<PAGE> 1
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended March 31, 1995
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 0-5240
---------------------
VERSA TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 39-1143618
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9301 WASHINGTON AVENUE 53408-5012
P.O. BOX 085012 (Zip Code)
RACINE, WISCONSIN
(Address of principal executive offices)
</TABLE>
---------------------
Registrant's telephone number, including area code:
(414) 886-1174
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT
TITLE OF EACH CLASS
COMMON STOCK, $.01 PAR VALUE
---------------------
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 such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for at least 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 a definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
10-K. /X/
Aggregate market value of Versa Technologies, Inc. Common Stock, held by
non-affiliates as of June 1, 1995, was $76,136,129.
Indicate the number of shares outstanding of each of the issuer's classes
of Common Stock as of June 1, 1995: 6,013,322 shares of Common Stock, $.01 par
value.
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of Versa Technologies, Inc 1995 Annual Report to Shareholders (Parts
I, II and IV of Form 10-K)
2. Portions of Versa Technologies, Inc. Notice of Annual Meeting and Proxy
Statement dated June 19, 1995 (Parts I and III of Form 10-K)
===============================================================================
<PAGE> 2
PART I
ITEM 1 BUSINESS
(a) General Development of Business
Versa Technologies, Inc. (The "Company") was organized under Wisconsin law
in November 1970, as the result of the consolidation of Plastics Corporation of
America, Inc. (a Minnesota corporation formed in 1960) and Milwaukee Cylinder
Corporation (a Wisconsin corporation formed in 1967). In July 1986, the Company
changed its state of incorporation from Wisconsin to Delaware.
The Company conducts its business through three operating groups. The
Custom Components Group manufactures and markets component parts from industrial
silicones, phenolic and thermoset plastics, and plastic and thermoplastic
elastomers. Medical manufactures and markets silicone rubber components for the
medical device market. The Fluid Power Group manufactures and markets standard
and specially designed hydraulic and pneumatic cylinders and hydraulically
powered proprietary products for a wide variety of markets.
(b) Financial Information About Industry Segments
The sales and operating income of each industry segment and the
identifiable assets attributable to each industry segment for the three years
ended March 31, 1995, are set forth in Note 10 of the Notes to Consolidated
Financial Statements on page 22 of the Company's 1995 Annual Report to
Shareholders, which note is incorporated herein by reference.
(c) Narrative Description of Business
CUSTOM COMPONENTS GROUP
Moxness Products, Inc. (Moxness) is a leading manufacturer of custom molded
and extruded silicone rubber components for a number of different industries.
Moxness has been a custom fabricator of a wide variety of silicone rubber
components since 1952. Of importance is the company's ability to produce the
specialized tooling required to manufacture component parts, the sophistication
of its quality control facilities, and the expertise of its engineering staff
who assist customers in product design and selection of appropriate materials.
Silicone rubber is an inert material which has unique properties, including
its resistance to temperature extremes and the adverse effects of sunlight,
ozone, moisture and chemicals. Beyond its physical properties, it is suitable
for additional applications because it is bondable to metals, glass, rigid
plastics and ceramics. Moxness manufactures a wide variety of custom molded and
extruded silicone rubber products from silicone bases which it compounds to meet
customers' specific requirements for strength, temperature tolerance, hardness,
color and other properties. Molded silicone rubber is formed in injection
presses, in specially-designed Mox-O-Matic top transfer presses, or in standard
molding presses. Silicone rubber is either press-cured only, or press-cured and
post-cured in ovens. Extruded silicone rubber products are heat cured in
vulcanizing tunnels.
Moxness produces a wide variety of products for the original equipment
market. Silicone rubber seals, gaskets, and grommets are used in a number of
diverse applications. In the automotive market, silicone is used in wire harness
connectors, valve covers, diaphragms, engine gaskets, gas tank fuel sensors, and
transmission seals. Moxness' seals and gaskets are also used in a variety of
appliances, industrial and microwave ovens, autoclaves, and in various
applications in the aerospace industry. Rollers, seals, and gaskets used in
computers and other business machines also make up a good portion of Moxness'
sales.
Through its two plastics units, Moxness Thermoplastics, Inc. and Lovdahl
Manufacturing, the Custom Components Group manufactures products from phenolics,
thermoplastic elastomers, and other thermoset materials for a wide variety of
industrial and consumer applications.
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MARKETING
Moxness' products are marketed nationwide. Approximately 85% of sales are
by internal sales personnel. The balance of sales are through six independent
manufacturers' representatives.
Moxness continues to serve an ever expanding variety of markets. The
company's strategy is to identify new markets/niches where it can capitalize on
its engineering expertise.
The capabilities of the two plastic operations are marketed through the
respective organizations' representatives, augmented by the sales and marketing
staff of Moxness.
COMPETITION
The Custom Components Group competes directly with a number of
manufacturers who provide silicone rubber and plastic products, and indirectly
with manufacturers of other elastomers. The major portion of silicone rubber
production, and the entire plastics production, are manufactured for specific
customers. The Group competes by providing exceptional service and expert
assistance in the design of component parts, production tooling and material
selection and/or formulation. Silicone rubber is most commonly used in
applications where its special properties are either essential or afford a
significant advantage over less expensive elastomers. Thermoplastic elastomers
have a lower material cost and may be "substituted" for silicone rubber in
certain applications. Competition may also take the form of customers developing
their own in-house capability to produce silicone rubber or plastic components.
CUSTOMERS
A majority of customers for the Company's silicone rubber and plastic
products are manufacturers who incorporate the components into products they
manufacture such as business machines, automobiles, and electronic equipment.
ORDER BACKLOG
As of March 31, 1995, the order backlog for the Custom Components Group was
$8,540,000 compared to $8,562,000 a year earlier. It is anticipated that the
order backlog is firm and will be filled within the current fiscal year.
MEDICAL GROUP
In July 1983, the Company established a separate division to administer and
expand the marketing of silicone rubber components to the medical device market.
On November 14, 1994, the Company announced plans to centralize key
functions of its silicone divisions, Moxness Products, Inc., headquartered in
Racine, WI, and Mox-Med, Inc. in Portage, WI. To more efficiently use the
talents within these divisions, human resources, finance, purchasing,
manufacturing planning, and engineering development will be combined to serve
both units. However, specialization in field sales, customer service, marketing
and applications engineering will be retained to ensure that the unique needs of
the Company's medical and industrial customers are met.
One of the most significant areas for the application of silicone rubber is
the medical industry. Manufacturers of medical devices recognize that silicone
rubber offers distinct advantages over other elastomers and polymers. Silicone
rubber has many physical properties critical to the health care industry
including biocompatibility, radiation and heat resistance, chemical and fluid
resistance, tear resistance, cohesion and flexibility. Properly formulated and
cured silicone rubber is odorless and tasteless. It will not support bacterial
growth and does not irritate the skin or other organs. Because of its superior
resistance to chemicals and temperature extremes, silicone rubber can withstand
common sterilization methods.
Mox-Med molds and extrudes silicone components for a wide variety of
applications in the medical device market. Silicone tubing is used in a
multitude of delivery and extraction applications including
3
<PAGE> 4
peristaltic pump tubing, drug delivery systems, surgical and wound drains,
feeding lines, dialysis tubes, intravenous lines, catheters, infusion/aspiration
tubes, and cardiopulmonary lines. Molded parts include silicone diaphragms which
provide precise metering or accurate regulation of fluid flow. Silicone
diaphragms can provide repeated performance over hundreds of thousands of
cycles. These diaphragms are commonly found in intravenous pumps and dialysis
machines. Respirators and breathing apparatus also use silicone diaphragms
because of their reliability and long life.
The engineering, manufacturing and marketing of silicone rubber components
for the medical device market requires special expertise to ensure that exacting
regulatory standards, notably those of the Food and Drug Administration, are
met. Careful manufacturing practices must be performed under clean room
conditions to prevent impurities from accidentally contaminating the silicone
product. Mox-Med's manufacturing facility in Portage, Wisconsin has a controlled
manufacturing environment designed to meet the highest standards for
cleanliness.
MARKETING
Medically-related silicone rubber components are marketed exclusively
through company sales personnel.
CUSTOMERS
Customers are primarily manufacturers of medical devices. There were three
significant customers for Medical's products in fiscal 1995. As a percent of
total Medical sales the three customers individually accounted for 11%, 10% and
10%. There were no customers during fiscal 1994 or 1993 which accounted for more
than 10% of Medical's sales.
COMPETITION
While there are a number of manufacturers providing similar products and
services, Mox-Med's overall capabilities and years of experience give the
company an advantage over its competitors. The company's strengths include its
in-house engineering, tool making, and manufacturing expertise. Competition may
also take the form of customers developing in-house capabilities to produce
components currently manufactured by Mox-Med.
ORDER BACKLOG
As of March 31, 1995, the order backlog was $4,686,000 compared to
$2,457,000 one year ago. It is anticipated that the order backlog is firm and
will be filled within the current fiscal year.
MISCELLANEOUS DATA
Raw materials for both the Custom Components Group and Medical are
available from a limited number of non-affiliated suppliers.
Neither Group has a reliance upon patents, trademarks, licenses, franchises
or concessions in the conduct of their business.
Business is not seasonal and does not require significant amounts of
working capital. Terms of sale are net 30 days. Inventory of raw material not
committed to a specific job is minimal.
Sales to the U.S. Government which could be subject to renegotiation
represent an immaterial portion of the business of the Custom Components Group,
and none of Medical's business.
