SECURITIES & 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 Period Ended June 30, 1994 ------------- [ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition period from ____ to ____ Commission File Number 1-9357 ------ TYCO TOYS, INC. - ------------------------------------------------------------------------------ (Exact name of Registrant as specified in its charter) Delaware 13-3319358 - ------------------------ ------------------ (State of Incorporation) (I.R.S. Employer Identification No.) 6000 Midlantic Drive, Mt. Laurel, New Jersey 08054 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (609) 234-7400 - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 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, and (2) has been subject to such filing requirements for the past 90 days. YES X NO ------- ------- Number of shares outstanding of each class of Registrant's Stock as of August 9, 1994: Common, $.01 par value.............................. 34,676,726 shares Preferred, 6% Series B, $.10 par value.............. 47,619 shares TYCO TOYS, INC. AND SUBSIDIARIES FORM 10-Q JUNE 30, 1994 INDEX Part I. Financial Information Page - ------------------------------ ---- Item 1. Financial Statements Consolidated Balance Sheets - June 30, 1994 and 1993 and December 31, 1993 3 Consolidated Statements of Operations - Quarters and Six Months Ended June 30, 1994 and 1993 4 Consolidated Statements of Stockholders' Equity - Six Months Ended June 30, 1994 and Year Ended December 31, 1993 5 Consolidated Statements of Cash Flows - Six Months Ended June 30, 1994 and 1993 6 Notes to Consolidated Financial Statements 7-11 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 12-13 Part II. Other Information - -------------------------- Item 1. Legal Proceedings 14 Item 5. Other Information 14 Item 6. Exhibits and Reports on Form 8-K 14 -2- Part I. Financial Information. Item 1. Financial Statements. Tyco Toys, Inc. and Subsidiaries Consolidated Balance Sheets (in thousands, except share amounts) June 30, December 31, ------------------------------ 1994 1993 1993 -------------- -------------- ------------- Assets (unaudited) Current assets Cash and cash equivalents $ 18,300 $ 25,620 $ 32,036 Receivables, net 195,713 156,598 219,232 Inventories, net 111,605 137,560 93,902 Prepaid expenses and other current assets 23,472 23,025 27,187 Deferred taxes 17,636 24,273 16,489 -------- -------- -------- Total current assets 366,726 367,076 388,846 Property and equipment, net 52,551 75,497 50,182 Other assets Goodwill, net 234,258 239,514 235,824 Deferred taxes 25,635 - 25,635 Other assets 18,757 18,438 14,682 -------- -------- -------- Total other assets 278,650 257,952 276,141 -------- -------- -------- Total assets $697,927 $700,525 $715,169 ======== ======== ======== Liabilities and Stockholders' Equity Current liabilities Notes and acceptances payable $ 81,885 $ 27,859 $ 68,963 Current portion of long-term debt 15,312 14,837 15,259 Accounts payable 46,482 55,356 62,602 Accrued expenses and other current liabilities 74,293 71,014 109,681 -------- -------- -------- Total current liabilities 217,972 169,066 256,505 Long-term debt, net of current portion 160,674 189,017 179,771 Deferred income taxes and other liabilities 1,449 2,313 1,444 Stockholders' Equity Preferred stock, 6% Series B voting convertible, exchangeable, $.10 par value, 1,000,000 shares authorized; 47,619 shares issued and outstanding 5 - - Common stock, $.01 par value, 50,000,000 shares authorized; 34,852,316, 34,831,852 and 34,847,316 shares issued as of June 30, 1994 and 1993 and as of December 31, 1993, respectively 347 347 347 Additional paid-in capital 342,144 293,974 294,500 Retained earnings (deficit) (5,495) 61,625 7,298 Treasury stock, at cost; 175,590 shares (1,595) (1,595) (1,595) Cumulative translation adjustment (17,574) (14,222) (23,101) -------- -------- -------- Total stockholders' equity 317,832 340,129 277,449 -------- -------- -------- Total liabilities and stockholders' equity $697,927 $700,525 $715,169 ======== ======== ======== See accompanying notes to consolidated financial statements. -3- Tyco Toys, Inc. and Subsidiaries Consolidated Statements of Operations (in thousands, except per share amounts) (unaudited) For the Quarters Ended For the Six Months Ended June 30, June 30, ------------------------ ---------------------- 1994 1993 1994 1993 ----------- ----------- ---------- ---------- Net sales $158,454 $146,665 $265,245 $246,987 Cost of goods sold 89,015 81,484 151,585 137,752 -------- -------- -------- -------- Gross profit 69,439 65,181 113,660 109,235 Marketing, advertising and promotion 34,201 34,001 64,464 62,112 