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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 1994
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
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
Name of Each Exchange
Title of Each Class on which Registered
------------------- ---------------------
Common Stock, par value NASDAQ National Market System
$.01 per share
Number of shares of Common Stock (par value $.01 per share) outstanding as of
March 9, 1995: 12,833,674
Aggregate market value of Common Stock (par value $.01 per share) held by
non-affiliates on March 9, 1995: $59,355,742
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
-- --
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Documents Incorporated by Reference:
Document Part of Form 10-K
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Annual Report to Stockholders for the fiscal year Parts I, II and IV
ended December 31, 1994
Proxy Statement for the Annual Meeting of Part III
Stockholders to be held April 27, 1995
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<PAGE>
PART I
ITEM 1. BUSINESS
The Genlyte Group Incorporated (the "Company" or "Genlyte") designs,
manufactures and sells lighting fixtures for a wide variety of
applications in the commercial, industrial and residential markets.
The Company operates in one industry segment (lighting fixtures and
controls) through the following divisions: Lightolier, Controls,
Wide-Lite, Hadco, DFT and Supply (Crescent, Exceline and Stonco
product line) in the United States and Canlyte in Canada. The Company
markets its products under the following brand names:
o In the U.S. - Lightolier, Forecast, Crescent, Stonco, Hadco,
Wide-Lite, Bronzelite, Diamond F, Timely and Exceline
o In Canada - Lightolier, Keene-Widelite, Stonco, Prodel, Elyte and
CFI (Canadian Fluorescent Industries)
o In Mexico - Lightolier, Forecast, Wide-Lite, Bronzelite and Hadco
Genlyte's products primarily utilize incandescent, fluorescent and
high-intensity discharge ("HID") light sources and are marketed
primarily to distributors who resell the products for use in new
residential, commercial, and industrial construction as well as in
remodeling existing structures. Because Genlyte does not principally
sell directly to the end-user of its products, the Company cannot
determine precisely the percentage of its revenues derived from the
sale of products installed in each type of building or the percentage
of its products sold for new construction versus remodeling. Genlyte's
sales, like those of the lighting fixture industry in general, are
partly dependent on the level of activity in new construction and
remodeling.
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<PAGE>
Products and Distribution
Genlyte designs, manufactures and markets the following types of
products:
Indoor Fixtures - Incandescent, fluorescent and HID lighting
fixtures and lighting controls for commercial,
industrial, institutional, medical, sports, and
residential markets and task lighting for all
markets.
Outdoor Fixtures - HID and incandescent lighting fixtures and
accessories for commercial, industrial,
institutional, sports and residential markets.
Genlyte's products are marketed by independent sales representatives
and Company direct sales personnel who sell to distributors,
electrical wholesalers, mass merchandisers, and national accounts. In
addition, the Company's products are promoted through architects,
engineers, contractors and building owners. The fixtures are
principally sold throughout the United States, Canada and Mexico.
Raw Materials Sources & Availability
Genlyte purchases large quantities of raw materials and components,
mainly steel, aluminum, ballasts, sockets, wire, plastic, lenses, and
glass from multiple sources. No significant supply problems have been
encountered in recent years. Relationships with vendors have been
satisfactory.
Patents and Trademarks
Genlyte has a number of United States and foreign mechanical patents,
design patents, and registered trademarks. Genlyte maintains such
protections by periodic renewal of trademarks and payments of
maintenance fees for issued patents. Genlyte vigorously enforces its
intellectual property rights. Genlyte does not believe that a loss of
any presently held patent or trademark is likely to have a material
adverse impact on its business.
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<PAGE>
Seasonal Effect on Business
There are no predictable significant seasonal effects on Genlyte's
results of its operations.
Working Capital
There are no unusual significant business practices at Genlyte that
affect working capital. Genlyte's terms of sale vary by division but
are generally consistent with general practices within the lighting
industry. The Company attempts to keep inventory levels at the minimum
required to satisfy customer requirements.
Backlog
Backlog was $50,378,300 as of December 31, 1994, $43,246,300 as of
December 31, 1993, and $49,495,300 as of December 31, 1992. Backlog
increased during 1994 due to an increase in project business booked
during the year. Substantially all of the backlog at December 31, 1994
is expected to be shipped in 1995.
Competition
Genlyte's products are sold in intensely competitive markets where
there are numerous producers of each type of fixture. The principal
measures of competition in indoor and outdoor fixtures for the
commercial, residential and industrial markets are price, service and
product performance.
Research and Development
Genlyte places a high priority on new product development and is
constantly monitoring new light sources for incorporation into its
products. Costs incurred for research and development activities, as
determined in accordance with generally accepted accounting
principles, were $3,006,000, $3,571,000 and $3,516,000 during 1994,
1993 and 1992, respectively.
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<PAGE>
Employees
At December 31, 1994, Genlyte employed 1,905 unionized and
non-unionized production workers and 890 engineering, administrative,
and sales personnel. Relationships with unions have been satisfactory.
International Operations
The Company has international operations in Canada and Mexico.
Information on the Company's operations by geographical area for the
last three fiscal years is set forth in the "Notes to the Consolidated
Financial Statements" section of Genlyte's 1994 Annual Report to
Stockholders, which is incorporated herein by reference.
ITEM 2. PROPERTIES
The Company has the following owned and leased property locations as
of December 31, 1994:
Own/ Mfg. Office Whse. Other
Location Lease Space Space Space Space
-------- ----- ----- ----- ----- -----
Genlyte Headquarters:
Secaucus, NJ Lease x
Lightolier - U.S.:
Camargo, Mexico Lease x x
Chesterfield, MO Lease x
Columbia, MD Lease x
Compton, CA Lease x x x
Dallas, TX Lease x x
Edison, NJ Lease x x x
Emeryville, CA Lease x
Fall River, MA Own x x
Farmers Br., TX Lease x
Fontana, CA Own x x x
Jacksonville, FL Lease x
Louisville, KY Lease x
Miami, FL Lease x
New York, NY Lease x
Norwich, CT Own x x
Pittsburgh, PA Lease x
Portland, OR Lease x
San Diego, CA Lease x
Seattle, WA Lease x x
Schiller Park, IL Lease x
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<PAGE>
Own/ Mfg. Office Whse. Other
Location Lease Space Space Space Space
-------- ----- ----- ----- ----- -----
Stone Mountain, GA Lease x x
Wilmington, MA Own x x x
Winter Park, FL Lease x
Hadco:
Cameron, WV Lease x x
Littlestown, PA Own x x x
Dallas, TX Lease x
Supply:
Stonco - Union, NJ Own x x x
Crescent - Barrington, NJ Own x x x
Wide-Lite:
San Marcos, TX Own x x x
Controls:
Garland, TX Own x x x x
DFT:
Cleveland, OH Lease x
Elgin, IL Own x x x
DFT/Sarama -
Fall River, MA Lease x
Dallas, TX Lease x
Diaman-Mexo -
Tijuana, Mexico Own x x
Canlyte:
Cambridge, Ontario (KWL) Own x x x
Montreal, Quebec
(Lachine-LOL/CHQ) Own x x x x
Montreal, Quebec
(Pointe Claire-LOL) Lease x x
Toronto (LOL) Lease x x
Vancouver (LOL) Lease x
Edmonton (LOL) Lease x
Cornwall, Ontario (CFI) Own x x
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<PAGE>
The Genlyte facility located in Garland, Texas is subject to a
$351,291 mortgage due May 1, 2001.
Genlyte believes its facilities are suitable and adequate for current
and presently projected needs and are productively utilized consistent
with economic conditions and the requirements of the customers served.
ITEM 3. 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 ("Bairnco"). The
suits also allege that Genlyte, as well as the other corporate
defendants, were successors to or alter egos of Keene.
These cases are presently 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.
In April 1994, an independent Examiner was appointed by the Bankruptcy
Court in the Keene bankruptcy proceeding to investigate the viability
of the claims asserted in the stayed cases and the applicability of
statutes of limitations to bar such claims. A preliminary report by
the Examiner addressing the issues was publicly released on September
23, 1994. Such report has been submitted to the Bankruptcy Court for
further proceedings on or after March 30, 1995.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY & RELATED
STOCKHOLDER MATTERS
a. and c. Data regarding market price of Genlyte's common stock is
included in the "Quarterly Results of Operations" section
of Genlyte's 1994 Annual Report to Stockholders, which is
incorporated herein by reference. Genlyte's common stock
is traded on the NASDAQ National Market System under the
symbol "GLYT". Information concerning dividends and
restrictions thereon and Preferred Stock Purchase Rights
are included in the "Notes to the Consolidated Financial
Statements" section of Genlyte's 1994 Annual Report to
Stockholders, which is incorporated herein by reference.
b. The approximate number of common equity security holders
is as follows:
Approximate Number of
Holders of Record as of
Title of Class Year-End 1994
-------------- -----------------------
Common Stock,
par value $.01 per share 1,970
ITEM 6. SELECTED FINANCIAL DATA
The information required for this item is included in Genlyte's 1994
Annual Report to Stockholders, which is incorporated herein by
reference.
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<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Reference is made to the "Management's Discussion and Analysis"
section of Genlyte's 1994 Annual Report to Stockholders, which is
incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Reference is made to the "Consolidated Financial Statements" and
"Quarterly Results of Operations" sections of Genlyte's 1994 Annual
Report to Stockholders, which is incorporated herein by reference.
Financial statement schedules are included in Part IV of this filing.
ITEM 9. CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS OF THE REGISTRANT
The information required with respect to the Directors of Genlyte is
included in the "Election of Directors" section of the Proxy Statement
for the 1995 Annual Meeting of the Stockholders of Genlyte which has
been filed with the Securities and Exchange Commission and is
incorporated herein by reference.
EXECUTIVE OFFICERS OF THE REGISTRANT
The information required with respect to executive officers of Genlyte
is as follows:
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<PAGE>
AVRUM I. DRAZIN - AGE 66
January 1, 1994 - Chairman of the Board, Genlyte
February 1992 - President, Genlyte
December 1985 to present - President, Canlyte
January 1965 - President, Lightolier Canada
LARRY K. POWERS - AGE 52
January 1, 1994 - President/CEO, Genlyte
July 1993 - President, U.S. Operations; Executive Vice President, Genlyte
May 1989 - President, HID/Outdoor Division
April 1986 - President, Craftlite/Wide-Lite Divisions
July 1983 - President, Craftlite
ZIA EFTEKHAR - AGE 49
June 1992 - President, Lightolier Division
December 1991 - Executive V.P., Sales, Marketing and Service, Genlyte
September 1988 - President, Lightolier, Inc.
October 1987 - Sr. V.P. Marketing & Design, Lightolier
October 1985 - President, Lightolier West
January 1983 - President, Lightolier Commercial Division
DONNA RATLIFF - AGE 40
January 1994 - V.P. Administration and Secretary, Genlyte
January 1993 - V.P. Administration, Genlyte
November 1992 - Assistant Secretary, Genlyte
July 1992 - Assistant V.P. Administration, Genlyte
January 1988 - Director Human Resources, Genlyte
June 1986 - V.P. Administration, LyteBrands
NEIL M. BARDACH - AGE 46
July 1994 - V.P. - CFO & Treasurer, Genlyte
- 9 -
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
The information with respect to executive compensation is included in
the "Compensation of Directors and Executive Compensation" section of
the Proxy Statement for the 1995 Annual Meeting of Stockholders of
Genlyte which has been filed with the Securities and Exchange
Commission and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required with respect to security ownership is
included in the "Voting Securities and Principal Holders Thereof"
section of the Proxy Statement for the 1995 Annual Meeting of
Stockholders of Genlyte which has been filed with the Securities and
Exchange Commission and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required with respect to relationships is included in
the "Compensation Committee" and "Voting Securities and Principal
Holder's" section of the Proxy Statement for the 1995 Annual Meeting
of Stockholders of Genlyte which has been filed with the Securities
and Exchange Commission and is incorporated herein by reference.
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<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
a) 1) FINANCIAL STATEMENTS
The following information is incorporated herein by reference to
Genlyte's 1994 Annual Report to Stockholders:
Report of Independent Public Accountants
Consolidated Statements of Income for the years ended December
31, 1994, 1993 and 1992
Consolidated Balance Sheets as of December 31, 1994 and 1993
Consolidated Statements of Cash Flows for the years ended
December 31, 1994, 1993 and 1992
Consolidated Statements of Stockholders' Investment for the years
ended December 31, 1994, 1993 and 1992
Notes to Consolidated Financial Statements
2) Financial Statement Schedule
Report of Independent Public Accountants on Financial Statement
Schedule:
Schedule II - Valuation and Qualifying Accounts
Other schedules are omitted because of the absence of conditions
under which they are required or because the required information
is included in the consolidated financial statements or notes
thereto.
b) There were no filings on Form 8-K during the fourth quarter of 1994.
