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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, 1998
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-8135
SIGMA-ALDRICH CORPORATION
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(Exact name of Registrant as specified in its charter)
Delaware 43-1050617
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3050 Spruce Street, St. Louis, Missouri 63103
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 314-771-5765
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Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $1.00 par value
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(Title of Class)
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 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]
Aggregate market value of the voting stock held by
non-affiliates of the Registrant:
$2,698,881,606 March 5, 1999
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Value Date of Valuation
Number of shares of the registrant's common stock, $1.00 par
value, outstanding as of March 5, 1999 was 100,662,804.
The following documents are incorporated by reference in the Parts
of Form 10-K indicated below:
Parts of Form 10-K into
Documents Incorporated by Reference which Incorporated
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Pages 12-28 of the Annual Report to
Shareholders for the year ended
December 31, 1998 Parts I, II and IV
Proxy Statement for the 1999 Annual
Meeting of Shareholders Part III
The Index to Exhibits is located on page F-3 of this report.
This document contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 that involve risk and uncertainty,
including financial, business environment and projections, as well as any
statements preceded by, followed by, or that include the words
"believes," "expects," "anticipates" or similar expressions, and other
statements contained herein regarding matters that are not historical
facts. Although the Company believes its expectations are based on
reasonable assumptions, it can give no assurance that its goals will be
achieved. The important factors that could cause actual results to
differ materially from those in the forward-looking statements herein
include, without limitation, reduced growth in research funding,
uncertainties surrounding possible government health care reform,
government regulation applicable to the Company's business, the
effectiveness of the Company's further implementation of its global
software system, SAP, the status and effectiveness of the Company's Year
2000 efforts, the highly competitive environment in which the Company
operates and the impact of fluctuations in foreign currency exchange
rates. All subsequent written and oral forward-looking statements
attributable to the Company or persons acting on its behalf are expressly
qualified in their entirety by such cautionary statements. The Company
does not undertake any obligation to release publicly any revisions to
such forward-looking statements to reflect events or uncertainties after
the date hereof or to reflect the occurrence of unanticipated events.
PART I
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Item 1. Business.
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Sigma-Aldrich Corporation (hereinafter referred to as the "Company",
which term includes all consolidated subsidiaries of the Company) has two
lines of business: the production and sale of a broad range of
biochemicals, organic and inorganic chemicals, radiolabeled chemicals,
diagnostic reagents, chromatography products and related products
(hereinafter referred to as "chemical products"), and the manufacture and
sale of metal components for strut, cable tray, pipe support,
telecommunication systems and electrical enclosures (hereinafter referred
to as "metal products" or "B-Line"). Its principal executive offices
are located at 3050 Spruce Street, St. Louis, Missouri 63103.
The Company was incorporated under the laws of the State of Delaware
in May 1975. Effective July 31, 1975 ("Reorganization"), the Company
succeeded, as a reporting company, Sigma International, Ltd., the
predecessor of Sigma Chemical Company ("Sigma"), and Aldrich Chemical
Company, Inc. ("Aldrich"), both of which had operated continuously for
more than 20 years prior to the Reorganization. Effective December 9,
1980, B-Line Systems, Inc.("B-Line"), previously a subsidiary of Sigma,
became a subsidiary of the Company.
On May 5, 1993, the Company acquired the net assets and business of
Supelco, Inc. ("Supelco"), a worldwide supplier of chromatography
products used in chemical research and production, from Rohm and Haas
Company. Effective December 23, 1998, the Company acquired the net
assets and business of Genosys Biotechnologies, Inc. ("Genosys"), a
leading supplier of custom synthetic DNA products, which are essential in
gene research.
(a) Chemical Products.
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1) Products:
The Company distributes approximately 85,000 chemical products for
use primarily in research and development, in the diagnosis of disease,
and as specialty chemicals for manufacturing. In laboratory applications,
the Company's products are used in the fields of biochemistry, synthetic
chemistry, quality control and testing, immunology, hematology,
pharmacology, microbiology, neurology and endocrinology and in the
studies of life processes. Sigma diagnostic products are used in the
detection of heart, liver and kidney diseases and various metabolic
disorders. Certain of these diagnostic products are used in measuring
concentrations of various naturally occurring substances in the blood,
indicative of certain pathological conditions. The diagnostic products
are used in manual, semi-automated and automated testing procedures. The
Company also offers, through a partnership with Amelung (a German
manufacturer), analyzers that measure blood clotting. Supelco offers a
full line of chromatography products and application technologies for
analyzing and separating complex chemical mixtures. The line includes
items for the collection and preparation of various samples for further
chemical analysis, gas and liquid chromatography, reference standards and
related laboratory products. Genosys offers custom synthetic DNA
products,synthetic peptides and genes for life science research, all of which
will support the Company's efforts to penetrate the molecular biology
market. In June 1997 Sigma-Aldrich entered into a partnership with
AlliedSignal (75% Sigma-Aldrich, 25% AlliedSignal), whereby Sigma-Aldrich
agreed to sell and market Riedel-de Haen laboratory chemicals. Riedel-de
Haen is a major European supplier of laboratory products. These products
complement the Company's existing range of high quality research
products.
