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Previous: CAPITAL PROPERTIES INC /RI/, 10QSB, 1995-08-10 |
Next: CENTRAL RESERVE LIFE CORP, 10-Q, 1995-08-10 |
<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
Commission File Number 0-255
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 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 (I.R.S. Employer
incorporation or organization) Identification No.)
34 NORTH MERAMEC AVENUE, ST. LOUIS, MO 63105
------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
POST OFFICE BOX 7231, ST. LOUIS, MO 63177
------------------------------------------------------------------------
(Mailing Address) (Zip Code)
Registrant's telephone number, including area code: (314) 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 July 31, 1995: 4,514,984
------------------
(Number of Shares)
<PAGE> 2
PART I
<TABLE>
CONSOLIDATED BALANCE SHEETS
---------------------------
(Dollars Stated in Thousands)
(Except for Share and Per Share Data)
<CAPTION>
JUNE 30, 1995 DECEMBER 31, 1994
------------------- -------------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 31,624 $ 17,144
------------------- -------------------
Trade receivables 327,635 301,525
------------------- -------------------
Merchandise inventory 265,681 211,482
------------------- -------------------
Other current assets 12,873 12,273
------------------- -------------------
Total current assets 637,813 542,424
------------------- -------------------
PROPERTY
Land 19,609 19,297
------------------- -------------------
Buildings and permanent fixtures 220,362 210,623
------------------- -------------------
Capital equipment leases 22,428 32,235
------------------- -------------------
Less-Accumulated depreciation 105,658 108,722
------------------- -------------------
Net property 156,741 153,433
------------------- -------------------
DEFERRED FEDERAL INCOME TAXES 15,548 15,234
------------------- -------------------
OTHER ASSETS 10,054 8,695
------------------- -------------------
$ 820,156 $ 719,786
=================== ===================
CURRENT LIABILITIES
Notes payable to banks $ 135,268 $ 80,488
------------------- -------------------
Current portion of long-term debt 15,983 13,457
------------------- -------------------
Trade accounts payable 283,849 258,656
------------------- -------------------
Income taxes 3,737 ---
------------------- -------------------
Other accrued taxes 6,660 7,475
------------------- -------------------
Accrued payroll and benefit costs 22,018 35,075
------------------- -------------------
Dividends payable --- 4,801
------------------- -------------------
Other payables and accruals 22,166 6,338
------------------- -------------------
Total current liabilities 489,681 406,290
------------------- -------------------
POSTRETIREMENT BENEFITS LIABILITY 74,615 74,141
------------------- -------------------
LONG TERM DEBT 94,674 90,212
------------------- -------------------
</TABLE>
2
<PAGE> 3
<TABLE>
CONSOLIDATED BALANCE SHEETS
---------------------------
(Dollars Stated in Thousands)
(Except for Share and Per Share Data)
<CAPTION>
JUNE 30, 1995 DECEMBER 31, 1994
------------------- -------------------
<S> <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 shareholders 8,248 8,248
----------- -----------
In treasury, at cost (225) (60)
----------- -----------
Outstanding 8,023 8,188 160 164
----------- ----------- ------------------- -------------------
Common:
-------
Stated value $20 per share
Authorized 7,500,000 shares
<CAPTION>
SHARES
------
1995 1994
---- ----
<S> <C> <C> <C> <C>
Issued to voting trustees 4,357,677 4,347,757
----------- -----------
Issued to shareholders 251,059 250,893
----------- -----------
In treasury, at cost (83,849) (5,708)
----------- -----------
Outstanding 4,524,887 4,592,942 90,498 91,859
----------- ----------- ------------------- -------------------
Common shares subscribed 285 486
------------------- -------------------
Retained earnings 70,489 57,081
------------------- -------------------
Less-Subscriptions receivable 246 447
------------------- -------------------
TOTAL SHAREHOLDERS' EQUITY 161,186 149,143
------------------- -------------------
$ 820,156 $ 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
JUNE 30, 1995 JUNE 30, 1994
------------------- -------------------
<S> <C> <C>
GROSS SALES, net of returns and allowances $ 694,429 $ 591,050
------------------- -------------------
Less - Cash discounts 2,403 2,114
------------------- -------------------
NET SALES 692,026 588,936
------------------- -------------------
COST OF MERCHANDISE SOLD 570,595 485,025
------------------- -------------------
Gross profit 121,431 103,911
------------------- -------------------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 100,103 86,672
------------------- -------------------
