FORM 10-K
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 (FEE REQUIRED)
For the fiscal year ended June 30, 1995
OR
[ ] 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 number 1-8277
ACME ELECTRIC CORPORATION
(Exact name of registrant as specified in its charter)
STATE OF NEW YORK 16-0324980
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
400 QUAKER ROAD, EAST AURORA, NEW YORK 14052
(Address of principal corporate offices) (Zip Code)
716/655-3800
(Telephone Number)
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
Common Stock - Par Value $1.00 per share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
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 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. [ ]
State the aggregate market value of the voting stock held by non-affiliates of
the registrant as of September 12, 1995.
Common Stock, Par Value $1 Per Share, $54,105,166
Indicate the number of shares outstanding of each of the registrant's classes
of common stock as of September 12, 1995.
Common Stock, Par Value $1 Per Share, 5,003,946 shares
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to Shareholders for the fiscal year
ended June 30, 1995, are incorporated by reference into Parts I and II.
Portions of the Registrant's definitive proxy statement for the annual meeting
of shareholders to be held on October 27, 1995, are incorporated by reference
into Part III.
PART I
ITEM 1 - BUSINESS
BUSINESS
The Registrant was duly organized and incorporated under the laws of the
State of New York on April 26, 1946. Its sole line of business is the design
and manufacture of power conversion equipment for electronic and electrical
systems. Principal markets encompass the computer, office copier, information
systems, military, aerospace and communications industries and a variety of
industrial, commercial and residential fields for applications that require
conversion of electrical energy from one useable state to another. Products
are distributed to customers through the Registrant's sales force, independent
sales representatives and wholesale distributors. The business of the
Registrant is not seasonal in nature.
COMPETITION
Competitive conditions within the power conversion industry are intense.
The Registrant competes with many other companies, some of which have far
greater resources than the Registrant. The principal methods of competition
within the industry are price, service and product performance. To meet this
competition, the Registrant attempts to maintain high standards of engineering,
manufacturing and customer service. Due to the number and variety of
competitors, reliable data relative to the Registrant's competitive position
within the power conversion industry would be difficult to develop and is not
known nor believed to exist.
CUSTOMERS
Two customers of the Company accounted for 13.4% and 10.6% of fiscal 1995
sales, respectively, one of which also accounted for 10.6% of June 30, 1995,
accounts receivable. In comparison, there was one customer of the Company that
accounted for 10.0% of fiscal 1994 sales and no customers were above the 10%
threshold in 1993.
BACKLOG
The backlog of orders believed to be firm totaled approximately
$20,954,498 at June 30, 1995, compared with approximately $16,697,000 at June
30, 1994. The change in backlog as of June 30, 1995, compared with the backlog
as of June 30, 1994, reflects increased order volume from a major OEM customer
at the Electronics Division, combined with several significant development
contracts received at the Aerospace Division. Backlog orders at June 30, 1995,
are generally expected to be filled during the current fiscal year.
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RAW MATERIALS
The Registrant purchases materials in a semi-finished state from other
manufacturers and distributors. Availability of materials is considered
adequate to maintain current production levels.
PATENTS
The Registrant holds several technical patents and trademarks and is a
party to certain patent applications. The extent of the effect of such patents
and trademarks is, however, in the opinion of management, not material at this
time.
LICENSES
The Registrant is a party to several license agreements. The only
material license, providing for the sale and manufacture of a proprietary fiber
nickel cadmium battery (FNC), is an agreement with Daug-Hoppecke Gesellschaft
Fur Batteriesysteme mbH ("DAHO") of Brilon, Germany. The Company recorded an
impairment loss write-off as of June 30, 1994, assigning zero value to the FNC
license agreement. For further discussion, see attached referenced portions of
the Registrant's Annual Report to Shareholders.
EMPLOYEES
As of June 30, 1995, approximately 821 persons were employed by the Regis-
trant.
RESEARCH AND DEVELOPMENT
Approximately 6% of the Registrant's employees are engaged in engineering
design and product development. Most new products are designed to satisfy
specific customer requirements, and the cost of such development is expensed as
incurred. Since satisfaction of many customers' needs requires advancing
applicable technology, applied research is an integral part of engineering-
design and product-development activities. The cost of such activities during
the fiscal years ended June 30, 1995, 1994 and 1993, was $4,791,000, $5,666,000
and $5,757,000, respectively.
