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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended JUNE 24, 2000 Commission File No. 1-367
THE L.S. STARRETT COMPANY
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-1866480
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
121 CRESCENT STREET, ATHOL, MASSACHUSETTS 01331
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 978-249-3551
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Class A Common - $1.00 Per Share Par Value New York Stock Exchange
Class B Common - $1.00 Per Share Par Value Not applicable
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K 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.
Yes X No
The Registrant had 4,999,993 and 1,483,837 shares, respectively, of its $1.00
par value Class A and B common stock outstanding on July 28, 2000. On that
date, the aggregate market value of the common stock held by nonaffiliates was
approximately $117,000,000.
The exhibit index is located on page 23.
Documents incorporated by reference
Proxy Statement dated August 11, 2000 - Part III
PART I
Item I - Business
The Company was founded in 1880 and incorporated in 1929 and is engaged in the
business of manufacturing industrial, professional, and consumer products. The
total number of different items made and sold by the Company exceeds 5,000.
Among the items produced are precision tools, tape measures, levels,
electronic gages, dial indicators, gage blocks, digital readout measuring
tools, granite surface plates, optical measuring projectors, coordinate
measuring machines, vises, M1 lubricant, hacksaw blades, hole saws, band saw
blades, jig saw blades, reciprocating saw blades, and precision ground flat
stock. Much of the Company's production is concentrated in hand measuring
tools (such as micrometers, steel rules, combination squares and many other
items for the individual craftsman) and precision instruments (such as vernier
calipers, height gages, depth gages and measuring instruments that
manufacturing companies buy for the use of their employees).
These tools and instruments are sold throughout the United States and Canada
and over 100 foreign countries, primarily through distributors. By far the
largest consumer of these products is the metalworking industry, but other
important consumers are automotive, aviation, marine and farm equipment shops,
do-it-your-selfers and tradesmen such as builders, carpenters, plumbers and
electricians. One retailer, Sears, accounted for approximately 13% of the
Company's sales in fiscal 2000.
Most of the Company's products are made from steel purchased from steel mills.
Forgings, castings, and a few small finished parts are purchased from other
manufacturers. Raw materials have always been readily available to the Company
and, in most cases, the Company does not rely on sole sources. In the event of
unavailability of purchased materials, the Company would be adversely
affected, as would its competitors. Similarly, the ability of the Company to
pass along raw material price increases is dependent on the competitive
situation and cannot be assured.
At June 24, 2000, the Company had 2,776 employees, approximately 70% of whom
were domestic. None of the Company's operations are subject to collective
bargaining agreements. In general, the Company considers its relations with
its employees to be excellent. Because of various stock ownership plans,
Company domestic personnel hold a large share of Company stock and this dual
role of owner-employee has been good for morale over the years.
The Company is one of the largest producers of mechanics' hand measuring tools
and precision instruments. In the United States, there are three other major
companies and numerous small competitors in the field, including direct
foreign competitors. As a result, the industry is highly competitive. During
the fiscal year ended June 24, 2000, there were no material changes in the
Company's competitive position. During recent years, changes in the volume of
sales of the Company have, in general, corresponded with changes throughout
the industry. In saws and precision ground flat stock, the Company in the
United States competes with many manufacturers. The Company competes
principally through the high quality of its products and the service it
provides its customers.
The operations of the Company's foreign subsidiaries are consolidated in its
financial statements. The subsidiaries located in Brazil, Scotland, and China
are actively engaged in the manufacture of hacksaw and band saw blades and a
limited line of precision tools and measuring tapes. A subsidiary in Australia
and a subsidiary in Germany are engaged in distribution of the Company's
products. The Company expects its foreign subsidiaries to continue to play a
significant role in its overall operations. A summary of the Company's foreign
operations is contained in the footnotes to the Company's fiscal 2000
financial statements under the caption "OPERATING DATA" found in item 8 of
this Form 10K and is hereby incorporated by reference.
The Company generally fills orders from finished goods inventories on hand.
Sales order backlog of the Company at any point in time is negligible. Total
inventories amounted to $79,890,000 at June 24, 2000, and $78,041,000 at June
26, 1999. The Company uses the last-in, first-out (LIFO) method of valuing
most inventories, which results in more realistic operating costs and profits.
Inventory amounts are $22,683,000 and $23,521,000 lower, respectively, than if
determined on a first-in, first-out (FIFO) basis.
The Company does apply for patent protection on new inventions and presently
owns a number of patents. Its patents are considered important in the
operation of the business, but no single patent is of material importance when
viewed from the standpoint of its overall business. The Company relies on its
continuing product research and development efforts, with less dependence on
its present patent position. It has for many years maintained engineers and
supporting personnel engaged in research, product development, and related
activities. The expenditures for these activities during fiscal years 2000,
1999 and 1998 were approximately $3,111,000, $2,860,000 and $3,406,000,
respectively, all of which was expensed in the Company's financial statements.
The Company uses trademarks with respect to its products. All of its
important trademarks are registered.
Compliance with federal, state and local provisions that have been enacted or
adopted regulating the discharge of materials into the environment or
otherwise relating to protection of the environment is not expected to have a
material effect on the capital expenditures, earnings and competitive position
of the Company. Specifically, the Company has taken steps to reduce and
control water discharges and air emissions.
The Company's business is to a small extent seasonal, with sales and earnings
generally at the lowest level during the first and third quarters of the
fiscal year.
Item 2 - Properties
The Company's principal plant is located in Athol, Massachusetts on about 15
acres of Company-owned land. The plant consists of 25 buildings, mostly of
brick construction of varying dates, with approximately 535,000 square feet of
production and storage area. An additional 9,000 square feet of leased space
in Gardner, Massachusetts is considered part of this plant.
The Webber Gage Division, Cleveland, Ohio, owns and occupies two buildings
containing approximately 50,000 square feet.
The Company-owned facility in Mt. Airy, North Carolina has approximately
320,000 square feet. It is occupied by the Company's Saw Division, Granite
Surface Plate Division, Coordinate Measuring Machine and Optical Comparator
Division, and Ground Flat Stock Division. This plant is subject to a mortgage
collateralizing an Industrial Revenue Bond with a remaining balance of
$300,000 due to be paid off in September 2000.
