UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED JUNE 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EX-CHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________________ to ____________________
Commission file number 0-9010
ROBINSON NUGENT, INC.
---------------------
(Exact name of registrant as specified in its charter)
Indiana 35-0957603
------- ----------
(State or other jurisdiction of (I.R.S. Employer
organization or incorporation) Identification Number)
800 East Eighth Street, New Albany, Indiana 47151-1208
- ------------------------------------------- ----------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (812) 945-0211
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Shares, Common Share
Without Par Value Purchase Rights
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
----- --------
The aggregate market value of Common Shares held by nonaffiliates of the
registrant, based on the closing price of the Common Shares as of September
15, 1998, was approximately $19,000,000.
As of September 15, 1998, the registrant had outstanding 4,891,765
Common Shares, without par value.
1
DOCUMENTS INCORPORATED BY REFERENCE:
PARTS OF FORM 10-K INTO WHICH
IDENTITY OF DOCUMENT DOCUMENT IS INCORPORATED
1998 Annual Report to Shareholders Parts I and II
Definitive Proxy Statement with respect to Parts II and III
the 1998 Annual Meeting of Shareholders
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. [ ]
2
PART I
ITEM 1. BUSINESS
GENERAL
Robinson Nugent, Inc. (the "Company"), an Indiana corporation organized
in 1955, designs, manufactures and markets electronic devices used to
interconnect components of electronic systems. The Company's principal
products are integrated circuit sockets; connectors used in board-to-board,
wire-to-board, and wire-to-wire applications; and custom molded-on cable
assemblies. The Company also offers application tooling that is used in
applying wire and cable to its connectors.
The Company's products are used in electronic telecommunication
equipment including switching and networking equipment such as servers and
routers, modems and PBX stations; data processing equipment such as mainframe
computers, personal computers, workstations, CAD systems and peripheral
equipment such as printers, disk drives, plotters and point-of-sale
terminals; industrial controls and electronic instruments, both medical and
industrial; consumer products; automotive electronics; and in a variety of
other applications.
Major markets are the United States, Europe, Japan, and the Southeast
Asian countries including Singapore and Malaysia. Manufacturing facilities
are located in New Albany, Indiana; Dallas, Texas; Kings Mountain, North
Carolina; Fremont, California; Reynosa, Mexico; Delemont, Switzerland; Sungai
Petani, Malaysia; Inchinnan, Scotland; and Hamont-Achel, Belgium.
Corporate headquarters are located in New Albany, Indiana, which also is
the site for the Company's corporate engineering, research and development,
preproduction and testing of new products. International headquarters are
located in s-Hertogenbosch, Netherlands; Singapore; and Tokyo, Japan.
RECENT DEVELOPMENTS
In fiscal 1998, management approved plans to move the Company's cable
assembly facility in Kings Mountain, North Carolina to Reynosa, Mexico;
reorganize the sales, management and manufacturing organizations in Europe
and North America; and discontinue several product lines. These actions
resulted in restructuring charges of approximately $3.1 million, which were
recorded in 1998. These costs include a liability related to the existing
lease on the Kings Mountain facility, which expires in July 2012, and
severance costs related to the plant closure. Most of the cost to relocate
these operations to Reynosa will be expensed in fiscal 1999. The Company
began manufacturing cable assemblies in the new, leased facility in Reynosa
in September 1998. The move of the Company's cable assembly operations to
Reynosa, and the closure of the Kings Mountain operations are expected to
reduce future manufacturing costs.
In addition to the restructuring costs related to the move of cable
assembly operations in 1998, management also approved and implemented plans
related to the reorganization of the European sales and manufacturing
3
organizations, as well as the connector manufacturing operations in North
America. The sales office facilities in France, Italy and Spain have been
closed, and the European customer service operation has been consolidated
into the Company's European headquarters, located in the Netherlands. The
restructuring of the European and North American connector operations have
resulted in workforce reductions, including factory and management personnel,
of approximately 15%.
PRODUCTS
The Company produces a broad range of sockets that accommodate a variety
of integrated circuit package styles. Sockets are offered for dual-in-line
package (DIP) and pin grid array (PGA) devices, as well as plastic leaded and
leadless chip carriers (PLCC).
Sockets are used in a wide variety of applications within electronic
equipment, but are primarily used to interface integrated circuits, such as
microprocessors and memory devices, to an electronic printed circuit board
(PCB). In many applications, semiconductor devices have been subject to
replacement, which encouraged the use of a socket rather than soldering the
device directly to the printed circuit board. But, due to the improved
reliability of semiconductor technology, more and more semiconductor chips
are being soldered directly to PCB's. This trend will continue to reduce the
worldwide demand for sockets.
Dual in-line memory module (DIMM) sockets were introduced in fiscal 1992
and were designed to interconnect dual in-line memory modules with electronic
printed circuit boards. During 1996, the industry acceptance of this
technology resulted in a migration of DIMM products from being customer
specific design components, to become a standardized component. The enlarged
worldwide market volume has resulted in increased competition and rapid price
erosion. The Company introduced a lower cost version of this DIMM product
line in an attempt to be more competitive at the lower market prices. During
1998, the Company decided to phase out certain models of the low-cost version
of this product line because increased offshore competition had resulted in
unacceptable profit margins.
