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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 December 31, 1996
----------------
Commission File Number 1-8036
---------
THE WEST COMPANY, INCORPORATED
--------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-1210010
------------------------------------ -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
101 Gordon Drive, PO Box 645, Lionville, 19341-0645
--------------------------------------------- ----------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 610-594-2900
--------------
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
-----------------------------------------------------------------
Common Stock, par value New York Stock Exchange
$.25 per share
Securities registered pursuant to Section 12(g) of the Act:
None
----
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X . No .
--- ---
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K 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
----
As of March 18, 1997, the Registrant had 16,425,183 shares of its
Common Stock outstanding. The market value of Common Stock held
by non-affiliates of the Registrant as of that date was $445,533,089.
Exhibit Index appears on pages F-1, F-2, F-3, and F-4.
DOCUMENTS INCORPORATED BY REFERENCE
------------------------------------
Documents incorporated by reference: 1) portions of the
Registrant's Annual Report to Shareholders for the Company's 1996
fiscal year (the "1996 Annual Report to Shareholders") are
incorporated by reference in Parts I and II; and (2) portions of
the Registrant's definitive Proxy Statement (the "Proxy
Statement") are incorporated by reference in Part III.
2
PART I
Item l. Business
--------
The Company
-----------
The West Company, Incorporated is engaged in one industry segment
- products and services for packaging and delivery of healthcare
and consumer products. The Company's products include
pharmaceutical packaging components (stoppers, seals, caps,
containers and dropper bulbs) and components for medical devices
(parts for syringes and components for blood sampling and analysis
devices and for intravenous administration sets) and packaging
components for consumer products. The Company also provides
contract packaging and contract manufacturing services for the
pharmaceutical and consumer products markets in the United States
and Puerto Rico.
The Company was incorporated in 1923. The executive offices of
the Company are located at 101 Gordon Drive, PO Box 645,
Lionville, Pennsylvania 19341-0645, approximately 35 miles from
Philadelphia. The telephone number at the Company's executive
offices is 610-594-2900. As used herein, the term "Company"
includes The West Company, Incorporated and its consolidated
subsidiaries, unless the context otherwise indicates.
Principal Products -Pharmaceutical Packaging Components
--------------------------------------------------------
The Company manufactures a broad line of pharmaceutical stoppers
from natural rubber and a variety of synthetic elastomers.
Several hundred proprietary formulations of these substances are
molded into a range of stopper sizes used in packaging serums,
vaccines, antibiotics, anesthetics, intravenous solutions and
other drugs. Most stopper formulations are specially designed
to be compatible with drugs so that the drugs will remain effective
and unchanged during storage. The Company's rubber laboratories not
only develop formulations, but also conduct preliminary
compatibility tests on customers' new drugs, and in the United
States, file formulation information with the Food and Drug
Administration to assist its customers' new drug applications.
A broad line of aluminum seals which securely hold the stoppers
on glass or plastic containers is manufactured by the Company.
Aluminum seals include closures with tamper-evident tabs or plastic
FlipOffR buttons which must be removed before the drug can be
withdrawn. The Company also makes a wide variety of seals lined
with its specially formulated elastomeric discs.
3
The majority of the pharmaceutical-packaging components
currently manufactured by the Company are used in packaging
injectable drugs, including syringe parts used by pharmaceutical
manufacturers to package their drugs in pre-filled unit-dose
disposable syringes.
Products used in the packaging of non-injectable drugs include
rubber dropper bulbs, plastic contraceptive drug packages and
child-resistant and tamper-evident plastic closures. The Company
also manufactures and markets a range of Counter Cap products.
These devices are child resistant plastic caps that advance, or
count, everytime a bottle of oral medication is opened or closed,
thereby promoting compliance with medication instructions. In
addition, the Company manufactures injection blow-molded plastic
bottles and containers for the pharmaceutical industry and
consumer products industry.
In January 1994, the Company acquired Senetics, Inc., a Boulder
Colorado company specializing in development of innovative
closure and delivery systems for the oral and inhalation drug
delivery markets. The purchase price of the acquisition was $3
million. Additional amounts are due based on license fees or
royalty income and/or direct sales of the product until January
5, 1999.
The Company's German holding company, The West Company GmbH,
acquired Schubert Seals A/S, a Danish manufacturer of rubber
components and metal seals servicing the European pharmaceutical
industry. A 51% ownership interest was acquired in May 1994 and
the remaining 49% in December 1995. The company's name was
changed in 1996 to The West Company Danmark A/S. The purchase
price totaled DK 71 million ($12 million at exchange rates at the
dates of the acquisitions).
Principal Products - Components for Medical Devices
----------------------------------------------------
The Company manufactures rubber and plastic components for empty
disposable syringes. Typical components include plungers, hubs
and needle covers which are assembled into finished empty
disposable syringes by the Company's customers.
