<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 12 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from______________________to_______________________
Commission File Number 1-5426.
THOMAS INDUSTRIES INC.
(Exact name of registrant as specified in its charter)
Delaware 61-0505332
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4360 Brownsboro Road, Louisville, Kentucky 40207
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 502/893-4600
Not applicable
(Former name, former address, and former fiscal year, if changed since last
report.)
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 twelve 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 issuer's Common Stock, $1 par value, as of
November 4, 1994, was 10,067,678 shares.
Page 1 of 8
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
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<CAPTION>
THOMAS INDUSTRIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in Thousands Except Amounts Per Share)
Three Months Ended Nine Months Ended
September 30 September 30
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Net sales $119,035 $117,322 $345,714 $340,397
Cost of products sold 85,098 86,105 249,312 249,399
Gross profit 33,937 31,217 96,402 90,998
Other (income) expenses:
Selling, general, and
administrative expenses 26,435 25,785 78,311 76,975
Interest expense 2,291 2,586 7,069 7,802
Other (106) (103) (4,029) (325)
Income before income taxes 5,317 2,949 15,051 6,546
Income tax provision 2,497 1,397 6,174 3,164
Net income $ 2,820 $ 1,552 $ 8,877 $ 3,382
Per Common Share amounts:
Net income per share $.28 $.15 $.88 $.34
Dividends declared per share $.10 $.10 $.30 $.30
Average number of shares
outstanding 10,065,613 10,043,794 10,057,120 10,031,024
<FN>
See notes to condensed consolidated financial statements.
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<TABLE>
<CAPTION>
THOMAS INDUSTRIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
September 30 December 31
1994 1993*
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ASSETS
Current assets
Cash and cash equivalents $ 5,337 $ 2,364
Accounts receivable, less allowance
(1994--$1,938; 1993--$1,763) 69,505 61,214
Inventories:
Finished products 31,633 33,374
Raw materials 29,270 26,969
Work in process 10,702 11,821
71,605 72,164
Assets held for disposition 2,294 2,247
Deferred income taxes 6,451 7,031
Other current assets 7,453 7,810
Total current assets 162,645 152,830
Property, plant and equipment 149,186 146,923
Less accumulated depreciation and amortization 74,385 70,336
74,801 76,587
Intangible assets--less accumulated amortization 63,244 63,818
Other assets 12,784 9,525
Total assets $313,474 $302,760
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes payable $ 9,561 $ 15,870
Accounts payable 30,604 24,562
Other current liabilities 35,521 31,726
Current portion of long-term debt 9,243 2,206
Total current liabilities 84,929 74,364
Deferred income taxes 8,673 8,342
Long-term debt (less current portion) 79,921 87,509
Minimum pension liability 4,322 4,322
Other long-term liabilities 3,647 3,174
Shareholders' equity
Preferred Stock, $1 par value,
3,000,000 shares authorized--none issued
Common Stock, $1 par value
Shares authorized: 60,000,000
Shares issued: 1994--11,432,373;
1993--11,415,790 11,432 11,416
Capital surplus 117,415 117,264
Retained earnings 30,606 24,746
Minimum pension liability adjustment (3,241) (3,241)
Equity adjustment from translation (1,250) (2,156)
Less cost of treasury shares
(1994 and 1993--1,366,695) (22,980) (22,980)
131,982 125,049
Total liabilities and shareholders' equity $313,474 $302,760
<FN>
*Derived from the audited December 31, 1993, balance sheet.
See notes to condensed consolidated financial statements.
