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, 1998
------------------
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 08875-6707
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(Address of principal executive offices) (Zip Code)
(732) 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, 1998, there were 3,197,175 shares of the registrant's common
stock outstanding.
<PAGE>
RONSON CORPORATION
FORM 10-Q INDEX
PART I - FINANCIAL INFORMATION:
CONSOLIDATED BALANCE SHEETS:
SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
CONSOLIDATED STATEMENTS OF OPERATIONS:
QUARTER ENDED SEPTEMBER 30, 1998 AND 1997
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
CONSOLIDATED STATEMENTS OF CASH FLOWS:
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
PART II - OTHER INFORMATION:
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,
1998 1997
------------- ------------
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ........................ $ 285 $ 32
Accounts receivable, net ......................... 1,651 1,865
Inventories:
Finished goods ................................. 2,205 2,260
Work in process ................................ 105 62
Raw materials .................................. 606 695
-------- --------
2,916 3,017
Other current assets ............................. 1,213 914
-------- --------
TOTAL CURRENT ASSETS ....................... 6,065 5,828
-------- --------
Property, plant and equipment, at cost:
Land ........................................... 19 19
Buildings and improvements ..................... 3,763 3,742
Machinery and equipment ........................ 7,161 7,071
Construction in progress ....................... 341 61
-------- --------
11,284 10,893
Less accumulated depreciation and amortization ... 5,831 5,424
-------- --------
5,453 5,469
Other assets ..................................... 2,274 2,222
-------- --------
$ 13,792 $ 13,519
======== ========
<PAGE>
<CAPTION>
RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
----------------------------------------------------
(in thousands of dollars)
September 30, December 31,
1998 1997
------------- ------------
(unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term debt .................................. $ 2,348 $ 2,713
Current portion of long-term debt and leases ..... 470 459
Accounts payable ................................. 1,827 1,431
Accrued expenses ................................. 1,725 1,724
Current liabilities of discontinued operations ... 851 1,106
-------- --------
TOTAL CURRENT LIABILITIES .................. 7,221 7,433
-------- --------
Long-term debt and leases ........................ 3,658 3,744
Other long-term liabilities ...................... 289 478
STOCKHOLDERS' EQUITY:
Common stock ..................................... 3,260 3,226
Additional paid-in capital ....................... 29,024 28,991
Accumulated deficit .............................. (26,548) (27,153)
Accumulated other comprehensive deficit .......... (1,518) (1,606)
-------- --------
4,218 3,458
Less cost of treasury shares ..................... 1,594 1,594
-------- --------
TOTAL STOCKHOLDERS' EQUITY ................. 2,624 1,864
-------- --------
$ 13,792 $ 13,519
======== ========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
----------------------------------------------------------
(in thousands of dollars, except per share data) (unaudited)
Quarter Ended
September 30,
---------------------
1998 1997*
------ ------
<S> <C> <C>
NET SALES ........................................ $6,145 $6,377
------ ------
Cost and expenses:
Cost of sales .................................. 3,769 4,059
Selling, shipping and advertising .............. 961 941
General and administrative ..................... 982 850
Depreciation and amortization .................. 138 109
------ ------
5,850 5,959
------ ------
EARNINGS FROM OPERATIONS ......................... 295 418
------ ------
Other expense:
Interest expense ............................... 159 122
Other, net ..................................... 10 33
------ ------
169 155
------ ------
EARNINGS BEFORE INCOME TAXES ..................... 126 263
Income tax benefits, net ......................... 25 48
------ ------
NET EARNINGS ..................................... $ 151 $ 311
====== ======
NET EARNINGS PER COMMON SHARE:
Basic .......................................... $ 0.05 $ 0.10
====== ======
Diluted ........................................ $ 0.05 $ 0.10
====== ======
</TABLE>
See notes to consolidated financial statements.
* Reclassified for comparability.
