-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EcXLiPMxg6nfk9DUe6vfn/nIKgiO6P6ea0NRtzU8DlX6zS/uC6gO7VWivFVURnfT xbvwFP2XyooldHDMwE90xg== 0000950114-98-000248.txt : 19980515 0000950114-98-000248.hdr.sgml : 19980515 ACCESSION NUMBER: 0000950114-98-000248 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980514 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GRAYBAR ELECTRIC CO INC CENTRAL INDEX KEY: 0000205402 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-ELECTRICAL APPARATUS & EQUIPMENT, WIRING SUPPLIES [5063] IRS NUMBER: 130794380 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-00255 FILM NUMBER: 98619594 BUSINESS ADDRESS: STREET 1: 34 N MERAMEC AVE CITY: ST LOUIS STATE: MO ZIP: 63105 BUSINESS PHONE: 3145129200 MAIL ADDRESS: STREET 1: P O BOX 7231 CITY: ST LOUIS STATE: MO ZIP: 63177 10-Q 1 GRAYBAR ELECTRIC COMPANY, INC. FORM 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q Commission File Number 0-255 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1998 ------------------------ OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ------------ ------------ GRAYBAR ELECTRIC COMPANY, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) NEW YORK 13 - 0794380 - ------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 34 NORTH MERAMEC AVENUE, ST. LOUIS, MO 63105 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) POST OFFICE BOX 7231, ST. LOUIS, MO 63177 - ------------------------------------------------------------------------------- (Mailing Address) (Zip Code) Registrant's telephone number, including area code: (314) 512 - 9200 --------------------- 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. YES X NO --------- --------- Common Stock Outstanding at April 30, 1998: 5,090,583 ------------------ (Number of Shares) 2 PART I ------ CONSOLIDATED BALANCE SHEETS --------------------------- (Dollars Stated in Thousands) (Except for Share and Per Share Data)
MARCH 31, 1998 DECEMBER 31, 1997 --------------------- --------------------- CURRENT ASSETS Cash $ 49,223 $ 18,523 --------------------- --------------------- Trade receivables 427,057 402,455 --------------------- --------------------- Merchandise inventory 435,139 389,314 --------------------- --------------------- Other current assets 13,602 13,748 --------------------- --------------------- Total current assets 925,021 824,040 --------------------- --------------------- PROPERTY Land 22,703 22,868 --------------------- --------------------- Buildings and permanent fixtures 284,676 281,508 --------------------- --------------------- Capital equipment leases 36,101 26,138 --------------------- --------------------- Less-Accumulated depreciation 140,732 136,485 --------------------- --------------------- Net property 202,748 194,029 --------------------- --------------------- DEFERRED FEDERAL INCOME TAXES 9,424 9,639 --------------------- --------------------- OTHER ASSETS 21,332 24,113 --------------------- --------------------- $1,158,525 $1,051,821 ===================== ===================== CURRENT LIABILITIES Notes payable to banks $ 211,655 $ 136,925 --------------------- --------------------- Current portion of long-term debt 20,042 15,059 --------------------- --------------------- Trade accounts payable 343,434 326,969 --------------------- --------------------- Income taxes 11,386 --- --------------------- --------------------- Other accrued taxes 10,764 10,663 --------------------- --------------------- Accrued payroll and benefit costs 19,367 41,924 --------------------- --------------------- Dividends payable --- 5,246 --------------------- --------------------- Other payables and accruals 33,254 44,856 --------------------- --------------------- Total current liabilities 649,902 581,642 --------------------- --------------------- POSTRETIREMENT BENEFITS LIABILITY 77,402 77,300 --------------------- --------------------- LONG TERM DEBT 166,689 139,748 --------------------- --------------------- 2 3 CONSOLIDATED BALANCE SHEETS --------------------------- (Dollars Stated in Thousands) (Except for Share and Per Share Data) MARCH 31, 1998 DECEMBER 31, 1997 --------------------- --------------------- SHAREHOLDERS' EQUITY CAPITAL STOCK Preferred: --------- Par value $20 per share