UNITED STATES
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 quarterly period ended April 30, 2007.
OR
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: 1-9494
TIFFANY & CO.
(Exact name of registrant as specified in its charter)
Delaware 13-3228013
(State of incorporation) (I.R.S. Employer
Identification 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 .
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
One).
Large Accelerated filer X Accelerated filer ___ Non-Accelerated filer ___
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). Yes . No X .
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, 136,739,921 shares outstanding at the close
of business on May 31, 2007.
TIFFANY & CO. AND SUBSIDIARIES
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED APRIL 30, 2007
PART I - FINANCIAL INFORMATION PAGE
----
Item 1. Financial Statements
Condensed Consolidated Balance Sheets - April 30, 2007,
January 31, 2007 and April 30, 2006 (Unaudited) 3
Condensed Consolidated Statements of Earnings - for the
three months ended April 30, 2007 and 2006 (Unaudited) 4
Condensed Consolidated Statements of Stockholders' Equity -
for the three months ended April 30, 2007 and
Comprehensive Earnings - for the three months
ended April 30, 2007 and 2006 (Unaudited) 5
Condensed Consolidated Statements of Cash Flows - for the
three months ended April 30, 2007 and 2006 (Unaudited) 6
Notes to Condensed Consolidated Financial Statements
(Unaudited) 7-10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11-17
Item 3. Quantitative and Qualitative Disclosures About Market Risk 18
Item 4. Controls and Procedures 19
PART II - OTHER INFORMATION
Item 1A. Risk Factors 20
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 21
Item 5. Other Information 22
Item 6. Exhibits 23
(a) Exhibits
2
PART I. Financial Information
Item 1. Financial Statements
TIFFANY & CO. AND SUBSIDIARIES
------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
(Unaudited)
-----------
(in thousands, except per share amounts)
April 30, January 31, April 30,
2007 2007 2006
------------------- -------------------- -------------------
ASSETS
Current assets:
Cash and cash equivalents $ 117,269 $ 176,503 $ 180,541
Short-term investments 10,000 15,500 46,175
Accounts receivable, less allowances
of $6,261, $7,900 and $6,197 162,047 168,973 156,124
Inventories, net 1,295,150 1,214,622 1,140,829
Deferred income taxes 71,697 73,455 73,501
Prepaid expenses and other current assets 74,048 57,591 54,180
------------------- -------------------- ------------------
Total current assets 1,730,211 1,706,644 1,651,350
Property, plant and equipment, net 938,600 932,389 888,221
Deferred income taxes 52,570 39,707 27,361
Other assets, net 177,265 166,770 184,919
------------------- -------------------- ------------------
$ 2,898,646 $ 2,845,510 $ 2,751,851
=================== ==================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 115,811 $ 106,681 $ 47,726
Current portion of long-term debt 5,451 5,398 6,244
Accounts payable and accrued liabilities 177,888 215,967 210,215
Income taxes payable 36,479 63,114 38,040
Merchandise and other customer credits 62,332 61,511 55,614
------------------- -------------------- ------------------
Total current liabilities 397,961 452,671 357,839
Long-term debt 401,716 406,383 428,450
Pension/postretirement benefit obligations 89,937 84,466 73,949
Other long-term liabilities 138,713 97,095 87,865
Commitments and contingencies
Stockholders' equity:
Preferred Stock, $0.01 par value; authorized 2,000 shares,
none issued and outstanding - - -
Common Stock, $0.01 par value; authorized 240,000 shares,
issued and outstanding 136,635, 135,875 and 140,599 1,367 1,358 1,406
Additional paid-in capital 584,607 536,187 499,595
Retained earnings 1,277,916 1,269,940 1,288,169
Accumulated other comprehensive gain (loss), net of tax:
Foreign currency translation adjustments 21,361 11,846 14,193
Deferred hedging gain (loss) 942 2,046 (329)
Unrealized gain on marketable securities 438 178 714
Net unrealized losses on benefit plans (16,312) (16,660) -
------------------- -------------------- ------------------
Total stockholders' equity 1,870,319 1,804,895 1,803,748
------------------- -------------------- ------------------
$ 2,898,646 $ 2,845,510 $ 2,751,851
=================== ==================== ==================
See notes to condensed consolidated financial statements.
3
TIFFANY & CO. AND SUBSIDIARIES
------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
---------------------------------------------
(Unaudited)
-----------
(in thousands, except per share amounts)
Three Months Ended
April 30,
-----------------------------------------------------------
2007 2006
------------------------- -------------------------
Net sales $ 620,875 $ 539,241
Cost of sales 282,386 238,115
------------------------- -------------------------
Gross profit 338,489 301,126
Selling, general and administrative expenses 257,035 226,879
------------------------- -------------------------
Earnings from operations 81,454 74,247
Other expenses, net 3,216 3,975
------------------------- -------------------------
Earnings before income taxes 78,238 70,272
Provision for income taxes 28,579 27,130
------------------------- -------------------------
Net earnings $ 49,659 $ 43,142
========================= =========================
Net earnings per share:
Basic $ 0.36 $ 0.30
========================= =========================
Diluted $ 0.36 $ 0.30
========================= =========================
Weighted-average number of common shares:
Basic 136,488 141,941
Diluted 139,724 144,367
See notes to condensed consolidated financial statements.
