SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 30, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 1-4663
Crompton & Knowles Corporation
(Exact name of registrant as specified in its charter)
Massachusetts 04-1218720
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
One Station Place, Metro Center
Stamford, Connecticut 06902
(address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 353-5400
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, $0.10 par value 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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes x No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
registrant, computed as of February 9, 1996, was $640,834,968.
The number of shares of Common Stock of the registrant outstanding as of
February 9, 1996 was 48,022,079.
DOCUMENTS INCORPORATED BY REFERENCE
Annual Report to Stockholders for fiscal year
ended December 30, 1995 Parts I, II and IV
Proxy Statement for Annual Meeting of Stockholders
on April 9, 1996 Part III
CROMPTON & KNOWLES CORPORATION
PART I
ITEM 1. BUSINESS
General
Crompton & Knowles Corporation (together with its consolidated
subsidiaries, the "Corporation"), was incorporated in Massachusetts in 1900.
The Corporation has engaged in the manufacture and sale of specialty chemicals
since 1954 and, since 1961, in the manufacture and sale of specialty process
equipment and controls. The Corporation expanded its specialty chemical
business in 1988 with the acquisitions of Ingredient Technology Corporation, a
leading supplier of ingredients for the food and pharmaceutical industries,
and Townley Dyestuffs Auxiliaries Company, Ltd., one of the largest
independent suppliers of dyes for Great Britain's textile and paper
industries. The Corporation made two acquisitions in calendar year 1990,
acquiring the business and certain assets and liabilities of Atlantic
Industries, Inc., a domestic dye manufacturer, and APV Chemical Machinery,
Inc., which manufactured the Sterling line of extruders, extrusion systems and
industrial blow molding equipment for the plastics industry. In 1991, the
Corporation acquired a wire and cable equipment business from Clipper
Machines, Inc. In 1992, the Corporation acquired a pre-metallized dyes
business and facility located in Oissel, France. The Corporation made two
acquisitions in 1994, the Egan Machinery plastics extrusion, precision coating
and cast and blown film equipment business and the plastics and rubber
extrusion machinery and parts and after-market services business of McNeil &
NRM, Inc. Effective January 1, 1995, the Corporation's textile dyes and
chemicals business and its specialty process equipment and controls business
have been conducted by Crompton & Knowles Colors Incorporated and
Davis-Standard Corporation, respectively, wholly owned subsidiaries of the
Corporation. In 1995, the Corporation acquired the plastics and rubber
extrusion business of McNeil Akron Repiquet SARL, including a manufacturing
facility located in Dannemarie, France, and Killion Extruders, Inc., a
producer of precision laboratory and small scale extrusion systems. In
January 1996, the Corporation acquired Klockner ER-WE-PA GmbH, a manufacturer
of extrusion coating, cast film and plastic extrusion equipment located in
Erkrath, Germany, and retained Salomon Brothers Inc to assist in exploring
strategic alternatives to maximize shareholder value with respect to the
Ingredient Technology Corporation business.
Information as to the sales, operating profit, and identifiable assets
attributable to each of the Corporation's business segments during each of
its last three fiscal years is set forth in the Notes to Consolidated
Financial Statements on page 23 of the Corporation's 1995 Annual Report to
Stockholders, and such information is incorporated herein by reference.
Products and Services
The principal products and services offered by the Corporation are described
below.
SPECIALTY CHEMICALS
Textile dyes manufactured and sold by the Corporation are used on both
synthetic and natural fibers for knit and woven garments, home furnishings
such as carpets, draperies, and upholstery, and automotive furnishings
including carpeting, seat belts, and upholstery. Industrial dyes and
chemicals are marketed to the paper, leather, and ink industries for use on
stationery, tissue, towels, shoes, apparel, luggage, and other products and
for transfer printing inks. The Corporation also markets organic chemical
intermediates and a line of chemical auxiliaries for the textile industry,
including leveling agents, dye fixatives, and scouring agents. Sales of this
class of products accounted for 43%, 50%, and 57% of the total revenues of the
Corporation in 1995, 1994, and 1993, respectively.
