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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 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 30, 1994
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 28, 1994: 73,456,447
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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
April 30, May 1,
1994 1993
Net sales $851,736 $785,637
Cost of sales, including buying and
occupancy costs 635,714 585,406
Selling, general and administrative expenses 177,609 157,931
Interest on debt and capital leases 5,479 4,746
Income before income taxes and cumulative
effect of accounting changes 32,934 37,554
Provision for income taxes 13,565 14,897
Income before cumulative effect of accounting
changes 19,369 22,657
Cumulative effect of accounting changes - (2,667)
Net income 19,369 19,990
Preferred stock dividends 1,789 1,789
Net income available to common shareholders $ 17,580 $ 18,201
Primary and fully diluted earnings per common share:
Income before cumulative effect of
accounting changes $ .24 $ .28
Cumulative effect of accounting changes - (.03)
Net income $ .24 $ .25
Cash dividends per common share $ .14 $.125
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
ASSETS April 30, January 29, May 1,
1994 1994 1993
Current assets:
Cash and cash equivalents $ 30,287 $ 58,102 $ 46,949
Accounts receivable 49,609 30,639 37,456
Merchandise inventories 859,374 772,324 784,001
Prepaid expenses 29,859 20,791 30,875
Total current assets 969,129 881,856 899,281
Property, at cost:
Land and buildings 112,841 110,793 87,596
Leasehold costs and improvements 265,649 256,929 227,137
Furniture, fixtures and equipment 405,557 398,106 357,700
784,047 765,828 672,433
Less accumulated depreciation 340,542 326,685 292,177
443,505 439,143 380,256
Other assets 13,636 13,744 9,578
Goodwill, net of amortization 91,883 92,627 94,680
TOTAL ASSETS $1,518,153 $1,427,370 $1,383,795
LIABILITIES
Current liabilities:
Short-term debt $ 10,000 $ - $ -
Current installments of
long-term debt 5,995 5,936 5,412
Accounts payable 400,091 340,578 392,837
Accrued expenses and other
current liabilities 259,729 245,139 256,327
Total current liabilities 675,815 591,653 654,576
Long-term debt exclusive of current
installments:
Real estate mortgages 42,021 42,823 45,097
Equipment notes 5,900 6,031 7,399
General corporate debt 161,915 162,000 125,000
Deferred income taxes 34,587 33,963 36,687
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
Common stock, par value $1, authorized
150,000,000 shares, issued and
outstanding 73,455,447, 73,430,615
and 73,299,267 shares 73,455 73,431 73,299
Additional paid-in capital 285,172 284,744 280,538
Retained earnings 131,788 125,225 53,699
Total shareholders' equity 597,915 590,900 515,036
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,518,153 $1,427,370 $1,383,795
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
Thirteen Weeks Ended
April 30, May 1,
1994 1993
Cash flows from operating activities:
Income before cumulative effect of
accounting changes $ 19,369 $ 22,657
Adjustments to reconcile income before
cumulative effect of accounting changes
to net cash (used in) operating activities:
Depreciation and amortization 18,363 16,186
Loss on property disposals 2,500 265
Other (61) (1,024)
Changes in assets and liabilities:
(Increase) in accounts receivable (18,970) (13,335)
(Increase) in merchandise inventories (87,050) (111,647)
(Increase) in prepaid expenses (9,068) (12,982)
Increase in accounts payable 59,513 67,059
Increase in accrued expenses and other
current liabilities 14,590 480
Increase (decrease) in deferred income taxes 624 (276)
Net cash (used in) operating activities (190) (32,617)
Cash flows from investing activities:
Property additions (24,352) (16,405)
Cash flows from financing activities:
Proceeds from borrowings of short-term debt 10,000 -
Principal payments on long-term debt (959) (1,083)
Proceeds from sale and issuance of common
stock, net 492 1,316
Cash dividends (12,806) (10,953)
Net cash (used in) financing activities (3,273) (10,720)
Net (decrease) in cash and cash equivalents (27,815) (59,742)
Cash and cash equivalents at beginning of year 58,102 106,691
Cash and cash equivalents at end of period $ 30,287 $ 46,949
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 (First Quarter) ended April 30, 1994 versus
Thirteen Weeks ended May 1, 1993
Net sales for the first quarter were $851.7 million, up 8% from $785.6
million last year. The sales increase is primarily attributable to new
stores. Same store sales increased 2% and 13% for T.J. Maxx and
Winners, respectively, while same store sales decreased by 1% at Hit or
Miss. In general, sales comparisons were impacted by an earlier Easter
and a general softness, industrywide, in apparel sales. Chadwick's of
Boston had a difficult quarter as sales increased only 5%, compared to
its first quarter last year in which they achieved an 87% increase in
sales. Chadwick's results reflect a poor performance by the spring
catalogs where sales ran well below plan.
