Exhibit 99.1
| | The Genlyte Group Incorporated |
| | 10350 Ormsby Park Place, Suite 601 |
| | Louisville, KY 40223 |
News Release | | For Immediate Release |
Contact: William G. Ferko, CFO
(502) 420-9502
GENLYTE ANNOUNCES RECORD SALES AND EARNINGS IN 2003
Louisville, KY February 10, 2004—The Genlyte Group Incorporated (NASDAQ: GLYT) today announced that its fourth quarter net sales grew to $269.1 million, an 11.1% increase from the fourth quarter of 2002, generating earnings per share of $0.87, a 10.1% increase over 2002 and the highest fourth quarter earnings per share in Genlyte’s history. For the full year, the Company reported record net sales of $1.034 billion and record earnings per share of $3.41. This compares to $970.3 million and $3.01 per share last year, increases of 6.6% and 13.3%, respectively.
Chairman, President and Chief Executive Officer Larry Powers said, “We are pleased to report sales and earnings per share increases in the fourth quarter. Sales and earnings both grew more than 10%, despite continued softness in the commercial construction markets. Earnings did not grow at the same pace as sales due primarily to cost increases related to health insurance and facility consolidation expenses.
“For the full year 2003, sales increased 6.6% to $1.034 billion and earnings per share increased 13.3% to $3.41. This is our 11th consecutive record annual earnings per share increase. These record earnings include $0.19 per share gain from successful litigation. Without the litigation settlement and associated costs, earnings per share would have been up 7.0% from 2002. Gross margin improved slightly over 2002 due to a combination of a small realized price increase and additional manufacturing efficiencies. The improvements in gross margin, however, were offset by a slight increase in operating expenses. We incurred increased selling expenses associated with increased sales, and a $3.4 million loss related to translation of foreign currency transactions.
“Our recent Vari-Lite and Shakespeare acquisitions provided incremental fourth quarter sales of $16.4 million and full year sales of $48.6 million compared to last year. Sales for comparable operations excluding acquisitions were up 4.4% for the quarter and 1.5% for the full year.
“During the last year we completed several facility consolidations, including distribution centers in Illinois, manufacturing facilities in Tennessee, New Jersey, and Texas and data center operations in Mississippi.
“We continue to highlight our new products as one of our keys to success. Our Controls division successfully introduced the Vari-Lite VL3000 series, and that division’s Entertainment Technology Intelligent Raceway and Bak Pak products won lighting product of the year EDDY Awards. Our Lightolier and Gardco divisions won ACE (Architects Choice for Excellence) Awards from both Architectural Lighting magazine and Architecture magazine for the second year in a row.
“Looking forward, we expect that our primary commercial construction markets may begin to improve in the second half of 2004 although we do not anticipate seeing much of the benefit until 2005. We anticipate the continued trend of soft sales for our stock products while project business is improving for some of our divisions. However, we do expect 2004 to be another very challenging year. We will do everything we can to maintain performance by continuing to control costs, introduce new products, and grow sales.”
Vice President and Chief Financial Officer Bill Ferko said, “In addition to our earnings performance, we are pleased with the cash flow results that we achieved in 2003. During the fourth quarter we generated $36.5
million cash from operations less $4.5 million for plant and equipment investments, compared with the fourth quarter of 2002 when we generated $31.1 million of cash from operations less $4.5 million for plant and equipment investments. The full year cash from operations of a record $101.2 million has funded $20.4 million for acquisitions, $17.6 million for capital expenditures, and debt reductions of $27.4 million. Working capital excluding cash and short-term investments was $158.8 million, or 14.8% of fourth quarter annualized sales compared to $147.9 million or 15.3% in 2002. Accounts receivable and inventories increased from prior year-end by $11.8 million and $7.4 million, respectively, primarily due to acquisitions.
“We closed 2003 with total debt of $11.5 million compared to $37.1 million in 2002. Our net cash and short-term investments less debt position improved to a positive $141.1 million compared to a positive $74.8 million in 2002.”
