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, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission File 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, 1995 was 65,850,236.
Index to Exhibits is on Sequential Page No. 14.
Total pages 19.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
TANDY CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
<CAPTIONS>
Three Months Ended
March 31,
--------------------------
(In thousands, except per share amounts) 1995 1994
----------- -----------
<S> <C> <C>
Net sales and operating revenues $ 1,226,622 $ 992,135
Cost of products sold 780,043 584,781
----------- -----------
Gross profit 446,579 407,354
----------- -----------
Expenses:
Selling, general and administrative 373,710 331,920
Depreciation and amortization 22,302 20,744
Interest income (23,402) (22,987)
Interest expense 10,660 9,993
----------- -----------
383,270 339,670
----------- -----------
Income before income taxes 63,309 67,684
Provision for income taxes 24,374 25,889
----------- -----------
Net income 38,935 41,795
Preferred dividends 1,667 1,806
----------- -----------
Net income available to common shareholders $ 37,268 $ 39,989
=========== ===========
Net income available per average common and common equivalent share $ 0.55 $ 0.53
=========== ===========
Average common and common equivalent shares outstanding 68,174 75,802
=========== ===========
Dividends declared per common share $ 0.18 $ 0.15
=========== ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
TANDY CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
<CAPTIONS>
March 31, Dec. 31, March 31,
(In thousands) 1995 1994 1994
----------- ----------- -----------
<S> <C> <C> <C>
Assets
Current assets:
Cash and short-term investments $ 233,718 $ 205,633 $ 369,710
Accounts and notes receivable, less
allowance for doubtful accounts 396,050 769,101 512,468
Inventories, at lower of cost or market 1,324,293 1,504,324 1,171,587
Other current assets 76,541 77,202 76,228
----------- ----------- -----------
Total current assets 2,030,602 2,556,260 2,129,993
Property, plant and equipment, at cost,
less accumulated depreciation 506,715 504,587 463,334
Investment in discontinued operations - - 30,181
Other assets, net of accumulated amortization 171,364 182,927 191,477
----------- ----------- -----------
$ 2,708,681 $ 3,243,774 $ 2,814,985
=========== =========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Short-term debt, including current maturities of long-term debt $ 239,302 $ 229,135 $ 132,835
Accounts payable 349,256 582,194 217,578
Accrued expenses 237,340 376,795 279,406
Income taxes payable 24,851 18,026 39,606
----------- ----------- -----------
Total current liabilities 850,749 1,206,150 669,425
----------- ----------- -----------
Long-term debt and capital leases, excluding current maturities 155,350 153,318 141,643
Other non-current liabilities 19,874 34,095 48,032
----------- ----------- -----------
Total other liabilities 175,224 187,413 189,675
----------- ----------- -----------
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 100,000 100,000 100,000
Series C PERCS, 150,000 shares authorized and issued - 429,982 429,982
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 93,638 93,357 89,340
Retained earnings 2,198,024 2,176,971 2,051,111
Foreign currency translation effects 1,880 (1,799) 1,389
Common stock in treasury, at cost, 19,611,000,
27,388,000 and 22,135,000 shares,respectively (735,641) (971,611) (732,073)
Unearned deferred compensation related to TESOP (60,838) (62,334) (69,509)
----------- ----------- -----------
Total stockholders' equity 1,682,708 1,850,211 1,955,885
Commitments and contingent liabilities
----------- ----------- -----------
$ 2,708,681 $ 3,243,774 $ 2,814,985
=========== =========== ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
TANDY CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
<CAPTIONS>
Three Months Ended
March 31,
--------------------------
(In thousands) 1995 1994
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 38,935 $ 41,795
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 22,302 20,744
Provision for credit losses and bad debts 11,466 5,192
Other items 703 379
Changes in operating assets and liabilities:
Sale of credit card portfolios 342,822 -
Receivables 18,327 106,646
Inventories 167,925 104,714
Other current assets 661 12,230
Accounts payable, accrued expenses and income taxes (335,275) (115,739)
----------- -----------
Net cash provided by operating activities 267,866 175,961
----------- -----------
Investing activities:
Additions to property, plant and equipment (43,336) (21,904)
Proceeds from sale of property, plant and equipment 2,326 681
Proceeds from sale of divested operations - 351,250
Other investing activities 170 198
----------- -----------
Net cash provided (used) by investing activities (40,840) 330,225
----------- -----------
Financing activities:
Purchase of treasury stock (212,078) (33,791)
Sale of treasury stock to employee stock purchase program 15,863 13,978
Proceeds from exercise of stock options 9,623 1,751
Dividends paid, net of taxes (24,507) (17,618)
Changes in short-term borrowings, net 61,463 (272,524)
Additions to long-term borrowings 1,706 -
Repayments of long-term borrowings (51,011) (41,507)
----------- -----------
Net cash used by financing activities (198,941) (349,711)
----------- -----------
Increase in cash and short-term investments 28,085 156,475
Cash and short-term investments, beginning of period 205,633 213,235
----------- -----------
Cash and short-term investments, end of period $ 233,718 $ 369,710
=========== ===========
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, 1995 are not necessarily
indicative of the results that may be expected for the year
ending December 31, 1995. 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,
1994.
