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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended August 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FEDDERS CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 22-2572390
(State of Incorporation) (I.R.S. Employer Identification No.)
505 MARTINSVILLE ROAD, LIBERTY CORNER, NJ 07938-0813
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (908) 604-8686
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SECURITIES REGISTERED PURSUANT TO SECTION 12 (b) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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Common Stock, $1 par value New York Stock Exchange, Inc.
Philadelphia Stock Exchange, Inc.
Class A Stock, $1 par value New York Stock Exchange, Inc.
SECURITIES REGISTERED PURSUANT TO SECTION 12 (g) OF THE ACT:
TITLE OF EACH CLASS
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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
requirements for the past 90 days. Yes X No
---- ----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ ].
As of the close of business on October 31, 1994, there were outstanding
18,988,099 shares of the Registrant's Common Stock, 10,627,879 shares of Class A
Stock and 2,267,906 shares of its Class B Stock. The approximate aggregate
market value (based upon the closing price on the New York Stock Exchange) of
these shares held by non-affiliates of the Registrant as of October 31, 1994 was
$148,190,144. (The value of a share of Common Stock is used as the value for a
share of Class B Stock as there is no established market for Class B Stock and
it is convertible into Common Stock on a share-for-share basis.)
FEDDERS CORPORATION
FORM 10-K ANNUAL REPORT
SEPTEMBER 1, 1993
TO
AUGUST 31, 1994
TABLE OF CONTENTS
PAGE
----
PART I
Item 1. Business 1
Item 2. Properties 6
Item 3. Legal Proceedings 7
Item 4. Submission of Matters to a Vote of
Security Holders 8
PART II
Item 5. Market for Registrant's Common Equity
and Related Matters 10
Item 6. Selected Financial Data 10
Item 7. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 10
Item 8. Financial Statements and Supplementary Data 10
Item 9. Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure 10
PART III
Item 10. Directors and Executive Officers of the
Registrant 11
Item 11. Executive Compensation 11
Item 12. Security Ownership of Certain Beneficial
Owners and Management 11
Item 13. Certain Relationships and Related
Transactions 11
PART IV
Item 14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K 12
PART I
ITEM 1. BUSINESS
(a) GENERAL DEVELOPMENT OF BUSINESS
Fedders Corporation (the "Company" or the "Registrant") is a holding
company which, through its wholly owned operating subsidiaries, is engaged in
the manufacture and sale of a complete line of room air conditioners and
dehumidifiers, principally for the residential market. Based upon industry
statistics compiled by a trade association, the Company believes it is the
largest manufacturer of room air conditioners in North America. Unless
otherwise indicated, all references herein to the "Company" or the "Registrant"
include Fedders Corporation and its principal operating subsidiaries, Fedders
North America, Inc. ("Fedders NA"), Emerson Quiet Kool Corporation ("EQK"),
Columbia Specialties, Inc. ("CSI"), Fedders, Inc., RTXX Corporation ("RTXX") and
Fedders International, Inc. ("FI"). EQK, CSI, RTXX and Fedders, Inc. are wholly
owned subsidiaries of Fedders NA. In 1994, Fedders NA also established a
Mexican sales subsidiary, Fedders de Mexico and FI established a Singapore
subsidiary, Fedders Asia Pte. Ltd. ("Fedders Asia").
In August 1992, the Company discontinued production in New Jersey and
agreed to sell its compressor business to NYCOR Acquisition Corp. ("NYCOR") see
Notes 2 and 12 of the Notes to Consolidated Financial Statements on pages 11 and
14 of the Annual Report, which notes are incorporated herein by reference. The
Company, under a ten year supply agreement, continues to rely upon NYCOR for a
significant portion of its requirements for rotary compressors, one of the most
important components of the air conditioners manufactured by the Company.
(b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
The Company operates in one industry segment. See Note 8 of the Notes to
Consolidated Financial Statements at page 13 of the Annual Report, which Note is
incorporated herein by reference.
(c) NARRATIVE DESCRIPTION OF BUSINESS
Products and Markets
The Company manufactures and sells a complete line of window and through-
the-wall room air conditioners, principally for the residential market, and also
markets split ductless room air conditioners for international markets. The
Company's air conditioners are manufactured in models ranging in capacity from
5,000 BTU (British Thermal Units) per hour to 32,000 BTU per hour. These models
comprise product lines marketed by the Company under the brands FEDDERS, EMERSON
QUIET KOOL and AIRTEMP. The Company also manufactures products under various
private labels.
The Company manufactures and markets, under the EMERSON QUIET KOOL brand, a
line of household dehumidifiers ranging in capacity from 30 to 60 pints per 24
hours.
In North America, the Company markets its products to retail chains, retail
buying groups and others representing over 10,000 retail outlets. The
distribution of appliances and electronics in North America has changed
significantly in the last several years. Most of the Company's sales, are now
made directly to retailers, in contrast to the early 1980s when distributors
accounted for the majority of the Company's business. In addition, in recent
periods the Company's customers have changed their purchasing patterns to
minimize inventories. In response, the Company has increased its manufacturing
flexibility, thereby improving its capabilities, especially in the areas of
just-in-time delivery.