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FLUID POWER GROUP
The Company's Fluid Power Group is comprised of two operating units.
Milwaukee Cylinder manufactures specially engineered cylinders, pressure
boosters, valves and fluid power products, as well as a standard line of
hydraulic and pneumatic cylinders. Power Gear manufactures hydraulically powered
proprietory systems.
MILWAUKEE CYLINDER
Cylinders convert liquid or air pressure into mechanical force. There are
several variables in cylinder design, such as bore (diameter of the cylinder),
stroke (length of the piston rod in extended and retracted positions) and
pressure application. The company's standard line of cylinders include bore
variables from 1 1/8 inches up to 14 inches, stroke of up to 14 feet, and
pressure capacity up to 5,000 pounds per square inch. The company stocks
cylinder parts within its standard range of variables allowing the rapid
assembly and prompt delivery of cylinders to customer specifications.
Approximately 60% of the sales of fluid power components is attributable to
standard hydraulic and pneumatic cylinders and replacement parts. Remaining
sales consist of hydraulic and pneumatic cylinders and other fluid power
components custom engineered and manufactured to meet customer specifications.
Cylinders are used in a wide variety of applications including automated
production lines, machine tools, cotton baling machinery, food processing
equipment, boat drives and material handling. Pressure boosters produced by the
company are devices used in conjunction with a cylinder to increase output
force. They are used primarily in testing equipment, special metal working
equipment and specialty presses. Milwaukee Cylinder also designs and
manufactures highly specialized cylinders such as servo-actuators which are high
cycle rate cylinders used in vibration and fatigue life testing.
The company's ability to offer strong engineering assistance, fast and
reliable delivery and high performance products enables it to meet its
customers' specific technological demands. The company has many long-standing
relationships with customers, built on years of contact and on the quality of
its products.
POWER GEAR
In 1981 Versa/Tek purchased the Power Gear product line. It consisted of a
single device, a hydraulic jack designed to raise and lower a truck trailer to
dock height. At the time it was sold to one customer, albeit the nation's
leading parcel carrier. While the company is still serving that customer, this
system was adopted by other fleets and remains a mainstay in Power Gear's sales
mix. However, their expertise in hydraulic systems has since been applied to a
broader range of new applications and new customers.
Power Gear's line of hydraulically powered devices are used to level and
stabilize a variety of on and off-the-road vehicles, as well as rail and cargo
containers. Off-highway applications include portable cement and asphalt
factories which are set up at the site of major construction projects. Power
Gear is the exclusive supplier to 12 of the 15 manufacturers of this type of
equipment.
During fiscal 1994, Power Gear entered the recreational vehicle market. Its
initial offering was a specially designed leveling system for the high-end
motorhome market. These fully featured homes on wheels demand leveling to within
3 degrees of fully horizontal to ensure optimal performance of all systems.
Power Gear is the exclusive supplier of this system to the country's largest
manufacturer of upscale motorhomes.
MARKETING
Milwaukee Cylinder's fluid power components which represent approximately
70% of this Group's sales are marketed in the Midwest where there is a heavy
concentration of machine tool, materials handling and heavy equipment
manufacturing. The balance of sales occur nationwide with a nominal portion in
Canada and the United Kingdom. Milwaukee Cylinder has representation agreements
with 46 active fluid power sales engineering firms which maintain offices in the
United States, Canada and the European Common Market. Direct sales account for
approximately 30% of fluid power component sales.
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Power Gear's product line is marketed directly, and through two outside
sales representatives, to end users or original equipment manufacturers in the
United States and Canada. Regular advertising is placed in trade journals.
COMPETITION
Milwaukee Cylinder has several large competitors for fluid power components
and many competitors of comparable size. In addition, the company also faces
competition from manufacturers of fluid power substitutes. Milwaukee Cylinder's
expertise in engineering and product development, its reputation for quality,
and its longstanding relationships with many of its customers significantly
contribute to its ability to compete effectively.
Power Gear is not aware of any other manufacturers of hydraulically
operated systems for raising and leveling semitrailers in competition with its
product lines for the transportation industry. There are three competitors for
Power Gear's leveling systems for the high-end motorhome market.
CUSTOMERS
There were two significant customers for the Group's fluid power products
in fiscal 1995, 1994, and 1993. As a percent of total Group sales, one customer
accounted for 9% in fiscal 1995, 10% in fiscal 1994, and 14% in fiscal 1993. A
second customer accounted for 22% of total Group sales in fiscal 1995, 17% in
fiscal 1994, and 3% in fiscal 1993.
ORDER BACKLOG
As of March 31, 1995, the order backlog for the Fluid Power Group was
$2,548,000 compared to $2,640,000 one year earlier. All of the order backlog is
firm and will be filled within the current fiscal year.
MISCELLANEOUS DATA
Raw materials are readily available from several alternate sources.
Business is not seasonal and working capital requirements are not
significant. Terms of sales are net 30 days.
Sales to the U.S. Government which could be subject to negotiation
represent an immaterial portion of the business of the Fluid Power Group.
THE BUSINESS IN GENERAL
The Company does not maintain separate research and development
departments. Research and development expenditures for business units are a
function of the respective engineering departments and do not represent a
significant percentage of total operating costs.
It is the opinion of management that compliance with Federal, State and
local provisions which regulate the discharge of materials into the environment,
or relate to the protection of the environment, will not require significant
capital expenditures or materially affect future earnings.
The Company had minimal foreign sales and has no foreign operations.
SIGNIFICANT CUSTOMER
For fiscal 1995, 1994 and 1993, no single customer accounted for more than
10% of consolidated revenues.
EMPLOYEES
As of March 31, 1995, the Company had 588 active full-time employees.
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EXECUTIVE OFFICERS OF THE REGISTRANT
At March 31, 1995, the names and ages of all executive officers of the
Company and all positions and offices held with the Company are listed below.
There are no family relationships between such persons.
<TABLE>
<CAPTION>
FIRST
ELECTED
NAME OFFICES OFFICER AGE
- ------------------------------ ------------------------------------------------ ------- ---
<S> <C> <C> <C>
James E. Mohrhauser........... Chief Executive Officer & Chairman of the Board 1970 72
of Directors of the Company
Thomas J. Magulski............ President & Chief Operating Officer of the 1993 51
Company
Robert M. Sukalich............ Vice President-Finance, Treasurer & Assistant 1992 36
Secretary of the Company
David J. McKendrey............ President and Chief Operating Officer of 1982 57
Milwaukee Cylinder, the Company's Fluid Power
Group
Raymond T. Aexel.............. President and Chief Operating Officer of both 1994 54
Moxness Products, Inc. and Mox-Med, Inc.
</TABLE>
All officers are elected annually by the Board of Directors at the first
Board meeting following each annual meeting of the shareholders. There are no
agreements between any of the officers and any other person pursuant to election
as an officer.
Both Mr. Mohrhauser's and Mr. McKendrey's occupations for the past five
years have been stated in the above table. Mr. Magulski was elected President
and Chief Operating Officer of the Company during December 1993. Mr. Magulski
worked as a business consultant for the Company from March 1992 through
September 1993. Prior to his involvement with the Company, he was Vice President
of Intertech Resources, Inc. Mr. Sukalich was elected Vice President of Finance
for the Company during July 1993. From July 1992 to July 1993, Mr. Sukalich was
Treasurer and Assistant Secretary for the Company. From January 1992 to July
1992, Mr. Sukalich was Controller and Assistant Treasurer for the Company. Prior
to January 1992, Mr. Sukalich was Controller (July 1989 to December 1991) for
the Company's Custom Components Group. Mr. Aexel was appointed President and
Chief Operating Officer of Moxness Products, Inc. during November 1994 and of
Mox-Med, Inc. during March 1994. Mr. Aexel's occupation for in excess of five
years prior to March 1994 was as Vice President/General Manager of Graham
Medical.
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ITEM 2 PROPERTIES
The following table sets forth certain information with respect to the
Company's principal facilities as of March 31, 1995:
<TABLE>
<CAPTION>
SQUARE
FEET OF
LOCATION FLOOR SPACE DESCRIPTION AND PRINCIPAL USE
- ------------------------- ----------- -------------------------------------------------------
<S> <C> <C>
Racine, WI(1)............ 62,000 Sprinklered brick and cement block building located on
approximately three acres of land. Industrial silicone
rubber products manufacturing and general office.
East Troy, WI(1)......... 22,350 Sprinklered steel building on five acres of land.
Industrial silicone rubber products manufacturing.
Wausau, WI(1)............ 21,600 Sprinklered steel building on five acres of land.
Industrial silicone rubber products manufacturing.
Portage, WI(1)........... 50,000 Sprinklered steel and brick building located on eleven
acres of land. Medical silicone rubber products
manufacturing.
Cudahy, WI(1)............ 68,250 Sprinklered brick and steel building located on five
acres of land. Fluid power products manufacturing and
offices. The Company owns an additional fifteen acres
of adjacent vacant land.
Beaver Dam, WI(1)........ 25,300 Steel building located in an industrial park. Power
Gear manufacturing and offices.
Racine, WI(2)............ 13,700 Brick building located on main thoroughfare. Phenolic
and thermoset plastic molding.
Stevensville, MI(1)...... 24,300 Brick and steel building located in industrial area.
Plastic and thermoplastic elastomer molding.
</TABLE>
- ---------------
(1) The Company owns these facilities. There are no debts secured by these
properties.
(2) Leased facility. Lease expires in March 1996.
All facilities are in good condition and in the opinion of Management,
suitable and adequate for their intended uses.