4
TIFFANY & CO. AND SUBSIDIARIES
------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
---------------------------------------------------------
AND COMPREHENSIVE EARNINGS
--------------------------
(Unaudited)
-----------
(in thousands)
Accumulated
Total Other Additional
Stockholders' Retained Comprehensive Common Stock Paid-in
Equity Earnings Gain (Loss) Shares Amount Capital
------------------------------------------------------------------------------------------------------------------------------------
Balances, January 31, 2007 $ 1,804,895 $ 1,269,940 $ (2,590) 135,875 $ 1,358 $ 536,187
Implementation effect of FIN No. 48 (4,299) (4,299) - - - -
------------------------------------------------------------------------------------------
Balances, February 1, 2007 1,800,596 1,265,641 (2,590) 135,875 1,358 536,187
Exercise of stock options and vesting
of restricted stock units ("RSUs") 34,881 - - 1,229 13 34,868
Tax benefit from exercise of stock
options and vesting of RSUs 3,490 - - - - 3,490
Share-based compensation expense 8,847 - - - - 8,847
Issuance of Common Stock
under Employee Profit Sharing and
Retirement Savings Plan 2,450 - - 52 1 2,449
Purchase and retirement of Common Stock (24,997) (23,758) - (521) (5) (1,234)
Cash dividends on Common Stock (13,626) (13,626) - - - -
Deferred hedging loss, net of tax (1,104) - (1,104) - - -
Unrealized gain on marketable
securities, net of tax 260 - 260 - - -
Foreign currency translation
adjustments, net of tax 9,515 - 9,515 - - -
Amortization of net losses on benefit
plans, net of tax 348 - 348 - - -
Net earnings 49,659 49,659 - - - -
------------------------------------------------------------------------------------------
Balances, April 30, 2007 $ 1,870,319 $ 1,277,916 $ 6,429 136,635 $ 1,367 $ 584,607
==========================================================================================
Three Months Ended
April 30,
----------------------------------
2007 2006
----------------------------------
Comprehensive earnings are as follows:
Net earnings $ 49,659 $ 43,142
Other comprehensive gain (loss), net of tax:
Deferred hedging loss (1,104) (3,576)
Foreign currency translation adjustments 9,515 8,912
Unrealized gain on marketable securities 260 35
Amortization of net losses on benefit plans 348 -
-----------------------------------
Comprehensive earnings $ 58,678 $ 48,513
===================================
See notes to condensed consolidated financial statements.
5
TIFFANY & CO. AND SUBSIDIARIES
------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(Unaudited)
-----------
(in thousands)
Three Months Ended
April 30,
---------------------------------------------------
2007 2006
---------------------- -----------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 49,659 $ 43,142
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Depreciation and amortization 31,634 28,347
Excess tax benefits from share-based payment arrangements (4,988) (660)
Provision for inventories 3,061 2,644
Deferred income taxes 377 (4,876)
Provision for pension/postretirement benefits 6,582 6,671
Share-based compensation expense 8,727 7,109
Changes in assets and liabilities:
Accounts receivable 10,548 (11,896)
Inventories (75,181) (74,453)
Prepaid expenses and other current assets (14,822) (23,232)
Other assets, net (7,264) (2,359)
Accounts payable and accrued liabilities (18,838) 10,678
Income taxes payable (24,482) (22,028)
Merchandise and other customer credits 666 (920)
Other long-term liabilities 2,584 (1,922)
---------------------- -----------------------
Net cash used in operating activities (31,737) (43,755)
---------------------- -----------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities and short-term investments (134,181) (46,396)
Proceeds from sales of marketable securities and short-term investments 139,419 -
Capital expenditures (31,907) (43,928)
Notes receivable funded (2,172) -
Other 1,540 (210)
---------------------- -----------------------
Net cash used in investing activities (27,301) (90,534)
---------------------- -----------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term borrowings, net 4,582 8,023
Repayment of long-term debt (8,716) (1,730)
Repurchase of Common Stock (24,997) (79,750)
Proceeds from exercise of stock options 34,881 3,024
Excess tax benefits from share-based payment arrangements 4,988 660
Cash dividends on Common Stock (13,626) (11,403)
---------------------- -----------------------
Net cash used in financing activities (2,888) (81,176)
---------------------- -----------------------
Effect of exchange rate changes on cash and cash equivalents 2,692 2,397
---------------------- -----------------------
Net decrease in cash and cash equivalents (59,234) (213,068)
Cash and cash equivalents at beginning of year 176,503 393,609
---------------------- -----------------------
Cash and cash equivalents at end of three months $ 117,269 $ 180,541
====================== =======================
See notes to condensed consolidated financial statements.
6
TIFFANY & CO. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying condensed consolidated financial statements include the
accounts of Tiffany & Co. and all majority-owned domestic and foreign
subsidiaries (the "Company"). Intercompany accounts, transactions and
profits have been eliminated in consolidation. The interim statements are
unaudited and, in the opinion of management, include all adjustments (which
include only normal recurring adjustments) necessary to present fairly the
Company's financial position as of April 30, 2007 and 2006 and the results
of its operations and cash flows for the interim periods presented. The
condensed consolidated balance sheet data for January 31, 2007 is derived
from the audited financial statements, which are included in the Company's
Report on Form 10-K and should be read in connection with these financial
statements. In accordance with the rules of the Securities and Exchange
Commission, these financial statements do not include all disclosures
required by generally accepted accounting principles.
The Company's business is seasonal, with a higher proportion of sales and
earnings generated in the fourth quarter of the fiscal year and, therefore,
the results of its operations for the three months ended April 30, 2007 and
2006 are not necessarily indicative of the results of the entire fiscal
year.
2. NEW ACCOUNTING STANDARDS
In September 2006, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 157, "Fair Value
Measurements" which establishes a framework for measuring fair value of
assets and liabilities and expands disclosures about fair value
measurements. The changes to current practice resulting from the
application of SFAS No. 157 relate to the definition of fair value, the
methods used to measure fair value, and the expanded disclosures about fair
value measurements. SFAS No. 157 is effective for fiscal years beginning
after November 15, 2007. Management is currently evaluating the effect that
the adoption of this Statement will have on the Company's financial
position and earnings.
In July 2006, the FASB issued FASB Interpretation ("FIN") No. 48,
"Accounting for Uncertainty in Income Taxes - an interpretation of FASB
Statement No. 109" which clarifies the accounting for uncertainty in income
tax positions by prescribing a more-likely-than-not recognition threshold
for income tax positions taken or expected to be taken in a tax return. FIN
No. 48 is effective for fiscal years beginning after December 15, 2006 with
the cumulative effect of the change in accounting principle recorded as an
adjustment to retained earnings at the beginning of the year. The Company
has adopted FIN No. 48 as of February 1, 2007 which resulted in a charge of
$4,299,000 to retained earnings as a cumulative effect of an accounting
change (see Note 4).
