FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For Quarter Ended June 29, 1996 Commission File Number 1-4773
------------------------ -------
American Biltrite Inc.
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(Exact name of registrant as specified in its charter)
Delaware 04-1701350
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State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
57 River Street Wellesley Hills, Massachusetts 02181
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 617-237-6655
--------------------
None
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Former name, former address, and former fiscal year if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date covered by
this report.
Class Outstanding at August 1, 1996
- -------------------------- --------------------------------
Common Stock 3,629,726 shares
<PAGE>
FORM 10-Q
PART I. FINANCIAL INFORMATION
AMERICAN BILTRITE INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
($000)
<TABLE>
<CAPTION>
June 29, December 31,
1996 1995
----------- ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 12,125 $ 39,297
Short-term investments 27,500
Accounts receivable, net 43,758 30,708
Inventories 90,490 82,853
Prepaid expenses & other current assets 8,769 11,268
---------- ----------
TOTAL CURRENT ASSETS 182,642 164,126
Goodwill, net 25,012 23,579
Deferred income taxes 2,873 2,873
Other assets 8,310 8,614
Property, plant and equipment, net 107,109 104,295
---------- ----------
$ 325,946 $ 303,487
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 19,000
Accounts payable 27,204 $ 29,094
Accrued expenses 49,680 44,819
Current portion of long-term debt 1,204 3,207
---------- ----------
TOTAL CURRENT LIABILITIES 97,088 77,120
Long-term debt 107,815 107,712
Other liabilities 48,004 48,180
Non-controlling interests 14,801 12,679
STOCKHOLDERS' EQUITY
Common stock 19,469 19,469
Retained earnings 52,794 52,096
Equity adjustment from translation (2,022) (2,334)
Minimum pension liability (445) (445)
Less cost of shares in treasury (11,558) (10,990)
--------- ----------
58,238 57,796
---------- ----------
$ 325,946 $ 303,487
========== ==========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
2
<PAGE>
FORM 10-Q
PART I. FINANCIAL INFORMATION
AMERICAN BILTRITE INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
($000)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $ 110,175 $ 101,289 $ 200,080 $ 190,980
Interest and other income 810 1,175 2,123 3,442
---------- ---------- ---------- ----------
110,985 102,464 202,203 194,422
---------- ---------- ---------- ----------
Costs and expenses:
Cost of products sold 74,422 69,559 139,178 131,721
Selling, general and
administrative expenses 26,452 23,089 51,565 44,768
Interest 2,585 2,789 5,234 4,945
---------- ---------- ---------- ----------
103,459 95,437 195,977 181,434
---------- ---------- ---------- ----------
EARNINGS BEFORE INCOME TAXES
AND NON-CONTROLLING
INTERESTS 7,526 7,027 6,226 12,988
Provision for income taxes 3,150 3,118 2,645 5,649
Non-controlling interests (2,736) (1,782) (2,151) (3,193)
---------- ---------- ---------- ----------
NET EARNINGS $ 1,640 $ 2,127 $ 1,430 $ 4,146
========== ========== ========== ==========
Earnings per common share $ .45 $ .56 $ .39 $ 1.09
========== ========== ========== ==========
Dividends declared per
common share $ .10 $ .0875 $ .20 $ .15
========== ========== ========== ==========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
3
<PAGE>
FORM 10-Q
PART I. FINANCIAL INFORMATION
AMERICAN BILTRITE INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
($000)
<TABLE>
<CAPTION>
Six Months Ended
June 29, July 1,
1996 1995
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES
Net earnings $ 1,430 $ 4,146
Adjustments to reconcile net earnings to
net cash used by operating activities:
Depreciation and amortization 6,076 5,894
Accounts and notes receivable (13,176) (5,328)
Inventories (7,847) (16,431)
Prepaid expenses and other current assets 2,476 430
Accounts payable and accrued expenses 2,023 616
Non-controlling interests 2,151 3,193
Other 1,071 889
--------- ---------
NET CASH USED BY OPERATING
ACTIVITIES (5,796) (6,591)
INVESTING ACTIVITIES
Investment in property, plant and equipment (8,411) (4,645)
Purchase of short-term investments (27,500) (12,500)
Maturities of short-term investments 28,295
Business acquisitions (1,680) (5,274)
--------- ---------
NET CASH PROVIDED (USED) BY INVESTING
ACTIVITIES (37,591) 5,876
FINANCING ACTIVITIES
Net short-term borrowings 19,000 16,000
Long-term borrowings 15,000
Payment on long-term debt (17,154) (52)
Payment of Congoleum equity offering costs (870)
Net proceeds from Congoleum equity offering 56,219
Repurchase of Congoleum Class B shares (60,450)
Repayments of loans from affiliates (5,400)
K&M capital transactions (3,569)
Purchase of treasury shares (604) (2)
Proceeds from exercise of stock options 36 28
Dividends paid (732) (539)
--------- ---------
NET CASH PROVIDED BY FINANCING
ACTIVITIES 15,546 1,365
Effect of foreign exchange 669 (432)
--------- ---------
INCREASE (DECREASE) IN CASH (27,172) 218
Cash at beginning of period 39,297 19,701
--------- ---------
CASH AT END OF PERIOD $ 12,125 $ 19,919
========= =========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
4
<PAGE>
FORM 10-Q
PART I. FINANCIAL INFORMATION
AMERICAN BILTRITE INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June 29, 1996
Note A - Basis of Presentation
- ------------------------------
The accompanying unaudited consolidated condensed financial
statements which include the accounts of American Biltrite Inc.
