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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 August 31, 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 0-17051
TUSCARORA INCORPORATED
(Exact name of registrant as specified in its charter)
Pennsylvania 25-1119372
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
800 Fifth Avenue
New Brighton, Pennsylvania 15066
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 412-843-8200
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, without par value
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 requirements for at least the past 90 days.
Yes __X__ No _____.
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. / /
The registrant estimates that as of October 27, 1995, the
aggregate market value of the shares of its Common Stock held by non-affiliates
of the registrant was approximately $104,417,616.
As of October 27, 1995, 6,184,486 shares of Common Stock of
the registrant were issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
------------------------------------
Portions of the registrant's Annual Report to Shareholders for
its fiscal year ended August 31, 1995 are incorporated by reference into Parts
I and II of this Annual Report.
Portions of the Proxy Statement for the registrant's Annual
Meeting of Shareholders to be held on December 14, 1995 are incorporated by
reference into Part III of this annual report.
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PART I
ITEM 1. BUSINESS.
Tuscarora Incorporated (the "Company") was incorporated in
1962 as Tuscarora Plastics, Inc. The corporate name was changed in 1992 to
reflect changes in the Company's business.
The Company designs and manufactures products for interior
protective packaging and for material handling and other applications. Most of
the products are custom molded products made from expanded foam plastic
materials but other products are made by integrating multiple materials to meet
customer requirements. The Company also supplies customers with custom molded
foam plastic thermal insulation products and components and manufactures rigid
plastic products for material handling applications and component parts.
The Company has been manufacturing custom molded products
since its inception and is the largest manufacturer in the United States of
custom molded products made from expanded foam plastic materials. Integrated
materials products and rigid plastic products were not manufactured by the
Company prior to 1991.
CUSTOM MOLDED PRODUCTS
PACKAGING AND MATERIAL HANDLING PRODUCTS. The packaging
products are primarily foam plastic shapes which are used to protect a wide
range of finished consumer and industrial goods during shipment. The products
are designed to reduce or eliminate damage that may occur during shipment and
handling as a result of shock, vibration or wide temperature fluctuations. The
goods which are packaged include computers and computer peripherals, consumer
electronic items such as television sets, VCR'S and satellite dishes, kitchen
appliances such as refrigerators, microwave ovens and blenders, office
equipment such as copiers and fax machines, outboard motors, vaccine
containers, military equipment, valves, cosmetics, liquid chemicals, toys,
seedlings and perishable pharmaceuticals. Most of the shapes are unique in
that they are custom made for each particular application. The Company's
customers generally ship their goods utilizing the Company's interior
protective packaging products in exterior shipping containers.
The material handling products are also primarily unique foam
plastic shapes which serve many of the same purposes and functions as the
packaging products but are designed primarily for use in intra-plant or
inter-plant movement of components rather than for shipment of finished goods.
These products are widely used by automobile manufacturers and by their
suppliers to
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transport parts to assembly plants. They also frequently serve as parts
positioning carriers for automated assembly. The material handling products are
generally more durable than the packaging products and are usually reusable,
providing a cost-effective means of transporting materials that are sensitive or
difficult to handle.
The packaging and material handling products possess an
unusual combination of useful properties such as exceptional lightness, impact
resistance and shock absorbency, toughness and strength, thermal insulating
efficiency, temperature tolerance, buoyancy and chemical and biological
neutrality. The cost of the products to the customer is often less than
alternative types of materials because, pound for pound, less foam plastic
material is required to provide equal or better protection. The Company's
complex shapes can also be easily and quickly handled thus reducing the
customer's labor costs. Because foam plastic packaging shapes frequently
require less space and are lighter than most other packaging materials, the
customer is also often able to reduce its product shipping costs. Similarly,
properly designed foam plastic material handling devices often increase total
yield per transportation container, thus reducing intra-plant or inter-plant
freight cost.
THERMAL INSULATION PRODUCTS AND COMPONENTS. The thermal
insulation products are foam plastic shapes used primarily in the manufacture
of refrigeration equipment such as home and commercial refrigerators, freezers,
air conditioners and water coolers. Insulated shippers are manufactured for
sale to shippers of temperature sensitive materials like certain food and
pharmaceutical products. Thermal insulation products are also manufactured for
building construction applications where the insulating performance of a rigid
or unusually shaped part is required. For example, these products are used as
insulation in prefabricated metal buildings, as core materials for factory
manufactured steel exterior doors and as insulation set into poured concrete or
block walls.
Foam plastic shapes are used as interior, trim and
under-the-hood components in automobiles. In particular, the shapes are placed
behind and under the interior assemblies of automobiles to provide added
passenger protection. Flotation and seating assemblies are made for marine
applications.
The Company also has arrangements with three of its raw
material suppliers under which the Company manufactures custom molded foam
plastic energy absorbing automobile bumper cores for customers of the suppliers
which are North American assembly plants of leading domestic and foreign
automobile manufacturers. Under these arrangements, the Company receives a fee
for converting its suppliers' raw materials into the final product.
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INTEGRATED MATERIALS PRODUCTS
Like most of the Company's custom molded products, integrated
materials products are made for interior packaging and material handling
applications to protect goods during shipment and handling. These products are
made from corrugated paperboard, molded and/or fabricated foam plastic shapes,
rigid plastic shapes, wood and other materials used singularly or in
combination. The products are also generally custom designed to meet the
shipping and handling requirements for a broad range of customer products
similar to those protected by the Company's custom molded products.
These products are generally economical in relatively smaller
quantities than custom molded products. Although they generally require more
material and labor to produce, they rarely require the production of expensive
tooling. Therefore, the total cost of a project to the customers will
normally be less if required quantities are relatively small.
RIGID PLASTIC PRODUCTS
The rigid plastic products are custom made for material
handling applications and component parts. A typical example of a material
handling application is the manufacture of durable rigid material handling
trays to withstand multiple shipping cycles and to provide precise part
positioning for handling by automated manufacturing equipment. Products such
as housings for electronic instruments and garage door panels are also made
from rigid plastic.
CONTRIBUTION TO NET SALES
During the 1995, 1994 and 1993 fiscal years, packaging and
material handling products have contributed approximately 88%, 87% and 86%,
respectively, of the Company's net sales.
During the 1995, 1994 and 1993 fiscal years, sales of the
integrated materials products have accounted for 19.0%, 13.2% and 7.77%,
respectively, of the Company's net sales. The increases reflect the
Company's emphasis on growing the integrated materials business. The growth
has resulted primarily from business acquisitions and increased sales from the
acquired operations.
MANUFACTURING
The Company emphasizes design engineering and has sales
offices and related design centers at seven locations where experienced
personnel study and evaluate the requirements of the Company's customers.
These facilities have been used primarily for the design and building of
prototype foam shapes for use in the custom molding operations and for the
testing of these
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prototypes but in recent years have also been used extensively in developing the
Company's integrated materials and rigid plastic products.
CUSTOM MOLDED PRODUCTS. Custom molding meets the needs of the
Company's customers who require large quantities of custom designed foam
plastic shapes. Products can be formed to practically any desired shape.
Generally, after a shape has been developed and an order is
received, the Company designs and builds one or more aluminum production molds.
These molds, most of which are purchased and owned by the customer, are then
shipped to one of the Company's custom molding facilities, generally the
facility nearest the customer, for required production. The Company presently
makes all its molds at a single mold making facility.
