UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1995
Commission file Number 1-9457
SHELBY WILLIAMS INDUSTRIES, INC.
(Exact name of registrant as specified in its charter.)
Delaware 62-0974443
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1348 Merchandise Mart
Chicago, Illinois 60654
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(312) 527-3593
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 of 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 [ ]
At May 3, 1995, there were 8,979,690 shares of registrant's
common stock outstanding.
PART I - FINANCIAL INFORMATION
SHELBY WILLIAMS INDUSTRIES, INC.
Consolidated Statements of Income
Three Months Ended
March 31, 1995 and 1994
(Unaudited)
(Amounts in thousands, except per share data)
1995 1994
_________ ________
Net sales $39,301 $38,122
Cost of goods sold 30,901 30,399
______ ______
Gross profit 8,400 7,723
Selling, general and
administrative
expenses 6,340 6,327
______ ______
2,060 1,396
Other deductions
(income):
Interest expense 337 252
Interest and dividend
income (2) -
Miscellaneous expense
(income) (40) 23
______ ______
295 275
______ ______
Income before income
taxes 1,765 1,121
______ ______
Income taxes:
Current 381 276
Deferred 59 60
______ ______
440 336
______ ______
Net income $ 1,325 $ 785
====== ======
Net income per share $ .15 $ .09
====== ======
Weighted average number
of common shares
outstanding 8,979 9,103
====== ======
<FN>
SHELBY WILLIAMS INDUSTRIES, INC.
Consolidated Balance Sheets
March 31, 1995 and December 31, 1994
(Unaudited)
(Amounts in thousands, except per share data)
March 31, 1995 December 31, 1994
_______________ _________________
ASSETS
Current assets:
Cash and cash equivalents $ 2,606 $ 1,633
Accounts receivable, less
allowance for doubtful
accounts of $476 at
March 31, 1995 and
$471 at December 31,
1994 22,122 24,124
Inventories:
Raw materials 12,316 12,365
Work in process 3,780 4,880
Finished goods 12,082 11,217
______ ______
28,178 28,462
Prepaid expense 3,050 2,860
______ ______
Total current assets 55,956 57,079
Investment in affiliate 50 50
Excess of cost over net assets
of acquired company 184 186
Property, plant and equipment
at cost:
Land and land improvements 2,870 2,870
Buildings and leasehold
improvements 25,277 25,256
Machinery and equipment 23,707 23,592
Construction in progress 337 209
______ ______
52,191 51,927
Less accumulated
depreciation and
amortization 22,718 22,053
______ ______
29,473 29,874
Other assets 1,410 1,331
______ ______
$87,073 $88,520
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 6,100 $ 8,450
Accounts payable 11,143 9,972
Customer deposits on
orders in process 4,254 3,391
Accrued liabilities 4,642 6,738
Income taxes 768 387
Current portion of long-
term debt 49 49
______ ______
Total current liabilities 26,956 28,987
Long-term debt 8,883 8,895
Deferred income taxes 2,039 1,980
Stockholder's equity:
Common stock, $.05 par value;
authorized 30,000 shares;
issued 11,761 shares
(1994-11,758) 588 588
Capital in excess of par value 7,710 7,687
Retained earnings 59,824 59,129
Pension liability adjustment (871) (871)
______ ______
67,251 66,533
Less common stock held in
treasury; 2,781 shares
at cost (1994-2,759) 18,056 17,875
______ ______
Total stockholders' equity 49,195 48,658
$87,073 $88,520
====== ======
<FN>
SHELBY WILLIAMS INDUSTRIES, INC.
