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CONFORMED
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
Commission File Number 0-255
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2002
--------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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GRAYBAR ELECTRIC COMPANY, INC.
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(Exact name of registrant as specified in its charter)
NEW YORK 13 - 0794380
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(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
34 NORTH MERAMEC AVENUE, ST. LOUIS, MO 63105
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(Address of principal executive offices) (Zip Code)
POST OFFICE BOX 7231, ST. LOUIS, MO 63177
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(Mailing Address) (Zip Code)
Registrant's telephone number, including area code: (314) 573 - 9200
-------------------
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
------- --------
Common Stock Outstanding at October 31, 2002: 6,203,227
---------------------
(Number of Shares)
Item 1. Financial Statements
PART I
------
CONSOLIDATED BALANCE SHEETS
---------------------------
(Dollars Stated in Thousands)
(Except for Share and Per Share Data)
SEPTEMBER 30, 2002 DECEMBER 31, 2001
----------------------------- -------------------------
CURRENT ASSETS
Cash $ 25,806 $ 10,079
----------------------------- -------------------------
Trade receivables 552,131 592,752
----------------------------- -------------------------
Merchandise inventory 511,320 612,976
----------------------------- -------------------------
Other current assets 11,423 14,442
----------------------------- -------------------------
Total current assets 1,100,680 1,230,249
----------------------------- -------------------------
PROPERTY
Land 25,603 25,402
----------------------------- -------------------------
Buildings and permanent fixtures 234,876 233,979
----------------------------- -------------------------
Furniture and fixtures 169,096 168,918
----------------------------- -------------------------
Software 27,040 1,510
----------------------------- -------------------------
Capital equipment leases 24,159 24,159
----------------------------- -------------------------
Less - Accumulated depreciation 203,890 187,492
----------------------------- -------------------------
Net property 276,884 266,476
----------------------------- -------------------------
DEFERRED FEDERAL INCOME TAXES 12,420 10,653
----------------------------- -------------------------
OTHER ASSETS 32,413 28,620
----------------------------- -------------------------
$ 1,422,397 $ 1,535,998
============================= =========================
CURRENT LIABILITIES
Short-term borrowings $ 11,891 $ 98,737
----------------------------- -------------------------
Current portion of long-term debt 26,236 25,795
----------------------------- -------------------------
Trade accounts payable 497,703 495,143
----------------------------- -------------------------
Other accrued taxes 15,127 11,760
----------------------------- -------------------------
Accrued payroll and benefit costs 17,869 26,816
----------------------------- -------------------------
Dividends payable --- 6,299
----------------------------- -------------------------
Other payables and accruals 57,736 51,753
----------------------------- -------------------------
Total current liabilities 626,562 716,303
----------------------------- -------------------------
POSTRETIREMENT BENEFITS LIABILITY 77,431 77,431
----------------------------- -------------------------
PENSION LIABILITY 19,223 19,223
----------------------------- -------------------------
LONG-TERM DEBT 282,303 315,549
----------------------------- -------------------------
2
CONSOLIDATED BALANCE SHEETS
---------------------------
(Dollars Stated in Thousands)
(Except for Share and Per Share Data)
SEPTEMBER 30, 2002 DECEMBER 31, 2001
------------------------- -------------------------
SHAREHOLDERS' EQUITY
CAPITAL STOCK
Preferred:
---------
Par value $20 per share
Authorized 300,000 shares
SHARES
------
2002 2001
---- ----
Issued to shareholders 2,593 2,593
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In treasury, at cost (143) (27)
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Outstanding 2,450 2,566 49 51
------------- ------------- ------------------------- -------------------------
Common:
------
Stated value $20 per share
Authorized 7,500,000 shares
SHARES
------
2002 2001
---- ----
Issued to voting trustees 6,166,405 5,427,152
