SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1996
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Commission File Number 1-1031
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RONSON CORPORATION
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(Exact name of registrant as specified in its charter)
New Jersey 22-0743290
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Corporate Park III-Campus Drive, P.O. Box 6707, Somerset, NJ 08875
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(Address of principal executive offices) (Zip Code)
(908) 469-8300
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(Registrant's telephone number, including area code)
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 [ ]
As of September 30, 1996, there were 1,801,834 shares of the registrant's common
stock outstanding.
<PAGE>
RONSON CORPORATION
FORM 10-Q INDEX
PART I - FINANCIAL INFORMATION:
CONSOLIDATED BALANCE SHEETS:
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
CONSOLIDATED STATEMENTS OF OPERATIONS:
QUARTER ENDED SEPTEMBER 30, 1996 AND 1995
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
CONSOLIDATED STATEMENTS OF CASH FLOWS:
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
PART II - OTHER INFORMATION:
ITEM 1 - LEGAL PROCEEDINGS
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
<PAGE>
<TABLE>
<CAPTION>
RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
----------------------------------------------------
(in thousands of dollars)
September 30, December 31,
1996 1995
------------- ------------
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash ............................................. $ 57 $ 64
Accounts receivable - net ........................ 1,899 1,940
Inventories:
Finished goods ................................. 6,078 5,501
Work in process ................................ 93 177
Raw materials .................................. 776 700
-------- --------
6,947 6,378
Other current assets ............................. 1,182 970
-------- --------
TOTAL CURRENT ASSETS ....................... 10,085 9,352
Property, plant and equipment, at cost:
Land ........................................... 19 19
Buildings and improvements ..................... 3,605 3,477
Machinery and equipment ........................ 3,357 2,995
Construction in progress ....................... 55 45
-------- --------
7,036 6,536
Less accumulated depreciation and amortization ... 4,564 4,370
-------- --------
2,472 2,166
Intangible pension assets ........................ 375 419
Other assets ..................................... 795 764
Other assets of discontinued operations .......... 702 702
-------- --------
$ 14,429 $ 13,403
======== ========
See notes to consolidated financial statements.
Continued
<PAGE>
<CAPTION>
RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS -- Continued
----------------------------------------------------
(in thousands of dollars)
September 30, December 31,
1996 1995
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(unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term debt .................................. $ 4,733 $ 4,472
Current portion of long-term debt and leases ..... 573 251
Accounts payable ................................. 1,920 1,428
Accrued expenses ................................. 2,008 2,030
Current liabilities of discontinued operations ... 738 993
-------- --------
TOTAL CURRENT LIABILITIES .................. 9,972 9,174
Long-term debt ................................... 1,301 1,728
Pension obligations .............................. 249 287
Other long-term liabilities ...................... 345 180
STOCKHOLDERS' EQUITY:
Preferred stock .................................. 8 8
Common stock ..................................... 1,864 1,821
Additional paid-in capital ....................... 30,345 30,308
Accumulated deficit .............................. (26,721) (27,081)
Unrecognized net loss on pension plans ........... (1,309) (1,403)
Cumulative foreign currency translation adjustment (31) (26)
-------- --------
4,156 3,627
Less cost of treasury shares ..................... 1,594 1,593
-------- --------
TOTAL STOCKHOLDERS' EQUITY ................. 2,562 2,034
-------- --------
$ 14,429 $ 13,403
======== ========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
------------------------------------------------------------
(in thousands of dollars, except per share data) (unaudited)
Quarter Ended
September 30,
----------------------
1996 1995
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<S> <C> <C>
NET SALES ........................................ $ 5,500 $ 7,181
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Cost and expenses:
Cost of sales .................................. 3,290 4,951
Selling, shipping and advertising .............. 944 772
General and administrative ..................... 864 749
Depreciation and amortization .................. 93 86
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5,191 6,558
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EARNINGS FROM OPERATIONS ......................... 309 623
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Other income (expense):
Interest expense ............................... (203) (137)
Non-recurring charge ........................... (434) --
Other-net ...................................... (34) (71)
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(671) (208)
