[TYPE] EX-13
Crompton & Knowles Corporation Exhibit 13
1994
Annual
Report
Service
Technology
Performance
Crompton & Knowles Corporation
Crompton & Knowles is a worldwide producer and marketer
of specialty chemicals and equipment. The company's
49 million shares of common stock outstanding are traded
on the New York Stock Exchange under the symbol CNK.
Dividends on the stock have been paid for 248 consecutive
quarters and have increased in each of the last 18 years.
Crompton & Knowles has gained leadership positions in its
chosen markets by providing quality products, technical
service and performance know-how to solve problems and add
value to customers' products. The company's businesses
are grouped into two segments:
Specialty Chemicals
Crompton & Knowles is a major producer and marketer of dyes
worldwide and a major producer and marketer of specialty food
and pharmaceutical ingredients in North America.
Specialty Process Equipment and Controls
The company is a recognized world leader in extrusion systems,
industrial blow molding equipment and related electronic controls
for the plastics industry.
(pie charts)
Sales
By Business Segment
Specialty Chemicals - $393.6
Specialty Process Equipment and Controls - $196.2
Operating Profit
By Business Segment
Specialty Chemicals - $60.8
Specialty Process Equipment and Controls - $31.2
Crompton & Knowles is a member of the Chemical Manufacturers
Association and a signatory of the Associaton's Responsible
Care@ Program. The company is committed to a continuous good
faith effort to improve performance in health, saftey and
enviromental quality.
Financial Highlights
(In thousands of dollars, except per share data) 1994 1993 % Change
[S] [C] [C] [C]
Net sales $ 589,757 $ 558,348 6
Earnings before income taxes $ 79,969 $82,473 (3)
Income taxes 29,053 30,515 (5)
Net earnings $ 50,916 $51,958 (2)
Per common share:
Net earnings $ 1.00 $ 1.00 -
Dividends $ .46 $ .38 21
Book value *$ 4.60 $ 4.68 (2)
Return on average common equity 21.1% 23.1%
Common stock trading range:
High 24 1/8 27 1/4
Low 13 7/8 17 5/8
Average shares outstanding (in thousands) 51,152 52,176
Shareholders of record 4,800 4,000
Sales
Continuing Operations
(in millions of dollars)
(bar graph referencing Eleven Year Selected Financial Data)
Earnings Per Share
Continuing Operations
(bar graph referencing Eleven Year Selected Financial Data)
Return on Average
Common Equity
Continuing Operations
(bar graph referencing Eleven Year Selected Financial Data)
Fellow Shareholders:
The Year In Highlights
- -Sales increased 6% to $589.8 million
- -Maintained earnings per share at prior-year record level of $1.00
with net earnings of $50.9 million
- -21.1% return on average common equity
- -Dividend increased 18th consecutive year, up 20% to 48 cents
annualized
- -Acquired Egan Machinery, McNeil & NRM, Inc. and Repiquet extrusion
businesses, broadening product and geographical base of specialty
equipment business
- -Repurchased 3.0 million shares of common stock
Our company's 1994 sales increased to record levels while earnings
per share remained at the record levels of the prior year. Return
on average common equity was 21.1 percent.
It was a year of continued progress for Crompton & Knowles despite
the fact that results did not meet our expectations. The economy,
while generally robust in 1994, had several weak spots, one of
which was apparel. That weakness negatively impacted the domestic
dyes business despite gains in most non-apparel segments. We had
considerable success in continuing to grow our specialty equipment
business, both in North America and internationally, and in
positioning the corporation for continued long-term growth.
In 1994, sales increased six percent from the prior year to $589.8
million. Earnings per common share remained unchanged at $1.00 per
share, while net earnings declined two percent to $50.9 million.
When assessed in light of the market environment in which these
results were achieved, we can state with confidence that Crompton
& Knowles did not lose focus on delivering superior service,
technology and performance to our customers. In fact, we used the
past year to reinforce our business philosophy of understanding our
customers' businesses and working with them to solve their
problems. As a result, we look forward to the future with
enthusiasm.
Specialty chemical segment sales of $393.6 million were three
percent below the prior year's record level. Operating profit
declined 11 percent to $60.8 million. The lower sales and operating
profit were due primarily to weak demand for apparel dyes. Our
increased sales of dyes to the carpet sector and for automotive
textiles, paper and leather, were unable to overcome the persistent
weakness of the apparel market. To reinforce our niche-driven
strategy in the dyes business, we realigned our sales organization
to target key market segments. We also expanded our computer
systems capabilities and streamlined operations to respond more
quickly and accurately to the needs of our customers.
Overseas, our base European dyes business increased. However, these
gains were more than offset by the impact of lower demand under a
long-term supply agreement with another company. The international
dyes business was restructured to position us to reach our
objectives and to realize the potential in Asia, our fastest
growing market. Nicholas Fern, Ph.D., formerly responsible for our
European dyes operations, has been assigned to lead this growth
program. In addition, Gerald H.Fickenscher, Ph.D., has been
assigned responsibility for our dyes business in Europe, Africa,
the Middle East and Latin America with the objective of expanding
our business in those regions.
Specialty ingredients sales grew by more than five percent during
1994, gaining increased momentum in the second half of the year. As
the year ended, we began shipping commercial quantities of a
proprietary no-fat, low water activity, heat stable filling
ingredient, initially targeted to the bakery and snack industries.
This and other new product developments, such as savory flavor
specialties for convenience foods, dairy flavors, and sauteed
vegetable flavors, demonstrate our technical capability of
producing fully integrated ingredient systems for the food
industry, which is our primary thrust in this business.
We strengthened our marketing focus on selected food industry
segments by adding specialists with the technical and marketing
experience needed to capitalize on our technology and our growing
pipeline of high quality products. Significant efforts are also
underway to consolidate manufacturing facilities and reduce costs,
thereby improving productivity and efficiencies within the
ingredients operations.
Our specialty process equipment and controls segment had another
excellent year. Sales increased 30 percent to $196.2 million and
operating profit grew 20 percent to $31.2 million with strong
demand for plastics extrusion systems and industrial blow molding
equipment. We identified new growth opportunities and took action
to deliver on them. The acquisition of Egan Machinery in May 1994
broadens our business base into market segments where Egan has
established leadership positions - consistent with the position we
enjoy with our existing extrusion business. At mid-year we acquired
the business of McNeil & NRM, Inc., a small North American-based
supplier of extruder parts and aftermarket services to the plastics
extrusion equipment market. After the close of the year, in January
1995, we also acquired the extrusion business of McNeil Akron
Repiquet S.a.r.l. in France, giving us our first European
production facility for extrusion systems, which fulfills a
long-standing strategic objective of establishing a manufacturing
platform in Europe to better enable us to continue growing our
business there.
Over the years we have been consistent in our focus on managing the
corporation for the long term while delivering short-term results.
While 1994 was an interruption in our record of year-to-year
earnings gains, and was personally disappointing, I can confidently
say that Crompton & Knowles is stronger and more vibrant than ever,
with a customer focus geared to our mutual success. Throughout the
year, as always, our efforts have been aimed at a closer
understanding of our customers' needs, accelerating our product
development efforts, enhancing our customer service capabilities
and reducing our costs through increased productivity and improved
operating efficiencies.
There are several changes on our Board of Directors that I wish to
note. We welcome the addition of Patricia K. Woolf, Ph. D., a
private investor and lecturer in the Department of Molecular
Biology at Princeton University. Dr. Woolf brings broad business and
technical expertise to our Board. Retired from the Board since our
last annual report are Harry W. Buchanan and Howard B. Wentz, Jr.
They both have been valued participants in the growth of Crompton
& Knowles over the years and we thank them for their service. Their
considerable knowledge and wise counsel will be missed.
For the eighteenth consecutive year, we increased the dividend paid
to shareholders and in 1994 the increase was 20 percent to 48 cents
per share annualized.
In the final analysis, our fundamental objectives have not changed.
We remain committed to managing the corporation for the enhancement
of shareholder value. We have accomplished a great deal this year
to assure above-average growth for the future. Our confidence is
supported by the continuing commitment of our employees to deliver
superior service, technology and performance to our customers.
The challenges we've met and the many opportunities before us make
for a powerful combination. We thank you for your continued support
and look forward to 1995. We will keep you informed of our
progress.
Respectfully yours,
Vincent A. Calarco
Chairman, President, and
Chief Executive Officer
March 2, 1995
Specialty Chemicals
Segment Highlights
- -Segment sales of $393.6 million
- -Operating profit of $60.8 million
Dyes Highlights
- -Domestic dyes sales off 6% due to weak apparel sales
- -Industrial dyes continued strong growth
- -European dyes sales increase offset by lower demand under supply
agreement
- -Asia dyes sales increased
"Our goal is to ship every order to customer specifications. Sales
is more than pushing products out the door. Sales is flexibility,
trust, problem solving and a commitment to our customers' success.
I constantly remind everyone in our organization that our
customers' demands for quick delivery and more technical service
merely reflect market forces at work all along the production
chain. We have to participate in all of it - understand trends,
forecast needs, produce, deliver and assure our product's
performance on our customer's production line. We'll get our
on-time delivery close to 100 percent, but our ultimate objective
is to raise customer confidence to the level that when they think
dyes, they press auto-dial for Crompton & Knowles."
Jack Humble
vice president - sales
"Customer requirements and expectations keep increasing and our job
is to exceed or, even better, to anticipate those changes.
