CONFORMED COPY
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
X Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [Fee Required]
For the fiscal year ended December 31, 1995
Transition Report Pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required]
For the transition period from _____________ to _____________
Commission file number 0-12362
BERGER HOLDINGS, LTD.
(Exact name of registrant as specified in its charter)
23-2160077
Pennsylvania (I.R.S.Employer
(State or other jurisdiction of Identification No.)
incorporation or organization)
805 Pennsylvania Boulevard, Feasterville, PA 19053
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 215-355-1200
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to section 12(g) of the Act:
Title of each class
Common Stock, $.01 par value
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by
Section 13 or 15(d) of the securities Exchange Act of 1934 during the
preceding 12 months (or for
such shorter periods 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 files pursuant to Item
405 of Regulation
S-K is not contained herein, and will not be contained, to the best of
registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or
any amendment to this Form 10-K. X
The Index to Exhibits begins on Page 70. Page 1 of 98<PAGE>
As of March 19, 1996, 3,531,439 shares of Common Stock of the registrant
were outstanding
and the aggregate market value of the Common Stock (based upon the average of
high and low bid
prices of these shares on the National Association of Securities Dealers
Automatic Quotation System
on March 19, 1996) of the registrant, held by nonaffiliates was approximately
$2,798,917.(1)
Indicate by check mark whether the registrant has filed all documents and
reports required
to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934
subsequent to the
distribution of securities under a plan confirmed by a court.
Yes X No
Documents Incorporated By Reference: None
____________________
(1) Such figure excludes the shares of Common Stock held by the Company's
executive officers
and directors. The information provided shall in no way be construed as an
admission that
any person whose holdings are excluded from the figure is not an affiliate or
that any person
whose holdings are included is an affiliate and any such admission is hereby
disclaimed.
<PAGE>
PART I
Item 1. Business
Background
Berger Holdings, Ltd. (the "Company") was incorporated in the
Commonwealth of
Pennsylvania on August 28, 1979. Prior to 1983, the Company operated under
the name "Life Care
Communities Corporation" as a private concern which developed life care
communities on a fee basis
for non-profit entities. During 1983, the Company successfully completed a
public offering in which
funds were raised, principally for the purpose of developing and constructing
proprietary life care
facilities.
During 1987, the Company conducted an assessment of its business and the
life care industry,
in general. As a result of such assessment, the management of the Company
recommended, and on
May 5, 1988 the shareholders approved, the Company's withdrawal from the life
care industry in
order to seek alternate investment opportunities. This withdrawal was
effectuated through the sale
of the Company's minority interests in certain joint ventures. Such sales
left the Company with assets
consisting solely of cash and minimal liabilities.
The Company identified Berger Bros Company ("Berger") as a favorable
candidate and on
May 30, 1989 acquired approximately 85% of its common stock through a plan of
reorganization (the
"1989 Plan of Reorganization") in exchange for shares of the Company's common
stock (the
"Common Stock") representing approximately 29% of its outstanding Common
Stock after the
effective date of the 1989 Plan of Reorganization. During 1989, the Company
acquired an additional
15% of the common stock of Berger and issued, in exchange therefor, shares of
its Common Stock
representing approximately 5% of the Company's outstanding Common Stock at
the time of
acquisition, and changed its name to Inovex Industries, Inc.
In 1990 the Company changed its name to Berger Holdings, Ltd. to identify
the Company
more closely with its principal operating subsidiary.
On December 6, 1991, the Company filed a petition for reorganization
under Chapter 11 (the
"Petition") of the United States Bankruptcy Code (the "Code") in the United
States Bankruptcy
Court for the Eastern District of Pennsylvania (the "Bankruptcy Court").
On December 29, 1992, the Bankruptcy Court entered an order confirming
the Third
Amended Joint Plan of Reorganization subject to approval of a settlement
agreement (the "Settlement
Agreement") between the Company and its primary secured lender, Meridian. The
Settlement
Agreement was entered into on February 19, 1993 and approved by the Bankruptcy
Court on April 1,
1993. The effective date of the Plan of Reorganization was April 13, 1993.
The Chapter 11 case was
closed February 28, 1994.
Certain unsecured creditors of the Company elected to convert their debt
into shares of the
Company's Common Stock (the "Common Stock"). An aggregate total of 390,540
shares of
Common Stock were issued to such creditors. In addition, holders of the
common stock of
Graywood Products Company, Inc. ("Graywood") and holders of the Company's then
outstanding
Preferred Stock, converted such stock into shares of the Company's Common
Stock.
In June 1994, the Company formed a wholly owned subsidiary, Berger
Financial Corp.
("Berger Financial") and concurrently merged its two existing wholly owned
subsidiaries, Berger and
Graywood, with Berger being the surviving entity. The Company contributed all
of the issued and
outstanding shares of common stock of Berger to Berger Financial and in
exchange, Berger Financial
assumed the Company's obligation to Meridian under the Settlement Agreement.
Berger Financial
does not conduct any active operations other than acting as a holding company
for its operating
subsidiary, Berger.
The Company reached an agreement with Meridian pursuant to which Meridian
agreed to
accept the sum of $2,241,000 in full payment of the Company's obligation under
the Settlement
Agreement, the principal amount of which was $3,333,462 as of June 30, 1994.
On June 30, 1994, the Company entered into a Loan and Security Agreement
(the "Loan
Agreement") with The CIT Group/Credit Finance, Inc. ("CIT"), pursuant to which
CIT agreed to
make revolving loans (the "Revolving Loan") to the Company up to a maximum
amount of $3.5
million (the "Maximum Credit") including a term loan in the amount of $740,000
(the "Term Loan").
The Revolving Loan and the Term Loan are sometimes hereinafter referred to as
the "CIT Financing
Arrangement."
As of December 31, 1995, the Company has borrowed $2,011,000 under the
Revolving Loan.
The proceeds of the Term Loan were utilized by the Company for working
capital.
The Revolving Loan is for an initial term of two years (the "Initial
Term"), is automatically
renewable for successive two year terms (the "Renewal Term"), unless otherwise
terminated, and
bears an annual interest rate equal to Chemical Bank's Prime Rate ("Prime")
plus 3.50%. Such
interest is payable monthly. The amount the Company may borrow under the
Revolving Loan is
limited to 80% of its Eligible Accounts (as defined in the Loan Agreement )
plus certain specified
percentages of the value of its inventories of finished goods and raw
materials. In the event that the
Company does not have borrowings outstanding under the Revolving Loan in a
minimum amount of
$3.0 million (the "Minimum Borrowing"), it is required to pay a fee equal to
the interest which would
otherwise have been due on the difference between actual borrowings and the
Minimum Borrowing.
In addition to such monthly interest payments and the fee described above, the
Company is obligated
to pay to CIT (i) a fee equal to one-half percent of any unused portion of the
Maximum Credit and
(ii) for each Renewal Term, a fee of two percent of the Maximum Credit payable
in two equal
installments on each anniversary of such renewal. In lieu of payment, all
such fees may be added to
the outstanding Revolving Loan. The Revolving Loan is terminable (i) by
either party within 60 days
written notice at the end of the Initial Term or any Renewal Term or (ii) by
the Company with 30
days written notice that it intends to pay all obligations to CIT in full. In
the event that the Company
exercises its right to terminate upon 30 days notice, it must pay CIT an early
termination fee equal
to three percent of the Maximum Credit if such termination takes place in the
first year of the Initial
Term and one and a half percent if such early termination occurs in the second
year of the Initial Term
or during any Renewal Term.
As security for the Revolving Loan, the Company granted CIT a lien on
and security interest
in all of its tangible and intangible property including, but not limited to,
the Company's inventory and
equipment and fixtures. In addition, the Company has granted CIT a second
mortgage on its real
property.
In the event of the occurrence of an event of default ("Event of
Default"), all obligations under
the Revolving Loan are immediately due and payable. Events of Default
include, but are not limited
to:
(a) Failure to pay any obligation under the Revolving Loan as and
when due;
(b) Any change in the chief executive officer, chief operating
officer or chief
financial officer, unless such change is satisfactory to CIT; and
(c) Any change in the controlling ownership of the Company.
The Term Loan bears a floating interest rate equal to Prime plus 3.50%
and requires the
Company to pay equal consecutive monthly installments of $12,619,06 beginning
on August 1, 1994,
with a final payment of all unpaid principal and accrued interest on the date
of termination of the Loan
Agreement, June 30, 1996. As security for the Term Loan, the Company granted
CIT a first lien on
and a security interest in all of its tangible and intangible property
including, but not limited to, the
Company's inventory, equipment and fixtures. (see Management's Discussion
and Analysis)
Product Lines
The Company is principally engaged in the manufacture and distribution
of roof drainage
products ("RDP") and solid vinyl home siding ("SVHS") products. Since 1993,
the Company has
also engaged in a program of internal development and product expansion.
Internal development has
been characterized chiefly by the modernization and modification of
production facilities, machinery
and equipment and the expansion of existing product lines to emphasize
aluminum-based RDP. In
early 1996, the Company upgraded to a Unix computer operating system, which
will allow for faster
order processing and advanced programming. External development has been
directed principally
towards increasing the sales volume and market penetration of the Company's
products through an
expanded product line.
The Company's RDP product line, consisting of gutters, downspouts, trim
coil and associated
accessories and fittings, is manufactured by the Company at its Feasterville
Facility. The Company
sells RDP through its sales representatives and telemarketing principally to
wholesale distributors who
sell directly to roofers and general contractors for use in the repair
and replacement of roof drainage
systems in existing buildings, primarily residential.
