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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A NO. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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DATE OF REPORT: SEPTEMBER 18, 1997
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ACORN PRODUCTS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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Delaware 0-22717 22-3265462
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(STATE OR OTHER (COMMISSION FILE NO.) (IRS EMPLOYER
JURISDICTION OF IDENTIFICATION NUMBER)
INCORPORATION OR
ORGANIZATION)
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500 Dublin Avenue
Columbus, Ohio 43215
(614) 222-4400
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER
INCLUDING AREA CODE OF REGISTRANT'S
PRINCIPAL EXECUTIVE OFFICES)
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Not Applicable
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 5. OTHER EVENTS.
In connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, Acorn Products, Inc. (the "Company") hereby is
filing a cautionary statement identifying important factors that could cause the
Company's actual results to differ materially from those projected in forward
looking statements of the Company made by or on behalf of the Company.
ITEM 7. EXHIBITS.
(c) EXHIBITS.
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EXHIBIT NO. DESCRIPTION
<S> <C>
99 Cautionary Statement for Purposes of the "Safe Harbor"
Provisions of the Private Securities Litigation Reform Act
of 1995.
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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 hereunto duly authorized.
ACORN PRODUCTS, INC.
Date: October 29, 1998 By: /s/ J. Mitchell Dolloff
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J. Mitchell Dolloff, Vice President and
General Counsel
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EXHIBIT INDEX
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EXHIBIT NO. DESCRIPTION
<S> <C>
99 Cautionary Statement for Purposes of the "Safe Harbor"
Provisions of the Private Securities Litigation Reform Act
of 1995.
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EXHIBIT 99
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
In connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"), Acorn Products, Inc. (the
"Company") hereby is filing cautionary statements identifying important factors
that could cause the Company's actual results to differ materially from those
projected in forward-looking statements, whether oral or written, made by or on
behalf of the Company. The Company wishes to ensure that all forward-looking
statements made by or on behalf of the Company are accompanied by meaningful
cautionary statements in order to maximize to the fullest extent possible the
protections of the safe harbor established by the Reform Act. Accordingly, any
such statements are qualified in their entirety by reference to, and are
accompanied by, the following important factors, among others, that could cause
the Company's actual results to differ materially from those projected in
forward-looking statements of the Company made by or on behalf of the Company.
Statements that indicate the Company's or management's intentions, hopes,
beliefs, expectations or predictions of the future are forward-looking
statements. It is important to note that the Company's actual results could
differ materially from those projected in such forward-looking statements due
to, among other risks and uncertainties inherent in the Company's business, the
following important factors:
- Weather is the most significant factor in determining market demand
for the Company's products and is inherently unpredictable. Inclement
weather during the spring gardening season and lack of snow during the
winter may have a material adverse effect on the Company's business,
financial condition and results of operations.
- The lawn and garden industry is seasonal in nature, with a high
proportion of sales and operating income generated in January through
May. Accordingly, the Company's sales tend to be greater during its
third and fourth fiscal quarters. As a result, the Company's
operating results depend significantly on the spring selling season.
To support this sales peak, the Company must anticipate demand and
build inventories of finished goods throughout the fall and winter.
Accordingly, the Company's levels of raw materials and finished goods
inventories tend to be at their highest, relative to sales, during the
Company's first and second fiscal quarters. These factors increase
variations in the Company's quarterly results of operations and
potentially expose the Company to greater adverse effects of changes
in economic and industry trends. Moreover, actual demand for the
Company's products may vary substantially from the anticipated demand,
leaving the Company with either excess inventory or insufficient
inventory to satisfy customer orders.
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- The Company's five largest customers in the aggregate accounted for
approximately 38.4% of gross sales in fiscal 1998. A substantial
reduction or cessation of sales to these or other major customers
could have a material adverse effect on the Company's business,
financial condition and results of operations.
- Certain retail distribution channels in the lawn and garden industry,
such as mass merchants and home centers, are experiencing
consolidation. There can be no assurance that such consolidation will
not have an adverse impact on certain of the Company's customers or
result in a substantial reduction or cessation of purchases of the
Company's products by certain customers. In addition, the Company is
facing increasing pressures from retailers with respect to pricing,
co-operative advertising and other rebates as the market power of
large retailers continues to grow. There can be no assurance that
such pressures will not have an adverse impact on the Company's
business, financial condition and results of operations.
- A key element of the Company's growth strategy is to increase sales in
certain distribution channels that the Company believes are growing
more rapidly than the overall industry, such as home centers and mass
merchants through retailers such as Home Depot and Sears. There can
be no assurance that retailers in such distribution channels will
continue to open a significant number of new stores or, if opened,
that the Company will be chosen to supply its products to all or a
significant portion of such stores. In addition, there can be no
assurance that such stores will generate significant additional sales
for the Company or that such stores will not result in a reduction of
sales to the Company's other customers, whether through consolidation
or otherwise.
