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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993 COMMISSION FILE NUMBER 1-5365
HANDY & HARMAN
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEW YORK 13-5129420
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
250 PARK AVENUE
NEW YORK, NY 10177
(ADDRESS OF PRINCIPAL
EXECUTIVE OFFICES)
Registrant's telephone number, including area code (212) 661-2400
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
NUMBER OUTSTANDING ON
TITLE OF EACH CLASS AS OF MARCH 25, 1994 WHICH REGISTERED
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Common Stock Par Value $1 Per Share............... 14,023,780 New York Stock Exchange
Common Stock Purchase Rights...................... 14,023,780 New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
None
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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 and (2) has been subject to such filing
requirement 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 the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. / /
The aggregate market value of the Common Stock outstanding and held by
non-affiliates (as defined in Rule 405 under the Securities Act of 1933) of the
registrant, based upon the closing sale price of the Common Stock on the New
York Stock Exchange on March 25, 1994 was $210,420,497.
Certain portions of the respective documents listed below have been
incorporated by reference into the indicated Part of this Annual Report on Form
10-K.
(1) Annual Report to Shareholders for fiscal year ended Part I, Item 1
December 31, 1993. Part II, Items 5-8
(2) Notice of Annual Meeting of Shareholders and Proxy Part III, Items 10-13
Statement dated March 30, 1994.
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PART I
ITEM 1. BUSINESS
GENERAL
Handy & Harman (hereinafter "H&H" or the "Company"), was
incorporated in the State of New York in 1905 as the successor to a partnership
which commenced business in 1867. Unless the context indicates otherwise, the
terms, "H&H" and the "Com- pany", refer to Handy & Harman and its consolidated
subsidiaries.
Historically, until commencing a diversification
program in 1966, the Company was engaged primarily in the manufacture of silver
and gold alloys in mill forms and the refining of precious metals from jewelry
and industrial scrap. The Company's markets were largely among silversmiths
and manufacturing jewelers, users of silver brazing alloys, and manufacturers
who required silver and gold primarily for the properties of those metals. As
part of these precious metals operations, the Company still publishes a daily
New York price for its purchases of silver and gold and now also publishes a
daily price for its fabricated silver and gold. The silver price is
recognized, relied on and used by others throughout the world. Further, the
review entitled "The Silver Market", published annually by the Company since
1916, is widely distributed in trade and financial centers in this country and
abroad.
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The diversification program has added lines of precious metals
products and various specialty manufacturing operations, including stainless
steel and specialty metal alloy products, for industrial users in a wide range
of applications which include the electrical, electronic, automotive original
equipment, office equipment, oil and other energy-related, refrigeration,
utility, telecommunications and medical industries.
The Company's business segments are (a) manufacturing and
selling precious metals products and providing refining services; (b)
manufacturing and selling products for the original equipment automotive
industry; (c) manufacturing and selling of non-precious metal wire and tubing
products; and (d) manufacturing and selling other specialty products.
Three-year financial data for the Company's business segments appear under the
caption "The Company's Business" on pages 18 and 19 of the Handy & Harman 1993
Annual Report to Shareholders (hereinafter referred to as the "Annual Report")
and are incorporated by reference herein.
One customer of the Automotive Original Equipment Group
represented 10.7%, 11.3%, and 10.5% of consolidated sales and service revenues
for 1993, 1992 and 1991, respectively. Export sales and revenues are not
significant in the total sales and revenues of any of the Company's business
segments.
In June 1991 the Company announced a major restructur-
ing program designed to strengthen the Company's balance sheet by
reducing debt and interest expense, to provide a sound basis for
improved profitability and to allow management to concentrate on
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those businesses which have demonstrated potential for above average growth.
The program called for divestiture of six businesses deemed to be non-core
operations that no longer fit within the Company's long-term strategies. The
six discontinued businesses were those involved in the manufacture of
automotive replacement parts, proprietary chemicals, metal powders, pressur-
ized vessels, coldheaded parts and specialized platinum group metals refinings
and products. See Notes 1 and 10 to the Consol- idated Financial Statements
included in the Annual Report and Management's Discussion and Analysis on page
21 of the Annual Report.
PRECIOUS METALS
PRODUCTS AND REFINING SERVICES
The operational structure of the parent company's precious
metals activities consists of two distinct profit centers: Products Operations
and Refining Operations. Both of these profit centers and the activities of
other precious metals subsidiaries are included in the following discussion of
the precious metals segment of the Company's business. Within the precious
metals segment of the Company's business, two principal classes of products
are manufactured: wire products and rolled products. The table on page 19 of
the Annual Report, showing percentages of gross shipments of these classes of
precious metals products which contributed 10% or more to total sales and
revenues, is incorporated herein by reference.
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In the following discussion of the Company's precious metals
products, the term "karat" refers to the amount of gold in a gold alloy. Pure
gold is 24-karat, and karat golds generally range between 10-karat (41.6%) and
18-karat (75%). The usual alloy metals are silver, copper, nickel and zinc.
By varying the other elements in the alloy, karat golds may be fabricated in a
number of colors including white, green, yellow and red. Sterling silver is an
alloy of silver, which contains a minimum of 92.5% pure silver.
The Company's profits from the products manufactured in
this segment are derived from the "value added" of processing and
fabricating, not from the purchase and resale, of precious
metals. In accordance with general practice in the industry,
prices to customers are a composite of two factors, namely, (1)
the value of the precious metal content of the product plus (2)
an amount referred to as "fabrication values" to cover the cost
of base metals, labor, overhead, financing and profit.
Wire Products - In the manufacture of the Company's
wire products, precious metal alloys are cast, extruded and then
drawn into wire. The Company's precious metal wire products con-
sist of karat golds, sterling and other alloys of silver, and
other precious metal alloys in drawn and coiled wire and rod
forms of differing diameters, ranging from .007 of an inch to
.25 of an inch. The Company also manufactures Easy Flo(R), Sil-
Fos(R) and other silver brazing alloys in wire form for making
permanent, strong, leak-tight joints of the metals joined.
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Brazing alloy wire is also sold in preformed rings and special
shapes. The Company's precious metal alloy wire products are
marketed for electrical conductive and contact applications in a
wide variety of industries, including the aerospace, electronics
and appliance industries. Manufacturing jewelers use the Com-
pany's precious metal wire in a wide range of production applica-
tions, including, for example, necklaces, bracelets, earring
parts and pins and clips.
Rolled Products - The Company's rolled products are
manufactured from karat golds, sterling and lesser alloys of silver, and alloys
of other precious metals in sheets, strips and bars of varying thicknesses,
widths and lengths. These precious metal rolled products range in standard
thickness from foils .0005 of an inch thick to strips or bars .375 of an inch
thick, and in standard widths from strips .125 of an inch wide to fifteen
inches wide. Rolled products are shipped in lengths up to many hundred feet.
The Company's rolled products include precious metals bonded with other metals
in bimetallic and tri- metallic strips which provide more versatile industrial
applica- tions at a lower cost than would be possible if a solid precious metal
or a precious metal alloy were used.
Because of the physical properties of precious metals
and precious metal alloys, the Company's rolled products have a
wide variety of applications by the Company's industrial cus-
tomers. The Company's rolled products are sold to silversmiths
for use as anodes in plating operations and for flatware and
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hollowware, to manufacturing jewelers for a variety of jewelry,
to mints and others for coins, commemorative medals and ingots,
to manufacturers of electrical and electronic devices for elec-
trical contacts and circuitry, to the nuclear power industry for
control assemblies, to the defense industry as foil for batter-
ies, and to the aerospace industry for use in guidance systems.
