SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(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)
For the transition period from _______ to ________.
Commission File No. 1-1031
RONSON CORPORATION
(Exact name of registrant as specified in its charter)
NEW JERSEY 22-0743290
(State of incorporation) (IRS Employer Identification No.)
CAMPUS DRIVE, P.O. BOX 6707, SOMERSET, N.J. 08875
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (908) 469-8300
Securities registered pursuant to Section 12(g) of the Act:
Name of each exchange
Title of each class on which registered
------------------- ---------------------
Common Stock par value Nasdaq SmallCap Market
$1.00 per share
12% Cumulative Convertible Nasdaq SmallCap Market
Preferred Stock
No par value
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 [ ]
<PAGE>
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (229.505 of this chapter) 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/A
or any amendment to this Form 10-K/A. [ X ]
The aggregate market value of voting stock held by non-affiliates of the
registrant was $4,504,000 as of March 15, 1996.
As of March 15, 1996, there were 1,786,387 shares of the registrant's common
stock outstanding.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this Amendment to the Report to be
signed on its behalf by the undersigned, thereunto duly authorized.
RONSON CORPORATION
Dated: April 26, 1996 By: /s/Louis V. Aronson II
------------------------------------
Louis V. Aronson II, President and
Chief Executive Officer and Director
Dated: April 26, 1996 By: /s/Daryl K. Holcomb
------------------------------------
Daryl K. Holcomb, Chief Financial
Officer, Controller and Treasurer
<PAGE>
FORM 10-K -- ITEM 14 (a) (2) and (d)
RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES
LIST OF FINANCIAL STATEMENT SCHEDULES
The amendment includes the following schedules required for Form 10-K for the
Ronson Corporation (the "Company") and its wholly owned subsidiaries for the
fiscal year ended December 31, 1995.
Schedule I Condensed Financial Information
of Company
Schedule II Valuation and Qualifying Accounts
<PAGE>
INDEPENDENT AUDITORS' REPORT
----------------------------
The Board of Directors
Ronson Corporation:
Under date of March 5, 1996, we reported on the consolidated balance sheets of
Ronson Corporation and subsidiaries as of December 31, 1995 and 1994, and the
related consolidated statements of earnings, and cash flows for the years then
ended as contained in the annual report on Form 10-K for the year 1995. In
connection with our audits of the aforementioned consolidated financial
statements, we also audited the related financial statement schedules as listed
in the accompanying index. These financial statement schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statement schedules based on our audits.
In our opinion, the related financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly, in all material respects, the information set forth therein.
DEMETRIUS & COMPANY, L.L.C.
Wayne, New Jersey
March 5, 1996
<PAGE>
Independent Auditors' Report
----------------------------
The Board of Directors
Ronson Corporation:
Under date of April 14, 1994, we reported on the consolidated statements of
earnings, and cash flows of Ronson Corporation and subsidiaries for the year
ended December 31, 1993, as contained in the annual report on Form 10-K for the
year 1995. In connection with our audit of the aforementioned consolidated
financial statements, we also audited the related financial statement schedules
as listed in the accompanying index insofar as they relate the the year ended
December 31, 1993. These financial statement schedules are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statement schedules based on our audit.
In our opinion, the related financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly, in all material respects, the information set forth therein.
Our report dated April 14, 1994 contains an explanatory paragraph that states
that the Company incurred losses from continuing operations in each of the years
in the three-year period ended December 31, 1993 and had a working capital
deficiency at such date. The matters discussed above raise substantial doubt
about the Company's ability to continue as a going concern. The consolidated
financial statements do not include any adjustments that might result from the
outcome of these uncertainties.
