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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------
FORM 10-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _______ to ________
Commission file number 1-7006
BRUSH WELLMAN INC.
(Exact name of Registrant as specified in charter)
OHIO 34-0119320
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
17876 St. Clair Avenue, Cleveland, Ohio 44110
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE 216-486-4200
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Title of each class Name of each exchange on which registered
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COMMON STOCK, PAR VALUE $1 PER SHARE NEW YORK STOCK EXCHANGE
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K 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-K or any
amendment to this Form 10-K. [ X ]
The aggregate market value of Common Stock, par value $1 per share, held by
non-affiliates of the registrant (based upon the closing sale price on the New
York Stock Exchange) on March 8, 1994 was approximately $234,427,845.
As of March 8, 1994, there were 16,088,315 shares of Common Stock,
par value $1 per share, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the annual report to shareholders for the year ended
December 31, 1993 are incorporated by reference into Parts I and II.
Portions of the proxy statement for the annual meeting of shareholders
to be held on May 3, 1994 are incorporated by reference into Part III.
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PART I
ITEM 1. BUSINESS
Brush Wellman Inc. ("Company") manufactures and sells engineered
materials for use by manufacturers and others who perform further operations
for eventual incorporation into capital, aerospace/defense or consumer
products. These materials typically comprise a small portion of the final
product's cost. They are generally premium priced and are often developed or
customized for the customer's specific process or product requirements. The
Company's product lines are supported by research and development activities,
modern processing facilities and a global distribution network.
Customers include manufacturers of electrical/electronic connectors,
communication equipment, computers, lasers, spacecraft, appliances,
automobiles, aircraft, oil field instruments and equipment, sporting goods, and
defense contractors and suppliers to all of the foregoing industries.
The Company operates in a single business segment with product lines
comprised of beryllium-containing materials and other specialty materials.
The Company is a fully integrated producer of beryllium, beryllium
alloys (primarily beryllium copper), and beryllia ceramic, each of which
exhibits its own unique set of properties. The Company holds extensive mineral
rights and mines the beryllium bearing ore, bertrandite, in central Utah.
Beryllium is extracted from both bertrandite and imported beryl ore. In 1993,
74% of the Company's sales were of products containing the element beryllium
(80% in 1992 and 80% in 1991). Beryllium-containing products are sold in
competitive markets throughout the world through a direct sales organization
and through captive and independent distribution centers. NGK Metals
Corporation of Reading, Pennsylvania and NGK Insulators, Ltd. of Nagoya, Japan
compete with the Company in the beryllium alloys field. Beryllium alloys also
compete with other generally less expensive materials, including phosphor
bronze, stainless steel and other specialty copper and nickel alloys. General
Ceramics Inc. is a major domestic competitor in beryllia ceramic. Other
competitive materials include alumina, aluminum nitride and composites. While
the Company is the only domestic producer of the metal beryllium, it competes
with other fabricators as well as with designs utilizing other materials.
Sales of other specialty materials, principally metal systems and
precious metal products, were 26% of total sales in 1993 (20% in 1992 and 20%
in 1991). Precious metal products are produced by Williams Advanced Materials
Inc. (hereinafter referred to as "WAM"), a subsidiary of the Company comprised
of businesses acquired in 1986 and 1989. WAM's major product lines include
sealing lid assemblies, vapor deposition materials, contact ribbon products for
various segments of the semiconductor markets, clad and precious metal preforms
and restorative dental products. WAM also specializes in precious metal
refining and recovery.
WAM's principal competitors are Semi-Alloys and Johnson Matthey in
the sealing lid assembly business and Materials Research Corporation in the
vapor deposition materials
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As used in this report, except as the context otherwise requires, the term
"Company" means Brush Wellman Inc. and its consolidated subsidiaries, all of
which are wholly owned.
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product line. The products are sold directly from their facilities in Buffalo,
New York and Singapore and through sales representatives.
Technical Materials, Inc. (hereinafter referred to as "TMI"), a
subsidiary of the Company, produces specialty metal systems, consisting
principally of narrow metal strip, such as copper alloys, nickel alloys and
stainless steels into which strips of precious metal are inlaid. TMI also
offers a number of other material systems, including electron beam welded dual
metal, contour milling and skiving, thick and thin selective solder coatings,
selective electroplated products and bonded aluminum strips on nickel-iron
alloys for semiconductor leadframes. Divisions of Handy & Harman, Texas
Instruments and Metallon are competitors for the sale of inlaid strip. Strip
with selective electroplating is a competitive alternative as are other design
approaches. The products are sold directly and through sales representatives.
SALES AND BACKLOG
The backlog of unshipped orders as of December 31, 1993, 1992 and
1991 was $86,531,000, $90,201,000 and $112,620,000, respectively. Backlog is
generally represented by purchase orders that may be terminated under certain
conditions. The Company expects that, based on recent experience,
substantially all of its backlog of orders at December 31, 1993 will be filled
during 1994.
Sales are made to approximately 5,900 customers. Government sales,
principally subcontracts, accounted for about 6.1% of consolidated sales in
1993 as compared to 8.9% in 1992 and 9.5% in 1991. Sales outside the United
States, principally to Western Europe, Canada and Japan, accounted for
approximately 29% of sales in 1993, 27% in 1992 and 28% in 1991. Financial
information as to sales, identifiable assets and profitability by geographic
area set forth on pages 16-17 in Note M to the consolidated financial
statements in the annual report to shareholders for the year ended December 31,
1993 is incorporated herein by reference.
RESEARCH & DEVELOPMENT
Active research and development programs seek new product
compositions and designs as well as process innovations. Expenditures for
research and development amounted to $7,121,000 in 1993, $7,294,000 in 1992 and
$7,625,000 in 1991. A staff of 53 scientists, engineers and technicians was
employed in this effort during 1993. Some research and development projects
were externally sponsored and expenditures related to those projects
(approximately $80,446 in 1993, $217,000 in 1992 and $164,000 in 1991) are
excluded from the above totals.
AVAILABILITY OF RAW MATERIALS
The more important raw materials used by the Company are beryllium
(extracted from both imported beryl ore and bertrandite mined from the
Company's Utah properties), copper, gold, silver, nickel and palladium. The
availability of these raw materials, as well as other materials used by the
Company, is adequate and generally not dependent on any one supplier. Certain
items are supplied by a preferred single source, but alternatives are believed
readily available.
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PATENTS AND LICENSES
The Company owns patents, patent applications and licenses relating
to certain of its products and processes. While the Company's rights under the
patents and licenses are of some importance to its operations, the Company's
businesses are not materially dependent on any one patent or license or on the
patents and licenses as a group.
ENVIRONMENTAL MATTERS
The inhalation of excessive amounts of airborne beryllium particulate
may present a hazard to human health. For decades the Company has operated its
beryllium facilities under stringent standards of inplant and outplant
discharge. These standards, which were first established by the Atomic Energy
Commission over forty years ago, were, in general, subsequently adopted by the
United States Environmental Protection Agency and the Occupational Safety and
Health Administration. The Company's experience in sampling, measurement,
personnel training and other aspects of environmental control gained over the
years, and its investment in environmental control equipment, are believed to
be of material importance to the conduct of its business.
EMPLOYEES
As of December 31, 1993 the Company had 1,803 employees.
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ITEM 2. PROPERTIES
The material properties of the Company, all of which are owned in fee
except as otherwise indicated, are as follows:
CLEVELAND, OHIO - A structure containing 110,000 square feet on an 18
acre site housing corporate and administrative offices, data processing and
research and development facilities.
ELMORE, OHIO - A complex containing approximately 676,000 square feet
of building space on a 385 acre plant site. This facility employs diverse
chemical, metallurgical and metalworking processes in the production of
beryllium, beryllium oxide, beryllium alloys and related products. Beryllium
ore concentrate from the Delta, Utah plant is used in all beryllium-containing
products.
SHOEMAKERSVILLE (READING), PENNSYLVANIA - A 123,000 square foot plant
on a ten acre site that produces thin precision strips of beryllium copper and
other alloys and beryllium copper rod.
NEWBURYPORT, MASSACHUSETTS - A 30,000 square foot manufacturing
facility on a four acre site that produces alumina, beryllia ceramic and direct
bond copper products.
TUCSON, ARIZONA - A 45,000 square foot plant on a ten acre site for
the manufacture of beryllia ceramic parts from beryllium oxide powder supplied
by the Elmore, Ohio facility.
DELTA, UTAH - An ore extraction plant consisting of 86,000 square
feet of buildings and large outdoor facilities situated on a two square mile
site. This plant extracts beryllium from bertrandite ore from the Company's
mines as well as from imported beryl ore.
JUAB COUNTY, UTAH - The Company holds extensive mineral rights in
Juab County, Utah from which the beryllium bearing ore, bertrandite, is mined
by the open pit method. A substantial portion of these rights is held under
lease. Ore reserve data set forth on page 16 of this Form 10-K annual report
for the year ended December 31, 1993 are incorporated herein by reference.
FREMONT, CALIFORNIA - A 49,000 square foot leased facility for the
fabrication of precision electron beam welded, brazed and diffusion bonded
beryllium structures.
THEALE (READING), ENGLAND - A 19,700 square foot leased facility
principally for distribution of beryllium alloys.
STUTTGART, WEST GERMANY - A 24,750 square foot leased facility
principally for distribution of beryllium alloys.
FUKAYA, JAPAN - A 35,500 square foot facility on 1.8 acres of land in
Saitama Prefecture principally for distribution of beryllium alloys.
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LINCOLN, RHODE ISLAND - A manufacturing facility consisting of
124,000 square feet located on seven and one-half acres. This facility
produces metal strip inlaid with precious metals and related metal systems
products.
BUFFALO, NEW YORK - A complex of approximately 97,000 square feet on
a 3.8 acre site providing facilities for manufacturing, refining and laboratory
services relating to high purity precious metals.
SYRACUSE, NEW YORK - A 14,000 square foot leased portion of a
multi-story facility for the design and manufacture of circuits and packages
using a direct bond process to combine conductive copper with insulating
ceramic substrates.
Production capacity is believed to be adequate to fill the Company's
backlog of orders and is expected to meet demand for the foreseeable future.
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ITEM 3. LEGAL PROCEEDINGS
The Company is from time to time a defendant in various civil and
administrative proceedings that relate to the ordinary course of its operating
business. These proceedings include environmental, health and safety related
actions and other matters relating to the Company's present and former
operations. Included in such proceedings are the matters discussed below.
(a) ENVIRONMENTAL PROCEEDINGS
On November 1, 1989, the Company appealed to the Ohio Environmental
Board of Review to vacate or modify certain conditions in an NPDES wastewater
discharge permit issued by the Ohio Environmental Protection Agency (the "Ohio
EPA") for the Company's Elmore, Ohio facility. The Company challenges these
conditions on several bases, including technical infeasibility and economic
unreasonableness. Settlement discussions are continuing.
On or about September 25, 1992, the Company was served with a
third-party complaint alleging that the Company, along with 159 other
third-party defendants, are jointly and severally liable under the
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), 42 U.S.C. Sections 9607(a) and 9613(b), for response costs incurred
in connection with the clean-up of hazardous substances in soil and groundwater
at the Douglassville Site (the "Site") located in Berks County, Pennsylvania.
UNITED STATES OF AMERICA V. BERKS ASSOCIATES, INC., ET AL. V. AAMCO
TRANSMISSIONS, ET AL., United States District Court for the Eastern District of
Pennsylvania, Case No. 91-4968. Prior to the commencement of litigation, the
Company responded to a request for information from the United States
Environmental Protection Agency (the "United States EPA") by denying that it
arranged to send any substances to the Site. Although the Company has no
documents in its own files relating to the shipment of any waste to the Site,
documents maintained by third-party plaintiffs suggest that 8,344 gallons of
waste oil from the Company may have been taken there. Based on settlement
discussions currently underway, the Company believes that its liability arising
from this matter will be nominal.
In April 1993, the Company learned that the Ohio EPA had recommended
that the Ohio Attorney General's Office consider initiation of enforcement
proceedings against the Company with respect to alleged violations of various
environmental laws at its facility in Elmore, Ohio. The Company is presently
involved in settlement discussions while contesting the alleged violations.
The Company believes that resolution of this matter will have no material
effect on the Company.
(b) BERYLLIUM EXPOSURE CLAIMS
The inhalation of excessive amounts of airborne beryllium particulate
may present a health hazard to certain individuals.
For decades the Company has operated its beryllium facilities under
stringent standards of inplant and outplant discharge. These standards, which
were first developed by
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the Atomic Energy Commission over forty years ago, were, in general,
subsequently adopted by the United States Environmental Protection Agency and
the Occupational Safety and Health Administration.
PENDING CLAIMS. The Company is currently a defendant in the following
legal actions where the plaintiffs allege injury resulting from exposure to
beryllium and beryllium-containing materials and are claiming recovery based on
various legal theories. The Company believes that resolution of these cases
will not have a material effect on the Company.
<TABLE>
<CAPTION>
DATE LAWSUIT
NAME OF PLAINTIFF INSTITUTED FORUM RELIEF REQUESTED
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<S> <C> <C> <C>
John W Rosenbauer February, 1989 Court of Common Pleas. Damages in excess of $20,000 for personal
and Spouse Westmoreland County, injury and loss of consortium
Pennsylvania
Richard Neiman November, 1990 Court of Common Pleas. Damages in excess of $20,000 for personal
and Spouse Philadelphia County, injury and in excess of 20,000 for loss of
Pennsylvania consortium
Geraldine G. Ruffin, September, Superior Court, Essex Compensatory and punitive damages of an
individually and as 1991 County, New Jersey unspecified amount
executive
Steven Campbell January, 1992 Superior Court for Compensatory and punitive damages of an
Orange County, unspecified amount
California
Ray Amante April, 1992 Superior Court for Compensatory and punitive damages of an
Orange County, unspecified amount
California
Alfred L. Haynes September, 1992 United States District Compensatory damages of $5 million, $1.5
and Spouse Court, Eastern District million for loss of consortium and combined
of Tennessee punitive damages of $3 million
McKinley Houk October, 1992 United States District Compensatory damages of $5 million and
Court Eastern District punitive damages of $3 million
of Tennessee
William Ray Vance October, 1992 United States District Compensatory damages of $5 million for
Court, Eastern District personal injury, $1 million for loss of consortium
of Tennessee and combined punitive damages of $5 million
David Taggart October, 1992 Court of Common Pleas, Compensatory damages in excess of $25,000
Chester County, each for personal injury and loss of consortium
Pennsylvania against Williams Advanced Materials, Inc., a
subsidiary of the Company
Ernest Needham December, 1992 Superior Court of New Compensatory damages of an unspecified
Jersey, Passaic County amount
Harry Robbins June, 1993 Court of Common Pleas, Both parties individually seek compensatory
Montgomery County, damages in excess of $50,000. Mr. Robbins
Pennsylvania also seeks punitive damages in excess of
$50,000
Bruce Hand September, Superior Court, Passaic Compensatory damages of an unspecified
1983 County, New Jersey amount
Frances Lutz March, 1994 Superior Court, Passaic Compensatory damages of an unspecified
County, New Jersey amount
</TABLE>
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Defense for each of the cases identified above is being conducted by
counsel selected by the Company and retained, with certain reservations of
rights, by the Company's insurance carriers.
RECENT DEVELOPMENTS RELATING TO PENDING CLAIMS. The Company has filed a
motion for summary judgment in both the ROSENBAUER and HAYNES cases on which
the respective Courts have not yet ruled.
CLAIMS CONCLUDED SINCE THE END OF THIRD QUARTER 1993. Joseph R. Harper
and his wife filed suit against the Company and several other defendants in the
United States District Court for the Eastern District of Tennessee, for which
service of process on the Company occurred on May 6, 1992. Mr. Harper claimed
that, while he was an employee of an alleged customer of the Company, he
contracted chronic beryllium disease as a result of exposure to beryllium or
beryllium-containing products. Mr. Harper sought compensatory damages in the
amount of $5 million; his wife claimed damages of $1.5 million for loss of
consortium. Both plaintiffs sought punitive damages in the amount of $3
million. On December 28, 1993 the Court granted the Company's motion for
summary judgment and dismissed the action. Although the action is dismissed as
to the Company, the case remains pending as to other defendants. Plaintiffs
are not expected to appeal, but any such appeal need not occur until the case
is resolved as to the remaining defendants.
(c) ASBESTOS EXPOSURE CLAIMS
A subsidiary of the Company (the "Subsidiary") is a co-defendant in
twenty-eight cases making claims for asbestos-induced illness allegedly
relating to the former operations of the Subsidiary, then known as The S. K.
Wellman Corp. Twenty-three of these cases have been reported in prior filings
with the S.E.C. The Subsidiary is one of a large number of defendants in each
case. The plaintiffs seek compensatory and punitive damages, in most cases of
unspecified sums. Each case has been referred to a liability insurance carrier
for defense. With respect to those referrals on which a carrier has acted to
date, a carrier has accepted the defense of the actions, without admitting or
denying liability. Two hundred and six similar cases previously reported have
been dismissed or disposed of by pre-trial judgment, one by jury verdict of no
liability and ten others by settlement for nominal sums. The Company believes
that resolution of the pending cases referred to above will not have a material
effect upon the Company.
The Subsidiary has entered into an agreement with the predecessor owner
of its operating assets, Pneumo Abex Corporation (formerly Abex Corporation),
and five insurers, regarding the handling of these cases. Under the agreement,
the insurers share expenses of defense, and the Subsidiary, Pneumo Abex
Corporation and the insurers share payment of settlements and/or
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judgments. Certain expenses of handling the cases are also subject to a
limited, separate reimbursement agreement with Pneumo Abex Corporation. In
eleven of the pending cases, both expenses of defense and payment of
settlements and/or judgments are subject to a limited, separate reimbursement
agreement with MLX Corp., the parent of the company that purchased the
Subsidiary's operating assets in 1986.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
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<TABLE>
Executive Officers of the Registrant
------------------------------------
The following table provides information as to the executive officers of the Company.
<CAPTION>
Name Age Positions and Offices
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<S> <C> <C>
Gordon D. Harnett 51 Chairman of the Board, President, Chief Executive Officer and
Director
Clark G. Waite 61 Senior Vice President, Finance and Administration, Chief Financial
Officer, Secretary and Director
Jere H. Brophy 59 Vice President Technology
Stephen Freeman 47 Vice President Sales and Marketing
Craig B. Harlan 56 Vice President Business Development
Robert H. Rozek 59 Vice President International
Andrew J. Sandor 54 Vice President Operations
Daniel A. Skoch 44 Vice President Human Resources
</TABLE>
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MR. HARNETT was elected Chairman of the Board, President, Chief
Executive Officer and Director of the Company effective January 22, 1991. He
had served as a Senior Vice President of The B. F. Goodrich Company from
November 1988.
MR. WAITE was elected Senior Vice President Finance and Administration
in October of 1991. He was elected Chief Financial Officer in September 1987
and served as Vice President, Finance from September 1976 until his election as
Senior Vice President in September 1989. Mr. Waite was elected Secretary
effective January 1, 1988. He was Treasurer from December 31, 1987 to April
24, 1990.
DR. BROPHY was elected Vice President Technology effective March 31,
1988. Prior to that he was Vice President of Engineering, Engine and General
Components Group, Automotive Sector of TRW Inc. He had been Vice President,
Manufacturing and Materials Development, Automotive Sector of TRW Inc. from
1986 to 1987.
MR. FREEMAN was elected Vice President Sales and Marketing August 3,
1993. He served as Vice President Sales and Marketing-Alloy Products since
July, 1992. Prior to that, he had served as Management Consultant for Adastra,
Inc.
MR. HARLAN was elected Vice President Business Development in August,
1993. He had served as Senior Vice President, Sales and Marketing since
October, 1991. He had served as Vice President/General Manager, Alloy Division
since January 1, 1987. Prior to that he was President of TMI.
MR. ROZEK was elected Vice President International in October 1991. He
had served as Vice President, Corporate Development effective February 27,
1990. He was elected Vice President, Governmental and Environmental Affairs in
April 1989. He had been Vice President/General Manager, International Division
since November 1985.
MR. SANDOR was elected Vice President Operations in October 1991. He
had served as Senior Vice President since September 1989. He was appointed
Vice President/General Manager, Material Systems Division effective January 1,
1988. Prior to that he was Manager of the Company's Shoemakersville, PA
facility.
MR. SKOCH was elected Vice President Human Resources in July 1991.
Prior to that he was Corporate Director - Personnel. He had been Corporate
Manager Employee Relations and Training from December 1985 to July 1987.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS
The Company's Common Stock is traded on the New York Stock Exchange.
As of March 8, 1994, there were 2,681 shareholders of record. Information as
to stock price and dividends declared set forth on page 17 in Note N to the
consolidated financial statements in the annual report to shareholders for the
year ended December 31, 1993 is incorporated herein by reference. The
Company's ability to pay dividends is generally unrestricted, except that it is
obligated to maintain a specified level of tangible net worth pursuant to an
existing credit facility.
ITEM 6. SELECTED FINANCIAL DATA
Selected Financial Data on pages 22 and 23 of the annual report to shareholders
for the year ended December 31, 1993 is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Brush Wellman's engineered materials are comprised of five product
lines: BERYLLIUM ALLOYS, principally beryllium copper; BERYLLIUM and materials
rich in beryllium; beryllia CERAMICS; SPECIALTY METAL SYSTEMS, principally clad
metals; and PRECIOUS METAL PRODUCTS. All five product lines have items that
contain the element beryllium. SPECIALTY METAL SYSTEMS are produced and sold
by a wholly owned subsidiary, Technical Materials, Inc. Another wholly
owned subsidiary, Williams Advanced Materials Inc., specializes in PRECIOUS
METAL PRODUCTS. Worldwide sales in 1993 were $295 million as compared to $265
million in 1992 and $267 million in 1991.
Sales of BERYLLIUM ALLOYS increased in 1993. Solid increases
domestically and in Asia offset lower sales in Europe. The improvement was led
by automotive electronics and telecommunications applications, although most
markets enjoyed higher volume. An increased and more focused marketing effort
is the driving force behind the development of new applications as well as
growth in existing applications. For example, growth in undersea telephone
cable products is a result of increased market penetration and an expanding
market. A significant influence was the start of the TPC-5 transpacific fiber
optic cable project. This market is anticipated to continue its growth as new
cable projects that have recently been announced are brought on line. A second
example is in the aircraft industry. Working with the airframe manufacturers
and airline maintenance facilities as "demand generators" has resulted in an
increasing number of bushings and bearings being designed using beryllium
copper as an enabling technology to allow lower flying weight and improved
performance. This process is showing success in both new aircraft component
designs and in the retrofit of the installed base of landing gear on older
aircraft. Due to these and other favorable trends, continued growth of
BERYLLIUM ALLOYS is expected in 1994.
BERYLLIUM sales increased in 1993 from the year ago period due to
AlBeMet(TM) sales of a computer disk drive component. Absent the AlBeMet(TM)
sales, there was a reduction in
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BERYLLIUM sales due largely to lower defense spending. In 1994, sales will be
lower due to completion of the Defense Logistics Agency (DLA) supply contract
and reduced AlBeMet(TM) sales due to the end of an application at a computer
disk drive manufacturer. To counter this reduction in volume, process
improvement and cost containment are being emphasized. Marketing and product
development efforts are being focused on materials and designs for the
aerospace and avionics industries.
CERAMIC sales increased in 1993 as compared to 1992. Demand for
beryllia ceramic products was strong in United States automotive markets as
well as from telecommunications growth worldwide. Sales of direct bond copper
products increased 40% because of new applications in power electronics such as
solid state motor controls. These products of mainly alumina and copper are
bonded without the use of brazing materials. Continued growth is anticipated
in 1994 from new applications in automotive electronics and additional
penetration of Asian markets coupled with use of direct bond copper products in
power conversion and wireless communications.
