Thomas Industries Inc.
Thomas Industries Inc.
4360 Brownsboro Road, Suite 300
P.O. Box 35120
Louisville, Kentucky 40232
Fax: (502) 895-6618
Web site: http://www.thomasind.com Public Company
Sales: $177.2 million (1998)
Stock Exchanges: New York
Ticker Symbol: TII
NAIC: 333912 Air & Gas Compressor Manufacturing; 333911 Pump & Pumping Equipment Manufacturing
Thomas Industries Inc. manufactures compressors and vacuum pumps for Original Equipment Manufacturers (OEM) applications. The largest OEM markets for the company’s compressors and pumps are in the medical, information technology, automotive, and environmental industries. Until the late 1990s, Thomas was also known as a leading producer of consumer, commercial, and industrial lighting fixtures. In 1998, through a joint venture with competitor The Glenlyte Group Incorporated, its lighting business was spun off into a new company—Glenlyte Thomas Group LLC—which subsequently became the third largest lighting fixture manufacturer in North America, with an estimated 13 percent domestic market share. Headquartered in Louisville, Kentucky, Thomas Industries has more than 25 manufacturing and distribution facilities located in the United States, Europe, and Asia.
Thomas Industries was formed in a 1953 merger of two companies—a lighting fixture manufacturer and the maker of electrical spraying machines—both of which came into being in the late 1920s. The unlikely marriage of these two product lines was the cornerstone of what would become the company’s two core businesses: lighting fixtures and air compressors/pumps.
The lighting fixture side of Thomas Industries traces its history back to Milwaukee, Wisconsin, and two brothers: Henrik and Ole Moe. The Moe Brothers, together with a number of other entrepreneurs, owned the Moe-Bridges Co., a lighting fixture manufacturer formed in 1919. As a result of friction among the Moe-Bridges management, however, the Moe brothers were frozen out of the company in the late 1920s by the majority owners. Deciding to stay with the industry they knew, the Moes formed another lighting fixture company called Moe Brothers Manufacturing. Henrik’s two sons joined the business in the early 1930s, and in 1938, the company moved its operations from Milwaukee to Fort Atkinson, Wisconsin.
While the Moe brothers were building their lighting fixture business, the Electric Sprayit Company—the forerunner to Thomas Industries’ compressor and pump division—was also testing its wings. In 1928, the Electric Sprayit Company was formed in Chicago “to manufacture, buy, and sell electrical spraying machines, blowers, air compressors, mechanical, and mercantile devices.” In a curious twist of fate, in 1934 the Electric Sprayit Company acquired Moe-Bridges, the company that had forced out the Moe brothers, and moved from Chicago into the Moe-Bridges plant in Milwaukee. In 1939, Electric Sprayit moved its operations again, this time to Sheboygan, Wisconsin.
During World War II, both companies stopped making their standard product lines in order to produce materials for the war effort. At the close of the war, in 1946, Moe Brothers received a large contract from Sears to produce household pressure cookers. Although the company had not previously manufactured pressure cookers, the large stamping presses they had obtained for the war gave them the production capabilities for the job. The brothers planned to use sales revenues from the pressure cooker contract to return to the lighting fixture business. Unfortunately, Sears rescinded the company’s contract due to a product malfunction. In the aftermath of the contract loss, pressured by the bank to repay existing debt, the Moe brothers decided to sell the company.
Moe Brothers was purchased in 1948 by a Louisville investment group headed by Lee Thomas. Thomas, the former president of Ekco Products in Chicago, had recently purchased a small saw business in Louisville and was looking for further investment opportunities. His new purchase was renamed Moe Light, and a national advertising campaign was launched to promote residential lighting fixtures. Two years later, Moe Light expanded by opening a new residential lighting factory in Kentucky and acquiring the Los Angeles-based Star Lighting Fixture Company.
1950s Founding of Thomas Industries
In 1953, Moe Light Inc. and the Electric Sprayit Company merged, under the name of Thomas Industries. At that time, Electric Sprayit Company’s Sheboygan, Wisconsin, plant produced paint spraying equipment, specialized lighting for the government, and ordinance items. Two years after the merger, Thomas Industries began to diversify further, acquiring a power saw manufacturer and a Detroit-based bathroom cabinetry manufacturer. That same year, Thomas opened a new 114,000-square foot residential lighting fixture plant in Hopkinsville, Kentucky and moved its corporate headquarters from Wisconsin to Louisville, Kentucky. 1955 also marked Thomas Industries’ move from a privately owned company to a publicly owned one, with the company’s initial public offering.
