UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 1997
Commission file Number 1-9457
SHELBY WILLIAMS INDUSTRIES, INC.
(Exact name of registrant as specified in its charter.)
Delaware 62-0974443
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11-111 Merchandise Mart
Chicago, Illinois 60654
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(312) 527-3593
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 of 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 [ ]
At July 28, 1997, there were 9,347,563 shares of registrant's
common stock outstanding.
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PART I - FINANCIAL INFORMATION
SHELBY WILLIAMS INDUSTRIES, INC.
Consolidated Statements of Income
Three Months and Six Months Ended
June 30, 1997 and 1996
(Unaudited)
(Amounts in thousands, except per share data)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
________ ______ _______ ______
<S> <C> <C> <C> <C>
Net sales $45,439 $43,548 $87,258 $84,282
Cost of goods sold 34,947 33,654 67,297 65,297
______ ______ ______ ______
Gross profit 10,492 9,894 19,961 18,985
Selling, general and
administrative
expenses 6,516 6,655 12,593 12,907
______ _____ ______ ______
3,976 3,239 7,368 6,078
Other deductions
(income):
Interest expense 160 273 317 554
Interest and dividend
income (182) - (208) (2)
Miscellaneous expense
(income) (104) (23) (75) 12
______ _____ ______ _____
(126) 250 34 564
______ _____ ______ _____
Income before income
taxes 4,102 2,989 7,334 5,514
______ _____ ______ _____
Income taxes:
Current 1,336 897 2,343 1,618
Deferred 59 60 118 119
______ _____ ______ _____
1,395 957 2,461 1,737
______ _____ ______ _____
Net income $ 2,707 $2,032 $ 4,873 $ 3,777
====== ====== ====== =====
Net income per share $ .29 $ .23 $ .54 $ .43
====== ====== ====== =====
Weighted average number
of common shares
outstanding 9,353 8,818 9,048 8,851
====== ====== ====== =====
<FN>
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<TABLE>
SHELBY WILLIAMS INDUSTRIES, INC.
Consolidated Balance Sheets
June 30, 1997 and December 31, 1996
(Unaudited)
(Amounts in thousands, except per share data)
<CAPTION>
June 30, 1997 December 31, 1996
_______________ __________________
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 9,467 $ 1,039
Accounts receivable, less
allowance for doubtful
accounts of $428 at
June 30, 1997 and
$402 at December 31,
1996 25,856 25,224
Inventories:
Raw materials 10,446 11,615
Work in process 2,930 4,414
Finished goods 13,190 11,194
______ ______
26,566 27,223
Prepaid expense 3,155 3,691
______ ______
Total current assets 65,044 57,177
Excess of cost over net assets
of acquired company 164 169
Property, plant and equipment
at cost:
Land and land improvements 2,941 2,930
Buildings and leasehold
improvements 23,010 22,969
Machinery and equipment 24,410 24,207
Construction in progress 539 -
______ ______
50,900 50,106
Less accumulated
depreciation and
amortization 25,057 24,145
______ ______
25,843 25,961
Other assets 1,397 1,371
______ ______
$92,448 $84,678
====== ======
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<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Accounts payable $ 6,451 $ 9,002
Customer deposits on
orders in process 5,114 3,690
Accrued liabilities 3,445 4,172
Income taxes 424 1,707
Current portion of long-
term debt 3,000 1,000
______ ______
Total current liabilities 18,434 19,571
Long-term debt 5,000 7,000
Deferred income taxes 2,255 2,137
Stockholder's equity:
Common stock, $.05 par value;
authorized 30,000 shares;
issued 11,848 shares
(1996-11,814 shares) 592 591
Capital in excess of par value 9,837 8,143
Retained earnings 72,596 69,172
Pension liability adjustment (789) (789)
______ ______
82,236 77,117
Less common stock held in
treasury; 2,500 shares
at cost (1996-3,047) 15,477 21,147
______ ______
Total stockholders' equity 66,759 55,970
$92,448 $84,678
====== ======
<FN>
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<TABLE>
SHELBY WILLIAMS INDUSTRIES, INC.
