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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file number 1-5325
HUFFY CORPORATION
(Exact name of registrant as specified in its charter)
OHIO 31-0326270
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
225 Byers Road, Miamisburg, Ohio 45342
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (513) 866-6251
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
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Common Stock, $1.00 Par Value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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 the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of the Common Stock held by non-affiliates of the
registrant, as of February 28, 1995, was $196,798,047.
The number of shares outstanding of each of the registrant's classes of Common
Stock, as of February 28, 1995, was 13,392,963.
"Index of Exhibits" at page 18 of this Report
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DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------
1. The Huffy Corporation Annual Report to Shareholders for the year ended
December 31, 1994. Only such portions of the Annual Report as are
specifically incorporated by reference under Parts I, II and IV of this
Report shall be deemed filed as part of this Report.
2. The Huffy Corporation Proxy Statement for its Annual Meeting of
Shareholders on April 28, 1995, definitive copies of which have been
filed with the Commission. Only such portions of the Proxy Statement as
are specifically incorporated by reference under Part III of this Report
shall be deemed filed as part of this Report.
__________________________
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PART I
ITEM 1. BUSINESS
Huffy Corporation, an Ohio corporation, and its subsidiaries (collectively
called "Huffy" or the "Company") are engaged in the design, manufacture and
sale of Recreation and Leisure Time Products, Juvenile Products, and the
furnishing of Services for Retail. The Company's executive offices are located
in Miamisburg, Ohio and its principal business offices and/or manufacturing
facilities are located in San Diego, California; Thornton, Colorado;
Farmington, Missouri; Miamisburg and Celina, Ohio; Camp Hill and Harrisburg,
Pennsylvania; Waukesha and Suring, Wisconsin; and Whites Cross, Cork, Ireland.
The general development of business within each business segment (Recreation
and Leisure Time Products, Juvenile Products and Services for Retail) is
discussed in more detail below. See also Part IV herein for financial
information relating to each such business segment.
RECREATION AND LEISURE TIME PRODUCTS
Huffy Bicycle Company, Huffy Sports Company, and True Temper Hardware
Company comprise the Recreation and Leisure Time Products segment of
the Company. Bicycles are one of the principal products produced
within the business segment. Bicycles sold to high volume retailers
represented 40.6 percent, 44.2 percent, and 44.6 percent of
consolidated revenues of the Company for the years ended December 31,
1994, 1993, and 1992, respectively. Sales to high volume retailers of
basketball backboards, poles, goals and related products represented
11.2 percent of consolidated revenues of the Company for the year
ended December 31, 1994. Sales to high volume retailers of lawn and
garden tools, which are also principal products within the business
segment, represented 12.1 percent, 13.6 percent, and 15.6 percent of
consolidated revenues of the Company for the years ended December 31,
1994, 1993, and 1992, respectively. Although to date the export
business is not significant, the companies in the Recreation and
Leisure Time Products segment participate in various foreign markets
and are actively involved in expanding export volume.
a. Products, Marketing and Distribution
------------------------------------
Huffy Bicycle Company: The Huffy(R) bicycle brand is the
largest selling brand of bicycles sold in the United States.
The full line of Huffy(R) bicycles is produced by Huffy Bicycle
Company, a division of the Company, whose manufacturing
facilities are located in Celina, Ohio, and Farmington,
Missouri. In 1994, Huffy Bicycle Company opened the bicycle
manufacturing facility in Farmington, Missouri, to increase
manufacturing flexibility, capacity and market share, and to
reduce costs. Included in the Huffy(R) bicycle line are adult
all purpose bicycles; adult all terrain bicycles; a series of
innovative boys' and girls' 20" bicycles; and a series of
popular children's 16" sidewalk bicycles. Huffy(R) bicycles are
extensively advertised and are sold predominantly through
national and regional high volume retailers, a distribution
network accounting for approximately 75 to 80 percent of all
bicycles sold in the United States. Over 90 percent of Huffy
Bicycle Company's bicycles are sold under the Huffy(R) brand
name with the balance being sold under private label brands.
Huffy Sports Company: Huffy Sports Company, a division of the
Company, located in Waukesha, Wisconsin, is the leading supplier
of basketball backboards, poles, goals, and
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related products for use at home. Huffy Sports Company
products, many of which bear the logo of the National Basketball
Association ("NBA"), as well as the Huffy Sports(R) trademark,
are sold predominately through national and regional high volume
retailers in the United States.
True Temper Hardware Company: True Temper Hardware Company, a
wholly-owned subsidiary of the Company, is headquartered in Camp
Hill, Pennsylvania. The Company acquired the True Temper
Hardware business from certain affiliates of Black & Decker,
Inc. in 1990. True Temper Hardware Company is one of three
leading suppliers of non-powered lawn and garden tools and snow
tools; products include long-handled shovels, hoes, forks,
wheelbarrows, snow shovels, and rakes for use in the home and in
agricultural, industrial and commercial businesses. In 1994,
True Temper Hardware Company discontinued manufacturing
spreaders and pruning tools and sold the assets used to produce
such products, including its Anderson, South Carolina
manufacturing facility. Manufacturing facilities are located in
Camp Hill and Harrisburg, Pennsylvania. True Temper Hardware
Company also owns four sawmill facilities located in Indiana,
New York, Pennsylvania, and Vermont. In addition, True Temper
Limited, an Irish Corporation and a wholly-owned subsidiary of
the Company, has offices and a manufacturing facility in Whites
Cross, Cork, Ireland. True Temper Hardware products are
extensively advertised and are sold both directly, and through
wholesale distributors, to national and regional high volume
retailers and hardware stores. Over 82 percent of True Temper
Hardware's products are sold under the True Temper(R) name; the
remainder are sold under the Jackson(R) name, or other names, or
under private labels. During 1994, the Company substantially
completed a restructuring plan to restructure the True Temper
lawn and garden tool business to address inefficiencies in the
manufacturing process and to improve future profitability of
True Temper Hardware Company. The Company recorded a credit to
the restructure provision of $934,000. Information regarding
the Company's restructure of True Temper Hardware Company is
incorporated herein by reference to page 24 and note 2 to the
consolidated financial statements on page 32 of the Company's
Annual Report to Shareholders for the year ended December 31,
1994.
b. Suppliers
---------
Basic materials such as raw steel, steel tubing, plastic, ash
timber, and welding materials used in the manufacturing
operations are purchased primarily from domestic sources.
