FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended March 30, 1996
___________________
Commission File Number 1-1011
____________
MELVILLE CORPORATION
_______________________________________________________________
(Exact Name of registrant as specified in its charter)
NEW YORK 04-1611460
_______________________________________________________________
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
One Theall Road, Rye, New York 10580
_______________________________________________________________
(Address of principal executive offices) (Zip Code)
(914) 925-4000
_______________________________________________________________
(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 _____
Number of shares outstanding of the issuer's Common Stock:
Class Outstanding at April 27, 1996
----- -----------------------------
Common Stock, $1 par value 105,407,413
INDEX
-----
Part I. - Financial Information Page No.
--------
Consolidated Condensed Statements of Operations -
First Quarter Ended March 30, 1996 and April 1, 1995 3
Consolidated Condensed Balance Sheets -
As of March 30, 1996, December 31, 1995 and
April 1, 1995 ..................................... 4-6
Consolidated Condensed Statements of Cash Flows -
First Quarter Ended March 30, 1996 and April 1, 1995 7
Notes to Consolidated Condensed Financial Statements.. 8-9
Management's Discussion and Analysis of
Financial Condition and Results of Operations....... 10-12
Review by Independent Auditors........................ 13
Exhibit I - Report of Review by Independent
Auditors .......................................... 14
Part II. - Other Information .................... 15
MELVILLE CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
($ and shares in thousands, except per share data)
<TABLE>
<CAPTION>
First Quarter Ended
----------------------------
March 30, April 1,
1996 1995
---------- ----------
<S> <C> <C>
Net sales $1,744,681 $2,124,714
Cost of goods sold, buying and warehousing costs 1,200,175 1,487,234
---------- ----------
544,506 637,480
---------- ----------
Selling, general and administrative expenses 481,861 617,994
Depreciation and amortization 34,588 51,011
---------- ----------
516,449 669,005
---------- ----------
Operating profit (loss) 28,057 (31,525)
Interest expense, net 5,815 8,519
Dividend income (2,734) -
---------- ----------
Other expense, net 3,081 8,519
---------- ----------
Earnings (loss) from continuing operations before income taxes
and cumulative effect of change in accounting principle 24,976 (40,044)
Income tax provision (benefit) 10,477 (16,714)
---------- ----------
Earnings (loss) from continuing operations before cumulative
effect of change in accounting principle 14,499 (23,330)
Loss from discontinued operations, net of income tax benefit
of $627 and $2,764 and minority interests in net earnings of
$210 and $2,020 (297) (7,024)
---------- ----------
Earnings (loss) before cumulative effect of change in
accounting principle 14,202 (30,354)
Cumulative effect of change in accounting principle, net - 41,955
---------- ----------
Net earnings (loss) $ 14,202 $ (72,309)
========== ==========
Earnings (loss) per share from continuing operations before
cumulative effect of change in accounting principle $0.10 $(0.26)
Loss per share from discontinued operations, net - (0.07)
---------- ----------
Earnings (loss) per share before cumulative effect of change
in accounting principle 0.10 (0.33)
Loss per share from cumulative effect of change in
accounting principle, net - (0.40)
---------- ----------
Net earnings (loss) per common share $0.10 $(0.73)
========== ==========
Dividends per share of common stock $0.11 $0.38
========== ==========
Weighted average common shares outstanding 105,180 105,209
========== ==========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
MELVILLE CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED CONDENSED BALANCE SHEETS
As of March 30, 1996, December 31, 1995 and April 1, 1995
($ in thousands)
<TABLE>
<CAPTION>
March 30, December 31, April 1,
1996 1995 1995
(Unaudited) (Unaudited)
ASSETS ----------- ------------ ------------
- ------
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents $ 90,009 $ 129,583 $ 88,255
Investments 208,907 175,000 -
Accounts receivable (net of allowance
for doubtful accounts of $28,774 at
March 30, 1996, $33,438 at
December 31, 1995 and $15,852 at
April 1, 1995) 291,092 296,393 244,797
Inventories:
Finished goods 1,784,595 1,661,677 2,325,505
Work-in-process 1,279 767 1,507
Raw materials and supplies 13,534 10,513 14,548
---------- ---------- ----------
Total inventories 1,799,408 1,672,957 2,341,560
Prepaid expenses 255,590 285,995 172,029
---------- ---------- ----------
Total Current Assets 2,645,006 2,559,928 2,846,641
---------- ---------- ----------
Property and equipment, at cost 1,712,445 1,707,927 2,203,035
Less accumulated depreciation and
amortization 596,973 593,523 738,028
---------- ---------- ----------
Net property and equipment 1,115,472 1,114,404 1,465,007
Goodwill (net of accumulated amortization
