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 for the fiscal year ended December 31, 1994, or
___ Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ________ to ________
Commission file number 0-627
________________
DOUGLAS & LOMASON COMPANY
(Exact Name of Registrant as Specified in its Charter)
MICHIGAN 38-0495110
(State or other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
24600 Hallwood Court, Farmington Hills, Michigan 48335-1671
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (810) 478-7800
Securities Registered Pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
------------------- ---------------------
None None
Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock, $2.00 par value
(Title of Class)
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__
As of March 10, 1995, 4,242,970 shares of Common Stock of the
Registrant were outstanding, and the aggregate market value of the shares
of Common Stock as of such date (based on the closing price in the Nasdaq
National Market) of the Registrant held by nonaffiliates (including certain
officers and non-officer directors) was approximately $60,748,548.
Documents Incorporated by Reference
The following documents are incorporated by reference into this Form 10-K:
Part I: Item 1 - Part of Annual Report of the Registrant for the year
ended December 31, 1994
Part II: Items 5-8 - Part of Annual Report of the Registrant for the
year ended December 31, 1994
Part III: Items 10-12 - Part of definitive Proxy Statement of the
Registrant dated March 31, 1995 filed pursuant to Regulation
14A.
<PAGE>
PART I
Item 1. Business
Douglas & Lomason Company (the "Company" or the "Registrant") is a
major supplier of original equipment parts to the North American automotive
industry. Automotive products, which have accounted for approximately 94%
of the Company's total sales during each of the last three years, include
fully trimmed seating, seating components and mechanisms, and decorative
and functional body trim parts. These products are manufactured primarily
for the three major U.S. automotive manufacturers and other original
equipment suppliers.
The Company also manufactures material handling systems and custom
truck bodies and trailers. These products have accounted for approximately
6% of the Company's total sales during each of the last three years.
The Registrant classifies its business into two segments:
automotive products and industrial and commercial products. Exclusive of
automotive products, no segment accounts for 10 percent or more of
consolidated revenues or profits. A summary of certain segment information
appears in note (6) of notes to consolidated financial statements on page
20 of the 1994 Annual Report to Shareholders and is incorporated herein by
reference.
AUTOMOTIVE PRODUCTS
Seating
Seating systems and components account for the principal portion
of the Company's automotive business. The Company is one of the major
independent manufacturers and assemblers of seating systems and components
for the North American automotive industry. Seat assemblies produced by
the Company satisfy the seat requirements of a full range of vehicles. The
Company currently supplies complete seats to customer assembly plants on a
"just-in-time" (JIT) "sequenced parts delivery" (SPD) basis for passenger
cars and vans.
The Company's seat frame business has grown significantly over the
48 years it has been supplying seating systems and components to the North
American automotive industry. The Company believes it is currently one of
the largest independent manufacturers of seat frames in North America. The
seat frames manufactured by the Company are incorporated by it into
complete seats and sold to vehicle assembly plants and are also sold
separately to other seat assemblers. The Company believes that it is
recognized as one of the most vertically integrated independent seat
manufacturers in North America. The Company is capable of producing seat
frames, manual seat mechanisms, foam, covers, suspension systems, and
plastic seat trim at its manufacturing facilities.
The Company believes that opportunities for growth may emerge in
foreign transplant operations in North America and from the expanding trend
toward seat assembly outsourcing in Europe. The Company has established
technical and business relationships with three Japanese partners to
facilitate the exchange of technical information and to establish business
relationships with foreign automakers. In 1988, the Company formed a
<PAGE>
50/50 joint venture company with Namba Press Works Co., Ltd. of Japan.
This company, named Bloomington-Normal Seating Company, is located in
Normal, Illinois and manufactures seating systems for Diamond-Star Motors,
a subsidiary of Mitsubishi Motors Corporation. The Company also has a
license agreement with Imasen Electric of Japan for the manufacture of
manual seat adjuster mechanisms.
Body Trim Components
The Company has been supplying decorative body trim components to
the automotive industry since 1902. These products include body side,
wheel opening and structural B-pillar moldings, head and tail lamp bezels,
bumpers, including those back filled with Azdel, and window and door
sealing systems. The Company has the capability of processing large
quantities of metal, plastic and composite material parts through injection
molding, pressing, rolling, laminating and extruding systems and finishing
parts through anodizing and painting.
The Company produces a variety of injection molded and extruded
plastic moldings including bi-laminate body side and deck lid moldings.
These moldings can be finished in a variety of ways such as with a high
gloss, in body colors including metallics, or with encapsulated colorful
graphics.
Product Engineering
The Company pursues new products and processes through a 180
person product engineering staff. This staff is customer-focused in that
all new projects must be based on a customer's requirements. This
facilitates the development of products in shorter lead time and matches
products more closely to consumer requirements.
Sales and Customers
Sales coverage by the Company of the North American automotive
industry is maintained by an experienced direct sales staff consisting of
24 account managers, divided into separate and distinct customer-focused
groups. The sales group is supported by fully developed program management
teams incorporating simultaneous engineering techniques.
The percent of sales to total automotive sales of seating systems
and body trim components to the three major automotive manufacturers during
the past three years is as follows:
<TABLE>
<CAPTION>
1992 1993 1994
<S> <C> <C> <C>
Chrysler Corporation........................ 50% 51% 39%
Ford Motor Company.......................... 25 25 40
General Motors Corporation.................. 18 15 14
</TABLE>
Sales percentages include sales to other seat assemblers for
ultimate sale to the above customers.
INDUSTRIAL AND COMMERCIAL PRODUCTS
This segment of the Company's business accounted for approximately
6% of total Company sales in each of the three years ended December 31,
1994.
-2-
<PAGE>
Industrial and commercial products include:
Material Handling Equipment. The Company designs and manufactures
material handling equipment such as conveyors, bagging and packaging
machines, pulleys and rollers. The Company also produces related equipment
such as elevators, bag flatteners, automatic palletizers and bag placers.
These products are sold to the agriculture, mining and transportation
industries among others.
Custom Truck Bodies and Trailers. The Company serves the food and
beverage industry through the design and manufacture of delivery truck
bodies and trailers for soft drinks, beer, bottled water, bakery products,
milk and ice cream, meats, frozen foods and other products. These units
include side-loading aluminum bodies and trailers, and steel, aluminum or
reinforced fiberglass refrigerated truck bodies and trailers.
Competition
The Company is one of the three major independent seat suppliers
to the North American automotive industry. The Company's primary
independent competitors are Johnson Controls Inc.'s Automotive Products
Group and Lear Seating Inc. The Company also competes with captive seating
suppliers, namely: Delphi Interior and Lighting Systems of General Motors
Corporation and the Plastic Trim Products Division of Ford Motor Company.
The Company's body trim business competes with a significant
number of major competitors. There are 10 to 12 with a full range of
material, process and product capabilities similar to the Company's and
several competitors with specialized niche products.
GENERAL
Raw materials purchased by the Registrant consisting of carbon
steel, aluminum, stainless steel, plastics, and fabric are generally
available from numerous independent sources. Management believes that the
trend in its material costs is upward.
While the Registrant owns several patents and patent rights,
patent protection is not materially significant to its business.
To the best of the Registrant's knowledge, its permits are in
compliance with all federal, state and local environmental protection
provisions.
The number of persons employed by the Registrant at December 31,
1994 was 6,039.
The Registrant does not consider its business seasonal except to
the extent that automotive changeovers to new models affect business
conditions.
Item 2. Properties
The corporate offices of the Company and the product engineering
staff are located in Farmington Hills, Michigan in three buildings
containing approximately 96,000 square feet. Information as to the
Company's 18 principal facilities in operation as of December 31, 1994 is
set forth below:
-3-
<PAGE>
<TABLE>
<CAPTION>
Approximate Year Owned or
Location Square Feet Acquired Leased
<S> <C> <C> <C>
AUTOMOTIVE
Seating
Columbus, Nebraska............................ 273,400 1965 Owned
Milan, Tennessee.............................. 202,300 1976 Owned
Red Oak, Iowa................................. 193,500 1967 Owned
Marianna, Arkansas............................ 188,200 1960 Owned
Ciudad Acuna, Mexico.......................... 134,100 1987 Owned
Excelsior Springs, Missouri................... 87,500 1993 Leased
Troy, Missouri.(1)............................ 82,500 1990 Leased
Orangeville, Ontario, Canada.(1).............. 28,300 1992 Leased
Del Rio, Texas.(1)............................ 25,000 1987 Leased
Saltillo, Mexico.............................. 44,000 1993 Owned
Body Trim Components
Carrollton, Georgia........................... 240,700 1955 Owned
48,900 1979 Owned
LaGrange, Georgia............................. 85,900 1988 Leased
INDUSTRIAL AND COMMERCIAL
Material Handling Equipment
Humboldt, Iowa................................ 96,300 1968 Owned
Dakota City, Iowa............................. 50,500 1978 Owned
Fairfield, CA.(1)............................. 4,900 1993 Leased
Custom Truck Bodies and Trailers
Columbus, Georgia............................. 133,000 1962 Owned
Amory, Mississippi............................ 67,000 1982 Owned
Kansas City, Missouri......................... 10,400 1983 Leased
<FN>
----------------
(1) A distribution facility.