KPMG Peat Marwick LLP
Short Hills, New Jersey
April 14, 1994
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
RONSON CORPORATION
- --------------------------------------------------------------------------------
CONDENSED BALANCE SHEETS
(in thousands of dollars)
DECEMBER 31,
ASSETS 1995 1994
------ -------- --------
<S> <C> <C>
CURRENT ASSETS:
Cash ................................................. $ -- $ --
Other current assets ................................. 72 78
-------- --------
Total Current Assets ............................ 72 78
Property, plant, and equipment ....................... 231 228
Less accumulated depreciation and amortization ....... 206 194
-------- --------
25 34
Other assets ......................................... 3,159 7,844
-------- --------
TOTAL ASSETS ......................................... $ 3,256 $ 7,956
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable ..................................... $ 127 $ 283
Other current liabilities ............................ 618 2,337
-------- --------
Total Current Liabilities ....................... 745 2,620
Other long-term liabilities .......................... 477 4,165
Commitments and Contingencies
STOCKHOLDERS' EQUITY:
Preferred Stock ...................................... 8 9
Common Stock ......................................... 1,821 1,768
Additional paid-in capital ........................... 30,308 30,329
Accumulated deficit .................................. (27,081) (27,721)
Unrecognized net loss on pension plans ............... (1,403) (1,595)
Cumulative foreign currency translation adjustment ... (26) (26)
-------- --------
3,627 2,764
Less cost of treasury shares:
1995, 62,087 and 1994, 62,035 common shares .... 1,593 1,593
-------- --------
2,034 1,171
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ........... $ 3,256 $ 7,956
======== ========
</TABLE>
See notes to condensed financial statements
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
RONSON CORPORATION
- --------------------------------------------------------------------------------
CONDENSED STATEMENTS OF EARNINGS
(in thousands of dollars)
YEAR ENDED DECEMBER 31,
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
Management administration (from wholly
owned subsidiaries eliminated
in consolidation) ........................... $ 1,925 $ 1,735 $ 990
------- ------- -------
Costs and expenses:
General and administrative expenses ......... 1,338 1,354 1,225
Interest expense (includes inter-
company interest expense of $38,
$31 and $124 in 1995, 1994 and
1993 respectively, eliminated in
consolidation) ............................ 76 71 165
Non-operating expense - net ................. 134 35 257
------- ------- -------
1,548 1,460 1,647
------- ------- -------
EARNINGS (LOSS) BEFORE INCOME TAXES AND
EQUITY IN NET EARNINGS OF SUBSIDIARIES ...... 377 275 (657)
Income tax benefit .............................. 81 198 1,290
Equity in net earnings of subsidiaries (includes
loss from discontinued operations of $860
and $13 in 1995 and 1993, respectively,
and gain on sale of Ronson Hydraulics of
$3,916 in 1993) ............................. 182 601 2,449
------- ------- -------
NET EARNINGS .................................... $ 640 $ 1,074 $ 3,082
======= ======= =======
</TABLE>
See notes to condensed financial statements.
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
RONSON CORPORATION
- --------------------------------------------------------------------------------
CONDENSED STATEMENTS OF CASH FLOWS
(in thousands of dollars)
YEAR ENDED DECEMBER 31,
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net earnings .................................. $ 640 $ 1,074 $ 3,082
Adjustments to reconcile net earnings
to net cash provided by (used in)
operating activities:
Equity in net earnings of subsidiaries ...... (182) (601) (2,449)
Depreciation and amortization ............... 12 21 23
Deferred income tax benefit ................. (15) (40) --
Increase (decrease) in cash from changes in:
Other current assets ...................... 23 (4) 56
Accounts payable and other current
liabilities ............................. (235) 45 85
Increase (decrease) in net advances from
subsidiaries .............................. 1,468 (1,038) 1,150
Net change in pension-related accounts ...... (1,674) 298 (1,379)
Other ....................................... (55) (123) 120
------- ------- -------
Net cash provided by (used in)
operating activities .................. (18) (368) 688
------- ------- -------
Cash Flows from Investing Activities:
Net cash used in investing activities,
capital expenditures .................. (3) (16) (3)
------- ------- -------
Cash Flows from Financing Activities:
Exercise of stock options ................... 31 4 --
Payments of preferred dividends ............. -- (92) (184)
Payments of leases .......................... (10) (14) (19)
------- ------- -------
Net cash provided by (used in)
financing activities .................. 21 (102) (203)
------- ------- -------
Net increase (decrease) in cash ............... -- (486) 482
Cash at beginning of year ..................... -- 486 4
------- ------- -------
Cash at end of year ........................... $ -- $ -- $ 486
======= ======= =======
</TABLE>
See notes to condensed financial statements.
