<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
- --------------------------------------------------------------------------------
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended September 30, 1999 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 1-10062
-------
InterTAN, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 75-2130875
- ------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
3300 Highway #7,Suite 904
Concord, Ontario Canada L4K 4M3
- ---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (905) 760-9701
-------------------
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
--- ---
At October 31, 1999, 20,001,425 shares of the registrant's common stock, par
value $1.00 per share, were outstanding.
1
<PAGE>
TABLE OF CONTENTS
PART I
Page
Introductory note regarding forward-looking information 3
ITEM 1 - Financial Statements and Supplementary Data
Consolidated Statements of Operations 4
Consolidated Balance Sheets 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7
ITEM 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 12
PART II
ITEM 1 - Legal Proceedings 24
ITEM 4 - Submission of Matters to a Vote of Security Holders 24
ITEM 6 - Exhibits and Reports on Form 8-K 24
OTHER
Signatures 26
2
<PAGE>
INTRODUCTORY NOTE REGARDING FORWARD-LOOKING INFORMATION
With the exception of historical information, the matters discussed herein are
forward-looking statements about the business, financial condition and prospects
of InterTAN, Inc. (the "Company" or "InterTAN"). The actual results of the
Company could differ materially from those indicated by the forward-looking
statements because of various risks and uncertainties including, but not limited
to, international economic conditions, interest and foreign exchange rate
fluctuations, various tax issues, including possible reassessments, changes in
product demand, competitive products and pricing, availability of products,
inventory risks due to shifts in market conditions, dependence on manufacturers'
product development, the regulatory and trade environment, real estate market
fluctuations, certain aspects of Year 2000 compliance and other risks indicated
in the Company's previous filings with the Securities and Exchange Commission.
These risks and uncertainties are beyond the ability of the Company to control,
and in many cases the Company cannot predict the risks and uncertainties that
could cause its actual results to differ materially from those indicated by the
forward-looking statements.
3
<PAGE>
ITEM 1 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Consolidated Statements Of Operations
InterTAN, Inc.
- --------------------------------------------------------------------------------
(U.S. dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended
September 30
---------------------------------------------------
1999 1998
--------------------- --------------------
<S> <C> <C>
Net sales and operating revenues.............................. $ 108,003 $ 121,844
Other income.................................................. 95 79
---------------------------------------------------
108,098 121,923
---------------------------------------------------
Operating costs and expenses:
Cost of products sold...................................... 63,740 68,876
Selling, general and administrative expenses............... 35,207 47,847
Depreciation and amortization.............................. 1,371 1,790
---------------------------------------------------
100,318 118,513
---------------------------------------------------
Operating income.............................................. 7,780 3,410
Foreign currency transaction (gains) losses................ 51 (412)
Interest income............................................ (484) (286)
Interest expense........................................... 139 1,399
---------------------------------------------------
Income before income taxes.................................... 8,074 2,709
Provision for income taxes.................................... 3,687 3,004
---------------------------------------------------
Net income (loss)............................................. $ 4,387 $ (295)
===================================================
Basic net income (loss) per average common share.............. $ 0.22 $ (0.02)
Diluted net income (loss) per average common share............ $ 0.21 $ (0.02)
Average common shares outstanding............................. 19,905 12,524
Average common shares outstanding assuming dilution........... 20,680 12,524
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
Consolidated Balance Sheets
InterTAN, Inc.
- --------------------------------------------------------------------------------
(In thousands, except share data)
<TABLE>
<CAPTION>
September 30 June 30 September 30
1999 1999 1998
-------------------------------------------------------------
<S> <C> <C> <C>
Assets
Current Assets:
Cash and short-term investments............................. $ 26,420 $ 47,403 $ 16,872
Accounts receivable, less allowance for doubtful
accounts............................................... 17,228 9,841 12,910
Inventories................................................. 126,036 111,934 165,298
Other current assets........................................ 3,662 3,567 7,805
Deferred income taxes....................................... 1,238 1,247 353
-------------------------------------------------------------
Total current assets.................................... 174,584 173,992 203,238
Property and equipment, less accumulated
depreciation and amortization..............................
20,830 20,123 26,135
Other assets.................................................... 284 276 641
Deferred income taxes........................................... 3,938 3,924 -
-------------------------------------------------------------
Total Assets.................................................... $ 199,636 $ 198,315 $ 230,014
=============================================================
Liabilities and Stockholders' Equity
Current Liabilities:
Short-term bank borrowings.................................. $ - $ - $ 16,864
Accounts payable............................................ 21,506 15,883 31,883
Accrued expenses............................................ 15,594 17,369 29,990
Income taxes payable........................................ 31,246 39,286 16,452
Deferred service contract revenue - current portion......... 4,773 4,488 3,565
-------------------------------------------------------------
Total current liabilities.............................. 73,119 77,026 98,754
9% convertible subordinated debentures.......................... - - 37,087
Deferred service contract revenue - non-current portion......... 4,175 4,008 3,098
Other liabilities............................................... 6,571 6,521 6,694
-------------------------------------------------------------
83,865 87,555 145,633
-------------------------------------------------------------
Stockholders' Equity:
Preferred stock, no par value, 1,000,000 shares
authorized, none issued or outstanding................. - - -
Common stock, $1 par value, 40,000,000 shares
authorized, 19,948,843, 19,855,202 and
12,662,642 issued and outstanding...................... 19,949 19,855 12,623
Additional paid-in capital.................................. 152,079 151,054 116,554
Deficit..................................................... (30,504) (34,895) (10,545)
Accumulated other comprehensive loss........................ (25,753) (25,254) (34,251)
-------------------------------------------------------------
Total stockholders' equity............................. 115,771 110,760 84,381
-------------------------------------------------------------
Commitments and contingent liabilities (see Notes 4 and 7)
Total Liabilities and Stockholders' Equity...................... $ 199,636 $ 198,315 $ 230,014
=============================================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
Consolidated Statements of Cash Flows
InterTAN, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(In thousands) Three months ended
September 30
-----------------------------------
1999 1998
-----------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss)............................................................... $ 4,387 $ (295)
Adjustments to reconcile net income (loss) to
cash used in operating activities:
Depreciation and amortization............................................... 1,371 1,790
Foreign currency transaction gains, unrealized.............................. - (318)
Other....................................................................... 357 559
