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 30, 1995
OR
Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 [No Fee Required]
For the Transition period from to
Commission file number 1-9256
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:(847) 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 4, 1996 ($52.75 per
share): $3,250,579,100.
As of March 4, 1996, 61,622,353 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
30, 1995 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 1, 1996 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
Premark FEG Corporation, which owns the operating subsidiaries
comprising the Registrant's Food Equipment Group; Wilsonart
International, Inc. ("Wilsonart"); The West Bend Company ("West
Bend"); Florida Tile Industries, Inc. ("Florida Tile"); Hartco
Flooring Company ("Hartco"); Precor Incorporated ("Precor"); and
Dart Industries Inc. ("Dart"), which owns the operating
subsidiaries comprising the Registrant's Tupperware business.
Dart was organized in Delaware in 1928 as a successor to a
business originally established in 1902. In 1988, Wilsonart and
West Bend were organized in Delaware as separate corporations
owned directly by the Registrant, having previously been
operating divisions of Dart acquired in 1966 and 1968,
respectively. In 1995, Wilsonart changed its name from Ralph
Wilson Plastics Company. 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 organized as a Washington corporation in 1981,
and was acquired in 1984.
On November 1, 1995, the Registrant announced a plan for a
pro-rata distribution to the Registrant's shareholders of all the
stock of a Corporation owning the Registrant's Tupperware
business. The new corporation, Tupperware Corporation
("Tupperware"), is a worldwide direct selling consumer products
company engaged in the manufacture and sale of Tupperware brand
products. Tupperware was organized under the laws of the State
of Delaware on February 8, 1996 as part of the corporate
reorganization of the Registrant in which Dart and its
subsidiaries will be transferred to Tupperware. The distribution
of Tupperware stock is expected to occur in June, 1996.
(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 page 51 of the
Annual Report to Shareholders for the year ended December 30,
1995, which is incorporated by reference into this Report by Item
8 hereof.
For certain financial information concerning the
Registrant's Tupperware operation, see Note 2 ("Distribution of
Tupperware to Shareholders") of the Notes to the Consolidated
Financial Statements of Premark International, Inc., appearing on
page 45 of the Annual Report to Shareholders for the year ended
December 30, 1995, 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
continuing business segments: the Food Equipment Group, the
Consumer Products Group, and the Decorative Products Group, as
well as through its Tupperware operation. A discussion of the
four business segments follows.
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 food preparation, cooking,
storage, and cleaning equipment. For the fiscal years 1995,
1994, and 1993, sales by the Group contributed approximately 35
percent, 33 percent, and 33 percent, respectively, of the sales
of the Registrant's businesses, including the Tupperware
operation. Revenues from foreign operations constituted
approximately 43 percent of the Group's 1995 sales.
The Group's 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, Foster, and Ungermann.
Ungermann, a German supplier of refrigerating equipment for the
baking industry with 1995 sales of about $23 million, was
acquired in 1995. The Hobart brand represents about 80% of the
Group's sales.
Food equipment products are sold to the retail food
industry, including supermarket chains, independent grocers,
delicatessens, bakeries, convenience and other food stores, and
to the foodservice industry, including independent restaurants,
fast-food chains, hospitals, correctional facilities, schools,
hotels, resorts, and airlines.
Food equipment products are distributed in more than 100
countries, either through company-owned operations or through
distributors, dealers or licensing arrangements covering many
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.
Major new products introduced by the Group in the United
States in 1995 included a Hobart Quantum scale/printer system,
the Medalist by Hobart line of value-priced mixers and
refrigeration equipment, a Hobart 1812 RS scale/slicer, Vulcan-
Hart thermal kettles, and Vulcan-Hart Euroline ranges. The Group
has announced introduction of a new line of coffee brewers in the
U.S. In Europe, the Group introduced in 1995 its Le Maillon
product which keeps food cool while being transported, and an
expanded Hobart utensil warewasher line.
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, although
costs have increased somewhat. In addition to manufacturing
certain component parts, the Group also purchases many component
parts, such as electrical and electronic components, castings,
hardware, fasteners, and bearings. Certain manufacturers utilize
tooling provided by the Group for such components.
