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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 June 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
August 5, 1994, was 10,065,678 shares.
Page 1 of 8
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
<TABLE>
<CAPTION>
THOMAS INDUSTRIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in Thousands Except Amounts Per Share)
Three Months Ended Six Months Ended
June 30 June 30
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Net sales $117,288 $111,001 $226,679 $223,075
Cost of products sold 84,473 80,873 164,214 163,294
Gross profit 32,815 30,128 62,465 59,781
Other (income) expenses:
Selling, general, and
administrative expenses 26,362 25,232 51,876 51,190
Interest expense 2,351 2,610 4,778 5,216
Other (3,794) (75) (3,923) (222)
Income before income taxes 7,896 2,361 9,734 3,597
Income tax provision 2,850 1,186 3,677 1,767
Net income $ 5,046 $ 1,175 $ 6,057 $ 1,830
Per Common Share amounts:
Net income per share $.50 $.12 $.60 $.18
Dividends declared per share $.10 $.10 $.20 $.20
Average number of shares
outstanding 10,055,580 10,037,590 10,052,803 10,024,534
<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)
June 30 December 3
1994 1993*
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 3,829 $ 2,364
Accounts receivable, less allowance
(1994--$1,944; 1993--$1,763) 67,591 61,214
Inventories:
Finished products 31,378 33,374
Raw materials 25,032 26,969
Work in process 11,129 11,821
67,539 72,164
Assets held for disposition 2,250 2,247
Deferred income taxes 5,841 7,031
Other current assets 8,195 7,810
Total current assets 155,245 152,830
Property, plant and equipment 144,416 146,923
Less accumulated depreciation and amortization 71,026 70,336
73,390 76,587
Intangible assets--less accumulated amortization 63,378 63,818
Other assets 12,521 9,525
Total assets $304,534 $302,760
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes payable $ 10,399 $ 15,870
Accounts payable 24,420 24,562
Other current liabilities 34,717 31,726
Current portion of long-term debt 9,526 2,206
Total current liabilities 79,062 74,364
Deferred income taxes 8,588 8,342
Long-term debt (less current portion) 79,907 87,509
Minimum pension liability 4,322 4,322
Other long-term liabilities 3,473 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--11,431,873;
1993--11,415,790 11,432 11,416
Capital surplus 117,410 117,264
Retained earnings 28,792 24,746
Minimum pension liability adjustment (3,241) (3,241)
Equity adjustment from translation (2,231) (2,156)
Less cost of treasury shares
(1994 and 1993--1,366,695) (22,980) (22,980)
129,182 125,049
Total liabilities and shareholders' equity $304,534 $302,760
<FN>
*Derived from the audited December 31, 1993, balance sheet.
See notes to condensed consolidated financial statements.
</TABLE>
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<TABLE>
<CAPTION>
THOMAS INDUSTRIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Dollars in Thousands)
Six Months Ended
June 30
1994 1993
<S> <C> <C>
Cash flows from operating activities:
Net income $ 6,057 $ 1,830
Reconciliation of net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 7,938 8,644
Deferred income taxes 245 105
Provision for losses on accounts receivable 588 (123)
(Gain) loss on asset disposal (4,018) 130
Changes in operating assets and liabilities,
net of effects of acquisitions and dispositions:
Accounts receivable (9,523) (13,996)
Inventories 655 (5,133)
Other current assets 2,228 (14)
Accounts payable (5) 45
Accrued expenses and other liabilities 708 (1,217)
Other 68 919
Net cash provided by (used in)
operating activities 4,941 (8,810)
Cash flows from investing activities:
Purchases of property, plant, and equipment (7,106) (7,360)
Proceeds from sale of property, plant, and equipment 12,448 -0-
Net cash provided by (used in) investing activities 5,342 (7,360)
Cash flows from financing activities:
(Payments on) proceeds from short-term debt (6,326) 17,012
Payments on long-term debt (561) (1,006)
Dividends paid (2,011) (2,002)
Other 80 14
Net cash (used in) provided by financing activities (8,818) 14,018
Increase (decrease) in cash and cash equivalents 1,465 (2,152)
Cash and cash equivalents at beginning of year 2,364 3,539
Cash and cash equivalents at end of period $ 3,829 $ 1,387
<FN>
See notes to condensed consolidated financial statements.
