10-K 1 FORM 10-K FOR GENLYTE ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Fiscal Year Ended December 31, 1994 Commission file number: 0-16960 --------------- THE GENLYTE GROUP INCORPORATED 100 Lighting Way Secaucus, N. J. 07096 (201) 864-3000 Incorporated in Delaware I.R.S. Employer Identification No. 22-2584333 Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: Name of Each Exchange Title of Each Class on which Registered ------------------- --------------------- Common Stock, par value NASDAQ National Market System $.01 per share Number of shares of Common Stock (par value $.01 per share) outstanding as of March 9, 1995: 12,833,674 Aggregate market value of Common Stock (par value $.01 per share) held by non-affiliates on March 9, 1995: $59,355,742 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No -- -- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] Documents Incorporated by Reference: Document Part of Form 10-K -------- ----------------- Annual Report to Stockholders for the fiscal year Parts I, II and IV ended December 31, 1994 Proxy Statement for the Annual Meeting of Part III Stockholders to be held April 27, 1995 ================================================================================ PART I ITEM 1. BUSINESS The Genlyte Group Incorporated (the "Company" or "Genlyte") designs, manufactures and sells lighting fixtures for a wide variety of applications in the commercial, industrial and residential markets. The Company operates in one industry segment (lighting fixtures and controls) through the following divisions: Lightolier, Controls, Wide-Lite, Hadco, DFT and Supply (Crescent, Exceline and Stonco product line) in the United States and Canlyte in Canada. The Company markets its products under the following brand names: o In the U.S. - Lightolier, Forecast, Crescent, Stonco, Hadco, Wide-Lite, Bronzelite, Diamond F, Timely and Exceline o In Canada - Lightolier, Keene-Widelite, Stonco, Prodel, Elyte and CFI (Canadian Fluorescent Industries) o In Mexico - Lightolier, Forecast, Wide-Lite, Bronzelite and Hadco Genlyte's products primarily utilize incandescent, fluorescent and high-intensity discharge ("HID") light sources and are marketed primarily to distributors who resell the products for use in new residential, commercial, and industrial construction as well as in remodeling existing structures. Because Genlyte does not principally sell directly to the end-user of its products, the Company cannot determine precisely the percentage of its revenues derived from the sale of products installed in each type of building or the percentage of its products sold for new construction versus remodeling. Genlyte's sales, like those of the lighting fixture industry in general, are partly dependent on the level of activity in new construction and remodeling. - 1 - Products and Distribution Genlyte designs, manufactures and markets the following types of products: Indoor Fixtures - Incandescent, fluorescent and HID lighting fixtures and lighting controls for commercial, industrial, institutional, medical, sports, and residential markets and task lighting for all markets. Outdoor Fixtures - HID and incandescent lighting fixtures and accessories for commercial, industrial, institutional, sports and residential markets. Genlyte's products are marketed by independent sales representatives and Company direct sales personnel who sell to distributors, electrical wholesalers, mass merchandisers, and national accounts. In addition, the Company's products are promoted through architects, engineers, contractors and building owners. The fixtures are principally sold throughout the United States, Canada and Mexico. Raw Materials Sources & Availability Genlyte purchases large quantities of raw materials and components, mainly steel, aluminum, ballasts, sockets, wire, plastic, lenses, and glass from multiple sources. No significant supply problems have been encountered in recent years. Relationships with vendors have been satisfactory. Patents and Trademarks Genlyte has a number of United States and foreign mechanical patents, design patents, and registered trademarks. Genlyte maintains such protections by periodic renewal of trademarks and payments of maintenance fees for issued patents. Genlyte vigorously enforces its intellectual property rights. Genlyte does not believe that a loss of any presently held patent or trademark is likely to have a material adverse impact on its business. - 2 - Seasonal Effect on Business There are no predictable significant seasonal effects on Genlyte's results of its operations. Working Capital There are no unusual significant business practices at Genlyte that affect working capital. Genlyte's terms of sale vary by division but are generally consistent with general practices within the lighting industry. The Company attempts to keep inventory levels at the minimum required to satisfy customer requirements. Backlog Backlog was $50,378,300 as of December 31, 1994, $43,246,300 as of December 31, 1993, and $49,495,300 as of December 31, 1992. Backlog increased during 1994 due to an increase in project business booked during the year. Substantially all of the backlog at December 31, 1994 is expected to be shipped in 1995. Competition Genlyte's products are sold in intensely competitive markets where there are numerous producers of each type of fixture. The principal measures of competition in indoor and outdoor fixtures for the commercial, residential and industrial markets are price, service and product performance. Research and Development Genlyte places a high priority on new product development and is constantly monitoring new light sources for incorporation into its products. Costs incurred for research and development activities, as determined in accordance with generally accepted accounting principles, were $3,006,000, $3,571,000 and $3,516,000 during 1994, 1993 and 1992, respectively. - 3 - Employees At December 31, 1994, Genlyte employed 1,905 unionized and non-unionized production workers and 890 engineering, administrative, and sales personnel. Relationships with unions have been satisfactory. International Operations The Company has international operations in Canada and Mexico. Information on the Company's operations by geographical area for the last three fiscal years is set forth in the "Notes to the Consolidated Financial Statements" section of Genlyte's 1994 Annual Report to Stockholders, which is incorporated herein by reference. ITEM 2. PROPERTIES The Company has the following owned and leased property locations as of December 31, 1994: Own/ Mfg. Office Whse. Other Location Lease Space Space Space Space -------- ----- ----- ----- ----- ----- Genlyte Headquarters: Secaucus, NJ Lease x Lightolier - U.S.: Camargo, Mexico Lease x x Chesterfield, MO Lease x Columbia, MD Lease x Compton, CA Lease x x x Dallas, TX Lease x x Edison, NJ Lease x x x Emeryville, CA Lease x Fall River, MA Own x x Farmers Br., TX Lease x Fontana, CA Own x x x Jacksonville, FL Lease x Louisville, KY Lease x Miami, FL Lease x New York, NY Lease x Norwich, CT Own x x Pittsburgh, PA Lease x Portland, OR Lease x San Diego, CA Lease x Seattle, WA Lease x x Schiller Park, IL Lease x - 4 - Own/ Mfg. Office Whse. Other Location Lease Space Space Space Space -------- ----- ----- ----- ----- ----- Stone Mountain, GA Lease x x Wilmington, MA Own x x x Winter Park, FL Lease x Hadco: Cameron, WV Lease x x Littlestown, PA Own x x x Dallas, TX Lease x Supply: Stonco - Union, NJ Own x x x Crescent - Barrington, NJ Own x x x Wide-Lite: San Marcos, TX Own x x x Controls: Garland, TX Own x x x x DFT: Cleveland, OH Lease x Elgin, IL Own x x x DFT/Sarama - Fall River, MA Lease x Dallas, TX Lease x Diaman-Mexo - Tijuana, Mexico Own x x Canlyte: Cambridge, Ontario (KWL) Own x x x Montreal, Quebec (Lachine-LOL/CHQ) Own x x x x Montreal, Quebec (Pointe Claire-LOL) Lease x x Toronto (LOL) Lease x x Vancouver (LOL) Lease x Edmonton (LOL) Lease x Cornwall, Ontario (CFI) Own x x - 5 - The Genlyte facility located in Garland, Texas is subject to a $351,291 mortgage due May 1, 2001. Genlyte believes its facilities are suitable and adequate for current and presently projected needs and are productively utilized consistent with economic conditions and the requirements of the customers served. ITEM 3. LEGAL PROCEEDINGS The Genlyte Group Incorporated has been named as one of a number of corporate and individual defendants in several actions commenced in August 1993 in the U.S. District Court in New York. The actions are on behalf of a purported class of alleged creditors of Keene Corporation ("Keene"), seeking from the defendants damages of an unspecified amount, rescission of certain asset sale and stock transactions and other relief. With respect to Genlyte, the complaint principally maintains that certain lighting assets of Keene were sold to Genlyte in 1984 at less than fair value, while both Keene and Genlyte were wholly-owned subsidiaries of Bairnco Corporation ("Bairnco"). The suits also allege that Genlyte, as well as the other corporate defendants, were successors to or alter egos of Keene. These cases are presently stayed by order of the United States Bankruptcy Court due to the December 1993 filing by Keene of a petition for reorganization pursuant to Chapter 11 of the Bankruptcy Code. In April 1994, an independent Examiner was appointed by the Bankruptcy Court in the Keene bankruptcy proceeding to investigate the viability of the claims asserted in the stayed cases and the applicability of statutes of limitations to bar such claims. A preliminary report by the Examiner addressing the issues was publicly released on September 23, 1994. Such report has been submitted to the Bankruptcy Court for further proceedings on or after March 30, 1995. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. - 6 - PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY & RELATED STOCKHOLDER MATTERS a. and c. Data regarding market price of Genlyte's common stock is included in the "Quarterly Results of Operations" section of Genlyte's 1994 Annual Report to Stockholders, which is incorporated herein by reference. Genlyte's common stock is traded on the NASDAQ National Market System under the symbol "GLYT". Information concerning dividends and restrictions thereon and Preferred Stock Purchase Rights are included in the "Notes to the Consolidated Financial Statements" section of Genlyte's 1994 Annual Report to Stockholders, which is incorporated herein by reference. b. The approximate number of common equity security holders is as follows: Approximate Number of Holders of Record as of Title of Class Year-End 1994 -------------- ----------------------- Common Stock, par value $.01 per share 1,970 ITEM 6. SELECTED FINANCIAL DATA The information required for this item is included in Genlyte's 1994 Annual Report to Stockholders, which is incorporated herein by reference. - 7 - ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Reference is made to the "Management's Discussion and Analysis" section of Genlyte's 1994 Annual Report to Stockholders, which is incorporated herein by reference. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Reference is made to the "Consolidated Financial Statements" and "Quarterly Results of Operations" sections of Genlyte's 1994 Annual Report to Stockholders, which is incorporated herein by reference. Financial statement schedules are included in Part IV of this filing. ITEM 9. CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT DIRECTORS OF THE REGISTRANT The information required with respect to the Directors of Genlyte is included in the "Election of Directors" section of the Proxy Statement for the 1995 Annual Meeting of the Stockholders of Genlyte which has been filed with the Securities and Exchange Commission and is incorporated herein by reference. EXECUTIVE OFFICERS OF THE REGISTRANT The information required with respect to executive officers of Genlyte is as follows: - 8 - AVRUM I. DRAZIN - AGE 66 January 1, 1994 - Chairman of the Board, Genlyte February 1992 - President, Genlyte December 1985 to present - President, Canlyte January 1965 - President, Lightolier Canada LARRY K. POWERS - AGE 52 January 1, 1994 - President/CEO, Genlyte July 1993 - President, U.S. Operations; Executive Vice President, Genlyte May 1989 - President, HID/Outdoor Division April 1986 - President, Craftlite/Wide-Lite Divisions July 1983 - President, Craftlite ZIA EFTEKHAR - AGE 49 June 1992 - President, Lightolier Division December 1991 - Executive V.P., Sales, Marketing and Service, Genlyte September 1988 - President, Lightolier, Inc. October 1987 - Sr. V.P. Marketing & Design, Lightolier October 1985 - President, Lightolier West January 1983 - President, Lightolier Commercial Division DONNA RATLIFF - AGE 40 January 1994 - V.P. Administration and Secretary, Genlyte January 1993 - V.P. Administration, Genlyte November 1992 - Assistant Secretary, Genlyte July 1992 - Assistant V.P. Administration, Genlyte January 1988 - Director Human Resources, Genlyte June 1986 - V.P. Administration, LyteBrands NEIL M. BARDACH - AGE 46 July 1994 - V.P. - CFO & Treasurer, Genlyte - 9 - ITEM 11. EXECUTIVE COMPENSATION The information with respect to executive compensation is included in the "Compensation of Directors and Executive Compensation" section of the Proxy Statement for the 1995 Annual Meeting of Stockholders of Genlyte which has been filed with the Securities and Exchange Commission and is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information required with respect to security ownership is included in the "Voting Securities and Principal Holders Thereof" section of the Proxy Statement for the 1995 Annual Meeting of Stockholders of Genlyte which has been filed with the Securities and Exchange Commission and is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information required with respect to relationships is included in the "Compensation Committee" and "Voting Securities and Principal Holder's" section of the Proxy Statement for the 1995 Annual Meeting of Stockholders of Genlyte which has been filed with the Securities and Exchange Commission and is incorporated herein by reference. - 10 - PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K a) 1) FINANCIAL STATEMENTS The following information is incorporated herein by reference to Genlyte's 1994 Annual Report to Stockholders: Report of Independent Public Accountants Consolidated Statements of Income for the years ended December 31, 1994, 1993 and 1992 Consolidated Balance Sheets as of December 31, 1994 and 1993 Consolidated Statements of Cash Flows for the years ended December 31, 1994, 1993 and 1992 Consolidated Statements of Stockholders' Investment for the years ended December 31, 1994, 1993 and 1992 Notes to Consolidated Financial Statements 2) Financial Statement Schedule Report of Independent Public Accountants on Financial Statement Schedule: Schedule II - Valuation and Qualifying Accounts Other schedules are omitted because of the absence of conditions under which they are required or because the required information is included in the consolidated financial statements or notes thereto. b) There were no filings on Form 8-K during the fourth quarter of 1994. - 11 - c) Exhibits Incorporated by Description Reference to ----------- --------------- - Amended and Restated Certificate of Exhibit 3(b) to Genlyte's Incorporation of the Registrant, Registration Statement on dated August 2, 1988 Form 8 as filed with the Securities and Exchange Commission on August 3, 1988 - Amended and Restated Certificate of Exhibit 3(a) to Genlyte's Incorporation of the Registrant, Form 10-K filed with the dated May 9, 1990 Securities and Exchange Commission in March 1993 - Amended and Restated By-Laws of the Exhibit 3(c) to Genlyte's Registrant, as adopted on May 16, 1988 Registration Statement on Form 8 as filed with the Securities and Exchange Commission on August 3, 1988 - Form of Stock Certificate for Genlyte Exhibit 4(a) to Genlyte's Common Stock Registration Statement on Form 8 as filed with the Securities and Exchange Commission on August 3, 1988 - Revolving Credit and Term Loan Agreement Exhibit to Genlyte's 10-Q between the Registrant and the banks filed with the Securities named therein, dated as of July 17, 1991 and Exchange Commission in August 1992 - Stock Purchase Agreement between the Exhibit 10(a) to Genlyte's Registrant and purchasers of Class B Stock Registration Statement on of the Registrant, dated as of Form 8 as filed with the