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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 1997
Commission file number: 0-16960
----------------
THE GENLYTE GROUP INCORPORATED
2345 Vauxhall Road
Union, N.J. 07083-1948
(908) 964-7000
INCORPORATED IN DELAWARE I.R.S. EMPLOYER
IDENTIFICATION NO. 22-2584333
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE Act: NONE
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
- --------------------------------------------------------------------------------
Common Stock, par value NASDAQ National Market System
$.0l per share
Number of shares of Common Stock (par value $.0l per share) outstanding as of
March 2, 1998: 13,410,923.
Aggregate market value of Common Stock (par value $.01 per share) held by
non-affiliates on March 2, 1998: $258,998,450.
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
Documents Incorporated by Reference:
DOCUMENT PART OF FORM 10-K
Annual report to stockholders for the fiscal year Parts I, II, and IV
ended December 31, 1997
Proxy Statement for the Annual Meeting of Stockholders Part III
to be held April 23, 1998
PART I
ITEM 1. BUSINESS
The Genlyte Group Incorporated (the "Company" or "Genlyte") designs,
manufactures and sells lighting fixtures for a wide variety of applications in
the commercial, industrial, and residential markets. The Company operates in one
industry segment (lighting fixtures and controls) through the following
divisions: Lightolier, Controls, Wide-Lite, Hadco, Diamond F, and Supply
(Crescent, ExceLine, and Stonco product lines) in the United States and Mexico,
and Canlyte in Canada. The Company markets its products under the following
brand names:
In the U.S. -- Bronzelite, Crescent, Diamond F, ExceLine, Forecast,
Lightolier Controls, Hadco, Lightolier, Stonco, and
Wide-Lite
In Canada -- Keene-Widelite, Lightolier, Prodel, Stonco, and CFI
(Canadian Fluorescent Industries)
In Mexico -- Lightolier, Forecast, Wide-Lite, Bronzelite, and
Hadco
Genlyte's products primarily utilize incandescent, fluorescent, and
high-intensity discharge (HID) light sources and are marketed primarily to
distributors who resell the products for use in new residential, commercial, and
industrial construction as well as in remodeling existing structures. Because
Genlyte does not principally sell directly to the end-user of its products, the
Company cannot determine precisely the percentage of its revenues derived from
the sale of products installed in each type of building or the percentage of its
products sold for new construction versus remodeling. Genlyte's sales, like
those of the lighting fixture industry in general, are partly dependent on the
level of activity in new construction and remodeling.
1
PRODUCTS AND DISTRIBUTION
Genlyte designs, manufactures, and markets the following types of products:
Indoor Fixtures -- Incandescent, fluorescent, and HID lighting fixtures and
lighting controls for commercial, industrial,
institutional, medical, sports, and residential markets,
and task lighting for all markets.
Outdoor Fixtures -- HID and incandescent lighting fixtures and accessories for
commercial, industrial, institutional, sports, and
residential markets.
Genlyte's products are marketed by independent sales representatives and Company
direct sales personnel who sell to distributors, electrical wholesalers, mass
merchandisers, and national accounts. In addition, the Company's products are
promoted through architects, engineers, contractors, and building owners. The
fixtures are principally sold throughout the United States, Canada, and Mexico.
RAW MATERIALS SOURCES & AVAILABILITY
Genlyte purchases large quantities of raw materials and components -- mainly
steel, aluminum, ballasts, sockets, wire, plastic, lenses, and glass -- from
multiple sources. No significant supply problems have been encountered in recent
years. Relationships with vendors have been satisfactory.
PATENTS AND TRADEMARKS
Genlyte has a number of United States and foreign mechanical patents, design
patents, and registered trademarks. Genlyte maintains such protections by
periodic renewal of trademarks and payments of maintenance fees for issued
patents. Genlyte vigorously enforces its intellectual property rights. Genlyte
does not believe that a loss of any presently held patent or trademark is likely
to have a material adverse impact on its business.
2
SEASONAL EFFECT ON BUSINESS
There are no predictable significant seasonal effects on Genlyte's results of
its operations.
