ITEM 1. BUSINESS - ----------------- General Development of Business - -------------------------------
Juno Lighting, Inc. began operations in 1976 and was incorporated in Illinois. It changed its state of incorporation to Delaware in 1983. Executive offices and principal plant are located at 2001 South Mt. Prospect Road, Des Plaines, Illinois 60017-5065, a suburb of Chicago; the telephone number is (847)827-9880. Juno also has facilities in the Los Angeles, Indianapolis, Toronto, Philadelphia, Dallas and Atlanta areas. The term "Juno" as used herein means Juno Lighting, Inc.; the term "Company" as used herein means Juno Lighting, Inc. and its subsidiaries, collectively.
Juno is a specialist in the design, manufacture and marketing of a full line of recessed and track lighting fixtures for use in new construction and remodeling of commercial, institutional and residential buildings. Juno's principal products use incandescent, high intensity discharge and fluorescent light sources and are designed for attractive appearance, reliable and flexible function, efficient operation and simple installation and servicing. Through Indy Lighting, Inc. ("Indy"), a wholly-owned subsidiary of Juno, the Company is also engaged in the marketing, design and manufacture of other incandescent and fluorescent lighting products with application in the commercial lighting market, primarily in department and chain stores. New product development is of prime importance to the Company and the Company has been innovative and responsive to its customers' needs both in the styling and technical development of its products.
Approximately 94% of the Company's sales in fiscal 1996 were in the United States and most of the balance in Canada. The Company's sales are made primarily to electrical distributors, as well as to certain wholesale lighting outlets.
The Company's products are marketed primarily to distributors who resell the products for use in new residential, commercial and institutional construction and in remodeling existing structures. The Company therefore cannot determine with any precision the percentage of its revenues derived from sales of products installed in each type of building nor can it determine the percentage of its products sold for new construction as compared to remodeling. The Company's sales, like those of the lighting fixture industry in general, are
partly dependent on levels of activity in new construction and remodeling. No assurances can be given that historic levels of activity will increase or be maintained.
Products - -------- The Company produces a wide variety of lighting fixtures and related equipment of both contemporary and traditional design, most of which are available in a variety of styles, sizes and finishes. Some styles differ from others only in size, light source capacity or other minor modifications. Some fixtures which Juno produces are designed to be installed in recesses in ceilings, while others are designed to be mounted on electrified tracks affixed to ceilings or walls, while still others are used in merchandise display cases.
Each recessed type fixture is composed of a housing and a separate trim. Housings may be fitted with a variety of trims offering a wide choice of diffusers, lenses and louvers to satisfy different optical and aesthetic requirements. Recessed fixtures are generally used for down-lighting, but by special configuration they also may be used for wall-washing and spot lighting. Juno has designed recessed lighting fixtures, sold under the Sloped Ceiling Down-Lights name, that provide lighting perpendicular to a floor from a sloped ceiling. Juno also produces a series of recessed lighting fixtures sold under the name Air-Loc which are designed to restrict the passage of air into and out of a residence through the fixture to minimize energy loss.
Juno's principal track lighting system, sold under the Trac-Master name, is made up of an electrified extruded aluminum channel (called the trac) and a wide variety of individual fixtures that may be connected at any point on the track. The individual fixtures are available in different geometric styles, light source sizes and finishes. Juno also has a line of track lighting produced under the name of Vector by Juno to complement its line of products under the Trac-Master name. This line is a lower priced but high quality line of products that do not contain some of the features of Trac-Master.
Track lighting products were originally developed for use in store displays. While this use continues to be important, track lighting is also popular in the residential market, particularly in the remodeling and do-it-yourself markets. One line of Juno trac fixtures allows each track light to be controlled by either of two switches and includes a series of miniature low voltage halogen track lights that provides higher lumens per watt than standard incandescent light sources.
Juno's most recent trac lighting product line is marketed under the name Trac 12. This is a low voltage miniature trac lighting system featuring small individual fixtures and a miniature lamp holder used in linear lighting applications.
Pursuant to an acquisition, several years ago Juno began manufacturing and selling a line of fixtures used in show case lighting applications under the name Danalite. This linear configuration which uses low voltage and fluorescent light sources is used in show cases as well as other merchandise display cases and certain other commercial and residential accent lighting applications. The products are made utilizing aluminum extruded channels in various lengths and finishes. These products primarily utilize miniature 12 volt halogen light sources with hinged sockets so that the process of changing the light source can be done easily.