Consolidated Statements of Cash Flows
Six Months Ended June 30, 1997 and 1996
(Unaudited)
(Amounts in thousands)
<CAPTION>
1997 1996
___________________________
<S> <C> <C>
Cash flows from operating activities:
Net income $4,873 $3,777
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amoritzation 1,310 1,395
Provision for losses on accounts
receivable 43 31
Change in assets and liabilities:
Accounts receivable (675) (56)
Inventories 657 (1,694)
Prepaid expenses 536 (19)
Accounts payable and accrued
liabilities (1,854) 2,337
Income taxes payable (1,283) (596)
Increase in deferred taxes 118 119
Other (26) 22
_____ _____
Net cash provided by operating
activities 3,699 5,316
_____ _____
Cash flows from investing activities:
Proceeds from disposal of property,
plant and equipment 140 5
Capital expenditures (1,327) (631)
_____ _____
Net cash used by investing activities (1,187) (626)
_____ _____
Cash flows from financing activities:
Sale of treasury stock at public
offering 7,953 -
Net repayment of short-term borrowing - (1,200)
Principal payments of long-term debt - (28)
Sale of common stock under stock
option plan 296 -
Purchase of common stock for the
treasury (884) (1,614)
Dividends declared and paid (1,449) (1,240)
_____ _____
Net cash provided (used) by financing
activities 5,916 (4,082)
_____ _____
Net increase in cash and cash equivalents 8,428 608
Cash and cash equivalents at beginning
of period 1,039 2,376
_____ _____
Cash and cash equivalents at end of
period $9,467 $2,984
===== =====
Supplemental cash flow information:
Cash paid during the period for:
Interest $ 317 $ 553
Income taxes 3,626 1,434
_____ _____
$3,943 $1,987
===== =====
<FN>
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SHELBY WILLIAMS INDUSTRIES, INC.
June 30, 1997
Item 1. Financial Statements
The attached unaudited statements include all adjustments which are,
in the opinion of management, necessary to a fair statement of the results
for the interim periods presented. All such adjustments are of a normal recur-
ring nature. The statements are as follows:
Consolidated Statements of Income for three months and for six months
ended June 30, 1997 and 1996.
Consolidated Balance Sheets at June 30, 1997 and December 31,
1996.
Consolidated Statements of Cash Flows for six months ended
June 30, 1997 and 1996.
Item 2. Managements' Discussion and Analysis of Financial Condition
and Results of Operations
Material Changes in Financial Condition
On April 2, 1997, the Company sold 569,000 shares of its common
stock as part of a secondary offering. The underwriters of this public
offering purchased, from the Company, an additional 50,000 shares of the
previously granted over-allotment option, raising the total sold by the
Company, in April, 1997, to 619,000 shares for $8.0 million, contributing to
its strong cash position at June 30, 1997.
During the second quarter of 1997, the Company purchased 15,000
shares of its common stock for $176,000 at an average repurchase price
of $11.50 per share. These repurchases were made to use in connection
with the Company's employee benefit plans and for other proper corporate
purposes. The Board of Directors has authorized repurchase of an additional
451,000 shares. The Company may purchase these shares from time to time
in the future, with purchase decisions to be dependent on market conditions
and other factors, in the open market or privately negotiated transactions.
At June 30, 1997, the Company had long term debt of $5 million,
excluding $3.0 million current portion, and no short term debt, reflecting
a reduction of $5.6 million in outstanding indebtedness during the past
one-year period. Capital expenditures during the six months ended June 30,
1997, amounted to $1.3 million, of which $400,000 is construction in progress
for installation of a state-of-art powder coating system, planned to be
completed in the next six months at a total cost of $2.0 million, and the
balance principally for automated machinery. The Company also plans to expend
approximately $3.0 million within the next 18 months for a new regional
manufacturing facility. Book value per share at June 30, 1997 was $7.14
versus $6.01 a year earlier. The current ratio at June 30, 1997 stood at
3.5-to-one, up from 2.2-to-one at June 30, 1996.
