SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 28, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number: 1-13736
---------
U.S. INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of 22-3369326
incorporation or organization) (I.R.S.Employer Identification No.)
101 WOOD AVENUE SOUTH
ISELIN, NJ 08830
(Address of principal executive offices)
(732) 767-0700
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days:
Yes [X] No [ ]
As of August 1, 1997, U.S. Industries, Inc. had one class of common stock, of
which 49,746,216 shares were outstanding.
<PAGE>
U.S. INDUSTRIES, INC.
INDEX
Page
No.
---
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated Statements of Operations for the Three and Nine
Months Ended June 30,1997 and 1996............................. 1
Consolidated Balance Sheets, June 30, 1997 and September 30,
1996........................................................... 2
Consolidated Statements of Cash Flows for the Nine Months
Ended June 30, 1997 and 1996................................... 3
Consolidated Statement of Changes in Stockholders' Equity
for the Nine Months Ended June 30, 1997........................ 4
Notes to Consolidated Financial Statements..................... 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations...................................... 11
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders ........... 18
Item 6. Exhibits ...................................................... 18
SIGNATURE ............................................................. 19
EXHIBIT INDEX
<PAGE>
PART I. FINANCIAL INFORMATION.
ITEM 1. FINANCIAL STATEMENTS.
U.S. INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN MILLIONS EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
-------- --------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $ 615 $ 503 $ 1,638 $ 1,412
Operating costs and expenses:
Cost of products sold 425 349 1,119 951
Selling, general and administrative expenses 123 103 352 325
--------- ---------- ---------- ---------
Operating income 67 51 167 136
Interest expense 12 14 35 48
Interest income (1) (2) (3) (6)
Other (income) expense, net (1) 2 - 6
--------- ---------- ---------- ---------
Income before income taxes, discontinued operations and
extraordinary loss 57 37 135 88
Provision for income taxes 24 18 58 41
--------- ---------- ---------- ---------
Income from continuing operations 33 19 77 47
Discontinued operations:
Income from operations of discontinued operations
(net of income taxes of $1, $5, $4 and $5) 2 7 6 7
(Loss) gain on disposal of discontinued operations
(net of income taxes (benefit) of $-, $(1), $24 and $9) - (2) 83 66
--------- ---------- ---------- ---------
Income from discontinued operations 2 5 89 73
--------- ---------- ---------- ---------
Income before extraordinary loss 35 24 166 120
Extraordinary loss (net of income tax benefits of $1 and $16) - - (2) (25)
--------- ---------- ---------- ---------
Net income $ 35 $ 24 $ 164 $ 95
========= ========== ========== =========
Income from continuing operations per share $ 0.66 $ 0.37 $ 1.53 $ 0.90
Income from discontinued operations per share 0.03 0.10 1.75 1.38
Extraordinary loss per share - - (0.04) (0.46)
--------- ---------- ---------- ---------
Net income per share $ 0.69 $ 0.47 $ 3.24 $ 1.82
========= ========== ========== =========
Weighted average common shares outstanding 50.2 51.6 50.5 52.5
========= ========== ========== =========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
1
<PAGE>
U.S. INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
June 30, September 30,
1997 1996
---- ----
(unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 32 $ 45
Trade receivables, net of allowance of $38 and $36 400 342
Inventories, net 400 344
Deferred income taxes 43 43
Other current assets 38 22
Net assets held for disposition 96 157
--------------- -------------
Total current assets 1,009 953
Property, plant and equipment, net of accumulated
depreciation of $388 and $355 328 274
Deferred income taxes 29 25
Other assets 136 114
Goodwill, net 404 403
--------------- -------------
$ 1,906 $ 1,769
=============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ - $ 1
Current maturities of long-term debt 131 16
Trade accounts payable 139 150
Accrued expenses and other liabilities 199 165
Income taxes payable 56 43
--------------- -------------
Total current liabilities 525 375
Long-term debt 576 717
Other liabilities 163 150
--------------- -------------
Total liabilities 1,264 1,242
--------------- -------------
Commitments and contingencies (Note 6)
Stockholders' equity:
Common stock (par value $.01 per share), authorized 200,000,000 shares;
issued 53,904,374 and 53,734,565,
respectively; outstanding 49,864,764 and 51,392,001, respectively) 1 1
Paid in capital 568 563
Retained earnings 193 29
Unearned restricted stock (16) (19)
Other equity (3) (2)
Treasury stock (4,039,610 and 2,342,564 shares, respectively) at cost (101) (45)
--------------- --------------
Total stockholders' equity 642 527
--------------- --------------
$ 1,906 $ 1,769
=============== ==============
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
2
<PAGE>
U.S. INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS-UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
JUNE 30,
1997 1996
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Income from continuing operations $ 77 $ 47
Adjustments to reconcile income from continuing operations to net cash
provided by operating activities of continuing operations:
Depreciation and amortization 41 40
Provision for doubtful accounts 4 3
Gain on sale of excess real estate (2) -
Gain on sale of subsidiary stock (1) -
Changes in operating assets and liabilities, excluding the effects of
acquisitions and dispositions:
Increase in trade receivables (51) (2)
Increase in inventories (23) (23)
(Increase) decrease in other current assets (4) 6
Increase in other assets (34) (6)
Decrease in trade accounts payable (14) (4)
Decrease in income taxes payable (11) (10)
Increase (decrease) in accrued expenses and other liabilities 19 (10)
Increase (decrease) in other liabilities 9 (12)
Other, net 2 1
------------ -----------
NET CASH PROVIDED BY OPERATING
ACTIVITIES OF CONTINUING OPERATIONS 12 30
------------ ----------
Income from discontinued operations 89 73
Adjustments to reconcile income from discontinued operations to
net (used in) cash provided by operating activities of discontinued operations:
Gain on disposal of net assets held for disposition (83) (66)
(Increase) decrease in net assets held for disposition (29) 14
