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INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED
ALL REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15 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. (X)YES ( )NO
AS OF MARCH 24, 1998, THE AGGREGATE MARKET VALUE OF THE VOTING
STOCK HELD BY NON-AFFILIATES WAS $2,910,855.
AS OF MARCH 24, 1998, THERE WERE 348,799 SHARES OF COMMON
STOCK, $.20 PAR VALUE, OUTSTANDING.
DOCUMENTS INCORPORATED BY REFERENCE
HOMASOTE COMPANY 1997 ANNUAL REPORT TO STOCKHOLDERS (PARTS II
AND IV).
PROXY STATEMENT DATED APRIL 2, 1998 (PART III).
INDEX TO FORM 10-K
PART I
ITEM 1. BUSINESS
(A) GENERAL DEVELOPMENT OF BUSINESS
(B) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
(C) NARRATIVE DESCRIPTION OF BUSINESS
(D) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC
OPERATIONS, AND EXPORT SALES
ITEM 2. PROPERTIES
ITEM 3 LEGAL PROCEEDINGS
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
ITEM 6. SELECTED FINANCIAL DATA
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
ITEM 11. EXECUTIVE COMPENSATION
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
SIGNATURES
PART I
ITEM 1. BUSINESS
(A) GENERAL BUSINESS DEVELOPMENT
HOMASOTE COMPANY IS IN THE BUSINESS OF MANUFACTURING
INSULATED WOOD FIBRE BOARD AND POLYISOCYANURATE FOAM
PRODUCTS.
(B) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
THE COMPANY OPERATES IN ONLY ONE INDUSTRY SEGMENT,
THE MANUFACTURE AND SALE OF RIGID POLYISOCYANURATE
AND STRUCTURAL INSULATING BUILDING MATERIALS AND
PACKAGING PRODUCTS FOR INDUSTRIAL CUSTOMERS.
(C) NARRATIVE DESCRIPTION OF BUSINESS
(I) PRINCIPAL PRODUCTS AND SERVICES
THE PRINCIPAL PRODUCT OF THE REGISTRANT IS
"HOMASOTE" INSULATING AND BUILDING BOARD
MANUFACTURED IN VARIOUS THICKNESSES, SIZES AND
FINISHES. THE BASIC RAW MATERIAL IS WOOD FIBRE
OBTAINED FROM RECONVERTING CLEAN, FLAT FOLDED
NEWSPAPERS. IT IS COMBINED WITH VARIOUS
CHEMICALS TO PRODUCE RIGID, SIDEWALL AND
ROOFING INSULATION IN VARIOUS SHEET SIZES AND
THICKNESSES. THIS PRODUCT HAS NO ASBESTOS AND
NO UREAFORMALDEHYDE ADDITIVES.
THE PRINCIPAL MARKETS FOR THE REGISTRANTS
PRODUCTS ARE BUILDING MATERIAL WHOLESALERS AND
CONTRACTORS AND INDUSTRIAL MANUFACTURERS.
PRODUCTS ARE DISTRIBUTED THROUGH WHOLESALERS OF
BUILDING MATERIALS AND INDUSTRIAL MANUFACTURERS.
THE REGISTRANT IS BROADENING ITS COVERAGE IN THE
AUTOMOTIVE, GLASS AND STEEL MARKETS.
(II) PRODUCT IMPROVEMENTS AND NEW APPLICATIONS
NEW CONCEPTS FOR MACHINING HOMASOTE AND
FORMULATING PRODUCTS ARE OPENING AVENUES IN THE
CUSTOMER BASE.
(III) RAW MATERIALS
THE COMPANY'S PRIMARY RAW MATERIAL, WASTEPAPER, IS
GENERALLY READILY AVAILABLE FROM TWO SUPPLIERS
WITH WHICH THE COMPANY HAS PURCHASE CONTRACTS THAT
EXPIRE IN 2009.
(IV) PATENTS
THERE ARE NO PATENTS, LICENSES, FRANCHISES OR
CONCESSIONS IMPORTANT TO THE CONDUCT OF THE BUSINESS
OF THE REGISTRANT OR ITS SUBSIDIARY.
