-----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, UtvdDmeDczEtLu14ReGt4quhRCbmp4WfnZ1f4vCeTvv8EtORDeIDHVGDki4rnOpD 1tvnw9S1+brWPQ9PfGPg4Q== 0000914760-00-000123.txt : 20000515 0000914760-00-000123.hdr.sgml : 20000515 ACCESSION NUMBER: 0000914760-00-000123 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: THOMAS INDUSTRIES INC CENTRAL INDEX KEY: 0000097886 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC LIGHTING & WIRING EQUIPMENT [3640] IRS NUMBER: 610505332 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-05426 FILM NUMBER: 627288 BUSINESS ADDRESS: STREET 1: 4360 BROWNBORO ROAD STREET 2: SUITE 300 CITY: LOUISVILLE STATE: KY ZIP: 40207 BUSINESS PHONE: 5028934600 MAIL ADDRESS: STREET 1: 4360 BROWNBORO ROAD STREET 2: SUITE 300 CITY: LOUISVILLE STATE: KY ZIP: 40207 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2000 ------------------------------------------------- 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 April 29, 2000, was 15,504,612 shares. Page 1 of 10 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) Three Months Ended March 31 2000 1999 ---- ---- Net sales $50,386 $46,301 Cost of products sold 32,587 29,493 ------ ------ Gross profit 17,799 16,808 Selling, general, and administrative expenses 11,159 11,252 Equity income from Lighting 5,411 4,985 ------ ------ Operating income 12,051 10,541 Interest expense 987 1,185 Interest income and other 575 501 ------ ------ Income before income taxes 11,639 9,857 Income taxes 4,481 3,983 ------ ------ Net income $ 7,158 $ 5,874 ====== ====== Net income per share Basic $.46 $.37 Diluted $.45 $.36 Dividends declared per share $0.075 $0.075 Weighted average number of shares outstanding Basic 15,582 15,758 Diluted 15,950 16,141 See notes to condensed consolidated financial statements. 2 THOMAS INDUSTRIES INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in Thousands) (Unaudited) March 31 December 31 ASSETS 2000 1999* ---- ---- Current assets Cash and cash equivalents $ 4,871 $ 16,487 Accounts receivable, less allowance (2000--$770; 1999--$698) 25,105 20,869 Inventories: Finished products 4,682 4,965 Raw materials 10,313 10,209 Work in process 4,721 4,577 ------- ------- 19,716 19,751 Deferred income taxes 2,865 2,634 Other current assets 3,020 3,370 ------- ------- Total current assets 55,577 63,111 Investment in GTG 164,231 158,865 Property, plant and equipment 80,054 78,903 Less accumulated depreciation and amortization 44,238 42,751 ------- ------- 35,816 36,152 Note receivable from GTG 22,287 22,287 Intangible assets--less accumulated amortization 10,253 10,677 Other assets 2,984 2,884 ------- ------- Total assets $291,148 $293,976 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Notes payable $ 600 $ -- Accounts payable 8,790 7,794 Other current liabilities 19,112 15,289 Current portion of long-term debt 7,784 7,784 ------- ------- Total current liabilities 36,286 30,867 Deferred income taxes 5,953 6,027 Long-term debt (less current portion) 32,770 40,513 Other long-term liabilities 6,945 7,087 ------- ------- Total liabilities 81,954 84,494 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: 2000 -- 17,588,055; 1999 -- 17,567,104 17,588 17,567 Capital surplus 111,238 110,988 Retained earnings 115,679 109,689 Accumulated other comprehensive income (7,600) (6,385) Less cost of treasury shares: (2000--2,088,550; 1999--1,807,650) (27,711) (22,377) ------- ------- Total shareholders' equity 209,194 209,482 ------- ------- Total liabilities and shareholders' equity $291,148 $293,976 ======= ======= *Derived from the audited December 31, 1999, consolidated balance sheet. See notes to condensed consolidated financial statements. 3 THOMAS INDUSTRIES INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Dollars in Thousands) Three Months Ended March 31 -------- 2000 1999 ---- ---- Operating activities: Net income $ 7,158 $ 5,874 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,189 2,101 Deferred income taxes (280) 53 Equity income from Lighting (5,411) (4,985) Distributions from Lighting -- 711 Other items 133 28 Changes in operating assets and liabilities: Accounts receivable (4,640) (4,228) Inventories (380) (120) Accounts payable 1,083 1,444 Accrued expenses and other liabilities 3,864 3,082 Other 322 (680) ------ ------ Net cash provided by operating activities 4,038 3,280 ------ ------ Investing activities: Purchases of property, plant, and equipment (2,002) (2,140) Sale of property, plant, and equipment 2 -- ------ ------ Net cash used in investing activities ( 2,000) (2,140) ------- ------ Financing activities: Proceeds from notes payable to banks, net 600 281 Payments on long-term debt, net (7,743) (7,743) Treasury stock purchased (5,334) -- Dividends paid (1,187) (1,195) Other 316 226 ------ ------ Net cash used in financing activities (13,348) (8,431) Effect of exchange rate change (306) (256) ------- ------ Net decrease in cash and cash equivalents (11,616) (7,547) Cash and cash equivalents at beginning of period 16,487 18,205 ------ ------ Cash and cash equivalents at end of period $ 4,871 $10,658 ====== ====== See notes to condensed consolidated financial statements. 4 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, 2000, are not necessarily indicative of the results that may be expected for the year ending December 31, 2000. 