------------ ----------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES OF DISCONTINUED OPERATIONS (23) 21
------------ ----------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES (11) 51
------------ ----------
INVESTING ACTIVITIES:
Proceeds from sale of net assets held for disposition 197 224
Proceeds from sale of subsidiary stock 4 -
Acquisition of companies, net of cash acquired (76) (22)
Purchases of property, plant and equipment (50) (30)
Proceeds from real estate transactions 10 15
Purchase of investments (1) -
------------ ----------
NET CASH PROVIDED BY INVESTING ACTIVITIES 84 187
------------ ----------
FINANCING ACTIVITIES:
Proceeds from long-term debt 1,329 862
Repayment of long-term debt (1,356) (1,060)
Repayment of notes payable - (5)
Purchase of treasury stock (59) (42)
Proceeds from exercise of stock options 4 -
------------ -----------
NET CASH USED IN FINANCING ACTIVITIES (82) (245)
------------ -----------
Effect of exchange rate changes on cash (4) -
DECREASE IN CASH AND CASH EQUIVALENTS (13) (7)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 45 51
------------ -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 32 $ 44
============ ===========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
3
<PAGE>
U.S. INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED JUNE 30, 1997
(DOLLARS IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
Unearned Total
Common Paid in Retained Restricted Other Treasury Stockholders'
Stock Capital Earnings Stock Equity Stock Equity
----- ------- -------- ----- ------ ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at September 30, 1996 $ 1 $ 563 $ 29 $ (19) $ (2) $ (45) $ 527
Net income 164 164
Amortization of unearned restricted stock 5 5
Purchase of 1,861,666 shares of common
stock (59) (59)
Common stock issued (169,809 shares)
upon exercise of options - 2 2
Treasury stock issued (164,620 shares) to
employees, directors and upon exercise
of options - 1 (2) 3 2
Income tax benefit relating to stock
plans 2 2
Translation adjustment (1) (1)
--------- ---------- ---------- ----------- ---------- --------- -------
Balance at June 30, 1997 $ 1 $ 568 $ 193 $ (16) $ (3) $ (101) $ 642
========= ========== ========== =========== ========== ========= =======
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
4
<PAGE>
U.S. INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1997
NOTE 1 - BASIS OF PRESENTATION
U.S. Industries, Inc. (the "Company") is a diversified manufacturer of consumer
and industrial products. The Company was incorporated in Delaware in February
1995, and has been publicly-owned since May 31, 1995, at which time Hanson PLC
("Hanson") paid a dividend to its shareholders of the Company's common stock.
Prior to May 31, 1995, the Company was a wholly-owned subsidiary of Hanson.
Certain businesses, assets and liabilities were transferred to the Company by
Hanson pursuant to transactions consummated on May 31, 1995 and June 5, 1995
(collectively, the "Demerger").
The accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information, Article 10 of Regulation S-X and with the instructions to Form
10-Q. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. The interim financial data for the three and nine months ended June
30, 1997 and 1996 are unaudited and, in the opinion of management, reflect all
necessary adjustments for a fair presentation of the financial position and
results of operations for the interim periods on a consistent basis. Such
adjustments were of a normal and recurring nature. The results of operations for
the three and nine month periods ended June 30, 1997 are not necessarily
indicative of those for the full fiscal year ending September 27, 1997. For
further information, refer to the Consolidated (Combined) Financial Statements
and footnotes thereto included in the Company's Annual Report on Form 10-K for
the fiscal year ended September 28, 1996.
The Company's fiscal year ends on the Saturday nearest to September 30. All
three and nine month data contained herein reflect results of operations for the
13-week and 39-week periods ended on the Saturday closest to June 30, but are
presented as of such date for convenience.
Prior periods presented have been restated to reflect divestitures and formal
plans to sell businesses included in net assets held for disposition as well as
the retention of a business previously identified as a discontinued operation.
See Note 4.
In January 1997, an initial public offering of 25% of the shares of Jade
Technologies Singapore Ltd ("Jade") was completed, generating proceeds of $4
million. Minority interest of $3 million is recorded in other liabilities.
NOTE 2 - INVENTORIES
Inventories consist of the following:
(in millions)
June 30, September 30,
1997 1996
---- ----
(unaudited)
Finished products $ 198 $ 180
Work-in process 93 70
Raw materials 109 94
------------------ ------------------
Inventories, net $ 400 $ 344
================== ==================
5
<PAGE>
NOTE 3 - DEPRECIATION AND AMORTIZATION
Depreciation and amortization consists of the following:
<TABLE>
<CAPTION>
(in millions-unaudited)
Nine Months Ended
June 30,
1997 1996
---- ----
<S> <C> <C>
Depreciation $ 32 $ 26
Amortization of goodwill 10 9
Amortization of unearned restricted stock 5 5
Amortization of deferred income (2) (2)
Amortization of deferred financing costs (4) 2
---------------- ---------------
$ 41 $ 40
================ ===============
</TABLE>
NOTE 4 - DISCONTINUED OPERATIONS
In the first quarter of fiscal 1996, the Company sold Blue Mountain Industries
and the Office Furniture Group for an aggregate of $170 million.
In the third quarter of fiscal 1996, the Company sold the operating assets of
Farberware, Spartus and Piedmont for an aggregate of $54 million.
In the first quarter of fiscal 1997, the Company sold Tubular Textile Machinery
for $21 million in cash and a note for $1 million.
In the second quarter of fiscal 1997, the Company sold SCM Metals Products, Inc.
("SCM Metals") and the operating assets of QPF, Inc. for an aggregate of $165
million in cash.
In the third quarter of fiscal 1997, the Company sold certain assets of Sunlite
Casual Furniture, Inc.'s ("Sunlite") resin outdoor furniture business and a
portion of its investment in Ground Round Restaurants, Inc. ("Ground Round") for
an aggregate of $11 million in cash and a note for $2 million. Of the remaining
assets of the resin outdoor furniture business, $2 million of equipment was
transferred to a Company affiliate subsequent to quarter-end, while the
remaining net assets will be liquidated in the fourth quarter.