Centralized order entry is a part of our ongoing program to make
our business seamless with that of our customers. We've grown to
become the largest dyes company in the United States not by
producing the most widely-used products, but by focusing on niche
markets where our products meet specific performance specifications
and can't be effectively marketed without technical service
support. Investing in people, facilities and management tools to
have the right product in the right place at the right time is more
than good business - its the only way to do business."
Louis Lopez
vice president - marketing
Specialty chemical segment sales of $393.6 million in 1994 were
three percent below 1993's record sales of $407.3 million.
Operating profit was $60.8 million, or 11 percent lower than
operating profit of $68.0 million in the prior year.
The primary reasons for the segment's lower sales and operating
profit were slow demand and weaker pricing in certain sectors of
the company's domestic and international dyes operations. Worldwide
dyes sales were off six percent from the prior year to $296.8
million.
In the United States, significant consumer spending on housing and
durable goods such as automobiles, appliances and electronics
resulted in delayed purchases of apparel during 1994. The weak
apparel sales in turn reduced demand for textile dyes, resulting in
some price competition in certain products. Most affected were
reactive and direct dyes for cotton.
In addition to lower spending by consumers on apparel and
non-durables during 1994, industry analysts cite other temporary
factors which have affected the apparel dyes industry. These
included a consumer preference, during the Spring 1994 season, for
lighter colored garments, which use significantly less volume of
dyes than do darker or brighter-colored textiles and the lack of a
strong fashion trend which would attract the interest of consumers,
especially women, to update their wardrobes. History has shown that
fashion trends are difficult to predict, but the industry's
penchant for change has been well documented. Crompton & Knowles
expects these changes to create new opportunities for growth.
Throughout this period Crompton & Knowles undertook more aggressive
sales and marketing efforts in niche markets where it holds
leadership positions. By stressing its value-added product
performance, technical service and problem-solving capabilities,
the company was able to increase sales of dyes used in home
furnishings, carpeting and automotive textiles. Some apparel
sectors, such as nylon athletic wear, swimwear and wool apparel,
where the company offers specialized dyes products, achieved
increased sales.
Another area of strength for the company's domestic dyes business
was the eight percent increase in dyes for industrial applications
such as paper, leather and plastics. Crompton & Knowles is the only
industry supplier offering a complete range of both liquid and
powder dyes to this marketplace. In 1994 it broadened its product
range with new blue, orange and yellow dyes meeting specific
customer needs.
To reinforce its major position in the carpet industry, the company
introduced new colors with less sensitivity to shade change during
conditioning, resulting in better production efficiencies for
customers. The company offers the broadest range of dyes for carpet
available in powder, liquid and cold water soluble forms.
As the various markets served by the company - apparel, carpet,
home furnishings, industrial and automotive - have become
increasingly responsive to their customer needs, Crompton & Knowles
has responded in turn. To improve product quality, assure quicker
response times and to improve technical service levels, the company
launched a new centralized order entry and material and production
management system. Many customers have already realized the
benefits of the new system, but the full value of the system will
become more apparent in 1995.
Ongoing company programs to improve production efficiencies and
reduce costs during the year included the debottlenecking of its
Gibraltar, Pennsylvania and Newark, New Jersey production
facilities. The company manufactures dyes at five facilities in the
United States.
"Just this last year we witnessed a perfect example of how valuable
a company's history of performance, a broad product line, proven
technical capability and responsive customer service is in the
marketplace. Ossfloor, a European industry leader in printed
carpets, and a long-time user of our dyes, decided to convert to
acid dyes for resist printed carpet production. Naturally, every
major dyes competitor in Europe made a pitch for the business, but
after the trial runs at Ossfloor's facility in Oss, Netherlands,
Crompton & Knowles prevailed. Ossfloor met their objective of
producing more environmentally friendly carpets, and we satisfied
their need. We've also gained additional business and we're now
Ossfloor's largest dyes supplier. But we're more than that - we're
partners."
Kenneth Dunkerley
industry manager - carpet & auto
International dyes sales gains in 1994 from the core business were
offset by reduced sales under a multi-year supply agreement. Sales,
excluding this supply agreement, increased four percent on a local
currency basis. Product rationalization between the company's two
European production facilities, in Belgium and France, reduced
costs and improved output. Named president of the European dyes
operations was Gerald H. Fickenscher, Ph.D., who joined the company
last year.
Sales of dyes increased 17 percent in Asia, where Crompton &
Knowles is a joint venture partner in a production facility in
Bangkok and markets dyes through a sales and warehouse facility in
Hong Kong. To accelerate the growth of the company's business in
the region, Nicholas Fern, Ph.D., was assigned to Hong Kong from
his prior position of president of the European business. His focus
is to expand the company's dyes business in countries such as
Taiwan, Hong Kong, China, Korea, Japan and Indonesia. An expanded
sales team and technical service laboratory will support these
growth plans.
photo captions:
(Right) Computerized formulation of dyes responds to customer needs
for exact color matching. As Tammy Alexander, technician (left),
accesses dyes formulas for a particular color, Chris Dehn, junior
technician, prepares stock solutions of dyes for the automated
dispensing system which responds to the computer's dye recipe
instructions. The customer receives a dyed swatch with a recipe,
or, when time is critical is sent a TELEMATCH within minutes, with
the dyes recipe alone.
(Left) Careful checking of shipping documents ensures accurate and
timely shipments to customers. Cecil Powers, Charlotte warehouse
supervisor, spot checks a rush order as it leaves the loading dock.
(Left) Customer service is the guiding principle for Barbara
Bunker, supervisor - order services (foreground), and Janey
Thompson, senior customer service representative, as they study
inventory availability with new on-line centralized order entry
software in the company's dyes marketing and sales headquarters in
Charlotte, North Carolina. Joy Robinson, customer service
representative, (background) advises a customer of the nearest
shipping location and time as the order is taken.
(Below) Customer needs and industry trends can only be anticipated
by regular contact and close working relationships. T.A. Blackburn,
commercial director (right), and J. Provoost, business group
manager (left), for Crompton & Knowles' dyes business in Europe,
review carpet production with H. Fehr, technical director of
Ossfloor, a leading European producer of printed carpets.
(Above) Close inspection of finished resist printed carpet assures
satisfaction by Ossfloor's customers. Nylanthrene acid dyes made by
Crompton & Knowles produce consistent high quality results,
enabling the company to become Ossfloor's largest dyes supplier.
(Right) New designs and color combinations are developed on
Ossfloor's laboratory carpet printing machine using Crompton &
Knowles' Nylanthrene dyes. In-depth technical knowledge of dyes and
carpet filament chemistry enables Crompton & Knowles to support
Ossfloor's position as a major carpet producer in Europe.
Specialty Chemicals
Specialty Ingredients Highlights
- -Sales of specialty ingredients increased 5%
- -Began commercial shipments of Miracle Middles, a new proprietary
no-fat filling ingredient with low water
activity and heat stability for bakery, cereal, candy and snack
products
- -Upgraded production facilities in Carrollton, Texas and Elyria,
Ohio, eliminating a third facility
- -Reciprocal agreement signed with DMV Pharma of the Netherlands to
market each other's pharmaceuticals
ingredients in North America, Europe and Asia
- -Initiated consolidation of three production facilities at
Vineland, New Jersey
Sales for the company's specialty ingredients operations improved
five percent in 1994, rising to $96.8 million. This increase came
from both the food and pharmaceutical ingredients sectors.
The food ingredients sales gains resulted from the company's
ability to integrate flavors, seasonings, colors and sweeteners
into ingredient systems which respond to the complex needs of major
food producers in North America.
The new food labels prescribed by the Federal government's
Nutritional Labeling and Education Act of 1990 became mandatory in
1994. The Act's standardization of terms such as "lite," "reduced
fat," and "low salt," has hastened the food industry's interest in
suppliers who can help them produce flavorful products which appeal
to the consumer and meet these new industry standards. The clearer
labeling has also placed greater demand on food ingredients
suppliers to produce in-depth technical analysis of the ingredients
they supply, again increasing food companies' dependence on
suppliers with broad state-of-the-art technical expertise in all
aspects of ingredient production and supply.
During the past year Crompton & Knowles developed and introduced
numerous products to meet specific food ingredients needs of
individual food companies. Having recognized some years ago the
potential effect of the new product labeling requirements, as well
as consumers' demand for healthy, good tasting low- or no-fat
products, the company undertook independent development of a food
filling with those characteristics. Late in 1994 the company began
producing and shipping commercial quantities of a new patented
filling product. Called Miracle Middles, it can be used in bakery,
cereal, snack food, candy and other applications. The product is
unique for combining three key attributes - no-fat, low water
activity and heat stability - and demonstrates the company's
capabilities in producing complex multi-functional products that
can include flavors, seasonings and colors.
Problem solving capabilities have also enabled the company to
expand its offerings of savory specialties and reaction flavors for
convenience foods which can be prepared quickly by the consumer,
using traditional ovens or microwaves. These include dairy flavors
such as sour cream and butter, sauteed vegetable flavors and
rotisserie flavors which enable food producers to utilize efficient
high-speed processing while delivering home-style goodness to the
consumer.
Streamlining of food ingredient production facilities resulted in
the modernization of operations at Carrollton, Texas and Elyria,
Ohio and the closing of a facility in City of Industry, California.
Late in the year the company also broke ground for a new
manufacturing plant in Vineland, New Jersey. This facility will
result in the closing of two existing plants and achieve cost
savings in operations transferred from a total of four plants.
