FORM 10-K/A
Amendment No. 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission file number 1-3315
PUBLICKER INDUSTRIES INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 23-0991870
(State of incorporation) (I.R.S. Employer
Identification No.)
1445 East Putnam Avenue, Old Greenwich, Connecticut 06870
(Address of principal executive offices)
Registrant's telephone number, including area code: (203)
637-4500
Securities Registered Pursuant to Section 12(b) of the Act:
Name of exchange on
Title of each class which registered
Common Stock ($.10 par value) New York Stock
Exchange
Rights to Purchase Class A Preferred Stock, First Series
New York Stock Exchange
Securities Registered Pursuant To Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No .
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
As of January 31, 1996, the aggregate market value of the voting
common stock held by non-affiliates of the registrant was
$40,572,719.
Number of shares of Common Stock outstanding as of January 31,
1996: 14,884,910
Documents Incorporated By Reference
None.<PAGE>
PART I
ITEM 1. BUSINESS
General
Publicker Industries Inc.
("Publicker") or the ("Company") was originally incorporated in
1913 in the Commonwealth of Pennsylvania and commenced operations
as a public company in 1946 when its shares were first listed on
the New York Stock Exchange. At that time, the Company was one
of the largest alcohol producers in the world and had over 5,000
employees. Publicker remained profitable until the early 1950s
when it began a remarkable decline that spanned four decades. By
early 1985, the Company had only 300 employees and was badly in
need of a capital infusion.
Capital Infusion - April 1985
In April 1985, a group of
investors represented by Harry I. Freund and Jay S. Goldsmith of
Balfour Investors Inc. (formerly known as Balfour Securities
Corporation), a merchant banking firm that was then engaged in a
general securities brokerage business, purchased 1,600,000 shares
of Common Stock of the Company for $4 million. This amount was
immediately applied to reduce the Company's working capital
deficit. At that time, Messrs. Freund and Goldsmith were appointed
to the Board of Directors of the Company as was David L. Herman,
who later became President of the Company on March 31, 1986.
Balfour also received options to purchase an additional 400,000
shares of the Company's common stock at a price of $2.50 per share
for five years, which period was subsequently extended by ten
years. To date, these options have not been exercised.
Rights Offering - August 1985
In an offering that commenced
in August 1985, the Company made a pro rata distribution to its
shareholders of rights to buy additional common stock. Under this
rights offering, the Company received net proceeds of approximately
$5,137,000. This amount was also used to increase the
Company's working capital and was primarily used to reduce
outstanding accounts payable and accrued liabilities. By the end
of 1985, the Company's working capital deficit had been reduced
to less than $1 million and shareholders equity had increased to
$12.9 million.
Issuance of Subordinated Notes - December 1986
In December 1986, the Company
issued $30 million principal amount of 13% Subordinated Notes
which, together with the proceeds from asset dispositions, left
the Company poised to commence its acquisition program. As of
December 31, 1995, a total of $22.5 million of these notes have
been repurchased or redeemed leaving a balance outstanding of $7.5
million.
Former Alcohol Manufacturing Facility - Philadelphia, Pennsylvania
When the Company departed from
its historical business of manufacturing and selling alcohol, it
ceased operations at its alcohol manufacturing plant and bulk
liquid storage facility in Philadelphia, Pennsylvania. On March
31, 1986, the Company sold the facility for $3 million. The
purchaser of the facility, a wrecking company, commenced demolition at
the site and was in the process of dismantling the
facility when it filed for bankruptcy in January 1987. On June
26, 1987, a fire occurred at the facility which gave rise to
suspicion that there had been releases of hazardous substances at
the facility. Since 1987, the United States Environmental
Protection Agency (the "EPA") has been conducting remedial actions
at the facility. In December 1990, the EPA commenced an action
in the United States District Court, Eastern District of Pennsylvania,
against the Company. In the complaint, the EPA alleged
that it has spent more than $22 million in conducting environmental
response activities at the site. The complaint seeks recovery
of amounts already spent at the facility including interest and
enforcement costs and a declaratory judgement that the Company is
liable for any further clean-up costs. In May 1993, the Commonwealth
of Pennsylvania Department of Environmental Protection
("PADEP") intervened in this litigation. PADEP's complaint seeks
reimbursement of past response costs alleged to be approximately
$1.3 million, future response costs incurred in connection with
cleaning-up the facility and a declaratory judgement as to the
Company's liability for those costs. Counsel for the Company and
litigation counsel for the United States entered into an Agreement
in Principle dated December 20, 1994, setting forth terms and
conditions to be included in a Consent Decree resolving the United
States' claims against the Company. Pursuant to this Agreement
in Principle, on April 6, 1995, the Company deposited with the
clerk of the Court the sum of $4.5 million to be held for use as
payment of a portion of the United States' claim against the
Company upon entry of a Consent Decree embodying the agreed terms
and conditions.
Counsel for the Company,
litigation counsel for the United States, and counsel for PADEP
agreed upon the final text of a proposed Consent Decree on October
6, 1995. The agreed Consent Decree has been executed by EPA, the
U.S. Department of Justice, PADEP and the Company and was lodged
with the Court on December 28, 1995.
Upon entry of the Consent
Decree, the Company will make another payment to the United States
of $4.5 million, plus interest. Further payments to the United
States totaling $4.35 million, plus interest, will be made over
a six year period following the entry of the Consent Decree. The
Company will pay the Commonwealth of Pennsylvania a total of $1.0
million. An initial payment of $350,000 will be made to the
Commonwealth upon entry of the Consent Decree. Further payments
to the Commonwealth totalling $650,000, plus interest, will be
made over a four year period following the entry of the Consent
Decree. These payments will be in settlement of all of the United
States' and the Commonwealth of Pennsylvania's claims against the
Company.
The Company recorded a
liability of $14,350,000 in the fourth quarter of 1993 to cover
the estimated costs of settling this litigation. Reference is
made to Item 3 - Legal Proceedings for additional information on
this matter.
Acquisition of Golding Industries, Inc. - 1987
During 1987, the Company turned
its attention to the need to acquire profitable businesses. In
September 1987, the Company completed the acquisition of Golding
Industries, Inc. ("Golding") for $25 million in cash.
Sale of Golding Industries, Inc. - 1989
During the year following the
Company's acquisition of Golding, the Company continued to seek
other acquisition candidates that satisfied the Company's
acquisition criteria. Throughout this period, the Company
observed that the prices being paid for corporate acquisitions
were rising dramatically. Accordingly, late in 1988, the Company
announced that it would seek a purchaser for Golding and that it
was engaged in preliminary discussions with several potential
purchasers. On March 28, 1989, the Company completed the sale of
Golding for the aggregate sale price of $43.5 million. The
Company decided to sell Golding to realize what it believed was
a very favorable price, to improve its balance sheet and to
increase funds available for general corporate purposes and
possible future acquisitions.
Acquisition of Ten Businesses - December 1990 and February 1991
Following the sale of Golding
in early 1989, the Company continued to seek attractive,
fairly-priced acquisitions for the Company. Throughout 1989,
acquisition price levels remained extremely high and the Company
found few viable acquisition candidates that it felt were fairly
priced. Toward the end of 1989 and during early 1990, a significant
decline in the price levels of merger and acquisition
transactions occurred. During 1990, the Company pursued several
acquisition efforts and, in October 1990, signed definitive
agreements to purchase a group of ten businesses from HM Holdings,
an indirect wholly-owned subsidiary of Hanson PLC. The acquisition of
nine of these businesses was completed in December 1990
and the tenth was completed in February 1991. The purchase price
of the group of ten businesses, including acquisition related
costs, was approximately $32 million.
KSI Systems, Inc. - 1992
Following the acquisition of
the assets that were used to form KSI Systems, Inc. ("KSI") in
1990, as part of the group of ten businesses acquired from Hanson
PLC, it was determined that due to intense competition, KSI could
not obtain contracts that it could perform profitably. As
existing contracts were completed during 1992, the operating
levels of KSI were reduced and, in September 1992, all operations
of KSI were discontinued.
Sale of American Cryogas Industries, Inc. - 1993
In April 1993, the Company sold
substantially all the assets of American Cryogas Industries, Inc.
("ACI") for $14,000,000 in cash, plus the assumption of certain
liabilities. This transaction resulted in a gain of $9,397,000.
The Company sold the assets of ACI to realize what it believed was
an attractive price, to provide funds for operating purposes and
to improve liquidity, as well as provide funds that may be used
in connection with the Company's environmental litigation. ACI
has been reflected in the consolidated financial statements as a
discontinued operation.
Disposition of Nevco Housewares, Inc. - 1993
Following the acquisition of
Nevco Housewares, Inc. ("Nevco") in 1990, Nevco failed to achieve
a consistent level of profitability. Accordingly, during the
third quarter of 1993, the operations of Nevco were concluded and
substantially all of the inventory and purchase commitments of
Nevco were sold. Nevco has been reflected in the consolidated
financial statements as a discontinued operation.
Sale of Douglas-Randall, Inc. - 1994
In March 1994, the Company sold
substantially all the assets of Douglas-Randall, Inc. ("DRI") and
subsequently collected its accounts receivable for aggregate
proceeds of approximately $831,000. DRI has been reflected in
the consolidated financial statements as a discontinued operation.
Sale of Chatas Glass Company, Inc. - 1994
In October 1994, the Company
sold Chatas Glass Company, Inc. ("CGC") and subsequently collected
its accounts receivable for aggregate proceeds of approximately
$290,000. CGC has been reflected in the consolidated financial
statements as a discontinued operation.
Sale of Assets Held for Disposition
From 1985 through 1994, the
Company realized approximately $28 million from the sale or other
dispositions of idle assets. During 1993 and 1994 gains totaling
approximately $1.6 million were recognized. The remaining idle
assets consist primarily of land in Gretna, Louisiana and
Muscatine, Iowa.
Sale of Associated Testing Laboratories, Inc. - 1995
On January 31, 1995, the
Company sold substantially all of the assets of Associated Testing
Laboratories, Inc. ("ATL") for $2,240,000 in cash, plus the
assumption of certain liabilities, including accounts payable,
accrued liabilities and obligations under leases, contracts and
agreements, to F.W. Bell, Inc. ATL has been reflected in the
consolidated financial statements as a discontinued operation.
Sale of Bright Star Industries, Incorporated - 1996
On February 16, 1996, the
Company sold substantially all of the assets of Bright Star
Industries, Incorporated ("BSI") for $5,500,000 in cash, plus the
assumption of certain liabilities, including accounts payable,
accrued liabilities and obligations under leases, contracts and
agreements, to an affiliate of BancBoston Capital and an investor
group. The proceeds on the sale will be used to repay certain
debt obligations and to improve the Company's liquidity. BSI has
been reflected in the consolidated financial statements as a
discontinued operation.
Description of Business
The Company operates in two
business segments: manufacturing and services. Publicker's
operating companies are as follows:
Fenwal Electronics, Inc. Manufacturing of electronic
components
Greenwald Industries, Inc. Manufacturing of coin handling
equipment
Masterview Window Company, Inc. Manufacturing of aluminum
windows and doors
Orr-Schelen-Mayeron & Associates, Inc. Engineering services
Detailed descriptions and
general developments of the business conducted by each segment
follows:
Manufacturing
The Company's manufacturing
segment consists of three subsidiary companies - Fenwal Electronics,
Inc., Greenwald Industries, Inc. and Masterview Window
Company, Inc. A description of each business follows:
Fenwal Electronics, Inc.
Fenwal designs and manufactures
precision, high reliability, negative temperature coefficient
thermistors and thermistor assemblies. Fenwal's products are sold
to a broad range of appliance, automotive, industrial, consumer,
oceanographic and military/aerospace companies. Fenwal enjoys a
reputation as one of the world's leading manufacturers of proven
superior quality thermistors. The principal raw materials used
by the Company are ceramic materials, wire and various electronic
components, all of which are available from many sources. Fenwal
operates from a modern, high-technology facility in Massachusetts
where its research and development efforts are an integral part
of its design and production process. The Fenwal manufacturing
facility has been surveyed and certified by various governmental,
military and aerospace agencies and large manufacturers and has
received numerous awards from its customers due to its quality and
production capabilities. Fenwal also operates a manufacturing
facility in St. Lucia, BWI for the assembly of electronic
components and a sales office in the United Kingdom. Fenwal
experiences a moderate level of competition for its product and
is a recognized leader in the ceramic thermistor industry.
Competition is primarily based on product performance, product
specification and service. Approximately 30% of Fenwal's sales
are to customers located outside of the United States.
Greenwald Industries, Inc.
Greenwald Industries, Inc.
designs and manufactures coin meter systems used primarily in the
commercial laundry appliance industry. In addition, Greenwald
products are also sold to the vending, amusement and car wash
industries. Greenwald sales are made to original equipment
manufacturers as well as distributors and route operators.
Established in 1954, Greenwald has developed an outstanding
reputation and is the dominant manufacturer in its market. The
primary raw material used by Greenwald includes rolled and strip
steel, metal stamped parts and certain electronic components, all
of which are readily available from multiple sources. Several of
Greenwald's products are imported. Certain of Greenwald's
products are manufactured overseas under the Company's patented
designs and proprietary tooling. The Company believes that an
interruption in the supply of imported products would have a
negative short-term impact. However, production of such products
can be sourced from other vendors. Greenwald successfully competes
against several other companies due to its reputation for selling
higher quality coin handling equipment at competitive prices.
Among Greenwald's customers are several large original equipment
manufacturers. Greenwald experiences a certain degree of
seasonality with sales declines typically occurring during the
summer months. In December 1995, Greenwald purchased a facility
in Chester, Connecticut and plans on relocating its office and
manufacturing operations, presently located in Brooklyn, New York,
in 1996.
Masterview Window Company, Inc.
Masterview Window Company,
located in Phoenix, Arizona, is engaged in the manufacture, sale,
distribution and installation of aluminum windows and doors for
the single and multi-family new housing marketplace. Masterview
is a licensed contractor in the states of Arizona, California and
Nevada. The principal raw materials used in the manufacture of
aluminum windows and doors include aluminum extrusions and glass.
These materials are readily available from numerous sources.
Masterview has benefited from continued strength in housing starts
in its market areas. The southwest has been among the fastest
growing regions in the United States. Masterview experiences
intense competition for its products but has achieved a strong
position in the Arizona market. Competition is based primarily
on price, quality and customer service. Masterview sells to
several of the largest home manufacturers in Arizona and Nevada
and two of its customers each constitute more than 10% of its an-
nual sales. Masterview experiences a certain degree of seasonality
and its sales tend to decline during the winter months.
Services
The Company's services segment
consists of one subsidiary company - Orr-Schelen-Mayeron &
Associates, Inc. A description is as follows:
Orr-Schelen-Mayeron & Associates, Inc.
Orr-Schelen-Mayeron & Associates, Inc. provides general engineering,
design and architectural services. OSM is headquartered in
Minneapolis, Minnesota and operates a branch office in Eau Claire,
Wisconsin. OSM's primary customer base is located in the midwestern
United States. OSM's capabilities include all facets of engineering of
general construction projects as well as environmental, transportation and
water resource management engineering services. OSM enjoys an
outstanding reputation in its primary marketplace and is one of
the largest firms of its type in the Minneapolis area. Com-
petition for the Company's services are characterized primarily
by reputation, quality of work and cost effectiveness. As of
December 31, 1995 and 1994, OSM had contract backlogs of approximately
$4,900,000 and $5,300,000, respectively. Substantially all
of OSM's backlog is expected to be completed in 1996.
