Genlyte Announces Record Fourth Quarter and Full-Year 2005 Sales and Earnings
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Friday February 17, 8:38 am ET
LOUISVILLE, Ky., Feb. 17 /PRNewswire-FirstCall/ -- The Genlyte Group Incorporated (Nasdaq: GLYT) today announced fourth quarter 2005 net sales of $309.0 million, a 4.0% increase from the fourth quarter of 2004, generating earnings per share of $0.82 compared to 2004 earnings per share of $0.73 (after adjustment for the May 2005 2-for-1 stock split), a 12.3% increase over the fourth quarter of 2004 and the highest fourth quarter sales and earnings per share in Genlyte's history. For the full year 2005, the Company announced record net sales of $1.252 billion and record earnings per share of $2.99. This compares to $1.179 billion and $2.10 (after adjustment for the May 2005 2-for-1 stock split) per share reported for 2004 and increases of 6.2% and 42.4%, respectively.
Chairman, President and Chief Executive Officer Larry Powers said, "Once again, we are pleased to report that sales and net income for the fourth quarter and the year were a record. The sales growth is substantially due to price increases and continued strength in our residential markets. Operating profit grew at a faster pace than sales primarily due to the previously announced price increases and our continued focus on cost controls. Our introduction of higher margin product lines and the market's acceptance of price increases helped us achieve higher sales and gross margins. During the fourth quarter of 2004 we announced a price increase which resulted in higher shipments at the old price and a challenging hurdle for the fourth quarter of 2005. The sales increase for the fourth quarter of 2005 over the fourth quarter of 2003 is 14.8%. Despite price increases announced during June 2005, and higher freight minimums during the third quarter, we are concerned that our costs for raw materials, freight, energy, and employee benefits continue to increase.
"During 2006, we expect our primary commercial construction markets to improve with lower commercial real-estate vacancy rates. The residential market, which has been relatively strong during the past few years, is starting to plateau and is expected to soften during 2006. We anticipate that the weakening of the US dollar and higher energy prices will lead to materials and commodity cost increases. We are evaluating another potential price increase during 2006 in order to offset the continuing cost increases. We are committed to maintain performance by continuing to control costs, introduce new products, and grow sales."
Vice President and Chief Financial Officer Bill Ferko said, "In addition to our earnings performance, we are pleased with the cash flow results that we achieved in 2005. During the fourth quarter, cash flow from operations of $67.7 million less plant and equipment investments of $7.0 million provided $60.7 million compared to the same quarter of 2004 when cash flow from operations of $62.1 million less plant and equipment investments of $8.0 million provided $54.1 million. The full year cash flow from operations of a record $130.9 million less capital expenditures of $39.4 million provided $91.5 million.
"Construction of the new San Marcos, Texas facility was completed during the 3rd quarter of 2005. Cash paid for the new facility was $17.7 million during 2005. During the fourth quarter, we recognized operating expenses related to the combination of employee relocation, plant moving, severance, and start-up inefficiencies of $4.6 million which brought the year-to-date total to $7.8 million. Relocation and moving expense are substantially behind us. However, start-up inefficiencies are expected to continue during the first two quarters of 2006. The total impact of the start-up inefficiencies is expected to be $2.0 to $3.0 million during 2006.
"We closed the fourth quarter of 2005 with total debt of $166.4 million compared to $243.7 million in 2004. Our total debt less cash and short-term investments (net debt position) was $70.7 million at the end of the fourth quarter compared to a net debt position of $130.5 at the end of the third quarter, and a net debt position of $168.9 million at the end of 2004.
"For the full year, the Company recognized a $1.6 million foreign currency exchange loss related to the remeasurement of US dollar denominated investments and receivables held by the Canadian divisions. This caused an unfavorable impact on net income of approximately $985 thousand or $0.03 per diluted share. This was completely offset by translating the earnings of our Canadian divisions at the stronger Canadian Dollar rate, which contributed $1.4 million to net income and $0.05 per diluted share for the full year. The fourth quarter impact of these items was inconsequential.
"Full-year earnings improvements over 2004 also are attributed to the company's acquisition, at the close of business July 31, 2004, of the 32% minority interest in Genlyte Thomas Group LLC formerly owned by Thomas Industries Inc. for cash plus transaction costs totaling approximately $402.1 million. Fourth-quarter results are fully comparable for both years." |