</TABLE>
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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 six-month period ended June 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. Management believes that these matters will be resolved with no
materially adverse impact on the financial position of the Company.
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.
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Item 2. Management's Discussion and Analysis
Net sales during the second quarter ended June 30, 1994, increased 6%
over the second quarter 1993 to $117.3 million. For the six months
ended June 30, 1994, net sales were 2% higher than the first half of
1993. As of May 27, 1994, the Company completed its divestment of
businesses outside the two core segments, Lighting and Compressors and
Vacuum Pumps. The sales and operating income of these smaller
businesses are not considered material to current results or future
trends. Lighting Segment sales were up 8% for the second quarter over
1993, due to improved volume in both the U.S. and Canadian lighting
markets, recovering from a slow first quarter with year-to-date sales
within 1% of 1993 first-half levels. The Compressor and Vacuum Pump
Segment sales increased 14% and 16% for the current quarter and year
to date, respectively, over 1993. This represents the highest level
of sales for any quarter or six-month period in the Company's history
for this Segment, 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 second quarter and first half of $5.0 million
and $6.1 million, respectively, includes a net after-tax gain of $3.0
million from the sale of the two remaining non-core businesses during
the second quarter, as mentioned above and a $.4 million gain due to
LIFO inventory layer reductions. Exclusive of the $3.0 million gain,
net income improved 74% and 67% over the second quarter and first six
months of 1993, respectively, due primarily to the record sales and
earnings from the Compressor and Vacuum Pump Segment in both periods.
Operating income within the Lighting Segment also improved for the
second quarter over last year due to improved sales levels,
particularly within the U.S. and Canadian Outdoor Lighting operations.
Year-to-date 1994 operating results for Lighting remain just slightly
behind 1993 results due to the weak first quarter 1994 sales
performance.
Cost of products sold as a percent of sales improved to 72.0% and
72.4% of sales for the second quarter and six months to date,
respectively, for 1994 versus 72.9% and 73.2% for the comparable 1993
periods. This improvement is due primarily to the increasing mix of
Compressor and Vacuum Pump sales and margins to the total, as gross
margins within the Lighting Segment have remained unchanged from 1993
to 1994.
Selling, general, and administrative costs were slightly lower as a
percent of sales for the second quarter 1994, at 22.5% versus 22.7%
for 1993, due substantially to the relatively fixed nature of most of
these costs over the higher sales volume. Year-to-date sales and
general and administrative costs remained at approximately the same
level as 1993, at 22.9%.
Interest expense for the second three months of 1994 was 10% below
1993, with the first six months of 1994 down 8% compared to 1993 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 $76,183,000 at June 30, 1994, is lower as compared
to $78,466,000 at December 31, 1993, partly due to the reclassifica-
tion of $7.7 million of long-term debt to current portion due in
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Item 2. Management Discussion and Analysis--Continued
January 1995. Accounts receivable levels have increased due to
seasonal factors over 1993 but are 4% below June 30, 1993, levels.
Inventories have been reduced by 6.4% from December 1993 levels and are
12% below June 30, 1993, due in part to the elimination of the
divisions sold as mentioned above as well as a concerted effort having
been made to reduce inventory levels within the Lighting Segment.
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 1.96 at June 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 $12.5 million are not
restricted at June 30, 1994.
As of June 30, 1994, the Company had available credit of $68 million
with banks under short-term borrowing arrangements and a revolving
line of credit, $59 million of which was available as of June 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
(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.
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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 August 11, 1994