In fiscal 1993, the Company consolidated all Fedders NA marketing, service
and accounting management into a Whitehouse, New Jersey headquarters location.
FNA serves many of its customers through regional sales offices and distribution
centers.
To support and service its customers and the ultimate consumer, the Company
has a network of third-party service centers throughout the United States and
regional parts depots to expedite repairs by local service companies during peak
demand periods.
The Company promotes its EMERSON QUIET KOOL and FEDDERS brands of air
conditioners through advertising, primarily in trade publications and also on
radio and television. The Company offers an advertising allowance to assist
retailers in advertising locally.
The Company's future business development activities are focused primarily
outside of North America. The Company believes that the market for room air
conditioners outside of North America is approximately four times the size of
the North American market. Demand for air conditioners outside of North America
accelerated in the 1980's with the increase in disposable income of populous
nations in hot weather climates. The Company has participated in international
markets for more than 30 years and has licensees in several countries.
The Company expects to participate in overseas production through strategic
alliances primarily under production and joint venture agreements, with
participation based on its expertise, technological capability and well
established global sourcing program. The Company currently has production
agreements in Taiwan, India and the People's Republic of China. Financing, if
required, is expected to be obtained locally. The Company is accelerating
development activities to penetrate the international markets in order to
realize greater growth potential than is afforded by the mature U.S. market and
to moderate its dependence
-2-
on summer weather in North America. In 1994, Fedders International created a new
subsidiary, Fedders Asia, Pte. Ltd. in Singapore for research, development,
testing and coordination of production of the Company's product at facilities
where production agreements are in place. The Company also has consolidated its
international headquarters with its executive offices in a single facility in
Liberty Corner, New Jersey. The Company believes it can compete cost-
effectively abroad based on its global sourcing network that currently delivers
components from around the world to two U.S. plants.
SOURCES AND AVAILABILITY OF RAW MATERIALS
The most important materials purchased by the Company are steel, copper and
aluminum, which are obtained from domestic and foreign suppliers. The Company
also purchases from other domestic and foreign manufacturers certain components,
including thermostats, compressors, motors and electrical controls, used in its
products. The Company endeavors to obtain the lowest possible cost in its
purchases of raw materials and components, which must meet specified quality
standards, through an active global sourcing program. The Company is not
dependent upon any one source for major components of its manufactured products,
except that it purchases compressors primarily from NYCOR. The Company
presently has a supply agreement with NYCOR through the year 2003 which provides
the Company a dependable source of rotary compressors. The Company has
additional suppliers of compressors. However, in the event that NYCOR were
unable to deliver the Company's requirements, the Company might have difficulty
obtaining substitute sources of supply.
PATENTS, TRADEMARKS, LICENSES AND CONCESSIONS HELD
The Company owns a number of trademarks. While the Company believes that
its trademarks, such as, FEDDERS, EMERSON QUIET KOOL and AIRTEMP, are well known
and enhance the marketing of its products, the Company does not consider the
successful conduct of its business to be dependent upon such trademarks.
SEASONALITY OF BUSINESS
The Company's results of operations and financial condition are entirely
dependent on the manufacture and sale of room air conditioners and
dehumidifiers, the demand for which is highly seasonal in North American
markets. Seasonally low volume sales are not sufficient to offset fixed costs,
resulting in seasonal operating losses at certain times of the year. In
addition, the Company's working capital needs are seasonal, with the Company's
greatest utilization of its lines of credit occurring early in the calendar
year. See "Management`s Discussion and Analysis of Results of Operations and
Financial Condition," at pages 4 and 5 of the Annual Report, which is
incorporated herein by reference.
-3-
See also the discussion under "Working Capital Practices."
WORKING CAPITAL PRACTICES
The Company regularly reviews working capital components with a view to
maintaining the lowest level consistent with requirements of anticipated levels
of operations. The Company's sales are predominantly made directly to
retailers, who typically require just-in-time delivery, primarily in April
through July. Production is weighted towards the retail selling season to
minimize borrowing earlier in the fiscal year, although room air conditioners
may be produced throughout much of the rest of the year at a lower rate of
production.
Information with respect to the Company's warranty and return policy is
provided in Note 1 of the Notes to Consolidated Financial Statements at page 10
of the Annual Report, which Note is incorporated herein by reference.
See also the information entitled "Management's Discussion and Analysis of
Results of Operations and Financial Condition" at pages 4 and 5 of the Annual
Report, which is incorporated herein by reference.
BACKLOG
The Company's fiscal year end (August 31) coincides with the end of the
seasonal room air conditioner sales cycle. Accordingly, backlog at this time of
the year is insignificant.
COMPETITION
The Company's competitors include a number of domestic and foreign
manufacturers of air conditioners and appliances, including Frigidaire Company,
Whirlpool Corporation and Matsushita Electric Industrial Company, Ltd. Many of
the Company's competitors are substantially larger and have greater resources
than the Company. The Company competes principally on the basis of price and
quality. Competitive factors could require price reductions or increased
spending on product development, marketing and sales that could adversely affect
the Company's profit margins.
