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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number: 1-8120
BAIRNCO CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 13-3057520
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
300 Primera Blvd., Lake Mary, Florida 32746
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (407) 875-2222
Securities registered pursuant to Section 12(b) of the Act:
Name of each Exchange on
Title of each class which registered
Common Stock, par value $.01 per share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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. [ ]
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
On March 16, 2000, the aggregate market value of the Registrant's
voting stock held by non-affiliates was $49,434,113.
On March 16, 2000, there were 7,741,384 shares of Common Stock
outstanding, exclusive of treasury shares or shares held by
subsidiaries of the Registrant.
Parts I, II and IV incorporate information by reference from the
Annual Report to Stockholders for the fiscal year ended December 31,
2000. Part III incorporates information by reference from the Proxy
Statement dated March 14, 2000 in connection with the Registrant's
Annual Meeting of Stockholders to be held on April 21, 2000.
PART I
Item 1. BUSINESS
a. Recent Developments and Description
Bairnco Corporation was incorporated under the laws of the State
of New York on April 9, 1981. Effective September 24, 1991, Bairnco
Corporation changed its state of incorporation from New York to
Delaware. Unless otherwise indicated herein, the terms "Bairnco" and
the "Corporation" refer to Bairnco Corporation and its subsidiaries.
Bairnco's two core businesses are Arlon's Engineered Materials
and Components, and Kasco's Replacement Products and Services. In
February of 2000 Bairnco purchased certain assets of the materials
business ("Signtech") of Signtech USA, Ltd., a manufacturer of
laminated vinyl fabrics designated for use in the commercial graphics
market. Signtech's product lines complement Arlon's current vinyl
product lines, and will provide product line extensions, additional
brand recognition, product development synergies, and penetration into
new customer segments and markets.
At December 31, 1999, Bairnco employed 820 persons including 14
headquarters personnel. Bairnco's operations occupy approximately
605,000 square feet of factory and office space at its principal
locations. There is an additional 53,000 square feet of leased space
used as field warehouses throughout North America.
b. & c. Financial Information About Industry Segments
and Narrative Description of Business
Bairnco Corporation is a diversified multinational company that
operates two business sectors. Engineered materials and components are
designed, manufactured and sold under the Arlon brand identity to
electronic, industrial and commercial markets. These products are
based on common technologies in coating, laminating, polymers and
dispersion chemistry. Replacement products and services are
manufactured and distributed under the Kasco brand identity
principally to supermarkets, meat and deli operations, and meat,
poultry and fish processing plants throughout the United States,
Canada and Europe. Kasco also manufactures small band saw blades for
cutting metal and wood, and large band saw blades for use at lumber
mills. In Canada and France, in addition to providing its replacement
products, Kasco also distributes equipment to the supermarket and food
processing industries.
Financial data and other information about the Corporation's
segments is set forth in Note 10 to the Consolidated Financial
Statements on pages 28 through 30 and on pages 4 through 7 of
Bairnco's 1999 Annual Report to Stockholders which is incorporated
herein by reference. This information should be read in conjunction
with the "Financial History" set forth on page 9 of Bairnco's 1999
Annual Report to Stockholders, and "Management's Discussion and
Analysis" set forth on pages 10 through 12 of Bairnco's 1999 Annual
Report to Stockholders, which is incorporated herein by reference.
The principal facilities utilized by each segment are detailed on
page 10 under "Item 2. PROPERTIES" of this filing.
ENGINEERED MATERIALS AND COMPONENTS (ARLON)
Description of Business
Engineered materials and components are designed, manufactured
and sold under the Arlon brand identity. These products are based on
common technologies in coating, laminating, polymers, and dispersion
chemistry. Arlon's principal products include high performance
materials for the printed circuit board industry, adhesive coated cast
and calendered vinyl films, custom-engineered laminates, and
calendered and extruded silicone rubber insulation products used in a
broad range of industrial, consumer and commercial products.