ENVIRONMENTAL MATTERS
The Company was informed by the New York State Department of Environmental
Conservation (DEC) on December 5, 1994, that the Municipal Waste Landfill,
Cuba, NY, has been listed in the New York State Registry of Inactive Hazardous
Waste Disposal Sites as a Class "2" site requiring remediation. Acme Electric
Corporation has been determined by the DEC to be a potentially responsible
party (PRP) by virtue of its disposal of wastes at the site. As a PRP, the
Company may be subject to liability for the cost of site investigation and
remediation. At this time, there is insufficient information available from
which any reasonable estimate of such cost can be made. The Company did have
insurance policies in effect during the period that waste was disposed of at
the site, which the Company believes would provide coverage in the event the
Company is liable.
ITEM 2 - PROPERTIES
The Registrant owns one plant located in Lumberton, North Carolina. The
Registrant concluded the sale of its Cuba, New York, facility in September 1993
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and the sale of its Salt Lake City, Utah, facility in February 1994. The
Registrant, under an operating lease agreement, leases back portions of the
Cuba, New York, facility. The Registrant has completed the construction of a
new 91,000-square-foot facility in Cuba, New York, and moved into it during
fiscal 1995. The Registrant also maintains operating leases for its Corporate
facility in East Aurora, New York, and its plant located in Tempe, Arizona.
The Registrant also owns an idle facility in West Jordan, Utah, vacated in
conjunction with the restructuring of its Utah activities into the Tempe,
Arizona, location. The Registrant believes that these facilities provide
adequate capacity for its current operations.
SQUARE FOOTAGE SQUARE FOOTAGE LEASE EX-
LOCATION OWNED LEASED PIRATION DATE
Cuba, NY (New Plant) - 91,000 April 2017
Cuba, NY (Old Plant) - 68,757 August 1996
East Aurora, NY - 10,000 April 1999
(Exec. Offices)
Lumberton, NC 128,170 - N/A
Tempe, AZ - 40,260 March 2000
West Jordan, UT 23,242 - N/A
ITEM 3 - LEGAL PROCEEDINGS
The Registrant is involved in ordinary routine litigation incidental to
its business, but none is expected to have a material impact upon the financial
condition of the Registrant.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted during the fourth quarter of the fiscal year
covered by this report to a vote of security holders through the solicitation
of proxies or otherwise.
PART II
ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER
MATTERS
Information relating to the market and market prices of the Registrant's
common stock, the approximate number of Registrant's shareholders and its
dividend history for the past two fiscal years appears on page 32 of the
Registrant's Annual Report to Shareholders for the fiscal year ended June 30,
1995, submitted herewith as an exhibit and such information is incorporated by
reference herein.
Information relating to long-term debt for the past two fiscal years
appears on page 27 of the Registrant's Annual Report to Shareholders for the
fiscal year ended June 30, 1995, submitted herewith as an exhibit and such
information is incorporated by reference. The Registrant suspended its
quarterly cash dividend effective the third quarter of fiscal 1991. The loss
in fiscal 1991 resulted in a deficit of retained earnings. The Registrant,
therefore, does not expect to reinstate dividends in the foreseeable future.
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ITEM 6 - SELECTED FINANCIAL DATA
A five-year summary of certain financial information relating to the
financial condition and results of operations of the Registrant appears on page
21 of the Registrant's Annual Report to Shareholders for the fiscal year ended
June 30, 1995, submitted herewith as an exhibit and such summary is
incorporated by reference herein.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management's discussion and analysis of financial condition and results of
operations appears on pages 18 and 20 of the Registrant's Annual Report to
Shareholders for the fiscal year ended June 30, 1995, submitted herewith as an
exhibit and such management's discussion and anaylsis is incorporated by
reference herein.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements of the Registrant and its
subsidiaries, appearing on pages 22 through 31 of the Registrant's Annual
Report to Shareholders for the fiscal year ended June 30, 1995, submitted
herewith as an exhibit, are incorporated by reference herein:
Consolidated Statements of Operations - Years Ended June 30, 1995, 1994,
1993
Consolidated Balance Sheets - June 30, 1995 and 1994
Consolidated Statements of Cash Flows - Years Ended June 30, 1995, 1994,
1993
Consolidated Statements of Shareholders' Equity - Years Ended June 30,
1995, 1994, 1993
Notes to Consolidated Financial Statements
ITEM 9 - DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
There have been no disagreements with accountants on accounting and
financial disclosure matters.
