================================================================================
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 March 30, 1996
Commission File Number 0-16960
---------------
THE GENLYTE GROUP INCORPORATED
100 Lighting Way
Secaucus, N. J. 07096
(201) 864-3000
Incorporated in Delaware I.R.S. Employer
Identification No. 22-2584333
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No |_|
The number of shares outstanding of the issuer's common stock as of May 3, 1996
was 12,788,040.
================================================================================
<PAGE>
THE GENLYTE GROUP INCORPORATED
FORM 10-Q
FOR THE QUARTER ENDED MARCH 30, 1996
INDEX
PART I. FINANCIAL INFORMATION
Consolidated Statements of Income for the three
months ended March 30, 1996 and April 1, 1995................... 1
Consolidated Balance Sheets as of March 30, 1996
and December 31, 1995........................................... 2
Consolidated Statements of Cash Flows for the three
months ended March 30, 1996 and April 1, 1995 .................. 3
Notes to Consolidated Interim Financial Statements................ 4
Management's Discussion and Analysis of
Financial Condition and Results of Operations................... 5
PART II. OTHER INFORMATION
Item 1 Legal Proceedings......................................... 6
Item 6 Exhibits and Reports on Form 8-K.......................... 7
Signature ........................................................ 8
<PAGE>
PART 1 FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 30, 1996 AND APRIL 1, 1995
(000'S OMITTED, EXCEPT PER SHARE DATA)
(Unaudited)
1996 1995
================================================================================
Net Sales $ 108,662 $ 110,238
Cost of Sales 73,398 77,419
- --------------------------------------------------------------------------------
Gross Profit 35,264 32,819
Selling and Administrative Expenses 29,688 27,889
- --------------------------------------------------------------------------------
Operating Profit 5,576 4,930
Interest Expense, net 1,553 2,087
- --------------------------------------------------------------------------------
Income Before Income Taxes 4,023 2,843
Provision for Income Taxes 1,730 1,221
- --------------------------------------------------------------------------------
Net Income $ 2,293 $ 1,622
- --------------------------------------------------------------------------------
Earnings per Share $ .18 $ .13
================================================================================
The accompanying notes are an integral part of these consolidated
financial statements.
1
<PAGE>
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 30, 1996 AND DECEMBER 31, 1995
(000'S OMITTED)
================================================================================
(unaudited)
3/30/96 12/31/95
- --------------------------------------------------------------------------------
ASSETS:
- --------------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents $ 974 $ 263
Accounts receivable, less allowances for doubtful
accounts of $5,527 and $5,302, respectively 69,303 62,024
Inventories:
Raw materials and supplies 26,391 24,593
Work in progress 10,229 11,360
Finished goods 46,950 46,511
- --------------------------------------------------------------------------------
Total Inventories 83,570 82,464
- --------------------------------------------------------------------------------
Other current assets 12,523 10,364
- --------------------------------------------------------------------------------
Total current assets 166,370 155,115
- --------------------------------------------------------------------------------
Property, plant and equipment, at cost 222,245 229,416
Less: accumulated depreciation and amortization
on plant and equipment 159,748 165,267
- --------------------------------------------------------------------------------
Net property, plant and equipment 62,497 64,149
- --------------------------------------------------------------------------------
Cost in excess of net assets of purchased
businesses, net 11,959 12,026
Other assets 3,708 3,801
- --------------------------------------------------------------------------------
TOTAL ASSETS $ 244,534 $ 235,091
================================================================================
LIABILITIES & STOCKHOLDERS' INVESTMENT:
- --------------------------------------------------------------------------------
Current Liabilities:
Short term borrowings $ 2,211 $ 1,236
Current maturities of long-term debt 51 50
Accounts payable 35,989 38,795
Accrued expenses 31,266 35,208
- --------------------------------------------------------------------------------
Total current liabilities 69,517 75,289
- --------------------------------------------------------------------------------
Long-term debt 75,884 65,896
Deferred income taxes 4,861 4,662
Other liabilities 17,552 15,287
- --------------------------------------------------------------------------------
Total liabilities 167,814 161,134
- --------------------------------------------------------------------------------
Stockholders' Investment:
Common stock 130 129
Paid-in capital 10,565 10,135
Foreign currency translation adjustment (1,981) (2,020)
Retained earnings 68,006 65,713
- --------------------------------------------------------------------------------
Total stockholders' investment 76,720 73,957
- --------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT $ 244,534 $ 235,091
================================================================================
The accompanying notes are an integral part of these consolidated
financial statements.
