<PAGE> 1
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 October 28, 2000
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 November 25,
2000: 279,582,780
<PAGE> 2
PAGE 2
PART I FINANCIAL INFORMATION
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF INCOME
(UNAUDITED)
DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS
THIRTEEN WEEKS ENDED
--------------------------
OCTOBER 28, OCTOBER 30,
2000 1999
----------- -----------
(As Restated)
Net sales $2,461,411 $2,235,054
---------- ----------
Cost of sales, including buying and occupancy costs 1,807,748 1,646,270
Selling, general and administrative expenses 385,666 338,319
Interest expense, net 9,379 4,274
---------- ----------
Income before income taxes 258,618 246,191
Provision for income taxes 100,344 94,474
---------- ----------
Net income $ 158,274 $ 151,717
========== ==========
Earnings per share:
Net income:
Basic $.56 $.48
Diluted $.56 $.48
Cash dividends declared per share $.04 $.035
The accompanying notes are an integral part of the financial statements.
<PAGE> 3
PAGE 3
PART I FINANCIAL INFORMATION
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF INCOME
(UNAUDITED)
DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS
THIRTY-NINE WEEKS ENDED
----------------------------
OCTOBER 28, OCTOBER 30,
2000 1999
----------- -----------
(As Restated)
Net sales $6,827,701 $6,268,411
---------- ----------
Cost of sales, including buying and occupancy costs 5,064,086 4,650,310
Selling, general and administrative expenses 1,088,097 979,476
Interest expense, net 17,206 5,504
---------- ----------
Income before income taxes and cumulative effect
of accounting change 658,312 633,121
Provision for income taxes 255,425 243,249
---------- ----------
Income before cumulative effect of accounting
change 402,887 389,872
Cumulative effect of accounting change, net of
income taxes -- (5,154)
---------- ----------
Net income $ 402,887 $ 384,718
========== ==========
Earnings per share:
Income before cumulative effect of accounting change:
Basic $1.39 $1.23
Diluted $1.38 $1.22
Net income:
Basic $1.39 $1.21
Diluted $1.38 $1.20
Cash dividends declared per share $.12 $.105
The accompanying notes are an integral part of the financial statements.
<PAGE> 4
PAGE 4
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
BALANCE SHEETS
(UNAUDITED)
IN THOUSANDS
<TABLE>
<CAPTION>
OCTOBER 28, JANUARY 29, OCTOBER 30,
2000 2000 1999
----------- ----------- -----------
(As Restated)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 55,481 $ 371,759 $ 24,561
Accounts receivable 70,719 55,461 60,725
Merchandise inventories 1,949,730 1,229,587 1,677,584
Prepaid expenses and other current assets 47,923 43,758 75,001
----------- ----------- -----------
Total current assets 2,123,853 1,700,565 1,837,871
----------- ----------- -----------
Property at cost:
Land and buildings 133,575 116,005 115,757
Leasehold costs and improvements 684,499 622,962 612,367
Furniture, fixtures and equipment 935,536 849,932 819,213
----------- ----------- -----------
1,753,610 1,588,899 1,547,337
Less accumulated depreciation and amortization 875,348 754,314 723,397
----------- ----------- -----------
878,262 834,585 823,940
----------- ----------- -----------
Other assets 93,802 55,826 50,335
Deferred income taxes, net 40,955 23,143 32,428
Goodwill and tradename, net of amortization 186,411 190,844 193,981
----------- ----------- -----------
TOTAL ASSETS $ 3,323,283 $ 2,804,963 $ 2,938,555
=========== =========== ===========
LIABILITIES
Current liabilities:
Short-term debt $ 311,000 $ -- $ 108,000
Current installments of long-term debt 155 100,359 100,510
Accounts payable 881,224 615,671 747,043
Accrued expenses and other current liabilities 625,834 607,348 609,023
Federal and state income taxes payable 88,633 42,990 66,481
----------- ----------- -----------
Total current liabilities 1,906,846 1,366,368 1,631,057
----------- ----------- -----------
Long-term debt exclusive of current installments 319,357 319,367 120,081
Commitments and contingencies
SHAREHOLDERS' EQUITY
Common stock, authorized 1,200,000,000 shares,
par value $1, issued and outstanding
279,772,945; 299,979,363 and 310,080,847 shares 279,773 299,979 310,081
Accumulated other comprehensive income (loss) (1,929) (1,433) (1,480)
Additional paid-in capital -- -- --
Retained earnings 819,236 820,682 878,816
----------- ----------- -----------
Total shareholders' equity 1,097,080 1,119,228 1,187,417
----------- ----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,323,283 $ 2,804,963 $ 2,938,555
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 5
PAGE 5
THE TJX COMPANIES, INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(UNAUDITED)
IN THOUSANDS