Cash provided by (used in) current assets and liabilities:
Accounts receivable......................................................... (7,320) (4,703)
Inventories................................................................. (14,480) (20,173)
Other current assets........................................................ (190) (1,358)
Accounts payable............................................................ 5,644 7,918
Accrued expenses and deferred service contract revenue...................... (1,196) (1,301)
Income taxes payable........................................................ (8,024) (3,634)
-----------------------------------
Net cash used in operating activities....................................... (19,451) (21,515)
-----------------------------------
Cash flows from investing activities:
Additions to property and equipment............................................. (2,223) (2,454)
Proceeds from sales of property and equipment................................... 22 43
Other investing activities...................................................... 151 1,010
-----------------------------------
Net cash used in investing activities......................................... (2,050) (1,401)
-----------------------------------
Cash flows from financing activities:
Changes in short-term bank borrowings, net...................................... - 7,434
Proceeds from issuance of common stock to
employee plans............................................................. 487 423
Proceeds from exercise of stock options......................................... 308 -
-----------------------------------
Net cash provided by financing activities..................................... 795 7,857
-----------------------------------
Effect of exchange rate changes on cash............................................. (277) (880)
-----------------------------------
Net decrease in cash and short-term investments..................................... (20,983) (15,939)
Cash and short-term investments, beginning of period................................ 47,403 32,811
-----------------------------------
Cash and short-term investments, end of period...................................... $ 26,420 $ 16,872
===================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
6
<PAGE>
Notes to Consolidated Financial Statements
Note 1 Basis of Financial Statements
The accompanying unaudited financial statements have been prepared in accordance
with Rule 10-01 of Regulation S-X, "Interim Financial Statements", and do not
include all information and footnotes required by generally accepted accounting
principles for complete financial statements. The financial statements have been
prepared in conformity with accounting principles and practices (including
consolidation practices) as reflected in InterTAN, Inc.'s ("InterTAN" or the
"Company") Annual Report on Form 10-K for the fiscal year ended June 30, 1999,
and, in the opinion of the Company, include all adjustments necessary for a fair
presentation of the Company's financial position as of September 30, 1999 and
1998 and the results of its operations for the three months ended September 30,
1999 and 1998 and its cash flows for the three months ended September 30, 1999
and 1998. Such adjustments are of a normal and recurring nature. Operating
results for the three months ended September 30, 1999 are not necessarily
indicative of the results that can be expected for the fiscal year ended June
30, 2000. For further information, refer to the consolidated financial
statements and notes thereto included in the Company's Annual Report on Form
10-K for the fiscal year ended June 30, 1999.
Note 2 Net Income per average Common Share
Basic earnings per share ("EPS") is calculated by dividing the net income or
loss for a period by the weighted average number of common shares outstanding
for the period. Diluted EPS reflects the potential dilution which would occur if
securities or other contracts to issue common stock were exercised or converted.
Basic and diluted net income per average common share and a reconciliation of
the numerator and denominator of the basic EPS computation to the numerator and
denominator of the diluted EPS computation is set out below:
<TABLE>
<CAPTION>
(In thousands, except for per Three months ended
share data)
September 30, 1999 September 30, 1998
Income Shares Per Share Income Shares Per Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
<S> <C> <C> <C> <C> <C> <C>
Net income loss $ 4,387 $ (295)
============== =============
Basic EPS
Income (loss) available to
common stockholders $ 4,387 19,905 $ 0.22 $ (295) 12,524 $ (0.02)
============ ============
Effect of Dilutive Securities
9% convertible debentures - - - (1) - (1)
Stock options - 775 - (1) - (1)
-------------- -------------- ------------- --------------
Diluted EPS
Income (loss) available to
common stockholders
including assumed conversions
$ 4,387 20,680 $ 0.21 $ (295) 12,524 $ (0.02)
============== ============== ============ ============= ============== ============
</TABLE>
(1) These instruments were anti-dilutive during the three month period ended
September 30, 1998
7
<PAGE>
During the three months ended September 30, 1998, the Company's potentially
dilutive instruments included its 9% convertible subordinated debentures (the
"Debentures"). Under the terms of their issuance, the Debentures were
convertible into common stock at the rate of Cdn $8.42 per share, equivalent to
approximately 6,750,000 shares in the aggregate at September 30, 1998. The
Debentures were anti-dilutive during the three months ended September 30, 1998.
During the fourth quarter of fiscal year 1999, the Company served notice of
redemption on all remaining Debenture holders and all such Debenture holders
exercised their right of conversion. Also, at September 30, 1999 and 1998, the
Company's directors and employees held options to purchase 1,276,153 and
1,011,500 common shares, respectively, at prices ranging from $3.50 to $15.75
and $3.50 to $8.1875, respectively. During the three months ended September 30,
1999, all of such options were considered in calculating diluted EPS. However,
during the comparable prior year quarter, such options were anti-dilutive and
were, therefore, excluded from the diluted EPS calculation. The dilutive effect
of these options in future periods will depend on the average price of the
Company's common stock during such periods.
Note 3 Comprehensive Income (Loss)
Comprehensive income is defined as the change in equity (net assets) of a
business enterprise during a period from transactions and other events and
circumstances from non-owner sources. For the Company, comprehensive income
(loss) includes net income (loss) and the net change in foreign currency
translation effects. The comprehensive income (loss) for the three months ended
September 30, 1999 and 1998 was $3,888,000 and $(2,332,000), respectively.
Note 4 Income Taxes
The provisions for domestic and foreign income taxes for the three-month periods
ended September 30, 1999 and 1998 were $3,687,000 and $3,004,000, respectively.
The Company's income tax expense primarily represents Canadian and Australian
income tax on the profits earned by its subsidiaries in those countries. No tax
was currently payable in the United Kingdom for the three-month period ended
September 30, 1998, nor had any benefit been recognized for the accumulated
losses in that country.
An audit of the income tax returns of the Canadian subsidiary for the 1987 to
1989 taxation years was completed during fiscal year 1994, resulting in
additional tax being levied against the Canadian subsidiary. The Company has
appealed these reassessments and, pending the outcome of these matters, the
Company, by Canadian law, was required to pay one-half of the tax in dispute.
The tax levied by Revenue Canada in reassessing those years was offset by
refunds arising from the carryback of losses incurred in subsequent years.
Depending on the ultimate resolution of these issues, the Company could
potentially have an additional liability in the range of $0 to $11,700,000. The
Company believes it has meritorious arguments in defense of the issues raised by
Revenue Canada and it is in the process of vigorously defending its position. It
is management's determination that no additional provision need be recorded for
these reassessments. It is not practical for management to make any reasonable
determination of when this remaining outstanding Canadian tax issue will
ultimately be resolved. A audits of the Company's Canadian subsidiary's income
tax returns by Revenue Canada for the 1994 - 1996 taxation years is in process.