Authorized 300,000 shares SHARES ------ 1998 1997 ---- ---- Issued to shareholders 6,009 6,009 ------------- ------------- In treasury, at cost (500) (58) ------------- ------------- Outstanding 5,509 5,951 110 119 ------------- ------------- --------------------- --------------------- Common: ------ Stated value $20 per share Authorized 7,500,000 shares SHARES ------ 1998 1997 ---- ---- Issued to voting trustees 4,887,693 4,883,162 ------------- ------------- Issued to shareholders 323,568 323,434 ------------- ------------- In treasury, at cost (99,106) (19,124) ------------- ------------- Outstanding 5,112,155 5,187,472 102,243 103,749 ------------- ------------- --------------------- --------------------- Advance payments on subscriptions to common stock 36 37 --------------------- --------------------- Retained earnings 162,239 149,226 --------------------- --------------------- Accumulated other comprehensive income (Note 3) (96) --- --------------------- --------------------- TOTAL SHAREHOLDERS' EQUITY 264,532 253,131 --------------------- --------------------- $1,158,525 $1,051,821 ===================== ===================== See accompanying Notes to Consolidated Financial Statements
3 4 CONSOLIDATED STATEMENTS OF INCOME --------------------------------- (Dollars Stated in Thousands) (Except for Share and Per Share Data)
QUARTER ENDED MARCH 31, 1998 MARCH 31, 1997 ------------------ ------------------ GROSS SALES, net of returns and allowances $871,855 $732,799 ------------------ ------------------ Less - Cash discounts 2,524 2,383 ------------------ ------------------ NET SALES 869,331 730,416 ------------------ ------------------ COST OF MERCHANDISE SOLD 710,189 594,110 ------------------ ------------------ Gross margin 159,142 136,306 ------------------ ------------------ SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 124,366 110,601 ------------------ ------------------ DEPRECIATION AND AMORTIZATION 5,649 5,319 ------------------ ------------------ Income from operations 29,127 20,386 ------------------ ------------------ OTHER INCOME, net 1,753 1,829 ------------------ ------------------ INTEREST EXPENSE 6,143 4,587 ------------------ ------------------ Income before provision for income taxes 24,737 17,628 ------------------ ------------------ PROVISION FOR INCOME TAXES Current 9,973 7,079 ------------------ ------------------ Deferred 213 154 ------------------ ------------------ Total provision for income taxes 10,186 7,233 ------------------ ------------------ NET INCOME $ 14,551 $ 10,395 ================== ================== NET INCOME PER SHARE OF COMMON STOCK (NOTE 2) $ 2.83 $ 1.93 ================== ================== DIVIDENDS Preferred - $.25 per share $ 1 $ 2 ------------------ ------------------ Common - $.30 per share 1,537 1,462 ------------------ ------------------ $ 1,538 $ 1,464 ================== ================== See accompanying Notes to Consolidated Financial Statements
4 5 CONSOLIDATED STATEMENTS OF CASH FLOWS ------------------------------------- (Dollars Stated in Thousands) (Except for Share and Per Share Data)
THREE MONTHS ENDED MARCH 31, 1998 1997 ---------------- ---------------- CASH FLOWS FROM OPERATIONS Net Income $ 14,551 $ 10,395 ---------------- ---------------- Adjustments to reconcile net income to cash used by operations: Depreciation and amortization 5,649 5,319 ---------------- ---------------- Deferred income taxes 213 154 ---------------- ---------------- Gain on sale of property (554) (950) ---------------- ---------------- Changes in assets and liabilities: Trade receivables (24,602) 6,931 ---------------- ---------------- Merchandise inventory (45,825) (48,283) ---------------- ---------------- Other current assets 146 70 ---------------- ---------------- Other assets 2,781 (714) ---------------- ---------------- Trade accounts payable 16,465 25,605 ---------------- ---------------- Accrued payroll and benefit costs (22,557) (17,915) ---------------- ---------------- Other accrued liabilities (11) (2,320) ---------------- ---------------- (68,295) (32,103) ---------------- ---------------- Net cash used by operations (53,744) (21,708) ---------------- ---------------- CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of