Custom molded foam plastic products are produced by causing
raw material beads, which have been expanded to a preselected density and
stored prior to use, to be blown into an aluminum production mold in an
automatic molding machine. Time controlled heat (in the form of steam) is
applied to the beads in the mold, causing the beads to further expand, soften
and fuse together to form the shape of the product which is then removed from
the molding machine. The properties of the products depend on the raw material
used and the density selected. Custom molded products made from raw materials
other than EPS generally require stabilization in special curing rooms before
the products can be packed for storage or shipment (see "Raw Materials" below).
Significant capital expenditures for molding machines and
other process equipment are required to manufacture custom molded products (see
"Capital Expenditures" below). Process equipment includes air compressors,
steam boilers, cooling towers, conveyors, drying equipment and a wide variety
of other standard industrial machinery items. The major items of expense in
the manufacture of the custom molded products are the raw materials from which
the products are made, labor and the utilities needed to operate the process
equipment.
The Company makes use of Computer Aided Design ("CAD") and
Computer Aided Manufacturing ("CAM") equipment at its design centers and mold
making facility and has acquired design to manufacturing (D-T-M) systems for
some of these facilities.
OTHER PRODUCTS. The manufacture of the integrated materials
and rigid plastic products is less capital intensive, requiring lower capital
expenditures. In the integrated materials operations, the machinery and
equipment consists primarily of machining and fabricating equipment and
corner post and base pad machines. Fabrication of foam plastic involves the
cutting of shapes from billets of foam plastic using specialized cutting
tools and hot wire equipment.
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The rigid plastic products are made primarily by thermoforming
which is the process of taking a rigid sheet of hard thermoplastic such as
ABS or high density polyethylene, heating it and then vacuum and/or pressure
forming it around a mold. Blow molding and other techniques are also utilized.
The major items of expense in the manufacture of the
integrated materials and rigid plastic products are raw materials and labor.
MANUFACTURING FACILITIES. The Company has 20 custom molding
facilities, eight facilities for the manufacture of integrated materials
products and two facilities where rigid plastic products are manufactured. The
facilities are generally strategically situated near manufacturing facilities
of the Company's customers. Molded foam plastic shapes and rigid plastic
shapes made for integrated materials products are shipped from the facility
where these shapes are made to the appropriate integrated materials facility.
The Company's manufacturing facilities ensure timely delivery
of products to customers and enable the Company to provide products at a lower
shipping cost than more distant competitors. There is also significant
production flexibility among the Company's facilities since molds and/or
molding machines and other manufacturing equipment can be moved quickly from
one facility to another to facilitate production and assure supply to
customers.
All the Company's manufacturing facilities have warehousing
capacity for inventories of finished goods. This enables the Company to
respond to the delivery needs of customers.
Distribution of products is made from the Company's
manufacturing facilities and warehouses to customers by Company
operated tractor-trailers and by common carrier. Most of the Company operated
tractor-trailers are leased.
GEOGRAPHICAL EXPANSION
Prior to the 1990 fiscal year, all the Company's manufacturing
facilities were in the United States east of the Mississippi River. During the
1990 fiscal year, the Company acquired a custom molding facility in Las Cruces,
New Mexico and during the 1994 fiscal year, the Company acquired a custom
molding and integrated materials facility in Colorado Springs, Colorado. A
custom molding facility was also opened in the 1994 fiscal year in Juarez,
Mexico. Integrated materials products are also presently manufactured in
Juarez. During the 1995 fiscal year, the Company acquired a custom molding
business in the United Kingdom (see "Acquisitions" below).
The Las Cruces facility was acquired to enable the Company to
serve domestic customers that had opened "Maquiladora" operations just across
the U.S. Mexican border. Maquiladora programs enable domestic companies to ship
component parts in bond into Mexico, assemble them and then ship them back in
bond to the United States. The facility in Juarez will serve the Maquiladora
customers as well as customers manufacturing and selling their products in
Mexico. The Colorado Springs facility enables the Company to serve the growing
high tech and medical equipment industries in the Mountain States. The
acquisition in the United Kingdom provides the Company with a meaningful entry
into that market.
The Company formed a subsidiary, Tuscarora Limited, to acquire
the business in the United Kingdom and conducts its business in Mexico through
a subsidiary, Tuscarora International, Inc. The Company has no other
subsidiaries which play an important role in the Company's business.
The location of all the Company's manufacturing facilities, as
well as the sales offices and related design centers, is set forth under Item 2
of this annual report.
MARKETS AND CUSTOMERS
The Company serves major industry groups including the high
technology, consumer electronics, major appliances and automotive industries.
Significant advances in sales in each of these markets, particularly in the
high technology market, was achieved during the 1995 fiscal year. Products
are sold to over 2,500 customers in the United States, Canada, Mexico
and the United Kingdom. Sales are made primarily by the Company's own sales
force which, including supporting technical personnel at the Company's design
centers, consists of approximately 64 salaried employees. Sales in certain
geographic areas are handled by sales representatives paid on a commission
basis who are assisted and supported by
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Company personnel. Customers make extensive use of the design centers which
help the customers develop and test the products that best meet their specific
needs.
During the 1995 fiscal year, no customer accounted for more
than 9%, and the Company's 10 top customers accounted for 34.2%, of the
Company's net sales.
COMPETITION
The Company's packaging and material handling products compete
with similar products made by others as well as with a number of other types of
products including corrugated die cuts, wood or corrugated crates with block
and brace framing, fabricated sheet polyethylene and urethane foams and
foam-in-place urethane packaging systems. A number of the companies producing
competing products, particularly paper and corrugated packaging products, are
well established and have substantially greater financial resources than the
company.
Thermal insulation products for use in refrigeration equipment
and building construction represent a small portion of the overall market for
insulation products. Because of the specialized nature of this market, the
Company competes primarily with other manufacturers of similar foam plastic
products, rather than with manufacturers of alternate insulation products.
The majority of the volume of similar foam plastic products is
produced by independent manufacturers who generally market their products in a
particular geographical area from a single or limited number of plants.
Competition among the producers of similar products is based primarily on
customer service, product engineering and price.
The components manufactured by the Company for automobiles and
other markets can be provided by other vendors using alternative materials at
competitive prices. Although the Company's products work well in these
applications, they are not unique or proprietary.
RAW MATERIALS
The Company has manufactured custom molded products from
expanded polystyrene ("EPS") since the Company was incorporated. EPS, which is
received by the Company in an unexpanded state, is a petroleum-based, rigid,
closed cell, cellular plastic with properties which depend on its density. in
its raw form, the material has an appearance much like table salt, but each
bead contains hundreds of microscopic cells. Under conditions of
time-controlled heat, the beads can be expanded to many times their original
size with no increase in weight. In its raw form, the material has a density
of 38 to 40 pounds per cubic foot, but through the expansion process this
density can be reduced to less
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than one pound per cubic foot. The optimum cushioning characteristics for
packaging and material handling applications are obtained in the 1.0 to 1.75
pounds per cubic foot range, while optimum thermal insulation is achieved at
about 2.0 pounds per cubic foot. The Company expands the beads to various
densities and stores them until the final products are produced.
Although EPS is subject to attack by certain solvents and
strong oxidizing acids, it is for most purposes chemically and biologically
neutral. To the knowledge of the Company, EPS meets all applicable
requirements for food packaging which have evolved from the Food, Drug and
Cosmetics Act of 1938. EPS is combustible but modified raw materials are
available which are specifically formulated to self-extinguish when the source
of ignition is eliminated. These modified raw materials are normally specified
where the end product may be exposed to a potential ignition source.