An audit of the Company's United States income tax returns by the Internal
Revenue Service (the "IRS") is also in process. This audit is nearing completion
and the Company anticipates hearing from the IRS in the near future regarding
any issues or concerns resulting from the audit.
8
<PAGE>
Note 5 Bank Debt
In December, 1997 InterTAN Canada Ltd., InterTAN, Inc. and InterTAN U.K. Limited
entered into a three-year revolving facility with a syndicate of lenders (the
"Syndicated Loan Agreement") in an amount not to exceed $75,000,000 in the
aggregate. With the sale of InterTAN U.K. Limited in January, 1999, the facility
was reduced to $50,000,000. The amount of credit actually available at any
particular time is dependent on a variety of factors including the level of
eligible inventories and accounts receivable of InterTAN Canada. The amount of
available credit is then reduced by the amount of trade accounts payable then
outstanding as well as certain other reserves. The interest rate under the
credit facility was the Canadian prime rate plus 1.0%. Letters of credit are
charged at the rate of 1.5% per annum. In addition, a standby fee is payable on
the unused portion of the credit facility. The amount of this fee is subject to
certain thresholds, and ranges from 0.375% to 0.50% of the unused credit line.
The Syndicated Loan Agreement is collateralized by a first priority lien over
all of the assets of InterTAN Canada and is guaranteed by InterTAN, Inc. In
November, 1999, the Syndicated Loan Agreement was amended as follows: the
facility is now denominated in Canadian dollars in an amount not to exceed
C$67,000,000 (approximately $45,640,000 at September 30, 1999 rates of
exchange); borrowings under the Syndicated Loan Agreement by Intertan Canada
Ltd. may now be directed to InterTAN, Inc.; the interest rate under the facility
has been changed to Canadian prime, London Inter Bank Offered Rate plus 1.5% or
Bankers Acceptance Rate plus 1.5%, as elected by the Company at the time of
borrowing; and, subject to certain financial covenants, the payment of dividends
is now permitted.
Note 6 Non-employee Stock Options
In June, 1999, the Company proposed a plan which would grant additional options
to purchase common stock to each non-employee director (such options are
collectively referred to as "the 1999 Director Plan"). This plan received
shareholder approval at the Company's annual meeting of stockholders on November
9, 1999. Under the 1999 Director Plan, each non-employee director was granted an
option to purchase 20,000 shares of the Company's common stock at an exercise
price of $15.75 per share. Options granted under this plan will be exercisable
on a cumulative basis equal to one fourth per year on the date fixed for the
Company's annual meeting of stockholders, commencing with the 1999 meeting.
Under this plan, the Company will recognize aggregate compensation expense of
$910,000. One-fourth of this amount will be recognized upon adoption, during the
second quarter of fiscal year 2000. The balance will be amortized ratably over
the remainder of the vesting period.
Note 7 Commitments and Contingencies
In connection with the sale of its United Kingdom subsidiary, the Company has
indemnified the purchaser for certain contingencies primarily relating to real
estate matters associated with store leases and working capital adjustments. In
addition, the Company remains contingently liable as guarantor of certain leases
of InterTAN U.K. Limited. At the time of the sale the lease obligation assumed
by the purchaser and guaranteed by the Company was approximately $32,000,000 and
the average remaining life of such leases was approximately 6 years. If the
purchaser were to default on the lease obligations, management believes the
Company could reduce the exposure through assignment, subletting and other
means. The Company has obtained an indemnity from the purchaser for
approximately $13,000,000 which is management's best estimate of the Company's
potential exposure under these guarantees. The
9
<PAGE>
amount of this indemnity declines over time as the Company's risk diminishes.
Apart from this matter and the issues discussed in Note 4, there are no material
pending proceedings or claims, other than routine matters incidental to the
Company's business, to which the Company or any of its subsidiaries is a party,
or to which any of its property is subject.
Note 8 Segment Reporting
The Company is managed along geographic lines. All references in these notes to
"Canada", "Australia", "United Kingdom" and "Corporate Headquarters" refer to
the Company's reportable segments, unless otherwise noted. The Company's United
Kingdom subsidiary was sold in the third quarter of fiscal year 1999.
Transactions between segments are not common and are not material to the segment
information. The table below summarizes net sales and operating revenues,
operating income (loss) and identifiable assets for the Company's segments.
Consolidated operating income (loss) is reconciled to the Company's income
(loss) before income taxes (in thousands):
10
<PAGE>
Net Sales and Operating Revenues and
Operating Income (Loss by Segment:
<TABLE>
<CAPTION>
Three months ended
September 30
1999 1998
----------------------
<S> <C> <C>
Net sales and operating revenues
Canada $ 79,622 $ 65,922
Australia 28,381 22,497
United Kingdom - (1) 33,425
-------- --------
$108,003 $121,844
======== ========
Operating income (loss)
Canada $ 7,604 $ 6,301
Australia 1,292 1,004
United Kingdom - (1) (2,404)
-------- --------
8,896 4,901
Corporate Headquarters (1,116) (1,491)
-------- --------
Operating income 7,780 3,410
Foreign currency transaction (gains) losses 51 (412)
Interest income (484) (286)
Interest expense 139 1,399
-------- --------
Income before income taxes $ 8,074 $ 2,709
======== ========
</TABLE>
Identifiable assets by Segment
<TABLE>
<CAPTION>
September 30 June 30 Septenber 30
1999 1999 1998
------------ ------- ------------
<S> <C> <C> <C>
Canada $137,313 $136,703 $112,043
Australia 53,068 53,787 44,650
United Kingdom - (1) - (1) 71,163
Corporate assets 9,255 7,825 2,158
-------- -------- --------
$199,636 $198,315 $230,014
======== ======== ========
</TABLE>
(1) The Company's United Kingdom subsidiary was sold during the third quarter
of fiscal year 1999.
11
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
- ---------------------
InterTAN is engaged in the sale of consumer electronics products primarily
through company-operated retail stores and dealer outlets in Canada and
Australia. The Company's retail operations are conducted through two
wholly-owned subsidiaries: InterTAN Australia Ltd., which operates in Australia
under the trade names "Tandy" and "Tandy Electronics"; and InterTAN Canada Ltd.,
which operates in Canada under the trade name "RadioShack". The Company
previously also had retail and dealer outlets in the United Kingdom. These
operations were conducted through a wholly-owned subsidiary, InterTAN U.K.
Limited, which operated under the "Tandy" name. Effective January, 1999, the
Company's subsidiary in the United Kingdom was sold. All of these trade names
are used under license from Tandy Corporation ("Tandy"). In addition, the
Company has entered into an agreement in Canada with Rogers Cantel Inc.
("Cantel") to operate telecommunications stores ("Cantel stores") on its behalf.
