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Previous: WESBANCO INC, 10-Q, 1994-11-10 |
Next: DAUPHIN DEPOSIT CORP, 10-Q, 1994-11-10 |
<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
Commission File Number 0-255
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
--------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------------ -----------
GRAYBAR ELECTRIC COMPANY, INC
------------------------------------------------------
(Exact name of registrant as specified in its charter)
NEW YORK 13 - 0794380
- - --------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.
34 NORTH MERAMEC AVENUE, ST. LOUIS, MO 63105
- - --------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
POST OFFICE BOX 7231, ST. LOUIS, MO 63177
- - --------------------------------------------------------------------------
(Mailing Address) (Zip Code)
Registrant's telephone number, including area code: (314) 727-3900
----------------------
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 for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES X NO
------- -------
Common Stock Outstanding at October 31, 1994: 4,326,940
------------------------
(Number of Shares)
<PAGE> 2
<TABLE>
PART I
------
CONSOLIDATED BALANCE SHEETS
---------------------------
(Dollars Stated in Thousands)
(Except for Share and Per Share Data)
<CAPTION>
SEPTEMBER 30, 1994 DECEMBER 31, 1993
================== =================
<S> <C> <C>
CURRENT ASSETS
Cash $ 34,528 $ 17,332
------------------ -----------------
Trade receivables 305,291 256,634
------------------ -----------------
Merchandise inventory 213,087 167,927
------------------ -----------------
Other current assets 11,162 10,099
------------------ -----------------
Total current assets 564,068 451,992
------------------ -----------------
PROPERTY
Land 18,231 16,812
------------------ -----------------
Buildings and permanent fixtures 202,572 190,005
------------------ -----------------
Capital equipment leases 30,416 29,612
------------------ -----------------
Less-Accumulated depreciation 106,222 99,494
------------------ -----------------
Net property 144,997 136,935
------------------ -----------------
DEFERRED FEDERAL INCOME TAXES 15,250 14,446
------------------ -----------------
OTHER ASSETS 8,207 7,139
------------------ -----------------
$ 732,522 $ 610,512
================== =================
CURRENT LIABILITIES
Notes payable to banks $ 92,381 $ 82,194
------------------ -----------------
Current portion of long-term debt 13,207 11,000
------------------ -----------------
Trade accounts payable 248,607 193,843
------------------ -----------------
Income taxes 3,550 519
------------------ -----------------
Other accrued taxes 7,516 6,375
------------------ -----------------
Accrued payroll and benefit costs 25,509 27,643
------------------ -----------------
Dividends payable --- 4,910
------------------ -----------------
Other payables and accruals 23,512 5,589
------------------ -----------------
Total current liabilities 414,282 332,073
------------------ -----------------
POSTRETIREMENT BENEFITS LIABILITY 73,750 73,000
------------------ -----------------
LONG TERM DEBT 92,223 63,621
------------------ -----------------
</TABLE>
2
<PAGE> 3
<TABLE>
CONSOLIDATED BALANCE SHEETS
---------------------------
(Dollars Stated in Thousands)
(Except for Share and Per Share Data)
<CAPTION>
SEPTEMBER 30, 1994 DECEMBER 31, 1993
================== =================
<S> (C> <C> <C> <C>
SHAREHOLDERS' EQUITY
CAPITAL STOCK
Preferred:
---------
Par value $20 per share
Authorized 300,000 shares
SHARES
------
1994 1993
---- ----
Issued to voting trustees 9,533 9,533
------------- --------------
In treasury, at cost (1,220) (378)
------------- --------------
Outstanding 8,313 9,155 166 183
------------- -------------- ----------------- ----------------
Common:
------
Stated value $20 per share
Authorized 5,000,000 shares
SHARES
------
1994 1993
---- ----
Issued to voting trustees 4,259,156 4,239,403
------------- --------------
Issued to shareholders 241,349 240,991
------------- --------------
In treasury, at cost (165,356) (25,507)
------------- --------------
Outstanding 4,335,149 4,454,887 86,703 89,098
------------- -------------- ----------------- ----------------
Common shares subscribed 683 1,088
----------------- ----------------
Retained earnings 65,350 52,486
----------------- ----------------
Less-Subscriptions receivable 635 1,037
----------------- ----------------
Total shareholders' equity 152,267 141,818
----------------- ----------------
$ 732,522 $ 610,512
================= ================
See accompanying Notes to Consolidated Financial Statements
</TABLE>
3
<PAGE> 4
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(Dollars Stated in Thousands)
