SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(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, 1994
-----------------
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 number 0-8135
SIGMA-ALDRICH CORPORATION
-----------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 43-1050617
------------------------------ ---------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3050 Spruce Street, St. Louis, Missouri 63103
--------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 314-771-5765
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $1.00 par value
-----------------------------
(Title of Class)
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 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 or any amendment to this
Form 10-K. [X]
Aggregate market value of the voting stock held by
non-affiliates of the Registrant:
$1,642,854,339 March 7, 1995
-------------- -----------------
Value Date of Valuation
Number of shares outstanding of each of the Registrant's
classes of common stock, as of March 7, 1995:
Common Stock, $1.00 par value, 49,850,757 shares outstanding
The following documents are incorporated by reference in the Parts
of Form 10-K indicated below:
Parts of Form 10-K into
Documents Incorporated by Reference which Incorporated
------------------------------------ -----------------------
Pages 11-24 of the Annual Report to
Shareholders for the year ended
December 31, 1994 Parts I, II and IV
Proxy Statement for the 1995 Annual
Meeting of Shareholders Part III
The Index to Exhibits is located on page F-3 of this report.
<PAGE>
PART I
--------------------------------------------------------------------------------
Item 1. Business.
--------------------------------------------------------------------------------
Sigma-Aldrich Corporation engages through subsidiaries in two
lines of business: the production and sale of a broad range of
biochemicals, organic and inorganic chemicals, radiolabeled
chemicals, diagnostic reagents, chromatography products and related
products (hereinafter referred to as "chemical products"), and the
manufacture and sale of metal components for strut, cable tray,
pipe support and telecommunication systems and electrical
enclosures (hereinafter referred to as "metal products" or
"B-Line"). Its principal executive offices are located at 3050 Spruce
Street, St. Louis, Missouri 63103.
Sigma-Aldrich Corporation (hereinafter referred to as the
"Company", which term includes all consolidated subsidiaries of the
Company) was incorporated under the laws of the State of Delaware
in May 1975. Effective July 31, 1975 ("Reorganization"), the
Company succeeded, as a reporting company, Sigma International,
Ltd., the predecessor of Sigma Chemical Company ("Sigma"), and
Aldrich Chemical Company, Inc. ("Aldrich"), both of which had
operated continuously for more than 20 years prior to the
Reorganization. Effective December 9, 1980, B-Line Systems, Inc.
("B-Line"), previously a subsidiary of Sigma, became a subsidiary of the
Company.
Effective June 23, 1989, the Company purchased all of the
issued and outstanding capital stock of Fluka Chemie AG ("Fluka"),
a Swiss corporation, from Ciba-Geigy International AG, F. Hoffman-
LaRoche & Co. Limited and eleven minority shareholders.
Effective May 5, 1993, the Company acquired the net assets and
business of Supelco, Inc.("Supelco"), a worldwide supplier of
chromatography products used in chemical research and production,
from Rohm and Haas Company.
(a) Chemical Products.
-------------------------------------------------------------------------------
1) Products:
The Company distributes approximately 76,000 chemical products
for use primarily in research and development, in the diagnosis of
disease, and as specialty chemicals for manufacturing. In
laboratory applications, the Company's products are used in the
fields of biochemistry, synthetic chemistry, quality control and
testing, immunology, hematology, pharmacology, microbiology,
neurology and endocrinology and in the studies of life processes.
Sigma diagnostic products are used in the detection of heart, liver
and kidney diseases and various metabolic disorders. Certain of
these diagnostic products are used in measuring concentrations of
various naturally occurring substances in the blood, indicative of
certain pathological conditions. The diagnostic products are used
in manual, semi-automated and automated testing procedures.
Supelco offers a full line of chromatography products and
application technologies for analyzing and separating complex
chemical mixtures. The line includes items for the collection and
preparation of various samples for further chemical analysis, gas
and liquid chromatography, reference standards and related
laboratory products.
Aldrich also offers approximately 60,000 esoteric chemicals as
a special service to customers interested in screening them for
application in many areas (such as medicine and agriculture).
This area accounts for less than 1% of the Company's sales.
Because of continuing developments in the field of research,
there can be no assurance of a continuing market for each of the
Company's products. However, through a continuing review of
technical literature, along with constant communications with
customers, the Company keeps abreast of the trends in research and
diagnostic techniques. This information, along with its own
research technology, determines the Company's development of
improved and/or additional products.
2) Production and Purchasing:
The Company has chemical production facilities in Milwaukee
and Sheboygan, Wisconsin (Aldrich); St. Louis, Missouri (Sigma);
Bellefonte, Pennsylvania (Supelco); Germany (Aldrich Chemie GmbH
and Co. K.G.); Israel (Sigma Israel Chemicals Ltd.); Switzerland
(Fluka) and the United Kingdom (Sigma-Aldrich Company Ltd.). A
minor amount of production is done by some of the Company's other
subsidiaries. Biochemicals and diagnostic reagents are primarily
produced by extraction and purification from yeasts, bacteria and
other naturally occurring animal and plant sources. Organic and
inorganic chemicals and radiolabeled chemicals are primarily
produced by synthesis. Chromatography media and columns are
produced using proprietary chemical synthesis and proprietary
preparation processes. Similar processes are used for filtration
and sample collection processes.
Of the approximately 76,000 products listed in the Sigma,
Aldrich, Fluka and Supelco catalogs, the Company produced
approximately 35,000 which accounted for 45% of the net sales of
chemical products for the year ended December 31, 1994. The
remainder of products were purchased from a large number of sources
either under contract or in the open market.
No one supplier accounts for as much as 10% of the Company's
chemical purchases. The Company has generally been able to obtain
adequate supplies of products and materials to meet its needs.
Whether a product is produced by the Company or purchased from
outside suppliers, it is subjected to quality control procedures,
including the verification of purity, prior to final packaging.
This is done by a combined staff of approximately 230 chemists and lab
technicians utilizing sophisticated scientific equipment.
3) Distribution and Sales:
The Company markets its chemical products primarily through
Sigma, Aldrich, Fluka and Supelco under their own trademarks and
labels. Marketing of products is primarily done through the
distribution of over 2,800,000 comprehensive catalogs to customers
and potential customers throughout the world. This is supplemented
by certain specialty catalogs, by advertising in chemical and other
scientific journals, by direct mail distribution of in-house
publications and special product brochures and by personal visits
by technical and sales representatives with customers.
For customer convenience, Sigma packages approximately 300
combinations of certain of its individual products in diagnostic
kit form. A diagnostic kit will include products which, when used
in a series of manual and/or automated testing procedures, will aid
in detecting particular conditions or diseases. The sale of these
kits is promoted by a field sales unit. Diagnostic kits accounted
for approximately 10% of the Company's sales of chemical products
in the year ended December 31, 1994.
During the year ended December 31, 1994, products were sold to
approximately 134,000 customers, including hospitals, universities and
clinical laboratories as well as private and governmental research
laboratories. The majority of the Company's sales are small orders
in laboratory quantities averaging approximately $200. The Company
also makes its chemical products available in larger-than-normal
laboratory quantities for use in manufacturing. Sales of these
products accounted for approximately 15% of chemical sales in 1994.
During the year ended December 31, 1994, no one customer and no one
product accounted for more than 1% of the net sales of chemical
products.
Sigma, Aldrich, Fluka and Supelco encourage their customers
and potential customers, wherever located, to contact them by
telephone "collect" or on "toll-free" WATS lines for technical
staff consultation or for placing orders. Order processing,
shipping, invoicing and product inventory are computerized.
Shipments are made seven days a week from St. Louis, six days a
week from Milwaukee, England, Germany, Israel and Japan and five
days a week from all other locations. The Company strives to ship
its products to customers on the same day an order is received and
carries significant inventories to maintain this policy.
4) International Operations:
In the year ended December 31, 1994, 51% of the
Company's net sales of chemical products were to customers located
in foreign countries. These sales were made directly by Sigma,
Aldrich, Fluka and Supelco, through distributors and by
subsidiaries organized in Australia, Austria, Belgium, Brazil, Canada,
Czech Republic, England, France, Germany, Holland, Hungary, India,
Israel, Italy, Japan, Mexico, Poland, Scotland, Singapore, South Korea,
Spain, Sweden and Switzerland. Several foreign subsidiaries also have
production facilities.
For sales with final destinations in a foreign market, the
Company has a Foreign Sales Corporation ("FSC") subsidiary which
provides certain Federal income tax advantages. The effect of the
tax rules governing the FSC is to lower the effective Federal income
tax rate on export income. The Company intends to continue to comply
with the provisions of the Internal Revenue Code relating to FSCs.
The Company's foreign operations and domestic export sales are
subject to currency revaluations, changes in tariff restrictions
and restrictive regulations of foreign governments, among other
factors inherent in these operations. The Company is unable to
predict the extent to which its business may be affected in the
future by these matters. During the year ended December 31, 1994,
approximately 15% of the Company's domestic operations' chemical
purchases were from foreign suppliers. Additional information
regarding international operations is included in Note 10 to the
consolidated financial statements on pages 21 and 22 of the 1994
Annual Report which is incorporated herein by reference.
5) Patents and Trademarks:
The Company's patents are not material to its operations. The
Company's significant trademarks are the brand names "Sigma",
"Aldrich", "Fluka", "Supelco" and "B-Line" and their related logos
which have various expiration dates and are expected to be renewed
indefinitely.
6) Regulations:
The Company engages principally in the business of selling
products which are not foods or food additives, drugs or cosmetics
within the meaning of the Federal Food, Drug and Cosmetic Act, as
amended (the "Act"). A limited number of the Company's products,
including in-vitro diagnostic reagents, are subject to labeling,
manufacturing and other provisions of the Act. The Company
believes it is in compliance in all material respects with the
applicable regulations.
