ZEMEX CORPORATION
1994 ANNUAL REPORT
1994 Growth
Investment in Alumitech
Acquisition of Greenback
Acquisition of talc operations
successful public offering
raises $18.5 million
Earnings per share up 267%
Net income up 337%
1995 Objectives
Complete expansion programs currently in place for feldspar,
mica and metal powder facilities
Begin large scale commercial production at Alumitech
Increase international sales
Seek new acquisitions and
business opportunities
Financial Highlights
1994 1993
1992
Summary of Operations
Net Sales
$55,306,000$47,958,000$42,020,000 Income from
Continuing
Operations 6,250,0003,188,000 838,000
Net Income 6,250,0001,852,000
949,000 Capital Expenditures 3,077,000 2,670,000
1,049,000
Financial Position at
Year End
Working Capital $26,046,000 $9,288,000
$9,431,000 Shareholders' Equity
54,052,00026,530,00028,381,000
Per Common Share
Net Income $1.15 $.43 $.23
ShareholdersO Equity 7.54 5.85
6.32
Average Common Shares and
Common Share
Equivalents Outstanding 5,421,533 4,292,583 4,127,694
Common Shares Outstanding
at Year End 7,168,153 4,535,283
4,491,834
To Our Shareholders
Two years ago, Zemex redefined its corporate strategy to
focus on improving and expanding its core businesses,
acquiring new assets and pursuing new business
opportunities. To this end, the results for the year
ended December 31, 1994 reflect the initial success of
this new strategy: net income of $6.25 million or $1.15
per share, and a substantially strengthened balance
sheet.
The overall improvement in the operating results is due
to increased sales volumes and decreased operating costs
in
all segments, as well as the introduction of new value
added products and the contribution of new businesses
acquired in 1994. To maintain and increase the rate of
growth achieved in 1994, the CorporationOs existing
operating groups have implemented programs which will
generate substantial revenue in 1995 and beyond.
Projects currently underway to enhance production and
profitability in the industrial minerals group include:
an expansion and modernization of the sodium feldspar
facility in Spruce Pine, North Carolina scheduled to be
completed by the fourth quarter of 1995 which will
increase capacity by 130,000 tons, potentially add annual
incremental revenue of $8.5 millon and decrease operating
costs by approximately 10-15%;
a new, more modern and efficient potassium feldspar
mine to supply the processing facility in Monticello,
Georgia;
an expansion at the mica processing plant in
Boucherville, Quebec which will increase capacity by
approximately 12,000 tons or 45% and provide significant
revenue growth potential; and
the introduction of new surface modified specialty
products by the recently acquired talc group.
The metal powders group will also grow dramatically in
1995 and 1996.
The copper powder plant purchased in September 1994 is
anticipated to generate incremental revenue of
approximately $8 million in 1995, and the atomized steel
product line is showing signs that it will yield
substantial revenue growth in 1995. Plans for future
additional capacity are being designed to meet
anticipated volume requirements in 1996 and beyond. To
further strengthen our position as a major U.S. supplier
of metal powders, and to benefit our customer base, a
metal powder blending facility is being constructed in
St. Mary's, Pennsylvania, the heart of the powdered
metallurgical industry, and is scheduled for completion
in the second quarter of 1995.
In addition to the growth from the core businesses, Zemex
is very optimistic about its investment in Alumitech,
Inc. which, in February 1995, was increased from 42% to
73%. As a result of this increased ownership, AlumitechOs
operating results will be consolidated going forward. In
1995, this will have the effect of increasing revenues by
more than $10 million and contributing to the growth in
operating income. During 1995, Alumitech will focus on
optimizing its existing facility and bringing its process
to full commercial operation. After developing a constant
source of feed, the next phase of growth for Alumitech
will come from the construction of a large scale
integrated plant. Upon completion, it is anticipated that
such a facility would generate incremental revenues in
excess of $18 million per year.
The Corporation continues to aggressively pursue
acquisition opportunities. ZemexOs acquisition strategy
focuses on acquiring operations that are currently
profitable but have the potential for significant upside
when enhanced by the skills and market positions that the
Corporation currently possesses. Management is
continually
seeking new opportunities and evaluating potential
targets.
It is the objective of Zemex and its management team to
search out opportunities to improve the profitability of
the Corporation and to improve the return on assets
currently employed. The primary objective of management
is to continue and accelerate the rate of growth of the
Corporation. With this said, the strength of the
Corporation is our employees and it is for their efforts
and enthusiasm that we are most grateful.
Richard L. Lister
President and Chief Executive Officer
Peter Lawson-Johnston
Chairman of the Board
Corporate
Overview
Feldspar
100%
The Feldspar Corporation
has operating mines and
facilities at:
Spruce Pine, North Carolina
Edgar, Florida
Monticello, Georgia
Product Groups
North America's largest
producer of feldspathic
materials
producer of clay and high purity
silica
sands
Major Products
sodium feldspar
potassium feldspar
kaolin
silica sand
mica
Markets Served
Primary
plumbing fixtures
wall and floor tile
electric porcelain
wiring devices
dinnerware
specialty glass
Markets Served
End Use
housing sector
(new and renovation)
commercial and industrial
construction
electrical/power
transmission and
distribution
1994 Highlights
10% increase in revenue
from existing facilities
increased demand for
feldspar remains strong
resulting in significant
growth potential
commenced expansion
and modernization of
Spruce Pine plant
1994 Contribution to
Product Revenues
39.2%
$21,666,000
1995 Objectives
accelerate revenue growth rate
complete expansion program in fourth quarter
expand export sales
develop new lower cost mine at Georgia
facility
Talc and Mica
100%
Suzorite Mineral Products, Inc. has operating mines
and facilities at:
Suzor Township, Quebec
Boucherville, Quebec
Diana, New York
Murphy, North Carolina
Van Horn, Texas
Product Groups
North America's only
producer of phlogopite mica
producer of talc and baryte
products
Major Products
mica
talc
baryte
Markets Served
Primary
reinforced plastics
sound dampening
asbestos replacement
ceramics
fillers
Markets Served End Use
automotive
carpet
paint
plastics
fillers
1994 Highlights
14% increase in revenue
from mica sales
acquired talc operations
sustained record of
very high growth and
profitability
dominant supplier of phlogopite mica in North
America
1994 Contribution to
Product Revenues
15.8%
$8,712,000
1995 Objectives
increase export sales
expand mica processing
capacity by 45%
develop new markets for mica
develop new talc products by
applying
proprietary surface modification
technology
Subsidiary Unit
Metal Powders
100%
Pyron Corporation has
operating facilities at:
Niagara Falls, New York
Maryville, Tennessee
Greenback, Tennessee
St. Mary's, Pennsylvania
Product Groups
producer of iron, steel,
copper, tin and alloy
metal powders
Major Products
atomized steel
atomized iron
sponge iron
copper, tin and alloy powders
distributors of nickel powder, manganese
sulphide,
etc.
Markets Served
Primary
bushings, bearings,
complex parts
Markets Served End Use
automotive industry
small appliance industry
1994 Highlights
49% increase in revenue
acquired the assets of Greenback Industries, Inc.,
a
copper powder producer
achieved largest capacity of non-ferrous metal
powders in North America
increased market demand for atomized ferrous
products
1994 Contribution to
Product Revenues
45.0%
$24,928,000
1995 Objectives
increase sales of atomized ferrous products
by 65%
complete blending facility in St. Mary's, PA
introduce new copper based products
Subsidiary Unit
Alumitech
73%
Alumitech, Inc. has
operating facilities at:
Streetsboro, Ohio
Cleveland, Ohio
Product Groups
producer/recycler of metallic and non-metallic
materials from secondary aluminum drosses and saltcake
a unique and proprietary process for recycling waste
drosses into marketable commercial products
Major Products
secondary aluminum ingots
mixed salts
high temperature insulation
abrasives
Markets Served
Primary
secondary aluminum
industry
Markets Served End Use
refractory
insulation
aluminum
1994 Highlights
achieved profitable operations
acquired ceramic fiber production facility
developed ceramic fiber insulation using ONMPO
from
the patented process
1994 Contribution to
Product Revenues
1995 Objectives
Alumitech was accounted for on an equity basis in
1994
upscale process to large reliable commercial
operation
upgrade commercial production of NMP
design new large scale integrated plant for
construction in 1996
Management's Discussion and Analysis of Financial
Condition and Results of Operations
The following is a discussion and analysis of the
financial condition and results of operations of the
Corporation for the years ended December 31, 1994, 1993,
and 1992, and certain factors that may affect the
CorporationOs prospective financial condition and
results of operations. The following should be read in
conjunction with the Consolidated Financial Statements
and related notes thereto included elsewhere herein.
Overview
The Corporation is a diversified producer of specialty
materials for a variety of industrial applications. The
Corporation operates in two principal business segments:
(1) industrial minerals, which includes The Feldspar
Corporation, Suzorite Mica Products Inc. and Suzorite
Mineral Products, Inc.; and (2) powdered metals, which
includes Pyron Corporation and Pyron Metal Powders, Inc.
In 1993, the Board of Directors refocused the
strategic
direction of the Corporation. Since then, the
Corporation
has sold certain non-core assets, and has undertaken
several strategic acquisitions and investments. In 1993,
the Corporation sold its 70% interest in Perangsang
Pasifik Senderian Berhad (OPPSBO), a tin dredging
operation in Malaysia, and its Virginia aplite facility,
and acquired Suzorite Mica Products Inc. (OSuzoriteO).
During 1994, Zemex purchased the assets of Greenback
Industries, Inc., the talc operations of Whittaker,
Clark & Daniels, Inc. and invested in Alumitech, Inc., a
company with a patented process for recycling aluminum
dross.