June 17, 1988 Securities and Exchange Commission on August 3, 1988 - Lease between BZ Acquisition Corp. and Exhibit 10(b) to Genlyte's Hartz Mountain Development Corp., Registration Statement on dated December 17, 1984 Form 8 as filed with the Securities and Exchange Commission on August 3, 1988 - Assignment of Lease between American Can Exhibit 10(a) to Genlyte's Company and Lightolier, dated March 23, Form 10-K filed with the 1983 Securities and Exchange Commission on August 3, 1988 - 12 - Incorporated by Description Reference to ----------- --------------- - Lease between Arthur Schwartz and Exhibit 10(d) to Genlyte's Sarama Lighting, dated December 30, 1976 Form 10-K filed with the Securities and Exchange Commission in March 1989 - Lease between The Frankelite Company and Exhibit 10(f) to Genlyte's DFT Acquisition, Inc., dated July 30, 1985 Form 10-K filed with the Securities and Exchange Commission in March 1989 - Loan Agreement between The Genlyte Group Exhibit 10(b) to Genlyte's Incorporated and the New Jersey Economic Form 10-K filed with the Development Authority dated April 1, 1990, Securities and Exchange replacing the First Mortgage and Security Commission in March 1991 Agreement between the New Jersey Economic Development Authority and KCS Lighting,Inc., dated December 20, 1984 (assigned to and assumed by the Registrant effective December 31, 1986) - Loan Agreement between The Genlyte Group Exhibit 10(c) to Genlyte's Incorporated and the New Jersey Economic Form 10-K filed with the Development Authority dated June 1, 1990, Securities and Exchange replacing the Loan Agreement between KCS Commission in March 1991 Lighting, Inc. and the New Jersey Economic Development Authority, dated December 20, 1984 (assigned to and assumed by the Registrant effective December 31, 1986) - Management Incentive Compensation Plan Exhibit 10(i) to Genlyte's Registration Statement on Form 8 as filed with the Securities and Exchange Commission on August 3, 1988 - Genlyte 1988 Stock Option Plan Exhibit 10(j) to Genlyte's Registration Statement on Form 8 as filed with the Securities and Exchange Commission on August 3, 1988 - 13 - Incorporated by Description Reference to ----------- --------------- - Tax Sharing Agreement between Genlyte and Exhibit 10(k) to Genlyte's Bairnco Corporation, dated July 15, 1988 Registration Statement on Form 8 as filed with the Securities and Exchange Commission on August 3, 1988 - Merger and Assumption Agreement, dated Exhibit 10(d) to Genlyte's as of December 28, 1990, by and between Form 10-K filed with the Genlyte and Lightolier Securities and Exchange Commission in March 1991 - Form of Employment Protection Agreement Exhibit to Genlyte's Form entered into between Genlyte and certain 10-Q filed with the key executives Securities and Exchange Commission in August 1990 - Rate Swap Transaction dated as of Exhibit 10(b) to Genlyte's December 4, 1991 between The Genlyte Form 10-K filed with the Group and the Toronto-Dominion Bank Securities and Exchange Commission in March 1992 - Interest Rate Protection Agreement dated Exhibit 10(c) to Genlyte's as of December 20, 1991 between The Form 10-K filed with the Genlyte Group and Manufacturers Hanover Securities and Exchange Trust Co. Commission in March 1992 - Waiver No. 1 to the Revolving Credit and Exhibit 10(a) to Genlyte's Term Loan Agreement, dated January 20, Form 10-K filed with the 1993, by and between The Genlyte Group Securities and Exchange and the applicable banks named therein Commission in March 1993 - Industrial Lease between LAPCO Industrial Exhibit 10(b) to Genlyte's Parks and The Genlyte Group dated Form 10-K filed with the July 1, 1992 Securities and Exchange Commission in March 1993 - Amendment No. 1 to the Revolving Credit Exhibit 4(a) to Genlyte's and Term Loan Agreement between The 10-Q filed with the Genlyte Group and the banks named Securities and Exchange therein, dated as of May 20, 1994 Commission in July 1994 - 14 - Incorporated by Description Reference to ----------- --------------- - Waiver No. 2 to the Revolving Credit and Exhibit 4(b) to Genlyte's Term Loan Agreement dated June 30, 10-Q filed with the 1994, by and between The Genlyte Group Securities and Exchange and the applicable banks named therein Commission in July 1994 - Loan Agreement between The Genlyte Exhibit 4(d) to Genlyte's Group Incorporated and Jobs For Fall 10-Q filed with the River, Inc., dated as of July 1, 1994 Securities and Exchange Commission in July 1994 Other Exhibits included herein: 4(c) - Loan Agreement I between The Genlyte Group Incorporated and Jobs For Fall River, Inc., dated as of July 13, 1994 4(c) - Loan Agreement II between The Genlyte Group Incorporated and Jobs For Fall River, Inc., dated as of July 13, 1994 4(c) - Loan Agreement III between The Genlyte Group Incorporated and Jobs For Fall River, Inc., dated as of July 13, 1994 (11) - Calculation of Primary and Fully Diluted Earnings per Share (13) - Annual Report to Stockholders (21) - Subsidiaries of the Registrant (23) - Consent of Independent Public Accountants (27) - Financial Data Schedule (d) Financial statements (and summarized financial information) of fifty percent or less owned entities accounted for by the equity method have been omitted because they do not, considered individually or in the aggregate, constitute significant subsidiaries. - 15 - SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, Genlyte has duly caused this Annual Report to be signed on its behalf by the undersigned thereunto duly authorized. THE GENLYTE GROUP INCORPORATED ------------------------------ Registrant Date: March 23, 1995 By: Neil M. Bardach /s/ --------------------- -------------------- Neil M. Bardach V.P. Finance - CFO & Treasurer Pursuant to the requirements of the Securities Exchange Act of 1934, this report is signed below by the following persons on behalf of Genlyte and in the capacities and on the date indicated. Avrum I. Drazin/s/ March 23, 1995 ----------------------------------------------- ------------------- Avrum I. Drazin - Chairman of the Board Larry Powers/s/ March 23, 1995 ----------------------------------------------- ------------------- Larry Powers - President and Chief Executive Officer (Principal Executive Officer) Glenn W. Bailey/s/ March 23, 1995 ----------------------------------------------- ------------------- Glenn W. Bailey - Director Robert B. Cadwallader/s/ March 23, 1995 ----------------------------------------------- ------------------- Robert B. Cadwallader - Director David Engelman/s/ March 23, 1995 ----------------------------------------------- ------------------- David Engelman - Director Fred Heller/s/ March 23, 1995 ----------------------------------------------- ------------------- Fred Heller - Director Frank Metzger/s/ March 23, 1995 ----------------------------------------------- ------------------- Frank Metzger - Director - 16 - REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE TO THE GENLYTE GROUP INCORPORATED: We have audited in accordance with generally accepted auditing standards, the consolidated financial statements included in The Genlyte Group Incorporated Annual Report to Stockholders incorporated by reference in this Form 10-K, and have issued our report thereon dated January 26, 1995. Our audits were made for the purpose of forming an opinion on those statements taken as a whole. The schedule listed in Item 14a(2) is the responsibility of the Company's management and is presented for purposes of complying with the Securities and Exchange Commission's rules and is not part of the basic consolidated financial statements. This schedule has been subjected to the auditing procedures applied in the audits of the basic consolidated financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic consolidated financial statements taken as a whole. ARTHUR ANDERSEN LLP New York, New York January 26, 1995 - 17 - THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES Schedule II - Valuation and Qualifying Accounts ($ in thousands)
Additions Balance at Charged to (a) Balance Beginning Costs and Other at End of Year Expenses Deductions Changes of Year ---------- ---------- ---------- ------- -------- YEAR-ENDED DECEMBER 31, 1994 ------------------------------------------ Allowance for Doubtful Accounts $ 3,765 $ 1,334 $ (1,548) $ 0 $ 3,551 YEAR-ENDED DECEMBER 31, 1993 ------------------------------------------ Allowance for Doubtful Accounts $ 5,250 $ 407 $ (1,892) $ 0 $ 3,765 YEAR-ENDED DECEMBER 31, 1992 ------------------------------------------ Allowance for Doubtful Accounts $ 4,261 $ 1,583 $ (1,008) $ 414 $ 5,250 (a) Other changes consist primarily of the acquisition of Forecast Lighting and reclassifications.
-18- EX-4.(C).1 2 LOAN AGREEMENT I LOAN AGREEMENT I AGREEMENT made this 13th day of July, 1994, between The Genlyte Group Incorporated, d/b/a LIGHTOLIER, a Delaware corporation with a usual place of business at 63 Airport Road, Fall River, Massachusetts ("Borrower"), and JOBS FOR FALL RIVER, INC. a Massachusetts non-profit corporation with its principal place of business at One Government Center, Fall River, Massachusetts ("Lender"). IN CONSIDERATION of the representations, warranties, covenants and agreements set forth in this Agreement, Lender is making a loan to Borrower in the amount of Fifty Thousand ($50,000.00) Dollars ("the loan"). In connection with the Loan, Borrower is executing a promissory note ("Note"), and certain other documents. This Agreement, together with the Note, and the other documents executed in connection with this Loan are collectively called the "Documents". SECTION 1. LOAN. 1.1 Note Lender is loaning to Borrower $50,000.00 which Borrower shall repay in accordance with the Borrower's promissory note in the amount of $50,000.00 the form of which is attached hereto and marked Exhibit "A". SECTION 2. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and warrants as follows: 1 2.1 Organization Borrower is duly organized, validly existing in good standing and qualified to do business under the laws of the Commonwealth of Massachusetts with full power and authority to own its properties and to conduct its business in the Commonwealth of Massachusetts and such other jurisdictions in which such business has been and is now being conducted. 2.2 Authority The Borrower has taken all action which may be required by its charter, by-laws and applicable law to authorize the execution, delivery and performance of this Agreement and the Documents. 2.3 No Conflict The execution, delivery and performance by Borrower of this Agreement and the Documents will not violate any provisions of the Borrower's charter or by-laws, and will not conflict with or result in any breach of any provision of, or constitute a default under, or result in the imposition of any lien or charge upon any asset of Borrower under, or result in the acceleration of any obligation under the terms of any agreement or document binding upon Borrower. 2.4 Payment of Taxes Borrower has filed all federal and state tax returns required to be filed, and all taxes shown to be owing on such returns have been paid. Borrower has no knowledge of any deficiency which may become due in connection with such taxes. All other material taxes which are due from Borrower have been paid. 2 SECTION 3. COVENANTS Until the Note is paid in full, Borrower hereby agrees as follows: 3.1 Payments of Liabilities Borrower shall pay all liabilities as they become due unless they are contested in good faith, in which case adequate reserves therefore will be maintained. 3.2 Conduct of Business Borrower shall keep in full force and effect its existence and all material rights, licenses, patents, leases and franchises reasonably necessary for the conduct of its business and shall comply with all applicable laws and regulations the violation of which would be materially adverse to Borrower. Borrower shall promptly give Lender notice of any unusual problems or developments affecting its business operations which may adversely affect its ability to repay the Loan. 3.3 Maintenance of Property Borrower shall keep all of its property, both real and personal, that is material to its business in good order and condition and shall make all necessary repairs, replacements, additions and improvements thereto so that its business may be properly and advantageously conducted. 3.4 Maintenance of Insurance Borrower shall keep all of its property, both real and personal, that 3 is material to its business insured with financially responsible insurers, or adequately self-insured, in amounts sufficient to repair or replace such property in the event of casualty and, on demand from Lender shall furnish Lender with evidence of such policies. 3.5 Financial Records Borrower shall at all times keep proper books of records and account, in which correct and complete entries shall be made of all its dealings, in accordance with sound accounting practices. 3.6 Employment by Borrower Borrower covenants and agrees that the following full-time workers and part-time workers with compensation to be paid will be added to payroll as a result of this loan, which full-time and part-time workers will be residents of the City of Fall River: Compensation to Employees Presently Full Time Part Time be Paid on Payroll --------- --------- --------------- ------------------- 10 Minimum Wage Borrower further agrees to report to Lender on a quarterly basis, during each calendar year, its employment status regarding the additional employees and existing employees resulting from application of these loan proceeds. This Loan Agreement is subject to all the conditions and requirements of the Community Development Agency, which conditions and requirements are attached hereto and made a condition hereof. The purpose of the revolving loan fund is to support business activities for which credit is not otherwise available on terms and conditions which would permit the completion and/or the 4 successful operation or accomplishment of the project in Fall River, Massachusetts. The Lender reserves the right to recall the loan if these requirements are not met. SECTION 4. DEFAULT 4.1 Note Default Until the Note is paid in full, if any one or more of the following events of default (hereafter each called an "Event of Default") shall occur: (a) Borrower fails to pay the principal or interest on the Note within thirty (30) days after it is due; (b) Borrower fails to observe or perform any covenant, warranty or agreement to be performed by Borrower under this Agreement, and the same shall not have been remedied within thirty (30) days after written notice thereof from the Lender to the Borrower; (c)(i) the filing by Borrower of a petition under any chapter of the Federal Bankruptcy Code or the institution by Borrower of any other proceeding under any law relating to bankruptcy, bankruptcy reorganization, insolvency or relief of debtors; or (ii) the filing against Borrower of any involuntary petition under any chapter of the Federal Bankruptcy Code or the institution of any other proceeding under the law relating to bankruptcy, bankruptcy reorganization, insolvency or relief of debtors where such proceeding or petition is not dismissed or stayed within sixty (60) days from the date on which it is filed or instituted; or 5 (d) Borrower ceases business operations in its Fall River facility; then, in each such event, Lender may declare Borrower in default of the Note and exercise the Rights on Default as hereinafter provided. 4.2 Rights on Default In the event of the occurrence of an Event of Default under this Agreement, Lender may: (a) by written notice to Borrower declare the Note to be immediately due and payable without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived; and (b) exercise any and all rights which it may have under the Loan Documents. No course of dealing or delay in accelerating the maturity of the Note or in taking or failing to take any other action with respect to any event of default shall affect Lender's right to take such action at a later time. No waiver as to any one default shall affect Lender's rights upon any other default. 4.3 Expenses Any payment made or expense incurred by Lender (including, without limitation, reasonable attorneys' fees and disbursements) in connection with the preparation of the Documents or the legal exercise of any right under the Documents shall be payable on demand by Borrower. 