SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 [Fee Required]
For the fiscal year ended December 31, 1994
OR
Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 [No Fee Required]
For the Transition period from to
Commission file number 1-9256
PREMARK INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 36-3461320
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1717 Deerfield Road, Deerfield, Illinois 60015
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (708) 405-6000
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange
on Which Registered
Common Stock, $1.00 par value New York Stock Exchange
Pacific Stock Exchange
Common Stock Purchase Rights New York Stock Exchange
Pacific 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. Yes X No .
Aggregate market value of the Registrant's voting stock held by
non-affiliates, based upon the closing price of said stock on the New York
Stock Exchange-Composite Transaction Listing on March 3, 1995 ($42.75 per
share): $2,626,207,612 .
As of March 3, 1995, 62,522,614 shares of the Common Stock, $1.00 par
value, of the Registrant were outstanding.
Documents Incorporated by Reference:
Portions of the Annual Report to Shareholders for the year ended
December 31, 1994 are incorporated by reference into Parts I, II and IV
of this Report.
Portions of the Proxy Statement relating to the Annual Meeting of
Shareholders to be held May 3, 1995 are incorporated by reference into Part
III of this Report.
PART I
Item 1. Business
(a) General Development of Business
Premark International, Inc. (the "Registrant") is a
multinational consumer and commercial products company. The
Registrant is a Delaware corporation which was organized on
August 29, 1986 in connection with the corporate reorganization
of Kraft, Inc. ("Kraft"). In the reorganization, the businesses
of the Registrant and certain other assets and liabilities of
Kraft and its subsidiaries were transferred to the Registrant.
On October 31, 1986 the Registrant became a publicly held company
through the pro-rata distribution by Kraft to its shareholders of
all of the outstanding shares of common stock of the Registrant.
The Registrant's principal operating subsidiaries are Dart
Industries Inc. ("Dart"), which owns the operating subsidiaries
comprising the Registrant's Tupperware business; Premark FEG
Corporation, which owns the operating subsidiaries comprising the
Registrant's Food Equipment Group; Ralph Wilson Plastics Company
("Ralph Wilson Plastics"); The West Bend Company ("West Bend");
Florida Tile Industries, Inc. ("Florida Tile"); Hartco Flooring
Company ("Hartco"); and Precor Incorporated ("Precor").
Dart was organized in Delaware in 1928 as a successor to a
business originally established in 1902. Tupperware U.S., Inc.
is a Delaware corporation formed in 1989 which operates the U.S.
Tupperware business. In 1988, Ralph Wilson Plastics and West
Bend were organized in Delaware as separate corporations owned
directly by the Registrant, having previously been operating
divisions of Dart. Premark FEG Corporation was organized in
Delaware in 1984, a successor to a business originally
incorporated in 1897. Florida Tile, a Florida corporation
organized in 1954, was acquired in 1990. Hartco, acquired in
1988, was organized in Tennessee in 1946. Precor, a Delaware
corporation, was acquired in 1984.
(b) Financial Information About Industry Segments
For certain financial information concerning the
Registrant's business segments, see Note 10 ("Segments of the
Business") of the Notes to the Consolidated Financial Statements
of Premark International, Inc., appearing on pages 43 and 44 of
the Annual Report to Shareholders for the year ended December 31,
1994, which is incorporated by reference into this Report by
Item 8 hereof.
(c) Narrative Description of Business
The Registrant conducts its business through its three
business segments: Tupperware, Food Equipment Group, and Consumer
and Decorative Products. A discussion of the three business
segments follows. Words appearing in italics constitute
trademarks and tradenames utilized by the Registrant's
businesses.
TUPPERWARE
Principal Products, Markets and Distribution
Tupperware manufactures and markets a broad line of highest-
quality consumer products for the home. Important products
include Bell tumblers, Modular Mates stackable storage
containers, Wonderlier and Servalier bowls, Tuppertoys
educational toys, One Touch canisters, and Tupperwave microwave
cookware. The containers and canisters both feature highly
successful Tupperware seals.
During 1994, Tupperware continued to introduce new designs
and colors in its products lines, and to extend existing products
into new markets around the world. Tupperware also initiated a
major product expansion program, focusing on kitchenware,
children's products and gifts.
Beginning in 1989, a number of U.S. franchisees converted
to the Tupperware Express product delivery system, under which
Tupperware products are shipped directly from the plant to the
ultimate consumer. Prior to Tupperware Express, all franchisees
warehoused an inventory of Tupperware products for resale to
their consultants, who in turn were responsible for coordinating
delivery to the ultimate consumers. Under Tupperware Express,
there are presently 95 franchisees who process the orders of
their sales consultants for direct shipment and no longer are
required to maintain an inventory of Tupperware products. Since
1990, Tupperware has also tested a central services system, in
which retail customer orders are processed directly by Tupperware
through the Tupperware Express system, orders are shipped
directly to customers and various operations reports are
generated. High shipping and administrative costs have adversely
affected Tupperware Express. To address these costs, Tupperware
is testing a "consultant pack" system, in which multiple customer
orders are shipped to consultants, who are responsible for
deliveries to retail customers. Tupperware is continuing to test
alternatives in the distribution network.
