<PAGE>
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
For the Fiscal Year Ended September 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from _________ to __________
Commission File Number 0-14229
CROWN ANDERSEN INC.
(Exact name of Registrant as specified in its charter)
Delaware 58-1653577
(State of Incorporation) (I.R.S. Employer
Identification No.)
306 Dividend Drive, Peachtree City, Georgia 30269
(Address of principal executive offices)
(770) 486 2000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, Par Value $.10 Per Share
--------------------------------------
(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, 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 is not contained herein, and will not be contained, to the
best of the 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]
At December 15, 2000 there were 1,838,614 shares of the Registrant's common
stock outstanding. The aggregate market value of the Registrant's outstanding
common stock held by non-affiliates of the Registrant as of December 15, 2000
was $5,505,261.
Documents incorporated by reference:
-----------------------------------
Portions of the Registrant's 2000 Annual Report are incorporated by reference in
Part I and Part II hereof. Portions of the Registrant's Proxy Statement for the
2001 Annual Meeting of Stockholders to be held on February 21, 2001 are
incorporated by reference in Part III hereof.
Page 1 of 20
Index of Exhibits on Page 19
<PAGE>
CROWN ANDERSEN INC.
Annual Report on Form 10-K
For the Fiscal Year Ended September 30, 2000
<TABLE>
<CAPTION>
TABLE OF CONTENTS
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PART I
------
Item No. Page No.
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<S> <C> <C>
1 Business 3
2 Properties 9
3 Legal Proceedings 9
4 Submission of Matters to a Vote of Security Holders 9
4(A) Executive Officers of the Registrant 9
PART II
-------
5 Market for the Registrant's Common Equity and Related Stockholder Matters 10
6 Selected Financial Data 10
7 Management's Discussion and Analysis of Financial Condition and Results of Operation 11
8 Financial Statements and Supplementary Data 11
9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 11
PART III
--------
10 Directors and Executive Officers of the Registrant 11
11 Executive Compensation 11
12 Security Ownership of Certain Beneficial Owners and Management 11
13 Certain Relationships and Related Transactions 12
PART IV
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14 Exhibits, Financial Statement Schedules and Reports on Form 8-K 12
Signatures 15
Index to Financial Statement Schedules 16
</TABLE>
2
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PART I
------
ITEM 1. BUSINESS
----------------
General
-------
Crown Andersen Inc. (the "Company" or the "Registrant"), through its
subsidiaries, designs, manufactures, sells and installs a wide range of
industrial air pollution control and air handling systems, product recovery
equipment, and a complete line of medical, chemical and industrial waste
treatment equipment and systems. The Company is a Delaware corporation formed in
October 1985. It serves as a holding company for Andersen 2000 Inc. (hereinafter
called "Andersen") and Griffin Environmental Comany, Inc. (hereinafter called
"Griffin").
On December 16, 1998, the Company purchased all of the outstanding stock of
Griffin from its private owner. Griffin, based in Syracuse, New York, is a
manufacturer of fabric filter and cartridge dust collectors, product recovery
and pollution control equipment.
Andersen, which was a predecessor of the Company, is engaged in the design,
manufacture, sale, and installation of specialized industrial pollution control
equipment and systems and of medical, chemical and industrial waste treatment
equipment and systems, heat exchanger and boiler systems, and industrial fans
and blowers. Additionally, Andersen's wholly-owned subsidiary, Montair Andersen
bv in Sevenum, The Netherlands ("Montair Andersen") manufactures and installs
industrial equipment similar to the Andersen equipment for the European,
African, Middle Eastern and Far Eastern markets.
As used hereinafter, unless otherwise indicated, the term "Company" refers
to Crown Andersen Inc. and its subsidiaries, the term "Andersen" refers to
Andersen 2000 Inc. and Montair Andersen bv, and the term "Griffin" refers to
Griffin Environmental Company, Inc.
Business and Products
---------------------
Andersen began operations in 1971 as a manufacturer of particle sizing
instrumentation used primarily in the air pollution control field. In fiscal
1975, Andersen acquired a limited industrial air pollution control equipment
line. During fiscal 1978, Andersen sold the particle sizing instrumentation
segment of its business and expanded its industrial pollution control equipment
segment. In fiscal 1982, Andersen embarked on a program designed to expand its
industrial manufacturing capabilities into related product areas. As a result of
that program, Andersen began to manufacture and sell heavy duty industrial fans
and condensing heat exchange equipment in fiscal 1983. In fiscal 1984, Andersen
began to design, manufacture, and sell chemical and industrial waste
incineration systems as well as spray dryers and began to offer contract
chemical and mechanical engineering services. In fiscal 1990, Andersen began
offering turnkey medical waste incineration plants to its customers and expanded
that business in 1991 and 1992. In fiscal 1994, Andersen expanded its
incineration product line to include a new line of solid waste incinerators.
Materials handling products were also added for waste processing. In fiscal
1996, Andersen purchased from a former competitor the technology to manufacture
a line of small vertical incinerators and controlled air incinerators.
Andersen's pollution control systems include high efficiency filtration
systems, wet scrubbers for particulate and gaseous emission collection, sulfur
dioxide removal systems for oil and coal-fired steam boilers and steam
generators, odor control systems, gas coolers and condensers, mechanical
collectors for product recovery, industrial water and waste water treatment
systems, spray dryer systems to produce dry powders from waste liquids which are
produced in gas treating systems, heavy duty industrial fans and blowers used
primarily in
3
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high pressure and alloy steel applications in industrial plants, and heat
recovery systems which allow heat recovery from gas streams which previously
could not utilize heat recovery equipment because of their dirty or corrosive
nature. These heat recovery systems are used primarily by the chemical
industries and food processing industries.
