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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended January 2, 1999
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission File No. 1-5315
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 29715
FORT MILL, SOUTH CAROLINA (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code:
(803) 547-1500
Securities registered pursuant to Section 12(b) of the Act
Name of each exchange
Title of each class on which registered
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Class A Common Stock; $.25 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act
None
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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 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 [ ]
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ( )
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Aggregate market value of Springs Industries, Inc. Common Stock, excluding
treasury shares, held by nonaffiliates as of March 26, 1999, was $308,828,204.
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As of March 26, 1999, there were 10,636,334 shares of Class A Common Stock and
7,196,864 shares of Class B Common Stock of Springs Industries, Inc.
outstanding.
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DOCUMENTS INCORPORATED BY REFERENCE
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Specified Portions of Annual Report to Security Holders for Fiscal Year Ended
January 2, 1999 (Parts I & II)
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Specified Portions of Proxy Statement to Security Holders dated March 3, 1999
(Parts III & IV)
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC
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FORM 10-K ANNUAL REPORT
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SPRINGS INDUSTRIES, INC.
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* * * * * *
TABLE OF CONTENTS TO FORM 10-K
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PART I
ITEM
1. BUSINESS
2. PROPERTIES
3. LEGAL PROCEEDINGS
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
PART II
5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
6. SELECTED FINANCIAL DATA
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS
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PART II
ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
PART III
10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
11. EXECUTIVE COMPENSATION
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
PART IV
14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
SIGNATURES
EXHIBIT INDEX
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC
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FORM 10-K ANNUAL REPORT
SPRINGS INDUSTRIES, INC.
PART I
ITEM 1. BUSINESS
Springs Industries, Inc., a corporation organized under the laws of the
State of South Carolina, began its operations in 1888. Springs' principal
executive offices are located at 205 North White Street, Fort Mill, South
Carolina 29715 (telephone number: 803/547-1500). The term "Springs" or "the
Company" as used herein means Springs Industries, Inc., and its subsidiaries
unless clearly indicated otherwise.
The Company's operations are engaged principally, and, in recent years,
increasingly, in the manufacturing, marketing and sale of packaged textile and
nontextile home furnishing products, the business of its home furnishings
segment. The balance of the Company's operations are engaged in the
manufacturing and marketing of printed and dyed fabrics sold to retail stores
and manufacturers, the business of its specialty fabrics segment. The operations
of these segments are conducted by various divisions and subsidiaries.
Through both internal development and acquisitions of complementary
businesses, Springs has emerged as one of the most significant manufacturers and
marketers of home furnishings in the United States. Among the factors
contributing to Springs' industry position are its highly automated
manufacturing facilities, its well-known brands, and its commitment to offer a
wide array of home furnishings in coordinating fashions and designs.
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Home furnishings is the larger segment of Springs' business, with sales
of $1.866 billion in 1998 and operating income (before interest and taxes) of
$69.7 million. Before unusual items, this segment's operating income was $84.4
million. (For details on the unusual items, see footnote 4 on page 13 of the
Company's Annual Report to Shareowners (the "Annual Report") under the caption
"Reportable Segment Information," which is incorporated by reference.) The home
furnishings segment manufactures, purchases for resale and markets home
furnishing products, including sheets, pillowcases, bedspreads, comforters,
infant and toddler bedding, towels, shower curtains, bath and accent rugs, other
bath fashion accessories, drapery hardware and hard and soft decorative window
fashions.
Springs' home furnishing products are sold primarily through its own
sales force to retailers and are varied in design, styling and color to appeal
to a broad spectrum of consumers. The Company's retail customers include
department stores, specialty stores, national chains, mass merchandisers, and
catalog operations. Springs also sells bath products through independent sales
representatives to retail customers, bed and bath products through distributors
to institutional customers and directly to consumers through its 55
company-owned outlet stores, and decorative window products directly to
large-scale contractors and to distributor/fabricators.
The Company has a wholly-owned Canadian subsidiary (Springs Canada,
Inc.) that markets and distributes bedding and bath products in that country.
The majority of the bedding products sold in Canada is purchased by the Company
from a Canadian manufacturer. Springs Canada enables the Company to better serve
Canadian home furnishing retailers and their customers.