3. INVENTORIES
April 30, January 31, April 30,
(in thousands) 2007 2007 2006
--------------------------------------------------------------------------------------------------
Finished goods $ 891,579 $ 840,050 $ 816,661
Raw materials 331,712 316,206 263,024
Work-in-process 71,859 58,366 61,144
----------------------------------------------------------------
Inventories, net $ 1,295,150 $ 1,214,622 $ 1,140,829
================================================================
LIFO-based inventories at April 30, 2007, January 31, 2007 and April 30,
2006 represented 68%, 68% and 70% of inventories, net, with the current
cost exceeding the LIFO inventory value by $115,390,000, $108,501,000 and
$76,990,000 at the end of each period.
4. INCOME TAXES
The effective income tax rate for the three months ended April 30, 2007 was
36.5%, versus 38.6% in the three months ended April 30, 2006. The effective
tax rate in the three months ended April 30, 2007 included favorable
reserve adjustments relating to the expiration of certain statutory periods
during the quarter.
7
4. INCOME TAXES (continued)
The Company adopted FIN No. 48 on February 1, 2007. As a result, the
Company recorded a non-cash cumulative transition charge of $4,299,000 as a
reduction to the opening retained earnings balance. As of February 1, 2007,
the gross amount of unrecognized tax benefits was approximately
$40,000,000, which includes interest and penalties of approximately
$8,000,000. The total amount of unrecognized tax benefits that, if
recognized, would have affected the effective tax rate was approximately
$22,500,000. The Company recognizes interest expense and penalties related
to the above unrecognized tax benefits within income tax expense.
During the three months ended April 30, 2007, the unrecognized tax
liability decreased by approximately $2,000,000, which was primarily the
result of state audit settlements. As of April 30, 2007, the Company had an
approximately $39,000,000 liability recorded for unrecognized tax benefits,
which included interest and penalties of approximately $8,000,000. The
total amount of unrecognized benefits that, if recognized, would have
affected the effective tax rate was approximately $21,000,000.
The Company files income tax returns in the U.S. federal jurisdiction as
well as various state and foreign locations. As a matter of course, various
taxing authorities regularly audit the Company. The Company's tax filings
are currently being examined by tax authorities in jurisdictions where it
has a material presence, including U.S. Federal (tax years 2003-2004),
Japan (tax years 2003-2005), New York State and New York City (tax years
1999-2002). Tax years from 2003-present are open to examination in various
other state and foreign taxing jurisdictions. The Company believes that its
tax positions comply with applicable tax law and that it has adequately
provided for these matters. However, these audits may result in proposed
assessments where the ultimate resolution may result in the Company owing
additional taxes. Given the various stages of completion of the audits, the
Company cannot currently estimate potential changes in the amount of
unrecognized income tax benefits over the next 12 months.
5. EARNINGS PER SHARE
Basic earnings per share is computed as net earnings divided by the
weighted-average number of common shares outstanding for the period.
Diluted earnings per share includes the dilutive effect of the assumed
exercise of stock options and vesting of restricted stock units.
The following table summarizes the reconciliation of the numerators and
denominators for the basic and diluted earnings per share ("EPS")
computations:
Three Months Ended April 30,
-------------------------------------------------------
(in thousands) 2007 2006
---------------------------------------------------------------------------------------------------------------------
Net earnings for basic and diluted EPS $ 49,659 $ 43,142
=======================================================
Weighted average shares for basic EPS 136,488 141,941
Incremental shares based upon the assumed exercise
of stock options and restricted stock units 3,236 2,426
-------------------------------------------------------
Weighted average shares for diluted EPS 139,724 144,367
=======================================================
For the three months ended April 30, 2007 and 2006, there were 704,000 and
5,066,000 stock options and restricted stock units excluded from the
computations of earnings per diluted share due to their antidilutive
effect.
8
6. EMPLOYEE BENEFIT PLANS
The Company maintains several pension and retirement plans, as well as
provides certain health-care and life insurance benefits.
Net periodic pension and other postretirement benefit expense included the
following components:
Three Months Ended April 30,
---------------------------------------------------------------------------------
Other
Pension Benefits Postretirement Benefits
---------------------------------------------------------------------------------
(in thousands) 2007 2006 2007 2006
---------------------------------------------------------------------------------------------------------------------------
Service cost $ 4,547 $ 4,131 $ 318 $ 376
Interest cost 3,928 3,548 470 429
Expected return on plan assets (3,429) (2,944) - -
Amortization of prior service cost 321 178 (223) (293)
Amortization of net loss 640 1,161 10 85
----------------------------------------------------------------------------------
Net expense $ 6,007 $ 6,074 $ 575 $ 597
==================================================================================
7. SEGMENT INFORMATION
The Company's reportable segments are: U.S. Retail, International Retail
and Direct Marketing. These reportable segments represent channels of
distribution that offer similar merchandise and service and have similar
marketing and distribution strategies. The Other channel of distribution
includes all non-reportable segments which consist of worldwide sales of
businesses operated under trademarks or tradenames other than TIFFANY & CO.
Other also includes wholesale sales of diamonds obtained through bulk
purchases that are subsequently deemed not suitable for the Company's
needs. In deciding how to allocate resources and assess performance, the
Company's Executive Officers regularly evaluate the performance of its
reportable segments on the basis of net sales and earnings from operations,
after the elimination of inter-segment sales and transfers.
Reclassifications were made to the prior year's segment amounts to conform
to the current year presentation and to reflect the revised manner in which
management evaluates the performance of segments. Effective with the first
quarter of 2007, the Company revised certain allocations of operating
expenses between unallocated corporate expenses and earnings (losses) from
operations for segments.
