FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
August 31, 1997
For the quarterly period ended ...........................................
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ................... to ....................
0-11631
Commission File Number ..........
JUNO LIGHTING, INC.
..........................................................................
(Exact name of registrant as specified in its charter)
Incorporated in Delaware 36-2852993
..........................................................................
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2001 South Mt. Prospect Ave., Des Plaines, Illinois 60017-5065
..........................................................................
(Address of principal executive offices) (Zip Code)
847 - 827 - 9880
..........................................................................
(Registrant's telephone number, including area code)
..........................................................................
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 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 .....
There were 18,527,570 common shares outstanding as of September 30, 1997.
<PAGE 2>
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
=====================================
(In Thousands)
August 31, November 30,
ASSETS 1997 1996
------ (Unaudited) (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 4 456 $ 3 473
Marketable securities 64 403 67 622
Accounts receivable, less
allowance for possible losses
of $952,000 and $554,000 25 306 21 725
Inventories at lower of cost or market 22 298 23 275
Prepaid expenses and miscellaneous 4 151 4 346
----------- -----------
TOTAL CURRENT ASSETS 120 614 120 441
----------- -----------
PROPERTY, PLANT AND EQUIPMENT,
less accumulated depreciation of
$16,375,000 and $14,611,000 48 488 42 805
----------- -----------
OTHER ASSETS:
Marketable securities 11 120 10 720
Goodwill and other intangibles, net
of accumulated amortization of
$2,001,000 and $1,877,000 4 633 4 148
Miscellaneous 112 67
----------- -----------
TOTAL OTHER ASSETS 15 865 14 935
----------- -----------
$ 184 967 $ 178 181
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 5 526 $ 4 132
Accrued liabilities 7 516 11 844
----------- -----------
TOTAL CURRENT LIABILITIES 13 042 15 976
----------- -----------
LONG-TERM DEBT & DEFERRED INCOME TAXES 5 799 6 544
STOCKHOLDERS' EQUITY:
Common stock, $.01 par, shares
authorized 50,000,000;
issued 18,527,570 & 18,513,012 186 186
Paid-in-capital 4 915 4 915
Cumulative marketable securities
valuation adjustment 482 670
Cumulative loss on foreign
currency translation ( 302) ( 197)
Retained earnings 161 416 150 883
----------- -----------
166 697 156 457
Less Treasury Stock, at cost;
35,842 & 50,400 shares ( 571) ( 796)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 166 126 155 661
----------- -----------
$ 184 967 $ 178 181
=========== ===========
(See Notes To Consolidated Financial Statements)
<PAGE 3>
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
===========================================
(In Thousands Except Per
Share Amounts)
Three Months Ended
--------------------------
August 31, August 31,
1997 1996
---------- ----------
(Unaudited) (Unaudited)
NET SALES $ 37 238 $ 34 869
COST OF SALES 18 471 17 457
----------- -----------
Gross profit 18 767 17 412
SELLING, GENERAL AND ADMINISTRATIVE 10 530 9 076
------------ -----------
Operating income 8 237 8 336
OTHER INCOME 899 920
----------- -----------
Income before taxes on income 9 136 9 256
TAXES ON INCOME 3 324 3 364
----------- -----------
NET INCOME $ 5 812 $ 5 892
=========== ===========
NET INCOME PER COMMON SHARE $0.31 $0.32
===== =====
(See Notes To Consolidated Financial Statements)
<PAGE 4>
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
===========================================
(In Thousands Except Per
Share Amounts)
Nine Months Ended
--------------------------
August 31, August 31,
1997 1996
----------- -----------
(Unaudited) (Unaudited)
NET SALES $ 103 874 $ 98 099
COST OF SALES 53 733 51 638
----------- -----------
Gross profit 50 141 46 461
SELLING, GENERAL AND ADMINISTRATIVE 29 719 27 379
----------- -----------
Operating income 20 422 19 082
OTHER INCOME 2 765 2 796
----------- -----------
Income before taxes on income 23 187 21 878
TAXES ON INCOME 8 187 7 703
----------- -----------
NET INCOME $ 15 000 $ 14 175
=========== ===========
NET INCOME PER COMMON SHARE $0.81 $0.77
===== =====
(See Notes To Consolidated Financial Statements)
<PAGE 5>
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF RETAINED EARNINGS
=====================================================
(In Thousands)
Nine Months Ended
August 31, 1997
(Unaudited)
RETAINED EARNINGS, beginning of period $ 150 883
CASH DIVIDEND ($0.24 per share) ( 4 443)
REISSUANCE OF TREASURY STOCK ( 24)
NET INCOME, nine months ended August 31, 1997 15 000
-----------
