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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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, 1996
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
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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>
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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
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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 May 31, 1996, was $72,209,214.
Indicate the number of shares outstanding of each of the issuer's classes
of Common Stock as of May 31, 1996: 5,620,298 shares of Common Stock, $.01 par
value.
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of Versa Technologies, Inc. 1996 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 17, 1996 (Parts I and III of Form 10-K)
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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 for special sectors of the industrial equipment, automotive,
specialty electronics, and consumer products markets. Medical manufactures and
markets silicone rubber components for the medical device and consumer products
markets. The Fluid Power Group manufactures and markets standard and specially
designed hydraulic and pneumatic cylinders for a wide variety of applications,
and hydraulically- and electrically-powered proprietary systems for the
transportation, construction and recreational vehicle 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, 1996, are set forth in Note 11 of the Notes to Consolidated
Financial Statements on page 21 and 22 of the Company's 1996 Annual Report to
Stockholders, which note is incorporated herein by reference.
(c) Narrative Description of Business
CUSTOM COMPONENTS GROUP
Moxness Products, Inc. (Moxness) is a value-added manufacturer of custom
molded and extruded silicone rubber components for special sectors of the
industrial equipment, business and computer equipment, specialty electronics,
automotive and commercial appliance markets. Moxness has been a custom
fabricator of silicone rubber components since 1952. Key to the company's
success has been the sophistication of its manufacturing and quality control
facilities, its in-house tooling and compounding capabilities, and the expertise
of its engineering staff who assist customers in product design and selection of
appropriate materials. To further enhance its capabilities, Moxness has invested
heavily in state-of-the-art manufacturing, research and testing equipment and
added engineering talent with the expertise needed to support sales into more
technically demanding applications. The company recently installed a class
100,000 industrial clean room at its East Troy, Wisconsin plant to allow for the
manufacture of parts with higher cleanliness standards.
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 unique physical properties, it is
suitable for many applications because it can be bonded 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 Products, Inc. fabricates custom-engineered silicone rubber
products for the automotive, electrical, commercial appliance, general
industrial and business equipment markets. Automotive applications include
grommets and gaskets used to seal under-the-hood electrical connections, as well
as keypads for keyless entry systems and remote control transmitters. Other
applications include door seals for commercial
2
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ovens and autoclave sterilizers, molded and extruded seals for storage systems
on large computers, tapes and extruded wire cables for electrical applications,
and silicone coated rollers for laminating equipment and laser printers.
Through its two plastics companies, Moxness Thermoplastics, Inc. and
Lovdahl Manufacturing, the Custom Components Group manufactures products from
phenolics, thermoplastic elastomers, and other thermoset materials for a variety
of industrial and consumer applications. Lovdahl Manufacturing molds parts for
small engines, power tools, housewares, and electrical applications. Moxness
Thermoplastics molds parts for automotive applications and consumer-related
products.
MARKETING
Moxness' markets its capabilities nationwide. Approximately 75% of sales
are by internal sales personnel. The balance of sales are through six
independent manufacturers' representatives.
Moxness' strategy is to focus its sales and engineering efforts on those
market niches that demand a higher level of product quality and 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 components, and indirectly
with manufacturers of parts from other elastomers. The major portion of
production from silicone rubber and all production from plastics are
manufactured for specific customers. The Group competes by providing exceptional
quality and 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 unique properties are either
essential or afford a significant advantage over less expensive elastomers.
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.
There was one significant customer which accounted for 11% of this group's
fiscal 1996 sales. There were no customers during fiscal 1995 or 1994 which
exceeded 10% of sales.
ORDER BACKLOG
As of March 31, 1996, the order backlog for the Custom Components Group was
$7,787,000 compared to $8,540,000 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 two silicone businesses, Moxness Products, Inc., headquartered
in Racine, WI, and Mox-Med, Inc. in Portage, Wisconsin to more efficiently use
the talents within these business units. Human resources, finance, purchasing,
manufacturing planning, and engineering development have been combined to serve
both units. However, specialization in field sales, customer service, marketing
and applications engineering have been retained to ensure that the unique needs
of the Company's medical and industrial customers are met.
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One of the most significant areas for the application of silicone rubber is
the medical device market. Manufacturers 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 extrudes silicone tubing for a wide range of applications,
including drug delivery systems, peristaltic pumps, surgical and wound drains,
intravenous and enteral feeding lines, dialysis tubes, catheters, and blood
sampling lines. The company produces tubing in an unlimited number of sizes and
configurations. Diameters range from 0.01" to several inches. Other silicone
extrusions include vessel loops and surgical paws used to identify and clamp off
blood vessels during surgery, and tapes used in the manufacture of check valves
for a variety of applications. Molded silicone parts include diaphragms which
provide precise metering or regulation of fluid and air flow in intravenous
pumps, dialysis machines and respirators, duck bills and check valves used to
control fluid or gas in intravenous lines and anesthetic equipment, and silicone
infusion sleeves and test chambers are used in cataract surgery.
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 and marketing personnel.
CUSTOMERS
Customers are primarily manufacturers of medical devices. There were two
significant customers for Medical's products in fiscal 1996. As a percent of
total Medical sales the two customers individually accounted for 19% and 10%.
During fiscal 1995 there were three customers who individually accounted for
11%, 10% and 10% of sales. There were no customers during fiscal 1994 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
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, 1996, the order backlog was $4,569,000 compared to
$4,686,000 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.
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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 re-negotiation
represent an immaterial portion of the business of the Custom Components Group,
and none of Medical's business.