Pharmaceutical ingredients operations had a good year in 1994,
increasing sales of excipients, color dispersions and tablet
coating systems in North America. Late in the year a reciprocal
marketing agreement was signed with DMV International Pharma, of
the Netherlands, for Crompton & Knowles to market and sell DMV
International's pharmaceutical grade lactose in North America while
DMV distributes the company's full pharmaceutical product line in
Europe and Asia.
"Integrated food systems is considered our industry's leading edge
technology today, but its been guiding our strategy for years.
Miracle Middles is the direct result of our effort to combine
flavors, seasonings, sweeteners and colors in a single
multifunctional food ingredient system. Our customers get really
excited when they see the possibilities - a no-fat filling which
has low water activity and can be customized to meet their specific
needs. We're doing similar work in our laboratories on other
multifunctional systems and we think this approach will gives us,
and our customers, an extra edge in the marketplace."
Rudy Phillips
vice president - flavored ingredients
photo captions:
(Above) Successful integrated ingredient systems result from a
focused team approach using all disciplines within the
organization. Michael DeLuca, vice president, food systems
(center), is updated on customer-specific requirements for Miracle
Middles, the company's new low-fat filling with low water activity.
Jean Gallagher, technical group leader and senior food technologist
(foreground), works on applications; Tom Damiano is product manager
guiding the market introduction of Miracle Middles (left); and
Kevin Ramsey is food technologist responsible for producing the new
filling in the pilot plant.
(Below) New ingredient systems are regularly subjected to "blind"
sensory evaluation testing and must meet or exceed critical
attributes as identified by consumers in each step of the
development process. Here a panelist tastes a sport beverage with
isotonic properties including Crompton & Knowles' flavors, colors
and other ingredients.
(Right) Whether its sweet flavors for bakery products, cereal or
confections...or meaty savory flavors for convenience foods, snacks
and side dishes, Crompton & Knowles has the ingredient system
technology to satisfy the need. Eileen Simons, manager of
applications technology (foreground), and Susan Vodzik, senior food
technologist, study flavored pasta components of a side dish
product.
Specialty Process Equipment and Controls
Segment Highlights
- -Sales rose 30% to record $196.2 million
- -Operating profit increased 20% to record $31.2 million
- -Egan Machinery and McNeil & NRM, Inc. acquisitions completed,
broadening plastics extrusion business and
aftermarket services
- -Order backlog at $66 million at year-end
- -Strong profile, wire and cable, elastomer and industrial blow
molding growth
- -French extruder business acquired in January 1995
The specialty process equipment and controls segment had an
excellent year as sales increased 30 percent to a record $196.2
million compared with $151 million in the prior year. Operating
profit was $31.2 million, or 20 percent above the $26 million
reported in 1993.
Contributing to the strong growth were profile extrusion systems
for building and automotive markets, wire and cable insulating
lines for telecommunications and automotive, industrial blow
molding systems, plastics recycling extrusion systems and
compounding extruders for the production of engineered plastics.
Medical, elastomer and blown film extrusion systems had improved
performance as well.
Strong demand for wire and cable systems in Latin American and
Asian markets increased international sales, which accounted for 24
percent of the segment's sales during the year.
The business was reinforced and broadened with the May 1994
acquisition of Egan Machinery, a producer of plastics extrusion,
precision coating and cast film equipment. Egan systems are
produced primarily at a facility in Somerville, New Jersey. The
business of McNeil & NRM, Inc., a supplier of extruder parts and
aftermarket services to the plastics extrusion equipment market in
North America, was acquired in June 1994.
In addition, completed in January 1995, was the acquisition of the
extrusion business of McNeil Akron Repiquet S.a.r.l., a French
producer and marketer of plastics and rubber process equipment. The
acquisition includes a facility in Dannemarie, France, giving the
company a local sales, customer service and manufacturing location
from which to increase its participation in the European extrusion
systems market.
As a leading worldwide innovator of extrusion systems for the
plastics and rubber industries, Crompton & Knowles introduced a
broad range of new equipment during the year, including grooved
feed extruders for processing high-density polyethylene pipe,
winders for cast film and plastic film, cold feed extruders for
rubber, precision dies for extruding medical tubing, compact
co-extruded blown film systems, a new system for injecting liquid
color into plastic during the extrusion process and fully
integrated process controls for monitoring and controlling the
complete extrusion process.
To support this new technology introduction program the company
maintains one of the largest technical service staffs in the
industry, offering its customers individual design, engineering and
installation services as well as extensive training seminars for
maintenance and operating personnel. In addition, with a large
worldwide base of installed equipment, maintenance and system
upgrade services continue to be a significant area of growth.
The segment's equipment order backlog at the end of 1994 was $66
million.
"Exports have been an important contributor to our growth over the
years, but we've now reached the point where having a regionally
based manufacturing, sales and service facility is a must.
Extrusion equipment and systems with the Davis-Standard mark are
becoming more recognized and used the world over. The acquisition
of Egan Machinery in 1994, broadened even further our European
customer base. The January 1995 acquisition of the extrusion
operations of Repiquet S.a.r.l. gives us our first regional
off-shore platform in Dannemarie, France. This platform, together
with our sales and service centers in the United Kingdom and Hong
Kong, positions us to accelerate our international sales growth and
can serve as a model for other strategic international locations."
Alfred Bartkiewicz
director - international marketing
photo captions:
(Above right) Egan Davis-Standard has earned a reputation for
dependability and consistency of its extrusion and blown film
systems, but quality control dictates that UCB Transpac employees
inspect each roll of film prior to shipment.
(Below right) Technical service and customer support is a
cornerstone of Davis-Standard's reputation as a leader in the
extrusion and blown film industry. Karol Braun, product manager,
blown film systems (right), based in the United Kingdom, calls on
Josef Verplaetse, general manager of UCB Transpac(center), and
Guido Haudenhuyse, responsible for UCB Transpac's development, to
determine their satisfaction and discuss future needs.
(Left) Growing demand for plastic packaging with specific
properties that can only be achieved with multiple polymer layers,
has resulted in strong sales of the company's Davis-Standard
systems in Europe. An important Egan Davis-Standard customer is UCB
Transpac, which operates this three-layer blown film co-extrusion
system at its facility in Ghent, Belgium.
Financial Contents
Management's Discussion & Analysis
of Financial Condition and Results
of Operations 13
Consolidated Financial Statements 16
Notes To Consolidated Financial Statements 20
Responsibility For Financial Statments 27
Independent Auditors' Report 27
Eleven Year Selected Financial Data 28
Corporate Data 30
Corporate Officers and
Operating Management - Inside Back Cover
Management's Discussion &
Analysis of Financial Condition
and Results of Operations
Financial Condition and Liquidity
Acquisitions
In May 1994, the Company acquired the business and certain assets
of Egan Machinery Division of John Brown Plastics Machinery. In
June 1994, the Company acquired the business and certain assets
of McNeil & NRM, Inc. The cost of these acquisitions were accounted
for based on the purchase method and, accordingly, the results of
operations of these businesses have been included in the
Consolidated Statements of Earnings since their dates of acquisition.
Liquidity and Captial Resources
The December 31, 1994 working capital balance of $121.6 million
decreased $3.4 million from the December 25, 1993 balance of $125
million, while the current ratio declined to 1.9 from 2.3 at the
end of 1993. The decline in the current ratio is primarily
attributable to the increase in notes payable. Days sales in
receivables increased to 54 days in 1994 from 52 days in 1993.
Inventory turnover averaged 2.8 compared to 2.9 in 1993.
Cash flow from operating activities of $21.8 million decreased
$30.6 million for $52.4 million in 1993 primarliy as a result of
increased inventory levels, particularly in the dyes business.
Cash provided by operating activities, cash reserves and increased
borrowings were used to finance acquisitions, fund capital expenditures,
pay cash dividends and repurchase approximately 6% of the Company's
outstanding common shares. Dividends paid in 1994 of $23.3 million
represent a payout ration of 46% of earnings. The Company's debt-
to-capital ratio increased to 29% from 7% at year-end 1993 primarily
due to increased borrowings and share repurchases.
Capital expenditures increased to $21.7 million from $14.3 million
in 1993. Capital expenditures are expected to approximate $20 million
in 1995 primarily for expansion and improvement of operating facilities
in the United States and Europe. The Company's long-term liquidity
needs including such items as capital expenditures and dividends are
expected to be financed through operations. The Company has available
numerous uncommitted short-term lines of credit, and a revolving credit
agreement providing for borrowings up to $70 million through September
1998. At year-end, there were $39.7 million of short-term borrowings
outstanding and $50 million outstanding under the revolving credit
agreement.
Inflation
During the last three years, inflation has not been a significant
factor in the net earnings of the Company. The LIFO method of
accounting is used for a major portion of the Company's inventories.
Under this method, the cost of products sold approximates current
costs and thus reduces possible distortion of reported earnings
due to rising costs. The Company continually emphasizes cost
controls and efficient management of resources to mitigate the
influence of inflation.
International Operations
The lower U.S. dollar exchange rate versus primarily the Belgian
Franc and the French Franc accounted for the favorable adjustment
of $2.4 million in the accumulated translation adjustment account
since year-end 1993. Changes in the balance of this account
are primarily a function of fluctuations in exchange rates and
do not necessarily reflect either enchancement or impairment
of the net asset values or the earnings potential of the Company's
foreign operations.
The Company operates manufacturing facilities in Europe which
serve primarily the European market. Exchange rate disruptions
between the United States and European currencies, and among
European currencies, are not expected to have a material effect
on year-to-year comparisions of the Company's earnings.
