EXHIBIT 13
----------
DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SALES AND EARNINGS
Sales were $429,220,000 in 1993, a 15% decline from the prior year's
$502,366,000. Sales in 1991 were $499,240,000. Income from continuing
operations declined 37% in 1993 to $10,555,000 from $16,703,000 in 1992, which
was 25% lower than 1991's income of $22,424,000. Income from continuing
operations, per share of common stock, was $1.73 in 1993, $2.67 in 1992, and
$3.52 in 1991.
The decrease in consolidated sales in 1993 is attributed primarily to a
significant drop in sales to the U.S. Defense Department and lower
international sales, particularly in Europe. U.S. commercial sales in 1993
were minimally higher than 1992. Defense product sales of gas masks and parts
were especially high in late 1991 and early 1992 due to orders relating to the
Middle East conflict. Shipments of defense products to U.S. government
agencies in 1993 were $43,234,000, a 57% decrease from 1992 shipments of
$99,991,000. Shipments in 1992 were 7 1/2% higher than 1991 shipments of
$93,034,000. These sales represent 10% of consolidated sales in 1993, as
compared to 20% in 1992 and 18 1/2% in 1991. New contracts received in 1993
were $32,558,000 as compared to $48,510,000 in 1992. The 1993 year-end backlog
was $54,889,000, a 16% decrease from the 1992 year-end backlog of $65,565,000.
Domestic sales of commercial products increased in shipments of
instrument products in 1993 and 1992, along with increased chemical products
sales in 1992. Sales of commercial safety products were about the same as in
1992 and 1991. Sales by international operations, stated in U.S. dollars,
decreased 10 1/2% in 1993, after having decreased 3 1/2% in 1992. These
decreases are due primarily to currency exchange rate shifts and the widespread
economic recession, particularly in Europe.
The 1993 gross profit rate was 36.3%, an increase over the 34.8% and
35.0% experienced in 1992 and 1991, respectively. Historically and currently,
commercial sales carry much greater margins than military sales; thus the
change of sales mix has contributed to higher profit margins. Furthermore,
military sales profit rates dropped significantly in 1992 and 1991, reflecting
the impacts of development and start-up costs for new model designs and the
results of competitive bidding pressures. Results in 1991 were also adversely
affected by operating losses at the Catalyst Research Division. Depreciation,
selling and administrative expenses approximated 30% of sales in each of the
years 1993, 1992 and 1991.
Income from continuing operations in 1993 was not materially affected
by relocation and restructuring activities, whereas in 1992 there was an
after-tax charge of $3,163,000 or $ .51 per share. In 1992 the company
consolidated certain U.S. manufacturing operations. The medical instruments,
specialty sensor and battery operations at the Catalyst Research Division in
Owings Mills, Maryland were transferred to the Instrument Division in
Cranberry, Pa., and the Owings Mills facility offered for sale. Safety
products manufacturing is now concentrated in three principal locations after a
reduction in the scope of operations at Evans City, Pa. In 1993, the German
affiliate closed one factory and a distribution center and now conducts all its
operations from Berlin. Major reductions in the work forces have been
instituted, particularly in Europe and Latin America. It is expected that
these changes will enable the company to serve its commercial and military
customers more efficiently and maintain ample capacity to meet future growth
potential.
Net income in 1993 was $10,555,000 or $1.73 per share of common stock,
compared to 1992 net income of $2,672,000 or $.42 per share (includes special
charges for accounting changes and discontinued operations) and $18,651,000 or
$2.92 per share in 1991. The accounting changes in 1992 resulted in an
after-tax cumulative effect charge, as of January 1, 1992, of $8,964,000 or
$1.44 per share of common stock. SFAS No. 106--"Employers' Accounting for
Postretirement Benefits Other Than Pensions" was implemented on an immediate
recognition basis rather than spreading the accumulated obligation over 20
years (see note 16). This one-time transition effect decreased net income
$8,672,000 ($1.39 per share). SFAS No. 112--"Employers' Accounting for
Postemployment Benefits," pertaining to benefits such as workers' compensation
and other disability expenses, reduced earnings $2,440,000 ($.39 per share).
SFAS No. 109--"Accounting for Income Taxes" increased earnings $2,148,000
($.34 per share). This Standard requires that deferred tax balances be stated
at tax rates expected to be in effect when taxes are actually paid or
recovered. This asset/liability method may have a more volatile effect on
future earnings than the previous method which provided deferred taxes at tax
rates prevailing during the periods that timing differences occurred. Although
these three new Standards significantly reduced 1992 net income, they did not
have any cash flow impact.
The company decided, as of the end of 1992, to discontinue the
operation of Transfer-Metallisierte Produkte GmbH (TMP), a joint venture in
Germany to produce metallized paper. This venture, unrelated to the company's
safety products, has been a financial drain on the company. Operating
activities ceased during 1993; the company is in the process of disposing of
its assets and settling its liabilities. TMP's cumulative losses since
inception in the company's consoli-
7
dated results, adjusted for the after-tax effects of intercompany transactions,
aggregate approximately $10.9 million. The company estimates that any losses
that may be incurred from the disposition of TMP, including provision for
operating losses during the phase-out period, will not affect 1993 and 1992 net
income or cash flows after deducting the aforementioned accumulated losses
already recognized and the tax benefits associated with any write-off.
The after-tax effects of foreign currency exchange losses charged to
income in 1993 reduced net income $3,204,000 or $.53 per share, as compared to
$5,022,000 or $.81 per share in 1992 and $2,408,000 or $.38 per share in 1991.
The more significant losses resulted from the currency valuation changes that
occurred in Brazil in each of the three years. The effective income tax rates,
for which further information is included at note 8, were 42.1% in 1993, 39.9%
in 1992, and 41.4% in 1991.
FINANCIAL CONDITION AND FUNDS FLOW
Cash and cash equivalents decreased $8,975,000 during 1993. Accounts
receivable of $81,897,000 at December 31, 1993 includes $10,129,000 from the
sale of fixed assets. Trade receivables expressed in number of days' sales
outstanding were 61 days, as compared to 55 days in 1992. Inventories
decreased $6,330,000 to $81,454,000 at December 31, 1993. Inventory measured
against sales turned 5.3 times in 1993 and 5.7 times in 1992. Inventories
decreased primarily in the international companies. The working capital ratio
was 3.7 and 4.2 to 1 at years-end 1993 and 1992, respectively.