------------- -------------
Issued to shareholders 316,692 305,754
------------- -------------
In treasury, at cost (251,966) (11,700)
------------- -------------
Outstanding 6,231,131 5,721,206 124,623 114,424
------------- ------------- ------------------------- -------------------------
Advance payments on subscriptions
to common stock 52 ---
------------------------- -------------------------
Retained earnings 312,330 310,521
------------------------- -------------------------
Accumulated other comprehensive
income (loss) (20,176) (17,504)
------------------------- -------------------------
TOTAL SHAREHOLDERS' EQUITY 416,878 407,492
------------------------- -------------------------
$ 1,422,397 $ 1,535,998
========================= =========================
See accompanying Notes to Consolidated Financial Statements
3
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(Dollars Stated in Thousands)
(Except for Share and Per Share Data)
QUARTER ENDED
SEPTEMBER 30, 2002 SEPTEMBER 30, 2001
-------------------------- --------------------------
GROSS SALES, net of returns and allowances $ 1,016,893 $ 1,198,536
-------------------------- --------------------------
Less - Cash discounts 3,110 3,218
-------------------------- --------------------------
NET SALES 1,013,783 1,195,318
-------------------------- --------------------------
COST OF MERCHANDISE SOLD 824,963 984,223
-------------------------- --------------------------
Gross margin 188,820 211,095
-------------------------- --------------------------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 165,996 177,951
-------------------------- --------------------------
DEPRECIATION AND AMORTIZATION 8,896 8,662
-------------------------- --------------------------
Income from operations 13,928 24,482
-------------------------- --------------------------
OTHER INCOME, net 1,675 2,305
-------------------------- --------------------------
INTEREST EXPENSE 6,574 9,175
-------------------------- --------------------------
Income before provision for income taxes 9,029 17,612
-------------------------- --------------------------
PROVISION FOR INCOME TAXES
Current 3,571 6,799
-------------------------- --------------------------
Deferred (96) 159
-------------------------- --------------------------
Total provision for income taxes 3,475 6,958
-------------------------- --------------------------
NET INCOME $ 5,554 $ 10,654
========================== ==========================
NET INCOME PER SHARE OF COMMON STOCK $ .89 $ 1.83
========================== ==========================
DIVIDENDS
Preferred - $.25 per share $ 1 $ 1
-------------------------- --------------------------
Common - $.30 per share 1,872 1,734
-------------------------- --------------------------
$ 1,873 $ 1,735
========================== ==========================
See accompanying Notes to Consolidated Financial Statements
4
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(Dollars Stated in Thousands)
(Except for Share and Per Share Data)
NINE MONTHS ENDED
SEPTEMBER 30, 2002 SEPTEMBER 30, 2001
-------------------------- --------------------------
GROSS SALES, net of returns and allowances $ 3,036,767 $ 3,753,174
-------------------------- --------------------------
Less - Cash discounts 8,982 10,121
-------------------------- --------------------------
NET SALES 3,027,785 3,743,053
-------------------------- --------------------------
COST OF MERCHANDISE SOLD 2,466,985 3,075,327
-------------------------- --------------------------
Gross margin 560,800 667,726
-------------------------- --------------------------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 507,164 581,734
-------------------------- --------------------------
DEPRECIATION AND AMORTIZATION 25,462 24,679
-------------------------- --------------------------
Income from operations 28,174 61,313
-------------------------- --------------------------
OTHER INCOME, net 5,472 9,247
-------------------------- --------------------------
INTEREST EXPENSE 21,462 30,771
-------------------------- --------------------------
Income before provision for income taxes 12,184 39,789
-------------------------- --------------------------
PROVISION FOR INCOME TAXES
Current 4,978 15,270
-------------------------- --------------------------
Deferred (288) 447
-------------------------- --------------------------
Total provision for income taxes 4,690 15,717
-------------------------- --------------------------
NET INCOME $ 7,494 $ 24,072
========================== ==========================
NET INCOME PER SHARE OF COMMON STOCK (NOTE 2) $ 1.20 $ 4.09
