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FORM 10 - K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________
(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
COMMISSION FILE NUMBER 0-15582
MINUTEMAN INTERNATIONAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS ARTICLES OF INCORPORATION)
ILLINOIS 36-2262931
- - --------------------------------------------------------------------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
111 SOUTH ROHLWING ROAD, ADDISON, ILLINOIS 60101
- - --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 708-627-6900
Securities registered pursuant to Section 12(g) of the Act:
Common stock, no par value
(TITLE OF EACH CLASS)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 of 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. X Yes ____ No
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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 [ ].
The aggregate market value of the voting stock held by
non-affiliates of the registrant as of March 1, 1996:
Common stock, no par value, $ 6,277,000
- - ---------------------------------------
The number of shares outstanding of the issuer's class of
common stock as of March 1, 1996:
Common stock, no par value, 3,568,385 shares
- - ---------------------------------------------
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report for the year ended December 31,
1995, are incorporated by reference into Parts I and II.
Portions of the Proxy Statement for the Annual Shareholders
Meeting to be held April 12, 1996, are incorporated by reference into Part III.
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PART I
Item 1. BUSINESS
General Development of Business
Minuteman International, Inc. an Illinois corporation incorporated in 1951 as
American Cleaning Equipment Corporation, manufactures and distributes one of
the most complete lines of commercial and industrial vacuums, floor and carpet
care, chemical cleaning and coating products and complementary accessories in
the United States and Canada. Its products are exported to countries around
the world.
Products
The Company's product line consists of hard surface floor care equipment,
carpet care and maintenance products, sweepers, scrubbers, commercial and
industrial specialized vacuums, and complementary accessories. Included in the
specialized vacuum area are the hazardous location/explosive environment
vacuums and the clean/room nuclear vacuums.
Multi-Clean, the chemical division of Minuteman International, Inc. formulates,
manufactures and distributes over 65 chemical cleaning and floor coating
products including multi-surface cleaners and degreasers, finishes and waxes,
carpet care products, concrete and wood coatings and finishes, plus a full
array of specialized chemicals.
Parker Sweeper Company, acquired in 1992, manufactures a full line of litter
vacuums as well as an extensive array of lawn and turf debris handling
equipment. Effective December 30, 1994, Parker Sweeper Company, formerly a
wholly-owned subsidiary, was merged into the Company.
Additional information pertaining to new products is incorporated herein by
reference on pages 8 through 13 of the 1995 Annual Report for the year ended
December 31, 1995.
Marketing and Distribution
The Company manufacturers and distributes its products throughout the world.
The distribution process in the United States is primarily through the more
than 300 active dealers and its two sales branches. The Company distributes
its products in Canada through Minuteman Canada, Inc. a wholly-owned
subsidiary. The Company sells its
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products to Hako-Werke subsidiaries in Japan, Australia and certain European
countries. Export of other products is conducted through the headquarter
office in Addison, Illinois. Sales to affiliated and unaffiliated customers in
foreign countries aggregated to $11,063,000, $9,037,000 and $8,518,000 in 1995,
1994 and 1993, respectively. The Company's equipment is sold under Minuteman
International, Minuteman and Parker Sweeper trade names. The chemical cleaning
and coating products are manufactured by Minuteman International, Inc. and
sold under Multi-Clean trade name. Substantially all of the Company's
commercial equipment is manufactured at its Illinois production facilities in
Addison and Hampshire. All of the Company's industrial equipment is imported
from Germany. All of the Company's chemical cleaning and coating products are
produced at its Shoreview, Minnesota facility.
The manufacture, production and demand for the Company's products and services
are not considered to be seasonal in nature. No part of the Company business
depends on any one single customer, the loss of which would adversely affect
the Company. The Company does not believe any material portion of its business
to be subject to renegotiation of profits or termination of contracts at the
election of the Government.
Raw Materials
The Company purchases castings, electric motors, cord sets, switches, brushes,
wheels, injection molded plastics, sheet steel, paint pigment, chemicals and
other raw materials from a number of suppliers. The Company considers its
ability to obtain raw materials and supplies to be readily available. It does
not believe that the loss of any supplier would adversely affect the Company's
business.
Competition
Minuteman International, Inc. competes with many regional, national and
international manufacturers throughout the industry. These competitive markets
include industrial and plant maintenance, sanitation supply, critical filter,
floor coating and chemical fields. The principal competitive factors within
each of these markets are product quality, reliability, service and fair price.
The Company believes it will continue to compete effectively in the marketplace
and continue its sales growth in the future.
Patents and Trademarks
Currently, the Company has 25 United States and 14 international patents.
Although the Company generally seeks to obtain patents where appropriate, it
does not consider the successful conduct of its business in general to be
dependent on any of its patents or patent applications. By agreement dated
March 1, 1994, with Hako-Werke, the Company agreed to discontinue the use of
the "Hako" trademark on any products intended for sale in any country. It was
further agreed that the Company and Hako-Werke would be free to market and
distribute each of their products throughout the world, however, Hako-Werke
would not export products bearing the trademark "Hako" into North America
before April 30, 1996.
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Minuteman International, Inc. is owner of the United States and Canadian
registrations for the Multi-Clean and Parker Sweeper trade names. The
Minuteman trademark is registered in the United States and Canada. The Parker
trademark is registered in the United States and Canada.
Working Capital
The Company had working capital of $17.1 Million at December 31, 1995. Cash,
cash equivalents and short term investments represented 6.4% of the working
capital which when not in use, is invested in bank certificates of deposit,
Eurodollar certificate investments, a managed portfolio of high quality,
variable rate notes and tax exempt seven day bonds.
Backlog
The Company's backlog of orders was approximately $3.1 Million at December 31,
1995, as compared with approximately $3.0 Million at December 31, 1994. The
Company anticipates that substantially all of the 1995 backlog will be
delivered during 1996. In the opinion of Management, fluctuations in the
amount of its backlog are not necessarily indicative of intermediate or
long-term trends in the Company's business.
Research and Development
The Company expended approximately $1,085,000, $861,000 and $749,000 in
research and development activities during 1995, 1994 and 1993, respectively.
Employees
The Company has 264 full time employees. The facilities in Addison, Illinois
and Shoreview, Minnesota, have approximately 114 hourly paid employees who are
covered by local collective bargaining agreements. These agreements expire in
May 1998 and October 1998, respectively. The Company believes that the current
employee relations are excellent. The Company plans to hire additional
employees during 1996 as are justified by the needs of the business.
Environmental Matters
The Company's operations are subject to various federal, state and local laws
and regulations regarding the environmental aspects of the manufacture and
distribution of chemical components. The Company believes that it is currently
in compliance in all material respects with the environmental laws and
regulations affecting its operations. Capital expenditures for the purpose of
environmental protection are not expected to be material in amount for 1996 or
thereafter.
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Item 2. PROPERTIES
The Company owns or leases the following properties in its operations:
<TABLE>
<CAPTION>
Owned
Location Size (sq. ft.) Use or Leased
- - ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Addison, IL 112,230 (Bldg.) Office, manufacturing
254,300 (Land) Warehouse, sales, service Owned
Villa Park, IL 6,135 (Bldg.) Warehouse, sales, service Leased
Hampshire, IL 100,000 (Bldg.) Manufacturing, warehouse Owned
871,200 (Land) Owned
St. Paul, MN 51,350 (Land) Vacant Land Owned
Shoreview, MN 34,952 (Bldg.) Office, manufacturing,
133,830 (Land) Warehouse, sales, service Owned
Glendale, CA 7,320 (Bldg.) Warehouse, sales, service
15,000 (Land) Owned
Dollard Des Ormeaux,
Quebec 9,000 (Bldg.) Warehouse, sales, service Leased
Mississauga, Ontario 5,120 (Bldg.) Warehouse, sales, service Leased
</TABLE>
Approximately 90% of the Company's Addison and Hampshire, Illinois facilities
and 85% of the Company's Shoreview, Minnesota facility are devoted to
manufacturing.
In October, 1993, the Company purchased 20 acres of vacant land in Hampshire,
Illinois. In July of 1994, a 50,000 square foot facility was completed and was
fully operational in December 1994 when manufacturing of Parker Sweeper
products were relocated from the former Springfield, Ohio location. In August
of 1995 a 50,000 square foot addition to this facility was completed. With the
acquisition of this property, the Company anticipates expanding the services
currently provided.
The Villa Park, Illinois lease term expires December 31, 2000. The Dollard des
Ormeaux, Quebec lease term was renewed through December 31, 1997. The
Mississauga, Ontario lease term expires on January 31, 1998. The Company
believes that failure to obtain the renewal of any lease would not have a
material adverse effect on its business.
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During 1994 the Company sold a portion of the St. Paul manufacturing facility
and recognized a gain on the sale. The Company sold the remaining portion of
this facility in January 1996 for a gain.
Item 3. LEGAL PROCEEDINGS
The Company is a party to various legal proceedings arising in the ordinary
course of its business. The outcome of these matters will not, in the opinion
of Management, have a material adverse effect on the business or financial
condition of the Company.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of the fiscal year ended December 31, 1995, the
Company did not submit any matter to a vote of shareholders through the
solicitation of proxies or otherwise.
Part II
Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS
Common stock market prices and dividends on page 22 of the Annual Report for
the year ended December 31, 1995, are incorporated herein by reference.
Item 6. SELECTED CONSOLIDATED FINANCIAL DATA
The Selected Consolidated Financial Data on page 22 and the Notes to
Consolidated Financial Statements on pages 19 through 21 of the Annual Report
for the year ended December 31, 1995, are incorporated herein by reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
"Management's Discussion and Analysis of Results of Operations and Financial
Condition" on pages 14 and 15 of the Annual Report for the year ended December
31, 1995, are incorporated herein by reference.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements included on pages 16 through 18 and the
Notes to Consolidated Financial Statements on pages 19 through 21 of the Annual
Report for the year ended December 31, 1995, are incorporated herein by
reference.
