SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
|X|ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended January 3, 1998
OR
|_|TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________ to __________
Commission File
Number 1-6853
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Shaw Industries, Inc.
(Exact name of registrant as specified in its charter)
- --------------------------------------------------------------------------------
Georgia 58-1032521
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
616 East Walnut Avenue,
Dalton, Georgia 30720
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: 706/278-3812
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of Each Exchange
Title of Each Class On Which Registered
Common Stock, No Par Value The New York Stock Exchange
$1.11 Stated Value The Pacific Stock Exchange
Rights to Purchase Series A
Participating Preferred Stock The New York Stock Exchange
$.50 Stated Value The Pacific Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12 (g) OF ACT: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filled 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_____
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 the voting stock held by non-affiliates of the
registrant, computed by reference to the closing sales price on The New York
Stock Exchange on March 26, 1998 was: $1,017,328,445
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
Title of Each Class Outstanding at March 26, 1998
Common Stock, No Par Value 120,514,104 Shares
DOCUMENTS INCORPORATED BY REFERENCE
1997 Annual Report to Shareholders --- Part II.
Definitive Proxy Statement for the 1998 Annual Meeting of Shareholders on
April 30, 1998 --- Part III.
PART I
Item I. Business
Shaw Industries, Inc. ("Shaw" or the "Company") is the world's largest
carpet manufacturer based on both revenue and volume of production. Shaw designs
and manufactures approximately 2,600 styles of tufted and woven carpet for
residential and commercial use under the PHILADELPHIA, TRUSTMARK, CABIN CRAFTS,
SHAW COMMERCIAL CARPETS, STRATTON, NETWORX, SHAWMARK, EVANS BLACK, SALEM,
SUTTON, KOSSET, CROSSLEY, ABINGDON, REDBOOK, MINSTER and INVICTA trade names and
under certain private labels. The Company's manufacturing operations are fully
integrated from the processing of yarns through the finishing of carpet. The
Company's carpet is sold in a broad range of prices, patterns, colors and
textures with the majority of its sales in the medium to high retail price
range. Shaw sells its wholesale products to retailers, distributors and
commercial users throughout the United States, Canada, Mexico, Australia and the
United Kingdom; through its own residential retail and commercial contract
distribution channels to various residential and commercial and end users in the
United States; and to a lesser degree, exports to additional overseas markets.
On May 31, 1994, the Company formed a joint venture (the "Terza Joint
Venture") with Grupo Industrial Alfa, S.A. de C.V. of Monterrey, Mexico, for the
manufacture, distribution and marketing of carpets, rugs and related products
primarily in Mexico and South America. The Company's investment in the Terza
Joint Venture is being accounted for using the equity method.
On January 9, 1995, the Company acquired through its wholly owned
subsidiary, Carpets International, Plc (U.K.) substantially all the operating
assets of the Carpets Division of Coats Viyella Plc for approximately
$29,503,000. The acquisition was accounted for as a purchase and, accordingly,
the purchase price has been allocated to the assets acquired and liabilities
assumed based on management's estimate of their fair values as of the
acquisition date. In December 1997, the Company entered into an agreement in
principle to dispose of its U.K. subsidiary.
In December 1995, the Company announced a new retail and contract
distribution strategy to acquire several companies which own and franchise
residential floorcovering centers throughout the United States, as well as
several commercial carpet contractors. During 1997, the Company acquired several
additional retail and commercial contractors including The Carpet Exchange,
Baker Brothers, Carpet Factory Outlelt, Vulcan Floors, Inc., Morton Floors and
several others. In addition, the Company opened 28 residential retail stores and
in December 1997 announced a plan to close approximately 100 residential retail
stores which contributed negatively to the Company's profitability. Net sales
for the Company's retail and commercial contract business totaled $949.1 million
in 1997 and at January 3, 1998, the Company has approximately 448 retail and
commercial contract locations throughout the United States.
