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, 1995
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
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 6, 1995, was 10,095,394 shares.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THOMAS INDUSTRIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in Thousands Except Amounts Per Share)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net sales $128,750 $119,035 $373,726 $345,714
Cost of products sold 91,842 85,098 269,091 249,312
Gross profit 36,908 33,937 104,635 96,402
Other (income) expenses:
Selling, general, and
administrative expenses 27,415 26,435 81,449 78,311
Interest expense 2,023 2,291 6,213 7,069
Other (133) (106) 112 (4,029)
Income before income taxes 7,603 5,317 16,861 15,051
Income tax provision 2,901 2,497 6,695 6,174
Net income $ 4,702 $ 2,820 $ 10,166 $ 8,877
Per Common Share amounts:
Net income per share $.46 $.28 $1.00 $.88
Dividends declared per share $.10 $.10 $.30 $.30
Weighted average number of
common shares and common
share equivalents 10,226,356 10,065,613 10,199,059 10,057,120
See notes to condensed consolidated financial statements.
</TABLE>
THOMAS INDUSTRIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
<TABLE>
<CAPTION>
(Unaudited)
September 30 December 31
ASSETS 1995 1994*
<S> <C> <C>
Current assets
Cash and cash equivalents $ 3,895 $ 5,050
Accounts receivable, less allowance
(1995--$2,218; 1994--$1,773) 72,647 61,075
Inventories:
Finished products 32,040 31,417
Raw materials 26,366 29,970
Work in process 11,511 11,515
69,917 72,902
Assets held for disposition 1,134 2,157
Deferred income taxes 6,066 5,874
Other current assets 7,427 8,297
Total current assets 161,086 155,355
Property, plant and equipment 150,258 142,060
Less accumulated depreciation and amortization 76,134 66,098
74,124 75,962
Intangible assets--less accumulated amortization 62,041 62,532
Other assets 12,104 11,222
Total assets $309,355 $305,071
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes payable $ 7,788 $ 8,252
Accounts payable 23,914 25,892
Other current liabilities 40,992 34,821
Current portion of long-term debt 9,023 8,832
Total current liabilities 81,717 77,797
Deferred income taxes 7,844 7,684
Long-term debt (less current portion) 71,161 79,693
Minimum pension liability 1,759 1,759
Other long-term liabilities 4,219 4,372
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: 1995--11,455,956;
1994--11,447,873 11,456 11,448
Capital surplus 117,631 117,557
Retained earnings 38,404 31,264
Minimum pension liability adjustment (1,045) (1,045)
Equity adjustment from translation (811) (2,478)
Less cost of treasury shares
(1995 and 1994--1,366,695) (22,980) (22,980)
142,655 133,766
Total liabilities and shareholders' equity $309,355 $305,071
*Derived from the audited December 31, 1994, balance sheet.
See notes to condensed consolidated financial statements.
</TABLE>
THOMAS INDUSTRIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income $10,166 $8,877
Reconciliation of net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 11,839 11,879
Deferred income taxes (273) 330
Provision for losses on accounts receivable 593 797
(Gain) loss on asset disposal, net 103 (4,044)
Changes in operating assets and liabilities
net of effect of divestitures:
Accounts receivable (11,554) (11,418)
Inventories 2,483 (3,029)
Other current assets 2,485 2,250
Accounts payable (2,161) 6,125
Accrued expenses and other liabilities 5,285 1,414
Other 304 (109)
Net cash provided by operating activities 19,270 13,072
Cash flows from investing activities:
Purchases of property, plant, and equipment (7,942) (11,723)
Proceeds from sale of property, plant, and equipment,
and other assets 104 12,708
Net cash provided by (used in) investing activities (7,838) 985
Cash flows from financing activities:
Payments of short-term debt, net (1,168) (7,326)
Payments of long-term debt (8,534) (888)
Dividends paid (3,024) (3,015)
Other 139 145
Net cash (used in) financing activities (12,587) (11,084)
Increase (decrease) in cash and cash equivalents (1,155) 2,973
Cash and cash equivalents at beginning of year 5,050 2,364
Cash and cash equivalents at end of period $ 3,895 $ 5,337
See notes to condensed consolidated financial statements.
</TABLE>
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, 1995,
are not necessarily indicative of the results that may be expected for the
year ending December 31, 1995. 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, 1994.
