UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2003
Commission File Number 1-5426
-----------------------------
THOMAS INDUSTRIES INC.
--------------------------------------------------------------------------------
(Exact name of Registrant as specified in its Charter)
DELAWARE 61-0505332
-------- ----------
(State of incorporation) (I.R.S. Employer Identification Number)
4360 BROWNSBORO ROAD, SUITE 300, LOUISVILLE, KENTUCKY 40207
----------------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
502/893-4600
--------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
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 whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2) Yes X No
--- ---
As of August 11, 2003, 17,221,169 shares of the registrant's Common Stock were
outstanding (net of treasury shares).
PART I. - FINANCIAL INFORMATION
ITEM 1. Financial Statements (Unaudited)
THOMAS INDUSTRIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(IN THOUSANDS EXCEPT AMOUNTS PER SHARE)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
------------------------- -------------------------
2003 2002 2003 2002
------------------------- -------------------------
Net sales $ 95,810 $ 49,928 $188,156 $ 95,985
Cost of products sold 62,050 31,919 121,281 61,081
------------------------- -------------------------
Gross profit 33,760 18,009 66,875 34,904
Selling, general and administrative
expenses 25,194 11,414 49,772 22,247
Equity income from GTG 6,887 7,522 13,030 13,524
------------------------- -------------------------
Operating income 15,453 14,117 30,133 26,181
Interest expense 1,026 560 2,112 1,179
Interest income and other income 94 43 55 285
------------------------- -------------------------
Income before income taxes and minority interest 14,521 13,600 28,076 25,287
Income taxes 5,079 4,964 9,821 9,230
------------------------- -------------------------
Income before minority interest 9,442 8,636 18,255 16,057
Minority interest, net of tax 10 -- 17 --
------------------------- -------------------------
Net income $ 9,432 $ 8,636 $ 18,238 $ 16,057
========================= =========================
Net income per share:
Basic $ 0.55 $ 0.57 $ 1.06 $ 1.05
Diluted $ 0.54 $ 0.54 $ 1.04 $ 1.02
Dividends declared per share: $ 0.095 $ 0.085 $ 0.18 $ 0.17
Weighted average number of shares outstanding:
Basic 17,179 15,276 17,159 15,260
Diluted 17,550 15,883 17,514 15,817
See notes to condensed consolidated financial statements.
THOMAS INDUSTRIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
(Unaudited)
June 30 December 31
2003 2002 *
---------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 17,728 $ 18,879
Accounts receivable, less allowance
(2003--$2,395; 2002--$2,270) 55,748 50,067
Inventories:
Finished products 27,716 23,108
Raw materials 19,935 17,722
Work in process 14,605 11,970
---------------------------------------------
62,256 52,800
Deferred income taxes 7,893 4,407
Other current assets 6,563 5,325
---------------------------------------------
Total current assets 150,188 131,478
Investment in GTG 203,554 188,810
Property, plant and equipment 166,489 153,751
Less accumulated depreciation and amortization (70,622) (62,160)
---------------------------------------------
95,867 91,591
Goodwill 54,670 55,669
Other intangible assets, net 20,547 19,299
Other assets 3,802 4,169
---------------------------------------------
Total assets $ 528,628 $ 491,016
=============================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 3,286 $ 1,460
Accounts payable 11,845 15,496
Accrued expenses and other current liabilities 27,644 21,442
Dividends payable 1,634 1,455
Income taxes payable 3,549 233
Current portion of long-term debt 9,509 9,362
---------------------------------------------
Total current liabilities 57,467 49,448
Deferred income taxes 7,053 5,163
Long-term debt, less current portion 103,888 104,047
Long-term pension liability 10,621 10,621
Other long-term liabilities 7,318 7,336
---------------------------------------------
Total liabilities 186,347 176,615
Minority interest 23 34
Shareholders' equity:
Preferred stock, $1 par value, 3,000,000 shares authorized - none issued - -
Common stock, $1 par value, shares authorized: 60,000,000; shares
issued: 2003 - 18,025,087; 2002 - 17,947,630 18,025 17,948
Capital surplus 135,582 133,964
Deferred compensation 1,159 846
Treasury stock held for deferred compensation (1,159) (846)
Retained earnings 200,498 185,351
Accumulated other comprehensive income (loss) 212 (10,837)
Less cost of 822,339 treasury shares (12,059) (12,059)
---------------------------------------------
Total shareholders' equity 342,258 314,367
---------------------------------------------
Total liabilities and shareholders' equity $ 528,628 $ 491,016
=============================================
* Derived from the audited December 31, 2002, consolidated balance sheet.
See notes to condensed consolidated financial statements.
3
THOMAS INDUSTRIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(DOLLARS IN THOUSANDS)
SIX MONTHS ENDED
JUNE 30
------------------------------
2003 2002
------------------------------
OPERATING ACTIVITIES $ 18,238 $ 16,057
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and intangible amortization 7,609 4,080
Deferred income taxes (1,755) (79)
Equity income from GTG (13,030) (13,524)
Distributions from GTG 3,250 2,860
Other items 151 446
Changes in operating assets and liabilities net of effect of acquisitions:
Accounts receivable (3,260) (4,509)
Inventories (5,929) (615)
Accounts payable (4,192) 556
Income taxes payable 3,275 (1,082)
Accrued expenses and other current liabilities 4,790 (90)
Other (1,861) (1,147)
------------------------------
Net cash provided by operating activities 7,286 2,953
INVESTING ACTIVITIES
Purchases of property, plant and equipment (6,544) (2,951)
Purchase of 20% minority interest of Italian subsidiary (1,534) -
Sales of property, plant and equipment 80 111
------------------------------
Net cash used in investing activities (7,998) (2,840)
FINANCING ACTIVITIES
Proceeds from short-term debt 1,820 -
Payments on long-term debt (12,990) (7,758)
Proceeds from long-term debt 12,000 -
Dividends paid (2,912) (2,591)
Other 1,028 452
------------------------------
Net cash used in financing activities (1,054) (9,897)
Effect of exchange rate changes 615 1,432
------------------------------
Net decrease in cash and cash equivalents (1,151) (8,352)
Cash and cash equivalents at beginning of period 18,879 29,500
------------------------------
Cash and cash equivalents at end of period $17,728 $21,148
==============================
See notes to condensed consolidated financial statements.
