1
EXHIBIT 13
INDUSTRY SEGMENT INFORMATION (1)
Springs Industries, Inc.
(In millions) 1994 1993 1992(2)
SALES PER INDUSTRY ---- ---- ------
SEGMENT (In percent)
[PIE Graph] TRADE SALES:
Home furnishings........................ $1,460.1 $1,386.4 $ 1,278.4
Pie graph showing the Specialty fabrics....................... 608.8 636.4 697.3
percentage of total -------------------------------------------------------------------------------------
sales generated by TOTAL.............................. $2,068.9(3) $2,022.8(3) $ 1,975.7
each segment for =====================================================================================
1994. OPERATING INCOME:
Home furnishings........................ $ 97.5 $ 99.8 $ 100.5
Specialty fabrics....................... 38.3 22.1 12.7
-------------------------------------------------------------------------------------
Total.............................. $ 135.8 $ 121.9 $ 113.2
-------------------------------------------------------------------------------------
Interest expense........................... 29.2 30.3 31.4
Other (income) expense..................... (0.1) 7.8 1.8
-------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES AND
CUMULATIVE EFFECT OF ADOPTION OF
OPERATING INCOME PER SFAS NOS. 106 & 109................ $ 106.7 $ 83.8 $ 80.0
INDUSTRY SEGMENT =====================================================================================
(In percent) IDENTIFIABLE ASSETS AT YEAR END:
[Pie Graph] Home furnishings........................ $ 990.4 $ 957.3 $ 894.5
Specialty fabrics....................... 430.3 461.2 489.6
Pie graph showing the LIFO reserve............................ (132.5) (129.2) (137.8)
percentage of total Corporate............................... .8 2.8 4.0
operating income -------------------------------------------------------------------------------------
generated by each TOTAL.............................. $1,289.0 $1,292.1 $ 1,250.3
segment for 1994. =====================================================================================
CAPITAL EXPENDITURES:
Home furnishings........................ $ 69.1 $ 71.0 $ 59.3
Specialty fabrics....................... 23.5 17.3 21.0
-------------------------------------------------------------------------------------
TOTAL.............................. $ 92.6 $ 88.3 $ 80.3
=====================================================================================
DEPRECIATION AND AMORTIZATION:
Home furnishings........................ $ 67.6 $ 64.1 $ 60.5
Specialty fabrics....................... 22.7 23.0 26.9
-------------------------------------------------------------------------------------
TOTAL.............................. $ 90.3 87.1 87.4
=====================================================================================
(1) This schedule provides consolidated financial information by segment,
but not financial information of the segments as separate entities.
Operating income represents sales less cost of goods sold and selling,
general and administrative expenses. The allocation of the LIFO reserve
and corporate assets (cash and cash equivalents) to the segments is not
practicable. See notes to financial statements for further discussion
regarding industry segments.
(2) 53 weeks
(3) Sales for 1994 and 1993 include sales of $258.4 million and $222.4
million, respectively, to one customer. The Company's home furnishings
segment had sales of $202.8 million and $172.1 million for 1994 and 1993,
respectively, to this customer. Sales of $55.6 million and $50.3 million
for 1994 and 1993, respectively, are included in the specialty fabrics
segment.
18
2
CONSOLIDATED STATEMENT OF OPERATIONS AND RETAINED EARNINGS
Springs Industries, Inc.
(In thousands except per share data)
For the Fiscal Years Ended December 31, 1994, January 1, 1994, and
January 2, 1993 (53 weeks)
1994 1993 1992 DISTRIBUTION OF
---- ---- ---- THE SALES DOLLAR
(In percent)
OPERATIONS [Pie Graph]
NET SALES...................................... $ 2,068,911 $ 2,022,816 $ 1,975,692
- ------------------------------------------------------------------------------------------------------- Pie graph showing
Cost of goods sold.......................... 1,632,489 1,619,422 1,585,357 percentage of each
Selling, general and sales dollar spent
administrative expenses................... 300,580 281,539 277,174 on (i) raw materials
- ------------------------------------------------------------------------------------------------------- and purchased goods,
Operating income........................ 135,842 121,855 113,161 (ii) wages, salaries
Interest expense............................ 29,253 30,256 31,418 and benefits, (iii)
Other (income) expense...................... (123) 7,786 1,748 other manufacturing,
- ------------------------------------------------------------------------------------------------------- selling, general and
Income before income taxes administrative expenses,
and cumulative effect of adoption of (iv) cash dividends and
SFAS Nos. 106 & 109......................... 106,712 83,813 79,995 retained earnings and
Income tax provision........................... 44,485 36,557 35,465 (v) income taxes.
- -------------------------------------------------------------------------------------------------------
Income before cumulative effect of
adoption of SFAS Nos. 106 & 109............. 62,227 47,256 44,530
Cumulative effect of adoption of SFAS
Nos. 106 & 109, net of income tax........... -- (72,543) --
- -------------------------------------------------------------------------------------------------------
NET INCOME (LOSS).................... $ 62,227 $ (25,287) $ 44,530
=======================================================================================================
PER SHARE:
Income before cumulative effect of
adoption of SFAS Nos. l06 & 109............ $ 3.50 $ 2.65 $ 2.50
Cumulative effect of adoption of SFAS
Nos. 106 & 109, net of income tax.......... -- (4.07) --
- -------------------------------------------------------------------------------------------------------
NET INCOME (LOSS)................... $ 3.50 $ (1.42) $ 2.50
=======================================================================================================
1994 1993 1992
RETAINED EARNINGS
RETAINED EARNINGS AT BEGINNING OF YEAR........ $ 526,428 $ 571,864 $ 547,463
Net income (loss)............................. 62,227 (25,287) 44,530
Class A cash dividends declared............... (11,758) (11,624) (11,538)
Class B cash dividends declared............... (8,494) (8,525) (8,591)
- -------------------------------------------------------------------------------------------------------
RETAINED EARNINGS
AT END OF YEAR...................... $ 568,403 $ 526,428 $ 571,864
=======================================================================================================
See Notes to Consolidated Financial Statements.
19
3
CONSOLIDATED BALANCE SHEET
Springs Industries, Inc.
