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
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to ________.
Commission File No. 1-1031
RONSON CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
NEW JERSEY 22-0743290
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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: (732) 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 Over-the-Counter Bulletin Board
Preferred Stock
No par value
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [ X ] NO [ ]
<PAGE>
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (229.505 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K/A
or any amendment to this Form 10-K/A. [ ]
The aggregate market value of voting stock held by non-affiliates of the
registrant was $6,914,801 as of March 10, 1998.
As of March 10, 1998, there were 3,177,175 shares of the registrant's common
stock outstanding.
<PAGE>
Item 5 - MARKET FOR THE COMPANY'S COMMON STOCK AND
RELATED STOCKHOLDER MATTERS
Item 5 is hereby amended to add the following.
On November 15, 1996, the Registrant, Ronson Corporation (the
"Company"), issued an offer to exchange up to 1,423,912 aggregate shares of its
common stock for all of the 837,595 issued and outstanding shares of its 12%
Cumulative Convertible Preferred Stock. For each share of preferred stock
exchanged, the Company offered to issue 1.7 shares of common stock. The terms
and conditions of the offer were more fully described in the Schedule 13E-4, the
Offering Circular and the accompanying Letter of Transmittal dated November 15,
1996 (together the "Exchange Offer"). These items were previously filed with the
SEC and are incorporated herein by reference. The Company's Exchange Offer
expired on September 30, 1997. During the year ended December 31, 1997, the
Company issued 1,361,435 shares of common stock under the Exchange Offer.
The Company received a total of 800,844 shares of preferred stock
tendered in exchange for the common shares. The preferred shares received were
retired and cancelled.
The issuance by the Company of shares of common stock in exchange for
shares of preferred stock in the Exchange Offer was in reliance on the exemption
from the registration requirements of the Securities Act of 1933, as amended,
provided by Section 3(a)(9) of the 1933 Act. That section provides an exemption
from registration "for any security exchanged by the issuer with its existing
shareholders exclusively where no commission or other remuneration is paid or
given directly or indirectly for soliciting such exchange". Since both the
preferred stock and the common stock involved in the Exchange Offer are
securities of the Company, and the Company exchanged one of its securities for
another of its securities exclusively with its existing security holders without
paying any commission or other remuneration for soliciting the exchange, the
Exchange Offer met all the requirements for exemption as provided by Section
3(a)(9).
<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 15, 1998 By: /s/Louis V. Aronson II
----------------------
Louis V. Aronson II, President &
Chief Executive Officer and Director
Dated: April 15, 1998 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
Company and its wholly owned subsidiaries for the fiscal year ended December 31,
1997.
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 11, 1998, we reported on the consolidated balance sheets of
Ronson Corporation and subsidiaries as of December 31, 1997 and 1996, and the
related consolidated statements of operations, and cash flows for each of the
years in the three year period ended December 31, 1997 as contained in the
annual report on Form 10-K for the year 1997. In connection with our audits of
the aforementioned consolidated financial statements, we also audited the
related financial statement schedules as listed in the accompanying index. These
financial statement schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statement schedules based on our audits.
In our opinion, the related financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly, in all material respects, the information set forth therein.
/s/DEMETRIUS & COMPANY, L.L.C.
- ------------------------------
DEMETRIUS & COMPANY, L.L.C.
Wayne, New Jersey
March 11, 1998
<PAGE>
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
RONSON CORPORATION
<TABLE>
<CAPTION>
CONDENSED BALANCE SHEETS
(in thousands of dollars)
DECEMBER 31,
ASSETS 1997 1996
-------- --------
<S> <C> <C>
CURRENT ASSETS:
Cash ............................................... $ 4 $ 5
Other current assets ............................... 109 98
-------- --------
Total Current Assets .......................... 113 103
Property, plant, and equipment ..................... 220 218
Less accumulated depreciation and amortization ..... 180 164
-------- --------
40 54
Other assets ....................................... 2,833 2,169
-------- --------
TOTAL ASSETS ....................................... $ 2,986 $ 2,326
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable ................................... $ 167 $ 128
Other current liabilities .......................... 530 542
-------- --------
Total Current Liabilities ..................... 697 670
Pension obligation ................................. 60 --
Other long-term liabilities ........................ 365 446
Commitments and Contingencies
STOCKHOLDERS' EQUITY:
Preferred stock .................................... -- 8
Common stock ....................................... 3,226 1,864
Additional paid-in capital ......................... 28,991 30,345
Accumulated deficit ................................ (27,153) (27,936)
Unrecognized net loss on pension plans ............. (1,545) (1,441)
Cumulative foreign currency translation adjustment . (61) (36)
-------- --------
3,458 2,804
Less cost of treasury shares:
1997, 62,332 and 1996, 62,105 common shares .. 1,594 1,594
-------- --------
1,864 1,210
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ......... $ 2,986 $ 2,326
======== ========
</TABLE>
See notes to condensed financial statements.