RESEARCH AND DEVELOPMENT
Information with respect to amounts spent on research and development is
provided in Note 1 of the Notes to Consolidated Financial Statements at page 11
of the Annual Report, which Note is incorporated herein by reference.
-4-
ENVIRONMENTAL PROTECTION
It is the Company's policy to take all practical measures to minimize air
and water pollution resulting from its operations. The Company did not make
capital expenditures on environmental protection related items during the period
September 1, 1993 through August 31, 1994 that are material to its total capital
expenditures, earnings and competitive position and does not anticipate making
material capital expenditures on such items in the fiscal year ending August 31,
1995.
EMPLOYEES
The Company has approximately 1,800 employees. The current contracts with
two unions representing employees of the Effingham, Illinois plant are scheduled
to expire in October 1998. The Company considers its relations with its
employees to be generally satisfactory.
INTERNATIONAL SALES
For information with respect to international sales of the Company's
products, see Note 8 of the Notes to Consolidated Financial Statements at page
13 of the Annual Report, which Note is incorporated herein by reference. Future
sales are subject to the risks inherent in such activities, such as foreign
regulations, unsettled political conditions and exchange rate fluctuations.
-5-
ITEM 2. PROPERTIES
The Company owns or leases the following facilities:
Approximate Square
Location Principal Function Feet of Floor Area
- - -------- ------------------ ------------------
Liberty Corner, Corporate and 25,000
New Jersey International
(leased) Headquarters
Effingham, Illinois Manufacturing of 650,000
(Owned) Room Air Conditioners
Columbia, Tennessee Manufacturing of 232,000
(Owned) Plastic Components and
Room Air Conditioners
Dover, New Jersey Storage 50,000
(Owned)
Orangeville, (1) 106,000
Ontario (Owned)
Whitehouse, Fedders NA Headquarters 17,000
New Jersey (Leased)
(1) Facility available for sale or lease
The Effingham, Illinois facility is subject to a mortgage securing a $4.9
million, 1% promissory note payable to the State of Illinois.
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ITEM 3. LEGAL PROCEEDINGS
Not applicable.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
-8-
EXECUTIVE OFFICERS OF THE REGISTRANT
First Became an
Name and Age Position Held Executive Officer
- - ------------ ------------- -----------------
Salvatore Giordano, 84 Chairman of the Board 1945
Sal Giordano, Jr., Vice Chairman, President 1965
56 (1) and Chief Executive Officer
Robert L. Laurent, Jr., Executive Vice President, 1989
39 Finance and Administration
and Chief Financial Officer
S. A. Muscarnera, Senior Vice President and 1988
54 (2) Secretary
Norman W. Swartz, 55 Senior Vice President and 1992
President, Fedders
North America
Gary J. Nahai, 43 Vice President and 1993
President, Fedders
International, Inc.
________
(1) Son of Salvatore Giordano
(2) Nephew of Salvatore Giordano
BUSINESS EXPERIENCE DURING LAST FIVE YEARS
Messrs. Salvatore Giordano, Sal Giordano, Jr., Robert L. Laurent, Jr. and
Mr. Muscarnera have been associated in executive capacities with the Company for
more than five years.
Mr. Swartz was elected to his position in January 1992. Previously he was
Senior Vice President of Fedders North America and joined Fedders in 1989 as
Vice President of Private Label Products.
Mr. Nahai was elected to his position in March 1993. Previously he was
Vice President of Sales - New York Metro Region and, prior thereto, was Manager
of International Sales and Licenses. Mr. Nahai has been with the Company for
more than five years.
-9-
PART II
ITEM 5. MARKET FOR REGISTRANT`S COMMON EQUITY AND
RELATED MATTERS
The Company's Common Stock is listed on the New York Stock Exchange and the
Philadelphia Stock Exchange. The Company's Class A Stock is listed on the New
York Stock Exchange. There is no established public trading market for the
Company's Class B Stock, as there are restrictions on its transfer. As of
October 31, 1994, there were 5,369 holders of Common Stock, 5,422 holders of
Class A Stock and 50 holders of Class B Stock. For information with respect to
the Company's Common Stock, Class A Stock and Class B Stock, see Notes 9 and 10
on page 13 of the Annual Report, which Notes are incorporated herein by
reference.
ITEM 6. SELECTED FINANCIAL DATA
See the table entitled "Selected Financial Data" at page 5 of the Annual
Report, which table is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
See the information entitled "Management's Discussion and Analysis of
Results of Operations and Financial Condition" at pages 4 and 5 of the Annual
Report, which information is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements of the Company at August 31, 1994 and
1993, and for the years ended August 31, 1994, 1993 and 1992, the notes thereto
and the report of the Company's independent auditors thereon are included at
pages 6 through 15 of the Annual Report, which pages are incorporated herein by
reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable
-10-
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
For information with respect to the Company's directors, see the section
entitled "Election of Directors" in the Company's Proxy Statement to be filed in
connection with the Annual Meeting of Stockholders of the Company to be held on
December 20, 1994, which section is incorporated herein by reference. For
additional information with respect to the Company's executive officers, see
Page 9 herein.