In fiscal years 1994, 1993, and 1992, Tupperware contributed
approximately 39%, 40% and 38%, respectively, of the sales of the
Registrant's businesses. Tupperware products are sold in the
United States and in 60 foreign countries. In 1994, sales in
foreign countries represented approximately 82% of total
Tupperware revenues. Although Tupperware's international
distribution system is similar to that of its domestic
operations, international product lines vary. Market penetration
varies significantly throughout the world, with the highest
levels occurring in Germany and Australia.
Tupperware products are sold directly to the consumer
through over 625,000 dealers (called "consultants" in the U.S.)
worldwide. Dealers are supported by over 35,000 unit managers
and approximately 1,500 distributors or franchisees. All of such
distributors and franchisees, and the vast majority of
consultants, dealers and managers, are independent contractors.
The dealer force continued to increase overall in 1994.
Tupperware primarily relies on the "party plan" method of
sales, which is designed to enable the purchaser to appreciate
through demonstration the features and benefits of Tupperware
products. In excess of 12 million parties were held in 1994
worldwide. Parties are held in homes, offices, social clubs and
other locations. Tupperware products are also being marketed
through monthly brochures mailed to persons invited to attend
parties and various other types of demonstrations. Sales of
Tupperware products are supported through a program of sales
promotions, sales and training aids and motivational conferences.
Tupperware also utilizes catalogs, magazine advertising and
toll-free telephone ordering, which increases its success with
hard-to-reach customers, in support of its sales force.
Raw Materials and Facilities
Products manufactured by Tupperware require plastic
resins meeting its specifications. These resins are
purchased from a number of large chemical companies, and
Tupperware has experienced no difficulties in obtaining adequate
supplies. Tupperware's headquarters are in Florida.
Tupperware's domestic manufacturing plant (which is owned) is
located in South Carolina. Thirteen additional manufacturing
plants (one of which is leased) are located in 13 foreign
countries. Tupperware conducts a continuing program of new
product design and development at its facilities in Florida, Hong
Kong and Belgium. Research and development of resins used in
Tupperware products are performed by its suppliers.
Competition
The Registrant believes that Tupperware holds approximately
65% of the U.S. market in dollars for plastic storage and serving
containers. Tupperware products compete with a broad range of
food preparation, cooking, storage and serving items made of
various materials, which are sold primarily through retail
outlets. Tupperware's competitive strategy is to provide
high-quality products at premium prices through a direct-selling
distribution system. Direct selling, featuring demonstration of
its products prior to purchase, price, and new product
development are significant factors affecting competition.
Tupperware competes with other direct selling organizations for
sales personnel and party dates.
FOOD EQUIPMENT GROUP
Principal Products, Markets and Distribution
The Food Equipment Group, composed primarily of Premark FEG
Corporation and its operating subsidiaries (the "Group"), is a
leading manufacturer of commercial equipment relating to food
preparation, cooking, storage and cleaning. Its core products
include warewashing equipment; food preparation machines, such as
mixers, slicers, cutters, meat saws and grinders; weighing and
wrapping equipment and related systems; baking and cooking
equipment, such as ovens, ranges, fryers, griddles and broilers;
and refrigeration equipment. Products are marketed under the
trademarks Hobart, Stero, Vulcan, Wolf, Tasselli, Adamatic, Still
and Foster.
Food equipment products are sold to the retail food
industry, including supermarket chains, independent grocers,
delicatessens, bakeries and convenience and other food stores,
and to the foodservice industry, including independent
restaurants, fast-food chains, hospitals, schools, hotels,
resorts and airlines.
Food equipment products are distributed in more than 100
countries, either through wholly-owned subsidiaries or through
distributors, dealers or licensing arrangements covering
virtually all areas of the world where a market for such products
currently exists. The Group is the only major food equipment
manufacturer in the United States with its own nationwide service
network for the markets in which it sells, providing not only an
important source of income but also an important source for
developing new sales. The Group directly services its food
machines, warewashers, weigh/wrap equipment and cooking
equipment, while authorized independent agents service
refrigeration units and some cooking equipment.
For the fiscal years 1994, 1993, and 1992, sales by the
Group contributed approximately 33%, 32%, and 36%, respectively,
of the sales of the Registrant's businesses. Revenues from
foreign operations constituted approximately 39% of the Group's
1994 sales. Major new products introduced by the Group in the
United States in 1994 included a new oven line, a new fryer line,
an extension of the food processor line, and a new Ameriscale
countertop scale. In Europe, the Group introduced a new door-
type dishwasher line, a new Supra refrigeration line, and Phoenix
bulk brewers in 1994.