</TABLE>
The Company believes that substantially all of its property and
equipment is in good condition and adequate for its present requirements.
Item 3. Legal Proceedings
There are no material legal proceedings pending against the
Registrant or its subsidiaries.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable
-4-
<PAGE>
Executive Officers of the Registrant
The names and ages of all executive officers of the
Registrant are as follows:
<TABLE>
<CAPTION>
Has Served
in Position
Name Position Since Age
<S> <C> <C> <C>
Harry A. Lomason II Chairman of the Board 1992
President 1976
Chief Executive Officer 1982 60
James B. Nicholson Vice Chairman of the
Board 1990 51
James J. Hoey Senior Vice President and 1992
Chief Financial Officer 1985 58
Roger H. Morelli Senior Vice President-
Manufacturing 1987 50
Steven C. Bruck Vice President-Design,
Development and Engineering
Services 1984 38
Ollie V. Cheatham Vice President-Human
Resources 1984 50
A. Warren Vice President-Safety,
Daubenspeck III Environmental and
Loss Control 1988 43
Martin A. DiLoreto Vice President-Marketing
and Business Planning 1994 59
Scott E. Paradise Vice President-Automotive
Sales 1993 40
Joe Kamil Vice President-Business
Development and Advanced
Engineering 1991 41
Robert D. Stachura Vice President and
Executive Manager-
Manufacturing 1990 52
H. James Kouris Vice President-Purchasing 1976 64
Dan D. Smith Vice President-Cost Analysis
and Information Technology 1989 46
Gary A. Pniewski Vice President-Seating
and Decorative Trim
Engineering 1994 50
Verne C. Hampton II Secretary 1977 61
Melynn M. Zylka Treasurer 1990 34
</TABLE>
-5-
<PAGE>
Officers of the Registrant are elected each year at the Annual
Meeting of the Board of Directors to serve for the ensuing year or until
their successors are elected and qualified.
All of the executive officers of the Registrant named above
have held various executive positions with the Registrant for more than
five years except: Mr. Nicholson who has been President and Chief
Executive Officer of PVS Chemicals, Inc. and a Director of the Company for
more than five years; Mr. Bruck who joined the Company in 1993 after having
served as Vice President, Product Engineering Group at RCO the preceding
five years; Mr. Pniewski who joined the Company in January 1994 after
serving in various positions with Ford Motor Company for more than twenty
years, the most recent of which was Vehicle Seat Systems Engineering
Manager in the Plastics and Trim Products Division; and Mr. Hampton who has
been a partner with the law firm of Dickinson, Wright, Moon, Van Dusen and
Freeman for more than five years.
There is no family relationship between any of the foregoing
persons.
PART II
Item 5. Market for the Registrant's Common Equity and Related
Shareholder Matters
The information set forth under the caption "Shareholder
Information" on page 26 the 1994 Annual Report of the Registrant is
incorporated by reference herein. As of December 31, 1994, there were 757
holders of record of the Registrant's Common Stock.
Item 6. Selected Financial Data
The information set forth under the caption "Selected Financial
and Other Data" on pages 24 and 25 the 1994 Annual Report of the Registrant
is incorporated by reference herein.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The information set forth under the caption "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
on pages 12 and 13 of the 1994 Annual Report of the Registrant is
incorporated by reference herein.
Item 8. Financial Statements and Supplementary Data
The information set forth on pages 14 through 25 of the 1994
Annual Report of the Registrant is incorporated by reference herein.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not Applicable
-6-
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
The information set forth under the caption "Information About
Directors and Nominees for Directors" on pages 3 and 4 of the definitive
Proxy Statement of the Registrant dated March 31, 1995 filed with the
Securities and Exchange Commission pursuant to Regulation 14A is
incorporated by reference herein for information as to directors of the
Registrant.
Reference is made to Part I of this Report for information as to executive
officers of the Registrant.
Item 11. Executive Compensation
The information set forth under the caption "Executive
Compensation" on pages 7, 8 and 9 of the definitive Proxy Statement of the
Registrant dated March 31, 1995 filed with the Securities and Exchange
Commission pursuant to Regulation 14A is incorporated by reference herein.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information set forth under the caption "Security Ownership"
on pages 1 and 2 of the definitive Proxy Statement of the Registrant dated
March 31, 1995 filed with the Securities and Exchange Commission pursuant
to Regulation 14A is incorporated by reference herein.
Item 13. Certain Relationships and Related Transactions
Not applicable
-7-
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
(a) The following documents are filed as a part of this
report:
1. Financial Statements
The following consolidated financial statements
of Douglas & Lomason Company and subsidiaries
included in the Douglas & Lomason Company 1994
Annual Report to its Shareholders for the year
ended December 31, 1994, are incorporated herein
by reference:
Consolidated Balance Sheets at December 31, 1994
and 1993.
Consolidated Statements of Earnings for each of
the years in the three year period ended
December 31, 1994.
Consolidated Statements of Shareholders' Equity
for each of the years in the three year period
ended December 31, 1994.
Consolidated Statements of Cash Flows for each of
the years in the three year period ended
December 31, 1994.
Notes to Consolidated Financial Statements.
The consolidated financial information for the
years ended December 31, 1994, 1993, and 1992 set
forth under "Index to Consolidated Financial
Statements and Schedules."
EXHIBITS
(The Exhibit marked with one asterisk below was
filed as an Exhibit to the Form 10-K Report of
the Registrant for the fiscal year ended
December 31, 1983; the Exhibit marked with two
asterisks below was filed as an Exhibit to the
Form 10-Q Report of the Registrant for the
quarter ended June 30, 1988; the Exhibit marked
with three asterisks below was filed as an
Exhibit to the Form 10-K Report of the
Registrant for the fiscal year ended December 31,
1989; the Exhibits marked with four asterisks
below were filed as Exhibits to the Form 10-K
Report of the Registrant for the fiscal year
ended December 31, 1991; the Exhibit marked
with five asterisks below was filed as an
Exhibit to the Form 10-K Report of the Registrant
for the fiscal year ended December 31, 1992, the
Exhibits marked with six asterisks were filed as
-8-
<PAGE>
Exhibits to the Form 10-K Report of the Registrant
for the fiscal year ended December 31, 1993, and the
Exhibit marked with seven asterisks below was filed
as an Exhibit to the Form 10-Q Report of the Registrant
for the quarter ended June 30, 1994, and are
incorporated herein by reference, the Exhibit
numbers in brackets being those in such Form 10-K
or 10-Q Reports).
(3)(a)****** Restated Articles of
Incorporation of Registrant.[(3)(a)]
(3)(b)****** By-Laws of the Registrant. [(3)(b)]
(4)(a)** Term Loan Agreement dated as of
May 20, 1988 between Registrant
and the Banks named in Section
2.1 thereof [1].
(4)(a)(1)**** Amendments to Term Loan Agreement
Agreement dated as of May 20,
1988. [(4)(a)(1)]
(4)(b)**** Term Loan Agreement dated as of
December 19, 1991 between
Registrant and NBD Bank, N.A.
and Manufacturers Bank, N.A.,
as amended. [(4)(b)]
(4)(c)******* Amended and Restated Credit Agreement
dated as of June 24, 1994, between
Registrant and the banks named in
Section 2.1 thereof. [4]
(10)(a)* 1982 Incentive Stock Option Plan
of the Registrant [10](#)
(10)(b)*** 1990 Stock Option Plan of the
Registrant [(10)(b)](#)
(10)(c)**** Joint Venture Agreement dated
as of July 25, 1986 between
Registrant and Namba Press
Works Co., Ltd. [(10)(c)]
(13) Portions of 1994 Annual Report
of Registrant.
(21)***** Subsidiaries of the Registrant.
[(22)]
(23) Consent of KPMG Peat Marwick LLP.
(27) Financial Data Schedule
(b) Reports on Form 8-K.
The Registrant has not filed
any reports on Form 8-K during
the last quarter of the period
covered by this report.
(#) This document is a management contract or compensatory
plan.
-9-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Section 13 or 15 (d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized on
the 29th day of March, 1995.
DOUGLAS & LOMASON COMPANY
By: /s/ H. A. Lomason II
----------------------------
H. A. Lomason II
Chairman of the Board,
President and Chief Executive
Officer
(Principal Executive Officer)
By: /s/ James J. Hoey
----------------------------
James J. Hoey
Senior Vice President
and Chief Financial Officer
(Principal Financial Officer)
By: /s/ Melynn M. Zylka
----------------------------
Melynn M. Zylka
Treasurer
(Principal Accounting 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 indicated on March 29th, 1995.