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, 1999. Note B - Contingencies - ---------------------- In the normal course of business, the Company 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 the Company, the ultimate outcome of any litigation is uncertain. Were an unfavorable outcome to occur, the impact could be material to the Company. Note C - Comprehensive Income - ----------------------------- For the three months ended March 31, comprehensive income was: 2000 1999 ---- ---- Net income $7,158 $5,874 Foreign currency translation (1,215) (1,722) ----- ----- Comprehensive income $5,943 $4,152 ===== ===== 5 Note D - Net Income Per Share - ----------------------------- The computation of the numerator and denominator in computing basic and diluted net income per share follows: (In Thousands) 2000 1999 ---- ---- Numerator: Net income $ 7,158 $ 5,874 ====== ====== Denominator: Weighted average shares outstanding 15,582 15,758 Effect of dilutive securities: Director and employee stock options 334 335 Employee performance shares 34 48 ------ ------ Dilutive potential common shares 368 383 ------ ------ Denominator for diluted earnings per share adjusted weighted average shares and assumed conversions 15,950 16,141 ====== ====== Note E - Genlyte Thomas Group LLC - --------------------------------- The following table contains certain unaudited financial information for the Joint Venture. Genlyte Thomas Group LLC Condensed Financial Information (Dollars in Thousands) (Unaudited) March 31 December 31 2000 1999 ---- ---- Balance sheet: Current assets $328,569 $321,788 Long-term assets 229,564 231,643 Current liabilities 155,640 170,478 Long-term liabilities 74,901 73,785 Three Months Ended March 31 ----------------------------- 2000 1999 ---- ---- Income statement: Net sales $244,655 $237,476 Gross profit 81,346 77,378 Earnings before interest and taxes 20,196 19,153 Net income* 18,563 17,231 *Amounts recorded by Thomas Industries Inc.: Equity income from GTG $ 5,940 $ 5,514 Amortization of excess investment (529) (529) ------- ------- Equity income reported by Thomas $ 5,411 $ 4,985 ======= ======= 6 Note F - Receivables from Affiliate - ----------------------------------- Included in Other Long-Term Assets at March 31, 2000, and December 31, 1999, is $22,287,000 which represents a debt equalization note payable to Thomas by GTG related to the formation of the Joint Venture. Interest on the principal amount outstanding under the note accrues at a variable rate based on LIBOR plus the Offshore Rate Margin and is payable on a quarterly basis. The principal amount of the note is due on August 29, 2003, and may be prepaid in whole or in part at any time without premium or penalty. Note G - Segment Disclosures - ---------------------------- Three Months Ended March 31 ------------------ 2000 1999 ---- ---- Revenues Total net sales including intercompany sales Compressors & Vacuum Pumps $55,148 $50,294 Intercompany sales Compressors & Vacuum Pumps (4,762) (3,993) ----- ----- Net sales to unaffiliated customers Compressors & Vacuum Pumps $50,386 $46,301 ====== ====== Operating Income Compressors & Vacuum Pumps $ 8,474 $ 7,765 Lighting* 5,411 4,985 Corporate (1,834) (2,209) ------ ----- $12,051 $10,541 ====== ====== *Represents 32% of GTG net income less amortization of excess investment. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Results of Operations - --------------------- Net sales during the first quarter ended March 31, 2000, were $50.4 million compared to $46.3 million for the first quarter of 1999. The 8.8% net sales increase was generated by very strong results achieved in our North American and Asia Pacific operations. The medical market was the largest contributor to the sales increase. In U.S. dollars, our European operations posted a 1.9% decrease in net sales, but this was primarily due to an unfavorable Euro exchange rate. When measured at a constant exchange rate, our European operations posted an 8.3% increase in net sales. 7 Item 2. Management's Discussion and Analysis - Continued Operating income for the first quarter ended March 31, 2000, was $12.1 million, or 14.3% higher than the prior-year amount of $10.5 million. Our Compressors & Vacuum Pumps Segment posted a 9.1% increase in operating income over the 1999 first quarter. This was principally due to increased sales volume. Our Lighting Segment results increased to $5.4 million in the first quarter of 2000, compared to $5.0 million in the same period last year. We had lower corporate expenses in the first quarter of 2000 compared to 1999, which also contributed to the improvement in operating income. Net income for the 2000 first quarter of $7.2 million was 21.9% higher than the $5.9 million for the comparable 1999 period. It was a record for any first quarter in the Company's history. The increase over 1999 was due primarily to increased sales volume, the increase in GTG's earnings, lower corporate expenses, and lower interest expense as noted below. Interest expense for the 2000 first quarter was $1.0 million, or 16.7% lower than the prior-year amount of $1.2 million. Long-term debt of $7.7 was paid down on January 31, 2000, which reduced interest expense over the prior-year amount. Included in Other Long-Term Assets at March 31, 2000, and December 31, 