Raw Materials and Facilities
The Group uses stainless and carbon steel, aluminum and
plastics in the manufacture of its products. These materials are
readily available from several sources, and no difficulties have
been experienced with respect to their availability. In addition
to manufacturing certain component parts, the Group also
purchases many component parts, including electrical and
electronic components, castings, hardware, fasteners and
bearings, certain manufacturers of which utilize tooling provided
by the Group.
The Group owns its headquarters building and a major
manufacturing complex consisting of four plants in Troy, Ohio.
In addition, the Group operates nine manufacturing plants in
California, Georgia, Kansas, Maryland, New Jersey, Ohio, and
Virginia, and eight manufacturing plants in Canada, France,
Italy, the United Kingdom and Germany. Most of these plants are
owned.
Competition
The Group competes in a growing worldwide market which is
highly fragmented. No single manufacturer competes with respect
to all of the Group's products, and the degree of competition
varies among different customer segments and products. The
extensiveness of the Group's brand acceptance across a broad
range of products is deemed by the Registrant to be a significant
competitive advantage. Competition is also based on numerous
other factors, including product quality, performance and
reliability, labor savings and energy conservation.
Miscellaneous
The Group had approximately $128 million and $102 million of
backlog orders at the end of 1994 and 1993, respectively, after
restatement of 1993 for exchange rate effects. The Group
considers such orders to be firm, though changes or cancellations
of insignificant amounts may occur, and expects that the 1994
backlog orders will be filled in 1995.
CONSUMER AND DECORATIVE PRODUCTS
Consumer and Decorative Products is composed of the
Decorative Products Group and the Consumer Products Group. It
contributed 28%, 28% and 26% of the sales of the Registrant's
businesses for the fiscal years 1994, 1993 and 1992,
respectively. Ralph Wilson Plastics, Florida Tile and Hartco make
up the Decorative Products Group, while the Consumer Products
Group contains West Bend and Precor.
DECORATIVE PRODUCTS GROUP
Principal Products, Markets and Distribution
Ralph Wilson Plastics manufactures decorative laminates
through a production process utilizing heated high pressure
presses. These laminates, sold principally under the Wilsonart
trademark in more than 550 colors, designs and finishes, are used
for numerous interior surfacing applications, including
cabinetry, countertops, vanities, store fixtures and furniture.
Approximately 50% of the Wilsonart brand decorative laminate sold
is used in residential applications, primarily for surfacing
kitchen and bathroom countertops and cabinetry. Decorative
laminate applications in the commercial market include office
furniture, retail store fixtures, restaurant and hotel furniture,
and doors. Ralph Wilson Plastics also manufactures specialty-
grade laminates, including chemical-resistant, wear-resistant,
and fire-retardant types. Among the specialized applications for
Wilsonart brand laminates are those in laboratory work surfaces,
jetways and naval vessels. In addition to laminate products,
Ralph Wilson Plastics manufactures a solid surface product which
is marketed under the Gibraltar brand. In 1994, Ralph Wilson
Plastics added 22 new designs to its laminate product line.
The company also produces and/or sells contact adhesives
under the Lokweld trademark, metallic surfacings, and decorative
edge molding for countertops and furniture.
Wilsonart brand decorative products are sold throughout the
United States through wholesale building material distributors
and directly to original equipment manufacturers. Export sales
are now made to Japan, Ireland, Canada, Mexico, Central and South
America, the Caribbean, Australia, New Zealand, Hong Kong,
Taiwan, China, Korea, Indonesia and Singapore.
Florida Tile manufactures glazed ceramic wall and floor tile
products in a wide variety of sizes, shapes, colors and finishes,
which are suitable for residential and commercial uses. Tile
products are marketed under the Florida Tile trademark through
company-owned and independent distributors. Products are
exported to Canada, the Caribbean Basin, Iceland, Ireland, the
United Kingdom, Mexico, Saudi Arabia and Pacific Rim nations.
Florida Tile also imports foreign-produced tile products to meet
the growing demand for low to mid-priced products.
Hartco manufactures and distributes high-quality,
prefinished oak and maple flooring for residential and commercial
applications. Its flooring products are pre-cut parquet panels,
laminated three and five-ply maple plank lineal flooring
products, and laminated two and three-ply oak plank lineal
flooring products, each of which is sold in a variety of colors
and finishes. Hartco also manufactures wood moldings,
installation adhesives and a full line of proprietary floor care
products to complement its line of oak flooring products. These
products are marketed under the Hartco trademark to a nationwide
network of wholesale floor covering distributors and home
improvement store chains.