(Except for Share and Per Share Data)
<CAPTION>
QUARTER ENDED
SEPTEMBER 30, 1994 SEPTEMBER 30, 1993
================== ==================
<S> <C> <C>
GROSS SALES, net of returns and allowances $ 630,323 $ 539,080
----------------- -------------------
Less - Cash discounts 2,389 2,135
----------------- -------------------
NET SALES 627,934 536,945
----------------- -------------------
COST OF MERCHANDISE SOLD 517,328 442,960
----------------- -------------------
Gross profit 110,606 93,985
----------------- -------------------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 92,521 80,409
----------------- -------------------
DEPRECIATION AND AMORTIZATION 4,124 3,636
----------------- -------------------
Income from operations 13,961 9,940
----------------- -------------------
OTHER INCOME, net 699 318
----------------- -------------------
INTEREST EXPENSE 3,161 1,974
----------------- -------------------
Income before provision for income taxes
and cumulative effect of accounting change 11,499 8,284
----------------- -------------------
PROVISION FOR INCOME TAXES
Current 5,293 3,150
----------------- -------------------
Deferred (349) (290)
----------------- -------------------
Total provision for income taxes 4,944 2,860
----------------- -------------------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE 6,555 5,424
----------------- -------------------
CUMULATIVE EFFECT ON PRIOR YEARS OF CHANGE IN
ACCOUNTING FOR POSTRETIREMENT BENEFITS --- ---
----------------- -------------------
NET INCOME 6,555 5,424
================= ===================
INCOME PER SHARE OF COMMON STOCK BEFORE
CUMULATIVE EFFECT OF ACCOUNTING CHANGE $ 1.51 $ 1.20
----------------- -------------------
NET INCOME PER SHARE OF COMMON STOCK $ 1.51 $ 1.20
================= ===================
DIVIDENDS
Preferred - $.25 per share $ 3 $ 2
----------------- -------------------
Common - $.30 per share 1,300 1,351
----------------- -------------------
$ 1,303 $ 1,353
================= ===================
See accompanying Notes to Consolidated Financial Statements
</TABLE>
4
<PAGE> 5
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(Dollars Stated in Thousands)
(Except for Share and Per Share Data)
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, 1994 SEPTEMBER 30, 1993
================== ==================
<S> <C> <C>
GROSS SALES, net of returns and allowances $ 1,731,675 $ 1,509,346
------------------ --------------------
Less - Cash discounts 6,369 6,116
------------------ --------------------
NET SALES 1,725,306 1,503,230
------------------ --------------------
COST OF MERCHANDISE SOLD 1,415,278 1,237,463
------------------ --------------------
Gross profit 310,028 265,767
------------------ --------------------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 261,918 232,920
------------------ --------------------
DEPRECIATION AND AMORTIZATION 11,765 10,799
------------------ --------------------
Income from operations 36,345 22,048
------------------ --------------------
OTHER INCOME, net 1,698 1,250
------------------ --------------------
INTEREST EXPENSE 8,567 7,471
------------------ --------------------
Income before provision for income taxes
and cumulative effect of accounting change 29,476 15,827
------------------ --------------------
PROVISION FOR INCOME TAXES
Current 13,479 6,173
------------------ --------------------
Deferred (804) (446)
------------------ --------------------
Total provision for income taxes 12,675 5,727
------------------ --------------------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE 16,801 10,100
------------------ --------------------
CUMULATIVE EFFECT ON PRIOR YEARS OF CHANGE IN
ACCOUNTING FOR POSTRETIREMENT BENEFITS --- 45,000
------------------ --------------------
NET INCOME (LOSS) 16,801 (34,900)
================== ====================
INCOME PER SHARE OF COMMON STOCK BEFORE
CUMULATIVE EFFECT OF ACCOUNTING CHANGE (NOTE 2) $ 3.83 $ 2.24
------------------ --------------------
NET INCOME (LOSS) PER SHARE OF COMMON STOCK (NOTE 2) $ 3.83 $ (7.75)
================== ====================
DIVIDENDS
Preferred - $.75 per share $ 7 $ 7
------------------ --------------------
Common - $.90 per share 3,930 4,074
------------------ --------------------
$ 3,937 $ 4,081
================== ====================
See accompanying Notes to Consolidated Financial Statements
</TABLE>
5
<PAGE> 6
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(Dollars Stated in Thousands)
(Except for Share and Per Share Data)
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
1994 1993
==== ====
<S> <C> <C>
CASH FLOWS FROM OPERATIONS
Income before cumulative effect of accounting change $ 16,801 $ 10,100