Juno produces a line of energy efficient Exit and Emergency lighting products that are electronically powered and protected. This product line uses LED (light emitting diode) technology for its light source.
Indy produces a wide variety of commercial lighting fixture products for use primarily in department and chain stores. These products use incandescent, fluorescent, high intensity discharge and compact fluorescent light sources to provide specialty and general purpose lighting.
The Company believes its innovations in simplifying installation and improving the function of its lighting products have served to increase demand for its products.
Juno, Indy, Trac-Master, Real Nail, Air-Loc, and Vector by Juno are registered trademarks of Juno.
Production - ---------- Substantially all of the Company's products are designed and engineered by its staff. Tools, dies and molds are manufactured by outside sources to the Company's designs and specifications. Tooling is consigned to independent job shops, largely near the Company's manufacturing facilities, which fabricate and finish the components of the Company's products. Nevertheless, the Company inspects the components and assembles, tests, packages, stores and ships the finished products. Most assembly operations are performed at the Des Plaines plant and at Indy's Indianapolis assembly facilities.
The Company believes that utilization of sub-contractors with specialized skills is the most efficient method of manufacturing its products. The Company further believes that alternate tool making specialists and fabricators are generally available.
The Company spent approximately $4,309,000, $3,685,000 and $3,119,000 on research, development and testing of new products and development of related tooling in fiscal 1996, 1995 and 1994, respectively.
Sales and Distribution - ---------------------- The Company sells directly to distributors of lighting products, located throughout the United States and in Canada. Each of Juno's distributors maintains its own inventory of Juno products and in turn, sells to electrical contractors and builders, and in some cases, also sells at the retail level. Sales to distributors are made through the Company's own staff of sales managers and sales personnel and also through manufacturers' agents who sell other electrical products of a non-competitive character. The Company also seeks to have its products specified by architects, engineers and contractors for large commercial and institutional projects with actual sales made through the Company's distributors. The Company also sells to certain wholesale lighting outlets and national accounts.
Inventories of all items Juno produces are maintained at the Des Plaines plant and substantially all items in the Company's warehouses in the Atlanta, Dallas, Los Angeles, Philadelphia and Toronto areas. Inventories of Indy's products are maintained at Indy's Indianapolis facilities. Most orders are shipped from stock inventory within 48 hours of receipt.
Indy sells its products primarily to the commercial construction industry. Indy's products are generally shipped from the factory directly to the job site.
The Company is not dependent on any single customer or group of customers and no single customer accounted for as much as 5% of sales in fiscal 1996.
Competition - ----------- There are no published figures that identify the overall market for the Company's products. Nevertheless, the Company believes that Juno's sales place Juno among the five highest-selling manufacturers of track and recessed lighting products in the United States, but that two competitors have substantially larger sales. Since the Company introduced its line of Exit and Emergency lighting products in fiscal 1996, management believes that its share of this market has been insignificant. The Company estimates that there are more than fifty manufacturers of competing track, recessed and exit and emergency lighting products. The Company competes not only with manufacturers in its own fields, but also with manufacturers of a variety of fluorescent, high intensity discharge,exit and emergency and decorative lighting products. A number of competitors, including the Company's two largest competitors, are divisions or subsidiaries of larger companies which have substantially greater resources than the Company.
There is wide price variance in competitive products and the Company believes that Juno's line can be described as moderately priced in order to be attractive to the high-volume commercial and residential markets. However, lighting fixtures are often purchased in small quantities and, as a result, product features may be more important to a purchaser in small quantities than cost. The Company believes that its growth has been attributable principally to the design and construction of its products, the quality of its sales force and its reputation for prompt delivery and service.
Although the Company believes that it holds certain valuable patents, the Company does not believe that any one patent is material to its business, taken as a whole.
Employees - --------- The Company employs approximately 1,025 persons. Most of the Company's factory employees are represented by one of two unions. The expiration dates for the collective bargaining agreements pertaining to the Company's Des Plaines, Illinois, and Indianapolis, Indiana locations are September 1999 and September 1998, respectively.
ITEM 2.