The Company's Evans Rule Division, located in North Charleston, South
Carolina, owns and occupies a 173,000 square foot building. In addition, this
division leases 45,000 square feet of manufacturing space in Mayaguez, Puerto
Rico.
The Company's Exact Level Division is located in Alum Bank, Pennsylvania and
owns and occupies a 50,000 square foot building.
The Company's Brazil subsidiary owns and occupies several buildings totaling
209,000 square feet. The Company's Scotland subsidiary owns and occupies a
187,000 square foot building and also a 33,000 square foot building in
Skipton, England, where its wholly owned subsidiary manufactures optical
measuring projectors. A second wholly owned subsidiary located in Skipton
performs calibration services and leases about 4,000 square feet. A wholly
owned subsidiary in the People's Republic of China leases approximately
40,000 square feet.
In addition, the Company operates warehouses/sales-support offices in
Glendale, Arizona; Elmhurst, Illinois; Atlanta, Georgia; Mississauga, Canada;
Sydney, Australia; and Schmitten, Germany.
In the Company's opinion, all of its property, plant and equipment is in good
operating condition, well maintained and adequate for its needs.
Item 3 - Legal Proceedings
The Company is not involved in any material pending legal proceedings.
Item 4 - Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended June 24, 2000.
Executive Officers of the Registrant
The information under the caption Executive Officers of the Registrant in item
10 of this Form 10K is hereby incorporated by reference.
PART II
Item 5 - Market for the Registrant's Common Equity and Related
Stockholder Matters
The Company's Class A common stock is traded on the New York Stock Exchange.
Quarterly dividend and high/low closing market price information is presented
in the table below. The Registrant's Class B common stock is generally
nontransferable, except to lineal descendants and thus has no established
trading market, but it can be converted into Class A common stock at any time.
The Class B common stock was issued on October 5, 1988, and the Registrant has
paid the same dividends thereon as have been paid on the Class A common stock
since that date. At July 28 2000, there were 2,160 registered holders of
Class A common stock and 1,712 registered holders of Class B common stock.
Quarter ended Dividends High Low
September 1998 $ 0.20 $ 39.06 $ 34.25
December 1998 0.20 37.75 29.81
March 1999 0.20 34.25 25.75
June 1999 0.20 30.69 25.13
September 1999 0.20 29.44 24.25
December 1999 0.20 27.88 21.25
March 2000 0.20 24.75 20.50
June 2000 0.20 24.25 18.50
Item 6 - Selected Financial Data
Years ended in June ($000 except per share data)
2000 1999 1998 1997 1996
Net sales $235,169 $232,385 $262,340 $250,503 $235,467
Net earnings 11,489 16,696 23,009 19,859 17,331
Basic earnings per share 1.73 2.44 3.34 2.84 2.45
Diluted earnings per share 1.73 2.44 3.33 2.84 2.45
Long-term debt 3,000 3,300 3,900 6,500 7,100
Total assets 250,418 245,728 250,263 238,746 227,312
Dividends per share 0.80 0.80 0.77 0.72 0.72
Item 7 - Management's Discussion and Analysis of Financial Condition
and Results of Operations
RESULTS OF OPERATIONS
SALES
Sales increased 1% in fiscal 2000 following an 11% decrease in fiscal 1999.
The current year increase is all domestic. Foreign sales were about even
with last year as decreases in the first half of the year, which were the
result of the Brazil currency devaluation that took place in January 1999,
were overcome by increased unit volume. For the past two years, the strong
British pound has been adversely affecting our Scottish subsidiary's
business both in terms of export pricing and domestic import competition.
The current year increase in domestic sales is substantially due to product
mix. The industrial manufacturing sector where we do most of our business
continues flat. In fiscal 1999, domestic sales were down 9%, reflecting a
downturn in the industrial manufacturing sector, and foreign sales were down
15%. The foreign decrease was due mostly to the 40% devaluation of Brazil's
currency in January 1999. In terms of local currency, foreign sales were
down only 3%.
EARNINGS BEFORE TAXES
Pretax earnings are down 27% for the current year and were down 31% in fiscal
1999. Cost of sales was 71.7% in 2000, 69.3% in 1999, and 67.3% in 1998.
Generally, changes in these rates are impacted by the manufacturing
efficiencies that are gained or lost as a result of increased or decreased
production levels. During 2000, domestic margins were adversely affected by
product mix, lower factory overhead absorption, increased fringe benefit
costs, particularly pension, and our data processing conversion. The strong
pound mentioned above has had a significant negative effect on Scotland's
margins for the past two years. In Brazil, the currency devaluation reduced
the absolute amount of pretax profits last year, but its effect on importers
with whom we compete has allowed our operation to improve margins in both
years.
INCOME TAXES
The effective tax rate is 33% in 2000 compared to 29% in 1999 and 33% in 1998.
Tax-exempt interest on short-term investments in municipal bonds, Puerto Rico
tax incentives and somewhat lower foreign income tax rates all contribute to
an overall effective tax rate that is slightly lower than the combined U.S.
state and federal statutory rate. Nonrecurring permanent differences between
book and taxable income for dividends paid from Brazil to the U.S. in all
years, but particularly in 1999, have reduced their effective tax rate
substantially when reported in U.S. dollars.
NET EARNINGS
As a result of the above, net earnings were down 31% in fiscal 2000 when
compared to 1999 and 1999 net earnings were down 27% when compared to 1998.
MARKET RISK
Market risk is the potential change in a financial instrument's value caused
by fluctuations in interest and currency exchange rates, and equity and
commodity prices. The Company's operating activities expose it to many risks
that are continually monitored, evaluated, and managed. Proper management of
these risks helps reduce the likelihood of earnings volatility. At June 2000
and 1999, the Company was not a party to any derivative arrangement and the
Company does not engage in trading, market-making or other speculative
activities in the derivatives markets. In addition, the Company does not
enter into long-term supply contracts with either fixed prices or
quantities.
The Company does not engage in regular hedging activities to minimize the
impact of foreign currency fluctuations. Net monetary assets in Scotland and
Brazil total approximately $3 million. Inflation in Brazil has decreased to
about 10% today from over 2000% in 1994 when their current economic plan was
initiated. As a consequence, their economy ceased to be considered
hyperinflationary as of January 1998.