The remainder of the 1950s were characterized by growth in the form of more acquisitions. The year 1957 saw the addition of the Radiant Glass Company of Fort Smith, Arkansas, a producer of street lighting globes and opalware glass for lighting fixtures. The Radiant Glass Company took over production of the blown glass components for Thomas’s lighting fixtures, which had previously been purchased from outside providers. A 1958 acquisition added the Benjamin Electric Manufacturing Company to the Thomas Industries stable. Located in Des Plaines, Illinois, Benjamin Electric was a manufacturer of commercial lighting fixtures. The final acquisition of the decade came in 1959, when the company purchased C&M Products Co., Ltd., of Toronto. Thomas proceeded to use the new foothold to introduce its U.S. products into the growing Canadian market.
In 1961, Lee Thomas stepped down from his position as president of Thomas Industries and was elected to serve as chairman of the board of directors, as well as CEO. Thomas was replaced by the company’s former executive vice-president, John Beam. Although this change in leadership was significant, it was perhaps less significant than another change that occurred that same year—a change in the design of the compressor units used in the Sprayit products. In 1961, these units were reconfigured to accommodate other continuous-air source applications. This redesign was the inception of the modern-day Thomas Industries’ OEM product line.
Thomas Industries expanded yet again in 1962 and 1963. In 1962, the company acquired the Thomas Products Company of Johnson City, Tennessee, a manufacturer of paint rollers, roller pans, and roller covers. Thomas management felt that the line of paint-related products would complement the Sprayit line of paint sprayers and compressors. In 1963, the company opened a new 250,000-square foot lighting fixture plant in Sparta, Tennessee, to replace the Benjamin Electric facility in Illinois, which was then closed. An existing 50,000-square foot Star Lighting plant in Los Angeles was also replaced by a new facility more than twice the size of the original.
1960s: Restructuring and Further Growth
By 1963, Thomas Industries was sprawling, both in terms of product lines and geographic distribution. To better order and manage the business, the company was split into five operating divisions. Its Residential Lighting Division, which consisted of the former Moe Lighting and Star Lighting lines, included dimmers, recessed, hand-blown glass, and illuminated signs. The company’s Commercial and Industrial Lighting Division consisted of Benjamin Electric products, such as air-handling fixtures, dimming systems, electronic signaling devices, and contract metal working and porcelainizing. The Special Products Division included what would become the company’s OEM lines—Sprayit paint sprayers, compressors, and pumps—as well as the Wright power blade and chain saws and Thomas paint rollers, covers, and pans. The final two divisions were more geographic in nature. The Pacific Division handled residential, commercial, and industrial lighting fixtures in the nine western states, Hawaii, and Alaska; and C&M Products oversaw the Canadian market.
The company moved into new territory in the lighting field in 1967, when it acquired Sandel Manufacturing, of Chicago, a producer of portable lamps, and the Phil-Mar Corporation, of Cleveland, a producer of ceramic lamps. This same year, Thomas opened a new residential lighting plant in Beaver Dam, Kentucky, and sold off the Wright Saw operation. The Wright plant was used to accommodate expansion of the Sprayit line of paint spraying equipment. In the fall of 1967, the expanding Thomas Industries’ stock was listed on the New York Stock Exchange.
We seek to be the preferred supplier by providing the best solutions in global markets where there is an application need for pressure, vacuum, or flow. To reach this objective, we must continue internal growth and make strategic acquisitions that expand our product line, offer new technologies, or allow us to extend our market reach with new or exiting OEMs.
The pattern of expansion and diversification continued through the remainder of the 1960s and into the early 1970s. A 1968 purchase added a Princeton, Indiana, paintbrush plant, whose operations were absorbed by Thomas’s paint roller operation in Johnson City, Tennessee. An acquisition in the following year brought Jet Line Products, of Matthews, North Carolina, into the fold. Jet Line’s product line included electrical conduit fishing equipment and built-in vacuum cleaning systems. In 1971, the company diversified further by acquiring Harris & Mallow Products, Inc., a maker of decorative wall clocks and weather instruments.
Thomas Industries had expanded well beyond the two-facility operation it began as 18 years earlier. By the end of 1971, the company had more than 2,308,300 square feet of production space in 13 plants. The company employed more than 3,700 persons and had sales of $82 million. The 1970s were to be characterized by a similarly rapid growth rate for Thomas.
