-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OrtrwZkv7t1KVjFzd16okwzLmaDPl+eM+Ybh9ej32eJkxllbsetk2/c4wq1JP6c0 65WUTKEtdVimZZ1Ce04Q8A== 0000089498-95-000015.txt : 19951119 0000089498-95-000015.hdr.sgml : 19951119 ACCESSION NUMBER: 0000089498-95-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951114 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SHAW INDUSTRIES INC CENTRAL INDEX KEY: 0000089498 STANDARD INDUSTRIAL CLASSIFICATION: CARPETS AND RUGS [2273] IRS NUMBER: 581032521 STATE OF INCORPORATION: GA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06853 FILM NUMBER: 95591324 BUSINESS ADDRESS: STREET 1: 616 E WALNUT AVE STREET 2: P O DRAWER 2128 CITY: DALTON STATE: GA ZIP: 30720 BUSINESS PHONE: 7062783812 MAIL ADDRESS: STREET 1: 616 E WALNUT AVE STREET 2: P O DRAWER 2128 CITY: DALTON STATE: GA ZIP: 30720 10-Q 1 FORM 10-Q, THIRD QUARTER ENDED 9/30/95 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------- FORM 10-Q (Mark One) |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1995 OR |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from________________________to________________________ Commission file number 1-6853 SHAW INDUSTRIES, INC. (Exact name of registrant as specified in its charter) GEORGIA 58-1032521 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 616 E. WALNUT AVENUE, DALTON, GEORGIA 30720 (Address of principal executive offices) (Zip Code) (706) 278-3812 Registrant's telephone number, including area code NOT APPLICABLE Former name, former address and former fiscal year, if changed since last report 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 ______. APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: November 6, 1995 - 135,892,902 shares SHAW INDUSTRIES, INC. INDEX PART I - FINANCIAL INFORMATION PAGE NUMBERS Item 1. Financial Statements Consolidated Balance Sheets - September 30, 1995 and December 31, 1994 3-4 Consolidated Statements of Income and Retained Earnings - For the Three Months Ended September 30, 1995 and October 1, 1994 5 Consolidated Statements of Income and Retained Earnings - For the Nine Months Ended September 30, 1995 and October 1, 1994 6 Consolidated Statements of Cash Flows - For the Nine Months Ended September 30, 1995 and October 1, 1994 7 Notes to Consolidated Financial Statements 8-9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10-12 PART II - OTHER INFORMATION 13 SIGNATURES 14 PART 1 - ITEM ONE - FINANCIAL INFORMATION SHAW INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) ASSETS September 30, December 31, 1995 1994 (UNAUDITED) (AUDITED) CURRENT ASSETS: ---------- ---------- Cash and cash equivalents $ 42,895 $ 34,365 Accounts receivable, less ---------- ---------- allowance for doubtful accounts and discounts of $16,736 and $17,925 380,752 350,128 ---------- ---------- Inventories - Raw materials 241,111 236,579 Work-in-process 33,970 22,902 Finished goods 251,006 238,670 ---------- ---------- 526,087 498,151 ---------- ---------- Other current assets 38,347 39,585 ---------- ---------- TOTAL CURRENT ASSETS 988,081 922,229 ---------- ---------- PROPERTY, PLANT AND EQUIPMENT, at cost: Land and land improvements 27,227 29,329 Buildings and leasehold improvements 269,458 258,119 Machinery and equipment 902,300 842,975 Construction in progress 23,952 44,336 ---------- ---------- 1,222,937 1,174,759 Less - Accumulated depreciation and amortization (583,477) (518,581) ---------- ---------- 639,460 656,178 ---------- ---------- GOODWILL, NET 104,245 106,960 ---------- ---------- INVESTMENT IN JOINT VENTURE 15,139 - ---------- ---------- OTHER ASSETS 8,869 12,011 ---------- ---------- TOTAL ASSETS $1,755,794 $1,697,378 ========== ========== LIABILITIES AND