The Company believes that it is in compliance in all material
respects with Federal, state and local regulations relating to the
manufacture, sale and distribution of its products. The following are
brief summaries of some of the Federal laws and regulations which may
have an impact on the Company's business. These summaries are only
illustrative of the extensive regulatory requirements of the Federal,
state and local governments and are not intended to provide the specific
details of each law or regulation.
The Clean Air Act (CAA), as amended, and the regulations
promulgated thereunder, regulates the emission of harmful
pollutants to the air outside of the work environment. Federal or
state regulatory agencies may require companies to acquire permits,
perform monitoring and install control equipment for certain
pollutants.
The Clean Water Act (CWA), as amended, and the regulations
promulgated thereunder, regulates the discharge of harmful
pollutants into the waters of the United States. Federal or state
regulatory agencies may require companies to acquire permits,
perform monitoring and to treat waste water before discharge to the
waters of the United States or a Publicly Owned Treatment Works
(POTW).
The Occupational Safety and Health Act of 1970 (OSHA),
including the Hazard Communication Standard ("Right to Know"), and
the regulations promulgated thereunder, requires the labeling of
hazardous substance containers, the supplying of Material Safety
Data Sheets ("MSDS") on hazardous products to customers and
hazardous substances the employee may be exposed to in the
workplace, the training of the employees in the handling of
hazardous substances and the use of the MSDS, along with other
health and safety programs.
The Resource Conservation and Recovery Act of 1976 (RCRA), as
amended, and the regulations promulgated thereunder, requires
certain procedures regarding the treatment, storage and disposal of
hazardous waste.
The Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (CERCLA) and the Superfund Amendments and
Reauthorization Act of 1986 (SARA), and the regulations promulgated
thereunder, require notification of certain chemical spills and
notification to state and local emergency response groups of the
availability of MSDS and the quantities of hazardous materials in
the Company's possession.
The Toxic Substances Control Act of 1976 (TSCA), requires reporting,
testing and pre-manufacture notification procedures for certain chemicals.
Exemptions are provided from some of these requirements with respect to
chemicals manufactured in small quantities solely for research and
development use.
The Department of Transportation (DOT) has promulgated
regulations pursuant to the Hazardous Materials Transportation Act,
referred to as the Hazardous Material Regulations (HMR), which set
forth the requirements for hazard labeling, classification and
packaging of chemicals, shipment modes and other goods destined for
shipment in interstate commerce.
Approximately 900 products, for which sales are immaterial to
the total sales of the Company, are subject to control by either
the Drug Enforcement Administration ("DEA") or the Nuclear
Regulatory Commission ("NRC"). The DEA and NRC have issued
licenses to several Company sites to permit importation,
manufacture, research, analysis, distribution and export of certain
products. The Company screens customer orders involving products
regulated by the NRC and the DEA to verify that a license, if
necessary, has been obtained.
Approximately 400 products, for which sales are immaterial to the total
sales of the Company, are subject to control by the Department of Commerce
("DOC"). The DOC has promulgated the Export Administration Regulations
pursuant to the Export Administration Act of 1979, as amended, to
regulate the export of certain products by requiring a special export
license.
(b) Metal Products.
--------------------------------------------------------------------------------
Components for strut, cable tray and pipe support systems are
manufactured by B-Line at its facilities in Highland and Troy,
Illinois; Norcross, Georgia and Reno, Nevada. Components and
complete systems used to support telecommunications apparatus and
cabling are manufactured at the plant in Reno, Nevada. Circle AW
Products Company, which was acquired on June 16, 1993 and operates
as a wholly-owned subsidiary of B-Line, manufactures electrical
enclosures at its facilities in Portland, Oregon and Modesto, California.
Strut and pipe support systems are metal frameworks and
related accessories used in industry to support pipes, lighting
fixtures and conduit. Strut systems can be easily assembled with
bolts and spring-loaded nuts, eliminating the necessity of drilling
or welding associated with other types of frameworks. B-Line
manufactures and sells a wide variety of components for these
systems, including steel struts rolled from coils, stamped steel
fittings for interconnecting struts, shelf-supporting brackets,
pipe and conduit supporting clamps, and accessories for the
installation of strut systems on location. Pipe hangers are
generally used in conjunction with strut systems to support heavy
and light duty piping runs in the mechanical, plumbing and
refrigeration industry. The principal materials used by B-Line in
manufacturing are coils of steel and extruded aluminum which B-Line
purchases from a number of suppliers. No one supplier is essential
to B-Line's production. A limited number of components for strut
and pipe support systems, including bolts and nuts and certain
forged and cast components, are purchased from numerous sources and
sold by B-Line as accessories to its own manufactured products.
Cable tray systems are continuous networks of ventilated or
solid trays used primarily in the routing of power cables and
control wiring in power plant or industrial installations. The
systems are generally hung from ceilings or supported by strut
frameworks. Cable tray is produced from either extruded aluminum
or roll-formed steel in various configurations to offer versatility
to designers and installers. Non-metallic strut and cable tray
products, which are used primarily in corrosive environments, are
also available.
Telecommunications equipment racks and cable runways are
manufactured from aluminum or steel. The systems are installed in
the central offices of telephone operating companies. As switching
equipment is changed and upgraded, the systems are replaced.
Electrical enclosures are metal enclosure boxes, generally
manufactured from steel, that are used to contain and protect
electric meters, fuse and circuit breaker boards and electrical
panels. These products are used in industrial, commercial and
residential installations.
B-Line also manufactures a line of lightweight support
fasteners to be used in commercial and industrial facilities to
attach electrical and acoustical fixtures.
B-Line sells primarily to electrical, mechanical and
telecommunications wholesalers. Products are marketed directly by
district sales offices and by regional sales managers through
independent manufacturers' representatives. Products are shipped
to customers from the Highland and Troy, Illinois; Norcross,
Georgia; Reno, Nevada; Portland, Oregon; and Modesto, California
plants, from two regional warehouses and 49 consigned stock locations.
B-Line's products are advertised in trade journals and by circulation
of comprehensive catalogs.
(c) Competition.
--------------------------------------------------------------------------------
Substantial competition exists in all the Company's marketing
and production areas. Although no comprehensive statistics are
available, the Company believes it is a major supplier of organic
chemicals and biochemicals for research and for diagnostic testing
procedures involving enzymes and of chromatography products for
analyzing and separating complex chemical mixtures. A few
competitors, like the Company, offer thousands of chemicals and
stock and analyze most of their products. While the Company
generally offers a larger number of products, some of the Company's
products are unusual and have relatively little demand. In
addition, there are many competitors who offer a limited quantity
of chemicals, and several companies compete with the Company by
offering thousands of chemicals, although few of them stock or
analyze substantially all of the chemicals they offer for sale.
The Company believes its B-Line subsidiary to be among the
three largest producers of metal strut framing, pipe hangers and
cable tray component systems, although reliable industry statistics
are not available.
In all product areas the Company competes primarily on the
basis of customer service, product quality and price.
(d) Employees.
--------------------------------------------------------------------------------
The Company employed 5,534 persons as of December 31, 1994.
Of these, 4,402 were engaged in production and distribution of
chemical products. The B-Line subsidiary employed 1,132 persons.
The total number of persons employed within the United States was
4,082, with the balance employed by the foreign subsidiaries. The
Company employed over 1,500 persons who have degrees in chemistry,
biochemistry, engineering or other scientific disciplines,
including approximately 220 with Ph.D. degrees.
Employees engaged in chemical production, research and
distribution are not represented by any organized labor group.
B-Line's production workers at the Highland and Troy, Illinois
facilities are members of the International Association of
Machinists and Aerospace Workers, District No. 9 (AFL-CIO). The
labor agreement covering these employees expires November 12, 1995.
B-Line's production workers at the Norcross, Georgia facility are
members of the United Food and Commercial Workers International
(AFL-CIO), Retail Clerks Union Local 1063. The labor agreement
covering these employees expires June 13, 1998.
(e) Back-log of Orders.
-----------------------------------------------------------------------------
The majority of orders for chemical products in laboratory
quantities are shipped from inventory, resulting in no back-log of
these orders. However, individual items may occasionally be out of
stock. These items are shipped as soon as they become available.
Some orders for larger-than-normal laboratory quantities are for
future delivery. On December 31, 1994 and 1993, the back-log of
firm orders and orders for future delivery of chemical products was
$14,700,000 and $9,100,000, respectively. The Company expects
that substantially all of the December 31, 1994 back-log
will be shipped during 1995.
On December 31, 1994 and 1993, B-Line had a back-log of
orders amounting to $5,200,000 and $2,400,000, respectively.
B-Line expects that substantially all of the December 31, 1994
back-log will be shipped during 1995.
(f) Information as to Industry Segments.
-----------------------------------------------------------------------------
Information concerning industry segments for the years ended
December 31, 1994, 1993 and 1992, is located in Note 10 to the
consolidated financial statements on page 21 of the 1994 Annual
Report which is incorporated herein by reference.
(g) Executive Officers of the Registrant.
----------------------------------------------------------------------------
Information regarding executive officers is contained in Part
III, Item 10, and is incorporated herein by reference.
Item 2. Properties.
----------------------------------------------------------------------------
The Company's primary chemical production facilities are
located in St. Louis, Missouri; Milwaukee and Sheboygan,
Wisconsin; Bellefonte, Pennsylvania and Buchs, Switzerland. In St.
