<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington DC 20549
FORM 10-KSB
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended August 31, 1995 Commission File Number 0-2331
------------------- --------
GLASSMASTER COMPANY
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
South Carolina 57-0283724
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(State of incorporation) (IRS Employer ID No.)
PO Box 788, Lexington SC 29071
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: 803-359-2594
--------------------------------
Securities registered pursuant to Section 12 (b) of the Exchange Act: None
-----------
Securities registered pursuant to Section 12 (g) of the Exchange Act:
COMMON STOCK, PAR VALUE $.03 PER SHARE
--------------------------------------
(Title of Class)
Indicate by an "X" whether the issuer (1) has filed all reports required to be
filed by Section 13 or 15 (d) of the Securities Exchange Act during the
preceding 12 months, and (2) has been subject to such filing requirements for
the past 90 days. YES X NO
--- ---
Indicate by an "X" if disclosure of delinquent filers in response to Item 405
of regulation S-B is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. X
---
State issuer's revenues for its most recent fiscal year. $24,087,607 .
---------------
The aggregate market value of the voting stock held by non-affiliates of the
registrant was approximately $1,577,119 as of October 31, 1995, based on the
average bid and asked price of $2.44 per share.
The number of shares outstanding of the registrant's common stock, as of
October 31, 1995 was 1,601,029 shares.
DOCUMENTS INCORPORATED BY REFERENCE
The information set forth under items 9, 10, 11, and 12 of Part III of this
report is incorporated by reference from the issuer's definitive proxy
statement for the 1996 annual meeting of stockholders that will be filed no
later than December 30, 1995.
<PAGE> 2
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PART I
Item 1. Business
(a) General Development of Business
The Company was founded in 1946 as the Koolvent Metal Awning
Company and incorporated under the laws of the State of South Carolina. During
1958 the Glassmaster line of fiberglass pleasure boats was introduced. In 1959
the metal awning division was sold to concentrate efforts on the pleasure boat
business, the corporate name was changed to Glassmaster Plastics Company, and
the Company became a publicly held corporation and presently has approximately
1,300 stockholders.
In 1982, the corporate name was changed to Glassmaster Company
(the "Company") and, as a result of the cyclical nature of the pleasure boat
business, the Company began to diversify into industrial related manufacturing.
During 1982 and 1983 the Company developed from within manufacturing facilities
to produce extruded monofilament and fiberglass antennas. The ensuing five
years saw these operations experience steady growth and by the end of the 1988
fiscal year were the dominant business segment of the Company.
On September 1, 1988, the Company purchased the NYBRAD product
line and related manufacturing assets from Allied-Signal, Inc. NYBRAD is a
brush material of abrasive monofilament used in surface finishing and
deburring. On November 1, 1988, the Company announced the purchase of the
industrial control product line and related manufacturing assets from
Speareflex Corporation of Kalamazoo, Michigan. This business consists
primarily of flexible steel wire controls and plastic control panels for use in
industrial and automotive applications. The acquisition of these two product
lines has allowed the Company to further diversify and expand its line of
industrial related products.
Construction was completed during the third quarter of the 1989
fiscal year on a 35,000 square foot manufacturing facility to produce
monofilament line. In addition to adding production capacity, the new plant
contains research facilities to enhance ongoing development work and state of
the art engineering and process control.
On November 17, 1989, the Company announced its decision to
discontinue the manufacture and sale of fiberglass boats.
In June, 1994, the Company completed the purchase of a 95,000
square-foot manufacturing plant in Kalamazoo, Michigan, and relocated its
wholly-owned subsidiary, Glassmaster Controls Co., Inc. from a leased facility
in Otsego, Michigan to the new plant during the first quarter of the 1995
fiscal year.
On August 16, 1994 a tornado completely destroyed a 25,000
square-foot warehouse in Lexington, SC. During the 1995 fiscal year,
construction was completed on a 35,000 square-foot addition to the Monofilament
plant in Lexington, SC. This addition effectively replaces the warehouse
destroyed by the tornado and gives the Monofilament Division additional
manufacturing space.
There have been no bankruptcy, receivership, or similar
proceedings to the registrant since its inception. During the last three years
there has been no material acquisition or disposition of any significant amount
of assets other than that described above or in the ordinary course of
business.
(b) Narrative Description of Business
The Company is a manufacturer of thermoplastic and thermoset
plastic materials that result in a variety of products and has, in previous
years, been organized into two basic business segments: Industrial Products
and Fiberglass Boats. As noted, the Company has discontinued the manufacture
and sale of Fiberglass Boats and as such, will no longer be considered a
reportable industry segment.
<PAGE> 3
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Item 1. Business (Cont'd)
The Company continues to operate the businesses previously
included in the Industrial Products segment and produce the following products:
extruded (thermoplastic) synthetic monofilament, pultruded (thermoset)
fiberglass products, and flexible steel wire controls.
The Company's Monofilament Division extrudes monofilaments from
nylon, polyester, polyolefins and other engineering resins for use in a wide
array of markets and applications including textiles (sewing thread), lawn and
garden care (trimmer line), recreational products (fish line), and industrial
weaving and industrial filtration. Monofilament, as produced by the Company,
begins with a thermoplastic resin which is processed through a melting device
(extruder) and subsequently oriented to form single strand fibers of various
diameters, tensile strengths and moduli. Specialized monofilaments for
industrial applications are manufactured for use in other major industries
including paper machine clothing for the paper industry, and with the
acquisition of the NYBRAD product line from Allied-Signal, Inc., abrasive
bristles for brushes used in metal and wood finishing. The Company markets its
monofilament products primarily on a private brand basis, which are sold by
company salesmen to original equipment manufacturers and distributors
throughout North America and, to a lesser degree, Europe, South America, and
the Pacific Rim.
The Company's Industrial Fiberglass Products Division manufactures
a line of fiberglass marine and CB antennas for use in pleasure craft and
commercial fishing vessels. This division also manufactures pultruded
fiberglass rod stock used in a number of specialty products. Antennas and
reinforced plastic products are sold through in-house salesmen and regional
manufacturers' sales representatives and distributed throughout the United
States and Canada.
The Company manufactures and assembles a wide range of flexible
steel wire controls and molded plastic control panels through its wholly-owned
subsidiary, Glassmaster Controls Co., Inc., located in Kalamazoo, Michigan.
