JUNO LIGHTING INC - 10-Q Quarterly Report

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

(Mark One)
X	QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

			For the quarterly period ended February 28, 2003 OR
	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from				to	.

		Commission file number 0-11631

JUNO LIGHTING, INC.
(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)

36-2852993
(I.R.S. Employer Identification No.)

1300 S. Wolf Road
P.0. Box 5065
Des Plaines, Illinois

60017-5065
(Zip code)

(Address of principal executive offices)

Registrant's telephone number, including area code:

(847) 827-9880

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Name of each exchange on which registered

Common Stock, $.001 par value

The NASDAQ SmallCap Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes X No

There were 2,529,534 shares of common stock outstanding as of March 31, 2003.

JUNO LIGHTING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

			February 28,					November 30,
			2003					2002

			(Unaudited)					(Unaudited)
Assets
Current:
Cash		$	1,200					$		1,221
Accounts receivable, less allowance for doubtful accounts of $928
and $926			32,641							32,225
Inventories, net			24,411							22,870
Prepaid expenses and miscellaneous			5,134							4,724

Total current assets			63,386							61,040

Property and equipment:
Land			7,297							7,267
Building and improvements			33,527							33,376
Tools and dies			12,563							12,116
Machinery and equipment			7,871							7,690
Computer equipment			8,910							8,963
Office furniture and equipment			3,481							3,213

			73,649							72,625
Less accumulated depreciation			(31,551		)					(30,619		)

Net property and equipment			42,098							42,006

Other assets:
Goodwill			11,790							11,766
Deferred financing costs, net of accumulated amortization of $4,751
and $4,426			5,592							5,917
Miscellaneous			3,332							3,123

Total other assets			20,714							20,806

Total assets		$	126,198					$		123,852





Liabilities and Stockholders' Deficit
Current:
Accounts payable	$			11,960			$				10,960
Accrued liabilities				11,606							18,471
Short term borrowings				12,500							6,050
Current maturities of long-term debt				3,901							4,681

Total current liabilities				39,967							40,162

Long-term debt, less current maturities				154,448							155,626

Deferred income taxes payable				3,569							3,215

Commitments and Contingencies
Stockholders' Deficit
Preferred stock, Series A and B convertible $.001
par value, $100 stated value, 5,000,000 shares
authorized and 1,063,500 shares issued.				143,089							140,283
Common stock, $.001 par value;
Shares authorized 45,000,000;
Issued 2,529,534				2							2
Paid-in capital				1,035							1,035
Accumulated other comprehensive loss				(226		)					(772		)
Shareholder note receivable				(200		)			(200				)
Accumulated deficit				(215,486		)			(215,499				)

Total stockholders' deficit				(71,786		)			(75,151				)

Total liabilities and stockholders' equity	$			126,198			$				123,852

(See Notes To Condensed Consolidated Financial Statements)

2

JUNO LIGHTING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In Thousands Except For Share Amounts)
	Three Months Ended

		February 28,				February 28,
		2003				2002

		(Unaudited)				(Unaudited)

Net sales			$	43,523			$	41,406

Cost of sales				22,118				21,067

Gross profit				21,405				20,339

Selling, general and administrative expenses				14,182				13,073
Costs of terminated acquisition				-				3,050

Operating income				7,223				4,216

Other income (expense):

Interest expense				(4,109	)			(4,397	)

Interest and dividend income				3				4

Unrealized gain on interest rate swap				1,263				227

Miscellaneous				14				19

Total other income (expense)				(2,829	)			(4,147	)

Income before taxes on income				4,394				69

Taxes on income				1,575				27

Net income				2,819				42

Less: preferred dividends				2,806				2,592

Net income (loss) available to common shareholders			$	13	$			(2,550	)



Net income (loss) per common share (basic and diluted)			$	.01	$			(1.02	)

(See Notes To Condensed Consolidated Financial Statements)

JUNO LIGHTING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF ACCUMULATED DEFICIT

	(In Thousands)
	Three Months Ended
	February 28, 2003

		(Unaudited)