During the second quarter of 1996, the Company adopted a plan to
consolidate and realign its fabric manufacturing operations. In connection with
this plan, the Company closed three fabric manufacturing plants, added
production in other plants, and increased outside purchases of grey fabric. This
consolidation and realignment primarily affected the home furnishings segment.
On January 5, 1999, Springs acquired the remaining 50% interest in
American Fiber Industries, LLC ("AFI"), a manufacturer and distributor of bed
pillows, mattress pads, down comforters and comforter accessories. Springs
acquired its original 50 percent interest in February 1997. The cost of the
remaining equity interest totaled approximately $15 million. Effective January
23, 1999, the Company purchased the stock of Regal Rugs, Inc. ("Regal") from
Readicut International plc. Regal manufactures bath and accent rugs for sale to
department and specialty stores, national chain stores, mass merchandisers, and
catalogs. The purchase price for Regal was approximately $30 million, subject to
possible adjustments for asset valuation and incremental tax liabilities of the
seller. Both of these acquisitions reflect Springs' continuing strategic
emphasis on increasing sales through acquisitions that complement the Company's
extensive line of home furnishings.
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For additional details of the home furnishings segment transactions
described above, see pages 29 through 33 of the Annual Report under the caption
"Management's Discussion and Analysis of Operations and Financial Condition,"
which is incorporated by reference.
Springs' specialty fabrics segment manufactures, finishes, purchases
for resale and markets a wide variety of fabrics and, in 1998, generated sales
of $314.4 million and operating income of $3.0 million. This segment's operating
income before unusual items was $20.1 million. (For details on the unusual
items, see footnote 4 on page 13 of the Annual Report under the caption
"Reportable Segment Information," which is incorporated herein by reference.)
The specialty fabrics segment produces and markets printed and dyed
fabrics sold to retail stores and manufacturers. The segment sells its products
primarily through its own sales force. Sales are also made through distributors
and agents. Prior to the divestitures described below, this segment also
produced and marketed finished fabrics to apparel manufacturers, as well as
protective, fire-retardant and other fabrics for industrial and furniture and
other applications.
During the past three years, Springs has sold four specialty fabrics
businesses and a significant specialty fabrics manufacturing facility. More
specifically:
- - In April 1996, the Company sold its Clark-Schwebel, Inc., subsidiary for
$193 million in cash. Through the date of divestiture, Clark-Schwebel,
Inc., had 1996 sales of $68.9 million and operating earnings before
interest and taxes of $11.3 million.
- - On August 7, 1998, the Company sold its UltraSuede business and related
assets of its UltraFabrics Division. The Company has retained the rest of
the UltraFabrics Division, which remains part of the Company's specialty
fabrics segment.
- - On September 25, 1998, Springs sold its Rock Hill Printing & Finishing
Plant, a facility which had been closed earlier in the year and which had
operated within the Company's specialty fabrics segment.
- - Effective December 19, 1998, the Company sold its Industrial Products
Division to an investor group for principally $18.5 million in cash and
other consideration in the form of notes receivable and a preferred equity
interest in the buyer.
- - Effective January 2, 1999, Springs sold its apparel fabrics business, the
Springfield Division, for a $10 million preferred equity interest in the
buyer and cash of $33 million.
For additional details of the specialty fabrics segment transactions
described above, see "Management's Discussion and Analysis of Operations and
Financial Condition," which is incorporated by reference from pages 29 through
33 of the Annual Report.
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Home furnishing products, consisting primarily of textile bedding
products, textile and non-textile bath products, and window fashions,
represented 85.6%, 85.2%, and 81.4% of consolidated revenues for each of 1998,
1997, and 1996, respectively. Specialty fabric products, consisting primarily of
apparel fabric, over-the-counter home-sewing fabric, and high performance
fabric, represented 14.4%, 14.8%, and 18.6% of consolidated revenues for each of
1998, 1997, and 1996, respectively.
Raw materials used by the Company include principally cotton, polyester
fiber and purchased woven fabric. The Company also purchases other natural and
manmade fibers, finished knitted and non-woven fabrics, dyes and chemicals,
aluminum, plastic, wood, and steel. Such raw materials are generally readily
available; and the Company is not dependent on any one supplier as a source for
raw materials. Any shortage in the supply of cotton by reason of weather,
disease or other factors, or significant increases in the price of cotton or
polyester, however, could adversely affect the Company's results of operations.
The Company considers its trademarks to be materially important to its
business. The trademarks are protected, in part, through United States and
foreign trademark registrations.