As a result of this strategic redirection, the
CorporationOs net sales have increased from $42.0
million in
1992 to $55.3 million in 1994, an increase of 31.6%, and
the Corporation has increased earnings from $0.9 million
in 1992 to $6.25 million in 1994.
Basis of Presentation
The Corporations acquisition of Suzorite in 1993 was
accounted for as a pooling of interests. Accordingly,
the financial results of the Corporation in all prior
fiscal periods are presented as though the Corporation
had always owned Suzorite. The CorporationOs 70%
interest in PPSB, which was sold in 1993, has been
presented separately in the CorporationOs financial
statements as a discontinued operation.
Results of Operations
Year Ended December 31, 1994 Compared to Year Ended
December 31, 1993
Net Sales 1994 1993 Change
Change
Industrial
Minerals$30,378,000$31,104,000$(726,000)(2.3)% Metal
Powders 24,928,000 16,854,000 8,074,000 47.9%
$55,306,000 $47,958,000 $7,348,000
15.3%
The CorporationOs net sales for the year ended December
31, 1994 were $55.3 million, an increase of $7.3
million, or 15.3% from 1993. The increase was
primarily the result of increased sales of the
CorporationOs feldspar, phlogopite mica, and metal
powder products, offset in part by decreased sales
resulting from the sale of the Virginia aplite facility
in the fourth quarter of 1993.
Net sales in the industrial minerals segment for
the year ended December 31, 1994 were $30.4 million, a
decrease of $0.7 million, or 2.3%, compared to 1993.
However, net sales for 1993 included $4.1 million
attributable to the Virginia aplite facility. When this
amount is excluded from the 1993 results, net sales in
the industrial minerals segment during 1994 increased by
$3.4 million or 12.5% above 1993. This increase was
primarily due to increased demand for the CorporationOs
sodium feldspar and phlogopite mica products fueled by
growth in the construction and automotive sectors of the
U.S. economy, the introduction of new products and some
price increases.
Net sales in the metal powders segment for the year
ended December 31, 1994 were $24.9 million, an increase
of $8.1 million or 47.9% from 1993. The increase was
attributable primarily to increased market acceptance of
the CorporationOs new atomized powder products and
strong demand for sponge iron powder. The asset purchase
of Greenback Industries, Inc., a copper powder producer,
contributed $3 million in incremental revenue in 1994.
Cost of Goods Sold
Cost of goods sold for the year ended December 31, 1994
was $40.6 million, an increase of $3.8 million or 10.4%
from 1993. As a percentage of net sales, cost of goods
sold decreased to 73.3% for the year ended December 31,
1994 from 76.6% in 1993. The decrease was primarily due
to fixed cost absorption associated with higher volumes
and to improvements in product mix with the introduction
of new higher value-added products. In addition, 1993
included certain non-recurring engineering and product
development costs associated with the CorporationOs
introduction of its atomized metal powder product line.
Selling, General and Administrative Expense
Selling, general, and administrative expense (OSG&A
expenseO) for the year ended December 31, 1994 increased
by 4.2% from 1993 to $6.6 million. As a percentage of
net sales, SG&A expense decreased from 13.2% in 1993 to
11.9% in 1994, reflecting the benefit derived from
higher volumes.
Depreciation, Depletion and Amortization
Depreciation, depletion and amortization for the year
ended December 31, 1994 was $2.3 million, a decrease of
$0.1 million, virtually unchanged from 1993.
Operating Income
Operating income for the year ended December 31, 1994
was $5.8 million, an increase of $4.6 million, or 372%,
from 1993. The increase was due in part to the reasons
discussed above. In addition, operating income for 1993
included restructuring charges of $1.25 million.
Excluding such restructuring charges, the increase was
$3.4 million or 135% and operating income before
restructuring charges as a percentage of net sales
increased from 5.2% in 1993 to 10.6% in 1994.
Interest Expense, Net
Interest expense for the year ended December 31, 1994
decreased by 52.6% from $0.9 million in 1993 to $0.4
million in 1994, reflecting lower levels of indebtness.
More than 50% of the CorporationOs long term debt was
repaid from the proceeds raised in the September 1994
public offering.
Provision for Income Taxes
In 1994, the Corporation realized an income tax recovery
of $1.5 million as the result of an adjustment for the
realization of a tax benefit arising from loss
carryforwards for financial statement purposes in
accordance with SFAS 109. SFAS 109 requires the
recognition of the benefit of tax loss carryforwards
with an assessment as to whether a valuation allowance
should be established for deferred tax assets. The
recognition of the $1.5 million benefit was necessitated
primarily by revisions to the estimated future taxable
income during the CorporationOs tax loss carryforward
period.
As a result of the $1.5 million tax recovery, the
Corporation's provision for income taxes for the year
ended December 31, 1994 decreased to a recovery of $0.7
million from a provision of $0.5 million in 1993.
Net Income and Earnings Per Share
As a result of the factors discussed above, net income
for the year ended December 31, 1994 was $6.25 million,
an increase of $4.4 million from 1993. As the impact of
the income tax recovery is significant, the
CorporationOs earnings per share have been restated
below under two different scenarios: (i) without the
accelerated recognition of the benefit of previous
yearsO tax loss carryforwards (i.e. before application
of SFAS 109); and (ii) on a fully taxed basis (i.e. as
though the Corporation had no tax loss
carryforwards available).
1994 1993
1992
Pre-tax Income $5,579,000
$2,322,000
$1,373,000
Primary EPS, as reported $1.15
$0.43
$0.23
EPS, without accelerated
recognition of tax loss
carryforwards $0.88 $0.43
$0.23
EPS, fully taxed $0.64
$0.34
$0.23
Year Ended December 31, 1993 Compared to Year Ended
December 31, 1992
Net Sales
The Corporation's net sales for the year ended December
31, 1993 were $48.0 million, an increase of $5.9
million, or 14.1%, compared to 1992.
Net sales in the industrial minerals segment for 1993
were $31.1 million, an increase of $1.7 million, or
5.8%, compared to 1992. This increase was primarily due
to an increase in sales volume of feldspar to the
ceramics industry. Increased sales of feldspar in 1993
offset the effect of the loss of two months of net sales
from the Virginia aplite facility, which was sold in
November 1993.
Net sales in the metal powders segment for the year
ended December 31, 1993 were $16.9 million, an increase
of $4.2 million, or 33.5%, from 1992. The increase was
primarily due to the CorporationOs success in increasing
sales from its copper powder production facility, which
was purchased in 1992, and to increased sales of other
metal powder products, particularly the Corporation's
new atomized product line, which commenced production in
1992.
Cost of Goods Sold
Cost of goods sold for the year ended December 31, 1993
was $36.7 million, an increase of $4.7 million, or
14.6%, from 1992. As a percentage of net sales, cost of
goods sold remained relatively unchanged at 76.6%.
Selling, General and Administrative Expense
SG&A expense for the year ended December 31, 1993
increased by 10.2% from 1992 to $6.3 million. As a
percentage of net
sales, SG&A expense decreased from 13.7% in 1992 to
13.2% in 1993. General corporate expenses declined as a
result of staff reductions and the CorporationOs
strategic decision to decentralize its operations by
increasing responsibility and authority at the
divisional level. The decrease in corporate expenses
during 1993 was offset by increased SG&A expense in the
CorporationOs operating divisions.
Depreciation, Depletion and Amortization
Depreciation, depletion and amortization for the year
ended December 31, 1993 decreased by 3.2% from 1992, to
$2.4 million.
Restructuring Charges
During 1993, the Corporation incurred $1.3 million in
restructuring charges. The charges related to severance
payments made to a former executive officer, additional
write-downs taken on property owned in Connecticut which
was held for resale, the closure of the Asheville, North
Carolina office and the relocation of certain senior
management to Atlanta, Georgia.
Operating Income
Operating income for the year ended December 31, 1993
was $1.2 million, a decrease of $0.5 million, or 28.8%,
from 1992. Prior to restructuring charges, operating
income was $2.5 million, an increase of $0.8 million, or
43.2%, from 1992. The market for mica and feldspathic
materials gained strength throughout 1993 and this
segment was able to maintain its operating profit.
During 1993, the metal powders segment experienced a
decline in operating income of $0.3 million, or 20.3%,
which was due to expenses incurred in the start-up of
the atomization plant. The profitability of the metal
powder operations improved slightly but was insufficient
to compensate for the startup expenses incurred.
Interest Expense, Net
Interest expense for the year ended December 31, 1993
increased by 2.3% from 1992 to $0.9 million as a result
of a modest increase in the average amount of total debt
outstanding.
Other Income
The Corporation had other income of $3.3 million in
1993, resulting primarily from a gain on the sale of the
Virginia aplite facility of $3.7 million, which was
partially offset by costs related to the acquisition of
Suzorite and other miscellaneous income and expense
items.
Provision for Income Taxes
The Corporation's provision for income taxes for the
year ended December 31, 1993 was $0.5 million, an
increase of 10.8%, from 1992. This increase related
entirely to an increase in foreign income taxes. Income
taxes on domestic income in 1993 and 1992 were offset by
the recognition of the benefit of operating loss
carryforwards in each year.
Loss from Discontinued Operations
The Corporation recorded a loss of $1.3 million from
discontinued operations in 1993, which consisted of the
CorporationOs 70% interest in a Malaysian tin dredging
company, PPSB. The loss consisted of two components: (i)
$0.1 million from operations during the year; and (ii)
$1.2 million from the disposal of these operations.
Net Income
As a result of the factors discussed above, net income
for the year ended December 31, 1993 was $1.9 million,
an increase of $0.9 million, or 95.2%, from 1992.
