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Previous: BASSWOOD PARTNERS L P ET AL, PRRN14A, 1998-05-11 |
Next: US INDUSTRIES INC, 10-K/A, 1998-05-11 |
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
AMENDMENT NO. 1
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended January 3, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number: 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 February 5, 1998, U.S. Industries, Inc. had one class of common stock, of
which 76,976,170 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 Months Ended December 31, 1997 and 1996... 1
Consolidated Balance Sheets, December 31, 1997
and September 30, 1997.................................. 2
Consolidated Statements of Cash Flows
for the Three Months Ended December 31, 1997 and 1996... 3
Consolidated Statement of Changes in Stockholders'
Equity for the Three Months Ended December 31, 1997..... 4
Notes to Consolidated Financial Statements.............. 5
SIGNATURE ............................................................... 8
<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
DECEMBER 31,
------------
1997 1996
---- ----
<S> <C> <C>
Net sales $ 596 $ 512
Operating costs and expenses:
Cost of products sold 410 347
Selling, general and administrative expenses 136 115
------- -------
Operating income 50 50
Interest expense 11 12
Interest income (1) (1)
Other (income) expense, net (1) 1
------- -------
Income before income taxes, discontinued operations and
extraordinary loss 41 38
Provision for income taxes 17 17
------- -------
Income from continuing operations 24 21
Discontinued operations:
Income from operations of discontinued operations
(net of income tax of $- and $1) - 1
Gain on disposal of discontinued operations
(net of income tax of $- and $1) - 1
------- -------
Income from discontinued operations - 2
------- -------
Income before extraordinary loss 24 23
Extraordinary loss (net of income tax benefit of $- and $1) - (2)
------- -------
Net income $ 24 $ 21
======= =======
Earnings per basic common share:
Income from continuing operations $ 0.33 $ 0.29
Income from discontinued operations - 0.03
Extraordinary loss - (0.03)
------- -------
Net income $ 0.33 $ 0.29
======= =======
Earnings per diluted common share:
Income from continuing operations $ 0.32 $ 0.28
Income from discontinued operations - 0.03
Extraordinary loss - (0.03)
------- -------
Net income $ 0.32 $ 0.28
======= =======
Weighted average shares outstanding, basic 73.0 73.4
======= =======
Weighted average shares outstanding, diluted 75.7 76.1
======= =======
Cash dividend declared per share $ 0.05 $ -
======= =======
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
1
<PAGE>
U.S. INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
December 31, September 30,
1997 1997
---- ----
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 50 $ 56
Trade receivables, net 398 388
Inventories 474 401
Deferred income taxes 49 51
Other current assets 41 37
-------------- -------------
Total current assets 1,012 933
Property, plant and equipment, net 430 343
Deferred income taxes 4 6
Other assets 138 126
Goodwill, net 482 423
-------------- -------------
$ 2,066 $ 1,831
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 6 $ 4
Current maturities of long-term debt 2 1
Trade accounts payable 157 156
Accrued expenses and other liabilities 217 190
Income taxes payable 42 72
-------------- -------------
Total current liabilities 424 423
Long-term debt 674 551
Other liabilities 170 152
-------------- -------------
Total liabilities 1,268 1,126
-------------- -------------
Commitments and contingencies
Stockholders' equity:
Common stock (par value $.01 per share),
authorized 300,000,000 shares; issued
84,542,082 and 80,856,562, respectively;
outstanding 77,641,519 and 74,592,615,
respectively 1 1
Paid in capital 664 568
Retained earnings 281 261
Unearned restricted stock (15) (16)
Other equity (8) (3)
Treasury stock (6,900,563 and 6,263,947
shares, respectively) at cost (125) (106)
-------------- -------------
Total stockholders' equity 798 705
-------------- -------------
$ 2,066 $ 1,831
=============== =============
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
2
<PAGE>
U.S. INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS-UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
------------
1997 1996
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Income from continuing operations $ 24 $ 21
Adjustments to reconcile income from continuing
operations to net cash provided by operating
activities of continuing operations:
Depreciation and amortization 20 13
Provision for doubtful accounts 1 2
Gain on sale of excess real estate (3) (1)
Changes in operating assets and liabilities,
excluding the effects of acquisitions and
dispositions:
Decrease in trade receivables 41 39
Increase in inventories (22) (10)
Increase in other current assets (6) (5)
Increase in other non-current assets (2) (13)