Signature Title
/s/ James E. George Director
--------------------------
James E. George
/s/ Verne C. Hampton II Director
--------------------------
Verne C. Hampton II
/s/ H. A. Lomason II Director
--------------------------
H. A. Lomason II
/s/ Dale A. Johnson Director
--------------------------
Dale A. Johnson
/s/ Charles R. Moon Director
--------------------------
Charles R. Moon
/s/ James B. Nicholson Director
--------------------------
James B. Nicholson
/s/ Gary T. Walther Director
--------------------------
Gary T. Walther
-10-
<PAGE>
DOUGLAS & LOMASON COMPANY AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
The consolidated balance sheets of the Company and subsidiaries as of
December 31, 1994 and 1993, and the related consolidated statements of
earnings, shareholders' equity, and cash flows for each of the years in the
three-year period ended December 31, 1994 together with the related notes
and the report of KPMG Peat Marwick LLP, independent certified public
accountants, all contained in the Company's 1994 annual report to
shareholders, are incorporated herein by reference.
The following additional financial data should be read in conjunction with
the financial statements in the 1994 annual report to shareholders. All
other schedules are omitted, as the required information is inapplicable or
the information is presented in the consolidated financial statements or
related notes. Financial statements and related schedules of the
Registrant have been omitted because the Registrant is primarily an
operating company and the subsidiaries included in the consolidated
financial statements are totally held.
Index
Page
----
Independent Auditors' Report F-2
Schedule VIII - Valuation and Qualifying Accounts F-3
F-1
<PAGE>
Independent Auditors' Report
The Board of Directors and Shareholders
Douglas & Lomason Company:
Under date of January 31, 1995, we reported on the consolidated balance
sheets of Douglas & Lomason Company and subsidiaries as of December 31,
1994 and 1993, and the related consolidated statements of earnings,
shareholders' equity, and cash flows for each of the years in the
three-year period ended December 31, 1994, as contained in the 1994 annual
report to Shareholders. These consolidated financial statements and our
report thereon are incorporated by reference in the annual report on Form
10-K for the year 1994. In connection with our audits of the
aforementioned consolidated financial statements, we also have audited the
related consolidated financial statement schedules as listed in the
accompanying index. These financial statement schedules are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statement schedules based on our
audits.
In our opinion, such financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly, in all material respects, the information set forth
therein.
As discussed in notes 1 and 8 to the consolidated financial statements, the
Company changed its method of accounting for income taxes and
postretirement benefits other than pensions in 1993.
/s/ KPMG Peat Marwick LLP
Detroit, Michigan
January 31, 1995
F-2
<PAGE>
Schedule VIII
<TABLE>
DOUGLAS & LOMASON COMPANY AND SUBSIDIARIES
Valuation and Qualifying Accounts
Years ended December 31, 1994, 1993, and 1992
(Expressed in thousands of dollars)
<CAPTION>
Balance at Charged to Balance at
December 31, Costs and December 31,
1991 Expenses Deductions 1992
------------ ---------- ---------- ------------
<S> <C> <C> <C> <C>
None -- -- -- --
===== ===== ===== =====
<CAPTION>
Balance at Charged to Balance at
December 31, Costs and December 31,
1992 Expenses Deductions 1993
------------ ---------- ---------- ------------
<S> <C> <C> <C> <C>
Other accrued plant
closing liabilities -- 9,078 -- 9,078
===== ===== ===== =====
<CAPTION>
Balance at Charged to Balance at
December 31, Costs and December 31,
1993 Expenses Deductions 1994
------------ ---------- ---------- ------------
<S> <C> <C> <C> <C>
Other accrued plant
closing liabilities 9,078 -- 5,397 3,681
===== ===== ===== =====
</TABLE>
F-3
Exhibit 13
MANAGEMENT'S DISCUSSION & ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Funds provided from operations of $15.8 million and proceeds from new borrowings
of $9.0 million were the Company's primary sources of cash in 1994. The funds
provided from operations were positively impacted by the increase in operating
income of $21.4 million in 1994 from $11.2 million before provision for plant
closings in 1993. Funds generated from operations and net borrowings enabled the
Company to purchase additional plant and equipment amounting to $14.6 million
and reduce long-term debt by $5.8 million. Debt to total capitalization was
27.1% at December 31, 1994.
In June 1994, the Company entered into an Amended and Restated Unsecured
Revolving Credit Agreement with two banks which matures in June 1997, but may be
extended for two additional years. The amended agreement increased the credit
facility from $20.0 million to $35.0 million. Borrowings under this facility
totaled $16.0 million at December 31, 1994, with an effective interest rate of
6.7%, leaving $19.0 million available to borrow. Management believes it has
adequate sources of liquidity to meet the Company's operating and capital
expenditure requirements in 1995.
RESULTS OF OPERATIONS -- 1994 VERSUS 1993
Net Sales
Net sales of $566.8 million in 1994 were the highest in the Company's history
and increased 33% over 1993 net sales of $424.8 million. Fourth quarter 1994 net
sales of $182.4 million increased 62% compared to $112.6 million in the fourth
quarter of 1993. Fourth quarter 1994 sales were also the highest in the
Company's history. The sales increase was due principally to the commencement of
full production of fully trimmed seats for the recently introduced Ford Contour
and Mercury Mystique models at the Company's new Excelsior Springs, Missouri
plant, and the increased production of fully trimmed seats for the Ford Aerostar
minivan at the Troy, Missouri plant. Industry sales of automobiles, vans and
light trucks continued to be positively affected by a strong consumer demand
throughout 1994, which is expected to continue into 1995.
Cost of Sales
Cost of sales as a percentage of net sales declined slightly in 1994 to 92.4%
compared to 92.7% in 1993. This slightly favorable trend was attributable to the
significantly higher sales volume during the last six months of 1994. Higher raw
material prices, particularly in metals, chemicals and plastics, and pressure
for customer price concessions could result in a trend toward reduced margins in
1995 despite anticipated higher sales volume.
During the fourth quarter of 1993 the Company decided to close certain plants,
and in connection therewith established a plant closing accrual of $10.0 million
for employee severance benefit costs, environmental costs, facilities
maintenance and other, $4.0 million of which remained at December 31, 1994. The
accrual reduction included $1.2 million of employee severance and benefits and
$650,000 of facilities maintenance costs taken into income during the third and
fourth quarters of 1994, respectively. Furthermore, in compliance with current
guidance, site restoration and other environmental exit costs of $2.5 million
were reclassified from the provision for plant closing accrual to other accrued
liabilities during the fourth quarter of 1994.
Selling, General and Administrative Expenses
Selling, general and administrative expenses in 1994 increased approximately
$2.2 million from 1993, but decreased significantly as a percent of sales to
3.9% compared to 4.6% of sales in 1993. Incentive compensation, additional
staffing, travel and professional services expense were the principal components
of the increase in 1994, but should not continue to increase in 1995.
Depreciation Expense
Depreciation expense in 1994 increased $1.2 million or 10% from 1993. The
increase was attributable to increased capital expenditures in 1994 of $14.6
million and in 1993 of $20.5 million.
Interest Expense
Interest expense in 1994 decreased $86,000 or 3% from 1993. This decrease was
attributable to the lower debt level in the first and second quarters of 1994.
12
<PAGE>
Net Earnings (Loss)
Net earnings in 1994 of $12.5 million or $2.95 per share compared with a net
loss of $7.2 million or $1.70 per share in 1993. Results for 1993 included a
$9.6 million after tax provision for closing certain plants and a $3.8 million
after tax provision to reflect the change in the method of accounting for
postretirement benefits other than pensions which was in conformity with
Financial Accounting Standards No. 106, "Accounting for Postretirement
Benefits." Net earnings in 1993 exclusive of the two items mentioned above were
$6.2 million or $1.47 per share.
The improvement in 1994 net earnings was primarily attributable to the
significant sales increase of 33%, which included higher production of
automobiles and light trucks nationwide, combined with cost reductions and
improvements in productivity in several areas.
RESULTS OF OPERATIONS -- 1993 VERSUS 1992
Net Sales
Net sales of $424.8 million for 1993 increased 9% compared to 1992 net sales of
$391.2 million. Sales of products for Chrysler's highly successful LH model and
increased sales at the Richmond, Michigan plant prior to its closing in May,
1993 were the significant components of the 1993 sales increase. The decline in
sales as a result of the planned plant closings was more than offset by the
start-up of new production in 1994.
Cost of Sales
Cost of sales as a percentage of net sales increased to 92.7% in 1993 compared
to 91.6% in 1992. This unfavorable trend in both the third and fourth quarter of
1993 was a direct result of the excess start-up costs at the new plant in
Saltillo, Mexico, combined with an increase in the price of steel which is a
major component in automotive seating systems. Price concessions to customers
also adversely affected the cost of sales ratio. The total cost reduction
estimated to be realized from the plant closings was expected to approximate
$3.0 million in 1994 and $5.0 million annually thereafter.
Selling, General and Administrative Expenses
Selling, general and administrative expenses in 1993 increased approximately
$1.8 million from 1992, but remained constant as a percentage of sales.
Additional staffing for Sales and Information Services was the principal
component of this increase.