PART III
ITEM 10 - DIRECTORS AND OFFICERS OF THE REGISTRANT
IDENTIFICATION OF DIRECTORS
Information on directors of the Registrant is contained under the caption
"Election of Directors," presented in the Registrant's Definitive Proxy
Statement filed pursuant to Regulation 14A and used in conjunction with the
Registrant's 1995 Annual Meeting of Shareholders to be held on October 27,
1995, and is incorporated by reference herein.
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IDENTIFICATION OF EXECUTIVE OFFICERS
SUMMARY OF BUSINESS EXPERIENCE
NAME, AGE AND POSITION OVER THE LAST FIVE YEARS
Robert J. McKenna, 47, Chairman, Prior to assuming the position currently
President and Chief Executive Officer held in October 1994, served as
President and Chief Executive Officer
since October 1993. Prior thereto,
served as President and Chief Operating
officer since September 1992. Prior
thereto, served as Group Vice President
of the Diversified Products Group,
Aeroquip Corporation since April 1990.
Prior thereto, Vice President and
General Manager of the Automotive
Connectors Division of Aeroquip
Corporation since July 1989.
Daniel K. Corwin, 48, Prior to assuming the position currently
Senior Vice President held in August 1994, served as Vice
and Chief Financial Officer President of Administration and Chief
Financial Officer since February 1992.
Prior thereto, served as Vice President
and General Manager, Electronics
Division, since November 1990. Prior
thereto, served as Vice President of
Operations since July 1988.
David G. Anderson, 43, Prior to assuming the position currently
Corporate Secretary, Treasurer, held in February 1992, served as
and General Counsel Corporate Secretary, Treasurer,
Controller and General Counsel since
April 1988.
Donald J. Chesner, 51, Prior to assuming the position currently
Vice President and General held in May 1993, served as General
Manager, Acme Transformer Division Manager since February 1992. Prior
thereto, served as National Sales
Manager, Acme Transformer Division,
since March 1987.
John E. Gleason, 48, Prior to assuming the position currently
Vice President and General held in May 1993, served as General
Manager, Electronics Division Manager since February 1992. Prior
thereto, served as Operations Manager,
Cuba Electronics Division, since October
1991, and prior thereto, served as
Operations Manager, Salt Lake City
Electronics Division, since January
1987.
Menahem Anderman, 42, Prior to assuming the position currently
Vice President and General held in April 1994, served as Venture
Manager, Advanced Energy Systems Director since May 1993. Prior thereto,
served as Technical Director since May
1988.
ITEM 11 - MANAGEMENT REMUNERATION AND TRANSACTIONS
Information called for in response to this item is contained under the
captions "Compensation of Executive Officers," "Employment Agreement," "1981
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Incentive Stock Option Plan," "1989 Stock Option Plan," and "Pension Plan,"
presented in the Registrant's definitive proxy statement filed pursuant to
Regulation 14A and used in conjunction with the Registrant's 1995 Annual
Meeting of Shareholders to be held on October 27, 1995, and is incorporated by
reference herein.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information relating to security ownership of certain beneficial owners
and management is contained under the captions "Voting Securities and Principal
Holders Thereof" and "Nominees For Election As Directors" in the Registrant's
definitive proxy statement filed pursuant to Regulation 14A and used in
conjunction with the Registrant's 1995 Annual Meeting of Shareholders to be
held on October 27, 1995, and is incorporated by reference herein.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain transactions have been referenced under Item 11. There are no
other applicable relationships or related transactions.
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. FINANCIAL STATEMENTS
See the accompanying Index to Financial Statements and Financial
Statement Schedules on page F-1 of this report.