Research and Development
The Company employs about 270 engineers, draftsmen, chemists, and
technicians responsible for developing new and improved chemical
products and process equipment systems for the industries served
by the Company. Often, new products are developed in response
to specific customer needs. The Company's process of developing
and commercializing new products and product improvements is ongoing
and involves many products, no one of which is large enough to
significantly impact the Company's results of operations from year
to year. Research and development expenditures totalled $12.1 million,
$11.2 million and $10.1 million in the fiscal years 1994, 1993, and 1992,
respectively.
Management's Discussion &
Analysis of Financial Condition
and Results of Operations
continued
Environmental Matters
The Company's manufacturing facilities are subject to various federal, state
and local requirements with respect to the discharge of materials into
the environment or otherwise relating to the protection of the environment.
Although precise amounts are difficult to define, the Company incurred
approximately $20.7 million in 1994 to comply with those requirements,
including approximately $7.2 million in capital expenditures.
The Company has been designated, along with others, as a potentially
responsible party under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, or comparable state statues,
at two waste disposal sites; and two inactive subsidiaries have been
designated, along with others, as potentially responsible parties
at a total of four other sites.
While the cost of compliance with exisiting environmental requirements
is expected to increase, based on the facts currently known to the
Company, management expects that those costs, including the cost to
the Company of remedial actions will not be material to the results
of the Company's operations in any given year.
Operating Results -
1994 as Compared to 1993
Overview
Consolidated net sales of $589.8 million increased 6% from $558.3 million
in 1993. Net earnings of $50.9 million declined 2% from $52 million in
1993. Earnings per common share of $1.00 were unchanged from the prior
year. Average shares outstanding decreased 1 million to 51.2 million
primarily as a result of the Company's share repurchase program.
The gross margin percentage of 31.5% decreased slightly from 31.8% in
1993. Operating profit of $92 million was 2% lower than 1993 as the
specialty process equipment and controls segment increased 20% while
the specialty chemicals segment decreased 11%.
Specialty Chemicals
The Company's specialty chemicals segment reported sales of $393.6 million
representing a decline of 3% from 1993. The decrease was primarily
attributable to lower selling prices (-2%) and unit volume (-1%). The
proportion of sales outside the United States was 25% in 1994, unchanged
from 1993.
Domestic dyes sales declined 6% reflecting lower selling prices (-4%)
and lower unit volume (-2%) as demand for apparel dyes remained weak.
International dyes sales were 5% lower than 1993 due primarily to lower
unit volume under a long-term supply agreement. Specialty ingredients
sales increased 5% reflecting increased unit volume in all major product
groups.
Operating profit declined 11% to $60.8 million from $68 million in 1993
due primarily to lower pricing and unit volume offset in part by lower
dye intermediate costs. The percentage of operating profit outside
the United States was 21% in 1994, unchanged from 1993.
Specialty Process Equipment and Controls
The Company's specialty process equipment and controls segment reported
sales of $196.2 million representing an increase of 30% from $151 million
in 1993. Approximately 21% was attributable to the acquisition of Egan
Machinery with the balance attributable equally between pricing and unit
volume. Export sales of $48 million increased 18% from 1993 and accounted
for 24% of total segment sales versus 27% in 1993. Operating profit
increased 20% to $31.2 million from $26 million in 1993. Approximately
7% was attributable primarily to unit volume and improved pricing offset
in part by higher manufacturing costs. The equipment order backlog totalled
$66 million at the end of 1994 compared to $38 million at the end of 1993.
Other
Selling general and administrative expenses increased 10% primarily
due to the acquisition of Egan Machinery and the impact of inflation.
Depreciation and amortization increased 10% over 1993 primarily as a result
of the Egan Machinery acquisition and a higher fixed asset base. Interest
expense of $2.2 million was double the amount in 1993 reflecting the increased
level of borrowings in 1994. Other income declined $163 thousand versus 1993.
The Company's effective tax rate of 36.3% was slightly lower than the prior
year level of 37%.
Operating Results -
1993 as Compared to 1992
Overview
Consolidated net sales of $558.3 million increased 8% from $517.7 million
in 1992. Net earnings increased 20% to $52 million compared with 1992
operating earnings of 43.3 million. Operating earnings in 1992 excluded
charges relating to the adoption of two new accounting standards ($5.8
million) and the penalty for early exinguishment of debt ($3 million).
Earnings per common share of $1.00 increased 15% compared with operating
earnings per share of $.87 in 1992. Average shares outstanding increased
2.2 million to 52.2 million primarily as a result of the stock offering in
December 1992.
The gross margin percentage increased to 31.8% from 31.0% in 1992
primarily due to lower raw material costs and improved product mix in the
specialty chemicals segment. Operating profit of $94 million increased $10.6
million, or 13%, from $83.4 million in 1992 due to gains in both business
segments.
Specialty Chemicals
The Company's specialty chemicals segment reported a sales increase of
$12.1 million, or 3%, to $407.3 million from $395.2 million in 1992.
Approximately 3% was attributable to incremental sales from the pre-metallized
dyes acquisition in May 1992, 2% to unit volume growth and minus 2% to foreign
currency translation. The proportion of sales outside the United States
decreased slightly to 25% from 26% in 1992.
Domestic dyes sales improved 5% reflecting higher unit volume in certain key
markets and new product introductions. International dyes sales approximated
the level in 1992 as incremental sales from the pre-metallized dyes acquisition
were offset by foreign currency translation and the recessionary environment
in Europe. Sales of specialty ingredients increased 3% reflecting increased
unit volume product mix.
Operating profit increased $4.7 million, or 7%, to $68 million from $63.4
million in 1992. Approximately 2% was attributable to the pre-metallized
dyes acquisition with the balance of 5% attributable primarily to the unit
volume growth, lower raw materials costs and improved product mix. The
proportion of operating profit outside the United States was 21% versus 23%
in 1992.
Specialty Process Equipment and Controls
Sales of $151 million reported by the Company's specialty process equipment
and controls segment rose $28.5 million, or 23%, from $122.5 million in 1992.
The sales increase was attributable primarily to higher unit volume (21%) and
pricing in the second half of the year (2%). Domestic sales increased 19%
over 1992 while exports, particularly to the Far East, increased 37%.
Export sales accounted for 27% of total segment sales versus 24% in 1992.
Operating profit increased $6 million, or 30%, to $26 million from $20
million in 1992, primarily as a result of higher unit volume and improved
pricing. The equipment order backlog of $38 million at the end of 1993
increased over the prior year-end level of $34 million.
Other
Selling, general and administrative expenses increased 9% primarily due to
the pre-metallized dyes acquisition and the increased level of business.
Depreciation and amortization increased 4% over 1992 primarily as a result
of a higher fixed capital base including the pre-metallized dyes acquisition.
Interest expense of $1.1 million was 84% lower than 1992 primarily as a result
of the long-term debt repayment in December 1992. Other income of $1.2
million was $1.4 million below 1992 primarily due to lower foreign exchange
gains and lower interest income. The Company's effective tax rate 37% was up
slightly from 36.7% in 1992 reflecting primarily the higher U.S. tax
rate in 1993.
