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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
Commission file number 1-228
ZEMEX CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1031 13-5496920
(State or other (Primary standard (I.R.S. employer
jurisdiction of industrial identification
incorporation or classification code number)
organization) number)
Canada Trust Tower, BCE Place, 161 Bay Street, Suite 3750
Toronto, Ontario, Canada M5J 2S1
(416) 365-8080
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Securities registered pursuant to Section 12(b) of the Act
New York Stock Exchange Capital
Stock, $1.00 par value
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 twelve
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.
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.
The aggregate market value of registrant's voting stock (Capital
Stock, $1.00 par value) held by non-affiliates as of March 8,
1996 (based on the closing sale price of $9.00 on the New York
Stock Exchange) was $36,266,796.
As of March 8, 1996 there were 8,712,728 of the registrant's
Capital Stock, $1.00 par value, outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Annual Report to Shareholders for the Year Ended December 31,
1995 Part II
Definitive Proxy Statement filed with the Commission pursuant
to Regulation 14A with respect to Annual Meeting of Shareholders
Part III
FORM 10-K
ANNUAL REPORT
TABLE OF CONTENTS
AND
CROSS-REFERENCE SHEET
PART I
Page
Item 1. Business 1
Item 2. Properties 6
Item 3. Legal Proceedings 7
Item 4. Submission of Matters to a Vote of Security Holders7
Item 10. Executive and Other Officers of the Registrant (A) 7
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters (B) 8
Item 6. Selected Financial Data (C) 9
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operation (D) 9
Item 8. Financial Statements and Supplementary Data (E) 9
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure 9
PART III
Item 10.
Directors of the Registrant(F) *
Item 11.
Executive Compensation(F) *
Item 12.
Security Ownership of Certain Beneficial Owners and Management
(F) *
Item 13. Certain
Relationships and Related Transactions (F) *
PART IV
Item 14.
Exhibits, Financial Statement Schedules, and Reports on Form 8-K
9
__________________________
(A)
Included in Part I pursuant to Instruction 3 of Item 401(b)
of Regulation S-K.
(B) Information responsive to this Item is set forth on page
21 of registrant's Annual Report to Shareholders for the
year ended December 31, 1995 (the "Annual Report to
Shareholders") and is incorporated herein by reference.
The Annual Report to Shareholders is included as Exhibit 13
to this Form 10-K Annual Report. The Annual Report to
Shareholders, except for those portions thereof which are
expressly incorporated by reference herein, is furnished
for the information of the Commission and is not to be
deemed "filed" as part of this Form 10-K report.
(C) Information responsive to this Item is set forth on
page 44 of the Annual Report to Shareholders and is
incorporated herein by reference.
(D) Information responsive to this Item is set forth on
pages 12 through 21 of the Annual Report to Shareholders
and is incorporated herein by reference.
(E) Financial statements responsive to this Item are set
forth on pages 22 through 43 of the Annual Report to
Shareholders and are incorporated herein by reference. The
Supplementary Schedule required by this Item is set forth
on page S-1 of this Form 10-K Annual Report.
(F) Information responsive to this Item is set forth in
registrant's definitive proxy statement to be filed with
the Commission pursuant to Regulation 14A and in the Annual
Report to Shareholders on Page 42 (Note 15) and is
incorporated herein by reference.
PART I
ITEM 1. BUSINESS
General
Zemex Corporation (the "Corporation" or "Zemex"), a Delaware
corporation, was incorporated in 1985 as the successor to Pacific
Tin Corporation. Zemex is a niche producer of industrial
minerals and metal products. Its principal businesses are
industrial minerals, metal powders, and aluminum waste recycling.
Major products include feldspar, feldspathic minerals, kaolin,
sand, mica, talc, ferrous and non ferrous powders and aluminum
dross derivatives.
Industrial Minerals
The Corporation's industrial minerals segment consists of three
wholly-owned subsidiaries: The Feldspar Corporation ("TFC"),
Suzorite Mica Products Inc. ("Suzorite") and Suzorite Mineral
Products, Inc. ("SMP").
The products produced by TFC include feldspar, silica, muscovite
mica and kaolin clay. Industries supplied include glass and
ceramics. Feldspathic minerals and certain grades of industrial
sand are used to manufacture bottles, jars, and other glass
containers, fiberglass, paints and plastics, and television
picture tubes. Feldspar and kaolin are major raw materials for
the ceramic industry, and are incorporated in a variety of
products that include ceramic floor and wall tiles, dinnerware,
plumbing fixtures, glazes and electrical insulators. Industrial
sand is also used for filter, trap, filler, beach, blasting and
concrete applications. TFC is also producing a new low iron sand
product for use in specialized lighting. TFC's operating plants
are located in Florida, Georgia and North Carolina.
