Page 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
Amendment No. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): November 17, 1995
THE TJX COMPANIES, INC.
(Exact name of registrant as specified in charter)
DELAWARE 1-4908 04-2207613
State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
770 Cochituate Road, Framingham, MA 01701
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (508)390-2662
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Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
The financial statements for the acquired business are filed
herewith.
(b) Pro Forma Financial Information.
The unaudited pro forma condensed, consolidated financial
information of the Registrant is filed herewith.
(c) Exhibits.
2.2* Amendment No. 1 dated as of November 17, 1995 to Stock
Purchase Agreement dated as of October 14, 1995 between the
Registrant and Melville Corporation.
10.1* Certificates of Designations, Rights and Preferences for the
Registrant's Series D Cumulative Convertible Preferred
Stock.
10.2* Certificates of Designations, Rights and Preferences for the
Registrant's Series E Cumulative Convertible Preferred
Stock.
10.3* Transitional Services Agreement dated as of November 17,
1995 between the Registrant and Melville Corporation.
10.4* Credit Agreement dated as of November 17, 1995 among The
First National Bank of Chicago, Bank of America Illinois,
The Bank of New York, and Pearl Street L.P., as co-
arrangers, the other financial institution parties thereto,
and the Registrant.
99.1* Press Release issued by the Registrant on November 20, 1995.
* Included with, and incorporated herein by reference to, the
Registrant' Current Report on Form 8-K dated November 17, 1995.
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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 hereunto duly authorized.
THE TJX COMPANIES, INC.
By: /s/ Donald G. Campbell
Name: Donald G. Campbell
Title: Senior Vice President-Finance
Date: January 31, 1996
MARSHALLS OF ROSEVILLE, MINN., INC.
(a wholly-owned subsidiary of Melville Corporation)
Consolidated Financial Statements
December 31, 1994, 1993 and 1992
(With Independent Auditors' Report Thereon)
Independent Auditors' Report
To the Board of Directors and Shareholders
of Melville Corporation:
We have audited the accompanying consolidated balance sheets of
Marshalls of Roseville, Minn., Inc. (a wholly-owned subsidiary of
Melville Corporation) as of December 31, 1994 and 1993, and the
related consolidated statements of income, shareholder's equity,
and cash flows for each of the years in the three-year period ended
December 31, 1994. These consolidated financial statements are the
responsibility of Marshalls of Roseville, Minn., Inc.'s management.
Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Marshalls of Roseville, Minn., Inc. as of December 31,
1994 and 1993, and the results of their operations and their cash
flows for each of the years in the three-year period ended December
31, 1994, in conformity with generally accepted accounting
principles.
As discussed in the notes to the consolidated financial statements,
the Company changed its method of accounting for LIFO inventories
in 1993.
/s/KPMG Peat Marwick LLP
Boston, Massachusetts
December 1, 1995
MARSHALLS OF ROSEVILLE, MINN., INC.
(a wholly-owned subsidiary of Melville Corporation)
Consolidated Balance Sheets
December 31, 1994 and 1993
(In Thousands)
Assets 1994 1993
Current assets:
Cash $ 22,306 $ 8,310
Accounts receivable, net of allowance
for doubtful accounts of $763 and $807
in 1994 and 1993, respectively 17,132 13,397
Inventories 471,483 369,682
Due from Parent and other divisions 4,332 158,386
Prepaid expenses and other current assets 8,930 5,907
Deferred income tax assets 30,138 29,631
Total current assets 554,321 585,313
Property and equipment, net 447,347 395,654
Capitalized lease assets, net 6,381 7,898
Goodwill, net 29,749 14,991
Deferred charges and other noncurrent assets, net 21,224 21,398
Total assets $1,059,022 $1,025,254
Liabilities and Shareholder's Equity
Current liabilities:
Accounts payable $ 104,779 $ 109,299
Accrued expenses 161,797 171,681
Accrued Federal income taxes 28,744 22,145
Capital lease obligations 2,265 2,290
Total current liabilities 297,585 305,415
Deferred income tax liabilities 49,233 41,926
Capital lease obligations 11,316 13,580
Other liabilities 5,422 10,445
Shareholder's equity:
Common stock, no par value, 100 shares
authorized and outstanding 1994 and 1993 352 352
Contributed capital 152,839 152,839
Retained earnings 542,275 500,697
Total shareholder's equity 695,466 653,888
Total liabilities and shareholder's equity $1,059,022 $1,025,254
See accompanying notes to consolidated financial statements.
MARSHALLS OF ROSEVILLE, MINN., INC.
(a wholly-owned subsidiary of Melville Corporation)
Consolidated Statements of Income
For the years ended December 31, 1994, 1993 and 1992
(In thousands)
1994 1993 1992
Net sales $2,774,851 $2,608,542 $2,550,992
Cost of goods sold 1,834,212 1,704,022 1,641,233
Gross profit 940,639 904,520 909,759
Selling, general and administrative
expenses 748,532 695,234 661,457
Depreciation and amortization 52,327 45,201 45,154
Realignment charge (credit) (7,200) - 8,946
Operating income 146,980 164,085 194,202
Other income (expense):
Net interest income (expense),
Parent and other divisions (1,678) 1,106 196
Interest expense, third party (100) (61) (48)
Gain on insurance recovery - - 3,703
Income before provision for
income taxes 145,202 165,130 198,053
Provision for income taxes 55,351 62,725 75,502
Net income $ 89,851 $ 102,405 $ 122,551
See accompanying notes to consolidated financial statements.
MARSHALLS OF ROSEVILLE, MINN., INC.
(a wholly-owned subsidiary of Melville Corporation)
Consolidated Statements of Shareholder's Equity
For the years ended December 31, 1994, 1993 and 1992
(In Thousands)
Total
Common Contributed Retained Shareholder's
Stock Capital Earnings Equity
Balance as of December 31, 1991 $352 $137,600 $372,903 $510,855
Net income - - 122,551 122,551
Contribution of capital - 15,239 - 15,239
Dividends paid to Parent - - (46,442) (46,442)
Transfer of Melville Realty to Parent - - (650) (650)
Balance as of December 31, 1992 352 152,839 448,362 601,553
Net income - - 102,405 102,405
Dividends paid to Parent - - (50,070) (50,070)
Balance as of December 31, 1993 352 152,839 500,697 653,888
Net income - - 89,851 89,851
Dividends paid to Parent - - (48,273) (48,273)
Balance as of December 31, 1994 $352 $152,839 $542,275 $695,466
See accompanying notes to consolidated financial statements.