SPECIALTY METAL SYSTEMS had a sizable sales increase in 1993 as
compared to 1992 and exceeded the sales level of 1991. The increase resulted
from recently developed applications, primarily in the automotive electronics,
telecommunications and computer industries. In the telecommunications
industry, for example, a precious metal clad on beryllium copper offered
superior performance in a requirement in cellular telephone connector contacts.
Additionally, a proprietary ductile nickel coating on beryllium copper Alloy
174 will be utilized in battery chargers for cellular telephones and other
products. In 1994, the continued development of new applications, along with
an effort to improve manufacturing response time, are necessary for the growth
of SPECIALTY METAL SYSTEMS.
PRECIOUS METAL PRODUCTS had a significant sales increase in 1993 as
compared to 1992. High demand for frame lid assemblies from semiconductor
manufacturers, along with added sales of a new line of vapor deposition
targets, accounted for much of the increase. Sales are expected to be lower in
1994 because semiconductor demand is expected to slow. In addition, first-time
vapor deposition target sales have a large precious metal content; as these
spent targets are recycled and refurbished, the customer maintains ownership of
the material, resulting in lower sales, but similar profit from value-added
services.
International sales were $86 million in 1993, $71 million in 1992
and $76 million in 1991. The increase in 1993 is primarily due to deliveries
of disk drive components to Asia and the start-up of PRECIOUS METAL PRODUCT
assemblies in Singapore. The distribution of BERYLLIUM ALLOYS is the major
component of international sales. Lower demand in Europe, due principally to
economic conditions, precluded any growth. International sales are likely to
be lower in 1994 due to the end of the previously mentioned disk drive
application. However, BERYLLIUM ALLOY sales should increase as economic
conditions in Europe improve and marketing efforts in Asia are strengthened.
Worldwide sales in 1992 were slightly under those of 1991. Gains in
BERYLLIUM ALLOYS, CERAMIC and PRECIOUS METAL PRODUCTS were offset by declines
in BERYLLIUM and SPECIALTY METAL SYSTEMS. The increases were primarily in
automotive and semiconductor markets with the decreases primarily in
defense-related applications.
Gross margin (sales less cost of sales) was 22.9%, 27.2%, and 24.4%
of sales in the years 1993, 1992 and 1991, respectively. The two primary
factors affecting margins were a product
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mix shift to lower margin products, particularly those with a high precious
metal content, and manufacturing problems associated with the AlBeMet(TM) disk
drive component. In addition, competitive conditions limit the ability to
cover cost increases. However, the Company continues to be encouraged by the
favorable impact on margins from manufacturing yield and productivity
improvements, especially in BERYLLIUM ALLOY strip products. Margin percentages
are expected to improve in 1994 due to an anticipated shift in product mix to
high value-added products, manufacturing improvements and the significant
reduction of low margin AlBeMet(TM) disk drive sales.
The higher gross margin in 1992 was due to improved manufacturing
performance, primarily in BERYLLIUM ALLOYS, coupled with cost reduction
efforts. This was in spite of relatively low capacity utilization. Other
favorable factors included about $4 million in lower depreciation and
amortization due to the asset impairment charge taken in 1991 and about $2
million from a weaker dollar.
Selling, administrative and general expenses in 1993 were $47.8
million (16.2% of sales) compared to $46.6 million (17.6% of sales) in 1992.
The increase was primarily in worldwide marketing, selling and customer service
activities that support the critical issue of sales growth. This category of
expense increased over 6% in 1993 from 1992 while administrative and general
expenses, which include lower incentive compensation, decreased.
Selling, administrative and general expenses in 1992 were down from
1991. Increased marketing, selling and distribution were more than offset by a
reduction in administrative expenses.
Research and Development (R&D) expenses of $7.1 million in 1993 were
slightly lower than the $7.3 million spent in 1992. The Company's marketing
efforts are leading to changes in R&D resource utilization. Cross-functional
marketing teams, which include R&D representation, bring more focus to those
activities and opportunities that offer the greatest sales and margin potential
to the Company. In 1991, R&D expenses were $7.6 million.
Interest expense was $3.0 million in 1993, $3.2 million in 1992 and
$3.8 million in 1991. All amounts are net of interest capitalized on active
construction and mine development projects. Lower interest rates and less
debt, on average, favorably impacted interest costs in 1993 and 1992.
The impairment and restructuring charges in 1991 had a pre-tax
income impact of $39.3 million. These charges consisted of a writedown of the
carrying value of the assets of Technical Materials, Inc. and Williams Advanced
Materials Inc. and provisions for early retirement, severance and environmental
matters.
In 1991, the Company adopted Statement of Financial Accounting
Standard No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions" (FAS 106). This accounting change was effective as of January 1,
1991 and resulted in recording a transition obligation that reduced earnings by
$1.02 per share. In addition, the ongoing effect of adopting FAS 106 was to
increase net periodic postretirement cost and reduce earnings by $.08 per share
in 1991.
-14-
<PAGE> 16
Other-net expense was $2.2 million in 1993, $1.3 million in 1992 and
$3.0 million in 1991. This category includes such expenses as amortization of
goodwill and other intangibles, the effect of currency exchange and translation
and other non-operating items. Included in all three years are the
postretirement benefit costs pursuant to FAS 106 for a divested operation. In
1993, the Company made an adjustment to the FAS 106 demographic assumptions for
the divested operation. This resulted in a reduction of the liability and
resulting income of $1.3 million. The carrying value of a building from the
divested operation was reduced by $0.9 million. Included in 1992 was about
$1.4 million of nonrecurring gains.
Income before income taxes in 1993 of $7.7 million was significantly
lower than the 1992 pre-tax income of $13.7 million. The reduction is due to
the lower gross margin, owing principally to the manufacturing problems with
the disk drive component and lower sales of BERYLLIUM for defense related
applications. The increase in selling, general and administrative expense was
also a contributing factor to the lower pre-tax income. On the positive side
was improved manufacturing performance in BERYLLIUM ALLOYS and CERAMICS. In
1992, pre-tax income of $13.7 million was significantly higher than the 1991
pre-tax income of $3.2 million, exclusive of the impairment and restructuring
charges. The combination of better manufacturing performance, cost reduction
and the ongoing effects of the previously mentioned 1991 asset impairment
charges accounted for the gain.
The effective tax rate employed for 1993 was 16.2% of pre-tax income
as compared to a rate of 23.6% of pre-tax income in 1992. The lower pre-tax
income, coupled with relatively fixed tax credits and allowances, results in
the significantly lower tax rate for 1993 as compared to 1992 and to statutory
rates. As shown in Note H to the consolidated financial statements, the tax
credit for percentage depletion in excess of cost depletion from mining
operations, along with the tax benefit of the Company-owned life insurance
program, account for almost the entire reduction from statutory rates in both
1993 and 1992. In 1991, a tax benefit of 23.8% on the pre-tax loss was
utilized.
Earnings per share were $0.40 in 1993 and $0.65 in 1992. Loss per
share of $2.74 in 1991 includes $2.93 per share of non-recurring items for the
impairment and restructuring charges and the accounting change. Comparable per
share earnings in 1991 were $0.19.
FINANCIAL POSITION
CAPITAL RESOURCES AND LIQUIDITY
Cash flow from operating activities totaled $18.3 million in 1993.
Cash balances increased by $3.5 million while total debt decreased by $13.4
million.
Capital expenditures for property, plant and equipment amounting to
$12 million in 1993 were focused on upgrades and additions to improve quality
and productivity. Capital expenditures in 1994 are expected to approach $20
million with a significant portion devoted to projects at the Company's
extraction facilities in Utah, including extending the life and capacity of the
tailings pond.
Long-term financial resources available to the Company include $60
million of medium-term notes and $40 million under a bank credit agreement
(unused at December 31, 1993).
-15-
<PAGE> 17
In the fourth quarter of 1993, the Company borrowed the $15 million cash
surrender value from a group of Company-owned life insurance policies. The
proceeds were used to repay all borrowings under the bank credit agreement.
Long-term debt at December 31, 1993 was $24 million or 12% of total capital.
Short-term debt at December 31, 1993 was $16 million and is
denominated principally in gold, yen, marks and sterling to provide hedges
against assets so denominated. In addition, credit lines amounting to $54
million are available.
Funds being generated from operations plus the available borrowing
capacity are believed adequate to support operating requirements, capital
expenditures, remediation projects, dividends and small acquisitions. Excess
cash, if any, is invested in collateralized repurchase agreements and other
high quality instruments.
Cash flow from operating activities in 1992 was $31 million. Total
debt was reduced $5.4 million while capital and mine development expenditures
totaled $14 million and dividends totalled $3.2 million. Long-term debt at
December 31, 1992 was 17% of total capital.
ORE RESERVES
The Company's reserves of beryllium-bearing bertrandite ore are
located in Juab County, Utah. An ongoing drilling program has generally added
to proven reserves. Proven reserves are the measured quantities of ore
commercially recoverable through the open pit method. Probable reserves are
the estimated quantities of ore known to exist, principally at greater depths,
but prospects for commercial recovery are indeterminable. Ore dilution that
occurs during mining approximates 7%. About 87% of beryllium in ore is
recovered in the extraction process. The Company augments its proven reserves
of bertrandite ore through the purchase of imported beryl ore (approximately 4%
beryllium) which is also processed at the Utah extraction plant.
<TABLE>
<CAPTION>
1993 1992 1991 1990 1989
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Proven bertrandite ore reserves at
year end (thousands of dry tons) 6,786 6,787 6,855 6,758 6,504
Grade % beryllium 0.251% 0.251% 0.251% 0.251% 0.249%
Probable bertrandite ore reserves at
year-end (thousands of dry tons) 7,594 7,482 7,215 7,302 7,217
Grade % beryllium 0.279% 0.281% 0.284% 0.281% 0.263%
Bertrandite ore processed (thousands
of dry tons, diluted) 92 91 80 85 85
Grade % beryllium, diluted 0.232% 0.234% 0.237% 0.234% 0.231%
</TABLE>
-16-
<PAGE> 18
INFLATION AND CHANGING PRICES
The prices of major raw materials, such as copper, nickel and gold,
purchased by the Company were mixed during 1993. Such changes in costs are
generally reflected in selling price adjustments. The prices of labor and
other factors of production generally increase with inflation. Additions to
capacity, while more expensive over time, usually result in greater
productivity or improved yields. However, market factors, alternative
materials and competitive pricing have affected the Company's ability to offset
wage and benefit increases. The Company employs the last-in, first-out (LIFO)
inventory valuation method domestically to more closely match current costs
with revenues.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements of the Company
included in the annual report to shareholders for the year ended December 31,
1993 are incorporated herein by reference:
Consolidated Balance Sheets - December 31, 1993 and 1992.
Consolidated Statements of Income - Years ended December 31, 1993, 1992
and 1991.
Consolidated Statements of Shareholders' Equity - Years ended December 31,
1993, 1992 and 1991.
Consolidated Statements of Cash Flows - Years ended December 31, 1993,
1992 and 1991.
Notes to Consolidated Financial Statements.
Quarterly Data on page 17 of the Annual Report to shareholders and Ore Reserves
on page 16 of this Form 10-K annual report to shareholders for the year ended
December 31, 1993 are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None
-17-
<PAGE> 19
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information under Election of Directors on pages 2 through 5 of
the Proxy Statement dated March 11, 1994 is incorporated herein by reference.
Information with respect to Executive Officers of the Company is set forth
earlier on pages 10 and 11 of this Report.
ITEM 11. EXECUTIVE COMPENSATION
The information under Executive Officer Compensation on pages 8
through 14 of the Proxy Statement dated March 11, 1994 is incorporated herein
by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information under Common Stock Ownership of Certain Beneficial
Owners and Management on pages 6 through 7 of the Proxy Statement dated March
11, 1994 is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information under Compensation Committee Interlocks and Insider
Participation and Related Party Transactions on page 15 of the Proxy Statement
dated March 11, 1994 is incorporated herein by reference.
-18-
<PAGE> 20
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
8-K
(a) 1. FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION
Included in Part II of this Report by reference to the
annual report to shareholders for the year ended December
31, 1993 are the following consolidated financial
statements:
Consolidated Balance Sheets - December 31, 1993 and 1992.
Consolidated Statements of Income - Years ended December 31,
1993, 1992 and 1991.
Consolidated Statements of Shareholders' Equity - Years
ended December 31, 1993, 1992 and 1991.
Consolidated Statements of Cash Flows - Years ended December
31, 1993, 1992 and 1991.
Notes to Consolidated Financial Statements.
Report of Independent Auditors.
(a) 2. FINANCIAL STATEMENT SCHEDULES
The following consolidated financial information for the
years 1993, 1992 and 1991 is submitted herewith:
Schedule V - Property, plant and equipment
Schedule VI - Accumulated depreciation, depletion and
amortization of property, plant and equipment
Schedule VIII - Valuation and qualifying accounts
Schedule IX - Short-term borrowings
Schedule X - Supplementary income statement information
All other schedules for which provision is made in the
applicable accounting regulations of the Securities and
Exchange Commission are not required under the related
instructions or are inapplicable, and therefore have been
omitted.
-19-
<PAGE> 21
(a) 3. EXHIBITS
(3a) Amended Articles of Incorporation of the Company as
amended February 28, 1989 (filed as Exhibit 3a to
the Company's Form 10-K Annual Report for the year
ended December 31, 1988), incorporated herein by
reference.
(3b) Regulations of the Company as amended April 25,
1989 (filed as Exhibit 3 to the Company's Form 10-Q
Quarterly Report for the quarter ended July 2,
1989) and further amended April 27, 1993 (filed as
Exhibit 3ii to the Company's Form 10-Q Quarterly
Report for the quarter ended April 4, 1993),
incorporated herein by reference.
(4a) Common Stock Certificate of the Company (filed as
Exhibit 4c to Post-Effective Amendment No. 2 to
Registration Statement No. 2-64080), incorporated
herein by reference.
(4b) Credit Agreement dated as of December 23, 1991
between the Company and National City Bank acting
for itself and as agent for three other banking
institutions (filed as Exhibit 4b to the Company's
Form 10-K Annual Report for the year ended December
31, 1991), incorporated herein by reference.
(4c) Rights Agreement between the Company and Society
National Bank (formerly Ameritrust Company National
Association) as amended February 28, 1989 (filed as
Exhibit 4c to the Company's Form 10-K Annual Report
for the year ended December 31, 1988), incorporated
herein by reference.
(4d) Issuing and Paying Agency Agreement dated as of
February 1, 1990, including a specimen form of a
medium term note issued thereunder, between the
Company and Morgan Guaranty Trust Company of New
York (filed as Exhibit 4d to the Company's Form
10-K Annual Report for the year ended December 31,
1989), incorporated herein by reference.
(4e) Pursuant to Regulation S-K, Item 601-(b)(4), the
Company agrees to furnish to the Commission, upon
its request, a copy of the instruments defining the
rights of holders of long-term debt of the Company
that are not being filed with this report.
(10a) * Employment Agreement entered into by the Company
and Mr. Gordon D. Harnett on March 20, 1991
(filed as Exhibit 10a to the Company's Form 10-K
Annual Report for the year ended December 31,
1990), incorporated herein by reference.
*Reflects management contract or other compensatory arrangement required to be
filed as an Exhibit pursuant to Item 14(c) of this Report.
20
<PAGE> 22
(10b) * Form of Employment Agreement entered into by the
Company and Messrs. Waite, Brophy, Hanes,
Harlan, Rozek and Sandor on February 20, 1989
(filed as Exhibit 10j to the Company's Form 10-K
Annual Report for the year ended December 31,
1988), incorporated herein by reference.
(10c) * Form of Amendment to the Employment Agreement
(dated February 20, 1989) entered into by the
Company and Messrs. Waite, Brophy, Hanes,
Harlan, Rozek and Sandor dated February 28, 1991
(filed as Exhibit 10c to the Company's Form 10-K
Annual Report for the year ended December 31,
1990), incorporated herein by reference.
(10d) * Form of Employment Agreement entered into by the
Company and Mr. Daniel A. Skoch on January 28,
1992 and Mr. Stephen Freeman dated August 3,
1993 (filed as Exhibit 10d to the Company's Form
10-K Annual Report for the year ended December
31, 1991), incorporated herein by reference.
(10e) * Form of Trust Agreement between the Company and
Society National Bank (formerly Ameritrust
Company National Association) on behalf of
Messrs. Waite, Brophy, Hanes, Harlan, Rozek and
Sandor dated February 20, 1989, Mr. Harnett
dated March 20, 1991 and Mr. Skoch dated January
28, 1992 and Mr. Stephen Freeman dated August
3, 1993 (filed as Exhibit 10k to the Company's
Form 10-K Annual Report for the year ended
December 31, 1988), incorporated herein by
reference.
(10f) Form of Indemnification Agreement entered into
by the Company and Mr. C. G. Waite on June 27,
1989 and Mr. G. D. Harnett on March 20, 1991
(filed as Exhibit 10a to the Company's Form 10-Q
Quarterly Report for the quarter ended July 2,
1989), incorporated herein by reference.
(10g) Form of Indemnification Agreement entered into
by the Company and Messrs. J. H. Brophy, A. J.
Sandor, C. B. Harlan, H. D. Hanes, and R. H.
Rozek on June 27, 1989, Mr. D. A. Skoch on
January 28, 1992 and Mr. Stephen Freeman dated
August 3, 1993 (filed as Exhibit 10b to the
Company's Form 10-Q Quarterly Report for the
quarter ended July 2, 1989), incorporated herein
by reference.
(10h) Form of Indemnification Agreement entered into
by the Company and Messrs. C. F. Brush, F. B.
Carr, W. E. MacDonald, J. L. McCall, W. P.
Madar, G. C. McDonough, R.
*Reflects management contract or other compensatory arrangement required to be
filed as an Exhibit pursuant to Item 14(c) of this Report.
21
<PAGE> 23
M. McInnes, H. G. Piper and J. Sherwin Jr. on
June 27, 1989 and Mr. A. C. Bersticker on April
27, 1993 (filed as Exhibit 10c to the Company's
Form 10-Q Quarterly Report for the quarter ended
July 2, 1989), incorporated herein by reference.
(10i) * Directors' Retirement Plan as amended January
26, 1993 (filed as Exhibit 10i to the Company's
Form 10-K Annual Report for the year ended
December 31, 1992), incorporated herein by
reference.
(10j) * Deferred Compensation Plan for Nonemployee
Directors effective January 1, 1992 (filed as
Exhibit I to the Company's Proxy Statement dated
March 6, 1992), incorporated herein by
reference.
(10k) * Form of Trust Agreement between the Company and
National City Bank dated January 1, 1992 on
behalf of NonemployeeDirectors of the Company
(filed as Exhibit 10k to the Company's Form 10-K
Annual Report for the year ended December 31,
1992), incorporated herein by reference.
(10l) * Incentive Compensation Plan adopted December 16,
1991, effective January 1, 1992 (filed as
Exhibit 10l to the Company's Form 10-K Annual
Report for the year ended December 31, 1991),
incorporated herein by reference.
(10m) * Management Performance Compensation Plan adopted
February 22, 1993, effective January 1, 1993
(filed as Exhibit 10m to the Company's Form 10-K
Annual Report for the year ended December 31,
1992), incorporated herein by reference.
(10n) * Supplemental Retirement Plan as amended and
restated December 1, 1992 (filed as Exhibit 10n
to the Company's Form 10-K Annual Report for the
year ended December 31, 1992), incorporated
herein by reference.
(10o) * Form of Trust Agreement between the Company and
Society National Bank dated January 8, 1993
pursuant to the December 1, 1992 amended
Supplemental Retirement Plan (filed as Exhibit
10o to the Company's Form 10-K Annual Report for
the year ended December 31, 1992), incorporated
herein by reference.
(10p) * Employment arrangement between the Company and
Mr. Gordon D. Harnett effective January 22, 1991
(filed as Exhibit 10k to the Company's Form 10-K
Annual Report for the year ended December 31,
1990) incorporated herein by reference.
*Reflects management contract or other compensatory arrangement required to be
filed as an Exhibit pursuant to Item 14(c) of this Report.
22
<PAGE> 24
(10q) * Amendment to the employment arrangement
(effective January 22, 1991) between the Company
and Mr. Gordon D. Harnett (filed as Exhibit 10o
to the Company's Form 10-K Annual Report for the
year ended December 31, 1991), incorporated
herein by reference.
(10r) * Agreement between the Company and H. G. Piper
dated as of January 23, 1990 (filed as Exhibit
10i to the Company's Form 10-K Annual Report for
the year ended December 31, 1989), incorporated
herein by reference.
(10s) * Amendment dated February 19, 1991 to the
agreement between the Company and Mr. H. G.
Piper dated January 23, 1990 (filed as Exhibit
10m to the Company's Form 10-K Annual Report for
the year ended December 31, 1990) incorporated
herein by reference.
(10t) Amendment dated February 27, 1990 to the
Indemnification Agreement between the Company
and H. G. Piper (filed as Exhibit 10l to the
Company's Form 10-K Annual Report for the year
ended December 31, 1989), incorporated herein by
reference.
(10u) * 1979 Stock Option Plan, as amended pursuant to
approval of shareholders on April 21, 1982
(filed as Exhibit 15A to Post-Effective
Amendment No. 3 to Registration Statement No.
2-64080), incorporated herein by reference.
(10v) * 1984 Stock Option Plan as amended by the Board
of Directors on April 18, 1984 and February 24,
1987 (filed as Exhibit 4.4 to Registration
Statement No. 33-28605), incorporated herein by
reference.
(10w) * 1989 Stock Option Plan (filed as Exhibit 4.5 to
Registration Statement No. 33-28605),
incorporated herein by reference.
(10x) * 1990 Stock Option Plan for Nonemployee Directors
(filed as Exhibit 4.6 to Registration Statement
No. 33-35979), incorporated herein by
reference.
(10y) * 1977 Stock Appreciation Rights Plan (filed as
Exhibit 4.6 to Registration Statement No.
33-28605), incorporated herein by reference.
(11) Statement re: calculation of per share earnings
for the years ended December 31, 1993, 1992 and
1991.
*Reflects management contract or other compensatory arrangement required to be
filed as an Exhibit pursuant to Item 14(c) of this Report.
23
<PAGE> 25
(13) Portions of the Annual Report to shareholders for
the year ended December 31, 1993.
(21) Subsidiaries of the registrant.
(23) Consent of Ernst & Young.
(24) Power of Attorney.
(99a) Form 11-K Annual Report for the Brush Wellman Inc.
Savings and Investment Plan for the year ended
December 30, 1993.
(99b) Form 11-K Annual Report for the Williams Advanced
Materials Inc. Savings and Investment Plan for the
year ended December 30, 1993.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the fourth
quarter of the year ended December 31, 1993.
-24-
<PAGE> 26
SIGNATURES
Pursuant to the requirements of Section 13 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. March 25, 1994 BRUSH
WELLMAN INC.
By: /s/ Gordon D. Harnett By: /s/ Clark G. Waite
------------------------------------ -----------------------------
Gordon D. Harnett Clark G. Waite
Chairman of the Board, Senior Vice President and
President and Chief Executive Officer Chief Financial Officer
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.