2
<PAGE>
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 30, 1996 AND APRIL 1, 1995
(000'S OMITTED) (Unaudited)
================================================================================
1996 1995
- --------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
- --------------------------------------------------------------------------------
Net Income $ 2,293 $ 1,622
Adjustments to reconcile net income to net cash
flows provided (used) by operating activities:
Depreciation and amortization 3,228 3,894
(Increase) decrease in:
Accounts receivable (7,279) (855)
Inventories (1,106) (1,812)
Other current assets (2,159) 254
Other assets 32 132
Increase (decrease) in:
Accounts payable and accrued expenses (6,748) (7,950)
Other liabilities 2,265 328
Deferred income taxes 199 0
All other, net 0 (66)
- --------------------------------------------------------------------------------
Net cash flows used by operating activities (9,275) (4,453)
- --------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
- --------------------------------------------------------------------------------
Purchase of plant and equipment (1,448) (2,682)
Disposal of plant and equipment 0 17
- --------------------------------------------------------------------------------
Net cash flows used in investing activities (1,448) (2,665)
- --------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
- --------------------------------------------------------------------------------
Options exercised 431 0
Increase in debt to outsiders 10,964 5,274
Net cash flows provided in financing activities 11,395 5,274
- --------------------------------------------------------------------------------
EFFECT OF EXCHANGE RATE CHANGES 39 64
- --------------------------------------------------------------------------------
Net increase (decrease) in cash and cash
equivalents 711 (1,780)
Cash and cash equivalents at beginning of year 263 3,240
- --------------------------------------------------------------------------------
Cash and cash equivalents at end of quarter $ 974 $ 1,460
- --------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION - CASH
PAID DURING THE THREE MONTH PERIOD FOR:
- --------------------------------------------------------------------------------
Interest $ 1,314 $ 1,886
- --------------------------------------------------------------------------------
Income taxes $ 1,408 $ 186
================================================================================
The accompanying notes are an integral part of these consolidated
financial statements.
3
<PAGE>
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
AS OF MARCH 30, 1996
(Unaudited)
1. Basis of Presentation
The financial information included herein is unaudited, however, such
information reflects all adjustments (consisting solely of normal recurring
adjustments) which are, in the opinion of management, necessary for a fair
statement of results for the interim periods.
The results for interim periods are not necessarily indicative of the
results to be expected for the full year.
2. Consolidated Statement of Stockholders' Investment ($ in 000's):
================================================================================
Foreign
Additional Currency
Common Paid-in Translation Retained
Stock Capital Adjustment Earnings
- --------------------------------------------------------------------------------
Balance, December 31, 1995 $ 129 $ 10,135 $ (2,020) $ 65,713
- --------------------------------------------------------------------------------
Net Income - - - 2,293
- --------------------------------------------------------------------------------
Options Exercised 1 430 - -
- --------------------------------------------------------------------------------
Translation Adjustments - - 39 -
- --------------------------------------------------------------------------------
Balance, March 30, 1996 $ 130 $ 10,565 $ (1,981) $ 68,006
================================================================================
4
<PAGE>
Management's Discussion and Analysis
Comparison of First Quarter 1996 to First Quarter 1995
Net sales for the first quarter of 1996 decreased $1.6 million, or 1.4 percent
from the same quarter of 1995. Net income increased 41.4 percent to $2.3 million
from $1.6 million in 1995 and earnings per share increased 38.5 percent from
$.13 to $.18.
Cost of sales for the first quarter of 1996 was at 67.6 percent of sales,
compared to 70.2 percent of sales from the comparable period reflecting a
continued reduction in excess capacity. Selling, general, and administrative
expenses for first quarter 1996 as a percent of sales was 27.3 percent, as
compared to 25.3 percent during the first quarter of 1995.
Operating profit increased in the first quarter of 1996 to $5.6 million, a 13.1
percent improvement from the first quarter of 1995 primarily due to continuous
improvements in product mix and excess capacity reduction.
Interest expense decreased $.5 million from first quarter of 1995 due to lower
average borrowings. The effective tax rate was 43.0 percent for the first
quarter of 1996 and 1995.