MARSHALLS OF ROSEVILLE, MINN., INC.
(a wholly-owned subsidiary of Melville Corporation)
Consolidated Statements of Cash Flows
For the years ended December 31, 1994, 1993 and 1992
(In thousands)
1994 1993 1992
Cash flows from operating activities:
Net income $ 89,851 $ 102,405 $ 122,551
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 52,327 45,201 45,154
Increase (decrease) in deferred income taxes 6,800 8,184 (8,024)
(Gain) loss on disposal of assets 2,148 2,877 (2,095)
Realignment charge (credit) (7,200) - 8,946
Changes in assets and liabilities:
Accounts receivable (3,500) 2,166 (7,224)
Inventories (101,801) (2,179) (27,815)
Prepaid expenses and other current assets (2,730) 9,363 (1,451)
Deferred charges and other noncurrent assets (13) (2,719) 4,124
Accounts payable (4,112) (37,405) 23,778
Accrued expenses (8,035) 15,007 16,424
Accrued income taxes 6,599 (5,868) 4,459
Other liabilities (1,019) (6,094) (2,752)
Net cash provided by operating activities 29,222 130,938 176,075
Cash flows from investing activities:
Additions to property and equipment (112,538) (108,181) (77,898)
Proceeds from disposal of assets 19,328 - 7,138
Net cash paid in acquisition of Puerto Rico stores (24,846) - -
Net cash used in investing activities (118,056) (108,181) (70,760)
Cash flows from financing activities:
Advances (to) from Parent and other divisions 154,054 16,159 (68,319)
Increase (decrease) in book overdrafts (662) 14,902 4,861
Dividends paid (48,273) (50,070) (46,442)
Principal payments on capital lease obligations (2,289) (2,365) (3,522)
Net cash provided by (used in)
financing activities 102,830 (21,374) (113,422)
Net increase (decrease) in cash 13,996 1,383 (8,107)
Cash at beginning of year 8,310 6,927 15,034
Cash at end of year $ 22,306 $ 8,310 $ 6,927
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 1,682 $ - $ -
Income taxes $ 41,636 $ 64,313 $ 71,737
See accompanying notes to consolidated financial statements.
MARSHALLS OF ROSEVILLE,
MINN., INC.
(a wholly-owned subsidiary of Melville Corporation)
Notes to Consolidated Financial Statements
December 31, 1994, 1993 and 1992
(1) Summary of Significant Accounting Policies
(a) Business
Marshalls of Roseville, Minn., Inc. (the "Company") is an off-
price retailer of brand name family apparel, accessories,
footwear and selected home furnishings operating 484 and 448
stores as of December 31, 1994 and 1993, respectively in the
United States and Puerto Rico.
(b) Basis of Presentation
The consolidated financial statements include those of Marshalls
of Roseville, Minn., Inc., a wholly-owned subsidiary of
Melville Corporation (the "Parent") and all of its retail
subsidiaries doing business as Marshalls. All intercompany
balances and transactions between the consolidated entities
have been eliminated.
(c) Accounting Changes
Effective January 1, 1993, the Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting
for Income Taxes," the cumulative effect of which was
immaterial to the consolidated financial statements and,
therefore, is not presented separately.
In 1993, the Company changed its method of accounting for LIFO
inventory by recognizing inflation on "basic" merchandise only.
(d) Cash
The Company's cash management program utilizes zero balance
accounts. Accordingly, all book overdraft balances have been
reclassified to accounts payable.
(e) Inventories
Inventories, principally finished goods, consist of merchandise
purchased from domestic and foreign vendors and are carried at
the lower of cost or market. Cost of inventories at
distribution centers is determined on a last-in, first-out
(LIFO) method. Inventories at stores are determined on the
retail inventory method valued on a first-in, first-out (FIFO)
basis.
(f) Property and Equipment
Property and equipment are stated at cost. Property and equipment
under capital leases are stated at the present value of future
minimum lease payments.
2
MARSHALLS OF ROSEVILLE, MINN., INC.
(a wholly-owned subsidiary of Melville Corporation)
Notes to Consolidated Financial Statements
December 31, 1994, 1993 and 1992
Depreciation and amortization of property, furniture and
equipment, and leasehold improvements is computed on a
straight-line basis, generally over the estimated useful lives
of the assets or, when applicable, the life of the lease,
whichever is shorter. Amortization of leased property under
capital leases is computed on a straight-line basis over the
life of the lease. Capitalized software costs are amortized on
a straight-line basis over their estimated useful lives
beginning in the year placed in service. Fully depreciated
property and equipment are removed from the cost and related
accumulated depreciation and amortization accounts.
Maintenance and repairs are charged directly to expense as
incurred. Major renewals or replacements are capitalized after
making the necessary adjustment on the asset and accumulated
depreciation accounts of the items renewed or replaced.
(g) Deferred Charges
Deferred charges, principally acquisition costs incurred from the
purchase of new or existing store locations, are amortized on a
straight-line basis, generally over the remaining terms of the
leases.
(h) Goodwill
The excess of acquisition costs over the fair value of net assets
acquired is amortized on a straight-line basis not to exceed 40
years. At December 31, 1994, the Company measured the
recoverability of the recorded goodwill by estimating the
future undiscounted cash flows expected to result from the
respective entities.
(i) Store Opening Costs
New store opening costs are charged to expense as incurred.
(j) Advertising Costs
Advertising costs are charged to expense as incurred.
(k) Income Taxes
The Parent and its subsidiaries, including the Company, file a
consolidated federal income tax return and, where applicable
group state and local returns. The provision for federal
income taxes or federal income tax benefit recorded by the
Company represents the amount calculated on a separate return
basis in accordance with the tax sharing agreement with
3
MARSHALLS OF ROSEVILLE, MINN., INC.
(a wholly-owned subsidiary of Melville Corporation)
Notes to Consolidated Financial Statements
December 31, 1994, 1993 and 1992
Parent. State income taxes represent actual amounts paid or
payable by the Company.
In February 1992, the Financial Accounting Standards Board issued
SFAS No. 109, "Accounting for Income Taxes." SFAS No. 109
requires a change from the deferred method of accounting for
income taxes of APB Opinion No. 11 to the asset and liability
method of accounting for income taxes. Under the asset and
liability method, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered
or settled. Under SFAS No. 109, the effect on deferred tax
assets and liabilities of a change in tax rates is recognized
in income in the period that includes the enactment date.
