<PAGE>
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
[X] Annual Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (fee required)
FOR FISCAL YEAR ENDED SEPTEMBER 30, 2000
OR
[_] Transaction Report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 (no fee required)
COMMISSION FILE NUMBER 0 - 14358
PARIS CORPORATION
(Exact name of Registrant as specified in its Charter)
PENNSYLVANIA 23-1645493
(State or other Jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
700 HOBBS ROAD, WAYNE PENNSYLVANIA 19087
(Address of principal executive office) (zip code)
Telephone: (609) 387-7300
(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:
TITLE
Capital Stock, $.004/par value per share
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 twelve months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes No
[X] [_]
The aggregate market value of the voting stock held by nonaffiliates of
the registrant as of November 15, 2000 was $1,878,317.
Number of shares of outstanding common stock as of November 15, 2000:
3,270,535 shares.
Definitive Proxy Statement for the February 9, 2001 annual meeting of
the stockholders has been filed within 120 days after the end of the fiscal year
covered by this annual report.
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ITEM 1 - BUSINESS
-----------------
GENERAL
-------
Paris Corporation ("Paris"), formerly Paris Business Forms, Inc., incorporated
in 1964 under the laws of the Commonwealth of Pennsylvania, is a holding company
with four wholly-owned subsidiaries: two active operating companies in New
Jersey and Texas, one inactive Florida corporation, and a Delaware corporation
which owns the Company's trademarks. Paris Business Products, Inc., a New
Jersey corporation and Paris Business Forms, Inc., a Texas corporation (dba,
Paris Business Products, Inc.), are the two operating companies, with plants in
New Jersey and Texas, respectively. PBF Corporation is the Delaware
corporation. The Texas and Florida corporations are both wholly-owned
subsidiaries of the New Jersey corporation. Paris also has a 57% interest in a
corporation, Signature Corporation, formed in 1992, to market office products
through the supermarket and drug chain channels. Two individuals own the
remainder of the interest in Signature Corporation.
In January 1996, Paris changed its corporate name to Paris Corporation from
Paris Business Forms, Inc.
The Company converts mill paper rolls to business forms at its New Jersey
manufacturing faculity and distributes office products, through a number of
market channels including forms dealers, paper merchants, stationers, office
product and computer superstores, consumer electronics retailers, buying groups,
supermarkets, and drugstore chains from their New Jersey and Texas facilities.
Products include stock and custom continuous forms; mill cut, value added, and
custom cut sheets; paper handling products for small offices and home offices.
Geographically the Company markets its products throughout the United States and
Canada through Company sales representatives, independent representatives,
brokers, dealers, and distributors.
Traditionally, the principal focus of the business was the manufacturing of
continuous forms designed to run on dot matrix and high speed impact printers.
The Company serves the stock continuous forms market and the custom forms
market, providing business forms to commercial businesses to specification.
Laser and inkjet printer technology continues to replace impact printers and,
accordingly, the Company's market for continuous forms is shrinking at a pace
estimated at 10% per year. The negative growth is more accelerated in the
retail market serving small business/home business customers since the printer
equipment investment is minimal and easy to replace. As a result, the Company
has been shifting its focus to the development, manufacture, and sale of value-
added and custom cut sheet products used on laser and inkjet printers. Perfed,
punched, lined, collated, colored, photo quality, and novelty cut sheet products
have been added to the product line. The continuous forms products segment as a
percentage of total sales has decreased from 50% to 43% to 37% in fiscal years
1998, 1999, and 2000, respectively. It is estimated that this segment will only
account for 28% of total sales in fiscal 2001.
The Burlington product line of value-added and cut sheet products targeted to
the small office and home office user has continued to expand with various
offerings to meet the everyday needs of inkjet and laser printer paper demand as
well as specialty products for photographic quality and other applications
requiring maximum color contrast and optimal ink absorption. Growth in this
product segment is expected to be 30% in FY 2001.
Signature Corporation ("Signature"), the 57% owned joint venture, distributes
office products to the food and drug store markets. Formed in late 1992,
Signature has continued to increase their stores served from 6,800 in 1996 to
12,000 in 2000. In August 1999, as a result of a stock tender by a Signature
minority shareholder, the Company's interest in Signature increased to 57%.
This change in ownership percentage in Signature was accounted for as a purchase
and Signature has been consolidated in the accompanying financial statements.
Signature Corporation does experience seasonal fluctuation in their sales
revenue. June, July and August represent approximately 35% of Signature's
annual revenue.
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COMPETITION
-----------
The business forms market is divided into two major segments. One segment
sells directly to end users, principally the 500 to 1,000 largest corporations.
The other segment, which Paris serves, distributes forms through resellers and
retailers. In the reseller market, there are three or four major competitors in
stock continuous forms who are larger than Paris and committed to stock computer
paper for the foreseeable future due to capital investment, albeit the negative
growth rate. The Company does not compete directly with the approximate dozen
direct sellers. There have been a number of acquisitions and mergers within the
industry and the consolidation mode is expected to continue going forward to
lower unit costs. Paris does not expect to pursue any acquisitions within this
business segment and will continue to shrink capacity commensurate with the
reduced demand for stock continuous forms.
The cut sheet market is growing at a rapid pace fueled by the installation of
laser and inkjet printers throughout the major U.S. corporations and home and
small businesses. Sales volume is expected to grow due to the Company's
penetration of the retail market, serving a number of major retail stores.
However, competition in this market is increasing rapidly. The major paper
mills have developed marketing subsidiaries to serve the retail market.
SUPPLIERS
---------
The Company purchases registered bond paper, (consisting of a wide variety of
weights, widths, colors, sizes and qualities), cut sheet, and carbonless paper
principally from the major United States paper mills. The Company believes that
it has good relationships with all of its suppliers.
The Company has partnered or formed strategic alliances to provide raw
material, market support, and/or name recognition for its value added cut sheet
product and non-paper products. Currently, the Company represents the largest
volume customer of Boise Cascade for certain specialty retail cut sheet
products. The Company believes the strong relationship between Paris and Boise
Cascade will provide the Company a solid footing for future cut sheet supply.
SEGMENTS AND MAJOR CUSTOMERS
----------------------------
The Company operates in three segments or lines of business, including stock
continuous forms and cut sheets; custom continuous forms and cut sheets;
consumer papers and office products. Financial information for each of the
Company's segments including net sales, operating income, total assets, capital
expenditures and sales to major customers, are included in the accompanying
financial statements.
For the year ended September 30, 2000, approximately 30% of the Company's
sales were to one customer in the consumer segment. For the year ended
September 30, 1999, approximately 20% of the Company's sales were to two
customers in the consumer segment. No customer accounted for more than 10% of
stock or custom shipments in FY00. There was one customer that accounted for
14% of the custom business in FY99.
EMPLOYEES
---------
As of September 30, 2000, the Company employed approximately 115 people in
manufacturing, sales and administrative functions in its corporate offices and
plants in New Jersey and Texas.
DISTRIBUTION AND MARKETING
--------------------------
The Company markets the custom and stock forms products through approximately
2,500 independent dealers in the United States and Canada, as well as through
retail superstores. The independent distributors rely on several manufacturers,
like the Company, to supply these end users. The distributors range in size
from a single individual to a distributorship with several offices and an
extensive sales force. The Company operates, or contracts for storage space, in
several strategically located warehouses along the east coast,
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southeast and southwest regions of the country. These locations are used as the
storage and shipping points for its stock forms. Currently, the Company's
primary method of generating sales contacts is through its own sales force,
sales representatives, extensive marketing programs, referral and reputation.
The sales force consists of seven salespersons covering New England, Mid-
Atlantic, Southeast, Midwest and Southwest regions of the United States. A
network of independent sales representatives covering the entire United States
has been assembled over the past few years to sell the new non-paper products
through major resellers and retailers.
MANUFACTURING
-------------
The Company's custom paper products are manufactured in the New Jersey plant
on seven presses and one collator. The presses provide the Company with the
ability to produce a wide variety of forms. Each piece of machinery requires a
skilled operator; support personnel are required on some equipment. The custom
forms operation runs primarily three shifts per day, with individual equipment
varying. The estimated capacity of the custom business is approximately $12.5
million in sales at current prices.
The Company's stock form business is manufactured in New Jersey on three
presses. The majority of the stock forms are produced to be sold from
inventory. Each press is also capable of producing customized computer paper or
stock forms upon order. The stock operation is two shifts per day, five days
per week, with overtime on an as-needed basis. The estimated annual capacity of
the stock business is approximately $25 million in sales at current prices
The Company's equipment is very well suited to produce nearly all of the forms
products required by a forms distributor or retailer. The Company continues to
monitor any new product requirements of its forms distributors and assess what
new equipment or equipment modifications are required to produce the products.
OPERATIONS
----------
The Company rents a 125,000 square foot plant and corporate office in
Burlington, New Jersey and leases a 20,000 square foot warehouse in Fort Worth,
Texas. There are no union affiliations among employees at the two locations.
During the year ended September 30, 2000, the Company operated 7 custom
presses, 3 stock presses, and 1 collator. The Company is evaluating the needs
for an additional equipment to increase capacity in the custom plant.
