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 September 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 October 29, 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 Nine Months Ended
September 30, 1997 and 1996
(Unaudited)
(Amounts in thousands, except per share data)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
________ ________ ________ ________
<S> <C> <C>
Net sales $45,528 $43,250 $132,786 $127,532
Cost of goods sold 34,916 33,345 102,213 98,642
______ ______ ______ ______
Gross profit 10,612 9,905 30,573 28,890
Selling, general and
administrative
expenses 6,522 6,433 19,115 19,340
______ ______ ______ ______
4,090 3,472 11,458 9,550
Other deductions
(income):
Interest expense 162 253 479 807
Interest and dividend
income (185) (2) (393) (4)
Miscellaneous
income (29) (14) (104) (2)
______ ______ ______ ______
(52) 237 (18) 801
______ ______ ______ ______
Income before income
taxes 4,142 3,235 11,476 8,749
______ ______ ______ ______
Income taxes:
Current 1,349 976 3,692 2,594
Deferred 59 59 177 178
______ ______ ______ ______
1,408 1,035 3,869 2,772
______ ______ ______ ______
Net income $ 2,734 $ 2,200 $ 7,607 $ 5,977
====== ====== ====== ======
Net income per share $ .29 $ .25 $ .83 $ .68
====== ====== ====== ======
Weighted average number
of common shares
outstanding 9,348 8,758 9,148 8,820
====== ====== ====== ======
<FN>
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<TABLE>
SHELBY WILLIAMS INDUSTRIES, INC.
Consolidated Balance Sheets
September 30, 1997 and December 31, 1996
(Unaudited)
(Amounts in thousands, except per share data)
<CAPTION>
September 30, 1997 December 31, 1996
_______________ _________________
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 11,465 $ 1,039
Accounts receivable, less
allowance for doubtful
accounts of $400 at
September 30, 1997 and
$402 at December 31,
1996 28,275 25,224
Inventories:
Raw materials 10,731 11,615
Work in process 2,175 4,414
Finished goods 12,685 11,194
______ ______
25,591 27,223
Prepaid expense 4,100 3,691
______ ______
Total current assets 69,431 57,177
Excess of cost over net assets
of acquired company 162 169
Property, plant and equipment
at cost:
Land and land improvements 2,961 2,930
Buildings and leasehold
improvements 22,990 22,969
Machinery and equipment 22,927 24,207
Construction in progress 1,280 -
______ ______
50,158 50,106
Less accumulated
depreciation and
amortization 23,663 24,145
______ ______
26,495 25,961
Other assets 1,180 1,371
______ ______
$97,268 $84,678
====== ======
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<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Accounts payable $ 6,647 $ 9,002
Customer deposits on
orders in process 5,356 3,690
Accrued liabilities 5,299 4,172
Income taxes 906 1,707
Current portion of long-
term debt 4,000 1,000
______ ______
Total current liabilities 22,208 19,571
Long-term debt 4,000 7,000
Deferred income taxes 2,314 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 74,583 69,172
Pension liability adjustment (789) (789)
______ ______
84,223 77,117
Less common stock held in
treasury; 2,500 shares
at cost (1996-3,047) 15,477 21,147
______ ______
Total stockholders' equity 68,746 55,970
______ ______
$97,268 $84,678
====== ======
<FN>
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<TABLE>
SHELBY WILLIAMS INDUSTRIES, INC.
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1997 and 1996
(Unaudited)
(Amounts in thousands)
<CAPTION>
1997 1996
___________________________
<S> <C> <C>
Cash flows from operating activities:
Net income $7,607 $5,977
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amoritzation 1,934 2,065
Provision for losses on accounts
receivable 91 43
Change in assets and liabilities net
of effects from sale of facility:
Accounts receivable (3,142) 1,299
Inventories 1,632 (2,131)
Prepaid expenses (409) (819)
Accounts payable and accrued
liabilities 438 (1,366)
Income taxes payable (801) (169)
Increase in deferred taxes 177 178
Other 191 16
_____ _____
Net cash provided by operating
activities 7,718 5,093
_____ _____
Cash flows from investing activities:
Proceeds from disposal of property,
plant and equipment 140 5
Proceeds from sale of facility - 2,000
Capital expenditures (2,601) (945)
_____ _____
Net cash provided (used) by
investing activities (2,461) 1,060
_____ _____
Cash flows from financing activities:
Sale of treasury stock at public offering 7,953 -
Net repayment of short-term
borrowings - (3,100)
Principal payments of long-term debt - (32)
Sale of common stock under stock
option plan 296 115
Purchase of common stock for the
treasury (884) (1,892)
Dividends declared and paid (2,196) (1,944)
_____ _____
Net cash provided (used) by financing 5,169 (6,853)
activities
_____ _____
Net increase (decrease) in cash and
cash equivalent 10,426 (700)
Cash and cash equivalents at beginning
of period 1,039 2,376
_____ _____
Cash and cash equivalents at end of
period $ 11,465 $1,676
====== =====
Supplemental cash flow information:
Cash paid during the period for:
Interest $ 474 $ 799
Income taxes 4,493 2,763
_____ _____
$ 4,967 $3,562
===== =====
<FN>
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SHELBY WILLIAMS INDUSTRIES, INC.