ITEM 2. PROPERTIES - ------------------- The Company's executive offices and principal plant and warehouse facilities are located in Des Plaines, Illinois in buildings containing approximately 350,000 square feet of space. In March 1993, the Company purchased an approximately 33 acre site in Des Plaines, Illinois for approximately $5,100,000. This site will be the location of a new factory and corporate office facility (of approximately 525,000 square feet) to replace its current Des Plaines, Illinois facility. The Company is currently in the construction phase of its new factory and corporate office facility in Des Plaines, Illinois. The Company currently anticipates completing construction in the second half of 1997. The Company has entered into a contract and estimates that the total project cost, including estimates for the cost of furniture and equipment, will range between $22.0 and $22.5 million. This forward looking statement is subject to certain risks described in Management's Discussion and Analysis of Financial Condition and Results of Operations. The new facility will be financed out of existing corporate funds. When the new facility is occupied, the Company plans to sell the three buildings (350,000 square feet) it currently occupies in Des Plaines, Illinois. Juno owns distribution warehouses in New Jersey, Georgia, and Brampton, Ontario which have, in the aggregate, approximately 140,700 square feet of floor space and owns a 130,000 square foot assembly and general office facility in Indianapolis, Indiana for its Indy Lighting, Inc. subsidiary. The Company leases two additional distribution warehouses for relatively short terms which have, in the aggregate, approximately 92,000 square feet of floor space. These warehouse leases call for an aggregate annual rental of approximately $314,000. The Company's facilities are modern, considered adequate for its business as presently conducted and experience varying levels of utilization.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS - -------------------------- On October 8, 1996, Juno Online Services, L.P. ("Juno Online") filed a complaint (Civil Action No. 96-1505-A) in the United States District Court, Eastern District of Virginia against Juno and Network Solutions, Inc. ("NSI") seeking declaratory judgment that Juno Online's use of the word "Juno" does not infringe on Juno's registered trademarks, and alleging trademark misuse and Lanham Act violations by Juno. The complaint seeks injunctive relief and damages (including treble damages and punitive damages of $100 million). Juno Online voluntarily dismissed NSI from the case. The action arose after Juno sent a letter to NSI, which is the exclusive registrar of Internet "domain names," informing NSI of Juno's belief that Juno
Online's use of the word "JUNO" in its domain name infringes upon Juno's trademark rights under the Lanham Act.
Juno filed a motion to dismiss based on lack of personal jurisdiction, or in the alternative, a motion to transfer for improper venue or to a more convenient forum. The court denied the motion to dismiss, but granted the motion to transfer the case to the United States District Court for the Northern District of Illinois. The transfer order was entered on January 13, 1997 and the case is currently awaiting docketing in the Northern District of Illinois.
Juno intends to vigorously defend itself in this action. While no assurance can be given as to the outcome of this case, Juno believes that this case will not have a material adverse effect on its financial condition or results of operations.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - ------------------------------------------------------------
None.
Executive Officers Of The Registrant - ------------------------------------
The following table gives certain information with respect to the Executive Officers of the Company as of January 31, 1997:
Name Age Positions Held - ---- --- -------------- Robert S. Fremont 72 Chairman of the Board, Chief Executive Officer and Director Ronel W. Giedt 58 President, Chief Operating Officer and Director Glenn R. Bordfeld 50 Vice President, Sales Thomas W. Tomsovic 55 Vice President, Operations and Director George J. Bilek 42 Vice President, Finance and Treasurer Charles F. Huber 55 Vice President, Corporate Development
There are no family relationships among the above officers, nor an arrangement or understanding between any
officer and any other person pursuant to which the officer was elected. None of the officers has been involved in any legal proceedings of the nature described in Item 401(f) of Regulation S-K. All officers were last elected to their present positions with Juno on April 30, 1996. The term of each officer of Juno expires at the meeting of the Board of Directors on the date of the 1997 Annual Meeting of the Stockholders.
ROBERT S. FREMONT founded the Company in 1976, has been a Director since 1976 and was its President through November 30, 1994. Mr. Fremont has been Chairman of the Board and Chief Executive Officer since December 1, 1994. Mr. Fremont was Treasurer of the Company from 1976 to April, 1990.
RONEL W. GIEDT served as President of Indy Lighting, the Company's wholly-owned subsidiary, from 1988 to November 30, 1994. Mr. Giedt has served as President and Chief Operating Officer of the Company since December 1, 1994. Mr. Giedt has been a Director since 1991.
GLENN R. BORDFELD has been Vice President, Sales since July, 1991. He was employed by the Company as its National Sales Manager from November, 1988 to July, 1991; its Assistant Sales Manager from November, 1985 to November, 1988 and its Advertising Manager from November, 1982 to November, 1985.
THOMAS W. TOMSOVIC has been employed by the Company since its founding in 1976. He was elected Vice President, Manufacturing in July, 1983 and Vice President, Operations in June, 1986. Mr. Tomsovic has been a Director since June, 1986.
