<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
Commission File Number 0-255
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
--------------------------------
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 incorporation (I.R.S. Employer
or organization) Identification No.)
34 NORTH MERAMEC AVENUE, ST. LOUIS, MO 63105
- - - - - -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
POST OFFICE BOX 7231, ST. LOUIS, MO 63177
- - - - - -------------------------------------------------------------------------------
(Mailing Address) (Zip Code)
Registrant's telephone number, including area code: (314) 512 - 9200
------------------
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
------ ------
Common Stock Outstanding at October 31, 1995: 4,482,402
--------------------
(Number of Shares)
<PAGE> 2
PART I
------
<TABLE>
CONSOLIDATED BALANCE SHEETS
---------------------------
(Dollars Stated in Thousands)
(Except for Share and Per Share Data)
<CAPTION>
SEPTEMBER 30, 1995 DECEMBER 31, 1994
------------------- -------------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 40,420 $ 17,144
------------------- -------------------
Trade receivables 339,982 301,525
------------------- -------------------
Merchandise inventory 268,919 211,482
------------------- -------------------
Other current assets 12,953 12,273
------------------- -------------------
Total current assets 662,274 542,424
------------------- -------------------
PROPERTY
Land 20,031 19,297
------------------- -------------------
Buildings and permanent fixtures 225,025 210,623
------------------- -------------------
Capital equipment leases 22,428 32,235
------------------- -------------------
Less-Accumulated depreciation 109,588 108,722
------------------- -------------------
Net property 157,896 153,433
------------------- -------------------
DEFERRED FEDERAL INCOME TAXES 15,713 15,234
------------------- -------------------
OTHER ASSETS 9,845 8,695
------------------- -------------------
$ 845,728 $ 719,786
=================== ===================
CURRENT LIABILITIES
Notes payable to banks $ 130,537 $ 80,488
------------------- -------------------
Current portion of long-term debt 16,050 13,457
------------------- -------------------
Trade accounts payable 291,165 258,656
------------------- -------------------
Income taxes 5,939 ---
------------------- -------------------
Other accrued taxes 8,358 7,475
------------------- -------------------
Accrued payroll and benefit costs 28,765 35,075
------------------- -------------------
Dividends payable --- 4,801
------------------- -------------------
Other payables and accruals 27,522 6,338
------------------- -------------------
Total current liabilities 508,336 406,290
------------------- -------------------
POSTRETIREMENT BENEFITS LIABILITY 75,037 74,141
------------------- -------------------
LONG TERM DEBT 91,989 90,212
------------------- -------------------
</TABLE>
2
<PAGE> 3
<TABLE>
CONSOLIDATED BALANCE SHEETS
---------------------------
(Dollars Stated in Thousands)
(Except for Share and Per Share Data)
<CAPTION>
SEPTEMBER 30, 1995 DECEMBER 31, 1994
-------------------- -------------------
<S> <C> <C> <C> <C>
SHAREHOLDERS' EQUITY
CAPITAL STOCK
Preferred:
---------
Par value $20 per share
Authorized 300,000 shares
<CAPTION>
SHARES
------
1995 1994
---- ----
<S> <C> <C> <C> <C>
Issued to voting trustees 8,248 8,248
------------ -----------
In treasury, at cost (465) (60)
------------ ------------
Outstanding 7,783 8,188 156 164
------------ ------------ -------------------- -------------------
Common:
------
Stated value $20 per share
Authorized 7,500,000 shares
<CAPTION>
SHARES
------
1995 1994
---- ----
<S> <C> <C> <C> <C>
Issued to voting trustees 4,362,504 4,347,757
------------ ------------
Issued to shareholders 251,139 250,893
------------ ------------
In treasury, at cost (128,782) (5,708)
------------ ------------
Outstanding 4,484,861 4,592,942 89,697 91,859
------------ ------------ -------------------- -------------------
Common shares subscribed 186 486
-------------------- -------------------
Retained earnings 80,475 57,081
-------------------- -------------------
Less-Subscriptions receivable 148 447
-------------------- -------------------
TOTAL SHAREHOLDERS' EQUITY 170,366 149,143