Andersen's chemical and industrial waste treatment systems include thermal
oxidation systems (incinerators), waste liquid fired boilers, and chemical
treatment systems for which the company furnishes both engineering designs and
equipment as well as turnkey installation services. All of Andersen's medical
waste processing systems are based on thermal oxidation.
Montair Andersen designs, manufactures and sells industrial pollution
control systems, heat exchangers, incineration systems, and small animal
isolators and glove boxes for radioactive and chemically active materials
handling. The small animal isolators are used for animals such as chickens and
guinea pigs by medical research facilities, pharmaceutical research facilities
and animal husbandry facilities. The radioactive and chemically active materials
handling glove boxes are used by nuclear fuels processing facilities, nuclear
research facilities, and medical isotope manufacturing operations. These
products are sold to both industrial plants and research facilities. Montair
Andersen also builds specialized industrial machinery for the electronics,
aerospace and chemical process industries and in 1992 began the manufacture of
incinerators as well. The Montair Andersen product line now includes all of the
same incineration systems as Andersen.
Griffin designs, manufactures, and sells a line of fabric filters and
cartridge dust collectors, process recovery and pollution control equipment for
a variety of industries, including chemicals, food processing, concrete, steel,
other metals, clays, paper, glass, and other industries.
Sales and Distribution
----------------------
In general, Andersen's and Griffin's products are marketed to various
industrial manufacturing concerns in the United States by independent sales
representatives in exclusive territories. Sales of Griffin and Andersen products
are made in all regions of the country, with no one region serving as a dominant
market for these products. International sales result from the efforts of
Andersen, Griffin, and Montair Andersen employees, independent sales
representatives in many countries, and by licensee companies in those countries
where the technology has been licensed. Montair also uses sales agents in most
countries which it serves.
Facilities And Manufacturing
----------------------------
The corporate offices of the Company are located in a building owned by
Andersen in Peachtree City, Georgia. The corporate offices occupy approximately
2,000 square feet of the building, and the Company makes no payments to Andersen
for the use of this space. The manufacturing facilities operated by each of the
subsidiary companies are described below.
Andersen's manufacturing operations in North America are conducted in
Peachtree City, Georgia. This facility, which is owned by Andersen, has 37,600
square feet of inside manufacturing and office space and 100,000 square feet of
outdoor assembly area. This facility is equipped for heavy steel fabrication and
is located on a six acre tract of property in an industrial park.
Griffin owns a modern manufacturing facility in Syracuse, New York. The
property is located on 10 acres of land and includes a 60,000 square feet
manufacturing and office building.
4
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Andersen, through Montair Andersen b.v., owns its manufacturing facility in
the Netherlands. This plant contains approximately 40,000 square feet of space
and is located on 4.8 acres of industrial property in Sevenum, The Netherlands.
This facility was certified under the new world standard ISO-9001. Certification
was attained in fiscal year 1994.
Manufacturing equipment in the Peachtree City location, the Syracuse
location, and in the Sevenum, Netherlands location is owned by Andersen,
Griffin, and Montair Andersen, respectively. With the exception of extremely
heavy plate fabrication (over 1/2" thick), these facilities are capable of
manufacturing all of the products offered by Andersen, Griffin, and Montair
Andersen. Where use of a subcontract manufacturing facility is financially more
attractive than manufacturing in company owned facilities, a number of
subcontractors are used. Andersen and Griffin have adopted the practice of
purchasing from more than one of these suppliers on a routine basis in an effort
to insure adequate continuing sources of supply for subcontracted items in the
future. The Company has trained a number of employees in inspection procedures
and in quality control to ensure that these products are properly manufactured
before shipment by the subcontractors.
Most of the products sold by Andersen and Griffin must be custom engineered
for a specific application. For this reason, Andersen normally does not maintain
finished product in inventory. However, during fiscal 1996, Andersen purchased
certain inventory from a former competitor. Included in this purchase were
certain finished goods that are available for sale as a completed unit. During
1999 approximately 50% was sold to a customer. Andersen inventories some raw
materials which can be purchased more economically in large quantities,
particularly some of the high alloy stainless steels. Andersen believes that its
facilities are adequate for its current and anticipated foreseeable
manufacturing needs.
Foreign Operations And Export Sales
-----------------------------------
Montair Andersen manufactures and ships products to all European countries
and to some countries in the Middle East, Africa and Asia. Montair Andersen also
exports small animal isolators and some of its glove boxes to the United States
and Canada.
Andersen uses subcontract manufacturers in some foreign countries when
sales are made into those countries. In particular, it is common for Andersen to
use Canadian subcontract manufacturers for sales in Canada. Most of Andersen's
foreign products, however, are manufactured in Andersen's plant in the United
States.
Griffin has occasionally sold its products outside the United States and
Canada. Griffin is in the process of expanding its export business.
Foreign sales in fiscal 2000, 1999, and 1998 accounted for approximately
27%, 33% and 62%, respectively, of the Company's total revenues. Foreign sales
for fiscal 2000, 1999 and 1996 totaled approximately $5.4 million, $5.3 million,
$8.9 million, respectively.
Licensing
---------
Andersen has licensed the manufacture of its products in Japan and India.
