UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
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 No. 1-5571
TANDY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 75-1047710
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1800 One Tandy Center, Fort Worth, Texas 76102
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(817) 390-3700
N/A
(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 (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____
The number of shares outstanding of the issuer's Common
Stock, $1 par value, on April 30, 1994 was 63,441,368.
Index to Exhibits is on Sequential Page No. 11.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
TANDY CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
<CAPTIONS>
(In thousands, except per share amounts)
Three Months Ended
March 31,
_______________________________
1994 1993
______________ ___________
<S> <C> <C>
Net sales and operating revenues $ 992,135 $ 864,712
Cost of products sold 584,781 474,992
_________ _________
Gross profit 407,354 389,720
_________ _________
Expenses:
Selling, general and administrative 331,920 313,190
Depreciation and amortization 20,744 19,965
Net interest income (12,994) (7,488)
_________ _________
339,670 325,667
_________ _________
Income before income taxes, discontinued
operations and cumulative effective of
change in accounting principle 67,684 64,053
Provision for income taxes 25,889 23,380
_________ _________
Income from continuing operations 41,795 40,673
Loss from discontinued operations:
Operating loss, net of tax -- (18,542)
_________ _________
Income before cumulative effect of change
in accounting principle 41,795 22,131
Cumulative effect on prior years of change
in accounting principle -- 13,014
_________ _________
Net income $ 41,795 $ 35,145
_________ _________
_________ _________
Net income (loss) per average common and
common equivalent share:
Income from continuing operations $ 0.51 $ 0.50
Loss from discontinued operations -- (0.24)
_________ _________
Income before cumulative effect of change
in accounting principle 0.51 0.26
Cumulative effect on prior years of change
in accounting principle -- 0.17
_________ _________
Net income per average common and common
equivalent share $ 0.51 $ 0.43
_________ _________
_________ _________
Dividends declared per common share $ 0.15 $ 0.15
_________ _________
_________ _________
Average common and common equivalent shares
outstanding 78,986 78,265
_________ _________
_________ _________
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
TANDY CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
<CAPTIONS>
(In thousands) March 31, Dec. 31, March 31,
1994 1993 1993
___________ __________ __________
<S> <C> <C> <C>
Assets
Current assets:
Cash and short-term investments $ 369,710 $ 213,235 $ 163,762
Accounts and notes receivable, less
allowance for doubtful accounts 512,468 582,443 658,987
Inventories, at lower of cost or market 1,171,587 1,276,302 1,405,412
Other current assets 76,228 88,005 162,031
___________ __________ __________
Total current assets 2,129,993 2,159,985 2,390,192
Property and equipment, at cost,
less accumulated depreciation 463,334 463,738 546,483
Investment in discontinued operations 30,181 405,664 --
Other assets, net of accumulated amortization 191,477 189,712 296,440
___________ __________ __________
$ 2,814,985 $ 3,219,099 $ 3,233,115
___________ __________ __________
___________ __________ __________
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable $ 90,700 $ 346,164 $ 337,984
Subordinated debentures, net of
unamortized bond discount 32,085 31,739 --
Current portion of TESOP guarantee 10,050 10,050 10,700
Accounts payable 217,578 279,942 219,501
Accrued expenses 279,406 349,057 341,793
Income taxes payable 39,606 14,690 11,755
___________ __________ __________
Total current liabilities 669,425 1,031,642 921,733
___________ __________ __________
Notes payable, due after one year 82,713 127,708 211,578
Guarantee of TESOP indebtedness 58,930 58,930 68,980
Subordinated debentures, net of
unamortized bond discount -- -- 30,860
Deferred income taxes -- -- 53,984
Other non-current liabilities 48,032 50,069 39,547
___________ __________ __________
Total other liabilities 189,675 236,707 404,949
___________ __________ __________
Stockholders' equity:
Preferred stock, no par value, 1,000,000
shares authorized
Series A junior participating, 100,000
shares authorized and none issued -- -- --
Series B convertible, 100,000 shares
authorized and issued 429,982 429,982 429,982
Series C PERCS, 150,000 shares authorized
and issued 100,000 100,000 100,000
Common stock, $1 par value, 250,000,000 shares
authorized with 85,645,000 shares issued 85,645 85,645 85,645
Additional paid-in capital 89,340 85,752 84,336
Retained earnings 2,051,111 2,028,041 2,022,579
Foreign currency translation effects 1,389 1,003 (16,194)
Stock held in treasury, at cost 22,135,000,
21,689,000 and 22,258,000 common shares,
respectively (732,073) (707,331) (719,789)
Unearned deferred compensation related to TESOP (69,509) (72,342) (80,126)
___________ __________ __________
Total stockholders' equity 1,955,885 1,950,750 1,906,433