Decrease in trade accounts payable (25) (35)
(Decrease) increase in income taxes payable (3) 8
Decrease in accrued expenses and other liabilities (25) (14)
Increase in other non-current liabilities 1 2
Other, net (1) -
---------- ---------
NET CASH PROVIDED BY OPERATING
ACTIVITIES OF CONTINUING OPERATIONS - 7
---------- ---------
Income from discontinued operations - 2
Adjustments to reconcile income from discontinued
operations to net cash used in discontinued operations:
Gain on disposal of net assets held for disposition - (1)
Net cash used by net assets held for disposition (28) (17)
---------- ---------
NET CASH USED IN OPERATING ACTIVITIES
OF DISCONTINUED OPERATIONS (28) (16)
---------- ---------
NET CASH USED IN OPERATING ACTIVITIES (28) (9)
---------- ---------
INVESTING ACTIVITIES:
Proceeds from sale of net assets held for disposition 10 21
Proceeds from collection of notes receivable 3 -
Proceeds from sale of property, plant and equipment 1 1
Acquisition of companies, net of cash acquired (34) -
Purchases of property, plant and equipment (22) (20)
Proceeds from real estate transactions 6 3
Purchase of investments (1) -
---------- ---------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (37) 5
---------- ---------
FINANCING ACTIVITIES:
Proceeds from long-term debt 332 878
Repayment of long-term debt (242) (854)
(Repayment of) proceeds from notes payable, net (4) 2
Payment of dividends (4) -
Purchase of treasury stock (20) (25)
---------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 62 1
---------- ---------
Effect of exchange rate changes on cash (3) -
DECREASE IN CASH AND CASH EQUIVALENTS (6) (3)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 56 45
---------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 50 $ 42
========== =========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
3
<PAGE>
U.S. INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED DECEMBER 31, 1997
(IN MILLIONS EXCEPT SHARE DATA)
(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, 1997 $ 1 $ 568 $ 261 $ (16) $ (3) $ (106) $ 705
Net income 24 24
Cash dividend declared ($0.05
per share) (4) (4)
Amortization of unearned
restricted stock 2 2
Purchase of 687,900 shares of
common stock (20) (20)
Forfeiture of 34,500 shares of
unearned restricted stock - - - -
Treasury stock issued (85,784
shares) to employees,
directors and upon exercise of (1) 1 -
options
Common stock issued (3,685,520
shares) for acquisition - 96 96
Translation adjustment (5) (5)
------- -------- --------- --------- --------- --------- --------
Balance at December 31, 1997 $ 1 $ 664 $ 281 $ (15) $ (8) $ (125) $ 798
------- ======== ========= ========= ========= ========= ========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
4
<PAGE>
U.S. INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 1 - BASIS OF PRESENTATION
U.S. Industries, Inc. (the "Company") is a diversified manufacturer of consumer
and industrial products. The accompanying 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 months ended December 31,
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 month period ended December 31, 1997 are not necessarily indicative of
those for the full fiscal year ending October 3, 1998. 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 27, 1997.
The Company's fiscal year ends on the Saturday nearest to September 30. All
three month data contained herein reflect results of operations for the 14-week
period and 13-week period ended on the Saturday closest to December 31, 1997 and
1996, respectively, but are presented as of such date for convenience.
NOTE 2 - INVENTORIES
Inventories consist of the following:
(in millions)
December 31, September 30,
1997 1997
---- ----
(unaudited)
Finished products $ 219 $ 188
Work-in process 102 96
Raw materials 153 117
---------------- ----------------
Inventories, net $ 474 $ 401
================ ================
5
<PAGE>
NOTE 3 - LONG-TERM DEBT
Long-term debt consists of the following:
(in millions)
December 31, September 30,
1997 1997
(unaudited)
7.25% Senior Notes, net $ 123 $ 123
Revolving credit facility 350 350
Other long-term debt 203 79
------------ ------------
676 552
Less current maturities 2 1
------------ ------------
Long-term debt $ 674 $ 551
============ ============
At December 31, 1997 the Company has short-term debt of $64 million denominated
in German Marks and $49 million denominated in British Pounds. These borrowings
have been designated as hedges of the Company's net investments in SiTeco and
Spear & Jackson, acquisitions made during the first quarter of fiscal 1998 (see
Note 5). The Company expects to refinance this debt on a long-term basis during
the second quarter of fiscal 1998 and, accordingly, this amount has been
classified as other long-term debt. Other long-term debt also includes $64
million of notes payable maturing within one year which the Company expects to
repay using borrowings under its revolving credit facility.