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- and
electrically-powered proprietary 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. Milwaukee Cylinder'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 of up to 5,000 pounds per square inch. The company stocks
cylinder parts within its standard range of variables allowing for 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 service and the quality of its
products.
POWER GEAR(TM)
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, Power Gear's expertise in hydraulic systems has since been applied
to a broad 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-the-road 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 these systems to two of the country's
largest manufacturers of upscale motorhomes.
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During fiscal 1996, Power Gear introduced its new product line,
"slide-outs," for the RV industry. These electrically-powered systems act as the
drive mechanism for slide-out rooms on trailers and motor homes. Manufacturers
are offering trailers and motor homes with 8' to 16' long rooms that can
automatically telescope outward, expanding the room an additional 3 feet when
the vehicle is parked. This feature has become extremely popular, with
manufacturers now offering more than one slide-out on an individual trailer or
motor home.
MARKETING
Milwaukee Cylinder's fluid power components, which represent approximately
45% 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 the company's 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.
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
sales to its diverse customer base remains strong. The company has many
long-term relationships with customers built on its reputation for engineering
expertise, product quality and ability to respond quickly.
The Company is not aware of any other manufacturers of hydraulically
operated Power Gear systems for the transportation industry. There are several
competitors for Power Gear's slide-out systems for the recreational vehicle
market.
CUSTOMERS
There was one significant customer for the Group's fluid power products in
fiscal 1996, 1995, and 1994. As a percent of total Group sales, one customer
accounted for 26% in fiscal 1996, 22% in fiscal 1995, and 17% in fiscal 1994.
ORDER BACKLOG
As of March 31, 1996, the order backlog for the Fluid Power Group was
$4,392,000 compared to $2,548,000 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.
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THE BUSINESS IN GENERAL
The Company does maintain a corporate research and development department
specifically related to one product line. The total amount spent during fiscal
1996 was not material. At the business units, research and development
expenditures are a function of the respective engineering departments and are
specific to customer projects. Costs associated with these projects are combined
with the overall engineering department 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
There was one customer which accounted for more than 10% of consolidated
revenues during fiscal 1996. This customer's percentage of consolidated revenues
during fiscal 1996, 1995 and 1994 were 14%, 9.6% and 7.2% respectively.
EMPLOYEES
As of March 31, 1996, the Company had 552 active full-time employees.
EXECUTIVE OFFICERS OF THE REGISTRANT
At March 31, 1996, 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 73
of Directors of the Company
Thomas J. Magulski............ President & Chief Operating Officer of the 1993 52
Company and
Robert M. Sukalich............ Vice President Finance Treasurer & Assistant 1992 37
Secretary of the Company
David J. McKendrey............ President and Chief Operating Officer of 1982 58
Milwaukee Cylinder, the Company's Fluid Power
Group
</TABLE>
All officers are elected annually by the Board of Directors at the first
Board meeting following each annual meeting of the stockholders. 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.
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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, 1996:
<TABLE>
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SQUARE
FEET OF
LOCATION FLOOR SPACE DESCRIPTION AND PRINCIPAL USE
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<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)........ 32,300 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.
Sturtevant, WI(1)........ 6,000 One story brick office building located on
approximately three acres of land. Corporate
headquarters.
Sturtevant, WI(1)........ 6,650 Two story block building located on approximately three
acres of land. Silicone research and development center
and Information services.
</TABLE>
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(1) The Company owns these facilities. There are no debts secured by these
properties.
(2) Leased facility. Lease expires in March 1997.
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
1996 Annual Report to Shareholders, as follows:
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<CAPTION>
ITEM CAPTION INFORMATION INCORPORATED BY REFERENCE TO:
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<C> <S> <C>
5. MARKET FOR THE COMPANY'S COMMON STOCK AND Annual Report, page 31
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 1996 Annual Meeting of
Shareholders as follows:
<TABLE>
<CAPTION>
ITEM CAPTION INFORMATION INCORPORATED BY REFERENCE TO:
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<C> <S> <C>
10. DIRECTORS AND EXECUTIVE OFFICERS OF THE Proxy Statement, pages 2 through 4; and
REGISTRANT Form 10-K Item 1(c) Part I, pages 10 and
11
11. EXECUTIVE COMPENSATION Proxy Statement, pages 6 through 9
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 1996 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 1996 Annual Report to Shareholders, incorporated herein by
reference.
2) Financial Statement Schedules--
Schedule VIII Valuation and Qualifying Accounts
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Independent Auditors' Report on Financial Statement Schedules
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).
10.15 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 1996 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>
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the quarter ended March 31,
1996.