Depreciation Expense
Depreciation expense in 1993 increased $1.6 million or 15% from 1992. The
increase was attributable to significantly higher capital expenditures of $20.5
million in 1993 and $16.7 million in 1992. The effect of the plant closings was
expected to result in a decrease in depreciation expense of approximately $1.0
million in 1994.
Interest Expense
Interest expense in 1993 decreased $.8 million or 23% from 1992. This decrease
was attributable to lower average debt and lower interest rates. Debt to total
capitalization was 21.9% at December 31, 1993.
Net Earnings (Loss)
The net loss in 1993 of $7.2 million or $1.70 per share resulted principally
from the change in accounting principle of $3.8 million or $.90 per share and
the provision for plant closings of $9.6 million or $2.28 per share. Net
earnings from operations in 1993, exclusive of the two items mentioned above,
were $6.2 million or $1.47 per share compared to $8.8 million or $2.25 per share
in 1992.
The 1993 net earnings from operations before the provision for plant closings
were negatively impacted by excessive start-up costs at the Saltillo, Mexico
plant and an increase in the price of steel which is a major component in
automotive seating systems. Customer price concessions also affected net sales
and net earnings adversely. The fourth quarter net loss of $7.9 million or $1.86
per share was significantly contributed to by the provision for plant closings
of $9.6 million or $2.28 per share. Net earnings from operations before the
provision for plant closings in the fourth quarter were $1.7 million or $.42 per
share compared to $3.0 million or $.72 per share in 1992.
New Accounting Standard
In November 1992, FASB issued Statement of Financial Accounting Standards No.
112, "Employers' Accounting for Postemployment Benefits," which requires
employers to record postemployment benefit costs that are probable and estimable
over the period during which the benefit vests or accumulates. The provisions of
Statement No. 112 are effective for fiscal years beginning after December 15,
1993. The Company does not expect implementation of this Statement in 1994 to
have any effect on its financial statements.
13
<PAGE>
[GRAPHIC: This page also has two bar charts on the left side of the page; one
showing a five-year range of Total Assets, the other showing a five-year range
of Long-Term Debt. The values are as follows:]
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C>
Total Assets $148.8 $139.2 $156.4 $174.3 $211.6
Long-Term Debt $ 67.6 $ 46.5 $ 25.7 $ 21.8 $ 31.9
<FN>
In millions of dollars.
</TABLE>
<TABLE>
<CAPTION>
Douglas & Lomason Company and Subsidiaries
CONSOLIDATED BALANCE SHEETS
December 31, 1994 and 1993
1994 1993
<S> <C> <C>
Assets
Current assets:
Cash $ 6,532,415 $ 2,745,818
Accounts receivable (note 6) 99,927,502 70,458,109
Inventories (note 2) 19,791,325 14,435,433
Deferred tax assets (note 5) 2,843,000 5,542,000
Prepaid expenses and other current assets 810,040 1,042,843
Total current assets 129,904,282 94,224,203
Property, plant and equipment at cost
less accumulated depreciation (notes 3, 4 and 9) 66,787,613 69,109,773
Other assets 14,871,532 10,949,345
$ 211,563,427 $ 174,283,321
Liabilities and Shareholders' Equity
Current liabilities:
Short-term borrowings (note 4) $ -- $ 7,000,000
Current installments of long-term debt (note 4) 5,938,130 5,829,315
Accounts payable 54,428,598 31,100,497
Accrued payroll 3,728,693 3,280,660
Income taxes payable 1,865,401 800,149
Accrued plant closing expenses (note 9) 3,782,964 5,065,000
Other accrued expenses (note 7) 9,847,115 4,943,872
Total current liabilities 79,590,901 58,019,493
Long-term debt, excluding current installments (note 4) 31,887,500 21,825,630
Postretirement benefits, other than pensions (note 8) 7,533,669 6,521,094
Deferred income taxes (note 5) 651,000 992,000
Other liabilities (notes 9 and 10) 6,171,429 9,250,484
Shareholders' equity (notes 4 and 11):
Preferred stock, no par value.
Authorized 500,000 shares; no shares issued -- --
Common stock, $2 par value.
Authorized 10,000,000 shares;
issued 4,228,720 in 1994 (4,227,220 in 1993) 8,457,440 8,454,440
Other capital 27,997,976 27,986,476
Retained earnings 52,048,512 41,253,360
Foreign currency translation adjustment (note 12) (2,775,000) (19,656)
Total shareholders' equity 85,728,928 77,674,620
$ 211,563,427 $ 174,283,321
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
14
<PAGE>
[GRAPHIC: This page also has a bar chart on the lower right of the page, showing
a five-year range of Interest Expense. The values are as follows:]
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C>
Interest Expense $ 8.0 $ 5.4 $ 3.5 $ 2.7 $ 2.6
<FN>
In millions of dollars.
</TABLE>
<TABLE>
<CAPTION>
Douglas & Lomason Company and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS
Years ended December 31, 1994, 1993 and 1992
1994 1993 1992
<S> <C> <C> <C>
Net sales $ 566,818,933 $ 424,842,681 $ 391,178,399
Cost of sales 523,576,928 393,934,783 358,190,994
Gross profit 43,242,005 30,907,898 32,987,405
Selling, general and administrative expenses 21,889,605 19,670,926 17,834,224
Provision for plant closings (note 9) -- 15,000,000 --
Operating income (loss) 21,352,400 (3,763,028) 15,153,181
Other income (expenses):
Interest expense (2,619,609) (2,706,072) (3,530,314)
Interest income and other, net 961,624 451,526 970,020
(1,657,985) (2,254,546) (2,560,294)
Earnings (loss) before income taxes
and cumulative effect of change
in accounting principle 19,694,415 (6,017,574) 12,592,887
Income tax expense (benefit) (note 5) 7,208,000 (2,607,000) 3,823,000
Earnings (loss) before cumulative
effect of change in accounting principle 12,486,415 (3,410,574) 8,769,887
Cumulative effect at January 1, 1993
of change in accounting for
postretirement benefits other than
pensions, net of income tax benefit (note 8) -- (3,756,930) --
Net earnings (loss) $ 12,486,415 $ (7,167,504) $ 8,769,887
Earnings (loss) per share before cumulative
effect of change in accounting principle $ 2.95 $ (.80) $ 2.25
Cumulative per share effect of change in
accounting for postretirement benefits other
than pensions, net of income tax benefit -- (.90) --
Net earnings (loss) per share $ 2.95 $ (1.70) $ 2.25
Dividends per share $ .40 $ .40 $ .30
Weighted average number of common and
common equivalent shares outstanding 4,228,120 4,214,372 3,890,115
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
15
<PAGE>
[GRAPHIC: This page also shows two bar charts on the left side of the page; one
showing a five-year range of Shareholders' Equity, the other showing a five-year
range of Dividends, with the comment "1990 and 1991 dividends retroactively
adjusted to reflect 1992 3-for-2 stock split." The values are as follows:]
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C>
Shareholders' Equity $ 47.4 $ 54.2 $ 85.9 $ 77.7 $ 85.7
Dividends $ .07 $ .14 $ .30 $ .40 $ .40
<FN>
-- 1990 and 1991 dividends retroactively adjusted to reflect
1992 3-for-2 stock split.
-- In millions of dollars except dividends.