The Corporation manufactures and sells reaction and compounded flavor
ingredients for the food processing, bakery, beverage and pharmaceutical
industries; colors certified by the Food & Drug Administration for sale to
domestic producers of food and pharmaceuticals; and inactive ingredients for
the pharmaceutical industry. The Corporation is also a leading supplier of
specialty sweeteners, including edible molasses, molasses blends, malt
extracts, and syrups for the bakery, confectionery and food processing
industries and a supplier of seasonings and seasoning blends for the food
processing industry. Sales of this class of products accounted for 15%, 17%,
and 16% of the total revenues of the Corporation in 1995, 1994, and 1993,
respectively.
SPECIALTY PROCESS EQUIPMENT AND CONTROLS
The Corporation manufactures and sells plastics and rubber extrusion
equipment, industrial blow molding equipment, electronic controls, and
integrated extrusion systems and offers specialized service and modernization
programs for in-place extrusion systems. Sales of this class of products
accounted for 42%, 33%, and 27% of the total revenues of the Corporation in
1995, 1994, and 1993, respectively.
Integrated extrusion systems, which include extruders in combination with
controls and other accessory equipment, are used to process plastic resins and
rubber into various products such as plastic sheet used in appliances,
automobiles, home construction, sports equipment, and furniture; cast and
blown film used to package many consumer products; and extruded shapes used as
house siding, furniture trim, and substitutes for wood molding. Integrated
extrusion systems are also used to compound engineered plastics, to recycle
and reclaim plastics, to coat paper, cardboard and other materials used as
packaging, and to apply plastic or rubber insulation to high voltage power
cable for electrical utilities and to wire for the communications,
construction, automotive, and appliance industries.
Industrial blow molding equipment produced by the Corporation is sold to
manufacturers of non-disposable plastic items such as tool cases and beverage
coolers.
The Corporation's HES unit produces electrical and electronic controls
primarily for use with extrusion systems. The Corporation is a major user of
such controls.
Sources of Raw Materials
Chemicals, steel, castings, parts, machine components, edible molasses,
spices, and other raw materials required in the manufacture of Crompton &
Knowles' products are generally available from a number of sources, some of
which are foreign. Significant sales of the dyes and auxiliary chemicals
business consist of dyes manufactured from intermediates purchased from
foreign sources.
Patents and Licenses
Crompton & Knowles owns patents, trade names, and trademarks and uses
know-how, trade secrets, formulae, and manufacturing techniques which assist
in maintaining the competitive position of certain of its products. Patents,
formulae, and know-how are of particular importance in the manufacture of a
number of the dyes and flavor ingredients sold in the Corporation's specialty
chemicals business, and patents and know-how are also significant in the
manufacture of certain wire insulating and plastics processing machinery
product lines. The Corporation believes that no single patent, trademark, or
other individual right is of such importance, however, that expiration or
termination thereof would materially affect its business. The Corporation is
also licensed to use certain patents and technology owned by foreign companies
to manufacture products complementary to its own products, for which it pays
royalties in amounts not considered material to the consolidated results of
the enterprise. Products to which the Corporation has such rights include
certain dyes, plastics machinery and flavored ingredients.
Seasonal Business
No material portion of any segment of the business of the Corporation is
seasonal.
Customers
The Corporation does not consider any segment of its business dependent
on a single customer or a few customers, the loss of any one or more of whom
would have an adverse effect on the segment. No one customer's business
accounts for more than ten percent of the Corporation's gross revenues nor
more than ten percent of its earnings before taxes.
Backlog
Because machinery production schedules range from about 60 days to 10
months, backlog is important to the Corporation's specialty process equipment
and controls business. Firm backlog of customers' orders for this business at
December 30, 1995, totalled approximately $72 million compared with $66
million at December 31, 1994. It is expected that most of the December 30,
1995, backlog will be shipped during 1996. Orders for specialty chemicals and
equipment repair parts are filled primarily from inventory stocks and thus are
excluded from backlog.
