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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
For the Quarter Ended April 1, 2000 Commission File Number 1-5315
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SPRINGS INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
SOUTH CAROLINA 57-0252730
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
205 North White Street
Fort Mill, South Carolina 29715
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(803) 547-1500
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 at least the past 90 days.
Yes [X] No [ ]
As of May 10, 2000, there were 10,757,337 shares of Class A Common Stock and
7,155,363 shares of Class B Common Stock of Springs Industries, Inc.
outstanding.
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There are 20 pages in the sequentially numbered, manually signed original of
this report.
The Index to Exhibits is on Page 19
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TABLE OF CONTENTS TO FORM 10-Q
PART I - FINANCIAL INFORMATION
ITEM PAGE
- ------------------------------------------------------------------------------
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 3
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 10
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK 14
PART II - OTHER INFORMATION
- ---------------------------
1. LEGAL PROCEEDINGS 15
4. SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS 16
6. EXHIBITS 17
SIGNATURES 18
EXHIBIT INDEX 19
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PART I
ITEM I - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SPRINGS INDUSTRIES, INC.
Condensed Consolidated Statement of Operations
and Retained Earnings
(In thousands except per share amounts)
(Unaudited)
THIRTEEN WEEKS ENDED
APRIL 1, APRIL 3,
2000 1999
--------- ---------
OPERATIONS
Net sales .................................. $ 593,224 $ 584,000
Cost and expenses:
Cost of goods sold ....................... 478,167 481,853
Selling, general and
administrative expenses ................ 74,318 69,540
Provision for uncollectible accounts ..... 1,015 2,782
Year 2000 expenses ....................... - 452
Interest expense ......................... 7,876 6,329
Other income, net ........................ (82) (1,527)
--------- ---------
Total .................................... 561,294 559,429
--------- ---------
Income before income taxes ................. 31,930 24,571
Income tax provision ....................... 11,823 9,327
--------- ---------
Net income .............................. $ 20,107 $ 15,244
========= =========
Basic earnings per common
share ..................................... $ 1.12 $ .85
========= =========
Diluted earnings per common
share ..................................... $ 1.10 $ .84
========= =========
Cash dividends declared per common share:
Class A common shares ..................... $ .33 $ .33
========= =========
Class B common shares ..................... $ .30 $ .30
========= =========
Basic weighted-average
common shares outstanding .................. 17,912 17,831
Dilutive effect of stock-
based compensation awards .................. 294 258
--------- ---------
Diluted weighted-average
common shares outstanding .................. 18,206 18,089
========= =========
RETAINED EARNINGS
Retained earnings at
beginning of period ....................... $ 678,170 $ 631,943
Net income ................................. 20,107 15,244
Cash dividends declared .................... (5,697) (5,672)
--------- ---------
Retained earnings at end of
period .................................... $ 692,580 $ 641,515
========= =========
See Notes to Condensed Consolidated Financial Statements.
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SPRINGS INDUSTRIES, INC.
Condensed Consolidated Balance Sheet
(In thousands except share data)
(Unaudited)
APRIL 1, JANUARY 1,
2000 2000
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents ...................... $ 11,868 $ 4,210
Accounts receivable, net ....................... 355,620 302,210
Inventories, net ............................... 487,366 479,328
Other .......................................... 37,564 37,669
----------- -----------
Total current assets ......................... 892,418 823,417
----------- -----------
Property ......................................... 1,471,760 1,452,877
Accumulated depreciation ....................... (843,349) (827,234)
----------- -----------
Property, net ................................ 628,411 625,643
----------- -----------
Goodwill and other assets ........................ 126,013 125,938
----------- -----------
Total ........................................ $ 1,646,842 $ 1,574,998
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings .......................... $ 48,400 $ 35,450
Current maturities of long-term debt ........... 20,537 21,203
Accounts payable ............................... 99,277 106,569
Other accrued liabilities ...................... 117,870 137,199
----------- -----------
Total current liabilities .................... 286,084 300,421
----------- -----------
Noncurrent liabilities:
Long-term debt ................................. 360,396 283,534
Accrued benefits and deferred
compensation .................................. 174,850 179,472
Other .......................................... 36,023 36,700
----------- -----------
Total noncurrent liabilities ................. 571,269 499,706
----------- -----------
Shareholders' equity:
Class A common stock-$.25 par value
(10,851,685 and 10,844,536 shares
issued in fiscal 2000 and 1999,
respectively) ................................ 2,713 2,712
Class B common stock-$.25 par value
(7,155,363 and 7,156,663 shares issued and
outstanding in fiscal 2000 and 1999,
respectively) ................................ 1,789 1,789
Additional paid-in capital ..................... 103,614 103,584
Retained earnings .............................. 692,580 678,170
Cost of Class A common shares in treasury
(94,561 and 95,850 shares in fiscal 2000
and 1999, respectively) ...................... (2,157) (2,181)
Accumulated other comprehensive loss ........... (9,050) (9,203)
----------- -----------
Total shareholders' equity ................... 789,489 774,871
----------- -----------
Total ........................................ $ 1,646,842 $ 1,574,998
=========== ===========
See Notes to Condensed Consolidated Financial Statements.
