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, 1998
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
- ------------------------ ---------------------------------
(State of incorporation) (IRS Employer Identification No.)
CAMPUS DRIVE, P.O. BOX 6707, SOMERSET, N.J. 08875
- ------------------------------------------- ---------------
(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 [ ]
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 $5,771,670 as of March 10, 1999.
As of March 10, 1999, there were 3,197,142 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 22, 1999 By: /s/Louis V. Aronson II
------------------------------------
Louis V. Aronson II, President &
Chief Executive Officer and Director
Dated: April 22, 1999 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, 1998.
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 12, 1999, we reported on the consolidated balance sheets of
Ronson Corporation and subsidiaries as of December 31, 1998 and 1997, and the
related consolidated statements of operations, changes in stockholders' equity
and cash flows for each of the years in the three year period ended December 31,
1998 as contained in the annual report on Form 10-K for the year 1998. 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.
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DEMETRIUS & COMPANY, L.L.C.
Wayne, New Jersey
March 12, 1999
<PAGE>
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
RONSON CORPORATION
<TABLE>
<CAPTION>
CONDENSED BALANCE SHEETS
(dollars in thousands)
DECEMBER 31,
ASSETS 1998 1997
------ ---- ----
<S> <C> <C>
CURRENT ASSETS:
Cash $ -- $ 4
Other current assets 187 109
-------- --------
Total Current Assets 187 113
Property, plant, and equipment 232 220
Less accumulated depreciation and amortization 196 180
-------- --------
36 40
Other assets 2,856 2,833
-------- --------
TOTAL ASSETS $ 3,079 $ 2,986
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 190 $ 167
Other current liabilities 530 530
-------- --------
Total Current Liabilities 720 697
Pension obligation -- 60
Other long-term liabilities 214 365
Commitments and Contingencies
STOCKHOLDERS' EQUITY:
Preferred stock -- --
Common stock 3,260 3,226
Additional paid-in capital 29,007 28,991
Accumulated deficit (27,442) (27,153)
Accumulated other comprehensive deficit (1,086) (1,606)
-------- --------
3,739 3,458
Less cost of treasury shares:
1998, 62,365 and 1997, 62,332 common shares 1,594 1,594
-------- --------
2,145 1,864
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,079 $ 2,986
======== ========
</TABLE>
See notes to condensed financial statements.
<PAGE>
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
RONSON CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(dollars in thousands)
<TABLE>
<CAPTION>
Year Ended December 31,
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Management administration (from wholly
owned subsidiaries eliminated
in consolidation) $ 1,940 $ 1,720 $ 1,734
------- ------- -------
Costs and expenses:
General and administrative expenses 1,633 1,436 1,292
Interest expense (includes inter-
company interest expense of $100,
$113 and $120 in 1998, 1997 and
1996, respectively, eliminated in
consolidation) 149 155 157
Non-operating expense - net 202 99 136
------- ------- -------
1,984 1,690 1,585
------- ------- -------
EARNINGS (LOSS) BEFORE INCOME TAXES AND
EQUITY IN NET EARNINGS (LOSS)
OF SUBSIDIARIES (44) 30 149
Income tax benefits (provision) (90) (67) 20
Equity in net earnings (loss) of subsidiaries (includes loss from discontinued
operations of $949 and $1,190 in 1998 and 1996,
respectively) (155) 820 (1,024)
------- ------- -------
NET EARNINGS (LOSS) $ (289) $ 783 $ (855)
======= ======= =======
</TABLE>
See notes to condensed financial statements.
<PAGE>
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
RONSON CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(dollars in thousands)
<TABLE>
<CAPTION>
Year Ended December 31,
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net earnings (loss) $ (289) $ 783 $ (855)
Adjustments to reconcile net earnings
(loss) to net cash provided by (used in)
operating activities:
Equity in net (earnings) loss
of subsidiaries 138 (820) 1,024
Depreciation and amortization 16 16 14
Deferred income tax (benefits) expense 28 22 (48)
Increase (decrease) in cash from changes in:
Other current assets (27) (4) (35)
Accounts payable and other current
liabilities 110 124 (26)
Increase (decrease) in net advances from
subsidiaries (171) (81) (31)
Net change in pension-related accounts 175 (71) (31)
Other (22) 32 (39)
------- ------- -------
Net cash provided by (used in)
operating activities (42) 1 (27)
------- ------- -------
Cash Flows from Investing Activities:
Net cash used in investing activities,
capital expenditures (12) (2) (42)
------- ------- -------
Cash Flows from Financing Activities:
Exercise of stock options 17 -- 80
Issuance of common stock 50 -- --
Payments of leases -- -- (6)
Other (17) -- --
------- ------- -------
Net cash provided by
financing activities 50 -- 74
------- ------- -------
Net increase (decrease) in cash (4) (1) 5
Cash at beginning of year 4 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, 1998.