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<CAPTION>
THOMAS INDUSTRIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Dollars in Thousands)
Nine Months Ended
September 30
1994 1993
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Cash flows from operating activities:
Net income $ 8,877 $ 3,382
Reconciliation of net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 11,879 12,889
Deferred income taxes 330 109
Provision for losses on accounts receivable 797 (109)
(Gain) loss on asset disposal, net (4,044) 140
Changes in operating assets and liabilities
net of effect of divestitures:
Accounts receivable (11,418) (17,006)
Inventories (3,029) 618
Other current assets 2,250 (771)
Accounts payable 6,125 2,077
Accrued expenses and other liabilities 1,414 (1,163)
Other (109) 550
Net cash provided by operating activities 13,072 716
Cash flows from investing activities:
Purchases of property, plant, and equipment (11,723) (10,126)
Proceeds from sale of property, plant, and equipment,
and other assets 12,708 -0-
Net cash provided by (used in) investing activities 985 (10,126)
Cash flows from financing activities:
(Payments of) proceeds from short-term debt, net (7,326) 13,475
Payments of long-term debt (888) (1,645)
Dividends paid (3,015) (3,007)
Other 145 (282)
Net cash (used in) provided by financing activities (11,084) 8,541
Increase (decrease) in cash and cash equivalents 2,973 (869)
Cash and cash equivalents at beginning of year 2,364 3,539
Cash and cash equivalents at end of period $ 5,337 $ 2,670
<FN>
See notes to condensed consolidated financial statements.
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THOMAS INDUSTRIES INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note A -- Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial reporting and with the instructions to Form 10-Q and Article
10-01 of Regulation S-X. Accordingly, they do not include all the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
The results of operations for the nine-month period ended September 30, 1994,
are not necessarily indicative of the results that may be expected for the year
ending December 31, 1994. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included. For further
information, refer to the consolidated financial statements and footnotes
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1993.
Note B -- Contingencies
In the normal course of business, the Company and its subsidiaries are parties
to litigation; and when costs can be reasonably estimated, the Company records
appropriate liabilities for such matters.
Note C -- Divestitures
On March 4, 1994, the Company announced the sale of its Oliver-MacLeod Division
in Gravenhurst, Ontario, Canada, to Security Chimneys Ltd. of Laval, Quebec,
Canada. Oliver-MacLeod manufactures factory-built chimneys and zero clearance
fireplaces. No gain or loss resulted from the transaction.
On April 20, 1994, and May 27, 1994, respectively, the Company sold its
Portland Willamette and Builders Brass Works Divisions. Portland Willamette
manufactures fireplace screens and related accessories. Builders Brass Works
manufactures architectural hardware and door controls. These transactions
resulted in a pretax gain of $4,175,000 and a net gain of $3,000,000, or $.30
per share.
All three of these divested divisions were grouped as "Other" for reporting
purposes.
<PAGE> 6
Item 2. Management's Discussion and Analysis
Net sales during the third quarter ended September 30, 1994, increased
1% over the third quarter 1993 to $119.0 million. For the nine months
ended September 30, 1994, net sales were 2% higher than the same year-
to-date period for 1993. As of May 27, 1994, the Company completed
its divestment of businesses outside the two core business segments,
Lighting and Compressors & Vacuum Pumps. The sales and operating
income of these smaller businesses are not considered material to
current results or future trends. Net sales for the Lighting Segment
were up 4% for the third quarter over 1993 and are 1% higher than 1993
for the nine months to date, due to improved volume in both the U.S.
and Canadian lighting markets experienced over the second and third
quarters of 1994 after a slow first quarter. The Compressor & Vacuum
Pump Segment sales increased 12% and 15% for the 1994 third quarter
and year to date, respectively, versus 1993, as unit sales volume
continues to grow due to expanded applications of existing products as
well as newly developed products.
Net income for the 1994 third quarter, which includes a $.3 million
gain due to LIFO inventory reductions, increased to $2.8 million from
$1.6 million for 1993. Net income for the first nine months of 1994
rose to $8.9 million, which included a $3.0 million gain from the
divestitures mentioned above and a $.7 million gain from LIFO
inventory reductions. Exclusive of these gains, the year-to date net
income improved 53% over 1993, due primarily to the record sales and
earnings from the Compressor & Vacuum Pump Segment. Operating income
within the Lighting Segment also improved during the third quarter
over last year, as sales levels have increased over 1993. Year-to-
date 1994 operating results for the Lighting business were improved
over 1993, as sales levels have exceeded last year's second and third
quarters.
Cost of products sold as a percent of sales improved to 71.5% and
72.1% of sales for the third quarter and nine months to date,
respectively, for 1994 versus 73.4% and 73.3% for the comparable 1993
periods. This improvement is both due to the increasing mix of
Compressor & Vacuum Pump sales and margins to the total and to
improved margin levels within the Lighting Segment as a result of
continuing cost control and efficiency gains during 1994.
