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FILED PURSUANT TO RULE 424(b)(1)
REGISTRATION NO. 333-11783
PROSPECTUS
150,000 Shares
K-TRON INTERNATIONAL, INC.
Common Stock
($.01 Par Value)
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The shares offered hereby (the "Shares") consist of up to
150,000 shares of common stock, $.01 par value per share (the "Common Stock"),
of K-Tron International, Inc., a New Jersey corporation (the "Company"). The
Shares may be offered from time to time by the Selling Shareholder identified
herein. See "Selling Shareholder." The Selling Shareholder offering the
Shares covered by this Prospectus is a director of the Company.
The Company will not receive any part of the proceeds from the
sale of the Shares. All expenses of registration incurred in connection
herewith are being borne by the Selling Shareholder.
The Selling Shareholder has not advised the Company of any
specific plans for the distribution of the Shares covered by this Prospectus,
but it is anticipated that the Shares will be sold from time to time in
negotiated transactions and in transactions (which may include block
transactions) on the Nasdaq National Market of The Nasdaq Stock Market at the
market price then prevailing, although sales may also be made as described
herein under "Plan of Distribution." The Selling Shareholder and the brokers
and dealers through whom sale of the Shares may be made may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended,
and their commissions or discounts and other compensation may be regarded as
underwriters' compensation. See "Plan of Distribution."
THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" COMMENCING ON PAGE 3 OF THIS PROSPECTUS.
The Company's Common Stock is quoted on the Nasdaq National
Market under the symbol "KTII." On September 18, 1996, the last reported sale
price of the Common Stock was $8.25 per share.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESEN-
TATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is September 19, 1996.
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AVAILABLE INFORMATION
This Prospectus constitutes a part of a registration statement on Form
S-3 (herein, together with all exhibits thereto, referred to as the
"Registration Statement") filed by the Company with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the securities offered hereby. This
Prospectus does not contain all the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. Reference is hereby made to the Registration
Statement and to the exhibits thereto for further information with respect to
the Company and the securities offered hereby. Copies of the Registration
Statement and the exhibits thereto are on file at the offices of the Commission
and may be obtained upon payment of the prescribed fee or may be examined
without charge at the public reference facilities of the Commission described
below.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information
with the Commission. Such reports, proxy statements and other information can
be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at
the Commission's regional offices located at Seven World Trade Center, New
York, New York 10048 and Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material can be obtained
in person from the Public Reference Section of the Commission at its principal
office located at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Reports and proxy statements concerning the Company also may be
inspected at the offices of the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., Washington, D.C. 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or portions of documents filed by the Company
(File No. 0-9576) with the Commission are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the
fiscal year ended December 30, 1995.
(b) The Company's Quarterly Reports on Form 10-Q for the
quarterly periods ended March 30, 1996 and June 29, 1996.
(c) The description of the Company's Common Stock, $.01
par value (the "Common Stock"), which is contained in the Company's
Registration Statement on Form 8-A filed with the Commission under the
Exchange Act, on March 19, 1981, including any amendment or report
filed for the purpose of updating such description.
All reports and other documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of this Prospectus and prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or which
deregisters all securities remaining unsold, shall be deemed to be incorporated
by reference herein and to be a part hereof from the date of the filing of such
reports and documents. Any statement contained in a document, all or a portion
of which is incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained or incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
Upon request, the Company will provide without charge to each person
to whom this Prospectus is delivered a copy of any or all of such documents
which are incorporated herein by reference (other than exhibits to such
documents unless such exhibits are specifically incorporated by reference into
the documents that this Prospectus incorporates). Written or oral requests for
copies should be directed to Robert L. Weinberg, Senior Executive Vice
President and Chief Financial Officer, K-Tron International, Inc., Routes 55
and 553, P.O. Box 888, Pitman, New Jersey 08071-0888, (609) 589-0500.
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THE COMPANY
Founded in 1964, the Company's principal operating businesses
are conducted by subsidiaries which design, produce, market and sell
gravimetric and volumetric feeders and related equipment for the handling of
bulk solids in a wide variety of manufacturing processes. The Company has
manufacturing facilities in the United States and Switzerland, and its
equipment is sold throughout the world.
The Company's feeders control by weight or volume the rate at
which ingredients are fed into the manufacturing processes of numerous
products, primarily in the plastics, food, chemical, cement, glass and aluminum
industries. In addition, the Company designs, produces and sells electronic
assemblies and controls, and it provides customer and employee training through
its K-Tron Institute.
The Company's principal executive offices are located at
Routes 55 and 553, Pitman, New Jersey 08071, and its telephone number at that
address is (609) 589-0500.
RISK FACTORS
In addition to the other information in this Prospectus,
prospective investors should consider the following risk factors in evaluating
the Company and its business before purchasing any shares offered hereby.