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 at December 31, 1998 and 1997. (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 3,197,142 and 3,163,275 were outstanding at
December 31, 1998 and 1997, respectively.
NOTE B: Debt.
In 1995 Ronson Consumer Products Corporation ("RCPC") entered into an
agreement with Summit Bank ("Summit") for a Revolving Loan and a Term Loan. In
March 1997 RCPC and Summit extended RCPC's Revolving Loan to June 30, 2000. The
Revolving Loan provides a line of credit up to $2,500,000 to RCPC. The Company
guaranteed the debts of RCPC to Summit under the Revolving Loan and Term Loan.
At December 31, 1998, the amount due by RCPC to Summit under the Revolving Loan
was $1,315,000. The Term Loan was paid in full in April 1998.
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 $125,000 as of December
31, 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. In 1998 Ronson-Canada and CIBC extended Ronson-Canada's
Revolving Loan to 1999. At December 31, 1998, the total amount due by
Ronson-Canada to CIBC under the line of credit was $105,000 (C$160,000). The
line of credit is guaranteed by the Company.
In August 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 expires
June 30, 2000. In October 1998 the Term Loan was amended, extending its maturity
to June 30, 2000. The Company and RCPC guaranteed the debts of Ronson Aviation
to Summit under the Revolving Loan and Term Loan. At December 31, 1998, the
amount due by Ronson Aviation to Summit under the Revolving Loan and Term Loan
was $214,000.
<PAGE>
In 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 $1,219,000
at December 31, 1998, 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 Summit
for Ronson Aviation's purchase of specific aircraft. The total outstanding
amount of these Company-guaranteed loans to Ronson Aviation at December 31,
1998, was $2,350,000.
NOTE C: Other Assets.
<TABLE>
<CAPTION>
December 31,
(in thousands)
1998 1997
---- ----
<S> <C> <C>
Investment in subsidiaries $2,313 $2,526
Prepaid pension assets 300 --
Intangible pension assets 106 133
Other 137 174
------ ------
$2,856 $2,833
====== ======
</TABLE>
Investment in subsidiaries was eliminated in consolidation. The fair
value of the Company's pension plan assets exceeded the projected benefit
obligation at December 31, 1998. 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: Other Long-Term Liabilities.
<TABLE>
<CAPTION>
December 31,
(in thousands)
1998 1997
---- ----
<S> <C> <C>
Net advances from subsidiaries $ 194 $ 365
Other 20 --
----- -----
$ 214 $ 365
===== =====
</TABLE>
The net advances from subsidiaries of $194,000 and $365,000 at
December 31, 1998 and 1997, 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.
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 that entity to also be 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. In the fourth quarter of 1998, the Company
offered to settle the matter for six equal payments totalling $90,000, to be
paid semiannually over three years. Although the Settlement Offer includes
various options at costs of from $307,000 to $376,000 and the Company has
offered to settle the matter for $90,000, the Company's final contribution, if
any, is not yet determinable. As of December 31, 1998, the Company has accrued
the amount of its offer and related expenses.
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, 2002. Base salaries in the years 1999, 2000, 2001 and
2002 are $529,408, $566,466, $606,119 and $648,547, respectively, and the
contract provides for additional compensation and benefits, including a death
benefit equal to two years' salary.
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
1998, 1997 and 1996, the Company and its subsidiaries recorded the benefits
(expenses) of net deferred income tax assets of $727,000, $225,000 and $390,000,
respectively, of which $(28,000), $(22,000) and $48,000, respectively, were
allocated to the Company.
<PAGE>
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, 1998, totalled $1.3125 per share
of preferred stock (twenty-five quarters at $0.0525 per share per quarter), or
approximately $48,000 in the aggregate.
<PAGE>
RONSON CORPORATION
AND ITS WHOLLY OWNED SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
(dollars in thousands)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
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> <C>
Allowance for doubtful
accounts:
Year Ended 12/31/98 $ 76 $ 52 $ -- $38 (1) $ 90
Year Ended 12/31/97 64 34 -- 22 (1) 76
Year Ended 12/31/96 86 46 -- 68 (1) 64
Valuation allowance for
deferred income
tax assets:
Year Ended 12/31/98 $3,059 $ -- $ -- $1,659 (2) $1,400
Year Ended 12/31/97 4,035 -- -- 976 (2) 3,059
Year Ended 12/31/96 3,902 -- 523 390 (2) 4,035
</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.