- The recent growth and development of the Company largely has been
dependent upon the services of Gabe Mihaly, President and Chief
Executive Officer of the Company, as well as the other executive
officers of the Company. The loss of Mr. Mihaly's services, or the
services of one or more of the other executive officers of the
Company, could have a material adverse effect on the Company.
- A key element of the Company's strategy is the acquisition of
businesses and assets in the lawn and garden industry. There can be
no assurance, however, that the Company will be able to identify
attractive acquisition opportunities, obtain sufficient financing for
acquisitions on satisfactory terms or successfully acquire identified
targets. In addition, there can be no assurance that the Company will
be successful in integrating acquired businesses into its existing
operations or that such integration will not result in unforeseen
operational difficulties or require a disproportionate amount of
management's attention. Such acquisitions may result in the
incurrence of additional indebtedness by the Company or the issuance
of preferred stock or additional Common Stock by the Company.
Furthermore, there can be no assurance that competition for
acquisition opportunities in the industry will
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not escalate, thereby increasing the cost to the Company of making
acquisitions or causing the Company to refrain from making further
acquisitions.
- The Company's products require the supply of raw materials consisting
primarily of steel, plastics and ash wood. In addition, brass,
zinc and aluminum are the primary raw materials used in the
production of the Company's watering products. The Company has several
suppliers for most of its raw materials. There can be no assurance,
however, that the Company will not experience shortages of raw
materials or components essential to its production processes or be
forced to seek alternative sources of supply. In addition, there can
be no assurance that prices for such materials will remain stable.
Any shortages of raw materials may result in production delays and
increased costs which could have a material adverse effect on the
Company's business, financial condition and results of operations.
- All aspects of the lawn and garden industry, including attracting and
retaining customers and pricing, are highly competitive. The Company
competes for customers with large consumer product manufacturers and
numerous other companies that produce specialty home and garden
products, as well as with foreign manufacturers that export their
products to the U.S. Many of these competitors are larger and have
significantly greater financial resources than the Company. There can
be no assurance that increased competition in the lawn and garden
industry, whether from existing competitors, new domestic
manufacturers or additional foreign manufacturers entering the U.S.
market, will not have a material adverse effect on the Company's
business, financial condition and results of operations.
- Most of the Company's hourly employees are covered by collective
bargaining or similar labor agreements. The Company currently is a
party to four such agreements, one of which expires in 2001 and three
of which expire in 1999. There can be no assurance that the Company
will be successful in negotiating new labor contracts on terms
satisfactory to the Company or without work stoppages or strikes. A
prolonged work stoppage or strike at any of the Company's facilities
could have a material adverse effect on the Company's business,
financial condition and results of operations.
- The Company is subject to various federal, state, and local
environmental laws, ordinances and regulations governing, among other
things, emissions to air, discharge to waters and the generation,
handling, storage, transportation, treatment and disposal of hazardous
substances and wastes. The Company has made, and will continue to
make, expenditures to comply with these environmental requirements and
regularly reviews its procedures and policies for compliance with
environmental laws. The Company also has been involved in remediation
actions with respect to certain of its facilities. Amounts expended
by the Company in such compliance and remediation activities have not
been material to the Company. However, current conditions and future
events, such as changes in existing laws and regulations, may
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give rise to additional compliance or remediation costs that could
have a material adverse effect on the Company's business, financial
condition or results of operations. Furthermore, as is the case with
manufacturers in general, if a release of hazardous substances occurs
on or from the Company's properties or any associated offsite disposal
location, or if contamination from prior activities is discovered at
any of the Company's properties, the Company may be held liable and
the amount of such liability could be material.
- New housing starts often represent an addition to the overall number
of consumers in the lawn and garden tool market and, accordingly, an
increase in demand. Similarly, government spending on highways,
bridges and other construction projects often represents an increase
in demand for long handled tools. A decline in housing starts or
government spending on construction projects could result in a
decrease in demand for the Company's products and, accordingly, could
have a material adverse effect on the Company's business, financial
condition and results of operations.
- Adverse changes in general economic conditions in the United States,
including the level and availability of consumer debt, the level of
interest rates and consumer sentiment regarding the economy in
general, could result in a decrease in demand for the Company's
products and, accordingly, could have a material adverse effect on the
Company's business, financial condition and results of operations.
The factors set forth above are not exhaustive. Further, any
forward-looking statement speaks only as of the date on which such statement is
made, and the Company will not undertake, and specifically declines, any
obligation to publicly release the results of any revisions which may be made to
any forward-looking statement to reflect events or circumstances after the date
on which such statement is made or to reflect the occurrence of anticipated or
unanticipated events. New factors emerge from time to time and it is not
possible for management to predict all of such factors, nor can it assess the
impact of each such factor on the business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements. Therefore, forward-looking
statements should not be relied upon as a prediction of actual future results.
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