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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
Commission file number 1-7272
KERR GROUP, INC.
----------------
(Exact name of Registrant as specified in its charter)
Delaware 95-0898810
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1840 Century Park East, Los Angeles, California 90067
- - -----------------------------------------------------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number,
including area code: (310) 556-2200
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
- - ------------------- -------------------
Common Stock New York Stock Exchange
$1.70 Class B Cumulative Convertible
Preferred Stock, Series D New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No.___.
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X].
The aggregate market value of the voting stock held by non-affiliates of the
Registrant, as of March 8, 1994, was $32,239,000.
The number of shares of the Registrant's Common Stock, $.50 par value,
outstanding as of March 8, 1994, was 3,666,695.
DOCUMENTS INCORPORATED BY REFERENCE
Part(s) Into
Document Which Incorporated
-------- ------------------
(1) Annual Report to Stockholders Part I; Part II;
for the fiscal year ended Part IV
December 31, 1993. With the
exception of the pages of the
Annual Report to Stockholders
specifically incorporated by
reference herein, the Annual
Report to Stockholders is not
deemed to be filed as a part
of this Form 10-K.
(2) Proxy Statement to be used in Part III
connection with the Annual
Meeting of Stockholders to be
held on April 26, 1994. With the
exception of the pages of the
Proxy Statement specifically
incorporated by reference herein,
the Proxy Statement is not deemed
to be filed as a part of this
Form 10-K.
(ii)
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KERR GROUP, INC.
Form 10-K Annual Report
For The Fiscal Year Ended December 31, 1993
PART I
ITEM 1. BUSINESS
1. General
Kerr Group, Inc. (the "Registrant"), a Delaware corporation
which was founded in 1903, currently operates in two business segments: the
Plastic Products segment and the Consumer Products segment.
Operations in the Plastic Products segment include the
manufacture and sale of a variety of plastic products, including child-
resistant closures, tamper-evident closures, prescription packaging products,
jars, other closures and containers and the sale of glass prescription products
(the "Plastic Products Business"). Operations in the Consumer Products segment
include the manufacture and sale of caps and lids and the sale of glass jars
and a line of pickling spice and pectin products for home canning (the "Home
Canning Supplies Business"), which together with the sale of other related
products, including iced tea tumblers and beverage mugs, constitutes the
"Consumer Products Business." The Plastic Products Business and the Consumer
Products Business are referred to herein as "Continuing Businesses".
a. Principal Products and Markets; Sales
and Customers
The Plastic Products segment accounted for approximately 77%
of the Registrant's total net sales in 1993. Plastic closures of the Plastic
Products Segment are sold to customers in the pharmaceutical, food, distilled
spirits, toiletries and cosmetics and household chemical industries. Plastic
and glass prescription products are sold to drug wholesalers, drug chains and
independent pharmacists. Plastic bottles and jars are sold to customers in the
pharmaceutical and toiletries and cosmetics industries. Plastic products are
sold nationally, principally by the Registrant's sales force.
The Consumer Products Business accounted for approximately 23%
of the Registrant's total net sales in 1993. The Home Canning Supplies
Business represents substantially all
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of the Consumer Products Business. The Consumer Products Business sells its
products primarily through food brokers to grocery retailers, food wholesalers
and mass merchandisers.
No customer accounted for more than 10% of the Registrant's
net sales in 1993.
b. Competition
Competition in the markets in which the Plastic Products
Business operates is highly fragmented and the Registrant has a number of large
competitors with respect to its Plastic Products Business who compete for sales
on the basis of price, service and quality of product. The Registrant believes
that it is one of the three largest manufacturers of child-resistant plastic
closures. The Registrant has one major competitor in the prescription
products business, who has substantially larger market share than the
Registrant. The Registrant also believes it is the largest manufacturer of
plastic closures incorporating a tamper-evident feature for the liquor market
and that it is one of the leading suppliers of single and double walled jars to
the personal care and cosmetic markets.
The Registrant's one major competitor in the Home Canning
Supplies Business is Alltrista Corporation. The Registrant believes it has a
significant share of the market for home canning caps, lids and jars.
c. Backlog
The Registrant does not believe that recorded sales backlog is
a significant factor in its business.
d. Raw Materials and Supplies; Fuel and Energy Matters
The primary raw materials used by the Registrant's Plastic
Products Business are resins. The Registrant has historically been able to
obtain adequate supplies of these items from a number of sources. However,
since resins are derived from petroleum or fossil fuel, shortages of petroleum
or fossil fuel could affect the supply of resins. From time to time, the
Registrant has experienced increases in the cost of resins. To the extent that
the Registrant is unable to reflect such price increases in the price for
products manufactured by it, increases in the cost of resins could have a
significant impact on the
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results of the Registrant's operations. Currently, a majority of the sales of
Plastic Products are made pursuant to agreements that provide for increases in
the cost of resin to be passed on to the customer.
The Registrant purchases glass jars for its Home Canning
Business from a single supplier under a multi-year contract. The Registrant
believes that it could obtain adequate supplies of glass jars from alternate
sources at reasonable prices if its current supply was interrupted. In
addition to glass jars, the primary raw material used by the Registrant's Home
Canning Supplies Business in the manufacture of its caps and lids is tin-plate.