Accumulated deficit, beginning of period		(215,499	)

Preferred dividend		(2,806	)

Net income, three months ended February 28, 2003		2,819

Accumulated deficit, end of period		(215,486	)

(See Notes To Condensed Consolidated Financial Statements)

JUNO LIGHTING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	(In Thousands)
	Three Months Ended

		February 28,					February 28,
		2003					2002

		(Unaudited)					(Unaudited)
Cash Flows used in operating activities:

Net income			$	2,819		$		42
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization				1,434				1,466
Unrealized (gain) on interest rate swap				(1,263	)			(227	)
Deferred income taxes				354				(72	)
Gain on sale of assets				1				-
Deferred compensation				-				18
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable				(416	)			590
(Increase) in inventory				(1,541	)			(955	)
Decrease in prepaid expenses and miscellaneous				600				587
Decrease in other assets				172				132
(Decrease) in accounts payable and accrued liabilities				(5,615	)			(2,445	)

Net cash used in operating activities				(3,455	)			(864	)

Cash flows used in investing activities:
Capital expenditures				(1,041	)			(421	)

Net cash used in investing activities				(1,041	)			(421	)

Cash flows provided by financing activities:

Proceeds from bank debt				19,650				15,550
Principal payments on long-term debt and bank debt				(15,175	)			(14,199	)

Net cash provided by financing activities				4,475				1,351

Net (decrease) increase in cash				(21	)			66

Cash at beginning of period				1,221				1,280

Cash at end of period			$	1,200		$		1,346



Supplemental disclosures of cash flow information:

Cash paid during the period for:
Interest			$	8,410		$		8,148
Income taxes				774				311

(See Notes To Condensed Consolidated Financial Statements)

JUNO LIGHTING, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

REVENUE RECOGNITION

Revenues from sales are recognized at the time goods are shipped when title and risk of loss passes to the customer.

GOODWILL

The Company adopted SFAS 142 "Goodwill and Other Intangibles" during fiscal 2002. The Company reviews goodwill for impairment during the fourth quarter of each year. No events have occurred, nor has there been a change in circumstances, that would reduce the fair value of the reporting unit below its carrying amount. Furthermore, the Company has not amortized any of its goodwill for the year ended November 30, 2002.

INCOME TAXES

The Company uses the asset and liability approach under which deferred taxes are provided for temporary differences between the financial reporting and income tax bases of assets and liabilities based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.

STOCK-BASED COMPENSATION

As permitted by Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"), the Company has elected to continue to account for its stock-based awards in accordance with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25").

DERIVATIVE INSTRUMENTS

Changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and, if it is, the type of hedge transaction. The Company entered into two interest rate swap agreements in fiscal 2001 (notional amounts of $30,000,000 pay-fixed rate swap and $60,000,000 pay-floating rate swap), which resulted in a net unrealized gain of $1,263,000 for the quarter ended February 28, 2003 and a net unrealized gain of $227,000 for the quarter ended February 28, 2002, based on the swaps' estimated market values as of February 28, 2003, and 2002, respectively. These derivatives do not qualify for hedge accounting. Accordingly, the net impact was recorded as other income on the consolidated statements of income for the quarters ended February 28, 2003 and 2002. The Company entered into these agreements to reduce the risk of adverse changes in variable interest rates on certain of the long-term deb t. These derivative instruments will be adjusted to estimated market values quarterly with any adjustment impacting current earnings until their respective maturities.

FINANCIAL INFORMATION

The financial information presented in these condensed consolidated financial statements is unaudited but, in the opinion of management, reflects all normal adjustments necessary for the fair presentation of the Company's financial position, results of its operations and cash flows. The information in the condensed consolidated balance sheet as of November 30, 2002 was derived from the Company's 2002 audited consolidated financial statements.