ITEM 3 LEGAL PROCEEDINGS
There are no material proceedings pending to which the Company is a party,
or to which any of its property is subject.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders in the fourth
quarter.
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PART II
All information for this Part is incorporated by reference to the Company's
1995 Annual Report to Shareholders, as follows:
<TABLE>
<CAPTION>
ITEM CAPTION INFORMATION INCORPORATED BY REFERENCE TO:
- ---- ------------------------------------------ ------------------------------------------
<S> <C> <C>
5. MARKET FOR THE COMPANY'S COMMON STOCK AND Annual Report, page 27
RELATED SECURITY HOLDER MATTERS
6. SELECTED FINANCIAL DATA Annual Report, pages 28 and 29
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF Annual Report, pages 24 through 26
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA Annual Report, pages 14 through 23 and 27
9. CHANGES IN AND DISAGREEMENTS WITH Not applicable
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
</TABLE>
PART III
All information for this part, except that set forth under the sub-heading
Executive Officers of the Registrant in Item 1(c) Part I, is incorporated by
reference to the Company's Proxy Statement for the 1995 Annual Meeting of
Shareholders as follows:
<TABLE>
<CAPTION>
ITEM CAPTION INFORMATION INCORPORATED BY REFERENCE TO:
- ---- ------------------------------------------ ------------------------------------------
<S> <C> <C>
10. DIRECTORS AND EXECUTIVE OFFICERS OF THE Proxy Statement, page 2 through 4; and
REGISTRANT Form 10-K Item 1(c) Part I, page 7.
11. EXECUTIVE COMPENSATION Proxy Statement, pages 6 through 11.
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Security ownership of certain beneficial owners and management is presented on
pages and of the Company's Proxy Statement for the 1995 Annual Meeting of Shareholders,
which data is incorporated herein by reference.
(b) The Company knows of no contractual arrangements which may, at a subsequent date,
result in a change in control of the Company.
13. CERTAIN RELATIONSHIPS AND RELATED Not applicable
TRANSACTIONS
</TABLE>
PART IV
ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
1) The consolidated financial statements together with the report thereon
of Deloitte & Touche LLP presented on pages 14 through 23 of the
Company's 1995 Annual Report to Shareholders, incorporated herein by
reference.
2) Financial Statement Schedule--
Schedule VIII Valuation and Qualifying Accounts
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Independent Auditors' Report on Financial Statement Schedule
All other schedules are omitted as they are not required, or the required
information is shown in the consolidated financial statements or notes thereto.
Financial statements of the Registrant are omitted because it is primarily an
operating company and all the subsidiaries included in the consolidated
financial statements are wholly-owned.
3) Exhibits
<TABLE>
<S> <C>
3.1 Certificate of Incorporation of Versa Technologies, Inc. as amended and in
effect on March 31, 1988 (incorporated by reference to Form 10-K for fiscal
year ended March 31, 1988).
3.2 By-Laws of Versa Technologies, Inc., as in effect on March 31, 1992
(incorporated by reference to Form 10-K for fiscal year ended March 31, 1992).
10.2 Copy of 1982 Employee Incentive Stock Option Plan as amended (incorporated by
reference to Form 10-K for fiscal year ended March 31, 1988).
10.6 Copy of Supplemental Pension Agreement with Mr. James E. Mohrhauser, as
amended through December 1, 1980 (incorporated by reference to Form 10-K, for
fiscal year ended March 31, 1981).
10.9 Copy of Versa Technologies, Inc. Divisional Executive Bonus Plan, as amended
effective April 1, 1994 (incorporated by reference to Form 10-K for fiscal
year ended March 31, 1994).
10.10 Copy of Versa Technologies, Inc. 1992 Employee Incentive Stock Option Plan
(incorporated by reference to Form 10-K for fiscal year ended March 31, 1993).
10.11 Copy of 1993 Employee Stock Purchase and Payroll Savings Plan (incorporated by
reference to Form 10-K for fiscal year ended March 31, 1994).
10.12 Copy of Deferred Compensation Plan for Executives which became effective April
1, 1994 (incorporated by reference to Form 10-K for fiscal year ended March
31, 1994).
10.13 Copy of Employment Agreement with Mr. James E. Mohrhauser. The agreement is
for the period April 1, 1994 through March 31, 1997 (incorporated by reference
to Form 10-K for fiscal year ended March 31, 1994).
10.14 Copy of Employment Agreement with Mr. Thomas J. Magulski (incorporated by
reference to Form 10-K for fiscal year ended March 31, 1994).
10.15 Copy of Versa Technologies, Inc.'s Stock Purchase and Dividend Reinvestment
Plan (incorporated by reference to Form S-3 filed with the SEC on November 18,
1994, file No. 33-86446).
13. Pages from the 1995 Annual Report to Shareholders which were incorporated by
reference to Form 10-K.
21. Subsidiaries of Versa Technologies, Inc.
23. Consent of Independent Auditors.
27. Financial Data Schedule.
</TABLE>
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the quarter ended March 31,
1995.
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VERSA TECHNOLOGIES, INC. AND SUBSIDIARIES
SCHEDULE VIII--VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED MARCH 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
DEDUCTIONS
(FOR BAD DEBTS
BALANCE AT ADDITIONS WRITTEN OFF OR
BEGINNING CHARGED TO COSTS INVENTORY BALANCE AT
DESCRIPTION OF PERIOD AND EXPENSES DISPOSED OF) END OF PERIOD
- -------------------------------------------- ---------- ---------------- -------------- -------------
<S> <C> <C> <C> <C>
Deducted from receivables account in the
balance sheets--
Allowance for losses in collection, year
ended:
March 31, 1995......................... $ 189,000 $ 51,529 $ 78,648 $ 161,881
March 31, 1994......................... 116,000 107,221 34,221 189,000
March 31, 1993......................... 102,000 47,204 33,204 116,000
Deducted from inventories account in the
balance sheets--
Reserve for obsolete inventory:
March 31, 1995......................... $ 314,000 $148,000 $314,000 $ 148,000
March 31, 1994......................... -0- 314,000 -0- 314,000
</TABLE>
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INDEPENDENT AUDITORS' REPORT
To the Board of Directors and
Shareholders of Versa Technologies, Inc.:
We have audited the consolidated financial statements of Versa
Technologies, Inc. and subsidiaries as of March 31, 1995 and 1994, and for each
of the three years in the period ended March 31, 1995, and have issued our
report thereon dated May 16, 1995 which report expresses an unqualified opinion
and includes an explanatory paragraph relating to the change in the methods of
accounting for postretirement benefits other than pensions and accounting for
income taxes to conform with Statement of Financial Accounting Standards No. 106
and No. 109, respectively; such financial statements and report are included in
your 1995 Annual Report to Shareholders and are incorporated herein by
reference. Our audits also included the consolidated financial statement
schedule of Versa Technologies, Inc. and subsidiaries, listed in Item 14. This
consolidated financial statement schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion based on our audits. In
our opinion, such consolidated financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
Deloitte & Touche LLP
Milwaukee, Wisconsin
May 16, 1995
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act
of 1934, Versa Technologies, Inc. has duly caused this Form 10-K to be signed on
its behalf by the undersigned, thereunto duly authorized.
Versa Technologies, Inc.
by /s/ JAMES E. MOHRHAUSER
---------------------------------
James E. Mohrhauser
Chairman & Chief Executive
Officer
by /s/ ROBERT M. SUKALICH
---------------------------------
Robert M. Sukalich
Vice President, Treasurer &
Assistant Secretary (Chief
Financial Officer)
Date: June 16, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Form 10-K has been signed below by the following persons on behalf of Versa
Technologies, Inc. and in the capacities and on the dates indicated:
/s/ DENIS H. CARROLL
- ---------------------------------------------------
Denis H. Carroll, Director
June 9, 1995
/s/ HERMAN B. MCMANAWAY
- ---------------------------------------------------
Herman B. McManaway, Director
June 8, 1995
/s/ JAMES E. MOHRHAUSER
- ---------------------------------------------------
James E. Mohrhauser, Director
June 16, 1995
/s/ THOMAS J. MAGULSKI
- ---------------------------------------------------
Thomas J. Magulski, Director
June 16, 1995
/s/ MORRIS W. REID
- ---------------------------------------------------
Morris W. Reid, Director
June 5, 1995
/s/ JON G. UDELL
- ---------------------------------------------------
Jon G. Udell, Director
June 5, 1995
/s/ WILLIAM P. KILLIAN
- ---------------------------------------------------
William P. Killian, Director
June 3, 1995
/s/ JOAN R. LLOYD
- ---------------------------------------------------
Joan R. Lloyd, Director
June 3, 1995
13
<PAGE> 14
File No 0-5240
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL PAGE
DESIGNATION OF NUMBER OF EXHIBIT
EXHIBIT OR INCORPORATION
(REG. S-K, ITEM 601) EXHIBIT REFERENCE
- -------------------- ----------------------------------------------------------- -----------------
<S> <C> <C>
3.1 Certification of Incorporation of Versa Technologies, Inc.,
as amended................................................. (b)
3.2 By-Laws of Versa Technologies, Inc. ....................... (c)
10.2 1982 Employee Incentive Stock Option Plan, as amended...... (b)
10.6 Supplemental Pension Agreement............................. (a)
10.9 Divisional Executive Bonus Plan............................ (e)
10.10 1992 Employee Incentive Stock Option Plan.................. (d)
10.11 1993 Employee Stock Purchase and Payroll Savings Plan...... (e)
10.12 Deferred Compensation Plan for Executives.................. (e)
10.13 Employment Agreement with Mr. James E. Mohrhauser.......... (e)
10.14 Employment Agreement with Mr. Thomas J. Magulski........... (e)
10.15 Versa Technologies, Inc. Stock Purchase and Dividend
Reinvestment Plan.......................................... (f)
13 Pages from the 1995 Annual Report to Stockholders which
were incorporated by reference to Form 10-K................
