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 SECOND QUARTER EARNINGS OF $0.76 PER SHARE, UP 81%
Louisville, KY, July 19, 2005. The Genlyte Group Incorporated (NASDAQ: GLYT) today announced record second quarter earnings per share of $0.76, adjusted for the stock split during the second quarter, an 81.0% increase over the second quarter of 2004. The company also reported record second quarter net sales of $316.2 million and net income of $21.5 million. This compares to $301.4 million and $11.5 million, respectively, reported for the second quarter of 2004 and increases of 4.9% and 86.8%, respectively.
Chairman, President and CEO Larry Powers said, “We are pleased to report second quarter increases in both sales and earnings. Our focus on higher margin product lines and the market’s acceptance of price increases helped us achieve higher sales and gross margins for the second quarter. A stronger Canadian dollar over last year accounted for 1.5% or $4.6 million of our overall consolidated sales increase.
“Residential, commercial, HID and outdoor lighting sales improved somewhat from last year. Fluorescent unit sales trends are negative but have been partially offset by price increases. Our core commercial markets are at the beginning of a cyclical recovery that is expected to occur during the next two years.
“We are pleased with the second quarter gross margin increase to 37.3% compared to 35.7% last year. The operating profit margin increased during the second quarter to 12.0% from 9.0% last year. These margin increases are primarily attributed to the effective price increases. We are holding firm on the recently announced price increase, and we may have sacrificed some volume, particularly in the fluorescent category, as a result of our determination to maintain margins. In addition, we continue to strategically seek a better product mix with higher value-added products. Total order input during the quarter increased 6.0% over last year. Backlog is 3.3% above prior year.
“In addition to improved prices and gross margins, the increase in operating profit margin during the second quarter compared to last year can be partially explained by the reduction in legal expenses. Legal expenses were $1.3 million for the second quarter of 2005 or 83.6% lower than the $8.1 million of legal expenses in the second quarter of 2004.
“During the second quarter of 2005, the company recognized $0.6 million of severance, moving, and plant consolidation expenses related to the closure of its facility in San Leandro, California
and construction of a new facility in San Marcos, Texas. The company also recognized $0.2 million of expenses related to an unsuccessful acquisition attempt.
“We continue to see cumulative year-over-year cost increases in steel, freight, ballasts, audit fees, and interest rates. While the core Producer Price Index trend has flattened, recent energy related costs and the cumulative effect of cost increases from the last twelve months are a concern. We are encouraged by improvement in operating profit margin percentage, although higher costs remain a challenge. Key concerns in the near future are transportation and energy costs, interest rates and the uncertainty regarding continued growth of the U.S. economy. The commercial construction markets are forecasted to grow in 2005; however, unexpected economic changes could alter expectations. Our short-term plan is to control expenses and maintain the recent price increases while adding new products.
“The proposed U.S. Senate ‘Energy Policy Tax Incentives Act of 2005,’ which provides tax deductions for energy-efficient interior lighting systems, will hopefully spur demand for our new energy-efficient products and enable us to help our country deal with increasing energy costs. However, we are concerned that the House version of the proposed Energy Bill does not provide significant incentives for more energy-efficient buildings. We are hopeful that the House and Senate Conference Committee will reach a compromise that supports the energy-efficient commercial building tax deduction.”
Vice President and Chief Financial Officer Bill Ferko stated, “During the quarter cash flow from operations less plant and equipment investments provided $13.9 million compared to the same quarter last year when we generated $12.2 million. Cash funding for the new San Marcos, Texas facility was $6.2 million during the second quarter and $12.6 million year-to-date. The facility is scheduled for completion during the 3rd quarter. Working capital increased during the second quarter by $0.6 million to $160.1 million. However, as a percentage of sales the combination of accounts receivable and inventory less accounts payable is 20.4% of annualized sales compared to 20.8% of sales at June of last year.
“Our balance sheet remains very strong. We closed the second quarter with cash and short-term investments of $67.8 million and debt of $245.0 million, or a net debt position of $177.2 million, compared to first quarter 2005 net debt of $190.2, and $168.9 million at the end of 2004.
“Quarterly earnings improvements over 2004 also are attributed to the Company’s acquisition, at the close of business July 31, 2004, of the 32% minority interest in Genlyte Thomas Group LLC owned by Thomas Industries Inc. for cash plus transaction costs totaling approximately $402.1 million.”
Live audio of Genlyte’s conference call with securities analysts, scheduled for 11:00 a.m. EDT on July 19, 2005, 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 STATEMENTS OF INCOME
(Amounts in thousands, except earnings per share data)
(Unaudited & Preliminary)
| | For the three months ended | |
| | July 2, 2005 | | July 3, 2004 | | % Change | |
| | | | | | | |
Net Sales | | $ | 316,238 | | $ | 301,437 | | 4.9 | % |
| | | | | | | |
Operating Profit | | $ | 37,859 | | $ | 26,995 | | 40.2 | % |
| | | | | | | |
Net Income | | $ | 21,538 | | $ | 11,527 | | 86.8 | % |
| | | | | | | |
E.P.S. * | | $ | 0.76 | | $ | 0.42 | | 81.0 | % |
| | | | | | | |
Average Shares Outstanding * | | 28,379 | | 27,737 | | 2.3 | % |
* fully diluted, and adjusted for the May 23, 2005 two-for-one stock split.
