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UNITED STATES
SECURITIES AND EXCHANGE C0MMISSION
Washington, D.C. 20549
FORM 10-K

Aggregate market value of voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold as of the last business day of the most recently completed second fiscal quarter, May 31, 2004: $65,134,733.

At January 31, 2005, 2,806,691shares of common stock were outstanding.

ITEM 1. BUSINESS

General

   Juno Lighting, Inc. began operations in 1976 and was incorporated in Illinois. It changed its state of incorporation to Delaware in 1983. Its executive offices and principal plant are located at 1300 S. Wolf Road, Des Plaines, Illinois 60018, a suburb of Chicago; the telephone number is (847) 827-9880. Juno also has facilities in the Los Angeles, San Francisco, Indianapolis, Toronto, Philadelphia, Dallas and Atlanta areas. The terms "Juno" and "Company" as used herein mean Juno Lighting, Inc. and its subsidiaries, collectively.

   The Company is a leading designer, assembler and marketer of recessed and track lighting fixtures. Its broad product line is used in commercial and residential remodeling and in new construction. Its principal products use a variety of light sources in line and low voltage and are designed for reliable and flexible function, energy efficient operation, attractive appearance and simple installation and servicing. The Company is also engaged in the marketing, design and manufacture of other incandescent, fluorescent and High Intensity Discharge ("HID") lighting products with application in the commercial lighting market, primarily in department and chain stores.

   Approximately 92% of the Company's sales in fiscal 2004 were made in the United States, with most of the balance made in Canada. The Company's sales are made primarily to electrical distributors and lighting showrooms as well as certain wholesale lighting outlets. Such distributors resell the Company's products for use in remodeling of existing structures and in new residential, commercial and institutional construction.

   The Company produces a wide variety of fixtures and related equipment for the recessed, track and HID lighting markets. Its recessed lighting fixtures are designed to be installed directly into ceilings, while its track lighting fixtures are mounted on electrified tracks affixed to ceilings or walls. End-users of the Company's products generally prefer them due to their superior design, reliability and ease of installation. Juno designs and assembles a majority of its products in-house. However, it outsources virtually all component manufacturing to a number of independent suppliers principally located near its production facilities. Some component inventory is maintained at independent supplier facilities. Inventories are maintained at three production and distribution facilities located near Chicago, Indianapolis and Toronto and at distribution facilities near Atlanta, Dallas, Los Angeles, San Francisco and Philadelphia.

   The Company's primary means of distribution is through over 2,100 distributors of lighting products located throughout the United States and Canada. The Company has established itself as a preferred lighting supplier by providing high quality and well-designed products, superior customer service, timely delivery, technical advice and product training. Its distributors maintain their own inventory of the Company's products, and, in turn, sell to electrical contractors and builders and, in some cases, at the retail level. Sales to distributors are made through the Company's knowledgeable sales staff and through manufacturers' agents who also sell other, non-competing electrical products. The Company also has a national accounts sales force that focuses on department store, specialty retail, supermarket and commercial accounts. The Company works closely with these national accounts to provide custom solutions to their lighting needs and, in turn, to have the Company's products specified f or their major renovations or store expansions.

Financial Information About Segments

   Financial information about segments is set forth in Note 15 of the Notes to Consolidated Financial Statements on page 39 of this Form 10-K.

Products

   The Company produces a wide variety of lighting fixtures and related equipment for residential, commercial and industrial applications. Major product categories include recessed lighting, track lighting, cabinet/display lighting and HID lighting. The Company believes its innovations in simplifying installation and improving the function of its lighting products has served to increase demand for its products.

   The Company markets recessed lighting for residential applications under the Juno, Aculux and Pro-Vector brands and for commercial/institutional applications under the Juno and Indy brands. Recessed products are also sold through select Lowe's stores under the Lowe's Builder's Best brand. Each recessed fixture is composed of a housing and a separate trim. Various size and style housings may be fitted with a variety of light sources and trim designs to satisfy different optical and aesthetic requirements for ambient downlighting, wall wash, accent and task lighting. Housing styles are adapted for various construction conditions including insulated ceilings, providing direct downlight in sloped ceilings and to install from below the ceiling in remodel installations. Insulated ceiling housings are marketed with an Air-Loc feature that restricts the passage of air into and out of a residence through the fixture to minimize energy loss.

   The Juno brand is positioned as a high quality, high value line for residential and light commercial applications with an extensive product range. Pro-Vector, and Builder's Best are value offerings with limited product features and scope of line. The Aculux brand features precision optics and very low brightness apertures to allow more dramatic lighting effects as typically specified by lighting designers for higher-end custom homes. The Company's Juno and Indy brand commercial recessed fixtures are used most frequently in department and chain stores and offer commercial-grade construction and a wider selection of incandescent, HID and compact fluorescent light sources to provide the higher wattage, energy efficiency and longer lamp life required for these applications.

   The Company offers several track lighting systems under the Trac-Master, Trac-Lites, Trac-12, Flex12 and Alfa brands. These products are used to provide flexible display lighting in retail, exhibit, hospitality and many other commercial and residential applications. Each system utilizes an electrified channel or rail, called the trac, that can accept a variety of individual fixtures that may be positioned anywhere along its length. The individual spotlight, flood and decorative pendant fixtures are available in different styles, sizes, finishes and light sources.