NOTE 4 - 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.
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 December 31, 1997, the Company had accrued $19 million for known
environmental related matters. The Company believes that the range of liability
for such matters is between $6 million and $21 million. The increase in the
accrual and the range of liability, when compared to the fiscal year ended
September 27, 1997, is due to an evaluation of exposures related to recent
acquisitions. (See Note 5).
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 5 - ACQUISITIONS
In October 1997, the Company purchased Siemens Lighting, a division of Siemens
A.G., for $67 million in cash. Siemens Lighting is a leading European
manufacturer and marketer of standard and customized indoor and outdoor lighting
products for commercial and industrial use. Siemens Lighting (renamed SiTeco
Beleuchtungstechnik GmbH, "SiTeco") operates manufacturing facilities in
Germany, Austria and Slovenia.
6
<PAGE>
NOTE 5 - ACQUISITIONS (CONTINUED)
In December 1997, the Company purchased Spear & Jackson plc ("Spear & Jackson")
for $11 million in cash and $96 million in the Company's Common Stock, resulting
in preliminary goodwill of approximately $65 million. Spear & Jackson,
headquartered in Sheffield, England, is a manufacturer and distributor of a
diverse line of hand tools, lawn and garden tools, saws, cutting and industrial
tools. Spear & Jackson operates manufacturing facilities in England and France
and distribution facilities in the United States, Australia and New Zealand. The
purchase price is subject to additional cash contingently payable at the end of
a 30-month period based upon a combination of certain performance criteria and
the market value of the Company's stock.
These transactions have been accounted for as purchases and their results are
included in the financial statements from the respective 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 6 - SUMMARIZED FINANCIAL INFORMATION OF SUBSIDIARY
Summarized consolidated financial information of USI American Holdings, Inc.
("USIAH"), the issuer of the 7.25% Senior Notes, is as follows:
(in millions - unaudited)
Three Months Ended
December 31,
------------
1997 1996
---- ----
Income Statement Data:
Net sales $ 596 $ 512
Gross profit 186 165
Income from continuing operations 25 22
Net income 25 22
(in millions)
December 31, September 30,
1997 1997
---- ----
(unaudited)
Balance Sheet Data:
Current assets $ 1,012 $ 933
Non-current assets 1,054 898
Current liabilities 420 419
Non-current liabilities 844 703
Separate consolidated financial statements of USIAH are not presented as
management has determined that they would not be material to investors.
7
<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: May 11, 1998
/s/ Frank R. Reilly
---------------------------------
Frank R. Reilly
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
8
<PAGE>
EXHIBIT INDEX
Exhibit
- -------
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> 3-MOS
<FISCAL-YEAR-END> SEP-27-1997
<PERIOD-END> JAN-03-1998
<CASH> 50
<SECURITIES> 0
<RECEIVABLES> 438
<ALLOWANCES> (40)
<INVENTORY> 474
<CURRENT-ASSETS> 1,012
<PP&E> 855
<DEPRECIATION> (425)
<TOTAL-ASSETS> 2,066
<CURRENT-LIABILITIES> 424
<BONDS> 674
0
0
<COMMON> 1
<OTHER-SE> 797
<TOTAL-LIABILITY-AND-EQUITY> 2,066
<SALES> 596
<TOTAL-REVENUES> 596
<CGS> 410
<TOTAL-COSTS> 410
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1
<INTEREST-EXPENSE> 11
<INCOME-PRETAX> 41
<INCOME-TAX> 17
<INCOME-CONTINUING> 24
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24
<EPS-PRIMARY> .33
<EPS-DILUTED> .32
</TABLE>
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