of $29,599 at March 30, 1996,
$28,152 at December 31, 1995
and $98,816 at April 1, 1995) 194,170 195,618 445,174
Deferred charges and other assets 95,895 91,612 115,428
---------- ---------- ----------
Total Assets $4,050,543 $3,961,562 $4,872,250
========== ========== ==========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
MELVILLE CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED CONDENSED BALANCE SHEETS
As of March 30, 1996, December 31, 1995 and April 1, 1995
($ and shares in thousands, except per share data)
<TABLE>
<CAPTION>
March 30, December 31, April 1,
1996 1995 1995
(Unaudited) (Unaudited)
---------- ------------ ------------
LIABILITIES
- -----------
<S> <C> <C> <C>
Current Liabilities:
Accounts payable $ 603,830 $ 690,651 $ 721,595
Accrued expenses 774,167 1,039,825 453,072
Notes payable 500,000 52,000 760,200
Other current liabilities 15,157 15,212 13,587
---------- ---------- ----------
Total Current Liabilities 1,893,154 1,797,688 1,948,454
---------- ---------- ----------
Long-term debt 327,500 327,698 331,280
Deferred income taxes 22,249 9,103 85,038
Other long-term liabilities 140,532 184,150 147,842
Minority interests in subsidiaries 94,081 93,830 110,663
REDEEMABLE PREFERRED STOCK
- --------------------------
Cumulative preferred stock, Series B,
$4.00 dividend, par value $100, redeemable
at par plus accrued dividends; authorized
and issued 17 shares with 4 held
in treasury as of March 30, 1996,
December 31, 1995 and April 1, 1995 1,330 1,330 1,330
</TABLE>
See accompanying notes to consolidated condensed financial statements.
MELVILLE CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED CONDENSED BALANCE SHEETS
As of March 30, 1996, December 31, 1995 and April 1, 1995
($ and shares in thousands, except per share data)
<TABLE>
<CAPTION>
March 30, December 31, April 1,
1996 1995 1995
(Unaudited) (Unaudited)
----------- ------------ -----------
<S> <C> <C> <C>
SHAREHOLDERS' EQUITY
- --------------------
Preference stock, $1.00 par value,
authorized 50,000 shares; Series
One ESOP Convertible, liquidation value $53.45;
6,117 shares issued and outstanding at March 30, 1996,
6,267 at December 31, 1995 and
6,360 at April 1, 1995 $ 326,950 $ 334,947 $ 339,942
Guaranteed ESOP Obligation (309,675) (309,675) (321,096)
Common stock, par value $1.00, authorized
300,000 shares; issued 111,649 at March 30,
1996, 111,649 at December 31, 1995 and
111,460 at April 1, 1995; outstanding,
105,255 at March 30, 1996, 105,106 at
December 31, 1995 and 104,823 at
April 1, 1995, net of shares held in
treasury 111,649 111,649 111,460
Capital surplus 55,427 54,878 48,390
Retained earnings 1,663,029 1,660,409 2,382,158
Unrealized gain on investments 21,378 - -
Cumulative translation adjustment 195 146 (4,039)
Common stock in treasury, at cost; 6,394
shares at March 30, 1996, 6,543 at
December 31, 1995, and 6,637 at
April 1, 1995 (297,256) (304,591) (309,172)
---------- ---------- ----------
Total Shareholders' Equity 1,571,697 1,547,763 2,247,643
---------- ---------- ----------
Total Liabilities and Equity $4,050,543 $3,961,562 $4,872,250
========== ========== ==========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
MELVILLE CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
($ in thousands)
<TABLE>
<CAPTION>
First Quarter Ended
--------------------------------
March 30, April 1,
1996 1995
---------- ----------
<S> <C> <C>
Net Cash Used in Operating Activities $(268,675) $(361,143)
-------- --------
Cash Flows from Investing Activities:
Additions to property and equipment (48,997) (59,644)
Proceeds from sale or disposal of assets 13,328 9,674
-------- --------
Net Cash Used in Investing Activities (35,669) (49,970)
-------- --------
Cash Flows from Financing Activities:
Increase in notes payable 448,000 560,200
Decrease in book overdrafts (171,748) (101,374)
Dividends paid (11,581) (40,141)
Repurchase of common stock - (26,309)
Decrease in long-term debt and obligations under
capital leases (391) (7,840)
Other 490 (2,203)
-------- --------
Net Cash Provided by Financing Activities 264,770 382,333
-------- --------
Net decrease in cash and cash equivalents (39,574) (28,780)
Cash and cash equivalents at beginning of year 129,583 117,035
-------- --------
Cash and Cash Equivalents at End of Period $ 90,009 $ 88,255
========= =========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
MELVILLE CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. In the opinion of the Company, the accompanying unaudited
consolidated condensed financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary to present
fairly the financial position of the Company as of March 30, 1996 and
April 1, 1995 and the results of operations and cash flows for the
three month periods then ended. The preparation of financial
statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates. Because of the seasonality of the specialty retailing
business, operating results of the Company on a quarterly basis may
not be indicative of operating results for the full year.