Powder Products - The Company produced a variety of precious
metal powders and flakes which it sold under various names, including
Silpowder(R) and Silflake(R), for use in the production of electronic parts and
in powder metal contacts, batteries, conductive coatings and other electrical
applications. It produced a line of silver oxide powders for use in chemical
silver alumina catalysts and in button batteries. The Company sold this
business in 1992 and effectively exited the business in December 1992.
However, it continues to produce silver/tin alloy powders for use in dental
applications and silver/copper alloy powders, sold under the names Easy-Flo(R)
and Sil-Fos(R), for use in industrial brazing applications.
Other Precious Metals Products - The Company produces grain
beads of various precious metal alloys by melting the metal and then pouring it
through water. Grain beads are distinguished from the Company's precious metal
powders, which are not as coarse and are produced by atomization spraying. The
major grain product is karat gold grain produced in a number of colors,
including white, green, yellow and red. The Company also produces grain in
various silver and other gold alloys.
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Electronic parts are selectively electroplated in order to
deposit gold, silver, palladium, and various base metals on such parts for
applications in computer connectors, semi-conductor devices and
telecommunication equipment.
Refining Services - The Company recovers precious metals from
waste and scrap generated by users of the Company's precious metals products
and other industrial users of precious metals, from metal-bearing objects
delivered for that purpose by non-manufacturing refining customers, and from
high grade mining concentrates and bullion. The Company receives a fee for
this service. After controlled sampling, assaying, weighing, deter- mination
of values and settlement with the customer, the Company purchases for its own
use the precious metal resulting from such refining, or, upon request by the
customer, returns an equivalent amount of metal to the customer.
Raw Materials - The raw materials for the Company's precious
metals products consist principally of silver, gold, copper, cadmium, zinc,
nickel, tin, and the platinum group metals in various forms. Gold and silver
constitute the major portion of the value of the raw materials involved. In
addition, the Company buys waste and scrap containing precious metals for
recycling and refining, as described above. The Company purchases all of its
precious metals at free market prices from either refining customers, primary
producers or bullion dealers. Over the past several years, the prices of gold
and silver have been subject to fluctuations, and are expected to continue to
be
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affected by world market conditions; however, the Company has not experienced
any problem in obtaining the necessary quantities of raw materials required for
this segment. In the normal course of business, the Company receives precious
metals from suppliers and customers. These metals are returnable in fabricated
or commercial bar form under agreed upon terms. Since precious metals are
fungible, the Company does not physically segregate supplier and customer
metals from its own inventories. Therefore, to the extent that supplier or
customer metals are used by the Company, the amount of inventory which the
Company must own is reduced. All raw materials used in this segment are
readily available from several sources. For a discussion of the Company's
inventory purchasing and pricing, and of the Company's practices to eliminate
the economic risk of precious metal price fluctuations, see "The Company's
Business" on page 18 of the Annual Report.
Working Capital Items - The Company maintains a con-
stant level of inventory of fine and fabricated precious metals
in various stages of processing and/or refining for customer
delivery requirements and for a continuous supply of raw mate-
rials. Such inventories are carried under the Last-In, First-
Out (LIFO) method of accounting. The LIFO carrying values are
substantially less than the market values of the inventories. In
the Notes to Consolidated Financial Statements, commencing on
page 28 of the Annual Report, see Note 7 for a comparison of the
cost and market values of the Company's precious metals invento-
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ries at December 31, 1992 and December 31, 1993 and see Note 2 for a discussion
of the effects of fluctuations in precious metals prices on the Company's
credit requirements. Both Notes are incorporated by reference herein.
Product Development, Patents and Trademarks - While the
Company holds a number of patents and trademarks related to its precious metals
products and processes, and is licensed under others, the precious metals
business, as a whole, is not depen- dent upon such patents. The Company's
trademarks are registered in the United States and in several foreign
countries. The Com- pany maintains a technical laboratory and staff in
connection with its precious metals operations and a portion of the work of
that staff is devoted to metallurgical products and development.
Distribution Facilities - The Company distributes precious
metals products directly to customers from its plants and service branches,
except that certain products, primarily brazing alloys, are distributed through
independent distributors throughout the United States and Canada. The Company
has a marketing organization trained to service its customers and dealers, to
solicit orders for its precious metal and related products, and to obtain
refining business. This organization markets all of the Company's refining
services and precious metals products and provides special technical assistance
with respect to precious metals through product engineers and other technical
personnel. The Company maintains customer service and sales offices at its
various manufacturing and processing plants
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and in Los Angeles and Chicago. It also has warehouse facilities to support
sales and distribution at each of its manufacturing and processing plants and
in Chicago and Los Angeles.
Competition - The Company is one of the leading fab-
ricators and refiners of precious metals. The Company currently
sells its precious metal fabricated products to approximately
5,000 customers throughout the United States and Canada. Al-
though there are no companies in the precious metals field whose
operations exactly parallel those of H&H in every area, there are
a number of competitors in each of the classes of the Company's
precious metals products. Many of these competitors also carry
on activities in other product lines in which the Company is not
involved. Competition is based on quality, service and price,
each of which is of equal importance.
MANUFACTURING OF AUTOMOTIVE
ORIGINAL EQUIPMENT
Through Handy & Harman Automotive Group, Inc. (the "Automotive
Group"), a subsidiary, the Company manufactures a wide variety of parts,
components and assemblies for the North American domestic automobile original
equipment manufacturers (the OEM market).
The Automotive Group produces a wide variety of tubular parts
for the OEM market from steel, stainless steel and other metals. Formed
and brazed tubing parts made from stainless and carbon steel and various other
metals are produced as air pipes,
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brake and fuel lines, components of fuel delivery systems, and other tubing
parts. The Automotive Group also produces small diameter cables and a variety
of control assemblies for automotive applications, including parking brake
cables, speedometer cables, various transmission cables and other mechanical
assemblies, made from steel and other materials. In addition, the Automotive
Group produces plastic parts, tubing, fuel lines, plastic component manifolds
and assemblies for the OEM market.
Raw Materials - The raw materials used in this segment
include stainless and carbon steels, tin, zinc, nickel and
various plastic compositions. Raw materials are purchased at
open market prices principally from domestic suppliers. The
Automotive Group has not experienced any problem in obtaining
sufficient quantities of raw materials.
Competition - There are many companies, domestic and foreign,
which manufacture products of the type manufactured by the Automotive Group.
Some are larger than the Company and many are larger than the Automotive
Group's operation with which they compete. Competition is based to a great
extent on price, quality, service and new product introduction. The domestic
automobile industry has traditionally engineered and manufactured in its own
plants a high percentage of the parts used in assem- bling its automobiles. In
recent years the industry has begun to purchase more parts and assemblies from
outside suppliers such as the Automotive Group. Although this trend continued
during 1993 there can be no assurance that it will do so in the future.
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Equally as important is the industry trend to use outside suppliers to
participate in the engineering and designing of some parts and assemblies.
Research and Development Center - The Automotive Group
operates a Research and Development Center in Auburn Hills, Michigan. The
Center contains approximately 40,000 square feet of floor space and
"state-of-the-art" equipment, including chassis rolls, dynamometers, vibration
equipment and flow testing equipment. A number of highly-qualified personnel
currently are employed at the Center which also houses automotive
administrative and sales personnel. They offer the capability to design,
fabricate and test complete fuel and cable control systems; to support the
Automotive Group and other units of the Company in the design, fabrication and
testing of automotive components; and to assist in the design and development
of new components and systems for automotive purposes.