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EARNINGS (LOSS) BEFORE INCOME TAXES .............. (362) 415
Income tax benefits-net .......................... 59 93
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NET EARNINGS (LOSS) .............................. $ (303) $ 508
======= =======
EARNINGS (LOSS) PER COMMON SHARE:
Assuming no dilution ........................... $ (0.19) $ 0.27
======= =======
Assuming full dilution ......................... $ (0.19) $ 0.20
======= =======
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
------------------------------------------------------------
(in thousands of dollars, except per share data) (unaudited)
Nine Months Ended
September 30,
------------------------
1996 1995
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<S> <C> <C>
NET SALES ...................................... $ 18,182 $ 21,329
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Cost and expenses:
Cost of sales ................................ 11,560 14,619
Selling, shipping and advertising ............ 2,617 2,562
General and administrative ................... 2,487 2,412
Depreciation and amortization ................ 275 258
-------- --------
16,939 19,851
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EARNINGS FROM OPERATIONS ....................... 1,243 1,478
-------- --------
Other income (expense):
Interest expense ............................. (581) (368)
Non-recurring charge ......................... (434) --
Other-net .................................... (89) 24
-------- --------
(1,104) (344)
-------- --------
EARNINGS BEFORE INCOME TAXES ................... 139 1,134
Income tax benefits-net ........................ 221 211
-------- --------
NET EARNINGS ................................... $ 360 $ 1,345
======== ========
EARNINGS PER COMMON SHARE:
Assuming no dilution ......................... $ 0.13 $ 0.71
======== ========
Assuming full dilution ....................... $ 0.13 $ 0.52
======== ========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
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(in thousands of dollars) (unaudited)
Nine Months Ended
September 30,
--------------------
1996 1995
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<S> <C> <C>
Cash Flows from Operating Activities:
Net earnings ......................................... $ 360 $ 1,345
Adjustments to reconcile net earnings to net cash
used in operating activities:
Depreciation and amortization ..................... 275 258
Deferred income tax benefit ....................... (299) (282)
Increase (decrease) in cash from changes in:
Accounts receivable ............................ 41 (234)
Inventories .................................... (569) 242
Other current assets ........................... (65) (145)
Accounts payable ............................... 492 (273)
Accrued expenses ............................... (99) (560)
Net change in pension-related accounts ............ (78) (621)
Other ............................................. (67) (79)
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Net cash used in operating activities .......... (9) (349)
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Cash Flows from Investing Activities:
Sale of property, plant & equipment .................. 8 6
Capital expenditures ................................. (252) (217)
------- -------
Net cash used in investing activities .......... (244) (211)
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Cash Flows from Financing Activities:
Proceeds from short-term debt ........................ 1,509 6,533
Proceeds from long-term debt ......................... -- 225
Proceeds from exercise of stock options .............. 80 31
Payments of short-term debt .......................... (1,130) (6,161)
Payments of long-term debt ........................... (158) (101)
Payments of long-term lease obligations .............. (55) (50)
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Net cash provided by financing activities ...... 246 477
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Net decrease in cash .............................. (7) (83)
Cash at beginning of period ....................... 64 186
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Cash at end of period ............................. $ 57 $ 103
======= =======
</TABLE>
See notes to consolidated financial statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 1996 (unaudited)
Note 1: ACCOUNTING POLICIES
Basis of Financial Statement Presentation - The information as of
and for the three-month and nine-month periods ended September 30, 1996 and
1995 is unaudited. In the opinion of management, all adjustments necessary
for a fair presentation of the results of such interim periods have been
included.
Per Common Share Data - Net earnings (loss) per common share,
assuming no dilution, was computed by dividing net earnings (loss) less
cumulative preferred dividends by the weighted average number of common
shares outstanding.
Net earnings (loss) per common share, assuming full dilution, was
computed by dividing net earnings (loss) by the weighted average number of
common shares outstanding plus the assumed conversion of the preferred
shares to common shares. Such assumed conversion was anti-dilutive for the
three-month and nine-month periods ended September 30, 1996, and, therefore,
was excluded from the computation of earnings (loss) per common share,
assuming full dilution for those periods.