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except earnings per share data)
(Unaudited & Preliminary)
| | For the six months ended | |
| | July 2, 2005 | | July 3, 2004 | | % Change | |
| | | | | | | |
Net Sales | | $ | 617,599 | | $ | 578,799 | | 6.7 | % |
| | | | | | | |
Operating Profit | | $ | 69,694 | | $ | 51,992 | | 34.0 | % |
| | | | | | | |
Net Income | | $ | 39,544 | | $ | 22,390 | | 76.6 | % |
| | | | | | | |
E.P.S. * | | $ | 1.40 | | $ | 0.81 | | 72.8 | % |
| | | | | | | |
Average Shares Outstanding * | | 28,292 | | 27,700 | | 2.1 | % |
* fully diluted, and adjusted for the May 23, 2005 two-for-one stock split.
The foregoing unaudited figures have been approved by the management of The Genlyte Group Incorporated for official release on the date indicated.
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS AND SIX MONTHS ENDED JULY 2, 2005 AND JULY 3, 2004
(Amounts in thousands, except earnings per share data)
(Unaudited and Preliminary)
| | Three Months Ended | | Six Months Ended | |
| | July 2, 2005 | | July 3, 2004 | | July 2, 2005 | | July 3, 2004 | |
Net sales | | $ | 316,238 | | $ | 301,437 | | $ | 617,599 | | $ | 578,799 | |
Cost of sales | | 198,326 | | 193,888 | | 390,421 | | 376,134 | |
Gross profit | | 117,912 | | 107,549 | | 227,178 | | 202,665 | |
Selling and administrative expenses | | 79,452 | | 80,321 | | 156,282 | | 150,208 | |
Amortization of intangible assets | | 601 | | 233 | | 1,202 | | 465 | |
Operating profit | | 37,859 | | 26,995 | | 69,694 | | 51,992 | |
Interest expense (income), net | | 2,381 | | 112 | | 4,763 | | (173 | ) |
Minority interest, net of income taxes | | 32 | | 7,995 | | 1 | | 15,461 | |
Income before income taxes | | 35,446 | | 18,888 | | 64,930 | | 36,704 | |
Income tax provision | | 13,908 | | 7,361 | | 25,386 | | 14,314 | |
Net income | | $ | 21,538 | | $ | 11,527 | | $ | 39,544 | | $ | 22,390 | |
| | | | | | | | | |
Earnings per share: | | | | | | | | | |
Basic | | $ | 0.78 | | $ | 0.42 | | $ | 1.43 | | $ | 0.82 | |
Diluted | | $ | 0.76 | | $ | 0.42 | | $ | 1.40 | | $ | 0.81 | |
| | | | | | | | | |
Weighted average number of shares outstanding: | | | | | | | | | |
Basic | | 27,757 | | 27,229 | | 27,681 | | 27,192 | |
Diluted | | 28,379 | | 27,737 | | 28,292 | | 27,700 | |
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF JULY 2, 2005 AND DECEMBER 31, 2004
(Amounts in thousands)
(Preliminary)
| | (Unaudited) | | | |
| | July 2, | | December 31, | |
| | 2005 | | 2004 | |
Assets: | | | | | |
Current Assets: | | | | | |
Cash and cash equivalents | | $ | 67,031 | | $ | 56,233 | |
Short-term investments | | 824 | | 18,619 | |
Accounts receivable, less allowances for doubtful accounts of $13,046 and $10,724, as of July 2, 2005 and December 31, 2004 | | 205,457 | | 183,119 | |
Inventories | | 159,769 | | 150,077 | |
Deferred income taxes and other current assets | | 30,134 | | 31,381 | |
Total current assets | | 463,215 | | 439,429 | |
Property, plant and equipment, at cost | | 451,260 | | 434,790 | |
Less: accumulated depreciation and amortization | | 291,867 | | 281,316 | |
Net property, plant and equipment | | 159,393 | | 153,474 | |
Goodwill | | 252,899 | | 253,684 | |
Other intangible assets, net of accumulated amortization | | 113,818 | | 114,986 | |
Other assets | | 5,652 | | 4,097 | |
Total Assets | | $ | 994,977 | | $ | 965,670 | |
| | | | | |
Liabilities & Stockholders’ Equity: | | | | | |
Current Liabilities: | | | | | |
Short-term debt | | $ | 91,330 | | $ | 92,489 | |
Current maturities of long-term debt | | 20,252 | | 20,202 | |
Accounts payable | | 106,792 | | 114,887 | |
Accrued expenses | | 84,751 | | 93,496 | |
Total current liabilities | | 303,125 | | 321,074 | |
Long-term debt | | 133,460 | | 131,029 | |
Deferred income taxes | | 40,747 | | 40,156 | |
Minority interest | | 894 | | 910 | |
Accrued pension and other long-term liabilities | | 30,348 | | 29,513 | |