<PAGE>
<TABLE>
<CAPTION>
RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
------------------------------------------------------------
(in thousands of dollars, except per share data) (unaudited)
Nine Months Ended
September 30,
-----------------------
1998 1997 *
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<S> <C> <C>
NET SALES ...................................... $17,846 $17,874
------- -------
Cost and expenses:
Cost of sales ................................ 10,773 11,322
Selling, shipping and advertising ............ 2,721 2,758
General and administrative ................... 2,881 2,467
Depreciation and amortization ................ 413 363
------- -------
16,788 16,910
------- -------
EARNINGS FROM OPERATIONS ....................... 1,058 964
------- -------
Other expense:
Interest expense ............................. 494 373
Other, net ................................... 48 75
------- -------
542 448
------- -------
EARNINGS BEFORE INCOME TAXES ................... 516 516
Income tax benefits, net ....................... 89 134
------- -------
NET EARNINGS ................................... $ 605 $ 650
======= =======
NET EARNINGS PER COMMON SHARE:
Basic ........................................ $ 0.19 $ 0.22
======= =======
Diluted ...................................... $ 0.19 $ 0.21
======= =======
</TABLE>
See notes to consolidated financial statements.
* Reclassified for comparability.
<PAGE>
<TABLE>
<CAPTION>
RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
----------------------------------------------------
(in thousands of dollars) (unaudited)
Nine Months Ended
September 30,
--------------------
1998 1997 *
------- -------
<S> <C> <C>
Cash Flows from Operating Activities:
Net earnings ......................................... $ 605 $ 650
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization ..................... 413 363
Deferred income tax benefits ...................... (112) (150)
Increase in cash from changes in current
assets and current liabilities .................. 35 456
Other ............................................. 138 (65)
------- -------
Net cash provided by operating activities ...... 1,079 1,254
------- -------
Cash Flows from Investing Activities:
Net cash used in investing activities,
capital expenditures .............................. (388) (273)
------- -------
Cash Flows from Financing Activities:
Proceeds from short-term debt ........................ 1,084 571
Proceeds from long-term debt ......................... 264 285
Proceeds from exercise of stock options .............. 14 --
Payments of short-term debt .......................... (1,449) (923)
Payments of long-term debt ........................... (282) (886)
Payments of long-term lease obligations .............. (69) (83)
------- -------
Net cash used in financing activities .......... (438) (1,036)
------- -------
Net increase (decrease) in cash ................... 253 (55)
------- -------
Cash at beginning of period ....................... 32 116
------- -------
Cash at end of period ............................. $ 285 $ 61
======= =======
</TABLE>
See notes to consolidated financial statements.
* Reclassified for comparability.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 1998 (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, 1998 and 1997, is
unaudited. In the opinion of management, all adjustments necessary for a fair
presentation of the results of such interim periods have been included.
Discontinued Operations - In December 1989 Ronson Corporation (the
"Company") adopted a plan to discontinue the operations in 1990 of one of its
New Jersey facilities, Ronson Metals Corporation, subsequently renamed
Prometcor, Inc. ("Prometcor"). As a result, the operations of Prometcor have
been classified as discontinued operations in the accompanying Consolidated
Statements of Earnings 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: PER COMMON SHARE DATA
The calculation and reconciliation of Basic and Diluted Earnings per
Common Share were as follows (in thousands except per share data):
<TABLE>
<CAPTION>
Quarter Ended September 30,
------------------------------------------------------
1998 1997
-------------------------- --------------------------
Per Per
Share Share
Earnings Shares Amount Earnings Shares Amount
-------- ------ ------ -------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net earnings $ 151 $ 311
Less accrued
dividends on
preferred stock (2) (2)
-------- --------
Basic 149 3,192 $0.05 309 3,015 $0.10
===== =====
Effect of dilutive
securities:
Stock options 22 12(1)
Cumulative
convertible
preferred stock 2 37 2 124
-------- ----- -------- -----
Diluted $ 151 3,251 $0.05 $ 311 3,151 $0.10
======== ===== ===== ======== ===== =====
<PAGE>
<CAPTION>
Nine Months Ended September 30,
------------------------------------------------------
1998 1997
-------------------------- --------------------------
Per Per
Share Share
Earnings Shares Amount Earnings Shares Amount
-------- ------ ------ -------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net earnings $ 605 $ 650
Less accrued
dividends on
preferred stock (6) (6)
-------- --------
Basic 599 3,178 $0.19 644 2,889 $0.22
===== =====
Effect of dilutive
securities:
Stock options 20 10(1)
Cumulative
convertible
preferred stock 6 37 6 198
-------- ----- -------- -----
Diluted $ 605 3,235 $0.19 $ 650 3,097 $0.21
======== ===== ===== ======== ===== =====
</TABLE>
(1) The number of shares for the computation of Diluted Earnings Per Share for
the quarter and nine months ended September 30, 1997, have been adjusted to
include the dilutive effect of outstanding stock options.