(V) SEASONAL BUSINESS
NO MATERIAL PORTION OF THE BUSINESS OF THE
REGISTRANT IS SEASONAL.
(VI) WORKING CAPITAL REQUIREMENTS
THE REGISTRANT BELIEVES THAT ITS OPERATION DOES NOT
REQUIRE ANY UNUSUAL WORKING CAPITAL NEEDS.
AVAILABLE CREDIT FACILITIES AND CASH GENERATED FROM
OPERATIONS ARE SUFFICIENT TO MEET WORKING CAPITAL
REQUIREMENTS.
(VII) MATERIAL CUSTOMERS
DURING THE CALENDAR YEAR ENDED DECEMBER 31, 1996, NO
CUSTOMER OF THE REGISTRANT ACCOUNTED FOR SALES OF 5%
OR MORE.
(VIII) BACKLOG
BACKLOG IS NOT MEANINGFUL SINCE MOST CUSTOMERS ORDER
FOR IMMEDIATE AND PROMPT DELIVERY AND ONLY A FEW FOR
SEVERAL WEEKS' SCHEDULED DELIVERIES.
(IX) GOVERNMENT CONTRACTS
NO MATERIAL PORTION OF THE REGISTRANT'S BUSINESS IS
SUBJECT TO RENEGOTIATION OF PROFITS OR TO
TERMINATION OF CONTRACTS BY THE GOVERNMENT.
(X) COMPETITIVE CONDITIONS
IN EXPLAINING THE HOMASOTE COMPANY'S COMPETITIVE
POSITION, IT MUST BE UNDERSTOOD THAT HOMASOTE IS A
MEDIUM DENSITY BOARD - NOT A HARD NOR A SOFT BOARD.
IT CAN BE USED IN THE INTERIOR OR EXTERIOR OF A
HOME. IT IS AN ALL-PURPOSE BOARD AND IS SOLD IN
THAT MANNER. IT TAKES THE PLACE OF PLYWOOD IN MANY
CASES. THE COMPANY'S PRODUCT IS SOLD TO MANY
CUSTOMERS WHERE THEY CAN TAKE ADVANTAGE OF THE
UNIQUE QUALITIES OF THE PRODUCT.
(XI) RESEARCH AND DEVELOPMENT
THE REGISTRANT DEFINES RESEARCH AS THE
EXPERIMENTATION WITH RESPECT TO NEW PRODUCTS OR
DESIGNS. IT DEFINES QUALITY CONTROL AS THE ONGOING
SUPPORT FOR EXISTING PRODUCTS OR DESIGNS. DURING
THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 NO
AMOUNTS WERE SPENT ON RESEARCH AND DEVELOPMENT.
DURING THE YEARS ENDED DECEMBER 31, 1997, 1996 AND
1995 THE REGISTRANT INCURRED QUALITY CONTROL COSTS
OF $90,304, $80,309, AND $84,448 RESPECTIVELY.
(XII) ENVIRONMENTAL PROTECTION
AS OF DECEMBER 31, 1997, COMPLIANCE WITH FEDERAL,
STATE AND LOCAL PROVISIONS WHICH HAVE BEEN ENACTED
OR ADOPTED TO REGULATE THE PROTECTION OF THE
ENVIRONMENT WILL NOT HAVE A MATERIAL EFFECT UPON THE
CAPITAL EXPENDITURES, EARNINGS OR COMPETITIVE
POSITION OF THE REGISTRANT OR ITS SUBSIDIARY. THE
REGISTRANT DOES NOT EXPECT TO MAKE ANY MATERIAL
CAPITAL EXPENDITURES FOR ENVIRONMENTAL CONTROL
FACILITIES FOR ITS CURRENT FISCAL YEAR.
(XIII) NUMBER OF EMPLOYEES
AS OF DECEMBER 31, 1997, THE REGISTRANT EMPLOYED 220
EMPLOYEES, AS COMPARED TO 214 IN 1996.