These products are used primarily in medium and large capacity trucks and to a
lesser degree in automobiles, farm equipment and recreational boats, and are
sold through manufacturers' representatives or directly to original equipment
manufacturers by in-house sales efforts throughout North America.
The names "Glassmaster", "CompCore", and "NYBRAD" are registered
trademarks of the Company.
The Company believes it is a significant competitor in the United
States market for specialty monofilament products and marine CB antennas.
While firm price competition can be experienced within some lines of the
monofilament and flexible wire control products, overall, the Company produces
products which center on performance, engineering and customer service and it
is these product lines which provide the Company with a stable revenue base.
Sales and profitability growth are dependent to varying degrees upon favorable
economic conditions and penetration into the industrial textile and paper
machine clothing industries, as well as the domestic truck industry.
Unfavorable weather conditions can have an impact on monofilament trimmer line
sales.
Sales of the Company's industrial products are somewhat seasonal
with sales to the lawn and garden care and marine antenna markets concentrated
in the second and third quarters of the fiscal year (December - May). While
some fluctuations in inventory levels will occur from time to time, the Company
is not required to carry significant amounts of inventory to meet delivery
requirements or to carry unusually large amounts of materials and supplies to
insure itself of a continuous allotment of goods from suppliers. The Company
does not provide extended payment terms to its customers in excess of those
normally offered for these industries. The dependence upon any one customer or
small group of customers is not material. The Company currently offers no
product or service requiring government approval and the effect of existing or
probable government regulations on the operations of the Company is considered
to be immaterial.
At August 31, 1995, the order backlog was $2,124,686 compared to
$2,231,712 at August 31, 1994.
The Company has no full-time employees engaged in research and
development activities, however, certain employees spend a portion of their
time in new product development and process improvement. Expenditures for
research and development were approximately $357,000 in 1995 and $297,000 in
1994.
<PAGE> 4
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Item 1. Business (Cont'd)
No material effects have resulted from compliance with federal,
state, and local provisions regulating the discharge of materials into the
environment, or any other regulations protecting the environment. The Company
does not expect to make any material capital expenditures for environmental
control facilities for the current or succeeding fiscal year.
The Company and its subsidiary furnished employment for
approximately 223 persons at August 31, 1995 and 210 persons at August 31,
1994.
Item 2. Properties
General corporate offices and the monofilament manufacturing
facilities (Plant I) are located at the intersection of I-20 and South Carolina
Highway #6 in Lexington, South Carolina. The total facility is composed of
125,000 square feet, and is owned by the Company in fee simple. On August 16,
1994 a tornado inflicted structural damage to buildings at this location and
destroyed a 25,000 square foot warehouse. The Company made prompt repairs to
damaged buildings and has plans to replace the destroyed warehouse. See Note 8
of the Notes to Financial Statements.
The Company completed construction during the third quarter of the
1989 fiscal year on a 35,000 square foot facility (Plant II) to produce
monofilament line. This building also contains the Monofilament Division
offices and is located on the same property in Lexington, South Carolina and is
owned by the Company in fee simple. During the 1995 fiscal year an additional
35,000 square feet of manufacturing space was added to this facility.
The Company operates its industrial fiberglass manufacturing plant
on South Carolina Highway #121 in Newberry, South Carolina. The total facility
is composed of 31,000 square feet and is owned by the Company in fee simple.
Glassmaster Controls Co., Inc. operates its industrial controls
business at 831 Cobb Ave. in Kalamazoo, Michigan. The total facility is
composed of 95,000 square feet and is owned by the Company in fee simple.
The Company believes that facilities are adequate for the
immediate future, and that the machinery and equipment used in these facilities
are well maintained and in good operating condition. Estimated percentage
utilization capacities during the year ended August 31, 1995 were as follows:
Monofilament Plant - 95%; Industrial Fiberglass Plant - 50%; Controls Plant -
30%.
Item 3. Legal Proceedings
There are no material pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted during the fourth quarter of the
fiscal year covered by this report to a vote of security holders through the
solicitation of proxies or otherwise.
<PAGE> 5
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PART II
Item 5. Market for Registrants Common Equity and Related Stockholder Matters
(a)(1) The Company's common stock is traded on the national
over-the-counter market, with prices quoted on the National Association of
Securities Dealers Automated Quotation (NASDAQ) System under the symbol GLMA.
(a)(1)(ii) The table below sets forth the high and low bid prices per share
during each quarter in the last two years and prior to May 17, 1994, represent
inter-dealer prices as quoted on the Over-the-Counter Electronic Bulletin
Board, without retail mark-up, mark-down or commission and may not necessarily
represent actual transactions. Subsequent to May 17, 1994 the table reflects
high and low bid prices per share as quoted on the Small Cap Market of the
NASDAQ System.
<TABLE>
<CAPTION>
Quarter Ending High Low
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<S> <C> <C>
August 31, 1993 $1.50 $1.00
November 30, 1993 2.00 1.00
February 28, 1994 2.25 1.50
May 31, 1994 4.00 1.50
August 31, 1994 3.25 2.25
November 30, 1994 3.75 3.00
February 28, 1995 3.50 2.50
May 31, 1995 2.50 2.00
August 31, 1995 2.00 2.00
</TABLE>
(b) There were 1,308 shareholders of record at October 31, 1995.
(c)(1) On October 26, 1995, Directors of the Company declared a cash
dividend of $.03 per common share payable on or about January 30, 1996 to
stockholders of record on January 9, 1996. On January 30, 1995 the Company
paid a cash dividend of $.06 per common share. On January 30, 1994 the Company
paid a cash dividend of $.05 per share.
(c)(2) According to the terms of a financing agreement, the Company is
restricted from paying cash dividends unless approved by the lending
institution.
<PAGE> 6
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Item 6. Management's Discussion and Analysis
Review of Operations
Comparison of 1995 to 1994
Sales of the company on a consolidated basis totaled $24.1 million
for the fiscal year ended August 31, 1995, an increase of 6.7% when compared to
prior fiscal year sales of $22.6 million. Monofilament Division sales
increased 5.6% compared to last year despite having first quarter production
and shipments interrupted by the effects of the August, 1994 tornado damage.