Arlon Materials for Electronics has an international reputation
as the premier supplier of high technology materials for the printed
circuit board industry. These products are marketed principally to
printed circuit board manufacturers and OEM's by technical sales
representatives in the US, and through distributors and manufacturers
representatives in Europe, the Far East, and South America, supported
by direct technical sales specialists in Europe and Asia. Our
Electronic Substrates product line includes high temperature, high
performance thermoset laminates and prepreg bonding plies used in
circuit boards for sophisticated commercial applications and military
electronics. These applications require materials that are highly
reliable, withstand continuous high or widely varying operating
temperatures, provide ease of field repairability, or improve board
fabrication yields. Intermediate temperature laminates, which provide
improved product reliability and ease of manufacture at a lower cost,
are also key to the line. The Microwave Materials product line offers
application matched, reinforced PTFE and other resin based laminates
providing high yields and high performance for low signal-loss and
frequency-dependent microwave applications. The applications for this
product line include microwave antennas, digital cordless telephones,
cellular phone handsets, cellular phone base stations, direct
broadcast satellite TV systems, personal communications networks,
global positioning satellites, local area networks, collision
avoidance systems, and radar detection systems.
Arlon specialty graphic films are marketed under the Calon brand
name and include cast and calendered vinyl films that are manufactured
in a wide variety of colors, face stocks and adhesive systems. These
vinyl films are used in commercial and electrical signage, point of
purchase displays, highway signage, fleet markings, and other
commercial advertising applications. In February of 2000, Bairnco
announced it had purchased certain assets of the materials business
("Signtech") of Signtech USA, Ltd., a manufacturer of laminated vinyl
fabrics designated for use in the commercial graphics market.
Signtech's product lines complement Arlon's current vinyl product
lines, and will provide product line extensions, additional brand
recognition, product development synergies, and penetration into new
customer segments and markets.
Custom engineered laminates and coated products are also
manufactured and marketed under the Arlon brand identity. Typical
applications include insulating foam tapes for thermopane windows,
specialty flexible circuit materials, electrical insulation materials
for motors and transformers, thermal insulation panels for appliances
and cars, identification cards and labels, durable printing stock, and
other custom engineered laminates for specific industrial
applications.
Arlon also manufactures a line of silicone rubber materials, used
in a broad range of consumer, industrial and commercial products.
Typical applications and products include silicone sheet rubber for
producing composite parts, silicone rubber insulating tapes for
electric traction motor coil windings, insulation for industrial and
commercial flexible heaters, silicone products for high temperature
hose and duct markets, insulating tape for medium and high voltage
electrical splices and terminations, as well as compliant, thermally
or electrically conductive silicone sheet adhesives known as
ThermabondT.
Competition
Arlon has numerous competitors ranging in size from small, sole
proprietorships to units of very large, multinational corporations
that in certain instances have far greater market positions and
financial resources than the Corporation's.
The principal method of competition for Arlon's products varies
by product line and type of customer. While competition for
established lines is usually based on one or more of lead time, price,
product performance, or technical support and customer service, it may
also be based on the ability to service emerging technologies through
the custom design of new products, or redesign of existing products,
and materials for the new applications. As an example, for some high
performance materials sold to the printed circuit board industry, the
consistent technical performance of the materials supplied in excess
of minimum specified standards can be the critical competitive
element. In addition, Arlon sells a significant portion of its
circuit board materials into the Far Eastern and European markets
where local producers of similar materials have a competitive
advantage related to their geographic location.
Distribution
Arlon products are marketed by company sales personnel, outside
sales representatives and distributors in the North and South America,
Europe, the Far East and several other international markets.
Raw Materials and Purchased Parts
The essential raw materials used in Arlon engineered materials
and components are silicone rubber, fiberglass cloth, pigments, steel
and aluminum parts, copper foil, aluminum foil, polyethylene foam and
various plastic films, special papers and release liners, vinyl
resins, various adhesives and solvents, TeflonT or
polytetrafluoroethylene (PTFE) resin, polyimide resin, epoxy resins,
other thermoset resins, and various chemicals. Generally, these
materials are each available from several qualified suppliers. There
are, however, several raw materials used in Arlon's products that are
purchased from chemical companies and are proprietary in nature.