Quarterly Results of Operations on page 21 of the Annual Report for the year
ended December 31, 1995, is incorporated herein by reference.
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Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no changes in or disagreements with the Company's auditors on
accounting and financial disclosure.
Part III
Item 10. DIRECTORS AND OFFICERS OF THE COMPANY
The information contained on pages 2 through 4 of Minuteman International,
Inc.'s Proxy Statement dated March 15, 1996, with respect to directors and
executive officers of the Company is incorporated herein by reference in
response to this item.
Item 11. EXECUTIVE COMPENSATION
The information contained on pages 5 and 6 of Minuteman International Inc.'s
Proxy Statement dated March 15, 1996, with respect to Executive Compensation
and transactions, is incorporated herein by reference in response to this item.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The information contained on page 2 of Minuteman International Inc.'s Proxy
Statement dated March 15, 1996, with respect to security ownership of certain
beneficial owners and management, is incorporated herein by reference in
response to this item.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information contained on pages 2 through 7 of Minuteman International
Inc.'s Proxy Statement dated March 15, 1996, with respect to certain
relationships and related transactions, are incorporated herein by reference in
response to this item.
Part IV.
Item 14. EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULE AND
REPORTS ON FORM 8-K
(a) (1. and 2.) Financial Statements
The financial statements listed in the accompanying index to financial
statements are filed herewith.
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(a) (3) and (c) Exhibits
The Exhibits required by Item 601 of Regulation S-K and filed
herewith are listed in the Exhibit Index which follows the
financial statements and immediately precedes the exhibits filed.
(b) Reports on Form 8-K
No Reports on Form 8-K were filed in the fourth quarter of 1995;
(d) Financial Statement Schedule
The financial statement schedule listed in the accompanying index to
financial statements is filed herewith.
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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.
Minuteman International, Inc.
-----------------------------
(Registrant)
Date: March 15, 1996 By: Jerome E. Rau
-----------------------------
Jerome E. Rau, President and
Chief Executive Officer
By: Thomas J. Nolan
-----------------------------
Thomas J. Nolan,
Chief Financial Officer,
Secretary and Treasurer
Pursuant to the requirements of the Securities and 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 date indicated.
Jerome E. Rau
- - -----------------------------------
Jerome E. Rau
President, Chief Executive Officer,
and Director
Tyll Necker
- - -----------------------------------
Tyll Necker, Director
Frederick W. Hohage
- - -----------------------------------
Frederick W. Hohage, Director
Frank Reynolds
- - -----------------------------------
Frank Reynolds, Director
James C. Schrader
- - -----------------------------------
James C. Schrader, Jr. Director
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ANNUAL REPORT ON FORM 10-K
ITEM 14(a) (1) AND (2), (c) and (d)
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENTS SCHEDULE
CERTAIN EXHIBITS
FINANCIAL STATEMENT SCHEDULE
YEAR ENDED DECEMBER 31, 1995
MINUTEMAN INTERNATIONAL, INC.
ADDISON, ILLINOIS
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REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
Minuteman International, Inc.
We have audited the accompanying consolidated balance sheets of Minuteman
International, Inc. and subsidiaries as of December 31, 1995 and 1994 and the
related consolidated statements of income, shareholders' equity, and cash flows
for each of the three years in the period ended December 31, 1995. Our audits
also include the financial statement schedule listed in the Index at Item
14(a). These financial statements and schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and schedule 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 consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Minuteman International, Inc. and subsidiaries at December 31, 1995 and 1994,
and consolidated 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. Also, in our opinion, the related
financial statements schedule, when considered in relation to the basic
financial statements taken as a whole, present fairly in all material respects
the information set forth therein.
Ernst & Young LLP
Ernst & Young LLP
Chicago, Illinois
February 14, 1996
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ITEM 14(a) (1) AND (2)
LIST OF FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULE
MINUTEMAN INTERNATIONAL, INC. AND SUBSIDIARIES
December 31, 1995
The following consolidated financial statements of Minuteman International,
Inc. and subsidiaries, included in the Annual Report of the Registrant to its
shareholders for the year ended December 31, 1995, are incorporated by
reference in Item 8:
Consolidated Balance Sheets - December 31, 1995
and 1994
Consolidated Statements of Income - Years ended
December 31, 1995, 1994 and 1993
Consolidated Statements of Shareholders' Equity -
Years Ended December 31, 1995, 1994 and 1993
Consolidated Statements of Cash Flows -
Years Ended December 31, 1995, 1994 and 1993
Notes to Consolidated Financial Statements
The following consolidated financial statement schedule of Minuteman
International, Inc. and subsidiaries are included in Item 14(d):
Schedule II -- Valuation and Qualifying Accounts 14
All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable, and therefore have been omitted.
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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
MINUTEMAN INTERNATIONAL, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D COL. E
Additions Deductions
----------------------------- ----------
Charged to
Balance at Charged to Other Balance
Beginning of Costs and Accounts - at End of
Description Period Expenses Describe Describe(1) Period
- - ----------- ------------ -------- -------- --------- ---------
Year Ended December 31, 1995
- - ----------------------------
<S> <C> <C> <C> <C> <C>
Reserves and allowances deducted from
asset accounts:
Allowance for uncollectible accounts $400,000 66,000 ------ 94,000 $372,000
Year Ended December 31, 1994
- - ----------------------------
Reserves and allowances deducted from
asset accounts:
Allowance for uncollectible accounts $385,000 213,000 ------ 198,000 $400,000
Year Ended December 31, 1993
- - ----------------------------
Reserves and allowances deducted from
asset accounts:
Allowance for uncollectible accounts $180,000 281,000 ------ 76,000 $385,000
</TABLE>
Note 1 --Uncollectible accounts written off, net of recoveries.
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MINUTEMAN INTERNATIONAL, INC.
EXHIBIT INDEX
(Pursuant to Item 601 of Regulations S-K)
NO. DESCRIPTION AND PAGE OR INCORPORATION REFERENCE
Certificate of Incorporation and By-Laws
3 (a) Certificate of Incorporation (incorporated herein by reference to
Exhibit 3 (a) of the Registrant's Form S-18 Registration Statement,
Registration Number 33-11858).
3 (b) By-laws (incorporated herein by reference to Exhibit 3 (b) of the
Registrant's Form S-18 Registration Statement, Registration Number
33-11858).
Instruments Defining the Rights of Security Holders,
Including Indentures
4 (a) Specimen Certificate for Common Stock, no par value (incorporated
herein by reference to Exhibit 4 of the Registrant's For S-18
Registration Statement, Registration Number 33-11858).
Material Contracts
10 (a) Employment Agreement dated as of January 20, 1987, between the
Company and Jerome E. Rau (incorporated herein by reference to
Exhibit 10 (a) of the Registrant's Form S-18 Registration
Statement, Registration Number 33-11858).
10 (b) Amendment to Employment Agreement dated as of February 27, 1990,
between the Company and Jerome E. Rau (incorporated herein by
reference to Exhibit 10 (h) at Page 20 of Form 10K Annual Report
for fiscal year ended December 31, 1989).
10 (c) Specimen form of Employment Agreement between the Company and its
executive officers (with the exception of the president)
(incorporated herein by reference to Exhibit 10 (c) at Page 18 of
Form 10K Annual Report for fiscal year ended December 31, 1991).
10 (d) Employment Agreement dated as of March 22, 1990, between the
Company and Michael Gravelle (incorporated herein by reference to
Exhibit 10 (d) at Page 22 of Form 10K Annual Report for fiscal year
ended December 31, 1991).
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10 (e) Agreement dated as of February 9, 1987, with respect to trademark
between the Company and Hako-Werke International GmbH (incorporated
herein by reference to Exhibit 10 (c) of the Registrant's Form S-18
Registration Statement, Registration Number 33- 11858).
10 (f) Agreement dated March 1, 1994 with respect to worldwide
distribution/marketing and trademarks between the Company and
Hako-Werke International GmbH. Incorporated herein by reference to
Exhibit 10 (f) at Page 18 of Form 10-K Annual Report for fiscal
year ended December 31, 1994.
11 Statement re. Computation of Per Share Earnings
Statement re. computation of per share earnings. See Note B of the
Notes to Consolidated Financial Statements on Page 19 of the Annual
Report for the year ended December 31, 1995 (incorporated herein by
reference).
13 Annual Report to Security Holders
The Company's Annual Report to Shareholders for the year ended
December 31, 1995, is incorporated herein by reference.
Subsidiaries of the Registrant
22 (a) Subsidiaries of the Registrant
(included herein at Page 17).
________________________________________________________________________________
Minuteman International, Inc. will furnish any of the aforementioned exhibits
indicated above to requesting security holders upon written request.
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MINUTEMAN(R)
[PHOTO]
MINUTEMAN INTERNATIONAL, INC.
1995 ANNUAL REPORT
<PAGE> 2
[PICTURE]
Performance Driven
Performance Driven -- Achievement - Value - Quality.
New Investments Focus on the New Millennium
Mission Statement
Minuteman will continue its steadfast commitment to provide superior
floor cleaning equipment and chemicals combined with a single-minded focus to
anticipate and answer our customers' needs. This commitment, combined with the
ongoing development of new and more cost effective methods of manufacturing and
product design, will keep our customers on the leading edge of floor care
technology into the next century.