(In thousands except share data)
December 31, 1994 and January 1, 1994
1994 1993
ASSETS
CURRENT ASSETS:
Cash and cash equivalents.................................................... $ 769 $ 2,790
Accounts receivable.......................................................... 312,739 315,834
Inventories.................................................................. 264,161 267,842
Other........................................................................ 39,335 40,073
- ------------------------------------------------------------------------------------------------------------------
Total current assets..................................................... 617,004 626,539
- ------------------------------------------------------------------------------------------------------------------
PROPERTY (AT COST):
Land and improvements........................................................ 16,546 17,549
Buildings.................................................................... 224,410 205,229
Machinery, equipment, etc.................................................... 1,012,104 973,065
- ------------------------------------------------------------------------------------------------------------------
Total.................................................................... 1,253,060 1,195,843
Accumulated depreciation..................................................... (697,810) (645,938)
- ------------------------------------------------------------------------------------------------------------------
Property, net............................................................ 555,250 549,905
- ------------------------------------------------------------------------------------------------------------------
OTHER ASSETS AND DEFERRED CHARGES............................................... 116,789 115,687
- ------------------------------------------------------------------------------------------------------------------
TOTAL.................................................................... $1,289,043 $1,292,131
==================================================================================================================
LIABILITIES AND SHAREOWNERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings........................................................ $ 11,100 $ 61,420
Current maturities of long-term debt......................................... 21,318 20,511
Accounts payable............................................................. 83,232 73,640
Accrued incentive pay and benefit plans...................................... 39,178 33,928
Other accrued liabilities.................................................... 89,128 83,511
- ------------------------------------------------------------------------------------------------------------------
Total current liabilities................................................ 243,956 273,010
- ------------------------------------------------------------------------------------------------------------------
NONCURRENT LIABILITIES:
Long-term debt............................................................... 265,384 293,028
Long-term benefit plans and deferred compensation............................ 144,967 139,284
Deferred income taxes........................................................ 30,731 27,914
Deferred credits and other liabilities....................................... 19,914 15,702
- ------------------------------------------------------------------------------------------------------------------
Total noncurrent liabilities............................................. 460,996 475,928
- ------------------------------------------------------------------------------------------------------------------
SHAREOWNERS' EQUITY:
Class A common stock- $.25 par value (9,884,143 and 9,858,035 shares
issued in 1994 and 1993, respectively)...................................... 2,471 2,465
Class B common stock- $.25 par value (7,830,375 and 7,853,087 shares
issued in 1994 and 1993, respectively)...................................... 1,958 1,963
Additional paid-in capital................................................... 11,413 11,144
Retained earnings............................................................ 568,403 526,428
Cost of Class A shares in treasury (1994-119,585 shares; 1993-129,460 shares) (2,602) (2,785)
Currency translation adjustment.............................................. 2,448 3,978
- ------------------------------------------------------------------------------------------------------------------
Total shareowners' equity................................................ 584,091 543,193
- ------------------------------------------------------------------------------------------------------------------
TOTAL.................................................................... $1,289,043 $1,292,131
==================================================================================================================
See Notes to Consolidated Financial Statements.
20
4
CONSOLIDATED STATEMENT OF CASH FLOWS
Springs Industries, Inc.
(In thousands)
For the Fiscal Years Ended December 31, 1994, January 1, 1994, and
January 2, 1993 (53 Weeks)
1994 1993 1992
OPERATING ACTIVITIES:
Net income (loss).............................................. $ 62,227 $ (25,287) $ 44,530
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Cumulative effect of adoption of SFAS Nos. 106 & 109,
net of income taxes........................................ -- 72,543 --
Depreciation and amortization............................... 90,290 87,138 87,376
Deferred income taxes....................................... 1,409 3,625 (2,260)
Changes in assets and liabilities excluding effects of
acquisition and disposition of businesses:
Accounts receivable...................................... (6,632) (29,285) 14,827
Inventories.............................................. (5,556) (13,599) (21,493)
Accounts payable, accrued incentive pay and benefit plans,
and other accrued liabilities........................... 37,709 (5,102) 8,530
Accrued restructuring costs.............................. (10,317) (9,495) (16,541)
Other.................................................... (1,256) 501 (213)
- ----------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities.................. 167,874 81,039 114,756
- ----------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
Purchases of property....................................... (92,642) (88,289) (80,345)
Businesses or minority interest acquired.................... -- (8,780) (18,591)
Proceeds from sales of assets............................... 939 203 4,937
Proceeds from sale of business.............................. 19,130 -- --
- ----------------------------------------------------------------------------------------------------------------
Net cash used in investing activities...................... (72,573) (96,866) (93,999)
- ----------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Proceeds (repayment) of short-term borrowings, net.......... (50,320) 15,406 16,814
Proceeds from long-term debt................................ 1,896 49,005 8,793
Payment of long-term debt................................... (28,732) (29,678) (27,956)
Cash dividends paid......................................... (20,166) (20,149) (20,129)
- ----------------------------------------------------------------------------------------------------------------
Net cash provided (used) by financing activities........... (97,322) 14,584 (22,478)
- ----------------------------------------------------------------------------------------------------------------
DECREASE IN CASH AND CASH EQUIVALENTS............................. (2,021) (1,243) (1,721)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR.................... 2,790 4,033 5,754
- ----------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF YEAR................... $ 769 $ 2,790 $ 4,033
================================================================================================================
See Notes to Consolidated Financial Statements.
21
5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
PRINCIPLES OF CONSOLIDATION: The accompanying consolidated financial
statements include the accounts of Springs Industries, Inc. and its subsidiaries
(Springs). Intercompany balances and transactions are eliminated in
consolidation. Investments in 20 to 50 percent owned companies are accounted
for using the equity method of accounting.
REVENUE RECOGNITION: Revenue from product sales is recognized at the time
ownership of the goods transfers to the customer and the earnings process is
complete.
CASH EQUIVALENTS: Cash equivalents consist of liquid investments with original
maturities of three months or less when purchased.
ACCOUNTS RECEIVABLE: Springs has a diverse customer base across a variety of
industries. The Company performs ongoing credit evaluations of its customers'
financial condition and, generally, requires no collateral from its customers.
The reserve for doubtful accounts was approximately $7,067,000 and $6,235,000
in 1994 and 1993, respectively, which management believes is adequate to
provide for expected credit losses.
INVENTORIES: Inventories are summarized as follows (in thousands):
1994 1993
Standard cost (which approximates
average cost) or average cost:
Finished goods ............... $ 173,729 $ 180,989
In process ................... 166,347 165,190
Raw materials and supplies ... 56,553 50,824
- -----------------------------------------------------------
396,629 397,003
Less LIFO reserve................. (132,468) (129,161)
- -----------------------------------------------------------
Total ........................ $ 264,161 $ 267,842
===========================================================
Inventories are valued at the lower of cost or market. Cost is determined using
the last-in, first-out method (LIFO) for approximately 84 percent of
inventories and the average cost method for all other inventories. Average cost
approximates current cost.
DEPRECIATION: Depreciation is computed for financial reporting purposes on a
straight-line basis over the estimated useful lives of the related assets,
ranging from 20 to 40 years for buildings, 10 to 20 years for land
improvements, and 3 to 11 years for machinery, equipment, leasehold
improvements, etc.
INCOME TAXES: The provision for income taxes includes federal, state, and
foreign taxes currently payable and deferred taxes. Deferred taxes for 1994 and
1993 were determined using the liability approach as required by Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes." This
method considers future tax consequences associated with differences between
financial accounting and tax bases of assets and liabilities and gives
immediate effect to changes in income tax laws upon enactment. Deferred taxes
for 1992 were determined using the deferral method as required by Accounting
Principles Board Opinion No. 11.
INCOME (LOSS) PER SHARE: Per share amounts are based on the weighted average
number of shares of Class A and Class B common stock and common stock
equivalents outstanding. Certain common stock equivalents are not included in
the 1994 and 1993 calculations because they are antidilutive. Such average
shares totaled 17,793,000 in 1994, 17,825,000 in 1993, and 17,805,000 in 1992.