THIRTY-NINE WEEKS ENDED
-----------------------------
October 28, October 30,
2000 1999
----------- -----------
(As Restated)
Cash flows from operating activities:
Net income $402,887 $384,718
Adjustments to reconcile net income to net cash
provided by operating activities:
Cumulative effect of accounting change -- 5,154
Depreciation and amortization 131,074 115,811
(Gain) on sale of other assets (722) --
Loss on property disposals 858 5,776
Other, net (8,834) (20,425)
Changes in assets and liabilities:
(Increase) in accounts receivable (15,258) (16,605)
(Increase) in merchandise inventories (720,143) (476,882)
(Increase) in prepaid expenses and other
current assets (12,404) (46,650)
(Increase) in deferred income taxes (17,901) (7,425)
Increase in accounts payable 265,553 129,884
Increase (decrease) in accrued expenses
and other current liabilities 21,650 (4,393)
Increase in income taxes payable 46,695 14,798
-------- ---------
Net cash provided by operating activities 93,455 83,761
-------- ---------
Cash flows from investing activities:
Property additions (181,319) (182,470)
Issuance of note receivable (18,524) (4,146)
Proceeds from sale of other assets 9,183 --
--------- ---------
Net cash (used in) investing activities (190,660) (186,616)
--------- ---------
Cash flows from financing activities:
Proceeds from borrowings of short-term debt 311,000 108,000
Principal payments on long-term debt (100,273) (458)
Cash payments for repurchase of common stock (400,355) (418,159)
Proceeds from sale and issuance of
common stock, net 4,051 8,676
Cash dividends paid (33,496) (31,887)
--------- ---------
Net cash (used in) financing activities (219,073) (333,828)
--------- ---------
Net (decrease) in cash and cash equivalents (316,278) (436,683)
Cash and cash equivalents at beginning of year 371,759 461,244
--------- ---------
Cash and cash equivalents at end of period $ 55,481 $ 24,561
========= =========
The accompanying notes are an integral part of the financial statements.
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PAGE 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The results for the first nine 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. On February 11, 2000, the Company adopted the provisions of the SEC's Staff
Accounting Bulletin No. 101 related to layaway sales effective as of
January 31, 1999. Accordingly, the Company restated its earnings for the
first three quarters of the fiscal year ended January 29, 2000. The Company
recorded a one-time, non-cash, after-tax charge of $5.2 million in the
first quarter of fiscal 2000 for the cumulative effect of the accounting
change. The prior periods presented in these Financial Statements have been
restated and include the impact of the accounting change.
4. The Company's cash payments for interest and income taxes are as follows:
THIRTY-NINE WEEKS ENDED
------------------------------------
OCTOBER 28, OCTOBER 30,
2000 1999
----------- -----------
(In Thousands)
Cash paid for:
Interest on debt $ 20,669 $ 9,983
Income taxes $225,558 $235,812
5. In October 1988, the Company completed the sale of its former Zayre Stores
division to Ames Department Stores, Inc. ("Ames"). In April 1990, Ames
filed for protection under Chapter 11 of the Federal Bankruptcy Code and in
December 1992, Ames emerged from bankruptcy under a plan of reorganization.
The Company remains contingently liable for the leases of most of the
former Zayre stores still operated by Ames. The Company believes that the
Company's contingent liability on these leases will not have a material
effect on the Company's financial condition.
The Company is also contingently liable on certain leases of its former
warehouse club operations (BJ's Wholesale Club and HomeBase), which was
spun off by the Company in fiscal 1990 as Waban Inc. During fiscal 1998,
Waban Inc. was renamed HomeBase, Inc. and spun-off its BJ's Wholesale Club
division (BJ's Wholesale Club, Inc.). HomeBase, Inc. and BJ's Wholesale
Club, Inc. are primarily liable on their respective leases and have
indemnified the Company for any amounts the Company may have to pay with
respect to such leases. In addition, HomeBase, Inc., BJ's Wholesale Club,
Inc. and the Company have entered into agreements under which BJ's
Wholesale Club, Inc. has
<PAGE> 7
PAGE 7
substantial indemnification responsibility with respect to such HomeBase,
Inc. leases. The Company is also contingently liable on certain leases of
BJ's Wholesale Club, Inc. for which both BJ's Wholesale Club, Inc. and
HomeBase, Inc. remain liable. The Company believes that its contingent
liability on the HomeBase, Inc. and BJ's Wholesale Club, Inc. leases will
not have a material effect on the Company's financial condition.