During 1993, the Registrant was able to obtain adequate supplies of these items
from a number of sources.
e. Product Development, Engineering, Patents and
Licensing
The Registrant carries on a product development and
engineering program with respect to its Plastic Products Business.
Expenditures for such programs during the years ended December 31, 1993, 1992
and 1991 were approximately $2,000,000, $1,400,000 and $1,300,000,
respectively.
Although the Registrant owns a number of United States
patents, including patents for its tamper-evident closures and certain of its
child-resistant closures, it is of the opinion that no one or combination of
these patents is of material importance to its business. The Registrant has
granted licenses on some of its patents, although the income from these sources
is not material.
f. Environmental Matters; Legislation
Several states have enacted recycling laws which require
consumers to recycle certain items including containers. These mandatory
recycling laws are not expected to have an adverse effect on the Registrant's
business.
The Registrant is subject to laws and regulations governing
the protection of the environment, disposal of waste, discharges into water and
emissions into the atmosphere. The Registrant's expenditures for environmental
control equipment in each of the last three years have not been material and
the standards required by such regulations have not significantly affected the
Registrant's operations.
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g. Employees
As of December 31, 1993, the Registrant had approximately
1,100 employees, of which approximately 280 were office, supervisory and sales
personnel.
h. Seasonality
The Registrant's sales and earnings are usually higher in the
second and third calendar quarters and lower in the first and fourth calendar
quarters. Most of the sales by the Home Canning Supplies Business occur in the
second and third calendar quarters. In addition, substantially all returns of
home canning supplies occur in the fourth calendar quarter of each year.
Because of the foregoing factors, the Registrant generally records a low level
of profitability in the first and fourth calendar quarters. Demand for home
canning supplies is adversely affected by poor crop growing conditions, such as
occurred in 1993.
The Registrant's Home Canning Supplies Business normally
manufactures its inventory of caps and lids in anticipation of expected orders,
and, consistent with practice followed in the industry, grants extended payment
terms to home canning customers and accepts the return of unsold home canning
merchandise in the fourth calendar quarter of each year.
i. Working Capital
In general, the working capital practices followed by the
Registrant are typical of the businesses in which it operates. The seasonal
nature of the Registrant's Home Canning Supplies Business requires periodic
short-term borrowing by the Registrant.
As of December 31, 1993, the Registrant had two unsecured
$6,000,000 lines of credit with two banks to provide for the seasonal working
capital needs of the Company. One of the lines of credit is committed through
October 28, 1994 with borrowings to bear interest at either the prime rate of
the lender or, alternatively, Eurodollar rate plus 2%. In addition, a facility
fee of 0.5% per annum is charged on the unused amount of the commitment. The
other line of credit is committed through September 30, 1994 with borrowings to
bear interest at the prime rate of the lender. A facility fee of 0.75% per
annum is charged on the total amount of this commitment. The lines of credit
provide the Registrant with a source of working capital which the
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Registrant believes will be sufficient to meet its anticipated needs.
2. The Discontinued Businesses
a. The Metal Crown Business
On December 11, 1992, the Registrant sold substantially all of
its assets (the "Sale of the Metal Crown Assets") relating to the manufacture
and sale of metal crowns for beer and beverage bottles (the "Metal Crown
Business") to Crown Cork & Seal Company, Inc. ("Crown Cork") pursuant to the
terms of an asset purchase agreement for approximately $7,200,000 in cash.
Included among the assets of the Metal Crown Business sold to Crown Cork were
essentially all of the assets of the Registrant's Arlington, Texas plant. The
Sale of the Metal Crown Assets was more fully described in the Registrant's
Current Report on Form 8-K dated December 11, 1992 filed with the Securities
and Exchange Commission.
As a result of the Sale of the Metal Crown Assets, the
Registrant no longer operates its Metal Crown Business.
b. The Commercial Glass Container Business
On February 28, 1992, the Registrant consummated the sale of
substantially all of its assets (the "Sale of the Glass Container Assets")
relating to the manufacture and sale of glass containers (the "Commercial Glass
Container Business") to Ball Corporation pursuant to the terms of an asset
purchase agreement for approximately $68,000,000 in cash. The Sale of the
Glass Container Assets was more fully described in the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1991 (the "1991
10-K").
As a result of the Sale of the Glass Container Assets, the
Registrant no longer operates its Commercial Glass Container Business.
3. Segment Information
The Registrant's 1993 Annual Report to Stockholders contains
on pages 29 and 30 additional financial information regarding each of the
Registrant's two industry segments for each of the last three fiscal years
required by Item 1 and such information is incorporated herein by reference.
The Registrant's 1993 Annual Report to Stockholders contains on
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pages 34 through 36 Management's Discussion and Analysis of Financial Condition
and Results of Operations and such information is incorporated herein by
reference.
ITEM 2. PROPERTIES
The Registrant's manufacturing activities with respect to its
Continuing Businesses are conducted at the five facilities described in the
following table.