-------------------- -------------------
$ 845,728 $ 719,786
==================== ===================
See accompanying Notes to Consolidated Financial Statements
</TABLE>
3
<PAGE> 4
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(Dollars Stated in Thousands)
(Except for Share and Per Share Data)
<CAPTION>
QUARTER ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994
-------------------- --------------------
<S> <C> <C>
GROSS SALES, net of returns and allowances $ 731,067 $ 630,323
-------------------- --------------------
Less - Cash discounts 2,417 2,389
-------------------- --------------------
NET SALES 728,650 627,934
-------------------- --------------------
COST OF MERCHANDISE SOLD 600,420 517,328
-------------------- --------------------
Gross profit 128,230 110,606
-------------------- --------------------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 101,998 92,521
-------------------- --------------------
DEPRECIATION AND AMORTIZATION 4,492 4,124
-------------------- --------------------
Income from operations 21,740 13,961
-------------------- --------------------
OTHER INCOME, net 903 699
-------------------- --------------------
INTEREST EXPENSE 4,426 3,161
-------------------- --------------------
Income before provision for income taxes 18,217 11,499
-------------------- --------------------
PROVISION FOR INCOME TAXES
Current 7,046 5,293
-------------------- --------------------
Deferred (165) (349)
-------------------- --------------------
Total provision for income taxes 6,881 4,944
-------------------- --------------------
NET INCOME 11,336 6,555
==================== ====================
NET INCOME PER SHARE OF COMMON STOCK $ 2.52 $ 1.42 <F*>
==================== ====================
DIVIDENDS
Preferred - $.25 per share $ 2 $ 3
-------------------- --------------------
Common - $.30 per share 1,348 1,300
-------------------- --------------------
$ 1,350 $ 1,303
==================== ====================
<FN>
<F*> Restated for the declaration of a 6.25% stock dividend in 1994.
See accompanying Notes to Consolidated Financial Statements
</TABLE>
4
<PAGE> 5
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(Dollars Stated in Thousands)
(Except for Share and Per Share Data)
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994
-------------------- --------------------
<S> <C> <C>
GROSS SALES, net of returns and allowances $ 2,055,047 $ 1,731,675
-------------------- --------------------
Less - Cash discounts 7,043 6,369
-------------------- --------------------
NET SALES 2,048,004 1,725,306
-------------------- --------------------
COST OF MERCHANDISE SOLD 1,682,631 1,415,278
-------------------- --------------------
Gross profit 365,373 310,028
-------------------- --------------------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 295,174 261,918
-------------------- --------------------
DEPRECIATION AND AMORTIZATION 13,177 11,765
-------------------- --------------------
Income from operations 57,022 36,345
-------------------- --------------------
OTHER INCOME, net 2,092 1,698
-------------------- --------------------
INTEREST EXPENSE 12,542 8,567
-------------------- --------------------
Income before provision for income taxes 46,572 29,476
-------------------- --------------------
PROVISION FOR INCOME TAXES
Current 19,574 13,479
-------------------- --------------------
Deferred (479) (804)
-------------------- --------------------
Total provision for income taxes 19,095 12,675
-------------------- --------------------
NET INCOME 27,477 16,801
==================== ====================
NET INCOME PER SHARE OF COMMON STOCK (NOTE 2) $ 6.05 $ 3.61
==================== ====================
DIVIDENDS
Preferred - $.75 per share $ 6 $ 7
-------------------- --------------------
Common - $.90 per share 4,077 3,930
-------------------- --------------------
$ 4,083 $ 3,937
==================== ====================
See accompanying Notes to Consolidated Financial Statements
</TABLE>
5
<PAGE> 6
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(Dollars Stated in Thousands)
(Except for Share and Per Share Data)
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
1995 1994
---------------- ---------------
<S> <C> <C>
CASH FLOWS FROM OPERATIONS
Net Income $ 27,477 $ 16,801
---------------- ---------------
