for fraud of $5,600,000. All of the claims arise from
activities of the Company's View-Master subsidiary for periods prior to its
acquisition by the Company in 1989. Management and the Company's outside counsel
are of the opinion that the Company has legal and factual defenses to the
penalty claims made by the U.S. Customs Service, and that the outcome of the
proceedings relating to these claims, which proceedings may be protracted, are
not likely to have a material adverse impact on the earnings, financial
condition or liquidity of the Company.
Environmental Litigation
- ------------------------
Tyco Industries, a subsidiary of the Company, has been a party to three matters
arising out of waste hauled by a transporter to various sites, including the
GEMS Landfill. Two of the matters have been settled for monetary amounts that
were not material to Tyco Industries. The third matter, a claim by the New
Jersey Department of Environmental Protection for a share of remediation costs
at a different site in Sewell, New Jersey, is still pending, but the Company
believes that there are meritorious factual and legal defenses to this claim and
that its share of a negotiated settlement will not be material to the Company.
In the opinion of management of the Company and its outside counsel, this is not
likely to have a material adverse impact on the earnings, financial condition or
liquidity of the Company. In addition, the Company will receive a contribution
from a third party towards certain expenses in this matter.
Other Litigation
- ----------------
The Company is involved in various claims and legal actions arising in the
ordinary course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the
Company's earnings, financial condition or liquidity.
<PAGE>
TYCO TOYS, INC.
Notes to Consolidated Financial Statements
(Unaudited)
(6) Net Loss Per Share
------------------
Net loss per share is computed by dividing the loss applicable to common
shareholders by the weighted average number of common and common equivalent
shares outstanding during the quarter. Outstanding options, and the Company's
convertible notes and preferred securities were determined to be anti-dilutive
for the quarters ended March 31, 1996 and 1995 and were therefore excluded from
the per share calculations.
(7) Subsequent Event
----------------
On May 8, 1996, the Company filed a Registration Statement with the Securities
and Exchange Commission in connection with a public offering of $75,000,000 of
Series C Mandatorily Convertible Redeemable Preferred Stock. The net proceeds of
the proposed offering will be used to reduce the Company's short-term borrowings
and for working capital and general corporate purposes. The offering is being
underwritten by Donaldson, Lufkin & Jenrette Securities Corporation and Lazard
Freres & Company, LLC.
<PAGE>
Item 2. Management Discussion and Analysis of Financial
-----------------------------------------------
Condition and Results of Operations.
------------------------------------
Results of Operations
- ---------------------
Net sales for the quarter ended March 31, 1996 were $95,768,000 compared to
$116,060,000 for the same period last year. The decrease in first quarter sales
was attributable to the discontinuance of certain 1995 product categories, in
particular, action figures, small dolls and videos in conjunction with the
Company's focus on core product lines. Additionally, many new 1996 products,
such as Tyco VideoCam(TM), Kitchen Littles(TM) as well as Radio Control toys and
Matchbox(R) playsets are scheduled to ship later in the year and did not
contribute to the first quarter results. Sales for the Company's Domestic unit
were $60,857,000 in 1996 compared to $74,136,000 in the prior year. The decrease
in sales was solely attributable to the discontinued product categories
described above. International sales decreased $5,613,000 to $27,912,000. This
reduction was primarily due to the discontinuance of certain action figure
categories in 1996. Preschool sales of $8,049,000 were approximately $700,000
below 1995. Sales for 1995 included approximately $1,500,000 of lower margin
non-preschool products. As part of the Company's 1995 restructuring, the
marketing of certain non-preschool products was transferred to the Company's
Domestic operations. Sales of these transferred non-preschool products included
in the Company's 1996 Domestic operations were not material to the first quarter
domestic results.
Gross profit for the quarter ended March 31, 1996 was $40,635,000 (42.4% of net
sales) compared to $49,103,000 (42.3% of net sales) for the comparable quarter
last year reflecting the reduction in sales volume. Gross profit as a percent of
net sales remained relatively constant in the Company's Domestic and
International units. Direct Import margins improved by 6% in 1996 compared to
the 1995 quarter. Approximately one-half of the increase is attributable to
reduced depreciation and the remainder is due to an improved product mix
resulting from the exclusion of non-preschool products in the 1996 results.
