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FOR IMMEDIATE RELEASE April 17, 1996
FORT MILL, S.C. -- Springs Industries, Inc. today reported higher
sales and earnings for the first quarter of 1996 and completed the $193 million
sale of its Clark-Schwebel industrial fabrics business.
Net sales for the first quarter were a record $583.5 million, up
almost 21 percent from the first quarter of 1995. Net income for the quarter
was $12.3 million, a 25 percent increase from last year's $9.9 million.
Earnings per share rose to $0.60 from $0.55 a year ago when 2.6 million fewer
shares were outstanding.
Walter Y. Elisha, Springs' chairman and chief executive officer, said,
"We are pleased to report stronger results for the first three months of this
year and are especially encouraged by the strengthening during March of our
principal markets. Even when one excludes the contribution of three home
furnishings businesses acquired after March of last year, our sales grew by
approximately 4 percent."
Consolidated operating income advanced to $27.1 million, up 17 percent
from a year ago. The improvement came on the strength of specialty fabrics
sales and earnings as the home furnishings segment encountered a sluggish
retail market at the onset of the quarter. Sales of the home furnishings
segment were up 25 percent from last year, aided by three 1995 acquisitions.
Without the acquisitions, home furnishings sales would have been about the same
as a year ago. The home furnishings segment's profit from operations declined
somewhat from 1995 due to the mix of sales in the first three months of 1996.
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The specialty fabrics segment reported sales 9 percent higher than
last year's, as both industrial fabrics and finished fabrics achieved volume
growth. Stronger demand for electronic fiberglass fabrics and for finished
fabrics resulted in an improvement over last year's specialty fabrics operating
profit.
Elisha added, "We encountered sluggish but gradually improving retail
market conditions during the quarter. Efforts to reduce costs and improve
service added to our earnings. As 1996 progresses, these efforts will
continue."
Separately, Springs completed today the sale of Clark-Schwebel, Inc.,
its woven fiberglass subsidiary, to an investor group led by Vestar Equity
Partners, L.P. which elected to pay in cash the full purchase price of
approximately $193 million.
Springs expects to report for the second quarter a gain on the sale of
Clark-Schwebel of approximately $50 million, net of taxes. During the first
quarter of 1996, Clark-Schwebel contributed about 10 percent of Springs' sales
of $583.5 million and had record earnings representing about 35 percent of
Springs' $28 million of earnings before interest expense and taxes. During the
five years ended in 1995, Clark-Schwebel's average contribution was 13 percent
of Springs' sales and 9 percent of its earnings before interest expense and
taxes.
In announcing the completion of the transaction, Elisha said, "The
sale reflects our strategic objective to commit our primary resources to
products for the consumer, in which we are and have been for many years an
acknowledged leader. We believe the sale will allow both Springs and
Clark-Schwebel to build greater shareholder value over time than would
otherwise have been the case."
Springs Industries is a major manufacturer and marketer of home
furnishings and specialty fabrics with headquarters in Fort Mill, S.C. The
company operates facilities in ten U.S. states and owns marketing and
distribution subsidiaries in Canada and Mexico.
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SPRINGS INDUSTRIES, INC.
Consolidated Statements of Operations
and Retained Earnings
(In thousands except per share data)
(Unaudited)
THIRTEEN WEEKS ENDED
----------------------------
MARCH 30, APRIL 1,
1996 1995
----------- -----------
OPERATIONS
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 583,493 $ 483,136
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . 477,755 396,028
Selling, general and administrative expenses . . . . . . . . . . . . . . . 78,652 64,010
---------- ----------
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,086 23,098
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,834 7,252
Other (income) expense . . . . . . . . . . . . . . . . . . . . . . . . . . (939) (835)
---------- ----------
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . 20,191 16,681
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,885 6,813
---------- ----------
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,306 $ 9,868
========== ==========
Per share:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .60 $ .55
========== ==========
Cash dividends declared:
Class A shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .33 $ .30
========== ==========
Class B shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .30 $ .27
========== ==========
Weighted average shares of common stock . . . . . . . . . . . . . . . . . . . 20,389 17,807
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RETAINED EARNINGS
Retained earnings at beginning of period . . . . . . . . . . . . . . . . . . $ 616,347 $ 568,403
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,306 9,868
Cash dividends declared . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,417) (5,046)
---------- ----------
Retained earnings at end of period . . . . . . . . . . . . . . . . . . . . . $ 622,236 $ 573,225
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SPRINGS INDUSTRIES, INC.
Condensed Consolidated Balance Sheet
(In thousands except share data)
(Unaudited)
MARCH 30, APRIL 1,
1996 1995
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,152 $ 1,142
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 368,850 300,175
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393,874 299,229
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,156 40,169
---------- ----------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 793,032 640,715
---------- ----------
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . 1,392,834 1,271,382
Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . (784,287) (717,598)
---------- ----------
Property, plant, and equipment, net . . . . . . . . . . . . . . . . . . . . 608,547 553,784
---------- ----------
Other assets and deferred charges . . . . . . . . . . . . . . . . . . . . . . . 141,909 119,775
---------- ----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,543,488 $1,314,274
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LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities:
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 55,500 $ 55,600
Current maturities of long-term debt . . . . . . . . . . . . . . . . . . . . 7,852 21,391
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86,577 76,720
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 120,146 115,975
---------- ----------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 270,075 269,686
---------- ----------
Noncurrent liabilities:
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329,021 261,786
Deferred compensation and benefit plans . . . . . . . . . . . . . . . . . . . 156,028 141,856
Deferred income taxes and other deferred credits . . . . . . . . . . . . . . 47,728 50,841
---------- ----------
Total noncurrent liabilities . . . . . . . . . . . . . . . . . . . . . . . 532,777 454,483
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Shareowners' equity:
Class A common stock- $.25 par value (12,718,922 and
9,888,859 shares issued in 1996 and 1995 respectively) . . . . . . . . . . 3,180 2,472
Class B common stock- $.25 par value (7,529,579 and
7,830,375 shares issued in 1996 and 1995, respectively) . . . . . . . . . . 1,882 1,958
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . 109,972 11,657
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 622,236 573,225
Cost of Class A shares in treasury (March 30, 1996 - 108,055
shares; April 1, 1995 - 111,448 shares) . . . . . . . . . . . . . . . . . . (2,403) (2,467)
Currency translation adjustment and other . . . . . . . . . . . . . . . . . . 5,769 3,260
---------- ----------
Shareowners' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 740,636 590,105
---------- ----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,543,488 $1,314,274
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