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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 March 31, 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
May 4, 1994, was 10,054,845 shares.
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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
March 31
1994 1993
<S> <C> <C>
Net sales $109,391 $112,074
Cost of products sold 79,741 82,421
Gross profit 29,650 29,653
Other (income) expense:
Selling, general, and
administrative expenses 25,514 25,958
Interest expense 2,427 2,606
Other (129) (147)
Income before income taxes 1,838 1,236
Income tax provision 827 581
Net income $ 1,011 $ 655
Per Common Share amounts:
Net income per share $.10 $.07
Dividends declared per share $.10 $.10
Average number of shares outstanding 10,049,995 10,011,333
<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)
March 31 December 31
1994 1993*
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 4,565 $ 2,364
Accounts receivable, less allowance
(1994--$1,996; 1993--$1,763) 63,429 61,214
Inventories:
Finished products 32,755 33,374
Raw materials 26,347 26,969
Work in process 11,983 11,821
71,085 72,164
Assets held for disposition 2,875 2,247
Deferred income taxes 7,114 7,810
Other current assets 8,168 7,031
Total current assets 157,236 152,830
Property, plant and equipment 146,378 146,923
Less accumulated depreciation and amortization 71,929 70,336
74,449 76,587
Intangible assets--less accumulated amortization 63,296 63,818
Other assets 9,566 9,525
$304,547 $302,760
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes payable $ 22,152 $ 15,870
Accounts payable 22,606 24,562
Other current liabilities 29,846 31,726
Current portion of long-term debt 9,714 2,206
Total current liabilities 84,318 74,364
Deferred income taxes 8,459 8,342
Long-term debt (less current portion) 79,824 87,509
Minimum pension liability 4,322 4,322
Other long-term liabilities 3,435 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--11,418,790;
1993--11,415,790 11,419 11,416
Capital surplus 117,291 117,264
Retained earnings 24,752 24,746
Minimum pension liability adjustment (3,241) (3,241)
Equity adjustment from translation (3,052) (2,156)
Less cost of treasury shares:
(1994 and 1993--1,366,695) (22,980) (22,980)
124,189 125,049
$304,547 $302,760
<FN>
*Derived from the audited December 31, 1993, consolidated balance sheet.
See notes to condensed consolidated financial statements.
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<TABLE>
<CAPTION>
THOMAS INDUSTRIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Dollars in Thousands)
Three Months Ended
March 31
1994 1993
<S> <C> <C>
1993 Cash flows from operating activities:
Net income $ 1,011 $ 655
Reconciliation of net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 4,022 4,238
Deferred income taxes 116 216
Provision for losses on accounts receivable 322 25
Changes in operating assets and liabilities,
net of effects of acquisitions and
dispositions:
Accounts receivable (3,013) (10,797)
Inventories (360) (5,501)
Other current assets 61 53
Accounts payable (1,724) 2,198
Accrued expenses and other liabilities (2,833) (2,213)
Other (128) 570
Net cash used in operating activities (2,526) (10,556)
Cash flows from investing activities:
Purchase of property, plant, and equipment (2,556) (3,659)
Proceeds from sale of property, plant, and
equipment 2,366 -0-
Net cash used in investing activities (190) (3,659)
Cash flows from financing activities:
Proceeds from short-term debt, net 6,282 13,176
Payments of long-term debt (247) (511)
Dividends paid (1,005) (1,001)
Other (113) 52
Net cash provided by financing activities 4,917 11,716
Increase (decrease) in cash and cash
equivalents 2,201 (2,499)
Cash and cash equivalents at beginning of quarter 2,364 3,539
Cash and cash equivalents at end of quarter $ 4,565 $ 1,040
<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 three-month period ended March 31, 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. Management believes that these matters will be resolved with no
material adverse impact on the financial position of the Company.
Note C -- Divestiture
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. This division is reported as part of the "Other" group of
operations. The sale was essentially at book value with no reported gain or
loss.