The home furnishings segment sells bed and bath products under the
Wamsutta(R), Springmaid(R), Performance(TM), and Dundee(R) brands, and
decorative window products under the Graber(R), Bali(R), Nanik(R),
FashionPleat(R), Maestro(TM) and CrystalPleat(R) brands. This segment also uses
the Wabasso(R) and Texmade(R) brands on bed products sold in Canada.
The home furnishings segment also uses certain licensed designs and
trademarks which may be considered to be of material importance to this segment.
These include a license agreement with each of Bill Blass, Ltd., and Liz
Claiborne, Inc., and multiple license agreements with The Walt Disney Company.
The Bill Blass license agreement has automatic renewal provisions if certain
sales thresholds are met; the Liz Claiborne license agreement expires December
31, 1999, subject to certain renewal rights; and the Walt Disney license
agreements expire at various future dates from 1999 to 2001. Home furnishing
products are also sold under private brand names of certain customers.
The specialty fabrics segment uses the Springmaid(R), Wamsutta(R), and
UltraLeather(TM) brands on home-sewing and other specialty fabrics.
In 1998, the Company's requirements for cash to finance working capital
were provided from operations, asset sales, business divestitures and long-term
borrowings. Management expects that cash generated by operations, cash received
from the sale of the Springfield Division, cash on hand at the end of 1998, and
borrowings from committed bank lines and commercial paper will adequately
provide
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for the Company's cash needs during 1999. Trade receivables are generally
collected in 60 days or less.
The home furnishings segment's top ten customers represent
approximately 55% of the segment's sales; however, the segment's total customer
base is very large. While the Company has no reason to believe that the segment
will lose the business of any of its largest customers, the loss of one or more
of the largest accounts (or a material portion of any thereof) could have a
material adverse effect upon the Company's business. Sales in the specialty
fabrics segment are more dispersed, with its top ten customers accounting for
approximately 38% of the segment's sales. In 1998, consolidated sales to
Wal-Mart Stores, Inc. were approximately 15% of Springs' total sales; no other
single customer accounted for ten percent or more of Springs' total sales.
The Company's unfilled order position at January 2, 1999, amounted to
approximately $177 million. The unfilled order position at January 3, 1998, was
approximately $166 million.
The markets in which the principal products of the Company are sold are
highly competitive as to price, quality, customer service and product design.
The Company believes that it competes effectively in both segments with respect
to these factors. In certain product categories competition is concentrated
among several large domestic companies while in other product categories
competition is much more dispersed among both large and small companies.
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 any, to which such costs are recoverable from insurers or other
parties.
The Company estimates the range of possible losses for such matters to
be between $8 million and $13 million, and has accrued an undiscounted liability
of approximately $12 million, which represents management's best estimate of
Springs' probable liability concerning all known environmental matters.
Management believes the $12 million will be paid out over the next 10 years.
This accrual has not been reduced by any potential insurance recovery to which
the Company may be entitled regarding environmental matters.
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Approximately 17,500 associates were employed by Springs and its
subsidiaries at the end of 1998. Of these associates, approximately 16,230 were
employed in the home furnishings segment, approximately 720 in the specialty
fabrics segment, and approximately 550 in corporate administrative and shared
services functions.
International sales of home furnishing and specialty fabrics are made
through Springs' divisions and its subsidiaries. Sales outside of the United
States accounted for approximately 6.9% of total sales in 1998, 6.7% in 1997,
and 6.4% in 1996. The bulk of Springs' sales outside of the United States is
made in Canada by the home furnishings segment. During each of the last three
years, less than 5% of the Company's assets have been located outside of the
United States.
Financial information for the home furnishings and specialty fabrics
segments is incorporated by reference from page 13 of the Company's Annual
Report under the caption "Reportable Segment Information."
ITEM 2. PROPERTIES
The Company owns its Executive Office Building and an additional office
building in Fort Mill, South Carolina, as well as the 21-story Springs Building
at 104 West 40th Street, New York City, New York. The Springs Building contains
sales showrooms for the home furnishings segment's bed and bath fashions and
baby products businesses. The Springs Building also serves as the sales
headquarters for the home furnishings segment's baby products business and the
specialty fabrics segment's UltraFabrics Division. A substantial part of the
Springs Building is leased to other businesses. The Company has put the Springs
Building up for sale with plans to lease back space it currently occupies.
