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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, 1996
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.)
2251 Lucien Way, Maitland, Florida 32751
(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 10, 1997, the aggregate market value of the Registrant's voting
stock held by non-affiliates was $64,066,267.
On March 10, 1997, there were 9,346,934 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, 1996. Part III
incorporates information by reference from the Proxy Statement dated March
21, 1997 in connection with the Registrant's Annual Meeting of Stockholders
to be held on April 18, 1997.
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.
At December 31, 1996, Bairnco employed 820 persons including 11 Headquarters
personnel. Bairnco's operations occupy approximately 685,500 square feet of
factory and office space at its principal locations.
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. Replacement products and services are manufactured
and distributed under the Kasco name principally to retail food stores and
meat, poultry and fish processing plants throughout the United States, Canada
and Europe. Kasco also distributes equipment to the food industry in Canada
and France.
Financial data and other information about the Corporation's segments is set
forth in Note 9 to the Consolidated Financial Statements on pages 23 and 24
and on pages 4 through 7 of Bairnco's 1996 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
1996 Annual Report to Stockholders, and "Management's Discussion and Analysis"
set forth on pages 10 and 11 of Bairnco's 1996 Annual Report to Stockholders,
which is incorporated herein by reference.
The principal facilities utilized by each segment are detailed on page 9
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 to electronic, industrial and commercial markets.
These products are based on a common technology in coating, laminating, resin
technology and dispersion chemistry. Arlon's principal products include high
performance materials for the printed circuit board industry, cast and
calendered vinyl film systems, custom engineered laminates and pressure
sensitive adhesive systems, and calendered and extruded silicone rubber
insulation products used in a broad range of industrial, consumer and
commercial products.
Arlon circuit board materials (also referred to as substrates) are grouped as
follows: (1) High performance and high temperature materials used in
circuit boards for military electronics and sophisticated commercial
applications. Product applications include next-generation commercial and
military avionics systems combining demands for surface mount technology with
high temperature fabrication and use temperatures, and high performance test
fixturing for next-generation integrated circuits. Intermediate temperature
laminates which provide both improved product reliability in the field and
ease of manufacture are also key to the line. Specialty products have been
developed for the surface mounting of computer chips on circuit boards and
for multi-chip modules which are growing segments of the printed circuit
board market; and, (2) Frequency dependent and low signal loss materials used
for circuit boards and antennas used in microwave applications such as
digital cordless telephones, local and global cellular phone systems, direct
broadcast satellite TV systems, global positioning satellite systems and other
personal communications systems. Additional wireless opportunities for Arlon
circuit board materials include local area networks for computers and public
business exchange systems or PBX's where telephones operate as microcellular
phones within the confines of a facility or complex. A major emerging market
for wireless communications is the new phone systems which are being planned
for a number of developing countries in Asia and South America. These systems
will bypass the high cost of installing and maintaining a hardwire
infrastructure and will permit regional installation based on population
density. This should be a large and growing market over the next decade as
numerous countries become involved.
Arlon specialty graphic films include cast and calendered vinyl films that
are manufactured and marketed under the Calon brand name. These films are
offered in a wide variety of colors and with varying face stocks and adhesive
systems to the specialty graphics market which includes commercial sign
manufacturers and graphic printing houses, and to customers involved in
numerous commercial and governmental specification applications. During 1996,
Arlon entered into a strategic alliance with a United Kingdom based graphics
and distribution company to further develop the European market. This new
venture is expected to provide better and more cost effective services to
Arlon's European distributors. Arlon N.V., Arlon's Belgium subsidiary which
has served Europe, continued to under perform and was closed in 1996.
Custom engineered laminates and adhesive systems are also manufactured and
marketed under the Arlon brand name and include insulating foam tapes for
thermopane windows, electrical insulation, thermal insulation panels for
appliances and cars, security tags and labels, durable printing stock for
high speed laser printing systems and custom engineered laminates for
specific industrial applications. Arlon is also now focusing on developing
additional engineered laminates, coatings and pressure sensitive systems for
specific industrial applications.
A line of silicone rubber based materials, used in a broad range of consumer,
industrial and commercial products, is also manufactured and marketed under
the Arlon brand name. Typical applications of these materials include
silicone rubber for molding composites, silicone rubber insulating tape for
electric traction motor windings, industrial flexible heaters and power
utility insulating tapes, as well as many thermal and electrical conductivity
applications. During 1996, further progress was made in both the development
and applications of Thermabond(tm), a range of thermally conductive silicone
products designed for the dissipation of heat from electronic circuit boards.