Utilization of production capacity approximated 60% in New Jersey .
Custom forms capacity continues to be converted from roll to sheeting
capability as demand shifts from continuous to cut sheet custom forms.
Currently, 65% of custom capacity is directed to cut sheets.
The Company has adequate domestic paper supply sources with paper mills and
brokers at the present time. However, the mills are reallocating capacity to
higher grade papers and are de-emphasizing forms bond used in continuous form
production.
Inventory levels were maintained at approximately two weeks supply for raw
material and 4-6 weeks supply for finished goods during the year.
OTHER MATTERS
-------------
The corporate structure of the Company's legal entities was reorganized in
fiscal 1995. Paris Business Forms, Inc. (PBFI), the public company, transferred
substantially all of the operating assets and liabilities to a newly formed
subsidiary corporation, Paris Business Products, Inc. (PBP). The Texas
operating corporation, Paris Business Forms, Inc. (PBFITX) and a newly formed
Florida corporation, Paris Business Products, Inc.
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(PBPFL), are subsidiaries of PBP. PBP, PBFITX and PBPFL are operating
corporations. PBF Corporation, a Delaware corporation, owns the Company
trademarks and remains a subsidiary of PBFI.
ITEM 2 - PROPERTIES
In May 1998, the Company entered into a contract to sell the office and
production facility in New Jersey for a total price of $4,500,000. In addition,
the Company entered into an agreement to lease the facility back for a period of
three years plus, at the Company's option, an additional two three-year renewal
periods. The Company has no obligation to renew the lease beyond its original
term. The total gain of $1,070,661 has been deferred and is being recognized
over the term of the original lease in the monthly amount of $29,741. The
amount of the gain deferred at September 30, 2000 was $218,891. The total gain
recognized to date was $851,770 at September 30, 2000. The lease calls for
monthly rental payments of $41,667 over the term of the lease.
The Fort Worth, Texas facility was sold in June 1994 and replaced by a 45,000
square foot leased facility. In October 1999 the lease was modified, and the
Company signed a three year lease reducing the facility to 20,000 square feet.
ITEM 3 - LEGAL PROCEEDINGS
The Company is involved in an alleged patent infringement lawsuit. The
plaintiff is seeking treble damages in excess of $100,000 against the Company
and other named defendants. Management cannot predict the outcome of the
lawsuit or estimate the amount of loss that may result, if any. Accordingly, no
provision for any contingent liability that may result from this matter has been
made in the consolidated financial statements. Management has referred the
claim to its insurance carrier, however, no determination has been made as of
December 29, 2000 as to whether this alleged claim is covered by the Company's
insurance policy. Legal counsel has not yet been retained, pending the
determination by the insurance company.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the year
ended September 30, 2000.
PART II
ITEM 5 - MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDERS
MATTERS
(A) The Company's common stock is traded on the over-the-counter market and is
listed on the National Association of Stock Dealers Daily Quotation Service
(NASDAQ) National Market System. The Symbol for the Company is PBFI. The
registrar and transfer agent is Chase Mellon Shareholder Services. The table
below shows the high and low closing sale prices as reported by the National
Daily Quotation Service.
RANGE OF SALE PRICES
--------------------
2000 FISCAL YEAR 1999 FISCAL YEAR
---------------- ----------------
HIGH LOW HIGH LOW
First Quarter 2.250 1.750 2.375 1.750
Second Quarter 2.625 1.938 2.219 1.750
Third Quarter 2.125 1.875 2.312 2.000
Fourth Quarter 2.375 1.781 2.437 2.125
The approximate number of shareholders of record as of December 15, 2000 was
200.
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The registrar and transfer agent is Chase Mellon Shareholder Services.
In January of 1999 the Company issued a $0.20 per share special dividend. In
March of 2000 the company issued a $0.10 per share special dividend. Currently
it is undetermined if the Company will declare any future dividends.
ITEM 6 - SELECTED FINANCIAL DATA
The following selected financial data are derived from the financial
statements of the Company. The data should be read in conjunction with
"Management's Discussion and Analysis of Financial Conditions and Results of
Operations" and the financial statements and related notes thereto included
herein in
Item 8.
FOR THE YEAR ENDED SEPTEMBER 30,
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
NET SALES $43,011 $35,433 $34,864 $51,674 $57,442
INCOME (LOSS)
FROM OPERATIONS 253 266 (763) (3,372) (5,495)
NET INCOME (LOSS) 663 961 (16) (2,469) (3,401)
BASIC EARNINGS (LOSS)
PER SHARE .20 .27 (0.004) (0.68) (.92)
DILUTED EARNINGS (LOSS)
PER SHARE .20 .27 (0.004) (0.68) (.92)
TOTAL ASSETS 19,278 21,419 20,570 23,477 28,741
WORKING CAPITAL 12,120 11,698 12,426 9,999 12,048
LONG TERM DEBT
(excluding current portion) 0 0 0 0 0
SHAREHOLDERS' EQUITY 14,419 14,587 14,356 $14,701 $17,184
CASH DIVIDENDS PER SHARE .10 .20 NONE NONE NONE
</TABLE>
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS. ($ in thousands, except statistical data)
The following discussion should be read in conjunction with the financial
statements, including the related notes.
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Liquidity and Capital Resources
Working capital at the end of fiscal years 2000, 1999 and 1998 was $12,120,
$11,698 and $12,426, respectively. Working capital increased $422 during the
fiscal year ended September 30, 2000.
Net cash provided by operating activities was $359. Accounts receivable
decreased $383 due to a reduction in "Days Sales Outstanding" during fiscal year
2000 and less sales volume in September 2000 versus September 1999. Inventories
decreased $305 as the Company focused on reducing inventory levels and improving
cash flow. Accounts payable and accrued expenses decreased $1,050 from $5,197
to $4,147 as Signature Corporation reduced its trade payables from $1,069 to
$438.
Net cash used in investing activities was $502. The Company made an
investment of $500 during the year in a limited partnership interest. Net
investments during fiscal year 2000 were $318. The Company expended $200 for
the purchase of equipment. The purchases related primarily to additions and
improvements in production equipment and the Company's Information Service and
telecommunications infrastructure.
Net cash used in financing activities was $909. The Company purchased
237,710 shares of its common stock for $501. See Note 16 in the Notes to the
Consolidated Financial Statements for additional information. In March 2000,
the Company paid a special dividend. The special dividend resulted in a
reduction of stockholders' equity of $328. In addition, Signature Corporation
paid a note payable in the amount of $84.
The Company believes that it has sufficient resources to satisfy ongoing cash
requirements for the next twelve months. The Company will meet short-term
liquidity needs through cash provided by operations and investing activities.
In addition, the Company secured a revolving line-of-credit with a bank for
$3,500 in October 2000. See Note 7 in the Notes to the Consolidated Financial
Statements for additional information.
2000 compared to 1999
Net sales for the fiscal year ended September 30, 2000 increased 21% or
$7,579. The increase was driven by the continued growth of the Consumer
segment, which had increased revenue of 37% or $4,453. The growth is a result
of increased distribution and the launching of new products. The commercial
segment had a decrease in revenue of 2% or $554. Continuous Forms decreased
$704 and Commercial cut sheets decreased $725. These declines were offset by an
increase in revenue of $875 in the other commercial product lines such as Custom
cut sheets, Laser 3 and DocuGard. Sales allowances and rebates increased $475
due to the increased revenue in the Consumer Segment. The effect of
consolidating the results of operation of Signature Corporation increased
revenue $4,155 for the year ended September 30, 2000.
Cost of sales for the fiscal year ended September 30, 2000 increased 23% or
$7,163. Cost of sales increased 2% over the increase in sales revenue due
primarily to product mix in the Consumer segment. Offsetting these factors was
lower freight costs as a percentage of sales. Freight expense remained flat on
increased sales of 21% due to the better management in controlling these costs.
Gross profit increased $416 or 10% in fiscal 2000 from $4,074 to $4,490 due
to the above factors.
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Selling expenses, marketing costs and administrative expenses increased $430
in fiscal 2000 primarily due to the effect of consolidating Signature
Corporation, which was $404. Other SG&A expenses increased $26 due to (1) a
decline in sales salaries of $70; (2) increased marketing costs of $48 related
to the growth in the Consumer Segment; (3) increased administrative costs of $48
related to increased salary and telecommunication expense offset by Y2K expenses
incurred in FY99.
Interest expense decreased $51 due to the pay off of the working capital line
in January of 1999.
Other income, net in fiscal 2000 decreased $240 due to (1) decreased gain on
sale of investments and limited partnerships of $363; (2) debt forgiveness
income of $129 and (3) other expenses, net of $6.
1999 compared to 1998
Net sales for the fiscal year ended September 30, 1999 increased 1.63% or
$569 due to (1) increased revenue from the retail segment (value added papers,
mill cut sheets, RCI and Poly products) of $4,400 (2) increased revenue in other
products such as custom cutsheets, Laser 3 and DocuGard of $985 (3) lower sales
allowances and rebates of $184 and (4) offset by decreased revenue in the stock
segment of $5,000.