RECLASSIFICATION: Certain previously reported amounts have been reclassified
to conform with year-end 1994 presentations.
NOTE 2. ACQUISITIONS AND DIVESTITURES:
On June 24, 1994, the Company sold all of the stock of Clark-Schwebel
Distribution Corp., a subsidiary of Clark-Schwebel, Inc. In connection with
this sale, the Company received cash payments of $19.1 million. The gain on
this transaction is included in other (income) expense.
On March 25, 1993, Springs' subsidiary, Clark-Schwebel, Inc., contributed its
European fiberglass subsidiaries (net assets of $17.1 million) and $8.8 million
in cash to CS-Interglas A.G., of Ulm, Germany, in consideration for a minority
equity interest in CS-Interglas A.G. and a convertible debenture. No gain or
loss was recognized as a result of this transaction since it was accounted for
as a nonmonetary exchange. The earnings (losses) of the former European
subsidiaries were consolidated in the Company's financial statements until
March 25, 1993, at which time the Company removed the assets and liabilities of
the former subsidiaries from consolidation and began accounting for its
interest in CS-Interglas A.G. under the equity method of accounting.
In August and October of 1992, Springs purchased the marketing and distribution
operations of C.S. Brooks Canada Inc. and the Griffiths-Kerr division of
Finlayson Enterprises, Ltd., respectively, for $18.6 million. Both acquisitions
were accounted for using the purchase method of accounting, and accordingly,
purchase price was allocated to net assets based upon estimated fair values at
the acquisition dates. The Consolidated Statement of Operations includes
results of both from the dates of acquisition.
22
6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3. RESTRUCTURING PLAN:
During the third quarter of 1994, the Company completed its plan, announced in
1990, for the restructuring of certain finished fabrics operations. The Company
did not recognize in 1994 any gain or loss in connection with the completion of
this plan.
NOTE 4. INDUSTRY SEGMENT INFORMATION:
Springs operates in two industry segments: home furnishings and specialty
fabrics. The home furnishings segment manufactures, purchases for resale, and
markets home furnishing products including sheets, pillowcases, bedspreads,
comforters, curtains, towels, shower curtains, bath rugs, drapery hardware and
decorative window furnishings to all major channels of retail distribution. The
specialty fabrics segment manufactures, purchases for resale, and markets woven
and non-woven fabrics, including apparel fabrics, home sewing fabrics,
fiberglass fabrics, industrial fabrics, specialty and high performance fabrics,
and protective and fire retardant fabrics to manufacturers for use in a variety
of end products. Summarized segment information appears on page 18 and is an
integral part of the financial statements.
NOTE 5. LONG-TERM DEBT:
Long-term debt consists of (in thousands):
1994 1993
Commercial Paper, average interest rate 4.7% in 1994, 3.2% in 1993............... $ 79,812 $ 99,613
Revolving credit agreements, interest at 6.5% ................................... 20,000 --
Senior Notes payable in annual installments of $6,250 in years 1995
and 1996, $12,500 in years 1997 through 2001, and $6,250 in years
2002 through 2004, effective interest rate of 10.01%........................... 93,750 106,250
Notes payable in quarterly installments of $3,125 through January 1,
1996, then $2,732 on April 1, 1996, interest at a variable market rate,
8.5% at December 31, 1994...................................................... 18,357 32,292
Senior Note payable in annual installments of $5,000 in years 1997
through 2006, interest at 9.6%................................................. 50,000 50,000
Industrial Revenue Bond Obligations, payable in varying annual
amounts to 2019, interest at rates ranging from 2.7% to 8.3%................... 21,175 22,189
Other............................................................................ 3,608 3,195
- -------------------------------------------------------------------------------------------------------------------
Total.......................................................................... 286,702 313,539
Current maturities............................................................... (21,318) (20,511)
- -------------------------------------------------------------------------------------------------------------------
LONG-TERM DEBT................................................................. $265,384 $293,028
===================================================================================================================
The Company intends to maintain commercial paper borrowings on a long-term
basis. The Company's access to the commercial paper market is facilitated by
committed long-term revolving credit agreements provided by several banks,
totaling $100.0 million. These revolving credit agreements carry no specific
expiration dates but would terminate thirteen months after notice from banks.
Springs pays an annual commitment fee equal to 1/8 of 1 percent on the unused
portion of the revolving credit agreements.
Certain long-term debt agreements contain requirements concerning, among other
things, the maintenance of working capital and tangible net worth, limitations
on the incurrence of indebtedness, and restrictions on the payment of dividends
and redemption of stock. At December 31, 1994, retained earnings of
$214,861,000 were available for cash dividends and the redemption of Springs
stock.
Total annual maturities of long-term debt, excluding commercial paper will be:
1995 - $21,318,000; 1996 - $13,490,000; 1997 - $18,107,000; 1998 - $17,840,000;
1999 - $17,705,000 and varying amounts thereafter through 2019. Total interest
payments in 1994, 1993 and 1992 were approximately $29,837,000, $27,894,000 and
$30,789,000, respectively.
23
7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6. SHAREOWNERS' EQUITY:
Changes in shareowners' equity, exclusive of retained earnings, are (in
thousands):
- ------------------------------------------------------------------------------------------------------------------------------------
Class A Class B Class A
Common Stock Issued Common Stock Issued Stock Held in Treasury
------------------- ------------------- Additional ---------------------- Currency
Number Par Number Par Paid-In Number Translation
Of Shares Value Of Shares Value Capital Of Shares Cost Adjustment
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at December 28, 1991...... 9,735 $ 2,434 7,972 $ 1,993 $10,661 142 $ 3,053 $ 9,352
Exchange of Class B common stock
for Class A common stock....... 64 16 (64) (16) -- -- -- --
Shares awarded under various
employee plans................. 3 -- -- -- 226 (4) (99) --
Currency translation adjustment... -- -- -- -- -- -- -- (5,518)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at January 2, 1993........ 9,802 $ 2,450 7,908 $ 1,977 $10,887 138 $ 2,954 $ 3,834
Exchange of Class B common stock
for Class A common stock........ 55 14 (55) (14) -- -- -- --
Shares awarded under various
employee plans.................. 1 1 -- -- 257 (9) (169) --
Currency translation adjustment... -- -- -- -- -- -- -- 144
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at January 1, 1994........ 9,858 $ 2,465 7,853 $ 1,963 $11,144 129 $ 2,785 $ 3,978
Exchange of Class B common stock
for Class A common stock........ 23 5 (23) (5) -- -- -- --
Shares awarded under various
employee plans.................. 3 1 -- -- 269 (9) (183) --
Currency translation adjustment... -- -- -- -- -- -- -- (1,530)
- ------------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1994...... 9,884 $ 2,471 7,830 $ 1,958 $11,413 120 $ 2,602 $ 2,448
====================================================================================================================================
As of December 31, 1994, Springs had authorized 1,000,000 shares of $1.00 par
value, voting preferred stock, none of which was outstanding. Authorized common
stock consisted of 40,000,000 shares of $.25 par value Class A stock and
20,000,000 shares of $.25 par value Class B stock. Subject to certain
exceptions, holders of Class B stock are entitled to four votes per share on
matters brought before shareowners of the Company, while holders of Class A
stock are entitled to one vote per share. Holders of Class A stock are entitled
to cash dividends which are at least 10 percent greater than cash dividends
paid on Class B stock.