The raw materials used in manufacturing RDP are aluminum, steel and
copper. Supplies of
such materials, in coil, sheet or bar form, are procured by the Company from
various domestic and
foreign suppliers on an as-needed basis. Although the Company believes
that adequate available
sources of supply exist at customarily accepted market prices, trade
restrictions, work stoppages or
adverse weather or political conditions may affect the prices and
availability of such materials. Rapid
increases in prices of raw materials will adversely affect the operations of
the Company in as much as
the cost of such raw materials constitutes the Company's largest single
element of its cost of sales.
The Company is largely dependent for its raw material requirements for
its RDP products on
the following three suppliers: Barmet (aluminum); Revere (copper); and
Coilplus-Pennsylvania, Inc.
(galvanized and painted steel). The remaining raw materials are provided by
a large number of small
suppliers. All raw materials procured by the Company, as well as finished
products, are strictly
scrutinized for quality control using industry and internal guidelines
and standards.
The Company's SVHS product line is produced under the Graywood name
and consist of
solid vinyl home siding and associated accessories. Such products are
manufactured in the
Feasterville Facility. Sales of SVHS products are made to wholesale
distributors.
The Company's SVHS products are fabricated from a compound (the
"Compound")
consisting of polyvinylchloride ("PVC") and coloring agents. The Compound
is prepared by several
subcontractors according to specifications provided by Graywood. Most of the
component materials
used to formulate the Compound are widely available. However, PVC is
produced by relatively few
manufacturers and work stoppages, trade restrictions, and other factors may
affect the availability and
prices of PVC. For the last three years, the Company has purchased all of
its PVC requirements from
Occidental Chemical Corporation. The Company imposes quality control tests
on all materials
procured for use in fabrication as well as finished products.
The following table shows certain information relating to the product
lines of Berger for the
periods indicated:
Calendar Years Ended December 31
(000's Omitted)
1995 1994 1993
RDP (Berger):
Revenues . . . . . . $14,633 $15,088 $10,609
Operating Income/(Loss) ($310) $62 ($74)
Tangible Assets. . . $8,989 $9,037 $8,861
SVHS (Graywood):
Revenues . . . . . . $1,020 $1,508 $1,329
Operating Losses . . --- --- ($112)
Tangible Assets. . . $345 $685 $484
Competition
The Company's business is highly competitive. In general, the building
products market is
highly fragmented. The Company competes with numerous small and large
manufacturers and
fabricators. Some competitors are divisions or subsidiaries of major
corporations with substantially
greater resources than the Company. The Company competes primarily in the
Northeast/Mid-
Atlantic region of the country and management believes it competes by
providing quality products
and service at competitive prices.
Geographic Market
The Company's products are principally sold throughout the states east of
the Mississippi
River with sales concentrated in the Northeast/Mid-Atlantic region. Since
approximately 85% of
Berger's products are used in the renovation of existing houses, the
Northeast/Mid-Atlantic region
is particularly important with respect to the sale of RDP, because a large
concentration of older
houses are located within this region.
Major Customers
No one customer accounts for more than 10% of the Company's sales.
Several customers,
however, account individually for approximately 6% of sales. The Company
has no ongoing
contracts for sales of RDP or SVHS, but rather services customers on a
per-order basis.
Seasonal Nature of the Business
The building products industry is seasonal, particularly in the
Northeast region of the United
States where inclement weather during the winter months usually reduces the
level of building activity
in both the homebuilding and home improvement markets. Typically, the
Company's sales volume is
lowest during December, January and February.
Inventory Practices
The Company's ordinary policy is to obtain, fabricate and/or manufacture
inventory in
sufficient volume so as to provide it with a reasonable cushion in the event
of unexpected fluctuations
in demand. Because of the nature of the RDP and SVHS markets, in which an
order generally must
be filled within 48 to 72 hours of placement, the Company does not have any
substantial backlog.
Management reduced certain inventory items in 1994 to improve turnover and
better react to changes
in sales mixture.
Employees
As of December 31, 1995, the Company and its subsidiaries employed
approximately 75
individuals, of whom 10 were employed in sales and marketing; 56 were
employed in manufacturing
and delivery; and 9 were employed in administration. Approximately 47 of the
employees of Berger
are represented by one of two labor unions. Berger's labor contract with
The International
Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America,
Local 169 expires
November 15, 1997. Berger also has a contract with the Teamsters Local Union
107, which expires
March 31, 1998. The Company and its subsidiaries believe that their employee
relations are good.
Government Regulation
The Company is subject to numerous federal and state regulations
relating to, among other
things, the operations of a manufacturing facility, the storage and disposal
of environmentally
sensitive materials, the control of emission levels, employee safety and
health, employee wages and
general environmental matters. The Company believes that such regulations
are complied with on
a consistent basis, and does not have any outstanding notices from any
federal or state regulatory
body or agency indicating a failure to comply with any such regulations.
Item 2. Properties
Berger currently occupies the Company owned Feasterville Facility, a one
hundred and five
thousand square foot manufacturing and office facility, located in
Feasterville, PA. The Company's
corporate and sales office occupy space at the same location. The Company
also leases
approximately twenty thousand square feet of warehouse space on the same
block as the Feasterville
Facility.
The Company has a mortgage on the Feasterville Facility. The principal
amount of the
mortgage debt on the Feasterville Facility was approximately $1,697,000 at
December 31, 1995.
Such amount is being paid in monthly payments of approximately $17,400 with a
maturity date of
May 2016. The mortgage lender retains the right to declare the entire
balance outstanding due at any
time after April 23, 2001, upon 60 days prior notice.
Item 3. Legal Proceedings
As of the date hereof, the Company is not aware of any legal actions
or proceedings presently
pending against the Company or its subsidiaries.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
PART II
Item 5. Market for the Company's Common Stock and Related Stockholder Matters
The Company's Common Stock is traded in the over-the-counter market and
is included
for quotation on the NASDAQ Bulletin Board under the symbol "BGRH."
The following table sets forth certain information with respect to the
high and low bid
prices of the Company's Common Stock during 1994 and 1995. These quotations
reflect inter-
dealer prices, without retail mark-ups, mark-downs or commissions and may not
represent actual
transactions.
High Low
1994
First Quarter $2 15/16 $1 11/16
Second Quarter 2 3/8 1 3/8
Third Quarter 2 1 1/4
Fourth Quarter 1 5/8 1
1995
First Quarter $1 7/16 $1
Second Quarter 1 3/4 1 1/4
Third Quarter 1 1/4 1 1/16
Fourth Quarter 1 3/8 3/4
On December 31, 1995, there were approximately 500 holders of record of
shares of
Common Stock; however, management believes, based upon the number of annual
reports and
proxy statements requested by nominee holders of the Company's Common Stock,
that the
number of beneficial holders exceeds 1,100.
Dividend Policy
The Company has not paid any cash dividends on its Common Stock to date,
and does not
anticipate or contemplate paying cash dividends in the foreseeable future.
Item 6. Selected Financial Data
Selected Financial Data For Berger Holdings, Ltd. and Subsidiary*
Year Ended December 31
1995 1994 1993 1992 1991
Net Sales $15,653,321 $16,595,918 $11,938,804 $10,138,334 $15,575,095
Cost of Sales 13,378,061 14,413,877 10,495,647 9,390,106 14,257,421
Gross Profit 1,915,260 2,182,041 1,443,157 748,228 1,317,674
Selling, Admin
and General Exp 2,225,685 1,914,700 1,609,681 1,699,482 2,634,321
Amort of Consult Costs - 205,000 20,000 - -
Inc/(Loss) from Oper (310,425) 62,341 (186,524) (951,254) (1,316,647)
Interest Expense (570,420) (520,908) (480,535) (232,053) (748,495)
Other Income (Expense) 30,984 (2,084) - 3,130 114,476
Loss from Continuing
Oper before Extraord
& Reorg Items (894,861) (460,651) (667,059) (1,180,177) (1,950,666)
Reorganization Items - - (110,408) (655,825) (25,000)
Loss before Extra Item(894,861) (460,651) (777,467) (1,836,002) (1,975,666)
Extraordinary Item - 948,207 1,151,270 1,692,887 -
Net Income (Loss) (849,861) 487,556 373,803 (143,115) (1,975,666)
PRIMARY EARNINGS (LOSS)
PER COMMON SHARE:
Inc/(Loss) from Contin
Operations ($0.26) ($0.15) ($0.33) ($7.60) ($9.20)
Extraordinary Item 0.00 .32 .49 7.00 0.00
Share Earn (Loss) p/shr ($0.26) $0.17 $0.16 ($0.60) ($9.20)
TOTAL ASSETS $9,885,339 $10,352,762 $10,054,125 $9,962,816 $11,498,449
LONG TERM DEBT AND
REDEEM COMMON STK $1,676,713 $3,873,299 $4,982,501 $5,401,913 $2,079,125
SHAREHOLDERS' EQUITY$4,635,369 $5,171,321 $3,849,600 $1,887,330 $1,856,681
<PAGE>
Item 7. Management's Discussion and Analysis or Financial Condition and
Results of Operations
Results of Operations
The Company's results of operations for the year ended December 31, 1993
represents the
consolidated operations of the Company and its two then operating
subsidiaries, Berger and
Graywood. The Company's results of operations for the year ended December
31, 1994 and 1995
represent the consolidated operations of the Company its subsidiary, Berger
Financial and Berger
Financial's operating subsidiary, Berger.
Net sales decreased to $15,653,000 in 1995 from $16,596,000 in 1994 and
increased from
$11,939,000 in 1993. The mild winter of 1994/95 and an unusually dry spring
and summer in the
Company's core market during 1995 created most of the decline in sales
from 1994 to 1995.
