SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
August 30, 1998
THOMAS INDUSTRIES INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-5426 61-0505332
(Commission File Number) (IRS Employer Identification
No.)
4360 Brownsboro Road, Suite
300 Louisville, Kentucky 40207
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code
502/893-4600
ITEM 2. Acquisition or Disposition of Assets.
On August 30, 1998, the Registrant and The Genlyte Group Incorporated
("Genlyte") completed the combination of the lighting business of the Registrant
with the business of Genlyte through a joint venture in the form of a limited
liability company named Genlyte Thomas Group LLC (f/k/a GT Lighting, LLC) (the
"Company"). The Company manufactures, sells, markets and distributes consumer
commercial, industrial and outdoor lighting fixtures and controls. Pursuant to
(i) the Master Transaction Agreement dated April 28, 1998 by and between the
Registrant and Genlyte; (ii) the Limited Liability Company Agreement of the
Company dated April 28, 1998 by and among the Registrant, Genlyte and the
Company; and (iii) the Capitalization Agreement dated April 28, 1998 by and
among the Company and the Registrant and certain of its Affiliates, the
Registrant contributed substantially all of its assets comprising its lighting
business to the Company. In addition, pursuant to the Capitalization Agreement
dated April 28, 1998 by and between the Company and Genlyte, Genlyte contributed
substantially all of its assets to the Company.
In exchange for the assets contributed by the Registrant and certain of its
affiliates, the Registrant received a 32% interest in the Company and the
Company assumed certain liabilities related to Registrant's lighting business.
Genlyte received a 68% interest in the Company, and the Company assumed
substantially all of Genlyte's liabilities in exchange for the assets
Genlyte contributed. The interests in the Company issued to each of the
Registrant and Genlyte were based on arms-length negotiations between the
parties with the assistance of their financial advisors.
Prior to this transaction there were no material relationships between
Genlyte or the Company and the Registrant or its affiliates, directors or
officers or any associate of any director or officer of the Registrant.
The Registrant and Genlyte continue to exist as separate publicly traded
companies and their certificates of incorporation and by-laws remain unchanged.
The Registrant's assets principally consist of its compressor and vacuum pump
business and its 32% interest in the Company. Genlyte's assets principally
consist of its 68% interest in the Company.
The Company is a leading manufacturer of lighting fixtures and controls for
the commercial, industrial and residential markets. The Company is
headquartered in Louisville, Kentucky, and employs more than 5,000 people.
The Registrant, headquartered in Louisville, Kentucky, is a recognized
leader in the design and manufacture of compressors and vacuum pumps for use in
global OEM applications as well as pneumatic construction equipment, leakage
detection systems and laboratory equipment. The Registrant also owns a 32%
interest in the Company, one of the largest lighting fixture manufacturers in
North America. The Registrant has operations in the United States, Mexico,
South America, Europe and Asia.
The foregoing description of the transaction is qualified in its entirety
by reference to the agreements which were previously filed on July 24, 1998 on
Registrant's Current Report on Form 8-K and the Joint Proxy Statement of
Registrant and Genlyte filed July 24, 1998.
ITEM 7. Financial Statements and Exhibits.
(b) Pro forma financial information.
(i) Unaudited Thomas Pro Forma Consolidated Financial Statements.
(ii) Unaudited Genlyte Thomas Group LLC Pro Forma Consolidated
Financial Statements.
(c) See Exhibit Index.
SIGNATURES
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 hereunto duly authorized.
THOMAS INDUSTRIES INC.
(Registrant)
By: /s/ Phillip J. Stuecker
Phillip J. Stuecker, Vice President of
Finance, Chief Financial Officer, and Secretary
Dated: September 14, 1998
EXHIBIT INDEX
Exhibit Description of Document
No.
2.1 Master Transaction Agreement dated April 28, 1998 by and
between the Registrant and The Genlyte Group
Incorporated ("Genlyte"). (1)
2.2 Limited Liability Company Agreement of GT Lighting, LLC
dated April 28, 1998 by and among the Registrant,
Genlyte and Genlyte Thomas Group LLC (f/k/a GT Lighting,
LLC)(the "Company"). (1)
2.3 Capitalization Agreement dated April 28, 1998 by and
among the Company and the Registrant and certain of its
Affiliates. (1)
2.4 Capitalization Agreement dated April 28, 1998 by and
between the Company and Genlyte. (1)
99.1 Thomas Industries Inc. Lighting Group Unaudited Condensed
Interim Combined Financial Statements
99.2 Management's Discussion and Analysis of Financial
Condition and Results of Operations of Thomas Industries
Inc. Lighting Group
99.3 Unaudited Thomas Pro Forma Consolidated Financial
Statements
99.4 Unaudited Genlyte Thomas Group LLC Pro Forma
Consolidated Financial Statements
99.5 Press release regarding shareholder approval
99.6 Press release regarding closing of the lighting joint
venture transaction
(1) Incorporated herein by reference to the Current Report on Form 8-K for the
Registrant dated July 24, 1998.
THOMAS INDUSTRIES INC. LIGHTING GROUP
<TABLE>
UNAUDITED COMBINED STATEMENTS OF OPERATIONS
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
---------------
1998 1997
------- -------
(IN THOUSANDS)
<S> <C> <C>
Net sales...................................................... $190,436 $177,967
Cost of products sold.......................................... 136,500 129,100
-------- --------
Gross profit................................................... 53,936 48,867
-------- --------
Selling, general and administrative expenses................... 45,990 42,779
Interest expense............................................... 2,576 2,976
Other.......................................................... 286 (30)
-------- ---------
48,852 45,725
-------- ---------
Income before income taxes..................................... 5,084 3,142
Income tax expense............................................. 1,952 1,207
-------- ---------
Net income..................................................... $ 3,132 $ 1,935
======== ========
See accompanying notes.