Employees
As of December 31, 1995, the
Company had approximately 825 employees at continuing operations
engaged in manufacturing operations, engineering, marketing,
sales, service, and administrative activities. Approximately 12%
of the Company's employees are unionized. The Company has
experienced a low employee turnover rate in the past and considers
its employee relations to be good.
Segment Information
During 1995, the Company
operated in two business segments: manufacturing and services.
The segments and their engaged activities are as follows:
Manufacturing Engaged Activity
Fenwal Electronics, Inc. Electronic components
Greenwald Industries, Inc. Coin handling equipment
Masterview Window Company, Inc. Aluminum windows and doors
Services
Orr-Schelen-Mayeron & Associates, Inc. Engineering services
Information about the Company's operations by segment for the
years ended December 31, 1995, 1994 and 1993 is presented in the
following table. The Company's Fenwal subsidiary has a
manufacturing facility in St. Lucia, BWI, and a sales office in
the United Kingdom. The Company had no other foreign operations
during the three years ended December 31, 1995, and identifiable
foreign assets were not significant. For each of the three years
ended December 31, 1995, the Company had export sales of
approximately $7,100,000, $6,600,000 and $4,200,000, respectively.
Such sales were primarily to Canada, Europe and the Far East.
Financial Information Relating to Industry
Segments and Classes of Products
(in thousands of dollars)
1995 1994* 1993*
Net sales to unaffiliated customers:
Manufacturing $56,014 $52,578 $46,654
Services 10,276 11,884 9,972
$66,290 $64,462 $56,626
Income (loss) from operations:1
Manufacturing $6,701 $2,887 $2,791
Services (524) 798 710
Corporate and other (3,934) (3,560) (3,874)
$2,243 $125 $(373)
Identifiable Assets:
Manufacturing $26,594 $23,454 $22,874
Services 4,006 5,654 5,038
Corporate and other 14,590 16,192 24,999
$45,190 $45,300 $52,911
Depreciation and Amortization Expense:
Manufacturing $980 $792 $552
Services 281 241 193
Corporate and other 247 349 457
$1,508 $1,382 $1,202
Capital Expenditures:
Manufacturing $2,810 $1,268 $913
Services 162 297 174
Corporate and other 396 5 20
$3,368 $1,570 $1,107
(1) Before interest income, interest expense and items of a
nonoperating or nonrecurring nature.
* Restated for discontinued operations.
<PAGE>
ITEM 1A. EXECUTIVE OFFICERS OF THE REGISTRANT (See
Item 10 herein)
The following table sets forth information about the executive
officers of the Company as of March 1996. The business address
of each executive officer is the address of the Company, 1445 East
Putnam Avenue, Old Greenwich, Connecticut 06870, and each
executive officer is a United States citizen.
Name Age Office and Position
James J. Weis 47 President, ChiefExecutive Officer
and Director
Antonio L. DeLise 34 Vice President, Chief Financial
Officer and Secretary
There is no family relationship between any of the executive
officers of the Company. Each officer is elected to serve for a
term ending with the next annual meeting of shareholders.
Mr. Weis joined the Company in September 1984 as Assistant to
the President. Mr. Weis was elected Vice President in November
1984, Chief Financial Officer and Secretary in April 1986,
Executive Vice President-Finance in August 1989 and President,
Chief Executive Officer and Director on March 8, 1995.
Mr. DeLise, a Certified Public Accountant, joined the Company in
April 1995 as Vice President, Chief Financial Officer and
Secretary. Prior to joining the Company, Mr. DeLise was employed
as a Senior Manager with the firm of Arthur Andersen LLP and had
been with such firm from July 1983 through March 1995.
ITEM 2. PROPERTIES
Operating Properties
The Company owns and leases various properties that are suitable
and adequate for its present needs. All of the Company's active
facilities are generally being fully utilized.
Fenwal Electronics, Inc.
Fenwal leases approximately 103,000 square feet of manufacturing
and office space in Milford, Massachusetts under a lease expiring
in 2006, approximately 9,000 square feet of manufacturing space
in St. Lucia, BWI under a lease expiring in 1998 and approximately
2,000 square feet of office space in the United Kingdom under a
lease expiring in 2000.
Greenwald Industries, Inc.
In 1995, Greenwald acquired a building of approximately 119,000
square feet containing manufacturing and office space in Chester,
CT. This facility includes 28 acres of land. Greenwald is
currently renting on a month-to-month basis approximately 105,000
square feet of manufacturing and office space in Brooklyn, New
York. Greenwald also owns an 8,000 square foot manufacturing
facility and land adjoining the rented facility for which
management is actively seeking buyers.
Masterview Window Company, Inc.
Masterview owns a building of approximately 58,000 square feet
containing manufacturing and office space in Phoenix, Arizona.
This facility includes 11 acres of land.
Orr-Schelen-Mayeron & Associates, Inc.
OSM leases approximately 38,000 square feet of office space in
Minneapolis, Minnesota, under a lease expiring in 2002. OSM also
leases approximately 1,000 square feet of office space in Eau
Claire, Wisconsin, under a lease expiring in 2000.
Executive Offices
The Company's executive offices are located in approximately
3,000 square feet of space in Old Greenwich, Connecticut, and are
occupied under a lease expiring in February 1999. The Company
also maintains approximately 2,600 square feet of office space,
for general corporate purposes, in New York City under a lease
expiring in 2004.
Properties Held for Disposition
The Company owns property in Gretna, Louisiana and Muscatine,
Iowa for which management is actively seeking buyers.
ITEM 3. LEGAL PROCEEDINGS
Environmental Matters - Philadelphia, Pennsylvania
A tentative settlement of the following matter has been reached
with the United States and with the Commonwealth of Pennsylvania.
The Company is a defendant in United States, et al., v.
Publicker Industries Inc., et al., Civil Action No. 90-7984 (E.D.
Pa.). The United States commenced the action in December 1990
against the Company and two other defendants, Cuyahoga Wrecking
Corporation and Overland Corporation. The United States seeks to
recover under the Comprehensive, Environmental Response,
Compensation and Liability Act ("CERCLA") costs incurred by the
United States Environmental Protection Agency ("EPA") and other
federal agencies in responding to releases of hazardous substances
at a site located in Philadelphia, Pennsylvania. The Company
owned and operated the site as a manufacturing and storage
facility until 1986, when the Company sold the facility to
Overland Corporation.
In May 1993, in contemplation of a settlement, the Commonwealth
of Pennsylvania was granted leave by the Court to join in the
litigation as a plaintiff. The Commonwealth of Pennsylvania seeks
to recover money allegedly expended by its Department of
Environmental Protection ("PADEP") in connection with hazardous
substances at the site. Since 1992, at the parties request, the
case has remained on the Court's inactive docket.
During the fourth quarter of 1993, the Company recorded a
liability of $14,350,000 to cover the estimated costs of settling
this litigation.
Counsel for the Company and litigation counsel for the United
States entered into an Agreement in Principle dated December 20,
1994, setting forth terms and conditions to be included in a
Consent Decree resolving the United States' claims against the
Company and the Company's counterclaim. Pursuant to this
Agreement in Principle, on April 6, 1995, the Company deposited
with the clerk of the Court the sum of $4.5 million to be held for
use as payment of a portion of the United States' claim against
the Company upon entry of a Consent Decree embodying the agreed
terms and conditions.
Counsel for the Company, litigation counsel for the United
States, and counsel for PADEP agreed upon the final text of a
proposed Consent Decree on October 6, 1995. The agreed Consent
Decree has been executed by EPA, the U.S. Department of Justice,
PADEP and the Company and was lodged with the Court on December
28, 1995. The Company anticipates that the United States will
move for entry of the Consent Decree within the next several
months. The Company believes that the agreed Consent Decree will
be subsequently entered by the Court, although there can be no
assurance of this.
Upon entry of the Consent Decree, the Company will make another
payment to the United States of $4.5 million, plus interest.
Further payments to the United States totaling $4.35 million, plus
interest, will be made over a six year period following the entry
of the Consent Decree. The Company will pay the Commonwealth of
Pennsylvania a total of $1.0 million. An initial payment of
$350,000 will be made to the Commonwealth upon entry of the
Consent Decree. Further payments to the Commonwealth totalling
$650,000, plus interest, will be made over a four year period
following the entry of the Consent Decree. These payments will
be in settlement of all of the United States' and the Commonwealth
of Pennsylvania's claims against the Company and the Company's
counterclaims against the United States relating to the
Philadelphia site, subject only to certain "reopener" provisions
in the event future discovery of certain defined types of
presently unknown conditions or information pertaining to the
site.
The Company may have contribution rights against other parties
who sent hazardous substances to the site or arranged for storage
of hazardous substances at the site for some portion of any
payment the Company may be required, or may agree, to make to the
United States or to the Commonwealth of Pennsylvania in this
matter. However, the Company has not yet determined whether, or
under what conditions, it might initiate litigation against such
other parties.
The Company has notified its current insurers and identifiable
former insurers of this action, but no insurer has admitted
liability to pay either the Company's costs of defending this
action or any liability the Company may suffer in this action.
The Company cannot determine at this time whether any portion of
such costs or liability may be recovered through insurance.
Springs Industries Inc. Litigation
This Matter has been Settled
In May 1990, Springs Industries, Inc., a South Carolina
corporation ("Springs"), commenced an action against Golding
Industries, Inc. (Raytex Division), a former subsidiary of the
Company ("Golding"), in the Supreme Court of the State of New
York, County of New York. The complaint alleged that Golding
printed and finished fabric supplied by Springs, and that the
finished fabric did not meet the color fastness and dimensional
stability specifications required by Springs. The complaint
sought unspecified damages exceeding $2 million on each of five
causes of action and punitive damages of $5 million. During
discovery, Springs increased its damage claim to an amount between
$7.9 million and $10.9 million for alleged losses and lost
profits. In August 1994, the Company commenced an action in the
Supreme Court of the State of New York, County of New York against
Home Insurance Company and Home Indemnity Company seeking a
declaration that the claims asserted by Springs against Golding
are covered by the comprehensive general liability policy and the
umbrella policy issued by the Home companies. These actions were
settled during the fourth quarter of 1995. The net cost of the
settlements with Springs and the Home companies was not material.
General Litigation
In addition to the foregoing, various other legal proceedings
are now pending against the Company. The Company considers all
such proceedings to be ordinary litigation incident to the
character of its businesses. Certain claims are covered by
liability insurance. The Company believes that the resolution of
those claims to the extent not covered by insurance will not,
individually or in the aggregate, have a material adverse effect
on the financial position or results of operations of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
None.
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND
RELATED SECURITY HOLDER MATTERS
(a) The New York Stock Exchange is the principal market on
which the Company's common stock is traded (trading
symbol: PUL).
The high and low sales prices of the Company's common
stock on the New York Stock Exchange during 1995 and
1994 as reported on the Consolidated Transaction
Reporting System are shown below:
1995 1994
High Low High Low
First Quarter $ 2 3/8 $ 1 7/8 $ 1 1/2 $ 1 1/8
Second Quarter 2 1/8 1 3/4 1 5/8 1 3/8
Third Quarter 2 1 5/8 2 1/8 1 5/8
Fourth Quarter 2 3/8 1 1/2 2 3/8 1 3/4
(b) There were approximately 3,385 registered holders of record of common stock
of the Company as of January 31, 1996.
(c) The Company did not pay dividends on its common stock during the prior five
fiscal years and does not anticipate paying dividends in the forseeable
future.
The Indenture,dated as of December 15, 1986, under which the Company's
13% Subordinated Notes due December 15, 1996 were issued, contains
certain restrictions with respect to the payment of dividends by
the Company. Generally, while the Notes are outstanding, the
Company may not declare or pay any dividend or make any payments
or distributions on its capital stock or to its stockholders
(other than dividends or distributions payable in its capital
stock) if at the time of such action or as a result thereof: (A)
the Company is in default on the Notes or (B) the cumulative
amount of such dividends and distributions after December 31, 1986
exceeds the sum of (i) 50% of the Company's cumulative
consolidated net income (as defined in the Indenture) after
December 31, 1986 (or, in the event such amount is a deficit,
minus 100% of such deficit) and (ii) the aggregate gross proceeds
received after December 31, 1986 by the Company from the sale of
capital stock (other than capital stock subject to mandatory
redemption before December 15, 1996). Because the most
restrictive of these tests, the cumulative consolidated net income
test, relates to periods after December 31, 1986, the Company is
restricted from declaring or paying any cash dividends. The final
sinking fund payment under the Notes is due December 1996.
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
The selected financial data of the Company
presented below for the five year period ended December 31, 1995,
have been derived from the consolidated financial statements of
the Company, which have been audited by Arthur Andersen LLP. The
information set forth below should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and the Company's Consolidated Financial
Statements and the Notes thereto included elsewhere in this
report.
Year Ended December 31,
1995 1994* 1993* 1992* 1991*
(In thousands, except per share amounts)
Income Statement Data:
Net sales $66,290 $64,462 $56,626 $50,712 $48,282
Income (loss) from operations1 2,243 125 (373) (1,713) (719)
Income (loss) from continuing
operations (834)2 (3,264)3 (18,830)4 (6,559)5 (5,918)6
Income (loss) from discontinued
operations 543 975 1,076 2,227 2,975
Gain on sale of discontinued
operations, net - - 8,307 - -
Net income (loss) $(291) $(2,289) $(9,447) $(4,332) $(2,943)
Per common share:
Income (loss) from continuing
operations $ (.06) $(.22) $(1.30) $(.45) $(.41)
Income (loss) from discontinued
operations .04 .07 .65 .15 .21
Net income (loss) per
common share $ (.02) $(.15) $(.65) $(.30) $(.20)
December 31,
1995 1994* 1993* 1992* 1991*
(In thousands)
Balance Sheet Data:7
Working capital $(5,788) $6,916 $20,761 $23,510 $ 31,016
Total assets 45,190 45,300 52,911 49,395 54,241
Total debt8 14,693 17,437 22,082 25,557 26,097
Non-current liabilities 11,473 16,538 21,593 6,552 6,710
Shareholders' equity (2,594) (2,616) (340) 9,082 13,414
(1) Represents income (loss) before interest income, interest
expense and items of a nonoperating or nonrecurring nature.
(2) Includes cost of pensions - nonoperating of $744,000, legal
settlements and costs of $365,000 and a gain from repurchase of
notes of $75,000.
(3) Includes cost of pensions - nonoperating of $768,000, legal
settlements and costs of $507,000 and a gain from repurchase of
notes of $640,000.
(4) Includes cost of pensions - nonoperating of $776,000, legal
settlements and costs of $14,791,000 and a gain from repurchase
of notes of $370,000.
(5) Includes cost of pensions - nonoperating of $930,000, legal
settlements and costs of $790,000 and a gain from repurchase of
notes of $352,000
(6) Includes cost of pensions - nonoperating of $941,000 and legal
settlements and costs of $1,050,000.
(7) No dividends on common shares have been declared or paid during
the last five years.
(8) Includes current maturities of long term debt and revolving
credit line borrowing.
* Restated for discontinued operations.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Year Ended December 31, 1995 Compared to Year Ended December 31,
1994
Publicker's consolidated sales of $66,290,000 for the year ended
December 31, 1995 increased by approximately 3% from $64,462,000
for 1994. The increase in sales was due to a 4% increase in
selling prices offset by a slight decrease in volume. The
Company's income from operations for 1995 totaled $2,243,000
compared to $125,000 for 1994. The Company reported a net loss
of $291,000 ($.02 per share) for 1995 compared to a net loss of
$2,289,000 ($.15 per share) for 1994. The 1995 results included
costs of pensions-nonoperating of $744,000, legal settlements and
costs of $365,000, a gain from the repurchase of notes of $75,000
and income from discontinued operations of $543,000. The 1994
results included cost of pensions-nonoperating of $768,000, legal
settlements and costs of $507,000, a gain from the repurchase of
notes of $640,000 and income from discontinued operations of
$975,000.
