PAGE 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
/X/ Quarterly Report Under Section 13 and 15(d)
of the Securities Exchange Act of 1934
or
/ / Transition Report Pursuant to Section 13 and 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended April 27, 1996
Commission file number 1-4908
The TJX Companies, Inc.
(Exact name of registrant as specified in its charter)
DELAWARE 04-2207613
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
770 Cochituate Road
Framingham, Massachusetts 01701
(Address of principal executive offices) (Zip Code)
(508)390-1000
(Registrant's telephone number, including area code)
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 .
The number of shares of Registrant's common stock outstanding as of May
25, 1996, 72,849,601.
PAGE 2
PART I FINANCIAL INFORMATION
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF INCOME
(UNAUDITED)
DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS
<TABLE>
<CAPTION>
Thirteen Weeks Ended
April 27, April 29,
1996 1995
<S> <C> <C>
Net sales $1,604,243 $ 830,430
Cost of sales, including buying and
occupancy costs 1,240,659 634,437
Selling, general and administrative expenses 297,032 170,196
Interest on debt, net 15,105 8,499
Income from continuing operations before
income taxes 51,447 17,298
Provision for income taxes 21,361 7,788
Income from continuing operations 30,086 9,510
Income (loss) from discontinued operations,
net of income taxes - (1,445)
Net income 30,086 8,065
Preferred stock dividends 4,527 1,789
Net income available to common shareholders $ 25,559 $ 6,276
Primary and fully diluted earnings per
common share:
Continuing operations $ .33 $ .11
Discontinued operations - (.02)
Net income $ .33 $ .09
Cash dividends per common share $ .07 $ .14
</TABLE>
The accompanying notes are an integral part of the financial statements.
PAGE 3
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
BALANCE SHEETS
(UNAUDITED)
IN THOUSANDS
<TABLE>
<CAPTION>
April 27, January 27, April 29,
1996 1996 1995
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 191,413 $ 209,226 $ 21,159
Accounts receivable 140,938 98,409 83,053
Merchandise inventories 1,372,031 1,343,852 1,010,991
Prepaid expenses 32,550 35,235 40,943
Net current assets of
discontinued operations - - 10,811
Total current assets 1,736,932 1,686,722 1,166,957
Property, at cost:
Land and buildings 141,192 141,009 114,810
Leasehold costs and improvements 436,106 429,715 262,915
Furniture, fixtures and equipment 588,079 580,959 394,254
1,165,377 1,151,683 771,979
Less accumulated depreciation
and amortization 393,339 366,191 313,201
772,038 785,492 458,778
Other assets 35,904 37,325 13,952
Goodwill and tradename,
net of amortization 234,486 236,043 89,309
Net noncurrent assets of
discontinued operations - - 34,943
TOTAL ASSETS $2,779,360 $2,745,582 $1,763,939
LIABILITIES
Current liabilities:
Short-term debt $ 2,195 $ - $ 168,365
Current installments of
long-term debt 88,728 78,670 31,364
Accounts payable 498,543 473,523 427,961
Accrued expenses and other
current liabilities 698,695 702,132 260,390
Federal and state income taxes
payable 8,911 23,246 134
Total current liabilities 1,297,072 1,277,571 888,214
Long-term debt exclusive of
current installments 679,676 690,713 238,497
Deferred income taxes 17,071 12,664 34,498
SHAREHOLDERS' EQUITY
Preferred stock at face value,
authorized 5,000,000 shares, par
value $1, issued and outstanding
cumulative convertible stock of:
250,000 shares of 8% Series A 25,000 25,000 25,000
1,650,000 shares of 6.25% Series C 82,500 82,500 82,500
250,000 shares of 1.81% Series D 25,000 25,000 -
1,500,000 shares of 7% Series E 150,000 150,000 -
Common stock, authorized 150,000,000
shares, par value $1, issued and
outstanding 72,554,759, 72,485,776
and 72,401,076 shares 72,554 72,486 72,401
Additional paid-in capital 269,518 269,159 267,575
Retained earnings 160,969 140,489 155,254
Total shareholders' equity 785,541 764,634 602,730
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $2,779,360 $2,745,582 $1,763,939
</TABLE>
The accompanying notes are an integral part of the financial statements.