Building Area
Location Purpose of Facility (square feet)
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Lancaster, Pennsylvania Plastic Closure and 490,000
Container Plant;
Warehouses
Chicago, Illinois Home Canning Cap and 397,000
Lid Plant; Warehouses
Santa Fe Springs, Plastic Jar and Closure 170,000
California Plant; Warehouse
Ahoskie, North Carolina Plastic Closure Plant; 153,000
Warehouse
Jackson, Tennessee Plastic Closure, Vial and 105,000
Bottle Plant; Warehouse
The Lancaster, Pennsylvania and Ahoskie, North Carolina
facilities are owned by the Registrant. The Chicago, Illinois; Jackson,
Tennessee and the Santa Fe Springs, California facilities are leased by the
Registrant.
The Registrant's principal executive offices are located at
1840 Century Park East, Los Angeles, California 90067, in approximately 26,000
square feet of leased space. In addition, the Registrant rents three area
sales offices and one warehouse.
During 1994, the Registrant will relocate its home canning cap
and lid manufacturing operations from Chicago, Illinois to a new, leased
168,000 square foot manufacturing
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facility in Jackson, Tennessee and permanently cease operations in its leased
facility in Chicago.
In the opinion of the Registrant's management, its
manufacturing facilities are suitable and adequate for the purposes for which
they are being used.
The Registrant owns land and buildings used in connection with
a former glass container manufacturing plant that are being held for sale. In
addition, pursuant to a sublease dated January 6, 1992, Fluidmaster, Inc., a
California corporation, subleases a 28,000 square foot manufacturing facility
located in Santa Fe Springs, California from a wholly-owned subsidiary of the
Registrant. Prior to 1992, the Registrant manufactured custom molded plastic
parts at this facility.
In 1993, the Registrant's plastic products manufacturing
facilities operated at approximately 83% of capacity, and the home canning cap
and lid manufacturing facility operated at approximately 76% of capacity.
ITEM 3. LEGAL PROCEEDINGS
As the Registrant reported in its Quarterly Report on Form
10-Q for the quarter ended June 30, 1990, in February 1986, the Registrant was
advised by the United States Environmental Protection Agency ("EPA") that
Phoenix Closures, Inc. ("Phoenix") was one of several companies which disposed
of wastes at the American Chemical Services ("ACS") site located near Griffith,
Indiana. The EPA indicated that the wastes were disposed of by Phoenix's
Chicago plant between 1955 and 1975. The Registrant has advised the EPA that
it did not lease the Chicago plant during the period from 1955 to 1975. The
Registrant has also advised Phoenix of its responsibilities with respect to
environmental matters, including the environmental matters at the ACS site,
under the lease relating to the Chicago plant.
As the Registrant reported in its Quarterly Report on Form
10-Q for the quarter ended June 30, 1990, in March 1986, the Registrant and
other parties were designated by the EPA as potentially responsible parties
("PRPs") responsible for the cleanup of certain hazardous wastes that have been
disposed of at the Wayne Waste Oil ("WWO") site located near Columbia City,
Indiana. In October 1986, the Registrant and other PRPs entered into a Consent
Order with the EPA which allowed the PRPs to
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complete a Remedial Investigation and Feasibility Study ("RI/FS") for the WWO
site. In March 1990, the EPA issued a Record of Decision ("ROD") for the site.
The ROD documents the EPA's cleanup plan for the site, which includes capping
the former municipal landfill, groundwater extraction and treatment, and soil
vapor extraction. On July 20, 1992, a Consent Decree between the EPA and the
PRPs at the site was entered in the United States District Court for the
Northern District of Indiana, captioned United States v. Active Products Corp.,
No. F91-00247. Based upon the Registrant's percentage share of the total
amount of wastes disposed of at the WWO site, the Registrant estimates its
share of the costs under the Consent Decree will be approximately $109,000. A
reserve has been established for such costs.
As the Registrant reported in its Quarterly Report on Form
10-Q for the quarter ended June 30, 1990, on April 12, 1990, the State of New
Jersey, Department of Environmental Protection and Energy ("NJDEPE"), filed a
lawsuit in the United States District Court for the District of New Jersey
against the Registrant, among others, entitled State of New Jersey, Department
of Environmental Protection v. Gloucester Environmental Management Services,
Inc., et al., No. 84-0152 (D.N.J.). The suit alleges that the Registrant was a
"generator" of hazardous wastes and other hazardous substances which were
disposed of at the Gloucester Environmental Management Services, Inc. ("GEMS")
facility in the Township of Gloucester. The suit seeks cleanup costs,
compensatory and treble damages, and a declaration that the Registrant and
others are responsible for NJDEPE's past and future response costs at the GEMS
site. On March 27, 1990, NJDEPE issued a Directive to the Registrant and other
parties pursuant to the New Jersey Spill Compensation and Control Act, N.J.S.A.
