<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 March 31, 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) 727 - 3900
--------------------
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by section 13 or 15 (d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
YES X NO
----- -----
Common Stock Outstanding at April 30, 1995: 4,547,656
----------------------
(Number of Shares)
<PAGE> 2
PART I
------
<TABLE>
CONSOLIDATED BALANCE SHEETS
---------------------------
(Dollars Stated in Thousands)
(Except for Share and Per Share Data)
<CAPTION>
MARCH 31, 1995 DECEMBER 31, 1994
----------------------- -----------------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 30,553 $ 17,144
----------------------- -----------------------
Trade receivables 298,877 301,525
----------------------- ----------------------
Merchandise inventory 258,954 211,482
----------------------- ----------------------
Other current assets 11,823 12,273
----------------------- ----------------------
Total current assets 600,207 542,424
----------------------- ----------------------
PROPERTY
Land 19,601 19,297
----------------------- ----------------------
Buildings and permanent fixtures 216,448 210,623
----------------------- ----------------------
Capital equipment leases 21,828 32,235
----------------------- ----------------------
Less-Accumulated depreciation 101,778 108,722
----------------------- ----------------------
Net property 156,099 153,433
----------------------- ----------------------
DEFERRED FEDERAL INCOME TAXES 15,624 15,234
----------------------- ----------------------
OTHER ASSETS 9,026 8,695
----------------------- ----------------------
$ 780,956 $ 719,786
======================= ======================
CURRENT LIABILITIES
Notes payable to banks $ 127,824 $ 80,488
----------------------- ----------------------
Current portion of long-term debt 13,897 13,457
----------------------- ----------------------
Trade accounts payable 270,057 258,656
----------------------- ----------------------
Income taxes 6,003 ---
----------------------- ----------------------
Other accrued taxes 6,794 7,475
----------------------- ----------------------
Accrued payroll and benefit costs 15,595 35,075
----------------------- ----------------------
Dividends payable --- 4,801
----------------------- ----------------------
Other payables and accruals 18,621 6,338
----------------------- ----------------------
Total current liabilities 458,791 406,290
----------------------- ----------------------
POSTRETIREMENT BENEFITS LIABILITY 74,285 74,141
----------------------- ----------------------
LONG TERM DEBT 91,998 90,212
----------------------- ----------------------
</TABLE>
2
<PAGE> 3
<TABLE>
CONSOLIDATED BALANCE SHEETS
---------------------------
(Dollars Stated in Thousands)
(Except for Share and Per Share Data)
<CAPTION>
MARCH 31, 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 (143) (60)
------------- -------------
Outstanding 8,105 8,188 162 164
------------- ------------- ------------- -------------
Common:
------
Stated value $20 per share
Authorized 5,000,000 shares
<CAPTION>
SHARES
------
1995 1994
---- ----
<S> <C> <C> <C> <C>
Issued to voting trustees 4,352,733 4,347,757
------------- -------------
Issued to shareholders 250,975 250,893
------------- -------------
In treasury, at cost (44,634) (5,708)
------------- -------------
Outstanding 4,559,074 4,592,942 91,181 91,859
------------- ------------ ------------- -------------
Common shares subscribed 385 486
------------- -------------
Retained earnings 64,500 57,081
------------- -------------
Less-Subscriptions receivable 346 447
------------- -------------
TOTAL SHAREHOLDERS' EQUITY 155,882 149,143
------------- -------------
$ 780,956 $ 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
MARCH 31, 1995 MARCH 31, 1994
-------------------- -------------------
<S> <C> <C>
GROSS SALES, net of returns and allowances $ 629,551 $ 510,302
-------------------- -------------------
Less - Cash discounts 2,223 1,866
-------------------- -------------------
NET SALES 627,328 508,436
-------------------- -------------------
COST OF MERCHANDISE SOLD 511,616 412,925
-------------------- -------------------
Gross profit 115,712 95,511
-------------------- -------------------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 93,073 82,725
-------------------- -------------------
DEPRECIATION AND AMORTIZATION 4,378 3,730
-------------------- -------------------
Income from operations 18,261 9,056
-------------------- -------------------
OTHER INCOME, net 933 752
-------------------- -------------------
INTEREST EXPENSE 3,790 2,461
-------------------- -------------------
Income before provision for income taxes 15,404 7,347
-------------------- -------------------
PROVISION FOR INCOME TAXES
Current 7,003 3,380
-------------------- -------------------
Deferred (390) (221)
-------------------- -------------------
Total provision for income taxes 6,613 3,159
-------------------- -------------------
NET INCOME $ 8,791 $ 4,188
==================== ===================
NET INCOME PER SHARE OF COMMON STOCK (NOTE 2) $ 1.92 $ .89
==================== ===================
DIVIDENDS
Preferred - $.25 per share $ 2 $ 3
-------------------- -------------------
Common - $.30 per share 1,370 1,319
-------------------- -------------------
$ 1,372 $ 1,322
==================== ===================
See accompanying Notes to Consolidated Financial Statements
</TABLE>
4
<PAGE> 5
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(Dollars Stated in Thousands)
(Except for Share and Per Share Data)
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1995 1994
--------------- ----------------
<S> <C> <C>
CASH FLOWS FROM OPERATIONS
Net Income $ 8,791 $ 4,188
--------------- ----------------
Adjustments to reconcile net income
