SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: January 25, 1999
(Date of earliest event reported)
InterTAN, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 1-10062 75-2130875
(State of Incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
201 Main Street, Suite 1805
Fort Worth, Texas 76102
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(817) 348-9701
Item 2. Acquisition or Disposition of Assets
------------------------------------
On January 25, 1999, pursuant to a Share Sale Agreement dated January
23, 1999, InterTAN, Inc., a Delaware corporation (the "Registrant"), and
InterTAN Canada Ltd., a wholly-owned subsidiary of the Registrant, each
transferred and conveyed all of their respective equity interest in InterTAN
U.K. Limited, an England/Wales corporation and wholly-owned subsidiary of the
Registrant (the "Company"), to Beheer-En Beleggingsmaatschappij Antika B.V., a
company registered in the Netherlands (the "Purchaser"), for cash consideration
consisting of (pound)2,800,000. The consideration paid at closing consisted of
the repayment of certain inter-company debt owing by the Company to the
Registrant on the closing date. Post-closing, the Purchaser may be required to
pay the Registrant additional consideration as a result of certain tax savings
which may be realized by the Company and/or the Purchaser; any such future
payments will be deemed to be made in consideration for the further satisfaction
of certain inter-company debt which was owing from the Company to the Registrant
on the closing date. The Company owns and operates retail stores in the U.K.
through which it engages in the sale of a broad range of private label and brand
name consumer electronics products.
The consideration received by Registrant was determined through
arms-length negotiation between the Registrant and the Purchaser.
Item 7. Financial Statements and Exhibits.
---------------------------------
(b) Unaudited pro forma consolidated financial information
InterTAN, Inc.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma consolidated statements of operations
for the year ended June 30, 1998 and for the six months ended December 31, 1998
reflect the historical accounts of the Company adjusted to give effect to the
Company's disposition of InterTAN U.K. Limited as if the disposition had
occurred as of the beginning of each period presented.
The following unaudited pro forma consolidated balance sheet as at
December 31, 1998 reflects the historical consolidated balance sheet of
InterTAN, Inc. (the "Company") adjusted to give effect to the disposition of the
Company's operating subsidiary in the United Kingdom as if such dispositions had
taken place on December 31, 1998.
The accounts of InterTAN U.K. Limited are maintained in pounds
sterling. The statement of operations is translated using monthly average
exchange rates and the balance sheet has been translated at the exchange rate in
effect on the balance sheet date (as at December 31, 1998 the exchange rate was
1.6595 U.S. dollars to the pound sterling).
The unaudited pro forma consolidated financial information should be
read in conjunction with the historical financial statements of the Company. The
unaudited pro forma consolidated financial data is for informational purposes
only. It is not necessarily indicative of the results of operations or the
financial position which would have been attained had the disposition been
consummated at the foregoing dates and is not intended to project the Company's
financial condition on any future date or results of operations for any future
period.
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InterTAN, Inc.
Pro Forma Consolidated Statements of Operations
For the Six Months Ended December 31, 1998
- --------------------------------------------------------------------------------
(In thousands, except per share data)
Historical
Historical InterTAN Pro Forma
Consolidated UK Limited (1) Consolidated
----------------- ------------------ -----------------
Net sales and operating revenues............ $ 320,223 $ 97,141 $ 223,082
Other income................................ 129 31 98
----------------- ------------------ -----------------
320,352 97,172 223,180
----------------- ------------------ -----------------
Operating costs and expenses:
Cost of products sold.................... 181,509 57,078 124,431
Selling, general and administrative
expenses............................... 108,154 35,873 72,281
Depreciation and amortization............ 3,620 856 2,764
Initial costs of disposition of United
Kingdom Subsidiary..................... 376 376 -
----------------- ------------------ -----------------
293,659 94,183 199,476
----------------- ------------------ -----------------
Operating income............................ 26,693 2,989 23,704
Foreign currency transaction gains.......... (455) (9) (446)
Interest expense, net....................... 2,746 927 1,819
----------------- ------------------ -----------------
Income before income taxes.................. 24,402 2,071 22,331
Provision for income taxes.................. 10,933 - 10,933
----------------- ------------------ -----------------
Net income.................................. $ 13,469 $ 2,071 $ 11,398
================= ================== =================
Basic net income per
average common share................... $ 1.07 $ 0.90
Diluted net income per
average common share................... $ 0.96 $ 0.64
Average common shares outstanding........... 12,636 12,636
Average common shares outstanding
assuming dilution...................... 15,992 20,799
The accompanying notes are an integral part of these pro forma consolidated
financial statements.
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InterTAN, Inc.
Pro Forma Consolidated Statements of Operations
For the Year Ended June 30, 1998
- --------------------------------------------------------------------------------
(In thousands, except per share data)
Historical
Historical InterTAN UK Pro Forma
Consolidated Limited(1) Consolidated
------------------ --------------- -----------------
Net sales and operating revenues............ $ 541,374 $ 172,528 $ 368,846
Other income................................ 511 201 310
------------------ --------------- -----------------
541,885 172,729 369,156
------------------ --------------- -----------------
Operating costs and expenses:
Cost of products sold.................... 307,934 104,877 203,057
Selling, general and administrative
expenses............................... 211,458 75,462 135,996
Depreciation and amortization............ 7,421 1,482 5,939
Provision for business restructuring..... 12,712 12,712 -
------------------ --------------- -----------------
539,525 194,533 344,992
------------------ --------------- -----------------
Operating income............................ 2,360 (21,804) 24,164
Foreign currency transaction (gains) losses. (761) 1 (762)
Interest expense, net....................... 5,464 943 4,521
------------------ --------------- -----------------
Income before income taxes.................. (2,343) (22,748) 20,405
Provision for income taxes.................. 10,430 - 10,430
------------------ --------------- -----------------
Net income.................................. $ (12,773) $ (22,748) $ 9,975
================== =============== =================
Basic net income per
average common share................... $ (1.05) $ 0.82
Diluted net income per
average common share................... $ (1.05) $ 0.63
Average common shares outstanding........... 12,138 12,138
Average common shares outstanding
assuming dilution...................... 12,138 20,061
The accompanying notes are an integral part of these pro forma consolidated
financial statements.