All short-term debt was owed by international affiliates. These loans
are payable in local currencies, which is in keeping with the company's policy
of minimizing foreign currency exposures by offsetting foreign currency assets
with foreign currency debt. The average interest rate on these loans, which
includes the effects of borrowing in certain countries where local inflation
has resulted in high interest rates, was approximately 14%.
Long-term debt and the current portion thereof decreased $1,402,000 to
$30,982,000, a conservative 11% of total capital. Total capital is defined as
long-term debt plus current portion of long-term debt and shareholders' equity.
Capital expenditures of $20,399,000 in 1993 represent a decrease of
$2,363,000 from 1992 expenditures of $22,762,000. The company has continued
its program of plant and equipment modernization to increase efficiency of
existing manufacturing and distribution facilities. For the most part, capital
expenditures were financed internally through retained earnings. In the past
five years, approximately $ 111 million has been spent on new plants, equipment
and distribution facilities.
Dividends paid on the common stock during 1993 (the 76th consecutive
year of a dividend payment) were $.92 per share, up from the $.89 per share
paid during 1992 and $.88 per share paid in 1991. The current quarterly cash
dividend is $.23 per share on common stock. Cash dividends have been paid at a
conservative percentage of income which has permitted the company to finance
its growth almost exclusively
8
through retained earnings. Common shares are repurchased from time-to-time in
keeping with the company's policy of buying back a limited number of its shares.
As of December 31, 1993, an additional 129,120 shares may be repurchased under
current authorizations.
Credit available at year-end with banks was the U.S. dollar equivalent
of $8,858,000. The company's financial position remains strong and should
provide adequate capital resources for growth.
CUMULATIVE CURRENCY TRANSLATION ADJUSTMENT
The year-end position of the U.S. dollar relative to foreign currencies
resulted in a translation loss of $5,400,000 being charged to the cumulative
translation adjustments shareholders equity account in 1993, as compared to
losses of $4,736,000 in 1992 and $7,527,000 in 1991. Significant translation
losses occurred in Germany and Italy in 1993, in Britain, Canada, Italy and
Australia in 1992 and in Germany and Britain in 1991.
COMMON STOCK
At December 31, 1993, there were 6,011,628 shares of common stock outstanding.
There were approximately 480 identifiable common stockholders as of November
19, 1993, a recent date for dividends. The common stock last-sale price and
up-to-the-minute volume information (Symbol: MNES) is included in the National
Association of Security Dealers, Inc., (NASDAQ) National Market System. The
quarterly high and low price quotations for common shares follow:
1993 1992
-------------------- -------------------
Quarter High Low High Low
- ------- ---- --- ---- ---
First $46 $39 3/4 $51 $43 1/2
Second 49 44 46 42
Third 45 3/4 41 1/4 45 3/4 41 3/4
Fourth 45 41 3/4 44 1/2 38
Common stock quarterly cash dividend information is as follows:
Amount Record Payment
Quarter Per Share Date Date
- ------- --------- ---- ----
1993
------
First $ .23 Feb. 19, 1993 March 10, 1993
Second .23 May 14, 1993 June 10, 1993
Third .23 Aug. 13, 1993 Sept. 10, 1993
Fourth .23 Nov. 19, 1993 Dec. 10, 1993
-----
Total .92
-----
1992
------
First $ .22 Feb. 21, 1992 March 10, 1992
Second .22 May 15, 1992 June 10, 1992
Third .22 Aug. 14, 1992 Sept. 10, 1992
Fourth .23 Nov. 20, 1992 Dec. 10, 1992
-----
Total .89
-----
The company's stock transfer agent is Norwest Bank Minnesota, N.A., 161
North Concord Exchange, P. O. Box 738, South St. Paul, MN 55075-0738.
9
REPORT OF MANAGEMENT
Mine Safety Appliances Company's consolidated financial statements and related
notes that appear in this Annual Report to Shareowners were prepared by the
company in accordance with generally accepted accounting principles. In
fulfilling its responsibilities for the integrity and objectivity of the
consolidated financial statements, management maintains accounting procedures
designed to provide accurate books, records and accounts which reasonably and
fairly reflect the transactions of the company in a consistent manner on the
accrual basis of accounting.
Company personnel are trained and given responsibilities to ensure
adequate internal accounting controls at a cost commensurate with the risks
involved. Internal accounting controls, monitored by an internal audit staff,
provide reasonable assurances that transactions are executed in accordance with
proper authorization and that adequate accountability for the company's assets
is maintained.
The Board of Directors, through its Audit Committee, is responsible for
assuring that management fulfills its responsibilities in the preparation of
the financial statements. The Audit Committee meets at least twice a year with
the company's independent accountants to discuss the scope of their examination
and any significant findings resulting therefrom.
/s/ James E. Herald
- -------------------
James E. Herald
Vice President--Finance
Chief Financial Officer
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareowners and Board of Directors
of Mine Safety Appliances Company:
In our opinion, the accompanying consolidated balance sheet and the
related consolidated statements of income, of earnings retained in the business,
and of cash flows present fairly, in all material respects, the financial
position of Mine Safety Appliances Company and its subsidiaries at December 31,
1993 and 1992, and the results of their operations and their cash flows for each
of the three years in the period ended December 31, 1993, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
As discussed in Note 18 to these consolidated financial statements, the
Company adopted Statement of Financial Accounting Standards (SFAS) No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions," SFAS
No. 109, "Accounting for Income Taxes," and SFAS No. 112, "Employers' Accounting
for Postemployment Benefits" in 1992.
