================================================================================
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 29, 1997
Commission File Number 0-16960
---------------
THE GENLYTE GROUP INCORPORATED
AND SUBSIDIARIES
2345 VAUXHALL ROAD
UNION, N. J. 07083-1948
(908) 964-7000
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 MARCH 28,
1997 WAS 13,135,649.
================================================================================
<PAGE>
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTER ENDED MARCH 29, 1997
INDEX
PART I. FINANCIAL INFORMATION
Consolidated Statements of Income for the three
months ended March 29, 1997 and March 30, 1996.................1
Consolidated Balance Sheets as of
March 29, 1997 and December 31, 1996...........................2
Consolidated Statements of Cash Flows for the three
months ended March 29, 1997 and March 30, 1996.................3
Notes to Consolidated Interim Financial Statements. ............4
Management's Discussion and Analysis of
Results of Operations and Financial Condition .................5
PART II. OTHER INFORMATION
Item 1 Legal Proceedings.......................................6
Item 6 Exhibits and Reports on Form 8-K........................6
Signature.......................................................7
<PAGE>
PART 1 FINANCIAL INFORMATION
---------------------
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 29, 1997 AND MARCH 30, 1996
(000'S OMITTED, EXCEPT PER SHARE DATA)
(Unaudited)
1997 1996
- --------------------------------------------------------------------------------
Net Sales $ 113,298 $ 108,662
Cost of Sales 75,059 73,398
- --------------------------------------------------------------------------------
Gross Profit 38,239 35,264
Selling and Administrative Expenses 31,135 29,688
- --------------------------------------------------------------------------------
Operating Profit 7,104 5,576
Interest Expense, net 971 1,553
- --------------------------------------------------------------------------------
Income Before Income Taxes 6,133 4,023
Provision for Income Taxes 2,639 1,730
- --------------------------------------------------------------------------------
Net Income $ 3,494 $ 2,293
- --------------------------------------------------------------------------------
Earnings per Share $ 0.26 $ 0.18
================================================================================
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 29, 1997 AND DECEMBER 31, 1996
(000'S OMITTED)
<TABLE>
<CAPTION>
======================================================================================================
(unaudited)
3/29/97 12/31/96
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Current Assets:
Cash and Cash Equivalents $ 3,705 $ 2,895
Accounts Receivable, less allowance for doubtful
account of $6,310 and $8,222, respectively 68,862 65,036
Inventories
Raw materials and supplies 31,316 31,798
Work in process 6,920 6,429
Finished goods 45,827 42,772
- ------------------------------------------------------------------------------------------------------
Total Inventory 84,063 80,999
- ------------------------------------------------------------------------------------------------------
Other Current Assets 15,833 14,909
- ------------------------------------------------------------------------------------------------------
Total Current Assets 172,463 163,839
- ------------------------------------------------------------------------------------------------------
Property, Plant & Equipment 211,486 211,349
Less: accumulated depreciation and amortization
on plant and equipment 152,223 150,969
- ------------------------------------------------------------------------------------------------------
Net Property, Plant & Equipment 59,263 60,380
- ------------------------------------------------------------------------------------------------------
Cost in excess of net assets of purchased business 11,688 11,755
Other Assets 3,056 2,141
- ------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 246,470 $ 238,115
======================================================================================================
LIABILITIES & STOCKHOLDERS' INVESTMENT
Current Liabilities:
Short-Term Borrowings $ 6,880 $ -
Current Maturities of Long-term Debt 54 51
Accounts Payable 42,142 44,440
Accrued Expenses 41,637 47,982
- ------------------------------------------------------------------------------------------------------
Total Current Liabilities 90,713 92,473
- ------------------------------------------------------------------------------------------------------
Long-term Debt 47,830 41,847
Deferred Income Taxes 3,366 3,368
Other Liabilities 17,252 16,644
- ------------------------------------------------------------------------------------------------------
Total Liabilities 159,161 154,332
- ------------------------------------------------------------------------------------------------------
Stockholders' Investment
Common Stock 131 131
Paid-in Capital 11,315 11,124
Foreign Currency Translation (2,284) (2,125)
Retained Earnings 78,147 74,653
- ------------------------------------------------------------------------------------------------------
Total Stockholders' Investment 87,309 83,783
- ------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES & STOCKHOLDERS' INVESTMENT $ 246,470 $ 238,115
======================================================================================================
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
2
<PAGE>
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 29, 1997 AND MARCH 30, 1996
(000'S OMITTED) (Unaudited)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
1997 1996
- ---------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net Income $ 3,494 $ 2,293
Adjustments to reconcile net income to net cash
flows provided (used) by operating activities:
Depreciation and amortization 3,212 3,100
(Increase) decrease in:
Accounts receivable (3,826) (7,279)
Inventories (3,064) (1,106)
Other current assets (924) (2,159)
Other assets (848) 160
Increase (decrease) in:
Accounts payable and accrued expenses (8,643) (6,748)
Other liabilities 608 2,265
Deferred income taxes (2) 199
- ---------------------------------------------------------------------------------------
Net cash flows used by operating activities (9,993) (9,275)
- ---------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
- ---------------------------------------------------------------------------------------
Purchase of plant and equipment, net of disposal (2,095) (1,448)
- ---------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
- ---------------------------------------------------------------------------------------
Options exercised 191 431
Increase in debt to outsiders 12,866 10,964
- ---------------------------------------------------------------------------------------
Net cash flows provided from financing activities 13,057 11,395
- ---------------------------------------------------------------------------------------
EFFECT OF EXCHANGE RATE CHANGES (159) 39
- ---------------------------------------------------------------------------------------
Net increase in cash and cash equivalents 810 711
Cash and cash equivalents at beginning of year 2,895 263
- ---------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 3,705 $ 974
- ---------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
- CASH PAID DURING THE THREE MONTH PERIOD FOR:
- ---------------------------------------------------------------------------------------
Interest $ 676 1,314
- ---------------------------------------------------------------------------------------
Income taxes $ 2,878 $ 1,408
=======================================================================================
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
3
<PAGE>
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
AS OF MARCH 29, 1997
(Unaudited)
1. Basis of Presentation
The financial information included 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 of operations for the three month period ended March 29,
1997 are not necessarily indicative of the results to be expected for
the full year.