UNCERTAIN SWISS BANKING RELATIONSHIPS
The Company's Swiss manufacturing subsidiary is in violation
of certain equity guarantees contained in its loan agreements with several
Swiss lenders which resulted in a default under such loan agreements. The
subsidiary has entered into a forbearance agreement with its Swiss lenders
under which they have agreed to defer until March 31, 1997 the repayment of
credit lines and the principal payments on fixed loans that become due prior to
that date. The Company and its subsidiary are exploring ways to refinance or
reduce the subsidiary's bank indebtedness in Switzerland or to extend the
forbearance agreement, but the defaults are continuing and have not been waived
and there can be no assurance that the Company will be able to refinance or
reduce its bank indebtedness in Switzerland or to extend the forbearance
agreement or that, if alternative financing is available, it could be obtained
on terms that would be favorable or acceptable to the Company.
HIGH LEVERAGE; LIMITATIONS ASSOCIATED WITH EXISTING DEBT COVENANTS; REFINANCING
RISK
As of June 29, 1996, the principal amount outstanding under
the Swiss loan agreements was $24.2 million and the principal amount
outstanding under the U.S. loan agreements was $5.8 million. The Company's
highly leveraged financial position poses significant risks to the Company,
including the risks that (i) a substantial portion of the cash flow from
operations will be required to pay interest, (ii) the Company's ability to
obtain future financing, for working capital, capital expenditures and other
purposes, may be impeded and (iii) the Company may be more vulnerable to
economic downturns and less able to respond to competitive pressures.
The Company's credit agreements restrict, among other things,
the ability of the Company to incur additional indebtedness, pay dividends,
prepay subordinated indebtedness, create liens, dispose of certain assets,
enter into sale and leaseback transactions, engage in mergers or enter into
transactions with affiliates. These restrictions, in combination with the
Company's high leverage, could limit the Company's ability to respond to
opportunities and to changing market and economic conditions. If the Company
is unable to maintain compliance with the terms of its credit agreements it may
be required to refinance its outstanding debt or obtain additional financing.
There can be no assurance that any such refinancing would be possible or that
any additional financing could be obtained on terms that would be favorable or
acceptable to the Company.
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CYCLICAL INDUSTRY
The markets for the Company's products are cyclical. During
periods of economic expansion, particularly when capital spending is
increasing, the Company generally benefits from increased demand for its
products. During periods of economic contraction, the Company is generally
adversely affected by declining demand for its products. There can be no
assurance that an increase in demand or an economic recovery will be sustained
in the Company's markets.
INTERNATIONAL SALES; FOREIGN EXCHANGE RISKS
In fiscal 1995 and the six months ended June 29, 1996, 74% and
68%, respectively, of the Company's net sales to unaffiliated customers were
made to customers outside of the United States. The Company expects that
international sales will continue to account for a significant portion of its
net sales in future periods. International sales are subject to fluctuations
in exchange rates, which may have an adverse effect on the Company's business,
operating results and financial condition. Since the results of operations of
the Company's subsidiaries are translated to United States dollars, the
Company's results of operations are affected by fluctuations in exchange rates
among the United States dollar, Swiss franc, German mark and French franc. In
addition, as the Company's subsidiaries sell into other countries, these
transactions are affected by numerous cross exchange rates.
COMPETITION
The Company's products are sold in highly competitive markets
in the United States, Europe and Asia. The Company competes with companies of
varying sizes, including foreign manufacturers and divisions or subsidiaries of
larger companies. Some of these competitors may have financial resources that
are substantially greater than those of the Company. The Company believes that
over the past several years it has experienced increased price competition
because of prevailing economic conditions in the Company's markets.
Competitive pressures or other factors could cause the Company's products to
lose market share or result in significant price erosion which would have an
adverse effect on the Company's results of operations.
DEPENDENCE ON SUPPLIERS
Each product produced by the Company requires the supply of
components specially engineered to meet the Company's requirements. Supply of
these components can be affected by numerous factors beyond the control of the
Company. While certain of the Company's components are obtained from a single
or limited number of sources, the Company has potential alternate suppliers for
most of the specialty components used in its assembly operations. There can be
no assurance, however, that the Company will not experience shortages or be
forced to seek alternative sources of supply which may increase costs or
adversely affect the Company's ability to fulfill orders.
DEPENDENCE ON KEY PERSONNEL
The Company is dependent upon the continued services of
certain key officers and management and operating personnel. The loss of key
personnel could have a material adverse effect on the Company. The Company
does not maintain "key man" insurance for any of its officers. The Company's
continued success also depends on its ability to attract and retain a skilled
labor force. There can be no assurance that the Company will be successful in
attracting and retaining the personnel it requires to develop, manufacture and
market its products or expand its operations.