Raw Materials and Facilities
The manufacture of decorative laminates requires various raw
materials, including kraft and decorative paper, overlays, and
melamine and phenolic resins. Each of these items is available
from a limited number of manufacturers, but Ralph Wilson Plastics
has not experienced difficulties in obtaining sufficient
quantities. The principal raw materials used in Florida Tile
products are talc, stains, frit (ground glass) and clay, all of
which are available to Florida Tile in sufficient quantities.
The principal raw materials used in Hartco's hardwood flooring
products are Appalachian red and white oak, maple, steel wire,
and various chemicals. All such raw materials are readily
available from many sources in sufficient quantities. Lumber
supplies are at a premium price compared to prior years, although
prices have moderated from 1993 levels.
Ralph Wilson Plastics owns and operates three manufacturing
facilities in Texas and North Carolina, giving it the largest
decorative laminate production capacity in North America.
Adhesives are produced at two plants located in Louisiana and
Texas. Solid surfacing products are manufactured in one facility
in Texas. Ralph Wilson Plastics has 14 regional distribution
centers which are geographically dispersed throughout the United
States. Stock items can be delivered in 24 hours, and non-stock
items can be produced and delivered within 10 working days.
Florida Tile manufactures products in three owned manufacturing
plants located in Florida, Georgia and Kentucky. It distributes
its products through a network of company-owned and independent
distribution outlets. Hartco manufactures its products in an
owned manufacturing facility in Tennessee and a leased facility
in Kentucky.
Competition
Wilsonart brand products are sold in highly competitive
markets in the United States. Ralph Wilson Plastics has
approximately 48% of the U.S. market for decorative laminates.
Ralph Wilson Plastics successfully competes with other companies
by providing fast product delivery, offering a broad choice of
colors, designs, and finishes, and emphasizing quality and
service. Florida Tile competes with a number of other domestic
and foreign tile manufacturers, and the Registrant believes
Florida Tile is the third largest U.S. tile manufacturer.
Foreign-manufactured products account for approximately 50% of
the U.S. tile market. Important competitive factors in the tile
market include price, style, quality, and service. Hartco
competes with a number of other domestic and foreign suppliers of
prefinished wood flooring products. Important competitive
factors include the fit, appearance and durability of the
flooring products, the variety of finishes and colors, and the
complementary molding, adhesive and floor care products.
Miscellaneous
The Decorative Products Group maintains a continuing program
of product development. Its efforts emphasize product design,
performance and durability, product enhancement, and new product
applications, as well as manufacturing processes. Materials
development for laminate products is generally performed by the
companies providing those materials.
CONSUMER PRODUCTS GROUP
Principal Products, Markets and Distribution
West Bend manufactures and sells small electric appliances
(such as breadmakers, electric skillets, slow cookers, woks, corn
poppers, beverage makers and electronic timers) primarily under
the West Bend trademark, and high-quality, direct-to-the-home
stainless steel cookware. Precor manufactures physical fitness
equipment, such as treadmills, stationary bicycles, low-impact
climbers and ski machines marketed under the Precor trademark.
During 1994, West Bend expanded its breadmaker, drip coffeemaker
and mixer lines. Precor introduced a new line of commercial
stair climbers in 1994.
West Bend small appliances are sold primarily in the United
States and Canada, directly to mass merchandisers, department
stores, hardware stores, warehouse clubs and catalog showrooms.
West Bend's stainless steel cookware is sold to consumers by
independent distributors through dinner parties and by other
direct sales methods. Cookware is sold in 31 countries under 23
separate product lines. Precor equipment is sold primarily
through specialty fitness equipment retail stores and high-end
sporting goods and bicycle stores in the United States and
Canada. In Asia, Europe, Latin America, and the Middle East,
Precor products are sold primarily through select distributors.
Raw Materials and Facilities
West Bend uses aluminum, stainless steel, plastic resins and
other materials in the manufacture of its products. Precor uses
steel, stainless steel, aluminum and other materials in the
manufacture of its products. Generally, neither West Bend nor
Precor has experienced any significant difficulties in obtaining
any of these raw materials or products, although the costs of
these raw materials have risen. West Bend owns and operates two
manufacturing plants in Wisconsin and Mexico. Precor maintains
two leased plants in Washington state.
Competition
Products sold by West Bend and Precor compete with products
sold by numerous other companies of varying sizes in highly
competitive markets. Important competitive factors include price,
development of new products, quality, name recognition, product
performance, just-in-time delivery, warranties, and service.
Miscellaneous
West Bend's sales in the fourth quarter are significantly
higher due to the gift-giving season. Precor's business is
significantly higher in the first and fourth quarters, when
winter weather forces more people to exercise indoors. The West
Bend small appliance business is dependent upon two customers for
approximately 37% of its revenues.