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 nine manufacturing plants in Canada, France, Italy,
the United Kingdom, Germany, and Australia. Most of these plants
are owned. The group is building a warewashing plant in China,
with anticipated startup in 1997.
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
commercial food equipment industry is mature, with growth
primarily a function of new construction and replacement sales to
existing locations, as well as menu and format changes. 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. Another important competitive advantage
is the group's extensive service network throughout North America
and Europe, as well as in major markets in the Far East and Latin
America. Competition is also based on numerous other factors,
including product quality, performance, reliability, labor
savings, price, and energy conservation.
Miscellaneous
The Group had approximately $134 million and $132 million of
backlog orders at the end of 1995 and 1994, respectively, after
restatement of 1994 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 1995
backlog orders will be filled in 1996.
DECORATIVE PRODUCTS GROUP
Principal Products, Markets and Distribution
Wilsonart, Florida Tile and Hartco make up the Decorative
Products Group. The Decorative Products Group contributed 19
percent, 20 percent, and 20 percent of the sales of the
Registrant's businesses, including the Tupperware operation, for
the fiscal years 1995, 1994, and 1993, respectively.
Wilsonart manufactures decorative plastic laminate products
through a production process utilizing heated high pressure
presses. These products, sold principally under the Wilsonart
trademark in more than 700 colors, designs, and finishes, are
used for numerous interior surfacing applications, including
cabinetry, countertops, vanities, store fixtures, and furniture.
Approximately 50 percent of the Wilsonart 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. Wilsonart also manufactures specialty-grade
laminates, including chemical-resistant, wear-resistant, and
fire-retardant types. Among the specialized applications for
Wilsonart laminate are those in laboratory work surfaces, jetways
and naval vessels. In 1995, Wilsonart added 36 new designs to
its standard laminate product line, and announced introduction of
a high-pressure decorative laminate flooring line.
In addition to laminate products, Wilsonart sells a solid
surfacing product which is marketed under the Gibraltar brand.
The Company also produces and/or sells contact adhesives under
the Lokweld trademark, as well as Wilsonart decorative metallic
surfacings, and Wilsonart decorative edge moldings for
countertops and furniture. In 1995, the company began test
marketing a solid surfacing veneer product.
Wilsonart 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. Wilsonart is
seeking to expand its distribution network outside the U.S.
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. A small
portion of Florida Tile's sales are exports. Florida Tile also
imports foreign-produced tile products to supplement its line of
manufactured products.
Hartco manufactures and distributes high-quality,
prefinished and unfinished oak and prefinished 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, laminated two, three and five-ply
oak plank lineal flooring products, and 3/4-inch solid strip
prefinished and unfinished oak flooring, each of which is sold in
a variety of colors and finishes. Hartco's solid strip oak
flooring product was introduced in 1995. Hartco also
manufactures wood moldings, installation adhesives, and a full
line of proprietary floor care products to complement its line of
flooring products. These products are marketed under the Hartco
trademark to a nationwide network of independent wholesale floor
covering distributors, home improvement store chains, and retail
buying groups. A small portion of Hartco's sales are exports.
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 Wilsonart has not
experienced difficulties in obtaining sufficient quantities. The
principal raw materials used in Florida Tile products are clay,
talc, stains, and frit (ground glass), 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.
Wilsonart 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, and
are also purchased under a supply agreement. Wilsonart has 14
regional distribution centers which are geographically dispersed
throughout the United States. Stock items can be delivered
within 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 products are sold in highly competitive markets in
the United States. Wilsonart has approximately 48 percent of the
U.S. market for high pressure decorative laminates. Wilsonart
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 in a fragmented market. The Registrant believes
Florida Tile is the third largest U.S. tile manufacturer, with a
market share substantially less than the largest U.S.
manufacturer. Foreign-manufactured products account for
approximately 55 percent of the U.S. tile market. Important
competitive factors in the tile market include price, style,
quality, breadth of product line, and service. Hartco competes
with a number of other domestic and foreign suppliers of
prefinished wood flooring products. Important competitive
factors include price, fit, appearance, durability, the variety
of finishes and colors, and the complementary molding, adhesive
and floor care products. Wilsonart, Florida Tile, and Hartco
products compete with other types of surfacing and flooring
materials.
