SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended: September 30, 1996
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
November 6, 1996, was 10,526,294 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 Nine Months Ended
September 30 September 30
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales $129,611 $128,750 $381,003 $373,726
Cost of products sold 90,423 91,842 269,487 269,091
Gross profit 39,188 36,908 111,516 104,635
Other (income) expenses:
Selling, general, and
administrative expenses 28,583 27,415 86,295 81,449
Interest expense 1,801 2,023 5,531 6,213
Interest income and other (503) (133) (941) 112
Income before income taxes 9,307 7,603 20,631 16,861
Income tax provision 3,405 2,901 7,656 6,695
Net income $ 5,902 $ 4,702 $ 12,975 $ 10,166
Per Common Share amounts:
Net income per share $.55 $.46 $1.22 $1.00
Dividends declared per share $.10 $.10 $ .30 $ .30
Weighted average number of
common shares and common
share equivalents 10,676,841 10,226,356 10,659,833 10,199,059
See notes to condensed consolidated financial statements.
</TABLE>
THOMAS INDUSTRIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
<TABLE>
<CAPTION>
(Unaudited)
September 30 December 31
1996 1995*
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 6,985 $ 18,305
Accounts receivable, less allowance
(1996--$2,434; 1995--$2,014) 73,095 61,975
Inventories:
Finished products 31,440 29,951
Raw materials 22,406 25,107
Work in process 15,706 13,007
69,552 68,065
Assets held for disposition 947 1,000
Deferred income taxes 5,890 5,775
Other current assets 6,892 9,619
Total current assets 163,361 164,739
Property, plant and equipment 151,997 146,903
Less accumulated depreciation and amortization 75,436 71,193
76,561 75,710
Intangible assets--less accumulated amortization 59,270 61,379
Other assets 12,321 11,705
Total assets $311,513 $313,533
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes payable $ 8,083 $ 7,679
Accounts payable 24,843 27,778
Other current liabilities 38,276 39,437
Current portion of long-term debt 8,465 9,008
Total current liabilities 79,667 83,902
Deferred income taxes 7,946 7,875
Long-term debt (less current portion) 62,650 70,791
Minimum pension liability 4,242 3,520
Other long-term liabilities 5,175 4,268
Total liabilities 159,680 170,356
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: 1996--11,549,940;
1995--11,485,865 11,550 11,486
Capital surplus 115,206 117,974
Retained earnings 47,031 40,003
Minimum pension liability adjustment (3,412) (2,690)
Equity adjustment from translation (1,330) (616)
Less cost of treasury shares
(1996--1,023,646; 1995--1,366,695) (17,212) (22,980)
Total shareholders' equity 151,833 143,177
Total liabilities and shareholders' equity $311,513 $313,533
*Derived from the audited December 31, 1995, consolidated balance sheet.
See notes to condensed consolidated financial statements.
</TABLE>
THOMAS INDUSTRIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $12,975 $10,166
Reconciliation of net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 12,515 11,839
Deferred income taxes (65) (273)
Provision for losses on accounts receivable 455 593
(Gain) loss on asset disposal, net (143) 103
Changes in operating assets and liabilities
net of effect of divestitures:
Accounts receivable (10,415) (11,554)
Inventories 591 2,483
Other current assets 2,819 2,485
Accounts payable (2,983) (2,161)
Accrued expenses and other liabilities (1,812) 5,285
Other (1,093) 304
Net cash provided by operating activities 12,844 19,270
Cash flows from investing activities:
Purchases of property, plant, and equipment (10,939) (7,942)
Proceeds from sale of property, plant, and equipment,
and other assets 207 104
Net cash used in investing activities (10,732) (7,838)
Cash flows from financing activities:
(Payments on) proceeds from short-term debt, net 283 (1,168)
Payments of long-term debt (11,721) (8,534)
Dividends paid (3,074) (3,024)
Other 1,080 139
Net cash used in financing activities (13,432) (12,587)
Decrease in cash and cash equivalents (11,320) (1,155)
Cash and cash equivalents at beginning of year 18,305 5,050
Cash and cash equivalents at end of period $ 6,985 $ 3,895
See notes to condensed consolidated financial statements.
</TABLE>
THOMAS INDUSTRIES INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note A -- Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial reporting and with the instructions to Form 10-Q and Article 10-01 of
Regulation S-X. Accordingly, they do not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements.
The results of operations for the nine-month period ended September 30, 1996,
are not necessarily indicative of the results that may be expected for the year
ending December 31, 1996. 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, 1995.
Note B -- Contingencies
In the normal course of business, the Company and its subsidiaries are parties
to litigation; and when costs can be reasonably estimated, the Company records
appropriate liabilities for such matters.
