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
May 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 18,513,012 common shares outstanding as of June 30, 1997.
<PAGE 2>
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
May 31, November 30,
ASSETS 1997 1996
---------- ------------
(Unaudited) (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 2 863 $ 3 473
Marketable securities 63 824 67 622
Accounts receivable, less
allowance for possible losses
of $758,000 and $554,000 24 299 21 725
Inventories at lower of cost or market 22 684 23 275
Prepaid expenses and miscellaneous 4 280 4 346
---------- ------------
TOTAL CURRENT ASSETS 117 950 120 441
---------- ------------
PROPERTY, PLANT AND EQUIPMENT,
less accumulated depreciation of
$15,647,000 and $14,611,000 46 658 42 805
---------- ------------
OTHER ASSETS:
Marketable securities 10 861 10 720
Goodwill and other intangibles, net
of accumulated amortization of
$1,957,000 and $1,877,000 4 068 4 148
Miscellaneous 70 67
---------- ------------
TOTAL OTHER ASSETS 14 999 14 935
---------- ------------
$ 179 607 $ 178 181
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 3 994 $ 4 132
Accrued liabilities 8 250 11 844
----------- ------------
TOTAL CURRENT LIABILITIES 12 244 15 976
----------- ------------
LONG-TERM DEBT & DEFERRED INCOME TAXES 6 117 6 544
----------- ------------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par, shares
authorized 50,000,000;
issued 18,513,012 & 18,513,012 186 186
Paid-in-capital 4 915 4 915
Cumulative marketable securities
valuation adjustment 108 670
Cumulative loss on foreign
currency translation ( 276) ( 197)
Retained earnings 157 109 150 883
---------- -----------
162 042 156 457
Less Treasury Stock, at cost;
50,400 shares ( 796) ( 796)
---------- -----------
TOTAL STOCKHOLDERS' EQUITY 161 246 155 661
---------- -----------
$ 179 607 $ 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
--------------------------
May 31, May 31,
1997 1996
(Unaudited) (Unaudited)
NET SALES $ 35 832 $ 35 044
COST OF SALES 18 808 18 094
----------- -----------
Gross profit 17 024 16 950
SELLING, GENERAL AND ADMINISTRATIVE 9 677 9 581
----------- -----------
Operating income 7 347 7 369
OTHER INCOME 906 900
----------- -----------
Income before taxes on income 8 253 8 269
TAXES ON INCOME 2 955 2 942
----------- -----------
NET INCOME $ 5 298 $ 5 327
=========== ===========
NET INCOME PER COMMON SHARE $0.29 $0.29
===== =====
(See Notes To Consolidated Financial Statements)
<PAGE 4>
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except Per
Share Amounts)
Six Months Ended
--------------------------
May 31, May 31,
1997 1996
(Unaudited) (Unaudited)
NET SALES $ 66 636 $ 63 229
COST OF SALES 35 262 34 180
----------- -----------
Gross profit 31 374 29 049
SELLING, GENERAL AND ADMINISTRATIVE 19 188 18 303
----------- -----------
Operating income 12 186 10 746
OTHER INCOME 1 866 1 876
----------- -----------
Income before taxes on income 14 052 12 622
TAXES ON INCOME 4 864 4 339
----------- -----------
NET INCOME $ 9 188 $ 8 283
=========== ===========
NET INCOME PER COMMON SHARE $0.50 $0.45
===== =====
(See Notes To Consolidated Financial Statements)
<PAGE 5>
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF RETAINED EARNINGS
(In Thousands)
Six Months Ended
May 31, 1997
(Unaudited)
RETAINED EARNINGS, beginning of period $ 150 883
CASH DIVIDEND ($0.16 per share) ( 2 962)
NET INCOME, six months ended 9 188
May 31, 1997
-----------
RETAINED EARNINGS, end of period $ 157 109
===========
(See Notes To Consolidated Financial Statements)
<PAGE 6>
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
(In Thousands)
Six Months Ended
---------------------------
May 31, May 31,
1997 1996
(Unaudited) (Unaudited)
CASH FLOWS PROVIDED BY (USED IN) OPERATING
ACTIVITIES:
Net income from continuing operations $ 9 188 $ 8 283
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation & amortization 1 667 1 567
Changes in assets and liabilities:
(Increase) in accounts
receivable ( 2 652) ( 2 590)
Decrease (Increase)in inventory 591 ( 2 878)
Decrease in prepaid expense 418 660
(Increase) Decrease in
other assets ( 2) 47
(Decrease) Increase in accounts
payable and accrued expenses ( 3 650) 1 206
(Decrease) in deferred taxes ( 302) ( 102)
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 5 258 6 193
----------- -----------
CASH FLOWS PROVIDED BY (USED IN) INVESTING
ACTIVITIES:
Proceeds on sale of building 1 731 0
Capital expenditures ( 7 320) ( 2 142)
Purchases of marketable securities ( 6 951) ( 26 389)
Sales of marketable securities 9 759 22 301
----------- -----------
NET CASH (USED IN) INVESTING ACTIVITIES ( 2 781) ( 6 230)
----------- -----------
(Continued on Next Page)
<PAGE 7>
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS (CONTINUED)
_________________________________
(In Thousands)
Six Months Ended
---------------------------
May 31, May 31,
1997 1996
(Unaudited) (Unaudited)
CASH FLOWS PROVIDED BY (USED IN) FINANCING
ACTIVITIES:
Purchase of Treasury Stock ( 0) ( 637)
Proceeds from exercise of stock
options 0 352
Dividend paid ( 2 962) ( 2 949)
Principal payments on long-term debt ( 125) ( 229)
___________ ___________
NET CASH (USED IN) FINANCING ACTIVITIES ( 3 087) ( 3 463)
___________ ___________
NET (DECREASE) IN CASH ( 610) ( 3 500)
CASH AT BEGINNING OF PERIOD 3 473 6 519
___________ ___________
CASH AT END OF PERIOD $ 2 863 $ 3 019
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest $ 123 $ 164
Income taxes 4 621 3 578
(See Notes To Consolidated Financial Statements)
<PAGE 8>
JUNO LIGHTING, INC. AND SUBSIDIARIES
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 May 31, 1997 and for the three months
ended May 31, 1996 would have been the same as that presented for the
respective periods.