4
THOMAS INDUSTRIES INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note A - Basis of Presentation
------------------------------
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States for interim financial reporting and with the instructions to Form
10-Q and Article 10-01 of Regulation S-X. Accordingly, they do not include all
the information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements.
The results of operations for the six-month period ended June 30, 2003, are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2003. In the opinion of management, all adjustments considered
necessary for a fair presentation have been included. For further information,
refer to the consolidated financial statements and footnotes included in the
Company's Annual Report on Form 10-K for the year ended December 31, 2002.
Note B - Acquisition
--------------------
WERNER RIETSCHLE HOLDING GMBH ACQUISITION:
On August 29, 2002, the Company purchased substantially all the assets and
liabilities of Werner Rietschle Holding GmbH ("Rietschle"), a privately held
company based in Schopfheim, Germany. Rietschle has been a world leader in
vacuum and pressure technology, which includes dry running and oil-lubricated
pumps, blowers, compressors, and pressure/vacuum pumps utilizing rotary vane,
screw, roots and claw technologies. The purchase price consisted of $83.3
million in cash and 1,800,000 treasury shares of the Company's common stock. The
Company negotiated a $120.0 million revolving credit facility with a group of
banks to finance the cash portion of the purchase price, of which $85.0 million
was outstanding as of June 30, 2003. Rietschle's operating results are included
in the Company's results since the date of acquisition.
A tentative purchase price allocation was made and reflected in the June 30,
2003 financial statements. This allocation is preliminary as the Company
finalizes information, including appraisals, about the fair value of assets and
liabilities acquired. Accordingly, the amounts recorded will change as the
allocation is finalized.
Supplemental pro forma information below for the three and six months ended June
30, 2002, is presented as though the business combination had been completed as
of the beginning of the periods being reported on. The pro forma financial
information does not necessarily reflect the results of operations that would
have occurred if the Company and Rietschle constituted a single entity during
such periods.
(In thousands, except per share data) Three Months Ended Six Months Ended
June 30, 2002 June 30, 2002
------------- -------------
Net sales $84,986 $164,020
Net income $ 9,631 $ 17,938
Earnings per share - diluted $ .54 $ 1.02
5
The aggregate purchase price consists of (in thousands):
Cash $ 83,288
Fair value of Thomas common stock 44,754
Transaction costs 5,922
----------------
Total aggregate purchase price $133,964
================
The following summarizes the estimated fair values of the assets acquired and
liabilities assumed at the date of acquisition (in thousands):
Cash $ 3,487
Accounts receivable 25,121
Inventories 29,228
Other current assets 8,378
Property, plant and equipment 47,976
Other intangibles 17,463
Other assets 3,113
Current liabilities (24,103)
Long-term debt (19,536)
Other long-term liabilities (7,619)
---------------
83,508
Goodwill 50,456
---------------
Aggregate purchase price $133,964
===============
Certain allocations above are based on management's preliminary estimate of
assets acquired and liabilities assumed. The valuations of property, plant and
equipment and other intangible assets are based on preliminary results of
independent appraisals, which are still being reviewed. The property, plant and
equipment is being depreciated on a straight-line basis over an estimated useful
life ranging from three to thirty years. The other intangible assets are being
amortized on a straight-line basis over a useful life range of five to twelve
years, except for $12,210,000 of trademarks, which are not being amortized.
The goodwill associated with the Rietschle acquisition is all allocated to the
Pump and Compressor Segment.
20% MINORITY INTEREST IN RIETSCHLE ITALIAN SUBSIDIARY:
On April 11, 2003, the Company purchased the remaining 20% minority interest in
the Company's Italian subsidiary for $1.5 million. All of the purchase price was
preliminarily allocated to goodwill. The Company now owns 100% of the Italian
subsidiary.
Note C - Contingencies
----------------------
In the normal course of business, the Company is a party to legal proceedings
and claims. When costs can be reasonably estimated, appropriate liabilities for
such matters are recorded. While management currently believes the amount of
ultimate liability, if any, with respect to these actions will not materially
affect the financial position, results of operations, or liquidity of the
Company, the ultimate outcome of any litigation is uncertain. Were an
unfavorable outcome to occur, the impact could be material to the Company.
Note D - Comprehensive Income
-----------------------------
The reconciliation of net income to comprehensive income follows:
6
(In thousands) THREE MONTHS SIX MONTHS
ENDED JUNE 30 ENDED JUNE 30
2003 2002 2003 2002
---- ---- ---- ----
Net income $9,432 $8,636 $18,238 $16,057
Other comprehensive income (loss):
Minimum pension liability (36) - (63) -
Related tax expense 13 - 22 -
Foreign currency translation 7,255 5,667 11,090 5,144
------ ------ ------- -------
Total change in other comprehensive income 7,232 5,667 11,049 5,144
------ ------ ------- -------
Total comprehensive income $16,664 $14,303 $29,287 $21,201
======= ======= ======= =======
Note E - Net Income Per Share
-----------------------------
The computation of the numerator and denominator in computing basic and diluted
net income per share follows:
(In thousands) THREE MONTHS SIX MONTHS
ENDED JUNE 30 ENDED JUNE 30
2003 2002 2003 2002
---- ---- ---- ----
Numerator:
Net income $ 9,432 $8,636 $18,238 $16,057
------- ------ ------- -------
Denominator:
Weighted average shares outstanding 17,179 15,276 17,159 15,260
Effect of dilutive securities:
Director and employee stock options 349 570 330 521
Employee performance shares 22 37 25 36
------- ------ ------- -------
Dilutive potential common shares 371 607 355 557
------- ------ ------- -------
Denominator for diluted earnings per share
-adjusted weighted average shares and
assumed conversions 17,550 15,883 17,514 15,817
====== ====== ====== ======
Note F - Segment Disclosures
----------------------------
(In thousands) THREE MONTHS SIX MONTHS
ENDED JUNE 30 ENDED JUNE 30
2003 2002 2003 2002
---- ---- ---- ----
Total net sales including intercompany
sales
Pump and Compressor $117,813 $56,261 $229,940 $108,218
Intercompany sales
Pump and Compressor (22,003) (6,333) (41,784) (12,233)
-------- ------- -------- --------
Net sales to unaffiliated customers
Pump and Compressor $ 95,810 $49,928 $188,156 $ 95,985
======== ======= ======== ========
Operating income
Pump and Compressor $ 10,334 $8,014 $20,659 $ 15,561
Lighting* 6,887 7,522 13,030 13,524
Corporate (1,768) (1,419) (3,556) (2,904)
-------- ------- -------- --------
$ 15,453 $14,117 $ 30,133 $ 26,181
======== ======= ======== ========
7
*Three months ended June 30 consists of equity income of $6,952,000 in 2003 and
$7,572,000 in 2002 from our 32% interest in the joint venture, Genlyte Thomas
Group LLC (GTG), less $65,000 in 2003 and $50,000 in 2002, related to expense
recorded for Thomas Industries stock options issued to GTG employees. Six months
ended June 30 consists of equity income of $13,174,000 in 2003 and $13,625,000
in 2002 from our 32 percent interest in GTG less $144,000 in 2003 and $101,000
in 2002 related to expense recorded for Thomas Industries stock options issued
to GTG employees.