PAGE 4
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(UNAUDITED)
IN THOUSANDS
<TABLE>
<CAPTION>
Thirteen Weeks Ended
April 27, April 28,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $ 30,086 $ 8,065
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 32,107 18,555
Loss from discontinued operations - 1,445
Loss on property disposals 1,096 152
Other (438) (485)
Changes in assets and liabilities:
(Increase) in accounts receivable (42,529) (41,304)
(Increase) in merchandise inventories (28,179) (120,398)
(Increase) decrease in prepaid expenses 2,685 (18,062)
Increase in accounts payable 25,020 12,100
Increase (decrease) in accrued expenses
and other current liabilities (3,437) 7,966
Increase (decrease) in income taxes payable (14,335) 134
Increase in deferred income taxes 4,407 975
Net cash provided by (used in) operating
activities 6,483 (130,857)
Cash flows from investing activities:
Property additions (16,905) (26,615)
Net cash (used in) investing activities (16,905) (26,615)
Cash flows from financing activities:
Proceeds from borrowings of short-term debt 2,195 148,365
Principal payments on long-term debt (983) (923)
Proceeds from sale and issuance of common
stock, net 1,003 23
Cash dividends (9,606) (11,925)
Net cash provided by (used in)
financing activities (7,391) 135,540
Net cash (used in) continuing operations (17,813) (21,932)
Net cash provided by discontinued operations - 1,522
Net (decrease) in cash and cash equivalents (17,813) (20,410)
Cash and cash equivalents at beginning of year 209,226 41,569
Cash and cash equivalents at end of period $ 191,413 $ 21,159
</TABLE>
The accompanying notes are an integral part of the financial statements.
PAGE 5
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
Thirteen Weeks Ended April 27, 1996
Versus Thirteen Weeks Ended April 29, 1995
On November 17, 1995, the Company acquired the Marshalls off-price family
apparel chain from Melville Corporation. Under the purchase method of
accounting, the assets and liabilities and results of operations associated
with the acquired business are included in the Company's financial position
and results of operations from the date of acquisition.
Net sales from continuing operations for the first quarter were $1,604.2
million, up 93% from $830.4 million last year. The increase in sales is
primarily attributable to the acquisition of Marshalls. Same store sales
increased by 5% at T.J. Maxx, 4% at Winners, 7% at Marshalls and 5% at
HomeGoods. Chadwick's experienced a 13% increase in net sales.
Income from continuing operations was $30.1 million, or $.33 per common
share, versus $9.5 million or $.11 per common share, last year. Net income
for the period ended April 29, 1995, after reflecting Hit or Miss as a
discontinued operation, was $8.1 million or $.09 per common share.
The following table sets forth operating results expressed as a percentage
of net sales (continuing operations):
Percentage of Net Sales
13 Weeks Ended
4/27/96 4/29/95
Net sales 100.0% 100.0%
Cost of sales, including
buying and occupancy costs 77.3 76.4
Selling, general and
administrative expenses 18.5 20.5
Interest expense, net 1.0 1.0
Income from continuing operations
before income taxes 3.2% 2.1%
Cost of sales including buying and occupancy costs as a percent of net
sales increased from the prior year. This increase is the result of
Chadwick's smaller pro rata share of consolidated results, due to the
Marshalls acquisition, as Chadwick's operates with a lower cost of sales
ratio than the Company's store operations.
Selling, general and administrative expenses, as a percentage of net sales,
decreased from the prior year. This improvement is primarily the result of
a decrease in Chadwick's pro rata share of consolidated results, due to the
Marshalls acquisition, as Chadwick's operates at a higher selling, general
and administrative expense ratio than the Company's store operations.
The increase in interest expense for the quarter ended April 1996 versus
April 1995 is due to interest on the $200 million of notes issued in June
1995 and on the $375 million term loan incurred for the acquisition of
Marshalls.
PAGE 6
The decrease in the effective income tax rate reflects the tax benefits on
foreign operating losses realizable due to a corporate restructuring of
certain foreign subsidiaries that took place in the second half of fiscal
1996.
The following table sets forth the operating results of the Company's major
business segments: (unaudited)
(In Thousands)
Thirteen Weeks Ended
April 27, April 29,
1996 1995
Net sales:
Off-price family apparel stores $1,452,864 $ 700,714
Off-price catalog operation 131,996 116,611
Off-price home fashion stores 19,383 13,105
$1,604,243 $ 830,430
Operating income (loss):
Off-price family apparel stores $ 67,057 $ 32,911
Off-price catalog operation 12,931 5,261
Off-price home fashion stores (2,570) (1,529)
77,418 36,643
General corporate expense (1) 10,213 10,193
Goodwill amortization 653 653
Interest expense, net 15,105 8,499
Income from continuing operations
before income taxes $ 51,447 $ 17,298
(1) General corporate expense for the thirteen weeks ended April 27, 1996
includes the net operating results of T.K. Maxx. General Corporate
expense for the thirteen weeks ended April 29, 1995 includes the net
operating results of T.K. Maxx and the Cosmopolitan catalog.