NOTE 2-RELATIONS WITH INTERTAN
As of March 31, 1995 InterTAN Inc. ("InterTAN") owed Tandy an
aggregate of $35,994,000, net of discount. The current
portion of the obligation approximates $7,135,000 and the
non-current portion approximates $28,859,000. In the first
quarter of 1995, Tandy recognized $1,097,000 in accretion of
discount on the note receivable from InterTAN which resulted
from the purchase of the bank debt at a discounted price.
Tandy recognized sales to and commission income from InterTAN
of approximately $2,349,000 and interest income of $2,096,000
during the quarter ended March 31, 1995. During the quarter
ended March 31, 1994, Tandy recognized approximately
$10,913,000 of sales to InterTAN and interest income of
$1,974,000. Tandy recognized accretion of discount of
$851,000 on the note receivable during the quarter ended
March 31, 1994. See the Company's Annual Report on Form 10-K
for the year ended December 31, 1994 for further information.
Through April 1995 InterTAN has met all of its payment
obligations to Tandy. As a result, Tandy management believes
that InterTAN should be able to continue to meet its payment
obligations pursuant to its debt agreements with Tandy.
Canadian tax authorities are reviewing InterTAN's Canadian
subsidiary's 1987-89 tax returns. The Company cannot
determine whether the ultimate resolution of that review will
have an effect on InterTAN's ability to meet its obligations
to Tandy but, at present the Company believes that the
ultimate resolution of this review will not impair InterTAN's
ability to meet its obligations to Tandy.
NOTE 3-SALE OF CREDIT OPERATIONS
Effective March 30, 1995 the Company completed the sale, at
net book value, of the Radio Shack and Tandy Name Brand
Retail Group ("Tandy Name Brand") (McDuff, VideoConcepts and
The Edge in Electronics) private label credit card accounts
and substantially all accounts receivable to Hurley State
Bank, a subsidiary of SPS Transaction Services, Inc. ("SPS"),
a majority-owned subsidiary of Dean Witter, Discover & Co. As
a result of the transaction, Tandy received $342,822,000 in
cash and a deferred payment amount of $49,444,000. The
deferred payment does not bear interest. Principal will be
paid monthly. The Company has discounted the deferred
payment by $773,000 to yield approximately 5% over the eleven
month payout period. The discounted deferred payment amount
of $48,671,000 is classified as a current receivable in the
accompanying Consolidated Balance Sheet at March 31, 1995.
As part of the completed sales transaction, Tandy Credit
Corporation ("Tandy Credit") was merged into Hurley
Receivables Corporation ("HRC"), a wholly-owned subsidiary of
SPS, and no longer exists. The merger was necessary in order
to transfer an asset securitization program and approximately
$230,000,000 in customer receivables which backed the
program. HRC assumed the ongoing obligations of the Company
and its affiliates under the asset securitization program. On
March 31, 1995, Tandy Credit filed Post Effective Amendment
No. 2 to its Registration Statement on Form S-3 regarding the
termination of the registration of all remaining unsold
medium term notes. The termination was declared effective as
of April 5, 1995. On March 31, 1995, Tandy Credit also filed
Form 15 to de-register Tandy Credit's common stock and
terminate its reporting obligations under Section 12g-4(a)
(1) (i) of the Securities Exchange Act of 1934.