2. FINANCIAL STATEMENT SCHEDULES
See the accompanying Index to Financial Statements and Financial
Statement Schedules on page F-1 of this report.
3. EXHIBITS PAGE NUMBER OR INCORPORATION
-------- BY REFERENCE
----------------------------
3a Certificate of Incorporation, Exhibit (3a) to Report on
as amended to date Form 10-K for fiscal year
ended June 30, 1989.
3b Bylaws, as amended to date Exhibit (3b) to Report on
Form 10-K for fiscal year
ended June 30, 1990.
10 Employment Agreements See Exhibit 10 attached.
11 Statement re. computation of Note (1e) to Consolidated
per share earnings Financial Statements at
page 26 of 1995 Annual
Report to Shareholders.
13 Acme Electric Corporation 1995
Annual Report to Shareholders See Exhibit 13 attached.
21 Subsidiaries of Registrant See Exhibit 21 attached.
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22 1995 Proxy Statement Definitive Proxy Statement filed
under Schedule 14A, September
18, 1995, File No. 001-08277.
23 a,b, Additional Exhibits - Pages F-4 through F-7 on
c,d Undertakings Report on Form 10-K for fiscal
year ended June 30, 1995.
99 Additional Exhibits -
News Release, April 28
1995, announcing
third quarter results. See Exhibit 99-1 attached.
News Release, May 17,
1995, announcing Robert D.
Batting being named to
the board of directors. See Exhibit 99-2 attached.
News Release, May 17,
1995, announcing Randall L.
Clark being named to
the board of directors. See Exhibit 99-3 attached.
News Release, May 26, 1995,
announcing response to
recent stock activity. See Exhibit 99-4 attached.
News Release, June 13, 1995,
announcing response to
recent stock activity. See Exhibit 99-5 attached.
News Release, June 27, 1995,
announcing response to
recent stock activity. See Exhibit 99-6 attached.
News Release, July 12, 1995,
announcing an agreement with
B.A.T. International. See Exhibit 99-7 attached.
News Release, July 20, 1995,
announcing response to news
report about the Company. See Exhibit 99-8 attached.
News Release, August 14, 1995,
announcing fourth quarter
and year-end results. See Exhibit 99-9 attached.
(b) REPORTS ON FORM 8-K
There were no reports filed on Form 8-K
during the fifty-two-week period ending
June 30, 1995.
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SIGNATURES
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.
SIGNATURE AND TITLE DATE
/s/ 09/28/95
Robert D. Batting, Director
/s/ 09/28/95
Robert T. Brady, Director
/s/ 09/28/95
Randall L. Clark, Director
____________________________________ 09/28/95
W. Bennett Conner, Director
/s/ 09/28/95
G. Wayne Hawk, Director
/s/ 09/28/95
Terry M. Manon, Director
/s/ 09/28/95
Robert J. McKenna, Director
/s/ 09/28/95
James W. McLaughlin, Director
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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.
ACME ELECTRIC CORPORATION
By: /s/ Date: 09/28/95
Robert J. McKenna
Chairman, President and
Chief Executive Officer
By: /s/ Date: 09/28/95
Daniel K. Corwin
Senior Vice President
and Chief Financial Officer
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ACME ELECTRIC CORPORATION
INDEX TO FINANCIAL STATEMENTS
The financial statements together with the report thereon of Price
Waterhouse LLP dated August 10, 1995, appearing on pages 22 through 31 of the
accompanying 1995 Annual Report to Shareholders, are incorporated by reference
in this Form 10-K Annual Report. With the exception of the aforementioned
information and the information incorporated in Items 5, 6, 7, 8 and 14 of this
Form 10-K, the 1995 Annual Report to Shareholders is not to be deemed filed as
part of this report. The following financial statement schedules should be
read in conjunction with the financial statements in such 1995 Annual Report to
Shareholders. Financial statement schedules not included in this Form 10-K
Annual Report have been omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.
