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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
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 1-5005
SELAS CORPORATION OF AMERICA
(Exact name of registrant as specified in its charter)
Pennsylvania
23-1069060
(State or other jurisdiction of (IRS Employer Identification No.)
Incorporation or organization)
Dresher, Pennsylvania 19025
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (215) 646-6600
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Shares, $1 par value per share American 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 Securites 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 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, as of March 14, 2001, of the voting stock held by
non-affiliates of the registrant was approximately $17,814,865 (Aggregate
market value is estimated solely for the purposes of this report and shall
not be construed as an admission for the purposes of determining affiliate
status.)
At March 14, 2001, there were 5,119,214 of the Company's common shares
outstanding (exclusive of treasury shares).
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Company's 2000 annual report to shareholders are incorporated
by reference into Part II of this report. Portions of the Company's proxy
statement for the 2001 annual meeting of shareholders are incorporated by
reference into Part III of this report. Except for the parts of such
documents that have been specifically incorporated herein by reference, such
documents shall not be deemed "filed" for the purposes of this report.
PART I
ITEM 1. Business
Selas Corporation of America (together with its subsidiaries, unless the
context otherwise requires, referred to herein as the "Company",) was
incorporated in Pennsylvania in 1930. The Company is a diversified firm with
international operations and sales that engages in a range of products. The
Company, headquartered in Dresher, Pennsylvania with subsidiaries in
Minnesota, Ohio, California, England, France, Germany, Italy, Japan, Portugal
and Singapore, operates directly or through subsidiaries in three business
segments.
Under the Selas TM name, the Heat Technology segment designs and manufactures
specialized industrial heat technology systems and equipment for steel, glass
and other manufacturers worldwide. The Company's Precision Miniature Medical
and Electronic Products segment designs and manufactures microminiature
components and molded plastic parts primarily for the hearing instrument
manufacturing industry and also for the electronics, telecommunications,
computer and medical equipment industries. The Company's Tire Holders, Lifts
and Related Products segment manufactures products, primarily based on cable
winch designs, for use as original equipment by the pick-up truck and minivan
segment of the automotive industry.
Financial data relating to industry segments, geographical summary of assets
and operations, export sales and major customers are set forth in Note 4 of
the Company's consolidated financial statements.
HEAT TECHNOLOGY
The Company specializes in the controlled application of heat to achieve
precise process and temperature control. The Company's principal heat
technology equipment and systems are large custom-engineered furnaces and
smaller standard-engineered systems, burners and combustion control equipment.
CUSTOM-ENGINEERED FURNACES
Products and Industries Served. The Company designs specialized furnaces for
use primarily in the steel and glass industries worldwide. The furnaces are
engineered to subject a customer's products to carefully controlled heating
and cooling processes in order to improve the physical characteristics of
those products. Each furnace is custom-engineered by the Company to meet
customer's specific requirements. The Company believes that the Selas TM
name, its reputation for quality and its leadership in the design and
engineering of direct gas-fired heat processing furnaces are important
factors in its business. The Company also offers gas-fired radiant tube and
electric heating technology for heat processing furnaces.
The Company's custom-engineered systems for the steel industry include
continuous annealing furnaces and continuous galvanizing furnaces.
Continuous annealing furnaces are used to heat-treat semi-finished steel
sheet and strip to soften it to improve the ductility of the steel, thereby
making it suitable for use in the manufacture of automobiles, appliances and
other items. Continuous galvanizing furnaces consist of continuous annealing
furnaces plus the components used to apply a zinc coating to steel strip to
improve its resistance to corrosion.
The Company's furnaces for the glass industry are used for the tempering,
bending and etching of glass. The glass tempering process toughens glass
plate through a controlled process of heating and cooling. Glass
manufacturers use the Company's glass bending furnaces to heat and bend plate
glass for automotive and architectural uses. Other furnaces are designed to
harden and etch glass and ceramic tableware.
From time to time, the Company also designs various other specialized
furnaces for use by manufacturers in a variety of industries to suit
particular process requirements. For example, over the years the Company has
engineered large barrel line furnaces used for the continuous heat treatment
of steel pipe, tube or bar.
Marketing and Competition. The Company markets its custom-engineered
furnaces on a global basis. Marketing personnel are located at the Company's
offices in Dresher, Paris, Ratingen, Derbyshire, Milan, Leiria, Lyon, and
Japan. Over the years, the Company has installed custom-engineered systems
in Europe, North America, South America, Asia, Australia and Africa. In a
particular period, a single contract may account for a large percentage of
sales, but the Company is not dependent on any custom-engineered systems
customer on an ongoing basis.
Company engineering and marketing personnel maintain contact with potential
major steel and glass customers to determine their needs for new furnaces,
typically for expansion or new technology. The Company's furnaces have long
useful lives, and replacement business is not a major factor in sales of
custom-engineered systems. The Company has and continues to perform
modifications to older existing furnaces to improve production quantities,
along with quality of the end product.
The Company also markets its products and services through agents and
licensees located in various parts of the world. Typically, the Company's
license agreements provide that the licensee will act as the Company's sales
agent in a particular territory, is granted a license to utilize the
Company's heat processing technology in that territory, and is granted the
right to utilize technical services provided by the Company. In exchange,
the Company receives certain fees when the licensee sells the Company's
products or services in the territory.
Over the years, Japanese steel producers have aligned themselves in
semi-exclusive relationships with furnace manufacturers. For a number of
years, the Company has licensed direct fired furnace technology to NKK
Corporation, the second largest steel producer in Japan.
Furnaces for continuous galvanizing and annealing lines generally utilize
either direct fired or radiant tube technology. The Company is the market
leader for furnaces based on direct fired technology, and also sells furnaces
of the radiant tube design utilized primarily by its competitors. Some of
the Company's competitors are larger and have greater financial resources.
In recent years, the Company has faced increased competition from competitors
supplying smaller, less sophisticated steel lines. These competitors do not
generally offer custom engineering on a par with the Company, but have been
willing to offer a more standarized and less sophisticated furnace for a
lower price.
Operations. The Company's custom-engineered furnace business is conducted
principally by its wholly-owned subsidiaries, Selas (SAS) (Paris), CFR
(Paris), Ermat S.A. (Lyon), Selas Waermetechnik (Ratingen), Selas Italiana,
S.r.L. (Milan), Selas U.K. (Derbyshire) and CFR Portugal (Leiria). These
subsidiaries currently employ approximately 172 persons, of whom 26 are
administrative personnel, 27 are fabrication and assembly personnel, and 119
are sales, engineering and operations personnel. A small number of
engineering and marketing management personnel located at the Company's
Dresher, Pennsylvania headquarters facility are also involved from time to
time in the custom-engineered furnace business.
