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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, 1997
----------------
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, PA 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.
As of March 16, 1998, the Registrant had 16,844,735 shares of its Common Stock
outstanding. The market value of Common Stock held by non-affiliates of the
Registrant as of that date was $514,817,213.
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 1997 fiscal year (the "1997 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.
PART I
Item l. Business
--------
The Company
-----------
The West Company, Incorporated is one of the world's premiere suppliers of
products and services for packaging and delivery of healthcare and consumer
products. Over 85% of the Company's revenue is generated by the healthcare
markets, mainly from sales to large, multinational pharmaceutical and medical
device companies. The Company also provides contract packaging and contract
manufacturing services for the pharmaceutical and consumer products markets in
the United States and Puerto Rico. As of December 31, 1997, the Company and its
subsidiaries had 4,800 employees.
The Company, a Pennsylvania business corporation, was founded 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
in this Item, the term "Company" includes The West Company, Incorporated and its
consolidated subsidiaries, unless the context otherwise indicates.
Principal Products
Pharmaceutical Industry
-------------------------
Pharmaceutical Stoppers
The Company is the world's largest independent manufacturer of stoppers for
sealing drug vials and other pharmaceutical containers. Several hundred
proprietary formulations are molded from natural rubber and synthetic elastomers
into a variety of stopper sizes, shapes and colors. The stoppers are 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. New rubber
compounds must be tested to show that they do not leach into the customer's
product or affect its potency, sterility, effectiveness, color or clarity. The
Company's laboratories conduct tests to determine the compatibility of its
stoppers with customers' drugs and, in the United States, file formulation
information with the Food and Drug Administration in support of customers' new
drug applications.
Stoppers usually are washed, sterilized and subject to other pre-use processes
by the customer or a third-party before they are fitted on the container.
However, the Company has recently introduced a value-added line of stoppers that
are pre-washed and ready to be sterilized, eliminating several steps in
customers' incoming processes. The Company is also marketing a line of
pre-sterilized stoppers that can be introduced directly into customers' sterile
drug-filling operations.
Metal Seals
The Company also offers a broad line of aluminum seals in various sizes, shapes
and colors. The seals are crimped onto glass or plastic pharmaceutical
containers to hold the stoppers securely in place. The top of aluminum seals
often contain tamper-evident tabs or plastic covers, which must be removed
before the drug can be withdrawn.
Some aluminum seals are sold with specially formulated rubber or elastomeric
discs pre-fitted inside the seal. These "lined" seals may be placed directly
onto the pharmaceutical container, thus eliminating the need for a separate
stopper.
Other Products
Other products for the pharmaceutical industry include:
o Products used in the packaging of non-injectable drugs such as
rubber dropper bulbs, plastic contraceptive drug packages and
child-resistant and tamper-evident plastic closures
o Plastic bottles and containers for the pharmaceutical industry
o Rubber and plastic components for empty and pre-filled disposable
syringes such as plungers, hubs and needle covers
o Blood-sampling system components, including vacuum tube stoppers and
needle valves, and a number of specialized rubber and plastic
components for blood-analyzing systems and other medical devices
o Disposable infant nursers and individual nurser components
Research and Development
The Company maintains its own laboratories for testing raw materials and
finished goods to assure conformity to customer specifications and to safeguard
product quality. Laboratory facilities are also used for research and
development of new materials and products. Engineering staffs are 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. Approximately 111 professional
employees were engaged full time in these activities in 1997. Including drug
delivery development expenses (discussed later in this report), research,
development and engineering expenditures for the creation and application of new
and improved products and processes were approximately $12.0 million in 1997,
$11.2 million in 1996 and $12.0 million in 1995, net of cost reimbursements by
customers.
Recent Developments
The Company has taken steps to expand its product offerings and improve
competitiveness in its core pharmaceutical packaging business.
In 1994, the Company acquired 100% ownership of certain European subsidiaries
through the buyout of their minority shareholders. This acquisition allowed
management to gain better control over its operations and more fully integrate
European operations.
The Company increased its capacity in the components area with the acquisition
of 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 Company also entered into the pharmaceutical services market in 1995 with
its acquisition of Paco Pharmaceutical Services, Inc. ("Paco") for $52.4
million. Paco's business is described below under the caption "Principal
Services -- Contract Manufacturing and Contract Packaging."
In 1996 and 1997, the Company implemented a major restructuring plan announced
in 1996. The plan included the closing or downsizing of six manufacturing
facilities, withdrawal from the machinery business and an approximate 5%
reduction in the workforce. The restructuring was designed to reduce the cost
associated with multiple plant sites and shift certain production capacity to
lower-cost locations. (Additional information pertaining to these activities is
incorporated by reference to the Note "Restructuring Charge" of Notes to
Consolidated Financial Statements of the 1997 Annual Report to Shareholders.)