Note G - Goodwill and Other Intangible Assets
---------------------------------------------
The changes in net carrying amount of goodwill for the six months ended June 30,
2003 were as follows (in thousands):
Balance as of December 31, 2002 $ 55,669
Rietschle acquisition adjustments 1,296
20% minority interest acquisition 1,484
Translation adjustments and other (3,779)
----------------
Balance as of June 30, 2003 $ 54,670
================
The goodwill included in the balance sheets is related to the Pump and
Compressor Segment.
Certain intangible assets have definite lives and are being amortized. In
accordance with SFAS No. 142, the Company evaluated the remaining useful lives
of intangible assets as of January 1, 2002, and where appropriate, revisions to
the remaining period of amortization were made. Amortizable intangible assets
consist of the following (in thousands):
June 30, 2003 December 31, 2002
----------------------------------------- ----------------------------------------------
Accumulated Accumulated
Life Cost Amortization Life Cost Amortization
---- ---- ------------ ---- ---- ------------
Licenses 18-19 $ 483 $ 192 18-19 $ 466 $ 65
Patents 5-20 5,621 490 5-20 5,137 230
Other 1-10 2,881 659 1-10 2,633 491
------------------------------- --------------------------------
Total $8,985 $1,341 $ 8,236 $ 786
=============================== ================================
The June 30, 2003 cost amount includes $8.4 million related to the Rietschle
acquisition allocated to patents and other intangibles. The total intangible
amortization expense for the six months ended June 30, 2003 and 2002 was
$471,000 and $9,000, respectively.
The estimated amortization expense stated in thousands of dollars for the next
five years beginning January 1, 2003 through December 31, 2007 is as follows:
2003 $855
2004 738
2005 738
2006 738
2007 729
As of June 30, 2003, $12,210,000 has been preliminarily allocated to
non-amortizable trademarks, in connection with the Rietschle acquisition.
Also included in other intangible assets is an intangible asset associated with
the minimum pension liability of $691,000 as of June 30, 2003 and December 31,
2002.
8
Note H - Long-lived Assets
--------------------------
Consistent with SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets," the Company evaluates long-lived assets for impairment and
assesses their recoverability based upon anticipated future cash flows. If facts
and circumstances lead the Company's management to believe that the cost of one
of its assets may be impaired, the Company will evaluate the extent to which
that cost is recoverable by comparing the future undiscounted cash flows
estimated to be associated with that asset to the asset's carrying amount and
write down that carrying amount to market value to the extent necessary.
Note I - Genlyte Thomas Group LLC
---------------------------------
The following table contains certain unaudited financial information for the
Joint Venture.
Genlyte Thomas Group LLC
Condensed Financial Information
(Dollars in Thousands)
(Unaudited)
June 30, December 31,
2003 2002
---- ----
GTG balance sheets:
Current assets $404,606 $405,138
Long-term assets 285,504 267,843
Current liabilities 174,282 187,211
Long-term liabilities 53,775 69,795
Three Months Six Months
Ended June 30 Ended June 30
------------- -------------
2003 2002 2003 2002
---- ---- ---- ----
GTG income statements (unaudited):
Net sales $254,113 $247,767 $492,026 $479,793
Gross profit 88,729 87,569 170,559 167,789
Earnings before interest and taxes 23,259 25,787 44,422 46,870
Net income 21,724 23,664 41,169 42,579
Amounts recorded by Thomas Industries Inc.:
Equity income from GTG $6,952 $7,572 $13,174 $13,625
Stock option expense (65) (50) (144) (101)
Equity income reported by Thomas $6,887 $7,522 $13,030 $13,524
Note J - Stock-Based Compensation
---------------------------------
Stock options are granted under various stock compensation programs to employees
and independent directors. The Company accounts for stock option grants in
accordance with Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" ("APB 25"). For purposes of pro forma disclosures,
the estimated fair value of the options is amortized to expense over the
options' vesting period.
Included in stock option activity, but accounted for in accordance with SFAS No.
123, are options granted to GTG employees, for which the Company has recorded
compensation expense. This compensation expense, shown net of tax, is also
included in the pro forma information below.
9
The Company's pro forma information in accordance with SFAS No. 123 is as
follows:
Three Months Ended Six Months Ended
June 30 June 30
------- -------
2003 2002 2003 2002
-------------------------------------------------------------
Net income (as reported) $ 9,432 $ 8,636 $ 18,238 $ 16,057
Add: Stock-based compensation expense for GTG employees
included in reported net income, net of related tax
effect. 59 49 131 92
Deduct: Total stock-based employee compensation
determined under fair value based method for all
awards, net of related tax effect.
