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UNITED STATES SECURITIES and EXCHANGE COMMISSION
Washington, DC 20549
Form 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT to SECTION 13 or 15(d) of the SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT to SECTION 13 or 15(d) of the SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________________ to _______________
Commission file number: 1-3940
NATIONAL-STANDARD COMPANY
(Exact Name of Registrant as Specified in Its Charter)
Indiana 38-1493458
(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
1618 Terminal Road, Niles, Michigan 49120
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (616) 683-8100
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
Common stock, $.01 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No ___.
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K. [X]
The aggregate market value of the common shares held by non-affiliates of
the registrant on November 23, 1994, based on the closing price of the
shares on the New York Stock Exchange and assuming that 60 percent of the
shares were held by non-affiliates, was approximately $31,786,000.
As of November 23, 1994, 5,364,713 shares of common stock, par value of
$ .01, were outstanding.
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DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the annual Proxy Statement relating to the Annual Meeting of
Shareholders scheduled for January 26, 1995 are incorporated by reference
into Part III of this report.
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PART I
ITEM 1. Business
National-Standard Company, an Indiana corporation, and its subsidiaries
(the "Company") have generally operated prior to 1992 in two business
segments: (i) wire and related products and (ii) machinery and other
products. As a result of divestitures prior to 1992, the Company currently
operates in only the wire and related products segment.
In Fiscal Year 1994, there were no material changes to the Company's
business. During the past three years, the Company disposed of various
business units and product lines as described in the following report.
Wire and Related Products Segment
The Company produces tire bead wire, welding wire, wire cloth, hose
reinforcing wire, stainless steel spring and specialty wire, plated wire,
and nonwoven metal fiber materials. These products are generally sold
directly to other manufacturers by Company salesmen. In addition, certain
classes of wire are sold through various types of distributors.
The Company also produces filters for automotive air bag inflators, which
are sold by Company salesmen to automotive air bag manufacturers.
During 1994, the Company discontinued the manufacture of hose wire in North
America and closed its Columbiana, Alabama facility. The North American
hose wire market will be served from existing capacity available in the
Company's Kidderminster, England facility. Sufficient bead wire
manufacturing capacity to serve the Company's North American market has
been relocated to the Company's other North American wire facilities. The
Company provided $4,870,000 during the first quarter of 1994 for relocation
of equipment, plant environmental stabilization, and employee severance.
Approximately $2,700,000 of cash outlays related to the plant closure were
made during 1994. Cash outlays during 1995 related to the closure are
expected to be $700,000, primarily for plant environmental stabilization.
In 1993, the Company sold the Telford Wire Division, Telford, England and
the Taydor Engineers business unit in Stourport, England. Proceeds of
$1,344,000 were used to reduce its United Kingdom borrowings.
Wire and related products are supplied to major markets consisting of tire,
air bag filtration, spring, automotive component, electric component,
hydraulic hose, telecommunications, and fabricated metal products.
During 1990, the Company entered into a joint venture with Toyota Tsusho
America, Inc., and a group of Japanese wire weavers. The venture was
established to ensure that the Company would have sufficient quantities of
competitively priced woven wire cloth to maintain its position as a major
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supplier of filtration materials and filters for the automotive air bag
market. During 1991, the venture was self-funding, requiring no cash
contributions from the Company. During 1992, the Company contributed cash
of $120,000 and equipment valued at $180,000 to the venture. No additional
investments were made in the venture during 1993. During 1994, the Company
announced that the joint venture would be expanded in 1995 to a second
manufacturing site for the production of wire cloth for air bag inflator
filters. This expansion is expected to be funded from the venture's
operating cash flow and from external financing available to the venture.
Future requirements will be dependent on market conditions.
The Company's wire products are generally highly competitive, with a number
of other producers located both in the U.S. and in foreign countries. In
some cases, the Company's customers are also manufacturing products for
their own use similar to those produced by the Company. The Company
remains the leading U.S. producer of tire bead wire for the tire industry.
Bekaert Corporation, Delta Wire Corporation, and Amercord, Inc. are the
Company s major bead wire competitors. The Company is the major supplier
of air bag filtration materials in the U.S. While there are a limited
number of manufacturers in the Company's line of filtration materials, the
Company regards the field as highly competitive. Competitive factors for
all of the Company s products are generally considered to be price, service
and product quality.
During 1994, the Company announced that additional air bag filter
manufacturing capacity would be installed at a new leased facility in Mesa,
Arizona early in 1995. The Company expects to spend approximately $800,000
for the additional capacity. This will be funded through available capital
expenditure lines of credit.
During 1993, the Company added air bag filter wire cloth weaving capacity
at new leased facilities in Knoxville, Tennessee and Clearfield, Utah. In
addition, certain air bag filtration products and manufacturing processes
were relocated from the Corbin, Kentucky facility to the new facilities.
Although wire and related products are generally basic materials or
fabricated products which do not require assembly, production time is
relatively short and backlog is not significant. There was a backlog of
approximately $27,750,000 and $14,900,000 at September 30, 1994 and 1993,
respectively.
During 1988, the Company closed its strip steel and flat wire facility
located in Clifton, New Jersey. Prior to 1992, the facility was included
in the "machinery and other products" segment. During the past six years,
the Company has undertaken to obtain New Jersey approval to transfer title
for the property. Due to the environmental regulations in the State of New
Jersey, title to real estate cannot be passed without the Department of
Environmental Protection s written approval. This project has involved
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demolition of the buildings and continuing remediation of environmental
problems from production wastes through use of an on-site landfill and
off-site disposal. The cash outlays related to the property, which have
been primarily environmental, were $285,000, $282,000, $380,000,
$3,027,000, $712,000, and $3,028,000 in 1994, 1993, 1992, 1991, 1990, and
1989, respectively. These cash outlays, up to the estimated realizable
value of the property, have been reported as other assets, with the balance
charged to operations. In 1994, 1993, 1992, 1991 and 1990, the Company
expensed $2,030,000, $0, $333,000, $3,898,000 and $2,933,000, respectively,
associated with the project, primarily to adjust the property value to
current market and to recognize the current estimated cost of soil
remediation. The Company expects to spend $290,000 in 1995 on the project.
Future cash outlays of approximately $2,469,000 will be needed prior to
sale of the property. The Company intends to spend this amount in
conjunction with or just prior to the sale.
Environmental
In addition to amounts spent in connection with the Clifton, New Jersey
facility, the Company had cash outlays of approximately $2,531,000 during
the 1994 fiscal year, and $1,471,000 during the 1993 fiscal year on
pollution control equipment and related operational environmental projects
and procedures at the Company's seven U.S. plants. The largest annual cash
outlays during 1994 and 1993 were $1,740,000 and $607,000, respectively, at
the closed Columbiana facility, primarily for plant environmental
stabilization in 1994, and environmental operational procedures in 1993.
Compliance with federal, state, and local environmental regulations which
have been enacted or adopted is estimated to require operational cash
outlays of approximately $1,925,000 during 1995. In 1993, environmental
expense provisions totaling $3,600,000 were recorded to (1) decommission
hose wire plating equipment and dispose of hazardous materials normally
used in the plating process, (2) provide for soil remediation at an unused
fill site, and (3) provide for the closure of waste water surface
impoundments which are no longer in use. The Company does not expect
existing regulations will have any material effect on its net earnings or
competitive position.
The Company has previously been designated a potentially responsible party
(PRP) by the Environmental Protection Agency (EPA) for four actual or
potential superfund sites, all of which have in excess of twenty other
PRP's. The Company has completed or is undertaking all investigative work
requested or required by the appropriate governmental agencies or by
relevant statutes, regulations, or local ordinances at minimal out-of-
pocket costs. In one instance, the Company has no record of participation
at the site. In two instances, the Company's records indicate that it had
only de minimus involvement. The Company has reviewed its involvement at
the fourth site and has previously accrued $300,000 for its share of
estimated site remediation based upon all information currently available.
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The Company does not believe future costs for these sites will have a
materially adverse effect on the consolidated financial condition of the
Company or its consolidated results of operations.
General
The Company's major raw material steel is purchased in several forms
from domestic and foreign steel companies. Raw materials were readily
available during the year and no shortages are anticipated for the 1995
fiscal year. The Company also purchases a variety of component parts for
use in some of the products it manufactures. The Company believes that its
sources of supply of these materials are adequate for its needs. The
Company's major sources of energy needed in its operations are natural gas,
fuel oil and electrical power. In certain locations where the Company
believes its regular source of energy may be interrupted, it has made plans
for alternative fuels.
The Company owns or is licensed under a number of patents covering various
products and processes. Although these have been of value in the growth of
the business and will continue to be of considerable value in its future
growth, the Company's success or growth has not generally been dependent
upon any one patent or group of related patents. The Company believes that
the successful manufacture and sale of its products generally depend more
upon its technological know-how and manufacturing skills. Seasonal activity
has no material effect on the Company's level of business or working
capital requirements. The Company's largest customers include the major
producers of automotive air bag restraint systems, i.e., Morton
International and TRW, and some of the major tire and rubber companies,
i.e., the Cooper Tire and Rubber Company, the Dunlop Tire and Rubber
Corporation (owned by Sumitomo), the Firestone Tire and Rubber Company
(owned by Bridgestone), Gates Rubber Company, General Tire (owned by
Continental), the Goodyear Tire and Rubber Company, and the
Uniroyal-Goodrich Company (owned by Michelin). The Goodyear Tire and
Rubber Company accounted for approximately 17%, and the ten largest
customers, in the aggregate, accounted for approximately 62% of
consolidated sales in the last fiscal year. Generally, business with these
customers is on the basis of purchase orders without firm commitments to
purchase specific quantities. No other material part of the Company's
business is dependent upon any single customer or very few customers, the
loss of which would have a material adverse effect upon the Company.
During the 1994 fiscal year, the Company spent approximately $959,000 on
research and development of new products and process alternatives compared
to $982,000 and $994,000 for the years ended September 30, 1993 and 1992,
respectively. These cash outlays are for Company sponsored activities.
Only three products, high carbon steel wire, low carbon steel wire, and air
bag inflator filters, each account for 10% or more of total sales. High
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carbon and low carbon steel wire were, respectively, 38% and 21% of total
sales in 1994; 51% and 20% of total sales in 1993; and 51% and 21% of total
sales in 1992. Air bag inflator filters accounted for 12% of total sales
in 1994, and less than 10% in prior years.
During 1993, the Company experienced work stoppages by the United
Steelworkers of America at the Niles, Michigan; Corbin, Kentucky; and
Columbiana, Alabama plants. The Niles and Corbin strikes were settled
during 1993 with modified health care benefits similar to the health
benefits for salaried employees. The Columbiana plant was closed on June
1, 1994, and certain production equipment was relocated to other Company
facilities. The Company continued to supply product during the work
stoppages. Additional costs, including security services, additional
wages, and air freight, were approximately $4,500,000 for the three work
stoppages in 1993, and $4,266,000 for the work stoppage in Columbiana in
1994. Additionally, in 1993, as a result of the work stoppage in
Columbiana, the Company discontinued hose wire plating in North America and
wrote down the value of its hose wire plating equipment by $909,000.
At September 30, 1994, the Company employed 1,282 persons in its operations
throughout the world.
During 1993, the Company elected early adoption of The Financial Accounting
Standards Board's Statement of Financial Accounting Standards No. 106,
"Accounting for Postretirement Benefits Other than Pensions." The one-time
transition obligation recognized at the time of adoption was $48,676,000.
Primarily as a result of this accounting change, the Company has a negative
net worth of $28,266,000.
International Operations
The Company has foreign subsidiaries in Canada and the United Kingdom which
are similar to certain of the Company's domestic operations and with
generally the same markets. The financial information about foreign and
domestic operations for the three years ended September 30, 1994 is
included in Note 13 of Notes to Consolidated Financial Statements in Item
8, "Financial Statements and Supplementary Data" section of this Report
(incorporated herein by this reference). Foreign operations are subject to
the usual risks of doing business abroad, such as possible devaluation of
currency, restrictions on the transfer of funds and, in certain parts of
the world, political instability.
Accounting principles dictate that results of operations for the Company's
international operations are translated into U.S. dollars in accordance
with the Statement of Financial Accounting Standards No. 52. A translation
adjustment is recorded as a separate component of shareholders' equity,
"Cumulative Translation Adjustment." The Cumulative Translation Adjustment
account, at the end of 1994, reflects a slight decrease of approximately
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$300,000. This minor change is due to the U.S. dollar's position against
the British pound and the Canadian dollar remaining substantially unchanged
since the end of 1993. The change in exchange rates does not have a
materially adverse effect on the cash flow of the international operations.
In October 1992, the Company sold its interest in its foreign affiliate in
India, receiving $693,000 in net proceeds, which was used to reduce debt.
A loss of $1,041,000 net of the 1992 equity in earnings of $165,000 was
recorded at September 30, 1992 in anticipation of this transaction. The
Company's accounts reflect its share of these results at the close of the
fiscal year of this affiliate as other income.
ITEM 2. Properties
The Company conducts its domestic operations from facilities having an
aggregate floor space of approximately 1,176,000 square feet. The domestic
total includes principal facilities in Niles, Michigan (456,000 square
feet); Stillwater, Oklahoma (314,000 square feet); Corbin, Kentucky
(225,000 square feet); Mishawaka, Indiana (78,000 square feet); Knoxville,
Tennessee (50,000 square feet); and Clearfield, Utah (53,000 square feet).
The Knoxville and Clearfield facilities were leased in 1993 for five-year
terms with renewal options.
The Company also operates from principal facilities in England (260,000
square feet) and Canada (107,000 square feet).
The majority of the Company's plants are of modern construction and the
remaining older plants are well maintained and considered adequate for
their current use. Manufacturing of wire and wire related products is
conducted at all Company facilities. The Company's plants generally are
operated on a multishift basis and, while particular plants may be
operating at capacity levels, overall the Company's facilities are adequate
to provide for a significant increase in unit volume due to the Company's
ability to redistribute production of similar products between Company
facilities with minimal cost or inconvenience.
ITEM 3. Legal Proceedings
The Company is not involved in any material pending legal proceedings.
ITEM 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders since the last
annual meeting held January 27, 1994.
ITEM 4A. Executive Officers of the Registrant (Furnished in accordance
with Item 401(b) of Regulation S-K, pursuant to General
Instruction G(3) of Form 10-K)
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The following table sets forth certain data concerning the Executive
Officers of the Registrant, all of whom are elected annually by the Board
of Directors. Some of the Officers of the Registrant also serve as
Directors or Officers of the subsidiaries.
<TABLE>
<CAPTION>
___________________________________________________________________________
Date Assumed
Name Age Present Position Present Position
___________________________________________________________________________
<S> <C> <C> <C>
Michael B. Savitske 53 President and Chief Executive Officer 1989
William D. Grafer 49 Vice President, Finance 1987
David L. Lawrence 47 Treasurer, Assistant Secretary 1987
Rene J. VanSteelandt 56 General Counsel and Secretary 1991
</TABLE>
All of the above-named officers of the Registrant have been employees of
the Company for more than five years.
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PART II.
ITEM 5.Market for the Registrant's Common Equity and Related Shareholder
Matters
Common stock market prices, information on stock exchanges and number of
shareholders is included in Note 14 of Notes to Consolidated Financial
Statements in Item 8, "Financial Statements and Supplementary Data" section
of this Report (incorporated herein by this reference). No dividends were
paid during fiscal 1994 or 1993, nor during the portion of fiscal 1995
prior to filing of this Report. Under current loan agreements, the Company
is restricted from paying any dividends. Future dividends will be based on
the Company's financial performance.
ITEM 6. Selected Financial Data (In thousands, except per share and
employee data)
The following selected financial data are derived from the consolidated
financial statements of the Company. The data should be read in conjunction
with the consolidated financial statements, related notes and other
financial information included herein. Specifically, discussions regarding
accounting changes, divestitures, and other related information that
affects the comparability of this data can be found in Items 7, 8, and 14
herein.
<TABLE>
<CAPTION>
___________________________________________________________________________
1994 1993 1992 1991 1990
___________________________________________________________________________
<S> <C> <C> <C> <C> <C>
For the Year:
Net sales $ 217,916 $208,254 $ 215,133 $ 232,695 $271,726
Operating profit
(loss) $ (1,110) $ (1,055) $ 44 $ (15,783) $
(11,256)
Net earnings (loss)
before effect of
accounting change $ (4,625) $ (4,701) $ (5,885) $ (22,885) $
(19,871)
Net earnings (loss) $ (4,625) $(53,377) $ (5,885) $ (22,885) $
(19,871)
At Year-End:
Shareholders' equity $ (28,266) $(24,827) $ 25,320 $ 29,237 $ 51,660
Net current assets $ 6,263 $ (39) $ 1,483 $ 4,740 $ 24,406
Total assets $ 108,685 $103,976 $ 113,939 $ 119,009 $161,323
Long-term debt $ 34,328 $ 24,100 $ 29,346 $ 37,338 $ 47,909
Ratio of current
assets to current
liabilities 1.1 : 1.0 1.0 : 1.0 1.0 : 1.0 1.1 : 1.0 1.4 : 1.0
Common shares
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outstanding 5,366 5,359 4,502 4,479 4,482
Average common
shares outstand-
ing used in per
share calculations 5,365 5,085 4,379 4,276 4,190
Number of employees 1,282 1,248 1,460 1,473 2,079
Per Common Share:
Earnings (loss) before effect of
accounting change $ ( .86) $( .92) $ (1.34) $ (5.36) $ (4.74)
Net earnings (loss) $ ( .86) $ (10.50) $ (1.34) $ (5.36) $
(4.74)
Dividends declared $ .00 $ .00 $ .00 $ .00 $ .00
</TABLE>
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ITEM 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations (Dollars in thousands except share data)
Results of Operations
Net sales for the year of $217,916 were 4.6% above 1993, as sales of air
bag inflator filtration products increased 68% over 1993 due to the
significant growth of that market segment and the Company's position as the
leading supplier of those materials in North America. The Company's weld
wire product lines experienced 15% growth over 1993 due primarily to
improving North American automotive sales. These increases were offset by
a decline in hose wire sales as the Company ceased the manufacture of hose
wire in North America during 1993, and a decline in bead wire sales due to
the impact of the work stoppage at Columbiana early in 1994 and work
stoppages at customer facilities at the end of 1994.
