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UNITED STATES SECURITIES AND EXCHANGE COMMISSION{PRIVATE }
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 December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file number 0-5128
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SCOTT'S LIQUID GOLD-INC.
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(Exact name of Registrant as specified in its charter)
Colorado 84-0920811
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4880 Havana Street, Denver, CO 80239
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (303) 373-4860
Securities registered pursuant to Section 12(b) of the Act:
$0.10 Par Value Common Stock
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(Title of Class)
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K ( Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of Registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ X ]
The aggregate market value of the Registrant's voting stock held as of March 11,
1996 by non-affiliates of the Registrant was $15,414,622. This calculation
assumes that certain parties may be affiliates of the Registrant and that
therefore, 5,605,317 shares of voting stock are held by non-affiliates.
As of March 11, 1996, the Registrant had 10,030,900 shares of its $0.10 par
value common stock outstanding.
Documents Incorporated by Reference
The Registrant's 1995 Annual Report to shareholders is incorporated by reference
in Parts I, II and IV. The Registrant's definitive Proxy Statement for the
Annual Meeting of shareholders to be held on May 1, 1996, is incorporated by
reference in Part III.
SCOTT'S LIQUID GOLD-INC.
ANNUAL REPORT ON
FORM 10-K
FOR YEAR ENDED DECEMBER 31, 1995
PART I
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ITEM 1. BUSINESS.
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Portions of the 1995 Annual Report to shareholders of Scott's Liquid
Gold-Inc. (the "Company" or "Registrant") are attached to this Report as Exhibit
13 and are called in this Report the "Annual Report". The information set forth
under the headings "Description of Business," "Products and Services," and
"Management Discussion and Analysis of Financial Condition and Results of
Operations" of the Annual Report hereby is incorporated by reference into this
Report.
ITEM 2. PROPERTIES.
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The information set forth under "Description of Business - Properties" and
"Management Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources" of the Annual Report hereby is
incorporated by reference into this Report.
ITEM 3. LEGAL PROCEEDINGS.
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The information set forth under "Description of Business - Legal
Proceedings" and "Management Discussion and Analysis of Financial Condition and
Results of Operations - Other" of the Annual Report hereby is incorporated by
reference into this Report. The lawsuit by the United States Department of
Justice at the request of the United States Army, as described therein, is
United States of America v. Scott's Liquid Gold-Inc., in the United States
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District Court for the District of Colorado and was instituted on September 8,
1994.
The lawsuits against private label producers, as described in the Report,
are the following: Neoteric Cosmetics, Inc. v. Evron Industries, Inc., in the
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United States District Court for the District of Colorado, which was instituted
on January 30, 1996; and Neoteric Cosmetics, Inc. v. Perrigo Co. and Cumberland-
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Swan, Inc., in the United States District Court for the District of
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Massachusetts, which was instituted on July 18, 1995.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
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Not applicable.
PART II
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ITEM 5, MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
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The information set forth under "Corporate Data" and "Market Information"
of the Annual Report hereby is incorporated by reference into this Report.
As of March 11, 1996, the Company had approximately 1,400 shareholders of
record.
The high and low prices of Scott's Liquid Gold-Inc. common stock as traded
on the New York Stock Exchange for the 1995 year were as follows:
Three Months Ended 1995
High Low
March 31 6 5-1/8
June 30 5-5/8 3-3/4
September 30 4-3/4 3-1/4
December 31 3-5/8 2-1/2
ITEM 6. SELECTED FINANCIAL DATA.
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The information set forth under "Selected Financial Data" of the Annual
Report hereby is incorporated by reference into this Report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
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RESULTS OF OPERATIONS.
The information set forth under "Management Discussion and Analysis of
Financial Condition and Results of Operations" of the Annual Report hereby is
incorporated by reference into this Report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
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The information set forth under "Consolidated Financial Statements," "Notes
to Consolidated Financial Statements," "Report of Independent Public
Accountants" and "Selected Financial Data - Selected Quarterly Financial Data"
of the Annual Report hereby is incorporated by reference into this Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
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FINANCIAL DISCLOSURE.