GEORGE J. BILEK has been Vice President, Finance and Treasurer since April, 1990. He was employed by the Company as its Comptroller from September, 1985 to April, 1990.
CHARLES F. HUBER has been Vice President, Corporate Development since December, 1992. From January, 1989 to December, 1992 he was employed by the Company as the Director of Corporate Development. From October, 1984 to January, 1989 he was employed by Reliance Electric, Inc., a manufacturer and distributor of electrical products, as its Vice President and General Manager.
PART II -------
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED - ---------------------------------------------------------- STOCKHOLDER MATTERS - -------------------
Common Stock and Dividend Information
The following table sets forth, for the fiscal years indicated, the range of high and low sales prices as reported by the NASDAQ National Market System.
As of January 31, 1997 there were 304 holders of record of Common Stock, at least 300 of which own 100 or more shares.
Fiscal 1996 Fiscal 1995
Dividends Dividends High Low Per Share High Low Per Share ---- --- --------- ---- --- ---------
First Quarter 18-1/2 15 $.08 20-3/4 16-1/4 $.07
Second Quarter 18-1/8 13 .08 21 17-3/8 .07
Third Quarter 17-1/8 14-5/8 .08 18-1/4 15-3/4 .08
Fourth Quarter 17-1/4 14-1/2 .08 17-3/4 14 .08
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA - -------------------------------- FINANCIAL HIGHLIGHTS
(in thousands except per share amounts) Year ended November 30, 1996 1995 1994 1993 1992 ---- ---- ---- ---- ----
Net Sales $131,479 $126,364 $126,777 $109,098 $ 96,633
Gross Profit $ 63,160 $ 61,279 $ 65,549 $ 55,861 $ 47,656
Net income $ 19,897 $ 19,974 $ 22,907 $ 18,213 $ 15,321
Percent of net income to 15.1% 15.8% 18.1% 16.7% 15.9% net sales
Net income per common share $1.08 $1.08 $1.23 $.98 $.83
Cash dividends per common $ .32 $ .30 $ .26 $ .22 $.17 share
Total Assets $178,181 $160,089 $145,756 $126,266 $111,278
Long - Term Debt $ 4,433 $ 5,976 $ 6,404 $ 6,856 $ 7,304
Stockholders' Equity $155,661 $141,368 $126,748 $107,977 $ 93,832
Stockholders' Equity per $8.41 $7.66 $6.87 $5.87 $5.11 common share
Working Capital $104,465 $102,294 $ 89,451 $ 72,964 $ 67,165
Current Ratio 7.5 to 1 10.6 to 1 9.5 to 1 8.8 to 1 8.8 to 1
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL - ---------------------------------------------------------- CONDITION AND RESULTS OF OPERATIONS ----------------------------------- Results of Operations - --------------------- FISCAL 1996 COMPARED TO FISCAL 1995. For the fiscal year ended November 30, 1996, net sales increased approximately $5,115,000 or 4.0% to $131,479,000 from $126,364,000 for the like period in 1995. This increase is due primarily to sales of new products introduced in 1996 and improved sales through its wholly- owned subsidiary, Indy Lighting, Inc. These increases were offset by continuing price competition and sluggish demand from certain end use markets during the first half of 1996. Sales through Juno's Canadian subsidiary increased 9.7% to $7,711,000 for the year ended November 30, 1996 compared to $7,032,000 for the like period in 1995.
Gross profit expressed as a percentage of sales decreased slightly to 48.0% in fiscal 1996 compared to 48.5% in fiscal 1995. Improvements resulting from reductions in raw material costs and ongoing cost reductions were offset by one-time expenditures in the first quarter of 1996 resulting from the labor contract settlement, increases in aggregate discounting to customers, changes in product sales mix and general inflationary cost increases incurred in the first half of 1996.
Selling, general and administrative expenses as a percentage of sales increased to 28.0% in fiscal 1996 compared to 26.6% in fiscal 1995 due primarily to advertising and promotional costs associated with new product introductions, increases in freight costs and increases in salaries and benefits.
The effective income tax rate for fiscal 1996 decreased to 33.9% compared to 35.4% for fiscal 1995. Since the Company's investment portfolio consists largely of municipal bonds, the interest earned is substantially tax exempt. Therefore, in periods when operating earnings are down relative to tax exempt income, the relationship of tax exempt income to total income increases thus producing a lower effective income tax rate.
