Document/Exhibit Description Pages Size
1: 10-K Form 10-K for Lilly Industries, Inc. 19 97K
2: EX-4.4 Second Amendment to Credit Agreement 12 24K
3: EX-4.5 Change in Rights Agent 2 10K
4: EX-10.24 Douglas W. Huemme Executive Employment Agreement 13 61K
5: EX-10.25 Crocker Change-In-Control Agreement 14 69K
6: EX-10.26 Deblandre Change-In-Control Agreement 12 59K
7: EX-10.27 Underwood Change-In-Control Agreement 14 69K
8: EX-13 Lilly Industries, Inc. 1999 Annual Report 28± 131K
9: EX-21 List of Subsidiaries 2± 8K
10: EX-23 Consent of Ernst & Young LLP 1 7K
11: EX-27 Financial Data Schedule 1 8K
Selected Financial data1
(in thousands, except per share data and number of employees)
Lilly Industries, Inc. and Subsidiaries
SELECTED FINANCIAL DATA (1)
(IN THOUSANDS, EXCEPT PER SHARE DATA AND NUMBER OF EMPLOYEES)
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Year Ended November 30 1999 1998 1997 1996 (2)
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Operations
Net sales $656,201 $619,002 $601,296 $508,976
Cost of products sold 401,286 379,641 373,015 321,748
Gross margin percentage 38.8% 38.7% 38.0% 36.8%
Selling, general and administrative expenses 160,861 146,763 139,467 112,361
Research and development expenses 21,154 20,567 18,680 17,294
Operating income 72,900 72,031 70,134 57,573
Operating income percentage 11.1% 11.6% 11.7% 11.3%
Interest expense, net 15,791 16,919 18,967 13,938
Income taxes 23,155 22,867 23,068 11,039
Effective income tax rate 41.0% 42.0% 45.1% 45.0%
Net income 33,321 31,579 28,095 24,060
EBITDA (3) 93,202 91,389 92,120 73,233
EBITDA interest coverage (4) 5.9 5.4 4.9 5.3
Per Share Data (5)
Net income, diluted 1.43 1.35 1.20 1.04
Cash dividends .32 .32 .32 .32
Book value 8.28 7.15 6.21 5.36
Price range of common stock 20 1/8-13 1/8 24 5/8-14 3/8 24 1/8-163/4 19 3/4-12 1/4
Other Data
Total assets 550,426 516,485 501,795 521,860
Working capital 48,720 50,071 52,126 50,579
Capital expenditures (6) 41,472 17,015 12,673 19,233
Depreciation 10,391 9,102 8,850 6,453
Amortization 10,544 10,922 13,140 9,097
Total debt 206,803 203,700 224,171 261,561
EBITDA to total debt 45.1% 44.9% 41.1% 28.0%
Book value 192,171 165,575 142,439 121,889
Return on equity 18.6% 20.5% 21.3% 20.8%
Debt to total capitalization 52% 55% 61% 68%
Number of employees 2,395 2,291 2,116 2,140
Sales per employee 274 270 283 274
Operating income per employee 30 31 33 31
Average shares outstanding, diluted (7) 23,320 23,400 23,400 23,100
1 This table of Selected Financial Data should be read in conjunction with
Management's Discussion and Analysis of Results of Operations and Financial
Condition and the Company's consolidated financial statements included
herein.
2 1996 includes the effect of the acquisition of Guardsman Products, Inc. on
April 8, 1996 and excludes the effect of a restructuring charge of $9,607
which reduced net income by $5,284 or $.23 per diluted share.
3 EBITDA represents earnings before interest, taxes, depreciation and
amortization.
4 EBITDA interest coverage is determined by dividing EBITDA by net interest
expense.
5 Adjusted for all stock splits and stock dividends through November 30, 1999
inclusive. Prices are rounded to nearest 1/8th.
6 Excludes effect of acquisitions.
7 Used to calculate net income per diluted share.
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1995 1994 1993 1992 1991 1990 1989
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Operations
Net sales $328,345 $331,306 $284,325 $236,476 $220,508 $240,146 $219,713
Cost of products sold 219,899 214,809 189,111 152,480 150,669 161,626 145,592
Gross margin percentage 33.0% 35.2% 33.5% 35.5% 31.7% 32.7% 33.7%
Selling, general and
administrative expenses 59,874 61,498 53,319 50,128 46,921 50,404 44,113
Research and development expenses 13,184 12,982 12,325 11,030 10,606 10,814 9,708
Operating income 35,388 42,017 29,570 22,838 12,312 17,302 20,300
Operating income percentage 10.8% 12.7% 10.4% 9.7% 5.6% 7.2% 9.2%
Interest expense, net 1,487 2,465 1,568 1,245 2,254 2,573 1,111
Income taxes 13,510 16,350 11,784 9,201 4,417 6,850 8,399
Effective income tax rate 40.0% 41.2% 42.2% 42.0% 41.0% 40.6% 40.6%
Net income 20,264 23,302 16,155 12,706 6,357 10,022 12,574
EBITDA (3) 43,435 51,082 36,394 29,944 19,994 26,117 26,670
EBITDA interest coverage (4) 29.2 20.7 23.2 24.1 8.9 10.2 24.0
Per Share Data (5)
Net income, diluted .88 1.00 .70 .55 .27 .41 .51
Cash dividends .31 .27 .24 .22 .21 .20 .17
Book value 4.86 4.38 3.60 3.16 3.16 3.10 3.00
Price range of common stock 15-11 18-11 3/4 15 7/8-9 3/8 9 3/4-5 5/8 6 1/8-4 1/8 7 5/8-4 7 1/8-5 3/8
Other Data
Total assets 183,582 190,252 167,044 117,049 127,342 125,371 129,025
Working capital 35,505 41,604 33,270 27,131 30,405 34,513 40,389
Capital expenditures (6) 15,599 6,693 7,598 3,262 1,928 3,968 2,486
Depreciation 4,251 4,637 3,746 3,965 4,038 4,021 3,387
Amortization 3,923 4,328 3,141 2,827 2,928 2,651 1,199
Total debt 28,229 35,110 44,101 14,642 21,501 28,345 25,560
EBITDA to total debt 153.9% 145.5% 82.5% 204.5% 93.0% 92.1% 104.3%
Book value 109,374 99,424 81,128 70,125 74,187 73,185 74,482
Return on equity 19.4% 25.8% 21.4% 17.6% 8.6% 13.6% 17.9%
Debt to total capitalization 21% 26% 35% 17% 22% 28% 26%
Number of employees 1,148 1,182 1,176 1,072 1,140 1,230 1,350
Sales per employee 282 281 253 214 186 186 174
Operating income per employee 30 36 26 21 10 13 16
Average shares outstanding, diluted (7) 23,086 23,231 22,962 23,048 23,521 24,738 25,043
Management's Discussion and Analysis of Results of Operations and Financial
Condition
Operating Results 1999 vs. 1998
Consolidated net sales increased 6% to a record $656.2 million for fiscal year
1999. Sales benefited from strong volume increases, particularly in wood and
metal coatings. Wood coatings increased in all major markets served, with
especially strong growth in the Asia-Pacific Region. Metal coatings sales were
led by continued large increases in powder coatings. The Company's international
sales, including U.S. exports, grew $27.3 million to $176.6 million during 1999,
representing growth of 18.3% over 1998. International sales now account for 27%
of consolidated sales. Sales to the Company's three end-use markets (wood, metal
and composites and glass) represented 46%, 43%, and 11% of 1999 consolidated
sales, respectively. Overall, selling prices were stable during the year.