In addition to DIMM sockets, the Company offers several other products
that interconnect memory devices to electronic printed circuit boards. These
include small outline dual in-line memory module sockets (SO-DIMM) and PCMCIA
memory card headers, sockets and type III PC card kits.
The Company provides a broad range of electronic connectors, such as
insulation displacement flat cable connectors (IDC), used in cable-to-cable
and cable-to-board applications. The use of insulation displacement
connectors in electronic hardware increases productivity by eliminating the
labor involved in stripping insulation from wires prior to attachment to the
leads. This technology permits the automated manufacturing of cable
assemblies. The range of connectors also includes several product styles
that provide for board-to-board or board-stacking (parallel-mounting)
applications.
The Company offers several product families in the two-piece style of
connectors. These connectors are used to connect printed circuit boards which
are positioned either at right angles, in-line, or parallel stacked at close
4
intervals. The products offered include .025 inch square post connectors and
receptacle sockets; DIN series connectors; high-density, high-pin-count
connectors (HDC); half-pitch, high-density (RN PAK-50-Registered Trademark-)
connectors; and a higher pin count 2-millimeter-spaced connector
(METPAK-Registered Trademark-2) used in backplane applications. In addition,
a line of high density .8mm (RN PAK 8-TM-) and .5mm (RN PAK 5-TM-) board
stacking interconnects are offered by the Company to address the growing
demand for miniaturized connectors in the portable computer and communication
equipment markets.
The DIN series of connectors has many variations in connecting
configurations and pin count. The product is based on a European standard,
but has gained wide acceptance in the U.S. and other markets worldwide.
While there are a large number of producers of DIN connectors in Europe, the
Company is one of a limited number of manufacturers producing the product in
the U.S.
The high-pin-count, high-density connector (HDC) includes pin counts
ranging from 60 to 492 in a three- and four-row configuration. This
connector family, along with DIN connectors, is widely used on backplane
applications and frequently requires the terminals to be press-fit to the
backplane. This is accomplished by forming a compliant section in the tails
of the connector contacts that, when pressed into a plated through-hole on a
backplane, forms a reliable gas-tight connection. The Company has become
recognized as a leader in press-fit backplane connectors and has focused
marketing efforts in promoting its products for this type of application.
The Company's half-pitch (PAK-50) connector family has been accepted as
one of the industry's most reliable .050 inch spaced connectors. The contact
design and compact shape has gained wide acceptance in applications, such as
small form factor computers that require connectors that are highly reliable
yet consume little space.
The METPAK-Registered Trademark-2 series of connectors includes four and
five row versions of both standard and inverse configurations. The
METPAK-Registered Trademark-2 is an industry standard connector style used in
board-to-board and board-to-back plane applications and over time will
displace some of the more mature product types such as the DIN series and HDC
connectors. This product line has wide acceptance in new designs, primarily
in the computer workstation, communication and networking markets. The
inverse METPAK-Registered Trademark-2 is a Company patented design which has
gained acceptance in mid-range computer, networking and communications
equipment.
PAK-5-TM- and PAK-8-TM- represent the newest high density, surface mount,
fine pitch board-to-board interconnect systems offered by the Company. As
electronic systems continue to downsize and the need for higher pin counts
continues to increase, electronic interconnect manufacturers are forced to
shrink connector geometry. The PAK-5-TM- series is available with a
"floating" contact, accommodating potential torsional and positional
discrepancies incurred with tolerance build up when stacking connectors. The
PAK-8-TM- series utilizes a hermaphroditic two-point contact construction
that maximizes contact wiping action, minimizes contact resistance and
insures a highly reliable contact interface. This connector series is
available in sizes ranging from 16 position to 100 position product and in
stacking heights ranging from 3mm to 11.5mm. These interconnects offer system
designers the board-to-board
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stacking solutions required for today's miniaturized electronic system
designs.
Technology continues to move the industry to an ever-increasing number
of circuits per socket or connector to meet the increasing complexity,
capacity and processing speed of electronic and semiconductor devices. This
trend has caused increased demand for all types of high-density connector
products. The Company is focusing its new product development in socket and
connector products that meet these technology trends.
Customers expect connector manufacturers to provide special tools
required to utilize sockets and connectors. The Company offers a line of
insertion and extraction tools in support of the socket, IDC, input/output
(I/O), and two-piece connector lines.
Cablelink, Incorporated, a wholly-owned subsidiary of the Company,
produces cable assemblies of various types including IDC, fabricated and
molded-on cable assemblies. Cablelink utilizes Robinson Nugent connectors
whenever possible, but also provides cable assemblies with other
manufacturers' connectors if the customer is specific regarding its
requirements.
In addition to standard products, the Company provides engineering
assistance, product design, and manufacturing of custom and derivative
products. These products may require special production tooling that, in some
cases, is paid for by the customer, shared, or amortized over future orders,
depending upon contractual agreements reached with the customer. In some
cases, the customer supplies the Company with a complete product design, but
more often the design is produced solely by Company engineers. Current
trends in the market indicate a growing demand for custom and derivative
products. There is also an increased demand for the Company's engineers to
be involved in the early development of the customer's product design.
