<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended April 3, 1998
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 33-64140
DAL-TILE INTERNATIONAL INC.
---------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3548809
- -------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification no.)
7834 Hawn Freeway, Dallas, Texas 75217
---------------------------------------
(Address of principal executive office)
(Zip Code)
(214) 398-1411
--------------
(Registrant's telephone number, including area code)
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 _____
As of May 14, 1998, the registrant had outstanding 53,435,101 shares of
voting common stock, par value $0.01 per share.
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DAL-TILE INTERNATIONAL INC.
TABLE OF CONTENTS
<TABLE>
<S> <C>
PART I - FINANCIAL INFORMATION PAGE
----
Item 1 - Financial Statements (Unaudited) 3
Notes to Condensed Consolidated Financial Statements 8
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 11
PART II - OTHER INFORMATION
Item 5 - Other Information 15
Item 6 - Exhibits and Reports on Form 8-K 15
</TABLE>
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DAL-TILE INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED APRIL 3, 1998 and APRIL 4, 1997
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
THREE MONTHS ENDED
-----------------------
APRIL 3, APRIL 4,
1998 1997
-------- --------
<S> <C> <C>
Net sales $185,831 $167,409
Cost of goods sold 98,503 84,221
-------- --------
Gross profit 87,328 83,188
Expenses:
Transportation 14,533 11,490
Selling, general and administrative 57,433 52,994
Amortization of intangibles 1,401 1,401
-------- --------
Total expenses 73,367 65,885
-------- --------
Operating income 13,961 17,303
Interest expense 11,604 8,079
Interest income 26 139
Other income (expense) (391) 681
-------- --------
Income before income taxes 1,992 10,044
Income tax provision 1,164 3,517
-------- --------
Net Income $ 828 $ 6,527
-------- --------
-------- --------
BASIC EARNINGS PER SHARE
Net income per common share $ 0.02 $ 0.12
-------- --------
-------- --------
Average shares 53,435 53,435
-------- --------
-------- --------
DILUTED EARNINGS PER SHARE
Net income per common share $ 0.02 $ 0.12
-------- --------
-------- --------
Average shares 54,149 55,443
-------- --------
-------- --------
</TABLE>
The accompanying notes are an integral part of
the condensed consolidated financial statements.
PAGE 3
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DAL-TILE INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
APRIL 3, 1998 AND JANUARY 2, 1998
(AMOUNTS IN THOUSANDS)
<TABLE>
(UNAUDITED)
APRIL 3, JANUARY 2,
1998 1998
----------- ----------
<S> <C> <C>
ASSETS
Current Assets:
Cash $ 399 $ 7,488
Trade accounts receivable 110,017 96,296
Inventories 123,720 130,747
Prepaid expenses 3,268 3,120
Other current assets 16,761 18,438
-------- --------
Total current assets 254,165 256,089
Property, plant, and equipment, at cost 293,079 299,232
Less accumulated depreciation 76,065 71,547
-------- --------
217,014 227,685
Goodwill, net of amortization 151,370 152,560
Finance costs, net of amortization 6,298 6,599
Tradename and other assets 28,754 29,136
-------- --------
Total assets $657,601 $672,069
-------- --------
-------- --------
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
Page 4
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DAL-TILE INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS (continued)
APRIL 3, 1998 AND JANUARY 2, 1998
(AMOUNTS IN THOUSANDS)
<TABLE>
(UNAUDITED)
APRIL 3, JANUARY 2,
1998 1998
----------- ----------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable $ 19,430 $ 18,231
Accrued expenses 59,496 55,043
Accrued interest payable 1,363 2,287
Current portion of long-term debt 29,754 19,261
Income taxes payable 1,162 801
Deferred income taxes 1,066 863
Other current liabilities 4,693 4,715
-------- --------
Total current liabilities 116,964 101,201
Long-term debt 509,691 537,830
Other long-term liabilities 27,097 27,230
Deferred income taxes 1,903 1,888
Stockholders' Equity:
Common stock, $.01 par value:
Authorized shares - 200,000,000; issued and
outstanding shares - 53,435,101 534 534
Additional paid-in capital 436,100 436,100
Accumulated deficit (370,058) (370,886)
Accumulated other comprehensive loss (64,630) (61,828)
-------- --------
Total stockholders' equity 1,946 3,920
-------- --------
Total liabilities and stockholders' equity $657,601 $672,069
-------- --------
-------- --------
