<PAGE> 1
UNITED STATES CONFORMED
---------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
COMMISSION FILE NUMBER 0-255
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993.
-----------------
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 Identification No.)
incorporation or organization)
34 North Meramec Avenue, St. Louis, Missouri 63105
-----------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Post Office Box 7231, St. Louis, Missouri 63177
-----------------------------------------------------------------------
(Mailing Address) (Zip Code)
Registrant's telephone number, including area code (314) 727-3900
--------------------
Securities registered pursuant to Section 12(b) of the Act: None
----
Securities registered pursuant to Section 12(g) of the Act:
Preferred Stock - Par Value $20
Common Stock - Par Value $1 Per Share with a
Stated Value of $20
Voting Trust Certificates relating to such
Shares of Common Stock of the Registrant
Common Stock
outstanding at
March 28, 1994 - 4,395,510 Shares
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, and (2) has been subject to such
filing requirements for the past 90 days.
Yes (X) No ( )
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (Paragraph 229.405 of this chapter) 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. (X)
The aggregate stated value of the Common Stock outstanding and, with
respect to rights of disposition, beneficially owned by nonaffiliates (as
defined in Rule 405 under the Securities Act of 1933) of the registrant on
March 28, 1994, was approximately $87,910,200. Pursuant to a Voting Trust
Agreement, dated as of April 15, 1987, approximately 95% of the outstanding
shares of Common Stock are held of record by four Voting Trustees who are each
directors of the registrant and who collectively exercise all voting rights
with respect to such shares. The registrant is 100% owned by its active and
retired employees, and there is no public trading market for the registrant's
Common Stock. The registrant has the option to repurchase, at the price at
which it was issued, each outstanding share of Common Stock in the event of the
owner's death, termination of employment other than by retirement, or desire to
dispose of such shares. Historically all shares of Common Stock have been
issued for $20 per share, and the registrant has always exercised its
repurchase option and expects to continue to do so.
The documents listed below have been incorporated by reference into
the indicated Part of this Annual Report on Form 10-K:
(1) Annual Report to Shareholders Part II,
Items 5-8 for the fiscal year ended
December 31, 1993.
(2) Information Statement relating Part III,
Items 10-13 to the 1994 Annual Meeting of
Shareholders.
<PAGE> 2
PART I
------
Item 1. Business
------- --------
Graybar Electric Company, Inc. (the "Company") is engaged
internationally in the wholesale distribution of electrical and
communications equipment and supplies primarily to contractors,
industrial plants, independent telephone companies, power
utilities, and commercial users. All products sold by the Company
are purchased from others.
The Company was incorporated under the laws of the State of
New York on December 11, 1925 to take over the wholesale supply
department of Western Electric Company, Incorporated. The
location and telephone number of the principal executive offices
of the Company are 34 North Meramec Avenue, St. Louis, Missouri
(314) 727-3900, and the mailing address of the principal executive
offices is P.O. Box 7231, St. Louis, Missouri 63177.
Suppliers
---------
The Company acts as a distributor of the products of more
than 1,000 manufacturers. The relationship of the Company with a
number of its principal suppliers goes back many years. It is
customarily a nonexclusive national or regional distributorship
terminable upon 30 to 90 days notice by either party.
- 2 -
<PAGE> 3
During 1993, the Company purchased a significant portion of
its products from its two largest suppliers. The termination by
either of these companies, within a short period of time, of a
significant number of their agreements with the Company might have
an immediate material adverse effect on the business of the
Company, but the Company believes that within a reasonable period
of time it could find alternate sources of supply adequate to
alleviate such adverse effect.
Products Distributed
--------------------
The Company distributes more than 100,000 different products
and, therefore, is able to supply its customers with a wide
variety of electrical and communications products. The products
distributed by the Company are supply materials consisting
primarily of products such as wire, conduit, wiring devices,
tools, motor controls, transformers, lamps, lighting fixtures,
hardware, power transmission equipment, telephone station
apparatus, key systems and other telephone equipment, and are sold
to customers such as contractors (both industrial and
residential), industrial plants, independent telephone companies,
private and public power utilities, and commercial users.
- 3 -
<PAGE> 4
On December 31, 1993 and 1992, the Company had orders on
hand which totalled approximately $174,928,000 and $175,792,000,
respectively. The Company believes that the small decrease from
1992 to 1993 is a result of significantly higher sales during the
month of December, 1993 than the Company has historically
experienced. The Company expects that approximately 85% of the
orders on hand at December 31, 1993 will be filled within the
twelve-month period ending December 31, 1994. Historically,
orders on hand for the Company's products have been firm, but
customers from time to time request cancellation and the Company
has historically allowed such cancellations.
- 4 -
<PAGE> 5
Marketing
---------
The Company sells its products through a network of distri-
buting houses located in 17 geographical districts throughout the
United States. In each district the Company maintains a main
distributing house and a number of branch distributing houses,
each of which carries an inventory of supply materials and
operates as a wholesale distributor for the territory in which it
is located. The main distributing house in each district carries
a substantially larger inventory than the branch houses so that
the branch houses can call upon the main distributing house for
additional items of inventory. In addition, the Company maintains
four (4) zone warehouses with special inventories so all locations
can call upon them for additional items. The Company also has
subsidiary operations with distribution facilities located in
Mankato, Minnesota, Parsippany and Hackettstown, New Jersey,
Puerto Rico, Mexico, Panama, Guam, Singapore, Canada and the
United Arab Emirates.
- 5 -
<PAGE> 6
The distribution facilities operated by the Company are
shown in the following table:
<TABLE>
<CAPTION>
Location Number of
of Main Distributing
Distributing Houses in
House District
------------ ------------
<S> <C>
Boston, MA............................. 9
Cincinnati, OH......................... 8
Dallas, TX............................. 21
Glendale Heights, IL................... 14
Los Angeles, CA ....................... 10
Miami, FL.............................. 1
Minneapolis, MN........................ 16
New York, N.Y.......................... 10
Norcross, GA........................... 17
Philadelphia, PA....................... 7
Phoenix, AZ............................ 12
Pittsburgh, PA......................... 8
Richmond, VA........................... 12
South San Francisco, CA................ 10
Seattle, WA............................ 8
St. Louis, MO.......................... 13
Tampa, FL.............................. 24
Zone Distributing Houses
------------------------
Bethlehem, PA.......................... 1
Peoria, IL............................. 1
Shreveport, LA......................... 1
Upland, CA............................. 1
Graybar International, Inc.
---------------------------
Puerto Rico........................... 1
Graybar Minnesota, Inc.
-----------------------
Mankato, MN........................... 1
<CAPTION>
Number of
Distributing
Houses
------------
Graybar Free Zone, S.A.
-----------------------
Panama.................................. 1
Graybar de Mexico, S.A. de CV
-----------------------------
Juarez, Mexico.......................... 1
Graybar International Guam, Inc.
--------------------------------
Tamuning, Guam.......................... 1
Graybar-P&M
-----------
International PTE, Ltd.
----------------------
Singapore............................... 1
Graybar Electric Ltd.
---------------------
Canada................................. 21
Graybar Electirc (Ontario) Ltd.
-------------------------------
Canada.................................. 7
Graybar New Jersey, Inc.
------------------------
Parsippany, NJ.......................... 1
Hackettstown, NJ........................ 1
Graybar International (Middle
-----------------------------
East) Limited
-------------
United Arab Emirates.................... 1
</TABLE>
Where the specialized nature or size of a particular
shipment warrants, the Company has products shipped directly from
its suppliers to the place of use, while in other cases orders are
filled from the Company's inventory. On a dollar volume basis,
over one-half of the orders are filled from the Company's
inventory and the remainder are shipped directly from the supplier
to the place of use. The Company generally finances its inventory
from internally generated funds and from long and short-term
borrowings.
- 6 -
<PAGE> 7
The Company distributes its products to more than 150,000
customers, which fall into five general classes. The following
list shows the estimated percentage of the Company's total sales
for each of the three years ended December 31, attributable to
each of these classes:
<TABLE>
<CAPTION>
CLASS OF CUSTOMERS PERCENTAGE OF SALES
------------------ -------------------
1993 1992 1991
------ ------ ------
<S> <C> <C> <C>
Electrical contractors 40.8% 42.4% 42.8%
Industrial plants 31.3 29.9 30.1
Telecommunication companies 18.7 17.3 16.3
Private and public power utilities 7.0 7.8 8.5
Miscellaneous 2.2 2.6 2.3
------ ------ ------
100.0% 100.0% 100.0%
====== ====== ======
</TABLE>
- 7 -
<PAGE> 8
At December 31, 1993, the Company employed approximately
1,880 persons in sales capacities. Approximately 880 of these
sales personnel were supply sales representatives who work in the
field making sales to customers at the work site. The remainder
of the sales personnel were sales and marketing managers, and
telemarketing, advertising, quotation, counter and clerical
personnel.
Competition
-----------
The Company believes that it is the largest distributor of
electrical products not affiliated with a manufacturing company,
and one of the three largest distributors of such products in the
United States. The field is highly competitive, and the Company
estimates that the three largest distributors of electrical
products account for only a small portion of the total market,
with the balance of the market being accounted for by independent
distributors and manufacturers operating on a local, state-wide or
regional basis.
The Company believes that its competitive position is
primarily a result of its ability to supply its customers through
conveniently located distribution facilities with a broad range of
electrical and telecommunications supply materials within a short
period of time. Price is also important, particularly where the
Company is asked to submit bids to contractors in connection with
large construction jobs.
- 8 -
<PAGE> 9
Employees
---------
At December 31, 1993, the Company employed approximately
5,100 persons on a full-time basis. Approximately 130 of these
persons were covered by union contracts. The Company has not had
a material work stoppage and considers its relations with its
employees to be good.
Item 2. Properties
------- ----------
As of December 31, 1993 the Company operated offices and
distribution facilities in 222 locations. Of these, 131 were
owned by the Company, and the balance were leased. The leases are
for varying terms, the majority having a duration of less than
five years.
The Company's distribution facilities consist primarily of
warehouse space. A small portion of the space in each facility is
used for offices. Distribution facilities vary in size from
approximately 3,000 square feet to 152,000 square feet, the
average being 30,000 square feet.
As of December 31, 1993, approximately $48.6 million in debt
of the Company was secured by mortgages on thirty-four buildings.
Twenty of these facilities are subject to a first mortgage
securing a 12 1/4% note, of which approximately $14.5 million in
principal amount remains outstanding. Seven of these facilities
are subject to a first mortgage securing a 9 23/100% note, of
which $30.0 million in principal amount remains outstanding.
- 9 -
<PAGE> 10
Distribution houses in Norcross, Georgia; Salt Lake City, Utah;
Pinellas County and Polk County, Florida; Tucson, Arizona;
Beaumont, Texas and Glendale Heights, Illinois are subject to
mortgages securing Industrial Revenue Bonds at variable interest
rates with payments totaling $4.1 million due periodically to
2004.
Item 3. Legal Proceedings
------- -----------------
The Company has been named, together with numerous other
companies, as a co-defendant in actions by approximately 1,700
plaintiffs which have been filed in various federal and state
courts in Arkansas, California, Louisiana, Maryland, Mississippi,
New Hampshire, New Jersey, New York, Ohio, Pennsylvania,
Washington, and West Virginia. The plaintiffs allege personal
injuries due to exposure to asbestos products and seek substantial
damages. The majority of the complaints do not identify any
products containing asbestos allegedly sold by the Company.
However, since all products sold by the Company have been and are
purchased from suppliers, if a plaintiff were to successfully
establish an asbestos-related injury claim with respect to a
product sold by the Company, the Company believes it would
normally have a claim against its supplier. Furthermore, the
Company believes it has product liability insurance coverage
available to cover these claims. Accordingly, based on
information now known to the Company, in the opinion of management
the ultimate disposition of the asbestos-related claims against
the Company will not have a materially adverse effect on the
Company's financial position.
- 10 -
<PAGE> 11
Item 4. Submission of Matters to a Vote of Security
------- Holders
-------------------------------------------
No matter was submitted to a vote of shareholders
during the fourth quarter of the fiscal year covered by this
Annual Report on Form 10-K.
PART II
-------
Item 5. Market for the Registrant's Common Stock
------- and Related Shareholder Matters
----------------------------------------
The Company is wholly owned by its active and retired
employees, and there is no public trading market for its Common
Stock, par value $1 per share with a stated value of $20 per
share. No shareholder may sell, transfer or otherwise dispose of
shares of Common Stock without first offering the Company the
option to purchase such shares at the price at which they were
issued. The Company also has the option to purchase the Common
Stock of any shareholder who dies or ceases to be an employee of
the Company for any cause other than retirement on a Company
pension. In the past all shares issued by the Company have been
issued at $20 per share, and the Company has always exercised its
repurchase option, and expects to continue to do so.