property 1,293 1,655 ---------------- ---------------- Capital expenditures for property (5,145) (4,753) ---------------- ---------------- Net cash used by investing activities (3,852) (3,098) ---------------- ---------------- CASH FLOWS FROM FINANCING ACTIVITIES Net increase in notes payable to banks 74,730 64,784 ---------------- ---------------- Proceeds from long-term debt 25,000 --- ---------------- ---------------- Repayment of long-term debt (1,637) (954) ---------------- ---------------- Principal payments under capital equipment leases (1,401) (1,330) ---------------- ---------------- Sale of common stock 92 183 ---------------- ---------------- Purchase of treasury stock (1,608) (1,285) ---------------- ---------------- Dividends paid (6,784) (6,678) ---------------- ---------------- Net cash flow provided by financing activities 88,392 54,720 ---------------- ---------------- EFFECT OF CURRENCY TRANSLATION ADJUSTMENTS ON CASH (96) --- ---------------- ---------------- NET INCREASE IN CASH 30,700 29,914 ---------------- ---------------- CASH, BEGINNING OF YEAR 18,523 13,820 ---------------- ---------------- CASH, END OF FIRST QUARTER $ 49,223 $ 43,734 ================ ================ See accompanying Notes to Consolidated Financial Statements
5 6 CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY ---------------------------------------------------------- FOR THE QUARTERS ENDED ---------------------- MARCH 31, 1998 AND 1997 ----------------------- (Dollars Stated in Thousands) (Except for Share and Per Share Data)
ACCUMULATED OTHER COMPRE- COMMON PREFERRED RETAINED HENSIVE STOCK STOCK EARNINGS INCOME TOTAL ------------ ------------ ------------ ------------ ------------ December 31, 1996 $98,373 $143 $115,218 $213,734 ------------ Comprehensive Income: Net Income 10,395 10,395 Currency Translation Adjustments, Net of Tax ------------ Total Comprehensive Income 10,395 ------------ Stock Issued 183 183 Stock Redeemed (1,278) (7) (1,285) Dividends Declared (1,464) (1,464) ------------- ------------ ------------ ------------ ------------ March 31, 1997 $97,278 $136 $124,149 $221,563 ============= ============ ============ ============ ============ ACCUMULATED OTHER COMPRE- COMMON PREFERRED RETAINED HENSIVE STOCK STOCK EARNINGS INCOME TOTAL ------------ ------------ ------------ ------------ ------------ December 31, 1997 $103,786 $119 $149,226 $253,131 ------------ Comprehensive Income: Net Income 14,551 14,551 Currency Translation Adjustments, Net of Tax $(96) (96) ------------ Total Comprehensive Income 14,455 ------------ Stock Issued 92 92 Stock Redeemed (1,599) (9) (1,608) Dividends Declared (1,538) (1,538) ------------ ------------ ------------ ------------ ------------ March 31, 1998 $102,279 $110 $162,239 $(96) $264,532 ============ ============ ============ ============ ============ See accompanying Notes to Consolidated Financial Statements
6 7 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND OTHER INFORMATION --------------------------- (Dollars Stated in Thousands) (Except for Share and Per Share Data) Note 1 - ------ The condensed financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report on Form 10-K. In the opinion of the Company, the quarterly report includes all adjustments, consisting of normal recurring accruals, necessary for the fair presentation of the financial statements presented. Such interim financial information is subject to year-end adjustments and independent audit. Results for interim periods are not necessarily indicative of results to be expected for the full year. Note 2 - ------
THREE MONTHS 1998 THREE MONTHS 1997 --------------------- --------------------- Earnings for Three Months $ 14,551 $ 10,395 --------------------- --------------------- Dividends on Preferred Stock 1 2 --------------------- --------------------- Available for Common Stock $ 14,550 $ 10,393 --------------------- --------------------- Average Common Shares Outstanding 5,145,014 5,374,410 --------------------- --------------------- Earnings Per Share $ 2.83 $ 1.93 --------------------- --------------------- Restated for the declaration of a 10% stock dividend in 1997. Prior to adjusting for the stock dividend, the average common shares outstanding were 4,885,827.