Cost of sales for the fiscal year ended September 30, 1999 decreased 1.55%,
or $494 compared to the previous year. The lower cost in comparison to 1998 is
a result of the sales of higher margin product as evidenced by the changing
product mix above. In addition, despite the increased sales volume, freight
expense declined $89 or 6.5% due to better management in controlling these
costs. Offsetting these cost reductions was increased overhead expense due to
production inefficiencies and excess capacity.
Gross profit increased $1,062 or 35% in fiscal 1999 as compared to fiscal
1998 from $3,012 to $4,074 due to the above factors.
Selling expenses, marketing costs and administrative expenses increased $33
in 1999 from $3,775 to $3,808. Sales and marketing expenses were $162 higher
due principally to increased salary and benefit expenses. During the year, the
Company hired a National Sales Manager to lead the Commercial sales effort and a
Vice President of Sales and Marketing to lead the Retail segment. General and
administrative expenses decreased $130 due to a favorable settlement of a sales
and use tax audit. The Company received final notice from the taxing authority
during the third quarter with no additional sales or use tax due.
Interest expense decreased $214 due to the pay off of the working capital
line of credit in January 1999.
Other income, net in fiscal 1999 exceeded fiscal 1998 by $376 due to (1)
income recognized on the liquidation of the limited partnerships of $189 (2)
amortization on the gain on the sale of the building of $157 and (3) other net
income of $30.
1998 compared to 1997
Net sales for the fiscal year ended September 30, 1998 decreased 33% or
$16,810 due to (1) a 49% decline in stock forms ($17,172), attributable to the
loss of two major customers and lower overall demand for these products; (2) the
Company's decision to exit the computer hardware business resulted in
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a sales decline of $2,912 for this product line; (3) sales of miscellaneous
business products decreased $262 as a result of an increased focus on other
product lines; (4) offsetting these decreases was a 27% increase in custom
forms, Laser3/DocuGard and Burlington, the retail line; (5) sales discounts,
rebates and allowances were reduced $893, or 66% due to lower rebate expense due
to the loss of the two major stock forms customers and the decision to exit the
hardware business.
Cost of sales for the fiscal year ended September 30, 1998 decreased 35%
($17,564) compared to last year. The decrease in the cost of sales is relative
to the decrease in sales of 33%. The incremental decrease in cost of sales
relative to the sales decline is due to (1) favorable paper costs; (2) decreased
freight and distribution costs due to tighter management controls on both the
costs of shipping and the pass-through of freight cost to the customer; (3)
offsetting these cost reductions was increased overhead expense due to
production inefficiencies and excess capacity.
Gross profit increased $754 in fiscal 1998 as compared to fiscal 1997 from
$2,258 to $3,012 due to the above factors.
Selling expenses, marketing costs and administration expenses decreased $1,855
this year, from $5,630 to $3,775. Sales and marketing expenses were $487 lower
in fiscal 1998 due principally to the reduction of salary and benefit expenses
as a result of head count reductions, and general and administrative expenses
decreased $1,367 on a comparative basis due to (1) decreased salary and benefits
of $728; (2) a reduction in professional fees of $133; (3) lower depreciation of
$132; (4) decreased telephone expenses of $77; (5) reduced bad debt expense of
$128, and a reduction in other sundry expenses of $177.
Interest expense decreased $44, or 14%, due to a reduced level of bank debt
maintained over the last two years.
Other income, net in fiscal 1998 exceeded fiscal 1997 by $483 due to (1)
increased investment income and lower investment fees, net, of $250; (2) the
settlement of a third-party warehouse services contract in 1997 of $150; (3)
increased gain on fixed asset disposal of $108 due to the amortization of the
gain on the sale of the New Jersey production facility.
ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Refer to Management's Discussion and Analysis of Financial Condition and
Results of Operations.
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ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CONSOLIDATED FINANCIAL STATEMENTS: PAGE
CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 2000 AND 1999 11
CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS) FOR THE YEARS ENDED SEPTEMBER 30, 2000, 1999, AND 1998 12
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY FOR
THE YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998 13
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEARS
ENDED SEPTEMBER 30, 2000, 1999 AND 1998 14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 15 - 31
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS 31
INDEPENDENT AUDITORS' REPORT 32
FINANCIAL STATEMENT SCHEDULES NOT INCLUDED IN THIS FORM 10-K HAVE BEEN OMITTED
BECAUSE THEY ARE NOT APPLICABLE OR THE REQUIRED INFORMATION IS SHOWN IN THE
FINANCIAL STATEMENTS OR NOTES THERETO.
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PARIS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
September 30,
-----------------------------
2000 1999
----------- ---------------
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 2,828,114 $ 3,879,929
Investments:
Available for sale 3,685,739 1,569,927
Held to maturity - 1,996,960
Other 611,000 -
Accounts receivable, net of allowance for doubtful accounts of
$373,585 in 2000 and $453,600 in 1999 5,422,198 5,958,605
Inventories 3,861,964 4,166,890
Refundable income taxes - 190,252
Prepaid expenses 321,389 58,530
Deferred tax asset 163,581 396,400
----------- ---------------
Total current assets 16,893,985 18,217,493
Investments
Available for sales 250,628 -
Held to maturity - 500,000
Property and equipment, net 1,590,179 1,941,572
Deferred tax asset 129,308 196,270
Other assets 413,451 563,518
----------- ---------------
Total Assets $19,277,551 $21,418,853
=========== ===============
Liabilities and Shareholders' Equity
Current Liabilities:
Note payable $ 8,951 $ 92,787
Accounts payable and accrued expenses 4,146,610 5,196,803
Accrued payroll and related expenses 297,179 699,554
Income taxes payable 95,134 44,400
Deferred tax liability 7,286 -
Current portion of deferred revenue 218,891 485,886
----------- ---------------
Total current liabilities 4,774,051 6,519,430
Deferred revenue, net of current portion - 218,891
----------- ---------------
Total liabilities 4,774,051 6,738,321
----------- ---------------
Minority interest 84,460 93,989
----------- ---------------
Commitments and Contingencies
Shareholders' Equity:
Common stock, $.004 par value;
Authorized 10,000,000 shares; Issued 3,937,517 shares 15,751 15,751
Additional paid-in capital 8,588,243 8,588,243
Accumulated other comprehensive loss (75,800) (66,346)
Retained earnings 8,383,868 8,049,086
----------- ---------------
16,912,062 16,586,734
Less common stock held in treasury, at cost; 666,982
shares in 2000 and 433,272 shares in 1999 2,493,022 2,000,191
----------- ---------------
Total shareholders' equity 14,419,040 14,586,543
----------- ---------------
Total Liabilities and Shareholders' Equity $19,277,551 $21,418,853
=========== ===============
</TABLE>
See notes to consolidated financial statements
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PARIS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year ended September 30
-----------------------
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Net sales $43,011,083 $35,432,551 $34,863,609
----------- ----------- -----------
Costs and expenses:
Cost of products sold 38,520,851 31,358,303 31,851,996
Selling expenses 2,093,009 1,802,100 1,639,866
General and administrative expenses 2,144,497 2,005,711 2,135,234
Interest expense 6,754 57,995 272,473
Other income, net (1,010,246) (1,250,466) (874,617)
------------ ------------ ------------
Total costs and expenses 41,754,865 33,973,643 35,024,952
------------ ------------ ------------
Income (loss) before income tax (expense) benefit and
minority interest 1,256,218 1,458,908 (161,343)
Income tax (expense) benefit (602,880) (547,759) 145,562
------------ ------------ ------------
Income (loss) before minority interest 653,338 911,149 (15,781)
Minority interest 9,529 49,581 -
----------- ----------- ------------
Net income (loss) 662,867 960,730 (15,781)
----------- ----------- ------------
Other comprehensive income
Unrealized gain (loss) on securities arising during
the period, net of taxes of $7,600 in 2000, $39,400
in 1999 and $100,100 in 1998 19,785 58,525 (227,983)
Reclassification adjustment for (gains)
losses included in net income (loss) (29,239) 38,541 40,501
------------ ------------ ------------
Total other comprehensive income (loss) (9,454) 97,066 (187,482)
------------ ------------ ------------
Total comprehensive income (loss) $ 653,413 $ 1,057,796 $ (203,263)
============ ============ ============
Basic earnings (loss) per share $ 0.199 $ 0.272* $ $(0.004)
============ ============ ============
Diluted earnings (loss) per share $ 0.199 $ 0.272* $ (0.004)
============ ============ ============
</TABLE>
*Restated, Note 2
See notes to consolidated financial statements
12
<PAGE>
PARIS CORPORATION AND SUBSIDIARIES
CONSOLIDATION STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
Additional Accumulated Other
Common Stock Paid - In Comprehensive Retained Treasury Stock
Shares Amount Capital Income (Loss) Earnings Shares Amount Total
------ ------ ------- ------------- -------- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, October 1, 1997 3,937,517 $15,751 $8,588,243 $ 24,070 $7,812,962 (308,086) $(1,739,736) $14,701,290