2. As part of the Company's restructuring program announced on October
24, 1995, the Company intends to spin- off its footwear segment to
shareholders during 1996. Accordingly, the results of operations for
these businesses have been classified as discontinued operations in
the consolidated condensed statements ofoperations. The net sales
for the discontinued operations for the first quarter of 1996 and
1995 were $375.8million and $367.3 million, respectively. The
operating loss for the discontinued operations for the first quarter
of 1996 and 1995 was $0.7 million and $3.8 million, respectively.
3. Certain reclassifications have been made to the consolidated condensed
financial statements of prior periods to conform to the current period
presentation.
4. Primary earnings (loss) per share is computed by dividing net
earnings (loss), after deducting net preferred dividends on
redeemable preferred stock and Series One ESOP Convertible Preference
Stock ("ESOP Preference Stock"), by the weighted average number of
common shares outstanding during the period.
Fully diluted earnings (loss) per share is computed based upon the
assumed conversion of the ESOP Preference Stock into common stock.
Net earnings (loss) utilized in the calculation is adjusted for the
difference between the current dividend on the ESOP Preference Stock
and the common stock, and for certain non-discretionary expenses
based on net earnings. The conversion of the ESOP Preference Stock
and adjustments described above are anti- dilutive and, therefore,
fully diluted earnings (loss) per share has not been presented.
5. The components of net interest expense are as follows:
First Quarter Ended
---------------------------------
March 30, 1996 April 1, 1995
($ in thousands) -------------- -------------
- ----------------
Interest expense $ 5,842 $ 8,545
Interest income (27) (26)
--------- ---------
Interest expense, net $ 5,815 $ 8,519
========= =========
6. During the three months ended March 30, 1996 and April 1, 1995, the
Company had the following non-cash investing activity:
1996 1995
---- ----
Unrealized gain on
investments $ 33,907 -
7. On May 5, 1996, the Company completed the sale of its Kay-Bee
division to Consolidated Stores Corp. for total proceeds of
approximately $315 million, including a four year note receivable in
the amount of $100 million.
On April 24, 1996, the Company signed a definitive agreement to sell
its This End Up division for approximately $19 million. This
transaction is expected to close during the second quarter.
MELVILLE CORPORATION AND SUBSIDIARY COMPANIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
- ---------------------
For the First Quarter Ended March 30, 1996 and April 1, 1995
- -------------------------------------------------------------
Consolidated net sales for the quarter were adjusted to exclude the
footwear segment, due to the Company's plan to spin it off in 1996.
Consolidated net sales from continuing operations for the quarter ended
March 30, 1996, which included one less selling day than the prior year's
quarter, were $1.74 billion, a decrease of 17.9% versus consolidated net
sales of $2.12 billion for the quarter ended April 1, 1995. Adjusting for
the absence of Marshalls, which was sold on November 17, 1995, consolidated
net sales increased 9.0% over the first quarter of 1995. Same store sales
for the quarter rose 7.5%.
Inclusive of the footwear segment, total net sales for the quarter
decreased 15.2% from the 1995 quarter. Adjusting for the disposition of
Marshalls, total sales rose 9.0%, while same store sales increased 6.8%.
Operating results for the quarter were favorably impacted by the timing
of the Palm and Easter Sunday selling periods, which occurred one week
earlier in 1996 than in the prior year. For the year to date period ended
April 13, 1996, which included the Palm and Easter Sunday selling periods
in both years, consolidated retail store sales from continuing operations
decreased 19.1%, while same store sales rose 6.3%. Adjusting for the sale
of Marshalls, total net sales through April 13, 1996 rose 7.8% over the
1995 quarter.