Selling, distribution and administrative expenses 28,324 29,444 56,220 57,608 Amortization of goodwill 1,632 1,591 3,152 3,198 -------- -------- -------- -------- Total operating expenses 64,157 65,036 123,836 122,918 -------- -------- -------- -------- Operating income (loss) 5,282 145 (10,176) (13,683) Interest and debt expense 6,873 5,561 13,434 10,957 Foreign exchange (gain) loss 1,253 263 1,089 750 Other (income) expense, net (1,114) (557) (2,392) (1,472) -------- -------- -------- -------- Interest and other expense, net 7,012 5,267 12,131 10,235 -------- -------- -------- -------- Loss before income taxes (1,730) (5,122) (22,307) (23,918) Benefit for income taxes (2,937) (1,592) (10,139) (7,438) -------- -------- -------- -------- Net income (loss) 1,207 (3,530) (12,168) (16,480) Preferred stock dividend 625 - 625 - -------- -------- -------- -------- Net income (loss) available to common shareholders $ 582 $ (3,530) $(12,793) $(16,480) ======== ======== ======== ======== Net income (loss) per common share: Primary $ 0.02 $ (0.11) $ (0.37) $ (0.51) Fully diluted $ 0.02 $ (0.11) $ (0.37) $ (0.51) Weighted average number of common shares outstanding: Primary 34,677 33,093 34,676 32,503 Fully diluted 34,677 33,093 34,676 32,503 Dividends per common share $ - $ 0.025 $ - $ 0.05 See accompanying notes to consolidated financial statements. -4- Tyco Toys, Inc. and Subsidiaries Consolidated Statements of Stockholders' Equity Year ended December 31, 1993 and Six Months Ended June 30, 1994 (unaudited) (in thousands) Preferred Stock Common Stock Additional Paid-in Capital Treasury Stock ----------------- ------------- -------------------------- -------------- Number Number Retained Number Cumulative of Par of Par Preferred Common Earnings of Translation Shares Value Shares Value Stock Stock (Deficit) Shares Amount Adjustment --------- ------ ------ ----- -------------- ---------- --------- -------------- ----------- Balance at December 31, 1992 - $- 31,830 $320 $ - $271,417 $ 79,769 176 $(1,595) $(14,670) Exercise of stock options - - 170 1 - 612 - - - - Exercise of warrants - - 2,672 26 - 22,017 - - - - Foreign currency translation - - - - - - - - - (8,431) Dividends declared - - - - - - (2,531) - - - Tax benefit from exercise of stock options - - - - - 454 - - - - Net loss - - - - - - (69,940) - - - ----- --- ------ --- ------- ------- ------ ---- ------- ------ Balance at December 31, 1993 - - 34,672 347 - 294,500 7,298 176 (1,595) (23,101) Exercise of stock options - - 5 - - 23 - - - - Issuance of preferred stock 48 $5 - - 46,996 - - - - - Preferred stock dividend - - - - 625 - (625) - - - Foreign currency translation - - - - - - - - - 5,527 Net loss - - - - - - (12,168) - - - ----- --- ------ --- ------- ------- ------ ---- ------- ------ Balance at June 30, 1994 48 $5 34,677 $347 $47,621 $294,523 $(5,495) 176 $(1,595) $(17,574) ===== === ====== === ======= ======= ====== ==== ====== ====== See accompanying notes consolidated financial statements. -5- Tyco Toys, Inc. and Subsidiaries Consolidated Statements of Cash Flows (in thousands) (unaudited) Six Months Ended June 30, ------------------- 1994 1993 ------- ------- Cash Flows from Operating Activities: Net loss $(12,793) $(16,480) Adjustments to reconcile net loss to net cash utilized by operating activities: Depreciation 10,428 12,128 Amortization 3,152 3,198 Decrease in allowance for bad debts, returns, discounts and other receivable reserves (25,215) (34,709) Decrease in allowance for obsolescence and other inventory reserves (6,234) (4,505) Change in assets and liabilities: Decrease in receivables 54,195 100,434 Increase in inventories (5,500) (38,460) Decrease in prepaid expenses and other current assets 4,194 8,934 Increase in other assets (514) (6,120) Decrease in accounts payable (17,260) (14,072) Decrease in accrued expenses and other current liabilities (37,675) (40,024) ------ ------ Total adjustments (20,429) (13,196) ------ ------ Net cash utilized by operating activities (33,222) (29,676) ------ ------ Cash Flows From Investing Activities: Disposition of property and equipment 1,200 1,817 Capital expenditures (13,771) (16,725) ------ ------ Net cash utilized by investing activities (12,571) (14,908) ------ ------ Cash Flows From Financing Activities: Repayment of long-term debt (7,297) (1,312) Increase (repayment) of notes and acceptances payable, net (1,378) 4,118 Proceeds from issuance of preferred stock 50,000 - Proceeds from issuance of common stock 23 22,584 Dividends paid - (798) ------ ------ Net cash provided by financing activities 41,348 24,592 ------ ------ Effect of exchange rate changes on cash (9,291) (5,569) ------ ------ Net