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SPRINGS INDUSTRIES, INC.
Condensed Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
THIRTEEN WEEKS ENDED
---------------------------------
APRIL 1, APRIL 3,
2000 1999
--------- ---------
Operating activities:
Net income............................................................... $ 20,107 $ 15,244
Adjustments to reconcile net income to net cash
used by operating activities:
Depreciation and amortization........................................... 25,895 25,614
Provision for uncollectible receivables................................. 1,015 2,782
Gains on sales of property.............................................. (64) (1,133)
Changes in working capital, net......................................... (84,960) (44,646)
Other, net.............................................................. (6,113) (19,582)
-------- ---------
Net cash used by operating activities................................ (44,120) (21,721)
-------- ---------
Investing activities:
Purchases of property.................................................... (26,660) (32,664)
Proceeds from sales of property.......................................... 293 2,641
Net proceeds from sales of businesses.................................... - 36,094
Business acquisitions, net of cash acquired.............................. - (47,754)
Principal collected on notes receivable.................................. 390 476
-------- ---------
Net cash used by investing activities................................ (25,977) (41,207)
-------- ---------
Financing activities:
Proceeds from short-term borrowings, net................................. 12,950 5,979
Proceeds from long-term debt............................................. 80,000 25,000
Repayments of long-term debt............................................. (3,804) (3,949)
Cash dividends paid...................................................... (11,391) (11,339)
-------- ---------
Net cash provided by financing activities............................ 77,755 15,691
-------- ---------
Increase (decrease) in cash and cash equivalents........................... 7,658 (47,237)
Cash and cash equivalents at beginning of period........................... 4,210 48,127
-------- ---------
Cash and cash equivalents at end of period................................. $ 11,868 $ 890
======== =========
See Notes to Condensed Consolidated Financial Statements.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation and Significant Accounting Policies:
The accompanying unaudited, condensed, consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes
required by accounting principles generally accepted in the United
States of America ("generally accepted accounting principles") for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) necessary for a
fair presentation have been included. Operating results for the
three-month period ended April 1, 2000, are not necessarily indicative
of the results that may be expected for the year ending December 30,
2000. For further information, refer to the consolidated financial
statements and footnotes thereto included in the annual report on Form
10-K for the year ended January 1, 2000 (the "1999 Annual Report") of
Springs Industries, Inc. ("Springs" or the "Company").
Use of Estimates: Preparation of the Company's condensed consolidated
financial statements in accordance with generally accepted accounting
principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosures
relating to contingent assets and liabilities, and the reported amounts
of revenues and expenses. Actual results could differ from those
estimates and assumptions.
Reclassifications: Certain prior year amounts have been reclassified to
conform with the 2000 presentation.
Segment Reporting: The Company's operations have been aggregated into
one reportable segment in accordance with Financial Accounting
Standards Board ("FASB") Statement No. 131, "Disclosures about Segments
of an Enterprise and Related Information." The Company evaluates its
performance based on profit from operations, which is defined as net
sales less cost of goods sold, selling, general, and administrative
expenses, and the provision for uncollectible receivables. Profit from
operations and the reconciliation to the Company's consolidated income
before taxes for the three-month periods ended April 1, 2000 and April
3, 1999 were as follows: (in millions)
April 1, April 3,
2000 1999
--------- ---------
Profit from operations ......... $ 39.7 $ 29.8
Year 2000 expenses ............. - (0.4)
Interest expense ............... (7.9) (6.3)
Other income, net .............. 0.1 1.5
--------- ---------
Income before income taxes ..... $ 31.9 $ 24.6
========= =========
Recently Issued Accounting Standards: In March 2000, the FASB issued
Interpretation No. 44, "Accounting for Certain Transactions Involving
Stock Compensation - an interpretation of APB Opinion No. 25," which
clarifies certain stock compensation issues. This interpretation is
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effective July 1, 2000. The Company does not expect this interpretation
to have a material effect on its financial position, results of
operations, or cash flows.