During 1996, Arlon acquired a silicone rubber tape product line which provided
additional capacity and a broader range of capability including the ability to
calender ultra-thin silicone rubber materials both with a supporting backbone
as well as unsupported.
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,
technical support and customer service, it may also be based on the ability
to service emerging technologies through the custom design of new or redesign
of existing products and materials for the new applications. For 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 Japanese 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 United States, Canada, 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, Teflon(tm) or polytetrafluoroethelene (PTFE) resin, polyimide resin,
epoxy 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 and France.
Employees
As of December 31, 1996, approximately 476 employees were employed by the
operations comprising 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 name principally to retail food stores and meat, poultry and fish
processing plants throughout the United States, Canada and Europe.
Replacement band saw blades are also sold for use in wood and metal
industries. Kasco's French and Canadian operations also distribute equipment
to the supermarket and food processing industries in their respective markets.
Kasco manufactures band saw blades for cutting, and chopper plates and knives
for grinding meat in supermarkets and packing plants, band saw blades used in
frozen fish factories, small band saw blades for cutting metal and wood, and
large band saw blades for lumber mills. Kasco formulates, manufactures and
markets seasoning products for the meat and deli departments of supermarkets
which are primarily used in the preparation of in-store products. Kasco
distributes related supply products to supermarkets and other customers.
Kasco, through its continent-wide network of service professionals, also
provides preventive maintenance and repair parts and service for a broad
range of supermarket equipment primarily in the meat and deli areas in
selected markets.
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 Bertram & Graf and Biro 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. During 1996, Kasco's management continued the process to improve the
efficiencies in manufacturing and distribution. These actions, together with
significant capital and process investments resulted in superior quality
bands, improved on-time deliveries and improved productivity.
In North America, Kasco supplies its products and services directly to the
supermarket and meat cutting industries through its continent-wide network of
service professionals. These service professionals make regularly scheduled
calls on the accounts in their region. They supply the Company's products
and provide related equipment maintenance services. Kasco's service
professionals are continuously trained in the service and maintenance of
equipment used in the meat preparation areas of retail food outlets. The
field computerization program permits the service professionals to more
efficiently service their customer base.
In order to improve the cost effectiveness and provide improved timely
equipment maintenance, Kasco integrated its service centers with its van
service network during the fourth quarter 1996. The repair service
operations provide preventive maintenance programs and emergency repair
programs for a broad range of equipment primarily in the meat preparation and
deli areas of supermarkets and other retail food outlets.
Seasoning represents an emerging opportunity for Kasco to provide new value
added programs to the meat and deli departments of its supermarket customers.
As supermarkets increasingly compete with the restaurant trade for the
consumers food dollars, they are turning to prepared foods. Kasco is well
positioned to support its customers with its comprehensive "Mealtime
Solutions" seasoning program. "Mealtime Solutions" offers a package of
seasoning blends, recipes and instruction which allows a supermarket to
present value added products in their meat and deli 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
chopper 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 the Canadian and French
operations, certain specialty equipment and other items are purchased and
resold under exclusive distributorship agreements with the equipment
manufacturers. All of the raw materials and purchased products utilized by
this sector have been readily available throughout this last year and it is
anticipated that adequate supplies will continue to be available throughout
the coming year.