There were no securities that were excluded in the computation of
Diluted Earnings Per Share because they were anti-dilutive in the periods
presented.
On November 15, 1996, the Company issued an offer to exchange 1.7
shares of its common stock for each share of preferred stock outstanding. After
the expiration of the offer on September 30, 1997, the Company had accepted a
total of 800,844 shares of preferred stock and had issued a total of 1,361,435
shares of common stock in exchange under the Company's Exchange Offer. At
September 30, 1998, the Company had outstanding 36,518 shares of preferred stock
and 3,197,175 shares of common stock.
<PAGE>
Note 3: SHORT-TERM DEBT
In 1995 Ronson Consumer Products Corporation ("RCPC") entered into an
agreement with Summit Bank ("Summit") for a Revolving Loan and a Term Loan. The
Revolving Loan of $1,396,000 at September 30, 1998, provides a line of credit up
to $2,500,000 to RCPC based on accounts receivable and inventory. The balance of
the Term Loan was paid in full on April 1, 1998.
In July 1997 RCPC and Summit amended the Revolving Loan agreement to
provide $400,000 in additional loan availability. The $400,000 additional loan
availability was reduced in monthly amounts of $14,583 from October 1997 to
March 1998, and is currently being reduced in monthly amounts of $20,833 from
April 1998 to June 1999. The outstanding amount under the agreement for the
additional available loan of $188,000 as of September 30, 1998, is included in
the balance of the Revolving Loan in the paragraph above.
In 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. The agreement was renewed in August 1998. The Revolving
Loan balance of $99,000 (C$151,000) at September 30, 1998, of Ronson-Canada
under the line of credit is secured by the accounts receivable and inventory of
Ronson-Canada. The Revolving Loan currently bears interest at the rate of 1.25%
above CIBC's prime rate. Prior to the August 1998 renewal, the interest rate on
the loan was 1.5% above CIBC's prime rate.
At September 30, 1998, Ronson Aviation, Inc. ("Ronson Aviation") had
notes payable consisting of the following: 1) $707,000 due to Raytheon Aircraft
Credit Corp.; and 2) $146,000 due to Greentree Financial Servicing Corporation.
These notes are each collateralized by specific aircraft, and the notes are to
be repaid from the proceeds from the sale of the aircraft.
In August 1997 Ronson Aviation entered into an agreement with Summit
for a Revolving Loan and a Term Loan (refer to Note 4 below regarding the Term
Loan). The Revolving Loan, which had not yet been utilized at September 30,
1998, provides a line of credit up to $400,000 to Ronson Aviation based on the
level of its accounts receivable.
Note 4: LONG-TERM DEBT
In August 1997 Ronson Aviation entered into a Term Loan agreement with
Summit in the original amount of $285,000. The Term Loan is payable in monthly
installments of $4,750 plus interest. On October 26, 1998, Ronson Aviation and
Summit amended the Term Loan agreement to extend the payment terms to June 30,
2000. The Term Loan balance was $228,000 at September 30, 1998.
Ronson Aviation has five additional term loans payable to Summit with
balances at September 30, 1998, totalling approximately $2,192,000. The loans
are collateralized by specific aircraft.
Also, Ronson Aviation has a Promissory Term Note payable to Texaco
Refining and Marketing, Inc. effective September 15, 1998, in the original
amount of $250,000. The Promissory Term Note is payable in ten annual
installments of $25,000 plus interest, through September 14, 2008. The
Promissory Term Note bears interest at the rate of 6% per annum. The proceeds of
the Promissory Term Note are being used to finance the construction of Ronson
Aviation's new aircraft fueling facilities. The Promissory Term Note is secured
by the leased premises of the fueling facilities complex and all related
equipment, and also contains restrictive covenants.