SHAREHOLDERS' INVESTMENT September 30, December 31, 1995 1994 (UNAUDITED) (AUDITED) CURRENT LIABILITIES: Current maturities of long-term debt $ 4,205 $ 40,898 Accounts payable 177,045 150,023 Accrued liabilities 155,574 113,970 ---------- ---------- TOTAL CURRENT LIABILITIES 336,824 304,891 ---------- ---------- LONG-TERM DEBT, less current maturities 657,612 612,061 ---------- ---------- DEFERRED INCOME TAXES 47,671 45,972 ---------- ---------- OTHER LIABILITIES 12,711 21,429 ---------- ---------- SHAREHOLDERS' INVESTMENT: Common stock, no par, $1.11 stated value, authorized 500,000,000 shares; issued and outstanding: 135,879,602 at September 30, 1995 and 137,017,402 shares at December 150,827 152,090 31, 1994 Paid-in capital 101,212 118,635 Cumulative translation adjustment 2,407 (1,815) Retained earnings 446,530 444,115 ---------- ---------- TOTAL SHAREHOLDERS' INVESTMENT 700,976 713,025 ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT $1,755,794 $1,697,378 ========== ==========
The accompanying notes are an integral part of these consolidated financial statements. SHAW INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) THREE MONTHS THREE MONTHS ENDED ENDED September 30, October 1, 1995 1994 -------- -------- NET SALES $748,364 $734,100 COSTS AND EXPENSES: Cost of sales 605,648 577,220 Selling, general and administrative 93,304 95,246 Nonrecurring plant shutdown costs 2,607 - Interest expense, net 10,522 8,074 Other (income) expense, net (578) (471) -------- -------- INCOME BEFORE INCOME TAXES 36,861 54,031 PROVISION FOR INCOME TAXES 15,196 20,869 INCOME BEFORE EQUITY IN INCOME OF JOINT -------- -------- VENTURE 21,665 33,162 EQUITY IN INCOME OF JOINT VENTURE 240 - -------- -------- NET INCOME $ 21,905 $ 33,162 ======== ======== DIVIDENDS PAID PER COMMON SHARE $ 0.075 $ 0.055 ======== ======== EARNINGS PER COMMON SHARE: Primary and fully diluted basis $ 0.16 $ 0.24 ======== ======== RETAINED EARNINGS: Beginning of period $434,800 $398,212 Add - net income 21,905 33,162 Deduct - dividends paid (10,175) (7,655) -------- -------- End of period $446,530 $423,719 ======== ======== The accompanying notes are an integral part of these consolidated financial statements.
SHAW INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) NINE MONTHS NINE MONTHS ENDED ENDED September 30, October 1, 1995 1994 ---------- ---------- NET SALES $2,163,240 $2,076,445 Cost of sales 1,758,928 1,627,441 Selling, general and administrative 289,787 266,450 Nonrecurring plant shutdown costs 8,008 - Interest expense, net 32,358 21,253 Other (income) expense, net (1,442) (2,565) ---------- ---------- INCOME BEFORE INCOME TAXES 75,601 163,866 PROVISION FOR INCOME TAXES 31,401 61,537 INCOME BEFORE EQUITY IN INCOME OF JOINT ---------- ---------- VENTURE, EXTRAORDINARY LOSS AND ACCOUNTING CHANGE 44,200 102,329 EQUITY IN INCOME OF JOINT VENTURE 855 - INCOME BEFORE EXTRAORDINARY LOSS AND ---------- ---------- ACCOUNTING CHANGE 45,055 102,329 EXTRAORDINARY LOSS, NET - (3,363) CUMULATIVE EFFECT OF ACCOUNTING CHANGE, NET (12,077) - ---------- ---------- NET INCOME $ 32,978 $ 98,966 ========== ========== DIVIDENDS PAID PER COMMON SHARE $ 0.225 $ 0.165 ========== ========== EARNINGS PER COMMON SHARE: Before extraordinary loss and accounting change $ 0.33 $ 0.71 Extraordinary loss - (0.02) Cumulative effect of accounting change (0.09) - ---------- ---------- Net income $ 0.24 $ 0.69 ========== ========== RETAINED EARNINGS: Beginning of period $ 444,115 $ 348,234 Add - net income 32,978 98,966 Deduct - dividends paid (30,563) (23,481) ---------- ---------- End of period $ 446,530 $ 423,719 ========== ========== The accompanying notes are an integral part of these consolidated financial statements.