Consolidated Statements of Earnings
Fiscal years ended December 31, 1994, December 25, 1993, and
December 26, 1992
(In thousands of dollars, except per share data) 1994 1993 1992
Sales
Net sales $589,757 $558,348 $517,718
Costs and Expenses
Cost of products sold 403,784 380,941 357,089
Selling, general and administrative 91,581 82,970 76,251
Depreciation and amortization 13,298 12,076 11,635
Interest 2,167 1,093 6,984
Other income (1,042) (1,205) (2,578)
Total costs and expenses 509,788 475,875 449,381
Earnings
Earnings before income taxes, cumulative
effect of accounting changes and
extraordinary loss 79,969 82,473 68,337
Income taxes 29,053 30,515 25,072
Earnings before cumulative effect of accounting
changes and extraordinary loss 50,916 51,958 43,265
Cumulative effect of accounting changes - - (5,800)
Extraordinary loss on early extinguishment
of debt - - (3,000)
Net earnings $50,916 $51,958 $34,465
Earnings per common share
Earnings before cumulative effect of accounting
changes and extraordinary loss $ 1.00 $ 1.00 $ .87
Cumulative effect of accounting changes - - (.12)
Extraordinary loss on early extinguishment
of debt - - (.06)
Net earnings $ 1.00 $ 1.00 $ .69
Consolidated Balance Sheets
Fiscal Years Ended December 31, 1994 and December 25, 1993
(In thousands of dollars, except per share data) 1994 1993
Assets
Current Assets
Cash $ 1,832 $ 9,284
Accounts receivable 81,859 84,482
Inventories 157,356 113,932
Other current assets 19,610 12,698
Total current assets 260,657 220,396
Non-Current Assets
Property, plant and equipment 117,105 99,925
Cost in excess of acquired net assets 43,429 33,275
Other assets 11,137 9,650
$ 432,328 $ 363,246
Liabilities and Stockholders' Equity
Current Liabilities
Notes payable $ 39,670 $ 5,100
Accounts payable 47,000 44,905
Accrued expenses 33,369 25,574
Income taxes payable 4,138 12,935
Other current liabilities 14,865 6,925
Total current liabilities 139,042 95,439
Non-Current Liabilities
Long-term debt 54,000 14,000
Accrued postretirement liability 8,698 9,084
Deferred income taxes 6,681 4,727
Stockholders' Equity
Common stock, $.10 par value - issued
53,361,072 shares 5,336 5,336
Additional paid-in capital 62,241 61,783
Retained earnings 218,837 191,230
Accumulated translation adjustment 1,858 (557)
Treasury stock at cost (54,213) (11,278)
Deferred compensation (10,152) (6,518)
Total stockholders' equity 223,907 239,996
$ 432,328 $ 363,246
Consolidated Statements of Cash Flows
Fiscal Years Ended December 31, 1994, December 25, 1993, and
December 26, 1992
Increase (decrease) to cash (in thousands of dollars) 1994 1993 1992
Cash flows from operating activities
Earnings from operations $ 50,916 $ 51,958 $ 43,265
Adjustments to reconcile earnings
from operations to net cash
provided by operations:
Depreciation and amortization 13,298 12,076 11,635
Deferred income taxes 2,389 340 1,280
Deferred compensation (332) 1,611 1,850
Cumulative effect of accounting changes
and extraordinary loss - - (8,800)
Changes in assets and liabilities:
Accounts receivable 5,815 (11,798) (16,943)
Inventories (34,695) (253) 5,939
Other current assets (2,735) 722 (5,833)
Other assets (943) 2 (373)
Accounts payable and accrued expenses (8,186) (4,937) 4,830
Income taxes payable (7,986) 3,918 279
Other current liabilities 4,777 (1,435) 2,792
Accrued postretirement liability (386) 310 8,774
Other (175) (109) (197)
Net cash provided by operations 21,757 52,405 48,498
Cash Flows From Investing Activities
Acquisitions (13,734) - (21,817)
Capital expenditures (21,710) (14,299) (12,835)
Other investing activities 590 1,972 (626)
Net cash used by investing activities (34,854) (12,327) (35,278)
Cash Flows From Financing Activities
Proceeds from sale of common stock - - 45,743
Proceeds from (payments on) long-term borrowings 40,000 (10,000) (56,331)
Change in notes payable 34,533 (282) 5,421
Treasury stock acquired (47,647) (5,103) -
Treasury stock issued under stock options
and other plans 1,756 1,905 830
Dividends paid (23,309) (19,482) (14,807)
Net cash provided (used) by financing activities 5,333 (32,962) (19,144)
Cash
Effect of exchange rates on cash 312 (273) (118)
Change in cash (7,452) 6,843 (6,042)
Cash at beginning of year 9,284 2,441 8,483
Cash at end of year $1,832 $9,284 $ 2,441
Consolidated Statements of Stockholders' Equity
Fiscal Years Ended December 31, 1994, December 25, 1993, and
December 26, 1992
(In thousands of dollars, except per share data) 1994 1993 1992
Common stock
Balance at beginning of year $ 5,336 $ 5,336 $ 2,668
Stock split - - 2,668
Balance at end of year 5,336 5,336 5,336
Additional paid-in capital
Balance at beginning of year 61,783 59,644 16,982
Sale of common stock - - 38,236
Stock split - - (2,858)
Stock options and other issuances 1,592 2,139 1,376
Issuance under long-term incentive plan (613) - 5,908
Revaluation of long-term incentive plan shares (521) - -
Balance at end of year 62,241 61,783 59,644
Retained earnings
Balance at beginning of year 191,230 158,754 139,096
Net earnings 50,916 51,958 34,465
Cash dividends declared on common
stock ($.46 per share in 1994,
$.38 in 1993 and $.305 in 1992) (23,309) (19,482) (14,807)
Balance at end of year 218,837 191,230 158,754
Accumulated translation adjustment
Balance at beginning of year (557) 3,803 3,365
Equity adjustment for translation of foreign
currencies 2,415 (4,360) 438
Balance at end of year 1,858 (557) 3,803
Treasury Stock
Balance at beginning of year (11,278) (7,956) (18,029)
Sale of 2,225,680 common shares - - 7,507
Issued, primarily under stock options (58,957 shares
in 1994, 489,976 in 1993 and 578,431 in 1992) 276 1,781 1,814
Common stock acquired (2,954,700 shares in 1994 and
280,000 in 1993) (47,647) (5,103) -
Issuance under long-term incentive plan (261,399
shares in 1994 and 369,950 in 1992) 4,436 - 752
Balance at end of year (54,213) (11,278) (7,956)
Deferred Compensation
Balance at beginning of year (6,518) (8,129) (3,319)
Issuance under long-term incentive plan (3,823) - (6,660)
Amortization (332) 1,611 1,850
Revaluation of long-term incentive plan shares 521 - -
Balance at end of year (10,152) (6,518) (8,129)
Total stockholders' equity $223,907 $239,996 $211,452
Notes to Consolidated Financial Statements
(In thousands of dollars, except per share data)
Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of all
subsidiaries. Intercompany balances and transactions are eliminated
in consolidation. The Company's fiscal year ends on the last
Saturday in December for domestic operations and a week earlier for
most foreign operations.
Translation of Foreign Currencies
Foreign currency accounts are translated into U.S. dollars as
follows: exchange rates at the end of the period are used to
translate all assets and liabilities; average exchange rates during
the year are used to translate income and expense accounts. Gains
and losses resulting from the translation of foreign currency
balance sheet accounts into U.S. dollars and related hedging
transactions are included in a separate caption, "Accumulated
translation adjustment," in the stockholders' equity section of the
consolidated balance sheets.
Property, Plant and Equipment
Property, plant and equipment are carried at cost, less accumulated
depreciation. Depreciation expense ($11,935 in 1994, $10,828 in
1993 and $10,394 in 1992) is computed generally on the
straight-line method using the following ranges of asset lives:
buildings and improvements - 10 to 40 years, machinery and
equipment - 5 to 15 years, and furniture and fixtures - 5 to 10
years.
Renewals and improvements which extend the useful lives of the
assets are capitalized. Capitalized leased assets and leasehold
improvements are depreciated over their useful lives or the
remaining lease term, whichever is shorter. Expenditures for
maintenance and repairs are charged to expense as incurred.
Inventory Valuation
Inventories are valued at the lower of cost or market. Cost is
determined using the last-in, first-out (LIFO) method for a
significant portion of chemicals inventories and the first-in,
first-out (FIFO) method for the remaining inventories.
Cost In Excess of Acquired Net Assets
The cost of acquisitions in excess of tangible and identifiable
intangible assets in the amount of $43,429 has, in the opinion of
management, incurred no permanent impairment in value. This cost is
being amortized using the straight-line method over periods from
twenty to forty years. Accumulated amortization amounted to $6,622
in 1994 and $5,456 in 1993.
Income Taxes
Effective in 1992, the Company adopted the provisions of FASB
Statement No.109 "Accounting for Income Taxes." Further information
is provided in the note on income taxes.
A provision has not been made for U.S. income taxes which would be
payable if undistributed earnings of foreign subsidiaries of
approximately $60,800 at December 31, 1994, were distributed to the
Company in the form of dividends, since it is management's
intention to permanently invest such earnings in the related
foreign operations. If distributed, such earnings would incur
income tax expense at substantially less than the U.S. income tax
rate, primarily because of the offset of foreign tax credits.
Research and Development
Expenditures for research and development costs are charged to
operations as incurred ($12,106 in 1994, $11,184 in 1993 and
$10,114 in 1992).
Statements of Cash Flows
Cash includes bank term deposits of three months or less. Cash
payments during the years ended 1994, 1993 and 1992 included
interest of $2,005, $1,556 and $7,248 and income taxes of $35,319,
$24,347 and $19,786, respectively.
Postretirement Health Care Benefits
Effective in 1992, the Company adopted the provisions of FASB
Statement No. 106 "Employers' Accounting for Postretirement
Benefits Other Than Pensions." Further information is provided in
the note on postretirement healthcare benefits.
Earnings Per Common Share
The computation of earnings per common share is based on the
weighted average number of common and common equivalent shares
outstanding amounting to 51,151,525 in 1994, 52,175,691 in 1993 and
49,967,453 in 1992. A dual presentation of earnings per common
share has not been made since there is no significant difference in
earnings per share calculated on a primary or fully diluted basis.
Financial Instruments
Financial instruments are presented in the accompanying
consolidated financial statements at either cost or fair value as
required by generally accepted accounting principles. The fair
value of the Company's financial instruments approximate carrying
value.
Other Disclosures
Included in accounts receivable are allowances for doubtful
accounts in the amount of $3,829 in 1994 and $4,072 in 1993.
Included in other current liabilities are customer deposits in the
amount of $11,183 in 1994 and $5,757 in 1993.
Acquisitions
On May 8, 1992, the Company acquired a pre-metallized dyes business
and facility located in Oissel, France at a cost of $21,817. On May
18, 1994, the Company acquired the business and certain assets of
the Egan Machinery Division of John Brown Plastics Machinery at a
cost of $10,718. On June 27, 1994, the Company acquired the
business and certain assets of McNeil & NRM, Inc. at a cost of
$3,016. The acquisitions have been accounted for using the purchase
method and, accordingly, the acquired assets and liabilities have
been recorded at their fair values at the dates of acquisition. The
excess cost of the purchase price over fair value of net assets
acquired in the amount of $13,572 is being amortized over forty
years. The operating results of each acquisition are included in
the Consolidated Statements of Earnings since the date of the
acquisition.
Inventories
1994 1993
Finished goods $ 90,386 $ 57,987
Work in process 32,640 25,748
Raw materials and supplies 34,330 30,197
$157,356 $113,932
At December 31, 1994, inventories valued using the last-in,
first-out (LIFO) method amounted to $75,958 ($60,983 at December
25, 1993). The LIFO reserve was not significant in 1994 and 1993.
