<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended January 1, 1994
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For The Transition period from ________ to ___________
Commission File No. 1-5315
SPRINGS INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
SOUTH CAROLINA 57-0252730
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
205 NORTH WHITE STREET 29715
FORT MILL, SOUTH CAROLINA (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code:
(803) 547-1500
Securities registered pursuant to Section 12(b) of the Act
Name of each exchange
Title of each class on which registered
------------------------------------ ---------------------------
Class A Common Stock; $.25 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act
None
================================================================================
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 such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for at least the past 90 days. Yes /X/ No / /
================================================================================
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. (X)
================================================================================
Aggregate market value of Springs Industries, Inc. Common Stock, excluding
treasury shares, held by nonaffiliates as of March 23, 1994, was $356,146,318.
================================================================================
As of March 23, 1994, there were 9,735,510 shares of Class A Common Stock and
7,852,087 shares of Class B Common Stock of Springs Industries, Inc.
outstanding.
================================================================================
DOCUMENTS INCORPORATED BY REFERENCE
================================================================================
Specified Portions of Annual Report to Security Holders for Fiscal Year Ended
January 1, 1994 (Parts I & II)
================================================================================
Specified Portions of Proxy Statement to Security Holders dated March 2, 1994
(Parts III & IV)
================================================================================
<PAGE> 2
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC
------------------------------------------------
FORM 10-K ANNUAL REPORT
-----------------------
SPRINGS INDUSTRIES, INC.
------------------------
* * * * * *
TABLE OF CONTENTS TO FORM 10-K
------------------------------
<TABLE>
<CAPTION>
PART I
------
ITEM PAGE
- ---- ----
<S> <C> <C>
1. BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2. PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
PART II
-------
5. MARKET FOR REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6. SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
PART II
-------
ITEM PAGE
- ---- ----
<S> <C> <C>
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA . . . . . . . . . . . . . . . . . . . . . 9
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . 9
PART III
--------
10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
11. EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS . . . . . . . . . . . . . . . . . . . . 13
PART IV
-------
14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
FINANCIAL STATEMENT SCHEDULES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
INDEPENDENT AUDITORS' REPORT
REGARDING SUPPLEMENTAL FINANCIAL STATEMENT
SCHEDULES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
</TABLE>
<PAGE> 4
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC
--------------------------------------------
FORM 10-K ANNUAL REPORT
-----------------------
SPRINGS INDUSTRIES, INC.
------------------------
PART I
ITEM 1. BUSINESS
(A) GENERAL DEVELOPMENT OF BUSINESS.
Springs Industries, Inc., a corporation organized under the laws of the
State of South Carolina, began its operations in 1888. Springs' principal
executive offices are located at 205 North White Street, Fort Mill, South
Carolina 29715 (telephone number: 803/547-1500). The Company's operations
are conducted by various divisions and legal subsidiaries, each of which
operates within either the home furnishings or specialty fabrics industry
segment.
The term "Springs" or "the Company" as used herein means Springs
Industries, Inc., and its subsidiaries unless clearly indicated otherwise.
(B) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS.
Financial information for the home furnishings and specialty fabrics
segments is incorporated by reference from the Springs Industries, Inc. 1993
Annual Report to Shareholders ("Annual Report") under the caption "Industry
Segment Information," page 12.
(C) NARRATIVE DESCRIPTION OF BUSINESS.
HOME FURNISHINGS SEGMENT -- The home furnishings segment manufactures,
purchases for resale, and markets finished products, including sheets,
pillowcases,
<PAGE> 5
bedspreads, comforters, soft window coverings, shower curtains, bath rugs and
other bath products and juvenile novelties. These products are sold primarily
under the trademarks Springmaid(R), Wamsutta(R), Supercale(R), Andre Richard(R),
Pacific(R), Custom Designs(TM), Performance(TM), Wabasso(R) and Texmade(R) and
under private labels. The segment also manufactures, purchases for resale, and
markets decorative window products, including vertical and horizontal blinds,
window shades, and window covering hardware. These products are sold primarily
under the trademarks Graber(R), Bali(R), Fashion Pleat(R), and CrystalPleat(R)
and also under private labels. During 1992 the Company acquired the marketing
and distribution operations of C. S. Brooks Canada, Inc. and the Griffiths-Kerr
division of Finlayson Enterprises, Ltd., both located in Canada, in a
continuing effort to better serve Canadian home furnishings customers and to
expand the Company's presence in the Canadian market.
SPECIALTY FABRICS SEGMENT -- The specialty fabrics segment manufactures,
purchases for resale, and markets a broad range of finished fabrics for
apparel, upholstery, industrial and specialty end uses. Apparel and
upholstery fabrics are sold principally to apparel manufacturers, to decorative
home furnishings manufacturers and to the home sewing market primarily under
the trademarks Springmaid(R), Wamsutta(R), and Ultrasuede(R) and under private
labels. Industrial fabrics, which include (i) fiber glass industrial fabrics
principally for use in printed electronic circuit boards, advanced composites
and reinforced plastics applications, and as a substrate for coating and
laminating processes, and (ii) industrial fabrics for use in the printing and
electrical industries, are sold under the Clark-Schwebel(TM) trademark. Other
specialty fabrics, which include (i) fabrics for use in antiballistic vests
and helmets, sporting goods and various other end uses, and (ii) protective and
fire retardant fabrics for use in industrial and military apparel and for
mattress coverings, draperies and upholstery, are sold under the trademarks
Firegard(R), Synergy(R), and Ultima(TM).
On March 25, 1993, Springs' subsidiary, Clark-Schwebel, Inc.,
contributed its European fiber glass subsidiaries and $8.8 million in cash to
CS-Interglas A.G., of Ulm, Germany, in consideration of a minority interest in
CS-Interglas A.G. and a convertible debenture.
RESTRUCTURING -- In 1990, the Company announced a restructuring plan for
certain parts of its operations to consolidate manufacturing operations,
convert certain finished fabric facilities to home furnishings production, and
offer early retirement to qualifying employees. For further details of this
restructuring plan, see Note 3 to the Consolidated Financial Statements, which
can be found on Page 19 of the Annual Report.
RAW MATERIALS -- Raw materials used by the Company include cotton,
polyester, and other natural and manmade fibers, fiber glass and aramid yarns,
fabrics formed from natural and manmade yarns, and dyes and chemicals. Such
raw materials are readily available; and, with the exception of certain aramid
fibers and yarns (which are used by the specialty fabrics segment in some of
its products), the Company is not dependent on any one supplier as a source for
raw materials. Any shortage in the
<PAGE> 6
cotton supply by reason of weather, disease or other factors, or significant
increases in the price of cotton or polyester, however, could adversely affect
the Company's operations.
TRADEMARKS -- The Company considers its trademarks to be of material
importance to its business. Protection for these marks is obtained, in part,
through United States and foreign trademark registrations.
The home furnishings segment uses certain licensed designs and
trademarks which may be considered to be of material importance to this
segment. These include a license agreement with Bill Blass, Ltd. and multiple
license agreements with The Walt Disney Company.
WORKING CAPITAL -- The Company's working capital requirements are funded by
its operating cash flow, commercial paper borrowings and short-term bank
borrowings. Trade receivables are, in the main, collectible in 60 days or
less.
CUSTOMERS -- In 1993, sales to Wal-Mart Stores, Inc. equaled 11% of
Springs' total sales; no other single customer accounted for ten percent or
more of Springs' total sales.
BACKLOG ORDERS -- The unfilled order position at January 1, 1994, amounted
to approximately $209 million. The unfilled order position at January 2, 1993,
was approximately $232 million. The Company's unfilled order position has
decreased in the past two years due primarily to (i) a planned shift in sales
to home furnishings from apparel fabrics (where home furnishings have
historically had shorter lead times for orders than apparel fabrics), and (ii)
an emphasis by the Company, as well as its competitors, to shorten the time
period necessary to fill orders for goods.
COMPETITIVE CONDITIONS -- The markets in which the principal products of
the Company are sold are highly competitive as to price, quality, customer
service and product design.
ENVIRONMENTAL EXPENDITURES -- The Company spent approximately $5.2 million
on environmental and related safety and health projects in 1993 and expects to
spend approximately $5.1 million in 1994.
ASSOCIATES -- Approximately 20,500 associates were employed by Springs and
its subsidiaries at the end of 1993.
<PAGE> 7
(D) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT
SALES.
International sales of home furnishings and specialty fabric products are made
through Springs' divisions and its subsidiaries. International sales accounted
for approximately 7.3 percent of total sales in 1993.
ITEM 2. PROPERTIES
The Company owns its Executive Office Building and its Research and
Development Center in Fort Mill, South Carolina, and the twenty-one story
Springs Building at 104 West 40th Street, New York, New York. The Springs
Building contains sales headquarters for two of the Company's divisions and
other staff support offices. A majority of the Springs Building is leased to
other businesses.
The Springmaid Home Fashions Division, Performance Division and Wamsutta
Home Products Division lease offices in New York, New York at 787 7th Avenue
and 1285 Avenue of the Americas. Other divisions lease additional space in
other locations for administration and sales offices and distribution centers.
The Company also owns a customer service center located near Lancaster,
South Carolina. This facility houses customer service operations, computer and
data processing operations and accounting offices.
Springs has sixteen plants used in the manufacture of grey goods, six
dyeing, printing and finishing plants, nine fabricating plants, four plants
used in the manufacture of decorative window products and four fiber glass
fabric manufacturing plants. Of these plants, twenty-four are in South
Carolina, four in North Carolina, three in Georgia, two each in Alabama and
California, and one each in Pennsylvania, Tennessee, Wisconsin and Nevada.
The home furnishings segment uses twenty-five of these plants and the
specialty fabrics segment uses eight. In addition, the home furnishings and
specialty fabrics segments share six plants. Five of these plants are leased
either through industrial revenue bond financing or through other leases. In
addition, the Pennsylvania plant is subject to a mortgage. All other plants
are owned by Spring and are unencumbered.
All plants are well maintained and in good operating condition.
<PAGE> 8
ITEM 3. LEGAL PROCEEDINGS
Information required by this Item is contained in Notes to Consolidated
Financial Statements, Note 10. - Other Matters, found on page 23 of the Annual
Report and incorporated herein by reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None reportable.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Class A Common Stock of Springs is traded on the New York Stock Exchange.
As of March 23, 1994, there were approximately 3,133 holders of record of
Class A Common Stock, and approximately 85 holders of Class B Common Stock.
No established trading market exists for Class B Common Stock. However, Class
B Common Stock may, at the election of the holder, be exchanged at any time for
Class A Common Stock.
Information required by this Item on the sales prices and dividends of the
Common Stock of Springs is incorporated by reference from page 25 of the Annual
Report under the caption "Quarterly Financial Data (Unaudited), Dividends and
Price Range of Common Stock."
ITEM 6. SELECTED FINANCIAL DATA
Information required by this Item is incorporated by reference from pages
26 and 27 of the Annual Report under the caption "Selected Financial Data."
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
Management's discussion and analysis of financial condition and results of
operations required by this Item is incorporated by reference from pages 13 and
14 of
<PAGE> 9
the Annual Report under the caption "Management's Discussion and Analysis
of Operations and Financial Condition."
In addition, in view of events that have occurred following the issuance of
the Annual Report, the Company announced on March 22, 1994, a plan to reduce
annual operating costs by at least $15 million, coupled with a general price
increase for its bedding products effective at midyear. The cost reduction
plan includes acceleration of expense-cutting programs already in progress;
deferral of certain capital projects with associated expense; reduction of
salaried jobs through consolidations, anticipated attrition and a hold on new
hiring; and efficiencies in administrative areas as a result of systems
improvements.
The cost-cutting plan was stepped up in response to the Company's lower
than expected earnings during the first two months of 1994. Home furnishings,
the larger of Springs' two business segments, experienced pressure on its sales
and margins. As a result, the Company presently expects to report first
quarter earnings in the range of $.30 - $.35 per share compared with last
year's $.51 per share (exclusive of a one-time accounting charge of $4.07 due
to the Company's adoption of Statements of Financial Accounting Standards No.
106 and No. 109).
The general price increase for the Company's bedding products was partly in
response to the expected future impact of markedly higher cotton prices.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial statements, including the report of independent certified public
accountants, and supplementary data required by this Item are incorporated by
reference from the Annual Report. See Item 14 for a list of financial
statements and the pages of the Annual Report from which they are incorporated.
Supplementary data is incorporated by reference from page 25 of the Annual
Report under the caption "Quarterly Financial Data (Unaudited), Dividends and
Price Range of Common Stock."
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
<PAGE> 10
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information about directors required by this Item is incorporated by
reference from the Company's Proxy Statement to Security Holders dated March 2,
1994, (the "Proxy Statement") under the captions "Directors, Nominees, and
Election of Directors and Beneficial Ownership of Common Stock" and
"Information Regarding the Board of Directors" on pages 2 through 6 of the
Proxy Statement. The information on Executive Officers is listed below.
Position and Business
Name Age Experience
- ---- --- ---------------------
Crandall C. Bowles 46 Executive Vice President - Springs and President
-Textile Manufacturing Group (March 1993 to
present). Executive Vice President - Growth and
Development (April 1992 to February 1993).
Director (1978 to present). President - The
Springs Company (1982 to April 1992).
C. Powers Dorsett 49 Vice President - General Counsel and Secretary
(February 1990 to present). Assistant General
Counsel, Flowers Industries, Inc. (August 1989
to January 1990). Vice President, General
Counsel and Secretary, West Point-Pepperell,
Inc. (1988-89).
Walter Y. Elisha 61 Chairman of the Board (October 1983 to present)
and Chief Executive Officer (1981 to present).
President (December 1989 to present). Director
(February 1980 to present).
Richard D. Foster 54 Vice President - Human Resources (May 1990 to
present); Manager - Human Resources, Major
Appliance Business Group, General Electric Co.
(June 1987 to May 1990).
<PAGE> 11
Stephen P. Kelbley 51 Executive Vice President - Springs (September
1991 to present). President - Specialty Fabrics
Group (March 1994 to present). Chief Financial
Officer (September 1991 to March 1994). Senior
Vice President - Finance and Chief Financial
Officer, Bausch & Lomb Incorporated (August 1984
to August 1991).
James C. McKelvey 49 Vice President - Controller (November 1993 to
present). Vice President - Controller,
Springmaid/Performance Home Fashions Division
(1987 to November 1993).
Robert W. Moser 55 Executive Vice President - Springs (July 1989 to
present). President - Specialty Fabrics Group
(March 1993 to March 1994). President - Finished
Fabrics Group (July 1989 to March 1993 ).
President - Windows Group (September 1991 to March
1993). Vice President - Finished Fabrics Group
(August 1987 to June 1989).
Thomas P. O'Connor 48 Executive Vice President - Springs (August 1992 to
present). President - Home Fashions Group
(February 1993 to present). Senior Vice President
- Springs (September 1991 to August 1992).
President - Bed and Bath Group (September 1991 to
February 1993). President - Springmaid Home
Fashions Division (1988 to August 1991).
Robert L. Thompson 57 Vice President - Public Affairs (September 1986 to
present).
<PAGE> 12
J. Spratt White 52 Senior Vice President - Growth and Development
(March 1993 to present). Senior Vice President -
Springs and President - Diversified Products Group
(February 1990 to March 1993). Senior Vice
President - Human Resources (June 1989 to May
1990.) Senior Vice President, General counsel and
Corporate Secretary (June 1985 to February 1990).
