<PAGE>
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
(Mark One) Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-5426
THOMAS INDUSTRIES INC.
(Exact name of Registrant as specified in its Charter)
DELAWARE 61-0505332
(State of incorporation) (I.R.S. Employer Identification Number)
4360 BROWNSBORO ROAD, LOUISVILLE, KENTUCKY 40207
(Address of principal executive offices) (Zip Code)
502/893-4600
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE
SECURITIES EXCHANGE ACT OF 1934:
Title of Each Class Name of Each Exchange on which Registered
Common Stock, $1 Par Value New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained, to the best
of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
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. [X]
As of March 3, 1995, 10,082,678 shares of the registrant's Common Stock were
outstanding.
The aggregate market value of the voting stock held by non-affiliates of the
Registrant at March 3, 1995, was approximately $150,000,000.
Portions of Proxy Statement for the Annual Meeting of Shareholders on April 20,
1995, are incorporated by reference in Part III of this report.
Portions of the Annual Report to Shareholders for fiscal year ended December 31,
1994 are incorporated by reference in Parts I and II of this report.
<PAGE>
PART I.
ITEM 1. BUSINESS
a. General Development of Business.
The Company began operations in 1928 and has grown through both internal
expansion and new business acquisitions. Efforts since 1984 have focused
on expansion of the Lighting Segment and the Compressors and Vacuum Pumps
Segment as the two core businesses. The significant recent additions to
these two core segments have been ASF, Pneumotive, Brey, and WISA, all
compressor and vacuum pump companies, acquired from 1987 through 1990; and
the Lumec and Day-Brite Lighting additions in 1987 and 1989, respectively.
These acquisitions have been strategically important as they allow the
Company to offer a more complete product line and make the Company a more
prominent participant in both the lighting and compressor and vacuum pump
markets.
The Lighting Segment operates in a multi-faceted industry, serving the
consumer, commercial, industrial, and outdoor markets. The industry is
dominated by five companies in the U.S. and Canada, one of which is Thomas
Industries. Although the industry is subject to the cyclicality of
residential and commercial construction activity, replacement and
renovation activity moderates these cycles somewhat.
Operations of the Compressors and Vacuum Pumps Segment help the Company
moderate the impact of the Lighting Segment's vulnerability to
construction and economic cycles. Thomas believes it is the major
supplier to the original equipment manufacturer (OEM) medical market and a
significant participant in its other OEM compressor and vacuum pump
markets.
During 1994, the Company divested the three remaining disassociated
operating units that manufactured commercial construction hardware and
consumer fireplaces and fireplace accessory products. These operations
were insignificant, both individually and in the aggregate, to the
Company.
b. Financial Information about Industry Segments.
The information required by this item is set forth in Exhibit 13 under the
heading "Notes to Consolidated Financial Statements," which information is
hereby incorporated herein by reference.
c. Narrative Description of Business.
The Company's principal businesses are lighting, including consumer,
commercial, industrial, and outdoor lighting fixtures; and compressors and
vacuum pumps. The Company designs, manufactures, markets, and sells these
products; and maintains corporate offices in Louisville, Kentucky. The
Company operates numerous divisions and subsidiaries, with facilities
throughout the U.S. and operations in Canada and Germany. The Company
also maintains sales offices in Brazil, England, Italy, and Japan and has
joint ventures in Japan and in the U.S. and Canada with a Belgian company.
<PAGE>
ITEM 1. (Continued)
Lighting Segment
The Company's consumer lighting products--its original base--are
designed for a broad range of consumers. The Company stresses product
development to meet changing needs and demands. The Company typically
targets the more upscale, single-family homeowner but also has a line
for the do-it-yourself homeowner. The Company also is strongly involved
in the replacement lighting market, which is a growing component of the
overall lighting industry. Under the Thomas, Premier, and Do-It-
Yourself brand names, the Company's consumer lighting line includes
high-style chandeliers and bathroom fixtures, plus quality lighting
products for foyers, dining rooms, living rooms, entertainment areas,
kitchens, bedrooms, and outdoors.
The Thomas, Premier, and Do-It-Yourself lines are distributed throughout
the United States through a network of electrical distributors, lighting
showrooms, and home centers, which, in turn, sell to electrical
contractors, builders, and consumers.
Consumer lighting fixtures are manufactured and sold in the U.S. and
Canada under the Thomas, Premier, and Do-It-Yourself trade names; and
those trade names are recognized as important to this Segment's
business.
The Company believes it has established a reputation as an innovator and
pioneer in track and recessed lighting technology and is one of the
nation's leading manufacturers of fluorescent and high-intensity
discharge ("HID") commercial and industrial products. The Company's
commercial and industrial product line can be applied to virtually any
application, using a variety of lamp sources, and is designed for
efficiency as well as energy savings. The Company's outdoor lighting
products are known for their high performance in efficiency, glare
control, and uniformity of illumination. Products are manufactured and
sold in the U.S. and Canada under the Day-Brite, Gardco, Capri,
Electro/Connect, McPhilben, Omega, Emco, Lumec, and Thomas Lighting
trade names.
The Lighting Segment accounted for 67 percent of the Company's sales in
1994, compared to 66 percent in 1993 and 68 percent in 1992.
Compressors and Vacuum Pumps Segment
This Segment includes air compressors and vacuum pumps manufactured
under the Thomas name for use in the finished products of other domestic
or foreign manufacturers. Its products also are manufactured for
private-label sale in the construction compressor industry. Thomas
specializes in compressor applications below the 1.5 horsepower range.
Such compressors and vacuum pumps are found in medical equipment,
vending machines, photocopiers, computer tape drives, automotive and
transportation equipment, liquid dispensing applications, gasoline
vapor recovery, and waste disposal equipment. Thomas is the major
compressor and vacuum pump participant in the medical OEM industry
<PAGE>
ITEM 1. (Continued)
worldwide. The Company offers a wide selection of branded standard air
compressors and vacuum pumps and will modify or design its products to
meet exacting OEM applications.
In addition, the Company manufactures and sells compressors and related
accessories for commercial and consumer use. Sales, both domestic and
international, traditionally are made through hardware stores, home
centers, building supply dealers, and mass merchandisers.
The Pneumotive Division manufactures rotary vane and piston compressors
and vacuum pumps, as well as air motors and vacuum ejectors, for a
variety of applications to the OEM market as well as through fluid power
and large compressor distributors.
The Brey Division produces a complementary line of rotary vane
compressors and vacuum pumps, with expertise in applications of less
than 1/8 horsepower. These products are currently distributed for sale
primarily in Europe, with increasing worldwide marketing.
Under the ASF name, the Company produces diaphragm and peristaltic
compressors and vacuum pumps with applications in photography, medical,
air and gas sampling, and dish washing equipment, as well as laboratory
instruments and leak detection devices. These products are marketed
worldwide to original equipment manufacturers.
WISA produces a line of linear-type vibrating and diaphragm compressors
and vacuum pumps for various applications, the foremost of which is gas
analyzers. Sales and distribution are made primarily in Europe and the
U.S., with expanding availability worldwide.
The Thomas, ASF, Pneumotive, Brey, WISA, and Sprayit trade names are
recognized in the market and are important to the Segment.
The Compressors and Vacuum Pumps Segment accounted for 32 percent of the
Company's sales in 1994, compared to 29 percent in 1993 and 26 percent
in 1992.
Other Products
These products, on a combined basis, accounted for 1 percent of the
Company's sales in 1994, compared to 5 percent in 1993 and 6 percent in
1992.
---------------------
No single customer of the Company accounted for more than 10 percent of
consolidated net sales or more than 10 percent of any segment's net sales
in 1994, and no material part of the business is dependent upon a single
customer the loss of which could have a materially adverse effect on the
business of the Company.
The backlog of unshipped orders was $90 million at December 31, 1994--48
percent Lighting and 52 percent Compressors and Vacuum Pumps--and
<PAGE>
ITEM 1. (Continued)
$86 million at December 31, 1993--56 percent Lighting, 43 percent
Compressors and Vacuum Pumps, and 1 percent Other. The Company believes
substantially all of such orders are firm, although some orders are
subject to cancellation. Substantially all of these orders are filled in
the succeeding year.
Competition in the lighting industry is strong in all markets served by
the Company. The industry has been consolidating significantly over the
last few years. It is estimated that five companies control the majority
of the market in the U.S. and Canada. Thomas Industries is one of these
top five. The Company stresses high quality, and energy efficient
lighting products, while providing value and strong customer support to
compete in its markets.
The Compressors and Vacuum Pumps Segment competes worldwide in the
fractional horsepower compressor and vacuum pump markets. Management
believes it is the major supplier to the OEM medical market and a
significant participant in its other OEM markets.
The Company believes that it has adequate sources of materials and
supplies for each of its businesses.
There is no significant seasonal impact on the business of any industry
segment of the Company. Many of the lighting businesses continue to be
dependent on the construction markets, which are subject to the overall
health of the economy.
Working capital is provided principally from operating profits. The
Company maintains adequate lines of credit and financial resources to meet
the anticipated cash requirements in the year ahead.
The Company has various patents and trademarks but does not consider its
business to be materially dependent upon any individual patent or
trademark.
During 1994, the Company spent $12.7 million on research activities
relating to the development of new products and the improvement of
existing products. Substantially all of this amount was Company-sponsored
activity. During 1993, the Company spent $12.4 million on these
activities and during 1992, $12.5 million.
Continued compliance with present and reasonably expected federal, state,
and local environmental regulations is not expected to have any material
effect upon capital expenditures, earnings, or the competitive position of
the Company and its subsidiaries.
The Company employs approximately 3,200 people.
<PAGE>
ITEM 1. (Continued)
d. Financial Information about Foreign and Domestic Operations and Export
Sales.
See Notes to Consolidated Financial Statements, as set forth in Exhibit
13, which information is incorporated herein by reference to the Company's
1994 Annual Report to Shareholders, for financial information about
foreign and domestic operations. Export sales for the years 1994, 1993,
and 1992, were $36,600,000, $34,500,000, and $32,800,000, respectively.
e. Executive Officers of the Registrant.
<TABLE>
<CAPTION>
Year
Office or Position First Elected
with Company Age as an Officer
<S> <C> <C> <C>
Timothy C. Brown President, Chief Executive 44 1984
Officer, Chairman of the
Executive Committee, and
Director
Richard J. Crossland Group Vice President-- 51 1994
(A) Lighting
Clifford C. Moulton Group Vice President-- 47 1993
(B) Compressors and Vacuum
Pumps
Phillip J. Stuecker Vice President, Finance, 43 1984
Chief Financial Officer,
and Secretary
Ronald D. Schneider Vice President, 44 1992
(C) Lighting Operations
C. Barr Schuler Vice President, Corporate 54 1977
Development and Acquisitions
Gilbert R. Grady, Jr. Vice President, Corporate 58 1981
Employee Relations
<FN>
(A) Richard J. Crossland was elected an officer on August 18, 1994. Mr.
Crossland spent the past 10 years with Philips Lighting Company,
Somerset, New Jersey, where he was Group Vice President/General
Manager of four divisions since 1990 and Vice President, Operations,
of seven manufacturing facilities from 1989 to 1990.
(B) Clifford C. Moulton was elected an officer effective March 1, 1993.
Mr. Moulton had spent the past 23 years with Honeywell Corporation in
various management positions, most recently as Vice President and
General Manager of the Skinner Valve Division, since 1987.
<PAGE>
ITEM 1. (Continued)
(C) Ronald D. Schneider was elected an officer effective April 16, 1992.
Mr. Schneider had held the position of Director, Manufacturing
Services, since 1989 and prior to that was Manufacturing Services
Manager at the Company's Power Air Division. He has been with the
Company since 1984.
</FN>
</TABLE>
All other officers listed have been executive officers for the past five
years.
ITEM 2. PROPERTIES
The Corporate offices of the Company are located in Louisville, Kentucky. Due
to the large number of individual locations and the diverse nature of the
operating facilities, it is neither practical nor significant to describe all
of the properties owned and leased by the Company. All of the buildings are
of steel, masonry, and concrete construction, are in generally good condition,
provide adequate and suitable space for the operations at each location, and
are of sufficient capacity for present and foreseeable future needs.
The following listing summarizes the Company's properties.
<TABLE>
<CAPTION>
Number
of Facilities Combined
Segment Owned Leased Square Feet Nature of Facilities
<S> <C> <C> <C> <C>
Lighting 9 5 1,867,887 Manufacturing plants
2 4 516,616 Distribution centers
0 4 65,630 Administrative offices
Compressors
and Vacuum 3 3 558,100 Manufacturing plants
Pumps 0 1 6,000 Distribution center
Corporate 0 2 16,186 Corporate headquarters
4 1 355,600 Leased to third parties
3 0 279,200 Property for sale
</TABLE>
ITEM 3. LEGAL PROCEEDINGS
In the normal course of business, the Company and its subsidiaries are parties
to legal proceedings. Management believes that these proceedings will be
resolved with no materially adverse impact on the financial condition of the
Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
<PAGE>
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS
The information required by this item is set forth in Exhibit 13 under the
heading "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and under the heading "Notes to Consolidated Financial
Statements," which information is contained in the Company's 1994 Annual
Report to Shareholders and hereby incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item is set forth in Exhibit 13 under the
heading "11-Year Summary of Operations and Statistics," which information is
contained in the Company's 1994 Annual Report to Shareholders and hereby
incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information required by this item is set forth in Exhibit 13 under the
heading "Management's Discussion and Analysis of Financial Condition and
Results of Operations," which information is contained in the Company's 1994
Annual Report to Shareholders and hereby incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is set forth in Exhibit 13 under the
headings "Consolidated Financial Statements," "Notes to Consolidated Financial
Statements," and "Report of Management and Independent Auditors," which
information is contained in the Company's 1994 Annual Report to Shareholders
and hereby incorporated herein by reference.
The supplementary data regarding quarterly results of operations is set forth
in Exhibit 13 under the heading "Notes to Consolidated Financial Statements,"
which information is contained in the Company's 1994 Annual Report to
Shareholders and hereby incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
a. Directors of the Company
The information required by this item is set forth in registrant's Proxy
Statement for the Annual Meeting of Shareholders to be held on April 20,
1995, under the headings "Election of Directors" and "Compliance with
<PAGE>
ITEM 10. (Continued)
Section 16(a)," which information is hereby incorporated herein by
reference.
b. Executive Officers of the Company
Reference is made to "Executive Officers of the Registrant" in Part I,
Item 1e.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is set forth in registrant's Proxy
Statement for the Annual Meeting of Shareholders to be held on April 20, 1995,
under the headings "Executive Compensation," "Compensation Committee
Interlocks and Insider Participation," and "Board of Directors, which
information is hereby incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is set forth in registrant's Proxy
Statement for the Annual Meeting of Shareholders to be held on April 20, 1995,
under the heading "Securities Beneficially Owned by Principal Shareholders and
Management," which information is hereby incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is set forth in registrant's Proxy
Statement for the Annual Meeting of Shareholders to be held on April 20, 1995,
under the caption "Board of Directors," which information is hereby
incorporated herein by reference.