The Company is also contingently liable on several leases of its former Hit
or Miss division which was sold by the Company in September 1995. On
November 17, 2000, the Hit or Miss store chain filed for bankruptcy under
Chapter 11. TJX believes it has adequate reserves relating to its
contingent liabilities associated with Hit or Miss and that these
liabilities and future cash flow requirements are not material to the
Company.
6. The Company's comprehensive income for the periods ended October 28, 2000
and October 30, 1999 is presented below:
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
-------------------------- ---------------------------
OCTOBER 28, OCTOBER 30, OCTOBER 28, OCTOBER 30,
2000 1999 2000 1999
----------- ----------- ----------- -----------
(As Restated) (As Restated)
(In Thousands) (In Thousands)
<S> <C> <C> <C> <C>
Net income $158,274 $151,717 $402,887 $384,718
Other comprehensive income (loss):
Foreign currency translation
adjustment, net of hedging activity 14 (154) (629) 107
Unrealized (loss) on marketable securities -- (58) -- (58)
Reclassification adjustment of
unrealized loss on marketable
securities -- -- 133 --
-------- -------- -------- --------
Comprehensive income $158,288 $151,505 $402,391 $384,767
======== ======== ======== ========
</TABLE>
7. The computation of basic and diluted earnings per share is as follows:
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED
------------------------------------
October 28, October 30,
2000 1999
----------- -----------
(As Restated)
(Dollars in thousands)
(except per share amounts)
<S> <C> <C>
Net income (numerator in earnings per share calculation) $158,274 $151,717
Shares for basic and diluted earnings per share calculations:
Average common shares outstanding for basic EPS 280,987,221 313,297,756
Dilutive effect of stock options and awards 1,946,497 3,015,253
----------- -----------
Average common shares outstanding for diluted EPS 282,933,718 316,313,009
=========== ===========
Net income:
Basic earnings per share $.56 $.48
Diluted earnings per share $.56 $.48
</TABLE>
<PAGE> 8
PAGE 8
<TABLE>
<CAPTION>
THIRTY-NINE WEEKS ENDED
-------------------------------------
OCTOBER 28, OCTOBER 30,
2000 1999
----------- -----------
(As Restated)
(Dollars in thousands)
(except per share amounts)
<S> <C> <C>
Income before cumulative effect of accounting change
(numerator in earnings per share calculation) $402,887 $389,872
Net income (numerator in earnings per share calculation) $402,887 $384,718
Shares for basic and diluted earnings per share calculations:
Average common shares outstanding for basic EPS 290,051,195 317,390,461
Dilutive effect of stock options and awards 1,860,134 3,441,890
----------- -----------
Average common shares outstanding for diluted EPS 291,911,329 320,832,351
=========== ===========
Income before cumulative effect of accounting change:
Basic earnings per share $1.39 $1.23
Diluted earnings per share $1.38 $1.22
Net income:
Basic earnings per share $1.39 $1.21
Diluted earnings per share $1.38 $1.20
</TABLE>
8. During October 1999, the Company received 693,537 common shares of Manulife
Financial. The shares issued reflected ownership interest in the
demutualized insurer due to policies held by the Company. These securities
were recorded at market value upon receipt resulting in an $8.5 million
pre-tax gain in the third quarter of fiscal 2000. Subsequent to the receipt
of the shares, unrealized gains and losses were recognized as a component
of comprehensive income (loss), net of income taxes. The shares were sold
during the first quarter of fiscal 2001 for $9.2 million.
9. During March 2000, the Company completed its $750 million stock repurchase
program and announced its intention to repurchase an additional $1 billion
of common stock over several years. During the nine months ended October
28, 2000, the Company repurchased 20.7 million shares at a cost of $396.1
million. Since the inception of the $1 billion stock repurchase program,
the Company has repurchased 18.0 million shares at a cost of $342.9
million.
10. During July 2000, the Company entered into a $250 million, 364-day
revolving credit agreement. This is in addition to the Company's existing
$500 million revolving credit facility. The terms of the new agreement are
substantially the same as those of the existing $500 million agreement, as
amended. The additional facility is available for general corporate
purposes, including the Company's stock repurchase program.