Aldrich also offers approximately 80,000 esoteric chemicals as a
special service to customers interested in screening them for application
in many areas(such as medicine and agriculture). This area accounts for
less than 1% of the Company's sales.
Because of continuing developments in the field of research, there
can be no assurance of a continuing market for each of the Company's
products. However, through a periodic review of technical literature,
along with regular communications with customers, the Company's goal is
to keep abreast of the trends in research and diagnostic techniques.
This information, along with its own research technology, determines the
Company's development of improved and/or additional products.
2) Production and Purchasing:
The Company has chemical production facilities in Milwaukee and
Sheboygan, Wisconsin (Aldrich); St. Louis, Missouri (Sigma); Bellefonte,
Pennsylvania (Supelco); Germany (Aldrich Chemie GmbH & Co. K.G., RdH
Laborchemikalien GmbH and Co., K.G.); Israel (Sigma Israel Chemicals
Ltd.); Switzerland (Fluka Chemie AG, "Fluka"), and the United Kingdom
(Sigma-Aldrich Company Ltd.). A minor amount of production is done by
some of the Company's other subsidiaries. Biochemicals and diagnostic
reagents are primarily produced by extraction and purification from
yeasts, bacteria and other naturally occurring animal and plant sources.
Organic and inorganic chemicals and radiolabeled chemicals are primarily
produced by synthesis. Chromatography media and columns are produced
using proprietary chemical synthesis and proprietary preparation
processes. Similar processes are used for filtration and sample
collection processes.
Of the approximately 85,000 products listed in the Sigma, Aldrich,
Fluka, Riedel-de Haen and Supelco catalogs, the Company produced
approximately 39,000 which accounted for 44% of the net sales of chemical
products for the year ended December 31, 1998. The remainder of products
were purchased from a large number of sources either under contract or in
the open market.
No one supplier accounts for greater than 10% of the Company's
chemical purchases. The Company has generally been able to obtain
adequate supplies of products and materials to meet its needs, although
no assurance can be given that shortages will not occur in the future.
Whether a product is produced by the Company or purchased from
outside suppliers, it is subjected to quality control procedures,
including the verification of purity, prior to final packaging. This is
done by a combined staff of approximately 280 chemists and lab
technicians utilizing sophisticated scientific equipment.
3) Distribution and Sales:
The Company markets its chemical products through separate sales and
marketing units for research, fine chemicals and diagnostics and
distributes over 2,400,000 comprehensive catalogs for the Sigma, Aldrich,
Fluka, Riedel-de Haen and Supelco brands to customers and potential
customers throughout the world. This is supplemented by certain
specialty catalogs, by advertising in chemical and other scientific
journals, by direct mail distribution of in-house publications and
special product brochures and by personal visits by sales and technical
representatives with customers.
For customer convenience, Sigma packages approximately 200
combinations of certain individual products in diagnostic kit form. A
diagnostic kit contains products which, when used in a series of manual
and/or automated testing procedures, aid in detecting particular
conditions or diseases. Diagnostic products accounted for approximately
10% of the Company's sales of chemical products in the year ended
December 31, 1998.
During the year ended December 31, 1998, products were sold to
approximately 151,000 customers, including hospitals, universities,
pharmaceutical companies and clinical laboratories as well as private and
governmental research laboratories. The majority of the Company's sales are
small orders in laboratory quantities averaging approximately $300. The
Company also makes its chemical products available in larger-than-normal
laboratory quantities for use in manufacturing. Sales of these products
accounted for approximately 15% of chemical sales in 1998. During the year
ended December 31, 1998, no one customer and no one product accounted for more
than 2% of the net sales of chemical products.
Customers and potential customers, wherever located, are encouraged
to contact the Company by telephone ("collect" or on "toll-free" WATS
lines) or via our homepage on the World Wide Web for technical staff
consultation or for placing orders. Order processing, shipping,
invoicing and product inventory are computerized. Shipments are made
seven days a week from St. Louis, six days a week from Milwaukee, United
Kingdom, Germany, Israel and Japan and five days a week from all other
locations. The Company strives to ship its products to customers on the
same day an order is received and carries significant inventories to
maintain this policy.
4) International Operations:
In the year ended December 31, 1998, 55% of the Company's net sales
of chemical products were to customers located in foreign countries.
These sales were made directly by Sigma, Aldrich, Fluka, Riedel-de Haen
and Supelco, through distributors and by subsidiaries organized in
Argentina, Australia, Austria, Belgium, Brazil, Canada, Czech Republic,
Denmark, Finland, France, Germany, Greece, Hungary, India, Ireland,
Israel, Italy, Japan, Malaysia, Mexico, The Netherlands, Norway, Poland,
Russia, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland
and United Kingdom. Several foreign subsidiaries also have production
facilities.