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Not applicable.
PART III
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ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
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ITEM 11. EXECUTIVE COMPENSATION.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
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For Part III, the information set forth in the Company's definitive Proxy
Statement for the Company's Annual Meeting of Shareholders to be held on May 1,
1996, hereby is incorporated by reference into this Report.
PART IV
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ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
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(a)(1) Financial Statements:
Consolidated Statements of Income -
Years ended December 31, 1995, 1994 and 1993
Consolidated Balance Sheets -
December 31, 1995 and 1994
Consolidated Statements of Cash Flows -
Years ended December 31, 1995, 1994 and 1993
Consolidated Statements of Shareholders' Equity -
Years ended December 31, 1995, 1994 and 1993
Notes to Consolidated Financial Statements
Report of Independent Public Accountants
(2) Financial Statement Schedules:
II - Valuation and Qualifying Accounts -
Years ended December 31, 1995, 1994 and 1993
Inasmuch as Registrant is primarily a holding company and all subsidiaries
are wholly-owned, only consolidated statements are being filed. Schedules
other than those listed above are omitted because of the absence of the
conditions under which they are required or because the information is included
in the financial statements or notes to the financial statements.
(b) Reports on Form 8-K:
Not applicable.
(c) Exhibits:
DOCUMENT
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EXHIBIT
NO.
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3.1 Articles of Incorporation, as amended and restated
through May 4, 1988, incorporated by reference to
Exhibit 3.1 of Annual Report on Amended Form 10-K for
the year ended December 31, 1993.
3.2 Bylaws, as amended through February 27, 1996.
4.1 Indenture of Trust (including form of First Mortgage
Bond Due 2001) dated July 1, 1994 between Registrant
and Norwest Bank Colorado, N.A. as Trustee,
incorporated by reference to Exhibit 4.1 of the
Company's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1994.
4.2 Combination Deed of Trust, Security Agreement and
Fixture Financing Statement, dated July 29, 1994,
between the Company, as Grantor, the Public Trustee
for the City and County of Denver, Colorado, and
Norwest Bank Colorado, N.A. as Beneficiary,
incorporated by reference to Exhibit 4.2 of the
Company's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1994.
10.1* Scott's Liquid Gold-Inc. Fourth Amended Health and
Accident Plan effective January 1, 1995, incorporated
by reference to Exhibit 10.1 of Annual Report on Form
10-K for the year ended December 31, 1994.
10.2* Amended Key Executive Disability Plan--Scott's Liquid
Gold-Inc., incorporated by reference to Exhibit 10.2
of Annual Report on Form 10-K for the year ended
December 31, 1992.
10.3* Scott's Liquid Gold-Inc. Restricted Stock Plan
effective July 22, 1987, incorporated by reference to
Exhibit 10.3 of Annual Report on Amended Form 10-K for
the year ended December 31, 1993.
10.4* 1996 Key Executive Bonus Plan.
10.5* Indemnification Agreements dated May 6, 1987 between
the Registrant and Jerome J. Goldstein, Mark E.
Goldstein, Carolyn J. Anderson, and Barry Shepard,
incorporated by reference to Exhibit 10.5 of Annual
Report on Amended Form 10-K for the year ended
December 31, 1993. An Indemnification Agreement dated
October 4, 1990 between the Registrant and Michael J.
Sheets, incorporated by reference to Exhibit 10.5 of
Annual Report on Form 10-K for the year ended December
31, 1990. An Indemnification Agreement dated December
23, 1991 between the Registrant and Dennis H. Field,
and two separate Indemnification Agreements dated
January 17, 1992 between the Registrant and Michael J.
Sheets and Dennis H. Field, incorporated by reference
to Exhibit 10.5 of Annual Report on Form 10-K for the
year ended December 31, 1992. Indemnification
Agreement dated February 23, 1993 between the
Registrant and James F. Keane, incorporated by
reference to Exhibit 10.5 of Quarterly Report on Form
10-Q for the three months ended March 31, 1993.