During fiscal 1976, Andersen licensed a Japanese firm to manufacture and sell
HEAF(R) and CHEAF(R) gas filtration products in the Far East. Andersen was paid
an initial fee of $70,000 and then established a royalty arrangement for future
sales. The royalty arrangement included a minimum royalty payment on an annual
basis. In late fiscal 1977, Andersen negotiated a transfer of its license to a
second Japanese firm. The second Japanese firm was active in sales of the
HEAF(R) and CHEAF(R) equipment and installed more than 300 systems in Japan
under license from Andersen. This agreement expired in late 1991, and the
Japanese licensee agreed with Andersen to maintain a formal sales cooperation
arrangement in Japan and Korea whereby
5
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the Japanese licensee is still allowed use of the HEAF(R) and CHEAF(R)
technologies in Japan and Korea in exchange for providing sales leads to
Andersen for all other Far Eastern countries.
In fiscal 1986, Andersen negotiated a license agreement with Paramount
Pollution Control Pvt Ltd in Baroda, India. Andersen licensed manufacture of all
of its product lines, including those manufactured by Montair Andersen, to the
Indian firm. This agreement called for an initial payment of $85,000 to Andersen
for initial technical exchange and training, followed by royalties calculated as
a percentage of product sales in India in the future. An extension of this
agreement was signed in 1997 for five years. To date, revenues from these
agreements have not been material.
Griffin licenses a cartridge filter system from a private company in the
United States.
Competition
-----------
In the air pollution control field, Andersen competes with three or four
companies of similar size which have similar product lines. In 22 years of
direct competition with these firms, Company management has determined that
these competitors do not have the engineering capabilities that Andersen does,
and most of these companies do not routinely offer auxiliary systems and
installation services with their quotations. Andersen considers the ability to
furnish auxiliary systems and installation as an advantage over its competition.
There are some competitors in the field which are somewhat larger than Andersen
and which may have greater financial resources. However, these larger companies
tend to concentrate on large air pollution control projects associated with
utility plant construction or with large municipal projects. As a result, they
are not routine competitors with Andersen since Andersen does not compete in
these fields.
In medical, chemical and industrial waste incineration, Andersen competes
with a limited number of companies which have greater financial resources. These
waste incineration systems, however, are purchased primarily on the basis of
advanced design features rather than strictly on price. As a result, Andersen
believes that it can be successful in capturing an increasing market share in
the coming years due to its technological capabilities.
With the possible exceptions of sulfur dioxide removal scrubbing systems
for small industrial boilers, scrubbing equipment for medical, chemical and
industrial waste incinerators, and rotary kiln incinerators for chemical and
hazardous waste, Andersen does not consider itself the dominant supplier in
those industries in which it competes. In industrial boiler sulfur dioxide
removal systems and in scrubbing systems for waste incinerators, Andersen
believes, based on industry publications, published market surveys and trade
association records, that it currently holds a 30% or greater market share in
the United States. Internationally Andersen believes it has captured a 15-20%
market share in rotary kiln incinerators for chemical and hazardous wastes.
Griffin competes with more than 20 companies which offer similar products
in the United States. Some are larger than and some are smaller than Griffin.
Principal Customers
-------------------
During 2000 three customers accounted for approximately 23% of the
Company's consolidated revenues. It is the opinion of management that the loss
of such customers would not have a material adverse effect on the operations of
the Company. Such business is not normally repetitive and, therefore, is not
dependent upon any single customer or individual group of customers.
6
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Backlog
-------
The Company's consolidated backlog of firm orders as of the dates set forth
below were as follows:
September 30, 2000 - $16,912,375
September 30, 1999 - $12,817,698
September 30, 1998 - $10,744,615
September 30, 1997 - $ 9,171,100
The increase in backlog in 2000 reflects $7.5 million in orders received by
Andersen late in the year. All backlog is scheduled for shipment in 2001.
Raw Materials
-------------
Since the beginning of fiscal 1990, Andersen has encountered no shortages
of alloys used to fabricate its products. Andersen inventories high alloy steels
when substantial discounts can be negotiated by purchasing large quantities and
to avoid delays in fabrication and shipment caused by materials availability
problems. Beyond this, however, Andersen generally purchases raw materials after
orders are received for those products which will require those raw materials.
Griffin has never encountered materials shortages which resulted in
production delays.
Patents And Trademarks
----------------------
Andersen owns domestic and foreign patents on its HEAF(R) and CHEAF(R) gas
filtration systems, its sulfur dioxide removal scrubbing systems, a chemical
waste regeneration process for the sulfur dioxide removal system, an
incineration process, and improvements to these product lines which have
occurred in recent years. Andersen was granted patent protection on its
combination spray dryer-scrubber system for air pollution control on
incinerators in 1991. The oldest of the patents expired in 1991 and the newest
expires in 16 years. Andersen holds trademarks on the HEAF(R) and CHEAF(R)
systems, the SUBDEW(R) condensing heat exchanger, and the ANDERSEN(R) name. The
trademarks generally expire 20 years from the date of registration but may be
renewed for one or more additional 20 year periods when they first expire.
While Andersen considers its patents to be valuable assets which sometimes
provide a competitive advantage in the marketplace, Andersen does not believe
that the loss of patent protection on any of its products as a result of the
challenge to the validity of such patents would have a material impact on
Andersen's revenues and earnings. In countries such as Germany and Japan, the
patents on Andersen's products are considered to be substantially more important
than they are on the same products in the United States. For this reason,
Andersen works closely with its licensees to insure that any new patent
applications anticipate potential challenges to their validity in the future.
The validity of Andersen's patents on any of its products has never been
challenged, either in the United States or in foreign countries. Although
Andersen is not aware of any basis upon which such patents might be challenged,
there is no assurance that proceedings challenging these patents will not be
instituted in the future.