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<PAGE>
c) Exhibits
Incorporated by
Description Reference to
----------- ---------------
- Amended and Restated Certificate of Exhibit 3(b) to Genlyte's
Incorporation of the Registrant, Registration Statement on
dated August 2, 1988 Form 8 as filed with the
Securities and Exchange
Commission on August 3, 1988
- Amended and Restated Certificate of Exhibit 3(a) to Genlyte's
Incorporation of the Registrant, Form 10-K filed with the
dated May 9, 1990 Securities and Exchange
Commission in March 1993
- Amended and Restated By-Laws of the Exhibit 3(c) to Genlyte's
Registrant, as adopted on May 16, 1988 Registration Statement on
Form 8 as filed with the
Securities and Exchange
Commission on August 3, 1988
- Form of Stock Certificate for Genlyte Exhibit 4(a) to Genlyte's
Common Stock Registration Statement on
Form 8 as filed with the
Securities and Exchange
Commission on August 3, 1988
- Revolving Credit and Term Loan Agreement Exhibit to Genlyte's 10-Q
between the Registrant and the banks filed with the Securities
named therein, dated as of July 17, 1991 and Exchange Commission in
August 1992
- Stock Purchase Agreement between the Exhibit 10(a) to Genlyte's
Registrant and purchasers of Class B Stock Registration Statement on
of the Registrant, dated as of Form 8 as filed with the
June 17, 1988 Securities and Exchange
Commission on August 3, 1988
- Lease between BZ Acquisition Corp. and Exhibit 10(b) to Genlyte's
Hartz Mountain Development Corp., Registration Statement on
dated December 17, 1984 Form 8 as filed with the
Securities and Exchange
Commission on August 3, 1988
- Assignment of Lease between American Can Exhibit 10(a) to Genlyte's
Company and Lightolier, dated March 23, Form 10-K filed with the
1983 Securities and Exchange
Commission on August 3, 1988
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<PAGE>
Incorporated by
Description Reference to
----------- ---------------
- Lease between Arthur Schwartz and Exhibit 10(d) to Genlyte's
Sarama Lighting, dated December 30, 1976 Form 10-K filed with the
Securities and Exchange
Commission in March 1989
- Lease between The Frankelite Company and Exhibit 10(f) to Genlyte's
DFT Acquisition, Inc., dated July 30, 1985 Form 10-K filed with the
Securities and Exchange
Commission in March 1989
- Loan Agreement between The Genlyte Group Exhibit 10(b) to Genlyte's
Incorporated and the New Jersey Economic Form 10-K filed with the
Development Authority dated April 1, 1990, Securities and Exchange
replacing the First Mortgage and Security Commission in March 1991
Agreement between the New Jersey Economic
Development Authority and KCS Lighting,Inc.,
dated December 20, 1984 (assigned to and
assumed by the Registrant effective
December 31, 1986)
- Loan Agreement between The Genlyte Group Exhibit 10(c) to Genlyte's
Incorporated and the New Jersey Economic Form 10-K filed with the
Development Authority dated June 1, 1990, Securities and Exchange
replacing the Loan Agreement between KCS Commission in March 1991
Lighting, Inc. and the New Jersey Economic
Development Authority, dated December 20,
1984 (assigned to and assumed by the
Registrant effective December 31, 1986)
- Management Incentive Compensation Plan Exhibit 10(i) to Genlyte's
Registration Statement on
Form 8 as filed with the
Securities and Exchange
Commission on August 3, 1988
- Genlyte 1988 Stock Option Plan Exhibit 10(j) to Genlyte's
Registration Statement on
Form 8 as filed with the
Securities and Exchange
Commission on August 3, 1988
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<PAGE>
Incorporated by
Description Reference to
----------- ---------------
- Tax Sharing Agreement between Genlyte and Exhibit 10(k) to Genlyte's
Bairnco Corporation, dated July 15, 1988 Registration Statement on
Form 8 as filed with the
Securities and Exchange
Commission on August 3, 1988
- Merger and Assumption Agreement, dated Exhibit 10(d) to Genlyte's
as of December 28, 1990, by and between Form 10-K filed with the
Genlyte and Lightolier Securities and Exchange
Commission in March 1991
- Form of Employment Protection Agreement Exhibit to Genlyte's Form
entered into between Genlyte and certain 10-Q filed with the
key executives Securities and Exchange
Commission in August 1990
- Rate Swap Transaction dated as of Exhibit 10(b) to Genlyte's
December 4, 1991 between The Genlyte Form 10-K filed with the
Group and the Toronto-Dominion Bank Securities and Exchange
Commission in March 1992
- Interest Rate Protection Agreement dated Exhibit 10(c) to Genlyte's
as of December 20, 1991 between The Form 10-K filed with the
Genlyte Group and Manufacturers Hanover Securities and Exchange
Trust Co. Commission in March 1992
- Waiver No. 1 to the Revolving Credit and Exhibit 10(a) to Genlyte's
Term Loan Agreement, dated January 20, Form 10-K filed with the
1993, by and between The Genlyte Group Securities and Exchange
and the applicable banks named therein Commission in March 1993
- Industrial Lease between LAPCO Industrial Exhibit 10(b) to Genlyte's
Parks and The Genlyte Group dated Form 10-K filed with the
July 1, 1992 Securities and Exchange
Commission in March 1993
- Amendment No. 1 to the Revolving Credit Exhibit 4(a) to Genlyte's
and Term Loan Agreement between The 10-Q filed with the
Genlyte Group and the banks named Securities and Exchange
therein, dated as of May 20, 1994 Commission in July 1994
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<PAGE>
Incorporated by
Description Reference to
----------- ---------------
- Waiver No. 2 to the Revolving Credit and Exhibit 4(b) to Genlyte's
Term Loan Agreement dated June 30, 10-Q filed with the
1994, by and between The Genlyte Group Securities and Exchange
and the applicable banks named therein Commission in July 1994
- Loan Agreement between The Genlyte Exhibit 4(d) to Genlyte's
Group Incorporated and Jobs For Fall 10-Q filed with the
River, Inc., dated as of July 1, 1994 Securities and Exchange
Commission in July 1994
Other Exhibits included herein:
4(c) - Loan Agreement I between The Genlyte Group Incorporated and
Jobs For Fall River, Inc., dated as of July 13, 1994
4(c) - Loan Agreement II between The Genlyte Group Incorporated and
Jobs For Fall River, Inc., dated as of July 13, 1994
4(c) - Loan Agreement III between The Genlyte Group Incorporated and
Jobs For Fall River, Inc., dated as of July 13, 1994
(11) - Calculation of Primary and Fully Diluted Earnings per Share
(13) - Annual Report to Stockholders
(21) - Subsidiaries of the Registrant
(23) - Consent of Independent Public Accountants
(27) - Financial Data Schedule
(d) Financial statements (and summarized financial information) of fifty
percent or less owned entities accounted for by the equity method have
been omitted because they do not, considered individually or in the
aggregate, constitute significant subsidiaries.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Genlyte has
duly caused this Annual Report to be signed on its behalf by the undersigned
thereunto duly authorized.
THE GENLYTE GROUP INCORPORATED
------------------------------
Registrant
Date: March 23, 1995 By: Neil M. Bardach /s/
--------------------- --------------------
Neil M. Bardach
V.P. Finance - CFO
& Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
is signed below by the following persons on behalf of Genlyte and in the
capacities and on the date indicated.
Avrum I. Drazin/s/ March 23, 1995
----------------------------------------------- -------------------
Avrum I. Drazin - Chairman of the Board
Larry Powers/s/ March 23, 1995
----------------------------------------------- -------------------
Larry Powers - President and Chief Executive Officer
(Principal Executive Officer)
Glenn W. Bailey/s/ March 23, 1995
----------------------------------------------- -------------------
Glenn W. Bailey - Director
Robert B. Cadwallader/s/ March 23, 1995
----------------------------------------------- -------------------
Robert B. Cadwallader - Director
David Engelman/s/ March 23, 1995
----------------------------------------------- -------------------
David Engelman - Director
Fred Heller/s/ March 23, 1995
----------------------------------------------- -------------------
Fred Heller - Director
Frank Metzger/s/ March 23, 1995
----------------------------------------------- -------------------
Frank Metzger - Director
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<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
TO THE GENLYTE GROUP INCORPORATED:
We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements included in The Genlyte Group Incorporated
Annual Report to Stockholders incorporated by reference in this Form 10-K,
and have issued our report thereon dated January 26, 1995. Our audits were
made for the purpose of forming an opinion on those statements taken as a
whole. The schedule listed in Item 14a(2) is the responsibility of the
Company's management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
consolidated financial statements. This schedule has been subjected to the
auditing procedures applied in the audits of the basic consolidated financial
statements and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.
ARTHUR ANDERSEN LLP
New York, New York
January 26, 1995
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<PAGE>
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
Schedule II - Valuation and Qualifying Accounts
($ in thousands)
<TABLE>
<CAPTION>
Additions
Balance at Charged to (a) Balance
Beginning Costs and Other at End
of Year Expenses Deductions Changes of Year
---------- ---------- ---------- ------- --------
<S> <C> <C> <C> <C> <C>
YEAR-ENDED DECEMBER 31, 1994
------------------------------------------
Allowance for Doubtful Accounts $ 3,765 $ 1,334 $ (1,548) $ 0 $ 3,551
YEAR-ENDED DECEMBER 31, 1993
------------------------------------------
Allowance for Doubtful Accounts $ 5,250 $ 407 $ (1,892) $ 0 $ 3,765
YEAR-ENDED DECEMBER 31, 1992
------------------------------------------
Allowance for Doubtful Accounts $ 4,261 $ 1,583 $ (1,008) $ 414 $ 5,250
(a) Other changes consist primarily of the acquisition of Forecast Lighting and reclassifications.
</TABLE>
-18-
LOAN AGREEMENT I
AGREEMENT made this 13th day of July, 1994, between The Genlyte Group
Incorporated, d/b/a LIGHTOLIER, a Delaware corporation with a usual place of
business at 63 Airport Road, Fall River, Massachusetts ("Borrower"), and JOBS
FOR FALL RIVER, INC. a Massachusetts non-profit corporation with its principal
place of business at One Government Center, Fall River, Massachusetts
("Lender").
IN CONSIDERATION of the representations, warranties, covenants and agreements
set forth in this Agreement, Lender is making a loan to Borrower in the amount
of Fifty Thousand ($50,000.00) Dollars ("the loan"). In connection with the
Loan, Borrower is executing a promissory note ("Note"), and certain other
documents. This Agreement, together with the Note, and the other documents
executed in connection with this Loan are collectively called the "Documents".
SECTION 1. LOAN.
1.1 Note
Lender is loaning to Borrower $50,000.00 which Borrower shall repay in
accordance with the Borrower's promissory note in the amount of $50,000.00 the
form of which is attached hereto and marked Exhibit "A".
SECTION 2. REPRESENTATIONS AND WARRANTIES.
Borrower hereby represents and warrants as follows:
1
<PAGE>
2.1 Organization
Borrower is duly organized, validly existing in good standing and
qualified to do business under the laws of the Commonwealth of Massachusetts
with full power and authority to own its properties and to conduct its business
in the Commonwealth of Massachusetts and such other jurisdictions in which such
business has been and is now being conducted.
2.2 Authority
The Borrower has taken all action which may be required by its
charter, by-laws and applicable law to authorize the execution, delivery and
performance of this Agreement and the Documents.
2.3 No Conflict
The execution, delivery and performance by Borrower of this Agreement
and the Documents will not violate any provisions of the Borrower's charter or
by-laws, and will not conflict with or result in any breach of any provision of,
or constitute a default under, or result in the imposition of any lien or charge
upon any asset of Borrower under, or result in the acceleration of any
obligation under the terms of any agreement or document binding upon Borrower.
2.4 Payment of Taxes
Borrower has filed all federal and state tax returns required to be
filed, and all taxes shown to be owing on such returns have been paid. Borrower
has no knowledge of any deficiency which may become due in connection with such
taxes. All other material taxes which are due from Borrower have been paid.
2
<PAGE>
SECTION 3. COVENANTS
Until the Note is paid in full, Borrower hereby agrees as follows:
3.1 Payments of Liabilities
Borrower shall pay all liabilities as they become due unless they are
contested in good faith, in which case adequate reserves therefore will be
maintained.
3.2 Conduct of Business
Borrower shall keep in full force and effect its existence and all
material rights, licenses, patents, leases and franchises reasonably necessary
for the conduct of its business and shall comply with all applicable laws and
regulations the violation of which would be materially adverse to Borrower.
Borrower shall promptly give Lender notice of any unusual problems or
developments affecting its business operations which may adversely affect its
ability to repay the Loan.
3.3 Maintenance of Property
Borrower shall keep all of its property, both real and personal, that
is material to its business in good order and condition and shall make all
necessary repairs, replacements, additions and improvements thereto so that its
business may be properly and advantageously conducted.
3.4 Maintenance of Insurance
Borrower shall keep all of its property, both real and personal, that
3
<PAGE>
is material to its business insured with financially responsible insurers, or
adequately self-insured, in amounts sufficient to repair or replace such
property in the event of casualty and, on demand from Lender shall furnish
Lender with evidence of such policies.
3.5 Financial Records
Borrower shall at all times keep proper books of records and account,
in which correct and complete entries shall be made of all its dealings, in
accordance with sound accounting practices.
3.6 Employment by Borrower
Borrower covenants and agrees that the following full-time workers and
part-time workers with compensation to be paid will be added to payroll as a
result of this loan, which full-time and part-time workers will be residents of
the City of Fall River:
Compensation to Employees Presently
Full Time Part Time be Paid on Payroll
--------- --------- --------------- -------------------
10 Minimum Wage
Borrower further agrees to report to Lender on a quarterly basis,
during each calendar year, its employment status regarding the additional
employees and existing employees resulting from application of these loan
proceeds. This Loan Agreement is subject to all the conditions and requirements
of the Community Development Agency, which conditions and requirements are
attached hereto and made a condition hereof. The purpose of the revolving loan
fund is to support business activities for which credit is not otherwise
available on terms and conditions which would permit the completion and/or the
4
<PAGE>
successful operation or accomplishment of the project in Fall River,
Massachusetts. The Lender reserves the right to recall the loan if these
requirements are not met.