Miscellaneous
The Decorative Products Group maintains a continuing program
of product development. Its efforts emphasize product design,
performance, 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.
The group's products are sold for new construction and
remodeling, in both the residential and commercial markets. As a
consequence, the group's sales are affected by the seasonality of
the construction and remodeling industry.
Prices for paper and resin have increased substantially in
the last year. Lumber supplies are also at a premium price
compared with several years ago, although prices have moderated
from the high levels of 1993.
CONSUMER PRODUCTS GROUP
Principal Products, Markets and Distribution
The Consumer Products Group consists of West Bend and
Precor. It contributed 8 percent, 9 percent, and 8 percent of
the sales of the Registrant's business, including the Tupperware
operation, for the fiscal years 1995, 1994, and 1993,
respectively.
West Bend manufactures and sells small electric appliances
such as bread makers, electric skillets, slow cookers, woks, corn
poppers, beverage makers, and electronic timers, primarily under
the West Bend trademark. West Bend also manufactures and sells
high-quality stainless steel cookware. During 1995, West Bend
expanded its bread maker and drip coffeemaker lines. Precor
manufactures physical fitness equipment such as treadmills,
stationary bicycles, and low-impact climbers, all of which are
marketed under the Precor trademark. In 1995, Precor introduced
a new line of household treadmills, its Variable Aerobic Trainer
walking machine for fitness club use, and its Smart Weights hand-
held weights with treadmill remote control.
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.
While Precor products have been primarily for home use, in recent
years Precor has entered the fitness club market.
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 cost of
these raw materials has 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 typically 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 Consumer Products Group is dependent on two
customers for approximately one-third of its revenues.
TUPPERWARE
Principal Products, Markets and Distribution
Tupperware manufactures and markets a broad line of high
quality consumer products for the home and for personal care. In
fiscal years 1995, 1994, and 1993, Tupperware contributed
approximately 38 percent, 38 percent, and 39 percent,
respectively, of the sales of the Registrant's businesses.
The core of the product line continues to be food storage
containers which preserve freshness of food through the well-
known Tupperware seals. The line has expanded into kitchen, home
storage and organizing uses with products such as Modular Mates
and Fridge Stackables stackable storage containers, OneTouch
canisters, and many specialized containers. In recent years,
Tupperware has expanded its offerings in the food preparation and
service areas through the addition of a number of products,
including double colanders, tumblers and mugs, mixing and serving
bowls, serving centers, microwaveable cooking and serving
products, and kitchen utensils. It also has a line of children's
educational toys, serving products, and gifts.
Products sold by Tupperware are produced primarily by
Tupperware in its manufacturing facilities around the world. In
some markets, Tupperware sources certain products from third
parties and/or contracts with local manufacturers to manufacture
its products, utilizing high-quality molds which are supplied
by Tupperware. Promotional items provided at product
demonstrations include items obtained from outside sources.
Tupperware products are sold in the United States and in
more than 100 foreign countries. For the past five years, sales
in foreign countries represented on average 80 percent or more of
total Tupperware revenues. Market penetration varies
significantly throughout the world. "Developing" areas which
have low penetration, such as Latin America, Asia, and Eastern
Europe, provide significant growth potential. Tupperware's
strategy continues to include aggressive expansion into new
markets throughout the world during the balance of the decade.
New markets entered by Tupperware in 1995 included Poland and
several countries in southern Africa. Tupperware intends to
establish operations in 1996 in China, additional Eastern
European countries, and several Middle Eastern countries.
Tupperware is seeking approval to do business in India.
Tupperware's products are distributed worldwide through the
"direct selling" method of distribution, in which products are
sold to consumers outside traditional retail store channels.
Tupperware products are sold directly to distributors or dealers
throughout the world. Distributors are granted the right to
market Tupperware products using the demonstration method and
utilizing the Tupperware trademark. The vast majority of
Tupperware's distributorship system is composed of distributors,
managers, and dealers who are independent contractors and not
employees of Tupperware. In certain limited circumstances, in
order to maintain market penetration, rather than utilizing an
independent distributor, Tupperware owns the distributorship for
a period of time until an independent distributor can be
installed.