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
a. (1) Financial Statements
The following consolidated financial statements of Thomas Industries
Inc. and subsidiaries, included in the Company's 1994 Annual Report
to Shareholders are included in Part II, Item 8:
Consolidated Balance Sheets--December 31, 1994 and 1993
Consolidated Statements of Income--Years ended December 31, 1994,
1993, and 1992
Consolidated Statements of Shareholders' Equity--Years ended
December 31, 1994, 1993, and 1992
Consolidated Statements of Cash Flows--Years ended December 31,
1994, 1993, and 1992
Notes to Consolidated Financial Statements--December 31, 1994
11-Year Summary of Operations and Statistics
Independent auditors report from KPMG Peat Marwick LLP
Independent auditors report from Ernst & Young LLP
<PAGE>
ITEM 14. (Continued)
(2) Financial Statement Schedules
Schedule VIII -- Valuation and Qualifying Accounts
(3) Listing of Exhibits
<TABLE>
<CAPTION>
Exhibit No. Exhibit
<C> <C>
3(a) Restated Certificate of Incorporation, as
amended, filed as Exhibit 3(a) to
registrant's report on Form 10-Q dated
August 11, 1988, hereby incorporated by
reference.
3(b) Bylaws, as amended March 17, 1993, filed as
Exhibit 3(b) to registrant's report on Form
10-K dated March 25, 1993, hereby
incorporated by reference.
4(a) 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
filed as Exhibit No. 4 to registrant's
report on Form 10-K dated March 22, 1990,
hereby incorporated by reference.
Copies of debt instruments for which the
related debt is less than 10% of
consolidated total assets will be furnished
to the Commission upon request.
4(b) Rights Agreement filed as Exhibit 1 to
registrant's report on Form 8-A on December
23, 1987, hereby incorporated by reference.
4(c) Amendment to Rights Agreement filed as
Exhibit 1 to the registrant's report on
Form 8-K on October 18, 1990, hereby
incorporated by reference.
10(a) Employment Agreements with Timothy C.
Brown, Gilbert R. Grady, Jr., C. Barr
Schuler, and Phillip J. Stuecker filed as
Exhibits 3(a), 3(f), 3(i), and 3(j),
respectively, to registrant's report on
Form 10-Q dated November 11, 1988, hereby
incorporated by reference.
<PAGE>
ITEM 14. (Continued)
Exhibit No. Exhibit
10(b) Employment Agreement with Clifford C.
Moulton filed as Exhibit 10(b) to
registrant's report on Form 10-K dated
March 25, 1993, hereby incorporated by
reference.
10(c) Employment Agreement between Richard J.
Crossland and the Company, dated August 29,
1994.
10(d) Trust Agreement, filed as Exhibit 10(1) to
registrant's report on Form 10-Q dated
November 11, 1988, hereby incorporated by
reference.
10(e) Form of Indemnity Agreement and Amendment
thereto entered into by the Company and
each of its Executive Officers filed as
Exhibits 10 (g) and (h) to registrant's
report on Form 10-K dated March 23, 1988,
hereby incorporated by reference.
10(f) Severance pay policy of the Company,
effective October 1, 1988, covering all
Executive Officers, filed as Exhibit 10(d)
to registrant's report on Form 10-K dated
March 23, 1989, hereby incorporated by
reference.
10(g) 1987 Incentive Stock Plan as Amended, filed
as Annex A to the registrant's Proxy
Statement on March 17, 1989, hereby
incorporated by reference.
10(h) Non-Employee Director Stock Option Plan,
filed as Exhibit A to the registrant's
Proxy Statement on March 10, 1994, hereby
incorporated by reference.
10(i) 1995 Incentive Stock Plan, filed as Exhibit
A to the registrant's Proxy Statement on
March 14, 1995, hereby incorporated by
reference.
13 Certain portions of the Company's 1994
Annual Report to Shareholders as specified
in Part II hereof to be incorporated by
reference in this Annual Report on Form
10-K.
<PAGE>
ITEM 14. (Continued)
Exhibit No. Exhibit
21 Subsidiaries of the Registrant.
23 Consent of KPMG Peat Marwick LLP.
23(a) Consent of Ernst & Young LLP.
27 Financial Data Schedule.
</TABLE>
b. Reports on Form 8-K
There were no reports on Form 8-K for the three months ended December 31,
1994.
c. Exhibits
The exhibits filed as part of this Annual Report on Form 10-K are as
specified in Item 14(a)(3) herein.
<PAGE>
S I G N A T U R E S
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, there unto duly authorized.
<TABLE>
<S> <C>
THOMAS INDUSTRIES INC.
Date: March 22, 1995 By TIMOTHY C. BROWN
----------------------------
Timothy C. Brown, President
</TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
WALTER S. DAVIS
- ---------------------------------- Chairman of the Board; 3/22/95
Walter S. Davis Director
TIMOTHY C. BROWN
- ---------------------------------- President; Chief Executive 3/22/95
Timothy C. Brown Officer; Chairman of the
Executive Committee; Director
(Principal Executive Officer)
PHILLIP J. STUECKER
- ----------------------------------- Vice President, Finance; 3/22/95
Phillip J. Stuecker Chief Financial Officer;
Secretary
(Principal Financial Officer)
RONALD D. WISEMAN
- ----------------------------------- Controller; Assistant 3/22/95
Ronald D. Wiseman Secretary
(Principal Accounting Officer)
PETER P. DONIS
- ----------------------------------- Director 3/22/95
Peter P. Donis
WALLACE H. DUNBAR
- ----------------------------------- Director 3/22/95
Wallace H. Dunbar
ROGER P. EKLUND
- ----------------------------------- Director 3/22/95
Roger P. Eklund
<PAGE>
Signatures (Continued)
Signature Title Date
H. JOSEPH FERGUSON
- ----------------------------------- Director 3/22/95
H. Joseph Ferguson
GENE P. GARDNER
- ----------------------------------- Director 3/22/95
Gene P. Gardner
LAWRENCE E. GLOYD
- ----------------------------------- Director 3/22/95
Lawrence E. Gloyd
RALPH D. KETCHUM
- ----------------------------------- Director 3/22/95
Ralph D. Ketchum
FRANKLIN J. LUNDING, JR.
- ----------------------------------- Director 3/22/95
Franklin J. Lunding, Jr.
BERNARD W. ROGERS
- ----------------------------------- Director 3/22/95
Bernard W. Rogers
</TABLE>
<PAGE>
Independent Auditors' Report
The Board of Directors and Shareholders
Thomas Industries Inc.
We have audited the consolidated balance sheets of Thomas Industries Inc. and
subsidiaries as of December 31, 1994 and 1993, and the related consolidated
statements of income, shareholders' equity, and cash flows for the years then
ended as listed in the accompanying index. In connection with our audits of the
1994 and 1993 consolidated financial statements, we also have audited the 1994
and 1993 financial statement schedule as listed in the accompanying index.
These consolidated financial statements and financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these 1994 and 1993 consolidated financial statements and financial
statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provides a reasonable basis for our opinion.
In our opinion, the 1994 and 1993 consolidated financial statements referred to
above present fairly, in all material respects, the financial position of Thomas
Industries Inc. and subsidiaries as of December 31, 1994 and 1993, and the
results of their operations and their cash flows for the year then ended in
conformity with generally accepted accounting principles. Also, in our opinion,
the related 1994 and 1993 financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly, in all material respects, the information set forth therein.
As discussed in Note 8 to the consolidated financial statements, the Company
changed its method of accounting for postretirement benefits in 1993 to adopt
the provisions of the Financial Accounting Standards Board's Statement of
Financial Accounting Standards (SFAS) No. 106, "Employers' Accounting for
Postretirement Benefits Other than Pensions." As discussed in Note 4, the
Company changed its method of accounting for income taxes in 1993 to adopt the
provisions of SFAS No. 109, "Accounting for Income Taxes." As discussed in Note
1, the Company changed its method of accounting for certain inventories in 1993.
KPMG PEAT MARWICK LLP
----------------------
Louisville, Kentucky
February 9, 1995
<PAGE>
The Board of Directors and Shareholders
Thomas Industries Inc.
We have audited the accompanying consolidated statements of income,
shareholders' equity, and cash flows of Thomas Industries Inc. and subsidiaries
for the year ended December 31, 1992. Our audit also included the financial
statement schedule for the year ended December 31, 1992, listed in the Index at
Item 14(a). These financial statements and schedule are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated results of operations and cash flows of
Thomas Industries Inc. and subsidiaries for the year ended December 31, 1992, in
conformity with generally accepted accounting principles. Also, in our opinion,
the related financial statement schedule, when considered in relation to the
basic financial statements taken as a whole, presents fairly in all material
respects the information set forth therein.
ERNST & YOUNG LLP
-----------------
Louisville, Kentucky
February 11, 1993
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
Thomas Industries Inc. and Subsidiaries
December 31, 1994
ADDITIONS
Balance at Charged to Charged to Balance at
DESCRIPTION Beginning Costs Other Accounts - Deductions- End of
of Period and Expenses Describe Describe Period
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1994
Allowance for doubtful accounts $1,763,000 $ 705,000 $ 695,000 (1) $1,773,000
Allowance for obsolete and slow moving inventory 6,419,000 4,079,000 4,774,000 (2) 5,724,000
--------- --------- --------- ---------
$8,182,000 $4,784,000 $5,469,000 $7,497,000
Year ended December 31, 1993
Allowance for doubtful accounts $2,220,000 $1,040,000 $1,497,000 (1) $1,763,000
Allowance for obsolete and slow moving inventory 4,742,000 4,470,000 2,793,000 (2) 6,419,000
--------- ---------
$6,962,000 $5,510,000 $4,290,000 $8,182,000
Year ended December 31, 1992
Allowance for doubtful accounts $2,012,000 $1,921,000 $23,000 (3) $1,736,000 (1) $2,220,000
Allowance for obsolete and slow moving inventory 5,315,000 1,066,000 1,639,000 (2) 4,742,000
--------- --------- ------ --------- ---------
$7,327,000 $2,987,000 $23,000 $3,375,000 $6,962,000
<FN>
(1) Uncollectible accounts written off, less recoveries on accounts previously written off and effect of translation in accordance
with SFAS No. 52
(2) Disposal of obsolete inventory and effect of translation in accordance with SFAS No. 52
(3) Balance at date of acquisition of subsidiary companies
</FN>
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Exhibit Page
<S> <C> <C>
10c. Employment Agreement 19
13. Certain portions of the Company's 35
1994 Annual Report to Shareholders
as specified in Part II hereof to be
incorporated by reference in this
Annual Report on Form 10-K
21. Subsidiaries of the Registrant 67
23. Consent of KPMG Peat Marwick 68
23.a Consent of Ernst & Young 69
27 Financial Data Schedule 70
</TABLE>
<PAGE>
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of the 29th day of August, 1994, by and
between THOMAS INDUSTRIES INC., a Delaware corporation (the "Company"), and
Richard J. Crossland (the "Employee").
RECITALS
A. Employee has been elected by the Board of Directors of the Company (the
"Board"), or otherwise has been duly appointed by the Company, to the
position of the Company (or one of its divisions or subsidiaries) as set
forth on Exhibit A hereto.
B. Employee possesses executive skills and experience which the Company
believes are of substantial value and importance to the success of the
Company's business operations.
C. The Board has determined that it is in the best interests of the Company
and its shareholders to ensure that the Company will have the continued
dedication of the Employee, notwithstanding the possibility, threat, or
occurrence of a Change of Control (as defined below) of the Company.
D. The Board believes it is imperative to diminish the inevitable distraction
of the Employee by virtue of the personal uncertainties and risks created
by a pending or threatened Change of Control, to encourage the Employee's
full attention and dedication to the Company currently and in the event of
any threatened or pending Change of Control, and to provide the Employee
with compensation arrangements upon a Change of Control which provide the
Employee with individual financial security and which are competitive with
those of other corporations.
E. In order to accomplish these objectives, the Board has caused the Company
to enter into this Agreement.
TERMS AND CONDITIONS
NOW, THEREFORE, In consideration of the mutual agreements, conditions,
and covenants hereinafter expressed, it is hereby agreed as follows:
Section 1. Certain Definitions
(a) Effective Date. The "Effective Date" shall be the first date during
the Change of Control Period (as defined in Section 1(b) below) on
which a Change of Control occurs. Anything in this Agreement to the
contrary notwithstanding, if the Employee's employment with the Company
is terminated prior to the date on which a Change of Control occurs,
and it is reasonably demonstrated that such termination (i) was at the
request of a third party who has taken steps reasonably calculated to
effect a Change of Control, or (ii) otherwise arose in connection with
or anticipation of a Change of Control, then for all purposes of this
Agreement, the "Effective Date" shall mean the date immediately prior
to the date of such termination.
<PAGE>
(b) Change of Control Period; Normal Retirement Date; Renewal Date. The
"Change of Control Period" is the period commencing on the date hereof
and ending on the earlier to occur of (i) October 1, 1996, or (ii) the
first day of the month next following the Employee's sixty-fifth
birthday ("Normal Retirement Date"); provided, however, that commencing
on October 1, 1994, and on each annual anniversary of such date (such
date and each annual anniversary thereof is hereinafter referred to as
the "Renewal Date"), the Change of Control Period shall be
automatically extended so as to terminate on the earlier of (x) three
years from such Renewal Date or (y) the first day of the month
coinciding with or next following the Employee's Normal Retirement
Date, unless at least 60 days prior to the Renewal Date the Company
shall give notice that the Change of Control Period shall not be so
extended.