DEPRECIATION AND AMORTIZATION 4,307 3,911
------------------- -------------------
Income from operations 17,021 13,328
------------------- -------------------
OTHER INCOME, net 256 247
------------------- -------------------
INTEREST EXPENSE 4,326 2,945
------------------- -------------------
Income before provision for income taxes 12,951 10,630
------------------- -------------------
PROVISION FOR INCOME TAXES
Current 5,525 4,806
------------------- -------------------
Deferred 76 (234)
------------------- -------------------
Total provision for income taxes 5,601 4,572
------------------- -------------------
NET INCOME 7,350 6,058
=================== ===================
NET INCOME PER SHARE OF COMMON STOCK $ 1.62 $ 1.31<F*>
=================== ===================
DIVIDENDS
Preferred - $.25 per share $ 2 $ 1
------------------- -------------------
Common - $.30 per share 1,359 1,311
------------------- -------------------
$ 1,361 $ 1,312
=================== ===================
<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>
SIX MONTHS ENDED
JUNE 30, 1995 JUNE 30, 1994
------------------ ------------------
<S> <C> <C>
GROSS SALES, net of returns and allowances $ 1,323,980 $ 1,101,352
------------------ ------------------
Less - Cash discounts 4,626 3,980
------------------ ------------------
NET SALES 1,319,354 1,097,372
------------------ ------------------
COST OF MERCHANDISE SOLD 1,082,211 897,950
------------------ ------------------
Gross profit 237,143 199,422
------------------ ------------------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 193,176 169,397
------------------ ------------------
DEPRECIATION AND AMORTIZATION 8,685 7,641
------------------ ------------------
Income from operations 35,282 22,384
------------------ ------------------
OTHER INCOME, net 1,189 999
------------------ ------------------
INTEREST EXPENSE 8,116 5,406
------------------ ------------------
Income before provision for income taxes 28,355 17,977
------------------ ------------------
PROVISION FOR INCOME TAXES
Current 12,528 8,186
------------------ ------------------
Deferred (314) (455)
------------------ ------------------
Total provision for income taxes 12,214 7,731
------------------ ------------------
NET INCOME 16,141 10,246
================== ==================
NET INCOME PER SHARE OF COMMON STOCK (NOTE 2) $ 3.54 $ 2.19
================== ==================
DIVIDENDS
Preferred - $.50 per share $ 4 $ 4
------------------ ------------------
Common - $.60 per share 2,729 2,630
------------------ ------------------
$ 2,733 $ 2,634
================== ==================
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>
SIX MONTHS ENDED JUNE 30,
1995 1994
--------------- ---------------
<S> <C> <C>
CASH FLOWS FROM OPERATIONS
Net Income $ 16,141 $ 10,246
--------------- ---------------
Adjustments to reconcile net income
to cash provided (used) by operations:
Depreciation and amortization 8,685 7,641
--------------- ---------------
Deferred income taxes (314) (455)
--------------- ---------------
Changes in assets and liabilities:
Trade receivables (26,110) (33,962)
--------------- ---------------
Merchandise inventory (54,199) (39,781)
--------------- ---------------
Other current assets (600) (898)
--------------- ---------------
Other assets (1,359) (797)
--------------- ---------------
Trade accounts payable 25,193 56,996
--------------- ---------------
Accrued payroll and benefit costs (13,057) (8,308)
--------------- ---------------
Other accrued liabilities 19,224 14,786
--------------- ---------------
(42,537) (4,778)
--------------- ---------------
Net cash provided (used) by operations (26,396) 5,468
--------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property 239 103
--------------- ---------------
Capital expenditures for property (11,632) (6,887)
--------------- ---------------
Net cash used by investing activities (11,393) (6,784)
--------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in notes payable to banks 54,780 (1,774)
--------------- ---------------
Proceeds from long-term debt 14,000 35,000
--------------- ---------------
Repayment of long-term debt (6,498) (3,665)
--------------- ---------------
Principal payments under capital equipment leases (1,114) (2,289)
--------------- ---------------
Sale of common stock 201 265
--------------- ---------------
Purchase of treasury stock (1,566) (2,209)
--------------- ---------------
Dividends paid (7,534) (7,544)
--------------- ---------------
Net cash flow provided by financing activities 52,269 17,784
--------------- ---------------
NET INCREASE IN CASH 14,480 16,468
--------------- ---------------
CASH, BEGINNING OF YEAR 17,144 17,332
--------------- ---------------
CASH, END OF SECOND QUARTER $ 31,624 $ 33,800
=============== ===============
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.