Other resins developed by the Company's raw material suppliers
became commercially available in the mid-1980s. These resins are also
petroleum based and include expanded polypropylene ("EPP"), expanded
polyethylene ("EPE"), ARCEL(TM) and high heat-resistant styrene-based moldable
resins. EPP and EPE are polyolefin resins and ARCEL(TM) is a co-polymer of
polyethylene and polystyrene. ARCEL(TM) and the heat-resistant styrene-based
resins, like EPS, are received by the Company in an unexpanded state whereas
EPP and EPE raw material beads have already been expanded prior to receipt by
the Company and do not need further expansion.
EPS is used in manufacturing packaging and material handling
products as well as thermal insulation products and certain components. EPE
and low density EPP are used primarily in making packaging shapes for fragile
electronic items or where multiple impact protection is required and in making
flotation assemblies for marine applications. ARCEL(TM) is used primarily in
making the reusable material handling shapes where greater durability and
toughness are required. Higher density grades of EPP are used in making the
automobile bumper cores where greater energy absorption and higher temperature
tolerance are necessary. The heat-resistant styrene-based resins are used
primarily in making the shapes which are used as interior, trim and
under-the-hood components in automobiles. The raw materials are also used in
the manufacture of certain of the integrated materials products.
The raw materials other than EPS are significantly more
expensive than EPS, and products made from these raw materials sell at higher
prices and generally have a higher profit margin than products made from
EPS. During the 1995 fiscal year, approximately 20% of the Company's net
sales of custom molded products were attributable to products made from
these premium raw materials.
There are five principal suppliers in the United States of the
raw materials for the Company's custom molded products:
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ARCO Chemical Company, a subsidiary of Atlantic Richfield Company; BASF
Corporation, a U.S. subsidiary of BASF, AG (Germany); Huntsman Chemical
Corporation; Kaneka Corporation, a U.S. subsidiary of Kanegafuchi Chemical
Industry Co., Ltd. (Japan); and JSP International, Inc., a U.S. subsidiary
of Japan Styrene Paper Ltd. EPS and the heat-resistant styrene-based resins
are generally available to any prospective purchaser. EPP, EPE and ARCEL(TM)
are available to the Company and other similar manufacturers under
non-exclusive license agreements with one or more of these suppliers. The
Company has never experienced a shortage of raw materials and does not
foresee that any shortage will occur.
The Company reuses virtually all of its own scrap as well as
used products returned by customers (see "Environmental Considerations" below).
In addition, ARCO Chemical Company has developed and sells to the Company EPS
resins using recycled material. These resins are intended to meet proposals
being advocated in certain states that all packaging eventually contain a
percentage of recycled material.
Because the raw materials for the Company's custom molded
products are petroleum based, their availability could be affected by a crude
oil shortage. Nonetheless, based on its experiences in the past when there
were crude oil shortages, the Company does not believe that it would be
materially adversely affected by future crude oil shortages. The raw materials
are considered high value-added products by their manufacturers, and thus the
manufacturers have in the past and would likely continue to make the raw
materials available even during a period of restricted oil supply.
The price of foam plastic resins can also vary depending on
the worldwide supply and demand for certain petrochemical feedstocks such
as ethylene and benzene. For instance, a shortage of styrene monomer (a
compound of ethylene and benzene) caused the price of EPS to increase
substantially during the 1987 and 1988 fiscal years. The price of EPS
was stable during the 1994 and 1993 fiscal years however, average EPS prices
increased substantially in the 1995 fiscal year due to increased demand for
styrene monomer on the world market relative to production capacity. The
Company passed the increased prices along to its customers through higher
selling prices. The prices of the raw materials other than EPS have not
changed significantly since these materials became commercially available.
The raw materials for the integrated materials products
(including foam billets purchased in blocks for fabrication) and rigid plastic
products are readily available.
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CAPITAL EXPENDITURES
Capital expenditures for property, plant and equipment during
the 1995, 1994 and 1993 fiscal years amounted to $22,791,000, $14,049,000 and
$12,356,000, respectively.
Capital expenditures for machinery and equipment, including
machinery and equipment acquired in acquisitions, during the 1995, 1994 and
1993 fiscal years amounted to $18,869,000, $10,722,000 and $8,187,000,
respectively. During the 1995 fiscal year, $6,590,000 of these capital
expenditures were for automatic molding machines, including machines acquired
in the M.Y. Trondex Ltd. acquisition (see "Acquisitions" below) and
next-generation vacuum transfer molding machines for a new EPS custom molding
facility in Lewisburg, Tennessee. The remainder of these capital
expenditures during the 1995 fiscal year were as follows: (i) $7,688,000 for
other process equipment used in the manufacture of custom molded products,
(ii) $2,849,000 for machinery and equipment to manufacture the Company's
integrated materials and rigid plastic products, including machinery and
equipment acquired in the Astrofoam acquisition (see "Acquisitions" below)
and (iii) $1,742,000 for environmental control equipment (see "Environmental
Considerations" below).
Capital expenditures for land, buildings and improvements
during the 1995, 1994 and 1993 fiscal years amounted to $3,922,000, $3,327,000
and $4,169,000, respectively. The 1995 fiscal year expenditures included an
aggregate of $2,005,000 expended in connection with the new EPS custom molding
facility in Lewisburg, Tennessee, a new integrated materials facility in
Burlington, Wisconsin and a move to a new mold making location in Sun Prairie,
Wisconsin.
ACQUISITIONS
The Company made two acquisitions of similar businesses during
the 1995 fiscal year. In September 1994, the Company purchased substantially
all the assets and assumed substantially all the liabilities of the specialty
corrugated and foam packaging business of Astrofoam, Inc. in Holden,
Massachusetts. In February 1995, the Company purchased substantially all the
assets and assumed substantially all the liabilities of the custom molding
business of M.Y. Trondex Ltd. in Northampton, England and Glasgow, Scotland.
The Company made two acquisitions of similar businesses during
the 1994 fiscal year. In September 1993, the Company purchased the corrugated
packaging business and related machinery and equipment of Box Pack Incorporated
in Greeneville, Tennessee. In April 1994, the Company purchased substantially
all the assets and assumed substantially all the liabilities of the custom
molding and fabricating business of Styro-Molders Corporation in Colorado
Springs, Colorado.
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The Company made one acquisition of a similar business during
the 1993 fiscal year. In October 1992, the Company purchased the custom molded
foam polypropylene business and related machinery and equipment of Sentinel
Products Corporation in St. Johnsville, New York.
Acquisitions accounted for approximately 42% of the
increase in the Company's net sales during the 1995 fiscal year. For purposes
of this calculation, the net sales from the Styro-Molders business during the
first 7-1/2 months of the 1995 fiscal year were included.
For further information with respect to the above
acquisitions, see Note 9 of the Notes to Consolidated Financial Statements
included in the Company's Annual Report to Shareholders for the 1995 fiscal
year. Said Note 9 is incorporated in this item by reference.
The Company will continue to look for acquisitions of similar
and/or related businesses.
SEASONALITY
The Company's net sales and net income are subject to some
seasonal variation. The Company's business generally declines in December due
to a reduction in manufacturing activity by its customers, and this usually
adversely affects the Company's net sales and net income during the second
quarter of the fiscal year. Net income in the second fiscal quarter is also
adversely affected by higher operating costs during the winter months. See
Note 13 of the Notes to Consolidated Financial Statements included in the
Company's Annual Report to Shareholders for the 1995 fiscal year. Said Note 13
is incorporated in this item by reference.