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VERSA TECHNOLOGIES, INC. AND SUBSIDIARIES
SCHEDULE VIII--VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED MARCH 31, 1996, 1995 AND 1994
<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, 1996......................... $ 161,881 $ 91,901 $ 47,282 $ 206,501
March 31, 1995......................... 189,000 51,529 78,648 161,881
March 31, 1994......................... 116,000 107,221 34,221 189,000
Deducted from inventories account in the
balance sheets--
Reserve for obsolete inventory
March 31, 1996......................... $ 148,000 $ 36,000 $184,000 $ -0-
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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Deloitte & Touche logo ----------------------------------------
411 East Wisconsin Avenue Telephone:
(414) 271-3000
Milwaukee, Wisconsin 53202-4496
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, 1996 and 1995, and for each
of the three years in the period ended March 31, 1996, and have issued our
report thereon dated May 17, 1996 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 1996 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 signature
May 17, 1996
Deloitte Touche Tohmatsu International logo
12
<PAGE> 13
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 17, 1996
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 17, 1996
/s/ HERMAN B. MCMANAWAY
- ---------------------------------------------------
Herman B. McManaway, Director
June 17, 1996
/s/ WILLIAM P. KILLIAN
- ---------------------------------------------------
William P. Killian, Director
June 17, 1996
/s/ JOAN R. LLOYD
- ---------------------------------------------------
Joan R. Lloyd, Director
June 17, 1996
/s/ MORRIS W. REID
- ---------------------------------------------------
Morris W. Reid, Director
June 17, 1996
/s/ JAMES E. MOHRHAUSER
- ---------------------------------------------------
James E. Mohrhauser, Director
June 17, 1996
/s/ THOMAS J. MAGULSKI
- ---------------------------------------------------
Thomas J. Magulski, Director
June 17, 1996
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 (b)
of Versa Technologies, Inc.,
as amended
3.2 By-Laws of Versa Technologies, Inc. (c)
10.2 1982 Employee Incentive Stock (b)
Option Plan, as amended
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 (e)
Payroll Savings Plan
10.12 Deferred Compensation Plan for Executives (e)
10.13 Employment Agreement with (e)
Mr. James E. Mohrhauser
10.15 Versa Technologies, Inc. Stock Purchase and (f)
Dividend Reinvestment Plan
13 Pages from the 1996 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>
(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.
<PAGE> 15
(c) Incorporated by reference to Registrant's From 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.
<PAGE> 1
CONSOLIDATED STATEMENTS OF EARNINGS
Versa Technologies, Inc.
<TABLE>
<CAPTION>
(Amounts in Thousands, except per share amounts)
- ---------------------------------------------------------------------------------------------------
Years Ended March 31 1996 1995 1994
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Sales $70,699 $66,965 $61,837
Cost of Sales 51,190 45,180 42,073
------- ------- -------
Gross Profit 19,509 21,785 19,764
Selling and Administrative Expenses 11,300 11,793 10,938
------- ------- -------
Operating Income 8,209 9,992 8,826
------- ------- -------
Other Income (Deductions):
Interest expense (35) (9) (3)
Interest income 848 753 683
Miscellaneous, net 117 35 70
------- ------- -------
930 779 750
------- ------- -------
Earnings Before Income Taxes and Cumulative
Effect of Accounting Changes 9,139 10,771 9,576
Income Taxes 3,240 3,965 3,580
------- ------- -------
Earnings Before Cumulative Effect of Accounting Changes $ 5,899 $ 6,806 $ 5,996
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 $ 5,899 $ 6,806 $ 6,105
======= ======= =======
Earnings per share before cumulative effect of
accounting changes $ 0.99 $ 1.13 $ 0.99
Cumulative effect per share of accounting changes:
Postretirement benefits other than pensions -- -- (0.04)
Income taxes -- -- 0.06
------- ------- -------
Net earnings per weighted average common shares
outstanding $ 0.99 $ 1.13 $ 1.01
======= ======= =======
Weighted average common shares outstanding 5,970 6,039 6,056
</TABLE>
See notes to consolidated financial statements.
<PAGE> 2
CONSOLIDATED BALANCE SHEETS
Versa Technologies, Inc.
<TABLE>
<CAPTION>
(Amounts in Thousands, except share and per share amounts)
- ------------------------------------------------------------------------------------------------------------
March 31 1996 1995
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $14,746 $15,967
Receivables, less allowance of $207 in 1996, and
$162 in 1995 11,410 9,404
Inventories 7,743 7,808
Other current assets 1,183 1,733
------- -------
Total current assets 35,082 34,912
------- -------
Property, Plant, and Equipment - at cost:
Land 591 591
Buildings 9,196 8,639
Machinery and equipment 36,286 33,946
------- -------
46,073 43,176
Less accumulated depreciation 25,556 23,231
------- -------
20,517 19,945
Intangibles 1,530 1,562
Other Non-Current Assets 309 361
------- -------
$57,438 $56,780
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 3,691 $ 1,750
Accrued expenses 3,391 3,401
Income taxes 87 495
Employee stock savings plan and payroll savings plan 119
------- -------
Total current liabilities 7,169 5,765
------- -------
Deferred Income Taxes 820 485
Deferred Pension, Deferred Compensation and
Postretirement Benefit Expense 2,465 2,462
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 1996 and 1995 61 61
Additional paid-in capital 18,681 18,710
Retained earnings 31,471 29,997
------- -------
50,213 48,768
Less treasury stock, at cost - 234,036 shares in 1996 and 51,378 in 1995 3,229 700
------- -------
Total shareholders' equity 46,984 48,068
------- -------
$57,438 $56,780
======= =======
</TABLE>
See notes to consolidated financial statements.
<PAGE> 3
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Versa Technologies, Inc.
<TABLE>
<CAPTION>
(Amounts in Thousands, except share and per share amounts)
- ---------------------------------------------------------------------------------------------------------------------------------
Additional Total
Years Ended March 31, 1996, 1995, and 1994 Common Stock paid in Retained Treasury Shareholders'
Shares Amount capital earnings stock Equity
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at March 31, 1993 6,059 $ 61 $ 18,733 $ 24,892 $ $ 43,686
$43
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)
Exercise of stock options - 34,542 treasury shares
were reissued -- -- (52) -- 472 420
Tax benefit from exercise of stock options -- -- 2 -- -- 23
Purchase of treasury stock -- 217,200 shares -- -- -- -- (3,001) (3,001)
Net earnings -- -- -- 5,899 -- 5,899
Cash dividends declared -- $.74 per share*** -- -- -- (4,425) -- (4,425)
------- ------- --------- --------- -------- ---------
Balance at March 31, 1996 6,063 $ 61 $ 18,681 $ 31,471 $ (3,229) $ 46,984
======= ======= ========= ========= ======== =========
</TABLE>
* Includes special cash dividend of $.30 per share.