Gross profit margin improved slightly to 38.8% of sales in 1999, rising 0.1
percentage point over 1998. Raw material costs are the largest component of the
Company's cost structure. Continued emphasis on supply chain management, raw
material consolidation, as well as favorable pricing in certain commodity
markets, produced a 0.2 percentage point reduction in raw material costs as a
percentage of net sales. Improvements in raw material costs were partially
offset by a slight increase in direct labor and overhead costs. The Company will
continue to pursue improvement in gross margin by reducing the number of raw
materials used in products, process re-engineering, company-wide purchasing
opportunities, and product re-formulations.
As a percentage of sales, operating expenses increased 0.7 percentage points to
27.7%. Selling, general and administrative expenses, as a percentage of sales,
increased 0.8 percentage points to 24.5%, primarily due to continued investments
in selling, marketing and other infrastructure enhancements, as the Company
continues to focus on global expansion and capturing additional market share in
certain markets. Research and development expense increased by $0.6 million to
$21.2 million for 1999.
Net interest expense continued to decline during 1999, falling $1.1 million to
$15.8 million, a decrease of 6.7%. The reduction in interest expense reflects
improved cash management practices coupled with lower average market rates of
interest, which reduced the cost of borrowing under the Company's variable rate
debt facilities.
The Company's effective tax rate declined one full percentage point to 41.0% for
1999, due primarily to a full year's impact of U.S. state and international tax
planning strategies. The effective tax rate remained above U.S. statutory rates
principally due to the impact of non-deductible amortization of intangibles
acquired as part of the Guardsman Products, Inc. ("GPI") acquisition in 1996,
and generally higher foreign tax rates.
Operating Results 1998 vs. 1997
Consolidated net sales increased 2.9% to a record $619.0 million for fiscal year
1998, despite a $10 million unfavorable impact from foreign currency
translations. Sales benefited from the December, 1997 acquisition in Germany of
Merckens Lackchemie GmbH & Company. The acquisition helped boost the Company's
international sales, including U.S. exports, to $149.3 million during 1998,
representing growth of 18.0% over 1997. During 1998, Lilly experienced volume
growth in each of its end-use markets. Sales to the Company's three end-use
markets (wood, metal, and composites and glass) represented 44%, 44%, and 12% of
1998 consolidated sales, respectively. Overall, selling prices were stable
during the year.
Gross profit margin continued to improve in 1998, rising 0.7 percentage points
over 1997 to 38.7%. Raw material costs are the largest component of the
Company's cost structure. However, continued emphasis on supply chain
management, as well as favorable pricing in certain commodity markets, produced
a 1.1% reduction in raw material costs as a percentage of net sales.
Improvements in raw material costs were partially mitigated by a slight increase
in direct labor and overhead costs. The Company will continue to pursue
improvement in gross margin by reducing the number of raw materials used in
products, process re-engineering, company-wide purchasing opportunities and
product re-formulations.
As a percentage of sales, operating expenses increased 0.7 percentage points to
27.0%. Selling, general and administrative expenses, as a percentage of sales,
increased from 23.2% to 23.7%, primarily due to increased marketing initiatives.
In addition, the Company made record expenditures on research and development,
which rose 10.1% to $20.6 million.
Net interest expense declined significantly during 1998, falling $2.0 million,
reflecting the benefits of the Company's 1997 debt restructuring and lower
average debt outstanding. Continued strong cash flow from operations allowed the
Company to reduce average debt outstanding during 1998, while lower average
market rates of interest reduced the cost of borrowing under the Company's
variable rate debt facilities. The improvement in interest expense was partially
offset by additional interest expense associated with borrowings to finance the
Company's acquisition in Germany in December, 1997.
The Company's effective tax rate declined significantly to 42.0% during 1998,
due primarily to implementation of international tax planning strategies. The
effective tax rate remained above U.S. statutory rates, primarily due to the
impact of non-deductible intangibles acquired as part of the GPI acquisition in
1996 and generally higher foreign tax rates.
Environmental
The Company's operations, like those of most companies in the coatings industry,
are subject to regulations related to maintaining or improving the quality of
the environment. Such regulations, along with the Company's own internal
compliance efforts, have required, and will continue to require, ongoing
expenditures. Spending for environmental compliance is not anticipated to be
material to the Company's financial position. The Company has been notified that
it is a potentially responsible party for clean-up costs with respect to several
government investigations at independently operated waste disposal sites
previously used by the Company. Management has accrued, as appropriate, for
these environmental liabilities. Management believes the liabilities associated
with these sites will not have a material adverse effect on its operating
results or financial position.
Year 2000
The Company completed all Year 2000 ("Y2K") readiness procedures during 1999 and
did not experience any significant adverse effects on its systems or operations
from the transition to Y2K. All critical IT systems were inventoried and
assessed, and replacement of non-conforming IT systems began in 1998 and was
completed in 1999.
The Company estimates the total cost of resolving the Y2K issue was $5 million.
Of this amount, the Company estimates $2 million was spent during fiscal year
1999. Approximately 70% of total Y2K costs were comprised of equipment and
software replacement costs with the balance being comprised of assessment and
remediation costs. Y2K costs were expensed as incurred except for new systems
and equipment, which were capitalized and will be charged to expense over the
estimated useful life of the related assets.
Liquidity and Capital Resources
During fiscal 1999, the Company continued to maintain a $175 million revolving
credit facility ("Facility") and $100 million in senior notes ("Notes"). Both
the Facility and the Notes are unsecured and require no principal amortization.
The remaining terms on the Facility and Notes are three and eight years,
respectively, as of November 30, 1999. During fiscal 1998, the Company's German
subsidiary entered into a five-year, Deutsche Mark-denominated $10,000,000
revolving credit facility ("German Facility") to fund the German acquisition.
The German Facility is unsecured. Principal amounts available for borrowing
under the German Facility decline over the five-year term of the agreement.
Management expects to fund required debt service on all borrowings from
operating cash flows.