EMPLOYEES
As of August 31, 1995, the Company had approximately 1,511
employees, of which approximately 1,435 are full time employees and
approximately 1,191 are paid on an hourly basis. Of the hourly employees,
approximately 311 at six manufacturing facilities are covered by five
collective bargaining agreements with five different unions. One agreement
expires on November 30, 1995 but a new agreement has been ratified covering the
three-year period ending November 30, 1998. The other four agreements expire
at various dates from December 1995 through October 1998. The Company
considers its labor relations to be good and has never suffered a work stoppage
as a result of a labor conflict.
ENVIRONMENTAL CONSIDERATIONS
The Company has obtained or applied for air quality permits
for all its custom molding facilities except its new facilities in England and
Scotland where air quality permits are not required. The permits restrict the
amount of pentane which may be released from the Company's raw materials and
have resulted in capital expenditures for batch pre-expanders which allow the
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Company to use low pentane content raw materials in the manufacturing process.
Air quality permits have not been required in connection with the manufacture
of the Company's integrated materials and rigid plastics products.
The Company has acquired recycling equipment for all its
custom molding and all but one of its integrated materials facilities. The
equipment includes (i) EPS regrinders which enable the Company to reuse
in-house scrap and products returned by customers and (ii) EPS densifiers which
enable the Company to compact products returned by customers for return to the
Company's EPS raw material suppliers for remanufacture into recycled content
raw material. Regrinding equipment for ARCEL(TM) has been installed at one of
the Company's custom molding facilities. In-house scrap resulting from the
manufacture of the Company's rigid plastic products is returned to the raw
material suppliers for these products for recycling.
During the 1995, 1994 and 1993 fiscal years, the Company's
capital expenditures for environmental matters, including batch
pre-expanders and recycling equipment, amounted to $1,742,000, $1,064,000 and
$1,443,000, respectively. Amounts charged to selling and administrative
expenses for environmental matters, primarily for services in connection with
maintaining the air quality permits, are not significant. Capital expenditures
for environmental matters during the 1996 fiscal year are not expected to
exceed $500,000.
In September 1994, the Company commenced a program under which
environmental compliance audits will be conducted at all the Company's
manufacturing facilities. At the end of the 1995 fiscal year, four audits had
been completed. The audits which were conducted by an environmental consulting
firm, did not result in plans for any significant additional expenditures for
environmental matters.
The Company's recycling efforts are part of a nationwide
effort by the EPS industry to recover foam plastic packaging for reuse or
recycling. The Company is a founding member of the Association of Foam
Packaging Recyclers (AFPR) whose members operate collection centers throughout
the United States that accept used foam packaging and recycle it in-house into
new foam packaging, densify it for shipment to EPS resin suppliers for
manufacture into recycled-content EPS or process it for sale to manufacturers
of other products.
The Company's foam plastic products may also be safely
landfilled or incinerated. The Company's integrated materials products may be
recycled, safely landfilled or incinerated and the rigid plastic products may
also be recycled.
There has been public concern that using chloro-fluoro-carbons
("CFCS") in the manufacture of plastic products may
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deplete the Earth's upper atmospheric ozone layer. The Company does not use,
nor has it ever used, CFCs in the manufacture of any of its products.
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ITEM 2. PROPERTIES.
The Company's headquarters are located at 800 Fifth Avenue,
New Brighton, Pennsylvania 15066.
The Company has custom molding facilities at the following
locations:
Colorado Springs, Colorado Marion, Ohio
Putnam, Connecticut New Brighton, Pennsylvania
Conyers, Georgia Greeneville, Tennessee
Streator, Illinois Lewisburg, Tennessee
Martinsville, Indiana (two facilities)
Chesaning, Michigan Sterling, Virginia
Tupelo, Mississippi Pardeevile, Wisconsin
Las Cruces, New Mexico Juarez, Mexico
Cortland, New York Northampton, England
Butner, North Carolina Glasgow, Scotland
During the 1995 fiscal year, the Company (i) opened a new EPS custom molding
facility in Lewisburg, Tennessee (at the same time transforming the original
Lewisburg facility opened in 1972 from a combined polyolefins/EPS molding
facility into a dedicated polyolefins plant) and (ii) acquired the facilities
in England and Scotland in connection with the acquisition of a similar
business in February 1995 (see "Acquisitions" under Item 1).
The Company has integrated materials facilities at the
following locations:
Colorado Springs, Colorado Beaver, Pennsylvania
Conyers, Georgia Greeneville, Tennessee
Holden, Massachusetts Burlington, Wisconsin
Saginaw, Michigan Juarez, Mexico
During the 1995 fiscal year, the Company (i) reopened its former custom molding
facility in Saginaw, Michigan as an integrated materials facility, (ii)
finished transferring its integrated materials facility in Antioch, Illinois to
the facility in Burlington, Wisconsin which was acquired in September 1994 and
(iii) acquired the facility in Holden, Massachusetts in connection with the
acquisition of a similar business in September 1994 (see "Acquisitions" under
Item 1).
The custom molding and integrated materials facilities in
Colorado Springs, Colorado and Juarez, Mexico are at the same location. The
custom molding and integrated materials facilities in Conyers, Georgia and
Greeneville, Tennessee are located at different sites.
Rigid plastic products are also manufactured at the facilities
in Beaver, Pennsylvania and Burlington, Wisconsin.
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The Company's mold making facility is in Sun Prairie,
Wisconsin. This facility is considered a manufacturing facility because most
of the custom molds are sold to and owned by the Company's customers. During
the 1995 fiscal year, the Company upgraded its mold making operations in Sun
Prairie by moving to a larger facility.
Most of the custom molding facilities are owned by the Company
while most of the integrated materials facilities are leased. The
manufacturing facilities which the Company leases are at the following
locations:
Colorado Springs, Colorado Lewisburg, Tennessee
Conyers, Georgia (EPS facility)
(integrated materials) Burlington, Wisconsin
Holden, Massachusetts Sun Prairie, Wisconsin
Beaver, Pennsylvania Juarez, Mexico
Greeneville, Tennessee Northampton, England
(integrated materials) Glasgow, Scotland
The leases expire at various dates from January 1996 through August 2007. In
all but a few cases, the leases may be extended at the Company's option. The
Company has options to purchase all the leased facilities except the facilities
in Beaver, Pennsylvania, Sun Prairie, Wisconsin, Juarez, Mexico and Glasgow,
Scotland. The Company generally makes substantial leasehold improvements to
and exercises its options to purchase leased facilities.
The Company's sales offices and related design centers are
located at the Company's headquarters in New Brighton, Pennsylvania, at the
manufacturing facilities in Colorado Springs, Colorado, Holden, Massachusetts,
Burlington, Wisconsin and Northampton, England and at separate facilities
in Conyers, Georgia and Holly, Michigan.
The Company has warehouse facilities at each manufacturing
location as well as in other locations. The Company continues to own
properties in Essex, Connecticut, Louisville, Kentucky, Baltimore, Maryland and
Durham, North Carolina where former manufacturing operations have been
discontinued. Three of these properties are currently leased to third parties.
Substantially all the Company's long-term debt is secured by
mortgages and security interests in certain of the Company's property, plant
and equipment.
The Company believes that the facilities referred to above are
generally well suited for their respective uses and that they are generally
adequately sized and designed to provide the operating efficiencies necessary
for the Company to be competitive. The Company continually upgrades and
expands its facilities as necessary to meet the demand for its products.
