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 July 31, 1995. 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)
Delaware 13-3228013
(State of incorporation) (I.R.S. Employer Ident. 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
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, 15,746,297 shares outstanding
at the close of business on July 31, 1995.
TIFFANY & CO. AND SUBSIDIARIES
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED JULY 31, 1995
PART I FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Consolidated Balance Sheets - July 31, 1995
(Unaudited) and January 31, 1995 3
Consolidated Statements of Income - for the
three and six months ended July 31, 1995
and 1994 (Unaudited) 4
Consolidated Statements of Stockholders' Equity -
for the three and six months ended
July 31, 1995 (Unaudited) 5
Consolidated Statements of Cash Flows - for
the six months ended July 31, 1995 6
and 1994 (Unaudited)
Notes to Consolidated Financial Statements 7-8
(Unaudited)
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-11
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-Holders 12
Item 6. Exhibits and Reports on Form 8-K 12
(a) Exhibits
(b) Reports on Form 8-K
- 2 -
CAPTION
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
TIFFANY & CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
July 31, January 31,
1995 1995*
(Unaudited)
ASSETS
Current assets:
Cash and short-term investments $ 30,655 $ 44,318
Accounts receivable, less allowances of
$5,246 and $5,721 53,416 61,622
Income tax receivable 0 7,925
Inventories 299,698 270,075
Prepaid expenses 23,492 17,868
-------- --------
Total current assets 407,261 401,808
Property and equipment, net 111,894 103,478
Deferred income taxes 14,763 14,094
Other assets, net 30,036 31,992
-------- --------
$563,954 $551,372
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 55,995 $ 60,696
Accounts payable and accrued liabilities 87,404 81,640
Income taxes payable 7,519 13,607
Merchandise and other customer credits 9,032 8,529
-------- --------
Total current liabilities 159,950 164,472
Long-term trade payable 31,103 27,591
Reserve for product return 13,053 13,103
Long-term debt 101,500 101,500
Deferred income taxes 2,482 3,298
Postretirement/employment benefit obligation 17,457 16,581
Other long-term liabilities 3,369 3,130
Commitments and contingencies
Stockholders' equity:
Common Stock, $.01 par value; authorized
30,000 shares, issued 15,746 and 15,703 157 157
Additional paid-in capital 72,955 71,821
Retained earnings 156,297 151,032
Foreign currency translation adjustments 5,631 (1,313)
-------- --------
Total stockholders' equity 235,040 221,697
-------- --------
$563,954 $551,372
======== ========
* Reclassified for comparative purposes
See notes to consolidated financial statements
- 3 -
CAPTION
TIFFANY & CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share amounts)
For The For The
Three Months Ended Six Months Ended
July 31, July 31,
1995 1994 1995 1994
Net sales $184,682 $152,257 $334,826 $283,464
Cost of goods sold 88,264 73,336 161,045 137,344
-------- -------- -------- --------
Gross profit 96,418 78,921 173,781 146,120
Selling, general and administrative
expenses 83,489 69,520 153,761 130,303
Provision for uncollectible accounts 362 383 696 686
-------- -------- -------- --------
Income from operations 12,567 9,018 19,324 15,131
Other expenses, net 3,222 2,955 6,183 5,771
-------- -------- -------- --------
Income before income taxes 9,345 6,063 13,141 9,360
Provision for income taxes 4,037 2,613 5,673 4,034
-------- -------- -------- --------
Net income $ 5,308 $ 3,450 $ 7,468 $ 5,326
======== ======== ======== =========
Net income per share:
Primary $ 0.33 $ 0.22 $ 0.47 $ 0.34
======== ======== ======== =========
Fully diluted $ 0.33 $ 0.22 $ 0.47 $ 0.34
======== ======== ======== =========
Weighted average number of common shares:
Primary 15,962 15,895 15,912 15,845
Fully diluted 16,939 16,817 16,927 16,811
See notes to consolidated financial statements.