The Company has a stock option plan under which options to purchase shares of
common stock may be granted to certain key associates. The plan provides that
the option price shall not be less than the fair market value of the shares on
the date of grant and that no portion of the grant may be exercised beyond ten
years from that date. Subsequent to a waiting period, options become
exercisable ratably over years four through eight for the 1991 issue and years
three through five for the 1993 and 1994 issues. As of December 31, 1994,
66,000 shares are exercisable. The table below is a summary of changes in
common stock options:
Number Price
Of Shares Per Share
--------- ---------
Outstanding at December 28, 1991...... 380,000 $29
Granted............................... -- --
- -------------------------------------------------------------
Outstanding at January 2, 1993........ 380,000 29
Granted............................... 59,000 46.38
- -------------------------------------------------------------
Outstanding at January 1, 1994........ 439,000 29-46.38
Granted............................... 62,000 34.33
Cancelled............................. (129,000) 29-46.38
- -------------------------------------------------------------
Outstanding at December 31, 1994...... 372,000 $29-46.38
=============================================================
24
8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7. INCOME TAXES:
The following tables present the provision for income taxes before the
cumulative effect of adoption of SFAS Nos. 106 & 109, the principal items of
deferred income taxes at the end of 1994 and 1993, the principal components of
the deferred income tax provision for 1992, and a reconciliation of the
statutory U.S. income tax rate to the effective income tax rate. The Company
adopted Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting
for Income Taxes" as of the beginning of 1993, and the cumulative effect of
this change was reported in the 1993 Consolidated Statement of Operations.
Prior years' financial statements were not restated. The cumulative effect of
adoption was a charge against 1993 income of $20.9 million, or $1.17 per share.
During 1994 and 1993, deferred income taxes were provided for temporary
differences between amounts of assets and liabilities for financial reporting
purposes and such amounts as measured in accordance with tax laws. These
temporary differences were determined in accordance with SFAS No. 109 and are
more inclusive in nature than timing differences as determined under previously
applicable accounting principles. During 1992, deferred income taxes were
provided for timing differences in the recognition of revenue and expenses for
tax and financial statement purposes computed in accordance with Accounting
Principles Board Opinion No. 11.
INCOME TAX PROVISION BEFORE CUMULATIVE EFFECT
(in thousands):
1994 1993 1992
Current................... $ 43,076 $ 32,932 $ 37,725
- -------------------------------------------------------------------
Deferred.................. 1,409 3,625 (2,260)
- -------------------------------------------------------------------
Total tax provision
before cumulative
effect.............. $ 44,485 $ 36,557 $ 35,465
===================================================================
Temporary differences which give rise to deferred income taxes are as follows
(in thousands):
1994 1993
Employee benefit accruals......... $ 36,504 $ 36,534
Deferred compensation............. 25,662 24,032
Restructuring accruals............ -- 4,080
Equity investments................ 4,435 4,332
Accounts receivable reserves...... 4,090 4,306
Environmental accruals............ 4,279 4,203
Other items....................... 14,233 10,764
- --------------------------------------------------------------
Subtotal........................ 89,203 88,251
Less valuation allowance.......... (4,435) (4,332)
- --------------------------------------------------------------
Total deferred tax assets....... $ 84,768 $ 83,919
- --------------------------------------------------------------
Property.......................... $(73,845) $(71,813)
Equity investments................ (9,213) (8,523)
Intangibles....................... (3,554) (3,690)
Other items....................... (4,095) (3,241)
- --------------------------------------------------------------
Total deferred tax liabilities.. $(90,707) $(87,267)
- --------------------------------------------------------------
Net deferred tax liability........ $ (5,939) $ (3,348)
==============================================================
A deferred tax asset has been recorded relating to an equity investment, and a
valuation allowance has been recorded to the extent of such deferred tax asset.
Realization of this asset is contingent on the Company's ability to generate
future capital gains in an amount sufficient to utilize this tax asset.
DEFERRED INCOME TAX PROVISION (BENEFIT)
(in thousands):
1992
Depreciation....................................... $ 1,603
Restructuring costs................................ 2,611
Deferred compensation.............................. (1,864)
Employee benefit plans............................. 275
Inventories........................................ (190)
Other.............................................. (4,695)
- ---------------------------------------------------------------
Total deferred income
tax provision (benefit)........................ $(2,260)
===============================================================
RECONCILIATION TO EFFECTIVE TAX RATES:
1994 1993 1992
Provision at statutory
U.S. tax rate.............. 35.0% 35.0% 34.0%
Effective state income
tax rate................... 4.6 4.8 4.2
Foreign losses without
tax benefits............... 0.1 2.4 3.4
Amortization of acqui-
sition price not deduct-
ible for tax purposes...... 0.3 0.5 1.1
Other........................ 1.7 0.9 1.6
- --------------------------------------------------------------------
Total.................... 41.7% 43.6% 44.3%
====================================================================
Income before income taxes includes foreign losses of $295,000, $6,377,000 and
$8,449,000 in 1994, 1993 and 1992, respectively. The provision for income taxes
includes state income taxes of $7,711,000 in 1994, $6,225,000 in 1993, and
$5,127,000 in 1992. Springs made income tax payments of approximately
$32,907,000, $45,837,000 and $29,930,000 in 1994, 1993, and 1992, respectively.
25
9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8. EMPLOYEES' BENEFIT PLANS:
EMPLOYEES' PROFIT SHARING AND RETIREMENT PLANS
Substantially all associates of Springs are covered by defined contribution
plans or defined benefit plans. The Company makes contributions to defined
contribution plans which are computed as a percentage of each participant's
base pay. In addition, in the event that eligible participants contribute a
percentage of their compensation to defined contribution plans, the Company
matches a portion of their contributions. Company contributions to defined
benefit plans are made in accordance with ERISA, and benefits are generally
based upon years of service. Assets in defined benefit plans are invested in
money market and other fixed income securities, including United States
government obligations, and in diversified equity securities.
Defined contribution plan expense for 1994, 1993, and 1992 was $24,721,000,
$22,827,000 and $19,695,000, respectively. The net assets available for
benefits under defined contribution plans had a market value of $449,975,000 as
of December 31, 1994.