</TABLE>
<TABLE>
<CAPTION>
Douglas & Lomason Company and Subsidiaries
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Years ended December 31, 1994, 1993 and 1992
Foreign
Currency
Common Other Retained Translation Shareholders'
Stock Capital Earnings Adjustment Equity
<S> <C> <C> <C> <C> <C>
Balance at
December 31, 1991 $ 6,297,336 $ 5,305,491 $ 42,600,917 $ -- $ 54,203,744
Net earnings -- -- 8,769,887 -- 8,769,887
Dividends, $.30 per share -- -- (1,262,830) -- (1,262,830)
Issuance of 114,157 shares
under employee stock
option plans, net of
1,868 shares received as
consideration for
exercised stock options 228,314 1,310,466 -- -- 1,538,780
Redemption of 174 fractional
shares as a result of
3-for-2 stock split (348) 348 -- -- --
Issuance of 932,294 shares
through public offering,
net of expenses 1,864,588 20,766,808 -- -- 22,631,396
Balance at
December 31, 1992 8,389,890 27,383,113 50,107,974 -- 85,880,977
Net loss -- -- (7,167,504) -- (7,167,504)
Dividends, $.40 per share -- -- (1,687,110) -- (1,687,110)
Foreign currency
translation adjustment -- -- -- (19,656) (19,656)
Issuance of 32,275 shares
under employee stock
option plan 64,550 603,363 -- -- 667,913
Balance at
December 31, 1993 8,454,440 27,986,476 41,253,360 (19,656) 77,674,620
Net earnings -- -- 12,486,415 -- 12,486,415
Dividends, $.40 per share -- -- (1,691,263) -- (1,691,263)
Foreign currency
translation adjustment -- -- -- (2,755,344) (2,755,344)
Issuance of 1,500 shares
under employee stock
option plan 3,000 11,500 -- -- 14,500
Balance at
December 31, 1994 $ 8,457,440 $ 27,997,976 $ 52,048,512 $ (2,775,000) $ 85,728,928
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Douglas & Lomason Company and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31, 1994, 1993 and 1992
1994 1993 1992
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $ 12,486,415 $ (7,167,504) $ 8,769,887
Adjustments to reconcile net earnings (loss)
to net cash provided by operating activities:
Provision for plant closings -- 15,000,000 --
Cumulative effect of change in accounting for
postretirement benefits other than pensions,
net of tax benefit -- 3,756,930 --
Depreciation 13,212,329 12,002,047 10,431,627
Net (gain) loss on sale of property, plant
and equipment (106,929) (68,241) 58,469
Provision for deferred income taxes 2,358,000 (6,386,000) (14,000)
Changes in operating assets and liabilities:
Increase in accounts receivable (29,469,393) (14,859,688) (7,125,536)
Decrease (increase) in inventories (5,355,892) 4,278,033 (195,438)
Increase in prepaid expenses and other assets (3,689,384) (4,216,235) (1,039,454)
Increase in accounts payable 23,328,101 11,251,672 7,101,746
Increase (decrease) in other current liabilities 6,416,528 (822,225) (1,079,099)
Decrease in plant closing accrual (3,903,913) -- --
Increase in other liabilities 555,397 1,151,245 400,190
Net cash provided by operating activities 15,831,259 13,920,034 17,308,392
Cash flows from investing activities:
Proceeds from the sale of property,
plant and equipment 1,541,066 416,291 301,283
Capital expenditures (14,629,379) (20,459,754) (16,743,833)
Net cash used in investing activities (13,088,313) (20,043,463) (16,442,550)
Cash flows from financing activities:
Net proceeds from public stock offering -- -- 22,631,396
Proceeds from issuance of long-term debt 16,000,000 -- --
Principal payments on long-term debt (5,829,315) (5,330,679) (21,341,271)
Proceeds from (payments on) short-term
borrowings, net (7,000,000) 7,000,000 --
Proceeds from exercised stock options, net 14,500 667,913 1,538,780
Dividends paid (1,691,263) (1,687,110) (1,262,830)
Net cash provided by financing activities 1,493,922 650,124 1,566,075
Effect of translation adjustment on cash (450,271) (19,656) --
Net increase (decrease) in cash 3,786,597 (5,492,961) 2,431,917
Cash at beginning of year 2,745,818 8,238,779 5,806,862
Cash at end of year $ 6,532,415 $ 2,745,818 $ 8,238,779
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 2,546,656 $ 2,716,378 $ 3,561,905
Income taxes $ 3,550,000 $ 5,078,975 $ 3,942,491
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
17
<PAGE>
Douglas & Lomason Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1994, 1993 and 1992
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the financial statements of
Douglas & Lomason Company and its wholly owned subsidiaries. All significant
intercompany balances and transactions have been eliminated in consolidation.
The Company's investment in a 50% owned affiliate is accounted for on the equity
method.
Cash Equivalents
For the purposes of the statements of cash flows, the Company considers all
liquid debt instruments with original maturities of three months or less to be
cash equivalents.
Financial Instruments
Financial instruments consist primarily of cash equivalents, accounts
receivable, accounts payable and bank debt. At December 31, 1994, the Company
believes the fair value of these financial instruments approximates the carrying
amount.
Inventories
Inventories are stated as the lower of cost or market (net realizable value).
Cost for substantially all inventories is determined by the last-in, first-out
(LIFO) cost method. Tooling in process represents unique manufacturing equipment
costs incurred, which are partially reimbursed by customers, and the balance
amortized over the years the tools benefit. Pre-production design and
engineering costs incurred at the request of the customer, when significant, are
capitalized and amortized over the years the costs benefit. Tooling and
pre-production design and engineering costs that benefit future periods, less
accumulated amortization, are included in other assets, with the current portion
included in inventory.
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Plant and equipment under
capital leases are stated at the present value of future minimum lease payments.
Depreciation is computed using both straight line and accelerated methods over
the estimated useful lives of the assets: 10 to 20 years for land improvements,
10 to 40 years for buildings and 2 to 12 years for machinery and equipment.
Plant and equipment held under capital leases and leasehold improvements are
amortized straight line over the shorter of the lease term or estimated useful
life of the asset. The cost and accumulated depreciation of a fully depreciated
asset remain in the accounts. When a sale or abandonment occurs, the cost and
related accumulated depreciation are removed from the accounts and the resulting
gain or loss is reflected in earnings. Repairs and maintenance are charged to
earnings as incurred; renewals and betterments are capitalized.
Income Taxes
Effective January 1, 1993, the Company adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes." For the year ended December
31, 1992, income taxes were determined in accordance with Statement of Financial
Accounting Standards No. 96, "Accounting for Income Taxes." Both Statement 109
and Statement 96 require income taxes be determined using the asset and
liability method. Accordingly, deferred income taxes are recognized for the tax
consequences of "temporary differences" by applying enacted statutory tax rates
applicable to future years to differences between the financial statement
carrying amounts and the tax bases of existing assets and liabilities. Under
Statement 109, the effect on deferred tax assets and liabilities of a change in
tax rates is recognized in income in the period that includes the enactment
date.
The adoption of Statement 109 did not have a material effect on the 1993
consolidated financial statements.
Pensions and Postretirement Benefits Other Than Pensions
Annual costs of the Company's pension and postretirement benefits other than
pensions are determined actuarially in accordance with Statement of Financial
Accounting Standards No. 87, "Employers' Accounting for Pensions," and No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions."
Translation of Foreign Currencies
Assets and liabilities of foreign subsidiaries are generally translated at
current exchange rates, and related translation adjustments are reported as a
component of shareholders' equity. Income statement accounts are translated at
the average rates during the period.
Net Income Per Share
Net income per share is computed using the weighted average number of shares of
common stock and common stock equivalents outstanding during the year.
Commitments and Contingencies
Liabilities are recorded for loss contingencies, including environmental
remediation costs, arising from claims, assessments, and other sources when the
amount of the assessment and/or remediation cost is probable and can be
reasonably estimated.
Reclassification
Certain amounts related to prior years have been reclassified to conform with
the 1994 presentation.
18
<PAGE>
(2) INVENTORIES
Substantially all inventories are valued on the last-in, first-out (LIFO) cost
method. In the opinion of management, the first-in, first-out (FIFO) cost
approximates replacement cost.
Inventories consist of the following:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Raw materials $14,511,645 $12,741,266
Work in process 6,834,045 5,327,528
Tooling in process 2,063,979 2,010,539
Finished goods 5,838,950 3,356,670
Inventories at FIFO basis 29,248,619 23,436,003
Less adjustment of certain
inventories to a LIFO basis 9,457,294 9,000,570
$19,791,325 $14,435,433
</TABLE>
(3) PROPERTY, PLANT AND EQUIPMENT
A summary of property, plant and equipment follows:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Land and land
improvements $ 3,069,743 $ 3,393,836
Buildings and building
improvements 28,193,582 29,213,262
Machinery and equipment 118,884,782 107,468,485
Construction in process 602,287 2,675,640
150,750,394 142,751,223
Less accumulated
depreciation 83,962,781 73,641,450
$ 66,787,613 $ 69,109,773
</TABLE>
Amounts included above, which have been capitalized under capital lease
obligation, are as follows:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Machinery and equipment $6,181,567 $6,181,567
Less accumulated
depreciation 3,938,113 3,508,462
$2,243,454 $2,673,105
</TABLE>
(4) INDEBTEDNESS
Long-term debt is summarized as follows:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Notes payable to banks $35,062,500 $23,437,500
Capital leases 1,163,130 2,217,445
Other 1,600,000 2,000,000
37,825,630 27,654,945
Less current installments 5,938,130 5,829,315
$31,887,500 $21,825,630
</TABLE>
In 1994, the Company entered into an unsecured revolving credit agreement
aggregating $35.0 million with two banks which replaces the line of credit
previously in effect. Interest only payments are due at various dates at
interest rates based on various factors which are at or below the banks' prime
rate.
At December 31, 1994, $16.0 million was outstanding on the revolving agreement,
and the effective interest rate was 6.75 percent. This revolver expires on June
24, 1997, but may be extended for two additional years.
At December 31, 1994, the Company had an unsecured term loan with two banks
totaling $12.5 million. Quarterly payments of principal and interest (at 7.95%)
are required with the final balance due October 31, 1999. The aggregate
maturities on this loan are $2,500,000 each year from 1995 through 1999.
The Company had another unsecured term loan agreement with two banks totaling
$6,562,500 at December 31, 1994. Quarterly payments of principal and interest
(at 9.95%) are required with the final balance due May 31, 1998. The aggregate
maturities on this loan are $1,875,000 each year from 1995 through 1997 and
$937,500 in 1998.
During 1993, the Company acquired intangible assets in exchange for a $2.0
million obligation, payable in five equal annual installments through 1998. At
December 31, 1994, the unpaid portion of this obligation was $1.6 million.