For the year ended December 31, 1995, cost of sales and services
of $48,509,000 decreased by approximately 3% from $49,892,000 in
1994. The decrease in cost of sales and services was due to
productivity increases in the Company's manufacturing segment.
Selling expenses of $4,219,000 in 1995 were comparable to
$4,244,000 in 1994. General and administrative expenses for the
year ended December 31, 1995, increased by 11% to $11,319,000 from
$10,201,000 for 1994. The increase relates to increased salaries
and rental expense.
Interest income decreased to $138,000 for 1995 compared to
$309,000 for 1994 due to lower amounts of investible cash.
Interest expense decreased by approximately 29% to $2,181,000
during 1995 compared to $3,063,000 for 1994 due to repayments of
the Company's subordinated notes in 1994.
On February 16, 1996, the Company sold substantially all of the
assets of Bright Star Industries, Incorporated for $5,500,000 in
cash, plus the assumption of certain liabilities. In January
1995, the Company sold substantially all of the assets of
Associated Testing Laboratories, Inc. for $2,240,000 in cash, plus
the assumption of certain liabilities. The foregoing companies
have been reflected in the consolidated financial statements as
discontinued operations.
Sales for the Company's manufacturing segment (which includes the
operations of three subsidiary companies, Fenwal Electronics,
Inc., Greenwald Industries, Inc. and Masterview Window Company,
Inc.) for 1995 increased by approximately 7% to $56,014,000 for
1995 compared to sales of $52,578,000 for 1994. Income from
operations for this segment increased by approximately 132% to
$6,701,000 compared to $2,887,000 for 1994. The income from
operations improvement is primarily attributed to increased labor
efficiencies.
Sales for the Company's services segment (which consists of one
subsidiary company: Orr-Schelen-Mayeron & Associates, Inc.)
decreased by approximately 14% to $10,276,000 for 1995 compared
to $11,884,000 for 1994. The loss from operations for this
segment was $524,000 in 1995 compared to income from operations
of $798,000 for 1994. The significant decline in sales and income
from operations was due to certain operating inefficiencies and
lower contract margins.
Year Ended December 31, 1994 Compared to Year Ended December 31,
1993
Operating Results
The following information has been restated for discontinued
operations - see Note 2 to the consolidated financial statements.
Publicker's consolidated sales of $64,462,000 for the year ended
December 31, 1994 increased by approximately 14% from $56,626,000
for 1993. The increase in sales was due to a 2% increase in
selling prices coupled with an 12% increase in volume. The
Company's income from operations for 1994 totaled $125,000
compared to a loss from operations of $373,000 for 1993. The
Company reported a net loss of $2,289,000 ($.15 per share) for
1994 compared to a net loss of $9,447,000 ($.65 per share) for
1993. The 1994 results included cost of pensions - nonoperating
of $768,000, legal settlements and costs of $507,000, a gain from
the repurchase of subordinated notes of $640,000 and income from
discontinued operations of $975,000. The 1993 results included
cost of pensions - nonoperating of $776,000, legal settlements and
costs of $14,791,000, a gain from the repurchase of subordinated
notes of $370,000 and income from discontinued operations of
$9,383,000. The 1993 legal settlements and costs included a
charge of $14,350,000 to cover the estimated costs of settling the
Company's environmental litigation. The 1993 income from
discontinued operations included a gain of $9,397,000 from the
sale of American Cryogas Industries, Inc. ("ACI") and a gain of
$710,000 from the 1988 disposition of the Company's U.K. Beverage
Division, offset in part by a provision for disposition of
$1,800,000 to reduce the net assets of discontinued operations to
their estimated net realizable values and to accrue for
anticipated phase-out period losses.
For the year ended December 31, 1994, cost of sales and services
of $49,892,000 increased by approximately 14% from $43,764,000 for
1993. The increase in cost of sales and services was consistent
with the increased level of the Company's consolidated sales, but
was adversely impacted by reduced operating efficiencies and
increased raw material costs at certain of the Company's
subsidiaries.
Selling expenses increased by approximately 18% to $4,244,000
during 1994 compared to $3,582,000 for 1993. Selling expenses
increased in the areas of commissions, salaries and other selling
related expenses, primarily due to increased sales levels.
General and administrative expenses for the year ended December
31, 1994, increased by approximately 6% to $10,201,000 from
$9,653,000 for 1993. The increase in general and administrative
expenses primarily relates to increased salaries, recruiting and
severance expenses.
Interest income increased to $309,000 for 1994 compared to
$287,000 for 1993 due to somewhat higher interest rates offset in
part by slightly lower average invested amounts. Interest expense
decreased to $3,063,000 during 1994 compared to $3,547,000 for
1993 due to the repurchase or redemption of $7,414,000 of
subordinated notes in 1994 and the repurchase of $3,700,000 of
subordinated notes in 1993.
In March 1994, the Company sold substantially all the assets of
Douglas-Randall, Inc. and subsequently collected its accounts
receivable for aggregate proceeds of approximately $831,000. In
October 1994, the Company sold Chatas Glass Company, Inc. and
subsequently collected its accounts receivable for an aggregate
proceeds of approximately $290,000. The foregoing companies have
been reflected in the consolidated financial statements as
discontinued operations.
During 1994, the Company received approximately $889,000, which
represented the final amounts that will be received in connection
with the 1988 disposition of the Company's U.K. Beverage Division.
The amount received was recognized as a gain from discontinued
operations in 1994.
Sales for the Company's manufacturing segment (which includes the
operations of three subsidiary companies: Fenwal Electronics,
Inc., Greenwald Industries, Inc. and Masterview Window Company,
Inc.) for 1994 increased by approximately 13% to $52,578,000
compared to sales of $46,654,000 for 1993. Income from operations
for this segment increased by approximately 3% to $2,887,000 for
1994 compared to $2,791,000 for 1993. The improvement in income
from operations was lower than the sales improvement primarily due
to reduced operating efficiencies and higher raw material costs
at several of the Company's manufacturing businesses. The Company
has experienced a lag in passing certain of its increased costs
on to customers through higher prices.
Sales for the Company's services segment (which consists of one
subsidiary company: Orr-Schelen-Mayeron & Associates, Inc.)
increased by 19% to $11,884,000 for 1994 compared to $9,972,000
for 1993. Income from operations for this segment increased by
approximately 12% to $798,000 for 1994 compared to $710,000 for
1993. The increase in income from operations for this segment was
primarily due to higher sales levels, offset in part by reduced
efficiency and the effects of severe weather during the first
quarter of 1994.
Liquidity
During the year ended December 31, 1995, cash, including short-term
investments, decreased by $5,400,000. Operating activities
consumed cash of $1,851,000, while investing activities consumed
cash of $1,128,000 and financing activities consumed cash of
$2,421,000. Operating activities principally consisted of an
increase in operating assets and liabilities of $3,211,000 offset
by depreciation and amortization of $1,508,000. The increase in
operating assets was attributed to the $4,500,000 payment made to
the EPA escrow account. Investing activities consisted of
proceeds of $2,240,000 from the sale of Associated Testing
Laboratories, Inc., offset by capital expenditures of $3,368,000.
Financing activities primarily consisted of funds disbursed in
connection with the repurchase of subordinated notes totaling
$7,425,000, offset in part by net proceeds from revolving credit
and term loan financing of $4,691,000 and proceeds from the
issuance of common shares upon exercise of stock options of
$313,000.
On October 11, 1995, the Company entered into a three year
$17,060,000 credit agreement ("Loan Agreement"). The Loan
Agreement provides for a $13,161,000 revolving credit line,
$2,149,000 of term promissory notes and $1,750,000 credit facility
for future capital expenditure financing. Borrowings under the
revolving credit line are based upon eligible accounts receivable
and inventories, as defined. The Loan Agreement is secured by
substantially all of the Company's assets and bears interest at
a rate of one and one half percent (1-1/2%) in excess of the prime
rate. The Loan Agreement and related documents contain certain
covenants including, among others, maintenance of minimum working
capital and adjusted net worth (as defined). The initial drawdown
under the Loan Agreement of $7,449,000, together with existing
cash, was used to extinguish a revolving credit facility at one
of the Company's subsidiaries of $762,000 and to repurchase
$7,500,000 face value of 13% Subordinated Notes for $7,425,000
plus accrued interest. The repurchase of the 13% Subordinated
Notes satisfied the annual sinking fund payment due December 15,
1995. The $75,000 gain on the repurchase was recorded in the
fourth quarter of 1995. As of December 31, 1995, borrowing
availability under the revolving credit line amounted to
$4,951,000.
As discussed in Part I Item 3 - Legal Proceedings, the Company has
reached a tentative agreement to settle the environmental
litigation with the United States and the Commonwealth of
Pennsylvania. On April 6, 1995, the Company funded a $4,500,000
court administered escrow account. Another payment totalling
$4,850,000 will be made upon entry of the Consent Decree which is
expected to occur within the next several months. Further
payments totalling $5,000,000 will be made to the United States
and the Commonwealth of Pennsylvania over a six year period
following the entry of the Consent Decree with the court. In
connection with its subordinated notes, the Company will be
required to make a final sinking fund payment of $7,500,000 on
December 15, 1996. The Company believes it has sufficient
liquidity to comply with the anticipated settlement terms of its
environmental litigation and to enable the Company to continue to
meet its obligations to pay principal and interest in connection
with its indebtedness as well as meet its operating cash
requirements. The Company expects to fund its sinking fund
payment and the payments required in connection with the
settlement of the environmental litigation from the proceeds from
the sale of Bright Star Industries, Incorporated as well as its
available cash resources, availability under the Loan Agreement,
cash provided by operations, refinancing or restructuring of
existing subordinated notes or in connection with the issuance of
new debt securities and the sale, if consummated, of one or more
of its subsidiary companies, as discussed below. While the
Company is considering each of the foregoing, there can be no
assurance that these efforts will be successful. The Company's
failure to generate positive cash flows from operations or its
inability to arrange refinancing or restructuring of the
subordinated notes could have a material adverse effect on the
Company.
The indenture under which the Company's subordinated notes were
issued contains various restrictive covenants that include, among
other things, restrictions on the payment of dividends or
distributions to shareholders, limitations on the issuance of
additional senior debt (as defined) and the maintenance of
consolidated net worth (as defined) of at least $8,000,000. If
the Company's consolidated net worth (as defined) at the end of
any two consecutive fiscal quarters declines to less than
$8,000,000, the Company would be required to make an offer to
purchase, on the last day of the fiscal quarter next following
such second fiscal quarter, 25% of the aggregate principal amount
of the notes then outstanding at a purchase price equal to 100%
of their principal amount plus accrued interest. The definition
of consolidated net worth excludes costs incurred in connection
with the settlement of the Company's environmental litigation.
Accordingly, as of December 31, 1995, consolidated net worth (as
defined) amounted to approximately $12,000,000.
During 1995, the Company's capital expenditures totaled
$3,368,000, of which $2,100,000 related to a facility purchase in
Chester, Connecticut. The facility purchase was partially
financed through a $1,600,000 seller note due 2005. The Company
anticipates that its level of capital expenditures for 1996 will
be approximately $2,500,000. The Company has not entered into any
material commitments for acquisitions or capital expenditures and
retains the ability to increase or decrease capital expenditure
levels as required. The Company anticipates that it will be able
to fund its capital expenditures during 1996 with its available
cash resources and its other cash flows as well as through capital
equipment financing.
At December 31, 1995, approximately $105,000,000 of U.S. tax loss
carryforwards (subject to review by the Internal Revenue Service),
expiring from 1996 through 2010, were available to offset future
taxable income. In addition, approximately $1,600,000 of unused
investment tax credits were available to offset future federal
income taxes payable through 2001.
<PAGE>
Outlook
The Company's operating results in 1996 will be affected by
several factors. The Company's Greenwald Industries, Inc.
subsidiary will be moving its operations from Brooklyn, New York
to a newly acquired facility in Chester, Connecticut. The move
is expected to be completed in the second quarter of 1996. The
costs associated with the move are estimated to be approximately
$4,500,000 million of which $2,100,000 related to the purchase of
the facility. Other costs include new machinery and equipment,
building improvements, new employee training, severance for
terminated employees in New York and relocation of equipment and
certain employees. In addition to the $1,600,000 seller-provided
financing, Greenwald has received commitments from two State of
Connecticut agencies to provide $2,200,000 in low interest rate
loans. The operating results for 1996 will be adversely affected
by the training, severance and relocation expense which are
expected to be less than $1,500,000 and the anticipated decline
in productivity as a result of transitioning to a new workforce.
Orr-Schelen-Mayeron & Associates, Inc. reported an operating loss
in the fourth quarter of 1995 of $700,000 due to a high level of
non-billable time and loss recognition on a number of contracts.
In February 1996, OSM took action to improve financial performance
including a 10% reduction in headcount and implementation of
spending and other controls. OSM expects to report depressed
operating results in the first quarter of 1996 due to the high
level of non-billable time, reduced margins on contracts and
severance associated with the headcount reduction. As of January
31, 1996, OSM failed to meet certain financial covenants under the
Loan Agreement. The lender has waived these events of default and
reset the covenants for the period subsequent to the default.
The Board of Directors of the Company is currently considering the
possible sale of certain operating subsidiaries and will be
seeking shareholder approval to enable the sale of such operating
subsidiaries on such terms and conditions as may be approved by
the Board of Directors in its discretion at the Annual Meeting of
Shareholders to be held on April 30, 1996. As previously
mentioned, the Company completed the sale of substantially all of
the assets of Bright Star Industries, Incorporated on February 16,
1996. The Company has also entered into a non-binding letter of
intent to sell substantially all of the assets of Fenwal
Electronics, Inc. and is exploring the sale of its Masterview
Window Company, Inc. subsidiary. In making the decision to
consider such sales, the Company considered the need to (i)
improve liquidity to meet the environmental and sinking fund
obligations, (ii) generate funds to finance the acquisition of one
or more significant businesses and (iii) the favorable sellers
market that exists today.
While the Company is exploring one or more sale opportunities,
there can be no assurance that any such sales can be completed on
acceptable terms and conditions.
Fourth Quarter Results - 1995 and 1994
Publicker's consolidated sales of $16,371,000 for the fourth
quarter of 1995 increased by approximately 3% from $15,882,000 for
the fourth quarter of 1994. The Company's income from operations
for the fourth quarter of 1995 and 1994 were $73,000. The Company
reported a net loss of $365,000 ($.02 per share) for the fourth
quarter of 1995 compared to a net loss of $259,000 ($.02 per
share) for the fourth quarter of 1994. The 1995 fourth quarter
results included cost of pensions-nonoperating of $194,000, legal
settlements and costs of $51,000, a gain from the repurchase of
subordinated notes of $75,000 and income from discontinued
operations of $179,000. The 1994 fourth quarter results included
cost of pensions-nonoperating of $122,000, legal settlements and
costs of $125,000, a gain from the repurchase of subordinated
notes of $640,000 and a loss from discontinued operations of
$104,000.