58:10-23.11 et seq. Pursuant to the Directive, the Registrant and other
parties have been ordered to undertake the second phase of remedial action at
the site, including the construction and operation of a groundwater treatment
system and operation of the remedial action performed in the first phase, and
to reimburse NJDEPE's alleged past and future response costs. The estimated
cost of second phase remedial action related to the GEMS site is approximately
$20 million. The amount that the NJDEPE is seeking as reimbursement for past
costs and damages is approximately $10 million. Notwithstanding the issuance
of the Directive by the NJDEPE, the Registrant believes that it has no material
liability with respect to the GEMS site because the only reason it has been
named as a defendant (there are over 550 named defendants) is that a
transporter that was used by the Registrant
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is known to have disposed of waste at the site. However, there is no evidence
that any waste disposed of at the site by such transporter was waste of the
Registrant and the Registrant has a motion for summary judgment pending in
which it seeks dismissal from the case on these grounds. If such motion is
granted, the Registrant would have a good faith basis to not comply with the
Directive. The Registrant does not believe that any of its waste was disposed
of at the site. One of the Registrant's insurance carriers has agreed to
defend the current lawsuit and has funded the Registrant's participation in
settlement efforts, which may result in the Registrant's dismissal from the
lawsuit for a payment of approximately $100,000. Participation in the
settlement will not be considered an admission of liability for the disposal of
waste at the site. A reserve has been established for such costs.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
EXECUTIVE OFFICERS OF THE REGISTRANT
Set forth below are the names, ages, positions and offices
held, and a brief account of the business experience during the past five years
of each executive officer of the Registrant.
Positions Held With
Registrant and Periods
Name and Age During Which Held
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Roger W. Norian (50) Chairman, since 1983;
President and Chief Executive
Officer, since 1980
Norman N. Broadhurst (47) Senior Vice President,
President, Consumer Products
Division, since September 1992;
Senior Vice President, General Manager,
Consumer Products Division, since
November 1988
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Robert S. Reeves (64) Senior Vice President, Sales and Marketing,
Plastic Products Division, since February 1992;
Senior Vice President, General Manager,
Commercial Glass Container Division, since 1985
D. Gordon Strickland (47) Senior Vice President, Finance and
Chief Financial Officer, since 1986
J. Stephen Grassbaugh (40) Vice President, Controller, since 1988
John F. Thelen (45) Vice President, Employee Relations, since 1993
Business Experience
Roger W. Norian has served in an executive capacity with the
Registrant for more than the past five years.
Norman N. Broadhurst joined the Registrant in 1988 as Senior
Vice President, General Manager, Consumer Products. Prior to that time he was
President and Chief Operating Officer of the Famous Amos Chocolate Chip Cookie
Corporation and Vice President, Marketing, Beatrice Companies, Inc.
Robert S. Reeves has served in an executive capacity with the
Registrant for more than the past five years.
D. Gordon Strickland has served in an executive capacity with
the Registrant for more than the past five years.
J. Stephen Grassbaugh has served in an executive capacity with
the Registrant for more than the past five years.
John F. Thelen joined the Registrant in 1993 as Vice
President, Employee Relations. Prior to that time he was Vice President,
Compensation, Benefits and Human Resource Information Systems of Mattel, Inc.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
The Registrant's Annual Report to Stockholders for the year
ended December 31, 1993, contains on page 12 the information required by Item 5
of Form 10-K and such information is incorporated herein by this reference.
ITEM 6. SELECTED FINANCIAL DATA
The Registrant's Annual Report to Stockholders for the fiscal
year ended December 31, 1993, contains on pages 32 and 33 the information
required by Item 6 of Form 10-K and such information is incorporated herein by
this reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Registrant's Annual Report to Stockholders for the fiscal
year ended December 31, 1993, contains on pages 34 through 36 the information
required by Item 7 of Form 10-K and such information is incorporated herein by
this reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Registrant's Annual Report to Stockholders for the fiscal
year ended December 31, 1993, contains on pages 12 through 31 the information
required by Item 8 of Form 10-K and such information is incorporated herein by
this reference.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Certain of the information required by Item 10 of Form 10-K is
included in a separate item captioned "Executive Officers of the Registrant" in
Part I of this Form 10-K. With respect to reports required to be filed
pursuant to Section 16(a) of the Securities Exchange Act of 1934 regarding the
Registrant's common stock, par value $.50 per share, the Registrant believes
that, based solely on a review by the Registrant of copies of such reports
received by it, during its fiscal year 1993, all filing requirements of Section
16(a) with respect to its common stock were complied with.
The Registrant's Proxy Statement to be used in connection with
the Annual Meeting of Stockholders to be held on April 26, 1994 contains on
pages 2 through 6 the remaining information required by Item 10 of Form 10-K
and such information is incorporated herein by this reference.
ITEM 11. EXECUTIVE COMPENSATION
The Registrant's Proxy Statement to be used in connection with
the Annual Meeting of Stockholders to be held on April 26, 1994 contains on
pages 7 through 10 the information required by Item 11 of Form 10-K, and such
information is incorporated herein by this reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The Registrant's Proxy Statement to be used in connection with
the Annual Meeting of Stockholders to be held on April 26, 1994 contains on
pages 2 through 4 the information required by Item 12 of Form 10-K, and such
information is incorporated herein by this reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Registrant's Proxy Statement to be used in connection with
the Annual Meeting of Stockholders to be held on April 26, 1994 contains on
page 12 the information required by Item 13 of Form 10-K, and such information
is incorporated herein by this reference.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
a. (i) Financial Statements
The Financial Statements and related financial data contained
in the Registrant's Annual Report to Stockholders for the year ended December
31, 1993, on pages 13 through 33 thereof and the Independent Auditors' Report
on page 12 of the Registrant's Annual Report to Stockholders for the year ended
December 31, 1993, are incorporated herein by reference. With the exception of
information specifically incorporated by reference, however, the Registrant's
Annual Report to Stockholders for the year ended December 31, 1993 is not to be
deemed filed as a part of this report.