Blood-sampling system components manufactured by the Company
include vacuum tube stoppers and needle valves. The Company also
makes a number of specialized rubber and plastic components for
blood analyzing systems.
Also included in this category are Company-manufactured and
Company-purchased components assembled into drug-transfer
devices.
The Company also manufactures and sells disposable infant nursers
and individual nurser components to infant formula manufacturers.
4
Principal Products
Packaging Components for the Consumer Products Industries
------------------------------------------------------------
The Company manufactures a wide range of plastic threaded
closures for the personal-care industry, mainly for cosmetics and
toiletries. The Company offers many different standard threaded
closure designs in a wide range of sizes and colors, in addition
to closures designed for specific customers and specialty
packaging. The Company also manufactures custom and stock
plastic containers for personal-care products.
The Company manufactures a variety of custom-designed and/or
proprietary plastic closures, some of which are tamper evident,
for food and beverage processors.
Principal Services
Contract Packaging and Contract Manufacturing
--------------------------------------------------
In April 1995, the Company purchased Paco Pharmaceutical
Services, Inc. ("Paco") for $52.4 million. Paco, with facilities
in Lakewood, New Jersey and Canovanas, Puerto Rico, provides
contract manufacturing and contract packaging services to
pharmaceutical and personal-care consumer companies.
Paco's contract-manufacturing services capabilities cover
liquids, creams, ointments, powders and semi-solids. These
manufacturing capabilities are offered to pharmaceutical,
personal health care and consumer products companies which supply
the product formula and specifications and the majority of the
necessary raw materials. Typical products manufactured by Paco
are headache and cold medications, hair care products, lotions,
oral hygiene products and deodorants. These manufactured
products are packaged by Paco in bottles, pouches or tubes
depending on the nature of the product and customer requirements.
Paco also manufactures sterile ophthalmic products for major
ophthalmic companies and contract manufactures metaproterenol and
albuterol, products used for inhalation therapy.
Paco's contract-packaging services include the design, assembly
and filling of a broad variety of packages, including blister
packages (a plastic bubble with a foil backing), bottles, tubes,
laminated and other flexible pouches or strip packages, aluminum
and plastic liquid cup containers, paperboard specialty packages
and innovative tamper-evident and child-resistant packages. The
type of package depends on the requirements of the customer.
Blister packaging or bottles typically are used for tablets and
capsules while aluminum or plastic cups, pouches, bottles and
tubes are used for liquids, creams, ointments and powder. The
products to be inserted in the package are supplied by the
customer in bulk. They are inserted in the package of choice,
labeled, boxed and shipped back to the customer.
5
Principal Services
Development of Novel Drug Delivery Systems
---------------------------------------------------------
In 1993, the Company began pursuing a strategy to develop drug-
delivery systems for bio-pharmaceuticals and other drugs that are
difficult to administer effectively through traditional intravenous
or oral routes. Improving the therapeutic performance of these
drugs in an economical fashion calls for sophisticated technical
solutions. To advance the Company's efforts in this area, the
Company has acquired 30% of DanBioSyst UK Ltd. (DBS), with an
option to acquire the remaining ownership interests within the
next few years. DBS is a research company located in Nottingham,
England, specializing in delivery systems for such drugs. In
partnership with biopharmaceutical and other drug companies, DBS
works to link its delivery system technology to improve or manage
the absorption rate of hard-to-deliver drugs or to assist in
delivering these drugs to a specific site in the body.
The Company also has an internal group focused on novel drug
delivery systems. The Company's efforts are currently focused on
the Ocufit SR system, a cylindrical rod molded from a variety of
silicone elastomer polymers and small enough to fit into the fold
between the eye and the eyelid. The Ocufit can be designed to
release a number of different drugs in predefined quantities over
time periods ranging from two weeks to several months without
physical intervention. The Ocufit SR is being jointly developed
with Escalon Medical Corporation, which owns the basic
technology. The Company is also developing other delivery
systems based on DBS patented technology.
Order Backlog
--------------
Product orders on hand at December 31, 1996 were approximately
$94 million, compared with approximately $108 million at the end
of 1995. Orders on hand include those placed by customers for
manufacture over a period of time according to a customer's
schedule or upon confirmation by the customer. Orders are
generally considered firm when goods are manufactured or orders
are confirmed. The Company also has contractual arrangements
with a number of its customers, and products covered by these
contracts are included in the Company's backlog only as orders
are received from those customers.
Paco's twelve-month backlog of unfilled customer orders was
approximately $24 million at December 31, 1996 compared with $20
million at December 31, 1995. Backlog is defined at Paco as
orders written and included in production schedules during the
next 12 months. Such orders generally may be cancelled by the
customer without penalty.