In June 1998, the FASB issued Statement No. 133, "Accounting for
Derivative Instruments and Hedging Activities." This statement
establishes accounting and reporting standards for derivative
instruments and hedging activities. This statement will require the
Company to recognize all derivatives on the Consolidated Balance Sheet
at fair value, and may impact the Company's earnings depending on the
instruments held at the time of adoption. The Company will be required
to adopt this standard beginning in its 2001 fiscal year, and is in the
process of determining the impact of this standard on its financial
position, results of operations and cash flows.
2. Accounts Receivable:
The Company performs ongoing credit evaluations of its customers'
financial conditions and, typically, requires no collateral from its
customers. The Company's reserve for doubtful accounts was $8.4 million
at April 1, 2000, compared to $9.7 million at January 1, 2000. The
decrease in the reserve for doubtful accounts reflects a year-to-date
provision for doubtful accounts of $1.0 million and net write-offs of
approximately $2.3 million for previously-reserved accounts.
3. Inventories:
Inventories are summarized as follows: (in thousands)
April 1, January 1,
2000 2000
--------- ---------
Standard cost (which
approximates current cost):
Finished goods .................. $ 347,404 $ 328,383
In process ...................... 171,919 181,323
Raw materials and supplies ...... 54,968 64,293
--------- ---------
574,291 573,999
Less LIFO reserve ................. (86,925) (94,671)
--------- ---------
Total ............................ $ 487,366 $ 479,328
========= =========
4. Acquisitions and Divestiture:
During the first quarter of 1999, the Company completed two
acquisitions and one divestiture. Please refer to the 1999 Annual
Report for further discussion of the following transactions.
On January 23, 1999, the Company acquired Regal Rugs, Inc. ("Regal"),
an importer and manufacturer of bath and accent rugs. Regal's operating
results have been included in the Company's consolidated financial
statements beginning as of the January 23, 1999 acquisition date.
On January 5, 1999, the Company acquired American Fiber Industries, LLC
("AFI"), a manufacturer and distributor of bed pillows, mattress pads,
down comforters and comforter accessories. AFI's operating results have
been included in the Company's consolidated financial statements
beginning as of the January 5, 1999 acquisition date.
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Effective March 31, 1999, the Company sold its UltraFabrics business.
First-quarter 1999 sales and pretax operating profit before unusual
items of the UltraFabrics business were not material.
5. Accrued Benefits and Deferred Compensation:
The long-term portion of accrued benefits and deferred compensation was
comprised of the following: (in thousands)
April 1, January 1,
2000 2000
-------- --------
Postretirement medical benefit obligation $ 61,504 $ 62,097
Deferred compensation 63,439 68,132
Other employee benefit obligations 49,907 49,243
-------- --------
Total $174,850 $179,472
======== ========
The liabilities are long term in nature and will be paid over time in
accordance with the terms of the plans.
6. Financing Arrangements:
In the first quarter of 2000, the Company borrowed an additional $80.0
million through its existing long-term revolving credit agreement,
which will expire in December 2002. The LIBOR-based interest rate on
this agreement was 6.2 percent as of April 1, 2000.
7. Comprehensive Income:
Comprehensive income was $20.2 million and $16.3 million for the
three-month periods ended April 1, 2000, and April 3, 1999,
respectively. Net income differed from comprehensive income due to
foreign currency translation adjustments.
8. Income Taxes:
In the first quarter of 2000, the Company estimated the provision for
income taxes for fiscal 2000 will be 37 percent, compared to 38 percent
during fiscal 1999. This change is due to the Company's ongoing tax
planning strategies and management of tax rates in various
jurisdictions.
9. Contingencies:
As disclosed in its 1999 Annual Report, Springs is involved in certain
administrative proceedings governed by environmental laws and
regulations, including proceedings under the Comprehensive
Environmental Response, Compensation, and Liability Act. The potential
costs to the Company related to all of these environmental matters are
uncertain due to such factors as: the unknown magnitude of possible
pollution and cleanup costs; the complexity and evolving nature of
governmental laws and regulations and their interpretations; the
timing, varying costs and effectiveness of alternative cleanup
technologies; the determination of the Company's liability in
proportion to other potentially responsible parties; and the extent, if
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any, to which such costs are recoverable from insurers or other
parties.