** Includes special cash dividend of $.33 per share.
*** Includes special cash dividend of $.35 per share.
See notes to consolidated financial statements.
<PAGE> 4
CONSOLIDATED STATEMENTS OF CASHFLOWS
Versa Technologies, Inc.
<TABLE>
<CAPTION>
(Amounts in Thousands)
- ------------------------------------------------------------------------------------------------------
Years Ended March 31 1996 1995 1994
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net earnings $ 5,899 $ 6,806 $ 6,105
Adjustments to reconcile to net cash
provided by operating activities:
Cumulative effect of accounting changes -- -- (109)
Depreciation and amortization 3,234 2,956 2,842
Provision for losses on receivables 45 52 107
(Gain)loss on disposition of plant and equipment (18) 15 (12)
Increase in receivables (2,051) (221) (1,403)
Decrease(increase) in inventories 65 (1,064) (1,097)
Decrease(increase) in other current assets 550 (576) (69)
Increase(decrease) in accounts payable 1,941 (483) 671
(Decrease)increase in accrued expenses (10) 645 690
(Decrease)increase in income taxes payable (408) 59 26
(Decrease)increase in employee stock purchase
and payroll savings plan (119) 83 36
Increase in deferred pension, postretirement
benefits and compensation expense 3 369 275
Increase(decrease) in deferred income taxes 335 30 (529)
------- ------- -------
Net cash provided by operating activities 9,466 8,671 7,533
------- ------- -------
Cash Flows from Investing Activities:
Proceeds from disposition of plant and equipment 80 37 157
Capital expenditures (3,836) (6,070) (5,509)
Other 52 16 14
------- ------- -------
Net cash used in investing activities (3,704) (6,017) (5,338)
------- ------- -------
Cash Flows from Financing Activities:
Proceeds from exercise of common stock options 443 380 56
Purchase of treasury stock (3,001) (569) (590)
Dividends paid (4,425) (4,109) (3,697)
------- ------- -------
Net cash used in financing activities (6,983) (4,298) (4,231)
------- ------- -------
Net Decrease in Cash and Cash Equivalents (1,221) (1,644) (2,036)
Cash and Cash Equivalents at Beginning of Year 15,967 17,611 19,647
------- ------- -------
Cash and Cash Equivalents at End of Year $14,746 $15,967 $17,611
======= ======= =======
Supplemental Disclosures of Cash Flow
Information:
Cash paid during year for income taxes $ 3,244 $ 3,997 $ 4,080
</TABLE>
See notes to consolidated financial statements.
<PAGE> 5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Versa Technologies, Inc.
Years ended March 31, 1996, 1995 and 1994
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.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Cash Equivalents -- The Company considers all temporary investments purchased
with maturities of three months or less to be cash equivalents.
Fair Value of Financial Instruments -- The Company believes the carrying amount
of its financial instruments (cash and cash equivalents, accounts receivable
and accounts payable) is a reasonable estimate of the fair value of these
instruments.
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 $233,000 at March 31,
1996 and $201,000 at March 31, 1995.
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 Pronouncements -- Statement of Financial Accounting Standards (FAS)
No. 121, "Accounting for the Impairment of Long-lived Assets and for Long-lived
Assets to be Disposed of" and FAS No. 123, "Accounting for Stock-based
Compensation" were issued in 1995. The statements are not expected to have a
material impact on the Company. The Company intends to continue to account for
stock-based compensation under Accounting Principles Board Opinion No. 25 as
allowed by FAS No. 123.
Accounting Changes -- During the quarter ended June 30, 1993 the Company
adopted FAS No. 106 "Employers' Accounting for Postretirement Benefits Other
than Pensions" (See note 6) and No. 109 "Accounting for Income Taxes" (See note
7).
<PAGE> 6
2. INVENTORIES
Inventories at March 31 consisted of the following:
(Amounts in Thousands) 1996 1995
- --------------------- ----- -----
Raw Materials $ 5,348 $ 5,053
Work in Process 2,965 2,991
Finished Goods 1,399 1,587
------- -------
FIFO Inventories (approximates current cost) 9,712 9,631
LIFO Reserve (1,969) (1,823)
------- -------
LIFO Inventories $ 7,743 $ 7,808
======= =======
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 shares of $.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. On May 17, 1996, the Company expanded the
program by 300,000 shares. The shares will be held for issuance under the
Company's various stock plans. As of March 31, 1996, 259,700 shares had been
repurchased at a cost of $3,570,000.
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.
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.
<PAGE> 7
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, 1995 369,844 40,100 $9.25 - $16.00
Issued 17,500 -0- 13.50 - 14.00
Exercised (23,450) -0- 9.25 - 12.88
Canceled (48,000) (5,000) 12.88 - 14.12
-------- -------
Outstanding at March 31, 1996 315,894 35,100 9.25 - 16.00
======== =======
Options exercisable
at March 31, 1996 153,889 12,600
======== =======
Available for grant
after March 31, 1996 66,500
========
</TABLE>
5. EMPLOYEE STOCK PURCHASE AND PAYROLL SAVINGS PLAN
Under the 1993 Employee Stock Purchase and Payroll Savings Plan, 11,092 shares
of the Company's common stock at $12.83 per share were issued to employees in
the fiscal year ended March 31, 1996. The Plan terminated in January 1996.