The Company's gross profit, as a percentage of revenue, equalled 12.2%
in 1995, as
compared with 13.1% in 1994 and 12.1% in 1993. The Company's gross profit is
directly tied to
an increase or decrease in its net sales. In 1995, the Company experienced
relatively even raw
material prices, but was unable to put through any significant price
increases to offset increases in
the costs of direct labor and associated benefits. Even though sales
increased dramatically in
1994, the Company's inability to immediately pass on higher raw material
costs to its customers
in the form of price increases was due to competitive market pressures.
Selling, administrative and general expenses, as a percentage of net
sales, increased to
14.2% in 1995 from 12.8% in 1994 and 13.7% in 1993. In 1995, the
percentage increased
primarily due to increases in advertising and marketing programs.
The loss from operations was $310,000 in 1995 as compared to income
from operations
of $62,000 in 1994 (net of $205,000 of non-cash consulting costs) and a loss
from operations of
$187,000 (net of 20,000 of non-cash consulting costs) in 1993. The loss in
1995 was primarily
caused by a decrease in sales coupled with and increase in sales and
marketing efforts, as well as
increased administrative costs.
Interest expense increased to approximately $570,000 in 1995 up from
$521,000 in 1994
and $481,000 in 1993. Although the Company was able to reduce the
outstanding principal
amount of its debt through the CIT Financing Arrangement, the rate of
interest charged in 1995
and 1994 was significantly higher than that charged in 1993.
Due to the factors described above, the loss before reorganization and
extraordinary items
increased to $850,000 in 1995 from $461,000 (net of $205,000 in non-cash
consulting costs) in
1994 and $667,000 (net of $20,000 in non-cash consulting costs) in 1993.
The net loss was $850,000 in 1995 as compared to net income of $488,000
in 1994 and
$373,000 in 1993. An extraordinary gain of approximately $948,000 in 1994,
and $1,151,000 in
1993 exceeded reorganization expenses of $0 in 1994, and $110,000 in 1993.
Since 1992
approximately $2,558,000 of pre-Petition accounts payable, miscellaneous
notes and bank fees
were exchanged for 390,540 shares of Common Stock of the Company.
Liquidity and Capital Resources
After emergence from bankruptcy in April, 1993, the Company operated
from its own
cash flow in addition to securing approximately $400,000 in trade credit and
raising over
$2,000,000 in capital. Starting in June, 1994 through December 31, 1995,
the Company's
principal sources of operating capital have been cash flow from operations
and the Revolving
Loan and Term Loan provided by CIT.
At December 31, 1995, the working capital of the Company was negative
$470,000
(resulting in a ratio of current assets to current liability of .87 to 1),
compared to $2,104,000
(2.61 to 1) at December 31, 1994. This change was due primarily to the
reclassification of CIT's
Loan to a current liability in 1995 as compared to a long term liability in
1994. The Company is
currently negotiating the extension of the CIT Financing Arrangement. CIT
has indicated to the
Company that any renewal will be on terms no less favorable than the current
terms. There can be
no assurance that the Company will be able to negotiate an extension of the
CIT Financing
Arrangement on favorable terms or at all. In the event that the Company is
unable to negotiate an
extension of the CIT Financing Arrangement on favorable terms or at all, the
Company will seek
alternate sources of debt or equity financing.
At December 31, 1995, current liabilities totalled $3,573,000, primarily
consisting of
$1,496,000 of accounts payable and accrued expenses and $2,077,000 of current
maturities of
long-term debt.
At December 31, 1995 and 1994, asset based debt under the CIT Financing
Arrangement
totaled $2,011,000 and $2,281,000, respectively.
In 1995 the Company was able to raise approximately $240,000 of
additional capital in
addition to securing an aggregate of approximately $1,100,000 in trade
credit as compared with
trade credit of approximately $750,000 in 1994.
Cash flow provided by operating activities for the year ended December
31, 1995 was
$465,000 as compared to $158,000 used in operating activities for the year
ended December 31,
1994. The cash provided by operating activities was primarily a result of
increased accounts
payable and accrued expenses, reduced inventory and no discharge of
liabilities during 1995.
Net cash used by investing activities totalled $227,000 in the year
ended December 31,
1995, primarily as a result of decreased equipment purchases, as compared
to cash used in
investing activities of $717,000 for the year ended December 31, 1994.
Net cash used in financing activities totalled $146,000 for the year
ended December 31,
1995, as compared to $376,000 provided by financing activities in the year
ended December 31,
1994, such difference was primarily a result of the reduced private
placements in 1995. The
Company issued an aggregate of 240,000 shares of Common Stock and options
to purchase an
additional 112,500 shares of Common Stock pursuant to such private
placements in 1995.
Item 8. Financial Statement and Supplementary Data
Attached at pages F-1 through F-2? are the financial statements and
financial statement
schedules identified in Item 14 hereof.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Corporation
The following are the Executive Officers and Directors of the Company as
of the date of
this report. The Corporation's By-Laws, as amended in 1993, provide for the
classification of
Directors into three classes, as nearly equal in numbers as possible, with
one class being elected at
each annual meeting for a term of three years. Terms of directors of Class I
will expire in 1997,
the term of directors of Class II in 1998 and the term of directors of Class
III in 1996. There is
no family relationship among any of the Company's officers or directors. The
current directors of
the Company will serve until their terms expire or until their successors in
office are elected or
appointed and qualified.
EXECUTIVE OFFICERS AND DIRECTORS
Name Age Position(s)
Theodore A. Schwartz 66 Chairman of the Board of Directors and
(Class III) Chief Executive Officer of the Company,
Berger Bros and Berger Financial
Joseph F. Weiderman 54 Director, President, Chief Operating
(Class III) Officer, Chief Financial Officer, Treasurer
and Secretary of the Company, President of
Berger Bros and Berger Financial
Paul L. Spiese, III 44 Director of the Company, Vice President -
(Class II) Manufacturing of Berger Bros
Jacob I. Haft, M.D. 59 Director
(Class III)
Dr. Irving Kraut 78 Director
(Class I)
Larry Falcon 56 Director
(Class II)
Jeffrey I. Schocket 49 Director
(Class I)
THEODORE A. SCHWARTZ, was elected a Director of the Company
effective June
1987 and served as President of the Company from May 5, 1988 to May 30,
1989 and from July
17, 1990 to January 15, 1991. From May 30, 1989 to present, Mr. Schwartz
has served as
Chairman of the Board of Directors and Chief Executive Officer of
the Company.
JOSEPH F. WEIDERMAN, was elected a Director of the Company on June
1, 1990,
served as Chief Financial Officer, Secretary and Treasurer of the Company
since February 1990,
and was elected President of the Company on January 15, 1991. Mr. Weiderman
holds a
Bachelor of Science Degree in Accounting and a Master of Business
Administration Degree in
Finance from LaSalle University. Prior to his joining the Company, Mr.
Weiderman had served
for over fourteen years as the Chief Financial Officer of Harry Levin, Inc., a
multi-store retailer of
major appliances and furniture.
PAUL L. SPIESE, III, was elected a Director of the Company on March 30,
1991. Mr.
Spiese joined the Company as Plant Manager in 1985 and was named Vice
President -
Manufacturing in July 1990. Previously, he was employed by Hurst
Performance, Inc. as a Plant Manager.
JACOB I. HAFT, M.D., was elected a Director of the Company in
conjunction with the
Company's acquisition of Berger in 1989. Dr. Haft has practiced medicine,
with a specialization
in cardiology, for over twenty-five years. Since 1974, Dr. Haft has been
the director of the
Department of Cardiology of St. Michael's Medical Center in Newark, New
Jersey. In addition,
Dr. Haft is currently a Clinical Professor of Medicine at the New Jersey
College of Medicine and
Dentistry and Professor of Medicine at the Seton Hall University Post
Graduate School of
Medicine. Dr. Haft has several professional certifications, is a member of
various professional
societies and associations and has published many scholarly articles and
books. During 1986 and
1987, Dr. Haft served on the New Jersey Cardiac Services Task Force of
the New Jersey
Department of Health. Dr. Haft currently serves on the Cardiac Services
Committee of the New
Jersey Department of Health.
LARRY FALCON has served as a Director of the Company since November
1985. He
has also served as President of the Residential Division of The Kaplan
Organization, a real estate
developer and an affiliate of a shareholder of the Company, since 1985.
DR. IRVING KRAUT was elected as a director in July 1993. Dr. Kraut was
a practicing
orthodontist from 1948 to 1991. Since that time, he has served as a
consultant to orthodontists in
his capacity as President of Irving Kraut, D.D.S., P.A. Since 1978, Dr. Kraut
has served as a
director of Princeton Research Lands, Inc., a private real estate company.
JEFFREY I. SCHOCKET has served as a Director of the Company since
September 3,
1986. In addition, Mr. Schocket served as President of the Company from
September 3, 1986 to
May 5, 1988. He has been Chief Financial Officer of The Kaplan Organization,
since January 1986.
<PAGE>
Item 11. Executive Compensation
The following table shows the annual compensation of each of the
Company's executive
officers for the years 1995, 1994 and 1993.
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation Awards
(a) (b) (c) (d) (e) (g) (i)
Name & Principal Year Salary$ Bonus$ Oth Ann Options/ All Oth
Position Compens$ SARs # Compens$
Theodore A. Schwartz 1995 $124,865 0 0 150,000 $10,699(1)
Chairman & Chief 1994 108,070(2) 0 0 0 10,460
Executive Officer 1993 96,904(2) 0 0 100,000 7,000
of the Company
Joseph F. Weiderman 1995 $109,346 0 0 150,000 $1,877(3)
Prisident, Chief 1994 94,723(2) 0 0 0 2,188
Operating Officer, 1993 83,725(2) 0 0 100,000 1,708
Chief Financila Officer
and Treasurer of the
Company
Paul L. Spiese, III 1995 $80,204 0 0 150,000 1,071(4)
Vice President- 1994 73,536(2) 0 0 0 1,798
Manufacturing of 1993 68,384 0 0 100,000 1,648
the Company
___________________________
1 Represents premiums paid by the Company for life insurance for the
benefit of Mr. Schwartz.