(c) Change of Control; Incumbent Board. For the purpose of this Agreement,
a "Change in Control" shall mean a change of control of a nature that
would be required to be reported in response to Item 1(a) of the
Current Report on Form 8-K, as in effect on the date hereof, pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"), or any comparable successor provisions. Without
limiting the foregoing, a "Change of Control" also means for purposes
of this Agreement, regardless of its meaning under the provisions of
the Exchange Act:
(i) The purchase or other acquisition (other than from the Company)
by any person, entity, or group of persons within the meaning of
Section 13(d) or 14(d) of the Exchange Act (excluding, for this
purpose, the Company or its subsidiaries or any employee benefit
plan of the Company or its subsidiaries), of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 30% or more of either the then outstanding
shares of common stock or the combined voting power of the
Company's then outstanding voting securities entitled to vote in
the election of directors; or
(ii) The receipt of proxies for the election of directors of the
Company in opposition to management's slate of nominees, which
proxies aggregate more than 40% of the then outstanding voting
stock of the Company; or
(iii) Individuals who, as of the date hereof, constitute the Board (as
of the date hereof the "Incumbent Board") cease for any reason
to constitute a least two-thirds of the Board, provided that any
person becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company's
shareholders, was approved by a vote of at least three-quarters
of the directors then comprising the Incumbent Board (other than
an election or nomination of an individual whose initial
assumption of office is in connection with an actual or
threatened election contest relating to the election of
directors of the Company, as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) shall be,
for purposes of this Agreement, considered as though such person
were a member of the Incumbent Board; or
(iv) Approval by the shareholders of the Company of a reorganization,
merger, or consolidation, in each case, with respect to which
persons who were the shareholders of the Company immediately
prior to such reorganization, merger, or consolidation do not,
<PAGE>
immediately thereafter, own more than 50% of the combined power
entitled to vote generally in the election of directors of the
reorganized, merged, or consolidated Company's then outstanding
voting securities, or a liquidation or dissolution of the
Company, or of the sale of all or substantially all of the
assets of the Company.
(d) Employment Period. The Company hereby agrees to continue the Employee
in its employ, and the Employee hereby agrees to remain in the employ
of the Company, for the period commencing on the Effective Date and
ending on the earlier to occur of (i) the second anniversary of such
date or (ii) the first day of the month coinciding with or next
following the Employee's Normal Retirement Date (the "Employment
Period").
(e) Accounting Firm. "Accounting Firm" shall mean a "big-eight" public
accounting firm designated by the Company which does no substantial
work for either the Company or any person owning more than 25% of the
outstanding voting stock of the Company.
(f) Internal Revenue Code. "Internal Revenue Code" shall mean the Internal
Revenue Code of 1986, as amended.
(g) Disability. "Disability" shall mean the total inability because of
bodily injury or disease to carry out the duties of the Employee
provided in Section 2 hereof for a period of six consecutive months.
(h) Substantial Authority. "Substantial Authority" shall mean legal
authority satisfying the criteria set forth in Section 1.6661-3 of the
Income Tax Regulations currently in effect or similar successor
provisions of the Internal Revenue Code and Income Tax Regulations.
Section 2. Position and Duties of Employee.
(a) Position. During the Employment Period, (i) the Employee's position
(including status, offices, titles, and reporting requirements),
authority, duties, and responsibilities shall be at least commensurate
in all material respects with the most significant of those held or
exercised by or assigned to the Employee at any time during the 90-day
period immediately preceding the Effective Date, and (ii) the
Employee's services shall be performed at the location where the
Employee was employed immediately preceding the Effective Date or at
any other office or location less than thirty-five (35) miles from such
location.
(b) Duties. During the Employment Period, and excluding any periods of
vacation and sick leave to which the Employee is entitled, the Employee
agrees to devote reasonable attention and time during normal business
hours to the business and affairs of the Company and, to the extent
necessary to discharge the responsibilities assigned to the Employee
hereunder, to use the Employee's reasonable best efforts to perform
faithfully and efficiently such responsibilities. During the
Employment Period it shall not be a violation of this Agreement for the
Employee to (i) serve on corporate, civic, or charitable boards or
committees, (ii) deliver lectures, fulfill speaking engagements, or
teach at educational institutions, and (iii) manage personal
investments, so long as such activities do not significantly interfere
with the performance of the Employee's responsibilities as an employee
<PAGE>
of the Company in accordance with this Agreement. It is expressly
understood and agreed that to the extent that any such activities have
been conducted by the Employee prior to the Effective Date, the
continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date
shall not thereafter be deemed to interfere with the performance of the
Employee's responsibilities to the Company.
Section 3. Compensation.
(a) Base Salary. During the Employment Period, the Employee shall receive
a base salary (the "Base Salary") at a monthly rate at least equal to
the highest monthly base salary paid or payable to the Employee by the
Company during the twelve-month period immediately preceding the month
in which the Effective Date occurs. Payment of such salary shall be
made in regular installments in accordance with the Company's usual
paying practices but not less frequently than monthly. During the
Employment Period, the Base Salary shall be reviewed at least annually
and shall be increased at any time and from time to time as shall be
substantially consistent with increases in base salary awarded in the
ordinary course of business to other key employees of the Company and
its subsidiaries. Any increase in Base Salary shall not serve to limit
or reduce any other obligation to the Employee under this Agreement.
Base Salary shall not be reduced after any such increase.
(b) Annual Bonus. In addition to Base Salary, the Employee shall be
awarded, for each fiscal year during the Employment Period, an annual
bonus (the "Annual Bonus") (either pursuant to the incentive
compensation plan of the Company or otherwise) in cash at least equal
to the average bonus payable to the Employee from the Company and its
subsidiaries in respect of the three fiscal years immediately preceding
the fiscal year in which the Effective Date occurs.
(c) Incentive, Savings, and Retirement Plans. In addition to Base Salary
and Annual Bonus payable as hereinabove provided, the Employee shall be
entitled to participate during the Employment Period in all incentive,
savings, and retirement plans, practices, policies, and programs
applicable to other key employees of the Company and its subsidiaries
(including the Company's employee benefit plans, in each case providing
benefits which are the economic equivalent to those in effect or as
subsequently amended). Such plans, practices, policies, and programs,
in the aggregate, shall provide the Employee with compensation,
benefits, and reward opportunities at least as favorable as the most
favorable of such compensation, benefits, and reward opportunities
provided by the Company for the Employee under such plans, practices,
policies, and programs as in effect at any time during the 90-day
period immediately preceding the Effective Date or, if more favorable
to the Employee, as provided at any time thereafter with respect to
other key employees of the Company and its subsidiaries.
(d) Welfare Benefit Plans. During the Employment Period, the Employee
and/or the Employee's family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare benefit
plans, practices, policies, and programs provided by the Company and
its subsidiaries (including, without limitation, medical, prescription,
dental, disability, salary continuance, employee life, group life,
accidental death, and travel accident insurance plans and programs), at
least as favorable as the most favorable of such plans, practices,
policies, and programs in effect at any time during the 90-day period
<PAGE>
immediately preceding the Effective Date or, if more favorable to the
Employee and/or the Employee's family, as in effect at any time
thereafter with respect to other key employees of the Company and its
subsidiaries.
(e) Expenses. During the Employment Period, the Employee shall be entitled
to receive prompt reimbursement for all reasonable expenses incurred by
the Employee in accordance with the most favorable policies, practices,
and procedures of the Company and its subsidiaries in effect at any
time during the 90-day period immediately preceding the Effective Date
or, if more favorable to the Employee, as in effect at any time
thereafter with respect to other key employees of the Company and its
subsidiaries.
(f) Fringe Benefits. During the Employment Period, the Employee shall be
entitled to fringe benefits, including use of an automobile and payment
of related expenses, in accordance with the most favorable plans,
practices, programs, and policies of the Company and its subsidiaries
in effect at any time during the 90-day period immediately preceding
the Effective Date or, if more favorable to the Employee, as in effect
at any time thereafter with respect to other key employees of the
Company and its subsidiaries.
(g) Office and Support Staff. During the Employment Period, the Employee
shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to secretarial and other
assistance, at least equal to the most favorable of the foregoing
provided to the Employee by the Company and its subsidiaries at any
time during the 90-day period immediately preceding the Effective Date
or, if more favorable to the Employee, as provided at any time
thereafter with respect to other key employees of the Company and its
subsidiaries.
(h) Vacation. During the Employment Period, the Employee shall be entitled
to paid vacation in accordance with the most favorable plans, policies,
programs, and practices of the Company and its subsidiaries as in
effect at any time during the 90-day period immediately preceding the
Effective Date or, if more favorable to the Employee, as in effect at
any time thereafter with respect to other key employees of the Company
and its subsidiaries.
(i) Severance Plan. Except as provided in Section 7, during the Employment
Period the Employee shall be entitled to the benefits of any severance
plan of the Company in existence and applicable to the Employee at any
time during the 90-day period immediately preceding the Effective Date
or, if more favorable to the Employee, as in effect at any time
thereafter with respect to other key employees of the Company and its
subsidiaries. Furthermore, any Waiver and Release executed by the
Employee pursuant to any such severance plan shall not constitute a
waiver and release of any kind to the rights that the Employee may have
under this Agreement.
Section 4. Termination.
Termination of the Employee's employment during the Employment Period will
occur or may be effected as follows:
(a) Death or Disability. This Agreement shall terminate automatically upon
the Employee's death. If the Company determines in good faith that the
<PAGE>
Disability of the Employee has occurred, it may give to the Employee
written notice of its intention to terminate the Employee's employment.
In such event, the Employee employment with the Company shall terminate
effective on the 30th day after receipt of such notice by the Employee
(the "Disability Effective Date"), provided that, within the 30 days
after such receipt, the Employee shall not have returned to full-time
performance of the Employee's duties.
(b) Cause. The Company may terminate the Employee's employment for Cause.
For purposes of this Agreement, "Cause" means (i) a good faith
determination by the Board, after notice to the Employee and
opportunity by the Employee to be heard, that the Employee committed a
fraud, misappropriation, embezzlement, or theft against or from the
Company or any of its subsidiaries, intended to result in substantial
personal enrichment of the Employee at the expense of the Company, (ii)
conviction of the Employee of a felony, or (iii) good faith
determination by the Board, after a ninety (90) day warning and the
opportunity to cure and to be heard by the Board, on substantial
evidence that the Employee was grossly negligent in carrying out, or
unreasonably refused to serve or carry out, the duties and
responsibilities as provided in Section 2 hereof.
(c) Good Reason. The Employee's employment may be terminated by the
Employee for Good Reason. For purposes of this Agreement, "Good
Reason" means:
(i) The assignment to the Employment of any duties inconsistent in
any respect with the Employee's position (including status,
offices, titles, and reporting requirements), authority, duties,
or responsibilities as contemplated by Section 2 of this
Agreement, or any other action by the Company which results in a
diminution in such position, authority, duties, or
responsibilities excluding for this purpose an isolated,
insubstantial, and inadvertent action not taken in bad faith and
which is remedied by the Company promptly after receipt of
notice thereof given by the Employee;
(ii) Any failure by the Company to comply with any of the provisions
of Section 3 of this Agreement, other than an isolated,
insubstantial, and inadvertent failure not occurring in bad
faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Employee;
(iii) The Company's requiring the Employee to be based at any office
or location other than that described in Section 2(a)(ii)
hereof, except for travel reasonably required in the performance
of the Employee's responsibilities and not in excess of an
average of five (5) business days a month during any year;
(iv) Any purported termination by the Company of the Employee's
employment otherwise than as expressly permitted by this
Agreement; or
(v) Any failure by the Company to comply with and satisfy Section
10(c) of this Agreement.
For purposes of this Section 4(c), any good faith determination of
"Good Reason" made by the Employee shall be conclusive. Anything in
this Agreement to the contrary notwithstanding, a termination by the
<PAGE>
Employee for any reason during the 30-day period immediately following
the first anniversary of the Effective Date shall be deemed to be a
termination for Good Reason for all purposes of this Agreement.
(d) Notice of Termination. Any termination by the Company for Cause or by
the Employee for Good Reason shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section
11(b) of this Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Employee's employment under the provision
so indicated, and (iii) if the Date of Termination (as defined below)
is other than the date of receipt of such notice, specifies the
termination date, which date shall be not more than fifteen (15) days
after the giving of such notice. The failure by the Employee to set
forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason shall not waive any right of
the Employee hereunder or preclude the Employee from asserting such
fact or circumstance in enforcing his rights hereunder.
(e) Date of Termination. "Date of Termination" means the date of receipt
of the Notice of Termination or any later date specified therein, as
the case may be, provided, however, that (i) if the Employee's
employment is terminated by the Company other than for Cause of
Disability, the Date of Termination shall be the date on which the
Company notifies the Employee of such termination, and (ii) if the
Employee's employment is terminated by reason of death or Disability,
the Date of Termination shall be the date of death of the Employee or
the Disability Effective Date, as the case may be.
Section 5. Obligations of the Company upon Termination.
(a) Death. If during the Employment Period the Employee's employment is
terminated by reason of the Employee's death, this Agreement shall
terminate without further obligation to the Employee's legal
representatives under this Agreement, other than those obligations
accrued or earned and vested (if applicable) by the Employee as of the
Date of Termination, including, for this purpose, (i) the Employee's
full Base Salary through the Date of Termination at the rate in effect
on the Date of Termination or, if higher, at the highest rate in effect
at any time from the 90-day period preceding the Effective Date through
the Date of Termination (the "Highest Base Salary"), (ii) the product
of the Annual Bonus paid to the Employee for the last full fiscal year,
and a fraction, the numerator of which is the number of days in the
current fiscal year through the Date of Termination and the denominator
of which is 365, and (iii) any compensation previously deferred by the
Employee (together with any accrued interest thereon) and not yet paid
by the Company. (Such amounts specified in clauses (i), (ii), and
(iii) are hereinafter referred to as "Accrued Obligations".)
All such Accrued Obligations shall be paid to the Employee's estate or
beneficiary, as applicable, in a lump sum in cash within 30 days of the
Date of Termination.
Anything in this Agreement to the contrary notwithstanding, the
Employee's family shall be entitled to receive benefits at least equal
to the most favorable benefits provided by the Company and any of its
subsidiaries to surviving families of employees of the Company and such
subsidiaries under such plans, programs, practices, and policies
<PAGE>
relating to family death benefits, if any, in accordance with the most
favorable plans, programs, practices, and policies of the Company and
its subsidiaries in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to the
Employee and/or the Employee's family, as in effect on the date of the
Employee's death with respect to other key employees of the Company and
its subsidiaries and their families.
(b) Disability. If during the Employment Period the Employee's employment
is terminated by reason of the Employee's Disability, this Agreement
shall terminate without further obligation to the Employee other than
those obligations accrued or earned and vested (if applicable) by the
Employee as of the Date of Termination, including, for this purpose,
all Accrued Obligations. All such Accrued Obligations shall be paid to
the Employee in a lump sum in cash within 30 days of the Date of
Termination. Anything in this Agreement to the contrary
notwithstanding, the Employee shall be entitled after the Disability
Effective Date to receive disability and other benefits at least equal
to the most favorable of those provided by the Company and its
subsidiaries to disabled employees and/or their families in accordance
with such plans, programs, practices, and policies relating to
disability, if any, in accordance with the most favorable plans,
programs, practices, and policies of the Company and its subsidiaries
in effect at any time during the 90-day period immediately preceding
the Effective Date or, if more favorable to the Employee and/or the
Employee's family, as in effect at any time thereafter with respect to
other key employees of the Company and its subsidiaries and their
families.