6 SECTION 5. MISCELLANEOUS PROVISIONS 5.1 Borrower shall from time to time execute such further writings, instruments and documents and do such further acts as Lender may reasonably require to effect the purposes of this Agreement. 5.2 Notices Any notice under this Agreement shall be in writing and shall be deemed delivered if mailed, postage prepaid, to a party at the principal place of business specified in this Agreement or such other address as may be specified by notice given after the date hereof. 5.3 Governing Law This Agreement and all Documents shall be governed and construed under the laws of the Commonwealth of Massachusetts. 5.4 Successors and Assigns This Agreement and all Documents shall bind and inure to the benefit of the heirs, executors, administrators, legal representatives, successors and assigns of each party. 5.5 Interpretation Reference to the singular or the plural shall be deemed to include the other where the context requires. 5.6 Prepayment The loan may be prepaid in whole or in part at any time and from time to time without premium or penalty. 7 5.7 Sealed Instrument This Agreement shall have the effect of an instrument under seal. IN WITNESS WHEREOF, this Agreement has been executed by its duly authorized representatives on the date first hereinabove written. THE GENLYTE GROUP INCORPORATED, D/B/A LIGHTOLIER By: /s/ Larry K. Powers --------------------------------------- Larry K. Powers, President JOBS FOR FALL RIVER, INC. By: /s/ Michael F. Neves --------------------------------------- Name: Michael F. Neves ------------------------------------- Title: President ------------------------------------ 8 EX-4.(C).2 3 LOAN AGREEMENT II LOAN AGREEMENT II AGREEMENT made this 13th day of July, 1994, between The Genlyte Group Incorporated, d/b/a LIGHTOLIER, a Delaware corporation with a usual place of business at 63 Airport Road, Fall River, Massachusetts ("Borrower"), and JOBS FOR FALL RIVER, INC. a Massachusetts non-profit corporation with its principal place of business at One Government Center, Fall River, Massachusetts ("Lender"). IN CONSIDERATION of the representations, warranties, covenants and agreements set forth in this Agreement, Lender is making a loan to Borrower in the amount of Fifty Thousand ($50,000.00) Dollars ("the loan"). In connection with the Loan, Borrower is executing a promissory note ("Note"), and certain other documents. This Agreement, together with the Note, and the other documents executed in connection with this Loan are collectively called the "Documents". SECTION 1. LOAN. 1.1 Note Lender is loaning to Borrower $50,000.00 which Borrower shall repay in accordance with the Borrower's promissory note in the amount of $50,000.00 the form of which is attached hereto and marked Exhibit "A". SECTION 2. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and warrants as follows: 1 2.1 Organization Borrower is duly organized, validly existing in good standing and qualified to do business under the laws of the Commonwealth of Massachusetts with full power and authority to own its properties and to conduct its business in the Commonwealth of Massachusetts and such other jurisdictions in which such business has been and is now being conducted. 2.2 Authority The Borrower has taken all action which may be required by its charter, by-laws and applicable law to authorize the execution, delivery and performance of this Agreement and the Documents. 2.3 No Conflict The execution, delivery and performance by Borrower of this Agreement and the Documents will not violate any provisions of the Borrower's charter or by-laws, and will not conflict with or result in any breach of any provision of, or constitute a default under, or result in the imposition of any lien or charge upon any asset of Borrower under, or result in the acceleration of any obligation under the terms of any agreement or document binding upon Borrower. 2.4 Payment of Taxes Borrower has filed all federal and state tax returns required to be filed, and all taxes shown to be owing on such returns have been paid. Borrower has no knowledge of any deficiency which may become due in connection with such taxes. All other material taxes which are due from Borrower have been paid. 2 SECTION 3. COVENANTS Until the Note is paid in full, Borrower hereby agrees as follows: 3.1 Payments of Liabilities Borrower shall pay all liabilities as they become due unless they are contested in good faith, in which case adequate reserves therefore will be maintained. 3.2 Conduct of Business Borrower shall keep in full force and effect its existence and all material rights, licenses, patents, leases and franchises reasonably necessary for the conduct of its business and shall comply with all applicable laws and regulations the violation of which would be materially adverse to Borrower. Borrower shall promptly give Lender notice of any unusual problems or developments affecting its business operations which may adversely affect its ability to repay the Loan. 3.3 Maintenance of Property Borrower shall keep all of its property, both real and personal, that is material to its business in good order and condition and shall make all necessary repairs, replacements, additions and improvements thereto so that its business may be properly and advantageously conducted. 3.4 Maintenance of Insurance Borrower shall keep all of its property, both real and personal, that 3 is material to its business insured with financially responsible insurers, or adequately self-insured, in amounts sufficient to repair or replace such property in the event of casualty and, on demand from Lender shall furnish Lender with evidence of such policies. 3.5 Financial Records Borrower shall at all times keep proper books of records and account, in which correct and complete entries shall be made of all its dealings, in accordance with sound accounting practices. 3.6 Employment by Borrower Borrower covenants and agrees that the following full-time workers and part-time workers with compensation to be paid will be added to payroll as a result of this loan, which full-time and part-time workers will be residents of the City of Fall River: Compensation to Employees Presently Full Time Part Time be Paid on Payroll --------- --------- --------------- ------------------- 10 Minimum Wage Borrower further agrees to report to Lender on a quarterly basis, during each calendar year, its employment status regarding the additional employees and existing employees resulting from application of these loan proceeds. This Loan Agreement is subject to all the conditions and requirements of the Community Development Agency, which conditions and requirements are attached hereto and made a condition hereof. The purpose of the revolving loan fund is to support business activities for which credit is not otherwise available on terms and conditions which would permit the completion and/or the 4 successful operation or accomplishment of the project in Fall River, Massachusetts. The Lender reserves the right to recall the loan if these requirements are not met. SECTION 4. DEFAULT 4.1 Note Default Until the Note is paid in full, if any one or more of the following events of default (hereafter each called an "Event of Default") shall occur: (a) Borrower fails to pay the principal or interest on the Note within thirty (30) days after it is due; (b) Borrower fails to observe or perform any covenant, warranty or agreement to be performed by Borrower under this Agreement, and the same shall not have been remedied within thirty (30) days after written notice thereof from the Lender to the Borrower; (c)(i) the filing by Borrower of a petition under any chapter of the Federal Bankruptcy Code or the institution by Borrower of any other proceeding under any law relating to bankruptcy, bankruptcy reorganization, insolvency or relief of debtors; or (ii) the filing against Borrower of any involuntary petition under any chapter of the Federal Bankruptcy Code or the institution of any other proceeding under the law relating to bankruptcy, bankruptcy reorganization, insolvency or relief of debtors where such proceeding or petition is not dismissed or stayed within sixty (60) days from the date on which it is filed or instituted; or 5 (d) Borrower ceases business operations in its Fall River facility; then, in each such event, Lender may declare Borrower in default of the Note and exercise the Rights on Default as hereinafter provided. 4.2 Rights on Default In the event of the occurrence of an Event of Default under this Agreement, Lender may: (a) by written notice to Borrower declare the Note to be immediately due and payable without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived; and (b) exercise any and all rights which it may have under the Loan Documents. No course of dealing or delay in accelerating the maturity of the Note or in taking or failing to take any other action with respect to any event of default shall affect Lender's right to take such action at a later time. No waiver as to any one default shall affect Lender's rights upon any other default. 4.3 Expenses Any payment made or expense incurred by Lender (including, without limitation, reasonable attorneys' fees and disbursements) in connection with the preparation of the Documents or the legal exercise of any right under the Documents shall be payable on demand by Borrower. 6 SECTION 5. MISCELLANEOUS PROVISIONS 5.1 Borrower shall from time to time execute such further writings, instruments and documents and do such further acts as Lender may reasonably require to effect the purposes of this Agreement. 5.2 Notices Any notice under this Agreement shall be in writing and shall be deemed delivered if mailed, postage prepaid, to a party at the principal place of business specified in this Agreement or such other address as may be specified by notice given after the date hereof. 5.3 Governing Law This Agreement and all Documents shall be governed and construed under the laws of the Commonwealth of Massachusetts. 5.4 Successors and Assigns This Agreement and all Documents shall bind and inure to the benefit of the heirs, executors, administrators, legal representatives, successors and assigns of each party. 5.5 Interpretation Reference to the singular or the plural shall be deemed to include the other where the context requires. 5.6 Prepayment The loan may be prepaid in whole or in part at any time and from time to time without premium or penalty. 7 5.7 Sealed Instrument This Agreement shall have the effect of an instrument under seal. IN WITNESS WHEREOF, this Agreement has been executed by its duly authorized representatives on the date first hereinabove written. THE GENLYTE GROUP INCORPORATED, D/B/A LIGHTOLIER By: /s/ Larry K. Powers --------------------------------------- Larry K. Powers, President JOBS FOR FALL RIVER, INC. By: /s/ Michael F. Neves --------------------------------------- Name: Michael F. Neves ------------------------------------- Title: President ------------------------------------ 8 EX-4.(C).3 4 LOAN AGREEMENT III LOAN AGREEMENT III AGREEMENT made this 13th day of July, 1994, between The Genlyte Group Incorporated, d/b/a LIGHTOLIER, a Delaware corporation with a usual place of business at 63 Airport Road, Fall River, Massachusetts ("Borrower"), and JOBS FOR FALL RIVER, INC. a Massachusetts non-profit corporation with its principal place of business at One Government Center, Fall River, Massachusetts ("Lender"). IN CONSIDERATION of the representations, warranties, covenants and agreements set forth in this Agreement, Lender is making a loan to Borrower in the amount of Fifty Thousand ($50,000.00) Dollars ("the loan"). In connection with the Loan, Borrower is executing a promissory note ("Note"), and certain other documents. This Agreement, together with the Note, and the other documents executed in connection with this Loan are collectively called the "Documents". SECTION 1. LOAN. 1.1 Note Lender is loaning to Borrower $50,000.00 which Borrower shall repay in accordance with the Borrower's promissory note in the amount of $50,000.00 the form of which is attached hereto and marked Exhibit "A". SECTION 2. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and warrants as follows: 1 2.1 Organization Borrower is duly organized, validly existing in good standing and qualified to do business under the laws of the Commonwealth of Massachusetts with full power and authority to own its properties and to conduct its business in the Commonwealth of Massachusetts and such other jurisdictions in which such business has been and is now being conducted. 2.2 Authority The Borrower has taken all action which may be required by its charter, by-laws and applicable law to authorize the execution, delivery and performance of this Agreement and the Documents. 2.3 No Conflict The execution, delivery and performance by Borrower of this Agreement and the Documents will not violate any provisions of the Borrower's charter or by-laws, and will not conflict with or result in any breach of any provision of, or constitute a default under, or result in the imposition of any lien or charge upon any asset of Borrower under, or result in the acceleration of any obligation under the terms of any agreement or document binding upon Borrower. 2.4 Payment of Taxes Borrower has filed all federal and state tax returns required to be filed, and all taxes shown to be owing on such returns have been paid. Borrower has no knowledge of any deficiency which may become due in connection with such taxes. All other material taxes which are due from Borrower have been paid. 2 SECTION 3. COVENANTS Until the Note is paid in full, Borrower hereby agrees as follows: 3.1 Payments of Liabilities Borrower shall pay all liabilities as they become due unless they are contested in good faith, in which case adequate reserves therefore will be maintained. 3.2 Conduct of Business Borrower shall keep in full force and effect its existence and all material rights, licenses, patents, leases and franchises reasonably necessary for the conduct of its business and shall comply with all applicable laws and regulations the violation of which would be materially adverse to Borrower. Borrower shall promptly give Lender notice of any unusual problems or developments affecting its business operations which may adversely affect its ability to repay the Loan. 3.3 Maintenance of Property Borrower shall keep all of its property, both real and personal, that is material to its business in good order and condition and shall make all necessary repairs, replacements, additions and improvements thereto so that its business may be properly and advantageously conducted. 3.4 Maintenance of Insurance Borrower shall keep all of its property, both real and personal, that 3 is material to its business insured with financially responsible insurers, or adequately self-insured, in amounts sufficient to repair or replace such property in the event of casualty and, on demand from Lender shall furnish Lender with evidence of such policies. 3.5 Financial Records Borrower shall at all times keep proper books of records and account, in which correct and complete entries shall be made of all its dealings, in accordance with sound accounting practices. 3.6 Employment by Borrower Borrower covenants and agrees that the following full-time workers and part-time workers with compensation to be paid will be added to payroll as a result of this loan, which full-time and part-time workers will be residents of the City of Fall River: Compensation to Employees Presently Full Time Part Time be Paid on Payroll --------- --------- --------------- ------------------- 5 Minimum Wage Borrower further agrees to report to Lender on a quarterly basis, during each calendar year, its employment status regarding the additional employees and existing employees resulting from application of these loan proceeds. This Loan Agreement is subject to all the conditions and requirements of the Community Development Agency, which conditions and requirements are attached hereto and made a condition hereof. The purpose of the revolving loan fund is to support business activities for which credit is not otherwise available on terms and conditions which would permit the completion and/or the 4 successful operation or accomplishment of the project in Fall River, Massachusetts. The Lender reserves the right to recall the loan if these requirements are not met. SECTION 4. DEFAULT 4.1 Note Default Until the Note is paid in full, if any one or more of the following events of default (hereafter each called an "Event of Default") shall occur: (a) Borrower fails to pay the principal or interest on the Note within thirty (30) days after it is due; (b) Borrower fails to observe or perform any covenant, warranty or agreement to be performed by Borrower under this Agreement, and the same shall not have been remedied within thirty (30) days after written notice thereof from the Lender to the Borrower; (c)(i) the filing by Borrower of a petition under any chapter of the Federal Bankruptcy Code or the institution by Borrower of any other proceeding under any law relating to bankruptcy, bankruptcy reorganization, insolvency or relief of debtors; or (ii) the filing against Borrower of any involuntary petition under any chapter of the Federal Bankruptcy Code or the institution of any other proceeding under the law relating to bankruptcy, bankruptcy reorganization, insolvency or relief of debtors where such proceeding or petition is not dismissed or stayed within sixty (60) days from the date on which it is filed or instituted; or 5 (d) Borrower ceases business operations in its Fall River facility; then, in each such event, Lender may declare Borrower in default of the Note and exercise the Rights on Default as hereinafter provided. 