A 10% change in interest rates would not have a significant impact on the
aggregate net fair value of the Company's interest rate sensitive financial
instruments (primarily variable rate investments of $7,000,000 and debt of
$9,700,000 at June 24, 2000) or the cash flows or future earnings associated
with those financial instruments. A 10% change in interest rates would impact
the fair value of the Company's fixed rate investments of approximately
$6,600,000 by $300,000.
LIQUIDITY AND CAPITAL RESOURCES
Years ended In June ($000)
2000 1999 1998
Cash provided by operations $18,822 $16,309 $28,713
Cash used in investing activities (9,267) (10,278) (15,838)
Cash used in financing activities (7,892) (9,389) (12,203)
Effect of translation rate
changes on cash 74 (76) (20)
Increase (decrease) in cash $ 1,737 $(3,434) $ 652
Cash flows from operating activities increased $3 million from 1999, and in
1999 decreased $12 million from 1998. Increasing inventories caused the
reduced cash flow from operations in 1999.
The Company's investing activities consist mainly of expenditures for
property, plant and equipment and the investment of cash not immediately
needed for operations. Plant expenditures of $14 million in 2000 are less
than the $20 million experienced in 1999 and the $16 million experienced in
1998, but are more normal than those years, especially 1999, which contained
a major building expansion.
Cash flows from financing activities are primarily the payment of dividends,
which tend to be quite steady from year to year. The Company requires little
debt to finance day to day operations and the proceeds from the sale of
stock under the various stock plans tend to be used to purchase treasury
shares. Treasury share purchases were $9.0 million in 2000 compared to $9.9
million in 1999 and $5.3 million in 1998.
The Company maintains sufficient liquidity and has the resources to fund its
operations under current business conditions. The Company maintains a line
of credit as discussed in the notes to the financial statements. The Company
has not made significant borrowings under this line during the past three
years. The Company continues to maintain a strong financial position with a
working capital ratio of 4.7 to 1 as of June 24, 2000 and 5.7 to 1 as of
June 26, 1999. Cash not immediately required for working capital is invested
in high grade money market instruments with maturities generally less than
one year (however, see the notes to the financial statements regarding
investments in Puerto Rico). Certain cash and investment balances of foreign
subsidiaries may not be repatriated without adverse tax consequences and in
certain cases may be subject to regulatory restriction.
SAFE HARBOR STATEMENT
UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This document and the 2000 Annual Report, including the Chairman's letter to
stockholders, include forward-looking statements about the Company's business,
sales, expenditures, environmental regulatory compliance, foreign operations,
interest rate sensitivity, debt service, liquidity and capital resources, and
other operating and capital requirements. In addition, forward-looking
statements may be included in future Company documents and in oral statements
by Company representatives to security analysts and investors. The Company is
subject to risks that could cause actual events to vary materially from such
forward-looking statements, including the following risk factors:
Risks Related to Technology: Although the Company's strategy includes
investment in research and development of new and innovative products to meet
technology advances, there can be no assurance that the Company will be
successful in competing against new technologies developed by competitors.
Risks Related to Adoption of the Euro: The new European currency (the Euro)
began being used by the eleven participating European countries January 1,
1999. Although the United Kingdom is not currently a Euro country, the
Company's Scottish subsidiary does a significant amount of business with Euro
countries. Management believes it has the necessary systems and business
processes to deal with what is, in effect, one more foreign currency, but
there can be no assurance that there will not be unforeseen economic effects
of this change that might affect the Company's sales or margins on business
done with Euro countries.
Risks Related to Foreign Operations: For the period ended June 24, 2000,
approximately a third of the Company's sales and net assets relate to foreign
operations. Foreign operations are subject to special risks that can
materially affect the sales, profits, cash flows, and financial position of
the Company, including taxes and other restrictions on distributions and
payments, currency exchange rate fluctuations, political and economic
instability, inflation, minimum capital requirements, and exchange controls.
In particular, the Company's Brazilian operations, which constitute over half
of the Company's revenues from foreign operations, can be very volatile,
changing from year to year due to the political situation and economy. As a
result, the future performance of the Brazilian operations is inherently
unpredictable. See Management's Discussion (SALES) regarding the recent
devaluation of the Brazilian currency.
Risks Related to Cyclical Nature of the Industry: The market for most of the
Company's products is subject to economic conditions affecting the industrial
manufacturing sector, including the level of capital spending by industrial
companies. Accordingly, economic weakness in the industrial manufacturing
sector will result in decreased demand for the Company's products and will
adversely affect performance.
Risks Related to Competition: The Company's business is subject to direct and
indirect competition from both domestic and foreign firms. In particular,
low-wage foreign sources have created severe competitive pricing pressures.
Under certain circumstances, including significant changes in U.S. and foreign
currency relationships, such pricing pressures might reduce unit sales and/or
adversely affect the Company's margins.
Item 8 - Financial Statements and Supplementary Data
Contents: Page
Report of Independent Auditors 9
Consolidated Statements of Earnings and Cash Flows 10
Consolidated Balance Sheets 11
Consolidated Statements of Stockholders' Equity 12
Notes to Consolidated Financial Statements 13-19
INDEPENDENT AUDITORS' REPORT
To the Stockholders and Directors of
The L.S. Starrett Company
We have audited the accompanying consolidated balance sheets of The L.S.
Starrett Company and subsidiaries as of June 24, 2000 and June 26, 1999, and
the related consolidated statements of earnings, cash flows and changes in
stockholders' equity for each of the three years in the period ended June 24,
2000. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company and subsidiaries as
of June 24, 2000 and June 26, 1999, and the results of their operations and
their cash flows for each of the three fiscal years in the period ended June
24, 2000, in conformity with accounting principles generally accepted in the
United States of America.