OTHER INFORMATION RELATING TO THE BUSINESS
Trademarks and Patents. The Registrant considers trademarks
and patents to be of importance to its businesses. The
Registrant's trademarks represent the leading brand names for
most of its product lines. Its businesses have followed the
practice of applying for patents with respect to most of the
significant patentable developments. They now own a number of
patents relating to their products, including design patents
covering Tupperware products. In certain cases the Registrant
has elected common law trade secret protection in lieu of
obtaining patent protection. In addition, exclusive and
nonexclusive licenses under patents owned by others are utilized.
No business is, however, dependent to any material extent upon
any single patent or trade secret or group of patents or trade
secrets.
Research and Development. For fiscal years ended 1994, 1993
and 1992, the Registrant spent approximately $44 million, $41
million and $41 million, respectively, on research and
development activities.
Environmental Laws. Compliance by the Registrant's
businesses with federal, state and local environmental protection
laws has not in the past had, and is not expected to have in the
future, a material effect upon its capital expenditures,
liquidity, earnings or competitive position. The Registrant
expects to expend approximately $0.8 million through 1996 on
capital expenditures related to environmental facilities. In
1994, the Registrant had approximately $1.3 million of capital
expenditures for environmental facilities, and approximately $3.2
million of remedial expenditures for environmental sites. See
Item 3 for a further discussion of environmental matters.
Employees. The Registrant and its subsidiaries employ
approximately 24,000 people. Approximately 18% of such employees
are affiliated with one of the several unions with which the
Registrant's subsidiaries have collective bargaining agreements.
In recent years there has been no major effort to organize
additional persons working for the Registrant's businesses, and
there have been no significant work stoppages. The Registrant
considers its relations with its employees to be good. The
independent consultants, dealers, managers, distributors and
franchisees engaged in the direct sale of Tupperware products are
not employees of the Registrant.
Properties. The principal executive offices of the
Registrant are located in Illinois and are leased. Most of the
principal properties of the Registrant and its subsidiaries are
owned, and none of the owned principal properties is subject to
any encumbrance material to the consolidated operations of the
Registrant. The Registrant considers the condition and extent of
utilization of the plants, warehouses and other properties in its
respective businesses to be generally good, and the capacity of
its plants generally to be adequate for the needs of its
businesses.
Miscellaneous. Except as disclosed above in the narrative
descriptions of the Registrant's business segments, none of the
Registrant's businesses is seasonal, has working capital
practices or backlog conditions which is material to an
understanding of their businesses, is dependent on a small
number of customers, or is subject to renegotiation of profits
or termination of contracts or subcontracts at the election of
the Federal Government.
Executive Officers of the Registrant. Following is a list
of the names and ages of all the Executive Officers of the
Registrant, indicating all positions and offices with the
Registrant held by each such person, and each such person's
principal occupations or employment during the past five years.
Each such person has been elected to serve until the next annual
election of officers of the Registrant (expected to occur on May
3, 1995).
Name and Age Positions and Offices Held
and Principal Occupations or
Employment During Past Five
Years
Warren L. Batts (62) Chairman of the Board and
Chief Executive Officer.
James M. Ringler (49) President and Chief Operating
Officer since June 1992,after
having served as Executive
Vice President, Consumer and
Commercial Products since
January, 1990, and President,
Food Equipment Group since
August, 1990.
E. V. Goings (49) Executive Vice President of
Premark and President of
Tupperware Worldwide since
November 1992, after serving
as a Senior Vice President of
Sara Lee Corporation. Prior
thereto, Mr. Goings served in
various executive positions
with Avon Products, Inc.
Joseph W. Deering (54) Group Vice President of
Premark and President of
Premark's Food Equipment
Group since June 1992, after
serving as President of
Leucadia National's
Manufacturing group. Prior
thereto, Mr. Deering served
in various executive
positions with Philips
Industries, Inc.
Thomas W. Kieckhafer (56) Corporate Vice President and
President of West Bend.
James C. Coleman (55) Senior Vice President, Human
resources since July 1991.
Prior thereto, Mr. Coleman
served as Staff Vice
President, Personnel
Relations for General
Dynamics Corporation.
John M. Costigan (52) Senior Vice President,
General Counsel and
Secretary.
Lawrence B. Skatoff (55) Senior Vice President and
Chief Financial Officer since
September 1991. Mr. Skatoff
served as Vice President-
Finance of Monsanto Company
prior to joining the
Registrant.
L. John Fletcher (51) Vice President and Assistant
General Counsel.
Isabelle C. Goossen (43) Vice President-Planning since
June 1994, after serving as
Director of Financial
Relations since 1992, and
prior thereto as Director in
the Planning Department.
Robert W. Hoaglund (56) Vice President, Control &
Information Systems since
December 1990, after serving
as Vice President, Control &
Administrative Services.
Wendy R. Katz (37) Vice President, Internal
Audit since May 1992. Prior
thereto, Ms. Katz served in
various financial positions
at Tupperware.