Live audio of Genlyte’s conference call with securities analysts, scheduled for 11 a.m. EDT on February 10, can be accessed from the investor relations section of Genlyte’s website (http://www.genlyte.com) or from www.vcall.com. An audio replay of the call will be available for 90 days.
The Genlyte Group Incorporated (Nasdaq: GLYT) holds a 68% interest in Genlyte Thomas Group LLC, which is a leading manufacturer of lighting fixtures and controls for the commercial, industrial and residential markets. Genlyte Thomas sells products under the major brand names of Capri, Chloride Systems, Crescent, Day-Brite, Gardco, Hadco, Ledalite, Lightolier, Lightolier Controls, Lumec, Shakespeare Composite Structures, Stonco, Thomas, Vari-Lite and Wide-Lite in the United States and Canlyte and Thomas in Canada.
The statements in this report with respect to future results, future expectations, and plans for future activities and synergies may be regarded as forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and actual results may differ materially from those currently expected. They are subject to various risks, such as the ability of the Company to meet new business sales goals, customer acceptance of new product offerings, fluctuations in commodity prices, slowing of the overall economy, weakness in the construction markets, increased interest costs arising from a change in the Company’s leverage or change in rates, failure of the Company’s plans to produce anticipated cost savings, and the timing and magnitude of capital expenditures, as well as other risks discussed in the company’s filing with the Securities Exchange Commission. The Company makes no commitment to disclose any revision to forward-looking statements, or any facts, events, or circumstances after the date hereof that may bear upon forward-looking statements.
The Genlyte Group Incorporated
Consolidated Condensed Statements of Income
(Amounts in thousands, except earnings per share data)
For the three months ended
| | December 31, 2003 | | December 31, 2002 | | % Change | |
| | | | | | | |
Net Sales | | $ | 269,104 | | $ | 242,243 | | 11.1 | % |
| | | | | | | |
Operating Profit* | | 27,962 | | 25,352 | | 10.3 | % |
| | | | | | | |
Net Income | | 11,937 | | 10,767 | | 10.9 | % |
| | | | | | | |
Earnings Per Share | | .87 | | .79 | | 10.1 | % |
| | | | | | | |
Average Shares Outstanding | | 13,744 | | 13,648 | | 0.7 | % |
| | | | | | | | | |
* Operating Profit is before deducting minority interest of $8,653 and $7,943 for the three months ended December 31, 2003 and December 31, 2002, respectively.
For the years ended
| | December 31, 2003 | | December 31, 2002 | | % Change | |
| | | | | | | |
Net Sales | | $ | 1,033,899 | | $ | 970,304 | | 6.6 | % |
| | | | | | | |
Operating Profit* | | 108,252 | | 96,418 | | 12.3 | % |
| | | | | | | |
Net Income | | 46,349 | | 41,120 | | 12.7 | % |
| | | | | | | |
Earnings Per Share | | 3.41 | | 3.01 | | 13.3 | % |
| | | | | | | |
Average Shares Outstanding | | 13,597 | | 13,668 | | -0.5 | % |
| | | | | | | | | |
* Operating Profit is before deducting minority interest of $32,594 and $29,245 for the years ended December 31, 2003 and December 31, 2002, respectively.