Certain information relating to the Company's segments is set forth below:
Three Months Ended April 30,
--------------------------------------------------------------
(in thousands) 2007 2006
---------------------------------------------------------------------------------------------------------------
Net Sales:
U.S. Retail $ 298,684 $ 260,580
International Retail 248,007 215,164
Direct Marketing 33,296 29,957
--------------------------------------------------------------
Total reportable segments 579,987 505,701
Other 40,888 33,540
--------------------------------------------------------------
$ 620,875 $ 539,241
==============================================================
Earnings (losses) from operations*:
U.S. Retail $ 43,604 $ 42,141
International Retail 60,531 53,451
Direct Marketing 8,256 7,117
--------------------------------------------------------------
Total reportable segments 112,391 102,709
Other (4,329) (3,573)
--------------------------------------------------------------
$ 108,062 $ 99,136
==============================================================
*Represents earnings (losses) from operations before unallocated
corporate expenses and other expenses, net.
9
7. SEGMENT INFORMATION (continued)
The following table sets forth a reconciliation of the segments' earnings
from operations to the Company's consolidated earnings before income taxes:
Three Months Ended
April 30,
------------------------------------------------------
(in thousands) 2007 2006
-----------------------------------------------------------------------------------------------------------------
Earnings from operations for segments $ 108,062 $ 99,136
Unallocated corporate expenses (26,608) (24,889)
Other expenses, net (3,216) (3,975)
------------------------------------------------------
Earnings before income taxes $ 78,238 $ 70,272
======================================================
Unallocated corporate expenses include certain costs related to
administrative support functions which the Company does not allocate to its
segments. Such unallocated costs include those for information technology,
finance, legal and human resources.
8. SUBSEQUENT EVENT
On May 17, 2007, the Company's Board of Directors declared a 20% increase
in the quarterly dividend rate on its Common Stock, increasing it from
$0.10 per share to $0.12 per share. This dividend will be paid on July 10,
2007 to stockholders of record on June 20, 2007.
10
PART I. Financial Information
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
OVERVIEW
--------
Tiffany & Co. is a holding company that operates through its subsidiary
companies (the "Company"). The Company's principal subsidiary, Tiffany and
Company, is a jeweler and specialty retailer whose principal merchandise
offerings are an extensive selection of fine jewelry. It also sells timepieces,
sterling silverware, china, crystal, stationery, fragrances and accessories.
Through Tiffany and Company and other subsidiaries, the Company is engaged in
product design, manufacturing and retailing activities.
The Company's channels of distribution are as follows:
o U.S. Retail includes sales in TIFFANY & CO. stores in the U.S. and sales of
TIFFANY & CO. products through business-to-business direct selling
operations in the U.S.;
o International Retail includes sales in TIFFANY & CO. stores and department
store boutiques outside the U.S. and business-to-business, Internet and
wholesale sales of TIFFANY & CO. products outside the U.S.;
o Direct Marketing includes Internet and catalog sales of TIFFANY & CO.
products in the U.S.; and
o Other includes worldwide sales of businesses operated under trademarks or
tradenames other than TIFFANY & CO. ("specialty retail"). Other also
includes wholesale sales of diamonds obtained through bulk purchases that
are subsequently deemed not suitable for the Company's needs.
All references to years relate to fiscal years ended or ending on January 31 of
the following calendar year.
Highlights
----------
o Net sales increased 15% in the three months ("first quarter") ended April
30, 2007 due to growth in all channels of distribution.
o Worldwide comparable store sales increased 8% on a constant-exchange-rate
basis (see Non-GAAP Measures). Comparable TIFFANY & CO. store sales in the
U.S. increased 12%. Comparable international store sales increased 4% as
growth in most countries more than offset a decline in Japan.
o Net earnings in the first quarter rose 15%. Earnings per diluted share rose
20%.
o The Company repurchased and retired 520,618 shares of its Common Stock
during the three months ended April 30, 2007.
o The Company added six retail locations in the first quarter: one in the
U.S., three in Japan, one in Singapore and one in Korea. Two existing
locations in Japan were closed.
NON-GAAP MEASURES
-----------------
The Company's reported sales reflect either a translation-related benefit from
strengthening foreign currencies or a detriment from a strengthening U.S.
dollar.
The Company reports information in accordance with U.S. Generally Accepted
Accounting Principles ("GAAP"). Internally, management monitors its
international sales performance on a non-GAAP basis that eliminates the positive
or negative effects that result from translating international sales into U.S.
dollars ("constant-exchange-rate basis"). Management believes this
constant-exchange-rate measure provides a more representative assessment of the
sales performance and provides better comparability between reporting periods.
The Company's management does not, nor does it suggest that investors should,
consider such non-GAAP financial measures in isolation from, or as a substitute
for, financial information prepared in accordance with GAAP. The Company
presents such non-GAAP financial measures in reporting its financial results to
provide investors with an additional tool to evaluate the Company's operating
results.
