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 March 31, 1997
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
May 1, 1997, was 10,557,032 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
March 31
1997 1996
<S> <C> <C>
Net sales $126,356 $123,524
Cost of products sold 88,099 88,405
Gross profit 38,257 35,119
Other (income) expense:
Selling, general, and
administrative expenses 30,363 29,155
Interest expense 1,625 1,927
Other (84) (170)
Income before income taxes 6,353 4,207
Income tax provision 2,351 1,582
Net income $ 4,002 $ 2,625
Per Share amounts:
Net income per share $.37 $.25
Dividends declared per share $.10 $.10
Average number of shares outstanding 10,773,362 10,672,669
See notes to condensed consolidated financial statements.
</TABLE>
THOMAS INDUSTRIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
<TABLE>
<CAPTION>
(Unaudited)
March 31 December 31
ASSETS 1997 1996*
<S> <C> <C>
Current assets
Cash and cash equivalents $ 6,139 $ 18,826
Accounts receivable, less allowance
(1997--$2,222; 1996--$2,243) 70,569 68,239
Inventories:
Finished products 37,173 33,072
Raw materials 21,011 21,622
Work in process 14,312 14,553
72,496 69,247
Assets held for disposition 486 493
Deferred income taxes 7,208 7,167
Other current assets 7,074 6,392
Total current assets 163,972 170,364
Property, plant and equipment 151,887 149,719
Less accumulated depreciation and amortization 74.511 71,924
77,376 77,795
Intangible assets--less accumulated amortization 57,454 58,687
Other assets 13,764 12,804
Total assets $312,566 $319,650
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes payable $ 12,338 $ 6,986
Accounts payable 22,059 27,377
Other current liabilities 41,358 42,405
Current portion of long-term debt 7,838 7,758
Total current liabilities 83,593 84,526
Deferred income taxes 8,450 8,603
Long-term debt (less current portion) 54,822 62,632
Minimum pension liability 2,154 2,154
Other long-term liabilities 4,033 4,033
Total liabilities 153,052 161,948
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: 1997--11,579,553; 1996--11,549,940 11,580 11,550
Capital surplus 115,442 115,206
Retained earnings 53,366 50,420
Minimum pension liability adjustment (780) (780)
Equity adjustment from translation (2,882) (1,482)
Less cost of treasury shares:
(1997--1,023,646; 1996--1,023,646) (17,212) (17,212)
Total shareholders' equity 159,514 157,702
Total liabilities and shareholders' equity $312,566 $319,650
*Derived from the audited December 31, 1996, 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>
Three Months Ended
March 31
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,002 $ 2,625
Reconciliation of net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 4,295 4,235
Deferred income taxes 69 --
Provision for losses on accounts receivable 73 168
Changes in operating assets and liabilities,
net of effects of acquisitions and
dispositions:
Accounts receivable (2,850) (4,321)
Inventories (4,007) (3,238)
Other current assets (822) 1,040
Accounts payable (4,767) (3,625)
Accrued expenses and other liabilities (626) (260)
Other (1,333) 275
Net cash used in operating activities (5,966) (3,101)
Cash flows from investing activities:
Purchase of property, plant, and equipment (3,950) (3,198)
Proceeds from sale of property, plant, and
equipment 20 42
Net cash used in investing activities (3,930) (3,156)
Cash flows from financing activities:
Proceeds from short-term debt, net 5,841 1,291
Payments on long-term debt (7,730) (11,200)
Dividends paid (1,053) (1,010)
Other 151 116
Net cash used in financing activities (2,791) (10,803)
Decrease in cash and cash equivalent (12,687) (17,060)
Cash and cash equivalents at beginning of quarter 18,826 18,305
Cash and cash equivalents at end
of quarter $ 6,139 $ 1,245
See notes to condensed 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 three-month period ended March 31, 1997, are
not necessarily indicative of the results that may be expected for the year
ending December 31, 1997. 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, 1996.
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
material adverse impact on the financial position of the Company.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Net sales during the first quarter ended March 31, 1997, increased 2% over the
first quarter of 1996 to $126.4 million. Net sales for the first quarter of
1997 are the highest for any first quarter in the Company's history. Lighting
Segment sales increased 3% over the first quarter of 1996, primarily due to
increased volume in the Consumer Division. Compressor & Vacuum Pump Segment
sales were up 1% for the quarter over 1996, due primarily to strength in the
North American operations.
Net income for the first quarter of 1997 is $4.0 million, or 52% higher than the
first quarter of 1996. The Lighting Segment operating income improved due to
strength in the Consumer and C&I Divisions. Operating income for the Compressor
& Vacuum Pump Segment increased in the first quarter of 1997 due to improved
profitability, primarily in the European Segment. Lower interest expense also
contributed to the increase in operating income as the Company continues to pay
down long-term debt.
Cost of products sold as a percent of sales decreased to 69.7% in the 1997 first
quarter from 71.6% for the comparable 1996 period. Gross margins in the
Lighting Segment in 1997 have improved due to increased efficiencies and
continued implementation of cost containment programs. Compressor & Vacuum Pump
Segment margins are above prior-year levels due principally to lower material
costs.
Selling, general, and administrative expense in the first quarter of 1997 was
$1.2 million higher compared to the prior-year first quarter. SG&A expense as a
percent of net sales was 24.0% in 1997 compared to 23.6% in 1996. In the
Lighting Segment, SG&A expense increased primarily due to additional selling and
information system expenditures to support the higher sales volume. SG&A
expense in the Compressor & Vacuum Pump Segment declined in 1997, primarily due
to reductions in administrative expenditures.
Interest expense for the first three months of 1997 was 16% lower than the
comparable 1996 period. A decrease in long-term debt was the primary cause for
the lower interest expense.
Working capital of $80.4 million at March 31, 1997, is 6% lower than the $85.8
million at December 31, 1996. Accounts receivable at March 31, 1997, have
increased by 3% since December 31, 1996, due to seasonal factors in the Lighting
Group; however, the number of days sales in receivables at March 31, 1997,
compared to December 31, 1996, has improved to 48.1 days from 51.2 days.
Inventory turnover at March 31, 1997, of 4.21 times per year has decreased
slightly from the December 31, 1996, level of 4.34 times per year. The current
ratio at March 31, 1997, was 1.96 compared to 2.02 at December 31, 1996.
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 $30.8 million are not restricted at March 31, 1997.
As of March 31, 1997, the Company had available credit of $62.7 million with
banks under short-term borrowing arrangements and a revolving line of credit,
$58.8 million of which was unused. 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.
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 May 7, 1997
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<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 6,139
<SECURITIES> 0
<RECEIVABLES> 72,791
<ALLOWANCES> 2,222
<INVENTORY> 72,496
<CURRENT-ASSETS> 14,768
<PP&E> 151,887
<DEPRECIATION> 74,511
<TOTAL-ASSETS> 312,566
<CURRENT-LIABILITIES> 83,593
<BONDS> 54,822
0
0
<COMMON> 11,580
<OTHER-SE> 147,934
<TOTAL-LIABILITY-AND-EQUITY> 312,566
<SALES> 126,356
<TOTAL-REVENUES> 126,356
<CGS> 88,099
<TOTAL-COSTS> 88,099
<OTHER-EXPENSES> 30,206
<LOSS-PROVISION> 73
<INTEREST-EXPENSE> 1,625
<INCOME-PRETAX> 6,353
<INCOME-TAX> 2,351
<INCOME-CONTINUING> 4,002
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,002
<EPS-PRIMARY> .37
<EPS-DILUTED> .37
</TABLE>