Competitive Conditions
Crompton & Knowles is among the largest suppliers of dyes in the United
States and is a leading domestic producer of specialty dyes for nylon,
polyester, acrylics, and cotton. The Corporation is less of a factor in other
segments of the domestic dyes industry and in the European market. The
Corporation is also a major United States and Canadian supplier of edible
molasses, a major United States supplier of malt extracts, and a significant
supplier of other sugar-based specialty products. As a supplier of flavors
and seasonings, the Corporation has many competitors in the United States and
abroad.
Crompton & Knowles is a leading producer of extrusion machinery for the
plastics industry and a leading domestic producer of industrial blow molding
equipment and competes with domestic and foreign producers of such products.
The Corporation is one of a number of producers of other types of plastics
processing machinery.
Product performance, service, and competitive prices are all important
factors in competing in the specialty chemicals and specialty process
equipment and controls product lines. No one competitor or small number of
competitors is believed to be dominant in any of the Corporation's major
markets.
Research and Development
Crompton & Knowles employs about 280 engineers, draftsmen, chemists, and
technicians responsible for developing new and improved chemical products and
process equipment systems for the industries served by the Corporation.
Often, new products are developed in response to specific customer needs. The
Corporation'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 Corporation's results of operations
from year to year. Research and development expenditures totalled $14.0
million for the year 1995, $12.1 million for the year 1994, and $11.2 million
for the year 1993.
Environmental Matters
The Corporation'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, in 1995, the
Corporation spent approximately $15.8 million to comply with those
requirements, including approximately $4.9 million in capital expenditures.
The Corporation 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 statutes, at two
waste disposal sites; and an inactive subsidiary has been designated, along
with others, as a potentially responsible party at two other sites.
While the cost of compliance with existing environmental requirements is
expected to increase, based on the facts currently known to the Corporation,
management expects that those costs, including the cost to the Corporation of
remedial actions at the waste disposal sites where it has been named a
potentially responsible party, will not have a material effect on the
Corporation's liquidity and financial condition and that the cost to the
Corporation of any remedial actions will not be material to the results of the
Corporation's operations in any given year.
Employees
The Corporation had 2,761 employees on December 30, 1995.
Financial Information Concerning Foreign Operations and Export Sales
The information with respect to sales, operating profit, and identifiable
assets attributable to each of the major geographic areas served by the
Corporation and export sales, for each of the Corporation's last three fiscal
years, set forth in the Notes to Consolidated Financial Statements on page 23
of the Corporation's 1995 Annual Report to Stockholders, is incorporated
herein by reference.
The Corporation considers that the risks relating to operations of its
foreign subsidiaries are comparable to those of other U.S. companies which
operate subsidiaries in developed countries. All of the Corporation's
international operations are subject to fluctuations in the relative values of
the currencies in the various countries in which its activities are conducted.
ITEM 2. PROPERTIES
The following table sets forth information as to the principal operating
properties of the Corporation and its subsidiaries:
Ownership
Business Segment Dates or Lease
and Location Products Built Expiration
Specialty Chemicals:
Carrollton, TX Seasonings 1982 1997
office and plant
Des Plaines, IL Flavors 1968 Owned
office and plant
Elyria, OH Seasonings 1978 2001
office and plant
Gibraltar, PA Textile and 1964- Owned
office, laboratory other dyes 1980
and chemical plant
Lowell, NC Textile dyes,
chemical plant organic chemicals 1961 Owned
Mahwah, NJ Flavors and 1984- 2004
office, laboratory Seasonings 1989
and plant
Newark, NJ Textile dyes, 1949- Owned
chemical plant organic chemicals 1985
Nutley, NJ Textile and 1949- Owned
office, laboratory other dyes 1977
and chemical plant
Oissel, France Textile and 1946- Owned
office, laboratory other dyes 1992
and chemical plant
Reading, PA Textile dyes, 1910- Owned
chemical plant organic chemicals 1979
and food colors
Tertre, Belgium Textile and 1970 Owned
office, laboratory other dyes
and chemical plant
Vineland, NJ Food and pharmaceutical 1995 Owned
office and plant ingredients and colors
Specialty Process
Equipment and Controls:
Cedar Grove, NJ Precision Laboratory 1929 1996
office and extrusion equipment
machine shop and extrusion systems
Dannemarie, France Extrusion systems 1967- Owned
office and 1980
machine shop
Edison, NJ Blow molding and 1974- 2000
office and extrusion 1979
machine shop equipment
Erkrath, Germany Extrusion systems 1954- Owned
office and 1991
machine shop
Pawcatuck, CT Plastics and rubber 1965- Owned
office and extrusion and 1985
machine shop electronic control
equipment and systems
Pawcatuck, CT Extrusion systems 1968 1998
office and
machine shop
Somerville, NJ Extrusion systems 1966- Owned
office and 1994
machine shop
All plants are built of brick, tile, concrete, or sheet metal materials
and are of one-floor construction except parts of the plants located in
Reading and Gibraltar, Pennsylvania, Nutley, Cedar Grove, and Somerville, New
Jersey, Oissel and Dannemarie, France, Erkrath, Germany, and Tertre, Belgium.