S/DELOITTE & TOUCHE LLP
Boston, Massachusetts
July 28, 2000
THE L.S. STARRETT COMPANY
Consolidated Statements of Earnings and Cash Flows
For the years ended in June (in thousands of dollars except per share data)
2000 1999 1998
EARNINGS
Net sales $235,169 $232,385 $262,340
Cost of goods sold (168,648) (160,984) (176,591)
Selling, general and administrative expense (49,788) (49,393) (53,433)
Other income and expense 496 1,618 1,806
Earnings before income taxes 17,229 23,626 34,122
Income taxes 5,740 6,930 11,113
Net earnings $ 11,489 $ 16,696 $ 23,009
Basic earnings per share, based on
average outstanding shares of
6,645,019, 6,840,283 and 6,888,854 $ 1.73 $ 2.44 $ 3.34
Diluted earnings per share, based on
average outstanding shares of
6,652,796, 6,846,406 and 6,902,950 $ 1.73 $ 2.44 $ 3.33
CASH FLOWS
Cash flows from operating activities:
Net earnings $ 11,489 $ 16,696 $ 23,009
Noncash expenses:
Depreciation and amortization 11,380 11,207 10,727
Deferred taxes 2,108 2,058 1,945
Unrealized translation losses 154
Working capital changes:
Receivables (1,189) 2,809 (4,506)
Inventories (3,357) (9,110) 1,518
Other current assets and liabilities 1,293 (2,824) (1,016)
Prepaid pension and other (2,902) (4,527) (3,118)
Net cash from operating activities 18,822 16,309 28,713
Cash flows from investing activities:
Additions to plant and equipment (13,974) (20,319) (16,148)
Decrease in investments 4,707 10,041 310
Net cash used in investing activities (9,267) (10,278) (15,838)
Cash flows from financing activities:
Short-term borrowing, net 3,090 2,599 (2,609)
Debt repayments, net (300) (600) (2,600)
Common stock issued 3,665 3,968 3,590
Treasury shares purchased (9,045) (9,894) (5,286)
Dividends (5,302) (5,462) (5,298)
Net cash used in financing activities (7,892) (9,389) (12,203)
Effect of translation rate changes on cash 74 (76) (20)
Net increase (decrease) in cash 1,737 (3,434) 652
Cash beginning of year 271 3,705 3,053
Cash end of year $ 2,008 $ 271 $ 3,705
Supplemental cash flow information:
Interest paid $ 844 $ 577 $ 684
Taxes paid $ 4,190 $ 5,822 $ 12,519
See Notes to Consolidated Financial Statements
THE L.S. STARRETT COMPANY
Consolidated Balance Sheets
(in thousands of dollars)
June 24 June 26
ASSETS 2000 1999
Current assets:
Cash $ 2,008 $ 271
Investments 12,043 16,933
Accounts receivable (less allowance for doubtful
accounts of $1,790,000 and $2,361,000) 36,509 36,004
Inventories 79,890 78,041
Prepaid expenses and other current assets 7,269 6,173
Total current assets 137,719 137,422
Property, plant and equipment, at cost:
Land 1,764 1,775
Buildings (less accumulated depreciation of
$15,855,000 and $16,496,000) 25,301 25,131
Machinery and equipment (less accumulated
depreciation of $54,613,000 and $53,148,000) 48,618 46,948
Total property, plant and equipment 75,683 73,854
Cost in excess of net assets acquired (less accumu-
lated amortization of $4,534,000 and $4,266,000) 6,667 7,094
Prepaid pension cost 29,238 26,212
Other assets 1,111 1,146
$250,418 $245,728
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and current maturities $ 6,690 $ 3,600
Accounts payable and accrued expenses 16,315 13,783
Accrued salaries and wages 5,590 6,026
Taxes payable 285 484
Employee deposits for stock purchase plan 518 429
Total current liabilities 29,398 24,322
Deferred income taxes 13,969 11,919
Long-term debt 3,000 3,300
Accumulated postretirement benefit obligation 16,029 16,151
Stockholders' equity:
Class A common stock $1 par (20,000,000 shrs. auth.;
4,978,276 outstanding in 2000, excluding
1,461,002 held in treasury; 5,109,173 outstanding
in 1999, excluding 1,243,158 held in treasury) 4,978 5,109
Class B Common Stock $1 par (10,000,000 shrs. auth.;
1,495,474 outstanding in 2000, excluding
308,284 held in treasury; 1,596,748 outstanding
in 1999, excluding 288,642 held in treasury) 1,495 1,597
Additional paid-in capital 43,273 42,730
Retained earnings reinvested and employed in
the business 155,846 155,349
Accumulated other comprehensive income (17,570) (14,749)
Total stockholders' equity 188,022 190,036
$250,418 $245,728
See Notes to Consolidated Financial Statements
THE L.S. STARRETT COMPANY
Consolidated Statements of Stockholders' Equity
For the years ended in June, 1998 through 2000
(in thousands)
Common Addi- Accumulated
Stock Out- tional Other Com-
standing Paid-in Retained prehensive
($1 Par) Capital Earnings Income Total
Balance, June 28, 1997 $ 6,944 $ 38,730 $137,788 $ (2,997) $180,465
Comprehensive income:
Net earnings 23,009 23,009
Unrealized net gain
on investments 138 138
Translation loss, net (1,324) (1,324)
Total comprehensive income 21,823
Dividends ($0.77) (5,298) (5,298)
Treasury shares:
Purchased (152) (952) (4,182) (5,286)
Issued 88 3,144 3,232
Options exercised 17 341 358
Balance, June 27, 1998 6,897 41,263 151,317 (4,183) 195,294
Comprehensive income:
Net earnings 16,696 16,696
Unrealized net loss
on investments (123) (123)
Translation loss, net (10,443) (10,443)
Total comprehensive income 6,130
Dividends ($0.80) (5,298) (5,462)
Treasury shares:
Purchased (329) (2,363) (7,202) (9,894)
Issued 118 3,368 3,486
Options exercised 20 462 482
Balance, June 26, 1999 6,706 42,730 155,349 (14,749) 190,036
Comprehensive income:
Net earnings 11,489 11,489
Unrealized net loss
on investments (113) (113)
Translation loss, net (2,708) (2,708)
Total comprehensive income 8,668
Dividends ($0.80) (5,302) (5,302)
Treasury shares:
Purchased (399) (2,956) (5,690) (9,045)
Issued 161 3,400 3,561
Options exercised 5 99 104
Balance, June 24, 2000 $ 6,473 $ 43,273 $155,846 $(17,570) $188,022
See Notes to Consolidated Financial Statements
THE L. S. STARRETT COMPANY
Notes to Consolidated Financial Statements
SIGNIFICANT ACCOUNTING POLICIES
Principles of consolidation: The consolidated financial statements include
the accounts of The L. S. Starrett Company and subsidiaries, a manu-
facturer of industrial, professional and consumer products. All
subsidiaries are wholly-owned and all significant intercompany items have
been eliminated. The Company's fiscal year ends on the last Saturday in
June. The fiscal years of the Company's foreign subsidiaries end in May.