Distribution - Essentially all of the Automotive Group's
original equipment products is sold directly to the major domestic automobile
companies through its sales and marketing employees.
MANUFACTURING OF WIRE AND TUBING PRODUCTS
The Company, through several subsidiaries, manufactures
a wide variety of non-precious metal wire and tubing products.
Small diameter precision drawn tubing fabricated from stainless
steel, nickel alloy and carbon and alloy steel is produced in
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many sizes and shapes to critical specifications for use in the semi-conductor,
aircraft, petrochemical, automotive, appliance, refrigeration and
instrumentation industries. Additionally, tubular product is manufactured for
the medical industry for use as implants, surgical supplies and
instrumentation. Stainless steel wire products are redrawn from rods for such
diverse applications as bearings, brushes, cable lashing, hose reinforcement,
nails, knitted mesh, wire cloth, air bags and antennas in the aerospace,
automotive, chemical, communications, marine, medical, petrochemical and other
industries.
Raw Materials - The raw materials used in this segment
include stainless and carbon steels, nickel alloys and a variety
of high performance alloys. The Company purchases all such raw
materials at open market prices from domestic and foreign suppli-
ers. The Company has not experienced any problem in obtaining
the necessary quantities of raw materials. Prices and availabil-
ity, particularly of raw materials purchased from foreign suppli-
ers, will be affected by world market conditions and governmental
policies.
Competition - There are many companies, domestic and
foreign which manufacture wire and tubing products of the types
manufactured by this segment. Competition is based on quality,
service, price and new product introduction, each of which is of
equal importance.
Distribution - Most of the products manufactured by
this segment are sold directly to customers through Company
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salesmen; however, some are sold through manufacturer's represen-
tatives and through distributors.
MANUFACTURING OF OTHER SPECIALTY PRODUCTS
Other Company subsidiaries manufacture a large number of other
specialty products for industrial use. Plastic and steel fittings and
connections, plastic pipe and non-ferrous thermite welding powders are produced
for the natural gas, electrical and water distribution industries. In 1993 the
Company sold its business which used powdered metals to make custom-molded
structural parts and assemblies from ferrous and non-ferrous powdered metals
for components and assemblies for office products, business machines, hand-held
power tools, hydraulic motors and pumps and lawn and garden equipment. Also in
1993, the Company sold the large industrial heat exchanger business which made
packaged power units for oil and gas, construction, agricultural and the skiing
industries.
Distribution - Most of the Company's specialty prod- ucts
comprising this segment are sold directly to customers through Company
salesmen, although some are sold by agents and manufacturer's representatives.
In particular, gas distribution supplies and fittings, thermite welding powders
and certain other products are sold primarily through manufacturer's
representa- tives to the ultimate users, although some sales also are made by
manufacturer's representatives to distributors.
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Raw Materials - The raw materials used in this segment include
various steel alloys, copper, tin, zinc, nickel and various plastic
compositions. The Company purchases all such raw materials at open market
prices primarily from domestic suppliers. The Company has not experienced any
problem in obtaining the necessary quantities of raw materials. Prices and
availability, particularly as to raw materials purchased from foreign
suppliers, will continue to be affected by world market conditions and
governmental policies.
Competition - There are many companies, domestic and foreign,
which manufacture products of the type manufactured by this segment. Some are
larger than the Company, and many are larger than the Company's operations with
which they compete. Competition in portions of this segment's business is
based primarily on price, and significant competition has come from
lower-priced foreign imports. Competition is otherwise generally based on
quality, service and price, each of which is of equal importance.
GOVERNMENT REGULATION
During the last fiscal year, the Company spent or committed
approximately $2,700,000 in complying with federal, state and local
occupational safety and health, environmental control and equal employment
opportunity laws and regulations. These expenditures included monies spent by
the Company in the clean-up of hazardous wastes and toxic substances under
Federal,
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State and local laws and regulations relating to protection of the environment.
Like many other large domestic manufacturing concerns, the Company's operations
may affect the environment. These operations may produce, process, and dispose
of materials and waste products which, under certain conditions, are toxic or
hazardous under such environmental laws and regulations. The Company expects
to make comparable expenditures and commitments during the current fiscal year,
provided that no further changes are made in such laws and regulations or in
their application. Such expenditures are not material to the competitive
position or financial condition of the Company; however, such laws and
regulations may require capital expenditures not now contemplated and may
result in increased operating costs. See Item 3 Legal Proceedings.
ENERGY
The Company requires significant amounts of electrici- ty,
natural gas, fuel oil and propane to operate its facilities. The Company has
few contracts covering natural gas or electrici- ty, but has some one-year
contracts for the delivery of fuel oil and/or propane at some facilities.
These contracts are the result of competitive bidding.
In an attempt to minimize the effects of any fuel shortages,
the Company has made a number of process and equipment changes to allow use of
alternate fuels in key processes, and the Company has equipped certain plants
with alternate fuel reserves
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intended to reduce any curtailment upon a local shortage. A general and
continuing shortage of such fuels, however, or a government allocation of
supplies resulting in a general reduc- tion in fuel supplies, could cause some
curtailment of produc- tion.
EMPLOYEES
The Company had 4,246 employees on December 31, 1993. Of
these, approximately 35% are covered by collective bargaining agreements which
expire at various times during the next three years.
ITEM 2. PROPERTIES
The Company has 32 operating plants in the United States,
Canada, Mexico, England, Brazil (50% owned) and Singapore (50% owned) with a
total area of approximately 2,500,000 square feet, including warehouse, office
and laboratory space, but not including the plants used by the Brazil or
Singapore operations and by the discontinued operations described in Notes 1
and 10 to the Consolidated Financial Statements included in the Annual Report.
The Company owns or leases sales, service and warehouse facilities at 4 other
locations in the United States and Canada, which, with the Company's executive
and general offices, have a total area of approximately 115,000 square feet.
The Company considers its manufacturing plants and
service facilities to be well maintained and efficiently
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equipped, and therefore suitable for the work being done. Theproductive
capacity and extent of utilization of the Company'sfacilities is dependent in
some cases on general business condi-tions and in other cases on the
seasonality of the utilization ofits products. Productivity can be expanded
readily to meet additional demands.
A description of the Company's principal plants by
industry segment is as follows:
Precious Metals
The Company's principal precious metal products and refining
services operations are conducted in Fairfield and South Windsor, Connecticut;
Attleboro, Massachusetts; and East Providence, Rhode Island. Other precious
metal operations are conducted in Phoenix, Arizona; North Attleboro,
Massachusetts; Cudahy, Wisconsin; Indianapolis, Indiana; Toronto, Canada and
Singapore (50% owned). The Company owns all these operating plants in fee.
Automotive Original Equipment
The headquarters of Handy & Harman Automotive Group, Inc. is
located in Auburn Hills, Michigan in the same building as the sales offices and
the Engineering Research and Development Center. Manufacturing facilities are
in Dover and Archbold, Ohio; Kendallville and Angola, Indiana; and Martinsburg,
West Virginia. All of this segment's operating plants are owned in fee. The
Auburn Hills building is leased. The Automotive Group
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also has operated in Mexico through a "maquiladora" arrangement and now has
"National Supplier Status."