Louis, the Company owns a 320,000 square foot building used for
manufacturing, a complex of buildings aggregating 349,000 square
feet which is currently being used for warehousing and production,
a 75,000 square foot building and a 50,000 square foot building both
used for warehousing and a 30,000 square foot building used for production,
quality control and packaging. A 280,000 square foot building in St. Louis
is being partially utilized to provide additional quality control, packaging
and warehousing capacity. Also in St. Louis, the Company owns 30
acres upon which is located a 240,000 square foot administration
and distribution facility, in which its principal executive offices
are located, and a 175,000 square foot diagnostic production and
office building. In Milwaukee, the Company owns a 165,000 square
foot building which is used for manufacturing, warehousing and
offices, a 110,000 square foot building which is used for
additional manufacturing and warehousing and a complex of buildings
aggregating 331,000 square feet which is used primarily for
warehousing and distribution. Also in Milwaukee, the Company owns
a 151,000 square foot building which is used for manufacturing and
warehousing, a 56,000 square foot administration facility and a
615,000 square foot building which is being renovated for use as a
distribution facility. The Company also owns 515 acres in
Sheboygan, Wisconsin, upon which are located multiple buildings
totaling 318,000 square feet for production and packaging. Fluka
owns an 11 acre site in Buchs, Switzerland, upon which are located
its primary production facilities. Approximately 227,000 square
feet of owned production, warehousing and office facilities are at
this site. In Greenville, Illinois, the Company owns 555 acres of
land for future development of biochemical production facilities.
Supelco owns 72 acres near Bellefonte, Pennsylvania, upon which is
located a 160,000 square foot building used for manufacturing,
warehousing, research and administration.
The Company's B-Line manufacturing business is located in
Highland and Troy, Illinois; Norcross, Georgia; Reno, Nevada;
Portland, Oregon; and Modesto, California. B-Line owns a 270,000
square foot building in Highland, a 55,000 square foot building in
Troy, Illinois, a 68,000 square foot building in Portland, Oregon,
a 173,000 square foot building in Reno, Nevada, and a 125,000 square
foot building in Modesto, California. B-Line leases a 101,000 square
foot facility in Norcross, Georgia.
The Company also owns warehouse and distribution facilities
containing approximately 173,000, 35,000 and 8,000 square feet in Allentown,
Pennsylvania, Metuchen, New Jersey and Ronkonkoma, New York, respectively,
and leases warehouses in Chicago, Illinois and Dallas, Texas under short-term
leases. Manufacturing and/or warehousing facilities are also owned or
leased in England, France, Germany, Israel, Japan, Scotland and
Switzerland. Sales offices are leased in all other locations.
The Company considers the properties to be well maintained, in
sound condition and repair, and adequate for its present needs.
The Company will continue to expand its production and distribution
capabilities in select markets.
Item 3. Legal Proceedings.
-----------------------------------------------------------------------------
There are no material pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.
--------------------------------------------------------------------------------
No matters were submitted by the Registrant to the
stockholders for a vote during the fourth quarter of 1994.
PART II
--------------------------------------------------------------------------------
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters.
--------------------------------------------------------------------------------
Information concerning market price of the Registrant's Common
Stock and related shareholder matters for the years ended December
31, 1994 and 1993, is located on page 11 of the 1994 Annual Report
which is incorporated herein by reference.
As of March 7, 1995, there were 2,574 record holders of the
Registrant's Common Stock.
Items 6 through 8. Selected Financial Data, Management's Discussion
and Analysis of Financial Condition and Results of Operations, and
Financial Statements.
--------------------------------------------------------------------------------
The information required by Items 6 through 8 is incorporated
herein by reference to pages 11 - 24 of the 1994 Annual Report.
See Index to Financial Statements and Schedules on page F-1 of this
report. Those pages of the Company's 1994 Annual Report listed in
such Index or referred to in Items 1(a)(4), 1(f) and 5 are
incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
--------------------------------------------------------------------------------
Not applicable.
PART III
------------------------------------------------------------------------------
Item 10. Directors and Executive Officers of the Registrant.
-----------------------------------------------------------------------------
Information under the captions "Nominees for Board of
Directors" and "Security Ownership of Directors, Executive Officers
and Principal Beneficial Owners" of the 1995 Proxy Statement is
incorporated herein by reference.
The executive officers of the Registrant are:
Name of Executive Officer Age Positions and Offices Held
------------------------- --- --------------------------
Carl T. Cori 58 Chairman of the Board and
Chief Executive Officer
Peter A. Gleich 49 Vice President and Treasurer
David R. Harvey 55 President and Chief Operating
Officer
Kirk A. Richter 48 Controller
Thomas M. Tallarico 50 Vice President and Secretary
There is no family relationship between any of the officers.
Dr. Cori has been Chief Executive Officer of the Company for more
than five years. He was elected Chairman of the Board in May 1991
and served as President of the Company for more than five years until
March 1995.
Mr. Gleich was elected Treasurer in November 1994. He has been Vice
President of the Company for more than five years. He was Secretary
of the Company for more than five years until November 1994. He
also served as Treasurer of the Company from 1975 to May 1991.
Dr. Harvey has been Chief Operating Officer of the Company for more
than five years. He was elected President of the Company in March 1995,
after serving as Executive Vice President for more than five years.
Mr. Richter has held the position indicated for more than five years.
Mr. Tallarico was elected Secretary in November 1994. He has been
a Vice President of the Company since February 1991 and had served
as Treasurer of the Company from May 1991 to November 1994. He
served as publisher of the St. Louis Sun Publishing Company, St. Louis,
Missouri, from March 1989 to July 1990.
The present terms of office of the officers will expire when the
next annual meeting of the Directors is held and their successors
are elected.
Item 11. Executive Compensation.
--------------------------------------------------------------------------------
Information under the captions "Director Compensation and
Transactions" and "Information Concerning Executive Compensation"
of the 1995 Proxy Statement is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
--------------------------------------------------------------------------------
Information under the caption "Security Ownership of
Directors, Executive Officers and Principal Beneficial Owners" of
the 1995 Proxy Statement is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions.
--------------------------------------------------------------------------------
Information under the caption "Director Compensation and
Transactions" of the 1995 Proxy Statement is incorporated herein by
reference.
PART IV
--------------------------------------------------------------------------------
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
--------------------------------------------------------------------------------
(a) Documents filed as part of this report:
1. Financial Statements.
See Index to Financial Statements on page F-1 of this
report. Those pages of the Company's 1994 Annual Report
listed in such Index or referred to in Items 1(a)(4),
1(f) and 5 are incorporated herein by reference.
2. Financial Statement Schedules.
See Index to Financial Statement Schedules on page F-1 of
this report.
3. Exhibits.
See Index to Exhibits on page F-3 of this report.
(b) Reports on Form 8-K:
No reports on Form 8-K have been filed during the last quarter
of the period covered by this report.
SIGNATURES
--------------------------------------------------------------------------------
Pursuant to the requirements of Section 13 or 15 (d) 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.
SIGMA-ALDRICH CORPORATION
-------------------------
(Registrant)
By /s/ Peter A. Gleich March 30, 1995
-------------------------------------- --------------
Peter A. Gleich, Vice President and Date
Treasurer
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Carl T. Cori, Peter A. Gleich, David
R. Harvey, Kirk A. Richter and Thomas M. Tallarico and each of them (with
full power to each of them to act alone), his true and lawful attorneys-in-
fact and agents, with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities, to sign any or
all amendments (including post-effective amendments) to this report, and to
file the same, with all exhibits thereto and other documents in connection
therewith with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
By /s/ Carl T. Cori March 30, 1995
-------------------------------------- --------------
Carl T. Cori, Director, Chairman of the Date
Board and Chief Executive Officer
By /s/ David R. Harvey March 30, 1995
----------------------------------------- --------------
David R. Harvey, Director, President Date
and Chief Operating Officer
By /s/ Peter A. Gleich March 30, 1995
-------------------------------------- --------------
Peter A. Gleich, Vice President and Date
Treasurer
By /s/ Kirk A. Richter March 30, 1995
-------------------------------------- --------------
Kirk A. Richter, Controller Date
By /s/ Thomas M. Tallarico March 30, 1995
--------------------------------------- --------------
Thomas M. Tallarico, Vice President Date
and Secretary
By /s/ David M. Kipnis March 30, 1995
-------------------------------------- --------------
David M. Kipnis, Director Date
By /s/ Andrew E. Newman March 30, 1995
--------------------------------------- --------------
Andrew E. Newman, Director Date
By /s/ Jerome W. Sandweiss March 30, 1995
--------------------------------------- --------------
Jerome W. Sandweiss, Director Date
SIGMA-ALDRICH CORPORATION AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
-----------------------------------------------------------------------------
Page Number
Reference
--------------
Annual Report
to Shareholders
----------------
Comparative financial data for the years
1994, 1993, 1992, 1991 and 1990 11
Management's discussion of financial
condition and results of operations 12
FINANCIAL STATEMENTS:
Consolidated Balance Sheets
December 31, 1994 and 1993 15
Consolidated statements for the years
ended December 31, 1994, 1993 and 1992
Income 14
Stockholders' Equity 16
Cash Flows 17
Notes to consolidated financial statements 18
Report of independent public accountants 14
FINANCIAL STATEMENT SCHEDULES:
Schedules are not submitted because they
are not applicable, not required or because the
information is included in the consolidated financial
statements or notes thereto.
INDEX TO EXHIBITS
-----------------
These Exhibits are numbered in accordance with the Exhibit Table of
Item 6.01 of Regulation S-K:
Exhibit Reference
------- ---------
(3) Certificate of Incorporation and By-Laws:
(a) Certificate of Incorporation and
Amendments Incorporated by reference to Exhibit
3(a) of Form 10-K filed for the year
ended December 31, 1991, Commission
File Number 0-8135.