========================== ==========================
DIVIDENDS
Preferred - $.75 per share $ 2 $ 2
-------------------------- --------------------------
Common - $.90 per share 5,683 5,271
-------------------------- --------------------------
$ 5,685 $ 5,273
========================== ==========================
See accompanying Notes to Consolidated Financial Statements
5
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(Dollars Stated in Thousands)
NINE MONTHS ENDED SEPTEMBER 30,
2002 2001
-------------------------- --------------------------
CASH FLOWS FROM OPERATIONS
Net Income $ 7,494 $ 24,072
-------------------------- --------------------------
Adjustments to reconcile net income
to cash provided by operations:
Depreciation and amortization 25,462 24,679
-------------------------- --------------------------
Deferred income taxes (288) 447
-------------------------- --------------------------
Gain on sale of property --- (2,539)
-------------------------- --------------------------
Changes in assets and liabilities:
Trade receivables 40,621 94,718
-------------------------- --------------------------
Merchandise inventory 101,656 82,444
-------------------------- --------------------------
Other current assets 3,019 19,996
-------------------------- --------------------------
Other assets (3,793) (7,479)
-------------------------- --------------------------
Trade accounts payable 2,560 47,406
-------------------------- --------------------------
Accrued payroll and benefit costs (8,947) (33,954)
-------------------------- --------------------------
Other accrued liabilities 5,198 (31,086)
-------------------------- --------------------------
165,488 194,632
-------------------------- --------------------------
Net cash provided by operations 172,982 218,704
-------------------------- --------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property 6,034 2,886
-------------------------- --------------------------
Capital expenditures for property (41,904) (40,086)
-------------------------- --------------------------
Net cash used by investing activities (35,870) (37,200)
-------------------------- --------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net decrease in short-term borrowings (86,846) (266,935)
-------------------------- --------------------------
Proceeds from long-term debt --- 100,000
-------------------------- --------------------------
Repayment of long-term debt (29,276) (16,980)
-------------------------- --------------------------
Principal payments under capital equipment leases (3,528) (2,654)
-------------------------- --------------------------
Sale of common stock 15,056 370
-------------------------- --------------------------
Purchase of treasury stock (4,807) (4,800)
-------------------------- --------------------------
Dividends paid (11,984) (11,615)
-------------------------- --------------------------
Net cash used by financing activities (121,385) (202,614)
-------------------------- --------------------------
NET INCREASE (DECREASE) IN CASH 15,727 (21,110)
-------------------------- --------------------------
CASH, BEGINNING OF YEAR 10,079 27,614
-------------------------- --------------------------
CASH, END OF THIRD QUARTER $ 25,806 $ 6,504
========================== ==========================
See accompanying Notes to Consolidated Financial Statements
6
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
----------------------------------------------------------
FOR THE NINE MONTHS ENDED
-------------------------
SEPTEMBER 30, 2002 AND 2001
---------------------------
(Dollars Stated in Thousands)
COMMON ACCUMULATED
STOCK OTHER
COMMON PREFERRED SUBSCRIBED, RETAINED COMPREHENSIVE
STOCK STOCK UNISSUED EARNINGS INCOME (LOSS) TOTAL
------------ -------------- ------------- ------------- ------------------- -------------
December 31, 2000 $ 119,828 $ 57 $ 49 $ 290,405 $ (542) $ 409,797
-------------
Net Income 24,072 24,072
Currency Translation Adjustments (427) (427)
Cumulative Impact of Adoption of
SFAS 133 (net of tax of $877) (1,342) (1,342)
Unrealized Gain/(Loss) from
Interest Rate Swap (net of tax
of $881) (1,350) (1,350)
-------------
Comprehensive Income 20,953
-------------
Stock Issued 377 377
Stock Redeemed (4,795) (5) (4,800)
Advance Payments (7) (7)
Dividends Declared (5,273) (5,273)
------------ -------------- ------------- ------------- ------------------- -------------
September 30, 2001 $ 115,410 $ 52 $ 42 $ 309,204 $ (3,661) $ 421,047
============ ============== ============= ============= =================== =============
COMMON ACCUMULATED
STOCK OTHER