Adjustments to reconcile net income
to cash provided (used) by operations:
Depreciation and amortization 13,177 11,765
---------------- ---------------
Deferred income taxes (479) (804)
---------------- ---------------
Changes in assets and liabilities:
Trade receivables (38,457) (48,657)
---------------- ---------------
Merchandise inventory (57,437) (45,160)
---------------- ---------------
Other current assets (680) (1,063)
---------------- ---------------
Other assets (1,150) (1,068)
---------------- ---------------
Trade accounts payable 32,509 54,764
---------------- ---------------
Accrued payroll and benefit costs (6,310) (2,134)
---------------- ---------------
Other accrued liabilities 28,902 22,845
---------------- ---------------
(29,925) (9,512)
---------------- ---------------
Net cash provided (used) by operations (2,448) 7,289
---------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property 474 133
---------------- ---------------
Capital expenditures for property (17,514) (15,829)
---------------- ---------------
Net cash used by investing activities (17,040) (15,696)
---------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in notes payable to banks 50,049 10,187
---------------- ---------------
Proceeds from long-term debt 14,000 35,000
---------------- ---------------
Repayment of long-term debt (7,460) (4,521)
---------------- ---------------
Principal payments under capital equipment
leases (2,770) (3,801)
---------------- ---------------
Sale of common stock 299 399
---------------- ---------------
Purchase of treasury stock (2,470) (2,814)
---------------- ---------------
Dividends paid (8,884) (8,847)
---------------- ---------------
Net cash flow provided by financing activities 42,764 25,603
---------------- ---------------
NET INCREASE IN CASH 23,276 17,196
---------------- ---------------
CASH, BEGINNING OF YEAR 17,144 17,332
---------------- ---------------
CASH, END OF THIRD QUARTER $ 40,420 $ 34,528
================ ===============
See accompanying Notes to Consolidated Financial Statements
</TABLE>
6
<PAGE> 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AND OTHER INFORMATION
---------------------------
(Dollars Stated in Thousands)
(Except for Share and Per Share Data)
Note 1
- - - - - ------
The condensed financial statements included herein have been prepared
by the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading. It is suggested that these condensed financial
statements be read in conjunction with the financial statements and the
notes thereto included in the Company's latest annual report on Form 10-K.
In the opinion of the Company, the quarterly report includes all
adjustments, consisting of normal recurring accruals, necessary for the
fair presentation of the financial statements presented. Such interim
financial information is subject to year-end adjustments and independent
audit.
Results for interim periods are not necessarily indicative of results
to be expected for the full year.
Note 2
- - - - - ------
<TABLE>
<CAPTION>
NINE MONTHS 1995 NINE MONTHS 1994
------------------ ----------------------
<S> <C> <C>
Earnings for Nine Months $ 27,477 $ 16,801
------------------ ----------------------
Dividends on Preferred Stock 6 7
------------------ ----------------------
Available for Common Stock $ 27,471 $ 16,794
------------------ ----------------------
Average Common Shares Outstanding 4,540,207 4,655,162 <F*>
------------------ ----------------------
Earnings Per Share $ 6.05 $ 3.61 <F*>
------------------ ----------------------
<FN>
<F*> Restated for the declaration of a 6.25% stock dividend in 1994.
Prior to adjusting for the stock dividend, the average common shares
outstanding were 4,381,329.
</TABLE>
7
<PAGE> 8
MANAGEMENT'S DISCUSSION & ANALYSIS
OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
(Dollars Stated in Thousands)
RESULTS OF OPERATIONS
- - - - - ---------------------
Net sales in the first nine months of 1995 were 18.7% higher than in
the first nine months of 1994. The higher net sales resulted from
improvements in the market sectors of the economy in which the Company
operates.
Gross profit in the first nine months of 1995 increased $55,345
(17.9%) compared to the first nine months of 1994 primarily due to
increased sales in the electrical and communication markets.