and its wholly-owned subsidiaries ("ABI") as well as entities
over which it has voting control have been prepared in accordance
with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and
Rule 10-01 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of
normal recurring adjustments) considered necessary for a fair
presentation have been included. Operating results for the six
month period ended June 29, 1996 are not necessarily indicative
of the results that may be expected for the year ending December
31, 1996. For further information, refer to the consolidated
financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended December
31, 1995.
Note B - Inventories
- --------------------
Inventory at June 29, 1996 and December 31, 1995 consisted of the
following:
<TABLE>
<CAPTION>
June 29, December 31,
1996 1995
-------- ------------
($000)
<S> <C> <C>
Finished goods $ 61,590 $ 54,629
Work-in-process 13,717 11,984
Raw materials and supplies 15,183 16,240
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$ 90,490 $ 82,853
========= =========
</TABLE>
Note C - Commitments and Contingencies
- --------------------------------------
ABI has recorded what it believes are adequate provisions for
environmental remediation and product-related liabilities. While
the company believes that its estimate of the future amount of
these liabilities is reasonable, the ultimate outcome of these
matters cannot be determined.
5
<PAGE>
FORM 10-Q
PART I. FINANCIAL INFORMATION
AMERICAN BILTRITE INC. AND SUBSIDIARIES
MANAGEMENTS' DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
June 29, 1996
Results of Operations
- ---------------------
Net sales for the 1996 second quarter were $110.2 million
compared to $101.3 million last year. Congoleum Corporation
("Congoleum") sales in the second quarter reflect an increase of
$5.7 million over last year's second quarter resulting from a
strong performance in nearly all product categories with the most
significant increase occurring in sales to the manufactured
housing segment. ABI's Tape and Canadian operations also reflect
increases over last year with K&M Associates L.P. ("K&M")
reflecting a small sales loss from last year due to the
continuation of a weak retail environment.
Year-to-date net sales were $200.1 million compared to $191.0
million last year. ABI's Tape and Canadian operations reflect
year-to-year increases in sales due to an improved domestic
economy. Congoleum's strong second quarter sales performance did
not overcome the poor sales performance in the current first
quarter. K&M operating performance was not included in last
year's first quarter in that ABI did not acquire a majority
position in K&M until April 1, 1995.
Interest and other income decreased by $0.4 million in the
current quarter and by $1.3 million in the current six months.
Key factors accounting for this reduction are lower royalty
income at Congoleum, lower incentive payments from Hillside
Industries and receipt in 1995 of one-time insurance claim and
reserve adjustments.
Cost of products sold as a percentage of sales in the current
quarter decreased to 67.5% from 68.7%. This improvement was
generated mainly at Congoleum where gross profit margins improved
as a result of the sales increase discussed earlier, improved
productivity and more moderate raw material costs. In the
current six months, these percentages increased to 69.6% from
69.0% last year caused by the poor sales and productivity
performance at Congoleum in the current first quarter.
Selling, general and administrative expenses as a percentage of
sales in the current quarter increased to 24.0% from 22.8% last
year and for the current six months increased to 25.8% from 23.4%
last year. The major reasons for the increase for both periods
include increased expenses at both Congoleum and ABI for new and
existing product promotions, expanded distribution and new
product development.