11
The following table reconciles sales percentage increases (decreases) from the
GAAP to the non-GAAP basis:
First Quarter 2007 vs. 2006
-------------------------------------------------------------------------------------
Constant-Exchange-Rate
GAAP Reported Translation Effect Basis
-------------------------------------------------------------------------------------
Net Sales:
----------
Worldwide 15% 1% 14%
U.S. Retail 15% --- 15%
International Retail 15% 2% 13%
Japan Retail (3)% (1)% (2)%
Other Asia-Pacific 35% 3% 32%
Europe 27% 12% 15%
Comparable Store Sales:
-----------------------
Worldwide 9% 1% 8%
U.S. Retail 12% --- 12%
International Retail 6% 2% 4%
Japan Retail (8)% (1)% (7)%
Other Asia-Pacific 27% 3% 24%
Europe 23% 12% 11%
RESULTS OF OPERATIONS
---------------------
Certain operating data as a percentage of net sales were as follows:
First Quarter
--------------------------------------------------------
2007 2006
--------------------------------------------------------
Net sales 100.0% 100.0%
Cost of sales 45.5 44.2
--------------------------------------------------------
Gross profit 54.5 55.8
Selling, general and administrative expenses 41.4 42.1
--------------------------------------------------------
Earnings from operations 13.1 13.7
Other expenses, net 0.5 0.7
--------------------------------------------------------
Earnings before income taxes 12.6 13.0
Provision for income taxes 4.6 5.0
--------------------------------------------------------
Net earnings 8.0% 8.0%
========================================================
12
Net Sales
---------
Net sales by channel of distribution were as follows:
First Quarter
----------------------------------------------------------
(in thousands) 2007 2006 Increase
--------------------------------------------------------------------------------------
U.S. Retail $ 298,684 $ 260,580 15%
International Retail 248,007 215,164 15%
Direct Marketing 33,296 29,957 11%
Other 40,888 33,540 22%
----------------------------------------------------------
$ 620,875 $ 539,241 15%
==========================================================
A store's sales are included in "comparable store sales" when the store has been
open for more than 12 months. In markets except Japan, sales for relocated
stores are included in comparable store sales if the relocation occurs within
the same geographical market. In Japan, sales for a new store or boutique are
not included if the store was relocated from one department store to another or
from a department store to a free-standing location. In all markets, the results
of a store in which the square footage has been expanded or reduced remain in
the comparable store base.
U.S. Retail sales increased in the first quarter as a result of comparable store
sales growth of 12% and the opening of new stores. In the first quarter, the New
York Flagship store's sales increased 26% and comparable branch store sales
increased 9%. Comparable store sales growth resulted from increases in the
average sales amount per transaction. Management attributes the increased amount
per transaction to sales of higher-priced merchandise. In addition, the New York
flagship store benefited from higher levels of sales to foreign visitors.
Management continues to expect a high single-digit percentage increase in full
year 2007 U.S. comparable store sales.
International Retail sales, on a constant-exchange-rate basis, increased 13% in
the first quarter and comparable store sales rose 4%.
In Japan (which represents slightly less than half of International Retail
sales), on a constant-exchange-rate basis, total retail sales declined 2% in the
first quarter due to a decrease in unit volume partly offset by an increase in
the average transaction size. Comparable store sales on a constant-exchange-rate
basis declined 7% in the first quarter. Local management continues to focus on
improved selling techniques and retail location enhancements through renovation,
expansion and/or relocation.
In the Asia-Pacific region outside Japan, comparable store sales on a
constant-exchange-rate basis increased 24% in the first quarter due to growth in
most markets.
In Europe, comparable store sales on a constant-exchange-rate basis increased
11% in the first quarter due to growth in London and most Continental European
markets.
Management currently expects a mid-to-high single-digit percentage increase on a
constant-exchange-rate basis in full year 2007 International Retail comparable
store sales.
Direct Marketing sales rose 11% in the first quarter due to growth both in the
number of orders shipped and in the average order size. Management currently
expects a mid-teens percentage increase in full year 2007 Direct Marketing
sales.
Other sales increased 22% in the first quarter. Wholesale sales of diamonds
increased $5,236,000 to $13,638,000 (versus $8,402,000 in the prior year). In
the specialty retail businesses, sales in LITTLE SWITZERLAND stores increased 5%
in the first quarter. The Company is evaluating various strategic alternatives
related to that business (see Part II, Item 5. Other Information, for additional
information). IRIDESSE store sales increased largely due to an increased store
base, as well as comparable store sales growth. Management currently expects an
approximately 20% increase in full year 2007 sales within the Other channel of
distribution.
13
Management expects to increase the number of Company-operated TIFFANY & CO.
stores and boutiques by approximately 10% (net) in 2007. Management's announced
openings and closings of TIFFANY & CO. stores are shown below:
Actual Openings Expected
Location (Closings) 2007 Openings 2007
-------- --------------- -------------
Austin, Texas First Quarter
New York-Wall Street, New York Third Quarter
Las Vegas, Nevada Third Quarter
Natick, Massachusetts Third Quarter
Red Bank, New Jersey Fourth Quarter
Providence, Rhode Island Fourth Quarter
Santa Barbara, California Fourth Quarter
Tokyo-Shibuya, Japan First Quarter
Tokyo-Shinjuku, Japan First Quarter
Hiroshima, Japan First Quarter
Hoshigaoka, Japan (First Quarter)
Okinawa, Japan (First Quarter)
Tokyo-Shinjuku (Boutique for Men), Japan Third Quarter
Changi Airport, Singapore First Quarter
Seoul, Korea First Quarter
Hamburg, Germany Second Quarter
London-Selfridges, England Third Quarter
Mexico City, Mexico Third Quarter
Gross Margin
------------
Gross margin (gross profit as a percentage of net sales) declined in the first
quarter by 1.3 percentage points. The primary components of the net decline
were: (i) a 0.9 percentage point decline due to increased product costs and
changes in sales mix; and (ii) a 0.4 percentage point decline due to increased
low-margin wholesale sales of diamonds.
Management's objective is to improve gross margin through greater product
manufacturing/sourcing efficiencies (including increased direct rough-diamond
sourcing and internal manufacturing), increased use of distribution center
capacity, and selective price adjustments to address higher product costs.
Management continues to expect an improvement in full year 2007 gross margin.
Selling, General and Administrative ("SG&A") Expenses
-----------------------------------------------------
SG&A expenses increased $30,156,000, or 13%, in the first quarter largely due to
increased labor and benefit costs of $12,613,000 and increased depreciation and
occupancy expenses of $7,963,000, (both of which are largely due to new and
existing stores), as well as an increase of $5,027,000 in marketing expenses.
SG&A expenses as a percentage of net sales improved by 0.7 percentage point to
41.4% in the first quarter of 2007 from 42.1% in the first quarter of 2006.
