Springs Reports First Quarter Sales and Earnings In Line With Expectations

Apr 18, 2001, 01:00 ET from Springs Industries, Inc.

    FORT MILL, S.C., April 18 /PRNewswire/ -- Springs Industries, Inc.
 (NYSE:   SMI) today reported sales and earnings for the first quarter of 2001
 that were in line with expectations and lower than the record sales and
 earnings reported in the prior year.  Net sales were $570.4 million, down 3.9
 percent from $593.2 million in the first quarter of 2000.  "While retail
 conditions in the home furnishings marketplace continue to be impacted by
 pressure on consumer disposable income, our performance was in line with
 expectations," said Crandall C. Bowles, Springs chairman and chief executive
 officer.  "Although first quarter sales were lower than last year's strong
 performance, we remain encouraged that our focus on key accounts resulted in
 an overall sales volume increase with our top ten customers."
     Net income before an unusual item for the first quarter of 2001 was $14.5
 million, or $.80 per diluted share, down from $20.1 million, or $1.10 per
 diluted share in the first quarter of 2000.  The decrease in operating
 earnings from the first quarter of 2000 reflects the impact of lower sales
 volume, a higher mix of low margin off-quality and closeout merchandise sales,
 the negative impact of production curtailments to reduce inventory in light of
 softening sales, and higher energy costs.  First quarter 2001 net income also
 included a pre-tax charge of $2.3 million for professional services associated
 with the evaluation by the Special Committee of the Board of Directors of the
 previously announced proposal from the Close family and Heartland Industrial
 Partners, L.P. to take Springs private in a recapitalization transaction.
 Including the impact of this unusual item, first-quarter net income for 2001
 was $13.1 million, or $0.72 per diluted share.
     "We expect that sales growth and margin improvement will be impacted by
 continuing retail softness and inventory reduction efforts during the second
 quarter, and our outlook for improvement in the second half of 2001 remains
 guarded," said Mrs. Bowles.  Sales growth is expected to be in the range of
 flat to a positive 2 percent growth in the second quarter and a positive 1 to
 2 percent for the full year.  Net income, excluding the costs associated with
 the proposed recapitalization, is presently expected to be in the range of
 $.95 to $1.05 for the second quarter of 2001 and in the range of $3.95 to
 $4.14 for the full year 2001.
     Springs Industries (NYSE:   Ticker Symbol SMI) supplies leading retailers
 with a complete line of sheets, towels, comforters, window treatments and
 other coordinated home fashions designed to simplify home decorating for every
 consumer.  Our major brands are Wamsutta(R), Springmaid(R), Regal(R),
 Graber(R), Bali(R), Nanik(R), and Dundee(R).  Springs also markets bed and
 bath products for institutional and hospitality customers, home sewing
 fabrics, and baby bedding and baby apparel products.  The Company operates
 facilities in 13 U.S. states and owns marketing and distribution subsidiaries
 in Canada and Mexico.
     This press release contains forward-looking statements within the meaning
 of applicable securities laws.  These statements are based upon the Company's
 current expectations and assumptions, which are subject to a number of risks
 and uncertainties including the health of the retail economy in general,
 competitive conditions and the ability of the company to meet its cost-
 reduction goals, along with other factors which are discussed in certain of
 the company's SEC filings.
     www.springs.com
 
 
     SPRINGS INDUSTRIES, INC.
     Condensed Consolidated Statements of Operations
     (In thousands except per share amounts)
     (Unaudited)
 
                                                     Thirteen Weeks Ended
                                                  March 31,           April 1,
                                                      2001               2000
     Operations
       Net sales                                  $570,380           $593,224
 
       Cost and expenses:
         Cost of goods sold                        470,017            478,167
         Selling, general and
           administrative expenses                  67,813             74,318
         Provision for uncollectible
           receivables                               2,284              1,015
         Expenses related to merger
           proposal                                  2,250                 --
         Interest expense                            7,585              7,876
         Other income, net                            (392)               (82)
           Total                                   549,557            561,294
 
     Income before income taxes                     20,823             31,930
 
     Income tax provision                            7,700             11,823
 
         Net income                                $13,123            $20,107
 
     Basic earnings per common
       share                                         $0.73              $1.12
 
     Diluted earnings per common
       share                                         $0.72              $1.10
 
     Cash dividends declared
       per common share:
         Class A common shares                       $0.33              $0.33
         Class B common shares                       $0.30              $0.30
 
     Basic weighted-average
       common shares outstanding                    17,936             17,912
     Dilutive effect of stock-
       based compensation awards                       279                294
     Diluted weighted-average common
       shares outstanding                           18,215             18,206
 
