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 (Date of Earliest Event Reported): December 9, 1996
THE TJX COMPANIES, INC.
(Exact name of registrant as specified in charter)
DELAWARE 1-4908 04-2207613
State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
770 Cochituate Road, Framingham, MA 01701
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (508)390-2662
Page 2.
Item 2. Acquisition or Disposition of Assets
Sale of Chadwick's of Boston business. On December 9, 1996 (the
"Closing Date"), The TJX Companies, Inc., a Delaware corporation (the
"Registrant") and two subsidiaries of the Registrant completed the sale
(the "Asset Sale") to Brylane L.P., a Delaware limited partnership
("Brylane") of substantially all of the assets (the "Assets") of the
Registrant's Chadwick's of Boston apparel catalog business, excluding
the approximately $125,000,000 of consumer credit card receivables of
the Chadwick's business, which will be retained by the Registrant and
collected when due. The sale was effected pursuant to an Asset Purchase
Agreement dated as of October 18, 1996 (the "Chadwick's Agreement")
among the Registrant, the Registrant's wholly-owned subsidiary
Chadwick's, Inc. ("Chadwick's") and Brylane and an Asset Purchase
Agreement dated as of October 18, 1996 between Chadwick's wholly-owned
subsidiary CDM Corp. and Brylane (together, the "Asset Purchase
Agreements"). The purchase price for the Assets is $222,800,000 in cash
plus a Convertible Subordinated Note due 2006 of Brylane (the
"Convertible Note") that has a principal amount equal to $20,000,000.
The Convertible Note is convertible into 727,273 limited partnership
units of Brylane ("Partnership Units") (subject to adjustment) at any
time at the option of the holder. Brylane will also assume certain
liabilities of the Chadwick's of Boston business. The cash portion of
the purchase price is subject to adjustment following the Closing Date
in accordance with the Asset Purchase Agreements. The terms of the
sale, including the consideration, were determined by arm's length
negotiations between unrelated parties. The Registrant used proceeds
from the sale to retire the outstanding balance of $160 million on its
$375 million term loan incurred to acquire Marshalls in November 1995.
This prepayment along with the $200 million prepaid earlier in November
1996 will result in an extraordinary after-tax charge of $2.7 million in
the Registrant's fourth quarter period ending January 25, 1997.
The foregoing description is qualified in its entirety by
reference to the Asset Purchase Agreements, both of which have been
filed previously.
Page 3.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Pro Forma Financial Information.
The pro forma financial information required to be
furnished by the Registrant with respect to the transaction
described in Item 2 above is incorporated herein by
reference to Item 5 of Part II and pages F-1 through F-8 of
the Form 10-Q filed for the quarter ended October 26, 1996.
(c) Exhibits.
99.1. Press Release issued by the Registrant on December 9, 1996.
99.2 Pages F-1 through F-8 of the Form 10-Q filed for the
quarter ended October 26, 1996.
Page 4.
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 hereunto duly authorized.
THE TJX COMPANIES, INC.
By: /s/ Donald G. Campbell
Name: Donald G. Campbell
Title: Executive Vice President-Finance
Date: December 20, 1996
EXHIBIT INDEX
Exhibit No. Description of Exhibits
(c) Exhibits
99.1 Press Release issued by the Registrant on December
9, 1996
99.2 Pages F-1 through F-8 of the Form 10-Q filed for the
quarter ended October 26, 1996.
EXHIBIT 99.1
THE TJX COMPANIES INC. NEWS RELEASE
PUBLIC INFORMATION: 508-390-2309
CONTACTS:
Steven Wishner Sherry Lang
Vice President Assistant Vice President
Treasurer Investor Relations Director
FOR IMMEDIATE RELEASE
(Monday, December 9, 1996)
THE TJX COMPANIES, INC. CONSUMMATES
CHADWICK'S OF BOSTON SALE
Framingham, MA -- The TJX Companies, Inc. (NYSE: TJX), the
world's largest off-price apparel retailer, today announced the
completion of the previously announced sale of the Chadwick's of
Boston catalog company to Brylane, L.P.
Bernard Cammarata, President and Chief Executive Officer of
The TJX Companies, Inc. commented, "We wish everyone at Chadwick's
continued success as they join with Brylane. This divestiture
allows TJX to grow as a Company more focused on our off-price,
large store formats."
The TJX Companies, Inc. is the world's largest off-price
apparel retailer, with 596 T.J. Maxx stores, 466 Marshalls stores,
65 Winners Apparel Ltd. off-price family apparel stores in Canada
and 23 HomeGoods off-price home fashions stores. TJX is also
developing T.K. Maxx, an off-price apparel concept operating 18
stores in the United Kingdom.