<PAGE>
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
RONSON CORPORATION
- --------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A: Condensed Financial Statements.
The accompanying financial statements should be read in conjunction
with the consolidated financial statements of the Registrant, Ronson Corporation
(the "Company") and its subsidiaries included in the Company's Annual Report on
Form 10-K for the year 1995.
The Company's wholly owned subsidiaries in the condensed financial
statements are accounted for by the equity method of accounting.
The Company has authorized 5,000,000 shares of preferred stock with no
par value. Outstanding shares of 12% Cumulative Convertible Preferred Stock were
847,308 and 873,267 at December 31, 1995 and 1994, respectively.
The Company has authorized 11,848,106 shares of common stock with a par
value of $1.00, of which 1,758,806 and 1,705,899 were outstanding at December
31, 1995 and 1994, respectively.
NOTE B: Debt.
In 1993, the Company guaranteed the debts of one of its subsidiaries,
Ronson Aviation, Inc. ("Ronson Aviation"), to the Bank of New York, National
Community Division ("BONY/NCD"). At December 31, 1995, the total amount due to
BONY/NCD by Ronson Aviation was $456,000.
In January 1995, Ronson Consumer Products Corporation ("RCPC") entered
into an agreement with United Jersey Bank ("UJB") for a Revolving Loan of up to
$2,000,000 and a Term Loan of $225,000. The Company guaranteed the debts of RCPC
to UJB under the Revolving Loan and Term Loan. At December 31, 1995, the amount
due by RCPC to UJB under the Revolving Loan and Term Loan was $1,339,000.
In November 1995, Ronson Corporation of Canada, Ltd. ("Ronson-Canada")
entered into an agreement with Canadian Imperial Bank of Commerce ("CIBC") for a
line of credit of C$250,000. No funds had been borrowed by Ronson-Canada under
the line of credit at December 31, 1995. The line of credit is guaranteed by the
Company.
On December 1, 1995, the Company and RCPC entered into a Mortgage Loan
agreement with UJB in the amount of $1,300,000. The loan is recorded on the
books of RCPC, is secured by a first mortgage on the land, buildings and
improvements of RCPC and is payable in sixty monthly installments of $11,689,
including interest, and a final installment on December 1, 2000 of $1,152,000.
The loan bears interest at a fixed rate of 8.75%.
The Company has guaranteed the loans of Ronson Aviation from various
lenders for Ronson Aviation's purchase of specific aircraft. The guarantees
outstanding at December 31, 1995 were provided to UJB, Cessna Finance
Corporation and General Electric Capital Corporation. The total outstanding
amount of these Company-guaranteed loans to Ronson Aviation at December 31,
1995, was $2,519,000.
<PAGE>
NOTE C: Other Assets.
<TABLE>
<CAPTION>
December 31,
(in thousands)
1995 1994
------ ------
<S> <C> <C>
Investment in subsidiaries $2,829 $7,285
Intangible pension assets 186 212
Other 144 347
------ ------
$3,159 $7,844
====== ======
</TABLE>
Investment in subsidiaries is eliminated in consolidation. The Company
is amortizing the intangible pension assets in accordance with the provisions of
Statement of Financial Accounting Standards ("SFAS") No. 87.
NOTE D: Other Long Term Liabilities.
<TABLE>
<CAPTION>
December 31,
(in thousands)
1995 1994
------ ------
<S> <C> <C>
Net advances from subsidiaries $ 477 $3,609
Pension obligations -- 292
Other -- 264
------ ------
$ 477 $4,165
====== ======
</TABLE>
Net advances from subsidiaries are eliminated in consolidation. The
pension obligations are related to the Company's principal defined benefit
retirement plan.
