FORM 8-K/A SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported): September 2, 1998 (August 9, 1998) ----------------------------------- SHAW INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Georgia 1-6853 58-1032521 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 616 E. Walnut Avenue, Dalton, Georgia 30720 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (706) 275-3812 ------------------------------ Not Applicable - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report.) Item 2. Acquisition or Disposition of Assets. On August 9, 1998, the Registrant completed the disposition (the "Maxim Disposition") of substantially all of its residential retail store assets to The Maxim Group, Inc. ("Maxim"). These assets include approximately 275 retail stores with annual revenues of approximately $575 million. The Maxim Disposition was effected pursuant to the Agreement and Plan of Merger, dated June 23, 1998 (the "Merger Agreement"), among the Registrant, its wholly-owned subsidiary, Shaw Carpet Showplace, Inc. (collectively, "Shaw"), Maxim and a wholly-owned subsidiary of Maxim. As consideration for the Maxim Disposition, Shaw received from Maxim 3,150,000 shares of Maxim common stock, a one-year promissory note (the "Note") in the principal amount of approximately $18 million and $25 million in cash. Pursuant to the Merger Agreement, the Registrant and Maxim entered into a Shareholder's Agreement, dated August 9, 1998 (the "Shareholder's Agreement"), pursuant to which, among other things, the Registrant has agreed until August 9, 1999 not to acquire in excess of 25% of the outstanding shares of common stock of Maxim and Maxim has granted to the Registrant certain registration rights. Copies of the Merger Agreement, the form of Note and the form of Shareholder's Agreement were filed with the Securities and Exchange Commission (the "Commission") as Exhibit 99.1 to the Registrant's Current Report on Form 8-K dated June 26, 1998 and are incorporated by reference herein. -2- Item 7. Financial Statements and Exhibits. (b) Pro Forma Financial Information The following unaudited pro forma condensed consolidated financial statements give effect to the disposition of substantially all of the Registrant's residential retail assets to The Maxim Group, Inc. The unaudited pro forma condensed consolidated balance sheet presents the financial position of the Registrant at July 4, 1998 giving effect to the disposition as if it had occurred on such date. The unaudited pro forma condensed consolidated statements of income for the six months ended July 4, 1998 and for the year ended January 3, 1998 gives effect to the disposition as if it had occurred at the beginning of each period, respectively. The unaudited pro forma financial information is presented for informational purposes only and it is not necessarily indicative of the financial position and results of operations that would have been achieved had the disposition been completed as of the dates indicated and is not necessarily indicative of the Registrant's future financial position or results of operations. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the historical consolidated financial statements of the Registrant including the related notes thereto. Pro Forma Financial Information Shaw Industries, Inc. Pro Forma Condensed Consolidated Balance Sheet at July 4, 1998 (Unaudited) ================================================================================ (000's omitted) Residential Historical Retail (1) Pro Forma -------------------------------------------- Cash .......................... $ 8,557 $ 21,677 $ 30,234 A/R ........................... 397,870 5,893 403,763 Inventories ................... 555,734 (45,801) 509,933 Prepaids ...................... 120,675 68,816 189,491 -------------------------------------------- Total current assets .......... 1,082,836 50,585 1,133,421 PP&E - net .................... 590,528 (17,090) 573,438 Other assets .................. 169,547 (29,693) 139,854 -------------------------------------------- $ 1,842,911 $ 3,802 $ 1,846,713 ============================================ Notes payable ................. $ 8 $ 8 Current debt .................. 296 (30) 266 Accounts payable .............. 161,758 (11,673) 150,085 Accrued liabilities ........... 209,586 16,470 226,056 -------------------------------------------- Total current liabilities ..... 371,648 4,767 376,415 Long-term debt ................ 932,974 932,974 Other liabilities ............. 79,020 (965) 78,055 Equity ........................ 459,269 459,269 -------------------------------------------- $ 1,842,911 $ 3,802 $ 1,846,713 ============================================ (1) To record the sale and elimination of Residential Retail assets and liabilities included in the balance sheet of Shaw Industries, Inc. as of July 4, 1998. Pro Forma Financial Information Shaw Industries, Inc. Pro Forma Condensed Consolidated Statement of Income For the Six Months Ended July 4, 1998 (Unaudited) (Dollars in thousands except per share amounts) ================================================================================ Residential Historical Retail (a) Pro Forma ------------------------------------------------ Net sales .................................... $ 1,738,134 $ 287,222 $ 1,450,912 Costs and expenses: Cost of sales ......................... 