Financial instruments and derivatives: The Company's financial instruments
consist primarily of current assets, except inventory, current
liabilities, and long-term debt. Current assets and liabilities, except
investments, are stated at cost, which approximates fair market value.
Long-term debts, which are at current market interest rates, also
approximate fair market value. In June 1998 the Financial Accounting
Standards Board (FASB) issued Statement of Financial Accounting Standards
(SFAS) No. 133, "Accounting for Derivative Instruments and Hedging
Activities." SFAS No. 133 provides guidance for accounting for all
derivative instruments, as defined. This standard requires all derivatives
and any hedging assets or liabilities to be accounted for at fair value
and will be effective June 25, 2000. The effect of adopting SFAS No. 133
will not be significant.
Investments: Investments consist primarily of marketable securities, including
treasury bills, certificates of deposit and municipal securities. The
Company considers all its investments "available for sale." As such, these
investments are carried at market, which approximates cost, with unrealized
temporary gains and losses recorded as a component of stockholders' equity.
Included in investments at June 24, 2000 is $6.6 million of liquid AAA
rated Puerto Rico debt obligations. These investments were made for the
purpose of reducing repatriation taxes and have maturities of up to ten
years. Most other investments have maturities of less than one year.
Long-lived assets: Buildings and equipment are depreciated using straight-line
and accelerated methods over estimated useful lives as follows: buildings
15 to 50 years, building improvements 10 to 40 years, machinery and
equipment 5 to 12 years, motor vehicles 3 to 5 years, computer hardware and
software 3 to 7 years. Costs in excess of net assets acquired are being
amortized on a straight-line basis over 5 to 40 years.
Inventories: Inventories are stated at the lower of cost or market. For
approximately 70% of all inventories, cost is determined on a last-in,
first-out (LIFO) basis. For all other inventories, cost is determined on a
first-in, first-out (FIFO) basis. LIFO inventories are $46,584,000 and
$47,858,000 at the end of 2000 and 1999, respectively, such amounts being
$22,683,000 and $23,521,000 less than if determined on a FIFO basis. Total
inventories at year end are as follows (in thousands):
Goods in Pro-
cess and Raw Materials
Finished Goods Finished Parts and Supplies Total
2000 $36,121 $26,752 $17,017 $79,890
1999 31,964 31,589 14,488 78,041
Income taxes: Deferred tax expense results from differences in the timing of
certain transactions for financial reporting and tax purposes. Deferred
taxes have not been recorded on undistributed earnings of foreign
subsidiaries (approximately $40,000,000 at June 2000) or the related
unrealized translation adjustments because such amounts are considered
permanently invested and, if remitted, the resulting taxes would be offset
by foreign tax credits.
Research and development: Research and development costs were expensed as
follows: $3,111,000 in 2000, $2,860,000 in 1999 and $3,406,000 in 1998.
Earnings per share (EPS): Basic EPS excludes dilution and is computed by
dividing earnings available to common shareholders by the weighted average
number of common shares outstanding for the period. Diluted EPS reflects
the potential dilution by securities that could share in the earnings. The
Company had 7,777, 6,123 and 14,096 of additional potential common shares
in 2000, 1999 and 1998 resulting from shares issuable under its stock
option plan.
Translation of foreign currencies: Assets and liabilities are translated at
exchange rates in effect on reporting dates, and income and expenses are
translated at rates in effect on transaction dates. The resulting
differences due to changing exchange rates are charged or credited directly
to the "accumulated other comprehensive income" account included as part
of stockholders' equity. Prior to January 1, 1998, the translation method
used by the Company's subsidiary in Brazil, which until then had been
considered a hyperinflationary country, was the same except that inventories
and plant and the related charges to cost of sales and depreciation expense
were translated at rates in effect at the time the assets were purchased,
and the resulting translation gains and losses were included in the
determination of net earnings.
Use of accounting estimates: The preparation of the financial statements in
conformity with accounting principles generally accepted in the U.S.
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of sales and expenses during the
reporting period. Amounts ultimately realized could differ from those
estimates.
OTHER INCOME AND EXPENSE
Other income and expense consists of the following (in thousands):
2000 1999 1998
Interest income, net $ 660 $ 1,366 $ 1,927
Realized and unrealized translation gains
and (losses) (101) 112 (339)
Other (63) 140 218
$ 496 $ 1,618 $ 1,806
INCOME TAXES
The provision for income taxes consists of the following (in thousands):
2000 1999 1998
Current:
Federal $ 1,581 $ 2,851 $ 5,780
Foreign 1,582 1,337 2,454
State 469 684 934
Deferred 2,108 2,058 1,945
$ 5,740 $ 6,930 $11,113
Pretax domestic income as reportable to the IRS was $10,126,000, $22,840,000
and $26,289,000 in 2000, 1999 and 1998, respectively.
A reconciliation of expected tax expense at the U.S. statutory rate to actual
tax expense is as follows (in thousands):
2000 1999 1998
Expected tax expense $ 6,030 $ 8,269 $11,943
Increase (decrease) from:
State and Puerto Rico taxes, net
of federal benefit (210) (32) 108
Foreign taxes, net of federal credits (247) (1,161) (604)
Nontaxable investment income (43) (111) (120)
Other 210 (35) (214)
Actual tax expense $ 5,740 $ 6,930 $11,113
Deferred income taxes at year end are attributable to the following (in
thousands):
2000 1999
Deferred assets:
Retiree medical benefits $(6,587) $(6,595)
Inventories (1,286) (1,242)
Other (1,351) (1,247)
(9,224) (9,084)
Deferred liabilities:
Prepaid pension 11,953 10,778
Other employee benefits 547 251
Depreciation 7,614 6,846
Other 990 892
21,104 18,767
Current portion 2,089 2,236
Long-term portion $13,969 $11,919
EMPLOYEE BENEFIT PLANS
The Company has several pension plans, both defined benefit and defined
contribution, covering all of its domestic and approximately half of its
nondomestic employees. In addition, certain domestic employees participate in
an Employee Stock Ownership Plan (ESOP). Ninety percent of the actuarially
determined annuity value of their ESOP shares is used to offset retirement
benefits otherwise due under the domestic noncontributory defined benefit
pension plan. The total cost (benefit) of all such plans for 2000, 1999 and
1998, considering the combined projected benefits and funds of the ESOP as
well as the other plans, was $(1,608,000), $(2,567,000) and $(1,588,000),
respectively.
