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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended April 1, 1995
Commission File Number 0-16960
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THE GENLYTE GROUP INCORPORATED
100 Lighting Way
Secaucus, N. J. 07096
(201) 864-3000
Incorporated in Delaware I.R.S. Employer
Identification No. 22-2584333
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 _
The number of shares outstanding of the issuer's common stock as of May 2, 1995
was 12,833,674.
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<PAGE>
THE GENLYTE GROUP INCORPORATED
FORM 10-Q
FOR THE QUARTER ENDED APRIL 1, 1995
INDEX
PART I. FINANCIAL INFORMATION
Consolidated Statements of Income for the three
months ended April 1, 1995 and April 2, 1994 ......... 1
Consolidated Balance Sheets as of April 1, 1995
and December 31, 1994 ................................ 2
Consolidated Statements of Cash Flows for the three
months ended April 1, 1995 and April 2, 1994.......... 3
Notes to Consolidated Interim Financial Statements .... 4
Management's Discussion and Analysis of
Financial Condition and Results of Operations......... 5
PART II. OTHER INFORMATION .................................... 7
Calculation of Primary and Fully Diluted
Earnings Per Share for the three months
ended April 1, 1995 and April 2, 1994................ 9
Signature............................................. 10
<PAGE>
PART 1 FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED APRIL 1, 1995 AND
APRIL 2, 1994
(000'S OMITTED, EXCEPT PER SHARE DATA)
(Unaudited)
1995 1994
-------- --------
Net Sales ........................................ $110,238 $100,271
Cost of Sales .................................... 77,419 69,401
Gross Profit ..................................... 32,819 30,870
Selling and Administrative Expenses ............ 26,729 25,741
Operating Profit ................................. 6,090 5,129
Corporate Expenses ............................. 1,160 1,210
Interest Expense, net .......................... 2,087 1,630
Income Before Income Taxes ....................... 2,843 2,289
Provision for Income Taxes ..................... 1,221 1,025
Net Income ....................................... $ 1,622 $ 1,264
Earnings per Share ............................... $ .13 $ .10
The accompanying notes are an integral part of these consolidated financial
statements.
1
<PAGE>
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF APRIL 1, 1995 AND DECEMBER 31, 1994
(000'S OMITTED)
<TABLE>
<CAPTION>
(unaudited)
4/1/95 12/31/94
--------- ---------
<S> <C> <C>
ASSETS:
Current Assets:
Cash and cash equivalents ................................................................ $ 1,460 $ 3,240
Accounts receivable, less allowances for
doubtful accounts of $3,976 and $3,551, respectively ................................... 66,341 65,486
Inventories:
Raw materials and supplies ............................................................. 28,389 29,051
Work in progress ....................................................................... 9,529 9,683
Finished goods ......................................................................... 48,232 45,604
Total Inventories ...................................................................... 86,150 84,338
Other current assets ..................................................................... 7,650 7,904
Total current assets ................................................................... 161,601 160,968
Property, plant and equipment, at cost ..................................................... 223,370 220,853
Less: accumulated depreciation and amortization on plant and equipment ................... 155,603 151,958
Net property, plant and equipment ........................................................ 67,767 68,895
Cost in excess of net assets of purchased businesses, net .................................. 12,142 12,183
Other assets ............................................................................... 1,636 1,768
TOTAL ASSETS ............................................................................... $ 243,146 $ 243,814
LIABILITIES & STOCKHOLDERS' INVESTMENT:
Current Liabilities:
Short term borrowings .................................................................... $ 475 $ 1,050
Current maturities of long-term debt ..................................................... 47 45
Accounts payable ......................................................................... 35,356 39,927
Accrued expenses ......................................................................... 26,217 29,596
Total current liabilities .............................................................. 62,095 70,618
Long-term debt ............................................................................. 94,799 88,952
Deferred income taxes ...................................................................... 5,781 5,781
Other liabilities .......................................................................... 13,985 13,657
Total liabilities ...................................................................... 176,660 179,008
Stockholders' Investment:
Common stock ............................................................................. 128 128
Paid-in capital .......................................................................... 9,881 9,881
Foreign currency translation adjustment .................................................. (2,528) (2,586)