At September 30, 1999, 45 Cantel stores were in operation.
As indicated above, in January 1999, the Company sold its United Kingdom
subsidiary. The table below, reflects the results of the Company's operations
for the three months ended September 30, 1999 compared with the reported results
of operations for the same period a year ago as well as those same results of
operations, adjusted to remove the results of the United Kingdom subsidiary:
12
<PAGE>
InterTAN, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
<TABLE>
<CAPTION>
-------------------------------------------------
1999 1998
---------------------------------
As Reported As Adjusted
-------------------------------------------------
<S> <C> <C> <C>
Net sales and operating revenues......................... $ 108,003 $ 121,844 $ 88,419
Other income............................................. 95 79 64
--------------- ---------------- ----------------
108,098 121,923 88,483
--------------- ---------------- ----------------
Operating costs and expenses:
Cost of products sold................................. 63,740 68,876 49,576
Selling, general and administrative
expenses......................................... 35,207 47,847 31,694
Depreciation and amortization......................... 1,371 1,790 1,399
--------------- ---------------- ----------------
100,318 118,513 82,669
--------------- ---------------- ----------------
Operating income......................................... 7,780 3,410 5,814
Foreign currency transaction (gains) losses........... 51 (412) (381)
Interest income....................................... (484) (286) (243)
Interest expense...................................... 139 1,399 1,076
--------------- ---------------- ----------------
Income before income taxes............................... 8,074 2,709 5,362
Provision for income taxes............................... 3,687 3,004 3,004
--------------- ---------------- ----------------
Net income (loss)........................................ $ 4,387 $ (295) $ 2,358
=============== ================ ================
Basic net income (loss) per average common share......... $ 0.22 $ (0.02) $ 0.19
Diluted net income (loss) per average common share....... $ 0.21 $ (0.02) $ 0.17
</TABLE>
Foreign Exchange Effects
Profit and loss accounts, including sales, are translated from local currency
values to U.S. dollars at monthly average exchange rates. During the first
quarter of fiscal year 2000, the U.S. dollar was weaker against the Canadian and
Australian dollars relative to the comparable values during the first quarter of
the prior year. As a result, the same local currency amounts translate into more
U.S. dollars as compared with the prior year. For example, if local currency
sales in Australia in the first quarter of fiscal year 2000 were the same as
those in the first quarter of the prior year, the fiscal year 1999 income
statement would reflect an 8.5% increase in sales when reported in U.S. dollars.
The following table outlines, for the three-month period ending September 30,
1999, the percentage change in the weighted average exchange rates of the
currencies of Canada and Australia as compared to the same three-month period in
the prior year:
13
<PAGE>
-----------------------------------
Canada 2.1%
Australia 8.5%
-----------------------------------
Sales Outlets
The geographic distribution of the Company's sales outlets is summarized in the
following table:
<TABLE>
<CAPTION>
Sept 30 June 30 March 31 Dec 31 Sept 30
1999 1999 1999 1998 1998
<S> <C> <C> <C> <C> <C>
Canada
Company-operated 450 (1) 450 (1) 449 (1) 452 (1) 451 (1)
Dealer 338 330 332 332 331
..........................................................................................................................
788 780 781 784 782
- --------------------------------------------------------------------------------------------------------------------------
Australia
Company-operated 222 222 225 222 217
Dealer 124 124 126 125 126
..........................................................................................................................
346 346 351 347 343
- --------------------------------------------------------------------------------------------------------------------------
United Kingdom (2)
Company-operated - - - 269 270
Dealer - - - 108 107
..........................................................................................................................
- - - 377 377
- --------------------------------------------------------------------------------------------------------------------------
Total
Company-operated 672 672 674 943 938
Dealer 462 454 458 565 564
..........................................................................................................................
1,134 1,126 1,132 1,508 1,502
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) At September 30, 1999, June 30, 1999, March 31, 1999, December 31, 1998
and September 30, 1998, the Company operated 45,45, 45, 46 and 53 stores,
respectively, on behalf of Cantel. Also at the same dates the company
operated 1,1,7,7, and 6 store-in-store formats in certain locations of the
Hudson's Bay Company. Since all of these locations are not company-owned,
they are not included in the above table.
(2) The Company's subsidiary in the United Kingdom was sold during the
three-month period ended March 31, 1999.
14
<PAGE>
Net Sales and Operating Revenues
While net sales and operating revenues ("sales") declined in U.S. dollars during
the first three months of fiscal year 2000 by $13,841,000 over the same period a
year ago, this reduction was more than attributable to the sale of the Company's
former subsidiary in the United Kingdom. When the sales of that entity are
removed from the prior-year period, the combined sales of the Canadian and
Australian segments showed an increase of $19,584,000 or 22.1%. This sales
comparison was significantly affected by foreign currency fluctuations. The
increase, measured at the same exchange rates, was 17.8%.
The table which follows shows, by geographic segment, the percentage changes in
net sales for the quarter ended September 30, 1999, compared to the
corresponding period in the prior year. Changes are presented in both U.S.
dollars and local currencies to show the effects of exchange rate fluctuations.
The change in comparative - stores sales, measured at the same exchange rates,
is also shown:
Net Sales
- ---------
Percentage Increase (Decrease)
------------------------------
Three months ended
September 30, 1999
Local Comparative
Currency U.S.$ Store
Canada 18.3% 20.8% 17.0%
Australia 16.3% 26.2% 12.6%
-------------------------------------------
Combined 17.8% 22.1% 15.7%
===========================================
Consolidated, including
The United Kingdom (12.9)% (11.4)% 15.7 %
===========================================
As has been the case for several quarters, consumers continue to demand products
displaying the latest in technological advances, and, in particular, digital
products. Reflecting this demand, sales of cellular products were very strong in
both countries, as were sales of computers and related accessories. In Canada,
the direct-to-home satellite market continues to provide significant revenue
growth as the Company's stores have become a destination of choice for those
products. At the same time, the strong sales performance in both Canada and
Australia was broadly-based, with sales increases experienced in a wide range of
categories including parts and accessories, audio/video, personal electronics,
batteries and telephones.