James F. Zahrn 43 Vice President - Finance and Treasurer (March 1994
to present). Vice President and Treasurer (May 1993
to March 1994). Treasurer (August 1986 to May 1993).
- ------------------------------------------
Crandall Close Bowles, an Executive Vice President and director of the Company,
and Leroy S. Close, a director of the Company, are sister and brother. There
are no other family relationships within the director and Executive Officer
group.
ITEM 11. EXECUTIVE COMPENSATION
Information required by this Item is incorporated by reference from
the Proxy Statement under the captions "Executive Officer Compensation and
Related Information," "Management Compensation and Organization Committee
Report," "Employment Agreements" and "Performance Graph" on pages 7 through 15
of the Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Information required by this Item is incorporated by reference from
the Proxy Statement under the captions "Directors, Nominees and Election of
Directors and Beneficial Ownership of Common Stock" and "Information Regarding
the Board of Directors" on pages 2 through 6 of the Proxy Statement.
<PAGE> 13
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information required by this Item is incorporated by reference from
the Proxy Statement under the caption "Compensation Committee Interlocks and
Insider Participation" and "Transactions With Certain Persons" on pages 17 and
18 of the Proxy Statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K
(a) 1. The following financial statements and independent
auditors' report are incorporated by reference from the Annual
Report as a part of this Report:
(i) Consolidated Balance Sheet (Annual Report page 16).
(ii) Consolidated Statement of Operations and Retained
Earnings (Annual Report page 15).
(iii) Consolidated Statement of Cash Flows (Annual Report
page 17).
(iv) Notes to Consolidated Financial Statements (Annual
Report pages 18 through 23).
(v) Independent Auditors' Report (Annual Report page 24).
2. The following financial statement schedules* and
independent auditors' report are filed as part of this Report:
(i) Schedule V - Property, Plant and Equipment for the
Fiscal Years Ended January 1, 1994, January 2, 1993,
and December 28, 1991. (1 page).
(ii) Schedule VI - Accumulated Depreciation of Property,
Plant and Equipment for the Fiscal Years Ended January
1, 1994, January 2, 1993, and December 28, 1991.
(1 page).
<PAGE> 14
(iii) Schedule IX - Short-Term Borrowings for the Fiscal
Years Ended January 1, 1994, January 2, 1993, and
December 28, 1991. (1 page).
(iv) Schedule X - Supplementary Income Information for the
Fiscal Years Ended January 1, 1994, January 2, 1993,
and December 28, 1991. (1 page).
(v) Independent Auditors' Report. (1 page).
*Schedules other than those included are omitted because, under applicable
rules, the omitted schedules are not required, are inapplicable or the
information required is included in the Financial Statements or in the Notes
thereto.
3. Exhibits required to be listed by Item 601 of Regulation
S-K are listed (and, where applicable, attached) in the Exhibit Index
attached hereto, which is incorporated herein by this reference.
(b) Reports on Form 8-K: No 8-K's were filed during the last
quarter of the period covered by this report.
(SIGNATURES ON NEXT PAGE)
- -------------------------
<PAGE> 15
SIGNATURES
- ----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Springs Industries, Inc. has duly caused this Report to
be signed on its behalf by the undersigned, thereunto duly authorized.
SPRINGS INDUSTRIES, INC.
By: James F. Zahrn
----------------------------
James F. Zahrn,
Vice President-Finance and
Treasurer
Date: March 30, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By: John F. Akers By: Crandall C. Bowles
--------------------------- ----------------------------
John F. Akers, Director Crandall C. Bowles, Director
Date: March 30, 1994 Date: March 30,1994
By: John L. Clendenin By: Leroy S. Close
--------------------------- ----------------------------
John L. Clendenin, Director Leroy S. Close, Director
Date: March 30, 1994 Date: March 30,1994
By: Charles W. Coker By: Walter Y. Elisha
--------------------------- ----------------------------
Charles W. Coker, Director Walter Y. Elisha, Chairman,
Date: March 30, 1994 Chief Executive Officer,
President, and Director
(Principal Executive Officer)
Date: March 30,1994
<PAGE> 16
By: Dan M. Krausse By: John H. McArthur
--------------------------- ----------------------------
Dan M. Krausse, Director John H. McArthur, Director
Date: March 30, 1994 Date: March 30, 1994
By: Aldo Papone By: Donald S. Perkins
--------------------------- ----------------------------
Aldo Papone, Director Donald S. Perkins, Director
Date: March 30, 1994 Date: March 30,1994
By: Robin B. Smith By: Sherwood H. Smith
--------------------------- ----------------------------
Robin B. Smith, Director Sherwood H. Smith, Director
Date: March 30, 1994 Date: March 30, 1994
By: Stewart Turley
---------------------------
Stewart Turley, Director
Date: March 30, 1994
By: James F. Zahrn By: James C. McKelvey
--------------------------- ----------------------------
James F. Zahrn James C. McKelvey,
Vice President-Finance Vice President and Controller
and Treasurer (Principal Accounting Officer)
(Principal Financial Officer)
Date: March 30, 1994 Date: March 30,1994
<PAGE> 17
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC
---------------------------------------
FINANCIAL STATEMENT SCHEDULES
* * * * * * * * * * * * * * * * * * * *
<PAGE> 18
<TABLE>
<CAPTION>
FINANCIAL STATEMENT SCHEDULES
SCHEDULE V
SPRINGS INDUSTRIES, INC.
------------------------
PROPERTY, PLANT AND EQUIPMENT
FOR THE FISCAL YEARS ENDED JANUARY 1, 1994, JANUARY 2, 1993, AND DECEMBER 28, 1991
(In thousands)
==================================================================================================================================
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
-------------- ------------ ------------ ------------ ------------ ------------
BALANCE AT OTHER BALANCE AT
BEGINNING OF ADDITIONS CHANGES END OF
CLASSIFICATION FISCAL YEAR AT COST RETIREMENTS ADD (DEDUCT) FISCAL YEAR
==================================================================================================================================
<S> <C> <C> <C> <C> <C>
Fiscal year ended January 1, 1994:
Land and improvements............. $ 16,546 $ 1,662 $ (106) $ (553) $ 17,549
Buildings......................... 205,190 15,186 (7,407) (7,740) 205,229
Machinery, equipment, leasehold
improvements, etc............... 883,201 78,840 (13,750) (31,015) 917,276
Construction in progress.......... 63,491 (7,399)(1) (139) (164) 55,789
---------- -------- --------- -------- ----------
Total........................... $1,168,428 $ 88,289 $ (21,402) $(39,472)(3) $1,195,843
========== ======== ========= ======== ===========
Fiscal year ended January 2, 1993:
Land and improvements............. $ 16,086 $ 519 $ (4) $ (55) $ 16,546
Buildings......................... 200,393 7,567 (1,726) (1,044) 205,190
Machinery, equipment, leasehold
improvements, etc............... 815,980 91,653 (26,024) 1,592 883,201
Construction in progress.......... 91,184 (19,039)(1) (298) (8,356) 63,491
---------- -------- --------- -------- -----------
Total........................... $1,123,643 $ 80,700 (2) $ (28,052) $ (7,863)(3) $ 1,168,428
========== ======== ========= ======== ===========
Fiscal year ended December 28, 1991:
Land and improvements............. $ 14,105 $ 2,339 $ (328) $ (30) $ 16,086
Buildings......................... 170,844 26,375 (3,111) 6,285 200,393
Machinery, equipment, leasehold
improvements, etc............... 833,352 86,520 (89,283) (14,609) 815,980
Construction in progress.......... 69,574 21,610 (1) - - 91,184
---------- -------- --------- -------- -----------
Total........................... $1,087,875 $136,844 (2) $ (92,722) $ (8,354) $ 1,123,643
========== ======== ========= ======== ===========
(1) Net change during the year.
(2) Property, plant, and equipment of acquired businesses was $355 in 1992 and $20,900 in 1991.
(3) Of this amount, ($740) in 1993 and ($4,082) in 1992 represents currency translation adjustment. In 1993, ($40,506) represents
the transfer of property of the Company's European subsidiaries to CS-Interglas A.G.
</TABLE>
<PAGE> 19
<TABLE>
<CAPTION>
FINANCIAL STATEMENT SCHEDULES
SCHEDULE VI
SPRINGS INDUSTRIES, INC.
------------------------
ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT (1)
FOR THE FISCAL YEARS ENDED JANUARY 1, 1994, JANUARY 2, 1993, AND DECEMBER 28, 1991
(In thousands)
====================================================================================================================================
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
-------------- ------------ ------------ ------------ ------------ ------------
BALANCE AT OTHER BALANCE AT
BEGINNING OF DEPRECIATION CHANGES END OF
CLASSIFICATION FISCAL YEAR EXPENSE RETIREMENTS ADD (DEDUCT) FISCAL YEAR
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
Fiscal year ended January 1, 1994:
Land and improvements............. $ 5,668 $ 372 $ (9) $ (5) $ 6,026
Buildings......................... 83,341 6,949 (4,695) (4,939) 80,656
Machinery, equipment, leasehold
improvements, etc............... 520,114 70,765 (12,395) (19,228) 559,256
-------- -------- -------- -------- --------
Total......................... $609,123 $ 78,086 $(17,099) $(24,172)(2) $645,938
======== ======== ======== ======== ========
Fiscal year ended January 2, 1993:
Land and improvements............. $ 5,357 $ 358 $ (1) $ (46) $ 5,668
Buildings......................... 74,564 6,829 (434) 2,382 83,341
Machinery, equipment, leasehold
improvements, etc............... 471,594 70,557 (20,664) (1,373) 520,114
-------- -------- -------- -------- --------
Total......................... $551,515 $ 77,744 $(21,099) $ 963(2) $609,123
======== ======== ======== ======== ========
Fiscal year ended December 28, 1991:
Land and improvements............. $ 5,051 $ 326 $ (24) $ 4 $ 5,357
Buildings......................... 69,047 6,021 (796) 292 74,564
Machinery, equipment, leasehold
improvements, etc............... 489,580 68,805 (74,909) (11,882) 471,594
-------- -------- -------- -------- --------
Total......................... $563,678 $ 75,152 $(75,729) $(11,586) $551,515
======== ======== ======== ======== ========
(1) Depreciation is calculated using the straight-line method at annual rates ranging from 2.5% to 5.0% for buildings, 5.0% to
10.0% for land improvements, and 9.1% to 33.3% for machinery, equipment, leasehold improvements, etc.
(2) Of this amount, $525 in 1993 and $2,123 in 1992 represents currency translation adjustment. In 1993, ($23,576) represents the
transfer of accumulated depreciation of the Company's European subsidiaries to CS-Interglas A.G.
</TABLE>
<PAGE> 20
<TABLE>
<CAPTION>
FINANCIAL STATEMENT SCHEDULES
SCHEDULE IX
SPRINGS INDUSTRIES, INC.
------------------------
SHORT-TERM BORROWINGS
FOR THE FISCAL YEARS ENDED JANUARY 1, 1994, JANUARY 2, 1993, AND DECEMBER 28, 1991
(In thousands)
===================================================================================================================================
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
-------------- ------------ ------------ ------------ ---------- ------------
MAXIMUM AVERAGE WEIGHTED
CATEGORY OF WEIGHTED AMOUNT AMOUNT AVERAGE
AGGREGATE BALANCE AVERAGE OUTSTANDING OUTSTANDING INTEREST RATE
SHORT-TERM AT END OF INTEREST DURING THE DURING THE DURING THE
BORROWINGS PERIOD RATE PERIOD PERIOD(2) PERIOD(3)
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Year ended January 1, 1994: PAYABLE TO BANK(1) $61,420,000 3.7% $135,500,000 $94,409,615 3.4%
Year ended January 2, 1993: PAYABLE TO BANK(1) $46,014,000 4.0% $119,000,000 $68,632,535 4.4%
Year ended December 28, 1991: PAYABLE TO BANK(1) $29,200,000 5.0% $121,000,000 $59,904,327 6.2%
(1) Represents line of credit borrowing arrangements.
(2) Computed by dividing the total of daily outstanding principal balances by 365.
(3) Computed by dividing actual interest expense by average short-term debt outstanding.
</TABLE>
<PAGE> 21
<TABLE>
<CAPTION>
FINANCIAL STATEMENT SCHEDULES
SCHEDULE X
SPRINGS INDUSTRIES, INC.
------------------------
SUPPLEMENTARY INCOME INFORMATION
FOR THE FISCAL YEARS ENDED JANUARY 1, 1994, JANUARY 2, 1993, AND DECEMBER 28, 1991
(In thousands)
==================================================================================================================================
COLUMN A COLUMN B
-------------- ------------
CHARGED TO COSTS AND EXPENSES
------------------------------------------------------
ITEM 1993 1992 1991
==================================================================================================================================
<S> <C> <C> <C>
Maintenance and repairs............................ $68,084 $69,139 $66,960
===================================================================
Depreciation and amortization of intangible
assets, preoperating costs and similar
deferrals........................................ (1) (1) (1)
Taxes, other than payroll and income taxes......... (1) (1) (1)
Royalties.......................................... (1) (1) (1)
Advertising costs.................................. (1) (1) (1)
===================================================================
(1) Less than 1% of total sales.
</TABLE>
<PAGE> 22
INDEPENDENT AUDITORS' REPORT
- ----------------------------
To the Board of Directors of
Springs Industries, Inc.
We have audited the consolidated financial statements of Springs Industries,
Inc. as of January 1, 1994 and January 2, 1993, and for each of the three
fiscal years in the period ended January 1, 1994, and have issued our report
thereon dated January 31, 1994. Such consolidated financial statements and
report are included in your 1993 Annual Report to Shareholders and are
incorporated herein by reference. Our audits also included the consolidated
financial statement schedules of Springs Industries, Inc., listed in Item 14.
These consolidated financial statement schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audits. In our opinion, such consolidated financial statement schedules, when
considered in relation to the basic consolidated financial statements taken as
a whole, present fairly in all material respects the information set forth
therein.
/s/ DELOITTE & TOUCHE
DELOITTE & TOUCHE
Charlotte, North Carolina
January 31, 1994
<PAGE> 23
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Item Page Number
---- -----------
<S> <C> <C>
(3) (a) Restated Articles of
Incorporation, restated June
1989, incorporated by
reference from Form 10-K,
filed March 26, 1990 (16 pages)
(b) By-Laws, amended as of April
30, 1990, incorporated
by reference from Form 10-Q,
filed May 14, 1990 (18 pages).
Amendment effective April 30,
1990, incorporated by reference
from Form 10-K, filed March 25,
1991 (1 page).
(10) Material Contracts - Executive Compensation
Plans and Arrangements
(a) Springs' Deferred Unit Stock
Plan, amended and restated
effective February 22, 1990,
incorporated by reference from
Form 10-K, filed March 26, 1990
(15 pages). Amendment effective
December 10, 1990, incorporated
by reference from Form 10-K, filed
March 25, 1991 (1 page). Amendment
effective August 16, 1990, incorporated
by reference from Form 10-Q,
filed November 12, 1991 (1 page).
(b) Springs' Restricted Stock Plan,
incorporated by reference from
Form 10-K, filed March 19, 1982
(6 pages). Amendment dated
August 19, 1983, incorporated by
reference from Form 10-K, filed
March 16, 1984 (1 page).