Item 2. Management's Discussion and Analysis
Net sales during the third quarter ended September 30, 1996, increased 1% over
the third quarter 1995 to $129.6 million. For the nine months ended September
30, 1996, net sales were 2% higher than the first nine months of 1995. Net
sales for the third quarter and nine-month periods in 1996 are the highest for
any comparable periods in the Company's history. Lighting Segment sales in the
third quarter 1996 decreased 3% compared to the third quarter 1995, primarily
due to weakness in the Commercial & Industrial Division. Compressor and Vacuum
Pump Segment sales were up 9% for the third quarter over 1995, due primarily to
the acquisition of Welch Vacuum Technology.
Net income for the 1996 third quarter and first nine months of $5.9 million and
$13.0 million, respectively, is higher than the comparable 1995 periods. The
Lighting Segment and the Compressor and Vacuum Pump Segment achieved higher
operating profit levels in the third quarter of 1996 compared to 1995. Improved
performance of joint venture operations, which is included in other income, and
lower interest expense have also contributed to the increase in net income in
1996 over 1995.
Cost of products sold as a percent of sales was 69.8% and 70.7% for the 1996
third quarter and nine months, respectively, versus 71.3% and 72.0% for the
comparable 1995 periods. Operating income in the Lighting Segment for the third
quarter and first nine months in 1996 improved 11% and 30%, respectively, due to
improved efficiencies and cost reduction programs in the manufacturing
operations. Compressor and Vacuum Pump Segment operating income for the first
nine months of 1996 is 2% lower than the comparable 1995 amount; however, third
quarter 1996 operating income improved 6% over 1995 due to improved margins in
certain North American and European markets.
Selling, general, and administrative expense as a percent of sales of 21.9% and
22.5% in the third quarter and nine months of 1996, respectively, were higher
than the 21.1% and 21.6% figures for the comparable 1995 periods. Additional
engineering and information system expenditures are the primary components of
the increase.
Interest expense for the 1996 third quarter and first nine months was less than
comparable 1995 amounts by 11%. The reductions are attributed to lower short-
term interest rates in Europe and a decrease in long-term debt.
Working capital of $83.7 million at September 30, 1996, is 3.6% higher than the
$80.8 million at December 31, 1995. Accounts receivable at September 30, 1996,
have increased by 17.9% since December 31, 1995, due to seasonal factors in the
Lighting Group; however the number of days sales in receivables at September 30,
1996, of 49.7 days is comparable to the 49.6 days at December 31, 1995.
Inventory turnover at September 30, 1996, of 4.29 times per year has improved
over the December 31, 1995, level of 4.12 times per year. The current ratio at
September 30, 1996, improved to 2.05 compared to 1.96 at December 31, 1995.
Certain loan agreements of the Company include restrictions on working capital,
operating leases, tangible net worth, and the payment of cash dividends and
stock distributions. Under the most restrictive of these arrangements, retained
earnings of $26 million are not restricted at September 30, 1996.
As of September 30, 1996, the Company had available credit of $64 million with
banks under short-term borrowing arrangements and a revolving line of credit,
$59 million of which was available at September 30, 1996. Anticipated funds from
operations, along with available short-term credit and other resources, are
expected to be sufficient to meet cash requirements in the year ahead. Cash in
excess of operating requirements will continue to be invested in high grade,
short-term securities.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(27) Financial Data Schedule
(b) There have been no reports on Form 8-K filed during the quarter
for which this report on Form 10-Q is being filed.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THOMAS INDUSTRIES INC.
Registrant
/s/ Phillip J. Stuecker
Phillip J. Stuecker, Vice President
and Chief Financial Officer
Date: November 8. 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains first nine months summary information extracted from the
Thomas Industries Inc. 1995 Third Quarter Form 10-Q and is qualified in its
entirety by reference to such From 10-Q filing.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 6,985
<SECURITIES> 0
<RECEIVABLES> 75,529
<ALLOWANCES> 2,434
<INVENTORY> 69,552
<CURRENT-ASSETS> 13,729
<PP&E> 151,997
<DEPRECIATION> 75,436
<TOTAL-ASSETS> 311,513
<CURRENT-LIABILITIES> 79,667
<BONDS> 62,650
0
0
<COMMON> 11,550
<OTHER-SE> 140,283
<TOTAL-LIABILITY-AND-EQUITY> 311,513
<SALES> 381,003
<TOTAL-REVENUES> 381,003
<CGS> 269,487
<TOTAL-COSTS> 269,487
<OTHER-EXPENSES> 84,899
<LOSS-PROVISION> 455
<INTEREST-EXPENSE> 5,531
<INCOME-PRETAX> 20,631
<INCOME-TAX> 7,656
<INCOME-CONTINUING> 12,975
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,975
<EPS-PRIMARY> 1.22
<EPS-DILUTED> 1.22
</TABLE>