Note D -- Subsequent Events
On April 20, 1994, the Company sold its Portland Willamette Division and
announced the planned sale of its Builders Brass Works Division. Portland
Willamette manufactures fireplace screens and related accessories. Builders
Brass Works manufactures architectural hardware and door controls. These
divisions are two of the operations grouped as "Other" for reporting purposes.
It is anticipated that these transactions will generate a pretax gain of
$4,175,000, and a net gain of $3,000,000, or $.30 per share, which will be
recorded in the second quarter.
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Item 2. Management's Discussion and Analysis
Net sales during the first quarter ended March 31, 1994, were 2% below
the first quarter 1993. Net sales for the Lighting Segment were down
10 percent from last year's first quarter, due in part to shipment
delays created by the inclement weather that affected much of the
country in the first two months of the year and to reduced order
volumes during the quarter. The Compressors and Vacuum Pumps Segment
experienced an 18% increase in net sales for the quarter over 1993 due
to the continuing success of new product applications and the strength
of existing product volume. Net sales from the three divisions
grouped as "Other" were down 14 percent during the 1994 first quarter
versus 1993 due partly to the sale as previously announced on March 4,
1994, of the Oliver-MacLeod Division and to lower unit volumes.
Net income for the first three months of 1994 increased to $1,011,000
compared to last year's first quarter net income of $655,000.
Operating income from the Compressor and Vacuum Pump Segment improved
35% over the 1993 first quarter, resulting from the higher sales
levels. The Lighting Segment operating results were below
expectations, due primarily to the lower sales levels and the
resulting pressure on pricing margins. The operating results of the
three operations comprising the "Other" group improved over last year
due to the reductions in selling, general, and administrative costs.
Cost of products sold improved to 72.9% of sales for the first quarter
1994 compared to 73.5% last year, as the higher proportion of sales
from the Compressors and Vacuum Pumps Segment to the total has
contributed to improved overall margins.
Selling, general, and administrative costs were lower for the first
three months versus 1993, while remaining essentially flat as a
percent of sales at 23.3% for 1994 compared to 23.2% during the first
quarter of 1993. SG&A costs for the Lighting Segment were down 1%
for the current quarter from last year's level, due primarily to
reduced selling costs on the lower sales. The Compressors and Vacuum
Pumps Segment costs increased 8% over the prior year in support of the
18% increase in sales for 1994, while these costs as a percent of
sales were 1% lower in 1994 for the Segment. SG&A expenses for the
"Other" group were 21% lower than 1993 levels, and 2% lower as a
percent of sales, due to the diligent efforts to reduce overhead costs
within these smaller operations.
Interest expense for the first three months of 1994 was 7% lower than
the comparable 1993 period, due in part to the benefit of lower short-
term rates in Europe and the effect of additional reduction of long-
term debt.
Working capital of $72,918,000 at March 31, 1994, was down from
$78,466,000 at December 31, 1993, due primarily to the reclassifica-
tion of $7.7 million of the long-term debt to current portion due in
January 1995. Accounts receivable levels have increased due to
seasonal factors over December 1993 but are 6% below March 31, 1993,
levels. Inventories have been reduced by 1.5% from December 1993
levels and are 8% below March 31, 1993. Notes payable to banks have
increased from the December 31, 1993, levels due to seasonal needs.
The current balance, however, is 16% below the outstanding balance at
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Item 2. Management's Discussion and Analysis -- Continued
March 31, 1993. The current ratio was 1.86 at March 31, 1994,
compared to 2.06 at December 31, 1993, again due primarily to the
additional long-term debt maturing in January 1995. 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 $9.6 million are not
restricted at March 31, 1994.
As of March 31, 1994, the Company had available credit of $67 million
with banks under short-term borrowing arrangements and a revolving
line of credit, $49 million of which was available as of March 31,
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
(4) Note Agreement dated January 19, 1990, by and among the
Company and its Day-Brite Lighting, Inc., subsidiary,
Allstate Life Insurance Company, and other investors, as
filed as Exhibit 4 to Form 10-K filed March 22, 1990,
herein incorporated by reference.
Copies of debt instruments for which the related debt is
less than 10 percent of consolidated total assets will be
furnished to the Commission upon request.
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: May 5, 1994