   The Juno Trac-Master brand offers the most versatile assortment of halogen, compact fluorescent and ceramic metal halide light sources and fixture styles and options required for commercial accent and display lighting. Trac-Lites is marketed as an economy brand with lighter-duty construction and fewer features, options and unique designs as compared to Trac-Master. Trac12 is a miniature 12-volt trac system that is used in settings where a smaller-scale, less obtrusive trac system is desirable and for concealed linear lighting in undercabinet, casework and coves. The Flex12 and Alfa brands feature decorative low voltage trac systems including flexible monorails that can be curved into a variety of shapes and a cable system with two parallel small diameter braided steel cables. Alfa products are characterized by more finely detailed spotlights and pendants in a wider assortment of decorative styles and finishes. The Alfa line also includes decorative wall sconces and bath bars with designs that coordinate with their track fixtures. Juno acquired Alfa in October 2002.

   The Company sells undercabinet and casework lighting products under the Juno and Danalite brands. These products compliment the Trac12 system mentioned above, which is also used extensively for these applications. Juno brand undercabinet products, introduced to the market in 2002 and enhanced in 2004, include a full offering of halogen, xenon and fluorescent models with varying features and price points to solve for the most common residential kitchen undercabinet lighting applications as well as commercial undercounter and shelf. Danalite brand products are made-to-order custom length linear extruded luminaires that are typically specified for use in more specialized millwork and showcase applications.

   HID lighting products are sold under the Acculite brand for commercial and industrial applications. Indoor lighting products include highbay and lowbay luminaires designed to illuminate large spaces such as factories, warehouses, indoor sports arenas and retail stores. Outdoor lighting products include area, flood, building and canopy mount luminaires to provide security lighting, to illuminate building facades, parking garages and parking lots. Acculite products are characterized by high quality construction and superior photometric performance to facilitate lower installation and operating costs. Juno acquired Acculite in 2001.

   In September 2003 the Company announced the launch of Modulight - an innovative fluorescent lighting system. Modulight system benefits include significant installation cost savings, ease of use, energy cost savings, improved safety and enhanced lighting layout flexibility. Modulight products began shipping to customers in early 2004.

   Additionally during 2003, Juno announced the launch of nine new families of track lighting products targeted at the commercial and residential end markets. The products - carrying the sub-brands of Avio, Trapezia, Uno/Duo, and Gyrus - include low voltage, line voltage, pendants, and T5HO wall wash executions for a variety of accent and area lighting applications. The products feature leading edge styling and innovative designs intended to excite the end-markets and enhance Juno's position as a leader in track lighting.

   Juno, Indy, Trac-Master, Real Nail, Air-Loc, Wireforms, Accents, Conix, Delta 200 Series, IdeaLab, It's All in the Lighting, Design Only and MH2 are registered trademarks of Juno. The Company owns the "Juno" trademark and housemark, and variations thereof, which are material to the Company's business. The Company considers its other trademarks to be valuable, but not essential to its business in the aggregate.

Production

   The Company designs and assembles a majority of its products in-house. However, the Company outsources virtually all component manufacturing to a number of independent suppliers who are located in the United States and abroad. Tools, dies and molds are manufactured by outside sources to the Company's designs and specifications. Tooling is consigned to independent job shops, largely near the Company's manufacturing facilities, which fabricate and finish the components of the Company's products. The Company inspects the components and assembles, tests, packages, stores and ships the finished products. Most assembly operations are performed at the Des Plaines, Illinois plant, Indianapolis, Indiana and Kitchener, Ontario assembly facilities with limited production by a third party of fully assembled products in Tijuana, Mexico with respect to several high volume units. Additionally, the Company sells certain finished products imported from China.

   The Company outsources manufacturing of virtually all components to minimize fixed costs and capital requirements and to produce flexibility in responding to market needs. It believes its utilization of subcontractors with specialized skills is the most efficient method of manufacturing its products. The Company further believes that alternate tool making specialists and fabricators are generally available. It uses multiple subcontractors for most of its components to facilitate availability. In addition, the Company purchases many of the raw materials used in the manufacturing of its components to control the quality of the raw materials used by the subcontractors and to receive more competitive prices for the raw materials. Currently, the Company contracts for the assembly of products with third parties whose facilities are located in Mexico and China.

   The Company spent approximately $5,943,000, $6,192,000, and $4,840,000 on research, development and testing of new products and development of related tooling in fiscal 2004, 2003, and 2002, respectively.

Sales and Distribution

   The Company has relationships with a broad base of over 2,100 distributors across the United States and in Canada. Each of the Company's distributors maintains its own inventory of Company products and in turn, sells to electrical contractors and builders and, in some cases, also sells at the retail level. In some cases, distributors will require that goods be drop shipped directly to the end user. Sales to distributors are made through the Company's own staff of sales managers and sales personnel and also through manufacturers' agents who sell other electrical products of a non-competitive character. The Company also seeks to have its products specified by architects, engineers and contractors for large commercial and institutional projects with actual sales made through the Company's distributors. The Company also sells to certain wholesale lighting outlets and national accounts.

   Inventories are maintained at three production and distribution facilities located near Chicago, Indianapolis and Toronto and at distribution facilities near Atlanta, Dallas, Los Angeles, San Francisco and Philadelphia. Most orders are shipped from stock inventory within 48 hours of receipt.