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 1996, 1995, and 1994 for the defined benefit
plans consist of the following:
<TABLE>
<CAPTION>
(Amounts in Thousands) 1996 1995 1994
- ---------------------- ------ ----- -----
<C> <C> <C> <C>
Service costs - benefits earned during the period $ 414 $ 482 $ 529
Interest on projected benefit obligation 710 660 643
Return on plan assets (1,491) (451) (394)
Amortization and deferral of unrecognized amounts 685 (279) (281)
------ ----- -----
Net Pension Cost $ 318 $ 412 $ 497
====== ===== =====
</TABLE>
<PAGE> 8
The defined benefit plans' funded status at March 31, 1996 and March 31, 1995
was as follows:
<TABLE>
<CAPTION>
(Amounts in Thousands) 1996 1995
- ---------------------- ------- ------
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation $ 7,312 $6,832
======= ======
Accumulated benefit obligation $ 8,450 $7,143
======= ======
Projected benefit obligation $10,279 $8,718
Plan assets at fair value 10,592 9,193
------- ------
Plan assets more than projected benefits (312) (475)
Unrecognized obligations 1,459 (80)
Unrecognized prior service cost (27) (30)
Unrecognized net gain (78) 1,708
------- ------
Accrued pension cost 1,041 1,123
Minimum liability adjustments -- 81
------- ------
Pension liability $ 1,042 $1,204
======= ======
</TABLE>
The projected benefit obligations assume 7.75% and 8.25% actuarial discount
rates respectively for the years ended March 31, 1996 and 1995 and (for the
compensation based plan) 5% average annual salary increases. The expected long
term rate of return on plan assets was 8.5% and 8% respectively at March 31,
1996 and 1995.
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, $48,000 and $67,000 in fiscal 1996, 1995 and 1994, respectively.
The Company adopted Statement of Financial Accounting Standard (FAS) No. 106
"Employer Accounting for Postretirement Benefits Other Than Pensions,"
effective April 1, 1993. FAS No. 106 requires the Company to recognize
postretirement benefits, including health and welfare benefits, on an accrual
basis. 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 Company provides limited pre-Medicare-eligibility health insurance and
minimal life insurance benefits to a small group of retired employees who
attain specified age and years of service requirements. The periodic expense
for postretirement benefits was $27,000 and $23,000 for the years ended March
31, 1996 and 1995, respectively. The Company's policy is to fully accrued for
its postretirement benefits, this accrual was $499,000 and $472,000 at March
31, 1996 and 1995, respectively.
<PAGE> 9
7. INCOME TAXES
The Company adopted Statement of Financial Accounting Standard (FAS) No. 109
"Accounting for Income Taxes," effective April 1, 1993. FAS 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 FAS 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.
Income tax expense is made up of the following components:
<TABLE>
<CAPTION>
(Amounts in Thousands) 1996 1995 1994
- ---------------------- ------- ------ ------
<C> <C> <C> <C>
Current:
Federal $2,234 $3,364 $3,313
State 604 720 796
------- ------ ------
2,838 4,084 4,109
------- ------ ------
Deferred:
Federal 322 (104) (422)
State 80 (15) (107)
------- ------ ------
402 (119) (529)
------- ------ ------
$3,240 $3,965 $3,580
======= ====== ======
</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, 1996 and 1995 were as
follows:
<TABLE>
<S> <C> <C>
(Amounts in Thousands) 1996 1995
Deferred tax assets:
Vacation pay reserve $ 250 $ 255
Pension accrual 610 660
Inventory related 217 230
Postretirement benefits 185 177
Health insurance reserve 161 174
Other 475 452
------ -----
1,898 1,948
------ -----
Deferred tax liabilities:
Tax over book depreciation 1,848 1,510
Other 50 36
------ -----
1,898 1,546
------ -----
Net deferred tax asset $ -0- $ 402
====== =====
</TABLE>
<PAGE> 10
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>
1996 1995 1994
----- ----- -----
<S> <C> <C> <C>
Statutory Federal rate 34.0% 34.0% 34.0%
State income taxes, net of
Federal income tax benefit 4.9 4.3 4.7
Foreign Sales Corporation
(FSC) earnings (0.3) (0.3) (0.4)
Federal tax-exempt bond interest (2.2) (1.7) (1.7)
Research & development credit (1.3)
Other 0.4 0.5 0.8
----- ----- -----
35.5% 36.8% 37.4%
===== ===== =====
</TABLE>
8. ACCRUED EXPENSES
Accrued expenses consisted of the following:
<TABLE>
<CAPTION>
(Amounts in Thousands) 1996 1995
- ---------------------- -------- --------
<S> <C> <C>
Wages & commissions $ 800 $ 797
Vacations 818 768
Taxes, other than income taxes 277 294
Employee benefits 717 715
Other accruals 779 827
-------- --------
Totals $3,391 $3,401
======== ========
</TABLE>
9. EARNINGS PER SHARE CALCULATION
Weighted average shares outstanding exclude common stock equivalents because
their dilutive effect is not significant.
10. SIGNIFICANT CUSTOMERS
One customer accounted for approximately 14% and 9.6% of consolidated revenues
during fiscal 1996 and 1995, respectively.
11. 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.