NOTE 4-RESTRUCTURING CHARGES
In December 1994, the Company adopted a business
restructuring plan to close or convert 233 of the 306 Tandy
Name Brand stores. Closed stores included 151 VideoConcepts,
30 McDuff mall stores and 19 McDuff Supercenters.
Approximately 33 other mall stores or McDuff Supercenters
will be converted to Radio Shack or Computer City Express(SM)
stores sometime in 1995. At March 31, 1995 all 233 stores
had been closed. Approximately 57 McDuff Supercenters and 16
The Edge in Electronics stores remain open and as of January
1, 1995 became part of the Specialty Retail Group of Radio
Shack. A pre-tax charge of $89,071,000 taken in the fourth
quarter of fiscal 1994 related to the closing and conversion
of these stores. The components of the restructuring charge
and an analysis of the amounts charged against the reserve
are outlined in the following table:
<TABLE>
<CAPTIONS>
Charges Charges
Original Through Balance 1/1/95- Balance
(In thousands) Reserve 12/31/94 12/31/94 3/31/95 3/31/95
----------------------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Lease obligations $ 46,682 $ (1,466) $ 45,216 $ (12,001) $ 33,215
Impairment of fixed assets 17,991 - 17,991 (17,991) -
Inventory impairment 16,600 - 16,600 (13,326) 3,274
Goodwill impairment 4,222 (4,222) - - -
Termination benefits 1,218 - 1,218 (1,218) -
Other 2,358 - 2,358 (810) 1,548
---------- ---------- ---------- ---------- ----------
Total $ 89,071 $ (5,688) $ 83,383 $ (45,346) $ 38,037
========== ========== ========== ========== ==========
</TABLE>
Sales and operating revenues associated with the closing of
233 Tandy Name Brand stores were approximately $28,350,000
and $65,926,000 for the quarters ended March 31, 1995 and
1994, respectively. In conjunction with this restructuring,
Tandy terminated 1,425 employees most of whom were store
employees and managers.
NOTE 5-SHARE REPURCHASE PROGRAM
On August 1, 1994, the Company announced that its Board of
Directors authorized management to purchase up to 7,500,000
shares of its common stock in addition to shares required for
employee plans. On December 30, 1994, the Board of Directors
authorized management to increase the share repurchase
program to 12,500,000 shares. Future purchases will be made
from time to time in the open market, and it is expected that
funding for the remainder of the program will come from
existing cash, short-term debt and proceeds from the sale of
the credit card portfolios. At March 31, 1995, approximately
8,800,000 shares had been repurchased under this program.
NOTE 6-RETIREMENT OF DEBT
In January 1995, the $45,000,000 of 8.69% senior notes which
were outstanding at December 31, 1994 were paid in full.
These senior notes had been outstanding since February 7,
1990. In February 1995, the $6,000,000 of Tandy Credit's
medium-term notes which were outstanding at December 31, 1994
and were to mature in May and August of 1995 were paid in
full.
NOTE 7-CONTINGENCY
The IRS Dallas field office is reviewing the Company's
1987-1989 tax returns and has referred certain issues to the
IRS National office. The resolution of this matter could
result in additional taxes and interest to the Company
related to the spin-off of InterTAN and raises questions
about the private letter rulings issued by the IRS regarding
the spin-off and certain other tax matters. Although
aggregate additional taxes involved in these transactions
could potentially range from $0 to $27 million, based on the
advice of the Company's independent tax advisors, the Company
believes it would prevail if any tax litigation had to be
instituted. Any ultimate tax assessment would also involve
interest. In any event, the Company believes the ultimate
resolution would have no material impact on the Company's
financial condition.
The Company is a defendant in a consolidated action titled
O'Sullivan Industries Holdings, Inc. Securities Litigation,
----------------------------------------------------------
which was commenced in 1994 and is currently pending before
the United States District Court for the Western District of
Missouri. The plaintiffs seek damages in an unspecified
amount alleging that O'Sullivan's initial public offering
prospectus, certain press releases and other materials
contained material misrepresentations and omissions. They
have also named O'Sullivan, O'Sullivan's officers and
directors, and the underwriters as defendants. Tandy
believes that the lawsuit is totally without merit and is
defending itself vigorously. It further believes that even
though an adverse resolution of the litigation might have a
negative impact on its results of operation in the year of
resolution, resolution will not have a material adverse
effect on its financial condition or liquidity.
NOTE 8-HEDGING AND DERIVATIVE ACTIVITY
The Company enters into interest rate swap agreements to
manage its interest rate exposure by effectively trading
floating interest rates for fixed interest rates. As the
Company has used the swaps to hedge certain obligations with
floating rates, the difference between the floating and fixed
interest rate amounts, based on these swap agreements, is
recorded as income or expense. Through March 31, 1995, the
Company has entered into five swaps with regard to notional
amounts totaling $90,000,000. The swap agreements all expire
during the third quarter of 1999. Prior to 1995 the Company
was not a party to any interest rate swaps. The Board of
Directors has authorized management to enter into interest
rate swaps up to notional amounts not exceeding $250,000,000.