Suzorite mines phlogopite mica in an open pit mining operation in
Suzor Township, Quebec, Canada, approximately 200 miles north of
Montreal, Quebec. The ore is mined by standard, open pit methods
and delivered to a siding for ultimate transportation by rail to
the processing plant, which is located in Boucherville, Quebec, a
suburb of Montreal. Processing of phlogopite mica involves
milling, screening and proprietary processing steps to produce
products of various size fractions which find ultimate use in a
variety of applications, such as partial or complete substitution
for asbestos in fire retardation, friction materials, oil well
drilling needs, caulking and molding compounds, coatings,
plasters and plastics. One of the most significant areas of use
is in technological plastic and high temperature plastic
applications, as phlogopite mica has a distinct thermal stability
advantage over competitive materials. These products are
marketed under the trade names of Suzorite Mica and Suzorex. The
principal markets served by Suzorite are the automobile,
construction and oil drilling industries.
The most recent addition to the industrial minerals segment is
the talc business. In late 1994, the company acquired talc
operations in New York, North Carolina and Texas and in May 1995
it bought an additional processing facility in West Virginia. SMP
produces talc which is used in the ceramics, paint and paper
industries. Its plants are located in New York, North Carolina,
Texas and West Virginia. Talc is used in the cosmetic and
pharmaceutical industries and in the coatings, plastics and
ceramics industries. SMP plans to develop a niche for itself in
the talc marketplace by offering such specialty products as fine
grind and surface treated talc products. Customers are currently
testing these products and, if successful, these products will
begin to be sold some time in 1996.
Demand for these industrial minerals is related to the pace of
the general economy and is particularly related to the automotive
industry and the residential and commercial construction and
remodeling industries. Industrial minerals sales in 1995 totaled
$37.1 million, compared with $30.4 million in 1994.
This business segment recorded the fifth straight year of
improved operating income before restructuring charges, with $4.6
million in 1995, $3.9 million in 1994, $2.4 million in 1993, $2.2
million in 1992, and $0.8 million in 1991, due to increased sales
and margins. Major efforts were made in the area of cost
reduction, continuous quality improvement and the introduction of
new value added products.
During 1995, considerable efforts were put into product
development, market research, cost saving capital projects and
product quality improvement systems. The Corporation expects
these efforts will bear fruit in the future.
Capital expenditures were $9.7 million in 1995, compared to $2.1
million in 1994. The 1995 expenditures were used to replace
mining equipment, make mill modifications to produce a new
product and to increase production capacity at TFC's sodium
feldspar facility in Spruce Pine, North Carolina. It is
anticipated that 1996 capital expenditures will be higher due to
the completion of the expansion project and construction of a
high purity silica plant adjacent to the North Carolina sodium
feldspar facility and increased fine grind capacity at the
facility in West Virginia.
Metal Products
The metal products segment consists of Pyron Corporation and
Pyron Metal Powders, Inc. (together, "Pyron") and Alumitech,
Inc., Aluminum Waste Technology, Inc. and Engineered Thermal
Systems, Inc. (collectively, "Alumitech"), all of which are
wholly-owned subsidiaries of Zemex.
Pyron operates plants located in Niagara Falls, New York, St.
Marys, Pennsylvania, Greenback, Tennessee and Maryville,
Tennessee. In 1992, Pyron acquired Pyron Metal Powders, Inc. of
Maryville, Tennessee (renamed from Ligonier Powders, Inc.) out of
bankruptcy. In 1994, Pyron purchased the assets of Greenback
Industries, Inc. Combined, the acquisitions give Pyron the
ability to produce a range of high quality copper and copper
alloy powders at its plants in Maryville and Greenback,
Tennessee. These products complement Pyron's iron and steel
powder products and are sold through Pyron's existing marketing
and sales organization.
Pyron's major products include iron, steel, copper and copper
alloy powders. The largest use of metal powders is in the
fabrication of precision metal parts by the powder metallurgy
process. Powder metallurgy is an efficient, economical process
for the production of numerous components for the automotive,
farm, garden and lawn equipment, and business machine industries.
Key features of powder metallurgy technology are low scrap ratios
and lower production costs than other metal working processes
such as casting and forging. In addition, in recent years, metal
powder use in automotive and rail braking systems has grown
rapidly as a replacement for asbestos, achieving better
performance and improving environmental and health conditions.
Metal powders are also used in making welding rods, for cutting
and scarfing of steel ingots and billets, for the inspection of
oil field pipe and tubing, and in food supplements.
At Pyron, sales of atomized iron and steel products increased in
1993, however, due to technological problems, the rate of
increase was less than anticipated. Late in 1993, the technical
problems were resolved and in 1994 the product rapidly gained
customer acceptance. In March 1995, there was an interruption in
production due to an explosion in the atomization facility. This
resulted in lost sales at a time when the market was slowing due
to an inventory adjustment by suppliers to the automotive
industry. The impact continued through to the end of 1995 but
management sees signs of improvement for 1996.
In 1995 the only domestic producer of manganese sulfide was sold
to a European company and the facility was relocated to Sweden.
Pyron has developed a product line and new process and is
initiating construction of a facility for the production of
manganese sulfide. This new product is currently in the hands of
customers for qualification. With its extended product line,
Pyron has become a valuable and flexible supplier with a long
term future in what management believes to be a very promising
industry.
