<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 June 30, 2000
-------------
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 offices)
(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 August 4, 2000, the registrant had 54,912,891 outstanding shares of
voting common stock, par value $0.01 per share.
<PAGE>
DAL-TILE INTERNATIONAL INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements (Unaudited) 3
Notes to Consolidated Condensed Financial Statements (Unaudited) 8
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 11
PART II - OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders 14
Item 5 - Other Information 14
Item 6 - Exhibits and Reports on Form 8-K 15
</TABLE>
2
<PAGE>
DAL-TILE INTERNATIONAL INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------------------ ------------------------------
JUNE 30, JULY 2, JUNE 30, JULY 2,
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net sales $ 244,981 $ 219,303 $ 475,094 $ 419,995
Cost of goods sold 127,459 113,652 246,888 217,662
------------- ------------- ------------- -------------
Gross profit 117,522 105,651 228,206 202,333
Expenses:
Transportation 15,724 14,800 31,429 28,928
Selling, general and administrative 64,621 59,503 127,691 118,271
Amortization of intangibles 1,378 1,401 2,756 2,802
------------- ------------- ------------- -------------
Total expenses 81,723 75,704 161,876 150,001
------------- ------------- ------------- -------------
Operating income 35,799 29,947 66,330 52,332
Interest expense 7,746 9,696 15,643 19,881
Interest income 23 45 39 71
Other income (expense) (745) 495 (568) 707
------------- ------------- ------------- -------------
Income before income taxes 27,331 20,791 50,158 33,229
Income tax provision 1,792 1,300 3,294 2,600
------------- ------------- ------------- -------------
Net income $ 25,539 $ 19,491 $ 46,864 $ 30,629
============= ============= ============= =============
BASIC EARNINGS PER SHARE
Net income per common share $ 0.47 $ 0.36 $ 0.85 $ 0.57
============= ============= ============= =============
Average shares 54,826 54,011 54,817 53,789
============= ============= ============= =============
DILUTED EARNINGS PER SHARE
Net income per common share $ 0.46 $ 0.36 $ 0.85 $ 0.56
============= ============= ============= =============
Average shares 54,999 54,675 54,907 54,371
============= ============= ============= =============
</TABLE>
The accompanying notes are an integral part of the consolidated condensed
financial statements.
3
<PAGE>
DAL-TILE INTERNATIONAL INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
(UNAUDITED)
JUNE 30, DECEMBER 31,
2000 1999
---------------- ----------------
<S> <C> <C>
ASSETS
Current Assets:
Cash $ 853 $ 1,193
Trade accounts receivable 116,275 94,915
Inventories 144,308 140,153
Prepaid expenses 5,622 4,884
Other current assets 15,312 14,819
---------------- ----------------
Total current assets 282,370 255,964
Property, plant, and equipment, at cost 323,424 309,729
Less accumulated depreciation 109,616 102,405
---------------- ----------------
213,808 207,324
Goodwill, net of amortization 140,650 143,041
Finance costs, net of amortization 4,495 5,226
Tradename and other assets, net of amortization 26,209 27,149
================ ================
Total assets $ 667,532 $ 638,704
================ ================
</TABLE>
The accompanying notes are an integral part of the consolidated condensed
financial statements.
4
<PAGE>
DAL-TILE INTERNATIONAL INC.
CONSOLIDATED CONDENSED BALANCE SHEETS (CONTINUED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
(UNAUDITED)
JUNE 30, DECEMBER 31,
2000 1999
--------------- ----------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable $ 38,565 $ 36,388
Accrued expenses 70,984 67,375
Current portion of long-term debt 56,422 56,796
Income taxes payable 1,498 1,153
Deferred income taxes 2,337 2,461
--------------- ----------------
Total current liabilities 169,806 164,173
Long-term debt 330,197 353,877
Other long-term liabilities 14,954 17,671
Deferred income taxes 3,419 2,039
Stockholders' Equity:
Common stock, $.01 par value:
Authorized shares - 200,000,000; issued and
outstanding shares - 54,837,209 549 547
Additional paid-in capital 449,156 447,738
Accumulated deficit (226,231) (273,095)
Accumulated other comprehensive loss (74,318) (74,246)
--------------- ----------------
Total stockholders' equity 149,156 100,944
=============== ================
Total liabilities and stockholders' equity $ 667,532 $ 638,704
=============== ================
</TABLE>
The accompanying notes are an integral part of the consolidated condensed
financial statements.
5
<PAGE>
DAL-TILE INTERNATIONAL INC.
CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY
JUNE 30, 2000
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
ACCUMULATED
ADDITIONAL OTHER
COMMON PAID-IN ACCUMULATED COMPREHENSIVE
STOCK CAPITAL DEFICIT LOSS TOTAL
------------ -------------- --------------- ------------------ -------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1999 $ 547 $ 447,738 $ (273,095) $ (74,246) $ 100,944
Proceeds from issuance of common stock 2 1,148 - - 1,420
Comprehensive Income
Net income - - 46,864 - 46,864
Foreign currency translation adjustments - - - (72) (72)
-------------
Total Comprehensive Income 46,792
------------ -------------- --------------- ------------------ -------------
Balance at June 30, 2000 $ 549 $ 449,156 $ (226,231) $ (74,318) $ 149,156
============ ============== =============== ================== =============
</TABLE>
The accompanying notes are an integral part of the consolidated condensed
financial statements.
6
<PAGE>
DAL-TILE INTERNATIONAL INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
----------------------------------
JUNE 30, JULY 2,
2000 1999
--------------- --------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 46,864 $ 30,629
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 12,958 13,399
Other, net 1,778 (10)
Changes in operating assets and liabilities:
Trade accounts receivable (21,587) (13,494)
Inventories (4,692) 3,707
Other assets (813) 2,099
Trade accounts payable and accrued expenses 5,948 7,312
Accrued interest payable 400 (52)
Other liabilities (3,420) (9,009)
--------------- --------------
Net cash provided by operating activities 37,436 34,581
INVESTING ACTIVITIES
Expenditures for property, plant and equipment, net (15,958) (7,939)
FINANCING ACTIVITIES
Borrowings under long-term debt 151,600 137,000
Repayments of long-term debt (175,655) (170,455)
Proceeds from issue of common stock 2,267 6,101
--------------- --------------
Net cash used in financing activities (21,788) (27,354)
Effect of exchange rate changes on cash (30) 159
--------------- --------------
Net decrease in cash (340) (553)
Cash at beginning of period 1,193 1,546
=============== ==============
Cash at end of period $ 853 $ 993
=============== ==============
</TABLE>
The accompanying notes are an integral part of the consolidated condensed
financial statements.
7
<PAGE>
DAL-TILE INTERNATIONAL INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(IN THOUSANDS)
(UNAUDITED)
1. BASIS OF PRESENTATION
The operating results of Dal-Tile International Inc. for the six months
ended June 30, 2000 reflect the results of operations of Dal-Tile
International Inc. and its consolidated subsidiaries (the "Company") on
the basis of a 52/53 week accounting cycle.
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 six
months ended June 30, 2000 are not necessarily indicative of the results
that may be expected for the year ending December 29, 2000. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the December 31, 1999 annual report on Form 10-K of
the Company.
Certain prior year amounts have been reclassified to conform to the 2000
presentation.
2. EARNINGS PER SHARE
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
Total comprehensive income includes net income and foreign currency
translation adjustments. For the six months ended June 30, 2000 and July
2, 1999, total comprehensive income was $46,792 and $30,740,
respectively.
4. INVENTORIES
Inventories are as follows:
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
--------------- --------------
<S> <C> <C>
Raw materials $ 9,510 $ 9,966
Work-in-process 4,193 4,316
Finished goods 130,605 125,871
----------- -----------
$ 144,308 $ 140,153
=========== ===========
</TABLE>
8
<PAGE>
5. LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
----------- -----------
<S> <C> <C>
Term A Loan $ 140,000 $ 165,000
Term B Loan 122,500 123,000
Revolving Credit Loan 113,000 108,800
Other 11,119 13,873
----------- -----------
386,619 410,673
Less current portion 56,422 56,796
----------- -----------
$ 330,197 $ 353,877
=========== ===========
</TABLE>
6. INCOME TAXES
The income tax provision for the second quarter of 2000 reflects an
effective tax rate of approximately 6.6 percent compared to 6.3 percent
for the second quarter of 1999. For the six months ended June 30, 2000
the effective rate was approximately 6.6 percent compared to 7.8 percent
for the same period in 1999. These rates reflect expected Mexico tax
liabilities and U.S. state and possession taxes based on estimated
taxable income in those jurisdictions. The decrease in effective rates in
2000 versus 1999 was due to increased levels of pretax income, which
primarily effect the federal tax jurisdiction. No U.S. federal income tax
expense was recorded for 2000 or 1999 due to an offset by a valuation
allowance against U.S. federal deferred tax assets.
The pro-forma effective tax rate, assuming no benefits from the Company's
net operating losses, would have been 38.5 percent.
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 Company'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 of, or arranged for the
disposal of, substances which are now characterized as hazardous and
currently is engaged in the investigation and 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 remedial 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
9
<PAGE>
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.