At March 31, 1995, the Company would have to pay
approximately $2,100,000 to terminate the interest rate swaps
in place. This amount was obtained from the counterparties
and represents the fair value of the swap agreements; the
amount is not recognized in the consolidated financial
statements. The Company has no intention of terminating the
interest rate swap agreements at this time. At March 31,
1995, the weighted average interest rate of the floating rate
obligations being hedged was 6.99%, and the weighted average
interest rate of the fixed rate obligations imposed by the
swap agreements was 7.70%. The interest rate swap agreements
have been entered into with major financial institutions
which are expected to fully perform under the terms of the
swap agreements.
NOTE 9-PERCS CONVERSION
Tandy announced on January 23, 1995 that it had exercised its
right to call all the issued and outstanding Preferred Equity
Redemption Convertible Stock ("PERCS") for conversion on
March 10, 1995, prior to its mandatory conversion date of
April 15, 1995. For each PERCS depositary share redeemed,
0.787757 Tandy common shares were issued for an aggregate of
approximately 11,816,000 shares. In addition, each PERCS
depositary share received a dividend in cash of $0.321
representing the accrued dividend from January 16, 1995
through the redemption date of March 10, 1995.
<PAGE>
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:
<TABLE>
<CAPTIONS>
% Increase
(In thousands) 1995 1994 (Decrease)
------------------------- ----------- ----------- ----------
<S> <C> <C> <C>
Radio Shack $ 663,069 $ 637,640 4.0 %
Tandy Name Brand (closed) 28,350 65,926 (57.0)
Incredible Universe 133,753 50,993 162.3
Computer City 378,563 211,787 78.8
----------- -----------
1,203,735 966,346 24.6
Import/Export and Other Sales 22,887 25,789 (11.3)
----------- -----------
$ 1,226,622 $ 992,135 23.6 %
=========== ===========
</TABLE>
U.S. and Canada continuing retail operations had a 31.0%
sales gain for the quarter ended March 31, 1995.
Consolidated sales and operating revenues for the quarter
were up 23.6% to $1,226,622,000. Tandy's overall comparable
store sales gains approximated 6.6% for the quarter.
Incredible Universe was a key contributor to the sales growth
with 162.4% sales growth and 16.1% same store gains. Since
March 31, 1994, Incredible Universe added five stores and
plans an additional eight stores for 1995. Computer sales
during the quarter were strong at Incredible Universe. Sales
of big screen televisions and home theater products were also
strong, offset slightly by appliance sales which were down
but in line with industry trends. Computer City was also a
major contributor to Tandy's sales growth with an overall
increase of 78.8% and comparable store sales gains of 12.7%.
Thirty-one stores have been added to the Computer City chain
since March 31, 1994, including four which were added in the
quarter ended March 31, 1995. It is anticipated that
Computer City will add four to five new stores in the second
quarter of 1995 and by the end of 1995 Computer City plans to
have approximately 100 stores. Sales of Pentium(R)
processor-based computers and multimedia products were strong
at Computer City. Radio Shack's sales reflected an increase
in sales of core electronic products which was partially
offset by a decline in computer sales. Non-computer sales at
Radio Shack were up 9.0% for the quarter. As of January 1,
1995, Radio Shack sales include the sales for Tandy Name
Brand Retail Group ("Tandy Name Brand") stores which were not
closed and are now included in the Specialty Retail Group of
Radio Shack. Radio Shack comparable store sales gains for
the quarter were 3.9%. Commencing in March 1994, InterTAN
Inc. ("InterTAN") purchases from third parties through A&A
International were no longer recorded as sales, but instead
A&A International recognized commission income on such
purchases; therefore, sales by A&A International as reported
in the Import/Export group have decreased approximately
$9,288,000 for the quarter but earned income relating thereto
was not materially different. Increases in repair and other
income from support operations have partially offset this
decrease.
Gross Profit
Gross profit as a percent of net sales was 36.4% during the
three months ended March 31, 1995 as compared to 41.1% during
the corresponding 1994 period. This trend toward lower gross
margins is expected to continue as additional sales are made
by Computer City(R) and Incredible Universe(R) stores which
operate on lower margins. In the first quarter of 1995,
Computer City and Incredible Universe accounted for
approximately 41.8% of consolidated sales compared to 26.5%
in the first quarter of 1994. This mix of business shift
continues to be partially offset by increasing margins at
Radio Shack resulting from the increased emphasis on sales of
core categories, although the offset was less than seen in
1994.
Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses as a
percent of sales and operating revenues declined 3.0
percentage points in comparison with the first quarter of
1994. Most expense categories, including rent, payroll and
utilities, were lower as a percent of sales during the three
months ended March 31, 1995 as compared with the same prior
period results. The lower rent and payroll costs as a
percent of sales reflects the lower relative costs associated
with the Company's newer retail formats. As a result of
Computer City and Incredible Universe expansion into new
markets and Radio Shack's new promotional programs such as
The Repair Shop at Radio Shack(R) service, consolidated
advertising costs increased $8,751,000 or 23.3% this quarter
in comparison with the prior year period. The Company
expects SG&A expenses as a percent of sales to continue to
decrease as Computer City and Incredible Universe, which
operate at lower costs than consolidated Tandy Corporation,
become more significant portions of the Company's total
business.
Sale of Credit Operations
In a transaction completed on March 30, 1995, the Company
sold the Radio Shack and Tandy Name Brand (McDuff,
VideoConcepts and The Edge in Electronics) private label
credit card accounts and substantially all accounts
receivable to Hurley State Bank, a subsidiary of SPS
Transaction Services, Inc., a majority-owned subsidiary of
Dean Witter, Discover & Co., resulting in no material gain or
loss. The transaction should impact future periods as
follows: (1) SG&A costs incurred in processing the private
label credit card accounts will be eliminated and (2) no
interest income will be recorded and customer service fees
earned on the credit card accounts will decline as the
Company's remaining consumer credit balances decrease during
1995 and 1996.
Restructuring Charges
Sales and operating revenues associated with the closing of
233 Tandy Name Brand stores were approximately $28,350,000
and $65,926,000 for the quarters ended March 31, 1995 and
1994, respectively. In conjunction with this restructuring,
Tandy terminated 1,425 employees most of whom were store
employees and managers.
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 1995 and 1994
were 38.5% and 38.25%, respectively. The increase reflects
shifts of income into states with higher income tax rates
such as California, New York and Ohio.
The IRS Dallas field office is reviewing the Company's
1987-1989 tax returns and has referred certain issues to the
IRS National office. The resolution of this matter could
result in additional taxes and interest to the Company
related to the spin-off of InterTAN and raises questions
about the private letter rulings issued by the IRS regarding
the spin-off and certain other tax matters. Although
aggregate additional taxes involved in these transactions
could potentially range from $0 to $27 million, based on the
advice of the Company's independent tax advisors, the Company
believes it would prevail if any tax litigation had to be
instituted. Any ultimate tax assessment would also involve
interest. In any event, the Company believes the ultimate
resolution would have no material impact on the Company's
financial condition.
Earnings Per Share
Net income per average common and common equivalent share is
computed by dividing net income less the Series B convertible
stock dividends by the weighted average common and common
equivalent shares outstanding during the period. As the
Preferred Equity Redemption Convertible Stock ("PERCS")
mandatorily convert into common stock, they are considered
outstanding common stock and the dividends are not deducted
from net income for purposes of calculating net income per
average common and common equivalent share. Current quarter
weighted average share calculations include approximately
11,816,000 common shares relating to the conversion of the
PERCS into common shares on March 10, 1995. Per share
amounts and the weighted average number of shares outstanding
for the quarter ended March 31, 1994 also reflect the PERCS
conversion into approximately 11,816,000 common shares.
Fully diluted earnings available per common and common
equivalent share are not presented since dilution is less
than 3%.
Cash Flow and Financial Condition
Cash flow from operating activities increased in the
three-month period ended March 31, 1995 as compared with the
same period of the prior year. This increase relates
primarily to the sale of the credit card portfolios and the
reduction of inventories partially offset by a net decrease
in accounts payable, accrued expenses and income taxes.