For sales with final destinations in an international market, the
Company has a Foreign Sales Corporation ("FSC") subsidiary which provides
certain Federal income tax advantages. The effect of the tax rules
governing the FSC is to lower the effective Federal income tax rate on
export income. The Company intends to continue to comply with the
provisions of the Internal Revenue Code relating to FSCs.
The Company's international operations and domestic export sales are
subject to certain risks such as changes in the legal and regulatory
policies of foreign jurisdictions, local political and economic
developments, currency fluctuations, exchange controls, changes in tariff
restrictions, royalty and tax increases, export and import restrictions
and restrictive regulations of foreign governments, among other factors
inherent in these operations. The Company is unable to predict the
extent to which its business may be affected in the future by these
matters. During the year ended December 31, 1998, approximately 15% of
the Company's domestic operations' chemical purchases were from
international suppliers. Additional information regarding international
operations is included in Note 10 to the consolidated financial
statements on pages 24 and 25 of the 1998 Annual Report which is
incorporated herein by reference.
5) Patents and Trademarks:
The Company's patents are not material to its operations. The
Company's significant trademarks are the brand names, "Sigma", "Aldrich",
"Fluka", "Riedel-de Haen", "Supelco" and "B-Line" and marketing units,
"Sigma-Aldrich Research", "Sigma-Aldrich Fine Chemicals" and "Sigma
Diagnostics". Their related logos, which have various expiration dates,
are expected to be renewed indefinitely.
6) Regulations:
The Company engages principally in the business of selling products
which are not foods or food additives, drugs or cosmetics within the
meaning of the Federal Food, Drug and Cosmetic Act, as amended (the
"Act"). A limited number of the Company's products, including in-vitro
diagnostic reagents, are subject to labeling, manufacturing and other
provisions of the Act. The Company believes it is in compliance in all
material respects with the applicable regulations.
The Company believes that it is in compliance in all material
respects with Federal, state and local regulations relating to the
manufacture, sale and distribution of its products. The following are
brief summaries of some of the Federal laws and regulations which may
have an impact on the Company's business. These summaries are only
illustrative of the extensive regulatory requirements of the Federal,
state and local governments and are not intended to provide the specific
details of each law or regulation.
The Clean Air Act (CAA), as amended, and the regulations promulgated
thereunder, regulates the emission of harmful pollutants to the air
outside of the work environment. Federal or state regulatory agencies
may require companies to acquire permits, perform monitoring and install
control equipment for certain pollutants.
The Clean Water Act (CWA), as amended, and the regulations
promulgated thereunder, regulates the discharge of harmful pollutants
into the waters of the United States. Federal or state regulatory
agencies may require companies to acquire permits, perform monitoring and
to treat waste water before discharge to the waters of the United States
or a Publicly Owned Treatment Works (POTW).
The Occupational Safety and Health Act of 1970 (OSHA), including the
Hazard Communication Standard ("Right to Know"), and the regulations
promulgated thereunder, requires the labeling of hazardous substance
containers, the supplying of Material Safety Data Sheets ("MSDS") on
hazardous products to customers and hazardous substances the employee may
be exposed to in the workplace, the training of the employees in the
handling of hazardous substances and the use of the MSDS, along with
other health and safety programs.
The Resource Conservation and Recovery Act of 1976 (RCRA), as
amended, and the regulations promulgated thereunder, requires certain
procedures regarding the treatment, storage and disposal of hazardous
waste.
The Comprehensive Environmental Response, Compensation and Liability
Act of 1980 (CERCLA) and the Superfund Amendments and Reauthorization Act
of 1986 (SARA), and the regulations promulgated thereunder, require
notification of certain chemical spills and notification to state and
local emergency response groups of the availability of MSDS and the
quantities of hazardous materials in the Company's possession.
The Toxic Substances Control Act of 1976 (TSCA), requires reporting,
testing and pre-manufacture notification procedures for certain
chemicals. Exemptions are provided from some of these requirements with
respect to chemicals manufactured in small quantities solely for research
and development use.
The Department of Transportation (DOT) has promulgated regulations
pursuant to the Hazardous Materials Transportation Act, referred to as
the Hazardous Material Regulations (HMR), which set forth the
requirements for hazard labeling, classification and packaging of
chemicals, shipment modes and other goods destined for shipment in
interstate commerce.
Approximately 1,000 products, for which sales are immaterial to the
total sales of the Company, are subject to control by either the Drug
Enforcement Administration ("DEA") or the Nuclear Regulatory Commission
("NRC"). The DEA and NRC have issued licenses to several Company sites
to permit importation, manufacture, research, analysis, distribution and
export of certain products. The Company screens customer orders
involving products regulated by the NRC and the DEA to verify that a
license, if necessary, has been obtained.