Through inadvertence, Dr. Clarence R. Moll reported, in an untimely manner,
one transaction on Form 4 covering one sale of shares of the Common Stock of the
Company during the fiscal year. The Company is not aware of any failure of Dr.
Moll to file any required Form.
Through inadvertence, Mr. Norman W. Swartz was late in filing a required
report on Form 4. covering one sale of shares of the Common Stock of the Company
during the fiscal year. The Company is not aware of any failure on Mr. Swartz's
part to file any required Form.
ITEM 11. EXECUTIVE COMPENSATION
See the section entitled "Executive Compensation" in the Company's Proxy
Statement, to be filed in connection with the Annual Meeting of Stockholders of
the Company to be held on December 20, 1994, which section is incorporated
herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
See the sections entitled "Security Ownership of Directors and Officers"
and "Principal Stockholders" in the Company's Proxy Statement, to be filed in
connection with the Annual Meeting of Stockholders of the Company to be held on
December 20, 1994, which sections are incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See the section entitled "Election of Directors" in the Company's Proxy
Statement, to be filed in connection with the Annual Meeting of Stockholders of
the Company to be held on December 20, 1994, which section is incorporated
herein by reference.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
AND REPORTS ON FORM 8-K
Index to Financial Statements and Financial Statement Schedules
(a) 1. Financial Statements
The following Consolidated Financial Statements of the Company and its
subsidiaries are included at pages 6 through 15 of the Annual Report
and incorporated hereby reference:
Consolidated Statements of Operations and Stockholders' Equity for the
years ended August 31, 1994, 1993 and 1992.
Consolidated Balance Sheets at August 31, 1994 and 1993.
Consolidated Statements of Cash Flows for the years ended August 31,
1994, 1993 and 1992.
Notes to Consolidated Financial Statements
Report of Independent Auditors
(a) 2. Financial Statement Schedules
Consolidated Schedules as of and for the years ended August 31, 1994,
1993 and 1992.
Form 10-K Page
II. Accounts Receivable from
Related Parties S-1
V. Property, Plant and Equipment S-2
VI. Accumulated Depreciation of
Property, Plant and Equipment S-3
VIII. Valuation and Qualifying Accounts
and Reserves S-4
IX. Short-term Borrowings S-5
X. Supplementary Income Statement
Information S-6
All other schedules have been omitted because of the absence of the
conditions under which they are required or because the required
information is included in the Consolidated Financial Statements or the
Notes thereto.
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(a) 3. Exhibits
(Note: With respect to incorporation by reference to exhibits filed by
RTXX Corporation (formerly Rotorex Corporation), reference is hereby made to
Commission File No. 1-2150)
(3) (i) Restated Certificate of Incorporation, filed as Exhibit 3.1 to the
Company's Annual Report on Form 10-K for 1984 and incorporated hereby reference.
(ii) Amendment to Restated Certificate of Incorporation, filed as
Exhibit 4a to the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1985 and incorporated herein by reference.
(iii) Correction of Restated Certificate of Incorporation, filed as
Exhibit 4b to the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1985 and incorporated herein by reference.
(iv) Amendment of Certificate of Incorporation, filed as Exhibit (3)
(i) to the Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1987 and incorporated herein by reference.
(v) Amendment of Certificate of Incorporation, filed as Exhibit (3)
(ii) to the Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1987 and incorporated herein by reference.
(vi) Amendment to Certificate of Incorporation, filed as Exhibit (3)
(vi) to the Company's Annual Report on Form 10-K for the year ended August 31,
1992 and incorporated herein by reference.
(vii) By-Laws, amended through January 16, 1988, filed as Exhibit (3)
(vii) to the Company's Annual Report on Form 10-K for 1987 and incorporated
herein by reference.
(4) (i) Indenture dated April 22, 1971 with Chemical Bank as Trustee
covering Rotorex Corporation's 5% Convertible Subordinated Debentures due 1996,
filed as Exhibit (4) (i) to Annual Report on Form 10-K for 1985 of Fedders, and
incorporated herein by reference.
(ii) Appointment of Bradford Trust Company as successor trustee to
Chemical Bank, filed as Exhibit 13C to Annual Report on Form 10-K for 1977 of
Rotorex Corporation and incorporated herein by reference.
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(iii) First Supplemental Indenture with Bradford Trust Company, filed
as Exhibit 12C to Annual Report on Form 10-K for 1978 of Rotorex Corporation and
incorporated herein by reference.
(iv) Appointment of Schroder Trust Company as successor trustee to
Bradford Trust Company, filed as Exhibit 4.3 to Annual Report on Form 10-K for
1983 of Rotorex Corporation and incorporated herein by reference.
(v) Second Supplemental Indenture dated as of January 1, 1985 with J.
Henry Schroder Bank & Trust Company filed as Exhibit (iv) to Quarterly Report on
Form 10-Q of Rotorex Corporation for the quarter ended March 31, 1985 and
incorporated herein by reference.
(vi) Third Supplemental Indenture dated as of June 12, 1989 between
Rotorex Acquisition Corp. and IBJ Schroder Bank & Trust Company, filed as
Exhibit 10 (v) to Fedders Corporation's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1989 and incorporated herein by reference.