<TABLE>
<CAPTION>
<S> <C> <C>
GORDON D. HARNETT* Chairman of the Board,
- -------------------------- President, Chief Executive March 25, 1994 Officer and Director
Gordon D. Harnett (Principal Executive Officer)
Clark G. Waite Senior Vice President,
- -------------------------- Chief Financial Officer and March 25, 1994
Clark G. Waite Director
(Principal Financial and Accounting Officer)
ALBERT C. BERSTICKER* Director March 25, 1994
- --------------------------
Albert C. Bersticker
CHARLES F. BRUSH, III* Director March 25, 1994
- --------------------------
Charles F. Brush, III
FRANK B. CARR Director March 25, 1994
- --------------------------
Frank B. Carr
WILLIAM P. MADAR* Director March 25, 1994
- --------------------------
William P. Madar
JULIEN L. McCALL* Director March 25, 1994
- --------------------------
Julien L. McCall
GERALD C. McDONOUGH* Director March 25, 1994
- --------------------------
Gerald C. McDonough
ROBERT M. McINNES* Director March 25, 1994
- --------------------------
Robert M. McInnes
HENRY G. PIPER* Director March 25, 1994
- --------------------------
Henry G. Piper
JOHN SHERWIN, JR.* Director March 25, 1994
- --------------------------
John Sherwin, Jr.
</TABLE>
*The undersigned, by signing his name hereto, does sign and execute
this report on behalf of each of the above-named officers and directors of
Brush Wellman Inc., pursuant to Powers of Attorney executed by each such
officer and director filed with the Securities and Exchange Commission.
By: /s/ Clark G. Waite
-----------------------
Clark G. Waite
March 25, 1994
Attorney-in-Fact
-25-
<PAGE> 27
Page 1 of 2
<TABLE>
SCHEDULE V--PROPERTY, PLANT AND EQUIPMENT
BRUSH WELLMAN AND SUBSIDIARIES
Year ended December 31, 1993
<CAPTION>
COL.A COL.B COL.C COL.D COL.E COL.F
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at Beginning Other Changes--Add Balance at End
CLASSIFICATION of Period Additions at Cost Retirements (Deduct)--Describe of Period
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Mineral claims and leases $ 4,748,000 $ 148,132 $ -0- $ -0- $ 4,896,132
Natural gas properties 601,970 -0- -0- -0- 601,970
Mine development 18,401,573 813,544 5,325,561 -0- 13,889,556
Land 4,399,021 -0- -0- -0- 4,399,021
Land improvements 9,143,111 -0- -0- -0- 9,143,111
Buildings 57,276,359 601,737 8,577 (142,809) 57,726,710
Machinery and equipment 218,947,697 5,001,770 2,688,184 306,849 221,568,132
Leasehold improvements 633,317 185,487 -0- (118,345) 700,459
Furniture and fixtures 6,137,647 221,805 105,776 (309,251) 5,944,425
Computer equipment 5,424,314 599,380 162,643 317,453 6,178,504
Automobiles and trucks 1,029,694 235,051 35,000 3,000 1,232,745
Research equipment 3,168,937 225,990 26,413 (27,445) 3,341,069
Construction in progress 3,060,337 4,660,077(A) -0- -0- 7,720,414
------------- ----------- ---------- --------- ------------
Total $ 332,971,977 $12,692,973 $8,352,154 $ 29,452(B) $337,342,248
============= =========== ========== ========= ============
<FN>
Note A - Net change for the year.
B - Transfers, reclassifications and adjustments
</TABLE>
26
<PAGE> 28
Page 2 of 2
<TABLE>
SCHEDULE V--PROPERTY, PLANT AND EQUIPMENT
BRUSH WELLMAN AND SUBSIDIARIES
Year ended December 31, 1993
<CAPTION>
COL.A COL.B COL.C COL.D COL.E COL.F
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at Beginning Other Changes--Add Balance at End
CLASSIFICATION of Period Additions at Cost Retirements (Deduct)--Describe of Period
-------------------------------------------------------------------------------------------------------------------------
<FN>
Note C - Depreciable lives used in computing the annual provision
for depreciation. See Note A of the Notes to Consolidated
Financial Statements found on page 12 of the annual report
to shareholders.
Land improvements 5 to 25 years
Buildings 10 to 40 years
Leasehold improvements Life of Lease
Machinery and equipment 3 to 15 years
Furniture and fixtures 4 to 15 years
Automobiles and trucks 2 to 8 years
Research equipment 6 to 12 years
</TABLE>
27
<PAGE> 29
Page 1 of 2
<TABLE>
SCHEDULE V--PROPERTY, PLANT AND EQUIPMENT
BRUSH WELLMAN AND SUBSIDIARIES
Year ended December 31, 1992
<CAPTION>
COL.A COL.B COL.C COL.D COL.E COL.F
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at Beginning Other Changes--Add Balance at End
CLASSIFICATION of Period Additions at Cost Retirements (Deduct)--Describe of Period
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Mineral claims and leases $ 4,501,667 $ 246,333 $ -0- $ -0- $ 4,748,000
Natural gas properties 601,970 -0- -0- -0- 601,970
Mine development 17,553,233 848,340 -0- -0- 18,401,573
Land 4,007,495 414,526 -0- (23,000) 4,399,021
Land improvements 6,338,560 2,966,001 126,988 (34,462) 9,143,111
Buildings 55,987,160 3,247,850 978,589 (980,062) 57,276,359
Machinery and equipment 207,557,026 11,658,600 1,444,510 1,176,581 218,947,697
Leasehold improvements 454,186 10,152 53,948 222,927 633,317
Furniture and fixtures 5,793,770 895,818 610,937 58,996 6,137,647
Computer equipment 4,284,086 1,355,583 203,212 (12,143) 5,424,314
Automobiles and trucks 958,377 72,217 900 -0- 1,029,694
Research equipment 3,477,156 138,788 367,992 (79,015) 3,168,937
Construction in progress 10,466,262 (7,402,363)(A) -0- (3,562) 3,060,337
------------- ----------- ---------- --------- ------------
Total $ 321,980,948 $14,451,845 $3,787,076 $ 326,260(B) $332,971,977
============= =========== ========== ========= ============
<FN>
Note A - Net change for the year.
B - Other changes include deductions of $818,000 for property held for resale (reclassified to Other Assets), additions of
$1,248,000 for the Tegmen acquisition and other adjustments of $104,000.
</TABLE>
28
<PAGE> 30
Page 2 of 2
<TABLE>
SCHEDULE V--PROPERTY, PLANT AND EQUIPMENT
BRUSH WELLMAN AND SUBSIDIARIES
Year ended December 31, 1992
<CAPTION>
COL.A COL.B COL.C COL.D COL.E COL.F
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at Beginning Other Changes--Add Balance at End
CLASSIFICATION of Period Additions at Cost Retirements (Deduct)--Describe of Period
-------------------------------------------------------------------------------------------------------------------------
<FN>
Note C - Depreciable lives used in computing the annual provision
for depreciation. See Note A of the Notes to Consolidated
Financial Statements found on page 12 of the annual report
to shareholders.
Land improvements 5 to 25 years
Buildings 10 to 40 years
Leasehold improvements Life of Lease
Machinery and equipment 3 to 15 years
Furniture and fixtures 4 to 15 years
Automobiles and trucks 2 to 8 years
Research equipment 6 to 12 years
</TABLE>
29
<PAGE> 31
Page 1 of 2
<TABLE>
SCHEDULE V--PROPERTY, PLANT AND EQUIPMENT
BRUSH WELLMAN AND SUBSIDIARIES
Year ended December 31, 1991
<CAPTION>
COL.A COL.B COL.C COL.D COL.E COL.F
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at Beginning Other Changes--Add Balance at End
CLASSIFICATION of Period Additions at Cost Retirements (Deduct)--Describe of Period
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Mineral claims and leases $ 4,241,740 $ 259,927 $ -0- $ -0- $ 4,501,667
Natural gas properties 601,970 -0- -0- -0- 601,970
Mine development 11,164,547 6,388,686 -0- -0- 17,553,233
Land 4,187,495 -0- -0- (180,000) 4,007,495
Land improvements 6,155,043 214,279 30,762 -0- 6,338,560
Buildings 55,173,721 865,111 45,112 (6,560) 55,987,160
Machinery and equipment 201,603,329 10,360,328 4,503,302 96,671 207,557,026
Leasehold improvements 501,242 46,814 6,560 (87,310) 454,186
Furniture and fixtures 5,504,715 224,726 149,642 213,971 5,793,770
Computer equipment 3,841,224 695,637 44,098 (208,677) 4,284,086
Automobiles and trucks 873,353 99,170 14,146 -0- 958,377
Research equipment 3,498,849 92,048 113,741 -0- 3,477,156
Construction in progress 9,740,438 744,254(A) -0- (18,430) 10,466,262
------------- ----------- ---------- --------- ------------
Total $ 307,087,666 $19,990,980 $4,907,363 $(190,335)(B) $321,980,948
============= =========== ========== ========= ============
<FN>
Note A - Net change for the year.
B - Other changes include charges of $190,000 for the writedown of impaired assets at Williams Advanced Materials Inc.
</TABLE>
30
<PAGE> 32
Page 2 of 2
<TABLE>
SCHEDULE V--PROPERTY, PLANT AND EQUIPMENT
BRUSH WELLMAN AND SUBSIDIARIES
Year ended December 31, 1991
<CAPTION>
COL.A COL.B COL.C COL.D COL.E COL.F
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at Beginning Other Changes--Add Balance at End
CLASSIFICATION of Period Additions at Cost Retirements (Deduct)--Describe of Period
-------------------------------------------------------------------------------------------------------------------------
<FN>
Note C - Depreciable lives used in computing the annual provision
for depreciation. See Note A of the Notes to Consolidated
Financial Statements found on page 12 of the annual report
to shareholders.
Land improvements 5 to 25 years
Buildings 10 to 40 years
Leasehold improvements Life of Lease
Machinery and equipment 3 to 15 years
Furniture and fixtures 4 to 15 years
Automobiles and trucks 2 to 8 years
Research equipment 6 to 12 years
</TABLE>
31
<PAGE> 33
<TABLE>
SCHEDULE VI--ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
BRUSH WELLMAN AND SUBSIDIARIES
Year ended December 31, 1993
<CAPTION>
COL.A COL. B COL. C COL. D COL.E COL.F
- ----------------------------------------------------------------------------------------------------------------------------------
Balance at Beginning Additions Charged to Other Changes--Add Balance at End
DESCRIPTION of Period Costs and Expenses Retirements (Deduct)--Describe of Period
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Mineral claims and leases $ 1,462,369 $ 66,265 $ -0- $ -0- $ 1,528,634
Natural gas properties 601,970 -0- -0- -0- 601,970
Mine development 7,851,946 3,078,237 5,325,561 -0- 5,604,622
Land improvements 4,366,231 610,355 -0- -0- 4,976,586
Buildings 27,455,565 2,409,733 5,003 (3) 29,860,292
Machinery and equipment 151,515,241 13,330,569 2,193,939 345,670 162,997,541
Leasehold improvements 408,850 232,394 -0- (8,398) 632,846
Furniture and fixtures 4,574,688 339,349 92,530 (506,406) 4,315,101
Computer equipment 3,502,598 795,831 127,775 225,624 4,396,278
Automobiles and trucks 824,398 101,555 35,000 (3,000) 887,953
Research equipment 2,416,680 241,441 26,314 (17,378) 2,614,429
------------ ----------- ---------- --------- ------------
Total $204,980,536 $21,205,729 $7,806,122 $ 36,109(A) $218,416,252
============ =========== ========== ========= ============
<FN>
Note A = Transfers, reclassifications and adjustments
</TABLE>
32
<PAGE> 34
<TABLE>
SCHEDULE VI--ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
BRUSH WELLMAN AND SUBSIDIARIES
Year ended December 31, 1992
<CAPTION>
COL.A COL.B COL.C COL.D COL.E COL.F
- ----------------------------------------------------------------------------------------------------------------------------------
Balance at Beginning Additions Charged to Other Changes--Add Balance at End
DESCRIPTION of Period Costs and Expenses Retirements (Deduct)--Describe of Period
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Mineral claims and leases $ 1,399,669 $ 62,700 $ -0- $ -0- $ 1,462,369
Natural gas properties 601,970 -0- -0- -0- 601,970
Mine development 5,522,298 2,329,648 -0- -0- 7,851,946
Land improvements 3,983,038 543,279 125,624 (34,462) 4,366,231
Buildings 26,565,602 2,224,695 877,826 (456,906) 27,455,565
Machinery and equipment 139,930,913 12,811,480 1,252,834 25,682 151,515,241
Leasehold improvements 392,646 70,152 53,948 -0- 408,850
Furniture and fixtures 4,644,100 564,746 549,903 (84,255) 4,574,688
Computer equipment 3,024,454 667,833 189,300 (389) 3,502,598
Automobiles and trucks 735,170 90,128 900 -0- 824,398
Research equipment 2,601,745 234,330 367,366 (52,029) 2,416,680
------------- ----------- ---------- --------- ------------
Total $ 189,401,605 $19,598,991 $3,417,701 $(602,359)(A) $204,980,536
============= =========== ========== ========== ============
<FN>
Note A = Property held for resale (reclassified to Other Assets) transfers and adjustments.
</TABLE>
33
<PAGE> 35
<TABLE>
SCHEDULE VI--ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
BRUSH WELLMAN AND SUBSIDIARIES
Year ended December 31, 1991
<CAPTION>
COL.A COL.B COL.C COL.D COL.E COL.F
- ---------------------------------------------------------------------------------------------------------------------------------
Balance at Beginning Additions Charged to Other Changes--Add Balance at End
DESCRIPTION of Period Costs and Expenses Retirements (Deduct)--Describe of Period
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Mineral claims and leases $ 1,382,794 $ 16,875 $ -0- $ -0- $ 1,399,669
Natural gas properties 601,970 -0- -0- -0- 601,970
Mine development 4,566,952 955,346 -0- -0- 5,522,298
Land improvements 3,505,458 447,707 3,494 33,367 3,983,038
Buildings 23,723,916 2,367,773 19,482 493,395 26,565,602
Machinery and equipment 119,838,135 14,546,672 3,452,797 8,998,903 139,930,913
Leasehold improvements 227,033 81,100 6,560 91,073 392,646
Furniture and fixtures 4,170,940 448,373 134,134 158,921 4,644,100
Computer equipment 2,345,702 623,164 12,593 68,181 3,024,454
Automobiles and trucks 646,105 70,636 -0- 18,429 735,170
Research equipment 2,443,536 247,891 89,682 -0- 2,601,745
------------ ----------- ---------- ---------- ------------
Total $163,452,541 $19,805,537 $3,718,742 $9,862,269(A) $189,401,605
============ =========== ========== ========== ============
<FN>
Note A = Other changes include additions of $6,070,000 and $3,782,000 for the write-down of impaired assets at Technical
Materials, Inc. and Williams Advanced Materials Inc., respectively.
</TABLE>
34
<PAGE> 36
<TABLE>
SCHEDULE VIII--VALUATION AND QUALIFYING ACCOUNTS
BRUSH WELLMAN AND SUBSIDIARIES
Years ended December 31, 1993, 1992 and 1991
<CAPTION>
COL. A COL. B COL. C COL. D COL. E
- ------------------------------------------------------------------------------------------------------------------------------------
ADDITIONS
------------------------------------
(1) (2)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at Beginning Charged to Costs Charged to Other Balance at End
DESCRIPTION of Period and Expenses Accounts--Describe Deductions--Describe of Period
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1993
Deducted from asset accounts:
Allowance for doubtful
accounts receivable $ 781,389 $ 234,392 $ -0- $ 110,868(A) $ 904,913
Inventory reserves and
obsolescence $ -0- $ 3,187,135 $ -0- $ - 0 - $3,187,135
Allowance for deferred tax assets $ -0- $ -0- $ 1,540,000(B) $ -0- $1,540,000
Year ended December 31, 1992
Deducted from asset accounts:
Allowance for doubtful
accounts receivable $ 792,162 $ 5,245 $ -0- $ 16,018(A) $ 781,389
Year ended December 31, 1991
Deducted from asset accounts:
Allowance for doubtful
accounts receivable $ 698,901 $ 536,143 $ -0- $ 442,882(A) $ 792,162
<FN>
Note A - Bad debts written off.
Note B - The Company adopted SFAS No. 109, "Accounting for Income Taxes," effective January 1, 1993. Under Statement 109, a
deferred tax asset of $1,540,000 was recorded for net operating loss carryforwards. Since it is unknown as to whether
the deferred tax asset would be utilized, a valuation allowance was recorded to offset the asset.
</TABLE>
35
<PAGE> 37
<TABLE>
SCHEDULE IX -- SHORT-TERM BORROWINGS
BRUSH WELLMAN AND SUBSIDIARIES
Year ended December 31, 1993
<CAPTION>
COL.A COL.B COL.C COL.D COL.E COL.F
- ------------------------------------------------------------------------------------------------------------------------------------
Weighted Maximum Average Weighted
Average Amount Amount Average
CATEGORY OF AGGREGATE Balance at End Interest Outstanding Outstanding Interest Rate
SHORT-TERM BORROWINGS of Period Rate During the Period During the Period During the Period
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1993
Notes payable $16,263,373(A) 2.7% $27,365,696 $ 20,644,171(B) 3.7%(C)
Year ended December 31, 1992
Notes payable $19,805,811(A) 5.0% $27,177,508 $ 22,878,725(B) 5.6%(C)
Year ended December 31, 1991
Notes payable $24,040,488(A) 5.9% $27,581,143 $ 24,119,504(B) 6.2%(C)
<FN>
Note A - Short-term borrowings include borrowings incurred by foreign subsidiaries payable in foreign currency, the current portion
of long-term notes payable and debt denominated in precious metal, primarily gold.
Note B - The average amount outstanding during the period was computed by dividing the total of daily outstanding principal
balances by 365 days in 1993 and 1991 and 366 days in 1992.
Note C - The weighted average interest rate during the period was computed by dividing interest expense by the related average
short-term debt outstanding.
</TABLE>
36
<PAGE> 38
<TABLE>
SCHEDULE X--SUPPLEMENTARY INCOME STATEMENT INFORMATION
BRUSH WELLMAN INC. AND SUBSIDIARIES
Years Ended December 31, 1993, 1992 and 1991
<CAPTION>
- -----------------------------------------------------------------------------------------------------
COL. A COL.B
- -----------------------------------------------------------------------------------------------------
ITEM CHARGED TO COSTS AND EXPENSES
- -----------------------------------------------------------------------------------------------------
Years ended December 31,
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Maintenance and repairs $17,124,857 $ 15,633,149 $19,141,792
Taxes, other than payroll
and income taxes $ 2,899,736 $ 2,985,743 $ 3,097,285
Depreciation and amortization
of intangible assets:
Technology $ 13,858 $ 18,000 $ 2,850,315(A)
Goodwill $ 139,084 $ 315,088 $12,238,404(A)
<FN>
Note: Amounts for depreciation and amortization of pre-operating costs and similar deferrals, royalties and advertising are
not presented as such amounts are less than 1% of total sales and revenues. Separate categories of taxes included in
the total are less than 1% of total sales and revenues.
(A) The increase in goodwill and technology amortization in 1991 is due to the writedown of asset values at Williams Advanced
Materials Inc. and Technical Materials Inc.
</TABLE>
37
<PAGE> 39
<TABLE>
INDEX TO EXHIBITS
-----------------
<CAPTION>
Sequential
Exhibit Number Description of Exhibit Page Number
- -------------- ---------------------- -----------
<S> <C>
(3a) Amended Articles of Incorporation of the Company as amended February 28, 1989 (filed as
Exhibit 3a to the Company's Form 10-K Annual Report for the year ended December 31,
1988), incorporated herein by reference.
(3b) Regulations of the Company as amended April 25, 1989 (filed as Exhibit 3 to the
Company's Form 10-Q Quarterly Report for the quarter ended July 2, 1989) and further
amended April 27, 1993 (filed as Exhibit 3ii to the Company's Form 10-Q Quarterly
Report for the quarter ended April 4, 1993), incorporated herein by reference.
(4a) Common Stock Certificate of the Company (filed as Exhibit 4c to Post-Effective
Amendment No. 2 to Registration Statement No. 2-64080), incorporated herein by
reference.
(4b) Credit Agreement dated as of December 23, 1991 between the Company and National City
Bank acting for itself and as agent for three other banking institutions (filed as
Exhibit 4b to the Company's Form 10-K Annual Report for the year ended December 31,
1991), incorporated herein by reference.
(4c) Rights Agreement between the Company and Society National Bank (formerly Ameritrust
Company National Association) as amended February 28, 1989 (filed as Exhibit 4c to the
Company's Form 10-K Annual Report for the year ended December 31, 1988), incorporated
herein by reference.
(4d) Issuing and Paying Agency Agreement dated as of February 1, 1990, including a specimen
form of a medium term note issued thereunder, between the Company and Morgan Guaranty
Trust Company of New York (filed as Exhibit 4d to the Company's Form 10-K Annual Report
for the year ended December 31, 1989), incorporated herein by reference.
(4e) Pursuant to Regulation S-K, Item 601-(b)(4), the Company agrees to furnish to the
Commission, upon its request, a copy of the instruments defining the rights of holders
of long-term debt of the Company that are not being filed with this report.
</TABLE>
<PAGE> 40
<TABLE>
<CAPTION>
Sequential
Exhibit Number Description of Exhibit Page Number
- -------------- ---------------------- -----------
<S> <C>
(10a) Employment Agreement entered into by the Company and Mr. Gordon D. Harnett on March 20,
1991 (filed as Exhibit 10a to the Company's Form 10-K Annual Report for the year ended
December 31, 1990), incorporated herein by reference.
(10b) Form of Employment Agreement entered into by the Company and Messrs. Waite, Brophy,
Hanes, Harlan, Rozek and Sandor on February 20, 1989 (filed as Exhibit 10j to the
Company's Form 10-K Annual Report for the year ended December 31, 1988), incorporated
herein by reference.
(10c) Form of Amendment to the Employment Agreement (dated February 20, 1989) entered into by
the Company and Messrs. Waite, Brophy, Hanes, Harlan, Rozek and Sandor dated February
28, 1991 (filed as Exhibit 10c to the Company's Form 10-K Annual Report for the year
ended December 31, 1990), incorporated herein by reference.
(10d) Form of Employment Agreement entered into by the Company and Mr. Daniel A. Skoch on January
28, 1992 and Mr. Stephen Freeman dated August 3, 1993 (filed as Exhibit 10d to the
Company's Form 10-K Annual Report for the year ended December 31, 1991), incorporated
herein by reference.
(10e) Form of Trust Agreement between the Company and Society National Bank (formerly
Ameritrust Company National Association) on behalf of Messrs. Waite, Brophy, Hanes,
Harlan, Rozek and Sandor dated February 20, 1989, Mr. Harnett dated March 20, 1991 and
Mr. Skoch dated January 28, 1992 and Mr. Stephen Freeman dated August 3, 1993 (filed as
Exhibit 10k to the Company's Form 10-K Annual Report for the year ended December 31,
1988), incorporated herein by reference.
(10f) Form of Indemnification Agreement entered into by the Company and Mr. C. G. Waite on
June 27, 1989 and Mr. G. D. Harnett on March 20, 1991 (filed as Exhibit 10a to the
Company's Form 10-Q Quarterly Report for the quarter ended July 2, 1989), incorporated
herein by reference.
(10g) Form of Indemnification Agreement entered into by the Company and Messrs. J. H. Brophy,
A. J. Sandor, C. B. Harlan, H. D. Hanes, and R. H. Rozek on June 27, 1989, Mr. D. A.
Skoch on January 28, 1992 and Mr. Stephen Freeman dated August 3, 1993 (filed as
Exhibit 10b to the Company's Form 10-Q Quarterly Report for the quarter ended July 2,
1989), incorporated herein by reference.
</TABLE>
<PAGE> 41
<TABLE>
<CAPTION>
Sequential
Exhibit Number Description of Exhibit Page Number
- -------------- ---------------------- -----------
<S> <C>
(10h) Form of Indemnification Agreement entered into by the Company and Messrs. C. F. Brush,
F. B. Carr, W. E. MacDonald, J. L. McCall, W. P. Madar, G. C. McDonough, R. M. McInnes,
H. G. Piper and J. Sherwin Jr. on June 27, 1989 and Mr. A. C. Bersticker on April 27,
1993 (filed as Exhibit 10c to the Company's Form 10-Q Quarterly Report for the quarter
ended July 2, 1989), incorporated herein by reference.
