-----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, BCNPekS6D/iibTNtQVGaKyc/kW0ZTtdfGbV+3WBMOgeHIftHdg7lQYG/HkG5+NTh 7U9JlO2m5MEGBy+fMQr3Bw== 0000914760-98-000157.txt : 19980812 0000914760-98-000157.hdr.sgml : 19980812 ACCESSION NUMBER: 0000914760-98-000157 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980811 SROS: NYSE 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: 98682507 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 (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [ X ] For the quarterly period ended: June 30, 1998 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 August 1, 1998, was 15,875,042 shares. Page 1 of 8 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 Six Months Ended June 30 June 30 1998 1997 1998 1997 Net sales $143,057 $139,989 $284,981 $266,345 Cost of products sold 97,884 96,449 196,140 184,548 Gross profit 45,173 43,540 88,841 81,797 Other (income) expenses: Selling, general, and administrative expenses 32,345 31,931 66,117 62,294 Interest expense 1,587 1,677 3,067 3,302 Other 329 (274) 411 (358) Income before income taxes 10,912 10,206 19,246 16,559 Income tax provision 4,037 3,776 7,121 6,127 Net income $ 6,875 $ 6,430 $ 12,125 $ 10,432 Per share amounts: Net income per share Basic $.43 $.41 $.76 $.66 Diluted $.42 $.39 $.74 $.64 Dividends declared per share $.075 $.067 $.150 $.133 Weighted average number of shares outstanding Basic 15,873,756 15,835,425 15,869,024 15,826,821 Diluted 16,524,038 16,320,600 16,474,116 16,301,903 See notes to condensed consolidated financial statements.
THOMAS INDUSTRIES INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in Thousands)
(Unaudited) June 30 December 31 1998 1997* ASSETS Current assets Cash and cash equivalents $ 9,746 $ 17,352 Accounts receivable, less allowance (1998--$2,266; 1997--$2,046) 85,826 71,385 Inventories: Finished products 40,187 35,472 Raw materials 24,835 23,620 Work in process 13,819 15,036 78,841 74,128 Deferred income taxes 6,346 6,694 Other current assets 8,916 7,052 Total current assets 189,675 176,611 Property, plant, and equipment 161,297 154,977 Less accumulated depreciation and amortization 81,905 74,780 79,392 80,197 Intangible assets--less accumulated amortization 55,206 56,333 Other assets 14,644 14,498 Total assets $338,917 $327,639 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Notes payable $ 20,426 $ 2,564 Accounts payable 26,108 31,094 Other current liabilities 39,006 42,835 Current portion of long-term debt 7,813 7,860 Total current liabilities 93,353 84,353 Deferred income taxes 8,779 8,802 Long-term debt (less current portion) 48,511 55,006 Minimum pension liability 2,448 2,448 Other long-term liabilities 3,336 3,625 Total liabilities 156,427 154,234 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: 1998 17,407,352; 1997 17,394,198 17,407 17,394 Capital surplus 109,865 109,750 Retained earnings 78,278 68,533 Accumulated other comprehensive income (5,861) (5,060) Less cost of treasury shares: (1998 1,534,400; 1997 1,535,469) (17,199) (17,212) Total shareholders' equity 182,490 173,405 Total liabilities and shareholders' equity $338,917 $327,639 *Derived from the audited December 31, 1997, consolidated balance sheet. See notes to condensed consolidated financial statements.