The Company's total debt increased during 1999 by $3.1 million to a total of
$206.8 million. The relatively low increase was mainly a result of capital
investments in infrastructure expansion and improvements. Additional amounts
available for borrowing under the Facility for general operating or other
purposes totaled $74.9 million as of November 30, 1999. Management believes
funds available from internal and external sources are sufficient to meet the
liquidity needs of the Company during the next twelve months.
Cash provided by operating activities declined by $16.5 million to $38.7 million
during 1999. Higher net income was offset by the cash effect of changes in
certain operating assets and liabilities including increases in accounts
receivable and inventories to support higher sales levels.
Cash used by investing activities increased by $17.2 million to $42.1 million
during 1999. The increase was driven by a $24.5 million increase in capital
expenditures primarily offset by a decrease of $8.5 million in payments for
acquired businesses. Future investing activities are expected to be financed
from internal sources and existing credit facilities.
Cash used by financing activities decreased by $22.9 million to $4.2 million
during 1999. Cash dividend payments of $7.4 million during 1999 remained the
same as 1998 while long term borrowings increased by $3.1 million. In 1998
principal payments exceeded borrowings by $20.5 million.
The Company focuses on three key measures of liquidity and access to capital
markets: EBITDA (earnings before interest, taxes, depreciation and
amortization); Interest Coverage (EBITDA divided by net interest expense); and
Debt Capitalization (debt divided by the sum of debt plus equity). For 1999, the
Company generated EBITDA of $93.2 million, an increase of $1.8 million over
1998. Interest Coverage improved to 5.9 times, due primarily to reduced interest
expense associated with lower average borrowings and generally lower market
rates of interest. Debt Capitalization improved 3.4 percentage points to 51.8%
due to a relatively stable debt level and higher net income retained in the
business during 1999.
Forward-looking statements
Statements in this annual report that are not strictly historical may be
"forward-looking statements," which involve risks and uncertainties. Risk
factors include general economic and industry conditions, effects of leverage,
environmental matters, technological developments, product pricing, raw material
cost changes, and international operations, among others, which are set forth in
the Company's SEC filings.
Consolidated Statements of Income
(in thousands, except per share data)
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Year Ended November 30 1999 1998 1997
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Net sales $ 656,201 $ 619,002 $ 601,296
Costs and expenses:
Cost of products sold 401,286 379,641 373,015
Selling, general and administrative 160,861 146,763 139,467
Research and development 21,154 20,567 18,680
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583,301 546,971 531,162
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Operating income 72,900 72,031 70,134
Other expenses:
Sundry expense (633) (666) (4)
Interest expense, net (15,791) (16,919) (18,967)
----------------------------------------
(16,424) (17,585) (18,971)
----------------------------------------
Income before income taxes 56,476 54,446 51,163
Income taxes 23,155 22,867 23,068
----------------------------------------
Net income $ 33,321 $ 31,579 $ 28,095
========================================
Net income per share:
Basic $ 1.44 $ 1.36 $ 1.22
Diluted $ 1.43 $ 1.35 $ 1.20
See accompanying notes.
Consolidated Balance Sheets
(in thousands)
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November 30 1999 1998
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Assets
Current assets:
Cash and cash equivalents $ 5,714 $ 13,326
Accounts receivable, less allowance for doubtful
accounts (1999, $1,775; 1998, $1,981) 91,369 82,039
Inventories 58,500 50,796
Deferred income taxes 2,848 3,251
Other 3,426 2,620
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Total current assets 161,857 152,032
Other assets:
Goodwill, less amortization (1999, $27,769; 1998, $21,547) 210,811 214,960
Other intangibles, less amortization (1999, $23,129; 1998, $22,621) 23,067 26,068
Deferred income taxes 3,974 8,838
Sundry 18,781 12,419
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256,633 262,285
Property and equipment:
Land 13,872 11,845
Buildings 75,232 62,725
Equipment 110,610 87,787
Accumulated depreciation (67,778) (60,189)
-------------------------
131,936 102,168
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$ 550,426 $ 516,485
=========================
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 60,317 $ 56,958
Salaries and payroll related items 20,975 21,624
Other 27,293 21,651
Income taxes payable 4,552 1,728
-------------------------
Total current liabilities 113,137 101,961
Long-term debt 206,803 203,700
Other liabilities 38,315 45,249
Shareholders' equity:
Capital stock, $.55 stated value per share:
Class A (limited voting) - 27,969 shares issued
(1998, 27,825 shares) 15,539 15,459
Class B (voting) - 540 shares issued 300 300
Additional capital 83,833 81,890
Retained earnings 133,807 107,914
Accumulated other comprehensive loss (3,509) (4,096)
Cost of capital stock in treasury (37,799) (35,892)
-------------------------
192,171 165,575
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$ 550,426 $ 516,485
=========================
See accompanying notes.
Consolidated Statements of Cash Flows
(in thousands)
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Year Ended November 30 1999 1998 1997
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Operating Activities
Net income $ 33,321 $ 31,579 $ 28,095
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 10,391 9,102 8,850
Amortization 10,544 10,922 13,140
Deferred income taxes 5,267 209 4,085
Changes in operating assets and liabilities net of
effects from acquired business:
Accounts receivable (9,162) (422) 4,581
Inventories (7,680) (2,574) 1,842
Accounts payable and accrued expenses 11,101 5,985 2,933
Sundry (15,044) 418 (4,226)
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Net cash provided by operating activities 38,738 55,219 59,300
Investing Activities
Purchases of property and equipment (41,472) (17,015) (12,673)
Payment for acquired business (2,721) (11,253) -
Sundry 2,052 3,367 5,716
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Net cash used by investing activities (42,141) (24,901) (6,957)
Financing Activities
Dividends paid (7,428) (7,410) (7,340)
Proceeds from senior notes - - 99,200
Proceeds from short-term and long-term borrowings 3,103 - -
Principal payments on short-term and long-term borrowings - (20,470) (136,590)
Sundry 116 809 (4,324)
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Net cash used by financing activities (4,209) (27,071) (49,054)
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(Decrease) increase in cash and cash equivalents (7,612) 3,247 3,289
Cash and cash equivalents at beginning of year 13,326 10,079 6,790
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Cash and cash equivalents at end of year $ 5,714 $ 13,326 $ 10,079
=====================================
See accompanying notes.
