<PAGE> 1
MANUALLY SIGNED ORIGINAL
Page 1 of 16 Sequentially Numbered Pages
Exhibit Index on Page 15
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
FORM 10-Q
-----------
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED OCTOBER 31, 1994. OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934 FOR THE TRANSITION FROM TO .
-------- -------------
Commission file number: 1-9494
TIFFANY & CO.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 13-3228013
(State of incorporation) (I.R.S. Employer Identification No.)
727 FIFTH AVE. NEW YORK, NY 10022
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 755-8000
</TABLE>
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 .
------- ------
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding
of each of the issuer's classes of common stock as of the latest practicable
date: Common Stock, $.01 par value, 15,681,414 shares outstanding at the close
of business on OCTOBER 31, 1994.
<PAGE> 2
TIFFANY & CO. AND SUBSIDIARIES
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED OCTOBER 31, 1994
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - October 31, 1994
(Unaudited) and January 31, 1994 3
Consolidated Statements of Income - for the
three and nine months ended October 31, 1994
and 1993 (Unaudited) 4
Consolidated Statements of Stockholders'
Equity - for the three and nine months
ended October 31, 1994 (Unaudited) 5
Consolidated Statements of Cash Flows - for
the nine months ended October 31, 1994 and
1993 (Unaudited) 6
Notes to Consolidated Financial Statements
(Unaudited) 7-9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10-13
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 14
(a) Exhibits
(b) Reports on Form 8-K
</TABLE>
- 2 -
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
TIFFANY & CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
October 31, January 31,
1994 1994
-------------- -------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets;
Cash and short-term investments $ 4,573 $ 4,994
Accounts receivable, less allowances of
$4,666 and $4,170 61,230 67,330
Income taxes receivable 7,925 12,517
Inventories 305,699 262,282
Prepaid expenses 23,449 17,718
-------- --------
Total current assets 402,876 364,841
Property and equipment, net 101,306 97,365
Deferred income taxes 16,285 15,404
Other assets, net 30,742 26,799
-------- --------
$551,209 $504,409
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 82,184 $ 59,289
Accounts payable and accrued liabilities 89,989 79,980
Income taxes payable 0 6,359
Merchandise and other customer credits 7,397 6,947
-------- --------
Total current liabilities 179,570 152,575
Long-term trade payable 28,380 25,394
Reserve for product return 13,236 13,663
Long-term debt 101,500 101,500
Deferred income taxes 6,178 6,758
Postretirement benefit obligation 16,202 14,320
Other long-term liabilities 874 1,118
Commitments and contingencies
Stockholders' equity:
Common stock, $.01 par value; authorized
30,000 shares, issued 15,681 and 15,660 157 157
Additional paid-in capital 71,091 70,498
Retained earnings 132,836 126,082
Foreign currency translation adjustments 1,185 (7,656)
-------- --------
Total stockholders' equity 205,269 189,081
-------- --------
$551,209 $504,409
======== ========
</TABLE>
See notes to consolidated financial statements
-3-
<PAGE> 4
TIFFANY & CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
For the For the
Three Months Ended Nine Months Ended
October 31, October 31,
-------------------------- --------------------------
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $160,091 $134,750 $443,555 $358,464
Product return for Japan realignment 0 0 0 (115,000)
-------- -------- -------- --------
160,091 134,750 443,555 243,464
Cost of goods sold 75,674 62,918 213,017 180,404
Cost related to product return
for Japan realignment 0 0 0 (57,500)
-------- -------- -------- --------