Wire and Tubing
The headquarters of the wire portion of this segment is in
Cockeysville, Maryland and the headquarters of the tubing portion of this
segment is in Norristown, Pennsylvania. Manufacturing facilities are located
in Cockeysville, Maryland; Norristown, Pennsylvania; Willingboro and Middlesex,
New Jersey; Oriskany, New York; Camden, Delaware; Evansville, Indiana; Salto,
Sao Paulo, Brazil; Retford, Notts. and Liversedge, Yorkshire, England. All
these plants are owned in fee except the Retford and Salto plants which are
leased.
Other Specialty Products
The principal facilities currently engaged in the Company's
other specialty products businesses are located in Tulsa and Broken Arrow,
Oklahoma; and Bolton, England. The Oklahoma plants are owned in fee while the
Bolton plant is leased.
Company's Offices
The Company's executive offices are in New York, New York and
occupy 17,000 square feet under a lease. The Company has leased approximately
30,000 square feet in Rye, New York, for its general offices and approximately
8,500 square feet in New York, New York for its Corporate MIS Center.
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ITEM 3. LEGAL PROCEEDINGS
There are no pending legal proceedings to which the Company or
any of its subsidiaries is a party or which any of their property is the
subject, other than ordinary, routine litigation incidental to the business,
none of which individually or in the aggregate is material to the business or
financial condition of the Company, except as follows:
Palmer Well Fields
On February 25, 1991 the Massachusetts Department of
Environmental Protection ("MDEP") filed a lien against the property owned by
Pal-Rath Realty, Inc. (a subsidiary of the Company formerly named Rathbone
Corporation) which is located in Palmer, Massachusetts and is leased to
Rathbone Realty, Inc. whose affiliated corporation purchased the business and
assets of Pal-Rath Realty (other than the real estate) in May 1988. The lien
is for a claim in the amount of $1,131,105.31 for expenses allegedly incurred
in connection with the Palmer Well Fields known as the Galaxy Well Field and
Gravel Pack Well No. 2. A claim has also been made against a neighboring
industry and a lien similarly filed against that industry's property. The MDEP
has not allocated the alleged liability between Pal-Rath and the other
industry.
In June 1987, the Massachusetts Department of Environmental
Quality Engineering (now called the Massachusetts Department of Environmental
Protection) had issued a Notice of Responsibility to Rathbone (now Pal-Rath)
relating to alleged contami-
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nation of the Palmer Well Fields by Rathbone. Rathbone responded to that
letter and has from time to time assisted the MDEP and also conducted an
extensive investigation of the Rathbone proper- ty. In November 1990 the MDEP
had issued a letter requesting submittal of good faith offers by Pal-Rath and
its neighbor to pay past costs and to conduct further work. In January 1991
Pal-Rath responded that the MDEP's request for money was not supported by the
law or the facts and that it would not pay past costs but would conduct or
assist in further work. Discussions were continuing when the MDEP filed its
liens. Agreement has been reached to submit the matter to non-binding
mediation before the Massachusetts Office of Dispute Resolutions. The
mediation proceedings are continuing.
Although the final outcome of this matter cannot be assured,
the Company believes that it will not have a materially adverse affect on the
financial position of the Company.
Montvale, New Jersey Facility
On April 13, 1993, the Borough of Park Ridge, New Jersey sued
Handy & Harman Electronic Materials Corporation, a subsidiary ("HHEM"), and
Handy & Harman, in the Superior Court of New Jersey, Law Division, Bergen
County, asserting that a chemical used at a formerly owned facility in
Montvale, New Jersey, an adjoining municipality, had migrated and entered a
drinking water supply of Park Ridge. Park Ridge seeks reimbursement of
$2,190,437 expended in the construction and operation of water treatment
equipment for wells alleged to have been
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contaminated from the Montvale facility, and of $1,255,582 for future
expenditures over a 20-year period.
The lawsuit includes as additional defendants the prior owner
and operator of the Montvale facility, and a vendor of the chemical involved.
Evidence exists that contamination existed at Park Ridge prior to HHEM's
ownership of the site and that there are other sources of the contamination of
the Park Ridge wells. HHEM has worked with the New Jersey Department of
Environmental Protection and Energy to investigate and implement a remedy for
conditions at the site; and Park Ridge has requested the assistance of the New
Jersey DEPE to investigate whether there is a connection between the
contamination at the site and at the Park Ridge wells. HHEM is negotiating
with Park Ridge and the other defendants to agree on a settlement of all
outstanding issues.
Although the final outcome of this matter cannot be assured,
the Company believes that it will not have a materially adverse affect on the
financial position of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None during the fourth quarter of the year ended December 31,
1993.
EXECUTIVE OFFICERS OF THE COMPANY
As of March 30, 1994, the executive officers of the Company,
their ages, their present positions and offices, and
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their recent business experience and employment, are as follows:
Richard N. Daniel - Age 58; Chairman (since 1988) and Chief Executive
Officer of the Company (since 1983); a Director (since 1974).
Frank E. Grzelecki - Age 56; President and Chief Operating Officer of
the Company (since 1992); prior thereto Vice Chairman of the Board
(since 1989); a Director (since 1988); prior thereto a Management
Consultant (since 1986);
Paul E. Dixon - Age 49; Vice President, General Counsel and Secretary
(since 1993); prior thereto Vice President and General Counsel (since
1992); prior thereto Senior Vice President and General Counsel of
Warnaco Group (since prior to 1989).
Richard P. Schneider - Age 47; Vice President-Corporate Development
(since 1993); prior thereto Vice President-Corporate Development of
Sequa Corporation (a diversified manufacturing company) (since prior
to 1989).
Dennis C. Kelly - Age 42; Controller (since 1993) of the Company;
prior thereto Assistant Controller (since 1989); and prior thereto
Director of Internal Audit (since 1985).
23
25
James S. McElya - Age 46; Group Vice President (since 1992); prior
thereto President of Handy & Harman Automotive Group, Inc. (since
1987), a subsidiary.
John M. McLoone - Age 51; Vice President - Financial Services (since
1992); prior thereto Group Vice President, Information Technologies
for W. R. Grace & Co. (a multinational company) (since prior to 1989).
Stephen B. Mudd - Age 62; Vice President (since 1983) and Treasurer
(since 1977).
Robert M. Thompson - Age 61; Group Vice President (since 1984); prior
thereto President of Handy & Harman Tube Company, Inc. (1976 to 1984),
a subsidiary.
There are no family relationships between any of the executive
officers. The regular term of office for all executive officers is one year,
beginning on May 1. There are no arrangements or understandings between any of
the executive officers and any other person pursuant to which such officer was
elected to be an officer.
24
26
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
The information for this Item is incorporated by reference to
the section entitled "Stock Trading and Dividends" on page 19 of the Annual
Report and to Note 5 of the Notes to Consolidated Financial Statements included
in the Annual Report.