Consolidated Statements of Shareholders' Equity
(in thousands)
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Cost of Accumulated
Class A Class B Capital Other
Common Common Additional Retained Stock in Comprehensive
Stock Stock Capital Earnings Treasury Income (Loss) Total
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Balance at December 1, 1996 $15,103 $ 300 $ 75,433 $ 62,990 $ (32,025) $ 88 $ 121,889
Comprehensive income:
Net income -- -- -- 28,095 -- -- 28,095
Currency translation adjustments -- -- -- -- -- (2,342) (2,342)
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Total comprehensive income -- -- -- -- -- -- 25,753
Stock options exercised 272 -- 3,834 -- (2,119) -- 1,987
Disqualifying disposition
of stock options -- -- 150 -- -- -- 150
Cash dividends paid -- -- -- (7,340) -- -- (7,340)
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Balance at November 30, 1997 15,375 300 79,417 83,745 (34,144) (2,254) 142,439
Comprehensive income:
Net income -- -- -- 31,579 -- -- 31,579
Currency translation adjustments -- -- -- -- -- (1,842) (1,842)
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Total comprehensive income -- -- -- -- -- -- 29,737
Stock options exercised 84 -- 1,820 -- (1,018) -- 886
Disqualifying disposition
of stock options -- -- 653 -- -- -- 653
Cash dividends paid -- -- -- (7,410) -- -- (7,410)
Repurchase of common stock -- -- -- -- (730) -- (730)
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Balance at November 30, 1998 15,459 300 81,890 107,914 (35,892) (4,096) 165,575
Comprehensive income:
Net income -- -- -- 33,321 -- -- 33,321
Currency translation adjustments -- -- -- -- -- 587 587
----------
Total comprehensive income -- -- -- -- -- -- 33,908
Stock options exercised 80 -- 1,870 -- (1,421) -- 529
Disqualifying disposition
of stock options -- -- 73 -- -- -- 73
Cash dividends paid -- -- -- (7,428) -- -- (7,428)
Repurchase of common stock -- -- -- -- (486) -- (486)
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Balance at November 30, 1999 $15,539 $ 300 $ 83,833 $ 133,807 $ (37,799) $ (3,509) $ 192,171
=====================================================================================
See accompanying notes.
Notes to Consolidated Financial Statements
November 30, 1999
1. Summary of Significant Accounting Policies
Business. Lilly Industries, Inc. and its subsidiaries (the "Company") are
principally in the business of formulating, manufacturing, and marketing
industrial coatings and specialty chemicals to original equipment manufacturers
on a worldwide basis. Primary manufacturing operations are located in North
America, Europe and Asia-Pacific. The Company operates within three business
segments which serve three end-use markets.
Consolidation and Use of Estimates. The consolidated financial statements
include the accounts of all subsidiaries after elimination of significant
intercompany accounts and transactions. Preparation of these statements in
conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results
could differ from those estimates.
Revenue Recognition. Revenue from sales of products is recognized at the time
products are shipped to the customer.
Cash Equivalents. Cash equivalents include time deposits and certificates of
deposit with original maturities of three months or less.
Inventories. Coatings inventories in the United States are stated at the lower
of cost, determined by the last-in, first-out (LIFO) method, or market. All
other inventories are stated at the lower of cost, determined by the first-in,
first-out (FIFO) method, or market.
Intangible Assets. Goodwill, which represents the excess of cost over fair value
of net assets of purchased businesses, is amortized by the straight-line method
over periods ranging from 20 to 40 years. Other intangible assets consist of
noncompete agreements, customer lists and technology and are amortized by the
straight-line method over periods ranging from 5 to 20 years.
The Company periodically evaluates the carrying value of intangible assets to
determine if an impairment has occurred. This evaluation is based on various
analyses including reviewing anticipated cash flows.
Property and Equipment. Property and equipment is recorded on the basis of cost
and includes expenditures for new facilities and items which substantially
increase the useful life of existing buildings and equipment. Depreciation is
based on estimated useful lives (ranging from 3 to 45 years) and computed
primarily by the straight-line method.
Interest-Rate Swap Agreements. The Company periodically enters into interest
rate swap agreements ("Swaps") to modify the interest characteristics of its
outstanding debt. Swap agreements involve the exchange of floating rate and
fixed rate interest payment flows between or among counterparties, including the
Company, banks and / or other financial intermediaries. Such flows are
calculated based upon a predetermined notional principal amount over the life of
the Swaps. The notional amount of each Swap represents all or a portion of the
principal balance of the Company's underlying debt obligation(s). The
differential to be paid or received is accrued and recognized as an adjustment
of interest expense.
Reclassifications. Certain prior year amounts in the accompanying financial
statements have been reclassified to conform with the current year presentation.
2. New Accounting Standards
Effective December 1, 1998, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income." This
statement establishes new rules for the reporting and display of comprehensive
income and its components. The Company has reported, in addition to net income,
the components of other comprehensive income in its consolidated statements of
shareholders' equity. Prior year financial statements have been reclassified to
conform to the requirements of SFAS No. 130. Implementation of this disclosure
standard had no impact on the Company's financial position or results of
operations.
Effective November 30, 1999, the Company adopted SFAS No. 131, "Disclosures
about Segments of an Enterprise and Related Information." Statement 131 requires
public business enterprises to report information about operating segments in
annual financial statements and selected information about operating segments in
interim financial reports. Statement 131 also establishes standards for related
disclosures about products and services, geographic areas and major customers.
The adoption of this statement did not affect the Company's financial position
or results of operations.
Effective December 1, 1998, the Company adopted SFAS No. 132, "Employers'
Disclosures about Pensions and Other Postretirement Benefits." Statement 132
revises the disclosure requirements for employers' pensions and other retiree
benefits. Implementation of this disclosure standard did not affect the
Company's financial position or results of operations.
Effective December 1, 1998, the Company adopted the American Institute of
Certified Public Accountants' (AICPA) Statement of Position (SOP) 98-1,
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use." The SOP requires capitalization of certain costs incurred in the
development of internal-use software, including external direct material and
service costs, employee payroll and payroll-related costs, and capitalized
interest. Prior to adoption of SOP 98-1, the Company expensed certain of these
costs as incurred. The effect of the adoption of this statement on consolidated
earnings during the current period is immaterial.
3. Inventories
The principal inventory classifications at November 30 are summarized as follows
(in thousands):
1999 1998
--------------------------------------------------------------------------------
Finished products $33,628 $29,761
Raw materials 30,048 27,411
------------------
63,676 57,172
Less adjustment of certain inventories to LIFO basis 5,176 6,376
------------------
$58,500 $50,796
==================
Inventory cost is determined by the LIFO method of inventory valuation for
approximately 61% and 64% of inventories at November 30, 1999 and 1998,
respectively.