Gross profit 84,417 71,832 230,538 120,560
Selling, general and administrative
expenses 72,176 63,392 202,436 163,184
Provision for uncollectible accounts 414 524 1,143 1,430
-------- -------- -------- --------
Income/(loss) from operations 11,827 7,916 26,959 (44,054)
Other expenses, net 3,533 2,201 9,305 5,611
-------- -------- -------- --------
Income/(loss) before income taxes 8,294 5,715 17,654 (49,665)
Provision/(benefit) for income taxes 3,574 2,460 7,608 (21,407)
-------- -------- -------- --------
Net income/(loss) $ 4,720 $ 3,255 $ 10,046 $(28,258)
======== ======== ======== ========
Net income/(loss) per share:
Primary $ 0.30 $ 0.21 $ 0.63 $ (1.79)
======== ======== ========= ========
Fully diluted $ 0.30 $ 0.21 $ 0.63 $ (1.79)
======== ======== ========= ========
Weighted average number of common shares:
Primary 15,962 15,797 15,876 15,775
Fully diluted 16,884 16,701 16,873 16,689
</TABLE>
See notes to consolidated financial statements
- 4 -
<PAGE> 5
TIFFANY & CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Foreign
Total Common Stock Additional Currency
Stockholders' ------------------- Paid-In Retained Translation
Equity Shares Amount Capital Earnings Adjustments
------------ ------ ------ ---------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCES, January 31, 1994 $189,081 15,660 $157 $70,498 $126,082 $(7,656)
Exercise of stock options 70 3 - 70 - -
Tax benefit from exercise of
stock options 4 - - 4 - -
Cash dividends on common stock (1,096) - - - (1,096) -
Foreign currency translation
adjustments 2,698 - - - - 2,698
Net income 1,876 - - - 1,876 -
------- ------- ---- ------- -------- -------
BALANCES, April 30, 1994 192,633 15,663 157 70,572 126,862 (4,958)
------- ------- ---- ------- -------- -------
Exercise of stock options 320 16 - 320 - -
Tax benefit from exercise of
stock options 112 - - 112 - -
Cash dividends on common stock (1,098) - - - (1,098) -
Foreign currency translation
adjustments 1,892 - - - - 1,892
Net income 3,450 - - - 3,450 -
------- ------- ---- ------- -------- -------
BALANCES, July 31, 1994 197,309 15,679 157 71,004 129,214 (3,066)
-------- ------- ---- ------- -------- -------
Exercise of stock options 71 2 - 71 - -
Tax benefit from exercise of
stock options 16 - - 16 - -
Cash dividends on common stock (1,098) - - - (1,098) -
Foreign currency translation
adjustments 4,251 - - - - 4,251
Net income 4,720 - - - 4,720 -
-------- ------- ---- ------- -------- -------
BALANCES, October 31, 1994 $205,269 15,681 $157 $71,091 $132,836 $ 1,185
======== ======= ==== ======= ======== =======
</TABLE>
See notes to consolidated financial statements
- 5 -
<PAGE> 6
TIFFANY & CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
For the
Nine Months Ended
October 31,
---------------------------------
1994 1993*
---- ----
<S> <C> <C>
Cash Flows From Operating Activities:
Net income/(loss) $ 10,046 $(28,258)
Adjustments to reconcile net income/(loss) to net
cash provided by operating activities:
Depreciation and amortization 12,067 9,833
Provision for uncollectible accounts 1,143 1,430
Provision for product returns 0 57,500
Reduction in reserve for product returns (427) (34,735)
Provision for inventories 1,867 782
Deferred income taxes (1,365) (13,415)
Income taxes receivable 4,592 (17,488)
Loss on sale of fixed assets 0 271
Postretirement benefit provision 1,882 1,425
(Increase)/decrease in assets and increase/
(decrease) in liabilities
Accounts receivable 7,634 (9,753)
Inventories (28,556) (12,775)
Prepaid expenses (4,857) (2,199)
Other assets (5,124) (1,333)
Accounts payable and accrued liabilities 8,944 30,357
Income taxes payable (6,961) (3,135)
Merchandise and other customer credits 450 316
Other long-term liabilities (496) (1,278)
--------- --------
Net cash provided by/(used)in operating activities 839 (22,455)
--------- --------
Cash Flows From Investing Activities:
Capital expenditures (12,581) (14,410)
Other (133) -
--------- --------
Net cash used in investing activities (12,714) (14,410)
--------- --------
Cash Flows From Financing Activities:
Increase in short-term borrowings 14,153 38,619
Proceeds from exercise of stock options 461 411
Tax benefit from exercise of stock options 132 336
Cash dividends on common stock (3,292) (3,286)
--------- --------
Net cash provided by financing activities 11,454 36,080
--------- --------
Net decrease in cash and short-term investments (421) (785)
Cash and short-term investments at beginning
of year 4,994 6,672
--------- --------
Cash and short-term investments at end of nine
months $ 4,573 $ 5,887
========= ========
Supplemental Disclosure Of Cash Flow Information:
Cash paid during the nine months for:
Interest $ 10,555 $ 6,153
========= ========
Income taxes $ 12,871 $ 4,343
========= ========
</TABLE>
* Reclassified for comparative purposes
See notes to consolidated financial statements
- 6 -
<PAGE> 7
TIFFANY & CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements include the
accounts of Tiffany & Co. and all majority-owned domestic and foreign
subsidiaries (the "Company"). All material intercompany balances and
transactions have been eliminated. The statements are without audit
and, in the opinion of management, include all adjustments (which
include only normal recurring adjustments except for the adjustment
necessary as a result of the LIFO method of inventory valuation, which
is based on assumptions as to inflation rates and projected fiscal
year-end inventory levels) necessary to present fairly the Company's
financial position as of October 31, 1994 and the results of
operations and cash flows for the interim periods presented. The
audited financial statements for January 31, 1994 are presented
without accompanying footnotes which are included in the Company's
Form 10-K filing.
Since the Company's business is seasonal, with a higher proportion of
sales and income generated in the last quarter of the fiscal year, the
results of operations for the nine months ended October 31, 1994 and
1993 are not necessarily indicative of the results of the entire
fiscal year.
2. INVENTORIES
Inventories at October 31, 1994 and January 31, 1994 are summarized as
follows:
<TABLE>
<CAPTION>
October 31, January 31,
1994 1994
----------- -----------
(in thousands)
<S> <C> <C>
Finished goods $257,278 $219,010
Raw materials 43,338 40,210
Work in process 7,594 5,097
-------- --------
308,210 264,317
Less: Reserves (2,511) (2,035)
-------- --------
$305,699 $262,282
======== ========
</TABLE>
- 7 -
<PAGE> 8
At October 31, and January 31, 1994, $215,727,000 and $177,379,000,
respectively, of inventories were valued using the LIFO method. The
excess of such inventories valued at replacement cost over the value
based upon the LIFO method was approximately $9,770,000 and $8,470,000
at October 31, 1994 and January 31, 1994, respectively. The LIFO
valuation method had no effect on net income for the three month
periods ended October 31, 1994 and 1993, respectively. The LIFO
valuation method had the effect of decreasing net income/(loss) by
$0.05 and $0.06 per share for the nine month periods ended October 31,
1994 and 1993, respectively.
3. POSTEMPLOYMENT BENEFITS
Effective February 1, 1994, the Company adopted Statement of Financial
Accounting Standards No. 112, "Accounting for Postemployment Benefits"
("SFAS No. 112"), which requires the accrual of the cost of
postemployment benefits rather than expensing the costs when incurred.
These benefits include salary continuation, severance benefits,
disability benefits and continuation of health care benefits and life
insurance coverage for former employees after employment but before
retirement. The adoption of this standard did not have a material
impact on the Company's reported results of operation or financial
condition.