Consolidated Statements of Cash Flows
Three Months Ended March 31, 1995 and 1994
(Unaudited)
(Amounts in thousands)
1995 1994
___________________________
Cash flows from operating activities:
Net income $1,325 $ 785
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amoritzation 715 674
Provision for losses on accounts
receivable 75 84
Change in assets and liabilities:
Accounts receivable 1,927 3,256
Inventories 284 (3,098)
Prepaid expenses (190) 271
Accounts payable and accrued
liabilities (62) 954
Income taxes payable 381 (361)
Increase in deferred taxes 59 60
Other (79) (76)
_____ _____
Net cash provided by operating
activities 4,435 2,549
_____ _____
Cash flows from investing activities:
Proceeds from disposal of property,
plant and equipment 13 -
Capital expenditures (325) (580)
_____ _____
Net cash used by investing activities (312) (580)
_____ _____
Cash flows from financing activities:
Net repayment of short-term borrowings (2,350) (1,000)
Principal payments of long-term debt (12) (11)
Sale of common stock under stock
option plan 23 19
Purchase of common stock for the
treasury (181) -
Dividends declared and paid (630) (636)
_____ _____
Net cash used by financing activities (3,150) (1,628)
_____ _____
Net increase in cash 973 341
Cash and cash equivalents at beginning
of period 1,633 1,018
_____ _____
Cash and cash equivalents at end of
period $2,606 $1,359
===== =====
Supplemental cash flow information:
Cash paid during the period for:
Interest $ 340 $ 257
Income taxes - 637
_____ _____
$ 340 $ 894
===== =====
<FN>
SHELBY WILLIAMS INDUSTRIES, INC.
March 31, 1995
Item 1. Financial Statements
See attached unaudited statements as follows:
Consolidated Statements of Income for three months ended
March 31, 1995 and 1994.
Consoldiated Balance Sheets at March 31, 1995 and December 31,
1994.
Consolidated Statements of Cash Flows for three months ended
March 31, 1995 and 1994.
Item 2. Managements' Discussion and Analysis of Financial Condition
and Results of Operations
Material Changes in Financial Condition
During the first quarter of 1995, accounts receivable and inventories
were reduced approximately $2.0 million and $300,000, respectively, through
careful managing of collections and inventory control. During the same
period, interest bearing debt was reduced by $2.4 million. At quarter's end,
shareholders' equity was $49,195,000, or $5.48 per share, and working capital
totaled $29,000,000, reflecting a 2.1-to-1 current ratio. There were no
major capital expenditures in the first quarter and none are planned for 1995.
Material Changes in Results of Operation
For the first quarter ended March 31, 1995, sales totaled $39,301,000,
an increase of 3.1 percent over results for the first quarter of 1994 when
sales reached $38,122,000, with the increase being primarily from volume.
Net income grew 68.8 percent to $1,325,000, of 15 cents per share, from
$785,000, or 9 cents per share, last year, for the best first quarter since
1988. Compared to the same period last year, gross margin rose during
the first quarter to 21.4 percent from 20.3 percent last year, driven
primarily by a more favorable product mix and labor efficiencies. The
company's employee count was reduced by 72 people, or 4 percent from the
prior year. An improvement in selling, general and administrative expenses
from 16.6 percent to 16.1 percent resulted primarily as a function of
volume.
The Company's backlog of unshipped orders showed a strong increase over
the prior year of 13.5 percent to $31,200,000 at March 31, 1995.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
10.1 1995 Directors' Stock Option Plan (compensation plan).
27 Financial Data Schedule (EDGAR only).
B. Reports on Form 8-K
No reports have been filed on Form 8-K during this
quarter.
SHELBY WILLIAMS INDUSTRIES, INC.
SIGNATURES
Pursuant to the requirement 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.
SHELBY WILLIAMS INDUSTRIES, INC.
(Registrant)
May 3, 1995 S/Robert P. Coulter
________________________________
Robert P. Coulter
President and Director
(Principal Operating Officer)
May 3, 1995 S/Sam Ferrell
________________________________
Sam Ferrell
Vice President of Finance, Treasurer
and Assistant Secretary
(Principal Financial Officer)
Item 6.
Exhibit 10.1
SHELBY WILLIAMS INDUSTRIES, INC.
1995 DIRECTORS' STOCK OPTION PLAN
1. Purpose:
This Stock Option Plan ("the Plan") is intended to encourage stock
ownership by Directors of Shelby Williams Industries, Inc. a Delaware
corporation ("Shelby" or the "Company") so that they may acquire or
increase their proprietary interest in the success of the Company, and
to encourage them to remain as Directors of the Company.