Total operating expenses for the quarter ended March 31, 1996 were $51,621,000
compared to $57,860,000 for the same period last year. In the Domestic business
unit, operating expenses were reduced by approximately $2,500,000 primarily
reflecting reduced marketing expenses associated with lower sales volume.
Operating expenses in the International and Preschool units decreased by
approximately $2,800,000 and $600,000, respectively, from 1995, primarily
reflecting the effects of the Company's restructuring programs.
Interest expense, net, for the quarter ended March 31, 1996 was $5,276,000
compared to $5,865,000 for the same period last year. The decrease reflects
substantially lower average borrowings, partially offset by slightly higher
effective borrowing rates, including the amortization of financing costs. Total
average borrowings for the quarter ended March 31, 1996 were $181,536,000 at an
average borrowing rate of 10.9% compared to total average borrowings of
$205,774,000 at an average rate of 10.5% for the first quarter of 1995.
Excluding long-term debt, average short-term borrowings were $33,501,000 and
$58,932,000 during 1996 and 1995, respectively.
Included in other income for 1996 is a net foreign currency gain of $553,000
compared to a gain of $1,355,000 in the prior year. Other income for 1995 also
included a pre-tax profit of approximately $2,500,000 from the sale of the
Company's distribution rights for the Kidsongs Music Video line.
<PAGE>
The Company recorded an income tax benefit of $5,491,000 for the quarter ended
March 31, 1996 compared to $3,624,000 for the same period last year, reflecting
the same overall effective rate applied to the increase in consolidated pre-tax
losses.
The consolidated federal income tax returns of Tyco Toys, Inc. for the fiscal
years ended December 31, 1990 through December 31, 1993 are presently being
examined by the Internal Revenue Service. While the final outcome of this
examination is not determinable at this time, management of the Company believes
that any proposed adjustments, if sustained, will not materially affect the
financial condition, results of operations (including realization of net
operating loss carryforwards) or liquidity of the Company.
Financial Condition and Liquidity
- ---------------------------------
Three Months Ended March 31, 1996
- ---------------------------------
For the quarter ended March 31, 1996, cash and cash equivalents decreased
$17,724,000 to $9,880,000. Contributing to the $12,703,000 generation of cash
from operating activities was the seasonal reduction of receivables
($79,097,000) and payables and accruals ($57,776,000) which were offset by the
1996 first quarter loss of $10,197,000. Cash on hand and cash from operations
was primarily used to reduce short-term debt of $25,406,000 and to purchase
fixed assets of $4,960,000.
The Company has the following sources of liquidity to support the cyclical
working capital requirements of its business: existing cash balances and related
interest earnings, internally-generated funds, available borrowings under its
existing credit facilities, and proceeds from potential equity or debt
offerings. The Company believes that its existing credit facilities and
internally-generated funds will provide adequate financing for its current and
foreseeable levels of operation.
Offering
- --------
On May 8, 1996, the Company filed a Registration Statement with the Securities
and Exchange Commission in connection with a public offering of $75,000,000 of
Series C Mandatorily Convertible Redeemable Preferred Stock. The net proceeds of
the proposed offering will be used to reduce the Company's short-term borrowings
and for working capital and general corporate purposes. The offering is being
underwritten by Donaldson, Lufkin & Jenrette Securities Corporation and Lazard
Freres & Company, LLC.
Credit Facility
- ---------------
During the fourth quarter of 1995, the Company was not in compliance with
certain financial covenants under its credit facilities and received waivers
from General Electric Capital Corporation and affiliates. The Company has
amended these credit facilities to reflect revisions to its financial covenants.
As a result of the amendment, the interest rate on the facilities was increased
by .25% beginning in 1996.
