-----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, Ivn/GmT7LP2WnSQsK2nbtRbp6No2MpluI7uhPgN8QCnRdk6g8PmChWL/BkYQ9oNl AGXSJY3nDz/MMcV+jqvFTg== /in/edgar/work/0000914760-00-000317/0000914760-00-000317.txt : 20001115 0000914760-00-000317.hdr.sgml : 20001115 ACCESSION NUMBER: 0000914760-00-000317 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: THOMAS INDUSTRIES INC CENTRAL INDEX KEY: 0000097886 STANDARD INDUSTRIAL CLASSIFICATION: [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: 763702 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 0001.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [ X ] For the quarterly period ended: September 30, 2000 ------------------------------------------------- OR TRANSITION REPORT PURSUANT TO SECTION 12 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [ ] For the transition period from to ------------------- --------------------------- Commission File Number 1-5426. ----------------------------- THOMAS INDUSTRIES INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 61-0505332 - ------------------------------------------ ---------------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 4360 Brownsboro Road, Louisville, Kentucky 40207 - ------------------------------------------ ---------------------------- (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code: 502/893-4600 ---------------------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ] The number of shares outstanding of issuer's Common Stock, $1 par value, as of November 10, 2000, was 15,078,413 shares. Page 1 of 11 PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) THOMAS INDUSTRIES INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In Thousands Except Amounts Per Share) Three Months Ended Nine Months Ended September 30 September 30 ------------------- ----------------- 2000 1999 2000 1999 ---- ---- ---- ---- Net sales $ 44,664 $ 39,856 $143,018 $133,624 Cost of products sold 28,119 25,503 90,845 85,387 -------- -------- -------- -------- Gross profit 16,545 14,353 52,173 48,237 Selling, general, and administrative expenses 10,364 9,284 32,375 30,636 Equity income from Lighting 6,556 6,351 17,862 16,988 -------- -------- -------- -------- Operating income 12,737 11,420 37,660 34,589 Interest expense 968 1,130 2,939 3,452 Interest income and other 538 558 2,410 1,602 -------- -------- -------- -------- Income before income taxes 12,307 10,848 37,131 32,739 Income taxes 4,736 4,100 13,990 12,836 -------- -------- -------- -------- Net income $ 7,571 $ 6,748 $ 23,141 $ 19,903 ======== ======== ======== ======== Net income per share Basic $ .49 $ .43 $ 1.49 $ 1.26 Diluted $ .48 $ .42 $ 1.46 $ 1.23 Dividends declared per share $ .075 $ .075 $ .225 $ .225 Weighted average number of shares outstanding Basic 15,399 15,812 15,499 15,787 Diluted 15,750 16,240 15,833 16,194 See notes to condensed consolidated financial statements 2 THOMAS INDUSTRIES INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in Thousands) (Unaudited) September 30 December 31 2000 1999* ---- ---- ASSETS Current assets Cash and cash equivalents $ 10,493 $ 16,487 Accounts receivable, less allowance (2000--$821; 1999--$698) 23,680 20,869 Inventories: Finished products 6,137 4,965 Raw materials 10,149 10,209 Work in process 4,174 4,577 ------- ------- 20,460 19,751 Deferred income taxes 3,217 2,634 Other current assets 2.219 3,370 ------- ------- Total current assets 60,069 63,111 Investment in GTG 168,488 158,865 Property, plant, and equipment 85,517 78,903 Less accumulated depreciation and amortization 47,918 42,751 ------- ------- 37,599 36,152 Note receivable from GTG 22,287 22,287 Intangible assets--less accumulated amortization 9,603 10,677 Other assets 3,208 2,884 ------- ------- Total assets $301,254 $293,976 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $ 7,401 $ 7,794 Other current liabilities 18,502 15,289 Current portion of long-term debt 7,784 7,784 ------- ------- Total current liabilities 33,687 30,867 Deferred income taxes 5,853 6,027 Long-term debt (less current portion) 40,743 40,513 Other long-term liabilities 6,751 7,087 ------- ------- Total liabilities 87,034 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--17,660,887 1999--17,567,104 17,661 17,567 Capital surplus 111,912 110,988 Retained earnings 129,339 109,689 Accumulated other comprehensive income (loss) (10,592) (6,385) Less cost of treasury shares: (2000--2,409,850; 