Total liabilities | | 508,574 | | 522,682 | |
Stockholders’ Equity: | | | | | |
Common stock | | 278 | | 138 | |
Additional paid-in capital | | 59,922 | | 54,148 | |
Retained earnings | | 412,217 | | 372,673 | |
Accumulated other comprehensive income | | 13,986 | | 16,029 | |
Total stockholders’ equity | | 486,403 | | 442,988 | |
Total Liabilities & Stockholders’ Equity | | $ | 994,977 | | $ | 965,670 | |
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JULY 2, 2005 AND JULY 3, 2004
(Amounts in thousands)
(Unaudited and Preliminary)
| | 2005 | | 2004 | |
Cash Flows From Operating Activities: | | | | | |
Net income | | $ | 39,544 | | $ | 22,390 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | |
Depreciation and amortization | | 15,497 | | 12,690 | |
Net loss (gain) from disposals of property, plant and equipment | | 168 | | (1,903 | ) |
Minority interest | | 2 | | 10,277 | |
Changes in assets and liabilities, net of effect of acquisitions: | | | | | |
(Increase) decrease in: | | | | | |
Accounts receivable | | (22,803 | ) | (45,998 | ) |
Inventories | | (10,045 | ) | (6,953 | ) |
Deferred income taxes and other current assets | | 1,196 | | (1,050 | ) |
Intangible and other assets | | (828 | ) | 228 | |
Increase (decrease) in: | | | | | |
Accounts payable | | (6,532 | ) | 9,273 | |
Accrued expenses | | (8,352 | ) | 1,457 | |
Deferred income taxes, long term | | 658 | | — | |
Accrued pension and other long-term liabilities | | 524 | | 1,137 | |
All other, net | | 2,704 | | 1,287 | |
Net cash provided by operating activities | | 11,733 | | 2,835 | |
| | | | | |
Cash Flows From Investing Activities: | | | | | |
Acquisition of business, net of cash received | | — | | (2,437 | ) |
Purchases of property, plant and equipment | | (21,223 | ) | (12,366 | ) |
Proceeds from sales of property, plant and equipment | | 2 | | 4,578 | |
Purchases of short-term investments | | (818 | ) | (43,145 | ) |
Proceeds from sales of short-term investments | | 18,146 | | 62,648 | |
Net cash (used in) provided by investing activities | | (3,893 | ) | 9,278 | |
| | | | | |
Cash Flows From Financing Activities: | | | | | |
Proceeds from short-term debt | | 5,846 | | — | |
Repayments of short-term debt | | (7,005 | ) | — | |
Proceeds from long-term debt | | 29,529 | | — | |
Repayments of long-term debt | | (27,049 | ) | (665 | ) |
Net decrease in disbursements outstanding | | (1,282 | ) | (1,481 | ) |
Exercise of stock options | | 3,440 | | 2,467 | |
Net cash provided by financing activities | | 3,479 | | 321 | |
Effect of exchange rate changes on cash and cash equivalents | | (521 | ) | 197 | |
Net increase in cash and cash equivalents | | 10,798 | | 12,631 | |
Cash and cash equivalents at beginning of period | | 56,233 | | 82,136 | |
Cash and cash equivalents at end of period | | $ | 67,031 | | $ | 94,767 | |
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
SELECTED SEGMENT DATA
FOR THE THREE MONTHS AND SIX MONTHS ENDED JULY 2, 2005 AND JULY 3, 2004
(Amounts in thousands)
(Unaudited and Preliminary)
| | Three Months Ended | | Six Months Ended | |
| | July 2, 2005 | | July 3, 2004 | | July 2, 2005 | | July 3, 2004 | |
Net sales: | | | | | | | | | |
Commercial segment | | $ | 234,978 | | $ | 227,218 | | $ | 457,222 | | $ | 431,439 | |
Residential segment | | 40,683 | | 36,395 | | 80,773 | | 71,756 | |
Industrial & other segment | | 40,577 | | 37,824 | | 79,604 | | 75,604 | |
Total net sales | | $ | 316,238 | | $ | 301,437 | | $ | 617,599 | | $ | 578,799 | |
| | | | | | | | | |
Operating profit: | | | | | | | | | |
Commercial segment | | $ | 27,480 | | $ | 20,225 | | $ | 49,445 | | $ | 37,446 | |
Residential segment | | 6,028 | | 3,798 | | 11,833 | | 7,929 | |
Industrial & other segment | | 4,351 | | 2,972 | | 8,416 | | 6,617 | |
Total operating profit | | $ | 37,859 | | $ | 26,995 | | $ | 69,694 | | $ | 51,992 | |