The Company believes that by combining the resources of the manufacturer
and retailer and developing a contract distribution network, it can provide a
full range of products and services to more effectively meet the needs of the
end-users of both residential and commercial carpet products at significantly
improved margins. As part of this strategy, the Company continues its efforts to
develop an alignment program with dealers of both residential and commercial
carpet products to provide a collection of services, benefits and programs that
will encourage dealers to purchase more from the Company. At January 3, 1998,
the Company has approximately 1500 aligned dealers.
The Company, based upon its international expansion which began in 1993 and
continued into 1995, is now positioned to supply the Australian, Pacific Rim and
other markets with high quality products. For 1997, 1996 and 1995, international
operations accounted for 9.2, 10.5, and 12.6 percent, respectively, of the
Company's net sales. As a result of its foreign expansion, the Company has
limited exposure to fluctuations in foreign currency exchange rates on its
intercompany payables. The Company may employ foreign currency forward exchange
contracts when, in the normal course of business, they are determined to
effectively manage and reduce such exposure. Geographical information about the
Company's sales, operating profit and identifiable assets is incorporated by
reference to page 20 of Exhibit 13 to this report.
Products and Marketing
Substantially all carpet manufactured by the Company is tufted carpet made
from nylon, polypropylene yarn and wool. In the tufting process, yarn is
inserted by multiple needles into a synthetic backing, forming loops which may
be cut or left uncut, depending on the desired texture or construction.
According to industry estimates, tufted carpet accounted for 90.8% of unit
volume shipments of carpet manufactured in the United States during 1997.
Substantially all carpet manufactured in the United States is made from
synthetic fibers, with nylon accounting for 61.6% of the total, polypropylene
32.1%, polyester 5.9% and wool 0.4%. During 1997, the Company processed
approximately 97% of its requirements for carpet yarn in its own yarn processing
facilities.
The Company believes that its significant investment in modern,
state-of-the-art equipment has been an important factor in achieving and
maintaining its leadership position in the marketplace. During the past five
fiscal years, the Company has invested approximately $739 million (including
acquisitions) in property additions. The Company continually seeks opportunities
for increasing its sales volume and market share. For example, the Company
continues to expand its product lines of carpet manufactured from polypropylene
fiber, including fibers produced by the Company's own extrusion equipment. The
Company also has a manufacturing facility for the production of carpet tiles for
the commercial market to facilitate the Company's growing demand for its tile
products.
The overall level of sales for the Company and the carpet industry is
influenced by a number of factors, including consumer confidence and spending
for durable goods, interest rates, turnover in housing, the condition of the
residential construction industry and the overall strength of the economy. The
Company's international operations are also impacted by the markets in which
they operate.
The marketing of carpet is influenced significantly by current trends in
style and fashion, principally color trends. The Company believes it has been a
leader in the development of color technology in the carpet industry and that
its dyeing facilities are among the most modern and versatile in the industry.
The Company maintains an in-house product development department to identify
developing color and style trends which are expected to affect its customers'
buying decisions. This department is strengthened by the Company's Research and
Development Center. This state-of-the-art complex includes a 75,000 square foot
pilot plant featuring sample extrusion, yarn processing, tufting, dyeing,
coating and shearing equipment, and three fiber and dye development
laboratories.
Sales and Distribution
The Company's wholesale products are marketed domestically by approximately
940 salaried sales personnel in its various marketing divisions directly to
retailers and distributors and to large national accounts through the Company's
National Accounts Division. The Company's ten (10) regional warehouse facilities
and eight (8) redistribution centers, along with its centralized management
information system, enable it to provide prompt delivery of its products to both
its retail customers and wholesale distributors. The Company's substantial
investment in management information systems permits efficient production
scheduling and control of inventory levels.
The Company sells its wholesale products to approximately 40,620 retailers,
distributors and national accounts located throughout the United States,
Australia, Mexico, the United Kingdom and Canada. Retailers and national
accounts, on a combined basis, accounted for approximately 68.9% of the
Company's carpet sales for 1997. Shaw also sells to approximately 70 wholesale
distributors. Approximately 4.6% of the Company's carpet sales in 1997 were to
distributors. Sales of Shaw products in foreign markets, including the sales of
foreign subsidiaries, accounted for approximately 9.2% of total sales in 1997.