RETAINED EARNINGS, end of period $ 161 416
===========
(See Notes To Consolidated Financial Statements)
<PAGE 6>
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
=====================================
(In Thousands)
Nine Months Ended
---------------------------
August 31, August 31,
1997 1996
(Unaudited) (Unaudited)
CASH FLOWS PROVIDED BY (USED IN) OPERATING
ACTIVITIES:
Net income from continuing operations $ 15 000 $ 14 175
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation & amortization 2 438 2 324
Changes in assets and liabilities:
(Increase) in accounts
receivable ( 3 685) ( 4 281)
Decrease (Increase) in inventory 977 ( 3 294)
Decrease in prepaid expense 351 871
(Increase) Decrease in other assets ( 654) 48
(Decrease) Increase in accounts
payable and accrued expenses ( 2 852) 915
(Decrease) in deferred taxes ( 557) ( 189)
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES: 11 018 10 569
----------- -----------
CASH FLOWS PROVIDED BY (USED IN) INVESTING
ACTIVITIES:
Proceeds on sale of building 1 731 0
Capital expenditures ( 9 876) ( 4 503)
Purchases of marketable securities ( 15 201) ( 34 368)
Sales of marketable securities 17 741 30 087
----------- -----------
NET CASH (USED IN) INVESTING
ACTIVITIES ( 5 605) ( 8 784)
----------- -----------
(Continued on Next Page)
<PAGE 7>
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS (CONTINUED)
================================
(In Thousands)
Nine Months Ended
--------------------------
August 31, August 31,
1997 1996
__________ ___________
(Unaudited) (Unaudited)
CASH FLOWS PROVIDED BY (USED IN) FINANCING
ACTIVITIES:
Proceeds from sale of Common Stock thru
Employee Purchase Plan 201 0
Purchase of Treasury Stock 0 ( 637)
Proceeds from exercise of stock
options 0 400
Dividend paid ( 4 443) ( 4 425)
Principal payments on long-term debt ( 188) ( 343)
___________ ___________
NET CASH (USED IN)
FINANCING ACTIVITIES ( 4 430) ( 5 005)
___________ ___________
NET INCREASE (DECREASE) IN CASH 983 ( 3 220)
CASH AT BEGINNING OF PERIOD 3 473 6 519
___________ ___________
CASH AT END OF PERIOD $ 4 456 $ 3 299
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest $ 183 $ 242
Income taxes 8 199 7 140
(See Notes To Consolidated Financial Statements)
<PAGE 8>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FINANCIAL INFORMATION
The financial information presented in these consolidated
financial statements is unaudited but, in the opinion of management,
reflects all normal adjustments necessary for the fair presentation of
the Company's financial position, results of its operations and cash
flows. The information in the condensed consolidated balance sheet as of
November 30, 1996 was derived from the Company's audited consolidated
financial statements.
The Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings Per Share," in February
1997. This statement establishes new standards for computing and
presenting earnings per share. This statement is effective for financial
statements issued for periods ending after December 15, 1997; earlier
adoption is not permitted. Adoption of this statement will require the
presentation of basic and diluted earnings per share. If the statement
had been adopted, pro forma basic and diluted earnings per share, for the
three months ended August 31, 1997 and for the three months ended August
31, 1996 would have been the same as that presented for the respective
periods.
INVENTORIES
Inventories are summarized as follows:
(In Thousands)
August 31, November 30,
1997 1996
----------- -----------
Finished goods $ 7 413 $ 11 241
Raw materials 14 885 12 034
----------- -----------
$ 22 298 $ 23 275
=========== ===========
NET INCOME PER COMMON SHARE
Net income per common share is calculated by dividing net income
by the weighted average number of common shares outstanding including
assumed exercise of stock options during the periods. Such weighted
average number of shares outstanding is as follows:
August 31, August 31,
1997 1996
---------- ----------
3 months ended 18,541,948 18,495,403
9 months ended 18,531,970 18,488,538
<PAGE 9>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
===========================================================
RESULTS OF OPERATIONS:
Three Months Ended August 31, 1997 Compared With Three Months
- -------------------------------------------------------------
Ended August 31, 1996
- ---------------------
During the third quarter ended August 31, 1997, net sales
increased by 6.8% to $37,238,000 compared to $34,869,000 for the
like period in 1996. This increase is due principally to new
products introduced in 1996 and sales increases through its
wholly owned subsidiary Indy Lighting. Sales through Juno's
Canadian subsidiary increased 8.4% to $2,374,000 compared to
$2,190,000 for the like period in 1996.
Cost of sales as a percentage of net sales decreased to
49.6% for the quarter, compared to 50.1% for the like period in
1996 due primarily to reductions in raw material costs.