Key aspects of Tupperware's strategy are expanding its
business by enlarging the number of distributors, and increasing
the business of existing distributors. Under the Tupperware
system, distributors recruit, train and motivate a large sales
force to cover the distributor's geographic area. Managers are
developed and promoted by distributors to assist the distributor
in recruiting, training, and motivating dealers. Managers also
continue to hold their own demonstrations.
As of December 30, 1995, the Tupperware distribution system
had over 1,670 distributors, 44,000 managers and 790,000 dealers
worldwide. The dealer force continues to increase each year.
Tupperware primarily relies on the "demonstration" method of
sales, which is designed to enable the purchaser to appreciate
through demonstration the features and benefits of Tupperware
products. Demonstrations are held in homes, offices, social
clubs and other locations. In excess of 13 million
demonstrations were held worldwide in 1995. Tupperware products
are also promoted through monthly brochures mailed to persons
invited to attend various types of demonstrations. Sales of
Tupperware products are supported through a program of sales
promotions, sales and training aids and motivational conferences
for the independent sales force. Tupperware supports its sales
force with catalogs, magazine advertising and toll-free telephone
ordering, which helps increase its sales levels with hard-to-
reach customers.
The distribution of products to consumers is the
responsibility of distributors who are required to maintain their
own inventory, warehouse facilities and delivery systems. In
certain markets, Tupperware offers distributors the use of a
delivery system of direct product shipment to dealers or
consumers, which is intended to reduce the distributor's
investment in inventory and enable distributors to be more cost-
efficient.
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. Raw
material costs increased significantly during the year, but began
to decline in the fourth quarter. Research and development of
resins used in Tupperware products are performed by both
Tupperware and its suppliers.
Tupperware owns its principal executive office, located in
Orlando, Florida. Tupperware owns manufacturing plants in twelve
countries, including the United States, and leases an additional
plant outside the United States. Tupperware conducts a
continuing program of new product design and development at its
facilities in Florida, Japan and Belgium. Most of the principal
properties of Tupperware and its subsidiaries are owned, and none
of the owned principal properties is subject to any material
encumbrance.
Competition
There are two primary competitive factors which affect the
Tupperware business: 1) competition with other "direct sales"
companies for sales personnel and demonstration dates, and 2)
competition in the markets for food storage and serving
containers, toys, personal care items, and gifts in general. The
Registrant believes Tupperware holds a significant market share
in each of these markets in many countries. Tupperware's
competitive strategies are to continue to expand its direct
selling distribution system and to provide high quality, high
value products throughout the world.
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, and now own a number of
patents relating to their 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 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 1995, 1994
and 1993, the Registrant, including its Tupperware operation,
spent approximately $44 million, $44 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 $0.2 million through 1997 on
capital expenditures related to environmental facilities. In
1995, the Registrant had approximately $0.6 million of capital
expenditures for environmental facilities, and approximately $3.3
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 24,300 people, about 6,900 of whom are employed by
the Registrant's Tupperware operation. Approximately 18 percent
of the Registrant's 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 and warehouses 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 material to an understanding of
its 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.
For information concerning foreign and domestic operations
and export sales, see Note 7 ("Income Taxes") appearing on pages
46 and 47, and "Segments of Business by Geographical Areas" in
Note 10 ("Segments of the Business") appearing on page 51 of the
Annual Report to Shareholders for the year ended December 30,
1995, which are incorporated by reference into this Report by
Item 8 hereof. For information concerning Registrant's
discontinued Tupperware operation, see Note 2 ("Distribution of
Tupperware to Shareholders") appearing on page 45 of the Annual
Report to shareholders for the year ended December 30, 1995.
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
1, 1996). The Registrant expects that upon the distribution of
Tupperware stock Mr. Batts will resign his position as Chief
Executive Officer and assume the position of Tupperware's
Chairman of the Board and Chief Executive Officer, Mr. Ringler
will become the Registrant's Chief Executive Officer and continue
as President, and Messrs. Goings and Rose will resign their
positions with the Registrant and continue as Tupperware's
President and Chief Operating Officer and Tupperware's Vice
President of Taxes and Government Affairs, respectively. The
Registrant also expects that Ms. Richardson will resign her
position with the Registrant in June, 1996.