No single customer accounted for more than 2% of the Company's sales during
1997.
The Company's retail and commercial contract business accounted for 26.5%
of the Company's total sales for 1997 and was substantially sold through those
businesses acquired by the Company in 1996 and 1997.
Competition
The carpet industry is highly competitive with more than 200 companies
engaged in the manufacture and sale of carpet in the United States. Carpet
manufacturers also face competition from the hard surface floorcovering
industry. According to industry estimates, carpet accounts for approximately 70%
of the total United States production of all flooring types. The principal
methods of competition within the carpet industry are quality, style, price and
service. The Company believes its strategically located regional warehouse
facilities and redistribution centers, together with its retail and contract
distribution network, provide a competitive advantage by enabling it to supply
carpet on a timely basis to customers. The Company's long-standing practice in
investing in modern, state-of-the-art equipment contributes significantly to its
ability to compete effectively on the basis of quality, style and price.
Raw Materials
The principal raw materials used by the Company are nylon fiber and
filament, and synthetic backing; additional raw materials include polyester,
polypropylene and wool fibers and filaments, jute, latex and dye. During 1997,
the Company experienced no significant shortages of raw materials.
Employees
At January 3, 1998, the Company had approximately 29,500 full-time
employees. In the opinion of management, employee relations are good. Employees
are involved in the Quality Improvement Process, which began in 1985 as a
program designed to improve the Company's products and services through
education and training. A small number of the Company's retail and commercial
contractor employees in the United States are represented by unions. Certain
employees of foreign subsidiaries are represented by unions.
Environmental Matters
Management believes the Company is currently in compliance in all material
respects with applicable federal, state and local statutes and ordinances
regulating the discharge of materials into the environment and otherwise
relating to the protection of the environment. Management does not believe the
Company will be required to expend any material amounts in order to remain in
compliance with these laws and regulations or that compliance will materially
affect its capital expenditures, earnings or competitive position.
The Company continued its commitment to the environment during 1997.
Because of this commitment to finding new ways of using mill waste, the Company
is agressively pursuing an environmentally friendly use for all of its waste
products. For example, future possibilities for use of fiber reinforced concrete
include road and bridge construction, military applications, building
foundations, tile, brick and concrete blocks.
Patents, Trademarks, etc.
Patent protection has not been significant to the Company's business,
although the Company does hold several patents covering machinery used in a
specific carpet coloring process.
Item 2. Properties
The Company's executive offices are located in Dalton, Georgia. At January 3,
1998, the Company operated additional facilities as follows:
Domestic Facilities (wholesale)
Alabama Redistribution, yarn spinning and yarn extrusion
Michigan Redistribution
Missouri Redistribution
Florida Redistribution
North Carolina Redistribution, primary backing manufacturing
Ohio Redistribution
Pennsylvania Redistribution
Virginia Redistribution
California Warehousing
Colorado Warehousing
Illinois Warehousing
Massachusetts Warehousing
Minnesota Warehousing
New Jersey Warehousing
Texas Warehousing
Washington Warehousing
Georgia Administrative, distribution, carpet
manufacturing, yarn processing, yarn spinning,
tufting, dyeing, coating, finishing, rug
manufacturing, sample manufacturing, warehousing,
design center and research and development center.