On large-scale projects, such as a continuous steel strip annealing or
galvanizing line, the customer frequently contracts for the entire line on
the turnkey basis with an engineering and construction firm specializing in
line terminal equipment, and the Company acts as a subcontractor for the
design, engineering, supply of material and installation of the furnace
portion of the line, or, alternatively, as a subcontractor only for design
and engineering. When the Company provides only design and engineering
services, the prime contractor handles the fabrication and erection of the
furnace. With the exception of certain proprietary parts, the Company does
not manufacture the components used in such systems.
The Company's custom-engineered furnace business is historically cyclical in
nature.
On January 12, 2000, the Company's wholly-owned subsidiary, Selas (SAS),
acquired the stock of Ermat S.A., a Lyon, France firm engaged in the
engineered industrial furnace business. This acquisition was made to
complement the Company's existing heat technology operations in Europe,
particularly the custom-engineered furnace business. Ermat engineers and
designs batch and continuous furnaces that are used for heat treating both
ferrous and non-ferrous metals. The Company believes that Ermat enjoys a
good reputation in the French market for engineered industrial furnaces.
Ermat does have several European competitors for the products offered and
some of its competitors are larger and have greater financial resources.
Certain information regarding the acquisition of the Ermat business is set
forth in note 2 of the Company's consolidated financial statements.
STANDARD-ENGINEERED SYSTEMS, BURNERS AND COMBUSTION CONTROL EQUIPMENT
Standard-Engineered Systems. At its Dresher, Pennsylvania facility, the
Company engineers and fabricates a variety of smaller furnaces and heat
processing equipment. Although these systems are based on standard designs,
the Company often adapts or re-engineers them to meet particular customer
needs. These smaller systems are generally used by manufacturers in
sophisticated applications for the heat treatment of finished and
semi-finished parts.
The Company's standard-engineered systems include atmosphere-controlled
furnaces for heat treating finished metal parts. Its continuous heat
treating systems include not only the hardening and tempering furnaces
central to the system, but also the ancillary loading, quenching and washing
equipment.
The Company also manufacturers large non-atmosphere-controlled batch-type
furnaces in a variety of designs. The Company's carbottom furnaces enable
its customers to remove the furnace hearth, running on tracks similar to a
railroad car, from the stationary furnace for loading and unloading.
Carbottom and hood furnaces are used to heat treat large, usually
semi-finished, metal parts of a variety of shapes and sizes. Clamshell
furnaces designed by the Company open and close around steel rolls to produce
a gradation of metal characteristics due to the differential heating of the
steel roll. The Company's standard batch furnaces are supplied to customers
with a need for the precise, accurately controlled application of heat to
their products.
The Company's standard systems also include automatic brazing and soldering
systems used in the assembly of radiators, air conditioner coils and
electrical appliances. The precise application of heat in these systems
improves a customer's product quality and uniformity while reducing
production costs. The Company also produces the fuel mixing and monitoring
systems, burners and product handling equipment necessary for these systems.
The Company also produces custom designed barrel furnaces used primarily to
heat treat long metal parts, and also produces specialized glass lehrs for
heating glass products.
Burners and Combustion Control Equipment. The Company designs, manufactures
and sells an array of original equipment and replacement gas-fired industrial
burners for many applications. The Company is a producer of burners used in
fluid processing furnaces serving the petrochemical industry. One type of
fluid processing burner is capable of minimizing the emission of oxides of
nitrogen as combustion products. As many jurisdictions reduce the
permissable level of emissions of these compounds, the Company believes that
the demand for "low NOx" burners will increase. The Company also produces
burners suitable for creating a high temperature furnace environment
desirable in steel and glass heat treating furnaces. The Company's burners
accommodate a wide variety of fuel types, environmental constraints and
customer production requirements.
The Company furnishes many industries with gas combustion control equipment
sold both as component parts and as systems that have been custom-engineered
to meet a particular customer's needs. This equipment is provided with the
Company's original custom-engineered and standard heat treating equipment, as
replacement or additional components for existing furnaces being refurbished
or upgraded, and as original components for heat treating equipment
manufactured by others. The components of the combustion control systems
include mixing valves capable of mixing gas and air and controlling the
air/gas ratio, pressure and total flow of the mixed gases. The Company also
produces its Qual-O-RimeterTM automated monitoring and control device used
in conjunction with its mixing valves to maintain precise, uniform heat
release and flame shape, despite fluctuations in fuel mix and quality, air
temperature and humidity.
Additional combustion control products include Flo-ScopeTM flow meters, which
measure the rate of flow of gases, and automatic fire checks and automatic
blowouts, which arrest flame and pressure resulting from backfire from the
burners into the pipe line.
Marketing and Competition. The Company markets its standard-engineered
systems products on a global basis through its sales and marketing personnel
located in Dresher, Pennsylvania, and also sells these products through
licensees and agents located in various parts of the world. Although the
Company competes for orders for such products with many other manufacturers,
some of which are larger and have greater financial resources, the Company
believes that its reputation and its high standard for quality allow it to
compete effectively with other manufacturers.
Operations. At its Dresher facility, the Company employs approximately 62
persons, of whom 17 are executive and administrative personnel, 14 are sales
and engineering personnel and 31 are personnel engaged in manufacturing. The
hourly personnel are represented by a union, and the current union contract
expires May 16, 2001. The Company considers its relations with its employees
to be satisfactory.
On June 6, 2000, the Company acquired the remaining 50% equity interest in
Nippon Selas, a Japanese sales and engineering firm previously accounted for
on the equity method. Its Tokyo facility employs 13 people; 4 administrative
and 9 sales and engineering.
The principal components used in the Company's heat processing equipment and
other products are steel, special castings (including high-alloy materials),
electrical and electronic controls and materials handling equipment. These
items are available from a wide range of independent suppliers.
Research and Development. The Company conducts research and development
activities at its Dresher facility to support its heat processing services
and products. The Company's research efforts are designed to develop new
products and technology as well as to improve existing products and
technology. The Company also conducts research on behalf of particular
customers in connection with customers' unusual process needs. Research and
development expenditures for heat processing aggregated $31,000, $38,000 and
$77,000 in 2000, 1999 and 1998, respectively.
It is the Company's policy to apply for domestic and foreign patents on those
inventions and improvements which it considers significant and which are
likely to be incorporated in its products. It owns a number of United States
and foreign patents. It is licensed under patents owned by others and has
granted licenses to others on a fee basis. The Company believes that,
although these patents collectively are valuable, no one patent or group of
patents is of material importance to its business as a whole.
PRECISION MINIATURE MEDICAL AND ELECTRONIC PRODUCTS
Resistance Technology, Inc. ("RTI"), a wholly-owned subsidiary, manufactures
microminiature components and molded plastic parts for hearing instrument
manufacturers and the medical equipment, electronics, telecommunications and
computer industries. RTI Electronics, Inc. ("RTIE"), formed in 1997, has
expanded RTI's microminiature components business through the manufacture of
electrical resistors known as thermistors and film capacitors.