The Company examines every product which is developed to determine its
patentability. If the equipment or process is determined to be patentable by the
Company, a patent application is filed, not only in the United States but in
those foreign countries where the product is considered saleable. The patents
are particularly valuable when licensing of manufacturers in foreign countries
is considered.
7
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Product Warranties
------------------
In connection with most contracts for manufacture and sale of Andersen or
Griffin equipment, the Company warrants the equipment manufactured to be free
from defects in material and workmanship under normal use and service for a
period of eighteen months after shipment, or one year after completion of
erection, or one year after initial operation, whichever occurs first.
Andersen's and Griffin's obligation is generally limited to the repair or
replacement of the defective parts. All equipment not manufactured by Andersen
or Griffin carries only such warranty, if any, as given by the manufacturer. In
addition, Andersen sometimes provides performance guarantees for equipment and
systems which it furnishes. Each proposed application is carefully evaluated for
its potential risk before such guarantees are offered to the customer. Warranty
and performance guarantee related expenses are recognized as they are incurred.
As of September 30, 2000, Andersen has established a $115,000 reserve for future
warranty repairs and Griffin had established a $40,000 reserve for warranty
claims.
Research And Development
------------------------
Andersen maintains a small development laboratory in its plant. Some of the
research and development activities done by Andersen are conducted in Andersen's
customers' plants utilizing test equipment and systems designed and supplied by
Andersen. The results of such tests enable Andersen to provide the customer with
a guaranteed performance system if the development work is successful. The
customer is typically charged for rental of Andersen's equipment during such
activities, and the customer is allowed to use, in its own plant, any
developments which result from such testing. Andersen, however, reserves all
rights to patents or other proprietary benefits which might result from such
tests.
Research and development expenses are expensed in the year incurred. Such
expenses were less than $10,000 per year during fiscal years 2000, 1999 and
1998.
Environmental Controls
----------------------
To a large extent, the demand for the Company's products is dependent upon
the enforcement of federal, state, and international regulations regarding air
pollution, water pollution, and general industrial pollution. There has been a
significant increase in enforcement actions related to hazardous waste disposal
during the past three years outside the United States. This enforcement action
has resulted in a greater demand outside the United States for incineration
systems offered by Andersen. This increased enforcement activity should benefit
both Andersen and Montair in fiscal 2001. On the other hand, any relaxation of
environmental laws and regulations by the federal, state, or international
governments or any delay in the implementation of such laws or regulations could
have an adverse effect on the Company's operations.
Employees
---------
The Company and its subsidiaries employed a total of 123 individuals as of
September 30, 2000, including 11 officers, 81 technical and manufacturing
people, and 31 others engaged in financial, sales, and secretarial activities.
Approximately 72% of these people are employed at the Peachtree City, Georgia
and at the Syracuse, New York facilities by either Andersen, Griffin, or by the
Company, and 28% are employed at Montair Andersen's Sevenum, The Netherlands
plant.
Seasonal Nature of Business
---------------------------
Andersen's and Griffin's business has not been seasonal in prior years.
8
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ITEM 2. PROPERTIES
-------------------
Andersen owns six acres of land in Peachtree City, Georgia, with a 15-20
year old, 36,000 square feet office and manufacturing facilities. Andersen owns
all of the office furniture and equipment, all of the manufacturing equipment,
and all of the testing equipment at this facility. Andersen also owns an 80 acre
vacant land site in a remote area of Kern County, California. The carrying value
of this vacant land is $60,000.
Montair Andersen owns its facility in Sevenum, The Netherlands, which
includes 40,000 square feet of office and manufacturing space located on 4.8
acres of land. Montair owns all of its manufacturing and office equipment in
Sevenum.
Griffin owns its facility in Syracuse, New York, which includes 60,000
square feet of office and manufacturing space located on ten acres of land.
The Company (through a defunct subsidiary - Struthers Thermo-Flood Corp.)
holds the rights to title of the property in Winfield, Kansas, including six
buildings on 13 acres of land, all of which were owned under capital leases by
Thermo-Flood. These facilities contain approximately 137,400 square feet of
manufacturing space and 20,000 square feet of office area. The Company abandoned
the Thermo-Flood property in 1992, but received the rights to re-acquire this
property back in 1998 upon settlement of litigation. This property is currently
leased to unrelated companies, but is also offered for sale.
Management believes that the facilities discussed above are adequate for
the current needs of all of the Company's operations for the foreseeable future.
For additional information regarding the Company's property and equipment,
see Note 6 to the Notes to Consolidated Financial Statements contained in the
Company's 2000 Annual Report.
ITEM 3. LEGAL PROCEEDINGS
--------------------------
A discussion of the Company's pending and threatened litigation and
unasserted claims or assessments is set forth under the caption "Commitments and
Contingencies" (Note 12 to the Consolidated Financial Statements) in the
Company's 2000 Annual Report. Such discussion is incorporated herein by
reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-----------------------------------------------------------
No matters were submitted to a vote of the Company's shareholders, through
the solicitation of proxies or otherwise, during the fourth quarter of fiscal
2000.
ITEM 4(A). EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------------------
Set forth below in accordance with General Instruction G(3) to Form 10-K
and Instruction 3 to Item 401(b) of Regulation S-K is information as of December
15, 2000 regarding the executive officers (including executive officers who are
also directors) of the company.