SECTION 4. DEFAULT
4.1 Note Default
Until the Note is paid in full, if any one or more of the following
events of default (hereafter each called an "Event of Default") shall occur:
(a) Borrower fails to pay the principal or interest on the Note within
thirty (30) days after it is due;
(b) Borrower fails to observe or perform any covenant, warranty or
agreement to be performed by Borrower under this Agreement, and the same
shall not have been remedied within thirty (30) days after written notice
thereof from the Lender to the Borrower;
(c)(i) the filing by Borrower of a petition under any chapter of the
Federal Bankruptcy Code or the institution by Borrower of any other
proceeding under any law relating to bankruptcy, bankruptcy reorganization,
insolvency or relief of debtors; or
(ii) the filing against Borrower of any involuntary petition under any
chapter of the Federal Bankruptcy Code or the institution of any other
proceeding under the law relating to bankruptcy, bankruptcy reorganization,
insolvency or relief of debtors where such proceeding or petition is not
dismissed or stayed within sixty (60) days from the date on which it is
filed or instituted; or
5
<PAGE>
(d) Borrower ceases business operations in its Fall River facility;
then, in each such event, Lender may declare Borrower in default of the
Note and exercise the Rights on Default as hereinafter provided.
4.2 Rights on Default
In the event of the occurrence of an Event of Default under this
Agreement, Lender may:
(a) by written notice to Borrower declare the Note to be immediately
due and payable without presentment, demand, protest or notice of any kind,
all of which are hereby expressly waived; and
(b) exercise any and all rights which it may have under the Loan
Documents. No course of dealing or delay in accelerating the maturity of
the Note or in taking or failing to take any other action with respect to
any event of default shall affect Lender's right to take such action at a
later time. No waiver as to any one default shall affect Lender's rights
upon any other default.
4.3 Expenses
Any payment made or expense incurred by Lender (including, without
limitation, reasonable attorneys' fees and disbursements) in connection with the
preparation of the Documents or the legal exercise of any right under the
Documents shall be payable on demand by Borrower.
6
<PAGE>
SECTION 5. MISCELLANEOUS PROVISIONS
5.1 Borrower shall from time to time execute such further writings,
instruments and documents and do such further acts as Lender may reasonably
require to effect the purposes of this Agreement.
5.2 Notices
Any notice under this Agreement shall be in writing and shall be deemed
delivered if mailed, postage prepaid, to a party at the principal place of
business specified in this Agreement or such other address as may be specified
by notice given after the date hereof.
5.3 Governing Law
This Agreement and all Documents shall be governed and construed under
the laws of the Commonwealth of Massachusetts.
5.4 Successors and Assigns
This Agreement and all Documents shall bind and inure to the benefit of
the heirs, executors, administrators, legal representatives, successors and
assigns of each party.
5.5 Interpretation
Reference to the singular or the plural shall be deemed to include the
other where the context requires.
5.6 Prepayment
The loan may be prepaid in whole or in part at any time and from time
to time without premium or penalty.
7
<PAGE>
5.7 Sealed Instrument
This Agreement shall have the effect of an instrument under seal.
IN WITNESS WHEREOF, this Agreement has been executed by its duly authorized
representatives on the date first hereinabove written.
THE GENLYTE GROUP INCORPORATED,
D/B/A LIGHTOLIER
By: /s/ Larry K. Powers
---------------------------------------
Larry K. Powers, President
JOBS FOR FALL RIVER, INC.
By: /s/ Michael F. Neves
---------------------------------------
Name: Michael F. Neves
-------------------------------------
Title: President
------------------------------------
8
LOAN AGREEMENT II
AGREEMENT made this 13th day of July, 1994, between The Genlyte Group
Incorporated, d/b/a LIGHTOLIER, a Delaware corporation with a usual place of
business at 63 Airport Road, Fall River, Massachusetts ("Borrower"), and JOBS
FOR FALL RIVER, INC. a Massachusetts non-profit corporation with its principal
place of business at One Government Center, Fall River, Massachusetts
("Lender").
IN CONSIDERATION of the representations, warranties, covenants and agreements
set forth in this Agreement, Lender is making a loan to Borrower in the amount
of Fifty Thousand ($50,000.00) Dollars ("the loan"). In connection with the
Loan, Borrower is executing a promissory note ("Note"), and certain other
documents. This Agreement, together with the Note, and the other documents
executed in connection with this Loan are collectively called the "Documents".
SECTION 1. LOAN.
1.1 Note
Lender is loaning to Borrower $50,000.00 which Borrower shall repay in
accordance with the Borrower's promissory note in the amount of $50,000.00 the
form of which is attached hereto and marked Exhibit "A".
SECTION 2. REPRESENTATIONS AND WARRANTIES.
Borrower hereby represents and warrants as follows:
1
<PAGE>
2.1 Organization
Borrower is duly organized, validly existing in good standing and
qualified to do business under the laws of the Commonwealth of Massachusetts
with full power and authority to own its properties and to conduct its business
in the Commonwealth of Massachusetts and such other jurisdictions in which such
business has been and is now being conducted.
2.2 Authority
The Borrower has taken all action which may be required by its charter,
by-laws and applicable law to authorize the execution, delivery and performance
of this Agreement and the Documents.
2.3 No Conflict
The execution, delivery and performance by Borrower of this Agreement
and the Documents will not violate any provisions of the Borrower's charter or
by-laws, and will not conflict with or result in any breach of any provision of,
or constitute a default under, or result in the imposition of any lien or charge
upon any asset of Borrower under, or result in the acceleration of any
obligation under the terms of any agreement or document binding upon Borrower.
2.4 Payment of Taxes
Borrower has filed all federal and state tax returns required to be
filed, and all taxes shown to be owing on such returns have been paid. Borrower
has no knowledge of any deficiency which may become due in connection with such
taxes. All other material taxes which are due from Borrower have been paid.
2
<PAGE>
SECTION 3. COVENANTS
Until the Note is paid in full, Borrower hereby agrees as follows:
3.1 Payments of Liabilities
Borrower shall pay all liabilities as they become due unless they are
contested in good faith, in which case adequate reserves therefore will be
maintained.
3.2 Conduct of Business
Borrower shall keep in full force and effect its existence and all
material rights, licenses, patents, leases and franchises reasonably necessary
for the conduct of its business and shall comply with all applicable laws and
regulations the violation of which would be materially adverse to Borrower.
Borrower shall promptly give Lender notice of any unusual problems or
developments affecting its business operations which may adversely affect its
ability to repay the Loan.
3.3 Maintenance of Property
Borrower shall keep all of its property, both real and personal, that
is material to its business in good order and condition and shall make all
necessary repairs, replacements, additions and improvements thereto so that its
business may be properly and advantageously conducted.
3.4 Maintenance of Insurance
Borrower shall keep all of its property, both real and personal, that
3
<PAGE>
is material to its business insured with financially responsible insurers, or
adequately self-insured, in amounts sufficient to repair or replace such
property in the event of casualty and, on demand from Lender shall furnish
Lender with evidence of such policies.
3.5 Financial Records
Borrower shall at all times keep proper books of records and account,
in which correct and complete entries shall be made of all its dealings, in
accordance with sound accounting practices.
3.6 Employment by Borrower
Borrower covenants and agrees that the following full-time workers and
part-time workers with compensation to be paid will be added to payroll as a
result of this loan, which full-time and part-time workers will be residents of
the City of Fall River:
Compensation to Employees Presently
Full Time Part Time be Paid on Payroll
--------- --------- --------------- -------------------
10 Minimum Wage
Borrower further agrees to report to Lender on a quarterly basis,
during each calendar year, its employment status regarding the additional
employees and existing employees resulting from application of these loan
proceeds. This Loan Agreement is subject to all the conditions and requirements
of the Community Development Agency, which conditions and requirements are
attached hereto and made a condition hereof. The purpose of the revolving loan
fund is to support business activities for which credit is not otherwise
available on terms and conditions which would permit the completion and/or the
4
<PAGE>
successful operation or accomplishment of the project in Fall River,
Massachusetts. The Lender reserves the right to recall the loan if these
requirements are not met.
SECTION 4. DEFAULT
4.1 Note Default
Until the Note is paid in full, if any one or more of the following
events of default (hereafter each called an "Event of Default") shall occur:
(a) Borrower fails to pay the principal or interest on the Note within
thirty (30) days after it is due;
(b) Borrower fails to observe or perform any covenant, warranty or
agreement to be performed by Borrower under this Agreement, and the same
shall not have been remedied within thirty (30) days after written notice
thereof from the Lender to the Borrower;
(c)(i) the filing by Borrower of a petition under any chapter of the
Federal Bankruptcy Code or the institution by Borrower of any other
proceeding under any law relating to bankruptcy, bankruptcy reorganization,
insolvency or relief of debtors; or
(ii) the filing against Borrower of any involuntary petition under any
chapter of the Federal Bankruptcy Code or the institution of any other
proceeding under the law relating to bankruptcy, bankruptcy reorganization,
insolvency or relief of debtors where such proceeding or petition is not
dismissed or stayed within sixty (60) days from the date on which it is
filed or instituted; or
5
<PAGE>
(d) Borrower ceases business operations in its Fall River facility;
then, in each such event, Lender may declare Borrower in default of the
Note and exercise the Rights on Default as hereinafter provided.
4.2 Rights on Default
In the event of the occurrence of an Event of Default under this
Agreement, Lender may:
(a) by written notice to Borrower declare the Note to be immediately
due and payable without presentment, demand, protest or notice of any kind,
all of which are hereby expressly waived; and
(b) exercise any and all rights which it may have under the Loan
Documents. No course of dealing or delay in accelerating the maturity of
the Note or in taking or failing to take any other action with respect to
any event of default shall affect Lender's right to take such action at a
later time. No waiver as to any one default shall affect Lender's rights
upon any other default.
4.3 Expenses
Any payment made or expense incurred by Lender (including, without
limitation, reasonable attorneys' fees and disbursements) in connection with the
preparation of the Documents or the legal exercise of any right under the
Documents shall be payable on demand by Borrower.
6
<PAGE>
SECTION 5. MISCELLANEOUS PROVISIONS
5.1 Borrower shall from time to time execute such further writings,
instruments and documents and do such further acts as Lender may reasonably
require to effect the purposes of this Agreement.
5.2 Notices
Any notice under this Agreement shall be in writing and shall be deemed
delivered if mailed, postage prepaid, to a party at the principal place of
business specified in this Agreement or such other address as may be specified
by notice given after the date hereof.
5.3 Governing Law
This Agreement and all Documents shall be governed and construed under
the laws of the Commonwealth of Massachusetts.
5.4 Successors and Assigns
This Agreement and all Documents shall bind and inure to the benefit of
the heirs, executors, administrators, legal representatives, successors and
assigns of each party.
5.5 Interpretation
Reference to the singular or the plural shall be deemed to include the
other where the context requires.
5.6 Prepayment
The loan may be prepaid in whole or in part at any time and from time
to time without premium or penalty.
7
<PAGE>
5.7 Sealed Instrument
This Agreement shall have the effect of an instrument under seal.
IN WITNESS WHEREOF, this Agreement has been executed by its duly authorized
representatives on the date first hereinabove written.
THE GENLYTE GROUP INCORPORATED,
D/B/A LIGHTOLIER
By: /s/ Larry K. Powers
---------------------------------------
Larry K. Powers, President
JOBS FOR FALL RIVER, INC.
By: /s/ Michael F. Neves
---------------------------------------
Name: Michael F. Neves
-------------------------------------
Title: President
------------------------------------
8
LOAN AGREEMENT III
AGREEMENT made this 13th day of July, 1994, between The Genlyte Group
Incorporated, d/b/a LIGHTOLIER, a Delaware corporation with a usual place of
business at 63 Airport Road, Fall River, Massachusetts ("Borrower"), and JOBS
FOR FALL RIVER, INC. a Massachusetts non-profit corporation with its principal
place of business at One Government Center, Fall River, Massachusetts
("Lender").
IN CONSIDERATION of the representations, warranties, covenants and agreements
set forth in this Agreement, Lender is making a loan to Borrower in the amount
of Fifty Thousand ($50,000.00) Dollars ("the loan"). In connection with the
Loan, Borrower is executing a promissory note ("Note"), and certain other
documents. This Agreement, together with the Note, and the other documents
executed in connection with this Loan are collectively called the "Documents".
SECTION 1. LOAN.
1.1 Note
Lender is loaning to Borrower $50,000.00 which Borrower shall repay in
accordance with the Borrower's promissory note in the amount of $50,000.00 the
form of which is attached hereto and marked Exhibit "A".
SECTION 2. REPRESENTATIONS AND WARRANTIES.
Borrower hereby represents and warrants as follows:
1
<PAGE>
2.1 Organization
Borrower is duly organized, validly existing in good standing and
qualified to do business under the laws of the Commonwealth of Massachusetts
with full power and authority to own its properties and to conduct its business
in the Commonwealth of Massachusetts and such other jurisdictions in which such
business has been and is now being conducted.
2.2 Authority
The Borrower has taken all action which may be required by its charter,
by-laws and applicable law to authorize the execution, delivery and performance
of this Agreement and the Documents.
2.3 No Conflict
The execution, delivery and performance by Borrower of this Agreement
and the Documents will not violate any provisions of the Borrower's charter or
by-laws, and will not conflict with or result in any breach of any provision of,
or constitute a default under, or result in the imposition of any lien or charge
upon any asset of Borrower under, or result in the acceleration of any
obligation under the terms of any agreement or document binding upon Borrower.
2.4 Payment of Taxes
Borrower has filed all federal and state tax returns required to be
filed, and all taxes shown to be owing on such returns have been paid. Borrower
has no knowledge of any deficiency which may become due in connection with such
taxes. All other material taxes which are due from Borrower have been paid.
2
<PAGE>
SECTION 3. COVENANTS
Until the Note is paid in full, Borrower hereby agrees as follows:
3.1 Payments of Liabilities
Borrower shall pay all liabilities as they become due unless they are
contested in good faith, in which case adequate reserves therefore will be
maintained.
3.2 Conduct of Business
Borrower shall keep in full force and effect its existence and all
material rights, licenses, patents, leases and franchises reasonably necessary
for the conduct of its business and shall comply with all applicable laws and
regulations the violation of which would be materially adverse to Borrower.
Borrower shall promptly give Lender notice of any unusual problems or
developments affecting its business operations which may adversely affect its
ability to repay the Loan.