WORKING CAPITAL
There are no unusual significant business practices at Genlyte that affect
working capital. Genlyte's terms of sale vary by division but are generally
consistent with general practices within the lighting industry. The Company
attempts to keep inventory levels at the minimum required to satisfy customer
requirements.
BACKLOG
Backlog was $54,205,693 as of December 31, 1997, $42,247,005 as of December 31,
1996, and $51,093,000 as of December 31, 1995. Substantially all of the backlog
at December 31, 1997 is expected to be shipped in 1998.
COMPETITION
Genlyte's products are sold in competitive markets where there are numerous
producers of each type of fixture. The principal measures of competition in
indoor and outdoor fixtures for the commercial, residential, and industrial
markets are price, service, design, and product performance.
RESEARCH AND DEVELOPMENT
Genlyte is constantly monitoring new light sources for incorporation into new
product development. Costs incurred for research and development activities, as
determined in accordance with generally accepted accounting principles, were
$5,195,000, $4,148,000, and $2,551,000, during 1997, 1996, 1995 respectively.
3
EMPLOYEES
At December 31, 1997, Genlyte employed approximately 1,900 unionized and
non-unionized production workers and 875 engineering, administrative, and sales
personnel. Relationships with unions have been satisfactory.
INTERNATIONAL OPERATIONS
The Company has international operations in Canada and Mexico. Information on
the Company's operations by geographical area for the last three fiscal years is
set forth in the "Notes to the Consolidated Financial Statements" section of
Genlyte's 1997 Annual Report to Stockholders, which is incorporated herein by
reference.
ITEM 2. PROPERTIES
The Company has the following owned and leased property locations as of December
31, 1997:
Own/ Mfg. Office Whse. Other
Lease Space Space Space Space
------------------------------------------------------------
Location
- --------
Lightolier:
Atlanta, GA Lease x
Camargo, Mexico Lease x x
Chesterfield, MO Lease x
Columbia, MD Lease x
Compton, CA Lease x x
Dallas, TX Lease x
Denver, CO Lease x
Edison, NJ Lease x x x
Emeryville, CA Lease x
Fall River, MA Own x x
Ferrel Drive, TX Lease x
Fontana, CA Own x x x
Louisville, KY Lease x
Miami, FL Lease x
New York, NY Lease x
Norwich, CT Own x x
Phoenix, AZ Lease x
Pittsburgh, PA Lease x
Portland, OR Lease x
San Diego, CA Lease x
Seattle, WA Lease x
Schiller Park, IL Lease x
Wilmington, MA Own x x x
Winter Park, FL Lease x
4
Own/ Mfg. Office Whse. Other
Lease Space Space Space Space
-----------------------------------------------------------
Location
- --------
Hadco:
San Marcos, TX Own x x x
Littlestown, PA Own x x x
Supply:
Stonco - Union, NJ * Own x x x
Crescent - Barrington, NJ Own x x x
Wide-Lite:
San Marcos, TX Own x x x
Controls:
Garland, TX Own x x x x
Diamond F:
Elgin, IL Own x x x
Canlyte:
Cambridge, Ontario (KWL) Own x x
Montreal, Quebec
(Lachine-LOL/CHQ) Own x x x x
Toronto (LOL/KWL) Lease x
Vancouver (LOL) Lease x
Cornwall, Ontario (CFI) Own x x
* Includes Genlyte headquarters.
The Genlyte facility located in Garland, Texas is subject to a $237,000 mortgage
due May 1, 2002.
Genlyte believes its facilities are suitable and adequate for current and
presently projected needs.