Under both domestic and foreign defined benefit plans, benefits are based on
years of service and final average earnings. Plan assets, including those of
the ESOP, consist primarily of investment grade debt obligations, marketable
equity securities and approximately 1,000,000 shares of the Company's common
stock. The status of these defined benefit plans, including the ESOP, is as
follows (in thousands):
2000 1999 1998
Change in benefit obligation:
Benefit obligation at beginning of year $ 88,088 $ 87,242 $ 80,929
Service cost 3,263 2,672 2,389
Interest cost 6,172 6,185 5,771
Participant contributions 247 286 239
Plan amendments 481
Exchange rate changes (1,016) (826) (91)
Benefits paid (3,315) (3,048) (2,901)
Actuarial (gain) or loss (5,546) (4,904) 906
Benefit obligation at end of year $ 87,893 $ 88,088 $ 87,242
Change in plan assets:
Fair value of plan assets at beginning
of year $137,578 $148,861 $129,292
Actual return on plan assets (12,557) (7,549) 22,364
Participant contributions 247 286 239
Benefits paid (3,315) (3,048) (2,901)
Exchange rate changes (1,092) (972) (133)
Fair value of plan assets at end of year $120,861 $137,578 $148,861
Reconciliation of funded status:
Funded status $ 32,968 $ 49,490 $ 61,619
Unrecognized actuarial gain (3,858) (22,861) (38,143)
Unrecognized transition asset (4,818) (5,774) (6,737)
Unrecognized prior service cost 4,946 5,357 5,296
Prepaid benefit $ 29,238 $ 26,212 $ 22,035
Components of net periodic benefit cost:
Service cost $ 3,263 $ 2,672 $ 2,389
Interest cost 6,172 6,185 5,771
Expected return on plan assets (11,432) (11,241) (9,694)
Amortization of prior service cost 409 414 376
Amortization of transition asset (956) (963) (964)
Recognized actuarial gain (352) (1,250) (977)
Net periodic benefit cost $ (2,896) $ (4,183) $ (3,099)
Weighted average assumptions:
Discount rate 7.75% 7.0% 7.0%
Expected long-term rate of return 8.50% 8.5% 7.5%
Rate of compensation increase 4.50% 5.0% 5.0%
The Company provides certain medical and life insurance benefits for most
retired employees in the United States. The status of these plans at year end
is as follows (in thousands):
2000 1999 1998
Change in benefit obligation:
Benefit obligation at beginning of year $ 13,668 $ 17,707 $ 16,269
Service cost 457 427 498
Interest cost 914 911 1,170
Plan amendments (4,732)
Benefits paid (1,170) (1,135) (1,129)
Actuarial (gain) or loss 1,232 490 899
Benefit obligation at end of year $ 15,101 $ 13,668 $ 17,707
Reconciliation of funded status:
Funded status $ 15,101 $ 13,668 $ 17,707
Unrecognized actuarial loss (3,098) (1,896) (1,439)
Unrecognized prior service cost 4,026 4,379
Accrued benefit $ 16,029 $ 16,151 $ 16,268
Components of net periodic benefit cost:
Service cost $ 457 $ 427 $ 498
Interest cost 914 911 1,170
Amortization of prior service cost (353) (353)
Recognized actuarial gain 30 32
Net periodic benefit cost $ 1,048 $ 1,017 $ 1,668
Weighted average assumptions:
Discount rate 7.75% 7.0% 7.0%
Rate of compensation increase 4.50% 5.0% 5.0%
For measurement purposes, an 8.0% annual rate of increase in the per capita
cost of covered health care benefits was assumed for 2000. The rate was
assumed to decrease gradually to 5.0% for 2005 and remain at that level
thereafter.
Assumed health care cost trend rates have a significant effect on the amounts
reported for the health care plans. A one percentage point change in assumed
health care cost trend rates would have the following effects:
1% 1%
Increase Decrease
Effect on total of service and interest cost $ 109 $ (92)
Effect on postretirement benefit obligation 785 (673)
DEBT
At year end, long-term debt consists of the following (in thousands):
2000 1999
Industrial revenue bond $ 300 $ 900
Revolving credit agreement 3,000 3,000
3,300 3,900
Less current maturities 300 600
$ 3,000 $ 3,300
The industrial revenue bond is collateralized by the Company's plant in Mt.
Airy, North Carolina. Principal is payable in semiannual installments of
$300,000. Interest is at 92% of the 90 day CD rate (6.1% at June 24, 2000).
The revolving credit agreement is for $25,000,000 and expires June 13, 2004.
The credit agreement requires commitment fees of .25%. Interest rates vary,
but approximate LIBOR plus .50% (7.3% as of June 24, 2000). All debt
agreements contain financial covenants, the most restrictive of which is that
at June 24, 2000 the Company must have tangible net worth of $161,000,000.
Annual principal payments on debt are required as follows: 2001, $300,000;
2004, $3,000,000. Current notes payable carry interest at a rate of LIBOR
plus 1 - 4%. Interest expense, prior to capitalization of interest on self-
constructed assets was $877,000, $465,000 and $820,000 in 2000, 1999 and
1998.
COMMON STOCK
Class B Common Stock is identical to Class A except that it has 10 votes per
share, is generally nontransferable except to lineal descendants, cannot
receive more dividends than Class A, and can be converted to Class A at any
time. Class A Common Stock is entitled to elect 25% of the directors to be
elected at each meeting with the remaining 75% being elected by Class A and
Class B voting together. In addition, the Company has a stockholder rights
plan, amended and restated in 2000, to protect stockholders from attempts to
acquire the Company on unfavorable terms not approved by the Board of
Directors. Under certain circumstances, the plan entitles each Class A or
Class B share to additional shares of the Company or an acquiring company, as
defined, at a 50% discount to market. Generally, the rights will be
exercisable if a person or group acquires 15% or more of the Company's
outstanding shares. The rights trade together with the underlying common
stock. They can be redeemed by the Company for $.01 per right and expire in
the year 2000.