Decrease in Cash and Cash Equivalents (13,736) (25,561) Cash and Cash Equivalents, Beginning of Year 32,036 51,181 ------ ------ Cash and Cash Equivalents, End of Period $ 18,300 $ 25,620 ====== ====== Cash Payments During Period For: Interest $ 13,733 $ 4,470 Taxes 282 1,603 See accompanying notes to consolidated financial statements. -6- TYCO TOYS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (1) Basis of Presentation --------------------- The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. The consolidated financial statements include the accounts of Tyco Toys, Inc. (the Company, Tyco or Tyco Toys) and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Investments in unconsolidated joint ventures and other companies are accounted for on the equity method or cost basis depending upon the level of the investment and/or the Company's ability to exercise influence over operating and financial policies. In the opinion of management, all adjustments (consisting of a normal recurring nature) considered necessary for a fair presentation of results for interim periods have been made. Certain items in the prior period's financial statements have been reclassified to conform with the current year's presentation. Due to the seasonal nature of the Company's business, the results of operations for the interim periods are not necessarily indicative of the results for a full year. The unaudited financial statements herein should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 1993 which was filed with the Securities and Exchange Commission. (2) Accounting For Income Taxes --------------------------- The Company adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109), effective January 1, 1993. There was no cumulative effect on the deferred tax balances as a result of adopting this pronouncement. In accordance with SFAS 109, deferred income taxes reflect the impact of temporary differences between values recorded for assets and liabilities for financial reporting purposes and the values utilized for measurement in accordance with current tax laws. -7- TYCO TOYS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) The tax effects of the significant temporary differences giving rise to the Company's deferred tax assets (liabilities) for the year ended December 31, 1993, which the adoption of SFAS 109 has required the Company to recognize, are as follows (in thousands): Current: Sales and product allowances $ 4,790 Co-operative advertising 4,738 Receivable reserves 4,230 Obsolescence reserve 3,934 ------ 17,692 Valuation allowance (1,203) ------ $16,489 ====== Noncurrent: Net operating losses $48,461 State temporary differences 10,411 Foreign tax credits 5,269 Depreciation (1,885) Other 5,983 ------ 68,239 Valuation allowance (42,604) ------ $25,635 ====== Management has determined, based on the Company's history of earnings from prior operations (after adjustments for nonrecurring items, restructuring charges and permanent differences), that the Company will generate sufficient taxable income in the fifteen-year carryforward period to realize the benefit of the current and prior year net operating losses. The total net deferred tax assets (both current and noncurrent) have been reduced by establishing valuation allowances aggregating $43,807,000. Based on the weight of available evidence, management has concluded that more likely than not, its future taxable income will be sufficient to support the current recognition of the total net deferred tax assets of $42,124,000. The valuation allowances have been established due to management's analysis indicating that certain tax credit carryforwards and net operating loss carryforwards, which are limited under the income tax laws, may expire prior to their full utilization. The valuation allowances include $16,836,000 related to the preacquisition net operating losses of Matchbox and $174,000 related to the Company's Belgium subsidiaries. Any subsequently recognized benefits related to these net operating losses will be allocated to reduce goodwill. The valuation allowances are generally established annually, when management undertakes a comprehensive analysis. During interim periods, management makes its best estimate of what year end balances will be to determine the interim tax provision. Changes to the valuation allowance on an interim basis, however, are and will be made, if appropriate. During the second quarter of 1994, the Company changed their estimate of what the annual effective rate should be, and recording this change resulted in a credit to the tax provision during the second quarter of approximately $2,000,000. -8- TYCO