(c) Cause; Other Than for Good Reason. If during the Employment Period the
Employee's employment shall be terminated for Cause, this Agreement
shall terminate without further obligation to the Employee other than
the obligation to pay to the Employee the Highest Base Salary through
the Date of Termination plus the amount of any compensation previously
deferred by the Employee (together with accrued interest thereon). All
such Highest Base Salary and deferred compensation shall be paid to the
Employee in a lump sum in cash within 30 days of the Date of
Termination. If the Employee terminates employment other than for Good
Reason, this Agreement shall terminate without further obligations to
the Employee, other than those obligations accrued or earned and vested
(if applicable) by the Employee through the Date of Termination,
including for this purpose, all Accrued Obligations. All such amounts
including Accrued Obligations shall be paid to the Employee in a lump
sum in cash within 30 days of the Date of Termination.
(d) Good Reason; Other Than for Cause or Disability. If during the
Employment Period the Company shall terminate the Employee's employment
other than for Cause, Disability, or death or if the Employee shall
terminate his employment for Good Reason:
(i) The Company shall pay to the Employee in a lump sum in cash
within 30 days after the Date of Termination the aggregate of
the following amounts:
A. To the extent not theretofore paid, the Employee's Highest
Base Salary through the Date of Termination; and
B. The product of (1) the Annual Bonus paid to the Employee
for the last full fiscal year (if any) ending during the
<PAGE>
Employment Period or, if higher, the Annual Bonus paid to
the Employee for the last full fiscal year prior to the
Effective Date (as applicable, the "Recent Bonus") and (2)
a fraction, the numerator of which is the number of days
in the current fiscal year through the Date of Termination
and the denominator of which is 365; and
C. The present value of 36 monthly payments each equaling
1/12 of the sum of (1) the Highest Base Salary and (2) the
Recent Bonus; for purposes of calculating the payment
under this Section 5(d)(i)(C), present value will be
determined in accordance with Section 280G(d)(4) of the
Internal Revenue Code; and
D. In the case of compensation previously deferred by the
Employee, all amounts previously deferred (together with
any accrued interest thereon) and not yet paid by the
Company, and any accrued vacation pay not yet paid by the
Company; and
E. An amount equal to the present value of the sum of three
payments, each equal to that portion of the annual
contribution by the Company for the benefit of the
Employee to all retirement plans and all supplemental
and/or excess retirement plans (including but not limited
to the Thomas Industries Profit Sharing Plan, the Thomas
Industries Inc. Pension Floor Plan, and the Thomas
Industries Supplemental Profit Sharing Plan, or any
successor plan or amendment thereto) for (i) the two
fiscal years of the Company ending prior to the Date of
Termination, (ii) the two fiscal years of the Company
ending prior to the Effective Date, or (iii) fiscal years
1994 and 1995, whichever is greatest. For purposes of the
preceding sentence, the present value of such payment
shall be computed in accordance with Section 280G(d)(4) of
the Internal Revenue Code under the assumption that
contributions to such plans were made in three equal
installments on March 1 of each year. If the Employee has
not been employed by the Company for each of the two
fiscal years of the Company prior to the Date of
Termination set forth above, the contribution of the
Company on behalf of the Employee shall be annualized for
the Employee's actual term of Employment; and,
(ii) For a three-year period following the Date of Termination, or
such longer period as any plan, program, practice, or policy may
provide, the Company shall continue benefits to the Employee
and/or the Employee's family at least equal to those which would
have been provided to them in accordance with the plans,
programs, practices, and policies described in Section 3(d) of
this Agreement if the Employee's employment had not been
terminated, including health insurance and life insurance, in
accordance with the most favorable plans, practices, programs,
or policies of the Company and its subsidiaries during the 90-
day period immediately preceding the Effective Date or, if more
favorable to the Employee, as in effect at any time thereafter
with respect to other key employees and their families and for
purposes of eligibility for retiree benefits pursuant to such
plans, practices, programs, and policies, the Employee shall be
<PAGE>
considered to have remained employed for a three-year period
following the Date of Termination and to have retired on the
last day of such period.
Section 6. Non-Exclusivity of Rights.
Nothing in this Agreement shall prevent or limit the Employee's continuing or
future participation in any benefit, bonus, incentive, or other plans,
programs, policies, or practices, provided by the Company or any of its
subsidiaries and for which the Employee may qualify, nor shall anything herein
limit or otherwise affect such rights as the Employee may have under any stock
option or other agreements with the Company or any of its subsidiaries.
Amounts which are vested benefits or which the Employee is otherwise entitled
to receive under any plan, policy, practice, or program of the Company or any
of its subsidiaries at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice, or program.
Section 7. Full Settlement.
The Company's obligation to make the payments provided for in this Agreement
and otherwise to perform its obligations hereunder shall not be affected by
any set-off, counterclaim, recoupment, defense, or other claim, right, or
action which the Company may have against the Employee or others; provided,
however, if the Employee is entitled to receive payments under Section
5(d)(i), all of the Employee's rights under the Company's employee severance
plan and all of the Employee's non-compete obligations under any Non-Compete
Agreement with the Company executed pursuant to such severance plan are
terminated automatically. In no event shall the Employee be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to the Employee under any of the provisions of this Agreement. The
Company agrees to pay, to the full extent permitted by law, all legal fees and
expenses with the Employee may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Company or others of the validity
or enforceability of, or liability under, any provision of this Agreement or
any guarantee of performance thereof (including as a result of any contest by
the Employee about the amount of any payment pursuant to Section 8 of this
Agreement), plus in each case interest at the applicable federal rate provided
in Section 7872(f)(2) of the Internal Revenue Code.
Section 8. Certain Additional Payments by the Company.
(a) Gross-Up Payment. Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment
or distribution by the Company to or for the benefit of the Employee,
whether paid or payable or distributed or distributable pursuant to the
terms of this Agreement or otherwise, including pursuant to the
Company's Incentive Stock Plan (a "Payment"), would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code or any
interest or penalties with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the Employee shall
be entitled to receive an additional payment (a "Gross-Up Payment") in
an amount such that after payment by the Employee of all taxes
(including any interest or penalties imposed with respect to such
taxes), including any Excise Tax, imposed upon the Gross-Up Payment,
the Employee retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.
<PAGE>
(b) Determination of Gross-Up. Subject to the provisions of Section 8(c),
all determinations required to be made under this Section 8, including
whether a Gross-Up Payment is required and the amount of such Gross-Up
Payment, shall be made by an Accounting Firm which shall provide
detailed supporting calculations both to the Company and the Employee
within 15 business days of the Date of Termination, if applicable, or
such earlier time as is requested by the Company. The initial Gross-Up
Payment, if any, as determined pursuant to this Section 8(b), shall be
paid to the Employee within 5 days of the receipt of the Accounting
Firm's determination. If the Accounting Firm determines that no Excise
Tax is payable by the Employee, it shall furnish the Employee with a
written opinion that he has Substantial Authority not to report any
Excise Tax on his federal income tax return. Any determination by the
Accounting Firm shall be binding upon the Company and the Employee. As
a result of the uncertainty in the application of Section 4999 of the
Internal Revenue Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which
will not have been made by the Company should have been made (the
"Under Payment"), consistent with the calculations required to be made
hereunder. In the event the Employee receives a final assessment or
enters into a closing agreement with the Internal Revenue Service (the
"Service") for any tax year that gives rise to an Under Payment, and
the Employee gives notice of such Under Payment pursuant to Section
8(c) hereof, the Accounting Firm shall determine the amount of the
Under Payment that has occurred and give written notice thereof to the
Company and the Employee. Any such Under Payment shall be paid by the
Company to or for the benefit of the Employee within 10 business days
after it has received such notice.
(c) Dispute of Tax Claim. The Employee shall notify the Company in writing
of any proposed assessment or proposed adjustment by the Service
pursuant to an audit of the Employee's federal income tax return, or
otherwise, that, if successful, would require the payment by the
Company of a Gross-Up Payment (hereinafter referred to as a "Claim").
Such notice shall be given as soon as practicable but no later than ten
business days after the earlier of (i) the receipt by the Employee of a
written Notice of Proposed Adjustment from the Service (a "30-day
Letter") or (ii) the receipt by the Employee of a statutory Notice of
Deficiency. Such notice of the Employee to the Company shall include
(i) notice of the amount of the proposed assessment or proposed
adjustment which relates to the Claim and the taxable year or years in
which the Claim arises, (ii) the general nature of the Claim, and (iii)
all relevant written reports of the Service's Examining Agent relating
to the Claim.
Within thirty days of (i) the receipt by the Employee of a final
assessment or (ii) the execution by the Employee and the Service of a
closing agreement, with respect to any tax year of the Employee in
which a Claim has been raised, pursuant to which the Employee is
required to pay any amount with respect to the Claim, the Employee
shall provide the Company and the Accounting Firm with a copy of such
assessment or agreement, together with supporting documents sufficient
to determine the amount of such tax liability that was attributable to
the Claim.
Section 9. Confidential Information.
The Employee shall hold in a fiduciary capacity for the benefit of the Company
all secret or confidential information, knowledge, or data relating to the
Company or any of its subsidiaries, and their respective businesses, which
<PAGE>
shall have been obtained by the Employee during the Employee's employment by
the Company or any of its subsidiaries and which shall not be or become public
knowledge (other than by acts by the Employee or his representatives in
violation of this Agreement). After termination of the Employee's employment
with the Company for any reason whether initiated by the Company or the
Employee, the Employee shall not, without the prior written consent of the
Company, communicate or divulge any such information, knowledge, or data to
anyone other than the Company and those designated by it. In no event shall
an asserted violation of the provisions of this Section 9 constitute a basis
for deferring or withholding any amounts otherwise payable to the Employee
under this Agreement.
Section 10. Successors.
(a) This Agreement is personal to the Employee and without the prior
written consent of the Company shall not be assignable by the Employee
otherwise than by will or by the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Employee's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successor and assigns.
(c) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or substantially
all of the business and/or assets of the Company to assume expressly
and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall
mean the Company as hereinbefore defined and any successor to its
business and/or assets which assumes and agrees to perform this
Agreement by operation of law, or otherwise.
Section 11. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of Kentucky, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This Agreement
may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.
(b) All notices and other communications hereunder shall be given by hand
delivery to the other party or by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to the Company: Thomas Industries Inc.
4360 Brownsboro Road, Suite 300 Louisville,
Kentucky 40207
Attention: Secretary
If to the Employee: Mr. Richard J. Crossland
7708 Cedar Ridge Court
Louisville, Kentucky 40059
or to such other address as either party shall have furnished to the
other in writing in accordance herewith. Notice and communications
shall be effective when actually received by the addressee.
<PAGE>
(c) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision
of this Agreement.
(d) The Company may withhold from any amounts payable under this Agreement
such federal, state, or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
(e) The Employee's failure to insist upon strict compliance with any
provision hereof shall not be deemed to be a waiver of such provision
or any other provision thereof.
(f) This Agreement contains the entire understanding of the Company and the
Employee with respect to the subject matter hereof.
(g) The Employee and the Company acknowledge that the employment of the
Employee by the Company is "at will" and, prior to the Effective Date,
may be terminated by either the Employee or the Company at any time.
Upon a termination of the Employee's employment or upon the Employee's
ceasing to be an officer or general manager of the Company, as the case
may be and in each such case, prior to the Effective Date there shall
be no further rights under this Agreement.
IN WITNESS WHEREOF, The Employee has hereunto set his hand; and, pursuant
to the authorization from its Board of Directors, the Company has caused these
presents to be executed in its name, on its behalf, all as of the day and year
first above written.
R. J. CROSSLAND 9/1/94
---------------
Employee
THOMAS INDUSTRIES INC.
BY TIM BROWN
-------------------
President
ATTEST:
DAVID J. STUMLER
- -------------------
Assistant Secretary
<PAGE>
EXHIBIT A
Employee: Richard J. Crossland
Position: Vice President, Lighting Group Manager
Company, Division, or Subsidiary: Thomas Industries Inc.
<PAGE>
Management's Discussion and Analysis
of Financial Condition and Results of Operations
RESULTS OF OPERATIONS
Net income for 1994 was $10.5 million, an increase of $6.7 million, or 177%
over 1993; while net sales increased to $456.6 million in 1994 from $450.1
million in 1993. The 1994 net income includes an after-tax gain of $3.0
million from the sale of two noncore divisions. After adjusting for the
divestitures, net sales for 1994 increased 5.6% over 1993.
Results for 1993 showed improvement over 1992, with net sales up 7% and net
income of $3.8 million in 1993 versus a $2.0 million loss in 1992. The 1993
net income and 1992 net loss include after-tax charges of $2.0 million and
$4.0 million, respectively, for certain restructuring expenses.
The Compressors and Vacuum Pumps Segment continued to extend its record
growth. Net sales in the Segment of $146.3 million increased 14% in 1994 over
1993 following an increase of 16% in 1993 over 1992. The increases for both
years are attributable to the growth of the Original Equipment Manufacturers
(OEM) medical products market and the continued successful introduction of
new products for new applications. European sales grew 12% in 1994, rebounding
from flat sales in 1993 compared to 1992. Operating income for the Segment
grew by 12% in 1994 over 1993, principally due to volume increases. Operating
income for 1993 was 37% higher than for 1992, due to higher volumes.
The Lighting Segment net sales of $304 million in 1994 were 2% higher than in
1993, after a 4% increase in 1993 over 1992. Both increases resulted from
slightly higher unit volumes due to the improved construction markets.
Operating income for the Lighting Segment improved to $4.9 million in 1994, up
from $.1 million in 1993 and $2.7 million in 1992. The 1994 level was a 34%
improvement over 1993 after excluding the $3.5 million pretax restructuring
charge in 1993 referenced above. This improvement was in part due to the
reduced costs resulting from the restructuring actions as well as additional
cost savings and improved operating efficiencies introduced over the past
three years in response to the soft lighting market conditions. Exclusive of
the 1993 and 1992 restructuring charges, the 1993 operating income was down
$2.6 million from 1992 in part due to the significant competitive pricing
pressures experienced by the Consumer and Commercial & Industrial lighting
operations during the year. Significant efforts were made during 1994 and 1993
to focus on more profitable product offerings. The 1994 Lighting Segment
results include a gain of $2.0 million due to LIFO inventory quantity
reductions at certain operating divisions, while 1993 results include a gain
of $1.9 million due to a change in the method of applying LIFO for certain
inventories within the Lighting Segment.
The 1993 net income includes an after-tax charge of $2.0 million related
primarily to exiting the Company's Long Island facility and the sale of a
product line within the Commercial & Industrial Lighting Division. The 1992
<PAGE>
net income includes an after-tax charge of $4.0 million for the costs
associated with restructuring and consolidating certain of the operations
within the Lighting Segment and other operations.
<PAGE>
In 1994, the Company recorded an after-tax gain of $3.0 million from the sale
of the Portland Willamette and Builders Brass Works Divisions. These
operations, whose products were fireplace screens and accessories and
architectural door hardware and controls, were divested as part of the
Company's strategy to focus on its two core businesses--Lighting and
Compressors & Vacuum Pumps.