The information as to number of holders of Common Stock and
frequency and amount of dividends, required to be included
pursuant to this Item 5, is included under the captions "Capital
Stock Data" and "Dividend Data" on page 1 of the Company's Annual
Report to Shareholders for the year ended December 31, 1993, (the
"1993 Annual Report") furnished to the Securities and Exchange
Commission (the "Commission") pursuant to Rule 14c-3 under the
- 11 -
<PAGE> 12
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and such information is incorporated herein by reference.
Currently there are no restrictions in the Company's Restated
Certificate of Incorporation or its debt instruments that limit
the Company's ability to pay dividends on its Common Stock or that
the Company reasonably believes would be likely to limit
materially the future payment of such dividends.
Item 6. Selected Financial Data
------- -----------------------
The selected financial data for the Company as of
December 31, 1993 and for the five years then ended, which is
required to be included pursuant to this Item 6, is included under
the caption "Selected Consolidated Financial Data" on page 11 of
the 1993 Annual Report and is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of
------- Financial Condition and Results of Operations
---------------------------------------------
Management's discussion and analysis required to be
included pursuant to this Item 7 is included under the caption
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" on pages 12 and 13 of the 1993 Annual
Report and is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
------- -------------------------------------------
The financial statements required by this Item 8 are
listed in Item 14(a)(1) of this Annual Report on Form 10-K under
the caption "Index to Financial Statements."
- 12 -
<PAGE> 13
Such financial statements specifically referenced from the 1993
Annual Report in such list are incorporated herein by reference.
There is no supplementary financial information required by this
item which is applicable to the Company.
Item 9. Disagreements on Accounting and Financial
------ Disclosure
-----------------------------------------
None.
PART III
--------
Item 10. Directors and Executive Officers of the
------- Registrant
---------------------------------------
The information with respect to the directors and
executive officers of the Company required to be included pursuant
to this Item 10 will be included under the caption "Directors and
Executive Officers -- Nominees for Election as Directors" in the
Company's Information Statement relating to the 1994 Annual
Meeting (the "Information Statement"), to be filed with the
Commission pursuant to Rule 14c-5 under the Exchange Act, and is
incorporated herein by reference.
Item 11. Executive Compensation
-------- ----------------------
The information with respect to executive compensation
required to be included pursuant to this Item 11 will be included
under the captions "Executive Compensation" and "Pension Plan" in
the Information Statement and is incorporated herein by reference.
- 13 -
<PAGE> 14
Item 12. Security Ownership of Certain
------- Beneficial Owners and Management
--------------------------------
The information with respect to the security ownership
of beneficial owners of more than 5% of the Common Stock, the
directors of the Company and all directors and officers of the
Company, which is required to be included pursuant to this Item
12, will be included in the introductory language and under the
caption "Directors and Executive Officers -- Nominees for Election
as Directors" in the Information Statement and is incorporated
herein by reference.
Item 13. Certain Relationships
------- and Related Transactions
------------------------
The information with respect to any reportable
transactions, business relationships and indebtedness between the
Company and the beneficial owners of more than 5% of the Common
Stock, the directors or nominees for director of the Company, the
executive officers of the Company or the members of the immediate
families of such individuals, required to be included pursuant to
this Item 13, will be included under the caption "Directors and
Executive Officers" in the Information Statement and is
incorporated herein by reference.
- 14 -
<PAGE> 15
PART IV
-------
Item 14. Exhibits, Financial Statement Schedules,
-------- and Reports on Form 8-K
----------------------------------------
(a) Documents filed as part of this report:
--------------------------------------
The following financial statements and Report of
Independent Accountants are included on the indicated
pages in the 1993 Annual Report and are incorporated by
reference in this Annual Report on Form 10-K:
1. Index to Financial Statements
-----------------------------
(i) Consolidated Statements of Income and Retained
Earnings for each of the three years ended
December 31, 1993 (page 14).
(ii) Consolidated Balance Sheets, as of
December 31, 1993 and December 31, 1992
(page 15).
(iii) Consolidated Statements of Cash Flows
for each of the three years ended
December 31, 1993 (page 16).
(iv) Notes to Consolidated Financial Statements
(pages 17 to 20).
(v) Report of Independent Accountants relating to
above mentioned financial statements and notes
for each of the three years ended December 31,
1993 (page 21).
- 15 -
<PAGE> 16
2. Index to Financial Schedules
----------------------------
The following schedules for each of the three years
ended December 31, 1993, to the Financial Statements and Report of
Independent Accountants thereon is included on the indicated pages in
this Annual Report on Form 10-K:
(i) Schedule V. Property, Plant and Equipment
(page 21).
(ii) Schedule VI. Accumulated Depreciation of
Property, Plant and Equipment (page 22).
(iii) Schedule VIII. Reserves (page 23).
(iv) Report of Independent Accountants on
Financial Statement Schedules (page 20).
All schedules other than those indicated above are
omitted because of the absence of the conditions under which they
are required or because the required information is set forth in
the financial statements and the accompanying notes thereto.
3. Exhibits
--------
The following exhibits required to be filed as part of
this Annual Report on Form 10-K have been included:
(3) Articles of incorporation and by-laws
(i) Restated Certificate of Incorporation dated
March 9, 1984 filed as exhibit 3(i) to the
Company's Annual Report on Form 10-K for the
year ended December 31, 1984 (Commission File
No. 0-255) and incorporated herein by
reference.
- 16 -
<PAGE> 17
(ii) By-laws as amended through August 1, 1991
filed as exhibit 6(a)(19) to the Company's
Quarterly Report on Form 10-Q for the quarter
ended September 30, 1991 (Commission File
No. 0-255) and incorporated herein by
reference.
(4)and(9) Instruments defining the rights of security
holders, including indentures and voting trust
agreements.
Voting Trust Agreement dated as of April 15,
1987, attached as Annex A to the Prospectus, dated
January 20, 1987, constituting a part of the
Registration Statement on Form S-13 (Registration
No. 2-57861) and incorporated herein by reference.
The Company hereby agrees to furnish to the
Commission upon request a copy of each instrument
omitted pursuant to Item 601(b)(4)(iii)(A) of
Regulation S-K.
(10) Material contracts.
(i) Management Incentive Plan, filed as
Exhibit 4(a)(1) to the Annual Report on Form 10-K
for the year ended December 31, 1972 (Commission
File No. 0-255), as amended by the Amendment
effective January 1, 1974, filed as Exhibit 13-c
to the Registration Statement on Form S-1
(Registration No. 2-51832), the Amendment
effective January 1, 1977, filed as Exhibit 13(d)
to the Registration Statement on Form S-1
(Registration No. 2-59744), and the Amendment
effective January 1, 1980, filed as Exhibit 5(f)
to the Registration Statement on Form S-7
(Registration No. 2-68938) and incorporated herein
by reference.
(13) Annual Report to Shareholders for 1993 (except for
those portions which are expressly incorporated by
reference in this Annual Report on Form 10-K, this
exhibit is furnished for the information of the
Commission and is not deemed to be filed as part
of this Annual Report on Form 10-K).
(21) List of subsidiaries of the Company.
(b) Reports on Form 8-K:
-------------------
No reports on Form 8-K were filed during the last
quarter of the Company's fiscal year ended December 31, 1993.
- 17 -
<PAGE> 18
SIGNATURES
----------
Pursuant to the requirements of Section 13 of the Securities
Exchange Act of 1934, the Company has duly caused this Annual Report
on Form 10-K to be signed on its behalf by the undersigned, thereunto
duly authorized, as of the 28th day of March, 1994.
GRAYBAR ELECTRIC COMPANY, INC.
By /s/ E. A. McGRATH
----------------------------
(E. A. McGrath, President)
Pursuant to the requirements of the Securities Exchange Act of
1934, this Annual Report on Form 10-K has been signed below by the
following persons on behalf of the Company, in the capacities
indicated, on March 28, 1994.
/s/E. A. McGRATH Director and President
---------------------
(E. A. McGrath) (Principal Executive Officer
and Principal Financial
Officer)
/s/J. R. SEATON Director, Vice President
--------------------
(J. R. Seaton) and Comptroller (Principal
Accounting Officer)
/s/J. R. HADE Director
---------------------
(J. R. Hade)
/s/C. L. HALL Director
---------------------
(C. L. Hall)
/s/R. H. HANEY Director
---------------------
(R. H. Haney)
/s/G. W. HARPER Director
--------------------
(G. W. Harper)
- 18 -
<PAGE> 19
/s/F. L. HIPP Director
---------------------
(F. L. Hipp)
/s/R. L. MYGRANT Director
---------------------
(R. L. Mygrant)
/s/I. ORLOFF Director
---------------------
(I. Orloff)
/s/R. A. REYNOLDS Director
---------------------
(R. A. Reynolds)
/s/A. A. THOMPSON Director
---------------------
(A. A. Thompson)
/s/G. S. TULLOCH, JR. Director
---------------------
(G. S. Tulloch, Jr.)
/s/J. F. VAN PELT Director
---------------------
(J. F. Van Pelt)
/s/J. W. WOLF Director
---------------------
(J. W. Wolf)
- 19 -
<PAGE> 20
Price Waterhouse
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULES
To the Board of Directors of
Graybar Electric Company, Inc.
Our audits of the consolidated financial statements referred to in our
report dated February 18, 1994 appearing on page 21 of the 1993 Annual
Report to Shareholders of Graybar Electric Company, Inc., (which report
and consolidated financial statements are incorporated by reference in
this Annual Report on Form 10-K) also included an audit of the Financial
Statement Schedules listed in Item 14(a) of this Form 10-K. In our opinion,
these Financial Statement Schedules present fairly, in all material respects,
the information set forth therein when read in conjunction with the related
consolidated financial statements.
/s/Price Waterhouse
...............................
PRICE WATERHOUSE
St. Louis, Missouri
February 18, 1994
- 20 -
<PAGE> 21
<TABLE>
GRAYBAR ELECTRIC COMPANY, INC. AND SUBSIDIARIES
SCHEDULE V
PROPERTY, PLANT AND EQUIPMENT
<CAPTION>
Balance at Balance at
Beginning of Additions Close of
Classification Period at Cost Retirements Period
-------------- ------------ ------------ ------------ ------------
YEAR ENDED DECEMBER 31, 1993
----------------------------
<S> <C> <C> <C> <C>
Land 16,787,000 25,000 -0- 16,812,000
Buildings 116,972,000 4,502,000 (135,000) 121,339,000
Furniture & Fixtures 62,058,000 8,737,000 (2,129,000) 68,666,000
Capital Equipment
Leases 29,612,000 -0- -0- 29,612,000
TOTAL 225,429,000 13,264,000 (2,264,000) 236,429,000
<CAPTION>
YEAR ENDED DECEMBER 31, 1992
----------------------------
Land 16,112,000 675,000 -0- 16,787,000
Buildings 114,904,000 3,509,000 (1,441,000) 116,972,000
Furniture & Fixtures 59,540,000 5,442,000 (2,924,000) 62,058,000
Capital Equipment
Leases 24,005,000 5,607,000 -0- 29,612,000
TOTAL 214,561,000 15,233,000 (4,365,000) 225,429,000
<CAPTION>
YEAR ENDED DECEMBER 31, 1991
----------------------------
Land 16,103,000 9,000 -0- 16,112,000
Buildings 110,754,000 4,257,000 (107,000) 114,904,000
Furniture & Fixtures 63,643,000 5,940,000 (10,043,000) 59,540,000
Capital Equipment
Leases 24,005,000 -0- -0- 24,005,000
TOTAL 214,505,000 10,206,000 (10,150,000) 214,561,000
</TABLE>
- 21 -
<PAGE> 22
<TABLE>
GRAYBAR ELECTRIC COMPANY, INC. AND SUBSIDIARIES
SCHEDULE VI
ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT
<CAPTION>
Additions
Balance at charged Balance at
Beginning of to Costs Close of
Classification Period and Expenses Retirements Period
-------------- ------------ ------------ ------------ ------------
YEAR ENDED DECEMBER 31, 1993
----------------------------
<S> <C> <C> <C> <C>
Buildings 39,563,000 4,153,000 (114,000) 43,602,000
Furniture & Fixtures 33,311,000 6,338,000 (1,873,000) 37,776,000
Capital Equipment
Leases 14,228,000 3,888,000 -0- 18,116,000
TOTAL 87,102,000 14,379,000 (1,987,000) 99,494,000
<CAPTION>
YEAR ENDED DECEMBER 31, 1992
----------------------------
Buildings 36,398,000 3,840,000 (675,000) 39,563,000
Furniture & Fixtures 29,811,000 6,059,000 (2,559,000) 33,311,000
Capital Equipment
Leases 10,398,000 3,830,000 -0- 14,228,000
TOTAL 76,607,000 13,729,000 (3,234,000) 87,102,000
<CAPTION>
YEAR ENDED DECEMBER 31, 1991
----------------------------
Buildings 32,540,000 3,958,000 (100,000) 36,398,000
Furniture & Fixtures 32,761,000 4,637,000 (7,587,000) 29,811,000
Capital Equipment
Leases 7,210,000 3,188,000 -0- 10,398,000
TOTAL 72,511,000 11,783,000 (7,687,000) 76,607,000
</TABLE>
- 22 -
<PAGE> 23
<TABLE>
GRAYBAR ELECTRIC COMPANY, INC. AND SUBSIDIARIES
-----------------------------------------------
SCHEDULE VIII -RESERVES
-----------------------
<CAPTION>
Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Balance at Additions Balance
Beginning Charged to at End
of Period Income Deductions of Period
--------- ---------- ---------- ---------
Description
-----------
<S> <C> <C> <C> <C>
FOR THE YEAR ENDED DECEMBER 31, 1993:
Reserve deducted from assets to
which it applies-
Allowance for doubtful accounts $3,485,000 $ 2,061,000 $ 2,049,000(1) $3,497,000
Allowance for cash discounts 464,000 8,290,000 8,306,000(2) 448,000
---------- ----------- ----------- ----------
Total $3,949,000 $10,351,000 $10,355,000 $3,945,000
========== =========== =========== ==========
FOR THE YEAR ENDED DECEMBER 31, 1992:
Reserve deducted from assets to
which it applies-
Allowance for doubtful accounts $3,433,000 $ 2,328,000 $ 2,276,000(1) $3,485,000
Allowance for cash discounts 415,000 8,292,000 8,243,000(2) 464,000
---------- ----------- ----------- ----------
Total $3,848,000 $10,620,000 $10,519,000 $3,949,000
========== =========== =========== ==========
FOR THE YEAR ENDED DECEMBER 31, 1991:
Reserve deducted from assets to
which it applies-
Allowance for doubtful accounts $3,810,000 $ 2,275,000 $ 2,652,000(1) $3,433,000
Allowance for cash discounts 591,000 7,994,000 8,170,000(2) 415,000
---------- ---------- ---------- ----------
Total $4,401,000 $10,269,000 $10,822,000 $3,848,000
========== =========== =========== ==========
(F)
(1) Amount of trade receivables written off against the reserve provided.