Other raw materials are purchased from a single approved vendor on a
"sole source" basis although alternative sources could be developed in
the future if necessary. However, the qualification procedure can
take up to several months and could therefore interrupt production if
the primary raw material source was lost unexpectedly.
Due to the number and diversity of Arlon's products it is
unlikely that availability problems with any one raw material would
have a material adverse effect on Arlon. There are no known
limitations to the continued availability of Arlon's raw materials.
Current suppliers are located in the United States, Japan, Europe and
Brazil.
Employees
As of December 31, 1999, approximately 502 employees were
employed by the operations, which constitute Arlon's engineered
materials and components.
Patents and Trademarks
The Corporation owns several registered trademarks under which
certain Arlon products are sold. The Corporation does not believe that
the loss of any or all of these trademarks would have a material
adverse effect on this segment.
REPLACEMENT PRODUCTS AND SERVICES (KASCO)
Description of Business
Replacement products and services are manufactured and
distributed under the Kasco brand identity principally to the meat,
deli and seafood departments of supermarkets; to meat, poultry and
fish processing plants; and to manufacturers and distributors of
electrical saws and cutting equipment throughout the United States,
Canada and Europe. These products and services include band saw
blades for cutting meat and fish, saw blades for cutting wood and
metal, chopper plates and knives for grinding meat, electrical saws
and cutting machines, seasoning products, preventive maintenance for
equipment in meat and deli operations, and other related butcher
supply products.
Replacement products and services are sold under a number of
brand names including Kasco in the United States and Canada, Atlantic
Service in the United Kingdom and Canada, and Bertram & Graf and Biro
France in Continental Europe.
Competition and Marketing
Kasco competes with several large and medium-sized national and
regional companies, as well as numerous small local companies. The
principal methods of competition are service, price and product
performance. The performance of meat band saw blades used in cutting
meat or other food items is balanced between minimizing waste and
maximizing the efficiency and productivity of the band saw machine and
operator or other cutting/processing equipment being used.
Kasco has a significant distribution network that reaches over
30,000 retail grocery stores, restaurants, delis, and processing
plants in the US, Canada, Europe, Latin America and Asia. Kasco's
distribution network is made up of Territory Managers and Distributors
who have in-depth knowledge of the local markets and the customer's
needs. Kasco has an extensive training program for its Territory
Managers so that each is proficient in the installation, repair, and
service of meat, deli and seafood department equipment.
Within our extensive market coverage of retail grocery stores,
Kasco also offers a unique product offering of seasoning blends,
recipes and instructions under the tradename Mealtime SolutionsT,
which allows a supermarket to present value-added products in their
meat, deli and seafood departments.
Raw Materials and Purchased Supplies
High quality carbon steel is the principal raw material used in
the manufacture of band saw blades and is purchased from multiple
domestic and international suppliers. Tool steel is utilized in
manufacturing meat grinder plates and knives and is purchased from
qualified suppliers located in the United States, Europe and Japan.
Equipment, replacement parts and supplies are purchased from a number
of manufacturers and distributors, mostly in the United States and
Europe. In France, certain specialty equipment and other items used
in the supermarket industry and in the food processing industry are
purchased and resold under exclusive distributorship agreements with
the equipment manufacturers. All of the raw materials and purchased
products utilized by this segment have been readily available
throughout this last year.
Employees
As of December 31, 1999, approximately 304 persons were employed
in the replacement products and services segment.
Patents and Trademarks
The Corporation has a number of United States and foreign
mechanical patents related to several of the products manufactured and
sold by Kasco, as well as a number of design patents and registered
trademarks. The Corporation does not believe, however, that the loss
of any or all of those patents would have a material adverse effect on
this segment.
d. Foreign Operations
The Corporation has foreign operations located in Canada, the
United Kingdom, France, and Germany. Information on the Corporation's
operations by geographical area for the last three fiscal years is set
forth in Note 10 to the Consolidated Financial Statements on pages 28
through 30 of Bairnco's 1999 Annual Report to Stockholders which is
incorporated herein by reference.
In addition, export sales from the Corporation's US based
operations for the years ended December 31, 1999, 1998 and 1997 were
$39,291,000, $30,554,000 and $28,770,000, respectively. Export sales
to any particular country or geographic area did not exceed 10% of
consolidated sales during any of these years.