2. Eligibility:
The persons who shall be eligible to receive options shall be Directors
of Shelby (the "Eligible Directors") who are not full-time employees of
Shelby.
3. Stock:
Subject to the provisions of paragraph 10 (relating to the adjustment
upon changes in stock), there will be reserved for issuance upon the exercise
of Options to be granted from time to time under the Plan an aggregate of
60,000 shares of Common Stock, $.05 par value, of Shelby. In the event that
any outstanding Option under the Plan for any reason expires or is termi-
nated, the shares of stock allocable to the unexercised portion of such
option may again be subject to an option under the Plan.
4. Administration:
This Plan shall be administered by the Stock Option Committee (the
"Committee"). The interpretation and construction by the Committee of any
provisions of the Plan or of any Option granted under it shall be final
unless otherwise determined by the Board of Directors. No member of the
Board of Directors or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Option
granted under it.
5. Terms and Conditions of Options:
Stock options granted pursuant to the Plan shall be evidenced by
agreements in such form as the Committee shall from time to time recommend
and the Board of Directors shall from time to time approve, which
agreements shall comply with and be subject to the following terms and
conditions:
(a) On January 18 of each of the years 1995, 1996, and 1997
(each such date is hereafter the "Date of Grant"), each Eligible
Director shall receive an option for 4,000 shares.
(b) Each Option shall state the option price which shall be
100% of the fair market value of the shares of Common Stock of
Shelby on the applicable Date of Grant.
(c) The option price shall be paid in cash or by check upon the
exercise of the Option, or in lieu thereof an option holder may make
payment in whole or in part by tendering to Shelby shares of Common
Stock of Shelby valued at fair market value on such date of exercise.
Any Common Stock so tendered must be held by the option holder for a
period of at least six months prior to the tender.
(d) An option granted on a Date of Grant may be exercised with
respect to all or any part of the shares covered thereby at any time
after six (6) months shall have elapsed from the Date of Grant.
(e) The term of any Option shall be five (5) years from the date
it was granted.
(f) No Option shall be exercisable within the first six months
following its grant; provided, however, that this limitation shall not
apply in the event of the death of the option holder; provided, further,
that in no event shall any Option be exercisable prior to the approval
of this Plan by the holders of a majority of the shares of Shelby's
Common Stock present, or represented and entitled to vote, at its next
annual stockholders' meeting duly held in accordance with the applicable
laws of the State of Delaware.
(g) An Option shall not be transferable other than by will or the
laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Internal Revenue Code of 1986, as
amended (the "Code"), or Title I of the Employee Retirement Income
Security Act ("ERISA"), or the rules thereunder, and during the lifetime
of the person to whom the Option is granted he alone may exercise it.
(h) An option shall terminate and may not be exercised if the person
to whom it is granted ceases to be a Director of Shelby, except that,
subject to the limitation hereafter stated in this subparagraph (h):
(i) if his directorship is terminated by any reason other than his death
or on account of any act of (a) fraud or intentional misrepresentation,
or (b) embezzlement, misappropriation or conversion of assets or
opportunities of Shelby or any direct or indirect majority-owned
subsidiary of Shelby, he may at any time within three months after
termination of his directorship exercise his Option but only to the
extent that it was exercisable by him on the date of termination of his
office, and (ii) if he dies while a Director of Shelby, or within three
months after termination of his office, his Option may be exercised
at any time within 18 months following his death by the person or
persons to whom his rights under the Option shall pass by will or by
the laws of descent or distribtion, but only to the extent that such
Option was exercisable by him on the date of termination of his office.
The limitation mentioned above is that an option may not be exercised to
any extent by anyone after the expiration of its term.
(i) Neither a person to whom an Option is granted, nor his legal
representative, heir, legatee, or distributee, shall be deemed to be
the holder of, or to have any of the rights of a holder with respect
to, any shares subject to such Option unless and until he has received
a certificate or certificates therefor.
(j) The minimum number of shares with respect to which an Option
may be exercised in part at any time is 100.
6. Restrictions on Shares:
As a condition to exercise of any Option, the option holder shall
represent, warrant and agree with Shelby as follows:
(a) He is purchasing the shares with respect to which such Option
is being exercised for his own account for investment and not with
any present intention to resell or distribute the same.