INVENTORIES

Inventories are summarized as follows:

	(In Thousands)
	February 28,					November 30,
	2003					2002

Finished goods		$	14,224		$		12,873
Raw materials			10,919				10,745
Reserve for Obsolescence			(732	)			(748	)

		$	24,411		$		22,870

LONG-TERM DEBT AND SHORT-TERM BORROWINGS

Long-term debt consists of the following:

	(In Thousands)
	February 28,			November 30,
	2003			2002

Bank of America, N.A. and certain other lenders,
Tranche A Term Loan, payable in escalating
installments through November, 2005, plus
interest at a variable rate, generally
approximating 3 month LIBOR plus 2.25%		$	10,989		$	12,683
Bank of America, N.A. and certain other lenders,
Tranche B Term Loan, payable in escalating
interest at a variable rate, generally
approximating 3 month LIBOR plus 3.0%			23,035			23,318
Senior Subordinated Notes due July 2009, plus
interest at 11 7/8%, net of discount of $675
and $694, respectively			124,325			124,306

			158,349			160,307
Less current maturities			3,901			4,681

Total long-term debt		$	154,448		$	155,626

   The Company has a senior credit facility (the "Senior Credit Facility") with Bank Of America, N.A., Credit Suisse First Boston and certain other lenders providing (i) a $90 million term facility consisting of a (a) $40 million tranche A term loan ("Term Loan A"), and (b) $50 million tranche B term loan ("Term Loan B"), and (ii) a $35 million revolving credit facility (the "Revolving Credit Facility"). Borrowings under the Senior Credit Facility bear interest, at the Company's option, at a rate per annum equal to either the Eurodollar rate (the London interbank offered rate for eurodollar deposits as adjusted for statutory reserve requirements) or a base rate plus variable applicable percentages. At February 28, 2003, the nominal interest rates for Term Loan A and Term Loan B were 3.84% and 4.34%, respectively. Term Loan A and Term Loan B are each payable in separate quarterly installments.

   The final maturity of Term Loan A is November 30, 2005 and the final maturity of Term Loan B is November 30, 2006. Amounts outstanding under the Revolving Credit Facility at February 28, 2003 and November 30, 2002 were $12,500,000 and $6,050,000 respectively. At February 28, 2003, the nominal interest rate for borrowing on the Revolving Credit Facility was 4.75%. Borrowings under the Revolving Credit Facility are due on November 30, 2005. In addition, the Company issued $125 million principal amount of 11-7/8% senior subordinated notes due July 1, 2009 (the "Notes") to qualified institutional buyers under a private placement offering pursuant to Rule 144A and Regulation S of the Securities Act of 1933, which notes were then exchanged for new notes registered under the Securities Act of 1933 with substantially identical economic terms, resulting in approximately $120.4 million in proceeds to the Company. Interest is payable on the Notes semi-annually on January 1 and July 1 of each year . The Notes are unsecured senior subordinated obligations of the Company, subordinated in right of payment to all existing and future senior indebtedness of the Company, including the Senior Credit Facility. Each of the aforementioned debt facilities contain restrictive covenants. The credit agreement related to the Senior Credit Facility (the "Secured Credit Agreement") requires the Company to maintain certain financial ratios, as defined therein.

   Relating to the Senior Credit Facility and the Notes, the Company incurred approximately $3.9 million and $6.3 million of financing fees, respectively, which are being amortized over the life of the related debt.

The Senior Credit Facility is collateralized by substantially all of the assets of the Company and its domestic subsidiaries as more particularly described in the Secured Credit Agreement dated June 29, 1999 and filed as an exhibit hereto. The aggregate amounts of existing long-term debt maturing in each of the next three years are as follows: 2004 - $3,901,000; 2005 - $4,817,000; 2006 - $22,380,000.

SERIES A AND SERIES B PREFERRED STOCK

   On June 30, 1999, the Company issued 1,060,000 shares of Series A convertible preferred stock ("Series A") to Fremont Investors and certain employees of the Company. On November 30, 2000, the Company issued 3,500 shares of Series B convertible preferred stock ("Series B", and together with the Series A, the "Preferred Stock") to the Company's Chief Executive Officer. Holders of the Preferred Stock are entitled to receive cumulative quarterly dividends, whether or not declared by the Board of Directors, in an amount equal to the greater of:

   - dividends which would have been payable to the holders of Series A or Series B, as the case may be, in such
     quarter had they converted their Preferred stock into Juno common stock prior to the record date of dividends
     declared on the common stock in such quarter, or

   - the stated amount then in effect multiplied by 2%.