10
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
During the second quarter of 2000, the Company achieved record sales and
profits. Sales increased primarily through the Company-operated sales centers
as a result of new residential products and continued growth in commercial
sales. Profits improved due to the growth in sales and reductions in
transportation cost and corporate spending, along with lower interest
expense. Cash flows improved allowing for continued debt reductions and
increased expenditures for capacity expansions and improvements. The Company
plans to continue its efforts to modernize and expand its manufacturing
facilities during the second half of 2000.
The following is a discussion of the results of operations for the three and
six months ended June 30, 2000 compared with the three and six months ended
July 2, 1999 for Dal-Tile International Inc. and its consolidated
subsidiaries (the "Company"). Due to the Company's 52/53 week accounting
cycle, the second quarter of 2000 ended on June 30, 2000.
NET SALES
Net sales for the second quarter of 2000 increased $25.7 million, or 11.7
percent, to $245.0 million from $219.3 million in 1999. For the six months
ended June 30, 2000, net sales increased $55.1 million, or 13.1 percent, to
$475.1 million from $420.0 million for the same period in 1999. These
increases for the three and six months ended June 30, 2000 were due primarily
to increased sales volume through the Company-operated sales centers, which
increased 16.0 percent compared to the prior year quarter and 17.5 percent
for the six month period. Sales to independent distributors increased
approximately 1.3 percent for the quarter and 2.2 percent for the six month
period, while home center sales remained flat versus last year.
GROSS PROFIT
Gross profit for the second quarter of 2000 increased $11.8 million, or 11.2
percent, to $117.5 million from $105.7 million in 1999. Gross profit for the
six months ended June 30, 2000 increased $25.9 million, or 12.8 percent, to
$228.2 million from $202.3 million for the same period in 1999. These
increases in gross profit were principally a result of increased sales
volume. Gross margin was 48.0 percent for the second quarter and six months
ended June 30, 2000 versus 48.2 percent for the comparable periods in 1999.
Increased sales volume and slightly higher selling prices were offset by
increased energy prices and start-up costs related to recent plant expansions
and modernizations.
OPERATING EXPENSES
Operating expenses in the second quarter of 2000 increased $6.0 million, or
7.9 percent, to $81.7 million from $75.7 million in the second quarter of
1999. For the six months ended June 30, 2000, operating expenses increased
$11.9 million, or 7.9 percent, to $161.9 million from $150.0 million for the
same period in 1999. These increases were due primarily to additional
spending related to new product introductions and higher costs associated
with the growth in sales. Operating expenses, as a percent of sales, in the
second quarter of 2000 improved to 33.3 percent from 34.5 percent in 1999.
Year to date, operating expenses, as a percent of sales, decreased to 34.1
percent compared to 35.7 percent for the same period in 1999. Decreases for
the three and six months ended June 30, 2000 were due primarily to higher
sales and lower corporate spending. Transportation costs, as a percent of
sales, declined to 6.4 percent of sales for the quarter versus 6.7 percent in
1999. For the six months ended June 30, 2000
11
<PAGE>
transportation costs as a percent of sales were 6.6 percent compared to 6.9
percent for the same period in 1999. Increased fuel prices were offset by
improved efficencies in planning and increased utilization of lower cost rail
transit and direct shipment activity.
OPERATING INCOME
Operating income in the second quarter of 2000 increased $5.9 million, or
19.7 percent, to $35.8 million from $29.9 million in the second quarter of
1999. For the six months ended June 30, 2000, operating income increased
$14.0 million, or 26.8 percent, to $66.3 million from $52.3 million for the
same period in 1999. Operating margin improved to 14.6 percent in the second
quarter of 2000 from 13.6 percent in 1999. For the six months ended June 30,
2000, operating margin increased to 14.0 percent from 12.5 percent in 1999.
These increases were due primarily to higher sales and decreased corporate
spending.
INTEREST EXPENSE (NET)
Interest expense (net) in the second quarter of 2000 decreased $1.9 million,
or 19.8 percent, to $7.7 million from $9.6 million in the second quarter of
1999. For the six months ended June 30, 2000, interest expense (net)
decreased $4.2 million, or 21.2 percent, to $15.6 million from $19.8 million
in the same period of 1999. During the three and six months ended June 30,
2000, borrowing requirements on the Company's credit facility decreased due
to improved financial performance, and borrowing spreads decreased from 2.0
percent to 0.875 percent on the revolver and Term A loan borrowings and from
2.5 percent to 1.75 percent on the Term B loan borrowings.
INCOME TAXES
The income tax provision for the second quarter of 2000 reflects an effective
tax rate of approximately 6.6 percent compared to 6.3 percent for the second
quarter of 1999. For the six months ended June 30, 2000 the effective rate
was approximately 6.6 percent compared to 7.8 percent for the same period in
1999. These rates reflect expected Mexico tax liabilities and U.S. state and
possession taxes based on estimated taxable income in those jurisdictions.