(D) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC
OPERATIONS AND EXPORT SALES
FOREIGN SALES, PRIMARILY IN CANADA, ACCOUNTED FOR
APPROXIMATELY 6%, FOR THE YEAR ENDED DECEMBER 31, 1997,
AND APPROXIMATELY 5%, IN EACH OF THE TWO YEARS ENDED
DECEMBER 31, 1996 AND 1995, RESPECTIVELY, OF THE
REGISTRANT'S TOTAL SALES. THE REGISTRANT IS CONTINUING
ITS EFFORTS TO EXPAND SALES WORLDWIDE.
ITEM 2. PROPERTIES
THE REGISTRANT'S PLANT AND MAIN OFFICES ARE LOCATED OFF
LOWER FERRY ROAD, EWING TOWNSHIP, TRENTON, NEW JERSEY.
THE PROPERTY CONSISTS OF APPROXIMATELY 27 ACRES WITH
PRIVATE RAILROAD SIDING (CONSOLIDATED RAIL CORPORATION)
ENTERING THE SHIPPING AREA. BUILDINGS ARE OF CINDER
BLOCK AND BRICK CONSTRUCTION, WITH A FLOOR AREA OF
APPROXIMATELY 531,000 SQUARE FEET, WHICH ARE PROPERLY
ARRANGED FOR THE MANUFACTURE AND FINISHING OF ALL THE
REGISTRANT'S PRODUCTS. THE WHOLE AREA IS PROTECTED WITH
A COMPLETE ENCLOSURE OF CYCLONE FENCING AND GUARD HOUSE.
THE ENTIRE MANUFACTURING OPERATION AND OFFICE COMPLEX
CONTAINS FIRE SPRINKLERS AND IS MONITORED BY A SECURITY
COMPANY FOR FIRE PROTECTION. ALL PROPERTY IS HELD IN FEE
SIMPLE. THE MANUFACTURING OPERATION RUNS THREE SHIFTS,
SEVEN DAYS A WEEK. OPERATIONAL CAPACITY IS APPROXIMATELY
60% WHILE THE NEW DRYER SYSTEM IS BEING INSTALLED AND IS
DEPENDENT DIRECTLY UPON THE ECONOMIC CONDITION OF THE
HOUSING AND MANUFACTURING INDUSTRIES.
ITEM 3. LEGAL PROCEEDINGS
AS OF DECEMBER 31, 1997, THERE WAS NO MATERIAL PENDING
LITIGATION AGAINST THE REGISTRANT.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NOT APPLICABLE.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
THIS INFORMATION IS INCLUDED IN THE HOMASOTE COMPANY 1997
ANNUAL REPORT TO STOCKHOLDERS. SEE THE TWO YEAR DIVIDEND
AND STOCK PRICE COMPARISON SECTION OF SUCH REPORT
INCORPORATED HEREIN BY REFERENCE AS EXHIBIT 13.
ITEM 6. SELECTED FINANCIAL DATA
SEE CONSOLIDATED FIVE YEAR HIGHLIGHTS SECTION OF THE
HOMASOTE COMPANY 1997 ANNUAL REPORT TO STOCKHOLDERS
INCORPORATED HEREIN BY REFERENCE AS EXHIBIT 13.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS SECTION OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SEE MANAGEMENT'S DISCUSSION AND ANALYSIS SECTION OF THE
HOMASOTE COMPANY 1997 ANNUAL REPORT TO STOCKHOLDERS
INCORPORATED HEREIN BY REFERENCE AS EXHIBIT 13.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
SEE CONSOLIDATED FINANCIAL STATEMENTS AND NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS OF THE HOMASOTE COMPANY
1997 ANNUAL REPORT TO STOCKHOLDERS INCORPORATED
HEREIN BY REFERENCE AS EXHIBIT 13.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
NONE.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(A) DIRECTORS
A DEFINITIVE PROXY STATEMENT DATED APRIL 2, 1998, WAS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
INCLUDING THE INFORMATION REQUIRED BY THESE ITEMS.