<PAGE> 11
Selected segment information is as follows:
<TABLE>
<CAPTION>
(Amounts in Thousands) 1996 1995 1994
- --------------------- ------- ------ ------
<S> <C> <C> <C>
Net Sales:
Custom components $20,441 $27,136 $27,457
Medical 15,022 11,928 10,369
Fluid power 36,186 29,055 24,849
Intersegment* (950) (1,154) (838)
------- ------- -------
Sales to unaffiliated customers $70,699 $66,965 $61,837
======= ======= =======
Operating Income:
Custom components $(1,771) $ 2,390 $ 2,862
Medical 3,132 2,585 2,004
Fluid power 7,620 5,874 4,658
Unallocated Corp. expenses & consolidating adj. -- net (772) (857) (698)
------- ------- -------
Total operating income 8,209 9,992 8,826
Other income--net 930 779 750
------- ------- -------
Income before income taxes $ 9,139 $10,771 $ 9,576
======= ======= =======
Identifiable Assets:
Custom components $17,850 $19,735 $17,985
Medical 6,731 6,028 5,904
Fluid power 14,790 11,651 10,311
Corporate 18,067 19,366 19,369
------- ------- -------
$57,438 $56,780 $53,569
======= ======= =======
Depreciation & Amortization:
Custom components $ 1,785 $ 1,629 $ 1,532
Medical 711 641 616
Fluid power 595 550 565
Corporate 143 136 129
------- ------- -------
$ 3,234 $ 2,956 $ 2,842
======= ======= =======
Capital Expenditures:
Custom components $ 1,735 $ 3,881 $ 3,483
Medical 1,031 710 1,365
Fluid power 901 1,113 496
Corporate 169 366 165
------- ------- -------
$ 3,836 $ 6,070 $ 5,509
======= ======= =======
</TABLE>
* Intersegment sales 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> 12
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.
<PAGE> 13
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, 1996 and 1995 and the related consolidated
statements of earnings, shareholders' equity and cash flows for each of the
three years in the period ended March 31, 1996. 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, 1996 and 1995 and the results of their operations
and their cash flows for each of the three years in the period ended March 31,
1996 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 17, 1996
<PAGE> 14
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
(Amounts in Thousands) 1996 1995 1994 1996 1995 1994
- ---------------------- ------- ------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net Sales $70,699 $66,965 $61,837 100.0% 100.0% 100.0%
Gross Profit 19,509 21,785 19,764 27.6% 32.5% 32.0%
Selling and Administrative 11,300 11,793 10,938 16.0% 17.6% 17.7%
Operating Income 8,209 9,992 8,826 11.6% 14.9% 14.3%
Other Income 930 779 750 1.3% 1.2% 1.2%
Earnings Before Taxes 9,139 10,771 9,576 12.9% 16.1% 15.5%
Income Taxes 3,240 3,965 3,580 4.6% 5.9% 5.8%
Net Earnings $5,899 $ 6,806 $ 6,105(1) 8.3% 10.2% 9.9%
</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 1996 increased $3.7 million, or 5.6% over 1995, to $70.7
million. Our Fluid Power Group, specifically our Power Gear Division, was the
largest contributor to the increase. Fluid Power's sales increased $7.1
million or 25% over the prior year. The introduction of Power Gear's slide-out
system for recreational vehicles during the first quarter was the primary
factor fueling the growth. The slide-out product was well received with demand
growing throughout the year. Total sales of slide-outs and leveling systems to
the recreational vehicle market now account for approximately 20% of
consolidated sales. Medical's sales increased $3.1 million, or 26%. The
growth was split evenly between Medical's core business and products for the
consumer market. The Custom Components Group experienced a sales decrease of
$6.7 million or 25%. Volume decreased primarily due to three factors: first,
automotive related business was down $3.7 million; second, a project for the
business machine market which ended during the third quarter of fiscal 1995 had
shipments of $1.3 million last year; and third, sales for our thermoplastics
division were down $450,000. The decline in automotive volume was due to the
loss of several end-of-life projects.
Sales for fiscal 1995 increased $5.1 million, or 8% over 1994, to $67.0
million. 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 systems for the upper end recreational
vehicle market fueled the growth. Medical's sales increased $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.
<PAGE> 15
GROSS PROFIT
Gross profit for fiscal 1996 decreased by $2.3 million, or 10%. Gross profit
as a percentage of sales decreased from 32.5% to 27.6%. The Fluid Power
Group's gross profits were up $2.0 million, or 19%. While gross profit dollars
increased , gross margin as a percentage of sales is down slightly, primarily
due to a shift in product mix to more Power Gear systems. Gross margins at
Power Gear have historically been below those of Milwaukee Cylinder. Volume at
Power Gear has been growing more rapidly than at Milwaukee Cylinder. Power
Gear now accounts for approximately 55% of the Fluid Power Group's total
sales. Medical, on the strength of higher volume had an increase in gross
profit for fiscal 1996 of $250,000, or 5%. The primary reason for the nominal
improvement in Medical's gross profit was a $600,000 increase in spending for
engineering. Management believes there are opportunities in the medical market
and has made a concerted effort to improve the division's technical
capabilities. This added expertise should allow Medical to accelerate its rate
of growth. Gross profit at the Custom Components Group declined $4.5 million,
more than offsetting the progress made at our other two groups. The primary
reason for the decrease was a reduction in volume and the resulting under
absorption of costs.
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.
SELLING AND ADMINISTRATIVE
Selling and administrative expenses decreased $500,000 during fiscal 1996.
Selling and administrative as a percentage of sales declined from 17.6% in
fiscal 1995 to 16.0% in fiscal 1996. As part of managements' continuing effort
to accelerate growth, our consolidated selling expenses increased while
administrative expenses declined. Administrative expenses declined at both the
Custom Components Group and Corporate headquarters. Reductions in bonus of
$200,000 at Corporate and $350,000 in salaries and benefits at Custom
Components were the significant factors. The drop in salaries and benefits was
due to savings associated with the realignment of the silicone divisions
announced on November 14, 1994. Our Fluid Power Group's selling and
administrative expenses increased $500,000. This increase was almost entirely
at the Power Gear Division, where sales commissions increased $250,000.