Products and Industries Serviced. RTI is a leading manufacturer and supplier
of microminiature electromechanical components to hearing instrument
manufacturers. These components consist of volume controls, trimmer
potentiometers and switches. RTI also manufactures hybrid amplifiers and
integrated circuit components ("hybrid amplifiers"), along with faceplates
for in-the-ear and in-the-canal hearing instruments. Components are offered
in a variety of sizes, colors and capacities in order to accommodate a
hearing manufacturer's individualized specifications. Sales to hearing
instrument manufacturers represented approximately 68% of 2000 annual net
sales for the Company's precision miniature medical and electronic products
business.
Hearing instruments, which fit behind or in a person's ear to amplify and
process sound for a hearing impaired person, generally are composed of four
basic parts and several supplemental components for control or fitting
purposes. The four basic parts are microphones, amplifier circuits,
miniature receivers/speakers and batteries. RTI's hybrid amplifiers are a
type of amplifier circuit. Supplemental components include volume controls,
trimmer potentiometers, which shape sound frequencies to respond to the
particular nature of a person's hearing loss, and switches used to turn the
instrument on and off and to go from telephone to normal speech modes.
Faceplates and an ear shell molded to fit the user's ear often serve as a
housing for hearing instruments.
The potential range of applications for RTI's molded plastic parts is broad.
RTI has produced intravenous flow restrictors for a medical instruments
manufacturer and cellular telephone battery sockets for a telecommunications
equipment manufacturer. Sales by RTI to industries other than the hearing
instrument industry represented approximately 8% of 2000 annual net sales
for the Company's precision miniature medical and electronic products
business.
RTI manufactures its components on a short lead-time basis in order to supply
"just-in-time" delivery to its customers. Due to the short lead-time, the
Company does not include orders from RTI's customers in its published backlog
figures.
RTIE manufactures and sells thermistors and thermistor assemblies, which are
solid state devices that produce precise changes in electrical resistance as
a function of any change in absolute body temperature. RTIE's Surge-Gard TM
product line, an inrush current limiting device used primarily in computer
power supplies represents approximately 50% of RTIE's sales. The balance of
sales represent various industrial, commercial and military sales for
thermistor and thermistor assemblies to domestic and international markets.
RTI's and RTIE's principal raw materials are plastics, polymers, metals,
various metal oxide powders and silver paste, for which there are multiple
sources of supply.
In order to enhance its product line offering, RTI made several strategic
acquisitions in 1998. These acquisitions bolster RTI's and RTIE's precision
miniature mechanical and electronic products.
On May 27, 1998, RTI Electronics acquired the stock of IMB Electronics
Products, Inc., a manufacturer of film capacitors, which are energy storage
devices used primarily to resist changes in voltage. The film capacitor
business represents a product line addition for the power and computer
industries which RTIE serves. Effective January 1, 1999, IMB Electronics
Products, Inc. was merged into RTIE.
In January, 2001, the Company acquired the stock of Lectret, a Singapore
manufacturer of microphone capsules. In October, 1998, the Company acquired
a product manufacturing line from Lectret which was newly formed as RTI
Technologies PTE LTD. The acquisition expands RTI's product capability in
the hearing health market by adding a microphone product line.
Certain information regarding the acquisition of RTI Technologies PTE LTD
business is set forth in note 2 to the Company's Consolidated Financial
Statements.
Marketing and Competition. RTI sells its hearing instrument components
directly to domestic hearing instrument manufacturers through an internal
sales force. Sales of molded plastic parts to industries other than hearing
instrument manufacturers are made through a combination of independent sales
representatives and internal sales force. In recent years, three companies
have accounted for a substantial portion of the U.S. hearing instrument
sales. In 2000, these three customers accounted for approximately 24% of
RTI's net sales.
Internationally, sales representatives employed by Resistance Technology,
GmbH ("RT, GmbH"), a German company 90% of whose capital is owned by RTI,
solicit sales from European hearing instrument manufacturers and facilitate
sales with Japanese and Australian hearing instrument markets.
RTI believes that it is the largest supplier worldwide of microminiature
electromechanical components to hearing instrument manufacturers and that its
full product line and automated manufacturing process allow it to compete
effectively with other manufacturers with respect to these products.
In the market of hybrid amplifiers and molded plastic faceplates, RTI's
primary competition is from the hearing instrument manufacturers themselves.
The hearing instrument manufacturers produce a substantial portion of their
internal needs for these components.
RTIE sells its thermistors and film capacitors through a combination of
independent sales representatives and internal sales force.
RTIE has many competitors, both domestic and foreign, that sell various
thermistor and film capacitors and some of these competitors are larger and
have greater financial resources. In addition, RTIE holds a relatively small
market share in the world-market of thermistor and film capacitor products.
Operations. RTI currently employs 240 people, of whom 37 are executive and
administrative personnel and 203 are sales, engineering and operations
personnel at RTI's two facilities near Minneapolis, Minnesota. A small
number of sales personnel employed by RT, GmbH are located in Munich, Germany
and RTI Technologies employs 42 people at its Singapore location.
At its facilities in Anaheim, California, RTIE employs 103 full-time
employees, of which 6 are administrative and 97 are sales and operations
personnel.
As a supplier of parts for consumer and medical products, RTI is subject to
claims for personal injuries allegedly caused by its products. The Company
maintains what it believes to be adequate insurance coverage.
Research and Development. RTI and RTIE conduct research and development
activities primarily to improve its existing products and technology. Their
research and development expenditures were $899,000, $964,000 and $1,290,000
in 2000, 1999 and 1998, respectively.
RTI owns a number of United States patents which cover a number of product
designs and processes. The Company believes that, although these patents
collectively add some value to the Company, no one patent or group of patents
is of material importance to its business as a whole.
TIRE HOLDERS, LIFTS AND RELATED PRODUCTS
Deuer Manufacturing, Inc. ("Deuer"), a wholly-owned subsidiary, manufactures
tire holders, lifts, and other related products based principally on cable
winch designs.
Products and Industries Served. Deuer is a leading supplier of spare tire
holders used on light trucks and mini-vans manufactured by the major domestic
automotive manufacturers. Deuer's spare tire holder holds the spare tire to
the underbody of the vehicle by means of a steel cable running to the
underside of the vehicle's frame. One end of the steel cable is attached to
a hub placed through the center of the spare tire's rim, and the other end is
attached to a hand-operated winch mounted at an accessible location on the
vehicle. The spare tire holding system permits the spare tire to be stored
in a remote location and to be easily removed without the need to crawl under
the vehicle. During 2000, sales of spare tire holders accounted for
approximately 93% of Deuers net sales.
