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| RadioShack 1995 10-K Report (Partial 10-K shown; subscribers can see the entire 10-K report.) |
0000096289-96-000004.hdr.sgml : 19960329
ACCESSION NUMBER: 0000096289-96-000004
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 2
CONFORMED PERIOD OF REPORT: 19951231
FILED AS OF DATE: 19960328
SROS: NYSE
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: TANDY CORP /DE/
CENTRAL INDEX KEY: 0000096289
STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-RADIO TV & CONSUMER ELECTRONICS STORES [5731]
IRS NUMBER: 751047710
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-05571
FILM NUMBER: 96539973
BUSINESS ADDRESS:
STREET 1: 1800 ONE TANDY CNTR
STREET 2: P O BOX 17180
CITY: FORT WORTH
STATE: TX
ZIP: 76102
BUSINESS PHONE: 8173903700
MAIL ADDRESS:
STREET 1: P O BOX 17180
CITY: FORTH WORTH
STATE: TX
ZIP: 76102
FORMER COMPANY:
FORMER CONFORMED NAME: TANDY LEATHER CO
DATE OF NAME CHANGE: 19681216
FORMER COMPANY:
FORMER CONFORMED NAME: AMERICAN HIDE & LEATHER CO
DATE OF NAME CHANGE: 19660825
10-K
1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) FOR
THE TRANSITION PERIOD
Commission file number 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
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Name of each exchange
Title of each class on which registered
Common Stock, par value $1 per share New York Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
None
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. ____
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
--- ----
As of March 19, 1996, the aggregate market value of the
voting stock held by non-affiliates of the registrant was
$2,359,073,020 based on the New York Stock Exchange closing
price.
As of March 19, 1996, there were 60,907,447 shares of the
registrant's Common Stock outstanding.
Documents Incorporated by Reference
Portions of the Proxy Statement for the 1996 Annual Meeting
of Stockholders are incorporated by reference into Part III.
The Index to Exhibits is on Sequential Page No. 57.
Total Pages 159.
(This page intentionally left blank.)
PART I
ITEM 1. BUSINESS.
GENERAL
Tandy Corporation, a Delaware corporation, was incorporated
in 1967 ("Tandy" or the "Company"). The Company engages in
the retail sale of consumer electronics including personal
computers primarily in the United States. The Company's
retail operations include the RadioShack(SM), McDuff
Electronics(R), The Edge in Electronics(R), Computer City(R)
and Incredible Universe(R) store chains. See Item 7
"Management's Discussion and Analysis of Results of
Operations and Financial Condition" for a discussion of
divisional sales data.
RadioShack. RadioShack is the Company's largest
operating division. At December 31, 1995, the RadioShack
division operated 4,831 company-owned stores, including
73 stores in the Specialty Retail Group, located
throughout the United States. These stores average
approximately 2,450 square feet in area and are located
in major malls, strip centers and individual store
fronts, primarily in metropolitan markets. To provide
RadioShack products to smaller communities, RadioShack
had on the same date a network of 2,005 dealer/franchise
stores. The dealers are generally engaged in other
retail operations and augment their sales with RadioShack
products. This network included 69 international dealers
at December 31, 1995.
The company-owned RadioShack(SM) stores carry a broad
assortment of primarily private label electronic parts
and accessories, audio/video equipment, digital satellite
systems, personal computers and cellular and conventional
telephones, as well as specialized products such as
scanners, electronic toys and hard to find batteries.
Personal computers, which account for approximately 10.6%
of the RadioShack division's sales, primarily target
entry level users seeking computers for home, individual
and small business use. RadioShack also provides access
to third party services such as cellular phone, direct
satellite programming, pager service and programming from
other wireless communication providers. RadioShack plans
to expand its company-owned store base to 5,000 locations
by the year 2000. RadioShack is also focusing on
Alternative Channels of Distribution ("ACD"), which are
geared to enhance its "service oriented" approach. A few
ACDs include RadioShack Gift Express(SM) and RadioShack
Unlimited(SM).