9
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<TABLE>
<CAPTION>
Name Age Occupation During The Past Five Years
----------------------------------- --- ----------------------------------------------------------------------------------
<S> <C> <C>
Jack D. Brady 57 Chairman of the Board, President and Chief Executive Officer of the Company since
1985; Chairman of the Board of Andersen since 1984; President of Andersen since
2000; President and Treasurer of Andersen from 1978 to 1995; Executive Vice
President of Andersen from 1975 until 1978; Director of Andersen since 1975;
Director of Montair Andersen since 1984; Director of Griffin since 1998.
Milton Emmanuelli 66 Chief Financial Officer of the Company since September 21, 1992; elected
Secretary/treasurer of the Company on December 16, 1992, and Controller/treasurer
on December 13, 1994.
Thomas Van Remmen 43 Vice President of Sales and Marketing for Andersen since 2000; Director of the
Company from 1996 to 2000; President oo Andersen from 1996 to 2000; General
Manager of Cleaver-Brooks incineration and watertube boiler division of Aqua-Chem
Inc. from 1986 to 1996.
Randall H. Morgan 52 Secretary of the Company since 1994; Secretary/Treasurer from 1985 to 1992; Vice
President and Secretary of Andersen since 1979.
Thomas Graziano 57 Director of the Company, President of Griffin Environmental Company, Inc. since
April 1999; Self-employed (consultant) 1997 to 1998; President, Howden Fan
Company 1998 - January 1999; Senior Vice President, Fischback and Moore, 1994 to
1996.
</TABLE>
The Company has no paid officers. All officers of the Company are also
officers of one or more subsidiaries and are paid by such subsidiaries. See
"Item 11. Executive Compensation."
The executive officers of the Company and its subsidiaries are elected
annually by the respective Boards of Directors and serve at the discretion of
such Boards.
PART II
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ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
--------------------------------------------------------------------------
MATTERS
-------
Information relating to the market for, holders of and dividends paid on
the Company's common stock is set forth under the caption "Common Stock
Information" in the Company's 1999 Annual Report. Such information is
incorporated herein by reference. The 2000 Annual Report is filed as Exhibit 13
to this report.
ITEM 6. SELECTED FINANCIAL DATA
--------------------------------
Selected consolidated financial data for the Company for each year of the
five year period ended September 30, 2000 are set forth under the caption
"Selected Financial Data" in the 2000 Annual Report referred to in Item 5 above.
Such financial data are incorporated herein by reference.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS
-------------
A discussion of the Company's financial condition and results of operations
is set forth under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the 2000 Annual Report
referred to in Item 5 above. Such discussion is incorporated herein by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
----------------------------------------------------
The consolidated balance sheets of the Company as of September 30, 2000 and
1999 and the Company's consolidated statements of income, stockholders' equity
and cash flows for each of the three years in the period ended September 30,
2000, together with the related notes thereto and the report of independent
certified public accountants thereon dated December 14, 2000, are set forth in
the 2000 annual report referred to in item 5 above. Such consolidated financial
statements, notes and reports are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
------------------------------------------------------------------------
FINANCIAL DISCLOSURE
----------------------
No independent certified public accountant of the Company has, during the
two fiscal years ended September 30, 2000 or subsequent thereto, resigned,
indicated any intent to resign or been dismissed as the independent certified
public accountants of the Company.
PART III
--------
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
-----------------------------------------------------------
Information relating to the directors of the Company is set forth under the
caption "Election of Directors-Nominees" in the Company's Proxy Statement for
its 2000 Annual Meeting of Stockholders to be held on February 14, 2001. Such
information is incorporated herein by reference. Information relating to the
executive officers of the Company is, pursuant to Instruction 3 of Item 401(b)
of Regulation S-K and General Instruction G(3) of Form 10-K, set forth as Part
I, Item 4(A) of this report under the caption "Executive Officers of the
Registrant."
ITEM 11. EXECUTIVE COMPENSATION
-------------------------------
Information relating to management compensation is set forth under the
captions "Election of Directors - Director Compensation" and "Election of
Directors - Executive Compensation" in the Proxy Statement referred to in Item
10 above. Such information is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
-----------------------------------------------------------------------
Information relating to ownership of the Company's $0.10 par value common
stock as of January 1, 2001 by (i) any person or group known to the Company to
be the beneficial owner of more than 5% of the Company's outstanding common
stock, (ii) each nominee for election as a director of the Company at the
Company's 2001 Annual Meeting of Stockholders, and (iii) all directors and
officers of the Company as a group is set forth under the captions "Voting -
Principal Stockholders" and "Election of Directors - Nominees" in the Proxy
Statement referred to in Item 10 above. Such information is incorporated herein
by reference.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------
Information regarding certain transactions between the Company, its
affiliates and certain other persons is set forth under the caption "Election of
Directors - Certain Relationships and Related Transactions" in the Company's
Proxy Statement referred to in Item 10 above. Such information is incorporated
herein by reference.
PART IV
-------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
-------------------------------------------------------------------------
(a) Documents Filed as Part of This Report:
(1) Financial Statements.
The following consolidated financial statements are incorporated in
Part II, Item 8 of this report from the Company's 2000 Annual Report referred to
in Item 5 above:
Consolidated Balance Sheets as of September 30, 2000 and 1999;
Consolidated Statements of Loss and Comprehensive Loss for the three fiscal
years ended September 30, 2000;
Consolidated Statements of Stockholders' Equity for the three fiscal years
ended September 30, 2000;
Consolidated Statements of Cash Flows for the three fiscal years ended
September 30, 2000;
Summary of Accounting Policies;
Notes to Consolidated Financial Statements;
Report of Independent Certified Public Accountants.