Commitments and contingent liabilities
___________ __________ __________
$ 2,814,985 $ 3,219,099 $ 3,233,115
___________ __________ __________
___________ __________ __________
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
TANDY CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
<CAPTION>
Three Months Ended
March 31,
_______________________________
(In thousands) 1994 1993
_____________ _____________
<S> <C> <C>
Cash flows from operating activities:
Net Income $ 41,795 $ 35,145
Adjustments to reconcile net income to
net cash provided by operating activities:
Cumulative effect on prior years of
change in accounting principle -- (13,014)
Depreciation and amortization 20,744 26,583
Provision for credit losses and bad debts 5,192 12,089
Other items 379 3,782
Changes in operating assets and liabilities:
Receivables 106,646 124,982
Inventories 104,714 66,953
Other current assets 12,230 (19)
Accounts payable, accrued expenses and
income taxes (115,739) (107,356)
_____________ _____________
Net cash provided by operating activities 175,961 149,145
_____________ _____________
Investing activities:
Additions to property, plant and equipment,
net of retirements (21,223) (24,644)
Proceeds from sale of divested operations 351,250 --
Other investing activities 1,949 (12,068)
_____________ _____________
Net cash provided (used) by investing
activities 331,976 (36,712)
_____________ _____________
Financing activities:
Purchase of treasury stock (33,791) (9,405)
Sale of treasury stock to employee
stock purchase program 13,978 14,226
Dividends paid (17,618) (17,507)
Changes in short-term borrowings, net (272,524) (40,045)
Changes in long-term borrowings, net (41,507) (8,566)
_____________ _____________
Net cash used by financing activities (351,462) (61,297)
_____________ _____________
Increase in cash and short-term investments 156,475 51,136
Cash and short-term investments, beginning
of period 213,235 112,626
_____________ _____________
Cash and short-term investments, end
of period $ 369,710 $ 163,762
_____________ _____________
_____________ _____________
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-BASIS OF FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements
have been prepared in accordance with the instructions to
Form 10-Q and do not include all of the information and
footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion
of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the
three months ended March 31, 1994 are not necessarily
indicative of the results that may be expected for the year
ending December 31, 1994. For further information, refer to
the consolidated financial statements and management's
discussion and analysis of results of operations and
financial condition included in Tandy Corporation's ("Tandy"
or the "Company") Form 10-K for the year ended December 31,
1993.
NOTE 2-RELATIONS WITH INTERTAN
As of March 31, 1994, InterTAN owed Tandy an aggregate of
$56,029,000. The current portion of the InterTAN obligation
approximates $4,168,000 and the non-current portion
approximates $51,861,000. The Series D note payable from
InterTAN to Tandy was paid in full during the quarter. The
note approximated $7,500,000 at December 31, 1993 and
represented invoices for shipped goods. Through March 31,
1994, Tandy recognized accretion of discount of $851,000 on
the note receivable from InterTAN resulting from the purchase
of the bank debt at a discounted price. Accretion of the
discount is based on the effective interest rate method and
is expected to approximate $3,856,000 in 1994. During the
quarter ended March 31, 1994, Tandy recognized approximately
$10,913,000 of sales to InterTAN and interest income of
$1,974,000 (including the accretion of discount). Sales to
InterTAN for the March 31, 1993 quarter approximated
$14,244,000. Open purchase orders at March 31, 1994
approximated $43,359,000, which included goods and
commission. The merchandise will be paid for through letters
of credit and only the commission will be billed directly to
InterTAN.
A&A will continue as the exclusive purchasing agent for
InterTAN in the Far East on a commission basis. Commencing
in March 1994, only the purchasing agent commission and sales
by Tandy manufacturing plants to InterTAN were recorded as
sales. InterTAN purchases from third parties through A&A are
no longer recorded as sales reflecting the arrangement under
the new merchandise agreement. Accordingly, management
expects that reported sales by Tandy to InterTAN in 1994 will
be considerably lower than in prior years, however, the
earned income relating thereto will not be materially
different.
NOTE 3-DISCONTINUED OPERATIONS
On June 25, 1993, the Board of Directors of Tandy adopted a
formal plan of divestiture under which it would sell its
computer manufacturing and marketing businesses, the
O'Sullivan Industries, Inc. ("O'Sullivan") ready-to-assemble
furniture manufacturing and related marketing business, the
Memtek Products division and the Lika printed circuit board
business. As of March 31, 1994, all manufacturing operations
except Lika have been divested. The Lika divestiture is
expected to close by June 1994.