Principal Products
Consumer Products Industries
------------------------------------------------------------
The Company manufactures a wide range of standard and custom-designed plastic
threaded caps and containers for the personal-care industry. The caps, produced
mainly for cosmetics and toiletries, come in many different sizes and colors.
The Company also makes closures for food and beverage processors. The Company
focuses its efforts on multiple-piece closures that require high-speed assembly.
Principal Services
Contract Packaging and Contract Manufacturing
--------------------------------------------------
Paco is a contract manufacturer and packager of products for pharmaceutical and
consumer-products companies. With its flexible manufacturing environment and
workforce, Paco has the capability to quickly gear up to make and package
products according to customers' specifications, usually employing
customer-supplied raw materials. Once the operation is complete, Paco delivers
the finished product to the customer for final sale and distribution to the end
user.
Customers typically use Paco's services on a temporary basis to supplement their
own manufacturing or packaging capability during a new-product introduction or
special promotion. However, Paco does retain long-term business in both the
manufacturing and packaging areas. Paco operates facilities in Lakewood, New
Jersey and Canovanas, Puerto Rico.
Paco's contract packaging and manufacturing processes and services are subject
to the Good Manufacturing Practice standards applicable to the pharmaceutical
industry as well as to numerous other federal and state laws and regulations
governing the manufacture, handling and packaging of drugs and other regulated
substances.
Paco manufactures liquids and creams, solids, suspensions, and powders. These
products produced include
o headache and cold medications
o skin lotions
o deodorants
o toothpaste and mouthwash
o 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
o "blister" packages (i.e., a plastic film with a foil backing)
o bottles and tubes
o laminated and other flexible pouches or strip packages
o aluminum and plastic liquid cup containers
o paperboard specialty packages
o innovative tamper-evident and child-resistant packages
Although 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.
Principal Services
Development of Novel Drug Delivery Systems
---------------------------------------------------------
In 1993, the Company began developing drug-delivery systems for
bio-pharmaceuticals and other drugs that are difficult to administer effectively
through traditional injectable or oral routes. Improving the therapeutic
performance of these drugs in an economical fashion calls for sophisticated
delivery solutions.
To advance the Company's efforts in this area, the Company has acquired 30% of
DanBioSyst UK Ltd. (DBS), and is considering further investments. DBS is a
research company located in Nottingham, England, which specializes in contract
research utilizing their patented delivery systems for such drugs. In
partnership with biopharmaceutical and other drug companies, DBS works to apply
its delivery system technology to improve the performance of hard-to-deliver
drugs or to assist in delivering these drugs to a specific site in the body.
The Company's internal group dedicated to drug delivery systems is focused on
the Ocufit SR system, a silicone rod small enough to fit behind 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 products based on DBS patented technology. The Company had 31
employees directly engaged in these activities as of December 31, 1997.
Order Backlog
--------------
Product orders on hand at December 31, 1997 were approximately $88 million,
compared with approximately $94 million at the end of 1996. 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 $18
million at December 31, 1997 compared with $24 million at December 31, 1996.
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.
Raw Materials
--------------
The Company uses three basic raw materials in the manufacture of its products:
rubber; aluminum; and plastic. 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.
The Company is pursuing a supply chain management strategy, which involves
purchasing from integrated suppliers that control their own sources of supply.
This strategy has reduced the number of raw-materials suppliers used by the
Company. In some cases, the Company will purchase raw materials from a single
source to assure quality and reduce costs. This strategy increases the risks
that the Company's supply lines may be interrupted in the event of a supplier
production problem. These risks are managed by selecting suppliers with multiple
manufacturing sites, rigid-quality control systems, surplus inventory levels and
other methods of maintaining supply in the face of interrupted production.
Patents and Licenses
---------------------
The Company's patents and trademarks have been useful 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 trademark.
Although not material at this time, the Company believes its investment in DBS
and in 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 a significant
amount of its 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 1997 consolidated net sales. The principal products sold to B-D are
rubber, metal and plastic components used in B-D's disposable syringes and blood
sampling and analysis devices. The Company expects to continue as a major B-D
supplier.
Excluding B-D, the next ten largest customers accounted for approximately 26% of
the Company's consolidated net sales in 1997, but no one of these customers
accounted for more than 6% of 1997 consolidated net sales.
