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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the fiscal year ended December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the transition period from __________ to __________
Commission file number: 1-8973
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below: Kysor Industrial
Corporation Employee Stock Ownership Plan
B. Name of issuer of the securities held pursuant to the
plan and the address of its principal executive office: Kysor
Industrial Corporation, One Madison Avenue, Cadillac, Michigan
49601
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KYSOR INDUSTRIAL CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
PAGES
Report of Independent Accountants. . . . . . . . . . . . . . . . . . . 2
Financial Statements:
Statement of Net Assets Available for Plan Benefits
as of December 31, 1995 and 1994. . . . . . . . . . . . . . . . . . 4
Statement of Changes in Net Assets Available for Plan
Benefits for the Years Ended December 31, 1995,
1994 and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 6-9
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment
Purposes as of December 31, 1995. . . . . . . . . . . . . . . . . . 10
Item 27d - Schedule of Reportable Transactions for
the Year Ended December 31, 1995. . . . . . . . . . . . . . . . . . 11
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Coopers Coopers & Lybrand L.L.P.
& Lybrand a professional services firm
REPORT OF INDEPENDENT ACCOUNTANTS
To the Committee of
Kysor Industrial Corporation
Employee Stock Ownership Plan:
We have audited the accompanying statement of net assets available for plan
benefits of Kysor Industrial Corporation Employee Stock Ownership Plan as
of December 31, 1995 and 1994, and the related statement of changes in net
assets available for plan benefits for each of the three years in the
period ended December 31, 1995. 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 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 net assets available for benefits of the Plan
as of December 31, 1995 and 1994, and the changes in net assets available
for plan benefits for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedules as
listed in the accompanying index on page 1 are presented for purposes of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974. The supplemental
schedules have been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, are fairly
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stated, in all material respects, in relation to the basic financial
statements taken as a whole.
/s/ Coopers & Lybrand L.L.P.
Detroit, Michigan
March 14, 1996
Coopers & Lybrand L.L.P. is a member of Coopers & Lybrand International,
a limited liability association incorporated in Switzerland.
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<TABLE>
KYSOR INDUSTRIAL CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 1995 AND 1994
<CAPTION>
ASSETS 1995 1994
<S> <C> <C>
Cash $ 84,663 $ 95,325
Receivables:
Preferred stock dividend 649,006 654,329
Employer contributions 45,455 41,650
Investments, at fair value (Note 3) 27,597,525 27,504,871
Total assets 28,376,649 28,296,175
LIABILITIES
Notes payable 20,000,000 20,348,727
Accrued interest 694,461 695,979
Total liabilities 20,694,461 21,044,706
Net assets available for plan benefits $ 7,682,188 $ 7,251,469
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
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<TABLE>
KYSOR INDUSTRIAL CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Additions:
Employer contributions $ 300,559 $ 335,110 $ 367,683
Dividend and interest income 1,756,472 1,746,822 1,733,198
Net appreciation in fair value
of investments 475,837 2,070,529 -
2,532,868 4,152,461 2,100,881
Deductions:
Benefits paid to withdrawing
participants 417,849 369,304 246,778
Interest expense 1,684,300 1,708,620 1,733,014
Net depreciation in fair value
of investments - - 193,238
2,102,149 2,077,924 2,173,030
Net additions (deductions) 430,719 2,074,537 (72,149)
Net assets available for plan
benefits, beginning of year 7,251,469 5,176,932 5,249,081
Net assets available for
plan benefits, end of year $7,682,188 $7,251,469 $5,176,932
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
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KYSOR INDUSTRIAL CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF PLAN AND BENEFITS:
The Plan is a noncontributory stock ownership plan available to all
U. S. salaried and hourly employees of Kysor Industrial Corporation
(the "Company") not covered by a collective bargaining agreement. The
Plan is designed to invest primarily in the preferred stock and common
stock of the Company and is intended to meet the requirements of
Section 141 of the Revenue Act of 1978, as amended, and Section 401(a)
of the Internal Revenue Code of 1954, as amended.
During 1985, the Plan purchased 357,668 shares of the Company's common
stock. The Plan's purchase was financed through a bank loan,
guaranteed by the Company. Over a period of 10 years, the Company
repaid the cost of the shares plus interest. As the loan was repaid,
the proportionate number of shares were allocated among plan
participants based upon participants' compensation levels. At
December 31, 1995, all of common stock of the Company was allocated to
Plan participants. At December 31, 1994 and 1993, 35,763 and 71,530
shares, respectively, of common stock of the Company remained
unallocated to plan participants.
On February 24, 1989, the Plan purchased 820,513 shares of newly issued
eight percent cumulative Series A Convertible Voting Preferred Stock,
$24.375 stated value per share ("Convertible Stock"), from the Company.