Costs of sales and services for the fourth quarter of 1995 totaled
$12,144,000 compared to $11,691,000 for the fourth quarter of
1994. Selling expenses totaled $1,083,000 for the fourth quarter
of 1995 compared to $1,084,000 for the fourth quarter of 1994.
General and administrative expenses totaled $3,071,000 compared
to $3,034,000 for the fourth quarter of 1994. Interest expense
decreased to $450,000 for the fourth quarter of 1995 compared to
$707,000 for the same period in 1994 due to the repurchase and
redemption of subordinated notes during the fourth quarter of
1994.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company's consolidated financial statements, the report of
independent public accountants thereon and related schedules
appear beginning on page F-2. See Index to Consolidated Financial
Statements and Schedules on page F-1.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT
The Company currently has six directors, all of whom were elected
at the Annual Meeting of Shareholders held on May 23, 1995. All
directors serve until the next election of directors or until their
successors are chosen and have qualified.
Set forth below as to each director of the Company is information
regarding age (as of February 15, 1996), position with the Company,
principal occupation, business experience, period of service as a
director of the Company and directorships currently held in public
corporations.
HARRY I. FREUND: Age 55; Director of the Company since April 12,
1985. Chairman of the Board since December 1985. Since 1975, Mr.
Freund has been Chairman of Balfour Investors Inc. (formerly known
as Balfour Securities Corporation), a merchant banking firm that
had previously been engaged in a general brokerage business. Mr.
Freund is also Vice Chairman of the Board of Directors of
Glasstech, Inc.
JAY S. GOLDSMITH: Age 52; Director of the Company since April 12,
1985. Vice Chairman of the Board since December 1985. Since 1975,
Mr. Goldsmith has been President of Balfour Investors Inc. Mr.
Goldsmith is also Chairman of the Board of Directors of Glasstech,
Inc.
DAVID L. HERMAN: Age 82; Director of the Company since April 12,
1985. Mr. Herman was President and Chief Executive Officer of the
Company from March 31, 1986 until March 8, 1995. Prior to 1986,
Mr. Herman was an independent consultant advising clients on the
reorganization of businesses and potential acquisitions. Prior
thereto, Mr. Herman was the sole owner of Darman Tool and
Manufacturing Company, a private company engaged in the manufacture
of appliances and photocopying machines.
CLIFFORD B. COHN: Age 44; Director of the Company since July 31,
1980. Vice President of Government Affairs of the Company from
April 1, 1982 to November 20, 1984. Since 1977, Mr. Cohn has been
engaged in the private practice of law in Philadelphia,
Pennsylvania. Mr. Cohn is a director of Glasstech, Inc.
L. G. SCHAFRAN: Age 57; Director of the Company since December 3,
1986. Mr. Schafran is the Managing General Partner of L. G.
Schafran & Associates, a real estate investment and advisory firm
established in October 1984. For more than five years prior
thereto, Mr. Schafran was a senior officer in The Palmieri Company,
specializing in the acquisition, management and disposition of
distressed properties. Mr. Schafran is a director of Glasstech,
Inc., Capsure Holdings Corp., OXiGENE, Inc., Dart Group Corp. and
its two publicly traded affiliates: Trak Auto Corp. and Crown Books
Corp. Mr. Schafran is also a trustee of National Income Realty
Trust, Chairman of the Board of Delta-Omega Technologies, Inc. and
Chairman of the Executive Committee of Dart Group Corp.
JAMES J. WEIS: Age 47; President, Chief Executive Officer and
Director of the Company since March 8, 1995. Mr. Weis joined the
Company in September 1984 as Assistant to the President and was
elected Vice President in November 1984, Chief Financial Officer
and Secretary in April 1986, Executive Vice President - Finance in
August 1989 and President, Chief Executive Officer and Director in
March 1995.
The information with respect to the executive officers of the
Company required by this item is set forth in Item 1A of this Form
10-K.
ITEM 11. EXECUTIVE COMPENSATION
Compensation of Executive Officers
The following tables set forth information concerning the cash
compensation, stock options and retirement benefits provided to
the Company's Chief Executive Officer, its other executive officer
and one former Chief Executive Officer. The notes to these tables
provide more specific information concerning compensation. The
Company's compensation policies are discussed in the Compensation
Committee Report on Executive Compensation.
Summary Compensation Table
Annual Compensation Long-Term Compensation
Awards Payments
Name and Principal Other Annual Restricted Stock
Position Year Salary Bonus(1) Compensation Awards
James J. Weis (1) 1995 315,727 130,000 $ - $ -
President, Chief 1994 233,750 100,000 - -
Executive Officer 1993 233,750 175,000 - -
and Director
Options/(#)(2) LTIP Payouts Compensation
100,000 $ - $9,641 (4)
60,000 - 8,728 (4)
60,000 - 7,081 (4)
Antonio L. DeLise (1)
Vice President,
Chief Financial
Officer and Secretary 1995 98,438 40,000 - -
Options/(#)(2) LTIP Payouts Compensation
25,000 - 2,100 (5)
David L. Herman (1)(3)
Director and 1995 37,500 - - -
former President 1994 127,500 75,000 - -
and Chief 1993 127,575 75,000 - -
Executive
Officer
Options/(#)(2) LTIP Payouts Compensation
30,000 - 90,409 (6)
60,000 - 553 (6)
60,000 - 964 (6)
(1) Reflects bonus earned during the fiscal year. In some instances
all or a portion of the bonus was paid during the next fiscal year.
(2) Options to acquire shares of Common Stock.
(3) Mr. Herman was the President and Chief Executive Officer of the
Company prior to his retirement on March 8, 1995.
(4) Consists of $4,620, $4,620 and $2,249 in contributions to the
Company's 401(k) plan for 1995, 1994 and 1993, respectively, and
$5,021, $4,108 and
$4,832 for term life and disability insurance premiums paid
on behalf of Mr. Weis for 1995, 1994 and 1993, respectively.
(5) Consists of $2,100 for term life and disability insurance payments
paid on behalf of Mr. DeLise for 1995.
(6) Consists of Board of Directors fees of $30,000 and fees received
pursuant to a Consulting Agreement of $60,000 for 1995 and $409,
$553 and $964 for term life and disability insurance premiums paid
on behalf of Mr. Herman for 1995, 1994 and 1993, respectively.
Stock Options Granted During 1995
Individual Grants
% of Options Exercise Price Expiration Date
Options Granted to all Per Share
Name Granted(3) Employees
James J. Weis 100,000 17.6% $1.875 6/23/00
Antonio L. DeLise 12,500 2.2% 1.625 12/12/00
12,500 2.2% 1.875 6/23/00
David L. Herman 12,500 5.3% 1.875 7/1/00
All Shareholders(2) N/A N/A 1.625 N/A
Named officers' gain N/A N/A N/A N/A
as % of all
shareholders' gain
Potential Realizable Value at Assumed
Annual Rates of Stock Price Appreciation For
Five Year Option Term (1)
5% 10%
James J. Weis $51,803 $114,471
Antonio L. DeLise 5,612 12,401
6,475 14,309
David L. Herman 15,541 34,341
Named officers' gain 7,698,366 17,011,377
as % of all
shareholders' gain
(1) The potential gain is calculated from the closing price of
Common Stock on June 23, 1995 and December 12, 1995, the
dates of grants to executive
officers. These amounts represent certain assumed rates
of appreciation only. Actual gains, if any, on stock option exercises and
Common Stock holdings are dependent on the future performance of the Common
Stock and overall market conditions. There can be no assurance that the amounts
reflected in this table will be achieved.
(2) Based on the number of shares outstanding at December 31, 1995.
(3) Options granted under the Company's 1993 Long-Term Incentive
Plan and the Non-employee Director Stock Option Plan expire five years from
the date of grant.
Aggregated Stock Options Exercised in 1995
and December 31, 1995 Option Values
Exercised in 1994 Unexercised at December 31, 1995
Number of Options
Shares Value
Name of Executive Acquired Realized Exercisable Unexercisable
James J. Weis - $ - 280,000 -
Antonio L. DeLise - - 25,000 -
David L. Herman - - 210,000 -
Value of Options
Exercisable Unexercisable
James J. Weis $237,500 $ -
Antonio L. DeLise 15,625 -
David L. Herman 202,500 -
(1) These values are based on the December 29, 1995 closing price for
the
Company's stock on the New York Stock Exchange of $2.375
per share.
(2) This represents the aggregate value of "in-the-money" stock
options as of
December 29, 1995.
Retirement Income Plan
Effective December 31, 1993, benefits under the Publicker
Retirement Plan (the "Plan") were frozen. Accordingly, Plan
participants will accumulate no additional credited service and
earnings subsequent to December 31, 1993 will no longer have an
impact on accumulated benefits. The annual benefits payable upon
retirement for Mr. Weis is $23,831. The foregoing amounts are
based on a straight life annuity. Retirement benefits are payable
at age 65 to married employees in the form of a 50% joint and
survivor annuity with their spouses, at a reduced amount, unless
they elect to receive a straight life annuity. Single employees
receive a straight life annuity. The foregoing benefit amounts are
not subject to any deduction for Federal Insurance Contributions
Act or other offset amounts.
Stock Option Plans
Under stock option plans for directors, officers and key
employees adopted by shareholders of the Company in 1988, 1989 and
1991, the Company has been authorized to grant nonqualified stock
options to purchase up to 3,500,000 shares of Common Stock. Under
the 1993 Long-Term Incentive Plan and the Non-employee Director
Stock Option Plan adopted by shareholders of the Company in 1994,
the Company may grant stock options, restricted stock options,
stock appreciation rights, performance awards and other stock-based
awards equivalent to up to 3,550,000 shares of Common Stock.
The plans are administered by the Board of Directors of the
Company. Subject to the express provisions of the plans, the Board
of Directors has full and final authority to determine the terms
of all options granted to key employees under the plans including
(a) the purchase price of the shares covered by each option, (b)
whether any payment will be required upon grant of the option, (c)
the individuals to whom, and the time at which, options shall be
granted, (d) the number of shares to be subject to each option, (e)
when an option can be exercised and whether in whole or in
installments, (f) whether the exercisability of the options is
subject to risk of forfeiture or other condition and (g) whether
the stock issued upon exercise of an option is subject to
repurchase by the Company, and the terms of such repurchase.
The term of options granted to directors shall be five years
from the date of grant and shall be immediately exercisable. Under
the 1988, 1989 and 1991 plans, the term of all other options shall
be for such period as the Board of Directors shall determine, but
shall not in any event exceed 12 years from the date of the
option's grant. Under the 1993 Long-Term Incentive Plan, the term
of options granted shall be prescribed by the Board of Directors
provided, however, that no stock option may be exercised after five
years from the date it is granted.
During the year ended December 31, 1995, no stock options
were granted to or exercised by any executive officers of the
Company other than options granted under the 1993 Long-Term
Incentive Plan and the Non-employee Director Stock Option Plan.
During such year, the Company granted 100,000 options to Mr. Weis,
25,000 options to Mr. DeLise and 30,000 options to Mr. Herman. No
directors or officers of the Company exercised options during 1995.
Employment and Change in Control Agreements
In August 1987, the Company entered into change in control
agreements with each of Messrs. Freund, Goldsmith, Herman and Weis,
which agreements provide for payments to them under certain
circumstances following a change in control of the Company. These
agreements were not adopted in response to any specific acquisition
of shares of the Company or any other event threatening to bring
about a change in control of the Company. For purposes of the
agreements, a change in control is defined as any of the following:
(i) the Company ceasing to be a publicly owned corporation having
at least 2,000 shareholders, (ii) any person or group acquiring in
excess of 30% of the voting power of the Company's securities,
(iii) Continuing Directors (as defined below) ceasing for any
reason to constitute at least a majority of the Board of Directors,
(iv) the Company merging or consolidating with any entity, unless
approved by a majority of the Continuing Directors or (v) the sale
or transfer of a substantial portion of the Company's assets to
another entity, unless approved by a majority of the Continuing
Directors. A majority of the Continuing Directors have approved
the sale of the Company's Masterview Window Company subsidiary or
the property or assets thereof on such terms and conditions
(including the consideration therefor) as may subsequently be
determined by the Board of Directors, in its sole discretion. See
"Proposal 2. --Sale of Masterview Window Company." For purposes
of the agreements, "Continuing Director" means Messrs. Freund,
Goldsmith, Herman, Cohn, Schafran and Weis, and any other director
designated as such prior to his election as a director by a
majority of the then remaining Continuing Directors.
In the event the Company discontinues the services (as
defined below) of one of the above-named individuals as a director
or officer, as the case may be, following a change in control, the
individual will be entitled to receive in a lump sum within 10 days
of the date of discontinuance, a payment equal to 2.99 times the
individual's average annual compensation for the shorter of (i) the
five years preceding the change in control, or (ii) the period the
individual received compensation from the Company for personal
services. Assuming a change in control of the Company and the
discontinuance of an individual's services were to occur at the
present time, payments in the following amounts (assuming there are
no excess parachute payments, as defined below) would be made
pursuant to the change in control agreements: Mr. Freund --
$861,307; Mr. Goldsmith -- $861,307; Mr. Herman -- $615,011 and Mr.
Weis -- $1,158,074. In the event any such payment, either alone
or together with others made in connection with the individual's
discontinuance, is considered to be an "excess parachute payment"
(as defined in the Internal Revenue Code of 1986, as amended (the
"Code")), the individual is entitled to receive an additional
payment in an amount which, when added to the initial payment,
results in a net benefit to the individual (after giving effect to
excise taxes imposed by Section 4999 of the Code and income taxes
on such additional payment) equal to the initial payment before
such additional payment. The Company shall be deemed to have
discontinued an individual's services if any of the following
occurs: (i) he is terminated as an employee of the Company for any
reason other than conviction of a felony or any act of fraud or
embezzlement, his disability for six consecutive months or his
death, (ii) failure to elect and maintain him in the office which
he now occupies, (iii) failure of the Board of Directors to include
him in the slate of directors recommended to stockholders, (iv) a
reduction in his salary or fringe benefits, (v) a change in his
place of employment or excessive travel or (vi) other substantial,
material and adverse changes in conditions under which the
individual's services are to be rendered. Since the change in
control agreements would require large cash payments to be made by
any person or group effecting a change in control of the Company
absent the assent of a majority of the Continuing Directors, these
agreements may discourage hostile takeover attempts of the Company.
The change in control agreements would have expired on
December 31, 1995 but have been and will continue to be
automatically extended for a period of one year on each December
1, unless terminated by either party prior to any such December 1.
In the event a change in control occurs during the term of any of
the agreements, including any extension thereof, the term of such
agreements shall automatically be extended to three years from the
date of such change in control.
The Company has entered into an agreement with Mr. Weis which
provides that, in the event his employment is terminated without
cause or is considered terminated by reason of a change in
Mr. Weis' duties which would require him to relocate his principal
residence, he will receive a continuation of salary payments and
all other employee benefits then provided him until the earlier of
one year from the date of notice of termination or the date upon
which he begins full-time employment with a new employer.
Notwithstanding anything to the contrary set forth in any of
the Company's previous filings under the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended,
that might incorporate future filings, including the Proxy
Statement in whole or in part, the following report and the
Performance Graph shall not be incorporated by reference into any
such filing.