Consolidated Financial Statements:
Consolidated Statements of Earnings (Loss) for the years ended
December 31, 1993, 1992 and 1991.
Consolidated Balance Sheets as of December 31, 1993 and 1992.
Consolidated Statements of Cash Flows for the years ended
December 31, 1993, 1992 and 1991.
Consolidated Statements of Common Stockholders' Equity for the
years ended December 31, 1993, 1992 and 1991.
Notes to Consolidated Financial Statements.
In addition to such Consolidated Financial Statements and
Independent Auditors' Report, the following are included
herein:
Independent Auditors' Report on Supporting Schedules, page 21.
Schedules for the three years ended December 31, 1993:
II - Amounts Receivable from Related Parties and
Underwriters, Promoters and Employees other
than Related Parties, page 22.
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V - Property, Plant and Equipment, page 23.
VI - Accumulated Depreciation and Amortization of
Property, Plant and Equipment, page 24.
VIII - Valuation and Qualifying Accounts, page 25.
X - Supplementary Income Statement Information,
page 26.
All other Schedules have been omitted as
inapplicable, or not required, or because the required information is
included in the Consolidated Financial Statements or the notes
thereto.
(ii) Exhibits
3.1 Restated Certificate of Incorporation of
the Registrant is incorporated by reference
to Exhibit 3.1 to Form 10-K for the fiscal
year ended December 31, 1980.
3.2 Certificate of Retirement of Capital Stock of
the Registrant is incorporated by reference
to Exhibit 3.2 to Form 10-K for the fiscal
year ended December 31, 1989.
3.3 Certificate of Amendment to the Restated
Certificate of Incorporation of the
Registrant is incorporated by reference
to Exhibit 3.3 to Form 10-K for the fiscal
year ended December 31, 1989.
3.4 By-laws of the Registrant, as amended
effective June 15, 1993, is incorporated by
reference to Exhibit 3.1 to Form 10-Q for
the quarter ended June 30, 1993.
10.1 Restricted Stock Purchase Agreement between
the Registrant and Roger W. Norian dated as
of April 27, 1984 is incorporated by
reference to Exhibit 4.4 of Registration
Statement No. 2-92721.
10.2 Restricted Stock Purchase Agreement between
the Registrant and Roger W. Norian dated as
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of October 10, 1985 is incorporated by
reference to Exhibit 4.4 to Registration
Statement No. 33-3517.
10.3 Amendment to Restricted Stock Purchase
Agreement, between the Registrant and
Roger W. Norian, dated as of December 12,
1989 is incorporated by reference to
Exhibit 10.3 to Form 10-K for the fiscal
year ended December 31, 1989.
10.4 Amended and Restated Employment Agreement
between the Registrant and Roger W. Norian
dated as of October 10, 1985 is
incorporated by reference to Exhibit 10.3
to Form 10-K for the fiscal year ended
December 31, 1985.
10.5 Amendment to Amended and Restated
Employment Agreement, between the
Registrant and Roger W. Norian, dated as
of December 12, 1989 is incorporated by
reference to Exhibit 10.5 to Form 10-K
for the fiscal year ended December 31,
1989.
10.6 Employment Agreement between the
Registrant and D. Gordon Strickland dated
as of June 16, 1986 is incorporated by
reference to Exhibit 10.5 to Form 10-K
for the fiscal year ended December 31,
1986.
10.7 Employment Agreement between the Registrant
and Robert S. Reeves dated as of February
17, 1983 is incorporated by reference to
Exhibit 10.6 to Form 10-K for the fiscal
year ended December 31, 1983.
10.8 Employment Agreement between the Registrant
and Norman N. Broadhurst dated as of
December 8, 1988 is incorporated by
reference to Exhibit 10.9 to Form 10-K for
the fiscal year ended December 31, 1988.
10.9 Employment Agreement between the Registrant
and J. Stephen Grassbaugh dated as of
February 24, 1989 is incorporated by
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reference to Exhibit 10.10 to Form 10-K for
the fiscal year ended December 31, 1988.
10.10 1984 Stock Option Plan is incorporated by
reference to Exhibit 4.7 to Registration
Statement No. 2-92722.
10.11 1987 Stock Option Plan is incorporated by
reference to Exhibit 10.12 to Form 10-K for
the fiscal year ended December 31, 1986.
10.12 1993 Employee Stock Option Plan is
incorporated by reference to Exhibit 10.1
to Form 10-Q for the fiscal quarter ended
June 30, 1993.