TOYS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) (3) Receivables, Net (in thousands): June 30, December 31, ---------------------- 1994 1993 1993 -------- -------- ----------- Trade $216,197 $172,322 $262,330 Other receivables 10,967 7,558 13,568 Less: Doubtful accounts 7,057 9,579 11,201 Returns, discounts and other reserves 24,394 13,703 45,465 -------- -------- -------- $195,713 $156,598 $219,232 ======== ======== ======== (4) Inventories, Net (in thousands): June 30, December 31, ---------------------- 1994 1993 1993 -------- -------- ----------- Raw materials $ 26,508 $ 34,460 $ 27,836 Work-in-process 2,101 2,960 2,355 Finished goods 93,183 109,082 80,132 Less obsolescence and other reserves 10,187 8,942 16,421 -------- -------- -------- $111,605 $137,560 $ 93,902 ======== ======== ======== (5) Legal Proceedings ----------------- Italian Litigation - ------------------ The former managing director of the Company's Italian sales and marketing subsidiary has initiated two court actions against the Company in Italy as the result of the Company's previously announced decision to close or sell the subsidiary. One action, alleging violations of Italian employment laws and regulations has been dismissed and no appeal has been taken todate. The second action, alleging breach of a letter of intent with the plaintiff for the sale of the subsidiary, resulted in the sequestration of the Company's shares in the subsidiary and has prevented the completion of the announced sale of the subsidiary to Giochi Preziosi, an Italian toy distributor. In the opinion of management and its outside counsel, the Company has meritorious legal and factual defenses to the claims made in this litigation; therefore, the outcome is not likely to have a material adverse impact on the Company's earnings, financial condition or liquidity. Lego Litigation - --------------- Tyco Industries, Inc. (Tyco Industries), a wholly-owned subsidiary of the Company, has been a defendant in proceedings in Italy, the Netherlands, and in the Federal Court of Canada in which Interlego A.G. (Lego) has asserted unfair competition claims. The Company received a favorable ruling in the Italian proceedings and an appeal has been taken by Lego. An adverse determination in any of these cases is not, in the opinion of management, likely to have a material adverse impact on the earnings, financial condition or liquidity of the Company. -9- TYCO TOYS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) Shareholder Suits - ----------------- In December 1992, a stockholder filed litigation in federal court in New Jersey asserting class action claims under the federal securities laws as a result of the announcement made by the Company on October 21, 1992 relating to its outlook for earnings. In December 1993 and January 1994, two additional stockholders filed litigation in the same court asserting claims under federal and state securities laws as a result of the Company's financial performance in 1993. Both are class action cases and they have been consolidated. The Company's outside counsel is of the opinion that the Company has substantial and meritorious defenses to these claims and there is a likelihood that the Company will prevail. Accordingly, it is the opinion of management that the outcome of this litigation is not likely to have a material adverse effect on the earnings, financial condition or liquidity of the Company. U.S. Customs - ------------ The U.S. Customs Service has issued a penalty notice of an assessment for lost duty in the amount of $1,500,000, penalties for gross negligence of $5,800,000, and penalties for fraud of $5,600,000. All of the claims arise from activities of the Company's View-Master subsidiary for the period prior to its acquisition by the Company in 1989. Management and the Company's outside counsel are of the opinion that the Company has legal and factual defenses to the penalty claims made by the U.S. Customs Service, and that the outcome of the proceedings relating to these claims, which proceedings may be protracted, are not likely to have a material adverse impact on the earnings, financial condition or liquidity of the Company. Environmental Litigation - ------------------------ Tyco Industries is a party to three matters arising out of waste hauled by a transporter to various sites, including the GEMS Landfill. In litigation relating directly to remediation of the landfill, Tyco Industries has signed a Consent Order and Trust Agreement and made a settlement contribution of an amount not material to Tyco Industries. In another matter, the court has certified class action claims of homeowners near the GEMS Landfill against approximately 