Improved sales of polyester weaving filaments, polyethylene and polypropylene
products, and NYBRAD abrasive monofilament more than offset a 13% decline in
sales of bulk and packaged trimmer line. Price competition, inherent in the
trimmer line business, has become more intense during the last two years and,
combined with the seasonal nature of these products, has contributed to the
shift in the mix of products sold toward more technically oriented
monofilaments. Industrial Products Division sales decreased by 10% this year,
compared to the prior year as lower average selling prices on their standard
line of fiberglass marine antennas failed to stimulate sufficient additional
demand. New products were introduced and selling prices increased on existing
products late in the fiscal year to generate additional sales revenue.
Glassmaster Controls Company reported sales higher by 25% this year versus the
prior year period. Manufacturers of heavy trucks and farm equipment continue
to operate at high levels and require the company's cable controls and control
panels in their assembly operations. First and second quarter production and
sales were hindered during the relocation of their business from a leased
facility in Otsego, Michigan to a 95,000 square-foot manufacturing plant in
Kalamazoo, Michigan, that was purchased by the company in June, 1994. This
relocation effectively doubled the manufacturing floor space available and with
the addition of equipment and tooling during the year and the introduction of
new OEM customer specific products, sales during the third and fourth quarters
of the 1995 fiscal year were 30% higher than prior year amounts.
Gross profit margins decreased to 15.9% of sales this year
compared to last year's 21.8%. Profit margins at Monofilament were adversely
impacted by production inefficiencies resulting from the effects of the August,
1994 tornado and at Controls by the disruptions and additional costs caused by
the relocation of the business. At Industrial Products, gross profit margins
deteriorated when what appeared to be an improving sales trend during the last
half of the 1994 fiscal year did not continue and selling prices on antennas
were lowered early in the fiscal year in an attempt to stimulate unit sales.
In addition, higher raw material costs impacted margins along all product
lines, particularly at Monofilament during the third and fourth quarters.
Selling prices were increased later in the fourth quarter at Industrial
Products and Monofilament.
Selling expenses increased by 8.9% this year compared to last year
due primarily to higher costs of product delivery and increased commission
sales. Interest expense increased by $120,000 or 28% this year compared to
last year due to higher overall debt levels and an increase in average interest
rates. General and Administrative, Corporate, and Other expenses were
relatively unchanged in total from the prior year.
Income Before Taxes and Extraordinary Gain was $113,421 this year
compared with $1,409,423 last year. The Provision for Income Taxes totaled
$49,120 this year and was $495,475 last year. The company recognized an
Extraordinary Gain of $287,061 (net of related income taxes of $170,772) during
the 1995 fiscal year and represents the excess of insurance proceeds received
over the net book value of buildings and equipment destroyed by the tornado in
August, 1994. Net Income for the year was $351,362 and was $913,948 last year.
Comparison of 1994 to 1993
Consolidated sales for the fiscal year ending August 31, 1994 were
$22.6 million, an increase of 10.1% when compared to prior year sales of $20.5
million. All operating businesses of the company reported improved sales
compared to fiscal 1993 levels. Monofilament Division sales were up 6.7% over
last year, primarily due to increased shipments of nylon weed trimmer line,
fish line, and NYBRAD abrasive nylon monofilament. Unit volume sales of sewing
thread increased by more than 10%, notwithstanding a moderate increase in the
average selling price per pound within this product category. This division
has experienced continued success in marketing and selling monofilament
products overseas and reported a 40% increase in sales outside of North America
compared to 1993. Foreign sales now comprise approximately 15% of total sales
for this division and represents exports to approximately twenty different
countries.
<PAGE> 7
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Item 6. Management's Discussion and Analysis (Cont'd)
In response to consistent strength in customer order patterns and to meet
expected future demand resulting from new product development, this division
will expand productive capacity by approximately 15% during the next fiscal
year as new extrusion equipment becomes operational. Sales by the company's
Industrial Products Division increased by 17.6% due to improving demand for the
standard line of marine antennas as the recreational boating industry recovers
from a four-year recession. Specialty fiberglass product sales were also
higher compared to the prior year while CB antenna sales were relatively
unchanged.
Glassmaster Controls Company reported sales increased by 9.8%
compared to the year earlier due to continued strength in demand for control
cables and plastic control panels by its medium and heavy-duty truck
manufacturing customers. Successful design and development of cables and cable
assemblies used by automotive, farm equipment, and recreational marine OEM's
contributed to the increase. On June 9, 1994 the Company purchased 95,000
square feet of manufacturing and office space in Kalamazoo, Michigan and will
relocate the controls business during the first quarter of the 1995 fiscal year
from a much smaller leased facility in Otsego, Michigan. The long-term
prospects for continued growth of this business are excellent and this
relocation will give the Company facilities to meet expected demand.
On August 16, 1994 a tornado inflicted damage to our Lexington,
S.C. facilities (See Note 8 of the Notes to Financial Statements). The storm
destroyed a warehouse building and most of the raw material and supplies
inventory contained within and damaged the roof and utility infrastructure of
Monofilament Plant I, which contains monofilament extrusion equipment and the
Monofilament Division offices. Because the storm occurred so near the end of
the company's fiscal year, the disruption in the operations of the Company, (in
particular the Monofilament Division), had a relatively minor impact on
reported operating results for the period covered by this report. While full
operating capacity was restored within eight weeks of the storm, first quarter
results of fiscal year 1995 will be affected.
Gross profit margins increased from 20.4% of sales last year to
21.8% during the fiscal year ended August 31, 1994 primarily due to improved
manufacturing efficiencies realized as a result of higher unit volume
throughout. While gross margins will be affected in the first quarter of
fiscal year 1995 at both Monofilament (storm damage recovery) and Controls
(relocation of operations), profit margins of these businesses will benefit
long term from the previously mentioned expansion of manufacturing capacities.
Raw materials, wages, and employee benefit costs have remained relatively
stable during the last year, however, the company began to experience cost
increases during the fourth quarter of the fiscal year and anticipate the trend
to continue into 1995.
Selling expenses increased by $101,000 but were unchanged at 4.7%
of sales when compared to the prior year. General and Administrative,
Corporate, and Other Expense increased by $116,000 primarily due to increased
costs associated with employee benefit plans. Interest expense decreased by
$45,000 (9.6%) compared to last year as a result of lower overall average debt
levels.