(B) EXECUTIVE OFFICERS
EXPERIENCE
STARTED IN YEARS
IN AT
NAME TITLE (6) POSITION POSITION AGE
- ------------------ --------- -------- -------- ---
IRVING FLICKER CHAIRMAN OF
(1) THE BOARD AND
CHIEF EXECUTIVE
OFFICER 2/16/72 26 82
SHANLEY E. FLICKER VICE CHAIRMAN
(1) OF THE BOARD 1/01/95 3 80
WARREN L FLICKER PRESIDENT AND
(2) CHIEF OPERATING
OFFICER 1/01/95 3 54
JOSEPH A BRONSARD EXECUTIVE VICE
(3) PRESIDENT 1/01/95 3 64
NEIL F BACON TREASURER 4/14/88 10 41
(4) CHIEF FINANCIAL
AND ACCOUNTING
OFFICER 3/14/88 10
ASSISTANT
SECRETARY 4/14/88 10
CINDY ADLER SECRETARY 4/21/95 3 41
(5)
(1) IRVING FLICKER AND SHANLEY FLICKER ARE BROTHERS.
(2) WARREN FLICKER IS THE SON OF IRVING FLICKER.
(3) EMPLOYED BY THE COMPANY SINCE 1968.
(4) EMPLOYED BY THE COMPANY SINCE 1979.
(5) EMPLOYED BY THE COMPANY SINCE 1988.
(6) THE OFFICERS MENTIONED ABOVE ARE RE-ELECTED EACH YEAR
BY THE BOARD OF DIRECTORS AT THEIR ANNUAL MEETING.
ITEM 11. EXECUTIVE COMPENSATION
A DEFINITIVE PROXY STATEMENT DATED APRIL 2, 1998, WAS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
INCLUDING THE INFORMATION REQUIRED BY THIS ITEM.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
A DEFINITIVE PROXY STATEMENT DATED APRIL 2, 1998, WAS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
INCLUDING THE INFORMATION REQUIRED BY THIS ITEM.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
A DEFINITIVE PROXY STATEMENT DATED APRIL 2, 1998, WAS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
INCLUDING THE INFORMATION REQUIRED BY THIS ITEM.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
(A) (1) FINANCIAL STATEMENTS INCORPORATED HEREIN BY
REFERENCE AS EXHIBIT 13.
INDEPENDENT AUDITORS' REPORT INCORPORATED HEREIN BY
REFERENCE AS EXHIBIT 13.
CONSOLIDATED BALANCE SHEETS - DECEMBER 31, 1997 AND
1996 INCORPORATED HEREIN BY REFERENCE AS EXHIBIT
13.
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED
EARNINGS - YEARS ENDED DECEMBER 31, 1997, 1996 AND
1995 INCORPORATED HEREIN BY REFERENCE AS EXHIBIT
13.
CONSOLIDATED STATEMENTS OF CASH FLOWS - YEARS ENDED
DECEMBER 31, 1997, 1996 AND 1995 INCORPORATED
HEREIN BY REFERENCE AS EXHIBIT 13.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
INCORPORATED HEREIN BY REFERENCE AS EXHIBIT 13.
(2) FINANCIAL STATEMENT SCHEDULES
NONE REQUIRED
(3) EXHIBITS
3 ARTICLES OF INCORPORATION AND BYLAWS *
13 HOMASOTE COMPANY 1997 ANNUAL REPORT TO
STOCKHOLDERS
(B) REPORT ON FORM 8-K
NO REPORTS ON FORM 8-K WERE FILED IN THE THREE
MONTHS ENDED DECEMBER 31, 1997.
*PREVIOUSLY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15 (d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED
THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED.
HOMASOTE COMPANY
DATED: MARCH 31, 1998 BY IRVING FLICKER
CHAIRMAN AND CHIEF EXECUTIVE
OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES AND EXCHANGE
ACT OF 1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING
PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES ON THE
DATE INDICATED.
IRVING FLICKER CHAIRMAN, DIRECTOR MARCH 31, 1998
& CEO
NEIL F. BACON TREASURER MARCH 31, 1998
SHANLEY E. FLICKER DIRECTOR MARCH 31, 1998
WARREN FLICKER DIRECTOR MARCH 31, 1998
PATIENCE O. BANISTER DIRECTOR MARCH 31, 1998
JOSEPH A. BRONSARD DIRECTOR MARCH 31, 1998
MICHAEL FLICKER DIRECTOR MARCH 31, 1998
PETER N. OUTERBRIDGE DIRECTOR MARCH 31, 1998