4. Long-Term Debt
Long-term debt consists of the following as of November 30 (in thousands):
1999 1998
--------------------------------------------------------------------------------
7.75% Unsecured Senior Notes $100,000 $100,000
Revolving Credit Facility 100,100 93,700
German Credit Facility 6,703 10,000
--------------------------
$206,803 $203,700
==========================
In February 1998, the Company's German subsidiary ("Subsidiary") entered into an
unsecured Deutsche Mark ("DEM") denominated revolving credit facility ("German
Facility") with a bank. The maximum borrowings available under the German
Facility are $6,703,000 until November 29, 2000; thereafter, $4,460,000 until
November 29, 2001; thereafter, $2,060,000 until maturity of the German Facility
in February, 2003. German Facility advances of greater than $52,000 bear
interest, at the Subsidiary's option, at either (i) the money market rate of the
bank's German affiliate, or (ii) the Frankfurt, Germany Interbank Offered Rate
for DEM deposits plus an interest rate margin of between 0.40% and 0.80%,
depending on the Subsidiary's leverage at the time of each borrowing. Other
advances bear interest at the prime rate of the bank's German affiliate. The
principal of the German Facility is due upon maturity in February, 2003.
In November 1997, the Company restructured its long-term debt into a
$175,000,000 revolving credit facility ("Facility") with a group of financial
institutions and $100,000,000 of senior notes ("Notes"). The Notes were issued
as a 144A private placement offering and were subsequently registered. The
Facility is unsecured and provides for borrowings under a revolving note.
Interest is payable upon maturity of each revolving advance under the Facility,
but in no case less frequently than quarterly. The principal of the Facility is
due in October, 2002. The Notes are unsecured. Interest is payable on June 1 and
December 1 of each year the Notes are outstanding. The principle of the Notes is
due December, 2007. The Facility bears interest, at the Company's option, (i)
the higher of the agent bank's prime rate (8.50% at November 30, 1999) or the
Federal Funds rate plus 0.50% or, (ii) the London Interbank Offered Rate for
U.S. Dollars plus 0.30% to 0.75%, depending upon the Company's credit rating. A
commitment fee ranging from 0.10% to 0.25%, depending upon the Company's credit
rating, is payable on the unused portion of the Facility.
In April 1996, the Company entered into a forty-four month amortizing interest
rate swap agreement with a notional amount of $175,000,000. This agreement
expired November 30, 1999. This agreement effectively converted a portion of the
Facility from variable rate debt to fixed rate debt.
Interest of $15,818,000, $12,369,000 and $20,628,000 was paid in fiscal 1999,
1998 and 1997, respectively.
The Company is subject to various debt covenants under the German Facility,
Facility and Notes, including affirmative and negative covenants which require
the maintenance of certain ratios for maximum leverage, fixed charge coverage
and interest coverage. Additionally, such covenants place certain restrictions
on the Company's ability to engage in mergers and acquisitions and incur
additional indebtedness.
5. Income Taxes
Income tax expense for the years ended November 30 is comprised of the following
components (in thousands):
1999 1998 1997
--------------------------------------------------------------------------------
Current expense:
Federal $ 8,942 $ 12,757 $ 10,612
Foreign 8,126 7,290 7,674
State 820 2,358 697
-----------------------------------------
17,888 22,405 18,983
Deferred expense (credit):
Federal 4,334 593 2,818
Foreign 384 (139) 210
State 549 8 1,057
-----------------------------------------
5,267 462 4,085
-----------------------------------------
$ 23,155 $ 22,867 $ 23,068
=========================================
A reconciliation of the statutory U.S. federal rate to the effective income tax
rate for the years ended November 30 is as follows:
[Enlarge/Download Table]
1999 1998 1997
---------------------------------------------------------------------------------------------
Statutory U.S. federal income tax rate 35.0% 35.0% 35.0%
Increase resulting from:
Goodwill 3.5 3.6 3.9
State income taxes, net of federal income tax benefit 1.6 2.8 2.3
Foreign 1.3 1.8 2.2
Other items (.4) (1.2) 1.7
----------------------------
Effective income tax rate 41.0% 42.0% 45.1%
============================
Deferred income taxes are recorded based upon differences between the financial
statement and tax basis of assets and liabilities.
The deferred tax assets and liabilities recorded on the balance sheet at
November 30 are as follows (in thousands):
1999 1998
--------------------------------------------------------------------------------
Deferred tax assets:
Goodwill and intangibles $ 1,121 $ 1,279
Employee benefits 5,812 5,565
Accounts receivable, inventory and other 11,051 13,839
------------------
17,984 20,683
Deferred tax liabilities:
Property and equipment 6,582 5,526
Pension 4,580 3,068
------------------
11,162 8,594
------------------
Net deferred tax assets $ 6,822 $12,089
==================
No provision has been made for U.S. federal income taxes on certain
undistributed earnings of foreign subsidiaries that the Company intends to
permanently invest or that may be remitted tax-free. The total of undistributed
earnings that would be subject to federal income tax if remitted under existing
law is approximately $24,500,000 at November 30, 1999. Determination of the
unrecognized deferred tax liability related to these earnings is not practicable
because of the complexities with its hypothetical calculation. Upon distribution
of these earnings, the Company will be subject to U.S. taxes and withholding
taxes payable to various foreign governments. A credit for foreign taxes already
paid would be available to reduce the U.S. tax liability.
Income taxes of $16,600,000, $21,800,000 and $20,500,000 were paid in 1999, 1998
and 1997, respectively.
6. Capital Stock
The Company has two classes of common stock, Class A stock and Class B stock.
Authorized shares of Class A and Class B stock are 97,000,000 and 3,000,000,
respectively. The limited voting rights of Class A shareholders are equal to
voting rights of Class B shareholders only with regard to voting for merger,
consolidation or dissolution of the Company and voting and electing four
directors of the Company if there are ten or more directors and two directors if
there are nine or fewer directors. With respect to all rights other than voting,
Class A shareholders are the same as Class B shareholders.
The terms of the Class B stock, which is held only by employees, provide that
these shares be exchanged for Class A stock on a share-for-share basis when the
shareholder ceases to be an employee or decides to dispose of the shares.
Accordingly, 3,000,000 shares of authorized Class A stock are reserved for this
purpose.
On January 12, 1996, the Company's board of directors ("Board") declared a
dividend of one purchase right for each outstanding share of Class A and Class B
stock. In addition, one right is distributed for each share issued after January
26, 1996. Upon exercise, each right entitles holders to purchase from the
Company one share of stock at $55 per share, subject to certain adjustments. The
rights become exercisable when a person or group acquires beneficial ownership
of 15 percent or more of Class A stock or becomes the beneficial owner of an
amount of Class A stock (but not less than 10 percent) which the Board
determines to be substantial and not in the Company's best long-term interests
or following the announcement of a tender or exchange offer for 30% or more of
the Class A stock.
In the event a person acquires 15 percent or more of Class A stock, or is
determined by the Board to be a substantial owner whose ownership is not in the
Company's best long-term interests or an acquiring person engages in certain
self-dealing transactions, each holder will have the right to receive that
number of common shares having a market value of two times the exercise price of
the right. At any time after a person becomes an acquiring person, but before
such person acquires 50 percent or more of outstanding Class A stock, the Board
may exchange each right for one common share (subject to adjustment).