COMMON PREFERRED SUBSCRIBED, RETAINED COMPREHENSIVE
STOCK STOCK UNISSUED EARNINGS INCOME (LOSS) TOTAL
-------------- -------------- ------------- ------------- ------------------- -------------
December 31, 2001 $ 114,424 $ 51 $ 0 $ 310,521 $ (17,504) $ 407,492
-------------
Net Income 7,494 7,494
Currency Translation Adjustments (246) (246)
Unrealized Gain/(Loss) from
Interest Rate Swap (net of tax
of $1,534) (2,426) (2,426)
-------------
Comprehensive Income 4,822
-------------
Stock Issued 15,004 15,004
Stock Redeemed (4,805) (2) (4,807)
Advance Payments 52 52
Dividends Declared (5,685) (5,685)
-------------- -------------- ------------- ------------- ------------------- -------------
September 30, 2002 $ 124,623 $ 49 $ 52 $ 312,330 $ (20,176) $ 416,878
============== ============== ============= ============= =================== =============
See accompanying Notes to Consolidated Financial Statements
7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AND OTHER INFORMATION
---------------------------
(Dollars Stated in Thousands)
(Except for Share and Per Share Data)
Note 1
- ------
The condensed financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading. It is suggested that these condensed financial
statements be read in conjunction with the financial statements and the
notes thereto included in the Company's latest annual report on Form 10-K.
In the opinion of the Company, the quarterly report includes all
adjustments, consisting of normal recurring accruals, necessary for the fair
presentation of the financial statements presented. Such interim financial
information is subject to year-end adjustments and independent audit.
Results for interim periods are not necessarily indicative of
results to be expected for the full year.
Note 2
- ------
NINE MONTHS 2002 NINE MONTHS 2001
----------------------------- -------------------------
Earnings for Nine Months $ 7,494 $ 24,072
----------------------------- -------------------------
Dividends on Preferred Stock 2 2
----------------------------- -------------------------
Available for Common Stock $ 7,492 $ 24,070
----------------------------- -------------------------
Average Common Shares Outstanding 6,262,246 5,878,816
----------------------------- -------------------------
Earnings Per Share $ 1.20 $ 4.09
----------------------------- -------------------------
8
Note 3
- ------
The Company entered into an accounts receivable securitization
program in June 2000 which provides for the sale of the Company's trade
accounts receivables to a wholly owned, bankruptcy remote, special purpose
subsidiary, Graybar Commerce Corporation. The trade accounts receivable
purchases are financed through the issuance of commercial paper under a
revolving liquidity facility. Under the securitization program, Graybar
Commerce Corporation has granted a security interest in its trade accounts
receivable. The trade accounts receivable sold to Graybar Commerce
Corporation under the program are fully consolidated in trade receivables in
the Company's consolidated balance sheets. There were no borrowings
outstanding under the securitization program at September 30, 2002. The
Company has $275 million available for borrowing under the program at
September 30, 2002. The program expires in October 2003.
Note 4
- ------
On January 1, 2002 the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets."
Under SFAS 142, goodwill and indefinite-lived intangible assets will no
longer be amortized but rather will be tested annually for impairment. The
effect of amortization expense related to goodwill on net income in prior
periods was not material. As of September 30, 2002 the Company has completed
its initial impairment test and concluded that there is no impact on
earnings or the financial position of the Company based on the results.
Note 5
- ------
Comprehensive income is reported in the Consolidated Statements of
Changes in Shareholders' Equity. Comprehensive income for the quarters ended
September 30, 2002 and 2001 was $3,228 and $8,681, respectively.
9
Item 2. MANAGEMENT'S DISCUSSION & ANALYSIS
OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
(Dollars Stated in Thousands)
RESULTS OF OPERATIONS
- ---------------------
Net sales in the first nine months of 2002 were 19.1% lower than in
the first nine months of 2001. The lower net sales resulted from a generally
depressed economy in the market sectors in which the Company operates. The
decrease in communications market sales when comparing the first nine months
of 2002 to the first nine months of 2001 was significantly more than the
decrease in sales in the electrical market.