Defined benefit retirement plan expense was $1,703,000 in 1994, $1,486,000 in
1993 and $1,669,000 in 1992. The following assumptions and components were used
to develop the net pension expense:
1994 1993 1992
ASSUMPTIONS:
Discount rate for obligations................................... 7 3/4% 7% 8%
Discount rate for expenses...................................... 7% 8% 8%
Expected long-term rate of return on assets..................... 7 1/2% 7 1/2% 7 1/2%
COMPONENTS (in thousands):
Service cost.................................................... $ 824 $ 423 $ 649
Interest cost on Projected Benefit Obligations.................. 1,331 1,278 1,221
Actual return on assets......................................... 80 (255) (259)
Net amortization and deferral................................... (532) 40 58
- -------------------------------------------------------------------------------------------------------------
Pension expense, net............................................ $ 1,703 $ 1,486 $ 1,669
=============================================================================================================
The following table sets forth the funding status of Springs' defined benefit
pension plans (in thousands):
1994 1993
Accumulated Benefit Obligation:
Vested....................................................................... $(19,396) $(17,740)
Non-vested................................................................... (56) (18)
- -------------------------------------------------------------------------------------------------------------
Accumulated Benefit Obligation................................................. $(19,452) $(17,758)
=============================================================================================================
Projected Benefit Obligation................................................... $(19,452) $(17,758)
Plan assets at fair value...................................................... 6,532 3,908
- -------------------------------------------------------------------------------------------------------------
Projected Benefit Obligation in excess of plan assets.......................... (12,920) (13,850)
Unrecognized net loss and effects of changes in assumptions.................... 844 2,240
Additional minimum liability................................................... (1,699) (2,240)
- -------------------------------------------------------------------------------------------------------------
Accrued pension cost recognized in the balance sheet........................... $(13,775) $(13,850)
=============================================================================================================
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The Company sponsors a defined benefit postretirement medical plan which covers
substantially all salaried and nonsalaried associates. The plan provides
medical benefits and is contributory, with retiree contributions adjusted
periodically.
The Company adopted the provisions of Statement of Financial Accounting
Standards (SFAS) No. 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions," as of January 3, 1993. In applying this pronouncement, the
Company immediately recognized, as a change in accounting principle, the $82.8
million Accumulated Postretirement Benefit Obligation (APBO) as of the
beginning of fiscal 1993. On an after-tax basis, this charge was $51.6 million,
or $2.90 per share.
26
10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table sets forth the status of Springs' obligation under SFAS No.
106 at December 31, 1994 and January 1, 1994 (in thousands):
1994 1993
Accumulated Postretirement Benefit Obligation:
Retirees............................................................................... $(40,214) $(40,144)
Fully eligible active plan participants................................................ (3,943) (7,150)
Other active plan participants......................................................... (19,249) (20,497)
- ----------------------------------------------------------------------------------------------------------------------
Accumulated Postretirement Benefit Obligation.......................................... $(63,406) $(67,791)
- ----------------------------------------------------------------------------------------------------------------------
Unrecognized effects of changes resulting from experience different from that assumed.... (18,485) (14,901)
- ----------------------------------------------------------------------------------------------------------------------
Accrued Postretirement Benefit Obligation recognized in the balance sheet................ $(81,891) $(82,692)
======================================================================================================================
The actuarial gains at December 31, 1994 and January 1, 1994 primarily
represent lower health care cost inflation than assumed and applicable changes
in the discount rates. Net postretirement benefit cost consisted of the
following components (in thousands):
1994 1993
Service cost - benefits earned......... $ 1,374 $ 1,132
Interest cost on Accumulated
Postretirement Benefit Obligation.... 4,577 6,320
Amortization of actuarial gain......... (477) --
- -----------------------------------------------------------------------
Net postretirement benefit cost........ $ 5,474 $ 7,452
======================================================================
The actuarial valuation of the APBO for this plan includes provisions for
anticipated future cost-sharing changes that are consistent with the Company's
expressed intent to adjust future retiree contributions. The Company continues
to fund this plan on a "pay-as-you-go" basis. In 1992, retiree "pay-as-you-go"
expense was $7,712,000.
For measurement purposes, an 11 percent annual rate of increase in the per
capita cost of covered health care benefits was assumed for 1995; this 11
percent rate is assumed to decrease gradually to six percent until the year
2006 and remain at that level thereafter. If the health care cost trend rate
were increased by one percent, the APBO would increase by 10 percent and the
aggregate of the service and interest cost components of net postretirement
benefit cost would increase by 12 percent. The discount rates used in
determining the APBO at December 31, 1994 and January 1, 1994 were 7 3/4 percent
and 7 percent, respectively.
NOTE 9. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS:
The Company has estimated the fair value amounts of financial instruments as
required by SFAS No. 107, "Disclosures about Fair Value of Financial
Instruments," using available market information and appropriate valuation
methodologies. However, considerable judgment is required in interpreting
market data to develop the estimates of fair value. Accordingly, the estimates
presented herein are not necessarily indicative of the amounts that the Company
would realize in a current market exchange.
The carrying amounts of cash and cash equivalents, accounts receivable, other
assets, accounts payable, and short-term borrowings are reasonable estimates
of their fair value at December 31, 1994 and January 1, 1994.
Long-term debt including commercial paper of $287 million had an estimated fair
value at December 31, 1994 of $287 million. Long-term debt including commercial
paper of $314 million had an estimated fair value at January 1, 1994 of $340
million. Fair value was estimated using interest rates that were available to
the Company at those dates for issuance of debt with similar terms and
remaining maturities.
NOTE 10. OTHER MATTERS:
TRANSACTIONS WITH RELATED PARTIES: Springs transacts business with companies
which are controlled by two members of the Board of Directors, their family and
related entities. In the opinion of Springs' management, the cost of services
provided by these companies is not material and the services have been obtained
at competitive prices or rates. Management reviews its conclusions with the
Audit Committee of the Board of Directors.
CONTINGENCIES: 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
27
11
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 potential
responsible parties; and the extent, if any, to which such costs are
recoverable from insurance or other parties. The Company has accrued a
liability of approximately $11 million, which represents management's best
estimate of Springs' probable liability concerning all known environmental
matters. This accrual has not been reduced by any potential insurance recovery
the Company may have regarding environmental matters. The only major component
of the Company's accrued liability for environmental matters involves a site
listed on the United States Environmental Protection Agency's ("EPA") National
Priority List ("NPL") where Springs is the sole responsible party. Springs, the
United States Environmental Protection Agency 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 EPA. The remedial design
for groundwater cleanup is nearing completion. Management believes the $11
million will be paid out over the next eight to ten years.
Springs is also involved in various other legal proceedings and claims
incidental to its business. Springs is defending its position 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.
SUBSEQUENT EVENT: Subsequent to the Company's year-end, a definitive merger
agreement was signed with Dundee Mills, Incorporated regarding the Company's
acquisition of Dundee. Dundee shareholders would receive a combination of
Springs Class A common stock and cash having an aggregate value of
approximately $118 million in exchange for all of the outstanding shares of
Dundee common stock. Dundee is a significant manufacturer of towels sold to
retail and institutional markets, as well as textile products for infants.
Dundee operates 14 facilities, primarily in Georgia. Consummation of the
acquisition is subject to a number of conditions including approval by Dundee
shareholders and clearance by the appropriate governmental agencies.
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of Springs Industries, Inc.
