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<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, 1996
------------------------------------
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, 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 April 30, 1996: 4,754,080
-------------------------------
(Number of Shares)
<PAGE> 2
<TABLE>
PART I
------
CONSOLIDATED BALANCE SHEETS
---------------------------
(Dollars Stated in Thousands)
(Except for Share and Per Share Data)
<CAPTION>
MARCH 31, 1996 DECEMBER 31, 1995
-------------- -----------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 37,260 $ 21,033
--------------- ---------------
Trade receivables 322,897 344,232
--------------- ---------------
Merchandise inventory 286,338 259,782
--------------- ---------------
Other current assets 12,682 12,800
--------------- ---------------
Total current assets 659,177 637,847
--------------- ---------------
PROPERTY
Land 19,469 19,921
--------------- ---------------
Buildings and permanent fixtures 235,131 228,323
--------------- ---------------
Capital equipment leases 22,732 22,732
--------------- ---------------
Less-Accumulated depreciation 114,923 110,843
--------------- ---------------
Net property 162,409 160,133
--------------- ---------------
DEFERRED FEDERAL INCOME TAXES 14,630 14,354
--------------- ---------------
OTHER ASSETS 11,628 10,946
--------------- ---------------
$ 847,844 $ 823,280
=============== ===============
CURRENT LIABILITIES
Notes payable to banks $ 140,695 $ 130,554
--------------- ---------------
Current portion of long-term debt 13,399 13,479
--------------- ---------------
Trade accounts payable 288,764 277,729
--------------- ---------------
Income taxes 5,159 ---
--------------- ---------------
Other accrued taxes 7,836 8,957
--------------- ---------------
Accrued payroll and benefit costs 16,602 37,350
--------------- ---------------
Dividends payable --- 4,915
--------------- ---------------
Other payables and accruals 22,268 8,982
--------------- ---------------
Total current liabilities 494,723 481,966
--------------- ---------------
POSTRETIREMENT BENEFITS LIABILITY 76,176 75,900
--------------- ---------------
LONG TERM DEBT 89,379 91,257
--------------- ---------------
</TABLE>
2
<PAGE> 3
<TABLE>
CONSOLIDATED BALANCE SHEETS
(Dollars Stated in Thousands)
(Except for Share and Per Share Data)
<CAPTION>
MARCH 31, 1996 DECEMBER 31, 1995
------------------ --------------------
<S> <C> <C>
SHAREHOLDERS' EQUITY
CAPITAL STOCK
Preferred:
---------
Par value $20 per share
Authorized 300,000 shares
<CAPTION>
SHARES
------
1996 1995
---- ----
<S> <C> <C> <C> <C>
Issued to voting trustees 7,504 7,504
------------- -------------
In treasury, at cost (175) ---
------------- -------------
Outstanding 7,329 7,504 147 150
------------- ------------- ------------------ --------------------
Common:
------
Stated value $20 per share
Authorized 7,500,000 shares
<CAPTION>
SHARES
------
1996 1995
---- ----
<S> <C> <C> <C> <C>
Issued to voting trustees 4,598,310 4,228,414
------------- -------------
Issued to shareholders 246,427 244,315
------------- -------------
In treasury, at cost (68,023) (12,431)
------------- -------------
Outstanding 4,776,714 4,460,298 95,534 89,206
------------- ------------- ------------------ --------------------
Common shares subscribed 1,625 9,008
------------------ --------------------
Retained earnings 91,828 84,801
------------------ --------------------
Less-Subscriptions receivable 1,568 9,008
------------------ --------------------
TOTAL SHAREHOLDERS' EQUITY 187,566 174,157
------------------ --------------------
$ 847,844 $ 823,280
================== ====================
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, 1996 MARCH 31, 1995
------------------ ------------------
<S> <C> <C>
GROSS SALES, net of returns and allowances $ 694,138 $ 629,551
------------------ ------------------
Less - Cash discounts 2,207 2,223
------------------ ------------------
NET SALES 691,931 627,328
------------------ ------------------
COST OF MERCHANDISE SOLD 567,464 511,616
------------------ ------------------
Gross profit 124,467 115,712
------------------ ------------------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 102,294 93,073
------------------ ------------------
DEPRECIATION AND AMORTIZATION 4,631 4,378
------------------ ------------------
Income from operations 17,542 18,261
------------------ ------------------
OTHER INCOME, net 897 933
------------------ ------------------
INTEREST EXPENSE 4,091 3,790
------------------ ------------------
Income before provision for income taxes 14,348 15,404
------------------ ------------------
PROVISION FOR INCOME TAXES
Current 6,159 7,003
------------------ ------------------
Deferred (276) (390)
------------------ ------------------
Total provision for income taxes 5,883 6,613
------------------ ------------------
NET INCOME $ 8,465 $ 8,791
================== ==================
NET INCOME PER SHARE OF COMMON STOCK (NOTE 2) $ 1.80 $ 1.92
================== ==================
DIVIDENDS
Preferred - $.25 per share $ 2 $ 2
------------------ ------------------
Common - $.30 per share 1,436 1,370
------------------ ------------------
$ 1,438 $ 1,372
================== ==================
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,
1996 1995
----------------- -----------------
<S> <C> <C>
CASH FLOWS FROM OPERATIONS
Net Income $ 8,465 $ 8,791
----------------- -----------------
Adjustments to reconcile net income
to cash provided (used) by operations:
Depreciation and amortization 4,631 4,378