In the event the Company is involved in certain business combination
transactions, or 50 percent or more of the Company's consolidated assets or
earning power are sold, each holder will have the right to receive, upon
exercise at the then-current exercise price of the right, that number of shares
of common stock of the acquiring company having a market value of two times the
exercise price of the right.
The Company may redeem the rights at a price of $.01 per right at any time prior
to the time a person or group becomes an acquiring person as defined by the
rights agreement. The rights expire in January, 2006.
A summary of shares issued and held in treasury follows (in thousands):
Capital Stock Capital Stock
Issued Held in Treasury
Class A Class B Class A Class B
--------------------------------------------------------------------------------
Balance at December 1, 1996 27,184 540 4,810 191
Class A exchanged for Class B -- -- 106 (106)
Class B exchanged for Class A -- -- (22) 22
Stock options exercised 490 -- 29 75
-------------------------------------
Balance at November 30, 1997 27,674 540 4,923 182
Class A exchanged for Class B -- -- 92 (92)
Class B exchanged for Class A -- -- (9) 9
Acquisition for treasury -- -- 39 --
Stock options exercised 151 -- 37 12
-------------------------------------
Balance at November 30, 1998 27,825 540 5,082 111
Class A exchanged for Class B -- -- 36 (36)
Class B exchanged for Class A -- -- (13) 13
Acquisition for treasury -- -- 32 --
Stock options exercised 144 -- 56 19
-------------------------------------
Balance at November 30, 1999 27,969 540 5,193 107
=====================================
Incentive stock option plans entitle certain directors, officers and other key
employees to buy shares of Class A stock at prices not less than fair market
value on the date of grant. The options vest and become exercisable ratably over
a three-year period commencing two years after the date of grant and expire five
or ten years after the date of grant. Certain options are granted with stock
appreciation rights (SAR) and reload options. An SAR entitles the option holder
to receive a cash payment equal to the difference between the option price and
the current value of Class A stock. The reload option entitles the option holder
to the same number of options exercised with an option price equal to the fair
market value at the date of exercise. Shares reserved under these plans were
1,785,129 and 1,931,420 at November 30, 1999 and 1998, respectively.
A summary of stock option activity for the years ended November 30 follows:
Weighted
Average
Number of Exercise
Shares Price
--------------------------------------------------------------------------------
Balance at December 1, 1996 1,212,290 $ 11.05
Grants 77,072 18.43
Exercised (489,610) 8.39
Terminated (10,250) 13.39
------------------------
Balance at November 30, 1997 789,502 13.39
Grants 460,022 18.84
Exercised (151,233) 12.60
Terminated (37,975) 17.41
------------------------
Balance at November 30, 1998 1,060,316 15.72
Grants 561,095 18.21
Exercised (146,291) 13.57
Terminated (80,230) 18.93
------------------------
Balance at November 30, 1999 1,394,890 $ 16.76
========================
At November 30, 1999 the range of exercise prices and weighted-average remaining
contractual life of outstanding options were $12.25 - $21.63 and 6.8 years,
respectively. At November 30, 1999 and 1998, the number of options exercisable
was 342,000 and 340,000 respectively, and the weighted-average exercise price of
those options was $13.32 and $13.49, respectively.
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation," (SFAS 123) permits companies to continue to apply APB Opinion 25,
"Accounting for Stock Issued to Employees" (APB 25) and related Interpretations
in accounting for its plans. The Company has elected to follow APB 25 and
related Interpretations. Under APB 25, because the exercise price of the
Company's employee stock options is not less than fair market price of the share
at the date of grant, no compensation expense is recognized in the financial
statements.
Pro forma information regarding net income and net income per share is required
by SFAS 123 and has been determined as if the Company accounted for its employee
stock options using the fair value method of that statement.
The fair value of options was estimated at the date of grant using a
Black-Scholes option pricing model with the following weighted-average
assumptions for 1999, 1998 and 1997, respectively: risk-free interest rate of
6.2%, 4.7%, and 5.8%; dividend yields of 1.9% for all years; volatility factors
of the expected market price of the Company's Class A stock of .29, .27 and .30;
and a weighted average expected life of options of 7 years, 5 years and 4 years.
For purposes of pro forma disclosure, the estimated fair value of the options is
amortized to expense over the option's vesting period. Pro forma amounts may not
be representative of the expected effects on pro forma net income or net income
per share in future years. The Company's pro forma information follows (in
thousands, except per share amounts):
1999 1998 1997
--------------------------------------------------------------------------------
Net income:
As reported $ 33,321 $ 31,579 $ 28,095
Pro forma 32,235 30,924 27,608
Net income per share:
As reported $ 1.43 $ 1.35 $ 1.20
Pro forma 1.38 1.32 1.18
Weighted average fair value of
options granted during the year $ 6.37 $ 5.76 $ 4.93
7. Net Income Per Share
Basic and diluted net income per share are computed by dividing net income as
reported by the average number of shares outstanding as follows (in thousands):
[Download Table]
1999 1998 1997
---------------------------------------------------------------------------------
Basic
Weighted-average common shares outstanding 23,205 23,160 22,940
===========================
Diluted
Weighted-average common shares outstanding 23,205 23,160 22,940
Dilutive effect of stock options 115 240 460
---------------------------
Average common shares outstanding assuming dilution 23,320 23,400 23,400
===========================
8. Benefit Plans
The Company maintains defined benefit retirement plans that cover substantially
all employees. The change in benefit obligation, change in plan assets, funded
status and amounts recognized in the consolidated balance sheets at November 30
for the Company's defined benefit plans were as follows (in thousands):
[Enlarge/Download Table]
1999 1998
--------------------------------------------------------------------------------------------
Change in benefit obligation:
Benefit obligation at beginning of the year $ 76,458 $ 82,542
Service cost 400 457
Interest cost 5,020 5,380
Amendments and termination -- 22
Actuarial gain (1,461) (8,085)
Benefits paid (4,434) (3,858)
----------------------
Benefit obligation at end of year $ 75,983 $ 76,458
======================
Change in plan assets:
Fair value of plan assets at beginning of year $ 96,571 $ 88,594
Actual return on plan assets 7,061 11,830
Employer contribution 20 5
Benefits paid (4,434) (3,858)
----------------------
Fair value of plan assets at end of year $ 99,218 $ 96,571
======================
Funded status:
Funded status $ 23,235 $ 20,113
Unrecognized net actuarial gain (13,730) (15,317)
Unrecognized prior service cost 4,329 4,813
Unrecognized transition asset (731) (933)
----------------------
Net amount recognized $ 13,103 $ 8,676
======================
Amounts recognized in the consolidated balance sheet consisted of:
Prepaid benefit cost $ 13,103 $ 8,676
----------------------
Net amount recognized $ 13,103 $ 8,676
======================
Components of net periodic benefit cost:
Service cost $ 400 $ 457
Interest cost 5,020 5,380
Expected return on plan assets (9,684) (8,876)
Amortization of prior service cost 484 --
Amortization of transition asset (202) (202)
Recognized net actuarial gain (424) --
----------------------
Net periodic benefit $ (4,406) $ (3,241)
======================
Weighted-average assumptions as of year end:
Discount rate 6.75% 6.75%
Expected return on plan assets 10.25% 10.25%
Rate of compensation increase 4.00% 4.00%
Certain employees from one of the Company's German subsidiaries participate in a
frozen defined benefit retirement plan. The liability related to this plan
totaled $4,000,000 and $4,400,000 and the expense related to this plan was
$440,000 and $402,000 at November 30, 1999 and 1998, respectively.