(vii) Indenture dated May 23, 1974 with The Chase Manhattan Bank, N.A.
as Trustee covering Rotorex Corporation's 8-7/8% Subordinated Debentures due
1994, filed as Exhibit 4.4 to Annual Report on Form 10-K for 1981 of Rotorex
Corporation and incorporated herein by reference.
(viii) Appointment of J. Henry Schroder Bank & Trust Company as
successor trustee to The Chase Manhattan Bank, N.A., filed as Exhibit 13B to
Annual Report on Form 10-K for 1977 of Rotorex Corporation and incorporated
herein by reference.
(ix) First Supplemental Indenture with J. Henry Schroder Bank & Trust
Company, filed as Exhibit 12B to Annual Report on Form 10-K for 1978 of Rotorex
Corporation and incorporated herein by reference.
(x) Second Supplemental Indenture dated as of June 12, 1989 between
Rotorex Acquisition Corp. and IBJ Schroder Bank & Trust Company, filed as
Exhibit 10 (iv) to Fedders Corporation's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1989 and incorporated here by reference.
(xiv) Second Supplemental Indenture dated as of June, 1989 between
Rotorex Acquisition Corp. and Mellon Bank, N.A., filed as Exhibit (10) (iii) to
Fedders Corporation's Quarterly Report on Form 10-Q for the quarter ended June
30, 1989 and incorporated herein by reference.
(10) (i) Stock Option Plan II, filed as Exhibit 10.4 to the Company's
Annual Report on Form 10-K for 1984 and incorporated herein by reference.
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(ii) Stock Option Plan III, filed as Exhibit 10 (iv) to the Company's
Annual Report on Form 10-K for 1985 and incorporated herein by reference.
(iii) Stock Option Plan IV, filed as Exhibit 10 (iv) to the Company's
Annual Report on Form 10-K for 1987 and incorporated herein by reference.
(iv) Stock Option Plan V, filed as Exhibit 10 (v) to the Company's
Annual Report on Form 10-K for 1988 and incorporated herein by reference.
(v) Stock Option Plan VI, filed as Exhibit 10 (vi) to the Company's
Annual Report on Form 10-K for 1989 and incorporated herein by reference.
(vi) Stock Option Plan VII, filed as Exhibit 10 (vi) to the Company's
Annual Report on Form 10-K for 1990 and incorporated herein by reference.
(vii) Promissory Note of Salvatore Giordano, Jr. dated July 27, 1992,
filed as Exhibit 10 (viii) to the Company's Annual Report on Form 10-K for 1992
and incorporated herein by reference.
(viii) Employment Contract between The Corporation and Salvatore
Giordano dated March 23, 1993, filed as Exhibit 10 (viii) to the Company's
Annual Report on Form 10-K 1993 and incorporated herein by reference.
(ix) Promissory Note of Salvatore Giordano, Jr., dated August 4, 1994
for stock purchases.
(x) Promissory Note of Robert Laurent, Jr. dated August 31, 1994 for
stock purchases.
(xi) Promissory Note of Joseph Giordano dated August 31, 1994 for stock
purchases.
(xii) Promissory Note of N.W. Swartz dated August 31, 1994 for stock
purchases.
(xiii) Promissory Note of N.W. Swartz dated September 30, 1994 for
relocation assistance.
(11) Statement re computation of per share earnings.
(13) 1994 Annual Report to Stockholders.
(21) Subsidiaries.
(23) Consent of Ernst & Young
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended August 31, 1994.
-15-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, hereunto duly authorized.
FEDDERS CORPORATION
By /s/Robert L. Laurent, Jr.
-----------------------------
Robert L. Laurent, Jr.
Executive Vice President,
Finance and Administration and
Date: November 4, 1994 Chief Financial
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
Signature Title Date
- - --------- ----- ------
/s/Salvatore Giordano
------------------
Salvatore Giordano Chairman of the Board November 4, 1994
/s/Salvatore Giordano, Jr.
-----------------------
Salvatore Giordano, Jr. Vice Chairman, President November 4, 1994
and Chief Executive
Officer and a Director
(Principal Executive
Officer)
/s/Joseph Giordano
---------------
Joseph Giordano Director November 4, 1994
/s/Howard S. Modlin
----------------
Howard S. Modlin Director November 4, 1994
/s/Clarence Russel Moll
--------------------
Clarence Russel Moll Director November 4, 1994
/s/William J. Brennan
------------------
William J. Brennan Director November 4, 1994
/s/S.A. Muscarnera
---------------
S.A. Muscarnera Director November 4, 1994
/s/Robert L. Laurent, Jr.
