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 FIRST QUARTER EARNINGS OF $1.28 PER SHARE, UP 64.1%
Louisville, KY, April 28, 2005. The Genlyte Group Incorporated (NASDAQ: GLYT) today announced record first quarter earnings per share of $1.28, a 64.1% increase over the first quarter of 2004. The Company also reported record first quarter net sales of $301.4 million and net income of $18.0 million. This compares to $277.4 million and $10.9 million reported for the first quarter of 2004 and increases of 8.7% and 65.8%, respectively.
Chairman, President and CEO Larry Powers said, “We are pleased to report first quarter increases in both sales and earnings. The combination of adding new products and maintaining previously announced price increases helped us achieve higher sales and gross margins for the 1st quarter. In addition, the Canadian dollar is 8% stronger this year than last year, and accounted for 1.2% or $3.7 million of our overall consolidated sales increase. Acquisitions did not significantly impact the 1st quarter sales improvements.
“Our residential and outdoor lighting sales exceeded expectations; however, certain parts of our business such as the commercial indoor fluorescent remain soft. Pricing for the indoor fluorescent products remains very competitive. We announced a 10% price increase last November covering all products including florescent. Although we have not achieved the full 10% price increase, the pricing in the indoor fluorescent business has improved by approximately 5% which has covered our cost increases. Clearly our results for the quarter would have been worse had we not refused to participate in lower margin business such as on-line auctions and multi-year bid projects with price reductions.
“We are pleased that our gross margin increased during the first quarter to 36.3% compared to 34.3% last year. The operating profit margin increased during the first quarter to 10.6% from 9.0% last year. These margin increases are primarily attributed to the price increases announced during May and November last year. In addition, the product mix of higher value-added products and our de-emphasis of lower margin business helped overall margins. Total order input during the quarter was relatively flat compared to last year and continued to decelerate during the quarter. Our backlog is 6% below prior year.
“We continue to see cost increases in steel, freight, ballasts, medical benefits, audit fees, and interest rates. While the Producer Price Index has increased about 4.9% since March 2004, many of our costs continue to grow at a much faster pace. We are encouraged by improvement in operating profit margin percentage, although higher costs are still eroding profits from our sales growth. Key concerns in the near future are interest rates and the U.S. economy. New
housing starts have softened in relation to prior year and previous quarters, which could impact sales in the residential market as well as commercial retail construction. The commercial construction markets are forecasted to grow in 2005, however, uncertainty in the economy could alter expectations. Our short-term plan is to control expenses while adding new products.”
First quarter results also improved due to The Genlyte Group Incorporated completing the acquisition, at the close of business July 31, 2004, of the 32% minority interest in Genlyte Thomas Group LLC (GTG) owned by Thomas Industries Inc. (NYSE: TII) for cash plus transaction costs of approximately $402.1 million.
Vice President and Chief Financial Officer Bill Ferko stated, “During the quarter we used $23.4 million cash for operations plus plant and equipment investments compared to the first quarter of last year when we used $21.7 million of cash. The first quarter traditionally has heavy cash needs for tax payments, distributor rebates and incentive compensation payments. In addition, the change in accounts receivable and inventories from year-end increased the cash used in operations by $18.1 million. Cash funds for capital investment include $6.6 million for the recently completed Cornwall, Ontario plant expansion and the new San Marcos, Texas facility scheduled for completion in the 3rd quarter.
“Our balance sheet remains very strong. We closed the first quarter of 2005 with cash and short-term investments of $68.4 million and debt of $258.5 million, or a net debt position of $190.1 million, compared to net debt at the end of 2004 of $168.9 million.”
Live audio of Genlyte’s conference call with securities analysts, scheduled for 1:00 p.m. EDT on April 28 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) controls a 100% interest in Genlyte Thomas Group LLC, which is a leading manufacturer of lighting fixtures, controls, and related products for the commercial, industrial and residential markets. Genlyte Thomas sells lighting and lighting accessory 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, Wide-Lite, and Canlyte.
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. These forward-looking statements are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “plans to,” “estimates,” “projects,” or similar expressions. Such future results are subject to various risks, such as the ability of the Company to meet new business sales goals and realize desired price increases, fluctuations in commodity and transportation prices, slowing of the overall economy, changes in foreign currency translation rates, 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, the outcome of pending litigation, 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.