10.13 1987 Stock Option Plan for Non-Employee
Directors is incorporated by reference to
Exhibit 10.17 to Form 10-K for the fiscal
year ended December 31, 1987.
10.14 1993 Stock Option Plan for Non-Employee
Directors is incorporated by reference to
Exhibit 10.4 to Form 10-Q for the fiscal
quarter ended June 30, 1993.
10.15 Form of Stock Option Agreement used in
connection with the 1984 Stock Option Plan
is incorporated by reference to Exhibit
4.11 to Registration Statement No. 2-92722.
10.16 Form of Stock Option Agreement used in
connection with the 1987 Stock Option Plan
is incorporated by reference to Exhibit
10.17 to Form 10-K for the fiscal year
ended December 31, 1986.
10.17 Form of Stock Option Agreement used in
connection with the 1993 Employee Stock
Option Plan.
10.18 Form of Stock Option Agreement used in
connection with the 1987 Stock Option Plan
for Non-Employee Directors is incorporated
by reference to Exhibit 10.23 to Form 10-K
for the fiscal year ended December 31, 1987.
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10.19 Form of Stock Option Agreement used in
connection with the 1993 Stock Option
Plan for Non-Employee Directors.
10.20 1993 Common Stock Purchase Plan for
Non-Employee Directors is incorporated by
reference to Exhibit 10.3 to Form 10-Q for
the fiscal quarter ended June 30, 1993.
10.21 Letter of Credit dated January 26, 1990
in favor of Roger W. Norian is incorporated
by reference to Exhibit 10.28 to Form 10-K
for the fiscal year ended December 31, 1989.
10.22 Amendment dated December 3, 1992, to Letter
of Credit dated January 26, 1990 in favor
of Roger W. Norian is incorporated by
reference to Exhibit 10.23 to Form 10-K for
the fiscal year ended December 31, 1992.
10.23 Directors' Retirement Consulting Plan is
incorporated by reference to Exhibit 10.22
to Form 10-K for the fiscal year ended
December 31, 1984.
10.24 Key Executive Bonus Plan is incorporated
by reference to Exhibit 10.2 to Form 10-Q
for the fiscal quarter ended June 30, 1993.
10.25 Lease dated as of March 11, 1986 between
Northrop Corporation and Registrant with
respect to Registrant's principal
executive offices, including related
amendment to the Lease dated as of
September 30, 1986 is incorporated by
reference to Exhibit 10.24 to Registration
Statement No. 33-08212.
10.26 Lease between the Industrial Development
Board of the City of Jackson and Kerr
Group, Inc., Dated as of May 14, 1993 is
incorporated by reference to Exhibit 10.5
to Form 10-Q for the fiscal quarter ended
June 30, 1993.
10.27 Asset Purchase Agreement dated as of
November 25, 1991 by and between the
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Registrant and Ball Corporation is
incorporated by reference to Exhibit 1
to Form 8-K dated November 24, 1991.
10.28 Line of Credit between PNC Bank and Kerr
Group, Inc. dated November 5, 1993 is
incorporated by reference to Exhibit 10.6
to Form 10-Q for the fiscal quarter ended
September 30, 1993.
10.29 Line of Credit between the Bank of Boston
and Kerr Group, Inc. dated November 5, 1993
is incorporated by reference to Exhibit 10.7
to Form 10-Q for the fiscal quarter ended
September 30, 1993.
10.30 Note Agreement dated as of September 15,
1993 between Kerr Group, Inc. and the
Purchasers identified therein is
incorporated by reference to Exhibit 2
to Form 8-K dated September 21, 1993.
10.31 Asset Purchase Agreement, dated as of
December 11, 1992, by and between Crown
Cork & Seal Company, Inc. and Kerr Group,
Inc. is incorporated by reference to
Exhibit 1 to Form 8-K dated December 11,
1992.
11.1 Statement re: Computation of Per Common
Share Earnings (Loss).
13.1 Registrant's Annual Report to Stockholders
for the fiscal year ended December 31, 1993,
pages 12 through 36.
21.1 Subsidiaries
23.1 Consent of Independent Certified Public
Accountants.
99.1 Undertaking is incorporated by reference
to Exhibit 28.1 to Form 10-K for the year
ended December 31, 1982.
The Registrant has no additional long-term debt instruments in
which the total amount of securities authorized
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under any instrument exceeds 10% of total assets of the Registrant and its
subsidiaries on a consolidated basis. The Registrant hereby agrees to furnish
a copy of any such long-term debt instrument upon the request of the Securities
and Exchange Commission.
b. Reports on Form 8-K
On October 19, 1993, the Registrant filed a Form 8-K Current
Report announcing its intention to call for redemption on December 15, 1993 all
of the Registrant's outstanding 13% Subordinated Notes Due December 15, 1996.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
KERR GROUP, INC.