Deuer also produces a variety of hand-operated hoist-pullers, using primarily
a cable winch design, sold under the Mini-MuleTM brand name. These products,
which retail from $30 to $60, are portable hand winches designed for a
variety of uses, such as pulling objects, rigging loads and installing
fencing. Deuer furnishes these hoist-pullers in a variety of sizes and
capacities. It also manufactures accessories for use with the products,
including slings, clamps, blocks and gantries.
Deuer manufactures products on a short lead time basis in order to furnish
"just-in-time" delivery to its automotive customers. Because of the
substantial variances between manufacturers' estimated and actual
requirements, the Company does not include blanket order commitments from
automotive manufacturers in its published backlog figures.
Marketing and Competition. Deuer sells its spare tire holders directly to
domestic automotive manufacturers. Deuer's spare tire holders are sold to
Chrysler Corporation, General Motors, Toyota, Ford Motor Company, New United
Motor Manufacturing, Inc. and Mobile Home Manufactures. The design and
quality of Deuer's spare tire holders have been recognized by its major
customers. The Company sells its hoist-pullers through a network of
distributors as well as directly to some large retail outlets.
Deuer is one of several suppliers of spare tire holders to domestic mini-van
and light truck manufacturers. Some of Deuer's competitors are larger and
have greater financial resources. The Company believes that price and
Deuer's reputation for quality and reliability of delivery are important
factors in competition for business from the domestic automotive
manufacturers. A number of other domestic and foreign manufacturers sell
hoist -pullers to the retail market, and Deuer's share of this market is
relatively small.
Operations. At its Dayton facility, Deuer employs 17 executive and
administrative personnel and approximately 148 manufacturing employees. Some
of the manufacturing employees are represented by a union, and the current
union contract expires in October, 2002. Deuer considers its relations with
its employees to be satisfactory.
Deuer's principal raw material is coil rolled steel and metal cable which is
widely available. Deuer also conducts research and development activities
which consist of the development of new products and technology and the
modification of existing products. Deuer's research and development
expenditures aggregated $252,000, $258,000 and $239,000 in 2000, 1999 and
1998, respectively.
As a consumer products manufacturer, Deuer is subject to claims for personal
injuries allegedly caused by its products. The Company maintains what it
believes to be adequate insurance coverage.
ITEM 2. Properties
The Company owns the manufacturing facility in Dresher, Pennsylvania in which
its standard-engineered systems, burners and combustion control equipment are
produced. The Company's headquarters are located on the same 17 acre site.
The 136,000 square foot Dresher facility has more space than is currently
needed for the Company's operations and headquarters, and the Company is
seeking to lease all or a portion of the excess office and manufacturing
space to a suitable tenant. This property is subject to a mortgage. See
note 8 of the Company's consolidated financial statements.
RTI leases a 47,000 sq. ft. manufacturing facility in Arden Hills, Minnesota
from a partnership consisting of two former officers of RTI and Mark S.
Gorder who serves as an officer of the Company and RTI and on the Company's
Board of Directors. At this facility, RTI manufactures all of its products
other than plastic component parts. The lease expires in October, 2003, with
two successive 5-year renewal options. In addition, RTI owns, subject to a
mortgage from a third party lender, a 34,000 sq. ft. building in Vadnais
Heights, Minnesota at which RTI produces plastic component parts. (See notes
8, 17 and 18 of the Company's consolidated financial statements.)
RTIE leases a building in Anaheim, California, which contains its
manufacturing facilities and offices and consists of a total of 50,000 square
feet. The lease expires September, 2008.
Deuer owns its 92,000 square foot manufacturing facility located on 6.5 acres
in Dayton, Ohio, where it produces its spare tire holders and hoist-pullers.
The facility is furnished with a variety of steel fabrication equipment,
including punch presses, drill presses, screw machines, grinders, borers,
lathes and welders. This property is subject to a mortgage. See note 8 of
the Company's consolidated financial statements.
Selas (SAS) owns the land and building which houses its engineering, sales
and administrative operations in Gennevilliers, France (outside of Paris).
The land under the building is owned by Selas (SAS) and the property outside
of the building is jointly owned by the building owners in the office
complex. The building has 22,000 square feet. This property is subject to a
mortgage. See note 8 of the Company's consolidated financial statements.
Selas Italiana S.r.L., the Company's Italian subsidiary, Selas Waermetechnik
GmbH, the Company's German subsidiary and Selas UK , the Company's United
Kingdom subsidiary, lease facilities in Milan, Italy, Ratingen, Germany and
Derbyshire, UK, respectively. The Milan and Derbyshire facilities are
comprised of engineering, sales and administrative offices with the leases
expiring in October, 2001 and a month to month basis, respectively. The
Ratingen facilities are used for sales, administrative and engineering
activities and assembly of small furnaces and furnace components, with the
lease expiring October, 2001. Resistance Technology, GmbH, leases office
space in Munich, Germany, on a year-to-year basis, for its sales personnel.
Management expects to be able to extend these leases.
RTI Technologies PTE LTD leases a building in Singapore which houses its
production facilities and administrative offices. The building contains
6,000 square feet and its lease expires June, 2001, with a three-year renewal
option.
CFR leases facilities in Paris and Maisse, both in France. The facilities in
Paris house engineering, sales and administrative operations and has 10,000
square feet. The Maisse facility is 40,000 square feet and houses CFR's
fabrication and assembly operations. The Paris lease expires January, 2003
and the Maisse lease expires February, 2004, each with three-year optional
renewal terms. Ermat leases a building in Lyon, France with sales and
administrative facilities which expires June, 2001. CFR Portugal leases a
building in Leiria, Portugal which houses its fabrication facilities and
administrative offices. Management expects to be able to extend these leases.
ITEM 3. Legal Proceedings
The Company is a defendant along with a number of other parties in
approximately 100 lawsuits as of December 31, 2000 (approximately 200 as of
December 31, 1999) alleging that plaintiffs have or may have contracted
asbestos-related diseases as a result of exposure to asbestos products or
equipment containing asbestos sold by one or more named defendants. Due to
the noninformative nature of the complaints, the Company does not know
whether any of the complaints state valid claims against the Company. The
lead insurance carrier has informed the Company that the primary policy for
the period July 1, 1972 to July 1, 1975 has been exhausted and that the lead
carrier will no longer provide a defense under that policy. The Company has
requested that the lead carrier substantiate this situation. The Company has
contacted representatives of the Companys excess insurance carrier for some
or all of this period. The Company does not believe that the asserted
exhaustion of the primary insurance coverage for this period will have a
material adverse effect on the financial condition, liquidity, or results of
operations of the Company. Management is of the opinion that the number of
insurance carriers involved in the defense of the suits and the significant
number of policy years and policy limits to which these insurance carriers
are insuring the Company make the ultimate disposition of these lawsuits not
material to the Companys consolidated financial position or results of
operations.