<PAGE> 3
President and CEO Jerry Rau presents the year in review. PAGE 2
[PHOTO OF CEO JERRY RAU]
Expanded Hampshire plant provides increased production and capacity. PAGE 5
[PHOTO OF EXPANDED HAMPSHIRE PLANT]
Expanded paint system and parts cleaning process increases durability. PAGE 6
[PHOTO OF EXPANDED PAINT SYSTEM AND PARTS]
Carpet machines updated for wider applications. PAGE 9
[PHOTO OF CARPET MACHINES]
Multi-Clean(R) remains a front runner with 49 years of quality performance.
PAGE 12
[PHOTO OF MULTI-CLEAN]
[GRAPHIC OF 15-YEAR SUMMARY NET SALES]
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[PICTURE]
PRESIDENT'S MESSAGE
SIGNIFICANT INVESTMENTS ASSURE A LEADERSHIP ROLE
Growing acceptance in 1995 of Minuteman International's frontrunning
products continued our trend of capturing a greater share of the U.S. market as
well as expanding our role in the international arena. This strategy resulted
in an 11.5% rise in net sales to the highest level in the company's history.
The final three months of 1995 also represented the 20th consecutive quarterly
sales increase when compared with the prior-year period.
Significant investments also characterized 1995. Outlays for new plant
and machinery, expansion of research and development and improved manufacturing
methods brought important advances designed to assure a leadership role for
Minuteman far into the future.
This long-term focus on building Minuteman to be the premier provider of
floor and carpet care equipment and products can only be accomplished through
judicious expenditures that create resources to position our capabilities on
the leading edge of technology and customer service. Let me cite a few
examples.
To keep up with demand, we doubled the size of our production facility. A
second 50,000-square-foot segment of our Hampshire, Illinois plant became
operational in September, ahead of our scheduled expansion plan for this
addition. Improved manufacturing efficiencies and reduced handling costs are
just two future benefits we will receive from this expanded modern facility.
A new laser system for cutting sheet metal in more precise and efficient
ways that reduces scrap rework was added in 1995. We also debuted a more
productive paint washer unit that washes and rinses parts twice for greater
paint adhesion and longer life. At year end, our company remains debt-free,
despite this enormous building program of the last two years.
An increased number of new products or enhancements were delivered to our
customers during 1995. This loyal and dedicated group responded with enthusiasm
and energy to help us achieve our record revenues. All our products across the
board increased in sales. We are especially encouraged by
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the growth in sales of our Automatic Scrubber line, which is quieter than
competing models without sacrificing performance, has added tank capacity,
greater moisture protection for electrical components and traction drive in
most models. Our MPV Multi-Purpose Vacuum also has been well received because
it is quieter, lighter weight and more portable than competitive equipment. And
the Front Runner Series Floor Machines have won acceptance based on
affordability, interchangeable parts and fewer components.
We increased our engineering staff by 25% during the year to respond to
rising demand and to reduce turnaround time for new products. Their innovative
research and development efforts provide solutions to the requests our
distributors receive from their customers, the end users. Translating these
designs into manufactured products of high quality and reliability will be
ensured by our plans to incorporate a testing lab within the Addison, Illinois
facility in the near future.
The ISO 9001 certification was awarded to Minuteman in October, the
culmination of investments made over the past couple of years. This
quality-standard designation not only covers quality procedures in our
manufacturing processes but also for the design and development of products.
ISO 9001 verifies to our distributors Minuteman's dedication to quality, and is
essential to expanding overseas business in our continuing quest for global
markets.
[PHOTO OF JEROME E. RAU, PRESIDENT AND CEO]
DYNAMICS OF STRATEGIC PLAN DRIVE GROWTH AND PROSPERITY
On the international front, Minuteman entered five new markets in 1995,
bringing our total to 40 countries plus the United States. Foreign Sales in
1995 were up 22.4% to $11,063,000 now 24% of our total.
These and other expenses, together with the need to remain
price-competitive to expand our market share, contributed to the 6.7% decline
in operating earnings that Minuteman experienced in 1995.
Vendors increased our costs during the year on selected raw materials,
but market conditions precluded us from offsetting this additional expense with
commensurately higher prices for our products. In order to maintain our share
of the market against competitors, many of whom felt pressures to discount
prices deeply on certain product lines, we were forced to reduce some of our
prices. While this was not the case over our entire product line, the mix of
products sold with their varying levels of profitability was one of the causes
for us falling short of the record profits that we reported for 1994. The 1995
net income comparison suffered further due to the benefits received in 1994
from the successful settlement of patent infringement litigation and a gain
recognized on the sale of part of our former St. Paul manufacturing facility.
Minuteman has been serving the floor care market for 15 years, a period
long enough to establish reliable trends. We know what it takes to make this
business grow and prosper. And we know that the dynamics of the business will
favor us, as they did following industry softness in 1992, if we stay focused
on our strategic plan of increasing market share through new products, market
expansion and heightened efficiency in manufacturing operations.
With 1995's additional investments in product development, facilities
expansion, staff increases, quality assurance and wider market coverage, we
have established our leadership position in floor care as we approach the 21st
century.
Sincerely,
/s/Jerome E. Rau
Jerome E. Rau
President and
Chief Executive Officer
March 15, 1996
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[PICTURE]
FOCUSED
FUTURE
Long-Term Investments Drive A Focused Future.
It's not a coincidence that Minuteman International is well known for
setting new industry standards. In fact, our long-standing dedication to
develop high quality products precisely meshes with a steadfast determination
to remain on the leading edge of technology, production and sophisticated
distribution channels. Remaining on the leading edge means continuing to make
long-term investments that provide future value to products and distributors at
reasonable consumer prices.
INNOVATIVE NEW LASER CUTTER
THE PULSAR 1212 LASER SYSTEM -
CUSTOM DESIGNED TO ADD QUALITY
AND EFFICIENCY TO MINUTEMAN'S
PRODUCTION AND PRODUCT LINE
Introduced this year, Minuteman's innovative laser cutter was custom
designed to assist assembly lines in Minuteman's Addison Plant. This
exceptional new tool, the Pulsar 1212 by Amada Laser, is a natural choice for
Minuteman's high volume, short run production of precision sheet metal parts.
The laser cutter includes the inherent flexibility of a laser cutting machine
but delivers the through-put associated with a turret punch press. The Pulsar
1212's unique design enables efficient processing of materials without marking
surfaces and therefore reaches new levels of cutting performance. The new laser
cutter will allow Minuteman to continue providing high quality precision
equipment to customers worldwide well into the next century.
"Our strategic intent is to provide the best value in the floor cleaning
business through continued investments and improvements in the manufacturing
process, research, development and engineering stages so that our products
carry the best value for the price. In terms of productivity, features and
innovation, we really set the standard for the industry in many areas. We're
not the most expensive - we strive to be the very best value. It's really that
simple."
Jerry Rau
President
Minuteman International, Inc.
4
<PAGE> 7
VISION AND QUALITY CONTROL
GUIDE EXCEPTIONAL FORESIGHT
AT HAMPSHIRE PLANT
EXPANSION.
Consistent, innovative design and manufacturing drive Minuteman's
Hampshire Plant. The ultra-modern 100,000 sq. ft. plant, located just west of
Chicago on 20 acres of rolling countryside in Hampshire, Illinois, exemplifies
long-term vision and investment for Minuteman. The facility is custom designed
to allow for up to 200,000 sq. ft. of manufacturing space and can be expanded
as needed in 50,000 sq. ft. increments. The recent expansion in August of 1995
of an additional 50,000 sq. ft. offers greater manufacturing efficiency,
increases quality control and establishes a modern, high-tech manufacturing
base for the company well into the next century. The unique custom-designed
plant also offers greater vertical cubic foot capacity in anticipation of
storing today's large plastic components. In addition, Minuteman's response to
environmental and safety issues led to the creation of a 7-acre lake which was
developed next to the Hampshire plant to pump our own water for the indoor fire
sprinkler system.
RESEARCH AND DEVELOPMENT
FUEL PERFORMANCE.
ENGINEERING STAFF
INCREASES 25%.
INNOVATION MEANS GOOD PRODUCTS.
GOOD PRODUCTS MEAN GOOD BUSINESS.
Minuteman's acknowledged reputation for high quality, durable and
efficient products is fueled by a dedicated team of engineers and professional
designers. Over the past year, our team has increased by over 25 percent. This
experienced group will work together to compensate for new electrical standards
both domestically and internationally. In addition, these highly trained
professionals will investigate information and product suggestions gathered
from individuals and distributors around the world in order to determine the
type of products most in demand. Together, engineers and designers utilize
state-of-the-art CAD-CAM systems to bring concepts to life. Additionally,
Minuteman anticipates future plans to include a testing lab within the
Minuteman facilities in order to expedite and further control quality in the
manufacturing process.
NEW PRE-TREAT PAINT WASHER
ENSURES LASTING HIGH QUALITY FINISH
AND PREPARES MINUTEMAN TO DOUBLE
CAPACITY IN COMING YEARS.
Minuteman's new 5-unit pre-treat paint washer cleans the surface of raw
[PHOTO]
Minuteman's innovative laser cutter was custom designed to assist assembly
lines.
[PHOTO]
Consistent, innovative design and manufacturing drive Minuteman's Hampshire
Plant.
[PHOTO]
This year, our engineering team increased by over 25% to compensate for
increased product demand.
5
<PAGE> 8
metal components -- before paint application -- for longer lasting wear and
greater durability. Designed in a 5 step process, components are hung from an
overhead rail system which moves the parts through the pre-treat washer.