On December 30, 1994, the Company adopted a business
restructuring plan to close or convert 233 stores which
included VideoConcepts(R) stores, McDuff Electronics mall
stores and a small number of McDuff Electronics and
Appliance Supercenters. The stores were closed during the
first quarter of 1995. Of the 233 stores, 151
VideoConcepts, 30 McDuff mall stores and 19 McDuff
Supercenters were closed and 33 sites were converted to
RadioShack or Computer City Express(SM) stores. On
January 3, 1995, the Company announced that the Tandy
Name Brand Retail Group would be dissolved and the 73
continuing stores would become part of the Tandy
Specialty Retail Group. See Item 7 "Management's
Discussion and Analysis of Results of Operations and
Financial Condition" and Note 4 of the Notes to
Consolidated Financial Statements for more information on
the plan.
The Company also closed 110 Tandy Name Brand stores in
the first quarter of 1993. See Item 7 "Management's
Discussion and Analysis of Results of Operations and
Financial Condition" and Note 4 of the Notes to
Consolidated Financial Statements for more information.
Computer City. As of December 31, 1995, the Company
and its subsidiaries had 99 Computer City stores open,
including five in Europe and six in Canada. The Computer
City chain operates primarily as a supercenter format
featuring many name brand computers, software and related
products, including IBM, Apple, Sony, Lotus, Borland,
Microsoft, Packard Bell, Compaq, AST and Hewlett-Packard.
The eighty-eight Computer City SuperCenters average about
22,700 square feet and carry approximately 5,000
products. At December 31, 1995, there were 11 Computer
City Express stores which are approximately 12,300 square
feet and serve smaller markets. The Company plans to
open less than 20 additional stores in 1996, which may
include three Computer City Express stores.
Incredible Universe. At December 31, 1995, Tandy and
its subsidiaries operated 17 Incredible Universe stores.
These stores are approximately 184,000 square feet and
offer a broad selection of consumer electronics and
appliances. The Company plans to open at least three
stores in 1996, including a store in Atlanta which will
open in the first quarter.
Supporting the retail operations is an extensive
infrastructure that includes:
A&A International, Inc. - This wholly-owned subsidiary
of the Company serves the wide-ranging international
import/export, sourcing, evaluation, logistics and
quality control needs of the Company. A&A also provides
services for outside customers, such as InterTAN Inc.
("InterTAN"). Most of A&A's activity for InterTAN
involves sourcing of goods from manufacturers in the Far
East. For more discussion on InterTAN see Note 22 of the
Notes to Consolidated Financial Statements.
Tandy Service Centers - The Company maintains a large
service and support network in the consumer electronics
retail industry. These centers repair name brand and
private label products sold through all of the Company's
retail distribution channels. These centers are also the
primary support for The Repair Shop at RadioShack
program. At December 31, 1995 there were 139 service
centers in the U.S. and Canada; however, the Company
plans to close twelve of these centers in the first
quarter of 1996. The Tandy Service division stocks over
one million parts.
Regional Distribution Centers - The 14 distribution
centers operated by the Company ship over 900,000 cartons
each month to the Company's retail outlets. This group
also supports the RadioShack Gift Express and RadioShack
Unlimited services and Tandy's new cross-docking
facility.
Tandy Information Services ("TIS") - TIS collects
information from the retail stores nationwide and updates
large databases with sales and other information. These
databases are sophisticated marketing tools benefiting
every phase of the Company's operations. TIS also
processes inventory, accounting, payroll,
telecommunications and other operating information for
all of the Company's operations. In addition,
specialized information is tracked for the Company's
distribution and corporate activities.
Tandy Credit Corporation - This operation was a wholly
owned subsidiary of the Company that helped to support
sales of the Company's retail operations and provided the
retail divisions with additional marketing flexibility
through the utilization of credit promotions. In the
past, this group maintained and managed Tandy's various
private label credit cards.