</TABLE>
<PAGE> 24
<TABLE>
<CAPTION>
Item Page Number
---- -----------
<S> <C> <C>
(c) Employment Agreement dated
July 1, 1985, between Springs and
Walter Y. Elisha, incorporated
by reference from Form 10-K,
filed March l4, 1986 (9 pages).
(d) Springs' Deferred Compensation
Plan, as amended and restated on
December 20, 1984, incorporated
by reference from Form 10-K,
filed March 15, 1985 (17 pages).
Amendment dated June 17, 1988,
incorporated by reference from
Form 10-K, filed March 20, 1989
(1 page). Amendment effective
March 1, 1990, incorporated by
reference from Form 10-K, filed
March 26, 1990 (3 pages).
Amendment approved on December
10, 1990, incorporated by
reference from Form 10-Q, filed
May 13, 1991 (3 pages).
(e) Springs' Senior Executive
Supplemental Retirement Plan,
incorporated by reference from
Form 10-K, filed March 19, 1982
(11 pages). Amendment dated
February 26, 1987, incorporated
by reference from Form 10-K,
filed March 27, 1987 (4 pages).
Amendment dated June 20, 1991,
incorporated by reference from
Form 10-K, filed March 25, 1992
(1 page).
</TABLE>
<PAGE> 25
<TABLE>
<CAPTION>
Item Page Number
---- -----------
<S> <C> <C>
(f) Springs' Shadow Retirement
Plan, incorporated by reference
from Form 10-K, filed March 19,
1982 (6 pages). Amendment
adopted October 18, 1990,
incorporated by reference
from Form 10-K, filed
March 25, 1991 (3 pages).
(g) Springs' Deferred Compensation
Plan for Outside Directors,
adopted April 20, 1984,
incorporated by reference from
Form 10-K, filed March 15, 1985
(19 pages). Amendment dated
February 26, 1987, incorporated
by reference from Form 10-K,
filed March 25, 1988 (1 page).
(h) Springs' Outside Directors COLI
Deferred Compensation Plan
adopted December 12, 1985,
incorporated by reference from
Form 10-K, filed March 14, 1986
(10 pages).
(i) Springs' Senior Management COLI
Deferred Compensation Plan
adopted December 12, 1985,
incorporated by reference from
Form 10-K, filed March 14, 1986
(11 pages).
(j) Springs' 1991 Incentive Stock
Plan, as approved by shareholders
on April 15, 1991, incorporated by
reference from the Company's
Proxy Statement to Shareholders
dated February 27, 1991, under
the caption "Exhibit A" on pages
A-1 through A-12 of such
Proxy Statement.
</TABLE>
<PAGE> 26
<TABLE>
<CAPTION>
Item Page Number
---- -----------
<S> <C> <C>
(k) Springs' 1991 Restricted Stock
Plan For Outside Directors, as
approved by the Company's
shareholders on April 15,
1991, incorporated by
reference from the Company's
Proxy Statement to Shareholders
dated February 27, 1991, under the
caption "Exhibit B" on pages B-1
through B-4 of such Proxy
Statement.
(l) Springs' Amended and Restated
Achievement Incentive Plan, as
approved by the Board of Directors
on April 13, 1992, incorporated by
reference from Form 10-Q, filed
May 11, 1992 (12 pages).
Amendment approved by the Board
of Directors on February 18, 1993,
incorporated by reference from
Form 10-K, filed March 31, 1993
(10 pages).
(m) Springs' Contingent Compensation
Plan adopted by the Board of
Directors on June 20, 1991,
incorporated by reference from
Form 10-Q, filed November 12,
1991 (6 pages).
(10) Material Contracts - Other
(a) Master Agreement and Rate
Swap Agreement, dated March
24, 1986, between Springs
Industries, Inc. and the
Bank of New England, N.A.,
incorporated by reference
from Form 10-Q, filed
August 19, 1986 (12 pages).
</TABLE>
<PAGE> 27
<TABLE>
<CAPTION>
Item Page Number
---- -----------
<S> <C> <C>
(b) Loan Agreement, dated July 7,
1986, among Springs Industries,
Inc., Wachovia Bank, N.A.,
Chemical Bank, Manufacturers
Hanover Bank (Delaware), NCNB
National Bank of North Carolina
and The South Carolina National
Bank, incorporated by reference
from Form 10-Q, filed
August 19, 1986 (66 pages).
Amendments effective June 5,
1989, and September 29, 1989,
incorporated by reference from
Form 10-K, filed March 26, 1990
(4 pages). Amendment effective
December 27, 1990, incorporated
by reference from Form 10-K,
filed March 25, 1991 (2 pages).
Amendment effective May 13,
1992, incorporated by reference
from Form 10-K, filed March 31,
1993 (2 pages). Amendment effective
March 27, 1993, filed herein
(3 pages).
(c) Note Agreement for 9.375% Senior
Notes Due July 1, 2006, dated as
of July 7, 1986, incorporated by
reference from Form 10-Q, filed
August 19, 1986 (53 pages).
Amendment effective September
29, 1989, incorporated by
reference from Form 10-K, filed
March 26, 1990 (2 pages).
Amendment effective December 27,
1990, incorporated by reference
from Form 10-K, filed March 25,
1991 (2 pages). Amendment effective
March 29, 1992, incorporated
by reference from Form 10-K, filed
March 31, 1993 (2 pages). Amendment
effective March 27, 1993, filed herein
(3 pages).
</TABLE>
<PAGE> 28
<TABLE>
<CAPTION>
Item Page Number
---- -----------
<S> <C> <C>
(d) Long-term revolving credit
agreements among Springs and
several banks, dated February
1 or 2, 1990, as back-up for
Springs' commercial paper
program; commercial paper
issuing and paying agency
agreement between Springs and
Morgan Guaranty Trust Company
of New York dated February 5,
1990, incorporated by reference
from Form 10-K, filed March 26,
1990 (52 pages). Amendment
effective December 27, 1990,
incorporated by reference
from Form 10-K, filed March 25,
1991 (10 pages). Amendment
effective June 3, 1992, incorporated
by reference from Form 10-K, filed
March 31, 1993 (5 pages). Amendment
effective March 27, 1993, filed
herein (3 pages).
(e) Note Agreement for 9.60% Senior
Notes Due July 1, 2006, dated
as of May 29, 1991, incorporated
by reference from Form 10-K, filed
March 25, 1992 (47 pages).
Amendment effective March 29,
1992, incorporated by reference
from Form 10-K, filed March 31,
1993 (1 page). Amendment effective
March 27, 1993, filed herein (3 pages).
</TABLE>
<PAGE> 29
<TABLE>
<CAPTION>
Item Page Number
---- -----------
<S> <C> <C>
(f) Springs' Commercial paper issuing
and paying agency agreement between
Springs and Chemical Bank dated
July 17, 1992; Commercial paper
dealer agreement between Springs
and Goldman Sachs Money Markets,
L.P. dated July 16,1992; Long-term
revolving credit agreements among
Springs and several banks, dated
July 10 - 21, 1992, as back-up for
Springs' commercial paper program;
all of which are incorporated by
reference from Form 10-Q, filed
July 31, 1992 (49 pages). Amendment
effective March 27, 1993, filed herein
(4 pages).
(g) Long-Term revolving credit
agreement between Springs and
Trust Company Bank, dated
April 1, 1993, as back-up for
Springs' commercial paper program,
incorporated by reference from
Form 10-Q, filed May 17, 1993
(4 pages).
(13) Portions of the 1993 Annual Report
to Shareholders which have been expressly
incorporated by reference filed herein
(16 pages)
(21) List of Subsidiaries of Springs,
filed herein (1 page)
(23) Consent of expert for Form S-8
Registration Statement for 1991
Incentive Stock Plan and 1991
Restricted Stock Plan for Outside
Directors filed herein (1 page)
</TABLE>
<PAGE> 1
AMENDMENT TO LOAN AGREEMENT
This Amendment to Loan Agreement, made as of May ___, 1993, among SPRINGS
INDUSTRIES, INC., a South Carolina corporation (hereinafter called the
"Company"); WACHOVIA BANK OF NORTH CAROLINA, N.A., CHEMICAL BANK, NATIONSBANK
OF NORTH CAROLINA, N.A. and THE SOUTH CAROLINA NATIONAL BANK (hereinafter
called the "Banks"); and WACHOVIA BANK OF NORTH CAROLINA, N.A., as Agent for
the Banks (hereinafter in such capacity called the "Agent");
W I T N E S S E T H:
WHEREAS, the Company and the Banks entered into a Loan Agreement dated as of
July 7, 1986; and
WHEREAS, the Loan Agreement has been amended by four Amendments to the Loan
Agreement, made as of June 5, 1989, September 29, 1989, December 27, 1990 and
May 13, 1992, among the Company and the Banks (the Loan Agreement and the
Amendments being hereinafter referred to as the Loan Agreement); and
WHEREAS, the Company, the Banks and the Agent have agreed to an additional
amendment to the Loan Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein and in the Loan Agreement contained, the parties agree to amend the Loan
Agreement effective March 27, 1993, as follows:
1. The definition of "Funded Debt" which appears on page 5 of the Loan
Agreement is hereby amended by deleting clause (i) and substituting in
lieu thereof the following new clause (i):
"(i) any obligation payable more than one year from the date of creation
thereof (including any portion thereof which becomes a current liability),
which under generally accepted accounting principles is shown on the
balance sheet as a liability (excluding reserves for deferred income
taxes, reserves for post retirement health and welfare benefits
established pursuant to SFAS 106, and other reserves to the extent that
such reserves do not constitute an obligation and any unfunded pension
liability);"
<PAGE> 2
2. The definition of "Shareholders' Equity" which appears on page 9 of the
Loan Agreement is hereby amended and restated to read as follows:
"Shareholders' Equity" shall mean, at any time, the aggregate of
Subordinated Indebtedness plus the sum of the following accounts set forth
in a consolidated balance sheet of the Company and its Subsidiaries,
prepared in accordance with generally accepted accounting principles and
applied on a consistent basis:
(a) the par or stated value of all outstanding capital stock;
(b) capital surplus;
(c) retained earnings; and
(d) the amount of charges on the Company's books for post retirement
health and welfare benefits pursuant to the Financial Accounting
Standards Board Statement of Financial Accounting Standards No.
106 ("SFAS 106").
3. The definition of "Consolidated Net Earnings" set forth in Section 6.08 of
the Loan Agreement is hereby amended and restated to read as follows:
"Consolidated Net Earnings" shall mean: (i) consolidated gross revenues
of the Company and its Subsidiaries, less all operating and non-operating
expenses of the Company and its Subsidiaries, including all charges of a
proper character (including current additions to reserves and taxes on
income but excluding taxes on any gains excluded from the definition
contained in this sentence and excluding charges, recorded during the
fiscal quarter ended April 3, 1993, for post retirement health and welfare
benefits pursuant to SFAS 106); provided, however, gross revenues shall
not include any gains resulting from the write-up of assets, or any
earnings of any corporation acquired by the Company or any Subsidiary in a
pooling of interests for any year prior to the fiscal year of acquisition,
all to be determined in accordance with generally accepted accounting
principles except as provided in this definition."
4. Section 6.06 of the Loan Agreement is hereby amended by restating clause
(e) of Section 6.06 to read as follows:
"(e) the investment of the Company at April 3, 1993 in Asahi-Schwebel
Company and CS-Interglas A.G., and"
5. Except as herein amended, the terms and provisions of the Loan Agreement
shall be and remain in full force and effect.
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused these Amendments to Loan
Agreement to be executed as of this ____ day of May 1993.
SPRINGS INDUSTRIES, INC. CHEMICAL BANK
By: /s/ By: /s/
------------------------------- --------------------------------
Treasurer Vice President
WACHOVIA BANK OF NORTH NATIONSBANK OF NORTH CAROLINA,
CAROLINA, N.A., individually N.A.
and as Agent,
By: /s/ By: /s/
------------------------------- --------------------------------
Vice President Vice President
THE SOUTH CAROLINA NATIONAL
BANK
By: /s/
--------------------------------
Vice President
<PAGE> 1
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
c/o Prudential Capital Group
Four Gateway Center
Newark, New Jersey 07102
June 7, 1993
James F. Zahrn, Treasurer
Springs Industries, Inc.
P.O. Box 70
Fort Mill, SC 29716
Gentlemen:
Reference is made to (i) the Note Agreement dated July 7, 1986 (the "1986
Agreement") and (ii) the Note Agreement dated May 29, 1991 (the "1991
Agreement") each between SPRINGS INDUSTRIES, INC. (the "Company") and THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA ("Prudential"), as heretofore amended
(collectively, the 1986 Agreement and the 1991 Agreement as heretofore amended
are referred to herein as the "Agreements").
Pursuant to the Company's request and subject to the Company's written
acceptance hereof, Prudential consents and agrees that effective March 27,
1993:
1. The definition of "Consolidated Tangible Net Worth" in paragraph 10
of each of the Agreements is amended to read in its entirety as
follows:
"Consolidated Tangible Net Worth" shall mean, as of the time of any
determination thereof, the excess of (1) the sum of (i) the par
value (or value stated on the books of the Company) of the capital
stock of all classes of the Company, plus (or minus in the case of
a surplus deficit), (ii) the amount of the consolidated surplus,
whether capital or earned, of the Company and its Subsidiaries, and
(iii) the amount of charges for post retirement health and welfare
benefits pursuant to the Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 106 ("SFAS 106")
over (2) the sum of treasury stock, unamortized debt discount and
expense, goodwill, trademarks, tradenames, patents, deferred
charges and other intangible assets (other than those relating to
the acquisition of M. Lowenstein Corporation and the unamortized
interest rate hedge loss incurred by the Company in April of 1986
in connection with the refinancing of certain debt incurred in
connection with such acquisition) and any writeup of the value of
any assets after January 4, 1986; all determined on a consolidated
basis for the Company and all Subsidiaries in accordance with
generally accepted accounting principles.
<PAGE> 2
James F. Zahrn, Treasurer
Springs Industries, Inc.
June 7, 1993
Page 2
2. The definition of "Funded Debt" in paragraph 10 of each of the
Agreements is amended by deleting clause (i) and substituting in
lieu thereof the following new clause (i):
"(i) any obligation payable more than one year from the date of
creation thereof (including any portion thereof which becomes a
current liability), which under generally accepted accounting
principles is shown on the balance sheet as a liability (excluding
reserves for deferred income taxes, reserves for post retirement
health and welfare benefits established pursuant to SFAS 106, and
other reserves to the extent that such reserves do not constitute
an obligation and any unfunded pension liability)";
3. The definition of "Net Income" in paragraph 10 of each of the
Agreements is amended by adding the following sentence at the end
of the definition:
"Provided, however, Net Income as determined pursuant to the
preceding sentence shall be increased by the amount of charges
recorded during the fiscal quarter ended April 3, 1993, for post
retirement health and welfare benefits pursuant to SFAS 106."
4. The definition of "Restricted Investment" in paragraph 10 of each
of the Agreements is amended by deleting clause (vi) and
substituting in lieu thereof the following new clause (vi):
"(vi) Investments in Asahi-Schwebel Co., Ltd. limited to
$13,000,000 at any time (exclusive of undistributed earnings) and
investments in CS-Interglas A.G. (formerly Interglas A.G.) limited
to $26,000,000 at any time (exclusive of undistributed earnings);"
<PAGE> 3
James F. Zahrn, Treasurer
Springs Industries, Inc.