(2) Acquisition of Puerto Rico Stores
During 1994, the Company acquired the assets of twelve retail
stores located in Puerto Rico for a cash price of $24.8
million. This acquisition was accounted for using the purchase
method of accounting and resulted in goodwill of $15.5 million.
Results of operations are included in the consolidated
financial statements of the Company from the date of
acquisition. Pro forma financial results have not been
presented for the effect of this transaction since the
operations are not material to the consolidated financial
results of the Company.
(3) Inventories
During the year ended December 31, 1993, the Company changed its
method of accounting for the composition of "fashion" versus
"basic" merchandise in its LIFO pools, wherein inflation was
recognized on "basic" inventory only. The change increased
1993 net earnings by approximately $6.1 million. The net
earnings impact of the change on prior years, individually and
cumulatively, is not determinable.
Inventories carried under the LIFO method represented
approximately 37% of total year end inventory carrying
4
MARSHALLS OF ROSEVILLE, MINN., INC.
(a wholly-owned subsidiary of Melville Corporation)
Notes to Consolidated Financial Statements
December 31, 1994, 1993 and 1992
in 1994 and 34% in 1993. It is estimated that inventories
would have been approximately $3.0 million higher than reported
on December 31, 1994, and approximately $3.1 million higher on
December 31, 1993, if the quantities valued on the LIFO basis
were instead valued on a FIFO basis.
(4) Accounts Receivable
As of December 31, 1994 and 1993, accounts receivable consisted of
the following (in thousands):
1994 1993
Due from landlords $ 6,476 $ 6,191
Charge accounts 4,700 2,689
Layaways 1,570 1,544
Other 5,149 3,780
17,895 14,204
Less allowance for doubtful accounts 763 807
Total $ 17,132 $ 13,397
(5) Property and Equipment
As of December 31, 1994 and 1993, property and equipment consisted
of the following (in thousands):
1994 1993
Land $ 5,727 $ 4,104
Buildings and improvements 23,088 16,644
Capitalized software costs 48,195 37,276
Machinery and equipment 38,741 36,133
Furniture and fixtures 309,125 262,492
Leasehold improvements 212,675 213,477
637,551 570,126
Less accumulated depreciation
and amortization 190,204 174,472
Total $ 447,347 $ 395,654
5
MARSHALLS OF ROSEVILLE, MINN., INC.
(a wholly-owned subsidiary of Melville Corporation)
Notes to Consolidated Financial Statements
December 31, 1994, 1993 and 1992
(6) Accrued Expenses
As of December 31, 1994 and 1993, accrued expenses consisted of
the following (in thousands):
1994 1993
Taxes other than federal income taxes $ 47,744 $ 46,158
Capital expenditures 20,178 27,804
Employee benefit costs 23,201 17,434
Salaries and compensated absences 11,525 11,375
Rent 3,830 4,885
Other 55,319 64,025
Total $ 161,797 $ 171,681
(7) Leases
The Company leases retail stores, warehouses, and office
facilities under capital leases that expire through 2009. As
of December 31, 1994 and 1993, leased property under capital
leases was as follows (in thousands):
1994 1993
Retail stores $ 14,739 $ 17,005
Warehouses and office 13,356 13,356
28,095 30,361
Less accumulated amortization 21,714 22,463
Total $ 6,381 $ 7,898
The Company also has noncancelable operating leases, primarily for
retail stores, which expire through 2020. The leases generally
contain renewal options for periods ranging from one to five
years and require the Company to pay costs such as real estate
taxes and common area maintenance. Contingent rentals are paid
based on a percentage of sales. Net rental expense for all
operating leases for the years ended December 31, 1994, 1993
and 1992 was as follows (in thousands):
6
MARSHALLS OF ROSEVILLE, MINN., INC.
(a wholly-owned subsidiary of Melville Corporation)
Notes to Consolidated Financial Statements
December 31, 1994, 1993 and 1992
1994 1993 1992
Minimum rentals $ 122,634 $ 104,336 $ 94,707
Contingent rentals 2,693 2,129 2,033
125,327 106,465 96,740
Less sublease rentals 3,475 765 509
Total $ 121,852 $ 105,700 $ 96,231
At December 31, 1994, the future minimum lease payments under
capital leases, rental payments required under operating
leases, and the future minimum sublease rentals excluding lease
obligations for closed stores were as follows (in thousands):
Capital
Operating
Year ending December 31 Leases Leases
1995 $ 4,115 127,002
1996 3,996 120,684
1997 3,720 115,264
1998 3,107 107,776
1999 2,946 97,535
Thereafter 3,469 582,877
Total 21,353 $ 1,151,138
Less amount representing interest 7,772
Present value of minimum lease
payments $ 13,581
Total future minimum sublease
rentals $ 18,015
(8) Income Taxes
Effective January 1, 1993 the Company adopted SFAS No. 109. The
cumulative effect of this accounting change was not material.
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts
used for income tax purposes. Significant components o
7
MARSHALLS OF ROSEVILLE, MINN., INC.
(a wholly-owned subsidiary of Melville Corporation)
Notes to Consolidated Financial Statements
December 31, 1994, 1993 and 1992
Company's deferred tax assets and liabilities as of December
31, 1994 and 1993 were as follows (in thousands):
1994 1993
Deferred tax assets:
Realignment and purchase
acquisition reserves $ 1,085 $ 6,876
Inventories 10,460 6,913
State income taxes 4,608 5,849
Other 13,985 9,993
Total deferred tax assets 30,138 29,631
Deferred tax liabilities:
Property and equipment (49,233) (41,926)
Total deferred tax liabilities (49,233) (41,926)
Net deferred tax liabilities $ (19,095) $ (12,295)
For 1992, deferred income taxes relate principally to costs
associated with the strategic realignment program,
capitalization of inventory costs and depreciation.
For the years ended December 31, 1994, 1993 and 1992, the
provision for income taxes comprised the following (in
thousands):
1994 1993 1992
Federal:
Current $ 40,482 $ 45,275 $ 62,823
Deferred 7,138 5,577 192
47,620 50,852 63,015
State:
Current 7,090 9,901 12,880
Deferred 641 1,972 (393)
7,731 11,873 12,487
Total $ 55,351 $ 62,725 $ 75,502
8
MARSHALLS OF ROSEVILLE, MINN., INC.