4.2 Rights on Default In the event of the occurrence of an Event of Default under this Agreement, Lender may: (a) by written notice to Borrower declare the Note to be immediately due and payable without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived; and (b) exercise any and all rights which it may have under the Loan Documents. No course of dealing or delay in accelerating the maturity of the Note or in taking or failing to take any other action with respect to any event of default shall affect Lender's right to take such action at a later time. No waiver as to any one default shall affect Lender's rights upon any other default. 4.3 Expenses Any payment made or expense incurred by Lender (including, without limitation, reasonable attorneys' fees and disbursements) in connection with the preparation of the Documents or the legal exercise of any right under the Documents shall be payable on demand by Borrower. 6 SECTION 5. MISCELLANEOUS PROVISIONS 5.1 Borrower shall from time to time execute such further writings, instruments and documents and do such further acts as Lender may reasonably require to effect the purposes of this Agreement. 5.2 Notices Any notice under this Agreement shall be in writing and shall be deemed delivered if mailed, postage prepaid, to a party at the principal place of business specified in this Agreement or such other address as may be specified by notice given after the date hereof. 5.3 Governing Law This Agreement and all Documents shall be governed and construed under the laws of the Commonwealth of Massachusetts. 5.4 Successors and Assigns This Agreement and all Documents shall bind and inure to the benefit of the heirs, executors, administrators, legal representatives, successors and assigns of each party. 5.5 Interpretation Reference to the singular or the plural shall be deemed to include the other where the context requires. 5.6 Prepayment The loan may be prepaid in whole or in part at any time and from time to time without premium or penalty. 7 5.7 Sealed Instrument This Agreement shall have the effect of an instrument under seal. IN WITNESS WHEREOF, this Agreement has been executed by its duly authorized representatives on the date first hereinabove written. LIGHTOLIER DIVISION OF THE GENLYTE GROUP INCORPORATED By: /s/ Donna Ratliff --------------------------------------- Donna Ratliff, Vice President- Administration and Corporate Secretary JOBS FOR FALL RIVER, INC. By: /s/ Michael F. Neves --------------------------------------- Name: Michael F. Neves ------------------------------------- Title: President ------------------------------------ 8 EX-11 5 CALCULATION OF EARNINGS PER SHARE
THE GENLYTE GROUP INCORPORATED EXHIBIT 11 Calculation of Primary and Fully Diluted Earnings per Share For the Years Ended December 31, 1994, December 31, 1993, and December 31, 1992 ($ in Thousands - except per share data) 1994 1993 1992 ------ ------ ------ PRIMARY EARNINGS PER SHARE * ---------------------------- Net Income (Loss) before cumulative effect of a change in accounting principle $ 5,080 $ 3,341 $ (2,192) Cumulative effect of a change in accounting principle 0 0 (3,670) ------ ------ ------ Net Income $ 5,080 $ 3,341 $ 1,478 ====== ====== ====== Average common shares outstanding 12,732 12,726 12,701 Common shares issuable in respect to common stock equivalents, with a dilutive effect 6 69 141 ------ ------ ------ Total common and equivalent shares 12,738 12,795 12,842 ====== ====== ====== Primary earnings per share before cumulative effect of a change in accounting principle $ 0.40 $ 0.26 $ (0.17) Effect of a change in accounting principle on earnings per share 0.00 0.00 0.29 ------ ------ ------ Primary Earnings Per Share $ 0.40 $ 0.26 $ 0.12 ====== ====== ====== FULLY DILUTED EARNINGS PER SHARE * ---------------------------------- Net Income (Loss) before cumulative effect of a change in accounting principle $ 5,080 $ 3,341 $ (2,192) Cumulative effect of a change in accounting principle 0 0 (3,670) ------ ------ ------ Net Income $ 5,080 $ 3,341 $ 1,478 ====== ====== ====== Total common and equivalent shares 12,738 12,795 12,842 Additional common shares issuable assuming full dilution 4 12 6 ------ ------ ------ Total common and equivalent shares assuming full dilution 12,742 12,807 12,848 ====== ====== ====== Fully diluted earnings per share before cumulative effect of a change in accounting principle $ 0.40 $ 0.26 $ (0.17) Effect of a change in accounting principle on earnings per share 0.00 0.00 0.29 ------ ------ ------ Fully Diluted Earnings Per Share $ 0.40 $ 0.26 $ 0.12 ====== ====== ====== * Primary earnings per share include all common stock equivalents. Fully diluted earnings per share include all common stock equivalents plus the additional shares issuable assuming full dilution.
EX-13 6 ANNUAL REPORT-DECEMBER 31, 1994 1994 ANNUAL REPORT GENLYTE LIGHTING THE WAY--TOGETHER CONTENTS Financial Highlights .......................................1 Letter to Stockholders .....................................2 Genlyte at a Glance ........................................4 Genlyte Divisions ..........................................5 Selected Financial Data ...................................13 Management's Discussion and Analysis ......................14 Consolidated Financial Statements .........................16 Notes to Consolidated Financial Statements ................20 Corporate Directory ........................Inside Back Cover CORPORATE OFFICES 100 Lighting Way Secaucus, NJ 07096-1508 (201) 864-3000 INVESTOR RELATIONS INFORMATION AND FORM 10-K Please call or write the Investor Relations Department at Genlyte Corporate Offices STOCK LISTING Genlyte common stock is traded on the NASDAQ National Market System under the symbol GLYT TRANSFER AGENT & REGISTRAR Bank of New York 101 Barclay Street New York, NY 10286 (800) 524-4458 INDEPENDENT PUBLIC ACCOUNTANTS Arthur Andersen LLP 1345 Avenue of the Americas New York, NY 10105 ANNUAL MEETING The Annual Stockholders' Meeting will be held at The Genlyte Group Inc., 100 Lighting Way, Secaucus, NJ on April 27, 1995 COVER PHOTO: MURRAY & MURRAY LAW OFFICES LOCATED IN SANDUSKY, OHIO FINANCIAL HIGHLIGHTS
(Amounts in thousands except for per share data) -------------------------------------------------------------------------------- Year 1992 1993 1994 -------------------------------------------------------------------------------- Operating Results Net Sales $425,388 429,143 432,690 Gross Margin Percentage 29.1% 29.7% 30.1% Operating Profit $ 9,578 19,327 20,455 Up 114% in two years on modest sales growth -- a credit to our employees' productivity. Net Income $ 1,478 3,341 5,080 Earnings Per Share $ .12 .26 .40 --------------------------------------------------------------------------------
(Amounts in thousands except for per share data) -------------------------------------------------------------------------------- Year 1992 1993 1994 -------------------------------------------------------------------------------- Balance Sheet Data Current Assets $158,760 156,013 160,968 Total Assets $256,924 244,536 243,814 Current Liabilities $ 58,734 70,200 70,618 Long-term Debt, including current portion $117,797 100,419 88,997 Nearly 25% of our debt has been eliminated in two years. Stockholders' Investment $ 58,536 60,842 64,806 Book Value Per Share $ 4.61 4.78 5.09 Earnings are growing faster than book value as we improve the return on our investments. --------------------------------------------------------------------------------
Light is a creative medium--perhaps the most powerful of all, because most of what we know of our environment comes to us through our eyes, and because the way we see depends entirely upon how things receive and reflect light. 1 LETTER FROM THE PRESIDENT [Photo Larry Powers, President & Chief Executive Officer] TO OUR STOCKHOLDERS We live approximately seventy percent of our waking hours in creative lighting. Add decorative lighting to beautify our surroundings, and security lighting to help keep us safe and secure, and something becomes very clear: the products created and produced by genlyte companies profoundly affect people's lives--perhaps more than most other products we depend on. That is why all of us at Genlyte are so very proud of the products and services we provide. On behalf of all our employees, I am pleased to share with you Genlyte's accomplishments for 1994, which are contained throughout the pages of this report. I would also like to share with you Genlyte's vision for the future. A synopsis of this vision is found on the back cover of this report as a reminder to all of us of our focus for 1995. In crystallizing this vision over the past year, we defined a corporate objective that revolves around our customers, our employees, and our stockholders. The slogan we selected to express this objective is: LIGHTING THE WAY--TOGETHER. CUSTOMERS: We are committed to being more and more customer-focused, continually striving to meet or exceed our customers' expectations--to make doing business with Genlyte easier. As part of this commitment, we are investing in state-of-the-art systems which allow immediate information access and processing, to provide our customers with the highest level of responsiveness in the lighting industry. We want our customers to buy from Genlyte knowing they will get superior lighting solutions supported by quality products, excellent service, quick response, and timely delivery. EMPLOYEES: In a world changing at accelerating rates, we have a strong commitment to the development of our employees. We value and respect each employee as an individual, realizing that we must listen to, trust, and serve each other. Each of our employees is entitled to fair treatment, a safe and healthy work environment, and the opportunity to grow. In return, we ask our employees for an honest day's work for an honest day's pay and we always strive to promote from within. We work to instill a sense of urgency in all of our employees and in return, we work to respond immediately to their needs, concerns, and opportunities. STOCKHOLDERS: Our responsibility to our stockholders is to provide them with a fair rate of return for their continued show of confidence. We are committed to improving our earnings every year by achieving consistent growth in sales and profitability. We have been--and will increasingly be--cost conscious with regard to our business decisions and expenditures. We will continue to invest in new product development and in new processes and procedures to assure us of 2 LETTER FROM THE PRESIDENT, CONTINUED being a low-cost, world-class producer. Most important, we want to focus on those activities, products, markets, and customers that will provide us with the greatest return. Looking ahead, we are optimistic for the coming year. Economic conditions in the United States and Canada are healthy and, although we are concerned about rising interest rates, we expect 1995 to be a good year in most of the markets we serve. Our optimism is also fueled by the plans we have in place to respond aggressively to the improved market conditions with innovative products, marketing programs, and strong sales efforts. Behind the text of this annual report, you'll see pictures of our valued teammates, the people who made possible our improvements and achievements in 1994. We want to recognize them for their accomplishments and to thank them for their dedication, their service, and their realization of the Genlyte vision for a bright future--together. /s/ LARRY K. POWERS LARRY K. POWERS PRESIDENT AND CHIEF EXECUTIVE OFFICER [Photo of Executive Committee] Executive Committee (back row): CHARLES M. HAVERS, STEVEN R. CARSON, ZIA EFTEKHAR, RENE MARINEAU, GEORGE O'DONNELL, NEIL M. BARDACH, DENNIS MUSSELMAN, (seated): DONNA R. RATLIFF, LARRY K. POWERS, AVRUM I. DRAZIN 3 GENLYTE AT A GLANCE
DIVISION BASIC BUSINESSES 1994 HIGHLIGHTS 1995 OPPORTUNITIES -------------------------------------------------------------------------------------------------------------------- LIGHTOLIER High quality, innovative New ProSpec downlights Lightstyles, a lighting for residential and Sof-Tech track comprehensive product/ and commercial interiors: lights; move of marketing program for the downlighting, track headquarters' functions residential market; lighting, decorative, into Fall River, MA, Advanced Lighting Systems fluorescent, and manufacturing facility. of fixtures and controls controls. for offices with VDTs; international sales. -------------------------------------------------------------------------------------------------------------------- CONTROLS Electronic dimming and Addition of high Continued focus on energy saving lighting performance dimming integrated electronic controls for both versions of the highly lighting fixtures, residential and successful Lightolier increasing manufacturing commercial applications. PowerSpec electronic capacity to meet market fixture family of demand. products. -------------------------------------------------------------------------------------------------------------------- SUPPLY DIVISION: Standard, high-volume, Division consolidation Renewed emphasis on STONCO, CRESCENT, contractor-friendly allowed resources to be product innovation; & EXCELINE indoor and outdoor focused on improved improved point-of-sale lighting distributed customer service and rep support for distributors, through electrical support; implementation lower transaction cost wholesalers and sold of world-class for electrical primarily to electrical manufacturing techniques. wholesalers. contractors. -------------------------------------------------------------------------------------------------------------------- WIDE-LITE/ Energy-efficient, Introduced EFFEX Series Consolidation of BRONZELITE high-intensity discharge precision architectural manufacturing operation; indoor and outdoor HID floodlight, Bronze penetration into National lighting and controls for family landscape Accounts with other commercial, industrial, luminaires, and Genlyte divisions; and recreational lighting multi-level HID lighting international sales. applications. control systems; implementation of world- class manufacturing techniques. -------------------------------------------------------------------------------------------------------------------- HADCO Specification grade Best performance ever; Expansion of landscape exterior architectural double-digit revenue product line; continued lighting for municipal, growth; introduced growth of municipal institutional, products into Middle market. commercial, and landscape Eastern market. applications. -------------------------------------------------------------------------------------------------------------------- DIAMOND F Decorative residential Moved manufacturing and Broaden product offering lighting fixtures sold distribution facility to and improve service through do-it-yourself Elgin, IL. levels for the DIY (DIY) home centers. market. -------------------------------------------------------------------------------------------------------------------- CANLYTE Sale in Canada of Solidification of market Growing strength of Lightolier, CFI, Keene, share which is already Canadian economy, and Wide-Lite, Stonco, and the largest in Canada. National Account focus. Hadco product lines.