6
<PAGE>
FORM 10-Q
PART I. FINANCIAL INFORMATION
AMERICAN BILTRITE INC. AND SUBSIDIARIES
MANAGEMENTS' DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
June 29, 1996
Interest expense decreased to $2.6 million in the current quarter
from $2.8 million last year due to the mix of loans outstanding
with varying interest rates and interest rates being generally
lower than last year. Interest expense increased to $5.2 million
in the current six months from $4.9 million last year due to
increased borrowings at ABI to finance the acquisition of
additional partnership interest in K&M, and at K&M to finance a
portion of its working capital.
Net income for the second quarter of 1996 was $1.6 million,
compared to $2.1 million for last year's second quarter and
reflect the improvement in earnings at Congoleum being offset by
lower earnings at ABI and a loss at K&M. For the current six
months, net income was $1.4 million, being $2.7 million lower
than $4.1 million net income in the first half of 1995.
Congoleum's current first quarter loss together with lower six
months earnings at ABI and a six month loss at K&M, account for
this year-to-year difference.
Liquidity and Capital Resources
- -------------------------------
Cash and cash equivalents, including short-term investments at
June 29, 1996, were $39.6 million compared to $39.3 million at
December 31, 1995. Working capital was $85.6 million,down
slightly from $87.0 million at December 31, 1995. The ratio of
current assets to current liabilities at June 29, 1996 was 1.9 to
1 and was 2.1 to 1 at December 31, 1995. Cash used by operations
was $5.8 million for the first six months of 1996 and consists
mainly of increases in receivables and inventory to support the
current increases in sales volume.
Capital expenditures in the current six months were $8.4 million
and depreciation and amortization expense was $6.1 million. It
is anticipated that total year 1996 capital spending will be in
the range of $22 to $24 million.
The Company has established a reserve for product related
liabilities and an environmental reserve against which the costs
of administration and remediation are and will be charged. Since
legal proceedings tend to be unpredictable and costly, resolution
of an environmental proceeding could possibly be material to the
results of operations or cash flow for a particular quarterly or
annual reporting period.
7
<PAGE>
FORM 10-Q
PART I. FINANCIAL INFORMATION
AMERICAN BILTRITE INC. AND SUBSIDIARIES
MANAGEMENTS' DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
June 29, 1996
Cash requirements for capital expenditures, working capital, debt
service and the current authorization of $5.0 million to purchase
ABI Common Stock and $5.0 million to purchase Congoleum Common
Stock, are expected to be financed from operating activities and
borrowings under existing bank lines of credit which at ABI are
presently $30.0 million and at Congoleum are $30.0 million.
During the current first quarter, ABI entered into a $30.0
million note purchase and private shelf agreement with an
insurance company and drew down $15.0 million. There is $15.0
million remaining in the shelf facility for future financing
requirements.
8
<PAGE>
FORM 10-Q
PART II. OTHER INFORMATION
AMERICAN BILTRITE INC. AND SUBSIDIARIES
June 29, 1996
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
--------
The following exhibits are included herein:
3.1(1) Restated Certificate of Incorporation
dated May 3, 1990
3.1(2) Certificate of Amendment, dated May 30, 1995,
of the Restated Certificate of Incorporation
3.1(3) Certificate of Amendment, dated May 15, 1996,
of the Restated Certificate of Incorporation
dated May 3, 1990, as amended
(11) Statement re: computation of earnings per share
(b) Reports on Form 8-K
------------------
There were no reports on Form 8-K filed for the three
months ended June 29, 1996.
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
AMERICAN BILTRITE INC.
----------------------
(Registrant)
Date: August 8, 1996 BY:/s/Gilbert K. Gailius
---------------------
Gilbert K. Gailius
Vice President-Finance
9
<PAGE>
Exhibit 3.1(1)
RESTATED CERTIFICATE OF INCORPORATION
OF
AMERICAN BILTRITE INC.
AMERICAN BILTRITE INC., a corporation organized on November 29,
1954 under the name American Biltrite Rubber Co. Inc., hereby amends and
restates its Certificate of Incorporation, pursuant to Sections 228, 242
and 245 of the General Corporation Law of the State of Delaware, to read
in its entirety as follows:
FIRST: The name of the Corporation is AMERICAN BILTRITE INC.
(hereinafter, the "Corporation").