</TABLE>
THOMAS INDUSTRIES INC. LIGHTING GROUP
<TABLE>
COMBINED BALANCE SHEETS
<CAPTION>
UNAUDITED
JUNE 30, DECEMBER 31,
1998 1997
--------- ------------
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................. $ 1,449 $ 5,792
Accounts receivable, net.............................. 64,846 54,014
Inventories........................................... 57,025 52,532
Deferred income taxes................................. 3,264 3,579
Other current assets.................................. 4,528 3,641
-------- --------
Total current assets.................................... 131,112 119,558
Property, plant and equipment, net...................... 46,632 46,642
Intangible assets, net.................................. 47,550 48,435
Other assets............................................ 9,890 8,865
-------- --------
Total assets............................................ $235,184 $223,500
======== ========
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable...................................... $ 19,749 $ 21,396
Accrued expenses and other current liabilities........ 21,558 25,062
Current portion of long-term debt..................... 7,813 7,810
-------- --------
Total current liabilities............................... 49,120 54,268
Deferred income taxes................................... 5,662 5,669
Long-term debt, less current portion.................... 46,486 54,256
Other long-term liabilities............................. 3,767 3,738
-------- --------
Total liabilities....................................... 105,035 117,931
Equity:
Thomas' investment.................................... 134,862 109,511
Accumulated other comprehensive income................ (4,713) (3,942)
-------- --------
Total equity............................................ 130,149 105,569
-------- --------
Total liabilities and equity............................ $235,184 $223,500
======== ========
See accompanying notes.
</TABLE>
THOMAS INDUSTRIES INC. LIGHTING GROUP
<TABLE>
UNAUDITED COMBINED STATEMENTS OF CASH FLOWS
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-----------------
1998 1997
-------- -------
(IN THOUSANDS)
<S> <C> <C>
OPERATING ACTIVITIES
Net income................................................. $ 3,132 $ 1,935
Adjustments to reconcile net income to net cash used in
operating activities:
Depreciation and amortization............................ 5,271 4,961
Deferred income taxes.................................... 913 (284)
Provision for losses on accounts receivable.............. 169 151
Gain on asset disposals, net............................. (8) (4)
Changes in operating assets and liabilities, net of
effect of acquisitions:
Accounts receivable.................................... (11,251) (6,750)
Inventories............................................ (4,664) (4,351)
Other current assets................................... (911) 31
Accounts payable....................................... (1,561) 33
Accrued expenses and other liabilities................. (4,029) 980
Other.................................................. (1,092) (965)
-------- -------
Net cash used in operating activities...................... (14,031) (4,263)
INVESTING ACTIVITIES
Purchase of property, plant and equipment.................. (4,739) (3,732)
Proceeds from sales of property, plant and equipment....... 176 28
-------- -------
Net cash used in investing activities...................... (4,563) (3,704)
FINANCING ACTIVITIES
Payments on long-term debt................................. (7,760) (7,730)
Net change in Thomas advances.............................. 22,220 18,996
-------- -------
Net cash provided by financing activities.................. 14,460 11,266
Effect of exchange rate changes............................ (209) (88)
-------- -------
Net (decrease) increase in cash and cash equivalents....... (4,343) 3,211
Cash and cash equivalents at beginning of period........... 5,792 3,326
-------- -------
Cash and cash equivalents at end of period................. $ 1,449 $ 6,537
======== =======
See accompanying notes.
</TABLE>
THOMAS INDUSTRIES INC. LIGHTING GROUP
NOTES TO UNAUDITED CONDENSED INTERIM COMBINED FINANCIAL STATEMENTS
JUNE 30, 1998
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited condensed combined financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial reporting. 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, 1998, are
not necessarily indicative of the results that may be expected for the year
ending December 31, 1998. In the opinion of management, all adjustments
considered necessary for a fair presentation have been included. For further
information, refer to the combined financial statements and footnotes included
in the Thomas Lighting audited combined financial statements for the years ended
December 31, 1997, 1996, and 1995 of the Joint Proxy Statement of the Registrant
and The Genlyte Group Incorporated ("Genlyte") filed July 24, 1998 (the "Joint
Proxy Statement") incorporated herein by reference.
NOTE B--CONTINGENCIES
In the normal course of business, Thomas Lighting is a party to legal
proceedings and claims. When costs can be reasonably estimated, appropriate
liabilities for such matters are recorded. While management currently believes
the amount of ultimate liability, if any, with respect to these actions will not
materially affect the financial position, results of operations, or liquidity of
Thomas Lighting, the ultimate outcome of any litigation is uncertain. Were an
unfavorable outcome to occur, the impact could be material to Thomas Lighting.
NOTE C--COMPREHENSIVE INCOME
As of January 1, 1998, Thomas Lighting adopted Statement of Financial
Accounting Standards No. 130, Reporting Comprehensive Income (SFAS 130). SFAS
130 establishes new rules for the reporting and display of comprehensive income
and its components; however, the adoption of this Statement had no impact on
Thomas Lighting's net income or shareholders' equity. SFAS 130 requires
unrealized gains or losses on Thomas Lighting's foreign currency translation and
minimum pension liability adjustments, which, prior to adoption, were reported
separately in shareholders' equity to be included in other comprehensive income.
During the first half of 1998 and 1997, total comprehensive income was
$2,361,000 and $1,429,000, respectively. Disclosure of accumulated balances
of other comprehensive income (in thousands):
<TABLE>
<CAPTION>
ACCUMULATED
MINIMUM FOREIGN OTHER
PENSION CURRENCY COMPREHENSIVE
LIABILITY TRANSLATION INCOME
--------- ----------- -------------
<S> <C> <C> <C>
Beginning balance........................... $(368) $(3,574) $(3,942)
Current-year other comprehensive income..... -- (771) (771)
----- ------- -------
Ending balance.............................. $(368) $(4,345) $(4,713)
===== ======= =======
</TABLE>
NOTE D--SUBSEQUENT EVENT
On April 28, 1998, Thomas Industries Inc. (Thomas) entered into definitive
agreements with The Genlyte Group Incorporated providing for the formation of a
joint venture lighting company. On August 30, 1998, under the terms of the
Agreement, Thomas contributed substantially all of the assets comprising
its lighting group (Thomas Lighting) to the joint venture in exchange for
a 32% interest in the joint venture and the joint venture's assumption of
certain liabilities.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS OF THOMAS LIGHTING
Set forth below is Management's Discussion and Analysis of Financial
Condition and Results of Operations of Thomas Lighting for the six months ended
June 30, 1998 and June 30, 1997.
Net sales during the first six months ended June 30, 1998 increased 7.0%
over the first six months 1997 to $190.4 million due primarily to additional
shipment volume. All product groups within Thomas Lighting reported increases in
net sales.
