Toys "R" Us Blames Accounting for Delayed Report
Toys "R" Us Inc., the nation's second-largest toy seller, on Friday announced it would be forced to delay the filing its annual report due to an issue with income tax accounting.
Now privately held, the company reported it has not yet completed financial statements for the quarter and 2006 fiscal year that ended Feb. 3. The company now expects to file the annual report, Form 10-K, by May 21.
"The breadth of the additional internal work and analysis required due to the identified material weaknesses relating to income tax accounting has delayed the preparation of the company's financial statements," Toys "R" Us said in notifying the Securities and Exchange Commission that the report would be late.
On April 26, the company had issued a statement on financial results for the quarter and fiscal year, and said it expected to file the 10-K in five days. Friday's announcement came just eight days later.
Toys "R" Us spokeswoman Kathleen Waugh said Friday she could not provide details on the income tax issue, but said it was not expected to affect the sales and profit figures released last week.
Although the company went private in July 2005, when it was sold to a consortium for $6.6 billion, it discloses its financial performance because some of its bonds are publicly traded.
Last week's financial report said the company posted a profit of $199 million for the 14-week period ending Feb. 3, a 40.1 percent increase from the $142 million recorded in the 13 weeks ended Jan. 28, 2006.
Quarterly sales were $5.7 billion, up 15.8 percent from a year earlier.
The company finished fiscal 2006, which had 53 weeks, with $85 million in profit, compared to a loss of $384 million for fiscal 2005, a 52-week year. Annual sales rose 15.2 percent to $13.05 billion. Only Wal-Mart Stores Inc. sells more toys.
Toys "R" Us has 1,271 toy stores and 254 Babies "R" Us stores.