Net sales for 1993 of $208,254 were 3.2% below 1992 and 10.5% below 1991
due to business units sold during 1992 and 1991. During 1993, the Company
experienced increased demand for its air bag materials and weld wire
product lines. 1993 sales in those product lines increased 51% and 11%,
respectively, over 1992. Sales of hose wire decreased 22% due to the work
stoppage in Columbiana, Alabama and subsequent discontinuation of hose wire
plating in North America. During 1992, sales for remaining operations
increased 6% due to increased sales of air bag filtration materials and
welding wire. Growth in both products is expected to continue for at least
the next several years.
Over the past several years, the Company's strategy has been to focus on a
core wire business and to develop the air bag filtration materials
business. This strategy has led to the divestiture of the non-core
specialty wire business and all of its non-wire related businesses.
Proceeds from the divestitures have been utilized to fund investment in the
remaining business and to reduce debt. Since September 30, 1990, debt has
been reduced $15,710 and the air bag filtration materials sales have
increased 161%. The effect of the divestiture activities on the Company's
sales and gross margins is shown in the following table:
<TABLE>
<CAPTION>
___________________________________________________________________________
1994 1993 1992 1991 1990
___________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Net Sales
Remaining operations $216,937 $ 197,418 $ 193,863 $176,517 $185,346
Divested operations 979 10,836 21,270 56,178 86,380
Total $217,916 $ 208,254 $ 215,133 $232,695 $271,726
Gross Profit
Remaining operations $ 25,069 $ 24,283 $ 24,314 $ 16,215 $ 15,649
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Divested operations (1,213) (278) 1,138 6,579 12,781
Total $ 23,856 $ 24,005 $ 25,452 $ 22,794 $ 28,430
Gross Profit %
Remaining operations 11.6% 12.3% 12.5% 9.2% 8.4%
Divested operations (123.9)% (2.6)% 5.4% 11.7% 14.8%
Total 10.9% 11.5% 11.8% 9.8% 10.5%
</TABLE>
Gross profit margins change due to several factors. For the Company, the
most significant factor is the level of sales and production. As production
increases, a relatively lower level of fixed costs is associated with each
unit, and the gross profit percentage increases. Similarly, as volume
falls, fewer units are available to cover the fixed costs of manufacturing
and the profit percentage decreases. In addition to volume, changes in
product mix, selling prices, and costs also affect the gross margins.
Although it would appear that prior to 1992 the divested businesses were
more profitable than the remaining operations, these businesses
increasingly required substantially higher selling and administrative
expense and significant levels of working capital that, even considering
the higher gross margins, resulted in lower net returns. The margin effect
of divesting these businesses is shown in the table above. The effect of
the increased selling and administrative costs of the divested businesses
is reflected in the divested operations line in the table on page 11.
During 1993, the Company experienced work stoppages by the United
Steelworkers of America at the Niles, Michigan; Corbin, Kentucky; and
Columbiana, Alabama plants. The Niles and Corbin strikes were settled
during 1993 with modified health care benefits similar to the health
benefits for salaried employees. The Columbiana plant was struck on June
1, 1993. The plant operated during the remainder of 1993 and through May
1994 with replacement workers and personnel from other Company facilities.
The Company continued to supply product during the work stoppages.
Additional costs including security services, additional wages, and air
freight were approximately $4,500 for the three work stoppages in 1993. In
addition, as a result of the work stoppage in Columbiana, the Company
discontinued hose wire plating in North America in 1993 and wrote down the
value of its hose wire plating equipment by $909.
During 1994, the additional costs of operating the Columbiana facility
including security services, additional wages, and freight were
approximately $4,266. In addition, during 1994, the Company provided
$4,870 for the closure of the Columbiana plant. The closure provision is
included in selling and administrative expense as noted on page 11.
During 1992, margins improved based upon the higher sales of the Company's
core wire products and its air bag filtration materials business.
The political changes that occurred in the Eastern Bloc countries had a
negative effect on business activity, and a general slowdown in the
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Company's Western European markets caused a 10% decline in volume of major
product lines between 1990 and 1992. This decline caused capacity in
international operations to be under-utilized in 1992. During 1993, sales
to other worldwide markets from international operations increased 8%,
resulting in better capacity utilization and improved operating results.
During 1994, sales from international operations decreased 5% as new
worldwide capacity was added in Copperply and bead wire and aggressive
pricing affected bead and hose wire.
In recent years, the Company has not been able to raise prices in line with
inflation and rising raw material costs due to the effects of worldwide
overcapacity in the Company's major product lines and competitive pressure
in the Company's automotive markets. Since 1989, inflation as measured by
the Consumer Price Index has risen 20%, while average selling prices have
risen only 7%. Had selling prices increased 20%, sales in 1994 would have
been approximately $246,000.
In 1993, the Company sold the Telford Wire Division and Taydor Engineers
business units in England. Proceeds of $1,344 were used to reduce its
United Kingdom borrowings.
In 1993, environmental expense provisions totaling $3,600 were recorded to:
(1) decommission hose wire plating equipment and dispose of hazardous
materials normally used in the plating process, (2) provide for soil
remediation at an unused fill site, and (3) provide for the closure of
waste water surface impoundments which are no longer in use. In 1994,
additional environmental expense provisions of $700 relating to the
disposal of hazardous materials normally used in the hose wire plating
process were recorded.
During 1994 and 1993, the Company provided $2,832 and $4,651, respectively,
for the estimated cost of compliance with environmental regulations and
continuing modifications in operating requirements. The majority of the
1994 provisions were made in the Company's first quarter and are related to
the closing of the Columbiana facility. The majority of the 1993
provisions were made in the Company's fourth quarter as a result of an
expansion of clean-up operations and changes in estimated costs to
complete. In addition to the amounts charged to earnings, $165 and $142 of
costs were capitalized in the respective years. The Company's actual
environmental related cash outlays for 1994 and 1993 were $2,816 and
$1,753, respectively, of which $285 and $282 were spent on the Clifton, New
Jersey property.
The Company has previously been designated a potentially responsible party
(PRP) by the Environmental Protection Agency (EPA) for four actual or
potential superfund sites, all of which have in excess of twenty other
PRP's. The Company has completed or is undertaking all investigative work
requested or required by the appropriate governmental agencies or by
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relevant statutes, regulations, or local ordinances at minimal out-of-
pocket costs. In one instance, the Company has no record of participation
at the site. In two instances, the Company's records indicate that it had
only de minimus involvement. The Company has reviewed its involvement at
the fourth site and has previously accrued $300 for its share of estimated
site remediation based upon all information currently available. The
Company does not believe future costs for these sites will have a
materially adverse effect on the consolidated financial condition of the
Company or its consolidated results of operations.
The Company has reviewed its current projects which are expected to be
completed in 1995 and all environmental regulations and acts to ensure
continuing compliance. In 1995, the Company expects to spend $290 on the
Clifton, New Jersey project. Future cash outlays of approximately $2,469
will be needed prior to sale of the property. These amounts have already
been accrued for financial statement purposes. Additionally, the Company
expects to spend $1,925 on environmentally related capital and operational
projects, of which $625 will be charged against 1995 earnings.
In 1989, in response to expected market changes, the Company adopted a
strategy that included, among other things, the decision to exit non-
strategic and/or non-profitable businesses and to continually adapt general
and administrative cost levels to the changing business.
In 1994, 1993, and 1992, $6,955, $2,390, and $2,677, respectively, the net
cost of restructuring the Company in those years, including net loss on
sale of fixed assets and product lines of $0, $196, and $1,451,
respectively; the write-off of nonproductive facilities and obsolete
inventory of $4,219, $909, and $681, respectively; severance costs of the
salaried and hourly workforce, and provision for transferring manufacturing
of certain product lines between plants, is included in selling and
administrative costs. The 1994 net cost of restructuring also included
$1,700 for the Columbiana plant environmental stabilization. The Company
will incur no further material cash outflows related to the restructuring.
The following summary shows the changing level of selling and
administrative expense and identifies selling and administrative expense
directly attributable to divested operations and amounts attributable to
restructuring activities.
<TABLE>
<CAPTION>
___________________________________________________________________________
1994 1993 1992 1991 1990
___________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Selling and Administrative Expense:
Remaining operations $ 18,011 $ 22,549 $ 21,970 $ 20,813 $ 26,395
Divested operations - 121 761 4,987 7,732
- 15 -
<PAGE>
Restructuring costs 6,955 2,390 2,677 12,777 5,559
Total $ 24,966 $ 25,060 $ 25,408 $ 38,577 $ 39,686
As a Percent of Sales
Remaining operations 8.3% 11.4% 10.6% 10.7% 12.7%
Divested operations - 22.1% 9.0% 13.6% 12.2%
Total 11.5% 12.0% 11.8% 16.6% 14.6%
</TABLE>
The net effect of all the above elements is seen in the Company's operating
profit (loss).
<TABLE>
<CAPTION>
___________________________________________________________________________
1994 1993 1992 1991 1990
___________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Operating Profit (Loss)
Remaining operations $ 7,058 $ 1,547 $ 2,739 $ (2,968) $ (7,204)
Divested operations (1,213) (212) (18) (38) 1,507
Restructuring costs (6,955) (2,390) (2,677) (12,777) (5,559
Total $ (1,110) $ (1,055) $ 44 $(15,783) $ (11,256)
</TABLE>
Operating profit by Geographic Area is presented in Note 13 of Notes to
Consolidated Financial Statements in Item 8.
Interest expense, including capitalized interest, increased in 1994 due to
higher interest rates. This reverses the trend which the Company had
experienced since 1990.
<TABLE>
<CAPTION>
___________________________________________________________________________
1994 1993 1992 1991 1990
___________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Interest expense $ 3,885 $ 3,742 $ 4,990 $ 6,653 $ 6,366
Capitalized interest $ 168 $ 100 $ 50 $ 166 $ 700
Average borrowings $ 36,572 $ 37,240 $ 45,743 $ 56,760 $ 58,293
Average interest rate 11.1% 10.3% 11.0% 12.0% 12.1%
</TABLE>
Other income in 1994 is primarily the Company's share of profits in North
America Wire Weaving Company.
In 1994 and 1993, income taxes as a percentage of pre-tax loss vary from
the domestic statutory rate primarily due to the Company's inability to
record a tax benefit on losses.
The operating loss tax benefits of $1,558 and $18,496 in 1994 and 1993,
respectively, can be used to reduce future income tax expense.
Financial Condition
The Company experienced net losses of $4,625, $53,377, $5,885, and $22,885
in 1994, 1993, 1992, and 1991, primarily due to changes in accounting,
- 16 -
<PAGE>
restructuring charges, and environmental provisions. Working capital
increased $6,302 in 1994 as current assets increased to support the higher
sales in air bag inflator filtration materials and decreased $1,522 in 1993
due to the net losses and increased reserves associated with restructuring
activities and environmental projects, as well as the reclassification of
certain debt to current.
Net cash from 1994 operations of $1,088 was due primarily to the increased
profitability after considering all non-cash charges to earnings. This was
offset by the $1,786 increase in Inventories necessary to support the
Company's growing weld wire and air bag inflator material business and a
$5,571 decrease in Accounts Payable and Accrued Expenses. The $9,178 of
net cash generated from new financing, along with the net cash from
operations and $256 of proceeds from the sale of certain equipment, was
used to invest $10,489 in property, plant, and equipment.
Net cash from operations was $9,070 and $6,057 in 1993 and 1992,
respectively, due primarily to the $6,015 increase in Accounts Payable and
actual operating results. Of the 1993 and 1992 cash flow from operations
of $15,127, $7,314 was invested in property, plant, and equipment, and
$7,813 was used for debt reduction. During 1994, the Company completed
its plan to exit non-profitable and non-strategic product lines and
subsidiaries. In accordance with this plan, certain facilities and product
lines were sold in 1993 and 1992, and the proceeds of $2,037 were used for
additional debt reduction. During 1993, the Company sold the Telford Wire
Division, using the proceeds to reduce debt. In October 1992, the Company
sold its interest in the Indian affiliate and the Taydor Engineers business
unit, using the proceeds to reduce debt. During 1993 and 1992, the Company
reduced its debt by $12,182.
During 1994, 1993, and 1992, the Company invested $17,803 in property,
plant and equipment. Approximately one-third of this amount relates to the
Company's commitment to automotive air bag inflator filters and filter
media and fiber material for rechargeable battery electrodes. The Company
expects to make investments for inflator filters and filter media in 1995
based upon increased demand for air bag inflators in 1996 model year
automobiles. The Company's total capital expenditures for 1995 are expected
to be $7,300, primarily for projects to add filtration material and weld
wire capacity and improve quality and operating efficiencies. All debt
financing sources available to the Company are fully utilized. While
divestiture activities and debt reductions have affected the Company's cash
flow in recent years, it expects that improved results of operations from
restructuring activities will fund future expansion of working capital and
productive capacity. With the completion of the restructuring activities,
the Company was able to obtain new long- and short-term financing in 1994
and is confident that adequate long- and short-term financing will be
available in the future.
- 17 -
<PAGE>
<TABLE>
<CAPTION>
___________________________________________________________________________
1994 1993 1992 1991 1990
___________________________________________________________________________
<S> <S> <C> <C> <C> <C>
Current ratio 1.1 : 1.0 1.0 : 1.0 1.0 : 1.0 1.1 : 1.0 1.4 : 1.0
Total debt to total
capital,excluding SFAS
No. 106 adjustment 65.2% 57.4% 62.9% 61.3% 54.8%
Long-term debt to total
capital, excluding
SFAS No. 106 adjustment 52.5% 41.8% 43.0% 49.5% 41.9%
</TABLE>
The Company will continue to pursue cost reduction activities in both its
domestic and international operations, including personnel reductions and
costs associated with administering its employee benefit programs.
ITEM 8. Financial Statements and Supplementary Data
The Report of Independent Auditors, Consolidated Financial Statements and
Supplementary Schedules are set forth on pages 15 to 37 of this Report and
are incorporated herein by reference.
ITEM 9. Disagreements on Accounting and Financial Disclosure
Not applicable.
- 18 -
<PAGE>
PART III
ITEM 10. Directors and Executive Officers of the Registrant Identification
of Directors
Information in respect of Directors as set forth under the caption
"Election of Directors" in the annual Proxy Statement relating to the
Annual Meeting of Shareholders scheduled for January 26, 1995 is
incorporated herein by reference.
In respect of information as to the Company's Executive Officers, see the
caption "Executive Officers of the Registrant" at the end of Part I of this
report.
ITEM 11. Executive Compensation
The information set forth under the caption "Organization and Remuneration
of the Board" and the information relating to Executive Officers'
compensation in the annual Proxy Statement relating to the Annual Meeting
of Shareholders scheduled for January 26, 1995 is incorporated herein by
reference.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management
The information set forth under the captions "Stock Ownership of Certain
Beneficial Owners and Management" and "Election of Directors" in the annual
Proxy Statement relating to the Annual Meeting of Shareholders scheduled
for January 26, 1995 is incorporated herein by reference.
ITEM 13. Certain Relationships and Related Transactions
The information set forth under the caption "Information Regarding Other
Transactions" in the annual Proxy Statement relating to the Annual Meeting
of Shareholders scheduled for January 26, 1995 is incorporated herein by
reference.
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. Financial Statements and Schedules
The financial statements and schedules listed in the
accompanying Index to Consolidated Financial Statements and
Schedules are filed as part of this report.
- 19 -
<PAGE>
2. Exhibits
The exhibits listed in the accompanying Exhibit Index and
required by Item 601 of Regulation S-K (numbered in accordance
with Item 601 of Regulation S-K) are filed or incorporated by
reference as part of this Report.
(b) There were no reports on Form 8-K filed during the three months
ended September 30, 1994.
- 20 -
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, National-Standard Company has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
NATIONAL-STANDARD COMPANY
/s/ Michael B. Savitske
Michael B. Savitske
President and Chief Executive Officer,
Director
/s/ William D. Grafer
William D. Grafer
Vice President, Finance
(Principal Financial and Accounting Officer)
Dated: December 1, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
HAROLD G. BERNTHAL Director )
DAVID F. CRAIGMILE Director )-By: /s/ Rene J. VanSteelandt
JOHN E. GUTH, JR. Chairman of the Board ) Rene J. VanSteelandt
ERNEST J. NAGY Director ) Attorney-in-Fact
CHARLES E. SCHROEDER Director )
DONALD F. WALTER Director ) December 1, 1994
- 21 -
<PAGE>
NATIONAL-STANDARD COMPANY
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
___________________________________________________________________________
Page Reference
in Report on
Form 10-K
___________________________________________________________________________
Consolidated Statements of Operations for the years ended
September 30, 1994, 1993, and 1992 16
Consolidated Statements of Shareholders' Equity for the
years ended September 30, 1994, 1993, and 1992 17
Consolidated Balance Sheets at September 30, 1994 and 1993 18
Consolidated Statements of Cash Flows for the years ended 19
September 30, 1994, 1993, and 1992
Notes to Consolidated Financial Statements 20-31
Report of Independent Auditors 32
Schedules:
V. Property, Plant and Equipment 33
VI. Accumulated Depreciation of Property,
Plant and Equipment 34
VIII. Valuation and Qualifying Accounts 35
IX. Short-Term Borrowings 36
X. Supplementary Income Statement Information 37
Schedules other than those listed above have been omitted from this Annual
Report because they are not required, are not applicable, or the required
information is included in the consolidated financial statements or the
notes thereto.
- 22 -
<PAGE>
NATIONAL-STANDARD COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands Except Share Data)
<TABLE>
<CAPTION>
___________________________________________________________________________
Year Ended September 30
1994 1993 1992
___________________________________________________________________________
<S> <C> <C> <C>
Net sales . . . . . . . . . . . . . . . $217,916 $208,254 $ 215,133
Cost of sales . . . . . . . . . . . . 194,060 184,249 189,681
Gross profit . . . . . . . . . . . . . 23,856 24,005 25,452
Selling and administrative expenses . . 24,966 25,060 25,408
Operating profit (loss) . . . . . (1,110) (1,055) 44
Interest expense . . . . . . . . . . . (3,885) (3,742) (4,990)
Other income (expense), net . . . . . . 426 96 (929)
Loss before income taxes and effect
of accounting change . . . . . . (4,569) (4,701) (5,875)
Income taxes . . . . . . . . . . . . . 56 - 10
Loss before effect of accounting
change . . . . . . . . . . . . . (4,625) (4,701) (5,885)
Effect of accounting change . . . . . . - (48,676) -
Net loss . . . . . . . . . . . . . . . $ (4,625) $(53,377) $ (5,885)
Loss per share before effect of
accounting change . . . . . . . . $ (.86) $ ( .92) $ (1.34)
Loss per share . . . . . . . . . . . . $ (.86) $ (10.50) $ (1.34)
</TABLE>
See accompanying notes to consolidated financial statements.