FISCAL 1995 COMPARED TO FISCAL 1994. For the fiscal year ended November 30, 1995, net sales decreased approximately $413,000 to $126,364,000 from $126,777,000 for the like period in 1994. In Management's opinion, increased sales from sales promotions in the first half of the year, distributor price increases and improved sales through the Company's wholly owned subsidiary, Indy Lighting, Inc. were offset by sluggish demand from certain end use markets in the second half of the year, increased price competition and delays in the planned introduction of certain new products. Sales through Juno's Canadian subsidiary decreased .5% to $7,032,000 for the year ended November 30, 1995 compared to $7,069,000 for the like period in 1994.
Gross profit expressed as a percentage of sales decreased to 48.5% in fiscal 1995 compared to 51.7% in fiscal 1994. Approximately one third of the decrease in margin was due to increases in raw material costs, approximately one fourth was due to underabsorbed indirect labor costs resulting from flat sales, with the remainder due, to a lesser extent, to sales discounting to customers and increases in employee health insurance costs for the direct labor work force.
Selling, general and administrative expenses as a percentage of sales increased to 26.6% in fiscal 1995 compared to 25.2% in fiscal 1994 due primarily to increases in salaries and benefits. These increases in staffing were necessary to support expected growth in current and future business and to improve performance in critical operating areas such as marketing and sales training.
The effective income tax rate for fiscal 1995 decreased to 35.4% compared to 37.0% for fiscal 1994. Since the Company's investment portfolio consists largely of municipal bonds, the interest earned is substantially tax exempt. Therefore, in periods when operating earnings are down compared to prior years, the relationship of tax exempt income to total income increases thus producing a lower effective income tax rate.
INFLATION While management believes it has generally been successful in controlling the prices it pays for materials and passing on increased costs by increasing its prices, no assurances can be given as to the Company's future success in limiting material price increases or that it will be able to fully reflect any material price increases in the prices it charges its customers or fully offset such price increases through improved efficiencies.
Financial Condition - ------------------- FISCAL 1996 The Company generated positive cash flow from operating activities of $22,162,000 comprised principally of net income, depreciation and amortization, and an increase in accrued liabilities (collectively aggregating $27,365,000), net of increases in inventory ($3,692,000) and accounts receivable ($1,965,000). In order to maintain the Company's commitment to prompt delivery of product to its customers and to support the Company's planned move to its new facility in 1997, inventory increased by 18.9% compared to 1995 levels. Accounts receivable increased 11.7% which approximates the increase in the sales volume for the fourth quarter of 1996 compared to 1995. Net property and equipment increased 32.2% and accrued liabilities increased 70.9% due primarily to construction in process for the new facility.
The Company used the net cash provided from operating activities to finance capital expenditures of $13,316,000, increase its investment portfolio by $5,695,000, and pay dividends of $5,903,000, which reflected a quarterly dividend rate of $.08 per share.
The following sentences are forward-looking statements regarding the Company's completion of its new factory and corporate office facility in Des Plaines, Illinois and are accompanied by the cautionary language set forth below.
The Company is currently in the construction phase of its new factory and corporate office facility in Des Plaines, Illinois. The Company currently anticipates completing construction in the second half of 1997. The Company has entered into a contract and estimates that the total project cost, including estimates for the cost of furniture and equipment, will range between $22.0 and $22.5 million. The new facility will be financed out of existing corporate funds.
The preceding forward-looking statements involve risks and uncertainties. In particular, risks and uncertainties relating to cost estimates for constructing and moving into the new facility include the pricing, quality and timeliness of performance of various contractors, subcontractors and providers of goods and services; cost variances associated with availability and changing prices of materials and labor; weather conditions; changes in construction plans and other contingencies associated with commercial construction and equipment installation. Actual results could differ materially from those stated. Accordingly, no assurance can be given that the estimated time table or actual costs for completion of the facility will not differ materially from such estimates. The Company has no obligation to update these forward-looking statements.
FISCAL 1995 The Company generated positive cash flow from operating activities of $20,166,000 comprised principally of net income, depreciation and amortization, and an increase in accounts payable (collectively aggregating $23,469,000), net of increases in inventory ($1,372,000) and prepaid expenses ($1,727,000). In order to maintain the Company's commitment to prompt delivery of product to its customers, inventory increased by 7.5% compared to 1994 levels. Prepaid expenses increased 37.1% due primarily to expenditures for product catalogs and sales literature associated with new product introductions for 1996. The Company used the net cash provided from operating activities to finance capital expenditures of $3,708,000, increase its investment portfolio by $7,933,000, repurchase 67,500 shares of its outstanding common stock ($1,034,000) and pay dividends of $5,546,000, which reflected an increase in the quarterly dividend rate to $.08 per share for the third and fourth quarters of the year from $.07 per share for the first and second quarters of the year.