The Company accounts for stock based compensation under the provisions of
Accounting Principles Board Opinion No. 25. Under the Company's stock
purchase plans, the purchase price of the optioned stock is 85% of the lower
of the market price on the date the option is granted or the date it is
exercised. Options become exercisable exactly two years from the date of
grant and expire if not exercised. Therefore, no options are exercisable at
the end of 2000, 1999, or 1998. A summary of option activity is as follows:
Weighted
Average
Exercise Shares
Shares Price Available
On Option At Grant For Grant
Balance, June 28, 1997 53,334 $22.92 675,518
Options authorized 800,000
Options granted 26,457 32.14 (26,457)
Options exercised ($19.45 and $21.89) (17,507) 20.49
Options canceled (16,484) (670,715)
Balance, June 27, 1998 45,800 27.96 778,346
Options granted 55,474 24.97 (55,474)
Options exercised ($23.17 and ($25.03)(20,369) 23.70
Options canceled (29,102) 25,325
Balance, June 26, 1999 51,803 24.63 748,197
Options granted 69,122 19.56 (69,122)
Options exercised ($20.30 and $17.00) (5,315) 19.50
Options canceled (43,632) 43,632
Balance, June 24, 2000 71,978 $20.26 722,707
At June 24, 2000, a total of 794,685 shares of common stock are reserved for
issuance under the plans. The following information relates to outstanding
options as of June 24, 2000:
Weighted Average Remaining Life 1.5 years
Weighted Average fair value on grant date
of options granted in:
1998 $9.50
1999 7.50
2000 6.00
The fair value of each option grant was estimated on the date of grant using
the Black-Scholes options pricing model with the following weighted average
assumptions: volatility - 16% to 25%, interest - 4.3% to 6.5%, and expected
lives - 2 years. The pro forma, after tax effect of any compensation costs
related to use of SFAS No. 123, "Accounting for Stock Based Compensation,"
is as follows: 2000 $200,000, 1999 $150,000 and 1998 $150,000, or
approximately $.03, $.02, and $.02 per share.
In addition 371,345 shares of common stock are reserved for the Company's
401(k) plan at June 24, 2000. Since inception in 1986, 1,126,964 Class A and
44,155 Class B shares have been issued under this plan.
OPERATING DATA
The Company believes it has no significant concentration of credit risk as
of June 24, 2000. Trade receivables are dispersed among a large number of
retailers, distributors and industrial accounts in many countries. One
customer accounted for approximately 13% of sales in 2000 and 11% in 1999.
The Company is engaged in the single business segment of producing and
marketing industrial, professional and consumer products. It manufactures
over 5,000 items, including precision measuring tools, tape measures, gages
and saw blades. Operating segments are identified as components of an
enterprise about which separate discrete financial information is used by
the chief operating decision maker in how to allocate assets and assess
performance of the Company.
The Company's operations are primarily in North America, Brazil, and the
United Kingdom. Geographic information about the Company's sales and long-
lived assets are as follows:
2000 1999 1998
Sales:
North America $ 172,542 $ 171,176 $ 187,925
United Kingdom 33,064 33,249 35,642
Brazil 41,926 40,104 50,923
Eliminations and other (12,363) (12,144) (12,150)
Total $ 235,169 $ 232,385 $ 262,340
Long-lived assets:
North America $ 95,343 $ 90,379
United Kingdom 8,054 8,433
Brazil 7,028 7,661
Other 2,274 1,833
Total $ 112,699 $ 108,306
QUARTERLY FINANCIAL DATA (UNAUDITED)(in thousands except per share data)
Earnings Basic
Before Earnings
Net Gross Income Net Per
Quarter Ended Sales Profit Taxes Earnings Share
September 1998 $58,364 $17,143 $ 5,761 $ 3,916 $ 0.57
December 1998 60,890 18,695 6,556 4,513 0.65
March 1999 57,073 16,705 5,226 3,586 0.53
June 1999 56,058 18,858 6,083 4,681 0.69
$232,385 $71,401 $23,626 $16,696 $ 2.44
September 1999 $58,412 $16,145 $ 4,317 $ 2,875 $ 0.43
December 1999 61,245 18,195 5,556 3,817 0.57
March 2000 58,860 15,753 3,519 2,451 0.37
June 2000 56,652 16,428 3,837 2,346 0.36
$235,169 $66,521 $17,229 $11,489 $ 1.73
The Company's Class A Common Stock is traded on the New York Stock Exchange.
Item 9 - Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
The Company had no such changes in or disagreements with its independent
auditors.
PART III
Item 10 - Directors and Executive Officers of the Registrant
Directors
The information concerning the Directors of the Registrant is contained on
pages 1 through 5 in the Company's definitive Proxy Statement for the Annual
Meeting of Stockholders to be held on September 20, 2000, and is hereby
incorporated by reference.
Executive Officers of the Registrant
Held Present
Name Age Office Since Position
Douglas R. Starrett 80 1995 Chairman and CEO and
Director
Douglas A. Starrett 48 1995 President and Director
George B. Webber 79 1962 Vice President
Webber Gage Division
and Director
Anthony M. Aspin 47 2000 Vice President Sales
Roger U. Wellington, Jr. 59 1984 Treasurer and Chief
Financial Officer and
Director
Steven A. Wilcox 45 1997 Clerk
Douglas R. Starrett, Douglas A. Starrett (son of Douglas R. Starrett), George
B. Webber and Roger U. Wellington, Jr. have served in the same capacities as
listed above for at least the past five years. Anthony M. Aspin was previously
a divisional sales manager with the Company. Except in the case of Steven
Wilcox, the positions listed above represent their principal occupations and
employment during the last five years. Steven Wilcox, elected clerk in 1997,
has been a partner in Ropes & Gray, counsel for the Company, throughout that
period.
The President, Treasurer and Clerk hold office until the first meeting of the
directors following the next annual meeting of stockholders and until their
respective successors are chosen and qualified, and each other officer holds
office until the first meeting of directors following the next annual meeting
of stockholders, unless a shorter period shall have been specified by the
terms of his election or appointment or, in each case, until he sooner dies,
resigns, is removed or becomes disqualified.