New Products and Distribution Channels
Thomas’s next two acquisitions were Portland Willamette Company, a major manufacturer of firescreens and fireplace accessories, and House of Mosaics, a small producer of styrene and fiberglass lamps. These 1972 buys were followed in 1973 by the purchase of Abbott Industries, a producer of children’s lamps, and Spring Steel Fasteners, Inc. Both Abbott Industries and House of Mosaics served to broaden Thomas’s Residential Lighting Division, while Spring Steel Fasteners, which produced products for the electrical and construction industry, added to the Commercial and Industrial Lighting Division.
In 1974, Thomas engineers unveiled a series of new products that was to contribute much to the company’s overall growth and to the direction it would take in coming years. These products, stemming from the company’s existing line of compressors, included new OEM applications for compressors. Products for the automotive and copying equipment manufacturing industries were especially key to this new phase of growth. To accommodate the expansion of the compressor line, Thomas built a second, 126,000-square foot plant in Sheboygan, Wisconsin.
Also in 1974, Thomas acquired its second clock manufacturer: Colonial Manufacturing Company, a 76-year-old company with production facilities in Zeeland and Grand Rapids, Michigan. The largest maker of grandfather clocks in the world, Colonial also produced wall and mantel clocks. The following year, Thomas purchased All Wood Products Company, located in Hudson, North Carolina. All Wood Products was a manufacturer of wood components for the lamp and furniture industries.
In response to the growing do-it-yourself home improvement market, Thomas launched a new distribution and marketing effort in 1975. The initiative targeted these do-it-yourselfers via mass merchandisers and home building centers. By the end of 1975, the company’s fleet of delivery trucks was distributing products to more than 1,500 customers throughout the nation.
Five more companies were added to the ever-diversifying Thomas Industries collection in 1977 and 1978. The first, Oliver-MacLeod Limited, of Ontario, was a manufacturer of insulated chimneys and fireplaces. The second, Fastway Fasteners, of Ohio, manufactured metal and plastic fasteners—a complement to Thomas’s 1973 Spring Steel Fasteners acquisition. Los Angeles-based Builders Brass Works Corporation was a manufacturer of builder trim hardware and door control products; and Contempra Industries, of New Jersey produced food preparation appliances, such as yogurt makers, crepe makers, and outdoor grills. In 1978, Thomas acquired Pouliot Designs Corporation, a manufacturer of artificial plants, floral arrangements, and fiberglass planters. In the last major change of the decade, the company sold off its Phil-Mar ceramic lamp division that same year.
The 1980s began with a divestiture, a closing, and two moves. All Wood Products, which Thomas had acquired in 1975, was sold in 1980. Shortly thereafter, the All Illuminating Glass operation, formerly the Radiant Glass Company, was closed. Radiant Glass, purchased in 1957, had been one of Thomas Industries’ earliest acquisitions. The company also reshuffled some of its facility locations in 1980. The clock-making Colonial Manufacturing left Grand Rapids to relocate in Kentwood, Michigan, and Abbott Industries moved its operations into an existing plant in Brownsville, Tennessee.
Two more acquisitions of lighting fixture manufacturers followed in 1984: Capri Lighting and Gardco Manufacturing, both of California. Then in 1985, Thomas initiated an asset redeployment program, designed to shed less profitable divisions and reinvest in areas that offered better growth potential. As part of this new program, the company sold off its two clock divisions—Colonial Manufacturing and Harris & Mallow Products—and Contempra Industries, the maker of small, niche kitchen appliances. Following these divestitures, Thomas purchased Emco Lighting, of Milan, Illinois, and entered into a joint venture with a German company, ASF-Gesellschaft Fur Elektrotechnische GmbH & Co KG. Two years later, the German company was completely absorbed by Thomas.
The company’s decision to realign its investments set the stage for the next phase of the company: an intensified focus on what are today the company’s two main businesses—OEM air pumps and compressors and lighting.
Late 1980s and 1990s: Reorganization and Focus
As the 1980s drew to a close, Thomas repositioned itself to move into the coming decade. Along with a change in leadership brought on by the 1987 retirement of Chairman Lee Thomas came a reorganization of the corporate structure. This new structure tightened Thomas’s focus, replacing the five divisions established in the mid-1960s with two key divisions: Lighting and Specialty Products. This reorganization was followed closely by an expansion of the company’s compressor and vacuum pumps business, with the acquisition of the Louisiana-based FL Pneumotive and a second German company, Helmut Brey, GmbH.