2 All Officers voluntarily accepted less than their contractual salaries
during 1993 and 1994.
3 Represents premiums paid by the Company for life insurance for the
benefit of Mr. Weiderman.
4 Represents premiums paid by the Company for life insurance for the
benefit of Mr. Spiese.
<PAGE>
The following table shows the number of options granted to the
Company's
executive officers during 1995:
OPTION GRANTS IN LAST FISCAL YEAR
(a) (b) (c) (d)
% Total
Option/SARs
Granted to Exercise or
Options/SARs Employees Base Price
Name Granted (#) InFiscalYear ($/Sh)
Theodore A. Schwartz 150,000 22% $1.50
Joseph F. Weiderman 150,000 22% $1.50
Paul L. Spiese, III 150,000 22% $1.50
The following table shows (1) the number and value of options
exercised by the Company's
executive officers during fiscal year 1995 and (2) the number and value
of unexercised options held
by the Company's executive officers at the end of 1995:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
(a) (b) (c) (d)
# of Unexercised Options
at FY-End(#)
Value Exercisable/
Name on Exercise ($) Realized ($) Unexercisable
Theodore A. Schwartz 0 0 156,633/150,000
Joseph F. Weiderman 0 0 113,643/150,000
Paul L. Spiese, III 0 0 104,643/150,000
During 1995, members of the Company's Board of Directors who were not
also executive
officers of the Company were paid $250 per Board meeting attended. An
aggregate of $2,250
was paid to directors for their services. No director was paid more
than $750.
Employment Agreements
Theodore A. Schwartz
Pursuant to an Employment Agreement dated as of January 1, 1994, Mr.
Schwartz is
employed by the Company as its Chief Executive Officer. Such agreement is
for a term of five
years and expires December 31, 1998. The agreement provides for a base annual
salary of
$125,000 with annual increases based on the Consumer Price Index ("CPI"). In
addition to his
salary, the agreement provides that Mr. Schwartz shall be entitled to a bonus
at the discretion of
the Board of Directors. If, at the end of the term of the agreement, the
Corporation and Mr.
Schwartz have not agreed to an extension of such agreement for a minimum
additional term of
three years, the Corporation is obligated to pay Mr. Schwartz an amount equal
to 50% of his then
annual salary in weekly installments over a six month period (the "Severance
Payment"). In the
event that Mr. Schwartz is unable to perform his duties under the agreement
for an aggregate
period of more than 180 days in any 365 day period, the Corporation may
terminate Mr.
Schwartz' employment upon 90 days notice. In such event, the Corporation
is obligated to pay
Mr. Schwartz his full salary for a period of twelve months. At the end of
such twelve month
period, the Corporation is obligated to pay Mr. Schwartz the sum of $1,000 per
week, subject to
certain reductions set forth in the agreement, for a period of three years and
then $500 per week
for the remainder of Mr. Schwartz' life.
Mr. Schwartz is also entitled to the use of a car provided by the Company
and receives life
insurance to benefit the beneficiary of his choice in the face amount of
$500,000. During the term
of the agreement, and so long as Mr. Schwartz receives the Severance Payment,
Mr. Schwartz is
prohibited directly or indirectly engaging in any business which is the same
as, similar to or in
competition with the business of the Corporation.
Joseph F. Weiderman
Pursuant to an Employment Agreement dated as of January 1, 1994, Mr.
Weiderman is
employed by the Company as its President and Chief Operating Officer. Such
agreement is for a
term of five years and expires December 31, 1998. The agreement provides for
a base annual
salary of $110,000 with annual increases based on the CPI. In addition to his
salary, the
agreement provides that Mr. Weiderman shall be entitled to a bonus at the
discretion of the Board
of Directors. If, at the end of the term of the agreement, the Corporation
and Mr. Weiderman
have not agreed to an extension of such agreement for a minimum additional
term of three years,
the Corporation is obligated to pay Mr. Weiderman an amount equal to 50% of
his then annual
salary in weekly installments over a six month period (the "Severance
Payment"). In the event
that Mr. Weiderman is unable to perform his duties under the agreement for an
aggregate period
of more than 180 days in any 365 day period, the Corporation may terminate Mr.
Weiderman's
employment upon 90 days notice. In such event, the Corporation is obligated
to pay Mr.
Weiderman his full salary for a period of twelve months. At the end of such
twelve month period,
the Corporation is obligated to pay Mr. Weiderman the sum of $1,000 per week,
subject to
certain reductions set forth in the agreement, for a period of three years and
then $500 per week
for the remainder of Mr. Weiderman's life.
Mr. Weiderman is also entitled to the use of a car provided by the
Company and receives
life insurance to benefit the beneficiary of his choice in the face amount of
$500,000. During the
term of the agreement, and so long as Mr. Weiderman receives the Severance
Payment, Mr.
Weiderman is prohibited directly or indirectly engaging in any business which
is the same as,
similar to or in competition with the business of the Corporation.
Paul L. Spiese, III
Pursuant to an Employment Agreement dated as of January 1, 1994, Mr.
Spiese is
employed by the Company as its Vice President of Manufacturing. Such
agreement is for a term
of five years and expires December 31, 1998. The agreement provides for a
base annual salary of
$80,000 with annual increases based on the CPI. In addition to his salary,
the agreement provides
that Mr. Spiese shall be entitled to a bonus at the discretion of the Board of
Directors. If, at the
end of the term of the agreement, the Corporation and Mr. Spiese have not
agreed to an extension
of such agreement for a minimum additional term of three years, the
Corporation is obligated to
pay Mr. Spiese an amount equal to 50% of his then annual salary in weekly
installments over a six
month period (the "Severance Payment"). In the event that Mr. Spiese is
unable to perform his
duties under the agreement for an aggregate period of more than 180 days in
any 365 day period,
the Corporation may terminate Mr. Spiese's employment upon 90 days notice. In
such event, the
Corporation is obligated to pay Mr. Spiese his full salary for a period of
twelve months. At the
end of such twelve month period, the Corporation is obligated to pay Mr.
Spiese the sum of
$1,000 per week, subject to certain reductions set forth in the agreement,
for a period of three
years and then $500 per week for the remainder of Mr. Spiese's life.
Mr. Spiese is also entitled to the use of a car provided by the Company
and receives life
insurance to benefit the beneficiary of his choice in the face amount of
$500,000. During the term
of the agreement, and so long as Mr. Spiese receives the Severance Payment,
Mr. Spiese is
prohibited directly or indirectly engaging in any business which is the same
as, similar to or in
competition with the business of the Corporation.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Principal Shareholders
The following table sets forth, as of December 31, 1995, information with
respect to the
beneficial ownership of the Company's directors, all directors and executive
officers as a group,
and all persons believed by the Company to beneficially own more than 5%
of the Company's
outstanding Common stock based upon filings with the Securities and Exchange
Commission.
Unless otherwise indicated, such ownership is believed to be direct, with sole
voting and investment power.
Name of Shares Owned
Outstanding Beneficially Percentage
Beneficial Owner and of Record of Shares
Theodore A. Schwartz 315,225 (1) 8.34%
Joseph F. Weiderman 245,090 (2) 6.61%
Paul L. Spiese, III 194,726 (3) 5.29%
Jacob I. Haft, M.D. 106,700 (4) 2.98%
Larry Falcon 22,791 (5) .64%
Dr. Irving Kraut 162,533 (6) 4.49%
Jeffrey I. Schocket 22,857 (7) .64%
Francis E. Wellock, Jr. 55,750 (8) 1.56%
All Directors and Executive
Officers as a group (8 persons) 1,125,672 26.03%
(1) Includes 1,500 shares of Common Stock registered to Mr. Schwartz as
joint tenant with
Janice L. Bredt and options and warrants to purchase 246,630 shares of Common
Stock.
(2) Includes options and warrants to purchase 178,643 shares of Common Stock.
(3) Includes options and warrants to purchase 149,726 shares of Common Stock.
(4) Includes options and warrants to purchase 47,414 shares of Common Stock.
(5) Consists solely of options and warrants to purchase shares of Common
Stock.
(6) Includes options and warrants to purchase 85,000 shares of Common Stock.
(7) Includes options and warrants to purchase 22,791 shares of Common Stock.
(8) Includes options and warrants to purchase 40,000 shares of Common Stock.
Item 13. Certain Relationships and Related Transactions
Joseph F. Weiderman
The Company holds two Promissory Notes made by Mr. Weiderman,
President and Chief
Financial Officer of the Company, one in the principal amount of $50,000 and
one in the principal
amount of $25,000 (the "Notes"), each of which bears an interest rate of six
percent per annum.
Each of the Notes requires the principal and accrued interest to be paid on or
before December
31, 1997. The proceeds of the Notes were used by Mr. Weiderman to purchase
securities of the
Company in the Company's private placements. Such securities were purchased
on the same
terms as other investors in the private placements. The largest aggregate
amount outstanding
under the Promissory Notes during the year ended December 31, 1995 was
$75,000, all of which is currently outstanding.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) The following documents are filed as a part of this report:
1. Financial statements - attached at pages F-1 through F-21 are the financial
statements and
financial schedules set forth below, and which are incorporated by reference
in Item 8:
Berger Holdings, Ltd.
Reports of Independent Auditors on Financial Statements
of Berger Holdings, Ltd.and Subsidiary for 1995, 1994
and 1993 F-1
Consolidated Balance Sheets of Berger Holdings, Ltd.