A number of initiatives were announced during the quarter which management
believes will have a positive impact on future sales growth. In Canada, the
store-in-store display of Panasonic products is being expanded from 20 to 200
stores in time for the 1999 holiday season. The Company will also open new
concept stores in Canada, featuring a larger footprint than the Company's
traditional stores and a broader and deeper product assortment. About 10-12 of
the Company's other stores will be remodeled to this new format in time for the
holiday season. The Company has also announced alliances with Canada's major
cable TV providers to offer access to high speed cable modem Internet access in
the Company's stores. The Company also
15
<PAGE>
launched its Canadian e-commerce site, www.radioshack.ca, during the first
quarter. In Australia, alliances have been concluded with Sony, Kodak and
Panasonic. Under these alliances, the Company will feature a significant product
assortment highlighted by enhanced graphical store-in-store representation for
those key brands. The Company has also announced a relationship with Telstra, a
major provider of high speed Internet service in Australia, to make access to
its service available in the Company's stores. The Company also introduced its
latest generation of prototypical store in Australia during the first quarter
and will be testing a new store concept similar to that introduced in Canada.
Gross Profit
Gross profit for the first quarter of fiscal year 2000 declined by $8,706,000
from the same quarter last year. This reduction was more than attributable to
the sale of the United Kingdom subsidiary. The Canadian and Australian segments
combined to produce an increase in gross profit, measured in U.S. dollars, of
14.0%. Measured at the same exchange rates, gross profit increased by 9.8%.
The following analysis summarizes the components of the change in gross profit
from the comparable prior year quarter (in thousands):
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------------------------
Higher sales in Canada and Australia $ 7,168
Lower gross margin percentage in Canada and Australia ( 3,209)
Foreign currency rate effects 1,462
...............................................................................................
5,421
Effect of sale of United Kingdom subsidiary (14,126)
...............................................................................................
Reduction in gross profit $ (8,705)
- -----------------------------------------------------------------------------------------------
</TABLE>
The following table illustrates gross profit as a percentage of sales, by
segment area:
Three months ended
September 30
1999 1998
---- ----
Canada 40.6% 43.4%
Australia 42.2% 45.6%
--------------------------------
Combined 41.0% 43.9%
United Kingdom - (1) 42.3%
--------------------------------
Consolidated 41.0% 43.5%
================================
(1) The Company's United Kingdom subsidiary was sold during the third quarter of
fiscal year 1999.
While sales of products such as cellular and computers and, in Canada,
direct-to-home satellite were particularly strong during the first quarter,
these products carry margins that are below the
16
<PAGE>
Company's average. Consequently a change in the sales mix towards these classes
of product will place downward pressure on margins. These products made up 29%
of total sales during the quarter, well up from 24% in the same quarter a year
ago. In addition, an orderly transition toward the Canadian national
brand/private label mix is underway in Australia, putting pressure on margins as
certain private label product is cleared. Management expects all of these
factors to continue and, therefore, expects margins will continue to come under
pressure, at least for the next two quarters. Management also expects the impact
in the second quarter to be smaller since it will be partially offset by the
benefits of the sale of higher margin gift items, including toys. In addition,
"after activation compensation", including residuals and sales-based volume
rebates, are important contributors to help offset some of the gross margin
decline.
Selling, General and Administrative Expenses
The following table provides a breakdown of selling, general and administrative
expense ("SG&A") by major category (in thousands):
SG&A Expense by Category
<TABLE>
<CAPTION>
Three months ended
September 30
1999 1998
Dollars % of Sales Dollars % of Sales
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Payroll $ 15,620 14.5 $ 20,084 16.5
Advertising 4,310 4.0 5,031 4.1
Rent 6,177 5.7 9,508 7.8
Taxes (other than income taxes) 2,284 2.1 3,983 3.3
Telephone and utilities 1,071 1.0 1,533 1.3
Other 5,745 5.3 7,708 6.3
..............................................................................................
$ 35,207 32.6 $ 47,847 39.3
- ----------------------------------------------------------------------------------------------
</TABLE>
The reduction in SG&A expense in U.S. dollars during first quarter of fiscal
year 2000 is more than explained by the sale of the United Kingdom subsidiary,
which had the effect of reducing SG&A expense by $16,153,000. SG&A expense in
U.S. dollars in Canada, Australia and at Corporate Headquarters increased by
$3,513,000. This comparison is influenced by the effect of stronger currencies
in both Canada and Australia. Measured at the same exchange rates, SG&A expense
in these three segments increased by $2,322,000 or 7.1%. This compares to
combined increases of 22.1% and 9.8% in sales and gross profit, respectively, in
Canada and Australia, all measured at the same exchange rates.
17
<PAGE>
The following is a breakdown of the same-exchange-rate increase in SG&A expense
in Canada, Australia and the Corporate Headquarters during the first quarter of
fiscal year 2000 over the same quarter in the prior year (in thousands):
Payroll $ 1,315
Advertising 365
Rent 379
Taxes (other than income taxes) 194
Telephone and utilities 68
Other 367
--------------
$ 2,688
Corporate expenses (366)
--------------
$ 2,322
==============
Payroll increased in both Canada and Australia in support of higher sales.
However, as a percentage of sales the increase in payroll was less than the
increase in gross profit dollars. While gross spending on advertising in both
Canada and Australia increased, the rate of increase was significantly less than
the rate of increase in sales. The gross advertising spend in both countries was
substantially higher than indicated, as significantly more vendor support was
negotiated in both countries than in the same period last year. Rent increased
in both Canada and Australia, both as a consequence of new store
openings/relocations and regular rent reviews. Corporate expenses declined
primarily as a result of costs associated with senior management transition a
year ago.
The reduction in SG&A expense as a percentage of sales during the first quarter
of fiscal year 2000 was due to the rate of sales growth as well as the sale of
the Company's United Kingdom subsidiary. The following table illustrates SG&A as
a percentage of sales, by geographic segment area:
<TABLE>
<CAPTION>
Three months ended
September 30
1999 1998
---- ----
<S> <C> <C>
Canada 29.8% 32.2%
Australia 36.7% 40.2%
----------------- -------------------
Combined (including corporate expenses) 32.6% 35.8%
United Kingdom - 48.3%
================= ===================
32.6% 39.3%
================= ===================
</TABLE>
18
<PAGE>
Foreign Currency Transaction Gains / Losses
Foreign currency transaction losses were $51,000 during the first quarter of
fiscal year 2000 compared with gains of $412,000 for the comparable quarter last
year.
Interest income and expense
Interest income increased during the three months ended September 30, 1999 by
$198,000 over the same quarter last year, reflecting the Company's stronger cash
position. During the same two periods, interest expense declined by $1,260,000.
Interest expense during the current quarter consisted entirely of amortization
of loan origination fees and standby charges, as the Company had no borrowings
during the quarter. This reduction in interest expense over the prior-year
quarter was attributable to the conversion of the Company's 9% subordinated
convertible debentures (the "Debentures") during the fourth quarter of fiscal
year 1999. The sale of the United Kingdom subsidiary was also a factor as it
continuously required cash infusions to fund its operations. For the same
reasons, management expects that reductions in interest expense will continue
over at least the next two quarters.