All are considered to be in good operating condition, well maintained, and
suitable for the Corporation's requirements.
ITEM 3. LEGAL PROCEEDINGS
In the normal course of its business, the Corporation 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 Corporation, based on the facts
known to the Corporation 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 Corporation or the results
of the Corporation's operations in any given year.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The information concerning the range of market prices for the
Corporation's Common Stock on the New York Stock Exchange and the amount of
dividends paid thereon during the past two years, set forth in the Notes to
Consolidated Financial Statements on page 24 of the Corporation's 1995 Annual
Report to Stockholders, is incorporated herein by reference.
The number of registered holders of Common Stock of the Corporation on
December 30, 1995, was 4,664.
ITEM 6. SELECTED FINANCIAL DATA
The selected financial data for the Corporation for each of its last five
fiscal years, set forth under the heading "Eleven Year Selected Financial
Data" on pages 26 and 27 of the Corporation's 1995 Annual Report to
Stockholders, is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Management's discussion and analysis of the Corporation's financial
condition and results of operations, set forth under the heading "Management's
Discussion and Analysis of Financial Condition and Results of Operations" on
pages 11 through 13 of the Corporation's 1995 Annual Report to Stockholders,
is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements of the Corporation, notes thereto, and
supplementary data, appearing on pages 14 through 25 of the Corporation's 1995
Annual Report to Stockholders, are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information called for by this item concerning directors of the
Corporation is included in the definitive proxy statement for the
Corporation's Annual Meeting of Stockholders to be held on April 9, 1996,
which has been filed with the Commission pursuant to Regulation 14A, and such
information is incorporated herein by reference.
The executive officers of the Corporation are as follows:
Vincent A. Calarco, age 53, has served as President and Chief Executive
Officer of the Registrant since 1985 and Chairman of the Board since 1986. He
is former Vice President for Strategy and Development, Uniroyal, Inc.
(1984-1985), and former President of Uniroyal Chemical Company (1979-1984).
Mr. Calarco has been a member of the Board of Directors of the Registrant
since 1985. Mr. Calarco also serves as a director of Caremark International
Inc.
Robert W. Ackley, age 54, has served as a Vice President of the Registrant
since 1986 and as President of Davis-Standard Corporation (formerly the
Davis-Standard Division) since 1983.
Peter Barna, age 52, has served as Treasurer of the Registrant since 1980 and
as Principal Accounting Officer since 1986.
John T. Ferguson, II, age 49, has served as General Counsel and Secretary of
the Registrant since 1989.
Nicholas Fern, Ph.D., age 52, has served as President, Dyes and Chemicals -
Asia, for the Registrant since 1994, as President of the Registrant's
International Dyes and Chemicals Division from 1992 to 1994, and as Managing
Director of Crompton & Knowles Europe, S.A. (formerly Crompton & Knowles
Tertre) from 1978 to 1994.
Gerald H. Fickenscher, Ph.D., age 52, has served as President, Dyes and
Chemicals - Europe, for the Registrant and as Managing Director of Crompton &
Knowles Europe, S.A. since 1994. He is the former Chief Financial Officer of
Uniroyal Chemical Corporation (1986-1994).