(10i) Directors' Retirement Plan as amended January 26, 1993 (filed as Exhibit 10i to the
Company's Form 10-K Annual Report for the year ended December 31, 1992), incorporated
herein by reference.
(10j) Deferred Compensation Plan for Nonemployee Directors effective January 1, 1992 (filed
as Exhibit I to the Company's Proxy Statement dated March 6, 1992), incorporated herein
by reference.
(10k) Form of Trust Agreement between the Company and National City Bank N.A. dated January
1, 1992 on behalf of Nonemployee Directors of the Company (filed as Exhibit 10i to the
Company's Form 10-K Annual Report for the year ended December 31, 1992), incorporated
herein by reference.
(10l) Incentive Compensation Plan adopted December 16, 1991, effective January 1, 1992 (filed
as Exhibit 10l to the Company's Form 10-K Annual Report for the year ended December 31,
1991), incorporated herein by reference.
(10m) Management Performance Compensation Plan adopted February 22, 1993, effective January
1, 1993 (filed as Exhibit 10i to the Company's Form 10-K Annual Report for the year
ended December 31, 1992), incorporated herein by reference.
(10n) Supplemental Retirement Plan as amended and restated December 1, 1992 (filed as Exhibit
10i to the Company's Form 10-K Annual Report for the year ended December 31, 1992),
incorporated herein by reference.
(10o) Form of Trust Agreement between the Company and Society National Bank dated January 8,
1993 pursuant to the December 1, 1992 amended Supplemental Retirement Plan (filed as
Exhibit 10i to the Company's Form 10-K Annual Report for the year ended December 31,
1992), incorporated herein by reference.
</TABLE>
<PAGE> 42
<TABLE>
<CAPTION>
Sequential
Exhibit Number Description of Exhibit Page Number
- -------------- ---------------------- -----------
<S> <C>
(10p) Employment arrangement between the Company and Mr. Gordon D. Harnett effective January
22, 1991 (filed as Exhibit 10k to the Company's Form 10-K Annual Report for the year
ended December 31, 1990) incorporated herein by reference.
(10q) Amendment to the employment arrangement (effective January 22, 1991) between the
Company and Mr. Gordon D. Harnett (filed as Exhibit 10o to the Company's Form 10-K
Annual Report for the year ended December 31, 1991), incorporated herein by reference.
(10r) Agreement between the Company and H. G. Piper dated as of January 23, 1990 (filed as
Exhibit 10i to the Company's Form 10-K Annual Report for the year ended December 31,
1989), incorporated herein by reference.
(10s) Amendment dated February 19, 1991 to the agreement between the Company and Mr. H. G.
Piper dated January 23, 1990 (filed as Exhibit 10m to the Company's Form 10-K Annual
Report for the year ended December 31, 1990) incorporated herein by reference.
(10t) Amendment dated February 27, 1990 to the Indemnification Agreement between the Company
and H. G. Piper (filed as Exhibit 10l to the Company's Form 10-K Annual Report for the
year ended December 31, 1989), incorporated herein by reference.
(10u) 1979 Stock Option Plan, as amended pursuant to approval of shareholders on April 21,
1982 (filed as Exhibit 15A to Post-Effective Amendment No. 3 to Registration Statement
No. 2-64080), incorporated herein by reference.
(10v) 1984 Stock Option Plan as amended by the Board of Directors on April 18, 1984 and
February 24, 1987 (filed as Exhibit 4.4 to Registration Statement No. 33-28605),
incorporated herein by reference.
(10w) 1989 Stock Option Plan (filed as Exhibit 4.5 to Registration Statement No. 33-28605),
incorporated herein by reference.
(10x) 1990 Stock Option Plan for Nonemployee Directors (filed as Exhibit 4.6 to Registration
Statement No. 33-35979), incorporated herein by reference.
</TABLE>
<PAGE> 43
<TABLE>
<CAPTION>
Sequential
Exhibit Number Description of Exhibit Page Number
- -------------- ---------------------- -----------
<S> <C>
(10y) 1977 Stock Appreciation Rights Plan (filed as Exhibit 4.6 to Registration Statement No.
33-28605), incorporated herein by reference.
(11) Statement re: calculation of per share earnings for the years ended December 31, 1993,
1992 and 1991.
(13) Portions of the Annual Report to shareholders for the year ended December 31, 1993.
(21) Subsidiaries of the registrant.
(23) Consent of Ernst & Young.
(24) Power of Attorney.
(99a) Form 11-K Annual Report for the Brush Wellman Inc. Savings and Investment Plan for the
year ended December 30, 1993.
(99b) Form 11-K Annual Report for the Williams Advanced Materials Inc. Savings and Investment
Plan for the year ended December 30, 1993.
</TABLE>
<PAGE> 1
EXHIBIT 11
<TABLE>
BRUSH WELLMAN INC. AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Primary:
Average shares outstanding 16,087,250 16,080,554 16,069,902
Dilutive stock options based
on the treasury stock method
using average market price 9,442 45,233 0
------------ ------------ -------------
TOTALS 16,096,692 16,125,787 16,069,902
============ ============ =============
Net Income (Loss) before
cumulative effect of
accounting change $ 6,458,000 $ 10,500,000 ($ 27,547,000)
Cumulative effect of change
in accounting for post-
retirement benefits 0 0 ($ 16,471,000)
------------ ------------ ------------
Net Income (Loss) $ 6,458,000 $ 10,500,000 ($ 44,018,000)
============ ============ =============
Per share amount:
Before accounting change $ .40 $ .65 $ (1.72)
Cumulative effect of change
in accounting for post-
retirement benefits 0 0 (1.02)
------------ ------------ ------------
Net Income (Loss) Per Share
of Common Stock $ .40 $ .65 $ (2.74)
============ ============ =============
Fully diluted:
Average shares outstanding 16,087,250 16,080,554 16,069,902
Dilutive stock options based
on the treasury stock method
using year-end market price,
if higher than the average
market price 20,603 45,233 0
------------ ------------ -------------
TOTALS 16,107,853 16,125,787 16,069,902
============ ============ =============
Net Income (Loss) before
cumulative effect of
accounting change $ 6,458,000 $ 10,500,000 ($ 27,547,000)
Cumulative effect of change
in accounting for post-
retirement benefits 0 0 ($ 16,471,000)
------------ ------------ -------------
Net Income (Loss) $ 6,458,000 $ 10,500,000 ($ 44,018,000)
============ ============ =============
Per share amount:
Before accounting change $ .40 $ .65 $ (1.72)
Cumulative effect of change
in accounting for post-
retirement benefits 0 0 (1.02)
------------ ------------ -------------
Net Income (Loss) Per Share
of Common Stock $ .40 $ .65 $ (2.74)
============ ============ =============
</TABLE>
<PAGE> 1
<TABLE>
EXHIBIT 13
CONSOLIDATED STATEMENTS OF INCOME
Brush Wellman Inc. and Subsidiaries
Years ended December 31, 1993, 1992 and 1991
(Dollars in thousands except per share amounts)
<CAPTION>
1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
Net sales ....................................................... $295,478 $265,034 $267,473
Costs and expenses:
Cost of sales ................................................ 227,686 192,944 202,080
Selling, administrative and general expenses ................. 47,814 46,576 47,837
Research and development expenses ............................ 7,121 7,294 7,625
Interest expense ............................................. 2,952 3,206 3,755
Impairment and restructuring charge .......................... - - 39,333
Other - net .................................................. 2,199 1,271 2,996
-------- -------- --------
287,772 251,291 303,626
-------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES 7,706 13,743 (36,153)
Income taxes:
Currently payable ............................................. 3,597 3,407 1,469
Deferred ...................................................... (2,349) (164) (10,075)
-------- -------- --------
1,248 3,243 (8,606)
-------- -------- --------
Net Income (Loss) Before Cumulative Effect
of Accounting Change ..................................... 6,458 10,500 (27,547)
Cumulative effect of change in accounting for
postretirement benefits (Note J) .............................. - - (16,471)
-------- -------- --------
NET INCOME (LOSS) $6,458 $10,500 ($44,018)
-------- -------- --------
-------- -------- --------
Net income (loss) per share of Common Stock:
Before accounting change ................................... $0.40 $0.65 ($1.72)
Cumulative effect of change in accounting for
postretirement benefits .................................. - - (1.02)
-------- -------- --------
Net Income (Loss) Per Share of Common Stock: ............... $0.40 $0.65 ($2.74)
-------- -------- --------
-------- -------- --------
Average number of shares of Common Stock outstanding ............ 16,107,853 16,125,787 16,069,902
<FN>
See notes to consolidated financial statements.
</TABLE>
8
<PAGE> 2
CONSOLIDATED STATEMENTS OF CASH FLOWS
Brush Wellman Inc. and Subsidiaries
Years ended December 31, 1993, 1992, and 1991
(Dollars in thousands)
<TABLE>
<CAPTION>
1993 1992 1991
------- ------- --------
<S> <C> <C> <C>
NET INCOME (LOSS) ............................................. $ 6,458 $10,500 ($44,018)
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
PROVIDED FROM OPERATING ACTIVITIES:
Depreciation, depletion and amortization .................... 18,642 17,851 21,804
Amortization of mine development ............................ 3,078 2,329 955
Impairment charges .......................................... - - 23,844
Cumulative effect of accounting change ...................... - - 16,471
Decrease (Increase) in accounts receivable .................. (9,941) 1,403 2,246
Decrease (Increase) in inventory ............................ 6,416 (1,586) 2,703
Decrease (Increase) in prepaid and other current assets ..... (112) 559 (1,448)
Increase (Decrease) in accounts payable and accrued expenses (4,721) (3,651) 5,295
Increase (Decrease) in interest and taxes payable ........... (408) 3,018 (3,184)
Increase (Decrease) in deferred income tax .................. (1,554) (149) (3,453)
Increase (Decrease) in other long-term liabilities .......... 332 1,805 5,470
Other - net ................................................. 144 (1,216) 273
------- ------- --------
NET CASH PROVIDED FROM OPERATING ACTIVITIES 18,334 30,863 26,958
Cash Flows From Investing Activities:
Payments for purchase of property, plant and equipment ...... (11,901) (13,604) (13,605)
Payments for mine development ............................... (814) (848) (6,389)
Payments for acquisition of business ........................ - (2,296) -
Other investments - net ..................................... 645 (4,000) (4,184)
Borrowing from Company-owned life insurance policy .......... 14,885 - -
------- ------- --------
NET CASH PROVIDED FROM INVESTING ACTIVITIES 2,815 (20,748) (24,178)
Cash Flows From Financing Activities:
Proceeds from (repayment of) short-term debt - net .......... (5,101) (3,138) (642)
Proceeds from issuance of long-term debt .................... - 428 32,035
Repayment of long-term debt ................................. (9,000) (1,574) (22,902)
Issuance of Common Stock under stock option plans ........... 10 244 6
Purchase of Common Stock for treasury ....................... - - (137)
Payments of dividends ....................................... (4,183) (3,218) (11,573)
------- ------- --------
NET CASH USED IN FINANCING ACTIVITIES (18,274) (7,258) (3,213)
Effects of Exchange Rate Changes 625 (321) 169
------- ------- --------
NET CHANGE IN CASH AND CASH EQUIVALENTS 3,500 2,536 (264)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 4,190 1,654 1,918
------- ------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $7,690 $4,190 $1,654
------- ------- --------
------- ------- --------
<FN>
See notes to consolidated financial statements.
</TABLE>
9
<PAGE> 3
CONSOLIDATED BALANCE SHEETS
Brush Wellman Inc. and Subsidiaries
December 31, 1993 and 1992
(Dollars in thousands)
<TABLE>
<CAPTION>
1993 1992
-------- --------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents ............................................... $7,690 $4,190
Accounts receivable
(less allowance of $905 for 1993 and $781 for 1992) ................... 46,462 36,388
Inventories ............................................................. 86,477 92,893
Prepaid expenses and deferred income taxes .............................. 15,595 15,011
-------- --------
TOTAL CURRENT ASSETS 156,224 148,482
OTHER ASSETS .............................................................. 16,231 31,284
PROPERTY, PLANT AND EQUIPMENT
Land .................................................................... 4,399 4,399
Buildings ............................................................... 67,570 66,419
Machinery and equipment ................................................. 238,265 235,342
Construction in progress ................................................ 7,720 3,060
Allowances for depreciation and impairment .............................. (210,681) (195,064)
-------- --------
107,273 114,156
Mineral resources ....................................................... 5,498 5,350
Mine development ........................................................ 13,890 18,401
Allowances for amortization and depletion ............................... (7,735) (9,916)
-------- --------
11,653 13,835
-------- --------
PROPERTY, PLANT AND EQUIPMENT-NET 118,926 127,991
GOODWILL .................................................................. 1,991 2,282
-------- --------
$293,372 $310,039
-------- --------
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term debt ......................................................... $16,263 $19,806
Accounts payable ........................................................ 5,427 7,565
Salaries and wages ...................................................... 5,438 6,147
Taxes other than income taxes ........................................... 2,209 2,179
Other liabilities and accrued items ..................................... 13,175 14,882
Dividends payable ....................................................... 804 1,769
Income taxes ............................................................ 7,636 7,518
-------- --------
TOTAL CURRENT LIABILITIES 50,952 59,866
OTHER LONG-TERM LIABILITIES ............................................... 40,663 40,332
LONG-TERM DEBT ............................................................ 24,000 33,808
DEFERRED INCOME TAXES ..................................................... 5,682 7,209
SHAREHOLDERS' EQUITY
Common Stock, $1 par value
Authorized 45,000,000 shares; issued 21,180,710 shares
(21,179,810 for 1992) ................................................. 21,181 21,180
Additional paid-in capital .............................................. 43,790 43,781
Retained income ......................................................... 188,978 185,737
-------- --------
253,949 250,698
Less Common Stock in treasury, 5,093,295 shares ......................... 81,874 81,874
-------- --------
TOTAL SHAREHOLDERS' EQUITY 172,075 168,824
-------- --------
$293,372 $310,039
-------- --------
-------- --------
<FN>
See notes to consolidated financial statements.
</TABLE>
10
<PAGE> 4
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Brush Wellman Inc. and Subsidiaries
Years ended December 31, 1993, 1992 and 1991
(Dollars in thousands except per share amounts)
<TABLE>
<CAPTION>
ADDITIONAL COMMON
COMMON PAID-IN RETAINED STOCK IN
STOCK CAPITAL INCOME TREASURY
------------------------------------------------
<S> <C> <C> <C> <C>
BALANCES AT JANUARY 1, 1991 $21,162 $43,549 $232,917 $81,737
Net loss ............................................................... (44,018)
Declared dividends $.59 per share ...................................... (9,481)
Proceeds from sale of 600 shares under option plans .................... 1 5
Purchase of shares for treasury ........................................ 137
Foreign currency translation adjustment ................................ 3
------- ------- -------- -------
BALANCES AT DECEMBER 31, 1991 21,163 43,554 179,421 81,874
Net income ............................................................. 10,500
Declared dividends $.26 per share ...................................... (4,184)
Proceeds from sale of 16,900 shares under option plans ................. 17 202
Income tax benefit from employees' stock options ....................... 25
------- ------- -------- -------
BALANCES AT DECEMBER 31, 1992 21,180 43,781 185,737 81,874
Net income ............................................................. 6,458
Declared dividends $.20 per share ...................................... (3,217)
Proceeds from sale of 900 shares under option plans .................... 1 9
------- ------- -------- -------
BALANCES AT DECEMBER 31, 1993 $21,181 $43,790 $188,978 $81,874
------- ------- -------- -------
------- ------- -------- -------
<FN>
See notes to consolidated financial statements.
</TABLE>
11
<PAGE> 5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Brush Wellman Inc. and Subsidiaries
December 31, 1993
The Company is in the business of manufacturing and selling engineered
materials to industrial customers throughout the world.
NOTE A - ACCOUNTING POLICIES
CONSOLIDATION: The consolidated financial statements include the accounts of
the Company and its subsidiaries, all of which are wholly owned. Investments
in affiliates (20% to 50% ownership) are accounted for by the equity method;
other investments are carried at cost.
CASH EQUIVALENTS: All highly liquid investments with a maturity of three
months or less when purchased are considered to be cash equivalents.
INVENTORIES: Inventories are stated at the lower of cost or market. The cost
of domestic inventories except ore and supplies is principally determined using
the last-in, first-out (LIFO) method. The remaining inventories are stated
principally at average cost.
PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment is stated on the
basis of cost. Depreciation is computed principally by the straight-line
method, except certain facilities for which depreciation is computed by the
sum-of-the-years digits method. An impairment reserve is provided when a
determination is made that the carrying value of an asset will not be realized
based on estimated future cash flows.
INTANGIBLE ASSETS: The cost of intangible assets is amortized by the
straight-line method over the periods estimated to be benefitted. Goodwill
is amortized over periods ranging from ten to forty years.
INCOME TAXES: Effective January 1, 1993, the Company adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes." This
statement requires that deferred income taxes reflect the tax consequences on
future years of differences between the tax bases of assets and liabilities and
their financial reporting amounts. The adoption of this standard did not have
a significant effect on the consolidated financial statements.
RECLASSIFICATION: Certain amounts in prior years have been reclassified to
conform with the 1993 consolidated financial statement presentation.
NET INCOME PER SHARE: Net income per share is based on the weighted average
number of outstanding shares of Common Stock including common stock equivalents
(stock options) as appropriate under the treasury stock method.
NOTE B - IMPAIRMENT AND RESTRUCTURING CHARGE
In 1991, the Company recorded a $39,333,000 pre-tax charge ($30,751,000 or
$1.91 per share after taxes) related to the write-down of asset values
associated with prior acquisitions and provisions to cover costs associated
with severance, early retirement, and environmental matters. The write-downs
reflected changed market conditions and circumstances that permanently impaired
asset carrying values. The restructuring actions were completed in 1992 with
no further impact on net income.
NOTE C - ACQUISITIONS
In January 1992, the Company acquired for cash and notes the remaining common
stock of Tegmen Corporation. This transaction was accounted for as a purchase,
and the pro forma financial effect was not material.
NOTE D - INVENTORIES
Inventories in the consolidated balance sheets are summarized as follows:
<TABLE>
<CAPTION>
December 31
(Dollars in thousands) 1993 1992
---- ----
<S> <C> <C>
Principally average cost:
Raw materials and supplies ........................................ $ 19,431 $ 19,485
In process ........................................................ 50,349 56,025
Finished .......................................................... 33,720 35,445
--------- ---------
103,500 110,955
Excess of average cost over LIFO
inventory value ................................................... 17,023 18,062
--------- ---------
$ 86,477 $ 92,893
======== ========
</TABLE>
Inventories aggregating $59,404,000 and $58,632,000 are stated at LIFO at
December 31, 1993 and 1992, respectively.
NOTE E - INTEREST
Interest expense associated with active construction and mine development
projects is capitalized and amortized over the future useful lives of the
related assets. Interest paid was $3,184,000, $3,861,000 and $4,165,000 in
1993, 1992 and 1991, respectively. Interest costs capitalized and the amounts
amortized are as follows:
<TABLE>
<CAPTION>
(Dollars in thousands) 1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Interest incurred ................................ $3,177 $3,837 $4,409
Less capitalized interest ........................ 225 631 654
------ -------- --------
$2,952 $3,206 $3,755
======= ====== ======
Amortization, included principally
in cost of sales ................................ $ 639 $ 583 $ 516
====== ====== ======
</TABLE>
NOTE F - DEBT
A summary of long-term debt follows:
<TABLE>
<CAPTION>
December 31
(Dollars in thousands) 1993 1992
---- ----
<S> <C> <C>
9.53% - 9.68% medium term notes,
$5,000,000 payable in each of 1995,
1997 and 2000 ................................................... $15,000 $15,000
4.4% notes payable to bank under
revolving credit agreement ...................................... -- 9,000
7.25% industrial development
revenue bonds payable in installments
beginning in 2005 ............................................... 3,000 3,000
5.45% - 6.45% industrial development
revenue bonds payable in equal
installments in 1996 through 2000 ............................... 4,000 4,000
4.90% note payable in yen in equal
installments through 1997 ........................................ 2,000 2,370
Other .............................................................. -- 438
-------- --------
$24,000 $33,808
======= ========
</TABLE>
12
<PAGE> 6
The Company has a credit agreement with three banks which provides a maximum
availability of $40,000,000 on a revolving credit basis through March 31, 1995.
Borrowings may be made under a number of rate options. Commitment fees are
required to be paid on the unused portion of the credit at an annual rate of
0.25%.
The Company has a private placement agreement whereby the Company can issue up
to an aggregate of $75,000,000 of medium-term notes ($15,000,000 outstanding at
December 31, 1993). The notes bear a fixed interest rate and may have
maturities from nine months to thirty years from date of issue as agreed upon
in each case by the purchaser and the Company.
Included in short-term debt is $15,786,000 outstanding under lines of credit
totaling $69,524,000. Of the amount outstanding, $5,796,000 is payable in
foreign currencies and $9,990,000 is denominated in precious metal, primarily
gold.
The loan agreements include certain restrictive covenants covering the
incurrence of additional debt, interest coverage, and maintenance of working
capital and tangible net worth (as defined).
The carrying amounts of the Company's short-term borrowings approximate their
fair value. The fair value of the Company's long-term debt at December 31,
1993 is estimated to be $25,900,000. This amount was determined using
discounted cash flow analysis based on the Company's current incremental
borrowing rates for similar types of borrowing arrangements.
NOTE G - CAPITAL STOCK
The Company has 5,000,000 shares of Serial Preferred Stock authorized (no par
value), none of which has been issued. Certain terms of the Serial Preferred
Stock, including dividends, redemption and conversion, will be determined by
the Board of Directors prior to issuance.
On January 26, 1988, the Company's Board of Directors declared a dividend of
one preferred stock purchase right for each outstanding share of Common Stock.
Each right entitles the shareholder to buy one one-hundredth of a share of
Serial Preferred Stock, Series A, at an initial exercise price of $100.
450,000 unissued shares of Serial Preferred Stock have been designated as
Series A Preferred Stock. Each share of Series A Preferred Stock will be
entitled to participate in dividends on an equivalent basis with one hundred
shares of Brush Wellman Common Stock. Each share of Series A Preferred Stock
will be entitled to one vote. The rights are not exercisable and will not be
evidenced by separate right certificates until a specified time after any
person or group acquires beneficial ownership of 20% or more (or announces a
tender offer for 20% or more) of Brush Wellman Common Stock. The rights expire
on January 26, 1998, and can be redeemed for 3 cents per right under certain
circumstances.
The 1989 Stock Option Plan authorizes the granting of options for shares of
Common Stock at not less than the fair market value of the shares at the date
of grant. Options may be qualified or non-qualified, or a combination thereof.
Options outstanding under the 1989 plan and previous plans generally become
exercisable over a four-year period and expire ten years from the date of the
grant.
The 1990 Stock Option Plan for Non-Employee Directors provides for a one-time
grant of 5,000 options to each non-employee director at not less than the fair
market value of the shares at the date of the grant. Options are non-qualified
and become exercisable six months after the date of grant. The options
generally expire ten years after the date they were granted.
The Company has a plan authorizing the granting of stock appreciation rights
related to options granted under any stock option plan. Such rights permit an
optionee, by surrendering all or a portion of an option, to receive an amount
equal to 100% (or such lesser percentage as the Organization and Compensation
Committee of the Board of Directors may determine) of the excess at date of
exercise of the market price of the Common Stock over the option price. Such
amount may be paid in cash, Common Stock or in such a manner as the Committee
may determine. During 1993, 1992 and 1991 no stock appreciation rights were
granted nor were exercised. At December 31, 1993 no stock appreciation rights
were outstanding and 694,050 stock appreciation rights were available for
future grants.