For the first quarter of 1996, the Company reported consolidated net
earnings of $14.2 million, or $0.10 per share, compared to a consolidated
net loss of $72.3 million, or $0.73 per share, for the first quarter of
1995, after taking into account the charge related to a change in the
Company's accounting policy for internally developed software. Adjusting
the first quarter of 1995 to exclude the impact of the change in accounting
policy, the net loss per share would have been $0.29. Excluding Marshalls
in 1995, as well as the change in accounting policy, the consolidated net
loss was $0.07 per share in 1995.
For the quarter ended March 30, 1996, net sales for the prescription
drugs, health and beauty care segment increased 11.5% from the prior year
period while same store sales increased 9.1%, as compared to an increase of
7.5% in 1995. Sales in both the front store and pharmacy businesses were
strong due to the Easter selling season and extended winter, respectively.
Gross margin as a percentage of net sales for this segment improved for the
quarter as the decline in pharmacy gross margin rates due to the expansion
of third party business was offset by higher front store gross margin rates
due to favorable initial markons. This segment's share of consolidated net
sales from continuing operations in the first quarter of 1996 and 1995 was
72.2% and 53.1%, respectively.
Net sales for the apparel segment decreased 79.0% in the first quarter
of 1996 compared to the prior year period. Excluding Marshalls from the
prior period, apparel segment net sales increased 9.0%. Same store sales
increased 1.7% compared to an increase of 2.0% in 1995. Same store sales
at Wilsons improved due to the unseasonably cool weather in the first
quarter. Sales at Bob's increased significantly due to the expansion of
the chain. Gross margin for the segment increased over the prior period
due to the absence of Marshalls, which experienced a significant level of
markdowns in 1995. For the first quarter of 1996, this segment represented
8.2% of consolidated net sales for continuing operations as compared to
32.2% in the same period last year.
Net sales in the toys and home furnishings segment increased 9.9% in
the first quarter of 1996 as compared to the prior year period. Same store
sales increased 3.5% for the quarter compared to an increase of 0.2% in the
first quarter of last year. Gross margin as a percentage of net sales
increased from the prior period due to fewer markdowns required to be taken
at Linens 'n Things and Kay-Bee, which was offset by increased markdowns at
This End Up. This segment's net sales for the first quarter of 1996
represented 19.6% of the consolidated total as compared to 14.7% in 1995.
Cost of goods sold, buying and warehousing costs as a percentage of
consolidated net sales was 68.8% in the first quarter of 1996, compared to
70.0% in 1995. The increase resulted primarily from a change in sales mix
which generated a higher initial markon accompanied by fewer markdowns, which
in the prior year were particularly high at Marshalls.
Store operating, selling, general and administrative expenses were
27.6% of consolidated net sales for continuing operations for the first
quarter of 1996 compared to 29.0% in the prior year quarter. The decrease
was due primarily to holiday sales occurring in the first quarter of the
current year enabling the Company to better leverage its fixed costs.
Depreciation and amortization expense as a percentage of consolidated
net sales was 2.0% for the first quarter of 1996 as compared to 2.4% in the
1995 quarter, reflecting the effect of the timing of holiday sales, the sale
of Marshalls and fixed asset and goodwill write-offs associated with the
comprehensive restructuring plan announced by the Company on October 24,
1995.
Interest expense totalled $5.8 million in the first quarter of 1996 as
compared to $8.5 million in the first quarter of 1995. The reduction in
interest expense was due to improved earnings and lower borrowings due to
the cash proceeds received in connection with the sale of Marshalls.
Dividend income relates to investments received in consideration for the
Marshalls disposition.
The Company's effective tax rate for the quarter was 42.0%, compared to
41.7% in the first quarter of 1995.
Discontinued Operations
- -----------------------
Net sales for the footwear segment, which is especially impacted by the
Easter holiday, increased by 2.3% for the quarter ended March 30, 1996
compared to the same period in 1995. This segment reported a 3.9% increase
in same store sales during the first quarter of 1996 as compared to a 6.3%
decrease for the comparable prior year period reflecting the timing of both
the Palm and Easter weeks occurring in the second quarter of the prior
period. Footaction experienced strong sales growth due to new product
availability and a more focused merchandise assortment. Sales declines
were noted, however, at Meldisco and Thom McAn as the inclement weather
throughout much of the country impacted the sales of spring and summer
merchandise.
