FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
January 30, 1998 (January 29, 1998)
-----------------------------------
SHAW INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
Georgia 1-6853 58-1032521
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
616 East Walnut Avenue, P. O. Drawer 2128, Dalton, Georgia 30720
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (706) 278-3812
------------------------------
Not Applicable
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(Former name or former address, if changed since last report.)
<PAGE>
Item 5. Other Events
On January 29,1998, Shaw Industries, Inc. issued the press release attached
hereto as Exhibit 99.1.
<PAGE>
Item 7. Financial Statements and Exhibits
(c) Exhibits.
99.1. Press release issued January 29, 1998.
<PAGE>
SIGNATURE
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 hereunto duly authorized.
Date: January 30, 1998 SHAW INDUSTRIES, INC.
By: /s/ Bennie M. Laughter
Name: Bennie M. Laughter
Title: Vice President, Secretary and
General Counsel
<PAGE>
EXHIBIT INDEX
No. Description
99.1 Press release issued January 29, 1998.
::ODMA\PCDOCS\ATL\184512\1
PRESS RELEASE FOR
TRADE/BUSINESS MEDIA
FOR: SHAW INDUSTRIES, INC.
DALTON, GA 30722-2128
FROM: SHAW INDUSTRIES, INC.
P.O. DRAWER 2128
DALTON, GA 30722-2128
TELEPHONE (706) 275-3126
FAX (706) 275-3735
CONTACT: JULIUS SHAW
FOR IMMEDIATE RELEASE
DALTON, GEORGIA, January 29, 1998, Shaw Industries, Inc. (NYSE) today announced
that it intends to commence a "Dutch Auction" tender offer for up to 8,000,000
shares of its common stock, representing approximately 6.1% of its currently
outstanding shares. Under terms of the offer, the Company will invite
shareholders to tender their shares at prices specified by the tendering
shareholders within an expected range of $11.00 to $14.00 per share.
The tender offer is expected to begin February 6, 1998, or as soon as possible
thereafter, and will expire at 5:00 p.m. New York City time, twenty business
days thereafter, unless extended by the Company.
Based upon the number of shares tendered and the prices specified by the
tendering shareholders, Shaw Industries will select a single per-share purchase
price within the expected price range to be paid for shares which have been
tendered at or below the selected price. If the offer is over-subscribed, shares
will be purchased first from shareholders owning fewer than 100 shares and
tendering all of such shares at or below the purchase price determined by the
Company and then from all other shares tendered at or below such purchase price
1
<PAGE>
on a pro rata basis. The Company reserves the right to purchase more than
8,000,000 shares. The tender offer will not be conditioned on any minimum number
of shares being tendered.
The Board of Directors of Shaw Industries is not making any recommendation to
shareholders as to whether they should tender any shares pursuant to the offer.
Merrill Lynch will act as dealer-manager.
Shaw Industries' Board of Directors declared a cash dividend of seven and
one-half cents ($.075) per share for the first quarter of 1998. The dividend is
payable on February 27, 1998, to shareholders of record at February 16, 1998.
The Board of Directors advised that no further dividends would be paid this
fiscal year.
R.E. Shaw, Chairman and C.E.O., said, "After thorough consideration, the Board
has determined that the Company currently can do a better job of delivering
value to our shareholders through stock repurchases rather than through
dividends."
The Company also reported unaudited results for the three and twelve month
periods ended January 3, 1998.
Sales for the quarter increased 6.0% to $928,892,000, up from $875,981,000
during the same period last year. Net earnings before store closing costs and
reduction in the value of assets in the United Kingdom were $10,762,000, or $.08
per share. Net earnings before restructuring costs for the same period last year
were $21,501,000, or $.16 per share.
During the quarter, the Company recorded store closing costs of $36,349,000
($22,817,000 after income taxes, or $.17 per share) related to the closing of
approximately 100 of its residential retail stores. In addition, the Company
wrote down the carrying value of the assets of Carpets International, PLC by
$47,952,000 ($20,300,000 net of income taxes, or $.15 per share) as the result
of the previously announced agreement to sell the wholly owned U.K. subsidiary.
After recording these costs, the Company had a net loss for the quarter of
$32,355,000, or $.24 per share. Net earnings per share data is the same on both
a basic and diluted basis.