RESEARCH, DEVELOPMENT AND ENGINEERING
The Company's worldwide engineering efforts are directed toward the
development of new products to meet customer needs, the improvement of
manufacturing processes and the adaptation of new materials to all products.
New products include new creations as well as the design of derivative
products to meet both the needs of the general market and customer
proprietary custom designs. Engineering development covers new or improved
manufacturing processes, assembly and inspection equipment, and the
adaptation of new plastics and metals to all products. In recent years, the
Company's products have become more sophisticated and complex in response to
developments in semiconductors and their applications. The Company has the
engineering capability to analyze customer designed, high-speed applications
and to design connectors that reduce electrical interference that can result
from very high processing speeds of newer and more powerful microprocessors.
The Company's expenditures for research, development and engineering
were approximately $4.0 million in 1998, $3.4 million in 1997, and $3.7
million in 1996.
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Consistent with industry direction, the Company is active in improving
manufacturing processes through automation and also designs and builds its
proprietary assembly equipment. The Company continues to apply advanced
technologies, such as laser and video devices, to automatically inspect
products during the assembly process. All new assembly machines are direct
microcomputer-controlled, which provides greater flexibility in the
manufacturing process. The Company continues to incorporate the latest
technology in its high-speed precision stamping and electroplating processes,
and has replaced older injection molding machines and material handling
equipment with new machines and equipment that will improve the productivity
of these operations.
SALES AND DISTRIBUTION
The Company sells its products in the United States and international
markets. The primary market is the United States, which produces
approximately two-thirds of the consolidated sales of the Company. Its
principal markets outside the United States are Europe, including the United
Kingdom and Scandinavia, Japan, Singapore, Malaysia, Hong Kong, and the
emerging market of China. Sales to other Far East countries provide business
opportunities and are expected to grow moderately. Sales in China have been
initiated and have resulted in the Company doing business in China through
its Hong Kong distributor.
Sales outside the United States accounted for 36 percent of total sales
in 1998, 38 percent in 1997 and 36 percent in 1996. The Company believes
that the development of global markets is essential to support its customer
base. This was particularly the case in Asia, where until recently the market
was considered the fastest growing in the world. It is still currently
considered the second largest market for electronics and connector products.
The Company does not believe that its international business presents any
unusual risks. The recent currency crisis in Asia had an impact on the
company's operating results in the year. While sales in Japan were
unfavorably impacted by the strengthening of the U.S. dollar against the
Japanese yen, operating results in Southeast Asia were affected favorably due
to the fact that most of the Company's sales to customers in Southeast Asia
are transacted in U.S. dollars. These sales were not significantly affected
by the currency crisis. Cost of sales and operating expenses in Southeast
Asia were lower in the period due primarily to the devaluation of the
Malaysian ringgit and the Singapore dollar, compared to the U.S. dollar. The
following table sets forth the percentage of Company sales by major
geographical location for the periods shown:
YEARS ENDED JUNE 30
----------------------------------
1998 1997 1996
----------------------------------
United States 64% 62% 64%
Europe 25 26 24
Asia 9 10 10
Other 2 2 2
---- ---- ---
100% 100% 100%
---- ---- ---
---- ---- ---
No sales to a single customer exceeded 10% of total net sales in 1998,
1997 or 1996.
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Other financial data relating to domestic and foreign operations are
included in Note (16), Business Segment and Foreign Sales, of Notes to
Consolidated Financial Statements and the Management's Discussion and
Analysis of the Results of Operations and Financial Condition, included
herein or incorporated by reference as a part of this Report.
Principal markets in North America, Europe, and Asia are served by the
Company's direct sales force and a network of distributors serving the
electronics industry. The Company has U.S. regional offices located in the
San Francisco, California and Chicago, Illinois metropolitan areas. Other
Company sales offices are located in Japan, Singapore, England, Germany,
Sweden, and Netherlands. These offices service customers to whom the Company
sells directly, provide coordination between the plants and customers, and
technical training and assistance to distributors and manufacturers'
representatives in their respective territories. Additional marketing
expertise is provided by the product marketing specialists located in New
Albany, Indiana; Kings Mountain, North Carolina; Kent, England; Singapore;
and s.Hertogenbosch, Netherlands.
The Company engages independent manufacturers' representative firms in
the United States, Canada and several European and Far East countries. These
firms are granted exclusive territories and agree not to carry competing
products. These firms are paid on a commission basis on sales made to
original equipment manufacturers and to distributors. All representative
relationships are subject to termination by either party on short notice.
The Company has an international network of distributors who are
responsible for serving their respective customers from an inventory of the
Company's products. Approximately one-third of the Company's worldwide sales
are made through the distributor network. No distributor is required to
accept only the franchise of the Company. All distributor agreements are
subject to termination by either party on short notice.
BACKLOG
The Company's backlog was approximately $10.2 million at June 30, 1998,
$14.5 million at June 30, 1997, and $15.9 million at June 30, 1996. These
amounts represent orders with firm shipment dates acceptable to the
customers. The Company does not manufacture pursuant to long-term contracts,
and purchase orders are generally cancelable subject to payment by the
customer for charges incurred up to the date of cancellation. With
just-in-time delivery objectives, customers have reduced order quantities,
but are placing orders more frequently and expecting shorter lead times from
point of order to point of shipment.