The weighted average number of common shares used for these
computations was as follows:
Quarter Ended
September 30,
----------------------
1996 1995
--------- ---------
Assuming no dilution 1,801,639 1,719,406
Assuming full dilution 2,639,430 2,592,673
Nine Months Ended
September 30,
----------------------
1996 1995
--------- ---------
Assuming no dilution 1,788,077 1,711,051
Assuming full dilution 2,627,419 2,584,318
<PAGE>
Discontinued Operations - On October 6, 1993, the Registrant, Ronson
Corporation (the "Company"), sold the assets and business of Ronson
Hydraulic Units Corporation ("Ronson Hydraulics"). As a result, the
operations of Ronson Hydraulics have been classified as discontinued
operations in the accompanying Consolidated Statements of Operations and
other related operating statement data. Ronson Metals Corporation ("Ronson
Metals") is also being accounted for as a discontinued operation and,
accordingly, its operating results are reported in this manner in all
periods presented in the accompanying Consolidated Statements of Operations
and other related operating statement data.
This quarterly report should be read in conjunction with the
Company's Annual Report on Form 10-K.
Note 2: SHORT-TERM DEBT
In January 1995, Ronson Consumer Products Corporation ("RCPC")
entered into an agreement with Summit Bank, formerly known as United Jersey
Bank, for a Revolving Loan and a Term Loan. The Revolving Loan provides a
line of credit of up to $2,000,000 to RCPC, which expires on January 11,
1997, based on accounts receivable and inventory. The amount of the
Revolving Loan outstanding at September 30, 1996, was $1,023,000. The
balance of the Term Loan was $119,000 at September 30, 1996, and is to be
repaid in monthly installments of $6,250 plus interest through April 1,
1998.
Note 3: LONG-TERM DEBT
In accordance with the terms of the Ronson Aviation mortgage, in the
amount of $375,000 at September 30, 1996, with the Bank of New York,
National Community Division ("BONY/NCD"), the remaining mortgage balance is
due to be paid in January 1997, in the amount of $339,000.
Note 4: CONTINGENCIES
On December 30, 1994, the Company agreed to a settlement with the
United States Department of Labor ("DOL") and in March 1995, the Company
agreed to a settlement with the Internal Revenue Service ("IRS"), related to
the 1991 contribution by the Company of unencumbered land, 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, including the proposed
assessments pertaining to such years.
In October 1996, the Trustees of the Retirement Plan notified the
Company that the Retirement Plan has entered into a contract for the sale of
the land in North Carolina. The net cash proceeds to the Retirement Plan is
expected to be approximately $825,000, and the closing of the sale is
expected in the first quarter of 1997.
<PAGE>
Under the terms of the settlements with the IRS and DOL, the land
contributed in 1991 has remained 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. Further, the major portion of the judgment
will be satisfied by the proceeds from the sale of the land by the
Retirement Plan. Based on the expected net proceeds from the sale and the
amount of the judgment, including interest, of approximately $926,000 at
September 30, 1996, the Company has a net contingent liability of
approximately $100,000. In connection with the settlements, the Company
established an escrow account, with assets of about $50,000 at September 30,
1996. The funds in the escrow account will be required to be deposited into
the Retirement Plan since the proceeds from the sale of the North Carolina
land by the Retirement Plan will be less than the amount of the judgment,
including accrued interest. The Company will also be required to make a
payment to the Retirement Plan of about $50,000 to be met from cash flow
from operations, which will not have a material adverse effect on the
Company's financial position.
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, in September 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 this reduced 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.