Pre-tax income for the year was $1,409,423 compared to $848,277
last year, an increase of 66%. The Provision for Income Taxes increased to
35.5% of pre-tax Income ($495,475) from 23.4% last year primarily due to the
full utilization of federal net operating loss carryforwards in the prior year.
Earnings Per Share increased 38% to $.58 per share from $.42 per share last
year.
<PAGE> 8
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Item 6. Management's Discussion and Analysis (Cont'd)
Liquidity and Capital Resources
The working capital of the company was essentially unchanged at
August 31, 1995 when compared to the prior year end at approximately $1.3
million. Current year Net Income ($351,362) plus non-cash Depreciation and
Amortization ($759,836) and Deferred Income Taxes ($137,581) combined with Cash
Proceeds from Insurance ($478,866) provided the company with the majority of
the funds necessary to invest in additional plant and equipment ($2,129,966)
and pay a stockholder dividend of $.06 per share ($96,103). Of the total
investment in fixed assets approximately $540,000 was spent to add 35,000
square feet of manufacturing and warehousing space to replace buildings and
property destroyed in the August, 1994 tornado. A mortgage loan was funded for
the same amount to pay for the addition. Also included in the fixed asset
additions during the year was two monofilament extrusion lines (approximately
$900,000) and business relocation costs plus building improvements capitalized
at Controls ($451,441). Five-year term loans funded eighty percent of the
extrusion equipment and the city of Kalamazoo, through its Economic Opportunity
Fund, provided a $200,000 low-interest loan for five years to assist in the
payment of the relocation and building improvements required at Controls.
The net operating assets and liabilities of the company increased
by $1,383,851 primarily due to increases in Receivables ($658,617) and
Inventories ($767,290) (See Consolidated Statement of Cash Flows). This
increased working capital requirement was funded primarily by borrowings under
short-term revolving credit facilities secured by receivables and inventories.
In South Carolina, the financing agreement provides for a revolving line of
credit up to a maximum of $4.0 million, and in Michigan, Glassmaster Controls'
maximum credit line is $500,000. As of August 31, 1995, borrowings outstanding
under these credit lines were $2.3 million and $145,000, respectively.
The company currently has no plans to make any significant
additions to plant and equipment during the next fiscal year and anticipates
that its cash requirements during the year will be provided by operating
activities and from existing credit facilities.
Item 7. Financial Statements
Financial Statements of Glassmaster Company and the Notes to
Financial Statements for the fiscal years ended August 31, 1995 and 1994 appear
on pages 11 through 20, the Index to the Exhibits and Exhibits appear on pages
22 through 24, and the Report of Independent Auditors appears on pages 21 of
this report.
Item 8. Changes in Disagreements with Accountants on Accounting and Financial
Disclosure
There have been no changes in or disagreements with accountants on
accounting financial disclosures.
PART III
Items 9, 10, 11, and 12. Directors, Executive Officers, Promoters and Control
Persons; Compliance With Section 16 (a) of the Exchange Act; Executive
Compensation; Security Ownership of Certain Beneficial Owners and Management;
and Certain Relationships and Related Transactions.
Information for items 9-12 of this report appears in the Proxy
Statement for the 1996 Annual Meeting of Shareholders to be held on January 19,
1996 and is incorporated herein by reference.
<PAGE> 9
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PART IV
Item 13. Exhibits and Reports on Form 8-K
(a) Exhibits (numbered in accordance with Item 601 of Regulation S-B)
<TABLE>
<CAPTION>
Exhibit No. Exhibit
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<S> <C>
3.1 Amended and Restated Certificate of Incorporation of the Company, filed as
Exhibit 3.1 to Form 10-K for the year ended August 31, 1991 and incorporated
herein by reference.
3.2 Amended and Restated Bylaws of the Company, filed as exhibit 3.2 to Form 10-K
for the year ended August 31, 1991 and incorporated herein by reference.
10 Amended and restated Glassmaster Company 1992 Incentive Stock Option Plan,
filed as exhibit 10 to Form 10-KSB for the year ended August 31, 1993 and
incorporated herein by reference.
11 Statement re Computation of Per Share Earnings
21 Subsidiaries of the Registrant
27 Financial Data Schedule (for SEC use only).
</TABLE>
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the fourth quarter of the
fiscal year ended August 31, 1995.
<PAGE> 10
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Signatures
Pursuant to the requirements of Section 13 or 15(d) 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.
GLASSMASTER COMPANY
By Raymond M. Trewhella By Steven R. Menchinger
---------------------------------- ---------------------------------
Raymond M. Trewhella, President Steven R. Menchinger, Corporate
(Principal Executive Officer) Controller and Treasurer
(Principal Financial Officer)
(Principal Accounting Officer)
Date November 17, 1995 Date November 17, 1995
-------------------------------- --------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant, and in the capacities, and on the dates indicated.
By Stephen W. Trewhella By Raymond M. Trewhella
---------------------------------- ---------------------------------
Stephen W. Trewhella, Director Raymond M. Trewhella, Director
Date November 17, 1995 Date November 17, 1995
-------------------------------- -------------------------------
By H. D. Harrelson By Melvin L. Chavis
---------------------------------- ---------------------------------
H. D. Harrelson, Director Melvin L. Chavis, Director
Date November 17, 1995 Date November 17, 1995
-------------------------------- -------------------------------
By James F. Kane By John S. Hammond
---------------------------------- ---------------------------------
James F. Kane, Director John S. Hammond, Director
Date November 17, 1995 Date November 17, 1995
-------------------------------- -------------------------------
By John Taylor By Norman A. Cotner
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John Taylor, Director Norman A. Cotner, M.D.
Date November 17, 1995 Date November 17, 1995
-------------------------------- -------------------------------
<PAGE> 11
GLASSMASTER COMPANY
LEXINGTON, SC
FINANCIAL STATEMENTS
FISCAL YEARS ENDED AUGUST 31, 1995 AND 1994
<TABLE>
<CAPTION>
Page No.