Item 2. PROPERTIES
The following chart lists for the Corporation as a whole, and by
each of its segments, the principal locations of the Corporation's
facilities and indicates whether the property is owned or leased and
if leased, the lease expiration date.
LEASED OR OWNED
LOCATION SQUARE FEET (LEASE EXPIRATION)
CORPORATION TOTAL 658,000
Headquarters
Lake Mary, FL 11,000 Leased (Expires 2009)
Engineered Materials and Components (Arlon)
Bear, DE 135,000 Owned
East Providence, RI 60,000 Owned
Northbrook, IL 30,000 Owned
Rancho Cucamonga, CA 80,000 Owned
Santa Ana, CA 124,000 Leased (Expires 2003)
Replacement Products and Services (Kasco)
Gwent, Wales, UK 25,000 Owned
Pansdorf, Germany 22,000 Owned
Paris, France 20,000 Leased (Expires 2001)
St. Louis, MO 78,000 Owned
St. Louis, MO 20,000 Leased (Expires 2000)
Field Warehouses
(Approximately 70 locations
in North America) 53,000 Leased
Item 3. LEGAL PROCEEDINGS
Bairnco and its subsidiaries are among the defendants in a
lawsuit pending in the U.S. District Court for the Southern
District of New York (the "Transactions Lawsuit") in which it
is alleged that Bairnco and others are derivatively liable for
the asbestos-related claims against its former subsidiary,
Keene Corporation ("Keene"). The plaintiffs in the
Transactions Lawsuit are the trustees of Keene Creditors Trust
("KCT"), a successor in interest to Keene. In the Transactions
Lawsuit complaint, the KCT alleges that certain sales of assets
by Keene to other subsidiaries of Bairnco were fraudulent
conveyances and otherwise violative of state law, as well as
being violative of the civil RICO statute, 18 U.S.C. Section
1964. The complaint seeks compensatory damages of $700
million, interest, punitive damages, and trebling of the
compensatory damages pursuant to civil RICO. In a series of
decisions that remain subject to appeal, the court has
dismissed plaintiff's civil RICO claims; dismissed 14 of the 21
defendants named in the complaint; and partially granted
defendants' motions for summary judgment on statute of
limitations grounds. Discovery is now underway as to the
remaining claims and defendants. The court has entered a
scheduling order requiring the completion of all discovery
(including expert discovery) by May 11, 2001. A trial date has
not been set, but the Court has scheduled a conference for June
19, 2001, to determine dates for filing a pretrial order, for
trial, and/or for any pretrial motions.
Keene was spun off in 1990, filed for relief under Chapter
11 of the Bankruptcy Code in 1993, and emerged from Chapter 11
pursuant to a plan of reorganization approved in 1996 (the
"Keene Plan"). The Keene Plan provided for the creation of the
KCT, and transferred the authority to prosecute the
Transactions Lawsuit from the Official Committee of Unsecured
Creditors of Keene (which initiated the lawsuit in the
Bankruptcy Court in 1995) to the KCT. The Keene Plan further
provided that only the KCT, and no other entity, can sue
Bairnco in connection with the claims in the Transactions
Lawsuit complaint. Therefore, although a number of other
asbestos-related personal injury and property damage cases
against Bairnco nominally remain pending in courts around the
country, it is expected that the resolution of the Transactions
Lawsuit in substance will resolve all such claims.
Bairnco also is the defendant in a separate action by the
KCT (the "NOL Lawsuit"), also pending in the United States
District Court for the Southern District of New York, in which
the KCT seeks the exclusive benefit of tax refunds attributable
to the carryback by Keene of certain net operating losses ("NOL
Refunds"), notwithstanding certain provisions of applicable tax
sharing agreements between Keene and Bairnco. (As with the
Transactions Lawsuit, the NOL Lawsuit was commenced during
Keene's Chapter 11 case and, pursuant to the Keene Plan, the
KCT became the plaintiff in the lawsuit and the lawsuit was
moved from the Bankruptcy Court to the District Court.)