SHAW INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS NINE MONTHS NINE MONTHS (UNAUDITED AND IN THOUSANDS) ENDED ENDED September 30, October 1, 1995 1994 --------- --------- OPERATING ACTIVITIES: Net income $32,978 $98,966 Adjustments to reconcile net income to net --------- --------- cash provided by operating activities: Depreciation and amortization 70,042 63,118 Provision for doubtful accounts 5,740 10,758 Deferred income taxes 1,699 8,684 Cumulative effect of accounting change 12,077 - Extraordinary loss - 3,363 Other, net 533 (3,518) Changes in operating assets and liabilities, net of acquisition: Accounts receivable (53,557) (55,086) Inventories (34,419) (80,404) Other current assets 10,996 1,942 Accounts payable 29,820 16,899 Accrued liabilities 44,488 11,923 --------- --------- Total adjustments 87,419 (22,321) --------- --------- Net cash provided by operating activities 120,397 76,645 --------- --------- INVESTING ACTIVITIES: Additions to property, plant and equipment (53,948) (152,069) Acquisition of business assets (29,503) - Investment in joint venture (3,500) (10,001) Deconsolidation of joint venture (3,828) - --------- --------- Net cash used in investing activities (90,779) (162,070) FINANCING ACTIVITIES: --------- --------- Increase in long-term debt 28,161 241,025 Decrease in short-term notes payable - (20,000) Dividends paid (30,563) (23,481) Purchase and retirement of common stock (20,590) (81,483) Proceeds from sale of common stock 1,904 1,827 Net cash (used)provided by --------- --------- financing activities (21,088) 117,888 --------- --------- NET INCREASE IN CASH AND CASH EQUIVALENTS 8,530 32,463 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 34,365 32,739 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 42,895 $ 65,202 ========= ========= The accompanying notes are an integral part of these consolidated financial statements.
SHAW INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) --------------------------------------------------------------- 1. Basis of Presentation The financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information not misleading. These financial statements should be read in conjunction with the financial statements and related notes contained in the Company's 1994 Annual Report on Form 10-K. In the opinion of management, the accompanying unaudited financial statements contain all adjustments necessary to present fairly the Company's financial position, results of operations and cash flows at the dates and for the periods presented. Interim results of operations are not necessarily indicative of the results to be expected for a full year. Certain prior period amounts have been reclassified to conform with the current period presentation. 2. Inventories The Company uses the last-in, first-out (LIFO) method of valuing substantially all of its domestic inventories. If LIFO inventories were valued at current costs, the inventories would have been $5,312,000 lower at September 30, 1995 and $5,598,000 lower at December 31, 1994. The Company computes the LIFO inventory amount on a quarterly basis after considering anticipated prices, quantities and product mix as of period-end. The Company's foreign inventories are valued at the lower of first-in, first-out (FIFO) cost or market. 3. Acquisitions On January 9, 1995, the Company acquired through its wholly owned subsidiary, Carpets International (U.K.) Plc, substantially all of the operating assets of the Carpets Division of Coats Viyella Plc for $29,503,000. The acquisition was accounted for as a purchase, and accordingly, the purchase price has been allocated to the assets acquired and liabilities assumed based on management's estimate of their fair values as of the acquisition date. On May 31, 1994, the Company formed a joint venture (The "Terza Joint Venture") with Grupo Industrial Alfa, S.A. de C.V. of Monterrey, Mexico, for the manufacture, distribution and marketing of carpets, rugs and related products primarily in Mexico and South America. The Company originally acquired a 50.3 percent interest in the Terza Joint Venture for $14,050,000, and accordingly, the joint venture's financial statements were consolidated with the Company's financial statements at December 31, 1994 and for the period from the acquisition date (May 31, 1994) to December 31, 1994. Effective January 1, 1995, the Company reduced its interest in the Terza Joint Venture from 50.3 percent to 49.8 percent and subsequently received an investment reimbursement of $550,000. As a result, the Company's investment in the Terza Joint Venture is being accounted for using the equity method. The deconsolidation of the Terza Joint Venture had an insignificant effect on the Company's consolidated total assets and net sales as of September 30, 1995 and for the three and nine months then ended. 