4. FOREIGN CURRENCY HEDGING PROGRAM
During the first quarter of 1994, the Company initiated a foreign
currency hedging program intended to reduce the Company's risk on
foreign-currency-denominated transactions. In connection with this
program, the Company will from time to time enter into forward
exchange contracts and foreign-currency-purchased put options which
are designated as hedges of commitments to purchase merchandise and
settle liabilities in foreign currencies. The market value gains and
losses on these foreign exchange contracts are initially deferred and
then recognized when the related transactions are settled. At October
31, 1994, the Company had outstanding forward exchange contracts,
maturing on November 25, 1994, to sell yen 694,396,000 at
predetermined contract exchange rates. At October 31, 1994, the
Company had outstanding purchased put options maturing at various
dates through October 25, 1995, giving it the right, but not the
obligation, to sell yen 5,148,000,000 at the predetermined contract
exchange rates. If current market conditions continue under which the
market yen exchange rates at maturity are below the contract rates,
the Company will allow the options to expire. The Company's pre-tax
expense related to its hedging program was $271,000 for the three
month period ended October 31, 1994 and $637,000 for the nine month
period ended October 31, 1994.
5. EARNINGS PER SHARE
Primary earnings per common share data have been computed by dividing
net income by the weighted average number of shares outstanding during
the period, including dilutive stock options. Fully diluted earnings
per common share has been computed by dividing net income, after
giving effect to the elimination of interest expense and bond
amortization fees, net of income tax effect, applicable to the
convertible subordinated debentures, by the weighted average number of
shares outstanding including dilutive stock options and shares assumed
issued on conversion of the subordinated debentures using the "if
converted" method.
- 8 -
<PAGE> 9
6. SUBSEQUENT EVENT
On November 17, 1994, Tiffany's Board of Directors declared a regular
quarterly dividend of $0.07 per common share. This dividend will be
paid on January 10, 1995 to stockholders of record on December 20,
1994.
- 9 -
<PAGE> 10
PART I. FINANCIAL INFORMATION
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company operates three channels of distribution: U.S. Retail includes
retail sales in Company-operated stores in the U.S. and wholesale sales to
independent retailers in North America; Direct Marketing includes corporate
(business-to-business) and catalog sales; and International Retail includes
retail sales through Company-operated stores and boutiques, corporate sales,
and wholesale sales to independent retailers and distributors, primarily in
Asia-Pacific, Europe, Canada and the Middle East.
Sales by channel of distribution were as follows:
<TABLE>
<CAPTION>
Three months ended Nine months ended
October 31, October 31,
------------------ ------------------
(in thousands) 1994 1993 1994 1993
- -------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
U.S. Retail $ 72,256 $ 62,584 $197,273 $171,766
Direct Marketing 20,796 20,260 60,284 57,454
International Retail 67,039 51,906 185,998 129,244
-------- -------- -------- --------
Net sales $160,091 $134,750 $443,555 $358,464
======== ======== ======== ========
</TABLE>
In comparison to comparable periods in 1993, net sales in the three months
ended October 31, 1994 (third quarter) increased 19%; in the nine months ended
October 31, 1994 sales increased 24%.
U.S. Retail sales increased 15% in both the third quarter and nine-month
periods. Comparable sales in stores open more than one year rose 12% in both
periods. Sales increased in the New York store and in branch stores. Higher
sales were generated by increased transactions, primarily to local-market
customers.
Direct Marketing sales increased 3% in the third quarter and 5% in the
nine-month period due to higher catalog sales.
International Retail sales increased 29% in the third quarter and 44% in the
nine-month period. International Retail sales in the nine-month period are not
comparable to 1993 due to the realignment of the Company's Japan business in
July 1993 (see below). When measured in yen, sales in Company-operated
boutiques that were open in Japan more than one year increased 22% in the third
quarter and 2% in the nine-month period (the 1993 sales base for comparison
purposes includes retail sales made in boutiques which were operated by
Mitsukoshi Ltd. in the first half of 1993). Management believes the recent
improvement in Japan primarily resulted from the Company's merchandising,
marketing and publicity initiatives, as well as from favorable consumer
response to recent price reductions. The Company achieved sales growth in
Asia-Pacific markets other than Japan. In Europe, comparable retail store
sales, when measured in local currencies, increased 26% in the third quarter
and 2% in the nine-month period.