<PAGE>
Note 5: CONTINGENCIES
In September 1998 the Company received a "de minimis" settlement offer
("Settlement Offer") from the United States Environmental Protection Agency
("USEPA") related to waste disposed of prior to 1980 at a landfill in Monterey
Park, California, which the USEPA had 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. As a result, in
August 1995 the Company received a General Notice Letter from the 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 at the Site. In 1981 the Company sold the Duarte,
California, hydraulic subsidiary, Ronson Hydraulic Units Corporation
("RHUCOR-CA"), to the Boeing Corporation. The USEPA has notified a subsequent
owner of the facility that the USEPA considers the subsequent owner also liable
for the costs the USEPA determines to be due as a result of RHUCOR-CA's waste
having been sent to the Site. The USEPA may also consider financial factors in
determining the final amount due. Although the Settlement Offer includes various
options at costs of from $307,000 to $376,000, the Company's final contribution,
if any, is not yet determinable.
The Company is involved in various other lawsuits and claims. While the
amounts claimed may be substantial, the ultimate liability cannot now be
determined because of the considerable uncertainties that exist. Therefore, it
is possible that results of operations or liquidity in a particular period could
be materially affected by certain contingencies. However, based on facts
currently available, including the insurance coverage that the Company has in
place, management believes that the outcome of these lawsuits and claims will
not have a material adverse effect on the Company's financial position.
Note 6: COMPREHENSIVE INCOME
Effective January 1, 1998, the Company adopted SFAS #130, "Reporting
Comprehensive Income". Comprehensive Income is the change in equity during a
period from transactions and other events from nonowner sources. Under SFAS
#130, the Company is required to classify items of other comprehensive income in
financial statements and to display the accumulated balance of other
comprehensive income (deficit) separately in the equity section of the
Consolidated Balance Sheets. The adoption of SFAS #130 does not have a material
impact on the financial position or results of operations of the Company.
<PAGE>
The composition of Comprehensive Income was as follows (in thousands):
<TABLE>
<CAPTION>
Quarter Ended
September 30,
-------------
1998 1997
---- ----
<S> <C> <C>
Net earnings $151 $311
Other comprehensive income, net of tax:
Minimum pension liability adjustment 41 35
Foreign currency translation adjustment (18) --
---- ----
Comprehensive income $174 $346
==== ====
<CAPTION>
Nine Months Ended
September 30,
-------------
1998 1997
---- ----
<S> <C> <C>
Net earnings $605 $650
Other comprehensive income, net of tax:
Minimum pension liability adjustment 123 105
Foreign currency translation adjustment (35) (9)
---- ----
Comprehensive income $693 $746
==== ====
</TABLE>
<PAGE>
Note 7: 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,
-----------------
1998 1997
---- ----
Cash Payments for:
Interest $479 $380
Income taxes 20 36
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Third Quarter 1998 Compared to Third Quarter 1997 and Nine Months 1998
Compared to Nine Months 1997.
Ronson Corporation's ("the Company's") nine months 1998 Earnings from
Operations increased by 10% to $1,058,000 from $964,000 in the nine months of
1997. Earnings from Operations in the third quarter and nine months of 1998 were
reduced by increased legal and other professional fees relating to shareholder
matters and costs of development of new international markets associated with a
new brand of products. Net Earnings were slightly lower in the nine months of
1998 as compared to the nine months of 1997, and the Net Earnings also were
lower in the third quarter of 1998 than in the third quarter of 1997. The
reductions in the periods were primarily due to increased legal and other
professional fees related to shareholder matters and costs of development of new
international markets associated with a new brand of products.
