SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
FOR FISCAL YEAR ENDED MARCH 31, 1997.
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ________ to ________.
Commission File No.: 0-23474
TRIPLE S PLASTICS, INC.
(Exact name of registrant as specified in its charter)
Michigan 38-1895876
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
14320 Portage Road, Vicksburg, Michigan 49097-0905
(Address of principal executive offices) (Zip Code)
(616)649-0545
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each Class Name of each exchange on which registered
None
Securities registered pursuant to Section 12(g) of the Act:
Common stock, no 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]
As of May 31, 1997, there were 3,738,204 shares of the registrant's common
stock, no par value, outstanding. The aggregate market value of the common stock
held by non-affiliates of the registrant (i.e., excluding shares held by
executive officers, directors, and control persons as defined in Rule 405) on
that date was approximately $11,336,000 computed on the closing price on that
date.
Portions of the Company's Proxy Statement for its 1997 Annual Meeting of
Shareholders are incorporated by reference into Part III.
Exhibit Index located at page 25.
Page 1 of 29
<PAGE>
PART I
Item 1. Business
(a) General Development of Business
Triple S Plastics, Inc. (the "Company" or "Triple S") was organized as a
Michigan corporation in 1969, when injection molding operations began in a
leased facility in Kalamazoo, Michigan. The building that currently houses
the Company's headquarters and principal manufacturing operations in
Vicksburg, Michigan, was constructed in 1974. In 1978, the Company
constructed a second injection molding facility (originally known as Victor
Plastics) and also constructed its Satellite Mold facility, which is
dedicated to mold production, both in Vicksburg. In 1983, the Company
supplemented its mold building capacity by acquiring the A-Tech Mold
manufacturing plant in Schoolcraft, Michigan. Also in 1983, the Company
built its injection molding plant in Tucson, Arizona.
The Company completed an initial public offering of its common stock in
March of 1994. Proceeds of that offering were used to finance building
expansions, purchase new equipment for those facilities, retire existing
debt and fund working capital needs.
Triple S completed two construction projects in fiscal 1995 for the purpose
of expanding its injection molding capacity. A new 64,000 square foot
facility was constructed in a modern industrial park in Battle Creek,
Michigan. In addition, the Company completed a 52,000 square foot
expansion of its Tucson, Arizona facility. (See Item 2, Properties)
In October 1995, the Company began operations in a 64,000 square foot
leased injection molding facility in Georgetown, Texas. (See Item 2,
Properties)
(b) Financial Information About Industry Segments
The Company's operations are in one industry segment--the manufacture of
thermoplastic components, most of which are complex, highly-engineered
components primarily for sale to original equipment manufacturers. The
Company has no significant export sales. Therefore, no separate industry
segment information is presented.
(c) Narrative Description of Business
General
Triple S manufactures complex, highly engineered thermoplastic components
and the molds to produce those components primarily for the consumer
products, information technologies, automotive, medical/pharmaceutical and
telecommunications markets. During the most recent fiscal year, the
Company manufactured over 1,500 different components for more than 170
customers in these markets. The Company considers both mold building and
molded component manufacturing to be integral parts of its business. The
Company manufactures only custom components based on customer specifi-
cations and, therefore, is generally the exclusive source of supply for the
product being sold to the customer.
The Company's product development and production operations include design
assistance, component engineering, mold design, prototype and production
mold construction, process engineering and high quality component
production. In addition, the Company provides value added post-molding
assembly and finishing operations, including ultrasonic welding, heat
staking, solvent bonding, decorative services, machining and on-line
packaging. Mold delivery lead time and component quality are generally key
factors in the award of contracts for complex components. The Company has
made significant investments in state-of-the-art CAD/CAM systems and
related design and machining equipment to accelerate its component mold
design and construction process. Each injection molding machine is equipped
with a computerized process controller to continuously monitor component
quality and consistency. The Company believes that its integrated
operations, ability for short lead-time mold delivery and product quality
provide competitive advantages in the markets in which it operates.
<PAGE>
Certain developments in markets served by the Company have created growth
opportunities for suppliers of plastic components. Efforts to reduce
weight, enhance design flexibility and reduce costs have resulted in the
substitution of plastic for wood, glass, paper, metal and other materials
in numerous applications. In addition, Original Equipment Manufacturers
(OEMs) are continuing to outsource not only the manufacture but also the
design, engineering and assembly of plastic components to qualified
suppliers. OEMs are consolidating their purchases with larger, integrated
components suppliers that possess full-service capabilities for all
functions from mold design through post-molding assembly and finishing
operations. The Company believes that its technical expertise with respect
to plastic resins and injection molding technology, and its capacity for
full service, high-quality response to the needs of customers will enable
the Company to continue to grow as a result of these market dynamics.
Markets and Products
The Company produces components for customers that operate principally in
five markets: consumer products, information technologies, automotive,
medical/pharmaceutical and telecommunications.
CONSUMER PRODUCTS MARKET. Customers in the consumer products market
manufacture products such as lawn and garden equipment, photographic
equipment, home entertainment devices and luggage. Products sold to
customers in this market include components for chain saws and string
trimmers, camera components, CD player enclosures, and various housings and
covers. Sales to this market in fiscal 1997, 1996 and 1995 represented
approximately 32%, 26% and 29%, respectively. The Company expects the use
of plastics in this broad market to continue to grow as new thermoplastic
resins evolve, with higher strengths, better impact and heat resistance and
other physical properties that will increase the trend towards the substi-
tution of plastics for other materials. Sales to one customer in this
market, McCulloch Corporation, accounted for 14%, 10% and 13% of total
sales for fiscal 1997, 1996 and 1995, respectively.
INFORMATION TECHNOLOGIES. Customers in the information technologies market
are primarily manufacturers of computers, printers, copy machines, laser
scanners and bar code readers. The products supplied by the Company to
these customers include components for personal computers and peripheral
equipment, and laser and bar code scanners. Sales to this market in fiscal
1997, 1996 and 1995 represented approximately 24%, 36% and 33%,
respectively. Shortened product life cycles in this market have driven OEMs
to find and work closely with suppliers who can effectively compress lead
times through concurrent engineering and accelerated mold deliveries. The
Company has strategically structured its equipment, facilities and staff to
meet the needs of this market. Sales to one customer in this market,
International Business Machines Corporation, accounted for 8%, 16% and 15%
of total sales for fiscal 1997, 1996 and 1995, respectively.