COMPETITION
There is active competition in all of the Company's standard product
lines. The Company's competitors include both large corporations having
significantly more resources than the Company and smaller, highly specialized
firms. The Company competes on the basis of customer service, product
performance, quality, and price. Worldwide price erosion continued in a
variety of the Company's product lines, reflecting a migration of some
8
products to a commodity category, and the leveraging of higher volume
purchases. Management believes that the Company's capabilities in customer
service, new product design and its continued efforts to reduce cost of
products are significant factors in maintaining the Company's competitive
position.
MANUFACTURING
The Company's manufacturing operations include plastic molding,
high-speed precision stamping, electroplating and assembly. The Company
designs and builds the majority of its automated and semi-automated assembly
machines for use in-house and utilizes subcontractors on a limited basis for
product assembly where volume does not warrant the cost of automation.
RAW MATERIALS AND SUPPLIES
The Company utilizes copper alloys, precious metals, and plastics in the
manufacture of its products. Although some raw materials are available from
only a few suppliers, the Company believes it has adequate sources of supply
for its raw material and component requirements. Raw material prices did not
increase or decrease materially during fiscal year 1998.
Use of gold is significant, but has declined in demand over the past
several years. Plating processes using ROBEX-TM-, a palladium nickel alloy,
and tin have accelerated in demand from customers of the Company. As a
result of a gold consignment agreement with a bank, the Company is not
exposed to a significant market risk of carrying gold inventories. The
Company is not required to procure its gold under this arrangement, and may
acquire gold from other sources. The Company is not obligated beyond one
year with any supplier.
HUMAN RESOURCES
As of June 30, 1998, the Company had approximately 674 full-time
employees; 370 in the United States, 177 in Europe and 127 in Asia and Japan.
PATENTS AND TRADEMARKS
Management believes that success in the electronic connector industry is
dependent upon engineering and production skills and marketing ability;
however, there is a trend in the industry toward more patent consideration
and protection of proprietary designs and knowledge. The Company has pursued
patent applications frequently. The Company reviews each new product design
for possible patent application. The Company has been granted several
patents over the past three years and is presently awaiting acceptance on
other pending applications. The Company has obtained registration of its
trade and service marks in the United States and in major foreign markets.
ENVIRONMENT
The Company's manufacturing facilities are subject to several laws and
regulations designed to protect the environment. In the opinion of
management, the Company is complying with those laws and regulations in all
9
material respects and compliance has not had and is not expected to have a
material effect upon its operations or competitive position.
EXECUTIVE OFFICERS OF THE COMPANY
The current executive officers of the Company are:
SERVED IN PRESENT
NAME AGE POSITIONS HELD CAPACITY SINCE
- ------------------ --- -------------- -----------------
Larry W. Burke 58 President & Chief 1990
Executive Officer
Robert L. Knabel 40 Vice President, January 1997
Treasurer & Chief
Financial Officer
W. Michael Coutu 47 Vice President of 1992
Information Technology
Robert A. Rankin 37 Executive Director of 1998
Global Purchasing
The Bylaws of the Company provide that the officers are to be elected at
each Annual Meeting of the Board of Directors. Under the Indiana Business
Corporation Law, officers may be removed by the Board of Directors at any
time, with or without cause. Mr. David W. Pheteplace, Vice President and
General Manager, North American Business Division, resigned as of April 1998.
ITEM 2. PROPERTIES
The Company owns a 36,000-square-foot building used for its executive
offices, engineering department, quality assurance and administrative
operations, and an adjacent 83,000-square-foot manufacturing facility located
on approximately four acres in New Albany, Indiana. A limited amount of
manufacturing operations are performed there. Most of the connector finished
goods inventory is held at the New Albany site. A portion of the New Albany
manufacturing facility is utilized by the Company's engineering, research and
preproduction development groups. In addition, the New Albany facility is
instrumental in training plant personnel on new equipment prior to release to
the manufacturing facilities in Dallas, Europe and Malaysia.
The Company owns a 60,000-square-foot manufacturing facility located on
approximately five acres in Dallas, Texas; a manufacturing and engineering
facility with approximately 14,000 square feet in Hamont-Achel, Belgium; a
manufacturing facility with approximately 21,000 square feet in Sungai
Petani, Malaysia; and utilizes a facility with approximately 50,000 square
feet in Inchinnan, Scotland under long-term leases.
The Company also owns a 50,000 square foot manufacturing facility
located on approximately two acres in Delemont, Switzerland. In June 1997,
management approved a plan to move all of its plating and component assembly
10
operations from its plant in Delemont to its facility in Inchinnan, and to
sell the facility in Delemont.
The Company's Cablelink operations are currently located in leased
facilities of approximately 40,000 square feet in Kings Mountain, North
Carolina and approximately 10,000 square feet in Fremont, California. In
June, 1998, a new manufacturing facility with approximately 44,000 square
feet was acquired under a long-term lease arrangement in Reynosa, Mexico.
Management began cable assembly operations in Reynosa in September 1998. All
operations in Kings Mountain, North Carolina are expected to terminate by
December 1998. The Company is currently obligated under a long-term lease on
the Kings Mountain facility through July 2012. Management intends to sublet
this facility to minimize the financial impact of this obligation.