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors,
consisting entirely of outside directors, approves all of the
policies under which compensation is paid or awarded to the
Company's executive officers. The present members of the
Compensation Committee are Jay S. Goldsmith, Clifford B. Cohn and
L. G. Schafran. The Company's compensation program for executive
officers currently consists of salary and bonuses and periodic
grants of nonqualified stock options. The elements of this program
have different purposes. Salary and bonus payments are primarily
designed to reward current and past performance, while stock option
grants are designed to provide strong incentives for long-term
future performance, and are generally forfeited should the
executive officer leave the Company before retirement. All stock
option grants are made under the Company's stock option plans which
have been approved by the Company's shareholders. The granting of
stock options is directly linked to the shareholders' interests
since the value of the grants will increase or decrease based upon
the future price of the Company's stock.
In determining the executive compensation to be paid or
granted during 1995, the Committee considered several factors.
These included the assessment of the future objectives and
challenges facing the Company as well as the significant problems
the Company has been dealing with during 1995, particularly its
ongoing environmental litigation. In view of the Company's efforts
to achieve profitability, the Committee's actions have been guided
less on quantitative measures of operating results than on other
goal-directed endeavors such as the Company's acquisitions and
dispositions, elimination and rationalization of underperforming
operations and the efforts of the executive personnel to bring
about improvements in the operations and profitability of the
Company's subsidiaries. The Committee's decisions concerning the
compensation of individual executive officers during 1995 were made
in the context of historical practices and the current competitive
environment together with the need to attract and retain highly
qualified executives who will be best able to achieve the successes
needed by the Company. The Committee also considered the fact that
the Company has had only two executive officers and the effect this
has on their workload and diversity of responsibilities.
Bases for Chief Executive Officer Compensation
In 1995, Mr. Weis received total cash payments of $445,737
in salary and bonus (as shown in the Summary Compensation Table
above). In addition, options to purchase 100,000 shares of Common
Stock were granted to Mr. Weis during 1995 under the Company's 1993
Long-Term Incentive Plan. The Compensation Committee considered
the 1995 compensation appropriate in light of the Company's
significantly improved financial results, increased shareholder
value, his leadership in the Company's settlement of certain
environmental litigation and performance with respect to
implementing strategic initiatives for the Company. The Committee
noted Mr. Weis's considerable efforts to revitalize the Company,
his direct involvement in the significant transactions of the
Company during 1995 and his knowledge and historical perspective
of the Company's problems and issues.
This report is submitted by the members of the Compensation
Committee of the Board of Directors.
Compensation
Committee
Jay S.
Goldsmith
Clifford B.
Cohn
L. G.
Schafran
<PAGE>
Five Year Performance Graph: 1990 - 1995
The annual changes for the five year period from 1990 through
1995 are based on the assumption that $100 had been invested in
Publicker stock and each index on December 31, 1990 (as required
by SEC rules), and that all quarterly dividends were reinvested at
the average of the closing stock prices at the beginning and end
of the quarters. The total cumulative dollar returns shown in the
graphs represent the value that such investments would have had on
December 31, 1995.
The peer group index is based on all companies
contained in the Multi-industry Group of Media General Financial
Services with a market capitalization of under $100 million as of
December 31, 1995. The returns of each component issuer of the
peer group have been weighted according to the respective issuer's
stock market capitalization at the beginning of each period for
which a return is indicated. This group was selected since the
diversity of the Company's operations does not place it within any
more specific industry group. In addition, the market
capitalization criteria was applied to eliminate from comparison
those multi-industry companies that are extremely large, such as
ITT Corporation. The resulting peer group consists of the
following fourteen companies for 1995: American Pacific Corp., ARC
International Corp., Autocam Corp., Drew Industries Inc., Met-Pro
Corporation, Pacific Dunlop Ltd. ADR, Prime Equities International,
Quixote Corp., SL Industries Inc., Somerset Group Inc., TCC
Industries, Inc., Triton Group Ltd., Intelect Communications Ltd.,
and Tyler Corp. The companies shown in italics are new to this
peer group during 1995. The following companies that were included
in this peer group for 1994 were no longer included in the peer
group for 1995: Challenger International Ltd., Katy Industries and
Wellstead Industries Inc.
Information Concerning the Board of Directors
Directors who were not officers of the Company, other than
Messrs. Freund and Goldsmith, are paid $2,500 per month for
services as directors and, in addition, $750 per day for each
meeting of the Board or of shareholders that they attended without
regard to the number of meetings attended each day.
Pursuant to informal arrangements with the Company, Messrs.
Freund and Goldsmith each receive annual compensation at the rate
of $325,000 per year as Chairman and Vice Chairman of the Board,
respectively, and for providing certain services described below.
The arrangements have indefinite terms and are terminable at any
time by either party. The compensation received by them is
approved from time to time by the Directors Compensation Committee
of the Board of Directors, consisting of David L. Herman, Clifford
B. Cohn and L.G. Schafran.
Messrs. Freund and Goldsmith provide advice and counsel to
the Company on a variety of strategic and financial matters,
including business acquisitions and divestitures, raising capital
and shareholder relations. Messrs. Freund and Goldsmith do not
render any services in connection with the day-to-day operations
of the Company. Services are provided on a less than full time
basis, with the amount of time varying depending on the activities
in which the Company is engaged from time to time. The
arrangements with the Company do not provide for a minimum amount
of time to be spent on Company matters.
On March 8, 1995, following Mr. Herman's retirement as
President of the Company, the Company and Mr. Herman entered into
an informal Consulting Agreement pursuant to which Mr. Herman will
render consulting services to the Board of Directors of the
Company. The Consulting Agreement has an indefinite term and
provides for a monthly consulting fee at a rate of $80,000 per
year. The services to be rendered to the Company by Mr. Herman
include consultation on acquisitions and divestitures, litigation,
including the Company's environmental litigation, and other
matters. The Consulting Agreement is terminable at any time by the
Company or Mr. Herman.
The Company and Balfour Investors Inc. ("Balfour"), are
parties to a License Agreement, dated as of October 26, 1994, with
respect to a portion of the office space leased by the Company in
New York City. Harry I. Freund and Jay S. Goldsmith are Chairman
and President, respectively, and the only shareholders of Balfour.
The term of the License Agreement commenced on January 1, 1995 and
will expire on June 30, 2004, unless sooner terminated pursuant to
law or the terms of the License Agreement. The License Agreement
provides for Balfour to pay the Company an amount equal to 30% of
the rent paid by the Company under its lease, including base rent,
electricity, water, real estate tax escalations and operation and
maintenance escalations. In addition, Balfour has agreed to
reimburse the Company for 30% of the cost of insurance which the
Company is obligated to maintain under the terms of its lease with
respect to the premises. The base rent payable by Balfour under
the License Agreement is $5,618 per month through September 30,
1999 and $6,045 per month thereafter.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Security Ownership of Beneficial Owners
The following table sets forth, as of February 15, 1996, except
as otherwise noted, the beneficial ownership of the Company's
Common Stock by each person who owns of record or is known by the
Company to own beneficially more than 5% of the Common Stock of
the Company.
Name and Address of Beneficial
Owner
Amount and Nature of
Beneficial Ownership(1)
Percent of Class
Harry I. Freund
c/o Balfour Investors, Inc.
620 Fifth Avenue
Rockefeller Center
New York, NY 10111
2,104,022(2)
12.6%
Jay S. Goldsmith
c/o Balfour Investors, Inc.
620 Fifth Avenue
Rockefeller Center
New York, NY 10111
2,105,522(3)
12.6%
Base Assets Trust
11400 West Olympic Boulevard
Los Angeles, CA 90064
979,353(4)
6.1%
R. Weil & Associates, L.P.,
Appleton Associates L.P. and
Ralph Weil
c/o R. Weil & Associates
2 Crossfield Avenue
West Nyack, NY 10994
1,731,900(5)
11.6%
Foreign & Colonial Management
Limited and Hypo Foreign &
Colonial Management (Holdings)
Limited
Exchange House
Primrose Street
London EC2 ANY, England
1,233,750(6)
8.2%
(1) Calculated in accordance with Rule 13d-3 adopted by the
Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended.
(2) Includes shares of Common Stock which may be acquired by
Mr. Freund within 60 days as follows: 500,000 shares
through the exercise of stock options and l,064,960 shares
through the exercise of stock purchase warrants. Also
includes 314,125 shares that may be deemed to be owned
beneficially by Mr. Freund which are held by Balfour
Investors Inc. ("Balfour") for its clients in
discretionary accounts, as to which Mr. Freund disclaims
beneficial ownership. Messrs. Freund and Goldsmith are
Chairman and President, respectively, and the only
shareholders of Balfour. The discretionary clients of
Balfour have the sole power to vote and direct the vote of
the shares held in their account. Balfour and its
discretionary clients have shared power to dispose of or
direct the disposition of the shares held in such clients'
accounts. At present, Balfour has the right to receive or
the power to direct the receipt of dividends from, or the
proceeds from the sale of the Company's Common Stock for
all of its discretionary clients. Also includes options to
purchase 200,000 shares of Common Stock held by Mr. Freund,
the expiration of which has been extended by five years to
April 12, 2000.
(3) Includes shares of Common Stock which may be acquired by
Mr. Goldsmith within 60 days as follows: 500,000 shares
through the exercise of stock options and 1,034,240 shares
through the exercise of stock purchase warrants. Also
includes 1,500 shares of Common Stock and 30,720 shares
which may be acquired through the exercise of stock
purchase warrants over which Mr. Goldsmith has shared
voting and investment power but as to which he disclaims
any beneficial interest, and includes 314,125 shares that
may be deemed to be owned beneficially by Mr. Goldsmith
which are held by Balfour for its clients in discretionary
accounts as to which Mr. Goldsmith disclaims beneficial
ownership (see Note 2 above). Also includes options to
purchase 200,000 shares of Common Stock held by Mr.
Goldsmith, the expiration of which has been extended by
five years to April 12, 2000.
(4) Represents warrants to purchase 979,353 shares of Common
Stock owned by the Base Assets Trust - Richard D. Baum,
Trustee, Wilbert F. Schwartz, Trustee and Thomas Arnold,
Trustee. This information is based on a statement on
Schedule 13G filed with the Securities and Exchange
Commission by Base on February 13, 1996. On April 15,
1996, the Company and Base amended the terms of the
warrants to make them exercisable for 40,000 shares of
Common Stock without consideration. On such date, Base
exercised the warrants and purchased 40,000 shares of
Common Stock. Base has shared power to vote and direct the
vote and shared power to dispose or to direct the
disposition of the shares.
(5) Based on a statement on Schedule 13D filed with the
Securities and Exchange Commission on August 31, 1995.
Includes 1,673,700 shares owned by a group consisting of R.
Weil & Associates L.P., Appleton Associates L.P. and Ralph
Weil. These parties affirm that there is no formal
arrangement among them or among any of the other persons or
entities named in the Schedule 13D with respect to the
Common Stock of the Company. Mr. Weil has the power to
vote and direct the vote and the power to dispose or to
direct the disposition of these shares. Also includes
58,200 shares as to which Mr. Weil has shared voting and
disposition power but as to which he disclaims any
beneficial interest.
(6) Based on a statement on Schedule 13G filed with the
Securities and Exchange Commission on February 3, 1995.
Foreign & Colonial Management Limited and Hypo Foreign &
Colonial Management (Holdings) Limited have shared power to
vote and direct the vote and shared power to dispose or to
direct the disposition of such shares.
Security Ownership of Management
The following information is furnished as of February 15,
1996 with respect to each class of equity securities of the Company
beneficially owned by all directors and nominees, and by all
directors, nominees and officers as a group.
The information concerning the directors, nominees and
officers and their security holdings has been furnished by them to
the Company.
Name
Position
Beneficial Ownership
of Shares of Common
Stock as of
February 15, 1996(1)
Percent
of Class(1)
Harry I. Freund
Director and
Chairman of the
Board
2,104,022(2)
12.6%
Jay S. Goldsmith
Director and Vice
Chairman of the
Board
2,105,522(3)
12.6%
James J. Weis
President, Chief
Executive Officer
and Director
284,500(4)
1.9%
Clifford B. Cohn
Director
234,070(5)
1.5%
David L. Herman
Director
311,200(6)
2.0%
L.G. Schafran
Director
292,690(7)
1.9%
Antonio L. DeLise
Vice President,
Chief Financial
Officer and
Secretary
25,000(8)
Less than 1%
All directors,
nominees and
officers as a
group (7 persons)
5,357,004(9)
27.4%
(1) Calculated in accordance with Rule 13d-3 adopted by the
Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended.
(2) See Note 2 on page 2.
(3) See Note 3 on page 2.
(4) Includes 280,000 shares which may be acquired by Mr. Weis
within 60 days through the exercise of stock options.
(5) Includes 220,000 shares which may be acquired by Mr. Cohn
within 60 days through the exercise of stock options.
(6) Includes shares of Common Stock which may be acquired by Mr.
Herman within 60 days as follows: 210,000 shares through the
exercise of stock options and 51,200 shares through the
exercise of stock purchase warrants.
(7) Includes shares of Common Stock which may be acquired by Mr.
Schafran within 60 days as follows: 220,000 shares through
the exercise of stock options and 10,240 shares through the
exercise of stock purchase warrants. Also includes 11,250
shares of Common Stock and 51,200 shares that may be
acquired through the exercise of stock purchase warrants
over which
Mr. Schafran has shared voting and investment power but as
to which he disclaims any beneficial interest.
(8) Consists of shares which may be acquired by Mr. DeLise within
60 days through the exercise of stock options.
(9) Includes shares of Common Stock which may be acquired by such
persons within 60 days as follows: 1,955,000 shares through
the exercise of stock options and 2,242,560 shares through
the exercise of stock purchase warrants. Also includes
options to purchase 400,000 shares of Common Stock held by
Messrs. Freund and Goldsmith, the expiration of which has
been extended by five years to April 12, 2000.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
See Item 11 - Executive Compensation for information with
respect to transactions required by this item.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K
(a) Financial Statements, Financial Statement Schedules and
Exhibits.
1) Financial Statements - See accompanying Index to
Consolidated Financial Statements and Schedules,
Page F-1.
2) Financial Statement Schedules - See accompanying Index
to Consolidated Financial Statements and Schedules,
Page F-1.
3) Exhibits:
3.1 Amended and Restated Articles of Incorporation, dated
March 27, 1984. **
3.2 Amendment to the Amended and Restated Articles
of Incorporation, dated December 26, 1986. **
3.3 Amendment to the Amended and Restated Articles of
Incorporation, dated December 22, 1988. **
3.4 By-Laws as amended through July 17, 1990.
Incorporated by reference from the Registrant's Form
10-K for the year ended December 31, 1990, dated March
28, 1991.
3.5 Certificate of Designation, Preferences and Rights of
Class A Preferred Stock, First Series. Incorporated
by reference from the Registrant's Registration
Statement on Form 8-A, dated September 26, 1988.
4.1 Form of option to purchase common stock of the
Registrant issued in connection with the Stock
Purchase Agreement dated April 12, 1985, among the Registrant,
Balfour Securities Corporation and the Purchasers.
On March 8, 1995, the Registrant's Board of Directors extended the
term of the options until April 12, 2000.******
4.2 Form of Indenture, dated 1986 between the Registrant
and J. Henry Schroder Bank & Trust Company, as
Trustee. *
4.3 First supplemental indenture, dated as of January 27,
1988, between the Registrant and IBJ Schroder Bank & Trust Company,
Trustee.******
4.4 Second supplemental indenture, dated as of April 1,
1993, between the Registrant and IBJ Schroder Bank & Trust
Company, as Trustee.******
4.5 Third supplemental indenture, dated September 1,
1995, between the Registrant and IBJ Schroder
Bank & Trust Company, as trustee. Filed
herewith.