4. Accounting Change Effective January 1, 1995, the Company changed its method of accounting for sample costs from expensing sample costs that exceed the estimated net realizable value when shipped to expensing that portion of sample costs as they are produced. This change was made in recognition of an increasing number of samples placed with customers that do not result in future sales and to better control the sample order process. The cumulative effect of the change was to decrease net income by $12,077,000 ($.09 per share), net of income taxes. 5. Nonrecurring Plant Shutdown Costs During August 1995, the Company closed a yarn spinning mill at its Australian subsidiary and recorded a pretax charge of $2,607,000. The charge primarily related to termination benefits for 127 employees and write-downs of property, plant and equipment to net realizable value. The operations of this plant have been phased out, and the Company expects most of the shutdown costs to be incurred prior to the end of fiscal 1995. During June 1995, the Company made the decision to close two of its domestic yarn spinning mills and recorded a pretax charge of $5,401,000. The charge primarily related to termination benefits for 591 employees and write-downs of property, plant and equipment to net realizable value. The operations of these two plants have been phased out, and the Company expects most of the shutdown costs to be incurred prior to the end of fiscal 1995. 6. Extraordinary Loss During June 1994, the Company elected to prepay all of its outstanding long-term notes payable with the proceeds from a new credit facility at lower interest rates. The early extinguishment of the notes payable resulted in an extraordinary loss of $3,363,000 ($0.02 per share), net of income taxes. SHAW INDUSTRIES, INC. AND SUBSIDIARIES ITEM TWO-MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL The Company's business, as well as the U.S. carpet industry in general, is cyclical in nature and is significantly affected by general economic conditions. The level of carpet sales tends to reflect fluctuations in consumer spending for durable goods and, to a lesser extent, fluctuations in interest rates and new housing starts. The Company's international operations can also be impacted by the economic climates in the markets in which they operate (primarily the United Kingdom, Australia and Mexico). The Company increased its operations in the U.K. in January 1995 by acquiring substantially all of the operating assets of the Carpets Division of Coats Viyella Plc (the "CV Acquisition") for approximately $29.5 million. Effective January 1, 1995, the Company reduced its interest in the Terza Joint Venture from 50.3 percent to 49.8 percent (see Note 3 of Notes to Consolidated Financial Statements). As a result, the Company's investment in the Terza Joint Venture is being accounted for using the equity method. The deconsolidation of the Terza Joint Venture had an insignificant effect on the Company's consolidated financial statements for the three and nine months ended September 30, 1995. LIQUIDITY AND CAPITAL RESOURCES At September 30, 1995, the Company had working capital of $651.3 million, an increase of $34.0 million, or 5.5 percent, over working capital of $617.3 million at December 31, 1994. Cash and cash equivalents increased $8.5 million from $34.4 million at December 31, 1994 to $42.9 million at September 30, 1995. Cash flow provided by operating activities was $120.4 million for the nine months ended September 30, 1995 compared to $76.6 million in 1994. The increase in operating cash flow was primarily due to a smaller increase in inventories and larger increases in accounts payable and accrued liabilities than in the comparable period of the prior year. These items were partially offset by lower net income. Cash used in investing activities for the 1995 period consisted of additions to property, plant and equipment of $53.9 million, the CV Acquisition for $29.5 million, and joint venture uses of $7.3 million. Cash used by financing activities during 1995 consisted of an increase in long-term debt of $28.2 million offset by cash dividends of $30.6 