- 4 -
TIFFANY & CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
(in thousands)
Foreign
Total Additional Currency
Stockholders' Common Stock Paid-In Retained Translation
Equity Shares Amount Capital Earnings Adjustments
------------- ------ ------ ------- -------- -----------
BALANCES, January 31, 1995 $221,697 15,703 $157 $71,821 $151,032 $(1,313)
Issuance of Common Stock 598 19 - 598 - -
Exercise of stock options 231 15 - 231 - -
Tax benefit from exercise of
stock options 107 - - 107 - -
Cash dividends on Common Stock (1,101) - - - (1,101) -
Foreign currency translation
adjustments 7,893 - - - - 7,893
Net income 2,160 - - - 2,160 -
------- ------ ---- ------ -------- -------
BALANCES, April 30, 1995 231,585 15,737 157 72,757 152,091 6,580
======= ====== ==== ====== ======= =======
Exercise of stock options 113 9 - 113 - -
Tax benefit from exercise of
stock options 85 - - 85 - -
Cash dividends on Common Stock (1,102) - - - (1,102) -
Foreign currency translation
adjustments ( 949) - - - - ( 949)
Net income 5,308 - - - 5,308 -
------- ------ ---- ------ -------- -------
BALANCES, July 31, 1995 $235,040 15,746 $157 $72,955 $156,297 $ 5,631
======= ====== ==== ====== ======= =======
See notes to consolidated financial statements
- 5 -
CAPTION
TIFFANY & CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands) For the
Six Months Ended
July 31,
1995 1994*
--------- ---------
Cash Flows From Operating Activities:
Net income $ 7,468 $ 5,326
Adjustments to reconcile net income to net
cash provided by/(used in) operating activities:
Depreciation and amortization 9,037 7,467
Provision for uncollectible accounts 696 686
Reduction in reserve for product return (50) (343)
Provision for inventories 1,310 1,412
Deferred income taxes (1,613) (489)
Income tax receivable 7,925 (1,340)
Loss on sale of fixed assets 609 -
Provision for postretirement/employment benefits 876 1,502
(Increase)/decrease in assets and increase/
(decrease) in liabilities
Accounts receivable 10,198 10,065
Inventories (16,610) (19,492)
Prepaid expenses (4,999) (2,442)
Other assets, net 1,354 (3,595)
Accounts payable 5,213 (8,998)
Accrued liabilities (563) 1,177
Income taxes payable (6,620) (2,918)
Merchandise and other customer credits 503 154
Other long-term liabilities 229 23
-------- --------
Net cash provided by/(used in) operating activities 14,963 (11,805)
-------- --------
Cash Flows From Investing Activities:
Capital expenditures (15,903) (6,626)
Proceeds from sale of fixed assets 82 -
Other - (133)
-------- --------
Net cash used in investing activities (15,821) (6,759)
-------- --------
Cash Flows From Financing Activities:
(Decrease)/increase in short-term borrowings (11,736) 22,877
Issuance of Common Stock 598 -
Proceeds from exercise of stock options 344 390
Tax benefit from exercise of stock options 192 116
Cash dividends on Common Stock (2,203) (2,194)
-------- --------
Net cash (used in)/provided by financing activities (12,805) 21,189
Net (decrease)/increase in cash and
short-term investments (13,663) 2,625
Cash and short-term investments at beginning
of year 44,318 4,994
-------- --------
Cash and short-term investments at end of six
months $ 30,655 $ 7,619
======== ========
Supplemental Disclosure Of Cash Flow Information:
Cash paid during the six months for:
Interest expense $ 6,365 $ 7,006
======== ========
Income taxes (Net of $7,925 Federal income
tax refund) $ 5,678 $ 8,551
======== ========
*Reclassified for comparative purposes
See notes to consolidated financial statements
- 6 -
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 July 31, 1995 and the results of operations and
cash flows for the interim periods presented. The audited financial
statements for January 31, 1995 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 three and six months ended July 31, 1995
and 1994 are not necessarily indicative of the results of the entire
fiscal year.
2. INVENTORIES
Inventories at July 31, 1995 and January 31, 1995 are summarized
as follows:
July 31, January 31,
1995 1995
(in thousands)
-------- ----------
Finished goods $247,910 $227,412
Raw materials 48,509 38,262
Work in process 6,482 6,869
-------- --------
302,901 272,543
Reserves (3,203) (2,468)
-------- --------
$299,698 $270,075
======== ========
At July 31, and January 31, 1995, $205,829,000 and $189,943,000,
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 $11,070,000 and $9,770,000
at July 31, 1995 and January 31, 1995, respectively. The LIFO
valuation method had the effect of decreasing net income by $0.01 per
share, for the three month periods ended July 31, 1995 and 1994,
respectively. The LIFO valuation method had the effect of decreasing
net income by $0.05 per share for the six month periods ended July 31,
1995 and 1994, respectively.