3.3 Maintenance of Property
Borrower shall keep all of its property, both real and personal, that
is material to its business in good order and condition and shall make all
necessary repairs, replacements, additions and improvements thereto so that its
business may be properly and advantageously conducted.
3.4 Maintenance of Insurance
Borrower shall keep all of its property, both real and personal, that
3
<PAGE>
is material to its business insured with financially responsible insurers, or
adequately self-insured, in amounts sufficient to repair or replace such
property in the event of casualty and, on demand from Lender shall furnish
Lender with evidence of such policies.
3.5 Financial Records
Borrower shall at all times keep proper books of records and account,
in which correct and complete entries shall be made of all its dealings, in
accordance with sound accounting practices.
3.6 Employment by Borrower
Borrower covenants and agrees that the following full-time workers and
part-time workers with compensation to be paid will be added to payroll as a
result of this loan, which full-time and part-time workers will be residents of
the City of Fall River:
Compensation to Employees Presently
Full Time Part Time be Paid on Payroll
--------- --------- --------------- -------------------
5 Minimum Wage
Borrower further agrees to report to Lender on a quarterly basis,
during each calendar year, its employment status regarding the additional
employees and existing employees resulting from application of these loan
proceeds. This Loan Agreement is subject to all the conditions and requirements
of the Community Development Agency, which conditions and requirements are
attached hereto and made a condition hereof. The purpose of the revolving loan
fund is to support business activities for which credit is not otherwise
available on terms and conditions which would permit the completion and/or the
4
<PAGE>
successful operation or accomplishment of the project in Fall River,
Massachusetts. The Lender reserves the right to recall the loan if these
requirements are not met.
SECTION 4. DEFAULT
4.1 Note Default
Until the Note is paid in full, if any one or more of the following
events of default (hereafter each called an "Event of Default") shall occur:
(a) Borrower fails to pay the principal or interest on the Note within
thirty (30) days after it is due;
(b) Borrower fails to observe or perform any covenant, warranty or
agreement to be performed by Borrower under this Agreement, and the same
shall not have been remedied within thirty (30) days after written notice
thereof from the Lender to the Borrower;
(c)(i) the filing by Borrower of a petition under any chapter of the
Federal Bankruptcy Code or the institution by Borrower of any other
proceeding under any law relating to bankruptcy, bankruptcy reorganization,
insolvency or relief of debtors; or
(ii) the filing against Borrower of any involuntary petition under any
chapter of the Federal Bankruptcy Code or the institution of any other
proceeding under the law relating to bankruptcy, bankruptcy reorganization,
insolvency or relief of debtors where such proceeding or petition is not
dismissed or stayed within sixty (60) days from the date on which it is
filed or instituted; or
5
<PAGE>
(d) Borrower ceases business operations in its Fall River facility;
then, in each such event, Lender may declare Borrower in default of the
Note and exercise the Rights on Default as hereinafter provided.
4.2 Rights on Default
In the event of the occurrence of an Event of Default under this
Agreement, Lender may:
(a) by written notice to Borrower declare the Note to be immediately
due and payable without presentment, demand, protest or notice of any kind,
all of which are hereby expressly waived; and
(b) exercise any and all rights which it may have under the Loan
Documents. No course of dealing or delay in accelerating the maturity of
the Note or in taking or failing to take any other action with respect to
any event of default shall affect Lender's right to take such action at a
later time. No waiver as to any one default shall affect Lender's rights
upon any other default.
4.3 Expenses
Any payment made or expense incurred by Lender (including, without
limitation, reasonable attorneys' fees and disbursements) in connection with the
preparation of the Documents or the legal exercise of any right under the
Documents shall be payable on demand by Borrower.
6
<PAGE>
SECTION 5. MISCELLANEOUS PROVISIONS
5.1 Borrower shall from time to time execute such further writings,
instruments and documents and do such further acts as Lender may reasonably
require to effect the purposes of this Agreement.
5.2 Notices
Any notice under this Agreement shall be in writing and shall be deemed
delivered if mailed, postage prepaid, to a party at the principal place of
business specified in this Agreement or such other address as may be specified
by notice given after the date hereof.
5.3 Governing Law
This Agreement and all Documents shall be governed and construed under
the laws of the Commonwealth of Massachusetts.
5.4 Successors and Assigns
This Agreement and all Documents shall bind and inure to the benefit of
the heirs, executors, administrators, legal representatives, successors and
assigns of each party.
5.5 Interpretation
Reference to the singular or the plural shall be deemed to include the
other where the context requires.
5.6 Prepayment
The loan may be prepaid in whole or in part at any time and from time
to time without premium or penalty.
7
<PAGE>
5.7 Sealed Instrument
This Agreement shall have the effect of an instrument under seal.
IN WITNESS WHEREOF, this Agreement has been executed by its duly authorized
representatives on the date first hereinabove written.
LIGHTOLIER DIVISION OF
THE GENLYTE GROUP INCORPORATED
By: /s/ Donna Ratliff
---------------------------------------
Donna Ratliff, Vice President-
Administration and
Corporate Secretary
JOBS FOR FALL RIVER, INC.
By: /s/ Michael F. Neves
---------------------------------------
Name: Michael F. Neves
-------------------------------------
Title: President
------------------------------------
8
<TABLE>
<CAPTION>
THE GENLYTE GROUP INCORPORATED EXHIBIT 11
Calculation of Primary and Fully Diluted Earnings per Share
For the Years Ended December 31, 1994, December 31, 1993, and December 31, 1992
($ in Thousands - except per share data)
1994 1993 1992
------ ------ ------
<S> <C> <C> <C>
PRIMARY EARNINGS PER SHARE *
----------------------------
Net Income (Loss) before cumulative effect
of a change in accounting principle $ 5,080 $ 3,341 $ (2,192)
Cumulative effect of a change in accounting principle 0 0 (3,670)
------ ------ ------
Net Income $ 5,080 $ 3,341 $ 1,478
====== ====== ======
Average common shares outstanding 12,732 12,726 12,701
Common shares issuable in respect to common
stock equivalents, with a dilutive effect 6 69 141
------ ------ ------
Total common and equivalent shares 12,738 12,795 12,842
====== ====== ======
Primary earnings per share before cumulative effect of
a change in accounting principle $ 0.40 $ 0.26 $ (0.17)
Effect of a change in accounting principle on earnings per share 0.00 0.00 0.29
------ ------ ------
Primary Earnings Per Share $ 0.40 $ 0.26 $ 0.12
====== ====== ======
FULLY DILUTED EARNINGS PER SHARE *
----------------------------------
Net Income (Loss) before cumulative effect
of a change in accounting principle $ 5,080 $ 3,341 $ (2,192)
Cumulative effect of a change in accounting principle 0 0 (3,670)
------ ------ ------
Net Income $ 5,080 $ 3,341 $ 1,478
====== ====== ======
Total common and equivalent shares 12,738 12,795 12,842
Additional common shares issuable assuming full dilution 4 12 6
------ ------ ------
Total common and equivalent shares assuming full dilution 12,742 12,807 12,848
====== ====== ======
Fully diluted earnings per share before cumulative effect of
a change in accounting principle $ 0.40 $ 0.26 $ (0.17)
Effect of a change in accounting principle on earnings per share 0.00 0.00 0.29
------ ------ ------
Fully Diluted Earnings Per Share $ 0.40 $ 0.26 $ 0.12
====== ====== ======
* Primary earnings per share include all common stock equivalents.
Fully diluted earnings per share include all common stock equivalents plus the additional shares issuable assuming full dilution.
</TABLE>
1994 ANNUAL REPORT
GENLYTE
LIGHTING THE WAY--TOGETHER
<PAGE>
CONTENTS Financial Highlights .......................................1
Letter to Stockholders .....................................2
Genlyte at a Glance ........................................4
Genlyte Divisions ..........................................5
Selected Financial Data ...................................13
Management's Discussion and Analysis ......................14
Consolidated Financial Statements .........................16
Notes to Consolidated Financial Statements ................20
Corporate Directory ........................Inside Back Cover
CORPORATE OFFICES
100 Lighting Way
Secaucus, NJ 07096-1508
(201) 864-3000
INVESTOR RELATIONS
INFORMATION AND FORM 10-K
Please call or write the Investor
Relations Department at
Genlyte Corporate Offices
STOCK LISTING
Genlyte common stock is traded
on the NASDAQ National Market
System under the symbol GLYT
TRANSFER AGENT &
REGISTRAR
Bank of New York
101 Barclay Street
New York, NY 10286
(800) 524-4458
INDEPENDENT PUBLIC
ACCOUNTANTS
Arthur Andersen LLP
1345 Avenue of the Americas
New York, NY 10105
ANNUAL MEETING
The Annual Stockholders'
Meeting will be held at
The Genlyte Group Inc.,
100 Lighting Way,
Secaucus, NJ on
April 27, 1995
COVER PHOTO: MURRAY & MURRAY LAW OFFICES LOCATED IN SANDUSKY, OHIO
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
(Amounts in thousands except for per share data)
--------------------------------------------------------------------------------
Year 1992 1993 1994
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Results
Net Sales $425,388 429,143 432,690
Gross Margin Percentage 29.1% 29.7% 30.1%
Operating Profit $ 9,578 19,327 20,455 Up 114% in two years on modest sales growth --
a credit to our employees' productivity.
Net Income $ 1,478 3,341 5,080
Earnings Per Share $ .12 .26 .40
--------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
(Amounts in thousands except for per share data)
--------------------------------------------------------------------------------
Year 1992 1993 1994
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance Sheet Data
Current Assets $158,760 156,013 160,968
Total Assets $256,924 244,536 243,814
Current Liabilities $ 58,734 70,200 70,618
Long-term Debt,
including current portion $117,797 100,419 88,997 Nearly 25% of our debt has been eliminated
in two years.
Stockholders' Investment $ 58,536 60,842 64,806
Book Value Per Share $ 4.61 4.78 5.09 Earnings are growing faster than book value as we
improve the return on our investments.
--------------------------------------------------------------------------------
</TABLE>
Light is a creative medium--perhaps the most powerful of all, because most of
what we know of our environment comes to us through our eyes, and because the
way we see depends entirely upon how things receive and reflect light.
1
<PAGE>
LETTER FROM THE PRESIDENT
[Photo Larry Powers, President & Chief Executive Officer]
TO OUR STOCKHOLDERS
We live approximately seventy percent of our waking hours in creative lighting.
Add decorative lighting to beautify our surroundings, and security lighting to
help keep us safe and secure, and something becomes very clear: the products
created and produced by genlyte companies profoundly affect people's
lives--perhaps more than most other products we depend on. That is why all of us
at Genlyte are so very proud of the products and services we provide.
On behalf of all our employees, I am pleased to share with you Genlyte's
accomplishments for 1994, which are contained throughout the pages of this
report.
I would also like to share with you Genlyte's vision for the future. A synopsis
of this vision is found on the back cover of this report as a reminder to all of
us of our focus for 1995. In crystallizing this vision over the past year, we
defined a corporate objective that revolves around our customers, our employees,
and our stockholders. The slogan we selected to express this objective is:
LIGHTING THE WAY--TOGETHER.
CUSTOMERS: We are committed to being more and more customer-focused, continually
striving to meet or exceed our customers' expectations--to make doing business
with Genlyte easier. As part of this commitment, we are investing in
state-of-the-art systems which allow immediate information access and
processing, to provide our customers with the highest level of responsiveness in
the lighting industry. We want our customers to buy from Genlyte knowing they
will get superior lighting solutions supported by quality products, excellent
service, quick response, and timely delivery.
EMPLOYEES: In a world changing at accelerating rates, we have a strong
commitment to the development of our employees. We value and respect each
employee as an individual, realizing that we must listen to, trust, and serve
each other. Each of our employees is entitled to fair treatment, a safe and
healthy work environment, and the opportunity to grow. In return, we ask our
employees for an honest day's work for an honest day's pay and we always strive
to promote from within. We work to instill a sense of urgency in all of our
employees and in return, we work to respond immediately to their needs,
concerns, and opportunities.
STOCKHOLDERS: Our responsibility to our stockholders is to provide them with a
fair rate of return for their continued show of confidence. We are committed to
improving our earnings every year by achieving consistent growth in sales and
profitability. We have been--and will increasingly be--cost conscious with
regard to our business decisions and expenditures. We will continue to invest in
new product development and in new processes and procedures to assure us of
2
<PAGE>
LETTER FROM THE PRESIDENT, CONTINUED
being a low-cost, world-class producer. Most important, we want to focus on
those activities, products, markets, and customers that will provide us with the
greatest return.
Looking ahead, we are optimistic for the coming year. Economic conditions in the
United States and Canada are healthy and, although we are concerned about rising
interest rates, we expect 1995 to be a good year in most of the markets we
serve. Our optimism is also fueled by the plans we have in place to respond
aggressively to the improved market conditions with innovative products,
marketing programs, and strong sales efforts.
Behind the text of this annual report, you'll see pictures of our valued
teammates, the people who made possible our improvements and achievements in
1994. We want to recognize them for their accomplishments and to thank them for
their dedication, their service, and their realization of the Genlyte vision for
a bright future--together.
/s/ LARRY K. POWERS
LARRY K. POWERS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
[Photo of Executive Committee]
Executive Committee (back row): CHARLES M. HAVERS, STEVEN R. CARSON,
ZIA EFTEKHAR, RENE MARINEAU, GEORGE O'DONNELL, NEIL M. BARDACH,
DENNIS MUSSELMAN, (seated): DONNA R. RATLIFF, LARRY K. POWERS, AVRUM I. DRAZIN
3
<PAGE>
GENLYTE AT A GLANCE
<TABLE>
<CAPTION>
DIVISION BASIC BUSINESSES 1994 HIGHLIGHTS 1995 OPPORTUNITIES
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LIGHTOLIER High quality, innovative New ProSpec downlights Lightstyles, a
lighting for residential and Sof-Tech track comprehensive product/
and commercial interiors: lights; move of marketing program for the
downlighting, track headquarters' functions residential market;
lighting, decorative, into Fall River, MA, Advanced Lighting Systems
fluorescent, and manufacturing facility. of fixtures and controls
controls. for offices with VDTs;
international sales.