Backlog and Material Customers

   We have no material long-term contracts. The Company is not dependent on any single customer or group of customers, and no single customer accounted for sales in fiscal 2004 in an aggregate amount equal to 10% or more of the Company's consolidated revenues.

Competition

   We are not aware of any published figures that identify the overall market for the Company's products. Nevertheless, the Company believes that its sales place the Company among the five highest-selling manufacturers of track and recessed lighting products in the United States. The Company estimates that there are more than 50 manufacturers of competing track and recessed lighting products. The Company competes not only with manufacturers in its own fields, but also with manufacturers of a variety of fluorescent and decorative lighting products. A number of competitors, including the Company's two largest competitors, are divisions or subsidiaries of larger companies, which have substantially greater resources than the Company.

   There is wide price variance in competitive products and the Company believes that its line can be described as moderately priced in order to be attractive to the high-volume commercial and residential markets. However, lighting fixtures are often purchased in small quantities and, as a result, product features may be more important to a purchaser in small quantities than cost. The Company believes that its growth has been attributable principally to the design and construction of its products, the quality of its sales force and its reputation for prompt delivery and service.

Intellectual Property

   As of November 30, 2004, the Company owned a substantial number of United States patents and had several patent applications on file with the United States Patent Office. The Company also has corresponding foreign patents and registered trademarks in the United States. There is no assurance that any patents will be issued with respect to pending or future applications. As the Company develops products for new markets and uses, it normally seeks available patent protection. The Company believes that its patents are important, but does not consider itself materially dependent upon any single patent or group of related patents.

Employees

   The Company employs approximately 1,000 persons. Most of the Company's factory employees are represented by one of two unions. The expiration dates for the collective bargaining agreements pertaining to the Company's Des Plaines, Illinois, and Indianapolis, Indiana locations are September 2005 and September 2007, respectively.

Available Information

   The Company's Internet address is www.junolighting.com. The Company makes the reports it files with the Securities and Exchange Commission pursuant to Section 13(a) or 15(d) of the Exchange Act available on its Internet website as soon as reasonably practicable after the reports are filed with or furnished to the SEC. The information on the Company's website is not part of this report.

ITEM 2. PROPERTIES

   Juno owns a building located in Des Plaines, Illinois of approximately 510,000 square feet, which serves at its principal assembly, warehouse and executive office facility. Juno also owns distribution warehouses in the Philadelphia, Atlanta, and Toronto areas, which have, in the aggregate, approximately 140,700 square feet of floor space and a 130,000 square foot assembly and general office facility in Indianapolis, Indiana for its Indy Lighting, Inc. subsidiary. The Company leases four additional distribution warehouses located in the Los Angeles, San Francisco, Dallas areas as well as in Kitchener, Ontario for relatively short terms, which have, in the aggregate, approximately 138,000 square feet of floor space. These warehouse leases call for an aggregate annual rental of approximately $933,000. The Company's facilities are modern, considered adequate for its business as presently conducted and experience varying levels of utilization.

ITEM 3. LEGAL PROCEEDINGS

   Legal Proceedings - Currently, we are not party to any litigation or other legal proceeding that we believe could reasonably be expected to have a material adverse effect on our business, results of operation or financial condition. However, from time to time, we receive claims of and become subject to consumer protection, employment, labor, product liability and other commercial litigation related to the conduct of our business. Such litigation could be costly and time consuming and could divert our management and key personnel from our business operations. The uncertainty of litigation increases these risks. In connection with such litigation, we may be subject to significant damages or equitable remedies relating to the operation of our business and the sale of products. Any such litigation may materially harm our business, results of operations and financial condition.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

   None.

Executive Officers of the Registrant

   The following table gives certain information with respect to the Executive Officers of the Company as of January 31, 2005:

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Common Stock and Dividend Information

   The Company's Common Stock is being traded on The Nasdaq SmallCap Market. Prior to August 3, 2000, the Company's Common Stock was traded on the Nasdaq National Market.

   As of January 31, 2005 there were approximately 1,800 holders of record of Common Stock.

   The following table sets forth, for the fiscal years indicated, the range of high and low sales prices as reported by the Nasdaq Stock Market:

   On July 1, 2004 the Board of Directors declared a cash dividend payable to the holders of its common and preferred stock (on an as converted basis). The Board of Directors set the record date for determining stockholders of record entitled to receive the dividend as July 16, 2004 and the payment date as July 26, 2004. The total dividend paid was approximately $59.945 million or $6.83 per share of common stock (or common stock equivalent). The Company is prohibited from paying further cash dividends on its common stock under the terms of the Company's Credit Agreement (as later defined herein) and its Amended and Restated Certificate of Incorporation.

   (1)   Defined as total Current Assets minus total Current Liabilities.
   (2)   Defined as total Current Assets divided by total Current Liabilities.

   Both Working Capital and Current Ratio as defined above are important and relevant measurements given the Company's current capital structure and level of outstanding debt. In order to maximize debt reduction the Company must focus on sales growth, earnings and minimizing working capital.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Executive Overview of the Business

   A key financial objective of Juno is to reduce leverage. Since the merger and recapitalization in 1999, the Company has successfully achieved its business and financial objectives through the following initiatives:

Sales Growth
   The Company seeks to enhance growth in sales through product development, customer service, sales execution and resultant improvement in its market share position. Over the years, the Company has introduced a wide range of innovative products targeted for residential and commercial applications. Management believes that the new product introductions planned for 2005 along with ModuLight (introduced in 2004) will enable the Company to continue to grow.