There have been no events under any bankruptcy act, no criminal proceedings
and no judgments or injunctions material to the evaluation of the ability and
integrity of any director or executive officer during the past five years.
Item 11 - Executive Compensation
The information concerning management remuneration is contained on pages 5
through 10 in the Company's definitive Proxy Statement for the Annual Meeting
of Stockholders to be held on September 20, 2000 and, except for the
information under the caption "Compensation Committee Report," is hereby
incorporated by reference.
Item 12 - Security Ownership of Certain Beneficial Owners and
Management
(a) Security ownership of certain beneficial owners:
The information concerning a more than 5% holder of any class of the
Company's voting shares is contained on page 4 of the Company's
definitive Proxy Statement for the Annual Meeting of Stockholders to be
held on September 20, 2000, and is hereby incorporated by reference.
(b) Security ownership of management:
The information concerning the beneficial ownership of each class of
equity securities by all directors, and all directors and officers of
the Company as a group, is contained on pages 2 through 4 of the
Company's definitive Proxy Statement for the Annual Meeting of
Stockholders to be held on September 20, 2000, and is hereby
incorporated by reference.
(c) The Company knows of no arrangements that may, at a subsequent date,
result in a change in control of the Company.
Item 13 - Certain Relationships and Related Transactions
(a) Transactions with management and others: None
(b) Certain business relationships: Not applicable
(c) Indebtedness of management: None
(d) Transactions with promoters: Not applicable
PART IV
Item 14 - Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
(a) 1. Financial statements filed in item 8 of this annual report:
Consolidated Statements of Earnings and Cash Flows for the
Three Years in the Period ended June 24, 2000
Consolidated Balance Sheets at June 24, 2000 and June 26, 1999
Consolidated Statements of Stockholders' Equity for the Three
Years in the Period Ended June 24, 2000
Notes to Consolidated Financial Statements
2. All other financial statements and schedules are omitted because
they are inapplicable, not required under the instructions, or the
information is reflected in the financial statements or notes
thereto.
3. See Exhibit Index below.
(b) The Company filed a report on Form 8-K with the Securities and
Exchange Commission on May 23, 2000, which is incorporated herein
by reference (see exhibit 4b).
(c) See Exhibit Index below.
(d) Not applicable.
THE L.S. STARRETT COMPANY AND SUBSIDIARIES - EXHIBIT INDEX
(3i) Restated Articles of Organization dated December 20, 1989, filed
with Form 10-Q for the quarter ended December 23, 1989, are hereby
incorporated by reference.
(3ii) Bylaws as amended September 16, 1999, filed with Form 10-Q for the
quarter ended September 24, 1999, are hereby incorporated by
reference.
(4a) Loan Agreement and related documents, relative to $7,500,000
Industrial Revenue Bond financing dated as of September 1, 1985,
between The Surry County Industrial Facilities and Pollution
Control Financing Authority and The L.S. Starrett Company will be
furnished to the Commission upon request.
(4b) Common Stock Rights Agreement, dated as of May 23, 2000, between
the Company and Fleet National Bank, as Rights Agent, including
Form of Common Stock Purchase Rights Certificate, filed on May 23,
2000 with the Company's Form 8-A, is hereby incorporated by
reference.
(10a) $25,000,000 Revolving Credit Agreement dated as of June 13, 2000,
among The L.S. Starrett Company and Fleet National Bank submitted
herewith.
(21) Subsidiaries of the Registrant. See page 24.
(23) Independent Auditors' Consent. See page 25.
(27) Financial Data Schedule submitted herewith.
Exhibit 21
THE L.S. STARRETT COMPANY AND SUBSIDIARIES
SUBSIDIARIES OF THE REGISTRANT
JUNE 24, 2000
The parent company, The L.S. Starrett Company, incorporated in Massachusetts,
has the following subsidiaries, all of which are wholly owned:
Fiscal
Year End
Starrett Securities Corporation Incorporated in Last Sat
Massachusetts in June
Evans Rule Company, Inc. Incorporated in Last Sat.
New Jersey in June
The L.S. Starrett Co. of Canada Incorporated in Last Sat.
Limited Canada in June
The L.S. Starrett International Incorporated in Last Sat.
Company Barbados in June
The L.S. Starrett Company Incorporated in May 31
Limited Scotland
Starrett Industria e Incorporated in May 31
Comercio Ltda. Brazil
Level Industries, Inc. Incorporated in Last Sat.
Massachusetts in June
Starrett Tools (Suzhou) Co., Ltd. Incorporated in Dec. 31
China
The L.S. Starrett Company of Incorporated in June 30
Australia Pty. Ltd. Australia
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
The L.S. Starrett Company
We consent to the incorporation by reference in the Registration Statements
No. 33-55623, No. 333-12997 and No. 333-89965 of The L.S. Starrett Company,
all on Form S-8, of our report dated July 28, 2000, appearing in the Annual
Report on Form 10-K of The L.S. Starrett Company for the year ended June 24,
2000.
S/DELOITTE & TOUCHE LLP
Boston, Massachusetts
September 13, 2000
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.
THE L.S. STARRETT COMPANY
(Registrant)
By S/ROGER U. WELLINGTON, JR.
Roger U. Wellington, Jr.,
Treasurer and Chief Financial Officer
Date: September 13, 2000
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 date indicated:
S/DOUGLAS R. STARRETT S/DOUGLAS A. STARRETT
Douglas R. Starrett, Sept. 13, 2000 Douglas A. Starrett, Sept. 13, 2000
Chairman and CEO and Director President and Director
S/ANDREW B. SIDES, JR. S/WILLIAM S. HURLEY
Andrew B. Sides, Jr., Sept. 13, 2000 William S. Hurley, Sept. 13, 2000
Director Director
S/RICHARD B. KENNEDY S/GEORGE B. WEBBER
Richard B. Kennedy, Sept. 13, 2000 George B. Webber, Sept. 13, 2000
Director Vice President Webber Gage Division
and Director
S/STEVEN G. THOMSON S/ROGER U. WELLINGTON, JR.
Steven G. Thomson, Sept. 13, 2000 Roger U. Wellington,Jr.,Sept.13, 2000
Chief Accounting Officer Treasurer and Chief Financial Officer
and Director