In December 1994, the Company sold the Computer City
and Incredible Universe credit card portfolios to SPS
Transaction Services, Inc. ("SPS"), a majority-owned
subsidiary of Dean Witter, Discover & Co. Effective
March 30, 1995, the Company also completed the sale of
the RadioShack and Tandy Name Brand private label credit
card accounts and substantially all related accounts
receivable to SPS. As part of the completed sales
transaction, Tandy Credit Corporation was merged into
Hurley Receivables Corporation, a wholly-owned subsidiary
of SPS, and no longer exists. See Item 7 "Management's
Discussion and Analysis of Results of Operations and
Financial Condition" and Note 3 of the Notes to
Consolidated Financial Statements for more information.
Tandy Transportation, Inc. - A large fleet of tractors
and trailers transports merchandise from manufacturers or
ports of entry to the Company's regional distribution
centers and local distribution facilities and also
delivers to the Company's retail outlets.
Consumer Electronics Manufacturing - Although the
Company sold most of its manufacturing operations in 1993
and 1994, the Company still operates nine manufacturing
facilities in the United States and one overseas
manufacturing operation in China, which is a joint
venture. These 10 manufacturing facilities cover a total
of 1,330,000 square feet and employed approximately 3,000
workers and professionals as of December 31, 1995. The
Company manufactures a variety of products for use in its
consumer electronics retailing operations. These
products include audio, video, telephony, antennas, wire
and cable products and a wide variety of hard to find
parts for consumer electronic products. Most of the
Company's manufacturing output is sold through the
RadioShack store chain. The Taiwan manufacturing plant
was closed in the first half of 1995 and its products are
now being manufactured by the China operations.
SEASONALITY
As is the case with other retail businesses, the Company's
net sales and other revenues are greater during the Christmas
season than during other periods of the year. There is a
corresponding pre-seasonal inventory build-up requiring
working capital associated with the anticipated increased
sales volume. For additional information, see Note 23 of the
Notes to Consolidated Financial Statements.
PATENTS AND TRADEMARKS
Tandy owns or is licensed to use many trademarks related to
its business in the United States and in foreign countries.
Radio Shack, RadioShack, Computer City, Incredible Universe,
McDuff Electronics, Famous Brand Electronics and Optimus are
some of the registered marks most widely used by the Company.
Tandy believes that the RadioShack, Computer City and
Incredible Universe names and marks are well-recognized by
consumers, and that these names and marks are associated with
high-quality service providers. The Company's products are
sold primarily under the RadioShack, Optimus and U.S. Logic
trademarks which are registered in the U.S. and many foreign
countries. The Company believes that the loss of the Radio
Shack name or mark would be material to its business, but
does not believe that the loss of any one trademark
registration would be material.
Tandy also owns various patents relating to retail and
support functions and various products which Tandy has
previously designed and continues to manufacture.
SUPPLIERS
The Company obtains merchandise from a large number of
suppliers from various parts of the world. Alternative
sources of supply exist for most merchandise and raw
materials purchased by the Company. As the Company's product
line is diverse, the Company would not expect a lack of
availability of any single product or raw material to have a
material impact on its operations. During 1995, the Company
sold approximately $185,000,000 of IBM computer products
which accounted for approximately 17% of total computer
hardware product sales within the Company. The increase in
sales of IBM computer hardware products is mainly due to a
contract between IBM and the RadioShack division regarding
sales of IBM Aptiva products. The exclusive IBM Aptiva
agreement terminated on December 1, 1995. Management does
not believe that the loss of this one supplier would have a
material impact on its operations.
BACKLOG ORDERS
The Company has no material backlog of orders for the
products it sells.