Employees
As of December 31, 1996, approximately 333 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 9 to
the Consolidated Financial Statements on page 24 of Bairnco's 1996 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, 1996, 1995 and 1994 were $28,692,000, $27,115,000
and $21,093,000, 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 685,500
Headquarters
Maitland, FL 7,700 Leased(Expires 2000)
Replacement Products and Services
(KASCO)
City of Industry, CA 15,000 Leased(Expires 1997)
Gwent, Wales, UK 25,000 Owned
Lyon, France 11,000 Leased(Expires 1999)
Montreal, Quebec, Canada 7,000 Leased(Expires 1998)
Pansdorf, Germany 22,000 Owned
Paris, France 12,000 Leased(Expires 1997)
Rennes, France 4,800 Leased(Expires 1997)
Scarborough, Ontario, Canada 33,000 Owned
St. Louis, MO 75,000 Owned
St. Louis, MO 20,000 Leased(Expires 2000)
Field Warehouses
(Approximately 70 locations
in North America) 36,000 Leased
Engineered Materials and Components
(Arlon)
Bear, DE 145,000 Owned
East Providence, RI 68,000 Owned
Rancho Cucamonga, CA 80,000 Owned
Santa Ana, CA 124,000 Leased(Expires 2003)
Item 3. LEGAL PROCEEDINGS
Since its announcement in January 1990 of its intention to spin off Keene,
Bairnco has been named as a defendant in a number of individual personal
injury and wrongful death cases in which it is alleged that Bairnco is
derivatively liable for the asbestos-related claims against Keene. On
December 6, 1993, Keene filed for protection under Chapter 11 of the
Bankruptcy Code. On June 8, 1995, the Creditors' Committee commenced an
adversary proceeding in the Bankruptcy Court against Bairnco, certain of its
present and former officers and directors, and others alleging that the
transfer of assets for value by Keene to other subsidiaries of Bairnco and
the spin-offs of certain subsidiaries by Bairnco, were fraudulent and
otherwise violative of law and seeking compensatory damages of $700 million,
plus interest and punitive damages (the "Transactions Lawsuit"). The
complaint in the Transactions Lawsuit includes a count under the civil RICO
statute, 18 U.S.C. Section 1964, pursuant to which compensatory damages are
trebled.
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 is party to a separate action brought by Keene in the United States
Bankruptcy Court for the Southern District of New York in which Keene seeks
the exclusive benefit of tax refunds attributable to the carryback by Keene
of certain net operating losses ("NOL Refunds"), notwithstanding certain
provisions of tax sharing agreements between Keene and Bairnco (the "NOL
Lawsuit"). (After filing the NOL Lawsuit, Keene ceded control of the action
to the Creditors' Committee.) Pending resolution of the NOL Lawsuit, any
refunds actually received are to be placed in escrow. Through December 31,
1996, 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.
Keene's plan of reorganization was approved and became effective on July 31,
1996. The plan, as approved, creates a Creditors Trust that has succeeded to
all of Keene's asbestos liabilities, and also has succeeded to the right to
prosecute both the Transactions Lawsuit and the NOL Lawsuit. The plan also
includes a permanent injunction under which only the Creditors Trust, and no
other entity, can sue Bairnco in connection with the claims asserted in the
Transactions Lawsuit. Prior to confirmation, Bairnco and other defendants in
the Transactions Lawsuit had entered into a stipulation (the "Transactions
Stipulation") that calls for the Transactions Lawsuit to be litigated in
the District Court. The anticipated effect of these various provisions is
that all claims and claimants against Bairnco that relate to Keene's asbestos
liabilities should be consolidated for a single, binding resolution in the
Transactions Lawsuit in the District Court.
In keeping with the Transactions Stipulation, the parties have moved to
withdraw the reference - that is, they have requested that the District Court
assume from the Bankruptcy Court all responsibility for overseeing the
Transactions Lawsuit. Pending action on this request, proceedings in the
Transactions Lawsuit are stayed.
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, 1996.
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 1996.
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 (55) Mr. Fichthorn has served as Chairman of
Bairnco since May 1990, and on December
18, 1991, became Chief Executive Officer of
Bairnco. For over twenty-four 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.
J. Robert Wilkinson (62) Mr. Wilkinson was elected Vice President -
Finance and Treasurer in March 1990. From
September 1986 to September 1989, Mr.
Wilkinson was Bairnco's Vice President -
Controller. From October 1989 to March
1990 he was Executive Vice President of
Shielding Systems Corporation, a wholly-
owned subsidiary of Bairnco. Prior to
joining Bairnco, Mr. Wilkinson served as
Vice President and Controller of Transway
International Corporation from November
1981 to June 1986.
Linda Metcalf (51) Mrs. Metcalf was appointed Vice President
Administration & Secretary of Bairnco on
October 21, 1996. Mrs. Metcalf was
previously Managing director of Human
Resources at CBIS.
