FORM 10-K
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
Part III, Items 10, 11, 12, and 13 are incorporated by reference from the
registrant's definitive proxy statement to be filed pursuant to Regulation
14A for the 1996 Annual Meeting of Shareholders.<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 the assets of Associated Testing
Laboratories, Inc. ("ATL") for $2,240,000 in cash, plus the assumption of
certain liabilities. ATL has been reflected in the consolidated
financial statements as a discontinued operation.
Sale of Bright Star Industries, Incorporated
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. 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 annual 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. Competition 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, Chief Executive
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
fo 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.
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
foreseeable 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.
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 indebtedness 14,693 17,437
22,082 25,557 26,097
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.
* Restated for discontinued operations.
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 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 of $48,509,000
decreased by approximately 3% from $49,892,000 in 1994. The decrease
in cost of sales 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 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 of $49,892,000
increased by approximately 14% from $43,764,000 for 1993. The increase
in cost of sales 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 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.
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 information called for by this Item is hereby incorporated by
reference from the Company's definitive proxy statement to be filed
pursuant to Regulation 14A for the 1996 Annual Meeting of Shareholders.
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
The information called for by this Item is hereby incorporated by
reference from the Company's definitive proxy statement to be filed
pursuant to Regulation 14A for the 1996 Annual Meeting of Shareholders.
ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information called for by this Item is hereby incorporated by
reference from the Company's definitive proxy statement to be filed
pursuant to Regulation 14A for the 1996 Annual Meeting of Shareholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information called for by this Item is hereby incorporated by
reference from the Company's definitive proxy statement to be filed
pursuant to Regulation 14A for the 1996 Annual Meeting of Shareholders.
<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 Registrants 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 Registrantand 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.********
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 1, 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 1, 1996
By: /s/ JAMES J. WEIS
James J. Weis, President,
Chief Executive
Officer and
Director
Date March 1, 1996
By: /s/ ANTONIO L. DELISE
Antonio L. DeLise, Vice
President, Chief Financial
Officer, Secretary and
Principal Financial and
Accounting Officer
Date March 1, 1996
By: /s/ CLIFFORD B. COHN
Clifford B. Cohn,
Director
Date March 1, 1996
By: /s/ HARRY I. FREUND
Harry I. Freund,
Director
Date March 1, 1996
By: /s/ JAY S.
GOLDSMITH
Jay S. Goldsmith,
Director
Date March 1, 1996
By: /s/ DAVID L. HERMAN
David L. Herman,
Director
Date March 1, 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
<PAGE>
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.
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)
Net sales $ 66,290
$ 64,462 $ 56,626
Costs and expenses:
Cost of sales 48,509
49,892 43,764
Selling expenses 4,219 4,244
3,582
General and administrative expenses 11,319
10,201 9,653
64,047
64,337 56,999
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):
Continuing 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 Amount Capital 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.
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 138 693 (501)
Net cash provided by (used in)
discontinued operations 681 1,668 575
Net cash provided by (used in)
operating activities (1,851) (981) (3,240)
Cash flows from investing activities:
Proceeds from sale or other disposition of discontinued operations
(net) 2,240 1,343 16,844
Capital expenditures (3,368) (1,570)
(1,107)
Net cash provided by (used in)
investing activities (1,128) (227) 15,737
Cash flows from financing activities:
Repurchase or redemption of 13% Subordinated Notes
(7,425) (6,774) (3,330)
Proceeds from term and revolving loan financing (net)
4,691 2,568 -
Proceeds from the issuance of common shares 313
13 25
Net cash provided by (used in)
financing activities (2,421) (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, contains various 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.
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 levels N/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 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
_______________________________________________________<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.
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 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<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
<PAGE>
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
March 1, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1994
<PERIOD-END> DEC-31-1995 DEC-31-1994
<CASH> 874,000 6,274,000
<SECURITIES> 0 0
<RECEIVABLES> 9,170,000 9,990,000
<ALLOWANCES> 239,000 352,000
<INVENTORY> 7,286,000 6,874,000
<CURRENT-ASSETS> 27,065,000 30,541,000
<PP&E> 11,302,000 8,057,000
<DEPRECIATION> 3,595,000 2,605,000
<TOTAL-ASSETS> 45,190,000 45,300,000
<CURRENT-LIABILITIES> 32,583,000 23,625,000
<BONDS> 3,458,000 7,753,000
<COMMON> 1,541,000 1,495,000
0 0
0 0
<OTHER-SE> (4,135,000) (4,111,000)
<TOTAL-LIABILITY-AND-EQUITY> 45,190,000 45,300,000
<SALES> 66,290,000 64,462,000
<TOTAL-REVENUES> 66,290,000 64,462,000
<CGS> 48,509,000 49,892,000
<TOTAL-COSTS> 48,509,000 49,892,000
<OTHER-EXPENSES> 16,434,000 14,771,000
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 2,181,000 3,063,000
<INCOME-PRETAX> (834,000) (3,264,000)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (834,000) (3,264,000)
<DISCONTINUED> 543,000 975,000
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (291,000) (2,289,000)
<EPS-PRIMARY> (.02) (.15)
<EPS-DILUTED> (.02) (.15)
</TABLE>