6
Raw Materials
--------------
The Company uses three basic raw materials in the manufacture of
its products: rubber; aluminum; and plastic. Approximately 50%
of the total rubber used by the Company is natural rubber from
Sri Lanka, Cameroon, Vietnam, and Malaysia. Plastic resins and
aluminum are purchased as needed from several sources. The
Company has been receiving adequate supplies of raw materials to
meet its production needs, and it foresees no significant
availability problems in the near future. However, the political
stability and seasonal weather conditions of countries that
supply natural rubber may be significant factors in the
continuing supply of this commodity. Synthetic elastomers and
plastics currently purchased by the Company are made from
petroleum derivatives. A significant portion of the world supply
of petroleum feedstocks is concentrated in specific geographic
areas, and the availability and cost of these feedstocks are
dependent on the political stability of these areas. Also, the
Company is dependent on sole sources of supply with respect to
certain other raw material ingredients in older product
formulations. In the event the supplier discontinues production,
the Company may be required to stockpile these materials until
new formulations are qualified with customers.
The Company is pursuing a supply chain management strategy of
aligning with vertically integrated suppliers that control their
own feed stocks. This will result in reducing the number of raw
materials suppliers. In some cases, the Company will purchase
raw materials from a single source. This strategy is expected to
assure quality, secure supply and lower costs. However, it could
result in risks to the Company's supply lines in the event of a
supplier production problem. These risks will be managed by
selecting suppliers with backup plans and fail-safe mechanisms as
part of their operating standards.
Paco's customers supply the bulk of raw materials as part of
their contractual agreements. Items that Paco purchases for the
accounts of customers include preformed plastic tubes and bottles
and other packaging materials. Paco uses a variety of vendors
and is not dependent on any single source of supply.
Laboratory, Research and Engineering
-------------------------------------
Pharmaceutical packaging components must meet the rigid
specifications set by the pharmaceutical industry relating to the
function of the package, material compatibility and freedom from
chemical and physical contamination. Rubber formulations that
involve contact with injectable pharmaceutical products are
required to pass shelf-life tests extending from six months to
three years. New rubber compounds must be tested to show that
they do not cause precipitation in the customer's product or
affect its potency, sterility, effectiveness, color or clarity.
7
In addition, in the United States the Food and Drug Admin-
istration may review and inspect certain of the Company's
facilities for adequacy of methods and procedures and
qualifications of technical personnel.
The Company maintains its own laboratories for testing raw
materials and finished goods to assure adherence to customer
specifications and to safeguard the quality of its products. The
Company also uses its laboratory facilities for research and
development of new rubber and thermoplastic compounds and for
testing and evaluating new products and materials.
The Company maintains engineering staffs responsible for product
and tooling design and testing and for the design and
construction of processing equipment. In addition, a corporate
product research department develops new packaging and device
concepts for identified market needs.
Research, development and engineering expenditures for the
creation and application of new and improved products and
processes were approximately $11.2 million in 1996 and $12
million in each of the years 1995 and 1994, net of cost
reimbursements by customers. Approximately 120 professional
employees were engaged full time in such activity in 1996.
Employees
----------
As of December 31, 1996, the Company and its subsidiaries had
5,040 full-time equivalent employees.
Patents and Licenses
---------------------
The patents owned by the Company and its subsidiaries have been
valuable in establishing the Company's market share and in the
growth of the Company's business and may continue to be of value
in the future, especially in view of the Company's continuing
development of its own proprietary products. Nevertheless, the
Company does not consider its current business or its earnings to
be materially dependent upon any single patent or patent right.
Although not material at this time, the Company believes its
investment in DBS and its own novel drug delivery development
capabilities will play an increasingly important role in the future.
DBS has a growing portfolio of patented technology, which is
critical to its success because future income will derive from
licensing this technology to its customers.
Major Customers
-----------------
The Company serves major pharmaceutical and hospital
supply/medical device companies, many of which have several
divisions with separate purchasing responsibilities. The Company
also provides contract packaging and contract manufacturing
services for many of the leading manufacturers of personal-care
products. The Company distributes its products primarily through
its own sales force but also uses regional distributors in the
United States and Asia/Pacific.
Becton Dickinson and Company ("B-D") accounted for approximately
11% of the Company's consolidated net sales during the Company's
8
last fiscal year. The principal products sold to B-D are
components made of rubber, metal and plastic used in B-D's
disposable syringes and blood sampling and analysis devices. B-D
has manufactured a portion of its own rubber components for a
number of years. The Company expects to continue as a major B-D
supplier.
Excluding B-D, the next ten largest customers accounted for
approximately 25% of the Company's consolidated net sales in
1996, but no one of these customers accounted for more than 5% of
1996 consolidated net sales.
Competition
------------
The Company competes with several companies, some of which are
larger than the Company, across its major pharmaceutical-
packaging component and medical-device component product lines.