In connection with these proceedings, the Company estimates the range
of possible losses to be between $7 million and $15 million and has
accrued an undiscounted liability of approximately $11 million as of
April 1, 2000, which represents management's best estimate of Springs'
probable liability concerning all known environmental matters.
Management believes the $11 million will be paid out over the next 15
years. This accrual has not been reduced by any potential insurance
recovery to which the Company may be entitled regarding environmental
matters. Environmental matters include a site listed on the United
States Environmental Protection Agency's ("EPA") National Priority List
where Springs is the sole responsible party. Springs, the EPA and the
United States Department of Justice have executed a consent decree
related to this site. Soil cleanup was completed in 1993, subject to
final approval by the EPA, and the approved EPA groundwater remedy
began in 1996. There are no other known sites which the Company
presently believes may involve material amounts.
Springs is also involved in various legal proceedings and claims
incidental to its business. Springs is protecting its interests in all
such proceedings.
In the opinion of management, based on the advice of counsel, the
likelihood that the resolution of the above matters would have a
material adverse impact on either the financial condition or the future
results of operations of Springs is remote.
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ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
Springs Industries, Inc. ("Springs" or "the Company") is engaged in
manufacturing, marketing and selling textile and non-textile home furnishings
products. The Company's product line includes sheets, pillows, pillowcases,
bedspreads, comforters, mattress pads, baby bedding and infant apparel, towels,
shower curtains, bath and accent rugs, other bath fashion accessories,
over-the-counter home-sewing fabrics, drapery hardware, and hard and soft
decorative window fashions.
The Company's emphasis on the home furnishings market has developed into three
strategic initiatives: focus on key accounts, brand investment and expansion,
and cost reduction and purchasing efficiencies. These specific initiatives
commenced in 1998 and continue to be enhanced and expanded. In the current
year, supply chain management will be an additional area of emphasis.
Consistent with the Company's home furnishings market strategy, Springs acquired
two home furnishings businesses in the first quarter of 1999. On January 23,
1999, the Company acquired Regal Rugs, Inc. ("Regal"), an importer and
manufacturer of bath and accent rugs, for approximately $35 million. The
acquisition was accounted for as a purchase, and Regal's operating results have
been included in the Company's consolidated financial statements beginning as of
the January 23, 1999, acquisition date. On January 5, 1999, the Company acquired
the remaining 50 percent interest in American Fiber Industries, LLC ("AFI"), a
manufacturer and distributor of bed pillows, mattress pads, down comforters, and
comforter accessories, for approximately $15 million. The Company has accounted
for the remaining interest as a purchase, and AFI's operating results have been
included in the Company's consolidated financial statements since the January 5,
1999, acquisition date. Please refer to the Company's consolidated financial
statements and footnotes thereto included in the annual report on Form 10-K for
the year ended January 1, 2000 (the "1999 Annual Report") for additional
information.
RESULTS OF OPERATIONS
Sales
Net sales for the first quarter of 2000 were $593.2 million, up 1.6 percent from
the first quarter of 1999. This increase in sales was principally attributable
to the continued sales growth of bedding and bath products with major mass
merchants and specialty stores as well as higher sales of window fashions
products to home improvement retailers. Both the first quarter of 2000 and 1999
reflect strong sales volumes due to rollouts of products under new programs.
Rollouts in the first quarter of 2000 included the introduction of the
Springmaid(R) brand to the mass merchant channel. The increase in revenues
also reflects increased sales for the acquired AFI and Regal businesses.
These positive sales trends were partially offset by lower sales to department
stores and smaller specialty stores.
Earnings
Net income for the first quarter was $20.1 million, or $1.10 per diluted share,
compared to $15.2 million, or $0.84 per diluted share in the first
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quarter of 1999. First quarter 1999 net income excluding Year 2000 expenses was
$15.5 million, or $0.86 per diluted share.
The increase in earnings was driven primarily by improvements in gross margin,
from 17.5 percent in 1999 to 19.4 percent in 2000. The gross margin improvement
resulted from improved manufacturing productivity, favorable commodity costs,
and purchasing efficiencies, which more than offset lower margins on sales of
off-quality and closeout merchandise. The improvements in gross margins related
to cost reductions and purchasing efficiencies are expected to continue
throughout the year but will be partially offset in the second and third
quarters of 2000 as the Company sells its accumulated inventories of
off-quality and closeout merchandise.