10.6* Scott's Liquid Gold-Inc. Employee Stock Ownership Plan
and Trust Agreement, effective January 1, 1989, and
First and Second Amendments thereto, incorporated by
reference to Exhibit 10.6 of Annual Report on Form 10-
K for the year ended December 31, 1994.
10.7* 1986 Incentive Stock Option Plan and First Amendment
thereto, incorporated by reference to Exhibit 4.4 of
the Company's Registration Statement No. 33-63254 on
Form S-8, filed with the Commission on May 25, 1993.
10.8* Scott's Liquid Gold-Inc. 1993 Stock Option Plan for
Outside Directors, incorporated by reference to
Exhibit 4.7 of the Company's Registration Statement
No. 33-63254 on Form S-8, filed with the Commission on
May 25, 1993.
10.9 Compliance Order on Consent, executed by the Colorado
Department of Health on March 5, 1990, originally
filed with the Commission on Form 10-K for the year
ended December 31, 1989, and incorporated by reference
to Exhibit 10.9 of Annual Report on Form 10-K for the
year ended December 31, 1994.
13 Portions of 1995 Annual Report to Security Holders.
21 List of Subsidiaries, incorporated by reference to
Exhibit 21 of Annual Report on Form 10-K for the year
ended December 31, 1994.
23 Consent of Arthur Andersen LLP.
24 Powers of Attorney.
27 Financial Data Schedule.
*Management contract or compensatory plan or arrangement
Valuation and
Qualifying
Accounts
Schedule II
Column A Column B Column C Column D Column E
Additions
Balance 1 2
at Charge Balance
Description Beginning to Charges at
of Costs and to other End of
Period Expenses Accounts Deductions Period
Year Ended
December 31, 1995
Allowance for
doubtful accounts $345,900 $229,000 $73,800 (1) $501,100
Year Ended
December 31, 1994
Allowance for
doubtful accounts $184,800 $174,400 $13,300 (1) $345,900
Year Ended
December 31, 1993
Allowance for
doubtful accounts $150,200 $44,900 $10,300 (1) $184,800
(1) Uncollectible accounts written off, net of recoveries.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and
Shareholders of Scott's Liquid Gold-Inc.:
We have audited in accordance with generally accepted auditing
standards, the consolidated financial statements of Scott's Liquid Gold-
Inc. and subsidiaries' annual report to shareholders incorporated by
reference in this Form 10-K, and have issued our report thereon dated
January 15, 1996. Our audit was made for the purpose of forming an
opinion on those statements taken as a whole. The schedule listed in
the index of financial statements is the responsibility of the company's
management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and,
in our opinion, fairly states in all material respects the financial
data required to be set forth therein in relation to the basic
financial statements taken as a whole.
/s/ Arthur Andersen LLP
Denver, Colorado
January 15, 1996
SIGNATURES
Pursuant to the requirements of Section 13 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.
Date: March 28, 1996.
SCOTT'S LIQUID GOLD-INC.
a Colorado corporation
By: /s/ Barry Shepard
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Barry Shepard, as an Attorney-in-Fact
for Mark E. Goldstein, President
Principal Executive Officer
By: /s/ Barry Shepard
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Barry Shepard, Treasurer
Principal Financial Officer
By: /s/ Jeffry B. Johnson
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Jeffry B. Johnson, Controller
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons of the Registrant and in
the capacities and on the dates indicated:
Date Name and Title Signature
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March 28, 1996 Carolyn J. Anderson, )
Director )
)
March 28, 1996 Mark E. Goldstein, )
Director )
)
March 28, 1996 Jerome J. Goldstein, ) /s/ Barry Shepard
Director ) -------------------------
) Barry Shepard, for
) himself and as Attorney-
) in-Fact for the named
) directors who
March 28, 1996 Dennis H. Field, ) together constitute all of
Director ) the members of
) Registrant's Board of
) Directors
March 28, 1996 Michael J. Sheets, )
Director )
EXHIBIT INDEX
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EXHIBIT DOCUMENT
NO. --------
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3.1 Articles of Incorporation, as amended and restated
through May 4, 1988, incorporated by reference to
Exhibit 3.1 of Annual Report on Amended Form 10-K
for the year ended December 31, 1993.