A summary of option activity during the years 1993, 1992 and 1991 follows:
<TABLE>
<CAPTION>
Shares Option Prices
------------- -------------------
<S> <C> <C>
Outstanding at January 1, 1991 ..................... 1,375,715 $10.34 to $38.94
Granted ............................................ 225,000 $12.00 to $16.25
Exercised .......................................... (600) $10.34
Cancelled .......................................... (50,000) $14.50 to $38.94
-----------
Outstanding at December 31, 1991 ................... 1,550,115 $12.00 to $38.94
Granted ............................................ 252,000 $14.00 to $17.63
Exercised .......................................... (16,900) $12.00 to $14.50
Cancelled .......................................... (17,400) $12.00 to $38.94
-----------
Outstanding at December 31, 1992 ................... 1,767,815 $12.00 to $38.94
Granted ............................................ 257,250 $11.81 to $13.56
Exercised .......................................... (900) $12.00 to $14.50
Cancelled .......................................... (280,075) $12.00 to $38.94
-----------
Outstanding at December 31, 1993 ................... 1,744,090 $11.81 to $38.94
===========
</TABLE>
At December 31, 1993, options for 1,377,160 shares (1,402,615 shares at
December 31, 1992) were exercisable, and there were 112,275 shares (89,450 at
December 31, 1992) available for future grants.
13
<PAGE> 7
NOTE H - INCOME TAXES
As discussed in Note A, the Company adopted SFAS No. 109, "Accounting for
Income Taxes," effective January 1, 1993.
A reconciliation of the federal statutory and effective income tax rates
follows:
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Federal statutory rate (benefit) .............................. 34.0% 34.0% (34.0)%
State and local income taxes, net
of federal tax effect ....................................... 2.7 3.2 0.7
Effect of excess of percentage
depletion over cost depletion ............................... (15.3) (9.5) (3.5)
Company-owned life insurance .................................. (7.2) (3.4) (1.2)
Difference due to book and tax
basis of assets of acquired
businesses .................................................. 1.1 2.6 14.1
Taxes on foreign income - net ................................. (1.9) (4.1) --
Other items ................................................... 2.8 0.8 0.1
------ -------- -------
Effective tax rate (benefit) ............................. 16.2% 23.6% (23.8%)
====== ====== ========
</TABLE>
Included in income taxes currently payable, as shown in the Consolidated
Statements of Income, are $312,000, $658,000 and $415,000 of state and local
income taxes in 1993, 1992 and 1991, respectively.
The Company made domestic and foreign income tax payments, net of refunds, of
$4,082,000, $510,000, and $4,581,000 in 1993, 1992 and 1991, respectively.
At December 31, 1993, the Company has net operating loss carryforwards of
$4,531,000 for income tax purposes that expire in years 1994 through 1997. For
financial reporting purposes, a valuation allowance of $1,540,000 has been
recognized to offset the deferred tax assets related to those carryforwards.
Under Statement 109, deferred tax assets and liabilities are determined based
on temporary differences between the financial reporting bases and the tax
bases of assets and liabilities. Deferred tax assets and (liabilities)
recorded in the Consolidated Balance Sheets consist of the following at
December 31:
<TABLE>
<CAPTION>
(Dollars in Thousands) 1993
--------------------- --------
<S> <C>
Postretirement benefits other than pensions ............................ $11,758
Alternative minimum tax credit ......................................... 5,825
Other deferred assets and reserves ..................................... 4,676
Restructuring accrual .................................................. 1,987
Net operating loss carryforwards ....................................... 1,540
---------
25,786
Valuation allowance .................................................... (1,540)
---------
Total deferred tax assets .............................................. 24,246
--------
Depreciation ........................................................... (11,709)
Pensions ............................................................... (3,547)
Mine development ....................................................... (2,814)
Capitalized interest expense ........................................... (1,514)
Inventory .............................................................. (740)
Other .................................................................. (66)
--------
Total deferred tax liabilities ......................................... (20,390)
--------
Net deferred tax asset ................................................. $ 3,856
=========
</TABLE>
During 1992 and 1991 deferred federal income taxes were provided for timing
differences. These items consisted of the following:
<TABLE>
<CAPTION>
(Dollars in Thousands)
- ----------------------
1992 1991
-------- --------
<S> <C> <C>
Alternative minimum tax liability ..... $ (876) $ (1,873)
Accelerated depreciation .............. (626) (4,961)
Mine development ...................... (381) 1,270
Employee benefits ..................... (328) (356)
Restructuring accrual ................. 1,036 (3,471)
Difference due to book and tax basis
of inventory ........................ 397 (472)
Difference due to book and tax basis
of other assets ..................... 416 462
Other items ........................... 198 (674)
-------- --------
Total deferred tax .................... $ (164) $(10,075)
======= =========
</TABLE>
NOTE I - PENSIONS
The Company and its subsidiaries have noncontributory pension plans covering
substantially all U.S. employees. Plans provide benefits based on the
participants' years of service and compensation or stated amounts for each year
of service. The Company's funding policy is to make the minimum actuarially
computed annual contributions required by applicable regulations. No contribu-
tions were made in 1993, 1992 or 1991.
A summary of the components of net periodic pension cost for pension plans
follows (in thousands):
<TABLE>
<CAPTION>
Defined benefit plans: 1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Service cost-benefits earned
during the period .................................... $1,846 $1,603 $ 1,668
Interest cost on projected
benefit obligation ................................... 4,035 3,932 3,215
Actual return on plan assets ........................... (5,744) (3,692) (12,789)
Net amortization and deferral .......................... (669) (2,472) 7,389
--------- -------- ---------
Total (credit) expense .............................. $ (532) $ (629) $ (517)
======== ======== =========
</TABLE>
The following table sets forth the funded status of the Company's plans and the
amounts recognized in the consolidated balance sheets at December 31 (in
thousands):
<TABLE>
<CAPTION>
Plans Whose Assets
Exceed Accumulated
Benefits
-----------------
Actuarial present value of
benefit obligations: 1993 1992
---- ----
<S> <C> <C>
Vested benefit obligation ................................ $ 42,986 $ 36,496
======== ========
Accumulated benefit obligation ........................... 46,763 39,802
======== ========
Plan assets at fair value .................................. 72,652 70,404
Projected benefit obligation ............................... (56,860) (47,491)
-------- --------
Plan assets in excess of
projected benefit obligation ............................. 15,792 22,913
Unrecognized net gain ...................................... (1,579) (8,754)
Unrecognized net assets, at date of
adopting FAS 87, net of amortization ..................... (6,137) (6,844)
Unrecognized prior service cost ............................ 2,356 2,515
Tax effect of recording acquired
excess pension assets .................................... -- (667)
--------- --------
Net pension asset recognized at
December 31 .............................................. $ 10,432 $ 9,163
======== ========
</TABLE>
14
<PAGE> 8
Assumptions used in accounting for the pension plans were:
<TABLE>
<CAPTION>
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Weighted-average discount rate ................ 7.5% 8.5% 9%
Rate of increase in compensation levels ....... 5% 5% 5%
Expected long-term rate of return on assets ... 9% 9% 8%
</TABLE>
Plan assets consist primarily of listed common stocks, corporate and government
bonds and short-term investments.
The Company also has accrued unfunded retirement arrangements for certain
U.S. employees and directors. At December 31, 1993, the projected benefit
obligation was $1,213,000 ($1,113,000 in 1992) and is included in other
long-term liabilities. Certain foreign subsidiaries have funded and
accrued unfunded retirement arrangements which are not material
to the consolidated financial statements.
In connection with a voluntary early retirement program, the Company incurred
a loss on the settlement of vested benefit obligations in the amount of
$1,872,000 which was fully provided for in the restructuring charge taken in
1991.
The Company also sponsors a defined contribution plan available to
substantially all U.S. employees. Company contributions to the plan are based
on matching a percentage of employee savings up to a specified savings level.
The Company's contribution was $1,528,708 in 1993, $1,447,000 in 1992 and
$1,445,000 in 1991.
NOTE J - OTHER POSTRETIREMENT BENEFIT PLANS
In addition to the Company's defined benefit pension plans, the Company
currently provides postretirement medical and death benefits to certain
full-time employees and spouses, excluding those of subsidiaries. The Company
also provides medical benefits to certain retired employees and spouses from an
operation that was divested in 1985.
In 1991, the Company revised its health care plan for certain employees,
excluding those of subsidiaries, who retired after June 30, 1992. Employees
become eligible at age 55 with 10 years of service. Under the revised plan,
employees and spouses receive credits, based on years of service up to 30, to
be used toward the purchase of medical benefits. Contributions toward the cost
of medical benefits are required from retirees with less than 30 years of
service and also for increases in the cost of medical benefits due to
inflation. Employees who retired prior to July 1, 1992 generally had less
stringent eligibility criteria and contribution rates, and account for the
majority of the postretirement benefit obligation.
In 1991, the Company adopted FASB Statement No. 106, "Employers' Accounting
for Postretirement Benefits Other Than Pensions." The transition obligation of
$24,956,000 as of January 1, 1991 was recorded as a one-time charge in the
first quarter of 1991 and reduced net income by $16,471,000, or $1.02 per
share. The ongoing effect of adopting the new standard increased 1991 net
periodic postretirement benefit cost by $1,596,000 and decreased 1991 net
income by $1,216,000, or $.08 per share.
The following table presents the plan's funded status and the amounts
recognized in the Company's consolidated balance sheets (in thousands):
<TABLE>
<CAPTION>
December 31,
1993 1992
--------- ---------
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees .......................................................... $28,388 $32,519
Fully eligible active plan participants ........................... 3,816 2,885
Other active plan participants .................................... 3,816 2,842
--------- ---------
36,020 38,246
Plan assets .......................................................... 0 0
Unrecognized net loss ................................................ (1,437) (3,102)
--------- --------
Accrued postretirement benefit obligation ............................ $34,583 $35,144
======= =======
</TABLE>
Net periodic postretirement benefit cost includes the following components (in
thousands):
<TABLE>
<CAPTION>
1993 1992 1991
------ ------- --------
<S> <C> <C> <C>
Service cost ............................................ $ 282 $ 320 $ 356
Interest cost ........................................... 2,826 3,061 2,732
Adjustment to benefit obligation ........................ (1,227) -- --
------ ------- --------
Net periodic postretirement benefit cost ................ $1,881 $3,381 $3,088
====== ====== =======
</TABLE>
The weighted-average annual assumed rate of increase in the per capita cost of
covered benefits (i.e., health care cost trend rate) used in determining the
accumulated postretirement benefit obligation as of December 31, 1993 is 7.25%
for retirees age 65 and over and 10% for retirees under age 65 in 1994, and
both are assumed to decrease gradually to 5.5% until 2003 and remain at that
level thereafter. The health care cost trend rate assumption has a significant
effect on the amounts reported. For example, increasing the assumed health
care cost trend rates by one percentage point in each year would increase the
accumulated postretirement benefit obligation as of December 31, 1993 by
$2,447,000 and the aggregate of the service and interest cost components of net
periodic postretirement benefit cost for 1993 by $237,000. This increase would
apply only to employees who retired prior to July 1, 1992.
The weighted-average discount rate used in determining the accumulated
postretirement benefit obligation was 7.5% at December 31, 1993, 8.5% at
December 31, 1992 and 9% at December 31, 1991.
In connection with a voluntary early retirement program, the Company incurred
a loss of $1,745,000 which was fully provided for in the restructuring charge
taken in 1991.
NOTE K - OTHER POSTEMPLOYMENT BENEFITS
In November 1992, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 112, "Employers' Accounting for
Postemployment Benefits." This Standard will require accrual accounting for
benefits to former or inactive employees after employment but before
retirement. The Company will adopt this Standard in the first quarter of 1994.
The cumulative effect of adoption will not have a material impact on the
consolidated financial statements.
15
<PAGE> 9
NOTE L - CONTINGENCIES
The Company is from time to time involved in various legal and other
proceedings that relate to the ordinary course of operating its business,
including, but not limited to: employment-related actions; product liability
claims; and workers' compensation claims.
While the Company is unable to predict the outcome of current proceedings,
based upon the facts currently known to it, the Company does not believe that
resolution of these proceedings will have a material adverse effect on the
financial condition or operations of the Company.
The Company has an active program for environmental compliance which includes
the identification of environmental projects and estimating their impact on the
Company's financial performance and available resources. Environmental
expenditures that relate to current operations, such as wastewater treatment
and control of airborne emissions, are either expensed or capitalized as
appropriate. For projects involving remediation, estimates of the probable
costs are made and the Company has set aside a reserve of $4.4 million at
December 31, 1993 ($4.9 million at December 31, 1992). This reserve covers
existing or currently foreseen projects. Expenditures are charged to the
reserve which is adjusted from time to time as additional projects are
identified and for which probable costs of remediation can be estimated.
<TABLE>
NOTE M - OPERATIONS BY GEOGRAPHIC AREA
Years ended December 31, 1993, 1992 and 1991
(Dollars in thousands)
<CAPTION>
1993
---------------------------------------------------------------
OPERATIONS INTERNATIONAL
IN THE DISTRIBUTION ADJUSTMENTS
UNITED STATES SUBSIDIARIES & ELIMINATIONS CONSOLIDATED
-------------- ------------ -------------- ------------
<S> <C> <C> <C> <C>
Sales to unaffiliated customers ................... $244,394 $51,084 $295,478
Transfers between operations ...................... 32,339 ($32,339)
-------- -------- -------- --------
Net Sales .................................... $276,733 $51,084 ($32,339) $295,478
======== ======== ======== ========
Operating profit (loss) ........................... $15,986 $1,034 $369 $17,389
======== ======== ========
Corporate expense ................................. (6,731)
Interest expense .................................. (2,952)
--------
Income before income taxes ................... $7,706
========
Identifiable assets at December 31, 1993 .......... $259,839 $30,894 ($2,927) $287,806
======== ======== ========
Corporate assets .................................. 5,566
--------
Total assets at December 31, 1993 ............ $293,372
========
1992
---------------------------------------------------------------
Sales to unaffiliated customers ................... $219,443 $45,591 $265,034
Transfers between operations ...................... 28,550 ($28,550)
-------- -------- -------- --------
Net Sales .................................... $247,993 $45,591 ($28,550) $265,034
======== ======== ======== ========
Operating profit .................................. $21,992 $1,496 $587 $24,075
======== ======== ========
Corporate expense ................................. (7,126)
Interest expense .................................. (3,206)
--------
Income before income taxes ................... $13,743
========
Identifiable assets at December 31, 1992 .......... $258,316 $30,081 ($2,126) $286,271
======== ======== ========
Corporate assets .................................. 23,768
--------
Total assets at December 31, 1992 ............ $310,039
========
1991
---------------------------------------------------------------
Sales to unaffiliated customers ................... $219,351 $48,122 $267,473
Transfers between operations ...................... 31,219 ($31,219)
-------- -------- -------- --------
Net Sales .................................... $250,570 $48,122 ($31,219) $267,473
======== ======== ======== ========
Operating profit (loss) - after the
restructuring charge and cumulative
effect of accounting change .................... ($51,957) $2,231 $1,116 ($48,610)
======== ======== ========
Corporate expense ................................. (8,744)
Interest expense .................................. (3,755)
--------
Loss before income taxes ..................... ($61,109)
========
Identifiable assets at December 31, 1991 .......... $259,582 $31,847 ($2,513) $288,916
======== ======== ========
Corporate assets .................................. 18,380
--------
Total assets at December 31, 1991 ............ $307,296
========
</TABLE>
16
<PAGE> 10
Transfers between operations are accounted for in the same manner as sales to
unaffiliated customers. Corporate assests are principally cash and cash
equivalents and other assets such as investments and the cash surrender value
of the Company-owned life insurance policies.
Total international sales were $86,334,000 in 1993, $70,922,000 in 1992, and
$76,090,000 in 1991. These are comprised of exports from United States
operations and direct sales by international distribution subsidiaries. Most
of these sales represent products manufactured in the United States.
Export sales from United States operations amounted to $35,101,000 in 1993,
$25,331,000 in 1992, and $27,968,000 in 1991.
NOTE N - QUARTERLY DATA (UNAUDITED)
Years ended December 31, 1993 and 1992
(Dollars in thousands except per share amounts)
<TABLE>
<CAPTION> 1993
--------------------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter Total
------- ------- ------- ------- -----
<S> <C> <C> <C> <C> <C>
Net Sales .............................. $69,380 $70,852 $76,816 $78,430 $295,478
Gross Margin ........................... 15,846 15,589 16,831 19,526 67,792
Percent of Sales ..................... 22.8% 22.0% 21.9% 24.9% 22.9%
Net Income ............................. 1,154 158 1,663 3,483 6,458
Per Share of Common Stock:
Net Income ........................... 0.07 0.01 0.10 0.22 0.40
Dividends ............................ 0.05 0.05 0.05 0.05 0.20
Stock price range
High ................................. 17.50 13.63 12.38 14.38
Low .................................. 13.25 11.38 11.38 11.88
1992
--------------------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter Total
------- ------- ------- ------- -----
Net Sales .............................. $67,804 $67,325 $63,058 $66,847 $265,034
Gross Margin ........................... 20,292 18,653 15,355 17,790 72,090
Percent of Sales ..................... 29.9% 27.7% 24.4% 26.6% 27.2%
Net Income ............................. 4,224 3,062 1,127 2,087 10,500
Per Share of Common Stock:
Net Income ........................... 0.26 0.19 0.07 0.13 0.65
Dividends ............................ 0.05 0.05 0.05 0.11 0.26
Stock price range
High ................................. 19.00 18.00 18.25 16.88
Low .................................. 12.25 16.00 15.63 14.75
</TABLE>
17
<PAGE> 11
REPORT OF ERNST & YOUNG
INDEPENDENT AUDITORS
Board of Directors and Shareholders
Brush Wellman Inc.
We have audited the accompanying consolidated balance sheets of Brush Wellman
Inc. and subsidiaries as of December 31, 1993 and 1992, and the related
consolidated statements of income, shareholders' equity, and cash flows for
each of the three years in the period ended December 31, 1993. 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. Those 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 Brush Wellman
Inc. and subsidiaries at December 31, 1993 and 1992, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1993 in conformity with generally accepted
accounting principles.
As discussed in Note J to the consolidated financial statements, in 1991
the Company changes its method of accounting for other postretirement benefits.
/s/ ERNST & YOUNG
Cleveland, Ohio
January 25, 1994
_____________________________________________________________________________
REPORT OF MANAGEMENT
The management of Brush Wellman Inc. is responsible for the contents of the
financial statements which are prepared in conformity with generally accepted
accounting principles. The financial statements necessarily include amounts
based on judgments and estimates. Financial information elsewhere in the
annual report is consistent with that in the financial statements.
The Company maintains a comprehensive accounting system which includes
controls designed to provide reasonable assurance as to the integrity and
reliability of the financial records and the protection of assets. However,
there are inherent limitations in the effectiveness of any system of internal
controls and, therefore, it provides only reasonable assurance with respect to
financial statement preparation. An internal audit staff is employed to
regularly test and evaluate both internal accounting controls and operating
procedures, including compliance with the Company's statement of policy
regarding ethical and lawful conduct. The role of Ernst & Young, the
independent auditors, is to provide an objective review of the financial
statements and the underlying transactions in accordance with generally
accepted auditing standards.
The Audit Committee of the Board of Directors, comprised of directors who
are not members of management, meets regularly with management, the independent
auditors and the internal auditors to ensure that their respective
responsibilities are properly discharged. Ernst & Young and the internal audit
staff have full and free access to the Audit Committee.
/s/ Clark G. Waite
Clark G. Waite
Senior Vice President and Chief Financial Officer
18
<PAGE> 12
<TABLE>
SELECTED FINANCIAL DATA
Brush Wellman Inc. and Subsidiaries
(Dollars in thousands except per share amounts)
<CAPTION>
1993 1992 1991 1990 1989
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
FOR THE YEAR
Net Sales .......................................... $295,478 $265,034 $267,473 $297,390 $317,828
Cost of sales ...................................... 227,686 192,944 202,080 212,841 233,165
Interest expense ................................... 2,952 3,206 3,755 3,359 2,860
Income (loss) from continuing operations
before income taxes .............................. 7,706 13,743 (61,109) 24,773 26,335
Income taxes (benefit) ............................. 1,248 3,243 (17,091) 7,214 7,793
Income (loss) from continuing operations ........... 6,458 10,500 (44,018) 17,559 18,542
Net income (loss) .................................. 6,458 10,500 (44,018) 17,559 18,542
Per share of Common Stock:
Income (loss) from continuing operations ......... 0.40 0.65 (2.74) 1.09 1.10
Net income (loss) ................................ 0.40 0.65 (2.74) 1.09 1.10
Cash dividends declared .......................... 0.20 0.26 0.59 0.71 0.67
Depreciation and amortization ...................... 21,720 20,180 22,759 24,070 24,077
Capital expenditures ............................... 11,901 13,604 13,605 16,160 19,946
Mine development expenditures ...................... 814 848 6,389 5,699 259
YEAR-END POSITION
Working Capital .................................... 105,272 88,616 80,427 87,570 78,346
Ratio of current assets to current liabilities ..... 3.1 to 1 2.5 to 1 2.2 to 1 2.4 to 1 2.1 to 1
Property and equipment:
At cost .......................................... 337,342 332,971 321,981 307,088 292,708
Cost less depreciation and impairment ............ 118,926 127,991 132,579 143,635 141,639
Total assets ....................................... 293,372 310,039 307,296 338,982 338,279
Other long-term liabilities ........................ 40,663 40,332 38,029 9,356 9,087
Long-term debt ..................................... 24,000 33,808 34,946 26,673 21,076
Shareholders' equity ............................... 172,075 168,824 162,264 215,891 211,769
Book value per share ............................... 10.70 10.49 10.10 13.43 13.10
Number of shares of stock outstanding .............. 16,087,415 16,086,515 16,069,615 16,077,723 16,166,611
Shareholders of record ............................. 2,566 2,762 3,116 3,446 3,820
Number of employees ................................ 1,803 1,831 1,943 2,079 2,160
<FN>
See notes to consolidated financial statements.
Impairment and restructuring charges reduced net income by $30,751,000 in 1991
and $8,400,000 in 1989.
The cumulative effect of a change in accounting for postretirement benefits
reduced net income by $16,471,000 in 1991.
In December 1986, a business acquisition was made; the pro forma effect would
have increased 1986 net sales by $35,000,000.
Share and per share amounts have been adjusted to reflect a 2-for-1 stock split
in June 1984 and a 3-for-2 stock split in January 1983.
Provisions for the discontinuance of the friction products and quartz
businesses reduced net income by $10,025,000 in 1985.
</TABLE>
22
<PAGE> 13
<TABLE>
1988 1987 1986 1985 1984 1983
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$345,838 $307,571 $241,428 $242,902 $281,142 $210,192
239,554 211,885 161,392 158,216 176,264 134,739
2,843 2,965 2,148 1,176 2,795 4,019
51,861 45,823 40,253 48,160 69,088 41,945
19,344 19,658 17,578 20,248 27,856 17,317
32,517 26,165 22,675 27,912 41,232 24,628
32,517 26,165 22,675 17,887 41,539 25,697
1.79 1.38 1.20 1.48 2.19 1.33
1.79 1.38 1.20 0.95 2.20 1.39
0.63 0.59 0.55 0.51 0.47 0.42
23,405 22,098 17,903 15,710 15,292 14,513
22,645 18,464 25,239 44,211 29,626 19,805
503 581 3,451 7,548 215 151
92,530 109,063 103,416 96,480 107,506 88,166
2.4 to 1 2.6 to 1 2.9 to 1 3.6 to1 3.4 to 1 3.8 to 1
279,927 266,543 254,276 222,617 208,459 180,861
143,180 144,829 144,107 125,643 110,925 97,728
357,751 367,473 341,210 299,049 294,196 251,655
9,547 10,333 8,270
29,908 25,481 26,563 26,263 27,627 31,650
232,840 242,673 234,725 220,453 210,550 176,240
13.49 13.17 12.48 11.77 11.31 9.54
17,262,311 18,431,703 18,815,799 18,723,013 18,623,780 18,482,412
4,014 4,212 4,522 4,916 4,739 4,548
2,602 2,564 2,266 1,860 2,190 1,906
</TABLE>
23
<PAGE> 1
EXHIBIT 21
<TABLE>
Subsidiaries of Registrant
--------------------------
The Company has the following subsidiaries, all of which are wholly owned and included in the consolidated financial
statements.