(b) By-Laws as amended February 1993 Incorporated by reference to Exhibit
3(b) of Form 10-K filed for the year
ended December 31, 1992, Commission
File Number 0-8135.
(4) Instruments Defining the Rights of
Shareholders, Including Indentures:
(a) Certificate of Incorporation and
Amendments See Exhibit 3(a) above.
(b) By-Laws as amended February 1993 See Exhibit 3(b) above.
(c) The Company agrees to furnish to the
Securities and Exchange Commission upon
request pursuant to Item 601(b)(4)(iii)
of Regulation S-K copies of instruments
defining the rights of holders of long-term
debt of the Company and its consolidated
subsidiaries.
(10) Material Contracts:
(a) Incentive Stock Bonus Plan* Incorporated by reference to Exhibit
10(a) of Form 10-K filed for the year
ended December 31, 1992, Commission
File Number 0-8135.
(b) First Amendment to Incentive Incorporated by reference to Exhibit
Stock Bonus Plan* 10(b) of Form 10-K filed for the year
ended December 31, 1992, Commission
File Number 0-8135.
(c) Second Amendment to Incentive Incorporated by refence to Exhibit
Stock Bonus Plan* 10(c) of Form 10-K filed for the year
ended December 31, 1992, Commission
File Number 0-8135.
(d) Share Option Plan of 1987* Incorporated by reference to Exhibit
10(d) of Form 10-K filed for the year
ended December 31, 1992, Commission
File Number 0-8135.
(e) First Amendment to Share Option Incorporated by refence to Exhibit
Plan of 1987* 10(e) of Form 10-K filed for the year
ended December 31, 1992, Commission
File Number 0-8135.
(f) Second Amendment to Share Option See Exhibit 10(f).
Plan of 1987*
(g) Employment Agreement with Carl Incorporated by reference to Exhibit
T. Cori* (Similar Employment 10(g) of Form 10-K filed for the
Agreements also exist with year ended December 31, 1992,
Peter A. Gleich, David R. Commission File Number 0-8135.
Harvey, Kirk A. Richter and
Thomas M. Tallarico)
(h) Letter re: Consultation Services Incorporated by reference to Exhibit
with Dr. David M. Kipnis* 10(h) of Form 10-K filed for the
year ended December 31, 1992,
Commission File Number 0-8135.
(11) Statement Regarding Computation Incorporated by reference to the
of Per Share Earnings information on net income per share
included in Note 1 to the Company's
1994 financial statements filed as
Exhibit 13 below.
(13) Pages 11-24 of the Annual Report See Exhibit 13.
to Shareholders for the year
ended December 31, 1994
(21) Subsidiaries of Registrant See Exhibit 21.
(23) Consent of Independent Public See Exhibit 23.
Accountants
(27) Financial Data Schedule See Exhibit 27.
*Represents management contract or compensatory plan or arrangement required
to be filed as an exhibit pursuant to Item 14(c) of Form 10-K.
SECOND AMENDMENT TO THE SIGMA-ALDRICH CORPORATION
SHARE OPTION PLAN OF 1987
-------------------------
THIS SECOND AMENDMENT TO THE SIGMA-ALDRICH CORPORATION SHARE OPTION PLAN
OF 1987 is hereby approved by SIGMA-ALDRICH CORPORATION (the "Company") this
8th day of November, 1994.
WHEREAS, the Company established its Share Option Plan of 1987 (the
"Plan") to provide for the granting of options to purchase Common Stock of the
Company to certain key employees of the Company and its subsidiaries; and
WHEREAS, the Plan established by the Company and approved by the
shareholders of the Company stated that, as specified in Paragraph 6 of the
Plan, "No optionee who terminates an incentive option with the mutual
agreement of the Company shall be granted an incentive option at a lower price
under the Plan which is exercisable prior to the date on which the terminated
option would have lapsed."
WHEREAS, said limitation on the exercise of an option while a previous
option is outstanding does not constitute a restriction required by law or
regulation at the time of the adoption of the Plan.
NOW, THEREFORE:
1. Said restriction is hereby deleted and the following new Paragraph 6
is inserted in its place:
6. Exercise Period and Conditions
------------------------------
Except as provided in Paragraph 8(b)(ii), no option
granted under this Plan may be exercised prior to the expiration
of twelve (12) months from the date it is granted. The Committee
may specify a longer period of time during which an option may not
be exercised (hereinafter referred to as the Non-exercise Period")
at the time each option is granted. No option shall be exercisable
in any amount after a date ten (10) years from the date it was
granted.
An incentive option is outstanding until such option is
exercised in full or expires by reason of lapse of time.
Subject to the specific provisions of this Paragraph 6 and of
Paragraph 8 hereof with respect to exercise and termination of
options granted under this Plan, each such option shall be
exercisable in such manner (including installments), at such time or
times and subject to such conditions or limitations as shall be fixed
by the Committee, in its sole discretion at the time such option is
granted.
2. In all other respects, said Plan is amended hereby and is heretofore
amended, ratified and affirmed.
IN WITNESS WHEREOF, the Company has executed this Second Amendment to the
Sigma-Aldrich Corporation Share Option Plan of 1987 as of the day and year
first above written.
SIGMA-ALDRICH CORPORATION
BY: \s\ Kirk A. Richter
TITLE: Controller
(Page 11 of 1994 Annual Report to shareholders)
SELECTED FINANCIAL DATA
-----------------------
(Unaudited)
COMMON STOCK DATA:
(per share)
PRICE RANGE
-------------------------------------
1994 1993 DIVIDENDS
---------------- ----------------- -----------------
HIGH LOW HIGH LOW 1994 1993
------- ------- -------- ------- ------ ------
1st Quarter $55-1/4 $46-3/4 $58 $46-1/4 $.0825 $.0725
2nd Quarter 50-3/4 39 51-1/2 45 .0825 .0725
3rd Quarter 41 30 50-3/4 44-1/2 .0825 .0725
4th Quarter 37 31 50 45-1/2 .0900 .0825
The common stock is traded on the National Market System ("NMS")
of the National Association of Securities Dealers Automated
Quotation System ("NASDAQ"). The trading symbol is SIAL.
Options in the Company's common stock are traded on the Chicago
Board Options Exchange.
<TABLE>
COMPARATIVE FINANCIAL DATA:
(in millions except per share data) 1994 1993 1992 1991 1990
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net sales $851.2 $739.4 $654.4 $589.4 $529.1
Income before cumulative effect of accounting
changes 110.3 107.1 95.5 79.8 71.2
Net income 110.3 96.3 95.5 79.8 71.2
Per share:
Income before cumulative effect of accounting
changes 2.21 2.15 1.92 1.60 1.44
Net income 2.21 1.93 1.92 1.60 1.44
Dividends .3375 .3000 .2600 .2275 .2050
Total assets 852.0 753.4 615.8 596.5 546.2
Long-term debt 14.5 17.3 18.7 69.3 70.8
</TABLE>
QUARTERLY FINANCIAL DATA:
(in millions except per share data)
1994 QUARTER ENDED
---------------------------------------------
March 31 June 30 Sept. 30 Dec. 31
-------- ------- -------- -------
Net sales $208.5 $212.5 $217.3 $212.9
Gross profit 113.2 110.8 110.8 111.3
Net income 29.7 27.0 27.0 26.6
Net income per share .60 .54 .54 .53
1993 QUARTER ENDED
---------------------------------------------
March 31 June 30 Sept. 30 Dec. 31
-------- ------- -------- -------
Net sales $180.0 $183.8 $190.8 $184.8
Gross profit 98.4 100.3 101.4 102.7
Income before cumulative
effect of accounting changes 26.9 26.9 26.7 26.6
Net income 16.1 26.9 26.7 26.6
Income per share before
cumulative effect of
accounting changes .54 .54 .54 .53
Net income per share .32 .54 .54 .53
(Pages 12-13 of 1994 Annual Report to Shareholders)
MANAGEMENT'S DISCUSSION OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
Results of Operations
During the three years ended December 31, 1994, the Company's
sales and earnings continued to grow. In the second quarter of
1993, the Company acquired the net assets and business of Supelco,
Inc. ("Supelco") and the stock of Circle AW Products Company
("Circle AW") as described in Note 12 to the consolidated financial
statements. The operating results for these businesses are included
in the consolidated statements of income from their respective
acquisition dates.
Chemical sales increased 11.9%, 10.8% and 11.1% for 1994, 1993
and 1992, respectively. This sales growth is attributed to
selective price increases, the annual addition of new products,
wider distribution of catalogs and literature and the opening of
new foreign sales offices. The effect of translating foreign
currency sales into the U.S. dollar had a slightly positive impact
on sales for 1994, after reducing sales growth by 3.8% in 1993.
Sales for 1994 and 1993 also benefitted from the acquisition of
Supelco in May 1993. For 1994, excluding the benefit of the
Supelco acquisition and currency exchange rates, the rate of sales
increase slowed due to uncertainties surrounding possible governmental
health care reform in the U.S., a slowdown in the growth of research
funding and a shortage of stable currencies in selected foreign markets.
Price increases for products listed in the Company's general chemical
catalogs averaged 5.0% per year in each of the last three years.
New product sales are not material in the year introduced, but do
contribute to annual sales growth in subsequent years. Export sales
from the United States increased 5.0% and 13.5% in 1994 and 1993,
respectively, after remaining even in 1992, reflecting
the benefits of the Supelco acquisition and the addition of sales
offices in foreign countries to serve as liaisons with
United States operations. Emphasis on foreign markets and new sales
offices helped achieve growth in foreign direct sales of 16% in 1994,
17% in 1993 and 15% in 1992, after eliminating the effect of changes
in foreign currency exchange rates.