Financial Condition and Liquidity
- ---------------------------------
Inherent in the seasonality of the specialty retailing business are
cyclical buildups of inventory prior to peak selling periods, the most
significant of which are Christmas, Palm and Easter Sundays, and Back-to-
School. Although the Company finances its growth in operations and working
capital requirements primarily through internally generated funds, short-
term borrowings are also used to finance these seasonal inventory buildups.
The short-term borrowings reach a peak in the Fall with the inventory
buildup in anticipation of the Christmas selling season.
For the three months ended March 30, 1996, cash and cash equivalents
decreased $39.6 million to $90.0 million as compared to a decrease of
$28.8 million to $88.3 million for the first three months of 1995. The
Company had short term borrowings of $500.0 million outstanding at March
30, 1996 and $760.2 million at April 1, 1995. The decrease in the level of
short-term borrowings was due primarily to the selling of the Marshalls
division and cash generated from the Palm and Easter holiday selling
periods occurring one week earlier in 1996, as well as improved earnings
throughout the Company.
Net accounts receivable decreased by $5.3 million for the three months
ended March 30, 1996 as compared to a decrease of $7.6 million for the
three months ended April 1, 1995. The balance in 1996 is higher than the
prior year due mainly to a receivable from the sale of the Marshalls
division offset by the absence of Marshalls' layaway and charge card
receivables.
For the three months ended March 30,1996, inventories increased $126.5
million to $1.8 billion. For the three months ended April 2, 1994,
inventories increased $203.3 million to $2.3 billion. The lower inventory
levels in 1996 resulted from the absence of the Marshalls division offset
by increases from ongoing expansions at other divisions.
Prepaid expenses decreased $30.4 million in the first three months of
1996 as compared to an increase of $6.6 million in 1995. The decrease in
1996 is due primarily to decreased deferred tax assets related to
utilization of restructuring reserves. The increase in 1995 was due mostly
to higher levels of prepaid interest related to increased commercial paper
borrowings.
The decrease in accounts payable was $86.8 million for the three months
ended March 30, 1996 as compared to a $60.9 million increase in 1995 was
due primarily to lower inventory levels. The decrease in accrued expenses
was $265.7 million for the three months ended March 30, 1996, as compared
to a decrease of $213.6 million in 1995. The larger decrease in 1996 was
primarily due to lower tax accruals due to the utilization of restructure
reserves and payment for restructuring liabilities. The increased amount
of accrued expenses in 1996 relates to restructuring reserves recorded in
the fourth quarter of 1995.
Capital additions of $49.0 million and $59.6 million in the first three
months of 1996 and 1995, respectively, represented expenditures primarily
for improvements to new and existing leased store locations, store
equipment, information systems and distribution and office facilities. The
lower amount in 1996 related primarily to the disposition of Marshalls.
REVIEW BY INDEPENDENT AUDITORS
The March 30, 1996 and April 1, 1995 consolidated condensed financial
statements included in this filing on Form 10-Q have been reviewed by KPMG
Peat Marwick LLP, independent auditors, in accordance with established
professional standards and procedures for such a limited review.
The report of KPMG Peat Marwick LLP, commenting on their review, is included
herein as Part I - Exhibit 1.
Part 1 - Exhibit 1
Independent Auditors' Review Report
-----------------------------------
The Board of Directors and Shareholders of
Melville Corporation:
We have reviewed the consolidated condensed balance sheets of Melville
Corporation and subsidiary companies as of March 30, 1996 and April 1, 1995,
and the related consolidated condensed statements of operations and cash flows
for the first quarter periods ended March 30, 1996 and April 1, 1995. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical review
procedures to financial data and making inquiries of persons responsible for
financial and accounting matters. It is substantially less in scope than an
audit conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the consolidated condensed financial statements referred
to above for them to be in conformity with general accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Melville Corporation and
subsidiary companies as of December 31, 1995 and the related consolidated
statements of operations, shareholders' equity, and cash flows for the year
then ended (not presented herein); and in our report dated February 15, 1996,
we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
consolidated condensed balance sheet as of December 31, 1995, is fairly
presented, in all material respects, in relation to the consolidated balance
sheet from which it has been derived.