------------------ ------------------
Adjustments to reconcile income before cumulative effect of
accounting change to cash provided by operations:
Depreciation and amortization 11,765 10,799
------------------ ------------------
Deferred income taxes (804) (446)
------------------ ------------------
Changes in assets and liabilities:
Trade receivables (48,657) (23,796)
------------------ ------------------
Merchandise inventory (45,160) (9,571)
------------------ ------------------
Other current assets (1,063) 1,493
------------------ ------------------
Other assets (1,068) 938
------------------ ------------------
Trade accounts payable 54,764 32,783
------------------ ------------------
Accrued payroll and benefit costs (2,134) (5,563)
------------------ ------------------
Other accrued liabilities 22,845 8,891
------------------ ------------------
(9,512) 15,528
------------------ ------------------
Net cash provided by operations 7,289 25,628
------------------ ------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property 133 138
------------------ ------------------
Capital expenditures for property (15,829) (9,893)
------------------ ------------------
Net cash used by investing activities (15,696) (9,755)
------------------ ------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in notes payable to banks 10,187 (3,158)
------------------ ------------------
Proceeds from long-term debt 35,000 10,000
------------------ ------------------
Repayment of long-term debt (4,521) (2,387)
------------------ ------------------
Principal payments under capital equipment leases (3,801) (3,393)
------------------ ------------------
Sale of common stock 399 6,135
------------------ ------------------
Purchase of treasury stock (2,814) (1,833)
------------------ ------------------
Dividends paid (8,847) (8,619)
------------------ ------------------
Net cash flow provided (used) by financing activities 25,603 (3,255)
------------------ ------------------
NET INCREASE IN CASH 17,196 12,618
------------------ ------------------
CASH, BEGINNING OF YEAR 17,332 16,538
------------------ ------------------
CASH, END OF THIRD QUARTER $ 34,528 $ 29,156
================== ==================
See accompanying Notes to Consolidated Financial Statements
</TABLE>
6
<PAGE> 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AND OTHER INFORMATION
--------------------------
(Dollars Stated in Thousands)
(Except for Share and Per Share Data)
Note 1
- - ------
The condensed financial statements included herein have been prepared
by the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading. It is suggested that these condensed financial
statements be read in conjunction with the financial statements and the
notes thereto included in the Company's latest annual report on Form 10-K.
In the opinion of the Company, the quarterly report includes all
adjustments, consisting of normal recurring accruals, necessary for the
fair presentation of the financial statements presented. Such interim
financial information is subject to year-end adjustments and independent
audit.
Results for interim periods are not necessarily indicative of results
to be expected for the full year.
Note 2
- - ------
<TABLE>
<CAPTION>
NINE MONTHS 1994 NINE MONTHS 1993
================ ================
<S> <C> <C>
Earnings for Nine Months Before
Cumulative Effect of Accounting Change $ 16,801 $ 10,100
------------------ ---------------------
Cumulative Effect on Prior Years of Change
in Accounting for Postretirement Benefits --- (45,000)
------------------ ---------------------
Earnings (Loss) for Nine Months $ 16,801 $ (34,900)
------------------ ---------------------
Dividends on Preferred Stock 7 7
------------------ ---------------------
Available for Common Stock $ 16,794 $ (34,907)
------------------ ---------------------
Average Common Shares Outstanding 4,381,329 4,504,039
------------------ ---------------------
Earnings Per Share Before Cumulative
Effect of Accounting Change $ 3.83 $ 2.24
------------------ ---------------------
Earnings (Loss) Per Share $ 3.83 $ (7.75)
------------------ ---------------------
</TABLE>
7
<PAGE> 8
MANAGEMENT'S DISCUSSION & ANALYSIS
OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
(Dollars Stated in Thousands)
RESULTS OF OPERATIONS
- - ---------------------
Net sales in the first nine months of 1994 were 14.8% higher than in
the first nine months of 1993. The higher net sales resulted from
improvements in the market sectors of the economy in which the Company
operates.
Gross profit in the first nine months of 1994 increased $44,261
(16.7%) compared to the first nine months of 1993 primarily due to
increased sales in the electrical and communication markets.
