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
<PAGE>
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
<PAGE>
<TABLE>
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: ---------- ----------
<S> <C> <C>
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
========== ==========
<PAGE>
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
========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
<TABLE>
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
-------- --------
<S> <C> <C>
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.
</TABLE>
<PAGE>
<TABLE>
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
---------- ----------
<S> <C> <C>
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.
</TABLE>
<PAGE>
<TABLE>
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:
<S> <C> <C>
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.
</TABLE>
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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)
<TABLE>
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
------- ------- ------- -------
<S> <C> <C> <C> <C>
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.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
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.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-END> SEP-30-1995
<CASH> 42,895,000
<SECURITIES> 0
<RECEIVABLES> 380,752,000
<ALLOWANCES> 16,736,000
<INVENTORY> 526,087,000
<CURRENT-ASSETS> 988,081,000
<PP&E> 1,222,937,000
<DEPRECIATION> 583,477,000
<TOTAL-ASSETS> 1,755,794,000
<CURRENT-LIABILITIES> 336,824,000
<BONDS> 0
<COMMON> 150,827,000
0
0
<OTHER-SE> 550,149,000
<TOTAL-LIABILITY-AND-EQUITY> 1,755,794,000
<SALES> 748,364,000
<TOTAL-REVENUES> 748,364,000
<CGS> 605,648,000
<TOTAL-COSTS> 605,648,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 2,043,000
<INTEREST-EXPENSE> 10,522,000
<INCOME-PRETAX> 36,861,000
<INCOME-TAX> 15,196,000
<INCOME-CONTINUING> 21,665,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21,905,000
<EPS-PRIMARY> 0.16
<EPS-DILUTED> 0.16
</TABLE>