INVENTORIES
Inventories are summarized as follows:
(In Thousands)
May 31, November 30,
1997 1996
Finished goods $ 9 701 $ 11 241
Raw materials 12 983 12 034
----------- -----------
$ 22 684 $ 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:
May 31, May 31,
1997 1996
3 months ended 18,525,768 18,482,825
6 months ended 18,525,930 18,483,816
<PAGE 9>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
===========================================================
RESULTS OF OPERATIONS:
- ----------------------
Three Months Ended May 31, 1997 Compared With Three Months
- ----------------------------------------------------------
Ended May 31, 1996
- ------------------
During the second quarter ended May 31, 1997, net sales increased by
2.0% to $35,832,000 compared to $35,044,000 for the like period in 1996.
Sales increases, principally as a result of new products introduced in 1996
were reduced, in part, by sales declines through its wholly owned subsidiary
Indy Lighting. Sales through Juno's Canadian subsidiary increased 11.5% to
$2,092,000 compared to $1,876,000 for the like period in 1996.
Cost of sales as a percentage of net sales increased to 52.5% for the
quarter, compared to 51.6% for the like period in 1996. Decreases in raw
material costs and benefits from retooling were offset by higher labor and
overhead costs. Some of these increases, as a percentage of sales, were due
to reduced sales levels at Indy Lighting.
Selling, general and administrative expenses expressed as a percentage
of sales decreased slightly to 27.0% as compared to 27.3% in 1996 due to
economies of scale associated with the increase in sales.
As a result of the above factors, operating income decreased to 20.5% of
sales as compared to 21.0% for the like period in 1996.
Six Months Ended May 31, 1997 Compared With Six Months
- ------------------------------------------------------
Ended May 31, 1996
- ------------------
During the six month period ended May 31, 1997, net sales increased 5.4%
to $66,636,000 compared to $63,229,000 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.
Cost of sales as a percentage of net sales decreased to 52.9% for the
six month period compared to 54.1% for the like period in 1996. This decrease
is due primarily to favorable comparisons versus the first half of 1996 which
included a one-time bonus expenditure resulting from a 1995 labor contract
settlement. In addition, decreases in raw material costs and benefits
associated from retooling were reduced by higher labor and overhead costs.
(Continued on Next Page)
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
decreased to 28.8% as compared to 29.0% in 1996 once again due to economies of
scale associated with the increase in sales.
LIQUIDITY AND CAPITAL RESOURCES:
- --------------------------------
During the six month period ended May 31, 1997, the Company generated
positive net cash flow from operating activities of $5,258,000. This was
comprised of net income, depreciation and amortization, decreases in inventory
and prepaid expenses (collectively aggregating $11,864,000), net of increases
in accounts receivable of $2,652,000 and decreases in accounts payable of
$3,650,000. In addition, the Company generated $1,731,000 of cash from the
proceeds on the sale of one of its three buildings currently on the real
estate market in Des Plaines, Illlinois. The Company used the net cash
provided from operating activities to finance capital expenditures of
$7,320,000, primarily for its new factory and corporate office facility, and
pay dividends of $2,962,000 ($.16 per common share).
On, June 2, 1997, the Company announced the declaration of a cash
dividend of 8 cents per share payable July 15, 1997, to shareholders of record
June 13, 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 Section 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 Ace, 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. The Motion to Dismiss has been
fully briefed and is awaiting a ruling by the court.
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders
The 1997 Annual Meeting of Stockholders of Juno Lighting, Inc. was
held on April 29, 1997.
At the meeting, Ronel W. Giedt and Allan Coleman were elected
directors to serve for a term ending at the 2000 Annual Meeting of
Stockholders. The results of the votes were as follows:
ABSTEN- BROKERS
NAME VOTES FOR WITHHELD TIONS NON-VOTES
-------------- ---------- ------- ------- ---------
Ronel W. Giedt 16,043,787 463,490 463,190 0
Allan Coleman 16,040,207 467,070 463,190 0
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
---------------------------------------
George J. Bilek, Vice President Finance
(Principal Financial Officer)
Dated: July 15, 1997
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<RECEIVABLES> 25057
<ALLOWANCES> 758
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<BONDS> 4308
0
0
<COMMON> 186
<OTHER-SE> 161060
<TOTAL-LIABILITY-AND-EQUITY> 179607
<SALES> 66636
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