1999, is $22,287,000 which represents the debt equalization note payable to Thomas by GTG related to the formation of the Joint Venture. Interest on the principal amount outstanding under the note accrues at a variable rate and is payable on a quarterly basis. The principal amount of the note is due on August 29, 2003, and may be prepaid in whole or in part at any time without premium or penalty. Working capital of $19.3 million at March 31, 2000, is $13.0 million lower than the amount at December 31, 1999, primarily resulting from the $7.7 million long-term debt payment on January 31, 2000, and from the $5.3 million spent in the first quarter of 2000 on the stock repurchase program. Since December 31, 1999, we have purchased an additional 280,900 shares for the stock repurchase program that was announced in December 1999. To date, we have purchased, on a cumulative basis, 345,400 shares at a cost of $6,667,447. Accounts receivable at March 31, 2000, have increased by 20.3% since December 31, 1999, due to higher sales volume. The number of days sales in receivables at March 31, 2000, compared to December 31, 1999, has decreased to 43.9 days from 48.0. Annualized inventory turnover at March 31, 2000, of 5.5 improved significantly from the December 31, 1999, level of 5.0. 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 $65.1 million are not restricted at March 31, 2000. 8 Item 2. Management's Discussion and Analysis - Continued As of March 31, 2000, the Company had available credit of $5.7 million with banks under short-term borrowing arrangements, which was unused. Anticipated funds from operations, along with available short-term credit, 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 investment grade, short-term securities. Year 2000 Issue - --------------- During 1999, the Company completed the process of preparing for the Year 2000 date change. To date, the Company has had no material Year 2000 issues. Although considered unlikely, unanticipated problems could still occur. The Company will continue to monitor all business processes, including third parties, throughout 2000 to address any issues and to ensure that all processes continue to function properly. The cost for the Year 2000 project was approximately $2.4 million, which was incurred over the 1996-1999 time frame. We anticipate no material costs to be incurred in 2000 and beyond that are related to the Year 2000 project. The Company has a minority interest in GTG, which has advised the Company that it had no material Year 2000 issues. Although we believe it is unlikely, if GTG has future problems related to the Year 2000 project, this could have an impact on the Company's financial results and condition. New European Currency - --------------------- Eleven European countries (The European Monetary Union) have implemented a single currency zone as of January 1, 1999. The new currency (Euro) will eventually replace the existing currencies of the participating countries. It is expected that this transition from the various currencies to the Euro will occur over a two-year period. The software used by our European operations has been modified to accommodate the dual currencies during the transition period. A team is in place to monitor any changing EMU requirements and to establish the final conversion timetable for the single EMU currency. While management currently believes the Company has accommodated any required changes in its operations, there can be no assurance that its customers, suppliers, service providers, or government agencies will all meet the Euro currency requirements in a timely manner. Such failure to complete the necessary work on a timely basis could result in material financial risk. Item 3. Quantitative and Qualitative Disclosures about Market Risk The Company's long-term debt bears interest at fixed rates; therefore, the Company's results of operations and cash flows would only be affected by interest rate changes to the extent that variable rate, short-term notes payable are outstanding. At March 31, 2000, there was $.6 million in short-term notes payable outstanding. 9 Item 2. Management's Discussion and Analysis - Continued The fair value of the Company's long-term debt is estimated based on current interest rates offered to the Company for similar instruments. The Company believes that the effect, if any, of reasonably possible near-term changes in interest rates on the Company's consolidated financial position would not be significant. The Company has significant operations consisting of sales and manufacturing activities in foreign countries. As a result, the Company's financial results could be significantly affected by factors such as changes in foreign currency exchange rates or weak economic conditions in the foreign markets in which the Company manufactures or distributes its products. Currency exposures are concentrated in Germany but exist to a lesser extent in other parts of Europe and Asia. 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 12, 2000 ------------------------ EX-27 2 FDS --
5 1,000 3-MOS DEC-31-2000 MAR-31-2000 4,871 0 25,875 770 19,716 55,577 80,054 44,238 291,148 36,286 32,770 0 0 17,588 191,606 291,148 50,386 50,386 32,587 32,587 5,040 133 987 11,639 4,481 7,158 0 0 0 7,158 .46 .45
-----END PRIVACY-ENHANCED MESSAGE-----