   Through June 30, 2004, the dividends for the Series A will be payable by an increase in the stated amount of such stock, and through November 30, 2005, the dividends for the Series B will be payable by an increase in the stated amount of such stock. After June 30, 2004, the dividends on the Series A will be paid in cash until redemption or conversion, and after November 30, 2005, the dividends on the Series B will be paid in cash until redemption or conversion. The Preferred Stock is convertible into shares of the Company's common stock at a price of $26.25 per share. Holders of Preferred Stock are entitled to one vote for each whole share of common stock that would be issuable to such holder upon the conversion of all the shares of the Preferred Stock held by such holder on the record date for the determination of stockholders entitled to vote. Additionally, holders of Preferred Stock have preference to common stockholders in the event of liquidation, dissolution, winding up or sale of the Company.

BUSINESS SEGMENTS AND GEOGRAPHICAL INFORMATION

The Company operates in one product segment - the design, manufacture and marketing of lighting fixtures. The aggregation criteria for sales are based on point of shipment while the aggregation criteria for assets are based on their physical location.

Financial information by geographic area is as follows:



Three months ended February 28,		2003		2002

Net Sales:
United States
(including Puerto Rico)	$	39,960	$	38,120
Canada		3,563		3,286

Total	$	43,523	$	41,406



		February 28,		November 30,
		2003		2002

Total Assets:
United States	$	113,319	$	111,294
Canada		12,879		12,558

Total	$	126,198	$	123,852

NET INCOME (LOSS) PER COMMON SHARE

Basic earnings per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding. Diluted earnings per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding including assumed exercise of dilutive stock options during the periods. Such weighted average number of shares outstanding is as follows:


Three months ended February 28,	2003	2002


Basic and Diluted	2,529,534	2,500,389

COMPREHENSIVE (LOSS) INCOME

As of December 1, 1998, the Company adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS 130). SFAS 130 established new rules for the reporting and display of comprehensive income and its components. SFAS 130 requires foreign currency translation adjustments to be included in other comprehensive income.

The components of comprehensive income, net of related tax, are as follows (in thousands):

	Three Months Ended
	February 28, 2003			February 28, 2002

Net income		$	2,819		$	42
Foreign currency
translation adjustment			546			(144	)

Comprehensive income		$	3,365		$	(102	)

The components of accumulated other comprehensive loss, net of related tax, are as follows (in thousands):

	Three Months Ended
	February 28, 2003				November 30, 2002

Foreign currency
translation adjustment		$	(226	)		$	(772	)

Accumulated other
comprehensive loss		$	(226	)		$	(772	)

MERGER AND RECAPITALIZATION

On June 30, 1999, Jupiter Acquisition Corp. ("Merger Sub"), a Delaware corporation and a wholly-owned subsidiary of Fremont Investors I, LLC ("Fremont Investors"), was merged (the "Merger") with and into the Company pursuant to an Agreement and Plan of Recapitalization and Merger dated March 26, 1999 (the "Merger Agreement") by and among Merger Sub, the Company and Fremont Investors. Pursuant to the Merger, the holders of all the issued and outstanding shares of Juno common stock, $.01 par value per share, were entitled to receive either $25 cash or one share of Juno common stock, $.001 par value per share, for each share of common stock issued and outstanding; provided that this consideration was subject to proration, as such holders were entitled to receive an aggregate of 2,400,000 shares of Juno common stock. The Company funded this effective retirement of 16,242,527 shares of the Company's common stock with a payment to stockholders in the aggregate of approximately $406 million. Th e sources of this funding included the Company's available cash and marketable securities, a $106 million preferred stock investment by Fremont and key employees of Juno ("Series A"), approximately $94.9 million of bank debt ("Bank Debt") and the issuance of $125 million of subordinated debt ("Subordinated Debt"). In connection with the Merger, the Company incurred approximately $9.9 million in transaction costs and $10.2 million of deferred financing costs. Included in these costs were payments of approximately $4.9 million to Fremont Investors.