Cash used by investing activities for the three-month period
ended March 31, 1995 includes property, plant and equipment
additions related to additional fixtures required for the
Radio Shack Gift Express program, new Radio Shack stores and
the Company's expansion of its Computer City and Incredible
Universe store formats. Management anticipates that capital
expenditure requirements will approximate $160,000,000 for
the remainder of 1995, primarily to support the Computer City
and Incredible Universe store expansions. Cash used for
financing activities for the three-month period ended March
31, 1995, includes continued purchases of treasury stock
under the share repurchase program. Repayments of long-term
borrowings includes the $45,000,000 of 8.69% senior notes and
Tandy Credit's medium-term notes of $6,000,000. The Company
believes that its cash flow from operations, cash on hand and
availability under its existing debt facilities are adequate
to fund the planned expansion of its store formats and share
repurchase program. In addition, most of the Company's new
store expenditures are being funded through operating leases.
Cash and short-term investments at March 31, 1995 were
$233,718,000 as compared to $205,633,000 at December 31, 1994
and $369,710,000 at March 31, 1994. Total debt as a
percentage of total capitalization was 19.0% at March 31,
1995, compared to 17.3% at December 31, 1994 and 12.3% at
March 31, 1994. Long-term debt as a percentage of total
capitalization was 7.5% at March 31, 1995 compared to 6.9% at
December 31, 1994 and 6.4% at March 31, 1994. The increases
in debt ratios results primarily from the Company's share
repurchase program described below.
On August 1, 1994, the Company announced that its Board of
Directors authorized management to purchase up to 7,500,000
shares of its common stock in addition to shares required for
employee plans. On December 30, 1994, the Board of Directors
authorized management to increase the share repurchase
program to 12,500,000 shares. Future purchases will be made
from time to time in the open market, and it is expected that
funding for the remainder of the program will come from
existing cash, short-term debt and proceeds from the sale of
the credit card portfolios. At March 31, 1995, approximately
8,800,000 shares had been repurchased under this program.
Inventory
Compared to March 31, 1994, total inventories at March 31,
1995 have increased $152,706,000 or 13.0%. The increase in
total inventory levels included inventory increases to
support new Computer City and Incredible Universe stores.
The majority of this increase was offset by decreased
inventory levels at Tandy Name Brands due to the closure of
233 stores in the quarter ended March 31, 1995. Inventory
levels have decreased 12.0% from the amounts at December 31,
1994 primarily due to seasonal fluctuations and closing of
Tandy Name Brand stores. Inventory is primarily comprised of
finished goods.
<TABLE>
Changes in Stockholders' Equity
<CAPTIONS>
Outstanding
(In thousands) Common Shares Dollars
------------- -----------
<S> <C> <C>
Balance at December 31, 1994 58,257 $ 1,850,211
Foreign currency translation adjustments, net of deferred taxes - 3,679
Sale of treasury stock to employee plans 343 15,863
Purchase of treasury stock (4,642) (218,605)
Exercise of stock options 260 9,623
Repurchase of preferred stock - (612)
Preferred stock dividends, net of tax - (1,084)
PERCS dividend - (4,824)
Redemption of PERCS 11,816 -
TESOP deferred compensation earned - 1,496
Common stock dividends - (11,974)
Net income - 38,935
------------- -----------
Balance at March 31, 1995 66,034 $ 1,682,708
============= ===========
</TABLE>
InterTAN Update
As of March 31, 1995 InterTAN owed Tandy an aggregate of
$35,994,000, net of discount. The current portion of the
obligation approximates $7,135,000 and the non-current
portion approximates $28,859,000. In the first quarter of
1995, Tandy recognized $1,097,000 in accretion of discount on
the note receivable from InterTAN which resulted from the
purchase of the bank debt at a discounted price. Tandy
recognized sales to and commission income from InterTAN of
approximately $2,349,000 and interest income of $2,096,000
during the quarter ended March 31, 1995. During the quarter
ended March 31, 1994, Tandy recognized approximately
$10,913,000 of sales to InterTAN and interest income of
$1,974,000. Tandy recognized accretion of discount of
$851,000 on the note receivable during the quarter ended
March 31, 1994. See the Company's Annual Report on Form 10-K
for the year ended December 31, 1994 for further information.
Through April 1995 InterTAN has met all of its payment
obligations to Tandy. As a result, Tandy management believes
that InterTAN should be able to continue to meet its payment
obligations pursuant to its debt agreements with Tandy.
Canadian tax authorities are reviewing InterTAN's Canadian
subsidiary's 1987-89 tax returns. The Company cannot
determine whether the ultimate resolution of that review will
have an effect on InterTAN's ability to meet its obligations
to Tandy but, at present the Company believes that the
ultimate resolution of this review will not impair InterTAN's
ability to meet its obligations to Tandy.