Retained earnings ........................................................................ 59,005 57,383
Total stockholders' investment ......................................................... 66,486 64,806
TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT ............................................. $ 243,146 $ 243,814
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE>
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED APRIL 1, 1995 AND APRIL 2, 1994
(000'S OMITTED) (Unaudited)
<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income ..................................................................................... $ 1,622 $ 1,264
Adjustments to reconcile net income to net cash
flows provided (used) by operating activities:
Depreciation and amortization .............................................................. 3,894 4,079
(Increase) decrease in:
Accounts receivable ...................................................................... (855) (1,624)
Inventories .............................................................................. (1,812) (2,860)
Other current assets ..................................................................... 254 (875)
Other assets ............................................................................. 132 (123)
Increase (decrease) in:
Accounts payable and accrued expenses .................................................... (7,950) (2,232)
Other liabilities ........................................................................ 328 293
Deferred income taxes .................................................................... -- (26)
All other, net ............................................................................. (66) 1
Net cash flows provided (used) by operating .................................................... (4,453) (2,103)
activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of plant and equipment ................................................................ (2,682) (2,223)
Disposal of plant and equipment ................................................................ 17 --
Net cash flows provided (used) in investing .................................................... (2,665) (2,223)
activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock ..................................................................... -- --
Options exercised .............................................................................. -- --
Increase/(decrease) in debt to outsiders ....................................................... 5,274 3,584
Net cash flows provided (used) in financing .................................................... 5,274 3,584
activities
EFFECT OF EXCHANGE RATE CHANGES .................................................................. 64 (352)
Net increase in cash and cash
equivalents .................................................................................. (1,780) (1,094)
Cash and cash equivalents at beginning of year ................................................. 3,240 3,319
Cash and cash equivalents at end of quarter .................................................... $ 1,460 $ 2,225
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION - CASH PAID DURING THE THREE
MONTH PERIOD FOR:
Interest ..................................................................................... $ 1,886 $ 1,540
Income taxes ................................................................................. $ 186 $ 1,196
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
AS OF APRIL 1, 1995
(Unaudited)
1. Accounting Policies
The consolidated financial statements included in this report were
prepared in conformity with the accounting standards set forth in
Accounting Principles Board Opinion No. 28, "Interim Financial
Reporting", as amended, and the rules and regulations of the Securities
and Exchange Commission related to interim reporting. During the
periods shown, there were no changes in accounting principles or
practices from those applied in prior periods.
2. Consolidated Statement of Stockholders' Investment ($ in 000's):
Foreign
Currency
Common Paid-in Translation Retained
Stock Capital Adjustment Earnings
------- ------- ----------- --------
Balance, December 31, 1994 ........ $ 128 $ 9,881 $(2,586) $57,383
Net Income ........................ -- -- -- 1,622
Options Exercised ................. -- -- -- --
Treasury Stock Purchased .......... -- -- -- --
Translation Adjustments ........... -- -- 58 --
Balance, April 1, 1995 ............ $ 128 $ 9,881 $(2,528) $59,005
4
<PAGE>
Management's Discussion and Analysis
Comparison of First Quarter 1995 to First Quarter 1994
Net sales for the first quarter of 1995 increased $10.0 million, or 9.9 percent
from the same quarter of 1994. Net income increased 28.3 percent to $1.6 million
from $1.3 million in 1994 and earnings per share increased 30 percent from $.10
to $.13 on a comparable number of outstanding shares. All divisions experienced
sales growth from the first quarter of 1994 except the DFT Division. In
addition, the decline in the Canadian exchange rate by approximately 3 points
from the prior year's first quarter reduced Genlyte's reported sales by $.8
million despite sales growth in the Company's Canadian operations.
Selling and administrative expense for first quarter 1995 as a percent of sales
improved 1.4 percent from the first quarter of 1994. Headcount and other cost
reductions implemented during 1994, coupled with the absence of DFT transition
expenses, account for the improvement.