5
ITEM 3. LEGAL PROCEEDINGS
Genlyte has been named as one of a number of corporate and individual defendants
in an adversary proceeding filed on June 8, 1995, arising out of the Chapter 11
bankruptcy filing of Keene Corporation ("Keene"). Except for the last count, as
discussed below, the claims and causes of action are substantially the same as
were brought against Genlyte in the U.S. District Court in New York in August
1993, which have been permanently enjoined from proceeding as a result of
Keene's reorganization plan. The new complaint is being prosecuted by the
Creditors' Trust created for the benefit of Keene's creditors (the "Trust"),
seeking from the defendants, collectively, damages in excess of $700 million,
rescission of certain asset sale and stock transactions, and other relief. With
respect to Genlyte, the complaint principally maintains that certain lighting
assets of Keene were sold to a predecessor of Genlyte in 1984 at less than fair
value, while both Keene and Genlyte were wholly-owned subsidiaries of Bairnco
Corporation. The complaint also challenges Bairnco's spin-off of Genlyte in
August 1988. Other allegations are that Genlyte, as well as the other corporate
defendants, are liable as corporate successors to Keene. The complaint fails to
specify the amount of damages sought against Genlyte. The complaint also alleges
a violation of the Racketeer Influenced and Corrupt Organizations Act.
Following confirmation of the Keene reorganization plan, the parties moved to
withdraw the case from bankruptcy court to the Southern District of New York
Federal District Court. The case is now pending before the Federal District
Court. Genlyte and other defendants filed motions to dismiss the complaint and
motions for summary judgment on statute of limitations grounds on September 15,
1997, which were fully briefed and presented to the Court on December 15, 1997.
Oral argument was conducted on the summary judgment motion on February 13, 1998
and Genlyte is awaiting decisions of the Court on the other motions. Discovery
has been stayed until March 27, 1998. Genlyte believes that it has meritorious
defenses to the adversary proceeding and will defend said action vigorously.
Additionally, the Company is a defendant and/or potentially responsible party,
with other companies, in actions and proceedings under state and Federal
environment laws including the Federal Comprehensive Environmental Response
Compensation and Liability Act, as amended ("Superfund"). Such actions include,
but are not limited to, the Keystone Sanitation Landfill site located in
Pennsylvania, in which the United States Environmental Protection Agency has
sought remedial action and reimbursement for past costs.
Management does not believe that the disposition of the lawsuits and/or
proceedings will have a material effect on the Company's financial condition or
results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Amendment to the Genlyte 1988 Stock Option Plan included in the Proxy Statement
for the 1998 Annual Meeting of Stockholders of Genlyte which has been filed with
the Securities and Exchange Commission and is incorporated herein by reference.
6
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY & RELATED STOCKHOLDER MATTERS
a. and c. Data regarding market price of Genlyte's common stock is
included in the "Quarterly Results of Operations" section of
Genlyte's 1997 Annual Report to Stockholders, which is
incorporated herein by reference. Genlyte's common stock is
traded on the NASDAQ National Market System under the symbol
"GLYT". Information concerning dividends and restrictions
thereon and Preferred Stock Purchase Rights are included in
the "Notes to the Consolidated Financial Statements" section
of Genlyte's 1997 Annual Report to Stockholders, which is
incorporated herein by reference.
b. The approximate number of common equity security holders is as
follows:
Approximate Number of
Holders of Record as of
Title of Class Year-end 1997
--------------------------------------------------------------------
Common Stock,
par value $.0l per share 1,567
ITEM 6. SELECTED FINANCIAL DATA
The information required for this item is included in Genlyte's 1997
Annual Report to Stockholders, which is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Reference is made to the "Management's Discussion and Analysis" section
of Genlyte's 1997 Annual Report to Stockholders, which is incorporated
herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Reference is made to the "Consolidated Financial Statements" and
"Quarterly Results of Operations" sections of Genlyte's 1997 Annual
Report to Stockholders, which is incorporated herein by reference.
Financial statement schedules are included in Part IV of this filing.