Edmund H. Fording, Jr., age 59, has served as Vice President of the Registrant
since 1991 and as President of Crompton & Knowles Colors Incorporated
(formerly the domestic Dyes and Chemicals Division) since 1989. He is the
former General Manager of the Dyes Division of Hilton Davis Co. (1988-1989)
and Director of the Organic Department of Mobay Corporation (1980-1988).
Marvin H. Happel, age 56, has served as Vice President -Organization of the
Registrant since 1986. He is the former Director of Human Resources of
Uniroyal Chemical Company (1979-1986).
Charles J. Marsden, age 55, has served as Vice President - Finance and Chief
Financial Officer and as a member of the Board of Directors of the Registrant
since 1985.
Rudy M. Phillips, age 54, has served as President of Ingredient Technology
Corporation since January, 1996. He is a former Vice President of Ingredient
Technology Corporation (1988-1996).
The term of office of each of the above-named executive officers is until
the first meeting of the Board of Directors following the next annual meeting
of stockholders and until the election and qualification of his successor.
There is no family relationship between any of such officers, and there
is no arrangement or understanding between any of them and any other person
pursuant to which any such officer was selected as an officer.
ITEM 11. EXECUTIVE COMPENSATION
Information called for by this item is included in the definitive proxy
statement for the Corporation's Annual Meeting of Stockholders to be held on
April 9, 1996, which has been filed with the Commission pursuant to Regulation
14A, and such information is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Information called for by this item is included on pages 1 and 5 of the
definitive proxy statement for the Corporation's Annual Meeting of
Stockholders to be held on April 9, 1996, and such information is incorporated
herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information called for by this item is included in the definitive proxy
statement for the Corporation's Annual Meeting of Stockholders to be held on
April 9, 1996, and such information is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a) The following documents are filed as part of this report:
1. Financial statements and Independent Auditors' Report, as required
by Item 8 of this form, which appear on pages 14 through 25 of the
Corporation's 1995 Annual Report to Stockholders and are
incorporated herein by reference:
(i) Consolidated Statements of Earnings for the fiscal years ended December
30, 1995, December 31, 1994,and December 25, 1993;
(ii) Consolidated Balance Sheets as at December 30, 1995, and December 31,
1994;
(iii) Consolidated Statements of Cash Flows for the fiscal years ended
December 30, 1995, December 31, 1994, and December 25, 1993;
(iv) Consolidated Statements of Stockholders' Equity for the fiscal years
ended December 30, 1995, December 31, 1994, and December 25, 1993;
(v) Notes to Consolidated Financial Statements; and
(vi) Independent Auditors' Report.
2. Independent Auditors' Report on Financial Statement Schedule and financial
statement schedule II, Valuation and Qualifying Accounts, required by
Regulation S-X. Pages S-1 and S-2 hereof.
3. Exhibits filed herewith or incorporated herein by reference:
Exhibit No. Description
3(i) Restated Articles of Organization of the Corporation filed with the
Commonwealth of Massachusetts on October 27, 1988, as amended on April 10,
1990 and on April 14, 1992. (Exhibit 3(a) to Form 10-K for the fiscal year
ended December 26, 1992.)
3(ii) By-laws of the Corporation as amended to date. (Exhibit 3(b) to Form
10-K for the fiscal year ended December 30, 1989.)
4(a)(1) Rights Agreement dated as of July 20, 1988, between the Registrant
and The Chase Manhattan Bank, N.A., as Rights Agent. (Exhibit 1 to Form 8-K
dated July 29, 1988.)
4(a)(2) Agreement dated as of March 28, 1991, amending Rights Agreement dated
as of July 20, 1988, between the Registrant and The Chase Manhattan Bank,
N.A., as Rights Agent. (Exhibit 4(i)(i) to Form 10-K for the fiscal year ended
December 29, 1990.)
4(b)(1) Credit Agreement dated as of September 28, 1992, among the
Registrant, five banks, and Bankers Trust Company as Agent. (Exhibit 10.1 to
Registration Statement No. 33-52642 on Form S-3.)
4(b)(2) First Amendment to Credit Agreement dated as of September 1, 1994,
among the Registrant, five banks, and Bankers Trust Company as Agent.