Liquidity and Capital Resources
The Corporation has principally funded its extraction
and processing activities through cash flow from
operations, bank debt and the sale of common stock and
warrants. During the most recent three-year period ended
December 31, 1994, the Corporation funded all capital
acquisitions and debt reduction from a combination of
additional debt, cash flow from operations, proceeds
from the sale of operations not considered consistent
with its strategic focus and, in addition, in September
1994 the Corporation completed a public offering,
raising net proceeds of approximately $18.5 million.
These funds were utilized in part to repay long term
debt and fund acquisitions.
In 1994 there were two asset aquisitions that
impacted liquidity. The September 15, 1994 acquisition
of the assets of Greenback Industries, Inc. and the
December 1, 1994 acquisition of certain assets of
Whittaker, Clark & Daniels Inc. have, at December 31,
1994, resulted in an increase in non-cash working
capital of approximately $5.0 million. In addition, the
prepayment of certain long term debt facilities resulted
in an increase of $3.4 million in working capital by
eliminating the related current portion of the long term
debt.
Cash Flow from Operations
The Corporation had $26.0 million of working capital at
December 31, 1994, compared to working capital of $9.3
million at December 31, 1993. Net cash provided by
operating activities for the year ended December 31,
1994 was $2.6 million, up $0.8 million or 50% relative
to 1993.
Financing Agreements
As a result of a successful public offering in September
1994, the Corporation raised $18.5 million net and paid
down more than 50% of its long term debt, including its
revolving credit loan and Suzorite Mica Products Inc.Os
term credit facility.
Pyron Metal Powders, Inc. has issued two promissory
notes to the former owners of Greenback in connection
with the acquisition of those operations. One promissory
note with an aggregate principal amount outstanding as
of December 31, 1994 of $650,000 bears interest at 7%
with principal due in two equal instalments of $325,000
on September 15, 1995 and 1996, respectively. A second
note with a principal amount outstanding as of December
31, 1994 of $413,913 is non-interest bearing with
monthly principal payments of $12,500 due commencing
October 15, 1994 until the final
payment of $12,313 due September 15, 1997.
Pyron Corporation (OPyronO) entered into a lease
agreement on November 29, 1989 with the Niagara County
Industrial Development Agency (the OAgencyO) to
partially finance the construction of a new
manufacturing facility, acquire and install equipment
and machinery, and renovate the existing Pyron facility
for the purpose of manufacturing atomized steel powders.
The agreements authorized the Agency to issue and sell
Industrial Development Revenue Bonds in the aggregate
principal amount of $7.7 million to provide funds for
the project. While the bonds are not the obligation of
Pyron, the lease agreement requires Pyron to make
quarterly rental payments to the Agency equal to the
debt service under the sinking fund requirements and
interest on the outstanding principal. The amount
outstanding at December 31, 1994 was $5.1 million.
PyronOs payments under the lease agreement are $0.5
million annually until paid. The bonds bear interest at
a variable rate not to exceed 15.0% per annum. The bond
rate at December 31, 1994 was 5.65%, at December 31,
1993 was 3.3% and at December 31, 1992 was 4.4%. Pyron
has the option to convert the bonds to a fixed interest
rate at any time during the lease term. Under the lease
agreement, Pyron may purchase the facility at any time
during the lease term, which expires November 1, 2004,
by paying the outstanding principal amount of the bonds
plus $1.
At December 31, 1994, the current portion of long
term debt for the Corporation was $1.1 million. In March
1995 the Corporation entered into a $25 million credit
agreement with two banks. The agreement provides for an
acquisition facility, a capital expenditure facility and
an operating facility. Outstanding amounts bear interest
at rates which can vary from Libor plus 1.25% to Libor
plus 2.25%, depending on certain financial statistics.
The credit agreement is secured by certain assets of the
Corporation. As of March 21, 1995, no draws had been
made under the facility.
Capital Expenditures
The Corporation's primary capital activities in the past
involved the acquisition and development of industrial
materials properties and facilities and necessary
capital investments to maintain
operating viability and meet environmental, health and
safety standards at its existing operations. During
1994, capital expenditures were $3.1 million compared to
$2.7 million and $1.4 million for the years ended
December 31, 1993 and 1992, respectively.
The Corporation currently has several major capital
programs underway: the expansion of the Spruce Pine,
North Carolina facility, the expansion of the
Boucherville, Quebec plant, and the
construction of a blending facility in St. Mary's,
Pennsylvania. The programs, which will require 1995
expenditures of approximately $16 million, will be
funded by cash on hand, cash flow from operations and
debt.
Although the CorporationOs capital budgets provide
for certain reclamation and environmental compliance
activities, management believes that it is
environmentally responsible and that the cost of the
CorporationOs environmental compliance should be minor
in nature and have no material adverse effect on the
Corporation's results of operations or financial
condition in 1995.
The Corporation is not currently party to any
definitive acquisition agreements with respect to
additional property or other acquisitions. The
Corporation will, however, continue to monitor potential
strategic acquisitions that would enhance its current
activities.
Seasonality and Inflation
Sales of the Corporation's products are moderately
seasonal. Inflation in recent years has not adversely
affected the Corporation's results of operations or
costs, and is not expected to adversely affect the
Corporation in the future unless it grows substantially
and the markets for industrial minerals and metal
powders suffer from a negative impact on the economy in
general.
Capital Stock.
The capital stock of Zemex Corporation is traded on the
New York Stock Exchange. Warrants, which were part of
the Stock
Rights Offering in 1990 (see Note 9 to the Corporation's
consolidated financial statements), are traded on the
National Association of Securities Dealers Automated
Quotation (ONASDAQO) system. The price range in which
the stock and warrants has traded is shown for the past
two years in the following tables.
Capital Stock Prices
1994 Q1 Q2 Q3 Q4 Year
High 7 11 7/8 12 1/4 11 12
1/4 Low 6 1/4 6 1/8 9 5/8
7 3/4 6 1/8
Close 6 3/8 11 1/2 10 3/4 8 5/8
85/8
1993 Q1 Q2 Q3 Q4
Year High 5 7/8 6 5/8 8 7
7/8 8 Low 4 1/2 5 7/8 6 5/8 6
3/4 4 1/2
Close 4 1/2 6 5/8 7 1/2 6 3/4
6 3/4
In the fourth quarter of each of 1994, 1993 and 1992,
the Corporation declared a 2 percent stock dividend.
As of December 31, 1994, there were
approximately 1,540 holders of record of the
Corporation's capital stock. This number includes
shares held in nominee name and, thus, does not reflect
the number of holders of a beneficial interest in the
stock.
Warrant Prices
1994 Q1 Q2 Q3 Q4 Year
High 7/8 2 1/2 2 3/4 2 1/2
2
3/4 Low 1/4 3/8 1 l/4
5/8 1/4
Close 3/8 2 1/4 2 1/4 5/8
5/8
1993 Q1 Q2 Q3 Q4
Year High 1/4 1/2 7/8
1 1 Low 1/4 1/4 1/2
7/8 1/4
Close 1/4 1/2 7/8 7/8
7/8
The warrants began trading on the NASDAQ under the
symbol OZMEXWO in July 1990 (see Note 9 to the
Corporation's consolidated financial statements).
Independent AuditorsO Report
To the Shareholders and the Board of Directors of Zemex
Corporation
We have audited the accompanying consolidated balance
sheets of Zemex Corporation and Subsidiaries as of
December 31, 1994 and 1993 and the related consolidated
statements of income, shareholdersO equity, and cash
flows for each of the three years in the period ended
December 31, 1994. These financial statements are the
responsibility of the CorporationOs management. Our
responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards in the United States. 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 our audits provide a reasonable basis for our
opinion.
In our opinion, such consolidated financial
statements present fairly, in all material respects, the
financial position of Zemex Corporation and Subsidiaries
as of December 31, 1994 and 1993 and the results of
their operations and their cash flows for each of the
three years in the period ended December 31, 1994 in
conformity with generally accepted accounting principles
in the United States.
Deloitte & Touche
Chartered Accountants
Toronto, Ontario
February 15, 1995
Management Report
The Management of Zemex Corporation and Subsidiaries has
the responsibility for preparing the consolidated
financial statements presented in this Annual Report and
for their accuracy and integrity. The statements have
been prepared in conformity with generally accepted
accounting principles in the United States, and include
informed judgements and estimates as required. Other
financial information in this Annual Report is
consistent with the financial statements.
The Zemex Corporation system of internal controls
is designed to provide reasonable assurance, at a
justifiable cost, as to the reliability of financial
records and reporting and the protection of assets. This
system includes organizational arrangements with clearly
defined lines of responsibility.
Deloitte & Touche, independent auditors, have
audited the consolidated financial statements of Zemex
Corporation and their opinion is above.
Zemex Corporation has formal standards of corporate
conduct and policies regarding high standards of ethics
and financial integrity. These policies have been
disseminated to appropriate employees and internal
control procedures provide reasonable assurance that
violations of these policies, if any, are detected.
Allen J. Palmiere Richard L. Lister
Chief Financial Officer President and Chief Executive
Officer
Audit Committee Report
The Audit Committee of the Board of Directors is
composed of three independent directors, Patrick H.
O'Neill, Chairman, Thomas B. Evans, Jr. and John M.
Donovan. The Committee held four meetings during 1994.
The Audit Committee oversees the financial reporting
process of the Corporation on behalf of the Board of
Directors. In fulfilling its responsibility, the
Committee recommended to the Board of Directors, subject
to shareholder approval, the selection of the
CorporationOs independent auditors. The Audit Committee
met with Management and representatives of the auditors,
Deloitte & Touche, to review accounting, auditing and
financial reporting matters. The Committee met with
Deloitte & Touche representatives without Management
present.