By: Roger W. Norian
-------------------------------
Roger W. Norian, Chairman
President and Chief
Executive Officer
Dated: March 29, 1994
Los Angeles, California
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Gordon C. Hurlbert March 29, 1994
- - -----------------------------------
Gordon C. Hurlbert, Director
Michael C. Jackson March 29, 1994
- - -----------------------------------
Michael C. Jackson, Director
John D. Kyle March 29, 1994
- - -----------------------------------
John D. Kyle, Director
James R. Mellor March 29, 1994
- - -----------------------------------
James R. Mellor, Director
Roger W. Norian March 29, 1994
- - -----------------------------------
Roger W. Norian, Principal
Executive Officer; Director
Robert M. O'Hara March 29, 1994
- - -----------------------------------
Robert M. O'Hara, Director
Harvey L. Sperry March 29, 1994
- - -----------------------------------
Harvey L. Sperry, Director
D. Gordon Strickland March 29, 1994
- - -----------------------------------
D. Gordon Strickland
Principal Financial Officer
J. Stephen Grassbaugh March 29, 1994
- - -----------------------------------
J. Stephen Grassbaugh
Principal Accounting Officer
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INDEPENDENT AUDITOR'S REPORT
To the Stockholders and Board of Directors
of Kerr Group, Inc.:
Under date of February 23, 1994, we reported on the consolidated balance sheets
of Kerr Group, Inc. as of December 31, 1993 and 1992, and the related
consolidated statements of earnings (loss), common stockholders' equity, and
cash flows for each of the years in the three-year period ended December 31,
1993, as contained in the 1993 annual report to stockholders. These
consolidated financial statements and our report thereon are incorporated by
reference in the annual report on Form 10-K for the year 1993. In connection
with our audits of the aforementioned consolidated financial statements, we
also have audited the related supplementary financial statement schedules as
listed in Item 14a(i). These supplementary financial statement schedules are
the responsibility of the company's management. Our responsibility is to
express an opinion on these supplementary financial statement schedules based
on our audits.
In our opinion, such supplementary financial statement schedules, when
considered in relation to the basic consolidated financial statement taken as a
whole, present fairly, in all material respects, the information set forth
therein.
KPMG Peat Marwick
Los Angeles, California
February 23, 1994
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SCHEDULE II
KERR GROUP, INC.
Amounts Receivable From Related Parties and Underwriters,
Promoters and Employees Other Than Related Parties
Three years ended December 31, 1993
(in thousands)
Column A Column B Column C Column D Column E
---------- -------- -------- ----------------- -----------------
Balance at
Deductions End of Period
------------------ -----------------
Balance (1) (2) (1) (2)
at Beginning Amounts Amounts Non-
Year Ended Name of Debtor of Period Additions Collected Written-Off Current Current
- - ----------- -------------- --------- --------- --------- ----------- ------ -------
December 31,
1991: R. W. Norian $485 $ 38 $ - $ - $ - $523(a)
D. G. Strickland 32 105 8 - 5 124(b)
==== ==== === ==== ==== ====
December 31,
1992: R. W. Norian $523 $ 5 $ - $528 $ - $ -(a)
D. G. Strickland 129 8 - 15 - 122(b)
==== ==== === ==== ==== ====
December 31,
1993: D. G. Strickland $122 $ 9 $ 1 $ - $ - $130(b)
==== ==== === ==== ==== ====
(a) Includes both note receivable and related accrued interest. The loan
accrued interest at an annual rate of 9.23%. On February 28, 1992,
$400,000 of remaining principal and $128,319 of related accrued
interest was forgiven by the Registrant.
(b) Consists of two loans dated January 16, 1990 and June 11, 1991 in the
original amount of $30,000 and $100,000, respectively, and related
accrued interest. The principal of the loan dated January 16, 1990 is
to be paid in six equal annual installments in 1991 through 1996,
however, on January 1, 1992, $15,000 of principal was forgiven by the
Registrant. This loan bears interest at 6% annually and accrued
interest is paid annually. The principal and related accrued interest
of the loan dated June 11, 1990 is to be paid in 1996. This loan
bears interest at 7.76% per annum.
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SCHEDULE V
KERR GROUP, INC.
Property, Plant and Equipment
Three years ended December 31, 1993
(in thousands)
Column A Column B Column C Column D Column F
-------------- ---------- ---------- ---------- ----------
Balance Balance
at Beginning Additions at End
Classification of Period At Cost Retirements of Period
-------------- ------------ ----------- ----------- -----------
Year Ended December 31, 1991:
Land $ 436 $ - $ - $ 436
Buildings and Improvements 11,215 734 252 11,697
Machinery and Equipment 62,847 3,514 2,433 63,928
Furniture and Equipment 2,729 143 23 2,849
-------- -------- ------- --------
$77,227 $ 4,391 $ 2,708 $78,910
======= ======= ======= =======
Year Ended December 31, 1992:
Land $ 436 $ - $ - $ 436
Buildings and Improvements 11,697 842 4 12,535
Machinery and Equipment 63,928 7,267 3,230 67,965
Furniture and Equipment 2,849 250 75 3,024
-------- -------- ------- --------
$78,910 $ 8,359 $ 3,309 $83,960
======= ======= ======= =======
Year Ended December 31, 1993:
Land $ 436 $ - $ 9 $ 427
Buildings and Improvements 12,535 176 235 12,476
Machinery and Equipment 67,965 10,598 3,815 74,748
Furniture and Equipment 3,024 482 505 3,001
-------- --------- -------- --------
$83,960 $11,256 $ 4,564 $90,652
======= ======= ======= =======
1.) Amounts for property, plant and equipment presented in the table above
are related to continuing operations only. Property, plant and
equipment associated with the Commercial Glass Container Business and
Metal Crown Business of the Registrant in 1991 and 1992 has been
reported as a component of net non-current assets related to
discontinued operations in the Registrant's Consolidated Balance
Sheets.