21 Subsidiaries of Versa Technologies, Inc. ..................
23 Consent of Independent Auditors............................
27 Financial Data Schedule....................................
</TABLE>
- ---------------
(a) Incorporated by reference to Registrant's Form 10-K for fiscal year ended
March 31, 1981.
(b) Incorporated by reference to Registrant's Form 10-K for fiscal year ended
March 31, 1988.
(c) Incorporated by reference to Registrant's Form 10-K for fiscal year ended
March 31, 1992.
(d) Incorporated by reference to Registrant's Form 10-K for fiscal year ended
March 31, 1993.
(e) Incorporated by reference to Registrant's Form 10-K for fiscal year ended
March 31, 1994.
(f) Incorporated by reference to Registrant's Form S-3 filed with the SEC on
November 18, 1994, file No. 33-86446.
15
<PAGE> 1
EXHIBIT 13
QUARTERLY FINANCIAL DATA (UNAUDITED)
VERSA TECHNOLOGIES, INC.
<TABLE>
<CAPTION>
Net Earnings
Quarterly Results Net Sales Gross Profit Earnings Per Share
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fiscal Year Ended March 31, 1995
First Quarter $16,783 $5,298 $1,557 $0.26
Second Quarter 16,481 5,440 1,739 $0.29
Third Quarter 16,154 5,153 1,582 $0.26
Fourth Quarter 17,547 5,894 1,928 $0.32
- ----------------------------------------------------------------------------------------------
$66,965 $21,785 $6,806 $1.13
==============================================================================================
Fiscal Year Ended March 31, 1994
First Quarter $14,614 $4,583 $1,330 $0.22
Second Quarter 16,025 5,097 1,645 $0.27
Third Quarter 15,051 4,761 1,332 $0.22
Fourth Quarter 16,147 5,323 1,798 $0.30
- ----------------------------------------------------------------------------------------------
$61,837 $19,764 $6,105 $1.01
==============================================================================================
</TABLE>
PER SHARE COMMON STOCK DATA
<TABLE>
<CAPTION>
Year Ended March 31, 1995 Year Ended March 31, 1994
Market Price (a) Dividends Market Price (a) Dividends
------------------------- -------------------------
Fiscal
Quarter High Low Close High Low Close
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1st 15-1/4 12-1/4 12-3/8 .08 14-1/4 13-1/4 14 .07
2nd 15 12-1/4 14-5/8 .42(c) 16 13-1/4 14-3/4 .38(b)
3rd 15 12-3/4 13-3/4 .09 15-3/4 13-3/4 13-3/4 .08
4th 15-1/4 11-1/2 13-3/4 .09 15 13-3/4 15 .08
</TABLE>
(a) NASD's reporting of Versa Technologies Common Stock on their National Market
System (NASDAQ/NMS). Prices represent the daily closing price and do not
include retail markup, markdown or commission.
(b) Includes special cash dividend of $.30 per share.
(c) Includes special cash dividend of $.33 per share.
<PAGE> 2
SUMMARY OF SELECTED FINANCIAL DATA
VERSA TECHNOLOGIES, INC.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
(Dollars in Thousands, except per share amounts)
Fiscal Year Ended March 31 1995 1994 1993 1992 1991
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Statement of Earnings
Net sales $66,965 $61,837 $52,848 $48,935 $51,898
Cost of sales 45,180 42,073 34,806 31,908 33,410
Selling and administrative expenses 11,793 10,938 10,322 9,621 9,550
Operating income 9,992 8,826 7,720 7,406 8,938
Other income (expense) - net 779 750 787 740 1,004
Earnings before income taxes 10,771 9,576 8,507 8,146 9,942
Pre-tax earnings as % of net sales 16.1% 15.5% 16.1% 16.6% 19.2%
Income taxes 3,965 3,580 3,090 3,020 3,750
Net earnings 6,806 6,105 * 5,417 5,126 6,192
Net earnings as % of net sales 10.2% 9.9% 10.3% 10.5% 11.9%
Per Common Share(1)
Net earnings 1.13 1.01 * 0.90 0.86 1.04
Dividends declared and paid 0.68 (5) 0.61 (4) 0.52 (3) 0.24 0.23
Book value 8.00 7.56 7.21 6.80 6.15
Year end market value 13.75 15.00 13.25 15.00 14.00
At Year End
Working capital 29,147 29,286 29,545 26,985 22,549
Working capital ratio 6.1 to 1 6.4 to 1 8.3 to 1 8.1 to 1 6.4 to 1
Property and equipment - net 19,945 16,849 14,262 14,122 14,077
Total assets 56,780 53,569 49,739 46,884 42,707
Long-term obligations -- -- -- -- --
Shareholders' equity 48,068 45,560 43,686 40,897 36,501
Shares outstanding (000)(1) 6,012 6,023 6,059 6,013 5,935
</TABLE>
(1) Shares outstanding and per share data have been adjusted to reflect stock
splits
(2) Includes special cash dividend of $.133 per share.
(3) Includes special cash dividend of $.25 per share.
(4) Includes special cash dividend of $.30 per share.
(5) Includes special extra cash dividend of $.33 per share.
* Includes the cumulative effect of accounting changes, which increased Net
Earnings by $109,000 of $.02 per share.
<PAGE> 3
VERSA TECHNOLOGIES, INC.
<TABLE>
<CAPTION>
-------------------------------------------------------------------
1990 1989 1988 1987 1986 1985
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$53,122 $47,941 $45,587 $41,215 $38,940 $35,145
34,803 29,778 28,131 25,271 24,648 23,693
9,238 8,713 8,093 7,617 7,242 6,584
9,081 9,450 9,363 8,327 7,050 4,868
697 620 346 (99) 138 270
9,778 10,070 9,709 8,228 7,188 5,138
18.4% 21.0% 21.3% 20.0% 18.5% 14.6%
3,742 3,820 3,951 3,997 3,382 2,052
6,036 6,250 5,758 4,231 3,806 3,086
11.4% 13.0% 12.6% 10.3% 9.8% 8.8%
1.02 1.07 0.99 0.73 0.59 0.46
0.184 0.15 0.253 (2) 0.101 0.075 0.071
5.34 4.45 3.50 2.73 2.10 2.44
12.50 14.58 13.83 10.27 8.93 5.78
18,420 14,668 12,103 7,747 7,044 8,182
4.4 to 1 4.3 to 1 3.7 to 1 2.8 to 1 2.3 to 1 3.5 to 1
13,195 12,395 10,449 10,210 10,078 9,940
39,101 33,736 27,912 23,285 23,282 22,430
-- 1,065 1,210 1,375 4,604 1,675
31,633 26,168 20,410 15,804 12,101 16,317
5,928 5,879 5,831 5,781 5,764 6,701
</TABLE>
<PAGE> 4
MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION
VERSA TECHNOLOGIES, INC.
<TABLE>
<CAPTION>
RESULTS OF OPERATIONS YEAR ENDED MARCH 31 PERCENTAGE OF NET SALES
-----------------------------------------------------------------------------------------------------------
(Dollars in Thousands) 1995 1994 1993 1995 1994 1993
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Sales $66,965 $61,837 $52,848 100.0% 100.0% 100.0%
Gross Profit 21,785 19,764 18,042 32.5% 32.0% 34.1%
Selling and Administrative 11,793 10,938 10,322 17.6% 17.7% 19.5%
Operating Income 9,992 8,826 7,720 14.9% 14.3% 14.6%
Other Income 779 750 787 1.2% 1.2% 1.5%
Earnings Before Taxes 10,771 9,576 8,507 16.1% 15.5% 16.1%
Income Taxes 3,965 3,580 3,090 5.9% 5.8% 5.8%
Net Earnings $6,806 $6,105(1) $5,417 10.2% 9.9% 10.3%
</TABLE>
(1) Includes the cumulative effect of accounting changes, which increased net
earnings by $109,000.
The above table sets forth, for the fiscal years indicated, the results of
operations of the Company along with the relative percentages of sales in those
items from year to year.
NET SALES
Sales for fiscal 1995 increased $5.1 million, or 8% over 1994, to a record
$67.0 million. For the second year in a row, our Fluid Power Group was the
largest contributor to the increase. Fluid Power's sales increased $4.2
million or 17% over the prior year. Shipments of the Power Gear leveling
device for the upper end recreational vehicle market continued to be strong.
Medical, reversing the downward performance of last year, had an increase in
sales of $1.6 million, or 15%. These results were due to the stabilization of
Medical's core business and an increase in shipment of products for the
consumer market. Sales for the Custom Components Group were down slightly.
Increased sales to the automotive market were offset by the loss of a
significant project for the office equipment market. The end-of-life project
was lost during the second half of the year. Sales for the project were
approximately $1.3 million during fiscal 1995.
Sales for fiscal 1994 increased $9.0 million, or 17% over 1993. Fluid
Power's sales increased $5.6 million or 29% over the prior year. This increase
was due to the first quarter introduction of a new Power Gear leveling device
for the upper end recreational vehicle market combined with increased shipment
of cylinders. Another contributor to the overall sales increase was the Custom
Component Group with an increase of $3.4 million, or 14%. Custom Component's
sales improved due to increased shipment of automotive-related products.