Accumulated benefits for supplemental executive retirement plans totaled
approximately $9,595,000 and $8,765,000 at November 30, 1999 and 1998,
respectively. Expense related to this plan amounted to $1,431,000 and $1,321,000
for the years ended November 30, 1999 and 1998, respectively.
The Company also has a defined contribution retirement plan to which the Company
contributed and charged to expense approximately $4,692,000, and $4,113,000 for
the years ended November 30, 1999 and 1998, respectively.
9. Segment Information
Lilly formulates, manufactures and markets industrial coatings and specialty
chemicals primarily to original equipment manufacturers on a worldwide basis.
The Company operates within three business segments which serve three end-use
markets: wood coatings; metal coatings; and composites and glass coatings.
Products sold to these markets have similar economic characteristics, production
processes, distribution methods and regulatory environments. Based on these
similarities, the Company's products are aggregated into one reportable segment,
Industrial Coatings and Specialty Chemicals, for purposes of this disclosure.
The accounting policies of the reportable segment are the same as those
described in the summary of significant accounting policies.
Net sales of Industrial Coatings and Specialty Chemical products by end-use
market are as follows (in thousands):
1999 1998 1997
--------------------------------------------------------------------------------
Wood Coatings $297,741 $269,585 $262,816
Metal Coatings 284,463 274,951 268,826
Composites and Glass Coatings 73,997 74,466 69,654
--------------------------------------
$656,201 $619,002 $601,296
======================================
The Company maintains operations in the United States, Australia, Canada, China,
Germany, Ireland, Malaysia, Mexico, Singapore, Taiwan and the United Kingdom. A
summary of geographic data for the years ended November 30 is as follows (in
thousands):
1999 1998 1997
--------------------------------------------------------------------------------
Net sales to unaffiliated customers:
United States $ 504,875 $ 488,703 $ 491,973
Outside U.S., excluding U.S. exports 151,326 130,299 109,323
------------------------------------
Consolidated $ 656,201 $ 619,002 $ 601,296
====================================
Operating income:
United States $ 48,473 $ 50,942 $ 51,150
Outside U.S. 24,427 21,089 18,984
------------------------------------
Consolidated $ 72,900 $ 72,031 $ 70,134
====================================
Total assets:
United States $ 446,259 $ 430,081 $ 453,456
Outside U.S. 101,618 87,165 49,007
Eliminations (deductions) 2,549 (761) (668)
------------------------------------
Consolidated $ 550,426 $ 516,485 $ 501,795
====================================
10. Quarterly Results of Operations (Unaudited)
Quarterly results of operations are summarized as follows (in thousands, except
per share data):
Quarter Ended
1999 February 28 May 31 August 31 November 30
--------------------------------------------------------------------------------
Net sales $146,139 $171,375 $169,452 $169,235
Gross profit 56,056 67,118 64,229 67,512
Net income 5,584 9,627 8,677 9,433
Net income per share
Basic .24 .41 .38 .41
Diluted .24 .41 .37 .41
Quarter Ended
1998 February 28 May 31 August 31 November 30
--------------------------------------------------------------------------------
Net sales $143,334 $159,198 $159,345 $157,125
Gross profit 53,431 61,794 61,752 62,384
Net income 5,140 8,715 8,674 9,050
Net income per share
Basic .22 .38 .37 .39
Diluted .22 .37 .37 .39
Report of Independent Auditors
Shareholders and Board of Directors
Lilly Industries, Inc.
We have audited the accompanying consolidated balance sheets of Lilly
Industries, Inc. and subsidiaries as of November 30, 1999 and 1998, and the
related consolidated statements of income, cash flows and shareholders' equity
for each of the three years in the period ended November 30, 1999. 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 in accordance with auditing standards generally accepted
in the United States. Those standards 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. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Lilly Industries,
Inc. and subsidiaries at November 30, 1999 and 1998, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended November 30, 1999, in conformity with accounting principles
generally accepted in the United States.
/s/ Ernst & Young LLP
January 14, 2000
Indianapolis, Indiana
Responsibility for Financial Statements
The management of Lilly Industries, Inc. is responsible for the preparation of
the financial statements in the Annual Report and for the integrity and
objectivity of the information presented. The financial statements have been
prepared in conformity with accounting principles generally accepted in the
United States and necessarily include amounts which are estimates and judgments.
The fairness of the presentation in these statements of the Company's financial
position, results of operations, cash flows and shareholders' equity is reported
on by the independent auditors.
To assist in carrying out the above responsibility, the Company has internal
systems which provide for selection of personnel, segregation of duties and the
maintenance of accounting policies, systems, procedures and related controls.
Although no cost-effective system can insure the elimination of errors, the
Company's systems have been designed to provide reasonable but not absolute
assurances that assets are safeguarded, that policies and procedures are
followed, and that the financial records are adequate to permit the production
of reliable financial statements. The Audit Committee of the Board of Directors,
which is composed of directors who are not employees of the Company or its
subsidiaries, meets regularly with Company officers and independent auditors in
connection with the adequacy and integrity of the Company's financial reporting
and internal controls.
/s/ John C. Elbin /s/ Kenneth L. Mills
John C. Elbin Kenneth L. Mills
Vice President, Chief Financial Officer Corporate Controller and
and Secretary Assistant Secretary
Investor Information
Form 10-K
A copy of the Form 10-K, which is filed with the Securities and Exchange
Commission, will be sent free to any shareholder upon written request. Contact
Kenneth L. Mills, Corporate Controller and Assistant Secretary, at Lilly
Industries, Inc. 200 W. 103rd Street Indianapolis, IN 46290; or E-mail:
millsk@lillyindustries.com.
Registrar and Transfer Agent
Communications concerning shareholder records, including address changes, stock
transfers, cash dividends or other service needs should be directed to National
City Bank, Attn: Corporate Trust Operations, P. O. Box 92301, Cleveland, Ohio
44193-0900, (800) 622-6757.