150 defendants, including Tyco Industries, for various types of unspecified monetary damages, including punitive damages. In the third matter, the New Jersey Department of Environmental Protection is asserting claims for remediation expenses at a different site in Sewell, New Jersey used as a waste transfer station by the same transporter involved in the other two matters. In management's opinion, there are meritorious factual and legal defenses to these claims. Management of the Company and its outside counsel are of the opinion that these three matters are not likely to have a material adverse impact on the earnings, financial condition or liquidity of the Company. In addition, the Company will receive a contribution from a third party towards certain expenses in these matters. -10- TYCO TOYS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) Other Litigation - ---------------- The Company is involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse impact on the Company's earnings, financial condition or liquidity. (6) Net Income (Loss) Per Share --------------------------- Net income (loss) per share was calculated using the weighted average number of shares of common stock and dilutive common stock equivalents outstanding during the period. Outstanding options, convertible debentures and preferred shares were determined to be anti-dilutive for the quarter and six months ended June 30, 1993 and for the six months ended June 30, 1994 and were not materially dilutive for the quarter ended June 30, 1994; therefore, these items were excluded from the per share calculations. -11- Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL ------------------------------------------------- CONDITION AND RESULTS OF OPERATIONS. ----------------------------------- Results of Operations - --------------------- Net sales for the quarter and six months ended June 30, 1994 were $158,454,000 and $265,245,000, respectively, compared to $146,665,000 and $246,987,000 for the same periods last year, representing an increase of 8.0% and 7.4%, respectively. Increased sales for the quarter and six months ended June 30, 1994 resulted from higher domestic shipments of Matchbox vehicles, activity toys and large dolls, in addition to slightly higher sales by Tyco International, partially offset by lower sales as a result of product delays experienced by the Company's direct import business, Tyco Playtime. Gross profit for the quarter and six months ended June 30, 1994 was $69,439,000 and $113,660,000, respectively (43.8% and 42.9%, respectively, of net sales), compared to $65,181,000 and $109,235,000, respectively (44.4% and 44.2%, respectively, of net sales), for the comparable periods last year. Gross profit margins decreased for the quarter and six months ended June 30, 1994 due primarily to the replacement of sales made in 1993 of high margin action figures with shipments of lower gross margin products and reduced prices on carryover inventory in 1994. Total operating expenses for the quarter and six months ended June 30, 1994 were $64,157,000 and $123,836,000, respectively (40.5% and 46.7%, respectively, of net sales), compared to $65,036,000 and $122,918,000, respectively (44.3% and 49.8% of net sales), for the same periods last year. The marginal increase for the six months ended June 30, 1994 is principally due to volume-related expenses. Total operating expenses, expressed as a percentage of net sales, were lower for the quarter and six months ended June 30, 1994 reflecting the Company's continued cost-containment efforts. Interest and debt expense for the quarter and six months ended June 30, 1994 was $6,873,000 and $13,434,000, respectively, compared to $5,561,000 and $10,957,000, respectively, for the same periods last year as a result of higher borrowings under the Company's credit facilities. Total average debt for the six months ended June 30, 1994 was $226,803,000 at an effective interest rate of 12.0% compared to total average debt of $177,307,000 with an effective rate of 12.3% for the first six months of 1993. The Company recorded tax benefits of $2,937,000 and $10,139,000 for the quarter and six months ended June 30, 1994, respectively compared to $1,592,000 and $7,438,000, respectively, for the same periods last year reflecting an increase in the Company's overall effective tax rate. In connection with an examination of the consolidated federal income tax returns of Tyco Toys, Inc. and Subsidiaries for the fiscal years ended August 31, 1987 through August 31, 1990, the Internal Revenue Service has issued a deficiency notice to the Company. The Company has elected to appeal this determination and