Patrick H. OONeill
Chairman, Audit Committee
Zemex Corporation
Consolidated Balance Sheets
December 31
1994 1993
Assets
Current Assets
Cash and cash equivalents
$8,343,000
$3,796,000
Accounts receivable
(less allowance for doubtful
accounts of $414,000
at December 31, 1994
and $370,000
at December 31, 1993)
(Note 15) 10,678,000
6,949,000
Inventories (Note 3) 16,490,000
8,687,000
Prepaid expenses 660,000
480,000
36,171,000
19,912,000 Investment (Note 2) 2,286,000
D
Property, Plant and Equipment
(Notes 4 and 8) 29,020,000
25,358,000
Other Assets (Note 5) 3,387,000
3,144,000
$70,864,000
$48,414,000
Liabilities and ShareholdersO Equity
Current Liabilities
Bank indebtedness $180,000
$595,000
Accounts payable and accrued
liabilities 8,474,000
5,433,000
Accrued income taxes 397,000
70,000
Current portion of long term debt
(Note 8) 1,074,000
4,526,000
10,125,000
10,624,000 Long Term Debt (Note 8) 5,461,000
8,735,000
Other Non-Current Liabilities 549,000 482,000
Deferred Income Taxes (Note 6) 677,000 2,043,000
16,812,000 21,884,000
Commitments (Notes 4 and 11)
ShareholdersO Equity
Common stock (Note 9) 7,168,000 4,535,000
Paid-in capital 38,291,000 17,910,000
Retained earnings 11,668,000 6,738,000
Note receivable from shareholder
(Note 9) (1,749,000) (1,749,000)
Cumulative translation adjustment(1,326,000) (904,000)
54,052,000 26,530,000
$70,864,000 $48,414,000
See Notes to the Consolidated Financial Statements
Zemex Corporation
Consolidated Statements of ShareholdersO Equity
Years ended December 31
Note
Receivable CommonPaid-in-
Retained fromCumulative
Stock Capital
EarningsShareholderTranslationTotal
Balance at
December
31, 1991$3,988,000$16,765,000$7,508,000$D
$128,000$28,3
89,000
Stock
Issued
to
Shareholder
(Note 9)357,0001,392,000 D(1,749,000) D D
Stock
Dividend
(Note 9) 59,000 286,000(346,000) D D
(1,000)
Net Income
for the YearD D 949,000 D D
949,000
Translation
AdjustmentD D D D
(956,000)(956,000)
Balance at
December 31,
1992
4,404,00018,443,0008,111,000(1,749,000)(828,000)28,3
81,000
Stock
Issued
to Former
Officer 50,000 300,000 D D D
350,000
Stock Dividend
(Note 9) 81,000 520,000(604,000) D D
(3,000)
Cash Dividend
Paid by
Suzorite
Mica Products
Inc. (Note 9)D D (2,621,000) D D
(2,621,0 00)
Reduction of
Capital by
Suzorite
Mica Products
Inc. (Note 9) D(1,353,000) D D
D(1,353,0
00)
Net Income
for the YearD D 1,852,000 D
D1,852,000
Translation
AdjustmentD D D D
(76,000)(76,000)
Balance at
December 31,
1993
4,535,00017,910,0006,738,000(1,749,000)(904,000)26,5
30,000
Stock Issued
for Cash
(Note 9)2,348,00018,174,000D D D
20,522,000
Stock
Dividend
(Note 9)146,0001,171,000(1,320,000) D D
(3,000)
Stock
Options
and
Warrants
Exercised
(Note 9) 56,000 357,000 D D D
413,000
Stock
issued
in
Connection
with talc
Purchase
(Note 2)136,0001,091,000 D D D
1,227,000
Stock
Purchased
for
Cancellation
(Note 9)(53,000)(412,000) D D D
(465,000)
Net Income
for the YearD D 6,250,000 D D
6,250,000
Translation
AdjustmentD D D
D(422,000)(422,000)
Balance at
December 31,
1994
$7,168,000$38,291,000$11,668,000$(1,749,000)$
(1,326,000)$54,052,000
See Notes to the Consolidated Financial
Statements Zemex Corporation
Consolidated Statements of Income
Years ended December 31
1994 1993
1992 Net Sales
$55,306,000$47,958,000$42,020,000 Costs and Expenses
Cost of goods sold
40,552,00036,742,00032,061,000
Selling, general and
administrative 6,598,000 6,331,000
5,745,000
Depreciation, depletion and
amortization 2,315,000 2,398,000
2,477,000
49,465,00045,471,00040,283,000 Operating Income before
Restructuring Charges 5,841,000 2,487,000
1,737,000 Restructuring Charges (Note 10) D
1,250,000 D Operating Income 5,841,000 1,237,000
1,737,000
Other Income (Expenses)
Interest expense, net (Note
8)(425,000)(896,000)(876,000) Gain on sale of
investment
(Note 2) D D
205,000
Other, net (Notes 2 and 10) 163,000 3,317,000
196,000 (262,000) 2,421,000
(475,000)
Income before Provision
for Income Taxes 5,579,000 3,658,000
1,262,000
(Recovery of) Provision for
Income Taxes (Note 6) (671,000) 470,000
424,000
Income from Continuing Operations
6,250,0003,188,000838,000
Discontinued Operations (Note 2)
Income (loss) from operations,
net of income taxes:
1994 and 1993 D nil;
1992 D $120,000 D (89,000)
111,000
Loss on disposal D (1,247,000) D
Income (loss) from discontinued
operations D (1,336,000)
111,000
Net Income $6,250,000$1,852,000
$949,000
Income (Loss) per Share
Continuing operations $1.15 $.74
$.20
Discontinued operations D (.31)
.03
Net $ 1.15 $.43
$.23
Average Common Shares and
Common Share Equivalents
Outstanding 5,421,533 4,292,583
4,127,694
See Notes to the Consolidated Financial Statements
Zemex Corporation
Consolidated Statements of Cash Flows
Years ended December 31
1994 1993
1992 Cash Flows from Operating
Activities
Income from continuing
operations$6,250,000$3,188,000$838 ,000
Adjustments to reconcile income
from continuing operations
to net cash
flows from continuing
operating activities
Depreciation, depletion and
amortization 2,315,000 2,398,000
2,477,000 Loss on assets held for resale and gain
on investment (Notes 2 and 10)D 300,000
(205,000) (Decrease) increase in deferred income
taxes (1,366,000) 393,000
275,000 Share of net income of investee(267,000)
D D Loss (gain) on sale of property,
plant and equipment 15,000(3,689,000)
D Other assets (63,000) (48,000)
(152,000) Increase (decrease) in
non-current liabilities 67,000 62,000
(141,000) Changes in non-cash working
capital items (Note
14)(4,311,000)(844,000)(1,179,000)
Net cash provided by operating
activities 2,640,000 1,760,000
1,913,000
Cash Flows from Investing
Activities
Additions to property, plant and
equipment
(3,077,000)(2,670,000)(1,049,000) Assets acquired in
connection
with acquisitions (Note 2)(4,888,000)D
(344,000) Retirement of property, plant and
equipment D D
40,000
Proceeds from sale of assets
(Note 2) 78,000 5,479,000
681,000 Additions to assets held for resaleD
(134,000)(646,000) Investment (Note 15)
(2,019,000) D D
Promissory notes (371,000) D D
Net cash provided by (used in)
investing activities(10,277,000)
2,675,000(1,318,000)
Cash Flows from Financing
Activities
Proceeds from long term debt 266,000 4,827,000 D
Decrease in restricted cash D D
269,000 Proceeds (payments) net, on bank
indebtedness (415,000)
520,000(1,676,000) Repayment of long term
debt(8,094,000)(3,322,000)(811,000) Cash paid in lieu
of
fractional shares (3,000) (3,000)
(2,000)
Due to an affiliated company D
D(1,373,000)
Dividend paid (Note 9) D(2,621,000) D
Issuance of common stock (Note 9)20,935,000350,000 D
Purchase of common stock for ]
cancellation (Note 9) (465,000) D D
Reduction of common stock (Note 9)D (1,353,000) D
Net cash provided by (used in)
financing activities
12,224,000(1,602,000)(3,593,000)
Effect of Exchange Rate
Changes on Cash (40,000) (26,000)
(91,000)
Net Increase (Decrease) in
Cash from Continuing
Operations 4,547,000 2,807,000(2,907,000)
Net Cash Provided by (Used In)
Discontinued Operations D (207,000) 16,000
Net Increase (Decrease) in
Cash4,547,0002,600,000(2,891,000) Cash and Cash
Equivalents at
Beginning of Year 3,796,000 1,196,000 4,087,000
Cash and Cash Equivalents at
End of Year $8,343,000$3,796,000$1,196,000
Supplemental Disclosure of
Cash Flow Information
Income taxes paid $233,000 $D
$215,000 Interest paid 573,000
891,000 835,000
Supplemental Disclosure of
Non Cash Activities
Notes issued in connection
with purchase of assets
(Note 2) $1,102,000 $D
$43,000 Stock issued in connection with
talc purchase (Note 2) 1,227,000 D
D Assumption of liabilities in
connection with asset
purchases 793,000 D
1,015,000
See Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
1. Summary of Significant Accounting Policies
a. Principles of Consolidation
The consolidated financial statements include the
accounts of Zemex Corporation and its wholly-owned
subsidiaries (the "Corporation"). All material
intercompany transactions have been eliminated. As
discussed in Note 2, the acquisition of Suzorite Mica
Products Inc. ("Suzorite") has been accounted for as a
pooling of interests and the sale of the Corporation's
70% interest in Perangsang Pasifik Sdn. Bhd. ("PPSB"), a
tin dredging operation in Malaysia, has been reported as
a discontinued operation. The Corporation accounts for
its 42% equity interest in Alumitech, Inc. acquired in
June 1994 on an equity basis.
b. Inventories
Inventories are stated at the lower of cost or market
and are computed on the average cost method. It is not
practical to segregate finished products from ore and
concentrates. Supplies are stated at cost on the first-
in, first-out or average cost method.
c. Property, Plant and Equipment
Property, plant and equipment are recorded at cost.