In July 1993, the Company effected a realignment of its business in Japan by
assuming merchandising and marketing responsibilities for each of the 29
TIFFANY & CO. boutiques previously operated by Mitsukoshi Ltd., an operator of
department stores. As part of this transaction, the Company agreed to
repurchase
10
<PAGE> 11
$115,000,000 of merchandise previously sold to Mitsukoshi. As a consequence,
the Company recorded a $115,000,000 provision for product return in the second
quarter of 1993 which reduced gross profit by $57,500,000 and reduced net
income by $32,700,000 (net of income tax benefit of $24,800,000), or $2.07 per
share. At October 31, 1994, approximately $30,000,000 of merchandise remained
to be repurchased throughout the period ending February 28, 1998. No further
charges or sales reversals are anticipated in connection with this transaction.
Under the new arrangement, Mitsukoshi no longer purchases TIFFANY & CO.
merchandise on a wholesale basis for resale in Japan. Instead, Mitsukoshi acts
for the Company in the sale of merchandise owned by the Company and the Company
recognizes as revenues the retail price charged to the ultimate consumer in
Japan (as opposed to the wholesale price previously charged to Mitsukoshi). As
a result, the Company's reported sales in the nine-month period showed a
significant increase due to the Japan realignment.
The Company now holds inventories for sale, establishes retail prices, bears
the risk of currency fluctuations, provides one or more brand managers in each
boutique, controls merchandising and display within the boutiques, manages
inventory and controls and funds all advertising and publicity programs with
respect to TIFFANY & CO. merchandise. Mitsukoshi is paid at the rate of
approximately 27% of retail sales in compensation for providing boutique
facilities and sales and clerical staff, as well as for the collection of
receivables and security of store inventories. The new arrangement entails
greater seasonality in sales for the Company than did the prior wholesale
arrangement with Mitsukoshi. The Company is experiencing greater expenses in
Japan under the new arrangement, but is also recording higher revenues at the
retail level. In general, management believes that the Company's increased
revenues and corresponding gross profit more than offset the increased
expenses.
As a result of the business realignment in Japan, the Company's reported sales
and earnings results benefit from a strengthening Japanese yen and are
adversely affected by a strengthening U.S. dollar. To minimize the negative
impact of changes in the dollar-yen relationship on the Company's financial
results, the Company initiated a foreign currency hedging program in early
fiscal 1994. The Company's pre-tax expense related to its hedging program was
$271,000 in the third quarter and $637,000 in the nine-month period.
Since the realignment, the Company has made a number of changes in its Japan
business that have affected sales, gross margins, inventory levels and
operating expenses. In June 1994, the Company reduced Japan retail prices by
approximately 25% on products that represent approximately 55% of Japan retail
sales. This reduction was taken to make pricing for TIFFANY & CO. brand
merchandise more competitive with both Japanese and imported brands by reducing
the premium to U.S. prices. In the past, typical retail prices of imported
luxury goods in Japan reflected a substantial premium to "home market" prices,
although a recent trend among retailers in Japan has been to reduce that
premium. The premium over U.S. prices for TIFFANY & CO. products is now
approximately 50%, based on current exchange rates, and management believes
that such pricing is competitive. This June 1994 price reduction, and one for
solitaire diamond rings of approximately 20% taken in October 1993, have
positively affected sales and earnings in Japan, despite reduced gross margins.
11
<PAGE> 12
Other changes made since the realignment, some of which are in the process of
being implemented, include the establishment of model stock inventories for
each boutique, the installation of the Company's merchandise replenishment
system which expedites the flow of merchandise to the boutiques in Japan, the
introduction of several new jewelry collections in Japan, an increase in
advertising expenditures directed to Japan and improved visual merchandising
within the boutiques.