The Company leases offices in Charlotte, North Carolina, which are used
by its bed and bath fashions businesses. These businesses and other divisions
lease additional space in other cities for administration and sales offices,
manufacturing facilities, outlet stores and distribution centers.
The Company also owns an administrative center and a major warehouse
facility, both located near Lancaster, South Carolina. The administrative center
houses customer service operations, computer and data processing operations and
accounting offices. The warehouse facility serves as a warehouse and
distribution center for a significant portion of the Company's home furnishing
products.
Springs currently has thirty-seven manufacturing plants. Fourteen
plants are grey fabric manufacturing plants; two are dyeing, printing and
finishing plants; ten are fabricating plants; seven plants perform both dyeing,
printing, finishing and fabricating operations; and four plants manufacture
decorative window products. Of
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these plants, fourteen are in South Carolina, eleven in Georgia, two in each of
North Carolina, Alabama, and Wisconsin, and one in each of California, Indiana,
Mississippi, Pennsylvania, Tennessee, and Nevada.
The home furnishings segment uses thirty-four of these plants and
shares another three plants with the specialty fabrics segment. The plants are
owned by Springs and are unencumbered, except for four which are subject to
mortgages and four which are leased either through industrial revenue bond
financing or through other lease arrangements.
Springs considers all plants to be well maintained and generally in
good operating condition.
ITEM 3. LEGAL PROCEEDINGS
Information required by this Item is incorporated by reference from the
Notes to Consolidated Financial Statements, Note 12. - Other Matters, found on
page 26 of the Annual Report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None reportable.
EXECUTIVE OFFICERS OF THE REGISTRANT
Pursuant to Instruction #3 to Paragraph (b) of Item 401 of Regulation
S-K, the following information is provided on the Company's Executive Officers.
Position and Business
Name Age Experience
- ---- --- ---------------------
Crandall C. Bowles 51 Chairman of the Board, President and Chief
Executive Officer (April 1998 to present).
President and Chief Executive Officer
(January 1998 to April 1998). President and
Chief Operating Officer (January 1997 to
January 1998). Executive Vice President
(April 1992 to January 1997). President -
Bath Fashions Group (May 1995 to January
1997). President - Textile Manufacturing
Group (March 1993 to May 1995). Director
(1978 to present).
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Gracie P. Coleman 47 Senior Vice President - Human Resources
(February 1999 to present). Vice President -
Marketing and Corporate Support for
Government Solutions, Lucent Technologies
(1997 to February 1999). Human Resources
Vice President, Lucent Technologies (1996 to
1997). Human Resources Vice President -
Strategic Partners Network Systems, AT&T
(1995 to 1996). Human Resources Director of
Network Systems, AT&T (1993 to 1995).
C. Powers Dorsett 54 Senior Vice President - General Counsel and
Secretary (February 1996 to present). Vice
President - General Counsel and Secretary
(February 1990 to January 1996).
William K. Easley 55 Senior Vice President (February 1996 to
present). President - Textile Manufacturing
(May 1995 to present). President -
Performance Home Fashions Division, Home
Furnishings Group (October 1993 - May 1995).
Senior Vice President - Bed and Bath Group
(August 1992 - October 1993).
Samuel J. Ilardo 43 Vice President and Treasurer (April 1998 to
present). Treasurer (May 1995 to April
1998). Assistant Treasurer (March 1994 to
April 1995). Tax Director (November 1992 to
February 1994).
Stephen P. Kelbley 56 Executive Vice President (September 1991 to
present). President - Home Furnishings
Operating Group (February 1998 to present).
President - Diversified Home Products Group
(January 1997 to February 1998). President -
Diversified Products Group (May 1995 to
January 1997). President - Specialty Fabrics
Group (March 1994 to April 1995). Chief
Financial Officer (September 1991 to March
1994).
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Charles M. Metzler 46 Vice President - Controller (February 1996
to present). Controller - Springs Canada,
Inc. (September 1992 to January 1996).
Robert W. Moser 60 Executive Vice President (July 1989 to
present). President - Fabrics Group (January
1997 to present). President - Bath
Manufacturing (May 1995 to January 1997).
President - Specialty Fabrics Group (March
1993 to March 1994). President - Finished
Fabrics Group and Windows (September 1991 to
March 1993).