(2) Financial Statement Schedules.
The following financial statement schedules are set forth on page 17
of this report. All other schedules for which provision is made in the
applicable accounting regulations of the Securities and Exchange Commission have
been omitted because such schedules are not required under the related
instructions or are inapplicable or because the information required is included
in the consolidated financial statements or notes thereto. See the Index to
Financial Statement Schedules on page 18 hereof.
Report of Independent Certified Public Accountants on Financial Statement
Schedules.
Schedule II - Valuation and Qualifying Accounts and Reserves
(3) Exhibits.
The exhibits listed on the following pages are filed as part of or are
incorporated by reference in this report. Where such filing is made by
incorporation by reference to a previously filed registration statement or
report, such registration statement or report is identified in parentheses.
12
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
------------------------------------------------------------------------------------------------------------------
<S> <C>
13(a) Certificate of Incorporation of the Company (Exhibit 3(a) to the Company's Registration Statement on Form S-4,
No. 33-684 (the "Form S-4 Registration Statement")
3(b) Certificate of Amendment of the Certificate of Incorporation of the Company filed with the Secretary of State of
Delaware on March 18, 1987 (Exhibit 3(b) to the Company's Annual Report on Form 10-k for the fiscal year ended
September 30, 1987)
3(c) Bylaws of the Company (Exhibit 3(b) to the Form S-4 Registration Statement)
4 Common Stock Certificate (Exhibit 4(a) to the Form S-4 Registration Statement)
10(a) Agreement and Plan of Reorganization dated as of September 30, 1985 among the Company, Andersen and Crown
(Exhibit 2 to the Form S-4 Registration Statement)
10(b) 1985 Incentive Stock Option Plan and related form of Option Agreement (Exhibit 10(a) to the Form S-4 Registration
Statement)
10(c) First 1987 Amendment to the 1985 Incentive Stock Option Plan (Exhibit 10(c) to the Company's Annual Report on
Form 10-k for the fiscal year ended September 30, 1987)
10(d) Executive Option Plan (Exhibit 10(d) to the Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1987)
10(e) Key Employee Stock Option Plan (Exhibit 10(e) to the Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1987)
10(f) 1985 Directors Stock Warrant Plan and related form of Stock Purchase Warrant (Exhibit 10(b) to the Form S-4
Registration Statement)
10(g) Cash Incentive Program For Key Employees (Exhibit 10(g) to the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1987)
10(h) Employment Agreement dated October 1, 1992 between Jack D. Brady and the Company
10(i) Employment Agreement dated October 1, 1992 between Crown and Jack C. Hendricks
10(j) Lease between the City of Winfield, Kansas and the City of Arkansas City, Kansas, as landlord, and Thermo-Flood,
as tenant, dated as of October 1, 1980 and related documents regarding industrial revenue bonds issued for
Thermo-Flood's properties in Winfield, Kansas (Exhibit 10(p) to the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1988)
10(k) Revolving Credit Agreement dated as of July 25, 1989 among the Company, Andersen, Crown, Thermo-Flood and The
Citizens and Southern National Bank, together with the related Pledge Agreement, Security Agreement, Special
Revolving Credit Note and Working Capital Revolving Credit Note (Exhibit 10(s) to the Company's Annual Report on
Form 10-K for the fiscal year ended September 30, 1989)
10(l) Purchase Agreement dated April 30, 1991 between the Company and Josef A.C. van Stratum for the acquisition by the
Company of the remaining 19% of Montair Andersen stock (Exhibit 2 to the Company's Report on Form 8-K dated April
30, 1991)
10(m) Agreement for the Purchase of Stock dated as of September 13, 1991 among George T. Condy, Lawrence E. Wiegman,
Kenneth Kirby and Crown for the acquisition of the stock of Roanoke by Crown (Exhibit 2 to the Company's Report
on Form 8-K dated September 13, 1991).
10(n) Revolving Credit Agreement Amendment dated as of March 31, 1992 among the Company, Andersen, Crown and
Thermo-flood and Nationsbank of Georgia, N.A. (formerly known as The Citizens and Southern National Bank) - (See
Exhibit 10p)
10(o) Second Amendment to Revolving Credit Agreement among the Company, Andersen, Crown, Thermo-Flood and Nationsbank
of Georgia, N.A. (formerly known as The Citizens and Southern National Bank) - (See Exhibit 10p)
10(p) Loan agreement dated as of March 31, 1993 among the Company, Andersen and Crown and Nationsbank of Georgia N.A.
(Exhibit 10(u) to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1993)
10(q) Agreement for Sale of Roanoke Industries, Inc. assets, dated July 19, 1994
10(r) Agreement for Sale of Crown Rotational Molded Products, Inc. assets, dated July 19, 1994 (Exhibit A to the
Company's Notice of Special Meeting and Proxy Statement 1994)
10(s) Asset Purchase Agreement dated December 21, 1995 between the Cleaver-Brooks Division of Aqua-Chem and Andersen
2000 Inc. filed with Form 10Q for quarter ended December 31, 1995
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
------------------------------------------------------------------------------------------------------------------
<S> <C>
10(t) Commercial Loan Agreement, General Security Agreement, Commercial Promissory Note, and Revolving Note dated June
28, 1996 between South Trust Bank of Georgia, N.A. and Crown Andersen Inc. and Andersen 2000 Inc. filed with Form
10q for the quarter ended June 30, 1996.
10(u) Loan Documents Modification Agreement dated February 28, 1997 between Crown Andersen Inc., Andersen 2000 Inc.,
and Southtrust Bank of Georgia, N.A., filed with Form 10Q for the quarter ended March 31, 1997.