Approximately 200 products, for which sales are immaterial to the
total sales of the Company, are subject to control by the Department of
Commerce ("DOC"). The DOC has promulgated the Export Administration
Regulations pursuant to the Export Administration Act of 1979, as
amended, to regulate the export of certain products by requiring a
special export license.
(b) Metal Products.
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Components for strut, cable tray and pipe support systems are
manufactured by B-Line at its facilities in Highland and Troy, Illinois;
Norcross, Georgia; Reno, Nevada and Sherman, Texas. Electrical and
electronic enclosures are manufactured at facilities in Aurora, Colorado;
Portland, Oregon; Modesto, California; and Sherman, Texas. Components
and complete systems used to support telecommunications apparatus and
cabling are manufactured at the plant in Reno, Nevada.
Strut and pipe support systems are metal frameworks and related
accessories used in industry to support pipes, lighting fixtures and
conduit. Strut systems can be easily assembled with bolts and
spring-loaded nuts, eliminating the necessity of drilling or welding
associated with other types of frameworks. B-Line manufactures and sells
a wide variety of components for these systems, including steel struts
rolled from coils, stamped steel fittings for interconnecting struts,
shelf-supporting brackets, pipe and conduit supporting clamps, and
accessories for the installation of strut systems on location. Pipe
hangers are generally used in conjunction with strut systems to support
heavy and light duty piping runs in the mechanical, plumbing and
refrigeration industry. The principal materials used by B-Line in
manufacturing are coils of steel and extruded aluminum which B-Line
purchases from a number of suppliers. No one supplier is essential to
B-Line's production. A limited number of components for strut and pipe
support systems, including bolts and nuts and certain forged and cast
components, are purchased from numerous sources and sold by B-Line as
accessories to its own manufactured products.
Cable tray systems are continuous networks of ventilated or solid
trays used primarily in the routing of power cables and control wiring in
power plant or industrial installations. The systems are generally hung
from ceilings or supported by strut frameworks. Cable tray is produced
from either extruded aluminum or roll-formed steel in various
configurations to offer versatility to designers and installers. Non-
metallic strut and cable tray products, which are used primarily in
corrosive environments, are also available.
Telecommunications equipment racks and cable runways are
manufactured from aluminum or steel. The systems are used in commercial
installations as well as installed in the central offices of telephone
operating companies. As switching equipment is changed and upgraded, the
systems are replaced.
Electrical and electronic enclosures are metal enclosure boxes,
generally manufactured from steel, that are used to contain and protect
electric meters, fuse and circuit breaker boards and electrical panels.
These products are used in industrial, commercial and residential
installations.
B-Line also manufactures a line of lightweight support fasteners to
be used in commercial and industrial facilities to attach electrical and
acoustical fixtures.
B-Line sells primarily to electrical, mechanical and
telecommunications wholesalers. Products are marketed directly by
district sales offices and by regional sales managers through independent
manufacturers' representatives. Products are shipped to customers from
the Highland and Troy, Illinois; Norcross, Georgia; Reno, Nevada;
Portland, Oregon; Modesto, California; Sherman, Texas; and Aurora,
Colorado plants, from one regional warehouse and 27 consigned stock
locations. B-Line's products are advertised in trade journals and by
circulation of comprehensive catalogs.
(c) Competition.
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Substantial competition exists in all of the Company's marketing and
production areas. Although no comprehensive statistics are available,
the Company believes it is a major supplier of organic chemicals and
biochemicals for research and for diagnostic testing procedures involving
enzymes and of chromatography products for analyzing and separating
complex chemical mixtures. A few competitors offer thousands of
chemicals and stock and analyze most of their products. While the
Company generally offers a larger number of products, some of the
Company's products are unusual and have relatively little demand. In
addition, there are many competitors who offer a limited quantity of
chemicals, and several companies compete with the Company by offering
thousands of chemicals, although few of them stock or analyze
substantially all of the chemicals they offer for sale.
The Company believes its B-Line subsidiary to be among the three
largest producers of metal strut framing, pipe hangers, cable tray
component systems and enclosures, although reliable industry statistics
are not available.
In all product areas the Company competes primarily on the basis of
customer service, product quality and price.
(d) Employees.
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The Company employed 7,162 persons as of December 31, 1998. Of
these, 5,739 were engaged in production and distribution of chemical
products. The B-Line subsidiary employed 1,423 persons. The total
number of persons employed within the United States was 4,748, with the
balance employed by the international subsidiaries. The Company employed
over 2,000 persons who have degrees in chemistry, biochemistry,
engineering or other scientific disciplines, including approximately 260
with Ph.D. degrees.