The off-price family apparel stores segment, T.J. Maxx, Marshalls, and
Winners more than doubled its operating profit primarily due to the
benefits of the Marshalls acquisition. This segment's operating results
reflect its strong sales performance along with tight inventory control.
Chadwick's recorded an increase in operating income due to a strong
response to the spring catalog and its improved ability to meet customer
demand in the first quarter of this year versus last year's first quarter.
Stores in operation at the end of the period are as follows:
April 27, 1996 April 29, 1995
T.J. Maxx 590 558
Marshalls 494 -
Winners 57 39
HomeGoods 23 19
T.K. Maxx 9 6
PAGE 7
Financial Condition
Cash flows from operating and financing activities for the three months
reflect increases in inventories and accounts payable, which are primarily
due to normal seasonal requirements. The improvement in cash provided by
operating activities in the first quarter ended April 1996 versus April
1995 reflects stronger sales and tight inventory controls. The decrease in
short term borrowings from last year is a result of the strong cash
position at the end of fiscal 1996 which reflected the benefits from the
timing of the Marshalls acquisition and the resulting favorable cash flow
of the holiday selling season.
On May 24, 1996, Chadwick's of Boston, Ltd. ("Chadwick's"), a wholly-owned
subsidiary of the Company, filed a registration statement with the
Securities and Exchange Commission pursuant to which the Company intends to
sell to the public 9,260,000 shares of common stock of Chadwick's
(approximately 61% of its outstanding common stock). An additional
1,389,000 shares of Chadwick's common stock owned by the Company
(approximately 9% of the outstanding common stock) would be subject to an
over-allotment option granted to the underwriters. The registration
statement reflects an anticipated initial public offering price of between
$14.00 and $16.00 per share. The Company intends to use the proceeds from
the stock sale to pay down a large portion of the bank financing taken on
to acquire Marshalls. The Company is required to redeem the outstanding
Series D preferred stock with proceeds from the stock sale but it
anticipates the holders of the Series D will convert their preferred stock
into common stock upon a call for redemption.
There can be no assurance that the offering reflected in the Registration
Statement will be made or consummated or, if the offering is consummated,
that the amount of shares sold or the initial public offering price per
share will be as reflected in the Registration Statement.
PAGE 8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The results for the first three months are not necessarily indicative of
results for the full fiscal year, because the Company's business, in
common with the businesses of retailers generally, is subject to
seasonal influences, with higher levels of sales and income generally
realized in the second half of the year.
2. The preceding data are unaudited and reflect all normal recurring
adjustments, the use of retail statistics, and accruals and deferrals
among periods required to match costs properly with the related revenue
or activity, considered necessary by the Company for a fair presentation
of its financial statements for the periods reported, all in accordance
with generally accepted accounting principles and practices consistently
applied.
3. The Company's cash payments for interest expense and income taxes are as
follows: (in thousands)
Thirteen Weeks Ended
April 27, April 29,
1996 1995
Cash paid for:
Interest on debt and capital leases $ 6,967 $ 3,971
Income taxes 31,507 3,518
4. Effective September 30, 1995, the Company sold its Hit or Miss division
to members of Hit or Miss management and outside investors and, thus,
Hit or Miss' operating results for all prior periods have been
reclassified to discontinued operations.
5. On November 17, 1995, the Company completed its acquisition of the
Marshalls off-price family apparel chain from Melville Corporation. The
purchase price (before expenses) for the acquisition was $599.3 million,
consisting of $375 million in cash, before closing adjustments, plus an
additional $49.3 million (paid on April 30, 1996) based on the final
closing balance sheet, plus $175 million in TJX convertible preferred
stock. The purchase has been accounted for under the purchase method of
accounting.
As a result of the acquisition, the Company intends to close a total of
170 Marshalls stores and 30 T.J. Maxx stores, in operation at the date
of acquisition. The Company established a $244.1 million reserve in the
allocation of the purchase price of Marshalls, primarily relating to the
Marshalls store closings, and recorded a pre-tax charge of $35 million
relating to the T.J. Maxx store closings. The Company's total store
closing and restructuring reserve as of April 27, 1996 totalled $237.9
million.