Purchase of 86,786 treasury
shares - - - - - (86,786) (166,501) (166,501)
Issuance of 12,000 treasury
shares - - - - - 12,000 24,000 24,000
Net loss (15,781) (15,781)
Other comprehensive loss - - - (187,482) - - - (187,482)
------------------------------- --------- -------------------------------------------------
Balance, September 30, 1998 3,937,517 15,751 8,588,243 (163,412) 7,797,181 (382,872) (1,882,237) 14,355,526
Purchase of 61,800 treasury
shares - - - - - (61,800) (141,454) (141,454)
Issuance of 11,400 treasury
shares - - - - - 11,400 23,500 23,500
Dividends paid ($0.20 per
share) - - - - (708,825) - - (708,825)
Net income - - - - 960,730 960,730
Other comprehensive income - - - 97,066 - - - 97,066
------------------------------- --------- -------------------------------------------------
Balance, September 30, 1999 3,937,517 15,751 8,588,243 (66,346) 8,049,086 (433,272) (2,000,191) 14,586,543
Purchase of 237,710 treasury
shares - - - - - (237,710) (501,081) (501,081)
-------
Issuance of 4,000 treasury
shares - - - - - 4,000 8,250 8,250
Dividends paid ($0.10 per
share) - - - - (328,085) - - (328,085)
Net income - - - - 662,867 - - 662,867
Other comprehensive loss - - - (9,454) - - - (9,454)
------------------------------- --------- -------------------------------------------------
Balance, September 30, 2000 3,937,517 $15,751 $8,588,243 $ (75,800) $8,383,868 (666,982) $(2,493,022) $14,419,040
========= ======= ========== ========= ========== ======== =========== ===========
</TABLE>
See notes to consolidated financial statements
13
<PAGE>
PARIS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended September 30
--------------------------------------------------
2000 1999 1998
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities
Net income (loss) $ 662,867 $ 960,730 $ (15,781)
----------- ----------- -----------
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization 727,684 555,660 769,618
Gain on sale of property and equipment (372,887) (371,718) (122,975)
Gain on sale of investments (48,289) (366,683) (61,366)
Debt forgiveness income (128,999) - -
Equity in limited partnership interests (123,574) (168,500) (461,316)
Provision for doubtful accounts 153,065 115,100 120,000
Equity in (gain) loss of investment in joint venture - (75,183) 46,958
Deferred income tax (benefit) expense 307,067 266,650 (581,000)
Minority interest (9,528) (49,581) -
Noncash compensation 4,250 - -
(Increase) decrease in assets:
Accounts receivable 383,342 (1,289,244) 989,923
Inventories 304,926 103,424 1,136,036
Refundable income taxes 190,252 (190,252) 922,078
Prepaid expenses (262,859) (15,867) 41,606
Other assets (26,166) (45,506) 39,669
Increase (decrease) in liabilities:
Accounts payable and accrued expenses (1,050,195) 1,213,260 (1,057,674)
Accrued payroll and related expenses (402,375) 179,238 (72,669)
Income taxes payable 50,734 (193,475) 237,875
----------- ----------- -----------
Total adjustments (303,552) (332,677) 1,946,763
----------- ----------- -----------
Net cash provided by operating activities 359,315 628,053 1,930,982
----------- ----------- -----------
Cash flows from investing activities
Decrease (increase) in restricted cash - 2,140,338 (2,140,338)
Proceeds from sale of investments 968,783 3,964,583 588,635
Purchase of investments (1,286,853) (2,760,065) (1,274,464)
Proceeds from sale of property and equipment 16,000 - 4,310,688
Purchase of property and equipment (200,058) (911,904) (468,481)
Acquisition of majority interest in investee, net of cash acquired - 39,171 -
----------- ----------- -----------
Net cash provided by(used in) investing activities (502,128) 2,472,123 1,016,040
----------- ----------- -----------
Cash flows from financing activities
Repayment of note payable (83,836) (7,843) -
Sales of treasury stock 4,000 23,500 24,000
Purchase of treasury stock (501,081) (141,454) (166,501)
Repayments of note payable, bank - (2,459,052) (1,472,968)
Dividends paid (328,085) (708,825) -
----------- ----------- -----------
Net cash used in financing activities (909,002) (3,293,674) (1,615,469)
----------- ----------- -----------
Net increase (decrease) in cash and cash equivalents (1,051,815) (193,498) 1,331,553
Cash and cash equivalents, beginning of year 3,879,929 4,073,427 2,741,874
----------- ----------- -----------
Cash and cash equivalents, end of year $ 2,828,114 $ 3,879,929 $ 4,073,427
=========== =========== ===========
SUPPLEMENTAL Disclosures of Cash Flow Information
Interest paid $ 53,754 $ 66,711 $ 277,773
Income taxes paid (refunded) $ 45,030 $ 430,684 $ (740,465)
</TABLE>
See notes to consolidated financial statements
14
<PAGE>
PARIS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
NOTE 1 Paris Corporation and Subsidiaries (collectively, the "Company")
Nature of manufacture stock and custom business forms, provide value added
Operations services to cut sheet products, and distribute plastic and office
products and computer/printer peripheral products. The Company
manufactures stock and custom forms in Burlington, New Jersey.
The Company markets through retailers, resellers, and dealers
throughout the United States and Canada.
NOTE 2 Principles of Consolidation
---------------------------
Summary of
Significant The consolidated financial statements include the accounts of the
Accounting Company and its wholly-owned and majority owned subsidiaries. All
Policies material intercompany transactions and balances have been
eliminated.
Use of Estimates
----------------
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions
that affect certain reported amounts and disclosures. Actual
results could differ from those estimates.
Cash and Cash Equivalents
-------------------------
Cash and cash equivalents includes cash on deposit, money market
accounts and securities maturing in 90 days or less.
Financial Instruments
---------------------
The carrying amounts of cash and cash equivalents, accounts
receivable, prepaid expenses, accounts payable and accrued
expenses, and note payable approximate their fair values as of
September 30, 2000 and 1999.
Investments
-----------
Management determines the appropriate classification of
investment securities at the time they are acquired and evaluates
the appropriateness of such classifications at each balance sheet
date. The classification of those securities and the related
accounting policies are as follows:
. Available-for-Sale Securities
Available-for-sale securities consist of marketable equity and
debt securities not classified as trading securities. Available-
for-sale securities are stated at fair value based on quoted
market prices and unrealized holding gains and losses are
reported as a separate component of
15
<PAGE>
PARIS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
NOTE 2 Investments (continued)
-----------------------
Summary of
Significant . Available-for-Sale Securities (continued)
Accounting
Policies shareholders' equity, net of tax, except for permanent
(continued) impairments in value which are recognized in current earnings.
Realized gains and losses are included in income.
. Held-to-Maturity Securities
Held-to-maturity securities consist of marketable debt securities
that the Company has the intent and ability to hold to maturity
and are reported at amortized cost.
. Other
The Company accounts for investments in limited partnerships
under the equity method of accounting.
Inventories
-----------
Inventories are stated at the lower of cost or market. Cost is
determined by the first-in, first-out method (FIFO).
Property and Equipment
----------------------
Property and equipment are stated at cost. Expenditures for
renewals and betterments which increase the useful life or
capacity of property and equipment are also capitalized at cost.
Expenditures for repairs and maintenance are charged to expense
as incurred. Gain or loss on the retirement or disposal of
capital assets is included in income in the period of disposal.
Depreciation is computed using the straight-line method over the
estimated useful lives of the assets. Depreciation was $483,841,
$531,817 and $769,618 for the years ended September 30, 2000,
1999 and 1998, respectively.
Other Assets
------------
The Company provides display racks to its resellers for the
display of its goods in stores. These display racks are amortized
on the straight-line method over eighteen months commencing when
the display racks are shipped to the resellers. Amortization was
$243,843 and $23,843 for the years ended September 30, 2000 and
1999, respectively.
16
<PAGE>
PARIS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
NOTE 2 Per Share Data
Summary of --------------
Significant
Accounting The following table sets forth the computation of basic earnings
Policies (loss) per share for the years ended September 30, 2000, 1999 and
(continued) 1998:
<TABLE>
<CAPTION>
2000 1999 1998
------- ------ -------
(Restated)
----------
(Note 2)
--------
<S> <C> <C> <C>
Numerator
Net income (loss) available
to common shareholders $ 662,867 $ 960,730 ($ 15,781)
Denominator
Weighted-average shares
outstanding 3,323,811 3,526,087 3,554,654
Basic earnings (loss) per share $ 0.199 $ 0.272 ($ 0.004)
</TABLE>
The following table sets forth the computation of diluted
earnings (loss) per share for the years ended September 30, 2000,
1999 and 1998:
<TABLE>
<CAPTION>
2000 1999 1998
------- ------ -------
(Restated)
----------
(Note 2)
--------
<S> <C> <C> <C>
Numerator
Net income (loss) available
to common shareholders $ 662,867 $ 960,730 ($ 15,781)
Denominator
Adjusted weighted-average
shares outstanding 3,326,647 3,538,398 3,554,654
Diluted earnings (loss) per share $ 0.199 $ 0.272 ($ 0.004)
</TABLE>
The anti-dilutive effect of conversion of the Company's stock
options causes such conversion to be excluded from the
computation of diluted loss per share for the year ended
September 30, 1998.