In addition, many companies worldwide compete with the Company
for business related to specific product lines. However,
although there are no industry statistics available, the Company
believes that it supplies a major portion of the domestic
industry requirements for pharmaceutical rubber and metal
packaging components, and has a significant share of the European
market for these components. Because of the special nature of
these products, competition is based primarily on product design
and performance, although total cost is becoming more important
as healthcare markets worldwide face increasing government
controls and pressure to control overall costs.
The Company is one of the leading domestic producers of threaded
plastic closures, although there are numerous competitors in the
field of plastics.
In addition, some of the Company's customers also manufacture a
portion of their own plastic and rubber packaging components.
The contract packaging and manufacturing service industry is
highly competitive. The Company believes that its contract
packaging services subsidiary, Paco, competes with three
significant companies, only one of which is larger than Paco.
For contract manufacturing services, Paco competes with four
major competitors and several smaller regional companies; several
of these competitors are larger than Paco. In addition most
domestic pharmaceutical companies maintain in-house manufacturing
and packaging capabilities and at times will offer their excess
capability to manufacture or package other companies' products on
a contract basis. However, most large pharmaceutical and
personal healthcare companies have traditionally made extensive
use of contract packagers and manufacturers during times of peak
demand, during the introduction of a new product and for
production of samples and special product promotions.
Government Regulations and Environmental Matters
---------------------------------------------------
9
The Company does not believe that it will have any material
expenditures relating to environmental matters other than those
discussed in the Note "Commitments and Contingencies" of Notes to
Consolidated Financial Statements of the 1996 Annual Report to
Shareholders, incorporated by reference herein, as contained in
Exhibit 13.
Paco's contract packaging and manufacturing processes and
services are subject to the Good Manufacturing Practice standards
applicable to the pharmaceutical industry. The Company's
packaging and manufacturing services are subject to the Federal,
Food, Drug and Cosmetic Act, the Comprehensive Drug Abuse
Prevention and Control Act of 1970 and various rules and
regulations of the Bureau of Alcohol, Tobacco and Firearms of the
United States Department of Treasury, the Bureau of Narcotics of
the United States Department of Justice, the Drug Enforcement
Agency and state narcotic regulatory agencies. Paco is regularly
subjected to testing and inspection of its products and
facilities by representatives of various Federal agencies.
In addition, the Company comes under the regulation of various
state and municipal health agencies in jurisdictions where the
Company has facilities.
International
---------------
The Note "Affiliated Companies" and the Note "Industry Segment
and Operations by Geographic Area" of Notes to Consolidated
Financial Statements of the 1996 Annual Report to Shareholders
are incorporated herein by reference, as contained in Exhibit 13.
The Company believes that its international business does not
involve a substantially greater business risk than its domestic
business.
The Company's financial condition and results are impacted by
fluctuations in exchange rate markets (See Notes "Summary of
Significant Accounting Policies - "Foreign Currency" and "Other
Income (Expense)" of Notes to Consolidated Financial Statements
of the 1996 Annual Report to Shareholders, incorporated herein by
reference, as contained in Exhibit 13). Hedging by the Company
of these exposures is discussed in the Note "Debt" and in the
Note "Fair Value of Financial Instruments" of Notes to
Consolidated Financial Statements of the 1996 Annual Report to
Shareholders, incorporated herein by reference, as contained in
Exhibit 13.
10
Item 2. Properties
-----------
The Company maintains twelve manufacturing plants and two mold
and die production facilities in the United States, two
manufacturing plant in Puerto Rico, and a total of eight
manufacturing plants and one mold and die production facility in
Germany, England, France, Denmark, Brazil and Singapore.
The Company's executive offices, U.S. research and development
center and pilot plant are located in a leased facility at
Lionville, Pennsylvania, about 35 miles from Philadelphia. All
other Company facilities are used for manufacturing and
distribution, and facilities in Eschweiler, Germany are also used
for research and development activities.
The manufacturing facilities of the Company are well-maintained,
are operating generally on a two or three-shift basis and are
adequate for the Company's present needs.
The principal facilities in the United States and Puerto Rico are
as follows:
- Approximately 839,000 square feet of owned and 996,000
square feet of leased space in Pennsylvania, New Jersey,
Florida, Nebraska, North Carolina and Puerto Rico.
The principal international facilities are as follows:
- Approximately 481,000 square feet of owned space and 15,000
square feet of leased space in Germany, England, Denmark and
France.
- Approximately 69,000 square feet of owned space in Brazil.
- Approximately 92,000 square feet of owned space in Singapore.
Of the aforementioned currently owned facilities, approximately
277,000 square feet are subject to mortgages to secure the
Company's real estate mortgage notes. See the Note "Debt" of
Notes to Consolidated Financial Statements of the 1996 Annual
Report to Shareholders, which information is incorporated herein
by reference, as contained in Exhibit 13.