2.) As to Column E, which is omitted, the answers are "None".
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SCHEDULE VI
KERR GROUP, INC.
Accumulated Depreciation and Amortization of
Property, Plant and Equipment
Three years ended December 31, 1993
(in thousands)
Column A Column B Column C Column D Column F
-------------- ---------- ---------- ---------- ----------
Additions
Balance Charged to Balance
at Beginning Costs and at End
Classification of Period Expenses Retirements of Period
-------------- ------------ ----------- ----------- ---------
Year Ended December 31, 1991:
Buildings and Improvements $ 5,792 $ 517 $ 66 $ 6,243
Machinery and Equipment 33,559 4,481 1,779 36,261
Furniture and Equipment 1,636 391 16 2,011
-------- -------- --------- --------
$40,987 $ 5,389 $ 1,861 $44,515
======= ======= ======= =======
Year Ended December 31, 1992:
Buildings and Improvements $ 6,243 $ 636 $ 4 $ 6,875
Machinery and Equipment 36,261 5,027 2,846 38,442
Furniture and Equipment 2,011 304 55 2,260
-------- -------- --------- --------
$44,515 $ 5,967 $ 2,905 $47,577
======= ======= ======= =======
Year Ended December 31, 1993:
Buildings and Improvements $ 6,875 $ 750 $ 174 $ 7,451
Machinery and Equipment 38,442 5,676 3,465 40,653
Furniture and Equipment 2,260 286 422 2,124
-------- -------- -------- --------
$47,577 $ 6,712 $ 4,061 $50,228
======= ======= ======= =======
1.) Amounts for accumulated depreciation and amortization of property,
plant and equipment presented in the table above are related to
continuing operations only. Accumulated depreciation and amortization
of property, plant and equipment associated with the Commercial Glass
Container Business and Metal Crown Business of the Registrant in 1991
and 1992 has been reported as a component of net non- current assets
related to discontinued operations in the Registrant's Consolidated
Balance Sheets.
2.) See note 1 of notes to Consolidated Financial Statements for
description of the Registrant's depreciation policy.
3.) As to Column E, which is omitted, the answers are "None".
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SCHEDULE VIII
KERR GROUP, INC.
Valuation and Qualifying Accounts
Three years ended December 31, 1993
(in thousands)
Column A Column B Column C Column D Column E
-------------- ---------- ------------------------- ---------- ----------
Additions
-------------------------
(1) (2)
Balance Charged Charged Deductions Balance
at Beginning (Credited) to Other From at End
Description of Period to Earnings Account Reserves(a) of Period
------------- ------------ ----------- --------- ----------- ---------
Allowance for doubtful accounts,
year ended:
December 31, 1991 $337 $ 88 $ - $ 65 $360
==== ==== ===== ===== ====
December 31, 1992 $360 $390 $ - $105 $645
==== ==== ===== ==== ====
December 31, 1993 $645 ($ 42) $ - $ 25 $578
==== ===== ===== ===== ====
Note: Allowance for doubtful accounts presented in the table above is
related to continuing operations only. Allowance for doubtful
accounts associated with the Commercial Glass Container Business and
Metal Crown Business of the Registrant in 1991 and 1992 has been
reported as a component of net current assets related to discontinued
operations in the Registrant's Consolidated Balance Sheets.
(a) These deductions represent uncollectible amounts charged against the
reserve.
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SCHEDULE X
KERR GROUP, INC.
Supplementary Income Statement Information
Three years ended December 31, 1993
(in thousands)
Column A Column B
------------ ----------------------------------------
Charged to Costs and Expenses
----------------------------------------
Item 1993 1992 1991
----------- ------ ------ ------
Maintenance and repairs $7,904 $8,028 $7,428
Depreciation and amortization of
intangible assets, preoperating
costs and similar deferrals * * *
Taxes, other than payroll and income
taxes * * *
Royalties * * *
Advertising costs * * *
Note: Income statement information presented in the table above are for the
Registrant's continuing operations.
* Less than 1% of annual net sales from continuing operations.
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
KERR GROUP, INC.
FORM 10-K
for year ended December 31, 1993
INDEX TO EXHIBITS FILED SEPARATELY WITH FORM 10-K
Exhibit No. Document
- - ----------- --------
10.17 Form of Stock Option Agreement used in connection with the 1993 Employee Stock Option Plan.
10.19 Form of Stock Option Agreement used in connection with the 1993 Stock Option Plan for Non-Employee Directors.
11.1 Statement re: Computation of Per Common Share Earnings (Loss).
13.1 Registrant's Annual Report to Stockholders for the fiscal year ended December 31, 1993, pages 12 through 36.
21.1 Subsidiaries
23.1 Consent of Independent Certified Public Accountants.