(formerly' Inovex Industries, Inc.) and Subsidiary as
of December 31, 1995 and 1994 F-2
Consolidated Statements of Operations of Berger
Holdings, Ltd. and Subsidiary for the years ended
December 31, 1995, 1994, and 1993 F-3
Consolidated Statements of Stockholders' Equity of
Berger Holdings, Ltd. and Subsidiary for the years
ended December 31, 1995, 1994 and 1993 F-5
Consolidated Statements of Cash Flows of Berger Holdings,
Ltd. and Subsidiary for the years ended December 31, 1995,
1994 and 1993 F-6
Notes to Consolidated Financial Statements of Berger
Holdings, Ltd. and Subsidiary F-9
2. Financial statement schedules - The following consolidated financial
statement schedules are included herein:
Schedule V --Consolidated Property, Plant and Equipment
Schedule VI --Consolidated Accumulated Depreciation, Depletion and
Amortization of Property, Plant and Equipment
Schedule IX -- Consolidated Short-Term Borrowings
All other schedules for which provision is made in the applicable accounting
regulations of the
Securities and Exchange Commission are not required under the related
instructions or are
included in the financial statements or the notes thereto and therefore have
been omitted.
3. Exhibits
Exhibit
Number Title Method of Filing
2(a) Debtor's Third Amended Incorporated by reference to Exhibit
Joint Plan of 1 of the Company's Current Report on
Reorganization Form 8-K filed on March 31, 1993 (the
"Form 8-K")
2(b) Third Amended Disclosure Incorporated by reference to Exhibit
Statement for Debtor's 2 of Form 8-K
Amended Joint Plan of
Reorganization
2(c) Settlement Agreement by Incorporated by reference to Exhibit
and between the Registrant 4 of Form 8-K
and Meridian Bank
3(a) Articles of Incorporated by Reference to
Incorporation and Exhibit 3 of the Registration
Bylaws Statement on Form S-18 filed Feb 15,
1983 (File No. 2-81851-W) (the "1983
Registration Statement")
3(b) Articles of Amendment Incorporated by reference to
dated November 29, Exhibit 3(b) of the Annual
1989 Report on Form 10-K for the year ended
Dec 31, 1989 (the "1989 Form 10-K")
Exhibit
Number Title Method of Filing
3(c) Articles of Amendment Incorporated by reference to
effective July 30, Exhibit 3(c) to Amendment No. 1
1990 to the Registration Stment on Form S-1
filed on Oct 15, 1990 ("Pre-Effective
Amendment No. 1")
3(d) Amended and Restated Incorp by reference to Exhibit 3(d)
By laws of the Registration Stment on Form S-1
filed June 16,1993 (the "1993 Form S-1")
3(e) Articles of Amendment Filed Herewith
dated July 22, 1993
4(a) Form of 1993 Incorp by reference to Exhibit 4(g)
Private Placement Warrant of the 1993 Form S-1
4(b) Form of Consulting Incorpor by reference to Exhibit 4(h)
Warrant by and between of the 1993 Form S-1
the Company and Universal
Solutions, Inc.
4(c) Form of 1993 Incorporated by reference to Exhibit 4.9
Private Placement Warrant of the Registration Statemnt on Form S-3
No. 2 filed January 21, 1994 (the "Form S-3")
4(d) Form of Consulting Incorp by reference to Exhibit 4.10
Warrant of the Form S-3
10(a) Lease Agreement Incorporated by reference to
between Berger Bros Exhibit 10(i) of the 1989
Company and Feaster- Form 10-K
ville Associates
dated May 30, 1989
Exhibit
Number Title Method of Filing
10(b) Addendum to Lease Incorporated by reference to
Agreement between Exhibit 10(j) of the 1989
Berger Bros Company Form 10-K
and Feasterville
Associates dated
May 30, 1989
10(c) Cobra Ridge Vent Incorporated by reference to
Sale Agreement Exhibit 10(r) of the Annual Report on
Form 10-K for the year ended Dec 31,
1993
10(d) Employment Agreement Filed Herewith
between Berger Holdings,
Ltd. and Theodore
A. Schwartz
10(e) Employment Agreement Filed Herewith
between Berger Holdings,
Ltd. and Joseph
F. Weiderman
10(f) Employment Agreement Filed Herewith
between Berger Holdings,
Ltd. and Paul L. Spiese, III
21 Subsidiaries of the Incorporated by reference to
Company Exhibit 22 to the 1989 Form 10-K
27 Financial Data Schedule
All other exhibits for which provision is made in the applicable
regulations of the
Securities and Exchange Commission are not required under the related
instructions or are
inapplicable and therefore have been omitted.
(b) Reports on Form 8K:
No Reports on Form 8K were filed during the last quarter covered
by this report.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has
duly caused this Form 10-K to be signed on its behalf by the undersigned,
thereunto duly
authorized on the 28th day of March, 1996.
BERGER HOLDINGS, LTD.
By: /S/ THEODORE A. SCHWARTZ
Theodore A. Schwartz
Chief Executive Officer
By: /S/ JOSEPH F. WEIDERMAN
Joseph F. Weiderman
President, Principal Financial
Officer and Principal Accounting
Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been
signed below by the following persons on behalf of the Corporation and in the
capacities and on the dates indicated:
Signature Title Date
/S/ THEODORE A. SCHWARTZ Chief Executive Officer March 28, 1996
Theodore A. Schwartz and Chairman of the Board
/S/ PAUL L. SPIESE, III Director March 28, 1996
Paul L. Spiese, III Vice President
/S/ JOSEPH F. WEIDERMAN President, Principal March 28, 1996
Joseph F. Weiderman Financial Officer,
Director
Director March __, 1996
Larry Falcon
Director March __, 1996
Jacob I. Haft, M.D.
/S/ DR. IRVING KRAUT Director March 28, 1996
Dr. Irving Kraut
Director March __, 1996
Jeffrey I. Schocket
Independent Auditor's Report
February 28, 1996
Stockholders and Board of Directors
Berger Holdings, Ltd. and Subsidiary
Feasterville, Pennsylvania
We have audited the accompanying consolidated balance sheets of BERGER
HOLDINGS, LTD. AND SUBSIDIARY as of December 31, 1995 and 1994 and the related
consolidated
statements of operations, of stockholders' equity, and of cash flows and the
financial statement schedules
listed under Item 14(a)(2) of the Company's annual report on Form 10-K for
each of the three years in the
period ended December 31, 1995. These financial statements and schedules are
the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and
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 audits to obtain
reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in
all material respects, the financial position of BERGER HOLDINGS, LTD.
AND SUBSIDIARY as of
December 31, 1995 and 1994, and the results of its operations, stockholders'
equity and cash flows for
each of the three years in the period ended December 31, 1995 in conformity
with generally accepted
accounting principles. The financial statement schedules referred to above
are fairly stated in all material
respects in relation to the consolidated financial statements taken as a
whole.
