Item 2. Properties
The Company's executive offices are located in Dalton, Georgia. At December 28, 1996, the Company operated additional facilities as follows:
Domestic Facilities (wholesale) Alabama Redistribution, yarn spinning and yarn extrusion Michigan Redistribution Missouri Redistribution Florida Redistribution North Carolina Redistribution, primary backing manufacturing Ohio Redistribution Pennsylvania Redistribution Virginia Redistribution
California Warehousing Colorado Warehousing Illinois Warehousing Massachusetts Warehousing Minnesota Warehousing New Jersey Warehousing Texas Warehousing Washington Warehousing
Georgia Administrative, distribution, carpet manufacturing, yarn processing, yarn spinning, tufting, dyeing, coating, finishing, rug manufacturing, sample manufacturing, warehousing, design center and research and development center.
Tennessee Carpet manufacturing, yarn spinning
Domestic Facilities (retail - number of locations in parenthesis)
California Retail stores, warehousing, administrative (59) Colorado Warehousing, administrative (1) Connecticut Retail stores (7) Florida Retail stores, warehousing, administrative (36) Georgia Retail stores, warehousing, administrative (6) Idaho Retail stores (3) Illinois Retail stores, warehousing, administrative (44) Indiana Retail stores, administrative (19) Iowa Retail stores (9) Kansas Retail stores (9) Maryland Retail stores, warehousing, administrative (6) Massachusetts Retail stores, warehousing, administrative (10) Michigan Retail stores, warehousing, administrative (56) Minnesota Retail stores, warehousing, administrative (4) Missouri Retail stores, warehousing, administrative (14) Montana Retail stores (1) New Hampshire Retail stores (2) New Jersey Administrative (1) New Mexico Retail stores (4) New York Retail stores, warehousing, administrative (6) North Carolina Retail stores (22) Ohio Retail stores, warehousing, administrative (10) Pennsylvania Retail stores (8) Rhode Island Retail stores (2) South Carolina Retail Stores (9) South Dakota Retail stores (1) Tennessee Retail stores (2) Texas Warehousing, administrative (2) Virginia Retail stores, warehousing, administrative (18) Washington Retail stores, warehousing, administrative (5)
Foreign Facilities (facilities are located in or near the areas listed) Bradford, England Tufting, coating, yarn processing, distribution and administrative offices
Gwent, Wales Yarn extrusion, yarn processing
Victoria, Australia Yarn extrusion, yarn processing, tufting, dyeing, coating, distribution and administrative offices
Donaghadee, N. Ireland Tufting, dyeing and finishing
During 1996, the wool spinning facilities and Axminister carpet production in the United Kingdom were closed and are being phased out. The Company maintains leased warehouses and customer service facilities in or near Dallas; Los Angeles (2); Seattle; San Francisco; Chicago; Minneapolis; Boston; and Cranbury, New Jersey. Each leased warehouse facility includes a sales showroom. Substantially all of the Company's retail facilities are leased. The Company believes that current facilities are adequately insured and well maintained, substantially used and provide adequate production capacity for current and anticipated future operations.
Item 3.
Item 3. Legal Proceedings
The Company is a party to several lawsuits incidental to its various activities and incurred in the ordinary course of business. The Company believes that it has meritorious claims and defenses in each case. After consultation with counsel, it is the opinion of management that, although there can be no assurance given, none of the associated claims, when resolved, will have a material adverse effect upon the Company.
From time to time the Company is subject to claims and suits arising in the course of its business. The Company is a defendant in certain litigation alleging personal injury resulting from personal exposure to volatile organic compounds found in carpet produced by the Company. The complaints seek injunctive relief and unspecified money damages on all claims. The Company has denied any liability. The Company believes that is has meritorious defenses and that the litigation will not have a material adverse effect on the Company's financial condition or results of operations.
In June 1994, the Company and several other carpet manufacturers received a grand jury subpoena from the Antitrust Division of the United States Department of Justice relating to an investigation of the industry. In December 1995, the Company learned that it was one of six carpet companies named as additional defendants in a pending antitrust suit filed in United States District Court in Rome, Georgia. The amended complaint alleges price-fixing regarding certain types of carpet products in violation of Section 1 of the Sherman Act. The Company believes that the suit is spurious and without merit, and that once completed, it will not have a material adverse effect on the Company's financial condition or results of operations.
In February 1996, a jury in Greensboro, North Carolina returned a verdict against the Company in litigation brought by four former employees of Salem Carpet Mills, acquired by the Company in 1992, alleging age discrimination and sex discrimination in employment decisions with regard to such employees. The judgement is being appealed by both parties. The Company believes that the litigation will not have a material adverse effect on the Company's financial condition or results of operations.