Interest expense for 1994 was down $1.1 million or 10% from 1993, principally
due to reduced levels of short-term bank borrowings during 1994. In 1993,
interest expense was 1% lower than 1992 as the benefit from lower short-term
rates during 1993 offset the increase in short-term bank borrowings.
The Company, like other similar manufacturers, is subject to environmental
rules and regulations regarding the use, disposal, and cleanup of substances
regulated under environmental protection laws. It is the Company's policy to
comply with these rules and regulations, and the Company believes that its
practices and procedures are designed properly to meet this compliance. The
Company is involved in remedial efforts at certain of its present and former
locations; and when costs can be reasonably estimated, the Company records
appropriate liabilities for such matters.
During 1994, the Company employed an average of 3,200 people, down from 3,400
in 1993 and 3,500 in 1992, primarily due to the staff reductions resulting
from the divestitures, restructuring and effected consolidation plans.
LIQUIDITY AND SOURCES OF CAPITAL
Cash and cash equivalents increased to $5.1 million at December 31, 1994,
compared to $2.4 million at year-end 1993 and $3.5 million at year-end 1992.
Cash flows from operations during 1994 amounted to $20.2 million compared to
$15.7 million in 1993 and $10.7 million in 1992. These funds, along with the
net change in cash on hand and the proceeds from the divestitures, have been
utilized in funding of capital expenditures and dividends over the three-year
period, along with the net pay down of short-term and long-term debt during
1992, 1993 and 1994 totaling $14.0 million.
Working capital decreased $.9 million during 1994 from the December 31, 1993,
level which had increased $8.0 million from year-end 1992. The 1993 working
capital includes the recognition of a $7.0 million deferred tax asset,
resulting from the required change in accounting for income taxes. Accounts
receivable and inventory levels remain essentially unchanged from 1993 to
1994. Notes payable to banks have decreased from December 31, 1993,
principally due to the application of the positive cash flows generated, while
current portion of long-term debt increased $6.6 million due to the scheduled
principal payments in 1995.
<PAGE>
<TABLE>
1994 1993 1992
<S> <C> <C> <C>
Working capital $77,558 $78,466 $70,448
Current ratio 2.00 2.06 2.01
Long-term debt $79,693 $87,509 $89,900
Long-term debt as a % of capital 37.3% 41.2% 41.0%
</TABLE>
<PAGE>
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 $14 million are not restricted at December
31, 1994.
As of December 31, 1994, the Company had available credit of $68 million with
banks under short-term borrowing arrangements and a revolving line of credit,
$61 million of which was available at year-end. 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.
COMMON STOCK MARKET PRICES AND DIVIDENDS
The Company's common stock is traded on the New York Stock Exchange (ticker
symbol TII). On February 9, 1995, there were 2,686 security holders of record.
High and low stock prices and dividends (see Note 6) for the last two years
were:
<TABLE>
1994 1993
Cash Cash
Market Price Dividends Market Price Dividends
Quarter Ended High Low Declared High Low Declared
<S> <C> <C> <C> <C> <C> <C>
March 31 $16-3/8 $13-1/4 $.10 $11-1/4 $ 9-1/8 $.10
June 30 15-3/4 13-1/8 .10 12-3/8 10-3/8 .10
September 30 15-3/8 14 .10 14 10-1/4 .10
December 31 15 12-3/4 .10 13-1/4 10-5/8 .10
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME YEARS ENDED DECEMBER 31
Dollars in thousands, except share data
1994 1993 1992
<S> <C> <C> <C>
Net sales $456,565 $450,149 $420,754
Cost of products sold 329,338 326,396 303,428
------- ------- -------
Gross profit 127,227 123,753 117,326
Selling, general and administrative expenses 104,091 102,440 101,473
Restructuring costs (Note 3) _ 3,500 5,925
Interest expense 9,225 10,279 10,428
Interest income and other (Note 2) (4,287) (286) (748)
------- ------- -------
109,029 115,933 117,078
Income before income taxes 18,198 7,820 248
Income taxes (Note 4) 7,656 4,015 2,280
------- ------- -------
Net income (loss) $ 10,542 $ 3,805 $ (2,032)
Net income (loss) per share (Note 1) $ 1.05 $ .38 $ (.20)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS DECEMBER 31
Dollars in thousands, except share data
<S> 1994 1993
ASSETS <C> <C>
Current assets:
Cash and cash equivalents $ 5,050 $ 2,364
Accounts receivable, less allowance
($1,773 - 1994; $1,763 - 1993) 61,075 61,214
Inventories (Note 1) 72,902 72,164
Deferred income taxes (Note 4) 5,874 7,031
Other current assets 10,454 10,057
------- -------
Total current assets 155,355 152,830
Property, plant and equipment, net (Note 1) 75,962 76,587
Intangible assets, net (Note 1) 62,532 63,818
Other assets (Note 4) 11,222 9,525
------- -------
Total assets $305,071 $302,760
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable to banks $ 8,252 $ 15,870
Accounts payable 25,892 24,562
Accrued expenses and other current liabilities
(Notes 4 and 10) 33,814 30,721
Dividends payable 1,007 1,005
Current portion of long-term debt (Note 5) 8,832 2,206
------- -------
Total current liabilities 77,797 74,364
Deferred income taxes (Note 4) 7,684 8,342
Long-term debt, less current portion (Note 5) 79,693 87,509
Minimum pension liability (Note 7) 1,759 4,322
Other long-term liabilities 4,372 3,174
Shareholders' equity (Notes 5, 6 and 7):
Preferred stock, $1 par value, 3,000,000 shares - -
authorized--none issued
Common stock, $1 par value, authorized shares:
60,000,000; shares issued: 1994--11,447,873;
1993--11,415,790 11,448 11,416
Capital surplus 117,557 117,264
Retained earnings 31,264 24,746
Equity adjustment from translation of foreign currency (2,478) (2,156)
Minimum pension liability adjustment (1,045) (3,241)
Less cost of treasury shares (1994 and 1993--1,366,695
shares) (22,980) (22,980)
------- -------
Total shareholders' equity 133,766 125,049
Commitments and contingencies (Note 9) ------- -------
Total liabilities and shareholders' equity $305,071 $302,760
</TABLE>
See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY YEARS ENDED DECEMBER 31
Dollars in thousands
1994 1993 1992
<S> <C> <C> <C>
Common stock:
Beginning of year $ 11,416 $ 11,378 $ 11,377
Stock options exercised 32 38 1
------- ------- -------
End of year 11,448 1,416 11,378
Capital surplus:
Beginning of year 117,264 116,910 116,903
Stock options exercised 293 354 7
------- ------- -------
End of year 117,557 117,264 116,910
Retained earnings:
Beginning of year 24,746 24,955 30,991
Net income (loss) 10,542 3,805 (2,032)
Cash dividends of $.40 per share (4,024) (4,014) (4,004)
------- ------- -------
End of year 31,264 24,746 24,955
Equity adjustment from translation
of foreign currency:
Beginning of year (2,156) (718) 2,284
Deferred adjustment (322) (1,438) (3,002)
------- ------- -------
End of year (2,478) (2,156) (718)
Minimum pension liability adjustment:
Beginning of year (3,241) _ _
Adjustment (Note 7) 2,196 (3,241) _
------- ------- -------
End of year (1,045) (3,241) _
Treasury shares (22,980) (22,980) (22,980)
------- ------- -------
Total shareholders' equity $133,766 $125,049 $129,545
</TABLE>
See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31
Dollars in thousands
1994 1993 1992
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $10,542 $ 3,805 $(2,032)
Reconciliation of net income (loss) to net
cash provided by operating activities:
Depreciation and amortization 15,524 16,517 16,339
Noncash portion of restructuring costs _ 3,500 4,911
Deferred income taxes 1,391 (1,850) (2,492)
Provision for losses on accounts receivable 705 1,040 1,921
Gain on asset disposal, net (4,223) _ _
Changes in operating assets and liabilities
net of effect of divestitures:
Accounts receivable (3,412) (6,087) (2,143)
Inventories (4,739) (1,907) (9,654)
Other current assets 1,004 (1,143) (77)
Accounts payable 1,565 1,446 5,153
Accrued expenses and other liabilities 1,037 432 (805)
Other 822 (50) (404)
------ ------ ------
Net cash provided by operating activities 20,216 15,703 10,717
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (16,301) (13,908) (13,152)
Proceeds from sale of property, plant and
equipment and other assets 12,747 311 1,715
Other _ _ (442)
------ ------ ------
Net cash used in investing activities (3,554) (13,597) (11,879)
CASH FLOWS FROM FINANCING ACTIVITIES:
(Payments on) proceeds from short-term debt, net (8,615) 3,330 _
Payments on long-term debt (1,508) (2,927) (4,281)
Dividends paid (4,022) (4,011) (4,905)
Other 169 327 (301)
------ ------ ------
Net cash used in financing activities (13,976) (3,281) (9,487)
Increase (decrease) in cash and cash
equivalents 2,686 (1,175) (10,649)
Cash and cash equivalents at beginning of year 2,364 3,539 14,188
------ ------ ------
Cash and cash equivalents at end of year $ 5,050 $ 2,364 $ 3,539
</TABLE>
See accompanying notes
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(NOTE 1) ACCOUNTING POLICIES
Principles of Consolidation: The consolidated financial statements include
the accounts of Thomas Industries Inc. and subsidiaries (the Company). Equity
in minority-owned affiliates is accounted for using the equity method, under
which the Company's share of earnings of these affiliates is included in
income as earned. Intercompany accounts and transactions are eliminated.
Inventories: Inventories are valued at the lower of cost or market.
Inventories valued using the last-in, first-out (LIFO) method represented
approximately 79% of consolidated inventories at December 31, 1994 and 1993.
Inventories not on LIFO are valued using the first-in, first-out (FIFO)
method. The U.S. manufacturing operations previously using the FIFO method
adopted LIFO in 1993. The effect of this change on net income for the year
ended December 31, 1993, was not significant. In addition, in 1993, the
Company changed its method of applying LIFO for certain inventories within the
Lighting Segment as required by changes in the nature of the Company's
business. The effect of this change on the results of operations for the year
ended December 31, 1993, was to increase net income in the fourth quarter by
approximately $1,148,000 ($.11 per share). The Company believes these changes
are preferable because they provide a better matching of costs with related
revenues. The cumulative effect of these changes and the pro forma effects on
prior years' earnings have not been included because such effects cannot be
reasonably determined. The impact on the Company's first, second and third
quarters of 1993 was not material.
Inventory quantities at certain operating divisions decreased in 1994. As a
result, cost of products sold includes cost of inventories based on prior
years' LIFO values which were less than current replacement costs, the effect
of which increased net income by $1,192,000 ($.12 per share) in 1994.
<TABLE>
<CAPTION>
Dollars in thousands
Inventories consist of the following: 1994 1993
<S> <C> <C>
Finished goods $31,417 $33,374
Raw materials 29,970 26,969
Work in process 11,515 11,821
------ ------
Total inventories $72,902 $72,164
</TABLE>
On a current cost basis, inventories would have been $13,494,000 and
$16,992,000 higher than that reported at December 31, 1994 and 1993,
respectively.
<PAGE>
Notes to Consolidated Financial Statements
(NOTE 1) ACCOUNTING POLICIES (CONTINUED)
Property, Plant and Equipment: The cost of property, plant and equipment is
depreciated principally by the straight-line method over their estimated
useful lives.
<TABLE>
<CAPTION>
Dollars in thousands
Property, plant and equipment consist of the following: 1994 1993
<S> <C> <C>
Land $ 6,210 $ 6,379
Buildings 30,295 33,390
Leasehold improvements 10,210 9,455
Machinery and equipment 95,345 97,699
------- -------
142,060 146,923
Accumulated depreciation and amortization 66,098 70,336
Total property, plant and equipment, net $ 75,962 $ 76,587
</TABLE>
Intangible Assets: Intangible assets represent the excess of cost over the
fair value of net assets of companies acquired and are stated net of
accumulated amortization of $14,294,000 and $12,176,000 at December 31, 1994
and 1993, respectively. The excess is being amortized over 40 years by the
straight-line method.
Net Income (Loss) Per Share: Net income (loss) per share is based on the
weighted daily average number of common shares outstanding during the year.
Outstanding stock options have an insignificant dilutive effect.
Research and Development Costs: Research and development costs, which include
costs of product improvements and design, are expensed as incurred
($12,705,000 in 1994, $12,431,000 in 1993 and $12,464,000 in 1992).
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(NOTE 1) ACCOUNTING POLICIES (CONTINUED)
Financial Instruments: Various methods and assumptions were used by the
Company in estimating its fair value disclosures for significant financial
instruments. Fair values of cash equivalents approximate their carrying amount
because they are highly liquid investments with a maturity of less than three
months when purchased. The fair value of short-term debt approximates its
carrying amount. The fair value of long-term debt is based on the present
value of the underlying cash flows discounted at the current estimated
borrowing rates available to the Company.
Other: Certain prior year amounts have been reclassified to conform to the
current year presentation.
(NOTE 2) DIVESTITURES
In the first quarter of 1994, the Company sold its Oliver-MacLeod Division.
Oliver-MacLeod manufactures factory-built chimneys and zero clearance
fireplaces. No gain or loss resulted from the transaction.
In the second quarter of 1994, 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 $3,000,000 ($.30 per share).
Proceeds from these transactions included cash of $10,900,000 and interest-
bearing, secured notes receivable of $4,500,000.
(NOTE 3) RESTRUCTURING COSTS
During the fourth quarter of 1993, the Company recorded a $3,500,000
($2,040,000 after-tax) restructuring charge to further consolidate its
commercial and industrial lighting operations. The restructuring charge
included the costs associated with exiting the Company's Long Island facility
and the discontinuance and sale of a product line.
During the first quarter of 1992, the Company recorded a $5,925,000
($3,986,000 after-tax) charge for the costs associated with restructuring and
consolidating certain of its operations. The restructuring included the
nonrecurring costs of severance payments, relocation, environmental
remediation and disposal of assets related to the consolidation of certain
operations in the Lighting Segment. This included the closing of one of three
consumer lighting plants, disposition of the Company's electronic ballast
technology and related assets, and the consolidation of certain manufacturing
and administrative functions. Other charges relate to the discontinuance of a
joint venture and other nonproducing assets.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(NOTE 4) INCOME TAXES
Effective January 1, 1993, the Company adopted the asset and liability method
of SFAS No. 109, "Accounting for Income Taxes." The Company previously used
the asset and liability method under SFAS No. 96, "Accounting for Income
Taxes." The effect of this change on net income for 1993 was not significant.