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
Page 5
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DAL-TILE INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
APRIL 3, 1998
(IN THOUSANDS)
(Unaudited)
<TABLE>
ACCUMULATED
OTHER
COMMON PAID-IN ACCUMULATED COMPREHENSIVE
STOCK CAPITAL DEFICIT LOSS TOTAL
------ -------- ----------- ------------- -------
<S> <C> <C> <C> <C> <C>
Balance at January 2, 1998 $534 $436,100 $(370,886) $(61,828) $ 3,920
-------
Comprehensive Loss
Net Income - - 828 - 828
Foreign currency translation adjustments - - - (2,802) (2,802)
-------
Total Comprehensive Loss (1,974)
---- -------- --------- -------- -------
Balance at April 3, 1998 $534 $436,100 $(370,058) $(64,630) $ 1,946
---- -------- --------- -------- -------
---- -------- --------- -------- -------
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
Page 6
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DAL-TILE INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED APRIL 3, 1998 AND APRIL 4, 1997
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
THREE MONTHS ENDED
-----------------------
APRIL 3, APRIL 4,
1998 1997
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 828 $ 6,527
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 7,165 5,134
Deferred income tax provision 547 1,937
Foreign currency transaction loss (gain) (398) (144)
Changes in operating assets and liabilities:
Trade accounts receivable (13,936) (8,548)
Inventories 6,218 (20,353)
Other assets 1,557 (4,764)
Trade accounts payable and accrued expenses 5,866 (20,140)
Accrued interest payable (847) 124
Other liabilities 511 (1,064)
-------- --------
Net cash provided by (used in) operating activities 7,511 (41,291)
INVESTING ACTIVITIES
Proceeds from sale of (expenditures for) property,
plant, and equipment, net 3,272 (13,888)
FINANCING ACTIVITIES
Repayments of long-term debt (44,650) (7,800)
Borrowings under long-term debt 27,004 48,000
Fees and expenses associated with debt refinancing (241) -
-------- --------
Net cash (used in) provided by financing activities (17,887) 40,200
Effect of exchange rate changes on cash 15 7
-------- --------
Net decrease in cash (7,089) (14,972)
Cash at beginning of period 7,488 9,999
-------- --------
Cash at end of period $ 399 $ (4,973)
-------- --------
-------- --------
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
Page 7
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DAL-TILE INTERNATIONAL INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The operating results of Dal-Tile International Inc. and its consolidated
subsidiaries (the "Company") for the three months ended April 3, 1998
reflect the results of operations of Dal-Tile International Inc. and its
consolidated subsidiaries. Due to the Company's 52/53 week accounting
cycle, the first quarter of 1998 ended on April 3, 1998.
The accompanying unaudited interim consolidated financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments,
consisting of normal recurring adjustments considered necessary for a
fair presentation of the financial position, results of operations, and
cash flow have been included. The results of operations for the three
months ended April 3, 1998 are not necessarily indicative of the results
that may be expected for the year ending January 1, 1999. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the January 2, 1998 annual report on Form 10-K of the
Company.
Certain prior year amounts have been reclassified to conform to the 1998
presentation.
2. EARNINGS PER SHARE
Earnings per share are presented on both the basic and diluted methods.
Basic earnings per share are based on the average number of shares
outstanding during each period presented. Diluted earnings per share are
based on the average number of shares outstanding including any dilutive
effects of options, warrants and convertible securities.
3. COMPREHENSIVE INCOME
As of January 3, 1998, the Company adopted Financial Accounting Standards
Board Statement No. 130, "Reporting Comprehensive Income" ("SFAS 130").
SFAS 130 establishes new rules for the reporting and display of
comprehensive income and its components; however, the adoption of SFAS 130
had no impact on the Company's net income or shareholders' equity.
SFAS 130 requires foreign currency translation adjustments, which prior
to adoption were reported separately in shareholders' equity, to be
included in other comprehensive income. Prior year financial statements
have been reclassified to the requirements of SFAS 130.