Net income for the six months of 1998 is $3.1 million compared to $1.9
million for the first six months of 1997. Operating income in 1998 improved to
$11.0 million in the first six months due to strength in the Outdoor and Accent
Divisions. Lower interest expense also contributed to the increase in net income
as Thomas Lighting continued to pay down long-term debt.
Cost of products sold as a percent of sales decreased to 71.7% in the 1998
first six months from 72.5% for the comparable 1997 period. Gross margins in
1998 have improved due to increased efficiencies and continued implementation of
cost containment programs.
Selling, general, and administrative expense in the first six months of
1998 was $46.0 million compared to the prior year first six months of $42.8
million. SG&A expense as a percent of net sales was 24.1% for the first six
months of 1998 and 24.0% for the comparable period in 1997.
Interest expense for the first six months of 1998 was 13.4% lower than
the comparable 1997 period. A decrease in long-term debt was the primary cause
for the lower interest expense.
Working capital of $82.0 million at June 30, 1998 was 25.6% higher than the
$65.3 million at December 31, 1997. Accounts receivable at June 30, 1998 have
increased by 20.1% since December 31, 1997 due to an increase in sales volume,
seasonal factors associated with scheduled plant shutdowns for normal
maintenance and holidays in December 1997, and reduced shipment levels in
December 1997 in the Outdoor market segment. Inventory at June 30, 1998 was
$57.0 million compared to $52.5 million at December 31, 1997. The current ratio
at June 30, 1998 improved to 2.7 compared to 2.2 at December 31, 1997.
UNAUDITED THOMAS PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
INTRODUCTION
The following pro forma consolidated financial statements of Thomas (the
"Thomas Pro Forma Consolidated Financial Statements") include the unaudited pro
forma consolidated statements of income for the six months ended June 30, 1998
and for the year ended December 31, 1997, (the "Thomas Pro Forma Consolidated
Statements of Income"), and the unaudited pro forma consolidated balance sheet
as of June 30, 1998 (the "Thomas Pro Forma Consolidated Balance Sheet").
The Thomas Pro Forma Consolidated Statements of Income have been derived
from the unaudited consolidated statement of income of Thomas for the six months
ended June 30, 1998, and the unaudited combined statement of income of Thomas
Lighting for the six months ended June 30, 1998, the audited consolidated
statement of income of Thomas for the year ended December 31, 1997, the audited
combined statement of operations of the Thomas Industries Inc. Lighting Group
("Thomas Lighting") for the year ended December 31, 1997, and are adjusted to
give effect to the transaction as if it had occurred on January 1, 1997.
The Thomas Pro Forma Consolidated Balance Sheet is based on the unaudited
consolidated balance sheet of Thomas as of June 30, 1998, and the unaudited
combined balance sheet of Thomas Lighting as of June 30, 1998, and is adjusted
to give effect to the transaction as if it had occurred on June 30, 1998.
The Thomas Pro Forma Consolidated Financial Statements reflect pro forma
adjustments to give effect to the transactions consummated whereby (a) Thomas
contributed to the Joint Venture substantially all of Thomas Lighting's
assets in exchange for a 32% interest in the Joint Venture and the Joint
Venture's assumption of certain liabilities and (b) Genlyte contributed to
the Joint Venture substantially all of its assets in exchange for a 68%
interest in the Joint Venture and the Joint Venture's assumption of
substantially all of its liabilities. Thomas will account for its investment
in the Joint Venture under the equity method of accounting.
The assets and liabilities contributed by Genlyte to the Joint Venture are
reflected at historical costs. For accounting purposes, Genlyte's majority
ownership of the Joint Venture requires the assets and liabilities contributed
by Thomas to the Joint Venture to be valued at their fair value in the Joint
Venture's consolidated financial statements. Certain pro forma adjustments
result from a preliminary determination of purchase accounting adjustments and
are based upon available information and certain assumptions that management
considers reasonable under the circumstances. Consequently, the amounts
reflected in the Thomas Pro Forma Consolidated Financial Statements are subject
to change.
The Thomas Pro Forma Consolidated Financial Statements and the accompanying
notes should be read in conjunction with Thomas' historical consolidated
financial statements and the notes thereto incorporated by reference herein, and
Thomas Lighting's combined historical financial statements and notes thereto
appearing in the Joint Proxy Statement incorporated herein by reference.
The Thomas Pro Forma Consolidated Statements do not purport to be
indicative of what Thomas' financial condition or results of operations would
have been had the Transaction, in fact, been consummated as of the assumed dates
and for the periods presented; nor are they indicative of the results of
operations or financial condition for any future period or date.
The Thomas Pro Forma Consolidated Statements do not reflect any projected
cost savings from synergies resulting from the transaction and the related
synergy costs. As discussed in the Joint Proxy Statement incorporated herein by
reference, the synergies are expected to be in excess of $30 million per annum
and are expected to be fully realized by the end of the year 2000 as a result of
cost savings, economies of scale and revenue enhancement opportunities. It is
anticipated that an aggregate of $10.5 million of costs will be incurred by the
Joint Venture during the period 1998 through 2000 related to achieving the
synergies. See the Joint Proxy Statement incorporated herein by reference for
more information.
<TABLE>
UNAUDITED THOMAS PRO FORMA CONSOLIDATED STATEMENT OF INCOME
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA)
HISTORICAL PRO FORMA
THOMAS RESULTS OF THOMAS
INDUSTRIES THOMAS CONTRIBUTION INDUSTRIES
INC. LIGHTING ADJUSTMENTS INC.(A)
---------- ---------- ------------ ----------
<S> <C> <C> <C> <C>
Net Sales....................... $284,981 $(190,436) $ 0 $94,545
Costs of Sales................ 196,139 (136,500) 0 59,639
-------- -------- ------ -------
Gross Profit.................... 88,842 (53,936) 0 34,906
Selling & Administrative
Expenses..................... 66,118 (45,990) 984(b) 21,112
-------- -------- ------ -------
Operating Profit................ 22,724 ( 7,946) (984) 13,794
Interest Expense, net......... 2,659 ( 2,497) 1,858(c) 2,020
Other Non-Operating Expenses.. 321 (251) 0 70
Equity Earnings (Loss) from
Unconsolidated Affiliates.... (498) 114 8,567(d) 8,183
-------- -------- ------ -------
Income Before Income Taxes...... 19,246 (5,084) 5,725 19,887
Income Tax Provision............ 7,121 (1,952) 2,448(e) 7,617
-------- -------- ------ -------
Net Income...................... $ 12,125 $ (3,132) $3,277 $12,270
======== ======== ====== =======
Earnings Per Share:
Basic......................... $0.76 $0.77
Diluted....................... $0.74 $0.74
THESE PRO FORMA FINANCIAL STATEMENTS DO NOT REFLECT THE SYNERGIES EXPECTED
TO RESULT FROM THE TRANSACTION OR THE RELATED SYNERGY COSTS.