O'Sullivan Industries. On January 27, 1994, the Company
announced that it had reached an agreement with the
underwriters to sell common stock of O'Sullivan Industries
Holdings, Inc., the parent company of O'Sullivan, to the
public at $22 per share. The net proceeds realized by Tandy
in the initial public offering, together with the $40,000,000
cash dividend from O'Sullivan, approximated $350,000,000.
The initial public offering closed on February 2, 1994.
Tandy has accrued approximately $1,262,000 during the quarter
ended March 31, 1994, pursuant to the Tax Sharing and Tax
Benefit Reimbursement Agreement between Tandy and O'Sullivan
Industries Holdings, Inc., in which the Company will receive
payments from O'Sullivan resulting from the increased tax
basis of O'Sullivan's assets, thereby increasing tax
deductions and accordingly, reducing income taxes payable by
O'Sullivan. The amount to be received by the Company each
year will approximate the federal tax benefit expected to be
realized with respect to the increased tax basis. These
payments will be made over a 15-year time period. The
Company will recognize these payments as additional sale
proceeds and gain in the year in which the payments become
due and payable to the Company.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
Net Sales and Operating Revenues
Net sales and operating revenues for the three months ended
March 31 were:
% Increase
(In thousands) 1994 1993 (Decrease)
_______________________________
Radio Shack................ $602,719 $585,647 3 %
Tandy Name Brand........... 100,847 127,655 * (21)
Incredible Universe........ 50,993 21,864 133
Computer City.............. 211,787 104,959 102
________ ________
966,346 840,125 15
Import/Export and
Other Sales.............. 25,789 24,587 5
________ ________
$992,135 $864,712 15 %
________ ________
________ ________
* Includes 110 McDuff/VideoConcepts stores closed during this
quarter
Sales of retail operations increased in virtually all areas
except Tandy Name Brand, which closed 110 stores in the March
quarter of 1993. Excluding the closed stores, retail
operations had a 19% sales gain for the quarter. The opening
of new Incredible Universe and Computer City stores in the
latter part of 1993 and the first quarter of 1994 boosted
sales for those divisions. Since March 31, 1993, 22 new
Computer City stores and two new Incredible Universe stores
have opened. On a same-store basis, U.S. retail sales
increased 5% overall for the quarter with February being the
best month with 8% comparable store sales gains. January and
February sales were affected by poor weather conditions,
especially in the Northeast. Sales trends strengthened from
the March 1993 quarter to the March 1994 quarter for all
retail units. Incredible Universe had strong comparable
store sales gains for the quarter.
Gross Profit
Gross profit as a percent of net sales declined from 45.1%
during the three months ended March 31, 1993 to 41.1% for the
corresponding 1994 period. This decrease is primarily a
result of the additional sales of Computer City and
Incredible Universe, which operate on lower margins. In the
first quarter of fiscal 1994, Computer City and Incredible
Universe accounted for approximately 26% of consolidated
sales compared to 15% in the first quarter of 1993.
Additionally, margins have decreased slightly at Radio Shack
due principally to lower margins on computer sales when
compared with the three-month period in 1993.
Selling, General and Administrative Expenses
Selling, general and administrative expenses as a percent of
sales and operating revenues declined 2.7 percentage points
from the same period in the prior year. Most expense
categories were lower as a percent of sales, including
advertising, rent, payroll and bad debt expense. The
improved quality of credit card receivables resulted in a
reduction of bad debt expense of $6,861,000 in comparison
with the first quarter of 1993. The lower advertising, rent
and payroll costs as a percent of sales reflect the lower
costs associated with the Company's newer retail formats.
The Company expects SG&A expenses as a percent of sales to
continue to decrease as more Computer City and Incredible
Universe stores are opened.
Net Interest Income
Interest income and expense for the three months ended
March 31 were:
(In thousands) 1994 1993
_________ _________
Interest income........... $22,987 $16,699
Interest expense.......... (9,993) (9,211)
_________ _________
Net interest income....... $12,994 $ 7,488
_________ _________
_________ _________
Proceeds from divestitures resulted in increased short-term
investments and decreased short-term borrowings and thus
impacted interest income and interest expense. The increase
in interest income is also due in part to interest earned on
notes receivable from AST Research Inc. and InterTAN. (See
Note 2 - "Relations with InterTAN" for further information.)
Tandy also received $4,455,000 in interest income from the
IRS during the quarter. Interest income earned by Tandy
Credit Corporation decreased $2,547,000 from the March 31,
1993 quarter due to lower outstanding credit card receivable
balances and increased use of credit promotions. A
$2,000,000 accrual in interest expense to the IRS was
recorded in the March 31, 1994 quarter; excluding this
accrual, interest expense was 13% lower than in the March 31,
1993 quarter primarily due to lower debt levels.