-END-
770 COCHITUATE ROAD, FRAMINGHAM, MASSACHUSETTS 01701
EXHIBIT 99.2
THE TJX COMPANIES, INC.
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
On October 18, 1996, the Company announced that it had reached an
agreement with Brylane, L.P. to sell its Chadwick's of Boston
catalog operation (Chadwick's). The purchase price includes $222.8
million in cash and a $20 million convertible subordinated note.
The cash purchase price is subject to adjustment based on the
actual closing balance sheet of Chadwick's. In addition, the
Company will retain Chadwick's consumer credit card receivables.
The Company anticipates consummating the sale in late November or
early December, 1996.
The pro forma condensed consolidated balance sheet as of October
26, 1996 is based on the unaudited historical balance sheet of the
Company as of October 26, 1996, which reflects the Chadwick's
division as a discontinued operation. The pro forma condensed
consolidated balance sheet as of October 26, 1996 assumes the sale
of the division took place on that date and includes the following
pro forma adjustments: a) receipt of cash proceeds and note
receivable from Brylane, L.P., elimination of the net assets of
Chadwick's sold and recognition of the estimated net gain on the
sale of the division; b) the conversion of the Company's Series D
preferred stock into common stock following a required call for
redemption as a result of the sale; and c) the impact of the
prepayment of a portion of the $375 million term loan incurred to
acquire Marshalls from the cash proceeds from the sale of
Chadwick's. The remaining net assets from discontinued operations
represents the consumer credit receivables retained by TJX that
will be collected subsequent to the balance sheet date. The
Company anticipates using available cash balances and/or proceeds
from the Chadwick's sale to fully retire the term loan in the
Company's fourth quarter period ending January 25, 1997, which is
only partially reflected in these pro formas.
The pro forma condensed consolidated statement of income for the
twelve months ended January 27, 1996 is based on the audited
historical statement of income of the Company as reported on Form
10-K for the year ended January 27, 1996 which includes Marshalls
operating results since its acquisition by the Company on November
17, 1995. (See the Company's filing on Form 8-K dated as of
November 17, 1995 and subsequent amendment.) These historical
results will be restated to present Chadwick's as a discontinued
operation in future filings that include this period. The
elimination of Chadwick's from continuing operations is presented
here as a pro forma adjustment. The pro forma condensed
consolidated statement of income for the nine months ended October
26, 1996 is based on the unaudited historical statement of income
F-1
of the Company filed with the Company's Form 10-Q, which already
reflects the operating results of Chadwick's as a discontinued
operation.
The historical results of the Company for the twelve months ended
January 27, 1996 have first been adjusted to reflect the
acquisition of Marshalls as if it had occurred on the first day of
the fiscal year. The pro forma adjustments include the historical
results of Marshalls from January 29, 1995 through the acquisition
date as well as adjustments for the impact of the purchase
accounting method and the impact of the preferred stock issued and
debt incurred as a result of the acquisition.
The pro forma results reflecting the acquisition of Marshalls for
the twelve months ended January 27, 1996 and the historical results
for the nine months ended October 26, 1996 are adjusted to reflect
the sale of the Chadwick's division as if it also occurred on the
first day of the fiscal year ended January 27, 1996. In addition
to the pro forma adjustment to eliminate Chadwick's from continuing
operations for the fiscal year ended January 27, 1996, the pro
forma adjustments to both periods to reflect the sale of Chadwick's
include a reduction in interest expense due to the prepayment of
debt from the cash proceeds received, and the recognition of
interest income on the convertible subordinated note receivable.
The pro forma statements of income exclude the non-recurring gain
of approximately $125 million the Company will recognize upon the
sale of the division and exclude a non-recurring charge of
approximately $1.6 million for the partial prepayment of debt.
These pro forma condensed consolidated financial statements have
been prepared for information purposes only and do not necessarily
indicate what would have occurred had the acquisition of Marshalls
and the sale of Chadwick's taken place on the dates indicated.
Specifically, the pro forma condensed consolidated statement of
income for the twelve months ended January 27, 1996 includes the
historical results of Marshalls which is not necessarily indicative
of current results. Thus, the pro forma statement of income for
the twelve months ended January 27, 1996 does not fully reflect the
impact that Marshalls has had on the Company's results, nor is it
necessarily indicative of the impact that Marshalls may have on
future results of the Company. In addition, the pro forma
condensed consolidated financial statements do not reflect the
final allocation of the purchase price for Marshalls and do not
reflect benefit of the full prepayment of the $375 million term
loan anticipated to take place in the Company's fourth quarter
period ending January 25, 1997. The accompanying pro forma
condensed consolidated financial statements should be read in
conjunction with the historical financial statements of the
Company, the Company's Form 8-K dated November 17, 1995 (and
subsequent amendment) relating to the Marshalls acquisition and the
Company's Form 8-K dated October 18, 1996 relating to the agreement
to sell the Chadwick's division.