See Notes to Unaudited Thomas Pro Forma Consolidated Statements of Income.
</TABLE>
<TABLE>
UNAUDITED THOMAS PRO FORMA CONSOLIDATED STATEMENT OF INCOME
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
HISTORICAL PRO FORMA
THOMAS RESULTS THOMAS
INDUSTRIES OF THOMAS CONTRIBUTION INDUSTRIES
INC. LIGHTING ADJUSTMENTS INC.(A)
---------- --------- ------------ ----------
<S> <C> <C> <C> <C>
Net Sales....................... $547,702 $(374,065) $ 0 $173,637
Costs of Sales................ 378,746 (269,331) 0 109,415
-------- --------- ------- --------
Gross Profit.................... 168,956 (104,734) 0 64,222
Selling & Administrative
Expenses..................... 127,500 (89,328) 2,450 (b) 40,622
-------- --------- ------- --------
Operating Profit................ 41,456 (15,406) (2,450) 23,600
Interest Expense, net......... 5,815 (5,570) 2,110(c) 2,355
Other Non-Operating Expenses.. (472) 407 0 (65)
Equity Earnings (Loss) from
Unconsolidated Affiliates.... (469) (45) 13,374(d) 12,860
-------- --------- ------- --------
Income Before Income Taxes...... 35,644 (10,288) 8,814 34,170
Income Tax Provision............ 13,174 (3,946) 4,782(e) 14,010
-------- --------- ------- --------
Net Income...................... $ 22,470 $ (6,342) $ 4,032 $ 20,160
======== ========= ======= ========
Earnings Per Share:
Basic......................... $1.42 $1.27
Diluted....................... $1.38 $1.24
THESE PRO FORMA FINANCIAL STATEMENTS DO NOT REFLECT THE SYNERGIES EXPECTED
TO RESULT FROM THE TRANSACTION OR THE RELATED SYNERGY COSTS.
See Notes to Unaudited Thomas Pro Forma Consolidated Statements of Income.
</TABLE>
<TABLE>
UNAUDITED THOMAS PRO FORMA CONSOLIDATED BALANCE SHEET
<CAPTION>
AS OF JUNE 30, 1998
(IN THOUSANDS)
HISTORICAL THOMAS PRO FORMA
THOMAS LIGHTING THOMAS
INDUSTRIES ASSETS AND CONTRIBUTION INDUSTRIES
INC. LIABILITIES ADJUSTMENTS INC.
ASSETS ---------- ----------- ------------ ----------
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash and Cash Equivalents.......... $ 9,747 $ (1,449) $ 0 $ 8,298
Accounts Receivable, net........... 85,826 (64,846) 0 20,980
Inventory.......................... 78,842 (57,025) 0 21,817
Other Current Assets............... 15,263 (7,792) 43,422(f) 50,893
-------- --------- -------- --------
189,678 (131,112) 43,422 101,988
Property and Equipment, net........ 79,394 (46,632) 0 32,762
Goodwill........................... 55,206 (47,550) 0 7,656
Other Assets....................... 14,798 (9,235) 23,460(g) 29,023
Investments In and Advances to
Unconsolidated Affiliates......... (153) (655) 128,883(h) 128,075
-------- --------- -------- --------
Total Assets................... $338,923 $(235,184) $195,765 $299,504
======== ========= ======== ========
LIABILITIES & SHAREHOLDERS'
INVESTMENT
CURRENT LIABILITIES
Accounts Payable................... $ 26,109 $ (19,749) $ 0 $ 6,360
Short-term Borrowings.............. 20,426 (136) 0 20,290
Current Portion of Long-term Debt.. 7,813 (7,813) 7,730(i) 7,730
Other Current Liabilities.......... 39,010 (21,422) 5,299(j) 22,887
-------- --------- -------- --------
93,358 (49,120) 13,029 57,267
Long-term Debt..................... 48,512 (46,486) 46,350(k) 48,376
Deferred Tax....................... 8,780 (5,662) 5,662(l) 8,780
Other Liabilities.................. 5,784 (3,767) 575(m) 2,592
Shareholders' Investment
Common Stock..................... 17,407 0 0 17,407
Additional Paid-in Capital....... 109,865 0 0 109,865
Minimum Pension Liability
Adjustment...................... (473) 0 0 (473)
Treasury Shares.................. (17,200) 0 0 (17,200)
Foreign Currency Translation..... (5,388) 0 0 (5,388)
Retained Earnings................ 78,278 (130,149) 130,149(n) 78,278
-------- --------- -------- --------
Total Shareholders'
Investments................... 182,489 (130,149) 130,149 182,489
-------- --------- -------- --------
Total Liabilities &
Shareholders' Investment.... $338,923 $(235,184) $195,765 $299,504
======== ========= ======== ========
See Notes to Unaudited Thomas Pro Forma Consolidated Balance Sheet.
</TABLE>
NOTES TO UNAUDITED THOMAS PRO FORMA
CONSOLIDATED STATEMENTS OF INCOME AND BALANCE SHEET
NOTE 1. BASIS OF PRESENTATION
On April 28, 1998, Genlyte and Thomas entered into definitive agreements to
combine the lighting business of Thomas with the business of Genlyte through the
Joint Venture. On August 30, 1998, Genlyte contributed to the Joint Venture
substantially all of its assets in exchange for a 68% interest in the Joint
Venture and the Joint Venture's assumption of substantially all of its
liabilities, and Thomas contributed to the Joint Venture substantially all
of its assets comprising Thomas Lighting in exchange for a 32% interest in
the Joint Venture and the Joint Venture's assumption of certain liabilities.
Genlyte and Thomas will continue to exist as separate publicly traded
companies.
Accounting Treatment
Thomas accounted for its investment in the Joint Venture under the
equity method of accounting.