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 12 of Bairnco's 1996 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 14 of Bairnco's 1996 Annual Report to Stockholders which is
incorporated herein by reference. The quarterly cash dividend remained
constant at $0.05 per share during 1996. The Board continues to review the
dividend on a quarterly basis.
b. The approximate number of common equity security holders is as follows:
Approximate Number
of Holders of Record
Title of Stock as of December 31, 1996
Common Stock, Par Value $.01 per share 1,773
Item 6. SELECTED FINANCIAL DATA
Reference is made to "Financial History" on page 9 of Bairnco's 1996 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
and 11 of Bairnco's 1996 Annual Report to Stockholders which is incorporated
herein by reference.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Reference is made to the Consolidated Financial Statements and accompanying
Notes included on pages 14 through 24 and the "Quarterly Results of
Operations" on page 12 of Bairnco's 1996 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 1997 Annual Meeting of Stockholders of Bairnco,
which will be filed with the Securities and Exchange Commission and is
incorporated herein by reference.
See the information regarding executive officers of the Corporation on page
12 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 1997 Annual Meeting of Stockholders of Bairnco, which will be 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 1997 Annual Meeting of Stockholders of Bairnco, which will be 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 1997 Annual Meeting of Stockholders of Bairnco, which will be 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 1996 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,
1996, 1995 and 1994;
Consolidated Balance Sheets as of December 31, 1996 and 1995;
Consolidated Statements of Cash Flows for the years ended December
31, 1996, 1995 and 1994;
Consolidated Statements of Stockholders' Investment for the years
ended December 31, 1996, 1995 and 1994;
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 19 of this Annual Report on Form 10-K;
Financial Statement Schedules for the years ended December 31, 1996,
1995 and 1994:
Schedule II - Valuation and Qualifying Accounts on page 20 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 22 through 24 of this Annual Report on
Form 10-K.
b) Reports on Form 8-K - None for fiscal year 1996.
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 21, 1997
By: /s/ J. Robert Wilkinson
J. Robert Wilkinson
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/ J. Robert Wilkinson
J. Robert Wilkinson - Vice President-Finance
and Treasurer
(Principal Financial 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 23, 1997. 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 23, 1997
Arthur Andersen LLP
BAIRNCO CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
Balance Balance
Year Ended Beginning Deductions End
December 31, of Year Expenses (a) of Year
1996 - Reserve
for Doubtful
Accounts $ 763,000 $300,000 $(241,000) $ 822,000
1995 - Reserve
for Doubtful
Accounts $1,097,000 $202,000 $(536,000) $ 763,000
1994 - Reserve
for Doubtful
Accounts $ 844,000 $430,000 $(177,000) $1,097,000
(a) Actual charges incurred in connection with the purpose for which the
reserves were established.
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, 1996
Commission File No.: 1-8120
BAIRNCO CORPORATION
(Exact name of registrant as specified in the charter)
INDEX TO EXHIBITS
Certificate of Incorporation, as amended through September 24, 1991.
Incorporated herein by reference to Exhibit 3 to Bairnco's Annual Report on
Form 10-K for fiscal year ended December 31, 1991.
By Laws, as amended through December 18, 1991.
Incorporated herein by reference to Exhibit 3 to Bairnco's Annual Report on
Form 10-K for fiscal year ended December 31, 1991.
Amended and Restated Credit Agreement, dated as of December 17, 1992, among
Bairnco Corporation and certain of its subsidiaries, as guarantors, and
certain Commercial Lending Institutions and Continental Bank NA (now Bank
of America, Illinois), as the Agent for Lenders.
Incorporated herein by reference to Exhibit 3.1 to Bairnco's Annual Report on
Form 10-K for fiscal year ended December 31, 1992.
Promissory note, dated December 17, 1992, between Bairnco Corporation and
Continental Bank NA (now Bank of America, Illinois).
Incorporated herein by reference to Exhibit 3.2 to Bairnco's Annual Report on
Form 10-K for fiscal year ended December 31, 1992.
Amendment dated as of March 16, 1994 to Amended and Restated Credit Agreement
dated as of December 17, 1992, by and among Bairnco Corporation and certain
of its subsidiaries and certain Commercial Lending Institutions and
Continental Bank NA (now Bank of America, Illinois), as the Agent for Lenders.
Incorporated herein by reference to Exhibit 3 to Bairnco's Annual Report on
Form 10-K for fiscal year ended December 31, 1993.
Promissory note, dated as of September 1, 1989, between Arlon, Inc. and the
Delaware Economic Development Authority.