Productivity and Cost Control
   The Company has been able to maintain relatively consistent gross margins in 2004 in spite of substantial increases in principal raw materials, primarily steel and aluminum through the combination of selling price increases, favorable leverage on fixed costs, productivity improvements and cost control. In addition, through its continuous improvement initiative which began in 2001, the Company has focused attention on metrics to improve productivity in its manufacturing operations and continually search for ways to control cost.

EBITDA and Working Capital Improvement
   Through existing cash incentive plans and stock option plans, the Company provides incentives to management that reward behavior that stimulates sales growth, EBITDA (earnings before interest, taxes, depreciation and amortization) growth, working capital management and resultant favorable cash flow. The combination of the above factors has generated substantial growth in EBITDA since 2002. EBITDA is an important financial measurement because the Company understands that such information is considered by certain investors to be a basis for measuring the Company's ability to generate favorable cash flow, pay interest, make capital expenditures and reduce debt.

Summary of Critical 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. Significant estimates include but are not limited to customer allowances and reserves for obsolete inventories. Actual results could differ from those estimates.

Revenue Recognition
   Revenues from sales are recognized at the time goods are shipped. All shipments are FOB shipping point. Sales prices are fixed based upon sales orders. The Company has customer volume incentive programs that are recorded as a reduction to sales based upon written substantive agreements. In addition, the Company has recorded various customer allowance and credit programs as reductions of sales based upon historical experience rates. Shipping and handling costs are included in Selling, General and Administrative costs on the income statement.

Accounts Receivable
   The estimation of the Company's customer allowances reflects the Company's estimates of its customers' ability to satisfy their obligations. The Company considers the following factors when evaluating the collectibility of its accounts receivable: participation of its customer base in collective buying groups, historical payment trends of its customers, concentrations of risk, changes in economic conditions affecting the industry, and macro economic conditions on the whole.

   A portion of the Company's customer base participates in collective buying groups. These buying groups guarantee a certain amount of a participant's outstanding receivable in event of default, which enhances the probability of collection. The Company expects expansion of customers participating in buying groups during fiscal 2005.

Inventories
   The estimation of the Company's reserve for obsolete inventories is based on the forward coverage of inventories on hand at the end of an accounting period relative to trailing twelve months sales volumes. Changes in sales mix, production planning, and demand for the Company's products can materially impact the Company's estimate of obsolete inventories. Additionally, estimates concerning the valuation of inventories at lower of cost or market are impacted by the Company's judgments of sales forecasts, sales pricing, gross margin, and evolution of technological changes in the industry.

Goodwill
   Goodwill is recorded from the excess of purchase price over fair market value of net assets acquired for the Company's various acquisitions. The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangibles" during 2002 and no longer amortizes goodwill. Management conducts an annual review of the estimated fair market value of its business segment, using discounted cash flow techniques. Based upon management's most recent review, no goodwill impairment was recorded for the year ended November 30, 2004.

Intangible Assets
   In accordance with SFAS 142, intangible assets considered to have finite useful lives continue to be charged to expense through amortization as follows:

Accrued Liabilities
   A portion of accrued compensation and benefits is based on estimates of uninsured risks relating to health and workers' compensation claims of the Company's employees. The Company uses information accumulated from a third party consultant that reviews claims incurred but not reported to estimate potential exposure relating to uninsured risks. Actual reported claims may materially differ from those estimates.

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

Derivative Instruments
   On January 1, 2001, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended, which requires that all derivative instruments be recognized in the financial statements at fair value.

   The Company uses derivative financial instruments to manage its exposure to movements in interest rates. The use of these financial instruments modifies the exposure of these risks with the intent to reduce the risk to the Company. The Company does not use financial instruments for trading or other speculative purposes, nor does it use leveraged financial instruments.

   All derivatives are recorded at fair value on the balance sheet. Effective changes in fair value of derivatives designated as cash flow hedges are recorded as an unrealized gain or loss on derivative hedged instruments net of tax, a separate component of other comprehensive income (loss). Amounts are reclassified from accumulated other comprehensive income (loss) and recognized into income when the Company recognizes expense on the related debt instruments. All ineffective changes in fair value are recorded currently in earnings in expense.

   The Company discontinues hedge accounting prospectively when (1) it determines that the derivative instrument is no longer effective in offsetting changes in the fair value or cash flows of the underlying exposure being hedged; (2) the derivative instrument expires or is sold, terminated or exercised; or (3) the Company determines that designating the derivative instrument as a hedge is no longer appropriate.

Results of Operations 
   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, interest rates, levels of construction and remodeling activities, the ability to improve manufacturing and operating 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.

Fiscal 2004 Compared to Fiscal 2003. For the fiscal year ended November 30, 2004, net sales increased $41,399,000 (or 20.6%) to $241,965,000 compared to $200,566,000 for the like period in 2003. Approximately 25% of the consolidated sales growth during the period resulted from new product introductions. The remaining 75% resulted from general volume increases including those associated with new channels of distribution and selling price increases described below.