The contribution of Thomas' lighting business to the Joint Venture was
accounted for as a purchase in accordance with Accounting Principles Board
Opinion No. 16. Purchase accounting for a combination is similar to the
accounting treatment used in the acquisition of any asset group. Although Thomas
retains a 32% interest in the Joint Venture, Thomas' contributed business
will be reflected at its aggregate fair value in the financial statements of the
Joint Venture. The fair value of Thomas' contributed business was mutually
determined by the parties and was the basis for determining the ownership
interests to be issued in the Joint Venture. The assets contributed by Genlyte
to the Joint Venture are reflected at their historical cost.
NOTE 2. PRO FORMA ADJUSTMENTS
(a) These pro forma financial statements do not reflect the synergies expected
to result from the Transaction or the related synergy costs. As discussed
in the Joint Proxy Statement incorporated herein by reference, the
synergies are expected to be in excess of $30 million per annum and are
expected to be fully realized by the end of the year 2000 as a result of
cost savings, economies of scale and revenue enhancement opportunities. It
is anticipated that an aggregate of $10.5 million of costs will be incurred
by the Joint Venture during 1998 through 2000 related to achieving the
synergies. See the Joint Proxy Statement incorporated herein by reference
for more information.
(b) Represents administrative costs allocated to Thomas Lighting that were not
be transferred to the Joint Venture. Administrative costs not transferred
to the Joint Venture consist of costs incurred at the corporate office
that were not previously allocated to the Thomas Lighting group. For
purposes of the pro forma statements, the Thomas Lighting group was
allocated corporate expenses from the parent, Thomas, based on the ratio
of Thomas Lighting group sales to total sales of Thomas. This resulted in
an administrative charge of $6.8 million for the year ended December 31,
1997 allocated to the Thomas Lighting group. For purposes of computing the
administrative costs to be incurred by the Joint Venture, specific
calculations were performed based on estimated hours of Thomas' personnel
to be devoted to the Joint Venture. This resulted in an administrative
charge of $4.4 million, or the difference of $2.4 million noted on
adjustment (b). The reason for the difference is the different
methodologies used in the calculation as compared to the allocation based
on sales historically used by Thomas.
(c) The net adjustment to interest expense consists of the following (in
thousands):
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
1998 1997
------------- ------------
<S> <C> <C>
Interest expense associated with the Day-Brite
Note retained by Thomas...................... $2,565 $ 5,833
Interest income on the Debt Equalization Note
at an assumed weighted average interest rate
of 6.25% per annum........................... (707) (1,414)
Interest income on the Working Capital
Adjustment at an assumed weighted average
interest rate of 5.75% per annum............. -- (2,309)
------ -------
$1,858 $ 2,110
====== =======
</TABLE>
(d) Represents Thomas' 32% interest in the equity income of the Joint Venture
of $9,579,000 and $15,398,000 for the periods ended June 30, 1998 and
December 31, 1997, respectively. Also, includes amortization of Thomas'
excess investment in the Joint Venture of approximately $1,012,000 and
$2,024,000 for the periods ended June 30, 1998 and December 31, 1997,
respectively.
(e) Represents the adjustment to Thomas' historical tax provision required to
reflect Thomas's 32% share of the Joint Venture's pre-tax earnings at an
assumed effective tax rate. The pro forma Thomas effective tax rates were
38.5% and 41.0% for the periods ended June 30, 1998 and December 31,
1997, respectively, and were based on pre-tax book earnings adjusted for
certain nondeductible items.
(f) Represents $40,158,000 related to the Working Capital Adjustment due from
the Joint Venture. The estimated Working Capital Adjustment is based on
pro forma net working capital contributed to the Joint Venture by Thomas
in excess of the target net working capital, as defined in the Thomas
Capitalization Agreement incorporated herein by reference. The target net
working capital is intended to represent the net working capital which
should be contributed by Thomas in proportion to the net working capital
being contributed to the Joint Venture by Genlyte. Also includes current
deferred income tax assets of $3,264,000 as the income tax attributes and
liabilities generated by the Joint Venture shall accrue directly to Genlyte
and Thomas and be recorded on their respective financial statements.
(g) Net adjustment to other assets consists of the following (in thousands):
<TABLE>
<CAPTION>
<S> <C>
Debt Equalization Note receivable from the Joint Venture (see
Note 2(h) on page F-32)........................................ $22,628
Deferred tax asset retained by Thomas........................... 459
Deferred loan costs associated with the Day-Brite Note retained
by Thomas...................................................... 280
Certain other assets retained by Thomas......................... 93
-------
Net increase to other assets.................................... $23,460
=======
</TABLE>
(h) Represents Thomas' investment in the Joint Venture, calculated as follows
(in thousands):
<TABLE>
<CAPTION>
<S> <C>
Thomas' historical investment in the contributed assets and
liabilities of Thomas Lighting............................... $130,149
Recognition of Working Capital Adjustment with Joint Venture
(see Note 2(f)).............................................. (40,158)
Current deferred tax asset retained by Thomas (see Note 2(f)). (3,264)
Net adjustment to other assets retained by Thomas (see Note
2(g))........................................................ (23,460)
Day-Brite Note retained by Thomas (see Note 2(k))............. 54,080
Net adjustment to other current liabilities retained by Thomas
(see Note 2(j)).............................................. 5,299
Long-term deferred tax liabilities retained by Thomas (see
Note 2(l))................................................... 5,662
Long-term Beaver Dam Liabilities retained by Thomas (see Note
2(m))........................................................ 575
--------
Thomas' investment in the Joint Venture....................... $128,883
========
</TABLE>
(i) Represents the current portion of the Day-Brite Note that will be retained
by Thomas.
(j) Net adjustment to other current liabilities consists of the following (in
thousands):
<TABLE>
<CAPTION>
<S> <C>
Accrued interest on the Day-Brite Note retained by Thomas......... $ 2,119
Current Beaver Dam Liabilities retained by Thomas................. 200
Represents certain other liabilities retained by Thomas........... 201
Deferred tax liabilities retained by Thomas....................... 2,129
Income tax payable retained by Thomas............................. 650
--------
Net adjustment to other current liabilities....................... $ 5,299
========
</TABLE>
(k) Represents the long-term portion of the Day-Brite Note retained by Thomas.
(l) Represents long-term deferred tax liabilities retained by Thomas.
(m) Represents long-term Beaver Dam Liabilities retained by Thomas.