The increase in selling, general and administrative expenses in the
first nine months of 1995 compared to the first nine months of 1994
occurred largely because of adjustments in personnel complement and
adjustments in compensation and related expenses.
Interest charges increased in the first nine months of 1995 compared
to the first nine months of 1994 primarily due to increased levels of
borrowing incurred to finance higher aggregate levels of inventory and
receivables. Interest rates on 1995 short-term borrowings have been higher
than for the same period in 1994.
The combined effect of the increases in gross profits and other
income, together with increases in selling, general and administrative
expenses, interest charges and depreciation and amortization, resulted in
an increase in pretax earnings of $17,096 in the first nine months of 1995
compared to the same period in 1994.
8
<PAGE> 9
MANAGEMENT'S DISCUSSION & ANALYSIS
OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
(Dollars Stated in Thousands)
FINANCIAL CONDITION AND LIQUIDITY
- - - - - ---------------------------------
The financial condition of the Company continues to be strong. At
September 30, 1995, current assets exceeded current liabilities by
$153,938, up $17,804 from December 31, 1994. The current assets at
September 30, 1995 were sufficient to meet the cash needs required to pay
current liabilities. The Company does not have any plans or commitments
which would require significant amounts of additional working capital.
At September 30, 1995, the Company had available to it unused lines
of credit amounting to $148,000. These lines are available to meet short-
term cash requirements of the Company. Bank borrowings outstanding during
1995 through September 30 ranged from a minimum of $77,000 to a maximum of
$158,000.
The Company has funded its capital requirements from operations, stock
issuances to its employees and long and short term debt. In February,
1995, the Company received the proceeds from a ten-year note for $4,000 at
a fixed interest rate of 8.53% with principal payable in quarterly
installments beginning in June, 1995. In April, 1995, the Company received
the proceeds from a five-year note for $10,000 at a fixed interest rate of
7.67% with principal payable in five equal annual installments beginning
in April, 1996. During the first nine months of 1995, cash used by
operations was $2,448 compared to $7,289 cash provided by operations in the
first nine months of 1994. Cash provided from the sale of common stock and
proceeds received on stock subscriptions amounted to $299 in the first nine
months of 1995. Additional cash of approximately $148 will be provided in
the remainder of 1995 as a result of payments to be made for stock
subscribed to by employees under the 1992 Common Stock Purchase Plan.
9
<PAGE> 10
PART II: OTHER INFORMATION
----------------------------
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits furnished in accordance with provisions of Item 7 of
Regulation S-K.
(2) None
(4) None
(11) None
(15) None
(18) None
(19) None
(20) None
(23) None
(24) None
(25) None
(28) None
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter for
which this report is filed.
10
<PAGE> 11
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
November 13, 1995 GRAYBAR ELECTRIC COMPANY, INC.
--------------------------
(Date)
/S/ C. L. HALL
------------------------------
C. L. HALL
PRESIDENT
/S/ J. R. SEATON
------------------------------
J. R. SEATON
VICE PRESIDENT
AND COMPTROLLER
11
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 40,420
<SECURITIES> 0
<RECEIVABLES> 339,982
<ALLOWANCES> 0
<INVENTORY> 268,919
<CURRENT-ASSETS> 12,953
<PP&E> 267,484
<DEPRECIATION> 109,588
<TOTAL-ASSETS> 845,728
<CURRENT-LIABILITIES> 508,336
<BONDS> 91,989
<COMMON> 89,697
0
156
<OTHER-SE> 80,513
<TOTAL-LIABILITY-AND-EQUITY> 845,728
<SALES> 2,048,004
<TOTAL-REVENUES> 2,048,004
<CGS> 1,682,631
<TOTAL-COSTS> 1,682,631
<OTHER-EXPENSES> 308,351
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,542
<INCOME-PRETAX> 46,572
<INCOME-TAX> 19,095
<INCOME-CONTINUING> 27,477
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 27,477
<EPS-PRIMARY> 6.05
<EPS-DILUTED> 6.05
</TABLE>