William R. Reeb (47) Corporate Vice President
since November 1994, and
President and Chief Operating
Officer of Ralph Wilson
Plastics Company since August
1993. Prior thereto, Mr.
Reeb served as Vice
President, Marketing for the
Decorative Products Group and
Executive Vice President and
Vice President of Marketing
for Ralph Wilson Plastics
Company.
Lisa Kearns Richardson (42) Vice President and Treasurer
since April 1994, after
serving as Vice President,
Planning and Analysis since
February 1991. Prior
thereto, Ms. Kearns
Richardson served as
Assistant Controller.
James E. Rose, Jr. (52) Vice President, Taxes and
Government Affairs.
For information concerning foreign and domestic operations
and export sales, see Note 7 ("Income Taxes") appearing on pages
39 and 40, and "Segments of Business by Geographical Areas" in
Note 10 ("Segments of the Business") appearing on page 44 of the
Annual Report to Shareholders for the year ended December 31,
1994, which are incorporated by reference into this Report by
Item 8 hereof.
Item 2. Properties
For information concerning material properties of the
Registrant and its subsidiaries, see the information under the
sub-captions "Narrative Description of Business" in Section (c)
of Item 1 above and "Properties" under the caption "Other
Information Relating To The Business" in Section (c) of Item 1
above.
Item 3. Legal Proceedings
The Registrant and its subsidiaries are parties against
which are pending a number of legal and administrative
proceedings. Among such proceedings are those involving the
discharge of materials into or otherwise relating to the
protection of the environment. Certain of such proceedings
involve Federal environmental laws such as the Comprehensive
Environmental Response, Compensation and Liability Act of 1980,
as well as state and local laws. The Registrant establishes
reserves with respect to certain of such sites. Because of the
involvement of other parties and the uncertainty of potential
environmental impacts, the eventual outcomes of such actions and
the cost and timing of expenditures cannot be estimated with
certainty. It is not expected that the outcome of such
proceedings, either individually or in the aggregate, will have a
materially adverse effect upon the Registrant's consolidated
financial position or operations.
Kraft has assumed any liabilities arising out of any legal
proceedings in connection with certain divested or discontinued
former Dart businesses, including matters alleging product
liability, environmental liability and infringement of patents.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
The stock price information set forth in Note 12 ("Quarterly
Summary (unaudited)") appearing on page 45 of the Annual Report
to Shareholders for the year ended December 31, 1994 is
incorporated by reference into this Report. The information set
forth in Note 13 ("Shareholders' Rights Plan") on page 45 of the
Annual Report to Shareholders for the year ended December 31,
1994 is incorporated by reference into this Report. As of March
3, 1995, the Registrant had 25,044 shareholders of record.
Item 6. Selected Financial Data
The information set forth under the caption "Selected
Financial Data" on pages 30 and 31 of the Annual Report to
Shareholders for the year ended December 31, 1994 is incorporated
by reference into this Report.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The information entitled "Financial Review" set forth on
pages 26 through 29 of the Annual Report to Shareholders for the
year ended December 31, 1994 constitutes "Management's Discussion
and Analysis of Financial Condition and Results of Operations"
and is incorporated by reference into this Report.
Item 8. Financial Statements and Supplementary Data
(a) The following Consolidated Financial Statements of
Premark International, Inc. and Report of Independent Accountants
set forth on pages 32 through 45, and on page 46, respectively,
of the Annual Report to Shareholders for the year ended December
31, 1994 are incorporated by reference into this Report:
Consolidated Statements of Operations, Cash Flows and
Shareholders' Equity--Years ended December 31, 1994, December 25,
1993 and December 26, 1992;
Consolidated Balance Sheet--December 31, 1994 and December
25, 1993;
Notes to the Consolidated Financial Statements; and
Report of Independent Accountants dated January 31, 1995.
(b) The supplementary data regarding quarterly results of
operations contained in Note 12 ("Quarterly Summary (unaudited)")
of the Notes to the Consolidated Financial Statements of Premark
International, Inc. on page 45 of the Annual Report to
Shareholders for the year ended December 31, 1994 is incorporated
by reference into this Report.
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
The information as to the Directors of the Registrant set
forth under the sub-caption "Board of Directors" appearing under
the caption "Election of Directors" on pages 1 through 3 of the
Proxy Statement relating to the Annual Meeting of Shareholders to
be held on May 3, 1995 is incorporated by reference into this
Report. The information as to the Executive Officers of the
Registrant is included in Part I hereof under the caption
"Executive Officers of the Registrant" in reliance upon General
Instruction G to Form 10-K and Instruction 3 to Item 401(b) of
Regulation S-K.