(n) Represents Thomas' historical investment in the contributed assets and
liabilities of Thomas Lighting.
UNAUDITED GENLYTE THOMAS GROUP LLC PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
INTRODUCTION
The following pro forma consolidated financial statements of Genlyte Thomas
Group LLC (the "Joint Venture") (the "Unaudited Joint Venture Pro Forma
Consolidated Financial Statements"), include the unaudited pro forma
consolidated statements of income for the six months ended July 4, 1998 and for
the year ended December 31, 1997 (the "Unaudited Joint Venture Pro Forma
Consolidated Statements of Income"), and the unaudited pro forma consolidated
balance sheet as of July 4, 1998 (the "Unaudited Joint Venture Pro Forma
Consolidated Balance Sheet").
The Joint Venture Pro Forma Consolidated Statements of Income are based on
the unaudited consolidated statement of income of Genlyte for the six months
ended July 4, 1998, the unaudited combined statement of income of Thomas
Lighting for the six months ended June 30, 1998, the audited consolidated
statement of income of Genlyte for the year ended December 31, 1997, and the
audited combined statement of income of Thomas Lighting for the year ended
December 31, 1997, and are adjusted to give effect to the transaction as though
it had occurred as of January 1, 1997.
The Joint Venture Pro Forma Consolidated Balance Sheet is based on the
unaudited consolidated balance sheet of Genlyte as of July 4, 1998 and the
unaudited combined balance sheet of Thomas Lighting as of June 30, 1998, and is
adjusted to give effect to the transaction as if it had occurred on July 4,
1998.
The Joint Venture Pro Forma Consolidated Financial Statements reflect pro
forma adjustments to give effect to the transactions contemplated in the
Transaction Documents whereby (a) Genlyte contributed to the Joint Venture
substantially all of its assets in exchange for a 68% interest in the Joint
Venture and the Joint Venture's assumption of substantially all of its
liabilities and (b) Thomas contributed to the Joint Venture substantially
all of its assets comprising Thomas Lighting in exchange for a 32% interest in
the Joint Venture and the Joint Venture's assumption of certain liabilities. For
accounting purposes, Genlyte's majority ownership of the Joint Venture requires
the assets and liabilities contributed by Thomas to the Joint Venture to be
valued at their fair value in the Joint Venture's consolidated financial
statements. Certain pro forma adjustments result from management's preliminary
determination of purchase accounting adjustments and are based upon available
information and certain assumptions that management considers reasonable under
the circumstances. Consequently, the amounts reflected in the Unaudited Joint
Venture Pro Forma Consolidated Financial Statements are subject to change.
The Joint Venture Pro Forma Consolidated Financial Statements and the
accompanying notes should be read in conjunction with Genlyte's historical
consolidated financial statements and the notes thereto incorporated by
reference herein, and Thomas Lighting's historical combined financial statements
and notes thereto, in the Joint Proxy Statement incorporated herein by
reference.
The Joint Venture Pro Forma Consolidated Financial Statements do not
purport to be indicative of what the Joint Venture's financial condition or
results of operations would have been had the transaction in fact been
consummated as of the assumed dates and for the periods presented, nor are they
indicative of the results of operations or financial condition for any future
period or date. In addition, the Joint Venture Pro Forma Consolidated Financial
Statements do not reflect the synergies expected to result from the transaction
or the related synergy costs. As discussed in the Joint Proxy Statement
incorporated herein by reference, the synergies are expected to be in excess of
$30 million per annum and are expected to be fully realized by the end of the
year 2000 as a result of cost savings, economies of scale and revenue
enhancement opportunities. It is anticipated that an aggregate of $10.5 million
of costs will be incurred by the Joint Venture during the period 1998 through
2000 related to achieving the synergies. See the Joint Proxy Statement
incorporated herein by reference.
<TABLE>
UNAUDITED GENLYTE THOMAS GROUP LLC
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
<CAPTION>
FOR THE SIX MONTHS ENDED JULY 4, 1998
(IN THOUSANDS)
PRO FORMA
PRO FORMA GENLYTE
HISTORICAL THOMAS TRANSACTION THOMAS
GENLYTE LIGHTING (a) ADJUSTMENTS GROUP LLC
---------- ------------ ----------- ---------
<S> <C> <C> <C> <C>
Net Sales...................... $260,451 $198,567 $ 0 $459,018
Cost of Sales................ 170,282 136,500 400(b) 307,182
-------- ------- ------- --------
Gross Profit................... 90,169 62,067 (400) 151,836
Selling & Administrative
Expenses.................... 66,205 53,137 132(c) 119,074
(500)(d)
100(b)
-------- ------- ------- --------
Operating Profit............... 23,964 8,930 (132) 32,762
Interest Expense, net........ 1,824 639 0 2,463
Other Non-Operating Expenses. 0 365 0 365
-------- ------- ------- --------
Income Before Income Taxes..... 22,140 7,926 (132) 29,934
Income Tax Provision......... 9,519 0 (9,519)(e) 0
-------- ------- -------- --------
Net Income..................... $ 12,621 $ 7,926 $9,387 $ 29,934
======== ======= ======== ========
THESE PRO FORMA FINANCIAL STATEMENTS DO NOT REFLECT THE SYNERGIES EXPECTED
TO RESULT FROM THE TRANSACTION OR THE RELATED SYNERGY COSTS.
See Notes to Unaudited Genlyte Thomas Group LLC Pro Forma Consolidated
Financial Statements.
</TABLE>
<TABLE>
UNAUDITED GENLYTE THOMAS GROUP LLC PRO FORMA CONSOLIDATED
STATEMENT OF INCOME
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
(IN THOUSANDS)
PRO FORMA
PRO FORMA GENLYTE
HISTORICAL THOMAS TRANSACTION THOMAS
GENLYTE LIGHTING(a) ADJUSTMENTS GROUP LLC
---------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Net Sales....................... $487,961 $390,638 $ 0 $878,599
Cost of Sales................. 318,556 269,331 800(b) 588,687
-------- -------- -------- --------
Gross Profit.................... 169,405 121,307 (800) 289,912
Selling & Administrative
Expenses..................... 131,784 103,451 264(c) 234,699
(1,000)(d)
200(b)
-------- -------- -------- --------
Operating Profit................ 37,621 17,856 (264) 55,213
Interest Expense, net......... 4,085 3,741 0 7,826
Other Non-Operating Expenses.. 0 (733) 0 (733)
-------- -------- -------- --------
Income Before Income Taxes...... 33,536 14,848 (264) 48,120
Income Tax Provision.......... 15,310 0 (15,310)(e) 0
-------- -------- -------- --------
Net Income...................... $ 18,226 $ 14,848 $ 15,046 $ 48,120
======== ======== ======== ========
THESE PRO FORMA FINANCIAL STATEMENTS DO NOT REFLECT THE SYNERGIES EXPECTED TO
RESULT FROM THE TRANSACTION OR THE RELATED SYNERGY COSTS.