Employees engaged in chemical production, research and distribution
are not represented by any organized labor group. B-Line's production
workers at the Highland and Troy, Illinois facilities are members of the
International Association of Machinists and Aerospace Workers, District
No. 9 (AFL-CIO). The labor agreement covering these employees expires
November 14, 1999. B-Line's production workers at the Norcross, Georgia
facility are members of the United Food and Commercial Workers
International (AFL-CIO), Retail Clerks Union Local 1063. The labor
agreement covering these employees expires June 15, 2002.
(e) Back-log of Orders.
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The majority of orders for chemical products in laboratory
quantities are shipped from inventory, resulting in no back-log of these
orders. However, individual items may occasionally be out of stock.
These items are shipped as soon as they become available. Some orders
for larger-than-normal laboratory quantities are for future delivery. On
December 31, 1998 and 1997, the back-log of firm orders and orders for
future delivery of chemical products was not significant. The Company
expects that substantially all of the December 31, 1998 back-log will be
shipped during 1999.
On December 31, 1998 and 1997, the back-log of orders at B-Line was
not significant. B-Line expects that substantially all of the December
31, 1998 back-log will be shipped during 1999.
(f) Information as to Industry Segments.
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Information concerning industry segments for the years ended
December 31, 1998, 1997 and 1996, is located in Note 10 to the
consolidated financial statements on pages 24 and 25 of the 1998 Annual
Report which is incorporated herein by reference.
(g) Executive Officers of the Registrant.
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Information regarding executive officers is contained in Part III,
Item 10, and is incorporated herein by reference.
Item 2. Properties.
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The Company's primary chemical production facilities are located in
St. Louis, Missouri; Milwaukee and Sheboygan, Wisconsin; Bellefonte,
Pennsylvania and Buchs, Switzerland. In St. Louis, the Company owns a
328,000 square foot building used for manufacturing, a complex of
buildings aggregating 391,000 square feet which is used for warehousing
and production, a 75,000 square foot building used for warehousing, a
23,000 square foot building used for warehousing and office space, a
98,000 square foot building used for production, quality control and
packaging and a 19,000 square foot production facility. The Company owns
a 280,000 square foot building in St. Louis which is being partially
utilized to provide additional quality control and warehousing capacity.
Also in St. Louis, the Company owns 30 acres upon which is located a
286,000 square foot administration and distribution facility, in which
its principal executive offices are located, and a 175,000 square foot
diagnostic production and office building. In Milwaukee, the Company owns
a 178,000 square foot building which is used for manufacturing,
warehousing and offices, a 100,000 square foot building which is used for
additional manufacturing and warehousing and a complex of buildings
aggregating 322,000 square feet which is used primarily for warehousing
and distribution. Also in Milwaukee, the Company owns a 152,000 square
foot building which is used for warehousing, a 56,000 square foot
administration facility and a 627,000 square foot distribution facility.
The Company also owns 513 acres in Sheboygan, Wisconsin, upon which are
located multiple buildings totaling 332,000 square feet for production and
packaging. The Company also owns a 30,000 square foot administration,
production and warehousing facility in Natick, Massachusetts. Fluka owns a
13 acre site in Buchs,Switzerland, upon which are located its primary
production facilities. Approximately 357,000 square feet of owned
production, warehousing and office facilities are at this site. In
Greenville, Illinois, the Company owns 555 acres of land for future
development of biochemical production facilities. Supelco owns 71 acres near
Bellefonte, Pennsylvania, upon which is located a 153,000 square foot
building used for manufacturing, warehousing, research and administration.
Riedel-de Haen leases a 200,000 square foot production facility and an
administration building in Seelze, Germany.
The Company's B-Line manufacturing business is located in Highland
and Troy, Illinois; Norcross, Georgia; Sherman, Texas; Reno, Nevada;
Portland, Oregon; Modesto, California; and Aurora, Colorado. B-Line
owns a 273,000 square foot building in Highland, Illinois, a 115,000
square foot building in Troy, Illinois, a 115,000 square foot building in
Portland, Oregon, a 238,000 square foot building in Sherman, Texas, a
173,000 square foot building in Reno, Nevada and a 102,000 square foot
building in Modesto, California. B-Line leases a 100,000 square foot
facility in Norcross, Georgia and a 113,000 square foot facility in
Aurora, Colorado.
The Company also owns a 173,000 square foot warehouse and
distribution facility in Allentown, Pennsylvania, leases a 20,000 square foot
administration and production facility in The Woodlands, Texas and leases
warehouses in Chicago, Illinois and in Bethany, Connecticut under short-term
leases. Manufacturing and/or warehousing facilities are also owned or leased in
the United Kingdom, Australia, Canada, Denmark, Finland, France, Germany,
Israel, Japan, Mexico, Norway, Scotland, South Korea, Sweden and
Switzerland. Sales offices are leased in all other locations.
The Company considers the properties to be well maintained, in sound
condition and repair, and adequate for its present needs. The Company
expects to continue to expand its production and distribution
capabilities in select markets.