<PAGE>
The Company is the Defendant in a product liability lawsuit pending
in Georgia in which Plaintiffs seek damages that allegedly occurred in
December 1994, when a spark from an unidentified cigarette lighter ignited
the clothing of the claimant after he had allegedly allowed lighter fluid to
leak onto his pants. The case was filed in June 1996. The Plaintiffs seek
substantial special damages and punitive damages. Discovery has not been
completed, and, therefore, the Company's counsel is unable to render an
opinion about whether the likelihood of an unfavorable outcome is either
"probable" or "remote". However, counsel for the Company has advised that
substantial defenses exist and is vigorously defending this litigation.
Management believes that the claim is without merit and a loss, if any,
would be well within the limits of insurance coverage.
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.
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 5. STATEMENTS OF CASH FLOWS
Certificates of deposit that have a maturity of three months or more
are not considered cash equivalents for purposes of the accompanying
Consolidated Statements of Cash Flows.
Supplemental disclosures of cash flow information (in thousands):
Nine Months Ended September 30,
-------------------------------
1996 1995
---- ----
Cash Payments for:
Interest $562 $353
Income taxes 73 --
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Third Quarter 1996 compared to Third Quarter 1995 and Nine Months 1996
compared to Nine Months 1995.
The Registrant, Ronson Corporation (the "Company") had a decline in Net
Earnings for the nine months of 1996 to $360,000 due to a decline in Ronson
Aviation's operating earnings for the third quarter and nine months 1996 and
to a third quarter 1996 charge for non-recurring costs at Ronson Aviation of
$434,000. Consolidated Net Earnings for the nine months of 1995 were
$1,345,000 which included income of $96,000 resulting from the proceeds of
an insurance claim.
The Company's Consolidated Net Sales were $5,500,000 in the third
quarter of 1996 as compared to $7,181,000 in the third quarter of 1995. The
Company's Net Sales were $18,182,000 in the nine months of 1996 as compared
to $21,329,000 in the nine months of 1995. Net Sales of consumer products at
Ronson Consumer Products Corporation ("RCPC"), Woodbridge, New Jersey, and
Ronson Corporation of Canada, Ltd. ("Ronson-Canada"), Mississauga, Ontario,
(together "Ronson Consumer Products") increased by 6% in the third quarter
of 1996 as compared to the third quarter of 1995. Net Sales at Ronson
Consumer Products increased by 10% in the nine months of 1996 as compared to
the nine months of 1995. The increases in Net Sales at Ronson Consumer
Products in the 1996 periods were primarily due to increased shipments of
lighter and accessory products. Net Sales at Ronson Aviation, Inc. ("Ronson
Aviation"), Trenton, New Jersey, decreased by 57% in the third quarter of
1996 compared to the third quarter of 1995 and decreased by 44% in the nine
months of 1996 as compared to the nine months of 1995. The decreases in Net
Sales at Ronson Aviation in the third quarter and nine months of 1996 were
primarily due to lower aircraft sales in the periods and to lower sales in
the first quarter of 1996 of general aviation services as a result of severe
winter weather.
Consolidated Cost of Sales, as a percentage of Net Sales, was lower at
60% in the third quarter of 1996 and 64% in the nine months of 1996 compared
to 69% in the third quarter and nine months of 1995. The lower Consolidated
Cost of Sales percentage was due to the Net Sales of Ronson Consumer
Products constituting a greater portion of the Consolidated Net Sales of the
Company in the third quarter and nine months of 1996 as compared to the
third quarter and nine months of 1995. This reduction was partially offset
by an increased Cost of Sales percentage at Ronson Consumer Products. The
Cost of Sales percentage at Ronson Consumer Products increased to 52% in the
third quarter and nine months of 1996 as compared to 50% in the third
quarter of 1995 and 49% in the nine months of 1995 primarily due to a change
in the mix of products sold. The Cost of Sales percentage at Ronson Aviation
decreased to 81% in the third quarter of 1996 and to 89% in the nine months
of 1996 as compared to 91% in the third quarter and nine months of 1995
primarily due to a change in the mix of products sold.