See Notes to Unaudited Genlyte Thomas Group LLC Pro Forma Consolidated
Financial Statements.
</TABLE>
<TABLE>
UNAUDITED GENLYTE THOMAS GROUP LLC PRO FORMA
CONSOLIDATED BALANCE SHEET
<CAPTION>
AS OF JULY 4, 1998
(IN THOUSANDS)
GENLYTE GENLYTE
---------------------------------- PRO FORMA THOMAS
CONTRIBUTION AS THOMAS TRANSACTION GROUP
HISTORICAL ADJUSTMENTS ADJUSTED LIGHTING(F) ADJUSTMENTS LLC
---------- ------------ -------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and Cash
Equivalents.......... $ 327 $ (327)(g) $ 0 $ 1,449 $ 0 $ 1,449
Accounts Receivable,
net.................. 86,073 0 86,073 64,846 0 150,919
Inventories........... 82,891 0 82,891 57,025 6,488(i) 146,404
Other Current Assets.. 18,320 (13,900)(h) 4,420 4,528 0 8,948
-------- -------- -------- -------- -------- --------
Total Current
Assets............. 187,611 (14,227) 173,384 127,848 6,488 307,720
Plant and Equipment,
net.................... 60,980 0 60,980 46,632 20,000(j) 127,612
Goodwill................ 12,528 0 12,528 47,550 (47,550)(j) 44,139
31,611(j)
Other Assets............ 7,856 ( 6,200)(h) 1,656 9,058 0 10,714
-------- -------- -------- -------- --------- --------
Total Assets........ $268,975 $(20,427) $248,548 $231,088 $ 10,549 $490,185
======== ========= ========= ========= ======== ========
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Accounts Payable...... $ 53,721 $ 0 $ 53,721 $ 19,749 $ 0 $ 73,470
Notes Payable........ 0 0 0 40,294 0 40,294
Short-Term Borrowings. 1,000 0 1,000 0 0 1,000
Current Maturities of
Long-Term Debt....... 58 0 58 83 0 141
Accrued Expenses...... 37,263 (614)(h) 6,649 16,123 0 52,772
-------- -------- -------- -------- -------- ---------
Total Current
Liabilities........ 92,042 (614) 91,428 76,249 0 167,677
Long-Term Debt.......... 35,755 0 35,755 22,764 0 58,519
Deferred Income Taxes... 6,824 (6,824)(h) 0 0 0 0
Other Liabilities....... 17,782 0 17,782 3,192 0 20,974
Stockholders'
Investment............. 116,572 (12,989)(i) 103,583 128,883 10,549(k) 243,015
-------- -------- -------- -------- -------- --------
Total Liabilities
and Stockholders'
Investment......... $268,975 $(20,427) $248,548 $231,088 $10,549 $490,185
======== ======== ======== ======== ======== ========
See Notes to Unaudited Genlyte Thomas Group LLC Pro Forma Consolidated
Financial Statements.
</TABLE>
NOTES TO UNAUDITED GENLYTE THOMAS GROUP LLC PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: BASIS OF PRESENTATION
On April 28, 1998, Genlyte and Thomas entered into definitive agreements to
combine the lighting business of Thomas with the business of Genlyte through the
Joint Venture. On August 30, 1998 Genlyte contributed to the Joint Venture
substantially all of its assets in exchange for a 68% interest in the Joint
Venture and the Joint Venture's assumption of substantially all of its
liabilities and Thomas contributed to the Joint Venture substantially all of
it assets comprising Thomas Lighting in exchange for a 32% interest in the
Joint Venture and the Joint Venture's assumption of certain liabilities.
Genlyte and Thomas will continue to exist as separate publicly traded
companies.
Accounting Treatment
For accounting purposes, Genlyte's majority ownership of the Joint Venture
requires the assets and liabilities contributed by Thomas to the Joint Venture
to be valued at their fair value in the Joint Venture's consolidated financial
statements. Certain pro forma adjustments result from management's preliminary
determination of purchase accounting adjustments and are based upon available
information and certain assumptions that management considers reasonable under
the circumstances. Consequently, the amounts reflected in the Unaudited Genlyte
Thomas Group LLC Pro Forma Consolidated Financial Statements are subject to
change.
NOTE 2: PRO FORMA ADJUSTMENTS
(a) Represents the Unaudited Thomas Lighting Pro Forma Statements of Income.
(b) Represents the incremental depreciation expense for the six months ended
July 4, 1998 and the year ended December 31, 1997 of $400,000 and $800,000,
respectively, charged to cost of sales and $100,000 and $200,000, respectively,
charged to selling and administrative expense, using an assumed weighted average
useful remaining life of 20 years, related to the incremental fair value step-up
of certain fixed assets of Thomas Lighting (see Note 2 (j)). The allocation of
expense between cost of sales and selling and administrative expense is based on
Genlyte's historical depreciation mix.
(c) Represents incremental goodwill amortization of $132,000 and $264,000 for
the six months ended July 4, 1998 and the year ended December 31, 1997,
respectively, resulting from the excess of the fair market value over the
tangible book value of Thomas' Contributed Business (see Note 2 (j)). Such
excess will be amortized over 40 years, subject to further analysis subsequent
to the closing of the Transaction.
(d) Represents estimated costs to be charged to Genlyte by the Joint Venture
for certain shareholder-related services rendered by the Joint Venture on behalf
of Genlyte.
(e) Represents the elimination of the income tax provision included in
Genlyte's historical financial statements. The Joint Venture will be treated as
a partnership for federal income tax purposes and therefore, the income tax
attributes and liabilities generated by the Joint Venture shall accrue directly
to Genlyte and Thomas and be recorded in their respective financial statements.