/s/ Price Waterhouse
- --------------------
Price Waterhouse
Pittsburgh, Pennsylvania
February 16, 1994
10
Consolidated Statement of Income
- --------------------------------
(In thousands, except per share amounts)
Year Ended December 31 1993 1992 1991
Net sales.................................................................... $429,220 $502,366 $499,240
Other income................................................................. 5,885 9,755 8,886
-------- -------- --------
435,105 512,121 508,126
-------- -------- --------
Costs and expenses
Cost of products sold..................................................... 273,350 327,555 324,448
Selling, general and administrative....................................... 121,529 130,182 124,983
Depreciation.............................................................. 17,294 16,831 16,230
Interest.................................................................. (1,713) 1,536 1,739
Foreign currency losses................................................... 3,201 5,507 2,456
Facilities consolidation and restructuring charges........................ (223) 5,500
Contract costs recovery................................................... (2,800)
-------- -------- --------
416,864 484,311 469,856
-------- -------- --------
Income from continuing operations before income taxes........................ 18,241 27,810 38,270
Provision for income taxes................................................... 7,686 11,107 15,846
-------- -------- --------
Income from continuing operations............................................ 10,555 16,703 22,424
Losses from discontinued operations (Note 7)................................. (5,067) (3,773)
Cumulative effect to January 1, 1992
of changes in accounting principles (Note 18).............................. (8,964)
-------- -------- --------
Net income................................................................... $ 10,555 $ 2,672 $ 18,651
======== ======== ========
Earnings per common share
Continuing operations..................................................... $ 1.73 $ 2.67 $ 3.52
Discontinued operations................................................... (.81) (.60)
Cumulative effect to January 1, 1992 of changes in accounting principles.. (1.44)
-------- -------- --------
Net income................................................................ $ 1.73 $ .42 $ 2.92
======== ======== ========
Consolidated Statement of
Earnings Retained in the Business
- ---------------------------------
(In thousands, except per share amounts)
Year Ended December 31 1993 1992 1991
At beginning of year............................................. $282,371 $285,307 $272,315
Net income....................................................... 10,555 2,672 18,651
Dividends
Common--$.92, $.89 and $.88 per share......................... (5,584) (5,550) (5,600)
Preferred--$2.25 per share.................................... (56) (58) (59)
-------- -------- --------
At end of year................................................... $287,286 $282,371 $285,307
======== ======== ========
See notes to consolidated financial statements
11
Consolidated Balance Sheet
- --------------------------
(In thousands, except per share amounts)
December 31 1993 1992
ASSETS
Current Assets Cash............................................... $ 10,953 $ 13,117
Temporary investments, at cost which
approximates market............................... 35,481 42,292
Receivables, less allowance for doubtful
accounts $2,516 and $2,453........................ 81,897 75,779
Inventories........................................ 81,454 87,784
Prepaid expenses and other current assets.......... 14,824 13,440
--------- ---------
Total current assets............................... 224,609 232,412
--------- ---------
Property Land............................................... 6,766 7,566
Buildings.......................................... 104,942 107,239
Machinery and equipment............................ 183,776 181,062
Construction in progress........................... 11,207 10,041
--------- ---------
Total............................................. 306,691 305,908
Less accumulated depreciation...................... (153,162) (149,763)
--------- ---------
Net property....................................... 153,529 156,145
--------- ---------
Other Assets Assets of discontinued business.................... 7,175 6,092
Other assets....................................... 22,571 13,123
--------- ---------
Total other assets................................. 29,746 19,215
--------- ---------
Total.............................................. $ 407,884 $ 407,772
========= =========
LIABILITIES
Current
Liabilities Notes payable and current portion of
long-term debt.................................... $ 6,294 $ 6,451
Accounts payable................................... 20,925 25,215
Employees' compensation............................ 11,460 11,271
Insurance.......................................... 7,509 7,067
Taxes on income.................................... (3,474) (7,349)
Other current liabilities.......................... 17,696 12,470
--------- ---------
Total current liabilities.......................... 60,410 55,125
--------- ---------
Long-term Debt ................................................... 27,476 28,868
--------- ---------
Other
Liabilities Deferred income taxes.............................. 12,142 9,794
Pensions and other employee benefits............... 46,856 49,128
Other noncurrent liabilities....................... 1,256 1,663
--------- ---------
Total other liabilities............................ 60,254 60,585
--------- ---------
SHAREHOLDERS' EQUITY
Preferred stock, 4 1/2% cumulative, $50 par value
(callable at $52.50)............................. 3,569 3,569
Common stock, no par value (shares outstanding:
1993--6,011,628; 1992--6,078,786)................ 8,048 6,872
Cumulative translation adjustments................. (5,749) (349)
Earnings retained in the business.................. 287,286 282,371
Treasury shares, at cost........................... (33,410) (29,269)
--------- ---------
Total shareholders' equity......................... 259,744 263,194
--------- ---------
Total.............................................. $ 407,884 $ 407,772
========= =========
See notes to consolidated financial statements.
12
Consolidated Statement of Cash Flows
- ------------------------------------
(In thousands)
Year Ended December 31 1993 1992 1991
OPERATING ACTIVITIES
Income from continuing operations.................................... $ 10,555 $ 16,703 $ 22,424
Depreciation......................................................... 17,294 16,831 16,230
Pensions............................................................. 151 2,600 2,799
Deferred income taxes................................................ (82) 99 (2,019)
Receivables.......................................................... (6,118) 7,281 1,366
Inventories.......................................................... 6,330 11,937 (11,026)
Accounts payable and accrued liabilities............................. 5,442 (12,406) (1,766)
Other assets and liabilities......................................... (5,040) (2,470) (2,321)
Other--including currency exchange adjustments....................... (3,956) (3,682) (4,948)
-------- -------- --------
CASH FLOW FROM OPERATING ACTIVITIES.................................. 24,576 36,893 20,739
-------- -------- --------
INVESTING ACTIVITIES
Property additions................................................... (20,399) (22,762) (16,450)
Property disposals................................................... 3,420 1,189 757
Acquisitions and other investing..................................... (4,180) 443 (2,547)
-------- -------- --------
CASH FLOW FROM INVESTING ACTIVITIES.................................. (21,159) (21,130) (18,240)
-------- -------- --------
FINANCING ACTIVITIES
Additions to long-term debt.......................................... 1,472 6,883 11,082
Reductions of long-term debt......................................... (1,850) (1,227) (11,514)
Financing funds in escrow............................................ (2,922)
Cash dividends....................................................... (5,640) (5,608) (5,659)
Stock options and purchases of company's stock....................... (4,141) (8,310) (5,800)
Changes in notes payable and short-term debt......................... 399 (218) 1,168
-------- -------- --------
CASH FLOW FROM FINANCING ACTIVITIES.................................. (9,760) (11,402) (10,723)
-------- -------- --------
Effect of exchange rate changes on cash................................. (2,632) (3,311) (4,221)
-------- -------- --------
Increase (decrease) in cash and cash equivalents........................ (8,975) 1,050 (12,445)
Beginning cash and cash equivalents..................................... 55,409 54,359 66,804
-------- -------- --------
Ending cash and cash equivalents........................................ $ 46,434 $ 55,409 $ 54,359
======== ======== ========
Supplemental cash flow information:
Interest payments.................................................... $ 1,467 $ 1,504 $ 1,728
Income tax payments.................................................. 9,013 25,610 16,502
See notes to consolidated financial statements.