Thomas P. O'Connor 53 Executive Vice President (August 1992 to
present). President - Sales and Marketing
Group (February 1998 to present). President
- Bed Fashions Group (May 1995 to February
1998). President - Home Fashions Group
(March 1993 to April 1995).
Elizabeth M. Turner 38 Vice President - Public Affairs (March 1999
to present). Director of Public Relations
(September 1997 to February 1999); Director
- Corporate Affairs for Coca-Cola Bottling
Company Consolidated (September 1996 to
August 1997). Manager - Corporate Affairs
for Coca-Cola Bottling Company Consolidated
(October 1990 to August 1996).
James F. Zahrn 48 Executive Vice President and Chief Financial
Officer (April 1997 to present). Senior Vice
President and Chief Financial Officer (March
1995 to April 1997). Vice President -
Finance and Treasurer (March 1994 to March
1995). Vice President and Treasurer (May
1993 to March 1994).
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Crandall Close Bowles, Chairman, President and Chief Executive Officer, and a
director of the Company, and Leroy S. Close, a director of the Company, are
siblings. There are no other family relationships within the director and
executive officer group.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Class A Common Stock of Springs is traded on the New York Stock
Exchange. As of March 26, 1999, there were approximately 2,621 holders of record
of Class A Common Stock, and approximately 74 holders of Class B Common Stock.
No established trading market exists for Class B Common Stock. Class B Common
Stock may, however, at the election of the holder, be exchanged on a one-for-one
basis at any time for Class A Common Stock.
Information required by this Item on the sales prices and dividends of
the Common Stock of Springs is incorporated by reference from page 36 of the
Annual Report under the caption "Quarterly Financial Data (Unaudited)."
ITEM 6. SELECTED FINANCIAL DATA
Information required by this Item is incorporated by reference from
pages 34 and 35 of the Annual Report under the caption "Selected Financial
Data."
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Management's discussion and analysis of financial condition and results
of operations required by this Item is incorporated by reference from pages 29
through 33 of the Annual Report under the caption "Management's Discussion and
Analysis of Operations and Financial Condition."
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS
Information required by this Item is incorporated by reference from
pages 32 and 33 of the Annual Report under the caption "Management's Discussion
and Analysis of Operations and Financial Condition - Market Risk Sensitive
Instruments and Positions."
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial statements, including the report of independent certified
public accountants, and supplementary data required by this Item are
incorporated by reference from the Annual Report. See Item 14 for a list of
financial statements and the pages of the Annual Report from which they are
incorporated. Supplementary data is incorporated by reference from page 36 of
the Annual Report under the caption "Quarterly Financial Data (Unaudited)."
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Except for one director who is retiring from the Board pursuant to the
Company's retirement policy for directors, information about directors required
by this Item is incorporated by reference from pages 2 through 4 of the
Company's Proxy Statement to Security Holders dated March 3, 1999 (the "Proxy
Statement") under the captions "Directors, Nominees, and Election of Directors"
and "Information Regarding the Board of Directors." Information about the
director who is retiring is provided below. The information on Executive
Officers is provided at the end of Part I of this Form 10-K under the caption
"Executive Officers of the Registrant."
DONALD S. PERKINS, AGE 71, FORMER CHAIRMAN OF JEWEL COMPANIES, INC. A
director of the Company since October 1995, Mr. Perkins previously
served as a director of the Company from 1984 to January 1995. He was
Chairman of Kmart Corporation from January 1995 to June 1995. Mr.
Perkins is also a director of Aon Corporation, Cummins Engine Company,
Inc., LaSalle Hotel Properties, LaSalle Street Fund, LaSalle U.S.
Realty Income & Growth Fund, Lucent Technologies Inc., Nanophase
Technologies Corporation, Neodesic Corporation, Parson Group LLC, The
Putnam Funds, and Ryerson Tull, Inc.
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Information required by this Item on the late Section 16 filings by
Company directors and officers is incorporated by reference from page 23 of the
Proxy Statement under the caption "Section 16(a) Beneficial Ownership Reporting
Compliance."
ITEM 11. EXECUTIVE COMPENSATION
Information required by this Item is incorporated by reference from
pages 5 through 14 of the Proxy Statement under the captions "Executive Officer
Compensation and Related Information," "Management Compensation and Organization
Committee Report," "Compensation Committee Interlocks and Insider
Participation," "Employment and Retirement Agreements" and "Performance Graph."