Item 11. Executive Compensation
The information set forth under the caption "Compensation of
Directors" and on page 16 of the Proxy Statement relating to the
Annual Meeting of Shareholders to be held on May 3, 1995, and the
information on pages 10 through 15 of such Proxy Statement
relating to executive officers' compensation, except the Report
of the Compensation and Employee Benefits Committee on Executive
Compensation and the Performance Graph, is incorporated by
reference into this Report.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
The information set forth under the captions "Security
Ownership of Certain Beneficial Owners" on page 5 and "Security
Ownership of Management" on page 4 of the Proxy Statement
relating to the Annual Meeting of Shareholders to be held on May
3, 1995 is incorporated by reference into this Report.
Item 13. Certain Relationships and Related Transactions
None
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports On
Form 8-K
(a) (1) List of Financial Statements
The following Consolidated Financial Statements of Premark
International, Inc. and Report of Independent Accountants set
forth on pages 32 through 45, and on page 46, respectively, of
the Annual Report to Shareholders for the year ended December 31,
1994 are incorporated by reference into this Report by Item 8
hereof:
Consolidated Statements of Operations, Cash Flows and
Shareholders' Equity--Years ended December 31, 1994, December 25,
1993 and December 26, 1992;
Consolidated Balance Sheet--December 31, 1994 and December
25, 1993;
Notes to the Consolidated Financial Statements; and
Report of Independent Accountants dated January 31, 1995.
(a) (2) List of Financial Statement Schedules
The following consolidated financial statement schedule
(numbered in accordance with Regulation S-X) of Premark
International, Inc. is included in this Report:
Report of Independent Accountants on Financial Statement
Schedule, page 22 of this Report; and
Schedule VIII--Valuation and Qualifying Accounts for the
three years ended December 31, 1994, page 23 of this Report.
All other schedules for which provision is made in the
applicable accounting regulations of the Securities and Exchange
Commission are not required under the related instructions, are
inapplicable, or the information called for therein is included
elsewhere in the financial statements or related notes thereto
contained or incorporated by reference herein.
(a) (3) List of Exhibits: (numbered in accordance with Item 601
of Regulation S-K)
Exhibit
Number Description
* 3A Restated Certificate of Incorporation (Exhibit 3A
to the Registrant's Annual Report on Form 10-K for
the year ended December 28, 1991)
* 3B Amended By-Laws (Exhibit 3B to the Registrant's
Annual Report on Form 10-K for the year ended
December 28, 1991)
* 4A Form of Common Stock Certificate (Exhibit 3 to the
Registrant's Current Report on Form 8-K dated
March 20, 1989)
* 4B Rights Agreement dated March 7, 1989 (Exhibit 1 to
the Registrant's Current Report on Form 8-K dated
March 20, 1989)
* 4C Form of Right Certificate of Common Stock Purchase
Right (Exhibit 1 to the Registrant's Current
Report on Form 8-K dated March 20, 1989)
* 4D Form of Indenture (Revised) in connection with the
Registrant's Form S-3 Registration Statement No.
33-35137 (Exhibit (c)(3) to the Registrant's
Current Report on Form 8-K dated September 17,
1990)
*10A Reorganization and Distribution Agreement dated as
of September 4, 1986 (Exhibit 2 to Registration of
Securities on Form 10 dated September 8, 1986,
File No. 1-9256)
*10B Tax Sharing Agreement dated as of September 4,
1986 (Exhibit 10C to Registration of Securities on
Form 10 dated September 8, 1986, File No. 1-9256)
*10C Facilities and Guarantee Agreement, as amended,
and Termination Agreement dated as of September 4,
1986 (Exhibit 10D to Registration of Securities on
Form 10 dated September 8, 1986, File No. 1-9256)
*10D $250,000,000 Credit Agreement dated as of June 15,
1994 (Exhibit (10) to the Registrant's
Quarterly Report on Form 10-Q for the 27 weeks
ended July 2, 1994)
COMPENSATORY PLANS OR ARRANGEMENTS [10E-10L]
*10E Premark International, Inc. 1994 Incentive Plan
(Exhibit 4.1 to the Registrant's Form S-8
Registration Statement No. 33-53561 dated
May 4, 1994)
*10F Premark International, Inc. Supplemental Benefits
Plan (Exhibit 10L to the Registrant's Annual
Report on Form 10-K for the year ended December
28, 1991)
*10G Premark International, Inc. Change of Control
Policy, as amended 1989 (Exhibit 4 to the
Registrant's Current Report on Form 8-K dated
March 20, 1989)
*10H Employment Agreement entered into on July 11, 1991
between the Registrant and Lawrence B. Skatoff
(Exhibit 10K to the Registrant's Annual Report on
Form 10-K for the year ended December 26, 1992)
*10I Form of Employment Agreement entered into on March
7, 1989 between the Registrant and certain
executive officers (Exhibit 5 to the Registrant's
Current Report on Form 8-K dated March 20, 1989)
*10J Employment Agreement entered into on June 2, 1992
between the Registrant and Joseph W. Deering
(Exhibit 10M to the Registrant's Annual Report on
Form 10-K for the year ended December 26, 1992)
*10K Employment Agreement dated November 9, 1992
between Registrant and E. V. Goings (Exhibit 10N
to the Registrant's Annual Report on Form 10-K for
the year ended December 25, 1993)
*10L Premark International, Inc. Director Stock Plan,
as amended 1993 (Exhibit 10O to the Registrant's
Annual Report on Form 10-K for the year ended
December 25, 1993)
11 A statement of computation of 1994 per share
earnings
22 Subsidiaries of the Registrant as of March 10,
1995
24 Manually signed Consent of Independent Accountants
to the incorporation of their report by reference
into the prospectuses contained in specified
registration statements on Form S-8 and Form S-3
25 Powers of Attorney
27 Financial Data Schedule
*Document has heretofore been filed with the Commission and is
incorporated by reference and made a part hereof.