Alternate sources are available for all critical products and
components, but the sudden loss of any major supplier could, on
a temporary basis, cause a negative effect on the segment's
operations.
c. Patents, Trademarks and Licenses
--------------------------------
The patents, trademarks (including the registered trademarks
"Huffy", "Huffy Sports", "True Temper" and "Jackson"), licenses
(including the license to use the NBA logo) and other
proprietary rights of the companies in this segment are deemed
important to the Company. The loss by the Company of its rights
under any individual patent, trademark (other than "Huffy" or
"True Temper"), license or other proprietary right used by this
segment would not have a material adverse effect on the Company
or the segment. The loss of either the registered trademark
"Huffy" or "True Temper" could have a material adverse effect on
the Company and this segment. The Company has no reason to
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believe that anyone has rights to either the trademark "Huffy"
or the trademark "True Temper" for the products in connection
with which such trademarks are used.
d. Seasonality and Inventory
-------------------------
Due to the relatively short lapse of time between placement of
orders for products and shipments, the Company normally does not
consider its backlog of orders as significant to this business
segment. Because of rapid delivery requirements of their
customers, the companies in this segment maintain significant
quantities of inventories of finished goods to meet their
customers' requirements. Sales of bicycles are seasonal in that
sales tend to be higher in the Spring and Fall of each year.
Basketball products tend to have varying degrees of seasonality,
none of which are significant to the operations of the Company.
Sales of lawn and garden products and snow tools tend to be
higher in the Spring and Winter of each year, respectively.
e. Competition and Customers
-------------------------
In the high volume retailer bicycle business, Huffy Bicycle
Company has numerous competitors in the United States market,
only two of which are deemed significant. Although importers in
the aggregate provide significant competition, only one
individual importer is deemed a significant competitor. Even
though competition among domestic manufacturers and importers of
bicycles is intense, Huffy Bicycle Company believes it is cost
competitive in the high volume retailer bicycle market and
maintains its position through continued efforts to improve
manufacturing efficiency and product value. Huffy Bicycle
Company's ability to provide its customers with low cost,
innovative new products has enabled it to maintain its market
position despite the targeted marketing efforts of competitors
from Taiwan, China, and other nations. Huffy Sports Company has
several competitors, but only one is deemed significant. Huffy
Sports Company maintains its competitive position by offering
its customers high quality, innovative products at competitive
prices and by supporting its products with outstanding customer
service. True Temper Hardware Company has numerous competitors
in the United States and Canada, but considers only two
competitors significant. True Temper Hardware Company believes
it remains competitive by offering its customers in the home
use, agricultural, industrial, and commercial markets
competitively priced, high quality, innovative products. The
loss by the Recreation and Leisure Time Products segment of
either of its two largest customers could result in a
short-term, material adverse effect on the segment.
JUVENILE PRODUCTS
The Juvenile Products segment is comprised of Gerry Baby Products
Company and Gerry Wood Products Company (collectively, the "Gerry
Companies"). Although to date the export business is not significant,
the Gerry Companies participate in various foreign markets and are
actively involved in expanding export volume.
a. Products, Marketing and Distribution
------------------------------------
Juvenile Products include products sold under two prominent
brand names: "Gerry" and "Snugli". Gerry(R) baby products
include a wide range of market entries, including car seats,
infant carriers, frame carriers, security gates, toilet
trainers, electronic baby
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monitors, and a broad line of various wood juvenile products
including portable cribs, changing tables and security gates
sold under the "Nu-Line" brand name prior to 1992 and under the
Gerry(R) brand name since 1992. Snugli(R) baby products include
infant carriers.
All of the juvenile products have wide distribution; the
products are marketed through all of the retail channels that
sell juvenile products: mass merchants, toy chains, warehouse
clubs, catalog showrooms, national and regional retailers, and
specialty shops. Juvenile Products represented 16.9 percent,
16.4 percent, and 16.4 percent of consolidated revenues of the
Company for the years ended December 31, 1994, 1993, and 1992,
respectively.
The Juvenile Products segment has been developed through
selective acquisitions and internal growth and expansion. It is
comprised of two direct subsidiaries of the Company: Gerry Baby
Products Company ("GBPC") and Gerry Wood Products Company.
GBPC's headquarters and principal manufacturing facilities are
located in Thornton, Colorado. Gerry Wood Products Company is a
manufacturer of juvenile wooden products and is located in
Suring, Wisconsin. In 1994, the Company discontinued its
assembly operations at its facilities located in Vancouver,
British Columbia which prior thereto had been operated through
an indirect subsidiary of the Company, Snugli-Canada, Ltd. In
1987, GBPC entered into a joint venture known as Takata-Gerico
Corporation ("TGC"), with Takata Corporation of Japan, to
manufacture children's car seats in the United States for
distribution by GBPC. The joint venture was subsequently
terminated by the parties' mutual agreement in 1992, and in
connection with such termination GBPC purchased certain assets
of TGC.
b. Suppliers
---------
Basic materials such as steel and aluminum tubing, plastic,
wood, fabric, and resins used in domestic manufacturing
operations are purchased primarily from domestic sources. All
electronic products and some sewn products are imported.