Beginning with the first unit -- a 160 degree wash solution -- completes a
first wash on hanging raw machined components. The second unit is a clean water
rinse to remove soap, detergent scum and materials. A third unit wash, composed
of phosphate and iron at 160 degrees, is designed to remove any oil from the
raw metal which may be remaining from the original machining process. The
fourth unit is a clean water rinse for final removal of phosphate leftovers. A
fifth and final unit dries the metal component at a temperature of 400 degrees
Fahrenheit. The exceptionally clean components are now ready for their
application of epoxy. Each cleaned part -- still hanging from the overhead rail
system -- is charged with negative ions which allows an operator to apply a
positively charged epoxy paint powder. Cleaned painted components are then run
through a combination oven at 400 degrees. This ensures a solid, long-lasting
finish on all exterior Minuteman components. In addition to providing high
quality finishes, the new pre-treat paint washer will enable Minuteman to
expand in the future by adding new ovens which will double the capacity of
their production.
ISO 9001 CERTIFICATION
DEDICATION TO EXCELLENCE.
To obtain certification and ensure continued compliance with ISO 9001
Certification requirements, Minuteman added a staff member exclusively
dedicated to maintaining and enhancing Minuteman's coveted ISO 9001
certification. Minuteman International began their quest for ISO 9001
Certification in the fall of 1994. ISO 9001 is an important and distinct
certification because it not only encompasses manufacturing but also includes
the design and development of products. Minuteman's final certification was
received in October 1995. ISO 9001 Certification presents the perfect
opportunity for Minuteman to fully demonstrate to distributors their ongoing
commitment to quality.
MINUTEMAN'S
EMPLOYEE COMMITMENT
"To produce products for the market that meet or exceed customer
expectations while continuously improving the process."
[PHOTO]
Efficient MPV(R) assembly at Hampshire plant offers room to grow.
[PHOTO]
New paint washer unit washes and rinses parts two times for greater epoxy paint
adhesion and longer part life.
Custom designed manufacturing machines comply with and enhance ISO 9001
certification.
[PHOTO]
6
<PAGE> 9
GLOBAL
DYNAMICS
Minuteman Opens New International
Markets With Finesse.
Minuteman entered five new markets in 1995. In addition, for the first
time, Europe is a major focus of development.
Plans include utilizing Minuteman's strong international experience to
maintain and build strong distribution centers while working directly with
dealers to establish strong networks of customers, facilitate on-site product
training, prepare advertising plans, set goals and follow up with progress
checks.
This commitment to the international market, educating dealers,
maintaining flawless distribution systems and concentrating on the unique needs
of foreign markets remains firm.
"From the start, our relationship with Minuteman was exceptional. They
provided us with one-to-one customer support so that any questions or concerns
we had were answered immediately...these well-designed, high quality products
are perfect for our marketplace...plus, the price is as compact as the
machine."
Thijs Ras
Director
VAT, Netherlands
CURRENT MINUTEMAN MARKETS
Argentina
Australia
Bahrain
Belgium
Brazil
Canada
Chile
China
Columbia
Costa Rica
Ecuador
Egypt
Fiji
Finland
France
Greece
Holland
Hong Kong
Iceland
Israel
Japan
North Korea
Kuwait
Malaysia
Mexico
Netherlands
New Guinea
New Zealand
Norway
Oman
Philippines
Puerto Rico
Saudi Arabia
Singapore
Spain
Sweden
Taiwan
Thailand
United Kingdom
Venezuela
7
<PAGE> 10
[PICTURE]
WINNING
PRODUCTS
WINNING PRODUCTS, VALUE AND EXCEPTIONAL QUALITY FORGE THE NEW MILLENNIUM.
Minuteman International continues to position its high quality floor care
products and cleaning chemicals as the best value on the market. This is
possible because of ongoing direct control over design, production, product
updates, innovative manufacturing technologies, distribution and quality
control systems -- all of which result in long-term lower production costs and
therefore greater value-added products.
More than ever, Minuteman is a full-line manufacturer of maintenance
products and cleaning chemicals for industrial, commercial and institutional
facilities. The added convenience brought to distributors and customers by
Minuteman, who meets all cleaning needs from products to chemicals, is clear --
quality results -- because of the ability to streamline purchasing costs
through just one vendor, timeliness in ordering and shipping and the assurance
that any concerns are answered promptly and efficiently.
"Minuteman continues to lead the market in both sales and product value
because of two simple reasons -- an excellent distribution system that
nurtures, trains and develops long-term relationships with our distributors,
and our unique ability to anticipate new market trends, develop appropriate
products and deliver them to the marketplace in a timely fashion."
GREG RAU
VICE PRESIDENT OF SALES
MINUTEMAN INTERNATIONAL, INC.
AUTOMATIC SCRUBBERS
BETTER THAN EVER, MINUTEMAN'S
TIME-TESTED SCRUBBERS CONTINUE
OUTSTANDING PERFORMANCE
Minuteman's popular new generation 260 and 320 Automatic Scrubbers
maneuver at the touch of a hand - thanks to an added traction drive - clean the
toughest floors, and are built to last. Minuteman offers a wide variety of
scrubbers - from 17"
[PHOTO]
8
<PAGE> 11
to 38" - each of which are designed to fill a specific customer need.
Innovative features set Minuteman scrubbers apart from the competition.
For example, the 320 Automatic Scrubber is specifically designed for unique
markets such as hospitals and features quiet engineering advancements that
significantly reduce the dba rating on the powerful 3-stage vacuum motor. The
320 also features 350 lbs. of brush pressure and a powerful brush speed of 320
RPM. The 32" offset brush allows you to scrub close to walls and into tight
corners while the large 26-gallon solution/recovery tank is designed to extend
the running time between dumping and refilling.
CARPET MACHINES
THE MULTI-PURPOSE VACUUM (MPV(R))
A RUGGED CLEANING "WORKHORSE"
Minuteman's carpet care equipment is designed to be user-friendly with
improved visibility and reduced fatigue. From the total care approach of the
Rugmaster and Ambassador Series to the daily dependability of the Multi-Purpose
Vacuum (MPV(R)), Minuteman's solution to carpet maintenance means manageability
and minimum operator fatigue.
Minuteman's popular MPV is the latest in engineering and performance
innovation providing maximum performance. This versatile, lightweight
dual-motor upright vacuum has added bag capacity and is available in 14" and
18" brush widths. The MPV's top-filling, easy-to-empty collection bag has
expanded capacity and is easily removed with one hand.
Minuteman's Wide Area Vacuums are ideal for big cleaning jobs by offering
a larger wide-sweeping path which cleans up to 25,000 sq. ft. per hour.
Powerful cleaning is effortless due to continuous-duty blowers and brush
motors.
FLOOR CARE MACHINES
MINUTEMAN RETAINS THE LEAD
Easy-to-use controls and fatigue-free designs characterize Minuteman's
hard floor machines. Efficient 1500, 2300 and 2600 Burnishers feature a unique
Passive Air Management System (PAMS(R)) whose patented technology takes
advantage of large volumes of air naturally set in motion by the rapidly
rotating pad. This innovative floor care
Carpet Machines -- Minuteman offers carpet care products that powerfully
extract dirt while precisely grooming carpets. -
[PICTURES]
- - - Automatic Scrubbers -- Minuteman scrubbers are available in 17" to 38" walk
behind automatic scrubbers and 34" rider scrubbers.
Floor Care Machines -- Minuteman's wide range of electric, battery and variable
speed burnishers endure demanding conditions.
Minuteman's MPV(R) multi-purpose vacuum offers the latest in engineering and
performance innovation for carpet care.
9
<PAGE> 12
equipment brings cost-savings, rugged construction, ergonomic considerations
and ease of operation to new and established markets for Minuteman.
FRONT RUNNER SERIES CONTINUES
TO BE EXCELLENT VALUE CHOICE
Introduced just over a year ago, the efficient and popular Front
Runner(TM) Series has been well received and sales are in high gear. Designed
to be competitively priced, the Front Runners retain the same high quality and
operator safety found in all Minuteman machines. The cost-saving design was
accomplished by reducing the number of component parts needed and by using the
same wheel bracket for both the 17" and 20" models. These manufacturing
improvements and ensuing cost savings are just one example of Minuteman's firm
belief in long-term investments that build a profitable and exciting future.
COMMERCIAL AND INDUSTRIAL TANK VACUUMS
DEPENDABLE 290 VACUUM SERIES
Durable and powerful tank vacuums clean with power and are built to last.
Available in a wide variety of sizes from 4 to 20 gallons, the 290 wet/ dry
tank Vacuum Series includes all Minuteman's latest patented features. Consider
that these innovative vacuums feature a self-sealing intake that ensures a
positive vacuum seal while still allowing the hose to swivel. Plus all
industrial tanks are powered by rugged Ametek Lamb(R) Motors and constructed of
either durable polyethylene or stainless steel.
705 SERIES AIR VACUUMS FEATURE
SUPER SUCTION
Super suction, non-electric Air Vacs are perfect for heavy duty
industrial use. Featuring compressed air which creates a vacuum of
exceptionally high flow and high static lift, these vacuums are capable of
lifting or moving an extensive variety of solid or liquid materials. With no
moving parts the 705 Series Air Vacs require little maintenance with continuous
service.
CRITICAL FILTER VACUUMS
MODEL CRV(TM) CLEAN ROOM VACUUM
REMOVES SURFACE CONTAMINATION
WITH CONFIDENCE
Critical Filter Vacuums require both safety and efficiency. Consider that the
Model CRV(TM) Clean Room Vacuum
[PICTURES]
Efficient and popular, the Front Runner(TM) Floor Machine series sales stay in
high gear.
Commercial Industrial Tank
Vacuums -- Ranging from 5 gallons to 55 gallons, Minuteman's tank vacuums
endure years of use.
Critical Filter Vacuums -- These specially built Minuteman vacuums clean up
critical waste and a variety of hazardous materials.
10
<PAGE> 13
was specifically designed for Class 1 through Class 100,000 cleanrooms,
pharmaceutical labs, gowning areas, air showers, biological labs and computer
rooms.