--------------------------------------------------------------------------------------------------------------------
CONTROLS Electronic dimming and Addition of high Continued focus on
energy saving lighting performance dimming integrated electronic
controls for both versions of the highly lighting fixtures,
residential and successful Lightolier increasing manufacturing
commercial applications. PowerSpec electronic capacity to meet market
fixture family of demand.
products.
--------------------------------------------------------------------------------------------------------------------
SUPPLY DIVISION: Standard, high-volume, Division consolidation Renewed emphasis on
STONCO, CRESCENT, contractor-friendly allowed resources to be product innovation;
& EXCELINE indoor and outdoor focused on improved improved point-of-sale
lighting distributed customer service and rep support for distributors,
through electrical support; implementation lower transaction cost
wholesalers and sold of world-class for electrical
primarily to electrical manufacturing techniques. wholesalers.
contractors.
--------------------------------------------------------------------------------------------------------------------
WIDE-LITE/ Energy-efficient, Introduced EFFEX Series Consolidation of
BRONZELITE high-intensity discharge precision architectural manufacturing operation;
indoor and outdoor HID floodlight, Bronze penetration into National
lighting and controls for family landscape Accounts with other
commercial, industrial, luminaires, and Genlyte divisions;
and recreational lighting multi-level HID lighting international sales.
applications. control systems;
implementation of world-
class manufacturing
techniques.
--------------------------------------------------------------------------------------------------------------------
HADCO Specification grade Best performance ever; Expansion of landscape
exterior architectural double-digit revenue product line; continued
lighting for municipal, growth; introduced growth of municipal
institutional, products into Middle market.
commercial, and landscape Eastern market.
applications.
--------------------------------------------------------------------------------------------------------------------
DIAMOND F Decorative residential Moved manufacturing and Broaden product offering
lighting fixtures sold distribution facility to and improve service
through do-it-yourself Elgin, IL. levels for the DIY
(DIY) home centers. market.
--------------------------------------------------------------------------------------------------------------------
CANLYTE Sale in Canada of Solidification of market Growing strength of
Lightolier, CFI, Keene, share which is already Canadian economy, and
Wide-Lite, Stonco, and the largest in Canada. National Account focus.
Hadco product lines.
</TABLE>
4
<PAGE>
LIGHTOLIER
Lightolier, Genlyte's most recognized brand, features innovative interior
lighting fixtures for the residential and commercial markets. In 1994,
Lightolier marked its 90th anniversary. The division successfully consolidated
marketing, design, engineering, and sales functions into its major manufacturing
facility in Fall River, Massachusetts. Two key new products were introduced. The
versatile ProSpec line of incandescent accent lighting provides a superior range
of light sources, optics, and adjustment. Sof-Tech track lighting offers the
fresh styling and "to-the-touch" quality that are hallmarks of Lightolier.
Important additions for 1995 include Lightstyles, targeting the residential
market with decorative, recessed, track, and lighting controls, with a
comprehensive application/product catalog. Also introduced were Advanced
Lighting Systems, Vision-Smart luminaires, and Energy-Smart controls for office
work spaces with Visual Display Terminals.
Lightolier sells through company employed sales forces and independent sales
representatives using a network of selective showroom and wholesale
distribution. National store and hospitality chains have been particularly
valuable end users. In 1995, the company will introduce a focused international
sales program.
[Photo Captions]
Top: Lightolier's architectural downlights play the key role in creating magic
for today's private residences.
Left: Lightolier's high-performance luminaires address both energy and
visibility. Library--Murray & Murray Law Offices, Sandusky, Ohio.
Center: Sof-Tech track lights with "cool grip" and integral die-cast louver.
Right: ProSpec recessed accent lights with interchangeable and lockable optics.
5
<PAGE>
CONTROLS
The Brilliance Control system, a specialty lighting dimming system introduced
last year for residential use, allowing control of standard dimmers from several
"master" control stations, became a top seller in 1994. Several line extensions
are planned in 1995, including a wireless version allowing direct retrofit to
existing homes without rewiring. In 1994, the division introduced MultiSet, an
advanced series of program-mable wallbox dimmers capable of learning five
distinct preset scenes.
The year 1994 also brought the introduction of the Lightolier HDF series of
dimming ballasts for fluorescent light sources. Marketed together, Lightolier
and HDF marks the first time a commercial indoor fixture manufacturer can be a
single source supplier of fixtures, ballasts, and controls under a complete
system warranty. Lightolier also successfully introduced the complete Controls
product line in Canada, foretelling excellent opportunities for these products
throughout North America.
Top: Contemporary residential application.
Center: Murray & Murray Law Offices, Sandusky, Ohio.
Bottom: Lightolier's new five scene preset series of dimmers and switches allow
convenient one button control of several lighting groups in commercial and
residential applications.
6
<PAGE>
FORECAST
Genlyte's Forecast brand of decorative lighting increased sales in 1994 by
twenty percent over the previous year. Thirty percent of these sales came from
the 185 new residential lighting fixtures introduced during the year. Among
these were distinctive iron chandeliers, art glass pendants, and halogen
bathroom fixtures. Sales of these products were often accompanied by the sale of
Forecast's new lighting controls line, which served retailers as a valuable
added sales opportunity.
In the coming year, Forecast plans further dramatic expansion of its product
line to fulfill the demands of all residential lighting markets by adding to its
well-established high-style collections. New entries in the value-oriented
builder products market segment will increase opportunities in the
middle-to-higher range decorative residential lighting markets.
Top: The new Contempo series pendant in distressed iron finish offers bright
halogen light.
Left: The Tribe Torchiere provides a dramatic design statement and matches
Forecast's Cienega art glass fixtures.
Right: The Embrace combines handmade cages in a parchment finish with stone
finished stepped glass.
7
<PAGE>
SUPPLY DIVISION: STONCO, CRESCENT & EXCELINE
The Supply Division markets quality, high-volume fluorescent and HID lighting
products to electrical distributors through the Stonco, Crescent, and ExceLine
brands. In 1994, Stonco experienced double digit growth, augmented by aggressive
implementation of "World-Class" manufacturing. Stonco introduced Guardsman
vandal-resistant security lighting for high pedestrian traffic areas, along with
MD motion detectors, offering cost-effective security for commercial and
residential markets. ExceLine introduced the Vertex family of high-performance
mini-floodlights suitable for a broad spectrum of applications.
For 1995, the division will present a family of merchan-dising tools including
point- of-purchase displays for electrical distributors. Crescent will debut the
first electronically ballasted family of under-cabinet task lights, while Stonco
will promote its new family of "vaportight" incandescent and compact fluorescent
fixtures. ExceLine will continue to broaden its product offering, with a
particular emphasis on high performance HID solutions for the retail trade.
Top: Ceiling and task lighting fluorescent products for commercial applications.
Left: Manuel Miranda at work in one of our employee- designed World-Class
Manufacturing work cells.
Center: 175 watt Vertex Series Mini Floodlight.
Right: Roughlyte(TM) vaportight fixture.
8
<PAGE>
WIDE-LITE / BRONZELITE
In 1994 Wide-Lite built on its fame as creator of the first high intensity
discharge (HID) floodlight for commercial and industrial markets, introducing
the EFFEX HID floodlight series, featuring compact size and architectural
styling. Other new products included: the Mini Supra-Lyte, a pedestrian walkway
complement to the Supra-Lyte area light; the F-Eclipse arena lighting luminaire;
and the Tri-Level hi-medium-low HID lighting control system. In 1995 Wide-Lite
will re-introduce its own invention--HID lighting control--in a new generation
of dimming controls employing state-of-the-art technology.
Bronzelite introduced the distinctive Bronze Series of corrosion-proof landscape
fixtures in 1994. The company offers a full line of landscape and underwater
lighting products for diverse architectural applications. Bronzelite will focus
on developing new segments in the specification landscape market.
Top: The Promenade at Bay Colony, Fort Lauderdale, Florida
Left: Effex Series Precision Floodlight
Right: Bronzelite-TLB-7000 Bronze Bullet
9
<PAGE>
HADCO
Hadco is a leader in outdoor architectural street lighting, area lighting, and
landscape lighting. Recognizing a market demand for small-footprint,
high-efficiency landscape fixtures able to withstand harsh exterior
environments, Hadco launched in 1993 an aggressive expansion of its composite
non-metallic line of professional-grade land-scape lighting equipment. The micro
inground fixture introduced in early 1994 skyrocketed to become one of Hadco's
top landscape products. Following this success, Hadco expanded its line of
outdoor composite bullet fixtures and launched a feature-laden micro composite
bullet in December. The new Railyter is another non-metallic product designed to
provide directional light under deck railings, ledges, and deck benches, making
it an exciting low voltage alternative for landscape architects.
Within the municipal market, Hadco's refractor globe technology is being
recognized as an effective, efficient lighting alternative for crime prevention
as well as a unique unifying downtown streetscape element.
Top: The twin refractive globe luminaires provide efficient glare-free street
lighting for the city of Syracuse.
Left: Customized luminaires allow urban planners to create an attractive
identity for their city.
Right: Hadco offers a complete line of landscape lighting products for
commercial and residential applications.
10
<PAGE>
DIAMOND F
In 1994 Genlyte's Diamond F division continued to expand in the consumer
marketplace with the introduction of distinctively-styled, popularly-priced
residential lighting fixtures. For these efforts, Diamond F was recognized
industry-wide with an award for outstanding product marketing in the
do-it-yourself (DIY) channel of distribution.
New product development and market activity emphasis will shift in 1995 towards
support of the fast growing DIY market segment. Management will focus on
stock-keeping unit (SKU) productivity and return on investment in an effort to
more effectively support the growing customer base.
Top: Prism 1291, Rust Patina Finish
Bottom: Milano 3496, Burnished Brass Finish
11
<PAGE>
CANLYTE
Nineteen ninety-four was a year of growth for Canlyte in all of its divisions.
The Lightolier product group introduced the Lightolier System which offers a
single source of fixtures, controls, and ballasts for commercial applications.
Lightolier's growth was also enhanced by increased activity in its National
Accounts Program. The CFI fluorescent product group increased market share by
combining its new Vision Smart fixtures and Energy Smart Lightolier Controls in
a single system.
Keene-Widelite's progress was due to increased penetration in key industrial
markets across the country. A concentrated effort on the high margin Wide-Lite
product line also contributed to Keene-Widelite's overall success.
All divisions benefited as the GENESYS software program continues to be one of
the main computer lighting design tools used by engineering firms across Canada.
Canlyte's major 1995 initia-tives include the rollout of CFI's Advanced Lighting
System throughout North America. Lightolier will focus on expanding track
lighting for the retail and commercial markets. Keene-Widelite will continue its
aggressive product introduction program and focus its marketing efforts on
specific end markets. All divisions will introduce service pro-grams based on
the credo that "good service is predictable service".
Top: Modern retail concepts, like this one in Montreal, enhanced by the
performance and style of Lightolier luminaires.
Bottom: Increases in productivity and energy savings of over 60% were achieved
by using CFI Fluorescent Vision Smart luminaires. This installation uses CFI
ambient and task lighting in a line of light configuration which consumes less
than .70 watts / ft2.
12
<PAGE>
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
1994 1993 1992 1991 1990
-------------------------------------------------------------------------------------------------------------
SUMMARY OF OPERATIONS ($ IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Net Sales $ 432,690 429,143 425,388 428,481 491,911
Gross profit $ 130,047 127,532 123,656 130,307 152,611
Facility rationalization expense $ -- -- 6,150 -- --
Operating profit $ 20,455 19,327 9,578 20,535 32,949
Interest expense, net $ 7,505 8,086 8,949 12,717 16,361
Income (loss) before income taxes and cumulative
effect of change in accounting principle $ 8,481 5,967 (3,642) 3,364 11,860
Provision (benefit) for income taxes $ 3,401 2,626 (1,450) 1,344 4,751
Net income (loss) before cumulative effect
of change in accounting principle $ 5,080 3,341 (2,192) 2,020 7,109
Cumulative effect of change in Accounting
Principle -- -- (3,670) -- --
Net income $ 5,080 3,341 1,478 2,020 7,109
Return on:
Net sales 1.2% .8% .4% .5% 1.4%
Average stockholders' investment 8.1% 5.6% 2.5% 3.5% 13.4%
Average capital employed 6.1% 4.7% 3.7% 4.9% 7.9%
-------------------------------------------------------------------------------------------------------------
YEAR-END POSITION ($ IN THOUSANDS)
Working capital $ 90,350 85,813 100,026 105,424 94,019
Plant and equipment, net $ 68,895 73,633 82,139 91,798 101,751
Total assets $ 243,814 244,536 256,924 265,069 286,091
Capital employed:
Total debt $ 90,047 100,419 117,797 129,982 144,198
Stockholders' investment $ 64,806 60,842 58,536 58,377 56,748
-------------------------------------------------------------------------------------------------------------
Total capital employed $ 154,853 161,261 176,333 188,359 200,946
-------------------------------------------------------------------------------------------------------------
PER SHARE DATA
Net Income (Primary & fully diluted) $ .40 .26 .12 .16 .55
Stockholders' investment per average
share outstanding $ 5.05 4.75 4.56 4.53 4.37
Market price range:
High $ 5 1/2 7 7 1/4 7 1/2 10 3/4
Low $ 3 1/2 2 3/8 4 1/4 3 7/8 3 7/8
-------------------------------------------------------------------------------------------------------------
OTHER DATA ($ IN THOUSANDS)
Orders on hand $ 50,379 43,246 49,495 48,761 46,620
Depreciation and amortization $ 16,886 16,308 18,639 18,961 19,572
Capital expenditures (a) $ 11,884 10,261 8,850 10,206 16,506
Average shares outstanding (b) 12,834 12,807 12,848 12,876 12,986
-------------------------------------------------------------------------------------------------------------
Current ratio 2.3 2.2 2.7 3.1 2.3
Interest Coverage Ratio 2.7 2.4 1.1 1.6 2.0
Number of stockholders 1,970 2,153 2,334 2,501 2,597
Average number of employees 2,838 2,999 3,051 3,189 3,870
Sales per employee $ 152,463 143,095 139,400 134,400 127,100
-------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Exclusive of acquired businesses' plant and equipment at date of acquisition
(b) Including common stock equivalents
13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net sales during 1994 increased by $3.5 million, or 1%, from 1993 following a
$3.8 million, or 1%, increase from 1992 to 1993. Sales in 1994 increased on
continued emphasis on new product and marketing programs, more than offsetting
decreases due to transition inefficiencies related to the relocation of the
Company's DFT Lighting Division ("DFT") from Cleveland, Ohio to Elgin, Illinois,
and the elimination of certain slow-moving and unprofitable products at all
divisions. A decline in the average value of the Canadian dollar during 1994
resulted in a $3.6 million reduction in 1994 sales volume; a decline in the
average value of the Canadian dollar during 1993 resulted in a $4.1 million
reduction in 1993 sales volume.