During the first quarter of 1998 and 1997, total comprehensive (loss)
income amounted to ($1,974) and $5,785, respectively.
PAGE 8
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4. INVENTORIES
Inventories consist of the following at April 3, 1998 and January 2, 1998
(In Thousands):
<TABLE>
(Unaudited)
April 3, January 2,
1998 1998
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<S> <C> <C>
Raw materials $ 8,417 $ 9,891
Work-in-process 4,279 3,960
Finished goods 111,024 116,896
-------- --------
$123,720 $130,747
-------- --------
-------- --------
</TABLE>
5. LONG-TERM DEBT
Long-term debt consists of the following at April 3, 1998 and January 2,
1998 (In Thousands):
<TABLE>
(Unaudited)
April 3, January 2,
1998 1998
-------- --------
<S> <C> <C>
Term A Loan $217,500 $217,500
Term B Loan 124,750 125,000
Revolving Credit Loan 173,000 190,000
Other 24,195 24,591
-------- --------
539,445 557,091
Less current portion 29,754 19,261
-------- --------
$509,691 $537,830
-------- --------
-------- --------
</TABLE>
6. INCOME TAXES
The income tax provision reflects effective tax rates of 58% and 35% for
the three months ended April 3, 1998 and April 4, 1997, respectively. The
tax provision for the first quarter of 1998 reflects expected Mexican and
U.S. state tax liabilities based on estimated income in those
jurisdictions.
7. COMMITMENTS AND CONTINGENCIES
The Company is subject to federal, state, local and foreign laws and
regulations relating to the environment and to work places. Laws that
affect or could affect the Group's United States operations include, among
others, the Clean Air Act, the Clean Water Act, the Resource Conservation
and Recovery Act and the Occupational Safety and Health Act. The Company
believes that it is currently in substantial compliance with such laws and
the regulations promulgated thereunder.
The Company is involved in various proceedings relating to environmental
matters. The Company, in the past, has disposed or arranged for the
disposal of substances which are now
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characterized as hazardous and currently is engaged in the cleanup of
hazardous substances at certain sites. It is the Company's policy to
accrue liabilities for remedial investigations and cleanup activities when
it is probable that such liabilities have been incurred and when they can
be reasonably estimated. The Company has provided reserves which
management believes are adequate to cover probable and estimable
liabilities of the Company with respect to such investigations and cleanup
activities, taking into account currently available information and the
Company's contractual rights of indemnification. However, estimates of
future response costs are necessarily imprecise due to, among other things,
the possible identification of presently unknown sites, the scope of
contamination of such sites, the allocation of costs among other
potentially responsible parties with respect to any such sites and the
ability of such parties to satisfy their share of liability. Accordingly,
there can be no assurance that the Company will not become involved in
future litigation or other proceedings or, if the Company were found to be
responsible or liable in any litigation or proceeding, that such costs
would not be material to the Company.
The Company is also a defendant in various lawsuits arising from normal
business activities. In the opinion of management, the ultimate liability
likely to result from the contingencies described above is not expected to
have a material adverse effect on the Company's consolidated financial
condition, results of operations or liquidity.
PAGE 10
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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is a discussion of the results of operations for the three
months ended April 3, 1998 compared with the three months ended April 4, 1997
for Dal-Tile International Inc. and its consolidated subsidiaries (the
"Company"). Due to the Company's 52/53 week accounting cycle, the first
quarter of 1998 ended on April 3, 1998.
During the first quarter of 1998, the Company reported sales growth in all
distribution channels and a return to profitability. Transportation costs
remain high as the Company continues to focus on improving customer service.
For the remainder of 1998, the Company will continue efforts to improve its
supply chain, reduce operating costs and improve cash flow through better
alignment of production requirements with working capital.
On April 28, 1998, the Company filed a registration statement in connection with
a request by Armstrong World Industries, Inc. ("AWI") that the Company register
for resale all the shares of the Company's common stock ("Common Stock") owned
by AWI. The Company's registration statement relates to the sale by AWI of
Common Stock and the issuance by AWI of Participating Exchangeable Premium
Securities ("PEPS") of AWI that are mandatorily exchangeable into Common Stock,
or, at the option of AWI, cash with an equivalent value.
