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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended July 1, 1995
Commission File Number 0-16960
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THE GENLYTE GROUP INCORPORATED
100 Lighting Way
Secaucus, N. J. 07096
(201) 864-3000
Incorporated in Delaware
I.R.S. Employer Identification No. 22-2584333
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No _
The number of shares outstanding of the issuer's common stock as of July 31,
1995 was 12,844,174.
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<PAGE>
THE GENLYTE GROUP INCORPORATED
FORM 10-Q
FOR THE QUARTER ENDED JULY 1, 1995
INDEX
PART I. FINANCIAL INFORMATION
Consolidated Statements of Income for the three
months ended July 1, 1995 and July 2, 1994.........................1
Consolidated Statements of Income for the six
months ended July 1, 1995 and July 2, 1994.........................2
Consolidated Balance Sheets as of July 1, 1995
and December 31, 1994............................................. 3
Consolidated Statements of Cash Flows for the six
months ended July 1, 1995 and July 2, 1994........................ 4
Notes to Consolidated Interim Financial Statements. ................ 5
Management's Discussion and Analysis of
Financial Condition and Results of Operations..................... 6
PART II. OTHER INFORMATION................................................... 8
Calculation of Primary and Fully Diluted
Earnings Per Share for the three months
ended July 1, 1995 and July 2, 1994............................... 9
Calculation of Primary and Fully Diluted
Earnings Per Share for the six months
ended July 1, 1995 and July 2, 1994............................... 10
Signature........................................................... 11
<PAGE>
PART 1 FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JULY 1, 1995 AND
JULY 2, 1994
(000'S OMITTED, EXCEPT PER SHARE DATA)
(Unaudited)
1995 1994
--------- ---------
Net Sales .................................. $ 110,967 $ 108,829
Cost of Sales ............................ 77,519 75,905
Gross Profit ............................... 33,448 32,924
Selling and Administrative Expenses ...... 26,840 27,093
Operating Profit ........................... 6,608 5,831
Corporate Expenses ....................... 1,122 1,193
Interest Expense, net .................... 2,129 1,858
Income Before Income Taxes ................. 3,357 2,780
Provision for Income Taxes ............... 1,446 1,202
Net Income ................................. $ 1,911 $ 1,578
Earnings per Share ......................... $ .15 $ .12
The accompanying notes are an integral part of these consolidated
financial statements.
1
<PAGE>
PART 1 FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JULY 1, 1995 AND JULY 2, 1994
(000'S OMITTED, EXCEPT PER SHARE DATA)
(Unaudited)
1995 1994
--------- ---------
Net Sales ................................ $ 221,205 $ 209,100
Cost of Sales .......................... 154,938 145,306
Gross Profit ............................. 66,267 63,794
Selling and Administrative Expenses .... 53,569 52,834
Operating Profit ......................... 12,698 10,960
Corporate Expenses ..................... 2,282 2,403
Interest Expense, net .................. 4,216 3,488
Income Before Incomeaxes ................. 6,200 5,069
Provision for Income Taxes ............. 2,667 2,227
Net Income ............................... $ 3,533 $ 2,842
Earnings per Share ....................... $ .28 $ .22
The accompanying notes are an integral part of these consolidated
financial statements.
2
<PAGE>
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF JULY 1, 1995 AND DECEMBER 31, 1994
(000'S OMITTED)
<TABLE>
<CAPTION>
(unaudited)
7/1/95 12/31/94
------- --------
<S> <C> <C>
ASSETS:
Current Assets:
Cash and cash equivalents .......................................................... $ 1,959 $ 3,240
Accounts receivable, less allowances for
doubtful accounts of $4,304 and $3,551, respectively ............................. 67,474 65,486
Inventories:
Raw materials and supplies ....................................................... 27,757 29,051
Work in progress ................................................................. 9,745 9,683
Finished goods ................................................................... 47,340 45,604
Total Inventories ................................................................ 84,842 84,338
Other current assets ............................................................... 10,467 7,904
Total current assets ............................................................. 164,742 160,968
Property, plant and equipment, at cost ............................................... 225,894 220,853
Less: accumulated depreciation and amortization on plant and equipment .............. 159,291 151,958
Net property, plant and equipment ................................................ 66,603 68,895
Cost in excess of net assets of purchased businesses ................................. 12,104 12,183
Other assets ......................................................................... 3,292 1,768
TOTAL ASSETS ......................................................................... $246,741 $243,814
LIABILITIES & STOCKHOLDERS' INVESTMENT:
Current Liabilities:
Short-term borrowings .............................................................. $ 0 $ 1,050
Current maturities of long-term debt ............................................... 47 45
Accounts payable ................................................................... 34,805 39,927
Accrued expenses ................................................................... 28,356 29,596
Total current liabilities ........................................................ 63,208 70,618
Long-term debt ....................................................................... 92,073 88,952
Deferred income taxes ................................................................ 5,791 5,781