The increase in gross margin was offset by a slight increase in selling,
general, and administrative expenses from 12.5 percent of sales in 1999 to 12.7
percent in 2000. The higher selling, general, and administrative rate reflects
additional advertising and promotional spending to support the Company's brand
investment and expansion initiative, and increased sales and marketing expenses
to improve customer service and focus on key accounts. The impact of these
additional expenses was partially offset by lower bad debt expenses in the first
quarter of 2000 due to improvements in the overall quality of the Company's
receivables.
Income Taxes
In the first quarter of 2000 the Company estimated the provision for income
taxes for fiscal 2000 will be 37 percent, compared to 38 percent during fiscal
1999. This change is due to the Company's ongoing tax planning strategies and
management of tax rates in various jurisdictions and resulted in a $0.3 million
reduction in the first quarter 2000 income tax provision.
CAPITAL RESOURCES AND LIQUIDITY
As of the end of the first quarter of 2000, the Company increased its short-term
borrowings by $13 million and borrowed an additional $80 million under its
existing long-term revolving credit agreement. These borrowings were used to
fund higher levels of accounts receivable and inventory and to reduce levels of
various current liabilities. First-quarter 2000 rollouts of products under new
programs were more heavily weighted toward the month of March, which increased
accounts receivable by $53 million compared to the end of 1999. The building of
inventory for rollouts and to maintain necessary levels of finished-goods
inventory to meet customer service requirements, combined with
lower-than-expected sales of off-quality and closeout merchandise, increased
inventory by $8 million when compared to the prior year end. Accounts payable
and other current liabilities decreased by $27 million from the end of 1999.
The Company expects capital expenditures for 2000 to approximate $150 million.
Management believes that cash generated by operations and borrowings from bank
lines will adequately provide for the Company's cash needs during 2000.
MARKET RISK SENSITIVE INSTRUMENTS AND POSITIONS
Interest Rate Risk: Springs is exposed to interest rate volatility with regard
to existing issuances of variable rate debt. The Company uses interest rate
swaps to reduce interest rate volatility and funding costs
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associated with certain debt issues, and to achieve a desired proportion of
variable versus fixed-rate debt, based on current and projected market
conditions. The fair value of the Company's derivative financial instruments and
other financial instruments that are sensitive to changes in interest rates,
including interest rate swaps and debt obligations, has not changed materially
as of April 1, 2000, relative to the fair value of such instruments at January
1, 2000.
Commodity Price Risk: The Company is exposed to price fluctuations related to
anticipated purchases of certain raw materials, primarily cotton fiber. Springs
uses a combination of forward delivery contracts and exchange-traded futures
contracts, consistent with the size of its business, to reduce the Company's
exposure to price volatility. Management assesses these contracts on a
continuous basis to determine if contract prices will be recovered through
subsequent sales. The Company held $22.4 million of cotton futures
contracts settling through December 2000 to hedge against price fluctuations
related to anticipated purchases of cotton fiber. These contracts had an
unrealized loss of $1.0 million as of April 1, 2000. Near-term changes in the
price of cotton fiber are not expected to have a material impact on the
Company's future earnings or cash flows.
Foreign Exchange Risk: The Company is exposed to foreign exchange risk to the
extent of adverse fluctuations in certain exchange rates, primarily the Canadian
dollar and Mexican peso. The Company does not believe that reasonably possible
near-term changes in foreign currencies will result in a material impact on
future earnings or cash flows.
NEW PRONOUNCEMENTS
In March 2000, the Financial Accounting Standard Board ("FASB") issued
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
Compensation - an interpretation of APB Opinion No. 25," which clarifies certain
stock compensation issues. This interpretation is effective July 1, 2000. The
Company does not expect this interpretation to have a material effect on its
financial position, results of operations, or cash flows.
In June 1998, the FASB issued Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement establishes accounting and
reporting standards for derivative instruments and hedging activities. This
statement will require the Company to recognize all derivatives on the
Consolidated Balance Sheet at fair value, and may impact the Company's earnings
depending on the instruments held at the time of adoption. The Company will be
required to adopt this standard beginning in its 2001 fiscal year, and is in the
process of determining the impact of this standard on its financial position,
results of operations, and cash flows.