GOLDENBERG ROSENTHAL FRIEDLANDER, LLP
Jenkintown, Pennsylvania
F1
BERGER HOLDINGS, LTD. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
December 31
ASSETS (Note 7) 1995 1994
Current assets
Cash (Note 15) $ 171,432 $ 79,391
Accounts receivable, net of allowance for doubtful
accounts of $43,000 in 1995 and $73,000 in
Inventories (Notes 2 and 3) 1,593,642 1,881,896
Prepaid and other current assets 117,347 211,172
Total current assets 3,103,486 3,411,890
Property and equipment, net (Notes 2 and 4) 5,742,270 6,155,729
Other assets (Note 5) 488,409 155,169
Goodwill, net of accumulated amortization of $314,730 in
1995 and $235,930 in 1994 (Note 2) 551,174 629,974
$ 9,885,339 $ 10,352,762
December 31
LIABILITIES AND STOCKHOLDERS' EQUITY 1995 1994
Current liabilities
Current maturities of long-term debt (Notes $ 2,077,171 $ 228,174
Accounts payable (Note 16) 1,150,365 620,603
Accrued expenses (Note 6) 345,721 459,365
Total current liabilities 3,573,257 1,308,142
Long-term debt, net of current maturities (Notes 1,676,713 3,873,299
Total liabilities 5,249,970 5,181,441
Commitments and contingencies (Note 10)
Stockholders' equity (Notes 2, 8, 12 and 14)
Common stock, $.01 par value
Authorized 20,000,000 shares
Issued and outstan 3,531,439 shares in 1995
3,191,439 shares in 19 35,314 31,914
Additional paid-in capital 15,088,747 14,778,238
Accumulated deficit (10,288,692) (9,438,831)
4,835,369 5,371,321
Less common stock subscribed (200,000) (200,000)
4,635,369 5,171,321
$ 9,885,339 $ 10,352,762
See notes to consolidated financial statements
F2
BERGER HOLDINGS, LTD. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended December 31
1995 1994 1993
Net sales (Note 11) $ 15,653,321 $ 16,595,918 $ 11,938,804
Cost of sales 13,738,061 14,413,877 10,495,647
Gross profit 1,915,260 2,182,041 1,443,157
Selling, administrative and general
expenses (Notes 2 and 10) 2,225,685 1,914,700 1,609,681
Amortization of consulting costs (Not - 205,000 20,000
2,225,685 2,119,700 1,629,681
Income (loss) from operations (310,425) 62,341 (186,524)
Other (expense) income
Interest expense (contractual interest
of $532,053 in 1993) (570,420) (520,908) (480,535)
Other income (expense), net 30,984 (2,084) -
(539,436) (522,992) (480,535)
Loss before reorganization items and
extraordinary item (849,861) (460,651) (667,059)
Reorganization items (Note 13)
Professional fees - - (55,996)
Other - - (54,412)
- - (110,408)
Loss before extraordinary item (849,861) (460,651) (777,467)
Extraordinary item (Note 14) - 948,207 1,151,270
Net income (loss) (Note 9) $ (849,861) $ 487,556 $ 373,803
(continued)
See notes to consolidated financial statements
F3
BERGER HOLDINGS, LTD. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(continued)
Year Ended December 31
1995 1994 1993
Earnings (loss) per common share
(Notes 2, 8 and 12) - - -
Primary
Loss per common share before
extraordinary item ($0.26) ($0.15) ($0.38)
Extraordinary item per common s - 0.32 0.56
Earnings (loss) per comm shar ($0.26) $0.17 $0.18
Weighted average number of common
and common equivalent shares
outstand during the period 3,326,165 2,920,362 2,059,227
Fully Diluted
Loss per common share before
extraordinary item ($0.26) ($0.15) ($0.33)
Extraordinary item per share - 0.32 0.49
Earnings (loss) per comm shar ($0.26) $0.17 $0.16
Weighted average number of common
and common equivalent shares
outstand during the period 3,326,165 2,920,362 3,430,699
See notes to consolidated financial statements
F4
BERGER HOLDINGS, LTD. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
Common Stock
Common Stock Subscribed
Additional
No of Paid-in Accumulated No of
Shares Amount Capital Deficit Shares Amt
Bal Jan 1, 1993 842,689 $ 8,427 $12,179,093 $(10,300,190) - $ -
Shares issued in exchange
for debts (Note 14) 109,205 1,092 225,991 - - -
Shares issued in private
placements (Note 12)967,333 9,673 1,116,711 - 200,000 200,000
Warrants exercised at
$1.50 per share
(Note 12) 140,000 1,400 208,600 - - -
Warrants issued in
exchange for
promotional services
(No - - 225,000 - - -
Net income for the year
ended Dec 31, 1993 - - - 373,803 - -
Bal Dec 31, 1993 2,059,227 20,592 13,955,395 (9,926,387) 200,000 200,000
Shares issued in
exchange for debts
(Note 14) 2,212 22 3,408 - - -
Shares issued in
private placements
(Note 12) 220,000 2,200 160,035 - - -
Warrants exercised at
$.50 per share
(Note 8) 450,000 4,500 220,500 - - -
Warrants exercised at
$1.25 per share
(Note 8) 300,000 3,000 372,000 - - -
Warrants exercised at
$1.50 per share
(Note 12) 58,000 580 86,420 - - -
Shares issued in
exchange for services
(Note 10) 102,000 1,020 (1,020) - - -
NASDAQ costs associated
with private plcemnts - - (18,500) - - -
Net income for the year
ended December 31, 1994 - - - 487,556 - -
Bal, Dec 31, 1994 3,191,439 31,914 14,778,238 (9,438,831) 200,000 200,000
Shares issued in
exchange for equip
deposit (Note 5) 100,000 1,000 111,500 - - -
Shares issued in
private placements
(Note 12) 240,000 2,400 199,009 - - -
Net loss for the
year ended
Dec 31, 1995 - - - (849,861) - -
Bal, Dec 31, 1995 3,531,439 $35,314 $15,088,747$(10,288,692) 200,000 200,000
See notes to consolidated financial statements
F5
BERGER HOLDINGS, LTD. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31
1995 1994 1993
Cash flows from operating activities
Net income (loss) $ (849,861) $ 487,556 $ 373,803
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities
Gain on dische of liabilit - (948,207) (1,151,270)
Deprec and amortization 719,245 699,258 667,265
Amort of deferre - 205,000 20,000
(Increase) decrease in assets
Accts recvable 18,366 (366,376) (296,979)
Inventories 288,254 (634,122) 27,033
Other current and long-term
assets (126,915) 43,441 93,285
Increase (decrease) in accounts
pay and accru expens 416,118 355,368 (374,804)
Total adjustments 1,315,068 (645,638) (1,015,470)
Net cash provided by (used in) operating
activities 465,207 (158,082) (641,667)
Cash flows used in investing activities
Acquisition of property and equipment,
net of retirements (226,986) (717,311) (191,602)
(continued)
See notes to consolidated financial statements
F6
BERGER HOLDINGS, LTD. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued)
Year Ended December 31
1995 1994 1993
Cash flows from financing activities
Proceeds from work cap line - 2,281,598 -
Loan repayments (347,589) (2,588,581) (332,285)
Gross proceeds from issuance of stock
under private placements and
stock warrants 239,000 907,000 1,215,500
Purch of comm stock put option - (151,125) -
Costs of private placement (37,591) (72,837) (79,116)
Net cash provided by (used in) financing
activities (146,180) 376,055 804,099
Net increase (decrease) in cash 92,041 (499,338) (29,170)
Cash, beginning of year 79,391 578,729 607,899
Cash, end of year $ 171,432 $ 79,391 $ 578,729
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION
Cash paid during the year $ 570,000 $ 526,000 $ 480,000
(continued)
See notes to consolidated financial statements
F7
BERGER HOLDINGS, LTD. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued)
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES
In 1995, the Company issued 100,000 shares of common stock valued at $112,500
as a partial payment on an equipment deposit.
In 1994, the Company incurred $27,864 of costs associated with refinancing its
building mortgage which was capitalized to property and credited to the
mortgage liability.
In 1993, pursuant to the Plan of Reorganization, the Company issued 109,205
shares of common stock in exchange for outstanding debts of $1,177,580.
In 1993, the Company issued common stock and common stock warrants in exchange
for services as follows:
Common Common Stock
Stock Warrants Value of
Issued Issued Services
Cost of private placement 24,000 - $ 24,000
Promotional services - 450,000 225,000
See notes to consolidated financial statements
F8
BERGER HOLDINGS, LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BUSINESS ORGANIZATION
Berger Holdings, Ltd. ("Company") was incorporated in the Commonwealth
of Pennsylvania on August 28, 1979.
The Company operates in a manufacturing facility in Feasterville,
Pennsylvania. The Company produces aluminum, galvanized and copper roof
drainage
products and solid vinyl home siding products. The roof drainage products
represent over
90% of the Company revenues, with the balance from the solid vinyl home siding
product
line. Berger sells to wholesale building product distributors throughout the
United States,
its territories and Canada, but is specifically concentrated in the Northeast
corridor.
On December 29, 1992, the United States Bankruptcy Court for the Eastern
District of Pennsylvania confirmed the Company's Plan of Reorganization (the
"Plan"). As
part of the acceptance of the Plan, the Company reached a settlement agreement
with its
secured lending institution (the "bank"), and an agreement with the Health and
Welfare Fund.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The financial statements include the accounts of the Company and its wholly-
owned subsidiary, Berger Financial Corporation (A Delaware Corporation formed
in 1994)
and Berger Financial's wholly-owned subsidiary, Berger Bros Company. Graywood
Products Company, Inc. which was previously included in the consolidation was
merged
into Berger Bros Company during 1994. All significant intercompany
transactions and balances have been eliminated.
Inventories
Inventories are stated at the lower of cost or market. Cost is determined
using the first-in, first-out method.
Property and Equipment and Depreciation and Amortization
Property and equipment are stated at cost. For financial reporting purposes,
depreciation is computed on the straight-line method over the estimated useful
lives of the
assets. For income tax purposes, depreciation is computed using accelerated
methods.
F9
BERGER HOLDINGS, LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Property and Equipment and Depreciation and Amortization (continued)
Maintenance and repair costs, which do not improve or extend the life of the
respective assets, are charged to operations as incurred. Leasehold
improvements are
amortized over the shorter of the lease term or useful life.
When an asset is sold, retired, or otherwise disposed of, the cost of the
property and the related accumulated depreciation is removed from the
respective accounts and any resulting gains or losses are included in income.
Goodwill
Goodwill is amortized using the straight-line method over ten years.
Earnings (Loss) Per Share
Earnings (loss) per common share amounts are based upon the weighted
average number of common and common equivalent shares outstanding during the
year.
In 1995 and 1994 common equivalent shares were excluded from the computation
because they had an antidilutive effect.
Management's Judgments and Accounting Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets
and liabilities at the date of the financial statements and the reported
amounts of revenues
and expenses during the reporting period. Actual results could differ from
those estimates.
3. INVENTORIES
Inventories are valued at the lower of cost or market. Cost is determined
using the first-in, first-out method ("FIFO").
F10
BERGER HOLDINGS, LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. INVENTORIES (continued)
As of December 31, 1995 and 1994, inventories consist of the following:
1995 1994
Raw materials $ 872,126 $1,010,187
Finished goods 704,828 850,771
Packaging materials and supplies 76,688 102,938
Less provision for obsolescence ( 60,000) ( 82,000)
$1,593,642 $1,881,896
4. PROPERTY AND EQUIPMENT
As of December 31, 1995 and 1994, property and equipment consists of the
following:
1995 1994
Land $ 485,000 $ 485,000
Building 3,842,865 3,842,865
Machinery 4,380,359 4,250,600
Furniture and fixtures 359,967 354,365
Trucks and autos 415,832 409,332
Dies 487,748 461,424
Leasehold improvements 645,954 587,152
10,617,725 10,390,738
Less accumulated depreciation
and amortization 4,875,455 4,235,009
$ 5,742,270 $ 6,155,729
Depreciation expense for the years ended December 31, 1995, 1994 and
1993 was $640,445, $620,458 and $588,465, respectively.
Total cost of machinery under capital leases included above as of
December 31, 1995 and 1994 was $151,836 and $175,521, respectively.