The registration statement covers all of the 18,365,822 shares of Common Stock
owned by AWI, including up to 10,315,822 shares (including over-allotment
option) to be included in an underwritten secondary offering by AWI, and up to
8,050,000 shares (including over-allotment option) that may be delivered by AWI
at the maturity of the PEPS.
The Company will not receive any proceeds from the sale by AWI of the Common
Stock or the issuance by AWI of the PEPS, and the Company will have no
obligations with respect to the PEPS.
NET SALES
Net sales for the first quarter of 1998 increased $18.4 million, or 11.0%, to
$185.8 million from $167.4 million in 1997. During the first quarter of 1998,
sales increased 10% in the Company-operated sales centers and 14% within the
independent distributor channel compared to the same period in 1997. The
increase in net sales was due principally to improved customer service in all
distribution channels realized through, among other things, substantial
completion of the Company's management information systems integration, better
product availability and restructuring of the sales force in late 1997.
Net sales in Mexico increased $3.4 million to $6.5 million in the first quarter
of 1998 from $3.1 million in 1997. This increase in sales occurred as the
Company increased its utilization of United States manufacturing capacity
resulting in a larger availability of the Company's Mexican production to be
sold in Mexico.
GROSS PROFIT
Gross profit for the first quarter of 1998 increased $4.1 million, or 4.9%, to
$87.3 million from $83.2 million in 1997 principally as a result of the
increase in sales. Gross margin decreased to 47.0% in the first quarter of
1998 from 49.7% in the first quarter of 1997. The decrease in gross margin was
PAGE 11
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primarily a result of higher per unit manufacturing cost associated with
reduced production levels compared to the first quarter of 1997.
EXPENSES
Expenses in the first quarter of 1998 increased $7.5 million, or 11.4%, to
$73.4 million from $65.9 million in the first quarter of 1997. Expenses as a
percent of sales increased to 39.5% in the first quarter of 1998 from 39.4% in
the first quarter of 1997. The increase was due primarily to increased
transportation costs related to continued transfer of inventories in order to
improve customer service, higher fixed costs for information technology and
increased operating costs associated with higher revenues. These increases
were offset by reductions in staffing and lower professional fees.
OPERATING INCOME
Operating income in the first quarter of 1998 decreased $3.3 million, or
19.1%, to $14.0 million from $17.3 million in the first quarter of 1997.
Operating margin decreased to 7.5% from 10.3% for the first quarter of 1998
due primarily to increased transportation and operating expenses offset by
higher sales.
INTEREST EXPENSE (NET)
Interest expense (net) in the first quarter of 1998 increased $3.7 million, or
46.8%, to $11.6 million from $7.9 million in the first quarter of 1997. The
increase was due to higher fees and interest rates in connection with second
and third quarter 1997 amendments to the Company's credit facility and
increased borrowing requirements.
INCOME TAXES
The income tax provision reflects effective tax rates of approximately 58% and
35% for the first quarter of 1998 and 1997, respectively. The effective rate
for the first quarter of 1997 was based on the estimated annual income for 1997.
Subsequent to the first quarter of 1997, the Company incurred significant U.S.
losses which eliminated U.S. federal and state income tax liability for that
period and generated substantial net operating loss carryforwards. A valuation
allowance was established in 1997 to offset any benefit from the net operating
losses and to reflect management's estimation as to the future utilization of
the deferred tax assets. A tax provision was recorded in 1997 for income taxes
incurred on Mexican earnings. The first quarter of 1998 reflects expected
Mexican and U.S. state tax liabilities based on estimated income in those
jurisdictions.
NET INCOME
Net income in the first quarter of 1998 decreased to $0.8 million from $6.5
million in the first quarter of 1997. Net income decreased due to lower gross
margins and higher operating and interest expense.
LIQUIDITY AND CAPITAL RESOURCES
Cash flow from operations and funds available under the Company's bank credit
agreement (the "Second Amended Credit Facility") continue to provide the
Company with liquidity and capital resources for working capital requirements,
capital expenditures and debt service. Cash provided by operating activities
was $7.5 million in the first quarter of 1998 compared to cash usage of $41.3
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million for the same period in 1997. Cash provided in the first quarter of 1998
resulted from continued efforts to improve management of working capital.