Under a capital lease agreement, the Company agreed to purchase certain
equipment at a nominal amount on the expiration date. The following is a
schedule of future minimum lease payments under this capital lease agreement,
together with the present value of the total minimum lease payments:
<TABLE>
<S> <C>
Total minimum lease payments expiring in 1995 $ 1,236,306
Less amount representing interest at 9.94% 73,176
Present value of minimum lease payments $ 1,163,130
</TABLE>
The bank notes and capital lease agreement contain restrictive covenants
regarding consolidated working capital and funded debt to capitalization. The
Company was in compliance with all such covenants at December 31, 1994.
(5) INCOME TAXES
Earnings (loss) before income taxes and the cumulative effect of a change in
accounting, as shown in the consolidated statements of earnings, consist of the
following:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Domestic $ 19,486,892 $ (4,344,385) $ 12,891,117
Foreign 207,523 (1,673,189) (298,230)
$ 19,694,415 $ (6,017,574) $ 12,592,887
</TABLE>
Components of income tax expense (benefit) are as follows:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Current:
Federal $ 4,619,000 $ 3,438,000 $ 3,556,000
State 231,000 343,000 160,000
Foreign -- (2,000) 121,000
4,850,000 3,779,000 3,837,000
Deferred:
Federal 2,100,000 (4,969,000) (225,000)
State 234,000 (580,000) 211,000
Foreign 24,000 (837,000) --
2,358,000 (6,386,000) (14,000)
$ 7,208,000 $ (2,607,000) $ 3,823,000
</TABLE>
19
<PAGE>
(5) INCOME TAXES (CONTINUED)
A reconciliation of the "expected" income tax expense (benefit) based on the
federal corporate income tax rate of 35% (34% in 1993 and 1992) to the actual
income tax expense (benefit) is as follows:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Expected
income tax
expense (benefit) $ 6,893,000 $(2,046,000) $ 4,281,000
State income tax
expense (benefit),
net of federal
income
tax benefit 302,000 (156,000) 245,000
Research and
development
tax credits (200,000) (332,000) (700,000)
Foreign tax rate
differential -- (268,000) 222,000
Other items, net 213,000 195,000 (225,000)
Actual income tax
expense (benefit) $ 7,208,000 $(2,607,000) $ 3,823,000
</TABLE>
The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities at December 31, 1994 and
1993, are as follows:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Deferred tax assets:
Plant and equipment, due to
difference in depreciation $ 801,000 $ 1,696,000
Accrued postretirement
benefits deductible for tax
purposes when paid 3,688,000 2,768,000
Other expenses deductible for
tax purposes when paid 2,203,000 2,377,000
Accrued plant closing costs 3,700,000 5,397,000
Other items, net 4,580,000 765,000
Gross deferred assets 14,972,000 13,003,000
Less valuation allowance (1,463,000) (1,463,000)
Deferred tax assets 13,509,000 11,540,000
Deferred tax liabilities:
Plant and equipment, due to
difference in depreciation 7,644,000 6,745,000
Other items, net 3,673,000 246,000
Deferred tax liabilities 11,317,000 6,991,000
Net deferred tax assets $ 2,192,000 $ 4,549,000
</TABLE>
Management has determined, based on the Company's history of domestic taxable
income and its expectation of the future, that domestic operating income of the
Company will likely be sufficient to fully recognize these net deferred tax
assets.
(6) INDUSTRY SEGMENT
The Company's operations are within the following industry segments: automotive
products, material handling equipment and specialized truck bodies and trailers.
A summary of certain segment information and a reconciliation to the related
consolidated financial statements amounts follow:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Sales to customers
Automotive
products $ 530,866,173 $ 397,356,003 $ 363,299,730
All other segments 35,952,760 27,486,678 27,878,669
Total sales $ 566,818,933 $ 424,842,681 $ 391,178,399
Operating profit (loss)
Automotive
products $ 23,453,958 $ (1,601,322) $ 18,268,931
All other segments 2,547,605 1,456,917 (258,530)
Total operating
profit (loss) $ 26,001,563 $ (144,405) $ 18,010,401
Identifiable assets
Automotive
products $ 183,358,186 $ 149,772,959 $ 135,277,457
All other segments 14,616,905 12,032,522 9,217,223
197,975,091 161,805,481 144,494,680
Corporate assets 13,588,336 12,477,840 11,856,449
Total assets $ 211,563,427 $ 174,283,321 $ 156,351,129
</TABLE>
Automotive product operations relate principally to the production of fully
trimmed seating, seat frame assemblies and mechanisms, decorative moldings, and
energy management systems used as components in the assembly of passenger cars
and trucks. Automotive product sales and trade accounts receivable consist of
the following components:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Automotive Product Sales
Chrysler 39% 51% 50%
Ford Motor 40 25 25
General Motors 14 15 18
All other 7 9 7
Total Automotive Sales 100% 100% 100%
</TABLE>
Sales are classified by ultimate customer and may have been sold through other
Tier 1 suppliers.
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Automotive trade accounts receivable
Chrysler 34% 55%
Ford Motor 43 16
General Motors 12 12
All other 11 17
Total automotive trade
accounts receivable 100% 100%
</TABLE>
20
<PAGE>
(6) INDUSTRY SEGMENT (CONTINUED)
Other automotive product sales include sales to Bloomington-Normal Seating
Company (a 50% owned affiliate) which approximated $23.0 million, $18.7 million
and $23.6 million for the years ended December 31, 1994, 1993 and 1992,
respectively. Total accounts receivable from Bloomington-Normal Seating Company
approximated $6.4 million and $1.7 million at December 31, 1994 and 1993,
respectively.
Depreciation expense and capital expenditures of the automotive products segment
were as follows:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Depreciation expense $11,294,236 $10,700,000 $ 9,600,000
Capital expenditures $12,934,027 $18,200,000 $15,700,000
</TABLE>
Identifiable assets are those assets used in, or resulting from, the operation
of a segment. Corporate assets, principally cash, administrative offices and
other assets, are not classified as identifiable assets.
(7) PENSION BENEFITS
The Company has non-contributory pension plans covering substantially all of its
salaried and hourly employees. The benefits are based on either years of service
and the employee's compensation during the last five years of employment, or a
fixed-dollar rate for each year of credited service up to a maximum of forty
years. The Company's policy is to fund pension costs accrued.
The following table sets forth the funded status of the plans and amounts
recognized in the Company's consolidated balance sheets at December 31, 1994 and
1993:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Actuarial present value
of benefit obligations:
Vested benefit obligations $ 29,623,000 $ 30,072,000
Accumulated benefit
obligations $ 30,325,000 $ 31,338,000
Projected benefit
obligations $ 35,268,000 $ 37,378,000
Plan assets at fair
market value 39,100,000 42,471,000
Plan assets in excess
of projected benefit
obligations 3,832,000 5,093,000
Unamortized transition
assets (2,629,000) (2,963,000)
Unamortized prior
service cost 2,073,000 1,673,000
Unrecognized net gain (5,848,000) (4,971,000)
Accrued pension cost
included in the consolidated
balance sheets $ 2,572,000 $ 1,168,000
</TABLE>
Assets in the plans consist mainly of investments in common stocks, private
sector bonds and federal government obligations.
The components of net pension costs for the years ended December 31, 1994, 1993
and 1992, were as follows:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Service cost $ 2,376,000 $ 2,033,000 $ 1,836,000
Interest cost 2,663,000 2,469,000 2,212,000
Actual return
on assets 2,081,000 300,000 (8,388,000)
Net amortization
and deferral (5,716,000) (4,384,000) 5,190,000
Net pension cost $ 1,404,000 $ 418,000 $ 850,000
</TABLE>
Assumptions used in accounting for the pension plans as of December 31, 1994,
1993 and 1992, were as follows:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Discount rate 8.25% 7.25% 8.00%
Rate of increase in
compensation
levels 4.00% 4.00% 5.00%
Expected long-term
rate of return
on assets 8.00% 8.00% 8.00%
</TABLE>
(8) OTHER POSTRETIREMENT BENEFITS
In addition to providing pension benefits, the Company sponsors two
postretirement benefit plans that cover salaried employees and their dependents.
One plan provides medical benefits and the other plan provides life insurance
benefits. The postretirement medical plan is contributory until the retiree
turns age 65, or if the retiree is at least age 62 and retired with 15 or more
years of service. The accounting for this plan is consistent with the Company's
expressed intent to modify its future contribution policy such that the
Company's contributions will be capped at three times the 1993 cost levels. The
life insurance plan provides death benefits that vary depending on salary at
retirement.
The Company adopted Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pension," as of
January 1, 1993. The effect of adopting Statement 106 on net earnings for the
year ended December 31, 1993 was a decrease of approximately $4,040,000, which
included an increase in the pre-tax net periodic postretirement benefit cost of
approximately $559,000. Postretirement benefit costs were less than $200,000 for
the year ended December 31, 1992, which were recorded on a cash basis and have
not been restated.