2
<PAGE>
Sales for the twelve months increased 11.7% to $3,575,774,000, up from
$3,201,554,000 last year. Net earnings before store closing costs and reduction
in the value of assets in the United Kingdom for the twelve months were
$72,076,000, or $.54 per share, compared to net earnings before nonrecurring
charges and restructuring costs of $84,714,000, or $.62 share, for the same
period last year. After recording the store closing costs of $22,817,000, and
the reduction of assets in the United Kingdom of $20,300,000, the Company had
net earnings of $28,959,000 for the twelve months, or $.22 per share, compared
to $34,023,000, or $.25 per share, for the same period last year. Net earnings
per share data is the same on both a basic and diluted basis.
The following chart describes the effect of the store closing costs of
$22,817,000, net of income taxes, and the reduction of U.K. assets of
$20,300,000, net of income taxes, on the results of the fourth quarter of 1997
compared to 1996:
4th Qtr. 1997 4th Qtr. 1996
Earnings (Loss) EPS Earnings (Loss) EPS
Net earnings before
other charges ................ $ 10,762,000 $ .08 $ 21,501,000 $ .16
Store closing costs,
net of income taxes .......... (22,817,000) (.17) -- --
Reduction in U.K. assets,
net of income taxes .......... (20,300,000) (.15) -- --
Restructuring costs,
net of income taxes .......... -- -- (24,172,000) (.18)
---------------------------------------------
Net (Loss) ..................... $(32,355,000) $(.24) $ (2,671,000) $(.02)
=============================================
The following chart describes the effect of the store closing costs of
$22,817,000, net of income taxes, and the reduction of U.K. assets of
$20,300,000, net of income taxes, on the results of the twelve months of 1997
compared to 1996:
3
<PAGE>
12 Months 12 Months
Ended 1/3/98 Ended 12/28/96
Earnings (Loss) EPS Earnings (Loss) EPS
Net earnings before
other charges ................ $ 72,076,000 $ .54 $ 84,714,000 $ .62
Store closing costs,
net of income taxes .......... (22,817,000) (.17) -- --
Reduction of U.K. assets,
net of income taxes .......... (20,300,000) (.15) -- --
Nonrecurring charges,
net of income taxes -
Adoption of SFAS 121 ......... -- -- (26,519,000) (.19)
Restructuring costs,
net of income taxes .......... -- -- (24,172,000) (.18)
---------------------------------------------
Net earnings ................... $ 28,959,000 $ .22 $ 34,023,000 $ .25
=============================================
According to R.E. Shaw, Chairman and C.E.O., "At the beginning of the quarter we
discussed our plans to improve cash flows and evaluate non performing or under
performing assets.
During the quarter, we made several significant decisions that should improve
the company's profitability and cash flow in the future. In December, we
announced the closing of approximately 100 retail stores. These redundant and
unprofitable stores negatively affected the profitability of our Company last
year. With these stores closed, we expect our retail profitability to improve in
1998.
In January 1998, we announced an agreement in principle to sell Carpets
International PLC (the Company's wholly-owned U.K. subsidiary) to Cravey, Green
& Wahlen, an Atlanta venture capital firm. This transaction will allow us to
improve our liquidity.
During the quarter, sales increased 6% to $929 million. We were relatively
pleased with our sales level, and we feel that we maintained, or slightly grew
our market share. We were, however, disappointed with our earnings. During the
quarter, we reached our goal of reducing inventories by approximately $70
million. This inventory reduction affected our profitability more than we
expected, as we under utilized our plants, which affected our costs and margins.
Furthermore, retail profitability fell short of our expectations. The
4
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combination of these two factors resulted in the earnings disappointment we
experienced during the quarter. As announced earlier, we have taken steps to
improve our retail profitability going forward. Our inventories are now at an
acceptable level, and we don't expect any significant inventory reductions in
the future."
During the quarter, the Company repurchased approximately 3.8 million shares of
stock.
Safe Harbor Statement: Except for historical information contained herein, the
matters set forth in this press release are forward-looking statements within
the meaning of ss.27A of the Securities Act of 1933, as amended, and are subject
to the safe harbor provisions of that Act. The forward-looking statements set
forth above involve a number of risks and uncertainties that could cause actual
results to differ materially from any such statement. These risks and
uncertainties, and assumptions concerning the Company's future operations and
performance, could prove inaccurate and, therefore, there can be no assurance
that the forward-looking statements will prove to be accurate.
Shaw Industries, Inc. with its corporate offices in Dalton, Georgia,
manufactures and sells carpeting and rugs throughout the United States, the
United Kingdom, Australia and Mexico, and exports to Canada and many other
countries. Through its retail stores and commercial dealers, the Company also
sells other flooring products and provides installation and other services.