Net income for the first quarter was $19.4 million, or $.24 per common
share, versus last year's first quarter earnings of $22.7 million or
$.28 per common share before the net cumulative effect of accounting
changes of $2.7 million recorded in that period. Net income in the
prior period, after the one-time net charge for accounting changes, was
$20.0 million or $.25 per common share.
The following table sets forth operating results expressed as a
percentage of net sales:
Percentage of Net Sales
13 Weeks Ended
4/30/94 5/1/93
Net sales 100.0% 100.0%
Cost of sales, including buying and
occupancy costs 74.6 74.5
Selling, general and administrative expenses 20.9 20.1
Interest on debt and capital leases .6 .6
Income before income taxes and cumulative
effect of accounting changes 3.9% 4.8%
Consolidated cost of sales, including buying and occupancy costs, as a
percentage of net sales remained fairly constant year to year.
Selling, general and administrative expenses as a percentage of net
sales increased primarily due to the weak sales performance at
Chadwick's as well as the net operating results of T.K. Maxx, the
Company's United Kingdom venture, and a reserve for the closing of the
Value Mart operation.
PAGE 6
The following table sets forth the operating results of the Company's
major business segments: (unaudited)
13 Weeks Ended
(In Thousands)
April 30, May 1,
1994 1993
Net sales:
Off-price family apparel stores $653,428 $593,740
Off-price women's specialty stores 89,476 88,296
Off-price catalog operation 108,832 103,601
$851,736 $785,637
Operating income:
Off-price family apparel stores $ 46,679 $ 42,747
Off-price women's specialty stores 243 123
Off-price catalog operation 972 6,483
47,894 49,353
General corporate expense* 8,828 6,398
Goodwill amortization 653 655
Interest expense 5,479 4,746
Income before income taxes and
cumulative effect of accounting changes $ 32,934 $ 37,554
* General corporate expense includes the net operating results of
HomeGoods and Value Mart in both periods. In addition, the thirteen
weeks ended April 30, 1994 includes the net operating results of T.K.
Maxx and a reserve for the closing of the Value Mart operation.
The off-price family apparel stores segment, T.J. Maxx and Winners,
recorded a 9% increase in operating income. Hit or Miss, which has a
narrower merchandise mix, was more directly impacted by the softness in
apparel sales and posted only a modest increase in operating income
versus last year's first quarter. Chadwick's of Boston experienced a
decrease in operating income as compared to last year's increase of 86%,
which was largely the result of a poor performance of the spring
catalogs.
Stores in operation at the end of the period are as follows:
April 30, 1994 May 1, 1993
T.J. Maxx 513 485
Hit or Miss 504 498
Winners 28 21
HomeGoods 10 6
T.K. Maxx 2 -
PAGE 7
Financial Condition
Cash flows from operating and financing activities for the three months
reflect increases in inventory, accounts payable, and short-term
borrowings, which are primarily due to normal seasonal requirements. In
addition for the period ended May 1, 1993, cash flows were impacted by
an increase in income taxes paid due to the Ames settlement received in
December 1992.
As of April 30, 1994, the Company has unsecured committed short-term
credit lines totalling $200 million and is currently expanding these
lines to $300 million. These lines, when needed, are drawn upon or used
as backup to the Company's commercial paper program. The Company
believes that internally generated funds along with its ability to
access external financing sources, will meet its needs.