During the nine months ended June 30, 1997, the Company decided to retain
Bearing Inspection, Inc. ("Bearing") as a continuing operation. Bearing was
previously identified and accounted for as a discontinued operation. Also,
during the nine months ended June 30, 1997, the Company adopted formal plans to
dispose of Native Textiles ("Native") and Tommy Armour Golf Company ("Armour
Golf"). At June 30, 1997, Native, Armour Golf and an investment in Ground Round
are classified as discontinued operations.
The following are the results of the discontinued operations:
(in millions-unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
-------- --------
1997 1996 1997 1996
---- ---- ---- ----
Net sales $ 57 $ 132 $ 192 $ 426
Pre-tax income 3 12 10 12
6
<PAGE>
NOTE 4 - DISCONTINUED OPERATIONS (CONTINUED)
Amounts classified as net assets held for disposition relate to the businesses
and equity investment accounted for as discontinued operations and consist of
the following after accrual for anticipated net-of-tax losses on dispositions
not yet consummated:
(in millions)
June 30, September 30,
1997 1996
---- ----
(unaudited)
Net current assets $ 62 $ 75
Property, plant and equipment, net 14 76
Other non-current assets, net 20 6
------------- ------------
Net assets held for disposition $ 96 $ 157
============= ============
NOTE 5 - LONG-TERM DEBT
Long-term debt consists of the following:
(in millions)
June 30, September 30,
1997 1996
---- ----
(unaudited)
7.25% Senior Notes, net $ 123 $ -
Term loan - 370
Revolving credit facility 500 250
Other long-term debt 84 113
------------ ---------
707 733
Less current maturities 131 16
------------ ---------
Long-term debt $ 576 $ 717
============ =========
On December 12, 1996, USI American Holdings, Inc. ("USIAH"), a wholly owned
subsidiary of the Company, issued $125 million aggregate principal amount of
7.25% Senior Notes due December 1, 2006 (the "Notes"). The net cash proceeds
were $123 million after transaction fees and discounts. The Notes bear interest
at 7.25% payable semiannually on June 1 and December 1, commencing June 1, 1997,
and are redeemable at any time at the option of the issuer, in whole or in part,
at a redemption price equal to the greater of (i) 100% of the principal amount
to be redeemed, or (ii) the sum of the present values of the remaining scheduled
payments of principal and interest on the Notes to be redeemed, discounted at a
rate based on the yield to maturity of comparable U.S. Government securities
plus 10 basis points, plus, in each case, accrued interest to the date of
redemption. The Notes are fully and unconditionally guaranteed by the Company.
The Notes are unsecured but the indenture places restrictions on, among other
things, liens, subsidiary indebtedness and dividends. USIAH has exchanged the
Notes, which were not registered under the Securities Act of 1933, for
registered notes having substantially the same terms as the Notes.
See Note 8 for summary financial information of USIAH.
The proceeds from the sale of the Notes were used to repay a portion of the term
loan under the Company's then existing credit agreement (the "Previous Credit
Agreement"), the remainder of which was repaid using proceeds from the initial
borrowing under a credit agreement dated as of December 12, 1996 (the "New
Credit Agreement") consisting of a five year unsecured revolving line of credit
of up to an aggregate amount of $750 million. The revolving credit commitment
will be permanently reduced by $100 million on December 12, 1999 and by an
additional $150 million on December 12, 2000.
7
<PAGE>
NOTE 5 - LONG-TERM DEBT (CONTINUED)
The New Credit Agreement includes (i) committed advances ("Committed Advances")
and (ii) uncommitted bid option advances. The Committed Advances are at lower
borrowing spreads than the previous Credit Agreement and bear interest based on,
at the option of the Company, (i) specified spreads over the London Interbank
Offered Rate ("LIBOR") or (ii) the higher of the rate of interest publicly
announced by Bank of America in San Francisco, California as its reference rate
or 50 basis points above the federal funds rate in effect on such date (the
"Base Rate"). The spreads on the LIBOR-based borrowings range between 15 and
62.5 basis points, based upon the Company's senior unsecured debt ratings for
the relevant period. At June 30, 1997 three-month LIBOR was 5.78% per annum and
the spread over LIBOR was 25 basis points. A facility fee is payable on a
quarterly basis in arrears under the New Credit Agreement on the full amount of
the facility, regardless of the amount utilized. The facility fee ranges between
7.5 and 25 basis points per annum, based upon the Company's senior unsecured
debt ratings for the relevant period. At June 30, 1997, the facility fee was
12.5 basis points per annum.
The New Credit Agreement places restrictions on, among other things, liens,
mergers, consolidations and additional indebtedness. Its financial covenants
require the Company to comply with a maximum ratio of total funded debt to
capital and a consolidated leverage ratio.
In conjunction with the repayment of all outstanding indebtedness under the
Previous Credit Agreement, in the first quarter of fiscal 1997, a net-of-tax,
non-cash, extraordinary charge of $2 million was incurred to write-off
unamortized deferred financing costs and to accrue for previously deferred
losses associated with interest rate protection agreements. In the first quarter
of fiscal 1996, in connection with entering into the Previous Credit Agreement,
the Company recorded a net-of-tax, non-cash extraordinary charge of $25 million
to write-off unamortized deferred financing costs and to accrue for previously
deferred losses associated with interest rate protection agreements.
On December 12, 1996 the Company paid approximately $2 million to settle
interest rate protection agreements entered into in connection with the Notes.
This amount will be amortized over the life of the Notes as deferred financing
costs.
In order to manage its floating interest rate exposure, the Company entered into
interest rate protection agreements whereby the Company receives a floating rate
based on three-month LIBOR and pays a weighted average fixed rate. Currently the
interest rates range from 6.23% to 6.77% per annum. The aggregate notional
amounts and periods covered by such agreements are as follows:
May 30, 1997 through September 30, 1997......................$450 million
September 30, 1997 through May 28, 1999......................$300 million
May 28, 1999 through September 30, 1999......................$200 million
All interest rate protection agreements are of notional amounts and maturities
that relate to specific portions of outstanding debt, and accordingly, are
accounted for as hedge transactions.