Sales office facilities in separate locations are leased
under short-term arrangements.
The Company also holds for sale former manufacturing facility
space in the United States - totaling 106,000 square feet; and in
Germany and Argentina totaling 46,000 square feet.
11
Item 3. Legal Proceedings.
-----------------
On March 30, 1992, OCAP Acquisition Corp. ("OCAP") commenced
an action in the Supreme Court of the State of New York,
County of New York, against Paco Pharmaceutical Services,
Inc. ("Paco"), certain of its subsidiaries and R. P. Scherer
Corporation ("Scherer"), Paco's former parent company,
(collectively, the "defendants"), arising out of the
termination of an Asset Purchase Agreement dated February 21,
1992 (the "Purchase Agreement") between OCAP and the
defendants providing for the purchase of substantially all
the assets of Paco. On May 15, 1992, OCAP served an amended
verified complaint (the "Amended Complaint"), asserting
causes of action for breach of contract and breach of the
implied covenant of good faith and fair dealing, arising out
of defendants' March 25, 1992 termination of the Purchase
Agreement, as well as two additional causes of action that
were subsequently dismissed by order of the court. The
Amended Complaint sought $75 million in actual damages, $100
million in punitive damages, as well as OCAP's attorney fees
and other litigation expenses, costs and disbursements
incurred in bringing this action. Scherer asserted a
counterclaim against OCAP for breach of contract and breach
of the covenant of good faith and fair dealing arising out of
the termination of the Purchase Agreement.
This matter went to trial in late March, 1996, and on April
10, 1996, at the close of trial, the court dismissed all of
the plaintiff's claims and all of defendants' counterclaims,
with each side to bear its own costs. Plaintiff has filed
a notice of appeal, and the defendants have filed a cross-
appeal.
Scherer has agreed to indemnify Paco against any liabilities
(including fees and expenses incurred after March 31, 1992)
it may have as a result of this litigation matter. In the
opinion of management, the ultimate outcome of this
litigation will not have a material adverse effect on the
Company's business or financial condition.
12
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None.
Item 4 (a) Executive Officers of the Registrant
-----------------------------------
The executive officers of the Company at March 31, 1997 were as
follows:
Name Age Business Experience During Past Five
Years
---- --- ---------------------------------------
George R. Bennyhoff1 53 Senior Vice President, Human Resources
and Public Affairs.
Jerry E. Dorsey1 52 Executive Vice President and Chief
Operating Officer since June 1994;
previously Group President from August
1993 to June 1994; President, Health
Care Division from May 1992 to July
1993 for the Company; and prior to
joining the Company President and Chief
Executive Officer of Foster Medical, a
medical supply company.
Steven A. Ellers1 46 Corporate Vice President, Sales since
April 1996, previously Vice President,
Operations from June 1994 to March
1996; Vice President Asia/Pacific and
Managing Director, Singapore for the
Company from May 1990 to May 1994.
John R. Gailey III1 42 Vice President since December 1995,
General Counsel since May 1994 and
Secretary since December 1991;
previously Corporate Counsel for the
Company from December 1991 to May 1994.
Stephen M. Heumann1 55 Vice President since May 1994; and
Treasurer since December 1990.
Larry P. Higgins 57 Corporate Vice President, Operations
since May 1996 and prior to joining the
Company an international business
consultant from 1994 to 1996 and Senior
Vice President International Operations
for Revlon, Inc., a cosmetics company,
from 1992 to 1994.
1 Holds position as corporate officer elected by the Board of
Directors for one year term.
13
Name Age Business Experience During Past Five
Years
---- --- ---------------------------------------
William G. Little1 54 Chairman of the Board since May 1995
and Director, President and Chief
Executive Officer since May 1991 for
the Company.
Donald E. Morel, Jr.1 39 Corporate Vice President, Scientific
Services since May 1995; previously
Vice President, Research & Development
from August 1993 to May 1995 and prior
thereto Director Research &
Development, Health Care Products
Division from May 1993 to August 1993
for the Company; and prior to joining
the Company Director Research &
Development for Applied Research
International, a provider of contract
research in materials science.
Anna Mae Papso1 53 Corporate Vice President, Accounting
Services since April 1996; previously
Vice President and Corporate
Controller.
John A. Vigna1 46 Senior Vice President, Finance and
Administration since March 1997; and
prior to joining the Company Executive
Vice President and Chief Operating
Officer for Tseng Labs Inc., supplier
of graphics accelerators and video
products for personal computer systems,
from 1995 to December 1996; Senior Vice
President Operations and Chief
Financial Officer for Polygram Group
Distribution, an audio-video manufacturing
and marketing group, from 1993 to 1995;
and Senior Vice President, U.S. Services
for Unisys Corporation, a computer company,
from 1990 to 1992.