<PAGE>
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
RONSON CORPORATION
<TABLE>
<CAPTION>
CONDENSED STATEMENTS OF OPERATIONS
(in thousands of dollars)
YEAR ENDED DECEMBER 31,
1997 1996 1995
------- ------- -------
<S> <C> <C> <C>
Management administration (from wholly
owned subsidiaries eliminated
in consolidation) ................................ $ 1,720 $ 1,734 $ 1,925
------- ------- -------
Costs and expenses:
General and administrative expenses .............. 1,436 1,292 1,338
Interest expense (includes inter-
company interest expense of $113,
$120 and $38 in 1997, 1996 and
1995, respectively, eliminated in
consolidation) ................................. 155 157 76
Non-operating expense - net ...................... 99 136 134
------- ------- -------
1,690 1,585 1,548
------- ------- -------
EARNINGS BEFORE INCOME TAXES AND
EQUITY IN NET EARNINGS (LOSS)
OF SUBSIDIARIES .................................. 30 149 377
Income tax benefits (provision) ...................... (67) 20 81
Equity in net earnings (loss) of subsidiaries
(includes loss from discontinued operations
of $1,190 and $860 in 1996 and 1995, respectively) 820 (1,024) 182
------- ------- -------
NET EARNINGS (LOSS) .................................. $ 783 $ (855) $ 640
======= ======= =======
</TABLE>
See notes to condensed financial statements.
<PAGE>
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
RONSON CORPORATION
<TABLE>
<CAPTION>
CONDENSED STATEMENTS OF CASH FLOWS
(in thousands of dollars)
YEAR ENDED DECEMBER 31,
1997 1996 1995
------- ------- -------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net earnings (loss) .......................... $ 783 $ (855) $ 640
Adjustments to reconcile net earnings
(loss) to net cash provided by (used in)
operating activities:
Equity in net (earnings) loss
of subsidiaries .......................... (820) 1,024 (182)
Depreciation and amortization .............. 16 14 12
Deferred income tax (benefits) expense ..... 22 (48) (15)
Increase (decrease) in cash from changes in:
Other current assets ..................... (4) (35) 23
Accounts payable and other current
liabilities ............................ 124 (26) (235)
Increase (decrease) in net advances from
subsidiaries ............................. (81) (31) 1,468
Net change in pension-related accounts ..... (71) (31) (1,674)
Other ...................................... 32 (39) (55)
------- ------- -------
Net cash provided by (used in)
operating activities ................. 1 (27) (18)
------- ------- -------
Cash Flows from Investing Activities:
Net cash used in investing activities,
capital expenditures ................. (2) (42) (3)
------- ------- -------
Cash Flows from Financing Activities:
Exercise of stock options .................. -- 80 31
Payments of leases ......................... -- (6) (10)
------- ------- -------
Net cash provided by
financing activities ................. -- 74 21
------- ------- -------
Net increase (decrease) in cash .............. (1) 5 --
Cash at beginning of year .................... 5 -- --
------- ------- -------
Cash at end of year .......................... $ 4 $ 5 $ --
======= ======= =======
</TABLE>
See notes to condensed financial statements.
<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 ended December 31, 1997.
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
36,518 and 837,595 at December 31, 1997 and 1996, 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 3,163,275 and 1,801,834 were outstanding at December
31, 1997 and 1996, respectively.
NOTE B: Debt.
In January 1995 Ronson Consumer Products Corporation ("RCPC") entered
into an agreement with Summit Bank ("Summit") 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, 1997, the
amount due by RCPC to Summit under the Revolving Loan and Term Loan was
$2,072,000.
In July 1997 RCPC and Summit amended the Revolving Loan agreement to
provide $400,000 in additional loan availability. The outstanding amount under
the agreement for the additional loan availability of $356,000 as of December
31, 1997, is included in the balance of the Revolving Loan in the paragraph
above.