GUARANTORS' FINANCIAL INFORMATION

The Company has issued and registered $125 million of Series B Senior Subordinated Notes at 11-7/8% (the "Senior Subordinated Notes") under the Securities Act of 1933, as amended (the "Act"), which notes were exchanged for the notes that were sold earlier in a private placement offering to qualified institutional buyers. Pursuant to terms of the Senior Subordinated Notes, the Company's domestic subsidiaries, Juno Manufacturing, Inc., Alfa Lighting, Inc., and Indy Lighting, Inc., provide full and unconditional senior subordinated guarantees for the Senior Subordinated Notes on a joint and several basis.

Following is consolidating condensed financial information pertaining to the Company ("Parent") and its subsidiary guarantors and subsidiary non-guarantors.

For the Three Months Ended February 28, 2003

(in thousands)

										Non-
						Guarantor				Guarantor								Total
		Parent				Subsidiaries				Subsidiaries				Eliminations				Consolidated

Net sales	$		36,152		$		36,582		$		4,017		$		(33,228	)	$		43,523
Cost of sales			29,336				21,651				2,941				(31,810	)			22,118

Gross profit			6,816				14,931				1,076				(1,418	)			21,405
Selling, general and
administrative			6,901				6.407				846				28				14,182

Operating (loss) income			(85	)			8,524				230				(1,446	)			7,223
Other income (expense)			(2,715	)			(14	)			(100	)			-				(2,829	)

(Loss) income before
taxes on income			(2,800	)			8,510				130				(1,446	)			4,394
Taxes on income			(1,580	)			3,107				50				(2	)			1,575


Net(loss) income			(1,220	)			5,403				80				(1,444	)			2,819
Less: Preferred dividends			(2,806	)			-				-				-				(2,806	)

Net(loss) income
available to common
shareholders	$		(4,026	)	$		5,403		$		80		$		(1,444	)	$		13

GUARANTORS' FINANCIAL INFORMATION (CONTINUED)

For the Three Months Ended February 28, 2002

(in thousands)

										Non-
						Guarantor				Guarantor								Total
		Parent				Subsidiaries				Subsidiaries				Eliminations				Consolidated

Net sales	$		33,486		$		33,399		$		3,400		$		(28,879	)	$		41,406
Cost of sales			28,309				20,193				2,320				(29,755	)			21,067

Gross profit			5,177				13,206				1,080				876				20,339
Selling, general and
administrative			6,840				5,456				749				28				13,073
Costs of terminated acquisition			-				3,050				-				-				3,050

Operating (loss) income			(1,663	)			4,700				331				848				4,216
Other (expense)			(4,034	)			(7	)			(106	)			-				(4,147	)

(Loss) income before
taxes on income			(5,697	)			4,693				225				848				69
Taxes on income			(1,739	)			1,675				92				(1	)			27


Net (loss) income			(3,958	)			3,018				133				849				42
Less: Preferred dividends			(2,592	)			-				-				-				(2,592	)

Net (loss) income
available to common
shareholders	$		(6,550	)	$		3,018		$		133		$		849		$		(2,550	)

February 28, 2003

(in thousands)

													Non-
									Guarantor				Guarantor							Total
			Parent						Subsidiaries				Subsidiaries			Eliminations				Consolidated

Cash	$			1,079				$		(131	)	$		252	$		-		$		1,200
Accounts receivable, net					29,565					20,498				3,842			(21,264	)			32,641
Inventories				22,371						11,373				3,219			(12,552	)			24,411
Other current assets				3,430						1,597				107			-				5,134

Total current assets				56,445						33,337				7,420			(33,816	)			63,386
Property and equipment				10,888						60,081				3,056			(376	)			73,649
Less accumulated depreciation				3,654						27,327				850			(280	)			31,551

Net property and equipment						7,234				32,754				2,206			(96	)			42,098
Other assets				79,537						122				6,283			(65,228	)			20,714