13
Note 1--Basis of Presentation
Significant accounting policies are stated in ITALICS at the applicable notes to
consolidated financial statements.
ALL SIGNIFICANT MAJORITY-OWNED COMPANIES ARE INCLUDED IN THE
CONSOLIDATED FINANCIAL STATEMENTS. INVESTMENTS IN WHICH THE COMPANY HAS AN
EQUITY INTEREST OF 20% TO 50% ARE CARRIED AT EQUITY IN NET ASSETS. INTERCOMPANY
TRANSACTIONS ARE ELIMINATED IN CONSOLIDATION.
SALES UNDER CONTRACTS ARE RECORDED AT FIXED OR ESTIMATED CONTRACT SALES
PRICES AS DELIVERIES ARE MADE. CONTRACTS REQUIRING PERFORMANCE OVER SEVERAL
PERIODS ARE ACCOUNTED FOR BY THE PERCENTAGE-OF-COMPLETION METHOD OF ACCOUNTING.
PROFITS EXPECTED TO BE REALIZED ARE BASED ON ESTIMATES OF TOTAL SALES AND COSTS
AT COMPLETION. THESE ESTIMATES ARE PERIODICALLY REVIEWED AND REVISED DURING THE
CONTRACT PERFORMANCE PERIOD. ADJUSTMENTS TO PROFITS ARE RECORDED IN THE PERIOD
IN WHICH ESTIMATES ARE REVISED; LOSSES ARE RECOGNIZED IN FULL AS THEY ARE
IDENTIFIED.
PROPERTY IS STATED AT COST. DEPRECIATION IS BASED ON ESTIMATED USEFUL
LIVES USING ACCELERATED AND STRAIGHT-LINE METHODS. MAINTENANCE AND REPAIRS ARE
CHARGED TO EXPENSE. RENEWALS AND BETTERMENTS WHICH SUBSTANTIALLY EXTEND THE
USEFUL LIFE OF PROPERTY ARE CAPITALIZED. ACCUMULATED ALLOWANCES FOR DEPRECIATION
OF BUILDINGS, MACHINERY AND EQUIPMENT RETIRED OR OTHERWISE DISPOSED OF ARE
ELIMINATED FROM THE ACCOUNTS UPON DISPOSITION. PROFITS OR LOSSES RESULTING FROM
SUCH DISPOSITIONS ARE INCLUDED IN INCOME.
CASH AND CASH EQUIVALENTS IN THE CONSOLIDATED STATEMENT OF CASH FLOWS
INCLUDES TEMPORARY INVESTMENTS THAT ARE READILY MARKETABLE AND HAVE MINIMAL RISK
AS TO CHANGE IN VALUE. CERTAIN SECURITIES HAVE MATURITIES IN EXCESS OF NINETY
DAYS; BUT, AS PART OF THE COMPANY'S CASH MANAGEMENT PROGRAM, MATURITIES ARE
SCHEDULED BASED ON EXPECTED CASH NEEDS FOR THE ENSUING TWELVE MONTHS.
EARNINGS PER SHARE ARE COMPUTED BASED UPON THE WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING DURING EACH YEAR. THE COMPUTATION RECOGNIZES
DIVIDENDS PAID ON PREFERRED STOCK BUT DOES NOT INCLUDE A NEGLIGIBLE DILUTIVE
EFFECT OF STOCK OPTIONS.
Note 2--Leases
The company leases warehouses, sales offices, manufacturing facilities and
equipment under agreements expiring at various dates through 2003, with renewal
options existing for varying periods. Rental expense for these leases charged to
income was $6,438,000 in 1993, $6,500,000 in 1992, and $5,998,000 in 1991.
Future minimum rental commitments under noncancelable leases are not
significant.
Note 3--Research and Development Expense
RESEARCH AND DEVELOPMENT COSTS, CHARGED AGAINST INCOME AS INCURRED, were
$21,000,000 in 1993, $20,938,000 in 1992, and $19,575,000 in 1991.
Note 4--Other Income
Other income is summarized as follows:
(In thousands)
----------------------
1993 1992 1991
------ ------ ------
Interest............................. $3,732 $6,857 $6,483
Commissions, royalties
and product services.............. 1,335 897 1,233
Dispositions of assets............... 127 435 308
Other................................ 691 1,566 862
------ ------ ------
Total................................ 5,885 9,755 8,886
------ ------ ------
Note 5--Stock Plans
The company's Management Share Incentive Plan permits the granting of restricted
stock awards or stock options to eligible key employees through December 1997.
The 1990 Non-Employee Directors' Stock Option Plan provides for annual grants of
stock options to eligible directors. As of December 31, 1993, 356,333 shares
were reserved for future grants pursuant to these Plans.
Shares of common stock, in the form of restricted stock bonus, have been
given to employees without payment to the company in consideration of services
to be performed in ensuing five-year periods. So long as certain restrictions
apply, these shares may not be sold and may be subject to forfeiture under
certain circumstances. THE EXPENSE TO THE COMPANY IS MEASURED BY THE MARKET
VALUE OF THE SHARES WHEN AWARDED AND IS AMORTIZED BY CHARGES TO OPERATIONS OVER
THE PERIOD THAT THE EMPLOYEE PROVIDES THE SERVICE. The expense charged to
operations was $371,000 in 1993, $318,000 in 1992, and $350,000 in 1991. A
summary of the restricted stock bonus awards is as follows:
Shares of
Common Stock
------------
As of December 31, 1993:
Awards............................. 113,103
Restrictions lapsed................ 77,531
Restrictions lapsing in:
1994 and 1995...................... 8,386
1996, 1997 and 1998................ 27,186
Stock options of 28,920 shares for key employees and 3,600 shares for
non-employee directors were outstanding at December 31, 1993. These options may
be exercised in whole or in part at various dates through December 18, 2001 at
option prices equivalent to or higher than the market values at date of grant.
Changes in stock options outstanding follow:
Shares Price Per Share
------- ---------------
December 31, 1990.............. 25,220 $27.00 to 61.33
Granted........................ 16,500 44.38 to 55.00
------
December 31, 1991.............. 41,720 27.00 to 61.33
Granted........................ 1,400 44.00
Exercised...................... (4,000) 29.70
Forfeited...................... (400) 44.00 to 55.00
------
December 31, 1992.............. 38,720 27.00 to 61.33
Granted........................ 1,400 47.13
Forfeited...................... (7,600) 55.75
------
December 31, 1993.............. 32,520 27.00 to 61.33
------
14
Note 6--Business Segments and International Operations
The company is primarily engaged in the manufacture and sale of safety and
health equipment. Principal products include respiratory protective equipment,
head protection, eye and face protection, hearing protectors, safety clothing,
industrial emergency care products, mining safety equipment, monitoring
instruments and heart pacemaker power cells. These safety and health products
account for more than 90% of revenues, operating profits and assets. Other
products which do not fall within the safety and health equipment segment of the
company's business include boron-based and other specialty chemicals.