Tennessee Carpet manufacturing, yarn spinning
Domestic Facilities (retail - number of locations in parenthesis including
locations being closed)
Arizona Retail stores (13)
California Retail stores, warehousing, administrative (57)
Colorado Retail stores, warehousing, administrative (12)
Connecticut Retail stores (9)
Florida Retail stores, warehousing, administrative (38)
Georgia Retail stores, warehousing, administrative (4)
Idaho Retail stores (5)
Illinois Retail stores, warehousing, administrative (41)
Indiana Retail stores, administrative (19)
Iowa Retail stores (9)
Kansas Retail stores (3)
Maryland Retail stores, warehousing, administrative (6)
Massachusetts Retail stores, warehousing, administrative (14)
Michigan Retail stores, warehousing, administrative (49)
Minnesota Retail stores, warehousing, administrative (2)
Mississippi Retail stores (1)
Missouri Retail stores, warehousing, administrative (12)
Montana Retail stores (1)
New Hampshire Retail stores (4)
New Jersey Retail stores, administrative (13)
New Mexico Retail stores (4)
New York Retail stores, warehousing, administrative (11)
North Carolina Retail stores (23)
Ohio Retail stores, warehousing, administrative (13)
Oregon Retail stores (3)
Pennsylvania Retail stores (13)
Rhode Island Retail stores (2)
South Carolina Retail Stores (9)
Tennessee Retail stores (4)
Texas Retail stores, warehousing, administrative (8)
Utah Retail stores (1)
Virginia Retail stores, warehousing, administrative (22)
Washington Retail stores, warehousing, administrative (17)
Wisconsin Retail stores (4)
Wyoming Retail stores (1)
Foreign Facilities (facilities are located in or near the areas listed)
Bradford, England Tufting, coating, yarn processing, distribution
and administrative offices
Gwent, Wales Yarn extrusion, yarn processing
Victoria, Australia Yarn extrusion, yarn processing, tufting, dyeing,
coating, distribution and administrative offices
Donaghadee, N. Ireland Tufting, dyeing and finishing
In December 1997, the Company announced a plan to close approximately 100
residential retail store locations which are being phased out. In addition, the
Company entered into an agreement in December 1997 to dispose of Carpets
International, Plc (the Company's wholly owned U.K. subsidiary) which will be
completed in April 1998. The Company maintains leased warehouses and customer
service facilities in or near Dallas; Los Angeles (2); Seattle; San Francisco;
Chicago; Minneapolis; Boston; and Cranbury, New Jersey. Each leased warehouse
facility includes a sales showroom. Substantially all of the Company's retail
facilities are leased. The Company believes that current facilities are
adequately insured and well maintained, substantially used and provide adequate
production capacity for current and anticipated future operations.
Item 3. Legal Proceedings
The Company is a party to several lawsuits incidental to its various
activities and incurred in the ordinary course of business. The Company believes
that it has meritorious claims and defenses in each case. After consultation
with counsel, it is the opinion of management that, although there can be no
assurance given, none of the associated claims, when resolved, will have a
material adverse effect upon the Company.
From time to time the Company is subject to claims and suits arising in the
course of its business. The Company is a defendant in certain litigation
alleging personal injury resulting from personal exposure to volatile organic
compounds found in carpet produced by the Company. The complaints seek
injunctive relief and unspecified money damages on all claims. The Company has
denied any liability. The Company believes that is has meritorious defenses and
that the litigation will not have a material adverse effect on the Company's
financial condition or results of operations.
In June 1994, the Company and several other carpet manufacturers received a
grand jury subpoena from the Antitrust Division of the United States Department
of Justice relating to an investigation of the industry. In October, 1997, the
Company received formal notification from the Department of Justice that the
investigation has been closed. In December 1995, the Company learned that it was
one of six carpet companies named as additional defendants in a pending
antitrust suit filed in the United states District Court of Rome, Georgia. The
amended complaint alleges price-fixing regarding certain types of carpet
products in violation of Section 1 of the Sherman Act. The amount of damages
sought is not specified. If any damages were to be awarded, they may be trebled
under the applicable statute. The Company has filed an answer to the complaint
that denies plaintiffs' allegations and sets forth several defenses. In
September 1997, the Court issued an order certifying a nationwide plaintiff
class of persons and entities who purchase "mass production" polypropylene
carpet directly from any of the defendants from June 1, 1991 through June 30,
1995, excluding, among others, any persons or entities whose only purchases were
from any of the Company's retail establishments. Discovery began in November
1997. The Company is also a party to two consolidated lawsuits pending in the
Superior Court of the State of California, City and County of San Francisco,
both of which were brought on behalf of purported class of indirect purchasers
of carpet in the State of California and which seek damages for alleged
violations of California antitrust and fair competition laws. The Company
believes that it has meritorious defenses to plaintiffs' claims in the lawsuits
described in this paragraph and intends to defend these actions vigorously.