CERTAIN ANTI-TAKEOVER PROVISIONS
The ability of the Board of Directors of the Company to issue
shares of preferred stock without shareholder approval and a shareholder rights
plan adopted by the Company may, alone or in combination, have certain
anti-takeover effects, including inhibiting a change in control of the Company
under circumstances that could give the shareholders the opportunity to realize
a premium over the then-prevailing market prices.
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DIVIDEND POLICY
The Company is not currently paying any cash dividends on its
Common Stock and does not intend to do so for the foreseeable future.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the
Shares by the Selling Shareholder.
SELLING SHAREHOLDER
All of the Shares are being sold by Johannes Wirth (the
"Selling Shareholder"), who will receive all of the proceeds from the sale of
the Shares. The Selling Shareholder is, and at all times since May 1978 has
been, a director of the Company. The Selling Shareholder's term as a director
continues until the 1999 annual meeting of shareholders.
The Shares are being registered to permit public secondary
trading of the Shares, and the Selling Shareholder may offer the Shares for
resale from time to time. See "Plan of Distribution." In recognition of the
fact that the Selling Shareholder may wish to be legally permitted to sell his
Shares when he deems appropriate, the Company has filed with the Commission,
under the Securities Act, a Registration Statement on Form S-3, of which this
Prospectus forms a part, with respect to the resale of the Shares from time to
time on the Nasdaq National Market of The Nasdaq Stock Market or in
privately-negotiated transactions and has agreed to prepare and file such
amendments and supplements to the Registration Statement as may be necessary to
keep the Registration Statement effective until the Shares are no longer
required to be registered for the sale thereof by the Selling Shareholder.
From April 1991 through December 1995, the Selling Shareholder
was retained as a consultant by the Company. Under this arrangement, he
provided technical assistance and advice on such matters as were referred to
him by the chief executive officer of the Company. From April 1991 through
February 28, 1995, Mr. Wirth devoted approximately 1,000 hours per year to such
work and was paid an annual consulting fee of 100,000 Swiss francs ("Sfr.")
plus Sfr. 10,000 for travel expenses. Effective March 1, 1995, Mr. Wirth's
annual consulting fee was reduced to Sfr. 50,000 plus Sfr. 5,000 for travel
expenses, with a commensurate reduction in his hourly consulting commitment to
approximately 500 hours per year, and at the end of 1995, Mr. Wirth's
consulting arrangement with the Company terminated. During 1995, Mr. Wirth
received a consulting fee for these services of Sfr. 58,355 plus Sfr. 5,834 for
travel expenses (an aggregate of $54,415 at an exchange rate of $.848 per Sfr.,
which was the average $/Sfr. exchange rate for 1995). Mr. Wirth may continue
to provide consulting services to the Company in 1996 if requested by the chief
executive officer of the Company's Swiss subsidiary.
The following table sets forth certain information with
respect to the Common Stock beneficially owned by the Selling Shareholder as of
the date of this Prospectus.
<TABLE>
<CAPTION>
Beneficial Ownership Beneficial Ownership
of Common Stock of Common Stock
Prior to the Offering After Offering(1)
-------------------------------- Number of Shares to ----------------------------------
Number Percent of be Sold Under this Number Percent of
Name of Shares Class Prospectus of Shares Class
---- --------- ----- ---------- --------- ----------
<S> <C> <C> <C> <C> <C>
Johannes Wirth 247,400 7.9 150,000 97,400 3.1
</TABLE>
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(1) Assumes the sale of all of the Shares offered hereby.
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PLAN OF DISTRIBUTION
The Shares offered hereby by the Selling Shareholder may be
sold from time to time by the Selling Shareholder, or by pledgees, donees,
transferees or other successors in interest. Such sales may be made on one or
more exchanges or in the over-the-counter market (including the Nasdaq National
Market of The Nasdaq Stock Market), or otherwise at prices and at terms then
prevailing or at prices related to the then-current market price, or in
negotiated transactions. The Shares may be sold by one or more of the
following methods, without limitation: (a) a block trade in which the
broker-dealer so engaged will attempt to sell the Shares as agent but may
position and resell a portion of the block as principal to facilitate the
transaction; (b) purchases by a broker or dealer as principal and resale by
such broker or dealer for its account pursuant to this Prospectus; (c) ordinary
brokerage transactions and transactions in which the broker solicits
purchasers; (d) an exchange distribution in accordance with the rules of such
exchange; and (e) face-to-face transactions between the Selling Shareholder and
purchasers without a broker-dealer. In effecting sales, brokers or dealers
engaged by the Selling Shareholder may arrange for other brokers or dealers to
participate. Such brokers or dealers may receive commissions or discounts from
the Selling Shareholder in amounts to be negotiated immediately prior to the
sale. Such brokers or dealers and any other participating brokers or dealers
may be deemed to be "underwriters" within the meaning of the Securities Act in
connection with such sales. In addition, any securities covered by this
Prospectus that qualify for sale pursuant to Rule 144 might be sold under Rule
144 rather than pursuant to this Prospectus.