(a wholly-owned subsidiary of Melville Corporation)
Notes to Consolidated Financial Statements
December 31, 1994, 1993 and 1992
The following is a reconciliation between the statutory Federal
income tax rates and the effective rates for the years ended
December 31, 1994, 1993 and 1992:
Percent of pre-tax income 1994 1993 1992
Effective tax rate 38.1 38.0 38.1
State income taxes,
net of Federal tax benefit (3.5) (4.7) (4.2)
Other .4 1.7 .1
Statutory Federal income
tax rate 35.0 35.0 34.0
(9) Related Party Transactions
The Parent allocates insurance, employee benefits and various
other administrative and miscellaneous expenses to the Company.
Allocations to the Company are based on the Company's share of
the expenses paid by the Parent on its behalf. Such
allocations may not be reflective of the costs which would have
been incurred if the Company had operated on a stand-alone
basis. Management believes that the basis for these
allocations is reasonable.
(a) 401(k) Profit Sharing Plan
The Parent has a qualified 401(k) Profit Sharing Plan available to
full-time employees who meet the plan's eligibility
requirements. This plan, which is a defined contribution plan,
contains a profit sharing component with tax-deferred
contributions to each employee based on certain performance
criteria, and also permits employees to make contributions up
to the maximum limits allowed by Internal Revenue Code Section
401(k). Under the 401(k) component, the Parent matches a
portion of the employee's contribution under a predetermined
formula based on the level of contribution and years of
vesting. The Parent allocates to its subsidiaries a portion of
the expense related to these contributions based on the
proportionate share of qualifying compensation at the Company
to the total of all compensation for all plan participants.
Contributions to the plan by the Company, as directed by the
Parent, for both profit sharing and matching of employee
contributions were approximately $7.0 million, $4.0 million and
9
MARSHALLS OF ROSEVILLE, MINN., INC.
(a wholly-owned subsidiary of Melville Corporation)
Notes to Consolidated Financial Statements
December 31, 1994, 1993 and 1992
$3.8 million for the years ended December 31, 1994, 1993 and
1992, respectively.
(b) Employee Stock Ownership Plan
The Company's employees participate in the Parent's Employee Stock
Ownership Plan ("ESOP"). The ESOP is a defined contribution
plan for all employees meeting certain eligibility
requirements. During 1989, the ESOP trust (the "Trust")
borrowed $375.5 million at an interest rate of 8.6% through a
20 year loan guaranteed by the Parent. The Trust used the
proceeds of the loan to purchase a new issue of convertible
preference stock from the Parent.
The Parent charges compensation expense to the Company based upon
total payments due to the ESOP. The charge allocated to the
Company is based on the Company's proportionate share of
qualifying compensation expense and does not reflect the manner
in which the Parent funds these costs or the related tax
benefits realized by the Parent. As a result of the Company's
allocation from the Parent, compensation expense of
approximately $9.8 million, $8.5 million and $7.6 million was
recognized in the years ended December 31, 1994, 1993 and 1992,
respectively.
(c) Administrative Costs
The Parent allocates real estate services and various other
administrative expenses to the Company. Allocations are based
on the Company's ratable share of expense incurred by the
Parent on behalf of the Company. The total cost allocated to
the Company for the years ended December 31, 1994, 1993 and
1992 was approximately $2.1 million, $2.0 million and $1.7
million, respectively.
Melville Realty Company, Inc., a subsidiary of the Parent,
guarantees the leases of certain stores operated by the Company
and charges a fee for that service. This amount is reflected
in general and administrative expense and amounted to
approximately $405,000, $327,000 and $306,000 for the years
ended December 31, 1994, 1993 and 1992, respectively.
10
MARSHALLS OF ROSEVILLE, MINN., INC.
(a wholly-owned subsidiary of Melville Corporation)
Notes to Consolidated Financial Statements
December 31, 1994, 1993 and 1992
(10) Realignment Charge and Credit
In 1992, the Company recorded a realignment charge of $8.9 million
to reflect the anticipated costs associated with the write-down
of under performing assets in stores. The realignment charge
did not include any cash outlays.
In 1994, the Company recorded a $7.2 million realignment credit to
reduce a multi-year lease accrual upon the sublease of a
distribution center. The accrual was established when the
facility was vacated in 1990.
(11) Commitments and Contingencies
The Company was contingently liable for unused letters of credit
amounting to approximately $25.1 million and $26.1 million as
of December 31, 1994 and 1993, respectively.
The Company is involved in various claims and legal actions
arising in the ordinary course of business. In the opinion of
management, the ultimate disposition of these matters will not
have a material adverse effect on the Company's consolidated
financial position, results of operations or liquidity.
(12) Subsequent Event
On October 14, 1995, the Company was acquired by TJX Companies,
Inc. ("TJX") for $375 million in cash and $175 million of TJX's
convertible preferred stock.
MARSHALLS OF ROSEVILLE, MINN., INC.
(a wholly-owned subsidiary of Melville Corporation)
Consolidated Financial Statements
September 30, 1995 and October 1, 1994
(With Independent Accountants' Review Report Thereon)
Independent Accountants' Review Report
To the Board of Directors and Shareholders
Melville Corporation:
We have reviewed the accompanying consolidated balance sheets of
Marshalls of Roseville, Minn., Inc. (a wholly-owned subsidiary of
Melville Corporation) as of September 30, 1995 and October 1, 1994,
and the related consolidated statements of operations,
shareholder's equity, and cash flows for three-month and nine-month
periods then ended. These consolidated financial statements are
the responsibility of Marshalls of Roseville, Minn., Inc.'s
management.
We conducted our reviews in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical 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 reviews, with the exception of the matter described in
the following paragraph, we are not aware of any material
modifications that should be made to the consolidated financial
statements referred to above for them to be in conformity with
generally accepted accounting principles.
Management has elected to omit substantially all of the disclosures
required by generally accepted accounting principles. If the
omitted disclosures were included in the consolidated financial
statements, they might influence the user's conclusions about the
Company's consolidated financial position, results of operations
and cash flows. Accordingly, these consolidated financial
statements are not designed for those who are not informed about
such matters.
/s/KPMG Peat Marwick LLP
Boston, Massachusetts
December 1, 1995
MARSHALLS OF ROSEVILLE, MINN., INC.
