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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): June 23, 1998
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CENTRAL SPRINKLER CORPORATION
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(Exact Name of Registrant Specified in Charter)
Pennsylvania 0-13940 23-2328106
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(State or Other (Commission File (I.R.S. Employer
Jurisdiction of Number) Identification No.)
Incorporation)
451 North Cannon Avenue
Lansdale, Pennsylvania 19446
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (215) 362-0700
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
The Company previously announced in its Annual Report on Form 10-K for the
fiscal year ended October 31, 1997 that it had recorded a charge of $13.2
million in its fourth fiscal quarter, which ended October 31, 1997, to cover
the estimated future costs associated with its voluntary program for the
testing and possible replacement of certain Omega fire sprinklers. The Company
also recently announced that it had entered into an agreement with class
representatives for the possible settlement of two of the class action
lawsuits pending against the Company, but that the settlement is subject to a
number of conditions, such as court approval, and further that the Company
continues to defend itself and engage in settlement negotiations with the
United States Consumer Product Safety Commission (the "Commission") regarding
the administrative action that the Commission initiated against the Company
with respect to its Omega sprinklers. In connection with recent settlement
meetings with the Commission, the Company continues to analyze the projected
costs of various remediation alternatives that may provide a basis for a
possible resolution of the pending class actions and of the Commission's
action. While it is impossible at this time to project a range of the likely
costs that would be involved due to uncertainty regarding a number of factors,
including whether the Commission's action can be settled, the terms of any
such settlement and the number of building owners that would actually
participate in any such settlement, the Company now believes that the amount
previously reserved for the Omega sprinkler issues most likely may have to be
increased to cover the costs that the Company may incur to resolve both the
class actions and the Commission's action. It is likely that the Company will
record a further charge to cover these issues, but the amount of this charge
has not yet been determined.
This document contains certain forward-looking statements that are subject to
risks and uncertainties. Forward-looking statements include certain
information relating to remediation alternatives that may provide a basis for
a possible resolution of the pending class actions and of the Commission's
action, the possible need to increase the amount the Company has reserved for
the Omega sprinkler situation, the possibility that the Company may incur
expenses to resolve the class actions and the Commission's actions, the
likelihood that the Company will record a further charge to cover issues
related to the Omega sprinkler, as well as information contained elsewhere in
this document where statements are preceded by, followed by or include the
words "believes," "expects," "may," "estimates," "anticipates," or similar
expressions. For such statements, the Company claims the protection of the
safe harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. Actual events or results may differ materially
from those discussed in the forward-looking statements as a result of various
factors including, without limitation, whether the Commission's action can be
settled, the terms of any such settlement, the number of building owners that
would actually participate in any such settlement, court approval of the
agreement the Company has reached with the class representatives of two of the
class actions, as well as other factors identified in this document, in the
Company's Annual Report on Form 10-K for the fiscal year ended October 31,
1997, and the Company's Quarterly Reports on Form 10-Q for the quarters ended
January 31, 1998 and April 30, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
CENTRAL SPRINKLER CORPORATION
(Registrant)
By /s/ Albert T. Sabol
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Albert T. Sabol
Executive Vice President, Finance and
Chief Financial Officer
Dated: June 23, 1998