Provision for Income Taxes
The provision for income taxes increased during the first quarter of fiscal year
2000 by $683,000 over the same period a year ago, reflecting higher profits in
both the Canadian and Australian subsidiaries. When the loss of the United
Kingdom subsidiary is removed from the prior-period base, an effective tax rate
of 56% is indicated, compared with approximately 45.7% in the current quarter.
This reduction results from the elimination of interest on the Debentures, for
which no tax benefit was recognized.
Financial Condition
-------------------
Most balance sheet accounts are translated from their values in local currency
to U.S. dollars at the respective month end rates. The table below outlines the
percentage change, to September 30, 1999, in exchange rates as measured against
the U.S. dollar:
Foreign Exchange Rate Fluctuations
----------------------------------
% Increase % Increase (Decrease)
from September 30, 1998 from June 30, 1999
----------------------- ------------------
Canada 4.4 0.3
Australia 9.9 (2.3)
Inventories
The reduction in inventories at September 30, 1999 from September 30, 1998 is
more than attributable to the sale of the United Kingdom subsidiary. During the
same period, measured at the same exchange rates, inventories in Canada and
Australia increased by approximately 6%, significantly less than the
quarter-on-quarter increase in sales. The increase in inventories from June 30,
1999 to September 30, 1999 is due in part to the seasonal build-up of
inventories, as the Company prepares for higher sales during the Christmas
period, including the effects of an expanded product assortment.
19
<PAGE>
Accounts Receivable
The increase in accounts receivable at September 30, 1999 over September 30,
1998 is primarily attributable to increases in sales generally and, in
particular, sales of cellular, direct-to-home satellite and similar products
involving activation income from vendors. The effects of these increases were
partially offset by the impact of the sale of the United Kingdom subsidiary. The
increase from June 30, 1999 results from higher sales and the granting of
extended credit terms to dealers to finance purchases for the Christmas selling
season.
Income Taxes Payable
The increase in income taxes payable from September 30, 1998 to September 30,
1999 results from increased profits in both the Canadian and Australian
subsidiaries, as well as a special provision recorded during the third quarter
of fiscal year 1999 relating to the settlement of a dispute with the Canadian
tax authorities regarding the 1990 to 1993 taxation years. While the amount in
dispute has been agreed, the Company has not yet been reassessed and,
accordingly, this amount has not been paid. Management estimates that payment
relating to these issues, approximately $14,000,000 will be made in the second
and third quarters.
The Company's remaining dispute with the Canadian tax authorities relates to the
1987 to 1989 taxation years. See Note 4 to the Company's Consolidated Financial
Statements, which is incorporated herein by reference. The Company believes it
has meritorious arguments in support of its position on the underlying issues
relating to this matter and, accordingly, no additional provision has been
recorded, pending the outcome of the appeal process. Depending on the ultimate
outcome of this matter, the Company could have an additional liability of $0 to
$11,700,000. It is not possible for management to make any reasonable
determination of when any of these issues will ultimately be resolved. An audit
of the Company's Canadian subsidiary's income tax returns by Revenue Canada for
the 1994 to 1996 taxation years is in process.
An audit of the Company's United States income tax returns by the Internal
Revenue Service (the "IRS") is also in process. This audit is nearing completion
and the Company anticipates hearing from the IRS in the near future regarding
any issues or concerns resulting from the audit.
Liquidity and Capital Resources
-------------------------------
Cash flows from operating activities during the three-month period ended
September 30, 1999 consumed $19,451,000 in cash, compared with $21,515,000 in
cash during the comparable quarter last year. The seasonal build up of accounts
receivable consumed $7,320,000 in cash compared with $4,703,000 in the first
quarter of fiscal year 1999, resulting from higher sales in Canada and
Australia. Higher inventory levels in Canada and Australia in response to higher
sales and in anticipation of the Christmas selling season consumed $14,480,000
and $20,173,000 in cash during the three-month periods ended September 30, 1999
and 1998, respectively. The increase in the prior year was higher as a result of
the build-up of inventories in the United Kingdom subsidiary. The increases in
inventory levels were partially offset by increases in the level of accounts
payable of $5,644,000 and $7,918,000 during the first quarters of fiscal years
2000 and 1999, respectively. Reductions in the level of income taxes payable
consumed $8,024,000 during the three-month period ended September 30, 1999
compared with $3,634,000 during the comparable prior year quarter. In each
period the payment of the final balance of Canadian tax for the prior year as
well as Canadian and Australian tax instalments for the current year exceeded
the current year's provision for tax.
20
<PAGE>
Cash flow from investing activities consumed $2,050,000 and $1,401,000 in cash
during the three months ended September 30, 1999, and 1998 respectively, as the
effects of routine additions to property and equipment were partially offset by
the proceeds from the sale of property and equipment and from other investing
activities.
During the three-month period ended September 30, 1999, cash flow from financing
activities in the form of proceeds from the issuance of stock to employee plans
and from the exercise of stock options, in the aggregate generated $795,000 in
cash. In the comparable prior-year quarter, financing activities generated
$7,857,000 in cash, primarily attributable to short-term borrowings to finance
the operations of the United Kingdom subsidiary.
The Company's principal sources of liquidity during fiscal year 2000 will be its
cash and short-term investments, its cash flow from operations and its banking
facilities.
In December, 1997, the Company entered into a three-year revolving credit
facility with a syndicate of three lenders (the "Syndicated Loan Agreement") in
an amount not to exceed $75,000,000 in the aggregate. With the sale of InterTAN
U.K. Limited in January, 1999, the facility has been reduced to $50,000,000. The
amount of credit actually available at any particular time is dependent on a
variety of factors, including the level of eligible inventories and accounts
receivable of InterTAN Canada Ltd. (the "Borrower"). The amount of available
credit is then reduced by the amount of trade accounts payable of the Borrower
then outstanding as well as certain other reserves. In November, 1999, the
Syndicated Loan Agreement was amended as follows: the facility is now
denominated in Canadian dollars in an amount not to exceed C$67,000,000
(approximately $45,640,000 at September 30, 1999 rates of exchange); borrowings
under the Syndicated Loan Agreement by InterTAN Canada Ltd. may now be directed
to InterTAN, Inc.; the interest rate under the facility has been changed to
Canadian prime, London Inter Bank Offered Rate plus 1.5% or Bankers Acceptance
Rate plus 1.5% as elected by the Company at the time of borrowing; and, subject
to certain financial covenants, the payment of dividends is now permitted.