ITEM 3. LEGAL PROCEEDINGS.
Other than ordinary routine litigation incidental to the business, there
are no pending legal proceedings to which the Company is a party.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of security holders of the Company
during the fourth quarter of the fiscal year covered by this report.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The information included under the caption "Price Range and Dividend
Information" of the Company's 1998 Annual Report to Shareholders (the "1998
Report") is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA.
The information contained in the columns "1994-1998" in the table under
the caption "Ten-Year Financial Summary" of the 1998 Report is incorporated
herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND THE
RESULTS OF OPERATIONS.
The information contained under the caption "Management's Discussion and
Analysis of the Results of Operations and Financial Condition" of the 1998
Report is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information contained in the "Consolidated Financial Statements of the
Company and Notes thereto" and the report of independent accountants in the 1998
Report is incorporated herein by reference.
11
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
On April 25, 1997, Robinson Nugent, Inc. (the "Company") advised Coopers
& Lybrand L.L.P. ("Coopers") that the Company was discontinuing Coopers'
services as the Company's independent accountants at the completion of
Coopers' report for the year ending June 30, 1997. The Company engaged
Deloitte & Touche LLP ("Deloitte") as the Company's independent accountants
for the year ended June 30, 1998. The decision to discontinue the services
of Coopers and to engage Deloitte was recommended by the Audit Committee and
approved by the Board of Directors.
Coopers' reports on the financial statements of the Company for the past
two years did not contain any adverse opinion or disclaimer of opinion, nor
were the reports qualified as to uncertainty, audit scope or accounting
principles. There were no disagreements between the Company and Coopers
during the past two years and subsequent interim periods preceding such
dismissal on any matter of accounting principles or practices, financial
statement disclosure, or audit scope or procedure, which disagreement(s), if
not resolved to the satisfaction of Coopers, would have caused it to make a
reference to the subject matter of the disagreement(s) in connection with its
reports.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information included under the captions "Nominees," "Business
Experience of Directors," "Family Relationships," and "Compliance with
Section 16(a) of the Securities Exchange Act of 1934" in the Company's
definitive 1998 Proxy Statement filed pursuant to Rule 14a-6 is incorporated
herein by reference.
ITEM 11. EXECUTIVE COMPENSATION.
The information included under the captions "Compensation of Directors,"
"Compensation Committee Interlocks and Insider Participation," "Executive
Compensation," "Report of the Compensation and Stock Option Committees," and
"Stock Performance Graph" in the Company's definitive 1998 Proxy Statement
filed pursuant to Rule 14a-6 is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information contained under the captions "Beneficial Ownership of
Common Shares" and "Nominees" in the Company's definitive 1998 Proxy
Statement filed pursuant to Rule 14a-6 is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information contained under the caption "Certain Transactions" in
the Company's definitive 1998 Proxy Statement filed pursuant to Rule 14a-6 is
incorporated herein by reference.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) DOCUMENTS FILED AS A PART OF THIS REPORT.
(1) FINANCIAL STATEMENTS
Reports of Independent Accountants
Consolidated Balance Sheets as of June 30, 1998, 1997, and 1996
Consolidated Statements of Operations for the years ended
June 30, 1998, 1997, and 1996
Consolidated Statements of Shareholders' Equity for the years
ended June 30, 1998, 1997, and 1996
Consolidated Statements of Cash Flows for the years ended
June 30, 1998, 1997, and 1996
Notes to Consolidated Financial Statements
(2) FINANCIAL STATEMENT SCHEDULE
Schedule for the years ended June 30, 1998, 1997, and 1996:
II Valuation and Qualifying Accounts
All other schedules are omitted, as the required information is
inapplicable or the information is presented in the consolidated
financial statements or related notes.
(3) EXHIBITS
3.1 Articles of Incorporation of Robinson
Nugent, Inc. (Incorporated by reference
to Exhibit 3.1 to Form S-1 Registration
Statement No. 2-62521.)
3.2 Articles of Amendment of Articles of
Incorporation of Robinson Nugent, Inc.
filed September 1, 1978 (Incorporated by
reference to Exhibit B(1) to Form 10-K
Report for year ended June 30, 1980.)
3.3 Articles of Amendment of Articles of
Incorporation of Robinson Nugent, Inc.
filed November 14, 1983 (Incorporated by
13
reference to Exhibit 3.3 to Form 10-K
Report for year ended June 30, 1984.)
3.4 Amended and Restated Bylaws of Robinson
Nugent, Inc. adopted November 7, 1991.
(Incorporated by reference to Exhibit
19.1 to Form 10-K Report for year ended
June 30, 1992).
4.1 Specimen certificate for Common Shares,
without par value. (Incorporated by
reference to Exhibit 4 to Form S-1
Registration Statement No. 2-62521.)
4.2 Rights Agreement dated April 21, 1988
between Robinson Nugent, Inc. and Bank
One, Indianapolis, NA. (Incorporated
by reference to Exhibit I to Form 8-A
Registration Statement dated May 2, 1988.)
4.3 Amendment No. 1 to Rights Agreement dated
September 26, 1991. (Incorporated by
reference to Exhibit 4.3 to Form 10-K
Report for year ended June 30, 1991.)