On November 1, 1995, the Board of Directors authorized the purchase by the Company of up to 1,000,000 shares of its outstanding common stock. The authorization is effective for a 12-month period.
FISCAL 1994 The Company generated positive cash flow from operating activities of $22,902,000 comprised principally of net income, depreciation and amortization, and an increase in accrued liabilities (collectively aggregating $27,114,000), net of increases in accounts receivable ($2,640,000) and inventory ($2,188,000). Accounts receivable increased 13.6% in support of the higher sales levels compared to fiscal 1993. In order to generate higher sales volumes and to maintain the Company's commitment to prompt delivery of product to its customers, inventory increased by 13.7% compared to 1993 levels. The Company used the net cash provided from operating activities to finance capital expenditures of $4,416,000, increase its investment portfolio by $11,023,000 and pay dividends of $4,788,000, which reflected an increase in the quarterly dividend rate to $.07 per share for the third and fourth quarters of the year from $.06 per share for the first and second quarters of the year.
In September 1994, the Company completed construction of a 47,000 square foot distribution facility near Toronto, Canada to replace its 25,000 square foot leased facility. The construction cost of the building was $1,704,000 U.S. and was financed out of existing corporate funds.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA PAGE
Financial Statements:
Report of Independent Accountants 17
Consolidated Statements of Income for the three years ended November 30, 1996 18
Consolidated Balance Sheets at November 30, 1996 and 1995 19-20
Consolidated Statements of Stockholders' Equity for the three years ended November 30, 1996 21
Consolidated Statements of Cash Flows for the three years ended November 30, 1996 22
Notes to Consolidated Financial Statements 23-29
Financial Statement Schedule:
For the three years ended November 30,1996 Valuation and Qualifying Accounts 38
Report of Independent Accountants ---------------------------------
To the Board of Directors and Stockholders of Juno Lighting, Inc.
In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, of stockholders' equity and of cash flows present fairly, in all material respects, the financial position of Juno Lighting, Inc. and its subsidiaries at November 30, 1996 and 1995, and the results of their operations and their cash flows for each of the three years in the period ended November 30, 1996, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP Chicago, Illinois January 16, 1997
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)
Year ended November 30, 1996 1995 1994 ---- ---- ---- Net sales $131,479 $126,364 $126,777 Cost of sales 68,319 65,085 61,228 -------- -------- -------- Gross profit 63,160 61,279 65,549
Selling, General and Administrative 36,766 33,634 31,895 -------- -------- -------- Operating income 26,394 27,645 33,654 -------- -------- -------- Other income (expense): Interest expense (317) (374) (320) Interest and dividend income 3,957 3,633 2,983 Miscellaneous 78 10 49 -------- -------- -------- Total other income 3,718 3,269 2,712 -------- -------- -------- Income before taxes on income 30,112 30,914 36,366 Taxes on income 10,215 10,940 13,459 -------- -------- -------- Net income $19,897 $19,974 $22,907 ======== ======== ======== Net income per common share $ 1.08 $ 1.08 $ 1.23
Average number of common shares 18,494,548 18,563,341 18,549,662 outstanding
See notes to consolidated financial statements.