The Company has available reserves for lease and other contingent
liabilities associated with the 1988 sale of the Company's former Zayre
Stores division to Ames Department Stores, Inc. and the Company believes
that these reserves should be adequate to cover all reasonably expected
liabilities that it may incur as a result of the Ames bankruptcy. On
December 30, 1992, Ames emerged from bankruptcy pursuant to a plan of
reorganization.
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 has available reserves for lease and other contingent
liabilities associated with the 1988 sale of the Company's former
Zayre Stores division to Ames Department Stores, Inc. and the Company
believes that these reserves should be adequate to cover all
reasonably expected liabilities that it may incur as a result of the
Ames bankruptcy. On December 30, 1992, Ames emerged from bankruptcy
pursuant to a plan of reorganization.
4. The Company's cash payments for interest expense and income taxes are
as follows: (in thousands)
Thirteen Weeks Ended
April 30, May 1,
1994 1993
Cash paid for:
Interest on debt and capital leases $1,201 $ 2,405
Income taxes 4,828 21,695
5. Effective January 31, 1993, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" (SFAS No. 109). SFAS No. 109 requires the adjustment
of deferred tax assets and liabilities to reflect the effect of
enacted changes in tax laws or rates. In connection with the
adoption of SFAS No. 109, the Company recorded as a cumulative effect
of an accounting change, a gain of $3,478,000, or $.05 per share,
which represents the net decrease to the net deferred tax liability
as of January 31, 1993.
6. Effective January 31, 1993, the Company also adopted the Statement of
Financial Accounting Standards No. 106 "Employers' Accounting for
Postretirement Benefits Other Than Pensions." This standard requires
accrual for the cost of postretirement health care and life insurance
benefits during the years that an employee provides services to the
Company. The Company has elected to recognize the transition
obligation in full as of January 31, 1993, and accordingly has
recorded a one-time implementation charge of $6,145,000, net of a tax
benefit of $3,937,000, as a cumulative effect of an accounting
change. The Company's cash flows are not impacted by the new
accounting.
PAGE 9
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 7,
1994. The following matters were voted upon at the Annual
Meeting:
Election of Directors For Withheld
Bernard Cammarata 63,116,655 430,787
Arthur F. Loewy 63,111,480 435,962
Robert F. Shapiro 63,121,259 426,183
Fletcher H. Wiley 63,121,276 426,166
In addition to those elected, the following are directors whose
term of office continued after the Annual Meeting:
Michael H. Davis
Phyllis B. Davis
Sumner L. Feldberg
Stanley H. Feldberg
John M. Nelson
Burton S. Stern
Abraham Zaleznik
Proposal for the approval of certain terms of the Management
Incentive Plan for purposes of Section 162(m) of the Internal
Revenue Code.
For 61,802,552
Against 1,263,883
Abstain 481,007
Proposal for the approval of certain terms of the Long Range
Performance Incentive Plan for purposes of Section 162(m) of the
Internal Revenue Code.
For 61,809,216
Against 1,256,881
Abstain 481,345
Item 6(a). Exhibits
(11) Statement re Computation of Per Share Earnings
This statement is filed herewith.
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 30, 1994.
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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: June 10, 1994
/s/ Donald G. Campbell
Donald G. Campbell, Senior Vice
President - Finance, on behalf
of The TJX Companies, Inc. and as
Principal Financial and Accounting
Officer of The TJX Companies, Inc.
EXHIBIT 11
PAGE 1
COMPUTATION OF NET INCOME PER COMMON SHARE
(UNAUDITED)
DOLLARS IN THOUSANDS
Thirteen Weeks Ended
April 30, May 1,
1994 1993
The computation of net income available and
adjusted shares outstanding follows:
Net income $19,369 $19,990
Less:
Preferred stock dividends (1,789) (1,789)
Net income used for primary and fully
diluted computation $17,580 $18,201
Weighted average number of common shares
outstanding 73,461,299 73,310,866
Add:
Assumed exercise of those options that
are common stock equivalents 615,533 797,943
Adjusted shares outstanding, used for primary
and fully diluted computation 74,076,832 74,108,809