(a wholly-owned subsidiary of Melville Corporation)
Consolidated Balance Sheets
September 30, 1995 and October 1, 1994
(Unaudited)
(In Thousands)
Assets 1995 1994
Current assets:
Cash $ 15,077 $ 17,216
Accounts receivable, net of allowance for
doubtful accounts of $880 and $817, in
1995 and 1994, respectively 45,058 39,159
Inventories 607,429 593,263
Prepaid expenses and other current assets 9,004 6,861
Income tax receivable 18,714 -
Total current assets 695,282 656,499
Property and equipment, net 439,009 418,992
Capitalized lease assets, net 5,350 6,760
Goodwill, net 28,652 29,818
Deferred charges and other noncurrent assets, net 21,354 23,091
Total assets $1,189,647 $1,135,160
Liabilities and Shareholder's Equity
Current liabilities:
Accounts payable $ 243,688 $ 204,661
Accrued expenses 135,520 159,493
Accrued Federal income taxes - 8,244
Due to Parent and other divisions 154,582 73,333
Capital lease obligations 2,461 2,492
Total current liabilities 536,251 448,223
Deferred income taxes 19,259 12,519
Capital lease obligations 9,421 11,882
Other liabilities 4,167 12,931
Shareholder's equity:
Common stock, no par value, 100 shares
authorized and outstanding 1995 and 1994 352 352
Contributed capital 152,839 152,839
Retained earnings 467,358 496,414
Total shareholder's equity 620,549 649,605
Total liabilities and shareholder's equity $1,189,647 $1,135,160
See accompanying accountants' review report and notes to consolidated
financial statements.
MARSHALLS OF ROSEVILLE, MINN., INC.
(a wholly-owned subsidiary of Melville)
Consolidated Statements of Operations
For the three months ended and nine months ended September 30, 1995
and October 1, 1994
(Unaudited)
(In Thousands)
Three months ended Nine months ended
September 30, October 1, September 30, October 1,
1995 1994 1995 1994
Net sales $ 659,634 $ 671,077 $1,852,245 $1,902,444
Cost of goods sold 475,423 448,372 1,310,401 1,265,189
Gross profit 184,211 222,705 541,844 637,255
Selling, general and administrative
expenses 195,666 189,415 561,158 545,970
Depreciation and amortization 16,050 14,253 45,690 40,221
Operating income (loss) (27,505) 19,037 (65,004) 51,064
Other income (expense):
Net interest income (expense),
Parent and other divisions (2,500) (591) (5,971) (162)
Interest expense, third party (8) (23) (59) (102)
Income (loss) before provision
for income taxes (30,013) 18,423 (71,034) 50,800
Provision (benefit) for income taxes (8,770) 7,351 (28,369) 18,891
Net income (loss) $ (21,243) $ 11,072 $ (42,665) $ 31,909
See accompanying accountants' review report and notes to consolidated financial
statements.
MARSHALLS OF ROSEVILLE, MINN., INC.
(a wholly-owned subsidiary of Melville Corporation)
Consolidated Statements of Shareholder's Equity
For the nine months ended September 30, 1995 and
October 1, 1994
(Unaudited)
(In Thousands)
Total
Common Contributed Retained Shareholder's
Stock Capital Earnings Equity
Balance as of December 31, 1994 $352 $152,839 $542,275 $695,466
Net loss - - (42,665) (42,665)
Dividends paid to Parent - - (32,252) (32,252)
Balance as of September 30, 1995 352 152,839 467,358 620,549
Balance as of December 31, 1993 352 152,839 500,697 653,888
Net income - - 31,909 31,909
Dividends paid to Parent - - (36,192) (36,192)
Balance as of October 1, 1994 $352 $152,839 $496,414 $649,605
See accompanying accountants' review report and notes to consolidated
financial statements.
MARSHALLS OF ROSEVILLE, MINN., INC.
(a wholly-owned subsidiary of Melville Corporation)
Consolidated Statements of Cash Flows
For the three months and nine months ended September 30, 1995
and October 1, 1994
(Unaudited)
(In Thousands)
Three Months ended Nine months ended
September 30, October 1, September 30, October 1,
1995 1994 1995 1994
Cash flows from operating activities:
Net income (loss) $ (21,243) $ 11,072 $ (42,665) $ 31,909
Adjustments to reconcile net income (loss)
to net cash used for operating activities:
Depreciation and amortization 16,050 14,253 45,690 40,221
Increase in deferred income taxes 78 74 164 226
Loss on disposal of assets 2,055 722 3,119 1,469
Changes in assets and liabilities:
Accounts receivable (24,517) (17,392) (27,925) (25,526)
Inventories (107,496) (93,991) (135,946) (223,581)
Prepaid expenses and other current
assets (2,198) (1,771) (74) (661)
Income tax receivable (8,876) - (18,714) -
Deferred charges and other noncurrent
assets (801) (56) (1,655) (1,054)
Accounts payable 106,089 (8,643) 134,157 68,000
Accrued expenses 10,967 12,462 (26,277) (13,262)
Accrued Federal income taxes - (5,102) (28,745) (13,901)
Other liabilities (216) (380) (1,256) (708)
Net cash used for operating activities (30,108) (88,752) (100,127) (136,868)
Cash flows from investing activities:
Additions to property and equipment (15,615) (33,301) (36,818) (68,513)
Proceeds from disposal of assets - - - 17,996
Net cash paid in acquisition of Puerto
Rico stores - (24,846) - (24,846)
Net cash used for investing activities (15,615) (58,147) (36,818) (75,363)
Cash flows from financing activities:
Advances from Parent and other divisions 60,883 120,455 158,914 231,719
Increase (decrease) in book overdrafts (2,674) 48,248 4,752 27,108
Dividends paid to Parent (10,716) (12,076) (32,252) (36,192)
Principal payments on capital lease
obligations (566) (353) (1,698) (1,498)
Net cash provided by financing activities 46,927 156,274 129,716 221,137
Net increase (decrease) in cash 1,204 9,375 (7,229) 8,906
Cash at beginning of period 13,873 7,841 22,306 8,310
Cash at end of period $ 15,077 $ 17,216 $ 15,077 $ 17,216
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest $ 2,501 $ 591 $ 5,971 $ 591
Income taxes $ 416 $ 11,413 $ 31,254 $ 34,926
See accompanying accountants' review report and notes to consolidated financial
statements.