Repairs and maintenance are charged to expense as
incurred. Expenditures for major renewals and
improvements are capitalized. When assets are sold or
otherwise retired, the cost and accumulated depreciation
or depletion are removed from the accounts and any gain
or loss is included in results of operations. Provisions
for depreciation are based upon estimated useful lives,
using principally the straightline method. Depletion of
mining properties and depreciation of other mining
assets are computed on the unit-ofproduction method,
except in the case of the Corporation"s Suzorite
operation where the estimated reserves exceed the
expected production during the term of the mining lease.
The Suzorite mining lease rights and deferred costs,
including all preproduction and set-up costs, are
amortized using the straight-line method over the term
of the mining lease.
d. Postretirement Benefits
Pension Plans
The funding policy of the Corporation, generally, is to
contribute annually at a rate that is intended to
provide for the cost of benefits earned during the year
and which will amortize prior service costs over periods
of 10 to 30 years, subject to Internal Revenue Service
limits for deductible contributions.
Healthcare and Other Postretirement Benefits Other Than
Pensions
Effective January 1, 1993, the Corporation adopted
Statement of Financial Accounting Standards (SFAS) No.
106 D "Employees" Accounting for Postretirement Benefits
Other Than PensionsO. This Statement requires the
accrual of all postretirement benefits other than
pensions during the years in which employees render the
necessary services to be entitled to receive such
benefits. In prior years, the expense was recognized by
expensing annual insurance premiums when paid. The 1994
and 1993 amounts include the present expense and the
transition liability which is being amortized over
twenty years as allowed by the SFAS No. 106 (Note 7).
e. Foreign Currency Translation
The functional currency for the CorporationOs foreign
operations is the local currency. Foreign currency
assets and liabilities are translated using the exchange
rates in effect at the balance sheet date. The effect of
exchange rate fluctuations on translating foreign
currency assets and liabilities into U.S. dollars is
accumulated as part of the cumulative translation
adjustment component of shareholders' equity. Results of
operations and cash flows are translated using the
average exchange rates during the year. Gains and losses
from foreign currency transactions are included in net
income for the year.
f. Research and Development Expense
Research and development expense was $315,000 in 1994,
$371,000 in 1993 and $280,000 in 1992.
g. Provision for Future Reclamation Costs
Costs for future reclamation have been provided for
based upon estimated future reclamation costs allocated
over the expected productive life of the quarries.
h. Income Taxes
Effective January 1, 1993, the Corporation adopted
Statement of Financial Accounting Standards (SFAS) No.
109 D "Accounting for Income Taxes". This Statement
requires the liability method of accounting for income
taxes rather than the deferral method previously used.
Because of the valuation reserves established on the
deferred tax asset related to the net operating loss
carry-forwards, the cumulative effect of this accounting
change and the impact on the 1993 income tax provision
was not material.
i. Earnings Per Share
Earnings per share is based upon the weighted average
number of common share and common share equivalents
outstanding. Common share equivalents include stock
options issued under employee stock option plans (Note
9), warrants issued under a stock rights offering in
1990 (Note 9), warrants issued as partial consideration
for the acquisition of Suzorite (Note 2) and stock
issued under the Key Executive Stock Purchase Plan (Note
9).
j. Bond Issuance Costs
Costs associated with the issuance of Industrial Revenue
Bonds were deferred, are being amortized over the term
of the bonds on a straight-line basis and the
unamortized balance is included in other assets.
k. Other Assets
Other assets include assets held for sale which are
stated at the lower of cost or estimated net realizable
value. In determining the estimated net realizable
value, the Corporation deducts from the estimated
selling price the projected costs to bring the assets
into a saleable condition, to dispose of the assets and
to hold the property to an expected date of sale.
Intangible assets are evaluated periodically and, if
conditions warrant, an impairment valuation is provided.
l. Cash Equivalents
For purposes of the consolidated statement of cash
flows, highly liquid investments with original
maturities of three months or less, when purchased, are
considered as cash equivalents.
2. Acquisitions and Dispositions
Acquisitions
Investment in Alumitech, Inc.
In June 1994, the Corporation acquired 42% of the
outstanding capital stock of Alumitech, Inc.
("Alumitech") by investing $2,000,000 to acquire
treasury stock of Alumitech. Alumitech, an aluminum
dross processor, has developed proprietary technology
that enables it to convert 100% of its dross feed into
marketable products. As part of the transaction the
Corporation acquired call options which enable it to
acquire an additional 30% of the outstanding capital
stock of Alumitech for 412,500 shares of common stock of
Zemex. The Corporation has granted a put option whereby
it may be obligated to purchase an additional 30% of the
outstanding capital stock of Alumitech for 105,000
shares of common stock of Zemex. Puts and calls
representing 15% of the capital stock of Alumitech have
been granted to or received from Dundee Bancorp Inc.
("Dundee"), which owns approximately 30% of the
outstanding common stock of the Corporation (Note 17).
Acquisition of the assets of Greenback Industries, Inc.
In September 1994, the Corporation, through its wholly
owned subsidiary, Pyron Metal Powders, Inc., acquired
the assets and assumed certain liabilities of Greenback
Industries, Inc. ("Greenback"). Consideration for the
purchase was $500,000 in cash, the issuance of two
promissory notes having principal amounts of $650,000
and $451,563, respectively, and the assumption of
certain current liabilities aggregating $526,000. The
Greenback facilities provide the Corporation with
increased capacity to produce powdered copper as well as
powdered tin and powdered copper and tin alloys.
Acquisition of the talc operations of Whittaker, Clark &
Daniels, Inc.
In December 1994, the Corporation acquired from
Whittaker, Clark & Daniels, Inc. ("WCD") certain assets
including its talc operations. Consideration for the
purchase included $4,388,000 in cash, 136,360 shares of
common stock of Zemex with an ascribed value of
$1,227,000 and the assumption of certain current
liabilities directly relating to the operations acquired
aggregating $267,000. Concurrent with the purchase, the
Corporation entered into an agreement with WCD whereby
WCD agreed to act as the exclusive marketing,
distribution and sales agent for the CorporationOs
premium talc products.
Acquisition of Suzorite Mica Products Inc.
In September 1993, the Corporation, through a wholly-
owned subsidiary, acquired 100% of the outstanding
capital stock of Suzorite from a subsidiary of Dundee.
Suzorite mines and processes mica, which is used in
various applications in the automotive, construction and
oil drilling industries. In connection therewith, the
Corporation issued 1,400,000 shares of common stock and
a transferable warrant entitling the holder to purchase
up to an additional 100,000 shares of common stock at
$7.00 per share, exercisable no later than July 15,
1995.
As this transaction was between companies which were
then under common control, it has been accounted for as
a pooling of interests and, accordingly, the
CorporationOs financial statements for periods prior to
the acquisition
have been restated to include the accounts of Suzorite
for all periods presented. There were no adjustments
necessary to conform the accounting policies of the two
companies. Net sales and net income (loss) from
continuing operations of the separate companies for the
periods preceding the acquisition are as follows:
Period from January 1, 1993
to September 30, 1993 1992
(unaudited)
Net sales
Suzorite $5,586,000 $6,712,000
Zemex 30,628,000 35,308,000
Combined $36,214,000 $
42,020,000
Income (loss) from continuing
operations
Suzorite $649,000 $788,000
Zemex (240,000) 50,000
Combined $409,000 $838,000
Dispositions
Discontinued Operations
During the fourth quarter of 1993, the Corporation sold
its 70% owned subsidiary, PPSB, which was involved in
the mining of tin oxide in Malaysia. Accordingly, the
consolidated financial statements of the Corporation
have been reclassified to report separately from
continuing operations the net assets and operating
results of this discontinued operation.
Sales applicable to the discontinued Malaysian
operation prior to its sale were $2,313,000 and
$3,285,000 in 1993 and 1992, respectively.
The proceeds on sale included:
(i) the elimination of an obligation owed by the
Corporation to PPSB in the amount of $500,000; (ii)
a cash payment by the purchaser of $50,000; and
(iii) a promissory note issued by the purchaser to
the Corporation in the face amount of
$379,668. The
promissory note is to be repaid from 50% of the net
income generated by PPSB. If PPSB is liquidated in whole
or in part and the proceeds of liquidation
exceed $250,000, then 50% of such proceeds will be
paid to the Corporation and will constitute full
repayment of the promissory note. The promissory note
bears simple interest at the United States prime
interest rate as published from time to time in the Wall
Street Journal and matures on November 15, 2003. Due to
the contingent nature of the promissory note, it has
been ascribed no value.
Other Dispositions
In November 1993, the Corporation sold its aplite plant
and operations in Montpelier, Virginia for aggregate net
proceeds of $5,470,000, resulting in a pre-tax gain of
$3,683,000 which is included in other income (expenses).
In May 1992, the Corporation completed the sale of its
49% interest in Sierra Mining Company, Ltd., based in
Thailand, for aggregate proceeds of $680,000. Other
income (expenses) in 1992 includes a gain of $205,000
arising on this disposition after the recognition in
1991 of a loss on write-down of such investment of
$800,000.