10(v) 1998 Directors Warrant Plan.
10(w) 1998 Incentive Stock Option Plan.
10(x) Loan Documents Modification Agreement dated February 21, 1998 and March 29, 1998 between Crown Andersen Inc.,
Andersen 2000 Inc and Southtrust Bank of Georgia N.A., filed with Form 10Q for quarter ended March 31, 1998.
13* 2000 Annual Report - Filed herewith
21 Subsidiaries - filed herewith
27 Financial Data Schedule - Filed herewith
</TABLE>
*Portions of the Company's 2000 Annual Report, as indicated in this Annual
Report on Form 10-K, are incorporated herein by reference. Other than as so
noted herein, the 2000 Annual Report is furnished to the Commission solely for
its information and is not deemed to be "filed" with the Commission or subject
to the liabilities of Section 18 of the Securities Exchange Act of 1934.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the fiscal quarter ended
September 30, 2000.
(c) Exhibits:
See Item 14 (a)(3) above.
(d) Financial Statement Schedules:
See Item 14 (a)(2) above.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
CROWN ANDERSEN INC.
-------------------
(Registrant)
Date: January 8, 2001 BY: /s/ Jack D. Brady
--------------------------------
Jack D. Brady, Chairman of the Board
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:
<TABLE>
<S> <C> <C>
/s/ Jack D. Brady Chairman of the Board, President, January 8, 2001
------------------------------- Principal Executive Officer and
Jack D. Brady Principal financial Officer
/s/ Jack C. Hendricks Director January 8, 2001
-------------------------------
Jack C. Hendricks
/s/ Milton Emmanuelli Controller/treasurer and Principal January 8, 2001
------------------------------- Accounting Officer
Milton Emmanuelli
/s/ Richard A. Beauchamp Director January 8, 2001
-------------------------------
Richard A. Beauchamp
/s/ L. Karl Legatski Director January 8, 2001
-------------------------------
L. Karl Legatski
/s/ Thomas Van Remmen Director January 8, 2001
-------------------------------
Thomas Van Remmen
/s/ Michael P. Marshall Director January 8, 2001
-------------------------------
Michael P. Marshall
/s/ Ruyintan E. Mehta Director January 8, 2001
-------------------------------
Ruyintan E. Mehta
/s/ Thomas Graziano Director January 8, 2001
-------------------------------
Thomas Graziano
/s/ Rene C. W. Francken Director January 8, 2001
-------------------------------
Rene C. W. Francken
</TABLE>
15
<PAGE>
CROWN ANDERSEN INC.
INDEX TO FINANCIAL STATEMENT SCHEDULES
Page
----
Report of Independent Certified Public Accountants on
Financial Statement Schedules 17
Schedule Schedule No.
-------- ------------
Valuation and Qualifying Accounts and Reserves II 18
All other schedules have been omitted because they are either not required, not
applicable, or the information has otherwise been supplied.
16
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors and Stockholders
of Crown Andersen Inc.
Peachtree City, Georgia
The audits referred to in our report dated December 14, 2000, relating to the
consolidated financial statements of Crown Andersen Inc. and Subsidiaries, which
is incorporated in Item 8 of the Form 10-K by reference to the Annual Report to
Stockholders for the year ended September 30, 2000, included the audit of the
financial statement schedule listed in the accompanying index. This financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion on this financial statement schedule
based on our audits.
In our opinion, such financial statement schedule presents fairly, in all
material respects, the information set forth therein.
BDO SEIDMAN, LLP
Atlanta, Georgia
December 14, 2000
17
<PAGE>
SCHEDULE II
-----------
CROWN ANDERSEN INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
=====================================================
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- -------- -------- --------
Balance at Additions
beginning of charged to costs Balance at
Description period and expenses Deductions end of period
----------- ------------ ---------------- ---------- -------------
<S> <C> <C> <C> <C>
September 30, 2000
------------------
Allowance for doubtful accounts $174,543 $46,136 $19,718 $200,961
======== ======= ======= ========
September 30, 1999
------------------
Allowance for doubtful accounts $ 99,324 $77,988 $ 2,769 $174,543
======== ======= ======= ========
September 30, 1998
------------------
Allowance for doubtful accounts $113,476 $(7,072) $ 7,080 $ 99,324
======== ======= ======= ========
</TABLE>
18
<PAGE>
CROWN ANDERSEN INC.