1999--1,807,650) (34,100) (22,377) ------- ------- Total shareholders' equity 214,220 209,482 ------- ------- Total liabilities and shareholders' equity $301,254 $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) Nine Months Ended September 30 ------------------------ 2000 1999 ---- ---- Operating activities: Net income $23,141 $19,903 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 6,372 6,087 Deferred income taxes (734) (248) Equity income from Lighting (17,862) (16,988) Distributions from Lighting 7,597 6,575 Other items 202 86 Changes in operating assets and liabilities: Accounts receivable (3,837) (1,871) Inventories (2,048) 54 Accounts payable (159) 134 Accrued expenses and other liabilities 3,185 (1,818) Other 899 179 ------ ------ Net cash provided by operating activities 16,756 12,093 Investing activities: Purchases of property, plant, and equipment (7,821) (5,459) Sale of property, plant, and equipment 12 15 ------ ------ Net cash used in investing activities (7,809) (5,444) Financing activities: Payments on notes payable to banks, net -0- (133) Payments on long-term debt (7,770) (7,769) Proceeds from long-term debt 8,000 -- Treasury stock purchased (11,723) -- Dividends paid (3,519) (3,560) Other 1,018 1,069 ------- ------ Net cash used in financing activities (13,994) (10,393) Effect of exchange rate change (947) (193) ------- ------- Net decrease in cash and cash equivalents (5,994) (3,937) Cash and cash equivalents at beginning of period 16,487 18,205 ------ ------ Cash and cash equivalents at end of period $10,493 $14,268 ====== ====== 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 nine-month period ended September 30, 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 - ----------------------------- Reconciliation of net income to total comprehensive income for the periods indicated follows. (In Thousands) For the three months ended September 30: 2000 1999 ---- ---- Net income $7,571 $6,748 Foreign currency translation (2,081) 852 ----- ----- Comprehensive income $5,490 $7,600 ===== ===== For the nine months ended September 30: Net income $23,141 $19,903 Minimum pension liability -- 1 Foreign currency translation (4,207) (1,569) ------ ------- Comprehensive income $18,934 $18,335 ====== ====== 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) Three Months Nine Months Ended Sept. 30 Ended Sept. 30 -------------- --------------- 2000 1999 2000 1999 ---- ---- ---- ---- Numerator: Net income $ 7,571 $ 6,748 $23,141 $19,903 ====== ====== ====== ====== Denominator: Weighted average shares outstanding 15,399 15,812 15,499 15,787 Effect of dilutive securities: Director and employee stock options 339 387 318 364 Employee performance shares 12 41 16 43 ------ ------ ------ ------ Dilutive potential common shares 351 428 334 407 ------ ------ ------ ------ Denominator for diluted earnings per share--adjusted weighted average shares and assumed conversions 15,750 16,240 15,833 16,194 ====== ====== ====== ====== 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) September 30 December 31 2000 1999 ---- ---- Balance sheet: Current assets $360,374 $321,788 Long-term assets 233,503 231,643 Current liabilities 164,977 170,478 Long-term liabilities 84,701 73,785 Three Months Nine Months Ended Sept. 30 Ended Sept. 30 ----------------- -------------------- 2000 1999 2000 1999 ---- ---- ---- ---- Income statement: Net sales $257,308 $257,811 $753,299 $738,932 Gross profit 87,166 87,808 252,655 244,656 Earnings before interest and taxes 24,611 25,171 67,017 65,561 Net income* 22,214 21,503 60,852 58,049 *Amounts recorded by Thomas Industries Inc.: Equity income from GTG $ 7,109 $ 6,880 $ 19,473 $ 18,575 Stock option expense (24) -- (24) -- Amortization of excess investment (529) (529) (1,587) (1,587) ------- ------- ------- ------- Equity income reported by Thomas $ 6,556 $ 6,351 $ 17,862 $ 16,988 ======== ======= ======== ========
6 Note F - Receivables from Affiliate - ----------------------------------- Our note receivable from GTG at September 30, 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 Nine Months Ended September 30 September 30 ------------------- ------------------- 2000 1999 2000 1999 ---- ---- ---- ---- Total net sales including intercompany sales Pump & Compressor $51,385 $43,940 $160,625 $145,241 Intercompany sales Pump & Compressor (6,721) (4,084) (17,607) (11,617) ------ ------- -------- -------- Net sales to unaffiliated customers Pump & Compressor $44,664 $39,856 $143,018 $133,624 ====== ====== ======= ======= Operating income Pump & Compressor $ 7,659 $ 6,451 $ 24,827 $ 22,579 Lighting* 6,556 6,351 17,862 16,988 Corporate (1,478) (1,382) (5,029) (4,978) ------ ------ ------- ------- $12,737 $11,420 $ 37,660 $ 34,589 ====== ====== ======= ======= *Represents 32% of GTG net income less amortization of excess investment and stock option expense.