June 7, 1993
Page 3
If you are in agreement with the foregoing, please sign the form of acceptance
on the enclosed counterparts of this letter and return them to Prudential,
whereupon this letter shall become a binding agreement between the Company and
Prudential
Very truly yours,
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /s/
-----------------------------
Vice President
The foregoing agreement is hereby accepted as
of the date first above written.
SPRINGS INDUSTRIES, INC.
By: /s/
--------------------------------
James F. Zahrn, Treasurer
<PAGE> 1
May 7, 1993
Chemical Bank
270 Park Avenue
New York, NY 10017-2070
Attention: William T. Hobbs, II, Vice President
RE: CREDIT AGREEMENT DATED FEBRUARY 1, 1990
Dear Bill:
This will confirm the agreement of Springs and the Bank to amend, effective
March 27, 1993, paragraph 3 of the section in the credit agreement between
Springs and the Bank dated February 1, 1990 (the "Credit Agreement"), which is
designated as "Representations and Warranties," to provide that the reference
to Loan Agreement includes the following amendments to the Loan Agreement (the
"Amendments"):
Amendments dated June 5, 1989; September 29, 1989; December 27, 1990, May
13, 1992 and May __, 1993
A copy of the Amendments is enclosed. The Bank and Springs agree that Springs
shall not be in default of the Credit Agreements as long as it satisfies the
referenced sections of the Loan Agreement as amended by the Amendments and its
other obligations under the Loan Agreement.
Please signify the Bank's confirmation of our agreement by signing and
returning to me the enclosed copy of this letter.
Very truly yours,
CONFIRMATION OF AGREEMENT:
James F. Zahrn By: /s/
----------------------
Title: /s/
-----------------------
<PAGE> 2
May 7, 1993
NationsBank
NationsBank Corporate Center
100 North Tryon Street
NC1-007-08-11
Charlotte, NC 28255
Attention: E. Phifer Helms, Vice President
RE: CREDIT AGREEMENT DATED FEBRUARY 1, 1990
Dear Phifer:
This will confirm the agreement of Springs and the Bank to amend, effective
March 27, 1993, paragraph 3 of the section in the credit agreement between
Springs and the Bank dated February 1, 1990 (the "Credit Agreement"), which is
designated as "Representations and Warranties," to provide that the reference
to Loan Agreement includes the following amendments to the Loan Agreement (the
"Amendments"):
Amendments dated June 5, 1989; September 29, 1989; December 27, 1990, May
13, 1992 and May __, 1993
A copy of the Amendments is enclosed. The Bank and Springs agree that Springs
shall not be in default of the Credit Agreements as long as it satisfies the
referenced sections of the Loan Agreement as amended by the Amendments and its
other obligations under the Loan Agreement.
Please signify the Bank's confirmation of our agreement by signing and
returning to me the enclosed copy of this letter.
Very truly yours,
CONFIRMATION OF AGREEMENT:
James F. Zahrn By: /s/
-----------------------
Title: /s/
---------------------------
<PAGE> 3
May 7, 1993
Wachovia Bank of North Carolina, N.A.
Post Office Box 31608
Charlotte, NC 28231
Attention: Joanne M. Starnes, Vice President
RE: CREDIT AGREEMENT DATED FEBRUARY 1, 1990
Dear Joanne:
This will confirm the agreement of Springs and the Bank to amend, effective
March 27, 1993, paragraph 3 of the section in the credit agreement between
Springs and the Bank dated February 1, 1990 (the "Credit Agreement"), which is
designated as "Representations and Warranties," to provide that the reference
to Loan Agreement includes the following amendments to the Loan Agreement (the
"Amendments"):
Amendments dated June 5, 1989; September 29, 1989; December 27, 1990, May
13, 1992 and May __, 1993
A copy of the Amendments is enclosed. The Bank and Springs agree that Springs
shall not be in default of the Credit Agreements as long as it satisfies the
referenced sections of the Loan Agreement as amended by the Amendments and its
other obligations under the Loan Agreement.
Please signify the Bank's confirmation of our agreement by signing and
returning to me the enclosed copy of this letter.
Very truly yours,
CONFIRMATION OF AGREEMENT:
James F. Zahrn By: /s/
-----------------------
Title: /s/
--------------------------
<PAGE> 1
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
c/o Prudential Capital Group
Four Gateway Center
Newark, New Jersey 07102
June 7, 1993
James F. Zahrn, Treasurer
Springs Industries, Inc.
P.O. Box 70
Fort Mill, SC 29716
Gentlemen:
Reference is made to (i) the Note Agreement dated July 7, 1986 (the "1986
Agreement") and (ii) the Note Agreement dated May 29, 1991 (the "1991
Agreement") each between SPRINGS INDUSTRIES, INC. (the "Company") and THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA ("Prudential"), as heretofore amended
(collectively, the 1986 Agreement and the 1991 Agreement as heretofore amended
are referred to herein as the "Agreements").
Pursuant to the Company's request and subject to the Company's written
acceptance hereof, Prudential consents and agrees that effective March 27,
1993:
1. The definition of "Consolidated Tangible Net Worth" in paragraph 10
of each of the Agreements is amended to read in its entirety as
follows:
"Consolidated Tangible Net Worth" shall mean, as of the time of any
determination thereof, the excess of (1) the sum of (i) the par
value (or value stated on the books of the Company) of the capital
stock of all classes of the Company, plus (or minus in the case of
a surplus deficit), (ii) the amount of the consolidated surplus,
whether capital or earned, of the Company and its Subsidiaries, and
(iii) the amount of charges for post retirement health and welfare
benefits pursuant to the Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 106 ("SFAS 106")
over (2) the sum of treasury stock, unamortized debt discount and
expense, goodwill, trademarks, tradenames, patents, deferred
charges and other intangible assets (other than those relating to
the acquisition of M. Lowenstein Corporation and the unamortized
interest rate hedge loss incurred by the Company in April of 1986
in connection with the refinancing of certain debt incurred in
connection with such acquisition) and any writeup of the value of
any assets after January 4, 1986; all determined on a consolidated
basis for the Company and all Subsidiaries in accordance with
generally accepted accounting principles.
<PAGE> 2
James F. Zahrn, Treasurer
Springs Industries, Inc.
June 7, 1993
Page 2
2. The definition of "Funded Debt" in paragraph 10 of each of the
Agreements is amended by deleting clause (i) and substituting in
lieu thereof the following new clause (i):
"(i) any obligation payable more than one year from the date of
creation thereof (including any portion thereof which becomes a
current liability), which under generally accepted accounting
principles is shown on the balance sheet as a liability (excluding
reserves for deferred income taxes, reserves for post retirement
health and welfare benefits established pursuant to SFAS 106, and
other reserves to the extent that such reserves do not constitute
an obligation and any unfunded pension liability)";
3. The definition of "Net Income" in paragraph 10 of each of the
Agreements is amended by adding the following sentence at the end
of the definition:
"Provided, however, Net Income as determined pursuant to the
preceding sentence shall be increased by the amount of charges
recorded during the fiscal quarter ended April 3, 1993, for post
retirement health and welfare benefits pursuant to SFAS 106."
4. The definition of "Restricted Investment" in paragraph 10 of each
of the Agreements is amended by deleting clause (vi) and
substituting in lieu thereof the following new clause (vi):
"(vi) Investments in Asahi-Schwebel Co., Ltd. limited to
$13,000,000 at any time (exclusive of undistributed earnings) and
investments in CS-Interglas A.G. (formerly Interglas A.G.) limited
to $26,000,000 at any time (exclusive of undistributed earnings);"
<PAGE> 3
James F. Zahrn, Treasurer
Springs Industries, Inc.
June 7, 1993
Page 3
If you are in agreement with the foregoing, please sign the form of acceptance
on the enclosed counterparts of this letter and return them to Prudential,
whereupon this letter shall become a binding agreement between the Company and
Prudential
Very truly yours,
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /s/
-----------------------------
Vice President
The foregoing agreement is hereby accepted as
of the date first above written.
SPRINGS INDUSTRIES, INC.
By: /s/
--------------------------------
James F. Zahrn, Treasurer
<PAGE> 1
May 7, 1993
Wachovia Bank of North Carolina, N.A.
Post Office Box 31608
Charlotte, NC 28231
Attention: Joanne M. Starnes, Vice President
RE: CREDIT AGREEMENT DATED JULY 10, 1992
Dear Joanne:
This will confirm the agreement of Springs and the Bank to amend, effective
March 27, 1993, paragraph 3 of the section in the credit agreement between
Springs and the Bank dated July 10, 1992 (the "Credit Agreement"), which is
designated as "Representations and Warranties," to provide that the reference
to Loan Agreement includes the following amendments to the Loan Agreement (the
"Amendments"):
Amendments dated June 5, 1989; September 29, 1989; December 27, 1990, May
13, 1992 and May __, 1993
A copy of the Amendments is enclosed. The Bank and Springs agree that Springs
shall not be in default of the Credit Agreements as long as it satisfies the
referenced sections of the Loan Agreement as amended by the Amendments and its
other obligations under the Loan Agreement.
Please signify the Bank's confirmation of our agreement by signing and
returning to me the enclosed copy of this letter.
Very truly yours,
CONFIRMATION OF AGREEMENT:
James F. Zahrn By: /s/
----------------------
Title: /s/
------------------------
<PAGE> 2
May 7, 1993
NationsBank
NationsBank Corporate Center
100 North Tryon Street
NC1-007-08-11
Charlotte, NC 28255
Attention: E. Phifer Helms, Vice President
RE: CREDIT AGREEMENT DATED JULY 10, 1992
Dear Phifer:
This will confirm the agreement of Springs and the Bank to amend, effective
March 27, 1993, paragraph 3 of the section in the credit agreement between
Springs and the Bank dated July 10, 1992 (the "Credit Agreement"), which is
designated as "Representations and Warranties," to provide that the reference
to Loan Agreement includes the following amendments to the Loan Agreement (the
"Amendments"):
Amendments dated June 5, 1989; September 29, 1989; December 27, 1990, May
13, 1992 and May __, 1993
A copy of the Amendments is enclosed. The Bank and Springs agree that Springs
shall not be in default of the Credit Agreements as long as it satisfies the
referenced sections of the Loan Agreement as amended by the Amendments and its
other obligations under the Loan Agreement.
Please signify the Bank's confirmation of our agreement by signing and
returning to me the enclosed copy of this letter.
Very truly yours,
CONFIRMATION OF AGREEMENT:
James F. Zahrn By: /s/
-----------------------
Title: /s/
-------------------------
<PAGE> 3
May 7, 1993
Chemical Bank
270 Park Avenue
New York, NY 10017-2070
Attention: William T. Hobbs, II, Vice President
RE: CREDIT AGREEMENT DATED JULY 17, 1992
Dear Bill:
This will confirm the agreement of Springs and the Bank to amend, effective
March 27, 1993, paragraph 3 of the section in the credit agreement between
Springs and the Bank dated July 17, 1992 (the "Credit Agreement"), which is
designated as "Representations and Warranties," to provide that the reference
to Loan Agreement includes the following amendments to the Loan Agreement (the
"Amendments"):
Amendments dated June 5, 1989; September 29, 1989; December 27, 1990, May
13, 1992 and May __, 1993
A copy of the Amendments is enclosed. The Bank and Springs agree that Springs
shall not be in default of the Credit Agreements as long as it satisfies the
referenced sections of the Loan Agreement as amended by the Amendments and its
other obligations under the Loan Agreement.
Please signify the Bank's confirmation of our agreement by signing and
returning to me the enclosed copy of this letter.
Very truly yours,
CONFIRMATION OF AGREEMENT:
James F. Zahrn By: /s/
-----------------------
Title: /s/
----------------------
<PAGE> 4
May 7, 1993
Citibank, N.A.
399 Park Avenue
12th Floor, Zone 15
New York, NY 10043
Attention: Arnold J. Ziegel, Vice President
RE: CREDIT AGREEMENT DATED JULY 21, 1992
Dear Arnie:
This will confirm the agreement of Springs and the Bank to amend, effective
March 27, 1993, paragraph 3 of the section in the credit agreement between
Springs and the Bank dated July 21, 1992 (the "Credit Agreement"), which is
designated as "Representations and Warranties," to provide that the reference
to Loan Agreement includes the following amendments to the Loan Agreement (the
"Amendments"):
Amendments dated June 5, 1989; September 29, 1989; December 27, 1990, May
13, 1992 and May __, 1993
A copy of the Amendments is enclosed. The Bank and Springs agree that Springs
shall not be in default of the Credit Agreements as long as it satisfies the
referenced sections of the Loan Agreement as amended by the Amendments and its
other obligations under the Loan Agreement.
Please signify the Bank's confirmation of our agreement by signing and
returning to me the enclosed copy of this letter.
Very truly yours,
CONFIRMATION OF AGREEMENT:
James F. Zahrn By: /s/
----------------------------
Title: /s/
-----------------------
<PAGE> 1
Exhibit 13
I N D U S T R Y S E G M E N T
I N F O R M A T I O N (1)
Springs Industries, Inc.
SALES PER INDUSTRY
SEGMENT (millions)
(Graph)
EARNINGS PER INDUSTRY
SEGMENT (millions)
(Graph)
<TABLE>
<CAPTION>
(In millions)
1993 1992(2) 1991
<S> <C> <C> <C>
TRADE SALES:
Home furnishings . . . . . . . . . . . . $ 1,386.4 $ 1,278.4 $ 1,100.8
Specialty fabrics . . . . . . . . . . . . 636.4 697.3 789.6
- -------------------------------------------------------------------------------------------
TOTAL . . . . . . . . . . . . . . . $ 2,022.8(3) $ 1,975.7 $ 1,890.4
===========================================================================================
PROFIT FROM OPERATIONS:
Home furnishings . . . . . . . . . . . . $ 99.8 $ 100.5 $ 60.2
Specialty fabrics . . . . . . . . . . . 22.1 12.7 19.3
- -------------------------------------------------------------------------------------------
TOTAL . . . . . . . . . . . . . . . $ 121.9 $ 113.2 $ 79.5
- -------------------------------------------------------------------------------------------
Interest expense . . . . . . . . . . . . . . 30.3 31.4 32.3
Other (income) expense . . . . . . . . . . . 7.8 1.8 (2.5)
- --------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES AND
CUMULATIVE EFFECT OF ADOPTION OF
SFAS NOS. 106 & 109 . . . . . . . . $ 83.8 $ 80.0 $ 49.7
===========================================================================================
IDENTIFIABLE ASSETS AT YEAR END:
Home furnishings . . . . . . . . . . . . $ 957.3 $ 894.5 $ 851.3
Specialty fabrics . . . . . . . . . . . 461.2 489.6 535.5
LIFO Reserve . . . . . . . . . . . . . . (129.2) (137.8) (141.3)
Corporate . . . . . . . . . . . . . . . 2.8 4.0 5.8
- -------------------------------------------------------------------------------------------
TOTAL . . . . . . . . . . . . . . . $ 1,292.1 $ 1,250.3 $ 1,251.3
- -------------------------------------------------------------------------------------------
CAPITAL EXPENDITURES:
Home furnishings . . . . . . . . . . . . $ 71.0 $ 59.3 $ 87.3
Specialty fabrics . . . . . . . . . . . . 17.3 21.0 28.6
- -------------------------------------------------------------------------------------------
TOTAL . . . . . . . . . . . . . . . $ 88.3 $ 80.3 $ 115.9
===========================================================================================
DEPRECIATION AND AMORTIZATION:
Home furnishings . . . . . . . . . . . . $ 64.1 $ 60.5 $ 53.4
Specialty fabrics . . . . . . . . . . . . 23.0 26.9 32.5
- -------------------------------------------------------------------------------------------
TOTAL . . . . . . . . . . . . . . . $ 87.1 $ 87.4 $ 85.9
===========================================================================================
</TABLE>
(1) This schedule provides consolidated financial information by segment,
but not financial information of the segments as separate entities.