In connection with the purchase of Marshalls, the Company entered into
an $875 million credit facility with a group of banks. The credit
facility consists of a $375 million term loan used for the cash portion
of the purchase price, and a $500 million revolving credit facility to
meet the Company's ongoing working capital needs.
PAGE 9
6. In October 1988, the Company completed the sale of its former Zayre
stores division to Ames Department Stores, Inc. ("Ames"). On April 25,
1990, Ames filed for protection under Chapter 11 of the Federal
Bankruptcy Code and on December 30, 1992, Ames emerged from bankruptcy
under a plan of reorganization. The Company is liable for certain
amounts to be distributed under the plan for certain unassigned landlord
claims under certain former Zayre store leases on which Zayre Corp. was
liable as of the date of acquisition and which Ames has rejected.
The Company remains contingently liable for the leases of most of the
former Zayre stores still operated by Ames. In addition, the Company is
contingently liable on a number of leases of Waban Inc., a division
spun-off in fiscal 1990, and of the Hit or Miss division, the Company's
former off-price women's specialty stores, sold on September 30, 1995.
The Company believes that in view of the nature of the leases and the
fact that Ames, Waban and Hit or Miss are primarily liable, the
Company's contingent liability on these leases will not have a material
effect on the Company's financial condition. Accordingly, the Company
believes its available reserves of $22.9 million as of April 27, 1996
should be adequate to cover all reasonably expected liabilities
associated with discontinued operations that it may incur.
7. On May 24, 1996, Chadwick's of Boston, Ltd. ("Chadwick's"), a wholly-
owned subsidiary of the Company, filed a
registration statement pursuant to which the Company intends to sell to
the public 9,260,000 shares of common stock of Chadwick's (approximately
61% of its outstanding common stock). An additional 1,389,000 shares of
Chadwick's common stock owned by the Company (approximately 9% of the
outstanding common stock) would be subject to an over-allotment option
granted to the underwriters. The registration statement reflects an
anticipated initial public offering price of between $14.00 and $16.00
per share. The Company intends to use the proceeds from the stock sale
to pay down a large portion of the bank financing taken on to acquire
Marshalls. The Company is required to redeem the outstanding Series D
preferred stock with proceeds from the stock sale but it anticipates the
holders of the Series D will convert their preferred stock into common
stock upon a call for redemption.
PAGE 10
PART II. Other Information
Item 4 Submission of Matters to a Vote of Security Holders
The Company held its Annual Meeting of Stockholders on June 4,
1996. The following were voted upon at the Annual Meeting:
Election of Directors For Withheld
Phyllis B. Davis 62,676,593 211,245
Dennis F. Hightower 62,671,418 216,420
John F. O'Brien 62,671,585 216,253
Willow B. Shire 62,668,782 219,056
In addition to those elected, the following are directors
whose term of office continued after the Annual Meeting:
Bernard Cammarata
Richard G. Lesser
Arthur F. Loewy
John M. Nelson
Robert F. Shapiro
Burton S. Stern
Fletcher H. Wiley
Item 6(a) Exhibits
11 Statement re Computation of Per Share Earnings
Item 6(b) Reports on Form 8-K
The Company was not required to file a current report on Form
8-K during the quarter ended April 27, 1996.
On June 5, 1996, the Company filed a current report on Form 8-
K dated May 24, 1996 relating to the filing of a Registration
Statement by Chadwick's of Boston, Ltd., a subsidiary of the
Company, and the Company's intention to sell a majority
interest in its Chadwick's division. The Company filed
unaudited pro forma financial statements for the fiscal year
ended January 27, 1996 with the Form 8-K. Attached to this
report are unaudited pro forma financial statements for the
quarter ended April 27, 1996 giving effect to the offering
reflected in the Registration Statement.
PAGE 11
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.
THE TJX COMPANIES, INC.
(Registrant)
Date: June 11, 1996
/s/ Donald G. Campbell
Donald G. Campbell, Executive Vice
President - Finance, on behalf
of The TJX Companies, Inc. and as
Principal Financial and Accounting
Officer of The TJX Companies, Inc.
THE TJX COMPANIES, INC.