(2) Discounts allowed to customers.
</TABLE>
- 23 -
<PAGE> 24
INDEX TO EXHIBITS
<PAGE> 25
<TABLE>
INDEX TO EXHIBITS
-----------------
<CAPTION>
Exhibits
--------
<C> <S> <C>
(3) Articles of incorporation and by-laws.
(i) Restated Certificate of
Incorporation dated March 9, 1984............ *
(ii) By-laws as amended through
August 1, 1991............................... *
(4)and(9) Instruments defining the rights of security
holders, including indentures and voting trust
agreements.
Voting Trust Agreement dated as
of April 15, l987, attached as Annex A to
the Prospectus, dated January 20, 1987,
constituting a part of the Registration
Statement on Form S-13 (Registration No.
2-57861)..................................... *
(10) Material contracts.
(i) Management Incentive Plan, filed as
Exhibit 4(a)(1) to the Annual Report on
Form 10-K for the year ended December 31,
1972 (Commission File No. 0-255), as amended
by the Amendment effective January 1, 1974,
filed as Exhibit 13-c to the Registration
Statement on Form S-1 (Registration No.
2-51832), the Amendment effective January 1,
1977, filed as Exhibit 13(d) to the Regis-
tration Statement on Form S-1 (Registration
No. 2-59744), and the Amendment effective
January 1, 1980, filed as Exhibit 5(f) to the
Registration Statement on Form S-7 (Regis-
tration No. 2-68938)......................... *
(F)
-----------------------
*Incorporated by reference in this Annual Report on
Form 10-K.
- 24 -
<PAGE> 26
(13) Annual Report to Shareholders for 1993
(except for those portions which are ex-
pressly incorporated by reference in this
Annual Report on Form 10-K, this exhibit is
furnished for the information of the Com-
mission and is not deemed to be filed as
part of this Annual Report on Form 10-K).....
(21) List of subsidiaries of the Company..........
</TABLE>
- 25 -
<PAGE> 1
EXHIBIT 13
ANNUAL REPORT TO SHAREHOLDERS
FOR 1993
<PAGE> 2
- - -------------------------------------------------------------------------------
COMPANY'S BUSINESS
The Graybar Electric Company, Inc. is engaged internationally in the
wholesale distribution of electrical and communications equipment and
supplies primarily to contractors, industrial plants, independent telephone
companies, power utilities and commercial users. All products sold by the
Company are purchased by the Company from others.
MARKETS SERVED
Electrical Contractor
Commercial & Industrial
Voice & Data Communications
Power Utility
International
CAPITAL STOCK DATA
<TABLE>
Number of Equity Security Holders as of December 31, 1993:
<CAPTION>
- - -----------------------------------------------------------
Title of Class Number of Security Holders
- - -----------------------------------------------------------
<S> <C>
Preferred Stock 139
Common Stock 120
Voting Trust Certificates For Common Stock 4,240
- - -----------------------------------------------------------
</TABLE>
<TABLE>
DIVIDEND DATA
Common Stock, par value $1; stated value $20.
- - -----------------------------------------------------------
<CAPTION>
Dividends declared for year: 1993 1992 1991
<S> <C> <C> <C>
First Quarter $ .30 $ .30 $ .30
Second Quarter .30 .30 .30
Third Quarter .30 .30 .30
Fourth Quarter 1.10 1.10 1.10
- - -----------------------------------------------------------
</TABLE>
<TABLE>
CONTENTS
<S> <C>
Graybar Officers and Directors.........................Inside Front Cover
President's Letter................................................... 2
Market Review........................................................ 3
Operations Review.................................................... 8
Financial Review..................................................... 11
Selected Consolidated Financial Data................................ 11
Management's Discussion & Analysis
of Financial Condition and Results of Operations................... 12
Consolidated Financial Statements.................................... 14
Report of Independent Accountants.................................... 21
Locations............................................................ 22
District Management.................................................. 24
</TABLE>
<PAGE> 3
2
LETTER TO OUR SHAREHOLDERS
- - -------------------------------------------------------------------------------
WE HAVE REACHED A POINT
WHERE WE ARE READY FOR SOME
QUANTUM LEAPS IN SERVICE CAPABILITY,
SPEED AND PRODUCTIVITY.
- - -------------------------------------------------------------------------------
The year of 1993 was a year of growth and expanding opportunity for
our Company. Sales increased 7.3%, and for another year we believe we gained
increased market share on a broad base. Gross margins were up 10.9%, and a
new record was set when sales on a consolidated basis passed the $2 billion
mark.
Although we are engaged in a mature business, the horizons for our
distribution services continue to widen.
On the Customer Side:
. To capture more market share and to build on our existing well-
established base, we began to differentiate groups of customers within
markets. Our objective was to better understand both our customers and their
objectives. We believe this will provide a clearer view as to how our value-
added services can address the specific needs of each customer.
. Many industrial customers are now interested in longer-term agreements
that concentrate on service guarantees and cost reductions through
productivity gains. Standardization of part numbers, increased use of
Electronic Data Interchange and other technological applications, credit
cards, specialized billing, Pathfinder (our distance learning net-
work), and in-plant managed inventories all have attracted attention.
. Utility customers are interested in reducing their inventories and
expenses of investment. Today they are looking for many of the savings and
productivity gains that our industrial customers expect. And both customer
groups are discussing emergency and after-hours services.
. Our electric utility customers are confronting competitive challenges
from non-utility generators. And recent rulings by some public service
commissions that material not installed in the system cannot be considered in
the rate base will clearly redefine philosophies about inventory levels and
direct purchases.
. The Company's voice and data communications business continues to grow caused
by an increased demand and a rapid rate of technological change. We are
successfully scrambling to keep up with both products and technology, and
while we do so the rate of change increases.
. Contractor customers are seeing more point-of-sale information and
displays at our counters. Assured inventory levels, improved service
guarantees involving deliveries, single-shipment orders and competitive
pricing continue to accent our contractor customers' activity. As the
economy has improved, so has our share of this market. We continue to measure
our improvement and pay closer attention to this largest market for our
Company's services.
On the Technological Side:
. Our pilot programs in bar coding, paperless warehousing, vendor-managed
inventories, and specialized inventory deployment are on track. We believe
1994 will see many of the pilots expanded nationally. Graybar has taken a
public stand to hasten bar coding throughout the industry, and we continue
to press the issue in every opportune forum.
. A totally new GraybarNet(R) and a host of improved computer changes have
made ordering easier and faster for customers.
. Equally important but less apparent are improvements in central buying,
the Zone Service Centers, and the addition of more VendorNet(R) suppliers.
We have reached a point where we are ready for some quantum leaps
in service capability, speed and productivity. It was with this thought in
mind that we announced the consolidation of the Miami and Tampa Districts
and the Houston and Dallas Districts. We are now beginning to rethink and
redesign our daily business processes, and we have various groups at work
examining inventory deployment, delivery facilities, and our order entry and
order processing service. We are also evaluating our informational and technical
support capability.
Our goal is to streamline service, speed delivery, and have a
process in place which will support meaningful service guarantees. Graybar
people have more tests, experiments, pilots, and customer-tailored programs
underway than ever before. Widespread training is both general and technical
and is emphasized in a variety of media.
We believe our market share increased again this year because
Graybar people are building better inventories and providing better service.
But, most important, our employee owners are listening carefully to our
customers.
/s/ E. A. McGRATH
Edward A. McGrath
St. Louis, Missouri President
March 1994
<PAGE> 4
3
MARKET REVIEW
- - -------------------------------------------------------------------------------
TRAINING AND SPECIALIZED
INVENTORIES SUPPORTED OUR 1993
EFFORT TO INCREASE SALES IN THE
LIGHTING RETROFIT MARKET.
- - -------------------------------------------------------------------------------
COMMITMENT TO QUALITY
- - -------------------------------------------------------------------------------
Demand for strategic alliances from multi-national customers, and the
growing acceptance of performance measurements in the marketplace, require that
the Company have a formally structured quality system.
In 1993, the Company adopted the International Standards Organization (ISO)
9002 standard as the foundation of our Total Quality Management system.
Implementation and adherence to the ISO 9002 standard will mark a significant
step forward in the Company's drive to maintain its stature as a world class
trading partner.
The Long Island City and Houston locations were selected as pilots for
the implementation of ISO 9002. Employee work teams in both locations have
been charged with explaining and documenting eighty-five discrete business
processes. The resulting process instructions will serve as a training
resource for branch employees and become the basis for our third party
registration inspection. In conjunction with this effort, the Company's first
Quality Manual was published. This manual functions as an index to the branch
process instructions and matches these processes to specific ISO requirements.
Both Long Island City and Houston will host ISO-Certified Registrars
for inspections during the second quarter of 1994. Once ISO approval at these
locations has been secured, all work instructions and process manuals will be
provided to our remaining locations. These manuals will describe the standard
business processes of the Company.
Pursuit of ISO certification and our ongoing Total Quality Management
system have generated several other important quality initiatives, including:
a Supplier Performance Report that measures performance of on-time shipments,
complete shipments, damaged and defective goods, billing accuracy, and other
critical service elements; a Corporate Suggestion System that encourages field
input on process improvements and elimination of re-work; and the use of monthly
performance data to allow districts to track customer billing adjustments,
deductions and returned goods.
CONSTRUCTION MARKET
- - -------------------------------------------------------------------------------
Contractor sales were strong in 1993. Sales to national contracting
firms grew substantially because we are positioned to offer unique
service capabilities through our nationwide network of locations.
Lower mortgage interest rates contributed to an increase in sales to
residential contractors. Sales to the non-residential market paralleled
1992, indicating the slow recovery in the overall economy.
The Environmental Protection Agency (EPA) expanded the Green Lights(R)
Program, promoting energy conservation. In 1993, the Company was nationally
recognized as a Green Lights Ally by the EPA. Graybar Financial Services
(GFS) was established with the EPA as an approved source for financing Green
Lights modernization projects. EPA recognition of Graybar's commitment to the
Green Lights Program created high demand for the Company's marketing and
distribution services by contractors, energy service companies, industrial,
institutional and commercial firms.
Training and specialized inventories supported our 1993 effort to
increase sales in the lighting retrofit market. Three lamp and lighting
conferences were conducted by Graybar at General Electric's Nela Park
Training Institute. These were attended by 120 employees representing
eighteen districts. Four advanced lighting training schools were held in
St. Louis, Hartford, Phoenix and Daytona Beach during 1993. A Graybar
Lighting Modernization/Financial Services Marketing Plan was
included in this training to highlight Demand Side Management and
Green Lights opportunities.
Contractor sales specialists used GFS as a sales tool to unlock profitable
business opportunities for the Company.
