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, 1998
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.)
11-111 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 April 17, 1998, there were 9,181,817 shares of registrant's
common stock outstanding.
PART I - FINANCIAL INFORMATION
SHELBY WILLIAMS INDUSTRIES, INC.
Consolidated Statements of Income
Three Months Ended
March 31, 1998 and 1997
(Unaudited)
(Amounts in thousands, except per share data)
1998 1997
_________ ________
Net sales $42,018 $41,819
Cost of goods sold 32,582 32,350
______ ______
Gross profit 9,436 9,469
Selling, general and
administrative
expenses 6,125 6,077
______ ______
3,311 3,392
Other deductions
(income):
Interest expense 125 157
Interest and dividend
income (188) (26)
Miscellaneous expense
(income) 18 29
______ ______
(45) 160
______ ______
Income before income
taxes 3,356 3,232
______ ______
Income taxes:
Current 1,224 1,007
Deferred 18 59
______ ______
1,242 1,066
______ ______
Net income $ 2,114 $ 2,166
====== ======
Net income per share (basic
and diluted) $ .23 $ .25
====== ======
Weighted average number
of common shares
outstanding 9,296 8,744
====== ======
<FN>
SHELBY WILLIAMS INDUSTRIES, INC.
Consolidated Balance Sheets
March 31, 1998 and December 31, 1997
(Unaudited)
(Amounts in thousands, except per share data)
March 31, 1998 December 31, 1997
_______________ _________________
ASSETS
Current assets:
Cash and cash equivalents $12,582 $11,124
Accounts receivable, less
allowance for doubtful
accounts of $428 at
March 31, 1998 and
$405 at December 31,
1997 27,363 28,307
Inventories:
Raw materials 11,162 9,127
Work in process 3,524 4,978
Finished goods 11,098 11,131
______ ______
25,784 25,236
Prepaid expense 5,130 5,352
______ ______
Total current assets 70,859 70,019
Excess of cost over net assets
of acquired company 158 160
Property, plant and equipment
at cost:
Land and land improvements 2,961 2,961
Buildings and leasehold
improvements 23,641 23,273
Machinery and equipment 25,866 23,178
Construction in progress 175 1,690
______ ______
52,643 51,102
Less accumulated
depreciation and
amortization 24,748 24,156
______ ______
27,895 26,946
Other assets 1,268 1,203
______ ______
$100,180 $98,328
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 5,848 $ 5,496
Customer deposits on
orders in process 4,815 4,225
Accrued liabilities 8,414 5,944
Income taxes 2,549 1,860
Current portion of long-
term debt 4,000 4,000
______ ______
Total current liabilities 25,626 21,525
Long-term debt 2,000 3,000
Deferred income taxes 2,049 2,031
Stockholder's equity:
Common stock, $.05 par value;
authorized 30,000 shares;
issued 11,856 shares
(1997-11,848 shares) 593 592
Capital in excess of par value 9,912 9,837
Retained earnings 78,091 76,820
______ ______
88,596 87,249
Less common stock held in
treasury; 2,674 shares
at cost (1997-2,500) 18,091 15,477
______ ______
Total stockholders' equity 70,505 71,772
$100,180 $98,328
====== ======
<FN>
SHELBY WILLIAMS INDUSTRIES, INC.
Consolidated Statements of Cash Flows
Three Months Ended March 31, 1998 and 1997
(Unaudited)
(Amounts in thousands)
1998 1997
___________________________
Cash flows from operating activities:
Net income $2,114 $2,166
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 654 650
Provision for losses on accounts
receivable 31 22
Change in assets and liabilities:
Accounts receivable 913 1,531
Inventories (548) (957)
Prepaid expenses 222 272
Accounts payable and accrued
liabilities 877 (1,308)
Income taxes payable 689 (76)
Increase in deferred taxes 18 59
Other (65) (50)
_____ _____
Net cash provided by operating
activities 4,905 2,309
_____ _____
Cash flows from investing activities:
Proceeds from disposal of property,
plant and equipment 7 7
Capital expenditures (1,608) (422)
_____ _____
Net cash used by investing activities (1,601) (415)
_____ _____
Cash flows from financing activities:
Principal payments of long-term debt (1,000) -
Sale of common stock under stock
option plan 76 296
Purchase of common stock for the
treasury (79) (707)
Dividends declared and paid (843) (701)
_____ _____
Net cash used by financing activities (1,846) (1,112)
_____ _____
Net increase in cash 1,458 782
Cash and cash equivalents at beginning
of period 11,124 1,039
_____ _____
Cash and cash equivalents at end of
period $12,582 $1,821
===== =====
Supplemental cash flow information:
Cash paid during the period for:
Interest $ 141 $ 157
Income taxes 535 1,083
_____ _____
$ 676 $1,240
===== =====
<FN>
SHELBY WILLIAMS INDUSTRIES, INC.