The Company is also involved in other lawsuits arising in the normal course
of business. While it is not possible to predict with certainty the outcome
of these matters, management is of the opinion that the disposition of these
lawsuits and claims will not materially affect the Companys consolidated
financial position, liquidity, or results of operations.
ITEM 4. Submission of Matters to a Vote of Security Holders
None
ITEM 4A. Executive Officers of the Company
The names, ages and offices (as of February 24, 2001) of the Company's
officers were as follows:
Name Age Office
Stephen F. Ryan 65 Chairman and Chief Executive
Officer; Director of the Company
Mark S. Gorder 54 President and Chief Operating Officer
and President of Resistance Technology,
Inc.; Director of the Company
Christian Bailliart 52 Vice President and Chairman-Director
Generale of Selas (SAS)
James C. Deuer 72 Vice President and President of Deuer
Manufacturing, Inc.
Robert W. Ross 52 Vice President and Secretary and
President Heat Technology Group
Francis A. Toczylowski 50 Vice President and Treasurer
Mr. Ryan joined the Company in May 1988, as President and Chief Executive
Officer. In December, 1998, he was elected Chairman of the Board of
Directors. Mr. Gorder joined the Company October 20, 1993 when Resistance
Technology, Inc. (RTI) was acquired. Prior to the acquisition, Mr. Gorder
was President and one of the founders of RTI, which began operations in
1977. Mr. Gorder was promoted to Vice President of the Company and elected
to the Board of Directors in 1996. In 2000 he was elected President and
Chief Operating Officer. Upon Mr. Ryan's retirement in April, 2001, Mr.
Gorder will assume the role of Chief Executive Officer. Mr. Bailliart joined
Selas (SAS) in 1974 and in 1989 he was promoted to Chairman-Director Generale
of Selas (SAS) from Vice President, Treasurer. On January 1, 1993, he was
elected Vice President of the Company. Mr. Deuer joined the Company as
President of Deuer Manufacturing when it was acquired in May, 1986 and was
promoted to Vice President of the Company and President of Deuer
Manufacturing in December, 1990. From 1965 to 1986 he was President of Deuer
Manufacturing. Mr. Ross joined the Company in October 1990 as Vice President
- - Treasurer, was appointed Chief Financial Officer January 1, 1994 and
elected Secretary February 21, 1995. In December, 1998 he was appointed
President of the Heat Technology Group of the Company. Mr. Toczylowski
joined the Company in 1981 and has held several positions in the accounting
and finance area, most recently as Corporate Controller. In December, 1998,
he was elected Vice President and Treasurer.
PART II
ITEM 5. Market for Registrant's Common Equity and Related Stockholder Matters
The Company's common shares are listed on the American Stock Exchange. The
high and low sale prices during each quarterly period during the past two
years were as follows:
Market and Dividend Information
2000 1999
------------------ ------------------
Market Market
Price Range Price Range
------------------ ------------------
Quarter High Low High Low
First . . . . 6.750 4.875 8.375 4.875
Second . . . . 7.625 5.250 7.000 5.125
Third . . . . 7.500 4.625 7.000 4.500
Fourth . . . . 5.937 2.750 6.687 4.250
At February 7, 2001 the Company had 432 shareholders of record.
2000 1999 1998
Dividends per share:
First Quarter $.045 $.045 $.045
Second Quarter .045 .045 .045
Third Quarter .045 .045 .045
Fourth Quarter .045 .045 .045
The payment of any future dividends is subject to the discretion of the Board
of Directors and is dependent on a number of factors, including the Company's
capital requirements, financial condition, financial covenants and cash
availability.
ITEM 6. Selected Financial Data
Certain selected financial data is incorporated by reference to "Selas
Corporation of America Five-Year Summary of Operations", page 4, and "Other
Financial Highlights", page 5, of the Company's 2000 annual report to
shareholders.
ITEM 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Management's Discussion and analysis is incorporated by reference to page 6
through 10 of the Company's 2000 annual report to shareholders.
Forward-Looking and Cautionary Statements. Certain statements herein that
include forward-looking terminology such as "may", "will", "should",
"expect", "anticipate", "estimate", "plan" or "continue" or the negative
thereof or other variations thereon are, or could be deemed to be,
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. These forward-looking statements are
affected by known and unknown risks, uncertainties and other factors that may
cause the Company's actual results, performance or achievements to differ
materially from the results, performance and achievements expressed or
implied in the Company's forward-looking statements. These risks,
uncertainties and factors include competition by competitors with more
resources than the Company, foreign currency risks arising from the Company's
foreign operations, and the cyclical nature of the market for large heat
technology contracts.
The Company's heat technology business, which has contributed substantially
to the Company's consolidated results, is affected by, among other things,
the capital expenditures of steel and glass manufacturers and processors,
industries that are highly cyclical in nature. It is difficult to predict
demand for the Company's heat technology products, and the financial results
of the Company's heat technology business have fluctuated, and may continue
to fluctuate, materially from year to year.
Several of the Company's competitors have been able to offer more
standardized and less technologically advanced heat technology systems and
equipment at lower prices. Although the Company believes that it has
produced higher quality systems and equipment than these lower priced
competitors, in certain instances price competition has had an adverse effect
on the Company's sales and margins. There can be no assurance that the
Company will be able to maintain or enhance its technical capabilities or
compete successfully with its existing and future competitors.
There can be no assurance that the Company will remain a competitive supplier
to the automobile and truck industry in view of, among other things, the
general trend in recent years in that industry toward a reduction in the
number of third-party suppliers and toward more integrated component
suppliers.
The Company's precision miniature medical and electronics business has
benefitted from its ability to automate and keep costs and prices low. There
can be no assurance that the Company will be able to continue to achieve such
automation and its historical profit margins particularly as the technology
of hearing instruments changes and as the business expands into other product
lines. The precision miniature medical and electronics business has also
been affected by unfavorable conditions in the hearing health market and the
impact of the Asian economic situation. The Company is unable to predict
with any certainty when these conditions will improve.
The Company has international operations, as a result, the Company's
performance may be materially affected by foreign economies and currency
movements.
The Company cautions that the foregoing list of important factors is not
intended to be, and is not, exhaustive. The Company does not undertake to
update any forward-looking statement that may be made from time to time by or
on behalf of the Company.
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
The Company's consolidated cash flows and earnings are subject to
fluctuations due to changes in foreign currency exchange rates. The Company
attempts to limit its exposure to changing foreign currency exchange rates
through operational and financial market actions. The Company does not hold
derivatives for trading purposes.