SECOND: The respective names of the County and of the City
within the county in which the registered office of the Corporation is
to be located in the State of Delaware are the County of Kent and the
City of Dover. The name of the registered agent of the Corporation is
The Prentice-Hall Corporation System, Inc. The street and number of
said registered office and the address by street and number of said
registered agent is 32 Lockerman Square, Suite L-100, Dover, Delaware.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which corporations may be organized under
the General Corporation Law of the State of Delaware (the "GCL").
FOURTH: The total number of shares of capital stock of all
classes which the Corporation shall have the authority to issue is six
million five hundred thousand (6,500,000) shares. Five million five
hundred thousand (5,500,000) shares shall be Common Stock, no par value,
and one million (1,000,000) shares shall be Preferred Stock, no par value.
A. PREFERRED STOCK
1. The Board of Directors is authorized to provide for the issuance
of all or any shares of the Preferred Stock, in one or more
classes or series, and to fix for each such class or series
such voting powers, full or limited, or no voting powers, and
such distinctive designations, preferences and relative,
<PAGE>
participating, optional or other special rights and such
qualifications, limitations or restrictions thereof, as shall
be stated and expressed in the resolution or resolutions
adopted by the Board of Directors providing for the issuance
of such class or series and as may be permitted by the GCL,
including, without limitation, the authority to provide that
any such class or series may be (a) subject to redemption at
such time or times and at such price or prices; (b) entitled
to receive dividends (which may be cumulative or non-cumulative)
at such rates, on such conditions, and at such times, and
payable in preference to, or in such relation to, the dividends
payable on any other class or classes or any other series;
(c) entitled to such rights upon the dissolution of, or upon any
distribution of the assets of, the Corporation; or (d) convertible
into, or exchangeable for, shares of any other class or classes
of stock, or of any other series of the same or any other class
or classes of stock, of the Corporation at such price or prices
or at such rates of exchange and with such adjustments; all as
may be stated in such resolution or resolutions.
2. No holder of Preferred Stock shall as such holder have any
preemptive rights in or preemptive rights to subscribe to or
purchase any shares of the class of stock or any other securities
which may at any time be issued by the Corporation except to the
extent such rights shall be specifically provided for in the
resolution or resolutions providing for the issuance thereof
adopted by the Board of Directors.
B. COMMON STOCK
1. The holders of the Common Stock shall be entitled to receive
dividends when, as and if declared by the Board of Directors
out of assets legally available therefor.
2. No holder of Common Stock shall as such holder have any
preemptive right in or preemptive right to subscribe to or
purchase any shares of the class of stock or any other
securities which may at any time be issued by the Corporation.
3. In the event of any liquidation, dissolution or winding up of
the affairs of the Corporation, whether voluntary or involuntary,
<PAGE>
all assets and funds of the Corporation remaining after the
satisfaction in full of the prior rights of creditors, including,
but not limited to, holders of the Corporation's indebtedness
and the aggregate liquidation preference of any Preferred Stock
then outstanding, shall be divided and distributed among the
holders of the Common Stock ratably (together with any shares of
capital stock of the Corporation which are not entitled to any
preference in liquidation).
C. VOTING RIGHTS
Except as otherwise specifically required by law, this Certificate of
Incorporation or as specifically provided in any resolution of the
Board of Directors providing for the issuance of any particular series
of Preferred Stock, the exclusive voting power of the Corporation shall
be vested in the Common Stock of the Corporation. Except as otherwise
provided in this Certificate of Incorporation, each share of Common
Stock shall entitle the holder thereof to one vote at all meetings of
the stockholders of the Corporation.
FIFTH: The business and affairs of the Corporation shall be
managed by or under the direction of a Board of Directors consisting of
not less than three nor more than fifteen directors, the exact number of
directors to be determined from time to time by resolution adopted by
affirmative vote of a majority of the entire Board of Directors.
A. The directors shall be divided into three classes, designated Class I,
Class II and Class III. Each class shall consist, as nearly as may be
possible, of one-third of the total number of directors constituting
the entire Board of Directors. At the 1990 annual meeting of
stockholders, Class I directors shall be elected for a one-year term,
Class II directors for a two-year term and Class III directors for a
three-year term. At each succeeding annual meeting of stockholders
beginning in 1991, successors to the class of directors whose term
expires at that annual meeting shall be elected for a three-year term.
If the number of directors is changed, any increase or decrease shall
be apportioned among the classes so as to maintain the number of
directors in each class as nearly equal as possible, and any additional
director of any class elected to fill a vacancy resulting from an
increase in such class shall hold office for a term that shall coincide
<PAGE>
with the remaining term of that class, but in no case will a decrease
in the number of directors shorten the term of any incumbent director.