   Gross profit expressed as a percentage of net sales decreased to 50.0% in fiscal 2004, compared to 50.2% in fiscal 2003 due primarily to unfavorable purchase price variances on commodity raw materials of approximately $2,108,000 and was partially offset by positive leverage on labor and overhead from increased sales volumes. The Company implemented a selling price increase for most of its product lines effective May 1, 2004 to offset rising material costs, resulting in approximately $2,756,000 in additional revenue. However, since the Company continues to experience increased prices for its raw materials, and in particular steel and aluminum, it has implemented a price increase of approximately 7% across all major brands effective December 1, 2004.

   Selling, general and administrative expenses increased $9,442,000 to $70,473,000 (29.1% of sales) in fiscal 2004 compared to $61,031,000 (30.4% of sales) in fiscal 2003. Approximately 47% of this increase was due to increased commission and freight expenses relating to the increased sales volume. Approximately 12% was due to increased sales promotion expenses and approximately 12% was due to the provision for fiscal 2004 management incentive program. The remainder of the increase is attributed to increases in other expenses.

   As a result of the above factors, operating income increased to 20.8% of sales in fiscal 2004 compared to 19.7% in fiscal 2003.

   Total other expense was $ 24,772,000 for the fiscal year ended November 30, 2004 compared to $14,978,000 for the like period in 2003. This increase was principally due to the debt refinancing which caused the Company to expense unamortized deferred financing fees of $3,246,000 related to the 11-7/8% Senior Subordinated Notes, unamortized deferred financing fees of $719,000 related to the Senior Credit Facility and a $7,422,000 call premium related to the retirement of the Notes. Interest expense was $14,861,000 for the fiscal year ended November 30, 2004 compared to $15,605,000 for the like period in 2003. Terms of the Credit Agreement reflect substantially lower overall interest rates based on certain variable indices and the Company anticipates these terms will materially reduce interest expense in future periods.

   The effective income tax rate for fiscal 2004 was 37% compared to 31.2% for fiscal 2003. This increase in the effective rate was due to the recognition of a one-time tax benefit of $1,300,000 in 2003 as a result of the closing of certain tax years.

Fiscal 2003 Compared to Fiscal 2002. For the fiscal year ended November 30, 2003, net sales increased approximately $18,796,000 or 10.3% to $200,566,000 from $181,770,000 for the like period in 2002. Approximately 40% of the consolidated sales increase was due to new product introductions, approximately 35% was from Alfa Lighting, which was acquired by Juno in October 2002, with the remainder due primarily to volume increases (including new channels of distribution). This increase was net of sales decreases totaling $5,070,000, of which, approximately 50% was from the Indy Lighting division and 50% was from price competition in commercial markets. Sales through Juno's Canadian subsidiary (which includes the Acculite division acquired in August 2001) increased 10.9% to $17,881,000 for the fiscal year ended November 30, 2003 compared to $16,122,000 for the like period in 2002.

   Gross profit expressed as a percentage of sales increased to 50.2% in fiscal 2003 compared to 49.9% in fiscal 2002 due primarily to margin contribution from Alfa Lighting.

   Selling, general and administrative expenses increased $7,271,000 to $61,031,000 (30.4% of sales) in fiscal 2003 compared to $53,760,000 (29.6% of sales) in fiscal 2002. Of this increase, approximately 30% was due to expenses from the Alfa division, which was acquired in October 2002, approximately 20% was due to the provision for the fiscal 2003 management incentive program, approximately 10% was attributed to sales and administrative salaries, approximately 10% was attributed to expenses associated with developing new channels of distribution, and approximately 10% was attributed to product development expenses with the remainder due primarily to variable expenses.

   In addition, operating expenses for fiscal 2002 included $3,050,000 of one-time expenses incurred in connection with a proposed major acquisition that was not consummated.

   Interest expense was $15,605,000 for fiscal 2003 compared to $16,907,000 for 2002. This decrease is due to the reduction in debt from $166,357,000 at November 30, 2002 to $153,353,000 at November 30, 2003, reductions in interest rates on the Company's floating rate debt and the net effect of interest rate swaps.

   The effective income tax rate for fiscal 2003 was 31.2% compared to 38.4% for fiscal 2002. This decline was primarily due to the recognition of a one-time tax benefit of $1,300,000 in the third quarter of 2003 as a result of the closing of certain tax years and to a lesser extent effective state tax planning initiatives.

Inflation  While management believes it has generally been successful in controlling the prices it pays for materials and passing on increased costs by increasing its prices, no assurances can be given as to the Company's future success in limiting material price increases or that it will be able to fully reflect any material price increases in the prices it charges its customers or fully offset such price increases through improved efficiencies.

Liquidity and Capital Resources

Fiscal 2004 The Company generated positive net cash flow from operating activities of $21,357,000 which includes the impact of payment of a $7,422,000 call premium related to the retirement of the Notes. Accounts receivable increased $3,575,000 (9.2%) due partly to strong year-end sales as well as to increased sales volume with customers (associated with large marketing groups) that are subject to extended payment terms. Inventory increased $5,104,000 (23.2%) in support of current and anticipated sales increases. Prepaid expenses and other current assets decreased $1,608,000 (29.8% ) due principally to the cancellation of the swap contract on the retired senior credit facility ("Senior Credit Facility") with Bank of America, N.A. and certain other lenders (which consisted of a $90,000,000 term facility and a $35,000,000 revolving credit facility) and scheduled amortization of costs, incurred in fiscal 2003, of promotional materials for new product introductions, which were pa rtially offset by increases in the value of the Company's current deferred tax assets. The decrease in intangibles of $2,421,000 (32.1%) was principally the result of a write-off of deferred financing costs of ($3,965,000) related to the retirement of the Senior Credit Facility and the Notes and amortization of ($978,000) which were partially offset by additional capitalized financing fees of $2,716,000 related to the debt refinancing. Accounts payable increased $4,830,000 (39.4%) due to overall increased inventory levels. Accrued liabilities decreased $2,230,000 (11.9%) principally due to reductions in accrued liabilities for interest expense resulting from the retirement of the Notes which was partially offset by increases in accruals for promotional programs and compensation.