NOTE E: Discontinued Operations
On October 6, 1993, the Company sold the assets and business of Ronson
Hydraulics. The Company received approximately $8,930,000 in cash from the sale,
net of related expenses. As a result, the operating results of Ronson
Hydraulics, which were included in Equity in Net Earnings of Subsidiaries, have
been classified as discontinued operations in all periods presented.
NOTE F: Unrecognized Net Loss on Pension Plans.
SFAS No. 87 requires that if the additional minimum liability recorded
exceeds unrecognized prior service cost and the unrecognized net obligation at
transition, that difference, an unrecognized net loss, is to be reported as a
separate component of Stockholders' Equity. This unrecognized net loss is being
amortized over future periods as a component of pension expense.
<PAGE>
NOTE G: Commitments and Contingencies.
On December 30, 1994, the Company agreed to a settlement with the
United States Department of Labor ("DOL") and on February 3, 1995, the Company
agreed to a settlement with an appellate office of the Internal Revenue Service
("IRS"), which was accepted on behalf of the Commissioner of the IRS on March 7,
1995, related to the 1991 contribution by the Company of unencumbered land in
Salisbury, North Carolina, not used in operations, to the Ronson Corporation
Retirement Plan ("Retirement Plan"). The settlements with the DOL and IRS
settled all matters arising from the IRS examination of the information return,
Form 5500, of the Retirement Plan for the years ended June 30, 1991 and June 30,
1992. Under the terms of the settlements with the IRS and DOL, the North
Carolina land previously contributed will remain in the Retirement Plan. A
consent judgment with the DOL in the amount of $855,194 was entered against the
Company, with simple interest at the rate of 4.72% per year, compounded
annually, on December 30, 1994. Payment of the judgment amount is stayed, and no
collection action will be taken unless the Company fails to make required
payments to an escrow account, described below. Further, the amount of the
judgment will be satisfied in whole, or in part, by the proceeds from the sale
of the North Carolina land by the Retirement Plan. At December 31, 1995, the
appraised value of the land was about $675,000, compared to the amount of the
judgment, including interest, of approximately $896,000 at December 31, 1995,
for a net contingent liability of the Company of approximately $221,000.
Under the terms of the settlement described above, the Company will
make annual installment payments to an escrow account which will total the
amount of the judgment, including interest, by March 15, 2000, as follows:
March 15, 1996 Interest only
March 15, 1997 $ 40,000 plus interest
March 15, 1998 $263,000 plus interest
March 15, 1999 $280,000 plus interest
March 15, 2000 $272,194 plus interest
The Trustees of the Retirement Plan have reported to the Company that
it is the Retirement Plan's intention to sell the North Carolina land prior to
March 15, 2000. If the land is sold by the Retirement Plan before March 15,
2000, to the extent that the proceeds from the sale are less than the amount of
the judgment, including interest, the funds held in the escrow account will be
transferred to the Retirement Plan to meet such shortfall. The balance will be
returned to the Company. If the North Carolina land has not been sold by the
Retirement Plan by March 15, 2000, the entire escrow account will be transferred
to the Retirement Plan, and if the Company so requests, the Retirement Plan will
transfer the North Carolina land to the Company.
On August 31, 1995, the Company received a General Notice Letter from
the United States Environmental Protection Agency ("USEPA"), notifying the
Company that the USEPA considered the Company one of about four thousand
Potentially Responsible Parties ("PRP's") for waste disposed of prior to 1980 at
a landfill in Monterey Park, California, which the USEPA designated as a
Superfund site ("Site"). The USEPA identified manifests dated from 1974 through
1979 which allegedly indicate that waste originating at the location of the
Company's former Duarte, California, hydraulic subsidiary was delivered to the
Site. The Company sold the Duarte, California, hydraulic subsidiary to the
Boeing Corporation in 1981.