/S/KPMG Peat Marwick LLP
New York, New York
April 23, 1996
Part II. - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
a)
EXHIBIT INDEX
-------------
Exhibit
-------
11 Computation of Per Share Earnings
15 Letter re: Unaudited Interim Financial Information
27 Financial Data Schedule
b) Reports on Form 8-K - There were no reports on Form 8-K filed for the
three months ended March 30, 1996.
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.
MELVILLE CORPORATION
----------------------
(REGISTRANT)
/S/ CARLOS E. ALBERINI
-----------------------
Carlos E. Alberini
Vice President and
Acting Chief Financial Officer
Date: May 14, 1996
--------------------
Exhibit 11
COMPUTATION OF EARNINGS PER SHARE
($ and shares in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
March 30, 1996 April 1, 1995
------------------ ------------------
<S> <C> <C>
PRIMARY EARNINGS (LOSS) PER COMMON SHARE:
Net earnings (loss) $14,201 ($72,309)
Less: Preferred dividends, net 3,477 4,367
------- --------
Net earnings (loss) used to calculate
primary earnings (loss) per share $10,724 ($76,676)
======= =======
Weighted average number of shares outstanding 105,171 105,209
Add: Weighted average number of shares which
could have been issued upon exercise
of outstanding options 9 15
------- --------
Weighted average number of shares used to
compute primary earnings (loss) per share 105,180 105,224
======= =======
Primary earnings (loss) per share $0.10 ($0.73)
======= =======
FULLY DILUTED EARNINGS (LOSS) PER COMMON SHARE:
Net earnings (loss) $14,201 ($72,309)
Less: Preferred dividends 13 13
------- --------
Net earnings (loss) used to calculate fully diluted
earnings (loss) per share, before adjustments 14,188 (72,322)
Less: Adjustments resulting principally from the
assumed conversion of the Series One ESOP
Convertible Preference Stock, net of tax benefit 2,915 1,670
------- --------
Net earnings (loss) used to calculate fully diluted
earnings (loss) per share $11,273 ($73,992)
======= =======
Weighted average number of shares outstanding 105,171 105,209
Add: Weighted average shares of Series One
Convertible Preference Stock assuming
conversion 7,753 7,065
Add: Weighted average number of shares which
could have been issued upon exercise
of outstanding options 22 31
Add: Weighted average number of shares which
could have been issued upon conversion of
4 7/8% debentures -- 3
------- --------
Weighted average number of shares used to compute
fully diluted earnings (loss) per share 112,946 112,308
======= =======
Fully diluted earnings (loss) per share $0.10 ($0.66)
======= =======
</TABLE>
Exhibit 15
Melville Corporation
Rye, New York
Board of Directors:
Re: Registration Statements Numbers 33-40251, 33-17181 and 2-97913 on Form
S-8 and 33-34946 on Form S-3
With respect to the subject registration statements, we acknowledge our
awareness of the use therein of our report dated April 23, 1996 related to our
review of interim financial information.
Pursuant to Rule 436(c) under the Securities Act of 1933, such report is not
considered a part of a registration statement prepared or certified by an
accountant or a report prepared or certified by an accountant within the
meaning of sections 7 and 11 of the Act.
Very truly yours,
/S/ KPMG Peat Marwick LLP
New York, New York
May 14, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED BALANCE SHEETS, AND THE CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-30-1996
<CASH> 90,009
<SECURITIES> 208,907
<RECEIVABLES> 319,866
<ALLOWANCES> 28,774
<INVENTORY> 1,799,408
<CURRENT-ASSETS> 2,645,006
<PP&E> 1,712,445
<DEPRECIATION> 596,973
<TOTAL-ASSETS> 4,050,543
<CURRENT-LIABILITIES> 1,893,154
<BONDS> 327,500
1,330
0
<COMMON> 111,649
<OTHER-SE> 1,460,048
<TOTAL-LIABILITY-AND-EQUITY> 4,050,543
<SALES> 1,744,681
<TOTAL-REVENUES> 1,744,681
<CGS> 1,200,175
<TOTAL-COSTS> 1,200,175
<OTHER-EXPENSES> 516,449
<LOSS-PROVISION> 435
<INTEREST-EXPENSE> 5,815
<INCOME-PRETAX> 24,976
<INCOME-TAX> 10,477
<INCOME-CONTINUING> 14,499
<DISCONTINUED> (297)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,202
<EPS-PRIMARY> 0.10
<EPS-DILUTED> 0
</TABLE>