The next several years were devoted to the dual goals of building the core businesses and divesting of companies that no longer “fit”—that is, those that fell outside the parameters of the two identified growth areas. In 1988, the company sold its interests in North American Decorative Products and Pouliot Designs, companies that were not part of the core businesses. Between 1992 and 1994, the Fastway Fasteners, Oliver-MacLeod, Portland Willamette, and Builders Brass Works divisions were also sold. The divestiture of these four companies further streamlined Thomas and gave it the capital necessary to make more targeted acquisitions.
One of the most significant acquisitions, and the company’s largest to date, occurred in 1989 when Thomas purchased Day-Brite Lighting for $90 million. Day-Brite, which manufactured commercial and industrial fluorescent lighting, also owned two separate, specialty product lines: McPhilben, which produced exits and electrical signage, and Omega, which produced architectural specification downlighting. Further growth for the lighting division came with the introduction of a patented, totally electronic fluorescent ballast. This product gave Thomas the distinction of being the only U.S. manufacturer of both electronic ballasts and fluorescent fixtures. In 1997 and 1998, the company grew its Canadian operations by purchasing two niche market manufacturers: ZED, of Quebec, and Horizon/Lite Energy of Ontario.
As the lighting division expanded, Thomas made concurrent efforts to grow the air compressors and pumps operation. In 1990, the German pump and compressor maker, Wilhelm Sauer GmbH, was acquired. One of the most significant expansions for this division came in 1996, however, with the acquisition of Welch Vacuum Technology. Welch, a leading supplier of vacuum pumps for laboratory and chemical equipment applications, served as Thomas’s entry into this growing OEM market. During these years of market expansion, the company was also broadening its geographic reach. In 1990, the compressors and pumps division opened a sales office in Japan, which was followed in 1992 by a sales office in Brazil. The company established its Asia Pacific headquarters in Hong Kong in 1997 and this same year initiated manufacturing operations in Mexico and the Czech Republic.
In 1998, Thomas made the most significant change in its corporate history when it merged its lighting division with major competitor, The Glenlyte Group. The joint venture, named Glenlyte Thomas Group LLC, gave Thomas a 32 percent interest, with Glenlyte carrying the remaining 68 percent. The pooling of the companies made the newly formed Glenlyte Thomas the third largest lighting fixture manufacturer in North America, with a domestic market share of approximately 13 percent. The companies each maintained their own brand identifications and organized two separate sales forces to support the two distinct product lines.
By 1998, 50 years after Lee Thomas bought the Moe brothers’ stock, Thomas Industries had grown into a major player in its two targeted businesses. The air compressors and pumps division had annual sales of more than two million units into more than 60 countries. Over 40 percent of the $177.2 million total sales were non-domestic. The company had operations in Europe, Asia, and the United States, and sales offices in Germany, the United Kingdom, Japan, Taiwan, China, and the United States.
The lighting division maintained nine manufacturing locations, seven divisions across the United States, and 14 major product lines. The company served markets in residential, office, educational, retail, healthcare, hospitality, industry, and municipal. Under the structure of the new joint venture with Glenlyte, sales income from Thomas’s lighting division was not included in Thomas Industries’ 1998 net sales, and therefore could not be meaningfully compared to those of the previous year.
Essentially, the merger of Thomas’s lighting division with The Glenlyte Group served to further separate the company’s two core businesses. With Glenlyte Thomas operating under its own auspices, Thomas planned to devote its energies to growth efforts in the area of OEM air compressors and pumps. The company’s 1998 annual report noted that, “Thomas Industries, formerly a two-core business, has now become a company focused on significantly growing its already world-class compressor and vacuum pump business.”
Strategies for growth in this division included enhanced research and development initiatives, toward the twin goals of developing new products and finding new applications for products. The company also planned to focus on identified growth markets, such as medical, laboratory and chemical equipment, automotive, and specific consumer products. Finally, patterning its future on its successful past, Thomas anticipated expanding into new markets via strategic partnerships, joint ventures, and acquisitions.
Welch Vacuum Technology Inc.
North American Compressor and Vacuum Pump Group; European Compressor and Vacuum Pump Group.
Benmour, Eric, ‘“We’ve Got Some Nice Things Goin’ On’: Thomas Industries Expects Record Pace to Continue in 1998,” Business First of Louisville, April 13, 1998.
“Glenlyte Group and Thomas Industries Agree to Create Powerful New Joint Venture,” Business Wire, April 29, 1998.
Thomas Industries Inc.: A Complete History through 1998, Louisville: Thomas Industries Inc., 1998.
“Thomas Industries, Glenlyte Complete Joint Venture,” Business First of Louisville, August 31, 1998.