Profit from operations represents sales less cost of goods sold and
selling, general and administrative expenses. The allocation of the
LIFO reserve and corporate assets (cash and cash equivalents) to the
segments is not practicable. Segment information has been restated
for prior years as a result of a change in reporting segments for the
current year. See notes to financial statements for further
discussion regarding industry segments.
(2) 53 weeks
(3) Sales for 1993 include sales of $222.4 million to one major customer,
$172.1 million from the home furnishings segment and $50.3 million
from the specialty fabrics segment.
12
<PAGE> 2
M A N A G E M E N T ' S D I S C U S S I O N A N D A N A L Y S I S
O F O P E R A T I O N S A N D F I N A N C I A L C O N D I T I O N
A ten-year summary of selected financial data and a three-year analysis of
industry segment information appear on pages 26 through 27 and page 12.
RESULTS OF OPERATIONS
- --------------------------------------------------------------------------------
1993 COMPARED WITH 1992
GENERAL
Results for 1993 reflect improving retail markets for home furnishings,
benefits from continued cost control, and improved operating efficiencies
resulting from modernization and restructuring. 1993 also reflects the
Company's first full year of operations in Canada.
Commencing in 1993, the Company has changed the financial statement
presentation of its segments to reflect the changing nature of its business,
the increased emphasis on its home furnishings business, and the similarities
of the markets for its specialty fabrics. The specialty fabrics segment now
combines the finished fabrics and industrial fabrics segments.
On March 25, 1993, Springs' subsidiary, Clark-Schwebel Fiber Glass, contributed
its European fiberglass subsidiaries and $8.8 million in cash to CS-Interglas
A.G., of Ulm, Germany, in consideration for a minority equity interest in
CS-Interglas A.G. and a convertible debenture. Accordingly, the results of the
European fiberglass business are now accounted for under the equity method of
accounting.
SALES
Annual sales in 1993 exceeded two billion dollars for the first time,
reflecting a two percent increase over sales reported in 1992. Increased home
furnishings sales were partially offset by a decline in sales volume in
specialty fabrics. Home furnishings sales improved eight percent due in part
to including a full year of the Company's Canadian operations in 1993. Without
the effect of the Canadian operations, home furnishings sales would have
increased four percent as a result of increased promotional programs and an
improving retail economy. The Company's specialty fabrics segment, a portion
of which has undergone a planned downsizing since 1988, reported sales nine
percent lower. The decrease resulted from the transfer of our European
subsidiaries to CS-Interglas A.G. in March 1993 and a softer retail market for
apparel and piece goods, which offset improved volume in the U. S. fiberglass
business. Without the effect of the transfer of European subsidiaries,
specialty fabrics sales would have declined five percent.
EARNINGS
Before one-time charges relating to the first quarter adoption of two new
financial accounting standards, net income for 1993 increased to $47.3 million
or $2.65 per share, a six percent improvement over 1992 net income of $44.5
million or $2.50 per share. Including these one-time charges, a net loss of
$25.3 million or $1.42 per share was reported in 1993.
Operating profits of $121.9 million in 1993 were eight percent higher than
1992. The home furnishings segment reported operating profit of $99.8 million,
only slightly below the record level of $100.5 million in 1992. The home
furnishings segment results reflect continued strong revenue performance as
well as cost reductions resulting from modernization. However, this benefit
was offset by lower margins due to increased promotional sales.
Despite lower sales, the specialty fabrics segment reported operating profits
of $22.1 million compared to $12.7 million in 1992. The improvement results
from continued cost reductions from restructuring and higher sales volume in
the fiberglass businesses. This segment's profit increase was also affected by
the transfer of the European fiberglass businesses, in March of 1993, to
CS-Interglas A.G. Without the effects of the transfer of the European
businesses, the specialty fabrics segment would have reported a 17 percent
increase in operating profits in 1993.
Net income for 1993 was unfavorably impacted by the newly enacted federal
income tax rate increase as well as foreign losses which did not give rise to a
tax benefit. However, foreign losses in 1993 were less than 1992 resulting in
a decrease in the effective tax rate to 43.6 percent in 1993 compared to 44.3
percent in 1992.
- --------------------------------------------------------------------------------
1992 COMPARED WITH 1991
SALES
Sales in 1992 gained five percent over sales reported in 1991. Increased home
furnishings sales were partially offset by declines in sales volume in the
specialty fabrics segment. Home furnishings sales improved 16 percent as a
result of the improving retail economy and as a result of the addition of the
Company's Canadian operations. Without the effect of the Canadian
acquisitions, home furnishings sales would have increased 13 percent. The
Company's specialty fabrics segment reported 12 percent lower sales primarily
as a result of the continued planned downsizing which has occurred in certain
divisions since 1988. The decline also reflects the continued low demand for
defense-related products and softness in the electronics markets world wide.
EARNINGS
Net income for 1992 advanced to $44.5 million or $2.50 per share, a 64 percent
increase over 1991 net income of $27.1 million or $1.53 per share. Operating
profits of $113.2 million
13
<PAGE> 3
M A N A G E M E N T ' S D I S C U S S I O N A N D A N A L Y S I S
O F O P E R A T I O N S A N D F I N A N C I A L C O N D I T I O N
were 42 percent higher than the previous year, primarily as a result of
increased home furnishings sales. The home furnishings segment produced a
record operating profit of $100 million, which represents a 67 percent increase
over 1991 operating profits. The home furnishings segment results reflect
continued strong revenue performance and cost reductions as a result of
marketing division realignment and modernization efforts. The specialty
fabrics segment reported operating profits of $12.7 million, or a 34 percent
decline from the prior year. Successful efforts were made to reduce costs
through restructuring. The segment also experienced an operating loss from the
European fiberglass business resulting from low sales volume which the business
has been experiencing since the latter part of 1990.
Unfavorably impacting net income in 1992 was a high effective income tax rate
primarily resulting from foreign losses in the specialty fabrics segment which
did not give rise to a tax benefit.
- --------------------------------------------------------------------------------
INFLATION AND CHANGING PRICES
The replacement cost of property, plant and equipment is generally greater than
the historical cost shown on the Balance Sheet due to inflation that has
occurred since the property was placed into service.
Springs uses the LIFO method of accounting for 84 percent of its inventories.
Under this method, the cost of goods sold reported in the Statement of
Operations approximates current costs.
- --------------------------------------------------------------------------------
CAPITAL RESOURCES AND LIQUIDITY
Expenditures for property, plant, and equipment totaling $88.3 million were
made in 1993. Springs' subsidiary Clark-Schwebel Fiber Glass contributed its
European fiberglass operations and $8.8 million in cash in consideration for a
minority equity interest and a convertible debenture in CS-Interglas A.G. The
Company's cash needs were provided from operations, commercial paper, and
short-term bank borrowings. Springs' expected cash needs for 1994 are also
expected to come from these sources.
Dividends represented 43 percent of net income before the effect of one-time
charges relating to the adoption of two new financial accounting standards.
Dividends declared in 1993 were $1.20 on Class A shares and $1.08 on Class B
shares.
- --------------------------------------------------------------------------------
OTHER
The Company has adopted the provisions of Statement of Financial Accounting
Standards (SFAS) No. 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions," as of January 3, 1993. In applying this pronouncement,
the Company immediately recognized, as a change in accounting principle, the
$82.8 million Accumulated Postretirement Benefit Obligation (APBO) as of the
beginning of fiscal 1993. On an after-tax basis, this charge was $51.6
million, or $2.90 per share.
The Company has also adopted SFAS No. 109, "Accounting for Income Taxes," as of
January 3, 1993. In applying this pronouncement, the Company immediately
recognized, as a change in accounting principle, a charge to income of $20.9
million, or $1.17 per share, as of the beginning of fiscal 1993. Prior years'
financial statements have not been restated to apply the provisions of this
pronouncement.
In May 1993, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." SFAS No. 115 changes the
accounting and reporting for investments in equity securities that have readily
determinable fair values and for all investments in debt securities. The
Company is required to adopt SFAS No. 115 for the fiscal year ending December
31, 1994. It is expected that implementation of this statement will not result
in any material change in the Company's consolidated financial position or
future results of operations.
14
<PAGE> 4
C O N S O L I D A T E D S T A T E M E N T
O F O P E R A T I O N S A N D R E T A I N E D E A R N I N G S
Springs Industries, Inc.
<TABLE>
<CAPTION>
(In thousands except per share data)
For the Fiscal Years Ended January 1, 1994, January 2, 1993 (53 weeks), and December 28, 1991
1993 1992 1991
<S> <C> <C> <C>
OPERATIONS
NET SALES . . . . . . . . . . . . . . . . . . $2,022,816 $1,975,692 $1,890,406
- -----------------------------------------------------------------------------------------
COST AND EXPENSES:
Cost of goods sold . . . . . . . . . . . 1,619,422 1,585,357 1,543,025
Selling, general and
administrative expenses . . . . . . . . 281,539 277,174 267,943
Interest expense . . . . . . . . . . . . 30,256 31,418 32,281
Other (income) expense . . . . . . . . . 7,786 1,748 (2,516)
- -----------------------------------------------------------------------------------------
Total . . . . . . . . . . . . . . . 1,939,003 1,895,697 1,840,733
- -----------------------------------------------------------------------------------------
Income before income taxes
and cumulative effect of adoption of
SFAS Nos. 106 & 109 . . . . . . . . . . . . . 83,813 79,995 49,673
Income tax provision . . . . . . . . . . . . 36,557 35,465 22,576
- -----------------------------------------------------------------------------------------
Income before cumulative effect of
adoption of SFAS Nos. 106 & 109 . . . . . . 47,256 44,530 27,097
Cumulative effect of adoption of SFAS
Nos. 106 & 109, net of income tax. . . . . (72,543) - -
- -----------------------------------------------------------------------------------------
NET INCOME (LOSS) . . . . . . . . . $ (25,287) $ 44,530 $ 27,097
=========================================================================================
PER SHARE:
Income before cumulative effect of
adoption of SFAS Nos. 106 & 109 . . . . . $ 2.65 $ 2.50 $ 1.53
Cumulative effect of adoption of SFAS
Nos. 106 & 109, net of income tax . . . . (4.07) - -
- -----------------------------------------------------------------------------------------
NET INCOME (LOSS) . . . . . . . . . $ (1.42) $ 2.50 $ 1.533
=========================================================================================
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
RETAINED EARNINGS
RETAINED EARNINGS AT BEGINNING OF YEAR . . . $ 571,864 $ 547,463 $ 540,448
Net income (loss) . . . . . . . . . . . . . . (25,287) 44,530 27,097
Class A cash dividends declared . . . . . . . (11,624) (11,538) (11,432)
Class B cash dividends declared . . . . . . . (8,525) (8,591) (8,650)
- -----------------------------------------------------------------------------------------
RETAINED EARNINGS AT END OF YEAR . . $ 526,428 $ 571,864 $ 547,463
=========================================================================================
</TABLE>
See Notes to Consolidated Financial Statements.
DISTRIBUTION OF
THE SALES DOLLAR (1)
(millions)
(Graph)
(1) Excludes cumulative effect of adoption of SFAS Nos. 106 & 109
15
<PAGE> 5
C O N S O L I D A T E D
B A L A N C E S H E E T
Springs Industries, Inc.
<TABLE>
<CAPTION>
(In thousands except share data)
January 1, 1994 and January 2, 1993
1993 1992
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents . . . . . . . . . . . . . . $ 2,790 $ 4,033
Accounts receivable . . . . . . . . . . . . . . . . . 315,834 298,807
Inventories . . . . . . . . . . . . . . . . . . . . . 267,842 263,041
Other . . . . . . . . . . . . . . . . . . . . . . . . 40,073 37,122
- -----------------------------------------------------------------------------------------
Total current assets . . . . . . . . . . . . . . 626,539 603,003
- -----------------------------------------------------------------------------------------
PROPERTY (at cost):
Land and improvements . . . . . . . . . . . . . . . . 17,549 16,546
Buildings . . . . . . . . . . . . . . . . . . . . . . 205,229 205,190
Machinery, equipment, etc . . . . . . . . . . . . . . 973,065 946,692
- -----------------------------------------------------------------------------------------
Total . . . . . . . . . . . . . . . . . . . . . 1,195,843 1,168,428
Accumulated depreciation . . . . . . . . . . . . . . (645,938) (609,123)
- -----------------------------------------------------------------------------------------
Property, net . . . . . . . . . . . . . . . . . 549,905 559,305
- -----------------------------------------------------------------------------------------
OTHER ASSETS AND DEFERRED CHARGES . . . . . . . . . . . . 115,687 87,995
- -----------------------------------------------------------------------------------------
TOTAL . . . . . . . . . . . . . . . . . . . . $1,292,131 $1,250,303
=========================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings . . . . . . . . . . . . . . . . $ 61,420 $ 46,014
Current maturities of long-term debt . . . . . . . . 20,511 20,943
Accounts payable . . . . . . . . . . . . . . . . . . 73,640 79,164
Accrued incentive pay and benefit plans . . . . . . . 33,928 24,224
Accrued restructuring costs . . . . . . . . . . . . . 10,317 13,743
Other accrued liabilities . . . . . . . . . . . . . . 73,194 90,726
- -----------------------------------------------------------------------------------------
Total current liabilities . . . . . . . . . . . 273,010 274,814
- -----------------------------------------------------------------------------------------
NONCURRENT LIABILITIES:
Long-term debt . . . . . . . . . . . . . . . . . . . 293,028 273,551
Long-term benefit plans and deferred compensation . . 139,284 62,083
Deferred income taxes . . . . . . . . . . . . . . . . 27,914 34,264
Deferred credits and other liabilities . . . . . . . 15,702 17,533
- -----------------------------------------------------------------------------------------
Total noncurrent liabilities . . . . . . . . . . 475,928 387,431
- -----------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY:
Class A common stock- $.25 par value (9,858,035 and
9,801,590 shares issued in 1993 and 1992,
respectively) . . . . . . . . . . . . . . . . . 2,465 2,450
Class B common stock- $.25 par value (7,853,087 and
7,907,591 shares issued in 1993 and 1992,
respectively) . . . . . . . . . . . . . . . . . 1,963 1,977
Additional paid-in capital . . . . . . . . . . . . . 11,144 10,887
Retained earnings . . . . . . . . . . . . . . . . . . 526,428 571,864
Cost of Class A shares in treasury (1993-129,460
shares; 1992-138,322 shares) . . . . . . . . . . (2,785) (2,954)
Currency translation adjustment . . . . . . . . . . . 3,978 3,834
- -----------------------------------------------------------------------------------------
Total shareholders' equity . . . . . . . . . . . 543,193 588,058
- -----------------------------------------------------------------------------------------
TOTAL . . . . . . . . . . . . . . . . . . . . $1,292,131 $1,250,303
=========================================================================================
</TABLE>
See Notes to Consolidated Financial Statements.