Pending resolution of the NOL Lawsuit, any refunds actually
received are to be placed in escrow. Through December 31,
1999, approximately $28.5 million of NOL Refunds had been
received and placed in escrow. There can be no assurance
whatsoever that resolution of the NOL Lawsuit will result in
the release of any portion of the NOL Refunds to Bairnco.
Bairnco and its Arlon subsidiary ("Arlon") also are among
the defendants in a third action by the KCT (the "Properties
Lawsuit"), commenced December 8, 1998 and pending in the United
States District Court for the Southern District of New York.
In the Properties Lawsuit complaint, the KCT seeks a
declaratory judgment that it owns certain patents and real
property purchased by Arlon from Keene in 1989, based on the
allegations that technical title to these assets was not
conveyed at the time of the sale and that no proof of claim
specifically referencing these assets was filed during Keene's
Chapter 11 case. In an answer and counterclaims, Bairnco and
Arlon have denied the KCT's claims and have requested a
declaratory judgment that full title to the patents and real
property in question in fact was transferred to Arlon at the
time of the 1989 asset sale. The Properties Lawsuit has been
transferred to the Transactions Lawsuit Judge for consolidated
discovery and other proceedings.
Management believes that Bairnco has meritorious defenses
to all claims or liability purportedly derived from Keene and
that it is not liable, as an alter ego, successor, fraudulent
transferee or otherwise, for the asbestos-related claims
against Keene or with respect to Keene products.
Bairnco Corporation and its subsidiaries are defendants in
a number of other actions. Management of Bairnco believes that
the disposition of these other actions, as well as the actions
and proceedings described above, will not have a material
adverse effect on the consolidated results of operations or the
financial position of Bairnco Corporation and its subsidiaries
as of December 31, 1999.
Item 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders during
the fourth quarter of 1999.
EXECUTIVE OFFICERS OF THE REGISTRANT
The information required with respect to executive
officers of the Corporation is as follows:
Name and Age of Data Pertaining to
Executive Officers Executive Officers
Luke E. Fichthorn III (58) Mr. Fichthorn has
served as Chairman of
Bairnco since May 23, 1990,
and on December 18, 1991,
became Chief Executive
Officer of Bairnco. For
over twenty-five years, Mr.
Fichthorn has been a private
investment banker and
partner of Twain Associates,
a private investment banking
and consulting firm. Mr.
Fichthorn served as a
director of Keene
Corporation, a former
subsidiary of Bairnco
Corporation from August,
1969 until May, 1981, and
became a director of Bairnco
in January, 1981. Mr.
Fichthorn is also a director
of Florida Rock Industries,
Inc. and FRP Properties,
Inc., neither of which is
affiliated with Bairnco.
Larry D. Smith (50) Mr. Smith was
elected Vice President -
Administration and Secretary
of Bairnco in April 1999.
Prior to joining Bairnco,
Mr. Smith was employed for
over 14 years with Emerson
Electric Company in various
human resource managerial
capacities. Most recently,
Mr. Smith was Vice President
Human Resources for
Emerson's Therm-O-Disc, Inc.
division in Mansfield, Ohio.
James W. Lambert (46) Mr. Lambert was
appointed Vice President -
Finance and Treasurer of
Bairnco in December 1999.
From August 1997 to December
1999, Mr. Lambert was
Bairnco's Corporate
Controller. Prior to joining
Bairnco, Mr. Lambert was
employed for over 15 years
by Air Products and
Chemicals Inc., in a variety
of financial, marketing and
product management
capacities.
Lawrence C. Maingot (40) Mr. Maingot was
appointed Corporate
Controller of Bairnco in
December 1999. From May 1997
to December 1999, Mr.
Maingot was Bairnco's
Assistant Controller. From
April 1992 to May 1997, Mr.
Maingot was Bairnco's
Accounting Manager. Prior to
joining Bairnco, Mr. Maingot
was employed with Arthur
Andersen LLP.
PART II
Item 5. MARKET FOR THE REGISTRANTS COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
a. & c. Data regarding market prices of Bairnco's
common stock is included in the "Quarterly Results of
Operations" on page 13 of Bairnco's 1999 Annual Report to
Stockholders which is incorporated herein by reference.
