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, 1996
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
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(Exact name of registrant as specified in its charter)
NEW JERSEY 22-0743290
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(State of incorporation) (IRS Employer Identification No.)
CAMPUS DRIVE, P.O. BOX 6707, SOMERSET, N.J. 08875
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(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
<PAGE>
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
YES [ X ] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (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 $5,519,000 as of March 10, 1997.
As of March 10, 1997, there were 2,860,961 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 23, 1997 By: /s/Louis V. Aronson II
----------------------
Louis V. Aronson II, President and
Chief Executive Officer and Director
Dated: April 23, 1997 By: /s/Daryl K. Holcomb
-------------------
Daryl K. Holcomb, Vice President &
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, 1996.
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 15, 1997, we reported on the consolidated balance
sheets of Ronson Corporation and subsidiaries as of December 31, 1996
and 1995, and the related consolidated statements of operations, and
cash flows for each of the years in the three year period ended December
31, 1996 as contained in the annual report on Form 10-K for the year
1996. In connection with our audits of the aforementioned consolidated
financial statements, we also audited the related financial statements
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.
/s/Demetrius & Company, L.L.C.
------------------------------
DEMETRIUS & COMPANY, L.L.C.
Wayne, New Jersey
March 15, 1997
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<TABLE>
<CAPTION>
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
RONSON CORPORATION
CONDENSED BALANCE SHEETS
(in thousands of dollars)
DECEMBER 31,
1996 1995
ASSETS -------- --------
<S> <C> <C>
CURRENT ASSETS:
Cash ................................................. $ 5 $ --
Other current assets ................................. 98 72
-------- --------
Total Current Assets ............................ 103 72
Property, plant, and equipment ....................... 218 231
Less accumulated depreciation and amortization ....... 164 206
-------- --------
54 25
Other assets ......................................... 2,169 3,159
-------- --------
TOTAL ASSETS ......................................... $ 2,326 $ 3,256
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable ..................................... $ 128 $ 127
Other current liabilities ............................ 542 618
-------- --------
Total Current Liabilities ....................... 670 745
Net advances from subsidiaries ....................... 446 477
Commitments and Contingencies
STOCKHOLDERS' EQUITY:
Preferred stock ...................................... 8 8
Common stock ......................................... 1,864 1,821
Additional paid-in capital ........................... 30,345 30,308
Accumulated deficit .................................. (27,936) (27,081)
Unrecognized net loss on pension plans ............... (1,441) (1,403)
Cumulative foreign currency translation adjustment ... (36) (26)
-------- --------
2,804 3,627
Less cost of treasury shares:
1996, 62,105 and 1995, 62,087 common shares .... 1,594 1,593
-------- --------
1,210 2,034
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ........... $ 2,326 $ 3,256
======== ========
See notes to condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
RONSON CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(in thousands of dollars)
YEAR ENDED DECEMBER 31,
1996 1995 1994
------- ------- -------
<S> <C> <C> <C>
Management administration (from wholly
owned subsidiaries eliminated
in consolidation) .......................... $ 1,734 $ 1,925 $ 1,735
------- ------- -------
Costs and expenses:
General and administrative expenses ........ 1,292 1,338 1,354
Interest expense (includes inter-
company interest expense of $120,
$38 and $31 in 1996, 1995 and
1994, respectively, eliminated in
consolidation) ........................... 157 76 71
Non-operating expense - net ................ 136 134 35
------- ------- -------
1,585 1,548 1,460
------- ------- -------
EARNINGS BEFORE INCOME TAXES AND
EQUITY IN NET EARNINGS (LOSS)
OF SUBSIDIARIES ............................ 149 377 275
Income tax benefits ............................ 20 81 198
Equity in net earnings (loss) of subsidiaries
(includes loss from discontinued operations
of $1,190 and $860 in 1996 and 1995,
respectively) .............................. (1,024) 182 601
------- ------- -------
NET EARNINGS (LOSS) ............................ $ (855) $ 640 $ 1,074
======= ======= =======
See notes to condensed financial statements.