Minuteman's absolute filtration system includes a dual layer disposable
paper bag, a non-woven cloth filter and a standard U.L.P.A. (Ultra Low
Particulate Air) filter, 99.999% efficient at 0.12 microns -- an efficiency
much greater than normal H.E.P.A. (High Efficiency Particulate Air) filters.
Plus, a powerful 1.2 hp motor supplies ample suction at a constant airflow with
a sound rating of only 65 dba.
ADDITIONAL CRITICAL FILTER VACUUMS
Critical Filter Vacuums are specially designed by Minuteman for easy use,
come in a wide variety of sizes, and are created specifically for hazardous
waste applications. Popular critical filter vacuums include the X829 Vacuum
Series with powerful H.E.P.A. filter wet/dry vacuums which deliver safe,
affordable waste removal. Among these vacuums are the Explosion-Proof Vacuum
for the containment of flammable materials and the Mercury Recovery Vacuum
Series for handling and disposing of mercury and mercury vapor.
PARKER SWEEPER
LAWN SWEEPERS ARE ALL STARS
Parker Sweeper, located at Minuteman's Hampshire plant, adds diversity
and variety to the Minuteman product line.
Parker Sweeper's wide variety of walk-behind litter and lawn sweepers are
just a few examples of the strength these reliable products bring to Minuteman.
The popular Parker Vac-35(R) and Scavenger(R) line of walk-behind litter
vacuums and the Estate Master(R) are very successful. Eight models of the
Vac-35 accommodate a wide variety of applications with features like the
exclusive Spin Pak(R) deflector that actually packs debris down into the bag to
allow a greater degree of fill. All models are designed to improve operator
comfort, reduce user strain, and deliver cost-efficient performance.
The entire line of products offered by Parker to grounds maintenance
professionals also includes power rakes, lawn sweepers, dethatchers, blowers,
tillers and portable truck loaders.
The CRV (TM) clean room vacuum ensures compliance with safety and
quality standard codes for critical environments.
[PHOTO]
Parker Sweeper Litter Vacuums -- Outdoor cleanup is a breeze with the powerful
and proven line of Parker litter vacs and Minuteman sweepers.
[PHOTO]
The Estate Master(R) keeps pro
ball fields, such as Comiskey Park in Chicago, looking great.
[PHOTOS]
11
<PAGE> 14
STRONG SALES AND
PRODUCT DEVELOPMENT
DRIVE MULTI-CLEAN(R)
START TO FINISH, MINUTEMAN
DELIVERS QUALITY PRODUCT
Consistent with the Minuteman standard for providing high quality
products is the Multi-Clean state-of-the-art research and development lab.
Here, chemists formulate and engineer maintenance chemicals specifically
designed to work with Minuteman machines. This innovative division of Minuteman
brings 49 years of experience to a line of cleaners that successfully addresses
the needs of customers, cleaning contractors and governmental agencies.
NEW PRODUCTS AND EQUIPMENT KEEP
MULTI-CLEAN A FRONT RUNNER
New test equipment has been added to our modern floor care research and
development lab called a Snell Capsule. Used to quantitatively evaluate the
durability of floor finishes and coatings, the capsule is effective for testing
black mark and scuff resistance of finishes.
In addition, the Multi-Blend Chemical Proportioning System is proving to
be an extremely strategic product for a wide variety of customers such as
schools, post offices, retail stores, hospitals, nursing homes, manufacturing
plants and others.
New products continue to place Minuteman and Multi-Clean at the
forefront. One of the newest projects is a
Multi-Clean(R) offers a wide variety of products for all floor types including
resilient tile, hard floors, carpet, concrete and wood.
[PHOTO]
Minuteman International, Inc. -- Exceptional Sales Performance.
LEADERSHIP
[PHOTO]
12
<PAGE> 15
Meat Room Sanitation Program. Products include a high foam degreaser,
sanitizer, dish wash soap and hand sanitizing soap as well as an instruction
manual. When finished, it will provide the distributor a sanitation package for
meat room, seafood department and delicatessen sanitation.
MINUTEMAN INTERNATIONAL LEADS INDUSTRY IN FLOOR CARE TECHNOLOGY
Multi-Clean offers a wide variety of products for all types of floors
including resilient tile, hard floors, carpet, concrete and wood. The full line
of innovative, convenient, high quality products with user-friendly labeling
and industry standard Bag-in-Box packaging confirms Minuteman International's
lead in floor care technology.
A LEADERSHIP VOICE
FOR THE ISSA
The ISSA Show, run by the International Sanitary Supply Association, is the
industry's most vital trade show and serves as a conduit for communication and
business contacts between customers, distributors, manufacturers and
wholesalers. Jerry Rau, President & Chief Executive Officer of Minuteman
International, was recently elected Vice President/President-Elect of this
important organization. The position offers Jerry, the first equipment
manufacturer to lead the association since 1959, the opportunity to fulfill
several critical goals for both the floor cleaning industry and Minuteman
International, Inc. Among Jerry's goals are marketing, building and enhancing
the ISSA for greater exposure to new markets, developing active ISSA
representation for chemical and equipment manufacturers faced with continuous
regulations, and developing new educational opportunities which offer members
new ways to enter and take advantage of new markets and products. The highly
visible position will allow Jerry to bring over 29 years of direct industry
experience to the association and its members.
". . . You (Jerry) will become the first Vice President/President Elect
from the equipment sector of the
Association since. . .1959. . . thus you have much to be proud. . .Since the
conclusion of WWII only five other equipment manufacturers have been
represented on the Association's Board of Directors. . . Good luck!"
Jack Ramaley
Past Executive Vice President
of the ISSA for 15 years -
ongoing ISSA consultant
John Garfinkel, Executive Director of the ISSA, speaks to the membership at a
recent meeting.
[PHOTO]
Minuteman's presence at the 1995 ISSA show in Atlanta, Georgia was very
impressive.
[PHOTO]
13
<PAGE> 16
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
EARNINGS
Net Income for the year 1995 was $2,824,000 or $.79 per share compared with
$3,203,000 or $.90 per share.
The downward pressure on margins in 1995 caused by price concessions
necessary to remain competitive and maintain our market share contributed to
this decline. Profits were adversely affected further due to the significant
commitments made to long term projects such as ISO certification, expansion of
our research and development department and the completion of the second 50,000
square foot phase of our new manufacturing plant in Hampshire, Illinois. It is
anticipated that all of these will provide benefits in the years to come. The
benefits received in other income in 1994 due to the successful settlement of
patent infringement litigation and the sale of part of our former St. Paul
manufacturing facility likewise contributed to this decline.
SALES
Net sales increased 11.5% or $4,782,000 in 1995 compared to 1994. The Company's
commercial product line, substantially all of which is domestically
manufactured, increased $4,722,000 or 11.7% compared to 1994. This increase is
due primarily to the sales of new products, our continued expansion in overseas
markets and by strong sales to our North American dealer organization. Sales of
industrial products increased $60,000 or 4.8% for 1994.
Net sales increased 8.6% or $3,281,000 in 1994 compared to 1993. The
Company's commercial product line, substantially all of which is domestically
manufactured, increased $3,479,000 or 9.5% compared to 1993. This increase is
due primarily to the sales of new products and by strong sales to our North
American dealer organization. Sales of industrial products declined $198,000 or
13.6% from 1993.
GROSS PROFIT
As a percent to net sales gross profit decreased to 31.0% in 1995. The
aforementioned pricing pressures and long term investments coupled with an
unfavorable change in product mix accounted for this decline.
Gross profit during 1994, as a percent to net sales was 33.7%, the same as it
had been in 1993. The effects of higher volume without any current year price
increase and continued manufacturing efficiencies were offset by the start up
costs associated with our new production facility in Hampshire, Illinois.
SELLING EXPENSES
Selling expenses, as a percent to net sales, decreased from 18.9% in 1993 to
18.5% in 1994, to 18.2% in 1995. This decrease resulted primarily from
containing expenses proportionately with the increase in sales. The increase in
total expenses in 1995 was primarily attributable to additional advertising and
promotional expenses as well as additional personnel needed to better service
customer demands. In 1994 this increase was primarily the result of additional
personnel.
14
<PAGE> 17
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION (CONTINUED)
GENERAL
ADMINISTRATIVE EXPENSES
In 1995 these expenses declined 5.1% from 1994 due primarily to savings
associated with the consolidation of Parker Sweeper administrative functions.
In 1994 these expenses as a percent to sales remained the same as in 1993 at
4.9%. The increase in total expenses for 1994 was primarily attributable to
additional personnel and higher professional fees.
OTHER INCOME
In 1995 the Company's interest income decreased $19,000 due to lower
investable funds resulting from the construction of the addition to our new
manufacturing facility in Hampshire, Illinois. In 1994 interest income
increased $7,000 over the prior year due to higher interest rates earned on
lower investable funds.
In 1995 the Company incurred interest expense of $50,000 on short term debt
necessitated by the further expansion of the Hampshire manufacturing facility.
The decline in 1995 other income, as well as the increase in 1994 income over
1993 was due to the successful settlement of patent infringement litigation
against various industry competitors as well as recognizing a gain on the sale
of a part of our former St. Paul manufacturing facility during 1994.
INCOME TAXES
The effective tax rate was 31.2%, 37.4% and 38.9% for 1995, 1994 and 1993,
respectively. The decrease in the 1995 rates is caused principally by research
and development tax credits and increased benefit received from our Foreign
Sales Corporation. The decrease in the 1994 tax rate from 1993 was due
primarily to a reduction in State income taxes.
INFLATION
Inflation has not had a significant impact on the Company's business during the
past three years.
FINANCIAL CONDITION
LIQUIDITY AND CAPITAL RESOURCES
AND FINANCIAL POSITION
The Company had working capital of $17.1 million and $17.2 million at December
31, 1995 and 1994, respectively. This represented a current ratio of 6.4 for
each of those years.