Stock-Based Compensation
------------------------
As permitted by Statement of Financial Accounting Standards No.
123, "Accounting for Stock-Based Compensation," the Company has
elected to follow Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees," ("APB 25"). Under APB
25, no compensation expense is recognized at the time of option
grant because the exercise price of the Company's employee stock
option equals the fair market value of the underlying common
stock on the date of grant.
17
<PAGE>
PARIS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 Income Taxes
Summary of ------------
Significant
Accounting The Company accounts for income taxes under the liability method.
Policies Under this method, deferred tax assets and liabilities are
(continued) determined based on differences between financial reporting and
tax bases of assets and liabilities and are measured using the
enacted tax rates and laws that will be in effect when the
differences are expected to reverse.
Comprehensive Income (Loss)
---------------------------
Comprehensive income (loss) consists of net income (loss) and
unrealized gains and losses on certain investments in marketable
debt and equity securities and is presented in the consolidated
statement of operations and comprehensive income (loss). Other
comprehensive income (loss) is net of realized gains and losses
included in net income (loss). Accumulated other comprehensive
loss is net of related deferred income taxes and is presented as
a component of shareholders' equity.
Accounting Pronouncements
-------------------------
In May, 1999, the Financial Accounting Standards Board issued
Statement No. 137, "Accounting for Derivative Instruments and
Hedging Activities - Deferral of the Effective Date of FASB
Statement No. 133" ("SFAS No. 137"), which defines the effective
date of Statement No. 133, "Accounting for Derivative Instruments
and Hedging Activities" (SFAS No. 133"). SFAS No. 133 establishes
standards for derivative instruments and hedging activities to be
recognized as either assets or liabilities and to measure those
instruments at fair value. SFAS No. 133, as amended by SFAS No.
138 is effective for financial statements relating to fiscal
years beginning after June 15, 2000. The adoption of the amended
provisions of SFAS No. 133 will have no impact on the Company's
results of operations, financial position or cash flows.
Restatement and Reclassifications
---------------------------------
Subsequent to the issuance of the consolidated financial
statements for the year ended September 30, 1999, it was
discovered that the calculations of the weighted average shares
outstanding used in the determination of basic and diluted
earnings per share were incorrect. The 1999 financial statements
have been restated to correct this error.
18
<PAGE>
PARIS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
NOTE 2 Restatement and Reclassifications (continued)
---------------------------------
Summary of
Significant Previously As
Accounting Reported Corrected
Policies ----------- ----------
continued) Basic Earnings Per Share
Weighted average shares outstanding 3,911,165 3,526,087
Earnings per share $ 0.246 $ 0.272
Diluted Earnings Per Share
Adjusted weighted average shares
outstanding 4,086,465 3,538,398
Earnings per share $ 0.235 $ 0.272
Pro forma calculations of earnings per share for 1999 contained
in footnotes 3 and 10 have also been restated.
Errors in the presentation of the activity in the stock option
plan for the years ended September 30, 1999 and 1998 were also
discovered. The summary of activity contained in footnote 10 has
been restated to correct these errors.
Certain amounts in the 1999 consolidated financial statements
have been reclassified to conform to the presentation for 2000.
NOTE 3 Prior to August 31, 1999, Paris Corporation held a 44% interest
Investment in in Signature Corporation ("Signature") which was accounted for
Signature using the equity method of accounting. In September, 1999, as a
Corporation result of a stock tender by a Signature minority shareholder, the
Company's interest in Signature increased to 57%. This change in
ownership percentage in Signature was accounted for as a purchase
and Signature has been consolidated in the accompanying financial
statements. The results of operations of Signature have been
included in the accompanying 1999 consolidated statement of
operations for the month of September, 1999. Signature is a
wholesaler of plastic and other office products.
19
<PAGE>
PARIS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
NOTE 3 The following pro forma results of operations information
Investment in has been prepared to give effect to the purchase as if such
Signature transaction had occurred at the beginning of the period
Corporation presented. The information presented is not indicative of
(continued) results of future operations of the combined companies.
<TABLE>
<CAPTION>
Pro forma Results of Operations
(Unaudited)
Years Ended September 30
-----------------------------------------
1999 1998
----------------- -----------------
(Restated)
-----------------
(Note 2)
-----------------
<S> <C> <C>
Net sales $41,489,656 $40,254,723
Net income $ 924,482 $ 1,115
Basic earnings per share $ 0.262 $ 0.0003
Diluted earnings per share $ 0.261 $ 0.0003
Weighted average shares, basic 3,526,087 3,554,654
Adjusted weighted average shares, diluted 3,538,398 3,554,654
</TABLE>
NOTE 4 Investments as of September 30, 2000 and 1999 are summarized
Investments as follows:
<TABLE>
<CAPTION>
2000 1999
-------------------------------- --------------------------------------
Fair Value Cost Fair Value Cost
------------- ------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Available for sale
Stocks $1,410,402 $1,367,193 $1,030,534 $1,052,374
Mutual funds 598,166 778,389 539,393 621,219
U.S. treasuries
and bonds 167,655 165,073 - -
Corporate
bond and
notes 1,509,516 1,497,575 - -
------------- ------------- ---------------- ----------------
Total $3,685,739 $3,808,230 $1,569,927 $1,673,593
============= ============= ================ ================
Noncurrent
Corporate
notes
maturing
December 19,
2001 $ 250,628 $ 250,937 $ - $ -
============= ============= ================ =================
</TABLE>
20
<PAGE>
PARIS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NOTE 4 2000 1999
-------------------------------------- --------------------------------
Investments
(continued) Amortized Amortized
(continued) Cost Fair Value Cost Fair Value
---------------- ---------------- ------------- -------------
<S> <C> <C> <C> <C>
Held to maturity
Current
U.S.
treasuries
and bonds $ - $ - $1,486,917 $1,486,917
Corporate
bonds and
notes - - 510,043 510,043
---------------- ---------------- ------------- -------------
Total $ - $ - $1,996,960 $1,996,960
================ ================ ============= =============
Noncurrent
Corporate
bonds and
notes $ - $ - $ 500,000 $ 500,000
================ ================ ============= =============
</TABLE>
The fair value of the Companies' available for sale
investments is net of margin loans of $886,554 and
$170,942 as of September 30, 2000 and 1999, respectively.
<TABLE>
<CAPTION>
Gross unrealized holding gains and losses as of September 30, 2000 and 1999 are
as follows:
2000 1999
------------ ------------
<S> <C> <C>
Gross unrealized gains
Stocks $ 56,128 $ 18,516
Mutual funds 9,055 872
U.S. treasury and bonds 14,524 -
Gross unrealized losses
Stocks ( 2,049) ( 41,228)
Mutual funds ( 200,149) ( 81,826)
Corporate bonds and notes ( 309) -
------------ ------------
Total ( $122,800) ( $103,666)
============ ============
</TABLE>
Proceeds from the sale of securities classified as
available-for-sale for the years ended September 30,
2000, 1999 and 1998 were $968,783, $460,699 and $588,635,
respectively. For the purpose of determining gross
realized gains and losses, the cost of securities sold is
based upon specific identification:
<TABLE>
<CAPTION>
Year Ended September 30
--------------------------------------------------
2000 1999 1998
------------ ---------- ----------
<S> <C> <C> <C>
Gross realized gains $201,374 $ 4,614 $85,701
============ ========== ==========
Gross realized losses ( $153,085) ( $69,755) ( $24,335)
============ ========== ==========
</TABLE>
21
<PAGE>
PARIS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTE 4 Other Investments
Investments -----------------
(continued)
Other investments consist of interests in limited
partnerships. The limited partnerships invest in
publicly traded securities with readily determinable
market values. The Company accounts for these
investments utilizing the equity method of accounting.
Income and losses are recorded based on the Company's
beneficial interest. The limited partnership interests
were $2,903,559 in 1998. The limited partnership
interests were sold during 1999 for gross proceeds of
$3,503,884 which resulted in a gross realized gain of
$431,824. During 2000, the Company reinvested $500,000
in one of the Limited Partnerships which resulted in a
recognized gain of $111,000.
NOTE 5 Inventories as of September 30, 2000 and 1999 consist of
Inventories the following:
2000 1999
------------- -------------
Raw materials $1,473,441 $1,370,474
Work in progress 180,430 61,562
Finished goods 2,208,093 2,734,854
------------- -------------
$3,861,964 $4,166,890
============= =============
NOTE 6 Property and equipment as of September 30, 2000 and 1999
Property and consist of the following:
Equipment
<TABLE>
<CAPTION>
2000 1999
------------- -------------
<S> <C> <C>
Building improvements $ 18,445 $ 18,445
Machinery and equipment 9,071,014 9,065,261
Furniture and fixtures 377,095 377,095
Automobiles and trucks 154,585 155,055
------------- -------------
9,621,139 9,615,856
Less accumulated depreciation 8,030,960 7,674,284
------------- -------------
$1,590,179 $1,941,572
============= =============
</TABLE>
22
<PAGE>
PARIS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTE 7 The Company had a revolving line-of-credit with a bank
Note Payable, Bank and that expired in January,1999.