During the first quarter of 1998, the Company continued to reduce inventory
levels to better align them with sales requirements. Additionally, the Company
continues to decrease accounts receivable days outstanding through improved
collection procedures implemented in late 1997.
During the first quarter of 1998, the Company received net cash proceeds of $8.1
million from the sale of its Lansdale, PA manufacturing facility contributing to
cash provided by investing activities of $3.3 million. During the remainder of
1998, the Company plans to expend approximately $16 million for the completion
of the expansion of its Dallas, TX plant, routine capital improvements and
continued integration of management information systems. The Company's ability
to continue to improve and expand its manufacturing facilities in the future
will be dependent on cash generated from operations and borrowings available
under the Second Amended Credit Facility.
Cash used in financing activities was $17.9 million for the first quarter of
1998, which reflects repayments of $17.0 million on the revolver portion of the
Company's Second Amended Credit Facility and payments of various other debt.
Total availability as of April 3, 1998 under the Second Amended Credit Facility
was $63.7 million. The Company believes cash flow from operating activities,
together with borrowings available under the Second Amended Credit Facility (or
replacement thereof), will be sufficient to fund future working capital needs,
capital expenditures and debt service requirements. Given increasingly
stringent financial covenants and debt service requirements under the Second
Amended Credit Agreement, the Company expects that it will be required to seek
to refinance its indebtedness or amend the terms thereof in 1999 and possibly
sooner. The Company's ability to amend or refinance its obligations with respect
to its indebtedness and to raise capital through alternative means such as
selling assets or raising equity capital depends on its financial and operating
performance, which, in turn, is subject to prevailing economic conditions and to
financial, business and other factors beyond its control. If additional funds
are raised through the issuance of equity securities, the percentage ownership
of the Company's stockholders at that time would be diluted. Further, such
equity securities may have rights, preferences or privileges senior to those of
the Common Stock. There can be no assurance that future borrowing facilities
will be available for the repayment or refinancing of the Company's indebtedness
or that the Company's existing lenders will agree to any requested modification
of the terms of its indebtedness. The Company expects that debt incurred as
part of a refinancing would involve higher borrowing costs.
The peso devaluation and economic uncertainties in Mexico are not expected to
have a significant impact on the Company's liquidity. Since the Company has no
peso-based borrowings, high interest rates in Mexico are not expected to
directly affect the Company's liquidity. Any future devaluation of the peso
against the U.S. dollar may affect the Company's results of operations or
financial condition.
The Company is involved in various proceedings relating to environmental
matters. The Company is currently engaged in environmental investigation and
remediation programs at certain sites. The Company has provided reserves for
remedial investigation and cleanup activities that the Company has determined to
be both probable and reasonably estimable. The Company is entitled to
indemnification with respect to certain expenditures incurred in connection with
such environmental matters and does not expect that the ultimate liability with
respect to such investigation and remediation activities will have a material
adverse effect on the Company's liquidity and financial condition.
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The United States is a party to the General Agreement on Tariffs and Trade
("GATT"). Under GATT, the United States currently imposes import duties on
glazed ceramic tile from non-North American countries at approximately 15% to be
reduced ratably to 8 1/2% by 2004. Accordingly, GATT may stimulate competition
from non-North American manufacturers who now export, or who may seek to export,
ceramic tile to the United States. The Company cannot predict the effect that
GATT may have on the Company's operations.
In 1993, Mexico, the United States and Canada approved the North American Free
Trade Agreement ("NAFTA"). NAFTA has, among other things, removed and will
continue to remove, over a transition period, most normal customs duties imposed
on goods traded among the three countries. In addition, NAFTA will remove or
limit many investment restrictions, liberalize trade in services, provide a
specialized means for settlement of, and remedies for, trade disputes arising
thereunder, and will result in new laws and regulations to further these goals.
Although NAFTA lowers the tariffs imposed on the Company's ceramic tile
manufactured in Mexico and sold in the United States, it also may stimulate
competition in the United States and Canada from manufacturers located in
Mexico. The United States currently imposes import duties on glazed ceramic tile
from Mexico of approximately 13%, although these duties on imports from Mexico
are being phased out ratably under NAFTA by 2008. It is uncertain what ultimate
effect NAFTA will have on the Company's results of operations.