Competition
------------
The Company competes with several companies, some of which are larger than the
Company, across its major pharmaceutical packaging product lines. In addition,
many companies worldwide compete with the Company for business related to
specific product lines. However, the Company believes that it supplies a major
portion of the U.S. market 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 increasingly
more important as pharmaceutical companies initiate aggressive cost-control
measures across their entire operations. Competitors often compete on the basis
of price. The Company differentiates itself from its competition as a
"full-service" supplier, which is able to provide pre-sale compatibility studies
and other services and sophisticated post-sale technical support on a global
basis.
The Company competes against numerous competitors in the field of plastic
closures for consumer products, many of which are larger than the Company and
command dominant market shares. The Company attempts to differentiate itself
through its expertise in high-speed assembly of multiple-piece closures.
The U.S. contract-packaging and -manufacturing service industry is highly
competitive. For packaging services, Paco competes with three significant
companies, only two of which are 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 capacity 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.
Environmental Regulations
---------------------------------------------------
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 1997 Annual Report to Shareholders, incorporated by reference herein.
International
---------------
The Note "Affiliated Companies" and the Note "Industry Segment and Operations by
Geographic Area" of Notes to Consolidated Financial Statements of the 1997
Annual Report to Shareholders are incorporated herein by reference.
The Company believes that its international business does not involve a
substantially greater business risk than its domestic business. Current
financial crises in the Asia/Pacific region have resulted in a decline in demand
for the Company's products in this region, however, direct sales to customers in
these markets have historically not been significant representing approximately
5% of consolidated sales.
The Company's financial condition and results are impacted by fluctuations in
exchange-rate markets (See Notes "Summary of Significant Accounting Policies
Foreign Currency Translation" and "Other Income (Expense)" of Notes to
Consolidated Financial Statements of the 1997 Annual Report to Shareholders,
incorporated herein by reference). 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 1997 Annual
Report to Shareholders, incorporated herein by reference.
Item 2. Properties
-----------
The Company maintains ten manufacturing plants and two mold and die production
facilities in the United States, two manufacturing plants in Puerto Rico, and a
total of seven 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 997,000 square feet of
leased space in Pennsylvania, New Jersey, Florida, Nebraska, North
Carolina and Puerto Rico.
The principal international facilities are as follows:
- - Approximately 530,000 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 354,000 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
1997 Annual Report to Shareholders, which information is incorporated herein by
reference.
Sales office facilities in separate locations are leased under short-term
arrangements.
The Company also holds for sale former manufacturing facility space in Puerto
Rico - totaling 42,000 square feet; and in Germany totaling 4,000 square feet.
Item 3. Legal Proceedings.
-----------------
On February 21, 1992, R. P. Scherer ("Scherer"), the former parent company of
Paco Pharmaceutical Services, Inc. ("Paco") agreed to sell Paco and its
subsidiaries to OCAP Acquisition corp. ("OCAP"). After Scherer terminated the
sale contract in March of that year, OCAP sued Scherer and Paco, alleging breach
of contract and breach of the implied covenant of good faith. Scherer brought
counterclaims against OCAP of a similar nature. Following a trial in March 1996,
the court dismissed all of OCAP's claims and all of Scherer's counterclaims.
Both plaintiffs and defendants appealed. On October 16, 1997 defendants won
their appeal. The plaintiffs did not file a motion for permission to appeal to
the New York Court of Appeals, and this litigation has ended.
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, 1998 were as follows:
Name Age Business Experience During Past Five Years
- ---- --- -----------------------------------------
George R. Bennyhoff 1 54 Senior Vice President, Human Resources and Public Affairs.
Jerry E. Dorsey 1 53 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.
Steven A. Ellers 1 47 Senior Vice President, Finance and Administration since March 1998;
previously Group President from August 1997 to February 1998;
Corporate Vice President, Sales from April 1996 to July 1997; 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 III 1 43 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. Heumann 1 56 Vice President since May 1994 and Treasurer.
Lawrence P. Higgins 58 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.
Name Age Business Experience During Past Five Years
- ---- --- ------------------------------------------
William G. Little 1 55 Chairman of the Board since May 1995 and Director, President and
Chief Executive Officer for the Company.
Donald E. Morel, Jr. 1 40 Group President since March 1998; previously, Corporate Vice
President, Scientific Services from May 1995 to February 1998; 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.
Anna Mae Papso 1 54 Vice President and Corporate Controller
1 Holds position as corporate officer elected by the Board of Directors for one
year term.