Name and Age Positions and Offices Held
and Principal Occupations or
Employment During Past Five
Years
Warren L. Batts (63) Chairman of the Board and
Chief Executive Officer.
James M. Ringler (50) 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 (50) Executive Vice President 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 (55) 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 (57) Corporate Vice President and
President of The West Bend
Company.
James C. Coleman (56) 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 (53) Senior Vice President,
General Counsel and
Secretary.
Lawrence B. Skatoff (56) Senior Vice President and
Chief Financial Officer since
September 1991. Prior
thereto, Mr. Skatoff
served as Vice President-
Finance of Monsanto Company.
L. John Fletcher (52) Vice President and Assistant
General Counsel.
Isabelle C. Goossen (44) Vice President, Financial
Relations since January
1996, after serving as Vice
President, Planning since
June 1994, Director of
Financial Relations since
1992, and prior thereto as
Director in the Planning
Department.
Robert W. Hoaglund (57) Vice President and
Controller since January
1996. Prior thereto Mr.
Hoaglund was Vice President,
Control & Information Systems.
Wendy R. Katz (38) Vice President, Internal
Audit since May 1992. Prior
thereto, Ms. Katz served in
various financial positions
at Tupperware.
William R. Reeb (48) Corporate Vice President
since November 1994, and
President and Chief Operating
Officer of Wilsonart 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 Wilsonart.
Lisa Kearns Richardson (43) Vice President and Treasurer
since April 1994, after
serving as Vice President,
Planning and Analysis since
February 1991. Prior
thereto, Ms. Richardson
served as Assistant
Controller.
James E. Rose, Jr. (53) Vice President, Taxes and
Government Affairs.
Anthony C. Scolaro (47) Vice President, Planning and
Business Development since
January 1996. Mr. Scolaro
was Corporate Development
Vice President at Ecolab,
Inc. from 1994 to 1996, and
was Assistant to the President
at Rykoff-Sexton, Inc. from
1989 to 1994.
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 have pending against
them 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 material adverse effect on the
Registrant's consolidated financial position, results of
operations, or any individual year's cash flow.
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 52 of the Annual Report
to Shareholders for the year ended December 30, 1995 is
incorporated by reference into this Report. The information set
forth in Note 13 ("Shareholders' Rights Plan") on page 53 of the
Annual Report to Shareholders for the year ended December 30,
1995 is incorporated by reference into this Report. As of March
4, 1996, the Registrant had 23,030 shareholders of record.
Item 6. Selected Financial Data
The information set forth under the caption "Selected
Financial Data" on pages 38 and 39 of the Annual Report to
Shareholders for the year ended December 30, 1995 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 33 through 37 of the Annual Report to Shareholders for the
year ended December 30, 1995 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 40 through 53, and on page 54, respectively,
of the Annual Report to Shareholders for the year ended December
30, 1995 are incorporated by reference into this Report:
Consolidated Statements of Operations, Cash Flows and
Shareholders' Equity--Years ended December 30, 1995, December 31,
1994 and December 25, 1993;
Consolidated Balance Sheet--December 30, 1995 and December
31, 1994;
Notes to the Consolidated Financial Statements; and
Report of Independent Accountants dated February 23, 1996.
(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 52 of the Annual Report to
Shareholders for the year ended December 30, 1995 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 2 through 4 of the
Proxy Statement relating to the Annual Meeting of Shareholders to
be held on May 1, 1996 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" on page 17 of the Proxy Statement relating to the
Annual Meeting of Shareholders to be held on May 1, 1996, and the
information on pages 11 through 16 of such Proxy Statement
relating to executive officers' compensation 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 6 and "Security
Ownership of Management" on page 5 of the Proxy Statement
relating to the Annual Meeting of Shareholders to be held on May
1, 1996 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 40 through 53, and on page 54, respectively, of
the Annual Report to Shareholders for the year ended December 30,
1995 are incorporated by reference into this Report by Item 8
hereof:
Consolidated Statements of Operations, Cash Flows and
Shareholders' Equity--Years ended December 30, 1995, December 31,
1994 and December 25, 1993;
Consolidated Balance Sheet--December 30, 1995 and December
31, 1994;
Notes to the Consolidated Financial Statements; and
Report of Independent Accountants dated February 23, 1996.