Property, Plant and Equipment
1994 1993
Land $ 7,292 $ 5,494
Buildings and improvements 61,926 55,537
Machinery and equipment 113,296 101,285
Furniture and fixtures 3,662 3,470
Construction in progress 16,620 7,526
202,796 173,312
Less accumulated depreciation 85,691 73,387
$117,105 $ 99,925
Leases
The future minimum rental payments under operating leases having
initial or remaining non-cancellable lease terms in excess of one
year (as of December 31, 1994) total $23,795 as follows: $5,662 in
1995, $4,801 in 1996, $3,574 in 1997, $3,131 in 1998, $2,746 in
1999 and $3,881 in later years. Total rental expense for all
operating leases was $7,305 in 1994, $6,509 in 1993, and $6,379 in
1992.
All long-term leases expire prior to 2013. Real estate taxes,
insurance and maintenance expenses generally are obligations of the
Company and, accordingly, are not included as part of rental
payments. It is expected that, in the normal course of business,
leases that expire will be renewed or replaced by leases on other
properties.
Debt
Long-term debt is summarized as follows:
1994 1993
Revolving credit loans $ 50,000 $ 10,000
Industrial revenue bonds 4,000 4,000
Total long-term debt $ 54,000 $ 14,000
The industrial revenue bonds mature in 1997 and carry an interest
rate that fluctuates within the tax exempt market. The average
interest rate incurred in 1994 was 2.8%. The bonds are secured by
a bank letter of credit.
The Company has a credit agreement with a group of five banks
providing for up to $70,000 of revolving credit loans through
September 28, 1998. The agreement calls for interest at the prime
rate on revolving loans, but offers pricing options based on
certificate of deposit and Eurodollar rates which generally are
more favorable than the prime rate option. The Company must pay an
annual fee of .15% of the total unused commitment. The covenants of
the revolving credit agreement impose restrictions on the Company
with respect to debt and tangible net worth levels. These
restrictions are not expected to adversely affect the Company's
operations. At December 31, 1994, the $50,000 borrowed under the
revolving credit agreement bore an interest rate of 6.4%.
At December 31, 1994, notes payable outstanding of $39,670 bore an
interest rate of 5.8%.
The aggregate annual maturities of long-term debt are $4,000 in
1997 and $50,000 in 1998.
Capital Stock
The Company is authorized to issue 250,000,000 shares of common
stock at a par value of $.10. There are 53,361,072 common shares
issued, of which 4,703,891 shares and 2,069,547 shares were held in
the treasury at December 31, 1994 and December 25, 1993,
respectively. In December 1992, the Company sold 2,225,680 shares
of common stock through a public offering. The net proceeds were
used to repay certain long-term debt.
The Company is authorized to issue 250,000 shares of preferred
stock without par value, none of which are outstanding.
Preferred share purchase rights (Rights) outstanding with respect
to each share of the Company's common stock entitle the holder to
purchase one eight-hundredth of a share of Series A Junior
Participating Preferred Stock at an exercise price of $18.75. The
Rights cannot become exercisable until ten days following a public
announcement that a person or group has acquired 20% or more of the
common shares of the Company or intends to make a tender or
exchange offer which would result in their ownership of 20% or more
of the Company's common shares. The Rights also entitle the holder
under certain circumstances to receive shares in another company
which acquires the Company or merges with it.
Contingencies
In the normal course of its business, the Company is subject to
investigations, claims and legal proceedings, some of which concern
environmental matters, involving both private and governmental
parties. In some cases, the remedies sought or damages claimed may
be substantial. While each of these matters is subject to various
uncertainties as to outcome, and some of them may be decided
unfavorably to the Company, based on the facts known to the Company
and on consultation with legal counsel, management believes that
there are no such matters pending or threatened which will have a
material effect on the financial position of the Company or the
results of the Company's operations in any given year.
Income Taxes
The components of earnings from operations before income taxes and
taxes are as follows:
1994 1993 1992
PreTax Earnings:
Domestic $67,555 $68,498 $53,732
Foreign 12,414 13,975 14,605
Total $79,969 $82,473 $68,337
Taxes:
Domestic
Current taxes $23,361 $27,857 $18,104
Deferred taxes 2,057 (587) 2,237
$25,418 $27,270 $20,341
Foreign
Current taxes $ 3,303 $ 2,318 $ 5,688
Deferred taxes 332 927 (957)
$ 3,635 $ 3,245 $ 4,731
Total
Current taxes $26,664 $30,175 $23,792
Deferred taxes 2,389 340 1,280
$29,053 $30,515 $25,072
The following is a percentage reconciliation of computed "expected"
tax expense:
1994 1993 1992
Computed "expected" tax expense 35.0% 35.0% 34.0%
State taxes (net of U.S. tax benefit) 3.6 3.6 3.4
Foreign tax differential (0.9) (2.0) (.3)
Other, net (1.4) .4 (.4)
36.3% 37.0% 36.7%
Deferred income taxes are comprised of temporary differences
between financial and taxable income. The components of the net
deferred tax asset as of December 31, 1994 and December 25, 1993,
are as follows:
1994 1993
Deferred tax asset
Inventory obsolescence reserve and overhead
capitalization $ 3,239 $ 2,431
Bad debt reserves 232 480
Deferred compensation liability 638 879
Various expense accruals 4,475 1,782
Accrued postretirement liability 3,598 3,738
Total deferred tax assets 12,182 9,310
Deferred tax liability - depreciation (10,279) (8,806)
Net deferred tax asset $ 1,903 $ 504
Total deferred tax assets for 1994 and 1993 include current assets
of $8,584 and $5,231, respectively. The deferred tax liability is
non-current for 1994 and 1993.
Effective in 1992, the Company adopted the provisions of FASB
Statement No. 109 "Accounting for Income Taxes" resulting in a
cumulative charge of $300. Total income tax expense for 1992
amounted to $19,579 and was allocated as follows: earnings from
operations $25,072, cumulative effect of accounting changes
($3,424) and extraordinary loss on early extinguishment of debt
($2,069).
Pensions
The Company maintains a defined contribution pension plan for
eligible employees under provisions of section 401(k) of the
Internal Revenue Code. The plan provides for Company contributions
at a certain percentage of each participant's salary and allows
voluntary tax-deferred employee contributions up to a stated
percentage of salary. Other foreign and domestic pension plans are
not significant. Total pension expense aggregated $4,251 in 1994,
$4,036 in 1993 and $3,853 in 1992.
Stock Incentive Plans
The 1988 Long Term Incentive Plan (the 1988 Plan) authorizes the
Board to grant stock options, stock appreciation rights, restricted
stock and long-term performance awards to the officers and other
key employees of the Company over a period of ten years.
Non-qualified and incentive stock options may be granted under the
1988 plan at prices not less than 100% of the market value on the
date of the grant. All outstanding options will expire not more
than ten years and one month from the date of grant. There were
4,000,000 shares of common stock reserved for awards under the 1988
Plan.
The 1993 Stock Option Plan for Non-Employee Directors authorizes
100,000 shares to be optioned to non-employee directors at the rate
of their annual retainer divided by the stock price on the date of
grant. The option will vest over a two year period and be
exercisable over a ten year period from the date of grant, at a
price equaling the fair market value on the date of grant.
Since 1989, 1,703,149 common shares have been transferred to an
independent trustee to administer restricted stock awards under the
Company's long-term incentive program. At December 31, 1994,
deferred compensation relating to such shares in the amount of
$10,152 is being amortized over an estimated service period of six
to fifteen years. The unearned portion of such deferred
compensation fluctuates with the market value of the underlying
shares and amounted to $7,280 (448,000 shares) at December 31,
1994. To hedge the fluctuation on an after tax basis, the Company
has purchased, at a net cost of $638, cash-settlement call options
at a strike price of $14 5/8 covering 270,000 of its common shares,
financed in part by the sale of a like amount of cash-settlement
put options at a strike price of $13 3/4. At December 31, 1994, the
net value of such options, which mature on December 26, 1997 and
are included in "Other assets" in the accompanying balance sheet,
amounted to $1,077.
Changes during 1994, 1993 and 1992 in shares under option are
summarized as follows:
Price Per Share
Range Average Shares
Outstanding at 12/28/91 $ 1.29-18.32 $ 5.75 2,198,938
Granted 18.19-22.78 19.16 224,250
Exercised 1.29-9.31 3.40 (483,954)
Lapsed 4.01-9.31 8.18 (9,334)
Outstanding at 12/26/92 1.29-22.78 7.88 1,929,900
Granted 19.31-23.75 19.45 218,736
Exercised 1.29-18.31 2.87 (424,419)
Lapsed 4.01-19.19 14.01 (6,667)
Outstanding at 12/25/93 2.15-23.75 10.57 1,717,550
Granted 14.63-21.44 14.83 282,647
Exercised 2.15-9.31 5.59 (57,473)
Lapsed 9.31-19.31 18.12 (27,001)
Outstanding at 12/31/94 $ 2.47-23.75 $11.24 1,915,723
Exercisable at 12/31/94 $ 2.47-23.75 $ 9.46 1,441,270
Shares available for grant at December 31, 1994, and December 25,
1993, were 842,992 and 1,360,037, respectively.
The Company has an Employee Stock Ownership Plan that is offered to
eligible employees of the Company and certain of its subsidiaries.
The Company makes contributions equivalent to a stated percentage
of employee contributions. The Company's contributions were $1,677,
$1,617 and $1,276 in 1994, 1993 and 1992, respectively.