21
<PAGE>
(8) OTHER POSTRETIREMENT BENEFITS (CONTINUED)
The following table presents the funded status of these obligations reconciled
with amounts recognized in the Company's consolidated balance sheets at
December 31, 1994 and 1993:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Accumulated postretirement
benefit obligation:
Retirees $ 3,680,000 $ 3,492,000
Fully eligible active
salaried employees 231,000 1,364,000
Other active employees 4,456,000 4,399,000
8,367,000 9,255,000
Plan assets at fair value, primarily
insurance contracts 807,000 921,000
Accumulated postretirement
benefit obligation in
excess of plan assets 7,560,000 8,334,000
Unrecognized net loss (26,000) (1,813,000)
Accrued postretirement benefit
cost included in the consolidated
balance sheets $ 7,534,000 $ 6,521,000
Net periodic postretirement
benefit cost for 1994 and 1993
includes the following
components:
Service cost $ 456,000 $ 341,000
Interest cost 598,000 572,000
Actual return on assets (60,000) (59,000)
Net amortization and deferral 19,000 --
Net periodic postretirement
benefit cost $ 1,013,000 $ 854,000
</TABLE>
For measurement purposes, the annual percent rate of increase in the per capita
cost of health care benefits (i.e. health care cost trend rate) for 1994 was
assumed to vary by age category and by type of health care service. For benefits
provided to participants under age 65, the 1994 trend was assumed to be 14% for
prescription drugs and 13.2% for all other costs. These rates were assumed to
decrease gradually to approximately 6% over the next 15 years 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, 1994 by 1.1%
and the aggregate of the service and interest cost components of net periodic
postretirement benefit cost for the year ended December 31, 1994 by .8%.
The weighted average discount rate and rate of increase in future compensation
levels used in determining the accumulated postretirement benefit obligation
were 8.25 % and 4%, respectively, at December 31, 1994. The expected long-term
rate of return on assets was 8%.
The unrecognized net loss is being amortized over the average remaining service
period of active plan participants (21 years).
(9) PROVISION FOR PLANT CLOSINGS
During the fourth quarter of 1993, the Company recorded a charge of $15.0
million in connection with management's decision to close certain automotive
plants. This resulted in an after tax charge of $9.6 million or $2.28 per share.
$5.0 million of this charge was immediately utilized for the devaluation of
building and equipment. At December 31, 1994 and 1993, the components of the
accrual consist of the following:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Employee severance and
benefit costs $ 1,000,000 $ 3,000,000
Site restoration and other
environmental exit costs -- 2,500,000
Facility maintenance
costs and other 3,000,000 4,500,000
$ 4,000,000 $10,000,000
</TABLE>
During 1994, $850,000 was charged to facility maintenance costs and other, and
$800,000 for the payment of employee severance and benefit costs. These
severance payments represented the majority of the 12% expected workforce
reduction. In addition, $1.2 million of employee severance and benefit costs and
$650,000 of facilities, maintenance and other costs were taken into income
during the third and fourth quarters of 1994, respectively. Furthermore, in
compliance with current guidance, site restoration and other environmental exit
costs of $2.5 million were reclassified from the provision for plant closing
accrual to other accrued liabilities during the fourth quarter of 1994. The cash
outflows for the remaining accrued liability are expected to occur over the next
two years.
Selected financial information for these automotive facilities for the years
ended December 31, are as follows:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Sales $ 34,798,664 $ 71,754,231 $ 84,256,465
Pre-tax
earnings (loss) $ 359,027 $(15,597,071) $ (1,902,175)
</TABLE>
(10) ENVIRONMENTAL MATTERS
The Company is involved in proceedings related to environmental matters under
the Comprehensive Environmental Response Compensation and Liability Act
(Superfund) and similar state laws at three sites. The Company is one of several
potentially responsible parties in one case. As of December 31, 1994 and 1993,
the Company has recorded an accrual of $3.5 million and $3.1 million,
respectively, for estimates of future clean-up costs in connection with its
internal site assessment and compliance program. Estimates of future liability
are based on an evaluation of currently available facts regarding each
individual site and consider factors including existing technology, presently
enacted laws and regulations, and prior Company experience in remediation of
contaminated sites. Changes in EPA standards, improvements in clean-up
technology and discovery of additional information concerning these sites and
other sites could result in future expenses that are greater than the accrued
liability. Management believes that these matters will not have a material
adverse effect upon its future financial position or results of operations.
22
<PAGE>
(11) STOCK OPTION PLANS
Under the Company's 1990 Stock Option Plan, 225,000 shares (as adjusted for the
1992 stock split) of the Company's common stock have been reserved for grants to
officers and key employees at prices which are not less than the fair market
value on the date of the grant. Stock options outstanding of 7,875 at December
31, 1993, under the 1982 Incentive Stock Option Plan are exercisable at an
option price of $17.50 per share. This Plan expired in February, 1992 and,
accordingly, no additional options are available for grant. Stock options
outstanding of 92,500 at December 31, 1994, under the 1990 Plan are exercisable
at a weighted option price of $16.98 per share. Options granted, but not
exercised, expire within five years from the date of the grant. Transactions for
the years ended December 31, 1994, 1993 and 1992, were as follows:
<TABLE>
<CAPTION>
Number of Shares
1994 1993 1992
<S> <C> <C> <C>
Outstanding at
beginning of year 66,175 100,075 133,575
Granted 38,000 -- 83,575
Exercised (1,500) (32,275) (116,025)
Canceled (2,300) (1,625) (1,050)
Outstanding at
end of year 100,375 66,175 100,075
Available for grant
at end of year 42,850 78,550 78,050
</TABLE>
(12) FOREIGN CURRENCY TRANSLATION
Net exchange gains and losses resulting from the translation of assets and
liabilities of foreign subsidiaries are accumulated in a separate section of
shareholders' equity titled, "foreign currency translation adjustment." Also
included are the effects of exchange rate changes on intercompany transactions
of a long-term nature.
Analysis of this account follows:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Balance at
beginning of year $ (19,656) $ -- $ --
Translation
adjustments (2,755,344) (19,656) --
Balance at end of year $(2,775,000) $(19,656) $ --
</TABLE>
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors
of Douglas & Lomason Company:
We have audited the accompanying consolidated balance sheets of Douglas &
Lomason Company and subsidiaries as of December 31, 1994 and 1993, and the
related consolidated statements of earnings, shareholders' equity and cash flows
for each of the years in the three-year period ended December 31, 1994. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Douglas & Lomason
Company and subsidiaries at December 31, 1994 and 1993, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 1994 in conformity with generally accepted accounting
principles.
As discussed in note 1 to the consolidated financial statements, the Company
changed its method of accounting for income taxes in 1993 to adopt the
provisions of the Financial Accounting Standards Board's Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes." As discussed in
note 8 to the consolidated financial statements, the Company also adopted the
provisions of the Financial Accounting Standards Board's Statement of Financial
Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions" in 1993.
/s/ KPMG Peat Marwick LLP
Detroit, Michigan
January 31, 1995
23
<PAGE>
<TABLE>
<CAPTION>
Douglas & Lomason Company and Subsidiaries
SELECTED FINANCIAL AND OTHER DATA
(In thousands of dollars except as to per share and other data)
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE YEAR
Net sales...... $566,819 $424,843 $391,178 $375,618 $418,118 $424,926 $325,498 $296,723 $286,536 $266,626 $244,986
Cost of
sales......... 523,577 393,935 358,191 342,202 385,302 406,470 313,943 270,824 267,600 243,669 223,289
Gross profit... 43,242 30,908 32,987 33,416 32,816 18,456 11,555 25,899 18,936 22,957 21,697
Capital
additions..... 14,629 20,460 16,744 6,098 8,749 16,708 26,805 13,113 11,939 11,127 5,217
Depreciation
expense....... 13,212 12,002 10,432 10,611 11,666 11,169 7,636 5,374 4,825 3,725 3,318
Interest
expense....... 2,620 2,706 3,530 5,416 8,028 8,322 3,787 2,255 2,459 2,385 2,306
Income tax
expense
(benefit)..... 7,208 (2,607) 3,823 4,650 3,102 (2,296) (3,692) 4,838 2,669 4,846 5,186
Earnings
(loss)
before
cumulative
effect of
change in
accounting
principle..... 12,486 (3,411) 8,770 7,235 4,964 (3,372) (4,629) 6,239 3,193 6,651 5,783
Net earnings
(loss)........ 12,486 (7,168) 8,770 7,235 4,964 (3,372) (3,969) 6,239 3,193 6,651 5,783
AT YEAR END
Total assets... $211,563 $174,283 $156,351 $139,192 $148,820 $169,975 $161,916 $118,480 $ 99,631 $ 92,331 $ 78,295
Working
capital....... 50,313 36,205 50,633 45,723 52,689 31,123 33,025 38,103 34,730 38,845 31,351
Property,
plant and
equipment
less
accumulated
depreciation.. 66,788 69,110 66,022 60,070 64,726 67,886 62,525 43,361 35,631 28,524 21,127
Long-term
debt.......... 31,888 21,826 25,655 46,486 67,627 56,253 48,911 29,499 28,679 24,450 16,122
Shareholders'
equity........ 85,729 77,675 85,881 54,204 47,382 41,408 45,096 51,838 42,441 39,882 33,894
PER SHARE DATA
Book value..... $ 20.27 $ 18.37 $ 20.47 $ 17.21 $ 15.05 $ 13.68 $ 15.09 $ 16.71 $ 14.69 $ 13.97 $ 11.95
Net earnings
(loss) per
share......... 2.95 (1.70) 2.25 2.29 1.57 (1.12) (1.31) 2.05 1.11 2.33 2.04
Dividends...... .40 .40 .30 .14 .07 .25 .33 .33 .33 .27 .27
OTHER DATA
Number of
employees..... 6,039 5,697 5,817 5,562 5,424 6,285 6,076 3,994 3,612 3,581 3,301
Number of
shareholders.. 757 806 846 858 887 903 891 842 702 630 612
Weighted
average
number of
common and
common
equivalent
shares
outstanding... 4,228,120 4,214,372 3,890,115 3,154,365 3,159,311 3,018,002 3,033,798 3,046,578 2,880,246 2,849,163 2,834,274
<FN>
Per share data and outstanding shares for 1991 and prior have been retroactively
adjusted to reflect the 1992 3-for-2 stock split distributed April 2, 1992.