A director shall hold office until the annual meeting for the year in
which his term expires and until his successor shall be elected and
shall qualify, subject, however, to prior death, resignation,
retirement, disqualification or removal from office. Any vacancy on
the Board of Directors that results from an increase in the number of
directors may be filled by a majority of the Board of directors then
in office, provided that a quorum is present, and any other vacancy
occurring in the Board of Directors may be filled by a majority of the
directors then in office, even if less than a quorum, or by a sole
remaining director. Any director elected to fill a vacancy not
resulting from an increase in the number of directors shall have the
same remaining term as that of his predecessor. Each of the directors
of the Corporation may be removed from office at any time, but only
for cause and only by the affirmative vote of the holders of not less
than eighty percent (80%) of the outstanding stock of the Corporation
then entitled to vote for the election of such director.
Notwithstanding the foregoing, whenever the holders of any one or
more classes or series of preferred stock issued by the Corporation
shall have the right, voting separately by class or series, to elect
directors at an annual or special meeting of stockholders, the election,
term of office, filling of vacancies and other features of such
directorships shall be governed by the terms of this Certificate of
Incorporation or the resolution or resolutions adopted by the Board of
Directors pursuant to Article FOURTH applicable thereto, and such
directors so elected shall not be divided into classes pursuant to
this Article FIFTH unless expressly provided by such terms.
B. Except to the extent prohibited by law, the Board of Directors shall
have the right (which, to the extent exercised, shall be exclusive)
to establish the rights, powers, duties, rules and procedures that
from time to time shall govern the Board of Directors and each of its
members, including without limitation the vote required for any action
by the Board of Directors, and that from time to time shall affect the
directors' power to manage the business and affairs of the Corporation;
<PAGE>
and no By-Law adopted by stockholders shall operate retroactively to
impair or impede the implementation of any action authorized in
accordance with the foregoing.
C. In furtherance and not in limitation of the powers conferred by the
laws of the State of Delaware, the Board of Directors is expressly
authorized and empowered:
1. To make, alter, amend, and repeal the By-Laws, subject, however,
to the power of the stockholders to alter and repeal the By-Laws
made by the Board of Directors.
2. To determine, from time to time, whether and to what extent and
at what times and places and under what conditions and regulations
the accounts and books and papers of the Corporation, or any of
them, shall be open to the inspection of the stockholders; and no
stockholder shall have any rights to inspect any account, book or
document of the Corporation, except as and to the extent expressly
provided by law with reference to the right of stockholders to
examine the original or duplicate stock ledger, or otherwise
expressly provided by law, or except as expressly authorized by
resolution of the Board of Directors.
3. To authorize and issue obligations of the Corporation, secured or
unsecured, to include therein such provisions as to redeemability,
convertibility or otherwise, as they may determine, and to
authorize the mortgaging or pledging, as security therefor, of any
property of the Corporation, real or personal, including
after-acquired property.
D. In addition to the powers and authority hereinbefore or by statute
expressly conferred upon it, the Board of Directors may exercise all
such powers and do all such acts and things as may be exercised or
done by the Corporation subject, nevertheless, to the provisions of
the laws of the State of Delaware, this Certificate of Incorporation
and any By-Laws adopted by the stockholders.
SIXTH: Whenever a compromise or arrangement is proposed between
this Corporation and its creditors or any class of them, and/or between
this Corporation and its stockholders or any class of them, any court of
<PAGE>
equitable jurisdiction within the State of Delaware may, on the application
in a summary way of this Corporation or of any creditor or stockholder
thereof, or on the application of any receiver or receivers appointed for
this Corporation under the provisions of Section 291 of Title 8 of the
Delaware Code, or on the application of trustees in dissolution or of any
receiver or receivers appointed for this Corporation under the provisions
of Section 279 of Title 8 of the Delaware Code, order a meeting of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, to be summoned in
such manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the case may
be, agree to any compromise or arrangement and to any reorganization of this
Corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned
by the court to which the application has been made be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders of this Corporation, as the case may be, and also on this
Corporation.
SEVENTH: The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Certificate of
Incorporation, in the manner now or hereafter prescribed by applicable
law and all rights conferred upon officers, directors and stockholders
herein are granted subject to this reservation.