----------------------
Robert L. Laurent, Jr. Executive Vice President November 4, 1994
- Finance and
Administration
(Principal Financial and
Accounting Officer)
-16-
FEDDERS CORPORATION
AMOUNTS RECEIVABLE FROM RELATED PARTIES
SCHEDULE II
For The Years Ended August 31, 1994, 1993 and 1992
(Amounts in thousands)
Deductions Balance at end of period
----------------- ---------------------------
Balance
at Amounts
beginning Amounts written Not
of period Additions collected off Current current
Name of Debtor --------- --------- --------- ------- ------------ ------------
Year ended: August
31,1994:
Sal Giordano, Jr. $429 $270(1) -- -- $270 $429
Joseph Giordano -- 187(1) -- -- 187 --
Robert Laurent, Jr. -- 143(1) -- -- 143 --
N.W. Swartz -- 195(1&2) -- $30 45 120
---- ---- ---- --- ------------ ------------
$429 $795 -- $30 $645 $549
==== ==== ==== === ============ ============
Year ended: August 31,
1994:
Sal Giordano, Jr. (3) $429 -- -- -- -- $429
==== ==== ==== === ============ ============
Year ended: August 31,
1992:
Sal Giordano, Jr. (3) -- $429 -- -- -- $429
==== ==== ==== === ============ ============
(1) For stock options exercised during a six-week period in early 1994,
optionees were given the opportunity to pay two-thirds of the exercise price
upon exercise and to defer the remaining balance until the earlier of July
31, 1995 or upon the sale of capital stock of the Company received from the
exercise of such options. Such optionees executed non-recourse interest-
bearing notes.
(2) Includes a $150 relocation assistance loan which is secured by a non-
interest bearing note due August 30, 1998, and a second mortgage on his
residence. The Company has forgiven $30 in 1994.
(3) Promissory note, payable upon the sale of capital stock received from
exercised stock options but no later then July 1997, which bears interest at
the prevailing prime rate
S-1
FEDDERS CORPORATION
PROPERTY, PLANT AND EQUIPMENT
SCHEDULE V
For The Years Ended August 31, 1994, 1993 and 1992
(Amounts in Thousands)
Balance at Additions Balance
beginning at Other at end
of period cost Retirements changes of period
---------- --------- ----------- -------- ---------
Year Ended August 31,
1994
Land and improvements $ 1,393 -- -- ($30) $1,363
Buildings 11.844 $244 $60 (23) 12,005
Machinery and equipment 44,799 2,390 911 (83) 46,195
Machinery and equipment -- 951 -- -- 951
under capital lease -------- ------ ---- -------- --------
$58,036 $3,585 $971 ($136)(1) $60,514
======== ====== ==== ======== ========
Year Ended August 31,
1993
Land and improvements $5,378 -- -- ($3,985) $1,393
Buildings 19,791 $122 -- (8,069) 11,844
Machinery and equipment 63,756 2,602 $257 (21,302) 44,799
Machinery and equipment 12,626 -- -- (12,626) --
under capital lease -------- ------ ---- -------- --------
$101,551 $2,724 $257 ($45,982)(1&2) $58,036
======== ====== ==== ======== ========
Year Ended August 31,
1992
Land and improvements $5,417 -- -- ($39) $5,378
Buildings 19,848 -- -- (57) 19,791
Machinery and Equipment 61,019 $3,695 $958 -- 63,756
Machinery and equipment 12,629 -- 3 -- 12,626
under capital lease -------- ------ ---- -------- --------
$98,913 $3,695 $961 ($96)(1) $101,551
======== ====== ==== ======== ========
(1) Decrease due to computation of cumulative translation adjustment for assets
at the Ontario, Canada facility amounting to $136, $345 and $96 in 1994, 1993
and 1992, respectively (see note 1 of the Notes to Consolidated Financial
Statements in the Annual Report).
(2) Decrease due to sale of compressor operations including property, plant and
equipment in the amount of $45,637 on September 28, 1992 (see note 12 of the
Notes to Consolidated Financial Statements in the Annual Report).
S-2
FEDDERS CORPORATION
ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT
SCHEDULE VI
For the Years Ended August 31, 1994, 1993 and 1992
(Amounts in Thousands)
Balance at Charges Balance
beginning to cost Other at end
of period and expenses Retirements Changes of period
---------- ------------ ----------- -------- ---------
Year Ended August 31,
1994
Land and improvements $ 58 $ 12 -- -- $ 70
Buildings 4,869 996 $ 41 $ 78 5,902
Machinery and equipment 21,472 2,429 603 3,824 27,122
Machinery and equipment
under -- 48 -- -- 48
capital lease ------- ------ ---- -------- -------
$26,399 $3,485 $644 $ 3,902 (1) $33,142
======= ====== ==== ======== =======
Year Ended August 31,
1993
Land and improvements $ 46 $ 12 -- -- $ 58
Buildings 4,999 459 -- ($589) 4,869
Machinery and equipment 26,567 1,877 $168 (6,804) 21,472
Machinery and equipment
under 4,325 108 -- (4,433) --
capital lease ------- ------ ---- -------- -------
$35,937 $2,456 $168 ($11,826)(2) $26,399
======= ====== ==== ======== =======
Year Ended August 31,
1992
Land and improvements $ 29 $ 17 -- -- $ 46
Buildings 3,730 1,269 -- -- 4,999
Machinery and equipment 22,737 4,116 $286 -- 26,567
Machinery and equipment
under 3,025 1,301 1 -- 4,325
capital lease ------- ------ ---- -------- -------
$29,521 $6,703 $287 -- $35,937
======= ====== ==== ======== =======
- - --------
(1) Reduction due to write down of certain idled equipment to estimated net
realizable value (see note 1 to the Notes to Consolidated Financial
Statements in the Annual Report).