11. The Company historically aggregated several of its store chains in the
"Off-price family apparel stores" segment. This segment included the
Company's largest division, Marmaxx that operates the T.J. Maxx and
Marshalls store chains in the United States. This segment also included the
other store chains of Winners in Canada, T.K. Maxx in Europe and A.J.
Wright in the United States. The Company's only other store chain,
HomeGoods in the United States, was reported separately as the "Off-price
home fashion stores" segment. Due to the growth of the Company's Winners
and T.K. Maxx store chains, the Company has decided to no longer aggregate
them with Marmaxx and A.J. Wright. Thus, going forward the Company will
report each of its operating divisions as a separate segment.
<PAGE> 9
PAGE 9
The Company evaluates the performance of its segments based on pre-tax
income before general corporate expense, goodwill amortization and
interest. Presented below is financial information on the Company's
business segments for the periods ending October 28, 2000 and October 30,
1999.
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
------------------------ --------------------------
OCTOBER 28, OCTOBER 30, OCTOBER 28, OCTOBER 30,
2000 1999 2000 1999
----------- ----------- ----------- -----------
(As Restated) (As Restated)
<S> <C> <C> <C> <C>
Net sales:
Marmaxx $ 2,107,248 $ 1,965,553 $ 5,909,129 $ 5,585,694
Winners 161,019 131,472 409,417 329,665
T.K. Maxx 96,239 74,401 254,225 192,153
A.J. Wright 19,867 10,674 51,605 26,745
HomeGoods 77,038 52,954 203,325 134,154
----------- ----------- ----------- -----------
$ 2,461,411 $ 2,235,054 $ 6,827,701 $ 6,268,411
=========== =========== =========== ===========
Operating income (loss):
Marmaxx $ 248,992 $ 234,605 $ 658,250 $ 635,917
Winners 26,018 19,222 54,569 40,070
T.K. Maxx 5,646 2,750 4,683 147
A.J. Wright (4,002) (3,777) (11,549) (10,516)
HomeGoods 1,211 2,041 1,854 386
----------- ----------- ----------- -----------
277,865 254,841 707,807 666,004
General corporate expense 9,216 3,724 30,332 25,422
Goodwill amortization 652 652 1,957 1,957
Interest expense, net 9,379 4,274 17,206 5,504
----------- ----------- ----------- -----------
Income before income taxes and cumulative effect
of accounting change $ 258,618 $ 246,191 $ 658,312 $ 633,121
=========== =========== =========== ===========
</TABLE>
<PAGE> 10
PAGE 10
<TABLE>
<CAPTION>
October 28, October 30,
2000 1999
----------- -----------
(As Restated)
<S> <C> <C>
Identifiable assets:
Marmaxx $2,538,758 $2,355,835
Winners 137,181 123,395
T.K. Maxx 183,499 154,349
A.J. Wright 57,308 23,315
HomeGoods 119,211 70,869
Corporate, primarily cash, goodwill and deferred taxes 287,326 210,792
---------- ----------
$3,323,283 $2,938,555
========== ==========
Thirty-Nine Weeks Ended
-----------------------
October 28, October 30,
2000 1999
----------- -----------
Capital expenditures:
Marmaxx $ 106,910 $ 132,821
Winners 12,150 8,953
T.K. Maxx 20,271 26,215
A.J. Wright 21,237 6,561
HomeGoods 20,751 7,920
---------- ----------
$ 181,319 $ 182,470
========== ==========
Depreciation and amortization:
Marmaxx $ 109,603 $ 99,473
Winners 5,579 4,523
T.K. Maxx 7,395 5,856
A.J. Wright 1,849 1,004
HomeGoods 3,843 2,774
Corporate, including goodwill 2,805 2,181
---------- ----------
$ 131,074 $ 115,811
========== ==========
</TABLE>
12. Certain amounts in the prior period financial statements have been
reclassified for comparative purposes.
<PAGE> 11
PAGE 11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
Thirty-Nine Weeks Ended
October 28, 2000
VERSUS THIRTY-NINE WEEKS ENDED OCTOBER 30, 1999
All reference to earnings per share amounts are diluted earnings per share
unless otherwise indicated. Results for the thirty-nine weeks ended October 30,
1999 have been restated to reflect the change in accounting for layaway sales.