Also in 1995, Pyron completed construction of a blending facility
in St. Marys, Pennsylvania. This new blending plant enhances
product delivery and allows customers to take advantage of just-
in-time ordering. In the short time it has been in operation,
the St. Marys plant has gained wide acceptance in the
marketplace.
Late in 1993, the Corporation entered into an agreement whereby
it became the exclusive sales agent to the powdered metal markets
for powdered nickel produced in Russia, making Pyron the second
largest supplier of this material to this market in North
America.
Zemex is 100% owner of Alumitech, an aluminum dross reprocessor.
Alumitech has developed, patented and is commercializing its
leading edge aluminum dross recycling technology. The process
transforms chloride-based drosses received from secondary
aluminum producers into a number of commercial components,
including ceramic type materials. Currently, competitive
processes landfill anywhere from 40%-75% of the volume of dross
received whereas Alumitech's recycling process will virtually
eliminate the need for landfill.
The Corporation acquired its initial interest in Alumitech in
1994 and increased its ownership to 100% in 1995. Alumitech has
two processing plants: an aluminum dross plant in Cleveland, Ohio
and a ceramic fiber plant in Streetsboro, Ohio. Aluminum dross
is a waste product produced by primary and secondary aluminum
smelters.
Secondary dross, which is high in chloride content, forms the
primary feedstock for Alumitech's dross plant. Conventional
dross processors extract the contained metallic aluminum and
landfill the balance. The process that Alumitech is currently
commercializing extracts the metallic aluminum, re-crystallizes
the sodium, potassium, and magnesium chlorides, extracts residual
fines as exothermics and converts the balance into its
proprietary non-metallic product ("NMP"). The NMP is a feedstock
for the production of ceramic products. The end result of the
process is the ability for the total elimination of landfill
arising from aluminum dross. Alumitech's patents on its
technology to process NMP have a remaining life of about fourteen
years.
Alumitech also operates a ceramic fiber plant which melts the NMP
in an electric arc furnace and converts it into ceramic fiber.
The fiber is blown into a blanket which is cut to dimension. The
final product is an insulation material with a temperature of
degradation of as high as 2200oF.
Management expects that Alumitech's process will be fully
commercialized in 1996 and that construction of a second dross
plant will begin in 1996.
Sales for the metal product group increased to $48.0 million in
1995 from $24.9 million in 1994 and from $16.9 million in 1993.
Of the 1995 increase, $13.6 million was due to the acquisition of
Alumitech in February 1995. The balance of the increase was due
to higher sales volumes of ferrous and non-ferrous metal powders.
During the same interval, operating income increased from $1.0
million in 1993 to $3.7 million in 1995. Management anticipates
improved margins in this segment in 1996 as a result of higher
metal powder production and an intensive cost reduction program,
coupled with improved volumes of Alumitech.
Capital expenditures were $5.8 million in 1995 as compared to
$0.9 million in 1994 and $0.4 million in 1993. The expenditures
were primarily incurred to construct a powdered metal blending
facility in St. Marys, Pennsylvania and to improve the dross
processing and ceramic production facilities at the Cleveland
plant. In 1996, capital expenditures are anticipated to be
higher due to the commencement of construction of a new dross
processing facility.
Raw Materials and Other Requirements
In recent years, the Corporation has not experienced any
substantial difficulty in obtaining its raw materials
requirements for the metal products segment, which is the segment
that consumes, rather than supplies, raw materials. No assurance
can be given that any shortages of these or other necessary
materials or equipment will not develop or that increased prices
will not adversely affect the Corporation's business in the
future.
Seasonality
The efficiency and productivity of the Corporation's operations
can be affected by unusually severe winter weather conditions.
During the winter of 1995, there were several days of production
lost in operating facilities in North Carolina and New York
states, but they were not significant enough to materially affect
1995 operating results.
Competition
All of the Corporation's products are sold in highly competitive
markets which are influenced by price, product performance,
customer location, service, foreign competition, material
substitution and general economic conditions. The Corporation
competes with other companies active in industrial minerals and
metal products. No material part of the Corporation's business
is dependent upon a single customer or upon very few customers,
the loss of any one of which would have a material adverse impact
on the Corporation.
Industrial mineral prices generally are not subject to the price
fluctuations typical of commodity metals. Demand for industrial
minerals is primarily related to general economic conditions,
particularly in the automotive, housing and construction
industries. In the United States there are three major
feldspathic mineral producers including the Corporation and the
Corporation is the only North American producer of phlogopite
mica. Markets for industrial mineral products are sensitive not
only to service, product performance and price, but to
competitive pressures and transportation costs.
The Corporation is one of five North American producers of metal
powders. The market for metal powders is affected primarily by
product performance, consistency of product quality and price.
To some extent, competition in the metal powders industry is
affected by imports of finished metal powder parts. Product
prices over the last several years have been strongly influenced
by costs of powder production. Demand for metal powders is a
function of general economic conditions, particularly in the
automotive market.