4.4 Amendment No. 2 to Rights Agreement dated
June 11, 1992. (Incorporated by reference
to Exhibit 4.4 to Form 8-K Current Report
dated July 6, 1992.)
4.5 Amendment No. 3 to Rights Agreement dated
February 11, 1998 (Incorporated by reference
to Exhibit 4.5 to Form 10-Q Report for the
period ended December 31, 1998.)
10.1 Robinson Nugent, Inc. 1983 Tax-Qualified *
Incentive Stock Option Plan.
(Incorporated by reference to Exhibit
10.1 to Form 10-K Report for year ended
June 30, 1983.)
10.2 Robinson Nugent, Inc. 1983 Non Tax- *
Qualified Incentive Stock Option Plan.
(Incorporated by reference to Exhibit
10.2 to Form 10-K Report for year ended
June 30, 1983.)
10.3 1993 Robinson Nugent, Inc. Employee and *
Non-Employee Director Stock Option Plan.
(Incorporated by reference to Exhibit 19.1
to Form 10-K Report for the year ended
June 30, 1993.)
14
10.4 Summary of The Robinson Nugent, Inc. *
Employee Stock Purchase Plan.
(Incorporated by reference to Exhibit 19.2
to Form 10-K Report for the year ended
June 30, 1993.)
10.5 Deferred compensation agreement dated *
May 10, 1990 between Robinson Nugent,
Inc. and Larry W. Burke, President and
Chief Executive Officer.
(Incorporated by reference to Exhibit
19.1 to Form 10-K Report for year ended
June 30, 1990.)
10.6 Rabbi Trust Agreement dated July 1, 1996 *
between Robinson Nugent, Inc. and Dean
Witter Trust Company, related to the
deferred compensation agreement between
Robinson Nugent, Inc. and Larry W. Burke,
President and Chief Executive Officer.
(Incorporated by reference to Exhibit 10.6 to
Form 10-K Report for year ended June 30, 1997.)
10.7 Amendment of the 1993 Robinson Nugent, Inc. *
Employee and Non-Employee Director Stock
Option Plan.
10.8 Summary of Robinson Nugent, Inc. Bonus *
Plan for the fiscal year ending June 30,
1999.
13.0 1998 Annual Report to Shareholders of
Robinson Nugent, Inc.
16.0 No exhibit.
21.0 The subsidiaries of the registrant are:
JURISDICTION
NAME OF ORGANIZATION
---- ---------------
Cablelink, Incorporated Indiana
RNL, Inc. Indiana
Robinson Nugent-Dallas, Inc. Texas
Robinson Nugent Design Services, Inc. Pennsylvania
Robinson Nugent S.a.r.l. France
15
Robinson Nugent GmbH Germany
Robinson Nugent Ltd. Great Britain
Nihon Robinson Nugent K.K. Japan
Robinson Nugent dba Cablelink Malaysia
(Malaysia) Sdn. Bhd.
Robinson Nugent (Malaysia) Sdn. Bhd. Malaysia
Robinson Nugent S.A. Switzerland
Robinson Nugent (Scotland) Limited Scotland
Robinson Nugent International, Inc. Virgin Islands
Robinson Nugent (Europe) B.V. Netherlands
Robinson Nugent (Belgium) B.V.B.A. Belgium
Robinson Nugent (Asia Pacific) Pte. Ltd. Singapore
Robinson Nugent Nordic, filial Sweden
till Robinson Nugent (Europe) B.V.
The Netherlands
Robinson Nugent S. de R.L. de C.V. Mexico
23.1 Consent of Deloitte & Touche LLP
Independent Auditors
23.2 Consent of PricewaterhouseCoopers LLP
Independent Accountants
27.0 Financial Data Schedule.
* Management contracts or compensatory plans
(b) REPORTS ON FORM 8-K
No exhibit.
16
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.
ROBINSON NUGENT, INC.
Date: 10/15/98 By: /s/ Larry W. Burke
------------------ -----------------------------------
Larry W. Burke, 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.
Date: 10/15/98 By: /s/ Samuel C. Robinson
------------------ -----------------------------------
Samuel C. Robinson, Director
Date: 10/15/98 By: /s/ Larry W. Burke
------------------ -----------------------------------
Larry W. Burke, Director,
President and Chief Executive Officer
(Principal Executive Officer)
Date: 10/15/98 By: /s/ Patrick C. Duffy
------------------ -----------------------------------
Patrick C. Duffy, Director
Date: 10/15/98 By: /s/ Richard L. Mattox
------------------ -----------------------------------
Richard L. Mattox, Director
Date: 10/15/98 By: /s/ Jerrol Z. Miles
------------------ -----------------------------------
Jerrol Z. Miles, Director
Date: 10/15/98 By: /s/ James W. Robinson
------------------ -----------------------------------
James W. Robinson, Director
17
Date: 10/15/98 By: /s/ Richard W. Strain
------------------ -----------------------------------
Richard W. Strain, Director
Date: 10/15/98 By: /s/ Ben M. Streepey
------------------ -----------------------------------
Ben M. Streepey, Director
Date: 10/15/98 By: /s/ Donald C. Neel
------------------ -----------------------------------
Donald C. Neel, Director
Date: 10/15/98 By: /s/ Robert L. Knabel
------------------ -----------------------------------
Robert L. Knabel, Vice President,
Treasurer and Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
18
ROBINSON NUGENT, INC. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENT SCHEDULES
JUNE 30, 1998, 1997, AND 1996
Financial Statement Schedule for the years ended June 30, 1998, 1997, and 1996
is included herein:
II Valuation and Qualifying Accounts
All other schedules are omitted, as the required information is inapplicable or
the information is presented in the consolidated financial statements or related
notes.