AUTOMOTIVE MARKET. Sales in the automotive market are made mostly to
first-tier suppliers to automobile manufacturers. Products sold to
customers in this market include interior mechanical and seating
components, headlight adjustment brackets, outside mirror shells and
components for electrical and audio systems. Sales to this market in fiscal
1997, 1996 and 1995 represented approximately 18%, 19% and 21%,
respectively. Automotive OEMs and first-tier suppliers are relying on fewer
vendors possessing broader capabilities. First-tier suppliers have been
increasing the outsourcing of the design and manufacture of plastic compo-
nents and are purchasing more complex subassemblies from a shrinking base
of suppliers. While this market becomes increasingly competitive, the
Company believes it has the capabilities to compete effectively in this
market. The Company's Battle Creek, Michigan facility, which was construc-
ted in fiscal 1995, was strategically located to more effectively serve the
Company's automotive customers.
MEDICAL/PHARMACEUTICAL MARKET. Customers in the medical/pharmaceutical
market are comprised primarily of manufacturers of durable medical
equipment for use in non-sterile, non-invasive applications. Products sold
to customers in this market include components for urological appliances,
hospital stretchers and beds and glucose test kits. Sales to this market in
fiscal 1997, 1996 and 1995 represented 11%, 11% and 10%, respectively. The
Company has targeted this market for expansion because customers tend to
require product engineering services for high volume components with close
tolerances and post-molding assembly and finishing services.
<PAGE>
TELECOMMUNICATIONS MARKET. Customers in this market manufacture products
such as cellular phones, pagers and related accessories. Sales to this
market in fiscal 1997 and 1996 were 11% and 4%, respectively, and was
insignificant in fiscal 1995. Customers in this market require high levels
of CAD assisted design engineering, thin-wall molding, in-mold decorating
and assembly. Because of the Company's expertise in these areas and the
strong growth demonstrated by OEMs in this market, telecommunications
provides expanded business opportunities for the Company.
Sales and Marketing
The Company currently markets its services on a national basis through its
direct sales force of four people and six independent manufacturers'
representative organizations.
Operations
The Company designs, engineers and constructs molds used to produce thermo-
plastic components at two of its facilities. Each of these facilities is
equipped with modern design and machining equipment, including CAD/CAM
systems, translators and plotters, electrical discharge machining equip-
ment, CNC milling equipment and miscellaneous support equipment. The
Company's mold production capacity is generally devoted to the production
of molds to be used by the Company for the production of injection molded
components for its customers. In substantially all cases, the customer
owns the mold, but possession is retained by the Company for production.
The Company has five facilities that are full service custom injection
molding plants with post-molding secondary operations. These facilities
collectively house 94 horizontal injection molding machines with capacities
ranging from 55 tons to 500 tons and 1 vertical machine with capacity of
40 tons. Each machine utilizes a computerized process controller that
continuously monitors key process parameters on a real time basis and
signals the operator if any parameter falls outside predetermined statis-
tical limits. The injection molding process is supported by automated
systems for raw material drying, conveying and regrinding. Three of the
Company's plants have received ISO 9002 certification, an international
quality standard. The Company is also pursuing certification of its
facility in Battle Creek, Michigan.
Triple S maintains a Tech Center to conduct prototype and development
projects, frequently in conjunction with resin suppliers and customers'
engineers. Through the many projects undertaken at its Tech Center, the
Company has gained experience with nearly all resins currently in use for
injection molding. This expertise combined with the Company's injection
molding production experience enables the Company to provide innovative
solutions for its customers.
Value added post-molding secondary services, including ultrasonic inserting
and welding, heat staking, solvent bonding, finishing, machining, assembly
and on-line packaging are offered to the Company's customers. These
important services support the customers' requirements for subassembled
components, which provide cost savings and manufacturing efficiencies.
Raw Materials
The principal raw materials used by the Company are thermoplastic resins.
The Company uses over 300 different resins, nearly all of which are
classified as engineering grade resins, as compared to lower priced
commodity grade resins. Resins are generally purchased for the production
of existing orders. The Company purchases its raw materials from several
different sources, and these materials are available from several
suppliers.
Backlog
At March 31, 1997, the Company's backlog was approximately $15 million,
which is up slightly from the previous year. Backlog generally does not
exceed one quarter's manufacturing capacity and the Company's customers
generally do not issue purchase orders for more than the next quarter's
requirements. Management believes that all of the existing backlog will be
completed during the current fiscal year.
<PAGE>
Employees
At March 31, 1997, the Company employed 727 full time and 10 part time
employees. The Company has no employees who are represented by a labor
union, and considers its relations with its employees to be good. The
Company also utilizes temporary employees in its plants to produce
products.
Competition
The injection molding business in the Company's markets is highly
competitive. The Company focuses on complex components with close
tolerances where it competes principally on the basis of technical
expertise, customer service, product quality and rapid mold production,
although price is also an important competitive factor. There are many
suppliers of plastic injection molded components, including many that are
larger than the Company with greater financial resources.
Patents and Trademarks
The Company does not own any patents, registered trademarks or licenses,
although the Company claims certain common law trademark rights. In
general, the Company relies on its technological capabilities, manu-
facturing quality control and know-how, rather than patents, in the
conduct of its business.
Item 2. Properties
The following table sets forth information regarding the Company's mold
making and component production facilities:
Location Size Function
Tucson, Arizona 92,000 sq. ft. Injection molding, post-molding
operations and office
Battle Creek, Michigan 64,000 sq. ft. Injection molding, post-molding
operations and office
Georgetown, Texas 64,000 sq. ft. Injection molding, post-molding
operations and office
Vicksburg, Michigan 59,000 sq. ft. Corporate headquarters, injec-
tion molding, post-molding
operations and warehouse
Vicksburg, Michigan 40,000 sq. ft. Injection molding, post-molding
operations and office
Vicksburg, Michigan 26,000 sq. ft. Mold manufacturing and office
Schoolcraft, Michigan 8,000 sq. ft. Mold manufacturing and office
The Company owns all of its facilities except for the Georgetown facility
and the Schoolcraft facility, which are leased. The Schoolcraft facility is
leased from a former shareholder on terms that the Company believes are as
favorable as could have been obtained from an unrelated third party.
Item 3. Legal Proceedings
The Company is not a party to any legal proceedings that are material
within the meaning of Regulation S-K.
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the fourth
quarter ended March 31, 1997.
Additional Item: Executive Officers of the Registrant.
The following table lists the names, ages and positions of all of the
Company's executive officers. Officers are elected annually by the Board of
Directors at the first meeting of the Board following the annual meeting of
shareholders.