Metal sales increased 30.4%, 24.8% and 10.9% for 1994, 1993 and
1992, respectively. The higher growth rates in 1994 and 1993 were
due to increased volume from stronger construction demand. The
acquisition of Circle AW in June 1993 provided one-third of the
1994 gain and one-half of the 1993 increase. Average selling
prices increased 2.0% in both 1994 and 1993, respectively, while
1992 prices were unchanged from 1991.
Cost of products sold was 47.6%, 45.5% and 45.6% of sales in 1994,
1993 and 1992, respectively. The increase in 1994 was due to
higher costs for new chemical products, product mix changes,
higher metal costs and faster growth in metal sales that have
higher product costs than chemicals. The cost of chemical products
sold increased by 16.1% in 1994 due to the higher costs of new
diagnostic products, more sales of purchased products rather than
produced products and increased costs from operating new manufacturing
facilities. The cost of metal products sold rose by 37.1%
in 1994 as higher steel material costs were not fully recovered
through price increases. In 1993, sales price increases offset higher
raw material and plant operating costs, resulting in the level of
cost of goods sold being essentially unchanged from 1992.
Selling, general and administrative expenses were 32.4%, 32.1% and 31.9%
of sales in 1994, 1993 and 1992, respectively. Catalog and promotional
expenses increased faster than sales in order to promote new diagnostic
products, to distribute additional chromatography catalogs and to advertise
the Company's manufacturing capabilities and its wide research product line.
Depreciation and amortization expenses also increased due to the
Supelco and Circle AW acquisitions in 1993. Net interest costs rose by
$1.1 million in 1994 after declining by $2.1 million in 1993,
reflecting additional borrowing in connection with the Supelco and
Circle AW acquisitions and higher interest rates in 1994. These higher
expenses were largely offset by a change in deferred compensation
expense from $3.2 million in 1993 to a credit of $1.8 million in 1994.
In 1994, no deferred compensation was earned due to the
lower earnings growth, and the decline in the market price of the
Company's stock resulted in a reduction in the Company's liability for
compensation earned in earlier years.
Management expects future sales growth from continued introduction of
new products, more effective distribution of catalogs and added
promotional and marketing programs. Additionally, 1995 sales will
benefit from new offices added in Austria, Poland and Sweden during 1994.
Liquidity and Capital Resources
In 1994 cash and temporary cash investments remained relatively stable
while short-term borrowings were reduced by $18.0 million. In 1993,
cash and temporary cash investments decreased $34.7 million and
short-term borrowings increased $30.6 million, primarily due to the
acquisitions of Supelco and Circle AW, as described in Note 12 to the
consolidated financial statements, and increased capital expenditures.
Cash provided by operating activities was $110.0 million in 1994, an
increase of $11.3 million from 1993. The increase resulted mainly
from the $3.2 million increase in income before cumulative
effect of accounting changes and a reduction in the incremental cash
invested in inventories from $34.1 million in 1993 to $20.1 million
in 1994. Cash generated by operations and available from credit
facilities continues to provide sufficient liquidity for present and
future operating and capital needs.
Cash in excess of operating and capital needs in 1995 is expected to
be used to repay existing borrowings and to be invested on a
temporary basis. At December 31, 1994, there was $18.7 million of
borrowings outstanding under the Company's credit arrangements, which
provide for borrowing up to $100 million.
During 1994, $72.5 million of capital expenditures were made to
increase production and distribution capabilities and improve plant
efficiencies. Significant expenditures in 1994 included the
expansion of large scale production facilities in the United States
and Switzerland and the acquisition and equipping of a new distribution
facility in Pennsylvania. Capital expenditures are expected to
moderate in 1995. The Company has not made any significant commitments
for or acquisitions of facilities early in 1995.
Accounting Changes
The Company adopted two new Financial Accounting Standards
effective January 1, 1993. See Notes 7 and 11 to the consolidated
financial statements for further information regarding these
accounting changes.
(Five bar graphs appear on pages 12-13 depicting the following data)
1994 1993 1992
------ ------ ------
Chemical sales (millions of dollars) $686.3 $613.1 $553.1
Metal sales (millions of dollars) 164.9 126.3 101.3
Cost of sales (percent of sales) 47.6% 45.5% 45.6%
Operating expenses (percent of sales) 32.4% 32.1% 31.9%
Capital expenditures (millions of dollars) 72.5 75.2 30.9
(Page 14 of 1994 Annual Report to Shareholders)
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(in thousands except per share data)
Years Ended December 31,
----------------------------
1994 1993 1992
-------- -------- --------
Net sales $851,190 $739,435 $654,406
Cost of products sold 405,110 336,639 298,648
------- ------- -------
Gross profit 446,080 402,796 355,758
Selling, general and
administrative expenses 275,771 237,179 208,446
------- ------- -------
Income before income taxes and
cumulative effect of accounting changes 170,309 165,617 147,312
Provision for income taxes 59,969 58,463 51,854
------- ------- -------
Income before cumulative effect of
accounting changes 110,340 107,154 95,458
Cumulative effect of accounting changes -- (10,806) --
------- ------- -------
Net income $110,340 $96,348 $95,458
======= ======= =======
Weighted average number of
shares outstanding 49,829 49,802 49,770
======= ======= =======
Income per share before cumulative
effect of accounting changes $2.21 $2.15 $1.92
Cumulative effect of accounting changes -- (0.22) --
-------- ------- -------
Net income per share $2.21 $1.93 $1.92
======== ======= =======
The accompanying notes are an integral part of these statements.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To Sigma-Aldrich Corporation:
We have audited the accompanying consolidated balance sheets of
Sigma-Aldrich Corporation (a Delaware Corporation) and
subsidiaries (the "Company") as of December 31, 1994 and 1993,
and the related consolidated statements of income, stockholders'
equity and cash flows for each of the three years in the period
ended December 31, 1994. These financial statements are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Sigma-Aldrich Corporation and subsidiaries as of December 31,
1994 and 1993, and the results of their operations and their cash
flows for each of the three years in the period ended December
31, 1994, in conformity with generally accepted accounting
principles.
As discussed in Notes 7 and 11 to the consolidated financial
statements, effective January 1, 1993, the Company changed its
method of accounting for income taxes and postretirement benefits
other than pensions.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
St. Louis, Missouri
February 14, 1995
(Page 15 of 1994 Annual Report to Shareholders)
CONSOLIDATED BALANCE SHEETS
---------------------------
(in thousands)
December 31,
--------------------
ASSETS 1994 1993
Current assets: -------- --------
Cash $ 2,297 $ 989
Temporary cash investments 7,448 9,263
Accounts receivable, less allowance for
doubtful accounts of $7,763 and $6,684,
respectively 134,893 113,439
Inventories 330,333 305,487
Other current assets 27,374 21,629
------- -------
Total current assets 502,345 450,807
------- -------
Property, plant and equipment:
Land 28,512 24,658
Buildings and improvements 195,101 166,319
Machinery and equipment 232,497 203,127
Construction in progress 50,609 31,432
Less - Accumulated depreciation (204,030) (168,214)
-------- --------
Net property, plant and equipment 302,689 257,322
-------- --------
Other assets 46,939 45,302
-------- --------
$851,973 $753,431
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 18,671 $ 36,747
Current maturities of long-term debt 650 955
Accounts payable 53,832 43,967
Accrued payroll and other expenses 27,304 25,479
Accrued income taxes 4,580 4,209
------- -------
Total current liabilities 105,037 111,357
------- -------
Long-term debt 14,478 17,266
------- -------
Deferred postretirement benefits 27,257 24,559
------- -------
Deferred compensation 5,696 9,109
------- -------
Stockholders' equity:
Common stock 49,832 49,805
Capital in excess of par value 10,004 8,883
Retained earnings 631,634 538,111
Cumulative translation adjustments 8,035 (5,659)
------- -------
Total stockholders' equity 699,505 591,140
------- -------
$851,973 $753,431
======= =======
The accompanying notes are an integral part of these balance
sheets.
<TABLE>
(Page 16 of 1994 Annual Report to Shareholders)
<CAPTION>
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
----------------------------------------------
(in thousands except per share data)
Common Stock
100,000 Shares Authorized
($1.00 Par) Capital in Cumulative
--------------------- Excess of Retained Translation
Shares Amount Par Value Earnings Adjustments
------ ------- --------- -------- -----------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1991 49,746 $49,746 $6,846 $374,187 $10,174
Net income -- -- -- 95,458 --
Dividends ($.26 per share) -- -- -- (12,941) --
Awards under deferred
compensation plan 20 20 455 -- --
Exercise of stock options 10 10 187 -- --
Translation adjustment -- -- -- -- (12,365)
------ ------ ----- ------- -------
Balance, December 31, 1992 49,776 49,776 7,488 456,704 (2,191)
Net income -- -- -- 96,348 --
Dividends ($.30 per share) -- -- -- (14,941) --
Awards under deferred
compensation plan 21 21 1,175 -- --
Exercise of stock options 8 8 220 -- --
Translation adjustment -- -- -- -- (3,468)
------ ------- ------ ------- --------
Balance, December 31, 1993 49,805 49,805 8,883 538,111 (5,659)
Net income -- -- -- 110,340 --
Dividends ($.3375 per share) -- -- -- (16,817) --
Awards under deferred
compensation plan 19 19 898 -- --
Exercise of stock options 8 8 223 -- --
Translation adjustment -- -- -- -- 13,694
------ -------- ------- -------- ------
Balance, December 31, 1994 49,832 $49,832 $10,004 $631,634 $8,035
====== ======== ======= ======== ======
The accompanying notes are an integral part of this statement.