Net sales for the third quarter were $2,461.4 million, up 10% from $2,235.1
million for the third quarter last year. For the thirty-nine week period net
sales were $6,827.7 million, up 9% from $6,268.4 million for the same period
last year. The increase in sales for both periods is attributable to an increase
in same store sales and new stores. Consolidated same store sales increased 3%
and 2% for the thirteen and thirty-nine week periods ended October 28, 2000,
respectively. Consolidated store count was up 10%, year over year, as of October
28, 2000. Same store sales for the thirteen weeks were up 3% at Marmaxx (T.J.
Maxx and Marshalls), 9% at Winners and 10% at T.K. Maxx; were flat at HomeGoods;
and increased 16% at A.J. Wright. Same store sales for the thirty-nine week
period increased 2% at Marmaxx, 10% at Winners, 9% at T.K. Maxx, 5% at HomeGoods
and 19% at A.J. Wright.
Net income for the third quarter was $158.3 million, or $.56 per share, versus
$151.7 million, or $.48 per share last year. For the thirty-nine week period,
income before cumulative effect of accounting change was $402.9 million, or
$1.38 per share, versus $389.9 million, or $1.22 per share. After a $5.2 million
after-tax charge for the cumulative effect of accounting change, net income for
the thirty-nine weeks ended October 30, 1999 was $384.7 million or $1.20 per
share.
The following table sets forth operating results expressed as a percentage of
net sales:
<TABLE>
<CAPTION>
PERCENTAGE OF NET SALES
------------------------------------------------------
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
------------------------- ---------------------------
October 28, October 30, October 28, October 30,
2000 1999 2000 1999
----------- ----------- ----------- -----------
(As Restated) (As Restated)
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
----- ----- ----- -----
Cost of sales, including buying and occupancy costs 73.4 73.7 74.2 74.2
Selling, general and administrative expenses 15.7 15.1 15.9 15.6
Interest expense, net .4 .2 .3 .1
----- ----- ----- -----
Income before income taxes and cumulative effect of
accounting change 10.5% 11.0% 9.6% 10.1%
===== ===== ===== =====
</TABLE>
Cost of sales including buying and occupancy costs as a percentage of net sales,
decreased slightly for the quarter and remained constant for the year-to-date
period as compared to the comparable periods last year. This trend is largely
driven by the Marmaxx division where strong merchandise margins and good expense
control helped offset the impact of higher freight and distribution costs.
Selling, general and administrative expenses as a percentage of net sales has
increased over the comparable periods last year. This increase is due, in part,
to a pre-tax gain of $8.5 million included in selling, general and
administrative expenses for the periods ended October 30, 1999, resulting from
the demutualization of Manulife Financial. In addition this ratio reflects an
increase in store payroll costs at Marmaxx for the thirteen and thirty-nine
weeks ended October 28, 2000.
<PAGE> 12
PAGE 12
Interest expense, net, for the thirty-nine weeks ended this year includes
interest income of $9.1 million versus $8.5 million of interest income last
year. For the thirteen weeks ended, interest income was $.9 million this year
versus $.5 million last year. The increase in interest expense, net, over the
comparable periods last year, is primarily due to interest on the $200 million
of 7.45% notes issued in December 1999.
The Company's effective income tax rate is 38.8% for both the three months and
the nine months ended October 28, 2000 versus 38.4% for comparable periods last
year. Last year's effective tax rate included tax benefits associated with the
Company's Puerto Rico net operating loss carryforward.