million and stock repurchases of $20.6 million. The Company has continued to maintain a strong working capital position. Effective use of capital and the Company's ability to generate cash flow from operations has enabled it to invest in technologies which reduce production costs, generate operating margins that have historically exceeded industry averages and enabled the Company to be a preeminent force in the carpet industry. Capital expenditures for property, plant and equipment necessary to maintain the Company's facilities in a modern state-of-the-art condition were $53.9 million, excluding the CV Acquisition, for the first nine months of 1995. Management anticipates total capital expenditures and capitalized lease obligations in the range of $75 to $80 million during the 1995 fiscal year in order to maintain its facilities and to expand and upgrade its manufacturing and distribution equipment to meet anticipated increases in sales volume and to improve efficiency. The Company's primary source of financing is an unsecured revolving credit agreement with a banking syndicate which provides for borrowings of up to $620.0 million. Interest on borrowings under this facility is currently based on LIBOR and approximated 6.0% at September 30, 1995. At September 30, 1995, borrowings outstanding under this credit facility were $544.0 million. Of the total commitment, $600.0 million matures in November 1997 and $20.0 million matures in December 1995. In addition, the Company's two foreign subsidiaries have available credit facilities in the U.K. and Australia, of which $31.6 million and $62.1 million, respectively, were outstanding at September 30, 1995. The Company believes that available borrowings under its existing credit agreements, available cash and internally generated funds will be sufficient to support its working capital, capital expenditures and debt service requirements for the foreseeable future. In addition, the Company believes it could expand its revolving credit and long-term bank facilities, if necessary. RESULTS OF OPERATIONS Three Months Ended September 30, 1995 Compared To Three Months Ended October 1, 1994 Net sales increased $14.3 million, or 1.9 percent, to $748.4 million in the third quarter of 1995. The increase was primarily attributable to incremental net sales of $13.6 million related to the CV Acquisition, offset by declines in net sales at the Company's other foreign operations. Gross margin as a percent of net sales decreased 2.3 percent to 19.1 percent for the third quarter of 1995, compared to 21.4 percent in 1994. The decline in the gross margin percentage was primarily due to increased raw materials costs, competitive price pressures, and operating inefficiencies at the Company's international operations due to lower production volumes. Selling, general and administrative expenses for the third quarter of 1995 were $93.3 million (12.5 percent of net sales), compared to $95.2 million (13.0 percent of net sales) in the comparable period of 1994. The marginal decrease (.5 percent) as a percent of net sales was primarily due to lower sample and transportation costs. The Company recorded nonrecurring plant shutdown costs of $2.6 million in the third quarter of 1995 related to the closure of a yarn spinning mill at its Australian subsidiary. Interest expense, net, increased $2.4 million, or 30.3 percent, as a result of significantly higher borrowings due primarily to stock repurchases and the CV Acquisition which were offset somewhat by lower average interest rates on the Company's borrowings. The effective income tax rate for the third quarter of 1995 was 41.2 percent compared to 38.6 percent in 1994, and the increase was primarily due to a lower effective tax benefit rate from foreign operating losses in 1995. The Company recorded equity in income of joint venture of $240,000 during the third quarter of 1995 related to its investment in the Terza Joint Venture. Nine Months Ended September 30, 1995 Compared To Nine Months Ended October 1, 1994 Net sales increased $86.8 million, or 4.2 percent, to $2,163.2 million in the first nine months of 1995 compared to the same period in 1994. The increase was primarily attributable to incremental net sales of $92.4 million related to the CV Acquisition and an increase in domestic net sales of $26.0 million, offset in part by sales declines at the Company's other foreign operations. Gross margin as a percent of net sales decreased 2.9 percent to 18.7 percent for the first