(Exhibit 4(b)(2) to Form 10-K for the fiscal year ended December 31, 1994.)
*4(b)(3) Second Amendment to Credit Agreement dated as of May 18, 1995, among
the Registrant, five banks, and Bankers Trust Company as Agent.
+10(a) 1983 Stock Option Plan of Crompton & Knowles Corporation, as amended
through April 14, 1987. (Exhibit 10(c) to Form 10-Q for the quarter ended
March 28, 1987.)
+10(b) Amendments to Crompton & Knowles Corporation Stock Option Plans
adopted February 22, 1988. (Exhibit 10(d) to Form 10-K for the fiscal year
ended December 26, 1987.)
+10(c) Amended Annual Incentive Compensation Plan for "A" Group of Senior
Executives dated January 24, 1994. (Exhibit 10(d) to Form 10-K for the fiscal
year ended December 25, 1993.)
+10(d) Summary of Management Incentive Bonus Plan for selected key management
personnel. (Exhibit 10(m) to Form 10-K for the fiscal year ended December 27,
1980.)
+10(e) Supplemental Medical Reimbursement Plan. (Exhibit 10(n) to Form 10-K
for the fiscal year ended December 27, 1980.)
+10(f) Supplemental Dental Reimbursement Plan. (Exhibit 10(o) to Form 10-K
for the fiscal year ended December 27, 1980.)
+10(g) Employment Agreement dated February 22, 1988, between the Registrant
and Vincent A. Calarco. (Exhibit 10(j) to the Form 10-K for the fiscal year
ended December 26, 1987.)
+10(h) Form of Employment Agreement entered into in 1988, 1989, 1992, 1994
and 1996 between the Registrant or one of its subsidiaries and nine of the
executive officers of the Registrant. (Exhibit 10(k) to Form 10-K for the
fiscal year ended December 26, 1987.)
*+10(i) Amended Supplemental Retirement Agreement dated October 18, 1995
between the Registrant and Vincent A. Calarco.
*+10(j) Form of Amended Supplemental Retirement Agreement dated October 18,
1995 between the Registrant and three of its executive officers.
*+10(k) Form of Supplemental Retirement Agreement dated October 18, 1995
between the Registrant and five of its executive officers.
+10(l) Supplemental Retirement Agreement Trust Agreement dated October 20,
1993 between the Registrant and Shawmut Bank, N.A. (Exhibit 10(l) to
Form 10-K for the fiscal year ended December 25, 1993.)
+10(m) Amended Benefit Equalization Plan dated October 20, 1993. (Exhibit
10(m) to Form 10-K for the fiscal year ended December 25, 1993.)
+10(n) Amended Benefit Equalization Plan Trust Agreement dated October 20,
1993 between the Registrant and Shawmut Bank, N.A. (Exhibit 10(n) to
Form 10-K for the fiscal year ended December 25, 1993.)
+10(o) Amended 1988 Long Term Incentive Plan. (Exhibit 10(o) to Form 10-K
for the fiscal year ended December 25, 1993.)
10(p) Trust Agreement dated as of May 15, 1989, between the Registrant and
Shawmut Worcester County Bank, N.A. and First Amendment thereto dated as of
February 8, 1990. (Exhibit 10(w) to Form 10-K for the fiscal year ended
December 30, 1989.)
+10(q) Form of 1992 - 1994 Long Term Performance Award Agreement. (Exhibit
10(y) to Form 10-K for the fiscal year ended December 28, 1991.)
+10(r) Crompton & Knowles Corporation Restricted Stock Plan for Directors
approved by the stockholders on April 9, 1991. (Exhibit 10(z) to Form 10-K
for the fiscal year ended December 28, 1991.)
*+10(s) Amended 1993 Stock Option Plan for Non-Employee Directors.
*11 Statement re computation of per share earnings.
*13 1995 Annual Report to Stockholders of Crompton & Knowles Corporation.
(Not to be deemed filed with the Securities and Exchange Commission except
those portions expressly incorporated by reference into this report on Form
10-K.)
*21 Subsidiaries of the Registrant.