16
<PAGE> 6
C O N S O L I D A T E D S T A T E M E N T
O F C A S H F L O W S
Springs Industries, Inc.
<TABLE>
<CAPTION>
(In thousands)
For the Fiscal Years Ended January 1, 1994, January 2, 1993 (53 Weeks), and December 28, 1991
1993 1992 1991
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) . . . . . . . . . . . . $(25,287) $ 44,530 $ 27,097
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Cumulative effect of adoption of SFAS
Nos. 106 & 109, net of income taxes 72,543 - -
Depreciation and amortization . . . . 87,138 87,376 85,943
Deferred income taxes . . . . . . . . 3,625 (2,260) 2,787
Changes in assets and liabilities excluding
effects of the transfer of European
subsidiaries and of businesses acquired:
Accounts receivable . . . . . . . . (29,285) 14,827 12,633
Inventories . . . . . . . . . . . . (13,599) (21,493) 13,705
Accounts payable, accrued incentive
pay and benefit plans, and other
accrued liabilities . . . . . . (5,102) 8,530 (17,734)
Accrued restructuring costs . . . . (9,495) (16,541) (18,751)
Other. . . . . . . . . . . . . . . . 501 (213) (4,286)
- ---------------------------------------------------------------------------------------------
Net cash provided by
operating activities . . . . . . . . 81,039 114,756 101,394
- ---------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
Purchases of property . . . . . . . . . . (88,289) (80,345) (115,946)
Businesses or minority interest acquired . (8,780) (18,591) (30,074)
Proceeds from sale of assets . . . . . . . 203 4,937 16,209
- ---------------------------------------------------------------------------------------------
Net cash used in investing activities (96,866) (93,999) (129,811)
- ---------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Proceeds from short-term borrowings, net . 15,406 16,814 18,025
Proceeds from long-term debt . . . . . . . 49,005 8,793 52,150
Payment of long-term debt . . . . . . . . (29,678) (27,956) (20,629)
Cash dividends paid . . . . . . . . . . . (20,149) (20,129) (20,109)
- ---------------------------------------------------------------------------------------------
Net cash provided (used)
by financing activities . . . . . . 14,584 (22,478) 29,437
- ---------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS . . . . . . . . . . . . (1,243) (1,721) 1,020
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR . . . . . . . . . . . . 4,033 5,754 4,734
- ---------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
AT END OF YEAR . . . . . . . . . . . $ 2,790 $ 4,033 $ 5,754
=============================================================================================
</TABLE>
See Notes to Consolidated Financial Statements.
17
<PAGE> 7
N O T E S T O C O N S O L I D A T E D
F I N A N C I A L S T A T E M E N T S
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
PRINCIPLES OF CONSOLIDATION: The accompanying consolidated financial
statements include the accounts of Springs Industries, Inc. and its
subsidiaries (Springs). Intercompany balances and transactions are eliminated
in consolidation. Investments in 20 to 50 percent owned companies are
accounted for using the equity method of accounting.
REVENUE RECOGNITION: Revenue from product sales is recognized at the time
ownership of the goods transfers to the customer and the earnings process is
complete.
CASH EQUIVALENTS: Cash equivalents consist of liquid investments with original
maturities of three months or less when purchased.
ACCOUNTS RECEIVABLE: Springs has a diverse customer base across a variety of
industries. The Company performs ongoing credit evaluations of its customers'
financial condition and, generally, requires no collateral from its customers.
The allowance for doubtful accounts was approximately $6,235,000 and
$10,738,000 in 1993 and 1992, respectively, which management believes is
adequate to provide for normal credit losses, as well as losses for customers
who have filed for protection under the bankruptcy laws.
INVENTORIES: Inventories are summarized as follows
(in thousands):
<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Standard cost (which approximates
average cost) or average cost:
Finished goods . . . . . . . $ 180,989 $ 174,516
In process . . . . . . . . . 165,190 170,957
Raw materials and supplies . 50,824 55,381
- ----------------------------------------------------------
397,003 400,854
Less LIFO reserve . . . . . . . . (129,161) (137,813)
- ----------------------------------------------------------
TOTAL . . . . . . . . . . . $ 267,842 $ 263,041
==========================================================
</TABLE>
Inventories are valued at the lower of cost or market. Cost is determined using
the last-in, first-out method (LIFO) for approximately 84 percent of
inventories and the average cost method for all other inventories. Average
cost approximates current cost.
DEPRECIATION: Depreciation is computed for financial reporting purposes on a
straight-line basis over the estimated useful lives of the related assets.
INCOME TAXES: The provision for income taxes includes federal, state, and
foreign taxes currently payable and deferred taxes. Deferred taxes for 1993
were determined utilizing a liability approach as required by Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes." This
method gives consideration to the future tax consequences associated with
differences between financial accounting and tax bases of assets and
liabilities. This method gives immediate effect to changes in income tax laws
upon enactment. Deferred taxes for 1992 and 1991 were determined using the
deferral method as required by Accounting Principles Board Opinion No. 11.
INCOME (LOSS) PER SHARE: Per share amounts are based on the weighted average
number of shares of Class A and Class B common stock and common stock
equivalents outstanding. Certain common stock equivalents are not included in
the 1993 calculation because they are antidilutive. Such average shares
totaled 17,825,000 in 1993, 17,805,000 in 1992 and 17,710,000 in 1991.
RECLASSIFICATION: Certain previously reported amounts have been reclassified
to conform with year end 1993 presentations.
- --------------------------------------------------------------------------------
NOTE 2. ACQUISITIONS:
On March 25, 1993, Springs' subsidiary, Clark-Schwebel Fiber Glass, contributed
its European fiberglass subsidiaries (net assets of $17.1 million) and $8.8
million in cash to CS-Interglas A.G., of Ulm, Germany, in consideration for a
minority equity interest in CS-Interglas A.G. and a convertible debenture. No
gain or loss was recognized as a result of this transaction since it was
accounted for as a nonmonetary exchange. The earnings (losses) of the European
subsidiaries were consolidated in the Company's financial statements until
March 25, 1993, at which time the Company removed the assets and liabilities of
the subsidiaries from consolidation and began accounting for its interest in
CS-Interglas A.G. under the equity method of accounting.
In August and October of 1992, Springs purchased the marketing and distribution
operations of C. S. Brooks Canada Inc. and the Griffiths-Kerr division of
Finlayson Enterprises, Ltd., respectively, for $18.6 million. Both
acquisitions were accounted for using the purchase method of accounting, and
accordingly, purchase price was allocated to net assets based upon estimated
fair values at the acquisition dates. The Consolidated Statement of Operations
includes results of both from the dates of acquisition.
In April 1991, Springs purchased certain net assets comprising the rug and
shower curtain businesses of C. S. Brooks Corporation (C. S. Brooks) for
approximately $30.0 million. The acquisition was accounted for using the
purchase method of accounting, and accordingly, the purchase price was
allocated to the net assets of C. S. Brooks based upon their estimated fair
values at the acquisition date. The Consolidated Statement of Operations
includes C. S. Brooks since acquisition.
18
<PAGE> 8
N O T E S T O C O N S O L I D A T E D
F I N A N C I A L S T A T E M E N T S
- --------------------------------------------------------------------------------
NOTE 3. RESTRUCTURING PLAN:
In 1990, Springs recorded a $70.0 million charge ($43.9 million after taxes, or
$2.46 per share) for the estimated cost of converting certain finished fabrics
manufacturing facilities to home furnishings production, consolidating and
further reducing the Company's manufacturing operations and offering early
retirement to qualifying employees. The process of conversion and
consolidation is designed to further modernize Springs' textile operations and
to decrease capacity of certain manufacturing operations. Management believes
that its plan will not be fully implemented until 1994.
- --------------------------------------------------------------------------------
NOTE 4. INDUSTRY SEGMENT INFORMATION:
Commencing in 1993, the Company has changed the financial statement
presentation of its segments to reflect the changing nature of its business,
the increased emphasis on its home furnishings business, and the similarities
of the markets for its specialty fabrics. The specialty fabrics segment now
combines the finished fabrics and industrial fabrics segments. Segment
information for prior years has been restated to reflect this change.
Springs operates in two industry segments: home furnishings and specialty
fabrics. The home furnishings segment manufactures, purchases for resale, and
markets home furnishing products including sheets, pillowcases, bedspreads,
comforters, curtains, towels, shower curtains, bath rugs, drapery hardware and
decorative window furnishings to all major channels of retail distribution. The
specialty fabrics segment manufactures, purchases for resale, and markets woven
and non-woven fabrics, including apparel fabrics, home sewing fabrics,
fiberglass fabrics, industrial fabrics, specialty and high performance fabrics,
and protective and fire retardant fabrics to manufacturers for use in a variety
of end products. Summarized segment information appears on page12 and is an
integral part of the financial statements.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
NOTE 5. LONG-TERM DEBT:
Long-term debt consists of (in thousands):
1993 1992
<S> <C> <C>
Commercial Paper, average interest rate 3.2% in 1993, 4.1 % in 1992 . . . . . . . . . . . $ 99,613 $ 51,677
Senior Notes payable in annual installments of $6,250 in years 1994
through 1996, $12,500 in years 1997 through 2001, and $6,250
in years 2002 through 2005, effective interest rate of 10.01% . . . . . . . . . . . . . 106,250 118,750
Notes payable in quarterly installments of $3,125 through April 1,
1996, then $1,042 on July 1, 1996, interest at a variable market
rate, 3.75% at January 1, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,292 46,875
Senior Note payable in annual installments of $5,000 in years 1997
through 2006, interest at 9.6% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000 50,000
Industrial Revenue Bond Obligations, payable in varying annual
amounts to 2019, interest at rates ranging from 2.5% to 8.3% . . . . . . . . . . . . . . 22,189 23,181
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,195 4,011
- -------------------------------------------------------------------------------------------------------------------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 313,539 294,494
Current maturities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20,511) (20,943)
- -------------------------------------------------------------------------------------------------------------------------
LONG-TERM DEBT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $293,028 $273,551
=========================================================================================================================
</TABLE>
The Company intends to maintain commercial paper borrowings on a long-term
basis. The Company's access to the commercial paper market is facilitated by
committed long-term revolving credit agreements provided by several banks,
totaling $100.0 million. Revolving credit agreements carry no specific
expiration date but would terminate thirteen months after notice from banks.
Springs pays an annual commitment fee equal to 1/8 of 1 percent on the
revolving credit agreements.
Certain long-term debt agreements contain, among other things, requirements
concerning the maintenance of working capital and tangible net worth,
limitations on the incurrence of indebtedness, and restrictions on the payment
of dividends and redemption of stock. At January 1, 1994, retained earnings of
$173,583,000 were available for cash dividends and the redemption of Springs'
stock. Property with a net book value of $36,226,000 is pledged as collateral
for the Industrial Revenue Bonds.
Total annual maturities of long-term debt, excluding commercial paper will be:
1994 - $20,511,000; 1995 - $20,119,000; 1996 - $15,106,000; 1997 - $17,922,000;
1998 - $17,842,000 and varying amounts thereafter through 2019. Total interest
payments in 1993, 1992 and 1991 were approximately $27,894,000, $30,789,000 and
$30,102,000, respectively.
19
<PAGE> 9
N O T E S T O C O N S O L I D A T E D
F I N A N C I A L S T A T E M E N T S
- --------------------------------------------------------------------------------
NOTE 6. SHAREHOLDERS' EQUITY:
Changes in shareholders' equity, exclusive of retained earnings, are (in
thousands):
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Class A Class B Class A
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stock Issued Common Stock Issued Stock Held in Treasury
------------------- ------------------- Additional ---------------------- Currency
Number Par Number Par Paid-In Number Translation
Of Shares Value Of Shares Value Capital Of Shares Cost Adjustment
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 29, 1990 . . . 9,604 $ 2,401 8,048 $ 2,012 $ 9,318 150 $ 3,148 $ 9,883
Exchange of Class B common stock
for Class A common stock . . . . 76 19 (76) (19) - - - -
Shares awarded under various
employee plans . . . . . . . . . 55 14 - - 1,343 (8) (95) -
Currency translation adjustment . . - - - - - - - (531)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at December 28, 1991 . . . 9,735 $ 2,434 7,972 $ 1,993 $ 10,661 142 $ 3,053 $ 9,352
Exchange of Class B common stock
for Class A common stock . . . . 64 16 (64) (16) - - - -
Shares awarded under various
employee plans . . . . . . . . . 3 - - - 226 (4) (99) -
Currency translation adjustment . . - - - - - - - (5,518)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at January 2, 1993 . . . . 9,802 $ 2,450 7,908 $ 1,977 $ 10,887 138 $ 2,954 $ 3,834
Exchange of Class B common stock
for Class A common stock . . . . 55 14 (55) (14) - - - -
Shares awarded under various
employee plans . . . . . . . . . 1 1 - - 257 (9) (169) -
Currency translation adjustment . . - - - - - - - 144
- ------------------------------------------------------------------------------------------------------------------------------------
BALANCE AT JANUARY 1, 1994 . . . . 9,858 $ 2,465 7,853 $ 1,963 $11,144 129 $ 2,785 $ 3,978
====================================================================================================================================
</TABLE>
In December 1991, Springs granted certain key employees options to purchase
380,000 shares of Class A common stock at market value on the date of grant.
The options become exercisable in years 1994 through 1998. In April 1993,
Springs granted certain key employees options to purchase 59,000 shares of
Class A common stock at market value on the date of grant. The options become
exercisable in years 1996 through 1998.
As of January 1, 1994, Springs had authorized 1,000,000 shares of $1.00 par
value, voting, preferred stock, none of which was outstanding. Authorized
common stock consisted of 40,000,000 shares of $.25 par value Class A stock and
20,000,000 shares of $.25 par value Class B stock. Subject to certain
exceptions, holders of Class B stock are entitled to four votes per share on
matters brought before shareholders of the Company, while holders of Class A
stock are entitled to one vote per share. Holders of Class A stock are
entitled to cash dividends which are at least 10 percent greater than cash
dividends paid on Class B stock. Pursuant to a change in South Carolina
corporate law effective January 1, 1989, purchases by Springs of its own stock
no longer represent the acquisition of treasury shares; rather, the purchased
shares constitute authorized but unissued shares. Accordingly, shares acquired
after 1988 are accounted for as reductions of common stock, additional paid-in
capital and retained earnings. Shares purchased prior to January 1, 1989 will
continue to be accounted for in the same manner as prescribed under the
previous law.
- --------------------------------------------------------------------------------
NOTE 7. INCOME TAXES:
The Company has adopted Statement of Financial Accounting Standards (SFAS) No.
109, "Accounting for Income Taxes" as of the beginning of 1993, and the
cumulative effect of this change is reported in the 1993 Consolidated Statement
of Operations. Prior years' financial statements have not been restated to
apply the provisions of SFAS No. 109. The cumulative effect of adoption was a
charge to income of $20.9 million, or $1.17 per share, reflecting the impact of
"temporary differences" between amounts of assets and liabilities for financial
reporting purposes and such amounts as measured by tax laws. These temporary
differences are determined in accordance with SFAS No. 109 and are more
inclusive in nature than "timing differences" as determined under previously
applicable accounting principles. During 1992 and 1991, deferred income taxes
were provided for timing differences in the recognition of revenue and expenses
for tax and financial statement purposes computed in accordance with Accounting
Principles Board Opinion No. 11.