3. Inventories
1994 1993
Ore, concentrates and finished products
Industrial minerals
$7,158,000$1,880,000
Metal powders 3,655,000
2,708,000
10,813,000 4,588,000
Materials and supplies
Industrial minerals 4,252,000
3,066,000
Metal powders 1,425,000
1,033,000
5,677,000
4,099,000
$16,490,000$8,687,00
0
4. Property, Plant and Equipment
1994
1993 Land
$2,937,000$1,865,000
Mining properties and deferred costs4,890,000
4,131,000 Buildings 10,925,000
9,872,000
Machinery and equipment
34,928,00030,832,000
Construction in progress 2,317,000
854,000
Total property, plant and equipment,
at cost 55,997,000
47,554,000
Less: Accumulated depreciation, depletion
and amortization
26,977,00022,196,000
Net property, plant and equipment
$29,020,000$25,358,000
As of December 31, 1994, the Corporation
estimates that approximately $14,000,000 will be
expended to complete its construction in progress.
5. Other Assets
1994
1993 Prepaid pension cost (Note 7)
$1,518,000$1,486,000
Assets held for resale (Note 10) 734,000
734,000
Bond issuance costs D net 442,000
484,000
Other deferred charges 471,000
440,000
Promissory notes receivable D non-current
portion (Note 15) 222,000 D
$3,387,000$3,144,000
6. Income Taxes
The provision for income taxes consists of the
following components:
1994 1993
1992 Income from continuing operations
before provision for income
taxes
Domestic $3,631,000$2,331,000
$50,000 Foreign 1,948,000 1,327,000
1,212,000 Total pre-tax income
$5,579,000$3,658,000$ 1,262,000
Current tax provision
Federal $880,000 $985,000 $D
State and local 258,000 116,000 D
Foreign 425,000 D D
Total
$1,563,000$1,101,000
$D
Deferred tax provision
Federal D D D
State and local D D D
Foreign 256,000 470,000
424,000
Total 256,000
470,000
424,000
Benefit of operating loss
carryforwards (2,490,000)(1,101,000) D
(Recovery of) provision for
income taxes $(671,000) $470,000 $
424,000
The following tabulation reconciles the U.S. federal
statutory income tax rate to the federal, state and
foreign overall effective income tax rate.
1994 1993
1992 % %
%
Statutory federal rate 34.0 34.0
34.0
Benefit of operating loss carryforwards
(net of foreign income taxes)(46.0) (22.0)
(0.4) Other D
0.8
D
Effective income tax rate (12.0) 12.8
33.6
Deferred income taxes reflect the net tax effects
of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes. At
December 31, 1994, the Corporation had unused tax
benefits of $ 4,132,000 related to U.S. net operating
loss and tax credit carryforwards. Valuation allowances
of $1,645,000 and $4,389,000 as at December 31, 1994 and
1993, respectively, have been recognized to offset the
related deferred tax assets due to the uncertainty of
realizing the full benefit of the loss and tax credit
carryforwards. Significant components of the
CorporationOs deferred tax assets and liabilities as of
December 31 are as follows (dollars in thousands):
1994
1993 U.S.Foreign Total
U.S.ForeignTotal
Deferred tax assets
Net operating loss
and tax credit
carryforwards $ 4,132 $D $4,132$5,122
$D$5,122] Accrued expenses 414 D 414 658
D
658
Bad debt allowances124 D 124 105 D
105
Inventories 132 D 132 81 D
81 Other 397 D 397 166 D
166
Gross deferred tax assets5,199 D 5,199 6,132 D
6,132 Valuation allowance for
deferred tax assets(1,645) D(1,645)(4,389) D
(4,389) Total 3,554 D 3,554 1,743 D
1,743
Deferred tax liabilities
Property, plant and
equipment 1,223 2,177 3,400 957 2,043
3,000 Pension contributions553D 553 508 D
508 Assets held for resale 278 D 278
278
D
278
Total 2,054 2,177 4,231 1,743
2,043
3,786
Net deferred tax
(assets)
liabilities $(1,500)$2,177 $677 $D$2,043$2,043
The net change in the valuation allowance for
deferred tax assets was a decrease of $2,744,000 and
$646,000 in the years ended December 31, 1994 and 1993,
respectively, related primarily to benefits arising from
recognition of the benefit of net operating loss
carryforwards. In 1994, in addition to the reduction in
the valuation allowance relating to the benefit of net
operating loss carry forwards utilized, the valuation
allowance has been reduced by, and the benefit of net
operating loss carryforwards increased by, an additional
$1,500,000 with respect to the amount of net operating
loss carryforwards which management believes that it is
more likely than not will be utilized in subsequent
years.
At December 31, 1994, the Corporation had $11,630,000
of operating loss carryforwards available to reduce
future taxable income which will expire between 1999 and
2006 if not previously utilized. Additionally, the
Corporation has $289,000 of unused general business tax
credits which expire between 1995 and 2001 and $142,000
of alternative minimum tax credits.
7. Pension Plans and other Postretirement Benefits
Pension Plans
The Corporation has several pension plans covering
substantially all domestic employees. The plans covering
salaried employees provide pension benefits that are
based on the compensation of the employee. In all plans,
the plan assets exceed the benefit obligations and hence
the plans are overfunded.
Net periodic pension cost (income) included the
following components:
1994 1993
1992
Current service costs $422,000 $338,000
$331,000 Interest cost on projected
benefit obligations 882,000 846,000 793,000
Actual return on assets 368,000 (1,249,000) (967,000)
Net amortization and
deferral (1,704,000) 29,000
(204,000) Net pension income $ (32,000) $ (36,000)
$ (47,000)
Net amortization and deferral consists of
amortization of net assets at transition and deferral of
subsequent net gains and losses. The assumptions used to
determine
projected benefit obligations were (i) a discount rate
of 7.5% in 1994 and 1993 and 8.75% in 1992; (ii) an
expected long term rate of return on assets of 8.75% in
1994, 1993 and 1992; and (iii) an increase in the level
of compensation of 6% for all three years.
The status of the plans and the amounts recognized in
the consolidated balance sheets of the Corporation for
its pension plans as of December 31, 1994 and 1993 are
tabulated below:
1994
1993 Actuarial present value of benefit obligations
Vested benefit obligation $9,404,000 $
9,414,000 Accumulated benefit obligation
$9,555,000
$ 9,564,000
Projected benefit obligation $(12,760,000)
$(12,808,000) Plan assets at fair value
14,675,000 15,594,000 Plan assets in excess of
projected benefit obligation 1,916,000
2,786,000
Unrecognized net gain (42,000)
(820,000) Prior service cost not yet recognized
in net periodic pension cost 276,000
304,000
Unrecognized net asset at year end (633,000)
(784,000)
Prepaid pension cost included in
consolidated balance sheets $
1,518,000 $ 1,486,000
Other Postretirement Benefits
The Corporation provides healthcare and life insurance
benefits for certain retired employees which, effective
January 1, 1993, are accrued as earned (Note 1). The
cost of such benefits was $73,000 in 1994, $51,000 in
1993 and $44,000 in 1992.
8. Long Term Debt 1994
1993 Zemex Corporation
Revolving credit facility (a) $D$
3,500,000 Suzorite Mica Products Inc.
Term credit facility (b) D
3,187,000 The Feldspar Corporation
Lease agreement (c) 280,000 389,000
Pyron Corporation
Industrial Revenue Bonds (d) 5,100,000 5,780,000
Pyron Metal Powders, Inc. (e)
Promissory notes 1,064,000 D
Term loans 91,000 405,000
Total debt 6,535,000
13,261,000 Less current portion 1,074,000
4,526,000 Long term debt $
5,461,000$ 8,735,000
(a) The revolving credit loan was repaid in full in
1994 and the credit facility terminated at the
Corporation's request.
(b) The Suzorite term credit facility was repaid in
full in 1994.
(c) The Feldspar Corporation has a long-term capital
lease agreement at a variable rate for equipment used in
its operations. This is a six year lease with a maturity
in 2000. The carrying value of the leased equipment as
of December 31, 1994 was $267,000.
(d) Pyron Corporation entered into a lease agreement on
November 29, 1989 with the Niagara County Industrial
Development Agency to partially finance the construction
of a manufacturing facility, acquire and install
equipment and machinery, and renovate the existing Pyron
facility for the purpose of manufacturing atomized steel
powders. The agreement authorized the Agency to issue
and sell Industrial Development Revenue Bonds in the
aggregate principal amount of $7,650,000 to provide the
funds for the project.
While the bonds are not the obligation of Pyron, the
agreement requires Pyron to make quarterly rental
payments equal to the debt service under the sinking
fund requirements and interest on the
outstanding principal to the Agency. The amount
outstanding at December 31, 1994 and 1993 was $5,100,000
and $5,780,000, respectively. Commencing in 1995 Pyron's
payment under the agreement was $680,000 in 1994 and is
$510,000 annually thereafter until paid.
The bonds bear interest at a variable rate not to
exceed 15% per annum. The rate at December 31, 1994 was
5.65% and at December 31, 1993 was 3.3%. Pyron has the
option to convert the bonds to a fixed interest rate at
any time during the term. Under the lease agreement,
Pyron may purchase the facility at any time during the
lease term, which expires November 1, 2004, by paying
the outstanding principal amount of the bonds plus $1.
The bonds are collateralized by a mortgage on the
land, the new facility and the existing facility which
have an aggregate book value of approximately $9,155,000
at December 31, 1994.
A bank has provided Pyron with a letter of credit
which is available to support Pyron's obligations under
the lease agreement. If the bondholders tender their
bonds for repayment, the letter of credit would be
utilized to pay the bondholders. The letter of credit is
collateralized by all equipment, fixtures, spare parts
and tools of the facility. The letter of credit expires
on October 1,1999. At that time, Pyron can either apply
for
a five-year extension or find a substitute bank to
provide the letter of credit.