4.6 Form of Warrant Agreement, dated 1986 between the
Registrant J. Henry Schroder Bank & Trust Company, as
Warrant Agent. On September 3, 1991, the Company's
Board of Directors extended the term of the
outstanding warrants to December 15, 1996. *
4.7 Form of Warrant Agreement, dated 1986 between the
Registrant and Drexel Burnham Lambert Incorporated.
On September 3, 1991, the Company's Board of Directors extended
the term of the outstanding warrants to
December 15, 1996.*
4.8 Rights Agreement, dated as of August 9, 1988, between
the Registrant and Mellon Financial
Services Corporation #17, as Rights Agent.
Incorporated by reference from the Registrant's
Registration Statement on Form 8-A, dated
September
26, 1988.
4.9 Loan and Security Agreement, dated October 11, 1995,
by and between Congress Financial Corporation (New
England) and the Company's subsidiaries as
Borrowers.*******
4.10 Term Promissory Notes dated October 11, 1995, from the
Company's subsidiaries as Debtors and Congress
Financial Corporation (New England) in the
aggregate
amount of $2,149,000.*******
4.11 Guarantee dated October 11, 1995, by Publicker
Industries Inc. to Congress Financial
Corporation (New
England) of the obligations of the Company's
subsidiaries under the Financing
Agreements.*******
4.12 General Security Agreement dated by October 11, 1995
by Publicker Industries Inc. in favor of Congress
Financial Corporation (New England).*******
10.1 Agreements dated as of August 1987 between the
Registrant and Harry I. Freund, Jay S. Goldsmith,
David L. Herman, and James J. Weis concerning a change
in control of the Registrant. Incorporated by
reference from the Registrant's Form 8 Amendment to
the Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1987, dated December 7,
1987, filed on December 18, 1987.
10.2 Publicker Industries Inc. 1988 Stock Option Plan. ***
10.3 Publicker Industries Inc. 1989 Stock Option Plan. ****
10.4 Publicker Industries Inc. 1991 Stock Option Plan. ****
10.5 Employment Agreement between the Registrant and Mr.
James J. Weis dated February 17, 1987. ****
10.6 Publicker Industries Inc. 1993 Long-Term Incentive
Plan. *****
10.7 Publicker Industries Inc. Non-employee Director Stock
Option Plan. *****
10.8 Asset Purchase Agreement between Associated Testing
Laboratories, Inc., the Registrant and
F.W. Bell, Inc. dated January 31, 1995, and exhibits
thereto.******
10.9 Asset Purchase Agreement among Bright Star
Industries, Incorporated, Hanten Acquisition
Co., Registrant, as sellers, and Bright Star
Acquisition Corp., as buyer, dated February 16,
1996.********
10.10 Consulting Arrangement between the Registrant
and Harry I. Freund and Jay S. Goldsmith. Filed
herewith.
21 Subsidiaries of Registrant. Filed herewith.
23 Consent letter from Independent Public
Accountants. Filed herewith.
(b) Reports on Form 8-K
During the fourth quarter of 1995, the Company filed one
report on Form 8-K dated October 23, 1995, relating to a
credit agreement with Congress Financial Corporation (New
England) which was entered into by the Company's subsidiaries
on October 11, 1995.
* Incorporated by reference from the Registrant's
Registration Statement on Form S-1, dated October 8,
1986.
** Incorporated by reference from the Registrant's Form 10-K
for the year ended December 31, 1988, dated March 30,
1989.
*** Incorporated by reference from the Registrant's
Registration Statement on Form S-8 (File No. 33-26386),
dated January 16, 1989.
**** Incorporated by reference from the Registrant's Form
8 Amendment to the Registrant's Form 10-K for the
fiscal year ended December 31, 1991, filed on August
14, 1992.
***** Incorporated by reference from the Registrant's Form
10-K for the year ended December 31, 1993, dated March
29, 1994.
****** Incorporated by reference from the Registrant's Form
10-K for the year ended December 31, 1994, dated March
31, 1995.
******* Incorporated by reference from the Registrant's Form 8-K
dated October 23, 1995.
******** Incorporated by reference from the Registrant's Form
8-K dated March 1, 1996.
<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.
PUBLICKER INDUSTRIES INC.
(Registrant)
Date March 14, 1996
By: /s/ JAMES J. WEIS
James J. Weis, President,
Chief Executive Officer and
Director
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.
Date March 14, 1996
By: /s/ JAMES J. WEIS
James J. Weis, President,
Chief Executive Officer and
Director
Date March 14, 1996
By: /s/ ANTONIO L. DELISE
Antonio L. DeLise, Vice
President, Chief Financial
Officer, Secretary and Principal
Financial and Accounting Officer
Date March 14, 1996
By: /s/ CLIFFORD B. COHN
Clifford B. Cohn, Director
Date March 14, 1996
By: /s/ HARRY I. FREUND
Harry I. Freund, Director
Date March 14, 1996
By: /s/ JAY S. GOLDSMITH
Jay S. Goldsmith, Director
Date March 14, 1996
By: /s/ DAVID L. HERMAN
David L. Herman, Director
Date March 14, 1996
By: /s/ L. G. SCHAFRAN
L. G. Schafran, Director
<PAGE>
PUBLICKER INDUSTRIES INC.
AND SUBSIDIARY COMPANIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND
SCHEDULE
Report of independent public accountants F-2
Consolidated balance sheets as of December 31, 1995 and 1994 F-3
Consolidated statements of income (loss) for the years ended
December 31, 1995,
1994 and 1993 F-4
Consolidated statements of shareholders' equity for the years
ended
December 31, 1995, 1994 and 1993 F-5
Consolidated statements of cash flows for the years ended
December 31, 1995, 1994 and 1993 F-6
Notes to consolidated financial statements F-7 through F-15
Schedule
Report of independent public accountants on schedule F-16
Schedule II -Valuation and qualifying accounts F-17
All other schedules required by Regulation S-X have been
omitted because they are not applicable or
because the required information is included in the financial
statements or notes thereto.
<PAGE>
PUBLICKER INDUSTRIES INC.
AND SUBSIDIARY COMPANIES
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Publicker Industries Inc.:
We have audited the accompanying consolidated balance sheets of
Publicker Industries Inc. (a Pennsylvania corporation) and
subsidiary companies as of December 31, 1995 and 1994, and the
related consolidated statements of income (loss), shareholders'
equity and cash flows for each of the three years in the period
ended December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Publicker Industries Inc. and subsidiary companies as of December
31, 1995 and 1994, and the results of their operations and their
cash flows for each of the three years in the period ended
December 31, 1995, in conformity with generally accepted
accounting principles.
Arthur Andersen LLP
Stamford, Connecticut
February 26, 1996
PUBLICKER INDUSTRIES INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS AS OF
DECEMBER 31, 1995 AND 1994
1995 1994*
(in thousands of dollars)
ASSETS
Current assets:
Cash, including short-term investments of
$5,470 in 1994 (Note 1) $ 874 $ 6,274
Restricted cash (Note 11) 4,500 -
Trade receivables, less allowance
for doubtful accounts (1995 -$239; 1994 - $352)
(Note 1) 8,931 9,638
Inventories (Note 1 and 3) 7,286 6,874
Net assets of discontinued operations (Note 2) 4,579 6,957
Other 895 798
Total current assets 27,065 30,541
Property, plant and equipment (Note 1):
Land 731 398
Buildings and leasehold improvements 3,609 1,811
Machinery and equipment 6,962 5,848
Less - accumulated depreciation (3,595) (2,605)
7,707 5,452
Goodwill (Note 1) 7,861 7,790
Other assets (Note 7) 2,557 1,517
$ 45,190 $ 45,300
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Current maturities of long-term
debt (Note 4) $ 11,235 $ 9,684
Trade accounts payable 6,240 5,603
Accrued liabilities (Notes 7 and 11) 15,378 8,338
Total current liabilities 32,853 23,625
Long-term debt (Note 4) 3,458 7,753
Other non-current liabilities (Notes 7 and 11) 11,473 16,538
Total liabilities 47,784 47,916
Shareholders' equity (Notes 5 and 8):
Common shares, $0.10 par value,
Authorized, 30,000,000 shares
Issued - 15,405,937 shares in
1995 and 14,950,937 in 1994 1,541 1,495
Additional paid-in capital 42,488 41,942
Accumulated deficit (since January 1, 1984) (42,732) (42,441)
Common shares held in treasury, at cost - 545,027 in 1995 and
418,837 shares in 1994 (3,891) (3,612)
Total shareholders' equity (2,594) (2,616)
$ 45,190 $ 45,300
*Restated for discontinued operations (Note 2).
The accompanying notes to consolidated financial statements are
an integral part of these balance sheets.
These financial statements have been prepared from the Company's
books and records, after making all necessary adjustments thereto,
and they represent the final statements for the period under
examination
Antonio L. DeLise, Vice President & Chief Financial Officer
PUBLICKER INDUSTRIES INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994* 1993*
(in thousands except per share data)
Sales and revenues:
Sales of goods $56,014 $ 52,578 $ 46,654
Revenues from services 10,276 11,884 9,972
66,290 64,462 56,626
Costs and expenses:
Cost of sales 41,271 42,273 37,473
Cost of services 7,238 7,619 6,291
Selling expenses 4,219 4,244 3,582
General and administrative expenses 11,319 10,201 9,653
64,047 64,337 56,99
Income (loss) from operations 2,243 125 (373)
Other (income) expenses:
Interest income (138) (309) (287)
Interest expense 2,181 3,063 3,547
Cost of pensions - nonoperating (Note 7) 744 768 776
Legal settlements and costs (Note 11) 365 507 14,791
Gain from repurchase of notes (Note 4) (75) (640) (370)
3,077 3,389 18,457
Income (loss) from continuing
operations (834) (3,264) (18,830)
Discontinued operations (Note 2):
Income (loss) from discontinued
operations 543 975 1,076
Gain on sale or other disposition of
discontinued operations - net - - 8,307
Net income (loss) $ (291) $ (2,289) $ (9,447)
Earnings (loss) per common share (Note 1):
ontinuing operations $ (.06) $ (.22) $ (1.30)
Discontinued operations .04 .07 .65
$ (.02) $ (.15) $ (.65)
* Restated for discontinued operations (Note 2).
The accompanying notes to consolidated financial statements are
an integral part of these statements.<PAGE>
PUBLICKER INDUSTRIES INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(in thousands of dollars except share data)
Common Shares Additional Accumulated Common Share-
Shares Paid-in Deficit Treasury holders'
Issued AmountCapital Since 1-1-84 Shares Equity
Balance - December 31, 1992 14,909,937 $1,491 $41,908 $(30,705) $(3,612) $ 9,082
Issuance of Common Shares 27,000 3 22 - - 25
Net income (loss) - - - (9,447) - (9,447)
Balance-December 31,1993 14,936,937 1,494 41,930 (40,152)(3,612) (340)
Issuance of Common Shares 14,000 1 12 - - 13
Net income (loss - - - (2,289) - (2,289)
Balance-December 31,1994 14,950,937 1,495 41,942 (42,441) (3,612) (2,616)
Issuance of Common Shares 455,000 46 546 - - 592
Repurchase of Common Shares - - - - (279) (279)
Net income (loss) - - - (291) - (291)
Balance-December 31,1995 15,405,937 $1,541 $42,488 $(42,732) $(3,891) $(2,594)
(1) Represents common shares held in treasury of 545,027 at
December 31, 1995 and 418,837 at December 31, 1994, 1993 and
1992.
The accompanying notes to consolidated financial statements are
an integral part of these statements.
<PAGE>
PUBLICKER INDUSTRIES INC.
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994* 1993*
(in thousands)
Cash flows from operating activities:
Income (loss) from continuing operations $ (834) $(3,264) $ (18,830)
Adjustments to reconcile income (loss) to
net cash provided by (used in) continuing operations:
Depreciation and amortization 1,508 1,382 1,202
Provision for doubtful accounts 80 483 183
Gain from repurchase of notes (75) (640) (370)
Provision for settlement of environmental litigation - - 14,350
Changes in operating assets and liabilities:
Decrease (increase) in restricted cash (4,500) - -
Decrease (increase) in trade receivables 627 (1,666) (1,466)
Decrease (increase) in inventories (412) 660 (148)
Decrease (increase) in other current assets (97) 296 164
Decrease (increase) in other assets (1,441) 790 (963)
Increase (decrease) in trade accounts payable 637 404 1,190
Increase (decrease) in accrued liabilities 7,040 3,961 182
Increase (decrease) in other
non-current liabilities (5,065) (5,055) 691
Net cash provided by (used in)
continuing operations (2,532) (2,649) (3,815)
Income (loss) from discontinued operations 543 975 9,383
Adjustments to reconcile income to net
cash provided by (used in) discontinued operations:
Gain on sale or other disposition of discontinued
operations - - (8,307)
Decrease (increase) in net assets of discontinued
operations (525) 26 (501)
Net cash provided by (used in) discontinued
operations 18 1,001 575
Net cash provided by (used in) operating
activities (2,514) (1,648) (3,240)
Cash flows from investing activities:
Proceeds from sale or other disposition of discontinued
operations 2,240 2,010 16,844
Capital expenditures (3,368 (1,570) (1,107)
Net cash provided by
(used in) investing activities (1,128) 440 15,737
Cash flows from financing activities:
Repurchase or redemption of 13% Subordinated Notes(7,425)(6,774) (3,330)
Borrowings under revolving credit lines 1,475 2,027 -
Proceeds from issuance of term
loans and notes payable 4,163 634 -
Repayment of term loans and notes payable (284) (93) -
Proceeds from the issuance of common shares 592 13 25
Purchase of treasury stock (279) - -
Net cash provided by (used in) financing activities(1,758)(4,193) (3,305)
Net increase (decrease) in cash (5,400) (5,401) 9,192
Cash - beginning of period 6,274 11,675 2,483
Cash - end of period $ 874 $ 6,274 $11,675
* Restated for discontinued operations (Note 2).
The accompanying notes to consolidated financial statements are
an integral part of these statements.<PAGE>
Note 1 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
Principles of consolidation
The consolidated financial statements include the accounts
of Publicker Industries Inc. ("the Company") and its wholly-owned
subsidiaries. All significant intercompany transactions are
eliminated in consolidation. Certain prior year amounts have been
reclassified to conform with the 1995 presentation.
Short-term investments
Short-term investments consist of certain liquid instruments
with maturities less than three months including U.S. Treasury
obligations, repurchase agreements and money market funds and are
stated at cost which approximates market value.
Inventories
Inventories are recorded at cost, determined on a first-in,
first-out, or FIFO, basis and do not exceed net realizable values.
Depreciation and amortization
Property, plant and equipment are stated at cost.
Improvements and replacements are capitalized, while expenditures for
maintenance and repairs are charged to expense as incurred.
Maintenance and repairs totaled approximately $481,000, $603,000
and $576,000 for the years ended December 31, 1995, 1994 and 1993,
respectively. Depreciation and amortization is computed using the
straight-line method over estimated useful lives of 3 to 10 years
for machinery and equipment and 7 to 40 years for buildings and
leasehold improvements.
The costs of issuing the Company's 13% Subordinated Notes are
amortized over the term of the notes.
Goodwill is amortized on a straight-line basis over a
forty-year period. Accumulated amortization was $759,000 and
$535,000 as of December 31, 1995 and 1994, respectively. At each
balance sheet date, the Company evaluates the realizability of
goodwill based upon expectations of non-discounted cash flows and
operating income for each subsidiary having a material goodwill
balance. Based upon its most recent analysis, the Company
believes that no material impairment of goodwill exists at
December 31, 1995.