The Company manufactures and sells its products in a number of locations
around the world, resulting in a diversified revenue and cost base that is
exposed to fluctuations in European and Asian currencies. This diverse base
of foreign currency revenues and costs serves to create a hedge that limits
the Company's net exposure to fluctuations in these foreign currencies.
Short-term exposures to changing foreign currency exchange rates are
occasionally managed by financial market transactions, principally through
the purchase of forward foreign exchange contracts (with maturities of six
months or less) to offset the earnings and cash flow impact of the
nonfunctional currency denominated receivables and payables relating to
select custom engineered heat technology segment contracts. The decision by
management to hedge any such transaction is made on a case-by-case basis.
Foreign exchange forward contracts are denominated in the same currency as
the receivable or payable being covered, and the term and amount of the
forward foreign exchange contract substantially mirrors the term and amount
of the underlying receivable or payable. The receivables and payables being
covered arise from trade and intercompany transactions of and among the
Company's foreign subsidiaries. At December 31, 2000 the Company did not
have any forward foreign exchange contracts outstanding.
To manage exposure to interest rate movements and to reduce its borrowing
costs, the Company's French subsidiary, Selas (SAS), has entered into an
interest rate swap agreement. Selas (SAS) is exposed to changes in interest
rates primarily due to its borrowing activities which are related to
long-term debt used to finance its office building. The swap agreement
requires fixed interest payments based on an effective rate of 8.55% for the
remaining term through May, 2006. A 100 (10% adverse change) basis point
move in interest rates would affect the Company's floating and fixed rate
instruments, including short and long-term debt and derivative instruments,
by approximately $27,000 at December 31, 2000. The fair value of the
Company's variable rate debt is not significantly different from its recorded
amount.
Swap and forward foreign exchange contracts are entered into for periods
consistent with related underlying exposures. The Company does not enter
into contracts for speculative purposes and does not use leveraged
instruments.
ITEM 8. Financial Statements and Supplementary Data
The Company's consolidated balance sheets as of December 31, 2000 and 1999,
and the related consolidated statements of operations, cash flows and
shareholders' equity for each of the years in the three-year period ended
December 31, 2000, and the report of independent auditors thereon and the
quarterly results of operations (unaudited) for the two-year period ended
December 31, 2000 are incorporated by reference to pages 11 to 39 of the
Company's 2000 annual report to shareholders.
ITEM 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
None
PART III
The information called for by Items 10, 11, 12 and 13 (except the information
concerning executive officers included in Item 4A) is incorporated by
reference to the Company's definitive proxy statement relating to its 2001
Annual Meeting of shareholders which the Company filed on March 23, 2001.
However, the portions of such proxy statement constituting the reports of the
Audit Committee and Compensation Committee of the Board of Directors and the
graph showing performance of the Company's common shares and certain share
indices shall not be deemed to be incorporated herein or filed for purposes
of the Securities Exchange Act of 1934.
PART IV
ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) The following documents are filed as a part of this report:
1. Financial Statements - The Company's consolidated financial statements,
as described below, are incorporated by reference to pages 11 through 39
of the Company's 2000 annual report to shareholders.
Consolidated Balance Sheets at December 31, 2000 and 1999.
Consolidated Statements of Operations for the years ended December 31,
2000, 1999 and 1998.
Consolidated Statements of Cash Flows for the years ended December 31,
2000, 1999 and 1998.
Consolidated Statements of Shareholders' Equity for the years ended
December 31, 2000, 1999 and 1998.
Notes to Consolidated Financial Statements.
Report of Independent Auditors.
Financial statements for 50% or less owned companies which are accounted
for by the equity method have been omitted because they do not, considered
individually or in the aggregate, constitute significant subsidiaries.
2. Financial Statement Schedules
Page
Report of Independent Auditors on
Financial Statement Schedules 24
Schedule I - Condensed Financial Information of
Registrant (Parent only) 25, 26, 27, 28
Schedule II - Valuation and Qualifying Accounts 29, 30
All other schedules are omitted because they are not applicable, or
because the required information is included in the consolidated financial
statements or notes thereto.
3. Exhibits
3A. The Company's Articles of Incorporation as amended May 18,
1984 and April 25, 1991. Exhibit 3A to the Company's report
on Form 10-K for the year ended December 31, 1984 and
Exhibit 3A1 to the Company's report on Form 10-K for the
year ended December 31, 1991 are hereby incorporated herein
by reference.
3B. The Company's By-Laws as amended.
4A. Amended and Restated Credit Agreement dated July 31, 1998 among the
Company, Deuer Manufacturing, Inc., Resistance Technology, Inc.,
RTI Export, Inc. and RTI Electronics, Inc. Exhibit 4A to the
Company's report on Form 10-Q for the nine months ended September
30, 1998 is hereby incorporated by reference.
4B. Amendment to Amended and Restated Credit Agreement dated
June 30, 1999 among the Company, Deuer Manufacturing, Inc.,
Resistance Technology, Inc., RTI Export, Inc. and RTI
Electronics, Inc. The Exhibit to the Company's report on
Form 10-Q for the six months ended June 30, 1999 is hereby
incorporated by reference.
4C. Amended and Restated Revolving Credit Note, dated July 31,
1998, of the Company in favor of First Union National Bank.
Exhibit 4B to the Company's report on Form 10-Q for the nine
months ended September 30, 1999 is hereby incorporated by
reference.
4D. Guaranty dated February, 1998 of the Company in favor of
First Union/First Fidelity, N.A. Pennsylvania. Exhibit 4H
to the Company's report on Form 10-K for the year ended
December 1997 is hereby incorporated by reference.
4E. Second Amendment to Amended and Restated Credit Agreement,
dated as of July 7, 2000. Exhibit 4C to the Company's
report on Form 10-Q for the period ended September 30, 2000
is incorporated by reference.
4F. Third Amendment to Amended and Restated Credit Agreement,
dated as of January 19, 2001.
10A. Form of termination agreement between the Company and
Messrs. Ryan, Deuer, Gorder, Ross and Toczylowski. Exhibit
10A to the Company's report on Form 10-K for the year ended
December 31, 1996 is hereby incorporated by reference.
10B. 1985 Stock Option Plan, as amended. Exhibit 10C to the
Company's Registration Statement on Form S-2 filed on June
15, 1990 (No. 33-35443) is hereby incorporated herein by
reference.
10C. Form of Stock Option Agreements granted under the 1985 Stock
Option Plan. Exhibit 10D to the Company's Registration
Statement on Form S-2 filed on June 15, 1990 (No. 33-35443)
is hereby incorporated herein by reference.
10D. Form of Amendments to Stock Option Agreements granted under
the 1985 Stock Option Plan. Exhibit 10D to the Company's
Registration Statement on Form S-2 filed on June 15, 1990
(No. 33-35443) is hereby incorporated by reference.