The increase in selling, general and administrative expenses in the
first nine months of 1994 compared to the first nine months of 1993
occurred largely because of adjustments in personnel complement and
adjustments in compensation and related expenses.
Interest charges increased in the first nine months of 1994 compared
to the first nine months of 1993 primarily due to increased levels of
borrowing incurred to finance higher levels of inventories and receivables.
Interest rates on 1994 short-term borrowings have been generally higher
than for the same period in 1993.
The combined effect of the increases in gross profits and other
income, together with increases in selling, general and administrative
expenses, interest charges and depreciation and amortization, resulted in
an increase in pretax earnings prior to the cumulative effect of the
accounting change of $13,649 in the first nine months of 1994 compared to
the same period in 1993.
The Company adopted Statement of Financial Accounting Standards
(SFAS) No. 106, "Employers' Accounting for Postretirement Benefits Other
Than Pensions", on January 1, 1993 on the immediate recognition basis. The
after-tax impact of the accounting change decreased nine months 1993
earnings $45,000, or $9.99 per share.
8
<PAGE> 9
MANAGEMENT'S DISCUSSION & ANALYSIS
OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
(Dollars Stated in Thousands)
FINANCIAL CONDITION AND LIQUIDITY
- - ---------------------------------
The financial condition of the Company continues to be strong. At
September 30, 1994, current assets exceeded current liabilities by
$149,786, up $29,867 from December 31, 1993. The current assets at
September 30, 1994 were sufficient to meet the cash needs required to pay
current liabilities. The Company does not have any plans or commitments
which would require significant amounts of additional working capital.
At September 30, 1994, the Company had available to it unused lines
of credit amounting to $112,000. These lines are available to meet short-
term cash requirements of the Company. Bank borrowings outstanding during
1994 through September 30 ranged from a minimum of $54,000 to a maximum of
$132,000.
The Company has funded its capital requirements from operations,
stock issuances to its employees and long term debt. In May, 1994, the
Company received the proceeds from a ten-year note for $35,000 at a fixed
interest rate of 6.25% with principal payable in five equal annual
installments in each of the years 2000 through 2004. The note agreement
has various covenants which limit the Company's ability to make
investments, pay dividends, incur debt, dispose of property, and issue
equity securities. The Company is also required to maintain certain
financial ratios as defined in the agreement. During the first nine months
of 1994, cash provided by operations amounted to $7,289 which was $18,339
less than the cash provided by operations in the first nine months of 1993.
Cash provided from the sale of common stock and proceeds received on stock
subscriptions amounted to $399 in the first nine months of 1994.
Additional cash of approximately $139 will be provided in the remainder of
1994 as a result of payments to be made for stock subscribed to by
employees under the 1992 Common Stock Purchase Plan.
9
<PAGE> 10
PART II: OTHER INFORMATION
----------------------------
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits furnished in accordance with provisions of Item
7 of Regulation S-K.
(2) None
(4) None
(11) None
(15) None
(18) None
(19) None
(20) None
(23) None
(24) None
(25) None
(28) None
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the
quarter for which this report is filed.
10
<PAGE> 11
SIGNATURES
----------
Pursuant to the requirements 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.
November 10, 1994 GRAYBAR ELECTRIC COMPANY, INC.
-------------------------
(Date)
/S/ E. A. McGRATH
------------------------------
E. A. McGRATH
PRESIDENT
/S/ J. R. SEATON
------------------------------
J. R. SEATON
VICE PRESIDENT
AND COMPTROLLER
11
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
<CASH> 34,528
<SECURITIES> 0
<RECEIVABLES> 305,291
<ALLOWANCES> 0
<INVENTORY> 213,087
<CURRENT-ASSETS> 564,068
<PP&E> 251,219
<DEPRECIATION> 106,222
<TOTAL-ASSETS> 732,522
<CURRENT-LIABILITIES> 414,282
<BONDS> 92,223
<COMMON> 86,703
0
166
<OTHER-SE> 65,398
<TOTAL-LIABILITY-AND-EQUITY> 732,522
<SALES> 1,725,306
<TOTAL-REVENUES> 1,725,306
<CGS> 1,415,278
<TOTAL-COSTS> 1,415,278
<OTHER-EXPENSES> 273,683
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,567
<INCOME-PRETAX> 29,476
<INCOME-TAX> 12,675
<INCOME-CONTINUING> 16,801
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,801
<EPS-PRIMARY> 3.83
<EPS-DILUTED> 3.83
</TABLE>
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