Cash, cash equivalents and short-term investments represented 6.2% and 18.5%
of this working capital at December 31, 1995 and 1994, respectively. This
decline in 1995 was due primarily to financing the expansion of the Hampshire
manufacturing facility.
At December 31, 1995 and 1994, the Company had shareholders' equity of $26.1
million and $24.7 million, respectively, which when compared to total
liabilities represented an equity to liability ratio of 7.7 and 7.3,
respectively.
The Company has no debt, more than sufficient capital resources and is in a
strong financial position to meet business and liquidity needs as they arise.
The Company foresees no unusual future events that will materially change the
aforementioned summarization.
15
<PAGE> 18
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION> ------------------------------------------------
Year Ended December 31
1995 1994 1993
------------------------------------------------
<S> <C> <C> <C> <C>
Net sales . . . . . . . . . . . . . . . . . . . . . .$46,300,000 $41,518,000 $38,237,000
Cost of sales . . . . . . . . . . . . . . . . . . . . 31,957,000 27,540,000 25,357,000
----------- ----------- -----------
Gross profit . . . . . . . . . . . . . . . . . . 14,343,000 13,978,000 12,880,000
Operating expenses
Selling . . . . . . . . . . . . . . . . . . . . . 8,431,000 7,675,000 7,241,000
General and administrative . . . . . . . . . . . 1,920,000 2,024,000 1,897,000
----------- ----------- -----------
Operating expenses . . . . . . . . . . . . . . 10,351,000 9,699,000 9,138,000
----------- ----------- -----------
INCOME FROM OPERATIONS . . . . . . . . . . . . 3,992,000 4,279,000 3,742,000
Other income
Interest income . . . . . . . . . . . . . . . . . 80,000 99,000 92,000
Interest expense . . . . . . . . . . . . . . . . (50,000)
Other - net . . . . . . . . . . . . . . . . . . . 82,000 737,000 10,000
----------- ----------- -----------
Other income . . . . . . . . . . . . . . . . . 112,000 836,000 102,000
----------- ----------- -----------
INCOME BEFORE INCOME TAXES . . . . . . . . . . 4,104,000 5,115,000 3,844,000
Provision (credit) for income taxes
Current . . . . . . . . . . . . . . . . . . . . . 1,228,000 1,894,000 1,665,000
Deferred . . . . . . . . . . . . . . . . . . . . 52,000 18,000 (170,000)
----------- ----------- -----------
PROVISION FOR INCOME TAXES . . . . . . . . . . 1,280,000 1,912,000 1,495,000
----------- ----------- -----------
NET INCOME . . . . . . . . . . . . . . . . . .$ 2,824,000 $ 3,203,000 $ 2,349,000
=========== =========== ===========
Net income per common share . . . . . . . . . . . . .$ .79 $ .90 $ .66
=========== =========== ===========
</TABLE>
See notes to consolidated financial statements.
16
<PAGE> 19
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION> --------------------------------
December 31
1995 1994
--------------------------------
ASSETS
CURRENT ASSETS
<S> <C>
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . $ 812,000 $ 655,000
Short-term investments . . . . . . . . . . . . . . . . . . . . . . 258,000 2,520,000
Accounts receivable, less allowances of
$372,000 in 1995 and $400,000 in 1994 . . . . . . . . . . . . . 7,914,000 6,577,000
Due from affiliates . . . . . . . . . . . . . . . . . . . . . . . . 306,000 407,000
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,557,000 9,686,000
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . 100,000 142,000
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . 370,000 405,000
----------- -----------
TOTAL CURRENT ASSETS . . . . . . . . . . . . . . . . . . . . 20,317,000 20,392,000
PROPERTY, PLANT AND EQUIPMENT
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 942,000 942,000
Building and improvements . . . . . . . . . . . . . . . . . . . . . 6,192,000 4,921,000
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . 7,421,000 6,242,000
Office furniture and equipment . . . . . . . . . . . . . . . . . . 1,629,000 1,567,000
Transportation equipment . . . . . . . . . . . . . . . . . . . . . 879,000 785,000
----------- -----------
17,063,000 14,457,000
Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . (8,116,000) (7,036,000)
----------- -----------
8,947,000 7,421,000
OTHER ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236,000 254,000
----------- -----------
$29,500,000 $28,067,000
=========== ===========
Liabilities and Shareholders' Equity
CURRENT LIABILITIES
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,287,000 $ 1,049,000
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . 1,736,000 1,998,000
Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . 152,000 138,000
----------- -----------
TOTAL CURRENT LIABILITIES . . . . . . . . . . . . . . . . . 3,175,000 3,185,000
DEFERRED INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . . . 200,000 183,000
SHAREHOLDERS' EQUITY
Common stock, no-par value
Authorized shares - 10,000,000
Issued and outstanding shares -
3,568,385 in 1995 and 1994 . . . . . . . . . . . . . . . . . . . . 6,396,000 6,396,000
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . 19,851,000 18,454,000
Currency translation adjustments . . . . . . . . . . . . . . . . . (122,000) (151,000)
----------- -----------
26,125,000 24,699,000
----------- -----------
$29,500,000 $28,067,000
=========== ===========
</TABLE>
See notes to consolidated financial statements.
17
<PAGE> 20
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
------------------------------------------------------------------
YEARS ENDED DECEMBER 31, 1993, 1994 and 1995
Common Stock
------------ CURRENCY
NUMBER OF RETAINED TRANSLATION
SHARES AMOUNT EARNINGS ADJUSTMENTS TOTAL
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 1, 1993 . . . . . 3,568,385 $6,396,000 $15,114,000 $ (43,000) $21,467,000
Dividends (.28 per share) . . . (999,000) (999,000)
Net income . . . . . . . . . . 2,349,000 2,349,000
Translation adjustment . . . . (50,000) (50,000)
--------- ---------- ----------- --------- -----------
BALANCE AT DECEMBER 31, 1993 . . . . 3,568,385 6,396,000 16,464,000 (93,000) 22,767,000
Dividends (.34 per share) . . . (1,213,000) (1,213,000)
Net income . . . . . . . . . . 3,203,000 3,203,000
Translation adjustment . . . . (58,000) (58,000)
--------- ---------- ----------- --------- -----------
BALANCE AT DECEMBER 31, 1994 . . . . 3,568,385 6,396,000 18,454,000 (151,000) 24,699,000
Dividends (.40 per share) . . . (1,427,000) (1,427,000)
Net income . . . . . . . . . . 2,824,000 2,824,000
Translation adjustment . . . . 29,000 29,000
--------- ---------- ----------- --------- -----------
BALANCE AT DECEMBER 31, 1995 . . . . 3,568,385 $6,396,000 $19,851,000 $(122,000) $26,125,000
========= ========== =========== ========= ===========
CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------
YEAR ENDED DECEMBER 31
1995 1994 1993
---------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income . . . . . . . . . . . . . . . . . . . . . . . $ 2,824,000 $ 3,203,000 $ 2,349,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization . . . . . . . . . . . . 1,288,000 1,189,000 1,106,000
Deferred income taxes (credit) . . . . . . . . . . . . 52,000 18,000 (170,000)
Other . . . . . . . . . . . . . . . . . . . . . . . . 29,000 (58,000) (120,000)
Cash provided (used) due to changes in operating assets and liabilities:
Accounts receivable and due from affiliates . . . . . (1,236,000) (629,000) (645,000)
Inventories . . . . . . . . . . . . . . . . . . . . . (871,000) (1,366,000) (1,320,000)
Prepaid expenses and refundable income taxes . . . . . 42,000 43,000 (9,000)
Accounts payable, accrued expenses and income taxes . (10,000) 494,000 668,000
----------- ----------- -----------
NET CASH PROVIDED BY OPERATIONS . . . . . . . . . 2,118,000 2,894,000 1,859,000
INVESTING ACTIVITIES
Purchases of property, plant and equipment, net . . . . . (2,796,000) (2,657,000) (1,200,000)
Purchases of short-term investments . . . . . . . . . . . (130,000) (847,000) (461,000)
Maturities of short-term investments . . . . . . . . . . 2,392,000 1,400,000 390,000
----------- ----------- -----------
NET CASH USED IN INVESTING ACTIVITIES . . . . . . (534,000) (2,104,000) (1,271,000)
FINANCING ACTIVITIES
Dividends paid . . . . . . . . . . . . . . . . . . . . . (1,427,000) (1,213,000) (999,000)
----------- ----------- -----------
NET CASH USED IN FINANCING ACTIVITIES . . . . . . (1,427,000) (1,213,000) (999,000)
----------- ----------- -----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS . 157,000 (423,000) (411,000)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR . . . . . . . . 655,000 1,078,000 1,489,000
----------- ----------- -----------
CASH AND CASH EQUIVALENTS AT END OF YEAR . . . . . . . . . . . $ 812,000 $ 655,000 $ 1,078,000
=========== =========== ===========
</TABLE>
See notes to consolidated financial statements.
18
<PAGE> 21
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - BUSINESS INFORMATION
The Company operates primarily in one business segment, which consists of the
development, manufacture and marketing of commercial and industrial floor
maintenance equipment and related products. The Company sells to a multitude of
regional, national and international customers, primarily within the sanitary
supply industry. No single customer accounted for a significant amount of net
sales in 1995, 1994 or 1993.
The Company sells to affiliated (see Note D) and unaffiliated customers in
foreign countries. For 1995, 1994, and 1993, these sales aggregated to
$11,063,000, $9,037,000 and $8,518,000, respectively, and were principally to
customers in Canada, the Pacific Rim, the Middle East, Europe, and Latin
America.
Financial instruments which potentially subject the Company to concentrations
of credit risk consist principally of cash equivalents and trade receivables.