Gross margin (gross profit as a percentage of net sales) in the third quarter
declined to 52.7% from 53.3% in 1993 primarily due to price reductions
implemented in Japan in October 1993 and June 1994. Gross margin in the
nine-month period increased to 52.0% from 49.7% in 1993 (excluding the effect
of the nonrecurring charge related to the Japan business realignment) primarily
due to the effect of recording higher retail sales as part of the Japan
business realignment.
Operating expenses (selling, general and administrative expenses and the
provision for uncollectible accounts) in the third quarter increased 14% over
1993; this resulted from a combination of increased sales-related variable
expenses in Japan (primarily commissions paid to department stores), new store
expenses and ongoing operating expenses. In the nine-month period, operating
expenses increased 24% over 1993, reflecting the effect of the Japan business
realignment, as well as factors applicable to the third quarter. As a
percentage of net sales, operating expenses were 45.3% in the third quarter and
45.9% in the nine-month period, compared with 47.4% and 45.9% in the respective
1993 periods.
Other expenses in the third quarter and nine-month period increased over the
corresponding 1993 periods, primarily due to interest expense related to higher
average short-term borrowings and higher short-term rates.
As a result of the above factors, net income in the third quarter was
$4,720,000, or $0.30 per share, compared with $3,255,000, or $0.21 per share, in
the prior year. In the nine-month period, net income was $10,046,000, or $0.63
per share, compared with $4,455,000, or $0.28 per share, in 1993 (excluding a
nonrecurring charge for the Japan business realignment), and a net loss of
$28,258,000, or $1.79 per share (including such charge).
FINANCIAL CONDITION
LIQUIDITY AND CAPITAL RESOURCES
Management believes that the Company's financial condition at October 31, 1994
provides sufficient liquidity and resources to support current business
activity and planned expansion.
Working capital and the corresponding current ratio were $223,306,000 and 2.2:1
at October 31, 1994 compared with $212,266,000 and 2.4:1 at January 31, 1994.
Inventories (which represent the largest component of both working capital and
current assets) increased 17% over January 31, 1994. The increase was
attributable to merchandise purchases to support sales growth, seasonal
increases for the Holiday season, the effect of translating foreign inventories
into U.S. dollars, new store openings and expanded product offerings.
Inventory turnover was 0.9 times at both October 31, 1994 and January 31, 1994.
The Company's objective continues to be improvement in comparable store
inventory productivity.
12
<PAGE> 13
Capital expenditures of $12,581,000 in the nine-month period compared with
$14,410,000 in the comparable 1993 period.
The Company incurred a net cash outflow (change in cash and total debt) in the
nine-month period primarily as a result of the above referenced factors. Total
debt (short-term borrowings and long-term debt) and its ratio to total capital
(total debt and stockholders' equity) were $183,684,000 and 47%, respectively,
at October 31, 1994 compared with $160,789,000 and 46%, respectively, at
January 31, 1994. Inventory and debt levels have been increased to support the
Company's long-term, worldwide expansion strategies; however, it is
management's goal, subject to achievement of annual sales and earnings growth
objectives, to improve inventory turnover, generate excess cash flow and reduce
the ratio of total debt to total capital.
The Company's sources of working capital are internally-generated funds and
funds available under a $100,000,000 revolving credit facility and a yen
2,500,000,000 (approximately $25,000,000) line of credit. In the nine-month
period, revolving credit facility funds were used to finance the company's
operations and expansion program. A cash inflow expected in the three months
ending January 31, 1995 will be used to reduce short-term borrowings.
Management anticipates that these sources of funds will be sufficient to
support planned worldwide business expansion, as well as seasonal working
capital increases typically required during the third and fourth quarters of
each year. The Company's long-term plan is to minimize debt increases on an
annual basis with an objective of reducing debt leverage from its current
level.
13
<PAGE> 14
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11 Statement re Computation of Per Share Earnings.
(b) Reports on Form 8-K
None.
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.