Name Age Position
Daniel B. Canavan 43 Chairman of the Board and Chief
Executive Officer
Victor V. Valentine, Jr. 51 President
William J. Stewart 53 Executive Vice President
Robert D. Monk 46 Vice President, Chief Financial Officer,
Secretary/Treasurer
Daniel D. Northup 45 Vice President of Engineering
Michael E. Zaagman 39 Vice President of Operations
Daniel B. Canavan has been Chairman of the Board and Chief Executive
Officer of the Company for more than five years.
Victor V. Valentine, Jr, has been President of the Company for more than
five years.
William J. Stewart has been the Company's Executive Vice President for more
than five years.
Robert D. Monk joined the Company as Vice President, C.F.O. and
Secretary/Treasurer on April 1, 1996. For the prior 12 years, Mr. Monk was
employed by Stryker Corporation, as Vice President - Finance of the Medical
Division, for the most recent two years, and prior to that as Treasurer and
Corporate Controller.
Daniel D. Northup has been the Vice President of Engineering since March
1993. Previously Mr. Northup held the position of President of the Company's
Satellite Mold operation for more than five years.
Michael E. Zaagman has been Vice President of Operations since January
1997. Mr. Zaagman joined Triple S Plastics, Inc. as the Corporate Director of
Materials in March 1995. Previously he held various positions with the Sequest
Closures Division of Aptar Corporation.
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related Shareholder Matters
The Company's common stock is traded on the Nasdaq Stock Market under the symbol
TSSS. The price quotations reported below were supplied by the NASD.
Fiscal Quarter High Low Close
1997 4th 9 1/2 6 1/2 7
3rd 8 3/4 5 7 3/4
2nd 6 1/4 4 1/2 5 3/8
1st 7 5/8 5 3/8 5 5/8
1996 4th 7 1/4 5 1/4 7 1/4
3rd 10 1/2 6 1/4 6 1/2
2nd 12 3/4 10 10
1st 11 1/4 7 1/2 11 1/4
As of May 31, 1997, there were 279 record holders of the Company's common
stock. Based on the number of sets of proxy materials mailed by the Company's
transfer agent, the Company estimates there are 2,200 additional beneficial
owners of the Company's common stock who hold the stock in street name. No
cash dividends have been paid during the past two years.
Item 6. Selected Financial Data
<TABLE>
Fiscal Years Ended March 31
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
1997 1996 1995 1994 1993
Income Statement Data:
Net sales $ 64,608 $ 61,270 $ 54,051 $ 43,472 $ 32,685
Gross profit 10,464 9,271 12,245 10,917 7,636
Operating income 2,447 1,995 5,372 5,663 3,239
Interest expense, net 358 408 80 619 529
-------- -------- -------- -------- --------
Income before income taxes 2,089 1,587 5,292 5,044 2,710
Income taxes 760 549 1,866 1,685 972
-------- -------- -------- -------- --------
Net income $ 1,329 $ 1,038 $ 3,426 $ 3,359 $ 1,738
======== ======== ======== ======== ========
Per Share Data:
Net income $ .36 $ .28 $ .92 $ 1.30 $ .67
======== ======== ======== ======== ========
Weighted average shares
outstanding 3,734 3,727 3,724 2,586 2,601
March 31 (in thousands)
1997 1996 1995 1994 1993
Balance Sheet Data:
Working capital $ 10,136 $ 9,561 $ 12,241 $ 16,290 $ 4,096
Total assets 48,323 46,150 42,339 38,113 22,834
Long-term debt, less
current maturities 7,251 8,747 5,666 6,077 7,764
Shareholders' equity 30,353 28,981 27,902 24,471 7,788
</TABLE>
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The Company is a full-service custom injection molder, providing mold
design and engineering services, mold manufacturing, injection molding, and
post-molding assembly and finishing operations to a diverse base of customers.
Its customers are primarily in the consumer products, information technologies,
automotive, medical/pharmaceutical, and telecommunications markets. The
Company operates in one business segment and backlog generally does not exceed
one quarter's manufacturing capacity. The Company's fiscal year is March 31 and,
unless otherwise noted, references to fiscal 1997, 1996, and 1995 relate to the
fiscal years ended March 31, 1997, 1996, and 1995.
RESULTS OF OPERATIONS
The table below outlines the components of the Company's Statements of
Income as a percentage of net sales:
Fiscal Year ended March 31 1997 1996 1995
Net sales 100.0% 100.0% 100.0%
Cost of sales 83.8 84.9 77.3
Gross profit 16.2 15.1 22.7
S,G&A expenses 12.4 11.8 12.7
Operating income 3.8 3.3 10.0
Interest expense, net .6 .7 .2
Income before income taxes 3.2 2.6 9.8
Income taxes 1.1 .9 3.5
Net income 2.1% 1.7% 6.3%
FISCAL 1997 COMPARED TO FISCAL 1996
Triple S Plastics' net sales increased 5% in fiscal 1997 to $64.6 million
from $61.3 million in 1996. The increase in sales is primarily attributable to
increased sales to established customers and sales to new customers, rather than
price increases on existing products. Approximately 70% of the Company's sales
in 1997 were to 10 customers, including at least one customer in each of the
business markets served by the Company. The Company's sales increased to all the
markets the Company serves except information technologies, which decreased 30%,
but still represents 24% of total sales. This decrease represents the completion
of several customer projects during 1997 which were not replaced with new
projects. Sales to the consumer products market grew 30% in fiscal 1997 and
represented 32% of sales compared to 26% in 1996. Sales to the telecommuni-
cations market showed strong growth of 152%, increasing to 11% of sales in 1997
compared to 4% in 1996. Sales in the medical and automotive markets
also remained strong, increasing 13% and 4%, respectively.
Cost of sales 4% over the prior year but decreased to 83.8% of sales
compared to 84.9% in 1996. The lower cost of sales percentage in 1997 princi-
pally resulted from a reduced material cost of sales ratio (due to the sales
mix) and from some realized manufacturing efficiencies and cost reductions
compared to the prior year. This decrease occurred despite a 14% across the
board production associate wage increase in the third quarter and an increase in
depreciation expense of $384,000 resulting from increased capital expenditures.
Selling, general and administrative expenses increased $741,000 or 10%, to
$8.0 million in 1997. As a percentage of net sales, these expenses increased
slightly to 12.4% in 1997 compared to 11.8% in 1996. The increase was princi-
pally due to increased depreciation, salaries and professional services as the
Company completed the comprehensive upgrade of its information systems in the
third quarter.
Net interest expense decreased slightly to $358,000 or .6% of net sales in
1997, compared to $408,000 or .7% in 1996. The decrease is due to the Company
not borrowing on its available line of credit during 1997 as well as a general
reduction of long-term debt.
