Shaw Reports 3Q Earnings
Third quarter sales were $1,035,925,000 compared to $1,082,923,000 for the same period last year. Sales for the nine months were $3,091,777,000 compared to $3,103,852,000 in the same period last year. Sales for the third quarter and nine month period of 1999 include incremental sales of $32,807,000 and $51,609,000, respectively, related to the Company's Australian subsidiary which was disposed of on May 4, 2000. During the third quarter, the Company recorded a nonrecurring charge of $35,449,000 ($21,305,000, net of tax benefit, or $.17 per share) to reflect its estimated liability for guarantees it had made of certain retail store lease obligations no longer being satisfied by Flooring America, Inc. Also during the third quarter, the Company recorded a nonrecurring charge of $27,500,000 ($16,528,000, net of tax benefit, or $.13 per share) related to the pending settlement of two class action antitrust suits.
During the second quarter of 2000, the Company recorded a nonrecurring charge of $6,600,000 ($3,967,000, net of tax benefit, or $.03 per share) related to a sales force restructuring initiative and a charge of $26,458,000 ($15,901,000, net of tax benefit, or $.12 per share) to reflect the impact of the Flooring America, Inc. bankruptcy filing. The charge consists of approximately $15,333,000 of accounts receivable owed by Flooring America and charged against S,G&A in the accompanying income statement and approximately $11,125,000 of notes and related interest receivable connected to the sale of the Company's retail operations in 1998.
After the nonrecurring charges, the Company reported net earnings for the third quarter of $672,000, or $.01 per share, and net earnings for the nine months ended September 30, 2000, of $83,526,000, or $.65 per share.
With respect to the proposed purchase of the Company by Berkshire Hathaway and an investor group, the Company indicated that it expects to file a preliminary proxy statement with the SEC this week. Subject to possible SEC review of the proxy materials, the Company stated that it will distribute the proxy materials as soon as practicable to shareholders of record as of November 10, 2000. The Company is unable at this time to estimate the period of time necessary for the SEC to complete its review if, in fact, the SEC does determine to conduct a review of the Company's proxy material. Upon final determination by the SEC, the Executive Committee of the Company's Board of Directors will set the date for a special stockholders' meeting. The Company indicated that it estimated the closing of the transaction, if approved by the shareholders, would occur early in the first quarter of 2001.