Other liabilities .................................................................... 16,851 13,657
Total liabilities ................................................................ $177,923 $179,008
Stockholders' Investment:
Common stock ....................................................................... 128 128
Paid-in capital .................................................................... 9,931 9,881
Foreign currency translation adjustment ............................................ (2,157) (2,586)
Retained earnings .................................................................. 60,916 57,383
Total stockholders' investment ................................................... 68,818 64,806
TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT ....................................... $246,741 $243,814
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
3
<PAGE>
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JULY 1, 1995 AND JULY 2, 1994
(000'S OMITTED) (Unaudited)
<TABLE>
<CAPTION>
1995 1994
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income ........................................................................ $ 3,533 $ 2,842
Adjustments to reconcile net income to net cash
flows provided (used) by operating activities:
Depreciation and amortization ................................................. 7,535 8,154
(Increase) decrease in:
Accounts receivable ......................................................... (1,988) (10,905)
Inventories ................................................................. (504) (2,889)
Other current assets ........................................................ (2,563) (1,410)
Other assets ................................................................ (1,647) (252)
Increase (decrease) in:
Accounts payable and accrued expenses ....................................... (6,362) 2,771
Other liabilities ........................................................... 3,194 567
Deferred income Taxes ....................................................... 10 (25)
All other, net ................................................................ 0 72
Net cash flows provided (used) by operating
activities ...................................................................... 1,208 (1,075)
CASH FLOWS FROM FINANCING ACTIVITIES:
Options exercised ................................................................. 50 0
Increase in debt to outsiders ..................................................... 2,073 5,560
Net cash flows provided from financing
activities ...................................................................... 2,123 5,560
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of plant and equipment ................................................... (5,201) (4,845)
Disposal of plant and equipment ................................................... 666 0
Net cash flows provided (used) in investing
activities ...................................................................... (4,535) (4,845)
EFFECT OF EXCHANGE RATE CHANGES ..................................................... (77) (342)
Net increase/(decrease) in cash and cash
equivalents ..................................................................... (1,281) (702)
Cash and cash equivalents at beginning of year .................................... 3,240 3,319
Cash and cash equivalents at end of period ........................................ $ 1,959 $ 2,617
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION - CASH PAID DURING THE SIX
MONTH PERIOD FOR:
Interest ........................................................................ $ 3,957 $ 3,743
Income taxes .................................................................... $ 3,394 $3,297
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
AS OF JULY 1, 1995
(Unaudited)
1. Accounting Policies
The consolidated financial statements included in this report were
prepared in conformity with the accounting standards set forth in
Accounting Principles Board Opinion No. 28, "Interim Financial
Reporting", as amended, and the rules and regulations of the Securities
and Exchange Commission related to interim reporting. During the
periods shown, there were no changes in accounting principles or
practices from those applied in prior periods.
2. Consolidated Statement of Stockholders' Investment ($ in 000's):
Foreign
Additional Currency
Common Paid-in Translation Retained
Stock Capital Adjustment Earnings
------- ---------- ----------- --------
Balance, December 31, 1994 .... $ 128 $ 9,881 $ (2,586) $57,383
Net Income .................... - - - 3,533
Options Exercised ............. - 50 - -
Treasury Stock purchased ...... - - - -
Translation Adjustments ....... - - 429 -
Balance, July 1, 1995 ......... $ 128 $ 9,931 $ (2,157) $60,916
5
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Management's Discussion and Analysis
RESULTS OF OPERATIONS:
Comparison of Second Quarter 1995 to Second Quarter 1994
Genlyte's net sales for the second quarter of 1995 were $111.0 million, a $2.1
million, or 2 percent increase from the second quarter of 1994. Net income
increased $.3 million from the second quarter of 1994 to $1.9 million and
earnings per share increased 25 percent from $.12 to $.15 on a comparable number
of outstanding shares. The Canadian exchange rate was comparable to second
quarter of 1994.
Selling and administrative expenses for the second quarter 1995 improved by
seven tenths of 1 percent as a percent of sales from the second quarter of 1994.
Headcount and other cost reductions implemented during 1994, coupled with the
reduction of DFT transition expenses, account for the improvement.
Operating profit increased in the second quarter of 1995 to $6.6 million, a 13
percent improvement from the second quarter of 1994. The improvement in
operating profit was attributable to an increased sales volume of higher margin
products, principally in the outdoor divisions, and improvements in
manufacturing productivity.