<TABLE>
<CAPTION>
Dollars in thousands
A summary of the provision for income
taxes follows: 1994 1993 1992
<S> <C> <C> <C>
Currently payable:
Federal $ 3,614 $ 3,545 $ 3,352
State 850 1,100 810
Foreign 1,801 1,220 610
------ ------ ------
6,265 5,865 4,772
Deferred:
Federal and state 1,366 (2,200) (2,662)
Foreign 25 350 170
______ ______ ______
1,391 (1,850) (2,492)
______ ______ ______
Total provision for income taxes $ 7,656 $ 4,015 $ 2,280
The components of the provision
(benefit) for deferred income taxes
are as follows: 1994 1993 1992
Organization restructuring $ 814 $ (983) $(1,638)
Depreciation (382) (414) (850)
Inventory valuation 944 (598) _
Other 15 145 (4)
Total provision for deferred income ------ ------ ------
taxes $ 1,391 $(1,850) $(2,492)
The components of the deferred tax assets and
deferred tax liabilities at December 31 are
as follows: 1994 1993
Deferred tax assets:
Net operating loss carryforwards $ 2,713 $ 3,078
Reserve for uncollectible accounts receivable 524 538
Inventory valuation 1,516 1,566
Accrued compensation expenses 2,798 2,652
Organization restructuring 2,244 3,058
Other 217 504
------ ------
10,012 11,396
Less valuation allowance 2,713 3,078
------ ------
Deferred tax assets $ 7,299 $ 8,318
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(NOTE 4) INCOME TAXES (CONTINUED)
<TABLE>
<CAPTION>
Dollars in thousands
(Continued) 1994 1993
<S> <C> <C>
Deferred tax liabilities:
Depreciation of fixed assets $ 6,167 $ 6,669
Inventory valuation 1,394 -
Pension expense 938 904
Other 590 769
------ ------
Deferred tax liabilities 9,089 8,342
------ ------
Net deferred tax liability $ 1,790 $ 24
Classification:
Current asset $ 5,874 $ 7,031
Long-term asset 1,425 1,287
Current liability 1,405 -
Long-term liability 7,684 8,342
------ ------
Net deferred tax liability $ 1,790 $ 24
</TABLE>
SFAS No. 109 requires that deferred tax assets and liabilities are classified
according to the related asset and liability classification on the balance
sheet.
The realization of deferred tax assets is dependent upon the Company
generating future taxable income when temporary differences become deductible.
Based upon historical and projected levels of taxable income, management
believes it is more likely than not the Company will realize the benefits of
the deductible differences, net of the valuation allowance of $2,713,000. The
valuation allowance is provided for loss carryforwards in states and foreign
jurisdictions, the realization of which is not assured within the
carryforward periods.
<TABLE>
<CAPTION>
Dollars in thousands
The U.S. and foreign components of income (loss)
before income taxes follow: 1994 1993 1992
<S> <C> <C> <C>
Income (loss) before income taxes:
United States $13,628 $ 5,669 $ 2,538
Foreign 4,570 2,151 (2,290)
------ ------ ------
Income before income taxes $18,198 $ 7,820 $ 248
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(NOTE 4) INCOME TAXES (CONTINUED)
<TABLE>
<CAPTION>
Dollars in thousands
A reconciliation of the normal statutory federal
income tax with the Company's provision for
Income taxes follows: 1994 1993 1992
<S> <C> <C> <C>
Income taxes computed at U.S. statutory rates $ 6,369 $ 2,659 $ 84
State income taxes, net of federal taxes 553 570 350
Nondeductible amortization of intangible assets 561 538 538
Currently (utilizable) unutilizable
benefit of foreign losses (262) 429 1,229
Effect of foreign tax rates 343 395 303
Refunds and overaccruals of prior years' taxes _ (532) _
Other 92 (44) (224)
------ ------ ------
Total income taxes $ 7,656 $ 4,015 $ 2,280
</TABLE>
The Company's foreign subsidiaries have accumulated undistributed earnings
($17,900,000) on which U.S. taxes have not been provided. Under current tax
regulations and with the availability of certain tax credits, it is
management's belief that the likelihood of the Company incurring significant
taxes on any distribution of such accumulated earnings is remote. Dividends,
if any, would be paid principally from current earnings.
At December 31, 1994, the Company had foreign net operating loss carryforwards
for financial reporting purposes of approximately $6,100,000. For income tax
purposes, these carryforwards are approximately $5,500,000 and expire
$5,300,000 and $200,000 on January 1, 2000 and 2001, respectively.
The Company made federal, state and foreign income tax payments of $7,025,000
in 1994, $4,655,000 in 1993 and $4,147,000 in 1992.
(NOTE 5) LONG-TERM DEBT AND CREDIT ARRANGEMENTS
<TABLE>
<CAPTION>
Dollars in thousands
A summary of long-term debt follows: 1994 1993
<S> <C> <C>
Domestic:
9.36%, due through 2005 $77,270 $85,000
Other 860 1,221
Foreign (Germany):
7.28% (variable), due through 1996 1,420 1,267
Other 143 21
------ ------
Total long-term debt $79,693 $87,509
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(NOTE 5) LONG-TERM DEBT AND CREDIT ARRANGEMENTS (CONTINUED)
The fair value of the Company' long-term debt at December 31, 1994
approximates its carrying value.
Maturities of long-term debt for the next five years are as follows: 1995--
$8,832,000; 1996--$8,943,000; 1997--$8,850,000; 1998--$7,740,000 and 1999--
$7,730,000.
Certain loan agreements include restrictions on working capital and tangible
net worth and the payment of cash dividends and stock distributions. Under
the most restrictive of these arrangements, retained earnings of $14,000,000
are not restricted at December 31, 1994.
The Company has a $50,000,000 variable rate revolving line of credit expiring
July 14, 1995. In addition, the Company has short-term lines of credit under
which it may borrow up to $18,000,000, expiring on various dates in 1995. The
Company plans to renew these lines annually.
Actual cash paid for interest was $9,253,000 in 1994, $10,185,000 in 1993 and
$10,454,000 in 1992.
(NOTE 6) SHAREHOLDERS' EQUITY
At the April 21, 1994 Annual Meeting, the Company's shareholders approved a
Nonemployee Director Stock Option Plan. Under the Plan, each continuing non-
employee director in office on the date of each annual meeting is awarded a
stock option for the purchase of 2,000 shares of common stock at not less than
market value at date of grant. The Plan provides for options to be awarded at
each annual meeting beginning in 1994 and continuing through 2004 or until
250,000 options have been granted.
Under the Company's 1987 Incentive Stock Plan, options may be granted to
employees through 1997 at not less than market value at date of grant and
expire ten years after date of grant.
The Company's 1977 Incentive Stock Plan, amended in 1982 for the issuance of
incentive stock options, terminated in 1987, except with respect to
outstanding options which will remain exercisable until 1997.
<TABLE>
<CAPTION>
A summary of outstanding stock options
for all plans follows: 1994 1993 1992
<S> <C> <C> <C>
Outstanding at beginning of year 412,801 456,068 387,710
Granted at $13.37 to $14.87 per share
in 1994, $10.00 to $12.62 in 1993,
and $10.00 in 1992 205,500 105,000 76,750
Canceled or expired (28,167) (110,025) (7,457)
Exercised at $9.87 to $10.75 per share
in 1994, $9.87 to $10.80 in 1993,
and $8.65 in 1992 (32,083) (38,242) (935)
------- ------- -------
Outstanding at end of year 558,051 412,801 456,068
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(NOTE 6) SHAREHOLDERS' EQUITY (CONTINUED)
Options outstanding at December 31, 1994, of which 292,967 options were
exercisable, had option prices ranging from $9.87 to $18.75 (with an average
option price of $12.88) and expire at various dates between December 12, 1995
and December 14, 2004. There were 270,176 shares reserved for future grant,
of which 230,000 shares are reserved for the Nonemployee Director Stock Option
Plan.
On December 23, 1987, the Company's Board of Directors authorized the
repurchase, at management's discretion, of up to 1,000,000 shares of its
common stock in the open market or through privately negotiated transactions.
At December 31, 1994, 377,023 shares had been purchased at a cost of
$5,759,000 (none purchased since 1991).
The Board of Directors of the Company adopted a shareholder rights plan (the
Rights Plan) in 1987 pursuant to which preferred stock purchase rights (the
Rights) were declared and distributed to the holders of the Company's common
stock. On October 18, 1991, the Board of Directors of the Company adopted
certain amendments to the Rights Plan. The Rights Plan, as amended, provides
that the Rights separate from the common stock and become exercisable if a
person or group of persons working together acquires at least 20% of the
common stock (a 20% Acquisition) or announces a tender offer which would
result in ownership by that person or group of at least 20% of the common
stock (a 20% Tender Offer). Upon a 20% Acquisition, the holders of Rights may
purchase the common stock at half-price. If following the separation of the
Rights from the common stock the Company is acquired in a merger or sale of
assets, holders of Rights may purchase the acquiring company's stock at half-
price.
Notwithstanding the foregoing discussion, under the Rights Plan, the Board of
Directors has flexibility in certain events. In order to provide maximum
flexibility, the Board of Directors may delay the date upon which the Rights
become exercisable in the event of a 20% Tender Offer. In addition, the Board
of Directors has the option to exchange one share of common stock for each
outstanding Right at any time after a 20% Acquisition but before the acquirer
has purchased 50% of the outstanding common stock. The Rights may also be
redeemed at two cents per Right at any time prior to a 20% Acquisition or a
20% Tender Offer.
(NOTE 7) RETIREMENT PLANS
The Company has noncontributory defined benefit pension plans principally
covering its hourly union employees. Such plans primarily provide flat
benefits of stated amounts for each year of service. The Company's policy is
to fund pension costs deductible for income tax purposes.
The Company also sponsors defined contribution pension plans covering
substantially all employees whose compensation is not determined by collective
bargaining. Annual contributions are determined by the Board of Directors.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(NOTE 7) RETIREMENT PLANS (CONTINUED)
<TABLE>
<CAPTION>
Dollars in thousands
A summary of pension expense follows: 1994 1993 1992
<S> <C> <C> <C>
Defined benefit plans:
Service cost-benefits earned during the period $ 503 $ 448 $ 415
Interest cost on projected benefit obligation 1,492 1,518 1,472
Actual return on plan assets (3) (1,735) (1,494)
Net amortization and deferral (1,394) 114 (98)
------ ------ ------
Net pension cost of defined benefit plans 598 345 295
Defined contribution plans 2,540 1,214 364
Multi-employer plans for certain union
employees and other 264 450 572
------ ------ ------
Total pension expense $ 3,402 $ 2,009 $ 1,231
</TABLE>
The following table sets forth the funded status and amounts recognized in the
consolidated balance sheets for the Company's defined benefit pension plans:
<TABLE>
Dollars in thousands
1994 1993
---------------------------- -----------------------------
Plans Whose Plans Whose Plans Whose Plans Whose
Assets Exceed Accumulated Assets Exceed Accumulated
Accumulated Benefits Exceed Accumulated Benefits Exceed
Benefits Assets Benefits Assets
<S> <C> <C> <C> <C>
Actuarial present value of
benefit obligations:
Vested benefit obligation $ 8,674 $ 8,477 $ 4,135 $16,985
Accumulated benefit obligation 8,968 8,658 4,166 17,616
Projected benefit obligation 9,331 8,658 4,600 17,616
Plan assets at fair value 9,376 8,023 5,064 15,443
------ ------ ------ ------
Projected benefit obligation less
than (in excess of) plan assets 45 (635) 464 (2,173)
Unrecognized net loss 590 1,045 72 3,241
Unrecognized net obligation,
net of amortization 647 714 2 1,081
Adjustment required to recognize
minimum liability _ (1,759) _ (4,322)
------ ------ ------ ------
Prepaid pension asset (liability) $ 1,282 $ (635) $ 538 $(2,173)
</TABLE>
At December 31, 1994, approximately 95% of plan assets were invested in listed
stocks and bonds.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(NOTE 7) RETIREMENT PLANS (CONTINUED)
<TABLE>
<CAPTION>
Dollars in thousands
The assumptions used in the accounting for the
funded status of defined benefit plans follow: 1994 1993 1992
<S> <C> <C> <C>
Weighted average discount rates 9.00% 7.50% 8.75%
Rates of increase in compensation levels 5.00% 5.00% 5.00%
Expected long-term rate of return on assets 9.00% 9.00% 9.00%
</TABLE>
(NOTE 8) OTHER POSTRETIREMENT BENEFIT PLANS
The Company provides postretirement medical and life insurance benefits for
certain retirees and employees. Effective January 1, 1993, the Company adopted
SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other than
Pensions." This statement requires the cost of postretirement benefits to be
accrued during the service lives of employees. The Company elected the
prospective method of recognizing the accumulated postretirement benefit
obligation. The effect of adopting SFAS No. 106 on 1993 on-going operations
was an increase in expense of $294,000 ($176,000 net of income tax benefit).
Prior to 1993, the Company recognized the cost of these benefits on the cash
basis.
The following table presents the plans' funded status reconciled with amounts
recognized in the Company's consolidated balance sheets at December 31, 1994
and 1993:
<TABLE>
<CAPTION>
Dollars in thousands
Accumulated postretirement
benefit obligation: 1994 1993
<S> <C> <C>
Retiree participants $ 4,637 $ 5,325
Fully eligible active participants 398 410
Other active participants 1,225 1,300
------ ------
6,260 7,035
Unrecognized prior service cost (42) -
Unrecognized net loss (631) (798)
Unrecognized transition obligation (4,162) (4,393)
Previously recognized liability - (705)
------ ------
Accrued postretirement benefit cost
included in other liabilities $ 1,425 $ 1,139
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(NOTE 8) OTHER POSTRETIREMENT BENEFIT PLANS (CONTINUED)
<TABLE>
<CAPTION>
Dollars in thousands
Net periodic postretirement benefit cost for
1994 and 1993 includes the following components: 1994 1993
<S> <C> <C>
Service cost $ 93 $ 80
Interest cost 491 468
Net amortization and deferral 294 231
--- ---
Net periodic postretirement benefit cost $878 $779
</TABLE>
For measurement purposes, a 10% annual rate of increase in the per capita cost
of future health benefits was assumed for 1995; the rate was assumed to
decrease gradually to 5.5% by the year 2004, converging toward the assumed
long-term rate of 5% thereafter. The health care cost trend rate assumption
has a significant effect on the amounts reported. For example, increasing the
assumed health care cost trend rates by one percentage point in each year
would increase the accumulated postretirement benefit obligation as of
December 31, 1994 by $580,000 and the aggregate of the service and interest
cost components of net periodic postretirement benefit cost for the year ended
December 31, 1994 by $60,000. The weighted average discount rate used in
determining the accumulated postretirement benefit obligation was 9% and 7.25%
as of December 31, 1994 and 1993, respectively.