[PHOTO]
<PAGE> 5
4
MARKET REVIEW
- - -------------------------------------------------------------------------------
SALES TO THE COMMERCIAL &
INDUSTRIAL MARKET INCREASED
SUBSTANTIALLY IN 1993, LED BY
DYNAMIC GROWTH WITH
COMMERCIAL CUSTOMERS.
- - -------------------------------------------------------------------------------
In 1993, the Company participated in two major contractor conventions: The
Graybar exhibit at the National Electrical Contractors Association in San
Diego featured products applicable to energy-saving lighting systems. Two
products won awards for "Top Contractor Selections for Best New Products."
The Independent Electrical Contractors Association convention was held in Reno,
where our sponsorship of "Graybar/GE Lamp Night" once again was the convention's
choice as "Best Event."
At both expositions, the Company promoted its service capabilities and
commitment to electrical contractors.
COMMERCIAL & INDUSTRIAL MARKET
- - -------------------------------------------------------------------------------
Sales to the Commercial & Industrial Market increased substantially in
1993, led by dynamic growth with commercial customers. Sales in all
markets increased, continuing a positive trend. The Industrial Market
demonstrated particular strength with national and non-national market
segments and with voice/data products. Double-digit growth in commercial
sub-markets was registered with national and non-national customers as well
as hotel, educational, financial and entertainment segments.
National account sales increased at a pace significantly ahead of the
overall Industrial Market. Assignments were restructured during the year to
provide each National Sales Manager with responsibility within specific
industries.
We received several customer quality awards during the year as a result
of our consistent service and quality performance.
Commercial Market sales increased more than any other market during the
year. Major factors for this growth included our emphasis on service and
products to support demand-side management requirements as a result of
utility rebate programs. Sales and service specialization and our networked
Zone Service Centers combined to provide increases in stock sales, specialty
wire and cable, raceways, distribution equipment, industrial enclosures, tools,
electronic equipment, ballasts and voice/data products.
We continued our commitment to the development of knowledgeable,
specialized sales and service representatives. During 1993, we conducted four
regional Commercial & Industrial Seminars and Lighting Schools to provide
product and market training to over 100 sales and support personnel. These
sessions were taught by Graybar management, suppliers and industry consultants
and focused on current opportunities relating to Commercial & Industrial
customers. Training seminars covering Square D and General Electric products
and counter merchandising were held at several locations during the year.
During 1993, we promoted our service capabilities at industry trade
shows sponsored by the American Society of Hospital Engineering and the
Building Owners and Managers Association. Districts participated in regional
exhibitions of Plant Engineering and Maintenance Shows.
[PHOTO]
<PAGE> 6
5
MARKET REVIEW
- - -------------------------------------------------------------------------------
AGGRESSIVE TRAINING PROGRAMS
AND NEW PRODUCT ADDITIONS,
SUCH AS HUBS, CONCENTRATORS
AND DIGITAL TEST EQUIPMENT,
CONTRIBUTED TO OUR SUCCESS.
- - -------------------------------------------------------------------------------
COMMUNICATIONS MARKET
- - -------------------------------------------------------------------------------
DATA COMMUNICATIONS PRODUCTS
Sales momentum of data communications products continued throughout 1993.
We exceeded our sales target and continued to gain market share.
[PHOTO]
Aggressive training programs and new product additions, such as hubs,
concentrators and digital test equipment, contributed to our success in
sales of active Local Area Network electronic products.
Sales of fiber optic cable continued to be strong, and customer preference
for unshielded twisted-pair cables significantly contributed to total sales.
Our active involvement in Commercial Building Wire Standards enabled us to stay
abreast of these rapidly changing standards and provide our customers with the
proper inventory and outstanding sales support.
Six additional communications support centers were added in 1993, expanding
the total number to 52 locations. These locations positioned us to meet the
needs of our customers through specialized sales and service support.
Better use of the Zone Service Centers improved customer service and helped
optimize our inventory investment. Several suppliers' products were added to
zone inventories or had their zone stocking levels increased in 1993.
INTERCONNECT MARKET
Sales to interconnect contractors increased dramatically with growth in the
traditional PBX and Key System product families. We also showed substantial
sales growth in peripheral products such as headsets, voice processing and
paging. Products supporting the Americans With Disabilities Act also showed
excellent growth this past year.
Interconnect contractors are now "Solution Providers." Telecommunications
networks are viewed increasingly as strategic business assets. Conventional
voice networks are being converted from analog to digital systems. Most of this
conversion has taken place in the transmission of signals between switches.
Graybar is providing the latest technology and technical support.
TELEPHONE COMPANY MARKET
Overall, sales to the Telephone Company Market were flat in 1993.
Sales to Regional Bell Operating Companies (RBOCs) were up, while
sales to Independents and holding companies were down slightly.
The Telephone Company Market is now being covered by thirteen major
support locations for Independents and seven support locations for the RBOCs. A
two-day seminar was held in St. Louis for Graybar personnel who have sales
responsibility for the RBOCs. During the seminar, the participants discussed
ways to provide better sales coverage and service.
The Telephone Company Customer Advisory Council meeting was held in May
in St. Louis. Topics discussed included Electronic Data Interchange (EDI),
bar coding and Graybar Financial Services. In addition, council members were
given demonstrations of the Pathfinder training network and our new
GraybarNet customer ordering system.
Support of the industry was demonstrated by our participation in the
SuperComm trade show in Atlanta and by membership in the Organization for
the Protection and Advancement of Small Telephone Companies and Power and
Communications Contractors Association.
<PAGE> 7
6
MARKET REVIEW
- - -------------------------------------------------------------------------------
GRAYBAR ELECTRIC (ONTARIO)
ACHIEVED ITS MAJOR GOALS DURING
A YEAR OF CONSOLIDATION AND
REORGANIZATION.
- - -------------------------------------------------------------------------------
Products were added at our Zone Service Centers to support sales efforts
to the telephone company industry. These products included power supplies,
fiber optic splicers, outside plant and transmission products.
TRADE SHOWS
During 1993, Graybar promoted data/voice communications system solutions at
the following regional and national trade shows: Association of College and
University Telecommunications Administrators, Tele-Communications Association
Showcase, North American Telecommunications Association/Unicom '93,
Communications Networks, Telecommunications Industry Association, SuperComm,
Networld, Building Industry Consulting Services International, the Fiber Optics
Installers Conference and the National Electrical Contractors Association
Convention and Exposition. More than 50 Graybar locations held open houses,
trade shows and other special events promoting data and voice communications
products.
POWER UTILITY MARKET
- - -------------------------------------------------------------------------------
Driven by deregulation and competition, the utility industry is undergoing
significant changes. Private and public companies are searching for new ways to
become lower cost producers of power. At the same time, they are required to
increase spending to meet more exacting environmental pollution standards. This
expense resulted in cuts in manpower, inventory and construction expenditures.
Concurrently, many utilities have recognized that they can reduce costs
by having distributors perform services they have previously handled themselves.
Graybar is well-equipped to take a leadership position in providing these
services and realizing the sales opportunities that will occur.
Deregulation has also produced a new market segment: Independent Power
Producers. These are companies who own power plants and produce power for
their own use or for sale to the utility industry.
During 1994, we will expand our Utility Market plan to include this new
segment. It is expected that Independent Power Producers will own more than
50% of the generating plants built in the future and will be an important
market for electrical materials.
INTERNATIONAL MARKETS
- - -------------------------------------------------------------------------------
Graybar continued with its plan to expand in the international markets
through direct participation in several countries in the distribution of
electrical and communications equipment and supplies. This direct participation
in local markets was augmented by a strong year from our agents and by sales
from our United States exporting locations. As our multi-national customers and
suppliers continue to shift their focus from exporters to local distribution,
the Company will be well prepared to meet our customers' and suppliers' needs
for distribution services.
During the year:
. Graybar International Puerto Rico had a strong performance in the last half
of the year.
. Harris & Roome Supply Ltd., in which the Company holds an ownership
interest, had a good year in a weak economy in the Maritime Provinces.
. Graybar Electric de Mexico is prepared to participate in a dynamic and
fast-growing market which is expected to develop as a result of the needs
of the Mexican economy and the passage of the North American Free Trade
Agreement.
. Graybar Electric (Ontario) Ltd., formerly Ellis & Howard, achieved its major
goals during a year of consolidation and reorganization.
. A joint venture in the United Arab Emirates was opened in July to serve
various infrastructure, construction and modernization projects throughout
Africa and the Middle East.
. Our operations in Singapore, Panama and Guam faced a difficult 1993, but
ended the year stronger and prepared to provide quality distribution
services in 1994.
<PAGE> 8
7
MARKET REVIEW
- - -------------------------------------------------------------------------------
COUNTERS IN SEVEN DISTRICTS
WERE COMPLETELY REDESIGNED
AS "FLAGSHIPS" USING THE LATEST
MERCHANDISING TECHNIQUES.
- - -------------------------------------------------------------------------------
MARKETING SUPPORT
- - -------------------------------------------------------------------------------
COUNTERS
Counter sales growth in 1993 outpaced the Company's growth, due mainly
to a shift in the mix of electrical and communications product sales.
Communications product sales were a major contributor to overall counter
sales growth with electrical product sales providing modest growth.
Continuing its efforts to increase counter traffic and improve
customer service, the Company expanded counter merchandising operations in
1993. Counters in seven districts were completely redesigned as "flagships"
using the latest merchandising techniques for the professional trade.
These flagship sites provide models the districts will use to design
additional counter merchandising conversions.
The merchandising center concept improves product visibility with a
consistent mix of supplier products at every location. The new floor plan moves
customers through the product merchandising areas producing additional sales. By
the end of 1994, flagship counter operations will be completed in all districts.
GRAYBAR FINANCIAL SERVICES
Graybar Financial Services (GFS) had a record year of sales and profits
in 1993. Lease volume grew dramatically. More than 3,300 lease contracts
were processed from over 700 interconnect and contractor customers. Our
lease portfolio increased significantly during 1993 and now includes over
3,000 customers.
As GFS entered its fifth year, the Company focused on continuous
improvement in the communications market, and, at the same time, explored
new opportunities for financing energy-saving products. A special program was
introduced to serve the needs of municipal customers such as county, state and
local governments, schools and universities, and tax-exempt hospitals.
National associations, such as the National Electrical Contractors
Association, and Building Industry Consulting Service International, Inc.,
invited GFS to make presentations to their members at national and regional
meetings.
A Pathfinder training module was introduced in early 1993 and
became one of the most widely used within Graybar, training hundreds of Graybar
Sales Representatives, Customer Service Representatives and counter personnel.
GFS has become an important service we offer to customers. We can increase
sales and margins for ourselves and our contractor customers through financing
products or entire projects.
ADVERTISING AND SALES PROMOTION
During the year, all field and corporate mailing lists were transferred
into a standard Graybar-developed program written for personal computers.
This enabled the Advertising Department to combine them into a single,
shared data base containing nearly 180,000 customers and prospects by name
and title.
Three issues of the Products Extra and four of the Telcom Digest were
produced in 1993. These publications are mailed to a list of customers and
prospective customers. They are distributed at trade shows and are used by Sales
Representatives on customer calls and at the counters. Each publication's
circulation grew due to requests in response to trade magazine publicity.
Suppliers continued their strong support of these and other direct mail
advertising.
Several electrical suppliers included Graybar in trade advertisements
placed in magazines serving the electrical contractor market.
[PHOTO]
<PAGE> 9
8
OPERATIONS REVIEW
- - -------------------------------------------------------------------------------
ALL DISTRICTS SUCCESSFULLY IMPLEMENTED
CENTRAL PROCESSING, EFFECTIVELY FREEING
CUSTOMER SERVICE REPRESENTATIVES TO
DEVOTE MORE TIME TO WORKING DIRECTLY
WITH CUSTOMERS.
- - -------------------------------------------------------------------------------
OPERATIONS
- - -------------------------------------------------------------------------------
CUSTOMER SERVICE
During 1993, all districts successfully implemented Central Processing,
effectively freeing Customer Service Representatives to devote more time to
working directly with customers. It also allowed our Branch Operating
Managers to begin a transition to Managers of Customer Service. Again, the
focus is on greater attention to the needs of our customers.
In 1994, the Company will continue to develop training that encourages this
transition, while streamlining Central Processing functions. We look to
eliminate redundant steps and reduce the amount of corrective work required by
the branches.
The second section of the Customer Service Training Manual was published in
May. The new section concentrates on the data processing revisions in the
Customer Order modes of the computer system.
PURCHASING
During May 1993, a purchasing module was introduced on Pathfinder,
Graybar's distance learning network. This module presents inventory
management basics and purchasing terms and goals. The basis of stock
replenishment and its impact on profitability are emphasized. It is helpful
in communicating purchasing fundamentals and philosophy to all our employees.