10E. Amended and Restated 1994 Stock Option Plan. Exhibit 10E to
the Company's report on Form 10-K for the year ended
December 31, 1997 is hereby incorporated by reference.
10F.Form of Stock Option Agreements granted under the Amended
and Restated 1994 Stock Option Plan. Exhibit 10F to the
Company's report on Form 10-K for the year ended December
31, 1995 is hereby incorporated by reference.
10G. 2001 Stock Option Plan.
10H. Supplemental Retirement Plan (amended and restated effective
January 1, 1995). Exhibit 10H. to the Company's report on
Form 10-K for the year ended December 31, 1995 is hereby
incorporated by reference.
10I. Management Employment Agreement dated October 20, 1993
between Resistance Technology, Inc. and Mark S. Gorder.
Exhibit 10I to the Company's report on Form 10-K for the
year ended December 31, 1995 is hereby incorporated by
reference.
10J. Amended and Restated Office/Warehouse Lease, between
Resistance Technology, Inc. and Arden Partners I. L.L.P. (of
which Mark S. Gorder is one of the principal owners) dated
November 1, 1996. Exhibit 10J to the Company's report on
Form 10-K for the year ended December 31, 1996 is hereby
incorporated by reference.
10K. Non-Employee Directors' Stock Option Plan and Form of Stock
Option Agreements under such Plan. Exhibit 10K to the
Company's Registration Statement on Form S-8 filed on
October 30, 1998 is hereby incorporated herein by reference.
10L. Retirement Agreement, Consulting Agreement and General
Release, dated August 30, 2000, between the Company and
Stephen F. Ryan. Exhibit 10 to the Company's report on Form
10-Q for the period ended September 30, 2000 is incorporated
by reference.
13. "Selas Corporation of America Five-Year Summary of
Operations" contained on Page 4 of the Company's 2000 annual
report to shareholders; "Other Financial Highlights"
contained on page 5 of the Company's 2000 annual report to
shareholders; "Management's Discussion and Analysis of
Financial Condition and Results of Operations" contained on
pages 6-10 of the Company's 2000 annual report to
shareholders; and the Company's consolidated financial
statements, including the "Notes to Consolidated Financial
Statements" and the "Report of Independent Auditors'
contained on pages 11-39 of the Company's 2000 annual report
to shareholders.
21. List of significant subsidiaries of the Company.
23. Consent of Independent Auditors
24. Powers of Attorney.
(b) Reports on Form 8-K - There were no reports on Form 8-K
filed during the three months ended December 31, 2000.
Report of Independent Auditors on Financial Statement Schedules
The Board of Directors and Shareholders
Selas Corporation of America:
Under date of February 19, 2001, we reported on the
consolidated balance sheets of Selas Corporation of America and
subsidiaries as of December 31, 2000 and 1999 and the related
consolidated statements of operations, shareholders' equity, and
cash flows for each of the years in the three-year period ended
December 31, 2000, as contained in the 2000 annual report to
shareholders. These consolidated financial statements and our
report thereon are incorporated by reference in the annual
report on Form 10-K for the year 2000. In connection with our
audits of the aforementioned consolidated financial statements,
we also audited the related financial statement schedules as
listed in the accompanying index (Item 14). These financial
schedules are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statement schedules based on our audits.
In our opinion, such financial statement schedules, when
considered in relation to the basic consolidated financial
statements taken as a whole, present fairly, in all material
respects, the information set forth herein.
/s/ KPMG LLP
Philadelphia, Pennsylvania
February 19, 2001
SCHEDULE I
SELAS CORPORATION OF AMERICA AND SUBSIDIARY COMPANIES
Condensed Financial Information of Registrant
Balance Sheets
December 31, 2000 and 1999
ASSETS 2000 1999
Current assets:
Cash $ 572,232 $ 138,392
Accounts receivable (including $3,903,483 and
$4,450,272 due from subsidiaries in 2000 and
1999, respectively, eliminated in
consolidation), less allowance for
doubtful accounts of $10,000 in
both years 7,827,465 5,572,399
Inventories, at cost 2,785,884 2,838,870
Prepaid expenses and other current assets 871,692 843,583
Total current assets 12,057,273 9,393,244
Investment in wholly-owned subsidiaries 60,731,876 56,453,522
Property and equipment, at cost 5,939,988 5,895,517
Less: accumulated depreciation (4,983,785) (4,861,481)
956,203 1,034,036
Other assets and investment in unconsolidated 2,344,813 2,633,198
affiliate
Total Assets $76,090,165 $69,514,000
SCHEDULE I
SELAS CORPORATION OF AMERICA AND SUBSIDIARY COMPANIES
Condensed Financial Information of Registrant
Balance Sheets
December 31, 2000 and 1999
LIABILITIES AND SHAREHOLDERS' EQUITY 2000 1999
Current liabilities:
Notes payable and current maturities of
long-term debt $ 6,082,000 $ 5,119,933
Accounts payable (including $15,897,018 and
$14,478,429 due to subsidiaries in 2000
and 1999, respectively, eliminated in
consolidation) 17,981,384 15,216,623
Accrued expenses 3,821,744 1,596,112
Total current liabilities 27,885,128 21,932,668
Long-term debt 116,667 816,667
Other postretirement benefit obligations 3,482,508 3,561,574
Deferred income taxes 172,338 180,167
Contingencies and commitments
Shareholders' equity
Common stock 5,634,968 5,634,968
Retained earnings and other equity 40,063,634 38,590,726
Less: 514,254 and 504,854 common shares
held in treasury at cost (1,265,078) (1,202,770)
Total shareholders' equity 44,433,524 43,022,924
Total Liabilities and Shareholder's $76,090,165 $69,514,000
Equity
See accompanying notes to the consolidated financial statements.
SCHEDULE I
SELAS CORPORATION OF AMERICA AND SUBSIDIARY COMPANIES
Condensed Financial Information of Registrant
Statements of Operations
Years Ended December 31, 2000, 1999 and 1998
2000 1999 1998
Sales, net $11,654,081 $ 7,640,167 $13,431,912
Add back: license fees and corporate
charges paid by subsidiaries,
eliminated in consolidation 400,000 1,013,208 805,796
12,054,081 8,653,375 14,237,708
Costs and expenses:
Cost of goods sold 8,805,571 4,805,422 9,582,358
Selling, general and administrative
expenses 3,390,804 4,413,178 3,761,810
Rent and depreciation 290,134 372,942 360,801
12,486,509 9,591,542 13,704,969
Income (loss) before income taxes
(benefits)and equity in net income
of subsidiaries (432,428) (938,167) 532,739
Provision for income taxes (benefits) (152,964) (241,315) (753,789)
Income (loss) before equity in net income
of subsidiaries (279,464) (696,852) 1,286,528
Equity in net income of subsidiaries 3,215,250 2,426,012 2,322,994
Net income $ 2,935,786 $ 1,729,160 $ 3,609,522
See accompanying notes to the consolidated financial statements.