THOMAS INDUSTRIES INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Dollars in Thousands)
Six Months Ended June 30 1998 1997 Cash flows from operating activities: $ 12,125 $ 10,432 Net income Reconciliation of net income to net cash provided by (used in) operating activities: Depreciation and amortization 9,017 8,561 Deferred income taxes 945 (152) Provision for losses on accounts receivable 485 197 Gain on asset disposal, net (15) (12) Changes in operating assets and liabilities, net of effects of acquisitions and dispositions: Accounts receivable (15,230) (9,029) Inventories (4,961) (5,380) Other current assets (1,891) (177) Accounts payable (4,891) (239) Accrued expenses and other liabilities (4,640) (1,055) Other 59 (2,265) Net cash provided by (used in) operating activities (8,997) 881 Cash flows from investing activities: Purchases of property, plant, and equipment (7,640) (7,476) Proceeds from sale of property, plant, and equipment 185 45 Net cash used in investing activities (7,455) (7,431) Cash flows from financing activities: Proceeds from short-term debt, net 17,888 4,328 Payments on long-term debt (6,535) (7,730) Dividends paid (2,379) (2,109) Other 141 185 Net cash provided by (used in) financing activities 9,115 (5,326) Effect of exchange rate changes on cash (269) 871 Decrease in cash and cash equivalents (7,606) (11,005) Cash and cash equivalents at beginning of period 17,352 18,826 Cash and cash equivalents at end of period $ 9,746 $ 7,821 See notes to condensed consolidated financial statements.
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 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 consolidated financial statements and footnotes included in the Company's Annual Report on Form 10-K for the year ended December 31, 1997. On April 28, 1998, the Company entered into a definitive agreement pursuant to which the Company will contribute substantially all of its lighting assets and related liabilities to a joint venture with The Genlyte Group Incorporated. Reference is made to "Part II. Other Information Item 5. Other Information" below for additional information. 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 As of January 1, 1998, the Company 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 the Company's net income or shareholders' equity. SFAS 130 requires unrealized gains or losses on the Company'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 second quarter of 1998 and 1997, total comprehensive income was $6,275,000 and $5,929,000, respectively. Note C Comprehensive Income - continued Disclosure of accumulated balances of other comprehensive income: Minimum Foreign Accumulated Other Pension Currency Comprehensive Liability Translation Income
Beginning balance $(473,000) $(4,587,000) $(5,060,000) Current-quarter other comprehensive income -- (801,000) (801,000) Ending balance $(473,000) $(5,388,000) $(5,861,000)
Note D Stock Split On October 16, 1997, the Board of Directors authorized a three-for-two stock split to be effected in the form of a 50 percent stock dividend on all shares of Common Stock, payable December 1, 1997, for shareholders of record November 14, 1997. All share data included in these consolidated financial statements and related footnotes have been restated to reflect this stock split. Item 2. Management's Discussion and Analysis Net sales during the second quarter ended June 30, 1998, increased 2% over the second quarter 1997 to $143.1 million. For the six months ended June 30, 1998, net sales were 7% higher than the first half of 1997. Net sales for the second quarter and six-month periods in 1998 are the highest for any comparable periods in the Company's history. Lighting Segment sales increased 2% for the second quarter over 1997, primarily in the Outdoor market. Compressor & Vacuum Pump Segment sales were up 3% for the second quarter over 1997, due to increases in the European market. Net income for the second quarter and first half of 1998 of $6.9 million and $12.1 million, respectively, is 7% and 16% higher than the comparable 1997 periods. The Lighting Segment operating income in the second quarter and first half of 1998 improved 12% and 27%, respectively, compared to last year, primarily due to improvements in the Outdoor market. Operating income for the Compressor and Vacuum Pump Segment for the 1998 second quarter and first half improved 1% and 7% over 1997, primarily due to increases in the European market. Cost of products sold as a percent of sales was reduced to 68.4% and 68.8% for the 1998 second quarter and six months, respectively, versus 68.9% and 69.3% for the comparable 1997 periods. Gross margins for the first six months of 1998 in the Lighting Segment improved slightly over the 1997 period, while the Compressor & Vacuum Pump Segment gross margin in 1998 decreased slightly in 1998 from the comparable 1997 period. Lighting Segment gross margins have improved due to cost reduction efforts primarily in the form of price reductions on purchased components, improved manufacturing efficiencies from increased