Total assets	$			143,216				$		66,213		$		15,909	$		(99,140	)	$		126,198



Current liabilities	$			36,565				$		15,647		$		9,017	$		(21,262	)	$		39,967
Other liabilities				157,762						-				2,268			(2,013	)			158,017

Total liabilities				194,327						15,647				11,285			(23,275	)			197,984
Total stockholders'
(deficit) equity				(51,111			)			50,566				4,624			(75,865	)			(71,786)

Total liabilities and stockholders'
(deficit) equity		$		143,216				$		66,213		$		15,909	$		(99,140	)	$		126,198

GUARANTORS' FINANCIAL INFORMATION (CONTINUED)

November 30, 2002

(in thousands)

													Non-
									Guarantor				Guarantor							Total
			Parent						Subsidiaries				Subsidiaries			Eliminations				Consolidated

Cash	$				1,413			$		(202	)	$		10	$		-		$		1,221
Accounts receivable, net				28,600						14,769				4,373			(15,517	)			32,225
Inventories					19,786					11,353				2,840			(11,109	)			22,870
Other current assets					2,922					1,720				82			-				4,724

Total current assets					52,721					27,640				7,305			(26,626	)			61,040
Property and equipment					10,888					59,241				2,873			(377	)			72,625
Less accumulated depreciation			3,582							26,538				778			(279	)			30,619

Net property and equipment						7,306				32,703				2,095			(98	)			42,006
Other assets					79,912					113				5,959			(65,178	)			20,806

Total assets	$				139,939			$		60,456		$		15,359	$		(91,902	)	$		123,852



Current liabilities	$				31,217			$		15,248		$		9,214	$		(15,517	)	$		40,162
Other liabilities					158,613					-				2,248			(2,020	)			158,841

Total liabilities					189,830					15,248				11,462			(17,537	)			199,003
Total stockholders'
(deficit) equity					(49,891		)			45,208				3,897			(74,365	)			(75,151)

Total liabilities and stockholders'
equity (deficit)		$			139,939			$		60,456		$		15,359	$		(91,902	)	$		123,852

For the Three Months Ended February 28, 2003

(in thousands)

											Non-
							Guarantor				Guarantor								Total
		Parent					Subsidiaries				Subsidiaries				Eliminations				Consolidated

Net cash (used in) provided by
operating activities	$		(4809		)	$		1,084		$		279		$		(9	)	$		(3,455)

Cash flows (used in) investing
activities: Capital expenditures			-					(1,013	)			(28	)			-				(1,041)


Net cash (used in) investing
activities				-				(1,013	)			(28	)			-				(1,041)

Cash flows provided by (used in)
financing activities:
Proceeds from bank debt		19,650						-				-				-				19,650
Principal payments on
long term debt			(15,175		)			-				(9	)			9				(15,175)


Net cash provided by (used in)
financing activities			4,475					-				(9	)			9				4,475

Net (decrease) increase in cash			(334		)			71				242				-				(21)
Cash at beginning of year			1,413					(202	)			10				-				1,221


Cash at end of year	$		1,079			$		(131	)	$		252		$		-		$		1,200

GUARANTORS' FINANCIAL INFORMATION (CONTINUED)

For the Three Months Ended February 28, 2002

(in thousands)

											Non-
							Guarantor				Guarantor							Total
		Parent					Subsidiaries				Subsidiaries				Eliminations			Consolidated

Net cash (used in) provided by
operating activities	$		(1,591		)	$		559		$		160		$		8	$		(864)

Cash flows (used in) investing
activities: Capital expenditures				(8	)			(387	)			(26	)			-			(421)


Net cash (used in) investing
activities		(8			)			(387	)			(26	)			-			(421)

Cash flows provided by (used in)
financing activities:
Proceeds from bank debt		15,550						-				-				-			15,550
Principal payments on
long term debt			(14,199		)			-				(8	)			8			(14,199)


Net cash provided by (used in)
financing activities			1,351					-				(8	)			8			1,351

Net (decrease) increase in cash			(248		)			172				126				16			66
Cash at beginning of year			1,141					(541	)			674				6			1,280


Cash at end of year	$		893			$		(369	)	$		800		$		22	$		1,346

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INCOME TAXES

Three Months Ended February 28, 2003 Compared With Three Months Ended February 28, 2002

   During the first quarter ended February 28, 2003, net sales increased 5.1% to $43,523,000 compared to $41,406,000 for the like period in 2002 due to favorable trends in all product offerings for the Juno Division, offset by lower volumes in some of the Company's commercial product lines and continued selling price pressures.