</TABLE>
<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,
1996 1995 1994
------- ------- -------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net earnings (loss) .......................... $ (855) $ 640 $ 1,074
Adjustments to reconcile net earnings
(loss) to net cash used in
operating activities:
Equity in net (earnings) loss
of subsidiaries .......................... 1,024 (182) (601)
Depreciation and amortization .............. 14 12 21
Deferred income tax benefit ................ (48) (15) (40)
Increase (decrease) in cash from changes in:
Other current assets ..................... (35) 23 (4)
Accounts payable and other current
liabilities ............................ (26) (235) 45
Increase (decrease) in net advances from
subsidiaries ............................. (31) 1,468 (1,038)
Net change in pension-related accounts ..... (31) (1,674) 298
Other ...................................... (39) (55) (123)
------- ------- -------
Net cash used in
operating activities ................. (27) (18) (368)
------- ------- -------
Cash Flows from Investing Activities:
Net cash used in investing activities,
capital expenditures ....................... (42) (3) (16)
------- ------- -------
Cash Flows from Financing Activities:
Exercise of stock options .................. 80 31 4
Payments of preferred dividends ............ -- -- (92)
Payments of leases ......................... (6) (10) (14)
------- ------- -------
Net cash provided by (used in)
financing activities ................. 74 21 (102)
------- ------- -------
Net increase (decrease) in cash .............. 5 -- (486)
Cash at beginning of year .................... -- -- 486
------- ------- -------
Cash at end of year .......................... $ 5 $ -- $ --
======= ======= =======
See notes to condensed financial statements.
</TABLE>
<PAGE>
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
RONSON CORPORATION
NOTES TO CONDENSED 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 1996.
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 837,595 and 847,308 at December 31, 1996 and 1995, respectively. (Refer
to Note I below.)
The Company has authorized 11,848,106 shares of common stock with a par
value of $1.00, of which 1,801,834 and 1,758,806 were outstanding at
December 31, 1996 and 1995, 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, 1996, the total amount due
to BONY/NCD by Ronson Aviation was $348,000.
In January 1995, Ronson Consumer Products Corporation ("RCPC") entered
into an agreement with Summit Bank ("Summit"), formerly United Jersey Bank,
for a Revolving Loan and a Term Loan (in the original amount of $225,000).
On March 6, 1997, RCPC and Summit extended RCPC's Revolving Loan by over
three years to June 30, 2000. The Revolving Loan provides a line of credit
up to $2,500,000 (an increase in 1997 of $500,000 from the prior
$2,000,000). The Company guaranteed the debts of RCPC to Summit under the
Revolving Loan and Term Loan. At December 31, 1996, the amount due by RCPC
to Summit under the Revolving Loan and Term Loan was $1,110,000.
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. At December 31, 1996, the total amount
due by Ronson-Canada to CIBC under the line of credit was $76,000
(C$104,000). The line of credit is guaranteed by the Company.
On December 1, 1995, the Company and RCPC entered into a Mortgage Loan
agreement with Summit in the amount of $1,300,000. The loan, with a balance
of $1,276,000 at December 31, 1996, 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%.
<PAGE>
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, 1996 were provided to Summit and Cessna Finance
Corporation. The total outstanding amount of these Company-guaranteed loans
to Ronson Aviation at December 31, 1996, was $1,410,000.
NOTE C: Other Assets.
<TABLE>
<CAPTION>
December 31,
(in thousands)
1996 1995
------ ------
<S> <C> <C>
Investment in subsidiaries $1,774 $2,829
Intangible pension assets 159 186
Other 236 144
------ ------
$2,169 $3,159
====== ======
</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") #87.
NOTE D: Net Advances from Subsidiaries.
The net advances from subsidiaries balances of $446,000 and $477,000 at
December 31, 1996 and 1995, respectively, were eliminated in consolidation.
NOTE E: Unrecognized Net Loss on Pension Plans.
SFAS #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.
NOTE F: Commitments and Contingencies.
On February 28, 1997, the Ronson Corporation Retirement Plan
("Retirement Plan") completed the sale of its Salisbury, North Carolina,
land for cash proceeds, net of related expenses, of about $800,000. The land
had previously been valued in the Retirement Plan assets, for financial
reporting purposes, at the appraised value of $675,000. The excess of about
$125,000 of the net proceeds from the sale over the prior appraised value
has increased the Plan Assets at Fair Value at December 31, 1996. The net
proceeds of the sale of the property has also satisfied a substantial
portion of a settlement with the United States Department of Labor ("DOL")
and the Internal Revenue Service ("IRS") as described below.