The Syndicated Loan Agreement is used primarily to provide letters of credit in
support of purchase orders and, from time to time, to finance inventory
purchases. At September 30, 1999, there were no borrowings against the
Syndicated Loan Agreement and $546,000 was committed in support of letters of
credit. There was $45,301,000 of credit available for use at September 30, 1999.
The Company's Merchandise Agreement with Tandy permits the Company to support
purchase orders with a surety bond or bonds as well as letters of credit. The
Company has entered into an agreement with a major insurer to provide surety
bond coverage (the "Bond") in an amount not to exceed $18,000,000. Use of the
Bond gives the Company greater flexibility in placing orders with Far Eastern
suppliers by releasing a portion of the credit available under the Syndicated
Loan Agreement for other purposes.
The Company's Australian subsidiaries, InterTAN Australia Ltd. and Technotron
Sales Corp. Pty, Ltd., have entered into a credit agreement with an Australian
bank (the "Australian Facility"). This agreement established a credit facility
in the amount of A$12,000,000 ($7,825,000 at September 30, 1999 exchange rates).
The Australian Facility has no fixed term and may be terminated at any time upon
five days prior written notice by the lender. All or any part of the facility
may be used to provide letters of credit in support of purchase orders. A
maximum amount of A$5,000,000 ($3,260,000 at September 30, 1999 exchange rates)
may be used in support of short-term borrowings. At September 30, 1999, there
were no borrowings outstanding against the Australian Facility, nor was any
amount committed in support of letters of credit.
21
<PAGE>
The Company's primary uses of liquidity during fiscal year 2000 will include the
funding of capital expenditures, the build-up of inventories for the 1999
Christmas selling season and payments in settlement of tax reassessments. The
Company anticipates that capital additions during the remainder of fiscal year
2000 will approximate $9,000,000, mainly related to store expansion, remodeling
and upgrading. Management does not believe that any short-term borrowings will
be needed to finance the seasonal build-up of inventories. In addition,
management expects to receive additional reassessments of approximately
$14,000,000 during fiscal year 2000 relating to the settlement of its dispute
with Revenue Canada in respect of the 1990-1993 taxation years. See "Income
Taxes".
Management believes that the Company's cash and short-term investments on hand
and its cash flow from operations combined with the Syndicated Loan Agreement,
the Australian Facility and the Bond will provide the Company with sufficient
liquidity to meet its planned requirements through fiscal year 2000, including
the tax reassessments relating to the 1990-1993 taxation years.
Year 2000 Issues
----------------
Management recognizes that certain of the Company's information systems require
further modification or replacement to make them compliant with the Year 2000.
The Company's critical systems include the following:
. Its store operating systems;
. Its so-called "back-end" merchandising and inventory systems, including
purchasing, receiving and warehousing, perpetual inventories and store
replenishment; and,
. Its primary accounting systems, including general ledger, accounts
receivable, accounts payable and payroll.
The Company has employed a variety of internal and external resources to assess
and make changes necessitated by Year 2000 issues to its many different systems
and equipment. Many of these changes were contemplated in any event as upgrades
or replacement of outdated systems and hardware.
In Canada, necessary modifications and testing have been done to substantially
all critical systems except for certain upgrading of the payroll system. Testing
of a new payroll system is scheduled to be completed by November 30, 1999 and a
representative of the software supplier will be on site for processing the first
payroll in year 2000.
In Australia, the Company is in the process of implementing a fully integrated,
enterprise-wide retail solution supplied by an outside vendor to replace its
existing back-end inventory and accounting systems. This new system is certified
as being Year 2000 compliant. However, since determining that this system will
not be completed by calendar year-end, the Company is simultaneously remediating
existing systems to ensure year 2000 compliance. It is anticipated that
remediation and testing of this system will be completed by November 15, 1999.
After this project has been completed, full attention will resume on the
enterprise-wide solution. All other critical systems in Australia have been
modified and tested.
The Company's current projection is that Year 2000 compliance costs will not
exceed $1,500,000.
22
<PAGE>
In the most reasonably likely worst case scenario, the Company's store operating
and back-end inventory management systems could fail. The consequence of such
failure could include the inability to electronically record sales transactions
in the Company's stores and a breakdown in the supply chain. This would
necessitate reverting to a number of manual systems for recording sales,
ordering product and replenishing the Company's stores. Such an occurrence would
likely result in a loss of revenue; it is not possible to quantify the possible
range of such loss. A formal contingency plan to deal with this scenario, which
relies heavily on processing transactions manually, was completed in October,
1999.
The Company has communicated with its suppliers and other organizations with
which it does business to coordinate Year 2000 issues and to ensure the
continuity of supply of product and services. While the Company is not aware
that any of its major vendors will experience difficulties in supplying product,
in a most reasonably likely worst case scenario, one or more significant
suppliers could be unable to continue to adequately supply the Company after
1999. With the exception of wireless products, the Company reasonably believes
adequate alternative sources of supply are available. However, in the event that
a disruption in supply were to occur, it is not practical for management to
estimate the range of financial loss, if any, which could result from the
negative effect of such disruption in supply.
The Company's warehouse and distribution systems are centralized in a single
location in both Canada and Australia. In a most reasonably likely worst case
scenario, service from one or both of these locations could be disrupted, caused
by a number of factors beyond the Company's control including, for example, the
failure of local power suppliers to supply electricity. Such a disruption could
result in out-of-stock situations of varying severity at some or all of the
Company's retail locations. While the Company believes it routinely maintains
inventories in its stores at a level sufficient to meet any short-term supply
disruption, a formal contingency plan to deal with this risk was completed in
October, 1999. The primary focus of this plan is to ensure that the stores have
an adequate supply of inventory to support January sales. Items featured in the
Company's January promotions as well as additional supplies of top moving items,
including batteries, will be shipped to the stores early, to ensure they are on
hand by December 31. It is not practical for management to reasonably estimate
the range of financial loss, if any, which could result from a disruption in the
supply of product to the Company's stores.
The Company has reviewed its obligations, if any, arising from the sale of
warranted product which proves not to be Year 2000 compliant in one or more
aspects. While it is not possible at this time to reasonably estimate the range
of loss, if any, which could arise from such obligation, management does not
believe that issues involving non-compliant warranted product will be material.
Such issues, if any, will be dealt with on an individual basis.
Management is closely monitoring the Company's advancement towards final Year
2000 preparations and reports on such progress regularly to the Company's Board
of Directors. Contingency plans are in place to address the possible failure of
critical systems as well as many other systems which, although not critical,
nevertheless play an important role in the Company's day to day business. In
developing these plans, an attempt was made to balance potential risk against
contingent remedial cost. Although there can be no assurance that the Company
will be able to complete all of the remediation necessary, critical or
otherwise, within the required time frame, or that the Company will be able to
identify all Year 2000 issues before potential problems manifest themselves, in
management's opinion, the Company is taking adequate action to address Year 2000
issues and does not expect the financial impact of the Year 2000 issue to be
material to the Company's consolidated financial position, results of operations
or cash flows.