F11
BERGER HOLDINGS, LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. OTHER ASSETS
As of December 31, 1995 and 1994, other assets consist of the following:
1995 1994
Equipment deposit $455,388 $132,000
Other assets 33,021 23,169
$488,409 $155,169
During the current period, the Company gave a vendor 100,000 shares of
common stock as a partial payment on an equipment deposit. These shares were
valued
at $112,500 which represented the market value of stock at the date of the
transaction.
6. ACCRUED EXPENSES
As of December 31, 1995 and 1994, accrued expenses consist of the
following:
1995 1994
Payroll and related expenses $120,303 $181,000
Volume rebates 118,954 106,203
Other 33,495 19,294
Professional fees 24,635 30,000
Interest 18,000 30,000
Real estate taxes - 16,240
Insurance - 23,128
Freight 30,334 35,000
NASDAQ fees - 18,500
Total accrued expenses $345,721 $459,365
F12
BERGER HOLDINGS, LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. LONG-TERM DEBT
As of December 31, 1995 and 1994, long-term debt consisted of the
following:
1995 1994
Term loan, working capital line. The Company
has an available line of credit of $3,500,000
subject to a borrowing formula as described in
the loan agreement. Under the terms of this
loan, the Company is required to pay monthly
principal payments of $12,619 through June 30,
1996, at which time the remaining balance is due.
This loan is collateralized by accounts receivable and
inventory and bears interest at 3.5% over the prime
rate (prime was 8.5% as of December 31, 1995).
Under the provisions of this agreement, the Company
can borrow additional funds provided the collateral
requirements are met. Additionally, the Company is
required to pay interest on a minimum of $3,000,000
whether or not this minimum amount is borrowed. (See
discussion regarding refinancing on following
page). $2,010,754 $2,281,598
Mortgage note payable, principal and interest due
in monthly payments of approximately $17,400
through May, 2016 with a call date any time after
April 23, 2001 upon 60 days prior notice. Interest
is based on U.S. Treasury Bill rates and adjusted
every 5 years. The current interest rate is 10.2%
which is due for adjustment in May, 1996. 1,696,721 1,730,759
Capital leases, due in monthly installments of
approximately $3,800, including interest, through
1998; collateralized by certain equipment. 46,409 89,116
3,753,884 4,101,473
Less current maturities 2,077,171 228,174
$1,676,713 $3,873,299
F13
BERGER HOLDINGS, LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7. LONG-TERM DEBT (continued)
The Company is currently negotiating the refinance or extension of the
working capital term loan, which is set to expire on June 30, 1996.
Discussions with their
current lender, as well as another potential lender, are in the preliminary
stages.
Management believes that they will be successful in either refinancing or
extending this
obligation. In the event the Company is unable to refinance or extend this
loan,
management will have to formulate alternative strategies to satisfy this
liability. Such
alternative actions include the sale of assets and the raising of funds through
the private placement market.
Scheduled annual maturities of long-term debt as of December 31, 1995 are
as follows:
Year Ending December 31
1996 $2,077,171
1997 55,329
1998 50,202
1999 51,094
2000 56,555
Thereafter 1,463,533
$3,753,884
8. STOCK OPTIONS
During 1993, the Board of Directors established an incentive stock option
plan for officers and outside directors of the Company. Under the plan, the
following number of options were granted:
1993
Outside directors 40,000
1994
Officers 160,000
Outside directors 20,000
180,000
1995
Officers 165,000
Outside directors 60,000
225,000
F14
BERGER HOLDINGS, LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. STOCK OPTIONS (continued)
Additionally, in 1995, the Board approved an incentive stock option plan for
the same officers and outside directors. Under the terms of this plan, these
options vest
over a three-year period commencing December 31, 1996 as follows:
December 31, 1996 230,000
December 31, 1997 230,000
December 31, 1998 230,000
690,000
All of the options in both plans are exercisable at $1.50 per share.
See Note 12 for summary of options.
In December, 1993, the Company entered into a series of one-year
consulting agreements for services relating to financial public relations. In
exchange for
these services, the Company granted the consultants an aggregate of 450,000
warrants
which were exercised in 1994. These warrants were exercised for 1 share of
common
stock, per warrant, at the exercise price of $.50 per share. The Company has
determined
the value of the services received in exchange for the warrants to be
$225,000.
Additionally, 300,000 warrants were issued and exercised at $1.25 per share
for consulting services in 1994.
In 1993, the Company recorded the issuance of the 450,000 warrants as
follows:
Deferred charge $225,000
Less accumulated amortization (20,000)
$205,000
Additional paid-in capital $225,000
The unamortized balance of $205,000 was recognized as consulting
expense in 1994.
F15
BERGER HOLDINGS, LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. INCOME TAXES
Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109 ("SFAS No. 109"), "Accounting for Income Taxes",
which
requires the recognition of deferred tax liabilities and assets for the
expected future tax
consequences of events that have been included in the financial statements or
tax
returns. The adoption of SFAS No. 109 did not have a material effect on the
1993
consolidated financial statements. The provision (benefit) for deferred income
taxes
results from temporary differences which consist of different tax bases for
assets and
liabilities than their reported amounts in the financial statements. Such
differences result
in recognition of income or expense in different years for tax and financial
statement
purposes. The sources of these differences and the tax effect of each as of
December 31, 1995, 1994 and 1993 were as follows:
1995 1994 1993
Inventory reserves $ 24,000 $ 40,000 $ 54,400
Net operating loss carryforwards 2,400,000 2,074,000 2,300,000
Depreciation (120,000) (24,000) (23,800)
Subtotal 2,304,000 2,090,000 2,330,600
Valuation allowance (2,304,000) (2,090,000) (2,330,600)
Total net deferred tax asset
(liability) $ - $ - $ -
The valuation allowance decreased $214,000 and $240,600 during the years
ended December 31, 1995 and 1994, respectively.
As of December 31, 1995, the Company had carryforward net operating
losses of approximately $6,949,000, expiring through 2008. In addition,
investment tax
credits of approximately $5,000 are available to apply against future income
taxes, if any, and expire in 2000.
No provision for federal or state income taxes was recognized for the years
1993 through 1995. Certain gains which were recognized as a result of
emergence from
bankruptcy are not considered taxable income for either federal or state
purposes.
Additionally, gains recognized from exchanging debt for common stock are not
considered
taxable income. However, these gains reduce prior years' net operating loss
carryforwards.
10. COMMITMENTS AND CONTINGENCIES
The Company leases certain real property and equipment under
noncancellable operating leases. Under certain leasing arrangements, the
Company pays
the property taxes, insurance and maintenance related to the leased property.
F16
BERGER HOLDINGS, LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10. COMMITMENTS AND CONTINGENCIES (continued)
Rent expense on the facilities and equipment for the years ended
December 31, 1995, 1994 and 1993 was approximately $103,039, $52,500 and
$18,000, respectively.
As of December 31, 1995, minimum rental commitments under long-term,
noncancellable operating leases are as follows:
Year Ending December 31
1996 $105,892
1997 68,512
1998 (end of leases) 39,298
$213,702
The Company's only current involvement in legal proceedings are those
which arise in the ordinary course of business. In the opinion of management,
the
outcome of these matters will not have a material adverse effect on the
Company.
The Company participates in a multi-employer pension plan covering
substantially all of its union employees. The union employees comprise 60% of
the
Company's workforce. The Company makes monthly payments as required into the
multi-employer plan trust established for union employees. Under the Employee
Retirement Income Security Act of 1974, as amended by the Multi-Employer
Pension Plan
Amendments Act of 1980, an employer is liable for a proportionate part of the
plan's
unfunded vested benefits liability. The Company's share of the unfunded
liability related
to the Multi-Employer Pension Plan, if any, is not determinable.
The Company has entered into an agreement with a shareholder to provide
management support, strategic planning and assistance in raising capital.
Under the
terms of the agreement, the Company paid this consultant $75,000 and $60,000
during
1995 and 1994, respectively, of which $11,250 and $40,000, respectively, was
charged to
additional paid-in capital and $63,750 and $20,000, respectively, to
operations.
Additionally, this shareholder was compensated with 102,000 shares of common
stock in
1994 for services related to raising equity capital. The Company has revised
this contract,
effective January 1, 1996. Under the revised contract, the Company will issue
common
stock valued at $6,250 per month ($75,000 per year) for the period January,
1996 through
December, 1998 to satisfy future obligations under this contract.
The Company has entered into employment agreements with its officers.
Included in these agreements is a provision for salary continuation in the
event of
disability. Under the agreement, each officer is entitled to receive full
salary for a six
month period following disability, $1,000 per week for the next three years
and $500 per week for the remainder of his life.
F17
BERGER HOLDINGS, LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
11. ACCOUNTS RECEIVABLE
The Company sells its products to wholesale building products distributors
located primarily in the eastern half of the United States and grants credit
to these companies.
12. CAPITAL STOCK
The following outlines shares issued in connection with private placements
during 1995, 1994 and 1993:
1 9 9 5
Number Capital Shares
Date of Units Raised Issued
October, 1995 240 (a) $ 239,000 240,000
1 9 9 4
Number Capital Shares
Date of Units Raised Issued
January, 1994 220 (b) $ 220,000 220,000
1 9 9 3
Number Capital Shares
Date of Units Raised Issued
April, 1993 12.25 (c) $ 612,500 490,000
April, 1993 288,000 160,000
July, 1993 25,000 13,333
December, 1993 280 (b) 280,000 280,000
Shares issued in connection
with placements 24,000 24,000
Costs associated with
placements (103,116) -
1,126,384 967,333
Less common stock subscribed (200,000) -
$ 926,384 967,333
(a) In connection with the placement of these units, the placement agents were
granted
warrants to purchase up to 112,500 shares at $1.00 per share (effective
August, 1995) expiring in December, 1997.