Management's objective is to improve the ratio of SG&A expenses to net sales by
controlling expenses so that sales growth can result in a higher rate of
earnings growth (leveraging of operating expenses). Management continues to
expect an improvement in the expense ratio for the full year 2007.
14
Earnings from Operations
------------------------
Reclassifications were made to prior year's earnings (losses) from operations by
segment to conform to the current year presentation and to reflect the revised
manner in which management now evaluates the performance of the segments.
Effective with the first quarter of 2007, the Company revised certain
allocations of operating expenses between unallocated corporate expenses and
earnings (losses) from operations for segments.
First Quarter % of Net First Quarter % of Net
(in thousands) 2007 Sales* 2006 Sales*
----------------------------------------------------------------------------------------------------------------
Earnings (losses) from operations:
U.S. Retail $ 43,604 15% $ 42,141 16%
International Retail 60,531 24% 53,451 25%
Direct Marketing 8,256 25% 7,117 24%
Other (4,329) (11%) (3,573) (11%)
-------------------------------------------------------------------------
108,062 99,136
Unallocated corporate expenses (26,608) (24,889)
-------------------------------------------------------------------------
Earnings from operations $ 81,454 $ 74,247
=========================================================================
* Percentages represent earnings (losses) from operations as a percentage of
each segment's net sales.
Earnings from operations increased 10% in the first quarter. On a segment basis,
the ratio of earnings (losses) from operations (before the effect of unallocated
corporate expenses and other expenses, net) to each segment's net sales in the
first quarter of 2007 and 2006 was as follows:
o U.S. Retail declined 1 percentage point primarily due to a decline in gross
margin (due to changes in product mix and higher product costs) and
increased marketing expense;
o International Retail declined 1 percentage point primarily due to a decline
in gross margin (due to changes in product mix) partially offset by the
leveraging of operating expenses which benefited from increased sales
growth;
o Direct Marketing increased 1 percentage point primarily due to the
leveraging of operating expenses which benefited from increased sales
partially offset by a decline in gross margin (due to higher product
costs); and
o Other was consistent with the prior year.
Unallocated corporate expenses include certain costs related to administrative
support functions which the Company does not allocate to its segments. Such
unallocated costs include those for information technology, finance, legal and
human resources. Unallocated corporate expenses increased 7% in the first
quarter due to incremental labor costs.
Other Expenses, net
-------------------
Other expenses, net decreased in the first quarter primarily due to increased
foreign currency transaction net gains.
Provision for Income Taxes
--------------------------
The effective income tax rates for the first quarter were 36.5% versus 38.6% in
the prior year. The effective tax rate in first quarter of 2007 included
favorable reserve adjustments relating to the expiration of certain statutory
periods during the quarter. Management continues to expect the effective tax
rate to be approximately 38% for full year 2007. However, the Company does
expect the effective tax rate to be in a range of 40%-43% in the second and
third quarters followed by a rate of approximately 37% in the fourth quarter due
to geographical mix in earnings during the year.
New Accounting Standards
------------------------
See note 2 to condensed consolidated financial statements.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
The Company's liquidity needs have been, and are expected to remain, primarily a
function of its seasonal and expansion-related working capital and capital
expenditures needs. The ratio of total debt (short-term borrowings,
15
current portion of long-term debt and long-term debt) to stockholders' equity
was 28% at April 30, 2007, 29% at January 31, 2007, and 27% at April 30, 2006.
The following table summarizes cash flows from operating, investing and
financing activities:
First Quarter
-------------------------------------------------------
(in thousands) 2007 2006
-----------------------------------------------------------------------------------------------------------------
Net cash provided by (used in):
Operating activities $ (31,737) $ (43,755)
Investing activities (27,301) (90,534)
Financing activities (2,888) (81,176)
Effect of exchange rates on cash and cash equivalents 2,692 2,397
-------------------------------------------------------
Net decrease in cash and cash equivalents $ (59,234) $ (213,068)
=======================================================
Operating Activities
--------------------
The Company's net cash outflow from operating activities of $31,737,000 in the
first quarter of 2007 compared with an outflow of $43,755,000 in the first
quarter of 2006. The reduced cash outflow in first quarter 2007 resulted
primarily from increased net earnings after adjustment for non-cash items.
Working Capital. Working capital (current assets less current liabilities) and
the corresponding current ratio (current assets divided by current liabilities)
were $1,332,250,000 and 4.3 at April 30, 2007, compared with $1,253,973,000 and
3.8 at January 31, 2007 and $1,293,511,000 and 4.6 at April 30, 2006.
Accounts receivable, less allowances at April 30, 2007 were 4% lower than at
January 31, 2007 and were 4% higher than at April 30, 2006.
Inventories, net at April 30, 2007 were 7% above January 31, 2007 and 14% above
April 30, 2006. Combined raw material and work-in-process inventories increased
8% over January 31, 2007 and 24% over April 30, 2006 due to increased precious
metal costs and diamond quantities needed to support internal jewelry
manufacturing. Finished goods inventories increased 6% over January 31, 2007,
and 9% over April 30, 2006, reflecting new store openings, increased product
costs as well as broadened product assortments. Changes in foreign currency
exchange rates had an insignificant effect on the change in inventory balances
at April 30, 2007 versus January 31, 2007 and April 30, 2006.
Management continues to expect a high-single-digit percentage increase in the
overall year-over-year inventory growth rate in 2007.
Investing Activities
--------------------
The Company's net cash outflow from investing activities of $27,301,000 in the
first quarter of 2007 compared with an outflow of $90,534,000 in the first
quarter of 2006. The reduction was primarily due to higher net purchases of
marketable securities and short-term investments in 2006 as well as decreased
capital expenditures in 2007.
Capital Expenditures. Capital expenditures were $31,907,000 in first quarter
2007 compared with $43,928,000 in first quarter 2006. Management estimates that
capital expenditures will be approximately $180,000,000 in 2007 (compared with
approximately $182,000,000 in the prior year) due to costs related to the
opening and renovation of stores and to ongoing investments in new systems.