management believes that the final outcome of this appeal will not materially affect the results of operations (including realization of net operating loss carryforwards), financial condition or liquidity of the Company. -12- Net income for the quarter ended June 30, 1994 was $582,000 or $0.02 per share compared to a net loss of $3,530,000 or $0.11 per share for the same period last year. The net loss for the six months ended June 30, 1994 was $12,793,000 or $0.37 per share compared to $16,480,000 or $0.51 per share for the same period last year. Average shares outstanding for the quarter and six months ended June 30, 1994 were 34,677,000 and 34,676,000, respectively compared to 33,093,000 and 32,503,000, respectively, for the same periods during 1993. In 1993, warrants that were exercised into 2,672,000 shares of common stock during the first six months were reflected during that period on a weighted average basis for earnings per share purposes. Financial Condition - ------------------- Six Months Ended June 30, 1994 - ------------------------------ Cash decreased $13,736,000 to $18,300,000 at June 30, 1994 from $32,036,000 at December 31, 1993 reflecting cash utilized by operating and investing activities of $45,793,000 and the effect of exchange rate fluctuations of $9,291,000, offset by cash provided by financing activities of $41,348,000. Cash generated from the collection of receivables of $54,195,000 was used to paydown current liabilities. The Company's issuance of $50,000,000 of 6% series B voting convertible, exchangeable preferred stock generated $47,000,000 of net proceeds which were used to reduce borrowings under the Company's credit facility with NationsBank and for general corporate purposes. The preferred stock has an annual dividend yield of 6% and is convertible into Tyco common stock at a price of $10 per share. The preferred stock can be exchanged at any time for 6% convertible subordinated notes at the Company's option. Six Months Ended June 30, 1994 vs. Six Months Ended June 30, 1993 - ----------------------------------------------------------------- On a comparative basis, the first six months of 1994 reported an increase in net receivables of $39,115,000 due to increased domestic and international sales. Net inventories declined by $25,955,000 primarily due to the Company's efforts to maintain lower worldwide inventory levels. The increase of $3,279,000 in accrued expenses and other current liabilities reflects an increase in advertising, offset by a decrease in corporate tax accruals and the utilization of the purchase accounting reserves which were established as part of the 1992 Matchbox acquisition. The Company believes that its internally-generated funds combined with its existing credit facilities will provide adequate financing for its current and foreseeable levels of operation. -13- Part II. Other Information Item 1. Legal Proceedings. - ------ ----------------- Reference is made to Note 5 of Notes to Consolidated Financial Statements included in Part I, Item 1 of this report. Item 5. Other Information. - ------ ----------------- Board of Directors ------------------ On May 26, 1994, at the annual meeting of shareholders of the Company, Messrs. John A. Canning, Jr., Jerome I. Gellman and Ariel Gratch were re-elected as Directors of the Company for a term of three years. In addition, Messrs. David Golub and Jonathan Kagan have been seated as Directors pursuant to the terms of the 6% series B voting convertible, exchangeable preferred stock sold by the Company on April 15, 1994. Item 6. Exhibits and Reports on Form 8-K. - ------ -------------------------------- (a) Exhibits. --------- 11. Statements Regarding Computation of Income (Loss) Per Share - Quarters and Six Months Ended June 30, 1994 and 1993. (b) Reports on Form 8-K. -------------------- On April 15, 1994, the Company filed Form 8-K relating to the issuance of $50,000,000 of 6% series B voting convertible, exchangeable preferred stock, including a Certificate of Designation relating to the preferred issue, which was filed as an exhibit. -14- SIGNATURE --------- 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. TYCO TOYS, INC. --------------- Registrant Date August 9, 1994 -------------- By: /s/ Harry J. Pearce ------------------------- Harry J. Pearce Vice Chairman, Chief Financial Officer, and Director -15- EXHIBIT INDEX Exhibit No. Description Page - ----------- ----------- ---- 11.1 Statements regarding computation of income (loss) per share for the quarters ended June 30, 1994 and 1993. 17-18 11.2 Statements regarding computation of loss per share for the six months ended June 30, 1994 and 1993. 19-20 -16-