TIFFANY & CO.
(Registrant)
Date: December 9, 1994 By: /s/ James N. Fernandez
------------------------------
James N. Fernandez
Senior Vice President - Finance
and Chief Financial Officer
(principal financial officer)
- 14 -
<PAGE> 15
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Numbered Page
- ----------- -------------
<S> <C> <C>
11 Statement Re Computation of
Per Share Earnings
27 Financial Data Schedule
</TABLE>
- 15 -
<PAGE> 1
Item 6. TIFFANY & CO. AND SUBSIDIARIES
EXHIBIT 11 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(Unaudited)
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
--------------------------- --------------------------
Oct. 31, Oct. 31, Oct. 31, Oct. 31,
1994 1993 1994 1993
------- -------- -------- ---------
<S> <C> <C> <C> <C>
PRIMARY EARNINGS PER SHARE:
Net income/(loss) on which primary
earnings per share are based $ 4,720 $ 3,255 $ 10,046 $(28,258)
======== ======== ======== ========
Weighted average number of shares on
which primary earnings are based 15,962 15,797 15,876 15,775
======== ======== ======== ========
Primary net income/(loss) per
common share $ 0.30 $ 0.21 $ 0.63 $ (1.79)
======== ======== ======== ========
FULLY DILUTED EARNINGS PER SHARE:
Net income/(loss) on which primary
earnings per share are based $ 4,720 $ 3,255 $ 10,046 $(28,258)
Add:
Interest and fees on convertible
subordinated debt, net of
applicable income taxes 428 461 1,416 1,383
-------- -------- -------- --------
Net income/(loss) on which fully diluted
earnings per share are based $ 5,148 $ 3,716 $ 11,462 $(26,875)
======== ======== ======== ========
Weighted average number of common
shares used in calculating
fully diluted earnings per share 15,991 15,808 15,980 15,796
Shares assumed issued upon conversion
of convertible debt, using
"if converted" method 893 893 893 893
--------- -------- -------- --------
Weighted average number of shares
used in calculating fully diluted
earnings per share 16,884 16,701 16,873 16,689
========= ======== ======== ========
Fully diluted net income/(loss) per
common share $ 0.30 $ 0.21 $ 0.63 $ (1.79)
========= ======== ======== ========
</TABLE>
NOTE: In anticipation of the 6 3/8% Convertible Subordinated Debenture's
dilutive effect in the fourth quarter, fully diluted earnings per share
reflect the weighted average number of common shares outstanding under
the "if converted" method which assumes conversion as of the bond
issuance date of the Debentures. Since the "if converted" method had
the effect of increasing fully diluted earnings per share
(anti-dilutive) for the three and nine months ending October 31, 1994,
primary earnings per share was used for financial statement presentation
purposes.
- 16 -
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> QTR-3
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-START> AUG-01-1994
<PERIOD-END> OCT-31-1994
<CASH> 4,573
<SECURITIES> 0
<RECEIVABLES> 63,136
<ALLOWANCES> (2,057)
<INVENTORY> 305,699
<CURRENT-ASSETS> 402,876
<PP&E> 146,530
<DEPRECIATION> (45,224)
<TOTAL-ASSETS> 551,209
<CURRENT-LIABILITIES> 179,570
<BONDS> 0
<COMMON> 157
0
0
<OTHER-SE> 205,112
<TOTAL-LIABILITY-AND-EQUITY> 551,209
<SALES> 160,091
<TOTAL-REVENUES> 160,091
<CGS> 75,674
<TOTAL-COSTS> 148,264
<OTHER-EXPENSES> 3,533
<LOSS-PROVISION> 414
<INTEREST-EXPENSE> 3,241
<INCOME-PRETAX> 8,294
<INCOME-TAX> 3,574
<INCOME-CONTINUING> 4,720
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,720
<EPS-PRIMARY> 0.30
<EPS-DILUTED> 0.30
</TABLE>