Upon the Company being notified by the Selling Shareholder
that any material arrangement has been entered into with a broker or dealer for
the sale of Shares through a block trade, special offering, exchange
distribution or secondary distribution or a purchase by a broker or dealer, a
supplemented Prospectus will be filed, if required, pursuant to Rule 424(c)
under the Securities Act, disclosing (a) the name of each such broker-dealer,
(b) the number of Shares involved, (c) the price at which such Shares were
sold, (d) the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable, (e) that such broker-dealer(s) did not
conduct any investigation to verify the information set out or incorporated by
reference in this Prospectus, as supplemented, and (f) other facts material to
the transaction.
The Selling Shareholder is bearing all costs relating to the
registration of the Shares, including any commissions or other fees payable to
broker-dealers in connection with any sale of the Shares.
The Company and the Selling Shareholder have entered into an
agreement whereby the Selling Shareholder has advised the Company that during
such times as the Selling Shareholder may be deemed to be engaged in a
distribution of the Common Stock, and therefore an "underwriter" under the
Securities Act, he will comply with Rules 10b-2, 10b-6 and 10b-7 under the
Exchange Act and therefore will, among other things:
(a) not engage in any stabilization activities in
connection with the Company's securities;
(b) furnish each broker-dealer through which
Shares may be offered such copies of this Prospectus, as amended from
time to time, as may be required by such broker-dealer; and
(c) not bid for or purchase any securities of the
Company or attempt to induce any person to purchase any securities of
the Company other than as permitted under the Exchange Act.
The Company has agreed to indemnify the Selling Shareholder
and may indemnify certain persons who may be deemed to be "underwriters", in
certain circumstances, against certain liabilities, including liabilities
arising under the Securities Act. The Selling Shareholder has agreed to
indemnify the Company and its directors, officers and agents, and may indemnify
certain "underwriters" that participate in transactions involving the sale of
the Shares against certain liabilities, including liabilities arising under the
Securities Act.
LEGAL OPINION
The validity of the Shares offered hereby will be passed upon
for the Company by Morgan, Lewis & Bockius LLP, Philadelphia, Pennsylvania.
Edward B. Cloues, II, a director of the Company, is a partner of Morgan, Lewis
& Bockius LLP.
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EXPERTS
The consolidated financial statements of the Registrant and its
subsidiaries as of December 30, 1995 and for the years ended December 30, 1995,
December 31, 1994 and January 1, 1994, each included in the Registrant's Report
on Form 10-K for the fiscal year ended December 30, 1995, have been
incorporated by reference in this registration statement in reliance, with
respect to the consolidated financial statements for the fiscal years ended
December 30, 1995 and December 31, 1994, upon the report of Arthur Andersen
LLP, independent public accountants, and with respect to the consolidated
financial statements for the fiscal year ended January 1, 1994, upon the report
of Deloitte & Touche LLP, independent auditors, all incorporated by reference
herein, and upon the authority of each such firm as experts in accounting and
auditing.
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<TABLE>
<S> <C>
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No dealer, salesperson or other person has 150,000 Shares
been authorized to give any information or to make
any representations other than those contained in
this Prospectus and, if given or made, such
information or representations must not be relied K-TRON INTERNATIONAL, INC.
upon as having been authorized by the Company or
the Selling Shareholder or by any other person.
This Prospectus does not constitute an offer to
sell, or a solicitation of an offer to buy a
security other than the shares of Common Stock
offered hereby, nor does it constitute an offer to
sell or a solicitation of an offer to buy any of
the securities offered hereby to any person in any COMMON STOCK
jurisdiction in which such offer or solicitation
would be unlawful. Neither the delivery of this
Prospectus nor any offer or sale made hereunder
shall, under any circumstances, create any
implication that there has been no change in the
affairs of the Company or that information
contained herein is correct as of any time
subsequent to the date hereof.
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PROSPECTUS
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TABLE OF CONTENTS
Page
----
Available Information . . . . . . . . . . . . . 2
Incorporation of Certain Documents
by Reference . . . . . . . . . . . . . . . . 2
The Company . . . . . . . . . . . . . . . . . . 3 September 19, 1996
Risk Factors . . . . . . . . . . . . . . . . . 3
Use of Proceeds . . . . . . . . . . . . . . . . 5
Selling Shareholder . . . . . . . . . . . . . . 5
Plan of Distribution . . . . . . . . . . . . . 6
Legal Opinion . . . . . . . . . . . . . . . . . 6
Experts . . . . . . . . . . . . . . . . . . . . 7
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</TABLE>