(209) (260) (430) (472)
-------------------------------------------------------------
Net income (pro forma) $ 9,282 $ 8,425 $ 17,939 $ 15,677
=============================================================
Net income per share (Basic) - As reported $ .55 $ .57 $1.06 $ 1.05
Pro forma .54 .55 1.05 1.03
Net income per share (Diluted) - As reported .54 .54 1.04 1.02
Pro forma .53 .53 1.02 .99
Note K - Product Warranty Costs
-------------------------------
The Company generally offers warranties for most of its products for periods
from one to five years. The specific terms and conditions of these warranties
vary depending on the product sold and country in which the Company does
business. The Company estimates the costs that may be incurred under its
warranty and records a liability in the amount of such costs at the time product
revenue is recognized. Factors that affect the Company's warranty liability
include that number of units sold, historical and anticipated rates of warranty
claims, and cost per claim. The Company periodically assesses the adequacy of
its recorded warranty liability and adjusts the amount as necessary.
Changes in the Company's warranty liability for the six months ended June 30,
2003 are as follows (in thousands):
Balance as of December 31, 2002 $ 2,674
Warranties issued during the six months 1,641
Settlements made during the six months (1,070)
--------------
Balance as of June 30, 2003 $ 3,245
==============
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Thomas' discussion and analysis of its financial condition and results of
operations are based upon Thomas' consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in the
United States. When preparing these consolidated financial statements, the
Company is required to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. The Company bases its estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making
judgments about
10
Item 2. Management's Discussion and Analysis - Continued
the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different
assumptions or conditions.
In response to the Securities and Exchange Commission's (SEC) Release No.
33-8040, "Cautionary Advice Regarding Disclosure About Critical Accounting
Policies", the Company identified the following critical accounting policies,
which affect its more significant judgments and estimates used in the
preparation of its consolidated financial statements. Based on the SEC's
suggestions, included with the accounting policies are potential adverse
results, which could occur if different assumptions or conditions were to
prevail.
The Company maintains allowances for doubtful accounts for estimated losses
resulting from the inability of its customers to make required payments. If the
financial condition of Thomas' customers were to deteriorate, resulting in an
impairment of their ability to make payments, additional allowances may be
required. Thomas provides for the estimated cost of product warranties. While
the Company engages in extensive product quality programs and processes, should
actual product failure rates differ from estimates, revisions to the estimated
warranty liability would be required. Thomas reserves for estimated obsolescence
or unmarketable inventory equal to the difference between the cost of inventory
and the estimated market value based upon assumptions about future demand and
market conditions. If actual market conditions are less favorable than those
projected by management, additional inventory reserves may be required. With
respect to the Rietschle acquisition in 2002, the Company utilized an
independent appraisal in determining the fair value of assets and liabilities
acquired. The purchase price allocation has not yet been finalized, and as a
result, the amounts recorded could change as the allocation is finalized. If
actual market conditions or other factors differ in the future from those used
by the independent appraiser, then asset write-downs may be required. In
accordance with Statement of Financial Accounting Standards (SFAS) No. 142,
"Goodwill and Other Intangible Assets," Thomas tests at least annually for
impairment of goodwill and indefinite lived intangible assets. If facts and
circumstances lead the Company's management to believe that the cost of one of
these assets may be impaired, then further evaluations would be performed and
possible write-downs could occur. In accordance with SFAS No. 144, "Accounting
for the Impairment or Disposal of Long-Lived Assets," the Company evaluates
long-lived assets for impairment and assesses their recoverability based upon
anticipated future cash flows. If facts and circumstances lead the Company's
management to believe that the cost of one of its long-lived assets may be
impaired, then further evaluations would be performed and possible write-downs
could occur.
Thomas holds a 32 percent minority interest in the Genlyte Thomas Group LLC
(GTG) joint venture, which comprises Thomas' lighting segment and is accounted
for using the equity method. If future adverse changes in market conditions or
poor operating results of GTG occurred, it could result in losses or an
inability to recover the carrying value of the Company's investment, thereby
possibly requiring an impairment charge in the future. GTG's critical accounting
policies are determined separately by The Genlyte Group Incorporated, which owns
68 percent of GTG and consolidates the GTG results.
RESULTS OF OPERATIONS
On August 29, 2002, the Company purchased substantially all the assets and
liabilities of Werner Rietschle Holding GmbH ("Rietschle"), a privately held
company based in Schopfheim, Germany. See Note B in the notes to condensed
consolidated financial statements. Rietschle's operating results are included in
the Company's operating results since the date of acquisition. As we integrate
the Rietschle and Thomas entities, it becomes more difficult to determine the
impact of the Rietschle acquisition, on a stand-alone basis. The Company has
made its best estimate of the Rietschle impact to various income statement line
items, such as, net sales, gross profit, operating income and net income.
Eventually, it will not be meaningful to make these estimates. At the end of the
second quarter, the Company announced
11
Item 2. Management's Discussion and Analysis - Continued
the shutdown of a Rietschle factory in Fleurier, Switzerland. The Company made
an estimate of the shutdown costs related to severance payments and other costs
to exit the facility, which would be incurred in future months. The amount of
this estimate is $1.7 million. The Company has concluded that these costs should
be recognized as liabilities assumed in the Rietschle acquisition and included
in the allocation of the acquisition cost in accordance with Statement of
Financial Accounting Standards (SFAS) No. 141, "Business Combinations" and the
Emerging Issues Task Force (EITF) Issue No. 94-3, "Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity". This
did not have an impact to the second quarter or six months results.
The Company's net income was $9.4 million in the second quarter ended June 30,
2003, compared to $8.6 million in the second quarter ended June 30, 2002.
Included in the 2003 amount was approximately $.8 million related to Rietschle's
estimated net income after netting interest expense on acquisition debt and
other transaction related expenses. Excluding the impact of Rietschle, net
income for the 2003 second quarter would have been $8.6 million or flat when
compared to the 2002 period. For the six months ended June 30, 2003, net income
was $18.2 million, compared to $16.1 million in the comparable period in 2002.