EIGHTH:
A. No director of the Corporation shall be held personally liable to the
Corporation or its stockholders for monetary damages of any kind for
breach of fiduciary duty as a director, except for liability (1) for
any breach of the director's duty of loyalty to the Corporation or its
stockholders, (2) for acts or omissions not in good faith or which
involved intentional misconduct or a knowing violation of law, (3) under
Section 174 of the GCL, or (4) for any transaction from which the
director derived an improper personal benefit. If the GCL is amended
after the date this Certificate of Incorporation became effective under
the GCL to authorize corporate action further eliminating or limiting
the personal liability of directors, then the liability of a director
of the Corporation shall be eliminated or limited to the fullest extent
permitted by the GCL, as so amended from time to time. No amendment or
<PAGE>
repeal of this Section A of Article EIGHTH by the stockholders of the
Corporation shall apply to or have any effect on the liability or
alleged liability of any director of the Corporation for or with
respect to any acts or omissions occurring prior to such amendment or
repeal. The provisions of this Section A of Article EIGHTH shall not be
deemed to limit or preclude indemnification of a director by the
Corporation for any liability of a director which has not been
eliminated by the provisions of this Section A of Article EIGHTH.
B. Every person who was or is a party or is threatened to be made a party
to or is involved in any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative
by reason of the fact that such person, or such person's testator or
intestate, is or was a director or an officer of the Corporation or by
reason of the fact that such person is or was serving at the request of
the Corporation or for its benefit any other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise, in any
capacity shall be indemnified and held harmless by the Corporation to
the fullest extent legally permissible under the GCL in the manner
prescribed therein, from time to time, against all expenses (including
attorneys fees) judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection therewith.
Similar indemnification may be provided by the Corporation to an agent
or employee of the Corporation who was or is a party or is threatened
to be made a party to or is involved in any such threatened, pending or
completed action, suit or proceeding by reason of the fact that such
person is or was an employee or agent of the Corporation or is or was
serving at the request of the Corporation or for its benefit any other
corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise, in any capacity. No amendment or repeal of this
Section B of Article EIGHTH by the stockholders of the Corporation
shall apply to or have any effect on any right to indemnification
provided hereunder with respect to any acts or omissions occurring
prior to such amendment or repeal.
C. The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Corporation
or another corporation, partnership, joint venture, trust or other
enterprise against any such expense, liability or loss, whether or
<PAGE>
not the Corporation would have the power to indemnify such person
against such expense, liability or loss under the GCL. The Corporation
may also create a trust fund, grant a security interest and use other
means (including, but not limited to, letters of credit, surety bonds
and other similar arrangements), as well as enter into contracts
providing indemnification to the full extent authorized or permitted by
law and including as part thereof provisions with respect to any or all
of the foregoing, to ensure the payment of such amounts as may become
necessary to effect indemnification as provided therein, or elsewhere.
NINTH: No contract or transaction between the Corporation and
one or more of its directors or officers, or between the Corporation and
any other corporation, partnership, association or other organization in
which one or more of its directors or officers are directors or officers,
or have a financial interest, shall be void or voidable solely for this
reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof
which authorizes the contract or transaction, or solely because his or
their votes are counted for such purposes, if:
A. the material facts as to his relationship or interest and as to the
contract or transaction are disclosed or are known to the Board of
Directors or the committee, and the Board of Directors or committee
in good faith authorizes the contract or transaction by the affirmative
votes of a majority of the disinterested directors, even though the
votes of the disinterested directors be less than a quorum; or
B. the material facts as to his relationship or interest and as to the
contract or transaction are known to the stockholders entitled to
vote thereon, and the contract or transaction is specifically approved
in good faith by vote of the stockholders; or
C. the contract or transaction is fair as to the Corporation as of the
time it is authorized, approved or ratified by the Board of Directors,
a committee thereof or the stockholders. Common or interested directors
may be counted in determining the presence of a quorum at a meeting of
the Board of Directors or of a committee which authorizes the contract
or transaction.
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Amended
and Restated Certificate of Incorporation to be executed in its name this
3rd day of May, 1990.
AMERICAN BILTRITE INC.
By /s/ RICHARD G. MARCUS
-----------------------
Richard G. Marcus
President
Attest:
/s/ HENRY W. WINKLEMAN
----------------------
Henry W. Winkleman
Secretary
Exhibit 3.1(2)
CERTIFICATE OF AMENDMENT
OF THE
RESTATED CERTIFICATE OF INCORPORATION
OF
AMERICAN BILTRITE INC.