</TABLE>
<TABLE>
(Page 17 of 1994 Annual Report to Shareholders)
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(in thousands)
Years Ended December 31,
------------------------------------
1994 1993 1992
------ ------ ------
Cash flows from operating activities:
<S> <C> <C> <C>
Net income $110,340 $ 96,348 $ 95,458
Adjustments to reconcile net income to net
cash provided by operating activities:
Cumulative effect of accounting changes -- 10,806 --
Depreciation and amortization 36,655 32,505 28,863
Deferred tax provision (613) (252) 1,848
Postretirement benefits expense 3,547 2,789 --
Deferred compensation expense (credit) (1,757) 3,244 2,150
Deferred compensation payments (740) (810) (465)
Increase in accounts receivable (18,592) (12,604) (12,605)
Increase in inventories (20,090) (34,144) (5,588)
Increase in other current assets (5,222) (2,537) (1,331)
Increase in accounts payable 6,883 9,949 6,069
Increase (decrease) in accrued payroll
and other expenses 400 (3,900) 4,383
Decrease in accrued income taxes (799) (2,663) (4,377)
-------- -------- --------
Net cash provided by operating 110,012 98,731 114,405
activities -------- -------- --------
Cash flows from investing activities:
Property, plant and equipment additions (72,494) (75,182) (30,886)
Sale of equipment 1,203 588 873
Acquisition of businesses,
net of cash acquired -- (64,015) --
Other, net (3,872) (410) 348
--------- -------- --------
Net cash used in investing activities (75,163) (139,019) (29,665)
--------- -------- --------
Cash flows from financing activities:
Issuance (repayment) of notes payable (18,032) 30,649 (6,588)
Issuance of long-term debt -- 1,154 1,946
Repayment of long-term debt (3,245) (10,087) (49,049)
Payment of dividends (16,817) (14,941) (12,941)
Exercise of employee stock options 231 228 197
-------- -------- --------
Net cash provided by (used in) (37,863) 7,003 (66,435)
financing activities -------- -------- --------
Effect of exchange rate changes on cash 2,507 (1,395) (1,492)
-------- -------- --------
Net change in cash and cash equivalents (507) (34,680) 16,813
Cash and cash equivalents at beginning
of year 10,252 44,932 28,119
-------- -------- --------
Cash and cash equivalents at end of year $ 9,745 $ 10,252 $ 44,932
======== ======== ========
Supplemental disclosures of cash flow information:
Income taxes paid $61,349 $61,187 $54,385
Interest paid, net of capitalized interest 3,622 2,320 5,269
The accompanying notes are an integral part of these statements.
</TABLE>
(Pages 18-24 of 1994 Annual Report to Shareholders)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation:
The consolidated financial statements include the accounts of the
Company and all majority-owned subsidiaries. All significant
intercompany accounts and transactions have been eliminated.
Accounting Changes:
The Company adopted Financial Accounting Standards Nos. 106 and
109 effective January 1, 1993, and elected to recognize the prior
years' effect as the cumulative effect of changes in accounting
principles. See Note 7 - Income Taxes and Note 11 - Pension and
Other Postretirement Benefit Plans for further information
regarding these accounting changes.
Financial Instruments:
The Company considers its temporary cash investments, which have
original maturities of three months or less, to be cash
equivalents for purposes of the consolidated statements of cash
flows.
The Company has no financial instruments that have
a materially different fair value than the respective instrument's
carrying value. Gains and losses on hedges of existing assets or
liabilities are recognized monthly as other income or expense.
See Note 5 for further information regarding the Company's hedging activities.
Property, Plant and Equipment:
The cost of property, plant and equipment is depreciated over the
estimated useful lives of the assets on the straight-line method
using lives ranging from three to twelve years for machinery and
equipment and fifteen to forty years for buildings and
improvements. The Company capitalizes interest as part of the
cost of constructing major facilities and equipment.
Net Income Per Share:
Net income per share is based on the weighted average number of
shares outstanding during each period.
Foreign Currency Translation:
Foreign currency assets and liabilities are translated at current
exchange rates and profit and loss accounts at weighted average
exchange rates. Resulting translation gains and losses are
included as a separate component in stockholders' equity.
NOTE 2 - INVENTORIES
The principal categories of inventories are (in thousands):
December 31,
----------------------
1994 1993
-------- --------
Finished goods $250,351 $233,833
Work in process 20,232 19,457
Raw materials 59,750 52,197
-------- --------
Total $330,333 $305,487
======== ========
Chemical products are valued at the lower of cost or market.
Costs for certain domestic chemical inventories (21% of total
chemical inventories) are determined using the last-in, first-out
method. Costs for other chemical inventories are determined by
specific lot using purchase price and cost to manufacture, which
includes material, labor and overhead. If the cost of all
chemical inventories had been determined using the specific cost
method, inventories would have been $7,410,000, $7,327,000, $7,472,000
and $4,514,000 higher than reported at December 31, 1994, 1993, 1992
and 1991, respectively.
Metal inventories are valued at the lower of cost or market, cost
being determined using the first-in, first-out method, which
includes material, labor and overhead.
NOTE 3 - NOTES PAYABLE
The Company has three unsecured domestic bank revolving credit
facilities totaling $70,000,000. A $40,000,000 facility expires in
April 1995, with two other facilities of $15,000,000 each
expiring in June 1995, or earlier upon notice by either party.
The Company also has two $15,000,000 unsecured multi-currency
bank commitments. One facility expires in July 1995 and the
other in June 1997. Interest rates for all facilities are based
on federal funds, LIBOR, prime or other rates offered by the
lending banks. Borrowings outstanding under the domestic
arrangements amounted to $9,945,000 at an average interest rate of
6.2% and $24,850,000 at an average interest rate of 3.4% at December
31, 1994 and 1993, respectively. Borrowings under the multi-currency
commitments amounted to $6,426,000 at an average interest rate of 6.2%
and $9,601,000 at an average interest rate of 6.8% at December 31, 1994
and 1993, respectively. The Company intends to renew all of these
facilities before they expire.
Notes payable by foreign subsidiaries amounted to $2,300,000 and
$2,296,000 at December 31, 1994 and 1993, respectively, and are payable
in local currencies with weighted average interest rates of 3.4% and 5.5%
at December 31, 1994 and 1993, respectively.
NOTE 4 - LONG-TERM DEBT
Long-term debt consists of the following (in thousands):
December 31,
----------------------
1994 1993
------- -------
6.0% Industrial
Revenue Bonds
due April 1, 2010....... $ 5,775 $ 5,775
5.875% Industrial
Revenue Bonds
due July 1, 2004....... 3,550 3,550
7.0% Industrial
Revenue Bonds
due Nov. 1, 2014....... 2,700 2,700
Unsecured
Swiss debt............. 397 2,294
Other.................. 2,706 3,902
------- -------
15,128 18,221
Less-Current
maturities............. (650) (955)
------- -------
$14,478 $17,266
======= =======
Both the 6.0% and 5.875% Industrial Revenue Bonds are subject to
optional redemption by the Company or bondholder in 1997, at
which time the interest rate will be adjusted and the next
interest rate calculation period will be determined. At the
conclusion of each subsequent calculation period, the bonds will
again be subject to optional redemption by the Company or
bondholder, the interest rate will be adjusted and the next
calculation period will be determined. Any such bonds that are
redeemed can be reissued by the Company. The 7.0% Industrial
Revenue Bonds are subject to optional semi-annual redemption at par
value by the Company until November 1, 1999.
At December 31, 1994 and 1993, SFr. 500,000 and SFr. 3,407,000
respectively, were borrowed from the pension fund of Fluka Chemie
AG, a wholly-owned subsidiary. The interest rate on this debt was 5.5%
and 6.0% at December 31, 1994 and 1993, respectively. There is
no specified repayment schedule for this borrowing.
Total interest expense incurred by the Company, net of immaterial
amounts capitalized, was $2,910,000, $2,442,000 and $5,375,000 in
1994, 1993 and 1992, respectively.
NOTE 5 - FINANCIAL DERIVATIVES AND RISK MANAGEMENT
The Company operates internationally, giving rise to exposure
resulting from changes in foreign currency exchange rates.
Derivative financial instruments are utilized by the Company to
reduce the financial impact of those exposures; however, the
Company does not hold or issue such financial instruments for
trading purposes.
The Company enters into forward exchange contracts to hedge
certain receivables and payables denominated in foreign
currencies (principally the British pound sterling, German mark,
French franc and Swiss franc). Some of the contracts involve the
exchange of two foreign currencies, according to the requirements
of foreign subsidiaries. The purpose of the Company's hedging
activities is to protect the Company from the risk that the
receipts resulting from product sales to customers outside the
United States and payments for purchases from vendors outside
the United States will be adversely affected by changes in
exchange rates from the original transaction date. The amount
of open forward exchange contracts at December 31, 1994 and 1993
was $128.7 million and $72.7 million, respectively. The term
of the contracts is rarely more than six months.
The Company's contracts are with large, reputable commercial
banks and, accordingly, the Company expects all counterparties
to meet their obligations.