- 23 -
<PAGE>
NATIONAL-STANDARD COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Dollars in Thousands except Share Data)
<TABLE>
<CAPTION>
_____________________________________________________________________________________________________
Excess of
Unamor- Additional
Note Re- tized Pension
ceivable, Pre- Value of Liability
Retained Cumulative Trea- ESOP paid Restric- Over
Common Earnings Translation sury Common ESOP ted Unrecognized
Stock (Deficit) Adjustment Stock Stock Expense Stock Service Cost
____________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
September 30, 1991 $24,021 $10,688 $ (674) $ (88) $(2,168) $(875) $(37) $(1,630)
Restricted stock
award activity 75 (5) (69)
ESOP payments 999
Prepaid ESOP
expense amortization 700
Restricted stock
amortization 44
Adjustment for foreign
currency translation 267
Adjustment of pension
liability (43)
Net loss for 1992 (5,885)
____________________________________________________________________________________________________
Balance at
September 30, 1992 $24,096 $ 4,803 $ (407) $ (93) $(1,169) $(175) $(62) $(1,673)
- 24 -
<PAGE>
____________________________________________________________________________________________________
Excess of
Unamor- Additional
Note Re- tized Pension
ceivable, Pre- Value of Liability
Retained Cumulative Trea- ESOP paid Restric- Over
Common Earnings Translation sury Common ESOP ted Unrecognized
Stock (Deficit) Adjustment Stock Stock Expense Stock Service Cost
____________________________________________________________________________________________________
Restricted stock award
activity (3)
ESOP payments 1,152
Prepaid ESOP expense
amortization 175
Restricted stock
amortization 20
Stock contributed to
pension trust 2,745
Stock issuance 91 29
Adjustment for foreign
currency translation (2,018)
Adjustment of pension
liability 1,039
Net loss for 1993 (53,377)
____________________________________________________________________________________________________
Balance at
September 30, 1993 $26,932 $(48,574) $(2,425) $ (67) $ (17) $ - $(42) $ (634)
- 25 -
<PAGE>
____________________________________________________________________________________________________
Excess of
Unamor- Additional
Note Re- tized Pension
ceivable, Pre- Value of Liability
Retained Cumulative Trea- ESOP paid Restric- Over
Common Earnings Translation sury Common ESOP ted Unrecognized
Stock (Deficit) Adjustment Stock Stock Expense Stock Service Cost
____________________________________________________________________________________________________
Restricted stock award
activity 68 (18) (62)
ESOP payments 17
Restricted stock
amortization 33
Deferred debt discount 384
Stock issuance 1
Adjustment for foreign
currency translation 323
Adjustment of pension
liability 440
Net loss for 1994 (4,625)
____________________________________________________________________________________________________
Balance at
September 30, 1994 $27,384 $(53,199) $(2,102) $ (84) $ - $ - $(71) $ (194)
____________________________________________________________________________________________________
____________________________________________________________________________________________________
</TABLE>
See accompanying notes to consolidated financial statements.
- 26 -
<PAGE>
NATIONAL-STANDARD COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands except Share Data)
<TABLE>
<CAPTION>
September 30
1994 1993
<S> <C> <C>
Assets
Current assets:
Cash . . . . . . . . . . . . . . . . . . . . . $ 378 $ 339
Receivables, less allowance for doubtful accounts
($398 and $386, respectively) . . . . . . . 24,682 24,842
Inventories . . . . . . . . . . . . . . . . . . 25,146 24,619
Other current assets . . . . . . . . . . . . . . 4,837 4,104
Total current assets . . . . . . . . . . . . . . 55,043 53,904
Property, plant and equipment, net . . . . . . . . 42,862 41,559
Other assets . . . . . . . . . . . . . . . . . . . 10,780 8,513
$108,685 $103,976
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable . . . . . . . . . . . . . . . $ 29,041 $ 31,342
Employee compensation and benefits . . . . . . 1,780 2,073
Accrued pension . . . . . . . . . . . . . . . . 115 106
Other accrued expenses . . . . . . . . . . . . 6,599 7,278
Current accrued postretirement benefit cost . . 3,000 4,150
Notes payable to banks and current portion
of long-term debt . . . . . . . . . . . . . . 8,245 8,994
Total current liabilities . . . . . . . . . . . 48,780 53,943
Other long-term liabilities . . . . . . . . . . . . 5,818 5,481
Long-term debt . . . . . . . . . . . . . . . . . . 34,328 24,100
Accrued postretirement benefit cost . . . . . . . . 48,025 45,279
Shareholders' equity:
Common stock - $.01 par value.
Authorized 25,000,000 shares; issued 5,376,526
and 5,368,026 shares, respectively . . . 27,384 26,932
Preferred stock - $1.00 par value.
Authorized 600,000 shares; issued none . . - -
Retained earnings (deficit) . . . . . . . . . . (53,199) (48,574)
Cumulative translation adjustment . . . . . . . ( 2,102) (2,425)
Treasury stock, at cost; 10,813 and 8,983 shares,
respectively . . . . . . . . . . . . . . . . . ( 84) (67)
Note receivable, ESOP common stock . . . . . . - (17)
Unamortized value of restricted stock . . . . . ( 1) (42)
Excess of additional pension liability over
unrecognized prior service cost . . . . . . . ( 94) (634)
(28,266) (24,827)
$108,685 $103,976
</TABLE>
See accompanying notes to consolidated financial statements.
- 27 -
<PAGE>
NATIONAL-STANDARD COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands except Share Data)
<TABLE>
<CAPTION>
Year Ended September 30
1994 1993 1992
<S> <C> <C> <C>
Operating Activities:
Net earnings (loss) . . . . . . . . . . . $ (4,625) $(53,377) $ (5,885)
Non-cash charges (credits) to earnings:
Depreciation and amortization . . . . . 6,552 6,524 7,223
Prepaid ESOP expense amortization . . . - 175 700
Postretirement benefit transition obligation - 48,676 -
Loss on divested operations and asset
writedowns . . . . . . . . . . . . . . 4,254 196 1,451
Changes in short-term assets and liabilities,
net of dispositions:
Receivables . . . . . . . . . . . . 160 1,967 (2,082)
Inventories . . . . . . . . . . . . (1,786) (207) 1,722
Other current assets . . . . . . . . (733) 7 (987)
Accounts payable . . . . . . . . . . (2,301) 3,918 2,097
Employee compensation and benefits,
accrued pension, and other accrued
expenses . . . . . . . . . . . . (3,270) (2,258) 2,126
Currency translation effect on short-
term assets and liabilities . . . 812 (2,033) (244)
Changes in other long-term assets and
liabilities . . . . . . . . . . . . . 2,025 5,482 (64)
Net cash provided by operating
activities . . . . . . . . . . . 1,088 9,070 6,057
Investing Activities:
Capital expenditures . . . . . . . . . (10,489) (4,546) (2,768)
Divestiture proceeds, net . . . . . . . - 2,037 -
Disposal of property, plant and
equipment . . . . . . . . . . . . . 256 - 143
Net cash provided by (used for)
investing activities . . . . . . (10,233) (2,509) (2,625)
Financing Activities:
Increases in debt . . . . . . . . . . . 40,434 - 368
Reductions in debt . . . . . . . . . . (31,256) (8,791) (3,759)
Purchases of treasury stock . . . . . . (11) - (1)
Decrease in notes receivable due
from ESOP . . . . . . . . . . . . . . 17 1,152 999
Net cash used for financing activities 9,184 (7,639) (2,393)
Net increase (decrease) in cash . . . . 39 (1,078) 1,039
Cash at beginning of year . . . . . . . 339 1,417 378
Cash at end of year . . . . . . . . . . $ 378 $ 339 $ 1,417
Supplemental Disclosures:
- 28 -
<PAGE>
Interest paid . . . . . . . . . . . . . $ 4,480 $ 3,842 $ 4,333
Income taxes paid (received) . . . . . $ 56 $ - $ (238)
</TABLE>
See accompanying notes to consolidated financial statements.
- 29 -
<PAGE>
NATIONAL-STANDARD COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands except Share Data)
1. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Principles of Consolidation - The consolidated financial statements
include the Company and all its subsidiaries ("Company"). Intercompany
accounts and transactions have been eliminated in the consolidated
financial statements. The Company's 50 percent investment in a domestic
joint venture is carried at equity in underlying net assets. The
Company's share of operations of this affiliated company is not
material.
Revenue Recognition - The Company's policy is to record sales when the
product is shipped.
Translation of Currencies - The Company complies with the provisions of
Statement of Financial Accounting Standards (SFAS) No. 52, "Foreign
Currency Translation." In the application of this accounting standard,
exchange adjustments resulting from foreign currency transactions are
recognized currently in income. Adjustments resulting from the
translation of financial statements are reflected as a separate
component of shareholders' equity.
Inventories - Inventories are stated at lower of cost or replacement
market. Cost for the material content of domestic steel inventories is
determined on the last-in, first-out (LIFO) method; the cost for other
inventories is determined on the first-in, first-out (FIFO) method.
Property, Plant and Equipment - Property, plant and equipment are
stated at cost less accumulated depreciation. Depreciation is computed
on a straight-line basis over the estimated useful lives of the related
assets. For tax purposes, depreciation has generally been computed on a
straight-line basis over prescribed lives.
Research and Development - Research and development costs are expensed
currently. The Company expended $959, $982 and $994 in 1994, 1993 and
1992, respectively, on research and development activities.
Earnings Per Share - Earnings per share are based on the average number
of shares of common stock outstanding during the year plus common stock
equivalents for the dilutive effect of shares of common stock issuable
upon the exercise of certain stock options. Nonleveraged unallocated
shares in the Company Employee Stock Ownership Plan are not considered
outstanding for purposes of calculating earnings per share. Common
shares used in calculating earnings per share for 1994, 1993, and 1992
were 5,365,000, 5,085,000, and 4,379,000, respectively.
- 30 -
<PAGE>
Statement of Cash Flows - For purposes of the statement of cash flows,
the Company considers all highly liquid debt instruments purchased with
a maturity of three months or less to be cash equivalents.
Income Taxes - In February 1992, the Financial Accounting Standards
Board (FASB) issued SFAS No. 109, "Accounting for Income Taxes." SFAS
No. 109 requires a change from the deferred to the liability method of
computing deferred income taxes. Under the liability method, deferred
income taxes are generally determined based on the difference between
the financial statement and tax bases of assets and liabilities using
enacted tax rates in effect in the years in which the differences are
expected to reverse. Deferred tax assets are recorded when it is more
likely than not that such tax benefits will be realized.
Effective October 1, 1992, the Company elected early adoption of SFAS
No. 109. The adoption of SFAS No. 109 had no effect on the financial
statements of the Company.
Postretirement Benefits Other than Pensions - In December 1990, the
FASB issued SFAS No. 106, "Employers' Accounting for Postretirement
Benefits Other than Pensions." SFAS No. 106 requires that the cost of
postretirement benefits be recognized during an employee's years of
service versus on a pay-as-you-go basis upon retirement. SFAS No. 106
was not required to be adopted by the Company until fiscal 1994;
however, early adoption was elected effective October 1, 1992.
Reclassification - Certain 1993 and 1992 amounts in the Consolidated
Financial Statements have been reclassified to conform with 1994
presentation.
2. INVENTORIES
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Finished goods . . . . . . . . . . . . . . . . $ 2,601 $ 1,688
Work in process . . . . . . . . . . . . . . . . 14,400 13,896
Raw material (including certain partially
processed materials) . . . . . . . . . . . . 8,145 9,035
$ 25,146 $ 24,619
</TABLE>
The material content of domestic steel inventories amounting to $13,854
and $10,877 at September 30, 1994 and 1993, respectively, is valued on
a LIFO basis. Had the FIFO method been used, inventory would have been
$4,009 and $3,909 higher than that reported at September 30, 1994 and
1993, respectively.
3. PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
Cost: 1994 1993
<S> <C> <C>
Land . . . . . . . . . . . . . . . . . . . . . $ 331 $ 344
Land improvements . . . . . . . . . . . . . . . 1,943 2,453
- 31 -
<PAGE>
Buildings . . . . . . . . . . . . . . . . . . . 22,410 24,777
Machinery and equipment . . . . . . . . . . . . 108,138 117,313
Construction in progress . . . . . . . . . . . 8,326 3,911
141,148 148,798
Less accumulated depreciation . . . . . . . . . 98,286 107,239
$ 42,862 $ 41,559
</TABLE>
The Company capitalized interest cost of $168 in 1994 and $100 in 1993
with respect to qualifying construction projects. Total interest cost
incurred before recognition of the capitalized amounts was $4,053 and
$3,842 in 1994 and 1993, respectively.
4. RETIREMENT BENEFITS
The Company and its subsidiaries have several pension plans covering
substantially all employees, including certain employees in foreign
countries. The Company's policy is to fund the net periodic pension
cost accrued for each plan year, but not more than the maximum
deductible contribution nor less than the minimum required
contribution.
The following table sets forth the pension plans' funded status and
amounts recognized in the Company's consolidated balance sheet at
September 30, 1994 and 1993:
<TABLE>
<CAPTION>
Assets Exceed Accumulated
Accumulated Benefits Exceed
Benefits Assets
<S> <C> <C>
1994
Actuarial present value of benefit obligations:
Vested benefit obligation . . . . . . . . . . $ 62,020 $ 2,915
Accumulated benefit obligation . . . . . . . $ 62,786 $ 3,061
Projected benefit obligation for service
rendered to-date . . . . . . . . . . . . . . $ 67,587 $ 3,061
Plan assets at fair value . . . . . . . . . . . 88,758 2,828
Plan assets in excess of (less than)
projected benefit obligation . . . . . . . . 21,171 (233)
Unrecognized net (gain) loss from past
experience, different from that assumed . . . (13,294) 194
Prior service cost not yet recognized in
net periodic pension cost . . . . . . . . . . 238 147
Unrecognized net asset at October 1, 1985
being recognized over 15 years . . . . . . . (699) 41
Unrecognized net asset for the United Kingdom
plan at October 1, 1989 being recognized
over 12.6 years . . . . . . . . . . . . . . . (4,374) -
Additional minimum liability . . . . . . . . . - (382)
- 32 -
<PAGE>
(Accrued) prepaid pension cost . . . . . . . . $ 3,042 $ (233)
Intangible asset . . . . . . . . . . . . . . . $ - $ 188
Charge to equity (excess of additional
pension liability over unrecognized
prior service cost) . . . . . . . . . . . . $ - $ 194
1993
Actuarial present value of benefit obligations:
Vested benefit obligation . . . . . . . . . $ 62,993 $ 5,881
Accumulated benefit obligation . . . . . . . $ 63,842 $ 6,346
Projected benefit obligation for service
rendered to-date . . . . . . . . . . . . . . $ 68,192 $ 6,346
Plan assets at fair value . . . . . . . . . . . 83,802 5,621
Plan assets in excess of (less than)
projected benefit obligation . . . . . . . . 15,610 (725)
Unrecognized net (gain) loss from past
experience, different from that assumed . . (9,599) (797)
Prior service cost not yet recognized
in net periodic pension cost . . . . . . . . 208 510
Unrecognized net asset at October 1, 1985
being recognized over 15 years . . . . . . . (665) (116)
Unrecognized net asset for the United Kingdom
plan at October 1, 1989 being recognized
over 12.6 years . . . . . . . . . . . . . . (4,698) -
Additional minimum liability . . . . . . . . . - (1,191)
(Accrued) prepaid pension cost . . . . . . . . $ 856 $ (725)
Intangible asset . . . . . . . . . . . . . . . $ - $ 558
Charge to equity (excess of additional pension
liability over unrecognized prior service cost) $ - $ 634
</TABLE>
Net pension cost related to Company-sponsored plans included the
following components:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Service costs -- benefits earned
during the year . . . . . . . . . . $ 1,467 $ 1,436 $ 1,927
Interest cost on projected benefit
obligation . . . . . . . . . . . . . 5,814 5,985 6,434
Actual return on plan assets . . . . (5,995) (17,739) (10,519)
Net amortization and deferral . . . . (3,084) 9,863 2,180
Benefit curtailment recognition . . . 284 - -
Net periodic pension cost (income) . $ (1,514) $ (455) $ 22
</TABLE>
The weighted average discount rate and rate of increase in future
compensation levels used in determining the 1994 actuarial present
- 33 -
<PAGE>
value of the projected benefit obligation were 8.75% and 5%,
respectively, for U.S. plans. The 1993 rates were 7.75% and 5%,
respectively. The 1994 and 1993 rates for foreign plans were 9% and
7%, respectively. The 1994 and 1993 expected long-term rate of return
on assets was 10.5% for U.S. plans and 10% for foreign plans.
In August of 1992, the Internal Revenue Service temporarily waived the
minimum funding standard for certain of the Company's domestic defined
benefit pension plans for plan years ending December 31, 1990 and 1991.
These waivers were granted in accordance with Section 412(d) of the
Internal Revenue Code and Section 303 of the Employee Retirement Income
Security Act of 1974. The Company made contributions to the plans in
1992 of $1,460. During 1993, the Company contributed $765 to the
plans. In January 1993, the Company contributed 844,513 shares of
previously authorized and unissued common stock valued at $2,745. The
Company's pension plans owned shares of the Company's common stock
representing slightly less than 10% of the plans' asset value
immediately after the January 1993 contribution. The Company made
contributions to the plans in 1994 of $238. The plans currently own
1,476,779 shares of the Company's common stock. The Company has made
the contributions necessary to fully fund several of the plans which
previously received funding waivers. For those plans with remaining
waiver amortization bases, the Company intends to comply with all
conditions of the waivers, including elimination of the waiver
amortization bases in installments through 1996.
The Company has an Employee Stock Ownership Plan (ESOP) for its
eligible domestic employees. The amount of Company contributions made
to the ESOP and charged to expense was $248 for 1994, $1,191 for 1993,
and $1,117 for 1992.
5. POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The Company provides certain health care and life insurance benefits
for all eligible retirees. Eligible retirees include salaried retirees
and certain groups of collectively bargained retirees. The health care
plan is contributory, with all future retirees' and current salaried
retirees' contributions subject to an annual indexing. The Company
funds the cost of these benefits on a claims-paid basis which totalled
$2,794 for 1994, $3,500 for 1993, and $2,465 for 1992.