ITEM 6. SELECTED FINANCIAL DATA
The information for this Item is incorporated by reference to
the section entitled "Five Year Selected Financial Data" on page 20 of the
Annual Report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information for this Item is incorporated by reference to
the section entitled "Management's Discussion and Analysis" on pages 21 and 22
of the Annual Report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information for this Item is incorporated by reference to
the Consolidated Financial Statements contained on pages 23 through 26 of the
Annual Report and by reference to the Summary of Significant Accounting
Policies contained on page 27 of the Annual Report and the Notes to
Consolidated Financial Statements commencing on page 28 of the Annual Report
and by
25
27
reference to the Independent Auditors' Report set forth on page 34 of the
Annual Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not Applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The information for this Item is incorporated by reference to
the section entitled "Election of Directors," on pages 2 and 3 of the Company's
Proxy Statement, dated March 30, 1994 (the "Proxy Statement"), for the 1994
Annual Meeting of Shareholders, and by reference to the item captioned
"Executive Officers of the Company" at the end of Part I of this Annual Report
on Form 10-K. No person who was during the 1993 fiscal year a director,
officer or beneficial owner of more than ten percent of any class of equity
securities of the registrant failed to file on a timely basis reports required
by Section 16(a) of the Exchange Act of 1934, as amended.
ITEM 11. EXECUTIVE COMPENSATION
The information for this Item is incorporated by reference to
the sections entitled "Executive Compensation," "Base Salaries," "Annual
Incentive Awards for 1993," "Stock Options," "Long-Term Incentive Plan,"
"Compensation Committee
26
28
Report on Executive Compensation," "Pensions," "Compensation of Directors,"
"Employment Contracts and Termination of Employment and Change-in- Control
Agreements" on pages 4 to 10 of the Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information for this Item is incorporated by reference to
the sections entitled "Voting Rights and Principal Holders Thereof" and
"Election of Directors" on page 1 and pages 2 and 3, respectively, of the Proxy
Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information for this Item is incorporated by reference to
the section entitled "Election of Directors" on pages 2 and 3 of the Proxy
Statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
8-K
(a) Documents Filed as a Part of This Report
1. Financial Statements
The Consolidated Financial Statements, the Summary of
Significant Accounting Policies and Notes to Consolidated Finan- cial
Statements, the Independent Auditors' Report thereon and the items of
Supplementary Information incorporated by reference in
27
29
Part II, Item 8 of this Report are set forth at the respective pages of the
Annual Report indicated in the list contained on page 17 of the Annual Report,
which list is incorporated herein by reference to the Annual Report.
2. Financial Statement Schedules
The following Financial Statement Schedules are filed as a
part of this Report, beginning herein at the respective pages indicated:
(i) Report and Consent of Independent Auditors (page
F-1).
(ii) Schedule V - Property, Plant and Equipment (page
S-1).
(iii) Schedule VI - Accumulated Depreciation, Depletion
and Amortization of Property, Plant and
Equipment (page S-2).
(iv) Schedule VIII - Valuation and Qualifying Accounts
and Reserves (page S-3).
(v) Schedule X - Supplementary Income Statement
Information (page S-4).
All other Schedules are omitted because they are not applicable
or not required, or because the required information is included
in the Consolidated Financial Statements or Notes thereto.
3. Exhibits Required To Be Filed
The following exhibits required to be filed as part of
this Report have been included:
(3) Certificate of Incorporation and By-Laws.
28
30
(a) The Restated Certificate of Incorporation of Handy &
Harman (Filed as Exhibit 3(a) to the Company's 1989
Annual Report on Form 10-K and incorporated herein by
reference).
(b) The By-Laws as amended (Filed as Exhibit 3(b) to the
Company's 1990 Annual Report on Form 10-K and
incorporated herein by reference).
(4) Instruments defining the rights of security holders,
including indentures.
(a) Revolving Credit Agreement dated as of March 16, 1992
among the Company, certain financial institutions as
lenders, The Bank of Nova Scotia, The Chase Manhattan
Bank, N.A. and Chemical Bank, as Co-Agents and The
Bank of Nova Scotia as the Administrative Agent
(Filed as Exhibit 4(a) to the Company's 1991 Annual
Report on Form 10-K and incorporated herein by
reference).
(b) Short Term Revolving Credit Agreement dated as of
March 16, 1992 among the Company, certain financial
institutions as lenders, The Bank of Nova Scotia, The
Chase Manhattan Bank, N.A. and Chemi- cal Bank, as
Co-Agents and The Bank of Nova Scotia, as the
Administrative Agent (Filed as Ex- hibit 4(b) to the
Company's 1991 Annual Report on Form 10-K and
incorporated herein by reference).
29
31
(c) Amendment to Revolving Credit Agreement dated as of
March 16, 1992 among the Company, certain financial
institutions as lenders, The Bank of Nova Scotia, The
Chase Manhattan Bank, N.A. and Chemical Bank, as
Co-Agents and The Bank of Nova Scotia as the
Administrative Agent (filed as Exhibit 4(e) to the
Company's 1992 Annual Report on Form 10-K and
incorporated herein by reference).
(d) Amendment to Short Term Revolving Credit Agreement
dated as of March 16, 1992 among the Company, certain
financial institutions as lenders, The Bank of Nova
Scotia, The Chase Manhattan Bank, N.A. and Chemical
Bank, as Co-Agents and The Bank of Nova Scotia, as
the Administrative Agent (filed as Exhibit 4(d) to
the Company's Annual Report on Form 10- K and
incorporated herein by reference).
(e) Amendment to Revolving Credit Agreement dated
February 4, 1993 among the Company, certain financial
institutions as lenders, The Bank of Nova Scotia, The
Chase Manhattan Bank, N.A. and Chemical Bank, as
Co-Agents and The Bank of Nova Scotia as the
Administrative Agent.
(f) Amendment to Short Term Revolving Credit Agreement
dated February 4, 1993 among the Company, certain
financial institutions as lenders, The Bank of
30
32
Nova Scotia, The Chase Manhattan Bank, N.A. and
Chemical Bank, as Co-Agents and the Bank of Nova
Scotia, as the Administrative Agent.
(g) Amendment to Revolving Credit Agreement dated July 1,
1993 among the Company, certain financial
institutions as lenders, The Bank of Nova Scotia, The
Chase Manhattan Bank, N.A. and Chemical Bank, as
Co-Agents and The Bank of Nova Scotia as the
Administrative Agent.
(h) Amendment to Short Term Revolving Credit Agreement
dated July 1, 1993 among the Company, certain
financial institutions as lenders, The Bank of Nova
Scotia, The Chase Manhattan Bank, N.A. and Chemical
Bank, as Co-Agents and the Bank of Nova Scotia, as
the Administrative Agent.
No other required to be filed. The Company agrees
to furnish to the Securities and Exchange Commission upon its
request therefor a copy of each instrument omitted pursuant
to Item 601(b)(4)(iii) of Regulation S-K.
(10) Material contracts.
(a) 1982 Stock Option Plan (Filed as Exhibit 1 to the
Company's Registration Statement on Form S-8
(Registration No. 2-78264) under the Securities Act
of 1933 and incorporated herein by reference).
31
33
(b) Amendment to 1982 Stock Option Plan approved in
December 1988 (Filed as Exhibit 10(a) to the
Company's Report on Form 8-K for December 1988 and
incorporated herein by reference).
(c) Management Incentive Plan, as amended February 26,
1981 (Filed as Exhibit 10(b) to the Company's 1980
Annual Report on Form 10-K and incorporated herein
by reference thereto).
(d) Amendment to Management Incentive Plan approved in
December 1988 (Filed as Exhibit 10(d) to the
Company's Report on Form 8-K for December 1988 and
incorporated herein by reference).
(e) Amendment to Management Incentive Plan approved in
October 1991 (Filed as Exhibit 10(e) to the Company's
1991 Annual Report on Form 10-K and incorporated
herein by reference).
(f) Deferred Fee Plan For Directors, as amended February
26, 1981 (Filed as Exhibit 10(c) to the Company's
1980 Annual Report on Form 10-K and incorporated
herein by reference thereto).
