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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
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________________ to _____________________
Commission file number 0-5128
SCOTT'S LIQUID GOLD-INC.
(Exact name of Registrant as specified in its charter)
Colorado 84-0920811
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
4880 Havana Street, Denver, CO 80239
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (303) 373-4860
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
$0.10 Par Value Common Stock New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (? 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 5,
1997 by non-affiliates of the Registrant was $10,275,013. This calculation
assumes that certain parties may be affiliates of the Registrant and that,
therefore, 5,480,007 shares of voting stock are held by non-affiliates.
As of March 5, 1997, the Registrant had 10,030,900 shares of its $0.10 par value
common stock outstanding.
Documents Incorporated by Reference
The Registrant's 1996 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 7, 1997, is incorporated by
reference in Part III.
SCOTT'S LIQUID GOLD-INC.
ANNUAL REPORT ON
FORM 10-K
FOR YEAR ENDED DECEMBER 31, 1996
PART I
Item 1. Business.
Portions of the 1996 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.
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.
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.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
The information set forth under "Corporate Data" and "Market Information"
of the Annual Report hereby is incorporated by reference into this Report.
As of March 5, 1997, the Company had approximately 1,400 shareholders of
record.
Item 6. Selected Financial Data.
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
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.
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
Financial Disclosure.
Not applicable.
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.
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 7,
1997, hereby is incorporated by reference into this Report.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a)(1) Financial Statements:
Consolidated Statements of Operations -
Years ended December 31, 1996, 1995 and 1994
Consolidated Balance Sheets -
December 31, 1996 and 1995
Consolidated Statements of Cash Flows -
Years ended December 31, 1996, 1995 and 1994
Consolidated Statements of Shareholders' Equity -
Years ended December 31, 1996, 1995 and 1994
Notes to Consolidated Financial Statements
Report of Independent Public Accountants
(2) Financial Statement Schedules:
II - Valuation and Qualifying Accounts -
Years ended December 31, 1996, 1995 and 1994
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:
Exhibit
No. Document
3.1 Restated Articles of Incorporation, as amended and
restated through May 1, 1996, incorporated by
reference to Exhibit 3.1 of the Company's Quarterly
Report on Form 10-Q for the quarterly period ended
June 30, 1996.
3.2 Bylaws, as amended through February 27, 1996,
incorporated by reference to Exhibit 3.2 of Annual
Report on Form 10-K for the year ended December 31,
1995.
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* 1997 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. 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.
13 Portions of 1996 Annual Report to Security Holders.
21 List of Subsidiaries.
23 Consent of Arthur Andersen LLP.
24 Powers of Attorney.
27 Financial Data Schedule.
____________________________________
*Management contract or compensatory plan or arrangement
Supporting Schedules
Valuation and Qualifying Accounts
Schedule II
Scott's Liquid Gold-Inc. and Subsidiaries
Column A Column B Column C Column D Column E
Additions Deductions
Balance 1 2
at Charge to Charges to Balance
Beginning Costs and Other at End
Description of Period Expenses Accounts of Period
Year Ended
December 31, 1996
Allowance for
doubtful accounts $494,200 $270,900 $184,700 (1) $580,400
Year Ended
December 31, 1995
Allowance for
doubtful accounts $339,000 $229,000 $73,800 (1) $494,200
Year Ended
December 31, 1994
Allowance for
doubtful accounts $177,900 $174,400 $13,300 (1) $339,000
(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 the accompanying consolidated balance sheets of Scott's Liquid
Gold-Inc. (a Colorado corporation) and subsidiaries as of December 31, 1996 and
1995, and the related consolidated statements of operations, shareholders'
equity and cash flows for each of the three years in the period ended December
31, 1996. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements 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 financial statements referred to above present fairly, in
all material respects, the financial position of Scott's Liquid Gold-Inc. and
subsidiaries as of December 31, 1996 and 1995, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1996, in conformity with generally accepted accounting principles.
Arthur Andersen LLP
Denver, Colorado,
January 21, 1997
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 27, 1997.
SCOTT'S LIQUID GOLD-INC.
a Colorado corporation
By: /s/ Mark E. Goldstein
Mark E. Goldstein, President
Principal Executive Officer
By: /s/ Barry Shepard
Barry Shepard, Treasurer
Principal Financial Officer
By: /s/ Jeffry B. Johnson
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
March 27, 1997 Carolyn J. Anderson, )
Director )
)
March 27, 1997 Mark E. Goldstein, )
Director )
)
March 27, 1997 Jerome J. Goldstein, ) /s/ Barry Shepard
Director ) Barry Shepard, for himself
and as Attorney-in-Fact for
the named directors who
March 27, 1997 Dennis H. Field, ) together constitute all of
Director ) the members of
) Registrant's Board of
Directors
)
March 27, 1997 James F. Keane, )
Director )
)
March 27, 1997 Michael J. Sheets, )
Director )
)
March 27, 1997 Barry Shepard, )
Director )
EXHIBIT INDEX
Exhibit Document
No.
3.1 Restated Articles of Incorporation, as amended and
restated through May 1, 1996, incorporated by
reference to Exhibit 3.1 of the Company's Quarterly
Report on Form 10-Q for the quarterly period ended
June 30, 1996.
3.2 Bylaws, as amended through February 27, 1996,
incorporated by reference to Exhibit 3.2 of Annual
Report on Form 10-K for the year ended December 31,
1995.
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* 1997 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. 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.
13 Portions of 1996 Annual Report to Security Holders.
21 List of Subsidiaries.
23 Consent of Arthur Andersen LLP.
24 Powers of Attorney.
27 Financial Data Schedule
*Management contract or compensatory plan or arrangement