Selling, general and administrative expenses expressed as a
percentage of sales increased to 28.3% for the third quarter of
1997 compared with 26.0% for the like period in 1996 due in part
to one-time charges to effect field repairs of a defective
component in certain exit and emergency lighting fixtures sold by
Juno. The fixtures from this recently introduced product line
required the replacement of an electronic component that was
supplied by a vendor.
As a result of the above factors, operating income decreased
to 22.1% of sales as compared to 23.9% for the like period in
1996.
Nine Months Ended August 31, 1997 Compared With Nine Months
- -----------------------------------------------------------
Ended August 31, 1996
- ---------------------
During the nine month period ended August 31, 1997, net
sales increased 5.9% to $103,874,000 compared to $98,099,000 for
the like period in 1996. Sales increases were due primarily to
favorable comparisons against relatively low sales results in the
first quarter of 1996 and increased demand for new products
introduced in 1996 and were reduced, in part, by sales declines
from Indy Lighting for the first six months of 1997.
Cost of sales as a percentage of net sales decreased to
51.7% for the nine month period compared to 52.6% for the like
period in 1996 due to favorable comparisons versus 1996 and
decreases in raw material costs.
(Continued on Next Page)
<PAGE 10>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION (continued)
=========================================================
Selling, general and administrative expenses as a percentage
of sales increased to 28.6% as compared to 27.9% in 1996 due to
the same factors cited above including charges for field repairs
of a defective component in certain exit and emergency lighting
fixtures aggregating approximately $700,000.
LIQUIDITY AND CAPITAL RESOURCES:
- --------------------------------
During the nine month period ended August 31, 1997, the
Company generated positive net cash flow from operating
activities of $11,018,000. This was comprised of net income,
depreciation and amortization, and decreases in inventory and
prepaid expenses (collectively aggregating $18,766,000), net of
increases in accounts receivable of $3,685,000 and accounts
payable of $2,852,000. The Company used the net cash provided
from operating activities to finance capital expenditures of
$9,876,000, primarily for its new factory and corporate office
facility, and pay dividends of $4,443,000 ($.24 per common
share).
The Company has finalized the construction phase of its new
factory and corporate office facility in Des Plaines, Illinois.
It is anticipated that occupancy will be completed by October 15,
1997. The cost of the project, including furniture and
equipment, totals approximately $22.3 million and has been
financed out of existing corporate funds.
On September 2, 1997, the Company announced the declaration
of a cash dividend of 8 cents per share payable October 15, 1997,
to shareholders of record September 15, 1997. The Board of
Directors intends to consider regular quarterly dividends at the
same rate. Management believes that the existing level of
working capital is adequate for the Company's liquidity needs
currently and in the foreseeable future. It is currently
anticipated that future working capital requirements and capital
expenditures will be met with internally generated funds.
<PAGE 11>
PART II - OTHER INFORMATION
===========================
Item 1. Legal Proceedings - Reference is made to Item 3 of Part I of the
Company's Annual Report on Form 10-K for the fiscal year ended
November 30, 1996 for a description of an action filed by Juno
Online Services, L.P.
Juno Online filed an Amended Complaint in the United States
District Court for the Northern District of Illinois on February
25, 1997. The four-count Amended Complaint seeks a declaration
of rights (Count I), and relief for trademark misuse (Count II),
for violations of Sections 43(a) of the Lanham Act (Count III),
and for unfair competition and deceptive trade practices under
Illinois state law (Count IV).
Juno answered the Amended Complaint on March 18, 1997, and filed
a Counterclaim seeking injunctive and other relief for Juno
Online's violations of the Lanham Act, for trademark dilution,
for unfair competition, for violation of Illinois' Uniform
Deceptive Trade Practices Act, for violation of Illinois'
Consumer Fraud and Deceptive Trade Practices Act, and for
violation of Illinois' Anti-Dilution Act. On that same date,
Juno filed a Motion to Dismiss Counts II, III and IV of Juno
Online's Amended Complaint and to strike all of Juno Online's
claims for monetary relief. On September 30, 1997, the District
Court granted Juno's Motion to Dismiss Counts II, III and IV,
entered judgment in Juno's favor on Count II, dismissed Counts
III and IV, and struck all claims for monetary relief, including
punitive damages in the Amended Complaint.
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders - None
Item 5. Other Information - None
Item 6. (a) Exhibits - None
(b) During the quarter for which this report is filed, no
reports on Form 8-K were filed.
<PAGE 12>
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.
JUNO LIGHTING, INC.
By:______________________________________
George J. Bilek, Vice President Finance
(Principal Financial Officer)
Dated: October 9, 1997
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<COMMON> 186
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