Rietschle's estimated net income in the six months ended June 30, 2003, were
$2.0 million. Net income for the six months ended June 30, 2003, would have been
$16.3 million or 1.3% higher than the comparable 2002 period, when excluding
Rietschle.
PUMP AND COMPRESSOR SEGMENT
Net sales for the second quarter ended June 30, 2003, increased 91.9% to $95.8
million compared to $49.9 million for the second quarter of 2002. Included in
2003 was $41.9 million related to Rietschle's estimated net sales. Also
favorably impacting the 2003 second quarter net sales were the effects of
exchange rates, which increased net sales of the former Thomas locations by
approximately $2.8 million. Excluding the Rietschle net sales and the sales
increase due to exchange rate fluctuation, the 2003 net sales would have
increased 2.2%. The following comments regarding net sales are based on
comparisons of the 2003 and 2002 second quarters when excluding the Rietschle
net sales and the effects of exchange rates. North American operations recorded
increases in 2003 sales compared to 2002 due to strength in the automotive and
medical markets. These were partially offset by lower sales in the environmental
market. Europe recorded higher sales due to increases from the environmental and
medical markets, which were partially offset by lower sales to the automotive
market. Net sales decreased in the Asia Pacific operations due to lower sales in
the environmental and medical markets. Net sales for the six months ended June
30, 2003, increased 96% to $188.2 million compared to $96.0 million for the
comparable 2002 period. Included in 2003 was $81.2 million related to
Rietschle's estimated net sales. The favorable effects of exchange rates
increased the 2003 net sales by $5.8 million. Excluding the Rietschle net sales
and the sales increase due to exchange rate fluctuations, the 2003 net sales for
the six months ended June 30, 2003, would have increased 5.4%. When comparing
the 2003 and 2002 six month period ended June 30, the market trends and
explanations for changes were the same as those included above regarding the
second quarter.
Gross profit for the Pump and Compressor Segment was $33.8 million, or 35.2% of
sales in the second quarter of 2003, compared to $18.0 million, or 36.1% in the
second quarter of 2002. Excluding Rietschle's estimated gross profit and the
impact of exchange rate fluctuations in 2003, the Company's gross profit percent
would have been 35.6%. For the six months ended June 30, gross profit was $66.9
million, or 35.5% of sales in 2003, compared to $34.9 million, or 36.4% for the
comparable period in 2002. Excluding Rietschle's estimated gross profit and the
impact of exchange rate fluctuations in 2003, the Company's gross profit percent
would have been 35.3% for the six months ended June 30, 2003. The reduction in
the gross profit percentage was primarily due to the negative impact from the
new product being transitioned to Chinese production, sales mix and pricing
pressures in some of our markets.
12
Item 2. Management's Discussion and Analysis - Continued
The Pump and Compressor Segment's selling, general and administrative (SG&A)
expenses were $23.4 million, or 24.5% of sales, in the second quarter of 2003,
compared to $10.0 million, or 20.0%, in the same period in 2002. These exclude
corporate expenses, which are discussed in a separate section below. The higher
percent of sales in the second quarter of 2003 for SG&A expenses, when including
Rietschle, is due to the increased number of Rietschle sales and service offices
throughout the world, which require a higher level of SG&A costs to operate.
Excluding Rietschle's estimated SG&A expenses and the impact of exchange rate
fluctuations, the 2003 second quarter SG&A expenses would be 20.3% of sales,
which is slightly higher than the 2002 second quarter percentage. SG&A expenses
for the six months ended June 30, 2003, was $46.2 million, or 24.6% of sales,
compared to $19.3 million, or 20.2% for the same period in 2002. As mentioned
for the second quarter above, the Rietschle acquisition is the primary reason
for the higher percentage in 2003. Excluding Rietschle's estimated SG&A expenses
and the impact of exchange rate fluctuations, the 2003 SG&A expenses for the six
months ended June 30, 2003 would be 20.5% of sales.
Operating income for the Pump and Compressor Segment was $10.3 million for the
second quarter of 2003, compared to $8.0 million for the 2002 second quarter.
Included in the 2003 second quarter was $2.0 million, related to Rietschle's
estimated operating income, and $.6 million related to the favorable impact of
exchange rate fluctuations. Excluding these items, the 2003 operating income
would have been 2.8% below the 2002 second quarter level. The following comments
regarding operating income are based on comparisons of the 2003 and 2002 second
quarters when excluding the Rietschle operating income and the effects of
exchange rates. The North American operations reported lower operating income
results primarily due to lower margins on a new product, which is in the process
of being transferred to China for lower cost production. The European operations
posted higher operating income in the 2003 second quarter versus 2002, primarily
due to increased sales volume and favorable product mix. The Asia Pacific
operating income was lower due to lower sales volume and unfavorable product
mix. Operating income for the six months ended June 30, 2003, was $20.7 million,
compared to $15.6 million for the comparable period in 2002. Included in the
2003 six month period was $4.7 million related to Rietschle's estimated
operating income and $1.0 million related to the favorable impact of exchange
rate fluctuations. Excluding these items, the 2003 six month period operating
income would have been 3.5% below the 2002 six-month period. The following
comments regarding operating income are based on comparisons of the 2003 and
2002 six-month periods when excluding the Rietschle operating income and the
effects of exchange rates. The North American operations posted higher operating
income primarily due to strong shipments in the first quarter of 2003, which
were partially offset by lower margins on a new product being transitioned to
Chinese production. The European operations reported lower operating income for
the six-month period due to unfavorable product mix incurred on first quarter
shipments. The Asia Pacific operating income was lower due to lower sales volume
and unfavorable product mix.