CONSOLIDATED BALANCE SHEET (in thousands)
November 30, 1996 1995
Assets Current: Cash $ 3,473 $ 6,519 Marketable securities 67,622 62,315 Accounts receivable, less allowance for doubtful accounts of $554,000 and $854,000 21,725 19,455 Inventories 23,275 19,583 Prepaid expenses and miscellaneous 4,346 5,037 -------- -------- Total current asset 120,441 112,909 -------- -------- Property and equipment: Land 8,719 8,719 Building and improvements 21,694 20,971 Tools and dies 5,911 4,866 Machinery and equipment 5,422 4,584 Computer equipment 1,480 1,158 Office furniture and equipment 1,990 1,620 Construction-in-process 12,200 2,185 -------- -------- 57,416 44,103 Less accumulated depreciation (14,611) ( 11,727) -------- -------- Net property and equipment 42,805 32,376 -------- -------- Other assets: Marketable securities 10,720 10,347 Goodwill and other intangibles, net of accumulated amortization of $1,877,000 and $1,690,000 4,148 4,335 Miscellaneous 67 122 -------- -------- Total other assets 14,935 14,804 -------- -------- Total assets $178,181 $160,089 ======== ========
CONSOLIDATED BALANCE SHEET (CONT'D) (in thousands) November 30, 1996 1995 ---- ---- Liabilities Current: Accounts payable $ 4,132 $ 4,129 Accrued liabilities 10,301 6,028 Current maturities of long-term debt 1,543 458 -------- -------- Total current liabilities 15,976 10,615 -------- -------- Long-term debt, less current maturities 4,433 5,976 -------- -------- Deferred income taxes payable 2,111 2,130 -------- -------- Commitments Stockholders' Equity Common stock, $.01 par value; 50,000,000 shares authorized, 18,563,412 and 18,511,112 shares issued. 186 185 Paid-in capital 4,915 4,415 Cumulative marketable securities valuation adjustment 670 661 Cumulative (loss) on foreign currency translation (197) (201) Retained earnings 150,883 137,342 -------- -------- 156,457 142,402
Less: Treasury stock, at cost; 50,400 and 67,500 shares (796) (1,034) -------- -------- Total stockholders' equity 155,661 141,368 -------- -------- Total liabilities and stockholders' equity $178,181 $160,089 ======== ======== See notes to consolidated financial statements.
EXHIBIT INDEX
Exhibit Number Page - -------
The following exhibits are filed herewith:
11.1 Computations of Net Income Per Common Share. 42
21.1 Subsidiaries of the Registrant. 43
23.1 Consent of Price Waterhouse. 44
The following exhibits are incorporated herein by reference:
3.1 Certificate of Incorporation, as amended, of Juno ____ Lighting, Inc. filed as Exhibit 3.1 to the Company's Report on Form 10-Q (SEC File No. 0-11631) for the quarter ended May 31, 1987.
3.1(a) Amendment to Certificate of Incorporation of Juno ____ Lighting, Inc. filed as Exhibit 3.1 to the Company's Annual Report on Form 10-K (SEC File No. 0-11631) for the fiscal year ended November 30, 1990.
3.2 By-Laws of Juno Lighting, Inc., as amended, filed as ____ Exhibit 3.2 to the Company's Annual Report on Form 10-K (SEC File No. 0-11631) for the fiscal year ended November 30, 1987.
3.2(a) Amendment to By-Laws of Juno Lighting, Inc. filed as ____ Exhibit 3.1 to the Company's quarterly report on Form 10-Q (SEC File No. 0-11631) for the quarter ended May 31, 1991.
10.1 Juno Lighting, Inc. 1993 Stock Option Plan, as amended, ____ filed as Exhibit 10.1 to the Company's quarterly report on Form 10-Q (SEC File No. 0-11631) for the quarter ended May 31, 1994.
10.2 Loan Agreement dated as of December 1, 1991 by and ____ between Juno Lighting, Inc. and the Indiana Development Finance Authority. Filed as Exhibit 10.1 to the Company's Annual Report on Form 10-K (SEC File No. 0-11631) for the fiscal year ended November 30, 1992.
Exhibit Number Page - ------
10.2(a) Trust Indenture dated as of December 1, 1991 by and ____ between the Indiana Development Finance Authority and First Wisconsin Trust Company, as Trustee, with respect to Industrial Development Revenue Bonds, Series 1991 (Juno Lighting, Inc. Project). Filed as Exhibit 10.1(a) to the Company's Annual Report on Form 10-K (SEC File No. 0-11631) for the fiscal year ended November 30, 1992.
10.3 Agreement among Juno Lighting, Inc., the City of ____ Des Plaines and American National Bank and Trust Company of Chicago. Filed as Exhibit 10.1 to the Company's Registration Statement on Form S-1, made effective September 1, 1983 (Registration No. 2-85267).
10.4 Juno Lighting, Inc. 1983 Stock Option Plan, as amended, ____ filed as Exhibit 10.1 to the Company's Annual Report on Form l0-K (SEC File No. 0-11631) for the fiscal year ended November 30, 1983.
10.4(a) First Amendment to the Juno Lighting, Inc. 1983 Stock ____ Option Plan dated April 9, 1986, filed as Exhibit 10.2(a) to the Company's Annual Report on Form 10-K (SEC File No. 0-11631) for the fiscal year ended November 30, 1986.
10.4(b) Third Amendment to the Juno Lighting, Inc. 1983 Stock ____ Option Plan dated May 6, 1987, filed as Exhibit 10.2(b) to the Company's Annual Report on Form 10-K (SEC File No. 0-11631) for the fiscal year ended November 30, 1987.