nine months of 1995, compared to 21.6 percent in 1994. The decline in the gross margin percentage was primarily due to increased raw materials costs, competitive price pressures, and operating inefficiencies at the Company's international operations due to lower production volumes and integration of the CV Acquisition. Selling, general and administrative expenses for the first nine months of 1995 were $289.8 million (13.4 percent of net sales) compared to $266.5 million (12.8 percent of net sales) in the comparable period of 1994. The .6 percent increase as a percent of net sales was primarily due to higher selling expenses related to product promotion and samples. The Company has recorded nonrecurring charges for plant shutdown costs of $8.0 million during the 1995 period. Interest expense, net, increased $11.1 million, or 52.3 percent, as a result of significantly higher borrowings due primarily to stock repurchases and international acquisitions which were offset somewhat by lower average interest rates on the Company's borrowings. The effective income tax rate for the first nine months of 1995 was 41.5 percent, compared to 37.6 percent in 1994, and the increase was due to a lower effective tax benefit rate from foreign operating losses in 1995 and deferred tax adjustments in the 1994 period which reduced the effective rate in that period below statutory rates. Equity in income of the Terza Joint Venture was $855,000 for the first nine months of 1995. During the third quarter of 1994, the Company recorded an extraordinary loss of $3.4 million, net of income taxes, related to the early repayment of certain long-term notes payable (see Note 6 of Notes to Consolidated Financial Statements). Effective January 1, 1995, the Company changed its method of accounting for sample costs from expensing sample costs that exceed the estimated net realizable value when shipped to expensing that portion of sample costs as they are produced (see Note 4 of Notes to Consolidated Financial Statements). The cumulative effect of the change was to decrease net income for the first nine months of 1995 by $12.1 million ($.09 per share), net of income taxes. NONRECURRING PLANT SHUTDOWN COSTS During August 1995, the Company closed a yarn spinning mill at its Australian subsidiary and recorded a pretax charge of $2.6 million. The charge primarily related to termination benefits for 127 employees and write- downs of property, plant and equipment to net realizable value. The operations of this plant have been phased out, and the Company expects most of the shutdown costs to be incurred prior to the end of fiscal 1995. During June 1995, the Company announced plans to close two of its domestic yarn spinning mills. As a result, the Company recorded a pretax charge of $5.4 million related primarily to termination benefits for 591 employees and write-downs of property, plant and equipment to net realizable value. The production of these two mills will be consolidated with the Company's other yarn spinning facilities. The operations of these mills have been phased out, and the Company did not experience any disruption to its consolidated operations. The Company expects to realize future savings as a result of the closure and consolidation of these facilities. FOREIGN OPERATIONS Beginning in early 1993 and continuing into 1995, the Company has expanded its operations through acquisitions in Australia, the United Kingdom and Mexico. The Company's primary foreign operations are conducted through its U.K. and Australian subsidiaries, where the functional currencies are British pounds and Australian dollars, respectively. Fluctuations in the value of foreign currencies create exposures which can impact the Company's operating results. The Company may employ foreign currency forward exchange contracts when, in the normal course of business, they are determined to effectively manage and reduce such exposure. The Company does not enter into foreign currency forward exchange contracts for speculative trading purposes. PART II - OTHER INFORMATION ITEM ONE - LEGAL PROCEEDINGS From time to time, the Company is subject to claims and suits arising in the course of its business. The Company is a defendant in certain litigation alleging personal injury resulting from personal exposure to volatile organic compounds found in carpet produced by the Company. The complaints seek injunctive relief and unspecified money damages on all claims. The Company has denied any liability. The Company believes