---------------------------------------
Pursuant to Section 242 of the General
Corporation Law of the State of Delaware
----------------------------------------
American Biltrite Inc., a Delaware corporation (the "Corporation"),
does hereby certify as follows:
FIRST: The first and second sentences of Article FOURTH of the
Corporation's Restated Certificate of Incorporation are hereby amended to
read in their respective entireties as set forth below:
FOURTH: The total number of shares of capital stock of all classes
which the Corporation shall have the authority to issue is sixteen
million (16,000,000) shares. Fifteen million (15,000,000) shares
shall be Common Stock, no par value, and one million (1,000,000)
shares shall be Preferred Stock, no par value.
SECOND: The foregoing amendment was duly adopted in accordance with
the provisions of Section 242 of the General Corporation Law of the State
of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be executed in its corporate name this 30th day of May, 1995.
AMERICAN BILTRITE INC.
By /s/ Richard G.Marcus
---------------------
Name: Richard G. Marcus
Title: President
Exhibit 3.1(3)
CERTIFICATE OF AMENDMENT
OF THE
RESTATED CERTIFICATE OF INCORPORATION
OF
AMERICAN BILTRITE INC.
----------------------------------------
Pursuant to Section 242 of the General
Corporation Law of the State of Delaware
----------------------------------------
American Biltrite Inc., a Delaware corporation (the "Corporation"),
does hereby certify as follows:
FIRST: The first and second sentences of Article FOURTH of the
Corporation's Restated Certificate of Incorporation are hereby amended to
read in their respective entireties as set forth below:
FOURTH: The total number of shares of capital stock of all
classes which the Corporation shall have the authority to issue is
sixteen million (16,000,000) shares. Fifteen million (15,000,000)
shares shall be Common Stock, par value $.01 per share, and one million
(1,000,000) shares shall be Preferred Stock, par value $.01 per share.
SECOND: The foregoing amendment was duly adopted in accordance
with the provisions of Section 242 of the General Corporation Law of the
State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate
of Amendment to be executed in its corporate name this 15th day of May, 1996.
AMERICAN BILTRITE INC.
By /s/ Richard G. Marcus
-----------------------
Name: Richard G. Marcus
Title: President
FORM 10-Q
PART II. OTHER INFORMATION
AMERICAN BILTRITE INC. AND SUBSIDIARIES
June 29, 1996
Item 6. Exhibits
- -------------------
(11) STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
July 1, July 1,
1995 1995
--------- ---------
(000's omitted, except per share data)
<S> <C> <C>
Primary:
Average shares outstanding 3,595 3,583
Net effect of dilutive
stock options-based on
the treasury stock method
using average market price 221 234
-------- --------
Totals 3,816 3,817
======== ========
Net income $ 2,127 $ 4,146
======== ========
Per share amount $ .56 $ 1.09
======== ========
Fully diluted:
Average shares outstanding 3,595 3,583
Net effect of dilutive
stock options-based on
the treasury stock method
using quarter-end market
price 221 234
-------- --------
Totals 3,816 3,817
======== ========
Net income $ 2,127 $ 4,146
======== ========
Per share amount $ .56 $ 1.09
======== ========
</TABLE>
Note: There was no dilutive effect from stock options in 1996.
Weighted average shares outstanding for the three months
and six months ended June 29, 1996 were 3,647,989 and
3,659,236, respectively.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-29-1996
<CASH> 12,125
<SECURITIES> 27,500
<RECEIVABLES> 43,758
<ALLOWANCES> 0
<INVENTORY> 90,490
<CURRENT-ASSETS> 182,642
<PP&E> 107,109
<DEPRECIATION> 0
<TOTAL-ASSETS> 325,946
<CURRENT-LIABILITIES> 97,088
<BONDS> 107,815
0
0
<COMMON> 19,469
<OTHER-SE> 38,769
<TOTAL-LIABILITY-AND-EQUITY> 325,946
<SALES> 200,080
<TOTAL-REVENUES> 202,203
<CGS> 139,178
<TOTAL-COSTS> 139,178
<OTHER-EXPENSES> 51,565
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,234
<INCOME-PRETAX> 6,226
<INCOME-TAX> 2,645
<INCOME-CONTINUING> 1,430
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,430
<EPS-PRIMARY> .39
<EPS-DILUTED> .39
</TABLE>