Excluding the one-time transition charge of $48,676 in 1993, the
adoption of SFAS No. 106 effective October 1, 1992 had the effect of
increasing the Company's net loss by $753 for 1993.
The following table sets forth the plan's funded status, reconciled
with amounts recognized in the Company's consolidated balance sheet at
September 30, 1994 and 1993:
- 34 -
<PAGE>
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees . . . . . . . . . . . . . . . . . $(33,358) $ (44,219)
Fully eligible active plan participants . . (1,723) (2,500)
Other active plan participants . . . . . . (3,980) (6,128)
(39,061) (52,847)
Plan assets at fair value . . . . . . . . . - -
Accumulated postretirement benefit
obligation in excess of plan assets . . . (39,061) (52,847)
Unrecognized net (gain) loss from past
experience different from that assumed
and from changes in assumptions . . . . . (11,964) 3,418
Accrued postretirement benefit cost . . . . $(51,025) $ (49,429)
</TABLE>
The accrued postretirement benefit cost includes approximately $3,000
and $4,150 of expected 1995 and 1994 payments, respectively, that are
included in the balance sheet as a current liability.
Net periodic postretirement benefit cost included the following
components:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Service cost -- benefits attributed to
service during the period . . . . . . . . $ 410 $ 353
Interest on accumulated postretirement
benefit obligation . . . . . . . . . . . 3,980 3,900
Net periodic postretirement benefit cost . $ 4,390 $ 4,253
</TABLE>
For measurement purposes, a 10% annual rate of increase in the per
capita cost of covered health care benefits was assumed for 1995; the
rate was assumed to decrease gradually to 5% for 2000 and remain at
that level thereafter. The health care cost trend rate assumption has
a significant effect on the amounts reported. To illustrate,
increasing the assumed health care cost trend rates by one percentage
point in each year would increase the accumulated postretirement
benefit obligation as of September 30, 1994 by $3,047 and the aggregate
of the service and interest cost components of net periodic
postretirement benefit cost for the year then ended by $434.
The 1994 and 1993 weighted-average discount rates used in determining
the accumulated postretirement benefit obligation were 8.75% and 7.75%,
respectively. The weighted-average discount rates used in determining
the 1994 and 1993 net periodic postretirement benefit cost and the
transition obligation were 7.75% and 8.25%, respectively.
- 35 -
<PAGE>
6. OTHER ASSETS
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Notes receivable, net . . . . . . . . . . . . . $ 365 $ 769
Equity in affiliates . . . . . . . . . . . . . . 600 300
Property held for sale . . . . . . . . . . . . . 4,680 5,270
Intangible pension asset . . . . . . . . . . . . 188 558
Prepaid pension cost . . . . . . . . . . . . . 2,924 -
Other . . . . . . . . . . . . . . . . . . . . . 2,023 1,616
$ 10,780 $ 8,513
</TABLE>
In 1994, the Company closed its Columbiana, Alabama facility and is
continuing its preparation for sale.
During the past six years, the Company has undertaken a project to
obtain New Jersey approval to transfer title for property it owns in
Clifton, New Jersey. This project has involved demolition of the
buildings and continuing environmental remediation from production
wastes through use of an on-site landfill and off-site disposal. Cash
outlays, primarily related to the remediation, have been capitalized to
the extent that, when added to the estimated costs to complete the
project, they do not exceed the estimated realizable sale value of the
property. In 1994, 1993, and 1992, the Company expensed $2,030, $0, and
$333, respectively, associated with the project.
7. DEBT
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Promissory notes due October 1, 1994
with interest at 10.5% . . . . . . . . . . . . $ - $ 2,900
Promissory note due October 1, 1994,
interest at prime plus 2.25% . . . . . . . . - 3,903
ESOP note, due monthly from 1988 to
October 1993, interest at prime . . . . . . . - 17
Promissory note due October 1, 1994
with interest at prime plus 2.75% . . . . . . - 1,175
Revolving credit arrangements expiring
on October 1, 1994, interest at the
applicable bank's prime plus 2.25% . . . . . - 14,967
Promissory note due October 1, 1994 with
interest at prime plus 4.25% . . . . . . . . - 4,207
Revolving credit arrangement expiring
in December 1994, interest at 9.25% . . . . . 1,707 2,967
Revolving credit arrangement expiring
on October 1, 1996, interest at
prime plus 2.0% . . . . . . . . . . . . . . . 19,447 -
- 36 -
<PAGE>
Promissory notes due October 1, 1996,
interest at prime plus 2.25% . . . . . . . . 17,357 -
Various debt due to 1997 . . . . . . . . . . . . 112 136
Foreign subsidiary short-term operating
lines of credit with interest at approx-
imately 7.75% in 1994 and 8.5% in 1993 . . . 3,950 2,822
42,573 33,094
Less short-term debt and current portion
of long-term debt included in current
liabilities . . . . . . . . . . . . . . . . . 8,245 8,994
$ 34,328 $ 24,100
</TABLE>
The existing debt agreements are collateralized by substantially all
assets and contain, among other things, provisions as to the
maintenance of working capital and net worth, restrictions on cash
dividends, redemptions of Company stock and incurrence of indebtedness.
The revolving credit arrangement provides for maximum borrowing levels
based on a percentage of qualified accounts receivable and inventory.
Substantially all cash is restricted under existing debt agreements.
Aggregate maturities on long-term debt, based upon the credit
agreements for the three fiscal years subsequent to September 30, 1995,
amount to $2,992 in 1996, $31,311 in 1997, and $25 in 1998. There are
no maturities extending beyond 1998.
8. LEASES
Minimum rental commitments under noncancellable operating leases,
primarily machinery and equipment, in effect at September 30, 1994
were:
1995 . . . . . . . . . . . . $ 3,983
1996 . . . . . . . . . . . . 3,156
1997 . . . . . . . . . . . . 2,249
1998 . . . . . . . . . . . . 1,695
1999 . . . . . . . . . . . . 1,183
Later years . . . . . . . . 0
Operating lease rental expense was $2,626 in 1994, $2,485 in 1993, and
$2,228 in 1992.
9. INCOME TAXES
The domestic and foreign components of earnings (loss) before income
taxes are as follows:
<TABLE>
<CAPTION>
1994 1993 1992
- 37 -
<PAGE>
<S> <C> <C> <C>
Domestic . . . . . . . . . . . . . . $ (3,861) $(54,609) $ (2,941)
Foreign . . . . . . . . . . . . . . . (708) 1,232 (2,934)
$ (4,569) $(53,377) $ (5,875)
</TABLE>
The provisions (benefits) for income taxes are as follows:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Currently payable (recoverable):
State . . . . . . . . . . . . . . . $ - $ - $ -
Foreign . . . . . . . . . . . . . . 56 - 10
Deferred:
Foreign . . . . . . . . . . . . . . - - -
$ 56 $ - $ 10
</TABLE>
At September 30, 1994, the Company had tax loss carryforwards of
$34,800 in the United States, $6,900 in the United Kingdom and $2,100
in Canada. The United Kingdom carryforward period is unlimited;
however, if not utilized to offset future taxable income, $1,000 of the
United States loss will expire in 2001, $8,900 in 2002, $3,500 in 2004,
$8,100 in 2005, $12,400 in 2006, and $900 in 2008. The period for
utilizing the majority of the Canadian loss will expire in 1996.
At September 30, 1994, and after giving full effect to the 35%
post-1986 investment tax credit reduction required by the Tax Reform
Act of 1986, the Company has total United States tax credit
carryforwards of approximately $1,400, which expire as follows: 2000,
$700; 2001, $500; 2002, $100; and 2003, $100.
A reconciliation of differences between taxes computed at the federal
statutory rate and the actual tax provisions is as follows:
<TABLE>
<CAPTION>
1994 1993 1992
Actual % Actual % Actual %
<S> <C> <C> <C> <C> <C> <C>
Taxes at federal
statutory rate $(1,553) (34.0) $(18,148)(34.0) $(1,998)(34.0)
ESOP amortization - - 60 .1 238 4.1
Sale of subsidiary - - - - 354 6.0
Foreign 56 1.2 - - 10 .2
Losses with no
current benefit 1,558 34.1 18,496 34.7 1,332 22.7
- 38 -
<PAGE>
Other (5) (.1) (408) (.8) 74 1.2
$ 56 1.2 $ - - $ 10 .2
</TABLE>
The net deferred tax asset included the following components:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Deferred tax assets
Accrued postretirement benefits . . . . . . $ 17,349 $ 16,806
Net operating loss carryforwards . . . . . 14,884 14,162
Tax credit carryforwards . . . . . . . . . 1,396 1,396
Environmental reserves . . . . . . . . . . 2,381 2,255
Depreciation . . . . . . . . . . . . . . . 1,371 1,005
Inventory reserves . . . . . . . . . . . . 1,250 928
Reserve against property held for sale . . 3,014 2,504
Other . . . . . . . . . . . . . . . . . . . 2,564 2,863
44,209 41,919
Deferred tax liabilities
Depreciation . . . . . . . . . . . . . . . (871) (727)
Pension . . . . . . . . . . . . . . . . . . (826) (508)
(1,697) (1,235)
Valuation allowance . . . . . . . . . . . . . (42,512) (40,684)
Net deferred . . . . . . . . . . . . . . . . . $ 0 $ 0
</TABLE>
The undistributed earnings of foreign subsidiaries amounting to $2,491
are intended to be reinvested; however, those earnings remitted to the
parent company should have little or no additional tax under relevant
current statutes.
10. OTHER INCOME (EXPENSE), NET
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Foreign affiliate . . . . . . . . . $ - $ - $ (1,041)
Joint venture . . . . . . . . . . . 300 - -
Rent . . . . . . . . . . . . . . . . 200 255 171
Other . . . . . . . . . . . . . . . (74) (159) (59)
$ 426 $ 96 $ (929)
</TABLE>
The 1992 foreign affiliate expense is the loss on the sale of the
Company's interest in its Indian affiliate. This charge represents
the cumulative decline in the value of the Company's investment due to
the effects of foreign exchange rate fluctuations; $599 of the 1992
loss had previously been reported as adjustments to shareholders'
equity within the cumulative translation adjustment account.
11. LITIGATION
- 39 -
<PAGE>
The Company is involved in certain legal actions and claims arising in
the ordinary course of business. After taking into consideration
legal counsel's evaluation of such actions, management is of the
opinion that their outcome will not have a material effect on the
Company's consolidated financial statements.
12. COMMON STOCK
The status of the stock option plans which provide for the purchase of
the Company's common stock by officers and key employees is summarized
as follows:
<TABLE>
<CAPTION>
Options Outstanding
Number Option
of Shares Price
<S> <C> <C>
Balance, September 30, 1991 . . . . . . . . . 75,509 $ 928
Transactions during 1992:
Options expired . . . . . . . . . . . . . (17,395) (284)
Options cancelled . . . . . . . . . . . . (8,138) (89)
Transactions during 1993:
Options granted . . . . . . . . . . . . . 320,500 2,764
Options expired . . . . . . . . . . . . . (2,200) (32)
Options cancelled . . . . . . . . . . . . (5,983) (67)
Transactions during 1994:
Options expired . . . . . . . . . . . . . (23,908) (287)
Options cancelled . . . . . . . . . . . . (8,000) (69)
Balance, September 30, 1994 . . . . . . . . . 330,305 $2,864
</TABLE>
The Long-Term Incentive Plan, under which all options were previously
granted, expired September 17, 1990; however, during 1993, the
National-Standard Stock Option Plan (the "1993 Plan") was approved.
The 1993 Plan allows the Compensation Committee of the Board of
Directors, which consists of four members who are not executive
employees of the Company, to select employees who will be granted
options to purchase shares of common stock at the fair market value on
the date of grant. Under the 1993 Plan, 450,000 shares is the maximum
amount available to be issued upon the exercise of options, and the
term of each option is ten years from the date of the grant. During
1993, 320,500 options were granted to a group of 23 key management
employees. The exercise price is $8-5/8 for all options granted in
1993.
A Restricted Stock Award Program ("Plan") was established in 1989.
The Plan provides for grants of shares of common stock to selected
- 40 -
<PAGE>
employees, subject to forfeiture if employment terminates prior to the
end of the prescribed restricted period. Such stock shall be made
available from authorized and unissued shares of common stock or
treasury stock of the Company. However, the maximum number of shares
that may be issued at any time under the Plan is 250,000. At September
30, 1994, certain employees held 19,000 shares of restricted common
stock of the Company. Awards for 8,500 of these shares were granted in
1994, with 1,000 subsequently vesting or being forfeited. The amount
of compensation represented by the grant of restricted stock is
amortized over a four-year vesting period.
All stock options outstanding at September 30, 1994 are currently
exercisable.
13. SEGMENT INFORMATION
The Company currently operates in one industry segment: Wire and
Related Products.
The Wire and Related Products Segment manufactures and sells various
types of wire used mainly by other manufacturers in their products.
The major use of the wire is for reinforcing tires and other rubber
products. The Segment also produces wire cloth and filters for
automotive air bag inflators for the air bag manufacturing industry.
Prior to 1992, the Company also operated in a Machinery and Other
Products Segment. During 1991, the Company sold its tire drum and
mold business located in Germany and its machinery business located in
the United States, both of which made up the largest share of this
segment in 1991. These divestitures and the reclassification of the
air bag inflator filter business to the Wire and Related Products
Segment have resulted in the Company no longer reporting a Machinery
and Other Products Segment.
The Company operates its business segments primarily in two geographic
areas -- United States and Europe. Due to its nature and relative
immateriality, the operation in Canada has been combined with the
operations in Europe and the combined total reported as foreign
operations.
Intersegment sales are billed at approximate market prices and are
eliminated in consolidation. Sales to unaffiliated customers include
the sales to one customer by both geographic areas in the total amount
of $38,038 in 1994, $42,292 in 1993, and $40,946 in 1992.
Operating profit is total sales less operating expenses and does not
include general corporate expenses, interest, equity in income of
affiliate, loss on sale of subsidiary, and income taxes. General
- 41 -
<PAGE>
corporate expense includes certain nonrecurring costs. Included in
1994, 1993 and 1992, respectively, are approximately $6,955, $2,390,
and $2,344 of costs associated with divestitures and restructuring.
Included in the divestiture and restructuring costs in 1994 and 1992,
respectively, are $2,030 and $333 for costs associated with the
Athenia Steel property project in Clifton, New Jersey. The
information reported for geographic areas necessarily includes
allocations of shared expenses and the cost of assets. Assets not
identified to geographic areas are principally cash and investments.
<TABLE>
<CAPTION>
Year Ended September 30
1994 1993 1992
<S> <C> <C> <C>
GEOGRAPHIC AREAS
Net Sales
United States . . . . . . . . . $ 170,667 $ 159,520 $ 152,177
Foreign . . . . . . . . . . . . 51,579 54,719 65,865
Eliminations<FN> . . . . . . . . (4,330) (5,985) (2,909)
$ 217,916 $ 208,254 $ 215,133
Operating Profit (Loss)
United States . . . . . . . . . $ 8,628 $ 3,620 $ 8,482
Foreign . . . . . . . . . . . . 197 2,324 (820)
Segment Operating Profit (Loss) 8,825 5,944 7,662
General Corporate Expense . . . (9,935) (6,999) (7,618)
$ (1,110) $ (1,055) $ 44
Total Assets
United States . . . . . . . . . $ 62,933 $ 65,142 $ 64,024
Foreign . . . . . . . . . . . . 24,348 26,088 35,017
Corporate . . . . . . . . . . . 21,404 12,746 14,898
$ 108,685 $ 103,976 $ 113,939
<FN>
(1) Represents primarily sales of foreign wire to the United States.</FN>
</TABLE>
The net assets of foreign subsidiaries included in the consolidated
figures at appropriate rates of exchange are as follows:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Net current assets . . . . . . . . . . . . . . $ 2,679 $ 2,448
Plant, equipment and other assets,
net of long-term debt, deferred taxes, and
other long-term liabilities . . . . . . . . . 5,210 6,447
$ 7,889 $ 8,895
</TABLE>
- 42 -
<PAGE>
14. QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
<S> <C> <C> <C> <C>
September 30, 1994
Net sales . . . . . . . . $ 52,242 $ 58,051 $52,534 $ 55,089
Gross profit . . . . . . . 5,257 6,133 6,014 6,452
Earnings (loss):
Net . . . . . . . . . . (4,518) 611 673 (1,391)
Per share . . . . . . . (.84) .11 .13 (.26)
Common stock:
Market price:
High . . . . . . . 9-7/8 9-3/8 14 13-7/8
Low . . . . . . . 7-1/2 7-7/8 7-5/8 11-1/4
September 30, 1993
Net Sales . . . . . . . . $ 50,941 $ 55,905 $52,160 $ 49,248
Gross Profit . . . . . . . 5,884 7,521 5,859 4,741
Earnings (loss) before effect
of accounting change:
Net . . . . . . . . . 108 563 229 (5,601)
Per share . . . . . . .02 .11 .04 (1.05)
Earnings (loss):
Net . . . . . . . . . (48,568) 563 229 (5,601)
Per share . . . . . . (11.01) .11 .04 (1.05)
Common stock:
Market price:
High . . . . . . . 3-1/8 6 10 9-3/8
Low . . . . . . . 1-7/8 2-5/8 5-5/8 7-1/8
</TABLE>
Common stock market prices are as reported in The Wall Street Journal.
Common stock is traded on the New York Stock Exchange.
At September 30, 1994, there were 2,564 shareholders.
- 43 -
<PAGE>
Independent Auditors' Report
The Board of Directors
National-Standard Company:
We have audited the consolidated financial statements of National-Standard
Company and subsidiaries as listed in the accompanying index. In
connection with our audits of the consolidated financial statements, we
also have audited the financial statement schedules as listed in the
accompanying index. These consolidated financial statements and financial
statement schedules are the responsibility of the Company's management.
Our responsibility is to express an opinion on these consolidated financial
statements and financial statement schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examinining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
National-Standard Company and subsidiaries as of September 30, 1994 and
1993, and the results of their operations and their cash flows for each of
the years in the three-year period ended September 30, 1994, in conformity
with generally accepted accounting principles. Also in our opinion, the
related financial statement schedules, when considered in relation to the
basic consolidated financial statements taken as a whole, present fairly,
in all material respects, the information set forth therein.
As discussed in note 1 to the consolidated financial statements, the
Company adopted the provisions of the Financial Accounting Standards
Board's Statement of Financial Accounting Standards No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions," in 1993.