(NOTE 9) LEASES, COMMITMENTS AND CONTINGENCIES
Total rental expense amounted to $4,840,000 in 1994, $5,321,000 in 1993 and
$5,444,000 in 1992. Future minimum rentals (on leases in effect at December
31, 1994) for the five years ending December 31, 1999, and in the aggregate
thereafter, are as follows: 1995--$3,222,000; 1996--$2,831,000; 1997--
$2,366,000; 1998--$2,009,000; 1999--$1,576,000 and thereafter--$7,115,000.
Capital leases are not significant.
The Company has various letters of credit outstanding in the amount of
$9,658,000 at December 31, 1994.
The Company is involved in environmental remedial efforts at certain of its
present and former locations. When costs can be reasonably estimated, the
Company records appropriate liabilities for such matters.
In the normal course of business, the Company and its subsidiaries are parties
to legal proceedings. When costs can be reasonably estimated, the Company
records appropriate liabilities for such matters.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(NOTE 10) ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
<TABLE>
<CAPTION>
Dollars in thousands
A summary of accrued expenses and other
current liabilities follows: 1994 1993
<S> <C> <C>
Accrued wages, taxes and withholdings $ 7,757 $ 6,791
Accrued insurance 5,926 5,698
Accrued retirement expense 3,448 2,024
Accrued sales expense 3,786 3,254
Accrued interest expense 3,322 3,350
Income taxes payable 2,091 3,571
Accrued restructuring costs 1,945 2,549
Other current liabilities 5,539 3,484
Total accrued expenses and other current ------ ------
liabilities $33,814 $30,721
</TABLE>
(NOTE 11) SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The following is a tabulation of the unaudited quarterly results of operations
for the years ended December 31, 1994 and 1993:
Dollars in thousands, except per share data
<TABLE>
<CAPTION>
Net Income
Net Sales Gross Profit Net Income Per Share
1994 1993 1994 1993 1994 1993 1994 1993
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1st Qtr. $109,391 $112,074 $ 29,650 $ 29,653 $ 1,011 $ 655 $ .10 $.07
2nd Qtr. 117,288 111,001 32,815 30,128 5,046 (1)(2) 1,175 .50 (1)(2) .12
3rd Qtr. 119,035 117,322 33,937 31,217 2,820 (2) 1,552 .28 (2) .15
4th Qtr. 110,851 109,752 30,825 32,755 1,665 (2) 423 (3) .17 (2) .04 (3)
------- ------- ------- ------- ------ ----- ---- ---
$456,565 $450,149 $127,227 $123,753 $10,542 $3,805 $1.05 $.38
<FN>
(1) Net income in the second quarter of 1994 includes a gain of $3,000,000
($.30 per share) from the sale of the Builders Brass Works and the
Portland Willamette Divisions.
(2) Net income in the second, third and fourth quarters of 1994 includes gains
of $440,000 ($.04 per share), $280,000 ($.03 per share) and $472,000 ($.05
per share), respectively, from the reduction of LIFO inventory quantities.
(3) Net income in the fourth quarter of 1993 includes a charge of $2,040,000
($.20 per share) for restructuring costs, and a credit of $1,148,000
($.11 per share) from a change in the method of applying LIFO as required
by changes in the nature of the Company's business.
</FN>
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(NOTE 12) INDUSTRY SEGMENT INFORMATION
Dollars in thousands
Industry segment
information follows:
<TABLE>
<CAPTION>
Compressors
& Vacuum
Lighting Pumps Other Corporate Consolidated
<S> <C> <C> <C> <C> <C>
1994
Net sales $304,047 $146,323 $ 6,195 _ $456,565
Operating income (loss) 4,856 29,252 (263) _ 33,845
General corporate expenses _ _ _ $10,709 10,709
Identifiable assets 213,904 76,753 _ 14,414 305,071
Depreciation and
amortization expense 9,829 5,224 241 230 15,524
Capital expenditures 6,364 9,758 83 96 16,301
1993
Net sales $298,432 $127,896 $23,821 _ $450,149
Operating income 120 26,183 710 _ 27,013
General corporate expenses _ _ _ $ 9,200 9,200
Identifiable assets 221,343 62,323 14,099 4,995 302,760
Depreciation and
amortization expense 10,955 4,578 725 259 16,517
Capital expenditures 6,966 6,237 579 126 13,908
1992
Net sales $286,417 $110,022 $24,315 _ $420,754
Operating income 2,659 19,147 412 _ 22,218
General corporate expenses _ _ _ $ 9,969 9,969
Identifiable assets 214,561 59,976 14,876 5,040 294,453
Depreciation and
amortization expense 10,974 4,331 768 266 16,339
Capital expenditures 7,806 4,384 521 441 13,152
</TABLE>
Intersegment and interlocation sales are not significant and have been
eliminated from the above tabulation. Operating income by segment is gross
profit less operating expenses (including applicable restructuring costs),
excluding interest, general corporate expenses, other income, and income
taxes. Capital expenditures exclude property, plant and equipment of acquired
companies at date of acquisition.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(NOTE 12) INDUSTRY SEGMENT INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
Dollars in thousands
Information by
geographic area follows: United
States Canada Europe Eliminations Consolidated
<S> <C> <C> <C> <C> <C>
1994
Net sales to unaffiliated customers $381,195 $31,605 $43,765 _ $456,565
Inter-area sales 9,879 266 5,248 $(15,393) _
------- ------ ------ ------- -------
Total net sales 391,074 31,871 49,013 (15,393) 456,565
Operating income 28,719 412 4,714 _ 33,845
Identifiable assets 253,372 22,653 29,046 _ 305,071
1993
Net sales to unaffiliated customers $379,968 $31,268 $38,913 _ $450,149
Inter-area sales 5,716 83 4,586 $(10,385) _
------- ------ ------ ------- -------
Total net sales 385,684 31,351 43,499 (10,385) 450,149
Operating income (loss) 22,716 (60) 4,357 _ 27,013
Identifiable assets 250,433 27,113 25,214 _ 302,760
1992
Net sales to unaffiliated customers $348,160 $34,303 $38,291 _ $420,754
Inter-area sales 5,444 153 5,271 $(10,868) _
------- ------ ------ ------- -------
Total net sales 353,604 34,456 43,562 (10,868) 420,754
Operating income (loss) 21,758 (3,276) 3,736 _ 22,218
Identifiable assets 239,056 27,284 28,113 _ 294,453
</TABLE>
<PAGE>
FINANCIAL REVIEW
RESPONSIBILITY FOR FINANCIAL REPORTING
The Board of Directors and Shareholders
Thomas Industries Inc.
The financial statements herein have been prepared under management direction
from accounting records which management believes present fairly the
transactions and financial position of the Company. They were developed in
accordance with generally accepted accounting principles appropriate in the
circumstances.
Management has established internal control systems and procedures, including
an internal audit function, to provide reasonable assurance that assets are
maintained and accounted for in accordance with its authorizations and that
transactions are recorded in a manner to ensure reliable financial
information. The Company has a formally stated and communicated policy
demanding of employees high ethical standards in their conduct of its
business.
The Audit Committee of the Board of Directors is composed of outside directors
who meet regularly with management, internal auditors, and independent
auditors to review audit plans and fees, independence of auditors, internal
controls, financial reports, and related matters. The Committee has
unrestricted access to the independent and internal auditors with or without
management attendance.
<TABLE>
<C> <C>
/S/ Timothy C. Brown /S/ Phillip J. Stuecker
Timothy C. Brown Phillip J. Stuecker
President and Vice President of Finance
Chief Executive Officer Chief Financial Officer
Secretary
</TABLE>
Louisville, Kentucky
February 9, 1995
<PAGE>
FINANCIAL REVIEW
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Thomas Industries Inc.:
We have audited the accompanying consolidated balance sheets of Thomas
Industries Inc. and subsidiaries as of December 31, 1994 and 1993, and the
related consolidated statements of income, shareholders' equity, and cash
flows for the years then ended. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits. The accompanying consolidated financial statements of Thomas
Industries Inc. and subsidiaries for the year ended December 31, 1992, were
audited by other auditors whose report thereon dated February 11, 1993,
expressed an unqualified opinion on those statements.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the 1994 and 1993 consolidated financial statements referred
to above present fairly, in all material respects, the financial position of
Thomas Industries Inc. and subsidiaries as of December 31, 1994 and 1993, and
the results of their operations and their cash flows for the years then ended
in conformity with generally accepted accounting principles.
As discussed in Note 8 to the consolidated financial statements, the Company
changed its method of accounting for postretirement benefits in 1993 to adopt
the provisions of the Financial Accounting Standards Board's Statement of
Financial Accounting Standards (SFAS) No. 106, "Employers' Accounting for
Postretirement Benefits Other than Pensions." As discussed in Note 4, the
Company changed its method of accounting for income taxes in 1993 to adopt the
provisions of SFAS No. 109, "Accounting for Income Taxes." As discussed in
Note 1, the Company changed its method of accounting for certain inventories
in 1993.
/S/ KPMG Peat Marwick LLP
Louisville, Kentucky
February 9, 1995
<PAGE>
11 YEAR SUMMARY OF OPERATIONS AND STATISTICS
<TABLE>
<CAPTION>
Dollars in thousands except per share
1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C>
Earnings Statistics (A)
Net sales $456,565 $450,149 $420,754 $408,365 $461,725 $436,577
Cost of products sold 329,338 326,396 303,428 294,900 327,993 305,092
Selling, general and administrative
expenses 104,091 102,440 101,473 96,206 103,380 100,705
Interest expense 9,225 10,279 10,428 11,004 12,198 10,464
Income before income taxes 18,198 7,820 248 7,248 20,186 34,791
As a % of net sales 4.0% 1.7% 0.1% 1.8% 4.4% 8.0%
Income taxes 7,656 4,015 2,280 3,460 8,484 14,175
Effective tax rate 42.1% 51.3% N/A 47.7% 42.0% 40.7%
Net income (loss) 10,542 3,805 (D) (2,032) (E) 3,788 11,702 20,616
Financial Position (A)
Working capital $77,558 $78,466 $70,448 $77,332 $91,483 $105,028
Current ratio 2.0 to 1 2.1 to 1 2.0 to 1 2.2 to 1 2.4 to 1 2.4 to 1
Property, plant and equipment, net 75,962 76,587 79,799 84,446 87,208 80,675
Total assets 305,071 302,760 294,453 303,032 323,350 333,327
Return on ending assets 3.5% 1.3% (0.7)% 1.3% 3.6% 6.2%
Long-term debt 79,693 87,509 89,900 93,309 108,853 117,254
Long-term debt to total capital 37.3% 41.2% 41.0% 40.2% 43.4% 45.8%
Shareholders' equity 133,766 125,049 129,545 138,575 141,694 138,999
Return on average shareholders' equity 8.1% 3.0% (1.5)% 2.7% 8.3% 15.6%
Data Per Common Share (B)
Net income (loss) $1.05 $.38 ($.20) $.38 $1.15 $2.02
Dividends declared: cash .40 .40 .40 .76 .76 .73
stock
Shareholders' equity 13.27 12.44 12.94 13.84 14.15 13.59
Price range 16-3/8 14 14-1/8 14-3/4 20-7/8 20-5/8
- 12-3/4 - 9-1/8 - 8-3/8 - 9-1/4 - 9-1/4 - 17-5/8
Closing price 14-3/8 13-1/8 9-1/8 12 10 20-1/4
Price/earnings ratio 13.7 34.5 N/A 31.6 8.7 10.0
Other Data
Cash dividends declared $4,024 $4,014 $4,004 $7,608 $7,726 $7,437
Expenditures for property, plant
and equipment (C) 16,301 13,908 13,152 11,636 17,161 20,974
Depreciation and amortization 15,524 16,517 16,339 16,096 15,658 11,512
Average number of employees 3,190 3,390 3,480 3,530 3,930 3,700
Sales per average number of employees 143.1 132.8 120.9 115.7 117.5 118.0
Number of shareholders of record 2,677 2,903 3,154 3,308 3,249 3,386
Average number common shares
outstanding (B) 10,060,436 10,035,172 10,010,746 10,010,000 10,178,547 10,183,513
Segment Information (A)
Net sales
Lighting $304,047 $298,432 $286,417 $282,964 $332,802 $306,146
Compressors & Vacuum Pumps 146,323 127,896 110,022 99,444 98,355 87,466
Other 6,195 23,821 24,315 25,957 30,568 42,965
------- ------- ------- ------- ------- -------
Total net sales $456,565 $450,149 $420,754 $408,365 $461,725 $436,577
Operating income (loss)
Lighting $ 4,856 $ 120 (D) $ 2,659 (E) $ 7,910 $23,746 $22,135
Compressors & Vacuum Pumps 29,252 26,183 19,147 16,883 15,050 15,113
Other (263) 710 412 1,133 1,195 4,558
------ ------ ------ ------ ------ ------
Total operating income $33,845 $27,013 $22,218 $25,926 $39,991 $41,806
<PAGE>
11 YEAR SUMMARY OF OPERATIONS AND STATISTICS <CONTINUED>
1988 1987 1986 1985 1984
<S> <C> <C> <C> <C> <C>
Earnings Statistics (A)
Net sales $347,578 $321,911 $296,195 $294,711 $275,679
Cost of products sold 237,586 212,271 197,125 199,029 186,774
Selling, general and administrative
expenses 83,212 80,160 72,322 66,910 60,229
Interest expense 3,983 3,500 2,615 4,018 3,613
Income before income taxes 29,567 29,516 24,216 27,480 28,449
As a % of net sales 8.5% 9.2% 8.2% 9.3% 10.3%
Income taxes 11,060 (F) 12,380 11,460 11,247 12,594
Effective tax rate 37.4% 41.9% 47.3% 40.9% 44.3%
Net income (loss) 18,507 17,136 12,756 16,233 15,855
Financial Position (A)
Working capital $78,180 $84,752 $73,939 $70,224 $83,167
Current ratio 2.7 to 1 3.3 to 1 3.8 to 1 3.3 to 1 3.6 to 1
Property, plant and equipment, net 44,133 37,957 32,541 31,488 33,212
Total assets 207,624 208,182 168,812 166,179 178,214
Return on ending assets 8.9% 8.2% 7.6% 9.8% 8.9%
Long-term debt 32,790 35,294 20,133 22,329 43,074
Long-term debt to total capital 20.8% 21.4% 14.6% 16.9% 30.1%
Shareholders' equity 124,701 129,773 117,411 109,962 99,851
Return on average shareholders' equity 14.5% 13.9% 11.2% 15.5% 16.7%
Data Per Common Share (B)
Net income (loss) $1.70 $1.56 $1.17 $1.50 $1.47
Dividends declared: cash .66 .62 .56 .53 .49
stock 5% 5% 10% 5% 10%
Shareholders' equity 12.25 11.78 10.72 10.11 9.25
Price range 23-3/8 20-1/2 22-1/8 17-1/8 14-7/8
- 15 - 13-1/4 - 14 - 11-7/8 - 9-3/4
Closing price 18-1/2 14-3/4 14-5/8 17-1/8 14-3/8
Price/earnings ratio 10.9 9.5 12.5 11.4 9.7
Other Data
Cash dividends declared $7,211 $6,793 $6,130 $5,794 $5,243
Expenditures for property, plant
and equipment (C) 14,583 9,723 7,017 7,395 7,090
Depreciation and amortization 8,494 7,313 6,096 6,017 5,446
Average number of employees 3,170 3,140 3,080 3,160 3,180
Sales per average number of employees 109.6 102.5 96.2 93.3 86.7
Number of shareholders of record 3,530 3,702 3,830 3,940 4,000
Average number common shares
outstanding (B) 10,916,302 10,999,754 10,920,883 10,833,894 10,788,728
Segment Information (A)
Net sales
Lighting $217,811 $201,785 $201,694 $186,617 $156,941
Compressors & Vacuum Pumps 67,259 51,650 34,787 35,511 39,647
Other 62,508 68,476 59,714 72,583 79,091
------- ------- ------- ------- -------
Total net sales $347,578 $321,911 $296,195 $294,711 $275,679
Operating income (loss)
Lighting $16,957 $21,467 $22,737 $20,976 $17,110
Compressors & Vacuum Pumps 12,029 8,742 3,206 (G) 6,484 8,268
Other 6,660 8,305 6,174 7,314 9,222
------ ------ ------ ------ ------
Total operating income $35,646 $38,514 $32,117 $34,774 $34,600
<PAGE>
<FN>
Note: See accompanying Notes to Consolidated Financial Statements and
Management's Discussion and Analysis of Financial Condition and Results
of Operations
(A) Acquisitions and divestitures--major acquisitions during the period
include Capri and Gardco in 1984, Lumec and ASF GmbH in 1987, and Day-
Brite in 1989. Major divestitures and the effect on net income in the
year of divestiture include North American Decorative Products and Lennon
Wallpaper (minority interests), Pouliot Designs, and Paint Applicator in
1988 for a gain of $2,598,000; the Tool and Fastener Division in 1989 for
a gain of $5,223,000; and Builders Brass Works and Portland Willamette in
1994 for a gain of $3,000,000
(B) Adjusted for stock dividends
(C) Does not include property, plant and equipment of companies at dates
acquired
(D) Includes pretax charge of $3,500,000, or $2,040,000 after-tax, for
restructuring costs
(E) Includes pretax charge of $3,604,000 allocated to Lighting ($5,925,000
total), or $3,986,000 after-tax, for restructuring costs
(F) Includes credit of $800,000 cumulative effect of change in accounting for
income taxes
(G) Includes pretax charge of $2,600,000 litigation settlement
</FN>
</TABLE>
<PAGE>
OFFICERS AND BOARD OF DIRECTORS
<TABLE>
<CAPTION>
CORPORATE OFFICERS
<C> <C> <C>
Timothy C. Brown Bernard R. Berntson Peter Bissinger
President Vice President, Vice President,
Chief Executive Officer General Manager General Manager
Chairman, Executive Committee North American Compressor European Compressor
Group Group
Richard J. Crossland Gilbert R. Grady, Jr. Clifford C. Moulton
Vice President Vice President Vice President
Lighting Group Manager Corporate Human Resources Compressor & Vacuum
Pump Group Manager
Ronald D. Schneider C. Barr Schuler Phillip J. Stuecker
Vice President Vice President Vice President of
Lighting Operations Corporate Development Finance
Treasurer Chief Financial
Officer
Secretary
David J. Stumler Ronald D. Wiseman
Assistant Secretary Controller
Assistant Secretary
BOARD OF DIRECTORS
Timothy C. Brown 1*,5 Walter S. Davis 1 Peter P. Donis 2*,3,5
Louisville, Kentucky (Retiring 4/20/95) Peoria, Illinois
President Milwaukee, Wisconsin Retired President
Chief Executive Officer Chairman of the Board Caterpillar Inc.