MARSHALLS OF ROSEVILLE, MINN., INC.
(a wholly-owned subsidiary of Melville Corporation)
Notes to Consolidated Financial Statements
September 30, 1995 and October 1, 1994
(Unaudited)
(1) Basis of Presentation
The unaudited consolidated financial statements include those of
Marshalls of Roseville, Minn., Inc., a wholly-owned subsidiary
of Melville Corporation (the "Parent") and all of its retail
subsidiaries doing business as Marshalls. All intercompany
balances and transactions between the consolidated entities
have been eliminated.
In the opinion of the Company's management, these unaudited
consolidated financial statements reflect all adjustments
(which include only normal and recurring adjustments) necessary
to present fairly the financial position and results of
operations for such periods. Results of operations for interim
periods are not necessarily indicative of results that might be
achieved for the entire year.
(2) Acquisition of Puerto Rico Stores
During 1994, the Company acquired the assets of twelve retail
stores located in Puerto Rico for a cash price of $24.8
million. This acquisition was accounted for using the purchase
method of accounting and resulted in goodwill of $15.5 million.
Results of operations are included in the consolidated
financial statements of the Company from the date of
acquisition. Pro forma financial results have not been
presented for the effect of this transaction since the
operations are not material to the consolidated financial
results of the Company.
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
On November 17, 1995, The TJX Companies, Inc., (the Company)
acquired the stock of Marshalls of Roseville, Minn., Inc.
(Marshalls) from Melville Corporation. Marshalls and its wholly
owned subsidiaries, operate the chain of Marshalls off-price
apparel retail stores. On November 17, 1995, the Company paid $550
million ($375 million in cash and $175 million in junior
convertible preferred stock), and assumed certain liabilities,
based on an estimated October 31, 1995 balance sheet of the
Marshalls division. The final purchase price, before acquisition
costs, is subject to change based on the actual balance sheet of
Marshalls as of November 17, 1995, but cannot exceed $600 million.
The Company expects the actual purchase price, before acquisition
costs, based on Marshalls actual balance sheet as of November 17
will approximate $600 million.
The pro forma condensed consolidated financial statements assume
the pro forma purchase price is based on Marshalls historical
balance sheet as of September 30, 1995. Marshalls net assets as of
September 30, 1995 are less than those of November 17, 1995 due to
seasonal working capital requirements and accordingly the pro forma
condensed consolidated financial statements reflect a lower
purchase price for pro forma purposes of $536 million, including
acquisition costs.
The pro forma condensed consolidated balance sheet as of October
28, 1995, assumes the acquisition took place on that date, and is
based on the unaudited historical balance sheet of the Company as
of October 28, 1995 and the unaudited historical balance sheet of
Marshalls as of September 30, 1995, a copy of which is included
with this filing (the Company's fiscal year ends one month later
than that of Marshalls). The pro forma adjustments eliminate the
Marshalls assets and liabilities not acquired, record the pro forma
purchase price of $536 million and allocate the pro forma purchase
price to the assets acquired and the liabilities assumed based on
their fair market value on date of acquisition. The Company
believes the final allocation of purchase price will not differ
significantly from the estimates included in the pro forma
condensed consolidated financial statements. The acquisition has
been accounted for under the purchase method of accounting.
The pro forma condensed consolidated statement of income for the
nine months ended October 28, 1995 includes the unaudited
historical statement of income of the Company as reported on Form
10Q for the quarter ended October 28, 1995 and the unaudited
historical statement of operations for Marshalls for the nine
months ended September 30, 1995 (copy included with this filing)
adjusted for one month to present seasonal operating results
comparable with that of the Company (see Note 2(a)). The pro forma
condensed consolidated statement of income for the year ended
January 26, 1995 includes the audited historical results of the
Company as reported on Form 10-K for the year ended January 26,
1995, restated to reflect the Company's September 1995 sale of its
Hit or Miss division as a discontinued operation, and includes
Marshalls historical audited statement of operations for the year
ended December 31, 1994 (copy included with this filing) adjusted
for one month to present a comparable period with that of the
Company (see Note 2(a)). The pro forma adjustments to both income
statements reflect the impact of the transaction as if it occurred
on January 30, 1994.
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 entities been
combined since the applicable date 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 historical
financial statements of Marshalls included with this filing.
THE TJX COMPANIES, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF OCTOBER 28, 1995
(UNAUDITED)
(In Thousands)
Historical
The TJX Pro Forma Pro Forma
Companies, Inc. Marshalls Adjustments Consolidated
ASSETS
Current assets:
Cash and cash equivalents $ 26,902 $ 15,077 $ (13,077) (1) $ 28,902
Accounts receivable 135,901 45,058 (24,578) (1) 156,381
Merchandise inventories 1,111,651 607,429 24,381 (1) 1,743,461
Prepaid expenses 31,367 9,004 (5,052) (1) 35,319
Income tax receivable - 18,714 (18,714) (1) -
Total current assets 1,305,821 695,282 (37,040) 1,964,063
Property, net 481,885 444,359 (114,485) (1) 811,759
Other assets 27,580 21,354 (21,354) (1) 27,580
Goodwill and trademarks,
net of amortization 87,993 28,652 107,608 (1) 224,253
TOTAL ASSETS $1,903,279 $1,189,647 $ (65,271) $3,027,655
LIABILITIES
Current liabilities:
Short-term debt $ 97,699 $ - $ (14,388) (1) $ 83,311
Current installments of
long-term debt 56,048 - - 56,048
Accounts payable 407,778 243,688 - 651,466
Accrued expenses and other
current liabilities 308,308 137,981 207,095 (1) 653,384
Due to Parent - 154,582 (154,582) (1) -
Total current liabilities 869,833 536,251 38,125 1,444,209
Long-term debt exclusive of
current installments 410,566 - 375,000 (1) 785,566
Deferred income taxes 34,780 19,259 (19,259) (1) 34,780Other long-term liabilities
SHAREHOLDERS' EQUITY
Convertible preferred stock
at face value 107,500 - 175,000 (1) 282,500
Common stock 72,419 352 (352) (1) 72,419
Additional paid-in capital 267,743 152,839 (152,839) (1) 267,743
Retained earnings 140,438 467,358 (467,358) (1) 140,438
Total shareholders' equity 588,100 620,549 (445,549) 763,100
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,903,279 $1,189,647 $ (65,271) $3,027,655
See notes to the unaudited pro forma condensed consolidated financial
statements.