March 31, 1998
Item 1. Financial Statements
The attached unaudited statements include all adjustments which are, in
the opinion of management, necessary to a fair statement of the results for
the interim periods presented. All such adjustments are of a normal recur-
ring nature. Accrued liabilities at March 31, 1998 include $2,535,000 for
purchase of common stock for the treasury on March 30, 1998 which was paid
April 2, 1998. The statements are as follows:
Consolidated Statements of Income for three months ended
March 31, 1998 and 1997.
Consolidated Balance Sheets at March 31, 1998 and December 31,
1997.
Consolidated Statements of Cash Flows for three months ended
March 31, 1998 and 1997.
Item 2. Managements' Discussion and Analysis of Financial Condition
and Results of Operations
Material Changes in Financial Condition
Capital expenditures during the quarter ended March 31, 1998,
amounted to $1.6 million, of which $0.3 million was for installation of a
state-of-art powder coating system completed in March 1998 at a total
cost of $2.0 million, approximately $0.5 million for facilities expansion
and improvements, and the balance principally for automated machinery.
The Company plans to expend approximately $1.5 million during the next
nine months for additional automated machinery and facilities expansion.
Book value per share at March 31, 1998, was $7.68 versus $6.52 a year
earlier. The current ratio at March 31, 1998 stood at 2.8-to-one.
The Company purchased 174,000 shares of its common stock in the quarter
ended March 31, 1998, for $2.6 million at an average repurchase price of
$15.03 per share including 169,000 shares purchased on March 30, 1998,
for $2.5 million paid on April 2, 1998. These repurchases were made to
provide shares upon the exercise of options granted and to be granted
under the Company's stock option plans and for other proper corporate
purposes. The Company's Board of Directors has authorized the re-
purchase of an additional 277,000 shares of common stock. The Company
may purchase these shares from time to time, depending on market
conditions, in the open market or privately negotiated transactions.
Material Changes in Results of Operation
For the quarter ended March 31, 1998, net sales totaled $42.0
million compared to $41.8 million in the first quarter of 1997. The
Company's performance was impacted by decreased export sales and weakness
in the Hawaiian market. Its principal textile division, Hawaii-based
PHF, was affected by the current economic situation in its markets in
Hawaii and the Pacific Rim. Gross margin for the quarter was 22.5
percent of sales, slightly down from 22.6 percent in the 1997 period.
Selling, general and administrative expenses were 14.6 percent of sales
compared to 14.5 percent in the prior first quarter, resulting in
operating profit margin of 7.9 percent of sales versus 8.1 percent one
year ago. Net interest income of $63,000 in the quarter ended March 31,
1998 contrasted to net interest expense of $131,000 for the 1997 first
quarter due to increased cash and cash equivalents to $12.6 million at
March 31, 1998 from $1.8 million a year earlier and reduction of total
debt by $2.0 million. The effective tax rate increased to 37.0% from
33.0% reflecting the impact of decreased export sales to $2.2 million
from $4.5 million. As a result of the foregoing, net income in the
first quarter decreased 2.4 percent to $2.1 million from $2.2 million
in the 1997 first quarter. Basic and diluted earnings per share
decreased to $0.23 on 6.3 percent more average shares outstanding,
compared to $0.25 a year earlier.
At March 31, 1998, the Company's backlog of unshipped orders was an all-time
record high $37.7 million versus $36.5 million a year earlier.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
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)
April 17, 1998 S/Robert P. Coulter
________________________________
Robert P. Coulter
President and Director
(Principal Operating Officer)
April 17, 1998 S/Sam Ferrell
________________________________
Sam Ferrell
Vice President of Finance, Treasurer
and Assistant Secretary
(Principal Financial Officer)