Other long-term debt at June 30, 1997 includes $65 million of notes payable with
maturities due within one year which the Company expects to repay using
borrowings under the New Credit Agreement. All of this amount was borrowed under
uncommitted short-term lines of credit with aggregate availability of $195
million. At June 30, 1997, $130 million of long-term debt was reclassified to
current maturities as it is the intention of the Company to use the proceeds of
the Odyssey Sports, Inc. asset sale, received subsequent to the quarter-end, to
repay indebtedness.
See Note 10.
NOTE 6 - COMMITMENTS AND CONTINGENCIES
Certain present and former operating sites, or portions thereof, currently or
previously owned and/or leased by current or former operating units of the
Company are the subject of investigations, monitoring or remediation under the
federal Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA" or "superfund"), the Federal Resource Conservation and Recovery Act or
comparable state statutes or agreements with third parties. These proceedings
are in various stages ranging from initial investigations to active settlement
negotiations to implementation of the clean-up or remediation of sites.
8
<PAGE>
NOTE 6 - COMMITMENTS AND CONTINGENCIES (CONTINUED)
A number of present and former operating units of the Company have been named as
Potentially Responsible Parties ("PRPs") at 15 off-site disposal sites under
CERCLA or comparable state statutes in a number of federal and state
proceedings. The operating units of the Company are working with the
governmental agencies involved and other PRPs to address environmental claims in
a responsible and appropriate manner.
At June 30, 1997, the Company had accrued $15 million for known environmental
related matters. The Company believes that the range of liability for such
matters is between $5 million and $17 million.
Also, certain of the Company's subsidiaries are defendants or plaintiffs in
lawsuits that have arisen in the normal course of business. While certain of
these matters involve substantial amounts, it is management's opinion, based on
the advice of counsel, that the ultimate resolution of such litigation and
environmental matters will not have a material adverse effect on the Company's
financial condition, results of operations or cash flows.
NOTE 7 - ACQUISITIONS
In January 1997, the Company purchased the assets of Woodings-Verona Tool Works,
Inc. ("Woodings-Verona") for $5 million in cash plus the assumption of $1
million of debt. Woodings-Verona manufactures hot-forged heavy striking tools
including sledge hammers, axes, bars, picks and railroad tools.
In March 1997, the Company purchased certain assets of the outdoor furniture
division of Sunbeam Corporation for approximately $60 million in cash. This
includes net post-closing audit adjustments of approximately $2 million received
subsequent to the quarter close. The acquired business, now known as Sunlite
Casual Furniture, Inc. ("Sunlite"), manufactures casual outdoor furniture.
In May 1997, the Company purchased Britains Petite Limited for $9 million in
cash, subject to post-closing audit adjustment. Britains Petite Limited, located
in Nottingham, England, is a manufacturer of military soldier collectibles,
metal and plastic models of agricultural vehicles, figures, animals, buildings
and accessories and preschool plastic toys.
These transactions have been accounted for as purchases and the results of their
operations are included in the financial statements from the dates of
acquisition. The allocation of purchase price is preliminary and subject to
adjustment upon receipt of final valuation information and management's final
estimates as to the fair value of the respective assets acquired and liabilities
assumed.
NOTE 8 - SUMMARIZED FINANCIAL INFORMATION OF SUBSIDIARY
Summarized consolidated financial information of USIAH, the issuer of the Notes,
is as follows:
<TABLE>
<CAPTION>
(in millions - unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Income Statement Data:
Net sales $ 615 $ 503 $ 1,638 $ 1,412
Gross profit 190 154 519 461
Income from continuing operations 34 20 80 50
Net income 36 25 167 98
</TABLE>
9
<PAGE>
NOTE 8 - SUMMARIZED FINANCIAL INFORMATION OF SUBSIDIARY (CONTINUED)
(in millions)
June 30, September 30,
1997 1996
(unaudited)
Balance Sheet Data:
Current assets $ 1,009 $ 953
Non-current assets 897 816
Current liabilities 525 375
Non-current liabilities 739 867
Separate consolidated financial statements of USIAH are not presented as
management has determined that they would not be material to investors.
NOTE 9 - NEW ACCOUNTING PRONOUNCEMENT
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, "Earnings Per Share", which the Company is required to adopt for the period
ended December 31, 1997. The Company will restate all prior periods and present
diluted earnings per share as prescribed by Statement No. 128. The adoption of
Statement No. 128 will not have a material impact on earnings per share
information as currently presented.
NOTE 10 - SUBSEQUENT EVENTS
In July 1997, the Company sold its remaining 27.7% interest in Ground Round for
$4 million.
In July 1997, the Company purchased IXL Manufacturing Company, Inc. ("IXL") for
$12 million plus the assumption of $1.3 million of debt, subject to post-closing
audit adjustment. IXL manufactures fiberglass and wood handles for striking
tools and lawn and garden tools.
On August 8, 1997, the Company sold all of the assets of Odyssey Sports, Inc., a
subsidiary of Armour Golf, for $130 million in cash, subject to post-closing
audit adjustment. Management estimates the after-tax gain on the transaction
will be $50 million. It is the Company's intention to use the proceeds from the
divestiture to repay indebtedness. At the time of the sale, the Company
reclassified the remaining operations of Armour Golf to discontinued operations,
consistent with a previously adopted plan.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
The Company's operations are grouped into two segments: Consumer and Industrial
Products. During the nine months ended June 30, 1997, the Bath and Outdoor
Products Operations were reclassified to the Consumer Group and the Lighting
Products and Systems Operations, which are predominately commercial lighting,
were reclassified to the Industrial Group. Additionally, the Footwear Operations
and the Recreation and Leisure Operations were combined and are presented as the
Other Consumer Operations. These changes reflect better product classification
resulting from acquisition and divestiture activity. The outdoor furniture
operations, acquired in March 1997, are included in the Bath and Outdoor
Products Operations. The results of all operations sold or classified as
discontinued operations are excluded from the table below for all periods
presented and are discussed separately under "Discontinued Operations". See Note
4 to the Consolidated Financial Statements.