Provision for Income Taxes
Provision for income taxes for each quarterly period is based
on the estimate of the annual effective tax rate for the
fiscal year as evaluated at the end of each quarter. The
effective tax rates for the first quarters of 1994 and 1993
were 38.25% and 36.50%, respectively. The increase is
primarily due to federal tax rate legislation enacted during
1993.
Earnings Per Share
Earnings per share is calculated by dividing net income less
Series B preferred stock dividends paid or payable by average
common or common share equivalents outstanding during the
respective periods. For the three months ended March 31,
1994 and 1993, preferred dividends amounted to $1,806,000 and
$1,832,000, respectively. Earnings per share for continuing
operations for the three months ended March 31, 1994
increased slightly from that for the three months ended March
31, 1993. However, the Company recorded operating losses
from discontinued operations of $18,542,000 or $0.24 per
share for the first quarter of fiscal 1993, partially offset
by a benefit of $13,014,000, or $0.17 per share, for
cumulative effect on prior years of change in accounting
principle.
Cash Flow and Financial Condition
Tandy's cash flow and financial condition, in management's
opinion, remains strong. Cash flow from operating activities
increased in the three-month period ended March 31, 1994 as
compared with the same period of the prior year. This
increase relates primarily to larger decreases in inventories
in 1994 as compared to 1993. Cash provided by investing
activities for this period included cash received from the
O'Sullivan IPO. Property, plant and equipment additions were
reduced due to the divestiture of manufacturing operations.
Cash provided by operations should be sufficient to fund
current operations.
Cash and short-term investments at March 31, 1994 were
$369,710,000 as compared to $163,762,000 at March 31, 1993.
Total debt as a percentage of total capitalization was 12.3%
at March 31, 1994, compared to 22.8% at December 31, 1993 and
25.7% at March 31, 1993. Total debt has been reduced as
proceeds from divested manufacturing operations and cash
flows from operating activities have been used to pay off
debt. Long-term debt as a percentage of total capitalization
was 6.4% at March 31, 1994 compared to 7.4% at December 31,
1993 and 12.1% at March 31, 1993. The Company's issue of 10%
subordinated debentures due June 30, 1994 was called by the
Company on February 23, 1994 for redemption on April 1, 1994.
The redemption was at 100% of face value or $32,431,000.
Inventory
Compared to March 31, 1993, total inventories at March 31,
1994 have decreased $233,825,000 or 16.6%, primarily due to
the disposition of assets related to the divestiture of
manufacturing operations and additionally due to reductions
in Radio Shack inventories. Reductions in Radio Shack
inventories were partially offset by increased inventory for
new Computer City and Incredible Universe stores. Inventory
levels for Radio Shack, Tandy Name Brand and Computer City
have been reduced from the levels maintained at December 31,
1993. These reductions are due to seasonal fluctuations in
inventory levels.
Discontinued Operations
On June 25, 1993, the Board of Directors of Tandy adopted a
formal plan of divestiture under which it would sell its
computer manufacturing and marketing businesses, the
O'Sullivan Industries, Inc. ("O'Sullivan") ready-to-assemble
furniture manufacturing and related marketing business, the
Memtek Products division and the Lika printed circuit board
business. As of March 31, 1994, all manufacturing operations
except Lika have been divested. The Lika divestiture is
expected to close by June 1994.
O'Sullivan Industries. On January 27, 1994, the Company
announced that it had reached an agreement with the
underwriters to sell common stock of O'Sullivan Industries
Holdings, Inc., the parent company of O'Sullivan, to the
public at $22 per share. The net proceeds realized by Tandy
in the initial public offering, together with the $40,000,000
cash dividend from O'Sullivan, approximated $350,000,000.
The initial public offering closed on February 2, 1994.
Tandy has accrued approximately $1,262,000 during the quarter
ended March 31, 1994, pursuant to the Tax Sharing and Tax
Benefit Reimbursement Agreement between Tandy and O'Sullivan
Industries Holdings, Inc., in which the Company will receive
payments from O'Sullivan resulting from the increased tax
basis of O'Sullivan's assets, thereby increasing tax
deductions and accordingly, reducing income taxes payable by
O'Sullivan. The amount to be received by the Company each
year will approximate the federal tax benefit expected to be
realized with respect to the increased tax basis. These
payments will be made over a 15-year time period. The
Company will recognize these payments as additional sale
proceeds and gain in the year in which the payments become
due and payable to the Company.
InterTAN Update
As of March 31, 1994, InterTAN owed Tandy an aggregate of
$56,029,000. The current portion of the InterTAN obligation
approximates $4,168,000 and the non-current portion
approximates $51,861,000. The Series D note payable from
InterTAN to Tandy was paid in full during the quarter. The
note approximated $7,500,000 at December 31, 1993, and
represented invoices for shipped goods. Through March 31,
1994, Tandy recognized accretion of discount totaling
$851,000 on the note receivable from InterTAN resulting from
the purchase of the bank debt at a discounted price.