-14-
16
ITEM 3. LEGAL PROCEEDINGS.
EMPLOYMENT CLAIMS. On June 13, 1995, a Complaint was filed
against the Company in EDWINA WILHOIT V. TUSCARORA, INC., a civil action in the
United States District Court for the Eastern District of Tennessee in
Greeneville, Tennessee. The plaintiff, an employee at one of the Company's
manufacturing facilities in Greeneville, Tennessee, alleges sexual harassment
and assault by the Company's plant manager in June 1994 in violation of Title
VII of the 1964 Federal Civil Rights Act, as amended, the Tennessee Human
Rights Act and Tennessee common law. The Complaint also alleges a past pattern
of sexual harassment by the plant manager. The plaintiff seeks $1,000,000 in
compensatory damages and $4,000,000 in punitive damages from the Company as
well as an award of attorneys' fees. The Company has a sexual harassment
policy which has been in force for many years. The Company believes it
promptly, reasonably and effectively responded to all incidents of alleged
sexual harassment and assault referred to in the Complaint. In particular, the
plant manager was immediately suspended and then discharged following
investigation of the incident in June 1994. The Company is vigorously
contesting the lawsuit and has filed an Answer to the Complaint denying any
liability. The Company expects to file a Motion for Summary Judgment after
discovery has been completed.
On October 3, 1995, a Complaint was filed against the Company
in L. MARIE ROBERTS V. TUSCARORA INCORPORATED, JOE ALCOTT AND LARRY MOONEYHAN,
a civil action in the State Court of Rockdale County, Georgia. The Plaintiff,
a former employee at one of the Company's manufacturing facilities in Conyers,
Georgia, alleges sexual harassment by defendants Alcott and Mooneyhan, the
plaintiff's supervisor and the Company's plant manager, respectively, and
sexual assault by defendant Alcott. It is alleged that the Company knew of the
individual defendants' actions and did nothing to remedy the situation. The
plaintiff alleges various causes of action under Georgia law and seeks an
unspecified amount of compensatory and punitive damages. After investigation,
in accordance with its policy, the Company took prompt and effective action to
end any harassment by Mr. Alcott by terminating his employment. The Company
determined after investigation that Mr. Mooneyhan was not at fault. On the
basis that the plaintiff alleged a cause of action under Title VII of the 1964
Federal Civil Rights Act, as amended, the Company removed the lawsuit to the
United States District Court for the Northern District of Georgia, Atlanta
Division. The Company is vigorously contesting the lawsuit and has filed an
Answer to the Complaint denying any liability in the District Court. The
plaintiff is contesting the removal of the lawsuit to the District Court and
seeking remand of the lawsuit to the State Court.
ENVIRONMENTAL CLAIMS. Since 1992, the Company has been
involved in cost recovery litigation with the United States Environmental
Protection Agency (the "USEPA") and other parties
-15-
17
over clean up costs at the Smith's Farm Superfund Site in Bullitt
County, Kentucky. The litigation was commenced in February 1992 in the United
States District Court for the Western District of Kentucky under the caption
AKZO COATINGS, INC. ET AL. V. AC&S, INC. ET AL. In 1988, the Company may have
generated small amounts of scrap product and warehouse demolition waste debris
that were transported to the site from the Company's custom molding facility in
Louisville, Kentucky where operations have since been discontinued. The
Company denies that either the scrap product or the demolition debris contained
hazardous substances. In the fall of 1994, the USEPA advised the Company that
it had developed an allocation for the site under which the Company would be a
DE MINIMIS party. Eighteen DE MINIMIS parties, including the Company, have
entered into settlement discussions with the USEPA and are negotiating an
Administrative Order on Consent ("AOC"). The Company believes that a
settlement will be reached with the USEPA during the Company's fiscal year
ended August 31, 1996 and that the Company's liability for clean up costs at
the site under that settlement will be in range of $50,000 to $150,000. It is
expected that any AOC would contain a covenant not-to-sue and contribution
protection.
Since 1991, the Company has been involved in discussions with
the Connecticut Department of Environmental Protection ("CTDEP") which
could result in the Company performing certain remedial actions at the
Company's former custom molding facility in Essex, Connecticut. This facility,
which was leased by the Company in 1979 and then purchased in 1984, is
presently leased by the Company to a third party. The CTDEP alleges that
prior to 1968, wastes, including metals and cyanides, were deposited by a
prior owner in two unlined lagoons located on the property (which lagoons
were subsequently closed) and that such condition creates a potential source
of pollution to waters of the state. The USEPA has also inspected the
property under its CERCLIS program and has concluded that groundwater
contamination exists in the vicinity of the former lagoons and that organic
and inorganic contaminants are present in some sediment and surface water
samples. It is not clear what if any remedial action may be required by the
CTDEP or the USEPA. The Company believes, however, that any expenditures for
cleanup costs which it might undertake or be required to undertake would not
be significant and would be payable over several years. The Company has
notified the prior owner of this matter and of its potential liability to the
Company.
-16-
18
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
----------------------------------------------------
No matters were submitted to a vote of security holders of the
Company during the fiscal quarter ended August 31, 1995.
EXECUTIVE OFFICERS OF THE COMPANY
---------------------------------
In accordance with Instruction 3 to Item 401(b) of Regulation
S-K, information with respect to the executive officers of the Company is set
forth below.
Name Age Office with the Company
- -------------------- --- -------------------------------------
John P. O'Leary, Jr. 48 President and Chief Executive Officer
Brian C. Mullins 54 Vice President and Treasurer
James H. Brakebill 58 Vice President, Manufacturing
David C. O'Leary 46 Vice President, Sales and Marketing
John P. O'Leary, Jr. became President and Chief Executive
Officer of the Company in January 1990; he was Vice President from November
1983 to January 1990. He has been a director of the Company since 1974 and
became Chairman of the Board of Directors in August 1994.
Brian C. Mullins has been Vice President and Treasurer of the
Company since November 1979. Mr. Mullins is the Company's chief financial and
accounting officer.
James H. Brakebill has been Vice President, Manufacturing of
the Company since April 1994; he was Vice President of Technology from October
1986 to April 1994. Mr. Brakebill is responsible for all manufacturing
operations of the Company.
David C. O'Leary has been Vice President, Sales and Marketing
of the Company since April 1994; he was Vice President-Southern Division from
January 1990 to April 1994 and Vice President-Eastern Division of the Eastern
Region from November 1983 to January 1990. Mr. O'Leary is responsible for all
sales and marketing activities of the Company.
John P. O'Leary, Jr. and David C. O'Leary are brothers.
The executive officers are elected annually by the Board of
Directors at an organization meeting which is held immediately after each
Annual Meeting of Shareholders.
-17-
19
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
-------------------------------------------------
The Company's Common Stock is traded in the over-the-counter
market on the National Market System of the National Association of Securities
Dealers ("NASDAQ"). The Common Stock trades under the NASDAQ symbol TUSC. As
of August 31, 1995, there were 838 holders of record of the Company's Common
Stock.