Item 3. Legal Proceedings.
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There are no material pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.
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No matters were submitted by the Registrant to the stockholders for
a vote during the fourth quarter of 1998.
PART II
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Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
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Information concerning market price of the Registrant's Common Stock
and related shareholder matters for the years ended December 31, 1998 and
1997, is located on page 28 of the 1998 Annual Report which is
incorporated herein by reference.
As of March 5, 1999, there were 1,858 record holders of the
Registrant's Common Stock.
Items 6 through 8. Selected Financial Data, Management's Discussion and
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Analysis of Financial Condition and Results of Operations, Qualitative
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and Quantitative Market Risk Disclosure and Financial Statements and
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Supplementary Data.
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The information required by Items 6 through 8 is incorporated herein
by reference to pages 12-27 of the 1998 Annual Report. See Index to
Financial Statements and Schedules on page F-1 of this report. Those
pages of the Company's 1998 Annual Report listed in such Index or
referred to in Items 1(a)(4), 1(f) and 5 are incorporated herein by
reference.
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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Information under the captions "Nominees for Board of Directors" and
"Security Ownership of Directors, Executive Officers and Principal
Beneficial Owners" of the 1999 Proxy Statement is incorporated herein by
reference.
The executive officers of the Registrant are:
Name of Executive Officer Age Positions and Offices Held
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Karsten Bode 45 Vice President and President,
Riedel-de Haen
Thomas E. Briggs 53 Vice President and President, B-Line
Larry S. Blazevich 51 Vice President, Information Services
Terry R. Colvin 43 Vice President, Human Resources
Carl T. Cori 62 Chairman of the Board and Chief
Executive Officer
J. Russel Gant 48 Vice President and President, Supelco
David R. Harvey 59 President and Chief Operating Officer
David W. Julien 44 Vice President and President, Sigma
Rodney L. Kelley 44 Vice President, Safety
James W. Meteer 48 Vice President, Quality
Karen J. Miller 41 Controller
Robert Monaghan 52 Vice President and President,
Sigma Diagnostics
Richard G. Morris 50 Vice President and President,
Sigma-Aldrich Research
Jai P. Nagarkatti 51 Vice President and President, Aldrich
Phillip Ottiger 56 Vice President and President,
Sigma-Aldrich Fine Chemicals
Kirk A. Richter 52 Treasurer
Thomas M. Tallarico 54 Vice President and Secretary
Herbert Vuilleumier 52 Vice President and President, Fluka
Frank D. Wicks 45 Vice President, Operations
There is no family relationship between any of the officers.
Mr. Bode was elected President of Riedel-de Haen in July 1997 after
serving as head of the Logistics/Technique Department for Fluka for more
than 3 years.
Mr. Briggs has been President of B-Line for more than five years.
Mr. Blazevich joined Sigma-Aldrich in April 1996 as Director of
Information Services and was elected Vice President, Information Services
in June 1996. Previously, Mr. Blazevich was employed with Thomas and
Betts for sixteen years where he served as Vice President of Information
Services from 1988-1996.
Mr. Colvin was elected Vice President, Human Resources of the Company in
March 1998. He served as Vice President, Human Resources at Sigma from
January 1995 to February 1998 and as Director of Human Resources at B-
Line from January 1987 to December 1994.
Dr. Cori has been Chairman and Chief Executive Officer of the Company for
more than five years. He served as President of the Company for more
than five years until March 1995.
Dr. Gant was elected President of Supelco in December 1995. He served as
Vice President of Supelco from May 1993 to December 1995.
Dr. Harvey has been Chief Operating Officer of the Company for more than
five years. He was elected President of the Company in March 1995, after
serving as Executive Vice President for more than five years.
Mr. Julien was elected President of Sigma in August 1998. He served as
Vice President of Sigma from November 1995 to July 1998. Previously, Mr.
Julien served as Director of Biotechnology Facilities Design at Jacobs
Engineering Group.
Mr. Kelley was elected Vice President of Safety in August 1998. He
served as Director of Safety for over four years prior to August 1998.
Mr. Meteer was elected Vice President, Quality of the Company in
September 1996 after serving as Director of Quality since 1995.
Previously, Mr. Meteer was a Vice President of Supelco from 1993-1995.
Ms. Miller was elected Controller of the Company in May 1997.
Previously, Ms. Miller was employed as Controller of several divisions at
Allergan, Inc. for more than five years until February 1997.
Mr. Monaghan joined Sigma-Aldrich in July 1998 as President of Sigma
Diagnostics. Previously, Mr. Monaghan was employed as Vice President of
Dade Behring and Vice President of Behring Diagnostics from October 1997
to July 1998 and from April 1991 to October 1997, respectively.