F18
BERGER HOLDINGS, LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
12. CAPITAL STOCK (continued)
(b) Each unit costing $1,000 entitled purchaser to 1,000 shares of common
stock and
warrants to purchase an additional 1,000 shares at $1.50 per share, expiring
in December, 1996.
(c) Each unit costing $50,000 entitled purchaser to 40,000 shares of common
stock and
warrants to purchase an additional 40,000 shares at $1.50 per share (effective
February 2, 1994) expiring in April, 1996.
As of December 31, 1995, the total outstanding warrants aggregated
approximately 1,174,317. Of the 1,174,317 warrants, 112,500 are exercisable
at $1.00
per share; 1,011,500 are exercisable at $1.50 per share and 50,317 are
exercisable at
$5.00 per share. All warrants issued prior to 1993 expire in December, 1997,
except for 40,667 warrants set to expire in April, 1996.
Stock option and stock warrant transactions are summarized as follows:
Stock Stock
Options Warrants
(Note 8)
Outstanding, January 1, 1994 100,167 1,220,557
Granted 180,000 -
Issued - 520,000
Exercised - (678,740)
Outstanding, December 31, 1994 280,167 1,061,817
Granted 225,000 -
Issued - 112,500
Exercised - -
Outstanding, December 31, 1995 505,167 1,174,317
13. REORGANIZATION ITEMS
As a result of the Company's emergence from bankruptcy in 1992 and
reorganization, the Company incurred certain expenses and sold off various
assets during
1993. Included in reorganization items in 1993 is the following:
Charges to operations
Professional fees $ 55,996
Other (including $300,000 of fees
bank and $114,466 write-off of a
receivable from an affiliate) 54,412
$110,408
F19
BERGER HOLDINGS, LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
14. EXTRAORDINARY ITEM
The gain from discharge of liabilities as a result of emerging from bankruptcy
on December 29, 1992, has been recorded as an extraordinary gain. The gain of
$948,207 in 1994 and $1,151,270 in 1993 consists of the following:
Year Ended December 31
1994 1993
Exchange of common stock for outstanding
claims $ 8,005 $ 800,265
Reduction of debt of unsecured creditors 14,418 351,005
Discharge of bank indebtedness (a) 951,135 -
Stock put option (b) (25,351) -
$948,207 $1,151,270
(a) During 1994, the Company paid off its loan with its former primary lender
and recognized a gain as follows:
Gain on early extinguishment of debt $1,092,462
Expenses directly relating to debt refinancing (141,327)
$ 951,135
(b) In 1993, as part of the exchange of common stock for outstanding claims,
the
Company gave to certain creditors the option to "put" 20,745 shares of common
stock
back to the Company at $10 per share. During 1994, these creditors exercised
their
options which resulted in a loss of $25,351, thereby reducing the gain
previously recognized as a reduction of debt of unsecured creditors.
15. CONCENTRATION OF CREDIT RISK ARISING FROM CASH DEPOSITS
The Company maintains cash balances at a financial institution located in the
Delaware Valley area. The accounts at the institution are insured by the
Federal Deposit
Insurance Corporation up to $100,000. As of December 31, 1995, the Company's
exposure for uninsured cash balances was approximately $150,000.
F20
BERGER HOLDINGS, LTD. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
16. DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value
of each class of financial instruments for which it is practicable to estimate
that value.
Accounts Receivable and Accounts Payable
The carrying amount approximates fair value because of the short maturity of
those instruments.
Long-Term Debt
The fair value of the Company's long-term debt is estimated based on the
quoted market prices for the same or similar issues or on the current rates
offered to the
Company for debt of the same remaining maturities. As of December 31, 1995,
the
carrying value of this debt, aggregating $3,753,884 approximates the fair
value.
17. ACCOUNTING PRONOUNCEMENTS ISSUED BUT NOT YET EFFECTIVE
As of December 31, 1995, their were no accounting pronouncements issued,
but not yet effective which would have a material effect on the financial
statements of the Company.
F21
SCHEDULE V: BERGER HOLDINGS, LTD.
CONSOLIDATED PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED DECEMBER 31, 1995
BEGINNING ENDING
CLASSIFICATION BALANCE ADDITIONS RETIREMENTS BALANCE
LAND 485,000 0 0 485,000
BUILDING 3,842,865 0 0 3,842,865
MACHINERY 4,250,600 129,759 0 4,380,359
DIES 461,424 26,324 0 487,748
FURN. & FIXT. 354,365 5,602 0 359,967
TRUCKS & AUTOS 409,332 6,500 0 415,832
LEASEHOLD IMP. 587,152 58,802 0 645,954
TOTALS 10,390,738 226,987 0 10,617,725
YEAR ENDED DECEMBER 31, 1994
BEGINNING ENDING
CLASSIFICATION BALANCE ADDITIONS RETIREMENTS BALANCE
LAND 485,000 0 0 485,000
BUILDING 3,815,000 27,865 0 3,842,865
MACHINERY 3,779,193 471,407 0 4,250,600
DIES 422,616 38,808 0 461,424
FURN. & FIXT. 332,790 21,575 0 354,365
TRUCKS & AUTOS 324,011 102,582 (17,261) 409,332
LEASEHOLD IMP. 525,665 61,487 0 587,152
TOTALS 9,684,275 723,724 (17,261) 10,390,738
YEAR ENDED DECEMBER 31, 1993
BEGINNING ENDING
CLASSIFICATION BALANCE ADDITIONS RETIREMENTS BALANCE
LAND 485,000 0 0 485,000
BUILDING 3,815,000 0 0 3,815,000
MACHINERY 3,702,046 78,032 (885) 3,779,193
DIES 404,218 18,398 0 422,616
FURN. & FIXT. 313,999 18,790 0 332,789
TRUCKS & AUTOS 266,454 73,380 (15,824) 324,010
LEASEHOLD IMP. 505,956 19,710 0 525,666
TOTALS 9,492,673 208,310 (16,709) 9,684,274
SCHEDULE VI: BERGER HOLDINGS, LTD.
CONSOLIDATED ACCUMULATED DEPRECIATION PROPERTY, PLANT AND EQUIPMENT
YEAR ENDED DECEMBER 31, 1995
BEGINNING ENDING
DESCRIPTION BALANCE ADDITIONS RETIREMENTS BALANCE
BUILDING 709,000 128,095 0 837,095
MACHINERY 2,383,849 351,304 0 2,735,153
DIES 289,380 32,476 0 321,856
FURN. & FIXT. 302,344 20,959 0 323,303
TRUCKS & AUTOS 249,777 47,839 0 297,616
LEASEHOLD IMP. 300,659 59,773 0 360,432
4,235,009 640,446 0 4,875,455
YEAR ENDED DECEMBER 31, 1994
BEGINNING ENDING
DESCRIPTION BALANCE ADDITIONS RETIREMENTS BALANCE
BUILDING 582,000 127,000 0 709,000
MACHINERY 2,077,850 332,628 (26,629) 2,383,849
DIES 259,749 29,631 0 289,380
FURN. & FIXT. 278,697 23,647 0 302,344
TRUCKS & AUTOS 209,948 51,912 (12,083) 249,777
LEASEHOLD IMP. 245,019 55,640 0 300,659
3,653,263 620,458 (38,712) 4,235,009
YEAR ENDED DECEMBER 31, 1993
BEGINNING ENDING
DESCRIPTION BALANCE ADDITIONS RETIREMENTS BALANCE
BUILDING 455,000 127,000 0 582,000
MACHINERY 1,761,307 316,543 0 2,077,850
DIES 232,979 26,770 0 259,749
FURN. & FIXT. 254,441 24,256 0 278,697
TRUCKS & AUTOS 175,545 42,315 (7,912) 209,948
LEASEHOLD IMP. 193,438 51,581 0 245,019
3,072,710 588,465 (7,912) 3,653,263
BERGER HOLDINGS, LTD. AND SUBSIDIARY
SCHEDULE IX - CONSOLIDATED SHORT-TERM BORROWINGS
STATED MAX. AMT. AVG. AMT. WT AVG
BALANCE AVERAGE OUTSTNDING OUTSTNDING INT RT
AT END INTEREST DURING DURING DURING
Y/E DECEMBER 31, 1995 OF PER RATE PERIOD PERIOD PERIOD
- ---------------------- ---------- ---------- ---------- -------
REVOLVING CR. LN/TM LN $2,011,000 PRIME +3.5% $2,894,000 $2,608,000 12.31%
YEAR ENDED DECEMBER 31, 1994
- ----------------------------
REVOLVING CR. LN/TM LN $2,282,000 PRIME +3.5% $3,107,000 $2,769,000 11.32%
YEAR ENDED DECEMBER 31, 1993
- ----------------------------
There are no short term borrowings at December 31, 1993.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 171,432
<SECURITIES> 0
<RECEIVABLES> 1,264,065
<ALLOWANCES> 43,000
<INVENTORY> 1,593,642
<CURRENT-ASSETS> 3,103,486
<PP&E> 10,617,725
<DEPRECIATION> 4,875,455
<TOTAL-ASSETS> 9,885,339
<CURRENT-LIABILITIES> 3,573,257
<BONDS> 1,676,713
0
0
<COMMON> 35,314
<OTHER-SE> 15,088,747
<TOTAL-LIABILITY-AND-EQUITY> 9,885,339
<SALES> 15,653,321
<TOTAL-REVENUES> 15,653,321
<CGS> 13,738,061
<TOTAL-COSTS> 2,225,685
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 570,420
<INCOME-PRETAX> (849,861)
<INCOME-TAX> 0
<INCOME-CONTINUING> (849,861)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (849,861)
<EPS-PRIMARY> (.26)
<EPS-DILUTED> (.26)
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