</TABLE>
<TABLE>
<CAPTION>
QUARTERLY FINANCIAL SUMMARY
(In thousands of dollars except as to per share data; unaudited)
First Second Third Fourth
1994 Quarter Quarter Quarter Quarter Total
<S> <C> <C> <C> <C> <C>
Net sales $123,466 $123,253 $137,680 $182,420 $566,819
Gross profit 11,156 9,671 5,654 16,761 43,242
Earnings before income taxes 5,300 3,901 449 10,044 19,694
Net earnings 3,315 2,511 234 6,426 12,486
Net earnings per share .78 .60 .05 1.52 2.95
<CAPTION>
First Second Third Fourth
1993 Quarter Quarter Quarter Quarter Total
<S> <C> <C> <C> <C> <C>
Net sales $115,403 $103,859 $ 92,995 $112,586 $424,843
Gross profit 12,412 8,295 2,367 7,834 30,908
Earnings (loss) before income
taxes and cumulative effect
of change in accounting
principle 6,792 2,855 (3,038) (12,627) (6,018)
Net earnings (loss) 605 1,850 (1,763) (7,860) (7,168)
Earnings (loss) per share
before cumulative effect
of change in accounting
principle 1.04 .44 (.42) (1.86) (.80)
Net earnings (loss) per share .14 .44 (.42) (1.86) (1.70)
<FN>
Fourth quarter net earnings in 1994 were affected by the capitalization of
pre-production design and engineering costs of $0.46 per share.
Fourth quarter net earnings in 1993 were negatively impacted by the provision
for plant closings of $2.28 per share.
</TABLE>
24 / 25 [two-page spread]
<PAGE>
SHAREHOLDER INFORMATION
Annual Meeting
The Annual Meeting of Shareholders will be held on Friday, April 28, 1995, at
11:00 a.m., EDT, at the Neva Lomason Memorial Library in Carrollton, Georgia.
All shareholders are cordially invited to attend.
Stock Market Information
Douglas & Lomason Company common stock is traded in the National Market System
of The Nasdaq Stock Market under the symbol DOUG. Stock price quotations are
printed daily in major newspapers. As of December 31, 1994, there were 4,228,720
shares of common stock outstanding, of which approximately 15% was owned by
officers and directors and 47% by institutions. At that date, there were 757
shareholders of record. Also at that date, the following securities firms were
registered as market makers of the Company's common stock:
<TABLE>
<S> <S> <S>
Bear, Stearns & Co. Inc. Mayer & Schweitzer, Inc. Stifel Nicolaus & Co.
First of Michigan Corporation Neuberger & Berman Troster Singer Corp.
Herzog, Heine, Geduld, Inc. Sherwood Securities Corp. S. J. Wolfe & Co.
</TABLE>
The Company has paid a cash dividend each year since 1957. Subject to approval
of the Board of Directors, dividends are customarily paid on the Company's
common stock on or about March 31, June 30, September 30 and December 31.
Form 10-K and Other Financial Publications
The Form 10-K for the year ended December 31, 1994, as well as other financial
publications of the Company, may be obtained without charge. Requests should be
directed to Patricia L. Shelton, Assistant Vice President and Assistant
Secretary, at the corporate offices.
Investor Relations Contact
Shareholders and prospective investors may contact the Company with questions or
requests for additional information. Inquiries should be directed to James J.
Hoey, Senior Vice President and Chief Financial Officer, at the corporate
offices.
Shareholder Assistance
Inquiries related to shareholder records, change of name, address, or ownership
of stock, and lost or stolen stock certificates should be directed to the
Transfer Agent and Registrar:
State Street Bank and Trust Company
P.O. Box 8200
Boston, MA 02266-8200
(800) 257-1770
Independent Auditors
KPMG Peat Marwick LLP, Detroit, MI
Legal Counsel
Dickinson, Wright, Moon, Van Dusen & Freeman, Detroit, MI
Smith, Currie & Hancock, Atlanta, GA
Stock Prices and Cash Dividends
<TABLE>
<CAPTION>
1994 MARKET PRICE CASH
QUARTER HIGH LOW DIVIDEND
<S> <C> <C> <C>
FIRST ....................... 20 1/2 15 $.10
SECOND ...................... 19 1/2 17 3/4 $.10
THIRD ....................... 20 1/2 14 3/4 $.10
FOURTH ...................... 18 14 1/2 $.10
----
$.40
====
</TABLE>
<TABLE>
<CAPTION>
1993 MARKET PRICE CASH
QUARTER HIGH LOW DIVIDEND
<S> <C> <C> <C>
FIRST ....................... 29 22 1/4 $.10
SECOND ...................... 29 22 1/2 $.10
THIRD ....................... 27 1/2 16 3/4 $.10
FOURTH ...................... 20 16 $.10
----
$.40
====
</TABLE>
26
<PAGE>
APPENDIX
GRAPHIC AND IMAGE MATERIAL IN THIS DOCUMENT
(as required pursuant to Rule 304(a) of Regulation S-T)
The following is a narrative description of the graphic or image material
which appears in Exhibit 13 to the Registrant's Annual Report on Form 10-K.
Exhibit 13 contains pages extracted from the Registrant's 1994 Annual Report to
Shareholders which are incorporated by reference into the Form 10-K.
Page No.
In 1994
Annual
Report Description
------- -----------
14 Two bar charts; one showing a five-year range of Total Assets, and
the other showing a five-year range of Long-Term Debt. Fully
described in position in body of document.
15 Bar chart showing a five-year range of Interest Expense. Fully
described in position in body of document.
16 Two bar charts; one showing a five-year range of Shareholders'
Equity, and the other showing a five-year range of Dividends. Fully
described in position in body of document.
Exhibit 23
[Letterhead of KPMG Peat Marwick LLP]
KPMG Peat Marwick LLP
Suite 1200
150 West Jefferson
Detroit, MI 48226-4429
The Board of Directors and Shareholders
Douglas & Lomason Company:
We consent to incorporation by reference in the Registration Statement No.
33-36359 on Form S-8 of Douglas & Lomason Company of our report dated
January 31, 1995, relating to the consolidated balance sheets of Douglas &
Lomason Company and subsidiaries as of December 31, 1994 and 1993, and the
related consolidated statements of earnings, shareholders' equity, and cash
flows for each of the years in the three-year period ended December 31,
1994, and all related schedules, which report appears in the December 31,
1994, annual report on Form 10-K of Douglas & Lomason Company. Our report
refers to the changes in accounting for income taxes and postretirement
benefits other than pensions in 1993.
/s/ KPMG Peat Marwick LLP
Detroit, Michigan
March 20, 1995
Member Firm of
Klynvald Peat Marwick Goerdeler
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> $ 6,532
<SECURITIES> 0
<RECEIVABLES> 99,928
<ALLOWANCES> 0
<INVENTORY> 19,791
<CURRENT-ASSETS> 129,904
<PP&E> 150,750
<DEPRECIATION> 83,963
<TOTAL-ASSETS> 211,563
<CURRENT-LIABILITIES> 79,591
<BONDS> 37,826
<COMMON> 8,457
0
0
<OTHER-SE> 77,271
<TOTAL-LIABILITY-AND-EQUITY> 211,563
<SALES> 566,819
<TOTAL-REVENUES> 566,819
<CGS> 523,577
<TOTAL-COSTS> 523,577
<OTHER-EXPENSES> 21,890
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,620
<INCOME-PRETAX> 19,694
<INCOME-TAX> 7,208
<INCOME-CONTINUING> 12,486
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,486
<EPS-PRIMARY> 2.95
<EPS-DILUTED> 0
</TABLE>