- 7 -
3. REVOLVING CREDIT FACILITY
In June 1995, the Company entered into an agreement for a new five-year
$130,000,000 multicurrency revolving credit facility which replaced a
$100,000,000 revolving credit facility and yen 2,500,000,000
($28,275,000) non-collateralized line of credit, both of which expired
in July 1995. The new syndicated facility entitles the Company to
borrow up to $25,000,000 on a pro-rata, non-collateralized basis from
each of four banks and up to $30,000,000 from the agent bank at interest
rates based upon a prime rate or reserve adjusted LIBOR.
4. EARNINGS PER SHARE
Primary earnings per common share data has 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 the assumed conversion
of the subordinated debentures using the "if converted" method.
5. SUBSEQUENT EVENT
On August 21, 1995, Tiffany's Board of Directors declared a quarterly
dividend of $0.07 per common share. This dividend will be paid on
October 10, 1995 to stockholders of record on September 20, 1995.
- 8 -
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 in Asia-Pacific,
Europe, Canada and the Middle East.
Net sales increased 21% in the three months (second quarter) ended July 31,
1995 and rose 18% in the six months (first half) ended July 31, 1995. Sales by
channel of distribution were as follows:
Three months ended Six months ended
July 31, July 31,
(in thousands) 1995 1994 1995 1994
-------------------- ------- -------- -------- --------
U.S. Retail $ 82,140 $ 67,794 $143,909 $125,018
Direct Marketing 20,357 20,681 39,120 39,488
International Retail 82,185 63,782 151,797 118,958
------- ------- -------- --------
$184,682 $152,257 $334,826 $283,464
======= ======== ======== ========
U.S. Retail sales increased 21% in the second quarter and 15% in the first
half. Comparable store sales rose 15% in the second quarter and 12% in the
first half. New York retail sales increased 13% and 10% in the second quarter
and first half, while comparable branch store sales rose 17% and 14% in the
second quarter and first half. The sales increases resulted largely from a
greater number of retail transactions, primarily by local-resident customers
and, to a lesser extent, purchases by foreign tourists. Strong performances by
the Company's newer U.S. stores in Oak Brook, Maui and White Plains
contributed to the overall U.S. Retail sales increase.
Direct Marketing sales declined 2% in the second quarter and 1% in the first
half. Increased catalog circulation and a higher number of orders contributed
to catalog sales increases of 16% in the second quarter and 14% in the first
half. However, corporate division sales declined 11% in the second quarter and
8% in the first half, reflecting continued cautious spending by the corporate
division's customers.
International Retail sales increased 29% and 28% in the second quarter and
first half. The increases resulted from comparable store sales increases in
Japan (the Company's largest international market) of 11% in yen in both the
second quarter and first half, sales growth in other Asia-Pacific markets and
Europe, and the translation effect of a weak U.S. dollar on sales made in
foreign currencies, especially in Japanese yen. Management believes the
Company's results in Japan have benefitted from merchandising and marketing
initiatives, as well as from favorable consumer response to price reductions
made in Japan in October 1993 and June 1994.
- 9 -
The Company's reported sales and earnings results benefit from a strengthening
Japanese yen and are adversely affected by a strengthening U.S. dollar. The
Company maintains a foreign currency hedging program for merchandise purchase
transactions initiated from Japan in order to reduce the potential negative
impact on the Company's financial results of a significant strengthening of
the U.S. dollar against the yen. The Company's pretax expense related to its
hedging program was $238,000 in 1995's second quarter and $490,000 in the
first half, compared with $182,000 and $366,000 in the respective 1994
periods.
Gross margin (gross profit as a percentage of net sales) of 52.2% in the
second quarter and 51.9% in the first half compared with 51.8% and 51.5% in
the comparable 1994 periods. The increases were primarily attributable to
favorable shifts in sales mix toward the Company's retail businesses,
particularly Japan, that achieve gross margins above the Company's average.
Operating expenses (selling, general and administrative expenses and the
provision for uncollectible accounts) increased 20% in the second quarter and
18% in the first half over the corresponding 1994 periods. The increases were
largely due to: incremental occupancy, staffing and marketing expenses related
to the Company's worldwide expansion program; the weakened U.S. dollar and its
effect on the translation of overseas operating expenses into U.S. dollars;
and sales-related variable expenses (including selling fees paid to department
stores in Japan). As a percentage of net sales, the operating expense ratio
in the second quarter improved to 45.4% in 1995 versus 45.9% in 1994, and
improved in 1995's first half to 46.1% compared with 46.2% in the
corresponding 1994 period.
The above factors led to net income increasing 54% to $5,308,000, or $0.33 per
share, in the second quarter and increasing 40% to $7,468,000, or $0.47 per
share, in the first half.