As a result of successfully challenging the USEPA's original volumetric
allocation, on September 29, 1995, the USEPA reduced the volume of waste
attributed to the Duarte facility, Ronson Hydraulic Units Corporation
("RHUCOR-CA"), and determined the volume to be "de minimis". In addition,
counsel for this matter has informed the Company that factual arguments are
available that could further reduce the amount of waste attributed to the
hydraulic subsidiary, and that arguments also exist that the subsequent owners
of the facility should be required to pay a significant portion, or possibly
all, of the costs the USEPA determines to be due as a result of RHUCOR-CA's
waste having been sent to the Site.
Although the Company's final contribution amount, if any, is not yet
determinable, in the General Notice Letter, the USEPA offered to partially
settle the matter if the Company paid $212,000, which would have been full
settlement of the Fifth Partial Consent Decree. This offer, however, was made
prior to the USEPA reduction of the volume of waste allocated to RHUCOR-CA and
prior to the USEPA determination that the waste volume is "de minimis". Because
the USEPA has determined that the volume of waste generated by the facility and
sent to the Site is "de minimis", and because the USEPA has sent a General
Notice Letter to another PRP for the same waste, the Company believes that the
cost, if any, will not have a material effect on the Company's financial
position.
The Company is involved in various lawsuits. Management believes that
the outcome of these lawsuits will not have a material adverse effect on the
Company's financial position.
The Company has an employment contract with an officer. The contract
expires on December 3l, 1998. Base salaries in the years 1996, 1997 and 1998 are
$432,154, $462,405 and $494,773, respectively, and the contract provides for
additional compensation and benefits.
Largely as the result of increased cost of product liability insurance,
the Company has secured substantially smaller amounts of liability insurance
than it had purchased prior to 1987. While the Company has never settled or been
liable for claims for amounts in excess of the reduced level of coverage now
available, the present level of insurance represents a potential exposure for
the Company.
NOTE H: Income Taxes.
The Company and its domestic subsidiaries have elected to allocate
consolidated federal income taxes on the separate return method. Under this
method of allocation, income tax expenses (benefits) are allocated to the
Company and each subsidiary based on its taxable income (loss) and net operating
loss carryforward.
Effective January 1, 1993, the Company adopted SFAS No. 109,
"Accounting for Income Taxes". Under SFAS No. 109, the Company is to record a
deferred tax asset for net operating loss and credit carryforwards when the
ultimate realization is more likely than not. In 1995 and 1994, the Company and
its subsidiaries recorded net deferred tax assets of $686,000 and $354,000,
respectively, of which $15,000 and $40,000 were allocated to the Company.
NOTE I: Statement of Cash Flows.
Certificates of deposit that have a maturity of 90 days or more are not
considered cash equivalents for purposes of the accompanying condensed
statements of cash flows.
<PAGE>
<TABLE>
<CAPTION>
RONSON CORPORATION
AND ITS WHOLLY OWNED SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(in thousands of dollars )
- ------------------------------------------------------------------------------------------------------------------------------------
Column A Column B Column C Column D Column E
- ------------------------------------------------------------------------------------------------------------------------------------
Additions
-------------------------------
Balance at Charged to Charged to Balance
Beginning Costs and Other at End
Description of Period Expenses Accounts Deductions of Period
- ----------- ---------- ---------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Allowance for doubtful
accounts:
Year Ended 12/31/95 $95 $20 - $29 (1) $86
Year Ended 12/31/94 $89 $29 - $23 (1) $95
Year Ended 12/31/93 $108 $(2) - $17 (1) $89
Valuation allowance for
deferred tax assets:
Year Ended 12/31/95 $4,783 - - $881 (2) $3,902
Year Ended 12/31/94 $5,648 - - $865 (2) $4,783
Year Ended 12/31/93 $7,269 (3) - - $1,621 (2) $5,648
</TABLE>
(1) Allowance for doubtful accounts - primarily uncollectible accounts written
off.
(2) Valuation allowance for deferred tax assets - due to utilization of credits
and carryforwards, to changes in the deferred tax assets and to recognition
of net deferred tax assets in 1995 and 1994.
(3) Represents the valuation allowance at implementation of Statement of
Financial Accounting Standard No. 109, "Accounting for Income Taxes",
effective January 1, 1993.