There a numerous aluminum dross processors in the United States,
however, only Alumitech has the patented technology to enable it
to process aluminum dross without landfill. While the Corporation
competes for the supply of aluminum dross with a number of other
operations, the major factor affecting the supply of dross is the
level of activity of the secondary aluminum smelting industry.
Research and Development
The Corporation carries on an active program of product
development and improvement. Research and development expense
was $0.3 million in 1995, $0.3 million in 1994 and $0.4 million
in 1993.
Financial information about industry segments is set forth on
pages 42 and 43 of the Annual Report to Shareholders and is
incorporated herein by reference.
Environmental Considerations
Laws and regulations currently in force which do or may affect
the Corporation's domestic operations include the Federal Clean
Air Act of 1970, the National Environmental Policy Act of 1969,
the Solid Waste Disposal Act (including the Resource Conservation
and Recovery Act of 1976), the Toxic Substances Control Act,
CERCLA (superfund) and regulations under these Acts, the
environmental protection regulations of various governmental
agencies (e.g. the Bureau of Land Management Surface Management
Regulations, Forest Service Regulations, and Department of
Transportation Regulations), laws and regulations with respect to
permitting of land use, various state and local laws and
regulations concerned with zoning, mining techniques, reclamation
of mined lands, air and water pollution and solid waste disposal.
The Corporation is not aware of any adverse environmental
problems or issues.
Employees
The approximate number of Corporation employees as of December
31, 1995 is set forth below:
Industrial Minerals 271
Metal Products 220
Corporate 6
Total 497
Approximately 62 employees of the metal powder operations are
covered by a collective bargaining agreement. The current three-
year agreement expires April 15, 1998. Approximately 23
employees of the Suzorite mica operation are covered by a
collective bargaining agreement. The current agreement is for a
three-year term and expires January 12, 1997. Approximately 39
employees at Alumitech are covered by two collective bargaining
agreements, one agreement expiring April 30, 1996 and one
agreement expiring December 31, 1998. The Corporation considers
its labor relations to be good.
Foreign Operations
The Corporation's international operations are located in Canada
whose institutions and governmental policies are similar to those
of the United States. Although there can be no assurance as to
future conditions, the Corporation has experienced no political
activities, social upheavals, currency restrictions or similar
factors which have had any material adverse effect to date on the
results of its operations or financial condition.
Export Sales
The Corporation's industrial minerals and metal products
operations sell their products internationally to a wide variety
of customers including the ceramics, glass and powder metallurgy
industries. Export sales in these two segments were less than 7%
of total sales.
ITEM 2. PROPERTIES
The industrial minerals segment has operations and mines in
Edgar, Florida; Monticello, Georgia; Boucherville, Quebec;
Suzor Township, Quebec; Natural Bridge, New York; Murphy, North
Carolina; Spruce Pine, North Carolina; Van Horn, Texas; and
Benwood, West Virginia. This segment owns approximately 364,000
square feet of office and plant floor space. In addition, the
processing facility in Benwood, West Virginia has approximately
twelve acres of land. The mineral deposits at the mines
currently operated by the industrial minerals segment are
estimated by the Corporation to be at least 25 years, except in
the case of the mica mine in Suzor Township where reserves are
estimated to be in excess of 100 years. All of the Corporation's
mining properties are either owned or leased, with the leases
expiring from 1996 to 2018.
The metal products group has operations in Niagara Falls, New
York; St. Marys, Pennsylvania; Greenback, Tennessee; Maryville,
Tennessee; Cleveland, Ohio; and Streetsboro, Ohio. At its
facility in Niagara Falls, Pyron Corporation utilizes
approximately 96,000 square feet of office and plant floor space
which it leases from the Niagara County Industrial Development
Agency. The lease was established as part of the Industrial
Revenue Bond issued in November 1989 to finance the construction
of the Atomized Steel Powder plant. Lease payments are to be
sufficient to pay the debt service on the Industrial Revenue
Bond. The facility incorporates approximately 16,000 square feet
of floor space and is adjacent to the existing facility. The
blending plant in St. Marys, Pennsylvania was built in 1995 and
has 32,000 square feet of plant, office and storage space and is
situated on 3.4 acres of land. The Maryville, Tennessee plant
utilizes approximately 23,000 square feet of office and plant
floor space. The Greenback facility is situated on 27.5 acres of
land of which six acres is actively used in the operations.
General office space comprises approximately 6,300 square feet.
There is approximately 66,500 square feet of production/storage
space and approximately 86,800 square feet. The Cleveland, Ohio
operation owns 6.1 acres and has buildings totaling 51,000 square
feet. The Streetsboro, Ohio operation own 6.0 acres on which
there is 36,000 square foot building of plant and office space.
All facilities are maintained in good operating condition.