2. In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings Per
Share" ("SFAS No. 128"). Under SFAS No. 128, primary earnings per share
("Primary EPS") will be replaced by basic earnings per share ("Basic
EPS"), and fully diluted earnings per share ("Fully Diluted EPS") will
be replaced with diluted earnings per share ("Diluted EPS"). Basic EPS
differs from Primary EPS in that it only includes the weighted average
impact of outstanding shares of the Company's Common Stock. Diluted EPS
is substantially similar to Fully Diluted EPS as previously reported.
The provisions of SFAS No. 128 will result in the retroactive
restatement of previously reported Primary EPS and Fully Diluted EPS
figures, but SFAS No. 128 prohibits such restatement prior to December
31, 1997. Based on the Company's computations, the adoption of SFAS No.
128 is not expected to impact earnings per share amounts reported
during the current quarter or any recent prior period.
4
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
- ------------------------------------
RESULTS OF OPERATIONS:
- ----------------------
COMPARISON OF FIRST QUARTER 1997 TO FIRST QUARTER 1996
- ------------------------------------------------------
Genlyte's net sales for the first quarter of 1997 were $113.3 million, a $4.6
million, or 4.3 percent increase from the first quarter of 1996. Led by outdoor
products, each of Genlyte's major product lines grew during the first quarter.
Net income increased $1.2 million from the first quarter of 1996 to $3.5 million
and earnings per share increased 44.4 percent from $.18 to $.26.
Cost of sales for the first quarter of 1997, when compared to the first quarter
of 1996, decreased to 66.3 percent of sales from 67.6 percent as the company
improved its product mix and continued to realize the benefits of its cost
containment measures. Selling, general and administrative expenses increased
slightly during the first quarter of 1997 to 27.5 percent of sales, up from 27.3
percent of sales for the comparable period in 1996. This increase primarily
resulted from our investment in new sales people and national and trade
advertising. Operating profit increased in the first quarter of 1997 to $7.1
million, a 27.4 percent improvement from the first quarter of 1996.
Interest expense amounted to $1.0 million, representing a decrease of $0.6
million, or 37.5 percent, over the comparable quarter of 1996. This decrease was
attributable to lower average borrowings.
The effective tax rate was approximately 43.0 percent for the first quarter of
1997 and 1996.
FINANCIAL CONDITION:
--------------------
Working capital for the end of first quarter of 1997 was 18.0 percent of sales
compared to 15.6 percent for the end of year 1996. This resulted from
inventories increasing due to seasonal requirements, partially offset by
increased payables.
Short term borrowings increased approximately $6.9 million and long-term debt
has increased $6.0 million since year end primarily due to seasonal cash usage.
The company believes that currently available cash, borrowing facilities, and
its ability to increase its credit line if needed, combined with internally
generated funds should be sufficient to fund capital expenditures as well as any
increase in working capital that would be required to accommodate a higher level
of business activity.
5
<PAGE>
PART II OTHER INFORMATION
-----------------
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"). The complaint is being
prosecuted by the Creditors' Trust created for the benefit of Keene's creditors
(the "Trust"), 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 ("Bairnco"). 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 April 7, 1997, the case was removed to the Federal District Court of the
Southern District of New York for all future proceedings. The parties intend to
request, prior to May 1, 1997, a mandatory pre-motion conference to be held
before the court to determine the timing for filing motions to dismiss the
complaint. Genlyte believes that it has meritorious defenses to the adversary
proceeding and will defend said action vigorously.
Additionally, the Company is defendant and/or potentially responsible party,
with other companies, in actions and proceedings under state and federal
environment 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.
ITEM 6. Exhibits and Reports on Form 8-K
(a). Exhibit 27: Requirements for the Format and Input of Financial
Data Schedules
(b) Reports on Form 8-K : None
6
<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: April 25, 1997 /S/ Neil M. Bardach
------------------------------
Neil M. Bardach
Vice President Finance
Chief Financial Officer & Treasurer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
\
<ARTICLE> 5
<LEGEND>
GENLYTE GROUP INC.
EXHIBIT 27 FINANCIAL DATA SCHEDULE
</LEGEND>
<CIK> 0000833076
<NAME> Genlyte Group Inc.
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-START> Jan-01-1997
<PERIOD-END> Mar-29-1997
<CASH> 3,705
<SECURITIES> 0
<RECEIVABLES> 68,862
<ALLOWANCES> 6,310
<INVENTORY> 84,063
<CURRENT-ASSETS> 172,463
<PP&E> 211,486
<DEPRECIATION> 152,223
<TOTAL-ASSETS> 246,470
<CURRENT-LIABILITIES> 90,713
<BONDS> 47,830
0
0
<COMMON> 131
<OTHER-SE> 87,178
<TOTAL-LIABILITY-AND-EQUITY> 246,470
<SALES> 113,298
<TOTAL-REVENUES> 113,298
<CGS> 75,059
<TOTAL-COSTS> 106,194
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 971
<INCOME-PRETAX> 6,133
<INCOME-TAX> 2,639
<INCOME-CONTINUING> 3,494
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,494
<EPS-PRIMARY> 0.26
<EPS-DILUTED> 0.26
</TABLE>