Alternate sources are available for all critical products and
components, but the sudden loss of any major supplier could, on
a temporary basis, cause a negative effect on the segment's
operations.
c. Patents, Trademarks and Licenses
--------------------------------
The patents, trademarks (including the registered trademarks
"Gerry" and "Snugli") and other proprietary rights of the Gerry
Companies in this segment are deemed important to the Company.
However, the loss of any rights under any individual patent,
trademark (other than "Gerry" or "Snugli"), or other proprietary
right used by this segment would not have a material adverse
effect on the Company or this segment. The loss of the
registered trademark "Gerry" or "Snugli" could have a material
adverse effect on the Company and this segment, but the Company
has no reason to believe anyone has rights to either the "Gerry"
or "Snugli" trademark for the products in connection with which
either is used.
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d. Seasonality and Inventory
-------------------------
The Gerry Companies do not consider their backlog of orders
significant to this business segment, due to the relatively
short lapse of time between placement of orders for products and
shipments. Because of the rapid delivery requirements of their
customers, the Gerry Companies maintain sufficient quantities of
inventories of finished goods to meet their customers'
requirements. Most products within this business segment are
not seasonal.
e. Competition and Customers
-------------------------
There are numerous juvenile products competitors in the U.S.
market, four of which are deemed significant. The Gerry
Companies believe they are competitive because of their
continued efforts to provide innovative new products of high
quality at competitive costs and to support their products with
outstanding customer service. The loss by the Gerry Companies
of their largest customer could have a short-term, material
adverse effect on the segment.
SERVICES FOR RETAIL
Huffy Service First, Inc. ("HSF") and Washington Inventory Service
("WIS") each provide certain services to retailers. Inventory,
assembly, repair and merchandise services provided by WIS and HSF to
their customers represented 19.2 percent, 15.8 percent, and 15.6
percent of consolidated revenues of the Company for the years ended
December 31, 1994, 1993, and 1992, respectively.
a. Products, Marketing and Distribution
------------------------------------
Huffy Service First: HSF, a wholly-owned subsidiary of the
Company, headquartered in Miamisburg, Ohio, serves the needs of
major retailers in 50 states, Puerto Rico and the Virgin Islands
by providing in-store assembly, repair, and display services for
a variety of products, including among other things, bicycles,
barbeque grills, physical fitness equipment, lawnmowers, and
furniture. HSF is the only assembly service business of this
kind available to high volume retailers on a nationwide basis.
HSF also offers merchandising services (product resets and
periodic maintenance of displays) to manufacturers who supply
high volume retailers.
Washington Inventory Service: WIS, a wholly-owned subsidiary of
the Company, headquartered in San Diego, California, provides
physical inventory services on a nationwide basis to meet the
financial reporting and inventory control requirements of mass
retailers, drug stores, home centers, sporting goods stores,
specialty stores and grocery stores. WIS operates from 115
offices nationwide.
b. Seasonality
-----------
The demand for services provided by this business segment is
seasonal in that assembly service demand is generally strongest
in Spring and at the Winter holiday season, and inventory
service demand is generally strongest in the first and third
calendar quarters of the year.
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c. Competition and Customers
-------------------------
Although WIS has numerous competitors in the United States
market, only one is significant. HSF has numerous competitors
in the United States market, none of which is deemed
significant. WIS and HSF believe they remain competitive due to
their nationwide network of operations, competitive pricing and
full service. The loss by either WIS or HSF of its largest
customer could result in a short-term, material adverse effect
on the segment.
Sales to Wal-Mart Corporation, Kmart Corporation and Toys "R" Us aggregated
over ten percent or more of the Company's consolidated revenues from each such
customer for the year ended December 31, 1994, and the loss of any one of these
customers could have a short-term, material adverse effect on the Company and
its subsidiaries as a whole.
The number of persons employed full-time by the Company (excluding seasonal
employees in the Services for Retail Segment) as of December 31, 1994, was
6,955.
ITEM 2. PROPERTIES: Location and general character of the principal plants
and other materially important physical properties of the Company as
of January 1, 1995.
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Owned or
Expiration
Building Area Date
Location Description (Sq. Ft.) of Lease
- ----------------------------------------------------------------------------------------------------------------------------------
San Diego, California Offices (Services for Retail) 30,000 2004(1)
Thornton, Colorado Offices, manufacturing and 386,000 2001(2)
warehouse facility
(Juvenile Products)
Farmington, Missouri Offices, manufacturing and 412,052 2014(3)
warehouse facility
(Recreation and Leisure
Time Products)
Celina, Ohio Offices, manufacturing and 822,000 Owned
warehouse facility
(Recreation and
Leisure Time Products)
Miamisburg, Ohio Offices and display 47,000 2003(4)
facilities (Corporate,
Recreation and Leisure
Time Products)
Miamisburg, Ohio Offices and warehouse 34,500 1996(1)
facility (Services for
Retail)
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Owned or
Expiration
Building Area Date
Location Description (Sq. Ft.) of Lease
- ----------------------------------------------------------------------------------------------------------------------------------
Camp Hill, Offices, manufacturing and 391,690 2012(5)
Pennsylvania distribution facility
(Recreation and Leisure
Time Products)
Harrisburg, Offices and manufacturing 254,329 Owned
Pennsylvania facility (Recreation and
Leisure Time Products)
Suring, Wisconsin Offices and manufacturing 140,000 Owned
facility (Juvenile Products)
Waukesha, Wisconsin Offices and manufacturing 123,500 1996(1)
facility (Recreation and
Leisure Time Products)
Whites Cross, Cork, Offices and manufacturing 70,000 Owned
Ireland facility (Recreation and
Leisure Time Products)
<FN>
(1) Subject to two consecutive options to renew for additional terms of five
years each.