The effective income tax rate increased to 36.4% in fiscal 1997 compared to
34.6% in 1996. The increase is due to variances in non-deductible expenses for
income tax purposes. Net earnings increased 28% to $1.3 million in 1997 compared
to $1.0 million in 1996.
<PAGE>
FISCAL 1996 COMPARED TO FISCAL 1995
Net sales increased 13% in fiscal 1996 to $61.3 million from $54.1 million
in 1995. The increase in sales was primarily attributable to additional sales to
established customers as well as sales to a few relatively new customers, rather
than price increases on existing products. Nearly 65% of the Company's sales in
1996 were to 10 customers, including at least one customer in each of the
business markets served by the Company. The Company's sales increased to all the
markets the Company serves except automotive, which decreased 2%. Sales to the
information technologies market grew 22% in fiscal 1996 and represented 36% of
sales compared to 33% in 1995. The overall sales increase in 1996 was also led
by telecommunications and medical market products.
Cost of sales increased 24% in fiscal 1996 and represented 84.9% of sales
compared to 77.3% in 1995. The higher cost of sales percentage in 1996 was due
to the increased cost of engineering grade resins, as well as increased
depreciation and labor costs related to the Company's expansion efforts. During
the year, the industry experienced further significant price increases in
engineered resins, which comprise approximately 80% of the resin used by the
Company. In addition, the Company continues to consolidate resin purchases where
appropriate and to pursue contract pricing to mitigate increases in the cost of
resin.
The Company increased its production capacity in fiscal 1996 in response to
increased demand projected by the Company's customers. This included adding a
new facility (which is leased) in Georgetown, Texas and adding 18 new molding
machines throughout the Company. As a result of increased capital expenditures,
depreciation expense in 1996 was $648,000 higher than the previous year.
Selling, general and administrative expenses increased 6% in fiscal 1996
which was well below the rate of increase in sales. As a percentage of net
sales, these expenses decreased to 11.8% from 12.7%.
Net interest expense increased significantly in fiscal 1996 compared to the
prior year due to an increase in the amount of outstanding long-term debt, as
the Company issued a $5 million industrial revenue bond to finance the equipment
expansion in its Texas plant. In addition, in fiscal 1995 the Company had
capitalized interest expense of $186,000 relating to an expansion of its Tucson,
Arizona facility, which reduced interest expense in that year.
The effective income tax rate decreased slightly to 34.6% in fiscal 1996
compared to 35.3% in 1995. Net income in fiscal 1996 was $1.0 million compared
to $3.4 million in 1995, a decrease of 70%.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary cash requirements are for operating expenses and
capital expenditures. Historically, the Company's prime sources of cash have
been from operations, bank borrowings, and industrial revenue bonds.
Triple S Plastics' financial position remained strong in 1997 with
operating activities providing $5.4 million in cash. The Company had working
capital at the end of the year of $10.1 million. Accounts receivable increased
16% yet days sales outstanding at the end of fiscal 1997 decreased to 54 days
compared to 57 days at the end of the prior year. Inventories remained flat,
increasing only 2% at the end of 1997 while days in inventory increased modestly
to 31 days compared to 27 days at the end of the previous year. Accounts payable
increased by 109% at the end of fiscal 1997 compared to the prior year end. This
increase relates to a higher level of general purchasing activity which had not
yet been paid at the end of 1997 compared to the prior year.
The Company has made a significant investment in capital equipment in the
last two years. Capital expenditures were $2.6 million and $5.4 million for
fiscal 1997 and 1996, respectively.
The Company has $3.8 million available from the $5.0 million industrial
revenue bond issued in October of 1995 to finance the expansion of the
Georgetown, Texas plant. The Company also has a $5.0 million unsecured line of
credit agreement with a bank, which has not been drawn on during 1997. These
sources of cash, along with internally generated cash, are expected to be
sufficient to fund planned future operating and capital requirements.
<PAGE>
Item 8. Financial Statements and Supplementary Data
The following financial statements are filed with this report as pages F-1
through F-11 following the signature page:
Report of Independent Certified Public Accountants
Balance Sheets
Statements of Income
Statements of Shareholders' Equity
Statements of Cash Flows
Notes to Financial Statements
PART III
Item 9. Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure
None
Item 10. Directors and Executive Officers of the Registrant
Information relating to executive officers is included in this report in
the last section of Part I under the caption "Executive Officers of the Regis-
trant". Information relating to directors appearing under the caption "Election
of Directors" in the definitive Proxy Statement for the 1997 Annual Meeting of
Shareholders to be held July 23, 1997, and to be filed with the Commission is
hereby incorporated herein by reference. Information concerning compliance with
Section 16(a) of the Securities Exchange Act of 1934 appearing under the caption
"Section 16(a) Beneficial Ownership Reporting Compliance" in the definitive
Proxy Statement for the 1997 Annual Meeting of Shareholders and filed with the
Commission is hereby incorporated herein by reference.
Item 11. Executive Compensation
The information contained under the caption "Executive Compensation"
contained in the definitive Proxy Statement for the 1997 Annual Meeting of
Shareholders is hereby incorporated herein by reference excluding the
information under the caption "Compensation Committee Report" and "Stock
Performance Graph".
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information contained under the caption "Securities Ownership of
Management" contained in the definitive Proxy Statement for the 1997 Annual
Meeting of Shareholders is hereby incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
Information relating to certain relationships and related party
transactions is incorporated by reference to the Company's definitive Proxy
Statement for the 1997 Annual Meeting of Shareholders under the caption
"Election of Directors".
<PAGE>
PART IV
Item 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K
(a) The following financial statements are filed as part of this report as
pages F-1 through F-11 following the signature page:
Report of Independent Certified Public Accountants
Balance Sheets
Statements of Income
Statements of Shareholders' Equity
Statements of Cash Flows
Notes to Financial Statements
(b) No reports on Form 8-K were filed for the three-month period ended
March 31, 1997.
(c) See Exhibit Index located on pages 32 and 33.
(d) The following financial statement schedule is filed as part of this
report as page F-13 following the signature page:
Schedule II - Valuation and Qualifying Accounts
All other schedules required by Form 10-K Annual Report have been omitted
because they were not applicable, were included in the notes to the financial
statements, or were otherwise not required under the instructions contained in
Regulation S-X.
<PAGE>
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.
Dated: May 31, 1997 TRIPLE S PLASTICS, INC.