23
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
The various matters discussed in Notes 4 and 7 to the Company's
Consolidated Financial Statements on page 8 and 9 of this Form 10-Q are
incorporated herein by reference.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were put to a vote of the Company's stockholders during
the three-month period ended September 30, 1999.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits Required by Item 601 of Regulation S-K:
Exhibit No. Description
3(a) Restated Certificate of Incorporation (Filed as Exhibit
3(a) to InterTAN's Registration Statement on Form 10
and incorporated herein by reference).
3(a)(i) Certificate of Amendment of Restated Certificate of
Incorporation (Filed as Exhibit 3(a)(i) to InterTAN's
Annual Report on Form 10-K for fiscal year ended June
30, 1995 and incorporated herein by reference).
3(a)(ii) Certificate of Designation, Preferences and Rights of
Series A Junior Participating Preferred Stock (Filed as
Exhibit 3(a)(i) to InterTAN's Registration Statement on
Form 10 and incorporated herein by reference).
3(b) Bylaws (Filed on Exhibit 3(b) to InterTAN's
Registration Statement on Form 10 and incorporated
herein by reference).
3(b)(i) Amendments to Bylaws through August 3, 1990 (Filed as
Exhibit 3(b)(i) to InterTAN's Annual Report on Form 10-
K for fiscal year ended June 30, 1990 and incorporated
herein by reference).
24
<PAGE>
3(b)(ii) Amendments to Bylaws through May 15, 1995 (Filed as
Exhibit 3(b)(ii) to InterTAN's Annual Report on Form
10-K for fiscal year ended June 30, 1995 and
incorporated herein by reference).
3(b)(iii) Amended and Restated Bylaws (filed as Exhibit 3(b)(iii)
to InterTAN's Annual Report on Form 10-K for fiscal
year ended June 30, 1996 and incorporated herein by
reference).
4(a) Articles Fifth and Tenth of the Restated Certificate of
Incorporation (included in Exhibit 3(a)).
4(b) Amended and Restated Rights Agreement between InterTAN
Inc. and The First National Bank of Boston (Filed as
Exhibit 4(b) to InterTAN's report on Form 8-K dated
September 25, 1989 and incorporated herein by
reference).
4(c) Rights Agreement between InterTAN, Inc. and Bank
Boston, NA (filed as Exhibit 4 to the company's Form 8-
A filed on September 17, 1999 and incorporated herein
by reference)
*27 Article 5, Financial Data Schedule.
- ---------------------
* Filed herewith
b) Reports on Form 8-K:
A report on Form 8-K was filed on September 17, 1999 to report
that on September 8, 1999 the Board of Directors authorized and declared
a dividend of one Right per common share payable on September 20, to the
shareholders of record on that date. See "Exhibit 4(c) to this Quarterly
Report on Form 10-Q.
25
<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.
InterTAN, Inc.
(Registrant)
Date: November 12, 1999 By: /S/James G. Gingerich
------------------------------
James G. Gingerich
Executive Vice-President and
Chief Financial Officer
(Authorized Officer)
By: /S/Douglas C. Saunders
------------------------------
Douglas C. Saunders
Vice President and Corporate
Controller (Principal Accounting
Officer)
26
<PAGE>
Index to Exhibits
InterTAN, Inc. Form 10-Q
Exhibit No. Description
- ----------- -----------
3(a) Restated Certificate of Incorporation (Filed as Exhibit
3(a) to InterTAN's Registration Statement on Form 10 and
incorporated herein by reference).
3(a)(i) Certificate of Amendment of Restated Certificate of
Incorporation (Filed as Exhibit 3(a)(i) to InterTAN's
Annual Report on Form 10K for fiscal year ended June 30,
1995 and incorporated herein by reference).
3(a)(ii) Certificate of Designation, Preferences and Rights of
Series A Junior Participating Preferred Stock (Filed as
Exhibit 3(a)(i) to InterTAN's Registration Statement on
Form 10 and incorporated herein by reference).
3(b) Bylaws (Filed as Exhibit 3(b) to InterTAN's Registration
Statement on Form 10 and incorporated herein by reference).
3(b)(i) Amendments to Bylaws through August 3, 1990 (Filed as
Exhibit 3(b)(i) to InterTAN's Annual Report on Form 10K for
fiscal year ended June 30, 1990 and incorporated herein by
reference).
3(b)(ii) Amendments to Bylaws through May 15, 1995 (Filed as Exhibit
3(b)(ii) to InterTAN's Annual Report on Form 10K for fiscal
year ended June 30, 1995 and incorporated herein by
reference).
3(b)(iii) Amended and Restated Bylaws (Filed as Exhibit 3(b)(iii) to
InterTAN's Annual Report on Form 10K for fiscal year ended
June 30, 1996 and incorporated herein by reference).
4(a) Articles Fifth and Tenth of the Restated Certificate of
Incorporation (included in Exhibit 3(a))
4(b) Amended and Restated Rights Agreement between InterTAN,
Inc. and The First National Bank of Boston (Filed as
Exhibit 4(b) to InterTAN's Report on Form 8-K dated
September 25, 1989 and incorporated herein by reference).
4(c) Rights Agreement between InterTAN, Inc. and Bank Boston, NA
(filed as Exhibit 4 to the company's Form 8-A filed on
September 17, 1999 and incorporated herein by reference)
*27 Article 5, Financial Data Schedule.
*Filed herewith
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 26,420
<SECURITIES> 0
<RECEIVABLES> 17,228
<ALLOWANCES> 0
<INVENTORY> 126,036
<CURRENT-ASSETS> 174,584
<PP&E> 20,830
<DEPRECIATION> 0
<TOTAL-ASSETS> 199,636
<CURRENT-LIABILITIES> 73,119
<BONDS> 0
0
0
<COMMON> 19,949
<OTHER-SE> 95,822
<TOTAL-LIABILITY-AND-EQUITY> 199,636
<SALES> 108,003
<TOTAL-REVENUES> 108,098
<CGS> 63,740
<TOTAL-COSTS> 63,740
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (345)
<INCOME-PRETAX> 8,074
<INCOME-TAX> 3,687
<INCOME-CONTINUING> 4,387
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,387
<EPS-BASIC> 0,22
<EPS-DILUTED> 0,21
</TABLE>