In May, all Purchasing Managers attended a workshop on stock replenishment
processes and how these processes impact customer service. In the fourth
quarter, the development of a purchasing practices training manual was started
and is expected to be ready in mid-1994.
The Company developed and piloted a Supplier-Assisted Inventory Management
program, referred to as SAIM in the electrical industry. The program
demonstrates that by closer partnership with suppliers, we can deliver a higher
level of customer service while reducing inventory and associated purchasing
costs. The end results of SAIM are improved services and economic performance
for the supplier and Graybar. During 1994, this program will be expanded to all
districts and additional suppliers.
ZONE SERVICE CENTERS
Shipments from the Zone Service Centers significantly increased over the
previous year. To accommodate this increased customer demand, corporate
marketing and purchasing personnel have substantially increased
existing supplier lines and added numerous new suppliers in 1993.
The Zone Service Centers are important to Graybar's commitment to
quality service. Acting as an extension of each branch, the Zone Service
Centers provide back-up inventory that can be delivered promptly to our
customers. Central stocking, redeployment of existing stock and strategic
placement of new items continue to enhance Graybar's service offering.
[PHOTO]
1993 REAL ESTATE
NEW LOCATIONS:
South Bend, Indiana
Brookings, South Dakota
INTERNATIONAL OPENINGS:
Dubai, United Arab Emirates - (Joint Venture)
Total locations at December 31, 1993 were 222.
Graybar owns 131 of these locations.
<PAGE> 10
9
OPERATIONS REVIEW
- - -------------------------------------------------------------------------------
WE BEGAN RECEIVING SUPPLIER
INVOICES ELECTRONICALLY
IN 1993 AND ARE PROCESSING
APPROXIMATELY 1,000
INVOICES DAILY.
- - -------------------------------------------------------------------------------
INFORMATION SYSTEMS
- - -------------------------------------------------------------------------------
Electronic Data Interchange (EDI) transactions with customers and
suppliers continued to grow. Our EDI software and hardware were upgraded during
the year, and we begin 1994 with increased capabilities in this area. We now
process nearly 12,000 customer orders monthly. We began receiving supplier
invoices electronically in 1993 and are processing approximately 1,000 invoices
daily from numerous suppliers. We will continue to add new suppliers as they are
ready to provide EDI invoicing.
We routinely use VendorNet to transmit 30,000 purchase orders monthly
to suppliers. We are piloting SAIM, where we transmit complete inventory
history and daily sales activity to several suppliers. These suppliers
automatically enter orders when specified inventory levels are reached. The
benefits of SAIM include reduced inventory investment, improved availability
of inventory for customers and less paperwork.
Highlights of Information Systems activities during the year included
the following:
. A new version of GraybarNet was completed in 1993. Testing with selected
customers will begin in early 1994. This personal computer-based package
will be easier to use, contain on-line product information and offer access
to our Pathfinder education network.
. Interhouse transactions have been automated. This is a significant
benefit to national customers since they can now be served easily by any
Graybar location. Customer, credit and pricing information will be
consistent and available nationally. Also, most interhouse invoicing has
been eliminated.
. Archived orders and payables are now stored for a period of two years. Users
have on-line access to this historical data.
. A new counter mode was introduced which substantially reduces the time
required to enter a customer order.
[PHOTO]
. A group was formed to assemble, test and "burn-in" personal computers for
all users in the Company. This successful program has provided several
hundred personal computers for both individual employee and Company use.
. User menus of special reports available from the data base are being
continually updated. The ability to handle additional requests for special
reports has been improved.
. Savings in handling and postage have been achieved through outsourcing the
mailing of invoices.
. Central purchasing and central processing functions were made more productive
through several new system developments.
. We continued with plans to distribute computing capability closer to the
users. New computers have been ordered to replace the district computers
during 1994. These new computers will allow us to utilize powerful new
software systems. Considerable computer power will be placed in all
locations in combination with easy-to-use micro processor work
stations.
Major efforts in 1994 will be to continue the development of SAIM with
additional suppliers at an increasing number of locations, to continue
encouraging suppliers to use industry standard bar coding, and to develop bar
coding check-out at counters. We are confident there are significant customer
service improvements and economies to be achieved through the use of bar coding
in all product handling, and in pursuing the benefits of SAIM.
<PAGE> 11
10
OPERATIONS REVIEW
- - -------------------------------------------------------------------------------
THE PATHFINDER COMPUTER-BASED
TRAINING NETWORK BECAME FULLY
OPERATIONAL IN 1993. OUR SUPPLIERS
PROVIDED A BROAD VARIETY OF PRODUCT
TRAINING MODULES.
- - -------------------------------------------------------------------------------
HUMAN RESOURCES
- - -------------------------------------------------------------------------------
PERSONNEL
In 1993, the Board of Directors elected a new Director, Robert A.
Reynolds, Jr. At the time of his election, Mr. Reynolds was Vice President,
Communications Markets. Since then, he has been appointed to the new
position of Vice President, Marketing Administration.
The Company appointed four District Managers in 1993: Frank Mossa,
New York; Lawrence R. Giglio, Cincinnati; Kenneth B. Sparks, Los Angeles;
and John C. Loff, Seattle.
The restructuring of the district-level marketing function was
completed in 1993. All districts now have individual managers dedicated to
specific markets. This realignment, which began in 1992, continued in 1993
and resulted in personnel changes in several districts.
The Company appointed one District Operating Manager and five
District Financial Managers in 1993.
During 1993, the Company appointed five Area Managers. An Area
Manager has responsibility for more than one branch. Twenty-four Branch
Managers were appointed.
In 1993, all Graybar branches completed conversion to Central
Processing. This conversion was made to improve customer service by
centralizing certain administrative functions.
As a result, the responsibilities of the Branch Operating Manager
changed. To reflect these changes, the title "Branch Operating Manager" was
discontinued and the new title "Manager, Customer Service" became the
standard in all branches. In 1993, two Area Managers, Customer Service were
appointed, along with 26 Managers, Customer Service.
Also at the branch level, the Company appointed 12 Branch
Financial Managers. One Branch Supervisor was appointed.
Several appointments were made at corporate headquarters,
including two Vice Presidents: Anthony A. Brzoski, Vice President, and
Charles R. Udell, Vice President, Construction Markets.
In the Sales and Marketing Department, Edwin C. Keith and Thomas J.
Spellacy were appointed National Sales Managers; Ronald P. Segraves
was appointed National Product Manager; and William C. Trussell was
appointed Manager, Marketing Services.
In the Treasury Department, Jon N. Reed was appointed Assistant to
Treasurer.
William R. Kuykendall was appointed General Manager,
International. The Company continued to expand its international interests
throughout the year, and the Graybar International organization was
restructured to reflect this growth.
TRAINING
The Pathfinder computer-based training network became fully
operational in 1993. Our suppliers provided a broad variety of product training
modules. In addition, the Company produced training modules on customer service
and other topics.
The High-Performance Selling sales training program was continued in
1993 and made available to all districts.
The Graybar Management Training Seminar entered its tenth year in
1993. Classes were conducted in April and October, with a total of 38
participants completing the week-long sessions.
[PHOTO]
<PAGE> 12
11
FINANCIAL REVIEW
- - -------------------------------------------------------------------------------
<TABLE>
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars stated in thousands except for share and per share data)
<CAPTION>
1993 1992 1991 1990 1989
- - -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SALES $2,041,473 $1,902,354 $1,743,544 $1,894,626 $1,904,301
Less--Cash discounts (8,306) (8,243) (8,170) (9,903) (10,661)
- - -----------------------------------------------------------------------------------------------------------------
NET SALES 2,033,167 1,894,111 1,735,374 1,884,723 1,893,640
- - -----------------------------------------------------------------------------------------------------------------
COST OF MERCHANDISE SOLD (1,668,007) (1,564,929) (1,431,255) (1,565,717) (1,584,159)
- - -----------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE (9,810) (10,054) (13,092) (13,962) (15,165)
- - -----------------------------------------------------------------------------------------------------------------
PROVISION FOR INCOME TAXES
Current (10,016) (6,601) (6,356) (9,961) (7,138)
Deferred 763 (493) (534) 1,633 (1,571)
- - -----------------------------------------------------------------------------------------------------------------
Total provision for income
taxes (9,253) (7,094) (6,890) (8,328) (8,709)
- - -----------------------------------------------------------------------------------------------------------------
INCOME BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE 14,745 10,232 9,515 11,985 12,539
- - -----------------------------------------------------------------------------------------------------------------
Cumulative effect on prior years
of change in accounting for
postretirement benefits (45,000) - - - -
- - -----------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) (30,255) 10,232 9,515 11,985 12,539
- - -----------------------------------------------------------------------------------------------------------------
INCOME (LOSS) APPLICABLE TO
COMMON STOCK (30,265) 10,222 9,504 11,973 12,526
- - -----------------------------------------------------------------------------------------------------------------
AVERAGE COMMON SHARES
OUTSTANDING (A) 4,498 4,365 4,531 4,641 4,514
- - -----------------------------------------------------------------------------------------------------------------
INCOME (LOSS) PER SHARE OF
COMMON STOCK (A) (6.73) 2.34 2.10 2.58 2.77
- - -----------------------------------------------------------------------------------------------------------------
Cash dividends per share (A) 2.00 2.00 1.90 1.90 1.90
- - -----------------------------------------------------------------------------------------------------------------
RETAINED EARNINGS
Balance, beginning of year 91,733 93,837 92,910 89,776 85,771
Add--Net income (loss) (30,255) 10,232 9,515 11,985 12,539
- - -----------------------------------------------------------------------------------------------------------------
61,478 104,069 102,425 101,761 98,310
- - -----------------------------------------------------------------------------------------------------------------
Less dividends
Preferred ($1.00 per share) (10) (10) (11) (12) (13)
Common (in cash) (8,982) (8,282) (8,577) (8,839) (8,521)
Common (in stock) - (4,044) - - -
- - -----------------------------------------------------------------------------------------------------------------
(8,992) (12,336) (8,588) (8,851) (8,534)
- - -----------------------------------------------------------------------------------------------------------------
Balance, end of year 52,486 91,733 93,837 92,910 89,776
Proceeds on stock subscriptions,
shares unissued 51 - 67 72 -
STOCK OUTSTANDING
Preferred 183 197 219 223 248
Common 89,098 85,719 85,132 87,687 84,468
- - -----------------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 141,818 177,649 179,255 180,892 174,492
- - -----------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 610,512 557,036 518,480 541,358 536,473
LONG-TERM DEBT $ 63,621 $ 64,655 $ 70,338 $ 79,189 $ 48,708
- - -----------------------------------------------------------------------------------------------------------------
(F)
(A) Adjusted for the declaration of a 5% stock dividend in 1992. Prior to adjusting for the stock dividend,
the average common shares outstanding for 1991, 1990 and 1989 were 4,315, 4,420 and 4,299, respectively.
This summary should be read in conjunction with the consolidated financial
statements and related notes thereto included elsewhere in this annual
report.
</TABLE>
<PAGE> 13
12
FINANCIAL REVIEW
- - -------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
(Dollars stated in thousands except for share and per share data)
- - -------------------------------------------------------------------------------
RESULTS OF OPERATIONS
1993 COMPARED TO 1992
Net sales in 1993 were 7.3% higher than in 1992. The higher net sales
resulted from improvements in the market sectors of the economy in which the
Company operates. The impact of inflation on sales and cost of sales was not
significant in 1993.
Gross margin in 1993 increased $35,978 (10.9%) compared to 1992
primarily due to the increased sales in the electrical and communications
markets together with a generally higher gross margin rate in those markets.
The increase in selling, general and administrative expenses in 1993
compared to 1992 occurred largely because of adjustments in personnel
complement and adjustments in compensation and related expenses.
Interest charges decreased in 1993 compared to 1992 primarily due to lower
interest rates on short-term borrowings.
The combined effect of the increases in gross margin and other income and
the decrease in interest charges, together with the increases in selling,
general and administrative expenses and depreciation and amortization,
resulted in an increase in income before provision for income taxes and
cumulative effect of the accounting change of $6,672 in 1993 compared to 1992.
The Company adopted Statement of Financial Accounting Standards (SFAS) No.
106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," on
January 1, 1993. SFAS No. 106 requires current recognition of postretirement
benefit costs as opposed to recognizing these costs on a cash basis. SFAS No.
106 was adopted by the Company on the immediate recognition basis. The after-tax
impact of the accounting change decreased 1993 earnings $45,000, or $10.01 per
share. While adoption of SFAS No. 106 had an adverse effect on the 1993 reported
results of operations and shareholders' equity, cash flows were not affected.
1992 COMPARED TO 1991
Net sales in 1992 were 9.1% higher than in 1991. The higher net sales
resulted from improvements in the market sectors of the economy in which the
Company operates. The impact of inflation on sales and cost of sales was not
significant in 1992.
Gross margin in 1992 increased $25,063 (8.2%) compared to 1991 primarily
due to the increased sales in the electrical and communications markets.