Foreign Operations
Financial data applicable to the Company's foreign operations are
as follows:
1994 1993 1992
Net sales $97,848 $103,356 $104,307
Net earnings $ 8,779 $ 10,730 $ 9,874
Assets $90,508 $ 82,789 $ 81,733
Postretirement Health Care Benefits
Effective January 1, 1992, the Company adopted the provisions of
FASB Statement No.106 "Employees' Accounting for Postretirement
Benefits Other Than Pensions." The Company elected to record
immediately the transition obligation, resulting in a one-time
aftertax charge to earnings of $5,500 or $.11 per share. The charge
represents the aftertax present value of postretirement health
benefits attributable to past service of eligible retired and
active employees under the Company's postretirement health care
benefit plans. In 1994, the Company adopted several changes to its
postretirement health care benefit plans including an annual cap
for medical premiums paid by the Company, higher deductible amounts
and out-of-pocket limits on medical payments. The plan amendments
resulted in a prior service gain of $3,254 which is being amortized
over the average remaining employee service period of 15 years.
Postretirement health care benefit expense did not have a material
effect on net earnings for the years 1994, 1993 and 1992.
The financial status of the accrued postretirement liability is as
follows:
1994 1993
Retirees $ 2,812 $ 4,056
Fully eligible active participants 608 1,956
Other active participants 1,240 3,277
Total accumulated postretirement liability 4,660 9,289
Unrecognized actuarial gain (loss) 784 (205)
Unrecognized prior service gain 3,254 -
$ 8,698 $ 9,084
For measurement purposes, a 12.5% annual rate of increase in the
per capita cost of covered health care benefits was assumed for
1994. The rate is assumed to decrease 1% per year to 6.5% in 2000
and remain at that level thereafter. The weighted-average discount
rate used in determining the accumulated postretirement benefit
obligation was 7.0%.
An increase in the assumed health care cost rate of 1% in each year
would increase the accumulated postretirement benefit obligation by
approximately $970.
Summarized Unaudited Quarterly Financial Data
1994
First Second Third Fourth
Net sales $133,594 $154,452 $142,821 $158,890
Gross profit 42,684 50,952 44,025 48,312
Net earnings 12,758 16,107 10,224 11,827
Net earnings per
common share .25 .31 .20 .24
Common dividends
per share .10 .12 .12 .12
Market price
per common share:
High 24 1/8 23 5/8 18 1/2 16 5/8
Low 19 5/8 17 3/8 15 7/8 13 7/8
1993
First Second Third Fourth
Net sales $133,743 $147,677 $134,031 $142,897
Gross profit 42,681 48,853 42,783 43,090
Net earnings 12,295 15,653 11,506 12,504
Net earnings per
common share .24 .30 .22 .24
Common dividends
per share .08 .10 .10 .10
Market price
per common share:
High 24 3/4 27 1/4 23 1/4 23 7/8
Low 21 3/8 21 19 17 5/8
Business Segment Data
Sales by segment represent sales to unaffiliated customers only.
Intersegment sales and transfers between geographic areas are
nominal and have not been disclosed separately. Operating profit is
defined as total revenue less operating expenses. In computing
operating profit, the following items have not been deducted: net
corporate expenses, interest expense and income taxes. Identifiable
assets by segment are those assets that are used in the Company's
operations in each segment. Corporate assets are principally cash,
prepayments and other assets maintained for general corporate
purposes.
Information by Business Segment
1994 1993 1992
Sales
Specialty chemicals $ 393,544 $407,280 $ 395,192
Specialty process equipment
and controls 196,213 151,068 122,526
$ 589,757 $ 558,348 $ 517,718
Operating profit
Specialty chemicals $ 60,783 $ 68,067 $ 63,407
Specialty process equipment
and controls 31,195 25,967 20,009
91,978 94,034 83,416
General corporate
expenses, net (9,842) (10,468) (8,095)
Interest expense (2,167) (1,093) (6,984)
Earnings before income
taxes $ 79,969 $ 82,473 $ 68,337
Identifiable Assets
Specialty chemicals $ 313,457 $ 281,804 $278,931
Specialty process equipment
and controls 103,151 69,279 58,099
416,608 351,083 337,030
Corporate 15,720 12,163 13,685
$ 432,328 $ 363,246 $ 350,715
Depreciation and Amortization
Specialty chemicals $ 11,141 $ 10,628 $ 10,332
Specialty process equipment
and controls 1,995 1,324 1,186
13,136 11,952 11,518
Corporate 162 124 117
$ 13,298 $ 12,076 $ 11,635
Capital Expenditures
Specialty chemicals $ 18,891 $ 12,057 $ 11,669
Specialty process equipment
and controls 2,756 2,131 1,125
21,647 14,188 12,794
Corporate 63 111 41
$ 21,710 $ 14,299 $ 12,835
Information by Major Geographic Segment
1994 1993 1992
Sales
United States $ 491,909 $ 454,992 $ 413,411
Europe 88,693 93,808 94,791
Canada 9,155 9,548 9,516
$ 589,757 $ 558,348 $ 517,718
Exports to Unaffiliated Customers
Included in United States sales:
Far East $ 19,858 $ 26,244 $ 19,177
Latin America 15,027 10,183 7,681
Europe 9,381 7,251 4,318
Canada 7,076 3,500 3,263
Other 3,102 838 785
Total 54,444 48,016 35,224
Included in European sales:
Far East 10,117 8,649 7,413
Latin America 4,631 4,261 2,768
Other 6,362 3,756 5,355
Total 21,110 16,666 15,536
$ 75,554 $ 64,682 $ 50,760
Operating Profit
United States $ 79,148 $79,536 $ 68,617
Europe 12,038 13,736 13,108
Canada 792 762 1,691
$ 91,978 $94,034 $ 83,416
Identifiable Assets
United States $ 341,820 $280,457 $ 268,982
Europe 85,578 77,203 76,439
Canada 4,930 5,586 5,294
$ 432,328 $363,246 $ 350,715
Responsibility for Financial Statements
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles and have
been audited by KPMG Peat Marwick LLP, Independent Certified Public
Accountants, whose report is presented herein.
Management of the Company assumes responsibility for the accuracy
and reliability of the financial statements. In discharging such
responsibility, management has established certain standards which
are subject to continuous review and are monitored through the
Company's financial management and internal audit group.
The Board of Directors pursues its oversight role for the financial
statements through its Audit Committee which consists of outside
directors. The Audit Committee meets on a regular basis with
representatives of management, the internal audit group and KPMG
Peat Marwick LLP.
Independent Auditors' Report
The Board of Directors and Stockholders
Crompton & Knowles Corporation
We have audited the consolidated balance sheets of Crompton &
Knowles Corporation and subsidiaries as of December 31, 1994 and
December 25, 1993 and the related consolidated statements of
earnings, stockholders' equity and cash flows for each of the
fiscal years in the three-year period ended December 31, 1994.
These consolidated financial statements are the responsibility of
the Company's management. Our responsibility is to express an
opinion on these consolidated 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 consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Crompton & Knowles Corporation and subsidiaries at
December 31, 1994 and December 25, 1993 and the results of their
operations and their cash flows for each of the fiscal years in the
three-year period ended December 31, 1994 in conformity with
generally accepted accounting principles.
In 1992, as discussed in the notes to consolidated financial
statements, the Company adopted the provisions of the Financial
Accounting Standards Board's Statement No. 106 "Employers'
Accounting for Postretirement Benefits Other Than Pensions," and
Statement No. 109, "Accounting for Income Taxes."