Accretion of the discount is based on the effective interest
rate method and is expected to approximate $3,856,000 in
1994. During the quarter ended March 31, 1994, Tandy
recognized approximately $10,913,000 of sales to InterTAN and
interest income of $1,974,000 (including the accretion of
discount). Sales to InterTAN for the March 31, 1993 quarter
approximated $14,244,000. Open purchase orders at March 31,
1994 approximated $43,359,000, which included goods and
commission. The merchandise will be paid through letters of
credit and only the commission will be billed directly to
InterTAN.
A&A will continue as the exclusive purchasing agent for
InterTAN in the Far East on a commission basis. Commencing
in March 1994, only the purchasing agent commission and sales
by Tandy manufacturing plants to InterTAN were recorded as
sales. InterTAN purchases from third parties through A&A are
no longer recorded as sales reflecting the arrangement under
the new merchandise agreement. Accordingly, management
expects that reported sales by Tandy to InterTAN in 1994 will
be considerably lower than in prior years, however, the
earned income relating thereto will not be materially
different.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Tandy has various claims, lawsuits, disputes with third
parties, investigations and pending actions involving
allegations of negligence, product defects, discrimination,
infringement of intellectual property rights, tax
deficiencies and breach of contract against the Company and
its subsidiaries incident to the operation of its business.
The liability, if any, associated with these matters was not
determinable at March 31, 1994. While certain of these
matters involve substantial amounts, and although occasional
adverse settlements or resolutions may occur and negatively
impact earnings in the year of settlement, it is the opinion
of management that their ultimate resolution will not have a
materially adverse effect on the Company's financial
position.
ITEM 2. CHANGE IN SECURITIES.
The Company's issue of 10% subordinated debentures due June
30, 1994 was called by the Company on February 23, 1994 for
redemption on April 1, 1994. The redemption was at a price
equal to 100% of face value of the subordinated debentures
for a total of $32,431,000.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a) Exhibits Required by Item 601 of Regulation S-K.
A list of the exhibits required by Item 601 of
Regulation S-K and filed as part of this report is set
forth in the Index to Exhibits on page 11, which
immediately precedes such exhibits.
b) Reports on Form 8-K.
No reports on Form 8-K were filed for the quarter ended
March 31, 1994.
<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.
Tandy Corporation
(Registrant)
Date: May 13, 1994 By /s/ Richard L. Ramsey
____________________________
Richard L. Ramsey
Vice President and Controller
Date: May 13, 1994 /s/ William C. Bousquette
____________________________
William C. Bousquette
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
<PAGE>
TANDY CORPORATION
INDEX TO EXHIBITS
Exhibit Sequential
Number Description Page No.
2a Agreement for Purchase and Sale of Assets dated as of
June 30,1993 between AST Research, Inc., as Purchaser
and Tandy Corporation, TE Electronics Inc., and GRiD
Systems Corporation, as Sellers (without exhibits)
(filed as Exhibit 2 to Tandy's July 13, 1993 Form 8-K
filed on July 27, 1993, Accession No.
0000096289-93-000004 and incorporated herein be
reference).
2b Amended and Restated Stock Exchange Agreement dated
February 1, 1994 by and among O'Sullivan Industries
Holdings, Inc., and TE Electronics Inc. (filed as
Exhibit 2b to Tandy's Form 10-K filed on March 30,
1994, Accession No. 0000096289-94-000029 and
incorporated herein by reference).
2c U.S. Purchase Agreement dated January 26, 1994 by and
among O'Sullivan Industries Holdings, Inc., TE
Electronics Inc. and the U.S. Underwriters which
included Merrill Lynch & Co., Wheat First Butcher &
Singer, The Chicago Dearborn Company and Rauscher
Pierce Refsnes, Inc. (filed as Exhibit 2c to Tandy's
Form 10-K filed on March 30, 1994, Accession No.
0000096289-94-000029 and incorporated herein by
reference).
2d International Purchase Agreement dated January 26,
1994 by and among O'Sullivan Industries Holdings,
Inc., TE Electronics Inc. and the U.S. Underwriters
which included Merrill Lynch International Limited
and UBS Limited (filed as Exhibit 2d to Tandy's Form
10-K filed on March 30, 1994, Accession No.
0000096289-94-000029 and incorporated herein by
reference).
3a(i) Restated Certificate of Incorporation of Tandy dated
December 10, 1982 (filed as Exhibit 4A to Tandy's
1993 Form S-8 for the Tandy Corporation Incentive
Stock Plan, Reg. No. 33-51603, filed on November 12,
1993, Accession No. 0000096289-93-000017 and
incorporated herein by reference).