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
On May 24, 1996, Chadwick's of Boston, Ltd. ("Chadwick's"), a
holding company formed to own the off-price catalog operation of
The TJX Companies, Inc. (the "Company), filed a Registration
Statement with the Securities and Exchange Commission pursuant to
which the Company intends to sell to the public 9,260,000 shares of
common stock of Chadwick's. An additional 1,389,000 shares of
common stock are subject to an over-allotment option granted to the
underwriters. After the offering, the Company will own
approximately 30%-39% (depending on the amount of the underwriters'
over-allotment option exercised) of the outstanding shares of
common stock of Chadwick's. It is currently anticipated that the
initial offering price will be between $14.00 and $16.00 per share.
The pro forma condensed consolidated financial statements of the
Company assume that the offering takes place at a price of $15.00
per share and that no underwriters' over-allotment option is
exercised. The pro forma condensed consolidated balance sheet as
of April 27, 1996 assumes the sale of 61% of the Company's
investment in Chadwick's on that date and is based on the unaudited
historical balance sheet of the Company as of April 27, 1996. The
pro forma adjustments eliminate the assets and liabilities of
Chadwick's included in the consolidated results of the Company,
record a gain on the sale of the Company's 61% interest in
Chadwick's, record the Company's remaining equity investment in
Chadwick's, assume conversion of the Company's Series D preferred
stock into common stock pursuant to a call for redemption and
assume the net proceeds from the offering along with Chadwick's
repayment of intercompany indebtedness are used to repay
outstanding debt incurred to acquire Marshalls.
The pro forma condensed consolidated statement of income for the
quarter ended April 27, 1996 is based on the unaudited historical
statement of income of the Company filed with the Form 10-Q. The
pro forma adjustments eliminate the operating results for
Chadwick's included in the Company's consolidated results, record
39% of Chadwick's net income and reflect a reduction in interest
expense due to the repayment of debt. Pro forma adjustments to the
statement of income reflect the impact of the transaction as if it
occurred on January 28, 1996, the beginning of the most recent
fiscal year.
These pro forma condensed consolidated financial statements have
been prepared for information purposes only and do not purport to
indicate what necessarily would have occurred had the public
offering taken place on the dates indicated or what results may be
in the future. The accompanying pro forma condensed consolidated
financial statements should be read in conjunction with the
historical financial statements of the Company and the Form S-1
Registration Statement filed by Chadwick's of Boston, Ltd.
THE TJX COMPANIES, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
FOR FIRST QUARTER ENDED APRIL 27, 1996
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
BALANCE PRO FORMA PRO FORMA
AS REPORTED ADJUSTMENTS BALANCE
<S> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 191,413 ${ 40,277 (1b) $ 201,390
{ 125,700 (1c)
{(156,000) (1e)
Accounts receivable 140,938 (65,544) (1a) 75,394
Merchandise inventories 1,372,031 (71,775) (1a) 1,300,256
Prepaid expenses 32,550 (13,674) (1a) 18,876
Total current assets 1,736,932 1,595,916
Property, net 772,038 (51,119) (1a) 720,919
Investment in Chadwick's of
Boston, Ltd. - { 126,865 (1a) 33,769
{ (40,277) (1b)
{ (52,819) (1c)
Other assets 35,904 35,904
Goodwill and tradename, net of
amortization 234,486 234,486
Total Assets $2,779,360 $2,620,994
Liabilities
Current liabilities:
Short-term debt $ 2,195 $ 2,195
Current installments of
long-term debt 88,728 (25,000) (1e) 63,728
Accounts payable 498,543 (34,005) (1a) 464,538
Accrued expenses and other
current liabilities 707,606 (39,287) (1a) 678,319
10,000 (1c)
Total current liabilities 1,297,072 1,208,780
Long-term debt, exclusive of
current installments 679,676 (131,000) (1e) 548,676
Deferred income taxes 17,071 (1,955) (1a) 15,116
Shareholders' Equity
Preferred stock at face value 282,500 (25,000) (1d) 257,500
Common stock 72,554 1,349 (1d) 73,903
Additional paid-in capital 269,518 23,651 (1d) 293,169
Retained earnings 160,969 62,881 (1c) 223,850
Total shareholders' equity 785,541 848,422
Total Liabilities and
Shareholders' Equity $2,779,360 $2,620,994
</TABLE>
The accompanying notes are an integral part of the unaudited pro forma
condensed consolidated balance sheet.