that it has meritorious defenses and that the litigation will not have a material adverse effect on the Company's financial condition or results of operations. In June 1994, the Company and several other carpet manufacturers received grand jury subpoenas from the Antitrust Division of the United States Department of Justice relating to an investigation of the industry. The Company believes that, once this investigation is completed, it will not have a material adverse effect on the Company's financial condition or results of operations. ITEM TWO - CHANGES IN SECURITIES None ITEM THREE - DEFAULTS UPON SENIOR SECURITIES None ITEM FOUR - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM FIVE - OTHER INFORMATION None ITEM SIX - EXHIBITS AND REPORTS ON FORM 8-K (A) Exhibits 11.0 - Statement re: Computation of Per Share Earnings (B) No reports on Form 8-K have been filed during the fiscal quarter ended September 30, 1995. SIGNATURES 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. SHAW INDUSTRIES, INC. (The Registrant) DATE: November 14, 1995 /s/ Robert E. Shaw -------------------------------------- Robert E. Shaw Chairman of the Board, Chief Executive Officer and President DATE: November 14, 1995 /s/ William C. Lusk, Jr. ----------------------------------- William C. Lusk, Jr. Senior Vice President and Treasurer (Principal Financial Officer) EX-11 2 EXHIBIT 11, 3RD QUARTER 1995 FORM 10-Q EXHIBIT 11.0 SHAW INDUSTRIES, INC. AND SUBSIDIARIES STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS (1) (In Thousands, Except Per Share Data) (Unaudited) Three Months Ended Nine Months Ended Sept. 30, Oct. 1, Sept. 30, Oct. 1, PRIMARY: 1995 1994 1995 1994 ------- ------- ------- ------- Weighted average common shares outstanding 135,817 139,432 135,860 142,272 Additional shares assuming exercise of stock options 574 860 529 1,177 ------- ------- ------- ------- Weighted average common and common equivalent shares outstanding 136,391 140,292 136,389 143,449 ======= ======= ======= ======= Income before extraordinary loss and accounting change $21,905 $33,162 $45,055 $102,329 Extraordinary loss, net 0 0 0 (3,363) Cumulative effect of accounting change, net 0 0 (12,077) 0 ------- ------- ------- ------- Net income $21,905 $33,162 $32,978 $98,966 ======= ======= ======= ======= Earnings per common share before extraordinary loss and accounting change $0.16 $0.24 $0.33 $0.71 Extraordinary loss 0.00 0.00 0.00 (0.02) Cumulative effect of accounting change 0.00 0.00 (0.09) 0.00 ------- ------- ------- ------- Net income $0.16 $0.24 $0.24 $0.69 ======= ======= ======= ======= FULLY DILUTED: Weighted average common shares outstanding 135,817 139,432 135,860 142,272 Additional shares assuming exercise of stock options (2) 574 860 529 1,177 ------- ------- ------- ------- Weighted average common and common equivalent shares outstanding 136,391 140,292 136,389 143,449 ======= ======= ======= ======= Income before extraordinary loss and accounting change $21,905 $33,162 $45,055 $102,329 Extraordinary loss, net 0 0 0 (3,363) Cumulative effect of accounting change, net 0 0 (12,077) 0 ------- ------- ------- ------- Net income $21,905 $33,162 $32,978 $98,966 ======= ======= ======= ======= Earnings per common share before extraordinary loss and accounting change $0.16 $0.24 $0.33 $0.71 Extraordinary loss 0.00 0.00 0.00 (0.02) Cumulative effect of accounting change 0.00 0.00 (0.09) 0.00 ------- ------- ------- ------- Net income $0.16 $0.24 $0.24 $0.69 ======= ======= ======= ======= (1) All numbers of shares in this exhibit are weighted on the basis of the number of days the shares were outstanding or assumed to be outstanding during each period. (2) Based on the treasury stock method using the higher of the average or period-end market price.
EX-27 3 FDS --
5 This schedule contains summary information extracted from the consolidated balance sheet of Shaw Industries, Inc. and subsidiaries as of September 30, 1995 and the related consolidated statements of income and cash flows for the quarter ended September 30, 1995 and is qualified in its entirety by reference to such financial statements. 3-MOS DEC-30-1995 SEP-30-1995 42,895,000 0 380,752,000 16,736,000 526,087,000 988,081,000 1,222,937,000 583,477,000 1,755,794,000 336,824,000 0 150,827,000 0 0 550,149,000 1,755,794,000 748,364,000 748,364,000 605,648,000 605,648,000 0 2,043,000 10,522,000 36,861,000 15,196,000 21,665,000 0 0 0 21,905,000 0.16 0.16
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