After consultation with counsel, it is the opinion of management that, although
there can be no assurance given, none of the claims described in this paragraph,
when resolved, will have a material adverse effect upon the Company.
In February 1996, a jury in Greensboro, North Carolina returned a verdict
against the Company in litigation brought by four former employees of Salem
Carpet Mills, acquired by the Company in 1992, alleging age discrimination and
sex discrimination in employment decisions with regard to such employees. The
litigation was subsequently settled by the parties. Terms of the settlement were
not disclosed. The settlement did not have a material adverse effect on the
Company's financial condition or results of operations.
The Company is subject to a variety of environmental regulations relating
to the use storage, discharge and disposal of hazardous materials used in its
manufacturing processes. Failure by the Company to comply with present and
future regulations could subject it to future liabilities. In addition, such
regulations could require the Company to acquire costly equipment to incur other
significant expenses to comply with environmental regulations. The Company is
not involved in any material environmental proceedings.
At the end of fiscal year 1997, there were no other pending legal
proceedings to which the Company was a party or to which any of its property was
subject which, in the opinion of management, were likely to have a material
adverse effect on the Company's business, financial condition or results of
operations.
Item 4. Submission of Matters to Vote of Security Holders
Not applicable.
Item 4(A). Executive Officers of the Registrant
Name Age Officer Position
Since
Robert E. Shaw 66 1967 Chairman, Chief Executive Officer and Director
W. Norris Little 66 1978 President and Chief Operating Officer and Director
Vance D. Bell 46 1983 Vice President, Marketing
Kenneth G. Jackson 40 1996 Vice President and Chief Financial Officer
Carl P. Rollins 54 1991 Vice President, Administration
Bennie M. Laughter 46 1986 Vice President, Secretary and General Counsel
Douglas H. Hoskins 63 1978 Controller
Officers of the Company are elected annually by the Board of Directors. All
of the executive officers of the Company except for Mr. Jackson have served as
executive officers for the Company for more than the past five years.
Mr. Jackson joined the Company in February 1996. Prior to February 1996,
Mr. Jackson had been a partner with Arthur Andersen LLP in Atlanta, Georgia.
PART II
Item 5. Market for the Registrant's Common Stock and Related Shareholder Matters
The high and low sales prices for the Company's common stock as reported by
the New York Stock Exchange and the amount of dividends paid by quarter for the
last two fiscal years are set forth on page 24 of Exhibit 13.
Reference is made to Note 2 of Notes to Consolidated Financial Statements
on page 12 of Exhibit 13 for information concerning restrictions on the payment
of cash dividends.
At March 9, 1998, there were 4,065 holders of record of the Company's
common stock.
Item 6. Selected Financial Data
This information is set forth on page 1 of the Exhibit 13 under the caption
"Ten Year Financial Review."
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
This information is set forth on pages 2 - 4 of Exhibit 13 to this report.
Item 8. Financial Statements and Supplementary Data
This information is set forth on pages 5 -24 of Exhibit 13.
Item 9. Disagreements on Accounting and Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
Information concerning directors is incorporated by reference to "Election
of Class of Directors" on pages 3-6 of the Proxy Statement for the 1998 Annual
Meeting of Shareholders. Reference is also made to Item 4(A) of Part I of this
report, "Executive Officers of the Registrant," which information is
incorporated herein.
Item 11. Executive Compensation
This information is incorporated by reference to "Executive Compensation"
on pages 3 - 5 of the Proxy Statement for the 1998 Annual Meeting of
Shareholders.
Item 12. Security Ownership of Certain Beneficial Owners and Management
This information is incorporated by reference to "Voting Rights and
Principal Shareholders" and "Election of Directors" on pages 2 and 3 - 4
respectively, of the Proxy Statement for the 1998 Annual Meeting of
Shareholders.