(2) Subject to an option to purchase at the expiration of the lease.
(3) The City of Farmington, Missouri financed the acquisition of the premises
through the issuance of Industrial Development Revenue Bonds (Huffy
Corporation Project) Series 1994 in the aggregate principal amount of
$20,000,000 and leased the premises to the Company. The Company has an
option to purchase during the term or at expiration of the lease.
(4) Subject to an option to purchase during the term of or at the expiration of
the lease, and if the option is not exercised at the expiration of the
lease, the Company automatically receives an extension on the term for up to
12 months or until the property is sold, whichever time period is shorter.
(5) Subject to one option to renew for an additional term of five years and an
option to purchase.
There are no encumbrances on the Celina, Ohio; Harrisburg, Pennsylvania;
Suring, Wisconsin; and Whites Cross, Cork, Ireland properties which are owned.
All of the Company's facilities are in good condition and are considered
suitable for the purposes for which they are used. The Camp Hill,
Pennsylvania; Celina, Ohio; and Suring, Wisconsin, manufacturing facilities
normally operate on a two full shift basis, with third shift operations
scheduled as needed to meet seasonal production requirements. The Thornton,
Colorado; Harrisburg, Pennsylvania; and Waukesha, Wisconsin manufacturing
facilities normally operate on a two full shift basis. The Whites Cross, Cork,
Ireland, manufacturing facility normally operates on a one full shift basis.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party, nor is its property subject, to any material
pending legal proceedings.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The market information and other related security holder matters pertaining to
the Common Stock of the Company are incorporated herein by reference to pages
44 and 45 and notes 5 and 6 to the consolidated financial statements on pages
33 through 35 of the Company's Annual Report to Shareholders for the year ended
December 31, 1994.
ITEM 6. SELECTED FINANCIAL DATA
Selected unaudited financial data for each of the last 10 calendar years are
incorporated herein by reference to pages 20 and 21 of the Company's Annual
Report to Shareholders for the year ended December 31, 1994.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Discussion and analysis of financial condition and results of operations are
incorporated herein by reference to pages 22 through 25, and note 4 to the
consolidated financial statements on page 33 of the Company's Annual Report to
Shareholders for the year ended December 31, 1994.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial information included in the Company's Annual Report to
Shareholders for the year ended December 31, 1994, is set forth on pages 19 and
36 through 43 thereof and is incorporated herein by reference. See also the
information contained in Item 14 of Part IV of this Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Directors of the Company
- ------------------------
The name, age and background information for each of the Company's Directors is
incorporated herein by reference to the section entitled ELECTION OF DIRECTORS
and the table therein contained in the Company's Proxy Statement for its 1995
Annual Meeting of Shareholders.
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Executive Officers of the Company
- ---------------------------------
The Executive Officers are elected annually to their respective positions,
effective at the April meeting of the Board of Directors. The Executive
Officers of the Company at February 20, 1995, were as follows:
- --------------------------------------------------------------------------------------------------------------------------
Name Age Position Officer Since
- --------------------------------------------------------------------------------------------------------------------------
Thomas A. Frederick 40 Vice President - Finance, December, 1994
Chief Financial Officer
Timothy G. Howard 48 Vice President - Controller September, 1978
W. Anthony Huffman 52 Vice President - Corporate March, 1982
Affairs
Nancy A. Michaud 48 Vice President - General February, 1993
Counsel and Secretary
Richard L. Molen 54 Chairman of the Board, January, 1979
President and Chief
Executive Officer
Gary E. Morin 45 Executive Vice President and February, 1993
Chief Operating Officer
George A. Plotner 43 Vice President - Human Resources March, 1992
Pamela J. Whipps 41 Vice President - Treasurer February, 1994
Prior to being elected an Executive Officer in December, 1994, Mr. Frederick
was President and General Manager of Huffy Service First, Inc. from 1992; prior
thereto, he served as Vice President - Controller of Huffy Service First, Inc.
from 1990 to 1992. Prior to being elected Vice President - General Counsel and
Secretary, Ms. Michaud was Vice President - General Counsel and Assistant
Secretary of the Company from February, 1994 to July, 1994; prior thereto, Ms.
Michaud was General Counsel and Assistant Secretary of the Company from
February, 1993 to February, 1994; prior thereto, Ms. Michaud served as Senior
Counsel of the Company. Prior to being elected Chairman of the Board,
President and Chief Executive Officer of the Company in 1994, Mr. Molen was
President and Chief Executive Officer of the Company from 1993 to 1994; prior
thereto, Mr. Molen served as President and Chief Operating Officer of the
Company. Prior to being elected Executive Vice President and Chief Operating
Officer in February, 1995, Mr. Morin was Executive Vice President of the
Company from February, 1993 to February, 1995; prior thereto, he served as
President and General Manager of Huffy Bicycle Company from 1992 to 1993; prior
thereto, he served as President and General Manager of Washington Inventory
Service from 1991 to 1992; prior thereto, he served as Vice President -
Finance, Chief Financial Officer and Treasurer of the Company. Prior to being
elected an Executive Officer in 1992, Mr. Plotner was Vice President - Quality
and Human Resources of Huffy Bicycle Company from 1989 to 1992, and prior
thereto, Vice President - Human Resources of such company. Prior to being
elected Vice President - Treasurer, Ms. Whipps was Treasurer and Director of
Investor Relations from February, 1994 to November, 1994; prior thereto, Ms.