4 LIGHTOLIER Lightolier, Genlyte's most recognized brand, features innovative interior lighting fixtures for the residential and commercial markets. In 1994, Lightolier marked its 90th anniversary. The division successfully consolidated marketing, design, engineering, and sales functions into its major manufacturing facility in Fall River, Massachusetts. Two key new products were introduced. The versatile ProSpec line of incandescent accent lighting provides a superior range of light sources, optics, and adjustment. Sof-Tech track lighting offers the fresh styling and "to-the-touch" quality that are hallmarks of Lightolier. Important additions for 1995 include Lightstyles, targeting the residential market with decorative, recessed, track, and lighting controls, with a comprehensive application/product catalog. Also introduced were Advanced Lighting Systems, Vision-Smart luminaires, and Energy-Smart controls for office work spaces with Visual Display Terminals. Lightolier sells through company employed sales forces and independent sales representatives using a network of selective showroom and wholesale distribution. National store and hospitality chains have been particularly valuable end users. In 1995, the company will introduce a focused international sales program. [Photo Captions] Top: Lightolier's architectural downlights play the key role in creating magic for today's private residences. Left: Lightolier's high-performance luminaires address both energy and visibility. Library--Murray & Murray Law Offices, Sandusky, Ohio. Center: Sof-Tech track lights with "cool grip" and integral die-cast louver. Right: ProSpec recessed accent lights with interchangeable and lockable optics. 5 CONTROLS The Brilliance Control system, a specialty lighting dimming system introduced last year for residential use, allowing control of standard dimmers from several "master" control stations, became a top seller in 1994. Several line extensions are planned in 1995, including a wireless version allowing direct retrofit to existing homes without rewiring. In 1994, the division introduced MultiSet, an advanced series of program-mable wallbox dimmers capable of learning five distinct preset scenes. The year 1994 also brought the introduction of the Lightolier HDF series of dimming ballasts for fluorescent light sources. Marketed together, Lightolier and HDF marks the first time a commercial indoor fixture manufacturer can be a single source supplier of fixtures, ballasts, and controls under a complete system warranty. Lightolier also successfully introduced the complete Controls product line in Canada, foretelling excellent opportunities for these products throughout North America. Top: Contemporary residential application. Center: Murray & Murray Law Offices, Sandusky, Ohio. Bottom: Lightolier's new five scene preset series of dimmers and switches allow convenient one button control of several lighting groups in commercial and residential applications. 6 FORECAST Genlyte's Forecast brand of decorative lighting increased sales in 1994 by twenty percent over the previous year. Thirty percent of these sales came from the 185 new residential lighting fixtures introduced during the year. Among these were distinctive iron chandeliers, art glass pendants, and halogen bathroom fixtures. Sales of these products were often accompanied by the sale of Forecast's new lighting controls line, which served retailers as a valuable added sales opportunity. In the coming year, Forecast plans further dramatic expansion of its product line to fulfill the demands of all residential lighting markets by adding to its well-established high-style collections. New entries in the value-oriented builder products market segment will increase opportunities in the middle-to-higher range decorative residential lighting markets. Top: The new Contempo series pendant in distressed iron finish offers bright halogen light. Left: The Tribe Torchiere provides a dramatic design statement and matches Forecast's Cienega art glass fixtures. Right: The Embrace combines handmade cages in a parchment finish with stone finished stepped glass. 7 SUPPLY DIVISION: STONCO, CRESCENT & EXCELINE The Supply Division markets quality, high-volume fluorescent and HID lighting products to electrical distributors through the Stonco, Crescent, and ExceLine brands. In 1994, Stonco experienced double digit growth, augmented by aggressive implementation of "World-Class" manufacturing. Stonco introduced Guardsman vandal-resistant security lighting for high pedestrian traffic areas, along with MD motion detectors, offering cost-effective security for commercial and residential markets. ExceLine introduced the Vertex family of high-performance mini-floodlights suitable for a broad spectrum of applications. For 1995, the division will present a family of merchan-dising tools including point- of-purchase displays for electrical distributors. Crescent will debut the first electronically ballasted family of under-cabinet task lights, while Stonco will promote its new family of "vaportight" incandescent and compact fluorescent fixtures. ExceLine will continue to broaden its product offering, with a particular emphasis on high performance HID solutions for the retail trade. Top: Ceiling and task lighting fluorescent products for commercial applications. Left: Manuel Miranda at work in one of our employee- designed World-Class Manufacturing work cells. Center: 175 watt Vertex Series Mini Floodlight. Right: Roughlyte(TM) vaportight fixture. 8 WIDE-LITE / BRONZELITE In 1994 Wide-Lite built on its fame as creator of the first high intensity discharge (HID) floodlight for commercial and industrial markets, introducing the EFFEX HID floodlight series, featuring compact size and architectural styling. Other new products included: the Mini Supra-Lyte, a pedestrian walkway complement to the Supra-Lyte area light; the F-Eclipse arena lighting luminaire; and the Tri-Level hi-medium-low HID lighting control system. In 1995 Wide-Lite will re-introduce its own invention--HID lighting control--in a new generation of dimming controls employing state-of-the-art technology. Bronzelite introduced the distinctive Bronze Series of corrosion-proof landscape fixtures in 1994. The company offers a full line of landscape and underwater lighting products for diverse architectural applications. Bronzelite will focus on developing new segments in the specification landscape market. Top: The Promenade at Bay Colony, Fort Lauderdale, Florida Left: Effex Series Precision Floodlight Right: Bronzelite-TLB-7000 Bronze Bullet 9 HADCO Hadco is a leader in outdoor architectural street lighting, area lighting, and landscape lighting. Recognizing a market demand for small-footprint, high-efficiency landscape fixtures able to withstand harsh exterior environments, Hadco launched in 1993 an aggressive expansion of its composite non-metallic line of professional-grade land-scape lighting equipment. The micro inground fixture introduced in early 1994 skyrocketed to become one of Hadco's top landscape products. Following this success, Hadco expanded its line of outdoor composite bullet fixtures and launched a feature-laden micro composite bullet in December. The new Railyter is another non-metallic product designed to provide directional light under deck railings, ledges, and deck benches, making it an exciting low voltage alternative for landscape architects. Within the municipal market, Hadco's refractor globe technology is being recognized as an effective, efficient lighting alternative for crime prevention as well as a unique unifying downtown streetscape element. Top: The twin refractive globe luminaires provide efficient glare-free street lighting for the city of Syracuse. Left: Customized luminaires allow urban planners to create an attractive identity for their city. Right: Hadco offers a complete line of landscape lighting products for commercial and residential applications. 10 DIAMOND F In 1994 Genlyte's Diamond F division continued to expand in the consumer marketplace with the introduction of distinctively-styled, popularly-priced residential lighting fixtures. For these efforts, Diamond F was recognized industry-wide with an award for outstanding product marketing in the do-it-yourself (DIY) channel of distribution. New product development and market activity emphasis will shift in 1995 towards support of the fast growing DIY market segment. Management will focus on stock-keeping unit (SKU) productivity and return on investment in an effort to more effectively support the growing customer base. Top: Prism 1291, Rust Patina Finish Bottom: Milano 3496, Burnished Brass Finish 11 CANLYTE Nineteen ninety-four was a year of growth for Canlyte in all of its divisions. The Lightolier product group introduced the Lightolier System which offers a single source of fixtures, controls, and ballasts for commercial applications. Lightolier's growth was also enhanced by increased activity in its National Accounts Program. The CFI fluorescent product group increased market share by combining its new Vision Smart fixtures and Energy Smart Lightolier Controls in a single system. Keene-Widelite's progress was due to increased penetration in key industrial markets across the country. A concentrated effort on the high margin Wide-Lite product line also contributed to Keene-Widelite's overall success. All divisions benefited as the GENESYS software program continues to be one of the main computer lighting design tools used by engineering firms across Canada. Canlyte's major 1995 initia-tives include the rollout of CFI's Advanced Lighting System throughout North America. Lightolier will focus on expanding track lighting for the retail and commercial markets. Keene-Widelite will continue its aggressive product introduction program and focus its marketing efforts on specific end markets. All divisions will introduce service pro-grams based on the credo that "good service is predictable service". Top: Modern retail concepts, like this one in Montreal, enhanced by the performance and style of Lightolier luminaires. Bottom: Increases in productivity and energy savings of over 60% were achieved by using CFI Fluorescent Vision Smart luminaires. This installation uses CFI ambient and task lighting in a line of light configuration which consumes less than .70 watts / ft2. 12 SELECTED FINANCIAL DATA
1994 1993 1992 1991 1990 ------------------------------------------------------------------------------------------------------------- SUMMARY OF OPERATIONS ($ IN THOUSANDS) Net Sales $ 432,690 429,143 425,388 428,481 491,911 Gross profit $ 130,047 127,532 123,656 130,307 152,611 Facility rationalization expense $ -- -- 6,150 -- -- Operating profit $ 20,455 19,327 9,578 20,535 32,949 Interest expense, net $ 7,505 8,086 8,949 12,717 16,361 Income (loss) before income taxes and cumulative effect of change in accounting principle $ 8,481 5,967 (3,642) 3,364 11,860 Provision (benefit) for income taxes $ 3,401 2,626 (1,450) 1,344 4,751 Net income (loss) before cumulative effect of change in accounting principle $ 5,080 3,341 (2,192) 2,020 7,109 Cumulative effect of change in Accounting Principle -- -- (3,670) -- -- Net income $ 5,080 3,341 1,478 2,020 7,109 Return on: Net sales 1.2% .8% .4% .5% 1.4% Average stockholders' investment 8.1% 5.6% 2.5% 3.5% 13.4% Average capital employed 6.1% 4.7% 3.7% 4.9% 7.9% ------------------------------------------------------------------------------------------------------------- YEAR-END POSITION ($ IN THOUSANDS) Working capital $ 90,350 85,813 100,026 105,424 94,019 Plant and equipment, net $ 68,895 73,633 82,139 91,798 101,751 Total assets $ 243,814 244,536 256,924 265,069 286,091 Capital employed: Total debt $ 90,047 100,419 117,797 129,982 144,198 Stockholders' investment $ 64,806 60,842 58,536 58,377 56,748 ------------------------------------------------------------------------------------------------------------- Total capital employed $ 154,853 161,261 176,333 188,359 200,946 ------------------------------------------------------------------------------------------------------------- PER SHARE DATA Net Income (Primary & fully diluted) $ .40 .26 .12 .16 .55 Stockholders' investment per average share outstanding $ 5.05 4.75 4.56 4.53 4.37 Market price range: High $ 5 1/2 7 7 1/4 7 1/2 10 3/4 Low $ 3 1/2 2 3/8 4 1/4 3 7/8 3 7/8 ------------------------------------------------------------------------------------------------------------- OTHER DATA ($ IN THOUSANDS) Orders on hand $ 50,379 43,246 49,495 48,761 46,620 Depreciation and amortization $ 16,886 16,308 18,639 18,961 19,572 Capital expenditures (a) $ 11,884 10,261 8,850 10,206 16,506 Average shares outstanding (b) 12,834 12,807 12,848 12,876 12,986 ------------------------------------------------------------------------------------------------------------- Current ratio 2.3 2.2 2.7 3.1 2.3 Interest Coverage Ratio 2.7 2.4 1.1 1.6 2.0 Number of stockholders 1,970 2,153 2,334 2,501 2,597 Average number of employees 2,838 2,999 3,051 3,189 3,870 Sales per employee $ 152,463 143,095 139,400 134,400 127,100 -------------------------------------------------------------------------------------------------------------
(a) Exclusive of acquired businesses' plant and equipment at date of acquisition (b) Including common stock equivalents 13 MANAGEMENT'S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Net sales during 1994 increased by $3.5 million, or 1%, from 1993 following a $3.8 million, or 1%, increase from 1992 to 1993. Sales in 1994 increased on continued emphasis on new product and marketing programs, more than offsetting decreases due to transition inefficiencies related to the relocation of the Company's DFT Lighting Division ("DFT") from Cleveland, Ohio to Elgin, Illinois, and the elimination of certain slow-moving and unprofitable products at all divisions. A decline in the average value of the Canadian dollar during 1994 resulted in a $3.6 million reduction in 1994 sales volume; a decline in the average value of the Canadian dollar during 1993 resulted in a $4.1 million reduction in 1993 sales volume. Gross profit was $130.0 million in 1994, $127.5 million in 1993, and $123.7 million in 1992. The increases in both 1993 and 1994 resulted from improved sales volumes and increased gross margin rates. The improvements in gross margin rates were the result of ongoing cost containment programs, productivity improvements, the continuing facility rationalization programs, and the previously-mentioned elimination of lower margin products, offset in part by decreased gross profit at DFT. Selling and administrative expenses were 25.3% of sales in 1994, 25.2% of sales in 1993, and 25.4% of sales in 1992. Headcount and other cost reductions during 1994 were offset by duplicate facility costs incurred by DFT. Increased 1993 expenditures for sales and marketing were offset by other cost reductions including a reduced bad debt reserve requirement. Corporate expenses were $4.5 million, $5.3 million, and $4.3 million in 1994, 1993, and 1992, respectively. Headcount reductions, lower legal expenses, and other cost controls implemented during 1994 resulted in a 15.3% decrease in expenses. The higher expenses in 1993 were principally an increase in legal reserves to defend the Company against actions commenced in that year. Net interest expense decreased by $600,000 in 1994 due to lower average borrowings offset partially by rising interest rates throughout the year. Net interest expense decreased by $900,000 from 1992 to 1993 due to lower average borrowings and declines in interest rates throughout the year. The Company adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes", in 1992, retroactive to January 1, 1992. The cumulative effect of this change in accounting principle was a $3.7 million increase in net income in 1992. The Company's effective tax rates for 1994, 1993, and 1992 were 40%, 44%, and 40%, respectively. Lower Canadian tax expense and utilization of U.S. foreign tax credit carryforwards resulted in the 4% effective rate decrease during 1994. Changes in federal tax laws and increases in state tax rates accounted for the 4% increase in effective rate during 1993. 