1 Holds position as corporate officer elected by the Board of
Directors for one year term.
14
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
--------------------------------------------------
The Company's common stock is listed on the New York Stock
Exchange and the high and low prices for the stock for each
calendar quarter in 1996 and 1995 were as follows:
First Second Third Fourth
Quarter Quarter Quarter Quarter Year
High Low High Low High Low High Low High Low
1996 24 7/8 22 1/8 30 22 1/4 29 1/4 23 1/2 29 1/4 25 7/8 30 22 1/8
1995 27 1/2 24 3/4 29 25 1/2 30 5/8 28 28 22 5/8 30 5/8 22 5/8
As of December 31, 1996, the Company had 1,172 shareholders of
record. There were also 2,900 holders of shares registered in
nominee names. The Company's Common Stock paid a quarterly
dividend of $.12 per share in each of the first three quarters of
1995; $.13 per share in the fourth quarter of 1995 and each of
the first three quarters of 1996; and $.14 per share in the
fourth quarter of 1996.
Item 6. Selected Financial Data.
-----------------------
Information with respect to the Company's net sales, income
(loss) from consolidated operations, income (loss) before change
in accounting method, income (loss) before change in accounting
method per share and dividends paid per share is incorporated by
reference to the line items corresponding to those categories
under the heading "Ten-Year Summary - Summary of Operations" of
the 1996 Annual Report to Shareholders, as contained in Exhibit
13. Information with respect to total assets and total debt is
incorporated by reference to the line items corresponding to
those categories under the heading "Ten-Year Summary - Year End
Financial Position" of the 1996 Annual Report to Shareholders, as
contained in Exhibit 13.
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
---------------------------------------------------------
The information called for by this Item is incorporated by
reference to the text appearing in the "Financial Review" section
of the 1996 Annual Report to Shareholders, as contained in
Exhibit 13.
Item 8. Financial Statements and Supplementary Data.
-------------------------------------------
The information called for by this Item is incorporated by
reference to "Consolidated Financial Statements", "Notes to the
Consolidated Financial Statements", and "Quarterly Operating and
15
Per Share Data (Unaudited)" of the 1996 Annual Report to
Shareholders, as contained in Exhibit 13.
Item 9. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure.
--------------------------------------------------------
None.
PART III
Item 10. Directors and Executive Officers of the Registrant.
---------------------------------------------------
Information called for by this Item is incorporated by reference
to "ELECTION OF DIRECTORS" in the Proxy Statement.
Information about executive officers of the Company is set forth
in Item 4 (a) of this report.
Item 11. Executive Compensation.
-----------------------
Information called for by this Item is incorporated by reference
to "ELECTION OF DIRECTORS - BOARD OF DIRECTORS; Compensation
of Directors; Board Compensation Committee Report on
Executive Compensation; Compensation of Named Executive
Officers" contained in the Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
---------------------------------------------------
Information called for by this Item is incorporated by reference
to "STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS" and "ELECTION
OF DIRECTORS - Stock Ownership of Directors and Executive
Officers" contained in the Proxy Statement.
Item 13. Certain Relationships and Related Transactions.
-----------------------------------------------
None
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K.
-------------------------------------------------------
16
(a) 1. The following report and consolidated financial
statements, included in the 1996 Annual Report to
Shareholders, have been incorporated herein by
reference, as contained in Exhibit 13:
Consolidated Statements of Income for the years ended
December 31, 1996, 1995 and 1994
Consolidated Balance Sheets at December 31, 1996 and
1995
Consolidated Statements of Shareholders' Equity for
the years ended December 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flows for the years
ended December 31, 1996, 1995 and 1994
Notes to Consolidated Financial Statements
Report of Independent Accountants
(a) 2. Supplementary Financial Information
Schedules are omitted because they are either not
applicable, not required or because the information
required is contained in the consolidated financial
statements or notes thereto.
(a) 3. See Index to Exhibits on pages F-1, F-2, F-3 and
F-4 of this Report.
(b) There were no reports on Form 8-K filed by the
Company in the fourth quarter of 1996.
(c) The exhibits are listed in the Index to Exhibits on
pages F-1, F-2, F-3 and F-4 of this Report.
(d) Financial Statements of affiliates are omitted
because they do not meet the tests of a significant
subsidiary at the 20% level.