Gross margin in the first nine months of 2002 decreased 16.0%
compared to the first nine months of 2001 primarily due to decreased sales
in the electrical and communications markets.
The decrease in selling, general and administrative expenses in the
first nine months of 2002 compared to the first nine months of 2001 occurred
largely because of adjustments in personnel complement and reductions in
compensation and related expenses of approximately $41,000.
Interest expense decreased in the first nine months of 2002
compared to the first nine months of 2001 primarily due to lower interest
rates on short-term borrowings and decreased levels of short-term borrowings
required to finance lower levels of inventory and receivables.
Other income includes service charges for special services provided
to one customer of $2,440 and $3,191 and gains on sale of property of $0 and
$2,539 in the first nine months of 2002 and 2001, respectively.
The combined effect of the decreases in gross margin and other
income, together with the increase in depreciation and amortization and
decreases in selling, general and administrative expenses and interest
expense, resulted in a decrease in pretax earnings of $27,605 in the first
nine months of 2002 compared to the same period in 2001.
10
MANAGEMENT'S DISCUSSION & ANALYSIS
OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
(Dollars Stated in Thousands)
FINANCIAL CONDITION AND LIQUIDITY
- ---------------------------------
At September 30, 2002, current assets exceeded current liabilities
by $474,118, down $39,828 from December 31, 2001. The current assets at
September 30, 2002 were sufficient to meet the cash needs required to pay
current liabilities. The reduction in accounts receivable from December 31,
2001 to September 30, 2002 resulted primarily from the decrease in sales
experienced by the Company. The average number of days of sales in accounts
receivable has decreased during the first nine months of 2002. Merchandise
inventory levels were lower at September 30, 2002 when compared to December
31, 2001 inventory levels due largely to continuing reductions in specific
inventory carried to support customer contract agreements.
The Company is going to convert its existing computer systems to an
Enterprise Resource Planning (ERP) system over the course of the next
several years. The project is currently in the application design and
development stage, and the Company expects to begin implementation of the
new system in early 2003. The total project costs are expected to be
approximately $90,000. The Company plans to fund the project through a
combination of equipment leases and working capital. Project costs through
September 30, 2002 are approximately $34,000, of which $27,040 has been
capitalized. The Company expects that conversion to the new ERP system will
provide future benefits to its results of operations. The Company does not
have any other plans or commitments that would require significant amounts
of additional working capital.
At September 30, 2002, the Company had available to it unused lines
of credit amounting to $494,231. These lines are available to meet
short-term cash requirements of the Company. Included in the Company's lines
of credit is a Revolving Credit Loan Agreement with a group of banks at an
interest rate based on the London Interbank Offered Rate (LIBOR) which had
previously consisted of a $140,000, 364-day facility and a $205,000,
five-year facility. In July 2002 the Company elected to decline renewal of
the $140,000, 364-day facility. The $205,000, five-year facility agreement
expires in July 2004. There were no amounts outstanding under the Revolving
Credit Loan Agreement at September 30, 2002. Short-term borrowings
outstanding during 2002 through September 30 ranged from a minimum of
$11,891 to a maximum of $216,779.
The Company has funded its capital requirements from operations,
stock issuances to its employees and long-term debt. During the first nine
months of 2002, cash provided by operations amounted to $172,982 compared to
$218,704 cash provided by operations in the first nine months of 2001. Cash
provided from the sale of common stock and proceeds received on stock
subscriptions amounted to $15,056 in the first nine months of 2002.
Additional cash of approximately $142 will be provided in the remainder of
2002 as a result of payments to be made for stock subscribed to by employees
under the 2001 Common Stock Purchase Plan.
Capital expenditures for property for the nine-month periods ended
September 30, 2002 and 2001 were $41,904 and $40,086, respectively.
Purchases of treasury stock for the nine-month periods ended September 30,
2002 and 2001 were $4,807 and $4,800, respectively. Dividends paid for the
nine-month periods ended September 30, 2002 and 2001 were $11,984 and
$11,615, respectively.