14 MANAGEMENT'S DISCUSSION AND ANALYSIS, CONTINUED LIQUIDITY AND CAPITAL RESOURCES Cash and cash equivalents were $3.2 million in 1994, $3.3 million in 1993, and $2.8 million in 1992. Operations generated $23.4 million, $28.4 million, and $24.8 million in 1994, 1993, and 1992, respectively. These funds were used principally to pay down debt and to fund capital expenditures. Weakening in the Canadian dollar caused unfavorable exchange rate changes of $1.9 million, $.5 million, and $1.3 million, in 1994, 1993, and 1992, respectively. Investments in more advanced machinery, equipment, and tooling for new product introductions accounted for most of the Company's capital expenditures in 1994, 1993, and 1992. During 1994, expenditures also included plant expansion at Fall River (Lightolier) and leasehold improvements at Elgin (DFT). During 1992, expenditures also included the acquisition of Forecast Lighting. In the fourth quarter of 1992, the Company recorded a pre-tax charge of $6.2 Million to reserve for the costs associated with the Company's decision to consolidate facilities and improve the manufacturing processes in its remaining plants. The Company's facility rationalization plan included: relocation of DFT's leased manufacturing and distribution operations in Cleveland, Ohio to an existing owned facility in Elgin, Illinois; closure of its Prodel operation in Quebec City, Canada, and sale of the existing building; downsizing of manufacturing and distribution facilities in Edison, New Jersey and Compton, California; and the transfer of certain Lightolier Headquarters staff to Lightolier's expanded Fall River, Massachusetts facility. The Company intended to complete all aspects of the facility rationalization plan during 1993, but union negotiations and construction at the Fall River facility created significant delays in implementation. As a result, charges against the reserve in 1993 totaled only $677,000 of which $390,000 required cash. During 1994, the Company charged an additional $4.6 million against the reserve, using cash of approximately $4.1 million. Charges against the reserve during 1994 are summarized as follows: Category Charges ---------------------------------------------------- Personnel Relocation Costs $2,727 Severance Costs 1,250 Inventory Write-down 299 Plant and Equipment Write-down 286 Other Costs 13 ---------------------------------------------------- Total $4,575 ---------------------------------------------------- Location Charges ---------------------------------------------------- Elgin $2,326 Headquarters 1,340 Prodel 909 ---------------------------------------------------- Total $4,575 ---------------------------------------------------- Proceeds from the sale of the Prodel facility were received in September 1994. The Company expects the facility rationalization plan to generate operating profit improvements, primarily representing labor cost savings, in excess of $4.4 million per year beginning in 1995; specific results will be difficult to measure as operating efficiencies may occur for reasons not directly associated with the consolidation process. The margin improvements in 1994 were offset by indirect costs and inefficiencies resulting from relocations. Genlyte's Revolving Credit and Term Loan Agreement was amended on May 20, 1994 to provide for a Revolving Credit Facility (the "Facility") of $125 million reducing to $110 million by July 1, 1996. Subject to the satisfaction of certain conditions, the Facility will convert on that date to a term loan amortizing through July 1, 1999. Net reductions in debt outstanding under the Facility for 1994 and 1993 were $10.4 million and $17.4 million, respectively. The Company expects that funds provided by operations combined with amounts available under the Facility will be sufficient to meet cash requirements through 1995. Amounts outstanding under the Facility are secured by liens on U.S. accounts receivable, inventories, and machinery and equipment, as well as investments in certain subsidiaries of the Company. 15 CONSOLIDATED STATEMENTS OF INCOME THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES ($ IN THOUSANDS EXCEPT PER SHARE DATA)
For the year ended December 31, 1994 1993 1992 ----------------------------------------------------------------------------------------------------------- Net Sales $432,690 $429,143 $425,388 Cost of sales 302,643 301,611 301,732 ----------------------------------------------------------------------------------------------------------- Gross Profit 130,047 127,532 123,656 Selling & administrative expenses 109,592 108,205 107,928 Facility rationalization expense -- -- 6,150 ----------------------------------------------------------------------------------------------------------- Operating Profit 20,455 19,327 9,578 Corporate expenses 4,469 5,274 4,271 Interest expense, net 7,505 8,086 8,949 ----------------------------------------------------------------------------------------------------------- Income (loss) Before Income Taxes and Cumulative Effect of Change in Accounting Principle 8,481 5,967 (3,642) Income Tax Provision (Benefit) 3,401 2,626 (1,450) ----------------------------------------------------------------------------------------------------------- Income (loss) Before Cumulative Effect of Change in Accounting Principle 5,080 3,341 (2,192) ----------------------------------------------------------------------------------------------------------- Cumulative Effect of Change in Accounting Principle -- -- (3,670) ----------------------------------------------------------------------------------------------------------- Net Income $ 5,080 $ 3,341 $ 1,478 ----------------------------------------------------------------------------------------------------------- Earnings Per Share Before Cumulative Effect of Change in Accounting Principle .40 .26 (.17) ----------------------------------------------------------------------------------------------------------- Effect of Change in Accounting Principle on Earnings Per Share -- -- .29 ----------------------------------------------------------------------------------------------------------- Earnings Per Share $ .40 $ .26 $ .12 -----------------------------------------------------------------------------------------------------------
The accompanying notes to the consolidated financial statements are an integral part of these statements. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES ($ IN THOUSANDS EXCEPT PER SHARE DATA)
Quarter ------------------------------------------------------------------------------------------- 1st 2nd 3rd 4th Full Year ----------------------------------------------------------------------------------------------------------- 1994 Net Sales $100,271 $108,829 $111,836 $111,754 $432,690 Operating Profit $ 5,129 $ 5,831 $ 5,846 $ 3,649 $ 20,455 Net Income $ 1,264 $ 1,578 $ 1,475 $ 763 $ 5,080 Earnings Per Share $ .10 $ .12 $ .12 $ .06 $ .40 Market Price: High $ 4 3/4 $ 5 1/4 $ 5 1/2 $ 5 $ 5 1/2 Low $ 3 3/4 $ 4 $ 4 1/2 $ 3 1/2 $ 3 1/2 1993 Net Sales $106,556 $109,084 $107,970 $105,533 $429,143 Operating Profit $ 4,308 $ 4,550 $ 5,066 $ 5,403 $ 19,327 Net Income $ 618 $ 767 $ 895 $ 1,061 $ 3,341 Earnings Per Share $ .05 $ .06 $ .07 $ .08 $ .26 Market Price: High $ 7 $ 5 $ 4 5/8 $ 4 3/8 $ 7 Low $ 4 1/2 $ 2 5/8 $ 2 3/8 $ 2 5/8 $ 2 3/8
16 THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES ($ IN THOUSANDS) CONSOLIDATED BALANCE SHEETS
For the year ended December 31, 1994 1993 ------------------------------------------------------------------------------------------------------------ Assets Current Assets: Cash and cash equivalents $ 3,240 $ 3,319 Accounts receivable (less allowances for doubtful accounts of $3,551 and $3,765 in 1994 and 1993, respectively) 65,486 58,991 Inventories: Raw materials and supplies 29,051 29,570 Work in progress 9,683 11,519 Finished goods 45,604 42,754 ------------------------------------------------------------------------------------------------------------ 84,338 83,843 ------------------------------------------------------------------------------------------------------------ Other current assets 7,904 9,860 ------------------------------------------------------------------------------------------------------------ Total current assets 160,968 156,013 ------------------------------------------------------------------------------------------------------------ Plant and Equipment: Land 5,741 5,820 Buildings and leasehold interests and improvements 57,309 54,602 Machinery and equipment 157,803 157,011 ------------------------------------------------------------------------------------------------------------ 220,853 217,433 Less: Accumulated depreciation and amortization 151,958 143,800 ------------------------------------------------------------------------------------------------------------ 68,895 73,633 ------------------------------------------------------------------------------------------------------------ Cost in Excess of Net Assets of Purchased Businesses 12,183 12,336 Other Assets 1,768 2,554 ------------------------------------------------------------------------------------------------------------ Total Assets $243,814 $244,536 ============================================================================================================ Liabilities and Stockholders' Investment Current Liabilities: Short-term borrowings $ 1,050 $ 0 Current maturities of long-term debt 45 7,060 Accounts payable - trade 39,927 31,893 Accrued expenses: Salaries and wages 6,982 4,368 Income taxes payable 1,169 2,561 Reserve for facility rationalization costs 898 5,474 Other accrued expenses 20,547 18,844 ------------------------------------------------------------------------------------------------------------ 29,596 31,247 ------------------------------------------------------------------------------------------------------------ Total current liabilities 70,618 70,200 ------------------------------------------------------------------------------------------------------------ Long-term Debt 88,952 93,359 Deferred Income Taxes 5,781 7,508 Other Liabilities 13,657 12,627 Stockholders' Investment: Common stock ($ .01 par value, 30,000,000 shares authorized, 12,833,674 shares issued at December 31, 1994 and 1993; 12,741,870 and 12,731,556 shares outstanding at December 31, 1994 and 1993, respectively) 128 128 Additional paid-in capital 7,295 8,411 Retained earnings 57,383 52,303 ------------------------------------------------------------------------------------------------------------ Total stockholders' investment 64,806 60,842 ------------------------------------------------------------------------------------------------------------ Total Liabilities and Stockholders' Investment $243,814 $244,536 ============================================================================================================
The accompanying notes to the consolidated financial statements are an integral part of these statements. 17 THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES ($ IN THOUSANDS EXCEPT PER SHARE DATA) CONSOLIDATED STATEMENTS OF CASH FLOWS
For the year ended December 31, 1994 1993 1992 ------------------------------------------------------------------------------------------------------------ Cash Flows From Operating Activities: Net income $ 5,080 $ 3,341 $ 1,478 Adjustments to reconcile net income to net cash flows provided by operating activities: Cumulative effect of change in accounting principle -- -- (3,670) Depreciation and amortization 16,886 16,308 18,639 Loss from disposal of plant and equipment 437 313 266 (Increase) decrease in: Accounts receivable (6,495) (1,176) 2,118 Inventories (495) 3,531 3,281 Other current assets 1,956 901 (5,236) Other assets (22) 242 3,378 Increase (decrease) in: Accounts payable and accrued expenses 6,383 6,495 6,532 Deferred income tax liability (1,727) (815) (2,672) Other liabilities 1,030 (981) 546 All other, net 415 238 139 ------------------------------------------------------------------------------------------------------------ Net cash flows provided by operating activities 23,448 28,397 24,799 ------------------------------------------------------------------------------------------------------------ Cash Flows From Investing Activities: Acquisition of Forecast Lighting -- -- (3,046) Purchase of plant and equipment (11,884) (10,261) (8,850) Proceeds from disposal of plant and equipment 620 144 102 ------------------------------------------------------------------------------------------------------------ Net cash flows used in investing activities (11,264) (10,117) (11,794) ------------------------------------------------------------------------------------------------------------ Cash Flows From Financing Activities: Tax benefit - Founders' shares -- -- 941 Sale of stock, net of tax benefit -- 97 105 Repayment of debt, net (10,372) (17,378) (12,185) ------------------------------------------------------------------------------------------------------------ Net cash flows used in financing activities (10,372) (17,281) (11,139) ------------------------------------------------------------------------------------------------------------ Effect of Exchange Rate Changes (1,891) (490) (1,333) ------------------------------------------------------------------------------------------------------------ Net increase (decrease) in cash and cash equivalents (79) 509 533 Cash and cash equivalents at beginning of year 3,319 2,810 2,277 ------------------------------------------------------------------------------------------------------------ Cash and cash equivalents at end of year $ 3,240 $ 3,319 $ 2,810 ============================================================================================================ Supplemental Disclosure Of Cash Flow Information Cash paid during the year for: Interest $ 7,537 $ 6,787 $ 8,795 ============================================================================================================ Income taxes $ 3,358 $ 1,652 $ 3,130 ============================================================================================================
The accompanying notes to the consolidated financial statements are an integral part of these statements. 18 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' INVESTMENT THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES ($ IN THOUSANDS)
Common Additional Retained Stock Paid-in Capital Earnings ----------------------------------------------------------------------------------------------------------- Balance, December 31, 1991 $128 $10,765 $47,484 ----------------------------------------------------------------------------------------------------------- NET INCOME -- -- 1,478 Foreign currency translation adjustments -- (2,365) -- Tax benefit-- Founders' shares -- 941 -- Exercise of stock options -- 105 -- Balance, December 31, 1992 $128 $ 9,446 $48,962 ----------------------------------------------------------------------------------------------------------- Net income -- -- 3,341 Foreign currency translation adjustments -- (1,132) -- Exercise of stock options -- 100 -- Treasury stock -- (3) -- Balance, December 31, 1993 $128 $ 8,411 $52,303 ----------------------------------------------------------------------------------------------------------- Net income -- -- 5,080 Foreign currency translation adjustments -- (1,116) -- BALANCE, DECEMBER 31, 1994 $128 $ 7,295 $57,383 -----------------------------------------------------------------------------------------------------------