The Registrant agrees to furnish, upon request of the
Commission, a copy of all constituent instruments defining the
rights of holders of long-term debt of the Registrant and its
consolidated subsidiaries.
(b) Reports on Form 8-K
No Current Reports on Form 8-K were filed by the Registrant
for the quarter ended December 31, 1994.
REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT
SCHEDULE
To the Board of Directors and Shareholders
of Premark International, Inc.
Our audits of the consolidated financial statements referred
to in our report dated January 31, 1995 appearing on page 46 of
the 1994 Annual Report to Shareholders of Premark International,
Inc. (which report and consolidated financial statements are
incorporated by reference in this Annual Report on Form 10-K)
also included an audit of the Financial Statement Schedule
listed in Item 14(a)(2) of this Form 10-K. In our opinion, this
Financial Statement Schedule presents fairly, in all material
respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.
Price Waterhouse LLP
Chicago, Illinois
January 31, 1995
SCHEDULE VIII--VALUATION AND QUALIFYING ACCOUNTS
For the three years ended December 31, 1994
(In millions)
Col. A Col. B Col. C Col. D Col. E
Additions
Charged to
Balance at Charged Other Balance
Beginning to Costs Accounts Deductions at End
Description of Period Expenses Describe Describe of Period
Allowance for doubtful
accounts, current and
long term:
Year ended
December
31, 1994 $66.1 $12.2 -- {$(12.2)<F1> $66.2
{ ( .2)<F2>
{ .3 <F3>
Year ended
December $70.6 $15.5 -- {$(18.6)<F1> $66.1
25, 1993 { (1.4)<F2>
Year ended
December
26, 1992 $53.0 $33.5 -- {$(14.3)<F1> $70.6
{ ( 1.7)<F2>
{ 0.1 <F3>
Valuation allowance for deferred tax assets:
Year ended
December
31, 1994 $66.7 ($31.1) $35.6
Year ended
December
25, 1993 $84.6 ($17.9) -- -- $66.7
[FN]
<F1> Represents write-offs less recoveries.
<F2> Foreign currency translation adjustment.
<F3> Business acquired.
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.
Premark International, Inc.
(Registrant)
By WARREN L. BATTS
Warren L. Batts
Chairman of the Board and
Chief Executive Officer
March 20, 1995
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.
Signature Title
Warren L. Batts Chairman of the Board of Directors,
Warren L. Batts Chief Executive Officer and Director
(Principal Executive Officer)
Lawrence B. Skatoff Senior Vice President and Chief
Lawrence B. Skatoff Financial Officer (Principal
Financial Officer)
Robert W. Hoaglund Vice President, Control and
Robert W. Hoaglund Information Systems (Principal
Accounting Officer)
* Director
William O. Bourke
* Director
Dr. Ruth M. Davis
* Director
Lloyd C. Elam, M.D.
* Director
Clifford J. Grum
* Director
Joseph E. Luecke
* Director
Bob Marbut
* Director
John B. McKinnon
* Director
David R. Parker
* Director
Robert M. Price
James M. Ringler President, Chief Operating Officer and
James M. Ringler Director
* Director
Janice D. Stoney
*By John M. Costigan
John M. Costigan
Attorney-in-fact
March 20, 1995
EXHIBIT INDEX
Exhibit No. Description Page
11 A statement of computation of 27-28
1994 per share earnings
13 Pages 26 through 46 of the 29-66
Annual Report to Shareholders
of the Registrant for the year
ended December 31, 1994
22 Subsidiaries of the Registrant 67-69
as of March 10, 1995
24 Manually signed Consent of 70
Independent Accountants to the
incorporation of their report
by reference into the prospec-
tuses contained in specified
registration statements on Form
S-8 and Form S-3
25 Powers of Attorney 71-72
27 Financial Data Schedule 73