For the quarter ended July 1, 1995, interest expense amounted to $2.1 million,
representing an increase of $.3 million, or 14.6 percent, over the comparable
quarter of 1994. This increase was completely attributable to the rising
interest rates, as average borrowings for the period were lower than the
corresponding period of 1994.
The second quarter 1995 effective tax rate remained constant at 43 percent from
second quarter 1994.
Comparison of First Six Months 1995 to First Six Months 1994
During the first six months of 1995, Genlyte's net sales increased $12.1
million, or 5.8 percent, to $221.2 million as compared to $209.1 million during
the first six months of 1994. Net income increased 24.3 percent to $3.5 million
from $2.8 million in 1994 and earnings per share increased 27.3 percent from
$.22 to $.28 on a comparable number of outstanding shares. All divisions
experienced sales growth from the first six months of 1994 except the DFT
division. In addition, the Canadian exchange rate decline of approximately 1.5
points from 1994 to 1995 reduced Genlyte's recorded sales by $.7 million,
despite sales growth in the Company's Canadian operations.
6
<PAGE>
Selling and administrative expenses for the first six months of 1995 were $53.6
million, 24.2 percent of sales, as compared to $52.8 million, or 25.3 percent of
sales in 1994. Variable expenses necessary to support the increase in sales
volume were slightly offset by headcount reductions and the reduction of DFT
transition expenses.
Operating profit increased in the first six months of 1995 to $12.7 million, a
15.9 percent improvement from the comparable period of 1994. Lightolier U.S.
realized an increase in operating profit as compared to the prior year due to
increased sales of higher margin products and ongoing facility rationalizations.
DFT experienced a decrease in operating profit, primarily due to lower sales
volume and additions to bad debt and inventory reserves. Stonco, Wide-Lite,
Hadco and Canlyte each experienced volume increases, favorable operating
variances, and effective cost reductions which resulted in additional operating
profit.
For the six month period ended July 1, 1995, interest expense increased to $4.2
million from 3.5 million for the comparable period of 1994. The increase was due
entirely to rising interest rates, as average borrowings for the period were
lower than the corresponding period of 1994.
In the first half of 1995 the effective tax rate decreased to 43 percent from 44
percent in the first half of 1994.
Financial Condition
Working capital for the first half of 1995 improved as a percent of sales (last
three months annualized) from the first half of 1994. Accounts receivable at
15.2 percent of sales, accounts payable at 7.8 percent and inventories at 19.1
percent were lower than 1994's 16.1 percent of sales, 8.3 percent and 19.9
percent, respectively. Debt increased $2.1 million, or 2.3 percent, primarily to
fund the growth in sales.
Liquidity and Capital Resources
In the fourth quarter 1992, the Company recorded a pre-tax charge of $6.2
million to establish a reserve for the costs associated with the Company's
decision to consolidate facilities and improve the manufacturing processes in
its remaining plants. The Company's facility rationalization plan included:
relocation of DFT's leased manufacturing and distribution operations in
Cleveland, Ohio to an existing, owned facility in Elgin, Illinois; closure of
its Prodel operations in Quebec City, Canada, and sale of the existing building;
downsizing of manufacturing and distribution facilities in Edison, New Jersey
and Compton, California; and the transfer of certain Lightolier headquarters
staff to Lightolier's expanded Fall River, Massachusetts facility. The Company
intended to complete all aspects of the facility rationalization plan during
1993 but union negotiations and construction at Fall River facility created
significant delays in implementation. As a result, charges against the reserve
in 1993 totaled only $.7 million of which $.4 million required cash. During 1994
7
<PAGE>
the Company charged an additional $4.6 million against the reserve, using cash
of $4.1 million. During 1995 the remaining $.9 million of the reserve will be
utilized. Charges against the reserve through the second quarter of 1995 are
summarized in the following table:
Category Charges
Personnel Relocation Costs .......................... $3,072
Severance Costs ..................................... 1,877
Inventory Write-down ................................ 407
Plant and Equipment Write-downs ..................... 465
Other Costs ......................................... 50
Total ............................................. $5,871
Location Charges
Elgin ............................................... $2,600
Headquarters ........................................ 1,959
Prodel .............................................. 1,312
Total ............................................. $5,871
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. However, the facility rationalization plan will
continue the Company's ability to develop and deliver market-responsive
products, shorten new product lead times, improve customer service, and become a
low-cost producer.
The Company expects funds generated from operations to continue to be sufficient
to fulfill anticipated requirements for capital expenditures and working capital
and to service debt requirements.