   Cost of sales as a percentage of net sales remained relatively unchanged at 50.8% for the first quarter of 2003 compared to 50.9% for the like period in 2002 as favorable product line selling mix was substantially offset by unfavorable purchase price variance on commodity raw materials, and a continued competitive selling price environment in commercial end markets.

   Selling, general and administrative expenses expressed as a percentage of sales decreased to 32.6% for the first quarter of 2003 compared with 38.9% for the like period in 2002. First quarter 2002 results included $3,050,000 of one-time expenses incurred in connection with a proposed major acquisition that was not consummated.

   As a result of the above factors, operating income increased to 16.6% of sales as compared to 10.2% for the like period in 2002.

   Interest expense amounted to $4,109,000 for the first quarter of 2003 compared to $4,397,000 for the like period in 2002. This decrease is due to the reduction of debt from $178,170,000 at February 28, 2002 to $170,849,000 at February 28, 2003 and reductions in interest rates on the Company's floating rate debt.

INFLATION

While Juno believes that it generally has been successful in controlling the prices it pays for materials and passing on increased costs by increasing its prices, the Company may not have future success in limiting material price increases, reflecting any material price increases in the prices it charges its customers or offsetting such price increases through improved efficiencies.

LIQUIDITY AND CAPITAL RESOURCES:

   During the three month period ended February 28, 2003, operating activities used cash flow of $3,455,000. This was comprised principally of net income, depreciation and amortization, deferred income taxes, decreases in prepaid expenses and other assets (collectively aggregating $5,379,000), net of increases in inventory and accounts receivable, unrealized gain on interest rate swap, and decreases in accounts payable and accrued liabilities, collectively aggregating $8,835,000.

   Net cash used in investing activities amounted to $1,041,000 used to purchase capital assets.

   The net cash used in financing activities of $4,475,000 consisted primarily of proceeds from the Revolving Credit Facility of $19,650,000 less principal payments on the Senior Credit Facility of $15,175,000.

   Prior to the June 1999 Merger, the Company historically had funded its operations principally from cash generated from operations and available cash. The Company incurred substantial indebtedness in connection with the Merger. The Company's liquidity needs are expected to arise primarily from operating activities and servicing indebtedness incurred in connection with the Merger.

   Principal and interest payments under the Senior Credit Facility and the Subordinated Debt, both entered into in connection with the Merger, represent significant liquidity requirements for the Company. As of February 28, 2003, the Company had cash of approximately $1.2 million, a $12.5 million balance on the Company's Revolving Credit Facility and total term debt of approximately $158.3 million. Detailed information concerning the terms of the Senior Credit Facility and the Subordinated Debt can be found in the Company's audited financial statements included in the November 30, 2002 Annual Report on Form 10-K.

   The Company's $35 million Revolving Credit Facility is available to finance its working capital and had an outstanding balance of $12.5 million on February 28, 2003. The Company's principal source of cash to fund its liquidity needs will be net cash from operating activities and borrowings under the Senior Credit Facility. The Company believes these sources will be adequate to meet its anticipated future requirements for working capital, capital expenditures, and scheduled payments of principal and interest on its existing indebtedness for the next 12 months. However, the Company may not generate sufficient cash flow from operations or have future working capital borrowings available in an amount sufficient to enable it to service its indebtedness, including the Subordinated Debt, or to make necessary capital expenditures.