Information with respect to the market prices of, and the cash
dividends paid with respect to, the Company's Common Stock during the fiscal
years ended August 31, 1995 and 1994 appears under Note 13-Quarterly Financial
Data (unaudited) of the Notes to Consolidated Financial Statements on page 18
of the Company's Annual Report to Shareholders for the fiscal year ended August
31, 1995 and is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
-----------------------
The selected financial data required by this Item 6 is
furnished by the "Eleven Year Consolidated Financial Summary" which appears on
the bottom half of the inside front cover of the Company's Annual Report to
Shareholders for the fiscal year ended August 31, 1995 and is incorporated
herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
-------------------------------------------------
The Management's Discussion and Analysis of Results of
Operations and Financial Condition required by this Item 7 appears on pages 19
through 21 of the Company's Annual Report to Shareholders for the fiscal year
ended August 31, 1995 and is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------------------------------------------
The following financial statements and related notes and
report appear on the pages indicated in the Company's Annual Report to
Shareholders for the fiscal year ended August 31, 1995 and are incorporated
herein by reference:
-18-
20
Page(s) in
Annual Report
Financial Statements and Related Report to Shareholders
- ------------------------------------------------- ---------------
Consolidated Statements of Income for the
fiscal years ended August 31, 1995,
1994 and 1993 . . . . . . . . . . . . . . . . . . . . . 8
Consolidated Balance Sheets as of August 31,
1995 and 1994 . . . . . . . . . . . . . . . . . . . . . 9
Consolidated Statements of Cash Flows for the
fiscal years ended August 31, 1995, 1994
and 1993 . . . . . . . . . . . . . . . . . . . . . . . . 10
Consolidated Statements of Shareholders' Equity
for the fiscal years ended August 31, 1995,
1994 and 1993 . . . . . . . . . . . . . . . . . . . . . 11
Notes to Consolidated Financial Statements . . . . . . . . . . . 12-18
Report of Independent Accountants . . . . . . . . . . . . . . . . 19
The supplementary financial information required by this Item
8 is included in Note 13 - Quarterly Financial Data (unaudited) of the Notes to
Consolidated Financial Statements and is also incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
------------------------------------------------
There were no such events and therefore this Item 9 is not
applicable.
PART III
ITEMS 10 THROUGH 13.
In accordance with the provisions of General Instruction G to
Form 10-K, the information required by Item 10 (Directors and Executive
Officers of the Registrant), Item 11 (Executive Compensation), Item 12
(Security Ownership of Certain Beneficial Owners and Management) and Item 13
(Certain Relationships and Related Transactions) is not set forth herein
(except for the information concerning "Executive Officers of the Company"
which appears at the end of Part I of this annual report) because the Company
has already filed its definitive Proxy Statement for its Annual Meeting of
Shareholders to be held on December 14, 1995, which includes such information,
with the Commission. Such information is incorporated herein by reference,
except for the information required to be included in the Proxy Statement by
paragraphs (i), (k) and (l) of Item 402 of Regulation S-K.
-19-
21
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
------------------------------------------------------
The financial statements, financial statement schedules and
exhibits listed below are filed as part of this annual report:
(a)(1) Financial Statements:
The consolidated financial statements of the Company and its
subsidiaries, together with the report of S.R. Snodgrass, A.C., dated October
12, 1995, appearing on pages 8 through 19 of the Company's Annual Report to
Shareholders for the fiscal year ended August 31, 1995 are incorporated herein
by reference (see Item 8 above).
(a)(2) Financial Statement Schedules:
Page in this
Schedules and Related Report Annual Report
- ------------------------------------------------- -------------
Schedule II - Valuation Account for the
fiscal years ended August 31, 1995,
1994 and 1993 S-1
Report of Independent Accountants on Schedules S-2
All other Financial Statement Schedules are omitted either
because they are not applicable or are not material, or the information
required therein is contained in the consolidated financial statements or notes
thereto set forth in the Company's Annual Report to Shareholders for its fiscal
year ended August 31, 1995.
(a)(3) Exhibits:
Exhibit
No. Document
- ------- -------------------------------------------------------------
3(i) Restated Articles of Incorporation, filed herewith.
3(ii) By-Laws, as Amended and Restated effective December 15, 1994,
filed as Exhibit 3(ii) to the Company's quarterly report on
Form 10-Q for the fiscal quarter ended February 28, 1995 and
incorporated herein by reference.
4.1 Articles 5th through 10th of the Company's Restated Articles
of Incorporation and Section 7.01 of the Company's By-Laws
(included in Exhibits 3(i) and 3(ii) above, respectively).
-20-
22
Exhibit
No. Document
- ------- ---------------------------------------------------------------------
4.2 Secured Term Loan, Revolving Credit and Line of Credit Agreement,
dated July 27, 1983, between the Company and Mellon Bank N.A.,
(the "Mellon Credit Agreement"), Filed as Exhibit 4.2 to the
Company's annual report on Form 10-K for the fiscal year
ended August 31, 1988 and incorporated herein by reference.
4.3 First Amendment, dated September 4, 1984, to the Mellon Credit
Agreement, filed as Exhibit 4.3 to the Company's annual report on
Form 10-K for the fiscal year ended August 31, 1988 and incorporated
herein by reference.
4.4 Second Amendment, dated October 2, 1985, to the Mellon Credit
Agreement, filed as Exhibit 4.4 to the Company's annual report on
Form 10-K for the fiscal year ended August 31, 1988 and incorporated
herein by reference.
4.5 Third Amendment, dated as of January 30, 1987, to the Mellon Credit
Agreement, filed as Exhibit 4.5 to the Company's annual report on
Form 10-K for the fiscal year ended August 31, 1988 and incorporated
herein by reference.
4.6 Fourth Amendment, dated as of August 31, 1987, to the Mellon Credit
Agreement, filed as Exhibit 4.6 to the Company's annual report on
Form 10-K for the fiscal year ended August 31, 1988 and incorporated
herein by reference.
4.7 Fifth Amendment, dated as of February 29, 1988, to the Mellon Credit
Agreement, filed as Exhibit 4.7 to the Company's annual report on
Form 10-K for the fiscal year ended August 31, 1988 and incorporated
herein by reference.
4.8 Sixth Amendment, dated as of July 12, 1989, to the Mellon Credit
Agreement, filed as Exhibit 4.8 to the Company's annual report on
Form 10-K for the fiscal year ended August 31, 1989 and incorporated
herein by reference.
4.9 Seventh Amendment, dated as of May 31, 1990, to the Mellon Credit
Agreement, filed as Exhibit 4.1 to the Company's quarterly report on
Form 10-Q for the fiscal quarter ended May 31, 1990 and incorporated
hereby by reference.
-21-
23
Exhibit
No. Document
- ------- -----------------------------------------------------------------
4.10 Term Note due June 1, 2000, filed as Exhibit 4.4 to the Company's
quarterly report on Form 10-Q for the fiscal quarter ended
May 31, 1990 and incorporated herein by reference.
4.11 Letter, dated August 28, 1990, amending the Seventh Amendment
to the Mellon Credit Agreement, filed as Exhibit 4.13 to the
Company's annual report on Form 10-K for the fiscal year
ended August 31, 1990 and incorporated herein by reference.
4.12 Eighth Amendment, dated as of August 1, 1991, to the Mellon Credit
Agreement, filed as Exhibit 4.13 to the Company's annual report on
Form 10-K for the fiscal year ended August 31, 1991 and incorporated
herein by reference.
4.13 Ninth Amendment, dated as of December 18, 1991, to the Mellon Credit
Agreement, filed as Exhibit 19 to the Company's quarterly report on
Form 10-Q for the fiscal quarter ended February 29, 1992 and
incorporated herein by reference.