Material Changes in Results of Operations
Sales for the quarter ended June 30, 1997 totaled $45.4 million
compared to $41.2 million in the second quarter of 1996 excluding sales of
the divested Preview division. This increase was due almost entirely to
volume increases mainly attributable to continued strong hotel refurbishing
which has continued over the last several quarters. Net income totaled $2.7
million, a 33.2 percent increase over $2.0 million in the second quarter of
1996. Earnings per share of $0.29 for the second quarter increased 26.1
percent from $0.23 in the same period in 1996. Pre-tax income increased
37.2 percent over the same quarter last year. The Company's gross margin
widened to 23.1 percent from 22.7 percent, primarily a function of increased
volume, helping the Company build its operating margin to 8.7 percent from
7.4 percent.
Sales for the first half of 1997 increased 9.5 percent to $87.3
million from $79.7 million in the same period of 1996 excluding sales of
the divested division. Net income was $4.9 million, a 29.0 percent increase
over $3.8 million, while earnings per share of $0.54 for the first six months
of 1997 increased 25.6 percent from $0.43 in the same period of 1996. Pre-tax
earnings increased 33.0 percent in the first six months over the same period
a year ago. Gross margin for the first half increased to 22.9 percent of
sales compared to 22.5 percent in the first six months of 1996.
At the beginning of July 1997 production, after a one-week vacation
shut-down through Independence Day, the Company's backlog of unshipped orders
was approximately $35.6 million compared to $34.9 million a year earlier.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the Company's annual meeting of stockholders held May 6, 1997, the
following matters were voted:
Election of directors:
Name Vote For Vote Withheld
____ ________ _____________
Robert P. Coulter 8,370,195 14,199
Robert L. Haag 8,369,890 14,504
William B. Kaplan 8,370,100 14,294
Douglas A. Parker 8,368,100 16,294
Herbert L. Roth 8,368,990 15,404
Manfred Steinfeld 8,369,485 14,909
Paul N. Steinfeld 8,370,195 14,199
Trisha Wilson 8,367,923 16,471
Approval of independent auditors:
FOR: 8,372,888 AGAINST: 7,549 ABSTAIN: 3,957
No broker non-votes were recorded.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
27 Financial Data Schedule (EDGAR only).
b. Reports on Form 8-K
No reports have been filed on Form 8-K during this quarter.
<PAGE>
SHELBY WILLIAMS INDUSTRIES, INC.
SIGNATURES
Pursuant to the requirement 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.
SHELBY WILLIAMS INDUSTRIES, INC.
(Registrant)
July 28, 1997 S/Robert P. Coulter
________________________________
Robert P. Coulter
President and Director
(Principal Operating Officer)
July 28, 1997 S/Sam Ferrell
________________________________
Sam Ferrell
Vice President of Finance, Treasurer
and Assistant Secretary
(Principal Financial Officer)
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S>
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-END> June-30-1997
<PERIOD-TYPE> 6-mos
<CASH> 9,467
<SECURITIES> 0
<RECEIVABLES> 26,284
<ALLOWANCES> 428
<INVENTORY> 26,566
<CURRENT-ASSETS> 65,044
<PP&E> 50,900
<DEPRECIATION> 25,057
<TOTAL-ASSETS> 92,448
<CURRENT-LIABILITIES> 18,434
<BONDS> 0
0
0
<COMMON> 592
<OTHER-SE> 66,167
<TOTAL-LIABILITY-AND-EQUITY> 92,448
<SALES> 87,258
<TOTAL-COSTS> 67,297
<OTHER-EXPENSES> 12,593
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 317
<INCOME-PRETAX> 7,334
<INCOME-TAX> 2,461
<INCOME-CONTINUING> 4,873
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,873
<EPS-PRIMARY> .54
<EPS-DILUTED> .54
</TABLE>