The Plan's purchase of preferred stock was financed by a loan from the
Company, which issued a $20,000,000, 15-year Employee Stock Ownership
Plan note to raise necessary funds. The Plan pledges all such
Convertible Stock as collateral for the purpose of securing payment and
performance of all obligations and indebtedness of the Plan pursuant to
the exempt loan agreement. The Company will service the debt
obligation plus interest primarily through the distribution of
preferred stock dividends. In 1995, 1994 and 1993, dividends on
preferred stock of $1,564,000, $1,577,000 and $1,587,000 plus
$107,000, $96,000 and $85,000 of additional contributions,
respectively, were received from the Company. The Convertible Stock
may be voluntarily converted at the option of the Plan into shares of
the Company's common stock on a one-for-one basis, subject to certain
antidilution adjustments. The Convertible Stock is subject to
redemption by the Company generally beginning March 1, 1993.
As the debt is serviced, a proportionate number of shares will be
allocated among plan participants based on participants' compensation
levels. At December 31, 1995, 1994 and 1993, 592,661, 628,124 and
663,588 shares, respectively, were unallocated to plan participants.
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NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. DESCRIPTION OF PLAN AND BENEFITS, CONTINUED:
The Company's contributions will vest over 7 years, beginning with 20
percent vesting after 3 years and 20 percent vesting each year
thereafter. Forfeitures will be allocated among the accounts of all
eligible participants for that year. The Company is obligated to make
contributions to the Plan which, when aggregated with the Plan's
dividends and interest earnings, equal the amount necessary to enable
the Plan to make its regularly scheduled payments of principal and
interest due on its notes payable.
Upon termination or retirement, the balance in a participant's account
may be distributed in cash or in shares of the Company's common stock
at the participant's option. During 1995, 1994 and 1993, the Plan(s)
distributed 1,187 shares, 4,243 shares and 4,578 shares, respectively,
of the Company's common stock to withdrawing participants.
Additionally, 6,036 shares of preferred stock were converted into
common stock during 1995.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
a. INVESTMENT VALUATION: Investments in common stock traded on a
national securities exchange are valued at the last reported sales
price on the last business day of the year. The preferred stock
was valued at $24.86 and $25.11 per share on December 31, 1995 and
1994, respectively, based on a market comparable analysis performed
by an independent investment firm. Units of the collective
investment fund are valued at $1. The Kysor Industrial Corporation
Employee Ownership Plan (the "Plan") assets, which consist
primarily of the items noted above, are held by the trustee of the
Plan.
b. INVESTMENT TRANSACTIONS: Purchases and sales of securities are
reflected on a trade-date basis. The basis on which cost is
determined in computing realized gains or losses from sales or
distributions of investments is average cost.
c. CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS:
In accordance with the policy of stating investments at fair value,
the Plan presents the net appreciation (depreciation) in the fair
value of its investments in the statement of changes in net assets
available for plan benefits. Net appreciation (depreciation)
consists of the realized gains or losses and the unrealized
appreciation (depreciation) on those investments.
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NOTES TO FINANCIAL STATEMENTS, CONTINUED
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
d. INTEREST AND DIVIDEND RECOGNITION: Interest income and expense are
recorded as earned or incurred. Common stock dividend income is
recorded on the ex-dividend date. Dividends on the shares of
preferred stock are recorded as declared. Preferred stock
dividends are cumulative, in the amount of eight percent per annum,
from the date of their original issuance.
e. FINANCIAL INSTRUMENTS: The Plan has investments and notes payable
which are considered financial instruments. The investments are
carried at fair value. The market value of notes payable, as
determined through information obtained from banking sources and
management estimates, approximates their carrying value.
f. ESTIMATES: The preparation of financial statements in conformity
with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts
of assets and liabilities at the dates of the financial statements
and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
3. INVESTMENTS:
The following is a summary of plan assets at December 31:
<TABLE>
<CAPTION>
1995 1994
MARKET MARKET
VALUE COST VALUE COST
<S> <C> <C> <C> <C> <C>
Kysor Industrial Corporation
common stock, 318,580
shares in 1995 and 329,302
shares in 1994 $ 7,725,566 $ 3,283,523 $ 7,285,807 $ 3,316,497
Kysor Industrial Corporation
preferred stock, 797,517
shares in 1995 and 803,553
shares in 1994 19,826,272 19,439,504 20,177,212 19,586,604
Short-term investments 45,687 45,687 41,852 41,852
$27,597,525 $22,768,714 $27,504,871 $22,944,953
</TABLE>
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NOTES TO FINANCIAL STATEMENTS, CONTINUED
3. INVESTMENTS, CONTINUED:
Kysor Industrial Corporation common stock at the close of business on
December 31, 1995 and March 13, 1996 was $24.25 and $25.75 per share,
respectively.