LIGHTING SEGMENT
The Genlyte Group (Genlyte) and Thomas formed the Genlyte Thomas Group LLC (GTG)
on August 30, 1998. The Lighting Segment's operating income includes our 32%
interest in the GTG joint venture, as well as expenses related to Thomas
Industries stock options issued to GTG employees. The Lighting Segment earnings
decreased 8.4% to $6.9 million in the second quarter of 2003, compared to $7.5
million in the same period in 2002. This decrease was primarily related to
foreign currency transaction losses related to GTG's Canadian divisions, as well
as a 1.6% reduction in sales volume, when excluding the recent Vari-Lite and
Shakespeare acquisitions made by GTG. GTG also incurred higher legal, pension
and insurance costs in the second quarter of 2003, compared to 2002. For the
six-month period ended June 30, 2003, the Lighting Segment earnings were $13.0
million, or 3.7% below the $13.5 million reported for the comparable 2002
period. The explanation for the lower six-month earnings is the same as
described above for the second quarter, but the decrease was smaller due to an
increase in earnings
13
Item 2. Management's Discussion and Analysis - Continued
during the first quarter of 2003 compared to 2002. GTG sales for the six-month
period ended June 30, 2003, were down .6% from the 2002 levels, when excluding
recent acquisitions.
Thomas' investment in GTG is accounted for using the equity method of
accounting. Under the terms of the LLC Agreement, any time on or after January
31, 2002, Thomas has the right (a "put right"), but not the obligation, to
require the Joint Venture (GTG) to purchase all, but not less than all, of
Thomas' ownership interest in GTG at the applicable purchase price. The purchase
price shall be equal to the "Fair Market Value" of GTG multiplied by Thomas'
ownership percentage in GTG. The "Fair Market Value" means the value of the
total interest in GTG computed as a going concern, including the control
premium.
Also under the terms of the LLC Agreement, on or after the final settlement or
disposition of Genlyte's case related to the Keene Creditors Trust lawsuit
against Genlyte and others, either Thomas or Genlyte has the right, but not the
obligation to buy the other parties' interest in GTG (the "Offer Right"). If
Thomas and Genlyte cannot agree on the terms, then GTG or the business of GTG
shall be sold to the highest bidder. Either party may participate in bidding for
the purchase of GTG or the business of GTG. On March 14, 2003, the Southern
District of New York Federal District Court dismissed the Genlyte case noted
above. On April 14, 2003, the Creditors Trust filed a Notice of Appeal to the
United States Court of Appeals for the Second Circuit from the final judgment
entered on March 17, 2003. The Notice claims to bring up for review all orders,
opinions, and decisions previously entered in the action.
Therefore, no final settlement or disposition has occurred and neither party has
the ability to exercise this right.
In the event of a Change of Control (i) of Thomas, GTG has the right, but not
the obligation, to purchase Thomas' interest for a purchase price equal to Fair
Market Value of GTG multiplied by Thomas' ownership interest or (ii) of Genlyte,
Thomas has the right, but not the obligation, to sell its interest to the Joint
Venture for a purchase price equal to Fair Market Value of GTG multiplied by
Thomas' ownership interest. The definition of "Change of Control" includes the
acquisition by any person of 25% or more of Thomas' outstanding common stock.
In the event of a Deadlock (as defined below), Thomas may exercise its Put Right
in accordance with the LLC Agreement or Genlyte may, in its sole discretion,
cause the entire Joint Venture or business of GTG to be sold. A "Deadlock" shall
be deemed to exist if (i) the Management Board of GTG fails to agree on a matter
for which Special Approval is required in accordance with the LLC Agreement and
(ii) such disagreement continues for 90 days. The definition of "Special
Approval" includes the approval of at least a majority of the management board
representatives, including, in all instances, approval by at least one
representative appointed by Thomas.
CORPORATE
As disclosed in Note F (Segment Disclosures) in the consolidated financial
statements, consolidated operating income includes corporate expenses. Corporate
expenses were $1.8 million for the three months ended June 30, 2003, compared to
$1.4 million for 2002. The increase in 2003 relates to higher banking, audit and
tax fees as a result of the Rietschle acquisition, as well as higher costs
associated with Sarbanes-Oxley Act compliance. Corporate expenses were $3.6
million for the six months ended June 30, 2003, compared to $2.9 million for the
comparable period in 2002. The increases in corporate expenses were due to the
same explanations given above for the second quarter increase.
Interest expense for the three months ended June 30, 2003 was $1.0 million
compared to $.6 million for 2002. The 2003 amount includes $.6 million related
to the Rietschle acquisition. Excluding Rietschle related amounts, the 2003
interest expense was $.4 million. Interest expense for the six months ended Item
14
2. Management's Discussion and Analysis - Continued
June 30, 2003, was $2.1 million compared to $1.2 million for 2002. The 2003
six-month period includes $1.3 million related to the Rietschle acquisition.
Excluding Rietschle related amounts, the 2003 interest expense for the six-month
period was $.8 million. The reduction in 2003, when excluding the Rietschle
acquisition, was primarily related to the $7.7 million payment of long-term debt
on January 31, 2003, which carried a 9.36% annual interest rate. Interest rates
were also lower in 2003 compared to 2002.
Interest income and other for the three months ended June 30, 2003, was $94
thousand compared to $43 thousand of income in the comparable period in 2002.
The increase from 2002 relates primarily to the Rietschle acquisition. Excluding
Rietschle, interest income and other would have decreased by $21 thousand. For
the six months ended June 30, 2003, interest income and other was $55 thousand
compared to $285 thousand in 2002. Excluding Rietschle for the six-month period
in 2003, would have reduced the reported amount by $57 thousand, resulting in a
charge of $2 thousand. The decreases in both the second quarter and six-month
periods compared to 2002, relates to lower amounts of invested cash in 2003 and
lower interest rates versus 2002. The six-month period comparison also includes
negative impacts from foreign currency translation losses in the first quarter
of 2003, compared to favorable impacts in the first quarter of 2002.
Income tax provisions were $5.1 million and $5.0 million in the three months
ended June 30, 2003, and 2002, respectively. Income tax provisions were $9.8
million and $9.2 million in the six months ended June 30, 2003, and 2002,
respectively. The effective income tax rate was 35.0% in 2003, compared to 36.5%
in 2002. The decline in the effective tax rate in 2003 was primarily due to the
tax benefits achieved through the Rietschle acquisition.