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
(IN MILLIONS)
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
-------- ---------
1997 1996 1997 1996
---- ---- ----- ----
<S> <C> <C> <C> <C>
NET SALES
Consumer Group
Housewares .......................................... $ 132 $ 110 $ 375 $ 311
Bath and Outdoor Products............................ 166 104 329 234
Other Consumer....................................... 75 76 240 259
----------- ----------- ---------- ---------
373 290 944 804
Industrial Group
Lighting Products and Systems........................ 136 128 401 373
Other Industrial Products............................ 106 85 293 235
----------- ----------- ---------- ---------
242 213 694 608
TOTAL NET SALES................................... $ 615 $ 503 $ 1,638 $ 1,412
=========== =========== ========== =========
OPERATING INCOME
Consumer Group
Housewares........................................... $ 25 $ 23 $ 71 $ 67
Bath and Outdoor Products............................ 24 20 42 37
Other Consumer ...................................... 7 (1) 20 9
----------- ----------- ---------- ---------
56 42 133 113
----------- ----------- ---------- ---------
Industrial Group
Lighting Products and Systems........................ 10 8 29 24
Other Industrial Products............................ 9 7 26 18
----------- ----------- ---------- ---------
19 15 55 42
----------- ----------- ---------- ---------
Corporate expenses ...................................... (8) (6) (21) (19)
----------- ----------- ---------- ---------
TOTAL OPERATING INCOME........................... $ 67 $ 51 $ 167 $ 136
=========== =========== ========== =========
</TABLE>
11
<PAGE>
DISCLOSURE CONCERNING FORWARD-LOOKING STATEMENTS
All statements, other than statements of historical fact, included in the
following Management's Discussion or elsewhere in this Quarterly Report are, or
may deemed to be, forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. Various economic and competitive factors could cause actual results to
differ materially from those discussed in such forward-looking statements,
including factors which are outside of the control of the Company, such as
interest rates, consumer spending patterns, availability of consumer credit,
levels of residential and commercial construction, levels of automotive
production and changes in raw material costs, along with the other factors noted
in this Quarterly Report and the Company's Annual Report on Form 10-K for fiscal
1996 with respect to the Company's businesses.
THREE MONTHS ENDED JUNE 30, 1997
COMPARED TO THREE MONTHS ENDED JUNE 30, 1996
INTRODUCTION
The Company had sales of $615 million and operating income of $67 million for
the quarter ended June 30, 1997, increases of $112 million (22.3%) and $16
million (31.4%), respectively, compared to the third quarter of fiscal 1996.
CONSUMER GROUP
The Consumer Group had sales of $373 million and operating income of $56 million
for the quarter ended June 30, 1997, increases of $83 million (28.6%) and $14
million (33.3%), respectively, over the third quarter of fiscal 1996.
The Housewares Operations had sales of $132 million and operating income of $25
million for the quarter ended June 30, 1997, increases of $22 million (20.0%)
and $2 million (8.7%), respectively, over the third quarter of fiscal 1996.
Revenue and operating income from vacuum cleaner sales declined due to lower
sales in the United States and in certain major foreign markets, particularly
Austria, Italy, Spain and Japan. The reduced contribution from vacuum cleaner
sales was more than offset by excellent spring sales at the Company's tool
operations. Strong spring shipments of lawn and garden tools, in particular
wheeled goods, resulted in substantially improved sales and operating income
relative to the third quarter of the prior year.
The Bath and Outdoor Products Operations had sales of $166 million and operating
income of $24 million for the quarter ended June 30, 1997, increases of $62
million (59.6%) and $4 million (20.0%), respectively, from the third quarter of
fiscal 1996. These gains were primarily the result of the contribution from the
recently acquired outdoor furniture operations while bath products reported a
marginal increase in operating profits on moderate sales growth. Bath products
reported increased sales and operating profits from domestic operations which
were offset primarily by lower sales and profits from European and Brazilian
operations. Domestic operations benefitted from strong sales of Builder line
products in the do-it-yourself ("DIY") distribution channels while European
operations were affected by lower sales and profits in Italy due to weak market
conditions. Sales of swimming pool products were also below the prior year's
quarter levels due to poor weather conditions in certain markets.
The Other Consumer Operations had sales of $75 million and operating income of
$7 million for the quarter ended June 30, 1997, representing a decrease of $1
million (1.3%) and an increase of $8 million, respectively, from the third
quarter of fiscal 1996. The Company's toy business recorded operating profits in
the quarter compared to a loss in the prior period due to higher profits in the
toy, collectible and hobby categories. The toy business also benefitted from
significantly lower advertising costs and the absence of one-time charges
incurred in the prior period related to the exit from the promotional toy
business, as well as lower manufacturing costs related to the expansion of
manufacturing operations in Mexico. Footwear operations reported lower sales and
operating profits due to the absence of certain promotional programs in child
and infant shoes undertaken in the prior year. Sales of safety and western
footwear increased in the quarter over the prior year period.
12
<PAGE>
INDUSTRIAL GROUP
The Industrial Group had sales of $242 million and operating income of $19
million for the quarter ended June 30, 1997, increases of $29 million (13.6%)
and $4 million (26.7%), respectively, from the third quarter of fiscal 1996.
The Lighting Products and Systems Operations had sales of $136 million and
operating income of $10 million for the quarter ended June 30, 1997, increases
of $8 million (6.3%) and $2 million (25.0%), respectively, over the third
quarter of fiscal 1996. Sales and profits increased in all lighting categories
except commercial indoor lighting which reported lower operating profit as a
result of competitive pricing. Particularly strong results were reported in the
residential and commercial outdoor categories, due in part to new product
introductions.
The Other Industrial Products Operations had sales of $106 million and operating
income of $9 million for the quarter ended June 30, 1997, increases of $21
million (24.7%) and $2 million (28.6%), respectively, from the third quarter of
fiscal 1996. The Company had strong sales of premium automotive leather,
fabricated metal components and molded plastic components to the automotive
industry. The Company benefitted from its significant penetration in the light
truck and Japanese luxury car segments. Sales and operating income from bearing
refurbishment and lead frame manufacturing also increased significantly over the
prior year's quarter.