The lease agreement as well as various other
agreements
executed in connection with this financing contain
restrictive covenants which require, among other things,
the maintenance of minimum working capital and tangible
net worth and limitations on total liabilities for both
Pyron and Zemex consolidated.
(e) Pyron Metal Powders, Inc. has issued two promissory
notes to former owners in connection with the
acquisition of its two operations. One promissory note
with an aggregate principal amount outstanding as of
December 31, 1994 of $650,000 bears interest at 7% with
principal due in two equal instalments of $325,000 due
September 15, 1995 and 1996, respectively. A second note
with an aggregate principal amount outstanding as of
December 31, 1994 of $413,913 is non-interest bearing
with principal payments of $12,550 due monthly
commencing October 15, 1994 until the final payment of
$12,313 due September 15, 1997.
Principal repayments are as follows:
1995 $1,074,000
1996 1,078,000
1997 676,000
1998 557,000
1999 562,000
Thereafter 2,588,000
$6,535,000
Interest
Interest earned and expensed in each of the past three
years is summarized below:
1994 1993
1992 Interest income $ 246,000 $ 22,000
$D Interest expense (671,000) (918,000)
(876,000) Net interest expense $ (425,000) $
(896,000) $ (876,000)
9. Capital Stock, Stock Options and Warrants
Shares Outstanding
During 1993, the Corporation increased its authorized
capital stock from 5,000,000 to 10,000,000 shares, par
value one dollar ($1.00) per share. There were 7,168,153
shares issued and outstanding as of December 31, 1994
and 4,535,283 shares as of December 31, 1993.
In March 1993, Suzorite reduced its stated capital by
way of a cash distribution to its then sole shareholder,
Dundee, by $1,353,000. This reduction in stated capital
did not reduce the number of shares outstanding. As the
acquisition of Suzorite has been accounted for as a
pooling of interest, this distribution is reflected in
the consolidated statement of shareholdersO equity.
On May 5, 1994, the Corporation issued 347,826 shares
of common stock in a private placement transaction for
aggregate proceeds of $2,000,000.
In September 1994, the Corporation issued 2,000,000
shares of its common stock pursuant to a public offering
of shares for net proceeds, after underwriting fees and
expenses of issue, of $18,522,000.
During 1994 the Corporation purchased 53,000 shares
of common stock for cancellation for an aggregate cost
of $465,000.
Dividends
On November 14, 1994, the Corporation declared a 2%
stock dividend to shareholders of record on November 28,
1994, which was paid December 19, 1994. Retained
earnings were charged $1,320,307 as the result of the
issuance of 145,708 shares of the CorporationOs common
stock, and cash payments of $3,218 in lieu of fractional
shares.
On November 7, 1993, the Corporation declared a 2%
stock dividend to shareholders of record on November 24,
1993, which was paid December 6, 1993. Retained earnings
were charged $604,276 as a result of the issuance of
81,573 shares of the CorporationOs common stock, and
cash payments of $2,672 in lieu of fractional shares.
In March 1993, Suzorite paid a cash dividend of
$2,621,000 to its then sole shareholder, Dundee. This
dividend, because of the pooling of interest accounting
referred to above, is also reflected in the consolidated
statement of shareholders' equity.
On November 6, 1992, the Corporation declared a 2%
stock dividend to shareholders of record on December 14,
1992, which was paid December 23, 1992. Retained
earnings were charged $346,066 as a result of the
issuance of 58,546 shares of the Corporation's common
stock, and cash payments of $1,105 in lieu of fractional
shares.
Stock Options
The Corporation provides a Stock Option Incentive Plan
and has, with shareholder approval, issued options to
certain directors outside of the Plan. The Plans are
intended to provide long term
incentives and rewards to executive officers, directors
and other key employees contingent upon an increase in
the market value of the CorporationOs common stock.
Options for 716,815 shares are issuable under the Plans.
Stock option transactions are summarized as follows:
Number Exercise
of Options Price per
Option
Outstanding at December 31, 1991 248,000 $5.00
Granted 12,000 $5.00
Outstanding at December 31, 1992 260,000
Granted 372,500 $5.50
Granted 60,000 $7.125
Cancelled or expired (120,000) $5.00
Outstanding at December 31, 1993 572,500
Granted 25,000 $11.50
Cancelled (9,750) $5.50
Cancelled (8,000) $5.00
Exercised (12,000) $5.00
Exercised (11,200) $5.50
Outstanding at December 31, 1994 556,550
The options expire from 1996 to 2000. During 1994
options for 23,200 shares of common stock were exercised
for proceeds of $121,600. At December 31, 1994 there
were 333,550 options exercisable.
Warrants
During 1993, in connection with the acquisition of
Suzorite (Note 2), the Corporation issued a transferable
warrant to Dundee to purchase at any time prior to July
15, 1995 up to 100,000 shares of common stock at $7.00
per share.
As a result of a stock rights offering in 1990,
725,769 warrants were issued. Each warrant entitles the
holder to purchase at any time prior to July 15, 1995
1.08 shares of common stock at an exercise price of
$8.56 which was repriced from $9.25 as a result of stock
dividends. The warrants can be redeemed at any time
prior to the close of business on the warrant expiration
date in whole or in part by the Corporation at a
redemption price of $.10 per warrant, if the closing
price on the New York Stock Exchange for the common
stock is at least $11.11 for each trading day within any
period of 20 consecutive trading days. Holders of
warrants will be entitled to exercise such warrants
until the date fixed for redemption. During 1994, 31,514
warrants were exercised resulting in the issuance of
32,771 shares of common stock at an exercise price of
$8.88 per share for aggregate proceeds of $291,000. No
warrants were exercised in 1993.
Note Receivable from Shareholder
The note receivable from shareholder of $1,749,000
represents amounts due from the CorporationOs President
and Chief Executive Officer pursuant to the Key
Executive Common Stock Plan. The loan, which was used to
acquire 357,000 shares of common stock of the
Corporation, is noninterest bearing, is secured by a
pledge of the shares acquired and is due on the earlier
of November 26, 1996 or 30 days after the termination of
employment. Since the loan arose from the sale of stock,
it is classified as a reduction of shareholders' equity.
10. Restructuring Charges and Unusual Items
Restructuring Charges
In 1993, the Corporation reorganized certain of its U.S.
operations. This has resulted in a charge to operations
of $950,000 in 1993 which includes the cost of closing
an office, severance and relocation costs.
In December 1991, the Corporation closed its
industrial minerals plant located in Connecticut. The
assets of this operation were reclassified to assets
held for resale and written down in 1991 by $430,000 to
their estimated net realizable value. These assets were
written down by a further $300,000 in 1993.
Unusual Items
Other income (expenses) for 1993 includes a gain on sale
of the Montpelier, Virginia aplite plant and operation
of $3,683,000 (Note 2) as well as $616,000 of legal and
other costs primarily associated with the acquisition of
Suzorite.
11. Operating Leases and Other Commitments
Operating Leases
The Corporation has a number of operating lease
agreements primarily involving equipment, office space,
warehouse facilities and rail sidings. The operating
lease for equipment provides that the Corporation may,
after the initial lease term, renew the lease for
successive yearly periods or may purchase the equipment
at the fair market value. An operating lease for office
facilities contains escalation clauses for increases in
operating costs and property taxes. The majority of the
leases are cancellable and are on a yearly basis.
Future minimum rental payments required by
operating leases that have initial or remaining non-
cancellable lease terms in excess of one year as of
December 31, 1994 are as follows:
Minimum
Years Lease Payments
1995 $508,000
1996 478,000
1997 409,000
1998 339,000
1999 236,000
Thereafter 468,000
Total minimum lease payments $2,438,000
Rent expense, including contingent rents, was
$281,000, $88,000 and $396,000 in 1994, 1993 and 1992,
respectively. Contingent rents, which are paid for
warehouse facilities and are based on quantities stored,
were nil in each of 1994 and 1993 and $80,000 in 1992.
Other Commitments
The Corporation has a mining contract with an
independent contractor expiring on September 30, 1998 to
extract minerals from its open pit mine in Suzor
Township, Quebec. This contract specifies the mining and
delivery of approximately 50,000 tons of ore per year to
the mine site rail siding at a rate of Cdn. $17.50 per
ton.
12. Quarterly Financial Data
(Unaudited)
The following is a summary of certain unaudited
quarterly financial data from continuing
operations:
1994
1993
Net sales
First quarter $ 12,399,000
$ 12,004,000
Second quarter 13,388,000
12,257,000
Third quarter 13,333,000
11,953,000
Fourth quarter 16,186,000
11,744,000
$ 55,306,000 $
47,958,000
Operating income (loss)
First quarter $ 1,065,000 $ 512,000
Second quarter 1,426,000 154,000
Third quarter 1,636,000 990,000
Fourth quarter 1,714,000 (419,000)
$ 5,841,000 $ 1,237,000
Income (loss) from continuing
operations
First quarter $ 764,000 $ 338,000
Second quarter 1,128,000 (226,000)
Third quarter 1,314,000 297,000
Fourth quarter (A) 3,044,000 2,779,000
$ 6,250,000 $ 3,188,000
Income per share from continuing
operations
First quarter $ .17 $ .08
Second quarter .24 .04
Third quarter .24 .07
Fourth quarter .43 .62
(A) See Note 2.
13. Financial Instruments
Financial instruments which potentially subject the
Corporation to concentrations of credit risk consist
principally of trade receivables. Concentrations of
credit risk with respect to trade receivables are
limited due to the large number of customers comprising
the Corporation's customer base and their dispersion
across a number of different industries, principally
construction, glass, electrical and automotive.
Suzorite's U.S. dollar accounts receivable are
hedged by foreign exchange contracts totalling $800,000
and $3,700,000 as at December 31, 1994 and 1993,
respectively at Canadian dollar exchange rates ranging
from U.S. $1.00 = Cdn $1.3025 to Cdn $1.4051.