By _DANIEL B. CANAVAN_________________
Daniel B. Canavan, Chairman of the Board
and Chief Executive Officer
and
By _ROBERT D. MONK____________________
Robert D. Monk, Vice President, C.F.O.,
and Secretary/Treasurer
(Principal Financial Officer)
Pursuant to the requirements of the Securities and Exchange Act of 1934,
this report has been signed below on this 31st day of May, 1997, by the
following persons on behalf of the Registrant and in the capacities indicated.
Each Director of the Registrant whose signature appears below, hereby
appoints Daniel B. Canavan and Robert D. Monk, and each of them individually as
his attorney-in-fact to sign in his name and on his behalf as a Director of the
Registrant, and to file with the Commission any and all Amendments to this
report on Form 10-K to the same extent and with the same effect as if done
personally.
_VICTOR V. VALENTINE_____________ _WILLIAM J. STEWART__________________
Victor V. Valentine, Director William J. Stewart, Director
_DANIEL D. NORTHUP_______________ _ALBERT C. SCHAUER___________________
Daniel D. Northup, Director Albert C. Schauer, Director
_DAVID L. STEWART_________________ _JAMES F. HETTINGER__________________
David L. Stewart, Director James F. Hettinger, Director
_ROBERT D. BEDILION_______________ _CATHERINE A. TAYLOR_________________
Robert D. Bedilion, Director Catherine A. Taylor, Corporate Controller
(Principal Accounting Officer)
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Page
Balance Sheets as of March 31, 1997 and 1996 F2
Statements of Income for the years ended March 31, 1997, 1996 and 1995 F3
Statements of Shareholders' Equity for the years ended March 31, 1997,
1996 and 1995 F4
Statements of Cash Flows for the years ended March 31, 1997,
1996 and 1995 F5
Notes to Financial Statements F6
Report of Independent Certified Public Accountants F10
F1
<PAGE>
TRIPLE S PLASTICS, INC.
BALANCE SHEETS
(Dollars in thousands)
MARCH 31 1997 1996
ASSETS
Current Assets:
Cash and cash equivalents $ 2,681 $ 1,382
Accounts receivable, less allowance of
$255 and $250 for possible losses (Note 4) 11,147 9,637
Refundable income taxes ---- 329
Inventories (Notes 2 and 4) 4,833 4,718
Deferred mold costs 55 82
Other 274 160
--------- ---------
Total Current Assets 18,990 16,308
--------- ---------
Property, Plant and Equipment (Notes 4 and 5):
Machinery and equipment 20,967 19,331
Land and buildings 11,036 10,976
Office furniture and equipment 3,198 2,589
Leasehold improvements 102 102
--------- ---------
35,303 32,998
Less accumulated depreciation and amortization 10,716 8,070
--------- ---------
Net Property, Plant and Equipment 24,587 24,928
Other:
Cash restricted for capital expenditures (Note 4) 3,787 3,827
Goodwill, net of accumulated amortization
of $431 and $393 717 755
Miscellaneous 242 332
--------- ---------
Total Other Assets 4,746 4,914
--------- ---------
$ 48,323 $ 46,150
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Note payable to bank (Note 3) $ --- $ 998
Accounts payable 4,540 2,170
Accruals:
Compensation 1,096 997
Income taxes 158 ---
Other 489 635
Deferred mold revenue 622 866
Current maturities of long-term debt (Note 4) 1,949 1,081
--------- ---------
Total Current Liabilities 8,854 6,747
Long-Term Debt, less current maturities (Note 4) 7,251 8,747
Deferred Income Taxes (Note 6) 1,865 1,675
--------- ---------
Total Liabilities 17,970 17,169
--------- ---------
Shareholders' Equity (Notes 4 and 9):
Preferred stock, no par value, 1,000,000
shares authorized, none issued --- ---
Common stock, no par value, 10,200,000
shares authorized, 3,736,941 and 3,728,831
shares issued and outstanding 14,413 14,370
Retained earnings 15,940 14,611
--------- ---------
Total Shareholders' Equity 30,353 28,981
--------- ---------
$ 48,323 $ 46,150
========= =========
See accompanying notes to financial statements.
F2
<PAGE>
TRIPLE S PLASTICS, INC.
STATEMENTS OF INCOME
(In thousands, except per share amounts)
Years ended March 31
1997 1996 1995
Net Sales $ 64,608 $ 61,270 $ 54,051
Cost of Sales 54,144 51,999 41,806
-------- -------- --------
Gross Profit 10,464 9,271 12,245
Total Selling, General &
Administrative Expenses 8,017 7,276 6,873
-------- -------- --------
Operating Income 2,447 1,995 5,372
Interest Income (Expense):
Interest expense (594) (607) (233)
Interest income 236 199 153
-------- -------- --------
Net Interest Expense (358) (408) (80)
-------- -------- --------
Income Before Income Taxes 2,089 1,587 5,292
Income Taxes (Note 6) 760 549 1,866
-------- -------- --------
Net Income $ 1,329 $ 1,038 $ 3,426
======== ======== ========
Earnings Per Share $ .36 $ .28 $ .92
======== ======== ========
Weighted Average Number of
Common Shares Outstanding 3,734 3,727 3,724
See accompanying notes to financial statements.
F3
<PAGE>
<TABLE>
TRIPLE S PLASTICS, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
(Dollars in thousands)
<S> <C> <C> <C>
Total
Common Retained Shareholders'
YEAR ENDED MARCH 31 Stock Earnings Equity
Balance, March 31, 1994 $ 14,324 $ 10,147 $ 24,471
Issuance of 587 shares of Common Stock 5 --- 5
Net income for the year --- 3,426 3,426
--------- --------- ---------
Balance, March 31, 1995 14,329 13,573 27,902
Issuance of 4,702 shares of Common Stock 41 --- 41
Net income for the year --- 1,038 1,038
--------- --------- ---------
Balance, March 31, 1996 14,370 14,611 28,981
Issuance of 8,102 shares of Common Stock 43 --- 43
Net income for the year --- 1,329 1,329
--------- --------- ---------
Balance, March 31, 1997 $ 14,413 $ 15,940 $ 30,353
See accompanying notes to financial statements.
</TABLE>
F4
<PAGE>
<TABLE> TRIPLE S PLASTICS, INC.