8
<PAGE>
PART II OTHER INFORMATION
ITEM 1. Legal Proceedings
Genlyte has been named as one of a number of corporate and individual
defendants in an adversary proceeding filed on June 8, 1995, arising out of the
Chapter 11 bankruptcy filing of Keene Corporation ("Keene"). Except for the last
count, as discussed below, the claims and causes of action are substantially the
same as were brought against Genlyte in the U.S. District Courts in New York in
August 1993, which cases remain stayed due to the pendency of Keene's
bankruptcy. The new complaint is being prosecuted by the Official Committee of
Unsecured Creditors of Keene, seeking from the defendants, collectively, damages
in excess of $700 million, 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 a
predecessor of Genlyte in 1984 at less than fair value, while both Keene and
Genlyte were wholly-owned subsidiaries of Bairnco Corporation. The complaint
also challenges Bairnco's spin-off of Genlyte in August 1988. Other allegations
are that Genlyte, as well as the other corporate defendants, are liable as
corporate successors to Keene. The complaint fails to specify the amount of
damages sought against Genlyte. The complaint also alleges a violation of the
Racketeer Influenced and Corrupt Organizations Act.
On July 17, 1995, the Bankruptcy Court of the Southern District of New York
stayed the adversary proceeding until September 30, 1995. Genlyte is precluded
from answering the complaint or otherwise moving to dismiss the action prior to
that date. Genlyte believes that it has meritorious defenses to the adversary
proceeding and will defend said action vigorously.
ITEM 2. Changes in Securities
Not Applicable.
ITEM 3. Defaults Upon Senior Securities
Not Applicable.
ITEM 4. Submission of Matters to a Vote of Security Holders
Not Applicable.
ITEM 5. Other Information
Not Applicable.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11: Calculation of Primary and Fully
Diluted Earnings Per Share
Exhibit 27: Requirements for the Format and Input
of Financial Data Schedules
(b) Reports on Form 8-K - None
9
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
Genlyte has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE GENLYTE GROUP INCORPORATED
(Registrant)
Date: August 14, 1995 /s/ Neil M. Bardach
-------------------------------
Neil M. Bardach
Vice President Finance, CFO, and Treasurer
Exhibit 11
THE GENLYTE GROUP INCORPORATED
CALCULATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE
FOR THE THREE MONTHS ENDED JULY 1, 1995 AND JULY 2, 1994
(000'S OMITTED, EXCEPT PER SHARE DATA)
(Unaudited)
1995 1994
--------- ---------
PRIMARY EARNINGS PER SHARE:
Net Income ......................................... $ 1,911 $ 1,578
Average Common Shares Outstanding .................. 12,732 12,732
Common Shares Issuable in Respect to Common Stock
Equivalents, with a Dilutive Effect ............... 28 0
Total Common and Common Equivalent
Shares ........................................... 12,760 12,732
Primary Earnings per Share ......................... $ .15 $ .12
FULLY DILUTED EARNINGS PER SHARE:
Net Income Applicable to Common
Stock and Common Stock Equivalents ............... $ 1,911 $ 1,578
Total Common and Common Equivalent
Shares ........................................... 12,732 12,731
Additional Common Shares Assuming
Full Dilution .................................... 74 5
Total Common Shares Assuming
Full Dilution .................................... 12,806 12,736
Fully Diluted Earnings per Share ................... $ .15 $ .12
<PAGE>
Exhibit 11
THE GENLYTE GROUP INCORPORATED
CALCULATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE
FOR THE SIX MONTHS ENDED JULY 1, 1995 AND JULY 2, 1994
(000'S OMITTED, EXCEPT PER SHARE DATA)
(Unaudited)
1995 1994
--------- ---------
PRIMARY EARNINGS PER SHARE:
Net Income .......................................... $ 3,533 $ 2,842
Average Common Shares Outstanding ................... 12,732 12,732
Common Shares Issuable in Respect to Common Stock
Equivalents, with a Dilutive Effect ................ 15 0
Total Common and Common Equivalent
Shares ............................................ 12,747 12,732
Primary Earnings per Share .......................... $ .28 $ .22
FULLY DILUTED EARNINGS PER SHARE:
Net Income Applicable to Common
Stock and Common Stock Equivalents ................ $ 3,533 $ 2,842
Total Common and Common Equivalent
Shares ............................................ 12,732 12,731
Additional Common Shares Assuming
Full Dilution ..................................... 45 3
Total Common Shares Assuming
Full Dilution ..................................... 12,777 12,734
Fully Diluted Earnings per Share .................... $ .28 $ .22
<TABLE> <S> <C>
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<CIK> 0000833076
<NAME> Genlyte Group Inc.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-01-1995
<PERIOD-END> Jul-01-1995
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<RECEIVABLES> 67,474
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<COMMON> 128
0
0
<OTHER-SE> 68,690
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<TOTAL-REVENUES> 110,967
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<TOTAL-COSTS> 104,359
<OTHER-EXPENSES> 1,122
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