Bairnco's common stock is traded on the New York Stock
Exchange under the symbol BZ. Data on dividends paid is
included in the Consolidated Statements of Income on page 15
of Bairnco's 1999 Annual Report to Stockholders, which is
incorporated herein by reference. The quarterly cash
dividend remained constant at $0.05 per share during 1999.
The Board continues to review the dividend on a quarterly
basis.
b. The approximate number of holders of record of
Bairnco common stock (par value $.01 per share) as of
December 31, 1999 was 1,356.
Item 6. SELECTED FINANCIAL DATA
Reference is made to "Financial History" on page 9 of
Bairnco's 1999 Annual Report to Stockholders, which is
incorporated herein by reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Reference is made to the "Management's Discussion and
Analysis" on pages 10 through 12 of Bairnco's 1999 Annual
Report to Stockholders which is incorporated herein by
reference.
Item 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
The interest on the Corporation's bank debt is floating
and based on prevailing market interest rates. For market
rate based debt, interest rate changes generally do not
affect the market value of the debt but do impact future
interest expense and hence earnings and cash flows, assuming
other factors remain unchanged. A theoretical one-
percentage point change in market rates in effect on
December 31, 1999 would increase interest expense and hence
reduce the net income of the Corporation by approximately
$210,000 per year.
The Corporation's fiscal 1999 sales denominated in a
currency other than U.S. dollars were approximately 14% of
total sales and net assets maintained in a functional
currency other than U.S. dollars at December 31, 1999 were
approximately 19% of total net assets. The effects of
changes in foreign currency exchange rates has not
historically been significant to the Corporation's
operations or net assets.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Reference is made to the Consolidated Financial
Statements and accompanying Notes included on pages 15
through 31 and the "Quarterly Results of Operations" on page
13 of Bairnco's 1999 Annual Report to Stockholders which is
incorporated herein by reference. Financial Statement
Schedules are included in Part IV of this filing.
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
The information required with respect to directors of
Bairnco is included in the Proxy Statement for the 2000
Annual Meeting of Stockholders of Bairnco, which has been
filed with the Securities and Exchange Commission and is
incorporated herein by reference.
See the information regarding executive officers of the
Corporation on pages 13 and 14 of this Annual Report on Form
10-K.
Item 11. EXECUTIVE COMPENSATION
The information required by Item 11 is included in the
Proxy Statement for the 2000 Annual Meeting of Stockholders
of Bairnco, which has been filed with the Securities and
Exchange Commission and is incorporated herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information required by Item 12 is included in the
Proxy Statement for the 2000 Annual Meeting of Stockholders
of Bairnco, which has been filed with the Securities and
Exchange Commission and is incorporated herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by Item 13 is included in the
Proxy Statement for the 2000 Annual Meeting of Stockholders
of Bairnco, which has been filed with the Securities and
Exchange Commission and is incorporated herein by reference.
PART IV
Item 14.EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K
a) 1. Financial Statements
Included in the 1999 Annual Report to Stockholders
which is included as Exhibit 13 to this Annual
Report on Form 10-K:
Report of Independent Certified Public
Accountants;
Consolidated Statements of Income for the years
ended December 31, 1999, 1998 and 1997;
Consolidated Statements of Comprehensive Income
for the years ended December 31, 1999, 1998 and
1997;
Consolidated Balance Sheets as of December 31,
1999 and 1998;
Consolidated Statements of Cash Flows for the
years ended December 31, 1999, 1998 and 1997;
Consolidated Statements of Stockholders'
Investment for the years ended December 31,
1999, 1998 and 1997;
Notes to Consolidated Financial Statements.
2. Financial Statement Schedules
Included in Part IV of this Annual Report on Form 10-K:
Report of Independent Certified Public
Accountants on Financial Statement Schedules on
page 21 of this Annual Report on Form 10-K;
Financial Statement Schedules for the years
ended December 31, 1999, 1998 and 1997:
Schedule II - Valuation and Qualifying
Accounts on page 22 of this Annual Report on
Form 10-K;
All other schedules and notes are omitted because
they are either not applicable, not required or the
information called for therein appears in the
Consolidated Financial Statements or Notes thereto.