(f) Represents the Unaudited Thomas Lighting Pro Forma Balance Sheet.
(g) Represents the elimination of cash and cash equivalents which will be
retained by Genlyte.
(h) Represents the elimination of accrued income taxes payable and deferred
income tax assets and liabilities which will be retained by Genlyte, as the
income tax attributes and liabilities generated by the Joint Venture will accrue
directly to Genlyte and Thomas and be recorded in their respective financial
statements.
(i) The net adjustment to retained earnings consists of the net effect of the
adjustments described in Note 2(g) and Note 2(h).
(j) Represents the allocation of the excess of the fair market value over
tangible book value of Thomas' contributed business as follows (in thousands):
<TABLE>
<CAPTION>
<S> <C>
Fair value of Thomas' Contributed Business as mutually
determined by Genlyte and Thomas, which was the basis for
determining the ownership interests to be issued in the Joint
Venture........................................................ $139,432
Tangible book value of Thomas' Contributed Business............. 81,333
--------
Excess of fair value over tangible book value................... 58,099
Less fair value allocations:
Inventory step-up............................................. 6,488
Property, plant and equipment step-up......................... 20,000
--------
Goodwill.................................................... $ 31,611
========
</TABLE>
The cost basis of properties and other assets was adjusted to fair market
value based on management's preliminary estimates which are subject to change
based upon the results of valuations management intends to have performed.
(k) Represents the excess of fair value over book value for Thomas'
contributed business recognized in connection with the purchase accounting for
the Joint Venture.
Union, NJ and Louisville, KY, August 27, 1998 The Genlyte Group
Incorporated (NASDAQ: GLYT) and Thomas Industries Inc. (NYSE:TII) announced that
their respective shareholders have approved today the new lighting venture
between the two companies. It is anticipated that the transaction will be
effective on August 30, 1998. The new joint venture company will be named
Genlyte Thomas Group LLC.
As previously announced, both Genlyte and Thomas will continue to exist
as separate publicly traded companies. Under the agreement, Genlyte will
contribute substantially all of its assets and liabilities to the venture, which
will be in the form of a limited liability company, and Thomas will contribute
substantially all of its lighting assets and related liabilities. Genlyte will
own a 68% interest in the venture and Thomas will own a 32% interest. Genlyte
Thomas Group LLC will be headquartered in Louisville, Kentucky.
Thomas Industries, headquartered in Louisville, Kentucky, is a recognized
leader in the design and manufacture of compressors and vacuum pumps primarily
for global OEM applications as well as commercial, industrial and consumer
lighting products. The company has operations in the United States, Canada,
Mexico, South America, Europe and Asia.
The Genlyte Group is a leading manufacturer of lighting fixtures and
controls for the commercial, industrial and residential markets. Its products
are sold under the brand names of Bronzelite, Crescent, Diamond F, Exceline,
Forecast, Hadco, Homelyter, Lightolier, Lightolier Controls, Stonco, and Wide-
Lite in the U.S. and CFI, Keene-Widelite, Lightolier, Lightolier Controls,
Prodel, Stonco and Uniglo in Canada.
# # #
Louisville, KY, August 31, 1998 The Genlyte Group Incorporated (NASDAQ:
GLYT) and Thomas Industries Inc. (NYSE: TII) today announced the closing of the
lighting joint venture transaction on August 30, 1998. This transaction
combines substantially all of the assets and liabilities of Genlyte and
substantially all of the lighting assets and related liabilities of Thomas to
create GENLYTE THOMAS GROUP LLC, estimated to be the third largest lighting
fixture manufacturer in North America. Genlyte owns a 68% interest in the joint
venture and Thomas owns a 32% interest. The transaction is expected to be
accretive to both companies' earnings in 1999 and beyond.
Larry K. Powers, President and Chief Executive Officer of both Genlyte and
Genlyte Thomas Group LLC, noted, "Genlyte Thomas Group LLC combines two
significant lighting companies into a new company which will be one of the
strongest lighting businesses in North America. We believe that this venture
will have the market share, brand strength, and financial flexibility to compete
very effectively with other leaders in the lighting industry. We believe that
these companies are really an excellent fit with each other. In addition to
complementary products, markets and sales organizations, our combined management
teams have proven track records of growing sales and improving profitability. We
are extremely excited about this new joint venture and the opportunity that it
provides."
Timothy C. Brown, Chairman, President and Chief Executive Officer of Thomas
and Chairman of the Genlyte Thomas Management Board, commented, "Genlyte Thomas
now has an estimated 13% market share, which is quite significant for the
lighting fixture industry. The combined companies have a number of the leading
brand names in the industry, which will continue to be sold through separate
Thomas and Genlyte sales organizations. The strength of our brands, along with
the purchasing power and manufacturing efficiencies that we anticipate
achieving, will provide Genlyte Thomas the opportunity to grow and provide
significant benefits for employees, customers and shareholders."
The transaction is expected to create annual synergies in excess of $30
million, which are expected to be fully realized by the end of the year 2000 as
a result of cost savings, economies of scale and revenue enhancement
opportunities. Benefits include cost reductions from the combined purchasing
power of the two companies. Other cost efficiencies will be realized in freight
and warehousing, product and plant rationalizations and overall manufacturing
synergies.
Both Genlyte and Thomas will continue to exist as separate publicly traded
companies. Thomas Industries will continue as a recognized global leader in the
design and manufacture of compressors and vacuum pumps primarily for OEM
applications.
Genlyte Thomas Group LLC is a leading manufacturer of lighting fixtures and
controls for the commercial, industrial and residential markets. The company is
headquartered in Louisville, Kentucky, and employs more than 5,000 people.
# # #
The statements in this press release with respect to future results, future
expectations and plans for future activities and synergies may be regarded as
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and actual results may differ materially from
those currently expected. They are subject to various risks, such as the
ability of the companies to meet new business sales goals, fluctuations in
commodity prices, slowing of the overall economy, increased interest costs
arising from a change in the companies' leverage or change in rates, failure of
the companies' plans to produce anticipated cost savings, and the timing and
magnitude of capital expenditures, as well as other risks discussed in both
companies' filing with the Securities and Exchange Commission, including Annual
Reports and 10-Ks for the year ended December 31, 1997. The companies make no
commitment to disclose any revisions to forward-looking statements, or any
facts, events or circumstances after the date hereof that may bear upon forward-
looking statements.