Revenue Recognition
Revenues are generally recorded when title passes to the
customer. One of the Company's businesses performs services under
long-term contracts. Revenues on long-term contracts are
recognized under the percentage-of-completion method of
accounting. The percentage-of-completion method of reporting income from
contracts takes into account the cost, estimated earnings and
revenue to date on contracts not yet completed. The amount of
revenue recognized is the portion of the total contract price that
the cost expended to date bears to the anticipated final total
cost, based on current estimates of costs to complete. Contract
cost includes all materials, labor, overhead and subcontract costs
related to the projects. In the event a loss on a contract is
anticipated, such losses are recorded in full as they are
identified. As of December 31, 1995 and 1994, net costs and
estimated earnings in excess of billings on uncompleted contracts,
which have been reflected as trade receivables, totaled
approximately $600,000 and $1,300,000, respectively, all of which are
expected to be billed and collected within one year. Net costs
and estimated earnings in excess of billings are billable based
on the terms of the contract which may include shipment of the
Company's product, achievement of contractual milestones or
completion of the contract.
<PAGE>
Use of Estimates
The preparation of these financial statements required the
use of certain estimates by management in determining the entity's
assets, liabilities, revenues and expenses. While all available
information has been considered, actual amounts could differ from
those reported. The most significant estimate with regard to
these financial statements relates to the revenue recognition on
long-term contracts.
Cash Flow Information
Cash paid for interest during 1995, 1994 and 1993 was
approximately $2,100,000, $2,900,000 and $3,351,000, respectively.
No income taxes were paid in 1995 and 1994. Cash paid for income
taxes during 1993 was approximately $171,000, which amount was
refunded in 1994.
Earnings (loss) per common share
Earnings (loss) per common share is computed using the
weighted average number of shares outstanding during each year
(14,760,586 in 1995, 14,523,485 in 1994 and 14,507,023 in 1993).
The effect of stock options and warrants on the computations for
1995, 1994 and 1993 were not included as they were antidilutive.
Note 2 - DISCONTINUED OPERATIONS
On February 16, 1996, the Company sold substantially all of
the assets of Bright Star Industries, Incorporated for $5,500,000
in cash, plus the assumption of certain liabilities. In January
1995, the Company sold substantially all of the assets of
Associated Testing Laboratories, Inc. for $2,240,000 in cash, plus
the assumption of certain liabilities.
In April 1993, the Company sold substantially all the assets
of American Cryogas Industries, Inc. for $14,000,000 in cash, plus
the assumption of certain liabilities. This transaction resulted
in a pretax gain of $9,397,000. In March 1994, the Company sold
substantially all the assets of Douglas-Randall, Inc. and
subsequently collected its accounts receivable for an aggregate
proceeds of approximately $831,000. In October 1994, the Company
sold Chatas Glass Company, Inc. and subsequently collected its
accounts receivable for an aggregate proceeds of approximately
$290,000. In connection with the Company's plans to sell or
otherwise dispose of certain businesses, during 1993 the Company
recorded a provision for disposition of $1,800,000 to reduce the
net assets of discontinued operations to their estimated net
realizable values and to accrue for anticipated phase-out period
losses. As of December 31, 1995 and 1994, the Company's net
investment in its discontinued operations was included in current
assets.
In connection with the 1988 disposition of the Company's U.K.
Beverage Division, the Company received amounts totaling $889,000
during 1994 and $2,598,000 during 1993. As a result, the carrying
value of other assets held for disposition was reduced to zero and
$889,000 and $710,000 were recognized as gains from discontinued
operations during 1994 and 1993, respectively.
Net sales of discontinued operations for 1995, 1994 and 1993
were $11,196,000, $17,596,000 and $28,617,000, respectively.
<PAGE>
Note 3 - INVENTORIES
Inventories at
December 31, 1995 and 1994 consisted of the following:
1995 1994
(in thousands)
Raw materials and supplies $ 3,864 $ 3,930
Work in process 1,384 1,488
Finished goods 2,038 1,456
$ 7,286 $ 6,874
Note 4 - DEBT
Debt at December 31, 1995 and 1994 consisted of the following:
1995 1994
(in thousands)
Subordinated notes - 13%1 $ 7,500 $ 15,000
Subordinated notes - unamortized discount2 (65) (131)
Credit Agreements3:
Revolving credit line 3,502 2,027
Term loans 2,076 -
Note payable4 1,600 -
Term loans5 744 541
$ 15,357 $ 17,437
Continuing operations:
Current maturities,
including revolving credit line $ 11,235 $ 9,684
Long-term debt 3,458 7,753
14,693 17,437
Discontinued operations 664 -
$ 15,357 $ 17,437
(1)In December 1986, the Company issued $30 million of 13%
Subordinated Notes. The notes may be redeemed at the option of the
Company, in whole or in part, at 100% of face value. Interest is
payable semiannually. Annual sinking fund payments of 25% of the
principal amount of notes originally issued are required commencing
December 15, 1993. Through December 31, 1995, the Company had
repurchased or redeemed a total of $22,500,000 of the notes,
leaving a remaining balance outstanding of $7,500,000. The notes
are subordinated to all senior debt (as defined) of the Company.
The Indenture, under which the notes were issued, containsvarious
restrictive covenants which include, among other things, restrictions
on the payment of dividends or distributions to its
shareholders (no such cash payments or distributions may be made
as of December 31, 1995) and the maintenance of minimum consolidated
net worth (as defined) of at least $8 million. If the
Company's consolidated net worth (as defined) at the end of any
two consecutive fiscal quarters declines to less than $8 million,
the Company would be required to make an offer to purchase, on the
last day of the fiscal quarter next following such second fiscal
quarter, 25% of the aggregate principal amount of the notes then
outstanding at a purchase price equal to 100% of their principal
amount plus accrued interest. The definition of consolidated net
worth excludes costs incurred in connection with the settlement
of the Company's environmental litigation. Accordingly, as of
December 31, 1995, consolidated net worth (as defined) amounted
to approximately $12 million.
(2)The original issue discount in connection with the subordinated
notes is being amortized on a level yield basis over the term of
the notes.
(3) On October 11, 1995, the Company's five operating subsidiaries
entered into a three year $17,060,000 credit agreement ("Loan
Agreement"). The Loan Agreement provides for a $13,161,000
revolving credit line ("Revolver"), $2,149,000 of term promissory
notes ("Term Notes") and a $1,750,000 credit facility for future
capital expenditure financing. The Loan Agreement is secured by
substantially all of the Company's assets and bears interest at
a rate of one and one-half percent (1-1/2%) in excess of the prime
rate.
The Revolver allows the Company to borrow up to $13,161,000, based
upon eligible accounts receivable and inventories, as defined.
Letters of credit of up to $1,000,000 may be issued under the
Revolver ($400,000 outstanding at December 31, 1995). As of
December 31, 1995, borrowing availability under the Revolver
amounted to $4,951,000. A fee of one quarter of one percent
(1/4%) is charged on the unused portion of the Revolver. The Term
Notes amortize on a sixty month straight-line basis with a final
payment due on the termination of the Loan Agreement.
The Loan Agreement and related documents contain certain covenants
including, among others, maintenance of minimum working capital
and adjusted net worth (as defined). In the event the Loan
Agreement is repaid before maturity, the Company must pay a
prepayment penalty equal to 3% in year one, 2% in year two and 1%
in year three of the total credit facility.
The initial drawdown under the Loan Agreement of $7,449,000,
together with existing cash, was used to extinguish a revolving
credit facility at one of the Company's subsidiaries of $762,000
and to repurchase $7,500,000 face value of 13% Subordinated Notes
for $7,425,000 plus accrued interest. The repurchase of the 13%
Subordinated Notes satisfied the annual sinking fund payment due
December 15, 1995. The $75,000 gain on the repurchase was
recorded in the fourth quarter of 1995.
(4)On December 21, 1995, the Company entered into a $1,600,000
seller provided note payable in connection with the purchase of
a building and land in Chester, Connecticut. The note amortizes
on a 120 month straight-line basis, is secured by the building and
land and bears a 9% interest rate.
(5) During 1995 and 1994, the Company entered into several term
loans for the purpose of financing the acquisition of capital
equipment. These loans mature serially through 1999 and are
secured by the underlying machinery and equipment. At December
31, 1995, the average interest rate on these loans was 10.25%.
The annual maturities of the Company's long-term debt are as follows (amounts
in thousands):
Year
1996 $ 11,899
1997 821
1998 1,365
1999 136
2000 147
Thereafter 989
$ 15,357
Note 5 - PREFERRED SHARES
The Company has 1,000,000 shares of authorized and unissued
Class A Preferred Stock, without par value.
On August 9, 1988, the Company declared a dividend of one Right
for each outstanding share of its common stock. Each Right
entitles the holder to purchase one one-hundredth of a share of
a new series of Class A Preferred Stock at an exercise price of
$7.50, subject to adjustment to prevent dilution. The Rights
become exercisable 10 days after a person or group acquires 20%
or more of the Company's common stock or announces a tender or
exchange offer for 30% or more of the Company's common stock.
If, after the Rights become exercisable, the Company is party
to a merger or similar business combination transaction, each
Right not held by a party to such transaction may be used to
purchase common stock having a market value of two times the
exercise price. The Rights, which have no voting power, may be
redeemed by the Company at $.01 per Right and expire on August
8, 1998.
Note 6 - INCOME TAXES
As of December 31, 1995, approximately $105,000,000 of U.S. tax
loss carryforwards (subject to review by the Internal Revenue
Service), expiring from 1996 through 2010, were available to
offset future taxable income. The carryforwards expire as
follows (amounts in thousands):
Year
1996 $ 10,700
1997 9,400
1998 8,400
1999 8,600
2000 11,700
2001-2010 56,200
$ 105,000
In addition, approximately $1,600,000 of unused investment tax
credits were available to offset future federal income taxes
payable through 2001. As a result of a corporate revaluation
during 1984, tax benefits resulting from the utilization in
subsequent years of net operating losses and other investment
tax credit carryforwards existing as of the date of the
corporate revaluation will be excluded from the results of
operations and directly credited to additional paid-in capital
when realized. As of December 31, 1995, approximately
$28,000,000 of the Company's U.S. tax loss carryforwards and
approximately $1,600,000 of unused investment tax credits
predated the corporate revaluation.
As of December 31, 1995, deferred tax assets of
approximately $38,000,000 relating to the tax benefit of the
Company's U.S. tax loss carryforwards and unused investment tax
credits were offset by a full valuation allowance. As of
December 31, 1995, approximately $12,000,000 of deferred tax
assets predated the corporate revaluation. Subsequent
adjustments to the valuation allowance with respect to such
deferred tax assets would be directly credited to additional
paid-in capital.
The income tax provision and effective tax rate
were zero in 1995, 1994 and 1993 because the tax benefit
associated with the Company's operating losses were offset in
full by an increase in the valuation allowance.
Note 7 - PENSIONS
The Company and its subsidiaries maintain 401(k)
plans for substantially all of the Company's domestic non-union
employees. The Company also contributes to multi-employer
pension plans for certain union employees. The Company
sponsors several defined benefit pension plans which have been
terminated or frozen over the past several years. These
actions did not have any material effect on the Company's
financial statements. The assets of the Company's 401(k) plans
are held by outside fund managers and are invested in
accordance with the instructions of the individual plan
participants. The assets of the defined benefit pension plans
are managed by outside trustees and consist primarily of
guaranteed investment contracts, group annuity contracts with
insurance companies and pooled investment funds.
The Company's contributions to 401(k) plans
totaled $341,000, $203,000 and $175,000 in 1995, 1994 and 1993,
respectively. Total consolidated pension expense associated
with defined benefit pension plans and multi-employer pension
plans was $843,000, $1,045,000 and $1,022,000 in 1995, 1994 and
1993, respectively. Consolidated pension expense includes
amounts related to discontinued product lines and related plant
closings in prior years totaling $744,000, $768,000 and
$776,000 in 1995, 1994 and 1993, respectively.
Net periodic pension cost for Company sponsored
plans for 1995, 1994 and 1993 included the following
components:
1995 1994 1993
(in thousands)
Service cost - benefits earned during the year$ - $ 194 $ 284
Interest cost on projected benefit obligation 815 983 1,438
Actual return on plan assets (305) (559) (1,090)
Net amortization and deferral 221 302 249
Net periodic pension cost $ 731 $ 920 $ 881
The following table sets forth
the plans' estimated funded status at December 31, 1995 and
1994.
1995 1994
(in thousands)
Accumulated vested benefit obligation $ 17,128 $ 18,989
Projected benefit obligation $ 17,128 $ 20,218
Plan assets at fair value 9,924 13,065
Projected benefit obligation (in excess
of) less than plan assets (7,204) (7,153)
Unrecognized net (gain) loss (1,011) (1,641)
Unrecognized net obligation at January
1, 1986, net of amortization 2,388 2,689
Adjustment to recognize minimum
pension liability (1,376) (823)
Recorded pension asset (liability) $ (7,203) $ (6,928)
Assumptions used in the accounting for pension plans in 1995,
1994 and 1993 were as follows:
1995 1994 1993
Discount rate 7.25% 8.0% 7.0%
Rate of increase in compensation levelsN/A 4.0% 4.0%
Expected long-term rate of return on assets 8.0% 8.0% 8.0%
As of December 31, 1995,
the Company had accrued pension liabilities of $7,203,000, of
which $1,268,000 was included in accrued liabilities and
$5,935,000 was included in other noncurrent liabilities. As of
December 31, 1994, accrued pension liabilities were
$7,074,000, of which $741,000 was included in accounts payable
and accrued liabilities and $6,333,000 was included in other
noncurrent liabilities. The Company also had included in
accrued liabilities, accrued payroll and other employment
related accruals of approximately $3,486,000 and $1,836,000 as
of December 31, 1995 and 1994, respectively.
Note 8 - STOCK OPTIONS AND WARRANTS
Under the stock option
plans for directors, officers and key employees adopted by
shareholders of the Company, the Company was authorized to
grant nonqualified stock options to purchase shares of common
stock. The plans are administered by the Board of Directors of
the Company. Subject to the express provisions of the plans,
the Board has full and final authority to determine the terms
of options granted to key employees under the plans including
(a) the purchase price of the shares covered by each option,
(b) whether any payment will be required upon grant of the
option, (c) the individuals to whom, and the time at which,
options shall be granted, (d) the number of shares to be
subject to each option, (e) when an option can be exercised and
whether in whole or in installments, (f) whether the options
are immediately transferable, (g) whether the exercisability of
the options is subject to risk of forfeiture or other condition
and (h) whether the stock issued upon exercise of an option is
subject to repurchase by the Company, and the terms of such
repurchase. During 1993, the Company adopted and the
shareholders subsequently approved the 1993 Long-Term Incentive
Plan and the Non-employee Director Stock Option Plan under
which the Company may grant stock options, restricted stock
options, stock appreciation rights, performance awards and
other stock-based awards equivalent to up to 3,550,000 shares
of common stock. The term of the options granted during 1995,
1994 and 1993 was five years from the date of grant and such
options were immediately exercisable. The exercise price of
each option granted was equal to the market price of the
Company's common stock on the date of grant. Additional grants
may be made under the 1993 Long-Term Incentive Plan within 10
years from June 1993. Under the Non-employee Director Stock
Option Plan, on July 1 of each year commencing July 1994, the
Chairman of the Board and the Vice Chairman of the Board shall
each automatically receive an option to purchase for five years
125,000 shares of Common Stock and each other non-employee
director shall automatically receive an option to purchase for
five years 30,000 shares of Common Stock.