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. In 1997 Ronson-Canada and CIBC extended
Ronson-Canada's Revolving Loan to 1998. At December 31, 1997, the total amount
due by Ronson-Canada to CIBC under the line of credit was $123,000 (C$176,000).
The line of credit is guaranteed by the Company.
On August 28, 1997, Ronson Aviation, Inc. ("Ronson Aviation") entered
into an agreement with Summit for a Revolving Loan and a Term Loan (in the
original amount of $285,000). The Revolving Loan provides a line of credit up to
$400,000 to Ronson Aviation and is payable on demand under an agreement which
<PAGE>
expires August 31, 2000. The Company and RCPC guaranteed the debts of Ronson
Aviation to Summit under the Revolving Loan and Term Loan. At December 31, 1997,
the amount due by Ronson Aviation to Summit under the Revolving Loan and Term
Loan was $271,000. The proceeds of the Term Loan were used to repay the balance
remaining of the prior mortgage loan due from Ronson Aviation to Bank of New
York/National Community Division.
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
$1,248,000 at December 31, 1997, is secured by a first mortgage on the land,
buildings and improvements of RCPC and is payable in sixty monthly installments
of $11,589, including interest, and a final installment on December 1, 2000, of
$1,155,000. The loan bears interest at a fixed rate of 8.75%.
The Company has guaranteed the loans of Ronson Aviation from various
lenders for Ronson Aviation's purchase of specific aircraft. The guarantees
outstanding at December 31, 1997, were provided to Summit and Cessna Finance
Corporation. The total outstanding amount of these Company-guaranteed loans to
Ronson Aviation at December 31, 1997, was $2,416,000.
NOTE C: Other Assets.
December 31,
(in thousands)
1997 1996
------ ------
Investment in subsidiaries $2,526 $1,774
Intangible pension assets 133 159
Other 174 236
------ ------
$2,833 $2,169
====== ======
Investment in subsidiaries was eliminated in consolidation. The Company
is amortizing the intangible pension assets in accordance with the provisions of
Statement of Financial Accounting Standards ("SFAS") #87, "Employers' Accounting
for Pensions".
NOTE D: Net Advances from Subsidiaries.
The net advances from subsidiaries balances of $365,000 and $446,000 at
December 31, 1997 and 1996, 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.
<PAGE>
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 net proceeds
of the sale of the property satisfied a substantial portion of a 1994 settlement
with the United States Department of Labor ("DOL") and the Internal Revenue
Service ("IRS"). The $144,000 balance of the settlement was paid by the Company
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.
The Company is involved in various 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.
The Company has an employment contract with an officer. The contract
expires on December 31, 2000. Base salaries in the years 1998, 1999 and 2000 are
$494,773, $529,408 and $566,466, respectively, and the contract provides for
additional compensation and benefits, including a death benefit equal to two
years' salary.
<PAGE>
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.
In accordance with SFAS #109, "Accounting for Income Taxes" 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 1997,
1996 and 1995, the Company and its subsidiaries recorded the benefits (expenses)
of net deferred income tax assets of $225,000, $390,000 and $686,000,
respectively, of which $(22,000), $48,000 and $15,000, respectively, 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.
NOTE I: Preferred Stock.
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's Exchange Offer expired on September 30,
1997. After the expiration of the offer, the Company had accepted 800,844 shares
of preferred stock for exchange and had issued 1,361,435 shares of common stock
under the Company's Exchange Offer.
Dividends in arrears at December 31, 1997, totalled $1.1025 per share
of preferred stock (twenty-one quarters at $0.0525 per share per quarter), or
approximately $40,000 in the aggregate. If the Company had not done the Exchange
Offer, the aggregate dividends in arrears would have been about $923,000.
<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 12/31/97 $ 64 $34 $ - $ 22 (1) $ 76
Year Ended 12/31/96 86 46 - 68 (1) 64
Year Ended 12/31/95 95 20 - 29 (1) 86
Valuation allowance for
deferred income
tax assets:
Year Ended 12/31/97 $4,035 $ - $ - $ 976 (2) $3,059
Year Ended 12/31/96 3,902 - 523 390 (2) 4,035
Year Ended 12/31/95 4,783 - - 881 (2) 3,902
</TABLE>
(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.