NOTE 6 - LEASE COMMITMENTS
The Company's subsidiaries lease manufacturing and warehouse
facilities and computer equipment under non-cancelable leases
expiring at various dates through 2022. Rent charged to
operations was $9,875,000, $8,222,000 and $6,357,000
in 1994, 1993 and 1992, respectively. Minimum rental commitments for
non-cancelable leases in effect at December 31, 1994, are as
follows (in thousands):
1995....... $6,772
1996....... 5,166
1997....... 3,890
1998....... 2,375
1999....... 1,616
2000-2022.. 1,474
NOTE 7 - INCOME TAXES
The provision for income taxes consists of the following (in
thousands):
1994 1993 1992
Current: ------ ------ ------
Federal $50,089 $50,470 $39,519
State 5,882 4,654 3,972
Foreign 4,611 3,591 6,515
------- ------- -------
Total current 60,582 58,715 50,006
------- ------- -------
Deferred:
Federal (1,946) 904 1,950
State (293) (48) (39)
Foreign 1,626 (1,108) (63)
-------- ------- -------
Total deferred (613) (252) 1,848
-------- ------- -------
Total tax provision $59,969 $58,463 $51,854
========= ========= =========
A reconciliation of statutory and effective tax rates is as
follows:
1994 1993 1992
------ ------ ------
Statutory tax rate 35.0% 35.0% 34.0%
FSC benefits (1.5) (1.7) (1.5)
State income taxes,
net of federal benefits 2.1 2.0 1.9
Foreign taxes .3 (1.6) (0.5)
Other, net (.7) 1.6 1.3
------ ------ ------
35.2% 35.3% 35.2%
====== ====== ======
The Company adopted Financial Accounting Standard No. 109,
"Accounting for Income Taxes", effective January 1, 1993, which
resulted in a cumulative adjustment that increased net income by
$3,000,000, or $.06 per share. This was due to deferred income
taxes being recorded under prior accounting standards at the tax
rate in effect when the deferrals arose (generally 46% and 40%),
whereas the new accounting standard requires that deferred income
taxes be recorded at the rate that will be in effect when the
income taxes are expected to be paid (35% under current tax law).
Deferred income tax provisions reflect the effect of
temporary differences between financial statement and tax
reporting of income and expense items. The net deferred tax
assets at December 31, which are included in other assets
on the consolidated balance sheet, result from the following
temporary differences (in thousands):
1994 1993
Gross deferred ------ ------
assets:
Inventories $14,472 $12,936
Pension and post-
retirement benefit plans 11,398 9,679
-------- --------
Total 25,870 22,615
-------- --------
Gross deferred
liabilities:
Depreciation (17,644) (14,886)
Other (3,489) (3,605)
-------- --------
Total (21,133) (18,491)
-------- --------
Net deferred tax assets $ 4,737 $ 4,124
======== ========
At December 31, 1994 and 1993, no valuation allowance for the deferred
tax assets was required.
United States taxes are not provided on unremitted earnings and
related cumulative translation adjustments of foreign
subsidiaries (approximately $84,087,000 at December 31, 1994)
because the Company intends to reinvest the earnings
indefinitely. The amount of estimated income taxes that would
be incurred should such earnings be distributed is not
significant due to the availability of foreign tax credits. The
Company has a Foreign Sales Corporation ("FSC") subsidiary which
is taxed at a lower effective tax rate on its income from export
sales from the United States.
NOTE 8 - INSURANCE
The Company's general and products liability insurance coverage,
which provides for risks up to $200 million, was renewed during 1994.
As is the case with other chemical companies, the current policies
exclude coverage for environmental damage and are written on a
claims-made basis.
NOTE 9 - COMMON STOCK
The Company's deferred compensation plan provides for cash and
common stock payments to certain key employees. Under this plan
a bonus pool is calculated by a formula based on the amount of
increase in profitability. Bonus units are then awarded. Bonus
units are distributed five years after being awarded in the form
of one share of common stock for each bonus unit. In addition,
the Company makes cash payments equal to the amount of Federal
income taxes the employee would be required to pay for the
receipt of such stock and cash at the highest marginal Federal
income tax rate. Expenses for this plan are recorded during the
period for which the calculation is made. During 1994, 1993 and
1992, 18,700, 20,800 and 20,278 shares of common stock,
respectively, were issued under this plan. At December 31, 1994,
71,517 bonus units were awarded but not distributed. This plan
permits issuance of a maximum of 1,200,000 shares of the
Company's common stock, of which 825,855 shares remain to be
awarded.
The Company's Share Option Plan of 1987 permits the granting of
incentive stock options or non-qualified options to purchase up
to 1,000,000 shares of the Company's common stock through 1997.
Incentive stock options may not have an option price of less than
the fair market value of the shares at the date of the grant.
Options generally become exercisable one year following the grant
date, however, options granted in 1994 and 1993 to purchase 160,000
and 193,000 shares, respectively, become exercisable ratably over a
five year period. Options to purchase 277,490 shares were exercisable
at December 31, 1994. Options to purchase 20,700 shares of the Company's
common stock under this plan remain to be granted at December 31,
1994.
Changes in the number of shares subject to option are as follows:
Shares
Subject
Price Range to Option
---------------- ---------
Balance, December 31, 1992 $20.38 - $50.25 196,110
Options granted 48.00 - 55.25 370,000
Options exercised 20.38 - 46.75 (8,420)
Options cancelled 46.75 - 55.25 (20,900)
-------
Balance, December 31, 1993 $20.38 - $55.25 536,790
Options granted 36.25 - 40.00 419,000
Options exercised 20.38 - 46.75 (8,800)
Options cancelled 50.25 - 55.25 (42,000)
------ ------ -------
Balance, December 31, 1994 $20.38 - $55.25 904,990
====== ====== =======
NOTE 10 - COMPANY OPERATIONS BY SEGMENT
The Chemical Products segment distributes biochemicals, organic
chemicals, chromatography products, diagnostic reagents and
related products for use in research and development, in the
diagnosis of disease and in manufacturing. These products are
both manufactured by the Company and purchased for resale. The
Metal Products segment manufactures and distributes components
for metal frameworks used in industry to support pipes, lighting
fixtures and conduit, continuous networks of trays used in
routing power and telecommunications cabling and electrical
enclosures. Sales between these two industry segments are not
significant. Cash and temporary cash investments are considered
available for general corporate purposes and, accordingly, are
not allocated to the identifiable assets of either segment. The
United States sales to unaffiliated customers presented in the
summary of operations by geographic segment on page 22 includes
sales to foreign markets as follows (in thousands):
Year Amount
----- --------
1994 $104,825
1993 99,876
1992 88,035
The Company's operations by industry segment are as follows (in thousands):
1994 1993 1992
------ ------ ------
Net sales to unaffiliated customers:
Chemical Products $686,325 $613,083 $553,127
Metal Products 164,865 126,352 101,279
-------- -------- --------
Total $851,190 $739,435 $654,406
======== ======== ========
Income before provision for income taxes
and cumulative effect of accounting changes:
Chemical Products $149,444 $148,491 $136,913
Metal Products 23,501 18,649 14,018
Interest expense, net of interest income (2,636) (1,523) (3,619)
-------- -------- --------
Total $170,309 $165,617 $147,312
======== ======== ========
Depreciation:
Chemical Products $29,404 $26,063 $23,916
Metal Products 4,076 3,616 3,461
------- ------- -------
Total $33,480 $29,679 $27,377
======= ======= =======
Capital expenditures:
Chemical Products $68,059 $65,767 $27,164
Metal Products 4,435 9,415 3,722
------- ------- -------
Total $72,494 $75,182 $30,886
======= ======= =======
Identifiable assets at December 31:
Chemical Products $746,887 $658,393 $517,446
Metal Products 95,341 84,786 53,412
Cash and cash equivalents 9,745 10,252 44,932
-------- -------- --------
Total $851,973 $753,431 $615,790
======== ======== ========
The Company's operations by geographic segment are as follows (in thousands):
1994 1993 1992
------ ------ ------
Net sales to unaffiliated customers:
United States $602,573 $530,133 $457,275
Foreign 248,617 209,302 197,131
Net intercompany sales between
geographic areas:
United States 92,752 85,521 74,362
Foreign 32,782 27,276 26,709
Eliminations (125,534) (112,797) (101,071)
--------- -------- --------
Total $851,190 $739,435 $654,406
========= ======== ========
Income before provision for income taxes
and cumulative effect of accounting changes:
United States $156,380 $158,908 $131,094
Foreign 16,803 9,096 19,797
Eliminations (2,874) (2,387) (3,579)
--------- -------- --------
Total $170,309 $165,617 $147,312
========= ======== ========
Identifiable assets at December 31:
United States $612,721 $551,736 $461,860
Foreign 256,563 225,035 175,244
Eliminations (17,311) (23,340) (21,314)
--------- -------- --------
Total $851,973 $753,431 $615,790
========= ======== ========
NOTE 11 - PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS
Pension and Retirement Savings Plans
The Company and its subsidiaries have several retirement plans
covering substantially all domestic employees and certain
employees of foreign subsidiaries. The Company's defined benefit
plans provide all eligible employees with a monthly retirement
benefit based upon compensation and years of service with the
Company.
<TABLE>
<CAPTION>
The net periodic pension cost for the Company's defined benefit plans is as follows (in thousands):
December 31,
-------------------------------------------------------
Domestic Foreign
--------------------------- ------------------------
1994 1993 1992 1994 1993 1992
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Service cost $1,669 $1,429 $1,396 $2,336 $1,580 $ 334
Interest cost 2,196 1,956 1,722 1,760 1,264 265
Actual return on
plan assets 329 (2,419) (1,067) (1,422) (2,565) (706)
Net amortization
and deferral (2,515) 652 (366) (897) 936 281
------ ------ ------ ------ ------ -----
Net periodic pension
cost $1,679 $1,618 $1,685 $1,777 $1,215 $ 174
====== ====== ====== ====== ====== =====
</TABLE>
The Company's policy is to fund its domestic defined benefit plan
with the maximum contribution allowed under the Internal Revenue
Code. Foreign plans are funded at a level to maintain the
solvency of the plans as defined by local law. At December 31, 1994,
assets of the Company's defined benefit plans were invested in listed common
stocks, stock mutual funds, government and corporate bonds and
money market instruments. No common stock of the Company is held
by these plans.