(g) Form of Executive Agreement entered into with the
Company's executive officers in September 1986 (Filed
as Exhibit 10(d) to the Company's 1986 Annual Report
on Form 10-K and incorporated herein by reference
thereto).
32
34
(h) Amendment to Executive Agreement approved in December
1988 (Filed as Exhibit 10(b) to the Company's Report
on Form 8-K for December 1988 and incorporated herein
by reference).
(i) 1988 Long-Term Incentive Plan (Filed as Exhibit 10(h)
to the Company's 1988 Annual Report on Form 10-K and
incorporated herein by reference).
(j) Amendment to 1988 Long-Term Incentive Plan approved
in December 1988 (Filed as Exhibit 10(c) to the
Company's Report on Form 8-K for December 1988 and
incorporated herein by reference).
(k) Amendment to 1988 Long-Term Incentive Plan approved
in June 1989 (Filed as Exhibit 10(j) to the Company's
1989 Annual Report on Form 10-K and incorporated
herein by reference).
(l) Agreement dated as of May 1, 1989 between the Company
and R. N. Daniel (Filed as Exhibit 10(k) to the
Company's 1989 Annual Report on Form 10-K and
incorporated herein by reference).
(m) Amendment to Agreement between the Company and R. N.
Daniel approved by the Company on May 11, 1993.
(n) Supplemental Executive Retirement Plan approved by
the Company in September, 1989 (Filed as Exhibit
10(l) to the Company's 1989 Annual Report on Form
10-K and incorporated herein by reference).
33
35
(o) Outside Directors Stock Option Plan (Filed as Exhibit
10(m) to the Company's 1990 Annual Report on Form
10-K and incorporated herein by reference.
(p) Amended and Restated Joint Venture Agreement dated as
of June 1, 1990 by and between Allen Heat Transfer
Products Inc. and Handy & Harman Radiator
Corporation (Filed as Exhibit (2) to the Company's
Report on Form 8-K for June 1990 and incorporated
herein by reference).
(q) Handy & Harman Long-Term Incentive Stock Option Plan
(Filed as Exhibit 10(p) to the Company's 1991 Annual
Report on Form 10-K and incorporated herein by
reference).
(r) Handy & Harman Supplemental Executive Plan (Filed as
Exhibit 10(q) to the Company's 1992 Annual Report on
Form 10-K and incorporated herein by reference).
(11) Statement re computation of per share earnings.
Incorporated by reference to item (g) of Summary of
Significant Accounting Policies on page 27 of the
Annual Report.
(13) Pages 17 through 34 of the Company's Annual Report to
Shareholders for 1993. Except for those portions
which are expressly incorporated by reference in this
Annual Report on Form 10-K, this exhibit is furnished
for the information of the
34
36
Commission and is not deemed to be filed as part of
this Annual Report on Form 10-K.
(22) List of Subsidiaries of the Company is filed as
Exhibit 22 to this Annual Report on Form 10-K.
(24) Report and Consent of Independent Auditors. Included
as part of the Report and Consent of Independent
Auditors on page F-1 filed with the Financial
Statement Schedules as part of this Annual Report on
Form 10-K pursuant to Part IV hereof and incorporated
herein by reference thereto.
(b) Reports on Form 8-K
The Company did not file a Report on Form 8-K during the
fourth quarter of the fiscal year ended December 31, 1993.
For the purposes of complying with the amendments to the rules
governing Form S-8 (effective July 13, 1990) under the Securities Act of 1933,
the undersigned registrant hereby under- takes as follows, which undertaking
shall be incorporated by reference into registrant's Registration Statements on
Form S-8 Nos. 2-78264 (filed July 1, 1982), 33-37919 (filed November 21, 1990)
33-43709 (filed October 31, 1991):
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange
35
37
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the regis- trant in the successful defense of any action, suit or proceed- ing)
is asserted by such director, officer or controlling person in connection with
the securities being registered, the regis- trant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such indemnifica- tion
by it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
36
38
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Handy & Harman has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
HANDY & HARMAN
Dated: March 24, 1994 By /s/ R. N. Daniel
----------------------
R.N. Daniel
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 Company, in the capacities and on the respective dates indicated.
Signature Title Date
--------- ----- ----
/s/ R.N. Daniel Chairman and Director 3/24/94
- ------------------ (Principal Executive Officer)
(R.N. Daniel)
/s/ F.E. Grzelecki President and Director 3/24/94
- ------------------- (Chief Operating Officer)
(F.E. Grzelecki)
/s/ J.M. McLoone Vice President - Financial 3/24/94
- ----------------- Services
(J.M. McLoone) (Principal Financial Officer)
/s/ D.C. Kelly Controller (Principal 3/24/94
- -------------------
(D.C. Kelly) Accounting Officer)
/s/ C.A. Abramson Director 3/24/94
- ------------------
(C.A. Abramson)
/s/ R.E. Cornelia Director 3/24/94
- ------------------
(R.E. Cornelia)
/s/ G.G. Garbacz Director 3/24/94
- -------------------
(G.G. Garbacz)
Director
- -------------------
(G.M. Nichols)
/s/ H.P. Sotos Director 3/24/94
- -------------------
(H.P. Sotos)
/s/ L.M. Woods Director 3/24/94
- ------------------
(L.M. Woods)
37
39
F-1
REPORT AND CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Handy & Harman:
Under the date of February 18, 1994 we reported on the consolidated balance
sheet of Handy & Harman and Subsidiaries as of December 31, 1993 and 1992 and
the related consolidated statements of income, shareholders' equity and cash
flows for each of the years in the three-year period ended December 31, 1993,
as contained in the 1993 Annual Report to Shareholders. These consolidated
financial statements and our report thereon are incorporated by reference in
the Annual Report on Form 10-K for the year 1993. In connection with our audit
of the aforementioned consolidated financial statements, we also audited the
related consolidated financial statement schedules on pages S-1, S-2, S-3 and
S-4. These consolidated financial statement schedules are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these consolidated financial statement schedules based on our audits.
In our opinion, such consolidated financial statement schedules, when
considered in relation to the basic consolidated financial statements taken as
a whole, present fairly in all material respects the information set forth
therein.
We also consent to the incorporation by reference in the Registration
Statements on Form S-8 (Registration Nos. 2-78264, 33-37919 and 33-43709) of
Handy & Harman of our report dated February 18, 1994.