<PAGE>
Dividends
- ---------
The Company's credit facilities restrict the Company's ability to pay cash
dividends on capital stock until the Company achieves a defined level of
tangible net worth. The terms of the 6% Series B Voting Convertible Exchangeable
Preferred Stock, the 10.125% Senior Subordinated Notes and the 7% Convertible
Subordinated Notes also have limitations on the payment of cash dividends. The
Company, during the first quarter of 1996 and 1995, issued additional shares of
Preferred Stock in lieu of cash dividends valued at $827,000 and $784,000,
respectively.
Part II. Other Information.
Item 1. Legal Proceedings.
------------------
Reference is made to note 5 of the Notes to Consolidated Financial
Statements included in Part I, Item 1 of this report.
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a) Exhibits.
---------
11. Statement Regarding Computation of Per Share Loss -
Quarters Ended March 31, 1996 and 1995.
(b) Reports on Form 8-K.
--------------------
None.
<PAGE>
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.
TYCO TOYS, INC.
---------------
Registrant
Date: May 10, 1996 By: /s/ Harry J. Pearce
------------ -------------------
Harry J. Pearce
Vice Chairman,
Chief Financial Officer,
and Director
<PAGE>
EXHIBIT INDEX
--------------
Exhibit No. Description Page
11 Statement Regarding Computation
of Per Share Loss for the Quarters
ended March 31, 1996 and 1995. 16
<PAGE>
Exhibit 11
Tyco Toys, Inc.
Computation of Per Share Loss
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Quarters Ended March 31,
----------------------------
1996 1995
---- ----
<S> <C> <C>
Primary Loss Per Share:
1. Net loss $(10,197) $ (6,669)
2. Less preferred dividends 827 784
-------- ----------
3. Net loss applicable to common shareholders $(11,024) $ (7,453)
======== ==========
4. Weighted average shares outstanding 34,827 34,757
5. Add additional shares issuable upon the assumed exercise
of outstanding stock options * - -
-------- ----------
6. Adjusted weighted average shares outstanding 34,827 34,757
======== ==========
7. Net loss per share (3 / 6) $ (0.32) $ (0.21)
======== ==========
Fully Diluted Loss Per Share:
8. Line 3 above $(11,024) $ (7,453)
9. Add back preferred dividends (line 2) 827 784
10. Add back interest, net of tax, on assumed conversion of
the Company's 7% Convertible Subordinated Notes 182 169
-------- ----------
11. Adjusted net loss $(10,015) $ (6,500)
======== ==========
12. Weighted average shares outstanding (line 4) 34,827 34,757
13. Add additional shares issuable upon the assumed exercise
of outstanding stock options* -- --
14. Add additional shares issuable upon assumed
conversion of the Company's 7% Convertible
Subordinated Notes 1,603 1,497
15. Add additional shares issuable upon assumed
conversion of the Company's Convertible Preferred Stock 5,517 4,965
-------- ----------
16. Adjusted weighted average shares outstanding 41,947 41,219
======== ==========
17. Net loss per share (11/16) ** $ (0.24) $ (0.16)
======== ==========
</TABLE>
* For the calculation of loss per share, the inclusion of the assumed exercise
of options for the periods presented was anti-dilutive and, therefore, such
assumed exercise has been excluded from the per share calculations.
** Fully diluted loss per share is not presented in the Consolidated Statements
of Operations as the assumed conversions of the Company's Preferred
Securities and Convertible Subordinated Notes were anti-dilutive for the
periods presented.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CIK> 0000786130
<NAME> TYCO TOYS INC.
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 9,880
<SECURITIES> 0
<RECEIVABLES> 141,270
<ALLOWANCES> 32,741
<INVENTORY> 59,757
<CURRENT-ASSETS> 208,516
<PP&E> 141,702
<DEPRECIATION> 108,555
<TOTAL-ASSETS> 521,960
<CURRENT-LIABILITIES> 117,477
<BONDS> 142,534
0
52,484
<COMMON> 295,723
<OTHER-SE> (92,932)
<TOTAL-LIABILITY-AND-EQUITY> 521,960
<SALES> 95,768
<TOTAL-REVENUES> 95,768
<CGS> 55,133
<TOTAL-COSTS> 51,043
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</TABLE>