Gross profit was $130.0 million in 1994, $127.5 million in 1993, and $123.7
million in 1992. The increases in both 1993 and 1994 resulted from improved
sales volumes and increased gross margin rates. The improvements in gross margin
rates were the result of ongoing cost containment programs, productivity
improvements, the continuing facility rationalization programs, and the
previously-mentioned elimination of lower margin products, offset in part by
decreased gross profit at DFT.
Selling and administrative expenses were 25.3% of sales in 1994, 25.2% of
sales in 1993, and 25.4% of sales in 1992. Headcount and other cost reductions
during 1994 were offset by duplicate facility costs incurred by DFT. Increased
1993 expenditures for sales and marketing were offset by other cost reductions
including a reduced bad debt reserve requirement.
Corporate expenses were $4.5 million, $5.3 million, and $4.3 million in 1994,
1993, and 1992, respectively. Headcount reductions, lower legal expenses, and
other cost controls implemented during 1994 resulted in a 15.3% decrease in
expenses. The higher expenses in 1993 were principally an increase in legal
reserves to defend the Company against actions commenced in that year.
Net interest expense decreased by $600,000 in 1994 due to lower average
borrowings offset partially by rising interest rates throughout the year. Net
interest expense decreased by $900,000 from 1992 to 1993 due to lower average
borrowings and declines in interest rates throughout the year.
The Company adopted Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes", in 1992, retroactive to January 1, 1992. The
cumulative effect of this change in accounting principle was a $3.7 million
increase in net income in 1992.
The Company's effective tax rates for 1994, 1993, and 1992 were 40%, 44%, and
40%, respectively. Lower Canadian tax expense and utilization of U.S. foreign
tax credit carryforwards resulted in the 4% effective rate decrease during 1994.
Changes in federal tax laws and increases in state tax rates accounted for the
4% increase in effective rate during 1993.
14
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS, CONTINUED
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents were $3.2 million in 1994, $3.3 million in 1993,
and $2.8 million in 1992. Operations generated $23.4 million, $28.4 million, and
$24.8 million in 1994, 1993, and 1992, respectively. These funds were used
principally to pay down debt and to fund capital expenditures. Weakening in the
Canadian dollar caused unfavorable exchange rate changes of $1.9 million, $.5
million, and $1.3 million, in 1994, 1993, and 1992, respectively.
Investments in more advanced machinery, equipment, and tooling for new
product introductions accounted for most of the Company's capital expenditures
in 1994, 1993, and 1992. During 1994, expenditures also included plant expansion
at Fall River (Lightolier) and leasehold improvements at Elgin (DFT). During
1992, expenditures also included the acquisition of Forecast Lighting.
In the fourth quarter of 1992, the Company recorded a pre-tax charge of $6.2
Million to 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 operation 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 totaled only $677,000 of which $390,000 required cash. During 1994, the
Company charged an additional $4.6 million against the reserve, using cash of
approximately $4.1 million. Charges against the reserve during 1994 are
summarized as follows:
Category Charges
----------------------------------------------------
Personnel Relocation Costs $2,727
Severance Costs 1,250
Inventory Write-down 299
Plant and Equipment Write-down 286
Other Costs 13
----------------------------------------------------
Total $4,575
----------------------------------------------------
Location Charges
----------------------------------------------------
Elgin $2,326
Headquarters 1,340
Prodel 909
----------------------------------------------------
Total $4,575
----------------------------------------------------
Proceeds from 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 margin improvements in
1994 were offset by indirect costs and inefficiencies resulting from
relocations.
Genlyte's Revolving Credit and Term Loan Agreement was amended on May 20,
1994 to provide for a Revolving Credit Facility (the "Facility") of $125 million
reducing to $110 million by July 1, 1996. Subject to the satisfaction of certain
conditions, the Facility will convert on that date to a term loan amortizing
through July 1, 1999. Net reductions in debt outstanding under the Facility for
1994 and 1993 were $10.4 million and $17.4 million, respectively. The Company
expects that funds provided by operations combined with amounts available under
the Facility will be sufficient to meet cash requirements through 1995. Amounts
outstanding under the Facility are secured by liens on U.S. accounts receivable,
inventories, and machinery and equipment, as well as investments in certain
subsidiaries of the Company.
15
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
($ IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
For the year ended December 31, 1994 1993 1992
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Sales $432,690 $429,143 $425,388
Cost of sales 302,643 301,611 301,732
-----------------------------------------------------------------------------------------------------------
Gross Profit 130,047 127,532 123,656
Selling & administrative expenses 109,592 108,205 107,928
Facility rationalization expense -- -- 6,150
-----------------------------------------------------------------------------------------------------------
Operating Profit 20,455 19,327 9,578
Corporate expenses 4,469 5,274 4,271
Interest expense, net 7,505 8,086 8,949
-----------------------------------------------------------------------------------------------------------
Income (loss) Before Income Taxes and Cumulative Effect
of Change in Accounting Principle 8,481 5,967 (3,642)
Income Tax Provision (Benefit) 3,401 2,626 (1,450)
-----------------------------------------------------------------------------------------------------------
Income (loss) Before Cumulative Effect
of Change in Accounting Principle 5,080 3,341 (2,192)
-----------------------------------------------------------------------------------------------------------
Cumulative Effect of Change in Accounting Principle -- -- (3,670)
-----------------------------------------------------------------------------------------------------------
Net Income $ 5,080 $ 3,341 $ 1,478
-----------------------------------------------------------------------------------------------------------
Earnings Per Share Before Cumulative Effect of
Change in Accounting Principle .40 .26 (.17)
-----------------------------------------------------------------------------------------------------------
Effect of Change in Accounting Principle on Earnings Per Share -- -- .29
-----------------------------------------------------------------------------------------------------------
Earnings Per Share $ .40 $ .26 $ .12
-----------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes to the consolidated financial statements are an integral
part of these statements.
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
($ IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Quarter
-------------------------------------------------------------------------------------------
1st 2nd 3rd 4th Full Year
-----------------------------------------------------------------------------------------------------------
1994
<S> <C> <C> <C> <C> <C>
Net Sales $100,271 $108,829 $111,836 $111,754 $432,690
Operating Profit $ 5,129 $ 5,831 $ 5,846 $ 3,649 $ 20,455
Net Income $ 1,264 $ 1,578 $ 1,475 $ 763 $ 5,080
Earnings Per Share $ .10 $ .12 $ .12 $ .06 $ .40
Market Price:
High $ 4 3/4 $ 5 1/4 $ 5 1/2 $ 5 $ 5 1/2
Low $ 3 3/4 $ 4 $ 4 1/2 $ 3 1/2 $ 3 1/2
1993
Net Sales $106,556 $109,084 $107,970 $105,533 $429,143
Operating Profit $ 4,308 $ 4,550 $ 5,066 $ 5,403 $ 19,327
Net Income $ 618 $ 767 $ 895 $ 1,061 $ 3,341
Earnings Per Share $ .05 $ .06 $ .07 $ .08 $ .26
Market Price:
High $ 7 $ 5 $ 4 5/8 $ 4 3/8 $ 7
Low $ 4 1/2 $ 2 5/8 $ 2 3/8 $ 2 5/8 $ 2 3/8
</TABLE>
16
<PAGE>
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
($ IN THOUSANDS)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
For the year ended December 31, 1994 1993
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 3,240 $ 3,319
Accounts receivable (less allowances for doubtful accounts of $3,551
and $3,765 in 1994 and 1993, respectively) 65,486 58,991
Inventories:
Raw materials and supplies 29,051 29,570
Work in progress 9,683 11,519
Finished goods 45,604 42,754
------------------------------------------------------------------------------------------------------------
84,338 83,843
------------------------------------------------------------------------------------------------------------
Other current assets 7,904 9,860
------------------------------------------------------------------------------------------------------------
Total current assets 160,968 156,013
------------------------------------------------------------------------------------------------------------
Plant and Equipment:
Land 5,741 5,820
Buildings and leasehold interests and improvements 57,309 54,602
Machinery and equipment 157,803 157,011
------------------------------------------------------------------------------------------------------------
220,853 217,433
Less: Accumulated depreciation and amortization 151,958 143,800
------------------------------------------------------------------------------------------------------------
68,895 73,633
------------------------------------------------------------------------------------------------------------
Cost in Excess of Net Assets of Purchased Businesses 12,183 12,336
Other Assets 1,768 2,554
------------------------------------------------------------------------------------------------------------
Total Assets $243,814 $244,536
============================================================================================================
Liabilities and Stockholders' Investment
Current Liabilities:
Short-term borrowings $ 1,050 $ 0
Current maturities of long-term debt 45 7,060
Accounts payable - trade 39,927 31,893
Accrued expenses:
Salaries and wages 6,982 4,368
Income taxes payable 1,169 2,561
Reserve for facility rationalization costs 898 5,474
Other accrued expenses 20,547 18,844
------------------------------------------------------------------------------------------------------------
29,596 31,247
------------------------------------------------------------------------------------------------------------
Total current liabilities 70,618 70,200
------------------------------------------------------------------------------------------------------------
Long-term Debt 88,952 93,359
Deferred Income Taxes 5,781 7,508
Other Liabilities 13,657 12,627
Stockholders' Investment:
Common stock ($ .01 par value, 30,000,000 shares authorized, 12,833,674
shares issued at December 31, 1994 and 1993; 12,741,870 and 12,731,556
shares outstanding at December 31, 1994 and 1993, respectively) 128 128
Additional paid-in capital 7,295 8,411
Retained earnings 57,383 52,303
------------------------------------------------------------------------------------------------------------
Total stockholders' investment 64,806 60,842
------------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Investment $243,814 $244,536
============================================================================================================
</TABLE>
The accompanying notes to the consolidated financial statements are an integral
part of these statements.
17
<PAGE>
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
($ IN THOUSANDS EXCEPT PER SHARE DATA)
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the year ended December 31, 1994 1993 1992
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows From Operating Activities:
Net income $ 5,080 $ 3,341 $ 1,478
Adjustments to reconcile net income to net cash
flows provided by operating activities:
Cumulative effect of change in accounting principle -- -- (3,670)
Depreciation and amortization 16,886 16,308 18,639
Loss from disposal of plant and equipment 437 313 266
(Increase) decrease in:
Accounts receivable (6,495) (1,176) 2,118
Inventories (495) 3,531 3,281
Other current assets 1,956 901 (5,236)
Other assets (22) 242 3,378
Increase (decrease) in:
Accounts payable and accrued expenses 6,383 6,495 6,532
Deferred income tax liability (1,727) (815) (2,672)
Other liabilities 1,030 (981) 546
All other, net 415 238 139
------------------------------------------------------------------------------------------------------------
Net cash flows provided by operating activities 23,448 28,397 24,799
------------------------------------------------------------------------------------------------------------
Cash Flows From Investing Activities:
Acquisition of Forecast Lighting -- -- (3,046)
Purchase of plant and equipment (11,884) (10,261) (8,850)
Proceeds from disposal of plant and equipment 620 144 102
------------------------------------------------------------------------------------------------------------
Net cash flows used in investing activities (11,264) (10,117) (11,794)
------------------------------------------------------------------------------------------------------------
Cash Flows From Financing Activities:
Tax benefit - Founders' shares -- -- 941
Sale of stock, net of tax benefit -- 97 105
Repayment of debt, net (10,372) (17,378) (12,185)
------------------------------------------------------------------------------------------------------------
Net cash flows used in financing activities (10,372) (17,281) (11,139)
------------------------------------------------------------------------------------------------------------
Effect of Exchange Rate Changes (1,891) (490) (1,333)
------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents (79) 509 533
Cash and cash equivalents at beginning of year 3,319 2,810 2,277
------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year $ 3,240 $ 3,319 $ 2,810
============================================================================================================
Supplemental Disclosure Of Cash Flow Information
Cash paid during the year for:
Interest $ 7,537 $ 6,787 $ 8,795
============================================================================================================
Income taxes $ 3,358 $ 1,652 $ 3,130
============================================================================================================
</TABLE>
The accompanying notes to the consolidated financial statements are an integral
part of these statements.
