-----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, LMbx0whVD3yDOEqADzoSs5TS/vBmRfx+npjYvWXX4c4Zl/cX8sKI22IjAoVgLq0I gCkBA4v7XCAPxkevJgOiDQ== 0000914760-98-000175.txt : 19980915 0000914760-98-000175.hdr.sgml : 19980915 ACCESSION NUMBER: 0000914760-98-000175 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19980830 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980914 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: 8-K SEC ACT: SEC FILE NUMBER: 001-05426 FILM NUMBER: 98708903 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 8-K 1 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. EX-99.1 2 THOMAS INDUSTRIES INC. LIGHTING GROUP UNAUDITED COMBINED STATEMENTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, --------------- 1998 1997 ------- ------- (IN THOUSANDS) 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.
THOMAS INDUSTRIES INC. LIGHTING GROUP COMBINED BALANCE SHEETS
UNAUDITED JUNE 30, DECEMBER 31, 1998 1997 --------- ------------ (IN THOUSANDS) 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.
THOMAS INDUSTRIES INC. LIGHTING GROUP UNAUDITED COMBINED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, ----------------- 1998 1997 -------- ------- (IN THOUSANDS) 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.
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):
ACCUMULATED MINIMUM FOREIGN OTHER PENSION CURRENCY COMPREHENSIVE LIABILITY TRANSLATION INCOME --------- ----------- ------------- Beginning balance........................... $(368) $(3,574) $(3,942) Current-year other comprehensive income..... -- (771) (771) ----- ------- ------- Ending balance.............................. $(368) $(4,345) $(4,713) ===== ======= =======
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. EX-99.2 3 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. EX-99.3 4 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. UNAUDITED THOMAS PRO FORMA CONSOLIDATED STATEMENT OF INCOME
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) ---------- ---------- ------------ ---------- 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.
UNAUDITED THOMAS PRO FORMA CONSOLIDATED STATEMENT OF INCOME
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) ---------- --------- ------------ ---------- 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.
UNAUDITED THOMAS PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1998 (IN THOUSANDS) HISTORICAL THOMAS PRO FORMA THOMAS LIGHTING THOMAS INDUSTRIES ASSETS AND CONTRIBUTION INDUSTRIES INC. LIABILITIES ADJUSTMENTS INC. ASSETS ---------- ----------- ------------ ---------- 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.
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):
SIX MONTHS ENDED YEAR ENDED JUNE 30, DECEMBER 31, 1998 1997 ------------- ------------ 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 ====== =======
(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):
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 =======
(h) Represents Thomas' investment in the Joint Venture, calculated as follows (in thousands):
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 ========
(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):
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 ========
(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. EX-99.4 5 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. UNAUDITED GENLYTE THOMAS GROUP LLC PRO FORMA CONSOLIDATED STATEMENT OF INCOME
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 ---------- ------------ ----------- --------- 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.
UNAUDITED GENLYTE THOMAS GROUP LLC PRO FORMA CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, (IN THOUSANDS) PRO FORMA PRO FORMA GENLYTE HISTORICAL THOMAS TRANSACTION THOMAS GENLYTE LIGHTING(a) ADJUSTMENTS GROUP LLC ---------- ----------- ----------- --------- 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.
UNAUDITED GENLYTE THOMAS GROUP LLC PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF JULY 4, 1998 (IN THOUSANDS) GENLYTE GENLYTE ---------------------------------- PRO FORMA THOMAS CONTRIBUTION AS THOMAS TRANSACTION GROUP HISTORICAL ADJUSTMENTS ADJUSTED LIGHTING(F) ADJUSTMENTS LLC ---------- ------------ -------- ----------- ----------- -------- 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.
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):
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 ========
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. EX-99.5 6 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. # # # EX-99.6 7 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. -----END PRIVACY-ENHANCED MESSAGE-----