The Company is subject to a variety of environmental regulations relating to the use storage, discharge and disposal of hazardous materials used in its manufacturing processes. Failure by the Company to comply with present and future regulations could subject it to future liabilities. In addition, such regulations could require the Company to acquire costly equipment to incur other significant expenses to comply with environmental regulations. The Company is not involved in any material environmental proceedings.
At the end of fiscal year 1996, there were no other pending legal proceedings to which the Company was a party or to which any of its property was subject which, in the opinion of management, were likely to have a material adverse effect on the Company's business, financial condition or results of operations.
Item 4.
Item 4. Submission of Matters to Vote of Security Holders
Not applicable.
Item 4(A). Executive Officers of the Registrant
Officers of the Company are elected annually by the Board of Directors. All of the executive officers of the Company except for Mr. Jackson and Mr. Rollins have served as executive officers for the Company for more than the past five years.
Mr. Jackson joined the Company in February 1996. Prior to February 1996, Mr. Jackson had been a partner with Arthur Andersen LLP in Atlanta, Georgia.
PART II Item 5.
Item 5. Market for the Registrant's Common Stock and Related Shareholder Matters
The high and low sales prices for the Company's common stock as reported by the New York Stock Exchange and the amount of dividends paid by quarter for the last two fiscal years are set forth on page 24 of Exhibit 13.
Reference is made to Note 2 of Notes to Consolidated Financial Statements on page 12 of Exhibit 13 for information concerning restrictions on the payment of cash dividends.
At March 7, 1997, there were 4,253 holders of record of the Company's common stock.
Item 6.
Item 6. Selected Financial Data
This information is set forth on page 1 of the Exhibit 13 under the caption "Ten Year Financial Review."
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
This information is set forth on pages 2 - 4 of Exhibit 13 to this report.
Item 8.
Item 8. Financial Statements and Supplementary Data
This information is set forth on pages 5 - 24 of Exhibit 13.
Item 9.
Item 9. Disagreements on Accounting and Financial Disclosure
None.
PART III Item 10.
Item 10. Directors and Executive Officers of the Registrant
Information concerning directors is incorporated by reference to "Election of Class of Directors" on pages 3 - 6 of the Proxy Statement for the 1997 Annual Meeting of Shareholders. Reference is also made to Item 4(A) of Part I of this report, "Executive Officers of the Registrant," which information is incorporated herein.
Item 11.
Item 11. Executive Compensation
This information is incorporated by reference to "Executive Compensation" on pages 3 - 5 of the Proxy Statement for the 1997 Annual Meeting of Shareholders.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management
This information is incorporated by reference to "Voting Rights and Principal Shareholders" and "Election of Directors" on pages 2 and 3-4 respectively, of the Proxy Statement for the 1997 Annual Meeting of Shareholders.
PART IV Item 13.
Item 13. Certain Relationships and Related Transactions
This information is incorporated by reference to "Certain Relationships" on page 4 of the Proxy Statement for the 1997 Annual Meeting of Shareholders.
Item 14.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) The following documents are filed as part of this report:
1. Financial Statements
Exhibit 13, a copy of which is filed with this Form 10-K, contains the balance sheets as of December 28, 1996 and December 30, 1995, the related statements of income, shareholders' investment and cash flows for each of the three years in the period ended December 28, 1996, and the related report of Arthur Andersen LLP. These financial statements and the report of Arthur Andersen LLP are incorporated herein by reference. The financial statements incorporated by reference include the following:
Balance Sheets -- December 28, 1996 and December 30, 1995
Statements of Income for the years ended December 28, 1996, December 30, 1995 and December 31, 1994.
Statements of Shareholders' Investment for the years ended December 28, 1996, December 30, 1995 and December 31, 1994.
Statements of Cash Flows for the years ended December 28, 1996, December 30, 1995 and December 31, 1994.
2. Financial Statement Schedules
Report of Independent Public Accountants on Financial Statement Schedule
Schedule II - Valuation and Qualifying Accounts for the Years Ended December 28, 1996, December 30, 1995 and December 31, 1994.
3. Exhibits incorporated by reference or filed with this report.
Number Description
3(a) Amended and Restated Articles of Incorporation. [Incorporated herein by reference to Exhibit 3(a) to Registrant's Registration Statement filed with the commission on December 28, 1993 (File No. 33-51719).]
3(b) Bylaws. [Incorporated herein by reference to Exhibit 3(b) to Registrant's Registration Statement filed with the commission on December 28, 1993 (File No. 33-51714).]
4(a) Specimen form of Common Stock Certificate. [Incorporated herein by reference to Exhibit 2 to Registrant's Report on Form 8-A filed with the Securities and Exchange Commission on May 12, 1989 (File No. 1-6853).]