[PERIOD] September 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
nine months ended September 30, 1997 and 1996.
Consoldiated Balance Sheets at September 30, 1997 and December 31,
1996.
Consolidated Statements of Cash Flows for nine months ended
September 30, 1997 and 1996.
Item 2. Managements' Discussion and Analysis of Financial Condition
and Results of Operations
Material Changes in Financial Condition
Capital expenditures during the third quarter of 1997 amounted to $1.3
million, of which $880,000 was for installation of a state-of-art powder
coating system, planned to be completed in the next three months at a total
cost of $2.0 million. Book value per share at September 30, 1997 was $7.35
versus $6.16 a year earlier. The current ratio at September 30, 1997 stood
at 3.1-to-one, up from 2.6-to-one at September 30, 1996.
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 September 30, 1997.
At September 30, 1997, the Company had long term debt of $8 million
including $4 million current portion, no short term debt, and cash and cash
equivalents of $11.5 million. Prepayment option on the long term debt is
available only at a substantial penalty. Capital expenditures during the
nine months ended September 30, 1997, amounted to $2.6 million, of which,
$1.3 million is construction in progress for the powder coating system
indicated above, approximately $400,000 for facilities expansion, and the
balance principally for automated machinery. The Company also plans to
expend approximately $2.5 million within the next 16 months for additional
expanded and new manufacturing facilities.
<PAGE>
Material Changes in Results of Operations
Net sales for the quarter ended September 30, 1997 totaled $45.5
million compared to $42.0 million in the third quarter of 1996, excluding
sales of the divested Preview division. This 8.4 percent increase was due
almost entirely to volume increases mainly attributable to new hotel
construction projects and continued strong hotel refurbishing. Net income
totaled $2.7 million, a 24.3 percent increase over $2.2 million in the third
quarter of 1996. Earnings per share of $0.29 for the third quarter increased
16.0 percent from $0.25 in the same period in 1996 on 6.7 percent more shares.
Pretax income increased 28.0 percent over the year-ago quarter. The Company's
gross margin as a percentage of sales in the quarter continued to rise from
increased efficiency and capacity utilization to 23.3 percent from 22.9
percent in the 1996 third quarter. Higher gross margin, along with a
reduction of selling, general and administrative expense as a percentage of
sales, contributed to increased operating margin; to 9.0 percent from 8.0
percent.
Sales for the first nine months of 1997 increased 9.1 percent to
$132.8 million from $121.7 million in the same period of 1996, excluding
sales of the divested division. Net income was $7.6 million, a 27.3 percent
increase over $6.0 million, while earnings per share of $0.83 for the first
nine months of 1997 increased 22.1 percent from $0.68 in the same period of
1996. Pre-tax earnings increased 31.2 percent in the first nine months over
the same period a year ago. Gross margin for the first nine months increased
to 23.0 percent of sales compared to 22.7 percent in the first nine months
of 1996.
At September 30, 1997, the Company's backlog of unshipped orders in-
creased to $36.0 million, compared to $35.1 million a year earlier.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
PART II - OTHER INFORMATION
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.
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.
<PAGE>
SHELBY WILLIAMS INDUSTRIES, INC.
(Registrant)
October 29, 1997 S/Robert P. Coulter
__________________________________
Robert P. Coulter
President and Director
(Principal Operating Officer)
October 29, 1997 S/Sam Ferrell
_________________________________
Sam Ferrell
Vice President of Finance, Treasurer
and Assistant Secretary
(Principal Financial Officer)
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> September-30-1997
<PERIOD-TYPE> 9-mos
<CASH> 11,465
<SECURITIES> 0
<RECEIVABLES> 28,675
<ALLOWANCES> 400
<INVENTORY> 25,591
<CURRENT-ASSETS> 69,431
<PP&E> 50,158
<DEPRECIATION> 23,663
<TOTAL-ASSETS> 97,268
<CURRENT-LIABILITIES> 22,208
<BONDS> 0
0
0
<COMMON> 592
<OTHER-SE> 68,154
<TOTAL-LIABILITY-AND-EQUITY> 97,268
<SALES> 132,786
<TOTAL-COSTS> 102,213
<OTHER-EXPENSES> 19,115
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 479
<INCOME-PRETAX> 11,476
<INCOME-TAX> 3,869
<INCOME-CONTINUING> 7,607
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,607
<EPS-PRIMARY> .83
<EPS-DILUTED> .83
</TABLE>