3. See Index to Exhibits on pages 24 through 26 of
this Annual Report on Form 10-K.
b) Reports on Form 8-K - None filed in the fourth
quarter of 1999.
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.
BAIRNCO CORPORATION
(Registrant)
Date: March 27, 2000 By: /s/ James W. Lambert
James W. Lambert
Vice President-Finance and
Treasurer
(Principal Financial Officer)
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, this Report has been executed below by the
following persons on behalf of the Registrant and in the
capacities and on the date indicated above.
/s/ Luke E. Fichthorn III
Luke E. Fichthorn III - Chairman and CEO
/s/ Richard A. Shantz
Richard A. Shantz - Director
/s/ Charles T. Foley
Charles T. Foley - Director
/s/ William F. Yelverton
William F. Yelverton - Director
/s/ James W. Lambert
James W. Lambert - Vice President-Finance
and Treasurer
(Principal Financial Officer)
/s/ Lawrence C. Maingot
Larry C. Maingot - Controller
(Principal Accounting Officer)
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULES
TO BAIRNCO CORPORATION:
We have audited in accordance with generally accepted
auditing standards, the consolidated financial statements
included in Bairnco Corporation's Annual Report to
Stockholders incorporated by reference in this Form 10-K,
and have issued our report thereon dated January 21, 2000,
except with respect to the matters discussed in Note 12, as
to which the date is February 16, 2000. Our audits were
made for the purpose of forming an opinion on those
statements taken as a whole. The schedule listed in Item
14(a) 2 is the responsibility of the company's management
and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part
of the basic consolidated financial statements. This
schedule has been subjected to the auditing procedures
applied in the audits of the basic consolidated financial
statements and, in our opinion, fairly states in all
material respects the financial data required to be set
forth therein in relation to the basic consolidated
financial statements taken as a whole.
Orlando, Florida
January 21, 2000
(except with respect to the matters discussed in Note 12, as
to which the date is February 16, 2000)
Arthur Andersen LLP
BAIRNCO CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
Balance Balance
Year Ended Beginning Deductions End
December 31, of Year Expenses (a) Other (b) of Year
1999
Reserve for
Doubtful
Accounts $1,224,000 $ 647,000 $ (735,000) $ -- $1,136,000
Reserve for
Excess and
Obsolete
Inventory $2,559,000 $3,739,000 $(2,156,000) $ -- $4,142,000
1998
Reserve for
Doubtful
Accounts $ 943,000 $ 372,000 $ (241,000) $150,000 $1,224,000
Reserve for
Excess and
Obsolete
Inventory $1,673,000 $3,029,000 $(2,612,000) $469,000 $2,559,000
1997
Reserve for
Doubtful
Accounts $ 822,000 $ 365,000 $ (244,000) $ -- $ 943,000
Reserve for
Excess and
Obsolete
Inventory $2,057,000 $2,036,000 $(2,420,000) $ -- $1,673,000
(a) Actual charges incurred in connection with the purpose for
which the reserves were established.
(b) Additions to the reserve from acquisition.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
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, 1999
Commission File No.: 1-8120
BAIRNCO CORPORATION
(Exact name of registrant as specified in the charter)
INDEX TO EXHIBITS
Description Incorporated Herein By Reference
To
Certificate of Incorporation, as Exhibit 3 to Bairnco's Annual
amended through September 24, 1991. Report on Form 10-K for fiscal
year ended December 31, 1991.
By Laws, as amended through December Exhibit 3 to Bairnco's Annual
18, 1991. Report on Form 10-K for fiscal
year ended December 31, 1991.
Promissory note dated as of Exhibit 4 to Bairnco's Annual
September 1, 1989, between Arlon, Report on Form 10-K for fiscal
Inc. And the Delaware Economic year ended December 31, 1989.
Development Authority.
Indenture of Trust, series 1989, Exhibit 4 to Bairnco's Annual
dated as of September 1, 1989, Report on Form 10-K for fiscal
between the Delaware Economic year ended December 31, 1989.