5
<PAGE>
SHAW INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended
=============================
January 3, December 28,
1998 (1) 1996
------------ ------------
Net sales ..................................... $ 928,892,000 $ 875,981,000
Cost of sales ................................. 706,907,000 669,538,000
------------ ------------
Gross margin .................................. 221,985,000 206,443,000
Selling, general and administrative expenses .. 193,655,000 168,649,000
Pre-opening expenses, retail operations ....... 432,000 8,432,000
Store closing costs ........................... 36,349,000 --
Restructuring costs ........................... -- 19,963,000
Reduction of U.K. assets ...................... 47,952,000 --
------------ ------------
Operating (loss) income ....................... (56,403,000) 9,399,000
Interest expense, net ......................... 15,904,000 12,396,000
Other (income), net ........................... (1,777,000) (1,251,000)
------------ ------------
(Loss) before income taxes .................... (70,530,000) (1,746,000)
(Benefit) provision for income taxes .......... (36,484,000) 2,442,000
------------ ------------
(Loss) before equity in income of joint venture (34,046,000) (4,188,000)
Equity in income of joint venture ............. 1,691,000 1,517,000
------------ ------------
Net (loss) .................................... $ (32,355,000) $ (2,671,000)
============ ============
Earnings per common share:
On a basic and diluted basis - ............. $ (0.24) $ (0.02)
============ ============
Weighted average shares:
Basic ................................... 132,766,761 134,266,754
============ ============
Diluted ................................. 133,059,098 134,266,754
============ ============
(1) Fourteen weeks.
Note: Certain 1996 amounts have been reclassified to conform to the 1997
presentation.
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<TABLE>
<CAPTION>
SHAW INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Twelve Months Ended
================================
January 3, December 28,
1998 (1) 1996
-------------- --------------
<S> <C> <C>
Net sales ..................................... $ 3,575,774,000 $ 3,201,554,000
Cost of sales ................................. 2,680,472,000 2,485,068,000
-------------- --------------
Gross margin .................................. 895,302,000 716,486,000
Selling, general and administrative expenses .. 722,590,000 541,338,000
Pre-opening expenses, retail operations ....... 3,953,000 13,595,000
Store closing costs ........................... 36,787,000 --
Restructuring costs ........................... -- 19,963,000
Reduction of U.K. Assets ...................... 47,952,000
Nonrecurring charges .......................... -- 29,139,000
-------------- --------------
Operating income .............................. 84,020,000 112,451,000
Interest expense, net ......................... 60,769,000 42,442,000
Other (income) net ............................ (7,032,000) (3,609,000)
-------------- --------------
Income before income taxes .................... 30,283,000 73,618,000
Provision for income taxes .................... 5,586,000 43,463,000
-------------- --------------
Income before equity in income of joint venture 24,697,000 30,155,000
Equity in income of joint venture ............. 4,262,000 3,868,000
-------------- --------------
Net income .................................... $ 28,959,000 $ 34,023,000
============== ==============
Earnings per common share:
On a basic and diluted basis - ........... $ 0.22 $ 0.25
============== ==============
Weighted average shares:
Basic ................................... 133,523,380 135,731,360
============== ==============
Diluted ................................. 133,714,496 135,915,308
============== ==============
</TABLE>
(1) Fifty-three weeks.
Note: Certain 1996 amounts have been reclassified to conform to the 1997
presentation.
<PAGE>
SHAW INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(UNAUDITED)
January 3, December 28,
1998 1996
-------------- --------------
ASSETS
Current assets:
Cash and cash equivalents ............. $ 43,571,000 $ 49,581,000
Accounts receivable, net .............. 374,516,000 393,983,000
Inventories ........................... 530,059,000 556,785,000
Other current assets .................. 118,267,000 81,056,000
-------------- --------------
Total current assets ............. 1,066,413,000 1,081,405,000
Property, plant and equipment, net ......... 624,379,000 655,141,000
Other assets ............................... 276,822,000 247,852,000
-------------- --------------
$1,967,614,000 $1,984,398,000
============== ==============
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current liabilities:
Notes payable ......................... $ 10,000 $ 35,084,000
Current maturities of long-term debt .. 2,752,000 17,431,000
Accounts payable and accrued liabilities 322,692,000 358,546,000
-------------- --------------
Total current liabilities ........ 325,454,000 411,061,000
Long-term debt, less current maturities .... 930,424,000 825,280,000
Deferred income taxes and other liabilities 74,202,000 76,346,000
-------------- --------------
Total liabilities ................ 1,330,080,000 1,312,687,000
Total shareholders' investment ............. 637,534,000 671,711,000
-------------- --------------
$1,967,614,000 $1,984,398,000
============== ==============