Information about the company's continuing operations in different
geographic areas is summarized as follows:
(In thousands)
---------------------------------
1993 1992 1991
---- ---- ----
NET SALES AND REVENUES
U.S. operations........................................................ $254,823 $307,535 $297,286
European operations.................................................... 114,169 138,006 141,759
Other non-U.S. operations.............................................. 61,969 59,612 62,731
-------- -------- --------
NET SALES AND REVENUES................................................. 430,961 505,153 501,776
-------- -------- --------
INTERCOMPANY TRANSFERS
U.S. operations........................................................ 17,937 18,982 18,628
European operations.................................................... 12,886 16,556 15,653
Other non-U.S. operations.............................................. 550 330 288
-------- -------- --------
INTERCOMPANY TRANSFERS................................................. 31,373 35,868 34,569
-------- -------- --------
OPERATING PROFIT AND INCOME BEFORE INCOME TAXES
U.S. operations........................................................ 13,183 21,203 14,594
European operations.................................................... (1,345) 3,965 13,849
Other non-U.S. operations.............................................. 6,036 6,697 6,857
Eliminations........................................................... 922 (1,280) 816
-------- -------- --------
OPERATING PROFIT....................................................... 18,796 30,585 36,116
Interest expense....................................................... (1,713) (1,536) (1,739)
Foreign currency losses................................................ (3,201) 5,507) (2,456)
Corporate income/(expense)--net........................................ 4,359 4,268 6,349
-------- -------- --------
INCOME BEFORE INCOME TAXES............................................. 18,241 27,810 38,270
-------- -------- --------
IDENTIFIABLE ASSETS AND TOTAL ASSETS
U.S. operations........................................................ 234,650 220,441 226,143
European operations.................................................... 96,064 102,160 107,455
Other non-U.S. operations.............................................. 33,705 36,254 35,020
Eliminations........................................................... (12,657) (15,199) (13,010)
-------- -------- --------
IDENTIFIABLE ASSETS.................................................... 351,762 343,656 355,608
Corporate assets....................................................... 48,947 58,024 58,651
Discontinued operations................................................ 7,175 6,092 16,610
-------- -------- --------
TOTAL ASSETS........................................................... 407,884 407,772 430,869
-------- -------- --------
NET ASSETS OF NON-U.S. OPERATIONS (1).................................... 82,273 89,383 106,164
-------- -------- --------
NET INCOME OF NON-U.S. OPERATIONS........................................ 2,666 4,046 12,954
-------- -------- --------
(1) See Note 17 to consolidated financial statements for effects of currency
translation adjustments.
Transfers between geographic areas are stated at established
intercompany selling prices. Operating profit is total revenues less operating
expenses. Interest income and expense, equity in unconsolidated affiliates,
foreign currency gains and losses, and income taxes have not been included in
computing operating profit. Corporate assets not included in identifiable assets
are principally cash and investments.
Sales by U.S. operations to U.S. government agencies were $43,234,000 in
1993, $99,991,000 in 1992, and $93,034,000 in 1991.
Note 7--Discontinued Operations
In 1992 the company decided to discontinue the operations of Transfer-
Metallisierte Produkte GmbH (TMP), a joint venture in Germany to produce
metallized paper. Accordingly, the operating losses of TMP, adjusted for the
after-tax effects of intercompany transactions, have been reported separately in
the consolidated statement of income. Operating activities ceased during 1993.
The company is in the process of disposing of the assets and settling its
liabilities. After recognizing the accumulated operating losses of TMP included
in consolidation, the company estimates a loss on disposal, including provision
for operating losses during the phase-out period, of $11,550,000 which will be
fully offset by tax benefits.
15
Note 8--Income Taxes
EFFECTIVE AS OF JANUARY 1, 1992, THE COMPANY ADOPTED STATEMENT OF FINANCIAL
ACCOUNTING STANDARDS NO. 109-ACCOUNTING FOR INCOME TAXES. AS A RESULT OF THIS
ACCOUNTING CHANGE, DEFERRED TAX BALANCES ARE STATED AT TAX RATES EXPECTED TO BE
IN EFFECT WHEN TAXES ARE ACTUALLY PAID OR RECOVERED. THE CUMULATIVE EFFECT OF
THIS CHANGE WAS A CREDIT TO INCOME OF $2,148,000 IN 1992. NO PROVISION IS MADE
FOR UNDISTRIBUTED EARNINGS OF INTERNATIONAL COMPANIES SINCE LITTLE OR NO TAX
WOULD RESULT UNDER APPLICABLE EXISTING STATUTES OR BECAUSE MANAGEMENT INTENDS
THAT THESE EARNINGS BE PERMANENTLY REINVESTED FOR WORKING CAPITAL AND CAPITAL
EXPENDITURE REQUIREMENTS.
The U.S. and non-U.S. components of income from continuing operations
before income taxes, and provisions for income taxes are summarized as follows:
(In thousands)
----------------------------
1993 1992 1991
-------- -------- --------
INCOME BEFORE INCOME TAXES
U.S. income.......................................................... $ 16,304 $ 32,256 $17,794
Non-U.S. income...................................................... 6,055 12,592 23,861
Currency translations (losses)....................................... (3,081) (4,478) (2,432)
Eliminations......................................................... (1,037) (12,560) (953)
-------- -------- -------
INCOME BEFORE INCOME TAXES........................................... 18,241 27,810 38,270
-------- -------- -------
PROVISIONS FOR INCOME TAXES
Current
Federal........................................................... 4,427 6,422 6,074
State............................................................. 1,122 1,237 1,867
Non-U.S........................................................... 2,219 3,349 9,924
-------- -------- -------
Total current provision........................................... 7,768 11,008 17,865
-------- -------- -------
Deferred
Federal........................................................... 351 1,187 (658)
State............................................................. (2) 378 (197)
Non-U.S........................................................... (431) (1,466) (1,164)
-------- -------- -------
Total deferred provision.......................................... (82) 99 (2,019)
-------- -------- -------
PROVISIONS FOR INCOME TAXES.......................................... 7,686 11,107 15,846
-------- -------- -------
The components of the net deferred tax liability are as follows:
1993 1992
-------- --------
Deferred tax assets:
Postretirement benefits........................................... 5,792 5,540
Inventory reserves and unrealized profits......................... 5,027 4,441
Vacation allowances............................................... 2,059 1,925
Postemployment benefits........................................... 1,630 1,560
Liability insurance............................................... 1,749 1,524
Loss carryforwards................................................ 6,370 8,437
Other............................................................. 1,248 985
-------- --------
Total deferred tax assets......................................... 23,875 24,412
-------- --------
Deferred tax (liability)--depreciation............................... (25,065) (25,662)
-------- --------
Net deferred tax (liability)......................................... (1,190) (1,250)
-------- --------
The following is a reconciliation of income taxes calculated at the U.S.