Due to the growth of the Company's Winners and T.K. Maxx store chains, the
Company has decided to present each of its operating divisions as a separate
segment. See Note 11 of the Notes to Consolidated Financial Statements for more
information. The following table sets forth the operating results of the
Company's major business segments: (unaudited)
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
-------------------------- --------------------------
OCTOBER 28, OCTOBER 30, OCTOBER 28, OCTOBER 30,
2000 1999 2000 1999
----------- ------------ ----------- -----------
(As Restated) (As Restated)
<S> <C> <C> <C> <C>
Net sales:
Marmaxx $ 2,107,248 $ 1,965,553 $ 5,909,129 $ 5,585,694
Winners 161,019 131,472 409,417 329,665
T.K. Maxx 96,239 74,401 254,225 192,153
A.J. Wright 19,867 10,674 51,605 26,745
HomeGoods 77,038 52,954 203,325 134,154
----------- ----------- ----------- -----------
$ 2,461,411 $ 2,235,054 $ 6,827,701 $ 6,268,411
=========== =========== =========== ===========
Operating income (loss):
Marmaxx $ 248,992 $ 234,605 $ 658,250 $ 635,917
Winners 26,018 19,222 54,569 40,070
T.K. Maxx 5,646 2,750 4,683 147
A.J. Wright (4,002) (3,777) (11,549) (10,516)
HomeGoods 1,211 2,041 1,854 386
----------- ----------- ----------- -----------
277,865 254,841 707,807 666,004
General corporate expense 9,216 3,724 30,332 25,422
Goodwill amortization 652 652 1,957 1,957
Interest expense, net 9,379 4,274 17,206 5,504
----------- ----------- ----------- -----------
Income before income taxes and cumulative
effect of accounting change $ 258,618 $ 246,191 $ 658,312 $ 633,121
=========== =========== =========== ===========
</TABLE>
<PAGE> 13
PAGE 13
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
------------------------- -------------------------
October 28, October 30, October 28, October 30,
OPERATING MARGIN: 2000 1999 2000 1999
---------------- ----------- ----------- ----------- -----------
(As Restated) (As Restated)
TJX Consolidated 11.3 % 11.4 % 10.4 % 10.6 %
Marmaxx 11.8 % 11.9 % 11.1 % 11.4 %
Winners 16.2 % 14.6 % 13.3 % 12.2 %
T.K. Maxx 5.9 % 3.7 % 1.8 % .1 %
A.J. Wright (20.1)% (35.4)% (22.4)% (39.3)%
HomeGoods 1.6 % 3.9 % .9 % .3 %
Winners and T.K. Maxx operating results reflect the strong growth in their
comparable store sales. HomeGoods posted flat comparable store sales for the
quarter, the impact of which was partially offset by the strong performance of
its new stores. HomeGoods is experiencing increases in pressure on its
distribution capacity which has affected its inventory flow to stores. TJX is
seeking additional permanent distribution capacity for HomeGoods and is adding
to its third party processor capacity for this chain.
General corporate expense as compared to the prior periods is affected by the
pre-tax gain of $8.5 million included in the periods ended October 1999 relating
to Manulife Financial.
Stores in operation at the end of the periods presented are as follows:
OCTOBER 28, 2000 OCTOBER 30, 1999
---------------- ----------------
T.J. Maxx 654 625
Marshalls 533 498
Winners 116 99
HomeGoods 69 46
T.K. Maxx 72 53
A.J. Wright 22 11
----- -----
Total stores 1,466 1,332
===== =====
FINANCIAL CONDITION
Cash flows from operating activities for the nine months ended October 28, 2000
reflect increases in inventories and accounts payable that are primarily due to
normal seasonal requirements and are largely influenced by the change in
inventory from year-end levels. Inventory levels also reflect an increase at
Marmaxx due to the earlier receipt of merchandise to support its new holiday
gift-giving initiative.
Investing activities for the thirty-nine weeks ended October 28, 2000 include
proceeds of $9.2 million from the sale of all of the shares of common stock of
Manulife Financial. Investing activities also include $18.5 million of advances
made by the Company under a construction loan agreement in connection with the
expansion of TJX's leased home office facility.
During July 2000, TJX entered into a $250 million 364-day revolving credit
agreement. This is in addition to the Company's existing $500 million revolving
credit agreement. The additional credit facility is available for general
corporate purposes, including the stock repurchase program. As of October 28,
2000, the Company had
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aggregate short-term borrowings of $311.0 million under all of its credit lines.
Financing activities also include principal payments of $100 million due to the
maturity of the 6 5/8% unsecured notes.
During March 2000, TJX completed its $750 million stock repurchase program and
announced its intention to repurchase an additional $1 billion of common stock
over several years. During the nine months ended October 28, 2000, TJX
repurchased 20.7 million shares at a total cost of $396.1 million. Since the
inception of the $1 billion stock repurchase program, the Company has
repurchased 18.0 million shares at a total cost of $342.9 million.
On November 17, 2000, the Company's former Hit or Miss store chain filed for
bankruptcy under Chapter 11. TJX believes it has adequate reserves relating to
its contingent liabilities associated with Hit or Miss and that these
liabilities and future cash flow requirements are not material to the Company.
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PART II. OTHER INFORMATION
Item 6(a) Exhibits
10.1 The Employment Agreement dated as of January 31, 2000 with
Arnold Barron is filed herewith.
10.2 The 1986 Stock Incentive Plan as amended through September 5, 2000,
is filed herewith.
Item 6(b) REPORTS ON FORM 8-K
The Company did not file a current report on Form 8-K during the
quarter ended October 28, 2000.
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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: December 12, 2000
/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.