Note 3 - ------ Effective January 1, 1998, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income". Comprehensive income is reported in the Consolidated Statements of Changes in Shareholders' Equity. 7 8 MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS --------------------------------------------- (Dollars Stated in Thousands) RESULTS OF OPERATIONS - --------------------- Net sales in the first three months of 1998 were 19% higher than in the first three months of 1997. The higher net sales resulted from improvements in the market sectors of the economy in which the Company operates. Gross margin in the first three months of 1998 increased $22,836 (16.8%) compared to the first three months of 1997 primarily due to increased sales in the electrical and communication markets. The increase in selling, general and administrative expenses in the first three months of 1998 compared to the first three months of 1997 occurred largely because of adjustments in personnel complement and adjustments in compensation and related expenses. Interest expense increased in the first three months of 1998 compared to the first three months of 1997 primarily due to increased levels of borrowing incurred to finance higher aggregate levels of inventory and receivables. Interest rates on 1998 short-term borrowings have been slightly higher than for the same period in 1997. Other income in the first three months of 1998 includes gains on sale of property of $554. The combined effect of the increase in gross margin, together with increases in selling, general and administrative expenses, interest expense and depreciation and amortization, resulted in an increase in pretax earnings of $7,109 in the first three months of 1998 compared to the same period in 1997. 8 9 MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS --------------------------------------------- (Dollars Stated in Thousands) FINANCIAL CONDITION AND LIQUIDITY - --------------------------------- The financial condition of the Company continues to be strong. At March 31, 1998, current assets exceeded current liabilities by $275,119, up $32,721 from December 31, 1997. The current assets at March 31, 1998 were sufficient to meet the cash needs required to pay current liabilities. The Company does not have any plans or commitments which would require significant amounts of additional working capital. At March 31, 1998, the Company had available to it unused lines of credit amounting to $155,000. These lines are available to meet short-term cash requirements of the Company. Bank borrowings outstanding during 1998 through March 31 ranged from a minimum of $110,000 to a maximum of $211,655. The Company has funded its capital requirements from operations, stock issuances to its employees and long term debt. In January, 1998, the Company received the proceeds from a seven-year note for $25,000 at a fixed interest rate of 6.44% with principal payable in quarterly installments beginning in April, 1998. In April, 1998, the Company received the proceeds from a fifteen-year note for $75,000 at a fixed interest rate of 6.59% with principal payable in semiannual installments beginning in October, 2003. Both note agreements have various covenants which limit the Company's ability to make investments, pay dividends, incur debt, dispose of property, and issue equity securities. The Company is also required to maintain certain financial ratios as defined in the agreements. During the first three months of 1998, cash used by operations amounted to $ 53,744 compared to $21,708 cash used by operations in the first three months of 1997. 9 10 PART II: OTHER INFORMATION -------------------------- Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits furnished in accordance with provisions of Item 601 of Regulation S-K. (27) Financial Data Schedule (submitted in EDGAR format only). (b) Reports on Form 8-K No reports on Form 8-K have been filed during the quarter for which this report is filed. 10 11 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 thereunto duly authorized. May 14, 1998 GRAYBAR ELECTRIC COMPANY, INC. ---------------------- (Date) /s/ C. L. HALL ------------------------------ C. L. HALL PRESIDENT /s/ J. R. SEATON ------------------------------ J. R. SEATON VICE PRESIDENT AND COMPTROLLER 11 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 49,223 0 427,057 0 435,139 925,021 343,480 140,732 1,158,525 649,902 166,689 102,243 0 110 162,179 1,158,525 869,331 869,331 710,189 710,189 130,015 0 6,143 24,737 10,186 14,551 0 0 0 14,551 2.83 2.83
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