KPMG PEAT MARWICK
New York, New York
March 24, 1994
40
HANDY & HARMAN AND SUBSIDIARIES S-1
SCHEDULE V
PROPERTY, PLANT AND EQUIPMENT
(Thousands of Dollars)
Balance, Additions - at Cost Balance,
-------------------------
Beginning Other Retirements Translation Close
of Period Changes Expenditures or Sales Adjustment(b) of Period
- ------------------------------------------------------------------------------------------------------------------------------------
Classification
Year ended December 31, 1993
Land $ 5,309 $ 13 $ 371 $ (18) $ 4,933
Buildings and improvements 60,664 1,163 549 (115) 61,163
Machinery and equipment 158,726 (94) 9,883 12,527 (193) 155,795
Furniture and fixtures
(includes business machines) 14,151 (11) 2,146 670 (31) 15,585
Automotive 1,009 136 174 (1) 970
Improvements to leased property 4,013 88 56 (6) 4,039
Construction in progress 5,221 (40) 1,718 - - 6,899
- ------------------------------------------------------------------------------------------------------------------------------------
$249,093 (145)(c) $15,147 $14,347 $ (364) $249,384
====================================================================================================================================
Classification
Year ended December 31, 1992
Land $ 5,491 - - $ 132 $ (50) $ 5,309
Buildings and improvements 61,358 $ (1,105) $ 2,091 1,337 (343) 60,664
Machinery and equipment 152,090 (167) 14,258 6,335 (1,120) 158,726
Furniture and fixtures
(includes business machines) 13,868 27 1,964 1,538 (170) 14,151
Automotive 851 8 351 192 (9) 1,009
Improvements to leased property 4,177 153 799 1,053 (63) 4,013
Construction in progress 9,866 431 (5,023)(a) 53 - 5,221
- ------------------------------------------------------------------------------------------------------------------------------------
$247,701 $ (653)(d) $14,440 $10,640(e) $ (1,755) $249,093
====================================================================================================================================
Classification
Year ended December 31, 1991
Land $ 9,017 $( 2,748) $ 11 $ 787 $ ( 2) $ 5,491
Buildings and improvements 76,392 (10,389) 369 4,998 ( 16) 61,358
Machinery and equipment 167,534 ( 8,824) 7,391 13,899 (112) 152,090
Furniture and fixtures
(includes business machines) 14,943 ( 534) 1,011 1,532 ( 20) 13,868
Automotive 874 ( 93) 276 206 - 851
Improvements to leased property 5,133 ( 258) 21 708 ( 11) 4,177
Construction in progress 6,719 ( 390) 3,649 112 - 9,866
- ------------------------------------------------------------------------------------------------------------------------------------
$280,612 $(23,236)(c) $12,728 $22,242 $ (161) $247,701
====================================================================================================================================
(a) Amounts represent transfers to depreciable assets in excess of new
construction in progress.
(b) The translation adjustment results from restating the property, plant
and equipment of the Company's Canadian and British subsidiaries in
U.S. dollars.
(c) Amounts represent reclass of discontinued operations property, plant
and equipment.
(d) Amounts represent reclass of discontinued operations property, plant
and equipment and contribution of machinery and equipment to Joint
Venture.
(e) Amounts include reclass of machinery and equipment to assets held for
resale.
Note: The depreciation and amortization policy is to provide for retirement
of property at the end of its estimated useful life, determined as
follows:
Company Subsidiaries
-------- ------------
Buildings 50 years 10-40 years
Building improvements 10 years 10-20 years
Machinery and equipment 14 years 3-20 years
Furniture and fixtures 20 years 2-13 years
Business machines 8 years 7-10 years
Automotive 4 years 2-8 years
Improvements to
leased property Life of lease Life of lease
41
HANDY & HARMAN AND SUBSIDIARIES S-2
SCHEDULE VI
ACCUMULATED DEPRECIATION, DEPLETION,
AND AMORTIZATION OF
PROPERTY, PLANT AND EQUIPMENT
(Thousands of Dollars)
Additions
---------------------
Balance, Charged to Balance,
Beginning Other Costs and Retirements Translation Close
of Period Changes Expenses or Sales Adjustment(a) of Period
- ----------------------------------------------------------------------------------------------------------------------------
Classification
Year ended December 31, 1993
Buildings and improvement $ 24,252 $ 2,072 $ 523 (44) 25,757
Machinery and equipment 102,816 10,666 9,521 (137) 103,824
Furniture and fixtures
(includes business machines) 9,409 1,491 520 (22) 10,358
Automotive 637 193 154 (1) 675
Improvements to leased property 2,374 237 56 (5) 2,550
- ----------------------------------------------------------------------------------------------------------------------------
$139,488 $14,659 $10,774 $ (209) $143,164
============================================================================================================================
Year ended December 31, 1992
Buildings and improvements $ 22,862 $ 2,132 $ 654 $ ( 88) $ 24,252
Machinery and equipment 99,367 $ (1,058) 10,094 4,948 (639) 102,816
Furniture and fixtures
(includes business machines) 9,510 27 1,413 1,442 ( 99) 9,409
Automotive 523 8 269 158 ( 5) 637
Improvements to leased property 3,076 153 249 1,053 ( 51) 2,374
- ----------------------------------------------------------------------------------------------------------------------------
$135,338 $ 870)(c) $14,157 $ 8,255(d) $( 882) $139,488
============================================================================================================================
Year ended December 31, 1991
Buildings and improvement $ 26,252 $ (5,487) $ 2,535 $441 $3 $ 22,862
Machinery and equipment 104,126 (8,121) 11,147 7,734 (51) 99,367
Furniture and fixtures
(includes business machines 9,271 (478) 1,409 687 (5) 9,510
Automotive 660 (78) 110 168 (1) 523
Improvements to leased property 3,053 (255) 312 27 (7) 3,076
- ----------------------------------------------------------------------------------------------------------------------------
$143,362 $(14,419)(b) $15,513 $ 9,057 $ (61) $135,338
============================================================================================================================
(a) The translation adjustment results from restating the accumulated
depreciation of the Company's Canadian and British subsidiaries in U.S.
dollars.
(b) Amounts represent reclass for discontinued operations property, plant and
equipment.
(c) Amounts represent reclass for discontinued operations property, plant and
equipment and contribution of machinery and equipment to Joint Venture.
(d) Amounts include reclass of machinery and equipment to assets held for
resale.
42
HANDY & HARMAN AND SUBSIDIARIES S-3
SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(Thousands of Dollars)
Balance, Balance,
Beginning Additions Deductions Close
of Period (a) from Reserve of Period
=========================================================================================================================
Description
Allowance for doubtful
accounts receivable
(deducted from accounts
receivable):
Year ended
December 31, 1993 $3,325 $1,195 $ 799 $3,721
=========================================================================================================================
Year ended
December 31, 1992 $3,347 $ 627 $ 649 $3,325
=========================================================================================================================
Year ended
December 31, 1991 $1,165(c)
$3,400 $2,482 $1,370(b) $3,347
=========================================================================================================================
1993 1992 1991
- -------------------------------------------------------------------------------------------------------------------------
(a) Provision for doubtful
accounts - charged to
costs and expenses $1,195 $ 627 $2,482(1)
=========================================================================================================================
(1) 1,530 of the provision for doubtful accounts was part of continuing
operations' reserve for restructuring, nonrecurring and unusual
charges.
(b) Items determined to be uncollectible, less recovery of amounts reviously
written off.
(c) $1,165 of allowance for doubtful accounts receivable reclassed to current
assets of discontinued operations.
43
HANDY & HARMAN AND SUBSIDIARIES S-4
SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
Three Years Ended December 31, 1993
(Thousands of Dollars)
Charged to Costs
and Expenses
1993 1992 1991
- ---------------------------------------------------------------------------------------------------
Item (a)
Maintenance and repairs $11,065 $11,589 $11,712
===================================================================================================
44
EXHIBIT INDEX
Exhibit
Number Description
------- -----------
(3) Certificate of Incorporation and By-Laws.
(a) The Restated Certificate of Incorporation of Handy &
Harman (Filed as Exhibit 3(a) to the Company's 1989
Annual Report on Form 10-K and incorporated herein by
reference).
(b) The By-Laws as amended (Filed as Exhibit 3(b) to the
Company's 1990 Annual Report on Form 10-K and
incorporated herein by reference).
(4) Instruments defining the rights of security holders,
including indentures.