KPMG Peat Marwick LLP
Stamford, Connecticut
January 25, 1995
Eleven Year Selected Financial Data
(In thousands of dollars except per share data) 1994 1993 1992
Summary Of Operations
Net sales $589,757 558,348 517,718
Interest expense $ 2,167 1,093 6,984
Pretax earnings $ 79,969 82,473 68,337
Income taxes $ 29,053 30,515 25,072
Earnings from continuing operations $ 50,916 51,958 43,265
Cumulative effect of accounting changes $ - - (5,800)
Extraordinary loss on early extinguishment
of debt $ - - (3,000)
Earnings (loss) from discontinued
operations $ - - -
Loss on disposal of discontinued operations $ - - -
Net earnings $ 50,916 51,958 34,465
Per Share Statistics
Earnings from continuing operations before
cumulative effect of accounting changes
and extraordinary loss $1.00 1.00 .87
Net earnings $1.00 1.00 .69
Dividends $ .46 .38 .31
Book value $4.60 4.68 4.14
Common stock trading range: High 24 1/8 27 1/4 23 7/8
Low 13 7/8 17 5/8 16
Average shares outstanding (thousands) 51,152 52,176 49,967
Financial Position
Current assets $ 260,657 220,396 207,383
PP&E, net $ 117,105 99,925 98,827
Other assets $ 54,566 42,925 44,505
Total assets $ 432,328 363,246 350,715
Current liabilities $ 139,042 95,439 102,593
Long-term debt $ 54,000 14,000 24,000
Accrued postretirement liability $ 8,698 9,084 8,774
Deferred income taxes $ 6,681 4,727 3,896
Stockholders' equity $ 223,907 239,996 211,452
Current ratio 1.9 2.3 2.0
Total debt-to-equity % 41.8 8.0 13.9
Total debt-to-capital % 29.5 7.4 12.2
Profitability Statistics (Continuing Operations)
% Effective tax rate 36.3 37.0 36.7
% Return on sales 8.6 9.3 8.4
% Return on average total capital 18.3 21.0 19.3
% Return on average common equity 21.1 23.1 27.1
Other Statistics (Continuing Operations)
Capital spending $21,710 14,299 12,835
Depreciation $11,935 10,828 10,394
Sales per employee $ 234 240 237
Eleven Year Selected Financial Data
(In thousands of dollars except per share data)
1991 1990 1989
Summary Of Operations
Net sales $450,228 390,032 355,817
Interest expense $ 7,419 5,842 6,006
Pretax earnings $ 56,600 47,260 38,588
Income taxes $ 20,659 17,250 14,087
Earnings from continuing operations $ 35,941 30,010 24,501
Cumulative effect of accounting
changes $ - - -
Extraordinary loss on early
extinguishment of debt $ - - -
Earnings (loss) from discontinued
operations $ - - -
Loss on disposal of
discontinued operations $ - - -
Net earnings $ 35,941 30,010 24,501
Per Share Statistics
Earnings from continuing operations before
cumulative effect of accounting changes
and extraordinary loss $ .73 .61 .50
Net earnings $ .73 .61 .50
Dividends $ .25 .20 .15
Book value $ 2.94 2.47 2.08
Common stock trading range: High 20 1/4 11 5/8 7 7/8
Low 8 3/8 6 3/4 3 3/4
Average shares outstanding
(thousands) 49,317 49,270 49,064
Financial Position
Current assets $185,235 164,442 127,216
PP&E, net $ 80,154 76,709 50,847
Other assets $ 43,173 41,493 39,787
Total assets $308,562 282,644 217,850
Current liabilities $ 85,712 88,340 71,068
Long-term debt $ 76,118 70,330 41,213
Accrued postretirement liability $ - - -
Deferred income taxes $ 5,969 6,409 6,668
Stockholders' equity $140,763 117,565 98,901
Current ratio 2.2 1.9 1.8
Total debt-to-equity % 57.1 77.6 52.4
Total debt-to-capital % 36.3 43.7 34.4
Profitability Statistics (Continuing Operations)
% Effective tax rate 36.5 36.5 36.5
% Return on sales 8.0 7.7 6.9
% Return on average total capital 18.9 19.8 19.3
% Return on average common equity 28.4 28.1 27.6
Other Statistics (Continuing Operations)
Capital spending $ 11,434 16,374 13,407
Depreciation $ 8,813 7,156 5,666
Sales per employee $ 222 218 215
Eleven Year Selected Financial Data
(In thousands of dollars except per share data)
1988 1987 1986
Summary Of Operations
Net sales $289,787 199,394 178,256
Interest expense $ 3,606 2,042 789
Pretax earnings $ 26,943 20,353 16,800
Income taxes $ 10,098 8,341 7,421
Earnings from continuing operations $ 16,845 12,012 9,379
Cumulative effect of accounting
changes $ - - -
Extraordinary loss on early
extinguishment of debt $ - - -
Earnings (loss) from discontinued
operations $ (597) (262) (678)
Loss on disposal of discontinued
operations $ (920) - (7,700)
Net earnings $ 15,328 11,750 1,001
Per Share Statistics
Earnings from continuing operations before
cumulative effect of accounting changes
and extraordinary loss $ .36 .25 .17
Net earnings $ .32 .24 .01
Dividends $ .11 .08 .08
Book value $ 1.75 1.59 1.42
Common stock trading range: High 4 1/2 3 7/8 2 1/2
Low 2 1/2 2 1/4 1 5/8
Average shares
outstanding (thousands) 47,239 48,168 50,974
Financial Position
Current assets $120,584 94,069 95,931
PP&E, net $ 43,685 29,085 28,511
Other assets $ 41,373 12,075 10,349
Total assets $205,642 135,229 134,791
Current liabilities $ 72,352 40,922 41,687
Long-term debt $ 44,594 12,927 19,455
Accrued postretirement liability $ - - -
Deferred income taxes $ 6,775 5,575 5,174
Stockholders' equity $ 81,921 75,805 68,475
Current ratio 1.7 2.3 2.3
Total debt-to-equity % 72.1 25.1 47.0
Total debt-to-capital % 41.9 20.1 32.0
Profitability Statistics (Continuing Operations)
% Effective tax rate 37.5 41.0 44.2
% Return on sales 5.8 6.0 5.3
% Return on average total capital 17.2 14.8 13.6
% Return on average common equity 22.7 17.7 15.0
Other Statistics (Continuing Operations)
Capital spending $ 6,798 3,523 2,967
Depreciation $ 4,658 3,468 3,101
Sales per employee $ 190 168 146
Eleven Year Selected Financial Data
(In thousands of dollars except per share data)
1985 1984
Summary Of Operations
Net sales $ 163,287 155,435
Interest expense $ 571 1,011
Pretax earnings $ 15,443 14,255
Income taxes $ 7,122 6,368
Earnings from continuing operations $ 8,321 7,887
Cumulative effect of accounting
changes $ - -
Extraordinary loss on early
extinguishment of debt $ - -
Earnings (loss) from discontinued
operations $ (746) 4
Loss on disposal of discontinued
operations $ - -
Net earnings $ 7,575 7,891
Per Share Statistics
Earnings from continuing operations before
cumulative effect of accounting changes
and extraordinary loss $ .15 .14
Net earnings $ .14 .14
Dividends $ .08 .07
Book value $ 1.34 1.26
Common stock trading range: High 1 3/4 1 1/2
Low 1 1/4 1 1/4
Average shares outstanding (thousands)51,694 51,418
Financial Position
Current assets $ 87,400 82,125
PP&E, net $ 30,376 30,809
Other assets $ 12,146 11,964
Total assets $ 129,922 124,898
Current liabilities $ 32,366 31,149
Long-term debt $ 19,093 20,322
Accrued postretirement liability $ - -
Deferred income taxes $ 4,708 4,031
Stockholders' equity $ 73,755 69,396
Current ratio 2.7 2.6
Total debt-to-equity % 30.5 35.3
Total debt-to-capital % 23.4 26.1
Profitability Statistics (Continuing Operations)
% Effective tax rate 46.1 44.7
% Return on sales 5.1 5.1
% Return on average total capital 13.2 12.8
% Return on average common equity 14.3 14.4
Other Statistics (Continuing Operations)
Capital spending $ 2,888 3,185
Depreciation $ 3,061 2,973
Sales per employee $ 128 123
Return on Sales
Continuing Operations
(bar graph referencing Eleven Year Selected Financial Data)
Return on Average
Total Capital
Continuing Operations
(bar graph referencing Eleven Year Selected Financial Data)
Sales Per Employee
Continuing Operations
(bar graph referencing Eleven Year Selected Financial Data)
Corporate Data
Directors
3 James A. Bitonti
President and Chief Executive Officer
TCOM, L.P.
Vincent A. Calarco
Chairman of the Board
President and Chief Executive Officer
2,3 Robert A. Fox
President and Chief Executive Officer
Foster Farms
2,3 Roger L. Headrick
President and Chief Executive Officer
Minnesota Vikings Football Club
1,2 Leo I. Higdon
Dean
The Darden Graduate School
of Business Administration
University of Virginia
1,3 Michael W. Huber
Retired Chairman of the Board
J.M. Huber Corporation
1,3 Warren A. Law, Ph.D.
Retired Professor
Graduate School
of Business Administration
Harvard University
Charles J.Marsden
Vice President-Finance and Chief Financial Officer
1,2 C.A. Piccolo
Chairman and Chief Executive Officer
Caremark International Inc.
1 Patricia K. Woolf, Ph.D.
Private Investor and Lecturer
Department of Molecular Biology
Princeton University
1 Member of Audit Committee
2 Member of Nominating Committee
3 Member of Committee on Executive Compensation
Corporate Headquarters
One Station Place, Metro Center
Stamford, CT 06902
(203) 353-5400
Auditors
KPMG Peat Markwick LLP
Stamford, CT
Transfer Agent and Registrar
Mellon Securities Transfer Services
Pittsburgh, PA
(800) 288-9541
Annual Meeting
The annual meeting of stockholders will be held at 11:15 a.m.
on Tuesday, April 11, 1995, at the Metropolitan Club,
1 East 60th Street, New York New York
Form 10-K
A copy of the Company's report on Form 10-K for 1994,
as filed with the Securities and Exchange Commission,
may be obtained free of charge by writing to the Secretary
of the Corporation, One Station Place, Metro Center,
Stamford, CT 06902
Corporate Officers and Operating Management
(photo caption)
Vincent A. Calarco
Chairman, President and
Chief Executive Officer
Robert W. Ackley
Vice President
President -
Davis-Standard
Nicholas Fern, Ph.D.
President -
Dyes and Chemicals - Asia
Gerald H. Fickenscher, Ph.D.
President -
Dyes & Chemicals - Europe
Edmund H. Fording
Vice President
President -
Dyes and Chemicals - Americas
Marvin H. Happel
Vice President - Organization
Charles J. Marsden
Vice President -
Finance and Chief Financial Officer
Frank H. Schoonyoung
President -
Ingredient Technology
Peter Barna
Treasurer and
Principal Accounting Officer
John T. Ferguson, II
General Counsel and Secretary
Robert A. Marchitello
Assistant Secretary
Corporate Management Committee
of Crompton & Knowles
(from left to right):
John T. Ferguson, II
Gerald H. Fickenscher,
Marvin H. Happel,
Peter Barna,
Edmund H. Fording,
Vincent A. Calarco,
Nicholas Fern,
Robert W. Ackley,
Frank H. Schoonyoung, and
Charles J. Marsden.
Copyright 1995 Crompton & Knowles Corporation.
All rights reserved.
(C&K logo) CROMPTON & KNOWLES CORPORATION
One Station Place, Metro Center, Stamford, CT 06902