LIQUIDITY AND SOURCES OF CAPITAL
Cash and cash equivalents decreased $1.2 million to $17.7 million at June 30,
2003, compared to $18.9 million at December 31, 2002. This decrease was
primarily related to the $7.7 million long-term debt payment on January 31,
2003, which was offset by proceeds from additional long-term debt borrowings of
$7.0 million, at lower interest rates. These additional proceeds were used for
working capital needs during the six months ended June 30, 2003, as well as
capital expenditures, which were $3.6 million higher in the first six months of
2003 compared to the comparable period in 2002.
Cash flows provided by operations in the first six months of 2003 were $5.8
million compared to cash flows provided by operations of $3.0 million in the
first six months of 2002. The increase in cash flows were primarily related to
increases in net income in the six months ended June 30, 2003, compared to 2002.
Dividends paid in 2003 were $2.9 million compared with $2.6 million in 2002. The
2003 dividends increased primarily due to the issuance of 1.8 million shares in
connection with the acquisition of Rietschle.
As of June 30, 2003, the Company had standby letters of credit totaling
$4,410,000 with expiration dates during 2003. The Company anticipates that these
letters of credit will be renewed at their expiration dates.
The Company announced in December 1999 that it planned to repurchase, from time
to time depending on market conditions and other factors, up to 15 percent, or
2,373,000 shares, of its outstanding Common Stock in the open market or through
privately negotiated transactions at the prevailing market prices. No purchases
were made under this repurchase plan during 2003. Under the December 1999
repurchase plan, the Company has purchased, on a cumulative basis through June
30, 2003, 879,189 shares at a cost of $17.3 million, or an average cost of
$19.72 per share. The Company plans to fund any purchase of
15
Item 2. Management's Discussion and Analysis - Continued
Company stock through a combination of cash flows generated from operating
activities and our revolving line of credit.
Working capital increased from $82.0 million at December 31, 2002, to $94.5
million at June 30, 2003, primarily due to increases in accounts receivable and
inventories to support business activities.
June 30, December 31,
Dollars in thousands 2003 2002
---- ----
Working capital $ 92,721 $82,030
Current ratio 2.61 2.66
Long-term debt, less current portion $103,888 $104,047
Long-term debt to total capital 23.3% 24.9%
Certain loan agreements of the Company include restrictions on working capital,
operating leases, tangible net worth, and the payment of cash dividends and
stock distributions. Under the most restrictive of these arrangements, retained
earnings of $112.8 million are not restricted at June 30, 2003. Thomas is in
compliance with all covenants or other requirements set forth in its borrowing
agreements. In the event of non-compliance or if Thomas prepays the debt, then
Thomas would incur a penalty. At June 30, 2003, the prepayment penalty would
have been approximately $1.5 million on a pre-tax basis.
As of June 30, 2003, the Company had a $120 million revolving line of credit
with its banks through August 28, 2005, $85.0 million of which was outstanding.
This line of credit was used to fund the cash payment of $83 million for the
Rietschle acquisition and to support the short-term needs of the business for
working capital, fixed asset additions, and general business use. As of June 30,
2003, the Company had uncommitted short-term borrowing arrangements being used
by some of its foreign offices which totaled $3.3 million. As of June 30, 2003
and December 31, 2002, except as described above related to the GTG joint
venture, management was aware of no relationships with any other unconsolidated
entities, financial partnerships, structured finance entities, or special
purpose entities which would have been established for the purpose of
facilitating off-balance sheet arrangements or other contractually narrow or
limited purposes.
FORWARD-LOOKING STATEMENTS
The Company makes forward-looking statements from time to time and desires to
take advantage of the "safe harbor" which is afforded such statements under the
Private Securities Litigation Reform Act of 1995 when they are accompanied by
meaningful cautionary statements identifying important factors that could cause
actual results to differ materially from those in the forward-looking
statements.
The statements contained in the foregoing "Management's Discussion and Analysis
of Financial Condition and Results of Operations," as well as other statements
contained in this Quarterly Report and statements contained in future filings
with the Securities and Exchange Commission and publicly disseminated press
releases, and statements which may be made from time to time in the future by
management of the Company in presentations to shareholders, prospective
investors, and others interested in the business and financial affairs of the
Company, which are not historical facts, are forward-looking statements that
involve risks and uncertainties that could cause actual results to differ
materially from those set forth in the forward-looking statements. Any
projections of financial performance or statements concerning expectations as to
future developments should not be construed in any manner as a guarantee that
such results or developments will, in fact, occur. There can be no assurance
that any forward-looking statement will be realized or that actual results will
not be significantly different from that set forth in such forward-looking
statement. In addition to the risks and
16
Item 2. Management's Discussion and Analysis - Continued
uncertainties of ordinary business operations, the forward-looking statements of
the Company referred to above are also subject to the following risks and
uncertainties:
o The Company operates in a highly competitive business environment, and its
sales could be negatively affected by its inability to maintain or increase
prices, changes in geographic or product mix, or the decision of its
customers to purchase competitive products instead of the Company's
products. Sales could also be affected by pricing, purchasing, financing,
operational, advertising, or promotional decisions made by purchasers of
the Company's products.
o On an annual basis, the Company negotiates renewals for property, casualty,
workers compensation, general liability, product liability, and health
insurance coverages. Due to conditions within these insurance markets and
other factors beyond the Company's control, future coverages and the amount
of the related premiums could have a negative affect on the Company's
results.
o The Pump and Compressor Segment operates in a market where technology
improvements and the introduction of products for new applications are
necessary for future growth. The Company could experience difficulties or
delays in the development, production, testing, and marketing of new
products. As an original equipment supplier, the Company's results of
operations are directly affected by the success of its customers' products.
o The Pump and Compressor Segment has several key customers, none of which
are 10% or more of our consolidated sales. However, the loss of any of
these key customers could have a negative affect on the Company's results.
o The Pump and Compressor Segment has the leading market share in the oxygen
concentrator Original Equipment Manufacturers (OEM) market worldwide. The
Company's market share could be reduced significantly due to a competitor,
the vertical integration by our customers, or new technology replacing
compressed air in oxygen concentrators. The loss of market share in the
oxygen concentrator OEM market could have a significant adverse affect on
the Company's results.
o With the Rietschle acquisition, the Company is in the process of
integrating the Rietschle business. There can be no assurance that the
integration will occur in a timely fashion or in a manner which will allow
the Company to realize the full benefit of its strategies. As part of the
integration process, the Company plans on achieving certain synergies.