3a(ii) Certificate of Amendment of Certificate of
Incorporation of Tandy Corporation dated November 13,
1986 (filed as Exhibit 4A to Tandy's 1993 Form S-8
for the Tandy Corporation Incentive Stock Plan, Reg.
No. 33-51603, filed on November 12, 1993, Accession
No. 0000096289-93-000017 and incorporated herein by
reference).
3a(iii) Certificate of Amendment of Certificate of
Incorporation, amending and restating the Certificate
of Designation, Preferences and Rights of Series A
Junior Participating Preferred Stock dated June 22,
1990 (filed as Exhibit 4A to Tandy's 1993 Form S-8
for the Tandy Corporation Incentive Stock Plan, Reg.
No. 33-51603, filed on November 12, 1993, Accession
No. 0000096289-93-000017 and incorporated herein by
reference).
3a(iv) Certificate of Designations of Series B TESOP
Convertible Preferred dated June 29, 1990 (filed as
Exhibit 4A to Tandy's 1993 Form S-8 for the Tandy
Corporation Incentive Stock Plan, Reg. No. 33-51603,
filed on November 12, 1993, Accession No.
0000096289-93-000017 and incorporated herein by
reference).
3a(v) Certificate of Designation, Series C Conversion
Preferred Stock dated February 13, 1992 (filed as
Exhibit 4A to Tandy's 1993 Form S-8 for the Tandy
Corporation Incentive Stock Plan, Reg. No. 33-51603,
filed on November 12, 1993, Accession No.
0000096289-93-000017 and incorporated herein by
reference).
3b Tandy Corporation Bylaws, restated as of August 4,
1993 (filed as Exhibit 4B to Tandy's Form S-8 for the
Tandy Corporation Incentive Stock Plan, Reg. No.
33-51603, filed on November 12, 1993, Accession No.
0000096289-93-000017 and incorporated herein by
reference).
4a Indenture, dated June 30, 1974, for 10% Subordinated
Debentures due 1994 (filed as Exhibit 4a to Tandy's
Form 10-K filed on March 30, 1994, Accession No.
0000096289-94- 000029 and incorporated herein by
reference).
4b Amended and restated Rights Agreement with the First
National Bank of Boston dated June 22, 1990 for
Preferred Share Purchase Rights (filed as Exhibit 4b
to Tandy's Form 10-K filed on March 30, 1994,
Accession No. 0000096289-94- 000029 and incorporated
herein by reference).
4c(i) Revolving Credit Agreement between Tandy Credit
Corporation, Tandy Corporation and Texas Commerce
Bank, individually and as Agent for eleven other
banks, dated as of June 17, 1991 (filed as Exhibit
4c(i) to Tandy's Form 10-K filed on March 30, 1994,
Accession No. 0000096289-94- 000029 and incorporated
herein by reference).
4c(ii) First Amendment to Revolving Credit Agreement between
Tandy Credit Corporation, Tandy Corporation and Texas
Commerce Bank, individually and as agent for eleven
other banks, dated June 11, 1992 (filed as Exhibit
4c(ii) to Tandy's Form 10-K filed on March 30, 1994,
Accession No. 0000096289-94-000029 and incorporated
herein by reference).
4c(iii) Second Amendment to Revolving Credit Agreement
between Tandy Credit Corporation, Tandy Corporation
and Texas Commerce Bank National Association,
individually and as agent for eleven other banks,
dated June 8, 1993 (filed as Exhibit 4c(iii) to
Tandy's Form 10-Q filed on November 16, 1993,
Accession No. 0000096289-93-000018 and incorporated
herein by reference).
4d Continuing Guaranty dated June 18, 1991 by Tandy of
obligations of the Company in favor of the banks
participating in the Revolving Credit Agreement
(filed as Exhibit 4d to Tandy's Form 10-K filed on
March 30, 1994, Accession No. 0000096289-94-000029
and incorporated herein by reference).
4e Continuing Guaranty dated as of June 18, 1991 by
Tandy Corporation in favor of holders of indebtedness
issued by Tandy Credit Corporation that is or may be
publicly traded and is rated by at least one
nationally recognized rating agency (filed as Exhibit
4e to Tandy's Form 10-K filed on March 30, 1994,
Accession No. 0000096289-94-000029 and incorporated
herein by reference).
10a* Salary Continuation Plan for Executive Employees of
Tandy Corporation and Subsidiaries including
amendment dated June 14, 1984 with respect to
participation by certain executive employees, as
restated October 4, 1990 (filed as Exhibit 10a to
Tandy's Form 10-K filed on March 30, 1994, Accession
No. 0000096289-94-000029 and incorporated herein by
reference).