ITEM 3. LEGAL PROCEEDINGS
On February 11, 1993, The Feldspar Corporation and other non-
affiliated companies were named as defendants in a civil action
brought by Dryvit Systems, Inc. ("Dryvit") in the State of Rhode
Island captioned Dryvit Systems, Inc. v. The Feldspar
Corporation, Taggart Sand Products Corp., Surface Systems, Inc.,
The Morie Company, Inc., Eriez Magnetics, Inc., and Law
Engineering, Inc., C.A. No. KC 93-108, State of Rhode Island,
Kent. Dryvit alleges that between approximately 1985 and 1990,
sand purchased from TFC and other suppliers utilized by Dryvit to
manufacture exterior insulation finishes for the exterior of
buildings developed rust stains because the sand contained pyrite
and magnetic materials. Dryvit seeks unspecified monetary
damages and costs, including the costs associated with the repair
of the damaged structures.
TFC denies such allegations and claims and the Corporation
believes that it is remote that this litigation will result in
any material adverse effect to the Corporation's financial
condition or results of operations. The Corporation strongly
believes that this action is without merit, however, no assurance
can be made as to the outcome of this litigation. Although the
Corporation's primary insurer has attempted to limit its
coverage, the Corporation believes that its primary and excess
liability insurance is sufficient to cover any potentially
unfavorable outcome.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 10. EXECUTIVE AND OTHER OFFICERS OF THE REGISTRANT
Served in
Officer Position Age Position Since
Peter Lawson-Johnston Chairman of the Board of Directors 69
1975
Richard L. Lister President and Chief Executive Officer 57
1993
Allen J. Palmiere Vice President, Chief Financial Officer 43
1993 and Assistant Secretary
Peter J. Goodwin Vice President and President of 45
1994 Suzorite Mineral Products, Inc.
Terrance J. Hogan President, Alumitech, Inc. 40
1995
G. Russell Lewis President, Metal Powders 66
1986
Patricia K. Moran Assistant Secretary-Treasurer 30
1995
There are no family relationships between the officers listed
above. The term of office of each executive officer is until his
respective successor is elected and has qualified, or until his
death, resignation or removal. Officers are elected or appointed
by the Board of Directors annually at its first meeting following
the annual meeting of shareholders. All officers have held their
present positions for at least five years except Messrs. Lister,
Palmiere, Goodwin and Hogan and Ms. Moran.
Mr. Lister, who was elected to the Board of Directors on May 30,
1991, assumed his duties as Vice Chairman of the Board on July
23, 1991 and as President and Chief Executive Officer on June 1,
1993. Mr. Lister was Vice Chairman of Dundee Bancorp Inc. from
October 1991 to May 1993 and prior to that was Chief Executive
Officer of Campbell Resources Inc. from 1981 to 1988 and Chairman
from 1988 to 1992.
Mr. Palmiere assumed the duties of Chief Financial Officer in
October, 1993. From April 1992 to October 1993 he was a self-
employed consultant. From October 1990 to April 1991 he was the
Chief Financial Officer and Vice President of Breakwater
Resources Ltd. and from May 1991 to April 1992 was the Chief
Executive Officer of Breakwater Resources Ltd.
Mr. Goodwin became a Vice President of the Company in August
1994. From May 1993 to August 1994, Mr. Goodwin was a self-
employed consultant. Mr. Goodwin was President and Chief
Executive Officer of Miller and Co. from August 1990 to May 1993.
Mr. Hogan became President of Alumitech, Inc. in May 1995. Prior
to becoming President, Mr. Hogan was Chief Operating Officer of
Alumitech's subsidiary, Aluminum Waste Technology, Inc. from
December 1992 to May 1995. Prior to December 1992, Mr. Hogan was
the Vice President and Chief Financial Officer of American
Recovery Technology Systems, Inc.
Ms. Moran assumed the duties of Assistant Secretary-Treasurer in
February 1995 and has served in various capacities with the
Corporation since 1993.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS
Information responsive to this Item is set forth on page 21 of
registrant's Annual Report to Shareholders for the year ended
December 31, 1995 (the "Annual Report to Shareholders") and is
incorporated herein by reference. The Annual Report to
Shareholders is included as Exhibit 13 to this Form 10-K Annual
Report. The Annual Report to Shareholders, except for those
portions thereof which are expressly incorporated by reference
herein, is furnished for the information of the Commission and is
not to be deemed "filed" as part of this Form 10-K report.
ITEM 6. SELECTED FINANCIAL DATA
Information responsive to this item is set forth on page 44 of
the Annual Report to Shareholders and is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
Information responsive to this Item is set forth on pages 12
through 21 of the Annual Report to Shareholders and is
incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial statements responsive to this Item are set forth on
pages 22 through 43 of the Annual Report to Shareholders and are
incorporated herein by reference. The Supplementary Schedule
required by this Item is set forth on page S-1 of this Form 10-K
Annual Report. See Item 14.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K
1. Financial Statements and Independent Auditor's Report Filed
as Part of this Report:
(a) Consolidated Balance Sheets at December 31, 1995
and 1994, which information is incorporated by
reference under Item 8 of this report.