19
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
ROBINSON NUGENT, INC. AND SUBSIDIARIES
(IN THOUSANDS OF DOLLARS)
Col. A Col. B Col. C Col. D Col. E
----------- ------------ ------------------------------------- ----------- ------------
Balance Additions Balance
Description at Beginning Charged to Costs Charged to Other Deductions - at End
of Period and Expenses Accounts-Describe Describe of Period
----------- ------------ ------------------------------------- ----------- ------------
YEAR ENDED JUNE 30, 1998
Deducted from asset accts
Allowance for doubtful
accounts $ 564 $ 72 $ -- $ 65(A) $ 571
Allowance for inventory
obsolescence & valuation 1,565 1,212 -- 1,534(B) 1,243
------- ------- ------- ------- -------
Total $ 2,129 $ 1,284 $ -- $ 1,599 $ 1,814
------- ------- ------- ------- -------
------- ------- ------- ------- -------
YEAR ENDED JUNE 30, 1997
Deducted from asset accts
Allowance for doubtful
accounts $ 739 $ 32 $ -- $ 207(A) $ 564
Allowance for inventory
obsolescence & valuation 1,613 1,062 -- 1,110(B) 1,565
------- ------- ------- ------- -------
Total $ 2,352 $ 1,094 $ -- $ 1,317 $ 2,129
------- ------- ------- ------- -------
------- ------- ------- ------- -------
YEAR ENDED JUNE 30, 1996
Deducted from asset accts
Allowance for doubtful
accounts $ 651 $ 205 $ -- $ 117(A) $ 739
Allowance for inventory
obsolescence & valuation 1,585 1,071 -- 1,043(B) 1,613
------- ------- ------- ------- -------
Total $ 2,236 $ 1,276 $ -- $ 1,160 $ 2,352
------- ------- ------- ------- -------
------- ------- ------- ------- -------
See footnotes on following page.
20
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (CONT'D.)
ROBINSON NUGENT, INC. AND SUBSIDIARIES
(IN THOUSANDS OF DOLLARS)
1998 1997 1996
------ ------ ------
(A) Summary of activity in Column D follows:
Reduction of requirements in allowance for doubtful
accounts $ -0- $ 83 $ 63
Uncollectible accounts written off, net of recoveries 52 98 30
Currency Translation - (gains)/losses 13 26 24
------- ------- -------
$ 65 $ 207 $ 117
------- ------- -------
------- ------- -------
(B) Summary of activity in Column D follows:
Discontinued and obsolete inventory written off,
net of recoveries $ 1,919 $ 655 $ 896
Currency translation - (gains)/losses (385) 455 147
------- ------- -------
$ 1,534 $ 1,110 $ 1,043
------- ------- -------
------- ------- -------
21
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of Robinson Nugent, Inc. New
Albany, Indiana
We have audited the consolidated financial statements of Robinson Nugent Inc.
and Subsidiaries as of June 30, 1998, and for the year ended June 30,1998,
and have issued our report thereon dated July 31, 1998; such financial
statements and report are included in your 1998 Annual Report to Stockholders
and are incorporated herein by reference. Our audit also included the
financial statement schedule of the Company, listed in Item 14. This
financial statement schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion based on our audit.
In our opinion, such financial statement schedule, when considered in
relation to the basic financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.
DELOITTE & TOUCHE LLP
Louisville, Kentucky
July 31, 1998
22
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of Robinson Nugent, Inc.
We have audited the accompanying consolidated balance sheets of Robinson
Nugent, Inc. and Subsidiaries, as of June 30, 1997 and 1996, the related
consolidated statements of operations, shareholders' equity and cash flows and
the financial statement schedule for each of the two years then ended as
listed in Item 14 of Form 10-K for the year ended June 30, 1997. These
consolidated financial statements and the financial statement schedule are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements and the
financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Robinson
Nugent, Inc. and Subsidiaries, as of June 30, 1997 and 1996, and the results
of their operations and their cash flows for each of the two years then ended
in conformity with generally accepted accounting principles. In addition, in
our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein for the years ended June 30, 1997 and 1996.
COOPERS & LYBRAND L.L.P.
Louisville, Kentucky
August 5, 1997
23
ROBINSON NUGENT, INC.
FORM 10-K FOR FISCAL YEAR
ENDED JUNE 30, 1998
INDEX TO EXHIBITS
--------------------------
NUMBER SEQUENTIAL
ASSIGNED IN NUMBERING SYSTEM
REGULATION S-K PAGE NUMBER
ITEM 601 DESCRIPTION OF EXHIBIT OF EXHIBIT
-------------- ---------------------- ----------------
(3) 3.1 Articles of Incorporation of Robinson
Nugent, Inc. (Incorporated by reference
to Exhibit 3.1 to Form S-1 Registration
Statement No. 2-62521.)
