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, 1998
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.)
1300 South Wolf Road, 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.
X
Yes ..... No .....
There were 18,575,870 common shares outstanding as of June 30, 1998.
<PAGE 2>
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
May 31, November 30,
ASSETS 1998 1997
(Unaudited) (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 2 479 $ 6 806
Marketable securities 76 500 65 766
Accounts receivable, less
allowance for possible losses
of $1,192,000 and $907,000 26 520 22 533
Inventories at lower of cost or market 25 714 22 707
Prepaid expenses and miscellaneous 3 990 4 696
------- -------
TOTAL CURRENT ASSETS 135 203 122 508
------- -------
PROPERTY, PLANT AND EQUIPMENT,
less accumulated depreciation of
$13,606,000 and $11,887,000 45 171 44 449
------- -------
OTHER ASSETS:
Marketable securities 11 775 11 373
Goodwill and other intangibles, net
of accumulated amortization of
$1,451,000 and $1,367,000 4 291 4 603
Miscellaneous 355 4 456
------- -------
TOTAL OTHER ASSETS 16 421 20 432
------- -------
$ 196 795 $ 187 389
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 5 185 $ 3 579
Accrued liabilities 7 109 8 053
-------- --------
TOTAL CURRENT LIABILITIES 12 294 11 632
-------- --------
LONG-TERM DEBT & DEFERRED INCOME TAXES 5 102 5 127
-------- --------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par, shares
authorized 50,000,000;
issued 18,573,970 & 18,563,412 186 186
Paid-in-capital 5 130 4 934
Cumulative marketable securities
valuation adjustment 1 081 723
Cumulative loss on foreign
currency translation ( 479) ( 395)
Retained earnings 173 481 165 238
------- -------
179 399 170 686
Less Treasury Stock, at cost;
0 and 3,642 shares 0 ( 56)
TOTAL STOCKHOLDERS' EQUITY 179 399 170 630
------- -------
$ 196 795 $ 187 389
======= =======
(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,
1998 1997
(Unaudited) (Unaudited)
NET SALES $ 40 846 $ 35 832
COST OF SALES 20 345 18 808
------- -------
Gross profit 20 501 17 024
SELLING, GENERAL AND ADMINISTRATIVE 10 873 9 677
------- -------
Operating income 9 628 7 347
OTHER INCOME 1 141 906
------- -------
Income before taxes on income 10 769 8 253
TAXES ON INCOME 3 947 2 955
------- -------
NET INCOME $ 6 822 $ 5 298
======= =======
NET INCOME PER COMMON SHARE (BASIC AND DILUTED) $0.37 $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,
1998 1997
(Unaudited) (Unaudited)
NET SALES $ 75 232 $ 66 636
COST OF SALES 37 961 35 262
------- -------
Gross profit 37 271 31 374
SELLING, GENERAL AND ADMINISTRATIVE 21 341 19 188
------- -------
Operating income 15 930 12 186
OTHER INCOME 2 071 1 866
------- -------
Income before taxes on income 18 001 14 052
TAXES ON INCOME 6 414 4 864
------- -------
NET INCOME $ 11 587 $ 9 188
======= =======
NET INCOME PER COMMON SHARE (BASIC AND DILUTED) $0.62 $0.50
====== ======
(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, 1998
(Unaudited)
RETAINED EARNINGS, beginning of period $ 165 238
CASH DIVIDEND ($0.18 per share) ( 3 341)
REISSUANCE OF TREASURY STOCK ( 3)
NET INCOME, six months ended 11 587
May 31, 1998
--------
RETAINED EARNINGS, end of period $ 173 481
========
(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,
1998 1997
(Unaudited) (Unaudited)
CASH FLOWS PROVIDED BY (USED IN) OPERATING
ACTIVITIES:
Net income from continuing operations $ 11 587 $ 9 188
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation & amortization 1 842 1 667
Gain on Sale of Assets ( 175) 0
Changes in assets and liabilities:
(Increase) in accounts
receivable ( 4 070) ( 2 652)
(Increase) Decrease in inventory ( 3 007) 591
Decrease in prepaid expense 520 418
(Increase) in other assets ( 41) ( 2)
Increase (Decrease) in accounts
payable and accrued expenses 662 ( 3 650)
Increase (Decrease) in deferred taxes 33 ( 302)
------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 7 351 5 258
------- -------
CASH FLOWS PROVIDED BY (USED IN) INVESTING
ACTIVITIES:
Proceeds on sale of building 4 601 1 731
Capital expenditures ( 2 536) ( 7 320)
Purchases of marketable securities ( 26 093) ( 6 951)
Sales of marketable securities 15 500 9 759
------- -------
NET CASH (USED IN) INVESTING ACTIVITIES ( 8 528) ( 2 781)
------- -------
(Continued on Next Page)
JUNO LIGHTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS (CONTINUED)
_________________________________
(In Thousands)
Six Months Ended
---------------------------
May 31, May 31,
1998 1997
(Unaudited) (Unaudited)
CASH FLOWS PROVIDED BY (USED IN) FINANCING
ACTIVITIES:
Proceeds from exercise of stock
options 249 0
Dividend paid ( 3 341) ( 2 962)
Principal payments on long-term debt ( 58) ( 125)
___________ ___________
NET CASH (USED IN) FINANCING ACTIVITIES ( 3 150) ( 3 087)
___________ ___________
NET (DECREASE) IN CASH ( 4 327) ( 610)
CASH AT BEGINNING OF PERIOD 6 806 3 473
___________ ___________
CASH AT END OF PERIOD $ 2 479 $ 2 863
___________ ___________
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest $ 78 $ 123
Income taxes 5 810 4 621
(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, 1997 was derived from
the Company's audited consolidated financial statements.