DISCONTINUED OPERATIONS
During the three months ended June 30, 1997, the Company adopted a formal plan
to dispose of Armour Golf.
The Company had income from operations of discontinued operations of $2 million,
net-of-tax, for the quarter ended June 30, 1997. Discontinued operations as of
June 30, 1997 included Native, Armour Golf and an equity investment in Ground
Round Restaurants, Inc. Discontinued operations are not expected to have a
material impact on the future operations or liquidity of the Company.
For the quarter ended June 30, 1996, the Company had income from discontinued
operations of $5 million, net of tax, consisting of a loss on disposal of $2
million and income from operations of discontinued operations of $7 million. The
loss on disposal relates to reducing the carrying value of the equity investment
in Ground Round to the estimated realizable value. Discontinued operations as of
June 30, 1996 consisted of the companies and equity investment noted above,
Tubular Textile Machinery, SCM Metals, QPF, Inc. and Franklin Dyed Yarns. See
Note 4.
INTEREST AND TAXES
Interest expense was $12 million for the quarter ended June 30, 1997, a $2
million (14.3%) decrease from the comparable period of fiscal 1996. The decrease
reflects lower levels of debt outstanding. Interest income was $1 million for
the quarter ended June 30, 1997, a $1 million (50%) decrease from the comparable
period of fiscal 1996.
The provision for income taxes on continuing operations was $24 million for the
quarter ended June 30, 1997, on pre-tax income of $57 million (a 42.1% effective
tax rate) as compared to a $18 million provision on pre-tax income of $37
million (a 48.6% effective tax rate) in the comparable period of fiscal 1996.
The decrease in the effective tax rate is attributable to reduced state and
foreign taxes.
13
<PAGE>
NINE MONTHS ENDED JUNE 30, 1997
COMPARED TO NINE MONTHS ENDED JUNE 30, 1996
INTRODUCTION
The Company had sales of $1,638 million and operating income of $167 million for
the nine months ended June 30, 1997, increases of $226 million (16.0%) and $31
million (22.8%), respectively, compared to the first nine months of fiscal 1996.
CONSUMER GROUP
The Consumer Group had sales of $944 million and operating income of $133
million for the nine months ended June 30, 1997, increases of $140 million
(17.4%) and $20 million (17.7%), respectively, over the first nine months of
fiscal 1996.
The Housewares Operations had sales of $375 million and operating income of $71
million for the nine months ended June 30, 1997, increases of $64 million
(20.6%) and $4 million (6.0%), respectively, over the first nine months of
fiscal 1996. Sales and operating income from vacuum cleaner sales during the
nine month period exceeded prior year's record levels despite lower sales during
the third fiscal quarter due to the strength of foreign sales in the first half
of the year. During the nine month period, foreign sales were strongest in
Poland, Portugal and the Czech Republic. Sales of winter and spring tools also
exceeded prior year levels as the Company recorded strong third quarter
shipments, well in excess of prior year's levels, due in particular to new
product introductions in the wheeled goods category. Also adding to results were
the acquisitions of the striking tools business, which was acquired in January
1997, and ladder business, which was acquired in July 1996.
The Bath and Outdoor Products Operations had sales of $329 million and operating
income of $42 million for the nine months ended June 30, 1997, increases of $95
million (40.6%) and $5 million (13.5%), respectively, compared to the first nine
months of fiscal 1996. The increases in the nine-month period were primarily due
to the first-time contribution of the outdoor furniture operations while bath
products reported moderately improved results over the prior period. Bath
products reported strong increases in sales and operating profits in the
domestic market while European results were sharply lower. Strong sales of
Builder products into the DIY distribution channel benefitted the domestic
market while lower sales and profits in Italy, due to weak market conditions,
affected the European market. Bath Products results also include the first-time
contribution of swimming pool products in the first half of the year.
The Other Consumer Operations had sales of $240 million and operating income of
$20 million for the nine months ended June 30, 1997, a decrease of $19 million
(7.4%) and an increase of $11 million (122.2%), respectively, from the first
nine months of fiscal 1996. Sales in the Company's toy business declined due to
the exit from the promotional toy category while operating profits increased due
to improved results in the agricultural and collectible toy categories, as well
as substantially lower advertising expenses. Toy operations also benefitted from
lower manufacturing costs related to the expansion of manufacturing operations
in Mexico. Sales gains in safety and western footwear were offset by lower sales
in children's and infant footwear, attributable to the absence of certain
profitable one-time sales programs undertaken in the prior year.
INDUSTRIAL GROUP
The Industrial Group had sales of $694 million and operating income of $55
million for the nine months ended June 30, 1997, increases of $86 million
(14.1%) and $13 million (31.0%), respectively, over the first nine months of
fiscal 1996.
The Lighting Products and Systems Operations had sales of $401 million and
operating income of $29 million for the nine months ended June 30, 1997,
increases of $28 million (7.5%) and $5 million (20.8%), respectively, over the
first nine months of fiscal 1996. Sales and operating income from the
residential and outdoor categories increased significantly due in part to new
product introductions, offsetting weakness in the Company's commercial indoor
category as a result of competitive pricing.
14
<PAGE>
The Other Industrial Products Group had sales of $293 million and operating
income of $26 million for the nine months ended June 30, 1997, increases of $58
million (24.7%) and $8 million (44.4%), respectively, over the first nine months
of fiscal 1996. The Company benefitted from strong sales of premium automotive
leather, fabricated metal components and molded plastic components to the
automotive industry as a result of business related to the light truck and
Japanese luxury car segments. Sales and operating income from bearing
refurbishment also increased significantly as a result of the Company's
continuing effort to expand its customer base.
DISCONTINUED OPERATIONS AND EXTRAORDINARY LOSS
During the nine months ended June 30, 1997, due to improving results and
business prospects, the Company decided to retain Bearing as part of its
continuing operations. Bearing was identified for disposition at the time of the
Demerger and had been accounted for as a discontinued operation since that time.