F-2
<TABLE>
<CAPTION>
THE TJX COMPANIES, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF OCTOBER 26, 1996
(UNAUDITED)
(IN THOUSANDS)
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
<S> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 236,035 ${ 207,300 (1a) $ 236,035
{(207,300) (1c)
Accounts receivable 90,695 90,695
Merchandise inventories 1,335,099 1,335,099
Prepaid expenses 19,054 19,054
Net current assets of
discontinued operations 116,009 (26,009) (1a) 90,000
Total current assets 1,796,892 1,770,883
Property, net 724,310 724,310
{20,000 (1a)
Other assets 36,432 {(2,700) (1c) 53,732
Goodwill and tradename,
net of amortization 231,335 231,335
Net noncurrent assets of
discontinued operations 48,627 (48,627) (1a) -
Total Assets $2,837,596 $2,780,260
Liabilities
Current liabilities:
Short-term debt $ - $ -
Current installments of
long-term debt 94,708 (37,400) (1c) 57,308
Accounts payable 616,200 616,200
Accrued expenses and other {27,664 (1a)
current liabilities 653,780 {(1,100) (1c) 680,344
Total current liabilities 1,364,688 1,353,852
Long-term debt, exclusive of
current installments 540,362 (169,900) (1c) 370,462
Deferred income taxes 25,885 25,885
Shareholders' Equity
Preferred stock at face value 175,000 (25,000) (1b) 150,000
Common stock 77,725 1,349 (1b) 79,074
Additional paid-in capital 386,600 23,651 (1b) 410,251
{125,000 (1a)
Retained earnings 267,336 { (1,600) (1c) 390,736
Total shareholders' equity 906,661 1,030,061
Total Liabilities and
Shareholders' Equity $2,837,596 $2,780,260
</TABLE>
The accompanying notes are an integral part of the unaudited pro forma
condensed consolidated balance sheet.
F-3
<TABLE>
<CAPTION>
THE TJX COMPANIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE FISCAL YEAR ENDED JANUARY 27, 1996
(UNAUDITED)
PRO FORMA
PRO FORMA ADJUSTMENTS FOR
ADJUSTMENTS FOR PRO FORMA SALE OF
HISTORICAL MARSHALLS ACQUISITION SUBTOTAL CHADWICK'S PRO FORMA
Dollars In Thousands Except Per Share Amounts
<S> <C> <C> <C> <C> <C>
Net sales $4,447,549 $2,110,394 (2a) $6,557,943 $(472,434) (3a) $6,085,509
Cost of sales, including buying
and occupancy costs 3,429,401 { (10,500) (2c) 5,187,537 (286,144) (3a) 4,901,393
{1,768,636 (2a)
Selling, general and administrative
expenses 830,019 { 2,264 (2d) 1,209,488 (160,143) (3a) 1,049,345
{ 377,205 (2a)
Store closing costs 35,000 - 35,000 35,000
Interest expense, net 44,226 { 6,258 (2a) 72,572 { (6,040) (3a)
{22,088 (2b) {(14,260) (3b)
{ (1,200) (3c) 51,072
Income from continuing operations
before income taxes 108,903 53,346 48,699
Provision for income taxes 45,304 {(16,637) (2a) 23,126 {(8,110) (3a)
{ (5,541) (2e) { 6,184 (3d) 21,200
Income from continuing operations 63,599 30,220 27,499
Deduct dilutive preferred stock
dividends 9,314 8,342 (2f) 17,656 17,656
Income from continuing operations
for earnings per share computations $ 54,285 $ 12,564 $ 9,843
Number of common shares for
earnings per share computations 73,133,349 1,625,057 (2g) 74,758,406 74,758,406
Income from continuing operations
per common share $ .74 $ .17 $ .13
</TABLE>
The accompanying notes are an integral part of the unaudited
pro forma condensed consolidated statement of income.
