SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
_
/x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
_
/_/ TRANSITION REPORT PURSUANT TO SECTION 12 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period
from______________________to_________________________
Commission File Number 1-5426.
THOMAS INDUSTRIES INC.
(Exact name of registrant as specified in its charter)
Delaware 61-0505332
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4360 Brownsboro Road, Louisville, Kentucky 40207
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 502/893-4600
Not applicable
(Former name, former address, and former fiscal year, if changed since
last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding twelve months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes x No
The number of shares outstanding of issuer's Common Stock, $1 par value, as
of August 7, 1995, was 10,089,261 shares.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
THOMAS INDUSTRIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in Thousands Except Amounts Per Share)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net sales $127,367 $117,288 $244,976 $226,679
Cost of products sold 90,868 84,473 177,249 164,214
Gross profit 36,499 32,815 67,727 62,465
Other (income) expenses:
Selling, general, and
administrative expenses 27,786 26,362 54,034 51,876
Interest expense 1,917 2,351 4,190 4,778
Other 253 (3,794) 245 (3,923)
Income before income taxes 6,543 7,896 9,258 9,734
Income tax provision 2,667 2,850 3,794 3,677
Net income $ 3,876 $ 5,046 $ 5,464 $ 6,057
Per Common Share amounts:
Net income per share $.38 $.50 $.54 $.60
Dividends declared per share $.10 $.10 $.20 $.20
Average number of shares
outstanding 10,088,065 10,055,580 10,084,933 10,052,803
See notes to condensed consolidated financial statements.
</TABLE>
THOMAS INDUSTRIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
<TABLE>
<CAPTION>
(Unaudited)
June 30 December 31
1995 1994*
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 2,331 $ 5,050
Accounts receivable, less allowance
(1995--$2,259; 1994--$1,773) 70,697 61,075
Inventories:
Finished products 35,290 31,417
Raw materials 28,257 29,970
Work in process 11,787 11,515
75,334 72,902
Assets held for disposition 1,128 2,157
Deferred income taxes 6,066 5,874
Other current assets 7,330 8,297
Total current assets 162,886 155,355
Property, plant and equipment 148,246 142,060
Less accumulated depreciation
and amortization 73,239 66,098
75,007 75,962
Intangible assets--less accumulated
amortization 62,796 62,532
Other assets 12,160 11,222
Total assets $312,849 $305,071
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes payable $ 9,761 $ 8,252
Accounts payable 29,221 25,892
Other current liabilities 40,778 34,821
Current portion of long-term debt 9,061 8,832
Total current liabilities 88,821 77,797
Deferred income taxes 7,912 7,684
Long-term debt (less current portion) 71,197 79,693
Minimum pension liability 1,759 1,759
Other long-term liabilities 4,219 4,372
Shareholders' equity
Preferred Stock, $1 par value,
3,000,000 shares authorized--none issued
Common Stock, $1 par value
Shares authorized: 60,000,000
Shares issued: 1995--11,455,956;
1994--11,447,873 11,456 11,448
Capital surplus 117,631 117,557
Retained earnings 34,711 31,264
Minimum pension liability adjustment (1,045) (1,045)
Equity adjustment from translation (832) (2,478)
Less cost of treasury shares
(1995 and 1994--1,366,695) (22,980) (22,980)
138,941 133,766
Total liabilities and shareholders' equity $312,849 $305,071
*Derived from the audited December 31, 1994, balance sheet.
See notes to condensed consolidated financial statements.
</TABLE>
THOMAS INDUSTRIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income $ 5,464 $ 6,057
Reconciliation of net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 7,922 7,938
Deferred income taxes (273) 245
Provision for losses on accounts
receivable 339 588
Loss (gain) on asset disposal 65 (4,018)
Changes in operating assets and liabilities,
net of effects of acquisitions and dispositions:
Accounts receivable (9,275) (9,523)
Inventories (2,770) 655
Other current assets 2,564 2,228
Accounts payable 3,175 (5)
Accrued expenses and other liabilities 4,877 708
Other 388 68
Net cash provided by operating
activities 12,476 4,941
Cash flows from investing activities:
Purchases of property, plant, and equipment (5,340) (7,106)
Proceeds from sale of property, plant, and
equipment 77 12,448
Net cash (used in) provided by investing
activities (5,263) 5,342
Cash flows from financing activities:
Proceeds from (payments on) short-term
debt, net 490 (6,326)
Payments on long-term debt (8,494) (561)
Dividends paid (2,015) (2,011)
Other 87 80
Net cash used in financing activities (9,932) (8,818)
(Decrease) increase in cash and cash
equivalents (2,719) 1,465
Cash and cash equivalents at beginning
of year 5,050 2,364
Cash and cash equivalents at end of
period $ 2,331 $ 3,829
See notes to condensed consolidated financial statements.
</TABLE>
THOMAS INDUSTRIES INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note A -- Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial reporting and with the instructions to Form 10-Q and
Article 10-01 of Regulation S-X. Accordingly, they do not include all the
information and footnotes required by generally accepted accounting
principles for complete financial statements.