EFFECTS OF INFLATION
The Company believes it has generally been able to increase selling prices and
enhance productivity to offset increases in costs resulting from inflation in
the U.S. and Mexico. Inflation has not had a material impact on the Company's
results of operations during the first quarter of 1998 and 1997. Approximately
85% of the Company's inventory is valued using the LIFO inventory accounting
method. Therefore, current costs are reflected in cost of sales rather than in
inventory balances. The impact of inflation in Mexico has not had a significant
impact on the first quarter of 1998 operating results; however, the future
impact is uncertain at this time.
IMPACT OF YEAR 2000
The Company is continuing its efforts to modify and replace certain portions of
its software and hardware so that its computer systems will function properly
with respect to dates in the year 2000 and thereafter. The total Year 2000 cost
is estimated at approximately $7.0 million and will be expensed as incurred. To
date, the Company has incurred expenses primarily for the assessment of the Year
2000 issue, the development of a modification plan and initial date repair
activities.
The project is estimated to be completed no later than April 2, 1999, which is
prior to any anticipated impact on the Company's operating systems. The Company
believes that, with modifications to existing software and conversions to new
software, the Year 2000 issue will not pose significant operational problems for
its computer systems. However, if such modifications and conversions are not
made, or are not completed timely, the Year 2000 issue could have a material
adverse impact on operations.
The cost of the project and the date by which the Company believes it will
complete the Year 2000 modifications are based on management's best estimates,
which were derived utilizing numerous assumptions of future events, including
the continued availability of certain resources and other factors. However,
there can be no guarantee that these estimates will be achieved and actual
results could differ materially from those anticipated. Specific factors that
might cause such material
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differences include, but are not limited to, the availability and cost of
personnel trained in this area, the ability to locate and correct all relevant
computer codes, non-performance of key software and hardware vendors and similar
uncertainties. In addition, material disruptions to the operations of the
Company's major customers and suppliers as a result of Year 2000 issues could
also have a material adverse impact on the Company's operations and financial
condition.
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
Cautionary Statement for purposes of "Safe Harbor Provisions" of the
Private Securities Litigation Reform Act of 1995.
Certain statements contained in this filing are "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements are subject to risks,
uncertainties and other factors which could cause actual results to
differ materially from future results expressed or implied by such
forward looking statements. Potential risks and uncertainties
include, but are not limited to, the impact of competitive pressures
and changing economic conditions on the Company's business and its
dependence on residential and commercial construction activity, the
fact that the Company is highly leveraged, currency fluctuations and
other factors relating to the Company's foreign manufacturing
operations, the impact of pending reductions in tariffs and custom
duties, system integration issues and environmental laws and other
regulations.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS
27.1 Financial Data Schedule
27.2 Financial Date Schedule
27.3 Financial Date Schedule
27.4 Financial Date Schedule
27.5 Financial Date Schedule
27.6 Financial Date Schedule
27.7 Financial Date Schedule
27.8 Financial Date Schedule
27.9 Financial Date Schedule
(b) REPORTS ON FORM 8-K.
No reports on Form 8-K were filed during the quarter ended April 3,
1998.
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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 thereunto duly authorized.
DAL-TILE INTERNATIONAL INC.
(Registrant)
Date:
May 15, 1998 /s/ William C. Wellborn
- ------------ ------------------------------------
Executive Vice President, Chief
Financial Officer, Treasurer and
Assistant Secretary
PAGE 16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<RESTATED>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-03-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 4,331
<SECURITIES> 0
<RECEIVABLES> 125,412
<ALLOWANCES> 9,056
<INVENTORY> 127,282
<CURRENT-ASSETS> 275,924
<PP&E> 231,239
<DEPRECIATION> 47,139
<TOTAL-ASSETS> 645,158
<CURRENT-LIABILITIES> 92,223
<BONDS> 434,769
0
0
<COMMON> 121
<OTHER-SE> 101,933
<TOTAL-LIABILITY-AND-EQUITY> 645,158
<SALES> 184,386
<TOTAL-REVENUES> 184,386
<CGS> 93,784
<TOTAL-COSTS> 153,314
<OTHER-EXPENSES> 352
<LOSS-PROVISION> 1,444
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