10b* Form of Executive Pay Plan Letters (filed as Exhibit
10b to Tandy's Form 10-K filed on March 30, 1994,
Accession No. 0000096289-94-000029 and incorporated
herein by reference).
10c* Post Retirement Death Benefit Plan for Selected
Executive Employees of Tandy Corporation and
Subsidiaries as restated June 10, 1991 (filed as
Exhibit 10c to Tandy's Form 10-K filed on March 30,
1994, Accession No. 0000096289-94-000029 and
incorporated herein by reference).
10d* Tandy Corporation Officers Deferred Compensation Plan
as restated July 10, 1992 (filed as Exhibit 10d to
Tandy's Form 10-K filed on March 30, 1994, Accession
No. 0000096289-94-000029 and incorporated herein by
reference).
10e* Special Compensation Plan No. 1 for Tandy
Corporation Executive Officers, adopted in 1993
(filed as Exhibit 10e to Tandy's Form 10-K filed on
March 30, 1994, Accession No. 0000096289-94-000029
and incorporated herein by reference).
10f* Special Compensation Plan No. 2 for Tandy Corporation
Executive Officers, adopted in 1993 (filed as Exhibit
10f to Tandy's Form 10-K filed on March 30, 1994,
Accession No. 0000096289-94-000029 and incorporated
herein by reference).
10g* Special Compensation Plan for Directors of Tandy
Corporation dated November 13, 1986 (filed as Exhibit
10g to Tandy's Form 10-K filed on March 30, 1994,
Accession No. 0000096289-94-000029 and incorporated
herein by reference).
10h* Director Fee Resolution (filed as Exhibit 10h to
Tandy's Form 10-K filed on March 30, 1994, Accession
No. 0000096289-94-000029 and incorporated herein by
reference).
10i* Tandy Corporation 1985 Stock Option Plan as restated
effective August 1990 (filed as Exhibit 10i to
Tandy's Form 10-K filed on March 30, 1994, Accession
No. 0000096289-94- 000029 and incorporated herein by
reference).
10j* Tandy Corporation 1993 Incentive Stock Plan as
restated October 14, 1993 (filed as Exhibit 4B to
Tandy's Form S-8 for Tandy Corporation Incentive
Stock Plan, Reg. No. 33- 51603, filed on November
12, 1993, Accession No. 0000096289-93-000017 and
incorporated herein by reference).
10k* Tandy Corporation Officers Life Insurance Plan as
amended and restated effective August 22, 1990 (filed
as Exhibit 10k to Tandy's Form 10-K filed on March
30, 1994, Accession No. 0000096289-94-000029 and
incorporated herein by reference).
10l* Restated Trust Agreement Tandy Employees Supplemental
Stock Program through Amendment No. III dated March
29, 1993 (filed as Exhibit 10H to Tandy's Form
10-K/A-4 filed on September 3, 1993, Accession No.
0000096289-93-000011 and incorporated herein by
reference).
10m* Forms of Termination Protection Agreements for (i)
Corporate Executives, (ii) Division Executives, and
iii) Subsidiary Executives (filed as Exhibit 10m to
Tandy's Form 10-K filed on March 30, 1994, Accession
No. 0000096289-94-000029 and incorporated herein by
reference).
10n* Tandy Corporation Termination Protection Plans for
Executive Employees of Tandy Corporation and its
Subsidiaries (i) the Level I and (ii) Level II Plans
(filed as Exhibit 10n to Tandy's Form 10-K filed on
March 30, 1994, Accession No. 0000096289-94-000029
and incorporated herein by reference).
10o* Forms of Bonus Guarantee Letter Agreements with
certain Executive Employees of Tandy Corporation and
its Subsidiaries i) Formula, ii) Discretionary, and
iii) Pay Plan (filed as Exhibit 10o to Tandy's Form
10-K filed on March 30, 1994, Accession No.
0000096289-94-000029 and incorporated herein by
reference).
10p* Form of Indemnity Agreement with Directors, Corporate
Officers and two Division Officers of Tandy
Corporation (filed as Exhibit 10p to Tandy's Form
10-K filed on March 30, 1994, Accession No.
0000096289-94-000029 and incorporated herein by
reference).
11 Statement of Computation of Earnings per Share 15
12 Statement of Computation of Ratios of Earnings to
Fixed Charges 16
_______________________
* Each of these exhibits is a "management contract or
compensatory plan, contract, or arrangement".