Development Authority and
Manufacturers and Traders Trust
Company, securing variable rate
demand Industrial Development
Refunding Revenue Bonds (Arlon, Inc.
Project), series 1989 of the
Delaware Economic Development
Authority.
Loan Agreement, dated as of Exhibit 4 to Bairnco's Annual
September 1, 1989, between the Report on Form 10-K for fiscal
Delaware Economic Development year ended December 31, 1989.
Authority and Arlon, Inc.
Reimbursement Agreement dated as of Exhibit 4 to Bairnco's Annual
September 1, 1989 by and among Report on Form 10-K for fiscal
Arlon, Inc., Bairnco Corporation and year ended December 31, 1989.
Continental Bank NA (now Bank of
America, Illinois).
Agreement of the Company, dated Exhibit 4(e) to Bairnco's
March 30, 1987, to furnish a copy of Annual Report on Form 10-K for
any instrument with respect to fiscal year ended December 31,
certain other long-term debt to the 1986.
Securities and Exchange Commission
upon its request.
Standard Industrial Lease dated June Exhibit 10 to Bairnco's
30, 1983 between James E. and Nancy Annual Report on Form 10-K
S. Welsh, trustees under Welsh for fiscal year ended
Family Trust, dated April 20, 1979 December 31, 1983.
and Arlon, Inc. as successor to
Keene Corporation.
Bairnco Corporation 401(k) Savings Exhibit 4.3 to Bairnco's
Plan and Trust. Registration Statement on
Form S-8, No. 33-41313.
Bairnco Corporation 1990 Stock Exhibit 4.3 to Bairnco's
Incentive Plan. Registration Statement on
Form S-8, No. 33-36330.
INDEX TO EXHIBITS
Description Incorporated Herein By
Reference To
Bairnco Corporation Management Exhibit 10 to Bairnco's
Incentive Compensation Plan. Annual Report on Form 10-K
for fiscal year ended
December 31, 1981.
Employment Agreement dated January Exhibit 10 to Bairnco's
22, 1990, between Bairnco Annual Report on Form 10-K
Corporation and Luke E. Fichthorn for fiscal year ended
III. December 31, 1989.
Promissory Note dated January 31, Exhibit 4 to Bairnco's
1998, between Bairnco Corporation Annual Report on Form 10-K
and Bank of America NT&SA. for fiscal year ended
December 31, 1997.
Second Amended and Restated Credit Exhibit 2 to Bairnco's
Agreement dated as of February 22, Current Report on Form 8-K
2000, by and among Bairnco dated February 24, 2000.
Corporation and certain of its
subsidiaries and certain Commercial
Lending Institutions and Bank of
America, N.A., as the Agent for
Lenders.
Exhibits to Second Amended and Exhibit 3 to Bairnco's
Restated Credit Agreement dated as Current Report on Form 8-K
of February 22, 2000, by and among dated February 24, 2000.
Bairnco Corporation and certain of
its subsidiaries and certain
Commercial Lending Institutions and
Bank of America, N.A., as the Agent
for Lenders.
Lease, dated May 17, 1999, between Exhibit 10.1 filed herewith.
Crescent Resources, Inc. a South
Carolina Corporation, and Bairnco
Corporation.
Lease, dated February 16, 2000, Exhibit 10.2 filed herewith.
between Signtech USA, Ltd., a Texas
Limited Partnership, and Arlon
Signtech Ltd.
Calculation of Basic and Diluted Exhibit 11 filed herewith.
Earnings per Share for the years
ended December 31, 1999, 1998 and
1997.
1999 Annual Report to Stockholders. Exhibit 13 filed herewith.
INDEX TO EXHIBITS
Description Incorporated Herein By
Reference To
Subsidiaries of the Registrant. Exhibit 21 filed herewith.
Consent of Independent Certified Exhibit 23 filed herewith.
Public Accountants.
Financial Data Schedules. Exhibit 27 filed herewith
(electronic filing only).
Form 11-K Re: Bairnco Corporation Exhibit 99 filed herewith.
401(k) Savings Plan and Trust for
the fiscal year ended December 31,
1999.