Whipps served as Assistant Treasurer and Manager Investor Relations of the
Company from 1990 to February, 1994.
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ITEM 11. EXECUTIVE COMPENSATION
Information on executive compensation is incorporated by reference to the
sections entitled EXECUTIVE COMPENSATION and the tables therein, contained on
pages 12 through 15 in the Company's Proxy Statement for its 1995 Annual
Meeting of Shareholders. Notwithstanding anything to the contrary set forth
herein or in any of the Company's previous filings under the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as amended, that
might incorporate future filings, including this Form 10-K, the REPORT OF
COMPENSATION COMMITTEE OF BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION which
begins on page 8 and ends on page 12 and the graph which is set forth on page
16 in the Company's Proxy Statement for its 1995 Annual Meeting of Shareholders
are not deemed to be incorporated by reference in this Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The number of shares of Common Stock of the Company beneficially owned by each
Director and by all Directors and Officers as a group as of February 8, 1995,
is incorporated herein by reference to the section entitled SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT, and the table therein, contained
on pages 6 through 8 in the Company's Proxy Statement for its 1995 Annual
Meeting of Shareholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information on certain transactions with management is incorporated herein by
reference to the section entitled CERTAIN RELATIONSHIPS AND OTHER RELATED
TRANSACTIONS contained on page 12 in the Company's Proxy Statement for its 1995
Annual Meeting of Shareholders.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Documents
(1) The following Consolidated Financial Statements of the Company
included in the Company's Annual Report to Shareholders are
incorporated by reference as part of this Report at Item 8 hereof:
Consolidated Balance Sheets as of December 31, 1994, and
1993.
Consolidated Statements of Operations for the years ended
December 31, 1994, 1993, and 1992.
Consolidated Statements of Cash Flows for the years ended
December 31, 1994, 1993, and 1992.
Consolidated Statements of Shareholders' Equity for the
years ended December 31, 1994, 1993, and 1992.
Notes to Consolidated Financial Statements.
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The Annual Report to Shareholders for the year ended December 31,
1994, is not deemed to be filed as part of this Report, with the
exception of the items incorporated by reference in Items 1, 5, 6,
7 and 8 of this Report and those financial statements and notes
thereto listed above.
(2) The Accountants' Report on Consolidated Financial Statements and
the following Financial Statement Schedule of the Company is
included as part of this Report at Item 8 hereof:
Schedule II. Valuation and Qualifying Accounts - years
ended December 31, 1994, 1993, and 1992.
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission
are not required under the related instructions or are
inapplicable and, therefore, have been omitted.
(3) The exhibits shown in "Index to Exhibits" are filed as a part of
this Report.
(b) Reports on Form 8-K
-------------------
During the fiscal quarter ended December 31, 1994, the Company filed one
report on Form 8-K, dated December 22, 1994, reporting an Amendment,
dated as of December 9, 1994, to its Rights Agreement, dated as of
December 16, 1988, as amended August 23, 1991, between the Company and
Bank One, Indianapolis, National Association.
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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.
HUFFY CORPORATION
By /s/ Richard L. Molen Date: March 16, 1995
--------------------------------
Richard L. Molen
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ Richard L. Molen Date: March 16, 1995
- ------------------------------------
Richard L. Molen
Chairman of the Board, President and
Chief Executive Officer and Director
(Principal Executive Officer)
/s/ Thomas A. Frederick Date: March 16, 1995
- ------------------------------------
Thomas A. Frederick
Vice President - Finance and Chief
Financial Officer (Principal
Financial Officer)
/s/ Timothy G. Howard Date: March 16, 1995
- ------------------------------------
Timothy G. Howard
Vice President - Controller
(Principal Accounting Officer)
/s/ Thomas D. Gleason Date: February 17, 1995
- ------------------------------------
Thomas D. Gleason, Director
/s/ William K. Hall Date: February 17, 1995
- ------------------------------------
William K. Hall, Director
/s/ Stephen P. Huffman Date: February 17, 1995
- ------------------------------------
Stephen P. Huffman, Director
/s/ Linda B. Keene Date: February 17, 1995
- ------------------------------------
Linda B. Keene, Director
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15
/s/ Jack D. Michaels Date: February 17, 1995
- -----------------------------------
Jack D. Michaels, Director
/s/ Donald K. Miller Date: February 17, 1995
- -----------------------------------
Donald K. Miller, Director
/s/ James F. Robeson Date: February 17, 1995
- -----------------------------------
James F. Robeson, Director
/s/ Boake A. Sells Date: February 17, 1995
- -----------------------------------
Boake A. Sells, Director
/s/ Geoffrey W. Smith Date: February 17, 1995
- -----------------------------------
Geoffrey W. Smith, Director
/s/ Robin B. Smith Date: February 17, 1995
- -----------------------------------
Robin B. Smith, Director
/s/ Fred G. Wall Date: February 17, 1995
- -----------------------------------
Fred G. Wall, Director
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16
INDEPENDENT AUDITORS' REPORT
----------------------------
ON FINANCIAL STATEMENT SCHEDULE
-------------------------------
The Board of Directors,
Huffy Corporation:
Under date of February 17, 1995, we reported on the consolidated balance sheets
of Huffy Corporation and subsidiaries as of December 31, 1994, and 1993, and
the related consolidated statements of operations, shareholders' equity, and
cash flows for each of the years in the three-year period ended December 31,
1994, as contained in the 1994 Annual Report to Shareholders. These
consolidated financial statements and our report thereon are incorporated by
reference in the Annual Report on Form 10-K for the year 1994. In connection
with our audits of the aforementioned consolidated financial statements, we
also have audited the related financial statement schedule as listed in Part
IV, Item 14(a)(2) of Form 10-K. The financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express
an opinion on the financial statement schedule based on our audits.