Financial Condition
Working capital for the first quarter of 1996 was at 22.3 percent of sales,
compared to 22.6 percent of sales in the first quarter of 1995. Accounts
receivable at 15.9 percent of sales showed slight deterioration while accounts
payable at 8.3 percent of sales and inventory levels at 19.2 percent of sales
were virtually unchanged.
Long-term debt increased by $10.0 million, or 15.2 percent from year-end 1995,
primarily to fund working capital needs.
5
<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 (the "Committee"), 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 March 11, 1996, the Bankruptcy Court of the Southern District of
New York approved a Stipulation of Settlement between Keene, the
Committee, and certain individual and corporate defendants, including
Genlyte, which inter alia stayed the adversary proceeding until 71
days following confirmation of Keene's Plan of Reorganization, which
stay will end not earlier than August 22, 1996, consensually provided
for removal of the adversary proceeding from the bankruptcy court to
the Federal District Court for the Southern District of New York,
included Genlyte and other defendants within the protection of two
injunctions which are expected to preclude the claims brought within
the adversary proceeding from being asserted in any other suit or
proceeding in the future, including a permanent stay of the 1993
district court actions, and provided that Genlyte's indemnification
claims against Keene arising out of the 1984 transaction could be
asserted by way of set-off against any affirmative recovery from
Genlyte. In the stipulation, Genlyte waived any right to an
affirmative recovery on such indemnification claims against Keene
within the bankruptcy proceeding.
Genlyte is precluded from answering the complaint or otherwise moving
to dismiss the action while the stay is in effect. Genlyte believes
that it has meritorious defenses to the adversary proceeding and will
defend said action vigorously.
6
<PAGE>
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
7
<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)
/s/ Neil M. Bardach
Date: 5/15/96 -----------------------------------
Neil M. Bardach
VP Finance -- CFO & Treasurer
8
Exhibit 11
THE GENLYTE GROUP INCORPORATED
CALCULATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE
FOR THE THREE MONTHS ENDED MARCH 30, 1996 AND APRIL 1, 1995
(000'S OMITTED, EXCEPT PER SHARE DATA)
(Unaudited)
================================================================================
1996 1995
================================================================================
PRIMARY EARNINGS PER SHARE:
- --------------------------------------------------------------------------------
Net Income $ 2,293 $ 1,622
- --------------------------------------------------------------------------------
Average Common Shares Outstanding 12,869 12,732
- --------------------------------------------------------------------------------
Common Shares Issuable in Respect to
Common Stock Equivalents, with a Dilutive
Effect 0 0
- --------------------------------------------------------------------------------
Total Common and Common Equivalent
Shares 12,869 12,732
================================================================================
Primary Earnings per Share $ .18 $ .13
================================================================================
================================================================================
FULLY DILUTED EARNINGS PER
SHARE:
- --------------------------------------------------------------------------------
Net Income Applicable to Common
Stock and Common Stock Equivalents 2,293 1,622
================================================================================
Total Common and Common Equivalent
Shares 12,869 12,732
- --------------------------------------------------------------------------------
Additional Common Shares Assuming
Full Dilution 39 1
- --------------------------------------------------------------------------------
Total Common Shares Assuming
Full Dilution 12,908 12,733
================================================================================
Fully Diluted Earnings per Share $ .18 $ .13
================================================================================
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 974
<SECURITIES> 0
<RECEIVABLES> 69,303
<ALLOWANCES> 5,527
<INVENTORY> 83,570
<CURRENT-ASSETS> 166,370
<PP&E> 222,245
<DEPRECIATION> 159,748
<TOTAL-ASSETS> 244,534
<CURRENT-LIABILITIES> 69,517
<BONDS> 75,884
0
0
<COMMON> 130
<OTHER-SE> 76,590
<TOTAL-LIABILITY-AND-EQUITY> 244,534
<SALES> 108,662
<TOTAL-REVENUES> 108,662
<CGS> 73,398
<TOTAL-COSTS> 103,086
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,553
<INCOME-PRETAX> 4,023
<INCOME-TAX> 1,730
<INCOME-CONTINUING> 2,293
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,293
<EPS-PRIMARY> 0.18
<EPS-DILUTED> 0.18
</TABLE>