SCHEDULE I
SELAS CORPORATION OF AMERICA AND SUBSIDIARY COMPANIES
CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT
Statements of Cash Flows
Years Ended December 31, 2000, 1999 and 1998
2000 1999 1998
Operating Activities
Net income 2,935,786 $ 1,729,160 $ 3,609,522
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 183,717 228,979 259,716
Other adjustments (3,226,289) (1,900,383) (3,050,628)
Net changes in operating assets and
liabilities 2,385,559 3,479,413 57,727
Net cash provided by oper. activities 2,278,773 3,537,169 876,337
Investing Activities
Dividend from unconconsolidated affiliate 14,476
Purchase of property, plant and equipment (98,336) (70,377) (93,415)
Additional investment in subsidiary co. 1,024,304) (1,067,140)
Net cash (used) by investing activities (1,122,640) (1,123,041) (93,415)
Financing Activities
Proceeds from exercise of stock options 83,540 10,196
Proceeds from short-term borrowings 1,389,000 1,901,446 2,091,554
Payment of dividends (922,052) (934,302) (941,954)
Repayments of long-term debt (1,126,933) (2,576,424) (2,350,000)
Purchase of treasury stock (62,308) (820,833)
Net cash (used) by financing activities (722,293) (2,346,573) (1,190,204)
Increase (decrease) in cash and cash
equivalents 433,840 67,555 (407,282)
Cash and cash equivalents, beginning of
year 138,392 70,837 478,119
Cash and equivalents, end of year $ 572,232 $ 138,392 $ 70,837
See accompanying notes to the consolidated financial statements.
SCHEDULE II
SELAS CORPORATION OF AMERICA AND SUBSIDIARY COMPANIES
Valuation and Qualifying Accounts
December 31, 2000, 1999 and 1998
Column A Column B Column C
Additions
Balance at Charged to
Beginning Costs and
Classification of Period Expenses Other
Year ended December 31, 2000:
Reserve deducted in the balance sheet
from the asset to which it applies:
Allowance for doubtful accounts $ 977,557 $ 135,097 $ (62,660)(a)
Deferred tax asset valuation
allowance $ 1,464,907 $ (69,146)
Reserve not shown elsewhere:
Reserve for estimated future costs
of service and guarantees $ 1,483,624 $ 599,475 $ (93,746)(a)
Year ended December 31, 1999:
Reserve deducted in the balance sheet
from the asset to which it applies:
Allowance for doubtful accts. $1,993,733 $ 800,812 $ (217,768)(a)
Deferred tax asset valuation
allowance $1,620,162 $ (155,255)
Reserve not shown elsewhere:
Reserve for estimated future costs
of service and guarantees $2,294,889 $ (22,498) $ (131,001)(a)
Year ended December 31, 1998:
Reserve deducted in the balance sheet
from the asset to which they apply:
Allowance for doubtful accts. $ 681,356 $ 1,324,093 $ 106,973 (a)
Deferred tax asset valuation
allowance $1,696,824 $ (76,662)
Reserve not shown elsewhere:
Reserve for estimated future costs
of service and guarantees $2,705,293 $ 355,013 $ 51,393 (a)
a) Represents difference between translation rates of foreign currency at
beginning and end of year and average rate during year.
SCHEDULE II
SELAS CORPORATION OF AMERICA AND SUBSIDIARY COMPANIES
Valuation and Qualifying Accounts
December 31, 2000, 1999 and 1998
Column A Column D Column E
Balance at
End of
Classification Deductions Period
Year ended December 31, 2000:
Reserve deducted in the balance sheet from
the asset to which it applies:
Allowance for doubtful accounts $ 304,007(b) $ 745,987
Deferred tax asset valuation allowance $ 1,395,761
Reserve not shown elsewhere:
Reserve for estimated future costs of
service and guarantees $ 1,031,613(c) $ 957,740
Year ended December 31, 1999:
Reserve deducted in the balance sheet from
the asset to which it applies:
Allowance for doubtful accounts $ 1,599,220(b) $ 977,557
Deferred tax asset valuation allowance $ 1,464,907
Reserve not shown elsewhere:
Reserve for estimated future costs of
service and guarantees $ 657,766(c) $ 1,483,624
Year ended December 31, 1998:
Reserve deducted in the balance sheet from
the asset to which it applies:
Allowance for doubtful accounts $ 118,689(b) $ 1,993,733
Deferred tax asset valuation allowance $ 1,620,162
Reserve not shown elsewhere:
Reserve for estimated future costs of
service and guarantees $ 816,810(c) $ 2,294,889
(b) Uncollectible accounts charged off.
(c) "After job" costs charged to reserve.
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.
SELAS CORPORATION OF AMERICA
(Registrant)
By: __________________________
Francis A. Toczylowski
Vice President and Treasurer
Dated: March 30, 2001
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons (including a majority
of members of the Board of Directors) on behalf of the registrant and in the
capacities and on the dates indicated.
_________________________ ___________________________
Stephen F. Ryan Stephen F. Ryan
Attorney-In-Fact Chairman and Chief Executive
March 30, 2001 Officer and Director
March 30, 2001
_________________*_________________ ______________________________
Mark S. Gorder Francis A. Toczylowski
President and Chief Operating Officer Vice President and Treasurer
March 30, 2001 March 30, 2001
_________________*_________________
+John H. Austin
Director
March 30, 2001
_________________*_________________
Frederick L. Bissinger
Director
March 30, 2001
_________________*_________________
Nicholas A. Giordano
Director
March 30, 2001
_________________*_________________
Michael J. McKenna
Director
March 30, 2001
EXHIBIT INDEX
EXHIBITS:
3B. The Company's By-Laws as amended.
4F. Third Amendment to Amended and Restated Credit Agreement, dated as of
January, 2001
10G. 2001 Stock Option Plan.
13. "Selas Corporation of America Five-Year Summary of
Operations" contained on Page 4 of the Company's 2000 annual
report to shareholders; "Other Financial Highlights"
contained on page 5 of the Company's 2000 annual report to
shareholders; "Management's Discussion and Analysis of
Financial Condition and Results of Operations" contained on
pages 6-10 of the Company's 2000 annual report to
shareholders; and the Company's consolidated financial
statements, including the "Notes to Consolidated Financial
Statements" and the "Report of Independent Auditors'
contained on pages 11-39 of the Company's 2000 annual report
to shareholders.
21. List of significant subsidiaries of the Company.
23. Consent of Independent Auditors.
24. Powers of Attorney.