Medical experienced a $500,000 drop in sales. The decline was due to the loss
of a major customer during the first month of fiscal 1994. This customer's
annual sales were close to $1.0 million during fiscal 1993.
GROSS PROFIT
Gross profit for fiscal 1995 increased by $2.0 million, or 10%. Gross profit
as a percentage of sales increased slightly to 32.5%. The Fluid Power Group's
gross profits were up $1.6 million, or 18%. This increase was due to the
higher sales volume, as gross profit as a percentage of sales remained at a
very respectable 37%. Medical, on the strength of higher volume and more
favorable product mix, had an increase in gross profit of $900,000, or 21%.
The Custom Components Group struggled as gross profits fell $500,000.
Moxness Products Inc., our company specializing in silicone components, saw
further decline in gross profit as a percentage of sales due to the continued
shift in product mix to automotive-related applications. Gross profit was also
impacted by a $150,000 inventory write off of material on hand related to the
lost office equipment project. At Moxness Thermoplastics (Thermo), gross
profits decreased $300,000 due in part to the loss of a point-of-purchase
display project. This project had $400,000 in shipments during fiscal 1994,
and produced better than average gross profits. The project, for a major
consumers' goods company, was lost by Thermo's customer, resulting in the loss
of business for Thermo.
<PAGE> 5
Gross profit for fiscal 1994 increased by $1.7 million or 10%. The
increase was due to the Fluid Power Group where both business units, Milwaukee
Cylinder and Power Gear, produced a combined increase in gross profit of $2.1
million, or 31%. The increase at Milwaukee Cylinder was fueled by higher
volume and a more favorable sales product mix, including more special versus
standard cylinders. Power Gear's growth was the result of the new product
introduction noted above.
Gross profit for the Custom Component Group increased $400,000, or 7%.
The incremental improvement in gross profit did not, however, proportionately
reflect the increase in volume. Moxness Products, Inc. had an increase in
automotive related business which, due to pricing competition, generated lower
gross profits. At Moxness Thermoplastics sales were up $800,000, while gross
profit was flat. This was due to a shift in the sales mix from product sales
to tooling sales which carry lower margins.
Medical experienced a $800,000 decrease, or 16%, in gross profit due,
primarily, to the loss of a major customer. New sales at lower margins coupled
with the reduction in overall volume kept operating income down over the
previous year.
SELLING AND ADMINISTRATIVE
Selling and administrative expenses increased $900,000 during fiscal 1995.
Selling and administrative as a percentage of sales declined from 17.7% in
fiscal 1994 to 17.6% in fiscal 1995. There were two significant reasons for
the increase. First, commissions were up $300,000, primarily at our Fluid
Power Division. Second, bonuses paid increased at both corporate and Medical
by a combined $300,000.
Selling and administrative expenses increased $600,000, or 6% during
fiscal 1994. While total selling and administrative expenses increased, they
declined as a percentage of sales from 19.5% for fiscal 1993 to 17.7% for
fiscal 1994. Selling and administrative expenses would have been virtually
flat except for increases of $350,000 for commissions and $150,000 related to
employee recruitment. Corporate expenses as a percentage of sales declined to
3.9%.
OPERATING INCOME
Operating income for fiscal 1995 increased $1.2 million or 13% to a record $9.9
million. Operating income as a percent of sales increased from 14.3% in fiscal
1994 to 14.9% in fiscal 1995. This improvement to 14.9% of sales represents
the first improvement in over four years.
OTHER INCOME
The largest component of other income is interest income which for the fiscal
years 1995, 1994, and 1993 was $753,000, $683,000 and $735,000, respectively.
Capital investments of $6.1 million plus a special dividend of $2.0 million
resulted in a decrease of $1.6 million in cash and cash equivalents. This
decrease was offset by the increase in short term rates throughout the year,
resulting in an increase in interest income.
INCOME TAXES
The effective tax rate for the Company decreased from 37.4% in fiscal 1994 to
36.8% this year. This was due to a decrease in the state tax provisions
compared to the prior year. Fiscal 1994's state tax provision was increased to
accrue for an in-progress state tax audit at that time.
CASH FLOWS AND LIQUIDITY
Cash provided from operating activities was $8.7 million during fiscal 1995, up
from $7.5 million the prior year. This increase was due to higher earnings,
plus a decrease in the number of days sales outstanding in accounts receivable,
offset by a decrease in inventory turns. Inventories at March 31, 1995
increased $1.1 million from a year ago to $7.8 million. $800,000 of the
increase was at the Fluid Power Group, where sales increased 17% over the prior
year.
Cash used in inventing activities increased to $6.0 million during fiscal
1995, as the Company continues to invest heavily in equipment. Fiscal 1995
capital additions exceeded depreciation expense by a 2 to 1 margin. The
majority of the additions were at the Customs Components Group. For the
upcoming year additions are again planned to exceed the year's depreciation
expense as the Company strives to stay current with manufacturing technology.
During fiscal 1995 the Company paid $4.1 million in dividends or $.68 per
share (included a special $.33 per share dividend). This represents an
approximately 60% payout of net earnings to shareholders. During February
1995, the Company adopted a program to repurchase up to 600,000 shares or 10%
of its common stock. As of March 31, 1995, 42,500 shares had been repurchased
at a cost of $569,000. If the Company were to repurchase the remaining 557,500
shares under the repurchase program it would require $7.7 million (based on the
year end price of $13.75 per share).
At March 31, 1995 cash and cash equivalents totaled $16.0 million and
exceeded our current labilities by a ratio of 2.8 to 1. This liquidity,
combined with the Company's debt free status give management significant
latitude in dealing with future opportunities and commitments, including the
stock repurchase program.
<PAGE> 6
INFLATION
Inflation and price adjustments were of minor significance.
ENVIRONMENTAL MATTERS
The company continually monitors its compliance with environmental regulations.
This is accomplished by in house staff supplemented by outside consultants. At
March 31, 1995 the Company had reserves of $190,000 for environmental cleanup
at its plants. These reserves, which were established during fiscal 1994 and
1993, relate specifically to our Wausau and Cudahy manufacturing facilities.
These reserves did not change during the current year as the Company waits for
approval of its plans of action by regulatory agencies. Management believes
that future earnings will not be impacted in a significant manner.
DIVISIONAL REALIGNMENT
On November 14, 1994, the Company announced plans to centralize key functions
of its silicone divisions, Moxness Products, Inc., headquartered in Racine, WI,
and Mox-Med, Inc., in Portage, WI. To more efficiently use the talents within
these divisions, human resources, finance, purchasing, manufacturing planning,
and engineering development will be combined to serve both units. However,
specialization in field sales, customer service, marketing and applications
engineering will be retained to ensure that the unique needs of the Company's
medical and industrial customers are met. Raymond T. Aexel, president of
Mox-Med, Inc. will head up the centralized activities.
During fiscal 1995 costs associated with the realignment were
approximately $169,000. These costs related primarily to the relocation of
management from Portage, WI to Racine, WI. Management estimates that an
additional $135,000 in costs will be incurred during fiscal 1996 to complete
the realignment.
ACCOUNTING PRONOUNCEMENTS
The Company adopted Statement of Financial Accounting Standard (SFAS) No. 106
"Employer Accounting for Postretirement Benefits Other Than Pensions,"
effective April 1, 1993. SFAS No. 106 requires the Company to recognize
postretirement benefits, including health and welfare benefits, on an accrual
basis. The Company provides pre-Medicare-eligibility health insurance and
minimal life insurance benefits to a limited group of retired employees who
attain specified age and years of service requirements. The Company has
elected to recognize the cumulative effect of this obligation on the immediate
recognition method. The cumulative effect as of April 1, 1993 of adopting SFAS
No. 106 was an increase in accrued postretirement benefits of $406,000 and a
decrease in net earnings of $255,000, or $.04 per share, which was recorded
during the first quarter ended June 30, 1993.
The Company adopted Statement of Financial Accounting Standard (SFAS) No.
109 "Accounting for Income Taxes," effective April 1, 1993. SFAS No. 109
requires the use of the liability method of accounting for deferred income
taxes. The cumulative effect as of April 1, 1993 of adopting SFAS No. 109 was
to increase net earnings by $364,000, or $.06 per share, which was recorded
during the first quarter ended June 30, 1993.
<PAGE> 7
CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
VERSA TECHNOLOGIES, INC.
(Dollars in Thousands, except per share amounts)
- -------------------------------------------------------------------------------------------
Years Ended March 31 1995 1994 1993
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Sales $66,965 $61,837 $52,848
Cost of Sales 45,180 42,073 34,806
--------------------------------------
Gross Profit 21,785 19,764 18,042
Selling and Administrative Expenses 11,793 10,938 10,322
--------------------------------------
Operating Income 9,992 8,826 7,720
--------------------------------------
Other Income (Deductions):
Interest expense (9) (3) (3)
Interest income 753 683 735
Miscellaneous, net 35 70 55
--------------------------------------
779 750 787
--------------------------------------
Earnings Before Income Taxes and Cumulative
Effect of Accounting Changes 10,771 9,576 8,507
Income Taxes 3,965 3,580 3,090
--------------------------------------
Earnings Before Cumulative Effect of Accounting $6,806 $5,996 $5,417
Cumulative Effect of Changes in Accounting for:
Postretirement benefits other than pensions
(net of income tax benefit of $151) -- (255) --
Income Taxes -- 364 --
- -------------------------------------------------------------------------------------------
Net Earnings $6,806 $6,105 $5,417
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Earnings per share before cumulative effect of
accounting changes $1.13 $0.99 $0.90
Cumulative effect per share of accounting changes:
benefits other than pensions -- (0.04) --
Income taxes -- 0.06 --
- -------------------------------------------------------------------------------------------
Net earnings per weighted average common shares
outstanding $1.13 $1.01 $0.90
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
Weighted average common shares outstanding 6,039 6,056 6,038
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
</TABLE>
See notes to consolidated financial statements.