3.2 Bylaws, as amended through February 27, 1996.
4.1 Indenture of Trust (including form of First
Mortgage Bond Due 2001) dated July 1, 1994 between
Registrant and Norwest Bank Colorado, N.A. as
Trustee, incorporated by reference to Exhibit 4.1
of the Company's Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 1994.
4.2 Combination Deed of Trust, Security Agreement and
Fixture Financing Statement, dated July 29, 1994,
between the Company, as Grantor, the Public Trustee
for the City and County of Denver, Colorado, and
Norwest Bank Colorado, N.A. as Beneficiary,
incorporated by reference to Exhibit 4.2 of the
Company's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1994.
10.1* Scott's Liquid Gold-Inc. Fourth Amended Health and
Accident Plan effective January 1, 1995,
incorporated by reference to Exhibit 10.1 of Annual
Report on Form 10-K for the year ended December 31,
1994.
10.2* Amended Key Executive Disability Plan--Scott's
Liquid Gold-Inc., incorporated by reference to
Exhibit 10.2 of Annual Report on Form 10-K for the
year ended December 31, 1992.
10.3* Scott's Liquid Gold-Inc. Restricted Stock Plan
effective July 22, 1987, incorporated by reference
to Exhibit 10.3 of Annual Report on Amended Form
10-K for the year ended December 31, 1993.
10.4* 1996 Key Executive Bonus Plan.
10.5* Indemnification Agreements dated May 6, 1987
between the Registrant and Jerome J. Goldstein,
Mark E. Goldstein, Carolyn J. Anderson, and Barry
Shepard, incorporated by reference to Exhibit 10.5
of Annual Report on Amended Form 10-K for the year
ended December 31, 1993. An Indemnification
Agreement dated October 4, 1990 between the
Registrant and Michael J. Sheets, incorporated by
reference to Exhibit 10.5 of Annual Report on Form
10-K for the year ended December 31, 1990. An
Indemnification Agreement dated December 23, 1991
between the Registrant and Dennis H. Field, and two
separate Indemnification Agreements dated January
17, 1992 between the Registrant and Michael J.
Sheets and Dennis H. Field, incorporated by
reference to Exhibit 10.5 of Annual Report on Form
10-K for the year ended December 31, 1992.
Indemnification Agreement dated February 23, 1993
between the Registrant and James F. Keane,
incorporated by reference to Exhibit 10.5 of
Quarterly Report on Form 10-Q for the three months
ended March 31, 1993.
10.6* Scott's Liquid Gold-Inc. Employee Stock Ownership
Plan and Trust Agreement, effective January 1,
1989, and First and Second Amendments thereto,
incorporated by reference to Exhibit 10.6 of Annual
Report on Form 10-K for the year ended December 31,
1994.
10.7* 1986 Incentive Stock Option Plan and First
Amendment thereto, incorporated by reference to
Exhibit 4.4 of the Company's Registration Statement
No. 33-63254 on Form S-8, filed with the Commission
on May 25, 1993.
10.8* Scott's Liquid Gold-Inc. 1993 Stock Option Plan for
Outside Directors, incorporated by reference to
Exhibit 4.7 of the Company's Registration Statement
No. 33-63254 on Form S-8, filed with the Commission
on May 25, 1993.
10.9 Compliance Order on Consent, executed by the
Colorado Department of Health on March 5, 1990,
originally filed with the Commission on Form 10-K
for the year ended December 31, 1989, and
incorporated by reference to Exhibit 10.10 of
Annual Report on Form 10-K for the year ended
December 31, 1994.
13 Portions of 1995 Annual Report to Security Holders.
21 List of Subsidiaries, incorporated by reference to
Exhibit 21 of Annual Report on Form 10-K for the
year ended December 31, 1994.
23 Consent of Arthur Andersen LLP.
24 Powers of Attorney.
27 Financial Data Schedule
*Management contract or compensatory plan or arrangement