Pentium is a trademark of Intel Corporation. Preferred
Equity Redemption Convertible Stock and PERCS are trademarks
of Morgan Stanley & Co., Incorporated, in connection with
their investment banking services. All other trademarks
identified herein are owned or used by Tandy Corporation.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is a defendant in a consolidated action titled
O'Sullivan Industries Holdings, Inc. Securities Litigation,
----------------------------------------------------------
which was commenced in 1994 and is currently pending before
the United States District Court for the Western District of
Missouri. The plaintiffs seek damages in an unspecified
amount alleging that O'Sullivan's initial public offering
prospectus, certain press releases and other materials
contained material misrepresentations and omissions. They
have also named O'Sullivan, O'Sullivan's officers and
directors, and the underwriters as defendants. Tandy
believes that the lawsuit is totally without merit and is
defending itself vigorously. It further believes that even
though an adverse resolution of the litigation might have a
negative impact on its results of operation in the year of
resolution, resolution will not have a material adverse
effect on its financial condition or liquidity.
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, securities
matters, tax deficiencies, violations of permits or licenses,
and breach of contract and other matters 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, 1995. While
certain of these matters involve substantial amounts, and
although occasional adverse settlements or resolutions might
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 Tandy's financial position.
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 14,
which immediately precedes such exhibits.
b) Reports on Form 8-K.
1) On December 30, 1994, the Company announced the
sale of part of the credit card portfolios of
Tandy Credit Corporation, the transfer of most of
its extended service contract obligations, the
discontinuance of all VideoConcept stores and
most McDuff mall stores, and some McDuff
Supercenters stores, and an increase of its share
repurchase program to 12.5 million shares. The
Company also announced that Dwain H. Hughes was
named Senior Vice President and Chief Financial
Officer of Tandy Corporation, effective January
1, 1995. The Form 8-K was filed on January 6,
1995.
2) On January 18, 1995, the Company entered into
an agreement to sell its Radio Shack and Tandy
Name Brand Retail Group (McDuff, VideoConcepts
and The Edge in Electronics) private label credit
card portfolios to Hurley State Bank, a
subsidiary of SPS Transaction Services, Inc., a
majority-owned subsidiary of Dean Witter,
Discover & Co., subject to regulatory approval
and rating agency consent. The Form 8-K was
filed on February 2, 1995. Pro forma financial
information was included.
3) On January 21, 1995, the Company elected to
redeem on March 10, 1995 all of the 150,000
shares of its Series C Conversion Preferred Stock
(the "Preferred Stock"). The shares of Preferred
Stock to be redeemed constitute all of the shares
of Preferred Stock currently outstanding.
Redemption of the Preferred Stock will result in
the redemption of 15,000,000 $2.14 Depositary
Shares, each representing 0.787757 of a share of
Preferred Stock, on March 10, 1995. The Form 8-K
was filed on February 1, 1995.
No other Form 8-K reports were filed during the quarter ended
March 31, 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
Tandy Corporation
(Registrant)
Date: May 12, 1995 By /s/ Richard L. Ramsey
--------------------------
Richard L. Ramsey
Vice President and Controller
(Authorized Officer)
Date: May 12, 1995 /s/ Dwain H. Hughes
--------------------------
Dwain H. Hughes
Senior 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 by 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).
2e Acquisition Agreement dated January 18,
1995 between Hurley State Bank, as purchaser
and Tandy Credit Corporation as seller
(without exhibits) (filed as Exhibit (c)
to Tandy's January 18, 1995 Form 8-K filed
on February 2, 1995, Accession No.
0000096289-95-000008 and incorporated
herein by reference).
2e(i) Amendment No. 1 to Acquisition Agreement
dated January 18, 1995 between Tandy Credit
Corporation, Tandy National Bank and Hurley
State Bank (filed as Exhibit 2 to Tandy's
March 30, 1995 Form 8-K filed on April 12,
1995, Accession No. 0000096289-95-000012
and incorporated herein by reference).
2f Agreement and Plan of Merger dated March 30,
1995 by and among, Tandy Corporation, Tandy
Credit Corporation, Hurley State Bank and
Hurley Receivables Corporation (filed as
Exhibit 3 to Tandy's March 30, 1995 Form
8-K filed on April 12, 1995, Accession No.
0000096289-95-000012 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 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).
4b Revolving Credit Agreement between Tandy
Corporation and Texas Commerce Bank,
individually and as Agent for sixteen other
banks, dated as of May 27, 1994 (without
exhibits) (filed as Exhibit 4c to Tandy's
Form 10Q filed on August 15, 1994, Accession
No. 0000096289-94-000039 and incorporated
herein by reference).