<PAGE> 8
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
VERSA TECHNOLOGIES, INC.
(Dollars in Thousands, except share and per share amounts)
- ------------------------------------------------------------------------------------
March 31 1995 1994
- ------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $15,967 $17,611
Receivables, less allowance of $162 in 1995, and
$189 in 1994 9,404 9,235
Inventories 7,808 6,744
Other current assets 1,733 1,157
----------------------
Total current assets 34,912 34,747
----------------------
Property, Plant, and Equipment - at cost
Land 591 591
Buildings 8,639 8,113
Machinery and equipment 33,946 29,115
----------------------
43,176 37,819
Less accumulated depreciation 23,231 20,970
----------------------
19,945 16,849
Intangibles 1,562 1,594
Other Non-Current Assets 361 379
----------------------
$56,780 $53,569
====================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $1,750 $2,233
Accrued expenses 3,401 2,756
Income taxes 495 436
Employee stock savings plan 119 36
----------------------
Total current liabilities 5,765 5,461
----------------------
Deferred Income Taxes 485 455
Deferred Pension, Deferred Compensation and
Postretirement Benefit Expense 2,462 2,093
Shareholders' Equity:
Preferred Shares -- authorized 1,000,000, $.01 par value;
none issued -- --
Common Shares -- authorized, 10,000,000, $.01 par value;
issued 6,063,200 in 1995 and 1994 61 61
Additional paid-in capital 18,710 18,789
Retained earnings 29,997 27,300
----------------------
48,768 46,150
Less treasury stock, at cost - 51,378 shares in 1995 and
40,000 in 1994 700 590
----------------------
Total shareholders' equity 48,068 45,560
----------------------
$56,780 $53,569
====================================================================================
</TABLE>
See notes to consolidated financial statements.
<PAGE> 9
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
VERSA TECHNOLOGIES, INC.
(Dollars in Thousands, except share and per share amounts)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Additional Total
Years Ended March 31, 1995, 1994, and 1993 Common Stock paid in Retained Treasury Shareholders'
Shares Amount capital earnings stock Equity
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at March 31, 1992 6,013 $60 $18,225 $22,612 $0 $40,897
Exercise of stock options 46 1 496 -- -- 497
Tax benefit from exercise of stock options -- -- 12 -- -- 12
Net earnings -- -- -- 5,417 -- 5,417
Cash dividends declared -- $.52 per share* -- -- -- (3,137) -- (3,137)
- -----------------------------------------------------------------------------------------------------------------------------
Balance at March 31, 1993 6,059 61 18,733 24,892 0 43,686
Exercise of stock options 4 -- 53 -- -- 53
Tax benefit from exercise of stock options -- -- 3 -- -- 3
Purchase of treasury stock -- 40,000 shares -- -- -- -- (590) (590)
Net earnings -- -- -- 6,105 -- 6,105
Cash dividends declared -- $.61 per share** -- -- -- (3,697) -- (3,697)
- -----------------------------------------------------------------------------------------------------------------------------
Balance at March 31, 1994 6,063 61 18,789 27,300 (590) 45,560
Exercise of stock options -
31,122 treasury shares were reissued -- -- (108) -- 459 351
Tax benefit from exercise of stock options -- -- 29 -- -- 29
Purchase of treasury stock -- 42,500 shares -- -- -- -- (569) (569)
Net earnings -- -- -- 6,806 -- 6,806
Cash dividends declared -- $.68 per share*** -- -- -- (4,109) -- (4,109)
- -----------------------------------------------------------------------------------------------------------------------------
Balance at March 31, 1995 6,063 $61 $18,710 $29,997 ($700) $48,068
=============================================================================================================================
</TABLE>
* Includes special cash dividend of $.25 per share.
** Includes special cash dividend of $.30 per share.
*** Includes special cash dividend of $.33 per share.
See notes to consolidated financial statements.
<PAGE> 10
CONSOLIDATED STATEMENTS OF CASH FLOWS
VERSA TECHNOLOGIES, INC.
(Dollars in Thousands)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
Years Ended March 31 1995 1994 1993
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net earnings $6,806 $6,105 $5,417
Adjustments to reconcile to net cash
provided by operating activities:
Cumulative effect of accounting changes -- (109) --
Depreciation and amortization 2,956 2,842 2,644
Provision for losses on receivables 52 107 47
Loss (gain) on disposition of plant and equipment 15 (12) (12)
Increase in receivables (221) (1,403) (1,164)
(Increase) decrease in inventories (1,064) (1,097) 259
Increase in other current assets (576) (69) (125)
(Decrease) increase in accounts payable (483) 671 180
Increase in accrued expenses 645 690 181
Increase (decrease) in income taxes payable 59 26 (105)
Increase in employee stock purchase
and payroll savings plan 83 36 --
Increase (decrease) in deferred pension, postretirement
benefits and compensation expense 369 275 (15)
Decrease (increase) in deferred income taxes 30 (529) (163)
----------------------------------
Net cash provided by operating activities 8,671 7,533 7,144
----------------------------------
Cash Flows from Investing Activities:
Proceeds from disposition of plant and equipment 37 157 45
Capital expenditures (6,070) (5,509) (2,741)
Other 16 14 13
----------------------------------
Net cash used in investing activities (6,017) (5,338) (2,683)
----------------------------------
Cash Flows from Financing Activities:
Proceeds from exercise of common stock options 380 56 497
Purchase of treasury stock (569) (590) --
Dividends paid (4,109) (3,697) (3,137)
----------------------------------
Net cash used in financing activities (4,298) (4,231) (2,640)
----------------------------------
Net (Decrease) Increase in Cash and Cash Equivalents (1,644) (2,036) 1,821
Cash and Cash Equivalents at Beginning of Year 17,611 19,647 17,826
----------------------------------
Cash and Cash Equivalents at End of Year $15,967 $17,611 $19,647
=========================================================================================
Supplemental Disclosures of Cash Flow
Information:
Cash paid during year for:
Income taxes $3,997 $4,080 $3,358
=========================================================================================
</TABLE>
See notes to consolidated financial statements.
<PAGE> 11
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
VERSA TECHNOLOGIES, INC.
YEARS ENDED MARCH 31, 1995, 1994 AND 1993
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION -- The consolidated financial statements include
the accounts of the Company and its wholly-owned subsidiaries. All
significant intercompany items and transactions have been eliminated in
consolidation.
CASH EQUIVALENTS -- The Company considers all temporary investments purchased
with maturities of three months or less to be cash equivalents.
INVENTORIES -- Inventories are stated at the lower of cost or market using the
last-in, first-out (LIFO) method.
PROPERTY, PLANT AND EQUIPMENT -- Property, plant and equipment are carried at
cost.
Depreciation is provided over the useful lives of plant and equipment using the
straight-line method for financial reporting purposes. Accelerated methods are
used for income tax purposes. Provision is made for deferred income tax
applicable to the difference in depreciation charges.
INTANGIBLES -- Intangibles include $797,000 relating to pre-1970 acquisitions
that are not being amortized. The balance is being amortized over 30 years.
Intangibles are stated net of accumulated amortization of $201,000 at March 31,
1995 and $169,000 at March 31, 1994.
PENSION PLANS -- Pension expense recorded under the plans includes normal cost
and amortization of past service cost in accordance with Financial Accounting
Standards Statement No. 87 "Employers' Accounting for Pensions".
REVENUE RECOGNITION -- The Company recognizes revenue on the accrual basis of
accounting, upon the shipment of products.
ACCOUNTING CHANGES -- During the quarter ended June 30, 1993 the Company
adopted Statement of Financial Accounting Standards No. 106 "Employers'
Accounting for Postretirement Benefits Other than Pensions" (See note 6) and
No. 109 "Accounting for Income Taxes" (See note 7).
2. INVENTORIES
Inventories at March 31 consisted of the following:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
(Dollars in Thousands) 1995 1994
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Raw Materials $ 5,053 $ 4,423
Work in Process 2,991 2,805
Finished Goods 1,587 1,203
----- -----
FIFO Inventories (approximates current cost) 9,631 8,431
LIFO Reserve (1,823) (1,687)
----- -----
LIFO Inventories $ 7,808 $ 6,744
===== =====
</TABLE>
3. CAPITAL STOCK
The Company's Board of Directors has the authority to determine the relative
rights and preferences of any series it may establish with respect to the
1,000,000, $.01 par value authorized preferred shares. No preferred stock is
issued or outstanding.
On December 13, 1988, the Board of Directors adopted a common stock shareholder
rights plan ("Rights") which entitles each shareholder of record on December
21, 1988 to purchase Series A Junior Participating Preferred Stock
("Preferred") upon the occurrence of certain events. The Rights will be
exercisable the twentieth business day after a person or group acquires 20% of
the Company's common stock, or makes an offer to acquire 30% or more of the
Company's common stock. When exercisable, each right entitles the holder to
purchase for $60 one one-hundredth of a share of Preferred for each share of
common stock owned. Each share of Preferred will be entitled to a minimum
preferential quarterly dividend of $5.00 per share, but not less than an
aggregate dividend of 100 times the common stock dividend. Each share will
have 100 votes, voting together with the common stock. In the event of any
merger each share of Preferred will be entitled to receive 100 times the amount
received per share of common stock. The Rights expire on December 21, 1998.