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InterTAN, Inc.
Pro Forma Balance Sheet
December 31, 1998
- --------------------------------------------------------------------------------
(In thousands)
Historical Pro Forma Pro Form
Consolidated Adjustments Consolidated
--------------------------------------------------------------
Assets
Current Assets:
Cash and short-term investments........................ $ 48,817 $ (8,554) (2) $ 40,263
Accounts receivable, less allowance for
doubtful accounts................................... 16,370 (4,727) (3) 11,643
Inventories............................................ 158,779 (49,869) (3) 108,910
Other current assets................................... 8,426 (4,666) (3) 3,760
Deferred income taxes.................................. 365 - 365
--------------------------------------------------------------
Total current assets............................... 232,757 (67,816) 164,941
Property and equipment, less accumulated
depreciation and amortization.............................. 26,253 (7,091) (3) 19,162
Other assets.................................................... 551 - 551
--------------------------------------------------------------
$ 259,561 $ (74,907) $ 184,654
==============================================================
Liabilities and Stockholders' Equity
Current Liabilities:
Short-term bank borrowings............................. $ 11,617 $ (11,617) (3) $ -
Accounts payable....................................... 33,987 (19,580) (3) 14,407
Accrued expenses....................................... 48,430 (13,037) (4) 35,393
Income taxes payable................................... 21,889 - 21,889
--------------------------------------------------------------
Total current liabilities......................... 115,923 (44,234) 71,689
9% convertible subordinated debentures.......................... 36,894 - 36,894
Other liabilities............................................... 7,088 (739) (3) 6,349
--------------------------------------------------------------
159,905 (44,973) 114,932
--------------------------------------------------------------
Stockholders' Equity:
Preferred stock........................................ - - -
Common stock........................................... 12,849 - 12,849
Additional paid-in capital............................. 117,391 - 117,391
Retained earnings (deficit)............................ 3,221 (34,118) (5) (30,897)
Foreign currency translation effects................... (33,805) 4,184 (6) (29,621)
--------------------------------------------------------------
Total stockholders' equity........................ 99,656 (29,934) 69,772
--------------------------------------------------------------
$ 259,561 $ (74,907) $ 184,654
==============================================================
The accompanying notes are an integral part of these pro forma consolidated
financial statements.
5
(1) Represents the historical results of operations of InterTAN U.K.
Limited for the year ended June 30, 1998 and for the six months
ended December 31, 1998, which are being removed for pro forma
purposes from the Company's consolidated results of operation for
the same periods.
(2) Represents the cash recorded in the accounts of InterTAN U.K.
Limited of $13,201,000 less the proceeds from the sale of
approximately(pound)2.8 million, or $4,647,000.
(3) Represents the book value of the assets and liabilities recorded in
the accounts of InterTAN U.K. Limited, all of which have been sold
in connection with the disposition.
(4) Represents the accrued liabilities recorded in the accounts of
InterTAN U.K. Limited of $15,257,000, less an accrual for the
estimated selling costs born by the Company.
(5) Represents the initial estimate of the loss on disposition of
InterTAN U.K. Limited.
(6) Represents the estimated cummulative foreign currency translation
loss associated with the Company's investment in InterTAN U.K.
Limited, which will be recognized as part of the overall loss on
disposition.
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(c) Exhibits
Exhibit No. Description
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2.1 Share Sale Agreement dated January 23, 1999 between
InterTAN, Inc. and Beheer-En Beleggingsmaatschappij
Antika B.V.
10.1 Deed of Indemnity dated January 23, 1999 between
InterTAN, Inc., Tandy Corporation, InterTAN Canada
Ltd., The Carphone Warehouse Limited and Worldwide
Telecommunications Ltd.
10.2 Tax Deed dated January 23, 1999 between InterTAN,
Inc. and Beheer-En Beleggingsmaatschappij Antika B.V.
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SIGNATURES
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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.
InterTAN, Inc.
February 16, 1999 By: /s/ David S. Goldberg
---------------------------
David S. Goldberg
Vice President, Secretary
and General Counsel
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INDEX TO EXHIBITS
Exhibit No. Description
- ---------- -----------
2.1 Share Sale Agreement dated January 23, 1999 between InterTAN,
Inc. and Beheer-En Beleggingsmaatschappij Antika B.V.
10.1 Deed of Indemnity dated January 23, 1999 between InterTAN,
Inc., Tandy Corporation, InterTAN Canada Ltd., The Carphone
Warehouse Limited and Worldwide Telecommunications Ltd.
10.2 Tax Deed dated January 23, 1999 between InterTAN, Inc. and
Beheer-En Beleggingsmaatschappij Antika B.V.