SECURITIES & EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) Oct. 30, 1998 (Oct. 27, 1998)
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RONSON CORPORATION
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(Exact name of registrant as specified in its charter)
New Jersey 1-1031 22-0743290
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Corporate Park III, Campus Dr., P.O. Box 6707, Somerset, NJ 08875-6707
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (732) 469-8300
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RONSON CORPORATION
FORM 8-K INDEX
ITEM 5. OTHER EVENTS
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
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Item 5. Other Events
On October 27, 1998, the Registrant, Ronson Corporation (the
"Company"), at its Annual Meeting of Shareholders, distributed the Ronson
Corporation Evaluation of Certain Investments of Warren Lichtenstein/Steel
Partners (WL/SP), (the "Evaluation"). The Evaluation is attached hereto as
Exibit 99.a).
Item 7. Financial Statements and Exhibits
a) Financial Statements: None.
b) Pro Forma Financial Information: None.
c) Exhibits:
99.a) Ronson Corporation Evaluation of Certain Investments of Warren
Lichtenstein/Steel Partners (WL/SP).
SIGNATURE
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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 hereunto duly authorized.
Ronson Corporation
/s/Daryl K. Holcomb
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Daryl K. Holcomb
Vice President and
Chief Financial Officer,
Controller and Treasurer
Dated: October 30, 1998
Exhibit 99.a
RONSON CORPORATION
EVALUATION OF CERTAIN INVESTMENTS OF
WARREN LICHTENSTEIN/STEEL PARTNERS (WL/SP)
(All information in this analysis was derived from publicly filed documents.)
I. FAILURE TO OPERATE WITHIN LAWS AND REGULATIONS
LEGAL MATTERS:
1. Kinark (KIN) - In October 1995, WL/SP admitted to violations of Section
16(b) of the Securities Exchange Act of 1934, after notice by Kinark.
WL/SP was forced to "disgorge" the profits to Kinark (1).
2. Auto Info (AUTO) - In 1995, Auto Info sued WL/SP and other large
shareholders for violating securities laws by, among other things,
forming an undisclosed group(2). As a result, one of those other large
shareholders entered into an agreement with Auto Info (3).
3. Medical Imaging Centers (MICA) - In January 1996, MICA sued WL/SP
claiming that WL/SP had violated securities laws by forming an
undisclosed group. In March 1996, the court ruled in favor of MICA (4).
CORPORATE GOVERNANCE:
1. Gateway - No election for directors has been held since 1995.
II. MANAGEMENT CAPABILITIES OF WL/SP
GATEWAY INDUSTRIES:
1. Gateway had stockholders' equity as follows:
12/31/92 $8,672,000 (5)
12/31/93 $6,562,000 (6, Pg F-4) WL became a director 5/94 (7)
12/31/94 $3,293,000 (6, Pg F-4)
12/31/95 $3,181,000 (6, Pg F-2)
12/31/96 $5,688,000 (8) Rights Offering netting
$ 5,608,000 (9, Pg F-8)
12/31/97 $5,349,000 (9, Pg F-5)
From May 1994, as a director and later as C.E.O. (October 1995) (7), WL
presided over the dissipation of about $6,821,000 in stockholders' equity
(12/31/93 to 12/31/97). He did not provide shareholder value.
2. As the Chairman of Gateway, WL arranged for the acquisition of Marsel
Mirror in November 1995 for about $2.8 million (6, Pg 7). Through 1996,
WL managed Gateway and Marsel. In December 1996, WL completed the sale of
Marsel's assets and business for $1 (9, Pg F-7). Meanwhile, Gateway
remained liable for over $375,000 in Marsel liabilities (9, Pg F-7). This
WL-arranged acquisition of Marsel, managed by WL, resulted in losses of
over $3 million to Gateway shareholders.
3. Since 1996, WL has managed only cash, over $5,000,000 (9, Pg F-3), at
Gateway, resulting in losses before investment activities of $31,000 in
1997 (9, Pg F-4) and income of only $8,000 in the first half of 1998 (10,
Pg 6). Investment losses in 1997 were $308,000 (9, Pg F-4).
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II. MANAGEMENT CAPABILITIES (CONTINUED)
4. WL has accomplished at Gateway what he has proposed for Ronson - the sale
and liquidation of the company's original business. The proceeds from
that sale were used to purchase Marsel, the total investment in which was
lost. His plan (the same he appears to have for Ronson) delivered only
losses to the shareholders.
ROSE'S HOLDINGS:
1. WL became a director of Rose's in October 1996 (11), and President on
December 2, 1997 (12, Pg 6). In December 1997, Rose's sold its business
for a net loss of about $22,446,000 (13, Pg 10), or over 60% of the July
1997 stockholders' equity. Once again, WL/SP's plan (similar to the one
he seems to have for Ronson) resulted in a large loss.