     Retained Earnings
       Retained earnings at
         beginning of period                      $722,515           $678,170
       Net income                                   13,123             20,107
       Cash dividends declared                      (5,707)            (5,697)
       Retained earnings at
         end of period                            $729,931           $692,580
 
 
     SPRINGS INDUSTRIES, INC.
     Condensed Consolidated Balance Sheets
     (In thousands except share data)
     (Unaudited)
 
                                                   March 31,          April 1,
                                                       2001              2000
     Assets
     Current assets:
       Cash and cash equivalents                     $8,432           $11,868
       Accounts receivable, net                     336,947           355,620
       Inventories, net                             499,680           487,366
       Other                                         36,183            37,564
         Total current assets                       881,242           892,418
 
     Property                                     1,501,060         1,471,760
       Accumulated depreciation                    (880,388)         (843,349)
         Property, net                              620,672           628,411
     Goodwill and other assets, net                 129,000           126,013
         Total assets                            $1,630,914        $1,646,842
 
     Liabilities and Shareholders' Equity
     Current liabilities:
       Short-term borrowings                        $53,250           $48,400
       Current maturities of long-term
        debt                                         29,659            20,537
       Accounts payable                             103,020            99,277
       Other accrued liabilities                    112,567           117,870
         Total current liabilities                  298,496           286,084
 
     Noncurrent liabilities:
       Long-term debt                               305,128           360,396
       Accrued benefits and deferred
        compensation                                168,292           174,850
       Other                                         38,282            36,023
         Total noncurrent liabilities               511,702           571,269
 
     Shareholders' equity:
       Class A common stock - $.25 par
        value
         (10,880,326 and 10,851,685 shares
          issued
         in fiscal 2001 and 2000,
          respectively)                               2,720             2,713
       Class B common stock - $.25 par
        value
         (7,151,563 and 7,155,363 shares
          issued
         and outstanding in fiscal 2001
          and 2000,
         respectively)                                1,788             1,789
       Additional paid-in capital                   104,554           103,614
       Retained earnings                            729,931           692,580
       Cost of Class A common stock in
        treasury
         (89,852 and 94,561 shares in
          fiscal 2001
         and 2000, respectively)                     (2,059)           (2,157)
       Accumulated other comprehensive
        loss                                        (16,218)           (9,050)
         Total shareholders' equity                 820,716           789,489
         Total liabilities and
          shareholders' equity                   $1,630,914        $1,646,842
 
 

SOURCE Springs Industries, Inc.
    FORT MILL, S.C., April 18 /PRNewswire/ -- Springs Industries, Inc.
 (NYSE:   SMI) today reported sales and earnings for the first quarter of 2001
 that were in line with expectations and lower than the record sales and
 earnings reported in the prior year.  Net sales were $570.4 million, down 3.9
 percent from $593.2 million in the first quarter of 2000.  "While retail
 conditions in the home furnishings marketplace continue to be impacted by
 pressure on consumer disposable income, our performance was in line with
 expectations," said Crandall C. Bowles, Springs chairman and chief executive
 officer.  "Although first quarter sales were lower than last year's strong
 performance, we remain encouraged that our focus on key accounts resulted in
 an overall sales volume increase with our top ten customers."
     Net income before an unusual item for the first quarter of 2001 was $14.5
 million, or $.80 per diluted share, down from $20.1 million, or $1.10 per
 diluted share in the first quarter of 2000.  The decrease in operating
 earnings from the first quarter of 2000 reflects the impact of lower sales
 volume, a higher mix of low margin off-quality and closeout merchandise sales,
 the negative impact of production curtailments to reduce inventory in light of
 softening sales, and higher energy costs.  First quarter 2001 net income also
 included a pre-tax charge of $2.3 million for professional services associated
 with the evaluation by the Special Committee of the Board of Directors of the
 previously announced proposal from the Close family and Heartland Industrial
 Partners, L.P. to take Springs private in a recapitalization transaction.
 Including the impact of this unusual item, first-quarter net income for 2001
 was $13.1 million, or $0.72 per diluted share.
     "We expect that sales growth and margin improvement will be impacted by
 continuing retail softness and inventory reduction efforts during the second
 quarter, and our outlook for improvement in the second half of 2001 remains
 guarded," said Mrs. Bowles.  Sales growth is expected to be in the range of
 flat to a positive 2 percent growth in the second quarter and a positive 1 to
 2 percent for the full year.  Net income, excluding the costs associated with
 the proposed recapitalization, is presently expected to be in the range of
 $.95 to $1.05 for the second quarter of 2001 and in the range of $3.95 to
 $4.14 for the full year 2001.
     Springs Industries (NYSE:   Ticker Symbol SMI) supplies leading retailers
 with a complete line of sheets, towels, comforters, window treatments and
 other coordinated home fashions designed to simplify home decorating for every
 consumer.  Our major brands are Wamsutta(R), Springmaid(R), Regal(R),
 Graber(R), Bali(R), Nanik(R), and Dundee(R).  Springs also markets bed and
 bath products for institutional and hospitality customers, home sewing
 fabrics, and baby bedding and baby apparel products.  The Company operates
 facilities in 13 U.S. states and owns marketing and distribution subsidiaries
 in Canada and Mexico.
     This press release contains forward-looking statements within the meaning
 of applicable securities laws.  These statements are based upon the Company's
 current expectations and assumptions, which are subject to a number of risks
 and uncertainties including the health of the retail economy in general,
 competitive conditions and the ability of the company to meet its cost-
 reduction goals, along with other factors which are discussed in certain of
 the company's SEC filings.
     www.springs.com
 