KPMG Peat Marwick LLP
Chicago, Illinois
November 8, 1994
- 44 -
<PAGE>
NATIONAL-STANDARD COMPANY AND SUBSIDIARIES
SCHEDULE V
PROPERTY, PLANT AND EQUIPMENT
Years Ended September 30, 1994, 1993 and 1992
<TABLE>
<CAPTION>
Balance Addi- Translation/ Balance
at Beginning tions Retire- Other at End
Classification of Period at Cost ments Adjustments of Period
<S> <C> <C> <C> <C> <C>
(In thousands)
Year ended September 30, 1994:
Land $ 344 $ 0 $ 0 $ (13) $ 331
Land improvements 2,453 28 (12) (526) 1,943
Buildings 24,777 414 (4) (2,777) 22,410
Machinery and equipment 108,736 5,171 (9,506) (4,759) 99,642
Steel reels 2,314 303 (164) (90) 2,363
Automobiles and trucks 1,671 8 (167) (49) 1,463
Office furniture and
fixtures 4,592 150 (82) 10 4,670
Construction in progress 3,911 4,415 - - 8,326
$ 148,798 $ 10,489 $ (9,935) $ (8,204) $ 141,148
Year ended September 30, 1993:
Land $ 354 $ - $ - $ (10) $ 344
Land improvements 2,460 - - (7) 2,453
Buildings 25,000 181 - (404) 24,777
Machinery and equipment 114,189 2,321 2,985 (4,789) 108,736
Steel reels 2,450 115 199 (52) 2,314
Automobiles and trucks 1,665 81 56 (19) 1,671
Office furniture and
fixtures 4,778 99 134 (151) 4,592
Construction in progress 2,049 1,749 - 113 3,911
$ 152,945 $ 4,546 $ 3,374 $ (5,319) $ 148,798
Year ended September 30, 1992:
Land $ 358 $ - $ - $ (4) $ 354
Land improvements 2,470 - - (10) 2,460
Buildings 25,468 255 579 (144) 25,000
Machinery and equipment 114,491 2,938 1,723 (1,517) 114,189
Steel reels 2,174 293 14 (3) 2,450
Automobiles and trucks 1,789 4 119 (9) 1,665
Office furniture and
fixtures 5,425 39 683 (3) 4,778
Construction in progress 2,587 (761) - 223 2,049
$ 154,762 $ 2,768 $ 3,118 $ (1,467) $ 152,945
</TABLE>
- 45 -
<PAGE>
(1) Generally the rates of depreciation range from 7% to 12.5% for land
improvements, 2% to 4% for buildings, 5% to 12.5% for machinery and
equipment, 10% to 25% for automobiles and trucks and 10% to 16.7%
for furniture and fixtures.
(2) There are reclassifications within the various categories.
- 46 -
<PAGE>
NATIONAL-STANDARD COMPANY AND SUBSIDIARIES
SCHEDULE VI
ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT
Years Ended September 30, 1994, 1993 and 1992
<TABLE>
<CAPTION>
Balance Addi- Translation/ Balance
at Beginning tions Retire- Other at End
Classification of Period at Cost ments Adjustments of Period
<S> <C> <C> <C> <C> <C>
(In thousands)
Year ended September 30, 1994:
Land improvements $ 2,219 $ 52 $ (12) $ (525) $ 1,734
Buildings 12,592 864 (2) (1,638) 11,816
Machinery and equipment 85,375 5,235 (8,100) (4,904) 77,606
Steel reels 1,482 135 (88) 70 1,599
Automobiles and trucks 1,572 31 (155) (49) 1,399
Office furniture and
fixtures 3,999 202 (80) 11 4,132
$ 107,239 $ 6,519 $ (8,437) $ (7,035) $ 98,286
Year ended September 30, 1993:
Land improvements $ 2,158 $ 68 $ - $ (7) $ 2,219
Buildings 11,861 974 - (243) 12,592
Machinery and equipment 85,159 4,998 2,204 (2,610) 85,375
Steel reels 1,519 181 195 (23) 1,482
Automobiles and trucks 1,567 50 35 (10) 1,572
Office furniture and
fixtures 3,978 233 126 (86) 3,999
$ 106,242 $ 6,504 $ 2,560 $ (2,947) $ 107,239
Year ended September 30, 1992:
Land improvements $ 2,087 $ 80 $ - $ (9) $ 2,158
Buildings 11,019 999 87 (70) 11,861
Machinery and equipment 81,440 5,572 1,400 (453) 85,159
Steel reels 1,391 146 14 (4) 1,519
Automobiles and trucks 1,603 85 112 (9) 1,567
Office furniture and
fixtures 4,344 297 657 (6) 3,978
$ 101,884 $ 7,179 $ 2,270 $ (551) $ 106,242
</TABLE>
(1) There are reclassifications within the various categories.
- 47 -
<PAGE>
NATIONAL-STANDARD COMPANY AND SUBSIDIARIES
SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS
Years Ended September 30, 1994, 1993 and 1992
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
(In thousands)
Allowance for Doubtful Accounts:
Balance at Beginning of Period . . . . . . . . . . $ 386 $ 404 $ 634
Additions (Recoveries) Charged
to Costs and Expenses . . . . . . . . . . . . 72 48 67
Recoveries of Accounts Previously Written Off . - 1 3
Deductions (Uncollectible Accounts Written Off) (60) (67) (300)
BALANCE AT END OF PERIOD . . . . . . . . . . . . . $ 398 $ 386 $ 404
</TABLE>
- 48 -
<PAGE>
NATIONAL-STANDARD COMPANY AND SUBSIDIARIES
SCHEDULE IX
SHORT-TERM BORROWINGS
<TABLE>
<CAPTION>
Weighted
Weighted Maximum Average Average
Average Amount Amount Interest
Interest Outstanding Outstanding Rate
Balance at Rate at During During During
Year September 30 September 30 the Year the Year the Year
<S> <C> <C> <C> <C> <C>
(In thousands)
1994 $ 5,668 8.2% $ 6,848 $ 5,912 9.4%
1993 5,800 9.0% 8,335 6,715 11.3%
1992 5,721 10.8% 7,607 5,891 13.0%
</TABLE>
Notes:
Short-term borrowings during the years covered by this schedule consisted
of amounts payable to banks for borrowing.
The weighted average interest rate during the year was computed by dividing
the total interest on short-term borrowings by the monthly average of
short-term borrowings outstanding.
- 49 -
<PAGE>
NATIONAL-STANDARD COMPANY AND SUBSIDIARIES
SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
For the Years Ended September 30, 1994, 1993 and 1992
<TABLE>
<CAPTION>
Charged to Costs and Expenses
1994 1993 1992
<S> <C> <C> <C>
(In Thousands)
Maintenance and Repairs . . . . . . $ 13,404 $12,451 $ 12,865
</TABLE>
- 50 -
<PAGE>
NATIONAL-STANDARD COMPANY
INDEX TO EXHIBITS
Exhibit
(3)(i) Articles of Incorporation.
(3)(ii) By-Laws.
(10) Material Contracts.
(a) Management Contracts and Remunerative Plans.
(i) National-Standard Company Restricted Stock Award Plan
(incorporated by reference to Exhibit (10)(a) to
Registrant's Quarterly Report on Form 10-Q for the first
quarter of 1989 filed January 30, 1989).
(ii) National-Standard Company Supplemental Retirement Plan
(incorporated by reference to Exhibit (10)(a)(ii) to
Registrant's Annual Report on Form 10-K for 1991, filed
January 31, 1992).
(iii) National-Standard Spouse's Benefit Plan for Salaried
Employees (incorporated by reference to Exhibit (10)(a)(iii)
to Registrant's Annual Report on Form 10-K for 1991, filed
January 31, 1992).
(iv) Amended and Restated Supplemental Compensation Agreements
(incorporated by reference to Exhibit (10)(a)(iv) to
Registrant's Annual Report on Form 10-K for 1992, filed
February 23, 1993).
(v) Deferred Compensation Plan.
(vi) National-Standard Stock Option Plan (incorporated by
reference to Exhibit A to Registrant's annual Proxy
Statement relating to the Annual Meeting of Shareholders
held May 19, 1993, filed April 15, 1993).
(b) Loan and Security Agreement by and between National-Standard
Company and Foothill Capital Corporation dated as of May 24,
1994 (incorporated by reference to Exhibit (10) to
Registrant's Quarterly Report on Form 10-Q for the third
quarter of 1994, filed August 5, 1994).
(11) Statement Regarding Earnings Per Share Calculation.
- 51 -
<PAGE>
(21) Subsidiaries of National-Standard Company.
(23) Consent of Independent Auditors.
(24) Powers of Attorney.
(27) Financial Data Schedule.
- 52 -
<PAGE>
ARTICLES OF INCORPORATION EXHIBIT 3(i)
OF
N-S SUB, INC.
ARTICLE I.
Name
The name of the Corporation is N-S Sub, Inc., a Corporation formed
under the Indiana Business Corporation Law.
ARTICLE II.
Purposes
The nature of the business of the Corporation and the objects or
purposes to be transacted, promoted or carried on are to engage in the
business of buying, selling, manufacturing, fabricating, and dealing in all
kinds, forms and combinations of iron, steel, wire, wire cable, wire goods,
metal, metal parts and goods, wood parts and goods, leather parts and
goods, rubber parts and goods, and any form or combination of any or all of
the several named materials, and in the products of iron, steel, wire,
wood, leather, rubber and other materials of any type or either or any of
them; to plate, coat and treat metal products; and to conduct a general
manufacturing, merchandising supply and specialty business including the
manufacture and sale of machinery, machinery tools, ovens, and equipment
made in whole or in part from any and/or all of said materials or any
combination thereof, and to engage in the transactions of any lawful
business for which corporations incorporated under Indiana law may now or
hereafter engage in.
ARTICLE III.
Terms of Existence
The existence of the Corporation is to be perpetual.
ARTICLE IV.
Registered Office and Registered Agent
The post office address of the initial registered office of the
Corporation is One North Capitol, Indianapolis, Indiana 46204; and the name
of its initial Registered Agent at that office is CT Corporation System.
<PAGE>
ARTICLE V.
Capital Stock
The total number of shares into which the authorized capital stock of
the Corporation is divided is Twenty-Five Million Six Hundred Thousand
Shares (25,600,000) consisting of Twenty-Five Million (25,000,000) shares
of Common Stock, par value $ .01 per share (hereinafter called Common
Stock) and Six Hundred Thousand (600,000) shares of Preferred Stock, par
value $1.00 per share (hereinafter called Preferred Stock).
ARTICLE VI.
Terms of Capital Stock
The following is a description of each of the classes of stock of the
Corporation and a statement of the powers, preferences and rights of the
stock, and the qualifications, limitations and restrictions thereof:
Section 1
(a) The Preferred Stock shall be issued from time to time in one or
more series, and the series shall be known and designated by the
appropriate designations as may be stated and expressed in the
resolution or resolutions providing for the issue of the stock of
whatever series adopted by the Board of Directors from time to
time, a copy of which resolution or resolutions shall have been
set forth in a certificate made, executed, acknowledged, filed and
recorded in the manner required by the laws of the State of
Indiana in order to make the same effective. Each series shall
consist of the number of shares stated and expressed in the
resolution or resolutions providing for the issue of the stock of
the series together with the additional number of shares as the
Board of Directors by resolution or resolutions may from time to
time determine to issue as a part of the series. All shares of
any one series of the Preferred Stock shall be alike in every
particular except that shares issued at different times may
accumulate dividends from different dates. The Board of Directors
shall have power and authority to state and determine, in the
resolution or resolutions providing for the issue of each series
of Preferred Stock, the number of shares of each series authorized
to be issued, the voting powers (if any) and the designations,
preferences and relative, participating, optional or other rights
appertaining to each series, and the qualifications, limitations
or restrictions thereof [including, but not by way of limitation,
full power and authority to determine as to the Preferred Stock of
each series, the rate or rates of dividends payable thereon, the
times of payment of the dividends, the prices and manner upon
-2-
<PAGE>
which the same may be redeemed, the amount or amounts payable
thereon in the event of liquidation, dissolution or winding up of
the Corporation, and the rights (if any) to convert the same into,
and/or to purchase stock of any other class or series]. The Board
of Directors may from time to time decrease the number of shares
of any series of Preferred Stock (but not below the number thereof
then outstanding) by providing that any unissued shares previously
assigned to the series shall no longer constitute part thereof and
may assign the unissued shares to an existing or newly created
series.
(b) The foregoing provisions of this paragraph 1 with respect to the
creation or issuance of series of Preferred Stock shall be subject
to any additional conditions with respect thereto which may be
contained in any resolutions then in effect which shall have
theretofore been adopted in accordance with the foregoing
provisions of this paragraph 1 with respect to any then
outstanding series of Preferred Stock.
Section 2
All shares of Preferred Stock shall have the same powers, preferences
and rights, and shall be subject to the same qualifications, limitations or
restrictions, without distinction as between series, except as provided
herein or in resolutions of the directors pursuant to paragraph 1 above.
Section 3
The holders of the Preferred Stock shall be entitled to receive, when
and as declared by the Board of Directors of the Corporation, out of any
legally available funds of the Corporation, dividends at the rates and at
payment dates as may be fixed by resolution of the Board of Directors for
the shares of each series of the Preferred Stock established in accordance
with paragraph 1 above. The holders of Preferred Stock shall not be
entitled to receive any dividends over and above the dividends so fixed.
If any dividends are paid on any of the Preferred Stock at any time, in an
aggregate amount less than the total dividends then accumulated and payable
on all of the Preferred Stock then outstanding, the amount to be
distributed shall be paid on each series of Preferred Stock in the
proportions that the dividends then accumulated and payable on each series
bears to the total dividends then accumulated and payable on all
outstanding Preferred Stock.
Section 4
At any time after all preferential dividends on the Preferred Stock for
all previous dividend payment periods shall have been paid or declared and
set apart for payment, the Board of Directors may (subject to any
-3-
<PAGE>
conditions with respect thereto that may be contained in any then effective
resolutions adopted in accordance with the provisions of paragraph 1
hereof) declare dividends on the Common Stock out of any legally available
funds.
Section 5
In the event of any liquidation, dissolution or winding up of the
Corporation or any distribution of its assets, whether voluntary or
involuntary, the holders of the outstanding Preferred Stock of each series
shall be entitled to receive out of the assets of the Corporation, before
any payment or distribution is made out of said assets to the holders of
the Common Stock, the amount as is determined by resolution establishing
said series in accordance with paragraph 1 above, together with an
additional amount equal to all accrued and unpaid dividends thereon
(whether or not earned or declared) to the date payment is made available
to the holders of Preferred Stock, without preference or priority of any
series over any other series. If less than the full amounts are paid or
set apart for payment to holders of Preferred Stock, any amount so paid or
payable shall be paid on each series of Preferred Stock in proportion to
the respective amounts payable to each of the series in full payment.
After payment or the setting apart for payment to the holders of each
series of Preferred Stock of the preferential amounts so payable to them,
all the remaining assets of the Corporation shall belong to and be
distributable pro rata to the holders of Common Stock.
Section 6
(a) The holders of the Common Stock of the Corporation shall be
entitled to one vote for each share at any meeting of the
shareholders of the Corporation.
(b) The Preferred Stock shall have no voting rights and shall have no
right to receive notice of any meetings except as required by law
or expressly provided in the resolution establishing any series
thereof.
ARTICLE VII.
Preemptive Rights
No holder of any share or shares of any class of stock of the
Corporation shall have any preemptive right to subscribe for any shares of
stock of any class of the Corporation now or hereafter authorized or for
any securities convertible into or carrying any rights to purchase any
shares of stock of any class of the Corporation now or hereafter
authorized, provided, however, that no provision of this Certificate of
-4-
<PAGE>
Incorporation shall be deemed to deny to the Board of Directors the right,
in its discretion, to grant to the holders of shares of any class of stock
at the time outstanding the right to purchase or subscribe for shares of
stock of any class or any other securities of the Corporation now or
hereafter authorized, at the prices and upon the other terms and conditions
as the Board of Directors, in its discretion, may fix.
ARTICLE VIII.
Data Respecting Directors
Section 1
The maximum number of directors shall be fifteen (15). The exact
number of directors, but not less than three (3) nor more than fifteen
(15), may within the limits specified by this Article Eight increase or
decrease from time to time by resolution duly adopted by a majority of the
directors then in office.
Section 2
The Board of Directors shall be divided into three classes as nearly
equal as may be, with the term of office of one class expiring each year.
The term of office of directors of the first class shall expire at the
third annual meeting of shareholders next ensuing this classification; the
term of office of directors of the second class shall expire at the second
annual meeting of shareholders next ensuing this classification; and the
term of office of directors of the third class shall expire at the annual
meeting of shareholders next ensuing this classification. At each annual
meeting of the shareholders, directors of the class whose term then expires
shall be elected for a full term of three years to succeed the directors of
the class, so that the term of office of the directors of one class shall
expire in each year; provided that nothing herein shall be construed to
prevent (i) the election of a director to succeed himself, or (ii) the
election of a director for the remainder of an unexpired term in the class
of directors to which he is elected.
Section 3
Directors need not be shareholders of the Corporation.
-5-
<PAGE>
ARTICLE IX.
Name and Address of each Incorporator
The names and addresses of the Incorporators are as follows:
Name Number and Street City State
Michael B. Savitske 710 Riverside Court South Bend Indiana
R. J. VanSteelandt, Jr. 1605 Echo Valley Drive Niles Michigan
ARTICLE X.
Provision for Regulation of Business and Conduct of Affairs of Corporation
Section 1
The Board of Directors of this Corporation shall have power, and is
hereby authorized, to fix and determine the price at which, or the
consideration for which, the shares of stock of this Corporation may from
time to time be issued, and the shares of stock may be issued for the
consideration therefor fixed from time to time by the Board of Directors.
Section 2
If and whenever the provisions of IC 23-1-42 apply to this Corporation,
it is authorized to redeem its securities pursuant to IC 23-1-42-10.
Section 3
This Corporation reserves the right to take advantage of the provisions
of any amendment to The Indiana Business Corporation Law, or of any new law
applicable or relating to corporations formed, organized under, or which
have accepted the provisions of the law now in force which may hereafter be
enacted, and all rights granted and conferred on the shareholders of this
Corporation are granted and conferred subject to this reservation.
ARTICLE XI.