In our opinion, such financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.
/s/ KPMG PEAT MARWICK LLP
Cincinnati, Ohio
February 17, 1995
-------------
INDEPENDENT AUDITORS' CONSENT
-----------------------------
The Board of Directors,
Huffy Corporation:
We consent to the incorporation by reference in the Registration Statements,
and the Prospectuses constituting part thereof, of (i) the Form S-8
Registration Statement (No. 2-95128) pertaining to the 1984 Stock Option Plan;
(ii) the Form S-8 Registration Statement (No. 33-25487) pertaining to the 1988
Stock Option Plan and Restricted Share Plan; (iii) the Form S-8 Registration
Statement (No. 33-25143) pertaining to the 1987 Director Stock Option Plan;
(iv) the Form S-8 Registration Statement (Nos. 33-28811, 33-42724) pertaining to
the 1989 Employee Stock Purchase Plan; (v) the Form S-8 Registration Statement
(No. 33-44571) pertaining to five company savings plans and (vi) the Form S-8
Registration Statement (No. 33-60900) pertaining to the W.I.S. Savings Plan of
our report dated February 17, 1995, relating to the consolidated balance sheets
of Huffy Corporation and subsidiaries as of December 31, 1994 and 1993 and the
related consolidated statements of operations, shareholders' equity, and cash
flows for each of the years in the three-year period ended December 31, 1994,
which report appears in the 1994 Annual Report to Shareholders, which is
incorporated by reference in the Company's 1994 Annual Report on Form 10-K and
our report dated February 17, 1995 relating to the financial statement schedule
for each of the years in the three-year period ended December 31, 1994, which
report appears in the Company's 1994 Annual Report on Form 10-K.
/s/ KPMG PEAT MARWICK LLP
Cincinnati, Ohio
March 15, 1995
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17
HUFFY CORPORATION
CONSOLIDATED FINANCIAL STATEMENT SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
(DOLLAR AMOUNTS IN THOUSANDS)
BALANCE AT ADDITIONS CHARGED BALANCE
BEGINNING TO COSTS AND DEDUCTIONS AT END
OF PERIOD EXPENSES (NOTE) OF PERIOD
--------- ----------------- ---------- ---------
Reserves deducted from assets to which they apply:
Allowance for doubtful accounts:
Year ended December 31, 1994 $2,382 - (599) 1,783
Year ended December 31, 1993 $2,208 1,921 (1,747) 2,382
Year ended December 31, 1992 $4,941 1,034 (3,767) 2,208
Inventory obsolescence:
Year ended December 31, 1994 $6,171 2,083 (5,411) 2,843
Year ended December 31, 1993 $1,108 7,430[1] (2,367) 6,171[1]
Year ended December 31, 1992 $1,227 999 (1,118) 1,108
Reserves which support the balance sheet
caption, Reserves
Restructuring Reserve:
Year ended December 31, 1994 $9,296 - (7,263) 2,033
Year ended December 31, 1993 -0- 9,296[2] - 9,296
<FN>
Note: Represents accounts written off, less recoveries.
(1) Includes $4,080 of charges for estimated obsolete inventory as a result of
the decision to restructure the Company's lawn and garden tools business.
(2) Represents estimated charges relating to the restructuring of the Company's
lawn and garden tools business.
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18
INDEX TO EXHIBITS
-----------------
Exhibit Form 10-K
No. Exhibit
- -------- ------------------------------------------------------------------------------------ ---------
3.a Amended Articles of Incorporation, dated January 31, 1994 ***
3.b Code of Regulations, as amended, dated April 24, 1987, incorporated by reference to *
Exhibit (3)(b) to Form 10-K for the fiscal year ended December 31, 1987
4.a Specimen Common Stock Certificate of Huffy Corporation, incorporated by reference to *
Exhibit (4)(a) to Form 10-K for the fiscal year ended December 31, 1991
4.b Note Purchase Agreement, dated June 24, 1988, among Huffy Corporation, The Prudential *
Insurance Company of America and Pruco Life Insurance Company, incorporated by
reference to Exhibit (4) to Form 10-Q for the fiscal quarter ended June 30, 1988
4.c Amendment, dated as of December 20, 1993, to Note Purchase Agreement, dated June 24, *
1988, among Huffy Corporation, The Prudential Insurance Company of America and Pruco
Life Insurance Company, incorporated by reference to Exhibit (4)(c) to Form 10-K for
the fiscal year ended December 31, 1993
4.d Rights Agreement, dated as of December 16, 1988, between Huffy Corporation and Bank *
One, Indianapolis, National Association, incorporated by reference to Exhibit (4)(n)
to Form 10-K for the fiscal year ended December 31, 1988
4.e Amendment, dated as of August 23, 1991, to Rights Agreement, dated as of December *
16, 1988, between Huffy Corporation and Bank One, Indianapolis, National Association,
incorporated by reference to Form 8-K, dated August 23, 1991
4.f Amendment, dated as of December 9, 1994, to Rights Agreement, dated as of December *
16, 1988, as amended August 23, 1991, between Huffy Corporation and Bank One,
Indianapolis, National Association, incorporated by reference to Form 8-K, dated
December 22, 1994
4.g Note Agreement, dated as of December 1, 1990, among Huffy Corporation and Nationwide *
Life Insurance Company, Employees Life Insurance Company of Wausaw and Financial
Horizons Life Insurance Company in connection with the issuance and sale of
$30,000,000 Huffy Corporation 9.62% Senior Notes, Series A, due December 1, 2000,
incorporated by reference to Exhibit (4)(j) to Form 10-K for the fiscal year ended
December 31, 1990
* Indicates that the exhibit is incorporated by reference into this Annual Report on Form 10-K
from a previous filing with the Commission.