   Net cash used in investing activities amounted to $5,805,000 comprised of capital expenditures of $2,702,000 for the twelve month period ended November 30, 2004 and the payment made under the terms of the Alfa Lighting purchase agreement of approximately $3,103,000.

   The net cash used by financing activities during the twelve months ended November 30, 2004 of $15,634,000 consisted primarily of proceeds from the Credit Agreement (described below) of $215,000,000 (proceeds from the First and Second Lien Loans constituting part of the Credit Agreement) net of the repayments to: settle borrowings under the Senior Credit Facility of $23,270,000 under the term facility and $5,700,000 under the revolving facility, retire the Notes, principal payments of $18,913,000 under the First Lien Loan and payment of $59,945,000 for the dividend payable to stockholders of record as of July 16, 2004 (the "Dividend"). On July 1, 2004, the $165,000,000 First Lien Loan was funded and, along with the remaining proceeds from the Second Lien Loan, these funds were used to retire the Notes and to pay the Dividend. The Dividend was declared by the Company's Board of Directors on July 1, 2004 to shareholders of record as of July 16, 2004 and was paid on July 26, 2004. The Company received approximately $3,480,000 from the issuance of 187,912 shares of common stock from stock options exercised under the Company's stock option plans and $331,000 from the issuance of 29,840 shares of common stock under the Company's employee stock purchase plan.

   The following represents the sources and (uses) of net cash flows from debt refinancing activities that occurred in May and July 2004:

   In October 2003 the board of directors authorized a share repurchase program whereby the Company could buy up to $7,500,000 of its outstanding common stock from time to time in the open market or in private transactions. The Company did not repurchase any of its common stock in 2004.

   The Company's liquidity needs are expected to arise primarily from operating activities, servicing indebtedness and the payment of cash dividends on its outstanding Preferred Stock. As of November 30, 2004, the Company had cash of approximately $2,362,000, current borrowings of $2,500,000 under the Revolving Credit Facility (described below), the current portion of long term debt of $1,650,000 and total long term debt of approximately $194,438,000. The Company's principal source of cash to fund its liquidity needs will be its available cash, net cash from operating activities and borrowings under the Revolving Credit Facility (described below). 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 at least 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, pay cash dividends or to make necessary capital expenditures.

Fiscal 2003 The Company generated positive net cash flow provided by operating activities of $18,548,000 comprised principally of net income, depreciation and amortization, deferred charges, decreases in inventories and increases in the allowance for doubtful accounts, other assets, accounts payable and accrued liabilities, (collectively aggregating $26,757,000), net of unrealized gain on interest rate swap, and increases in accounts receivable and prepaid expenses (collectively aggregating $8,209,000).

   Accounts receivable increased $6,646,000 or 20.6% due partly to strong year-end sales as well as to an increased number of customers (associated with large marketing groups) that are subject to extended payment terms. Prepaid expenses and miscellaneous increased $679,000 or 14.3% due primarily to the cost of promotional materials for new product introductions as well as the cost of product displays associated with new channels of distribution. Accounts payable increased $1,298,000 or 11.8% due primarily to the timing of year-end disbursements.

   Net cash used in investing activities amounted to $5,656,000 comprised of capital expenditures of $3,178,000 for fiscal 2003 and the payments made under the terms of the Alfa Lighting and Acculite purchase agreements of approximately $2,138,000 and $340,000 respectively.

   The net cash used in financing activities of $12,411,000 consisted primarily of principal payments on the term debt under the senior credit facility (the Senior Credit Facility") of $84,630,000 less proceeds from its revolving credit facility (the "Revolving Credit Facility") of $71,550,000.

Fiscal 2002  The Company generated positive net cash flow provided by operating activities of $19,467,000 comprised principally of net income, depreciation and amortization, deferred charges, decreases in inventories and other assets, and an increase in accounts payable, (collectively aggregating $21,927,000), net of a decrease to the allowance for doubtful accounts and accrued liabilities, unrealized gain on interest rate swap and increases in accounts receivable and prepaid expenses, (collectively aggregating $2,460,000).

   Net cash used in investing activities amounted to $9,372,000 and was used to finance capital expenditures of $2,494,000. In addition, on October 15, 2002 the Company purchased the stock of Alfa Lighting, Inc., manufacturers and marketers of low voltage lighting systems for $7,200,000 in cash. The acquisition was financed using the Company's Revolving Credit Facility under the Company's existing Senior Credit Facility with Bank of America, N.A., Credit Suisse First Boston and certain other lenders. As a result of this acquisition, the Company recorded additional working capital of $2,428,000 and goodwill of $4,450,000. Information regarding the first resultant payment under the purchase agreement can be found in the above Fiscal 2003 Financial Condition section.