(b) Consolidated Statements of Shareholders' Equity
for the three years ended December 31, 1995, which
information is incorporated by reference under Item 8
of this report.
(c) Consolidated Statements of Income for the three
years ended December 31, 1995, which information is
incorporated by reference under Item 8 of this report.
(d) Consolidated Statements of Cash Flows for the
three years ended December 31, 1995, which information
is incorporated by reference under item 8 of this
report.
(e) Notes to the Consolidated Financial Statements,
which information is incorporated by reference under
Item 8 of this report.
(f) Independent Auditors' Report, which information is
incorporated by reference under Item 8 of this report.
2. Financial Statement Schedules and Independent Auditors'
Report Files as part of this Report:
Schedule
Number Description
- Report of Independent Accountants
Schedule IX Valuation and Qualifying
Accounts
and Reserves (page S-1)
All other financial statements and schedules not listed have been
omitted since the required information is included in the
consolidated financial statements or the notes thereto, or is not
applicable or required.
3. EXHIBITS
(3)(a) Certificate of Incorporation (Incorporated by reference
from Exhibit 4(a) of the Corporation's Registration
Statement on Form S-2, Registration No. 33-7774, filed on
August 5, 1986)
(3)(b) By-Laws (Incorporated by reference from Exhibit 3 of the
Corporation's Quarterly Report on Form 10-Q filed on May
13, 1988)
(3)(c) Amended and Restated Certificate of Incorporation
(Incorporated by reference from Exhibit A of the
Corporation's Definitive Proxy Statement, filed on March
29, 1995)
(4)(a) Indenture of Trust dated as of November 1, 1989 between
Niagara County Industrial Development Agency and The Bank
of New York as trustee for Pyron Corporation
(Incorporated by reference from Exhibit (4)(a) of the
Corporation's Annual Report on Form 10-K filed March 31,
1990)
(4)(b) Agency Mortgage and Security Agreement dated as of
November 1, 1989 from Pyron Corporation and Niagara
County Industrial Development Agency to The Bank of New
York (Incorporated by reference from Exhibit (4)(b) of
the Corporation's Annual Report on Form 10-K filed March
31, 1990)
(4)(c) Letter of Credit Reimbursement Agreement dated as of
November 1, 1989 between Pyron Corporation and Chemical
Bank (Incorporated by reference from Exhibit (4)(c) of
the Corporation's Annual Report on Form 10-K filed March
31, 1990)
(4)(d) First Amendment to Letter of Credit Reimbursement
Agreement dated as of November 1, 1989 between Pyron
Corporation and Chemical Bank (Incorporated by reference
from Exhibit (4)(d) of the Corporation's Annual Report on
Form 10-K filed March 31, 1990)
(4)(e) Second Amendment to Letter of Credit Reimbursement
Agreement dated as of March 15, 1995 between Pyron
Corporation and Chemical Bank (Incorporated by reference
from Exhibit (4)(e) of the Corporation's Annual Report on
Form 10-K filed March 30, 1995)
(4)(f) Bank Mortgage and Security Agreement dated as of November
1, 1989 from Pyron Corporation and Niagara County
Industrial Development Agency to Chemical Bank
(Incorporated by reference from Exhibit (4)(e) of the
Corporation's Annual Report on Form 10-K filed March 31,
1990)
(4)(g) Building Loan Agreement dated as of November 1, 1989
between Chemical Bank and Pyron Corporation
(Incorporated by reference from Exhibit (4)(f) of the
Corporation's Annual Report on Form 10-K filed March 31,
1990)
(4)(h) Security Agreement dated as of November 1, 1989 between
Pyron Corporation and Chemical Bank (Incorporated by
reference from Exhibit (4)(g) of the Corporation's Annual
Report on Form 10-K filed March 31, 1990)
(4)(i) Corporate Guaranty dated as of November 1, 1989 from
Zemex Corporation to Chemical Bank (Incorporated by
reference from Exhibit (4)(h) of the Corporation's Annual
Report on Form 10-K filed March 31, 1990)
(4)(j) First Amendment to Corporate Guaranty dated as of
November 1, 1989 of Zemex Corporation to Chemical Bank
(Incorporated by reference from Exhibit (4)(i) of the
Corporation's Annual Report on Form 10-K filed March 31,
1990)
(4)(k) Second Amendment to Corporate Guaranty dated as of March
14, 1991 of Zemex Corporation to Chemical Bank
(Incorporated by reference from Exhibit (4)(j) of the
Corporation's Annual Report on Form 10-K filed March 31,
1991)
(4)(l) Third Amendment to Corporate Guaranty dated as of
February 25, 1992 of Zemex Corporation to Chemical Bank
(Incorporated by reference from Exhibit (4)(m) of the