Amendments
The Corporation reserves the right to amend, alter, change or repeal
any provision contained in these Articles of Incorporation, in the manner
now or hereafter prescribed by statute, and all rights conferred upon
shareholders herein are granted subject to this reservation.
-6-
<PAGE>
/s/ Michael B. Savitske
Michael B. Savitske
/s/ R. J. VanSteelandt, Jr.
R. J. VanSteelandt, Jr.
-7-
<PAGE>
BYLAWS EXHIBIT 3(ii)
OF
NATIONAL-STANDARD COMPANY
ARTICLE I.
THE CORPORATION
1.1 Name. The name of this Corporation is NATIONAL-STANDARD COMPANY.
1.2 Offices. The registered office shall be in the City of Indianapolis,
State of Indiana, and the name of the registered agent in charge
thereof is CT Corporation System. This Corporation may also have
offices at any other place that the Board of Directors may from time
to time determine or the business of this Corporation may require.
1.3 Seal. The corporate seal of this Corporation shall have thereon the
name of this Corporation and the words "CORPORATE SEAL."
ARTICLE II.
THE SHAREHOLDERS
2.1 Place of Meetings. All meetings of the shareholders, whether special
or annual, shall be held within or without the State of Indiana, as
may be fixed from time to time by the Board of Directors.
2.2 Annual Meeting. The Annual Meeting of the Shareholders of this
Corporation shall be held once in each calendar year at the time
determined by the Board of Directors, which time shall be stated in
the Notice of Meeting. The purpose of the Annual Meeting shall be to
elect directors and to transact any other business that may come
before the meeting.
2.3 Special Meetings. Special meetings of the shareholders may be called
at the request in writing by a majority of the members of the Board
of Directors or by the Chairman of the Board or by the President at
any time for any purpose or purposes, unless otherwise prescribed by
statute. The request shall state the purpose or purposes of the
proposed meeting.
2.4 Quorum. A majority of the outstanding stock entitled to vote,
present in person or by proxy duly authorized by the shareholder and
filed with the Secretary, shall constitute a quorum at all meetings
of the shareholders except as otherwise provided by law, or by the
Articles of Incorporation. If, however, a majority shall not be
present or represented at any meeting of the shareholders, the
shareholders entitled to vote thereat, present in person or by proxy
duly authorized by the shareholder and filed with the Secretary,
shall have the power to adjourn the meeting from time to time,
<PAGE>
without notice other than announcement at the meeting of the place,
date and hour of the adjourned meeting, until a quorum shall be
present or represented. At the adjourned meeting at which quorum
shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally notified. If
the adjournment is for more than thirty (30) days or if after the
adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each shareholder of
record entitled to vote at the meeting. The shareholders present at
a duly organized meeting may continue to transact business until
adjournment notwithstanding the withdrawal of enough shareholders to
leave less than a quorum.
2.5 Voting. When a quorum is present at any meeting, and subject to the
provisions of the Business Corporation Law of the State of Indiana,
the Articles of Incorporation or these Bylaws in respect of the vote
that shall be required for a specific action, the vote of the holders
of a majority of the stock having voting power, present in person or
represented by proxy duly authorized by the shareholder and filed
with the Secretary, shall decide any question brought before the
meeting, unless the question is one upon which, by express provision
of the statutes or of the Articles of Incorporation or of these
Bylaws, a different vote is required, in which case the express
provision shall govern and control the decision on the question.
Directors shall be elected by a plurality of the votes of the shares
present in person or represented by proxy at the meeting and entitled
to vote on the election of Directors. Election of Directors need not
be by ballot. Each shareholder shall have one vote for each share of
stock having voting power registered in his name on the books of this
Corporation, except as otherwise provided in the Articles of
Incorporation.
2.6 Proxies. At any meeting of the shareholders, every shareholder
having the right to vote shall be entitled to vote in person, or by
proxy duly authorized and bearing a date not more than eleven months
prior to said meeting, unless the proxy provides for a shorter or
longer period. The shareholder may validly grant this authority by:
(a) signing an appointment form, either personally or by the
Shareholder's attorney-in-fact (or causing his signature to be
affixed to the writing by any reasonable means) including, but not
limited to, by facsimile signature; or (b) transmitting or
authorizing the transmission of a telegram, cablegram, or other means
of electronic transmission to the person who will be the holder of
the proxy or to a proxy solicitation firm, proxy support service
organization or like agent duly authorized by the person who will be
the holder of the proxy to receive the transmission, provided that
any telegram, cablegram or other means of the electronic transmission
-2-
<PAGE>
must either set forth or be submitted with information from which it
can be determined that the telegram, cablegram or other electronic
transmission was authorized by the shareholder. If it is determined
that any telegram, cablegram or other electronic transmission
submitted pursuant to clause (b) above is valid, the inspectors shall
specify the information upon which they relied. Any copy, facsimile,
telecommunication or other reliable reproduction of the writing or
transmission created pursuant to the preceding sentence may be
substituted or used in lieu of the original writing or transmission
for any and all purposes for which the original writing or
transmission could be used, provided that the copy, facsimile,
telecommunication or other reproduction shall be a complete
reproduction of the entire original writing or transmission.
2.7 Fiduciary Voting. Every person holding stock in any representative
or fiduciary capacity shall be entitled to vote the shares so held at
all meetings of this Corporation. Persons who transfer, mortgage, or
in any way pledge their stock to another for security purposes, and
it so appears in the transfer, mortgage or pledge and on the books of
this Corporation, shall have the right to vote the stock at all
meetings of this Corporation unless in the transfer by the pledger on
the books of this Corporation he has expressly empowered the pledgee
to vote thereon, in which case only the pledgee or his proxy may
represent the stock and vote thereon.
2.8 Shareholder Companies. Another corporation owning voting shares in
this Corporation may vote the shares by the President of the
shareholder company or by proxy appointed by the President, unless
the Board of Directors of the shareholder company appoints some other
person of the shareholder company and a certified copy of the
resolution is delivered to the Secretary of this Corporation, and
unless the shares are owned, directly or indirectly, by a second
corporation domestic or foreign, and this Corporation owns, directly
or indirectly, a majority of the shares entitled to vote for
directors of the second corporation.
2.9 Notice of Meetings. Written notice of each meeting of shareholders,
stating the date, time and place, and in the case of a special
meeting the object thereof, shall be mailed, postage prepaid,
addressed to each shareholder entitled to vote thereat, at the
address of the shareholder which appears on the books of this
Corporation, not less than ten (10) days nor more than seventy (70)
days before the meeting.
2.10 List of Shareholders. After the Record Date for a meeting of
shareholders is fixed, the Secretary shall prepare a complete
alphabetical list of the shareholders entitled to vote at the
-3-
<PAGE>
meeting. The list shall be arranged by voting group (and within each
group by class or series of shares) and shall show the address of
each shareholder as it appears on the records of this Corporation and
the number of shares of stock held by the shareholder. Beginning
five (5) business days before the meeting, the list of shareholders
shall be open to inspection by any shareholder, shareholder's agent,
or attorney authorized in writing for any purpose germane to the
meeting, during ordinary business hours, and shall be kept at a place
within the city where the meeting is to be held, which place shall be
specified in the Notice of the Meeting. The list shall also be
produced and kept at the time and place of the meeting during the
whole time thereof and may be inspected by any shareholder,
shareholder's agent, or attorney authorized in writing.
2.11 Shareholder Nominations and Proposals.
(a) At any meeting of the shareholders, only business which shall
have been properly brought before the meeting shall be conducted.
To be properly brought before a meeting, business must be (i)
specified in the Notice of Meeting (or any supplement thereto)
given by or at the direction of the Board of Directors, (ii)
otherwise properly brought before the meeting by or at the
direction of the Board of Directors, or (iii) otherwise properly
brought before the meeting by a shareholder.
(b) For business to be properly brought before a meeting by a
shareholder, the shareholder must have given timely notice
thereof in writing to the Secretary of this Corporation. To be
timely, a shareholder's notice must be delivered to or mailed and
received at the principal executive offices of this Corporation,
not less than sixty (60) days nor more than ninety (90) days
prior to the meeting; provided, however, that in the event that
less than seventy (70) days' notice or prior public disclosure of
the date of the meeting is given or made to shareholders, notice
by the shareholder to be timely must be so received not later
than the close of business on the tenth day following the day on
which the notice of the date of the meeting was mailed or the
public disclosure was made.
(c) In the case of shareholder nominations for election to the Board
of Directors, the notice shall set forth (i) the name, age,
business address and, if known, residence address of each nominee
proposed in the notice, (ii) the principal occupations or
employment of each nominee for the past five (5) years, (iii) the
number of shares of this Corporation which are beneficially owned
by each nominee, (iv) other directorships held by each nominee,
-4-
<PAGE>
(v) the names of business entities of which each nominee owns ten
percent (10%) or more beneficial interest, and (vi) all other
information with respect to each nominee required by the Federal
proxy rules in effect at the time notice is submitted. In
addition, the notice shall be accompanied by a statement, over
the signature of each proposed nominee, that he consents to being
a nominee, if elected he intends to serve as a director, and
confirming the information with respect to him set forth in the
notice.
(d) In the case of shareholder proposals, the notice shall set forth
(i) a brief description of the business desired to be brought
before the meeting and the reasons for conducting the business at
the meeting, (ii) the name, age, business and residence address
of the shareholder submitting the proposal, (iii) the principal
occupation or employment of the shareholder, (iv) the number of
shares of this Corporation which are beneficially owned by the
shareholder, and (v) any material interest of the shareholder in
the business. The chairman of the meeting shall, if the facts
warrant, determine and declare to the meeting that business was
not properly brought before the meeting and in accordance with
the provisions of this Article II, and if he should so determine,
he shall so declare to the meeting, and any business not properly
brought before the meeting shall not be transacted.
Notwithstanding anything in these Bylaws to the contrary, no
business shall be conducted at any meeting except in accordance
with the procedures set forth in this Article II.
2.12 Voting Procedure and Inspectors of Elections.
(a) This Corporation, by action of the Secretary, shall, in advance
of any meeting of shareholders, appoint one or more inspectors to
act at the meeting and make a written report thereof. This
Corporation may designate one or more persons as alternate
inspectors to replace any inspector who fails to act. If no
inspector or alternate is able to act at a meeting of
shareholders, the person presiding at the meeting shall appoint
one or more inspectors to act at the meeting. Each inspector,
before entering upon the discharge of his duties, shall take and
sign an oath faithfully to execute the duties of inspector with
strict impartiality and according to the best of his ability.
(b) The inspectors shall (i) ascertain the number of shares
outstanding and the voting power of each, (ii) determine the
shares represented at a meeting and the validity of proxies and
ballots, (iii) count all votes and ballots, (iv) determine and
retain for a reasonable period a record of the disposition of any
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challenges made to any determination by the inspectors, and (v)
certify their determination of the number of shares represented
at the meeting and their count of all votes and ballots. The
inspectors may appoint or retain other persons or entities to
assist the inspectors in the performance of the duties of the
inspectors.
(c) The date and time of the opening and the closing of the polls for
each matter upon which the shareholders will vote at a meeting
shall be announced at the meeting. No ballot, proxies or votes,
nor any revocations thereof or charges thereto, shall be accepted
by the inspectors after the closing of the polls unless the Court
of Chancery upon application by a shareholder shall determine
otherwise.
(d) In determining the validity and counting of proxies and ballots,
the inspectors shall be limited to an examination of the proxies,
any envelopes submitted with those proxies, any information
provided in accordance with clause (b) of Section 2.6 of these
Bylaws, ballots and the regular books and records of this
Corporation, except that the inspectors may consider other
reliable information for the limited purpose of reconciling
proxies and ballots submitted by or on behalf of banks, brokers,
their nominees or similar persons which represent more votes than
the holder of a proxy is authorized by the record owner to cast
or more votes than the shareholder holds of record. If the
inspectors consider other reliable information for the limited
purpose permitted herein, the inspectors at the time they make
their certification pursuant to subsection (b)(v) of this Section
shall specify the specific information considered by them,
including the person or persons from whom they obtained the
information, when the information was obtained, the means by
which the information was obtained, and the basis for the
inspectors' belief that the information is accurate and reliable.
ARTICLE III.
THE BOARD OF DIRECTORS
3.1 Number and Classification of Directors. The business and affairs of
this Corporation shall be managed by a Board of Directors which may
exercise all powers of this Corporation and do all acts and things
which are not by the Business Corporation Law of the State of Indiana
nor by the Articles of Incorporation nor by these Bylaws directed or
required to be exercised or done by the shareholders. Each director
shall hold office for the term for which he is elected until his
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successor has been elected and qualified or until his earlier
resignation or removal. The Board of Directors shall be composed of
seven (7) members divided into three (3) classes. The term of office
of directors of the first class, which shall consist of two (2)
directors, shall expire at the third annual meeting of shareholders
following the date of Incorporation of this Corporation in Indiana;
the term of office of directors of the second class, which shall
consist of two (2) directors, shall expire at the second annual
meeting of shareholders next ensuing that date; and the term of
office of directors of the third class, which shall consist of three
(3) directors, shall expire at the first annual meeting of
shareholders next ensuing that date. At each annual meeting of the
shareholders, directors of the class whose term then expires shall be
elected for a full term of three years to succeed the directors of
that class, so that the term of office of the directors of one class
shall expire in each year; provided that nothing herein shall be
construed to prevent (i) the election of a director to succeed
himself, or (ii) the election of a director for the remainder of an
unexpired term in the class of directors to which he is elected.
3.2 First Meeting. The newly elected directors shall meet for the
purpose of organization as soon as convenient after the close of the
shareholders' annual meeting. At the meeting, the Board shall select
the officers of this Corporation for the ensuing term of office and
shall transact any other business that shall properly be brought
before the meeting. No notice of the holding of the meeting shall be
necessary if it is held immediately after the Annual Meeting of -
Shareholders, at the same place at which the meeting was held.
3.3 Regular Meetings. Regular meetings of the Board of Directors shall
be held immediately following and at the same place as the Annual
Meeting of the Shareholders. The Secretary shall give notice five
(5) days in advance of the meeting, unless waived, by mail, telegram,
telecopier, telex, telephone or in person to each director, at his
address as appears on the records of this Corporation. The notice
need not state the matter or matters to be considered at the meeting.
The Chairman of the Board or the President may postpone or advance
the date for any of the regular meetings previously scheduled to
another business day during the same month provided he gives notice
of the advanced or postponed date to all directors by mail, telegram,
telex, telecopier, telephone or in person at least five (5) days
previous to the day upon which the regular meeting would otherwise be
held in accordance with the foregoing resolution, and at least five
(5) days before the advanced date of meeting.
3.4 Special Meetings. Special meetings of the Board of Directors may be
called by the Chairman of the Board, the President, or by a majority
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of the Board of Directors. Notice of each special meeting, unless
waived, shall be given by mail, telegram, telecopier, telex,
telephone, or in person to each director at his address as appears on
the records of this Corporation not less than one day prior to the
day on which the meeting is to be held. For purposes of dealing with
an emergency situation, as conclusively determined by the directors
or officer calling the meeting, notice may be given not less than two
hours prior to the meeting. Notice of any special meeting need not
state the purpose or purposes thereof. If the Secretary shall fail
or refuse to give notice, then the notice may be given by the officer
or any of the directors making the call. Attendance at any meeting
of the Board of Directors shall constitute waiver of notice thereof
unless the director attends the meeting for the express purpose of
objecting, and the director objects at the beginning of the meeting,
to the transaction of any business because the meeting was not
lawfully called or convened.
3.5 Place of Meetings. The Board of Directors may hold all of its
meetings at any place within or without the State of Indiana, as it
may from time to time determine.
3.6 Attendance. Unless otherwise provided by law, a director or a member
of a committee of the Board may participate in a meeting of the Board
or the committee by means of conference telephone or similar
communications equipment by which all persons participating can hear
each other, and that participation shall constitute attendance at the
meeting.
3.7 Quorum. A majority of the total number of the Board of Directors
shall be necessary to constitute a quorum for the transaction of
business at any meeting.
3.8 Informal Action. Any action required or permitted to be taken at any
meeting of the Board of Directors or any Committee thereof may be
taken without a meeting, if a written consent to the action
describing the action taken is signed by all of the members of the
Board of Directors or of the Committee, as the case may be, and the
written consent is filed with the minutes of proceedings of the Board
or Committee.
3.9 Vacancies. In the case of an increase in the number of directors, or
if the office of any one or more directors becomes vacant by reason
of death, resignation, retirement, disqualification, removal from
office, failure to elect, or otherwise, a majority of the directors
then in office, though less than a quorum, may fill the newly created
directorships or vacancies at any regular or special meeting,
directors so elected to serve until the next election of the class
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for which the directors have been chosen and until their successors
are elected and qualify.
3.10 Committees. The Board of Directors may, in its discretion, by
resolution passed by a majority of the Board of Directors, designate
one or more Committees, each Committee to consist of one or more of
the directors of this Corporation, which shall have or may exercise
the authority of the Board of Directors in the management of the
business and affairs of this Corporation as shall be conferred or
authorized by the resolution appointing them. No Committee shall
have the power or authority to authorize amending the Articles of
Incorporation, approve a plan of merger or consolidation not
requiring shareholder approval, recommend to the shareholders the
sale, lease or exchange of all or substantially all of this
Corporation's property and assets, recommend to the shareholders a
dissolution of this Corporation or a revocation of a dissolution, or
amend the Bylaws of this Corporation; and unless the resolution,
Bylaws, or Articles of Incorporation expressly so provide, no
Committee shall have the power of authority to declare a dividend or
to authorize the issuance of shares. A majority of any Committee, if
composed of more than two members, may fix the time and place of its
meetings, unless the Board of Directors shall otherwise provide. The
Board shall have the power, at any time, to change the members of any
Committee, to fill vacancies and to discharge any Committee. Each
Committee shall keep minutes of its proceedings and shall report to
the Board of Directors when required by the Board.
3.11 Compensation. Directors may receive compensation for their services
as directors and/or any fixed sums and expenses of attendance for
attendance at each regular or special meeting of the Board of
Directors as may be established by resolution of the Board, provided
that nothing herein contained shall be construed to preclude any
director from serving this Corporation in any other capacity and
receiving compensation therefor.
ARTICLE IV.
OFFICERS AND DEFINITION OF DUTIES
4.1 Officers. The officers of this Corporation shall consist of the
Chairman of the Board, President, one or more Vice Presidents, a
Treasurer, a Secretary and any Assistant Secretaries and Assistant
Treasurers and other officers, including a Controller, that may be
elected by the Board of Directors at the regular meeting of the Board
of Directors. The Chairman of the Board of Directors and the
President shall be elected from the members of the Board of
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Directors. All other officers of this Corporation need not be
members of the Board of Directors. The same person may hold any two
offices except those of President and Secretary.