Operating profit increased in the first quarter of 1995 to $6.1 million, an 18.7
percent improvement from the first quarter of 1994. Lightolier U.S.'s increase
in operating profit resulted from increased sales volume, ongoing facility
rationalization, and cost reduction programs resulting in lower fixed costs and
operating efficiencies. DFT's operating profits decreased when compared to the
same period in 1994, primarily due to lower sales volume and additions to bad
debt and inventory reserves. Other divisions such as Stonco, Wide-Lite, Hadco,
and Canlyte each experienced volume increases, favorable operating variances,
and effective cost reductions which resulted in additional operating profit.
Interest expense increased $.5 million from first quarter of 1994. The increase
was due entirely to rising interest rates, as average borrowings for the period
were lower than the corresponding period of 1994.
In the first quarter 1995 the effective tax rate decreased to 43 percent from 45
percent in the first quarter of 1994.
Financial Condition
Working capital for the first quarter of 1995 improved, as a percent of sales,
from the first quarter of 1994. Accounts receivable at 15.0 percent of sales and
accounts payable at 8.0 percent of sales were virtually unchanged, while
inventory levels decreased from 21.6 percent of sales to 19.5 percent of sales.
Debt increased by $5.3 million or 5.9 percent primarily to fund the growth in
sales.
5
<PAGE>
Liquidity and Capital Resources
In the fourth quarter 1992, the Company recorded a pre-tax charge of $6.2
million to establish a reserve for the costs associated with the Company's
decision to consolidate facilities and improve the manufacturing processes in
its remaining plants. The Company's facility rationalization plan included:
relocation of DFT's leased manufacturing and distribution operations in
Cleveland, Ohio to an existing, owned facility in Elgin, Illinois; closure of
its Prodel operations in Quebec City, Canada, and sale of the existing building;
downsizing of manufacturing and distribution facilities in Edison, New Jersey
and Compton, California; and the transfer of certain Lightolier headquarters
staff to Lightolier's expanded Fall River, Massachusetts facility. The Company
intended to complete all aspects of the facility rationalization plan during
1993 but union negotiations and construction at the Fall River facility created
significant delays in implementation. As a result, charges against the reserve
in 1993 totalled only $.7 million of which $.4 million required cash. During
1994 the Company charged an additional $4.6 million against the reserve, using
cash of $4.1 million. During 1995 the remaining $.9 million of the reserve will
be utilized. Charges against the reserve through the first quarter of 1995 are
summarized in the following table:
Category Charges
Personnel Relocation Costs .................................. $3,066
Severance Costs ............................................. 1,706
Inventory Write-down ........................................ 407
Plant and Equipment Write-downs ............................. 465
Other Costs ................................................. 39
Total ....................................................... $5,683
Location Charges
Elgin ....................................................... $2,600
Headquarters ................................................ 1,771
Prodel ...................................................... 1,312
Total ....................................................... $5,683
6
<PAGE>
Proceeds form the sale of the Prodel facility were received in September 1994.
The Company expects the facility rationalization plan to generate operating
profit improvements, primarily representing labor cost savings, in excess of
$4.4 million per year beginning in 1995. Specific results will be difficult to
measure as operating efficiencies may occur for reasons not directly associated
with the consolidation process.
The Company expects funds generated from operations to be sufficient to fulfill
anticipated requirements for capital expenditures and working capital.
PART II OTHER INFORMATION
ITEM 1. Legal Proceedings
The Genlyte Group Incorporated has been named as one of a number
of corporate and individual defendants in several actions commenced in
August 1993 in the U.S. District Court in New York. The actions are on
behalf of a purported class of alleged creditors of Keene Corporation
("Keene"), seeking from the defendants damages of an unspecified
amount, rescission of certain asset sale and stock transactions and
other relief. With respect to Genlyte, the complaint principally
maintains that certain lighting assets of Keene were sold to Genlyte
in 1984 at less than fair value, while both Keene and Genlyte were
wholly-owned subsidiaries of Bairnco Corporation. The suits also
allege that Genlyte, as well as the other corporate defendants, were
successors to and alter egos of Keene. The cases were stayed by order
of the United States Bankruptcy Court due to the December 1993 filing
by Keene of a petition for reorganization pursuant to Chapter 11 of
the Bankruptcy Code.