*** Indicates that the exhibit is included as part of this Annual Report on Form 10-K for the
year ended December 31, 1994.
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19
4.h Credit Agreement, dated as of April 21, 1992, among Huffy Corporation, Bank One, *
Dayton, N.A., NBD Bank, N.A., Security Pacific National Bank, and Society National Bank,
individually and as agent, in connection with revolving loans up to an aggregate
amount of $50,000,000 to Huffy Corporation, incorporated by reference to Exhibit (4)(g)
to Form 10-K for the fiscal year ended December 31, 1992
10.a Lease, effective as of October 29, 1992, between SELCO Service Corporation and Gerry *
Baby Products Company, incorporated by reference to Exhibit (10)(b) to Form 10-K for
the fiscal year ended December 31, 1992
10.b Lease, effective as of December 29, 1993, between SELCO Service Corporation and Huffy *
Corporation, incorporated by reference to Exhibit (10)(c) to Form 10-K for the fiscal
year ended December 31, 1993
10.c Special Deferred Compensation Agreements, as amended, between Huffy Corporation and *
certain of its officers and key employees, in substantially the forms incorporated by
reference to Exhibit (ix) to Form 10-K for the fiscal year ended June 24, 1977, to
Exhibit (2) to Form 10-Q for the fiscal quarter ended September 23, 1983, and to
Exhibit (19)(c) to Form 10-Q for the fiscal quarter ended September 30, 1986
10.d Deferred Compensation Agreements, as amended, between Huffy Corporation and certain of *
its officers and key employees, in substantially the forms incorporated by reference to
Exhibit (vi) to Form 10-K for the fiscal year ended June 29, 1979, and to Exhibit (3)
to Form 10-Q for the fiscal quarter ended September 23, 1983
10.e Deferred Compensation Agreement For Director, as amended, between Huffy Corporation and *
certain of its directors, in substantially the forms incorporated by reference to
Exhibit (x) to Form 10-K for the fiscal year ended June 27, 1980, as amended, and to
Exhibit (1) to Form 10-Q for the fiscal quarter ended September 23, 1983
10.f Form of Amendment to Deferred Compensation Agreement For Director, as amended, dated as *
of April 30, 1991, between Huffy Corporation and a director, incorporated by reference
to Exhibit (10)(o) to Form 10-K for the fiscal year ended December 31, 1991
10.g Form of Deferred Compensation Agreement for Director, incorporated by reference to *
Exhibit (10)(p) to Form 10-K for the fiscal year ended December 31, 1991
10.h Severance Pay Agreements, between Huffy Corporation and certain of its officers, *
as amended, in substantially the forms incorporated by reference to Exhibit (xi) to
Form 10-K for the fiscal year ended June 27, 1980, and to Exhibit 10(n) to Form 10-K
for the fiscal year ended June 26, 1981
* Indicates that the exhibit is incorporated by reference into this Annual Report on Form 10-K
from a previous filing with the Commission.
*** Indicates that the exhibit is included as part of this Annual Report on Form 10-K for the
year ended December 31, 1994.
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20
10.i Severance Pay Agreements, dated June 30, 1986, between Huffy Corporation and certain *
of its officers, in substantially the form incorporated by reference to Exhibit (19)(a)
to Form 10-Q for the fiscal quarter ended June 30, 1986
10.j Description of Executive Medical Reimbursement Plan between Huffy Corporation and *
certain executive officers and key employees, incorporated by reference to Exhibit
(10)(n) to Form 10-K for the fiscal year ended December 31, 1989
10.k Long Term Incentive Compensation Program ***
10.l Huffy Corporation 1984 Stock Option Plan, as amended, incorporated by reference *
to Exhibit A to the Company's Proxy Statement, dated September 13, 1984, for the
Annual Meeting of Shareholders held October 19, 1984, and to Exhibit B to the
Company's Proxy Statement, dated March 13, 1992, for the Annual Meeting of
Shareholders held April 24, 1992
10.m Huffy Corporation Capital Accumulation Plan Participation Agreement, between Huffy *
Corporation and certain of its officers, in substantially the forms incorporated
by reference to Exhibit (19)(a) to Form 10-Q for the fiscal quarter ended
September 30, 1985, and to Exhibit 19(b) to Form 10-Q for the fiscal quarter ended
September 30, 1986
10.n Huffy Corporation Capital Accumulation Program Participation Agreement, between *
Huffy Corporation and certain of its directors, in substantially the forms
incorporated by reference to Exhibit (19)(b) to Form 10-Q for the fiscal quarter
ended September 30, 1985, and to Exhibit 19(b) to Form 10-Q for the fiscal quarter
ended June 30, 1986
10.o Huffy Corporation 1993 CEO Long-Term Performance Plan, effective as of January 1, *
1993, between Huffy Corporation and Richard L. Molen, incorporated by reference to
Exhibit (10) to Form 10-Q for the fiscal quarter ended June 30, 1993
10.p Description of supplemental group life insurance arrangement between Huffy *
Corporation and certain officers and key employees, incorporated by reference to
Exhibit (10)(aa) to Form 10-K for the fiscal year ended December 31, 1991
10.q Description of financial planning and tax preparation services between Huffy *
Corporation and certain officers and key employees, incorporated by reference
to Exhibit (10)(dd) to Form 10-K for the fiscal year ended December 31, 1993
10.r Profit Sharing Bonus Plan of Huffy Corporation for 1994 ***
* Indicates that the exhibit is incorporated by reference into this Annual Report on Form 10-K
from a previous filing with the Commission.