(2) Reduction due to sale of the compressor operation (see note 12 to the Notes
to Consolidated Financial Statements in the Annual Report).
S-3
FEDDERS CORPORATION
VALUATION & QUALIFYING ACCOUNTS AND RESERVES
SCHEDULE VIII
For The Years Ended August 31, 1994, 1993 and 1992
(Amounts in thousands)
Balance Additions Balance
at charged at end
beginning to of
of period expense Deductions period
--------- --------- ---------- -------
Allowance for Doubtful Accounts:
Year ended:August 31, 1994 $1,078 $171 $ 505 $ 744
====== ==== ======= ======
August 31, 1993 $3,356 $ 63 $2,341 (1) $1,078
====== ==== ======= ======
August 31, 1992 $3,496 $242 $ 382 $3,356
====== ==== ======= ======
- - --------
(1) Deductions include $474 related to the sale of the compressor operations
(see note 12 of the Notes to Consolidated Financial Statements in the
Annual Report).
S-4
FEDDERS CORPORATION
SHORT-TERM BORROWING
SCHEDULE IX
For The Years Ended August 31, 1994, 1993 and 1992
(Amounts In Thousands)
Maximum Average (3) Weighted (2)
Balance Weighted Amount Amount Average
at End Average Outstanding Outstanding Interest
of Interest During the During the Rate During
Category of Aggregate Period Rate Period Period the Period
Short-term Borrowing(1) ------- -------- ----------- ----------- ------------
Year Ended: August 31, 1994 -- -- $28,404 $11,425 8.7%
======= ==== ======= ======= ====
August 31, 1993 -- -- $20,479 $ 7,419 9.0%
======= ==== ======= ======= ====
August 31, 1992 $40,000 10.5% $68,597 $50,657 11.4%
======= ==== ======= ======= ====
- - --------
(1) For a description of credit facilities see note 4 of the Notes to
Consolidated Financial Statements in the Annual Report.
(2) Aggregate interest expense divided by daily average loans outstanding
during the period.
(3) Aggregate month-end balance divided by twelve months.
S-5
FEDDERS CORPORATION
SUPPLEMENTARY INCOME STATEMENT INFORMATION(1)
SCHEDULE X
For The Years Ended August 31, 1994, 1993 and 1992
(Amounts in thousands)
Charged to Costs and Expenses
Years ended August 31,
------------------------
1994 1993 1992
------ ------ ------
Advertising costs $2,272 $1,452 $2,944
====== ====== ======
Maintenance and repairs $1,860 $1,326 $1,889
====== ====== ======
Amortization:
Intangibles $1,334 $2,550 $6,927
Debt discount 631 640 1,246
------ ------ ------
Total amortization $1,965 $3,190 $8,173
====== ====== ======
- - --------
(1) All other information required by this schedule has been omitted because
the amounts involved are not in excess of 1% of total sales and revenues.
S-6
EXHIBIT INDEX
Exhibit No. Description Page
- - ----------- ----------- ----
(3) (i) Restated Certificate of Incorporation, filed as Exhibit 3.1 to the
Company's Annual Report on Form 10-K for 1984 and incorporated hereby
reference.
(ii) Amendment to Restated Certificate of Incorporation, filed as Exhibit
4a to the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1985 and incorporated herein by reference.
(iii) Correction of Restated Certificate of Incorporation, filed as Exhibit
4b to the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1985 and incorporated herein by reference.
(iv) Amendment of Certificate of Incorporation, filed as Exhibit (3) (i) to
the Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1987 and incorporated herein by reference.
(v) Amendment of Certificate of Incorporation, filed as Exhibit (3) (ii)
to the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1987 and incorporated herein by reference.
(vi) Amendment to Certificate of Incorporation, filed as Exhibit (3)(vi) to
the Company's Annual Report on Form 10-K for the year ended August 31, 1992
and incorporated herein by reference.
(vii) By-Laws, amended through January 26, 1988, filed as Exhibit (3) (vii)
to the Company's Annual Report on Form 10-K for 1987 and incorporated
herein by reference.
(4) (i) Indenture dated April 22, 1971 with Chemical Bank as Trustee covering
Rotorex Corporation's 5% Convertible Subordinated Debentures due 1996,
filed as Exhibit (4) (i) to Annual Report on Form 10-K for 1985 of
Fedders, and incorporated herein by reference.
(ii) Appointment of Bradford Trust Company as successor trustee to Chemical
Bank, filed as Exhibit 13C to Annual Report on Form 10-K for 1977 of
Rotorex Corporation and incorporated herein by reference.
(iii) First Supplemental Indenture with Bradford Trust Company, filed as
Exhibit 12C to Annual Report on Form 10-K for 1978 of Rotorex
Corporation and incorporated herein by reference.