18
<PAGE>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' INVESTMENT
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES ($ IN THOUSANDS)
<TABLE>
<CAPTION>
Common Additional Retained
Stock Paid-in Capital Earnings
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance, December 31, 1991 $128 $10,765 $47,484
-----------------------------------------------------------------------------------------------------------
NET INCOME -- -- 1,478
Foreign currency translation adjustments -- (2,365) --
Tax benefit-- Founders' shares -- 941 --
Exercise of stock options -- 105 --
Balance, December 31, 1992 $128 $ 9,446 $48,962
-----------------------------------------------------------------------------------------------------------
Net income -- -- 3,341
Foreign currency translation adjustments -- (1,132) --
Exercise of stock options -- 100 --
Treasury stock -- (3) --
Balance, December 31, 1993 $128 $ 8,411 $52,303
-----------------------------------------------------------------------------------------------------------
Net income -- -- 5,080
Foreign currency translation adjustments -- (1,116) --
BALANCE, DECEMBER 31, 1994 $128 $ 7,295 $57,383
-----------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes to the consolidated financial statements are an integral
part of these statements.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE STOCKHOLDERS OF THE GENLYTE GROUP INCORPORATED:
We have audited the accompanying consolidated balance sheets of The Genlyte
Group Incorporated (a Delaware corporation) and subsidiaries as of December 31,
1994 and 1993, and the related consolidated statements of income, cash flows and
stockholders' investment for each of the three years in the period ended
December 31, 1994. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Genlyte Group Incorporated
and subsidiaries as of December 31, 1994 and 1993, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1994 in conformity with generally accepted accounting principles.
As discussed in Note (1) of Notes to the Consolidated Financial Statements,
effective January 1, 1992, the Company changed its method of accounting for
income taxes.
/s/ Arther Anderson LLP
New York, New York
January 26, 1995
19
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
($ IN THOUSANDS EXCEPT PER SHARE DATA)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION:
The accompanying consolidated financial statements include the accounts of The
Genlyte Group Incorporated and its subsidiaries ("Genlyte" or the "Company")
after elimination of all material intercompany accounts and transactions.
Certain prior year amounts have been reclassified to conform with the current
year presentation.
INVENTORIES:
Inventories are stated at the lower of cost or market. Inventory costs include
material, labor, and overhead. At December 31, 1994, approximately 59% of the
consolidated inventories were valued on a first-in, first-out ("FIFO") basis.
The remaining inventories were valued on a last-in, first-out ("LIFO") basis,
which was approximately $5,594 and $4,267 greater than their FIFO basis at
December 31, 1994 and 1993, respectively.
PLANT AND EQUIPMENT:
The Company provides for depreciation of plant and equipment principally on a
straight line basis over the useful lives of the assets. Useful lives vary among
the several classifications, as well as among the constituent items in each
classification, but generally fall within the following ranges:
Buildings ........................... 10-40 years
Machinery and equipment .............. 3-10 years
When property is sold or otherwise disposed of, the asset cost and
accumulated depreciation are removed from the accounts and any resulting gain or
loss is included in the Consolidated Statement of Income.
Leasehold interests and improvements are amortized over the terms of the
respective leases, or over their estimated useful lives, whichever is shorter.
Maintenance and repairs are expensed as incurred.Renewals and betterments are
capitalized and depreciated or amortized over the remaining useful lives of the
respective assets.
Accelerated methods of depreciation are used for income tax purposes, and
appropriate provisions are made for the related deferred income taxes.
COST IN EXCESS OF NET ASSETS OF
PURCHASED BUSINESSES:
Cost in excess of net assets of purchased businesses acquired prior to 1971 is
not amortized since, in the opinion of management, there has been no diminution
in value. For businesses acquired subsequent to 1970, the cost in excess of net
assets, aggregating $9,568, is being amortized over 20-40 years. For the years
ended December 31, 1994 and 1993, $2,541 and $2,387 have been amortized,
respectively.
RESEARCH AND DEVELOPMENT COSTS:
Research and development costs are expensed as incurred. These expenses were
$3,006 in 1994, $3,571 in 1993, and $3,516 in 1992.
TRANSLATION OF FOREIGN CURRENCIES:
Balance sheet accounts of foreign subsidiaries are translated at the rates of
exchange in effect as of the balance sheet date. The cumulative effect of such
adjustments were $2,585 and $1,470 at December 31, 1994 and 1993, respectively,
and have been charged to the Additional paid-in capital account in Stockholders'
Investment. Income and expenses are translated at the average exchange rates
prevailing during the year.
Gains or losses resulting from foreign currency transactions are included in
net income.
CASH EQUIVALENTS:
For purposes of the Consolidated Statements of Cash Flows, the Company considers
all highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents.
CUMULATIVE EFFECT OF A CHANGE IN
ACCOUNTING PRINCIPLE:
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes", which
requires a change from the deferred method to the asset and liability method of
accounting for income taxes. Under the asset and liability method, deferred
income taxes are recognized for the tax consequences of temporary differences by
applying enacted statutory tax rates applicable to future years to differences
between the financial statement carrying amounts and the tax bases of existing
assets and liabilities. Under SFAS No. 109, the effect on deferred taxes of a
change in tax rates is recognized in income in the period that includes the
enactment date. Under the deferred method, deferred taxes were recognized using
the tax rate applicable to the year of the calculation and were not adjusted for
subsequent changes in tax rates.
The Company elected to adopt SFAS No. 109 in 1992 and reported the cumulative
effect of the change in the method of accounting for income taxes as of the
beginning of the 1992 fiscal year in the Consolidated Statement of Income.
FAIR VALUE OF FINANCIAL INSTRUMENTS:
The carrying amount of cash equivalents, letters of credit, and long-term debt
approximate fair value due to the short-term nature of the instruments and
frequent repricing of long-term debt at market rates.
(2) Tax Benefit -- Founders' Shares
Certain employees of the Company purchased 2,000,000 restricted shares of
Genlyte common stock in 1988. Prior to 1992 restrictions were lifted or expired
on 2/3 of the shares. The remaining 1/3 expired in 1992, resulting in a tax
benefit to the Company.
(3) Earnings per Common Share
Earnings per share are calculated utilizing the weighted average shares
outstanding with the fully dilutive effect of outstanding stock options taken
into account.
20
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
($ IN THOUSANDS EXCEPT PER SHARE DATA)
(4) Income Taxes
The components of income before income taxes and the provision for income taxes
are as follows:
1994 1993 1992
----------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES:
Domestic $6,206 $4,256 $(3,062)
Foreign 2,275 1,711 (580)
----------------------------------------------------
$8,481 $5,967 $(3,642)
====================================================
Provision (Benefit) for Income Taxes:
Domestic:
Currently payable 2,606 2,209 3,251
Deferred (5) (272) (4,523)
Foreign:
Currently payable 784 753 626
Deferred 16 (64) (804)
----------------------------------------------------
$3,401 $2,626 $(1,450)
====================================================
As discussed in Note (1), the Company adopted SFAS No. 109 as of January 1,
1992. The cumulative effect on prior years of this change in accounting
principle was an increase in net income of $3,670 or $.29 per share and is
reported separately in the Consolidated Statement of Income for the year ended
December 31, 1992.
Future U.S. income taxes have not been provided on the undistributed earnings
of international operations since they have been indefinitely reinvested in
those operations. At December 31, 1994, such earnings aggregated $16,873. At
December 31, 1994, the Company had $226 of foreign tax credit carryforwards that
will be available to reduce taxes in future years. Valuation reserves of $226
have been established for foreign tax credits which may expire prior to
utilization.
The provision for income taxes includes a deferred component which arose from
the recording of certain items in different periods for financial reporting and
income tax purposes. The sources of the domestic differences and the tax effect
of each are as follows:
1994 1993 1992
-----------------------------------------------------------------
Depreciation $(1,186) $(1,273) $(1,376)
Inventory Valuation (41) (237) (662)
Facility Rationalization Reserve 1,500 105 (1,979)
Pension Accruals (470) 270 (77)
Bad Debt Reserve 82 464 (247)
Other Accruals/Reserves 94 177 (375)
Other, Net 16 222 193
-----------------------------------------------------------------
Total Domestic
Deferred Tax Provision $ (5) (272) (4,523)
=================================================================
In 1994, 1993, and 1992, the Company's effective tax rates were 40.1%, 44%, And
39.8%, Respectively, of income before income taxes. An analysis of the
differences between the actual provision for income taxes and the provision at
the U.S. Federal statutory tax rate is as follows:
1994 1993 1992
----------------------------------------------------------
Statutory Federal Rate $ 2,883 $ 2,029 $(1,238)
State and Local Taxes, Net
of Federal Tax Benefit 543 535 145
Other, Net (25) 62 (357)
----------------------------------------------------------
Total Provision (Benefit)
for Income Taxes $ 3,401 $ 2,626 $(1,450)
==========================================================
(5) Long-Term Debt
1994 1993
----------------------------------------------------
Revolving Credit Notes $78,000 $ 88,000
Industrial Revenue Bonds 10,500 10,500
OTHER 497 1,919
----------------------------------------------------
$88,997 $100,419
Less: Current Maturities 45 7,060
----------------------------------------------------
Total $88,952 $ 93,359
====================================================
In 1994, Genlyte amended the Revolving Credit and Term Loan Agreement (the
"Amended Agreement") to provide for a Revolving Credit Facility (the "Facility")
of $125,000 reducing to $110,000 over a two year period. The total borrowing
under the Facility as of December 31, 1994 was $78,000. In addition, the Company
has issued approximately $10,000 of Letters of Credit which reduce the amount
available to borrow under the Facility. The interest rate, at the option of the
Company, is a floating rate related to either (1) a reference rate determined by
the Agent bank, or (2) the London Interbank Offered Rate (LIBOR), plus a fixed
spread. In November 1994, a three-year interest rate cap which limited the
maximum interest rate to 9% on $75,000 of loans under the Facility expired and
was not renewed. The Company pays a commitment fee on the unused portion of the
Facility. The Facility converts to a term loan on July 1, 1996 and is thereafter
payable in installments through 1999. The amount outstanding under the Facility
is secured by liens on U.S. accounts receivable, inventories, and machinery and
equipment, as well as the investments in certain subsidiaries of the Company.
The approximate fair value of assets subject to lien at December 31, 1994 was
$178,000.
The terms of the Amended Agreement include various covenants which, among
others, limit the amounts that can be expended for cash dividends and purchases
of Company stock. The payment of dividends is prohibited until such time as the
debt/equity ratio falls below 50%. Thereafter, the payment of dividends is
further conditioned upon satisfaction of net income thresholds as set forth in
the Amended Agreement. No dividends were payable in 1994 since the debt/equity
ratio condition was not satisfied. At December 31, 1994 and 1993 the Company was
in compliance with all provisions of the Amended Agreement. Funds generated from
operations combined with amounts available under the Facility are expected to
fulfill anticipated cash requirements for the Company through 1995.
The Company has $10,500 of variable rate demand Industrial Revenue Bonds
comprised of three issues of $5,000, $4,500, and $1,000 payable in 2010, 2009,
21
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
($ IN THOUSANDS EXCEPT PER SHARE DATA)
and 2009, respectively. During 1994, the average interest rate on these bonds
was 4.4%. The bonds are backed by a bank's letter of credit for the life of the
bonds to guarantee payment of the bonds on the Company's behalf. The letter of
credit is subject to annual renewals by the bank. The bonds are also secured by
liens on the related facilities and equipment.
The Company has mortgages and other debt at interest rates of 4.8% to 9.1%
due from 1995 through 2001.
The annual maturity requirements for long-term debt are summarized as
follows:
Year Ending December 31
1996 $ 4,924
1997 19,553
1998 19,558
1999 34,266
2000 and thereafter 10,651
----------------------------------------------------
Total Long-term Debt $88,952
----------------------------------------------------
(6) Stock Options
The Genlyte 1988 Stock Option Plan (the "Plan") was established in 1988 for the
benefit of key employees and directors of Genlyte and its affiliates. The Plan
provides that an aggregate of 2,000,000 shares of Genlyte Common Stock may be
granted as non-qualified stock options, provided that no options may be granted
if the number of shares of Genlyte Common Stock which may be issued upon the
exercise of outstanding options would exceed the greater of 1,000,000 shares of
Genlyte Common Stock or 10% of the issued and outstanding shares of Genlyte
Common Stock.
The option exercise prices are established by the Board of Directors of
Genlyte and cannot be less than the higher of the book value or the fair market
value of a share of common stock on the date of grant.
There are two types of options issued to key employees under the Plan. Merit
options are exercisable at the rate of 50% per year commencing two years after
the date of the grant. Performance options are granted as incentives to certain
key employees for attaining specific financial goals.
Transactions under the Plan are summarized below:
Option Price
Shares Per Share
----------------------------------------------------------------
Outstanding December 31, 1991 562,096 $4.00-12.75
Granted 649,167 4.53- 6.88
Exercised (26,772) 4.00- 5.50
Cancelled (194,336) 4.00-12.75
----------------------------------------------------------------
Outstanding December 31, 1992 990,155 $4.00-12.75
Granted 177,300 4.53- 6.50
Exercised (24,468) 4.00- 5.50
Cancelled (212,104) 4.00-12.75
----------------------------------------------------------------
Outstanding December 31, 1993 930,883 $4.53-12.75
Granted 176,750 4.75- 5.50
Cancelled (94,250) 4.53-12.75
----------------------------------------------------------------
Outstanding December 31, 1994 1,013,383 $4.53- 8.75
----------------------------------------------------------------
At year-end 1994, there were 356,492 outstanding options currently
exercisable.
No accounting recognition is given to stock options until they are exercised,
at which time Genlyte recognizes in Additional paid-in capital the tax benefit
resulting from the difference between the option price and the fair market value
of the common stock.