<PAGE>
Consolidated Selling, Shipping and Advertising Expenses, as a percentage
of Net Sales, increased to 17% in the third quarter of 1996 from 11% in the
third quarter of 1995. The Consolidated Selling, Shipping and Advertising
Expenses percentage increased to 14% in the nine months of 1996 from 12% in
the nine months of 1995. The increases were due to the effect on the
percentage of the lower Consolidated Net Sales and to increased shipping and
advertising expenses at Ronson Consumer Products in the third quarter of
1996 compared to the third quarter of 1995.
Consolidated General and Administrative Expenses, as a percentage of Net
Sales, increased to 16% and 14% in the third quarter and nine months of 1996
compared to 10% and 11% in the third quarter and nine months of 1995,
respectively. The increases in the 1996 General and Administrative
percentages were primarily due to the effect on the percentage of the lower
Consolidated Net Sales.
Interest Expense increased to $203,000 in the third quarter of 1996 from
$137,000 in the third quarter of 1995 and to $581,000 in the nine months of
1996 from $368,000 in the nine months of 1995. These increases were
primarily due to the additional long-term debt from the new mortgage loan
between RCPC and Summit Bank ("Summit"), formerly known as United Jersey
Bank, dated December 1, 1995, and to increased short-term debt at Ronson
Aviation utilized to finance increased aircraft inventory.
The Non-recurring Charge of $434,000 at Ronson Aviation in the third
quarter and nine months of 1996 resulted from a revaluation of certain
aircraft inventory and costs of restructuring Ronson Aviation's operations.
The Company believes that the actions taken in the third quarter 1996 will
enable Ronson Aviation to expand its aircraft sales and charter operations
and to return to profitable operations in 1997.
Other Income (Expense)-Net in the nine months of 1995 included a gain of
approximately $96,000 from insurance proceeds and also included
approximately $38,000 of royalty income related to final settlement of
certain overseas trademark rights.
Income Tax Benefits-Net in the third quarters of 1996 and 1995 included
deferred income tax benefits of $75,000 and $121,000, respectively, and in
the nine months of 1996 and 1995, included deferred income tax benefits of
$299,000 and $282,000, respectively, all as the result of the reduction in
the valuation allowance related to deferred tax assets. These tax benefits
were partially offset by provisions for state income taxes in the third
quarters and nine months of 1996 and 1995.
FINANCIAL CONDITION
The Company's Stockholders' Equity improved to $2,562,000 at September
30, 1996 from $2,034,000 at December 31, 1995. The improvement of $528,000
in 1996 Stockholders' Equity was primarily due to the Net Earnings in the
nine months of 1996. At September 30, 1996, the Company had net working
capital of $113,000 as compared to $178,000 at December 31, 1995. The
increase in net working capital due to the Net Earnings in 1996 was offset
by the change in classification to short-term liabilities from long-term
liabilities of $348,000 of the Ronson Aviation mortgage loan in the first
quarter of 1996 since the final payment is due in January 1997.
<PAGE>
In the nine months of 1996, the Increase (Decrease) in Cash from Changes
in Inventories was a decrease of $569,000 due to increased inventory at
Ronson Aviation in the first half of 1996. The increase in aircraft
inventory was substantially offset by net increases in short-term debt
secured by the aircraft at Ronson Aviation.
The Increase (Decrease) in Cash from Changes in Accounts Payable was an
increase of $492,000 in the nine months of 1996 as compared to a decrease of
$273,000 in the nine months of 1995. The decrease in the nine months of 1995
resulted from utilizing a portion of the proceeds from the Summit loan to
reduce accounts payable. The increase in the nine months of 1996 was
primarily the result of the timing of materials purchases by Ronson Consumer
Products from its suppliers to meet sales requirements.
The Company has continued to meet its obligations as they have matured
and management believes that the Company will continue to meet its
obligations through internally generated funds from future net earnings and
depreciation, established external financing arrangements, potential
additional sources of financing and existing cash balances.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS.