<PAGE>
<TABLE>
TANDY CORPORATION EXHIBIT 11
STATEMENT OF COMPUTATION OF EARNINGS PER SHARE
<CAPTION>
Three Months Ended
March 31,
____________________________
(In thousands, except per share amounts) 1994 1993
____________ ____________
<S> <C> <C>
PRIMARY EARNINGS PER SHARE
Reconciliation of net income per statements of income to
amounts used in computation of primary earnings per share:
Net income, as reported $ 41,795 $ 35,145
Less dividends on preferred stock:
Series B (1,806) (1,832)
Series C (8,025) (8,025)
____________ ____________
Net income available to common stockholders 31,964 25,288
Plus dividends on Series C preferred stock 8,025 8,025
____________ ____________
Net income for primary earnings per share $ 39,989 $ 33,313
____________ ____________
____________ ____________
Weighted average number of common shares outstanding 63,648 63,238
Weighted average number of $2.14 depositary shares,
representing Series C preferred stock, treated as
common stock due to mandatory conversion 15,000 15,000
Weighted average number of common shares issuable
under stock option plans, net of assumed treasury stock
repurchases at average market prices 338 27
____________ ____________
Weighted average number of common and common
equivalent shares outstanding 78,986 78,265
____________ ____________
____________ ____________
Net income per average common and common equivalent share $ 0.51 $ 0.43
____________ ____________
____________ ____________
FULLY DILUTED EARNINGS PER SHARE (a)
Reconciliation of net income per statements of income to
amounts used in computation of fully diluted earnings per share:
Net income available to common stockholders $ 31,964 $ 25,288
Plus dividends on Series C preferred stock 8,025 8,025
Adjustments for assumed conversion of Series B preferred
stock to common stock as of the later of the beginning
of the period or the date of issuance, August 1, 1990:
Plus dividends on Series B preferred stock, net of tax
on allocated shares (b) (c) 1,832
Less additional contribution that would have been required for
the TESOP if Series B preferred stock had been converted (c) (891)
____________ ____________
Net income, as adjusted $ 39,989 $ 34,254
____________ ____________
____________ ____________
Reconciliation of weighted average number of shares outstanding
to amount used in computation of fully diluted earnings per share:
Weighted average number of shares outstanding 78,986 78,265
Adjustment to reflect assumed exercise of stock
options as of the beginning of the period 16 44
Adjustment to reflect assumed conversion of Series B preferred
stock to common stock as of the later of the beginning of
the period or the date of issuance, August 1, 1990 (c) 2,127
____________ ____________
Weighted average number of common and common
equivalent shares outstanding, as adjusted 79,002 80,436
____________ ____________
____________ ____________
Fully diluted net income per average common
and common equivalent share $ 0.51 $ 0.43
____________ ____________
____________ ____________
(a) This calculation is submitted in accordance with Regulation S-K, Item 601(b)(11) although not required by footnote 2 to
paragraph 14 of APB Opinion No. 15 because it results in dilution of less than 3%.
(b) Series B dividends for the three months ended March 31, 1993 are not net of income tax benefits associated with
unallocated shares in the TESOP in accordance with EITF Issue No. 92-3.
(c) For the three months ended March 31, 1994 these items are anti-dilutive and thus are omitted from the calculation.
</TABLE>
<PAGE>
<TABLE>
EXHIBIT 12
TANDY CORPORATION
STATEMENT OF COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
AND RATIOS OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS (1)
Three Months Ended
March 31,
____________________________
1994 1993
____________ ____________
<S> <C> <C>
Ratios of Earnings to Fixed Charges:
Income from continuing operations $ 41,795 $ 40,673
Plus provision for income taxes 25,889 23,380
____________ ____________
Income before income taxes 67,684 64,053
Fixed charges:
Interest expense and amortization of debt discount 9,993 9,211
Amortization of issuance expense 88 106
Appropriate portion (33 1/3%) of rentals 17,534 16,082
____________ ____________
Total fixed charges 27,615 25,399
____________ ____________
Earnings before income taxes and fixed charges $ 95,299 $ 89,452
____________ ____________
____________ ____________
Ratios of earnings to fixed charges 3.45 3.52
____________ ____________
____________ ____________
Ratios of Earnings to Fixed Charges and Preferred Dividends:
Total fixed charges, as above $ 27,615 $ 25,399
Preferred dividends 9,831 9,857
____________ ____________
Total fixed charges and preferred dividends $ 37,446 $ 35,256
____________ ____________
____________ ____________
Earnings before income taxes, fixed charges and
preferred dividends $ 95,299 $ 89,452
____________ ____________
____________ ____________
Ratios of earnings to fixed charges and preferred dividends 2.54 2.54
____________ ____________
____________ ____________
(1) The computation of Ratios of Earnings to Fixed Charges and Ratios of Earnings to Fixed Charges and Preferred Dividends
excludes results of operations from discontinued operations and fixed charges relating to these same operations.
</TABLE>