   The net cash used in financing activities of $10,154,000 consisted primarily of principal payments on the term debt under the Senior Credit Facility of $67,815,000 less proceeds from its Revolving Credit Facility of $57,300,000.

Financing Arrangements and Dividends on Preferred Stock
   On May 21, 2004, the Company entered into a credit agreement (the "Credit Agreement") with Wachovia Bank, N.A. and certain other lenders providing a $245,000,000 term facility consisting of a $30,000,000 revolving credit facility (the "Revolving Credit Facility"), a $165,000,000 First Lien term loan ("First Lien Loan") and a $50,000,000 Second Lien term loan ("Second Lien Loan"). Borrowings under the Credit Agreement 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 the greater of (a) the Prime Rate, and (b) the daily weighted average of the Federal Funds Rate plus .5%, plus variable applicable percentages as defined in the Credit Agreement. At November 30, 2004, the interest rates for the First Lien Loan and Second Lien Loan were 4.63% and 7.65%, respectively. Interest on First Lien Loan and Second Lien Loan is payable in separate q uarterly installments through maturity of November 2010 and May 2011, respectively. As of November 30, 2004, there were $146,088,000 of outstanding borrowings under the First Lien Loan, $50,000,000 of outstanding borrowing under the Second Lien Loan, $2,500,000 of outstanding borrowings under the Revolving Credit Facility and $2,109,000 of outstanding letters of credit. The maximum available credit under the Revolving Credit Facility was $25,391,000 as of November 30, 2004.

   The Credit Agreement is collateralized by substantially all of the assets of the Company and its domestic subsidiaries. Prepayments of borrowings outstanding under the Second Lien Loan may not be made until all borrowings outstanding under the Revolving Credit Facility and the First Lien Loan have been repaid in full. The Credit Agreement requires the Company to maintain certain financial covenants, such as a maximum leverage ratio, a minimum fixed charge coverage ratio, and a limitation on capital expenditures. It also contains covenants which, among other things, generally restricts new indebtedness and the payment of dividends (exclusive of the Dividend discussed above).

   As of November 30, 2004, 1,060,000 shares of the Company's Series A preferred stock and 3,500 shares of the Company's Series B preferred stock were outstanding. The Company's amended and restated certificate of incorporation (the "Amended Certificate of Incorporation") provides a stated amount (or liquidation preference) of $109.93 per share for the Series A preferred stock and $99.57 per share for the Series B preferred stock. Shares of the Preferred Stock are convertible into shares of the Company's common stock at a conversion price of $19.42 per share of common stock to be issued. Accrued but unpaid cash dividends on Preferred Stock are convertible into shares of the Company's common stock at a conversion price of $26.25 per share of common stock to be issued. Accrued but unpaid cash dividends can not be converted until expiration of the deferred dividend due date described below.

   Under the terms of the Amended Certificate of Incorporation shares of Preferred Stock are entitled to quarterly cash dividends. The Amended Certificate of Incorporation provides cash dividend rates of 2.75% of the stated amount of the Preferred Stock for dates on or before November 30, 2005, 3% of the stated amount of the Preferred Stock for dates occurring after November 30, 2005 and on or before the date of a refinancing (as defined in the Amended Certificate of Incorporation) and 2.75% (3% in the event payment of such dividends are deferred) of the stated amount of the Preferred Stock for dates occurring after November 30, 2005 and after a refinancing.   The table below illustrates the quarterly per share dollar amount of the Preferred Stock cash dividend.

Contractual Obligations and Commitments
   In 2001, the Company purchased the rights to develop an innovative fluorescent lighting system which is being marketed under the Modulight brand name for $3,220,000 under a license agreement. To maintain exclusivity under this license agreement, the Company is required to make minimum quarterly royalty payments through December 31, 2020. Upon six months prior written notice to the licensor, the Company may convert its exclusive license to a non-exclusive license, with the conversion taking effect after completion of two full calendar quarters following receipt by licensor of notice. Thereafter, the Company's quarterly royalty payment shall be the greater of 5% of quarterly product revenues or $50,000.

   The Company also has noncancelable operating leases for distribution warehouse space and equipment.

   The following table summarizes the timing of principal payments on outstanding borrowings and contractual license and lease obligations:

Other Matters

Recently Issued Accounting Standards

   In March of 2004, the Emerging Issues Task Force ("EITF") reached a consensus on EITF Issue 03-6 "Participating Securities and the Two Class Method under FASB Statement No. 128." The guidance in this EITF issue is effective for quarters ending after June 30, 2004. The issue requires companies with convertible securities to calculate basic earnings per share under a "two class" method. Under this method, the Company must calculate the pro-forma distribution of all earnings in the period to holders of basic and preferred securities. If the basic EPS under this method is less than the basic EPS calculated under the method originally proscribed in SFAS 128 "Earnings per Share," this lower figure must be recorded as the basic EPS. The consensuses in EITF Issue 03-6 must be applied by restating previously reported EPS. The financial statements for fiscal years ending November 30, 2003 and 2002 have been restated as necessary for the application of the consensus in EITF 03-6. This resulted in a reduction of basic and diluted EPS for the twelve month period ended November 30, 2003 of $0.02 per share and no adjustment for the twelve month period ended November 30, 2002. The EPS presented for the fiscal year ended November 30, 2004 also reflects the adoption of the consensus.