4. TAX STATUS:
The United States Treasury Department advised on May 12, 1995 that the
Plan constitutes a qualified trust under Section 401(a) of the Internal
Revenue Code and, therefore, is exempt from federal income taxes under
the provisions of Section 501(a). The Plan administrator believes that
the Plan is currently designed and being operated in compliance with
the applicable requirements of the Internal Revenue Code.
5. NOTES PAYABLE:
Notes payable consist of the following:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C> <C>
Loan from Kysor Industrial Corporation,
$1,250,000 semiannual principal payments,
starting July 25, 1996, plus interest
payable quarterly at 8.36 percent $20,000,000 $20,000,000
Note payable to National Bank of Detroit,
$174,363 semiannual principal payments
through September 30, 1995, plus
interest payable quarterly at 7.0 percent - 348,727
Total notes payable $20,000,000 $20,348,727
</TABLE>
6. ADMINISTRATIVE EXPENSES:
Administrative expenses of the Plan are paid by the Company.
7. PLAN TERMINATION PRIORITIES:
The Company has no intention of terminating the Plan. However,
conditions which would cause plan termination are specified in the plan
agreement. Upon termination of the Plan, the assets of the Plan would
continue to be applied for the exclusive benefit of participants and/or
their beneficiaries, as directed by the Committee.
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<TABLE>
KYSOR INDUSTRIAL CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1995
<CAPTION>
(C)
(B) DESCRIPTION OF INVESTMENT,
IDENTITY OF ISSUER, INCLUDING MATURITY DATE, (E)
BORROWER OR RATE OF INTEREST, COLLATERAL, (D) CURRENT
(A) SIMILAR PARTY PAR OR MATURITY VALUE COST VALUE
<S> <C> <C> <C> <C>
* Kysor Industrial Corporation Common stock, 318,580 shares, $ 3,283,523 $ 7,725,566
$1 par value
* Kysor Industrial Corporation Preferred stock, 795,035 shares, 19,439,504 19,826,272
8 percent cumulative Series A
convertible voting, 24.375
stated value per share
Old Kent Bank Collective Investment Fund 45,687 45,687
$22,768,714 $27,597,525
</TABLE>
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<TABLE>
KYSOR INDUSTRIAL CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<CAPTION>
(A) (C) (D)
IDENTITY OF (B) PURCHASE SELLING
PARTY INVOLVED DESCRIPTION OF ASSET PRICE PRICE
<S> <C> <C> <C>
REPORTING CRITERION I: Any single transaction within the plan
year, with respect to any plan asset,
involving an amount in excess of five
percent of the current value of plan
assets.
None.
REPORTING CRITERION II: Any series of transactions (other than
transactions with respect to securities)
within the plan year with or in conjunc-
tion with the same person which, when
aggregated, regardless of category of
asset and gain or loss on any trans-
actions, involves an amount in excess
of five percent of the current value of
plan assets.
None.
REPORTING CRITERION III: Any transaction within the plan year
involving securities of the same issue
if within the plan year any series of
transactions with respect to such
securities, when aggregated, involves
an amount in excess of five percent of
the current value of plan assets.
None.
REPORTING CRITERION IV: Any transaction within the plan year
with respect to securities with or in
conjunction with the same person if any
prior or subsequent single transaction
within the plan year with such person
with respect to securities exceeds five
percent of the current value of plan
assets.
None.
</TABLE>
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<TABLE>
<CAPTION>
(F) (H)
EXPENSE CURRENT VALUE
(E) INCURRED (G) OF ASSET ON (I)
LEASE WITH COST TRANSACTION NET GAIN
RENTAL TRANSACTION OF ASSET DATE OR (LOSS)
<S> <C> <C> <C> <C> <C>
</TABLE>
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Exhibits:
23 Consent of Coopers & Lybrand L.L.P. dated June 21, 1996.
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: June 28, 1996 KYSOR INDUSTRIAL CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
By: /S/ PETER W. GRAVELLE
Peter W. Gravelle
President and Chief Operating
Officer and Member of the Employee
Stock Ownership Plan Administrative
Committee
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EXHIBIT INDEX
EXHIBIT DOCUMENT
23 Consent of Coopers & Lybrand L.L.P. dated June 21, 1996
EXHIBIT 23
COOPERS COOPERS & LYBRAND L.L.P.
&LYBRAND
A PROFESSIONAL SERVICES FIRM
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement
of Kysor Industrial Corporation on Form S-8 (File No. 33-27360) of our
report dated March 14, 1996 on our audit of the Kysor Industrial
Corporation Employee Stock Ownership Plan as of December 31, 1995 and 1994
and for the years ended December 31, 1995, 1994 and 1993, which report is
included in this Annual Report on Form 11-K.
/s/ Coopers & Lybrand L.L.P.
Detroit, Michigan
June 21, 1996
Coopers & Lybrand L.L.P. is a member of Coopers & Lybrand International, a
limited liability association incorporated in Switzerland.