STATEMENTS OF CASH FLOW
(Dollars in thousands)
<S> <C> <C> <C>
Years ended March 31
1997 1996 1995
Operating Activities
Net income $ 1,329 $ 1,038 $ 3,426
Adjustments to reconcile net income
to cash provided by operating
activities:
Depreciation 2,934 2,492 1,844
Amortization 75 72 79
Deferred income taxes 190 (175) 200
Loss on sale of equipment 54 47 2
Changes in assets and liabilities:
Receivables:
Trade (1,510) 1,237 (2,387)
Refundable income taxes 329 (329) ---
Inventories (115) (601) (1,098)
Deferred mold costs 27 57 22
Other current assets (114) (75) 96
Accounts payable and accruals 2,323 (2,094) 594
Income taxes payable 158 (172) (197)
Deferred mold revenue (244) (126) 221
------- ------- -------
Cash Provided by Operating Activities 5,436 1,371 2,802
Investing Activities
Purchases of property, plant and
equipment, net of disposals (2,229) (5,352) (8,860)
Other investing activities (other assets) 53 (97) 26
Change in restricted cash 40 (3,827) ---
------- ------- -------
Cash Used in Investing Activities (2,136) (9,276) (8,834)
Financing Activities
Net borrowings (payments) on note
payable to bank (998) 998 ---
Proceeds from issuance of common stock,
net of fees paid 43 41 5
Proceeds from issuance of long-term debt --- 5,000 ---
Principal payments on long-term debt (1,046) (699) (385)
------- ------- -------
Cash Provided by (Used in)
Financing Activities (2,001) 5,340 (380)
Increase (Decrease) in Cash and ------- ------- -------
Cash Equivalents 1,299 (2,565) (6,412)
Cash and Cash Equivalents, beginning
of year 1,382 3,947 10,359
------- ------- -------
Cash and Cash Equivalents, end of year $ 2,681 $ 1,382 $ 3,947
======= ======= =======
See accompanying notes to financial statements.
</TABLE>
F5
<PAGE>
TRIPLE S PLASTICS, INC.
NOTES TO FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
Business
The Company operates in a single business segment and is a fully integrated
manufacturer of complex, highly engineered thermoplastic components for custo-
mers primarily in the consumer products, information technologies, automotive,
medical/pharmaceutical and telecommunications markets.
During the years ended March 31, 1997, 1996 and 1995, a consumer products
customer accounted for 14%, 10% and 13% of net sales, respectively, and an
information technologies customer accounted for 8%, 16% and 15% of net sales,
respectively.
Acquisitions and Goodwill
The financial statements include the net assets of businesses purchased at
their fair value at the acquisition date. The excess of acquisition costs over
the fair value of net assets acquired is included in and has been allocated to
goodwill. Goodwill is amortized on a straight-line basis over a thirty year
life.
Inventories
Inventories are valued at the lower of cost or market. Cost is determined
by the first-in, first-out (FIFO) method.
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Expenditures for renewals
and betterments are capitalized and maintenance and repairs are expensed as
incurred. Depreciation and amortization are computed by the straight-line method
over the estimated useful lives of the assets as follows:
Buildings 40 years
Machinery and equipment 5 to 10 years
Office furniture and equipment 3 to 10 years
Leasehold improvements 10 years
Income Taxes
The Company follows the liability method of accounting for income taxes and
provides deferred income taxes based on enacted income tax rates in effect on
the dates temporary differences between the financial reporting and tax bases of
assets and liabilities are expected to reverse. The effect on deferred tax
assets and liabilities of a change in income tax rates is recognized in the
period that includes the enactment date.
Fair Value of Financial Instruments
The carrying amounts of the Company's financial instruments, which consist
of cash, receivables, notes payable, accounts payable and long-term debt,
approximate their fair values. For long-term debt, the present value of future
cash flows, discounted at the Company's current effective borrowing rate, was
used to estimate fair value.
Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements. Actual results could differ from those
estimates.
Revenue Recognition
Revenue is recognized on plastic molded products when the products are
shipped to customers. Revenue on molds is recognized when the mold is completed
and samples of molded parts produced by the tool are shipped to customers. Prior
to that time, mold revenue and direct mold costs are deferred. Losses are
recognized when reasonable estimates of the amount of loss can be made. The
Company regularly reviews the credit collection and product return history and
status of its customers and provides for potential losses.
F6
<PAGE>
Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand and held in banks, money
market funds, commercial paper and other short-term investments with an original
maturity of three months or less when purchased.
Earnings per Share
Earnings per share is based on the weighted average number of shares of
common stock and common stock equivalents outstanding during each period.
Earnings per share is computed using the treasury stock method.
During February 1997, Statement of Financial Accounting Standards No. 128,
"Earnings Per Share" was issued by the Financial Accounting Standards Board.
Disclosure requirements are effective for financial statements for fiscal years
ending after December 15, 1997. The new standard establishes standards for
computing and presenting earnings per share. The Company does not expect
adoption of the standard to have a material effect on the earnings per share
amounts as currently disclosed in the accompanying financial statements.
2. Inventories
Inventories are summarized as follows (in thousands):
March 31
1997 1996
Raw materials and packaging $ 2,084 $ 2,153
Finished goods and work-in-process 2,749 2,565
------- -------
Total Inventories $ 4,833 $ 4,718
3. Note Payable to Bank
The Company has entered into a $5 million unsecured line-of-credit agree-
ment with a bank, due on demand, with interest on the unpaid principal balance
at the bank's prime rate (8.50% at March 31, 1997). There were no borrowings
under this agreement at March 31, 1997. At March 31, 1996, the amount out-
standing was $998,000.
4. Long-Term Debt
Long-term debt consists of (in thousands):
March 31
1997 1996
Georgetown Industrial Development
Corporation Revenue Bond $ 4,216 $ 4,712
Michigan Strategic Fund Limited Obligation
Revenue Bonds (1989 and 1990 series) 2,820 3,190
Mortgage notes payable to bank 1,692 1,743
Other 472 183
-------- ---------
Long-term debt 9,200 9,828
Current maturities of long-term debt 1,949 1,081
-------- ---------
Long-term debt, less current maturities $ 7,251 $ 8,747
======== =========
The Georgetown Industrial Development Corporation Revenue Bond provides for
monthly principal payments ranging from $48,000 to $80,000 plus interest through
November 2002. Interest is fixed at 6.56% through September 2000, and then
becomes variable at 77% of the bank's base lending rate. Cash restricted for
capital expenditures represents the remaining proceeds from this bond issue.
The Michigan Strategic Fund Limited Obligation Revenue bonds (1989 and 1990
series) provide for semi-annual interest payments with rates that vary from 6.9%
to 7.65% and annual principal payments through September
F7
<PAGE>
2001. The bonds are collateralized by a letter of credit with the bank which
requires annual interest payments of .875% of the outstanding bond balance.