THE TJX COMPANIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE FIRST QUARTER ENDED APRIL 27, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
BALANCE PRO FORMA PRO FORMA
AS REPORTED ADJUSTMENTS BALANCE
In Thousands Except Per Share Amounts
<S> <C> <C> <C>
Net sales $1,604,243 $(131,996) (2a) $1,472,247
Cost of sales, including
buying and occupancy costs 1,240,659 (73,300) (2a) 1,167,359
Selling, general and
administrative expenses 297,032 (45,881) (2a) 251,151
Store closing costs
Interest on debt, net 15,105 { (530) (2a) 11,987
{(2,588) (2b)
Income from continuing
operations before income taxes 51,447 41,750
Provision for income taxes 21,361 {(5,102) (2a) 17,294
{ 1,035 (2b)
30,086 24,456
Equity in net income of Chadwick's - 2,612 (2c) 2,612
Income from continuing operations 30,086 27,068
Preferred stock dividend adjustment 1,789 1,789
Income from continuing operations
for earnings per share
computations $ 28,297 $ 25,279
Number of common shares for
primary and fully diluted
earnings per share
computations 85,340,267 85,340,267
Income from continuing
operations per common share $ .33 $ .30
</TABLE>
The accompanying notes are an integral part of the unaudited pro forma
condensed consolidated statement of income.
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 eliminate the assets and liabilities of Chadwick's
included in the consolidated results of the Company and
reflect the net assets of Chadwick's as investment in
Chadwick's of Boston, Ltd.
(b) To reflect payment to the Company by Chadwick's of the
balance of its inter-company indebtedness, after a $20
million forgiveness of debt via capital contribution by TJX.
(c) To record net proceeds of $125.7 million (based on $15.00
per share) received from TJX's sale of 61% of its investment
in Chadwick's, after the repayment of inter-company debt
described above, and to record a gain of $62.9 million,
after estimated taxes of $10 million, on this transaction as
of January 27, 1996.
(d) 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.
(e) To record repayment of long-term debt (including current
installments) of $156.0 million. The net proceeds used to
repay the debt include cash received from Chadwick's in
repayment of its inter-company debt and the net
proceeds from the stock offering, less taxes to be paid.
Note 2
The pro forma condensed consolidated statement of income reflects the
following adjustments for the initial public offering of Chadwick's
stock.
(a) To eliminate the net sales, expenses and tax provision
relating to Chadwick's operating results as included in the
consolidated results of the Company.
(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, along with the related impact
on income tax provision.
(c) To record 39% of the net earnings of Chadwick's as equity in
the net earnings of minority owned subsidiary. Chadwick's
net earnings for the first quarter ended April 27, 1996 were
$6.7 million.
EXHIBIT 11
COMPUTATION OF NET INCOME PER COMMON SHARE
(UNAUDITED)
DOLLARS IN THOUSANDS
<TABLE>
<CAPTION>
Thirteen Weeks Ended
April 27, April 29,
1996 1995
<S> <C> <C>
The computation of net income available and
adjusted shares outstanding follows:
Net income $ 30,086 $ 8,065
Less:
Preferred stock dividends (1,789) (1,789)
Net income used for primary and fully
diluted computation $ 28,297 $ 6,276
Weighted average number of common shares
outstanding 72,545,566 72,402,468
Add:
Assumed exercise of those options that
are common stock equivalents 1,053,810 59,386
Assumed exercise of convertible
preferred stock 11,740,891 -
Adjusted shares outstanding, used for
primary and fully diluted computation 85,340,267 72,461,854
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
statement income and balance sheets and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-25-1997
<PERIOD-END> APR-27-1996
<CASH> 191,413,000
<SECURITIES> 0
<RECEIVABLES> 140,938,000
<ALLOWANCES> 0
<INVENTORY> 1,372,031,000
<CURRENT-ASSETS> 1,736,932,000
<PP&E> 1,165,377,000
<DEPRECIATION> 393,339,000
<TOTAL-ASSETS> 2,779,360,000
<CURRENT-LIABILITIES> 1,297,072,000
<BONDS> 679,676,000
175,000,000
107,500,000
<COMMON> 72,554,000
<OTHER-SE> 430,487,000
<TOTAL-LIABILITY-AND-EQUITY> 785,541,000
<SALES> 1,604,243,000
<TOTAL-REVENUES> 1,604,243,000
<CGS> 1,240,659,000
<TOTAL-COSTS> 1,240,659,000
<OTHER-EXPENSES> 297,032,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,105,000
<INCOME-PRETAX> 51,447,000
<INCOME-TAX> 21,361,000
<INCOME-CONTINUING> 30,086,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 30,086,000
<EPS-PRIMARY> 0.33
<EPS-DILUTED> 0.33
</TABLE>