Dividend Reinvestment Plan
A dividend reinvestment and voluntary stock purchase plan for Lilly Industries,
Inc. shareholders permits purchase of the Company's Class A stock without
payment of brokerage commission or service charge. Participants in this plan may
have cash dividends on their shares automatically reinvested and, if they
choose, invest by making optional cash payments. Additional information on the
plan is available by writing or calling: National City Bank, Attn: Corporate
Trust Operations, P. O. Box 92301, Cleveland, Ohio, 44193-0900 (800) 622-6757.
Analyst Contacts
Security analyst inquiries are welcomed. Please call: John C. Elbin, Vice
President, Chief Financial Officer, and Secretary (317) 814-8700.
Annual Meeting
The meeting notice and proxy materials were mailed to shareholders with their
copies of this annual report. Lilly urges all shareholders to vote their proxies
and thus participate in the decisions that will be made at the annual meeting.
The meeting will be held on March 31, 2000 at 10:00 A.M., EST, at the Company's
corporate offices located at 200 W. 103rd Street, Indianapolis, Indiana. (317)
814-8700.
Stock Trading and Dividend Information
The Company's Class A stock is traded on the New York Stock Exchange under the
symbol LI. Dividends are traditionally paid on the 1st business day of January,
April, July and October to shareholders of record approximately three weeks
prior. The following table sets forth the dividends paid per share of stock and
the high and low prices in each of the quarters in the past two years ended
November 30.
Dividends Price Range
Fiscal 1999 Per Share High Low
--------------------------------------------------------------------------------
1st quarter ended February 28 $ .08 20 1/8 16 1/4
2nd quarter ended May 31 .08 19 3/8 14
3rd quarter ended August 31 .08 19 3/4 15 5/8
4th quarter ended November 30 .08 16 1/4 13 1/8
------
$ .32
======
Dividends Price Range
Fiscal 1998 Per Share High Low
--------------------------------------------------------------------------------
1st quarter ended February 28 $ .08 20 5/8 17 7/8
2nd quarter ended May 31 .08 22 3/4 17 3/4
3rd quarter ended August 31 .08 24 5/8 18 1/2
4th quarter ended November 30 .08 19 7/8 14 3/8
------
$ .32
======
At November 30, 1999 there were approximately 2,500 registered shareholders of
Class A stock and 62 registered shareholders of Class B stock, which is reserved
for employees of the Company.
Locations
International
Australia
283 Alfred Street
North Sydney, NSW 2060
Australia
Canada
1915 Second Street West
Cornwall, Ontario K6H 5T1
Canada
65 Duke Street
London, Ontario N6J 2X3
Canada
China
Lot 3 Xintang
District Administration
Dalinshan, Dongguan
Guangdon
China 511774
England
152 Milton Park
Abingdon
Oxfordshire OX14 4SD
England
Germany
D-8649 Wallenfels
Postfach 1126
Germany
Friedensstrasse 40
D-52249 Eschweiler
Germany
Ireland
Willowfield Road
Ballinamore
Co. Leitrim
Ireland
Malaysia
Lot No. 4963, Jalan Teratai
5H Miles
Meru Industrial Zone
41050 Klang
Selangor Darul Ehsan
Malaysia
Mexico
Ave. Central No. 223
Los Lermas, Guadalupe
N.L. Mexico 67190
Singapore
09-09 International Building
360 Orchard Road
Singapore
Taiwan, R.O.C.
No. 1 Kung Yeh First Road
Zenwu Village
Kaohsiung Hsien Taiwan, R.O.C.
United States
Arkansas
1900 E. 145th Street
Little Rock, AR 72206
California
210 East Alondra Blvd.
Gardena, CA 90248
901 West Union Street
Montebello, CA 90640
Connecticut
145 Dividend Road
Rocky Hill, CT 06067
Florida
2355 S.W. 66th Terrace
Davie, FL 33317
Illinois
5400 23rd Avenue
Moline, IL 61265
Indiana
28335 Clay Street
Elkhart, IN 46517
546 W. Abbott Street
Indianapolis, IN 46225
Kentucky
347 Central Avenue
Bowling Green, KY 42101
Michigan
411 Darling Street, N.
Fremont, MI 49412
4999 36th Street, SE
Grand Rapids, MI 49512
Missouri
1136 Fayette
N. Kansas City, MO 64116
New Jersey
1991 Nolte Drive
Paulsboro, NJ 08066
North Carolina
10300 Claude Freeman Drive
Charlotte, NC 28262
2147 Brevard Road
High Point, NC 27263
1717 English Road
High Point, NC 27262
Texas
2518 Chalk Hill Road
Dallas, TX 75212
Washington
13535 Monster Road
Seattle, WA 98178
Corporate Offices
200 W. 103rd Street
Indianapolis, Indiana 46290
Corporate Technology CenterOfficers
521 W. McCarty Street
Indianapolis, Indiana 46225
Officers and Directors
Douglas W. Huemme, 58
Chairman and
Chief Executive Officer
Robert A. Taylor, 45
President and
Chief Operating Officer
Hugh M. Cates, 56
Vice President and General Manager,
Wood Coatings
Larry H. Dalton, 52
Vice President,
Manufacturing and Engineering
Alain DeBlandre, 43
Vice President and
Managing Director - Europe
William C. Dorris, 56
Vice President,
Corporate Development
John C. Elbin, 46
Vice President,
Chief Financial Officer and Secretary
Ned L. Fox, 58
Vice President,
Supply Chain Management
A. Barry Melnkovic, 42
Vice President, Human Resources
John D. Million, 57
Vice President and Managing Director, Asia-Pacific
Kenneth L. Mills, 51
Corporate Controller and
Assistant Secretary
Gary D. Missildine, 58
Vice President and General Manager,
Industrial Coatings
Virgil E. Underwood, 48
Vice President and General Manager,
Coil Coatings
Keith C. Vander Hyde, Jr., 41
Vice President and General Manager,
Specialty
Jay M. Wiegner, 56
Vice President and General Manager,
Composites and Glass Coatings
Directors
James M. Cornelius,
Chairman, Guidant Corporation
William C. Dorris,
Vice President,
Corporate Development
John C. Elbin,
Vice President, Chief Financial Officer
and Secretary
Paul K. Gaston,
Former Chairman,
Guardsman Products, Inc.
Douglas W. Huemme,
Chairman and
Chief Executive Officer
Harry Morrison, Ph.D.,
Dean, School of Science
Purdue University
Norma J. Oman,
President and
Chief Executive Officer
Meridian Insurance Group, Inc.
John D. Peterson,
Chairman, City Securities Corporation
Thomas E. Reilly, Jr.,
Chairman and
Chief Executive Officer
Reilly Industries, Inc.
Robert A. Taylor,
President and
Chief Operating Officer
Dates Referenced Herein and Documents Incorporated by Reference
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