We have audited the accompanying consolidated balance sheet of Springs
Industries, Inc. as of December 31, 1994 and January 1, 1994, and the related
consolidated statements of operations and retained earnings and of cash flows
for each of the three fiscal years in the period ended December 31, 1994. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Springs Industries, Inc. at
December 31, 1994 and January 1, 1994, and the results of its operations and
its cash flows for each of the three fiscal years in the period ended December
31, 1994 in conformity with generally accepted accounting principles.
As discussed in Notes 7 and 8 to the financial statements, in 1993 the Company
changed its method of accounting for income taxes and its method of accounting
for postretirement benefits other than pensions to conform with Statements of
Financial Accounting Standards Nos. 109 and 106, respectively.
Deloitte & Touche LLP
- ---------------------
Deloitte & Touche LLP
Charlotte, North Carolina
January 25, 1995
28
12
MANAGEMENT'S REPORT ON FINANCIAL STATEMENTS
The management of the Company is responsible for the preparation of the
consolidated financial statements and related financial information included in
this annual report. The statements, which include amounts based on judgments of
management, have been prepared in conformity with generally accepted accounting
principles consistently applied.
In fulfilling the Company's responsibilities for maintaining the integrity of
financial information and for safeguarding assets, Springs relies upon internal
control systems designed to provide reasonable assurance that the Company's
records properly reflect business transactions and that these transactions are
in accordance with management's authorization. There are limits inherent in all
systems of internal accounting controls based on the recognition that the cost
of such systems should not exceed the benefits to be derived. Springs believes
its systems provide this appropriate balance. An internal audit staff tests,
evaluates, and reports on the adequacy and effectiveness of internal control
systems and procedures.
Management also recognizes its responsibility for conducting the Company's
affairs in an ethical and socially responsible manner. Springs has communicated
to its associates its intentions to maintain high standards of ethical business
conduct in all of its activities. Ongoing review programs are carried out to
monitor compliance with this policy.
The Board of Directors pursues its oversight responsibility for the Company's
systems of internal control and financial statements through its Audit
Committee, which is composed solely of outside directors. The Audit Committee
meets regularly with Springs' management, internal auditors, and independent
auditors. Both the independent auditors and internal auditors have access to
and meet privately with this Committee without the presence of management.
The Company's independent auditors, Deloitte & Touche, rely on the Company's
internal control structure to the extent they deem appropriate and perform
tests and other procedures they deem necessary to express an opinion on the
fairness of the presentation of the financial statements, which management
believes provides an objective assessment of the degree to which management
meets its responsibility for fairness of financial reporting.
James F. Zahrn
- --------------
James F. Zahrn
Vice President-Finance and Treasurer
29
13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION
A ten-year summary of Selected Financial Data appears on pages 32 through 33. A
three-year analysis of industry segment information appears on page 18.
RESULTS OF OPERATIONS
1994 Compared with 1993
SALES
Record annual sales in 1994 of $2.069 billion exceeded the previous year's
record mark of $2.023 billion by two percent. Increased home furnishings sales
were partially offset by a decline in specialty fabrics sales volume. Home
furnishings sales improved five percent due to increased shipments in bedding,
bath and window fashions products. The sales improvement in bedding products
was aided by a price increase which took effect during the third quarter of the
year.
The Company's specialty fabrics segment reported sales nearly four percent
lower, primarily from the sale of Clark-Schwebel Distribution Corp. in June
1994. Excluding the effects of this sale, specialty fabrics sales would have
increased nearly four percent over the prior year due to increased shipments in
industrial fabrics markets.
EARNINGS
Net income for 1994 increased to $62.2 million or $3.50 per share, a 32 percent
improvement over 1993 net income of $47.3 million or $2.65 per share. The prior
year figures are before one-time charges relating to the first quarter 1993
adoption of two new financial accounting standards.
SEGMENT SALES SEGMENT OPERATING
(In millions) INCOME (In millions)
[Bar Graph] [Bar Graph]
Bar graph showing the sales Bar graph showing the
generated by each segment operating income
for 1993 and 1994. generated by each
segment for 1993 and
1994.
/ / Specialty Fabrics / / Home Furnishings
Operating income of $135.8 million in 1994 was eleven percent higher than 1993.
The home furnishings segment reported operating income of $97.5 million, only
slightly below the prior year level of $99.8 million. The home furnishings
segment results reflect continued strong revenue performance. Additionally,
during the second half, the segment realized increasing benefits from cost
reductions, improved pricing and marketing initiatives. However, these benefits
were offset by margin pressures in the segment's bedding divisions during the
first half of the year.
Despite lower sales, the specialty fabrics segment reported operating income of
$38.3 million compared to $22.1 million in 1993. The improvement resulted from
a resurgent industrial fabrics market and strong earnings improvements in our
restructured finished fabrics businesses.
Other (income) expense benefitted from significantly reduced foreign equity
investment losses and the gain on the sale of Clark-Schwebel Distribution Corp.
Higher domestic income combined with a reduction in foreign equity investment
losses resulted in a decrease in the effective tax rate to 41.7 percent in 1994
compared to 43.6 percent in 1993.
1993 Compared with 1992
SALES
Annual sales in 1993 exceeded $2 billion for the first time, reflecting a two
percent increase over sales reported in 1992. Increased home furnishings sales
were partially offset by a decline in sales volume in specialty fabrics. Home
furnishings sales improved eight percent due in part to including a full year
of the Company's Canadian operations in 1993. Without the effect of the
Canadian operations, home furnishings sales would have increased four percent
as a result of increased promotional programs and an improving retail economy.
The Company's specialty fabrics segment, a portion of which has undergone a
planned downsizing since 1988, reported sales nine percent lower. The decrease
resulted from the transfer of our European subsidiaries to CS-Interglas A.G. in
March 1993 and a softer retail market for apparel and piece goods which offset
improved volume in the U.S. fiberglass business. Without the effect of the
transfer of European subsidiaries, specialty fabrics sales would have declined
five percent.
30
14
MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION
EARNINGS
Before one-time charges relating to the first quarter adoption of two new
financial accounting standards, net income for 1993 increased to $47.3 million
or $2.65 per share, a six percent improvement over 1992 net income of $44.5
million or $2.50 per share. Including these one-time charges, a net loss of
$25.3 million or $1.42 per share was reported in 1993.
Operating income of $121.9 million in 1993 was eight percent higher than 1992.
The home furnishings segment reported operating income of $99.8 million, only
slightly below the record level of $100.5 million in 1992. The home furnishings
segment results reflected continued strong revenue performance as well as cost
reductions resulting from modernization. However, this benefit was offset by
lower margins due to increased promotional sales.
Despite lower sales, the specialty fabrics segment reported operating income of
$22.1 million compared to $12.7 million in 1992. The improvement resulted from
continued cost reductions from restructuring and higher sales volume in the
fiberglass businesses. This segment's profit increase was also affected by the
transfer of the European fiberglass businesses, in March of 1993, to
CS-Interglas A.G. Without the effects of the transfer of the European
businesses, the specialty fabrics segment would have reported a 17 percent
increase in operating income in 1993.