FINANCIAL CONDITION
Management believes that the Company's financial condition at July 31, 1995
provides sufficient liquidity and resources to support current business
activity and planned expansion.
Working capital and the current ratio were $247,311,000 and 2.5:1 at July 31,
1995 compared with $237,336,000 and 2.4:1 at January 31, 1995. Inventories
(which represent the largest component of working capital) at July 31, 1995
were 11% higher than at January 31, 1995. A significant portion of the
increase was due to the weakened U.S. dollar and its effect on the translation
of overseas inventories into U.S. dollars and, to a lesser extent, to
merchandise purchases to support sales growth, new stores and expanded product
offerings. Inventory turnover was 1.0 times at July 31, 1995 and 0.9 times at
January 31, 1995. The Company's objective is to continue to improve inventory
performance through: refinement of replenishment systems; merchandising
management's focus on the specialized disciplines of product development,
assortment planning and inventory management; improving the presentation and
management of display inventories in each store; and assortment editing by
product category.
- 10 -
Capital expenditures were $15,903,000 in 1995's first half, compared with
$6,626,000 in 1994's first half. The increase was related to the opening
and/or renovation of retail stores, as well as relocations and/or renovations
of certain administrative and manufacturing facilities. Based on current
expansion plans, the Company expects capital expenditures in fiscal 1995 will
be approximately $30,000,000, compared with $18,977,000 in fiscal 1994.
The Company incurred a net cash inflow from operating activities of
$14,963,000 in the first half of 1995, compared with an outflow of $11,805,000
in 1994's first half. Net-debt (short-term borrowings and long-term debt,
less cash and short-term investments) and the ratio of net-debt to total
capital (net-debt and stockholders' equity) was $126,840,000 and 35% at July
31, 1995 compared with $117,878,000 and 35% at January 31, 1995. In addition,
the Company had a long-term trade payable of yen 2,750,000,000 ($31,103,000)
at July 31, 1995 and yen 2,750,000,000 ($27,591,000) at January 31, 1995 which
relates to certain merchandise repurchased in 1993 as part of the Company's
realignment of its Japan business and is payable to Mitsukoshi Ltd. on
February 28, 1998. It is management's goal, on an annual basis, to improve
inventory turnover and generate excess cash flow to reduce the ratio of net-
debt to total capital.
The Company's sources of working capital are internally generated cash flow
and funds available under a five-year, $130,000,000 multicurrency revolving
credit facility established in June 1995 to replace a $100,000,000 revolving
credit facility and a yen 2,500,000,000 ($28,275,000) non-collateralized line
of credit. Management anticipates that internally generated funds and funds
available under the new facility will be sufficient to support the Company's
planned worldwide business expansion, as well as seasonal working capital
increases typically required during the third and fourth quarters of each
year.
In August 1995, the Company entered into a lease agreement for a 270,000
square foot distribution, office and manufacturing facility which will
consolidate its existing New Jersey facilities. Under the terms of the
agreement, the Company's operating lease commitment will approximate
$3,700,000 annually over a 12-year period expected to begin in late 1996.
The Company's business is seasonal in nature, with the fourth quarter
typically representing a proportionally greater percentage of annual sales,
income from operations, net income and cash flow. Management expects such
seasonality to continue in the future.
- 11 -
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-Holders
At Registrant's Annual Meeting of Stockholders held on May 18, 1995 each of
the nominees listed below was elected a director of Registrant to hold office
until the next annual meeting of the stockholders and until his or her
respective successor has been elected and qualified. Tabulated with the name
of each of the nominees elected is the number of Common shares cast for each
nominee and the number of Common shares withholding authority to vote for each
nominee. There were no broker non-votes or abstentions with respect to the
election of directors.
Nominee Voted For Withholding Authority
William R. Chaney 14,684,332 37,659
Jane Dudley 14,674,076 47,915
Samuel L. Hayes III 14,675,028 46,963
Michael J. Kowalski 14,685,669 36,322
Charles K. Marquis 14,685,361 36,630
James E. Quinn 14,685,649 36,642
Yoshiaki Sakakura 14,508,887 213,104
William A. Shutzer 14,685,126 36,856
Geraldine Stutz 14,674,849 47,142
At such meeting, the stockholders approved the appointment of Coopers &
Lybrand L.L.P. as independent auditors of the Company's fiscal 1995 financial
statements. With respect to such appointment, 14,700,862 shares were voted to
approve, 16,066 shares were voted against, and 5,063 shares abstained from
voting. There were no broker non-votes with respect to the approval of the
appointment of Coopers & Lybrand L.L.P.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.116 Credit Agreement dated as of June 26, 1995 by and among
Tiffany & Co., Tiffany and Company, Tiffany & Co.