(iv) Appointment of Schroder Trust Company as successor trustee to Bradford
Trust Company, filed as Exhibit 4.3 to Annual Report on Form 10-K for
1983 of Rotorex Corporation and incorporated herein by reference.
(v) Second Supplemental Indenture dated as of January 2, 1985 with J.
Henry Schroder Bank & Trust Company filed as Exhibit (iv) to Quarterly
Report on Form 10-Q of Rotorex Corporation for the quarter ended March
31, 1985 and incorporated herein by reference.
(vi) Third Supplemental Indenture dated as of June 12, 1989 between Rotorex
Acquisition Corp. and IBJ Schroder Bank & Trust Company, filed as
Exhibit 10 (v) to Fedders Corporation's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1989 and incorporated herein by
reference.
(vii) Indenture dated May 23, 1974 with The Chase Manhattan Bank, N.A. as
Trustee covering Rotorex Corporation's 8-7/8% Subordinated Debentures
due 1994, filed as Exhibit 4.4 to Annual Report on Form 10-K for 1981
of Rotorex Corporation and incorporated herein by reference.
(viii) Appointment of J. Henry Schroder Bank & Trust Company as successor
trustee to The Chase Manhattan Bank, N.A., filed as Exhibit 13B to
Annual Report on Form 10-K for 1977 of Rotorex Corporation and
incorporated herein by reference.
(ix) First Supplemental Indenture with J. Henry Schroder Bank & Trust
Company, filed as Exhibit 12B to Annual Report on Form 10-K for 1978
of Rotorex Corporation and incorporated herein by reference.
(x) Second Supplemental Indenture dated as of June 12, 1989 between
Rotorex Acquisition Corp. and IBJ Schroder Bank & Trust Company, filed
as Exhibit 10 (iv) to Fedders Corporation's Quarterly Report on Form
10-Q for the quarter
ended June 30, 1989 and incorporated here by reference.
(xi) Indenture dated as of January 1, 1983 with Bradford Trust Company as
Trustee covering Rotorex Corporation's 11-7/8% Senior Subordinated
Debentures due 1995, filed as Exhibit 4.10 to Annual Report on From
10-K for 1983 of Rotorex Corporation and incorporated herein by
reference.
(xii) First Supplemental Indenture with Bradford Trust Company covering
Rotorex Corporation's 11-7/8% Senior Subordinated Debentures due 1995,
filed as an exhibit to Quarterly Report on Form 10-Q of Rotorex
Company for the quarter ended June 30, 1984 and incorporated herein by
reference.
(xiii) Instrument or Resignation, Appointment and Acceptance dated October 4,
1987 among Rotorex Corporation, Fidata Trust Company New York and
Mellon Bank, N.A. appointing Mellon Bank, N.A. successor trustee of
Rotorex Corporation's 11-7/8% Senior Subordinated Debentures due 1995,
filed as Exhibit (4) (xii) to Annual Report on Form 10-K on NYCOR,
Inc. for 1987 and incorporated herein by reference.
(xiv) Second Supplemental Indenture dated as of June, 1989 between Rotorex
Acquisition Corp. and Mellon Bank, N.A., filed as Exhibit (10) (iii)
to Fedders Corporation's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1989 and incorporated herein by reference.
(10) (i) Stock Option Plan II, filed as Exhibit 10.4 to the Company's Annual
Report on Form 10-K for 1984 and incorporated herein by reference.
(ii) Stock Option Plan III, filed as Exhibit 10 (iv) to the Company's
Annual Report on Form 10-K for 1985 and incorporated herein by
reference.
(iii) Stock Option Plan IV, filed as Exhibit 10 (iv) to the Company's Annual
Report on Form 10-K for 1987 and incorporated herein by reference.
(iv) Stock Option Plan V, filed as Exhibit 10 (v) to the Company's Annual
Report on Form 10-K for 1988 and incorporated herein by reference.
(v) Stock Option Plan VI, filed as Exhibit 10 (vi) to the Company's Annual
Report on Form 10-K for 1989 and incorporated herein by reference.
(vi) Stock Option Plan VII, filed as Exhibit 10 (vi) to the Company's
Annual Report on Form 10-K for 1990 and incorporated herein by
reference.
(vii) Promissory Note of Salvatore Giordano, Jr. dated July 27, 1992, filed
as Exhibit 10 (viii) to the Company's Annual Report on Form 10-K for
1992 and incorporated herein by reference,.
(viii) Employment Contract between The Corporation and Salvatore Giordano
dated March 23, 1993, filed as Exhibit 10 (viii) to the Company's
Annual Report on Form 10-K 1993 and incorporated herein by reference.
(ix) Promissory Note of Salvatore Giordano, Jr., dated August 4, 1994.
(x) Promissory Note of Robert Laurent, Jr. dated August 4, 1994.
(xi) Promissory Note of Joseph Giordano dated August 4, 1994.
(xii) Promissory Note of N. W. Swartz dated August 4, 1994.
(xiii) Promissory Note of N. W. Swartz dated September 30, 1994.
(11) Statement re computation of per share earnings.
(13) 1994 Annual Report to Stockholders.
(21) Subsidiaries.
(23) Consent of Ernst & Young
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended August 31,
1994.