THE TJX COMPANIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED OCTOBER 28, 1995
(UNAUDITED)
($'s In Thousands Except Per Share Amounts)
Historical
The TJX Pro Forma Pro Forma
Companies, Inc. Marshalls Adjustments Consolidated
Net sales $2,692,047 $1,852,245 $ 74,164 (2a) $4,618,456
Cost of sales, including 34,641 (2a)
buying and occupancy costs 2,040,124 1,561,382 (7,575) (2c) 3,628,572
Selling, general and 8,448 (2a)
administrative expenses 534,079 355,867 2,018 (2d) 900,412
18 (2a)
Interest expense, net 29,562 6,030 22,088 (2b) 57,698
Income (loss) from continuing
operations before income taxes 88,282 (71,034) 14,526 31,774
Provision (benefit) for
income taxes 37,182 (28,369) 5,810 (2e) 14,623
Income (loss) from continuing
operations 51,100 (42,665) 8,716 17,151
Preferred stock dividends (5,367) - (7,875) (2f) (13,242)
Income (loss) from continuing
operations available to
common shareholders $ 45,733 $ (42,665) $ 841 $ 3,909
Income from continuing
operations per share $ .63 $ .05
Number of common shares for
per share computations 72,484,535 2,024,292 (2g) 74,508,827
See notes to the unaudited pro forma condensed consolidated financial
statements.
THE TJX COMPANIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE FISCAL YEAR ENDING JANUARY 28, 1995
(UNAUDITED)
($'s In Thousands Except Per Share Amounts)
Historical
The TJX Pro Forma Pro Forma
Companies, Inc. Marshalls Adjustments Consolidated
Net sales $3,489,146 $2,774,851 $ 5,080 (2a) $6,269,077
Cost of sales, including 19,459 (2a)
buying and occupancy costs 2,643,323 2,139,817 (10,100) (2c) 4,792,499
Selling, general and 2,648 (2a)
administrative expenses 673,187 495,254 2,690 (2d) 1,173,779
Realignment charge (credit) - (7,200) - (7,200)
584 (2a)
Interest expense, net 24,484 1,778 29,450 (2b) 56,296
Income (loss) from continuing
operations before income taxes 148,152 145,202 (39,651) 253,703
Provision (benefit) for
income taxes 61,573 55,351 (15,860) (2e) 101,064
Income (loss) from continuing
operations 82,579 89,851 (23,791) 152,639
Preferred stock dividends (7,156) - (10,953) (2f) (18,109)
Income from continuing operations
available to common
shareholders $ 79,423 $ 89,851 $ (34,744) $ 134,530
Income from continuing operations
per share $1.08 $1.70
Number of common shares for per
share computations 73,467,003 16,112,090 (2g) 89,579,093
See notes to the unaudited pro forma condensed consolidated financial
statements.
THE TJX COMPANIES, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(In Thousands)
NOTE 1
The pro forma adjustments to the condensed consolidated balance sheet
reflect the purchase of Marshalls, the elimination of assets and
liabilities not acquired and the allocation of the pro forma purchase price
to the assets acquired and liabilities assumed based on the fair market
value at date of acquisition. The pro forma adjustments include the impact
of conforming Marshalls accounting policies to those of the Company.
Pro Forma
Balances Not Purchase Price
Acquired Allocation Total
ASSETS
Cash & cash equivalents $ (13,077) $ - $ (13,077)
Accounts receivable (23,813) (765)(b) (24,578)
Merchandise inventories 3,599 20,782 (b) 24,381
Prepaid expenses (1,610) (3,442)(b) (5,052)
Income tax receivable (18,714) - (18,714)
Property, net - (114,485)(b) (114,485)
Other assets (4,285) (17,069)(b) (21,354)
Goodwill & trademarks - 107,608 (b) 107,608
(57,900) (7,371) (65,271)
LIABILITIES & EQUITY
Short-term debt - (14,388)(a) (14,388)
Accrued expenses (43,548) 250,643 (b) 207,095
Due to Parent (154,582) - (154,582)
Long-term debt - 375,000 (a) 375,000
Deferred income taxes (19,259) - (19,259)
Other long-term liabilities (4,167) (9,421)(b) (13,588)
Preferred stock - 175,000 (a) 175,000
Common stock (352) - (352)
Additional paid in capital (152,839) - (152,839)
Retained earnings (467,358) - (467,358)
(842,105) 776,834 (65,271)
TOTAL $(784,205) $ 784,205 $ 0
(a) The pro forma purchase price of $536 million is assumed to be
paid from the proceeds of the $375 million five year bank term
loan, obtained to finance the cash portion of the purchase price,
and the issuance of $175 million junior convertible preferred
stock. The pro forma condensed consolidated financial statements
assumes the amount borrowed in excess of the cash portion of the
pro forma purchase price would have been used to reduce short-
term debt.
(b) Adjustment to reflect the fair value of assets acquired and
liabilities assumed including negative goodwill of approximately
$57 million which was allocated pro rata to long-term assets.
The following summarizes major balance sheet classifications.
- Merchandise inventories - Valued based on an estimate of net
realizable value of inventory purchased using the retail method.
- Property, net - The net adjustment includes a write down of fixtures
and leasehold improvements to fair value, partially offset by value
assigned to leases purchased. The adjustment reflects the
anticipated closing of approximately 170 Marshalls stores and
includes a reduction for a portion of negative goodwill.
- Goodwill and trademarks - Adjustment reflects the value assigned to
the "Marshalls" tradename, offset by the elimination of goodwill
recorded by Marshalls in a prior acquisition. The net adjustment
includes a reduction for a portion of negative goodwill.
- Other assets - Adjustment is to eliminate deferred charges
associated with leases acquired.
- Accrued expenses - Reflects a reserve for the anticipated closing of
approximately 170 Marshalls stores, the closing of certain
facilities, a reserve for inventory markdowns and the accrual of
other liabilities associated with the purchase.
The difference between the values assigned to assets and liabilities for
book purposes versus tax purposes result in offsetting deferred tax assets
and liabilities at the date of acquisition.
NOTE 2
The pro forma condensed consolidated statement of income reflects the
following adjustments:
(a) To adjust Marshalls fiscal reporting periods to be comparable with the
reporting periods of the Company.