COMPETITION
The consumer electronics retail business is highly
competitive. The Company competes in the sale of its
products and services with department stores, mail order
houses, discount stores, general merchants, home appliance
stores and gift stores which sell comparable products
manufactured by others. Competitors range in size from local
drug and hardware stores to large chains and department
stores. Computer store chains and franchise groups, as well
as independent computer stores and several major retailers,
compete with the Company in the retail personal computer
marketplace. Consumer electronics and computer mail-order
companies also compete with the Company. The products which
compete with those sold by the Company are manufactured by
numerous domestic and foreign manufacturers. Many of these
products carry nationally recognized brand names or private
labels and are sold in markets common to the Company. Some
of the Company's competitors have financial resources equal
to or greater than the Company's resources.
Management believes that the many factors important to its
competitive position are price, quality, service and the
broad selection of electronic products and computers carried
at conveniently located retail outlets. The Company's
utilization of trained personnel and its ability to use
national and local advertising media are important to the
Company's ability to compete in the consumer electronics
marketplace. Management of the Company believes it is a
strong competitor with respect to each of the factors
referenced above. Given the highly competitive nature of the
consumer electronics retail business, no assurance can be
given that the Company will continue to compete successfully
with respect to each of the factors referenced above. Also,
the Company would be adversely affected if its competitors
were to offer their products at significantly lower prices,
introduce innovative or technologically superior products not
yet available to the Company or if the Company were unable to
obtain products in a timely manner for an extended period of
time.
The Company focuses on various types of store formats to
address the marketplace. Each of the Company's retailing
formats uses a distinct but complementary path to the
marketplace, based on its unique customer appeal, marketing
strengths and margin structure.
RadioShack. RadioShack stores offer the shopping
convenience of approximately 6,800 dealer and
company-owned stores, primarily private label
high-quality products, unique selection,
knowledgeable personnel and excellent customer
service, including its "service-oriented" approach.
RadioShack has formed strategic alliances with key
vendors in computers, home security and wireless
communications to augment the strong position that it
has historically maintained in core product
categories such as batteries, communications
equipment, antennas and electronic components and
accessories.
The Specialty Retail Group of RadioShack is comprised
of 94 retail outlets, including 73 units that have
been integrated from the now closed Tandy Name Brand
division. The Tandy Specialty Retail Group carries
name brand consumer electronics and appliances
through four distinctly different types of store
formats.
Computer City. Computer City stores offer
approximately 5,000 different name brand items, great
prices and world-class customer service on computers,
computer software and accessories. While the
SuperCenters average approximately 22,700 square
feet, Computer City Express stores average 12,300
square feet, serve smaller markets and also
supplement SuperCenters in larger markets.
Incredible Universe. Incredible Universe gigastores
provide the customer with a "universe" of choices
with approximately 184,000 square feet of over 85,000
different stock-keeping units, including name brand
consumer electronics and appliances.
The Company has faced intense competition in its consumer
electronics retailing businesses. Competition is driven by
technology and product cycles, as well as the economy. In
the consumer electronics retailing business, competitive
factors include price, product quality, product features,
consumer services, manufacturing and distribution capability
and brand reputation.
RESEARCH AND DEVELOPMENT
Research and development expenditures are not significant.
EMPLOYEES
As of December 31, 1995, the Company had approximately
49,300 employees. The preceding number includes
approximately 4,000 temporary retail employees which were
hired for the Christmas selling season. Management of the
Company considers the relationship between the Company and
its employees to be good. It does not anticipate any work
stoppage due to labor difficulties.
ITEM 2. PROPERTIES.
Information on the Company's properties is in "Management's
Discussion and Analysis of Results of Operations and
Financial Condition" and the financial statements included in
this Form 10-K and is incorporated herein by reference. The
following items are discussed further on the referenced
pages:
Page
Retail Outlets 15
Property, Plant and Equipment 43
Leases 45
The Company leases rather than owns most of its retail
facilities. However, the buildings of five Incredible
Universe stores are owned rather than leased. The land and
building of one Computer City store are owned by the Company.
The RadioShack and Computer City stores are located primarily
in major shopping malls, stand-alone buildings or shopping
centers owned by other companies. The Company owns most of
the property on which its executive offices are located in
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