The mortgage notes payable to the bank, maturing $15,454 monthly, include
interest at rates ranging from 7.07% to 8.61%, and are due at varying dates
through October 2012.
The above debt is secured by accounts receivable, inventories and property
and equipment. In connection with the overall bank financing agreement, the
Company must comply with certain financial and non-financial restrictive
covenants. The restrictive covenants include limitations on the amount of
required working capital, the ratio of debt to tangible net worth and the
minimum amount of tangible net worth. At March 31, 1997 and 1996, retained
earnings of $6 million was restricted by terms of the long-term debt described
above. At March 31, 1997, the Company was in compliance with all restrictive
covenants.
Maturities of long-term debt for the four fiscal years succeeding 1998 are:
1999 - $1,297,000; 2000 - $1,270,000; 2001 - $1,323,000; and 2002 - $1,980,000.
5. Leases and Commitments
The Company leases transportation equipment and manufacturing facilities
under operating leases expiring at various dates through 1999. Management
expects that in the normal course of business, leases will be renewed or
replaced by other leases. Minimum lease payments required under operating leases
are as follows: 1998 - $331,000; and 1999 - $106,000.
Obligations under capital leases include $313,000 for computer equipment
with an original cost of $432,000 and a net book value at March 31, 1997 of
$336,000.
Total lease expense for facilities and equipment amounted to $315,000 in
1997; $232,000 in 1996; and $47,000 in 1995.
6. Income Taxes
Provisions for income taxes consist of the following (in thousands):
Year Ended March 31
1997 1996 1995
Current:
Federal $ 525 $ 680 $ 1,567
State and local 45 44 99
------- ------- -------
570 724 1,666
Deferred 190 (175) 200
------- ------- -------
Total income taxes $ 760 $ 549 $ 1,866
The provision for the deferred income tax liability at March 31, 1997 and
1996 are principally related to temporary differences in accumulated
depreciation.
A reconciliation of the statutory federal income tax rate to the Company's
effective income tax rate is as follows:
Year Ended March 31
1997 1996 1995
Statutory federal income tax rate 34.0% 34.0% 34.0%
State and local income taxes, net
of federal income tax effect 1.4 1.8 1.9
Other 1.0 (1.2) (.6)
---- ---- ----
Effective income tax rate 36.4% 34.6% 35.3%
7. Employee Benefit Plan
The Company maintains a defined contribution plan covering substantially
all employees. Under the Plan, employees' contributions are made on a tax
deferred basis and are partially matched by the Company. Total expense under
the Plan was $140,000, $114,000 and $87,000 for 1997, 1996 and 1995,
respectively.
F-8
<PAGE>
8. Supplemental Disclosures of Cash Flow Information
Year Ended March 31
1997 1996 1995
Operating Activities:
Interest paid, net of amount
capitalized $ 599 $ 610 $ 423
Interest received 236 199 153
Income taxes paid 310 1,225 1,818
Income tax refund received 229 -- --
Non-cash Investing and
Financing Activities:
Capital expenditures financed
by capital lease obligation 418 -- --
Capital expenditures included
in accounts payable -- -- 362
9. Capital Stock
The Company maintains a stock option plan for key employees and has
reserved 450,000 shares of Common Stock for such plan. The options must be
exercised within ten years from the date of grant and the exercise price must
equal the fair market value of the Company's stock at the date of the grant. The
options may not be exercised prior to six months from date of grant.
In July 1996, the Company established an Outside Director Stock Option Plan
and has reserved 150,000 shares of Common Stock for such plan. The options must
be exercised within ten years from the date of grant and the exercise price must
equal the fair market value of the Company's stock at the date of the grant. The
options become exercisable six months after the grant date.
Net earnings and net earnings per share would not be materially different
if the Company accounted for its employee stock options under the fair value
method as provided for under FASB Statement No. 123, "Accounting for Stock-Based
Compensation."
A summary of stock option activity is as follows:
Option Price
Shares Per share
Options outstanding at March 31, 1994 60,000 $12.50
Granted 2,000 $12.00
Canceled (5,000) $12.50
------
Options outstanding at March 31, 1995 57,000 $12.00 - $12.50
Canceled (7,000) $12.50
------
Options outstanding at March 31, 1996 50,000 $12.00 - $12.50
Granted 66,200 $5.00 - $6.75
Canceled (20,000) $6.13 - $12.50
------
Options outstanding at March 31, 1997 96,200 $5.00 - $12.50
======
In August 1994, the Company established an Employee Stock Purchase Plan and
reserved 100,000 shares of Common Stock for such plan. Under the plan, any
eligible employee may purchase stock at a price equal to 85% of the fair market
value as of the last day of the option period.
F-9
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors and Shareholders
Triple S Plastics, Inc.
Vicksburg, Michigan
We have audited the accompanying balance sheets of Triple S Plastics, Inc.
as of March 31, 1997 and 1996 and the related statements of income,
shareholders' equity and cash flow for each of the three years in the period
ended March 31, 1997. 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 Triple S Plastics, Inc. at
March 31, 1997 and 1996, and the results of its operations and its cash flows
for each of the three years in the period ended March 31, 1997 in conformity
with generally accepted accounting principles.
BDO Seidman, LLP
Kalamazoo, Michigan
April 28, 1997
F-10
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON FINANCIAL
STATEMENT SCHEDULES
The Board of Directors
Triple S Plastics, Inc.
Vicksburg, Michigan
The audits referred to in our report to the Board of Directors of Triple S
Plastics, Inc. dated April 28, 1997 relating to the financial statements of
Triple S Plastics, Inc. included the audit of the schedule listed under Item 14
of Form 10-K for each of the three years in the period ended March 31, 1997.
This financial statement schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion on this financial
statement schedule based upon our audits.
In our opinion such financial statement schedule presents fairly, in all
material respects, the information set forth therein.
BDO Seidman, LLP
Kalamazoo, Michigan
April 28, 1997
F-11
<PAGE>
<TABLE>
TRIPLE S PLASTICS, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
<S> <C> <C> <C> <C> <C>
Additions
Balance at charged to Charged Balance
beginning costs and against Other at end of
Description of period expenses reserves changes period
- - ----------- ---------- ---------- -------- ------- ---------
Reserves and allowances
deducted from asset
accounts:
Allowance for uncollectible
accounts receivable:
Year ended March 31, 1997 $250,000 $ 30,000 $ 25,000 --- $255,000
Year ended March 31, 1996 $160,000 $188,000 $ 98,000 --- $250,000
Year ended march 31, 1995 $112,000 $ 48,000 --- --- $160,000
</TABLE>
F-12
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page
3(a) Registrant's Second Amended and Restated Articles of
Incorporation were filed as Exhibit 3(a) to a Registra-
tion Statement on Form S-1 (No. 33-74866) and the same
is incorporated herein by reference.