Federal income tax rate (35% in 1993, 34% in 1992 and 1991) to the provision for
income taxes for continuing operations:
1993 1992 1991
------ ------- -------
Provision for income taxes at statutory rate.............. 6,384 9,455 13,012
State income taxes........................................ 728 1,066 1,102
Currency translation...................................... 1,078 1,523 827
Research tax credits...................................... (50) (50) (150)
Non-U.S. taxes............................................ (817) (1,321) 994
Other--net................................................ 363 434 61
----- ------ ------
Provision for income taxes................................ 7,686 11,107 15,846
----- ------ ------
Undistributed earnings of international companies for which U.S. income
taxes have not been provided were $55,995,000 at December 31, 1993.
16
Note 9--Capital Stock
The authorized capital of the company consists of:
. Common stock, no par value--20,000,000 shares
. Second cumulative preferred voting stock, $10 par value--1,000,000 shares
. 4 1/2% cumulative preferred stock, $50 par value--100,000 shares
Common stock activity is summarized as follows:
(In thousands)
-----------------
Shares Shares In Common Treasury
Issued Treasury Stock Cost
--------- --------- ------ ---------
Balances January 1, 1991................ 6,682,317 284,862 $6,754 $(13,576)
Purchased for treasury.................. 121,482 (5,800)
--------- ------- ------ --------
Balances December 31, 1991.............. 6,682,317 406,344 6,754 (19,376)
Stock options exercised................. 4,000 118
Purchased for treasury.................. 201,187 (8,403)
--------- ------- ------ --------
Balances December 31, 1992.............. 6,686,317 607,531 6,872 (27,779)
Management Share Incentive Plan issues.. 27,186 1,176
Purchased for treasury.................. 94,344 (4,099)
--------- ------- ------ --------
Balances December 31, 1993.............. 6,713,503 701,875 8,048 (31,878)
--------- ------- ------ --------
Second cumulative preferred voting stock--none has been issued.
As to the 4 1/2% cumulative preferred stock, 71,373 shares have been issued
(none during the three years ended December 31, 1993), while the amounts held
in treasury are as follows:
December 31 Shares Cost (in thousands)
- ------------------------ ------ -------------------
1991 45,164 $(1,465)
1992 46,030 (1,490)
1993 47,268 (1,532)
Note 10--Inventories
THE U.S. INVENTORIES ARE VALUED ON THE LAST-IN, FIRST-OUT (LIFO) COST METHOD.
OTHER INVENTORIES ARE VALUED AT THE LOWER OF COST, USING AVERAGE OR CURRENT
STANDARD COSTS WHICH APPROXIMATE ACTUAL COSTS ON A FIRST-IN, FIRST-OUT (FIFO)
BASIS, OR MARKET, DETERMINED BY REPLACEMENT COST OR NET REALIZABLE VALUE.
Inventories are summarized as follows:
(In thousands)
-------------------------
1993 1992 1991
------- ------- -------
Finished products..................... $30,409 $33,643 $32,592
Work in process....................... 20,001 20,952 27,333
Raw materials and supplies............ 31,044 33,189 39,796
------- ------- -------
Total inventories..................... 81,454 87,784 99,721
------- ------- -------
Excess of FIFO costs
over LIFO costs..................... 63,033 62,564 65,003
------- ------- -------
Inventories stated on the LIFO basis represent 58%, 52%, and 56% of the
total inventories at December 31, 1993, 1992, and 1991, respectively.
Note 11--Long-Term Debt
(In thousands)
-----------------
1993 1992
------- -------
U.S.
Industrial development debt issues
payable through 2022, 3.5%........... $13,650 $13,650
Other, 4.8% to 5%...................... 950 557
International companies
Various notes payable through 1998,
3 1/2% to 12.4% ($15,781 secured
by pledge of assets located abroad).. 16,382 18,177
------- -------
Total..................................... 30,982 32,384
Amounts due within one year............... 3,506 3,516
------- -------
Long-term debt............................ 27,476 28,868
------- -------
Approximate maturities of these obligations over the next five years are
$3,506,000 in 1994, $8,915,000 in 1995, $4,092,000 in 1996, $1,455,000 in 1997,
and $995,000 in 1998. Some U.S. loan agreements contain covenants to maintain
specified levels of shareholders' equity.
Note 12--Short-Term Debt
Short-term bank lines of credit amounted to $11,476,000 of which $8,842,000 was
unused at December 31, 1993. Generally, these short-term lines of credit are
renewable annually and there are no significant commitment fees or compensating
balance requirements. Short-term borrowings with banks, which exclude the
current portion of long-term debt, were $2,722,000 and $2,935,000 at December
31, 1993 and 1992, respectively. The average month-end balance of total short-
term borrowings during 1993 was $2,820,000 while the maximum month-end
balance of $3,145,000 occurred at January 31, 1993. The average interest
rate during 1993 was approximately 14% based upon total short-term interest
expense divided by the average month-end balance outstanding, and 12% at
year-end. This average interest rate is affected by borrowings in certain
countries where local inflation has resulted in relatively high interest rates.
Note 13--Contingencies
A portion of the company's business is with departments and agencies of the
United States government. Contracts related to this business are subject to
profit limitations and terminations. The company also has certain contingent
liabilities with respect to commitments and litigation. In the opinion of
management, these contingencies will not result in any significant losses to the
company.
17
Note 14--Retirement Plans
Substantially all employees are covered by non-contributory pension plans.