There can be no assurance that the synergies will be realized in a timely
manner or at the projected levels.
o With the Rietschle acquisition, the Company has a larger percentage of its
net assets exposed to foreign currency risks. As a result, this increased
exposure to foreign currency risks may adversely affect the Company's
results.
o With the Rietschle acquisition, the Company has a leading market share in
supplying compressors and systems to the printing industry worldwide. The
Company's market share could be reduced significantly due to competition or
technology. The loss of market share in the printing industry could have a
significant adverse affect on the Company's results.
o GTG, which comprises the Company's Lighting Segment, participates in highly
competitive markets that are dependent on the level of residential,
commercial, and industrial construction activity in North America. Changes
in interest rates, consumer preferences, office and plant occupancy rates,
and acceptance of new products affect the Lighting Segment.
o As the Company's business continues to expand outside the United States,
the Company could experience currency exchange rate fluctuations. The
Company could also be affected by nationalizations; unstable governments,
economies, or legal systems; terrorist attacks; or inter-governmental
disputes. These currency, economic, and political uncertainties may affect
the Company's results.
17
Item 2. Management's Discussion and Analysis - Continued
The forward-looking statements made by the Company are based on estimates that
the Company believes are reasonable. However, the Company's actual results could
differ materially from such estimates and expectations as a result of being
positively or negatively affected by the factors as described above, as well as
other unexpected, unanticipated, or unforeseen factors.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
The Company's long-term debt bears interest at both fixed and variable rates.
Variable rate long-term debt includes the $1.25 million Industrial Revenue Bond
and the $85.0 million outstanding from the revolving line of credit facility
that accrue interest at variable rates. Short-term borrowings of $3.3 million at
June 30, 2003, are priced at variable interest rates. The Company's results of
operations and cash flows, therefore, would only be affected by interest rate
changes to its variable rate debt. At June 30, 2003, $89.6 million was
outstanding. A 100 basis point movement in the interest rate on the variable
rate debt of $89.6 million would result in an $896,000 annualized effect on
interest expense and cash flows ($582,000 net of tax).
The Company also has short-term investments, including cash equivalents, of
$12.2 million as of June 30, 2003, that bear interest at variable rates. A 100
basis point movement in the interest rate would result in an approximate
$122,000 annualized effect on interest income and cash flows ($79,000 net of
tax).
The fair value of the Company's long-term debt is estimated based on current
interest rates offered to the Company for similar instruments. A 100 basis point
movement in the interest rate would result in an approximate $176,000 annualized
effect on the fair value of long-term debt ($114,000 net of tax).
The Company has significant operations consisting of sales and manufacturing
activities in foreign countries. As a result, the Company's financial results
could be significantly affected by factors such as changes in currency exchange
rates or changing economic conditions in the foreign markets in which the
Company manufactures or distributes its products. Currency exposures for our
Pump and Compressor Segment are concentrated in Germany but exist to a lesser
extent in other parts of Europe, Asia, and South America. Our Lighting Segment
currency exposure is primarily in Canada.
Item 4. Controls and Procedures
Our Chief Executive Officer and Chief Financial Officer have
concluded, based on their evaluation as of the end of the period
covered by the report, that the Company's "disclosure controls and
procedures" (as defined in the Securities Exchange Act of 1934
Rules 13a-15(e) and 15d-15(e)) are effective to ensure that
information required to be disclosed in the reports that the
Company files or submits under the Securities Exchange Act of 1934
is recorded, processed, summarized and reported, within the time
periods specified in the Securities and Exchange Commission's
rules and forms.
PART II. OTHER INFORMATION
-------- -----------------
Item 4. Submission of Matters to a Vote of Security Holders
(a) A regular Annual Meeting of Shareholders was held on
April 17, 2003.
(b) Class II Directors elected at the Annual Meeting of
Shareholders were Timothy C. Brown, Franklin J.
Lunding, Jr. and Dieter W. Rietschle. Directors whose
term of office as a director continued after the
meeting were Wallace H. Dunbar, Joseph Ferguson,
Lawrence E. Gloyd, William M. Jordan, and Anthony A.
Massaro.
18
(c) A representative of Gabelli Asset Management Inc.
presented a resolution for a vote at the annual
meeting. The resolution was requesting that the Board
of Directors redeem the Preferred Stock Purchase Rights
issued pursuant to the Rights Agreement dated January
5, 1998.
(d) The voting at the Annual Meeting of Shareholders was as
follows:
Proposal No. 1 - Election of Directors
For Withheld
--- --------
Timothy C. Brown 12,716,499 3,185,459
Franklin J. Lunding, Jr. 15,718,694 183,264
Dieter W. Rietschle 12,727,119 3,174,839
Proposal No. 2 - Resolution to redeem Preferred Stock
Purchase Rights
For 3,043,427
Against 12,855,317
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
31.1 Certification of Chief Executive Officer
pursuant to Rule 13a-14(b) and Section 302 of
the Sarbanes-Oxley Act of 2002, filed
herewith
31.2 Certification of Chief Financial Officer
pursuant to Rule 13a-14(b) and Section 302 of
the Sarbanes-Oxley Act of 2002, filed
herewith
32.1 Certification Pursuant to 18 U.S.C. Section
1350, as adopted pursuant Section 906 of the
Sarbanes - Oxley Act of 2002, filed herewith.
(b) Reports of Form 8-K
A Form 8-K was filed on April 16, 2003, attaching a
press release announcing first quarter 2003 earnings.
A Form 8-K was filed on June 9, 2003, attaching a press
release announcing second quarter earnings outlook.
Items 1, 2, 3 and 5 are not applicable and have been omitted.
19
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THOMAS INDUSTRIES INC.
Registrant
/s/ Phillip J. Stuecker
-----------------------------------
Phillip J. Stuecker, Vice President
& Chief Financial Officer
Date: August 12, 2003
20