Net income for 1993 was unfavorably impacted by the newly enacted federal
income tax rate increase as well as foreign losses which did not give rise to a
tax benefit. However, foreign losses in 1993 were less than in 1992 resulting
in a decrease in the effective tax rate to 43.6 percent in 1993 compared to
44.3 percent in 1992.
INFLATION AND CHANGING PRICES
The replacement cost of property, plant and equipment is generally greater than
the historical cost shown on the Balance Sheet due to inflation that has
occurred since the property was placed into service.
Springs uses the LIFO method of accounting for 84 percent of its inventories.
Under this method, the cost of goods sold reported in the Statement of
Operations approximates current costs.
CAPITAL RESOURCES AND LIQUIDITY
The Company reduced total debt during 1994 by $77 million. Strong cash flow
from operations and the sale of Clark-Schwebel Distribution were the primary
factors contributing to this debt reduction. The Company's overall cash needs
for 1994 were provided from operations, commercial paper, and short-term bank
borrowings. Expenditures for property, plant, and equipment totalling $92.6
million were made in 1994. Capital expenditures for 1995 are expected to
approximate 1994 levels. Springs' expected cash needs in 1995 are expected to
be provided from operations, commercial paper, and short-term bank borrowings.
TOTAL DEBT (In millions)
[Bar Graph]
Bar graph showing the Company's total debt in 1993 and 1994.
In addition, the Company has signed a definitive merger agreement with Dundee
Mills, Incorporated. Dundee shareholders would receive a combination of Springs
stock and cash having an aggregate value of approximately $118 million in
exchange for all of the outstanding shares of Dundee common stock. Funding for
this transaction will be provided by additional long-term borrowings and
issuance of new Class A shares.
Dividends represented 33 percent of net income. Dividends declared in 1994 were
$11.8 million, or $1.20 per share, on Class A shares and $8.5 million, or $1.08
per share, on Class B shares.
OTHER
During the third quarter of 1994, the Company substantially completed its plan,
announced in 1990, for the restructuring of certain finished fabrics
operations. The Company did not recognize in 1994 any gain or loss in
connection with the completion of this plan.
Subsequent to the Company's year-end, a definitive merger agreement was signed
with Dundee Mills, Incorporated regarding the company's acquisition of Dundee.
Dundee is a significant manufacturer of towels sold to retail and institutional
markets, as well as textile products for infants. Dundee operates 14
facilities, primarily in Georgia. Consummation of the acquisition is subject to
a number of conditions including approval by Dundee shareholders and clearance
by the appropriate governmental agencies.
31
15
SELECTED FINANCIAL DATA
Springs Industries, Inc.
1994 1993 1992(c)
SUMMARY OF OPERATIONS (in millions):
Net sales . . . . . . . . . . . . . $2,068.9 $ 2,022.8 $ 1,975.7
Income (loss) before income
taxes . . . . . . . . . . . . . . . 106.7 83.8 80.0
Income taxes. . . . . . . . . . . . 44.5 36.6 35.5
Net income (loss) . . . . . . . . . 62.2 (25.3)(h) 44.5
Operating cash flow(d). . . . . . . 226.3 201.2 198.8
Class A cash dividends
declared. . . . . . . . . . . . . 11.8 11.6 11.5
Class B cash dividends
declared . . . . . . . . . . . . 8.5 8.5 8.6
- -----------------------------------------------------------------------------------------------------------
PER SHARE OF COMMON STOCK:
Net income (loss) . . . . . . . . . 3.50 (1.42)(h) 2.50
Class A cash dividends
declared . . . . . . . . . . . . 1.20 1.20 1.20
Class B cash dividends
declared . . . . . . . . . . . . 1.08 1.08 1.08
Shareowners' equity . . . . . . . . 33.20 30.90 33.47
Class A stock price range:
High . . . . . . . . . . . . . . 41 49 43 7/8
Low . . . . . . . . . . . . . . 29 1/4 33 1/2 30 1/2
- -----------------------------------------------------------------------------------------------------------
STATISTICAL DATA:
Net income (loss)
to net sales. . . . . . . . . . . 3.0% (1.3)% 2.3%
Net income (loss)
to average shareowners'
equity. . . . . . . . . . . . . . 11.2% (4.7)% 7.7%
Operating return
on assets employed (e). . . . . . 10.4% 8.8% 8.7%
Inventory turnover (f) . . . . . . 5.8 5.6 6.0
Accounts receivable
turnover (g) . . . . . . . . . . 6.5 6.5 6.5
Net sales divided by
average assets. . . . . . . . . . 1.6 1.6 1.6
Current ratio . . . . . . . . . . . 2.5 2.3 2.2
Capital expenditures
(in millions) . . . . . . . . . . $ 92.6 $ 88.3 $ 80.3
Depreciation
(in millions) . . . . . . . . . . $ 79.7 $ 78.1 $ 77.7
Approximate number
of shareowners . . . . . . . . . 3,200 3,200 3,300
Average number of
associates . . . . . . . . . . . 20,300 20,300 20,900
- -----------------------------------------------------------------------------------------------------------
SELECTED BALANCE SHEET DATA (in millions):
Working capital . . . . . . . . . . $ 373.0 $ 353.5 $ 328.2
Property:
Cost . . . . . . . . . . . . . . 1,253.1 1,195.8 1,168.4
Accumulated. . . . . . . . . . .
depreciation . . . . . . . . . (697.8) (645.9) (609.1)
Net . . . . . . . . . . . . . . 555.3 549.9 559.3
Total assets . . . . . . . . . . . 1,289.0 1,292.1 1,250.3
Long-term debt . . . . . . . . . . 265.4 293.0 273.6
Shareowners' equity . . . . . . . . 584.1 543.2 588.1
- -----------------------------------------------------------------------------------------------------------
(a) Includes a $70.0 million charge ($43.9 million after tax, or $2.46 per
share) for restructuring.
(b) Includes an $18.0 million charge ($11.2 million after tax or $.63 per
share) for restructuring.
(c) Fifty-three weeks.
(d) Pretax income plus restructuring charge, depreciation, amortization, and
interest expense.
(e) Pretax income before restructuring charge and interest expense divided by
average of month-end total assets used in operations.
(f) Cost of goods sold divided by average of month-end inventories.
(g) Net sales divided by average of month-end receivables.
(h) Includes a charge of $(72.5) million, net of income taxes, or $(4.07) per
share for cumulative effect of adoption of SFAS Nos. 106 & 109.
32
16
SELECTED FINANCIAL DATA
Springs Industries, Inc.