The Company places its cash equivalents with high credit quality financial
institutions, which are Federally insured up to prescribed limits. However, the
amount of cash equivalents at any one institution may exceed the Federally
insured prescribed limits. Concentrations of credit risks with regard to trade
receivables are limited due to the large number of customers comprising the
Company's customer base. The Company performs ongoing credit evaluations of its
customers and maintains allowances for potential credit losses which, when
incurred, have been within the range of management expectations.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company (an
Illinois corporation) and its wholly-owned subsidiaries, Multi-Clean, Minuteman
Canada, Inc. and Minuteman International Foreign Sales Corporation. Effective
December 30, 1994, Parker Sweeper Company, formerly a wholly-owned subsidiary,
was merged into the Company. Significant intercompany accounts and transactions
have been eliminated in consolidation.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
INVENTORIES
Inventories are stated at the lower of cost or market using the last-in, first-
out (LIFO) cost method for a majority (1995-80%, 1994-82%) of inventories and
the first-in, first-out (FIFO) method for the remainder. Inventories at
December 31, 1995 and 1994 consist of the following:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Inventories at FIFO cost:
Finished goods $ 4,112,000 $ 3,684,000
Work in process 7,488,000 6,362,000
Raw materials 1,017,000 1,521,000
----------- -----------
12,617,000 11,567,000
Less LIFO reserve (2,060,000) (1,881,000)
---------- ----------
Total Inventories $10,557,000 $ 9,686,000
=========== ===========
</TABLE>
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated on the basis of cost. Depreciation is
computed by both the straight line and accelerated methods for financial
reporting purposes and by the accelerated method for tax purposes.
INCOME TAXES
Income taxes have been provided using the liability method in accordance with
FASB Statement 109, Accounting for Income Taxes. Under this method deferred tax
assets and liabilities are determined based on differences between financial
reporting and tax bases of assets and liabilities, and are measured using the
enacted tax rates and laws that will be in effect when the differences are
expected to reverse.
NET INCOME PER COMMON SHARE
Net income per common share is based on the weighted average number of common
shares outstanding during each year (3,568,385 in 1995, 1994 and 1993).
FOREIGN CURRENCY TRANSLATION
The balance sheet accounts of the foreign subsidiary have been translated into
United States dollars using the current exchange rate at the balance sheet
date. Income statement amounts have been translated using the average exchange
19
<PAGE> 22
Notes to Consolidated Financial Statements (continued)
rate for the year. Gains and losses resulting from the change in exchange rates
have been classified as a separate component of shareholders' equity.
CASH EQUIVALENTS
The Company considers all bank certificates of deposit and Eurodollar
certificate investments with a maturity of three months or less when purchased
to be cash equivalents.
SHORT-TERM INVESTMENTS
Short-term investments have been categorized as available for sale and are
stated at cost which approximates fair value. Investments include certificates
of deposit, Eurodollar and treasury certificates, and a managed portfolio of
high quality liquid variable rate notes and tax exempt seven day bonds all with
domestic commercial banks.
NOTE C - SHORT TERM DEBT
In June 1995, the Company entered into an unsecured Line of Credit arrangement
for short term debt with a financial institution. Under the terms of this
agreement the Company may borrow up to $5 million on terms mutually agreeable
to the Company and financial institution. There are no requirements for
compensating balances or restrictions of any kind involved in this arrangement.
At December 31, 1995 there were no borrowings outstanding. During 1995 the
maximum and average borrowings and the weighted average interest rate on
short-term borrowings were:
<TABLE>
<S> <C>
- - ------------------------------------------
Maximum borrowings
at month end: $2,000,000
- - ------------------------------------------
Average borrowings
outstanding during year: $ 749,000
- - ------------------------------------------
Weighted average
Interest rate: 6.6%
- - ------------------------------------------
</TABLE>
NOTE D - INCOME TAXES
Deferred income taxes primarily relate to temporary differences in the
recognition of depreciation expense and other accrued expenses for financial
reporting and income tax purposes. The temporary differences between the
financial statement carrying amounts and the tax bases of assets and
liabilities that result in significant amounts of deferred taxes in the
consolidated balance sheets at December 31, 1995 and 1994 are as follows:
<TABLE>
<S> <C> <C>
1995 1994
Accounts receivable $350,000 $375,000
Property, plant & equipment (493,000) (382,000)
Accrued expenses & other 685,000 763,000
------- --------
$542,000 $756,000
======== ========
</TABLE>
The effective income tax rate on income taxes differed from the Federal
statutory rate as follows:
<TABLE>
<S> <C> <C> <C>
1995 1994 1993
Federal statutory rate 34.0% 34.0% 34.0%
State income taxes, net
of Federal tax benefit 4.3 4.5 4.8
Foreign Sales
Corporation benefit (2.7) (1.3) (1.8)
Research and Develop-
ment Tax Credits (5.2)
Other, net .8 .2 1.9
---- ---- ----
31.2% 37.4% 38.9%
==== ==== ====
</TABLE>
The Company paid income taxes of $1,208,000, $1,723,000 and $1,749,000 in
1995, 1994 and 1993, respectively. State income taxes amounted to $269,000,
$345,000 and $290,000 for 1995, 1994 and 1993, respectively. Foreign income
taxes amounted to $55,000, $17,000 and $13,000 for 1995, 1994 and 1993,
respectively.
NOTE E - RELATED PARTY TRANSACTIONS
Hako-Werke GmbH & Co. (a German corporation) owns 73.95% of the outstanding
common stock of the Company through a subsidiary.
The Company purchased inventories of approximately $578,000, $512,000 and
$586,000 from Hako-Werke in 1995, 1994 and 1993, respectively. Amounts due to
Hako-Werke, which relate to these purchases, are due within 90 days from the
date of shipment.
20
<PAGE> 23
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The Company sold approximately $2,369,000, $1,962,000 and $2,176,000 of
merchandise to Hako-Werke and certain of its subsidiaries during 1995, 1994 and
1993, respectively. Amounts due from affiliates, which relate to these sales,
are due within 90 days from the date of sale.
NOTE F - EMPLOYMENT
AGREEMENTS
The Company has employment agreements with the executive officers of the
Company which expire through 1998. The agreements contain customary provisions,
including severance pay in the event the Company terminates their employment.
NOTE G - EMPLOYEE
BENEFIT PLANS
The Company maintains a participatory defined contribution plan for
substantially all employees under Section 401(a) of the Internal Revenue Code.
In addition to a discretionary contribution, the Company also matches employee
contributions based upon a formula up to a specified maximum. Contributions to
the plan and related expense were $250,000, $207,000 and $160,000 for the years
ended 1995, 1994 and 1993, respectively.
NOTE H - QUARTERLY RESULTS
OF OPERATIONS (UNAUDITED)
The following is a summary of the quarterly results of operations for the years
ended December 31, 1995 and 1994:
<TABLE>
<CAPTION>
Three Months Ended
---------------------------------------
March June September December
31 30 30 31
- - ------------------------------------------------------------
(Thousands of dollars, except per share data)
<S> <C> <C> <C> <C>
1995
Net sales $11,869 $12,523 $11,576 $10,332
Gross profit 3,807 4,116 3,454 2,966
Net income 764 803 590 667
Net income per
common share $ .21 $ .23 $ .16 $ .19
1994
Net sales $10,269 $11,371 $10,992 $ 8,886
Gross profit 3,508 3,956 3,816 2,698
Net income 745 949 814 695
Net income per
common share $ .21 $ .26 $ .23 $ .20
</TABLE>
- - ------------------------------------------------------------
Fourth quarter adjustments, primarily related to inventories, caused net
income and net income per common share to increase by $52,000 or $.01 per share
in 1995 and $45,000 or $.01 per share in 1994.
NOTE I - RESEARCH AND
DEVELOPMENT EXPENSES
Research and development expense for 1995, 1994 and 1993, approximated
$1,085,000, $861,000 and $749,000, respectively.
NOTE J - ASSETS
HELD FOR SALE
During 1994 the Company sold a portion of a former manufacturing facility and
recognized a gain on the sale. The Company sold the remaining portion of this
facility in January 1996 for a gain.
21
<PAGE> 24
MARKETS FOR THE COMPANY'S SECURITIES AND RELATED MATTERS
On March 1, 1996 the last reported sales price of the common stock on the
Nasdaq systems was $9.25 The approximate number of holders of common stock was
1,100.
Since 1988 the Board of Directors has declared regular quarterly dividends
and the fourth quarter dividend in 1995 represents the twenty ninth consecutive
dividend paid to shareholders. Future dividend policy will be determined by the
Board of Directors in light of prevailing financial needs and earnings of the
Company and other relevant factors.