20
<PAGE> 10
N O T E S T O C O N S O L I D A T E D
F I N A N C I A L S T A T E M E N T S
The following tables present the provision for income taxes before cumulative
effect of adoption of SFAS Nos. 106 & 109, the principal items of deferred
income taxes at the beginning and end of 1993, the principal components of the
deferred income tax provision for 1992 and 1991, and a reconciliation of the
statutory U. S. income tax rate to the effective income tax rate.
INCOME TAX PROVISION BEFORE CUMULATIVE EFFECT
(In thousands):
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Current. . . . . . . . $ 32,932 $ 37,725 $ 19,789
Deferred. . . . . . . . 3,625 (2,260) 2,787
- ----------------------------------------------------------
TOTAL TAX PROVISION
BEFORE CUMULATIVE
EFFECT. . . . . . . $ 36,557 $ 35,465 $ 22,576
==========================================================
</TABLE>
Temporary differences which give rise to a significant portion of deferred
income taxes are as follows:
<TABLE>
<CAPTION>
JANUARY 1 January 3
1994 1993
<S> <C> <C>
Employee benefit accruals . . . $ 36,534 $ 36,115
Deferred compensation . . . . . 24,032 21,911
Restructuring accruals . . . . 4,080 8,655
Equity investments/subsidiaries 4,332 2,320
Accounts receivable reserves . 4,306 6,550
Environmental accruals . . . . 4,203 3,825
Other items . . . . . . . . . . 10,764 4,551
- ----------------------------------------------------------
Subtotal. . . . . . . . . . 88,251 83,927
Less valuation allowance . . . (4,332) (2,320)
- ----------------------------------------------------------
Total deferred tax assets . $ 83,919 $ 81,607
- ----------------------------------------------------------
Property . . . . . . . . . . . $ (71,813) (66,649)
Equity investments . . . . . . (8,523) (7,072)
Intangibles . . . . . . . . . . (3,690) (2,701)
Other items . . . . . . . . . . (3,241) (4,660)
- ----------------------------------------------------------
Total deferred tax
liabilities . . . . . . . $ (87,267) (81,082)
- ----------------------------------------------------------
NET DEFERRED TAX ASSET
(LIABILITY) . . . . . . . $ (3,348) $ 525
==========================================================
</TABLE>
As a result of increases in a deferred tax asset related to an equity
investment, a valuation allowance has been recorded to the extent of such
deferred tax asset. Realization of this asset is contingent on the Company's
ability to generate future capital gains in an amount sufficient to utilize
this tax asset.
DEFERRED INCOME TAX PROVISION (Benefit)
(In thousands):
<TABLE>
<CAPTION>
1992 1991
<S> <C> <C>
Depreciation . . . . . . . . . $ 1,603 $ (412)
Restructuring costs . . . . . . 2,611 6,393
Deferred compensation . . . . . (1,864) (1,343)
Employee benefit plans . . . . 275 (32)
Inventories . . . . . . . . . . (190) (23)
Other . . . . . . . . . . . . . (4,695) (1,796)
- -----------------------------------------------------------
TOTAL DEFERRED INCOME
TAX PROVISION (BENEFIT) . $ (2,260) $ 2,787
===========================================================
</TABLE>
RECONCILIATION TO EFFECTIVE TAX RATES:
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Provision at statutory
U.S. tax rate . . . . . . 35.0% 34.0% 34.0%
Effective state income
tax rate . . . . . . . . 4.8 4.2 4.2
Foreign losses without
tax benefit. . . . . . . 2.4 3.4 4.7
Amortization of acquisition
price not deductible for
tax purposes . . . . . . 0.5 1.1 2.5
Other . . . . . . . . . . . 0.9 1.6 -
- -------------------------------------------------------------
TOTAL. . . . . . . . . . 43.6% 44.3% 45.4%
=============================================================
</TABLE>
Income before income taxes includes foreign losses of $6,377,000, $8,449,000,
and $6,119,000 in 1993, 1992, and 1991, respectively. The provision for income
taxes includes state income taxes of $6,225,000 in 1993, $5,127,000 in 1992,
and $3,195,000 in 1991. Springs made income tax payments of approximately
$45,837,000, $29,930,000, and $21,260,000 in 1993, 1992, and 1991,
respectively.
- --------------------------------------------------------------------------------
NOTE 8. EMPLOYEES' BENEFIT PLANS:
EMPLOYEES' PROFIT SHARING AND RETIREMENT PLANS
Substantially all associates of Springs are covered by defined contribution
plans or defined benefit plans. The Company makes contributions to defined
contribution plans which are computed as a percentage of each participant's
base pay. In addition, in the event that eligible participants contribute a
percentage of their compensation to defined contribution plans, the Company
matches a portion of their contributions.
Company contributions to defined benefit plans are made in accordance with
ERISA and benefits are generally based upon years of service and compensation.
Assets held by plans are invested in money market and other fixed income
securities including United States government obligations and in diversified
equity securities.
Defined contribution plan expense for 1993, 1992, and 1991 was $22,827,000,
$19,695,000, and $18,666,000, respectively. The net assets available for
benefits under defined contribution plans had a market value of $427,602,000 as
of January 1, 1994.
21
<PAGE> 11
N o t e s T o C o n s o l i d a t e d
F I N A N C I A L S T A T E M E N T S
Defined benefit retirement plan expense was $1,486,000 in 1993, $1,669,000 in
1992 and $1,817,000 in 1991. The following assumptions and components were
used to develop the net pension expense (in thousands):
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
ASSUMPTIONS:
Discount rate for obligations . . . . . . . . . . . 7.0% 8.0% 8.0%
Discount rate for expenses . . . . . . . . . . . . 8.0% 8.0% 8.0%
Expected long-term rate of return on assets . . . . 7.5% 7.5% 7.5%
COMPONENTS:
Service cost . . . . . . . . . . . . . . . . . . . $ 423 $ 649 $ 816
Interest cost on projected benefit obligations . . 1,278 1,221 1,164
Actual return on assets . . . . . . . . . . . . . . (255) (259) (816)
Net amortization and deferral . . . . . . . . . . . 40 58 653
- --------------------------------------------------------------------------------
PENSION EXPENSE, NET . . . . . . . . . . . . . . . $1,486 $1,669 $1,817
================================================================================
</TABLE>
The following table sets forth the funding status of Springs' defined benefit
pension plans (in thousands):
<TABLE>
<CAPTION>
JANUARY 1 JANUARY 2
1994 1993
<S> <C> <C>
ACCUMULATED BENEFIT OBLIGATION:
Vested . . . . . . . . . . . . . . . . . . . . . . . . . $(17,740) $(16,651)
Non-vested . . . . . . . . . . . . . . . . . . . . . . . (18) (11)
- -------------------------------------------------------------------------------------
Accumulated benefit obligation . . . . . . . . . . . . . $(17,758) $(16,662)
=====================================================================================
Projected benefit obligation . . . . . . . . . . . . . . . $(17,758) $(16,662)
Plan assets at fair value . . . . . . . . . . . . . . . . . 3,908 4,121
- -------------------------------------------------------------------------------------
Projected benefit obligation in excess of plan assets . . . (13,850) (12,541)
Unrecognized net loss and effects of changes in
assumptions . . . . . . . . . . . . . . . . . . . . . . . 2,240 1,366
Additional minimum liability . . . . . . . . . . . . . . . (2,240) (1,385)
- -------------------------------------------------------------------------------------
ACCRUED PENSION COST RECOGNIZED IN THE BALANCE SHEET . . . $(13,850) $(12,560)
=====================================================================================
</TABLE>
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The Company adopted the provisions of Statement of Financial Accounting
Standards (SFAS) No. 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions," as of January 3, 1993. In applying this pronouncement,
the Company immediately recognized, as a change in accounting principle, the
$82.8 million Accumulated Postretirement Benefit Obligation (APBO) as of the
beginning of fiscal 1993. On an after-tax basis, this charge was $51.6
million, or $2.90 per share.
The Company sponsors a defined benefit postretirement medical plan which covers
substantially all salaried and nonsalaried employees. The plan provides
medical benefits and is contributory, with retiree contributions adjusted
periodically.
The following table sets forth the status of Springs' obligation under SFAS No.
106 at January 1, 1994 and January 3, 1993 (in thousands):
<TABLE>
<CAPTION>
JANUARY 1 JANUARY 3
1994 1993
<S> <C> <C>
ACCUMULATED POSTRETIREMENT BENEFIT OBLIGATION:
Retirees . . . . . . . . . . . . . . . . . . . $ (40,144) $ (43,380)
Fully eligible active plan participants . . . (7,150) (23,324)
Other active plan participants . . . . . . . . (20,497) (16,066)
- -------------------------------------------------------------------------------
Accumulated postretirement benefit obligation . $ (67,791) $ (82,770)
Unrecognized effects of changes resulting from
experience different from that assumed . . . . (14,901) -
- -------------------------------------------------------------------------------
ACCRUED POSTRETIREMENT BENEFIT OBLIGATION
RECOGNIZED IN THE BALANCE SHEET . . . . . . . . $ (82,692) $ (82,770)
===============================================================================
</TABLE>
22
<PAGE> 12
N O T E S T O C O N S O L I D A T E D
F I N A N C I A L S T A T E M E N T S
At the date of adoption, the substantive plan provided for eligible active
associates to elect to receive benefits based on service and age provisions
consistent with the provisions of then current retirees. This election was
offered for a limited time period and a significant number of these associates
did not elect this option; therefore, the number of fully eligible associates
was substantially less at January 1, 1994. The $14.9 million actuarial gain
primarily represents lower health care costs than assumed offset by a decrease
in the discount rate. Net postretirement benefit cost for 1993 consisted of
the following components:
<TABLE>
<S> <C>
Service cost - benefits earned . . . . . . . . $ 1,132
Interest cost on accumulated
postretirement benefit obligation . . . . . 6,320
- ----------------------------------------------------------
NET POSTRETIREMENT BENEFIT COST . . . . . . . . $ 7,452
==========================================================
</TABLE>
The actuarial valuation of the APBO for this plan includes provisions for
anticipated future cost-sharing changes that are consistent with the Company's
expressed intent to adjust future retiree contributions. The Company continues
to fund this plan on the "pay-as-you-go" basis. In 1992 and 1991, retiree
"pay-as-you-go" expense was $7,712,000 and $6,482,000, respectively.
For measurement purposes, a 12.5 percent annual rate of increase in the per
capita cost of covered health care benefits was assumed for 1994; this 12.5
percent rate was assumed to decrease gradually to six percent until the year
2006 and remain at that level thereafter. If the health care cost trend rate
were increased by one percent, the APBO would increase by 13 percent and the
aggregate of the service and interest cost components of net postretirement
benefit cost would increase by 26 percent. The discount rate used in
determining the APBO at January 1, 1994 was seven percent and at January 3,
1993 was eight percent.
- --------------------------------------------------------------------------------
NOTE 9. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company has estimated the fair value amounts of financial instruments as
required by SFAS No. 107, "Disclosures about Fair Value of Financial
Instruments", using available market information and appropriate valuation
methodologies. However, considerable judgment is required in interpreting
market data to develop the estimates of fair value. Accordingly, the estimates
presented herein are not necessarily indicative of the amounts that the Company
would realize in a current market exchange.
The carrying amounts of cash and cash equivalents, accounts receivable, other
assets, accounts payable, and short-term borrowings are reasonable estimates of
their fair value at January 1, 1994 and January 2, 1993.
Long-term debt including commercial paper of $314 million had an estimated fair
value at January 1, 1994 of $340 million. Long-term debt including commercial
paper of $294 million had an estimated fair value at January 2, 1993 of $304
million. Fair value was estimated using interest rates that were available to
the Company at those dates for issuance of debt with similar terms and
remaining maturities.
- --------------------------------------------------------------------------------
NOTE 10. OTHER MATTERS:
TRANSACTIONS WITH RELATED PARTIES: Springs transacts business with companies
which are controlled by two members of the Board of Directors, their family and
related entities. In the opinion of Springs' management, the cost of services
provided by these companies is not material and the services have been obtained
at competitive prices or rates. Management reviews its conclusions with the
Audit Committee of the Board of Directors.
CONTINGENCIES: The action filed in the United States District Court of South
Carolina by the Catawba Indian Tribe of South Carolina against Springs and
other defendants, including the State of South Carolina and a number of other
governmental entities, claiming title to approximately 140,000 acres of land in
York and Lancaster counties, South Carolina, including certain property owned
by
Springs, has been settled and the plaintiff's title claims have been formally
dismissed by order of the United States District Court entered on January 5,
1994.
Springs is involved in certain administrative proceedings governed by
environmental laws and regulations, including proceedings under the
Comprehensive Environmental Response, Compensation, and Liability Act. The
potential costs to the Company related to all of these environmental matters
are uncertain due to such factors as: the unknown magnitude of possible
pollution and cleanup costs; the complexity and evolving nature of governmental
laws and regulations and their interpretations; the timing, varying costs and
effectiveness of alternative cleanup technologies; the determination of the
Company's liability in proportion to other potential responsible parties; and
the extent, if any, to which such costs are recoverable from insurance or other
parties. The Company has accrued a liability of approximately $11 million,
which represents management's best estimate of Springs' probable liability
concerning all known environmental matters. This accrual has not been reduced
by any potential insurance recovery the Company may have regarding
environmental matters. The only major component of the Company's accrued
liability for environmental matters involves a site listed on the United States
Environmental Protection Agency's ("EPA") National Priority List ("NPL") where
Springs is the sole responsible party. Springs, the United States
Environmental Protection Agency and the United States Department of Justice
have executed a consent decree related to this site. Soil cleanup was
completed in 1993, subject to final approval by EPA. The remedial design for
groundwater cleanup is nearing completion. Management believes the $11 million
accrual will be paid out over the next ten years.
Springs is also involved in various other legal proceedings and claims
incidental to its business. Springs is defending its position in all such
proceedings.
In the opinion of management, based on the advice of counsel, the likelihood
that the resolution of the above matters would have a material adverse impact
on either the financial condition or the future results of operations of
Springs is remote.
23
<PAGE> 13
I N D E P E N D E N T
A U D I T O R S ' R E P O R T
To the Board of Directors of Springs Industries, Inc.
We have audited the accompanying consolidated balance sheet of Springs
Industries, Inc. as of January 1, 1994 and January 2, 1993, and the related
consolidated statements of operations and retained earnings and of cash flows
for each of the three fiscal years in the period ended January 1, 1994. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Springs Industries, Inc. at
January 1, 1994 and January 2, 1993, and the results of its operations and its
cash flows for each of the three fiscal years in the period ended January 1,
1994 in conformity with generally accepted accounting principles.
As discussed in Notes 7 and 8 to the consolidated financial statements, in 1993
the Company changed its method of accounting for income taxes and its method of
accounting for postretirement benefits other than pensions to conform with
Statements of Financial Accounting Standards Nos. 109 and 106, respectively.