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 1997 and 1996 were as
follows:
First Second Third Fourth
Quarter Quarter Quarter Quarter Year
High Low High Low High Low High Low High Low
1997 29 1/4 27 30 27 1/8 34 3/16 28 1/2 35 1/16 28 7/8 35 1/16 27
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
As of December 31, 1997, the Company had 1098 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 $.13 per share in each of the first three
quarters of 1996; $.14 per share in the fourth quarter of 1996 and each of the
first three quarters of 1997; and $.15 per share in the fourth quarter of 1997.
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 (basic and assuming
dilution) 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 1997 Annual Report to Shareholders. 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 1997 Annual Report to Shareholders.
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 1997 Annual Report to
Shareholders.
Item 7A. Quantitative and Qualitative Disclosure about Market Risk
---------------------------------------------------------
The information called for by this Item is incorporated by reference to the Note
"Financial Instruments" "Summary of Significant Accounting Policies" the
Consolidated Financial Statements in the 1997 Annual Report to Shareholders.
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 Per Share Data (Unaudited)" of the
1997 Annual Report to Shareholders.
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 "PROPOSAL #1
ELECTION OF DIRECTORS"; "OWNERSHIP OF COMPANY STOCK"; and "Section 16(a)
Beneficial Ownership Reporting Compliance" 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 "PROPOSAL #1
ELECTION 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 "OWNERSHIP
OF COMPANY STOCK" 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.
-------------------------------------------------------
(a) 1. The following report and consolidated financial statements,
included in the 1997 Annual Report to Shareholders, have been
incorporated herein by reference:
Consolidated Statements of Income for the years ended December 31,
1997, 1996 and 1995
Consolidated Balance Sheets at December 31, 1997 and 1996
Consolidated Statements of Shareholders' Equity for the years
ended December 31, 1997, 1996 and 1995
Consolidated Statements of Cash Flows for the years ended December
31, 1997, 1996 and 1995
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 1997.
(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.
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/ Steven A. Ellers
--------------------------------
Steven A. Ellers
Senior Vice President,
Finance and Administration
March 31, 1998
--------------------------------
Date
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
--------- ----- ----
/s/ William G. Little Chairman, Director, March 31, 1998
- --------------------------------- President,and Chief
William G. Little* Executive Officer
(Principal Executive Officer)
/s/ Tenley E. Albright Director March 31, 1998
- ---------------------------------
Tenley E. Albright *
/s/ John W. Conway Director March 31, 1998
- ---------------------------------
John W. Conway*
/s/ George W. Ebright Director March 31, 1998
- ---------------------------------
George W. Ebright*
/s/ Steven A. Ellers Senior Vice President March 31, 1998
- --------------------------------- Finance and Administration
Steven A. Ellers*
/s/ L. Robert Johnson Director March 31, 1998
- ---------------------------------
L. Robert Johnson*
/s/ William H. Longfield Director March 31, 1998
- ---------------------------------
William H. Longfield*
Signature Title Date
--------- ----- ----
/s/ John P. Neafsey Director March 31, 1998
- ---------------------------------
John P. Neafsey*
/s/ Anna Mae Papso Vice President and March 31, 1998
- --------------------------------- Corporate Controller
Anna Mae Papso (Principal Accounting Officer)
/s/ Monroe E. Trout Director March 31, 1998
- ---------------------------------
Monroe E. Trout*
/s/ Anthony Welters Director March 31, 1998
- ---------------------------------
Anthony Welters*
/s/ J. Roffe Wike, II Director March 31, 1998
- ---------------------------------
J. Roffe Wike, II*
/s/ Geoffrey F. Worden Director March 31, 1998
- ---------------------------------
Geoffrey F. Worden*
* By William G. Little pursuant to a power of attorney.
INDEX TO EXHIBITS
Exhibit
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
Exhibit
Number
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(10) (e) Executive Incentive Bonus Plan 1998.
(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 (File No. 1-8036).
(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
Exhibit
Number
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(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) 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) (t) 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) (u) 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
Exhibit
Number
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(10) (v) 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) (w) Collective Bargaining Agreement, dated December 1, 1997, by and
between Paco Pharmaceutical Services, Inc. and Teamster Local 35
(affiliated with the International Brotherhood of Teamsters).
(10) (x) 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).
(10) (y) 1998 Key Employee Incentive Compensation Plan, dated March 10,
1998.
(11) Not Applicable.
(12) Not Applicable.
(13) 1997 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
(27.1) Financial Data Schedules. (3, 6, 9 and 12 mos., 1996; 12-mos 1995)
(27.2) Financial Data Schedules. (3 and 12 mos. 1997)
(27.3) Financial Data Schedules. (6 and 9 mos. 1997)
F - 4
Exhibit
Number
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(99) None.