Also, during the nine months ended June 30, 1997, the Company adopted formal
plans to dispose of Native and Armour Golf.
The Company had income from discontinued operations of $89 million, net of tax,
for the nine months ended June 30, 1997, consisting of gains on disposals of
discontinued operations of $83 million and income from operations of
discontinued operations of $6 million. The gains on dispositions resulted from
the sales of Tubular Textile Machinery, SCM Metals and the assets of QPF, Inc.
Discontinued operations as of June 30, 1997 included the results of the
disposals identified above, as well as Native, Armour Golf and an equity
investment in Ground Round. Discontinued operations are not expected to have a
material impact on the future operations or liquidity of the Company.
For the nine months ended June 30, 1996, the Company had income from
discontinued operations of $73 million, net-of-tax, consisting of gains on
disposals of discontinued operations of $66 million and income from operations
of discontinued operations of $7 million. The gains on dispositions resulted
from the sales of Blue Mountain Industries and the Office Furniture Group. The
results from operations of discontinued operations consisted of the companies
noted above and the companies sold during fiscal 1996. See Note 4.
In conjunction with the repayment of all outstanding indebtedness under the
Previous Credit Agreement, during the first quarter of fiscal 1997, a
net-of-tax, non-cash, extraordinary charge of $2 million was incurred to
write-off unamortized deferred financing costs and to accrue for previously
deferred losses associated with interest rate protection agreements.
Additionally, during the first quarter of fiscal 1996, a net-of-tax, noncash,
extraordinary charge of $25 million was incurred to write-off unamortized
deferred financing costs and to accrue for previously deferred losses associated
with the interest rate protection agreements.
INTEREST AND TAXES
Interest expense was $35 million for the nine months ended June 30, 1997, a $13
million (27.1%) decrease from the comparable period of fiscal 1996. The decrease
reflects lower levels of debt outstanding, as well as lower borrowing costs.
Interest income was $3 million for the nine months ended June 30, 1997, a $3
million (50.0%) decrease from the comparable period of fiscal 1996.
The provision for income taxes on continuing operations was $58 million for the
nine months ended June 30, 1997, on pre-tax income of $135 million (a 43.0%
effective tax rate) as compared to a $41 million provision on pre-tax income of
$88 million (a 46.6% effective tax rate) in the comparable period of fiscal
1996. The decrease in the effective tax rate is attributable to reduced state
and foreign taxes.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of liquidity and capital resources are cash
provided from operations, sale of discontinued operations, borrowings under the
New Credit Agreement and proceeds from the issuance of the Notes described
below.
Operating activities consumed $11 million in net cash during the nine months
ended June 30, 1997 compared to net cash generated of $51 million for the
comparable period of fiscal 1996. In the current period, continuing operations
generated $12 million compared to $30 million for the comparable period of
fiscal 1996. Increases in cash payments to
15
<PAGE>
vendors and increases in receivables, primarily attributable to Sunlite, which
was acquired in March 1997, reduced cash generation in the current period.
Investing activities provided net cash of $84 million in the nine months ended
June 30, 1997 compared to $187 million for the comparable period of fiscal 1996.
The nine months ended June 30, 1997 included proceeds of $197 million from the
sale of net assets held for disposition, which resulted in an after-tax gain of
$83 million, $10 million from real estate transactions and $4 million from the
sale of a subsidiary's stock. Partially offsetting the proceeds were capital
expenditures of $50 million and acquisition of companies for $76 million. The
prior year period included $224 million generated from the sale of net assets
held for disposition, which resulted in an after-tax gain of $66 million.
Investing activities provided less cash in the current period as a result of
lower proceeds from asset sales, and increased expenditures on acquisitions,
plants, and equipment.
Financing activities used net cash of $82 million in the nine months ended June
30, 1997 compared to $245 million for the comparable period of fiscal 1996. The
current period included repayments under long-term debt in excess of new
borrowings totaling $27 million and the purchase of $59 million of the Company's
common stock for treasury. Net cash in both periods was used to repay
outstanding debt, however, the larger reduction in debt in the prior period was
funded by higher cash from operations and asset sales, as well as lower
expenditures on acquisitions, plants and equipment.
On December 12, 1996, USI American Holdings, Inc. ("USIAH"), a wholly owned
subsidiary of the Company, issued $125 million aggregate principal amount of
7.25% Senior Notes due December 1, 2006 (the "Notes"). The net cash proceeds
were $123 million after transaction fees and discounts. The Notes bear interest
at 7.25% payable semiannually on June 1 and December 1, commencing June 1, 1997,
and are redeemable at any time at the option of the issuer, in whole or in part,
at a redemption price equal to the greater of (i) 100% of the principal amount
to be redeemed, or (ii) the sum of the present values of the remaining scheduled
payments of principal and interest on the Notes to be redeemed, discounted at a
rate based on the yield to maturity of comparable U.S. Government securities
plus 10 basis points, plus, in each case, accrued interest to the date of
redemption. The Notes are fully and unconditionally guaranteed by the Company.
The Notes are unsecured but the indenture places restrictions on, among other
things, liens, subsidiary indebtedness and dividends. USIAH has exchanged the
Notes, which were not registered under the Securities Act of 1933, for
registered notes having substantially the same terms as the Notes. See Note 8 to
the Consolidated Financial Statements for summary financial information of
USIAH.
The proceeds from the sale of the Notes were used to repay a portion of the term
loan under the Company's then existing credit agreement (the "Previous Credit
Agreement"), the remainder of which was repaid using proceeds from the initial
borrowing under a credit agreement dated as of December 12, 1996 (the "New
Credit Agreement") consisting of a five year unsecured revolving line of credit
of up to an aggregate amount of $750 million. The revolving credit commitment
will be permanently reduced by $100 million on December 12, 1999 and by an
additional $150 million on December 12, 2000.