The Company's Consolidated Net Sales decreased by 4% to $6,145,000 in
the third quarter of 1998 from $6,377,000 in the third quarter of 1997. The
Company's Consolidated Net Sales were $17,846,000 in the nine months of 1998
compared to $17,874,000 in the nine months of 1997. 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 1% in the third
quarter of 1998 as compared to the third quarter of 1997. Net Sales at Ronson
Consumer Products were approximately unchanged in the nine months of 1998 as
compared to the nine months of 1997. Net Sales at Ronson Aviation, Inc. ("Ronson
Aviation"), Trenton, New Jersey, decreased by 11% in the third quarter of 1998
compared to the third quarter of 1997. The decrease in Net Sales at Ronson
Aviation in the third quarter of 1998 was primarily due to decreased aircraft
sales in this period. Net Sales at Ronson Aviation were approximately unchanged
in the nine months of 1998 as compared to the nine months of 1997 because
increased sales of general aviation services were offset by lower aircraft sales
in the periods. A substantial portion of the increase in general aviation
services in the nine months of 1998 was in charter service revenues. The
increase in revenue from charter operations was primarily due to Ronson
Aviation's fourth quarter 1997 purchase of a Cessna Citation II jet and to
increases in other charter revenues.
Consolidated Cost of Sales, as a percentage of Consolidated Net Sales,
was reduced to 61% in the third quarter of 1998 from 64% in the third quarter of
1997 and to 60% in the nine months of 1998 from 63% in the nine months of 1997.
The Cost of Sales percentage at Ronson Consumer Products was 51% in the third
quarters of both 1998 and 1997 and was reduced to 51% in the nine months of 1998
from 52% in the nine months of 1997, primarily due to reductions in material
costs related to certain products. The Cost of Sales percentage at Ronson
Aviation decreased to 81% in the third quarter of 1998 as compared to 84% in the
third quarter of 1997 and to 78% in the nine months of 1998 from 84% in the nine
months of 1997, primarily due to increased sales of general aviation services,
particularly increased charter services.
<PAGE>
Consolidated General and Administrative Expenses, as a percentage of
Consolidated Net Sales, increased to 16% in the third quarter and nine months of
1998 as compared to 13% in the third quarter of 1997 and 14% in the nine months
of 1997. The increases in the 1998 periods compared to the 1997 periods were
primarily due to increased legal and other professional fees related to
shareholder matters and to costs of development of new international markets
associated with a new brand of products.
Interest expense increased to $159,000 in the third quarter of 1998
from $122,000 in the third quarter of 1997 and to $494,000 in the nine months of
1998 from $373,000 in the nine months of 1997 primarily due to increased
long-term debt financing of Ronson Aviation's purchase of the Citation II.
FINANCIAL CONDITION
The Company's Stockholders' Equity improved to $2,624,000 at September
30, 1998, from $1,864,000 at December 31, 1997. The improvement of $760,000 in
1998 Stockholders' Equity was primarily due to the Net Earnings of $605,000 in
the nine months of 1998. The Company's nine months 1998 Net Earnings were also
the primary factor improving the Company's working capital by $449,000 to a
deficiency in working capital of $1,156,000 at September 30, 1998, from
$1,605,000 at December 31, 1997.
In September 1998 Ronson Aviation entered into a long-term loan
agreement with its primary fuel supplier. The loan agreement provided $250,000
to Ronson Aviation to be used to construct the new fueling facility. The loan is
due in ten annual installments of $25,000 plus interest at the rate of 6% per
annum. The total cost of the new fueling facility is expected to be $396,000.
In October 1998 Ronson Aviation and Summit Bank ("Summit"), the
Company's principal lender, agreed to extend Ronson Aviation's Term Loan to June
30, 2000. All other terms of the agreement were substantially unchanged.
In September 1998 the Company received a "de minimis" settlement offer
("Settlement Offer") from the United States Environmental Protection Agency
("USEPA") related to waste disposed of prior to 1980 at a landfill in Monterey
Park, California, which the USEPA had 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. As a result, in
August 1995 the Company received a General Notice Letter from the 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 at the Site. In 1981 the Company sold the Duarte,
California, hydraulic subsidiary, Ronson Hydraulic Units Corporation
("RHUCOR-CA"), to the Boeing Corporation. The USEPA has notified a subsequent
owner of the facility that the USEPA considers the subsequent owner also liable
for the costs the USEPA determines to be due as a result of RHUCOR-CA's waste
having been sent to the Site. The USEPA may also consider financial factors in
determining the final amount due. Although the Settlement Offer includes various
options at costs of from $307,000 to $376,000, the Company's final contribution,
if any, is not yet determinable.