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<S> <C>
Balance Sheet ................................. 12
Statement of Stockholders Equity .............. 13
Income Statement .............................. 14
Statement of Cash Flows ....................... 15
Notes to Financial Statements ................. 16 - 20
Independent Auditor's Report .................. 21
</TABLE>
<PAGE> 12
GLASSMASTER COMPANY
LEXINGTON SC
BALANCE SHEET
AUGUST 31, 1995 AND 1994
<TABLE>
<CAPTION>
AUGUST 31, 1995 August 31, 1994
------------------------- -------------------------
<S> <C> <C> <C> <C>
ASSETS
- ------
Cash $ 161,809 $ 90,702
Accounts Receivable - Trade $3,648,625 $3,013,929
Less: Allowance for Doubtful Accts 68,417 3,580,208 104,079 2,909,850
---------- ----------
Accounts Receivable - Other 21,689 33,430
Insurance Claims Receivable -0- 330,958
Inventories 2,749,741 1,982,451
Prepaid Expenses 48,462 7,977
Prepaid Income Taxes 68,108 -0-
Deferred Income Taxes 25,305 -0-
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Current Assets 6,655,322 5,355,368
- --------------
Fixed Assets (Net of Depreciation)
- ------------
Manufacturing Property 5,678,963 4,338,806
Other Assets 252,594 283,486
- ------------ ----------- ----------
TOTAL ASSETS $12,586,879 $9,977,660
- ------------ =========== ==========
LIABILITIES
- -----------
Accounts Payable 1,655,728 1,423,739
Accrued Expenses 250,356 438,527
Accrued Income Taxes -0- 224,127
Deferred Income Taxes -0- 27,548
Notes, Mortgages, & Debentures Payable - Current 3,453,165 1,938,072
----------- ----------
Current Liabilities 5,359,249 4,052,013
- -------------------
Other Liabilities
- -----------------
Notes and Mortgages Payable - Long Term 3,347,008 2,550,679
Deferred Income Taxes 452,964 3,799,972 262,530 2,813,209
----------- ----------- ---------- ----------
Total Liabilities 9,159,221 6,865,222
- -----------------
STOCKHOLDERS' EQUITY
- --------------------
Capital Stock (Authorized 5,000,000 Shares
$.03 Par - 1,601,737 (1995), 1,582,329 (1994)
Shares Issued and Outstanding) 48,052 47,470
Paid-In Capital 1,323,170 1,263,791
Donated Capital 124,210 124,210
Retained Earnings 1,932,226 3,427,658 1,676,967 3,112,438
--------- ----------- ---------- ----------
TOTAL LIABILITIES AND EQUITY $12,586,879 $9,977,660
- ---------------------------- =========== ==========
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
<PAGE> 13
GLASSMASTER COMPANY
LEXINGTON SC
STATEMENT OF STOCKHOLDERS EQUITY
FISCAL YEARS ENDED AUGUST 31, 1995 AND 1994
<TABLE>
<CAPTION>
August 31, 1995 August 31, 1994
--------------- ---------------
<S> <C> <C>
Capital Stock:
- --------------
Balance - September 1 $ 47,470 $ 47,028
Proceeds from Sale of Shares
Under Stock Option Plan 232 442
Conversion of Debentures 350 ---
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Balance - August 31 48,052 47,470
------------------- ---------- ----------
Additional Paid In Capital:
- ---------------------------
Balance - September 1 1,263,791 1,243,476
Proceeds from Sale of Shares
Under Stock Option Plan 13,029 20,315
Conversion of Debentures 46,350 ---
---------- ----------
Balance - August 31 1,323,170 1,263,791
------------------- ---------- ----------
Donated Capital: 124,210 124,210
- ---------------- ---------- ----------
Retained Earnings:
- ------------------
Balance - September 1 1,676,967 841,847
Net Income (Loss) 351,362 913,948
Common Stock Dividends Paid (96,103) (78,828)
---------- ----------
Balance - August 31 1,932,226 1,676,967
------------------- ---------- ----------
Total Stockholders Equity $3,427,658 $3,112,438
========== ==========
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
<PAGE> 14
GLASSMASTER COMPANY
LEXINGTON SC
INCOME STATEMENT
FISCAL YEARS ENDED AUGUST 31, 1995 AND 1994
<TABLE>
<CAPTION>
AUGUST 31, 1995 August 31, 1994
--------------- ---------------
<S> <C> <C>
Sales $24,087,606 $22,580,767
- -----
Cost of Sales 20,252,166 17,667,393
----------- -----------
Gross Profit on Sales 3,835,440 4,913,374
- --------------------- ----------- -----------
Selling Expense 1,163,139 1,067,718
General and Administrative Expense 1,039,416 867,711
Provision for Doubtful Accounts 52,149 19,804
Corporate Expenses 903,506 1,013,501
Interest Expense 543,773 423,295
Other Expense 20,036 111,922
----------- -----------
Total Expenses 3,722,019 3,503,951
----------- -----------
Income Before Income Taxes 113,421 1,409,423
- --------------------------
Provision for Income Taxes
- --------------------------
Current 82,311 306,227
Deferred (33,191) 189,248
----------- -----------
Total - Provision for Income Taxes 49,120 495,475
----------- -----------
Income Before Extraordinary Item 64,301 913,948
- --------------------------------
Extraordinary Gain (Net of Tax) 287,061 -0 -
- ------------------------------- ----------- -----------
Net Income $ 351,362 $ 913,948
- ---------- =========== ===========
Net Income Per Common Share (Primary and Fully Diluted) $ .22 $ .58
- ------------------------------------------------------- =========== ===========
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
<PAGE> 15
GLASSMASTER COMPANY
LEXINGTON SC
STATEMENT OF CASH FLOWS
FISCAL YEARS ENDED AUGUST 31, 1995 AND 1994
<TABLE>
<CAPTION>
August 31, 1995 August 31, 1994
--------------- ---------------
<S> <C> <C>
Cash Flows From Operating Activities
- ------------------------------------
Net Income $ 351,362 $ 913,948
Adjustments to Reconcile Net Income to Net Cash Provided
(Used) by Operating Activities:
Depreciation & Amortization 759,836 583,247
(Gain) Loss on Disposal of Property 60,219 69,600
Increase in Deferred Income Taxes 137,581 189,248
Extraordinary Gain (457,833) -0-
Changes in Operating Assets and Liabilities:
Accounts Receivable Decrease (Increase) (658,617) 8,042
Insurance Claim Receivable Decrease (Increase) 330,958 (330,958)