During February 1995, the Company adopted a program to repurchase up to 600,000
shares or 10% of its common stock. The shares will be held for issuance under
the Company's various stock plans. As of March 31, 1995, 42,500 shares had
been repurchased at a cost of $569,000.
4. STOCK OPTIONS
Under the Company's 1982 Incentive Stock Option Plan no further options will be
granted. However, options previously granted under this Plan will remain
outstanding until they are exercised or canceled.
Under the 1992 Versa Technologies, Inc. Employee Incentive Stock Option Plan,
options granted have an exercise price equal to 100% of the fair market value
at the date of grant. Options granted become exercisable in 25% annual
increments beginning one year from the date of grant and have a maximum term of
ten years.
<PAGE> 12
The Company grants non-qualified stock options to the Company's non-employee
directors and secretary. Options granted have an exercise price equal to 100%
of the fair market value at the date of grant. Options become exercisable in
annual increments of 25% and expire the earlier of ten years from the date of
grant (five years for grants made prior to fiscal 1995) or termination as an
officer or director of the Company.
A combined summary of changes in options is as follows:
<TABLE>
<CAPTION>
Shares
------------------------- Price Range
Incentive Non-Qualified Per Share
---------------------------------------------------
<S> <C> <C> <C>
Outstanding at March 31, 1994 217,294 25,500 $9.25 -$16.00
Issued 184,500 35,000 13.75 - 14.12
Exercised (14,550) (20,300) 9.25 - 12.88
Canceled (17,400) (100) 12.50 - 14.12
------- -------
Outstanding at March 31, 1995 369,844 40,100 9.25 - 16.00
======= =======
Options exercisable
at March 31, 1995 137,094 5,100
======= =======
Available for grant
after March 31, 1995 36,000
=======
</TABLE>
5. EMPLOYEE STOCK PURCHASE AND PAYROLL SAVINGS PLAN
Under the 1993 Employee Stock Purchase and Payroll Savings Plan, options for
23,540 shares of the Company's common stock were subscribed to in December 1993
at a price of $12.83 per share, which was 90% of the average of the high and
low prices of the common stock on May 17, 1993. Payroll savings equal to the
total option price will be accumulated over the period ending in December 1995.
Interest at an annual rate of 3%, compounded quarterly, is credited to each
participant's payroll savings account. Subject to certain restrictions, the
Plan permits a participant to exercise his option to the extent of accumulated
funds in his payroll savings account during January 1995 and January 1996, or
upon termination of employment. Payroll savings and interest not applied to
the purchase of shares by a participant will be paid in cash. A participant
may withdraw from the Plan at any time.
During fiscal 1995, 482 shares were purchased under the Plan.
As of March 31, 1995, options for 14,982 shares were outstanding to 116
participants in the Plan.
6. EMPLOYEE BENEFIT PLANS
The Company has four non-contributory, defined benefit pension plans covering
approximately 90% of all employees. Three of the plans cover hourly production
employees and provide benefits of stated amounts for specific periods of
service. The other plan covers all salaried, administrative and clerical
employees and provides benefits based on years of service and compensation.
The company makes actuarially determined contributions to a trust fund for
these plans which represents the maximum allowable for deduction in
determination of Federal taxable income.
Net pension costs for fiscals 1995, 1994, and 1993 for the defined benefit
plans consist of the following:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
(Dollars in Thousands) 1995 1994 1993
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service costs -- benefits earned during the period $ 482 $ 529 $ 555
Interest on projected benefit obligation 660 643 584
Return on plan assets (451) (394) (605)
Amortization and deferral of unrecognized amounts (279) (281) (10)
----- ----- -----
Net Pension Cost $ 412 $ 497 $ 524
===== ===== =====
</TABLE>
The defined benefit plans' funded status at March 31, 1995 and March 31, 1994
was as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
(Dollars in Thousands) 1995 1994
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation $6,832 $7,212
====== ======
Accumulated benefit obligation $7,143 $7,527
====== ======
Projected benefit obligation $8,718 $9,255
Plan assets at fair value 9,193 8,787
------ ------
Plan assets (more) less than projected benefits (475) 468
Unrecognized obligations (80) (83)
Unrecognized prior service cost (30) (72)
Unrecognized net gain 1,708 734
------ ------
Accrued pension cost 1,123 1,047
Minimum liability adjustments 81 157
------ ------
Pension liability $1,204 $1,204
====== ======
</TABLE>
<PAGE> 13
The projected benefit obligations assume 8.25% and 7.5% actuarial discount
rates respectively for the years ended March 31, 1995 and 1994 and (for the
compensation based plan) 5% average annual salary increases. The expected long
term rate of return on plan assets is 8%.
In place of participation in any of the above defined benefit pension plans for
tool makers employed at one of the Company's manufacturing facilities, the
Company makes cash contributions to a labor management (union) multi-employer
pension fund based on hours worked, in accordance with a negotiated labor
contract.
The Company also has an unfunded supplemental pension agreement with a key
executive officer. Actuarially computed provisions for this agreement were
$48,000, $67,000 and $44,000 in fiscal 1995, 1994 and 1993, respectively.
The Company adopted Statement of Financial Accounting Standard (SFAS) No. 106
"Employer Accounting for Postretirement Benefits Other Than Pensions,"
effective April 1, 1993. SFAS No. 106 requires the Company to recognize
postretirement benefits, including health and welfare benefits, on an accrual
basis. The Company provides pre-Medicare-eligibility health insurance and
minimal life insurance benefits to a limited group of retired employees who
attain specified age and years of service requirements. The Company elected to
recognize the cumulative effect of this obligation on the immediate recognition
method. The cumulative effect as of April 1, 1993 of adopting SFAS No. 106 was
an increase in accrued postretirement benefits of $406,000 and a decrease in
net earnings of $225,000 or $.04 per share, which was recorded during the first
quarter ended June 30, 1993.
The periodic expense for postretirement benefits for the years ended March 31,
1995 and 1994 included the following components:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
(Dollars in Thousands) 1995 1994
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Service cost for benefits earned during the year $ 19 $ 30
Interest cost on accumulated benefit obligation 17 32
Amortization of prior service cost (13) --
---- ----
Total expense $ 23 $ 62
==== ====
</TABLE>
The status of the Company's postretirement benefit plans at March 31, 1995 and
1994 was as follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
(Dollars in Thousands) 1995 1994
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees $ 35 $ 28
Fully eligible active plan participants 1 8
Other active plan participants 209 244
---- ----
245 280
Unrecognized prior service cost 195 192
Unrecognized net gain (loss) 32 (7)
---- ----
Total $472 $465
==== ====
</TABLE>
The discount rates used in determining the accumulated postretirement benefit
obligation were 8.25% and 7.5% at March 31, 1995 and 1994, respectively. The
annual health care cost trend rates used varied by plan, with highs of 12% in
1995 and 13% in 1994, gradually declining to 5.25% over an eight-year period.
The effect of increasing the health care cost trend rate by one percentage
point in each year would increase the accumulated postretirement benefit
obligation at March 31, 1995 by $31,000 and the periodic postretirement benefit
expense for the year by $5,000.
7. INCOME TAXES
The Company adopted Statement of Financial Accounting Standard (SFAS) No. 109
"Accounting for Income Taxes," effective April 1, 1993. SFAS No. 109 requires
the use of the liability method of accounting for deferred income taxes. The
cumulative effect as of April 1, 1993 of adopting SFAS No. 109 was to increase
net earnings by $364,000 or $.06 per share, which was recorded during the
first quarter ended June 30, 1993.
<PAGE> 14
Income tax expense is made up of the following components:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
(Dollars in Thousands) 1995 1994 1993
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Current:
Federal $ 3,364 $ 3,313 $ 2,749
State 720 796 504
------- ------- -------
4,084 4,109 3,253
------- ------- -------
Deferred:
Federal (104) (422) (138)
State (15) (107) (25)
------- ------- -------
(119) (529) (163)
------- ------- -------
$ 3,965 $ 3,580 $ 3,090
======= ======= =======
</TABLE>
Deferred income taxes reflect the net tax effect of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components
of the Company's net deferred tax asset as of March 31, 1995 and 1994 were as
follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
(Dollars in Thousands) 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Deferred tax assets:
Vacation pay reserve $ 255 $ 234
Pension accrual 660 634
Inventory related 230 227
Postretirement benefits 177 172
Health insurance reserve 174 137
Other 452 268
------ ------
1,948 1,672
------ ------
Deferred tax liabilities:
Tax over book depreciation 1,510 1,347
Other 36 42
------ ------
1,546 1,389
------ ------
Net deferred tax asset $ 402 $ 283
====== ======
</TABLE>
Total income tax expense differs from the amounts computed by applying the
Federal income tax rate to earnings before income taxes for the following
reasons:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
1995 1994 1993
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Statutory Federal rate 34.0% 34.0% 34.0%
State income taxes, net of
Federal income tax benefit 4.3 4.7 3.7
Foreign Sales Corporation
(FSC) earnings (0.3) (0.4) (0.4)
Federal tax-exempt bond interest (1.7) (1.7) (1.7)
Other 0.5 0.8 0.7
---- ---- ----
36.8% 37.4% 36.3%
==== ==== ====
</TABLE>
8. ACCRUED EXPENSES
Accrued expenses consisted of the following:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
(Dollars in Thousands) 1995 1994
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Wages & Commissions $ 797 $ 554
Vacations 768 770
Taxes, other than income taxes 294 283
Employee benefits 715 665
Other accruals 827 484
------ ------
Totals $3,401 $2,756
====== ======
</TABLE>
9. EARNINGS PER SHARE CALCULATION
Weighted average shares outstanding exclude common stock equivalents because
their dilutive effect is not significant.