ITEM 9. CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
7
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required with respect to the Directors of Genlyte is
included in the "Election of Directors" section of the Proxy Statement
for the 1998 Annual Meeting of the Stockholders of Genlyte which has
been filed with the Securities and Exchange Commission and is
incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information with respect to executive compensation is included in
the "Compensation of Directors and Executive Compensation" section of
the Proxy Statement for the 1998 Annual Meeting of Stockholders of
Genlyte which has been filed with the Securities and Exchange
Commission and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required with respect to security ownership is included
in the "Voting Securities and Principal Holders Thereof" section of the
Proxy Statement for the 1998 Annual Meeting of Stockholders of Genlyte
which has been filed with the Securities and Exchange Commission and is
incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required with respect to relationships is included in
the "Compensation Committee Interlocks and Insider Participation" and
"Voting Securities and Principal Holders Thereof" section of the Proxy
Statement for the 1998 Annual Meeting of Stockholders of Genlyte which
has been filed with the Securities and Exchange Commission and is
incorporated herein by reference.
8
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
a) 1) FINANCIAL STATEMENTS
The following information is incorporated herein by reference to
Genlyte's 1997 Annual Report to Stockholders:
Report of Independent Public Accountants
Consolidated Statements of Income for the years ended December 31,
1997, 1996, and 1995
Consolidated Balance Sheets as of December 31, 1997 and 1996
Consolidated Statements of Cash Flows for the years ended December 31,
1997, 1996, and 1995
Consolidated Statements of Stockholders' Investment for the years ended
December 31, 1997, 1996, and 1995
Notes to Consolidated Financial Statements
2) FINANCIAL STATEMENT SCHEDULE
Report of Independent Public Accountants on Financial Statement
Schedule:
Schedule II -- Valuation and Qualifying Accounts
Other schedules are omitted because of the absence of conditions under
which they are required or because the required information is included
in the consolidated financial statements or notes thereto.
b) There were no filings on Form 8-K during the fourth quarter of 1997.
9
c) Exhibits
--------
Incorporated by
Description Reference to
- ----------- ------------
- - Amended and Restated Certificate Exhibit 3(b) to Genlyte's
of Incorporation of the Registration Statement on Form 8
Registrant, dated August 2, 1988 as filed with the Securities and
Exchange Commission on August 3,
1988
- - Amended and Restated Certificate Exhibit 3(a) to Genlyte's Form
of Incorporation of the 10-K filed with the Securities and
Registrant, dated May 9, 1990 Exchange Commission in March 1993
- - Amended and Restated By-Laws of Exhibit 3(c) to Genlyte's
the Registrant, as adopted on May Registration Statement on Form 8
16, 1988 as filed with the Securities and
Exchange Commission on August 3,
1988
- - Form of Stock Certificate for Exhibit 4(a) to Genlyte's
Genlyte Common Stock Registration Statement on Form 8
as filed with the Securities and
Exchange Commission on August 3,
1988
- - Stock Purchase Agreement between Exhibit 10(a) to Genlyte's
the Registrant and purchasers of Registration Statement on Form 8
Class B Stock of the Registrant, as filed with the Securities and
dated as of June 17, 1988 Exchange Commission on August 3,
1988
10
Incorporated by
Description Reference to
- ----------- ------------
- - Loan Agreement between The Genlyte Exhibit 10(b) to Genlyte's Form
Group Incorporated and the New 10-K filed with the Securities and
Jersey Economic Development Exchange Commission in March 1991
Authority dated April 1, 1990,
replacing the First Mortgage and
Security Agreement between the New
Jersey Economic Development
Authority and KCS Lighting, Inc.,
dated December 20, 1984 (assigned
to and assumed by the Registrant
effective December 31, 1986)
- - Loan Agreement between The Genlyte Exhibit 10(c) to Genlyte's Form
Group Incorporated and the New 10-K filed with the Securities and
Jersey Economic Development Exchange Commission in March 1991
Authority dated June 1, 1990,
replacing the Loan Agreement
between KCS Lighting, Inc. and the
New Jersey Economic Development
Authority, dated December 20, 1984
(assigned to and assumed by the
Registrant effective December 31,