Transactions for 1995,
1994 and 1993 were as follows:
1995 1994 1993
Options outstanding at January 1 1,760,000 1,751,000 1,799,583
Granted 569,500 490,000 574,000
Exercised (255,000) (14,000) (27,000)
Canceled (6,000) (467,000) (595,583)
Options outstanding at December 31 2,068,500 1,760,000 1,751,000
Option price range at December 31 $.875 to $1.875
$.875 to $1.625 $.875 to
$2.81
Options exercisable at December 31 2,068,500 1,760,000 1,751,000
Options available for grant at December 31 1,997,500 2,570,000 3,060,000
In December 1990, pursuant to an
employment agreement with an officer, the Company issued
options to buy 200,000 shares of the Company's common stock at
a price of $1.375 per share for five years. These options were
exercised in 1995.
In April 1985, the Company issued
1.6 million shares of common stock at $2.50 per share in a
private placement. Under the terms of this agreement, the
agent for the purchasers received options to buy 400,000 shares
of the Company's common stock held in treasury at a price of
$2.50 per share for five years, which period was subsequently
extended by ten years.
In December 1986, the Company
issued $30 million of 13% Subordinated Notes (see Note 4)
together with detachable warrants to purchase 3,600,000 shares
of the Company's common stock at $3.50 per share for five
years, which period was subsequently extended by five years.
In addition, the Company issued 1,200,000 Underwriter's
Warrants to purchase the Company's common stock at $3.50 for
five years, which period was subsequently extended by five
years. The estimated fair market value of the warrants at the
date of issue of $2,208,000 was recorded as an increase to
additional paid-in capital, as debt discount to the 13%
Subordinated Notes and as debt issuance costs. As a result of
the issuance of certain stock options during 1987, effective
September 22, 1987, the warrant price was reduced to $3.42 and
the number of shares purchasable with each warrant was
increased to 1.024 in accordance with the terms of the warrant
agreement. On December 15, 1987, in accordance with the
automatic reset provisions of the warrant agreement, the
warrant price was reduced to $1.95 per share. During 1989,
1,586,550 warrants were exercised primarily through the
surrender of 13% Subordinated Notes. As of December 31, 1995,
a total of 3,213,450 warrants were outstanding entitling the
warrant holders to purchase an aggregate of 3,290,575 shares of
common stock at an exercise price of $1.95 per common share.
Note 9 - LEASES
The Company leases certain
property and equipment including manufacturing and office
space, vehicles, manufacturing equipment and office equipment
under operating leases that expire over the next eleven years.
Certain of these operating leases provide the Company with the
option, after the initial lease term, to either purchase the
property or renew the lease.
Minimum payments for operating
leases having initial or remaining noncancelable terms in
excess of one year are as follows (amounts in thousands):
Year
1996 $ 1,727
1997 1,578
1998 1,510
1999 1,423
2000 1,416
Remainder 5,355
Total minimum lease
payments $ 13,009
Total rent expense for all operating leases amounted to
approximately $2,005,000 in 1995, $1,907,000 for 1994, and
$1,794,000 for 1993.
Note 10 - BUSINESS SEGMENT INFORMATION
Reference is made to Item 1 - Description of Business and
Segment Information included elsewhere in this Annual Report on
Form 10-K.
Note 11 - LITIGATION
As more fully discussed under Item 3 - Legal Proceedings (and
environmental matters included therein) included elsewhere in
this Annual Report on Form 10-K, the Company is involved with
various legal proceedings, including an action brought by the
United States in 1990 against the Company and two other parties
seeking recovery of costs incurred by the Environmental
Protection Agency ("EPA") and other federal agencies in
responding to releases or threatened releases of hazardous
substances at a facility owned and operated by the Company
until early 1986. The Commonwealth of Pennsylvania intervened
as a second plaintiff in 1993, seeking recovery of costs
allegedly incurred by the Pennsylvania Department of
Environmental Protection ("PADEP") in responding to such
releases or threatened releases at the facility.
On December 20, 1994, counsel for the Company and litigation
counsel for the United States entered into an Agreement in
Principle to settle the United States' claims against the
Company and the Company's counterclaim. On October 6, 1995,
counsel for the Company, litigation counsel for the United
States and counsel for the Commonwealth of Pennsylvania
subsequently agreed on the final text of a proposed Consent
Decree. The agreed Consent Decree has been executed by the
EPA, the U.S. Department of Justice, PADEP and the Company and
was lodged with the Court on December 28, 1995. The Company
anticipates that the United States will move for entry of the
Consent Decree within the next several months. The Company
believes that the agreed Consent Decree will be subsequently
entered by the Court, although there can be no assurance of
this.
Pursuant to the Agreement in Principle, on April 6, 1995, the
Company deposited with the clerk of the Court, $4,500,000 which
will be turned over to EPA when a Consent Decree embodying the
terms of the settlement is entered by the Court. Upon entry of
the Consent Decree, the Company will make another payment to
the United States of $4,500,000, plus interest. Further
payments to the United States totaling $4,350,000, plus
interest, will be made over a six year period following the
entry of the Consent Decree. The Company will pay the
Commonwealth of Pennsylvania a total of $1,000,000. An
initial payment of $350,000 will be made to the Commonwealth
upon entry of the Consent Decree. Further payments to the
Commonwealth totalling $650,000, plus interest, will be made
over a four year period following the entry of the Consent
Decree. In the fourth quarter of 1993, the Company recorded a
liability of $14,350,000 to cover the estimated costs of
settlement.
The Company believes that it has sufficient liquidity to comply
with the anticipated settlement terms of this environmental
litigation and to enable the Company to continue to meet its
obligations to pay principal and interest in connection with
its indebtedness as well as meet its operating cash
requirements. The Company expects to fund its sinking fund
payment and the payments required in connection with the
settlement of the environmental litigation from the proceeds
from the sale of Bright Star Industries, Incorporated as well
as its available cash resources, availability under the Loan
Agreement, cash provided by operations, refinancing or
restructuring of existing subordinated notes or in conjunction
with the issuance of new debt securities and the sale, if
consummated, of one or more of its subsidiary companies. While
the Company is considering each of the foregoing, there can be
no assurance that these efforts will be successful.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE
To Publicker Industries Inc.:
We have audited in accordance with generally accepted
auditing standards, the consolidated financial statements of
Publicker Industries Inc. and subsidiary companies included in
this Form 10-K and have issued our report thereon dated
February 26, 1996. Our audits were made for the purpose of
forming an opinion on those statements taken as a whole. The
schedule listed in the index to consolidated financial
statements and schedule are the responsibility of the Company's
management and are presented for purposes of complying with the
Securities and Exchange Commission's rules and are not part of
the basic consolidated financial statements. This schedule has
been subjected to the auditing procedures applied in the audits
of the basic consolidated financial statements and, in our
opinion, fairly states in all material respects the financial
data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.
Arthur Andersen
LLP
Stamford, Connecticut
February 26, 1996
<PAGE>
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993(in thousands of dollars)
Additions
Charged to
Balance Costs and Balance
January 1 Expenses Other Deductions December 31
Year ended December 31, 1995:
Allowance for Doubtful Accounts $ 352 $ 80 $ (1) $ (192) $ 239
Year ended December 31, 1994:
Allowance for Doubtful Accounts $ 325 $ 483 $(271) $ (185) $352
Year ended December 31, 1993:
Allowance for Doubtful Accounts $ 351 $ 183 $(75) $(134) $ 325
<PAGE>
Exhibit 4.5
_______________________________________________________
PUBLICKER INDUSTRIES INC.
AND
IBJ SCHRODER BANK & TRUST COMPANY, TRUSTEE
(formerly J. Henry Schroder Bank & Trust Company)
THIRD
SUPPLEMENTAL INDENTURE
Dated as of September 1, 1995
13% Subordinated Notes Due December 15, 1996
_______________________________________________________
E-1<PAGE>
THIRD SUPPLEMENTAL INDENTURE, dated as
of September 1, 1995, between PUBLICKER INDUSTRIES INC., a
Pennsylvania corporation (the "Company"), having its executive
offices at 1445 East Putnam Avenue, Old Greenwich, Connecticut
06870, and IBJ SCHRODER BANK & TRUST COMPANY (formerly J. Henry
Schroder Bank & Trust Company) a New York banking corporation,
having its principal corporate trust office at One State
Street, New York, New York 10004 (the "Trustee").
WHEREAS, the Company and the Trustee
have executed and delivered an indenture, dated as of December
15, 1986 as supplemented by the First Supplemental Indenture,
dated as of January 27, 1988, and as supplemented by the Second
Supplemental Indenture, dated as of April 1, 1993 (the
"Indenture"), providing for, among other things, the issuance
thereunder by the Company, and the authentication and delivery
by the Trustee, of an aggregate principal amount of up to
$34,500,000 of the Company's 13% Subordinated Notes due
December 15, 1996 (the "Notes"), of which $30,000,000 aggregate
principal amount were issued;
WHEREAS, the Company has determined that
it is in its best interests to delete Section 5.03(a) of the
Indenture to remove the restrictions on the incurrence of Debt
set forth therein;
WHEREAS, Article Ten and Section 10.02
of the Indenture, permit the Company and the Trustee to enter
into a supplemental indenture with the consent of the Holders
of a majority in principal amount of the outstanding Notes for
the purpose of, among other things, supplementing the
Indenture;
WHEREAS, the Company by appropriate
corporate action has determined to amend the provisions of said
Indenture;
WHEREAS, the holders of a majority in
principal amount of the Notes have approved the proposed
amendment to the provisions of said Indenture; and
WHEREAS, all acts and proceedings
required by law, by the Indenture and by the charter and by-laws of the Company
necessary to constitute this Third
Supplemental Indenture a valid and binding agreement for the
uses and purposes herein set forth, in accordance with its
terms, have been done and taken; and the execution and delivery
of this Third Supplemental Indenture by the Company have been
in all respects duly authorized; and
WHEREAS, the foregoing recitals are made
as representations or statements of fact by the Company and not
the Trustee;
NOW, THEREFORE in consideration of the
premises hereinafter set forth and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the
Company hereby covenants and agrees to and with the Trustee as
follows:
SECTION 1. Paragraph (a) of Section 5.03 of the Indenture is
hereby deleted in its entirety.
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SECTION 2. This Third Supplemental Indenture is a supplemental
indenture within the meaning of the Indenture, and the
Indenture and this Third Supplemental Indenture shall
henceforth be read together and shall have effect so far as
practicable as though all the provisions thereof and hereof
were contained in one instrument. All references in this Third
Supplemental Indenture to Sections of the Indenture shall be
deemed to be, unless the context shall otherwise require,
references to the corresponding Sections of the Indenture, as
from time to time supplemented, modified or amended.
SECTION 3. All terms contained in this Third Supplemental
Indenture which are defined in the Indenture shall for all
purposes hereof have the meanings given to such terms in the
Indenture as from time to time supplemented, modified or
amended, unless the context otherwise specifies or requires.
SECTION 4. The Trustee hereby accepts a trust declared and
provided by this Third Supplemental Indenture, and agrees to
perform the same upon the terms and conditions contained in the
Indenture, including the terms and provisions defining and
limiting the liabilities and responsibilities of the Trustee,
which terms and provisions shall in like manner define and
limit its liabilities in the performance of the trust created
by the Indenture as hereby amended, and, without limiting the
generality of the foregoing, the Trustee has no responsibility
for the correctness of the recitals of fact herein contained
which shall be taken as the statements of the Company, and
makes no representations as to the validity or sufficiency of
this Third Supplemental Indenture and shall incur no liability
or responsibility in respect of the validity thereof.
SECTION 5. The Indenture, as supplemented and amended by this
Third Supplemental Indenture, is in all respects confirmed and
preserved. The Company further covenants, warrants and
confirms the Indenture, as supplemented and amended by this
Third Supplemental Indenture, and all the terms, covenants and
conditions thereof, in all respects and agrees to perform all
of the covenants, terms and conditions to be performed as set
forth in the Indenture and the Notes which it secures.
SECTION 6. This Third Supplemental Indenture may be executed
in any number of counterparts, each of which when so executed
shall be deemed to be an original, and all such counterparts
shall together constitute one and the same instrument.
SECTION 7. This Third Supplemental Indenture shall be
construed in accordance with and governed by the laws of the
State of New York.
IN WITNESS WHEREOF, PUBLICKER INDUSTRIES INC. has caused this Third
Supplemental Indenture to be signed and acknowledged by its
President, and its corporate seal to be affixed hereunto, and
the same to be attested by its Secretary; and IBJ SCHRODER BANK
& TRUST COMPANY has caused this
E-3
Third Supplemental Indenture to be signed and acknowledged by
one of its Assistant Vice Presidents and its corporate seal to
be affixed hereunto, and the same to be attested by one of its
Assistant Secretaries, all as of the day and year first written
above.
PUBLICKER
INDUSTRIES INC.
By
James J. Weis
President and Chief
Executive Officer
(CORPORATE SEAL)
Attest:
Antonio L. DeLise,
Vice President, Chief
Financial Officer and Secretary
IBJ SCHRODER BANK & TRUST COMPANY
By
[name]
[title]
(CORPORATE SEAL)
Attest:
[name]
Assistant Secretary
Exhibit 10.10
Consulting Arrangements between Publicker Industries
Inc.
and Messrs. Harry I. Freund and Jay S. Goldsmith
Pursuant to informal arrangements with
the Company, Mr. Freund and Goldsmith each receive annual
compensation of $325,000 per year for serving as Chairman and
Vice Chairman of the Board, respectively, and for providing
certain services below. The arrangements have indefinite terms
and are terminable at any time by either party.
Messrs. Freund and Goldsmith provide
advice and counsel to the Company on a variety of strategic and
financial matters, including business acquisitions and
divestitures, raising capital and shareholder relations.
Messrs. Freund and Goldsmith do not render any services in
connection with the day-to-day operations of the Company.
Services are provided on a less than full time basis, with the
amount of time varying depending on the activities in which the
Company is engaged from time to time. The arrangements with
the Company do not provide for a minimum amount of time to be
spent on Company matters.<PAGE>
Exhibit 21
PUBLICKER INDUSTRIES INC.
LIST OF SIGNIFICANT SUBSIDIARIES
State of Jurisdiction
Subsidiary of Incorporation
Bright Star Industries, Incorporated Delaware
Continental Distilling Corporation Delaware
Fenwal Electronics, Inc. Delaware
Greenwald Industries, Inc. Delaware
Hanten Acquisition Co. Delaware
Kidde Systems, Inc. Delaware
LTA Disposition Corporation Delaware
Masterview Window Company, Inc. Delaware
Nevco Housewares, Inc. Delaware
Orr-Schelen-Mayeron & Associates, Inc. Minnesota
Publicker Chemical Corporation Louisiana
Publicker Gasohol, Inc. Delaware
Publicker, Inc. Delaware
Publicker Industries Inc. Pennsylvania
Rouglas-Dandall, Inc. Delaware
Sagrocry, Inc. Pennsylvania
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Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference of our reports included in this Form
10-K into the Company's previously filed Registration Statement
on Form S-1 File No. 33-9344, Registration Statement on Form
S-3 File No. 33-9344, Registration Statement on Form S-8 File No.
33-26386, Registration Statement on Form S-8 File No. 33-56838
and Registration Statement on Form S-8 File No. 33-88876.
Arthur Andersen LLP
Stamford, Connecticut
May 13, 1996
E-6