Prinest G. Hammond and Scarlett W. Hammond, as Parents, Guardians, and
----------------------------------------------------------------------
Next Friends of Fabian Gayle Hammond, a Minor, and Prinest G. Hammond
---------------------------------------------------------------------
and Scarlett W. Hammond, Individually, v. Ronson Corporation
------------------------------------------------------------
The Company is the Defendant in a product liability lawsuit pending in
the Superior Court of Wilkinson County, Georgia, in which Plaintiffs seek
damages that allegedly occurred in December 1994, when a spark from an
unidentified cigarette lighter ignited the clothing of Fabian Gayle Hammond
after he had allegedly allowed lighter fluid to leak onto his pants. The
case was filed in June 1996. The Plaintiffs seek substantial special damages
and punitive damages. Discovery has not been completed, and, therefore, the
Company's counsel is unable to render an opinion about whether the
likelihood of an unfavorable outcome is either "probable" or "remote".
However, counsel for the Company has advised that substantial defenses exist
and is vigorously defending this litigation. Management believes that the
claim is without merit and a loss, if any, would be well within the limits
of insurance coverage.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) At the Company's Annual Stockholders' Meeting (the "Meeting") on
August 27, 1996, the matters set forth in the Company's 1996 Notice of
Meeting and Proxy Statement, which is incorporated herein by reference, were
submitted to the Company's stockholders.
(b) Mr. Louis V. Aronson II and Mr. Barton P. Ferris, Jr., were elected
as Class III directors for three-year terms, and Mr. Gerard J. Quinnan was
elected as a Class I director for a one-year term.
(c) The appointment of Demetrius & Company, L.L.C., independent
auditors, to audit the consolidated financial statements of the Company for
the year 1996 was ratified.
(d) The adoption of the Ronson Corporation 1996 Incentive Stock Option
Plan was ratified.
The number of affirmative votes, negative votes and abstentions on each
matter is set forth in the Report of Inspectors of Election, a copy of which
is attached hereto as Exhibit 99(a).
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(11) Statement re computation of per share earnings is
attached hereto as Exhibit 11.
(99(a)) Report of Inspectors of Election for the Ronson
Corporation Annual Meeting of Stockholders on
August 27, 1996.
(b) Reports on Form 8-K
None.
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
RONSON CORPORATION
Date: November 13, 1996 /s/Louis V. Aronson II
------------------------------
Louis V. Aronson II, President
and Chief Executive Officer
(Signing as Duly Authorized
Officer of the Registrant)
Date: November 13, 1996 /s/Daryl K. Holcomb
------------------------------
Daryl K. Holcomb
Vice President &
Chief Financial Officer,
Controller and Treasurer
(Signing as Chief Financial
Officer of the Registrant)
<TABLE>
<CAPTION>
RONSON CORPORATION Exhibit 11
CALCULATION OF EARNINGS PER COMMON SHARE
(Dollars in thousands, except per common share data) (unaudited)
Quarter Ended
September 30,
--------------------------
1996 1995
----------- -----------
<S> <C> <C>
Assuming No Dilution
- --------------------
Net Earnings (Loss) ....................... $ (303) $ 508
Less Cumulative Preferred Dividends ....... (44) (46)
----------- -----------
Net Earnings (Loss) Applicable to Common
Stock .................................. $ (347) $ 462
=========== ===========
Weighted average number of common shares
outstanding (1) ........................ 1,801,639 1,719,406
----------- -----------
Net Earnings (Loss) per Common Share ...... $ (0.19) $ 0.27
=========== ===========
Assuming Full Dilution
- ----------------------
Net Earnings (Loss) ....................... $ (303) $ 508
=========== ===========
Weighted average number of common shares
outstanding (1) ........................ 1,801,639 1,719,406
Additional common shares outstanding
resulting from assumed conversion of
preferred stock to common stock ........ 837,791 873,267
----------- -----------
Total ..................................... 2,639,430 2,592,673
=========== ===========
Net Earnings (Loss) per Common Share ...... $ (0.11) $ 0.20
=========== ===========
</TABLE>
- --------------
(1) The dilution due to the outstanding stock options was less than 3% in the
third quarters of 1996 and 1995 and, therefore, the stock options were not
included as common stock equivalents for those periods.