17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, The West Company, Incorporated
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
THE WEST COMPANY, INCORPORATED
(Registrant)
By /s/ John Vigna
--------------------------------
John Vigna
Senior Vice President,
Finance and Administration
March 31, 1997
--------------------------------
Date
18
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ------ -------
William G. Little Chairman, Director, March 31, 1997
--------------------------------- President,and Chief
William G. Little* Executive Officer
(Principal Executive Officer)
Tenley E. Albright Director March 31, 1997
-----------------------------------
Tenley E. Albright *
George W. Ebright Director March 31, 1997
------------------------------------
George W. Ebright*
George J. Hauptfuhrer Director March 31, 1997
------------------------------------
George J. Hauptfuhrer*
L. Robert Johnson Director March 31, 1997
------------------------------------
L. Robert Johnson*
William H. Longfield Director March 31, 1997
--------------------------------------
William H. Longfield*
John P. Neafsey Director March 31, 1997
--------------------------------------
John P. Neafsey*
19
Signature Title Date
--------- ------ -------
Anna Mae Papso Corporate Vice President March 31, 1997
-------------------------------------- Accounting Services
Anna Mae Papso
(Principal Accounting Officer)
Monroe E. Trout Director March 31, 1997
---------------------------------------
Monroe E. Trout*
John A. Vigna Senior Vice President, March 31, 1997
--------------------------------------- Finance and Administration
John A. Vigna
Anthony Welters Director March 31, 1997
---------------------------------------
Anthony Welters*
William S. West Director March 31, 1997
----------------------------------------
William S. West*
J. Roffe Wike, II Director March 31, 1997
---------------------------------------
J. Roffe Wike, II*
Geoffrey F. Worden Director March 31, 1997
----------------------------------------
Geoffrey F. Worden*
* By John A. Vigna pursuant to a power of attorney.
20
INDEX TO EXHIBITS
Exhibit Page
Number Number
(3) (a) Restated Articles of Incorporation of the Company,
incorporated by reference to Exhibit (4) to the Company's
Registration Statement on Form S-8 (Registration No.
33-37825).
(3) (b) Bylaws of the Company, as amended and restated December 13,
1994, incorporated by reference to the Company's Annual
Report on Form 10-K for the year ended December 31, 1994
(File No. 1-8036).
(4) (a) Form of stock certificate for common stock incorporated by
reference to Exhibit (3) (b) to the Company's Annual Report
on Form 10-K for the year ended December 31, 1989 (File No.
1-8036).
(4) (b) Flip-In Rights Agreement between the Company and American
Stock Transfer & Trust Company, as Rights Agent, dated as
of January 16, 1990, incorporated by reference to Exhibit 1
to the Company's Form 8-A Registration Statement (File No.
1-8036).
(4) (c) Flip-Over Rights Agreement between the Company and American
Stock Transfer & Trust Company, as Rights Agent, dated as
of January 16, 1990, incorporated by reference to Exhibit 2
to the Company's Form 8-A Registration Statement (File No.
1-8036).
(9) None.
(10) (a) Lease dated as of December 31, 1992 between Lion
Associates, L.P. and the Company, relating to the lease of
the Company's headquarters in Lionville, Pa., incorporated
by reference to the Company's Annual Report on Form 10-K
for the year ended December 31, 1992 (File No. 1-8036).
(10) (b) First Addendum to Lease dated as of May 22, 1995 between
Lion Associates, L.P. and the Company, incorporated by
reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1995 (File No. 1-8036).
(10) (c) Long-Term Incentive Plan, as amended March 2, 1993,
incorporated by reference to the Company's Annual Report on
Form 10-K for the year ended December 31, 1992 (File No. 1-
8036).
(10) (d) Amendments to the Long Term Incentive Plan, dated April 30,
1996, incorporated herein by reference to the Company's
Form 10Q for the quarter ended June 30, 1996 (File No. 1-8036).
F - 1
21
Exhibit Page
Number Number
(10) (e) Executive Incentive Bonus Plan 1997.
(10) (f) Non-Qualified Stock Option Plan for Non-Employee Directors,
incorporated by reference to the Company's Annual Report on
Form 10-K for the year ended December 31, 1992 (File No. 1-
8036).
(10) (g) Amendments to the Non-Qualified Stock Option Plan for Non-
Employee Directors, dated April 30, 1996, incorporated
herein by reference to the Company's Form 10Q for the
quarter ended June 30, 1996.
(10) (h) Form of agreement between the Company and certain of its
executive officers, incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1991 (File No.1-8036).
(10) (i) Schedule of agreements with executive officers.
(10) (j) Supplemental Employees' Retirement Plan, incorporated by
reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1989 (File No. 1-8036).
(10) (k) Amendment No. 1 to Supplemental Employees' Retirement Plan,
incorporated by reference to the Company's Annual Report on
Form 10-K for the year ended December 31, 1995 (File No.
1-8036).
(10) (l) Amendment No. 2 to Supplemental Employees' Retirement Plan,
incorporated by reference to the Company's Quarterly Report
on Form 10-Q for the period ended September 30, 1995 (File
No. 1-8036).
(10) (m) Retirement Plan for Non-Employee Directors of the Company,
as amended November 5, 1991, incorporated by reference to
the Company's Annual Report on Form 10-K for the year ended
December 31, 1991 (File No. 1-8036).