Nine Months Ended October 28, 1995
Marshalls Marshalls
Nine Months Ended Pro Forma Nine Months Ended
9/30/95* Adjustment 10/28/95
Net Sales $1,852,245 $74,164 $1,926,409
Cost of sales,
including buying and
occupancy costs 1,561,382 34,641 1,596,023
Selling, general and
administrative expenses 355,867 8,448 364,315
Interest expense, net 6,030 18 6,048
Income (loss) from
continuing operations
before income taxes $ (71,034) $31,057 $ (39,977)
Fiscal Year Ended January 28, 1995
Marshalls Marshalls
Fiscal Year Ended Pro Forma Fiscal Year Ended
12/31/94* Adjustment 1/28/95
Net sales $2,774,851 $5,080 $2,779,931
Cost of sales,
including buying and
occupancy costs 2,139,817 19,459 2,159,276
Selling, general and
administrative
expenses 495,254 2,648 497,902
Realignment credit (7,200) - (7,200)
Interest expense, net 1,778 584 2,362
Income (loss) from
continuing operations
before income taxes $ 145,202 $(17,611) $ 127,591
* Includes reclassification of certain amounts to conform with the
historical presentation of the Company.
(b) To record additional interest costs related to the new bank agreement
entered into as a result of the purchase of Marshalls. The interest
on the $375 million term loan is adjusted periodically in relation to
Eurodollar market and currently approximates 7%. Deferred financing
charges of $13 million associated with the term loan and the $500
million revolving credit facility are amortized into interest expense
at $3.2 million annually.
Nine Months Fiscal Year
Ended 10/28/95 Ended 1/28/95
Interest expense $22,088 $ 29,450
(c) To reflect reduced depreciation expense due to the net write down of
property to fair value.
Nine Months Fiscal Year
Ended 10/28/95 Ended 1/28/95
- Cost of sales including
buying and occupancy (7,575) (10,100)
(d) To record amortization of "Marshalls" trade name over estimated life
of 40 years, net of reduction in amortization due to elimination of
goodwill from prior acquisitions.
Nine Months Fiscal Year
Ended 10/28/95 Ended 1/28/95
- Selling, general and
administrative expenses 2,018 2,690
(e) To record the income tax provision (benefit) associated with the pro
forma adjustments at the marginal tax rate of 40%.
Nine Months Fiscal Year
Ended 10/28/95 Ended 1/28/95
- Provision (benefit) for
income taxes 5,810 (15,860)
(f) To reflect preferred dividends payable on the convertible preferred
stock issued in the transaction.
Nine Months Fiscal Year
Ended 10/28/95 Ended 1/28/95
Series D, 250,000 shares with
face value of $25 million;
annual dividend $1.8138/share $ - $ 453
Series E, 1,500,000 shares with
face value of $150 million;
annual dividend of $7.00/share 7,875 10,500
$7,875 $10,953
The Series D is automatically convertible into common stock one year
after it is issued and thus the pro forma condensed consolidated
financial statements assume conversion into common stock at the
maximum number of shares (see 2(g)) at the end of the fiscal year
1/28/95.
(g) To adjust shares outstanding for dilutive impact of assumed conversion
of the Company's Series A and Series C preferred stock and for the pro
forma impact of the preferred stock issued for the purchase of
Marshalls (Series D and E).
Nine Months Fiscal Year
Ended 10/28/95 Ended 1/28/95
Series A - 1,190,476
Series C - 3,180,723
Series D 2,024,292 2,024,292
Series E - 9,716,599
Total 2,024,292 16,112,090
The Series D and Series E preferred stock are convertible into an
aggregate of 9.4 million to 11.7 million shares of common stock,
depending on the market value of the common stock at time of
conversion. The pro forma adjustments with regard to Series D and
Series E above assume the maximum number of common shares are issued.
NOTE 3
The following should be noted in reviewing the pro forma condensed
consolidated income statements.
- - The Company anticipates closing approximately 170 Marshalls stores,
certain costs of which have been reserved for in the pro forma
condensed consolidated balance sheet. The pro forma condensed
consolidated income statement has not been adjusted to reflect the
impact the closing of these stores will have on ongoing operations.
- - The Company anticipates closing approximately 30 T.J. Maxx stores and
expects to record a pre-tax charge of $35 million in the fourth
quarter of its fiscal year ending January 27, 1996. This charge will
reduce income from continuing operations by approximately $.29 per
share. Neither the T.J. Maxx closing reserve, nor the impact the
closings will have on ongoing operations, have been reflected in the
pro forma condensed consolidated financial statements.
- - Savings the Company may generate by consolidating responsibilities and
reducing overhead have not been factored into the pro forma condensed
consolidated financial statements.
EXHIBIT 99.3
EXHIBIT INDEX
Exhibit No. Description of Exhibits
2.2* Amendment No. 1 dated as of November 17, 1995 to
Stock Purchase Agreement dated as of October 14,
1995 between the Registrant and Melville
Corporation.
10.1* Certificates of Designations, Rights and
Preferences for the Registrant's Series D
Cumulative Convertible Preferred Stock.
10.2* Certificates of Designations, Rights and
Preferences for the Registrant's Series E
Cumulative Convertible Preferred Stock.
10.3* Transitional Services Agreement dated as of
November 17, 1995 between the Registrant and
Melville Corporation.
10.4* Credit Agreement dated as of November 17, 1995
among The First National Bank of Chicago, Bank of
America Illinois, The Bank of New York, and Pearl
Street L.P., as co-arrangers, the other financial
institution parties thereto, and the Registrant.
99.1* Press Release issued by the Registrant on November
20, 1995.
99.2(i) Financial Statements - Audited Consolidated
Financial Statements of Marshalls of Roseville,
Minn., Inc. for the Years Ended December 31, 1994,
1993 and 1992.
99.2(ii) Financial Statements - Unaudited Consolidated
Financial Statements of Marshalls of Roseville,
Minn., Inc. for the Nine Months Ended September
30, 1995 and October 1, 1994.
99.2(iii) Financial Statements - Unaudited Pro Forma
Condensed Consolidated Financial Statements for
The TJX Companies, Inc. as of October 28, 1995 and
for the periods ended October 28, 1995 and January
28, 1995.
99.3 Exhibit Index
* Included with, and incorporated herein by reference to, the
Registrant's Current Report on Form 8-K dated November 17,
1995.