4.14 Tenth Amendment, dated as of August 18, 1992, to the Mellon Credit
Agreement, with the form of Term Note due July 1, 2002 attached,
filed as Exhibit 4.15 to the Company's annual report on Form 10-K
for the fiscal year ended August 31, 1992 and incorporated herein
by reference.
4.15 Eleventh Amendment, dated as of February 26, 1993, to the Mellon
Credit Agreement, filed as Exhibit 4.16 to the Company's quarterly
report on Form 10-Q for the fiscal quarter ended February 28, 1993
and incorporated herein by reference.
4.16 Twelfth Amendment, dated as of June 30, 1994, to the Mellon Credit
Agreement, with the form of Term Note due July 1, 2004 attached,
filed as Exhibit 4.16 to the Company's annual report on Form 10-K
for the fiscal year ended August 31, 1994 and incorporated herein
by reference.
4.17 Thirteenth Amendment, dated as of May 31, 1995, to the Mellon Credit
Agreement, with the form of Revolving Credit Note, dated June 8, 1995,
and the form of Term Note due July 1, 2005 attached, filed herewith.
-22-
24
Exhibit
No. Document
- ------- --------------------------------------------------------------
10.1 1985 Incentive Stock Plan, as adopted by the Company's
Board of Directors on August 22, 1985 and approved by the
Company's shareholders on October 31, 1985, filed on
June 20, 1988 as part of Exhibit 10.1 To Amendment No. 1
to Registration Statement No. 33-17138 on Form S-1 and
incorporated herein by reference.*
10.2 1985 Incentive Stock Option Plan, as amended by the Company's
Board of Directors on October 29, 1987, filed on June 20, 1988
as part of Exhibit 10.2 to Amendment No. 1 to Registration
Statement No. 33-17138 on Form S-1 and incorporated herein by
reference.*
10.3 1989 Stock Incentive Plan, as amended by the Company's Board of
Directors on October 13, 1994, filed herewith.*
10.4 Common Stock Purchase Plan for Salaried Employees, as amended by
the Company's Board of Directors on October 11, 1991, filed as
Exhibit 10.4 to the Company's annual report on Form 10-K for the
fiscal year ended August 31, 1991 and incorporated herein by reference.*
10.5 Deferred Compensation Plan for Non-Employee Directors, as adopted
by the Company's Board of Directors on December 14, 1994, filed as
Exhibit 10.6 to the Company's quarterly report on Form 10-Q for the
fiscal quarter ended February 28, 1995 and corporated herein by reference.*
10.6 Retirement Policy and Plan for Non-Employee Directors, as amended by
the Company's Board of Directors on December 14, 1994, filed as
Exhibit 10.7 to the Company's quarterly report on Form 10-Q for the
fiscal quarter ended February 28, 1995 and incorporated herein by reference.*
10.7 Written description of supplemental retirement benefit for
Thomas P. Woolaway, filed herewith.*
-23-
25
Exhibit
No. Document
- ------- ---------------------------------------------------------------
10.8 Indemnification and Insurance Agreement, dated August 12, 1988,
between the Company and John P. O'Leary, Sr. (substantially
identical agreements have been entered into with all the Company's
directors), filed as Exhibit 10.3 to the Company's annual report on
Form 10-K for the fiscal year ended August 31, 1988 and incorporated
herein by reference.
11 Statement re Computation of Earnings Per Share, filed herewith.
13 Those portions of the Annual Report to Shareholders for the fiscal
year ended August 31, 1995 which are expressly incorporated in
this annual report by reference, filed herewith.
21 List of subsidiaries of the Company, filed herewith.
23 Consent of S.R. Snodgrass, A.C., filed herewith.
24 Powers of Attorney, filed herewith.
27 Financial Data Schedule, filed herewith.
<FN>
_____________
* Management contract or compensatory plan, contract or arrangement required
to be filed by Item 601(b)(10)(iii) of Regulation S-K.
The Company agrees to furnish to the Commission upon request
copies of all instruments defining the rights of holders of long-term debt of
the Company and its subsidiaries which are not filed as a part of this annual
report.
Copies of the exhibits filed as a part of this annual report
are available at a cost of $.20 per page to any shareholder of record upon
written request to Brian C. Mullins, Vice President and Treasurer, Tuscarora
Incorporated, 800 Fifth Avenue, New Brighton, Pennsylvania 15066.
(b) Reports on Form 8-K:
No events which resulted in the filing of a current report on
Form 8-K occurred during the fiscal quarter ended August 31, 1995.
-24-
26
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Tuscarora Incorporated
By /s/ JOHN P. O'LEARY,JR.
------------------------------------
John P. O'Leary, Jr., President
and Chief Executive Officer
Date: November 27, 1995
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the Company in the capacities indicated on November 27, 1995:
/s/ John P. O'Leary, Jr. /s/ Brian C. Mullins
- ----------------------------- -----------------------------
John P. O'Leary, Jr. Brian C. Mullins
(Director and Chief (Principal Financial
Executive Officer) Officer and Principal
Accounting Officer)
James T. Anderson, Jr.
Thomas S. Blair
David I. Cohen
Abe Farkas
Karen L. Farkas
Robert W. Kampmeinert
David C. O'Leary
Harold F. Reed, Jr.
James I. Wallover
Thomas P. Woolaway
By /s/ BRIAN C. MULLINS
-----------------------------
Brian C. Mullins,
Attorney-in-Fact
-25-
27
TUSCARORA INCORPORATED
SCHEDULE II - VALUATION ACCOUNT
YEARS ENDED AUGUST 31, 1995, 1994 AND 1993
Balance at Charged to Balance at
Beginning Costs and End
Description of Period Expenses Deductions(1) of Period
- ----------- ---------- --------- ------------- ----------
Allowance for
doubtful accounts
Year Ended
August 31, 1995 $646,991 $287,782 $240,098 $694,675
Year Ended
August 31, 1994 643,386 180,000 176,395 646,991
Year Ended
August 31, 1993 655,893 205,000 217,507 643,386
<FN>
- ----------------------------
(1) Uncollected receivables written off, net of recoveries.
S-1
28
REPORT OF INDEPENDENT ACCOUNTANTS ON SCHEDULES
Tuscarora Incorporated
New Brighton, Pennsylvania
Our report on the consolidated financial statements of
Tuscarora Incorporated and subsidiaries has been incorporated by reference in
this Form 10-K from the Company's 1995 Annual Report to Shareholders and
appears on page 19 therein. In connection with our audits of such financial
statements, we have also audited the related financial statement schedule
listed on page 20 of this annual report on Form 10-K.
In our opinion, the financial statement schedule referred to
above, when considered in relation to the basic financial statements taken as a
whole, presents fairly the information required to be included therein.
/s/ S.R. SNODGRASS, A.C.
---------------------------------
Beaver Falls, Pennsylvania S.R. Snodgrass, A.C.,
October 12, 1995 Certified Public Accountants
S-2
29
TUSCARORA INCORPORATED
FORM 10-K FOR FISCAL YEAR ENDED AUGUST 31, 1995
EXHIBIT INDEX
The following exhibits are required to be filed with this annual
report on Form 10-K. Exhibits are incorporated herein by reference to other
documents pursuant to Rule 12b-23 under the Securities Exchange Act of 1934
as amended, as indicated in the index. Exhibits not incorporated herein by
reference follow the index.
(a)(3) Exhibits:
Exhibit
No. Document
- ------- -----------------------------------------------------------
3(i) Restated Articles of Incorporation, filed herewith.