(b) He has been advised that the issuance of said shares to him
has not been registered under the Securities Act of 1933, as amended
(the "Act"), and that said shares must be held by him indefinitely
unless (i) distribution of said shares has been registered under the
Act, (ii) a sales of said shares is made in conformity with the
provisions of SEC Rule 144 or (iii) in the opinion of counsel
acceptable to Shelby some other exemption from registration is
available.
(c) He will not make any sale, transfer or other disposition of
said shares except in compliance with the Act and the Rules and
Regulations thereunder. He is familiar with all of the provisions
of Rule 144, including (without limitation) the two-year holding
period thereunder.
(d) He understands that Shelby is under no obligation to him to
register the sale, transfer or other disposition of said shares by him
or on his behalf or to take any other action necessary in order to make
compliance with an exemption from registration available. In particular
(but without limitation), Shelby is under no obligation to him to make
available adequate current public information to enable him to utilize
Rule 144.
(e) He understands that stop transfer instructions will be given
Shelby's transfer agent with respect to said shares and that there
will be placed on the certificates for said shares a legend stating
in substance:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 and may not be
sold, pledged or otherwise transferred except pursuant to an
efffective registration statement under said Act, SEC Rule 144
or an opinion of counsel acceptable to Shelby that some other
exemption from registration is available."
If Shelby should elect in the future to register under the Act shares
issuable under this Plan, the Committee may modify or eliminate each of
the foregoing representations and warranties as the Committee may deem
appropriate.
If at any time Shelby shall be advised by counsel that certain
requirements under the federal or state securities laws must be met before
shares may be issued under the Plan, Shelby shall notify option holders
thereof and Shelby shall have no liability for failure to issue shares
upon any exercise of Options because of a delay pending the meeting of any
such requriements.
7. Use of Proceeds from Stock:
Cash proceeds from the sale of stock pursuant to Options granted under
the Plan shall constitute general funds of Shelby.
8. No Implied Covenants:
Neither this Plan nor any action taken hereunder shall be construed as
giving any Director any right to be retained by Shelby.
9. Withholding:
Shelby may take such action as it deems necessary or appropriate for
the withholding of any taxes which Shelby is required by any law or
regulation of any governmental authority, whether federal, state or local,
domestic or foreign, to withhold in connection with the grant or exercise
of Options. Such action may include, but shall not be limited to, the
withholding of all or any portion of the shares of stock subject to such
Option until the participant reimburses Shelby for the amount which Shelby
is required to withhold with respect to such taxes.
10. Adjustment Upon Changes in Stock:
If any change is made in the stock subject to the Plan, or subject
to any Option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, split-up, combination
of shares, exchange of shares, change in corporate structure, or
otherwise), appropriate adjustments shall be made by the Board of Directors
as to the kind and maximum number of shares subject to the Plan, and the
kind and number of shares and price per share of stock subject to
outstanding Options.
11. Amendment of the Plan:
The Board of Directors at any time, and from time to time, may amend
the Plan, subject to the limitation, however, that, except as provided
in paragraph 10 (relating to adjustments upon changes in stock), no
amendment shall be made, except upon approval by vote of the stockholders
of Shelby, which will:
(a) Increase the number of shares reserved for Options under
the Plan; or
(b) Reduce the Option price below 100% of fair market value
at the time an Option is granted; or
(c) Change the requirements for eligibility for participation
under the Plan;
and provided further that the Plan shall not be amended more than once
every six months, other than to comport with changes in the Code, ERISA,
or the rules thereunder.
12. Termination or Suspension of the Plan:
The Board of Directors at any time may suspend or terminate the Plan.
Unless previously terminated by the Board, this Plan shall terminate on
December 31, 1997.
Rights and obligations under any Option granted while the Plan is in
effect shall not be altered or impaired by suspension or termination of the
Plan, except by consent of the person to whom the Option was granted.
13. General:
Any words herein referring to the masculine gender shall include the
feminine gender.
14. Effective Date:
Subject to approval by the stockholders of Shelby prior to May 31, 1995,
this Plan shall become effective as of January 18, 1995.