4.2 Chairman of the Board. The Chairman of the Board shall preside when
present at all meetings of the Board of Directors and the
shareholders. He may sign and execute in the name of the Corporation
all bonds, deeds, mortgages, contracts, notes, checks and other
obligations in the ordinary scope of the business of the Corporation
or as may be specifically authorized by the Board of Directors. The
Chairman of the Board shall from time to time report to the Board of
Directors all matters within his knowledge which the interests of the
Corporation may require to be brought to its notice.
4.3 President. The President shall be the Chief Executive Officer of
this Corporation and shall have general supervision of the business
and affairs of this Corporation and over all other officers,
employees and agents of this Corporation and shall perform whatever
other duties may be prescribed by the Board of Directors from time to
time. As Chief Executive Officer, the President may delegate
whatever duties he/she deems advisable to the other officers of this
Corporation. The President shall carry into effect all resolutions
and orders of the Board of Directors and shall also have the general
administrative powers and duties usually vested in the office of a
president of a corporation. In the absence or disability of the
Chairman of the Board of Directors, the President shall generally
have the powers and duties of the Chairman of the Board of Directors.
The President may sign and execute in the name of this Corporation
all bonds, deeds, mortgages, contracts, notes, checks and other
obligations in the ordinary scope of the business of this Corporation
or as may be specifically authorized by the Board of Directors.
4.4 Vice Presidents. The Vice Presidents may be given designations
appropriate to their responsibilities, such as Executive Vice
President, Financial Vice President, Vice President-Sales, Vice
President-Operations, Vice President in charge of a particular
division, and any other designations the Board of Directors shall
from time to time establish by resolution, or in the absence of
designation by the Board of Directors, as may be established by the
President. In the absence or disability of the President, the
Executive Vice President, or any Vice President designated by the
Chairman of the Board or the Board of Directors, shall have the
powers and duties of the President. The Vice Presidents from time to
time elected or appointed shall have the powers and duties
established by resolution of the Board of Directors, or in the
absence of Board resolutions, as may be delegated to them by the
Chairman of the Board or the President.
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4.5 Treasurer. The Treasurer shall: (a) have the custody of all the
corporate funds and securities and shall keep or cause to be kept
full and accurate accounts of the financial affairs of this
Corporation; (b) deposit or cause to be deposited all moneys and
other valuable effects in the name and to the credit of this
Corporation in any depositories designated by the Board of Directors;
(c) disburse or cause to be disbursed the funds of this Corporation
as may be ordered by the Board of Directors; (d) render to the
President and Board of Directors, at the regular meeting of the Board
or whenever they may require it, an account of all his transactions
as Treasurer and of the financial condition of this Corporation; (e)
give this Corporation a bond, if required by the Board of Directors,
in a sum and with one or more sureties satisfactory to the Board, for
the faithful performance of the duties of his office; and (f) perform
all the duties incident to the office of Treasurer and all other
duties as from time to time may be assigned to him by the Chairman of
the Board, President, or by the Board of Directors.
4.6 Secretary. The Secretary shall be responsible for maintaining
records of meetings of the Board of Directors, meetings of the
shareholders and meetings of the committees, which from time to time
may be appointed under authority of these Bylaws, in books provided
by this Corporation for these purposes. The Secretary shall give, or
cause to be given, notice of all meetings of the Board of Directors
and shareholders. He shall prepare, or cause to be prepared, all
lists of shareholders and their addresses required to be prepared by
the provisions of any present or future statute of the State of
Indiana. The Secretary shall keep in safe custody the seal of this
Corporation and, when authorized by the Board, affix it to any
instrument requiring it. He shall perform all duties which are
incident to the office of secretary of a corporation and shall
perform all other duties as from time to time may be prescribed by
the Chairman of the Board, the President, or the Board of Directors.
4.7 Assistant Secretaries and Assistant Treasurers. In the absence or
disability of the Secretary or Treasurer, their duties shall be
performed and their powers exercised, respectively, by any Assistant
Secretary or any Assistant Treasurer which the Board of Directors may
have elected or appointed. The Assistant Secretaries and Assistant
Treasurers shall have all other duties and powers as may have been
delegated to them respectively by the Secretary or the Treasurer or
by the Board of Directors.
4.8 Controller. The Controller shall maintain proper audit control over
the operations of this Corporation and be generally responsible for
the accounting system employed by this Corporation and the accounting
principles adopted by the various departments. He shall direct the
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budgetary control, general accounting, cost accounting, and
statistical activities of this Corporation and shall supervise
activities in connection with credits and collections, taxes, and
physical inventories. The Controller shall prepare and furnish
reports and statements showing the financial condition of this
Corporation as shall be required of him by the Chairman of the Board,
President or the Board of Directors, and shall perform all other
duties and exercise any other powers the Chairman of the Board,
President or the Board of Directors may from time to time determine.
4.9 Removal of Officers. The Board of Directors may remove any officer
or agent by a majority vote of the total number of directors
whenever, in their judgment, the best interests of this Corporation
will be served thereby. All agents and employees, other than
officers elected or appointed by the Board of Directors, shall hold
office at the discretion of the Chairman of the Board.
4.10 Delegation of Duties. In case of the absence of any officer of this
Corporation, the Board of Directors may delegate, for the time being,
the duties of that officer to any other officer or to any Director.
4.11 Compensation. The compensation of all officers shall be fixed by the
Board of Directors.
4.12 Bonds. The Board of Directors may, by resolution, require any
officer or employee of this Corporation to furnish to this
Corporation a bond in any amount as may be approved by the directors,
conditioned upon the faithful performance of his duties and for the
account of all money, securities, or property coming into his hands.
ARTICLE V.
CERTIFICATES OF STOCK AND THEIR TRANSFER
5.1 Form of Certificates. This Corporation shall cause to be issued to
each shareholder a certificate or certificates representing the
number of shares of capital stock owned by that shareholder. The
certificates shall be numbered consecutively and shall exhibit the
shareholders's name, number and class of shares and the designation
of the series, if any, the certificate represents. The certificates
must state the name of the issuing corporation and that it is
organized under the laws of Indiana. The certificates shall be
signed by the Chairman of the Board or the President or Vice
President and by the Secretary or Assistant Secretary, or the
Treasurer or Assistant Treasurer. Any or all signatures on the
certificate may be facsimiles either engraved or printed. Facsimile
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signatures may be of the officers of this Corporation designated
above who are officers at the time of the issuance of the
certificates or who were officers at the time of the printing or
engraving of the certificates, whether or not that person has
continued to hold that office. The certificates when issued shall be
signed by the transfer agent and by the registrar who have been duly
appointed by the Board of Directors, provided that any signature of a
transfer agent may be facsimile of any certificate signed by a
registrar.
5.2 Transfer of Certificates. The shares of the capital stock of this
Corporation shall be transferable only upon the books of this
Corporation by the owner in person or by the legal representative of
the person, and upon transfer, the old certificates shall be
surrendered to the person in charge of the stock transfer books and
ledgers, or to any other person designated by the Board of Directors,
who shall cancel the certificate and thereupon issue a new
certificate or certificates therefor. Whenever a transfer by its
terms is made for collateral security and not absolutely, the fact
shall be so expressed in the entry of the transfer if, when the
certificates are presented to this Corporation for transfer, both the
transferor and transferee request this Corporation to do so.
5.3 Transfer Books; Record Date. The Board of Directors shall have the
power to close the stock transfer books of this Corporation for a
period not exceeding seventy (70) days preceding the date of any
meeting of the shareholders or the date for payment of any dividend,
provided, however, that in lieu of closing the stock transfer books
as aforesaid, the Board of Directors may fix a date not exceeding
seventy (70) days nor less than ten (10) days preceding the date of
any meeting of shareholders, or not more than seventy (70) days
preceding the date for the payment of dividend, or the date for the
allotment of rights, or the date when any change or conversion or
exchange of capital stock shall go into effect, as a record date for
the determination of the shareholder entitled to notice of, and to
vote at any meeting, or entitled to receive payment of any dividend,
or to any allotment of rights, or to exercise the rights in respect
of any change, conversion or exchange of capital stock.
5.4 Transfer Agents and Registrars. The Board of Directors may appoint
transfer agents and registrars of transfers, and thereafter may
require all stock certificates to bear the signature of a transfer
agent and a registrar of transfers.
5.5 Registered Holder. This Corporation shall be entitled to treat the
registered holder of any shares as the absolute owner thereof, and
accordingly shall not be bound to recognize any equitable or other
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claim to, or interest therein, on the part of any other person,
whether or not it shall have express or other notice thereof, save as
expressly provided by the laws of the State of Indiana.
5.6 Regulation. The Board of Directors shall have the power and
authority to make all rules and regulations they deem expedient
concerning the issue, transfer, and registration of the certificates
for the shares of the capital stock of this Corporation.
5.7 Lost or Destroyed Certificates. In the event a certificate shall be
lost, stolen, or destroyed, a replacement certificate thereof may be
issued upon filing with this Corporation an indemnity bond approved
by the President and the Secretary or by the Board of Directors (by
general or specific resolution). However, the Board may, in its
discretion, refuse to issue a new certificate, save upon the order of
some court having jurisdiction in the matter.
ARTICLE VI.
DIVIDENDS
Dividends upon the capital stock of this Corporation shall be payable
as the directors may order, subject to the Articles of Incorporation and
the Business Corporation Law of the State of Indiana.
ARTICLE VII.
CHECKS, NOTES, ETC.
7.1 Accounts. All funds of this Corporation shall be deposited from time
to time to the credit of this Corporation in the general or special
accounts in banks or other depositories as the Board may from time to
time designate, or as may be designated by any officer or officers of
this Corporation to whom the power so to do may be delegated by the
Board.
7.2 Signatures Required. All checks, drafts, or other orders for the
payment of money, obligations, notes or other evidences of indebtedness
shall be signed or endorsed by the officer or officers or any other person
or persons designated from time to time by the Board or by any officer or
officers to whom this power may be delegated by the Board.
ARTICLE VIII.
BOOKS AND ACCOUNTS
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The books, accounts and records of this Corporation shall be kept at the
office of this Corporation in the City of Niles, Michigan, or at any other
place which the Board of Directors of this Corporation shall from time to
time determine. The books, accounts and records of this Corporation shall
be open to inspection by any member of the Board of Directors during the
usual hours of business for any purpose reasonably related to the
director's position as director.
ARTICLE IX.
WAIVER OF NOTICE
Whenever a notice is required to be given under the provisions of
these Bylaws or under the provisions of the Articles of Incorporation or
under the provisions of the Indiana Business Corporation Law, a waiver may
be made by telegram, telex, telecopier, or other writing signed by the
person or persons entitled to the notice either before or after the
meeting. The waiver by the person entitled to the notice must be
delivered to this Corporation for inclusion in the minutes or filing with
the corporate records. The attendance and participation in a meeting by
any shareholder or director shall constitute a Waiver of Notice by the
shareholder or director for the meeting, unless at the beginning of the
meeting the person objects to the meeting, or the person objects to the
consideration of a particular matter at the meeting where the matter is
presented for consideration.
ARTICLE X.
ALTERATION OF BYLAWS
10.1 Amendment by the Board. The Board of Directors by a vote of a
majority of the directors may at any regular or special meeting amend
the Bylaws provided that notice of the proposed change shall be
given to each director in writing at least ten (10) days in advance
of this meeting.
ARTICLE XI.
INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES
11.1 General. The Corporation shall, to the fullest extent to which it is
empowered to do so by the Indiana Business Corporation Law, or any
other applicable laws, as from time to time in effect, indemnify any
person who was or is a party, or is threatened to be made a party, to
any threatened, pending or completed action, suit or proceeding,
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whether civil, criminal, administrative or investigative and whether
formal or informal, by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or who,
while serving as such director, officer, employee or agent of the
corporation, is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise, whether for profit or not, against expenses
(including counsel fees), judgments, settlements, penalties and fines
(including excise taxes assessed with respect to employee benefit
plans) actually or reasonably incurred by him in accordance with such
action, suit or proceeding, if he acted in good faith and in a manner
he reasonably believed, in the case of conduct in his official
capacity, was in the best interest of the corporation, and in all
other cases, was not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding,
he either had reasonable cause to believe his conduct was lawful or
no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement or conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the
person did not meet the prescribed standard of conduct.
11.2 Authorization of Indemnification. To the extent that a director,
officer, employee or agent of the corporation has been successful, on
the merits or otherwise, in the defense of any action, suit or
proceeding referred to in Section 1 of this Article, or in the
defense of any claim, issue or matter therein, the corporation shall
indemnify such person against expenses (including counsel fees)
actually and reasonably incurred by such person in connection
therewith. Any other indemnification under Section 1 of this Article
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case, upon a determination that
indemnification of the director, officer, employee or agent is
permissible in the circumstances because he has met the applicable
standard of conduct. Such determination shall be made (1) by the
Board of Directors by a majority vote of a quorum consisting of
directors who were not at the time parties to such action, suit or
proceeding; or (2) if a quorum cannot be obtained under subdivision
(1), by majority vote of a committee duly designated by the Board of
Directors (in which designation directors who are parties may
participate), consisting solely of two or more directors not at the
time parties to such action, suit or proceeding; or (3) by special
legal counsel: (A) selected by the Board of Directors or its
committee in the manner prescribed in subdivision (1) or (2), or (B)
if a quorum of the Board of Directors cannot be obtained under
subdivision (1) and a committee cannot be designated under
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subdivision (2), selected by majority vote of the full Board of
Directors (in which selection directors who are parties may
participate); or (4) by the shareholders, but shares owned by or
voted under the control of directors who are at the time parties to
such action, suit or proceeding may not be voted on the
determination.
Authorization of indemnification and evaluation as to reasonableness
of expenses shall be made in the same manner as the determination
that indemnification is permissible, except that if the determination
is made by special legal counsel, authorization of indemnification
and evaluation as to reasonableness of expenses shall be made by
those entitled under subsection (3) to select counsel.
11.3 Good Faith Denied. For purposes of any determination under Section 1
of this Article, a person shall be deemed to have acted in good faith
and to have otherwise met the applicable standard of conduct set
forth in Section 1 if his action is based on information, opinions, -
reports, or statements, including financial statements and other
financial data, if prepared or presented by (1) one or more officers
or employees of the corporation or other enterprise whom he
reasonably believes to be reliable and competent in the matters
presented; (2) legal counsel, public accountants, appraisers or other
persons as to matters he reasonably believes are within the person's
professional or expert competence; or (3) a committee of the Board of
Directors of the corporation or another enterprise of which the
person is not a member if he reasonably believes the committee merits
confidence. The term "another enterprise" as used in this Section 3
shall mean any other corporation or any partnership, joint venture,
trust, employee benefit plan or other enterprise of which such person
is or was serving at the request of the corporation as a director,
officer, partner, trustee, employee or agent. The provisions of this
Section 3 shall not be deemed to be exclusive or to limit in any way
the circumstances in which a person may be deemed to have met the
applicable standards of conduct set forth in Section 1 of this
Article.
11.4 Payment of Expenses in Advance. Expenses incurred in connection with
any civil or criminal action, suit or proceeding may be paid for or
reimbursed by the corporation in advance of the final disposition of
such action, suit or proceeding, as authorized in the specific case
in the same manner described in Section 2 of this Article, upon
receipt of a written affirmation of the director, officer, employee
or agent's good faith belief that he has met the standard of conduct
described in Section 1 of this Article and upon receipt of a written
undertaking by or on behalf of the director, officer, employee or
agent to repay such amount if it shall ultimately be determined that
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he did not meet the standard of conduct set forth in this Article,
and a determination is made that the facts then known to those making
the determination would not preclude indemnification under this
Article.
11.5 Provisions Not Exclusive. The indemnification provided by this
Article shall not be deemed exclusive of any other rights to which a
person seeking indemnification may be entitled under the Articles of
Incorporation, any other bylaw, any resolution of the Board of
Directors or shareholders, any other authorization, whenever adopted,
after notice, by a majority vote of all voting shares then
outstanding, or any contract, both as to action in his official
capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a
director, officer, employee or agent, and shall inure to the benefit
of the heirs, executors and administrators of such a person.
11.6 Vested Right to Indemnification. The right of any individual to
indemnification under this Article shall vest at the time of
occurrence or performance of any event, act or omission giving rise
to any action, suit or proceeding of the nature referred to in
Section 1 of this Article and, once vested, shall not later be
impaired as a result of any amendment, repeal, alteration or other
modification of any or all of these bylaws. Notwithstanding the
foregoing, the indemnification afforded under this Article shall be
applicable to all alleged prior acts or omissions of any individual
seeking indemnification hereunder, regardless of the fact that such
alleged acts or omissions may have occurred prior to the adoption of
this Article, and to the extent such prior acts or omissions cannot
be deemed to be covered by this Article, the right of any individual
to indemnification shall be governed by the indemnification
provisions in effect at the time of such prior acts or omissions.
11.7 Insurance. The corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or
agent of the corporation, or who is or was serving at the request of
the corporation as a director, officer, partner, trustee, employee or
agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, against any liability
asserted against or incurred by the individual in that capacity or
arising from the individual's status as an inspector, officer,
employee or agent, whether or not the corporation would have power to
indemnify the individual against the same liability under this
Article.
11.8 Additional Definitions. For purposes of this Article, references to
"the corporation" shall include any domestic or foreign predecessor
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entity of the corporation in a merger or other transaction in which
the predecessor's existence ceased upon consummation of the -
transaction.
For purposes of this Article, serving an employee benefit plan at the
request of the corporation shall include any service as a director,
officer, employee or agent of the corporation which imposes duties
on, or involves services by such director, officer, employee, or
agent with respect to an employee benefit plan, its participants, or
beneficiaries. A person who acted in good faith and in a manner he
reasonably believed to be in the best interests of the participants
and beneficiaries of an employee benefit plan shall be deemed to have
acted in a manner "not opposed to the best interest of the
corporation" referred to in this Article.
For purposes of this Article, "party" includes any individual who is
or was a plaintiff, defendant or respondent in any action, suit or
proceeding or who is threatened to be made a named defendant or
respondent in any action, suit or proceeding.