Selling, general, and administrative costs were just slightly higher
for the third quarter and nine months of 1994, at 22.2% and 22.7% of
sales, respectively, versus 22.0% and 22.6%, respectively, for the
1993 periods, due substantially to the relatively fixed nature of most
of these costs, with the exception of certain sales costs which are
more a function of sales volume.
Interest expense for the most recent quarter of 1994 was 11.4% below
1993, with the first nine months of 1994 down 9.4% compared to 1993
due in part to the lower level of borrowings and the benefit of lower
short-term interest rates in Europe.
Working capital of $77.7 million at September 30, 1994, is lower
compared to $78.5 million at December 31, 1993, due in large part to
the reclassification of $7.7 million of long-term debt to current
portion due in January 1995. Accounts receivable levels have
increased due to seasonal factors over December 1993 but are 5.6%
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Item 2. Management Discussion and Analysis--Continued
below September 30, 1993, levels due to the elimination of the
divested businesses noted above. Inventories at September 30, 1994,
have increased 4.5% and 8.2% over December 31, 1993, and September 30,
1993, respectively, after adjusting out the inventories of the
divested businesses from the prior balances, due substantially to the
increases necessary to support the growing Compressor & Vacuum Pump
businesses.
Notes payable to banks have decreased from the December 31, 1993,
levels due to improved cash flow and the proceeds from the
divestitures. The current ratio was 1.92 at September 30, 1994,
compared to 2.06 at December 31, 1993. Certain loan agreements of the
Company include restrictions on working capital, operating leases,
tangible net worth, and the payment of cash dividends and stock
distributions. Under the most restrictive of these arrangements,
retained earnings of $13.5 million are not restricted at September 30,
1994.
As of September 30, 1994, the Company had available credit of $68
million with banks under short-term borrowing arrangements and a
revolving line of credit, $60 million of which was available as of
September 30, 1994. Anticipated funds from operations, along with
available short-term credit and other resources, are expected to be
sufficient to meet cash requirements in the year ahead. Cash in
excess of operating requirements will continue to be invested in high
grade, short-term securities.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(27) Financial Data Schedule
(b) There have been no reports on Form 8-K filed during the quarter
for which this report on Form 10-Q is being filed.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THOMAS INDUSTRIES INC.
Registrant
/S/Phillip J. Stuecker
Phillip J. Stuecker, Vice President
and Chief Financial Officer
Date November 11, 1994
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EXHIBIT INDEX
No. Description
27 Financial Data Schedule
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[TYPE] EX-27
[DESCRIPTION] ART. 5 FDS FOR 3RD QUARTER 10-Q
[ARTICLE] 5
[LEGEND] This schedule contains first nine months summary information
extracted from the Thomas Industries Inc. 1994 Third Quarter
Form 10-Q and is qualified in its entirety by reference to
such Form 10-Q filing.
[MULTIPLIER] 1,000
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<S> <C>
[PERIOD-TYPE] 9-MOS
[FISCAL-YEAR-END] DEC-31-1994
[PERIOD-END] SEP-30-1994
[CASH] 5,337
[SECURITIES] 0
[RECEIVABLES] 71,443
[ALLOWANCES] 1,938
[INVENTORY] 71,605
[CURRENT-ASSETS] 162,645
[PP&E] 149,186
[DEPRECIATION] 74,385
[TOTAL-ASSETS] 313,474
[CURRENT-LIABILITIES] 84,929
[BONDS] 79,921
[COMMON] 11,432
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[OTHER-SE] 120,550
[TOTAL-LIABILITY-AND-EQUITY] 313,474
[SALES] 345,714
[TOTAL-REVENUES] 345,714
[CGS] 249,312
[TOTAL-COSTS] 249,312
[OTHER-EXPENSES] 73,485
[LOSS-PROVISION] 797
[INTEREST-EXPENSE] 7,069
[INCOME-PRETAX] 15,051
[INCOME-TAX] 6,174
[INCOME-CONTINUING] 8,877
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 8,877
[EPS-PRIMARY] .88
(EPS-DILUTED> .88
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