Subsequent
Event In October, 2000, Paris Business Products, Inc. agreed
to a revolving line-of-credit with a bank for
$3,500,000. Borrowings as of November 21, 2000 were
$2,900,000. The line bears interest at the prime rate
(9.5% as of November 21, 2000) and expires September 30,
2001. The line contains financial covenants including
minimum working capital requirements, debt to equity
limitations, cash flow requirements, and other covenants
and is collateralized by all of the assets of Paris
Business Products, Inc.
NOTE 8 In connection with the Signature stock tender (see Note
Note Payable 3), Signature converted$100,630 of accounts payable into
a promissory note. The note is payable monthly in
installments of $9,059 with interest at 14.5%. The
outstanding balance was $8,951 and $92,787 as of
September 30, 2000 and 1999, respectively. The note was
paid in October, 2000.
NOTE 9 The composition of the (expense) benefit for income
Income Taxes taxes for the years ended September 30, 2000, 1999 and
1998 is as follows:
<TABLE>
<CAPTION>
2000 1999 1998
----------- ---------- ----------
<S> <C> <C> <C>
Current
Federal ($181,067) ($206,709) ($237,875)
State ( 114,746) ( 74,400) -
----------- ---------- ----------
Total current ( 295,813) ( 281,109) ( 237,875)
----------- ---------- ----------
Deferred
Federal ( 411,480) ( 196,077) 234,068
State 104,413 ( 70,573) 149,369
----------- ---------- ---------
Total deferred ( 307,067) ( 266,650) 383,437
----------- ---------- ---------
($602,880) ($547,759) $145,562
=========== ========== =========
</TABLE>
The 2000 state deferred tax benefit considers the
anticipated realization of the carryforward of certain
state net operating losses. The Company has state net
operating loss carryforwards of approximately $11,600,000,
available to offset future state taxable income. The state
net operating loss carryforwards expire in the years 2000
through 2005.
23
<PAGE>
PARIS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTE 9 Reconciliations of income taxes with the amounts that
Income Taxes would result from applying the U.S. statutory rate are
(continued) as follows:
<TABLE>
<CAPTION>
2000 1999 1998
------------ ------------ -----------
<S> <C> <C> <C>
(Expense) benefit at
statutory rates ($427,114) ($481,740) $ 54,858
State income taxes, net of
federal income tax benefit ( 75,864) ( 74,400) 11,650
Prior year over (under)
accruals - ( 11,250) 79,054
Tax on deferred partnership
investment income ( 109,909) - -
Other, net 10,007 19,631 -
----------- ---------- ----------
Income tax (expense) benefit ($602,880) ($547,759) $145,562
=========== ========== ==========
</TABLE>
The components of the net deferred tax asset as of September 30,
2000 and 1999 are as follows:
<TABLE>
<CAPTION>
2000 1999
------------- -------------
<S> <C> <C>
Inventory reserves $ 146,200 $ 231,300
Allowance for doubtful accounts 201,800 143,000
Reserve accruals 40,500 42,400
Gain on sale of building 96,100 218,800
Unrealized loss on securities 39,300 39,400
Other - 222,300
Limited partnership income ( 46,600) ( 80,600)
Depreciation ( 325,500) ( 241,800)
State net operating loss 1,047,200 1,030,400
Federal net operating loss 689,588 630,250
------------- -------------
Total 1,888,588 2,235,450
Less valuation allowance 1,602,985 1,642,780
------------- -------------
Net deferred tax asset $ 285,603 $ 592,670
============= =============
</TABLE>
24
<PAGE>
PARIS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
NOTE 9 These amounts have been presented in the consolidated financial
Income Taxes statements as follows:
(continued)
2000 1999
-------- --------
Current deferred tax asset $163,581 $396,400
Noncurrent deferred tax asset 129,308 196,270
Current deferred tax liability (7,286) -
-------- --------
$285,603 $592,670
======== ========
The change in the valuation allowance is related in part to the
recognition of the tax benefits of certain state net operating
loss carryforwards. The valuation allowance increased $661,980
in the year ended September 30, 1999 and decreased $39,795 in
the year ended September 30, 2000.
NOTE 10 In November, 1995, the Board of Directors adopted the Company's
Stock Option 1995 Stock Option Plan to permit the issuance of incentive
Plan stock options under Section 422 of the Internal Revenue Code.
There are 500,000 shares of common stock authorized for non-
qualified and incentive stock options under the plan, which are
subject to adjustment in the event of stock splits, stock
dividends and other situations. Under the plan, no options may
be granted more than ten years after the effective date of the
plan. The exercise price of all incentive stock options granted
under the option plan may be no less than fair market value of
such shares on the date of grant. Stock option activity for the
years ended September 30, 2000, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>
2000 1999 1998
--------- ---------- ----------
(Restated) (Restated)
---------- ----------
(Note 2) (Note 2)
---------- ----------
<S> <C> <C> <C>
Outstanding, beginning of
year 364,300 350,300 347,300
Granted - 44,000 61,000
Expired/exercised (155,000) (30,000) (58,000)
--------- ---------- ----------
Outstanding, end of year 209,300 364,300 350,300
========= ========== ==========
Exercisable, end of year 209,300 320,300 309,300
========= ========== ==========
Available for grant, end of
year 232,000 232,000 276,000
========= ========== ==========
Option price range as of $1.875 to $1.875 to $1.875 to
September 30 $7.250 $7.975 $7.975
</TABLE>
25
<PAGE>
PARIS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
NOTE 10 Options outstanding as of September 30, 2000 have an average
Stock Option exercise price of $3.23 and a remaining contractual life of
Plan (continued) 3.83 years. Options outstanding as of September 30, 1999
have an average exercise price of $3.50 and a remaining
contractual life of 5.1 years. Options outstanding as of
September 30, 1998 have an average exercise price of $3.65
and a remaining contractual life of 4.8 years.
Statement of Financial Accounting Standards No. 123 ("SFAS
No. 123") requires pro forma information regarding net
income (loss) and earnings (loss) per share as if the
Company had accounted for its employee stock options granted
under the fair value method of SFAS No. 123. The fair value
of these equity awards was estimated at the date of grant
using the Black-Scholes option pricing methods. The 1999
weighted average assumptions used were: risk free interest
rate of 6.00%; expected volatility of 1.08%; expected option
life of five to ten years and an expected dividend rate of
0.0%.
The pro forma effect on net income (loss) and earnings
(loss) per share for the years ended September 30, 2000,
1999 and 1998 is as follows:
<TABLE>
<CAPTION>
2000 1999 1998
-------- ---------- ----------
(Restated)
----------
(Note 2)
----------
<S> <C> <C> <C> <C>
Net income (loss) As reported $662,867 $960,730 ($ 15,781)
Pro forma $662,867 $907,877 ($102,582)
Basic earnings (loss) As reported $ 0.199 $ 0.272 ($ 0.004)
per share Pro forma $ 0.199 $ 0.257 ($ 0.03)
Diluted earnings (loss) As reported $ 0.199 $ 0.272 ($ 0.004)
per share Pro forma $ 0.199 $ 0.257 ($ 0.03)
</TABLE>
NOTE 11 Leases
------
Commitments
and The Company has certain operating leases, primarily for its
Contingencies New Jersey and Texas operating facilities, expiring at
various dates.
Rental expense amounted to $561,756, $562,919 and $372,773
for the years ended September 30, 2000, 1999 and 1998,
respectively.
26
<PAGE>
PARIS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
NOTE 11 Leases (continued)
------------------
Commitments
and Scheduled minimum rental payments under noncancelable
Contingencies operating leases as of September 30, 2000 were as follows:
(continued)
Year Ending September 30
------------------------
2001 $372,500
2002 60,000
2003 55,000
----------
$487,500
==========
In May, 1998, the Company entered into a contract to sell
its office and production facility in New Jersey for a total
price of $4,500,000. In addition, the Company entered into
an agreement to lease the facility back for a period of
three years plus, at the Company's option, an additional two
three-year renewal periods. The Company has no obligation to
renew the lease beyond its original term. The total gain of
$1,070,661 has been deferred and is being recognized over
the term of the original lease in the monthly amount of
$29,741. The amount of the gain deferred was $218,891 and
$575,778 as of September 30, 2000 and 1999, respectively,
and is included on the consolidated balance sheet in
liabilities as deferred revenue. The total gain recognized
to date was $851,770 and $494,883 as of September 30, 2000
and 1999, respectively. The lease calls for monthly rental
payments of $41,667 over the term of the lease.
Contingencies
-------------
The Company has agreements with certain customers and
vendors which include potential rebates, commissions and
other liabilities upon the fulfillment of certain terms and
conditions. Management has estimated and recorded contingent
liabilities of approximately $403,000 and $237,000 as of
September 30, 2000 and 1999, respectively, related to these
agreements and other potential liabilities.