The common stock of Minuteman International, Inc. is quoted on The Nasdaq
Stock Market and its trading symbol is "MMAN". The following tables set forth
for 1995 and 1994 the range of bid prices for the Company's common stock as
reported in the Nasdaq systems for the period indicated:
<TABLE>
<CAPTION>
Dividends
Per
High Low Share
<S> <C> <C> <C>
1995
1st Quarter 11 93/8 $.10
2nd Quarter 101/2 91/2 $.10
3rd Quarter 111/4 9 $.10
4th Quarter 10 9 $.10
1994
1st Quarter 123/4 91/2 $.08
2nd Quarter 121/4 91/2 $.08
3rd Quarter 13 101/2 $.08
4th Quarter 111/2 10 $.10
</TABLE>
SELECTED CONSOLIDATED FINANCIAL DATA
See "Management's Discussion and Analysis of Results of Operations and
Financial Condition", and "Notes to Consolidated Financial Statements"
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993 1992 1991
---------------------------------------------------------
In thousands, except share and per share data
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Net sales $ 46,300 $ 41,518 $ 38,237 $ 32,659 $ 30,238
Cost of sales 31,957 27,540 25,357 21,884 19,065
-------- --------- -------- -------- --------
Gross profit 14,343 13,978 12,880 10,775 11,173
Selling expenses 8,431 7,675 7,241 6,574 6,130
General and administrative expenses 1,920 2,024 1,897 1,914 1,783
-------- --------- -------- -------- --------
Income from operations 3,992 4,279 3,742 2,287 3,260
Interest income, net 30 99 92 193 294
Other, net 82 737 10 60 219
-------- --------- -------- -------- --------
Income before income taxes 4,104 5,115 3,844 2,540 3,773
Income tax expense 1,280 1,912 1,495 929 1,270
-------- --------- -------- -------- --------
Net income $ 2,824 $ 3,203 $ 2,349 $ 1,611 $ 2,503
======== ========= ======== ======== ========
PER SHARE DATA
Cash dividends $ .40 $ .34 $ .28 $ .28 $ .23
Net income per common share .79 .90 .66 .45 .70
Weighted average number
of shares outstanding 3,568,385 3,568,385 3,568,385 3,568,385 3,590,347
BALANCE SHEET DATA
Working capital $ 17,142 $ 17,207 $ 16,745 $ 15,604 $ 15,612
Total assets 29,500 28,067 25,643 23,670 22,427
Shareholders' equity 26,125 24,699 22,767 21,467 20,966
</TABLE>
22
<PAGE> 25
REPORT OF INDEPENDENT AUDITORS
TO THE SHAREHOLDERS OF MINUTEMAN INTERNATIONAL, INC.
We have audited the accompanying consolidated balance sheets of Minuteman
International, Inc. and subsidiaries as of December 31, 1995 and 1994 and the
related consolidated statements of income, 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 consolidated financial position of Minuteman
International, Inc. and subsidiaries at December 31, 1995 and 1994, and the
consolidated 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.
/s/ERNST & YOUNG
-----------------
ERNST & YOUNG LLP
Chicago, Illinois
February 14, 1996
REPORT OF MANAGEMENT
The management of Minuteman International, Inc. is responsible for the
integrity of the information presented in this Annual Report, including the
Company's financial statements. These statements have been prepared in
conformity with generally accepted accounting principles and include, where
necessary, informed estimates and judgments by management.
The Company maintains systems of accounting and internal controls designed to
provide assurance that assets are properly accounted for, as well as to insure
that the financial records are reliable for preparing financial statements.
The systems are augmented by qualified personnel and are reviewed on a periodic
basis.
The Company maintains high standards when selecting, training, and developing
personnel, to ensure that management's objectives of maintaining strong,
effective internal accounting controls and unbiased, uniform reporting
standards are attained. The Company believes its policies and procedures
provide reasonable assurance that operations are conducted in conformity with
law and with the Company's commitment to a high standard of business conduct.
Our independent auditors, Ernst & Young LLP, conduct annual audits of our
financial statements in accordance with generally accepted auditing standards
which include the review of internal controls for the purpose of establishing
their audit scope, and issue an opinion of the fairness of such financial
statements.
The Board of Directors pursues its responsibility for the quality of the
Company's financial reporting primarily through its Audit Committee which is
composed of three outside directors. The Audit Committee meets periodically
with management and the independent auditors to review the manner in which they
are performing their responsibilities and to discuss auditing, internal
accounting controls, and financial reporting matters. The independent auditors
periodically meet alone with the Audit Committee and have full and free access
to the Audit Committee at any time.
/s/Thomas J. Nolan
-----------------------
Thomas J. Nolan
Chief Financial Officer,
Secretary & Treasurer
/s/Jerome E. Rau
----------------------------------
Jerome E. Rau
President, Chief Executive Officer
23
<PAGE> 26
[GRAPHIC]
OPERATING OFFICERS
Jerome E. Rau
President & Chief Executive Officer
Gary E. Palmer
Vice President of Engineering
Gregory J. Rau
Vice President of Sales
Thomas J. Nolan
Chief Financial Officer, Secretary & Treasurer
CORPORATE INFORMATION
General Counsel
Law Offices of Reynolds &
Reynolds, Ltd.
Chicago, Illinois
INDEPENDENT AUDITORS
Ernst & Young LLP
Chicago, Illinois
TRANSFER AGENT
Chemical Mellon Shareholder Services, L.L.C.
85 Challenger Road, Overpeck Centre
Ridgefield Park, New Jersey 07660
1-800-426-5754 Shareholders information
1-800-231-5469 TDD (Telecommunications Device for the Deaf)
STOCK LISTING
Traded over-the-counter on The Nasdaq Stock Market under the symbol "MMAN"
ANNUAL MEETING
April 12, 1996 at 10:00 a.m. at
Bank of America
231 South LaSalle Street
21st Floor
Shareholders' Meeting Room
Chicago, Illinois 60697
FORM 10-K
Minuteman International, Inc. will send a copy of its Form 10-K report for
fiscal 1995 as filed with the Securities and Exchange Commission upon written
request to Thomas J. Nolan, Chief Financial Officer, at the corporate office.
CORPORATE OFFICE
Minuteman International, Inc.
111 South Rohlwing Road
Addison, Illinois 60101
(708) 627-6900
BOARD OF DIRECTORS
[PHOTO]
JEROME E. RAU
President &
Chief Executive Officer
Minuteman
International, Inc.
[PHOTO]
TYLL NECKER
Chief Executive Officer
Hako--Werke International
GmbH & Co.
[PHOTO]
FREDERICK W. HOHAGE
President
Robert Bosch Corporation,
Sales Group
[PHOTO]
JAMES C. SCHRADER, JR.
President
Precision Enterprises, Ltd.
[PHOTO]
FRANK R. REYNOLDS
Attorney
Law Offices of
Reynolds & Reynolds, Ltd.
24
<PAGE> 27
[Graphic]
LOCATIONS
CORPORATE OFFICES AND WORLD HEADQUARTERS
Minuteman International, Inc.
111 South Rohlwing Road
Addison, Illinois 60101
(708) 627-6900
MANUFACTURING FACILITIES
Minuteman International, Inc.
111 South Rohlwing Road
Addison, Illinois 60101
(708) 627-6900
MINUTEMAN INTERNATIONAL, INC.
14N845 U.S. Route 20
Hampshire, Illinois 60140
(847) 683-5210
MULTI-CLEAN,
Division of Minuteman
International, Inc.
600 Cardigan Road
Shoreview, Minnesota 55126
(612) 481-1900
SALES OFFICES
UNITED STATES
Minuteman International, Inc.
111 South Rohlwing Road
Addison, Illinois 60101
(708) 627-6900
Parker Sweeper
111 South Rohlwing Road
Addison, Illinois 60101
(708) 627-6900
Minuteman International, Inc.
3631 San Fernando Road
Glendale, California 91204
(213) 245-7401
Minuteman International, Inc.
1190 North Villa Avenue
Villa Park, Illinois 60181
(708) 530-0007
CANADA
Minuteman Canada, Inc.
84 East Brunswick Boulevard
Dollard des Ormeaux
Quebec H9B 2C5 Canada
(514) 683-3880
MINUTEMAN CANADA, INC.
1100 Mid-Way Boulevard
Mississauga
Ontario L5T 1V8 Canada
(416) 670-1063
<PAGE> 28
[MINUTEMAN LOGO]
FRONT RUNNER OF THE INDUSTRY (SM)
MINUTEMAN INTERNATIONAL INC.
111 S. Rohlwing Rd.
Addison, Illinois 60101
Telephone: (708) 627-6900
<PAGE> 1
EXHIBIT 22 (a)
SUBSIDIARIES
OF
MINUTEMAN INTERNATIONAL, INC.
Multi-Clean Division of Minuteman International, Inc.
600 Cardigan Road
Shoreview, Minnesota 55126
Minuteman Canada, Inc.
84 E. Brunswick Boulevard
Dollard des Ormeaux
Quebec H9B 2C5 Canada
Minuteman International Foreign Sales Corporation
c/o Ernst & Young Services, Ltd.
P.O. Box 261 Bay Street
Bridgetown, Barbados
17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
LOSS PROVISION FOR DOUBTFUL ACCOUNTS IS INCLUDED IN TOTAL COSTS. INTEREST
EXPENSE IS PRESENTED NET OF INTEREST INCOME OF $34 AND $80, RESPECTIVELY.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-START> SEP-30-1995 JAN-01-1995
<PERIOD-END> DEC-31-1995 DEC-31-1995
<CASH> 812 812
<SECURITIES> 258 258
<RECEIVABLES> 8,220 8,220
<ALLOWANCES> 372 372
<INVENTORY> 10,557 10,557
<CURRENT-ASSETS> 20,317 20,317
<PP&E> 17,063 17,063
<DEPRECIATION> 8,116 8,116
<TOTAL-ASSETS> 29,500 29,500
<CURRENT-LIABILITIES> 3,175 3,175
<BONDS> 0 0
0 0
0 0
<COMMON> 6,396 6,396
<OTHER-SE> 19,729 19,729
<TOTAL-LIABILITY-AND-EQUITY> 29,500 29,500
<SALES> 10,332 46,300
<TOTAL-REVENUES> 10,332 46,300
<CGS> 7,366 31,957
<TOTAL-COSTS> 9,703 42,308
<OTHER-EXPENSES> (41) (82)
<LOSS-PROVISION> (58) 66
<INTEREST-EXPENSE> (20) (30)
<INCOME-PRETAX> 690 4,104
<INCOME-TAX> 23 1,280
<INCOME-CONTINUING> 667 2,824
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 667 2,824
<EPS-PRIMARY> .19 .79
<EPS-DILUTED> .19 .79
</TABLE>