14. Changes in Non-Cash Working Capital Items
The changes in non-cash working capital items are as
follows:
1994 1993
1992
(Increase) decrease in
accounts receivable$(2,384,000) $(471,000)
$(1,036,000)
(Increase) decrease in
inventories (4,471,000) 728,000
(586,000)
(Increase) decrease in
prepaid expenses (31,000) (162,000)
(174,000) Increase (decrease) in
accounts payable and
accrued liabilities 2,248,000 (981,000)
626,000 Increase (decrease) in
accrued income taxes 327,000 42,000 (9,000)
$(4,311,000) $ (844,000) $
(1,179,000)
15. Related Party Transactions
Related party transactions not otherwise disclosed in
the consolidated financial statements include:
Suzorite was charged the following amounts by Dundee:
1994 1993
1992
Management fees $D $ 219,000
$171,000
Interest D D
45,000
Effective July 1, 1993, the deemed date of
acquisition by Zemex, Dundee discontinued charging
management fees to Suzorite.
As at December 31, 1994 and 1993, accounts receivable
included amounts due from directors of $350,000 and nil,
respectively. These amounts are non-interest-bearing
with no fixed terms of repayment.
Also included in accounts receivable as at December
31, 1994 and 1993 is $149,000 and nil, respectively,
representing the current portion of promissory notes
receivable from Alumitech totalling $371,000. The notes
receivable bear interest at 11% and are repayable in
monthly principal payments of approximately $12,000
until October 1997.
16. Segment Information
Zemex Corporation has two principal lines of business
and is organized into two operating units based on its
product lines: industrial minerals and metal powders.
Industrial minerals include feldspar, kaolin, mica,
talc, feldspathic sand and industrial sand. These
products are marketed principally to the automotive,
housing and ceramics industries in North America. They
are produced from mines and processing plants located
near Edgar, Florida; Monticello, Georgia; Spruce Pine,
North Carolina; Diana, New York; Murphy, North Carolina;
Van Horn, Texas; and Boucherville, Quebec. Metal powders
are produced in Niagara Falls, New York, Maryville,
Tennessee and Greenback, Tennessee and marketed
primarily in North America to manufacturers of powder
metallurgy parts used in the automotive and
transportation industries. Corporate assets principally
include cash, term deposits, the investment in Alumitech
and furniture and fixtures.
Information pertaining to sales and earnings from
continuing operations and assets by business segment
appears below:
1994 1993 1992
Net sales (A)
Industrial minerals $30,378,000 $31,104,000 $ 29,392
,000
Metal powders 24,928,000 16,854,000
12,628,000
Total $55,306,000 $47,958,000
$42,020,000
Operating income (loss)(A)
Industrial minerals $3,865,000$ 2,424,000
$2,208,000 Metal powders 2,202,000
1,046,000 1,313,000 Restructuring
charges(B) D (1,250,000) D General
unallocated
corporate expenses (226,000) (983,000)
(1,784,000) Total 5,841,000
1,237,000 1,737,000
Interest expense, net (425,000) (896,000) (876,000)
Gain on sale of investment (C) D D 205,000 Other
income, net (B) 163,000 3,317,000 196,000 Income
before provision for
income taxes $5,579,000 $3,658,000
$1,262,000 Capital expenditures (D)
Industrial minerals $2,050,000 $2,209,000 $814,000
Metal powders 878,000 391,000 235,000
Corporate 149,000 70,000 D Total
$3,077,000 $2,670,000 $1,049,000
Depreciation, depletion and amortization
Industrial minerals $1,456,000 $1,494,000
$1,572,000 Metal powders 828,000
834,000 832,000 Corporate 31,000 70,000
73,000 Total $2,315,000 $2,398,000
$2,477,000
Identifiable assets at year end (A)
Industrial minerals $36,853,000 $30,170,000
$29,258,000 Metal powders 22,603,000
16,687,000 16,867,000 Corporate(E) 11,346,000
1,557,000 4,648,000 Total
$70,864,000$48,414,000 $50,773,000
(A) The CorporationOs industrial minerals and metal
powders businesses are in the United States and Canada,
which the Corporation considers one geographic segment.
(B) See Note 10.
(C) See Note 2.
(D) Capital expenditures for 1994 exclude property,
plant and equipment of $3,264,000 acquired in
connection with the Corporation's 1994 acquisitions
(Note 2).
(E) 1992 corporate assets include assets of
discontinued operations, 1994 includes investment in
Alumitech, Inc. and includes cash and cash equivalents
for all years presented.
17. Subsequent Event
On February 15, 1995, the Corporation exercised an
option, obtained pursuant to the agreement whereby it
acquired its initial investment in Alumitech (Note 2).
By the issuance of 412,500 unregistered common shares of
the Corporation from treasury, Zemex increased its
ownership interest in Alumitech from 42% to 73%. The
shares were issued as to 206,250 to Dundee Bancorp
International Inc., the Corporation's largest
shareholder, and as to 206,250 to Clarion Capital
Corporation, a corporation controlled by a director of
Zemex.
Zemex Corporation
Selected Financial Data
(dollars in thousands except per share amounts)
For the Years
Ended December 311994 1993 1992 1991
1990
Summary of
Operations
Net Sales
$55,306,000$47,958,000$42,020,000$37,870,000$42, 855,000
Restructuring
Charges 1,250,000
815,000
Operating
Income (Loss) 5,841,0001,237,000 1,737,000 (1,751,000)
(2, 772,000)
Other Income
(Expenses) (262,000)2,421,000 (475,000) (1,156,000)
(549,0 00)
Net Income
(Loss) from
Continuing
Operations6,250,0003,188,000
838,000(3,215,000)(3,562,000)
Net Income
(Loss) 6,250,000 1,852,000
949,000(3,152,000) (3,332,000)
Financial
Position
Working
Capital $26,046,000$9,288,000$9,431,000
$8,763,000$6,433, 000
Total Assets 70,864,00048,414,000 50,773,000 56,620,000
58 ,459,000
Long Term Debt
(Non-Current
Portion) 5,461,0008,735,000
9,593,00010,181,0007,140,000 Common Stock
Average Common
Shares
Outstanding5,421,5334,292,5834,127,694
4,120,777 3,699,102 Actual Common
Shares
Outstanding
at Year End7,168,1534,535,283
4,491,8344,120,777 4,016,549
Per Share of
Common Stock
Net Income
(Loss) as
reported $1.15 $0.43 $0.23
$(0.76) $(0.90)
Net Income (Loss)
without
accelerated
recognition of
the benefit of
tax loss
carryforwards 0.880.43
0.23 ( 0.76) (0.90)
Net Income (Loss)
excluding the
benefit of tax
loss carryforwards
(ie. fully taxed)0.64 0.43 0.23
(0.76) (0.90)
Common Stock Prices
High 121/480/0 63/8 67/8
85/8 Low 61/8 41/2 27/8 33/8
30/0 Year End 85/8 63/4 53/8
33/8 37/8
Corporate Directory
Board of Directors
Paul A. Carroll
Partner, Smith, Lyons,
Torrance, Stevenson
& Mayer (1)
Morton A. Cohen
Chairman, President and
Chief Executive Officer,
Clarion Capital Corporation; Chairman
of Cohesant Technologies Inc.
John M. Donovan
Corporate Consultant (1) (2)
Thomas B. Evans, Jr.
President, The Evans Group,
Ltd. (2)
Ned Goodman
Chairman and Chief Executive Officer, Dundee Bancorp
Inc.; President and Director, Dundee Bancorp
International Inc.; Chairman, Dynamic Fund Canada Ltd.
Peter Lawson-Johnston
Chairman and Trustee,
Solomon R. Guggenheim Foundation; Chairman,
The Harry Frank Guggenheim Foundation; Director,
McGrawHill, Inc.; President and Director, Elgerbar
Corporation (1) (3)
Richard L. Lister
President and Chief Executive
Officer of the Corporation; Director, Dundee Bancorp
Inc. (3)
Patrick H. O'Neill
Corporate Consultant (2)
William J. vanden Heuvel
Counsel, Strook, Strook &
Lavan; Senior Advisor,
Allen & Company,
Inc.; Chairman, IRC Group,
Inc. (3)
Officers
Peter Lawson-Johnston
Chairman of the Board
Richard L. Lister
President and
Chief Executive Officer
Allen J. Palmiere
Vice President, Chief Financial Officer
and Assistant Secretary
Peter J. Goodwin
Vice President;
President, Suzorite Mineral Products,
Inc.
Robert W. Morris
Secretary;
President, The Feldspar Corporation
G. Russell Lewis
President, Metal Powders
(1) Member of the Executive
Compensation/Stock Option/
Pension Committee of the Corporation
(2) Member of the Audit Committee of
the Corporation
(3) Member of the Executive Committee
of the Corporation
Shareholder Information
Executive Office
Zemex Corporation
Canada Trust Tower
BCE Place, 161 Bay Street
Suite 3750, P.O. Box 703
Toronto, Ontario
Canada M5J 2S1
Telephone: (416) 365-8080
Fax: (416) 365-8094
Independent Public Accountants
Deloitte & Touche
Toronto, Ontario, Canada
Transfer Agent and Registrar
Capital Stock
First Union National Bank
of North Carolina
Shareholder Services Group
230 South Tryon Street
Charlotte, N.C. 28288
Attention: Eleanor Autry
Telephone: (704) 374-2699
Form 10-K
Copies of Form 10-K filed with the Securities and Exchange
Commission
for the year ended December 31, 1994 will be available after
April 1,
1995 by writing to Shareholder Relations at the Executive Office