Purchase Commitment
-------------------
During 1999, the Company amended a previous sales agreement
with Boise Cascade Corporation. The amendment calls for the
Company to purchase a minimum of $11,000,000 of office
papers from Boise Cascade for resale to Best Buy by
September 30, 2001. Cumulative purchase levels are set forth
in the agreement. If the Company does not reach these
interim totals or the minimum cumulative total, the Company
will be subject to penalties. The Company has purchased
approximately $8,200,000 from Boise Cascade under this
agreement through September 30, 2000. Management anticipates
future purchases will at least meet the minimum amount
required to comply with the terms of the agreement.
27
<PAGE>
PARIS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
NOTE 11 Litigation
----------
Commitments
and The Company is involved in an alleged patent infringement
Contingencies lawsuit. The plaintiff is seeking treble damages in excess
(continued) of $100,000 against the Company and other named defendants.
Management cannot predict the outcome of the lawsuit or
estimate the amount of loss that may result, if any.
Accordingly, no provision for any contingent liability that
may result from this matter has been made in the
consolidated financial statements. Management has referred
the claim to its insurance carrier, however, no
determination has been made as of the date of these
financial statements as to whether this alleged claim is
covered by the Company's insurance policy. Legal counsel has
not yet been retained, pending the determination by the
insurance company.
NOTE 12 The Company has a defined contribution plan covering
Profit-Sharing substantially all employees. Employer contributions were
and Deferred $65,922, $66,213 and $73,591 for the years ended September
Compensation 30, 2000, 1999 and 1998, respectively.
Plans
NOTE 13 The Company operates in three basic segments or lines of
Segment business. These segments are (1) stock continuous forms
Information and cutsheets, (2) custom continuous forms and cutsheets,
and (3) retail papers and office products, including
computer/printer hardware and software products. The
following table sets forth certain financial information
with respect to these segments and reconciles such
information to the consolidated financial statements.
<TABLE>
<CAPTION>
Year Ended September 30
-----------------------------------------------------------
2000 1999 1998
--------------- --------------- ---------------
<S> <C> <C> <C>
Net sales of products and
services
Stock forms $13,079,349 $15,185,170 $19,108,304
Custom forms 9,931,876 6,359,148 6,208,368
Consumer products 19,999,858 13,888,233 9,546,937
------------ ------------ ------------
Total $43,011,083 $35,432,551 $34,863,609
============ ============ ============
Segment operating income
(loss)
Stock forms ( $ 340,116) ( $ 1,096,045) ( $ 1,673,109
Custom forms 547,142 214,422 189,875
Consumer products 415,134 1,275,077 620,575
Corporate ( 369,434) ( 127,017) 99,173
------------ ------------ ------------
Total $ 252,726 $ 266,437 ( $ 763,486)
============ ============ ============
</TABLE>
28
<PAGE>
PARIS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
<TABLE>
<CAPTION>
NOTE 13 Year Ended September 30
-------------------------------------------------------------
Segment
Information (continued) 2000 1999 1998
---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
(continued)
Corporate consolidated
income (loss) before
income taxes and
minority interest
Segment operating
income (loss) $ 252,726 $ 266,437 ($ 763,486)
Interest expense ( 6,754) ( 57,995) ( 272,473)
Other income, net 1,010,246 1,250,466 874,616
------------ ------------ ------------
Total $ 1,256,218 $ 1,458,908 ($ 161,343)
============ ============ ============
Assets
Stock forms $ 3,411,204 $ 6,817,640 $ 6,319,829
Custom forms 3,542,051 3,762,796 2,339,987
Corporate/other 12,324,296 10,838,417 11,909,990
------------ ------------ ------------
Total consolidated $19,277,551 $21,418,853 $20,569,806
============ ============ ============
Capital expenditures
Stock forms $ 5,091 $ 20,099 $ 334,549
Custom forms 62,979 716,477 113,159
Corporate/other 131,988 175,328 20,773
------------ ------------ ------------
Total consolidated $ 200,058 $ 911,904 $ 468,481
============ ============ ============
Depreciation and amortization
expense
Stock forms $ 183,891 $ 324,855 $ 372,453
Custom forms 239,036 146,575 154,808
Corporate/other 304,757 84,230 242,357
------------ ------------- ------------
Total consolidated $ 727,684 $ 555,660 $ 769,618
============ ============= ============
</TABLE>
Segment operating income (loss) is determined by deducting
from sales of products and services, cost of products sold,
and selling, general and administrative expenses directly
related or allocable to the segment. Not included in segment
operating income are certain income and expense items such
as interest income and expense, other income, minority
interest and income taxes.
The reporting segments follow the same accounting policies
used for the Company's consolidated financial statements and
described in the summary of significant accounting policies.
Management evaluates a segment's performance based on profit
or loss from operations before income taxes and minority
interest.
29
<PAGE>
PARIS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
NOTE 14 Other expense (income), net, for the years ended
Other Expense September 30, 2000, 1999 and 1998 consists of the
(Income), Net following:
<TABLE>
<CAPTION>
2000 1999 1998
------------- ------------- -------------
<S> <C> <C> <C>
Equity in limited partnership
interests ( $ 123,574) ( $ 168,500) ( $461,316)
Gain on sale of investments ( 48,289) ( 366,683) ( 61,366)
Gain on sale of property and
equipment ( 372,887) ( 371,718) ( 122,975)
Interest income, net ( 261,755) ( 238,266) ( 247,928)
Other, net ( 203,741) ( 105,299) 18,968
----------- ----------- ----------
Total ( $1,010,246) ( $1,250,466) ( $874,617)
=========== =========== ==========
</TABLE>
Interest income is net of margin interest expense of
approximately $47,000, $7,500 and $5,300 for the fiscal
years ended September 30, 2000, 1999 and 1998,
respectively.
NOTE 15 The Company's financial instruments that are exposed to
Concentrations concentrations of credit risk consist primarily of cash,
of Credit Risk cash equivalents, investments and trade accounts
receivable. The Company places their cash and cash
equivalents with commercial credit institutions. At
times, the balances may be in excess of the FDIC
insurance limit.
The Company maintains investment accounts with several
stock brokerage firms. The accounts contain cash and
securities. The Securities Investor Protection
Corporation insures balances up to $500,000 (with a limit
of $100,000 for cash).
For the year ended September 30, 2000, approximately 30%
of the Company's sales were to one customer in the
consumer segment. For the year ended September 30, 1999,
approximately 20% of the Company's sales were to two
customers in the retail segment, including sales of
approximately $4,500,000 to one customer. The Company
routinely assesses the financial strength of customers
and as a consequence believes that its trade accounts
receivable credit risk exposure is limited.
The Company transacted significant business with two
vendors who provided a combined total of 58% of product
purchases for each of the years ended September 30, 2000
and 1999.
30
<PAGE>
PARIS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
NOTE 16 In September, 1998, the Company began a buy-back program
Stock Buy-Back Program of its common stock at prevailing market prices. As of
September 30, 2000, the Company had purchased 119,700 of
its common shares under this program.
In December, 1999, the Company purchased 175,500 of its
common shares from one investor in a separate
transaction.
PARIS CORPORATION
-----------------
SCHEDULE II
-----------
VALUATION AND QUALIFYING ACCOUNTS
---------------------------------
<TABLE>
<CAPTION>
Balance at beginning Additions charged to Balance at
of period cost and expenses Deductions end of period
-------------------- -------------------- ---------- -------------
<S> <C> <C> <C> <C>
For the year ended
September 30, 2000:
Allowance for
doubtful accounts: $ 453,600 $153,065 $233,080 $373,585
Allowance for
contingency reserve: $ 0 $ 0 $ 12,500 $ 12,500
Allowance for
inventory obsolescence $ 560,552 $ 70,000 $290,552 $340,000
For the year ended
September 30, 1999:
Allowance for
doubtful accounts: $ 317,458 $157,184 $ 21,042 $453,600
Allowance for
inventory obsolescence $ 760,591 $ 0 $200,039 $560,552
For the year ended
September 30, 1998:
Allowance for
doubtful accounts: $ 627,039 $120,000 $429,539 $317,500
Allowance for
contingency reserve: $ 98,362 $ 0 $ 98,362 $ 0
Allowance for
inventory obsolescence: $1,314,919 $ 0 $554,328 $760,591
</TABLE>
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
As disclosed in form 8K filed in June 2000, incorporated herein by reference.