SIGNATURE on file
DELOITTE & TOUCHE
Charlotte, North Carolina
January 31, 1994
- --------------------------------------------------------------------------------
M A N A G E M E N T ' S R E P O R T
O N F I N A N C I A L S T A T E M E N T S
The management of the Company is responsible for the preparation of the
consolidated financial statements and related financial information included in
this annual report. The statements, which include amounts based on judgments
of management, have been prepared in conformity with generally accepted
accounting principles consistently applied.
In fulfilling the Company's responsibilities for maintaining the integrity of
financial information and for safeguarding assets, Springs relies upon internal
control systems designed to provide reasonable assurance that the Company's
records properly reflect business transactions and that these transactions are
in accordance with management's authorization. There are limits inherent in
all systems of internal accounting controls based on the recognition that the
cost of such systems should not exceed the benefits to be derived. Springs
believes its system provides this appropriate balance. The internal control
system is augmented by an internal audit staff which evaluates and reports on
the adequacy and effectiveness of internal control and procedures.
Management also recognizes its responsibility for conducting the Company's
affairs in an ethical and socially responsible manner. Springs has
communicated to its employees its intentions to maintain the highest standards
of ethical conduct in all of its business activity. Ongoing review programs
are carried out to monitor compliance with this policy.
The Board of Directors pursues its oversight responsibility for the Company's
systems of internal control and financial statements through its Audit
Committee, which is composed solely of outside directors. The Audit Committee
meets regularly with Springs' management, internal auditors, and independent
auditors. Both the independent auditors and internal auditors have access to
and meet privately with this Committee without the presence of management.
The Company's independent auditors, Deloitte & Touche, consider the Company's
internal control structure to the extent they deem necessary and perform tests
and other procedures they deem necessary to express an opinion on the fairness
of the presentation of the financial statements, which management believes
provides an objective assessment of the degree to which management meets its
responsibility for fairness of financial reporting.
SIGNATURE on file
STEPHEN P. KELBLEY
Executive Vice President
and Chief Financial Officer
24
<PAGE> 14
Q U A R T E R L Y F I N A N C I A L D A T A
( U N A U D I T E D )
<TABLE>
<CAPTION>
(In millions except per share data)
1993 1992
QUARTER 1ST 2ND 3RD 4TH YEAR 1ST 2ND 3RD 4TH* YEAR*
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales . . . . . . $501.7 $483.9 $514.5 $522.7 $2,022.8 $462.9 $486.0 $495.0 $531.8 $1,975.7
Gross profit . . . . . 96.9 94.0 103.7 108.8 403.4 84.8 93.3 97.8 114.5 390.4
Income before
cumulative effect . . 9.1 8.9 13.7 15.5 47.3 5.3 11.2 13.3 14.7 44.5
Cumulative effect . . (72.5)(a) - - - (72.5)(a) - - - - -
- ------------------------------------------------------------------------------------------------------------------------
Net income (loss) . . (63.4) 8.9 13.7 15.5 (25.3) 5.3 11.2 13.3 14.7 44.5
========================================================================================================================
Per share:
Income before
cumulative effect . .51 .50 .77 .87 2.65 .30 .63 .75 .82 2.50
Cumulative effect . . (4.07)(a) - - - (4.07)(a) - - - - -
- ------------------------------------------------------------------------------------------------------------------------
Net income (loss) . . (3.56) .50 .77 .87 (1.42) .30 .63 .75 .82 2.50
========================================================================================================================
</TABLE>
* 14 weeks for the quarter and 53 weeks for the year.
(a) One-time charges for adoption of SFAS Nos. 106 and 109.
DIVIDENDS AND PRICE RANGE OF COMMON STOCK
<TABLE>
<CAPTION>
1993 1992
QUARTER 1ST 2ND 3RD 4TH YEAR 1ST 2ND 3RD 4TH* YEAR*
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per share:
Class A dividends . . .30 .30 .30 .30 1.20 .30 .30 .30 .30 1.20
Class B dividends . . .27 .27 .27 .27 1.08 .27 .27 .27 .27 1.08
- --------------------------------------------------------------------------------------------------------------------------
Common stock prices:
High . . . . . . . 45 7/8 49 37 3/4 42 1/4 49 39 3/4 40 1/8 43 7/8 43 1/8 43 7/8
Low . . . . . . . . 35 3/4 33 1/2 34 5/8 34 3/4 33 1/2 30 1/2 34 7/8 35 5/8 31 1/2 30 1/2
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
PRICE RANGE
OF COMMON STOCK
(by quarter)
(Graph)
25
<PAGE> 15
S E L E C T E D F I N A N C I A L D A T A
Springs Industries, Inc.
<TABLE>
<CAPTION>
1993 1992(c) 1991 1990 1989
<S> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS (in millions):
Net sales . . . . . . . . . . . . . . . . . . $2,022.8 $1,975.7 $1,890.4 $1,878.0 $1,909.3
Income (loss) before income taxes . . . . . . 83.8 80.0 49.7 (7.1)(a) 100.7
Income taxes . . . . . . . . . . . . . . . . . 36.6 35.5 22.6 (.3) 35.8
Net income (loss) . . . . . . . . . . . . . . (25.3)(h) 44.5 27.1 (6.8)(a) 64.9
Operating cash flow(d) . . . . . . . . . . . . 201.2 198.8 167.9 174.9 204.0
Class A cash dividends declared. . . . . . . . 11.6 11.5 11.4 11.6 11.5
Class B cash dividends declared . . . . . . . 8.5 8.6 8.7 8.7 8.7
- --------------------------------------------------------------------------------------------------------------
PER SHARE OF COMMON STOCK:
Net income (loss) . . . . . . . . . . . . . . (1.42)(h) 2.50 1.53 (.39)(a) 3.64
Class A cash dividends declared . . . . . . . 1.20 1.20 1.20 1.20 1.20
Class B cash dividends declared . . . . . . . 1.08 1.08 1.08 1.08 1.08
Shareholders' equity . . . . . . . . . . . . . 30.90 33.47 32.39 32.05 33.08
Class A stock price range:
High . . . . . . . . . . . . . . . . . . . 49 43 7/8 36 1/4 39 1/2 45 1/4
Low . . . . . . . . . . . . . . . . . . . . 33 1/2 30 1/2 21 1/4 16 7/8 30 1/2
- --------------------------------------------------------------------------------------------------------------
STATISTICAL DATA:
Income to net sales . . . . . . . . . . . . . (1.3)% 2.3% 1.4% (0.4)% 3.4%
Net income to average shareholders' equity . . (4.7)% 7.7% 4.9% (1.2)% 11.6%
Operating return on assets employed (e) . . . 8.8% 8.7% 6.6% 7.7% 11.2%
Inventory turnover (f) . . . . . . . . . . . . 5.6 6.0 6.0 5.6 5.8
Accounts receivable turnover (g) . . . . . . . 6.5 6.5 6.3 6.2 6.4
Net sales divided by average assets . . . . . 1.6 1.6 1.5 1.6 1.7
Current ratio . . . . . . . . . . . . . . . . 2.3 2.2 2.2 2.5 2.4
Capital expenditures (in millions) . . . . . . $ 88.3 $ 80.3 $ 115.9 $ 117.8 $ 108.3
Depreciation (in millions) . . . . . . . . . . $ 78.1 $ 77.7 $ 75.2 $ 72.6 $ 67.5
Approximate number of shareholders . . . . . . 3,200 3,300 3,500 3,400 3,500
Average number of associates . . . . . . . . . 20,300 20,900 21,700 23,200 24,100
- --------------------------------------------------------------------------------------------------------------
SELECTED BALANCE SHEET DATA (in millions):
Working capital . . . . . . . . . . . . . . . $ 353.5 $ 328.2 $ 329.7 $ 356.5 $ 354.9
Property:
Cost . . . . . . . . . . . . . . . . . . . 1,195.8 1,168.4 1,123.6 1,087.9 978.0
Accumulated depreciation . . . . . . . . . (645.9) (609.1) (551.5) (563.7) (503.0)
Net . . . . . . . . . . . . . . . . . . . . 549.9 559.3 572.1 524.2 475.0
Total assets . . . . . . . . . . . . . . . . . 1,292.1 1,250.3 1,251.3 1,201.1 1,188.4
Long-term debt . . . . . . . . . . . . . . . . 293.0 273.6 287.8 260.4 227.5
Shareholders' equity . . . . . . . . . . . . . 543.2 588.1 568.9 560.9 585.1
- --------------------------------------------------------------------------------------------------------------
(a) Includes a $70.0 million charge ($43.9 million after tax, or $2.46 per share) for restructuring.
(b) Includes an $18.0 million charge ($11.2 million after tax or $.63 per share) for restructuring.
(c) Fifty-three weeks.
(d) Pretax income plus restructuring costs, depreciation and amortization, and interest expense.
(e) Pretax income before restructuring costs and interest expense divided by average of month-end total assets
used in operations.
(f) Cost of goods sold divided by average of month-end inventories.
(g) Net sales divided by average of month-end receivables.
(h) Includes a charge of $ (72.5) million, net of income taxes, or $(4.07) per share for cumulative effect of
adoption of SFAS Nos. 106 & 109.
</TABLE>
26
<PAGE> 16
S E L E C T E D F I N A N C I A L D A T A
Springs Industries, Inc.
<TABLE>
<CAPTION>
1988 1987 1986 1985(c) 1984
<S> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS (in millions):
Net sales . . . . . . . . . . . . . . . . . . $1,824.8 $1,661.1 $1,505.0 $1,013.5 $ 945.0
Income (loss) before income taxes . . . . . . 85.1(b) 101.5 58.8 20.6 55.1
Income taxes . . . . . . . . . . . . . . . . . 32.3 45.8 26.2 7.3 19.0
Net income (loss) . . . . . . . . . . . . . . 52.8(b) 55.7 32.6 13.3 36.1
Operating cash flow(d) . . . . . . . . . . . . 195.1 186.6 144.6 67.3 92.5
Class A cash dividends declared. . . . . . . . 14.7 14.5 13.5 13.4 13.4
Class B cash dividends declared . . . . . . . 2.8 - - - -
- --------------------------------------------------------------------------------------------------------------
PER SHARE OF COMMON STOCK:
Net income (loss) . . . . . . . . . . . . . . 2.98(b) 3.13 1.83 .75 2.03
Class A cash dividends declared . . . . . . . 1.01 .82 .76 .76 .76
Class B cash dividends declared . . . . . . . .27 - - - -
Shareholders' equity . . . . . . . . . . . . . 30.67 28.64 26.24 25.03 25.03
Class A stock price range:
High . . . . . . . . . . . . . . . . . . . 38 3/4 38 1/4 28 7/16 23 20 1/8
Low . . . . . . . . . . . . . . . . . . . . 27 20 3/4 20 1/2 15 5/8 15 1/4
- --------------------------------------------------------------------------------------------------------------
STATISTICAL DATA:
Income to net sales . . . . . . . . . . . . . 2.9% 3.4% 2.2% 1.3% 3.8%
Net income to average shareholders' equity . . 10.2% 11.5% 7.3% 3.0% 8.4%
Operating return on assets employed (e) . . . 12.0% 12.3% 8.8% 4.4% 9.7%
Inventory turnover (f) . . . . . . . . . . . . 6.2 5.8 5.0 5.7 5.8
Accounts receivable turnover (g) . . . . . . . 6.4 6.5 6.3 6.2 6.2
Net sales divided by average assets . . . . . 1.7 1.6 1.5 1.5 1.5
Current ratio . . . . . . . . . . . . . . . . 2.7 3.0 3.3 3.1 4.8
Capital expenditures (in millions) . . . . . . $ 77.1 $ 69.9 $ 57.0 $ 37.4 $ 50.9
Depreciation (in millions) . . . . . . . . . . $ 62.1 $ 57.8 $ 55.6 $ 37.6 $ 31.9
Approximate number of shareholders . . . . . . 3,700 3,400 3,300 3,400 3,500
Average number of associates . . . . . . . . . 23,400 23,100 23,500 17,000 16,800
- --------------------------------------------------------------------------------------------------------------
SELECTED BALANCE SHEET DATA (in millions):
Working capital . . . . . . . . . . . . . . . $ 389.8 $ 428.1 $ 402.2 $ 381.1 $ 279.8
Property:
Cost . . . . . . . . . . . . . . . . . . . 872.5 803.6 749.3 710.3 561.7
Accumulated depreciation . . . . . . . . . (448.0) (410.5) (366.0) (324.6) (311.2)
Net . . . . . . . . . . . . . . . . . . . . 424.5 393.1 383.3 385.7 250.5
Total assets . . . . . . . . . . . . . . . . . 1,118.3 1,083.7 1,010.4 1,013.1 615.0
Long-term debt . . . . . . . . . . . . . . . . 238.5 256.8 271.0 308.1 39.1
Shareholders' equity . . . . . . . . . . . . . 541.6 505.0 464.6 442.2 441.2
- --------------------------------------------------------------------------------------------------------------
Note: Selected financial data includes M. Lowenstein Corporation, Uniglass, Andre' Richard, Carey-McFall,
C. S. Brooks, C. S. Brooks Canada, and Griffiths-Kerr from their dates of acquisition in November 1985,
February 1988, March 1988, March 1989, April 1991, August 1992, and October 1992, respectively.
</TABLE>
27
<PAGE> 17
Description of two graphs on page twelve should read as follows:
Pie graph depicting sales per industry segment, which shows home
furnishings at 69% of total and specialty fabrics at 31% of total.
Pie graph depicting earnings per industry segment, which shows home furnishings
at 82% of total and specialty fabrics at 18% of total.
Description of graph on page fifteen should read as follows:
Pie graph depicting distribution of the sales dollar, which shows the
following:
Raw materials and purchased goods 701.0
Wages, salary, & benefits 616.7
Other manufacturing, selling, general
and administrative expenses, etc. 621.2
Income taxes 36.6
Cash dividends and retained earnings 47.3
(1) Excluding cumulative effect of adoption of SFAS Nos. 106 & 109.
Description of graph on page 25 should read as follows:
Bar graph depicting price range of common stock, noted above, by quarters for
1992 and 1993.
<PAGE> 1
SUBSIDIARIES
OF
SPRINGS INDUSTRIES, INC.
<TABLE>
<CAPTION>
Place of
Name of Subsidiary Incorporation
- ------------------ -------------
<S> <C> <C>
1. Catawba Trucking, Inc. South Carolina
2. Clark-Schwebel Corporation New York
3. Clark-Schwebel Distribution Corp. Delaware
4. Clark-Schwebel, Inc. New York
5. Fort Mill A Inc. Delaware
6. Springs Canada, Inc. Ontario
7. Lancaster International Sales Corporation South Carolina
8. Springmaid International, Inc. South Carolina
9. Fort Mill F Inc. South Carolina
10. Springs de Mexico, S.A. de C.V. Mexico
11. Springs Holdings Limited Ontario
12. Springs Industries (Asia) Inc. Delaware
13. Springs Management Company, Inc. South Carolina
14. Springs Sales Corporation U.S. Virgin Islands
15. Springs Window Fashions Division, Inc. Delaware
</TABLE>
<PAGE> 1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statements No.
33-46260 and No. 33-46261 of Springs Industries, Inc. on Form S-8 of our
reports dated January 31, 1994, appearing and incorporated by reference in this
Annual Report on Form 10-K of Springs Industries, Inc. for the year ended
January 1, 1994.
DELOITTE & TOUCHE
Charlotte, North Carolina
March 30, 1994