 
     SPRINGS INDUSTRIES, INC.
     Condensed Consolidated Statements of Operations
     (In thousands except per share amounts)
     (Unaudited)
 
                                                     Thirteen Weeks Ended
                                                  March 31,           April 1,
                                                      2001               2000
     Operations
       Net sales                                  $570,380           $593,224
 
       Cost and expenses:
         Cost of goods sold                        470,017            478,167
         Selling, general and
           administrative expenses                  67,813             74,318
         Provision for uncollectible
           receivables                               2,284              1,015
         Expenses related to merger
           proposal                                  2,250                 --
         Interest expense                            7,585              7,876
         Other income, net                            (392)               (82)
           Total                                   549,557            561,294
 
     Income before income taxes                     20,823             31,930
 
     Income tax provision                            7,700             11,823
 
         Net income                                $13,123            $20,107
 
     Basic earnings per common
       share                                         $0.73              $1.12
 
     Diluted earnings per common
       share                                         $0.72              $1.10
 
     Cash dividends declared
       per common share:
         Class A common shares                       $0.33              $0.33
         Class B common shares                       $0.30              $0.30
 
     Basic weighted-average
       common shares outstanding                    17,936             17,912
     Dilutive effect of stock-
       based compensation awards                       279                294
     Diluted weighted-average common
       shares outstanding                           18,215             18,206
 
     Retained Earnings
       Retained earnings at
         beginning of period                      $722,515           $678,170
       Net income                                   13,123             20,107
       Cash dividends declared                      (5,707)            (5,697)
       Retained earnings at
         end of period                            $729,931           $692,580
 
 
     SPRINGS INDUSTRIES, INC.
     Condensed Consolidated Balance Sheets
     (In thousands except share data)
     (Unaudited)
 
                                                   March 31,          April 1,
                                                       2001              2000
     Assets
     Current assets:
       Cash and cash equivalents                     $8,432           $11,868
       Accounts receivable, net                     336,947           355,620
       Inventories, net                             499,680           487,366
       Other                                         36,183            37,564
         Total current assets                       881,242           892,418
 
     Property                                     1,501,060         1,471,760
       Accumulated depreciation                    (880,388)         (843,349)
         Property, net                              620,672           628,411
     Goodwill and other assets, net                 129,000           126,013
         Total assets                            $1,630,914        $1,646,842
 
     Liabilities and Shareholders' Equity
     Current liabilities:
       Short-term borrowings                        $53,250           $48,400
       Current maturities of long-term
        debt                                         29,659            20,537
       Accounts payable                             103,020            99,277
       Other accrued liabilities                    112,567           117,870
         Total current liabilities                  298,496           286,084
 
     Noncurrent liabilities:
       Long-term debt                               305,128           360,396
       Accrued benefits and deferred
        compensation                                168,292           174,850
       Other                                         38,282            36,023
         Total noncurrent liabilities               511,702           571,269
 
     Shareholders' equity:
       Class A common stock - $.25 par
        value
         (10,880,326 and 10,851,685 shares
          issued
         in fiscal 2001 and 2000,
          respectively)                               2,720             2,713
       Class B common stock - $.25 par
        value
         (7,151,563 and 7,155,363 shares
          issued
         and outstanding in fiscal 2001
          and 2000,
         respectively)                                1,788             1,789
       Additional paid-in capital                   104,554           103,614
       Retained earnings                            729,931           692,580
       Cost of Class A common stock in
        treasury
         (89,852 and 94,561 shares in
          fiscal 2001
         and 2000, respectively)                     (2,059)           (2,157)
       Accumulated other comprehensive
        loss                                        (16,218)           (9,050)
         Total shareholders' equity                 820,716           789,489
         Total liabilities and
          shareholders' equity                   $1,630,914        $1,646,842
 
 SOURCE  Springs Industries, Inc.