----------------- -----------------
Deferred income taxes (276) (390)
----------------- -----------------
Changes in assets and liabilities:
Trade receivables 21,335 2,648
----------------- -----------------
Merchandise inventory (26,556) (47,472)
----------------- -----------------
Other current assets 118 450
----------------- -----------------
Other assets (682) (331)
----------------- -----------------
Trade accounts payable 11,035 11,401
----------------- -----------------
Accrued payroll and benefit costs (20,748) (19,480)
----------------- -----------------
Other accrued liabilities 17,600 17,749
----------------- -----------------
6,457 (31,047)
----------------- -----------------
Net cash provided (used) by operations 14,922 (22,256)
----------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property 564 198
----------------- -----------------
Capital expenditures for property (7,471) (7,242)
----------------- -----------------
Net cash used by investing activities (6,907) (7,044)
----------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in notes payable to banks 10,141 47,336
----------------- -----------------
Proceeds from long-term debt --- 4,000
----------------- -----------------
Repayment of long-term debt (917) (828)
----------------- -----------------
Principal payments under capital equipment leases (1,041) (946)
----------------- -----------------
Sale of common stock 7,497 101
----------------- -----------------
Purchase of treasury stock (1,115) (781)
----------------- -----------------
Dividends paid (6,353) (6,173)
----------------- -----------------
Net cash flow provided by financing activities 8,212 42,709
----------------- -----------------
NET INCREASE IN CASH 16,227 13,409
----------------- -----------------
CASH, BEGINNING OF YEAR 21,033 17,144
----------------- -----------------
CASH, END OF FIRST QUARTER $ 37,260 $ 30,553
================= =================
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 1996 THREE MONTHS 1995
----------------------- -----------------------
<S> <C> <C>
Earnings for Three Months $ 8,465 $ 8,791
----------------------- -----------------------
Dividends on Preferred Stock 2 2
----------------------- -----------------------
Available for Common Stock $ 8,463 $ 8,789
----------------------- -----------------------
Average Common Shares Outstanding 4,696,320 4,575,015
----------------------- -----------------------
Earnings Per Share $ 1.80 $ 1.92
----------------------- -----------------------
</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 1996 were 10.3% higher than in the
first three months of 1995. 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 1996 increased $8,755 (7.6%)
compared to the first three months of 1995 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 1996 compared to the first three months of 1995 occurred
largely because of adjustments in personnel complement and adjustments in
compensation and related expenses.
Interest expense increased in the first three months of 1996 compared to
the first three months of 1995 primarily due to increased levels of borrowing
incurred to finance higher aggregate levels of inventory and receivables.
The combined effect of the increase in gross profits and the decrease in
other income, together with increases in selling, general and administrative
expenses, interest expense and depreciation and amortization, resulted in a
decrease in pretax earnings of $1,056 in the first three months of 1996
compared to the same period in 1995.
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, 1996, current assets exceeded current liabilities by $164,454, up $8,573
from December 31, 1995. The current assets at March 31, 1996 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, 1996, the Company had available to it unused lines of credit
amounting to $163,000. These lines are available to meet short-term cash
requirements of the Company. Bank borrowings outstanding during 1996 through
March 31 ranged from a minimum of $89,000 to a maximum of $168,000.
The Company has funded its capital requirements from operations, stock
issuances to its employees and long term debt. During the first three months
of 1996, cash provided by operations amounted to $14,922 compared to $22,256
cash used by operations in the first three months of 1995. Cash provided from
the sale of common stock and proceeds received on stock subscriptions amounted
to $7,497 in the first three months of 1996. Additional cash of approximately
$404 will be provided in the remainder of 1996 as a result of payments to be
made for stock subscribed to by employees under the 1995 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 13, 1996 GRAYBAR ELECTRIC COMPANY, INC.
- ---------------------------
(Date)
/S/ C. L. HALL
------------------------------
C. L. HALL
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-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 37,260
<SECURITIES> 0
<RECEIVABLES> 322,897
<ALLOWANCES> 0
<INVENTORY> 286,338
<CURRENT-ASSETS> 12,682
<PP&E> 277,332
<DEPRECIATION> 114,923
<TOTAL-ASSETS> 847,844
<CURRENT-LIABILITIES> 494,723
<BONDS> 89,379
<COMMON> 95,534
0
147
<OTHER-SE> 91,885
<TOTAL-LIABILITY-AND-EQUITY> 847,844
<SALES> 691,931
<TOTAL-REVENUES> 691,931
<CGS> 567,464
<TOTAL-COSTS> 567,464
<OTHER-EXPENSES> 106,925
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,091
<INCOME-PRETAX> 14,348
<INCOME-TAX> 5,883
<INCOME-CONTINUING> 8,465
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,465
<EPS-PRIMARY> 1.80
<EPS-DILUTED> 1.80
</TABLE>
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