(10) (n) Employment Agreement dated May 20, 1991 between the Company
and William G. Little, incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1991 (File No. 1-8036).
(10) (o) Non-qualified Deferred Compensation Plan for Designated
Executive Officers, incorporated by reference to the
Company's Quarterly Report on Form 10-Q for the period
ended September 30, 1994 (File No. 1-8036).
F - 2
22
Exhibit Page
Number Number
(10) (p) Amendment No. 1 to Non-Qualified Deferred Compensation Plan
for Designated Executive Officers, incorporated by
reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1994 (File No. 1-8036).
(10) (q) Non-qualified Deferred Compensation Plan for Outside
Directors, incorporated by reference to the Company's
Annual Report on Form 10-K for the year ended December 31,
1989 (File No. 1-8036).
10) (r) Agreement and Plan of Merger dated March 24, 1995 among the
Company, Stoudt Acquisition Corp. and Paco Pharmaceutical
Services, Inc. incorporated by reference to the Company's
Schedule 14 D-1, filed with the Commission on March 30,
1995.
(10) (s) Non-qualified Stock Option Agreement dated September 8,
1995 between the Company and William G. Little,
incorporated herein by reference to the Company's Quarterly
Report on Form 10-Q for the period ended September 30, 1995
(File No. 1-8036).
(10) (t) Lease Agreement, dated August 31, 1978, between Paco
Packaging, Inc. and Nineteenth Lakewood Corp., as amended
by Amendment of Lease, dated November 30, 1978, Second
Amendment of Lease, dated August 6, 1979, Third Amendment
of Lease, dated July 24, 1980 and Fourth Amendment of
Lease, dated August 14, 1980, incorporated by reference to
the Exhibits to Paco Pharmaceutical Services, Inc's
Registration Statement on Form S-1, Registration No. 33-
48754, filed with the Commission.
(10) (u) Fifth Amendment of Lease, dated May 13, 1994, to the Lease
Agreement, dated August 31, 1978, between Paco Packaging,
Inc. and Nineteenth Lakewood Corp., incorporated by
reference to the Exhibits to Paco Pharmaceutical Services,
Inc.'s Annual Report on Form 10-K for the year ended March
31, 1994, Commission file number 0-20324.
(10) (v) Lease Agreement, dated December 9, 1977, between Paco
Packaging, Inc. and New Oak Street Corp., as amended by
the Amendment to Lease Agreement, dated August 31, 1978,
Second Amendment of Lease, dated April 8, 1979 and
Third Amendment of Lease, dated November 16, 1983,
incorporated by reference to the Exhibits to Paco
Pharmaceutical Services, Inc.'s Registration Statement
on Form S-1, Registration No. 33- 48754, filed with the
Commission.
F - 3
23
Page
Number Number
(10) (w) Lease Agreement, dated April 7, 1986, between Northlake
Realty Co. Inc. and Paco Packaging, Inc., as amended by
Amendment to Lease, dated July 1, 1986, Second Amendment of
Lease, dated June 15, 1987 between Paco Packaging and C. P.
Lakewood, L. P., Agreement, dated December 29, 1987, and
Lease Modification Agreement, dated December 13, 1989,
incorporated by reference to the Exhibits to Paco
Pharmaceutical Services, Inc.'s Registration Statement on
Form S-1, Registration No. 33-48754, filed with the
Commission.
(10) (x) Collective Bargaining Agreement, dated November 30, 1994,
by and between Paco Pharmaceutical Services, Inc. and
Teamster Local 35 (affiliated with the International
Brotherhood of Teamsters), incorporated by reference to the
Exhibit to Paco Pharmaceutical Services, Inc.'s Quarterly
Report on Form 10-Q for the period ended December 31, 1994,
Commission file number 0-20324.
(10) (y) Indemnification Agreement, dated June 18, 1992, between
Paco Pharmaceutical Services, Inc. and R. P. Scherer
Corporation and R. P. Scherer International Corporation,
incorporated by reference to the Exhibits to Paco
Pharmaceutical Services, Inc.'s Registration Statement on
Form S-1, Registration No. 33-48754, filed with the
Commission.
(10) (z) Severance and Non-Compete Agreement, dated July 8, 1996,
between Lawrence P. Higgins and the Company, incorporated
herein by reference to the Company's Form 10Q for the
quarter ended June 30, 1996 (File No. 1-8036).
(11) Not Applicable.
(12) Not Applicable.
(13) 1996 Annual Report to Shareholders.
(16) Not applicable.
(18) None.
(21) Subsidiaries of the Company.
(22) None.
(23) Consent of Independent Accountants.
(24) Powers of Attorney.
(27) Financial Data Schedules.
(99) None.
24
F - 4