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information required by this Item is incorporated by reference from
pages 21 and 22 of the Proxy Statement under the caption "Security Ownership of
Certain Beneficial Owners and Management."
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information required by this Item is incorporated by reference from
page 23 of the Proxy Statement under the caption "Transactions With Certain
Persons."
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. The following financial statements and independent auditors'
report are incorporated by reference from the Annual Report as a part of this
Report:
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(i) Consolidated
Statement of Operations for the fiscal years
ended January 2, 1999, January 3, 1998, and
December 28, 1996 (Annual Report page 14).
(ii) Consolidated Balance
Sheet as of January 2, 1999, and January 3,
1998 (Annual Report page 15).
(iii) Consolidated
Statement of Shareowners' Equity as of
January 2, 1999, January 3, 1998, and
December 28, 1996 (Annual Report page 16)
(iv) Consolidated
Statement of Cash Flows for the fiscal years
ended January 2, 1999, January 3, 1998, and
December 28, 1996 (Annual Report page 17).
(v) Notes to
Consolidated Financial Statements (Annual
Report pages 18 through 26).
(vi) Independent
Auditors' Report (Annual Report page 27).
2. Financial statement schedules are not
shown here because, under applicable rules, they are not
required, are inapplicable, or the information required is
included in the Financial Statements or in the Notes thereto.
3. Exhibits required to be listed by Item
601 of Regulation S-K are listed (and, where applicable,
attached) in the Exhibit Index attached hereto, which is
incorporated herein by this reference.
(b) Reports on Form 8-K: On October 9, 1998, the Company filed a Form
8-K with the Securities and Exchange Commission concerning the Company's sale of
its Rock Hill Printing & Finishing Plant on September 25, 1998. The report also
described the Company's adoption of a plan to modernize its Griffin, Georgia,
towel weaving and yarn operations. No financial statements were included with
the report.
The matters discussed or incorporated by reference in this
Form 10-K contain forward-looking statements that are based on management's
expectations, estimates, projections, and assumptions. Words such as "expects,"
"anticipates," "plans," "believes," "estimates," and variations of such words
and similar expressions are intended to identify such forward-looking statements
which include but are not
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limited to projections of expenditures, 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 and involve certain risks and uncertainties
which are difficult to predict. Actual future results and trends, therefore, may
differ materially from what is forecast in forward-looking statements due to a
variety of factors, including: the ability of the Company and its suppliers and
customers to bring their information systems into compliance with the "Year 2000
Computer Problem"; 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.
[SIGNATURES ON NEXT PAGE]
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the 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/James F. Zahrn
----------------------------------
James F. Zahrn
Executive Vice President and
Chief Financial Officer
Date: March 30, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
By: /s/John F. Akers By: /s/Crandall C. Bowles
-------------------------------- --------------------------------------
John F. Akers, Director Crandall C. Bowles, Chairman,
Date: March 30, 1999 President & Chief Executive Officer
and Director
(Principal Executive Officer)
Date: March 30, 1999
By: /s/John L. Clendenin By: /s/Leroy S. Close
-------------------------------- --------------------------------------
John L. Clendenin, Director Leroy S. Close, Director
Date: March 30, 1999 Date: March 30, 1999
By: /s/Charles W. Coker By: /s/John H. McArthur
-------------------------------- --------------------------------------
Charles W. Coker, Director John H. McArthur, Director
Date: March 30, 1999 Date: March 30, 1999
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By: /s/Aldo Papone By: /s/Donald S. Perkins
-------------------------------- --------------------------------------
Aldo Papone, Director Donald S. Perkins, Director
Date: March 30, 1999 Date: March 30, 1999
By: /s/Robin B. Smith By: /s/Sherwood H. Smith, Jr.
-------------------------------- --------------------------------------
Robin B. Smith, Director Sherwood H. Smith, Jr., Director
Date: March 30, 1999 Date: March 30, 1999
By: /s/Stewart Turley
--------------------------------
Stewart Turley, Director
Date: March 30, 1999
By: /s/James F. Zahrn By: /s/Charles M. Metzler
-------------------------------- --------------------------------------
James F. Zahrn Charles M. Metzler,
Executive Vice President and Vice President-Controller
Chief Financial Officer (Principal Accounting Officer)
(Principal Financial Officer)
Date: March 30, 1999 Date: March 30, 1999
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC
--------------------------------------
EXHIBITS
* * * * * * * * * * * * * * * * * * * * * *
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EXHIBIT INDEX
Item
(2) (a) Agreement and Plan of Merger dated February 6, 1995, as
amended on March 7, 1995, among Springs Industries, Inc.,
Dundee Acquisition Corp., and Dundee Mills, Incorporated,
incorporated by reference from Form 8-K filed June 12, 1995.