International, The Bank of New York, as Issuing Bank and
as Swing Line Lender, The Bank of New York, as Arranging
Agent and The Bank of New York as Administrative Agent.
10.117 Lease Agreement dated as of August 1, 1995 by and among
Fidelity Bank, National Association, not in its individual
capacity, but solely as the trustee under that certain
Trust Agreement 1995-1 dated as of July 1, 1995, as Owner-
Lessor and Tiffany and Company, a New York corporation, as
Lessee.
- 12 -
10.118 Construction Agency Agreement dated as of August 1, 1995
by and between Tiffany and Company, a New York corporation
and First Fidelity Bank, National Association, a national
banking association, not in its individual capacity but
solely as trustee pursuant to a Trust Agreement 1995-1
dated as of July 1, 1995, for design and construction of
improvements on certain land in Parsippany, New Jersey.
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: September 13, 1995 By: /s/ James N. Fernandez
James N. Fernandez
Senior Vice President - Finance
and Chief Financial Officer
(principal financial officer)
- 13 -
EXHIBIT INDEX
Exhibit
Number
10.116 Credit Agreement dated as of June 26, 1995 by and among Tiffany &
Co., Tiffany and Company, Tiffany & Co. International, The Bank of
New York, as Issuing Bank and as Swing Line Lender, The Bank of New
York, as Arranging Agent and The Bank of New York as Administrative
Agent.
10.117 Lease Agreement dated as of August 1, 1995 by and among Fidelity
Bank, National Association, not in its individual capacity, but
solely as the trustee under that certain Trust Agreement 1995-1
dated as of July 1, 1995, as Owner-Lessor and Tiffany and Company, a
New York corporation, as Lessee.
10.118 Construction Agency Agreement dated as of August 1, 1995 by and
between Tiffany and Company, a New York corporation and First
Fidelity Bank, National Association, a national banking association,
not in its individual capacity but solely as trustee pursuant to a
Trust Agreement 1995-1 dated as of July 1, 1995, for design and
construction of improvements on certain land in Parsippany, New
Jersey.
11 Statement re Computation of Per Share Earnings.
CAPTION
Item 6. TIFFANY & CO. AND SUBSIDIARIES
EXHIBIT 11 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(Unaudited)
(in thousands, except per share data)
For The For The
Three Months Ended Six Months Ended
July 31, July 31,
1995 1994 1995 1994
------- ------- ------- -------
PRIMARY EARNINGS PER SHARE:
Net income on which primary
earnings per share are based $ 5,308 $ 3,450 $ 7,468 $ 5,326
======= ======= ======= =======
Weighted average number of
common shares 15,752 15,674 15,740 15,669
Add:
Weighted average effect of the
exercise of stock options 210 221 172 176
------- ------- ------- -------
Weighted average number of shares on
which primary earnings are based 15,962 15,895 15,912 15,845
======= ======= ======= =======
Primary net income per common share $ 0.33 $ 0.22 $ 0.47 $ 0.34
======= ======= ======= =======
FULLY DILUTED EARNINGS PER SHARE:
Net income on which primary earnings
per share are based $ 5,308 $ 3,450 $ 7,468 $ 5,326
Add:
Interest and fees on convertible
subordinated debt, net of
applicable income taxes 428 494 870 988
------- ------- ------- -------
Net income on which fully diluted
earnings per share are based $ 5,736 $ 3,944 $ 8,338 $ 6,314
======= ======= ======= =======
Weighted average number of common
shares used in calculating
fully diluted earnings per share 16,046 15,924 16,034 15,918
Add:
Shares assumed upon conversion
of convertible debt, using the
"if converted" method 893 893 893 893
------- ------- ------- -------
Weighted average number of shares
used in calculating fully diluted
earnings per share 16,939 16,817 16,927 16,811
======= ======= ======= =======
Fully diluted net income per common share $ 0.33 $ 0.22 $ 0.47 $ 0.34
======= ======= ======= =======
NOTE: In anticipation of the 6 3/8% Convertible Subordinated Debenture's dilutive effect
in the fourth quarter, fully diluted earnings per share reflects 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. The "if
converted" method resulted in fully diluted earnings per share equal to primary
earnings per share for the three and six months ended July 31, 1995 and 1994.