3.2 Articles of Amendment of Articles
of Incorporation of Robinson
Nugent, Inc. filed September 1,
1978 (Incorporated by reference
to Exhibit B(1) to Form 10-K
Report for year ended June 30,
1980.)
3.3 Articles of Amendment of Articles of
Incorporation of Robinson Nugent,
Inc. filed November 14, 1983
(Incorporated by reference to
Exhibit 3.3 to Form 10-K Report
for year ended June 30, 1984.)
3.4 Amended and Restated Bylaws of
Robinson Nugent, Inc. adopted
November 7, 1991. (Incorporated
by reference to Exhibit 19.1 to
Form 10-K Report for year ended
June 30, 1992).
(4) 4.1 Specimen certificate for Common
Shares, without par value.
(Incorporated by reference to
Exhibit 4 to Form S-1
Registration Statement No.
2-62521.)
4.2 Rights Agreement dated April 21,
1988 between Robinson Nugent,
Inc. and Bank One, Indianapolis,
NA. (Incorporated by reference
to Exhibit I to Form 8-A
Registration Statement dated May
2, 1988.)
4.3 Amendment No. 1 to Rights
Agreement dated September 26,
1991. (Incorporated by reference
to Exhibit 4.3 to Form 10-K
Report for year ended June 30,
1991.)
24
4.4 Amendment No. 2 to Rights
Agreement dated June 11, 1992.
(Incorporated by reference to
Exhibit 4.4 to Form 8-K Current
Report dated July 6, 1992.)
4.5 Amendment No. 3 to Rights Agreement
dated February 11, 1998
(Incorporated by reference to
Exhibit 4.5 to Form 10-Q Report
for the period ended December 31,
1998.)
(9) No exhibit.
(10) 10.1 Robinson Nugent, Inc. 1983 Tax-Qualified *
Incentive Stock Option Plan.
(Incorporated by reference to
Exhibit 10.1 to Form 10-K Report
for year ended June 30, 1983.)
10.2 Robinson Nugent, Inc. 1983 Non Tax- *
Qualified Incentive Stock Option
Plan. (Incorporated by reference
to Exhibit 10.2 to Form 10-K
Report for year ended June 30,
1983.)
10.3 1993 Robinson Nugent, Inc. Employee and *
Non-Employee Director Stock
Option Plan. (Incorporated by
reference to Exhibit 19.1 to Form
10-K Report for the year ended
June 30, 1993.)
10.4 Summary of The Robinson Nugent, Inc. *
Employee Stock Purchase Plan.
(Incorporated by reference to
Exhibit 19.2 to Form 10-K Report
for the year ended June 30, 1993.)
10.5 Deferred compensation agreement dated *
May 10, 1990 between Robinson
Nugent, Inc. and Larry W. Burke,
President and Chief Executive
Officer. (Incorporated by
reference to Exhibit 19.1 to Form
10-K Report for year ended June
30, 1990.)
10.6 Rabbi Trust Agreement dated July 1, 1996 *
between Robinson Nugent, Inc. and
Dean Witter Trust Company,
related to the deferred
compensation agreement between
Robinson Nugent, Inc. and Larry
W. Burke, President and Chief
Executive Officer. (Incorporated
by reference to Exhibit 10.6 to
Form 10-K report for year ended
June 30, 1997.)
25
10.7 Amendment of the 1993 Robinson Nugent, Inc. *
Employee and Non-Employee
Director Stock Option Plan.
10.8 Summary of Robinson Nugent, Inc. Bonus *
Plan for the fiscal year ending June 30,
1999.
(11) No exhibit.
(12) No exhibit.
(13) 1996 Annual Report to Shareholders of
Robinson Nugent, Inc.
(16) No exhibit.
(18) No exhibit.
(21) The subsidiaries of the registrant are:
JURISDICTION
NAME OF ORGANIZATION
---- ---------------
Cablelink, Incorporated Indiana
RNL, Inc. Indiana
Robinson Nugent-Dallas, Inc. Texas
Robinson Nugent Design Services, Inc. Pennsylvania
Robinson Nugent S.a.r.l. France
Robinson Nugent GmbH Germany
Robinson Nugent Ltd. Great Britain
Nihon Robinson Nugent K.K. Japan
Robinson Nugent dba Cablelink Malaysia
(Malaysia) Sdn. Bhd.
Robinson Nugent (Malaysia) Sdn. Bhd. Malaysia
Robinson Nugent S.A. Switzerland
Robinson Nugent (Scotland) Limited Scotland
Robinson Nugent International, Inc. Virgin Islands
Robinson Nugent (Europe) B.V. Netherlands
26
Robinson Nugent (Belgium) B.V.B.A. Belgium
Robinson Nugent (Asia Pacific) Pte. Ltd. Singapore
Robinson Nugent Nordic, filial Sweden
till Robinson Nugent (Europe) B.V.
The Netherlands
Robinson Nugent S. de R.L. de C.V. Mexico
(22) No exhibit.
(23) 23.1 Consent of Deloitte & Touche LLP
Independent Auditors
23.2 Consent of PricewaterhouseCoopers LLP
Independent Accountants
(24) No exhibit.
(27) Financial Data Schedule.
(28) No exhibit.
* Management contracts or compensatory plans
27