<CAPTION>
State or Country
Name of Subsidiary of Incorporation
- ------------------ ----------------
<S> <C>
Brush Wellman GmbH Germany
Brush Wellman (Japan), Ltd. Japan
Brush Wellman Limited England
Technical Materials, Inc. Ohio
Tegmen Corp. New York
Williams Advanced Materials Inc. New York
Williams Advanced Materials PTE Ltd. Singapore
</TABLE>
<PAGE> 1
CONSENT OF INDEPENDENT AUDITORS EXHIBIT 23
Board of Directors and Shareholders
Brush Wellman Inc.
We consent to the incorporation by reference in this Annual Report (Form 10-K)
of Brush Wellman Inc. of our report dated January 25, 1994, included in the
1993 Annual Report to Shareholders of Brush Wellman Inc.
Our audits also included the financial statement schedules listed in Item
14(a). These schedules are the responsibility of the Company's management.
Our responsibility is to express an opinion based on our audits. In our
opinion, the financial statement schedules, referred to above, when considered
in relation to the basic financial statements taken as a whole, present fairly
in all material respects the information set forth therein.
We also consent to the incorporation by reference in the following Registration
Statements and Post-Effective Amendments of our report dated January 25, 1994,
with respect to the consolidated financial statements and schedules of Brush
Wellman Inc. included or incorporated by reference in this Form 10-K for the
year ended December, 31, 1993:
Registration Statement Number 33-488866 on Form S-8 dated June 27,
1992;
Registration Statement Number 33-45323 on Form S-8 dated February 3,
1992;
Post-Effective Amendment Number 1 to Registration Statement Number
33-28950 on Form S-8 dated February 3, 1992
Registration Statement Number 33-35979 on Form S-8 dated July 20, 1990;
Registration Statement Number 33-28950 on Form S-8 dated May 26, 1989;
Registration Statement Number 33-28605 on Form S-8 dated May 5, 1989;
Registration Statement Number 33-23896 on Form S-8 dated August 22,
1988;
Registration Statement Number 2-90724 on Form S-8 dated April 27, 1984;
Post-Effective Amendment Number 4 to Registration Statement Number
2-64080 on Form S-8 dated April 22, 1983;
ERNST & YOUNG
/S/ Ernst & Young
Cleveland, Ohio
March 23, 1994
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors and
officers of BRUSH WELLMAN INC., an Ohio corporation (the "Corporation"), hereby
constitutes and appoints Gordon D. Harnett, Clark G. Waite, Michael C.
Hasychak, Leigh B. Trevor and Louis Rorimer, and each of them, their true and
lawful attorney or attorneys-in-fact, with full power of substitution and
revocation, for them and in their names, place and stead, to sign on their
behalf as a director or officer, or both, as the case may be, of the
Corporation, an Annual Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 on Form 10-K for the fiscal year ended December 31, 1993,
and to sign any and all amendments to such Annual Report, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission granting unto said attorney or
attorneys-in-fact, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about
the premises, as fully to all intents and purposes as they might or could do in
person, hereby ratifying and confirming all that said attorney or attorneys-
in-fact or any of them or their substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of
the 1st day of March, 1994.
<TABLE>
<S> <C>
/s/ Gordon D. Harnett /s/ Gerald C. McDonough
- --------------------------------------------------- --------------------------------------------------
Gordon D. Harnett, Chairman, President, Gerald C. McDonough, Director
Chief Executive Officer and Director
(Principal Executive Officer)
/s/ Albert C. Bersticker /s/ Robert M. McInnes
- --------------------------------------------------- --------------------------------------------------
Albert C. Bersticker, Director Robert M. McInnes, Director
/s/ Charles F. Brush, III /s/ Henry G. Piper
- --------------------------------------------------- --------------------------------------------------
Charles F. Brush, III, Director Henry G. Piper, Director
/s/ John Sherwin, Jr.
- --------------------------------------------------- --------------------------------------------------
Frank B. Carr, Director John Sherwin, Jr., Director
/s/ William P. Madar /s/ Clark G. Waite
- --------------------------------------------------- --------------------------------------------------
William P. Madar, Director Clark G. Waite, Director and Senior
Vice President, Finance and
Administration, Chief Financial
Officer and Secretary
/s/ Julien L. McCall (Principal Financial and Accounting
- --------------------------------------------------- Officer)
Julien L. McCall, Director
</TABLE>
<PAGE> 1
Exhibit 99(a)
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
_____
|__X__| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 30, 1993
OR
_____
|_____| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _______ to ________
Commission file number 1-7006
BRUSH WELLMAN INC.
SAVINGS AND INVESTMENT PLAN
(Full Title of the Plan)
BRUSH WELLMAN INC.
17876 St. Clair Avenue
Cleveland, Ohio 44110
(Name of issuer of the securities held
pursuant to the plan and the address
of its principal executive office.)
<PAGE> 2
BRUSH WELLMAN INC.
SAVINGS AND INVESTMENT PLAN
<TABLE>
REQUIRED INFORMATION
- --------------------
<CAPTION>
Page No.
<S> <C>
1. Report of Independent Auditors. 1
2. Statements of Financial Condition -
December 30, 1993 and 1992. 2-3
3. Statements of Income and Changes in Plan
Equity - Plan years ended December 30, 1993,
1992 and 1991. 4-6
4. Notes to Financial Statements. 7-12
5. Schedules required to be filed under ERISA.
a. Schedule of Assets held for Investment
Purposes. 13
b. Schedule of Reportable Transactions. 14-15
6. Consent of Independent Auditors. 16
</TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Plan has duly caused this annual report to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of
Ohio, on the 17th day of March, 1994.
BRUSH WELLMAN INC.
SAVINGS AND INVESTMENT PLAN
By /s/ Dennis L. Habrat
-----------------------
Member of the Administrative
Committee
<PAGE> 3
[LOGO] 27600 Chagrin Boulevard
Suite 200
Cleveland, Ohio 44122-4421
216.464.7481
Fax 216.464.7581
RICHARD A. WRIGHT
ANTHONY J. WESLEY
MARK G. MILLS
WILLIAM M. POTOCZAK
___________
KENNETH E. NOWAK
REPORT OF INDEPENDENT AUDITORS
------------------------------
Administrative Committee of
Brush Wellman Inc. Savings
and Investment Plan
We have audited the financial statements of Brush Wellman Inc.
Savings and Investment Plan listed in the Annual Report on Form 11-K as of and
for the years ended December 30, 1993 and 1992. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express
an opinion on these financial statements based on our audit. The financial
statements of Brush Wellman Inc. Savings and Investment Plan for 1991 as
listed in the Annual Report on Form 11-K were audited by other auditors whose
report dated April 1, 1992, expressed an unqualified opinion on those
statements.
We conducted our audits in accordance with generally accepted
auditing standards. Those 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 listed in the Annual
Report on Form 11-K present fairly, in all material respects, the financial
position of Brush Wellman Inc. Savings and Investment Plan at December 30, 1993
and 1992, the results of its operations and changes in its plan equity for the
years then ended in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on
the financial statements taken as a whole. The accompanying supplemental
schedules of assets held for investment purposes as of December 30, 1993 and
reportable transactions for the year ended December 30 1993 are presented for
purposes of complying with the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974, and are not a required part of the financial statements. The
supplemental schedules have been subjected to the auditing procedures applied
in our audit of the financial statements and, in our opinion, are fairly stated
in all material respects in relation to the financial statements taken as a
whole.
Wright, Wesley & Mills, P.C.
/S/ Wright, Wesley & Mills, P.C.
March 17, 1994
-1-
<PAGE> 4
BRUSH WELLMAN INC.
SAVINGS AND INVESTMENT PLAN
STATEMENT OF FINANCIAL CONDITION
DECEMBER 30, 1993
<TABLE>
<CAPTION>
INCOME EQUITY EQUITY EQUITY STOCK
ASSETS FUND FUND A FUND B FUND C FUND
-------- ---------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Brush Wellman Inc. Common Stock $11,631,149
(cost $17,033,792)
Managed Guaranteed Investment
Contract Fund (cost $13,295,724) $14,307,606
Fidelity Equity Index Portfolio
(cost $5,223,194) $5,826,691
Fidelity Fund Inc.
(cost $2,023,888) $2,115,389
Fidelity Puritan Fund
(cost $3,671,135) $4,013,010
Participant Promissory Notes
(cost $2,416,728)
Employee Benefits Money Market
Fund (cost $324,800) 14,906 4,885 8,104 180,974
---------- ------------- ---------- ---------- ---------
14,307,606 5,841,597 2,120,274 4,021,114 11,812,123
Contribution Receivable:
Company 120,329
401(k) 132,822 49,240 25,214 44,991 40,651
Participant 12,738 7,106 4,004 5,943 3,125
---------- ------------- ---------- ---------- ---------
145,560 56,346 29,218 50,934 164,105
Interest Receivable 92 102 49 80 383
Dividends Receivable 46,228 40,331
Other 316 93 33 69 (4,075)
---------- ------------- ---------- ---------- ---------
408 46,423 82 149 36,639
---------- ------------- ---------- ---------- ---------
TOTAL ASSETS $14,453,574 $5,944,366 $2,149,574 4,072,197 $12,012,867
=========== ============= ========== ========== ===========
LIABILITIES & PLAN EQUITY
---------------------------
Liabilities:
Benefits Payable $115,265 $50,153 $13,895 $28,410 $109,161
Other (123,891) 18,184 (8,995) (20,680) 133,377
Plan Equity 14,462,200 5,876,029 2,144,674 4,064,467 11,770,329
---------- ------------- ---------- ---------- ---------
TOTAL LIABILITIES & PLAN EQUITY $14,453,574 $5,944,366 $2,149,574 $4,072,197 $12,012,867
=========== ============= ========== ========== ===========
</TABLE>
<TABLE>
<CAPTION>
PAYSOP LOAN
ASSETS FUND FUND TOTAL
-------- -------- -------- -----------
<S> <C> <C> <C>
Brush Wellman Inc. Common Stock $206,511 $11,837,660
(cost $17,033,792)
Managed Guaranteed Investment
Contract Fund (cost $13,295,724) 14,307,606
Fidelity Equity Index Portfolio
(cost $5,223,194) 5,826,691
Fidelity Fund Inc.
(cost $2,023,888) 2,115,389
Fidelity Puritan Fund
(cost $3,671,135) 4,013,010
Participant Promissory Notes
(cost $2,416,728) $2,416,728 2,416,728
Employee Benefits Money Market
Fund (cost $324,800) 22,712 93,219 324,800
--------- ---------- ------------
229,223 2,509,947 40,841,884
Contribution Receivable:
Company 120,329
401(k) 292,918
Participant 32,916
--------- ---------- ------------
446,163
Interest Receivable 66 398 1,170
Dividends Receivable 725 87,284
Other 1 (3,563)
--------- ---------- ------------
792 398 84,891
--------- ---------- ------------
TOTAL ASSETS $230,015 $2,510,345 $41,372,938
========= ========== ===========
LIABILITIES & PLAN EQUITY
---------------------------
Liabilities:
Benefits Payable $2,525 $319,409
Other $185,564 183,559
Plan Equity 227,490 2,324,781 40,869,970
--------- ---------- ------------
TOTAL LIABILITIES & PLAN EQUITY $230,015 $2,510,345 $41,372,938
========= ========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
-2-
<PAGE> 5
BRUSH WELLMAN INC.
SAVINGS AND INVESTMENT PLAN
STATEMENT OF FINANCIAL CONDITION
DECEMBER 30, 1992
<TABLE>
<CAPTION>
INCOME EQUITY EQUITY EQUITY STOCK
ASSETS FUND FUND A FUND B FUND C FUND
-------- ----------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Brush Wellman Inc. Common Stock
(cost $15,665,630) $10,463,564
Managed Guaranteed Investment
Contract Fund (cost $12,828,874) $12,954,848
Fidelity Equity Index Portfolio
(cost $4,926,268) $5,293,097
Fidelity Fund Inc.
(cost $1,386,712) $1,464,623
Fidelity Puritan Fund
(cost $2,225,922) $2,409,947
Participant Promissory Notes
(cost $2,456,585)
Employee Benefits Money Market
Fund (cost $102,001) 7,478
------------ ---------- ----------- ---------- -----------
12,954,848 5,293,097 1,464,623 2,409,947 10,471,042
Contributions Receivable:
Company 116,647
401(k) 131,561 50,542 21,349 27,862 50,218
Participant 11,386 3,906 2,717 4,015 3,203
------------ ---------- ----------- ---------- -----------
142,947 54,448 24,066 31,877 170,068
Interest Receivable 64 27 12 16 236
Dividends Receivable 73,764
Other 57,359
------------ ---------- ----------- ---------- -----------
64 27 57,371 16 74,000
------------ ---------- ----------- ---------- -----------
TOTAL ASSETS $13,097,859 $5,347,572 $1,546,060 $2,441,840 $10,715,110
============ ========== =========== ========== ===========
LIABILITIES & PLAN EQUITY
---------------------------
Liabilities:
Benefits Payable $67,775 $5,890 $67,999
Other (83,693) (27,253) ($10,601) ($13,122) (26,209)
Plan Equity 13,113,777 5,368,935 1,556,661 2,454,962 10,673,320
------------ ---------- ----------- ---------- -----------
TOTAL LIABILITIES & PLAN EQUITY $13,097,859 $5,347,572 $1,546,060 $2,441,840 $10,715,110
============ ========== ============ ========== ===========
</TABLE>
<TABLE>
<CAPTION>
PAYSOP LOAN
ASSETS FUND FUND TOTAL
-------- --------- --------- ----------
<S> <C> <C> <C>
Brush Wellman Inc. Common Stock
(cost $15,665,630) $230,271 $10,693,835
Managed Guaranteed Investment
Contract Fund (cost $12,828,874) 12,954,848
Fidelity Equity Index Portfolio
(cost $4,926,268) 5,293,097
Fidelity Fund Inc.
(cost $1,386,712) 1,464,623
Fidelity Puritan Fund
(cost $2,225,922) 2,409,947
Participant Promissory Notes
(cost $2,456,585) $2,456,585 2,456,585
Employee Benefits Money Market
Fund (cost $102,001) 18,846 75,677 102,001
-------- ----------- -----------
249,117 2,532,262 35,374,936
Contributions Receivable:
Company 116,647
401(k) 281,532
Participant 25,227
-------- ----------- -----------
423,406
Interest Receivable 56 253 664
Dividends Receivable 749 74,513
Other 57,359
-------- ----------- -----------
805 253 132,536
-------- ----------- -----------
TOTAL ASSETS $249,922 $2,532,515 $35,930,878
======== =========== ===========
LIABILITIES & PLAN EQUITY
---------------------------
Liabilities:
Benefits Payable $141,664
Other $160,878
Plan Equity $249,922 2,371,637 35,789,214
-------- ----------- -----------
TOTAL LIABILITIES & PLAN EQUITY $249,922 $2,532,515 $35,930,878
======== =========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
-3-
<PAGE> 6
BRUSH WELLMAN INC.
SAVINGS AND INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
YEAR ENDED DECEMBER 30, 1993
<TABLE>
<CAPTION>
INCOME EQUITY EQUITY EQUITY STOCK
FUND FUND A FUND B FUND C FUND
--------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends $147,967 $55,706 $149,603 $151,251
Interest $1,538 855 356 645 4,058
Other Income (Expense) 316 83,419 289,270 298,154 (4,095)
---------- --------- ---------- ---------- ---------
1,854 232,241 345,332 448,402 151,214
Realized Gain (Loss) on
Investments--Note E 51,272 62,269 7,206 1,872 (408,791)
Unrealized Appreciation (Depreciation)
on Investments--Note F 885,906 236,668 13,589 157,850 (221,083)
Contributions--Note B
Company 1,395,917
401(k) 1,605,914 637,468 304,300 492,810 532,998
Participant 84,978 36,623 23,534 50,897 18,253
---------- --------- ---------- ---------- ---------
1,690,892 674,091 327,834 543,707 1,947,168
Investment Election Change (186,881) (385,063) (47,361) 549,349 70,025
Loan Transfers (18,661) 12,715 19,866 (10,472) (8,236)
Unallocated Loan Payments
Withdrawals and
Terminations--Note C 1,075,959 325,827 78,453 81,203 433,288
---------- --------- ---------- ---------- ---------
Income and Changes in Plan Equity 1,348,423 507,094 588,013 1,609,505 1,097,009
Plan Equity at Beginning of the Year 13,113,777 5,368,935 1,556,661 2,454,962 10,673,320
---------- --------- ---------- ---------- ---------
Plan Equity at End of the Year $14,462,200 $5,876,029 $2,144,674 $4,064,467 $11,770,329
=========== ========== ========== ========== ===========
</TABLE>
<TABLE>
<CAPTION>
PAYSOP LOAN
FUND FUND TOTAL
--------- ---------- ---------
<S> <C> <C> <C>
Investment Income:
Dividends $3,839 $508,366
Interest 716 $125,191 133,359
Other Income (Expense) (5,753) 661,311
--------- ---------- ---------
(1,198) 125,191 1,303,036
Realized Gain (Loss) on
Investments--Note E (6,552) (292,724)
Unrealized Appreciation (Depreciation)
on Investments--Note F (3,252) 1,069,678
Contributions--Note B
Company 1,395,917
401(k) 3,573,490
Participant 214,285
--------- ---------- ---------
5,183,692
Investment Election Change (69)
Loan Transfers 4,788
Unallocated Loan Payments (154,297) (154,297)
Withdrawals and
Terminations--Note C 11,361 22,538 2,028,629
--------- ---------- ---------
Income and Changes in Plan Equity (22,432) (46,856) 5,080,756
Plan Equity at Beginning of the Year 249,922 2,371,637 35,789,214
--------- ---------- ---------
Plan Equity at End of the Year $227,490 $2,324,781 $40,869,970
======== ========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
-4-
<PAGE> 7
BRUSH WELLMAN INC.
SAVINGS AND INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
YEAR ENDED DECEMBER 30, 1992
<TABLE>
<CAPTION>
INCOME EQUITY EQUITY EQUITY STOCK
FUND FUND A FUND B FUND C FUND
---------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends $157,070 $21,551 $111,835 $169,846
Interest $791,319 660 299 351 3,619
Other Income (Expense) 121 42,950 44,830 197,846 (237,076)
---------- --------- --------- --------- ----------
791,440 200,680 66,680 310,032 (63,611)
Realized Gain (Loss) on
Investments--Note E 594 258,428 5,987 1,733 (296,620)
Unrealized Appreciation (Depreciation)
on Investments--Note F 125,974 167,326 26,892 73,350 1,704,543
Contributions--Note B
Company 1,330,429
401(k) 1,578,966 608,692 272,530 310,258 611,096
Participant 70,386 24,255 19,682 19,538 18,438
---------- --------- --------- --------- ----------
1,649,352 632,947 292,212 329,796 1,959,963
Investment Election Change 158,034 (14,041) 21,598 131,443 (11,316)
Loan Transfers (237,004) (61,407) (15,463) (1,708) (44,026)
Unallocated Loan Payments
Withdrawals and
Terminations--Note C 1,293,005 346,010 54,853 52,293 863,743
---------- --------- --------- --------- ----------
Income and Changes in Plan Equity 1,195,385 837,923 343,053 792,353 2,385,190
Plan Equity at Beginning of the Year 11,918,392 4,531,012 1,213,608 1,662,609 8,288,130
---------- --------- --------- --------- ----------
Plan Equity at End of the Year $13,113,777 $5,368,935 $1,556,661 $2,454,962 $10,673,320
=========== ========== ========== ========== ===========
</TABLE>
<TABLE>
<CAPTION>
PAYSOP LOAN
FUND FUND TOTAL
---------- --------- ---------
<S> <C> <C> <C>
Investment Income:
Dividends $3,108 $463,410
Interest 681 $117,168 914,097
Other Income (Expense) (4,463) 44,208
---------- --------- ---------
(674) 117,168 1,421,715
Realized Gain (Loss) on
Investments--Note E (15,647) (45,525)
Unrealized Appreciation (Depreciation)
on Investments--Note F 54,463 2,152,548
Contributions--Note B
Company 1,330,429
401(k) 3,381,542
Participant 152,299
---------- --------- ---------
4,864,270
Investment Election Change 285,718
Loan Transfers 359,608
Unallocated Loan Payments 89,263 89,263
Withdrawals and
Terminations--Note C 20,261 11,498 2,641,663
---------- --------- ---------
Income and Changes in Plan Equity 17,881 554,541 6,126,326
Plan Equity at Beginning of the Year 232,041 1,817,096 29,662,888
---------- --------- ---------
Plan Equity at End of the Year $249,922 $2,371,637 $35,789,214
========== ========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
-5-
<PAGE> 8
BRUSH WELLMAN INC.
SAVINGS AND INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
YEAR ENDED DECEMBER 30, 1991
<TABLE>
<CAPTION>
INCOME EQUITY EQUITY EQUITY STOCK
FUND FUND A FUND B FUND C FUND
---------- --------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends $190,637 $27,486 $85,048 $318,604
Interest $867,386 1,251 542 626 5,412
Other Income (Expense) 1,300 68,727 461 (193,443)
---------- --------- -------- ---------- ----------
867,386 193,188 96,755 86,135 130,573
Realized Gain (Loss) on
Investments--Note E (9,205) 6,516 3,641 (139,815)
Unrealized Appreciation (Depreciation)
on Investments--Note F 776,082 98,130 214,639 (251,166)
Contributions--Note B
Company 1,337,295
401(k) 1,643,696 579,193 247,951 260,638 677,764
Participant 75,605 32,872 19,014 12,455 17,553
---------- --------- -------- ---------- ----------
1,719,301 612,065 266,965 273,093 2,032,612
Investment Election Change 87,850 (82,173) 21,841 12,194 (39,712)
Loan Transfers (49,672) 11,885 11,465 5,069 15,036
Unallocated Loan Payments
Withdrawals and
Terminations--Note C 536,227 132,568 72,868 97,460 451,394
---------- --------- -------- ---------- ----------
Income and Changes in Plan Equity 2,088,638 1,369,274 428,804 497,311 1,296,134
Plan Equity at Beginning of the Year 9,829,754 3,161,738 784,804 1,165,298 6,991,996
---------- --------- -------- ---------- ----------
Plan Equity at End of the Year $11,918,392 $4,531,012 $1,213,608 $1,662,609 $8,288,130
=========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
PAYSOP LOAN
FUND FUND TOTAL
---------- --------- ----------
<S> <C> <C> <C>
Investment Income:
Dividends $9,772 $631,547
Interest 689 $152,308 1,028,214
Other Income (Expense) (18,488) (141,443)
---------- --------- ----------
(8,027) 152,308 1,518,318
Realized Gain (Loss) on
Investments--Note E (4,828) (143,691)
Unrealized Appreciation (Depreciation)
on Investments--Note F 14,908 852,593
Contributions--Note B
Company 1,337,295
401(k) 3,409,242
Participant 157,499
---------- --------- ----------
4,904,036
Investment Election Change
Loan Transfers 6,217
Unallocated Loan Payments (3,790) (3,790)
Withdrawals and
Terminations--Note C 11,340 83,568 1,385,425
---------- --------- ----------
Income and Changes in Plan Equity (9,287) 71,167 5,742,041
Plan Equity at Beginning of the Year 241,328 1,745,929 23,920,847
---------- --------- ----------
Plan Equity at End of the Year $232,041 $1,817,096 $29,662,888
========== ========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
-6-
<PAGE> 9
NOTES TO FINANCIAL STATEMENTS
BRUSH WELLMAN INC.