Note H - Accounting Pronouncement - --------------------------------- In December 1999, the Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB 101"). SAB 101 clarifies existing accounting principles related to revenue recognition in financial statements. The Company is required to comply with the provisions of SAB 101 by the fourth quarter of 2000. Management does not believe that the implementation of SAB 101 will have a material impact on the Company's results of operations. 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations - --------------------- Net sales during the third quarter ended September 30, 2000, were $44.7 million compared to $39.9 million for the third quarter of 1999. This represents a 12.1 percent increase, and the $44.7 million is a record for any third quarter for our Pump & Compressor business. Our North American and Asia Pacific operations had very strong results, especially in the medical market where orders previously had been pushed out during the second quarter. The 2.8 percent sales growth in our European operations was negatively affected by an unfavorable Euro exchange rate. When measured at a constant Euro exchange rate, our Pump & Compressor net sales would have increased an additional 3.7 percent. Net sales for the nine-month period ended September 30, 2000, were $143.0 million compared to $133.6 million for the prior year. This 7 percent increase is due primarily to the growth in our Asia Pacific operation and to the October 1999 acquisition of Oberdorfer Pumps. When measuring our nine-month period results at a constant Euro exchange rate, the Pump & Compressor net sales would have increased an additional 3.1 percent. Operating income for the third quarter ended September 30, 2000, was $12.7 million, or 11.5 percent higher than the 1999 third quarter amount of $11.4 million. Our Pump & Compressor segment posted an 18.7 percent increase in operating income over the 1999 third quarter. This was due principally to increased sales volume, sales mix, and cost reduction programs. Our Lighting segment results increased 3.2 percent to $6.6 million in the third quarter of 2000, compared to $6.4 million in the same period last year. We had slightly higher corporate expenses in the third quarter of 2000 compared to 1999 due primarily to employee wage and benefit accruals. Operating income for the nine-month period ended September 30, 2000, was $37.7 million compared to $34.6 million in 1999. This increase was attributable to Pump & Compressor sales volume increases, favorable sales mix, and cost reduction programs, as well as the strength of the Lighting segment's earnings that grew at 5.1 percent. Net income for the 2000 third quarter of $7.6 million was 12.2 percent higher than the $6.7 million for the comparable 1999 period and was a record for any third quarter period. This increase was due primarily to the increase in operating income and lower interest expense. Net income for the nine-month period ended September 30, 2000, was $23.1 million compared to $19.9 million for the nine-month period in 1999. Excluding a one-time gain of $.8 million recorded in the second quarter of 2000 related to the proceeds of a life insurance policy, net income would have been $22.3 million for the nine-month period ended September 30, 2000. This is a record for any nine-month period in the Company's history. The nine-month period increase over 1999 was due primarily to an increase in our operating income, the one-time gain from a life insurance policy, and lower interest expense. Interest expense for the 2000 third quarter was $1.0 million, or 14.3 percent lower than the prior-year amount of $1.1 million. The reduction in interest expense was primarily related to the $7.7 million debt payment on January 31, 2000. This has been partially offset by interest on short-term borrowings, which are higher due to the funding of our stock repurchase program noted below. Interest expense for the nine-month period ended