<PAGE>
<TABLE>
<CAPTION>
RONSON CORPORATION Exhibit 11
CALCULATION OF EARNINGS PER COMMON SHARE
(Dollars in thousands, except per common share data) (unaudited)
Nine Months Ended
September 30,
--------------------------
1996 1995
----------- -----------
<S> <C> <C>
Assuming No Dilution
- --------------------
Net Earnings .............................. $ 360 $ 1,345
Less Cumulative Preferred Dividends ....... (132) (138)
----------- -----------
Net Earnings Applicable to
Common Stock ........................... $ 228 $ 1,207
=========== ===========
Weighted average number of common shares
outstanding (1) ........................ 1,788,077 1,711,051
----------- -----------
Net Earnings per Common Share ............. $ 0.13 $ 0.71
=========== ===========
Assuming Full Dilution
- ----------------------
Net Earnings .............................. $ 360 $ 1,345
=========== ===========
Weighted average number of common shares
outstanding (1) ........................ 1,788,077 1,711,051
Additional common shares outstanding
resulting from assumed conversion of
preferred stock to common stock ........ 839,342 873,267
----------- -----------
Total ..................................... 2,627,419 2,584,318
=========== ===========
Net Earnings per Common Share ............. $ 0.14 $ 0.52
=========== ===========
</TABLE>
- -----------------
(1) The dilution due to the outstanding stock options was less than 3% in the
nine months of 1996 and 1995 and, therefore, the stock options were not
included as common stock equivalents for those periods.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 57
<SECURITIES> 0
<RECEIVABLES> 2,002
<ALLOWANCES> 103
<INVENTORY> 6,947
<CURRENT-ASSETS> 10,085
<PP&E> 7,036
<DEPRECIATION> 4,564
<TOTAL-ASSETS> 14,429
<CURRENT-LIABILITIES> 9,972
<BONDS> 2,122
0
8
<COMMON> 1,864
<OTHER-SE> 690
<TOTAL-LIABILITY-AND-EQUITY> 14,429
<SALES> 18,182
<TOTAL-REVENUES> 18,182
<CGS> 11,560
<TOTAL-COSTS> 11,560
<OTHER-EXPENSES> 5,379
<LOSS-PROVISION> 17
<INTEREST-EXPENSE> 581
<INCOME-PRETAX> 139
<INCOME-TAX> (221)
<INCOME-CONTINUING> 360
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 360
<EPS-PRIMARY> .13
<EPS-DILUTED> .13
</TABLE>
EXHIBIT 99(a)
REGISTRAR AND TRANSFER
COMPANY
RONSON CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
AUGUST 27, 1996
REPORT OF INSPECTORS OF ELECTION
We, the undersigned, having been duly appointed to act as Inspectors of Election
at the Annual Meeting of Stockholders of RONSON CORPORATION held on August 27,
1996, hereby certify that the number of shares of stock outstanding and entitled
to vote is 1,801,443; that the number of shares present thereat in person or by
proxy are 1,287,977, constituting a quorum thereof, that we received the votes
of the stockholders of said Meeting; and that:
1. Election of Directors:
FOR % WITHHELD %
--------- ---- -------- ---
Louis V. Aronson II 1,265,917 98.3 22,060 1.7
Barton P. Ferris, Jr. 1,268,243 98.5 19,734 1.5
Gerard J. Quinnan 1,268,309 98.5 19,668 1.5
2. To ratify the appointment of DEMETRIUS & COMPANY, L.L.C. as
independent auditors for the year 1996.
FOR % AGAINST % ABSTAIN %
--------- ---- ------- --- ------- ---
1,268,064 98.5 11,085 0.9 8,828 0.7
3. To approve and ratify the Ronson Corporation 1996 Incentive
Stock Option Plan.
FOR % AGAINST % ABSTAIN % NON-VOTE
------- ---- ------- --- ------- --- --------
746,280 88.4 72,899 8.8 23,243 2.8 445,555
/s/ Margaret A. Villani
-----------------------
/s/ Diane Sayek
-----------------------