Dr. Morris joined Sigma-Aldrich in February 1995 as President of Sigma-
Aldrich Research. Previously, Mr. Morris served as Vice President for
world-wide sales at Molecular Dynamics.
Dr. Nagarkatti has been President of Aldrich for more than five years.
Mr. Ottiger has been President of Sigma-Aldrich Fine Chemicals for more
than five years.
Mr. Richter was elected Treasurer in May 1997 after serving as Controller
for more than five years.
Mr. Tallarico was elected Secretary in November 1994. He has been a Vice
President of the Company for more than five years and served as Treasurer
and Chief Financial Officer of the Company from May 1991 to November
1994.
Dr. Vuilleumier has been President of Fluka for more than five years.
Dr. Wicks was elected Vice President of Operations in August of 1998.
Previously, he served as President of Sigma for five years.
The present terms of office of the officers will expire when the next
annual meeting of the Directors is held and their successors are elected.
Item 11. Executive Compensation.
- --------------------------------------------------------------------------------
Information under the captions "Director Compensation and
Transactions" and "Information Concerning Executive Compensation" of the
1999 Proxy Statement is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
- --------------------------------------------------------------------------------
Information under the caption "Security Ownership of Directors,
Executive Officers and Principal Beneficial Owners" of the 1999 Proxy
Statement is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions.
- --------------------------------------------------------------------------------
Information under the caption "Director Compensation and
Transactions" of the 1999 Proxy Statement is incorporated herein by
reference.
PART IV
- --------------------------------------------------------------------------------
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
- --------------------------------------------------------------------------------
(a) Documents filed as part of this report:
1. Financial Statements.
See Index to Financial Statements and Schedules on page F-1 of
this report. Those pages of the Company's 1998 Annual Report
listed in such Index or referred to in Items 1(a)(4), 1(f) and
5 are incorporated herein by reference.
2. Financial Statement Schedules.
See Index to Financial Statements and Schedules on page F-1 of
this report.
3. Exhibits.
See Index to Exhibits on page F-5 of this report.
(b) Reports on Form 8-K:
No reports on Form 8-K have been filed during the last quarter
of the period covered by this report.
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.
SIGMA-ALDRICH CORPORATION
(Registrant)
By /s/ Karen J. Miller March 31, 1999
--------------------------------- --------------
Karen J. Miller, Controller Date
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Carl T. Cori, David R. Harvey,
Karen J. Miller, Kirk A. Richter and Thomas M. Tallarico and each of them
(with full power to each of them to act alone), his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments (including post-effective
amendments) to this report, and to file the same, with all exhibits
thereto and other documents in connection therewith with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents,
and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
By /s/ Carl T. Cori March 31, 1999
----------------------------------------- --------------
Carl T. Cori, Director, Chairman of the Date
Board and Chief Executive Officer
By /s/ David R. Harvey March 31, 1999
----------------------------------------- --------------
David R. Harvey, Director, President and Date
Chief Operating Officer
By /s/ Karen J. Miller March 31, 1999
----------------------------------------- --------------
Karen J. Miller, Controller Date
By /s/ Kirk A. Richter March 31, 1999
----------------------------------------- --------------
Kirk A. Richter, Treasurer Date
By /s/ Thomas M. Tallarico March 31, 1999
----------------------------------------- --------------
Thomas M. Tallarico, Vice President and Date
Secretary
By /s/ David M. Kipnis March 31, 1999
----------------------------------------- --------------
David M. Kipnis, Director Date
By /s/ Andrew E. Newman March 31, 1999
----------------------------------------- --------------
Andrew E. Newman, Director Date
By /s/ William C. O'Neil, Jr. March 31, 1999
----------------------------------------- --------------
William C. O'Neil, Jr., Director Date
SIGMA-ALDRICH CORPORATION AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
- --------------------------------------------------------------------------------
Page Number
Reference
-------------
Annual Report
to Shareholders
---------------
Annual financial data for the years
1998, 1997, 1996, 1995 and 1994 28
Management's discussion of financial
condition and results of operations 12
Market Risk Disclosure 15
FINANCIAL STATEMENTS:
Consolidated Balance Sheets
December 31, 1998 and 1997 17
Consolidated statements for the years
ended December 31, 1998, 1997 and 1996
Income 16
Stockholders' Equity 18
Cash Flows 19
Notes to consolidated financial statements 20
Report of independent public accountants 16
Form 10-K
---------
FINANCIAL STATEMENT SCHEDULES:
Schedule II - Valuation and Qualifying Accounts F-3
All other schedules are omitted as they are
not applicable, not required or the information
is included in the consolidated financial
statements or related notes to the consolidated
financial statements.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Stockholders of Sigma-Aldrich Corporation:
We have audited in accordance with generally accepted auditing
standards, the financial statements included in Sigma-Aldrich
Corporation's 1998 Annual Report to Shareholders incorporated by
reference in this Form 10-K, and have issued our report thereon dated
February 16, 1999. Our audit was made for the purpose of forming an
opinion on those statements taken as a whole. Schedule II included in
this Form 10-K 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 our 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.