(7) Preferred Stock Purchase Rights
In August 1989, the Company declared a dividend of one preferred stock purchase
right on each share of the Company's common stock. Under certain conditions,
each right may be exercised to purchase one one-hundredth share of a new series
of junior participating cumulative preferred stock at an exercise price of
$75.00 per share. The right may only be exercised within ten (10) business days
after a person or group of persons (the "Holder") acquire, or commence a tender
offer to acquire, 20% or more of Genlyte's outstanding common stock, or upon
declaration by the Board of Directors. Upon the acquisition by the Holder of 20%
or more of the Company's outstanding common stock, each right would represent
the right to purchase for $75.00, shares of the Company common stock with a
market value of $150.00. The rights may be redeemed by the Company at a price of
$.01 per right and can be amended by the Company's Directors during the ten (10)
day period prior to the exercise date. These rights expire in 1999.
The preferred stock purchased upon exercise of the rights will be entitled to
a minimum annual preferential dividend of $1.00 and a minimum liquidation
payment of $1.00 per one-hundredth share of the preferred stock. If the Company
were to enter into certain business combination or disposition transactions with
the Holder, each right would also be entitled to purchase for $75.00, shares of
the Holder's common stock with a market value of $150.00.
(8) Pension Plans
Genlyte has several pension plans which cover the majority of its employees. The
Genlyte Corporation Retirement Plan is the Company's principal retirement plan
and covers most of the employees of the Company. Benefits under that plan are
based on years of service and average compensation during five consecutive years
within the last ten years of employment. The Company's pension plan assets
consist primarily of publicly traded equity or debt securities. Pension costs
under the Company's retirement plans are actuarially computed. Annual
contributions are made to the plans in amounts approximately equal to the
amounts accrued for pension expense.
The Company's pension cost for 1994, 1993, and 1992 consists of the
following:
1994 1993 1992
------------------------------------------------------------------
Service cost benefits earned
during the year $ 1,052 $ 1,247 $ 1,113
Interest cost on benefits
earned in prior years 3,006 2,813 2,704
Actual return on plan assets (2) (2,984) (2,299)
Net deferral (2,426) 569 (47)
Amortization 289 319 312
------------------------------------------------------------------
Net pension cost $ 1,919 $ 1,964 $ 1,783
------------------------------------------------------------------
22
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
($ IN THOUSANDS EXCEPT PER SHARE DATA)
At December 31, 1994 the Genlyte Corporation Retirement Plan had plan assets
which exceeded accumulated benefit obligations. In addition, during 1994 several
plans had accumulated benefit obligations which exceeded plan assets. At
December 31, 1993 the accumulated benefit obligations of the plans exceeded plan
assets. The following tables summarize the funded status of the Company's
pension plans and the related amounts that are recognized as liabilities in the
consolidated balance sheet:
Assets Exceed
Accumulated Benefits
1994
-----------------------------------------------------
Actuarial present value of benefit obligations:
Vested benefit obligation $27,478
Non-vested benefit obligation 266
-----------------------------------------------------
Accumulated benefit obligation 27,744
Effect of estimated future increases
in compensation 4,231
-----------------------------------------------------
Projected benefit obligation 31,975
Plan assets at fair value 28,744
-----------------------------------------------------
Projected benefit obligation in excess
of plan assets (3,231)
Unrecognized net obligation at adoption 669
Unrecognized net benefit since adoption (2,748)
Unrecognized prior service cost (131)
-----------------------------------------------------
Accrued pension liability as of
December 31 $(5,441)
-----------------------------------------------------
Accumulated Benefits
Exceed Assets
1994 1993
--------------------------------------------------------------------------
Actuarial present value of benefit obligations:
Vested benefit obligation $ 8,305 $ 39,646
Non-vested benefit obligation 213 705
--------------------------------------------------------------------------
Accumulated benefit obligation 8,518 40,351
Effect of estimated future increases
in compensation 39 4,700
--------------------------------------------------------------------------
Projected benefit obligation 8,557 45,051
Plan assets at fair value 3,344 33,864
--------------------------------------------------------------------------
Projected benefit obligation in excess
of plan assets (5,213) (11,187)
Unrecognized net obligation at adoption 422 1,268
Unrecognized net (benefit) obligation
since adoption (41) 947
Unrecognized prior service cost 1,151 939
--------------------------------------------------------------------------
Accrued pension liability as of
December 31 $ (3,681) $ (8,033)
--------------------------------------------------------------------------
The discount rates and rates of increase in future compensation levels used
in determining the actuarial present value of the liabilities recognized on the
consolidated balance sheet were 8% and 5%, respectively, at September 30, 1994
and 6.5% and 5%, respectively, at September 30, 1993. The expected long-term
rate of return on plan assets was 8% at September 30, 1994 and 1993.
The Company has a number of plans for hourly personnel, primarily union
(single or multi-employer) pension plans, for which the Company's obligation is
a defined contribution amount. The basis for the contribution includes union
contract amounts, usually based on an amount per hour worked, and percentages of
employee contributions. Expense amounts recorded under these plans were $491,
$597, and $556 in 1994, 1993, and 1992, respectively.
Genlyte also maintains several defined benefit plans covering substantially
all employees of its Canadian subsidiary (Canlyte, Inc.). Net pension costs for
this plan included the following:
1994 1993 1992
----------------------------------------------------
Service cost benefits
earned during the year $114 $103 $182
Interest cost on benefits
earned in prior years 222 213 234
Actual return on plan assets (502) (478) (380)
Net deferral 243 255 159
Amortization (4) (4) 6
----------------------------------------------------
Net pension cost $ 73 $ 89 $201
----------------------------------------------------
The funded status of the plan is as follows:
1994 1993
------------------------------------------------------------------------
Actuarial present value of benefit obligations:
Vested benefit obligation $ 2,654 $ 2,590
Non-vested benefit obligation 78 70
------------------------------------------------------------------------
Accumulated benefit obligation 2,732 2,660
Effect of estimated future increases
in compensation 263 262
------------------------------------------------------------------------
Projected benefit obligation 2,995 2,922
Plan assets at fair value 3,525 3,376
------------------------------------------------------------------------
Projected benefit obligation in excess
of plan assets 530 454
Unrecognized net benefit at adoption (52) (59)
Unrecognized net benefit since adoption (244) (256)
------------------------------------------------------------------------
Prepaid pension cost as of December 31 $ 234 $ 139
------------------------------------------------------------------------
The discount rates and rates of increase in future compensation levels used
in determining the actuarial present value of the projected benefit obligations
were 8% and 5%, respectively, at December 31, 1994 and 7% and 4%, respectively,
at December 31, 1993. The expected long-term rate of return on assets was 8% at
December 31, 1994 and 7% at December 31, 1993.
(9) Facility Rationalization Expense
In the fourth quarter of 1992, the Company recorded a pre-tax charge of $6,150
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
23
<PAGE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
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 totaled only
$677 of which $390 required cash. During 1994, the Company charged an additional
$4,575 against the reserve, using cash of approximately $4,081. Charges against
the reserve during 1994 are summarized as follows:
Category Charges
----------------------------------------------------
Personnel Relocation Costs $2,727
Severance Costs 1,250
Inventory Write-down 299
Plant and Equipment Write-down 286
----------------------------------------------------
Other Costs 13
----------------------------------------------------
Total $4,575
----------------------------------------------------
Location Charges
----------------------------------------------------
Elgin $2,326
Headquarters 1,340
Prodel 909
Total $4,575
----------------------------------------------------
Proceeds from 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 $4,400 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 margin improvements in 1994 were
offset by indirect costs and inefficiencies resulting from relocation.
The remaining $898 of the reserve will be utilitized in 1995.
(10) Lease Commitments
The Company rents office space, equipment, and computers under noncancellable
operating leases. Rental expense during 1994, 1993, and 1992 amounted to $4,828,
$4,746, and $4,913, respectively. Future required minimum rental payments as of
December 31, 1994 were as follows:
1995 $ 4,595
1996 2,801
1997 1,530
1998 1,248
1999 1,092
AFTER 1999 4,453
-----------------------------------------------------
Total $15,719
-----------------------------------------------------
(11) Contingencies
Genlyte is a defendant in various lawsuits. In particular, the Company 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, and the other corporate
defendants, were successors to and alter egos of Keene.
These cases remain 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.
In April 1994, an independent Examiner was appointed by the Bankruptcy Court
in the Keene bankruptcy proceeding to investigate the viability of the claims
asserted in the stayed cases and the applicability of statutes of limitations to
bar such claims. A preliminary report by the Examiner addressing the issues was
released on September 23, 1994. Such report has been submitted to the Bankruptcy
Court for further proceedings on or after March 30, 1995.
Additionally, the Company is a defendant and/or potentially responsible party
with other companies in actions and proceedings under state and federal
environmental laws including the federal Comprehensive Environmental Response
Compensation and Liability Act, as amended ("Superfund"). Such actions include,
but are not limited to, the Keystone Sanitation Landfill site located in
Pennsylvania, in which the United States Environmental Protection Agency has
sought remedial action and reimbursement for past costs.
Management does not believe that the disposition of the lawsuits and/or
proceedings will have a material effect on the Company's financial condition or
results of operations.
(12) Geographical Information
The Company has operations throughout North America. Information about the
Company's operations by geographical area for the years ended December 31, 1994,
1993, and 1992, is as follows:
Net Operating
Sales Profit Assets
----------------------------------------------------
1994
United States $374,677 $18,262 $214,433
Foreign 58,013 2,193 29,381
----------------------------------------------------
Total $432,690 $20,455 $243,814
----------------------------------------------------
1993
United States $368,489 $16,994 $214,595
Foreign 60,654 2,333 29,941
----------------------------------------------------
Total $429,143 $19,327 $244,536
----------------------------------------------------
1992
United States $364,078 $ 9,414 $224,147
Foreign 61,310 164 32,777
----------------------------------------------------
Total $425,388 $ 9,578 $256,924
----------------------------------------------------
24
<PAGE>
[PICTURE SHOWING THE BOARD OF DIRECTORS]
Board of Directors (back row): FRANK METZGER, DAVID M. ENGELMAN,
GLENN W. BAILEY, ROBERT B. CADWALLADER; (seated): FRED HELLER,
AVRUM I. DRAZIN, LARRY K. POWERS
CORPORATE DIRECTORY
<TABLE>
<S> <C> <C> <C>
BOARD OF AVRUM I. DRAZIN+ ROBERT B. CADWALLADER FRED HELLER
DIRECTORS Chairman President Chairman Emeritus
The Genlyte Group Incorporated Cadwallader Company Inc. & The Genlyte Group Incorporated
President Cadwallader Fabrics Inc.
Canlyte Incorporated FRANK METZGER
DAVID M. ENGELMAN President
LARRY K. POWERS+ Director Metzger & Company
President and Chief Executive Officer The Genlyte Group Incorporated
The Genlyte Group Incorporated
GLENN W. BAILEY
Chairman
Keene Corporation
EXECUTIVE STEVEN R. CARSON NEIL M. BARDACH* DENNIS MUSSELMAN
COMMITTEE Vice President and General Manager Vice President and Vice President and General Manager
Controls Chief Financial Officer Hadco
ZIA EFTEKHAR CHARLES M. HAVERS GEORGE O'DONNELL
President President Vice President and General Manager
Lightolier Supply Division, Wide-Lite/Bronzelite
including
+ Also an officer and member of Stonco, Crescent, and ExceLine DONNA R. RATLIFF*
the Executive Committee. Vice President - Administration
* Also an officer of the company. RENE MARINEAU And Corporate Secretary
President
Lightolier/CFI
</TABLE>
<PAGE>
GENLYTE LIGHTING THE WAY -- TOGETHER
[PICTURE SHOWING BOARDWALK]
We are customer focused and we will strive to meet
or exceed the expectations of our customers.
--------------------------------------------
We value and respect each employee as an
individual--we listen to, trust, and serve each other.
--------------------------------------------
We believe that all employees are entitled to fair
treatment, a safe and healthy work environment,
the opportunity to grow, and an honest day's pay
for an honest day's work. We strive to promote
from within.
--------------------------------------------
We have a sense of urgency and will respond to
problems and opportunities immediately.
--------------------------------------------
We are committed to the development of a well
trained and motivated sales organization to best
serve the needs of our customers.
--------------------------------------------
We deliver high quality products on time, and we
always stand behind them.
--------------------------------------------
We design and manufacture innovative products
and provide superior lighting solutions.
--------------------------------------------
We are cost conscious with regard to our business
decisions and our expenditures.
--------------------------------------------
We operate in a global market and must be a
low cost producer in order to compete.
--------------------------------------------
We must provide our stockholders with a fair rate
of return on their investments.
--------------------------------------------
We adopt total quality management concepts and
strive for continuous improvements in all aspects
of our operations.
--------------------------------------------
We focus on the vital few--those activities,
customers, products, and processes which provide
the greatest return.
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
The Genlyte Group Incorporated does business under the names Lightolier,
Forecast, Stonco, Crescent, Hadco, Wide-Lite, Bronzelite, Diamond F, Timely, and
Exceline. Genlyte has the following subsidiaries:
1. Canlyte, Inc., a Canadian Corporation. Canlyte does
business under the names Lightolier, Prodel, Keene-
Widelite, Stonco, Elyte and CFI (Canadian Fluorescent
Industries).
2. Diaman-Mexo, S.A. de C.V., a Mexican Corporation.
3. Lightolier de Mexico, S.A. de C.V., a Mexican Corporation
4. The Lighting Group Inc., a New York Corporation
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE GENLYTE GROUP INCORPORATED:
As independent public accountants, we hereby consent to the incorporation of (a)
our report dated January 26, 1995 included in The Genlyte Group Incorporated's
(the "Company's") Annual Report to Shareholders for the year ended December 31,
1994 into the Company's Annual Report on Form 10-K for the year ended December
31, 1994 (the "Form 10-K") and (b) our reports dated January 26, 1995 included
and incorporated into the Form 10-K, into the Company's previously filed
Registration Statements on Form S-8 (Registration No.'s: 33-30722 and 33-27190).
ARTHUR ANDERSEN LLP
New York, New York
March 23, 1995
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