(a) Revolving Credit Agreement dated as of March 16, 1992
among the Company, certain financial institutions as
lenders, The Bank of Nova Scotia, The Chase Manhattan
Bank, N.A. and Chemical Bank, as Co-Agents and The
Bank of Nova Scotia as the Administrative Agent
(Filed as Exhibit 4(a) to the Company's 1991 Annual
Report on Form 10-K and incorporated herein by
reference).
(b) Short Term Revolving Credit Agreement dated as of
March 16, 1992 among the Company, certain financial
institutions as lenders, The Bank of Nova Scotia, The
Chase Manhattan Bank, N.A. and Chemi- cal Bank, as
Co-Agents and The Bank of Nova Scotia, as the
Administrative Agent (Filed as Ex- hibit 4(b) to the
Company's 1991 Annual Report on Form 10-K and
incorporated herein by reference).
(c) Amendment to Revolving Credit Agreement dated as of
March 16, 1992 among the Company, certain financial
institutions as lenders, The Bank of Nova Scotia, The
Chase Manhattan Bank, N.A. and Chemical Bank, as
Co-Agents and The Bank of Nova Scotia as the
Administrative Agent (filed as Exhibit 4(e) to the
Company's 1992 Annual Report on Form 10-K and
incorporated herein by reference).
(d) Amendment to Short Term Revolving Credit Agreement
dated as of March 16, 1992 among the Company, certain
financial institutions as lenders, The Bank of Nova
Scotia, The Chase Manhattan Bank, N.A. and Chemical
Bank, as Co-Agents and The Bank of Nova Scotia, as
the Administrative Agent (filed as Exhibit 4(d) to
the Company's Annual Report on Form 10- K and
incorporated herein by reference).
(e) Amendment to Revolving Credit Agreement dated
February 4, 1993 among the Company, certain financial
institutions as lenders, The Bank of Nova Scotia, The
Chase Manhattan Bank, N.A. and Chemical Bank, as
Co-Agents and The Bank of Nova Scotia as the
Administrative Agent.
(f) Amendment to Short Term Revolving Credit Agreement
dated February 4, 1993 among the Company, certain
financial institutions as lenders, The Bank of
Nova Scotia, The Chase Manhattan Bank, N.A. and
Chemical Bank, as Co-Agents and the Bank of Nova
Scotia, as the Administrative Agent.
(g) Amendment to Revolving Credit Agreement dated July 1,
1993 among the Company, certain financial
institutions as lenders, The Bank of Nova Scotia, The
Chase Manhattan Bank, N.A. and Chemical Bank, as
Co-Agents and The Bank of Nova Scotia as the
Administrative Agent.
(h) Amendment to Short Term Revolving Credit Agreement
dated July 1, 1993 among the Company, certain
financial institutions as lenders, The Bank of Nova
Scotia, The Chase Manhattan Bank, N.A. and Chemical
Bank, as Co-Agents and the Bank of Nova Scotia, as
the Administrative Agent.
No other required to be filed. The Company agrees
to furnish to the Securities and Exchange Commission upon its
request therefor a copy of each instrument omitted pursuant
to Item 601(b)(4)(iii) of Regulation S-K.
45
(10) Material contracts.
(a) 1982 Stock Option Plan (Filed as Exhibit 1 to the
Company's Registration Statement on Form S-8
(Registration No. 2-78264) under the Securities Act
of 1933 and incorporated herein by reference).
(b) Amendment to 1982 Stock Option Plan approved in
December 1988 (Filed as Exhibit 10(a) to the
Company's Report on Form 8-K for December 1988 and
incorporated herein by reference).
(c) Management Incentive Plan, as amended February 26,
1981 (Filed as Exhibit 10(b) to the Company's 1980
Annual Report on Form 10-K and incorporated herein
by reference thereto).
(d) Amendment to Management Incentive Plan approved in
December 1988 (Filed as Exhibit 10(d) to the
Company's Report on Form 8-K for December 1988 and
incorporated herein by reference).
(e) Amendment to Management Incentive Plan approved in
October 1991 (Filed as Exhibit 10(e) to the Company's
1991 Annual Report on Form 10-K and incorporated
herein by reference).
(f) Deferred Fee Plan For Directors, as amended February
26, 1981 (Filed as Exhibit 10(c) to the Company's
1980 Annual Report on Form 10-K and incorporated
herein by reference thereto).
(g) Form of Executive Agreement entered into with the
Company's executive officers in September 1986 (Filed
as Exhibit 10(d) to the Company's 1986 Annual Report
on Form 10-K and incorporated herein by reference
thereto).
(h) Amendment to Executive Agreement approved in December
1988 (Filed as Exhibit 10(b) to the Company's Report
on Form 8-K for December 1988 and incorporated herein
by reference).
(i) 1988 Long-Term Incentive Plan (Filed as Exhibit 10(h)
to the Company's 1988 Annual Report on Form 10-K and
incorporated herein by reference).
(j) Amendment to 1988 Long-Term Incentive Plan approved
in December 1988 (Filed as Exhibit 10(c) to the
Company's Report on Form 8-K for December 1988 and
incorporated herein by reference).
(k) Amendment to 1988 Long-Term Incentive Plan approved
in June 1989 (Filed as Exhibit 10(j) to the Company's
1989 Annual Report on Form 10-K and incorporated
herein by reference).
(l) Agreement dated as of May 1, 1989 between the Company
and R. N. Daniel (Filed as Exhibit 10(k) to the
Company's 1989 Annual Report on Form 10-K and
incorporated herein by reference).
(m) Amendment to Agreement between the Company and R. N.
Daniel approved by the Company on May 11, 1993.
(n) Supplemental Executive Retirement Plan approved by
the Company in September, 1989 (Filed as Exhibit
10(l) to the Company's 1989 Annual Report on Form
10-K and incorporated herein by reference).
(o) Outside Directors Stock Option Plan (Filed as Exhibit
10(m) to the Company's 1990 Annual Report on Form
10-K and incorporated herein by reference.
(p) Amended and Restated Joint Venture Agreement dated as
of June 1, 1990 by and between Allen Heat Transfer
Products Inc. and Handy & Harman Radiator
Corporation (Filed as Exhibit (2) to the Company's
Report on Form 8-K for June 1990 and incorporated
herein by reference).
(q) Handy & Harman Long-Term Incentive Stock Option Plan
(Filed as Exhibit 10(p) to the Company's 1991 Annual
Report on Form 10-K and incorporated herein by
reference).
(r) Handy & Harman Supplemental Executive Plan (Filed as
Exhibit 10(q) to the Company's 1992 Annual Report on
Form 10-K and incorporated herein by reference).
46
(11) Statement re computation of per share earnings.
Incorporated by reference to item (g) of Summary of
Significant Accounting Policies on page 27 of the
Annual Report.
(13) Pages 17 through 34 of the Company's Annual Report to
Shareholders for 1993. Except for those portions
which are expressly incorporated by reference in this
Annual Report on Form 10-K, this exhibit is furnished
for the information of the
Commission and is not deemed to be filed as part of
this Annual Report on Form 10-K.
(22) List of Subsidiaries of the Company is filed as
Exhibit 22 to this Annual Report on Form 10-K.
(24) Report and Consent of Independent Auditors. Included
as part of the Report and Consent of Independent
Auditors on page F-1 filed with the Financial
Statement Schedules as part of this Annual Report on
Form 10-K pursuant to Part IV hereof and incorporated
herein by reference thereto.