2. As with Gateway, in the first half of 1998, WL managed only cash, about
$13,000,000, at Rose's (13, Pg 5), and Rose's lost $112,000 in the period
(13, Pg 4).
III. RELATED PARTY TRANSACTIONS (SELF-ENRICHMENT BY LICHTENSTEIN)
GATEWAY INDUSTRIES:
1. WL was paid a fee of $175,000 to arrange the purchase by Gateway of
Marsel (6, Pg 15).
2. Gateway, publicly held, leased space in New York in 1998, even though
Gateway has no operations. Gateway subleased a portion of the space to
WL's companies with Gateway absorbing a portion of the cost. Annual lease
costs to Gateway are $97,000 and the income from affiliates is $65,000,
for a net annual Gateway loss of $32,000 (10, Pg 9).
3. WL has charged Gateway's administrative expenses ($73,000 in 1997) even
though Gateway has no operations (9, Pg F-13).
ROSE'S HOLDINGS:
l. WL served as president of Rose's, a company with only cash assets, but
took stock options totaling 422,291 shares for nine months of services as
the C.E.O. (12, Pg 10). Jack Howard, another affiliated official, took
options totaling 225,000 shares (13, Pg 15). This equates to over 7% of
the company.
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IV. RETURNS TO ALL SHAREHOLDERS OF GATEWAY INDUSTRIES AND ROSE'S HOLDINGS
Key Trading Data Comparisons
High Low
Gateway Industries (including Marsel Mirror):
Comparison of Price When WL Became a Director of Gateway and the Most
Recently Reported Information
Second Fiscal Quarter, 1994 $5.63 $3.44 (6, Pg 6)
First Fiscal Quarter, 1998 2.50 1.5625 (9, Pg 3)
Comparison of Price When WL Became Chairman of Gateway and the Most
Recently Reported Information
Fourth Fiscal Quarter, 1995 $4.25 $2.88 (6, Pg 6)
First Fiscal Quarter, 1998 2.50 1.5625 (9, Pg 3)
Comparison of Highest Trade Price Over Last 5 Years vs. Most Recently
Reported Information
First Fiscal Quarter, 1996 $9.00 (9, Pg 3)
First Fiscal Quarter, 1998 2.50 1.5625 (9, Pg 3)
(Similar basis as WL's statements
about Ronson's stock price comparison)
Rose's Holdings:
(All time periods are based on fiscal years ending in January.)
Comparison of Price When WL Became a Director of Rose's and the Most
Recently Reported Information
Third Fiscal Quarter, 1997 $1.844 $1.50 (14)
Fourth Fiscal Quarter, 1998 1.6875 1.4375 (14)
Comparison of Highest Trade Price Over Last 5 Years vs. Most Recently
Reported Information
Second Fiscal Quarter, 1996 $3.375 (15)
Fourth Fiscal Quarter, 1998 1.6875 1.4375 (14)
Summary:
Since WL became a director, Gateway's share price has lost about 55% of its
value, and Rose's has lost about 7% of its value. When using the basis used by
WL in the analysis of Ronson's stock by comparison with the highest trade since
1994, Gateway has lost 77% of its value, and Rose's has lost about 54% of its
value.
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REFERENCES
1. Kinark Corp., Form 8-K, 10/13/98, Pg 1,2.
2. Auto Info., Inc., Dow Jones News, 6/15/95, 11:38 a.m.
3. Auto Info., Inc., Bloomberg News, 6/22/95.
4. Medical Imaging Centers of America, Inc., Form 10-K, 12/31/95, Pg 8.
5. Gateway Communications, Inc., Form 10-K, 12/31/92, Pg 10.
6. Gateway Industries, Inc., Form 10-KSB, 12/31/95.
7. Gateway Industries, Inc., Form 10-KSB, 12/31/96, Pg 5.
8. Gateway Industries, Inc., Form 10-KSB/A, 12/31/96, Pg F-2.
9. Gateway Industries, Inc., Form 10-KSB, 12/31/97.
10. Gateway Industries, Inc., Form 10-QSB, 6/30/98.
11. Rose's Stores, Inc., Form 14-A, 10/21/96, Pg 3.
12. Rose's Holdings, Inc., Form 14-A, 10/6/98.
13. Rose's Holdings, Inc., Form 10-Q, 8/1/98.
14. Rose's Holdings, Inc., Form 10-K, 1/31/98, Pg 9.
15. Rose's Stores, Inc., Form 10-K, 1/27/96, Item 5.