Financing Activities
--------------------
The Company's net cash outflow from financing activities of $2,888,000 in the
first quarter of 2007 compared with an outflow of $81,176,000 in the first
quarter of 2006. The reduction was primarily due to reduced share repurchases as
well as greater proceeds from the exercise of employees' stock options.
16
Share Repurchases. The Company's stock repurchase activity was as follows:
First Quarter
-------------------------------------------------
(in thousands, except per share amounts) 2007 2006
---------------------------------------------------------------------------------------------
Cost of repurchases $ 24,997 $ 79,750
Shares repurchased and retired 521 2,179
Average cost per share $ 48.01 $ 36.59
At April 30, 2007, there remained $670,417,000 of authorization for future
repurchases. The Company's stock repurchase program expires in December 2009.
The timing of repurchases and the actual number of shares to be repurchased
depend on a variety of discretionary factors such as price and other market
conditions.
Borrowings. The Company's current sources of working capital are
internally-generated cash flows and borrowings available under a revolving
credit facility.
At April 30, 2007, the Company was in compliance with all loan covenants.
Contractual Obligations
-----------------------
The Company's contractual cash obligations and commercial commitments at April
30, 2007 and the effects such obligations and commitments are expected to have
on the Company's liquidity and cash flows in future periods have not
significantly changed since January 31, 2007.
The Company adopted the provisions of Financial Accounting Standards Board
Interpretation ("FIN") No. 48, "Accounting for Uncertainty in Income Taxes - an
amendment of FASB Statement No. 109" on February 1, 2007. The total liability
for uncertain tax positions under FIN No. 48 was approximately $39,000,000 at
April 30, 2007. The total amount of unrecognized tax benefits that, if
recognized, would have affected the effective tax rate was approximately
$21,000,000. The final outcome of these tax uncertainties is dependent upon
various matters including tax examinations, interpretation of those tax laws or
expiration of statutes of limitations. The Company is currently not able to
reasonably estimate the amount by which the liability will increase or decrease
over time or expected payments related to these obligations within the next 12
months.
Based on the Company's financial position at April 30, 2007, management
anticipates that cash on hand, internally-generated cash flows and the funds
available under its revolving credit facility will be sufficient to support the
Company's planned worldwide business expansion, share repurchases, debt service
and seasonal working capital increases for the foreseeable future.
Seasonality
-----------
As a jeweler and specialty retailer, the Company's business is seasonal in
nature, with the fourth quarter typically representing a proportionally greater
percentage of annual sales, earnings from operations and cash flow. Management
expects such seasonality to continue.
Forward-Looking Statements
--------------------------
This document contains certain "forward-looking statements" concerning the
Company's objectives and expectations with respect to store openings, sales,
retail prices, gross margin, expenses, inventory performance, capital
expenditures and cash flow. In addition, management makes other forward-looking
statements from time to time concerning objectives and expectations. Statements
beginning with such words as "believes", "intends", "plans", and "expects"
include forward-looking statements that are based on management's expectations
given facts as currently known by management on the date this quarterly report
was filed with the Securities and Exchange Commission. All forward-looking
statements involve risks, uncertainties and assumptions that, if they never
materialize or prove incorrect, could cause actual results to differ materially
from those expressed or implied by such forward-looking statements.
The statements in this quarterly report are made as of the date this report was
filed with the Securities and Exchange Commission and the Company undertakes no
obligation to update any of the forward-looking information included in this
document, whether as a result of new information, future events, changes in
expectations or otherwise.
17
PART I. Financial Information
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to market risk from fluctuations in foreign currency
exchange rates, interest rates and precious metal prices, which could affect its
consolidated financial position, earnings and cash flows. The Company manages
its exposure to market risk through its regular operating and financing
activities and, when deemed appropriate, through the use of derivative financial
instruments. The Company uses derivative financial instruments as risk
management tools and not for trading or speculative purposes, and does not
maintain such instruments that may expose the Company to significant market
risk.
In Japan, the Company uses yen put options to minimize the effect of a weakening
yen on U.S. dollar-denominated transactions. To a lesser extent, the Company
uses foreign-exchange forward contracts to protect against changes in local
currencies. Gains or losses on these instruments substantially offset losses or
gains on the assets, liabilities and transactions being hedged. Management
neither foresees nor expects significant changes in foreign currency exposure in
the near future.
The Company uses interest-rate swap contracts related to certain debt
arrangements to manage its net exposure to interest rate changes. The
interest-rate swap contracts effectively convert fixed-rate obligations to
floating-rate instruments. Additionally, since the fair value of the Company's
fixed-rate long-term debt is sensitive to interest rate changes, the
interest-rate swap contracts serve as a hedge to changes in the fair value of
these debt instruments. Management does not expect significant changes in
exposure to interest rate fluctuations, nor in market risk-management practices.
Beginning in the first quarter of 2007, the Company began using a combination of
call and put option contracts in a net-zero cost arrangement, zero-cost collars
("collars"), as hedges of forecasted purchases of precious metals. The Company
accounts for its collars as cash-flow hedges. The Company assesses hedge
effectiveness based on the total changes in the collars' cash flows. The
effective portion of unrealized gains and losses associated with the value of
the collars is deferred as a component of other comprehensive gain (loss) and is
recognized as a component of cost of sales on the Company's condensed
consolidated statement of earnings when the inventory is sold. The fair value of
the outstanding collars at April 30, 2007 was not significant. The fair value
was determined using quoted market prices for these instruments. Management
neither foresees nor expects significant changes in exposure to fluctuations in
precious metal prices.
18
PART I. Financial Information
Item 4. Controls and Procedures
Disclosure Controls and Procedures
Based on their evaluation of our disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of
1934), Registrant's chief executive officer and chief financial officer
concluded that, as of the end of the period covered by this report, Registrant's
disclosure controls and procedures are effective to ensure that information
required to be disclosed by Registrant in the reports that it files or submits
under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized
and reported within the time periods specified in the SEC's rules and forms and
(ii) accumulated and communicated to our management, including our chief
executive officer and chief financial officer, to allow timely decisions
regarding required disclosure.