(b) Agreement and Plan of Merger among Springs Industries, Inc.,
Fort Mill A Inc., Vestar/CS Holding Company, L.L.C., and
Clark-S Acquisition Corporation dated as of February 24, 1996,
together with a list identifying the schedules and exhibits to
the Agreement, incorporated by reference from Form 10-K filed
March 21, 1996.
(3) (a) Springs' Restated Articles of Incorporation, amended and
restated as of April 18, 1994, incorporated by reference from
Form 10-Q filed August 15, 1994.
(b) Springs' Bylaws, amended as of December 12, 1996, incorporated
by reference from Form 10-K filed March 27, 1998.
(4) $225,000,000 Credit Agreement dated December 17, 1997, among
Springs Industries, Inc., Wachovia Bank, N.A., Bank of America
NT & SA, SunTrust Bank, Atlanta, The Bank of Nova Scotia, The
Bank of Tokyo-Mitsubishi, Ltd., Mellon Bank, N.A., and The
Fuji Bank, Limited, Atlanta Agency, incorporated by reference
from Form 10-K filed March 27, 1998.
Note: No other long-term debt instrument issued by the Company
exceeds 10% of the consolidated total assets of the Company
and its subsidiaries. In accordance with paragraph 4(iii) of
Item 601 of Regulation S-K, the Company will furnish to the
Commission upon request copies of long-term debt instruments
and related agreements.
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(10) Material Contracts - Executive Compensation Plans and Arrangements
(a) Springs' Deferred Unit Stock Plan, amended and restated
effective February 22, 1990, incorporated by reference
from Form 10-K, filed March 26, 1990. Amendment effective
December 10, 1990, incorporated by reference from Form
10-K, filed March 25, 1991. Amendment effective August 16,
1990, incorporated by reference from Form 10-Q, filed
November 12, 1991. Amendment effective as of November 1,
1996, incorporated by reference from Form 10-K filed March
28, 1997.
(b) Springs' Restricted Stock Plan, incorporated by reference
from Form 10-K, filed March 19, 1982. Amendment dated
August 19, 1983, incorporated by reference from Form 10-K
filed March 16, 1984.
(c) Springs' Deferred Compensation Plan, as amended and
restated on August 18, 1994, incorporated by reference
from Form 10-Q filed November 14, 1994.
(d) Springs' Senior Executive Supplemental Retirement Plan,
incorporated by reference from Form 10-K, filed March 19,
1982. Amendment dated February 26, 1987, incorporated by
reference from Form 10-K, filed March 27, 1987. Amendment
dated June 20, 1991, incorporated by reference from Form
10-K filed March 25, 1992.
(e) Springs' Shadow Retirement Plan, incorporated by reference
from Form 10-K, filed March 19, 1982. Amendment adopted
October 18, 1990, incorporated by reference from Form 10-K
filed March 25, 1991.
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(f) Springs' Deferred Compensation Plan for Outside Directors,
as amended and restated on August 18, 1994, incorporated
by reference from Form 10-Q, filed November 14, 1994.
Amendments adopted as of October 29, 1995, and as of
November 1, 1996, incorporated by reference from Form 10-K
filed March 28, 1997.
(g) Springs' Outside Directors COLI Deferred Compensation Plan
adopted December 12, 1985, incorporated by reference from
Form 10-K filed March 14, 1986.
(h) Springs' Senior Management COLI Deferred Compensation Plan
adopted December 12, 1985, incorporated by reference from
Form 10-K filed March 14, 1986.
(i) Springs' 1991 Incentive Stock Plan, as approved by
shareholders on April 15, 1991, incorporated by reference
from the Company's Proxy Statement to Shareholders dated
February 27, 1991, under the caption "Exhibit A" on pages
A-1 through A-12 of such Proxy Statement. Amendments
approved by shareholders on April 29, 1996, incorporated
by reference from Form 10-Q filed May 14, 1996. Amendments
as of November 1, 1996, incorporated by reference from
Form 10-K filed March 28, 1997.