FINANCIAL STATEMENT SCHEDULES
1995 1994 AND 1993
PAGE
Report of independent accountants F-2
Valuation and qualifying accounts and F-3
reserves (Schedule VIII)
Consents of independent accountants F-4, F-5
F-6 and F-7
F-1
REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors of
Acme Electric Corporation
Our audits of the consolidated financial statements referred to in our report
dated August 10, 1995 appearing on page 31 of the 1995 Annual Report to
Shareholders of Acme Electric Corporation (which report and consolidated
financial statements are incorporated by reference in this Annual Report on
Form 10-K) also included an audit of the Financial Statement Schedule listed in
the Index to Financial Statements and Financial Statement Schedules which
appears on page F-1 of this Form 10-K. In our opinion, this Financial
Statement Schedule presents fairly, in all material respects, the information
set forth therein when read in conjunction with the related consolidated
financial statements.
/s/
PRICE WATERHOUSE LLP
Buffalo, New York
August 10, 1995
F-2
ACME ELECTRIC CORPORATION
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(000's Omitted)
ADDITIONS ADDITIONS
BALANCE AT (DEDUCTIONS) (DEDUCTIONS) DEDUCTIONS BALANCE
BEGINNING COST AND OTHER FROM AT END
OF YEAR EXPENSE ACCOUNTS RESERVES OF YEAR
---------- ---------- ---------- ---------- -------
FISCAL YEAR ENDED JUNE 30, 1995
Reserve deducted from assets:
Allowance for doubtful accounts $ 169 $ 331 $ - $ 49 $ 451
Inventory obsolescence and
impairment reserve $ 709 $ - $ - $143 $ 566
Valuation allowance provided on
deferred tax asset (SFAS 109) $ - $ - $ - $ - $ -
Restructuring Cost Reserves $1,292 $ - $ - $893 $ 399
FISCAL YEAR ENDED JUNE 30, 1994
Reserve deducted from assets:
Allowance for doubtful accounts $207 $ 301 $ - $339 $ 169
Inventory obsolescence and
impairment reserve $359 $ 350 $ - $ - $ 709
Valuation allowance provided on
deferred tax asset (SFAS 109) $147 $ - $ - $147 $ -
Restructuring Cost Reserves $ - $1,515 $ - $223 $1,292
FISCAL YEAR ENDED JUNE 30, 1993
Reserve deducted from assets:
Allowance for doubtful accounts $ 80 $ 143 $ - $ 16 $ 207
Inventory obsolescence and
impairment reserve $252 $ 107 $ - $ - $ 359
Valuation allowance provided on
deferred tax asset (SFAS 109) $ - $ 173 $ - $ 26 $ 147
F-3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 2-45985) of Acme Electric Corporation of our report
dated August 10, 1995 appearing on page 31 of the 1995 Annual Report to
Shareholders which is incorporated in this Annual Report on Form 10-K. We also
consent to the incorporation by reference of our report on the Financial
Statement Schedule, which appears on page F-2 of this Form 10-K.
/s/
PRICE WATERHOUSE LLP
Buffalo, New York
September 28, 1995
F-4
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 2-92825) of Acme Electric Corporation of our report
dated August 10, 1995 appearing on page 31 of the 1995 Annual Report to
Shareholders which is incorporated in this Annual Report on Form 10-K. We also
consent to the incorporation by reference of our report on the Financial
Statement Schedule, which appears on page F-2 of this Form 10-K.
/s/
PRICE WATERHOUSE LLP
Buffalo, New York
September 28, 1995
F-5
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 2-89587) of Acme Electric Corporation of our report
dated August 10, 1995 appearing on page 31 of the 1995 Annual Report to
Shareholders which is incorporated in this Annual Report on Form 10-K. We also
consent to the incorporation by reference of our report on the Financial
Statement Schedule, which appears on page F-2 of this Form 10-K.
/s/
PRICE WATERHOUSE LLP
Buffalo, New York
September 28, 1995
F-6
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-79488) of Acme Electric Corporation of our report
dated August 10, 1995 appearing on page 31 of the 1995 Annual Report to
Shareholders which is incorporated in this Annual Report on Form 10-K. We also
consent to the incorporation by reference of our report on the Financial
Statement Schedule, which appears on page F-2 of this Form 10-K.
/s/
PRICE WATERHOUSE LLP
Buffalo, New York
September 28, 1995
F-7