to cash used by operations:
Depreciation and amortization 4,378 3,730
--------------- ----------------
Deferred income taxes (390) (221)
--------------- ----------------
Changes in assets and liabilities:
Trade receivables 2,648 364
--------------- ----------------
Merchandise inventory (47,472) (27,118)
--------------- ----------------
Other current assets 450 (461)
--------------- ----------------
Other assets (331) (326)
--------------- ----------------
Trade accounts payable 11,401 20,517
--------------- ----------------
Accrued payroll and benefit costs (19,480) (13,773)
--------------- ----------------
Other accrued liabilities 17,749 10,274
--------------- ----------------
(31,047) (7,014)
--------------- ----------------
Net cash used by operations (22,256) (2,826)
--------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property 198 32
--------------- ----------------
Capital expenditures for property (7,242) (3,799)
--------------- ----------------
Net cash used by investing activities (7,044) (3,767)
--------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in notes payable to banks 47,336 27,025
--------------- ----------------
Proceeds from long-term debt 4,000 ---
--------------- ----------------
Repayment of long-term debt (828) (767)
--------------- ----------------
Principal payments under capital equipment leases (946) (2,289)
--------------- ----------------
Sale of common stock 101 139
--------------- ----------------
Purchase of treasury stock (781) (1,358)
--------------- ----------------
Dividends paid (6,173) (6,232)
--------------- ----------------
Net cash flow provided by financing activities 42,709 16,518
--------------- ----------------
NET INCREASE IN CASH 13,409 9,925
--------------- ----------------
CASH, BEGINNING OF YEAR 17,144 17,332
--------------- ----------------
CASH, END OF FIRST QUARTER $ 30,553 $ 27,257
=============== ================
See accompanying Notes to Consolidated Financial Statements
</TABLE>
5
<PAGE> 6
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>
THREE MONTHS 1995 THREE MONTHS 1994
--------------------- ---------------------
<S> <C> <C>
Earnings for Three Months $ 8,791 $ 4,188
--------------------- ---------------------
Dividends on Preferred Stock 2 3
--------------------- ---------------------
Available for Common Stock $ 8,789 $ 4,185
--------------------- ---------------------
Average Common Shares Outstanding 4,575,015 4,701,223 <F*>
--------------------- ---------------------
Earnings Per Share $ 1.92 $ .89 <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 4,424,680.
</TABLE>
6
<PAGE> 7
MANAGEMENT'S DISCUSSION & ANALYSIS
OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
(Dollars Stated in Thousands)
RESULTS OF OPERATIONS
- ---------------------
Net sales in the first three months of 1995 were 23.4% higher than
in the first three 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 three months of 1995 increased $20,201
(21.2%) compared to the first three 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 three months of 1995 compared to the first three months of
1994 occurred largely because of adjustments in personnel complement
and adjustments in compensation and related expenses.
Interest charges increased in the first three months of 1995
compared to the first three 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 generally 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 $8,057 in
the first three months of 1995 compared to the same period in 1994.
7
<PAGE> 8
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
March 31, 1995, current assets exceeded current liabilities by $141,416,
up $5,282 from December 31, 1994. The current assets at March 31, 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 March 31, 1995, the Company had available to it unused lines of
credit amounting to $91,000. These lines are available to meet short-
term cash requirements of the Company. Bank borrowings outstanding
during 1995 through March 31 ranged from a minimum of $77,000 to a
maximum of $142,000.
The Company has funded its capital requirements from operations,
stock issuances to its employees and long term debt. In February, 1995,
the Company received the proceeds from a ten-year note for $4,000,000 at
a fixed interest rate of 8.53% with principal payable in quarterly
installments beginning in June, 1995. During the first three months of
1995, cash used by operations amounted to $22,256 which was $19,430 more
than the cash used by operations in the first three months of 1994.
Cash provided from the sale of common stock and proceeds received on
stock subscriptions amounted to $101 in the first three months of 1995.
Additional cash of approximately $346 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.
8
<PAGE> 9
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.
9
<PAGE> 10
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.
May 10, 1995 GRAYBAR ELECTRIC COMPANY, INC.
--------------------
(Date)
/S/ E. A. McGRATH
------------------------------
E. A. McGRATH
PRESIDENT
/S/ J. R. SEATON
------------------------------
J. R. SEATON
VICE PRESIDENT
AND COMPTROLLER
10
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 30,553
<SECURITIES> 0
<RECEIVABLES> 298,877
<ALLOWANCES> 0
<INVENTORY> 258,954
<CURRENT-ASSETS> 600,207
<PP&E> 257,877
<DEPRECIATION> 101,778
<TOTAL-ASSETS> 780,956
<CURRENT-LIABILITIES> 458,791
<BONDS> 91,998
<COMMON> 91,181
0
162
<OTHER-SE> 64,539
<TOTAL-LIABILITY-AND-EQUITY> 780,956
<SALES> 627,328
<TOTAL-REVENUES> 627,328
<CGS> 511,616
<TOTAL-COSTS> 511,616
<OTHER-EXPENSES> 97,451
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,790
<INCOME-PRETAX> 15,404
<INCOME-TAX> 6,613
<INCOME-CONTINUING> 8,791
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,791
<EPS-PRIMARY> 1.92
<EPS-DILUTED> 1.92
</TABLE>