<TABLE>
Note 2
------
<CAPTION>
SIX MONTHS 1995 SIX MONTHS 1994
------------------- -------------------
<S> <C> <C>
Earnings for Six Months $ 16,141 $ 10,246
------------------- -------------------
Dividends on Preferred Stock 4 4
------------------- -------------------
Available for Common Stock $ 16,137 $ 10,242
------------------- -------------------
Average Common Shares Outstanding 4,557,639 4,672,911<F*>
------------------- -------------------
Earnings Per Share $ 3.54 $ 2.19<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 4,398,034.
</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 six months of 1995 were 20.2% higher than in
the first six 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 six months of 1995 increased $37,721 (18.9%)
compared to the first six 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 six months of 1995 compared to the first six months of 1994 occurred
largely because of adjustments in personnel complement and adjustments in
compensation and related expenses.
Interest charges increased in the first six months of 1995 compared
to the first six 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 $10,378 in the first six 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
June 30, 1995, current assets exceeded current liabilities by $148,132, up
$11,998 from December 31, 1994. The current assets at June 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 June 30, 1995, the Company had available to it unused lines of
credit amounting to $133,000. These lines are available to meet short-term
cash requirements of the Company. Bank borrowings outstanding during 1995
through June 30 ranged from a minimum of $77,000 to a maximum of $151,000.
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 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 six months of 1995, cash used by operations
amounted to $26,396 which was $31,864 less than the cash provided by
operations in the first six months of 1994. Cash provided from the sale
of common stock and proceeds received on stock subscriptions amounted to
$201 in the first six months of 1995. Additional cash of approximately
$246 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 4. Submission of Matters to a Vote of Security Holders.
The annual meeting of shareholders occurred on June 8,
1995. All of the nominees named in the Information Statement filed
with the Commission and mailed to shareholders in accordance with
the provisions of Regulation 14-C were elected. The names of the
nominees elected follow; all received 4,301,775 votes, no negative
votes were cast.
1. T. S. Gurganous
2. J. R. Hade
3. C. L. Hall
4. R. H. Haney
5. G. W. Harper
6. E. A. McGrath
7. R. L. Mygrant
8. R. D. Offenbacher
9. I. Orloff
10. R. A. Reynolds
11. J. R. Seaton
12. A. A. Thompson
13. G. S. Tulloch, Jr.
14. J. F. Van Pelt
15. J. W. Wolf
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.
August 10, 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 31,624
<SECURITIES> 0
<RECEIVABLES> 327,635
<ALLOWANCES> 0
<INVENTORY> 265,681
<CURRENT-ASSETS> 12,873
<PP&E> 262,399
<DEPRECIATION> 105,658
<TOTAL-ASSETS> 820,156
<CURRENT-LIABILITIES> 489,681
<BONDS> 94,674
<COMMON> 90,498
0
160
<OTHER-SE> 70,528
<TOTAL-LIABILITY-AND-EQUITY> 820,156
<SALES> 1,319,354
<TOTAL-REVENUES> 1,319,354
<CGS> 1,082,211
<TOTAL-COSTS> 1,082,211
<OTHER-EXPENSES> 201,861
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,116
<INCOME-PRETAX> 28,355
<INCOME-TAX> 12,214
<INCOME-CONTINUING> 16,141
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,141
<EPS-PRIMARY> 3.54
<EPS-DILUTED> 3.54
</TABLE>
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