1,279,081 178,251 1,100,830 Selling, general and administrative ... 336,407 127,431 208,976 Pre-opening expenses, retail operations 232 158 74 Charge to record loss on sale of residential retail operations, store closing costs and writedown of certain assets 141,526 141,526 0 Interest, net ......................... 30,808 1,730 29,078 Other (income) expense, net ........... 3,466 145 3,321 ------------------------------------------------ (Loss) Income before income taxes ............ (53,386) (162,019) 108,633 (Benefit) Provision for income taxes ......... (7,408) (51,512) 44,104 ------------------------------------------------ (Loss) Income before equity in income of joint venture ...................... (45,978) (110,507) 64,529 Equity in income of joint venture ............ 262 0 262 ------------------------------------------------ Net income (loss) ............................ ($ 45,716) ($ 110,507) $ 64,791 ================================================ (Loss) Earnings per common share: Basic ................................. ($ 0.37) ($ 0.89) $ 0.52 Diluted ............................... ($ 0.37) ($ 0.89) $ 0.52 Weighted average shares outstanding: Basic ................................. 124,968,192 124,968,192 Diluted ............................... 124,968,192 124,968,192 (a) To eliminate the results of operations of Residential Retail for the six months ended July 4, 1998 and to reflect the reduction in interest expense resulting from the application of the $43,000,000 cash proceeds (including the proceeds from the maturation of the promissory note) against the Registrant's Revolving Credit Facility. Pro Forma Financial Information Shaw Industries, Inc. Pro Forma Condensed Consolidated Statement of Income For the Year Ended January 3, 1998 (Unaudited) (Dollars in thousands except per share amounts) ================================================================================ Residential Historical Retail (a) Pro Forma ------------------------------------------------ Net sales .................................... $ 3,575,774 $ 643,012 $ 2,932,762 Costs and expenses: Cost of sales ......................... 2,680,472 398,100 2,282,372 Selling, general and administrative ... 722,590 302,845 419,745 Pre-opening expenses, retail operations 3,953 3,516 437 Charge to record store closing costs .. 36,787 36,787 0 Write-down of U.K. assets ............. 47,952 0 47,952 Interest, net ......................... 60,769 2,957 57,812 Other (income) expense, net ........... (7,032) 190 (7,222) ------------------------------------------------ (Loss) Income before income taxes ............ 30,283 (101,383) 131,666 (Benefit) Provision for income taxes ......... 5,586 (39,722) 45,308 ------------------------------------------------ Income before equity in income of joint venture ...................... 24,697 (61,661) 86,358 Equity in income of joint venture ............ 4,262 0 4,262 ------------------------------------------------ Net income (loss) ............................ $ 28,959 ($ 61,661) $ 90,620 ================================================ (Loss) Earnings per common share: Basic ................................. $ 0.22 ($ 0.46) $ 0.68 Diluted ............................... $ 0.22 ($ 0.46) $ 0.68 Weighted average shares outstanding: Basic ................................. 133,523,380 133,523,380 Diluted ............................... 133,714,496 133,714,496 (a) To eliminate the results of operations of Residential Retail for the year ended January 3, 1998, to reflect the reduction in interest expense resulting from the application of the $25,000,000 cash proceeds against the Registrant's Revolving Credit Facility and to reflect the interest income on the $18,000,000 promissory note from Maxim. (c) Exhibits. 99.1 Agreement and Plan of Merger, dated June 23, 1998, among The Maxim Group, Inc., CMAX Acquisition, Inc., Shaw Industries, Inc., and Shaw Carpet Showplace, Inc., and forms of Subordinated Promissory Note and Shareholder's Agreement attached thereto as Exhibits B and C, respectively. [Incorporated herein by reference to Exhibit 99.1 to the Registrant's Current Report on Form 8-K as filed with the Commission on June 26, 1998 (File No. 1-6853).] 99.2 Amendment, dated August 9, 1998, to Agreement and Plan of Merger, dated as of June 23, 1998, among The Maxim Group, Inc., CMAX Acquisition, Inc., Shaw Industries, Inc., and Shaw Carpet Showplace, Inc. -3- 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 hereunto duly authorized. SHAW INDUSTRIES, INC. By: /s/ Bennie M. Laughter ------------------------ Bennie M. Laughter Vice President, Secretary and General Counsel Dated: September 1, 1998 ::ODMA\PCDOCS\ATL\236115\1 -4- EXHIBIT INDEX Exhibit Number Description 99.1 Agreement and Plan of Merger, dated June 23, 1998, among The Maxim Group, Inc., CMAX Acquisition, Inc., Shaw Industries, Inc., and Shaw Carpet Showplace, Inc., and forms of Subordinated Promissory Note and Shareholder's Agreement attached thereto as Exhibits B and C, respectively. [Incorporated herein by reference to Exhibit 99.1 to the Registrant's Current Report on Form 8-K as filed with the Commission on June 26, 1998 (File No. 1-6853).] 99.2 Amendment, dated August 9, 1998, to Agreement and Plan of Merger, dated as of June 23, 1998, among The Maxim Group, Inc., CMAX Acquisition, Inc., Shaw Industries, Inc., and Shaw Carpet Showplace, Inc. ::ODMA\PCDOCS\ATL\236115\1