10.4(c) Fourth Amendment to the Juno Lighting, Inc. 1983 Stock ____ Option Plan dated September 24, 1987, filed as Exhibit 10.2(c) to the Company's Annual Report on Form 10-K (SEC File No. 0-11631) for the fiscal year ended November 30, 1987.
10.4(d) Fifth Amendment to the Juno Lighting, Inc. 1983 Stock ____ Option Plan dated December 13, 1988, filed as Exhibit 10.2(d) to the Company's Annual Report on Form 10-K (SEC File No. 0-11631) for the fiscal year ended November 30, 1988.
10.5 Agreement dated as of July 1, 1984 among Juno ____ Lighting, Inc., the City of Des Plaines, Illinois and American National Bank and Trust Company of Chicago. Filed as Exhibit 10.1(b) to the Company's Registration Statement on Form S-1, made effective December 13, 1984 (Registration No. 2-94147).
Exhibit Number Page - ------
10.6 Juno Lighting, Inc. 401(K) Plan, Amended and Restated _____ effective December 1, 1987, executed June 1, 1994.
10.6(a) Juno Lighting, Inc. 401(K) Trust, effective December 1, _____ 1985, executed June 1, 1994.
10.6(b) Amendment to Juno Lighting, Inc. 401(K) Plan, effective ____ September 1, 1994, executed September 12, 1994.
10.7 Juno Lighting, Inc. Rights Agreement dated as of ____ August 3, 1989 between Juno Lighting, Inc. and the First National Bank of Chicago, as Rights Agent, filed as Exhibit 1 to the Company's Current Report on Form 8-K (SEC File No. 0-11631) filed with the Securities and Exchange Commission on August 9, 1989.
10.7(a) First Amendment to Juno Lighting, Inc. Rights ____ Agreement dated as of June 17, 1991 between Juno Lighting, Inc. and The First National Bank of Chicago, as Rights Agent, filed as Exhibit 10.5(a) to the Company's Annual Report on Form 10-K (SEC File No. 0-11631) for the fiscal year ended November 30, 1991.
10.7(b) Second Amendment to Juno Lighting, Inc. Rights ____ Agreement dated as of June 17, 1991 between Juno Lighting, Inc. and The First Chicago Trust Company of New York, as successor Rights Agent to The First National Bank of Chicago, filed as Exhibit 1 to the Company's Current Report on Form 8-K (SEC File No. 0-11631) filed with the Securities and Exchange Commission on July 17, 1991.
16.1 The information has been previously reported in a ____ Form 8 dated May 21, 1992 filed by the Company with the Securities and Exchange Commission on May 22, 1992 (SEC File No. 0-11631).
Exhibit 11.1
JUNO LIGHTING, INC. AND SUBSIDIARIES
COMPUTATIONS OF NET INCOME PER COMMON SHARE ___________________________________________
1996 1995 1994 Average number of common shares ---------- ---------- ---------- outstanding during the year 18,451,366 18,483,220 18,423,120 ---------- ---------- ----------
Common equivalents: Shares issuable under outstanding options 147,854 139,300 207,977
Shares which could have been purchased based on the average market value for the period 104,672 59,179 81,435 ---------- --------- -------- Shares for the portion of the period that the options were outstanding 43,182 80,121 126,542 ---------- --------- -------- Average number of common and common equivalent shares outstanding during the year 18,494,548 18,563,341 18,549,662 ========== ========== ==========
NET INCOME $19,897,162 $19,974,262 $22,907,221 =========== =========== ===========
NET INCOME PER COMMON SHARE $1.08 $1.08 $1.23 ===== ===== =====
Exhibit 21.1
SUBSIDIARIES OF JUNO LIGHTING, INC.
State or Jurisdiction Name of Subsidiary of Incorporation ------------------ ---------------------
Indy Lighting, Inc. Indiana
Juno Lighting, Ltd. Canada
Exhibit 23.1
Consent of Independent Accountants ----------------------------------
We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 33-87290) of Juno Lighting, Inc. of our report dated January 16, 1997 appearing on page 17 of this Annual Report on Form 10-K of Juno Lighting, Inc. for the fiscal year ended November 30, 1996. We also consent to the incorporation by reference of our report on the Financial Statement Schedule, which appears on page 32 of this Form 10-K.
PRICE WATERHOUSE LLP Chicago, Illinois February 25, 1997