3(b) Registrant's Bylaws were filed as Exhibit 3(b) to a
Registration Statement on Form S-1 (No. 33-74866) and the
same is incorporated herein by reference.
4 A specimen Form of Stock Certificate was filed as
Exhibit 4 to a Registration Statement on Form S-1
(No. 33-74866) and the same is incorporated herein by
reference.
10(a)(1) A Business Loan Agreement between Registrant and First
of America Bank - Michigan, N.A. dated November 1, 1992,
and as amended December 21, 1993, with respect to
Registrant's Line of Credit, Secured Term Loan Avail-
ability, Secured End Mortgage, Real Estate Mortgage
for Subsidiary, and Secured Term Loan to subsidiary
were filed as Exhibit 10(a)(1) to a Registration
Statement on Form S-1 (No. 33-74866) and the same is
incorporated herein by reference.
10(a)(2) A Loan Agreement between Registrant and Michigan
Strategic Fund dated May 1, 1989 was filed as
Exhibit 10(a)(2) to a Registration Statement on
Form S-1 (No. 33-74866) and the same is incorporated
herein by reference.
10(a)(3) A Loan Agreement between Registrant and Michigan
Strategic Fund dated September 1, 1990 was filed as
Exhibit 10(a)(3) to a Registration Statement on
Form S-1 (No. 33-74866) and the same is incorporated
herein by reference.
10(a)(4) A Bond Purchase Agreement among Registrant, Michigan
Strategic Fund and Roney & Company, dated September 24,
1990 was filed as Exhibit 10(a)(4) to a Registration
Statement on Form S-1 (No. 33-74866) and the same is
incorporated herein by reference.
10(a)(5) A Reimbursement Agreement between Registrant and First
of America Bank - Michigan, N.A. dated November 1, 1992
backing the 1989 Michigan Strategic Fund Limited Obligation
Revenue Bonds was filed as Exhibit 10(a)(5) to a
Registration Statement on Form S-1 (No. 33-74866) and
the same is incorporated herein by reference.
10(a)(6) A Reimbursement Agreement between Registrant and First
of American Bank - Michigan, N.A. dated November 1, 1992
backing the 1990 Michigan Strategic Fund Limited
Obligation Revenue Bonds was filed as Exhibit 10(a)(6)
to a Registration Statement on Form S-1 (No. 33-74866)
and the same is incorporated herein by reference.
10(b) A Loan Guarantee Agreement and related Security
Agreement between Subsidiary and First of America
Bank - Michigan, N.A. dated November 1, 1992 was filed
as Exhibit 10(b) to a Registration Statement on Form S-1
(No. 33-74866) and the same is incorporated herein by
reference.
10(c) A Lease between Registrant and Gemini Development
Company regarding Registrant's Schoolcraft, Michigan,
facility for the A-Tech Molds Division was filed as
Exhibit 10(c) to a Registration Statement on Form S-1
(No. 33-74866) and the same is incorporated herein by
reference.
<PAGE>
*10(d)(1) The Triple S Plastics, Inc. Employee Stock Option
Plan was filed as Exhibit 10(d)(1) to a Registration
Statement on Form S-1 (No. 33-74866) and the same
is incorporated herein by reference.
*10(d)(2) A Form of Nonqualified Stock Option Agreement was
filed as Exhibit 10(d)(2) to a Registration Statement
on Form S-1 (No. 33-74866) and the same is incorporated
herein by reference.
*10(d)(3) A Form of Qualified Stock Option Agreement was filed
as Exhibit 10(d)(3) to a Registration Statement on
Form S-1 (No. 33-74866) and the same is incorporated
herein by reference.
*10(d)(4) An Outside Directors Stock Option Plan dated
July 25, 1996 was filed as Exhibit 99 to a
Registration Statement on Form S-8 (No. 333-20365)
and the same is incorporated herein by reference.
10(e) A Form of Indemnity Agreement between Registrant and
each of its directors was filed as Exhibit 10(e) to
Registration Statement on Form S-1 (No. 33-74866) and
the same is incorporated by reference.
10(f) Lease between Triple S Plastics, Inc. And Westinghouse
Road Joint Venture regarding the manufacturing and
office building for the Georgetown, Texas manufacturing
facility.
11 Statement regarding computation of earnings per share 27
23 Consent of Experts and Counsel 28
27 Financial Data Schedule 29
*Indicates a compensatory arrangement
<PAGE>
EXHIBIT 11
TRIPLE S PLASTICS, INC.
(In thousands, except per share amounts)
Year ended March 31
1997 1996 1995
Net earnings $ 1,329 $ 1,038 $ 3,426
Weighted average number of
shares outstanding 3,734 3,727 3,724
Earnings per share (net earnings
divided by weighted average
number of shares) $ .36 $ .28 $ .92
Note: Shares subject to option are not included in the earnings per share
computation because the effect is not dilutive.
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Triple S Plastics, Inc.
Vicksburg, Michigan
We hereby consent to the incorporation by reference in the Company's
Registration Statements (No. 33-83214, No. 33-83212 and No. 333-20365) of our
report dated April 28, 1997, relating to the financial statements of Triple S
Plastics, Inc. for each of the three years in the period ended March 31, 1997.
BDO Seidman, LLP
Kalamazoo, Michigan
Date: April 28, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from SEC Form
10-K and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000918642
<NAME> TRIPLE S PLASTICS, INC.
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 2681000
<SECURITIES> 0
<RECEIVABLES> 11402000
<ALLOWANCES> 255000
<INVENTORY> 4833000
<CURRENT-ASSETS> 18990000
<PP&E> 35303000
<DEPRECIATION> 10716000
<TOTAL-ASSETS> 48323000
<CURRENT-LIABILITIES> 8854000
<BONDS> 7251000
0
0
<COMMON> 14413000
<OTHER-SE> 15940000
<TOTAL-LIABILITY-AND-EQUITY> 48323000
<SALES> 64608000
<TOTAL-REVENUES> 64608000
<CGS> 54144000
<TOTAL-COSTS> 54144000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 30000
<INTEREST-EXPENSE> 594000
<INCOME-PRETAX> 2089000
<INCOME-TAX> 760000
<INCOME-CONTINUING> 1329000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1329000
<EPS-PRIMARY> .36
<EPS-DILUTED> .36
</TABLE>