(j) Springs' 1999 Incentive Stock Plan, as approved by the
Board of Directors on February 11, 1999, and subject to
shareholder approval, incorporated by reference from the
Company's Proxy Statement to Shareholders dated March 3,
1999, under the caption "Exhibit B" on pages B-1 through
B-13 of such Proxy Statement.
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(k) Springs' 1991 Restricted Stock Plan for Outside Directors,
as approved by the Company's shareholders on April 15,
1991, incorporated by reference from the Company's Proxy
Statement to Shareholders dated February 27, 1991, under
the caption "Exhibit B" on pages B-1 through B-4 of such
Proxy Statement.
(l) Springs' Amended and Restated Achievement Incentive Plan,
as approved by the Board of Directors on April 13, 1992,
incorporated by reference from Form 10-Q filed May 11,
1992. Amendment approved by the Board of Directors on
February 18, 1993, incorporated by reference from Form
10-K filed March 31, 1993. Amendment approved by the Board
of Directors on February 12, 1998.
(m) Springs' Contingent Compensation Plan adopted by the Board
of Directors on June 20, 1991, incorporated by reference
from Form 10-Q filed November 12, 1991.
(n) Springs' Excess Benefits Plan adopted by the Board of
Directors on August 18, 1994, and amended and restated
effective March 1, 1996, incorporated by reference from
Form 10-K filed March 28, 1997.
(o) Form of stock option agreement used in conjunction with
option grants under the 1991 Incentive Stock Plan from
December 1991 to February 1995, incorporated by reference
from Form 10-K filed March 27, 1998.
(p) Form of stock option agreement used in conjunction with
option grants under the 1991 Incentive Stock Plan from
October 1995 to 1997, incorporated by reference from Form
10-K filed March 27, 1998.
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(q) Form of agreement used in conjunction with grants of
performance units under the 1991 Incentive Stock Plan,
incorporated by reference from Form 10-K filed March 27,
1998.
(r) Financial Planning Policy for certain executives of the
Company, incorporated by reference from Form 10-K filed
March 27, 1998.
(13) Pages 13 through 36 of the 1998 Annual Report to Shareholders, which
have been expressly incorporated by reference.
(21) List of Subsidiaries of Springs.
(23) Consent of expert for Form S-8 Registration Statement for 1991
Incentive Stock Plan and 1991 Restricted Stock Plan for Outside
Directors.
(27) Financial Data Schedule (for SEC purposes)
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AMENDMENT TO ACHIEVEMENT INCENTIVE PLAN
The Springs Industries, Inc. Achievement Incentive Plan is amended effective
January 4, 1998, as follows:
1. By adding the following new definitions under Article II of the Plan:
The "ROAE" for the Corporate Unit shall mean the total of the
Operating Profits of the Divisions for the Plan Year divided
by the total of the Divisions' amount of Actual Assets
Employed.
"ROAE Improvement Factor" of the Corporate Unit shall mean (i)
the amount of Actual Assets Employed by all Divisions for the
Plan Year multiplied by (ii) the increase, if any, in the ROAE
for the Corporate Unit for the Plan Year over the ROAE for the
Corporate Unit for the immediately preceding Plan Year.
2. By adding the following new paragraph C. of Article V of the Plan:
C. The Financial Performance Target for the Corporate Unit
shall mean 15% of the ROAE for the Corporate Unit.
3. By deleting paragraph A.2. of Article VI and substituting the following
new paragraph:
The Award Pool factor for the Corporate Unit shall be based on
the percentage of achievement of the Corporation of its
Financial Performance Target, as set forth in Appendix B to
the Plan, subject to a maximum of 150%; provided, however,
that the Award Pool Factor shall be "0" if the percentage of
achievement is less than 25%.
4. By deleting paragraph C of Article VI and substituting the following:
The Award Pool for the Corporate Unit shall equal the sum of the
following, subject to a maximum Award Pool equal to 200% of the
Corporate Target Award Pool:
(1) the Corporate Award Pool Factor times the Corporate Target
Award Pool; plus
(2) 4% of the Corporate ROAE Improvement Factor, if any;
(3) the amounts allocated back to the Corporate Unit pursuant to
Section VII.B.
s/Robert W. Moser
-----------------------------
Executive Vice President
Date: February 1999
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