OTHER MATTERS:

This document contains various forward-looking statements. Statements in this document that are not historical are forward-looking statements. Such statements are subject to various risks and uncertainties that could cause actual results to vary materially from those stated. Such risks and uncertainties include: economic conditions generally; levels of construction and remodeling activities, the ability to improve manufacturing efficiencies, disruptions in manufacturing or distribution, product and price competition, raw material prices, the ability to develop and successfully introduce new products, technology changes, patent issues, exchange rate fluctuations, and other risks and uncertainties. The Company undertakes no obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.

RECENTLY ISSUED ACCOUNTING STANDARDS

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activites, " effective for exit or disposal activities initiated after December 31, 2002. Under the new rules, EITF, 94-3 has been nullified and now costs associated with an exit or disposal activity will be recognized when the liability is incurred rather than when the entity committed to an exit plan. Effective November 30, 2002, the Company adopted SFAS No. 146, which did not have an effect on the financial statements of the Company.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based Compensation-Transition and Disclosure". This standard amends the disclosure requirements of FASB Statement No. 123, "Accounting for Stock-Based Compensation," to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. This statement is effective for all interim periods beginning after December 15, 2002.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to market risks arising from changes in interest rates. As of February 28, 2003, the Company had both floating-rate and fixed rate long-term debt that is exposed to changes in interest rates. In order to manage the Company's risk, at February 28, 2003 the Company had two interest rate swap agreements. The net unrealized gain from these swaps for the quarter ended February 2003 was $1,263,000 based on the swaps' estimated market values as of February 28, 2003. Detailed information concerning the terms of interest rate swaps can be found in the Company's audited financial statements and notes thereto appearing in the November 30, 2002 Annual Report on Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

   Based on the evaluation of the Company's disclosure controls and procedures as of a date within 90 days of the filing date of this quarterly report, each of T. Tracy Bilbrough, the Chief Executive Officer, and George J. Bilek, Vice President-Finance, have concluded that in their judgment the Company's disclosure controls and procedures are designed to ensure that material information relating to the Company, including the Company's subsidiaries, is made known to such officers by others within the Company or its subsidiaries.

   There were no significant changes in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

PART II - OTHER INFORMATION

Item 1.   Legal Proceedings - On or about May 17, 2002, Juno filed a Complaint against U.S. Industries, Inc. in the Superior Court of the State of Delaware in and for New Castle County and issued written discovery to U.S. Industries. In the Complaint, Juno alleges that U.S. Industries breached an exclusivity agreement with Juno related to a proposed acquisition, by engaging in negotiations with another company, Hubbell Incorporated, during an exclusivity period with Juno. The Complaint seeks damages of $8,500,000 based on a liquidated damages provision contained in the exclusivity agreement to cover expenses incurred and additional losses by Juno, as well as attorneys' fees and costs. U.S. Industries has answered the Complaint and denied liability. The parties are proceeding with discovery.

Item 2.   Changes in Securities and Use of Proceeds - None

Item 3.   Defaults Upon Senior Securities - None

Item 4.   Submission of Matters to a Vote of Security Holders - None

Item 5.   Other Information - None

Item 6.   (a) Exhibits - None
              (b) During the quarter for which this report is filed, no reports on Form 8-K were filed.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

JUNO LIGHTING, INC.

By: /s/ George J. Bilek
George J. Bilek, Vice President Finance
(Principal Financial Officer and Duly
Authorized Officer of the Registrant)

Dated: April 11, 2003

I, T. Tracy Bilbrough, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Juno Lighting, Inc., a Delaware corporation;

2.   Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.   The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

   a)   designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

   b)   evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date");
and

   c)   presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function);

   a)   all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weakness in internal controls;
and

   b)   any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6.   The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: April 11, 2003

/s/ T. Tracy Bilbrough
T. Tracy Bilbrough
Chief Executive Officer

I, George J. Bilek, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Juno Lighting, Inc., a Delaware corporation;

2.   Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.   The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

   a)   designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

   b)   evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date");
and

   c)   presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function);

   a)   all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weakness in internal controls;
and

   b)   any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6.   The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: April 11, 2003

/s/ George J. Bilek
George J. Bilek
Vice President Finance