|
|
|
|
|
|
|
|
|
|
|
|
|
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended February 28, 1995
Commission file number 0-6953
LILLY INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
INDIANA 35-0471010
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
733 SOUTH WEST STREET
INDIANAPOLIS, INDIANA 46225
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(317) 687-6700
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 periods 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
<PAGE>
Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of the latest
practicable date.
Number of shares outstanding at March 31, 1995:
Class A Common 22,440,000
Class B Common 366,000
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
LILLY INDUSTRIES, INC. AND SUBSIDIARIES
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
February 28 February 28
1995 1994
_______________________
<S> <C> <C>
Net sales $80,447 $73,972
Costs and expenses:
Cost of products sold 53,567 49,731
Selling, administrative and general 15,309 14,899
Research and development 3,341 3,340
------- -------
72,217 67,970
------- -------
OPERATING INCOME 8,230 6,002
Other income (expense):
Interest income and sundry 133 18
Interest expense (616) (603)
------- -------
(483) (585)
------- -------
INCOME BEFORE INCOME TAXES 7,747 5,417
Income Taxes 3,100 2,276
------- -------
NET INCOME $ 4,647 $ 3,141
======= =======
Cash dividends per share--Note B $ 0.07 $ 0.06
======= =======
Average number of shares and equivalent shares
of capital stock outstanding--Note B 23,300 23,220
======= =======
Net income per share--Note B $ 0.20 $ 0.13
======= =======
<FN>
See notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
LILLY INDUSTRIES, INC. AND SUBSIDIARIES
(In thousands)
February 28 November 30
1995 1994
________________________
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 15,334 $ 26,581
Short-term investments 75 75
Accounts receivable, less allowances
for doubtful accounts (2/28/95, $1,851;
11/30/94, $1,759) 41,584 42,231
Inventories--Note C 25,391 23,885
Prepaid expenses 1,060 285
-------- --------
TOTAL CURRENT ASSETS 83,444 93,057
OTHER ASSETS 11,125 10,464
INTANGIBLE ASSETS 51,579 50,978
PROPERTY AND EQUIPMENT
Land 4,301 4,044
Buildings and equipment 72,796 71,721
Allowances for depreciation (deduction) (41,194) (40,012)
-------- --------
35,903 35,753
-------- --------
$182,051 $190,252
======== ========
<FN>
See notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
LILLY INDUSTRIES, INC. AND SUBSIDIARIES
(In thousands)
February 28 November 30
1995 1994
________________________
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 29,174 $ 29,288
Salaries, wages, commissions and
related items 5,413 9,160
State and local taxes 888 1,520
Federal income taxes 3,634 4,401
Current portion of long-term debt 7,056 7,084
-------- --------
TOTAL CURRENT LIABILITIES 46,165 51,453
LONG-TERM DEBT 21,028 28,026
OTHER LIABILITIES 11,660 11,349
SHAREHOLDERS' EQUITY
Capital stock:
Class A (limited voting) 14,886 14,831
Class B (voting) 300 300
Additional capital 72,765 71,972
Retained earnings 41,281 38,223
Currency translation adjustments 150 185
Cost of capital stock in treasury
(deduction) (26,184) (26,087)
-------- --------
103,198 99,424
-------- --------
$182,051 $190,252
======== ========
<FN>
See notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
LILLY INDUSTRIES, INC. AND SUBSIDIARIES
(In thousands)
Three Months Ended
February 28 February 28
1995 1994
________________________
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 4,647 $ 3,141
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 1,241 1,095
Amortization of intangibles 933 1,113
Deferred income taxes (20) (48)
Changes in operating assets and liabilities:
Accounts receivable 647 610
Inventories (1,506) (177)
Prepaid expenses (775) (796)
Accounts payable and accrued expenses (4,493) (2,829)
Income taxes (767) 1,041
Sundry (321) (201)
------- -------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (414) 2,949
INVESTING ACTIVITIES
Purchases of property and equipment (1,400) (1,464)
Sundry (1,563) 1,103
------- -------
NET CASH USED BY INVESTING ACTIVITIES (2,963) (361)
FINANCING ACTIVITIES
Cash dividends paid (1,590) (1,352)
Principal payments on short-term and
long-term borrowings (7,031) (664)
Sundry 751 0
------- --------
NET CASH USED BY FINANCING ACTIVITIES (7,870) (2,016)
------- --------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (11,247) 572
Cash and cash equivalents at beginning of year 26,581 7,384
------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $15,334 $ 7,959
======= ========
<FN>
See notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
LILLY INDUSTRIES, INC. AND SUBSIDIARIES
FEBRUARY 28, 1995
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included. For further information, refer to the
consolidated financial statements and footnotes thereto included
in the Company's annual report on Form 10-K for the year ended
November 30, 1994.
NOTE B--SHARE AND PER SHARE AMOUNTS
Share and per share amounts have been adjusted to reflect the
three-for-two stock split distributed June 1, 1994. Equivalent
shares of capital stock represent additional shares assumed
issued upon exercise of stock options.