For purposes of this Article, "official capacity," when used with
respect to a director, shall mean the office of director of the
corporation; and when used with respect to an individual other than a
director, shall mean the office in the corporation held by the
officer or the employment or agency relationship undertaken by the
employee or agent on behalf of the corporation. "Official capacity"
does not include service for any foreign or domestic corporation or
any partnership, limited liability company, joint venture, trust,
employee benefit plan, or other enterprise, whether for profit or
not.
11.9 Payments a Business Expense. Any payments made to any indemnified
party under these bylaws or under any other right to indemnification
shall be deemed to be an ordinary and necessary business expense of
the corporation, and payment thereof shall not subject any person
responsible for the payment, or the Board of Directors, to any action
for corporate waste or to any similar action.
-19-
<PAGE>
EXHIBIT 10(v)
NATIONAL-STANDARD
DEFERRED COMPENSATION PLAN
Effective November 19, 1986
This is a conformed copy of the
Plan which reflects all changes
through the Third Amendment.
<PAGE>
NATIONAL-STANDARD
DEFERRED COMPENSATION PLAN
1. Name of Plan.
This plan shall be known as the National-Standard Deferred
Compensation Plan, hereafter referred to as "the Plan."
2. Objective.
The objective of the Plan is to provide an unfunded arrangement under
which eligible personnel may elect to defer a portion or all of their
base compensation and/or bonus to a future date.
3. Eligibility.
All salaried personnel employed by the Company within the United
States and earning $50,000 or more annually shall be eligible to
participate in the Plan.
4. Administration.
The Plan shall be administered by designated representatives of the
Finance and Human Resource Departments under the direction of the
Chief Executive Officer.
5. Rules and Regulations.
The Compensation Committee of the Board of Directors, hereafter
referred to as "the Committee," may establish such rules and
regulations as it deems necessary for effective administration of the
Plan.
6. Participation.
Eligible employees may participate in the Plan by making an
"irrevocable" election to defer a portion of their base salary and/or
bonus earned. Such election shall be on the form provided and must be
filed with the designated Company representative no later than
December 1 of the year "prior" to the year in which the compensation
to be deferred is earned and paid.
7. Effect of Election.
Nothing contained herein shall be deemed to create a trust of any kind
or create any fiduciary relationship. All compensation deferred
hereunder shall be reflected on the Company's books of accounts as
general unsecured and unfunded obligations. Participation in the Plan
<PAGE>
shall not confer on the participant any right to remain employed with
the Company for any period of time, nor the right to receive a bonus
in any year.
8. Interest on Account Balances.
Interest shall accrue on the amount in each participant's account at
the end of each calendar quarter year based upon the participant's
average account balance for such quarter year at a rate of interest
equal to:
(a) with respect to quarter years ending on or before December 31,
1987, the three (3) month Certificate of Deposit rate, or
(b) with respect to quarter years ending after January 1, 1988, the
thirty (30) year fixed Federal National Mortgage Association
(FNMA) rate.
published in The Wall Street Journal as of the close of business on
the first day of the first month of such calendar quarter year.
9. Effect on Other Benefit Plans.
Compensation deferred under this Plan shall be considered in computing
benefits under other Company benefit plans only in accordance with the
provisions of such other plans and applicable federal, state, or local
laws and regulations.
10. Designation of Beneficiaries.
Each participant shall have a right to designate beneficiaries who are
to receive payments due the participant under the Plan in the event of
the participant's death. The designation of beneficiaries shall be in
writing on the form provided, which must be signed by the participant.
Should a beneficiary not be designated or a designated beneficiary die
without a secondary or designated successor beneficiary, distribution
shall be made to the participant's estate.
11. Disability.
If a participant or a designated beneficiary is under legal disability
or, in the opinion of the Company, is in any way incapacitated to the
point of not being able to manage his or her financial affairs, the
Company may direct that any payment hereunder be made to the
participant's or beneficiary's legal representative, or in any manner
it determines is in the best interest of the participant or
beneficiary.
-2-
<PAGE>
12. Hardship.
Although elections under the Plan are irrevocable, termination of
current year deferral or withdrawal from account balances prior to
elected periods may be made in case of severe financial hardship due
only to health or educational needs. Termination or withdrawal for
any other material needs will not be permitted. Requests for such
termination of deferral or for withdrawal of funds must be submitted
in writing with proof of hardship to the Committee for approval. Any
funds withdrawn under such conditions shall be distributed via a
regular payroll check processed with the next available payroll.
13. Other Termination of Employment.
If a participant is terminated from the employment of the Company for
any reason other than retirement, disability or death, the Company
shall have the right, in its sole discretion, to pay the balance of
the deferred amount in the participant's account in a lump sum, or in
installments within a reasonable period of time following such
termination of employment, i.e., the next available payroll following
the date of termination, irrespective of the manner or time elected by
the participant to receive such deferred payments.
14. Change of Control.
In the event of a change of control of the Company, the amount in each
participant's account on the day immediately preceding the change of
control date (as hereinafter defined) shall be paid to the participant
in a lump sum within a reasonable period of time, i.e., the next
available payroll following the change of control date, irrespective
of the manner or time elected by the participant to receive payment of
the amount. In determining the amount of each participant's account,
interest shall be accrued on the day immediately preceding the change
of control date, in accordance with Item 8 of the Plan, as if that day
were the last day of the calendar quarter year. For purposes of this
item the change of control date shall mean the earliest date on which:
(a) any "person" [as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act")] becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
the Company, representing at least 25% of the combined voting
power of the Company's then outstanding securities, or
(b) a majority of the individuals comprising the Company's Board of
Directors have not served in such capacity for the entire two-
year period immediately preceding such date, or
-3-
<PAGE>
(c) a change occurs of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Exchange Act;
provided, however, that if the transactions or elections causing a
date to be a change of control date shall have been approved by an
affirmative vote of a majority of the "continuing directors," such
date shall not be deemed to be a change of control date. A
"continuing director" means a person who was a member of the Board of
Directors of the Company immediately prior to the transactions or
elections, resulting in there being a change of control date, or who
was designated (before his initial election or appointment as a
director) as a continuing director by a majority of the whole Board of
Directors, but only if the majority of the whole Board of Directors
then consisted of continuing directors, or if a majority of the whole
Board of Directors did not then consist of continuing directors, by a
majority of the then continuing directors.
15. Payment of Account Balances.
The Company shall pay to each participant or beneficiary from the
general assets of the Company the amount of his or her account balance
in the manner elected by the participant on the next available payroll
following the date elected, unless such payments are to be made under
Items 12, 13, or 14 herein.
16. Withholding.
The Company shall withhold the amount of local, state or federal taxes
required by law from payments ultimately paid under the Plan.
17. No Alienation.
To the extent permitted by law, the right of any participant or any
beneficiary to any payment hereunder shall not be subject in any
manner to attachment or other legal process for the debts of the
participant or beneficiary, and any such benefit or payment shall not
be subject to anticipation, sale, alienation, transfer, assignment or
encumbrance.
18. Determination of Taxability.
Should the Internal Revenue Service determine that any amount deferred
by the participant under this plan is currently taxable, even though
not received by the participant, the Company shall pay to such
participant, immediately upon receipt of a copy of the final IRS
determination of taxability, the amount of deferred compensation
deemed to be subject to tax.
-4-
<PAGE>
19. Amendments or Termination.
The Plan may be terminated or amended at any time in whole or in part
as determined by the Board of Directors of the Company.
20. Effective Date.
This Plan shall be effective as of November 19, 1986.
21. Plan Year.
The Plan year will be the calendar year from January to December
following the election made on the previous December 1.
-5-
<PAGE>
SUPPLEMENT A
TO
NATIONAL-STANDARD DEFERRED COMPENSATION PLAN
A-1 Purpose.
The purpose of this Supplement A is to allow eligible employees under
the Plan to make a special deferral election with respect to the
amount (if any) of before-tax contributions which they may be
prevented from making under the National-Standard Company Employees'
Stock Savings Plan (the "ESSP"), due to the nondiscrimination
requirements of Section 401(k) or the maximum limitations on elective
deferrals under Section 402(g) of the Internal Revenue Code, and to
provide for a Company contribution hereunder based upon the amount of
such deferrals as described in Paragraph A-5 below. Elections made
under this Supplement A shall be in addition to any other deferral
election made under the Plan.
A-2 Effective Date.
The effective date of this Supplement A is December 1, 1987.
A-3 Special Election for 1987.
Eligible employees may file an irrevocable written election prior to
December 1, 1987 to defer up to four percent (4%) of their base salary
for December 1987, provided that the amount deferred shall not exceed
the difference between (a) and (b) below:
(a) The amount the employee would have contributed to the ESSP as a
"matching contribution" during 1987 if his election to make
matching contributions under the ESSP had not been cut back, due
to the Section 401(k) nondiscrimination requirements or the
Section 402(g) elective deferral limitations.
(b) The amount actually contributed by the eligible employee as a
"matching contribution" under the ESSP for 1987.
A-4 Special Election for 1988 and Future Years.
Each eligible employee may make an irrevocable written election prior
to December 1 of the year "prior" to the year in which compensation is
earned to defer an amount of such compensation equal to the amount
such employee is prevented from contributing to the ESSP as a
"matching contribution" under the ESSP, due to the Section 401(k)
nondiscrimination rules or the Section 402(g) elective deferral
limitations.
-6-
<PAGE>
A-5 Company Contributions.
For each calendar year, the Company will contribute on behalf of each
participant hereunder an amount which bears the same proportion to the
amount deferred by the participant under this Supplement A for that
year as the Company's contributions under the ESSP for that year,
which are based upon (or are allocated according to) the participant's
"matching contributions," bear to the participant's "matching
contributions" for that year under the ESSP; provided that the amount
deferred by a participant for any year under this Supplement A which
shall be recognized for purposes of this Paragraph A-5 shall not
exceed the maximum amount which could be so deferred by that
participant for that year under this Supplement A due to the Section
402(g) elective deferral limitation.
A-6 Terms.
The definitions of terms used under the National-Standard Company
Employees' Stock Savings Plan, such as "matching contributions," are
hereby incorporated by reference. All other terms and conditions of
this Deferred Compensation Plan shall apply to this Supplement A,
except that where such terms and conditions of the Plan and this
Supplement A conflict, the terms and provisions of this Supplement A
shall govern.
-7-
<PAGE> <PAGE>
NATIONAL-STANDARD COMPANY
EXHIBIT 11
Earnings Per Share Calculation
<TABLE>
<CAPTION>
(In Thousands)
1994 1993 1992
<S> <C> <C> <C>
(In Thousands)
Weighted average number of
Common Shares outstanding . . . . . . . 5,365 5,108 4,492
Weighted average number of nonleveraged,
unallocated Common Shares in the
Employee Stock Ownership Plan . . . . . - (23) (113)
Common Shares used in calculating
earnings per share . . . . . . . . . . 5,365 5,085 4,379
</TABLE>
<PAGE>
NATIONAL-STANDARD COMPANY
EXHIBIT 21
Parents and Subsidiaries
The Registrant has no parent.
All subsidiaries of the Registrant, National-Standard Company, an Indiana
Corporation, listed below are included in the consolidated financial state-
ments.
State or Country
in which Incorpor- % of Voting
ated or Organized Securities
Owned
National-Standard Export Company Delaware 100%
National-Standard Company of Canada, Limited Canada 100
National-Standard Company, Limited United Kingdom 100
National-Standard (Wire Cord), Limited United Kingdom 100(1)
(1) 100% owned by National-Standard Company, Limited
A domestic affiliate, 50% owned, is not considered significant and is not
named above. Financial statements of this affiliate are included in the
consolidated financial statements on an equity basis.
<PAGE>
EXHIBIT 23
The Board of Directors
National-Standard Company:
We consent to incorporation by reference in the registration statements
(Nos. 2-71276 and 33-68926) on Form S-8 of National-Standard Company of our
report dated November 8, 1994; relating to the consolidated balance sheets
of National-Standard Company and subsidiaries as of September 30, 1994 and
1993, and the related consolidated statements of operations, shareholders'
equity and cash flows for each of the years in the three-year period ended
September 30, 1994, and all related schedules, which report appears in the
September 30, 1994 annual report on Form 10-K of National-Standard Company.
Our report refers to a change in accounting.
KPMG Peat Marwick LLP
Chicago, Illinois
December 2, 1994
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
The undersigned, a director of NATIONAL-STANDARD COMPANY (the
"Company"), does hereby constitute and appoint R. J. VanSTEELANDT his true
and lawful attorney-in-fact and agent, with full power of substitution and
re-substitution, for him and in his name, place and stead, to sign the
Company's Form 10-K Annual Report pursuant to Section 13 of the Securities
Exchange Act of 1934 for the fiscal year ended September 30, 1994, and any
amendments thereto and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto the attorney-in-fact full power and authority to
sign the 10-K on behalf of the undersigned and to make such filing, as
fully to all intents and purposes as the undersigned might or could do in
person, hereby ratifying and confirming all that the attorney-in-fact, or
his substitutes, may lawfully do or cause to be done by virtue hereof.
Date: November 16, 1994
/s/ Harold G. Bernthal L.S.
Harold G. Bernthal
<PAGE>
POWER OF ATTORNEY
The undersigned, a director of NATIONAL-STANDARD COMPANY (the
"Company"), does hereby constitute and appoint R. J. VanSTEELANDT his true
and lawful attorney-in-fact and agent, with full power of substitution and
re-substitution, for him and in his name, place and stead, to sign the
Company's Form 10-K Annual Report pursuant to Section 13 of the Securities
Exchange Act of 1934 for the fiscal year ended September 30, 1994, and any
amendments thereto and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto the attorney-in-fact full power and authority to
sign the 10-K on behalf of the undersigned and to make such filing, as
fully to all intents and purposes as the undersigned might or could do in
person, hereby ratifying and confirming all that the attorney-in-fact, or
his substitutes, may lawfully do or cause to be done by virtue hereof.
Date: November 16, 1994
/s/ David F. Craigmile L.S.
David F. Craigmile
<PAGE>
POWER OF ATTORNEY
The undersigned, a director of NATIONAL-STANDARD COMPANY (the
"Company"), does hereby constitute and appoint R. J. VanSTEELANDT his true
and lawful attorney-in-fact and agent, with full power of substitution and
re-substitution, for him and in his name, place and stead, to sign the
Company's Form 10-K Annual Report pursuant to Section 13 of the Securities
Exchange Act of 1934 for the fiscal year ended September 30, 1994, and any
amendments thereto and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto the attorney-in-fact full power and authority to
sign the 10-K on behalf of the undersigned and to make such filing, as
fully to all intents and purposes as the undersigned might or could do in
person, hereby ratifying and confirming all that the attorney-in-fact, or
his substitutes, may lawfully do or cause to be done by virtue hereof.
Date: November 16, 1994
/s/ John E. Guth, Jr. L.S.
John E. Guth, Jr.
<PAGE>
POWER OF ATTORNEY
The undersigned, a director of NATIONAL-STANDARD COMPANY (the
"Company"), does hereby constitute and appoint R. J. VanSTEELANDT his true
and lawful attorney-in-fact and agent, with full power of substitution and
re-substitution, for him and in his name, place and stead, to sign the
Company's Form 10-K Annual Report pursuant to Section 13 of the Securities
Exchange Act of 1934 for the fiscal year ended September 30, 1994, and any
amendments thereto and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto the attorney-in-fact full power and authority to
sign the 10-K on behalf of the undersigned and to make such filing, as
fully to all intents and purposes as the undersigned might or could do in
person, hereby ratifying and confirming all that the attorney-in-fact, or
his substitutes, may lawfully do or cause to be done by virtue hereof.
Date: November 16, 1994
/s/ Ernest J. Nagy L.S.
Ernest J. Nagy
<PAGE>
POWER OF ATTORNEY
The undersigned, a director of NATIONAL-STANDARD COMPANY (the
"Company"), does hereby constitute and appoint R. J. VanSTEELANDT his true
and lawful attorney-in-fact and agent, with full power of substitution and
re-substitution, for him and in his name, place and stead, to sign the
Company's Form 10-K Annual Report pursuant to Section 13 of the Securities
Exchange Act of 1934 for the fiscal year ended September 30, 1994, and any
amendments thereto and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto the attorney-in-fact full power and authority to
sign the 10-K on behalf of the undersigned and to make such filing, as
fully to all intents and purposes as the undersigned might or could do in
person, hereby ratifying and confirming all that the attorney-in-fact, or
his substitutes, may lawfully do or cause to be done by virtue hereof.
Date: November 16, 1994
/s/ Charles E. Schroeder L.S.
Charles E. Schroeder
<PAGE>
POWER OF ATTORNEY
The undersigned, a director of NATIONAL-STANDARD COMPANY (the
"Company"), does hereby constitute and appoint R. J. VanSTEELANDT his true
and lawful attorney-in-fact and agent, with full power of substitution and
re-substitution, for him and in his name, place and stead, to sign the
Company's Form 10-K Annual Report pursuant to Section 13 of the Securities
Exchange Act of 1934 for the fiscal year ended September 30, 1994, and any
amendments thereto and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto the attorney-in-fact full power and authority to
sign the 10-K on behalf of the undersigned and to make such filing, as
fully to all intents and purposes as the undersigned might or could do in
person, hereby ratifying and confirming all that the attorney-in-fact, or
his substitutes, may lawfully do or cause to be done by virtue hereof.
Date: November 16, 1994
/s/ Donald F. Walter L.S.
Donald F. Walter
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains annual summary financial information extracted from
National-Standard Company 1994 Annual Form 10-K and is qualified in its entirety
by reference to such form 10-K filing.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-END> SEP-30-1994
<CASH> 378
<SECURITIES> 0
<RECEIVABLES> 25,080
<ALLOWANCES> 398
<INVENTORY> 25,146
<CURRENT-ASSETS> 55,043
<PP&E> 141,148
<DEPRECIATION> 98,286
<TOTAL-ASSETS> 108,685
<CURRENT-LIABILITIES> 48,780
<BONDS> 0
<COMMON> 27,384
0
0
<OTHER-SE> (55,650)
<TOTAL-LIABILITY-AND-EQUITY> 108,685
<SALES> 217,916
<TOTAL-REVENUES> 217,916
<CGS> 194,060
<TOTAL-COSTS> 194,060
<OTHER-EXPENSES> (426)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,885
<INCOME-PRETAX> (4,569)
<INCOME-TAX> 56
<INCOME-CONTINUING> (4,625)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,625)
<EPS-PRIMARY> (.86)
<EPS-DILUTED> (.86)
</TABLE>