Incorporated herein by reference to Exhibit 4 to Bairnco's Annual Report on
Form 10-K for fiscal year ended December 31, 1989.
Indenture of Trust, series 1989, dated as of September 1, 1989, between the
Delaware Economic 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.
Incorporated herein by reference to Exhibit 4 to Bairnco's Annual Report on
Form 10-K for fiscal year ended December 31, 1989.
Loan Agreement, dated as of September 1, 1989, between the Delaware Economic
Development Authority and Arlon, Inc.
Incorporated herein by reference to Exhibit 4 to Bairnco's Annual Report on
Form 10-K for fiscal year ended December 31, 1989.
Reimbursement Agreement dated as of September 1, 1989 by and among Arlon,
Inc., Bairnco Corporation and Continental Bank NA (now Bank of America,
Illinois).
Incorporated herein by reference to Exhibit 4 to Bairnco's Annual Report on
Form 10-K for fiscal year ended December 31, 1989.
Agreement of the Company, dated March 30, 1987, to furnish a copy of any
instrument with respect to certain other long-term debt to the Securities and
Exchange Commission upon its request.
Incorporated herein by reference to Exhibit 4(e) to Bairnco's Annual Report
on Form 10-K for fiscal year ended December 31, 1986.
Lease dated December 10, 1991 between Mattei Corporation and Bairnco
Corporation.
Incorporated herein by reference to Exhibit 10 to Bairnco's Annual Report on
Form 10-K for fiscal year ended December 31, 1991.
Lease, dated May 1, 1985, between John B. Merrill, Joseph S. Weedon and
Richard A. Westberg and KASCO Corporation as successor to Atlantic Service,
Inc.
Incorporated herein by reference to Exhibit 10 to Bairnco's Annual Report on
Form 10-K for fiscal year ended December 31, 1986.
Standard Industrial Lease dated June 30, 1983 between James E. and Nancy S.
Welsh, trustees under Welsh Family Trust, dated April 20, 1979 and Arlon, Inc.
as successor to Keene Corporation.
Incorporated herein by reference to Exhibit 10 to Bairnco's Annual Report on
Form 10-K for fiscal year ended December 31, 1983.
Bairnco Corporation 401(k) Savings Plan and Trust.
Incorporated herein by reference to Exhibit 4.3 to Bairnco's Registration
Statement on Form S-8, No. 33-41313.
Bairnco Corporation 1990 Stock Incentive Plan.
Incorporated herein by reference to Exhibit 4.3 to Bairnco's Registration
Statement on Form S-8, No. 33-36330.
Bairnco Corporation Management Incentive Compensation Plan.
Incorporated herein by reference to Exhibit 10 to Bairnco's Annual Report on
Form 10-K for fiscal year ended December 31, 1981.
Employment Agreement dated January 22, 1990, between Bairnco Corporation and
Luke E. Fichthorn III.
Incorporated herein by reference to Exhibit 10 to Bairnco's Annual Report on
Form 10-K for fiscal year ended December 31, 1989.
Amendment dated as of April 18, 1995, to Amended and Restated Credit
Agreement dated as of December 17, 1992, by and among Bairnco Corporation and
certain of its subsidiaries and certain Commercial Lending Institutions and
Continental Bank NA (now Bank of America, Illinois), as the Agent for Lenders.
Incorporated herein by reference to Exhibit 4 to Bairnco's Quarterly Report
on Form 10-Q for the quarterly period ended April 1, 1995.
Amendment dated as of February 14, 1997, to Amended and Restated Credit
Agreement dated as of December 17, 1992, by and among Bairnco Corporation and
certain of its subsidiaries and certain Commercial Lending Institutions and
Bank of America, Illinois, as the Agent for Lenders.
Exhibit 4 filed herewith.
Calculation of Primary and Fully Diluted Earnings per Share for the years
ended December 31, 1996, 1995 and 1994.
Exhibit 11 filed herewith.
1996 Annual Report to Stockholders.
Exhibit 13 filed herewith.
Subsidiaries of the Registrant.
Exhibit 21 filed herewith.
Consent of Independent Certified Public Accountants.
Exhibit 23 filed herewith.
Financial Data Schedules.
Exhibit 27 filed herewith (electronic filing only).
Form 11-K Re: Bairnco Corporation 401(k) Savings Plan and Trust for the
fiscal year ended December 31, 1996.
Exhibit 99 filed herewith.