The increase in selling, general and administrative expenses in 1992
compared to 1991 occurred largely because of adjustments in compensation and
related expenses including an increase in the Company's contribution to the
profit sharing and savings plan.
Interest charges decreased in 1992 compared to 1991 primarily due to lower
interest rates on short-term borrowings.
The combined effect of the increases in gross margins and other income,
together with the decrease in interest charges and increases in selling, general
and administrative expenses and depreciation and amortization, resulted in an
increase in pretax earnings of $921 in 1992 compared to 1991.
1991 COMPARED TO 1990
Net sales in 1991 were 7.9% lower than in 1990. The lower net sales
resulted from a generally depressed economy in the market sectors in which the
Company operates. The impact of inflation on sales and cost of sales was not
significant in 1991.
Gross margin in 1991 decreased $14,887 (4.7%) compared to 1990 primarily
due to the lower sales volume in the electrical and communications markets.
The Company utilizes the last-in, first-out (LIFO) method of valuing its
inventory. During 1991, certain inventories were reduced. This reduction
resulted in liquidation of inventory quantities credited at lower costs
prevailing in prior years as compared with the cost of 1991 purchases which had
the effect of increasing net income by approximately $981 or $.23 per share.
The decrease in selling, general and administrative expenses in 1991
compared to 1990 occurred largely because of adjustments in personnel complement
and adjustments in compensation and related expenses including a decrease in the
Company's contribution to the profit sharing and savings plan.
Interest charges decreased in 1991 compared to 1990 primarily due to lower
interest rates on short-term borrowings.
<PAGE> 14
13
FINANCIAL REVIEW
- - -------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
(Dollars stated in thousands except for share and per share data)
- - -------------------------------------------------------------------------------
Other income includes gains on sale of property of $1,330 in
1990.
The combined effect of the decreases in gross margins and other
income, together with the increase in depreciation and amortization and
decreases in selling, general and administrative expenses and interest charges,
resulted in a decrease in pretax earnings of $3,908 in 1991 compared to 1990.
FINANCIAL CONDITION AND LIQUIDITY
The financial condition of the Company continues to be
strong. At December 31, 1993, current assets exceeded current liabilities by
$119,919, up $9,759 from December 31, 1992. The current assets at December
31, 1993 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 December 31, 1993, the Company had available to it unused
lines of credit amounting to $113,000. These lines are available to meet
short-term cash requirements of the Company. Bank borrowings outstanding during
1993 and 1992 varied from a minimum of $50,000 and $46,000 to a maximum of
$123,000 and $90,000, respectively.
In May, 1992, the Company entered into a $50,000 Revolving
Credit Loan Agreement with a group of banks at an interest rate based on the
London Interbank Offered Rate (LIBOR). The credit agreement has various
covenants which limit the Company's ability to make investments, incur debt,
dispose of property, and issue equity securities. The Company is also required
to maintain certain financial ratios as defined in the agreement. The Company
intends to utilize this credit line primarily as a secondary source of borrowing
for short-term financing requirements. There have been no borrowings against
this credit line through December 31, 1993.
The Company has funded its capital requirements from operations,
stock issuances to its employees and long-term debt. In June, 1993 the Company
received the proceeds from a five-year note for $10,000 payable in annual
installments at a fixed interest rate of 5.68%. Cash provided by operations
during 1993 amounted to $6,300, which was $22,422 less than the cash provided
in 1992. Cash provided from the sale of common stock and proceeds received on
stock subscriptions amounted to $6,288 and $562 in 1993 and 1992, respectively.
Additional cash of approximately $538 and $448 will be provided in 1994 and 1995
as a result of payments to be made for stock subscribed to by employees under
the 1992 Common Stock Purchase Plan.
As previously discussed, the Company adopted SFAS No. 106
effective January 1, 1993 resulting in the recording of a $73,000 postretirement
benefit liability. In conjunction with the adoption of SFAS No. 106, the Company
recognized a $28,000 deferred tax asset. Management believes that existing
levels of pretax earnings for financial reporting purposes are sufficient to
generate the minimum amount of future taxable income to allow full
realization of the deferred tax asset.
<PAGE> 15
14
CONSOLIDATED FINANCIAL STATEMENTS
- - -------------------------------------------------------------------------------
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(Dollars stated in thousands except for share and per share data)
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31, 1993 1992 1991
- - ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SALES, NET OF RETURNS AND ALLOWANCES $2,041,473 $1,902,354 $1,743,544
Less--Cash discounts (8,306) (8,243) (8,170)
- - ----------------------------------------------------------------------------------------------------
Net Sales 2,033,167 1,894,111 1,735,374
- - ----------------------------------------------------------------------------------------------------
COST OF MERCHANDISE SOLD (1,668,007) (1,564,929) (1,431,255)
- - ----------------------------------------------------------------------------------------------------
Gross Margin 365,160 329,182 304,119
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (299,910) (271,615) (244,831)
TAXES, OTHER THAN INCOME TAXES (19,915) (18,361) (17,784)
DEPRECIATION AND AMORTIZATION (14,379) (13,729) (13,499)
- - ----------------------------------------------------------------------------------------------------
Income from operations 30,956 25,477 28,005
OTHER INCOME, NET 2,852 1,903 1,492
INTEREST EXPENSE (9,810) (10,054) (13,092)
- - ----------------------------------------------------------------------------------------------------
INCOME BEFORE PROVISION FOR INCOME TAXES
AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE 23,998 17,326 16,405
- - ----------------------------------------------------------------------------------------------------
PROVISION FOR INCOME TAXES
Current (10,016) (6,601) (6,356)
Deferred 763 (493) (534)
- - ----------------------------------------------------------------------------------------------------
Total provision for income taxes (9,253) (7,094) (6,890)
- - ----------------------------------------------------------------------------------------------------
Income before cumulative effect of
accounting change 14,745 10,232 9,515
- - ----------------------------------------------------------------------------------------------------
Cumulative effect on prior years of change
in accounting for postretirement benefits,
net of $28,000 tax benefit (45,000) - -
- - ----------------------------------------------------------------------------------------------------
NET INCOME (LOSS) (30,255) 10,232 9,515
- - ----------------------------------------------------------------------------------------------------
RETAINED EARNINGS, BEGINNING OF YEAR 91,733 93,837 92,910
Cash dividends--
Preferred, $1.00 per share each year (10) (10) (11)
Common, $2.00 per share each year (8,982) (8,282) (8,577)
Common Stock dividend - (4,044) -
- - ----------------------------------------------------------------------------------------------------
RETAINED EARNINGS, END OF YEAR $ 52,486 $ 91,733 $ 93,837
- - ----------------------------------------------------------------------------------------------------
INCOME PER SHARE OF COMMON STOCK BEFORE
CUMULATIVE EFFECT OF ACCOUNTING CHANGE $ 3.28 $ 2.34 $ 2.10
- - ----------------------------------------------------------------------------------------------------
NET INCOME (LOSS) PER SHARE OF COMMON STOCK $ (6.73) $ 2.34 $ 2.10
- - ----------------------------------------------------------------------------------------------------
See accompanying Notes to Consolidated Financial Statements
</TABLE>
<PAGE> 16
15
CONSOLIDATED FINANCIAL STATEMENTS
- - -------------------------------------------------------------------------------
<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
December 31,
(Dollars stated in thousands except for share and per share data) 1993 1992
- - ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
- - ------------------------------------------------------------------------------------------------------------------------
CURRENT ASSETS
Cash $ 17,332 $ 16,538
Trade receivables (less allowances of $3,945
and $3,949, respectively) 256,634 237,408
Merchandise inventory 167,927 162,403
Other current assets 10,099 8,543
- - ------------------------------------------------------------------------------------------------------------------------
Total current assets 451,992 424,892
- - ------------------------------------------------------------------------------------------------------------------------
PROPERTY, AT COST
Land 16,812 16,787
Buildings 121,339 116,972
Furniture and fixtures 68,666 62,058
Capital equipment leases 29,612 29,612
- - ------------------------------------------------------------------------------------------------------------------------
236,429 225,429
- - ------------------------------------------------------------------------------------------------------------------------
Less--Accumulated depreciation 99,494 87,102
- - ------------------------------------------------------------------------------------------------------------------------
136,935 138,327
- - ------------------------------------------------------------------------------------------------------------------------
DEFERRED INCOME TAXES 14,446 (13,770)
- - ------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS 7,139 7,587
- - ------------------------------------------------------------------------------------------------------------------------
$610,512 $557,036
- - ------------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
- - ------------------------------------------------------------------------------------------------------------------------
CURRENT LIABILITIES
Notes payable to banks $ 82,194 $ 69,998
Current portion of long-term debt 11,000 9,477
Trade accounts payable 193,843 192,234
Income taxes 519 1,298
Accrued payroll and benefit costs 27,643 25,695
Other accrued taxes 6,375 6,328
Dividends payable 4,910 4,538
Other payables and accruals 5,589 5,164
- - ------------------------------------------------------------------------------------------------------------------------
Total current liabilities 332,073 314,732
- - ------------------------------------------------------------------------------------------------------------------------
POSTRETIREMENT BENEFITS LIABILITY 73,000 -
- - ------------------------------------------------------------------------------------------------------------------------
LONG-TERM DEBT 63,621 64,655
- - ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Shares at December 31,
1993 1992
- - --------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Capital stock--
Preferred, par value $20 per share,
authorized 300,000 shares--
Issued to shareholders 9,533 10,047
In treasury, at cost (378) (175)
- - ------------------------------------------------------------------------------------------------------------------------
Outstanding 9,155 9,872 183 197
- - ------------------------------------------------------------------------------------------------------------------------
Common, stated value $20 per share,
authorized 5,000,000 shares--
Issued to voting trustees 4,239,403 4,055,065
Issued to shareholders 240,991 242,129
In treasury, at cost (25,507) (11,251)
- - ------------------------------------------------------------------------------------------------------------------------
Outstanding 4,454,887 4,285,943 89,098 85,719
- - ------------------------------------------------------------------------------------------------------------------------
Common shares subscribed 1,088 7,274
Retained earnings 52,486 91,733
- - ------------------------------------------------------------------------------------------------------------------------
142,855 184,923
Less--Subscriptions receivable 1,037 7,274
- - ------------------------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 141,818 177,649
- - ------------------------------------------------------------------------------------------------------------------------
$610,512 $557,036
- - ------------------------------------------------------------------------------------------------------------------------
See accompanying Notes to Consolidated Financial Statements
</TABLE>
<PAGE> 17
16
CONSOLIDATED FINANCIAL STATEMENTS
- - -------------------------------------------------------------------------------
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars stated in thousands)
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31, 1993 1992 1991
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATIONS
Income before cumulative effect of
accounting change $14,745 $10,232 $ 9,515
- - ---------------------------------------------------------------------------------------------------------------
Adjustments to reconcile income before
cumulative effect of accounting
change to cash provided by operations --
Depreciation and amortization 14,379 13,729 13,499
Deferred income taxes (763) 493 534
Changes in assets and liabilities:
Trade receivables (19,226) (36,287) 12,253
Merchandise inventory (5,524) (10,351) 11,546
Other current assets (1,556) (2,171) 932
Other assets 448 (285) (4,665)
Trade accounts payable 1,609 45,182 (15,388)
Accrued payroll and benefit costs 1,948 8,862 (3,724)
Other accrued liabilities 240 (682) (170)
- - ---------------------------------------------------------------------------------------------------------------
(8,445) 18,490 14,817
- - ---------------------------------------------------------------------------------------------------------------
Net cash flow provided by operations 6,300 28,722 24,332
- - ---------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property 277 1,131 747
Capital expenditures for property (13,264) (9,626) (10,206)
- - ---------------------------------------------------------------------------------------------------------------
Net cash flow used by investing activities (12,987) (8,495) (9,459)
- - ---------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in notes payable to banks 12,196 3,998 7,000
Proceeds from long-term debt 10,000 - 10,000
Repayment of long-term debt (5,699) (6,909) (15,268)
Principal payments under capital equipment leases (3,812) (2,467) (4,079)
Sale of common stock 6,288 562 760
Purchase of treasury stock (2,872) (4,108) (3,324)
Dividends paid (8,620) (8,444) (8,734)
- - ---------------------------------------------------------------------------------------------------------------
Net cash flow provided (used) by financing activities 7,481 (17,368) (13,645)
- - ---------------------------------------------------------------------------------------------------------------
NET INCREASE IN CASH 794 2,859 1,228
- - ---------------------------------------------------------------------------------------------------------------
CASH, BEGINNING OF YEAR 16,538 13,679 12,451
- - ---------------------------------------------------------------------------------------------------------------
CASH, END OF YEAR $17,332 $16,538 $13,679
- - ---------------------------------------------------------------------------------------------------------------
See accompanying Notes to Consolidated Financial Statements
</TABLE>
<PAGE> 18
17
CONSOLIDATED FINANCIAL STATEMENTS
- - -------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31,
1993, 1992 AND 1991
(Dollars stated in thousands except for share and per share data)
- - -------------------------------------------------------------------------------
1/SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the
accounts of Graybar Electric Company, Inc. and its subsidiary companies. All
significant intercompany balances and transactions have been eliminated.