   In November 2004, Statement of Financial Accounting Standards ("SFAS") No. 151, "Inventory Costs-An Amendment of ARB No. 43, Chapter 4", was issued which amends the guidance in Accounting Research Bulletin ("ARB") No. 43, Chapter 4, "Inventory Pricing," to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material. Among other provisions, the new rule requires that items such as idle facility expense, excessive spoilage, double freight, and rehandling costs be recognized as current-period charges regardless of whether they meet the criterion of "so abnormal" as stated in ARB No. 43. Additionally, SFAS 151 requires the allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. SFAS 151 is effective for fiscal years beginning after June 15, 2005. The Company is currently evaluating the effect that the adoption of SFAS 151 will have on its consolidated results of operations and financial condition but does not expect SFAS 151 to have a material impact.

   In December 2004, Statement of Financial Accounting Standards ("SFAS") No. 153, "Exchanges of Nonmonetary Assets", was issued which amends Accounting Principles Board Opinion ("APB") No. 29. SFAS 153 eliminates the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. SFAS 153 specifies that a nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS 153 is effective for the fiscal periods beginning after June 15, 2005, with earlier application permitted. The Company is evaluating SFAS No. 153, and does not believe it will have a material impact on its 2005 consolidated financial statements.

   In December 2004, Statement of Financial Accounting Standards ("SFAS") No. 123R, "Share-based Payment" was issued and replaces Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" and supersedes Accounting Principles Board Opinion ("APB") No. 25, "Accounting for Stock Issued to Employees." SFAS 123R requires the measurement of all employee share-based payments, including grants of employee stock options, using a fair-value-based method. Deferred compensation calculated under the fair value method would then be amortized into income over the respective vesting period of the stock option. The accounting provisions of SFAS 123R are effective for reporting periods beginning after June 15, 2005.

   The pro forma disclosures previously permitted under SFAS 123 no longer will be an alternative to financial statement recognition of share-based compensation. Although the Company has not yet determined whether the adoption of SFAS 123R will result in amounts that are similar to the current pro forma disclosures under SFAS 123, the Company is evaluating the requirements under SFAS 123R, acceptable methods of determining fair-value, and magnitude of the impact on its 2005 consolidated net income and earnings per share.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

   The Company is exposed to market risks arising from changes in interest rates.    The Company entered into two pay-fixed interest rate swaps during August 2004 designated as cash flow hedges with an outstanding notional principal amount of $107 million as of November 30, 2004 expiring November 2006. These swaps serve as a means to mitigate the risk of rising interest rates in future periods by converting certain portions of the Company's First Lien Loan and Second Lien Loan into fixed rate debt.

To the Board of Directors And
Stockholders of Juno Lighting, Inc.

   In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, stockholders' deficit, and cash flows present fairly, in all material respects, the financial position of Juno Lighting, Inc. and Subsidiaries at November 30, 2004 and 2003, and the results of their operations and their cash flows for each of the three years in the period ended November 30, 2004 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial sta tements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.



PricewaterhouseCoopers LLP
Chicago, Illinois
February 16, 2005

See notes to consolidated financial statements.

Return to Index

See notes to consolidated financial statements.

(in thousands)
Years ended November 30, 2002, 2003 and 2004
	Common Stock, $.001 PAR											Accumulated Other					Stockholder
					Amount		Paid-In Capital					Comprehensive					Note					Accumulated				Total
		Shares										Income (Loss)					Receivable					Deficit
Balance, November 30, 2001		2,500,389		$	2	$		674			$		(1,043	)			$(200		)			$(216,583		)		$(217,150		)
Comprehensive income:
Net income					-			-					-				-					11,767				11,767
Gain on foreign currency translation					-			-					271				-					-				271
Comprehensive income					-			-					-				-					-				12,038
Purchase of common stock		29,145			-			361					-				-					-				361
Preferred stockholder participation rights					-			-					-				-					(10,683		)		(10,683		)
Balance, November 30, 2002		2,529,534			2			1,035					(772	)			(200		)			(215,499		)		(215,434		)
Comprehensive income:
Net income					-			-					-				-					16,931				16,931
Gain on foreign currency translation					-			-					2,084				-					-				2,084
Comprehensive income					-			-					-				-					-				19,015
Purchase of common stock and exercise of
stock options		53,405			1			691					-				-					-				692
Preferred stockholder participation rights					-			-					-				-					(11,564		)		(11,564		)
Balance, November 30, 2003		2,582,939			3			1,726					1,312					(200	)				(210,132	)			(207,291	)
Comprehensive income:
Net income					-			-														16,169				16,169
Loss on foreign currency translation					-			-					(860	)												(860		)
Unrealized gain on derivative hedged instruments,       net of tax					-			-					108													108
Comprehensive income																										15,417
Purchase of common stock through
Employee Stock Purchase Plan		29,840			-			331					-				-					-				331
Exercise of stock options		187,912			-			3,480					-				-					-				3,480
Tax benefit of stock options exercised					-			457					-				-					-				457
Compensation expense associated with stock options					-			8					-				-					-				8
Cash dividend paid ($6.83 per common share)					-			(4,697	)				-				-					(14,142		)		(18,839		)
Preferred stockholder participation rights					-			-					-				-					(12,563		)		(12,563		)
Balance, November 30, 2004		2,800,691		$	3	$		1,305			$		560				$(200		)			$(220,668		)		$(219,000		)