On May 3, 1995, the Bankruptcy Court of the Southern District of
New York approved a stipulation among Keene, its Official Committee of
Unsecured Creditors (the "Committee"), and the Court Appointed Legal
Representative for Future Claimants authorizing the Committee to
prosecute any actions alleging wrongful transfers of the nature
alleged above. The Committee was directed to file a new complaint with
the Bankruptcy Court, to be prosecuted against Genlyte and others on
terms and conditions to be determined in a hearing before the
Bankruptcy Court scheduled for June 1995. The filing of such complaint
and prosecution thereof will be instead of the pending but stayed
actions in the District Court. Genlyte continues to believe it has
meritorious defenses to any such compliant and will defend the related
action vigorously.
7
<PAGE>
ITEM 2. Changes in Securities
Not Applicable.
ITEM 3. Defaults Upon Senior Securities
Not Applicable.
ITEM 4. Submission of Matters to a Vote of Security Holders
Not Applicable.
ITEM 5. Other Information
Not Applicable.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11: Calculation of Primary and Fully
Diluted Earnings Per Share
Exhibit 27: Requirements for the Format and Input
of Financial Data Schedules
(b) Reports on Form 8-K: None
8
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, Genlyte has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
THE GENLYTE GROUP INCORPORATED
(Registrant)
Date: May 10, 1995 /s/ Neil M. Bardach
--------------------------------
Neil M. Bardach
Vice President Finance, CFO, and Treasurer
9
Exhibit 11
THE GENLYTE GROUP INCORPORATED
CALCULATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE
FOR THE THREE MONTHS ENDED APRIL 1, 1995 AND APRIL 2, 1994
(000'S OMITTED, EXCEPT PER SHARE DATA)
(Unaudited)
1995 1994
------ ------
PRIMARY EARNINGS PER SHARE:
Net Income ............................................. $ 1,622 $ 1,264
Average Common Shares Outstanding ...................... 12,732 12,732
Common Shares Issuable in Respect to Common Stock
Equivalents, with a Dilutive Effect ................... 0 0
Total Common and Common Equivalent
Shares ............................................... 12,732 12,732
Primary Earnings per Share ............................. $ .13 $ .10
FULLY DILUTED EARNINGS PER SHARE:
Net Income Applicable to Common
Stock and Common Stock Equivalents ................... 1,622 $ 1,264
Total Common and Common Equivalent
Shares ............................................... 12,732 12,732
Additional Common Shares Assuming
Full Dilution ........................................ 1 0
Total Common Shares Assuming
Full Dilution ........................................ 12,733 12,732
Fully Diluted Earnings per Share ....................... $ .13 $ .10
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000833076
<NAME> Genlyte Group Inc.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-01-1995
<PERIOD-END> Apr-01-1995
<CASH> 1,460
<SECURITIES> 0
<RECEIVABLES> 66,341
<ALLOWANCES> 3,976
<INVENTORY> 86,150
<CURRENT-ASSETS> 161,601
<PP&E> 223,370
<DEPRECIATION> 155,603
<TOTAL-ASSETS> 243,146
<CURRENT-LIABILITIES> 62,095
<BONDS> 94,799
<COMMON> 128
0
0
<OTHER-SE> 66,358
<TOTAL-LIABILITY-AND-EQUITY> 243,146
<SALES> 110,238
<TOTAL-REVENUES> 110,238
<CGS> 77,419
<TOTAL-COSTS> 104,148
<OTHER-EXPENSES> 1,160
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,087
<INCOME-PRETAX> 2,843
<INCOME-TAX> 1,221
<INCOME-CONTINUING> 1,622
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,622
<EPS-PRIMARY> .13
<EPS-DILUTED> .13
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