(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 33 of this Report; and
Schedule II--Valuation and Qualifying Accounts for the
three years ended December 30, 1995, page 34 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 contained
or incorporated by reference herein.
(a) (3) List of Exhibits: (numbered in accordance with Item 601
of Regulation S-K)
Exhibit
Number Description
* 3.1 Restated Certificate of Incorporation (Exhibit 3A
to the Registrant's Annual Report on Form 10-K for
the year ended December 30, 1991)
3.2 Amended By-Laws
* 4.1 Form of Common Stock Certificate (Exhibit 3 to the
Registrant's Current Report on Form 8-K dated
March 20, 1989)
* 4.2 Rights Agreement dated March 7, 1989 (Exhibit 1 to
the Registrant's Current Report on Form 8-K dated
March 20, 1989)
* 4.3 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)
* 4.4 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)
*10.1 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)
*10.2 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)
*10.3 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)
*10.4 $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)
10.5 Form of Distribution Agreement by and among
Premark International, Inc., Tupperware
Corporation and Dart Industries Inc.
10.6 Form of Tax Sharing Agreement by and between
Premark International, Inc. and Tupperware
Corporation.
COMPENSATORY PLANS OR ARRANGEMENTS [10G-10N]
10.7 Form of Employee Benefits and Compensation
Allocation Agreement by and between Premark
International, Inc. and Tupperware Corporation.
*10.8 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)
*10.9 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)
*10.10 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)
*10.11 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)
*10.12 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)
*10.13 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)
*10.14 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 1995 per share
earnings
13 Pages 30 through 54 of the Annual Report to
Shareholders of the Registrant for the year ended
December 30, 1995
21 Subsidiaries of the Registrant as of March 15,
1996
23 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
24 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
During the quarter ended December 30, 1995 the Registrant
filed a Current Report on Form 8-K dated November 2, 1995
reporting the Registrant's November 1, 1995 announcement of a
plan providing for, among other things, a pro-rata distribution
to Registrant's shareholders of all of the stock of a corporation
owning Registrant's Tupperware business.
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 February 23, 1996 appearing on page 54 of
the 1995 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
February 23, 1996
PREMARK INTERNATIONAL, INC.
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
For the three years ended December 30, 1995
(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 $ 18.2 $ 4.5 - $ (3.4) <F1> $ 20.2
December 0.5 <F2>
30, 1995 0.4 <F3>
Year ended $ 15.2 $ 6.1 - $ (3.8) <F1> $ 18.2
December 0.4 <F2>
31, 1994 0.3 <F3>
Year ended
December $ 16.5 $ 4.6 - $ (5.3) <F1> $ 15.2
25, 1993 (0.6) <F2>
Valuation allowance for deferred tax assets:
Year ended
December
30, 1995 $ 6.9 $ 0.4 - - $ 7.3
Year ended
December
31, 1994 $ 14.1 $ (7.2) - - $ 6.9
Year ended
December
25, 1993 $ 11.4 $ 2.7 - - $ 14.1
<FN>
<F1> Represents write-offs less recoveries
<F2> Foreign currency translation adjustment
<F3> Businesses 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 BATTS
Warren L. Batts
Chairman of the Board and
Chief Executive Officer
March 25, 1996
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 and Controller
Robert W. Hoaglund (Principal Accounting Officer)
* Director
William O. Bourke
* Director
Dr. Ruth M. Davis
* Director
Lloyd C. Elam, M.D.
* Director
E.V. Goings
* 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 25, 1996
EXHIBIT INDEX
Exhibit No. Description Page
11 A statement of computation of 27-28
1995 per share earnings
13 Pages 30 through 54 of the 29-66
Annual Report to Shareholders
of the Registrant for the year
ended December 30, 1995
22 Subsidiaries of the Registrant 67-69
as of March 10, 1995
23 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
24 Powers of Attorney 71-72
27 Financial Data Schedule 73