Various U.S. employees also participate in a contributory retirement savings
plan wherein employees may contribute from 1% to 8% of their compensation to a
trust fund, to which the company contributes an amount equal to 50% of the
employees' contributions. The company's expense for these plans was $4,408,000
in 1993, $7,572,000 in 1992, and $6,433,000 in 1991.
THE NON-CONTRIBUTORY PENSION PLANS ARE ACCOUNTED FOR IN ACCORDANCE WITH
STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 87 WHICH REQUIRES USE OF THE
PROJECTED UNIT CREDIT COST METHOD TO DETERMINE THE PROJECTED BENEFIT OBLIGATION
AND PLAN COST. THE PRINCIPAL U.S. PLAN IS FUNDED IN COMPLIANCE WITH THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT (ERISA). IT IS THE GENERAL POLICY TO FUND CURRENT
COSTS FOR THE INTERNATIONAL PLANS EXCEPT IN GERMANY, WHERE IT IS COMMON PRACTICE
AND PERMISSIBLE UNDER TAX LAWS TO ACCRUE BOOK RESERVES. Non-contributory plan
benefits are generally based on years of service and employees' compensation
during the last years of employment. Benefits are paid from funds previously
provided to trustees or are paid by the company and charged to the book
reserves.
Information pertaining to the non-contributory defined benefit plans is
provided in the following tables.
COST FOR DEFINED BENEFITS PLANS
(In thousands)
- -------------------------------------------------------
U.S. Plans International Plans
---------------------------- ---------------------------
1993 1992 1991 1993 1992 1991
---- ---- ---- ---- ---- ----
Service cost--benefits earned during the period..... $ 2,894 $ 2,646 $ 2,334 $ 1,361 $1,707 $ 1,383
Interest cost on projected benefit obligation....... 9,558 9,903 9,032 2,910 2,927 2,682
Actual (return)/loss on plan assets................ (22,879) (15,509) (37,599) (2,219) (898) (1,102)
Net amortization and deferral....................... 9,937 3,087 25,975 1,320 (55) 62
Special pension benefit adjustments associated
with early retirement programs and restructuring.. (728) (643) (1,655)
-------- -------- -------- ------- ------ -------
Pension expense (income)............................ (1,218) (516) (258) 1,717 3,681 3,025
-------- -------- -------- ------- ------ -------
FUNDING STATUS AND PROJECTED BENEFIT OBLIGATION RECONCILIATION
December 31 (In thousands)
- -------------------------------------------------------------------
U.S. Plans International Plans
---------------------------- ---------------------------
1993 1992 1991 1993 1992 1991
---- ---- ---- ---- ---- ----
Actuarial present value of benefit obligations:
Accumulated benefit obligation
Vested........................................... 108,439 97,767 90,618 22,157 21,993 19,982
Nonvested........................................ 1,917 300 275 980 762 1,112
------- ------- ------- ------- ------ -------
Total......................................... 110,356 98,067 90,893 23,137 22,755 21,094
------- ------- ------- ------- ------ -------
Plan assets at fair value, primarily listed
stocks and bonds................................... 179,832 164,832 161,857 16,071 13,591 14,705
Projected benefit obligation.......................... 136,034 118,084 111,939 35,621 35,881 34,851
------- ------- ------- ------- ------ -------
Plan assets in excess of (less than)
projected benefit obligation........................ 43,798 46,748 49,918 (19,550) (22,290) (20,146)
------- ------- ------- ------- ------ -------
The excess (less than) consists of:
Unamortized portion of transition gain (loss), being
recognized over future years....................... 9,231 10,173 11,546 (886) (1,361) (1,425)
Unrecognized net gain (loss) from past experience
different from that assumed....................... 37,331 41,066 44,124 1,836 136 (610)
Unrecognized prior service cost...................... (3,380) (3,925) (4,427) (579) (656) (840)
Minimum liability for unfunded plans................. 1,097 1,369 1,369
Accrued pension cost included in the
consolidated balance sheet........................ (481) (1,935) (2,694) (19,921) (20,409) (17,271)
------- ------- ------- ------- ------- -------
Total.......................................... 43,798 46,748 49,918 (19,550) (22,290) (20,146)
------- ------- ------- ------- ------- -------
Assumed long-term rates of return on assets............ 9% 9% 9% 7-9% 8-9 1/2% 8-11%
Assumed discount rates for future benefits............. 7 1/2 8 1/2 8 1/2 5 3/4-9 7 3/4-9 1/2 8-11
Assumed long-term rates for compensation increases..... 5 5 5 3-6 6-6 1/2 6-8
Note 15--Quarterly Financial Information (Unaudited)
(In thousands, except earnings per share)
1993 1992
---------------------------------------------- ----------------------------------------------------
Quarters Quarters
---------------------------------------------- ----------------------------------------------------
1st 2nd 3rd 4th Year 1st 2nd 3rd 4th Year
-------- -------- -------- -------- -------- --------- --------- --------- --------- ---------
Continuing operations:
Net sales............... $104,863 $107,840 $103,899 $112,618 $429,220 $127,788 $128,559 $125,663 $120,356 $502,366
Gross profit............ 37,773 40,269 35,823 42,005 155,870 43,452 44,949 41,900 44,510 174,811
Income.................. 2,516 2,963 1,411 3,665 10,555 4,441 6,182 3,595 2,485 16,703
Income per share........ .41 .48 .24 .60 1.73 .71 .98 .58 .40 2.67
Discontinued operations.... (883) (1,074) (1,278) (1,832) (5,067)
Cumulative effect,
accounting changes...... (8,964) (8,964)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net income................. 2,516 2,963 1,411 3,665 10,555 (5,406) 5,108 2,317 653 2,672
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Earnings per share......... .41 .48 .24 .60 1.73 (.88) .82 .37 .11 .42
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
18
Note 16--Postretirement Benefits
The company provides certain health care benefits and limited life insurance for
retired employees and their eligible dependents. STATEMENT OF FINANCIAL
ACCOUNTING STANDARDS (SFAS) NO. 106-"EMPLOYERS' ACCOUNTING FOR POSTRETIREMENT
BENEFITS OTHER THAN PENSIONS" WAS IMPLEMENTED AS OF JANUARY 1, 1992, USING THE
IMMEDIATE RECOGNITION TRANSITION OPTION. SFAS NO. 106 REQUIRES RECOGNITION OF
RETIREE HEALTH AND LIFE INSURANCE BENEFITS DURING THE EMPLOYEES' SERVICE WITH
THE COMPANY.