In the ordinary course of business, Registrant reviews its system of
internal control over financial reporting and makes changes to its systems and
processes to improve controls and increase efficiency, while ensuring that
Registrant maintains an effective internal control environment. Changes may
include such activities as implementing new, more efficient systems and
automating manual processes.
Registrant's chief executive officer and chief financial officer have
determined that there have been no changes in Registrant's internal control over
financial reporting during the period covered by this report identified in
connection with the evaluation described above that have materially affected, or
are reasonably likely to materially affect, Registrant's internal control over
financial reporting.
Registrant's management, including its chief executive officer and chief
financial officer, necessarily applied their judgment in assessing the costs and
benefits of such controls and procedures. By their nature, such controls and
procedures cannot provide absolute certainty, but can provide reasonable
assurance regarding management's control objectives. Our chief executive officer
and our chief financial officer have concluded that Registrant's disclosure
controls and procedures are (i) designed to provide such reasonable assurance
and (ii) are effective at that reasonable assurance level.
19
PART II. Other Information
Item 1A. Risk Factors
As a jeweler and specialty retailer, the Company's success in achieving its
objectives and expectations is partially dependent upon economic conditions,
competitive developments and consumer attitudes, including changes in consumer
preferences for certain jewelry styles and materials. However, certain
assumptions are specific to the Company and/or the markets in which it operates.
The following assumptions, among others, are "risk factors" which could affect
the likelihood that the Company will achieve the objectives and expectations
communicated by management:
(i) that low or negative growth in the economy or in the financial markets,
particularly in the U.S. and Japan, will not occur and reduce discretionary
spending on goods that are, or are perceived to be, "luxuries";
(ii) that consumer spending does not decline substantially during the fourth
quarter of any year;
(iii) that unsettled regional and/or global conflicts or crises do not result in
military, terrorist or other conditions creating disruptions or disincentives
to, or changes in the pattern, practice or frequency of, tourist travel to the
various regions where the Company operates retail stores nor to the Company's
continuing ability to operate in those regions;
(iv) that sales in Japan will not decline substantially;
(v) that there will not be a substantial adverse change in the exchange
relationship between the Japanese yen and the U.S. dollar;
(vi) that Mitsukoshi and other department store operators in Japan, in the face
of declining or stagnant department store sales, will not close or consolidate
stores which have TIFFANY & CO. retail locations;
(vii) that Mitsukoshi will continue as a leading department store operator in
Japan;
(viii) that existing product supply arrangements, including license arrangements
with third-party designers Elsa Peretti and Paloma Picasso, will continue;
(ix) that the wholesale and retail market for high-quality rough and cut
diamonds will provide continuity of supply and pricing within the quality
grades, colors and sizes that customers demand;
(x) that the Company's diamond supply initiatives achieve their financial and
strategic objectives;
(xi) that the Company's gross margins in Japan and for diamond products can be
maintained in the face of increased competition from traditional and e-commerce
retailers;
(xii) that the Company is able to pass on higher costs of raw materials to
consumers through price increases;
(xiii) that the sale of counterfeit products does not significantly undermine
the value of the Company's trademarks and demand for the Company's products;
(xiv) that new and existing stores and other sales locations can be leased,
re-leased or otherwise obtained on suitable terms in desired markets and that
construction can be completed on a timely basis;
(xv) that the Company can achieve satisfactory results from any current and
future businesses into which it enters that are operated under trademarks or
tradenames other than TIFFANY & CO.; and
(xvi) that the Company's expansion plans for retail and direct selling
operations and merchandise development, production and management can continue
to be executed without meaningfully diminishing the distinctive appeal of the
TIFFANY & CO. brand.
20
PART II. Other Information
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
This table provides information with respect to the Company's purchases of
shares of its Common Stock during the first fiscal quarter of 2007:
-----------------------------------------------------------------------------------------------------------------------------------
c)Total Number
of Shares (d)Approximate
(a) Total Purchased Under Dollar Value of
Number of (b)Average all Publicly Shares that May Yet
Shares Price Paid Per Announced be Purchased Under
Period Purchased Share Programs* the Programs*
-----------------------------------------------------------------------------------------------------------------------------------
February 1, 2007 through
February 28, 2007
- - - $695,414,000
-----------------------------------------------------------------------------------------------------------------------------------
March 1, 2007 through
March 31, 2007
45,718 $45.60 45,718 $693,329,000
-----------------------------------------------------------------------------------------------------------------------------------
April 1, 2007 through
April 30, 2007
474,900 $48.25 474,900 $670,417,000
-----------------------------------------------------------------------------------------------------------------------------------
Total 520,618 $48.01 520,618 $670,417,000
-----------------------------------------------------------------------------------------------------------------------------------
* In August 2006, the Company's Board of Directors extended the expiration date
of the program to December 2009 and increased the authorization to $813,000,000.
21
PART II. Other Information
Item 5. Other Information
As disclosed in the Company's Proxy Statement filed with the Securities and
Exchange Commission on April 12, 2007, the Company hired Evercore Partners, a
public company ("Evercore") in early 2007 to provide financial advisory
services. As such, Evercore is currently assisting the Company's management in
exploring various strategic alternatives related to its Little Switzerland, Inc.
business. Evercore is not advising management with respect to any other matter.
22
ITEM 6 Exhibits
(a) Exhibits:
31.1 Certification of Chief Executive Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
32.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
32.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
23
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: June 4, 2007 By: /s/ James N. Fernandez
----------------------------
James N. Fernandez
Executive Vice President and
Chief Financial Officer
(principal financial officer)
EXHIBIT INDEX
EXHIBIT DESCRIPTION
NUMBER
31.1 Certification of Chief Executive Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
32.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
32.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.