SAVINGS AND INVESTMENT PLAN
DECEMBER 30, 1993, 1992 AND 1991
NOTE A - The accounting records of the Brush Wellman Inc. Savings and
Investment Plan (Plan) are maintained on the accrual basis. Investments are
stated at current market value. Investment in securities traded on national
securities exchanges are valued at the latest reported closing price.
Investment in participant units of the Managed Guaranteed Investment Contract
Fund and the Employee Benefits Money Market Fund are stated at market value as
determined by the Trustee. Cost is determined by the average cost method.
NOTE B - The Plan is a defined contribution plan which covers certain eligible
employees with one year of eligibility service with Brush Wellman Inc.
(Company). An employee shall be credited with a year of eligibility service if
he is credited with at least 1,000 hours of service in any twelve consecutive
month period beginning with date of hire or rehire of the employee (or an
anniversary of the latest such date).
The Plan provides for basic contributions on behalf of employees up to
6% of their earnings through either salary reduction or employee after-tax
contributions. Basic contributions were matched by the Company at the rate of
50% of such contributions. The rate at which such basic contributions are
matched by the Company may be decreased or increased (up to 100%) by action of
the Company's Board of Directors.
An employee who makes basic contributions of 6% of earnings may also
make supplemental contributions of up to 9% of earnings which are not matched
by Company contributions and which may be made in any combination of salary
reduction and/or after-tax contributions.
An employee's contributions made to the Plan on a salary reduction basis
may not exceed certain maximum amounts. The maximum amounts were $8,994 in
1993, $8,728 in 1992 and $8,475 in 1991. All employee and Company matching
contributions are fully vested at all times.
Participants may direct that their basic, supplemental and transfer
contributions (as described in the Plan) be invested in one or more of the
Income Fund, Equity Fund A, Equity Fund B, Equity Fund C, and the Company Stock
Fund in increments of 10%. Prior to July 1, 1991, such direction was able to
be revised by participants on April 1 or October 1. Beginning July 1, 1991
revisions may also be made on July 1 and December 31. All Company matching
contributions are invested in the Company Stock Fund except with respect to
Participants age 59 1/2 or older who may transfer such contributions to other
investment funds.
-7-
<PAGE> 10
The Income Fund invests primarily in the Managed Guaranteed Investment
Contract Fund, the objective of which is to achieve high current income with
stability of principal. The fund is primarily invested in Guaranteed
Investment Contracts.
Equity Fund A began investing primarily in the Fidelity U.S. Equity
Index Portfolio April 1, 1992. This fund is a growth and income fund. It
seeks a yield that corresponds with the total return of the S&P 500 Index. The
fund's share price will fluctuate and dividend amounts will vary. Prior to
that, Equity Fund A invested primarily in the Fidelity Equity Income Fund.
Equity Fund B invests primarily in the Fidelity Fund. This fund seeks
long-term capital growth and current return on capital and will select some
securities for their income characteristics, which may limit the potential for
growth. The fund's share price and dividend income will fluctuate as the value
and yields of the securities in its investment portfolio fluctuate.
Equity Fund C invests primarily in Fidelity Puritan Fund. This fund is
a growth and income fund. It seeks capital growth in addition to regular
quarterly dividends. It invests in a broadly diversified portfolio of common
stocks, preferred stocks and bonds, including lower- quality, high yield debt
securities. The fund's share price will fluctuate and dividend amounts will
vary.
The Company Stock Fund invests primarily in Brush Wellman Inc. Common
Stock.
The Plan, as originally adopted, included a Payroll Stock Ownership Plan
(PAYSOP) feature that applied through 1986. Under the PAYSOP, the Company made
contributions based upon a percentage of payroll and was afforded an additional
credit against federal income tax up to the amount allowable by the Internal
Revenue Code. The PAYSOP contribution by the Company, which could be in Common
Stock of the Company or cash used to purchase Common Stock of the Company, was
a percentage of the compensation paid to all employees who made salary
reduction contributions to the Plan at any time during the year and who were
members of the Plan as of the last pay period of such year. The shares of
Common Stock of the Company contributed or purchased were allocated equally to
all eligible participants.
A participant may borrow funds from his account, excluding his interest
in the PAYSOP Fund, provided such loan is secured by the participant's interest
in his account and evidenced by a promissory note executed by the participant.
The promissory notes are held in trust as a separate fund, Loan Fund, of the
Plan.
All costs and expenses incurred in connection with the administration of
the Plan for 1993, 1992, and 1991 were paid by the Company.
Information concerning the Plan agreement and the vesting and benefit
provisions is contained in the Summary Plan Description. Copies of this
pamphlet are available from the Plan administrator.
-8-
<PAGE> 11
NOTE C - At retirement, death or other termination, a participant (or his
death beneficiary) is eligible to receive a distribution of all employee,
Company matching and PAYSOP contributions credited to the employee's account
plus or minus any net gain or loss thereon.
The value of distributions and withdrawals is based on the value of a
participant's account on the valuation date immediately preceding the date of
distribution or withdrawal and is deducted from the participant's account as of
such valuation date.
Distribution to a participant or a person designated by the participant
as his death beneficiary is made under one of the following methods as elected
by the participant:
(i) Lump sum payment in cash; or
(ii) Lump sum payment in cash, except that a participant's interest
in the Company Stock Fund and the PAYSOP Fund will be paid in
full shares of Common Stock of the Company, with any
fractional shares being paid in cash.
<TABLE>
NOTE D - Shares or face value by investment as of December 30, 1993 and 1992
are as follows:
<CAPTION>
Shares by Investment
---------------------------------
Investment 1993 1992
---------- ---- ----
<S> <C> <C>
Managed Guaranteed Investment
Contract Fund 13,230,630 12,827,852
Fidelity U.S. Equity Index Portfolio 337,388 323,144
Fidelity Fund Inc. 109,776 77,330
Fidelity Puritan Fund 254,794 163,497
Brush Wellman Inc. Common Stock 830,713 695,534
Employee Benefit Money Market Fund 324,800 102,001
</TABLE>
In addition, $2,416,728 and $2,456,585 were invested in Participant Promissory
Notes as of December 30, 1993 and 1992, respectively.
-9-
<PAGE> 12
NOTE E - The net realized gain (loss) on sales of investments for the Plan
years ended December 30, 1993, 1992 and 1991 is as follows:
<TABLE>
<CAPTION>
1993
-----------------------------------------------------
Investment Shares Cost Proceeds Gain(Loss)
- ---------- ---------- ------------ ----------- ----------
<S> <C> <C> <C> <C>
Managed Guaranteed
Investment Contract Fund 1,126,525 $1,134,389 $1,185,729 $ 51,340
Fidelity U.S. Equity Index
Portfolio 38,291 588,895 651,164 62,269
Fidelity Fund Inc. 3,620 65,964 73,170 7,206
Fidelity Puritan Fund 872 12,037 13,909 1,872
Brush Wellman Inc. Common
Stock 14,468 580,968 165,557 (415,411)
----------
$(292,724)
=========
1992
-----------------------------------------------------
Investment Shares Cost Proceeds Gain(Loss)
- ---------- ---------- ------------ ----------- ----------
Managed Guaranteed
Investment Contract Fund 1,456,625 $1,456,626 $1,457,220 $ 594
Fidelity U.S. Equity Index
Portfolio 20,801 316,274 325,795 9,521
Fidelity Equity Income Fund 176,581 4,449,932 4,698,839 248,907
Fidelity Fund Inc. 6,546 117,082 123,069 5,987
Fidelity Puritan Fund 1,703 22,889 24,622 1,733
Brush Wellman Inc. Common
Stock 34,441 871,980 559,713 (312,267)
---------
$(45,525)
=========
1991
-----------------------------------------------------
Investment Shares Cost Proceeds Gain(Loss)
- ---------- ---------- ------------ ----------- ----------
Fidelity Equity Income 9,879 $ 248,745 $ 239,540 $ (9,205)
Fidelity Fund Inc. 4,750 83,242 89,758 6,516
Fidelity Puritan Fund 10,251 134,554 138,195 3,641
Brush Wellman Inc. Common Stock 14,644 387,656 243,013 (144,643)
----------
$(143,691)
==========
</TABLE>
The Department of Labor requires that realized gains and losses be
calculated using current cost (cost at the beginning of the Plan year) rather
than historical cost. Realized gains under the current cost method for the
year ended December 30, 1993 are as follows:
<TABLE>
<CAPTION>
Realized
Gain(Loss)
----------
<S> <C>
Managed Guaranteed Investment Contract Fund $41,848
Fidelity U.S. Equity Index Portfolio 22,953
Fidelity Fund Inc. 4,183
Fidelity Puritan Fund 1,004
Brush Wellman Inc. Common Stock (46,477)
-------
$23,511
=======
</TABLE>
-10-
<PAGE> 13
NOTE F - The unrealized appreciation (depreciation) of investments for the
Plan years ended December 30, 1993, 1992 and 1991 is as follows:
<TABLE>
<CAPTION>
Balance Balance
December 31 December 30
1992 Change 1993
--------------- ------ ---------------
<S> <C> <C> <C>
Managed Guaranteed Investment
Contract Fund $ 125,974 $ 885,906 $1,011,880
Fidelity U.S. Equity
Index Portfolio 366,829 236,668 603,497
Fidelity Fund Inc. 77,911 13,589 91,500
Fidelity Puritan Fund 184,025 157,850 341,875
Brush Wellman Inc. Common Stock (4,971,795) (224,335) (5,196,130)
----------
$1,069,678
==========
Balance Balance
December 31 December 30
1991 Change 1992
--------------- ------ ---------------
<S> <C> <C> <C>
Managed Guaranteed Investment
Contract Fund - $ 125,974 $ 125,974
Fidelity U.S. Equity
Index Portfolio - 366,829 366,829
Fidelity Equity Income Fund $ 199,503 (199,503) -
Fidelity Fund Inc. 51,019 26,892 77,911
Fidelity Puritan Fund 110,675 73,350 184,025
Brush Wellman Inc. Common Stock (6,730,801) 1,759,006 (4,971,795)
----------
$2,152,548
==========
Balance Balance
December 31 December 30
1990 Change 1991
--------------- ------ ---------------
<S> <C> <C> <C>
Fidelity Equity Income Fund $ (576,579) $ 776,082 $ 199,503
Fidelity Fund Inc. (47,111) 98,130 51,019
Fidelity Puritan Fund (103,964) 214,639 110,675
Brush Wellman Inc. Common Stock (6,494,543) (236,258) (6,730,801)
---------
$ 852,593
=========
</TABLE>
The Department of Labor requires that unrealized appreciation and
depreciation be calculated using current cost rather than historical cost.
Unrealized gains and losses under the current cost method for the year ended
December 30, 1993 are as follows:
-11-
<PAGE> 14
<TABLE>
<CAPTION>
Change in
Unrealized Gain(Loss)
---------------------
<S> <C>
Managed Guaranteed Investment Contract Fund $895,398
Fidelity U.S. Equity Index Portfolio 275,984
Fidelity Fund Inc. 16,612
Fidelity Puritan Fund 158,718
Brush Wellman Inc. Common Stock (593,269)
----------
$753,443
=========
</TABLE>
NOTE G - The Internal Revenue Service has determined that the Plan is
qualified under Internal Revenue Code Section 401(a) and that the related trust
is, therefore, tax-exempt under Code Section 501(a).
Continued qualification of the Plan depends upon timely adoption and
operational application of certain amendments required as a result of the Tax
Reform Act of 1986 (Act). In the Company's opinion, the Plan is operating in
compliance with the applicable provisions of the Act.
The Company is allowed a federal income tax deduction for its employer
matching contributions to the Plan.
The Plan provides, among other things, for contributions to be made to
the Plan pursuant to a qualified cash or deferred arrangement (CODA) under
Section 401(k) of the IRC. CODA contributions made to the Trust for a
participant will reduce a participant's current compensation and will not be
included in the gross income of the participant for federal income tax purposes
in the year made. Such amounts will, however, be considered as part of the
participant's gross income for purposes of Social Security taxes.
Non-CODA contributions withheld under the Plan from a participant
through payroll deductions will be included in the gross income of the
participant in the year withheld and are not deductible by the participant for
federal income tax purposes.
A participant does not become subject to federal income taxes as a
result of their participation in the Plan until the assets in their account are
withdrawn by, or distributed to, the participant.
NOTE H - The Plan was amended on October 22, 1991. Amendment No. 3 provides
for administration of accounts and distributions under qualified domestic
relations orders and defines the term immediate and heavy financial need for
purposes of hardship withdrawals.
On October 1, 1992, the plan assets of the Electrofusion Corporation
401(k) Tax Deferred Savings Plan were merged into the Plan. The market value
of the merged assets was $285,718 and has been reflected in the Statement of
Changes in Plan Equity as an Investment Election Change.
-12-
<PAGE> 15
EIN-34-0119320
PN 003
BRUSH WELLMAN INC.
SAVINGS & INVESTMENT PLAN
DECEMBER 30, 1993
Item 30a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES:
<TABLE>
<CAPTION>
CURRENT
INVESTMENTS DESCRIPTION COST VALUE
----------- ----------- ----------- -----------
<S> <C> <C> <C>
Brush Wellman Inc. Common Stock Common Stock $17,033,792 $11,837,660
Managed Guaranteed Investment Contract Fund Bank Common/ $13,295,724 $14,307,606
Collective Trust
Fidelity U.S. Equity Index Portfolio Mutual Fund $5,223,194 $5,826,691
Fidelity Fund Inc. Mutual Fund $2,023,888 $2,115,389
Fidelity Puritan Fund Mutual Fund $3,671,135 $4,013,010
Participant Promissory Notes Participant Loans $2,416,728 $2,416,728
Employee Benefits Money Market Fund Bank Common/ $324,800 $324,800
Collective Trust
</TABLE>
-13-
<PAGE> 16
DECEMBER 31, 1993 R-773
SOCIETY NATIONAL BANK
BRUSH WELLMAN INC SAV/INV CONS
THE BEGINNING PLAN VALUE AGAINST WHICH TRANSACTIONS WERE TESTED FOR
PURPOSES OF THIS SET OF REPORTS WAS $35,569,198.02
30896100 BRUSH WELLMAN INC SAV/INV STOCK FD
30896106 BRUSH WELLMAN INC SAV/INV INCOME FD
30896109 BRUSH WELLMAN INC PAYSOP S/V/P
30896112 BRUSH WELLMAN INC CONT ACCT S/P/P
30896115 BRUSH WELLMAN SAV/INC LOAN FD S/P/P
30896118 BRUSH WELLMAN INC SVGS INVT EQ FD A
30896121 BRUSH WELLMAN INC SVGS INVT EQ FD B
30896124 BRUSH WELLMAN INC SVGS INVT EQ FD C
PSN 1
-14-
<PAGE> 17
BRUSH WELLMAN INC SAV/INV CONS DECEMBER 31, 1993 R-776
<TABLE>
SUMMARY OF PURCHASES AND/OR SALES IN SAME ISSUE IN EXCESS OF 5% OF BEGINNING PLAN VALUE
<CAPTION>
----------PURCHASES---------- ----------------------SALES----------------------
TRANSACTION DESCRIPTION # TRANS COST # TRANS PROCEEDS GAIN OR LOSS
======================== ======= ============== ========= ============ ============
<S> <C> <C> <C> <C> <C>
BRUSH WELLMAN INC. 25 1,954,901.59 0 0.00 0.00
COM & RT PUR PFD STK EXP 01-26-98
EMPLOYEE BENEFITS MONEY 303 12,263,523.22 324 12,040,724.26 0.00
RETIREMENT TRUST
SHORT TERM FUND
SOCIETY NATIONAL BANK 31 1,601,238.99 16 1,185,730.06 51,340.91
RETIREMENT TRUST
AMERITRUST MAGIC FUND
GRAND TOTAL: 359 15,819,663.80 340 13,226,454.32 51,340.91
</TABLE>
PSN 2 R-776-0001
-15-
<PAGE> 18
[LOGO]
27600 Chargin Boulevard
Suite 200
Cleveland, Ohio 44122-4421
216.464.7481
Fax 216.464.7581
RICHARD A. WRIGHT
ANTHONY J. WESLEY
MARK G. MILLS
WILLIAM M. POTOCZAK
_________
KENNETH E. NOWAK
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Annual
Report on Form 10-K under the Securities Exchange Act of 1934 of Brush Wellman
Inc. for the year ended December 31, 1993 of our report dated March 17, 1994,
with respect to the financial statements and schedules of the Brush Wellman
Inc. Savings and Investment Plan included in this Annual Report (11-K) for the
year ended December 30, 1993.
Wright, Wesley & Mills, P.C.
/S/ Wright, Wesley & Mills, P.C.
Cleveland, Ohio
March 17, 1994
-16-
<PAGE> 1
Exhibit 99(b)
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
_____
|__X__| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 30, 1993
OR
_____
|_____| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _______ to ________
Commission file number 1-7006
WILLIAMS ADVANCED MATERIALS INC.
SAVINGS AND INVESTMENT PLAN
(Full Title of the Plan)
BRUSH WELLMAN INC.
17876 St. Clair Avenue
Cleveland, Ohio 44110
(Name of issuer of the securities held
pursuant to the plan and the address
of its principal executive office.)
<PAGE> 2
WILLIAMS ADVANCED MATERIALS INC.
SAVINGS AND INVESTMENT PLAN
<TABLE>
<CAPTION>
REQUIRED INFORMATION
- --------------------
<S> <C>
Page No.
1. Report of Independent Auditors. 1
2. Statements of Financial Condition -
December 30, 1993 and 1992. 2-3
3. Statements of Income and Changes in Plan
Equity - Plan years ended December 30, 1993,
1992 and 1991. 4-6
4. Notes to Financial Statements. 7-12
5. Schedules required to be filed under ERISA.
a. Schedule of Assets held for Investment
Purposes. 13
b. Schedule of Reportable Transactions. 14-15
6. Consent of Independent Auditors. 16
</TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Plan has duly caused this annual report to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cleveland, State of
Ohio, on the 17th day of March, 1994.
WILLIAMS ADVANCED MATERIALS INC.
SAVINGS AND INVESTMENT PLAN
By /s/ Dennis L. Habrat
----------------------
Member of the Administrative
Committee
<PAGE> 3
[LOGO] 27600 Chagrin Boulevard
Suite 200
Cleveland, Ohio 44122-4421
216.464.7481
FAX 216.464.7581
Richard A. Wright
Anthony J. Wesley
Mark G. Mills
William M. Potoczak
- -------------------
Kenneth E. Nowak
Report of Independent Auditors
------------------------------
Administrative Committee of
Williams Advanced Materials Inc.
Savings and Investment Plan
We have audited the financial statements of Williams Advanced
Materials Inc. Savings and Investment Plan listed in the Annual Report on Form
11-K as of and for the years ended December 30, 1993 and 1992. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audit. The
financial statements of Williams Advanced Materials Inc. Savings and Investment
Plan for 1991 as listed in the Annual Report on Form 11-K were audited by
other auditors whose report dated April 1, 1992, expressed an unqualified
opinion on those statements.
We conducted our audits in accordance with generally accepted
auditing standards. Those 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 listed in the Annual
Report on Form 11-K present fairly, in all material respects, the financial
position of Williams Advanced Materials Inc. Savings and Investment Plan at
December 30, 1993 and 1992, the results of its operations and changes in its
plan equity for the years then ended in conformity with generally accepted
accounting principles.
Our audit was made for the purpose of forming an opinion on
the financial statements taken as a whole. The accompanying supplemental
schedules of assets held for investment purposes as of December 30, 1993 and
reportable transactions for the year ended December 30, 1993 are presented for
purposes of complying with the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974, and are not a required part of the financial statements. The
supplemental schedules have been subjected to the auditing procedures applied
in our audit of the financial statements and, in our opinion, are fairly stated
in all material respects in relation to the financial statements taken as a
whole.
Wright, Wesley & Mills, P.C.
/S/ Wright, Wesley & Mills, P.C.
March 17, 1994 -1-
<PAGE> 4
WILLIAMS ADVANCED MATERIALS INC.
SAVINGS AND INVESTMENT PLAN
STATEMENT OF FINANCIAL CONDITION
DECEMBER 30, 1993
<TABLE>
<CAPTION>
INCOME EQUITY EQUITY EQUITY STOCK LOAN
ASSETS FUND FUND A FUND B FUND C FUND FUND TOTAL
-------- ---------- ---------- --------- --------- --------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Brush Wellman Inc. Common Stock
(cost $533,504) $471,248 $471,248
Managed Guaranteed Investment
Contract Fund (cost $1,818,095) $1,954,893 1,954,893
Fidelity Equity Index Portfolio
(cost $161,556) $176,436 176,436
Fidelity Fund Inc.
(cost $213,147) $216,602 216,602
Fidelity Puritan Fund
(cost $269,942) $277,245 277,245
Participant Promissory Notes
(cost $82,993) $82,993 82,993
Employee Benefits Money Market
Fund (cost $14,654) 10,620 4,034 14,654
---------- ------------- ---------- ---------- --------- ---------- ------------
1,954,893 176,436 216,602 277,245 481,868 87,027 3,194,071
Contribution Receivable
Company 12,184 12,184
401(k) 23,413 2,563 2,975 3,973 762 33,686
Participant 515 144 216 216 1,091
---------- ------------- ---------- ---------- --------- ---------- ------------
23,928 2,707 3,191 4,189 12,946 46,961
Interest Receivable 5 5 6 8 30 18 72
Dividends Receivable 1,384 1,623 3,007
Other 40 4 4 7 (277) (222)
---------- ------------- ---------- ---------- --------- ---------- ------------
45 1,393 10 15 1,376 18 2,857
---------- ------------- ---------- ---------- --------- ---------- ------------
TOTAL ASSETS $1,978,866 $180,536 $219,803 $281,449 $496,190 $87,045 $3,243,889
=========== ============= ========== ========== =========== ========== ===========
LIABILITIES & PLAN EQUITY
---------------------------
Liabilities:
Benefits Payable $46,312 $46,312
Other (5,218) $1,605 ($464) ($2,177) $8,113 $8,141 10,000
Plan Equity 1,937,772 178,931 220,267 283,626 488,077 78,904 3,187,577
---------- ------------- ---------- ---------- --------- ---------- ------------
TOTAL LIABILITIES & PLAN EQUITY $1,978,866 $180,536 $219,803 $281,449 $496,190 $87,045 $3,243,889
=========== ============= ========== ========== =========== ========== ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
-2-
<PAGE> 5
WILLIAMS ADVANCED MATERIALS INC.
SAVINGS AND INVESTMENT PLAN
STATEMENT OF FINANCIAL CONDITION
DECEMBER 30, 1992
<TABLE>
<CAPTION>
INCOME EQUITY EQUITY EQUITY STOCK LOAN
ASSETS FUND FUND A FUND B FUND C FUND FUND TOTAL
------ ----- ------ ------- ------- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Brush Wellman Inc. Common Stock
(cost $419,545) $372,521 $372,521
Managed Guaranteed Investment
Contract Fund
(cost $1,731,927) $1,748,919 1,748,919
Fidelity Equity Index Portfolio
(cost $121,008) $129,454 129,454
Fidelity Fund Inc.