31
<PAGE>
Independent Auditor's Report
Board of Directors and Shareholders
Paris Corporation
Burlington, New Jersey
We have audited the accompanying consolidated balance sheet of PARIS
CORPORATION AND SUBSIDIARIES as of September 30, 2000 and the related
consolidated statements of operations and comprehensive income (loss), of
changes in shareholders' equity and of cash flows for the year then ended.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated 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 audit provides 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 PARIS
CORPORATION AND SUBSIDIARIES as of September 30, 2000 and the results of their
operations and their cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
/s/ GOLDENBERG ROSENTHAL, LLP
Jenkintown, Pennsylvania
November 21, 2000
32
<PAGE>
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Directors of the Company are elected for a term of one year. The current
Directors and Officers of the Company, together with their ages, positions,
backgrounds, and business experiences are set forth below:
NAME AGE POSITION WITH THE COMPANY
---- --- --------------------------
Dominic P. Toscani, Sr. 72 President, Chief Executive
(4) Officer, Treasurer and
Chairman of the Board of
Directors
Gerard M. Toscani 40 Senior Vice President
(3), (4) and Director
Palmer E. Retzlaff 69 Director
(2), (3)
Frank A. Mattei, M.D. 79 Director
(1)
Oscar Tete 76 Director
(1), (2)
John V. Petrycki 60 Director
(1), (3)
Gerald A. Sandusky 56 Director
(1), (2)
William L. Lomanno 33 Chief Financial Officer
(1) Member of Compensation and Stock Option Committee
(2) Member of Audit Committee
(3) Member of the Investment and Finance Committee
(4) Dominic P. Toscani, Sr. is the father of Gerard M. Toscani
Dominic P. Toscani, Sr. is the founder of the Company, has served as a
Director and has been responsible for its management since its inception.
Prior to the founding of the Company, Mr. Toscani was a practicing attorney.
Gerard M. Toscani became a Director of the Company in 1992. He was appointed
Senior Vice President during fiscal 1990 and was the Company's Vice President
of Sales and Marketing since January 1987. He previously served as Sales and
Marketing Manager since September 1982.
Palmer E. Retzlaff became a Director in November 1993. He has been President
of Southwest Grain Co., Inc. since 1973. Previously he was the General Manager
of the Philadelphia Eagles.
Frank A. Mattei was elected to the Board of Directors in March 1986. He has
been a practicing orthopedic surgeon and is associated with North Philadelphia
Health System, (formerly Girard Medical Center), and St. Agnes Medical Center
in Philadelphia.
33
<PAGE>
Oscar Tete was elected to the Board of Directors in March 1986. Mr. Tete
retired in 1990. He was an Executive Vice President of First Fidelity Bank in
Burlington, New Jersey since 1972.
John Petrycki was elected to the Board of Directors in August 1995. Mr.
Petrycki retired in 1995. He was President and CEO of PNC Bank in south
central Pennsylvania.
Gerald A. Sandusky was elected to the Board of Directors in February 2000. He
was previously defensive coodinator of Penn State University Football since
1968. He is the founder and Chairman of the Board of the Second Mile
Foundation.
William L. Lomanno became Chief Financial Officer in April 1998. He has been
with the Company for eight years and has previously served as the Controller
and Accounting Manager for the Company.
ITEM 11 - SUMMARY COMPENSATION
The following table contains information regarding the individual
compensation of the two most highly compensated officers of the Company in
fiscal years 2000, 1999 and 1998.
Summary Compensation Table
Annual Compensation
-----------------------------
Name and Fiscal
Principal Position Year Salary Bonus
--------------------------------------------------------------------------
Dominic P. Toscani, Sr. 2000 $269,557 $ 5,243
Chairman of the Board 1999 $268,367 $ 0
and President 1998 $262,415 $ 2,521
Gerard M. Toscani 2000 $195,707 $28,860
Senior Vice President 1999 $180,654 $ 0
1998 $164,008 $ 1,577
34
<PAGE>
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
(AS NOVEMBER 15, 2000)
Title of Name and Address of Amount and Nature of Percent of
Class Beneficial Owner Beneficial Ownership (1) Class (1)
------- ------------------- ------------------------ ----------
Common Dominic P. Toscani (2) 1,134,948 32.5%
Stock and Nancy C. Toscani
122 Kissel Road
Burlington, NJ 08016
Common Frank A. Mattei 1,064,831 30.5%
Stock 1016 Mercer Street
Cherry Hill, NJ 08034
Common The Caritas Foundation (3) 383,835 11.0%
Stock 700 Hobbs Road
Wayne, PA 19087
Common Gerard M. Toscani 150,527 4.3%
Stock
Common Palmer E. Retzlaff 11,000 *
Stock
Common Oscar Tete 9,012 *
Stock
Common John Petrycki 7,000 *
Stock
Common Gerald A. Sandusky 11,000 *
Stock
---------- ----------
All Directors (present and proposed) and
officers as a group (10 persons) (4) 2,404,508 68.9%
* Less than 1%
(1) Based on 3,270,535 shares outstanding and 209,300 options currently
exercisable on November 15, 2000.
(2) Includes 1,028,197 shares personally held; 47,006 shares held by Paris
Corporation Profit Sharing Plan of which Mr. Toscani is the Plan Trustee;
14,745 shares held by Toscani Investment Company, a family partnership; and
45,000 options exercisable as of November 15, 1999.
(3) The Caritas Foundation, a tax exempt organization formed under Section
501(C)(3) of the Internal Revenue Code of 1954, as amended, was organized in
1984 by Dominic P. Toscani, Sr. to promote the objectives of free enterprise
and to support individual freedom. At the present time Reverend Peter
Toscani, O.S.A., is sole trustee of the foundation.
(4) Includes options currently exercisable individually and all officers as a
group (182,000).
35
<PAGE>
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There are no other material relationships or transactions which qualify for
disclosure under this caption.
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
This consolidated financial statements and related schedules filed as part of
this Annual Report on Form 10-K are included in Part II, Item 8.
REPORTS ON FORM 8-K
As disclosed in form 8K filed in June 2000, incorporated herein by reference.
EXHIBITS:
The following exhibits (with the exception of Exhibit 3.4, 10.5(b), 10.7 and
22(a)) are incorporated by reference to the Company's registration statement on
Form S-18 (no.-3-3344-W) filed February 13, 1986 with the Securities and
Exchange Commission and effective March 25, 1986. Exhibit 3.4, 10.5(b) and 10.7
are incorporated by reference to the Company's fiscal 1989 Form 10-K filed with
the Securities and Exchange Commission on December 19, 1989. Exhibit 22(a) is
incorporated by reference to the Company's fiscal 1990 Form 10-K filed with the
Securities and Exchange Commission on December 27, 1991.
3.1 Articles of Incorporation of the Company.
3.2 Amendment to Articles of Incorporation, dated January 6, 1986.
3.3 Amendment to Articles of incorporation, dated January 7, 1986.
3.4 By-laws of Company, as amended.
4.2(a) Form of Warrant to Purchase Common Stock of Company.
10.5 Company's Profit Sharing Plan, dated October 1, 1979.
10.5(a) Amendment to Profit Sharing Plan, dated October 2, 1985.
10.5(b) Amendment to Profit Sharing Plan, dated October 1, 1986.
10.6 Company's Stock Option Plan, dated October 1, 1985.
10.7 Line of Credit (loan agreement) of $2,000,000 from the Fidelity
Bank.
10.9 Bucks County Industrial Development Authority Loan Agreement for
1,500,000 dated April 10, 1985.
10.9(a) Letter Amendment, dated March 4, 1986 from Special Counsel to
Fidelity Bank.
10.9(b) Letter Amendment, dated March 5, 1986 from Fidelity Bank to
Special Counsel.
10.10 New Jersey Economic Development Authority Note for 3,000,000 by
Company, dated September 10, 1985.
10.10(a) Letter Agreement, dated March 4,1986 from Special Counsel to
Fidelity Bank.
10.10(b) Letter Amendment dated March 5, 1986 from Fidelity Bank to
Special Counsel.
10.10(c) Letter dated, March 24, 1986 from Special Counsel to Fidelity
Bank with respect to the New Jersey Economic Development
Authority Loan.
21(a) List of Subsidiaries.
36
<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 behalf
by the undersigned, thereunto duly authorized.
PARIS CORPORATION
Date: December 28, 2000 By: /s/ Dominic P. Toscani, Sr.
--------------------- --------------------------------
Dominic P. Toscani, Sr.
(President, Chairman Board of
Directors)
Date: December 28, 2000 By: /s/ William L. Lomanno
--------------------- --------------------------------
William L. Lomanno
(Chief Financial 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
registrant and in the capacities and on the dates indicated.
SIGNATURES
<TABLE>
<S> <C>
/s/ Dominic P. Toscani, Sr. 12/28/00 /s/ Frank A. Mattei 12/28/00
------------------------------------------------ ----------------------------------------------------
Dominic P. Toscani, Sr. (Date) Frank A. Mattei (Date)
(President, Chairman Board of Directors) (Director)
/s/ William L. Lomanno 12/28/00 /s/ Palmer E. Retzlaff 12/28/00
------------------------------------------------ ----------------------------------------------------
William L. Lomanno (Date) Palmer E. Retzlaff (Date)
(Chief Financial Officer) (Director)
/s/ Gerard M. Toscani 12/28/00 /s/ Oscar Tete 12/28/00
------------------------------------------------ ----------------------------------------------------
Gerard M. Toscani (Date) Oscar Tete (Date)
(Director) (Director)
/s/ John V. Petrycki 12/28/00 /s/ Gerald A. Sandusky 12/28/00
------------------------------------------------ ----------------------------------------------------
John V. Petrycki (Date) Gerald A. Sandusky (Date)
(Director) (Director)
</TABLE>
37