INVENTORIES
Inventories are summarized as follows:
(In Thousands)
May 31, November 30,
1998 1997
Finished goods $ 11 493 $ 7 762
Raw materials 14 221 14 945
------- -------
$ 25 714 $ 22 707
======= =======
NET INCOME PER COMMON SHARE
Basic earnings per share is calculated by dividing net income by the
weighted average number of common shares outstanding. Diluted earnings per
share is calculated by dividing net income by the weighted average number of
common shares outstanding including assumed exercise of dilutive stock options
during the periods. Such weighted average number of shares outstanding is
as follows:
May 31, May 31,
1998 1997
3 months ended
Basic 18,564,020 18,513,012
Diluted 18,608,016 18,525,768
6 months ended
Basic 18,562,199 18,513,012
Diluted 18,594,120 18,525,930
<PAGE 9>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
===========================================================
RESULTS OF OPERATIONS:
Three Months Ended May 31, 1998 Compared With Three Months
Ended May 31, 1997
During the second quarter ended May 31, 1998, net sales increased by
14.0% to $40,846,000 compared to $35,832,000 for the like period in 1997.
This increase is due primarily to an overall increase in demand from improving
economic conditions and is represented by solid growth across substantially
all product lines and markets. Sales through Juno's Canadian subsidiary
increased 10.6% to $2,278,000 compared to $2,060,000.
Cost of sales as a percentage of net sales decreased to 49.8% for the
quarter, compared to 52.5% for the like period in 1997 due to increased
productivity, stable raw material costs and benefits from the redesign and
retooling of high volume parts.
Selling, general and administrative expenses expressed as a percentage
of sales decreased slightly to 26.6% for the second quarter of 1998 compared
with 27.0% for the like period in 1997 due primarily to economies of scale
associated with the sales increase.
As a result of the above factors, operating income increased to 23.6% of
sales as compared to 20.5% for the like period in 1997.
In addition, other income increased to $1,141,000 for the quarter
compared to $906,000 for the like period in 1997 due primarily to a $175,000
gain on the sale of a building that previously was the Company's principal
corporate office and assembly facility.
Six Months Ended May 31, 1998 Compared With Six Months
Ended May 31, 1997
During the six month period ended May 31, 1998, net sales increased
12.9% to $75,232,000 compared to $66,636,000 for the like period in 1997.
Sales increases were due primarily to increases in demand from improved
economic conditions.
Cost of sales as a percentage of net sales decreased to 50.5% compared
to 52.9% for the like period in 1997. This decrease is due primarily to
increased productivity, stable raw material costs and benefits resulting from
the redesign and retooling of high volume parts.
Selling, general and administrative expenses as a percentage of sales
decreased to 28.4% as compared to 28.8% in 1997 due to economies of scale
associated with the increase in sales.
(Continued on Next Page)
<PAGE 10>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION (continued)
LIQUIDITY AND CAPITAL RESOURCES:
During the six month period ended May 31, 1998, the Company generated
positive net cash flow from operating activities of $7,351,000. This was
comprised principally of net income, depreciation and amortization, a decrease
in prepaid expenses and an increase in accounts payable, (collectively
aggregating $14,611,000), net of increases in accounts receivable of
$4,070,000 and inventory of $3,007,000. The Company used the net cash
provided from operating activities to finance capital expenditures of
$2,536,000, pay dividends of $3,341,000 and to increase its investment
portfolio by $10,593,000.
The Company generated additional positive cash flow of $4,601,000 from
the sale of the building that formerly served as the Company's principal
corporate office and assembly facility. This building was previously
classified in miscellaneous other assets.
On, June 1, 1998, the Company announced the declaration of a cash
dividend of 9 cents per share payable July 15, 1998, to shareholders of record
June 15, 1998. The Board of Directors intends to maintain 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 by internally
generated funds.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
<PAGE 11>
PART II - OTHER INFORMATION
===========================
Item 1. Legal Proceedings - None
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 1998 Annual Meeting of Stockholders of Juno Lighting, Inc. was
held on April 28, 1998.
At the meeting, Robert S. Fremont and Julius Lewis were elected
directors to serve for a term ending at the 2001 Annual Meeting of
Stockholders. The results of the votes were as follows:
ABSTEN- BROKERS
NAME VOTES FOR WITHHELD TIONS NON-VOTES
---------- -------- ------- ---------
Robert S. Fremont 16,455,762 1,590 435,189 0
Julius Lewis 16,451,352 6,000 435,189 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, Vice President Finance
(Principal Financial Officer)
Dated: July 15, 1998
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<COMMON> 186
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