TJ Maxx 1998 Annual Report Download

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CONSOLIDATED STATEMENTS OF INCOME
Fiscal Year Ended
January 30, January 31, January 25,
Dollars in Thousands Except Per Share Amounts 1999 1998 1997
(53 weeks)
Net sales $7,949,101 $7,389,069 $6,689,410
Cost of sales, including buying and occupancy costs 5,957,415 5,676,541 5,198,783
Selling, general and administrative expenses 1,285,988 1,185,755 1,087,137
Interest expense, net 1,686 4,502 37,350
Income from continuing operations before
income taxes and extraordinary item 704,012 522,271 366,140
Provision for income taxes 270,810 215,679 152,314
Income from continuing operations
before extraordinary item 433,202 306,592 213,826
Discontinued operations:
Income from discontinued operations, net of income taxes – – 29,361
Gain (loss) on disposal of discontinued
operations, net of income taxes (9,048) – 125,556
Income before extraordinary item 424,154 306,592 368,743
Extraordinary (charge), net of income taxes – (1,777) (5,620)
Net income 424,154 304,815 363,123
Preferred stock dividends 3,523 11,668 13,741
Net income available to common shareholders $ 420,631 $ 293,147 $ 349,382
Basic earnings per share:
Income from continuing operations
before extraordinary item $1.35 $0.92 $ .66
Net income $1.32 $0.91 $1.16
Weighted average common shares — basic 318,073,081 321,474,046 300,926,904
Diluted earnings per share:
Income from continuing operations
before extraordinary item $1.29 $0.88 $ .61
Net income $1.27 $0.87 $1.04
Weighted average common shares — diluted 334,647,950 349,612,184 350,650,100
Cash dividends per share $ .12 $0.10 $ .07
The accompanying notes are an integral part of the financial statements.
The TJX Companies, Inc.
2

Table of contents

  • Page 1
    ... (loss) on disposal of discontinued operations, net of incom e taxes Incom e before extraordinary item Extraordinary (charge), net of incom e taxes Net incom e Preferred stock dividends Net incom e available to com m on shareholders Basic earnings per share: Incom e from continuing operations before...

  • Page 2
    ... par value $1, issued and outstanding cum ulative convertible stock of 727,300 shares of 7% Series E at January 31, 1998 Com m on stock, authorized 600,000,000 shares, par value $1, issued and outstanding 322,140,770 and 159,901,247 shares Additional paid-in capital Accum ulated other com prehensive...

  • Page 3
    ...,320 Principal paym ents on long-term debt Prepaym ent of long-term debt Proceeds from sale and issuance of com m on stock, net Stock repurchased Cash dividends Net cash (used in) financing activities Net cash provided by (used in) continuing operations Net cash provided by discontinued operations...

  • Page 4
    ... Com m on stock Conversion of cum ulative Series E preferred stock into com m on stock Stock repurchased: Preferred Com m on Stock split, two-for-one Issuance of com m on stock under stock incentive plans and related tax benefits Balance, January 31, 1998 Com prehensive incom e: Net incom e Foreign...

  • Page 5
    ... 30, 1999 Fiscal Year Ended January 31, 1998 (53 w eek s) January 25, 1997 Net sales: Off-price fam ily apparel stores Off-price hom e fashion stores Operating incom e (loss): Off-price fam ily apparel stores Off-price hom e fashion stores (1) General corporate expense (2) Goodw ill am ortization...

  • Page 6
    ... Apparel Ltd., acquired by the Com pany effective May 31, 1990. Goodw ill totaled $79.3 m illion, net of am ortization, as of January 30, 1999 and is being am ortized over 40 years. Annual am ortization of goodw ill was $2.6 m illion in fiscal years 1999, 1998 and 1997. Cum ulative am ortization as...

  • Page 7
    ... 17, 1995. The final allocation of the purchase price of Marshalls, pursuant to the purchase accounting m ethod, resulted in $130.0 m illion being allocated to the tradenam e. The value of the tradenam e was determ ined by the discounted present value of assum ed after-tax royalty paym ents, offset...

  • Page 8
    ... the balance of the note was converted into shares of Brylane com m on stock. A portion of the shares were donated to the Com pany's charitable foundation, and the rem aining shares were sold. The net pre-tax im pact of these transactions was im m aterial. The Chadwick's of Boston catalog division...

  • Page 9
    ... debt and for new store and other capital expenditures. On Novem ber 17, 1995, the Com pany entered into an unsecured $875 m illion bank credit agreem ent under w hich the Com pany borrowed $375 m illion on a term loan basis to fund the cash portion of the Marshalls purchase price. During the fourth...

  • Page 10
    ...net deferred costs was $3.2 m illion and $4.3 m illion as of January 30, 1999 and January 31, 1998, respectively. The counterparties to the exchange contracts and swap agreem ents are m ajor international financial institutions. The Com pany periodically m onitors its position and the credit ratings...

  • Page 11
    ... leases, acquired in fiscal 1996, have rem aining term s ranging up to twenty-five years. In addition, the Com pany is generally required to pay insurance, real estate taxes and other operating expenses including, in som e cases, rentals based on a percentage of sales. Follow ing is a schedule of...

  • Page 12
    .... SFAS No. 123 does not apply to awards prior to 1995, and additional awards in future years are anticipated. The follow ing table sum m arizes inform ation about stock options outstanding as of January 30, 1999 (shares in thousands): Range of Exercise Prices O ptions O utstanding W eighted Average...