The decrease in effective rates in 2000 versus 1999 was due to increased
levels of pretax income, which primarily effect the federal tax jurisdiction.
No U.S. federal income tax expense was recorded for 2000 or 1999 due to an
offset by a valuation allowance against U.S. federal deferred tax assets.
The pro-forma effective tax rate, assuming no benefits from the Company's net
operating losses, would have been 38.5 percent.
NET INCOME
Net income in the second quarter of 2000 increased to $25.5 million from
$19.5 million in the second quarter of 1999. Year to date, net income
increased to $46.9 million from $30.6 million for the same period in 1999.
Net income for the three and six months ended June 30, 2000 increased due to
higher operating income and reduced interest expense.
LIQUIDITY AND CAPITAL RESOURCES
Cash flow from operations and funds available under the Company's bank credit
agreement continue to provide the Company with liquidity and capital
resources for working capital requirements, capital expenditures and debt
service. For the six months ended June 30, 2000, cash provided by operating
12
<PAGE>
activities was $37.4 million compared to $34.6 million for the same period in
1999. The increase in cash flow from operations was due primarily to
increased profitability and improvements in working capital utilization
through increased inventory turns and reduced days sales outstanding.
Net expenditures for property, plant and equipment were $16.0 million for the
six months ended June 30, 2000 compared to $7.9 million for the same period
in 1999. Expenditures for the first half of 2000 included costs for multiple
projects to expand and modernize various manufacturing facilities and for
improvements at the Company's distribution facilities. Additionally, the
Company incurred costs for leasehold improvements at various sales centers
and the start-up of a showroom in Atlanta, GA. In July 2000, the Company
amended its existing bank credit agreement (as amended, the "Fourth Amended
Credit Facility") primarily to increase capital spending and lease
limitations in support of expansion efforts. During the remainder of 2000,
the Company expects to expend approximately $20.0 to $25.0 million for
routine capital improvements and the continued expansion and modernization of
its manufacturing facilities.
Cash used in financing activities was $21.8 million for the six months ended
June 30, 2000. Cash outflows for term debt of $25.5 million and other debt of
$2.8 million were offset by cash inflows of $4.2 million on the Company's
revolving credit facility, and $2.3 million related to employee stock
purchases and the exercise of options of common stock. Total additional
availability under the Credit Facility as of June 30, 2000 was $122.6 million.
The Company believes cash flow from operating activities, together with
borrowings available under the Fourth Amended Credit Facility, will be
sufficient to fund working capital needs, capital expenditures and debt
service requirements.
The Company is involved in various proceedings relating to environmental
matters and 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.
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
ceramic tile from non-North American countries at no more than 14 percent, to
be reduced ratably to 8 1/2 percent 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
with certainty 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 11 percent,
although these duties on imports from Mexico are being phased out ratably
under NAFTA by 2008. It
13
<PAGE>
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 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 six months ended June 30, 2000 and July 2, 1999.
However, any future increases in the inflation rate, and any increases in
interest rates which affect financing costs, may negatively affect the
Company's results of operations.
PART II. OTHER INFORMATION
ITEM 4. At the annual meeting of the Company held on April 27,
2000, the shareholders of the Company approved the following
proposals:
To elect seven directors to serve the ensuing year
and until respective successors shall have been duly elected
and qualified.
<TABLE>
<CAPTION>
DIRECTORS FOR AGAINST
--------- --- -------
<S> <C> <C>
Jacques R. Sardas 52,607,997 343,088
Charles J. Pilliod, Jr. 52,599,381 351,704
Douglas D. Danforth 52,603,316 347,769
Norman E. Wells, Jr. 52,608,167 342,918
Vincent A. Mai 52,596,267 354,818
Martin C. Murer 52,609,202 341,883
John F. Fiedler 52,607,216 343,869
To ratify the appointment of Ernst & Young LLP as the
Company's independent auditors for the fiscal year ending
December 29, 2000.
FOR AGAINST ABSTAIN
--- ------- -------
52,929,639 17,421 4,025
</TABLE>
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.
14
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS
10.1 - Fourth Amendment, dated as of July 14, 2000, to the
Credit and Guarantee Agreement
27.1 - Financial Data Schedule
(b) REPORTS ON FORM 8-K.
No reports on Form 8-K were filed during the quarter ended
June 30, 2000.
15
<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 thereunto duly authorized.
DAL-TILE INTERNATIONAL INC.
---------------------------
(Registrant)
Date:
August 11, 2000 /s/ W. Christopher Wellborn
--------------- ---------------------------------------------
Executive Vice President and Chief Financial
Officer
16