MERCHANDISE INVENTORY
Inventory is stated at the lower of cost (determined
using the last-in, first-out (LIFO) cost method) or market. LIFO accounting is
generally a conservative method of accounting that, compared with other
inventory accounting methods, provides better matching of current costs with
current revenues. Had the first-in, first-out (FIFO) method been used, inventory
would have been approximately $19,690 and $22,569 greater than reported under
the LIFO method at December 31, 1993 and 1992, respectively.
During 1991, certain inventories were reduced. This
reduction resulted in liquidation of inventory quantities credited at lower
costs prevailing in prior years as compared with the cost of 1991 purchases.
This had the effect of increasing 1991 net income by approximately $981 or
$.23 per share.
PROPERTY AND DEPRECIATION
<TABLE>
The Company provides for depreciation using the
straight-line method over the following estimated useful lives of the
assets:
- - -------------------------------------------------------------------------------
<S> <C>
Buildings 42 years
- - -------------------------------------------------------------------------------
Permanent fixtures-- Over the lives of the
leased property respective leases
- - -------------------------------------------------------------------------------
Furniture, fixtures
and equipment 4 to 14 years
- - -------------------------------------------------------------------------------
</TABLE>
At the time property is retired, or otherwise disposed of,
the asset and related accumulated depreciation are removed from the accounts and
any resulting gain or loss is credited or charged to other income.
Equipment under capital leases is recorded in property with
the corresponding obligations carried in long-term debt. The amount capitalized
is the present value at the beginning of the lease term of the aggregate minimum
lease payments.
Maintenance and repairs are expensed as incurred. Renewals
and betterments that extend the life of the property are capitalized.
The Company capitalizes interest expense on major
construction and development projects while in progress.
CREDIT RISK
Financial instruments which potentially expose the Company to
concentrations of credit risk consist primarily of trade accounts
receivable. The Company distributes its products to a large number of
customers in the electrical contractor, industrial plant and
communications markets. Most of the Company's business activity is with
customers in the United States; however, the Company has limited sales
activity in several international locations. The Company performs on-going
credit evaluations of its customers, and a significant portion of trade
receivables is secured by lien or bond rights. In addition, export sales are
usually guaranteed by letter of credit or advance payment arrangements. The
Company maintains allowances for potential credit losses and such losses have
historically been within management's expectations.
2/INCOME TAXES
Effective January 1, 1992, the Company adopted Statement of
Financial Accounting Standard No. 109 (SFAS No. 109), "Accounting for Income
Taxes." No cumulative adjustment was required as a result of the adoption of
SFAS No. 109 due to the Company's previous use of the liability method of
accounting for income taxes.
<TABLE>
The provision for income taxes recorded in the Consolidated
Statements of Income and Retained Earnings is as follows:
<CAPTION>
Years Ended
December 31: 1993 1992 1991
- - ------------------------------------------------------------------------------
<S> <C> <C> <C>
Federal income tax
Current $9,067 $5,896 $5,281
Deferred (629) 471 450
State income tax
Current 949 705 1,075
Deferred (134) 22 84
- - ------------------------------------------------------------------------------
Financial statement
income tax provision $9,253 $7,094 $6,890
- - ------------------------------------------------------------------------------
</TABLE>
<PAGE> 19
18
CONSOLIDATED FINANCIAL STATEMENTS
- - -------------------------------------------------------------------------------
<TABLE>
Deferred income taxes are provided based upon differences
between the financial statement and tax bases of assets and liabilities. The
following deferred taxes are recorded at December 31:
<CAPTION>
Assets/(Liabilities) 1993 1992
- - ---------------------------------------------------------------------
<S> <C> <C>
Postretirement benefits $28,872 $ -
Payroll accruals 3,872 3,374
Bad debt reserves 1,383 1,354
Inventory 1,147 1,081
Other deferred
tax assets 2,475 1,881
Prepaid pension (2,294) (1,557)
Fixed asset
depreciation (13,523) (12,681)
Fixed asset gains (624) (609)
Other deferred tax
liabilities (4,179) (4,477)
- - ---------------------------------------------------------------------
$17,129 $(11,634)
- - ---------------------------------------------------------------------
</TABLE>
Deferred tax assets included in Other Current Assets were
$2,683 and $2,136 in 1993 and 1992, respectively.
<TABLE>
A reconciliation between the "statutory" federal income tax
rate and the effective tax rate in the Consolidated Statements of Income and
Retained Earnings is as follows:
<CAPTION>
Years Ended December 31: 1993 1992 1991
- - -----------------------------------------------------------------------------------
<S> <C> <C> <C>
"Statutory" tax rate 35.0% 34.0% 34.0%
State and local income taxes,
net of federal benefit 2.9 2.8 4.4
Other, net .7 4.1 3.6
- - -----------------------------------------------------------------------------------
Effective tax rate 38.6% 40.9% 42.0%
- - -----------------------------------------------------------------------------------
</TABLE>
3/CAPITAL STOCK
The Company's capital stock is owned by its employees and
retirees. Neither common nor preferred stock may be sold by the holder
thereof, except by first offering it to the Company. The Company may buy any
common shares so offered at the price at which they were issued ($20) with
appropriate adjustments for current dividends, or may call all or part of the
preferred stock at par plus accrued dividends.
During 1992, the Company offered to eligible employees the right
to subscribe to 480,000 shares of common stock at $20 per share in
accordance with the provisions of the Company's Common Stock Purchase Plan
dated October 7, 1992. This resulted in the subscription of 363,681 shares
($7,274). Subscribers under the Plan elected to make payments under one of
the following options: (i) all shares subscribed for prior to January 22, 1993;
(ii) a portion of such shares prior to January 22, 1993, and the balance in
monthly installments through payroll deductions (or in certain cases where a
subscriber is no longer on the Company's payroll, through pension deductions or
direct monthly payments) over a 34-month period; or (iii) all shares pursuant to
the installment method. Shares were issued and Voting Trust Certificates were
delivered to subscribers as of January 22, 1993, in the case of shares paid for
prior to January 22, 1993 and shares will be issued and Voting Trust
Certificates will be delivered to subscribers on a quarterly basis, as of the
tenth day of March, June, September and December to the extent full payments of
shares are made in the case of subscriptions under the installment method.
<TABLE>
Shown below is a summary of shares reacquired and retired by the
Company in the three years ended December 31:
<CAPTION>
PREFERRED COMMON
REACQUIRED RETIRED REACQUIRED RETIRED
- - --------------------------------------------------------------------------
Years ended December 31:
<S> <C> <C> <C> <C>
1993 717 514 142,889 128,633
1992 1,082 907 204,303 208,797
1991 220 464 165,993 162,877
- - --------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
4/LONG-TERM DEBT DECEMBER 31
LONG-TERM DEBT WAS COMPOSED OF: 1993 1992
- - ----------------------------------------------------------------------
<S> <C> <C>
9-23/100% note secured by a first
mortgage on various properties $30,000 $30,000
12-1/4% note secured by a first
mortgage on various properties 12,575 14,550
5-68/100% note, unsecured 8,000 -
5-78/100% to 9-9/10% capital
equipment leases 7,873 10,981
8-3/4% note, unsecured 2,500 5,000
Variable rate, Industrial Revenue
Bonds, secured by facilities 2,673 4,124
- - ----------------------------------------------------------------------
$63,621 $64,655
- - ----------------------------------------------------------------------
</TABLE>
<PAGE> 20
19
CONSOLIDATED FINANCIAL STATEMENTS
- - -------------------------------------------------------------------------------
<TABLE>
- - ------------------------------------------------------------
<CAPTION>
LONG-TERM DEBT MATURES AS FOLLOWS:
- - ------------------------------------------------------------
<S> <C>
1995 $12,516
1996 9,914
1997 9,833
1998 8,697
1999-2005 22,661
- - ------------------------------------------------------------
$63,621
- - ------------------------------------------------------------
</TABLE>
The present value of future minimum lease payments under capital
leases as of December 31, 1993 was $10,981 of which $7,873 is included in
long-term debt.
Bank borrowings varied from a minimum of $50,000 and $46,000 to a
maximum of $123,000 and $90,000 in 1993 and 1992, respectively.
The average amount of bank borrowings outstanding during 1993 and
1992 amounted to approximately $85,000 and $69,000 at average interest rates
of 3.3% and 3.8%, respectively. The averages are based on the daily amounts
outstanding during each year.
The Company had unused lines of credit of approximately $113,000
as of December 31, 1993. Certain lines require maintenance of compensating
balances of up to 5% of the available lines of credit.
In May, 1992, the Company entered into a $50,000 Revolving Credit Loan
Agreement with a group of banks at an interest rate based on the London
Interbank Offered Rate (LIBOR). The credit agreement has various covenants
which limit the Company's ability to make investments, incur debt, dispose
of property, and issue equity securities. The Company is also required to
maintain certain financial ratios as defined in the agreement. There have
been no borrowings against this credit line through December 31, 1993.
5/PENSION PLAN
Pension and related expense was $3,556, $3,676 and $2,517 for each
of three years ended December 31, 1993, 1992 and 1991, respectively.
The Company has a noncontributory defined benefit pension plan
covering substantially all full-time employees. The plan provides retirement
benefits based on an employee's final average earnings and years of service.
Employees become 100% vested after 5 years of service, regardless of age.
<TABLE>
The Company's funding policy is to contribute the net periodic
pension cost accrued each year, provided that the contribution will not be less
than the ERISA minimum nor greater than the maximum tax deductible amount. The
actuarially computed components of the defined benefit pension plan expense for
the three years ended December 31, are as follows:
<CAPTION>
1993 1992 1991
---------------------------------------------
<S> <C> <C> <C>
Service cost-benefits
earned during
the year $ 3,383 $ 3,303 $ 3,263
Interest cost on
projected benefit
obligation 6,923 6,641 5,980
Actual return on
plan assets (9,472) (2,546) (16,033)
Net amortization
of return on plan
assets and
unrecognized net
asset 1,958 (4,389) 8,790
------- ------- --------
Total defined benefit
plan expense $ 2,792 $ 3,009 $ 2,000
======= ======= ========
</TABLE>
<TABLE>
The following table sets forth the plan's funded status
for the two years ended December 31:
<CAPTION>
1993 1992
----------------------------
<S> <C> <C>
Actuarial present value of benefit
obligation:
Vested benefits $ 61,765 $ 47,374
Nonvested benefits 11,798 8,550
-------- --------
Accumulated benefit
obligation 73,563 55,924
-------- --------
Projected benefit obligation
for service rendered to date 98,753 80,629
-------- --------
Plan assets at fair value, primarily
common stocks and bonds 88,464 81,774
-------- --------
Projected benefit obligation
(in excess of) or less than
plan assets (10,289) 1,145
-------- --------
Unrecognized prior service cost 6 261
Unrecognized net loss 27,030 14,809
Unrecognized net asset at
January 1, 1987 (12,743) (13,901)
-------- --------
Net pension asset recognized in
the consolidated balance sheet $ 4,004 $ 2,314
======== ========
</TABLE>
The discount rate and rate of increase in future
compensation levels used in determining the actuarial present value of the
projected benefit obligation were 7.50% and 4.50%, and 8.75% and 5.75% in
1993 and
<PAGE> 21
20
CONSOLIDATED FINANCIAL STATEMENTS
- - -------------------------------------------------------------------------------
1992, respectively. The long-term rate of return on assets used in
determining defined benefit plan expense was 9% in 1993, 1992 and 1991.
The average remaining service lives of plan participants used to
calculate the amortization of the unrecognized net asset at January 1, 1987
was 18 years.
The Company also provides a defined contribution
profit sharing and savings plan covering substantially all of its
full-time employees. Annual contributions by the Company to the
plan are at the discretion of management and are generally
determined based on the profitability of the Company. Employees may
also contribute to the plan subject to limitations imposed by federal tax law
and ERISA.
6/POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE
Effective January 1, 1993, the Company adopted Statement
of Financial Accounting Standards (SFAS) No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions." The Company and its
subsidiaries provide certain health care and life insurance benefits for
retired employees through the Retiree Welfare Plan (the Plan). Substantially
all of the Company's employees may become eligible to participate in the Plan if
they reach normal retirement age while working for the Company. Benefits are
provided through insurance coverage with premiums based on the benefits paid
during the year. The Company funds the Plan on a pay-as-you-go basis and,
accordingly, the Plan has no assets at December 31, 1993.