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.
<PAGE> 16
OPERATING INCOME
Operating income for fiscal 1996 decreased $1.8 million or 18%. Operating
income as a percent of sales decreased from 14.9% in fiscal 1995 to 11.6% in
fiscal 1996. Increases in operating income at both the Medical and Fluid Power
Groups were offset by a $4.2 million drop at the Custom Components Group.
OTHER INCOME
The largest component of other income is interest income which for the fiscal
years 1996, 1995, and 1994 was $848,000, $753,000 and $683,000, respectively.
A decline in cash available to invest was more than offset by a higher rate of
return on those investments during the year.
INCOME TAXES
The effective tax rate for the Company decreased from 36.8% in fiscal 1995 to
35.5% this year. This was due to $120,000 favorable impact for research and
development tax credits related to fiscal years ended between 1992 and 1995.
During fiscal 1996 the Company reviewed it operations and expenses in the R &
D area and determined that it would be appropriate to amend prior year's tax
returns and claim a tax credit. The tax rate for fiscal 1995 decreased from
the previous year due to a reduction in the provision for state taxes.
CASH FLOWS AND LIQUIDITY
In spite of a decline in net earnings of $900,000, cash provided from operating
activities increased $800,000 to $9.5 million during fiscal 1996. A $2.0
million increase in accounts receivable was offset by higher accounts payable.
The increase in accounts receivable was due to a $2.3 million increase in
fourth quarter sales. While accounts receivable are up, days sales outstanding
remained constant.
Cash used in investing activities decreased from $6.0 million during fiscal
1995 to $3.7 million for the current year. Capital additions, while down,
continued to exceed depreciation expense. Expenditures for fiscal 1997 are
planned to be approximately the same as fiscal 1996.
During fiscal 1996 the Company paid $4.4 million in dividends or $.74 per share
(included a special $.35 per share dividend). During February 1995, the
Company adopted a program to repurchase up to 600,000, shares or 10%, of its
outstanding common stock. As of March 31, 1996, 259,700 shares had been
repurchased at a cost of $3.6 million ($3.0 million during the current year).
On May 17, 1996, the Company expanded its repurchase program by an additional
300,000 shares. If the Company were to repurchase the remaining 640,300 shares
under the repurchase program it would require $8.7 million (based on the
5/17/96 price of $13.625 per share).
At March 31, 1996 cash and cash equivalents totaled $14.7 million and exceeded
our current liabilities by a ratio of 2.1 to 1. This liquidity, combined with
the Company's debt-free status gives management significant latitude in dealing
with future opportunities and commitments, including the stock repurchase
program.
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, 1996 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. Management
believes that future earnings will not be impacted in a significant manner.
<PAGE> 17
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 were combined to serve both units. However,
specialization in field sales, customer service, marketing and applications
engineering have been retained to ensure that the unique needs of the Company's
medical and industrial customers are met.
Costs associated with the realignment were not material during fiscal 1996
and were approximately $169,000 for fiscal 1995. These costs were related
primarily to the relocation of management from Portage, WI to Racine, WI.
ACCOUNTING PRONOUNCEMENTS
The Company adopted Statement of Financial Accounting Standard (FAS) No. 106
"Employer Accounting for Postretirement Benefits Other Than Pensions,"
effective April 1, 1993. FAS 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 FAS 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 FAS No. 109 "Accounting for Income Taxes," effective April
1, 1993. FAS 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 FAS 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.
FAS No. 121, "Accounting for the Impairment of Long-lived Assets and for
Long-lived Assets to be Disposed of" and FAS No. 123, "Accounting for
Stock-based Compensation" were issued in 1995. The statements are not expected
to have a material impact on the Company. The Company intends to continue to
account for stock-based compensation under Accounting Principles Board Opinion
No. 25 as allowed by FAS No. 123.
<PAGE> 18
QUARTERLY FINANCIAL DATA (UNAUDITED)
VERSA TECHNOLOGIES, INC.
<TABLE>
<CAPTION>
(Amounts in Thousands, except per share amounts)
- ----------------------------------------------------------------------------------------------------------------------
Net Earnings
Quarterly Results Net Sales Gross Profit Earnings Per Share
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FISCAL YEAR ENDED MARCH 31, 1996
First Quarter $16,989 $ 5,227 $1,548 $0.26
Second Quarter 17,365 4,740 1,477 0.25
Third Quarter 16,486 4,331 1,258 0.21
Fourth Quarter 19,859 5,211 1,616 0.27
------- ------- ------ -----
$70,699 $19,509 $5,899 $0.99
======= ======= ====== =====
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
======= ======= ====== =====
</TABLE>
<PAGE> 19
PER SHARE COMMON STOCK DATA
(Amounts in Thousands, except per share amounts)
<TABLE>
<CAPTION>
Year Ended March 31, 1996 Year Ended March 31, 1995
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 13-3/4 14-1/2 0.09 15-1/4 12-1/4 12-3/8 .08
2nd 15-3/4 13-3/4 15-1/4 0.45 (c) 15 12-1/4 14-5/8 .42 (b)
3rd 18 13-1/2 15-1/4 0.10 15 12-3/4 13-3/4 .09
4th 16-1/4 13-1/4 14 0.10 15-1/4 11-1/2 13-3/4 .09
</TABLE>
(a) NASD's reporting of Versa Technologies Common Stock on their National
Market System (NASDAQ/NMS). Prices do not include retail markup, markdown
or commission.