<PAGE> 15
10. INDUSTRY SEGMENT INFORMATION
The Company is composed of three operating segments. The Custom Components
Group manufactures and sells molded and extruded silicone rubber components and
plastic and thermoplastic components, primarily to the industrial market.
Medical manufactures and sells molded and extruded silicone rubber components
to the medical device, food processing and drug industries. The Fluid Power
Group manufactures and sells fluid power components primarily to other
manufacturers and fluid power leveling devices for use primarily by the
transportation industry.
Selected segment information is as follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
(Dollars in Thousands) 1995 1994 1993
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Sales:
Custom components $27,136 $27,457 $24,098
Medical 11,928 10,369 10,830
Fluid power 29,055 24,849 19,272
Intersegment* (1,154) (838) (1,352)
------- ------- -------
Sales to unaffiliated customers $66,965 $61,837 $52,848
======= ======= =======
Operating Income:
Custom components $2,390 $2,862 $2,688
Medical 2,585 2,004 2,800
Fluid power 5,874 4,658 2,992
Unallocated Corp. expenses & consolidating adj. -- net (857) (698) (760)
------- ------- -------
Total operating income 9,992 8,826 7,720
Other income -- net 779 750 787
------- ------- -------
Income before income taxes $10,771 $9,576 $8,507
======= ======= =======
Identifiable Assets:
Custom components $19,735 $17,985 $14,338
Medical 6,028 5,904 4,851
Fluid power 11,651 10,311 9,168
Corporate 19,366 19,369 21,382
------- ------- -------
$56,780 $53,569 $49,739
======= ======= =======
Depreciation & Amortization:
Custom components $1,629 $1,532 $1,411
Medical 641 616 548
Fluid power 550 565 552
Corporate 136 129 133
------- ------- -------
$2,956 $2,842 $2,644
======= ======= =======
Capital Expenditures:
Custom components $3,881 $3,483 $1,728
Medical 710 1,365 713
Fluid power 1,113 496 196
Corporate 366 165 104
------- ------- -------
$6,070 $5,509 $2,741
======= ======= =======
</TABLE>
* Intersegment sales originate primarily from the Fluid Power segment and
are priced on a negotiated basis not in excess of competitive market
value.
Corporate assets consist primarily of cash and cash equivalents, and
headquarters property and equipment.
The Company has no foreign operations and export sales were not significant.
<PAGE> 16
RESPONSIBILITY FOR FINANCIAL STATEMENTS
The Company is responsible for the objectivity of the accompanying consolidated
financial statements, which have been prepared in conformity with generally
accepted accounting principles. The financial statements of necessity include
the Company's estimates and judgements relating to matters not concluded by
year-end. Financial information contained elsewhere in the Annual Report is
consistent with that included in the financial statements.
The Company maintains a system of internal accounting controls that includes
careful selection and development of employees, division of duties and
established accounting and operating policies and procedures. Although there
are inherent limitations to the effectiveness of any system of accounting
controls, the Company believes that its system provides reasonable, but not
absolute, assurance that its assets are safeguarded from unauthorized use for
disposition and that its accounting records are sufficiently reliable to permit
the preparation of financial statements that conform in all material respects
with generally accepted accounting principles. Deloitte & Touche LLP,
independent auditors, are engaged to render an independent opinion regarding
the fair presentation in the financial statements of the Company's financial
condition and operating results. Their report appears below. Their
examination was made in accordance with generally accepted auditing standards
and included a review of the system of internal accounting controls to the
extent they considered necessary to determine the audit procedures required to
support their opinion.
The Audit Committee of the Board of Directors is composed solely of directors
who are not employees of the Company. The Committee meets periodically and
privately with the independent auditors, and with the chief financial officer
of the Company to review matters relating to the quality of the financial
reporting of the Company, the internal accounting controls and the scope and
results of audit examinations. The Committee also reviews compliance with the
Company's statement of policy as to the conduct of its business, including
proper accounting and dealing with auditors. In addition, it is responsible
for recommending the appointment of the Company's independent auditors, subject
to shareholder ratification.
INDEPENDENT AUDITORS' REPORT
BOARD OF DIRECTORS AND SHAREHOLDERS
VERSA TECHNOLOGIES, INC.
RACINE, WISCONSIN
We have audited the consolidated balance sheets of Versa Technologies, Inc. and
subsidiaries as of March 31, 1995 and 1994 and the related consolidated
statements of earnings, shareholders' equity and cash flows for each of the
three years in the period ended March 31, 1995. 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 consolidated financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall consolidated financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Versa Technologies, Inc. and
subsidiaries as of March 31, 1995 and the results of their operations and their
cash flows for each of the three years in the period ended March 31, 1995, in
conformity with generally accepted accounting principles.
As discussed in Notes 1, 6 and 7 to the consolidated financial statements, the
Company changed its methods of accounting for postretirement benefits other
than pensions and accounting for income taxes effective April 1, 1993, to
conform with Statement of Financial Accounting Standards No. 106 and No. 109,
respectively.
DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
May 16, 1995
<PAGE> 17
QUARTERLY FINANCIAL DATA (UNAUDITED)
VERSA TECHNOLOGIES, INC.
<TABLE>
<CAPTION>
Net Earnings
Quarterly Results Net Sales Gross Profit Earnings Per Share
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fiscal Year Ended March 31, 1995
First Quarter $16,783 $5,298 $1,557 $0.26
Second Quarter 16,481 5,440 1,739 $0.29
Third Quarter 16,154 5,153 1,582 $0.26
Fourth Quarter 17,547 5,894 1,928 $0.32
- ----------------------------------------------------------------------------------------------
$66,965 $21,785 $6,806 $1.13
==============================================================================================
Fiscal Year Ended March 31, 1994
First Quarter $14,614 $4,583 $1,330 $0.22
Second Quarter 16,025 5,097 1,645 $0.27
Third Quarter 15,051 4,761 1,332 $0.22
Fourth Quarter 16,147 5,323 1,798 $0.30
- ----------------------------------------------------------------------------------------------
$61,837 $19,764 $6,105 $1.01
==============================================================================================
</TABLE>
PER SHARE COMMON STOCK DATA
<TABLE>
<CAPTION>
Year Ended March 31, 1995 Year Ended March 31, 1994
Market Price (a) Dividends Market Price (a) Dividends
------------------------- -------------------------
Fiscal
Quarter High Low Close High Low Close
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1st 15-1/4 12-1/4 12-3/8 .08 14-1/4 13-1/4 14 .07
2nd 15 12-1/4 14-5/8 .42(c) 16 13-1/4 14-3/4 .38(b)
3rd 15 12-3/4 13-3/4 .09 15-3/4 13-3/4 13-3/4 .08
4th 15-1/4 11-1/2 13-3/4 .09 15 13-3/4 15 .08
</TABLE>
(a) NASD's reporting of Versa Technologies Common Stock on their National Market
System (NASDAQ/NMS). Prices represent the daily closing price and do not
include retail markup, markdown or commission.
(b) Includes special cash dividend of $.30 per share.
(c) Includes special cash dividend of $.33 per share.
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF VERSA TECHNOLOGIES, INC.
MARCH 31, 1995
Moxness Products, Inc. Wisconsin 100%
Moxness Thermoplastics, Inc. Michigan 100%
Versa Medical Technologies, Inc. Wisconsin 100%
Mox-Med, Inc. Wisconsin 100%
Versa/Tek Export Company, Inc. U.S. Virgin Islands 100%
<PAGE> 1
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statements No.
33-49024, 33-71476 and 33-86446 and File No. 2-87421 of Versa Technologies,
Inc. and subsidiaries on Form S-8 of our reports dated May 16, 1995, appearing
in and incorporated by reference in the Annual Report on Form 10-K of Versa
Technologies, Inc. for the year ended March 31, 1995.
Deloitte & Touche LLP
Milwaukee, Wisconsin
June 12, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-START> APR-01-1994
<PERIOD-END> MAR-31-1995
<EXCHANGE-RATE> 1
<CASH> 15,967
<SECURITIES> 0
<RECEIVABLES> 9,566
<ALLOWANCES> 162
<INVENTORY> 7,808
<CURRENT-ASSETS> 34,912
<PP&E> 43,176
<DEPRECIATION> 23,231
<TOTAL-ASSETS> 56,780
<CURRENT-LIABILITIES> 5,765
<BONDS> 0
<COMMON> 61
0
0
<OTHER-SE> 48,707
<TOTAL-LIABILITY-AND-EQUITY> 56,780
<SALES> 66,965
<TOTAL-REVENUES> 66,965
<CGS> 45,180
<TOTAL-COSTS> 45,180
<OTHER-EXPENSES> 11,793
<LOSS-PROVISION> 52
<INTEREST-EXPENSE> 9
<INCOME-PRETAX> 10,771
<INCOME-TAX> 3,965
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,806
<EPS-PRIMARY> 1.13
<EPS-DILUTED> 1.13
</TABLE>