<TABLE>
The funding status of the Company's defined benefit plans and
amounts recognized with respect to these plans in the
consolidated balance sheets are as follows (in thousands):
December 31,
------------------------------------
Domestic Foreign
----------------- ----------------
1994 1993 1994 1993
Actuarial present value of benefit obligations: ------ ------ ------ ------
<S> <C> <C> <C> <C>
Vested $25,317 $23,563 $26,496 $23,038
======= ======= ======= =======
Accumulated $26,837 $25,111 $26,496 $23,038
======= ======= ======= =======
Projected $28,986 $27,951 $35,033 $28,982
Plan assets at fair value 33,975 30,298 38,045 28,257
------- ------- ------- -------
Deficiency (excess) of plan assets over projected
benefit obligations (4,989) (2,347) (3,012) 725
Unrecognized net gain (loss) (641) (297) 1,904 (1,478)
Unrecognized prior service cost (2,610) (2,726) (1,250) (1,181)
Unrecognized net assets 908 998 327 347
------- ------- ------- -------
Pension (assets) $(7,332) $(4,372) $(2,031) $(1,587)
======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
Assumptions used in the preceding determinations, which reflect
average long-term expectations and may not represent current
experience, are as follows:
December 31,
--------------------------------------
Domestic Foreign
-------------- --------------
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Discount rate in determining
benefit obligations 8.0% 7.5% 5.3% 5.0%
Compensation rate increase 6.0% 5.5% 5.5% 4.0%
Return on plan assets 8.5% 8.5% 6.8% 6.8%
</TABLE>
The Company's 401(k) retirement savings plan provides eligible,
domestic employees with retirement benefits in addition to those
provided by the defined benefit plan. The plan permits participants to
voluntarily contribute up to 15% of their compensation, subject to
Internal Revenue Code limitations. The Company also contributes a
fixed amount per year for each eligible employee plus a percentage of
the employee's contribution. The Company's policy is to fully fund
this plan. The cost for this plan was $2,337,000, $2,032,000 and
$2,825,000 for the years ended December 31, 1994, 1993 and 1992,
respectively.
Other Postretirement Benefits
Certain employees of U.S. operations who retire on or after attaining
age 55 with at least 7 years of service with the Company are entitled
to postretirement health, dental and life coverages. These benefits
are subject to deductibles, co-payment provisions and coordination
with benefits available under Medicare. The Company may amend or
change the plan periodically.
Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions", requires that the
expected future cost of these benefits be expensed during the years
that the employees render service. The Company adopted this accounting
principle effective January 1, 1993, and recorded a charge to expense
of $21,306,000 ($13,806,000 after tax, or $.28 per share) as the
cumulative effect of a change in accounting principle to recognize the
prior years' costs. Prior to 1993, benefit costs were recognized as
claims were paid. The total cost of postretirement benefits charged to
operations was $446,000 in 1992. The components of net postretirement
benefit cost for 1994 and 1993 were as follows (in thousands):
1994 1993
------ ------
Service cost $1,414 $1,039
Interest cost 2,133 1,750
------ ------
Net postretirement
benefit cost $3,547 $2,789
====== ======
Future benefit costs were estimated assuming medical costs increase at
a 13.0% annual rate in 1994 decreasing ratably until the year 2000 to
a 7.0% growth rate and remaining at 7.0% per year thereafter. A 1.0%
increase in this annual trend rate would have increased the
accumulated postretirement benefit obligation at December 31, 1994 by
$2,630,000 and 1994 postretirement benefit expense by $420,000. The
weighted average discount rate used to estimate the accumulated
postretirement benefit obligation at December 31, 1994 is 8.0%.
Benefits are funded as claims are paid. The accounting change does not
impact the Company's cash flows.
A reconciliation of the plan's funded status to the accrued postretirement
benefit liability included in the consolidated balance sheet at
December 31, is as follows (in thousands):
Accumulated postretirement benefit obligation: 1994 1993
------ ------
Retirees $8,690 $8,139
Active - fully eligible 5,083 5,613
Active - other 14,519 14,486
------ ------
Total 28,292 28,238
Plan assets at fair value -- --
------ ------
Unfunded postretirement benefit obligation 28,292 28,238
Unrecognized net loss (223) (3,000)
------ ------
Accrued postretirement benefit liability 28,069 25,238
Less-Current portion included in accrued payroll
and other expenses (812) (679)
------- -------
Deferred postretirement benefits liability $27,257 $24,559
======= =======
NOTE 12 - ACQUISITIONS
On May 6, 1993, the Company acquired the net assets and business of
Supelco, Inc., a worldwide supplier of chromatography products used in
chemical research and production, for $54,700,000 in cash. On June
16, 1993, the Company acquired all of the stock of Circle AW Products
Company, a supplier of electrical and electronic metal enclosures to
industrial, residential and commercial markets, for $10,800,000 in
cash. The net tangible assets of these businesses were recorded based
upon fair market values as of the respective acquisition dates. The
excess of the purchase prices over these values aggregated $30,500,000
and was recorded as intangible assets, with the unamortized balance
included in other assets in the consolidated balance sheet. The
results of operations for these businesses from their respective
acquisition dates are included in the Company's consolidated statement
of income for the period ended December 31, 1993, including
amortization of the intangible assets over periods ranging from 5 to
40 years.
The following presents (in thousands, except net income per share) the
unaudited pro forma consolidated results of operations as if these
acquisitions had occurred at the beginning of the years presented.
The unaudited pro forma results do not purport to be indicative of the
actual results that would have been achieved had these acquisitions
occurred as of January 1, 1992, or of results which may occur in the
future.
Years ended December 31,
------------------------
1993 1992
-------- --------
Net sales $765,519 $723,517
======== ========
Net income $107,825* $ 95,284
======== ========
Net income per share $ 2.17* $ 1.91
======== ========
*Before cumulative effect of accounting changes.
SIGMA-ALDRICH CORPORATION
PRINCIPAL SUBSIDIARIES
--------------------------
Sigma-Aldrich Corporation (Delaware), the Registrant:
1. Sigma Chemical Company (Delaware)
(A) Sigma F & D Division, Inc. (Missouri)
(B) Sigma Redevelopment Corporation (Missouri)
(C) Sigma Second Street Redevelopment Corporation (Missouri)
(D) Sigma Israel Chemicals Ltd. (Israel)
(E) Sigma-Aldrich Chemie Holding GmbH (Germany)
(F) Sigma-Aldrich Chemie GmbH (Germany)
2. Aldrich Chemical Company, Inc. (Delaware)
(A) Sigma-Aldrich N.V./S.A. (Belgium)
(B) Aldrich-Chemie Verwaltungs GmbH (Germany)
(C) Aldrich-Chemie GmbH and Co. K.G. (Germany)
(D) Sigma-Aldrich, S.r.l. (Italy)
3. B-Line Systems, Inc. (Missouri)
(A) Circle AW Products Company (Delaware)
4. Sigma-Aldrich Company, Ltd. (United Kingdom)
5. Sigma-Aldrich Foreign Sales Corporation (Barbados)
6. Fluka Chemie AG (Switzerland)
(A) Fluka Chemical Corporation (New Jersey)
7. Sigma-Aldrich Foreign Holding Company (Missouri)
(A) Sigma-Aldrich Quimica S.A. (Spain)
(B) Sigma-Aldrich Pty., Limited (Australia)
(C) Sigma-Aldrich Canada, Ltd. (Canada)
(D) Sigma-Aldrich s.r.o. (Czech Republic)
(E) Sigma-Aldrich Chemical Representacoes, Ltd. (Brazil)
(F) Sigma-Aldrich Quimica S.A. de C.V. (Mexico)
(G) Sigma-Aldrich Handels GmbH (Austria)
(H) Sigma-Aldrich Kft. (Hungary)
(I) Sigma-Aldrich Sp.zo.o (Poland)
(J) LabKemi AB (Sweden)
8. Supelco, Inc. (Delaware)
(A) Supelco S.A. (Switzerland)
(B) Sigma-Aldrich Japan KK (Japan)
9. Sigma-Aldrich Chimie S.N.C. (France)
(A) Sigma-Aldrich Chimie France S.a.r.l. (France)
All subsidiaries are directly or indirecly 100% owned.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the
incorporation of our report incorporated by reference in this Form
10-K, into the Company's previously filed registration statements
on Form S-8, file numbers 2-95937 and 33-24415.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
St. Louis, Missouri
March 30, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 9745
<SECURITIES> 0
<RECEIVABLES> 142656
<ALLOWANCES> 7763
<INVENTORY> 330333
<CURRENT-ASSETS> 502345
<PP&E> 506719
<DEPRECIATION> 204030
<TOTAL-ASSETS> 851973
<CURRENT-LIABILITIES> 105037
<BONDS> 14478
<COMMON> 49832
0
0
<OTHER-SE> 649673
<TOTAL-LIABILITY-AND-EQUITY> 851973
<SALES> 851190
<TOTAL-REVENUES> 851190
<CGS> 405110
<TOTAL-COSTS> 405110
<OTHER-EXPENSES> 275771
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2910
<INCOME-PRETAX> 170309
<INCOME-TAX> 59969
<INCOME-CONTINUING> 110340
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 110340
<EPS-PRIMARY> 2.21
<EPS-DILUTED> 2.21
</TABLE>