The New Credit Agreement includes (i) committed advances ("Committed Advances")
and (ii) uncommitted bid option advances. The Committed Advances are at lower
borrowing spreads than the previous Credit Agreement and bear interest based on,
at the option of the Company, (i) specified spreads over the London Interbank
Offered Rate ("LIBOR") or (ii) the higher of the rate of interest publicly
announced by Bank of America in San Francisco, California as its reference rate
or 50 basis points above the federal funds rate in effect on such date (the
"Base Rate"). The spreads on the LIBOR-based borrowings range between 15 and
62.5 basis points, based upon the Company's senior unsecured debt ratings for
the relevant period. At June 30, 1997 three-month LIBOR was 5.78% per annum and
the spread over LIBOR was 25 basis points. A facility fee is payable on a
quarterly basis in arrears under the New Credit Agreement on the full amount of
the facility, regardless of the amount utilized. The facility fee ranges between
7.5 and 25 basis points per annum, based upon the Company's senior unsecured
debt ratings for the relevant period. At June 30, 1997, the facility fee was
12.5 basis points per annum.
The New Credit Agreement places restrictions on, among other things, liens,
mergers, consolidations and additional indebtedness. Its financial covenants
require the Company to comply with a maximum ratio of total funded debt to
capital and a consolidated leverage ratio.
16
<PAGE>
On December 12, 1996 the Company paid approximately $2 million to settle
interest rate protection agreements entered into in connection with the Notes.
This amount will be amortized over the life of the Notes as deferred financing
costs.
In order to manage its floating interest rate exposure, the Company entered into
interest rate protection agreements whereby the Company receives a floating rate
based on three-month LIBOR and pays a weighted average fixed rate. Currently the
interest rates range from 6.23% to 6.77% per annum. The aggregate notional
amounts and periods covered by such agreements are as follows:
May 30, 1997 through September 30, 1997.....................$450 million
September 30, 1997 through May 28, 1999.....................$300 million
May 28, 1999 through September 30, 1999.....................$200 million
All interest rate protection agreements are of notional amounts and maturities
that relate to specific portions of outstanding debt, and accordingly, are
accounted for as hedge transactions.
Other long-term debt at June 30, 1997 includes $65 million of notes payable with
maturities due within one year which the Company expects to repay using
borrowings under the New Credit Agreement. All of this amount was borrowed under
uncommitted short-term lines of credit with aggregate availability of $195
million. At June 30, 1997, $130 million of long-term debt was reclassified to
current maturities as it is the intention of the Company to use the proceeds of
the Odyssey Sports, Inc. asset sale, received subsequent to the quarter-end, to
repay indebtedness.
See Note 10.
OUTLOOK
Despite the elimination of expected earnings from golf equipment sales, due to
the sale of Odyssey Golf, and weak trading conditions in certain foreign markets
of Jacuzzi and Rexair, the Company expects to achieve full-year earnings per
share from continuing operations in the range of $2.15 to $2.20. See "Disclosure
Concerning Forward-Looking Statements".
17
<PAGE>
PART II. OTHER INFORMATION.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Annual Meeting of Stockholders of the Company was held on February
6, 1997. At the meeting:
1. The following persons were elected as Directors of the Company in
Class II to serve until the 2000 Annual Meeting and until their
successors are elected and qualified:
Name Votes For Votes Withheld
---- --------- --------------
Charles H. Price, II 41,039,784 309,025
Frank R. Reilly 41,031,922 316,887
Royall Victor, III 41,038,205 310,604
The terms of Directors of the Company in Class I and Class III will
continue until the 1999 and 1998 Annual Meetings of Stockholders,
respectively.
2. The U. S. Industries, Inc. 1997 Restricted Stock Plan and Related
Amendment Number Two to the Amended U. S. Industries, Inc. Stock Option
Plan were approved by the stockholders, as follows:
Votes For: 39,030,470
Votes Against: 2,076,478
Abstentions: 143,778
3. Amendment Number Three to the Amended U. S. Industries, Inc. Stock
Option Plan was approved by the stockholders, as follows:
Votes For: 37,623,820
Votes Against: 3,477,211
Abstentions: 149,695
4. The selection of Ernst & Young LLP as the Company's independent
auditors for the fiscal year ended September 30, 1997 was ratified by
the stockholders, as follows:
Votes For: 41,143,387
Votes Against: 137,117
Abstentions: 68,305
The names of the Class I and Class II directors, and detailed
descriptions of the U. S. Industries, Inc. 1997 Restricted Stock Plan
and the Amended U. S. Industries, Inc. Stock Option Plan are included
in, and are incorporated by reference to, the Company's definitive
proxy statement for its 1997 Annual Meeting of Stockholders, which was
filed with the Commission on December 13, 1996.
ITEM 6. EXHIBITS.
(a) Exhibits
27 Financial Data Schedule
18
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
U.S. INDUSTRIES, INC.
Date: August 12, 1997 /s/ Frank R. Reilly
-------------------------------
Frank R. Reilly
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
19
<PAGE>
U.S. INDUSTRIES, INC.
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS CONTAINED IN THE BODY OF THE ACCOMPANYING FORM 10-Q AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-28-1996
<PERIOD-END> JUN-28-1997
<CASH> 32
<SECURITIES> 0
<RECEIVABLES> 438
<ALLOWANCES> 38
<INVENTORY> 400
<CURRENT-ASSETS> 1,009
<PP&E> 716
<DEPRECIATION> 388
<TOTAL-ASSETS> 1,906
<CURRENT-LIABILITIES> 525
<BONDS> 576
0
0
<COMMON> 1
<OTHER-SE> 641
<TOTAL-LIABILITY-AND-EQUITY> 1,906
<SALES> 1,638
<TOTAL-REVENUES> 1,638
<CGS> 1,119
<TOTAL-COSTS> 1,119
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 4
<INTEREST-EXPENSE> 35
<INCOME-PRETAX> 135
<INCOME-TAX> 58
<INCOME-CONTINUING> 77
<DISCONTINUED> 89
<EXTRAORDINARY> (2)
<CHANGES> 0
<NET-INCOME> 164
<EPS-PRIMARY> 3.24
<EPS-DILUTED> 3.24
</TABLE>