For additional information about Genlyte please refer to the Company’s web site at: http://www.genlyte.com.
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Amounts in thousands, except earnings per share data)
(Unaudited and Preliminary)
| | For the three months ended | | | |
| | April 2, 2005 | | April 3, 2004 | | % Change | |
| | | | | | | |
Net Sales | | $ | 301,361 | | $ | 277,362 | | 8.7 | % |
| | | | | | | |
Operating Profit | | 31,835 | | 24,997 | | 27.4 | % |
| | | | | | | |
Net Income | | 18,006 | | 10,863 | | 65.8 | % |
| | | | | | | |
E.P.S.* | | $ | 1.28 | | $ | 0.78 | | 64.1 | % |
| | | | | | | |
Average Shares Outstanding* | | 14,119 | | 13,840 | | 2.0 | % |
* fully diluted
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED APRIL 2, 2005 AND APRIL 3, 2004
(Amounts in thousands, except earnings per share data)
(Unaudited and Preliminary)
| | 2005 | | 2004 | |
Net sales | | $ | 301,361 | | $ | 277,362 | |
Cost of sales | | 192,095 | | 182,246 | |
Gross profit | | 109,266 | | 95,116 | |
Selling and administrative expenses | | 76,830 | | 69,887 | |
Amortization of intangible assets | | 601 | | 232 | |
Operating profit | | 31,835 | | 24,997 | |
Interest (income) expense, net | | 2,382 | | (285 | ) |
Minority interest, net of income taxes | | (31 | ) | 7,466 | |
Income before income taxes | | 29,484 | | 17,816 | |
Income tax provision | | 11,478 | | 6,953 | |
Net income | | $ | 18,006 | | $ | 10,863 | |
| | | | | |
Earnings per share: | | | | | |
Basic | | $ | 1.30 | | $ | 0.80 | |
Diluted | | $ | 1.28 | | $ | 0.78 | |
| | | | | |
Weighted average number of shares outstanding: | | | | | |
Basic | | 13,815 | | 13,586 | |
Diluted | | 14,119 | | 13,840 | |
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF APRIL 2, 2005 AND DECEMBER 31, 2004
(Amounts in thousands)
(Preliminary)
| | (Unaudited) | | | |
| | April 2, | | December 31, | |
| | 2005 | | 2004 | |
Assets: | | | | | |
Current Assets: | | | | | |
Cash and cash equivalents | | $ | 67,527 | | $ | 56,233 | |
Short-term investments | | 826 | | 18,619 | |
Accounts receivable, less allowances for doubtful accounts of $12,311 and $10,724, as of April 2, 2005 and December 31, 2004 | | 192,126 | | 183,119 | |
Inventories | | 158,745 | | 150,077 | |
Deferred income taxes and other current assets | | 31,508 | | 31,381 | |
Total current assets | | 450,732 | | 439,429 | |
Property, plant and equipment, at cost | | 444,017 | | 434,790 | |
Less: accumulated depreciation and amortization | | 287,746 | | 281,316 | |
Net property, plant and equipment | | 156,271 | | 153,474 | |
Goodwill | | 253,241 | | 253,684 | |
Other intangible assets, net of accumulated amortization | | 114,392 | | 114,986 | |
Other assets | | 6,313 | | 4,097 | |
Total Assets | | $ | 980,949 | | $ | 965,670 | |
| | | | | |
Liabilities & Stockholders’ Equity: | | | | | |
Current Liabilities: | | | | | |
Short-term debt | | $ | 85,953 | | $ | 92,489 | |
Current maturities of long-term debt | | 20,289 | | 20,202 | |
Accounts payable | | 105,819 | | 114,887 | |
Accrued expenses | | 79,196 | | 93,496 | |
Total current liabilities | | 291,257 | | 321,074 | |
Long-term debt | | 152,302 | | 131,029 | |
Deferred income taxes | | 40,118 | | 40,156 | |
Minority interest | | 870 | | 910 | |
Accrued pension and other long-term liabilities | | 29,641 | | 29,513 | |
Total liabilities | | 514,188 | | 522,682 | |
Commitments and contingencies | | | | | |
Stockholders’ Equity: | | | | | |
Common stock | | 139 | | 138 | |