*23 Consent of independent auditors.
*24 Power of attorney from directors and executive officers of the Registrant
authorizing signature of this report. (Original on file at principal executive
offices of Registrant.)
*27 Financial Data Schedule for the fiscal year ended December 30, 1995.
*29 Annual Report on Form 11-K of Crompton & Knowles Corporation Employee
Stock Ownership Plan for the fiscal year ended December 31, 1995.
* Copies of these Exhibits are annexed to this report on Form 10-K provided
to the Securities and Exchange Commission and the New York Stock Exchange.
+ This Exhibit is a compensatory plan, contract or arrangement in which one
or more directors or executive officers of the Registrant participate.
(b) There were no reports on Form 8-K filed during the last quarter of the
period covered by this report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
CROMPTON & KNOWLES CORPORATION
(Registrant)
Date: March 29, 1996 By: /s/ Charles J. Marsden
Charles J. Marsden
Vice President-Finance
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 date indicated.
Name Title
Vincent A. Calarco* Chairman of the Board,President, and Director
(Principal Executive Officer)
Charles J. Marsden* Vice President-Finance and Director
(Principal Financial Officer)
Peter Barna* Treasurer (Principal Accounting Officer)
James A. Bitonti* Director
Robert A. Fox* Director
Roger L. Headrick* Director
Leo I. Higdon, Jr.* Director
Michael W. Huber* Director
C. A. Piccolo* Director
Patricia K. Woolf* Director
Date: March 29, 1996 By: /s/ Charles J. Marsden
Charles J. Marsden
as attorney-in-fact
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENT SCHEDULE
Board of Directors
Crompton & Knowles Corporation:
Under date of January 24, 1996, we reported on the consolidated balance sheets
of Crompton & Knowles Corporation and subsidiaries as of December 30, 1995 and
December 31, 1994, 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 30, 1995, as contained in the 1995 Annual
Report to Stockholders. These consolidated financial statements and our
report thereon are incorporated by reference in the Annual Report on Form 10K of
Crompton & Knowles Corporation for the fiscal year 1995. In connection with
our audits of the aforementioned consolidated financial statements, we also
have audited the financial statement schedule as listed in the accompanying
index. This financial statement schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion on this
financial statement schedule based on our audits.
In our opinion, such financial schedule, when considered in relation to the
basic consolidated financial statements taken as a whole, presents fairly, in
all material respects, the information set forth therein.
/s/ KPMG Peat Marwick LLP
Stamford, Connecticut
January 24, 1996
SCHEDULE II
CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES
Valuation and Qualifying Accounts
(In thousands of dollars)
Additions
Balance at charged to Balance
beginning costs and at end
of year expenses Recurring Other of year
Fiscal Year ended
December 30, 1995
Allowance for
doubtful accounts $3,829 $ 707 $(1,297)(1) $ 30(3) $3,269
Accumulated amortization
of costin excess of
acquired net assets 6,622 1,591 80(2) (12)(4) 8,281
Accumulated amortization
of other intangible assets 1,505 240 - (522)(4) 1,223
Fiscal Year ended
December 31, 1994
Allowance for
doubtful accounts $4,072 $ 84 $ (349)(1) $ 22(3) $3,829
Accumulated amortization
of cost in excess of
acquired net assets 5,456 1,097 101 (2) (32)(4) 6,622
Accumulated amortization
of other intangible assets 1,239 266 - - 1,505
Fiscal Year ended
December 25, 1993
Allowance for
doubtful accounts $3,736 $ 483 $ (147)(1) $ - $4,072
Accumulated amortization
of costin excess of
acquired net assets 4,510 963 (17)(2) - 5,456
Accumulated amortization
of other intangible assets 996 285 (42)(2) - 1,239
(1)Represents accounts written off as uncollectible (net of recoveries), and
the translation effect of accounts denominated in foreign currencies.
(2)Represents the translation effect of intangible assets denominated in
foreign currencies.
(3)Represents allowance related to the acquisition of Killion Extruders, Inc.
in 1995 and Egan Machinery in 1994.
(4)Represents intangible asset retirements.