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except earnings per share data)
(Preliminary)
| | Three Months Ended
December 31, | | Twelve Months Ended
December 31, | |
| | 2003 | | 2002 | | 2003 | | 2002 | |
Net sales | | $ | 269,104 | | $ | 242,243 | | $ | 1,033,899 | | $ | 970,304 | |
Cost of sales | | 173,709 | | 156,486 | | 671,322 | | 630,433 | |
Gross profit | | 95,395 | | 85,757 | | 362,577 | | 339,871 | |
Selling and administrative expenses | | 67,206 | | 60,183 | | 261,246 | | 242,602 | |
Gain on settlement of patent litigation | | — | | — | | (8,000 | ) | — | |
Amortization of intangible assets | | 227 | | 222 | | 1,079 | | 851 | |
Operating profit | | 27,962 | | 25,352 | | 108,252 | | 96,418 | |
Interest (income) expense, net | | (259 | ) | (125 | ) | (324 | ) | 213 | |
Minority interest, net of income taxes | | 8,653 | | 7,943 | | 32,594 | | 29,245 | |
Income before income taxes | | 19,568 | | 17,534 | | 75,982 | | 66,960 | |
Income tax provision | | 7,631 | | 6,767 | | 29,633 | | 25,840 | |
Net income | | $ | 11,937 | | $ | 10,767 | | $ | 46,349 | | $ | 41,120 | |
| | | | | | | | | |
Earnings per share: | | | | | | | | | |
Basic | | $ | 0.88 | | $ | 0.80 | | $ | 3.44 | | $ | 3.04 | |
Diluted | | $ | 0.87 | | $ | 0.79 | | $ | 3.41 | | $ | 3.01 | |
| | | | | | | | | |
Weighted average number of shares outstanding: | | | | | | | | | |
Basic | | 13,541 | | 13,522 | | 13,480 | | 13,535 | |
Diluted | | 13,744 | | 13,648 | | 13,597 | | 13,668 | |
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
(Preliminary)
| | As of December 31, | |
| | 2003 | | 2002 | |
Assets: | | | | | |
Current Assets: | | | | | |
Cash and cash equivalents | | $ | 111,035 | | $ | 71,456 | |
Short-term investments | | 41,580 | | 40,450 | |
Accounts receivable, less allowances for doubtful accounts of $13,456 and $12,838, as of December 31, 2003 and 2002 | | 160,111 | | 148,279 | |
Inventories | | 143,898 | | 136,470 | |
Deferred income taxes and other current assets | | 28,602 | | 27,915 | |
Total current assets | | 485,226 | | 424,570 | |
Property, plant and equipment, at cost: | | | | | |
Land and land improvements | | 8,211 | | 7,447 | |
Buildings and leasehold improvements | | 88,718 | | 81,764 | |
Machinery and equipment | | 290,578 | | 276,600 | |
Total property, plant and equipment | | 387,507 | | 365,811 | |
Less: accumulated depreciation and amortization | | 275,883 | | 258,235 | |
Net property, plant and equipment | | 111,624 | | 107,576 | |
Goodwill | | 150,532 | | 134,231 | |
Other intangible assets, net of accumulated amortization | | 21,315 | | 22,195 | |
Other assets | | 5,028 | | 3,841 | |
Total Assets | | $ | 773,725 | | $ | 692,413 | |
| | | | | |
Liabilities & Stockholders’ Equity: | | | | | |
Current Liabilities: | | | | | |
Current maturities of long-term debt | | $ | 284 | | $ | 4,100 | |
Accounts payable | | 98,114 | | 87,568 | |
Accrued expenses | | 75,431 | | 73,133 | |
Total current liabilities | | 173,829 | | 164,801 | |
Long-term debt | | 11,190 | | 33,028 | |
Deferred income taxes | | 35,577 | | 32,935 | |
Minority interest | | 159,632 | | 133,789 | |
Accrued pension | | 27,567 | | 25,406 | |
Other long-term liabilities | | 8,562 | | 8,469 | |
Total liabilities | | 416,357 | | 398,428 | |
Commitments and contingencies | | | | | |
Stockholders’ Equity: | | | | | |
Common stock ($.01 par value, 30,000,000 shares authorized; 14,481,426 and 14,355,506 shares issued as of December 31, 2003 and 2002; 13,573,395 and 13,447,287 shares outstanding as of December 31, 2003 and 2002) | | 136 | | 135 | |
Additional paid-in capital | | 12,988 | | 9,451 | |
Retained earnings | | 314,420 | | 268,071 | |