(b) Includes special cash dividend of $.33 per share.
(c) Includes special cash dividend of $.35 per share.
<PAGE> 20
SUMMARY OF SELECTED FINANCIAL DATA
Versa Technologies, Inc.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
(Amounts in Thousands,
except per share amounts)
Fiscal Year Ended March 31 1996 1995 1994 1993 1992
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Statement of Earnings
Net sales $70,699 $66,965 $61,837 $52,848 $48,935
Cost of sales 51,190 45,180 42,073 34,806 31,908
Selling and administrative expenses 11,300 11,793 10,938 10,322 9,621
Operating income 8,209 9,992 8,826 7,720 7,406
Other income (expense) - net 930 779 750 787 740
Earnings before income taxes 9,139 10,771 9,576 8,507 8,146
Pre-tax earnings as % of net sales 12.9% 16.1% 15.5% 16.1% 16.6%
Income taxes 3,240 3,965 3,580 3,090 3,020
Net earnings 5,899 6,806 6,105 * 5,417 5,126
Net earnings as % of net sales 8.3% 10.2% 9.9% 10.3% 10.5%
Per Common Share(1)
Net earnings 0.99 1.13 1.01 * 0.90 0.86
Dividends declared and paid 0.74(6) 0.68(5) 0.61(4) 0.52(3) 0.24
Book value 8.06 8.00 7.56 7.21 6.80
Year end market value 14.00 13.75 15.00 13.25 15.00
At Year End
Working capital 27,913 29,147 29,286 29,545 26,985
Working capital ratio 4.9 to 1 6.1 to 1 6.4 to 1 8.3 to 1 8.1 to 1
Property and equipment - net 20,517 19,945 16,849 14,262 14,122
Total assets 57,438 56,780 53,569 49,739 46,884
Long-term obligations -- -- -- -- --
Shareholders' equity 46,984 48,068 45,560 43,686 40,897
Shares outstanding (000)(1) 5,829 6,012 6,023 6,059 6,013
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
(Amounts in Thousands,
except per share amounts)
Fiscal Year Ended March 31 1991 1990 1989 1988 1987 1986
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Statement of Earnings
Net sales $51,898 $53,122 $47,941 $45,587 $41,215 $38,940
Cost of sales 33,410 34,803 29,778 28,131 25,271 24,648
Selling and administrative expenses 9,550 9,238 8,713 8,093 7,617 7,242
Operating income 8,938 9,081 9,450 9,363 8,327 7,050
Other income (expense) - net 1,004 697 620 346 (99) 138
Earnings before income taxes 9,942 9,778 10,070 9,709 8,228 7,188
Pre-tax earnings as % of net sales 19.2% 18.4% 21.0% 21.3% 20.0% 18.5%
Income taxes 3,750 3,742 3,820 3,951 3,997 3,382
Net earnings 6,192 6,036 6,250 5,758 4,231 3,806
Net earnings as % of net sales 11.9% 11.4% 13.0% 12.6% 10.3% 9.8%
Per Common Share(1)
Net earnings 1.04 1.02 1.07 0.99 0.73 0.59
Dividends declared and paid 0.23 0.184 0.15 0.253 (2) 0.101 0.075
Book value 6.15 5.34 4.45 3.50 2.73 2.10
Year end market value 14.00 12.50 14.58 13.83 10.27 8.93
At Year End
Working capital 22,549 18,420 14,668 12,103 7,747 7,044
Working capital ratio 6.4 to 1 4.4 to 1 4.3 to 1 3.7 to 1 2.8 to 1 2.3 to 1
Property and equipment - net 14,077 13,195 12,395 10,449 10,210 10,078
Total assets 42,707 39,101 33,736 27,912 23,285 23,282
Long-term obligations -- -- 1,065 1,210 1,375 4,604
Shareholders' equity 36,501 31,633 26,168 20,410 15,804 12,101
Shares outstanding (000)(1) 5,935 5,928 5,879 5,831 5,781 5,764
</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 cash dividend of $.33 per share.
(6) Includes special cash dividend of $.35 per share.
* Includes the cumulative effect of accounting changes, which increased Net
Earnings by $109,000 or $.02 per share.
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF VERSA TECHNOLOGIES, INC.
MARCH 31, 1996
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
FORM 10K
VERSA TECHNOLOGIES, INC.
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
Forms S-3 and S-8 of our reports dated May 17, 1996, appearing in and
incorporated by reference in the Annual Report on Form 10-K of Versa
Technologies, Inc. for the fiscal year ended March 31, 1996.
Deloitte & Touche LLP
Milwaukee, Wisconsin
June 13, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> APR-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 14,746
<SECURITIES> 0
<RECEIVABLES> 11,617
<ALLOWANCES> 207
<INVENTORY> 7,743
<CURRENT-ASSETS> 35,082
<PP&E> 46,073
<DEPRECIATION> 25,556
<TOTAL-ASSETS> 57,438
<CURRENT-LIABILITIES> 7,169
<BONDS> 0
<COMMON> 61
0
0
<OTHER-SE> 50,152
<TOTAL-LIABILITY-AND-EQUITY> 57,438
<SALES> 70,699
<TOTAL-REVENUES> 70,699
<CGS> 51,190
<TOTAL-COSTS> 51,190
<OTHER-EXPENSES> 11,300
<LOSS-PROVISION> 45
<INTEREST-EXPENSE> 35
<INCOME-PRETAX> 9,139
<INCOME-TAX> 3,240
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,899
<EPS-PRIMARY> 0.99
<EPS-DILUTED> 0.99
</TABLE>