11
Item 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
-----------------------------
There have been no material changes in the policies, procedures,
controls or risk profile from that provided in the Company's Annual Report
on Form 10-K for the year ended December 31, 2001.
Item 4. DISCLOSURE CONTROLS AND PROCEDURES
----------------------------------
Within the ninety-day period preceding the date of this report, an
evaluation was performed under the supervision and with the participation of
the Company's management, including the Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. Based on that evaluation, the
Company's management, including the Chief Executive Officer and Chief
Financial Officer, concluded that the Company's disclosure controls and
procedures were effective to ensure that information required to be
disclosed in the reports filed or submitted by the Company under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission's rules and
forms. There have been no significant changes in the Company's internal
controls or in other factors that could significantly affect these controls
subsequent to the date of the evaluation.
12
PART II: OTHER INFORMATION
--------------------------
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits furnished in accordance with provisions of Item
601 of Regulation S-K.
99.1 - Certification Pursuant to 18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 - Principal Executive
Officer.
99.2 - Certification Pursuant to 18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 - Principal Financial
Officer.
(b) Reports on Form 8-K.
Form 8-K filed with the Commission on August 12, 2002 -
Item 7. Financial Statements and Exhibits. Sworn
statements made by the Principal Executive Officer and the
Principal Financial Officer pursuant to Securities and
Exchange Commission Order 4-460.
13
SIGNATURES
----------
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.
November 13, 2002 GRAYBAR ELECTRIC COMPANY, INC.
-----------------------
(Date)
/S/R. A. REYNOLDS, JR.
---------------------------------------
R. A. REYNOLDS, JR.
PRESIDENT AND
PRINCIPAL EXECUTIVE OFFICER
/S/J. H. HINSHAW
---------------------------------------
J. H. HINSHAW
SENIOR VICE PRESIDENT AND
PRINCIPAL FINANCIAL OFFICER
/S/J. H. KIPPER
---------------------------------------
J. H. KIPPER
VICE PRESIDENT
AND COMPTROLLER
14
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Robert A. Reynolds, Jr., certify that:
1. I have reviewed this quarterly report on Form 10-Q of Graybar Electric
Company, Inc. (the "Registrant");
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the Registrant as of, and for, the periods presented in
this quarterly report;
4. The Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and
we have:
(a) designed such disclosure controls and procedures to ensure that
material information related to the Registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
(b) evaluated the effectiveness of the Registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The Registrant's other certifying officer and I have disclosed, based
on our most recent evaluation, to the Registrant's auditors and the
audit committee of Registrant's board of directors (or persons
performing the equivalent function);
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the Registrant's
ability to record, process, summarize and report financial data
and have identified for the Registrant's auditors any material
weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Registrant's
internal controls; and
6. The Registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: November 13, 2002
/s/ ROBERT A. REYNOLDS, JR.
----------------------------------------
Robert A. Reynolds, Jr.
President and Principal Executive Officer
15
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Juanita H. Hinshaw, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Graybar Electric
Company, Inc. (the "Registrant");
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the Registrant as of, and for, the periods presented in
this quarterly report;
4. The Registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and
we have:
(a) designed such disclosure controls and procedures to ensure that
material information related to the Registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
(b) evaluated the effectiveness of the Registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The Registrant's other certifying officer and I have disclosed, based
on our most recent evaluation, to the Registrant's auditors and the
audit committee of Registrant's board of directors (or persons
performing the equivalent function);
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the Registrant's
ability to record, process, summarize and report financial data
and have identified for the Registrant's auditors any material
weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the Registrant's
internal controls; and
6. The Registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: November 13, 2002
/s/ JUANITA H. HINSHAW
---------------------------------------
Juanita H. Hinshaw
Senior Vice President and
Principal Financial Officer
16
EXHIBIT INDEX
-------------
99.1 - Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 -
Principal Executive Officer.
99.2 - Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 -
Principal Financial Officer.
17