INDEX TO EXHIBITS
-----------------
<TABLE>
<CAPTION>
Exhibit No. Description Page
<S> <C> <C>
----------- ----------------------------------------------------------------- ----
</TABLE>
13(A) Certificate of Incorporation of the Company (Exhibit 3(a) to the
Company's Registration Statement on Form S-4, No. 33-684 (the
"Form S-4 Registration Statement")
3(B) Certificate of Amendment of the Certificate of Incorporation of
the Company filed with the Secretary of State of Delaware on March
18, 1987 (Exhibit 3(b) to the Company's Annual Report on Form 10-k
for the fiscal year ended September 30, 1987)
3(c) Bylaws of the Company (Exhibit 3(b) to the Form S-4 Registration
Statement)
4 Common Stock Certificate (Exhibit 4(a) to the Form S-4
Registration Statement)
10(a) Agreement and Plan of Reorganization dated as of September 30,
1985 among the Company, Andersen and Crown (Exhibit 2 to the Form
S-4 Registration Statement)
10(b) 1985 Incentive Stock Option Plan and Related form of Option
Agreement (Exhibit 10(a) to the Form S-4 Registration Statement)
10(c) First 1987 Amendment to the 1985 Incentive Stock Option Plan
(Exhibit 10(c) to the Company's Annual Report on Form 10-k for the
fiscal year ended September 30, 1987)
10(d) Executive Option Plan (Exhibit 10(d) to the Company's Annual
Report on Form 10-K for the fiscal year ended September 30, 1987)
10(e) Key Employee Stock Option Plan (Exhibit 10(e) to the Company's
Annual Report on Form 10-K for the fiscal year ended September 30,
1987)
10(f) 1985 Directors Stock Warrant Plan and related form of Stock
Purchase Warrant (Exhibit 10(b) to the Form S-4 Registration
Statement)
10(g) Cash Incentive Program For Key Employees (Exhibit 10(g) to the
Company's Annual Report on Form 10-k for the fiscal year ended
September 30, 1987)
10(h) Employment Agreement dated October 1, 1992 between Jack D. Brady
and the Company
10(i) Employment Agreement dated October 1, 1992 between Crown and Jack
C. Hendricks
10(j) Lease Between the City of Winfield, Kansas and the City of
Arkansas City, Kansas, as Landlord, and Thermo-flood, as tenant,
dated as of October 1, 1980 and related documents regarding
industrial revenue bonds issued for Thermo-flood's properties in
Winfield, Kansas (Exhibit 10(p) to the Company's Annual Report on
Form 10-k for the fiscal year ended September 30, 1988)
10(k) Revolving Credit Agreement dated as of july 25, 1989 among the
Company, Andersen, Crown, Thermo-Flood and The Citizens and
Southern National Bank, together with the related Pledge
Agreement, Security Agreement, Special Revolving Credit Note and
Working Capital Revolving Credit Note (Exhibit 10(s) to the
Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1989)
10(l) Purchase Agreement dated April 30, 1991 between the Company and
Josef A.C. van Stratum for the acquisition by the Company of the
remaining 19% of Montair Andersen Stock (Exhibit 2 to the
Company's Report on Form 8-K dated April 30, 1991)
10(m) Agreement for the Purchase of Stock dated as of September 13, 1991
among George T. Condy, Lawrence E. Wiegman, Kenneth Kirby and
Crown for the acquisition of the stock of Roanoke by Crown
(Exhibit 2 to the Company's Report on form 8-K dated September 13,
1991).
10(n) Revolving Credit agreement Amendment dated as of March 31, 1992
among the Company, Andersen, Crown and Thermo-Flood and
Nationsbank of Georgia, N.A. (formerly known as the Citizens and
Southern National Bank) - (see Exhibit 10p)
10(o) Second Amendment to Revolving Credit Agreement among the Company,
Andersen, Crown, Thermo-Flood and NationsBank of Georgia, N.A.
(formerly known as the Citizens and Southern National Bank) - (see
Exhibit 10p)
19
<PAGE>
CROWN ANDERSEN INC.
INDEX TO EXHIBITS
-----------------
<TABLE>
<CAPTION>
Exhibit No. Description Page
<S> <C> <C>
----------- ----------------------------------------------------------------- ----
</TABLE>
10(p) Loan agreement dated as of March 31, 1993 among the Company,
Andersen and Crown and Nationsbank of Georgia N.a. (Exhibit 10(u)
to the Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1993)
10(q) Agreement for Sale of Roanoke Industries, Inc. assets, dated July
19, 1994
10(r) Agreement for Sale of Crown Rotational Molded Products, Inc.
assets, dated July 19, 1994 (Exhibit A to the Company's Notice of
Special Meeting and Proxy Statement 1994)
10(s) Asset Purchase Agreement dated December 21, 1995 between the
Cleaver-brooks Division of Aqua-chem and Andersen 2000 Inc. filed
with Form 10q for quarter ended December 31, 1995
10(t) Commercial Loan Agreement, General Security Agreement, Commercial
Promissory Note, and Revolving Note dated June 28, 1996 between
South Trust Bank of Georgia, N.A. and Crown Andersen Inc. and
Andersen 2000 Inc. filed with Form 10q for the quarter ended June
30, 1996.
10(u) Loan Documents Modification Agreement Dated February 28, 1997
Between Crown Andersen Inc., Andersen 2000 Inc., And Southtrust
Bank Of Georgia, N.a., Filed With Form 10q For The Quarter Ended
March 31, 1997.
10(v) 1998 Directors Warrant Plan.
10(w) 1998 Incentive Stock Option Plan.
10(x) Loan Documents Modification Agreement dated February 21, 1998 and
March 29, 1998 between Crown Andersen Inc., Andersen 2000 Inc and
Southtrust Bank of Georgia N.A., filed with Form 10q for quarter
Ended March 31, 1998.
13* 2000 Annual Report - Filed herewith
21 Subsidiaries - Filed herewith
27 Financial Data Schedule - Filed herewith
*Portions of the Company's 2000 Annual Report, as indicated in this Annual
Report on Form 10-K, are incorporated herein by reference. Other than as so
noted herein, the 2000 Annual Report is furnished to the Commission solely for
its information and is not deemed to be "filed" with the Commission or subject
to the liabilities of Section 18 of the Securities Exchange Act of 1934.
Any exhibit will be furnished upon written request to the Company. There is
a charge of $.50 per page to cover expenses for copying and mailing. Requests
should be addressed to Randall H. Morgan, Crown Andersen Inc., 306 Dividend
Drive, Peachtree City, Georgia 30269.
20