Additional paid-in capital | | 59,557 | | 54,148 | |
Retained earnings | | 390,679 | | 372,673 | |
Accumulated other comprehensive income | | 16,386 | | 16,029 | |
Total stockholders’ equity | | 466,761 | | 442,988 | |
Total Liabilities & Stockholders’ Equity | | $ | 980,949 | | $ | 965,670 | |
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED APRIL 2, 2005 AND APRIL 3, 2004
(Amounts in thousands)
(Unaudited and Preliminary)
| | 2005 | | 2004 | |
Cash Flows From Operating Activities: | | | | | |
Net income | | $ | 18,006 | | $ | 10,863 | |
Adjustments to reconcile net income to net cash used in operating activities: | | | | | |
Depreciation and amortization | | 7,753 | | 6,398 | |
Net loss (gain) from disposals of property, plant and equipment | | 78 | | (659 | ) |
Minority interest | | (30 | ) | 6,902 | |
Changes in assets and liabilities: | | | | | |
(Increase) decrease in: | | | | | |
Accounts receivable | | (9,267 | ) | (24,712 | ) |
Inventories | | (8,864 | ) | (3,972 | ) |
Deferred income taxes and other current assets | | (156 | ) | (285 | ) |
Intangible and other assets | | (149 | ) | 390 | |
Increase (decrease) in: | | | | | |
Accounts payable | | (8,616 | ) | (356 | ) |
Accrued expenses | | (14,085 | ) | (11,471 | ) |
Accrued pension and other long-term liabilities | | (25 | ) | 963 | |
All other, net | | 2,281 | | 514 | |
Net cash used in operating activities | | (13,074 | ) | (15,425 | ) |
Cash Flows From Investing Activities: | | | | | |
Purchases of property, plant and equipment | | (10,351 | ) | (6,258 | ) |
Proceeds from sales of property, plant and equipment | | — | | 474 | |
Purchases of short-term investments | | (820 | ) | (19,345 | ) |
Proceeds from sales of short-term investments | | 18,283 | | 35,082 | |
Net cash provided by investing activities | | 7,112 | | 9,953 | |
Cash Flows From Financing Activities: | | | | | |
Decrease in short-term debt, net | | (6,536 | ) | — | |
Proceeds from long-term debt | | 29,530 | | — | |
Repayments of long-term debt | | (8,170 | ) | (70 | ) |
Net decrease in disbursements outstanding | | (261 | ) | (2,673 | ) |
Exercise of stock options | | 3,109 | | 731 | |
Net cash provided by (used in) financing activities | | 17,672 | | (2,012 | ) |
Effect of exchange rate changes on cash and cash equivalents | | (415 | ) | (14 | ) |
Net increase (decrease) in cash and cash equivalents | | 11,294 | | (7,498 | ) |
Cash and cash equivalents at beginning of period | | 56,233 | | 82,136 | |
Cash and cash equivalents at end of period | | $ | 67,527 | | $ | 74,638 | |
| | | | | |
Supplemental Disclosure of Cash Flow Information: | | | | | |
Cash paid (received) during the period for: | | | | | |
Interest paid (received), net | | $ | 1,167 | | $ | (199 | ) |
Income taxes, net of refunds of $803 in 2005 and $3 in 2004 | | $ | 7,373 | | $ | 3,730 | |
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
SELECTED SEGMENT DATA
FOR THE THREE MONTHS ENDED APRIL 2, 2005 AND APRIL 3, 2004
(Amounts in thousands)
(Unaudited and Preliminary)
| | 2005 | | 2004 | |
Net sales: | | | | | |
Commercial segment | | $ | 222,244 | | $ | 204,221 | |
Residential segment | | 40,090 | | 35,361 | |
Industrial & other segment | | 39,027 | | 37,780 | |
Total net sales | | $ | 301,361 | | $ | 277,362 | |
| | | | | |
Operating profit: | | | | | |
Commercial segment | | $ | 21,965 | | $ | 17,221 | |
Residential segment | | 5,805 | | 4,131 | |
Industrial & other segment | | 4,065 | | 3,645 | |
Total operating profit | | $ | 31,835 | | $ | 24,997 | |