The accumulated postretirement benefit of $14,212,000 as of January 1,
1992 was charged to 1992 earnings. Further information about these benefits is
provided in the following tables:
COST FOR BENEFITS
(In thousands)
- --------------------------------------------------------------------------------
1993 1992
---- ----
Service cost--benefits earned during the period............... $ 447 $ 385
Interest cost on projected benefit obligation................. 1,192 1,201
------ ------
1,639 1,586
------ ------
FUNDED STATUS AND ACCUMULATED POSTRETIREMENT BENEFIT OBLIGATION RECONCILIATION
December 31 (In thousands)
- --------------------------
1993 1992 1991
---- ---- ----
Accumulated postretirement benefit obligation:
Active employees........................................... 3,582 2,913 3,467
Other active participants.................................. 7,647 5,779 5,241
------ ------ ------
11,229 8,692 8,708
------ ------ ------
Retirees................................................... 5,615 5,895 5,504
Total................................................... 16,844 14,587 14,212
Unamortized (loss)............................................ (2,565) (275)
------ ------
Accrued postretirement benefit cost included
in consolidated balance sheet.............................. 14,279 14,312
------ ------
Assumed discount rates for future benefits.................... 7 1/2% 8 1/2% 8 1/2%
Annual rates of increase in the costs of covered health care benefits
assumed for 1993 were 10%, decreasing gradually to 5% for the year 1998 and
thereafter. The health care cost trend rate assumption has a significant effect
on the amounts reported; a one-percentage-point increase in each year would
increase the accumulated postretirement benefit obligation by $1,326,000 and
increase the current service and interest costs for the year by $270,000.
Note 17--Foreign Currency Translation
AN APPROPRIATE FUNCTIONAL CURRENCY IS DETERMINED FOR EACH ENTITY. THE FINANCIAL
STATEMENTS OF COMPANIES FOR WHICH THE UNITED STATES DOLLAR IS DETERMINED TO BE
THE FUNCTIONAL CURRENCY ARE TRANSLATED USING APPROPRIATE CURRENT AND HISTORIC
EXCHANGE RATES; ADJUSTMENTS RELATED THERETO ARE INCLUDED IN INCOME FOR THE
CURRENT PERIOD. THE FINANCIAL STATEMENTS OF ALL OTHER COMPANIES ARE TRANSLATED
FROM THEIR FUNCTIONAL CURRENCY INTO UNITED STATES DOLLARS USING CURRENT EXCHANGE
RATES; THE RESULTANT TRANSLATION ADJUSTMENTS ARE NOT INCLUDED IN INCOME BUT ARE
ACCUMULATED IN A SEPARATE EQUITY ACCOUNT. TRANSACTION GAINS AND LOSSES ARE
RECOGNIZED IN INCOME FOR THE CURRENT PERIOD.
Foreign currency effects are summarized as follows:
(In thousands)
----------------------
1993 1992 1991
---- ---- ----
Currency (gains)/losses charged
to income arising from:
Translation--Latin American
companies....................... $3,080 $4,478 $2,432
Transactions...................... 121 1,029 24
------ ------ ------
Total............................. 3,201 5,507 2,456
------ ------ ------
Currency translation (gains)/losses
charged directly to equity
adjustment account................ 5,400 4,736 7,527
------ ------ ------
Note 18--Accounting Changes
Effective January 1, 1992, the company adopted three new Statements of Financial
Accounting Standards (SFAS). The after tax effect of these changes was a charge
of $8,964,000 against 1992 net income. Aside from this cumulative effect as of
January 1, 1992, adoption of these Standards did not materially affect 1992
financial results. SFAS No. 106--"Employers' Accounting for Postretirement
Benefits Other Than Pensions" was implemented using the immediate recognition
transition option, resulting in a charge of $8,672,000, after recognizing
related deferred taxes. SFAS No. 112--"Employers' Accounting for Postemployment
Benefits" pertains to benefits, such as workers' compensation and other
disability expenses, for inactive employees before retirement. The after tax
costs recognized for implementing this Standard were $2,440,000 (pretax
$4,000,000). SFAS No. 109--"Accounting for Income Taxes" requires that deferred
tax balances are stated at tax rates expected to be in effect when taxes are
actually paid or recovered, whereas deferred taxes were previously provided at
tax rates prevailing during the periods when timing differences between
financial income and taxable income occurred. Adjustment of the previously
provided deferred taxes resulted in a net credit to income of $2,148,000.
19
Five-Year Summary of Selected Financial Data
- --------------------------------------------
SUMMARY OF OPERATIONS 1993 1992 1991 1990 1989
(In thousands, except as noted)
Net sales $429,220 $502,366 $499,240 $473,933 $414,963
Other income 5,885 9,755 8,886 8,807 11,675
Cost of products sold 273,350 327,555 324,448 287,345 250,155
Selling, general and administrative 121,529 130,182 124,983 121,137 110,110
Depreciation 17,294 16,831 16,230 14,904 13,755
Interest expense 1,713 1,536 1,739 1,926 2,316
Foreign currency losses 3,201 5,507 2,456 4,238 4,900
Unusual items (223) 2,700 700 110
Taxes on income 7,686 11,107 15,846 21,583 17,516
Income from continuing operations 10,555 16,703 22,424 30,907 27,776
Per common share (in dollars)/(1)/ 1.73 2.67 3.52 4.77 4.23
Discontinued operations (5,067) (3,773) (1,703) (269)
Cumulative effect to January 1, 1992 of
changes in accounting principles (8,964)
Net income 10,555 2,672 18,651 29,204 27,507
Per common share (in dollars)/(1)/ 1.73 .42 2.92 4.50 4.19
Cash dividends 5,640 5,608 5,659 5,372 4,837
Per common share (in dollars) .92 .89 .88 .82 .73
Weighted average number of common shares outstanding 6,069 6,225 6,353 6,471 6,545
YEAR-END POSITION
Working capital $164,199 $177,287 $184,378 $185,371 $161,839
Working capital ratio 3.7 4.2 3.7 3.7 3.9
Property, at cost 306,691 305,908 292,338 285,961 256,467
Total assets 407,884 407,772 430,869 436,118 384,156
Long-term debt 27,476 28,868 23,009 24,606 22,544
Common shareholders' equity 258,539 261,927 277,866 278,199 247,957
Equity per common share (in dollars) 43.00 43.09 44.27 43.49 38.10
(1) Earnings per common share are calculated after deducting dividends on
preferred stock and are based on the weighted average number of shares
outstanding during each year.
20