Inventories Decrease (Increase) (767,290) 7,598
Prepaid Expenses Decrease (Increase) (40,485) 9,758
Prepaid Income Taxes Decrease (Increase) (68,108) -0-
Accounts Payable Increase (Decrease) 231,989 162,134
Accrued Expenses Increase (Decrease) (148,031) 83,771
Interest Payable Increase (Decrease) (40,140) (3,145)
Income Taxes Payable Increase (Decrease) (224,127) 156,696
----------- -----------
Net Cash Provided (Used) by Operating Activities (532,686) 1,849,939
----------- -----------
Cash Flows From Investing Activities
- ------------------------------------
Cash Payments for the Purchase of Fixed Assets (2,129,996) (1,293,608)
Cash Surrender Value - Life Insurance (35,932) (38,149)
Cash Proceeds from Insurance on Property 478,866 -0-
Cash Proceeds from the Sale of Fixed Assets 26,290 400
----------- -----------
Net Cash Provided (Used) by Investing Activities (1,660,772) (1,331,357)
----------- -----------
Cash Flows From Financing Activities
- ------------------------------------
Proceeds From Issuance of Common Stock 13,261 20,757
Proceeds From Issuance of Long-Term Debt 1,627,892 2,461,684
Principal Payments on Long-Term Debt (947,851) (2,107,392)
Dividends Paid (96,103) (78,826)
Net Increase (Decrease) in Line of Credit 1,678,081 (839,454)
Cash Payments for Loan Closing Costs (10,715) -0-
----------- -----------
Net Cash Provided (Used) by Financing Activities 2,264,565 (543,231)
----------- -----------
Net Increase (Decrease) in Cash 71,107 (24,649)
- -------------------------------
Cash at Beginning of Year 90,702 115,351
- ------------------------- ----------- -----------
Cash at End of Year $ 161,809 $ 90,702
- ------------------- =========== ===========
Supplemental Disclosures of Cash Flow Information
- -------------------------------------------------
Cash Paid For:
Interest (Net of Amount Capitalized) $ 583,913 $ 429,507
Income Taxes Paid 374,546 149,161
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1995 AND 1994
Note 1. Summary of Significant Accounting Policies
Description of Business
Glassmaster Company is a manufacturer of extruded (thermoplastic)
synthetic monofilament, pultruded (thermoset) fiberglass products, and
flexible steel wire controls. The company markets its monofilament
products primarily on a private brand basis, which are sold by company
salesmen to original equipment manufacturers and distributors
throughout North America, and to a lesser degree, Europe, South
America, and the Pacific Rim. The Company's fiberglass products are
sold through in-house salesmen and regional manufacturers' sales
representatives and are distributed throughout the United States and
Canada. Flexible steel wire controls are sold through manufacturers'
representatives or directly to original equipment manufacturers
throughout North America.
Principles of Consolidation
The consolidated financial statements for the year ended August
31, 1995 and 1994 include the accounts of Glassmaster Company and its
wholly-owned subsidiary, Glassmaster Controls Company, Inc., which was
organized and incorporated under the laws of the State of Michigan, on
October 28, 1988. All material inter-company transactions have been
eliminated.
Inventories
The method of determining the amount of inventories is lower of
cost or market on a first-in, first-out basis. Inventories as shown
on the Balance Sheet are classified below:
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Materials & Supplies $ 1,642,504 $ 1,176,902
Work In Process 489,469 398,855
Finished Products 617,768 406,694
----------- -----------
Total $ 2,749,741 $ 1,982,451
=========== ===========
</TABLE>
Fixed Assets
The basis for determining the values of fixed assets is cost.
Included in land is property valued at $100,374 which was donated to
the Company by Lexington County, South Carolina.
The provision for depreciation charged against income for the
fiscal years ended August 31, 1995, and 1994, totaled $752,297, and
$549,606 respectively. The declining balance and straight-line
methods of depreciation are used.
The categories of fixed assets are as follows:
<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
Land $ 190,274 $ 190,274
Buildings 3,591,291 3,065,543
Furniture & Fixtures 296,849 259,833
Automotive Equipment 277,091 280,090
Plant Equipment 4,704,147 3,899,457
Tooling and Dies 516,234 395,594
Leasehold Improvements -0- 111,341
Less: Accumulated Depreciation (3,896,923) (3,863,326)
----------- -----------
Net $ 5,678,963 $ 4,338,806
--- =========== ===========
</TABLE>
<PAGE> 17
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1995 AND 1994
Note 1. Summary of Significant Accounting Policies (Cont'd)
Pre-Production Expense
Certain costs incurred during the fiscal years ended August 31,
1989 and 1988, in the establishment of a new product line have been
capitalized and are being amortized on a straight-line basis over five
years beginning with the first month of production and the unamortized
portion is included in other assets on the balance sheet. These costs
amounted to $62,095 and $20,942 during the fiscal years respectively.
Amortization expense charged to operations for 1995 was $-0- and for
1994 was $5,536.
Income Taxes
Effective September 1, 1992, the company adopted FASB Statement
No. 109, Accounting for Income Taxes, which requires an asset and
liability approach to financial accounting and reporting for income
taxes. Deferred income tax assets and liabilities are computed
annually for differences between the financial statement and tax bases
of assets and liabilities that will result in taxable or deductible
amounts in the future based on enacted tax laws and rates applicable
to the periods in which differences are expected to affect taxable
income. Income tax expense is the tax payable or refundable for the
period plus or minus the change during the period in deferred tax
assets and liabilities.
