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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 29, 1995
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 27, 1995: 72,401,326
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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 29, April 30,
1995 1994
Net sales $ 911,602 $ 851,736
Cost of sales, including buying and
occupancy costs 699,047 635,714
Selling, general and administrative expenses 188,635 177,609
Interest on debt and capital leases 8,863 5,479
Income before income taxes 15,057 32,934
Provision for income taxes 6,992 13,565
Net income 8,065 19,369
Preferred stock dividends 1,789 1,789
Net income available to common shareholders $ 6,276 $ 17,580
Primary and fully diluted earnings per common share:
Net income $ .09 $ .24
Cash dividends per common share $ .14 $ .14
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 29, January 28, April 30,
1995 1995 1994
Current assets:
Cash and cash equivalents $ 21,159 $ 41,569 $ 30,287
Accounts receivable 85,807 43,440 49,609
Merchandise inventories 1,076,064 937,729 859,374
Prepaid expenses 44,749 23,459 29,859
Total current assets 1,227,779 1,046,197 969,129
Property, at cost:
Land and buildings 114,810 114,736 112,841
Leasehold costs and improvements 313,324 302,844 265,649
Furniture, fixtures and equipment 460,612 447,840 405,557
888,746 865,420 784,047
Less accumulated depreciation 395,101 377,595 340,542
493,645 487,825 443,505
Other assets 14,028 14,319 13,636
Goodwill, net of amortization 89,309 89,877 91,883
TOTAL ASSETS $1,824,761 $1,638,218 $1,518,153
LIABILITIES
Current liabilities:
Short-term debt $ 168,365 $ 20,000 $ 10,000
Current installments of
long-term debt 31,364 31,306 5,995
Accounts payable 475,228 439,277 400,091
Accrued expenses and other
current liabilities 274,079 267,682 259,729
Total current liabilities 949,036 758,265 675,815
Long-term debt exclusive of
current installments:
Real estate mortgages 76,692 77,550 42,021
Equipment notes 4,475 4,598 5,900
General corporate debt 157,330 157,330 161,915
Deferred income taxes 34,498 33,523 34,587
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, authorized 150,000,000
shares, par value $1, issued and
outstanding 72,401,076, 72,401,254
and 73,455,447, shares 72,401 72,401 73,455
Additional paid-in capital 267,575 267,937 285,172
Retained earnings 155,254 159,114 131,788
Total shareholders' equity 602,730 606,952 597,915
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,824,761 $1,638,218 $1,518,153
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 29, April 30,
1995 1994
Cash flows from operating activities:
Net income $ 8,065 $ 19,369
Adjustments to reconcile net income to
net cash (used in) operating activities:
Depreciation and amortization 21,063 18,363
Loss on property disposals 874 2,500
Other (486) (61)
Changes in assets and liabilities:
(Increase) in accounts receivable (42,367) (18,970)
(Increase) in merchandise inventories (138,335) (87,050)
(Increase) in prepaid expenses (21,290) (9,068)
Increase in accounts payable 35,951 59,513
Increase in accrued expenses and other
current liabilities 6,397 14,590
Increase in deferred income taxes 975 624
Net cash (used in) operating activities (129,153) (190)
Cash flows from investing activities:
Property additions (26,797) (24,352)
Cash flows from financing activities:
Proceeds from borrowings of short-term debt 148,365 10,000
Principal payments on long-term debt (923) (959)
Proceeds from sale and issuance of common
stock, net 23 492
Cash dividends (11,925) (12,806)
Net cash provided by (used in) financing
activities 135,540 (3,273)
Net (decrease) in cash and cash equivalents (20,410) (27,815)
Cash and cash equivalents at beginning of year 41,569 58,102
Cash and cash equivalents at end of period $ 21,159 $ 30,287
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 29, 1995 versus
Thirteen Weeks ended April 30, 1994
Net sales for the first quarter were $911.6 million, up 7% from $851.7
million last year. The sales increase is primarily attributable to new
stores and, to a lesser extent, the inclusion of HomeGoods in this
year's consolidated net sales. Same store sales decreased by 1% and 9%
for T.J. Maxx and Hit or Miss, respectively, while Winners same store
sales increased by 5%. Chadwick's experienced a 7% increase in sales.
In general, sales were impacted by the continuing general softness,
industrywide, in U.S. apparel sales.
Net income for the first quarter was $8.1 million, or $.09 per common
share, versus last year's first quarter of $19.4 million, or $.24 per
common share.