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>
YEAR 2000 ISSUES
The Company's information technology systems have been reviewed for Year 2000
("Y2K") readiness, and actions have been taken to update all material systems.
The information technology systems used at Ronson Aviation were recently
acquired and have been certified Y2K compliant. The necessary upgrades to the
information technology systems utilized by the Company and Ronson Consumer
Products have been acquired. The implementation of these upgraded systems has
begun and is expected to be completed in the first quarter of 1999.
The Company has also reviewed its non-information technology systems. The
Company believes there are no material concerns. This assessment includes Ronson
Aviation's aircraft and related equipment.
The Company has assessed its material relationships with third parties. Based on
information received from the Company's third parties, the Company believes that
those third parties with which the Company has a material relationship will not
be disrupted by any Y2K issues.
The majority of the costs to address the Company's Y2K issues have been incurred
and have not been material. The costs remaining will be incurred in the fourth
quarter 1998 and will not be material.
Because of the current status of the Company's preparations related to the Y2K
issues, the Company does not believe there is a material risk of losses related
to the Y2K issues.
For those systems for which compliance has not yet been demonstrated, the
Company is developing contingency plans even though none of those systems are
material to the Company's operations.
<PAGE>
PART II - OTHER INFORMATION
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) At the Company's Annual Stockholders' Meeting (the "Meeting") on
October 27, 1998, the matters set forth in the Company's 1998 Notice of Meeting
and Proxy Statement, which is incorporated herein by reference, were submitted
to the Company's stockholders.
(b) Messrs. Robert A. Aronson, Erwin M. Ganz and Justin P. Walder were
elected as Class II directors for three-year terms and Mr. Albert G. Besser was
elected as a Class III 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 1998 was ratified.
(d) A shareholder proposal was rejected.
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
(99)(a) Report of Inspectors of Election for the Ronson Corporation
Annual Meeting of Stockholders on October 27, 1998.
(b) Reports on Form 8-K
On August 24, 1998, the Company filed a report on Form 8-K with the
Securities and Exchange Commission providing information in response to Item 5
of such report. No financial statements or pro forma financial information was
included in this report.
<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 16, 1998 /s/Louis V. Aronson II
----------------- ----------------------------------------
Louis V. Aronson II, President
and Chief Executive Officer
(Signing as Duly Authorized
Officer of the Registrant)
Date: November 16, 1998 /s/Daryl K. Holcomb
----------------- ----------------------------------------
Daryl K. Holcomb, Vice President
and Chief Financial Officer,
Controller and Treasurer
(Signing as Chief Financial
Officer of the Registrant)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 286
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Exhibit 99(a)
Registrar and Transfer
Company
RONSON CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 27, 1998
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 October 27,
1998, hereby certify that the number of shares of stock outstanding is 3,259,091
and the number of shares entitled to vote is 3,196,761; that the number of
shares present thereat in person or by proxy is 2,564,025; that we received the
votes of the Stockholders of said Meeting; and that:
1. ELECTION OF DIRECTORS:
Class II (Term expires 2001)
FOR % WITHHOLD %
--- - -------- -
Robert A. Aronson 2,146,787 67 417,238 13
Erwin M. Ganz 2,147,971 67 416,054 13
Justin P. Walder 2,148,769 67 415,256 13
Class III (Term expires 1999)
Albert G. Besser 2,148,983 67 415,042 13
2. To ratify the appointment of DEMETRIUS & COMPANY L.L.C., as independent
auditors for the year 1998.
FOR % AGAINST % ABSTAIN %
--- - ------- - ------- -
2,221,639 69 330,687 10 11,699 .3
3. The Board of Directors strongly RECOMMENDS a vote "AGAINST" the Shareholder
Proposal, on page 10 of the Proxy Statement.
FOR % AGAINST % ABSTAIN % NON-VOTE %
--- - ------- - ------- - -------- -
497,700 15 1,666,350 52 25,293 .8 374,682 11
/s/Florence P. Bogaenko
----------------------------
Florence P. Bogaenko
/s/Margaret A. Villani
----------------------------
Margaret A. Villani