FORWARD LOOKING INFORMATION
This Form 10-Q report contains forward-looking statements that are based on
management's expectations, estimates, projections, and assumptions. Words such
as "expects," "believes," "estimates," and variations of such words and similar
expressions are often used to identify such forward-looking statements which
include but are not limited to projections of expenditures, savings, completion
dates, cash flows, and operating performance. Such forward-looking statements
are made pursuant to the safe-harbor provisions of the Private Securities
Litigation Reform Act of 1995. These statements are not guaranties of future
performance; instead, they relate to situations with respect to which certain
risks and uncertainties are difficult to predict.
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Actual future results and trends, therefore, may differ materially from what is
predicted in forward-looking statements due to a variety of factors, including:
the health of the retail economy in general, competitive conditions and demand
for the Company's products; progress toward the Company's cost-reduction goals;
unanticipated natural disasters; legal proceedings; labor matters; and the
availability and price of raw materials which could be affected by weather,
disease, energy costs, or other factors.
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ITEM 3. - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information called for by this item is incorporated by reference from this
Form 10-Q under the caption "Market Risk Sensitive Instruments and Positions" of
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations."
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PART II - OTHER INFORMATION
ITEM 1. - LEGAL PROCEEDINGS
The Company operates a towel finishing plant in Griffin,
Georgia, which discharges treated wastewater into a creek located near the
plant. Because the plant is unable to meet certain provisions of its National
Pollutant Discharge Elimination System ("NPDES") permit for the discharge, the
Company negotiated a consent order in 1997 with the Georgia Environmental
Protection Division ("EPD"), which required the Company to achieve compliance by
December 6, 1999.
Although the Company developed alternative methods for
achieving compliance with the NPDES requirements, compliance could not be
achieved by December 6, 1999, because of regulatory constraints. On December 3,
1999, the EPD issued an administrative order that allows the Company to continue
operating the plant for two years. The order contemplates a change in the
Georgia environmental rules that would allow site-specific exceptions based on
appropriate scientific evaluations that provide adequate protection to the
environment and would require the Company to apply for an appropriate permit
modification following adoption of the rule change.
The rule change was adopted on April 26, 2000, by the Georgia
Department of Natural Resources and is scheduled to become effective after 30
days. The Company is working with the EPD to develop the necessary data to
submit an application for a permit modification.
EPD also issued a consent order in February 2000 which
provides for certain penalties because of the inability of the Company to comply
with its NPDES permit by December 6, 1999. The consent order imposed stipulated
penalties of $10,000 for failure to comply with the December 6, 1999, deadline
for compliance and $32,000 for certain violations between September 1998 and
June 1999. The order also imposes additional monthly and quarterly penalties of
up to a maximum of $68,000 per year for failure to satisfy certain provisions of
the NPDES permit after December 7, 1999.
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PART II - OTHER INFORMATION
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The annual meeting of the security holders of the Company was
held on May 8, 2000.
(b) During the annual meeting, the security holders of the Company
elected the following directors to hold office until the next annual meeting of
the security holders and until a successor is duly elected and qualified:
John F. Akers John H. McArthur
Crandall C. Bowles Aldo Papone
John L. Clendenin Robin B. Smith
Leroy S. Close Sherwood H. Smith, Jr.
Charles W. Coker Stewart Turley
William G. Kelley
(c)
Description of Matter For Against or
Voted Upon Withheld
(i)
Annual election of
directors:
John F. Akers 36,979,572 64,729
Crandall C. Bowles 36,979,845 64,456
John L. Clendenin 36,978,922 65,379
Leroy S. Close 36,979,714 64,587
Charles W. Coker 36,979,670 64,631
William G. Kelley 36,973,856 70,445
John H. McArthur 36,979,206 65,095
Aldo Papone 36,981,814 62,487
Robin B. Smith 36,980,417 63,884
Sherwood H. Smith, Jr. 36,982,004 62,297
Stewart Turley 36,982,004 62,297
For Against Abstentions
(ii)
Ratification of the 36,876,956 1,511 31,508
appointment of Deloitte &
Touche as the Company's
auditors
(d) N/A
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ITEM 6 - EXHIBITS
The following exhibits are filed as part of this report:
(27) Financial Data Schedule
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SIGNATURES
Pursuant to the requirements of Securities Exchange Act of 1934, Springs
Industries, Inc. has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
SPRINGS INDUSTRIES, INC.
By: /s/ Jeffrey A. Atkins
-------------------------------
Jeffrey A. Atkins
Executive Vice President and
Chief Financial Officer
(Duly Authorized Officer and
Principal Financial Officer)
DATED: May 16, 2000
18
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EXHIBIT INDEX
Item Page Number
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(27) Financial Data Schedule (for SEC purposes) 20
19