PART IV
Item 13.Certain Relationships and Related Transactions
This information is incorporated by reference to "Certain Relationships" on
page 4 of the Proxy Statement for the 1998 Annual Meeting of Shareholders.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) The following documents are filed as part of this report:
1. Financial Statements
Exhibit 13, a copy of which is filed with this Form 10-K, contains the
balance sheets as of January 3, 1998 and December 28, 1996, the related
statements of income, shareholders' investment and cash flow for each of
the three years in the period ended January 3, 1998, and the related report
of Arthur Andersen LLP. These financial statements and the report of Arthur
Andersen LLP are incorporated herein by reference. The financial statements
incorporated by reference include the following:
Balance Sheets - January 3, 1998 and December 28, 1996
Statements of Income for the years ended January 3, 1998, December 28,
1996 and December 30, 1995.
Statements of Shareholders' Investment for the years ended January 3,
1998, December 28, 1996 and December 30, 1995.
Statements of Cash Flow for the years ended January 3, 1998, December 28,
1996 and December 30, 1995.
2. Financial Statement Schedules
Report of Independent Public Accountants on Financial Statement Schedule
Schedule II - Valuation and Qualifying Accounts for the Years Ended
January 3, 1998, December 28, 1996 and December 30, 1995.
3. Exhibits incorporated by reference or filed with this report.
Number Description
3(a) Amended and Restated Articles of Incorporation. [Incorporated herein by
reference to Exhibit 3(a) to Registrant's Registration Statement filed with
the commission on December 28, 1993 (File No. 33-51719).]
3(b) Bylaws. [Incorporated herein by reference to Exhibit 3(b) to Registrant's
Registration Statement filed with the commission on December 28, 1993 (File
No. 33-51714).]
4(a) Specimen form of Common Stock Certificate. [Incorporated herein by
reference to Exhibit 2 to Registrant's Report on Form 8-A filed with the
Securities and Exchange Commission on May 12, 1989 (File No. 1-6853).]
4(b) Restated Articles of Incorporation, filed as Exhibit 3(a), and the Bylaws
of Registrant, filed as Exhibit 3(b), are incorporated herein by reference.
4(c) Rights Agreement dated as of April 10, 1989, between Registrant and
Citizens and Southern Trust Company (Georgia), N.A., as Rights Agent.
[Incorporated herein by reference to Exhibit 1 to Registrant's Current
Report on Form 8-K filed with the Securities and Exchange Commission on May
5, 1989 (File No. 1-6853).]
10(a) Reserved
10(b)* Deferred Compensation Plan and form of Deferred Compensation Agreement of
Registrant as adopted in April, 1980. [Incorporated herein by reference to
the Registrant's July 2, 1994 Form 10-K filed with the Securities and
Exchange Commission (File No. 1-6853).]
10(c), 10(d), 10(e) and 10(f) Reserved
10(g)Credit Agreement dated March 26, 1997, between Registrant and Nationsbank
of Georgia, National Association, regarding a $900,000,000 revolving credit
facility. [Incorporated herein by reference to the Registrant's December
31, 1994 Form 10-K filed with the Securities and Exchange Commission (File
No. 1-6853).]
10(h)* 1987 Incentive Stock Option Plan of the Registrant. [Incorporated herein
by reference to Exhibit A to Registrant's 1987 Proxy Statement, dated
September 22, 1987 (File No. 1-6853).]
10(i) Reserved
10(j)* 1989 Discounted Stock Option Plan of the Registrant. [Incorporated herein
by reference to Exhibit A to Registrant's 1989 Proxy Statement, dated
September 21, 1989 (File No. 1-6853).]
10(k)* 1992 Incentive Stock Option Plan of the Registrant. [Incorporated herein
by reference to Exhibit A to Registrant's 1992 Proxy (File No. 1-6853).]
Statement, dated September 18, 1992 (File No.1-6853).]