1991 1990 1989 1988 1987 1986 1985(c)
SUMMARY OF OPERATIONS
(in millions):
Net sales . . . . . . . . . . $ 1,890.4 $1,878.0 $ 1,909.3 $ 1,824.8 $ 1,661.1 $ 1,505.0 $ 1,013.5
Income (loss) before income
taxes . . . . . . . . . . . . 49.7 (7.1)(a) 100.7 85.1(b) 101.5 58.8 20.6
Income taxes. . . . . . . . . 22.6 (.3) 35.8 32.3 45.8 26.2 7.3
Net income (loss) . . . . . . 27.1 (6.8)(a) 64.9 52.8(b) 55.7 32.6 13.3
Operating cash flow(d). . . . 167.9 174.9 204.0 195.1 186.6 144.6 67.3
Class A cash dividends
declared. . . . . . . . . . 11.4 11.6 11.5 14.7 14.5 13.5 13.4
Class B cash dividends
declared . . . . . . . . . 8.7 8.7 8.7 2.8 -- -- --
- -----------------------------------------------------------------------------------------------------------------------
PER SHARE OF COMMON STOCK:
Net income (loss) . . . . . . 1.53 (.39)(a) 3.64 2.98(b) 3.13 1.83 .75
Class A cash dividends
declared . . . . . . . . . 1.20 1.20 1.20 1.01 .82 .76 .76
Class B cash dividends
declared . . . . . . . . . 1.08 1.08 1.08 .27 -- -- --
Shareowners' equity . . . . . 32.39 32.05 33.08 30.67 28.64 26.24 25.03
Class A stock price range:
High . . . . . . . . . . . 36 1/4 39 1/2 45 1/4 38 3/4 38 1/4 28 7/16 23
Low . . . . . . . . . . . 21 1/4 16 7/8 30 1/2 27 20 3/4 20 1/2 15 5/8
- -----------------------------------------------------------------------------------------------------------------------
STATISTICAL DATA:
Net income (loss)
to net sales. . . . . . . . 1.4% (0.4)%(a) 3.4% 2.9%(b) 3.4% 2.2% 1.3%
Net income (loss)
to average shareowners'
equity. . . . . . . . . . . 4.9% (1.2)%(a) 11.6% 10.2%(b) 11.5% 7.3% 3.0%
Operating return on assets
employed (e). . . . . . . . 6.6% 7.7% 11.2% 12.0% 12.3% 8.8% 4.4%
Inventory turnover (f) . . . 6.0 5.6 5.8 6.2 5.8 5.0 5.7
Accounts receivable
turnover (g) . . . . . . . 6.3 6.2 6.4 6.4 6.5 6.3 6.2
Net sales divided by
average assets. . . . . . . 1.5 1.6 1.7 1.7 1.6 1.5 1.5
Current ratio . . . . . . . . 2.2 2.5 2.4 2.7 3.0 3.3 3.1
Capital expenditures
(in millions) . . . . . . . $ 115.9 $ 117.8 $ 108.3 $ 77.1 $ 69.9 $ 57.0 $ 37.4
Depreciation
(in millions) . . . . . . . $ 75.2 $ 72.6 $ 67.5 $ 62.1 $ 57.8 $ 55.6 $ 37.6
Approximate number
of shareowners . . . . . . 3,500 3,400 3,500 3,700 3,400 3,300 3,400
Average number of
associates . . . . . . . . 21,700 23,200 24,100 23,400 23,100 23,500 17,000
- -----------------------------------------------------------------------------------------------------------------------
SELECTED BALANCE SHEET D
Working capital . . . . . . . $ 329.7 $ 356.5 $ 354.9 $ 389.8 $ 428.1 $ 402.2 $ 381.1
Property:
Cost . . . . . . . . . . . 1,123.6 1,087.9 978.0 872.5 803.6 749.3 710.3
Accumulated. . . . . . . .
depreciation . . . . . . (551.5) (563.7) (503.0) (448.0) (410.5) (366.0) (324.6)
Net . . . . . . . . . . . 572.1 524.2 475.0 424.5 393.1 383.3 385.7
Total assets . . . . . . . . 1,251.3 1,201.1 1,188.4 1,118.3 1,083.7 1,010.4 1,013.1
Long-term debt . . . . . . . 287.8 260.4 227.5 238.5 256.8 271.0 308.1
Shareowners' equity . . . . . 568.9 560.9 585.1 541.6 505.0 464.6 442.2
- -----------------------------------------------------------------------------------------------------------------------
Note: Selected Financial Data includes M. Lowenstein Corporation, Uniglass,
Andre Richard, Carey-McFall, C. S. Brooks, C. S. Brooks Canada, and
Griffiths-Kerr from their dates of acquisition in November 1985,
February 1988, March 1988, March 1989, April 1991, August 1992, and
October 1992, respectively. Selected Financial Data also includes
Clark-Schwebel Distribution Corp. until the date of its sale in June
1994.
33
17
QUARTERLY FINANCIAL DATA (UNAUDITED)
(In millions except per share data)
1994 1993
QUARTER 1ST 2ND 3RD 4TH YEAR 1ST 2ND 3RD 4TH YEAR
Net sales. . . . . . . . $485.2 $515.3 $535.3 $533.1 $2,068.9 $501.7 $483.9 $514.5 $522.7 $2,022.8
Gross profit . . . . . . 93.1 102.4 117.5 123.4 436.4 96.9 94.0 103.7 108.8 403.4
Income before
cumulative effect. . . 5.8 13.1 19.6 23.7 62.2 9.1 8.9 13.7 15.5 47.3
Cumulative effect. . . . -- -- -- -- -- (72.5)(a) -- -- -- (72.5)(a)
- ----------------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS). . . . $ 5.8 $ 13.1 $ 19.6 $ 23.7 $ 62.2 $(63.4) $ 8.9 $13.7 $15.5 $ (25.3)
============================================================================================================================
PER SHARE:
Income before
cumulative effect . . $ .33 $ .73 $ 1.10 $ 1.34 $ 3.50 $ .51 $ .50 $ .77 $ .87 $ 2.65
Cumulative effect . . . -- -- -- -- -- (4.07)(a) -- -- -- (4.07)(a)
- ----------------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS). . . . $ .33 $ .73 $ 1.10 $ 1.34 $ 3.50 $(3.56) $ .50 $ .77 $ .87 $ (1.42)
============================================================================================================================
(a) Cumulative effect of one-time charges for adoption of SFAS Nos. 106 and 109.
DIVIDENDS AND PRICE RANGE OF COMMON STOCK:
1994 1993
QUARTER 1ST 2ND 3RD 4TH YEAR 1ST 2ND 3RD 4TH YEAR
Per Share:
Class A dividends . . . . .30 .30 .30 .30 1.20 .30 .30 .30 .30 1.20
Class B dividends . . . . .27 .27 .27 .27 1.08 .27 .27 .27 .27 1.08
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Common stock prices:
High . . . . . . . . . 39 5/8 35 1/8 37 7/8 41 41 45 7/8 49 37 3/4 42 1/4 49
Low . . . . . . . . . 33 3/8 29 1/4 29 3/4 34 1/8 29 1/4 35 3/4 33 1/2 34 5/8 34 3/4 33 1/2
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PRICE RANGE OF COMMON STOCK QUARTERLY INCOME COMPARISON
(by quarter) (by quarter)
[Line Graph] [Bar Graph]
Line graph showing the high and low Bar graph showing a quarterly
price of the Company's common stock comparison of earnings per
by quarter for 1993 and 1994. share for 1993 and 1994.
* Before cumulative effect of SFAS Nos. 106 & 109.
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