4(b) Restated Articles of Incorporation, filed as Exhibit 3(a), and the Bylaws of Registrant, filed as Exhibit 3(b), are incorporated herein by reference.
4(c) Rights Agreement dated as of April 10, 1989, between Registrant and Citizens and Southern Trust Company (Georgia), N.A., as Rights Agent. [Incorporated herein by reference to Exhibit 1 to Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 1989 (File No. 1-6853).]
10(a) Reserved
10(b)* Deferred Compensation Plan and form of Deferred Compensation Agreement of Registrant as adopted in April, 1980. [Incorporated herein by reference to the Registrant's July 2, 1994 Form 10-K filed with the Securities and Exchange Commission (File No. 1-6853).]
10(c), 10(d), 10(e) and 10(f) Reserved
10(g)Credit Agreement dated November 30, 1994, between Registrant and Nationsbank of Georgia, National Association, regarding a $600,000,000 revolving credit facility. [Incorporated herein by reference to the Registrant's December 31, 1994 Form 10-K filed with the Securities and Exchange Commission (File No. 1-6853).]
10(h)* 1987 Incentive Stock Option Plan of the Registrant. [Incorporated herein by reference to Exhibit A to Registrant's 1987 Proxy Statement, dated September 22, 1987 (File No. 1-6853).]
10(i) Reserved
10(j)* 1989 Discounted Stock Option Plan of the Registrant. [Incorporated herein by reference to Exhibit A to Registrant's 1989 Proxy Statement, dated September 21, 1989 (File No. 1-6853).]
10(k)* 1992 Incentive Stock Option Plan of the Registrant. [Incorporated herein by reference to Exhibit A to Registrant's 1992 Proxy (File No. 1-6853).] Statement, dated September 18, 1992 (File No.1-6853).]
11 Computation of Earnings per Share for the fiscal years ended December 28, 1996, December 30, 1995 and December 31, 1994.
13 Items Incorporated by Reference from the 1996 Annual Report to Shareholders.
21 List of Subsidiaries.
23 Consent of independent public accountants.
27 Financial Data Schedule.
*Compensatory plan or management contract required to be filed as an exhibit to Item 14 (c) of Form 10-K.
Shareholders may obtain copies of Exhibits without charge upon written request to the Corporate Secretary, Shaw Industries, Inc., Mail drop 061-18, P.O. Drawer 2128, Dalton, Georgia 30722-2128.
(b) No reports on Form 8-K were filed during the last quarter of fiscal 1996.
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SHAW INDUSTRIES, INC.
Date: March 26, 1997 By:/s/ ROBERT E. SHAW ------------------ Robert E. Shaw Chairman, Chief Executive Officer and Director
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.
Date: March 26, 1997 /s/ ROBERT E. SHAW ------------------ Robert E. Shaw Chairman, Chief Executive Officer and Director (Principal Executive Officer)
Date: March 26, 1997 /s/ KENNETH G. JACKSON ---------------------- Kenneth G. Jackson Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
Date: March 26, 1997 /s/ J. C. SHAW -------------- J.C. Shaw Chairman Emeritus and Director
Date: March 26, 1997 /s/ W. NORRIS LITTLE -------------------- W. Norris Little President and Chief Operating Officer and Director
Date: March 26, 1997 /s/ WILLIAM C. LUSK, JR. William C. Lusk, Jr. Sr. Vice President, Treasurer and Director
Date: March 26, 1997 /s/ ROBERT R. HARLIN -------------------- Robert R. Harlin Director
Date: March 26, 1997 /s/ THOMAS G. COUSINS --------------------- Thomas G. Cousins Director
Date: March 26, 1997 /s/ TUCKER GRIGG ---------------- S. Tucker Grigg Director
Date: March 26, 1997 /s/ CLIFFORD M. KIRTLAND, JR. Clifford M. Kirtland, Jr. Director
Date: March 26, 1997 /s/ J. HICKS LANIER ------------------- J. Hicks Lanier Director
Date: March 26, 1997 /s/ R. JULIAN McCAMY -------------------- R. Julian McCamy Director
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE
To the Shareholders of Shaw Industries, Inc.:
We have audited in accordance with generally accepted auditing standards the financial statements of SHAW INDUSTRIES, INC. included in the Annual Report to Shareholders incorporated by reference in this Form 10-K and have issued our report thereon dated February 21, 1997. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. Schedule II is the responsibility of the Company's management and is presented for purposes of complying with the Securities and Exchange Commission's rules and is not part of the basic financial statements. This schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly states, in all material respects, the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Atlanta, Georgia February 21, 1997
* Deductions for December 30, 1995 include $1,018,000 related to the deconsolidation of the Terza Joint Venture.