The results of operations for the six-month period ended June 30, 1995, are
not necessarily indicative of the results that may be expected for the year
ending December 31, 1995. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included. For
further information, refer to the consolidated financial statements and
footnotes included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1994.
Note B -- Contingencies
In the normal course of business, the Company and its subsidiaries are
parties to litigation. Management believes that these matters will be
resolved with no materially adverse impact on the financial position of the
Company.
Item 2. Management's Discussion and Analysis
Net sales during the second quarter ended June 30, 1995, increased
9% over the second quarter 1994 to $127.4 million. For the six
months ended June 30, 1995, net sales were 8% higher than the
first half of 1994. Lighting Segment sales were up 9% for the
second quarter over 1994, due to improvements in the Commercial &
Industrial Division. Compressor and Vacuum Pump Segment sales were
up 13% for the second quarter over 1994, due primarily to new
applications for our products in Original Equipment Manufacturer
(OEM) markets. This represents the highest level of sales for any
quarter in the Company's history for this Segment.
Net income for the 1995 second quarter and first half of $3.9
million and $5.5 million, respectively, is lower than the $5.0
million and $6.1 million for the comparable periods in 1994;
however, included in the 1994 results is a gain of $3.0 million
from the sale of non-core businesses during the second quarter and
a $.4 million gain due to LIFO inventory layer reductions.
Exclusive of the $3.0 million gain, net income in 1995 improved
89% and 79% over the second quarter and first six months of 1994,
respectively, due primarily to the improved performance of the
Lighting Segment. Operating income for the Compressor and Vacuum
Pump Segment for the 1995 second quarter and first half is
slightly below the record levels established in 1994.
Cost of products sold as a percent of sales was 71.3% and 72.4%
for the 1995 second quarter and six months to date, respectively,
versus 72.0% and 72.4% for the comparable 1994 periods. Gross
margins in the Lighting Segment in 1995 have improved due to
increased efficiencies and implementation of cost containment
programs. Compressor and Vacuum Pump Segment margins are slightly
below prior year levels due to material cost increases,
competitive margin pressures, and increased fixed cost associated
with a plant expansion.
Selling, general, and administrative costs as a percent of sales
of 21.8% and 22.1% in the second quarter and first half of 1995,
respectively, were slightly lower than the 22.5% and 22.9% figures
for the comparable 1994 periods. The ability to absorb these
relatively fixed costs over a higher sales base accounts for most
of the improvement.
Interest expense for the 1995 second quarter and first six months
was less than comparable 1994 amounts by 19% and 12%,
respectively. The reductions are attributed to lower short-term
interest rates in Europe and a decrease in long-term debt.
Working capital of $74 million at June 30, 1995, is less than the
$78 million at December 31, 1994. Accounts receivable at June 30,
1995, have increased by 16% since December 31, 1994, due to
seasonal factors and the additional sales volume; however, the
number of days sales in receivables at June 30, 1995, compared to
December 31, 1994, has improved from 53.2 days to 49.3 days.
Inventory turnover at June 30, 1995, of 4.06 times per year has
improved over the prior December and June amounts of 3.87 and
3.79, respectively. The current ratio at June 30, 1995, was 1.83
compared to 2.00 at December 31, 1994, and 1.96 at June 30, 1994.
Certain loan agreements of the Company include restrictions on
working capital, operating leases, tangible net worth, and the
payment of cash dividends and stock distributions. Under the
most restrictive of these arrangements, retained earnings of $16.8
million are not restricted at June 30, 19954.
As of June 30, 1995, the Company had available credit of $68
million with banks under short-term borrowing arrangements and a
revolving line of credit, $65 million of which was available.
Anticipated funds from operations, along with available short-term
credit and other resources, are expected to be sufficient to meet
cash requirements in the year ahead. Cash in excess of operating
requirements will continue to be invested in high grade, short-
term securities.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(27) Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THOMAS INDUSTRIES INC.
Registrant
/s/ Phillip J. Stuecker
___________________________________
Phillip J. Stuecker, Vice
President and Chief Financial
Officer
Date August 10, 1995<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 2,331
<SECURITIES> 0
<RECEIVABLES> 72,956
<ALLOWANCES> 2,259
<INVENTORY> 75,334
<CURRENT-ASSETS> 162,886
<PP&E> 148,246
<DEPRECIATION> 73,239
<TOTAL-ASSETS> 312,849
<CURRENT-LIABILITIES> 88,821
<BONDS> 71,197
<COMMON> 11,456
0
0
<OTHER-SE> 127,485
<TOTAL-LIABILITY-AND-EQUITY> 312,849
<SALES> 244,976
<TOTAL-REVENUES> 244,976
<CGS> 177,249
<TOTAL-COSTS> 177,249
<OTHER-EXPENSES> 53,940
<LOSS-PROVISION> 339
<INTEREST-EXPENSE> 4,190
<INCOME-PRETAX> 9,258
<INCOME-TAX> 3,794
<INCOME-CONTINUING> 5,464
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,464
<EPS-PRIMARY> .54
<EPS-DILUTED> .54
</TABLE>