  • Page 13
    ... replaced the Com pany's retirem ent plan for directors. Each director's deferred stock account has been credited w ith deferred stock to com pensate for the value of such director's accrued retirem ent benefit. Additional share awards valued at $10,000 are issued annually to each eligible director...

  • Page 14
    ... shares of com m on stock (adjusted for stock splits) at a total cost of $350.3 m illion. E a r n i n g s P e r S h a r e : The Com pany calculates earnings per share in accordance w ith SFAS No. 128 w hich requires the presentation of basic and diluted earnings per share. The follow ing schedule...

  • Page 15
    ..., 1999 January 31, 1998 Deferred tax assets: Foreign net operating loss carryforward Reserve for discontinued operations Reserve for closed store and restructuring costs Insurance costs not currently deductible for tax purposes Pension, postretirem ent and em ployee benefits Leases Other Valuation...

  • Page 16
    ...398 (7,937) 75 837 206 $ 9,951 $ 1,405 1,610 - - 338 103 $ 3,456 $ 1,366 1,649 - - 749 - $ 3,764 The net periodic benefit cost for the Com pany's pension and postretirem ent m edical plans for the fiscal year ended January 25, 1997, was $5.9 m illion and $1.8 m illion, respectively. The projected...

  • Page 17
    ...form er Zayre and Hit or Miss properties, w hich is expected to be paid out over the next ten to fifteen years, as leases are settled or term inated. The reserve for store closings and restructurings is prim arily for costs associated w ith the disposition and settlem ent of leases for the T.J. Maxx...

  • Page 18
    ... other costs associated w ith the restructuring plan. Property w rite-offs were the only non-cash charge to the reserve. In connection w ith the Marshalls acquisition, the Com pany also established a reserve for the closing of certain T.J. Maxx stores. The Com pany recorded an initial pre-tax charge...

  • Page 19
    ... 25, 1997 Cash paid for: Interest Incom e taxes Non-cash investing and financing activities: Conversion of cum ulative convertible preferred stock into com m on stock Series A Series C Series D Series E Distribution of two-for-one stock split Note receivable from sale of Chadw ick's of Boston...

  • Page 20
    ... ot resu lt in any ch an ges to th e Com pany's reportable segm en ts or in th e in form ation disclosed abou t its segm en ts. The Com pany has two reportable segm ents. It's off-price fam ily apparel segm ent includes the T.J. Maxx, Marshalls and A.J. Wright dom estic store chains and the Com pany...

  • Page 21
    ... an d train in g of associates, an d th e com m u n ication an d application of form al policies an d procedu res th at are con sisten t w ith h igh stan dards of accou n tin g an d adm in istrative practices. Th e accou n tin g an d con trol system s are con tin u ally review ed, evalu ated an...

  • Page 22
    ...29 $ .88 $ .61 $ .15 (1) $ .26 Dividends per share .12 .10 .07 .12 .14 Balance sheet data: Working capital Total assets Capital expenditures Long-term debt Shareholders' equity Stores in operation at year-end: T.J. Maxx Marshalls Winners Hom eGoods T.K. Maxx A.J. Wright $ 436,259 2,747,846 207,742...

  • Page 23
    ... sales results for fiscal 1999 and 1998 prim arily reflect the m any benefits associated w ith the Marshalls acquisition, along w ith new store grow th. Follow ing the acquisition of Marshalls, the Com pany replaced Marshalls' frequent prom otional activity w ith an everyday low price strategy...

  • Page 24
    ... of net sales were 14.9% in fiscal 1999, 16.1% in fiscal 1998, and 15.8% in fiscal 1997. Strong sales volum e, coupled w ith tight inventory control, resulted in faster inventory turns, all of w hich were favorable to cash flow s and inventory ratios for fiscal 1999 and 1998. Working capital was...

  • Page 25
    ...lease related costs associated w ith the form er Zayre stores. The decrease in the reserve in fiscal 1998 of $5.8 m illion was prim arily for settlem ent costs associated w ith Chadw ick's as well as lease related costs associated w ith the form er Zayre and Hit or Miss locations. The balance in the...

  • Page 26
    ... m on stock. Fiscal 1998 also includes a paym ent by the Com pany, to Brylane, of $33.2 m illion as a final settlem ent of the proceeds from the sale of Chadw ick's. As part of the sale of Chadw ick's, the Com pany retained the consum er credit card receivables of the division as of the closing date...

  • Page 27
    ... ent and distribution, point-of-sale inform ation system s and inventory control; (2) the Com pany's em bedded com puter technologies (so-called "non-IT" system s), such as m aterials handling equipm ent, telephones, elevators, clim ate control devices and building security system s; and (3) the IT...

  • Page 28
    ...w here necessary, contingency planning. With respect to the Company's non-IT systems, the review and assessment phase is substantially complete and the Company has identified and inventoried such technologies. The Company has undertaken a program to modify or replace such technologies where they are...

  • Page 29
    ... related obligations, prim arily for the Com pany's Hit or Miss stores. Net incom e for the third quarter of fiscal 1998 includes an after-tax extraordinary charge of $1.8 m illion for the w rite-off of deferred financing costs associated w ith the early term ination of a revolving credit facility...