NOTE C--INVENTORIES
The principal inventory classifications are summarized as follows
(in thousands):
February 28 November 30
1995 1994
Finished products $ 17,729 $ 16,831
Raw materials 15,935 15,127
-------- --------
33,664 31,958
Less adjustment of certain
inventories to last in,
first out (LIFO) basis 8,273 8,073
-------- --------
$ 25,391 $ 23,885
======== ========
The Company uses the LIFO method in inventory valuation for
approximately 82% of inventories where an actual valuation can be
made only at the end of each year based on the inventory levels
<PAGE>
and costs at that time. Accordingly, interim LIFO calculations
must necessarily be based on management's estimates of expected
year-end inventory levels and costs. Since these are subject to
many forces beyond management's control, interim results are
subject to the final year-end LIFO inventory valuation. The
Company estimates the annual adjustment for LIFO and allocates it
to quarters based on actual inflation experienced in a quarter as
it relates to anticipated inflation for the year.
<PAGE>
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition.
Financial results for our first quarter ended February 28, 1995
set new records for a first quarter which is traditionally the
lowest sales and earnings quarter of the year. Sales improved to
$80.4 million for the 1995 first quarter, up 9% over the same
quarter a year ago. Net income increased 48% to $4.6 million or
20 cents per share compared to $3.1 million or 13 cents per share
for last year's first quarter.
Operating profit improvement for the first quarter resulted from
sales gains and control of operating expenses. Sales growth
mostly reflects the continuing strength of the domestic economy.
Recent raw material price increases have necessitated price
adjustments to our customers to maintain gross profit margins
which have remained relatively stable compared to a year ago.
In February Lilly and the Kentucky Cabinet for Economic
Development jointly announced Lilly's plans to build a
manufacturing plant in Bowling Green, Kentucky. The 85,000
square foot facility will be constructed to utilize modern
manufacturing and quality principles to serve customers in the
midwestern and southeastern United States.
On March 31, 1995 the Board of Directors approved the 225th
consecutive quarterly cash dividend. The dividend of 8 cents per
share will be paid on July 3, 1995 to shareholders of record on
June 12, 1995. Our annual shareholders' meeting will be held in
Indianapolis on April 20, 1995 at the Indiana Convention Center.
We are cautiously optimistic about sustaining improved
performance for the remainder of 1995.
PART II: OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) The following exhibits are included herein:
EXHIBIT 11 Computation of Earnings Per Share
EXHIBIT 27 Financial Data Schedule
(b) The Company did not file any reports on Form 8-K during the
three months ended February 28, 1995.
Note: All other item numbers under this section are not
applicable.
<PAGE>
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.
LILLY INDUSTRIES, INC.
(Registrant)
April 12, 1995
/s/ Douglas W. Huemme
Douglas W. Huemme
Chairman, President and
Chief Executive Officer
PRINCIPAL FINANCIAL OFFICER
April 12, 1995
/s/ Roman J. Klusas
Roman J. Klusas
Vice President and
Chief Financial Officer
EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
LILLY INDUSTRIES, INC.
(In thousands, except per share data)
Three Months Ended
February 28 February 28
1995 1994
<S> <C> <C>
Primary:
Average shares outstanding--
Note A 22,700 22,600
Net income $ 4,647 $ 3,141
Net income per common share--
Note A $ 0.20 $ 0.14
======= =======
Average shares outstanding--
Note A 22,700 22,600
Dilutive stock options based
on treasury stock method
using average market
price--Note A 600 620
------- -------
23,300 23,220
Net income $ 4,647 $ 3,141
Net income per common
and common equivalent
share--Note A $ 0.20 $ 0.13
======= =======
Fully diluted:
Average shares outstanding--
Note A 22,700 22,600
Dilutive stock options based
on the treasury stock
method using the higher
of quarter end or average
market price--Note A 600 620
------- -------
23,300 23,220
Net income $ 4,647 $ 3,141
Net income per common
<PAGE>
and common equivalent
share--Note A $ 0.20 $ 0.13
======= =======
<FN>
Note A--Share and per share amounts have been adjusted to reflect the
three-for-two stock split distributed June 1, 1994.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CAPTION>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED BALANCE SHEET OF LILLY INDUSTRIES, INC. AS AT FEBRUARY
28, 1995 AND THE CONSOLIDATED CONDENSED STATEMENT OF INCOME OF LILLY
INDUSTRIES, INC. FOR THE THREE MONTHS THEN ENDED AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
<S> <C>
<FISCAL-YEAR-END> NOV-30-1995
<PERIOD-END> FEB-28-1995
<PERIOD-TYPE> 3-MOS
<CASH> 15,334
<SECURITIES> 75
<RECEIVABLES> 43,435
<ALLOWANCES> (1,851)
<INVENTORY> 25,391
<CURRENT-ASSETS> 83,444
<PP&E> 77,097
<DEPRECIATION> (41,194)
<TOTAL-ASSETS> 182,051
<CURRENT-LIABILITIES> 46,165
<BONDS> 0
0
0
<COMMON> 87,951
<OTHER-SE> 15,247
<TOTAL-LIABILITY-AND-EQUITY> 182,051
<SALES> 80,447
<TOTAL-REVENUES> 80,447
<CGS> 53,567
<TOTAL-COSTS> 72,217
<OTHER-EXPENSES> (133)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 616
<INCOME-PRETAX> 7,747
<INCOME-TAX> 3,100
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,647
<EPS-PRIMARY> .20
<EPS-DILUTED> .20
</TABLE>
|
|