4c 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, 1995, Accession No.
0000096289-95-000010 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 17
12 Statement of Computation of Ratio of
Earnings to Fixed Charges 19
27 Financial Data Schedule
_______________________
* 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
<CAPTIONS>
Three Months Ended March 31,
-----------------------------
(In thousands, except per share amounts) 1995 1994
------------------------------------------------------------------- ------------ ------------
<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 $ 38,935 $ 41,795
Less dividends on preferred stock:
Series B (1,667) (1,806)
------------ ------------
Net income available to common
shareholders for primary earnings per share $ 37,268 $ 39,989
============ ============
Weighted average number of common shares outstanding 58,655 63,648
Weighted average number of $2.14 depositary shares,
representing Series C preferred stock, treated as
common stock due to mandatory conversion 9,059 11,816
Weighted average number of common shares issuable
under stock option plans, net of assumed treasury stock
repurchases at average market prices 460 338
------------ ------------
Weighted average number of common and common
equivalent shares outstanding 68,174 75,802
============ ============
Net income available per average
common and common equivalent share $ 0.55 $ 0.53
============ ============
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 $ 37,268 $ 39,989
Adjustments for assumed conversion of Series B preferred stock
to common stock as of the beginning of the period:
Plus dividends on Series B preferred stock 1,667 (b)
Less additional contribution that would have been required
for the TESOP if Series B preferred stock had been converted (932) (b)
------------ ------------
Net income available per common and
common equivalent share, as adjusted $ 38,003 $ 39,989
============ ============
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 68,174 75,802
Adjustment to reflect assumed exercise of stock
options as of the beginning of the period 128 16
Adjustment to reflect assumed conversion of Series B preferred
stock to common stock as of the beginning of the period 1,936 (b)
------------ ------------
Weighted average number of common and common
equivalent shares outstanding, as adjusted 70,238 75,818
============ ============
Fully diluted net income available per average
common and common equivalent share $ 0.54 $ 0.53
============ ============
(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) For the three months ended March 31, 1994 these items are anti-dilutive and thus are omitted from the calculation.
</TABLE>
<PAGE>
<TABLE>
TANDY CORPORATION EXHIBIT 12
STATEMENT OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
Three Months Ended March 31,
----------------------------
(In thousands, except ratios) 1995 1994
------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
Ratio of Earnings to Fixed Charges:
Net income $ 38,935 $ 41,795
Plus provision for income taxes 24,374 25,889
------------ ------------
Income before income taxes 63,309 67,684
------------ ------------
Fixed charges:
Interest expense and amortization of debt discount 10,660 9,993
Amortization of issuance expense 69 88
Appropriate portion (33 1/3%) of rentals 17,748 17,534
------------ ------------
Total fixed charges 28,477 27,615
------------ ------------
Earnings before income taxes and
fixed charges $ 91,786 $ 95,299
============ ============
Ratio of earnings to fixed charges 3.22 3.45
============ ============
Ratio of Earnings to Fixed Charges and
Preferred Dividends:
Total fixed charges, as above $ 28,477 $ 27,615
Preferred dividends 6,491 9,831
------------ ------------
Total fixed charges and preferred dividends $ 34,968 $ 37,446
============ ============
Earnings before income taxes, fixed charges
and preferred dividends $ 91,786 $ 95,299
============ ============
Ratio of earnings to fixed charges and preferred dividends 2.62 2.54
============ ============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements contained in the Company's first quarter report on Form
10-Q and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 233,718
<SECURITIES> 0
<RECEIVABLES> 396,050
<ALLOWANCES> 0
<INVENTORY> 1,324,293
<CURRENT-ASSETS> 2,030,602
<PP&E> 506,715
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,708,681
<CURRENT-LIABILITIES> 850,749
<BONDS> 155,350
<COMMON> 85,645
0
100,000
<OTHER-SE> 1,497,036
<TOTAL-LIABILITY-AND-EQUITY> 2,708,681
<SALES> 1,226,622
<TOTAL-REVENUES> 1,226,662
<CGS> 780,043
<TOTAL-COSTS> 780,043
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (12,742)
<INCOME-PRETAX> 63,609
<INCOME-TAX> 24,374
<INCOME-CONTINUING> 38,935
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 38,935
<EPS-PRIMARY> 0.55
<EPS-DILUTED> 0.55
</TABLE>