Accumulated other comprehensive income | | 29,824 | | 16,328 | |
Total stockholders’ equity | | 357,368 | | 293,985 | |
Total Liabilities & Stockholders’ Equity | | $ | 773,725 | | $ | 692,413 | |
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Preliminary)
| | For the years ended December 31, | |
| | 2003 | | 2002 | |
Cash Flows From Operating Activities: | | | | | |
Net income | | $ | 46,349 | | $ | 41,120 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | |
Depreciation and amortization | | 24,207 | | 23,169 | |
Net loss (gain) from disposals of property, plant and equipment | | 1,131 | | 1,010 | |
Provision for deferred income taxes | | 1,573 | | 2,769 | |
Minority interest | | 25,666 | | 10,465 | |
Changes in assets and liabilities, net of effect of acquisitions: | | | | | |
(Increase) decrease in: | | | | | |
Accounts receivable | | (3,261 | ) | (5,470 | ) |
Inventories | | (663 | ) | 2,069 | |
Deferred income taxes and other current assets | | (41 | ) | 465 | |
Intangible and other assets | | (2,778 | ) | 8,195 | |
Increase (decrease) in: | | | | | |
Accounts payable | | 6,244 | | 4,463 | |
Accrued expenses | | (352 | ) | 2,729 | |
Deferred income taxes, long-term | | 235 | | (6,428 | ) |
Accrued pension and other long-term liabilities | | 1,927 | | 1,318 | |
All other, net | | 920 | | 486 | |
Net cash provided by operating activities | | 101,157 | | 86,360 | |
Cash Flows From Investing Activities: | | | | | |
Acquisitions of businesses, net of cash received | | (20,350 | ) | (10,641 | ) |
Purchases of property, plant and equipment | | (17,559 | ) | (18,912 | ) |
Proceeds from sales of property, plant and equipment | | 31 | | 1,807 | |
Purchases of short-term investments, net | | (1,130 | ) | (29,686 | ) |
Net cash used in investing activities | | (39,008 | ) | (57,432 | ) |
Cash Flows From Financing Activities: | | | | | |
Proceeds from long-term debt | | — | | — | |
Repayments of long-term debt | | (27,410 | ) | (3,318 | ) |
Purchases of treasury stock | | — | | (6,789 | ) |
Exercise of stock options | | 2,713 | | 4,144 | |
Net cash used in financing activities | | (24,697 | ) | (5,963 | ) |
Effect of exchange rate changes on cash and cash equivalents | | 2,127 | | (534 | ) |
Net increase in cash and cash equivalents | | 39,579 | | 22,431 | |
Cash and cash equivalents at beginning of year | | 71,456 | | 49,025 | |
Cash and cash equivalents at end of year | | $ | 111,035 | | $ | 71,456 | |
| | | | | |
Supplemental Disclosure of Cash Flow Information: | | | | | |
Cash paid (received) during the year for: | | | | | |
Interest (received) paid, net | | $ | (129 | ) | $ | 1,013 | |
Income taxes, net of refunds of $823 in 2003 and $289 in 2002 | | $ | 30,453 | | $ | 20,742 | |
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
SELECTED SEGMENT DATA
(Amounts in thousands)
(Preliminary)
| | Three Months Ended
December 31, | | Twelve Months Ended
December 31, | |
| | 2003 | | 2002 | | 2003 | | 2002 | |
Net sales: | | | | | | | | | |
Commercial segment | | $ | 200,693 | | $ | 176,475 | | $ | 772,888 | | $ | 710,168 | |
Residential segment | | 32,645 | | 34,698 | | 129,488 | | 132,378 | |
Industrial & other segment | | 35,766 | | 31,070 | | 131,523 | | 127,758 | |
Total net sales | | $ | 269,104 | | $ | 242,243 | | $ | 1,033,899 | | $ | 970,304 | |
| | | | | | | | | |
Operating profit: | | | | | | | | | |
Commercial segment | | $ | 19,868 | | $ | 18,136 | | $ | 77,603 | | $ | 69,516 | |
Residential segment | | 4,549 | | 4,424 | | 17,937 | | 15,848 | |
Industrial & other segment | | 3,545 | | 2,792 | | 12,712 | | 11,054 | |
Total operating profit | | $ | 27,962 | | $ | 25,352 | | $ | 108,252 | | $ | 96,418 | |