The following table sets forth operating results expressed as a
percentage of net sales:
Percentage of Net Sales
13 Weeks Ended
4/29/95 4/30/94
Net sales 100.0% 100.0%
Cost of sales, including buying and
occupancy costs 76.7 74.6
Selling, general and administrative expenses 20.7 20.9
Interest on debt and capital leases .9 .6
Income before income taxes 1.7% 3.9%
Cost of sales, including buying and occupancy costs, as a percentage of
net sales increased over last year primarily due to higher markdowns
taken in the first quarter at T.J. Maxx.
Selling, general and administrative expenses, as a percentage of net
sales, decreased as a result of operational improvements at Chadwick's.
Interest on debt and capital leases increased over the prior year due to
additional borrowings under the Company's medium term note program, a
$45 million real estate mortgage placed on the Chadwick's fulfillment
center in December 1994 and an increase in short-term borrowings.
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The following table sets forth the operating results of the Company's
major business segments: (unaudited)
13 Weeks Ended
(In Thousands)
April 29, April 30,
1995 1994
Net sales:
Off-price family apparel stores $ 700,714 $ 653,428
Off-price women's specialty stores 81,172 89,476
Off-price catalog operation 116,611 108,832
Off-price home fashions stores 13,105 -
$ 911,602 $ 851,736
Operating income:
Off-price family apparel stores $ 32,911 $ 46,679
Off-price women's specialty stores (1,790) 243
Off-price catalog operation 5,261 972
Off-price home fashions stores (1,529) -
34,853 47,894
General corporate expense* 10,280 8,828
Goodwill amortization 653 653
Interest expense 8,863 5,479
Income before income taxes $ 15,057 $ 32,934
* General corporate expense for the thirteen weeks ended April 29, 1995
includes the net operating results of T.K. Maxx and the Cosmopolitan
catalog. General corporate expense for the thirteen weeks ended
April 30, 1994 includes the net operating results of HomeGoods and
T.K. Maxx as well as a reserve for the closing of the Value Mart
operation.
The off-price family apparel stores segment, T.J. Maxx and Winners,
recorded a 30% decrease in operating income. This is attributable to
weak apparel sales and higher markdowns at T.J. Maxx. Winners'
operating income increased over last year's first quarter. Hit or Miss
also recorded a decrease in operating income due to weakness in apparel
sales. Chadwick's recorded a significant increase in operating income
due to operational improvements, resulting in improved expense ratios,
better customer service, and shipping goods on a more timely basis.
Stores in operation at the end of the period are as follows:
April 29, 1995 April 30, 1994
T.J. Maxx 558 513
Hit or Miss 479 504
Winners 39 28
HomeGoods 19 10
T.K. Maxx 6 2
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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.
The increase in short-term borrowings also reflects an increase in
accounts receivable due to a deferred customer billing program at
Chadwick's, an increase in prepaid expenses due to a shift in the timing
of certain catalog mailings at Chadwick's and lower than anticipated
earnings in fiscal 1995 and the first quarter of fiscal 1996.
As of April 29, 1995, the Company has unsecured committed short-term
credit lines totalling $300 million and unsecured uncommitted short-term
credit lines of $115 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.
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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 29, April 30,
1995 1994
Cash paid for:
Interest on debt and capital leases $3,971 $1,201
Income taxes 3,518 4,828
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 6,
1995. The following matters were voted upon at the Annual
Meeting:
Election of Directors For Withheld
Richard G. Lesser 61,602,216 292,608
John M. Nelson 61,594,280 300,544
Burton S. Stern 61,588,152 306,672
In addition to those elected, the following are directors whose
term of office continued after the Annual Meeting:
Bernard Cammarata
Phyllis B. Davis
Stanley H. Feldberg
Arthur F. Loewy
Robert F. Shapiro
Willow B. Shire
Fletcher H. Wiley
Abraham Zaleznik
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 29, 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 thereunto duly authorized.
THE TJX COMPANIES, INC.
(Registrant)
Date: June 7, 1995
/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
COMPUTATION OF NET INCOME PER COMMON SHARE
(UNAUDITED)
DOLLARS IN THOUSANDS
Thirteen Weeks Ended
April 29, April 30,
1995 1994
The computation of net income available and
adjusted shares outstanding follows:
Net income $ 8,065 $19,369
Less:
Preferred stock dividends (1,789) (1,789)
Net income used for primary and fully
diluted computation $ 6,276 $17,580
Weighted average number of common shares
outstanding 72,402,468 73,461,299
Add:
Assumed exercise of those options that
are common stock equivalents 59,386 615,533
Adjusted shares outstanding, used for primary
and fully diluted computation 72,461,854 74,076,832