Chairman, Executive Thomas Industries Inc.
Committee Attorney and Member
Thomas Industries Inc. Davis & Kuelthau, S.C.
Wallace H. Dunbar 3 Roger P. Eklund 1,5* H. Joseph Ferguson 4*
Louisville, Kentucky Chicago, Illinois Portland, Oregon
Chairman Attorney and Partner Founder and Director
Americo Group Eklund and Eklund Ferguson, Wellman,
Rudd, Purdy &
Van Winkle, Inc.
Gene P. Gardner 2 Lawrence E. Gloyd 1,3* Ralph D. Ketchum 1,3,5
Louisville, Kentucky Rockford, Illinois Cleveland, Ohio
Chairman Chairman, President and President
Beaver Dam Coal Company Chief Executive Officer RDK Capital Inc.
CLARCOR
Franklin J. Lunding, Jr. 4 Bernard W. Rogers, 2,4
Monterey, California (Retiring 4/20/95)
Attorney McLean, Virginia
Private Practice General
U.S. Army (Retired)
<FN>
1. Member of the Executive Committttee (*-Chairman)
2. Member of the Audit Committee (*-Chairman)
3. Member of the Compensation Committee (*-Chairman)
4. Member of the Investment Committee (*-Chairman)
5. Member of the Nominating Committee (*-Chairman)
</FN>
</TABLE>
<PAGE>
DIVISIONS AND SUBSIDIARIES
<TABLE>
<CAPTION>
LIGHTING GROUP
<C> <C> <C>
Richard J. Crossland David J. Stumler Donald S. Varshine
Corporate Vice President Vice President, Vice President
Lighting Group Manager Lighting, Finance Logistics
Corporate Assistant
Secretary
Andy Ashley Ronald D. Schneider
Vice President Corporate Vice President
Sales Lighting Operations
DIVISION MANAGERS THOMAS LIGHTING BRANDS
<C> <C>
Robert T. Armstrong CAPRI--Specification grade downlighting,
Vice President, distributor grade downlighting, track
General Manager lighting
Commercial & Industrial
Division MATRIX--Controls
Tupelo, Mississippi
DAY-BRITE--Fluorescent and H.I.D. lighting
Richard S. Buehner systems including floodlighting, sports
General Manager lighting, VDT lighting, and HI/LO warehouse
Consumer Division lighting
Louisville, Kentucky
EMCO--Economy area luminaires
William T. Gendron
Vice President, GARDCO--High-performance area, flood, parking,
General Manager and pathway lighting
Architectural Outdoor
Division LUMEC--Specification grade decorative/functional
San Leandro, California street and area lighting
Jean Francois Simard McPHILBEN--Architectural building mounted
President & General lighting for outdoor applications as well as
Manager exits and electrical signage for commercial/
Lumec, Boisbriand, Quebec industrial applications
Barry P. Thomson OMEGA--Architectural grade specification
General Manager downlighting
Canadian Division
Markham , Ontario THOMAS--Decorative indoor and outdoor lighting
for the home and light commercial applications
LUMEC-SCHREDER--Roadway luminaires (joint venture)
THOMAS-SCHREDER--Tunnel lighting (joint venture)
OPERATIONS
R. Mark Norsworthy YAMADA-DAY-BRITE--Commercial lighting
Vice President, (joint venture, Tokyo, Japan)
Operations Manager
Hopkinsville, Kentucky,
and Dyersburg, Tennessee,
Facilities
Raymond L. Zaccagnini
Vice President,
Operations Manager
Tupelo, Mississippi, Facility
</TABLE>
<PAGE>
DIVISIONS AND SUBSIDIARIES
<TABLE>
<CAPTION>
COMPRESSOR & VACUUM PUMP GROUP
<C>
Clifford C. Moulton
Corporate Vice President
Compressor & Vacuum Pump
Group Manager
<C> <C>
Bernard R. Berntson John R. Kuecker Rainer K. Thielman
Corporate Vice President Operations Manager Operations Manager
General Manager Monroe, Louisiana Wuppertal, Germany
North American Group
Peter Bissinger Klaus P. Moger
Corporate Vice President Operations Manager
General Manager Puchheim, Germany
European Group
</TABLE>
Piston Air Compressors and Vacuum Pumps
Diaphragm Air Compressors and Vacuum Pumps
Rotary Vane Air Compressors and Vacuum Pumps
Vibrating Diaphragm/Linear Air Compressors and Vacuum Pumps
Peristaltic Liquid Pumps
Air Motors
Air Powered Vacuum Pumps
Operations in Sheboygan, Wisconsin; Monroe, Louisiana; Atlanta, Georgia;
Puchheim, Memmingen, and Wuppertal, Germany; and Alton, England. Sales and
Engineering in Taipei, Taiwan; Tokyo, Japan; and Joinville, Brazil. Purchasing
and Sales in Bologna, Italy.
<PAGE>
CORPORATE INFORMATION
THOMAS INDUSTRIES INC.
A Delaware Corporation
Executive Office
4360 Brownsboro Road, Suite 300
Post Office Box 35120
Louisville, Kentucky 40232
Telephone: 502/893-4600
An Equal Opportunity Employer
Annual Meeting
The annual meeting will be held at 10 a.m. on Thursday, April 20, 1995, at The
Seelbach Hotel, Louisville, Kentucky. A notice will be mailed to each
shareholder.
Form 10-K Report
Any beneficial shareholder will be furnished a copy of the Company's annual
report on Form 10-K to the Securities and Exchange Commission, without
exhibits, at no charge, upon written request to Phillip J. Stuecker,
Secretary, at the Company's Executive Office.
Transfer Agent and Registrar
Wachovia Bank of North Carolina, N.A.
301 North Church Street (27102)
Post Office Box 3001
Winston-Salem, North Carolina 27105
Direct Deposit of Cash Dividends
For information concerning Thomas Industries Inc.'s Direct Deposit of Cash
Dividends service, please contact:
Wachovia Bank of North Carolina, N.A.
Dividend Deposit Service
Corporate Trust Department
Post Office Box 3001
Winston-Salem, North Carolina 27105
Automatic Dividend Reinvestment Plan
An Automatic Dividend Reinvestment Plan--administered by Wachovia Bank of
North Carolina, N.A.--is available to shareholders. The plan provides a
convenient, low-cost method for shareholders to increase their ownership in
Thomas Industries Inc. common stock. In addition, shareholders who elect to
participate can make optional cash payments to purchase more Thomas
Industries Inc. shares. Participation may begin with any regularly scheduled
dividend payment if an authorization form is completed and returned to the
administrator prior to the dividend record date. Shareholders wishing further
information may contact:
Wachovia Bank of North Carolina, N.A.
Dividend Reinvestment Section
Post Office Box 3001
Winston-Salem, North Carolina 27105
Stock Exchange
New York Stock Exchange
Symbol-TII
<PAGE>
<TABLE>
<CAPTION>
SUBSIDIARIES OF THE REGISTRANT
Percentage of
Place of Voting
Name of Company Incorporation Securities
<S> <C> <C>
ASF Gesellschaft fur Electrotechnische
Gerate mbH Germany 100%
ASF, Inc. Georgia 100%
Lighting Center Holdings, Inc. Tennessee 100%
Helmut Brey Verwaltung GmbH Germany 100%
Bluegrass Holdings Inc. Nevada 100%
Capri Lighting, Inc. California 100%
Thomas Industries Holdings Inc. Delaware 100%
Gardco Manufacturing, Inc. California 100%
Lumec, Inc. Province of Quebec, 100%
Canada
Pouliot Designs Corporation Minnesota 100%
T.I. Industries Corporation Delaware 100%
TI Pneumotive, Inc. Delaware 100%
Thomas Group U.K., Inc. Delaware 100%
Thomas Imports, Inc. Nevada 100%
Thomas Industries Corp. Province of Ontario, 100%
Canada
Thomas Industries Export, Inc. U.S. Virgin Islands 100%
Tupelo Holdings Inc. Delaware 100%
Thomas Lighting de Mexico, S.A. de C.V. Mexico 100%
Wilhelm Sauer GmbH and Company KG (WISA) Germany 100%
NON WHOLLY OWNED SUBSIDIARIES
Jackson Hardware Company, Ltd. Thailand 60%
Lumec-Schreder Inc. Province of Quebec, 50%
Canada
Thomas Americas Industria e
Commercio, LTDA Brazil 95%
Thomas-Schreder Company Delaware 50%
Yamada Day-Brite, Ltd. Japan 50%
</TABLE>
<PAGE>
Consent of Independent Auditors
We consent to incorporation by reference in the Registration Statement (No.
33-16257), (No. 33-51653), and (No. 33-54689) on Form S-8 of Thomas
Industries Inc. of our report dated February 9, 1995, relating to the
consolidated balance sheets of Thomas Industries Inc. and subsidiaries as of
December 31, 1994 and 1993, and the related consolidated statements of
income, shareholders' equity, and cash flows and related schedules for the
years then ended, which report appears in the December 31, 1994, annual
report on Form 10-K of Thomas Industries Inc.
Our report refers to a change in the method of accounting for postretirement
benefits, income taxes, and certain inventories in 1993.
KPMG PEAT MARWICK LLP
---------------------
KPMG PEAT MARWICK LLP
March 21, 1995
<PAGE>
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-16257) pertaining to the stock option plan, the Registration
Statement (Form S-8 No. 33-51653) pertaining to the retirement savings and
investment plan, and the Registration Statement (Form S-8 No. 33-54689)
pertaining to the nonemployee director stock option plan of Thomas Industries
Inc. of our report dated February 11, 1993, with respect to the 1992
consolidated financial statements and related schedule of Thomas Industries
Inc. included and/or incorporated by reference in this Annual Report (Form
10-K) for the year ended December 31, 1994.
ERNST & YOUNG LLP
-----------------
March 21, 1995
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 5,050
<SECURITIES> 0
<RECEIVABLES> 62,848
<ALLOWANCES> 1,773
<INVENTORY> 72,902
<CURRENT-ASSETS> 155,355
<PP&E> 142,060
<DEPRECIATION> 66,098
<TOTAL-ASSETS> 305,071
<CURRENT-LIABILITIES> 77,797
<BONDS> 79,693
<COMMON> 11,448
0
0
<OTHER-SE> 122,318
<TOTAL-LIABILITY-AND-EQUITY> 305,071
<SALES> 456,565
<TOTAL-REVENUES> 456,565
<CGS> 329,338
<TOTAL-COSTS> 329,338
<OTHER-EXPENSES> 99,099
<LOSS-PROVISION> 705
<INTEREST-EXPENSE> 9,225
<INCOME-PRETAX> 18,198
<INCOME-TAX> 7,656
<INCOME-CONTINUING> 10,542
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,542
<EPS-PRIMARY> 1.05
<EPS-DILUTED> 1.05
</TABLE>