Corporation's Annual Report on Form 10-K filed March 31,
1993)
(4)(m) Fourth Amendment to Corporate Guaranty dated as of March
8, 1993 of Zemex Corporation to Chemical Bank
(Incorporated by reference from Exhibit (4)(o) of the
Corporation's Annual Report on Form 10-K filed March 31,
1993)
(4)(n) Fifth Amendment to Corporate Guaranty dated as of March
15, 1995 of Zemex Corporation to Chemical Bank
(Incorporated by reference from Exhibit (4)(n) of the
Corporation's Annual Report on Form 10-K filed March 30,
1995)
(4)(o) Irrevocable Standby Letter of Credit between Florida Gas
Utility and The Feldspar Corporation dated December 16,
1992 (Incorporated by reference from Exhibit (4)(q) of
the Corporation's Annual Report on Form 10-K filed March
31, 1993)
(4)(p) Loan and Security Agreement dated as of March 15, 1995
among Zemex Corporation and The Feldspar Corporation and
NationsBank of Tennessee, N.A. and Chemical Bank and
NationsBank of Tennessee, N.A., as Agent (Incorporated by
reference from Exhibit (4)(p) of the Corporation's Annual
Report on Form 10-K filed March 30, 1995)
*(10)(a) Key Executive Common Stock Purchase Plan
(Incorporated by reference from Exhibit (10)(b) of the
Corporation's Annual Report on Form 10-K filed March 31,
1991)
(10)(b)Consent to Assignment of Lease and to Agreement Sublease,
and permission to Make Payments dated November 7, 1978
each from Joberta Enterprises, Inc. to NL Industries,
Inc. and The Feldspar Corporation (Incorporated by
reference from Exhibit 10(pp) to the Corporation's
Registration Statement on Form S-2, Registration No. 33-
7774, filed on August 5, 1986)
(10)(c)Additional Lease Agreement dated as of November 1, 1989
between Niagara County Industrial Development Agency and
Pyron Corporation (Incorporated by reference from
Exhibit (10)(ll) of the Corporation's Annual Report on
Form 10-K filed March 31, 1990)
*(10)(d) Employment Agreement dated February 5, 1991 between
Zemex Corporation and Robert W. Morris (Incorporated by
reference from Exhibit (10)(ll) of the Corporation's
Annual Report on Form 10-K filed March 31, 1992)
*(10)(e) Option Agreement with Paul Carroll dated September
17, 1991 (Incorporated by reference from Exhibit
(10)(ll) of the Corporation's Annual Report on Form 10-K
filed March 31, 1992)
*(10)(f) Option Agreement with Peter Lawson-Johnston dated
September 17, 1991 (Incorporated by reference from
Exhibit (10)(ll) of the Corporation's Annual Report on
Form 10-K filed March 31, 1992)
*(10)(g) Option Agreement with John Donovan dated September
17, 1991 (Incorporated by reference from Exhibit
(10)(ll) of the Corporation's Annual Report on Form 10-K
filed March 31, 1992)
*(10)(h) Subscription Agreement with Richard L. Lister dated
November 26, 1991 (Incorporated by reference from
Exhibit (5)(a) of the Corporation's Annual Report on Form
10-K filed March 31, 1992)
(10)(i)Asset Purchase Agreement dated March 18, 1991 among
Unimin Corporation, Purchaser; Zemex Corporation, Seller
and The Feldspar Corporation, Operating Subsidiary
(Incorporated by reference from Exhibit (5)(a) of the
Corporation's Annual Report on Form 10-K filed March 31,
1991)
(10)(j)Lease Agreement dated September 5, 1990 between the State
of Connecticut, Department of Transportation and The
Feldspar Corporation (Incorporated by reference from
Exhibit (5)(b) of the Corporation's Annual Report on Form
10-K filed March 31, 1991)
(10)(k)Ligonier Purchase Agreement and Second Plan of
Reorganization dated March 2, 1992 among Pyron Metal
Powders, Inc., a wholly-owned subsidiary of Zemex
Corporation, Purchaser and Ligonier Powders, Inc., Seller
(Incorporated by reference from Exhibit (5)(a) of the
Corporation's Annual Report on Form 10-K filed March 31,
1993)
(10)(l)1995 Stock Option Plan (Incorporated by reference from
Exhibit B of the Corporation's 1995 Definitive Proxy
Statement, filed on March 29, 1995)
(10)(m)Stock Purchase Agreement dated August 10, 1993 between
Zemex Corporation, Zemex Canada Inc., an Ontario
corporation and a direct wholly-owned subsidiary of Zemex
Corporation, Dundee Bancorp Inc., an Ontario corporation;
and Dundee Bancorp International Inc., a Delaware
corporation, and a direct wholly-owned subsidiary of
Dundee Bancorp Inc., with respect to the acquisition of
Suzorite Mica Products Inc. (Incorporated by reference
from Exhibit 2 of the Corporation's Current Report on
Form 8-K filed September 7, 1993)
(10)(n)Capital Stock Purchase Warrant dated September 14, 1993
issued to Dundee Bancorp International Inc. pursuant to
the Stock Purchase Agreement referred to in 10(m).