ARTHUR ANDERSEN LLP
St. Louis, Missouri
February 16, 1999
SIGMA-ALDRICH CORPORATION AND SUBSIDARIES
SCHEDULE II- VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
For the Years Ended December 31
(In Thousands)
- --------------------------------------------------------------------------------
Balance at Deductions Balance at
Description: Beginning of Additions from End of the
Fiscal Year Year to Reserves Reserves Year
- -------------- ------------ ----------- ---------- ----------
Allowance for
Doubtful Accounts:
1998 $6,532 $2,039 $1,822 $6,749
1997 7,338 620 1,427 6,532
1996 8,838 91 1,591 7,338
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
As independent public accountants, we hereby consent to the
incorporation of our report incorporated by references in this Form 10-
K, into the Company's previously filed registration statement on Form S-
3, file number 33-74163 and on Form S-8, file numbers 33-24415, 33-
62541 and 33-64661.
ARTHUR ANDERSEN LLP
St. Louis, Missouri
March 29, 1999
INDEX TO EXHIBITS
-----------------
These Exhibits are numbered in accordance with the Exhibit Table of Item 6.01 of
Regulation S-K:
Exhibit Reference
----------- -------------
(3) Certificate of Incorporation and By-Laws:
(a) Certificate of Incorporation and Amendments Incorporated by
reference to Exhibit
3(a) of Form 10-K filed
for the year ended
December 31, 1991,
Commission File
Number 0-8135.
(b) By-Laws as amended May 1997 See Exhibit 3(b).
(4) Instruments Defining the Rights of
Shareholders, Including Indentures:
(a) Certificate of Incorporation and Amendments See Exhibit 3(a) above.
(b) By-Laws as amended May 1997 See Exhibit 3(b) above.
(c) The Company agrees to furnish to the
Securities and Exchange Commission upon
request pursuant to Item 601(b)(4)(iii)
of Regulation S-K copies of instruments
defining the rights of holders of long-term
debt of the Company and its consolidated
subsidiaries.
(10) Material Contracts:
(a) Third Amendment and Restatement Incorporated by reference
Incentive Stock Bonus Plan* to Exhibit of the 10(d)
of Form 10-K filed for
the year ended
December 31, 1996,
Commission File Number
0-8135.
(b) Share Option Plan of 1987* Incorporated by reference
to Exhibit 10(d) of Form
10-K filed for the year
ended December 31, 1992,
Commission File Number
0-8135.
(c) First Amendment to Share Option Incorporated by reference
to Exhibit Plan of 1987*
10(e) of Form 10-K filed
for the year ended
December 31, 1992,
Commission File Number
0-8135.
(d) Second Amendment to Share Option Incorporated by reference
to Exhibit Plan of 1987*
10(f) of Form 10-K filed
for the year ended
December 31, 1994,
Commission File Number
0-8135.
(e) Employment Agreement with Carl T. Cori* Incorporated by reference
(Similar Employment Agreements also 10 (f) of For 10-K filed
exist with Karsten Bode, Thomas E. Briggs, for the year ended
Larry S. Blazevich, Terry R. Colvin, December 31, 1992,
J. Russel Gant, David R. Harvey, David W. Commission File Number
Julien, Rodney L. Kelley, James W. Meeter, 0-8135.
Karen J. Miller, Robert Monaghan,
Richard G. Morris, Jai P. Nagarkatti,
Phillip Ottiger, Kirk A. Richter,
Thomas M. Tallarico, Herbert Vuilleumier,
and Frank D. Wicks)
(f) Letter re: Consultation Services with Incorporated by reference
Dr. David M. Kipnis* to Exhibit 10 (g) of Form
10-K filed for the year
ended December 31, 1992,
Commission File Number
0-8135.
(g) Share Option Plan of 1995* Incorporated by reference
to Appendix A of the
Company's Definitive
Proxy Statement filed
March 30, 1995,
Commission File Number
0-8135.
(h) Separation Agreement and See Exhibit 10(h).
Release with Peter Gleich
(i) Consulting Agreement and Release See Exhibit 10(i).
with Floyd Worley
(11) Statement Regarding Computation of Per Incorporated by reference
Share Earnings to the information on net
income per share included
in Note 1 to the
Company's 1998 financial
statements filed as
Exhibit 13.
(13) Pages 12-28 of the Annual Report to Shareholders See Exhibit 13.
for the year ended December 31, 1998
(21) Subsidiaries of Registrant See Exhibit 21.
(23) Consent of Independent Public Accountants Page F-4 of this report.
(27) Financial Data Schedule See Exhibit 27.
*Represents management contract or compensatory plan or arrangement required to
be filed as an exhibit pursuant to Item 14(c) of Form 10-K.