September 30, 2000, 8 Item 2. Management's Discussion and Analysis --Continued was $2.9 million compared to $3.5 million in 1999. As a result of our stock repurchase program, on September 29, 2000, we borrowed $8.0 million for an eighteen-month period at a variable interest rate based on LIBOR. This additional long-term borrowing had no material impact on interest expense for the third quarter or nine-month period in 2000. Our note receivable from GTG at September 30, 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 $26.4 million at September 30, 2000, is $5.9 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 the $11.7 million spent in the first nine months of 2000 on the stock repurchase program, and offset by the $8.0 of proceeds from the September 29, 2000, additional borrowing. For the period December 31, 1999, through September 30, 2000, the Company purchased an additional 602,200 shares for the stock repurchase program that was announced in December 1999. Since September 30, 2000, the Company has purchased another 9,000 shares in the open market and 159,389 shares in private transactions. Through November 10, 2000, the Company has purchased, on a cumulative basis, 843,189 shares at a cost of $16.6 million. Accounts receivable at September 30, 2000, have increased by 13.5 percent since December 31, 1999, due to higher sales volume and a larger concentration of accounts receivable with international customers, which typically have longer terms. The number of days sales in receivables at September 30, 2000, compared to December 31, 1999, has increased to 49.7 days from 48.0. Annualized inventory turnover at September 30, 2000, of 5.2 improved 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 $68.5 million are not restricted at September 30, 2000. As of September 30, 2000, the Company had available credit of $15.2 million with banks under borrowing arrangements, of which $7.2 million 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. 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 9 Item 2. Management's Discussion and Analysis --Continued 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. Staff Accounting Bulletin No. 101 - --------------------------------- In December 1999, the Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB 101"). SAB 101 clarifies existing accounting principles related to revenue recognition in financial statements. The Company is required to comply with the provisions of SAB 101 by the fourth quarter of 2000. Management does not believe that the implementation of SAB 101 will have a material impact on the Company's results of operations. Item 3. Quantitative and Qualitative Disclosures about Market Risk The Company's long-term debt bears interest at fixed rates, with the exception of the $8 million eighteen-month note that accrues interest at a variable rate and is paid on a monthly basis. Any short-term borrowings would typically be priced at variable interest rates. The Company's results of operations and cash flows, therefore, would only be affected by interest rate changes to the extent of variable rate debt. At September 30, 2000, there were no short-term notes payable outstanding; but the $8 million long-term note was outstanding. Therefore, a 100 basis point movement in the interest rate on the $8 million note would result in an approximate $80,000 annualized increase or decrease in interest expense and cash flows. The Company also has a long-term note receivable from GTG of $22,287,000 that bears interest at a variable rate. Therefore, a 100 basis point movement in the interest rate on the $22,287,000 note would result in an approximate $222,870 annualized increase or decrease in interest income and cash flows. 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 for our Pumps & Compressors segment are concentrated in Germany but exist to a lesser extent in other parts of Europe and Asia. Our Lighting segment currency exposure is primarily in Canada. 10 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 of Finance, Chief Financial Officer, and Secretary Date November 13, 2000 ------------------------- EX-27 2 0002.txt FDS --
5 1,000 9-MOS DEC-31-2000 SEP-30-2000 10,493 0 24,501 821 20,460 60,069 85,517 47,918 301,254 33,687 40,743 0 0 17,661 196,559 301,254 143,018 143,018 90,845 90,845 11,903 200 2,939 37,131 13,990 23,141 0 0 0 23,141 1.49 1.46
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