(Incorporated by reference from Exhibit 4(a) of the
Corporation's Current Report on Form 8-K filed September
7, 1993)
(10)(o)Registration Rights Agreement dated September 14, 1993
between Zemex Corporation and Dundee Bancorp
International Inc. (Incorporated by reference from
Exhibit 4(b) of the Corporation's Current Report on Form
8-K filed September 7, 1993)
(10)(p)Asset Purchase Agreement dated September 3, 1993 between
U.S. Silica Company, The Feldspar Corporation and Zemex
Corporation with respect to the sale of the Virginia
aplite facility (Incorporated by reference from Exhibit
10(at) of the Corporation's Annual Report on Form 10-K
filed March 31, 1994)
(10)(q)Stock Purchase Agreement dated November 15, 1993 between
Americo Malay Mineral Company and Zemex Corporation with
respect to the sale of 2,500,002 common shares of
Perangsang Pasifik Senderian Berhad, a corporation
organized and existing under the laws of the Federal
Republic of Malaysia (Incorporated by reference from
Exhibit 10(au) of the Corporation's Annual Report on Form
10-K filed March 31, 1994)
(10)(r)Suzorite Mica Product Inc.'s Mining Lease dated August
25, 1975 between the Province of Quebec and Marietta
Resources International Ltd. (Incorporated by reference
from Exhibit 10(av) of the Corporation's Annual Report on
Form 10-K filed March 31, 1994)
(10)(s)Employee Stock Purchase Plan (Incorporated by reference
as Exhibit A to the Corporation's Proxy Statement filed
May 6, 1994)
(10)(t)Stockholders Agreement dated June 10, 1994 among
Alumitech, Inc., Clarion Capital Corporation, DCC
Equities Limited and Moshe Dan Yerushalmi, John Hocevar
and Terrance Hogan and Zemex Corporation (Incorporated by
reference as Exhibit 10(ax) to the Corporation's
Registration Statement on Form S-1, Registration No. 33-
82638, filed on August 22, 1994)
(10)(u)Asset Purchase Agreement dated December 7, 1994 between
Whittaker, Clark & Daniels, Inc., Clark Minerals, Inc.,
Cherokee Minerals, Inc. and Pioneer Talc Company and
Suzorite Mineral Products, Inc. and Zemex Corporation
(Incorporated by reference from Exhibit 10(u) of the
Corporation's Annual Report on Form 10-K filed March 30,
1995)
(13) 1995 Annual Report to Shareholders
(22) Subsidiaries of the Registrant
(24)(a)Consent of Deloitte & Touche
The Corporation will furnish copies of these documents to
requesting shareholders upon payment of $10.80 per document.
* Management contract or compensatory plan or arrangement.
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.
ZEMEX CORPORATION
By:/s/ RICHARD L. LISTER
Dated: March 31, 1996 Richard L. Lister
President and ChiefExecutive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report is signed below by the following persons on
behalf of the registrant and in the capacities and on the dated
indicated:
Title
/s/ PETER LAWSON-JOHNSTON Chairman of the Board and Director
Peter Lawson-Johnston
/s/ RICHARD L. LISTER President and Chief Executive Officer
Richard L. Lister and Director (Principal Executive
Officer)
/s/ PAUL A. CARROLL Director
Paul A. Carroll
/S/ MORTON A. COHEN Director
Morton A. Cohen
/s/ JOHN M. DONOVAN Director
John M. Donovan
/s/ THOMAS B. EVANS, JR. Director
Thomas B. Evans, Jr.
Title
/s/ NED GOODMAN Director
Ned Goodman
/s/ PATRICK H. O'NEILL Director
Patrick H. O'Neill
/s/ WILLIAM J. VANDEN HEUVEL Director
William J. vanden Heuvel
/s/ ALLEN J. PALMIERE Vice President, Chief Financial
Officer and
Allen J. Palmiere and Assistant Secretary (Principal
Financial
and Accounting Officer)
ZEMEX CORPORATION
And Subsidiaries
SCHEDULE IX - VALUATION AND QUALIFYING
ACCOUNTS AND RESERVES
For the Year Ended December 31,
Column A Column B Column C Column D Column E Column
F
Addition
Balance s Balance
at Charged Other At End
Description Beginnin to Costs Additions Deduction of
g and s Period
of Expenses
Period
1995
Reserves
Other $549,000 $154,000 _ $ 98,000 $605,000
Allowance for
Uncollectable 414,000 77,000 $2,000 107,000
Accounts 386,000
1994
Reserves
Repairs _ _ _ _ _
Employee $ _ _ $ _
Severance 80,000 $255,000 _ 80,000 $549,00
Other 482,000 188,000 0
Allowance for 85,000 _
Uncollectable 371,000 42,000 414,000
Accounts
1993
Reserves
Repairs $381,000 _ $381,000 (a
Employee 308,000 _ _ 686,000 ) _
Severance 420,000 $458,000 _ 32,000 $80,000
Other 94,000 (b 482,000
)
Allowance for 241,000 _ 98,000
Uncollectable 228,000 371,000
Accounts
(a) PPSB sold in 1993.
(b) Severance expense during 1993.