*** Indicates that the exhibit is included as part of this Annual Report on Form 10-K for the
year ended December 31, 1994.
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21
10.s 1987 Restricted Stock Unit Agreement, dated as of January 1, 1987, between Huffy *
Corporation and Richard L. Molen, incorporated by reference to Exhibit (10)(dd)
to Form 10-K for the fiscal year ended December 31, 1991
10.t Amendment No. 1 to 1987 Restricted Stock Unit Agreement dated July 12, 1988, *
between Huffy Corporation and Richard L. Molen, incorporated by reference to
Exhibit (10)(cc) to Form 10-K for the fiscal year ended December 31, 1988
10.u Amendment No. 2 to 1987 Restricted Stock Unit Agreement, dated as of April 30, 1991, *
between Huffy Corporation and Richard L. Molen, incorporated by reference to Exhibit
(10)(ff) to Form 10-K for the fiscal year ended December 31, 1991
10.v Amendment No. 3 to 1987 Restricted Stock Unit Agreement dated as of July 12, 1991, *
between Huffy Corporation and Richard L. Molen, incorporated by reference to Exhibit
(10)(gg) to Form 10-K for the fiscal year ended December 31, 1991
10.w Supplemental/Excess Benefit Plan, dated as of January 1, 1988, incorporated by *
reference to Exhibit (10)(aa) to Form 10-K for the fiscal year ended December 31, 1987
10.x First Amendment to Huffy Corporation Supplemental/Excess Benefit Plan, effective *
as of January 1, 1988, incorporated by reference to Exhibit (10)(ee) to Form 10-K for
the fiscal year ended December 31, 1990
10.y Second Amendment to Huffy Corporation Supplemental/Excess Benefit Plan, dated as of ***
June 30, 1991
10.z Third Amendment to Huffy Corporation Supplemental/Excess Benefit Plan, dated as of ***
June 27, 1994
10.aa Huffy Corporation Master Benefit Trust Agreement, dated October 1, 1987, between *
Huffy Corporation and Bank One, Dayton, National Association, incorporated by reference
to Exhibit (10)(bb) to Form 10-K for the fiscal year ended December 31, 1987
10.bb Huffy Corporation Second Master Benefit Trust Agreement, dated as of January 1, 1988, *
between Huffy Corporation and Bank One, Dayton, National Association, incorporated by
reference to Exhibit (10)(cc) to Form 10-K for the fiscal year ended December 31, 1987
10.cc Form of First Amendment to Huffy Corporation Second Master Benefit Trust Agreement, *
effective as of January 1, 1988, incorporated by reference to Exhibit (10)(hh) to
Form 10-K for the fiscal year ended December 31, 1990
10.dd Huffy Corporation 1987 Director Stock Option Plan, incorporated by reference to *
Exhibit 19(a) to Form 10-Q for the fiscal quarter ended June 30, 1988
* Indicates that the exhibit is incorporated by reference into this Annual Report on Form 10-K
from a previous filing with the Commission.
*** Indicates that the exhibit is included as part of this Annual Report on Form 10-K for the
year ended December 31, 1994.
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22
10.ee First Amendment to Huffy Corporation 1987 Director Stock Option Plan, effective as *
of April 30, 1991, incorporated by reference to Exhibit (10)(nn) to Form 10-K for
the fiscal year ended December 31, 1991
10.ff Second Amendment to Huffy Corporation 1987 Director Stock Option Plan, effective *
as of December 15, 1991, incorporated by reference to Exhibit (10)(oo) to Form 10-K
for the fiscal year ended December 31, 1991
10.gg Huffy Corporation 1988 Stock Option Plan and Restricted Share Plan, as amended, *
incorporated by reference to Exhibit 19(b) to Form 10-Q for the fiscal quarter ended
June 30, 1988, and to Exhibit A to the Company's Proxy Statement dated March 13,
1992 for the Annual Meeting of Shareholders held April 24, 1992
10.hh Huffy Corporation 1990 Directors' Retirement Plan incorporated by reference to *
Exhibit (10)(qq) to Form 10-K for the fiscal year ended December 31, 1991
10.ii Description of Huffy Corporation Executive Automobile Policy ***
OTHER FILINGS
- -------------
13 Certain sections of the Annual Report to Shareholders for fiscal year ended ***
December 31, 1994
19 Schedule of certain documents substantially identical to filed documents with ***
parties thereto and other material differing details
22 List of all direct and indirect Subsidiaries of the registrant:
Jurisdiction in
Name of Subsidiary which Incorporated
------------------ ------------------
Gerry Baby Products Company Delaware
Huffy FSC, Inc. Virgin Islands
Huffy International Finance, N.V. Netherland Antilles
Huffy Service First, Inc. Ohio
Gerry Wood Products Company Wisconsin
Snugli-Canada, Ltd. British Columbia, Canada
The Huffman Manufacturing Company Ohio
True Temper Hardware Company Ohio
Washington Inventory Service California
27 Financial Data Schedule ***
<FN>
* Indicates that the exhibit is incorporated by reference into this Annual Report on Form
10-K from a previous filing with the Commission.
*** Indicates that the exhibit is included as part of this Annual Report on Form 10-K for the
year ended December 31, 1994.
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