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.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Net sales during the third quarter ended September 30, 1995,
increased 8% over the third quarter 1994 to $128.8 million. For the
nine months ended September 30, 1995, net sales were 8% higher than
the first nine months of 1994. Lighting Segment sales were up 10%
for the third quarter over 1994, due to improvements in the
Commercial & Industrial Division. Compressor and Vacuum Pump
Segment sales were up 5% for the third quarter over 1994, due
primarily to new applications for our products in Original Equipment
Manufacturer (OEM) markets.
Net income for the 1995 third quarter and first nine months of $4.7
million and $10.2 million, respectively, was higher than the $2.8
million and $8.9 million for the comparable periods in 1994;
however, included in the 1994 results was a gain of $3.0 million
from the sale of non-core businesses during the second quarter and a
$.7 million gain due to LIFO inventory layer reductions. Exclusive
of the $3.0 million gain, net income in 1995 improved 67% and 73%
over the third quarter and first nine months of 1994, respectively,
due primarily to the improved performance of the Lighting Segment.
Operating income from the Compressor and Vacuum Pump Segment for the
1995 third quarter and first nine months was slightly below the
record levels established in 1994.
Cost of products sold as a percent of sales was 71.3% and 72.0% for
the 1995 third quarter and nine months to date, respectively, versus
71.5% and 72.1% for the comparable 1994 periods. Gross margins in
the Lighting Segment in 1995 have improved due to increased
efficiencies and implementation of cost containment programs.
Compressor and Vacuum Pump Segment margins are slightly below prior
year levels due to material cost increases, competitive margin
pressures, and increased fixed cost associated with a plant
expansion.
Selling, general, and administrative costs as a percent of sales of
21.3% and 21.8% in the third quarter and first nine months of 1995,
respectively, were slightly lower than the 22.2% and 22.7% figures
for the comparable 1994 periods. The ability to absorb these
relatively fixed costs over a higher sales base accounts for most of
the improvement.
Interest expense for the third quarter of 1995 was 11.7% below 1994,
with the first nine months of 1995 down 12.1% compared to 1994 due
to lower short-term interest rates in Europe and a decrease in long-
term debt.
Working capital of $79.4 million at September 30, 1995, was 2%
greater than the $77.6 million at December 31, 1994. Accounts
receivable at September 30, 1995, have increased by 19% since
December 31, 1994, due to seasonal factors and the additional sales
volume; however, the number of days sales in receivables at
September 30, 1995, compared to December 31, 1994, has improved from
53.2 days to 49.8 days.
Inventory at September 30, 1995, has decreased from December 31,
1994, and September 30, 1994, levels due to improved efficiencies
and utilization. Inventory turnover at September 30, 1995, of 4.12
times per year has improved over the prior December and September
amounts of 3.87 and 3.91, respectively. The current ratio at
September 30, 1995, was 1.97 compared to 2.00 at December 31, 1994,
and 1.92 at September 30, 1994.
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 $19.3
million are not restricted at September 30, 1995.
As of September 30, 1995, the Company had available credit of $71
million with banks under short-term borrowing arrangements and a
revolving line of credit, $70 million of which was available.
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.
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 14, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains first nine months summary information extracted from the
Thomas Industries Inc. 1995 Third Quarter Form 10-Q and is qualified in its
entirety by reference to such Form 10-Q filing.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 3,895
<SECURITIES> 0
<RECEIVABLES> 74,865
<ALLOWANCES> 2,218
<INVENTORY> 69,917
<CURRENT-ASSETS> 161,086
<PP&E> 150,258
<DEPRECIATION> 76,134
<TOTAL-ASSETS> 309,355
<CURRENT-LIABILITIES> 81,717
<BONDS> 71,161
<COMMON> 11,456
0
0
<OTHER-SE> 131,199
<TOTAL-LIABILITY-AND-EQUITY> 309,355
<SALES> 373,726
<TOTAL-REVENUES> 373,726
<CGS> 269,091
<TOTAL-COSTS> 269,091
<OTHER-EXPENSES> 80,968
<LOSS-PROVISION> 593
<INTEREST-EXPENSE> 6,213
<INCOME-PRETAX> 16,861
<INCOME-TAX> 6,695
<INCOME-CONTINUING> 10,166
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,166
<EPS-PRIMARY> 1.00
<EPS-DILUTED> 1.00
</TABLE>