13 Items Incorporated by Reference from the 1997 Annual Report to
Shareholders.
21 List of Subsidiaries.
23 Consent of independent public accountants.
27 Financial Data Schedule.
*Compensatory plan or management contract required to be filed as an
exhibit to Item 14 (c) of Form 10-K.
Shareholders may obtain copies of Exhibits without charge upon written
request to the Corporate Secretary, Shaw Industries, Inc., Mail drop 061-18,
P.O. Drawer 2128, Dalton, Georgia 30722-2128.
(b) No reports on Form 8-K were filed during the last quarter of fiscal 1997.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
SHAW INDUSTRIES, INC.
Date: March 31, 1998 By:/s/ ROBERT E. SHAW
------------------
Robert E. Shaw
Chairman, Chief Executive Officer
and Director
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.
Date: March 31, 1998 /s/ ROBERT E. SHAW
------------------
Robert E. Shaw
Chairman, Chief Executive Officer
and Director
(Principal Executive Officer)
Date: March 31, 1998 /s/ KENNETH G. JACKSON
----------------------
Kenneth G. Jackson
Vice President and Chief Financial
Officer
(Principal Financial and Accounting
Officer)
Date: March 31, 1998 /s/ J. C. SHAW
--------------
J.C. Shaw
Chairman Emeritus and Director
Date: March 31, 1998 /s/ W. NORRIS LITTLE
--------------------
W. Norris Little
President and Chief Operating Officer
and Director
Date: March 31, 1998 /s/ WILLIAM C. LUSK, JR.
-----------------------
William C. Lusk, Jr.
Director
Date: March 31, 1998 /s/ ROBERT R. HARLIN
--------------------
Robert R. Harlin
Director
Date: March 31, 1998 /s/ THOMAS G. COUSINS
---------------------
Thomas G. Cousins
Director
Date: March 31, 1998 /s/ TUCKER GRIGG
----------------
S. Tucker Grigg
Director
Date: March 31, 1998 /s/ ROBERT J. LUNN
------------------
Robert J. Lunn
Director
Date: March 31, 1998 /s/ J. HICKS LANIER
-------------------
J. Hicks Lanier
Director
Date: March 31, 1998 /s/ R. JULIAN McCAMY
--------------------
R. Julian McCamy
Director
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To the Shareholders of
Shaw Industries, Inc.:
We have audited in accordance with generally accepted auditing standards the
financial statements of SHAW INDUSTRIES, INC. included in the Annual Report to
Shareholders incorporated by reference in this Form 10-K and have issued our
report thereon dated February 20, 1998. Our audit was made for the purpose of
forming an opinion on the basic financial statements taken as a whole. Schedule
II is the responsibility of the Company's management and is presented for
purposes of complying with the Securities and Exchange Commission's rules and is
not part of the basic financial statements. This schedule has been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, fairly states, in all material respects, the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.
ARTHUR ANDERSEN LLP
Atlanta, Georgia
February 20, 1998
SCHEDULE II
SHAW INDUSTRIES, INC.
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED JANUARY 3, 1998, DECEMBER 28, 1996 AND DECEMBER 30, 1995
$ in thousands
Additions
Balance at Charged to
Beginning Costs and Balance at
of Year Expenses Deductions End of Year
---------- ---------- ------------ -----------
YEAR ENDED DECEMBER 30, 1995:
Allowance for doubtful accounts and
discounts ......................... $ 17,925 $ 110,541 $ 113,720 * $ 14,746
========== ========== ============ ==========
YEAR ENDED DECEMBER 28, 1996:
Allowance for doubtful accounts and
discounts ......................... $ 14,746 $ 108,610 $ 106,689 $ 16,667
========== ========== ============ ==========
YEAR ENDED JANUARY 3, 1998:
Allowance for doubtful accounts and
discounts ......................... $ 16,667 $ 117,271 $ 117,655 $ 16,283
========== ========== ============ ==========
* Deductions for December 30, 1995 include $1,018,000 related to the
deconsolidation of the Terza Joint Venture.