<PAGE>
On December 30, 1994, the Company agreed to a settlement with the DOL
and on February 3, 1995, the Company agreed to a settlement with an
appellate officer of the 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 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 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
was stayed, and no collection action would be taken if the Company met
certain terms. Further, a substantial amount of the judgment was satisfied
by the net proceeds of about $800,000 from the February 28, 1997, sale of
the North Carolina land by the Retirement Plan.
In addition, in accordance with the terms of the settlements, in March
1997, the Company transferred the balance of about $52,000 held in an escrow
account to the Retirement Plan, satisfying a further portion of the
settlement amount. The balance of the settlements, approximately $92,000,
will be paid by the Company to the Retirement Plan in 1997.
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.
<PAGE>
The Company is the Defendant in a product liability lawsuit pending in
the Superior Court of Wilkinson County, Georgia, entitled, 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, in which Plaintiffs seek
damages for an incident 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.
The Company is involved in various other lawsuits and claims.
Management believes that the outcome of these lawsuits and claims 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 31, 1998. Base salaries in the years 1997 and 1998 are
$462,405 and $494,773, respectively, and the contract provides for
additional compensation and benefits, including a death benefit equal to two
years' salary.
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 G: 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 #109, "Accounting
for Income Taxes". Under SFAS #109, the Company is to record a deferred
income tax asset for net operating loss and credit carryforwards when the
ultimate realization is more likely than not. In 1996, 1995 and 1994, the
Company and its subsidiaries recorded net deferred income tax assets of
$390,000, $686,000 and $354,000, respectively, of which $48,000, $15,000 and
$40,000 were allocated to the Company.
NOTE H: 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>
NOTE I: Subsequent Event.
On November 15, 1996, the Company issued an Offer to owners of its 12%
Cumulative Convertible Preferred Stock to exchange their shares of preferred
stock for shares of common stock at the rate of 1.7 shares of common stock
for each share of preferred. The Company did not accept any of the tendered
preferred shares for exchange prior to December 31, 1996, and, therefore,
the effects of the Exchange Offer have not been included in the Company's
Condensed Balance Sheets or Condensed Statements of Operations at December
31, 1996.
In 1997, through March 10, 1997, the Company accepted 623,016 shares of
preferred stock for exchange under the Company's November 15, 1996 Exchange
Offer. As a result, on March 10, 1997, the Company has outstanding 214,579
shares of preferred stock and 2,860,961 shares of common stock.
If on December 31, 1996, the Company had accepted these 623,016
preferred shares and issued the 1,059,127 common shares in exchange, the
aggregate dividends in arrears at December 31, 1996 would have been
approximately $192,000, a reduction of $556,000.
If the shares had been exchanged on January 1, 1996, the Earnings
(Loss) per Common Share in the year ended December 31, 1996, would have been
as follows:
<TABLE>
<CAPTION>
<S> <C>
Assuming no dilution:
Earnings from continuing operations.......... $ 0.10
Loss from discontinued operations............ (0.42)
-------
Net loss..................................... $ (0.32)
=======
Assuming full dilution:
Earnings from continuing operations.......... $ 0.10
Loss from discontinued operations............ (0.42)
-------
Net loss..................................... $ (0.32)
=======
</TABLE>
<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 12/31/96 $ 86 $46 - $ 68 (1) $64
Year Ended 12/31/95 95 20 - 29 (1) 86
Year Ended 12/31/94 89 29 - 23 (1) 95
Valuation allowance for
deferred income
tax assets:
Year Ended 12/31/96 $3,902 - $523 $390 (2) $4,035
Year Ended 12/31/95 4,783 - - 881 (2) 3,902
Year Ended 12/31/94 5,648 - - 865 (2) 4,783
(1) Allowance for doubtful accounts - primarily uncollectible accounts
written off.
(2) Valuation allowance for deferred income tax assets - due to utilization
of credits and carryforwards, to changes in the deferred income tax
assets and to recognition of net deferred income tax assets.
</TABLE>