The accompanying notes to the consolidated financial statements are an integral part of these statements. REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS TO THE STOCKHOLDERS OF THE GENLYTE GROUP INCORPORATED: We have audited the accompanying consolidated balance sheets of The Genlyte Group Incorporated (a Delaware corporation) and subsidiaries as of December 31, 1994 and 1993, and the related consolidated statements of income, cash flows and stockholders' investment for each of the three years in the period ended December 31, 1994. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Genlyte Group Incorporated and subsidiaries as of December 31, 1994 and 1993, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1994 in conformity with generally accepted accounting principles. As discussed in Note (1) of Notes to the Consolidated Financial Statements, effective January 1, 1992, the Company changed its method of accounting for income taxes. /s/ Arther Anderson LLP New York, New York January 26, 1995 19 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ($ IN THOUSANDS EXCEPT PER SHARE DATA) (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION: The accompanying consolidated financial statements include the accounts of The Genlyte Group Incorporated and its subsidiaries ("Genlyte" or the "Company") after elimination of all material intercompany accounts and transactions. Certain prior year amounts have been reclassified to conform with the current year presentation. INVENTORIES: Inventories are stated at the lower of cost or market. Inventory costs include material, labor, and overhead. At December 31, 1994, approximately 59% of the consolidated inventories were valued on a first-in, first-out ("FIFO") basis. The remaining inventories were valued on a last-in, first-out ("LIFO") basis, which was approximately $5,594 and $4,267 greater than their FIFO basis at December 31, 1994 and 1993, respectively. PLANT AND EQUIPMENT: The Company provides for depreciation of plant and equipment principally on a straight line basis over the useful lives of the assets. Useful lives vary among the several classifications, as well as among the constituent items in each classification, but generally fall within the following ranges: Buildings ........................... 10-40 years Machinery and equipment .............. 3-10 years When property is sold or otherwise disposed of, the asset cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the Consolidated Statement of Income. Leasehold interests and improvements are amortized over the terms of the respective leases, or over their estimated useful lives, whichever is shorter. Maintenance and repairs are expensed as incurred.Renewals and betterments are capitalized and depreciated or amortized over the remaining useful lives of the respective assets. Accelerated methods of depreciation are used for income tax purposes, and appropriate provisions are made for the related deferred income taxes. COST IN EXCESS OF NET ASSETS OF PURCHASED BUSINESSES: Cost in excess of net assets of purchased businesses acquired prior to 1971 is not amortized since, in the opinion of management, there has been no diminution in value. For businesses acquired subsequent to 1970, the cost in excess of net assets, aggregating $9,568, is being amortized over 20-40 years. For the years ended December 31, 1994 and 1993, $2,541 and $2,387 have been amortized, respectively. RESEARCH AND DEVELOPMENT COSTS: Research and development costs are expensed as incurred. These expenses were $3,006 in 1994, $3,571 in 1993, and $3,516 in 1992. TRANSLATION OF FOREIGN CURRENCIES: Balance sheet accounts of foreign subsidiaries are translated at the rates of exchange in effect as of the balance sheet date. The cumulative effect of such adjustments were $2,585 and $1,470 at December 31, 1994 and 1993, respectively, and have been charged to the Additional paid-in capital account in Stockholders' Investment. Income and expenses are translated at the average exchange rates prevailing during the year. Gains or losses resulting from foreign currency transactions are included in net income. CASH EQUIVALENTS: For purposes of the Consolidated Statements of Cash Flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE: The Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes", which requires a change from the deferred method to the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. Under SFAS No. 109, the effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. Under the deferred method, deferred taxes were recognized using the tax rate applicable to the year of the calculation and were not adjusted for subsequent changes in tax rates. The Company elected to adopt SFAS No. 109 in 1992 and reported the cumulative effect of the change in the method of accounting for income taxes as of the beginning of the 1992 fiscal year in the Consolidated Statement of Income. FAIR VALUE OF FINANCIAL INSTRUMENTS: The carrying amount of cash equivalents, letters of credit, and long-term debt approximate fair value due to the short-term nature of the instruments and frequent repricing of long-term debt at market rates. (2) Tax Benefit -- Founders' Shares Certain employees of the Company purchased 2,000,000 restricted shares of Genlyte common stock in 1988. Prior to 1992 restrictions were lifted or expired on 2/3 of the shares. The remaining 1/3 expired in 1992, resulting in a tax benefit to the Company. (3) Earnings per Common Share Earnings per share are calculated utilizing the weighted average shares outstanding with the fully dilutive effect of outstanding stock options taken into account. 20 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED ($ IN THOUSANDS EXCEPT PER SHARE DATA) (4) Income Taxes The components of income before income taxes and the provision for income taxes are as follows: 1994 1993 1992 ---------------------------------------------------- INCOME (LOSS) BEFORE INCOME TAXES: Domestic $6,206 $4,256 $(3,062) Foreign 2,275 1,711 (580) ---------------------------------------------------- $8,481 $5,967 $(3,642) ==================================================== Provision (Benefit) for Income Taxes: Domestic: Currently payable 2,606 2,209 3,251 Deferred (5) (272) (4,523) Foreign: Currently payable 784 753 626 Deferred 16 (64) (804) ---------------------------------------------------- $3,401 $2,626 $(1,450) ==================================================== As discussed in Note (1), the Company adopted SFAS No. 109 as of January 1, 1992. The cumulative effect on prior years of this change in accounting principle was an increase in net income of $3,670 or $.29 per share and is reported separately in the Consolidated Statement of Income for the year ended December 31, 1992. Future U.S. income taxes have not been provided on the undistributed earnings of international operations since they have been indefinitely reinvested in those operations. At December 31, 1994, such earnings aggregated $16,873. At December 31, 1994, the Company had $226 of foreign tax credit carryforwards that will be available to reduce taxes in future years. Valuation reserves of $226 have been established for foreign tax credits which may expire prior to utilization. The provision for income taxes includes a deferred component which arose from the recording of certain items in different periods for financial reporting and income tax purposes. The sources of the domestic differences and the tax effect of each are as follows: 1994 1993 1992 ----------------------------------------------------------------- Depreciation $(1,186) $(1,273) $(1,376) Inventory Valuation (41) (237) (662) Facility Rationalization Reserve 1,500 105 (1,979) Pension Accruals (470) 270 (77) Bad Debt Reserve 82 464 (247) Other Accruals/Reserves 94 177 (375) Other, Net 16 222 193 ----------------------------------------------------------------- Total Domestic Deferred Tax Provision $ (5) (272) (4,523) ================================================================= In 1994, 1993, and 1992, the Company's effective tax rates were 40.1%, 44%, And 39.8%, Respectively, of income before income taxes. An analysis of the differences between the actual provision for income taxes and the provision at the U.S. Federal statutory tax rate is as follows: 1994 1993 1992 ---------------------------------------------------------- Statutory Federal Rate $ 2,883 $ 2,029 $(1,238) State and Local Taxes, Net of Federal Tax Benefit 543 535 145 Other, Net (25) 62 (357) ---------------------------------------------------------- Total Provision (Benefit) for Income Taxes $ 3,401 $ 2,626 $(1,450) ========================================================== (5) Long-Term Debt 1994 1993 ---------------------------------------------------- Revolving Credit Notes $78,000 $ 88,000 Industrial Revenue Bonds 10,500 10,500 OTHER 497 1,919 ---------------------------------------------------- $88,997 $100,419 Less: Current Maturities 45 7,060 ---------------------------------------------------- Total $88,952 $ 93,359 ==================================================== In 1994, Genlyte amended the Revolving Credit and Term Loan Agreement (the "Amended Agreement") to provide for a Revolving Credit Facility (the "Facility") of $125,000 reducing to $110,000 over a two year period. The total borrowing under the Facility as of December 31, 1994 was $78,000. In addition, the Company has issued approximately $10,000 of Letters of Credit which reduce the amount available to borrow under the Facility. The interest rate, at the option of the Company, is a floating rate related to either (1) a reference rate determined by the Agent bank, or (2) the London Interbank Offered Rate (LIBOR), plus a fixed spread. In November 1994, a three-year interest rate cap which limited the maximum interest rate to 9% on $75,000 of loans under the Facility expired and was not renewed. The Company pays a commitment fee on the unused portion of the Facility. The Facility converts to a term loan on July 1, 1996 and is thereafter payable in installments through 1999. The amount outstanding under the Facility is secured by liens on U.S. accounts receivable, inventories, and machinery and equipment, as well as the investments in certain subsidiaries of the Company. The approximate fair value of assets subject to lien at December 31, 1994 was $178,000. The terms of the Amended Agreement include various covenants which, among others, limit the amounts that can be expended for cash dividends and purchases of Company stock. The payment of dividends is prohibited until such time as the debt/equity ratio falls below 50%. Thereafter, the payment of dividends is further conditioned upon satisfaction of net income thresholds as set forth in the Amended Agreement. No dividends were payable in 1994 since the debt/equity ratio condition was not satisfied. At December 31, 1994 and 1993 the Company was in compliance with all provisions of the Amended Agreement. Funds generated from operations combined with amounts available under the Facility are expected to fulfill anticipated cash requirements for the Company through 1995. The Company has $10,500 of variable rate demand Industrial Revenue Bonds comprised of three issues of $5,000, $4,500, and $1,000 payable in 2010, 2009, 21 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED ($ IN THOUSANDS EXCEPT PER SHARE DATA) and 2009, respectively. During 1994, the average interest rate on these bonds was 4.4%. The bonds are backed by a bank's letter of credit for the life of the bonds to guarantee payment of the bonds on the Company's behalf. The letter of credit is subject to annual renewals by the bank. The bonds are also secured by liens on the related facilities and equipment. The Company has mortgages and other debt at interest rates of 4.8% to 9.1% due from 1995 through 2001. The annual maturity requirements for long-term debt are summarized as follows: Year Ending December 31 1996 $ 4,924 1997 19,553 1998 19,558 1999 34,266 2000 and thereafter 10,651 ---------------------------------------------------- Total Long-term Debt $88,952 ---------------------------------------------------- (6) Stock Options The Genlyte 1988 Stock Option Plan (the "Plan") was established in 1988 for the benefit of key employees and directors of Genlyte and its affiliates. The Plan provides that an aggregate of 2,000,000 shares of Genlyte Common Stock may be granted as non-qualified stock options, provided that no options may be granted if the number of shares of Genlyte Common Stock which may be issued upon the exercise of outstanding options would exceed the greater of 1,000,000 shares of Genlyte Common Stock or 10% of the issued and outstanding shares of Genlyte Common Stock. The option exercise prices are established by the Board of Directors of Genlyte and cannot be less than the higher of the book value or the fair market value of a share of common stock on the date of grant. There are two types of options issued to key employees under the Plan. Merit options are exercisable at the rate of 50% per year commencing two years after the date of the grant. Performance options are granted as incentives to certain key employees for attaining specific financial goals. Transactions under the Plan are summarized below: Option Price Shares Per Share ---------------------------------------------------------------- Outstanding December 31, 1991 562,096 $4.00-12.75 Granted 649,167 4.53- 6.88 Exercised (26,772) 4.00- 5.50 Cancelled (194,336) 4.00-12.75 ---------------------------------------------------------------- Outstanding December 31, 1992 990,155 $4.00-12.75 Granted 177,300 4.53- 6.50 Exercised (24,468) 4.00- 5.50 Cancelled (212,104) 4.00-12.75 ---------------------------------------------------------------- Outstanding December 31, 1993 930,883 $4.53-12.75 Granted 176,750 4.75- 5.50 Cancelled (94,250) 4.53-12.75 ---------------------------------------------------------------- Outstanding December 31, 1994 1,013,383 $4.53- 8.75 ---------------------------------------------------------------- At year-end 1994, there were 356,492 outstanding options currently exercisable. No accounting recognition is given to stock options until they are exercised, at which time Genlyte recognizes in Additional paid-in capital the tax benefit resulting from the difference between the option price and the fair market value of the common stock. (7) Preferred Stock Purchase Rights In August 1989, the Company declared a dividend of one preferred stock purchase right on each share of the Company's common stock. Under certain conditions, each right may be exercised to purchase one one-hundredth share of a new series of junior participating cumulative preferred stock at an exercise price of $75.00 per share. The right may only be exercised within ten (10) business days after a person or group of persons (the "Holder") acquire, or commence a tender offer to acquire, 20% or more of Genlyte's outstanding common stock, or upon declaration by the Board of Directors. Upon the acquisition by the Holder of 20% or more of the Company's outstanding common stock, each right would represent the right to purchase for $75.00, shares of the Company common stock with a market value of $150.00. The rights may be redeemed by the Company at a price of $.01 per right and can be amended by the Company's Directors during the ten (10) day period prior to the exercise date. These rights expire in 1999. The preferred stock purchased upon exercise of the rights will be entitled to a minimum annual preferential dividend of $1.00 and a minimum liquidation payment of $1.00 per one-hundredth share of the preferred stock. If the Company were to enter into certain business combination or disposition transactions with the Holder, each right would also be entitled to purchase for $75.00, shares of the Holder's common stock with a market value of $150.00. (8) Pension Plans Genlyte has several pension plans which cover the majority of its employees. The Genlyte Corporation Retirement Plan is the Company's principal retirement plan and covers most of the employees of the Company. Benefits under that plan are based on years of service and average compensation during five consecutive years within the last ten years of employment. The Company's pension plan assets consist primarily of publicly traded equity or debt securities. Pension costs under the Company's retirement plans are actuarially computed. Annual contributions are made to the plans in amounts approximately equal to the amounts accrued for pension expense. The Company's pension cost for 1994, 1993, and 1992 consists of the following: 1994 1993 1992 ------------------------------------------------------------------ Service cost benefits earned during the year $ 1,052 $ 1,247 $ 1,113 Interest cost on benefits earned in prior years 3,006 2,813 2,704 Actual return on plan assets (2) (2,984) (2,299) Net deferral (2,426) 569 (47) Amortization 289 319 312 ------------------------------------------------------------------ Net pension cost $ 1,919 $ 1,964 $ 1,783 ------------------------------------------------------------------ 22 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED ($ IN THOUSANDS EXCEPT PER SHARE DATA) At December 31, 1994 the Genlyte Corporation Retirement Plan had plan assets which exceeded accumulated benefit obligations. In addition, during 1994 several plans had accumulated benefit obligations which exceeded plan assets. At December 31, 1993 the accumulated benefit obligations of the plans exceeded plan assets. The following tables summarize the funded status of the Company's pension plans and the related amounts that are recognized as liabilities in the consolidated balance sheet: Assets Exceed Accumulated Benefits 1994 ----------------------------------------------------- Actuarial present value of benefit obligations: Vested benefit obligation $27,478 Non-vested benefit obligation 266 ----------------------------------------------------- Accumulated benefit obligation 27,744 Effect of estimated future increases in compensation 4,231 ----------------------------------------------------- Projected benefit obligation 31,975 Plan assets at fair value 28,744 ----------------------------------------------------- Projected benefit obligation in excess of plan assets (3,231) Unrecognized net obligation at adoption 669 Unrecognized net benefit since adoption (2,748) Unrecognized prior service cost (131) ----------------------------------------------------- Accrued pension liability as of December 31 $(5,441) ----------------------------------------------------- Accumulated Benefits Exceed Assets 1994 1993 -------------------------------------------------------------------------- Actuarial present value of benefit obligations: Vested benefit obligation $ 8,305 $ 39,646 Non-vested benefit obligation 213 705 -------------------------------------------------------------------------- Accumulated benefit obligation 8,518 40,351 Effect of estimated future increases in compensation 39 4,700 -------------------------------------------------------------------------- Projected benefit obligation 8,557 45,051 Plan assets at fair value 3,344 33,864 -------------------------------------------------------------------------- Projected benefit obligation in excess of plan assets (5,213) (11,187) Unrecognized net obligation at adoption 422 1,268 Unrecognized net (benefit) obligation since adoption (41) 947 Unrecognized prior service cost 1,151 939 -------------------------------------------------------------------------- Accrued pension liability as of December 31 $ (3,681) $ (8,033) -------------------------------------------------------------------------- The discount rates and rates of increase in future compensation levels used in determining the actuarial present value of the liabilities recognized on the consolidated balance sheet were 8% and 5%, respectively, at September 30, 1994 and 6.5% and 5%, respectively, at September 30, 1993. The expected long-term rate of return on plan assets was 8% at September 30, 1994 and 1993. The Company has a number of plans for hourly personnel, primarily union (single or multi-employer) pension plans, for which the Company's obligation is a defined contribution amount. The basis for the contribution includes union contract amounts, usually based on an amount per hour worked, and percentages of employee contributions. Expense amounts recorded under these plans were $491, $597, and $556 in 1994, 1993, and 1992, respectively. Genlyte also maintains several defined benefit plans covering substantially all employees of its Canadian subsidiary (Canlyte, Inc.). Net pension costs for this plan included the following: 1994 1993 1992 ---------------------------------------------------- Service cost benefits earned during the year $114 $103 $182 Interest cost on benefits earned in prior years 222 213 234 Actual return on plan assets (502) (478) (380) Net deferral 243 255 159 Amortization (4) (4) 6 ---------------------------------------------------- Net pension cost $ 73 $ 89 $201 ---------------------------------------------------- The funded status of the plan is as follows: 1994 1993 ------------------------------------------------------------------------ Actuarial present value of benefit obligations: Vested benefit obligation $ 2,654 $ 2,590 Non-vested benefit obligation 78 70 ------------------------------------------------------------------------ Accumulated benefit obligation 2,732 2,660 Effect of estimated future increases in compensation 263 262 ------------------------------------------------------------------------ Projected benefit obligation 2,995 2,922 Plan assets at fair value 3,525 3,376 ------------------------------------------------------------------------ Projected benefit obligation in excess of plan assets 530 454 Unrecognized net benefit at adoption (52) (59) Unrecognized net benefit since adoption (244) (256) ------------------------------------------------------------------------ Prepaid pension cost as of December 31 $ 234 $ 139 ------------------------------------------------------------------------ The discount rates and rates of increase in future compensation levels used in determining the actuarial present value of the projected benefit obligations were 8% and 5%, respectively, at December 31, 1994 and 7% and 4%, respectively, at December 31, 1993. The expected long-term rate of return on assets was 8% at December 31, 1994 and 7% at December 31, 1993. (9) Facility Rationalization Expense In the fourth quarter of 1992, the Company recorded a pre-tax charge of $6,150 to establish a reserve for the costs associated with the Company's decision to consolidate facilities and improve the manufacturing processes in its remaining plants. The Company's facility rationalization plan included: relocation of DFT's leased manufacturing and distribution operations in Cleveland, Ohio to an existing owned facility in Elgin, Illinois; closure of its Prodel operations in Quebec City, Canada, and sale of the existing building; downsizing of manufacturing and distribution facilities in Edison, New Jersey and Compton, California; and the transfer of 23 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED certain Lightolier Headquarters staff to Lightolier's expanded Fall River, Massachusetts facility. The company intended to complete all aspects of the facility rationalization plan during 1993, but union negotiations and construction at the Fall River facility created significant delays in implementation. As a result, charges against the reserve in 1993 totaled only $677 of which $390 required cash. During 1994, the Company charged an additional $4,575 against the reserve, using cash of approximately $4,081. Charges against the reserve during 1994 are summarized as follows: Category Charges ---------------------------------------------------- Personnel Relocation Costs $2,727 Severance Costs 1,250 Inventory Write-down 299 Plant and Equipment Write-down 286 ---------------------------------------------------- Other Costs 13 ---------------------------------------------------- Total $4,575 ---------------------------------------------------- Location Charges ---------------------------------------------------- Elgin $2,326 Headquarters 1,340 Prodel 909 Total $4,575 ---------------------------------------------------- Proceeds from the sale of the Prodel facility were received in September 1994. The Company expects the facility rationalization plan to generate operating profit improvements, primarily representing labor cost savings, in excess of $4,400 per year beginning in 1995; specific results will be difficult to measure as operating efficiencies may occur for reasons not directly associated with the consolidation process. The margin improvements in 1994 were offset by indirect costs and inefficiencies resulting from relocation. The remaining $898 of the reserve will be utilitized in 1995. (10) Lease Commitments The Company rents office space, equipment, and computers under noncancellable operating leases. Rental expense during 1994, 1993, and 1992 amounted to $4,828, $4,746, and $4,913, respectively. Future required minimum rental payments as of December 31, 1994 were as follows: 1995 $ 4,595 1996 2,801 1997 1,530 1998 1,248 1999 1,092 AFTER 1999 4,453 ----------------------------------------------------- Total $15,719 ----------------------------------------------------- (11) Contingencies Genlyte is a defendant in various lawsuits. In particular, the Company has been named as one of a number of corporate and individual defendants in several actions commenced in August 1993 in the U.S. District Court in New York. The actions are on behalf of a purported class of alleged creditors of Keene Corporation ("Keene"), seeking from the defendants damages of an unspecified amount, rescission of certain asset sale and stock transactions, and other relief. With respect to Genlyte, the complaint principally maintains that certain lighting assets of Keene were sold to Genlyte in 1984 at less than fair value while both Keene and Genlyte were wholly-owned subsidiaries of Bairnco Corporation. The suits also allege that Genlyte, and the other corporate defendants, were successors to and alter egos of Keene. These cases remain stayed by order of the United States Bankruptcy Court due to the December 1993 filing by Keene of a petition for reorganization pursuant to Chapter 11 of the Bankruptcy Code. In April 1994, an independent Examiner was appointed by the Bankruptcy Court in the Keene bankruptcy proceeding to investigate the viability of the claims asserted in the stayed cases and the applicability of statutes of limitations to bar such claims. A preliminary report by the Examiner addressing the issues was released on September 23, 1994. Such report has been submitted to the Bankruptcy Court for further proceedings on or after March 30, 1995. Additionally, the Company is a defendant and/or potentially responsible party with other companies in actions and proceedings under state and federal environmental laws including the federal Comprehensive Environmental Response Compensation and Liability Act, as amended ("Superfund"). Such actions include, but are not limited to, the Keystone Sanitation Landfill site located in Pennsylvania, in which the United States Environmental Protection Agency has sought remedial action and reimbursement for past costs. Management does not believe that the disposition of the lawsuits and/or proceedings will have a material effect on the Company's financial condition or results of operations. (12) Geographical Information The Company has operations throughout North America. Information about the Company's operations by geographical area for the years ended December 31, 1994, 1993, and 1992, is as follows: Net Operating Sales Profit Assets ---------------------------------------------------- 1994 United States $374,677 $18,262 $214,433 Foreign 58,013 2,193 29,381 ---------------------------------------------------- Total $432,690 $20,455 $243,814 ---------------------------------------------------- 1993 United States $368,489 $16,994 $214,595 Foreign 60,654 2,333 29,941 ---------------------------------------------------- Total $429,143 $19,327 $244,536 ---------------------------------------------------- 1992 United States $364,078 $ 9,414 $224,147 Foreign 61,310 164 32,777 ---------------------------------------------------- Total $425,388 $ 9,578 $256,924 ---------------------------------------------------- 24 [PICTURE SHOWING THE BOARD OF DIRECTORS] Board of Directors (back row): FRANK METZGER, DAVID M. ENGELMAN, GLENN W. BAILEY, ROBERT B. CADWALLADER; (seated): FRED HELLER, AVRUM I. DRAZIN, LARRY K. POWERS CORPORATE DIRECTORY BOARD OF AVRUM I. DRAZIN+ ROBERT B. CADWALLADER FRED HELLER DIRECTORS Chairman President Chairman Emeritus The Genlyte Group Incorporated Cadwallader Company Inc. & The Genlyte Group Incorporated President Cadwallader Fabrics Inc. Canlyte Incorporated FRANK METZGER DAVID M. ENGELMAN President LARRY K. POWERS+ Director Metzger & Company President and Chief Executive Officer The Genlyte Group Incorporated The Genlyte Group Incorporated GLENN W. BAILEY Chairman Keene Corporation EXECUTIVE STEVEN R. CARSON NEIL M. BARDACH* DENNIS MUSSELMAN COMMITTEE Vice President and General Manager Vice President and Vice President and General Manager Controls Chief Financial Officer Hadco ZIA EFTEKHAR CHARLES M. HAVERS GEORGE O'DONNELL President President Vice President and General Manager Lightolier Supply Division, Wide-Lite/Bronzelite including + Also an officer and member of Stonco, Crescent, and ExceLine DONNA R. RATLIFF* the Executive Committee. Vice President - Administration * Also an officer of the company. RENE MARINEAU And Corporate Secretary President Lightolier/CFI
GENLYTE LIGHTING THE WAY -- TOGETHER [PICTURE SHOWING BOARDWALK] We are customer focused and we will strive to meet or exceed the expectations of our customers. -------------------------------------------- We value and respect each employee as an individual--we listen to, trust, and serve each other. -------------------------------------------- We believe that all employees are entitled to fair treatment, a safe and healthy work environment, the opportunity to grow, and an honest day's pay for an honest day's work. We strive to promote from within. -------------------------------------------- We have a sense of urgency and will respond to problems and opportunities immediately. -------------------------------------------- We are committed to the development of a well trained and motivated sales organization to best serve the needs of our customers. -------------------------------------------- We deliver high quality products on time, and we always stand behind them. -------------------------------------------- We design and manufacture innovative products and provide superior lighting solutions. -------------------------------------------- We are cost conscious with regard to our business decisions and our expenditures. -------------------------------------------- We operate in a global market and must be a low cost producer in order to compete. -------------------------------------------- We must provide our stockholders with a fair rate of return on their investments. -------------------------------------------- We adopt total quality management concepts and strive for continuous improvements in all aspects of our operations. -------------------------------------------- We focus on the vital few--those activities, customers, products, and processes which provide the greatest return. EX-21 7 SUBSIDIARIES OF THE REGISTRANT EXHIBIT 21 SUBSIDIARIES OF THE REGISTRANT The Genlyte Group Incorporated does business under the names Lightolier, Forecast, Stonco, Crescent, Hadco, Wide-Lite, Bronzelite, Diamond F, Timely, and Exceline. Genlyte has the following subsidiaries: 1. Canlyte, Inc., a Canadian Corporation. Canlyte does business under the names Lightolier, Prodel, Keene- Widelite, Stonco, Elyte and CFI (Canadian Fluorescent Industries). 2. Diaman-Mexo, S.A. de C.V., a Mexican Corporation. 3. Lightolier de Mexico, S.A. de C.V., a Mexican Corporation 4. The Lighting Group Inc., a New York Corporation EX-23 8 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS EXHIBIT 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS TO THE GENLYTE GROUP INCORPORATED: As independent public accountants, we hereby consent to the incorporation of (a) our report dated January 26, 1995 included in The Genlyte Group Incorporated's (the "Company's") Annual Report to Shareholders for the year ended December 31, 1994 into the Company's Annual Report on Form 10-K for the year ended December 31, 1994 (the "Form 10-K") and (b) our reports dated January 26, 1995 included and incorporated into the Form 10-K, into the Company's previously filed Registration Statements on Form S-8 (Registration No.'s: 33-30722 and 33-27190). ARTHUR ANDERSEN LLP New York, New York March 23, 1995 EX-27 9 FDS--10-K--12/31/94
5 1,000 12-MOS DEC-31-1994 DEC-31-1994 3,240 0 69,037 3,551 84,338 160,968 220,853 151,958 243,814 70,618 88,952 128 0 0 64,678 243,814 432,690 432,690 302,643 302,643 114,061 0 7,505 8,481 3,401 5,080 0 0 0 5,080 0.40 0.40