3(ii) By-Laws, as Amended and Restated effective December 15, 1994,
filed as Exhibit 3(ii) to the Company's quartely report on
Form 10-Q for the fiscal quarter ended February 28, 1995 and
incorporated herein by reference.
4.1 Articles 5th through 10th of the Company's Restated Articles
of Incorporation and Section 7.01 of the Company's By-Laws
(included in Exhibits 3(i) and 3(ii) above, respectively).
4.2 Secured Term Loan, Revolving Credit and Line of Credit
Agreement, dated July 27, 1983, between the Company and
Mellon Bank, N.A., (the "Mellon Credit Agreement"), filed
as Exhibit 4.2 to the Company's annual report on Form 10-K
for the fiscal year ended August 31, 1988 and incorporated
herein by reference.
4.3 First Amendment, dated September 4, 1984, to the Mellon
Credit Agreement, filed as Exhibit 4.3 to the Company's
annual report on Form 10-K for the fiscal year ended
August 31, 1988 and incorporated herein by reference.
30
Exhibit No. Document
- ----------- -------------------------------------------------------
4.4 Second Amendment, dated October 2, 1985 to the
Mellon Credit Agreement, filed as Exhibit 4.4 to
the Company's annual report on Form 10-K for the
fiscal year ended August 31, 1988 and incorporated
herein by reference.
4.5 Third Amendment, dated as of January 30, 1987, to
the Mellon Credit Agreement, filed as Exhibit 4.5
to the Company's annual report on Form 10-K for the
fiscal year ended August 31, 1988 and incorporated
herein by reference.
4.6 Fourth Amendment, dated as of August 31, 1987, to
the Mellon Credit Agreement, filed as Exhibit 4.6
to the Company's annual report on Form 10-K for the
fiscal year ended August 31, 1988 and incorporated
herein by reference.
4.7 Fifth Amendment, dated as of February 29, 1988, to
the Mellon Credit Agreement, filed as Exhibit 4.7
to the Company's annual report on Form 10-K for the
fiscal year ended August 31, 1988 and incorporated
herein by reference.
4.8 Sixth Amendment, dated as of July 12, 1989, to
the Mellon Credit Agreement, filed as Exhibit 4.8
to the Company's annual report on Form 10-K for the
fiscal year ended August 31, 1989 and incorporated
herein by reference.
4.9 Seventh Amendment, dated as of May 31, 1990, to
the Mellon Credit Agreement, filed as Exhibit 4.1
to the Company's quarterly report on Form 10-Q for the
fiscal quarter ended May 31, 1990 and incorporated
herein by reference.
4.10 Term note due June 1, 2000, filed as Exhibit 4.4 to
the Company's quarterly report on Form 10-Q for the
fiscal quarter ended May 31, 1990 and incorporated
herein by reference.
4.11 Letter, dated August 28, 1990, amending the Seventh
Amendment to the Mellon Credit Agreement, filed as
Exhibit 4.13 to the Company's annual report on
Form 10-K for the fiscal year ended August 31, 1990
and incorporated herein by reference.
-2-
31
Exhibit No. Document
- ----------- -------------------------------------------------------
4.12 Eighth Amendment, dated as of August 1, 1991, to
the Mellon Credit Agreement, filed as Exhibit 4.13
to the Company's annual report on Form 10-K for
the fiscal year ended August 31, 1991 and
incorporated herein by reference.
4.13 Ninth Amendment, dated as of December 18, 1991, to
the Mellon Credit Agreement, filed as Exhibit 19
to the Company's quarterly report on Form 10-Q for
the fiscal quarter ended February 29, 1992 and
incorporated herein by reference.
4.14 Tenth Amendment, dated as of August 18, 1992, to
the Mellon Credit Agreement, with the form of Term
Note due July 1, 2002 attached, filed as Exhibit 4.15
to the Company's annual report on Form 10-K for
the fiscal year ended August 31, 1992 and
incorporated herein by reference.
4.15 Eleventh Amendment, dated as of February 26, 1993, to
the Mellon Credit Agreement, filed as Exhibit 4.16
to the Company's quarterly report on Form 10-Q for
the fiscal quarter ended February 28, 1993 and
incorporated herein by reference.
4.16 Twelfth Amendment, dated as of June 30, 1994, to
the Mellon Credit Agreement, with the form of Term
Note due July 1, 2004 attached, filed as Exhibit 4.16
to the Company's annual report on Form 10-K for
the fiscal year ended August 31, 1994 and
incorporated herein by reference.
4.17 Thireteenth Amendment, dated as of May 31, 1995, to
the Mellon Credit Agreement, with the form of
Revolving Credit Note, dated June 8, 1995, and the
form of Term Note due July 1, 2005 attached, filed
herewith.
10.1 1985 Incentive Stock Plan, as adopted by the
Company's Board of Directors on August 22, 1985
and approved by the Company's shareholders on
October 31, 1985, filed on June 20, 1988 as part
of Exhibit 10.1 to Amendment No. 1 to Registration
Statement No. 33-17138 on Form S-1 and
incorporated herein by reference.*
-3-
32
Exhibit
No. Document
- ------- -----------------------------------------------------------
10.2 1985 Incentive Stock Option Plan, as amended by the Company's
Board of Directors on October 29, 1987, filed on June 20,
1988 as part of Exhibit 10.2 to Amendment No. 1 to
Registration Statement No. 33-17138 on Form S-1 and
incorporated herein by reference.*
10.3 1989 Stock Incentive Plan, as amended by the Company's Board of
Directors on October 13, 1994; filed herewith.*
10.4 Common Stock Purchase Plan for Salaried Employees, as amended
by the Company's Board of Directors on October 11, 1991, filed
as Exhibit 10.4 to the Company's annual report on Form 10-K
for the fiscal year ended August 31, 1991 and incorporated
herein by reference.*
10.5 Deferred Compensation Plan for Non-Employee Directors, as
adopted by the Company's Board of Directors on December 14,
1994, filed as Exhibit 10.6 to the Company's quarterly report
on Form 10-Q for the fiscal quarter ended February 28, 1995 and
incorporated herein by reference.*
10.6 Retirement Policy and Plan for Non-Employee Directors, as
amended by the Company's Board of Directors on December 14,
1994, filed as Exhibit 10.7 to the Company's quarterly report
on Form 10-Q for the fiscal quarter ended February 28, 1995 and
incorporated herein by reference.*
10.7 Written description of supplemental retirement benefit for
Thomas P. Woolaway, filed herewith.*
10.8 Indemnification and Insurance Agreement, dated August 12, 1988,
between the Company and John P. O'Leary, Sr. (substantially
identical agreements have been entered into with all the
Company's directors), filed as Exhibit 10.3 to the Company's
annual report on Form 10-K for the fiscal year ended August 31,
1988 and incorporated herein by reference.
11 Statement re Computation of Earnings Per Share, filed herewith.
-4-
33
Exhibit
No. Document
- ------- -----------------------------------------------------------
13 Those portions of the Annual Report to
Shareholders for the Fiscal year ended August 31, 1995
which are expressly incorporated in this
annual report by reference, filed herewith.
21 List of subsidiaries of the Company, filed
herewith.
23 Consent of S.R. Snodgrass, A.C., filed herewith.
24 Powers of Attorney, filed herewith.
27 Financial Data Schedule, filed herewith.
- -------------
<FN>
* Management contract or compensatory plan, contract or
arrangement required to be filed by Item 601(b) (10) (iii) of
Regulation S-K.
5