1986)
- - Management Incentive Compensation Exhibit 10(i) to Genlyte's
Plan Registration Statement on Form 8
as filed with the Securities and
Exchange Commission on August 3,
1988
- - Genlyte 1988 Stock Option Plan Exhibit 10(j) to Genlyte's
Registration Statement on Form 8
as filed with the Securities and
Exchange Commission on August 3,
1988
11
Incorporated by
Description Reference to
- ----------- ------------
- - Tax Sharing Agreement between Exhibit 10(k) to Genlyte's
Genlyte and Bairnco Corporation, Registration Statement on Form 8
dated July 15, 1988 as filed with the Securities and
Exchange Commission on August 3,
1988
- - Merger and Assumption Agreement, Exhibit 10(d) to Genlyte's Form
dated as of December 28, 1990, by 10-K filed with the Securities and
and between Genlyte and Lightolier Exchange Commission in March 1991
- - Form of Employment Protection Exhibit to Genlyte's Form 10-Q
Agreement entered into between filed with the Securities and
Genlyte and certain key executives Exchange Commission in August 1990
- - Loan Agreement between The Genlyte Exhibit 4(c) to Genlyte's Form
Group Incorporated and Jobs for 10-K filed with the Securities and
Fall River, Inc., dated as of July Exchange Commission in March 1995
13, 1994
Other Exhibits included herein:
(4a) Amended and Restated Credit Agreement between The Genlyte Group
Incorporated and the applicable banks named therein, dated April 30,
1997
(11) Calculation of Basic and Diluted Earnings per Share
(13) Annual Report to Stockholders
(21) Subsidiaries of the Registrant
(23) Consent of Independent Public Accountants
(27) Financial Data Schedule
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Genlyte has
duly caused this Annual Report to be signed on its behalf by the undersigned
thereunto duly authorized.
THE GENLYTE GROUP INCORPORATED
Registrant
Date: March 25, 1998 By /s/ Neil M. Bardach
----------------- -------------------
March 25, 1998 Neil M. Bardach
V.P. Finance - CFO & Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
is signed below by the following persons on behalf of Genlyte and in the
capacities and on the date indicated.
/s/ Avrum I. Drazin 3/25/98
- ------------------------------------------- -------------------
Avrum I. Drazin - Chairman of the Board
/s/ Larry Powers 3/25/98
- ------------------------------------------- -------------------
Larry Powers, President and
Chief Executive Officer
(Principal Executive Officer)
/s/ Glenn W. Bailey 3/25/98
- ------------------------------------------- -------------------
Glenn W. Bailey - Director
/s/ Robert B. Cadwallader 3/25/98
- ------------------------------------------- -------------------
Robert B. Cadwallader - Director
/s/ David M. Engelman 3/25/98
- ------------------------------------------- -------------------
David M. Engelman - Director
/s/ Fred Heller 3/25/98
- ------------------------------------------- -------------------
Fred Heller - Director
/s/ Frank Metzger 3/25/98
- ------------------------------------------- -------------------
Frank Metzger - Director
13
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
TO THE GENLYTE GROUP INCORPORATED:
We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements included in The Genlyte Group Incorporated
Annual Report to Stockholders for the year ended December 31, 1997, incorporated
by reference in this Form 10-K, and have issued our report thereon dated January
21, 1998. Our audits were made for the purpose of forming an opinion on those
statements taken as a whole. The schedule listed in Item 14a(2) is the
responsibility of the Company's management and is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part of
the basic consolidated financial statements. This schedule has been subjected to
the auditing procedures applied in the audits of the basic consolidated
financial statements and, in our opinion, fairly states in all material respects
the financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.
ARTHUR ANDERSEN LLP
New York, New York
January 21, 1998
14
THE GENLYTE GROUP INCORPORATED AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
($ in thousands)
Additions
Balance at Charged to Balance
Beginning Costs and at End
of Year Expenses Deductions of Year
----------------- ----------------- ----------------- -----------------
YEAR-ENDED DECEMBER 31, 1997
Allowance for Doubtful Accounts $ 8,222 $ 2,100 $ (3,458) $ 6,864
YEAR-ENDED DECEMBER 31, 1996
Allowance for Doubtful Accounts $ 5,302 $ 3,452 $ (532) $ 8,222
YEAR-ENDED DECEMBER 31, 1995
Allowance for Doubtful Accounts $ 3,551 $ 3,315 $ (1,564) $ 5,302
15