F-4
<TABLE>
<CAPTION>
THE TJX COMPANIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED OCTOBER 26, 1996
(UNAUDITED)
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
In Thousands Except Per Share Amounts
<S> <C> <C> <C>
Net sales $4,742,935 $4,742,935
Cost of sales, including
buying and occupancy costs 3,694,820 3,694,820
Selling, general and
administrative expenses 775,983 775,983
Interest expense,, net 35,674 {(10,708) (3b)
{ (1,050) (3c) 23,916
Income from continuing
operations before income taxes 236,458 248,216
Provision for income taxes 98,154 4,703 (3d) 102,857
Income from continuing operations 138,304 145,359
Deduct dilutive preferred stock
dividends 0 0
Income from continuing operations
for earnings per share
computations $ 138,304 $ 145,359
Number of common shares for
primary and fully diluted
earnings per share
computations 90,574,029 90,574,029
Income from continuing
operations per common share $1.53 $1.60
</TABLE>
The accompanying notes are an integral part of the unaudited pro forma
condensed consolidated statement of income.
F-5
THE TJX COMPANIES, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
IN THOUSANDS
Note 1
The pro forma condensed consolidated balance sheet reflects the
following adjustments:
(a) To record an estimated net gain of $125 million on the sale
of Chadwick's by recording the consideration received, which
includes a $20 million convertible subordinated note and
cash of $207.3 million adjusted under the terms of the
agreement for an assumed October 26, 1996 closing, recording
the write-off of the net assets of discontinued operations
sold, except for $90 million for net consumer credit card
receivables retained by the Company and recording an
estimated liability for expenses, taxes and other costs
associated with the sale. The estimated net gain includes
the benefit from full utilization of the Company's $139
million capital loss carryforward.
(b) The Company is required to redeem its outstanding Series D
preferred stock from the proceeds of certain asset sales.
It is assumed the Company calls the Series D for redemption
and that the holders of the Series D preferred stock elect
their conversion rights and convert into common stock.
(c) To record the prepayment of long-term debt (including
current installments) of $207.3 million from cash proceeds
received from the sale and an after-tax charge of $1.6
million for the write-off of deferred financing charges of
$2.7 million associated with the debt. The Company
anticipates full prepayment of this debt in its fourth
quarter reporting period for the fiscal year ending January
25, 1997.
Note 2
The pro forma condensed consolidated statement of income reflects the
following adjustments relating to the acquisition of Marshalls:
(a) To record Marshalls historical results for the period
January 29, 1995 through November 17, 1995, the period prior
to the Company's acquisition of Marshalls.
Net sales $2,110,394
Cost of sales including
buying and occupancy costs 1,768,636
Selling, general and
administrative expenses 377,205
Interest expense, net 6,258
Provision (benefit) for income taxes (16,637)
F-6
(b) To record additional interest expense and amortization of
deferred financing costs for the period January 29, 1995
through November 17, 1995.
(c) To reflect a reduction in depreciation expense due to the
net write down of property to fair value for the period
January 29, 1995 through November 17, 1995.
(d) To record amortization of "Marshalls" tradename, net of
reduction in amortization due to elimination of goodwill
from prior acquisitions, for period January 29, 1995 through
November 17, 1995.
(e) To record the income tax (benefit) associated with pro forma
adjustments (b), (c) and (d) at a marginal tax rate of 40%.
(f) To adjust preferred stock dividends for dilutive effect of
additional dividends on preferred stock issued for
acquisition of Marshalls.
(g) To adjust weighted average shares outstanding for earnings
per share calculations shares for dilutive effect of
preferred stock issued for acquisition of Marshalls.
Note 3
The pro forma condensed consolidated statement of income reflects the
following adjustments for sale of the Chadwick's division.
(a) To restate continuing operations for the twelve months ended
January 27, 1996 by eliminating the net sales, expenses and
tax provision relating to Chadwick's operating results.
(b) To reflect a reduction in interest expense as a result of
the repayment of a portion of the term loan incurred from
the acquisition of Marshalls for the periods indicated.
Twelve Months Nine Months
Ended Ended
January 27, 1996 October 26, 1996
(In Thousands)
Interest expense, net $(14,260) $(10,708)
(c) To reduce interest expense for interest income on the $20
million note receivable received as partial consideration
for the sale of Chadwick's. Interest income of 6% per annum
assumed for the twelve months ended January 27, 1996 and 7%
per annum for the nine months ended October 26, 1996.
Twelve Months Nine Months
Ended Ended
January 27, 1996 October 26, 1996
(In Thousands)
Interest expense, net $(1,200) $(1,050)
F-7
(d) To record additional tax provision related to items (b) and
(c) at a marginal tax rate of 40%.
Twelve Months Nine Months
Ended Ended
January 27, 1996 October 26, 1996
(In Thousands)
Provision for income taxes $6,184 $4,703
F-8