Components of the provision for income taxes on continuing
operations are shown below:
<TABLE>
<CAPTION>
1995 1994
---- ----
Current Deferred Current Deferred
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Federal $ 72,270 ($23,202) $274,348 $161,701
State 10,041 (9,989) 31,879 27,547
Foreign -0- -0- -0- -0-
-------- -------- -------- --------
$ 82,311 ($33,191) $306,227 $189,248
</TABLE>
The principal elements accounting for the difference between the
statutory federal income tax rate and the effective rates are:
<TABLE>
<CAPTION>
1995 1994
---- ----
(Percent) (Percent)
<S> <C> <C>
Statutory federal income tax rate 34.0 34.0
Effect of tax loss carryovers - federal -0- -0-
State income tax effect 8.8 1.2
Other .5 -0-
---- ----
Effective corporate income tax rate 43.3 35.2
</TABLE>
Investment Credit
Investment credits are accounted for as a reduction of income tax
expense in the years they are available for use under the flow through
method. $48,719 of investment credit was used to offset income tax
expense for the year ended August 31, 1994. No additional investment
credit is available for future periods. For South Carolina tax
purposes a net operating loss carry-forward of $205,522 was used to
reduce the current year taxable income. No additional net operating
loss carryovers are available for future periods.
<PAGE> 18
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1995 AND 1994
Note 2. Notes and Mortgages Payable
Substantially all property, plant and equipment and a portion of
CSV Life Insurance are pledged as collateral for the scheduled
borrowings. In addition, inventories and customer receivables are
pledged as collateral to provide the Company with a revolving line of
credit for working capital requirements. The amount available for
borrowings under this line of credit varies with fluctuations in the
amount of inventories on hand and customer receivables outstanding
with a maximum available credit line of $4.0 million. The balance as
of August 31, 1995 was $2,309,277 and at August 31, 1994 was $776,196.
This credit agreement is subject to renegotiation and renewal every
three-year period. The current contract will expire March 31, 1998.
Special provisions of the loan agreements restrict payment of
cash dividends without the consent of the lender as well as providing
for minimum working capital requirements and maximum debt to net worth
requirements in addition to providing for other minimum financial
ratio requirements. The company was not in violation of any of these
loan covenants as of August 31, 1995.
During the fiscal year ended August 31, 1990, the Company issued
Subordinated Convertible Debentures in the amount of $281,700. These
debentures bear interest at the rate of 12.5%, which is payable
annually on November 1 each year. The debentures matured on November
1, 1994. (See Note 10 to Financial Statements).
The following table sets forth the Company's indebtedness at the
end of fiscal years 1995 and 1994.
<TABLE>
<CAPTION>
1995 1994
---- ----
Current Long-Term Current Long-Term
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Financial Institutions
Mortgages, interest ranging from Prime
to 8.88% fixed, maturities to 2005 $ 194,329 $2,087,119 $ 191,357 $1,414,985
Notes, interest ranging from Prime + .5% to
Prime + 1.5%, maturities within 12 months 2,454,277 --- 776,196 ---
Installment Notes, interest range from
1.9% to Prime + 1.25%, maturities to 1999 796,999 1,072,986 773,819 1,135,694
Local Government Mortgage, interest at 3%
fixed, maturity November 9, 2004 7,560 186,903 --- ---
Subordinated Convertible Debentures, interest
at 12.5%, maturity November 1, 1994 --- --- 196,700 ---
---------- ---------- ---------- ----------
Totals $3,453,165 $3,347,008 $1,938,072 $2,550,679
========== ========== ========== ==========
</TABLE>
At August 31, 1995, long-term debt was due in aggregate annual
installments of $998,888, $934,178, $418,768, $400,230, and $254,101
in each of the five years ending August 31, 2000. The Prime interest
rate was 8.75% and 7.75% respectively, for years ended August 31, 1995
and 1994.
<PAGE> 19
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1995 AND 1994
Note 3. Stock Options
Effective October 7, 1982, the Company adopted an incentive stock
option plan and reserved 160,000 shares of common stock for issuance
to key employees. On October 28, 1988, the number of shares reserved
was increased to 260,000. Options granted under the plan became
exercisable at varying percentages from date of grant through
expiration, either at termination of employment or ten years after
date of grant.
At August 31, 1995 and 1994, options to purchase 254,500 shares
had been granted, and 61,834 shares and 48,333 shares respectively,
were exercisable. Most options granted will be vested at 20% per year
with the total being vested by the end of the fifth year, and the
options will expire at 20% per year beginning in the sixth year and
will terminate at the end of the tenth year at a price of $1.00 per
share for 165,000 shares granted, $1.25 per share for 15,000 shares
granted, $2.25 per share for 30,000 shares granted, $3.00 per share
for 10,000 shares granted, and $4.00 per share for the remaining
34,500 shares granted. The exercise price as stated above
approximates the fair market value of the underlying common stock at
the date granted.
Options to purchase 7,733 and 14,733 shares of common stock
respectively were exercised during the fiscal years ended August 31,
1995 and August 31, 1994. A total of 41,600 options have been
forfeited due to the expiration of time or termination of employment.
Note 4. Donated Capital
Donated capital of $124,210 represents the fair market value of
23.4 acres of land, grading, and paving, donated to the Company in fee
simple by Lexington County, South Carolina, in 1965. Approximately
4.5 acres of this land was sold during the fiscal years 1981, 1982,
and 1983.
Note 5. Description of Leasing Agreements
Operating Leases
On October 5, 1988, the Company entered into a master lease
agreement with General Electric Capital Corporation for a seven-year
operating lease beginning on May 1, 1989, for two monofilament
production lines and one product development line.
Base rentals payable on the above operating lease is summarized
below as of August 31, 1995 and 1994.
<TABLE>
<CAPTION>
August 31, 1995 August 31, 1994
--------------- ---------------
<S> <C> <C>
1995 $ --- $ 212,760
1996 141,840 141,840
1997 -0- -0-
--------- ---------
Total Base Rentals $ 141,840 $ 354,600
------------------ ========= =========
</TABLE>
<PAGE> 20
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1995 AND 1994
Note 6. Earnings Per Share
Primary earnings per share amounts are computed based on the
weighted average number of shares actually outstanding plus the shares
that would be outstanding assuming exercise of dilutive stock options.
The number of shares that would be issued from the exercise of stock
options has been reduced by the number of shares that could have been
purchased from the proceeds at the average market price of the
Company's stock. The number of shares used in the computations were
1,596,785 in 1995 and 1,574,010 in 1994.
Note 7. Defined Contribution Plan
The Company established a qualified 401(K) defined contribution
plan effective January 1, 1990. The plan year ends on December 31.
Participation in the plan is voluntary and employees may contribute
from 1% to 15% of eligible compensation on a tax-deferred basis.