(cost $119,142) $122,818 122,818
Fideltiy Puritan Fund
(cost $95,838) $100,731 100,731
Participant Promissory Notes
(cost $95,001) $95,001 95,001
Ameritrust Retirement Short Term
Fund (cost $4,193) 645 3,548 4,193
---------- -------- --------- ---------- --------- ---------- -----------
1,748,919 129,454 122,818 100,731 373,166 98,549 2,573,637
Contribution Receivable:
Company 10,816 10,816
401(k) 20,983 2,359 3,134 1,776 1,348 29,600
Participant 271 271
---------- ------- ---------- ---------- ---------- ---------- ----------
21,254 2,359 3,134 1,776 12,164 40,687
Interest Receivable 5 3 5 3 25 13 54
Dividends Receivable 2,590 2,590
Other 264 1,268 5,902 7,434
---------- ------- ---------- ---------- ---------- ---------- ----------
5 267 1,273 5,905 2,615 13 10,078
---------- ------- ---------- ---------- ---------- ---------- ----------
TOTAL ASSETS $1,770,178 $132,080 $127,225 $108,412 $387,945 $98,562 $2,624,402
========== ======== ========== ========== ========== ========== ==========
LIABILITIES & PLAN EQUITY
-------------------------
Liabilities:
Benefits Payable $2,650 $2,680 $112 $5,442
Other ($13,173) ($305) (8,701) (582) 15,496 $7,265
Plan Equity 1,783,351 132,385 133,276 106,314 372,337 91,297 2,618,960
---------- ---------- ---------- ---------- ---------- ---------- ---------
TOTAL LIABILITIES & PLAN EQUITY $1,770,178 $132,080 $127,225 $108,412 $387,945 $98,562 $2,624,402
========== ========== ========== ========== ========= ========== ==========
<FN>
See accompanying notes to financial statements.
</TABLE>
-3-
<PAGE> 6
WILLIAMS ADVANCED MATERIALS INC.
SAVINGS AND INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
YEAR ENDED DECEMBER 30, 1993
<TABLE>
<CAPTION>
INCOME EQUITY EQUITY EQUITY STOCK LOAN
FUND FUND A FUND B FUND C FUND FUND TOTAL
-------- -------- -------- -------- -------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends $4,131 $3,827 $8,339 $5,781 $22,078
Interest $223 103 51 78 289 $4,548 5,292
Other Income (Expense) (6,974) 2,304 24,051 19,883 (277) 38,987
--------- -------- -------- -------- -------- --------- -------
(6,751) 6,538 27,929 28,300 5,793 4,548 66,357
Realized Gain (Loss) on
Investments--Note E 6,654 1,882 163 780 (86) 9,393
Unrealized Appreciation (Depreciation)
on Investments--Note F 119,805 6,435 (220) 2,410 (15,233) 113,197
Contributions--Note B:
Company 132,536 132,536
401(k) 257,827 33,855 32,550 37,632 10,563 372,427
Participant 5,022 168 252 252 5,694
--------- -------- -------- -------- -------- --------- -------
262,849 34,023 32,802 37,884 143,099 510,657
Investment Election Change (131,103) 2,077 26,037 102,578 411
Loan Transfers 21,631 (4,231) 460 5,481 (13,417) (9,924)
Unallocated Loan Payments (7,017) (7,017)
Withdrawls and
Terminations--Note C 118,664 178 180 121 4,827 123,970
--------- -------- -------- -------- -------- --------- -------
Income and Changes in Plan Equity 154,421 46,546 86,991 177,312 115,740 (12,393) 568,617
Plan Equity at Beginning of the Year 1,783,351 132,385 133,276 106,314 372,337 91,297 2,618,960
--------- -------- -------- -------- -------- --------- -------
Plan Equity at End of the Year $1,937,772 $178,931 $220,267 $283,626 $488,077 $78,904 $3,187,577
========= ======== ======== ======== ======== ======= ==========
<FN>
See accompanying notes to financial statements.
</TABLE>
-4-
<PAGE> 7
WILLIAMS ADVANCED MATERIALS INC.
SAVINGS AND INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
YEAR ENDED DECEMBER 30, 1992
<TABLE>
<CAPTION>
INCOME EQUITY EQUITY EQUITY STOCK LOAN
FUND FUND A FUND B FUND C FUND FUND TOTAL
------ ------ ------ ------- ------ ---- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends $3,411 $2,638 $4,856 $5,886 $16,791
Interest $101,681 46 49 25 278 $5,623 107,702
Other Income (Expense) (6,139) 3,561 4,338 (1,213) 547
---------- -------- ------ ------ ------- ------ -------
95,542 3,457 6,248 9,219 4,951 5,623 125,040
Realized Gain (Loss) on
Investments--Note E 19 (5) 106 286 (1,715) (1,309)
Unrealized Appreciation
(Depreciation) on
Investments--Note F 16,992 9,413 2,249 2,823 42,580 74,057
Contributions--Note B
Company 115,079 115,079
401(k) 231,597 24,735 34,461 19,618 13,220 323,631
Participant 4,750 4,750
--------- -------- ------ ------- -------- ------- --------
236,347 24,735 34,461 19,618 128,299 443,460
Investment Election Change (5,250) 17,466 15,805 9,257 (37,278)
Loan Transfers 12,442 (2,998) 1,358 690 (24,440) 12,948
Unallocated Loan Payments 4,886 4,886
Withdrawals and
Terminations--Note C 76,102 299 4,069 2,972 19,835 874 104,151
--------- -------- ------ ------- -------- ------- --------
Income and Changes in Plan
Equity 279,990 51,769 56,158 38,921 92,562 22,583 541,983
Plan Equity at Beginning of
the year 1,503,361 80,616 77,118 67,393 279,775 68,714 2,076,977
--------- -------- ------ ------- -------- ------- --------
Plan Equity at End of the
Year $1,783,351 $132,385 $133,276 $106,314 $372,337 $91,297 $2,618,960
========== ======== ========= ========= ========= ======== ==========
<FN>
See accompanying notes to financial statements.
</TABLE>
-5-
<PAGE> 8
WILLIAMS ADVANCED MATERIALS INC.
SAVINGS AND INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
YEAR ENDED DECEMBER 30, 1991
<TABLE>
<CAPTION>
INCOME EQUITY EQUITY EQUITY STOCK LOAN
FUND FUND A FUND B FUND C FUND FUND TOTAL
---------- ---------- --------- --------- --------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends $3,556 $1,850 $3,179 $8,479 $17,064
Interest $117,533 69 90 62 425 $4,878 123,057
Other Income (Expense) (2,695) 120 4,254 32 3,074 4,785
--------- ------- ------- ------ ------- ------- --------
114,838 3,745 6,194 3,273 11,978 4,878 144,906
Realized Gain (Loss) on
Investments--Note E (2,145) 1,115 (153) (1,183)
Unrealized Appreciation
(Depreciation)
on Investments--Note F 17,485 7,276 7,526 (28,396) 3,891
Contributions--Note B
Company 107,481 107,481
401(k) 222,522 15,883 22,191 20,054 18,144 298,794
Participant 4,366 26 26 26 26 4,470
--------- ------- ------- ------ ------- ------- --------
226,888 15,909 22,217 20,080 125,651 410,745
Investment Election Change (18,895) (3,246) (13,228) 968 34,401
Loan Transfers (9,330) 235 378 309 (15,392) 23,800
Unallocated Loan Payments 78 78
Withdrawals and
Terminations--Note C 165,479 20,119 7,148 3,463 19,292 14,144 229,645
--------- ------- ------- ------ ------- ------- --------
Income and Changes in Plan
Equity 148,022 11,864 16,804 28,540 108,950 14,612 328,792
Plan Equity at Beginning
of the Year 1,355,339 68,752 60,314 38,853 170,825 54,102 1,748,185
--------- ------- ------- ------ ------- ------- --------
Plan Equity at End of
the Year $1,503,361 $80,616 $77,118 $67,393 $279,775 $68,714 $2,076,977
========== ======= ======= ======= ======== ======== ==========
<FN>
See accompanying notes to financial statements.
</TABLE>
-6-
<PAGE> 9
NOTES TO FINANCIAL STATEMENTS
WILLIAMS ADVANCED MATERIALS INC.
SAVINGS AND INVESTMENT PLAN
DECEMBER 30, 1993, 1992 AND 1991
NOTE A - The accounting records of the Williams Advanced Materials Inc. Savings
and Investment Plan (Plan) are maintained on the accrual basis. Investments
are stated at current market value. Investment in securities traded on national
securities exchanges are valued at latest reported closing price. Investment
in participant units of the Managed Guaranteed Investment Contract Fund and the
Employee Benefits Money Market Fund are stated at market value as determined by
the Trustee. Cost is determined by the average cost method.
NOTE B - The Plan is a defined contribution plan which covers certain eligible
employees with one year of eligibility service with Williams Advanced Materials
Inc. (Company), a wholly owned subsidiary of Brush Wellman Inc. (Parent
Company). An employee shall be credited with a year of eligibility service if
he is credited with at least 1,000 hours of service in any twelve consecutive
month period beginning with a date of hire or rehire of the employee (or an
anniversary of the latest such date).
The Plan provides for basic contributions on behalf of employees up to
6% of their earnings through either salary reduction or employee after-tax
contributions. Basic contributions were matched by the Company at the rate of
50% of such contributions. The rate at which such basic contributions are
matched by the Company may be decreased or increased (up to 100%) by action of
the Company's Board of Directors.
An employee who makes basic contributions of 6% of earnings may also
make supplemental contributions of up to 9% of earnings which are not matched
by Company contributions and which may be made in any combination of salary
reduction and/or after-tax contributions.
An employee's contributions made to the Plan on a salary reduction basis
may not exceed certain maximum amounts. The maximum amounts were $8,994 in
1993, $8,728 in 1992 and $8,475 in 1991. All employee and Company matching
contributions are fully vested at all times.
Participants may direct that their basic, supplemental and transfer
contributions (as described in the Plan) be invested in one or more of the
Income Fund, Equity Fund A, Equity Fund B, Equity Fund C, and the Company Stock
Fund in increments of 10%. Prior to July 1, 1991, such direction was able to
be revised by participants on April 1 or October 1. Beginning July 1, 1991
revisions may also be made on July 1 and December 31. All Company matching
contributions are invested in the Company Stock Fund except with respect to
participants age 59 1/2 or older who may transfer such contributions to other
investment funds.
-7-
<PAGE> 10
The Income Fund invests primarily in the Managed Guaranteed Investment
Contract Fund, the objective of which is to achieve high current income with
stability of principal. The fund is primarily invested in Guaranteed
Investment Contracts.
Equity Fund A began investing primarily in Fidelity U.S. Equity Index
Portfolio April 1, 1992. This fund is a growth and income fund. It seeks a
yield that corresponds with the total return of the S&P 500 Index. The fund's
share price will fluctuate and dividend amounts will vary. Prior to that,
Equity Fund A invested primarily in Fidelity Equity Income Fund.
Equity Fund B invests primarily in the Fidelity Fund. This fund seeks
long-term capital growth and current return on capital and will select some
securities for their income characteristics, which may limit the potential for
growth. The fund's share price and dividend income will fluctuate as the value
and yields of the securities in its investment portfolio fluctuate.
Equity Fund C invests primarily in Fidelity Puritan Fund. This fund is
a growth and income fund. It seeks capital growth in addition to regular
quarterly dividends. It invests in a broadly diversified portfolio of common
stocks, preferred stocks and bonds, including lower-quality, high yield debt
securities. The fund's share price will fluctuate and dividend amounts will
vary.
The Company Stock Fund invests primarily in Brush Wellman Inc. Common
Stock.
Prior to June 1, 1989, participants could have directed a portion of
their contributions to be used to purchase insurance policies that were
excluded from Plan assets. Life insurance policies on the lives of
participants, purchased under the Plan prior to July 1, 1989, may continue to
be held.
A participant may borrow funds from their account, provided the loan is
secured by the participant's interest in their account and evidenced by a
promissory note executed by the participant. The promissory notes are held in
trust as a separate fund, Loan Fund, of the Plan.
All costs and expenses incurred in connection with the administration of
the Plan for 1993, 1992 and 1991 were paid by the Company.
Information concerning the Plan agreement and the vesting and benefit
provisions is contained in the Summary Plan Description. Copies of this
pamphlet are available from the Plan administrator.
NOTE C - At retirement, death or other termination, a participant (or his death
beneficiary) is eligible to receive a distribution of all employee and Company
matching contributions credited to the employee's account plus or minus any net
gain or loss thereon.
-8-
<PAGE> 11
The value of distributions and withdrawals is based on the value of a
participant's account on the valuation date immediately preceding the date of
distribution or withdrawal and is deducted from the participant's account as of
such valuation date.
Distribution to a participant or a person designated by the participant
as his death beneficiary is made under one of the following methods as elected
by the participant:
(i) lump sum payment in cash; or
(ii) lump sum payment in cash, except that a participant's interest
in the Company Stock Fund will be paid in full shares of
Common Stock of the Parent Company, with any fractional shares
being paid in cash.
(iii) under either method (i) or (ii) with respect to that portion
of the participant's benefit under the provisions of the Plan
in effect after June 30, 1989, and in an annuity contract with
respect to that portion of the participant's benefit under the
provisions of the Plan in effect prior to July 1, 1989 if the
distribution is greater than $3,500.
<TABLE>
NOTE D - Shares or face value by investment as of December 30, 1993 and 1992
are as follows:
<CAPTION>
Shares by Investment
---------------------------------
Investment 1993 1992
---------- ---- ----
<S> <C> <C>
Managed Guaranteed Investment
Contract Fund 1,807,743 1,731,774
Fidelity U.S. Equity Index Portfolio 10,216 7,903
Fidelity Fund Inc. 11,240 6,485
Fidelity Puritan Fund 17,603 6,834
Brush Wellman Inc. Common Stock 33,070 24,229
Employee Benefit Money Market Fund 14,654 4,193
<FN>
In addition, $82,993 and $95,001 were invested in Participant Promissory Notes
as of December 30, 1993 and 1992, respectively.
</TABLE>
-9-
<PAGE> 12
<TABLE>
NOTE E - The net realized gain (loss) on sales of investments for the Plan
years ended December 30, 1993, 1992 and 1991 is as follows:
<CAPTION>
1993
-----------------------------------------------------
Investment Shares Cost Proceeds Gain(Loss)
- ---------- ---------- ------------ ----------- ----------
<S> <C> <C> <C> <C>
Managed Guaranteed
Investment Contract Fund 157,790 $158,059 $164,713 $6,654
Fidelity U.S. Equity Index
Portfolio 1,250 19,599 21,481 1,882
Fidelity Fund Inc. 134 2,481 2,644 163
Fidelity Puritan Fund 705 9,954 10,734 780
Brush Wellman Inc. Common Stock 67 1,158 1,072 (86)
--------
$9,393
=======
1992
-----------------------------------------------------
Investment Shares Cost Proceeds Gain(Loss)
- ---------- ---------- ------------ ----------- ----------
Managed Guaranteed
Investment Contract Fund 141,510 $141,510 $141,529 $ 19
Fidelity U.S. Equity Index
Portfolio 570 8,686 8,767 81
Fidelity Equity Income Fund 3,161 84,221 84,135 (86)
Fidelity Fund Inc. 248 4,552 4,658 106
Fidelity Puritan Fund 400 5,615 5,901 286
Brush Wellman Inc. Common Stock 1,977 34,556 32,841 (1,715)
-------
$(1,309)
=======
1991
-----------------------------------------------------
Investment Shares Cost Proceeds Gain(Loss)
- ---------- ---------- ------------ ----------- ----------
Fidelity Equity Income Fund 953 $25,617 $23,472 $(2,145)
Fidelity Fund Inc. 1,229 22,204 23,319 1,115
Fidelity Puritan Fund 580 7,956 7,803 (153)
--------
$(1,183)
========
</TABLE>
The Department of Labor requires that realized gains and losses be
calculated using current cost (cost at the beginning of the Plan year) rather
than historical cost. Realized gains under the current cost method for the
year ended December 30, 1993 are as follows:
<TABLE>
<CAPTION>
Realized
Gain
--------
<S> <C>
Managed Guaranteed Investment Contract Fund $5,204
Fidelity U.S. Equity Index Portfolio 881
Fidelity Fund Inc. 93
Fidelity Puritan Fund 323
Brush Wellman Inc. Common Stock 42
--------
$6,543
======
</TABLE>
-10-
<PAGE> 13
NOTE F - The unrealized appreciation (depreciation) of investments for the
Plan years ended December 30, 1993, 1992 and 1991 is as follows:
<TABLE>
<CAPTION>
Balance Balance
December 31 December 30
1992 Change 1993
--------------- ------ ---------------
<S> <C> <C> <C>
Managed Guaranteed Investment
Contract Fund $ 16,992 $119,805 $136,797
Fidelity U.S. Equity
Index Portfolio 8,446 6,435 14,881
Fidelity Fund Inc. 3,676 (220) 3,456
Fidelity Puritan Fund 4,893 2,410 7,303
Brush Wellman Inc.
Common Stock (47,024) (15,233) (62,257)
----------
$113,197
=========
Balance Balance
December 31 December 30
1991 Change 1992
--------------- ------ ---------------
<S> <C> <C> <C>
Managed Guaranteed Investment
Contract Fund - $ 16,992 $ 16,992
Fidelity U.S. Equity
Index Portfolio - 8,446 8,446
Fidelity Equity Income Fund $ (967) 967 -
Fidelity Fund Inc. 1,427 2,249 3,676
Fidelity Puritan Fund 2,070 2,823 4,893
Brush Wellman Inc.
Common Stock (89,604) 42,580 (47,024)
--------
$ 74,057
========
Balance Balance
December 31 December 30
1990 Change 1991
--------------- ------ ---------------
<S> <C> <C> <C>
Fidelity Equity Income Fund $(18,452) $ 17,485 $ (967)
Fidelity Fund Inc. (5,849) 7,276 1,427
Fidelity Puritan Fund (5,456) 7,526 2,070
Brush Wellman Inc.
Common Stock (61,208) (28,396) (89,604)
--------
$ 3,891
========
</TABLE>
-11-
<PAGE> 14
The Department of Labor requires that unrealized appreciation and
depreciation be calculated using current cost rather than historical cost.
Unrealized gains and losses under the current cost method for the year ended
December 30, 1993 are as follows:
<TABLE>
<CAPTION>
Change in
Unrealized Gain(Loss)
---------------------
<S> <C>
Managed Guaranteed Investment Contract Fund $121,255
Fidelity U.S. Equity Index Portfolio 7,436
Fidelity Fund Inc. (150)
Fidelity Puritan Fund 2,867
Brush Wellman Inc. Common Stock (15,361)
----------
$116,047
==========
</TABLE>
NOTE G - The Internal Revenue Service has determined that the Plan is
qualified under Internal Revenue Code Section 401(a) and that the related trust
is, therefore, tax-exempt under Code Section 501(a).
Continued qualification of the Plan depends upon timely adoption and
operational application of certain amendments required as a result of the Tax
Reform Act of 1986 (Act). In the Company's opinion, the Plan is operating in
compliance with the applicable provisions of the Act.
The Company is allowed a federal income tax deduction for its employer
matching contributions to the Plan.
The Plan provides, among other things, for contributions to be made to
the Plan pursuant to a qualified cash or deferred arrangement (CODA) under
Section 401(k) of the IRC. CODA contributions made to the Trust for a
participant will reduce a participant's current compensation and will not be
included in the gross income of the participant for federal income tax purposes
in the year made. Such amounts will, however, be considered as part of the
participant's gross income for purposes of Social Security taxes.
Non-CODA contributions withheld under the Plan from a participant
through payroll deductions will be included in the gross income of the
participant in the year withheld and are not deductible by the participant for
federal income tax purposes.
A participant does not become subject to federal income taxes as a
result of their participation in the Plan until the assets in their account are
withdrawn by, or distributed to, the participant.
-12-
<PAGE> 15
EIN 16-0690610
PN 002
WILLIAMS ADVANCED MATERIALS INC.
SAVINGS & INVESTMENT PLAN
DECEMBER 30, 1993
Item 30a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES:
<TABLE>
<CAPTION>
CURRENT
INVESTMENTS DESCRIPTION COST VALUE
----------- ----------- ----- ----------
<S> <C> <C> <C>
Brush Wellman Inc. Common Stock Common Stock $533,504 $471,248
Managed Guaranteed Investment Contract Fund Bank Common/ $1,818,095 $1,954,893
Collective Trust
Fidelity U.S. Equity Index Portfolio Mutual Fund $161,556 $176,436
Fidelity Fund Inc. Mutual Fund $213,147 $216,602
Fidelity Puritan Fund Mutual Fund $269,942 $277,245
Participant Promissory Notes Participant Loans $82,993 $82,993
Employee Benefits Money Market Fund Bank Common/ $14,654 $14,654
Collective Trust
</TABLE>
-13-
<PAGE> 16
DECEMBER 31, 1993 R-773
SOCIETY NATIONAL BANK
TRUSTEE FOR
WILLIAMS GOLD REFINING COMPANY
SAVINGS AND INVESTMENT PLAN
CONSOLIDATED ERISA
THE BEGINNING PLAN VALUE AGAINST WHICH TRANSACTIONS WERE TESTED FOR
PURPOSES OF THIS SET OF REPORTS WAS $2,583,714.59
31649900 WILLIAMS ADV MATERIALS EQ FD A SVP
31649903 WILLIAMS ADV MATERIALS EQ FD B SVP
31649906 WILLIAMS ADV MATERIALS EQ FD C SVP
31649909 WILLIAMS ADV MATERIALS INCOME S/V/P
31649912 WILLIAMS ADV MATERIALS CO STOCK SVP
31649915 WILLIAMS ADV MATERIALS CONTRIB SVP
31649918 WILLIAMS ADV MATERIALS LOAN S/V/P
31649921 WILLIAMS ADV MATERIALS LIFE INS SVP
PSN 4
-14-
<PAGE> 17
WILLIAMS ADV MATERIALS VAL CONS DECEMBER 31, 1993 R-776
<TABLE>
SUMMARY OF PURCHASES AND/OR SALES IN SAME ISSUE IN EXCESS OF 5% OF BEGINNING PLAN VALUE
<CAPTION>
--------------PURCHASES-------- ----------------------SALES---------------------
TRANSACTION DESCRIPTION # TRANS COST # TRANS PROCEEDS GAIN OR LOSS
======================================== =========== ============ =========== ============ ==============
<S> <C> <C> <C> <C> <C>
EMPLOYEE BENEFITS MONEY 247 984,998.80 173 974,537.71 0.00
RETIREMENT TRUST
SHORT TERM FUND
FIDELITY PURITAN FUND 20 164,182.04 2 10,734.22 780.37
SH BEN INT NO PAR
SOCIETY NATIONAL BANK 23 244,229.10 10 164,713.61 6,654.29
RETIREMENT TRUST
AMERITRUST MAGIC FUND
GRAND TOTAL: 290 1,393,409.94 185 1,149,985.54 7,434.66
</TABLE>
PSN 5 R-776-0001
-15-
<PAGE> 18
[LOGO] 27600 Chagrin Boulevard
Suite 200
Cleveland, Ohio 44122-4421
216.464.7481
Fax 216.464.7481
Richard A. Wright
Anthony J. Wesley
Mark G. Mills
William M. Potoczak
Kenneth E. Nowak
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Annual
Report on Form 10-K under the Securities Exchange Act of 1934 of Brush Wellman
Inc. for the year ended December 31, 1993 of our report dated March 17, 1994,
with respect to the financial statements and schedules of the Williams Advanced
Materials Inc. Savings and Investment Plan included in this Annual Report
(11-K) for the year ended December 30, 1993.
Wright, Wesley & Mills, P.C.
/S/ Wright, Wesley & Mills, P.C.
Cleveland, Ohio
March 17, 1994
-16-