production volume, and productivity improvements in direct labor costs. Compressor & Vacuum Pump Segment margins have decreased slightly, primarily due to a less favorable product mix. Selling, general, and administrative costs as a percent of sales of 22.6 % and 23.2 % in the second quarter and first half of 1998, respectively, were lower than the 22.8% and 23.4% figures for the comparable 1997 periods. The decrease is primarily due to lower administrative costs incurred as a percent to sales. Item 2. Management's Discussion and Analysis - continued Interest expense for the 1998 second quarter and first six months was less than comparable 1997 amounts by 5% and 7%, respectively. The reductions are attributed primarily to a decrease in long-term debt. Cash and cash equivalents increased to $9.7 million at June 30, 1998, compared to $7.8 million at June 30, 1997. Cash provided by operating activities decreased by $9.0 million in the six months ended June 30, 1998, primarily due to an increase in accounts receivable caused by extending additional dating terms to customers in an effort to increase sales and a decrease in accounts payable in order to take advantage of vendor discounts. Working capital of $96.3 million at June 30, 1998, is $4.1 million more than the amount at December 31, 1997. Accounts receivable at June 30, 1998, have increased by 20% since December 31, 1997, due to the higher sales volume and the expansion of the use of dating terms in order to increase sales. The number of days sales in receivables at June 30, 1998, compared to December 31, 1997, has increased to 53.9 days from 48.3. Inventory turnover at June 30, 1998, of 4.5 times per year is unchanged from the December 31, 1997, level. The current ratio at June 30, 1998, was 2.03 compared to 2.09 at December 31, 1997. 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 $48.5 million are not restricted at June 30, 1998. As of June 30, 1998, the Company had available credit of $11.8 million with banks under short-term borrowing arrangements, $10.9 million of which was unused, and a $30 million revolving line of credit that expires in 2002, $16 million of 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 high grade, short-term securities. On April 28, 1998, the Company entered into a definitive agreement pursuant to which the Company will contribute substantially all of its lighting assets and related liabilities to a joint venture with The Genlyte Group Incorporated. Reference is made to "Part II. Other Information Item 5. Other Information" below for additional information. PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders A regular Annual Meeting of Shareholders was held on April 16, 1998. Class III Directors elected at the Annual Meeting of Shareholders were H. Joseph Ferguson, Ralph D. Ketchum, and Anthony A. Massaro. Directors whose term of office as a director continued after the meeting were Timothy C. Brown, Wallace H. Dunbar, Gene P. Gardner, Lawrence E. Gloyd, William M. Jordan, and Franklin J. Lunding, Jr. Item 4. Submission of Matters to a Vote of Security Holders - continued The voting at the Annual Meeting of Shareholders was as follows: Proposal No. 1 -- Election of Directors For Withheld H. Joseph Ferguson 14,178,270 121,366 Ralph D. Ketchum 14,166,275 133,361 Anthony A. Massaro 14,143,205 156,431 Item 5. Other Information On April 28, 1998, the Company entered into a definitive agreement pursuant to which the Company will contribute substantially all of its lighting assets and related liabilities to a joint venture with The Genlyte Group Incorporated. The Company has filed a Joint Proxy Statement dated July 23, 1998 (the "Proxy Statement"), with the Securities and Exchange Commission with respect to the Special Meeting of Shareholders of the Company to be held on August 27, 1998, to approve the transaction. For additional information concerning the transaction, reference is made to the Proxy Statement which is incorporated by reference herein. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Financial Data Schedule (99) The Company's Joint Proxy Statement dated July 23, 1998, as filed with the Commission is hereby incorporated by reference herein. (b) A Form 8-K was filed on April 29, 1998, announcing that the Board of Directors of the Company unanimously approved a definitive agreement whereby the Company would contribute substantially all of its lighting assets and related liabilities to a joint venture with The Genlyte Group Incorporated. 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 August 12, 1998 EX-27 2
5 1,000 6-MOS 6-MOS DEC-31-1998 DEC-31-1997 JUN-30-1998 JUN-30-1997 9,746 7,821 0 0 88,092 78,812 2,266 2,281 78,841 73,617 189,675 172,175 161,297 154,896 81,905 77,901 338,917 319,567 93,353 86,379 48,511 54,902 0 0 0 0 17,407 17,372 165,083 0 338,917 147,035 284,981 319,567 284,981 266,345 196,140 184,548 196,140 184,548 66,043 61,739 485 197 3,067 3,302 19,246 16,559 7,121 6,127 12,125 10,432 0 0 0 0 0 0 12,125 10,432 .76 .66 .74 .64 Restated
-----END PRIVACY-ENHANCED MESSAGE-----