The amount to be contributed by the Company will be determined
each year prior to December 1. The proposed match for the current
plan year (1994) is $.25 for each $1.00 of employee contributions up
to a maximum 6% of eligible compensation.
The plan provides for the Company to make a discretionary
contribution on behalf of all eligible employees (those with one full
year of active service) regardless of whether they have elected to
voluntarily participate in the plan. This discretionary contribution
will be allocated based on a ratio of the employees' total W-2
earnings to the total W-2 earnings of all eligible employees. Any
discretionary contribution will be dependent upon the overall
profitability of the corporation and will be made with the approval of
the Board of Directors.
The amount of expense charged to operations was $66,782 for the
year ended August 31, 1995 and $80,120 for 1994.
Note 8. Storm Damage/Insurance Receivable
On August 16, 1994 a tornado inflicted damage to company property
located in Lexington, S.C. The damage included structural damage to
buildings, loss of inventory and loss of approximately 20% of
production capacity for a two-month period. The company had
accumulated reimbursable costs of $153,597 and had recorded $427,361
as a receivable for the lost inventory as of August 31, 1994. These
amounts were offset by a $250,000 advance payment received from the
insurance company prior to year end resulting in a net receivable of
$330,958 as of August 31, 1994. The Company and its insurance company
reached a full and satisfactory settlement during the year ended
August 31, 1995. Amounts received for excess costs incurred from the
storm were charged directly against those expenses. Amounts received
for damaged inventory and business interruption were charged to
operating income during the current period. Amounts received for
destroyed and damaged property were treated as if the property was
sold and has been recorded as an extraordinary gain of $457,833 net of
deferred income tax effects of $170,772 on the income statement.
Note 9. Subsequent Event
On October 26, 1995, the Board of Directors declared a cash
dividend of $.03 per common share payable on or about January 30, 1996
to stockholders of record on January 9, 1996.
Note 10. Non-Cash Transaction - Conversion of Debentures
On December 4, 1994, debentures in the amount of $46,700 were
converted into 11,675 shares of common stock at $4.00 per share. The
remaining debentures were paid in cash during the fiscal year ended
August 31, 1995.
<PAGE> 21
GLASSMASTER COMPANY
LEXINGTON, S.C.
OCTOBER 30, 1995
We have audited the consolidated balance sheets of Glassmaster Company
and subsidiary as of August 31, 1995 and 1994, and the related statements of
income, stockholders' equity, and cash flows, for the two-year period ended
August 31, 1995. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Glassmaster Company and subsidiary as of August 31, 1995 and 1994, and the
respective results of its operations and its cash flows for the two-year period
ended August 31, 1995, in conformity with generally accepted accounting
principles.
Brittingham, Dial & Jeffcoat
Certified Public Accountants
501 State Street
PO Box 5949
West Columbia, SC 29171
<PAGE> 22
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Exhibit Sequential Page No.
- ----------- ------- -------------------
<S> <C> <C>
3.1 Amended and Restated Certificate of Incorporation of the Company, filed as
Exhibit 3.1 to Form 10-K for the year ended August 31, 1991 and incorporated
herein by reference. ---
3.2 Amended and Restated Bylaws of the company, filed as Exhibit 3.2 to Form 10-K
for the year ended August 31, 1991 and incorporated herein by reference. ---
10 Amended and restated Glassmaster Company 1992 Incentive Stock Option Plan,
filed as exhibit 10 to Form 10-KSB for the year ended August 31, 1993 and
incorporated herein by reference. ---
11 Computation of Earnings Per Share for two years ended August 31, 1995 and 1994. 23
21 Subsidiaries of the Company. 24
27 Financial Data Schedule (for SEC use only). ---
</TABLE>
<PAGE> 1
EXHIBIT 11
GLASSMASTER COMPANY
COMPUTATION OF EARNINGS PER SHARE
FOR THE TWO YEARS ENDED AUGUST 31, 1995
(THOUSANDS EXCEPT FOR PER SHARE FIGURES)
<TABLE>
<CAPTION>
1995 1994
------ ------
<S> <C> <C>
Primary:
- --------
Average Shares Outstanding 1,597 1,574
Net effect of dilutive stock options under treasury
stock method using average market price 0 0
------- -------
Total 1,597 1,574
Net Income $ 351 $ 914
---------- ======= =======
Earnings Per Share $ .22 $ .58
Fully Diluted:
- --------------
Average Shares Outstanding 1,597 1,574
Net effect of dilutive stock options under treasury stock
method using year end market value if higher than average 0 0
------- -------
Total 1,574 1,563
Earnings Per Share $ .22 $ .58
</TABLE>
Note: If average market price is higher than ending market price, primary and
fully diluted EPS is the same.
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF GLASSMASTER COMPANY
1) Glassmaster Controls Company, Inc. is a wholly-owned subsidiary of the
Company, organized and incorporated under the laws of the State of
Michigan on October 28, 1988.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED AUGUST 31, 1995
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-START> SEP-01-1994
<PERIOD-END> AUG-31-1995
<EXCHANGE-RATE> 1
<CASH> 161,809
<SECURITIES> 0
<RECEIVABLES> 3,648,625
<ALLOWANCES> 68,417
<INVENTORY> 2,749,741
<CURRENT-ASSETS> 6,655,322
<PP&E> 9,575,886
<DEPRECIATION> 3,896,923
<TOTAL-ASSETS> 12,586,879
<CURRENT-LIABILITIES> 5,359,249
<BONDS> 0
<COMMON> 48,052
0
0
<OTHER-SE> 3,379,606
<TOTAL-LIABILITY-AND-EQUITY> 12,586,879
<SALES> 24,087,606
<TOTAL-REVENUES> 24,087,606
<CGS> 20,252,166
<TOTAL-COSTS> 20,252,166
<OTHER-EXPENSES> 3,126,099
<LOSS-PROVISION> 52,149
<INTEREST-EXPENSE> 543,773
<INCOME-PRETAX> 113,421
<INCOME-TAX> 49,120
<INCOME-CONTINUING> 64,301
<DISCONTINUED> 0
<EXTRAORDINARY> 287,061
<CHANGES> 0
<NET-INCOME> 351,362
<EPS-PRIMARY> .22
<EPS-DILUTED> .22
</TABLE>