The Company elected to immediately recognize the cumulative
effect of adoption of SFAS No. 106 pertaining to years prior to 1993 through a
one-time adjustment which decreased 1993 net income by $45,000, net of a $28,000
income tax effect.
<TABLE>
Periodic postretirement benefit expense for 1993 was
comprised of the following:
<S> <C>
Service cost-benefits earned
during the year $ 401
Interest cost on accumulated
postretirement benefit obligation 6,111
------
Net periodic postretirement
benefit expense $6,512
======
</TABLE>
<TABLE>
The following table sets forth the accumulated
postretirement benefit obligation for the Company's postretirement benefit
plans at December 31, 1993:
<S> <C>
Retirees $63,719
Fully eligible active plan participants 13,243
Other active plan participants 7,492
-------
Accumulated postretirement benefit
obligation 84,454
Unrecognized net loss 11,454
-------
Accrued postretirement benefit cost $73,000
=======
</TABLE>
The discount rate used in determining net periodic postretirement
benefit expense for 1993 was 8.75%. The discount rate used to determine the
accumulated postretirement benefit obligation at December 31, 1993 was
7.50%. The health care cost trend rate used in determining net periodic
postretirement benefit expense for 1993 was 8% for all years. The health care
cost trend rate used to determine the accumulated postretirement benefit
obligation at December 31, 1993 was 6.75% for all years. A one percentage point
increase in the health care cost trend rate would not have a material impact on
the net periodic postretirement benefit expense or the accumulated
postretirement benefit obligation.
7/NET INCOME PER SHARE OF COMMON STOCK
The computation of net income per share of common stock is based on the
weighted average number of common shares outstanding during each year. The
average numbers of shares used in computing net income per share of common
stock were 4,497,644, 4,365,229 and 4,531,137 in 1993, 1992 and 1991,
respectively.
8/COMMITMENTS
Rental expense was $6,941, $6,813 and $5,584 in 1993, 1992 and 1991,
respectively.
<TABLE>
Future minimum rental payments required under operating leases that
have either initial or remaining noncancellable lease terms in excess of one
year as of December 31, 1993 are as follows:
<CAPTION>
Years ending December 31:
- - ----------------------------------------------------------------------
<S> <C>
1994 $7,161
1995 5,349
1996 4,167
1997 2,523
1998 2,007
Subsequent to 1998 4,281
- - ----------------------------------------------------------------------
</TABLE>
9/STATEMENTS OF CASH FLOWS
During 1993, 1992 and 1991 income taxes paid totaled $10,621, $6,166
and $6,881; interest paid totaled $10,158, $9,714 and $13,779 and
liabilities assumed in connection with capitalized leases totaled $0, $5,607
and $0, respectively.
<PAGE> 22
21
REPORT OF INDEPENDENT ACCOUNTANTS
- - -------------------------------------------------------------------------------
Price Waterhouse
One Boatmen's Plaza
St. Louis, MO 63101
February 18, 1994
To the Shareholders and Board of Directors of Graybar Electric Company, Inc.
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income and retained earnings and of cash flows
present fairly, in all material respects, the financial position of Graybar
Electric Company, Inc. and its subsidiaries (the Company) at December 31,
1993 and 1992, and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 1993, in conformity
with generally accepted accounting principles. These financial statements are
the responsibilty of the Company's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
As discussed in Note 6 to the financial statements, the Company changed its
method of accounting for postretirement benefits other than pensions
effective January 1, 1993.
/s/ Price Waterhouse
<PAGE> 23
22
LOCATIONS AS OF JANUARY 1, 1994
- - -------------------------------------------------------------------------------
CORPORATE OFFICE
34 North Meramec Avenue
St. Louis, Missouri 63105
314 727-3900
INFORMATION SYSTEMS
11828 Lackland Road
St. Louis, Missouri 63146
314 569-0006
ZONE SERVICE CENTERS
GULF ZONE
747 Southport Drive
Shreveport, Louisiana 71108
MID-ATLANTIC ZONE
2124 Avenue C
Bethlehem, Pennsylvania 18017
MIDWEST ZONE
2424 A North Main Street
East Peoria, Illinois 61611
PACIFIC ZONE
1081 West Ninth Street
Upland, California 91786
MIAMI INTERNATIONAL
10500 Southwest 186th Street
Perrine, Florida 38157
GRAYBAR ELECTRIC
(ONTARIO) LTD.
Kitchener, Ontario
Brantford, Ontario
Niagara Falls, Ontario
Hamilton, Ontario
Guelph, Ontario
Windsor, Ontario
Mississauga, Ontario
H & C ELECTRIC SUPPLY, INC.
Mankato, Minnesota
SQUARE ELECTRIC
Parsippany, New Jersey
Hackettstown, New Jersey
INTERNATIONAL
Halifax, Nova Scotia
Rio Piedras, Puerto Rico
Singapore
Panama
Tamuning, Guam
Juarez, Mexico
Dubai, United Arab Emirates
- - ---------------------------
NEW YORK DISTRICT
- - ---------------------------
21-15 Bridge Plaza North
Long Island City,
New York 11101
718 392-2000
BRANCHES
New York: Manhattan,
Rochester, Albany, Syracuse,
Hauppauge, Buffalo
New Jersey: Newark, North
Brunswick, Teterboro Telcom
- - ---------------------------
PITTSBURGH DISTRICT
- - ---------------------------
900 Ridge Avenue
Pittsburgh, Pennsylvania
15212
412 323-5200
BRANCHES
Ohio: Youngstown, Cleveland,
Akron, Canton, Mansfield
Pennsylvania: Greensburg
West Virginia: Wheeling
- - ---------------------------
ATLANTA DISTRICT
- - ---------------------------
2050 Nancy Hanks Drive
Norcross, Georgia 30071
404 441-5580
BRANCHES
Georgia: Atlanta, Marietta,
Riverdale, Savannah,
Cartersville
Alabama: Birmingham,
Huntsville, Mobile
South Carolina: Columbia,
Greenville,
Spartanburg, Hilton Head
Tennessee: Knoxville,
Chattanooga
Florida: Pensacola
Mississippi: Jackson
- - ---------------------------
TAMPA DISTRICT
- - ---------------------------
801 North Rome Avenue
Tampa, Florida 33606
813 253-8881
BRANCHES
Florida: Sarasota, Lakeland,
Orlando, Largo,
Melbourne, North Tampa,
Jacksonville, South
Jacksonville, Tallahassee,
Daytona Beach, Perrine, Miami,
West Palm Beach, Tampa Utility,
Florida City, Fort Myers,
Fort Pierce, Miami Telcom, Naples,
Pompano Beach, Pompano Beach Telcom
Georgia: Kingsland
- - ---------------------------
BOSTON DISTRICT
- - ---------------------------
345 Harrison Avenue
Boston, Massachusetts 02118
617 482-9320
BRANCHES
Rhode Island: Cranston
Massachusetts: Worcester,
West Springfield, Boston
Telcom (Somerville)
Maine: Portland
New Hampshire: Manchester
Vermont: Rutland
Connecticut: Hamden
- - ---------------------------
CINCINNATI DISTRICT
- - ---------------------------
1022 West Eighth Street
Cincinnati, Ohio 45203
513 621-0600
BRANCHES
West Virgnina: Charleston
Ohio: Columbus, Dayton, Lima
Kentucky: Lexington,
Louisville
Tennessee: Nashville
- - ---------------------------
RICHMOND DISTRICT
- - ---------------------------
1510 Tomlynn Street
Richmond, Virgniia 23230
804 359-1381
BRANCHES
Virginia: Norfolk, Roanoke,
Hampton
North Carolina: Asheville,
Raleigh, Winston-Salem,
Charlotte, Greensboro,
Wilmington
Tennessee: Bristol,
Johnson City
- - ---------------------------
PHILADELPHIA DISTRICT
- - ---------------------------
1550 South Warfield Street
Philadelphia, Pennsylvania
19146
215 336-2211
BRANCHES
Maryland: Baltimore, Lanham
Pennsylvania: Harrisburg,
Allentown
Delaware: New Castle
Virginia: Chantilly
<PAGE> 24
23
LOCATIONS AS OF JANUARY 1, 1994
- - -------------------------------------------------------------------------------
- - ---------------------------
CHICAGO DISTRICT
- - ---------------------------
900 Regency Drive
Glendale Heights, Illinois
60139
708 893-3600
BRANCHES
Illinois: Naperville
Indiana: Fort Wayne,
South Bend, Hammond, Indianapolis
Michigan: Flint, Lansing, Grand Rapids,
Kalamazoo, Auburn Hills, Kentwood
Ohio: Toledo
- - ---------------------------
ST. LOUIS DISTRICT
- - ---------------------------
600 South Taylor Avenue
St. Louis, Missouri 63110
314 531-4700
BRANCHES
Iowa: Davenport, Des Moines,
Cedar Rapids
Illinois: East Peoria,
Springfield
Missouri: Jefferson City,
Kansas City
Indiana: Evansville
Kansas: Olathe, Wichita
Nebraska: Omaha
Tennessee: Memphis
- - ---------------------------
SAN FRANCISCO DISTRICT
- - ---------------------------
251 Lawrence Avenue
South San Francisco,
California 94080
415 871-7000
BRANCHES
California: Oakland, Fresno,
Modesto, Sacramento,
San Jose, Martinez,
San Francisco
Nevada: Reno
Hawaii: Aiea
- - ---------------------------
SEATTLE DISTRICT
- - ---------------------------
1919 Sixth Avenue South
Seattle, Washington 98134
206 292-4848
BRANCHES
Washington: Spokane,
Tacoma, Everett, Bellevue
Oregon: Portland
Idaho: Boise
Alaska: Anchorage
- - ---------------------------
MINNEAPOLIS DISTRICT
- - ---------------------------
2300 East 25th Street
Minneapolis, Minnesota
55406
612 721-3545
BRANCHES
Minnesota: St. Paul, Duluth,
Brooklyn Park, Burnsville,
Minneapolis Telcom
(Plymouth), Rochester
Montana: Billings
South Dakota: Sioux Falls,
Brookings North Dakota: Fargo
Wisconsin: Green Bay,
Milwaukee, Marinette,
Manitowoc, Madison
- - ---------------------------
DALLAS DISTRICT
- - ---------------------------
717 South Good Latimer
Expressway
Dallas, Texas 75226
214 939-0844
BRANCHES
Texas: Dallas, San Antonio,
Forth Worth, Amarillo, Austin,
Abilene, Dallas Telcom,
Richardson, Cypress, Beaumont,
Corpus Christi, Houston,
Houston Telcom
Oklahoma: Oklahoma City, Tulsa
Arkansas: Little Rock
Louisiana: Shreveport, Harahan, Baton Rouge, Lake Charles
- - ---------------------------
LOS ANGELES DISTRICT
- - ---------------------------
210 South Anderson Street
Los Angeles, California 90033
213 265-7000
BRANCHES
California: Anaheim, Costa
Mesa, Long Beach, San
Bernardino, San Diego,
Santa Barbara, Van Nuys,
Bakersfield, San Marcos
- - ---------------------------
PHOENIX DISTRICT
- - ---------------------------
3350 West Earll Drive
Phoenix, Arizona 85017
602 269-2131
BRANCHES
Arizona: Mesa, Tucson,
Nogales
Colorado: Colorado Springs,
Denver
New Mexico: Albuquerque
Texas: El Paso
Nevada: Las Vegas,
Henderson
Utah: Salt Lake City
California: Chula Vista
<PAGE> 25
APPENDIX
Photographs appear throughout the printed Annual Report. These photos
are indicated in the electronic filing by [PHOTO].
<PAGE> 1
EXHIBIT 21
LIST OF SUBSIDIARIES
<PAGE> 2
EXHIBIT 21
----------
GRAYBAR ELECTRIC COMPANY, INC.
List of Subsidiaries
--------------------
Graybar Foreign Sales Corporation, a Virgin Islands corporation.
Graybar International, Inc., a Missouri corporation doing
business in the territory of Puerto Rico.
Graybar Financial Services, Inc., a Missouri corporation.
ComMart, Inc., a Missouri corporation.
Graybar/Minnesota, Inc., a Missouri corporation.
Graybar International Guam, Inc., a Missouri corporation.
Graybar Electric de Mexico, S.A. de C.V., a Mexican corporation.
Graybar Free Zone, S.A., a Panamanian corporation.
Graybar Electric Limited, a Canadian corporation.
Graybar Foundation, Inc., a Missouri corporation.
Graybar Services, Inc., an Illinois corporation.
Cognitive Training Corporation, a Missouri corporation.
Distribution Associates, Inc., a Missouri corporation.
Graybar Electric (Ontario) Limited, a Canadian corporation.
Graybar/New Jersey, Inc., a Missouri corporation.
Graybar Telecomunicaciones y Datos, S.A. de C.V., a Mexican
corporation.
Graybar Holdings Limited, a Canadian corporation.
