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FORM 10 - K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
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COMMISSION FILE NUMBER 0-15582
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MINUTEMAN INTERNATIONAL, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS ARTICLES OF INCORPORATION)
ILLINOIS 36-2262931
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
111 SOUTH ROHLWING ROAD, ADDISON, ILLINOIS 60101
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 630-627-6900
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Securities registered pursuant to Section 12(g) of the Act:
Common stock, no par value
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(TITLE OF EACH CLASS)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 of 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. X Yes No
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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 [ ].
The aggregate market value of the voting stock held by non-affiliates of
the registrant as of March 1, 1997:
Common stock, no par value, $6,434,000
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The number of shares outstanding of the issuer's class of common stock as of
March 1, 1997:
Common stock, no par value, 3,568,385 shares
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report for the year ended December 31, 1996, are
incorporated by reference into Parts I and II.
Portions of the Proxy Statement for the Annual Shareholders Meeting to be
held April 25, 1997, are incorporated by reference into Part III.
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PART I
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Item 1. BUSINESS
General Development of Business
Minuteman International, Inc. an Illinois corporation incorporated in 1951 as
American Cleaning Equipment Corporation, manufactures and distributes one of
the most complete lines of commercial and industrial vacuums, floor and carpet
care, chemical cleaning and coating products and complementary accessories in
the United States and Canada. Its products are exported to countries around
the world.
Products
The Company's product line consists of hard surface floor care equipment,
carpet care and maintenance products, sweepers, scrubbers, commercial and
industrial specialized vacuums, and complementary accessories. Included in the
specialized vacuum area are the hazardous location/explosive environment
vacuums and the clean/room nuclear vacuums.
Multi-Clean, the chemical division of Minuteman International, Inc. formulates,
manufactures and distributes over 65 chemical cleaning and floor coating
products including multi-surface cleaners and degreasers, finishes and waxes,
carpet care products, concrete and wood coatings and finishes, plus a full
array of specialized chemicals.
Parker Sweeper Company, acquired in 1992, manufactures a full line of litter
vacuums as well as an extensive array of lawn and turf debris handling
equipment. Effective December 30, 1994, Parker Sweeper Company, formerly a
wholly-owned subsidiary, was merged into the Company and operates as a
division.
Additional information pertaining to new products is incorporated herein by
reference on pages 5 through 16 of the 1996 Annual Report for the year ended
December 31, 1996.
Marketing and Distribution
The Company manufactures and distributes its products throughout the world.
The distribution process in the United States is primarily through the more
than 300 active dealers and its two sales branches. The Company distributes
its products in Canada through Minuteman Canada, Inc. a wholly-owned
subsidiary. The Company sells its products to Hako-Werke subsidiaries in
Japan, Australia and certain European countries. Export of other products is
conducted through the headquarter office in Addison, Illinois. Sales to
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affiliated and unaffiliated customers in foreign countries aggregated
to $11,173,000, $11,063,000 and $9,037,000 in 1996, 1995 and 1994,
respectively. The Company's equipment is sold under Minuteman International,
Minuteman and Parker Sweeper trade names. The chemical cleaning and coating
products are manufactured by Minuteman International, Inc. and sold under
Multi-Clean trade name. Substantially all of the Company's commercial
equipment is manufactured at its Illinois production facilities in Addison and
Hampshire. All of the Company's industrial equipment is imported from Germany.
All of the Company's chemical cleaning and coating products are produced at its
Shoreview, Minnesota facility.
The manufacture, production and demand for the Company's products and services
are not considered to be seasonal in nature. No part of the Company business
depends on any one single customer, the loss of which would adversely affect
the Company. The Company does not believe any material portion of its business
to be subject to renegotiation of profits or termination of contracts at the
election of the Government.
Raw Materials
The Company purchases castings, electric motors, cord sets, switches, brushes,
wheels, injection molded plastics, sheet steel, paint pigment, chemicals and
other raw materials from a number of suppliers. The Company considers its
ability to obtain raw materials and supplies to be readily available. It does
not believe that the loss of any supplier would adversely affect the Company's
business.
Competition
Minuteman International, Inc. competes with many regional, national and
international manufacturers throughout the industry. These competitive markets
include industrial and plant maintenance, sanitation supply, critical filter,
floor coating and chemical fields. The principal competitive factors within
each of these markets are product quality, reliability, service and fair price.
The Company believes it will continue to compete effectively in the
marketplace and continue its sales growth in the future.
Patents and Trademarks
Currently, the Company has 20 United States and 8 international patents.
Although the Company generally seeks to obtain patents where appropriate, it
does not consider the successful conduct of its business in general to be
dependent on any of its patents or patent applications. By agreement dated
March 1, 1994, with Hako-Werke, the Company agreed to discontinue the use of
the "Hako" trademark on any products intended for sale in any country. It was
further agreed that the Company and Hako-Werke would be free to market and
distribute each of their products throughout the world, however, Hako-Werke
would not export products bearing the trademark "Hako" into North America
before April 30, 1996.
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Minuteman International, Inc. is owner of the United States and Canadian
registrations for the Multi-Clean and Parker Sweeper trade names. The
Minuteman trademark is registered in the United States and Canada. The Parker
trademark is registered in the United States and Canada.
Working Capital
The Company had working capital of $19.2 Million at December 31, 1996. Cash,
cash equivalents and short term investments represented 18.8% of the working
capital which when not in use, is invested in bank certificates of deposit,
Eurodollar certificate investments, a managed portfolio of high quality,
variable rate notes and tax exempt seven day bonds.
Backlog
The Company's backlog of orders was approximately $3.1 Million at December 31,
1996 and 1995, respectively. The Company anticipates that substantially all of
the 1996 backlog will be delivered during 1997. In the opinion of Management,
fluctuations in the amount of its backlog are not necessarily indicative of
intermediate or long-term trends in the Company's business.
Research and Development
The Company expended approximately $1,146,000 $1,085,000 and $861,000 in
research and development activities during 1996, 1995 and 1994, respectively.
Employees
The Company has 258 full time employees. The facilities in Addison, Illinois
and Shoreview, Minnesota, have approximately 105 hourly paid employees who are
covered by local collective bargaining agreements. These agreements expire in
May 1998 and October 1998, respectively. The Company believes that the current
employee relations are excellent. The Company plans to hire additional
employees during 1997 as are justified by the needs of the business.
Environmental Matters
The Company's operations are subject to various federal, state and local laws
and regulations regarding the environmental aspects of the manufacture and
distribution of chemical components. The Company believes that it is currently
in compliance in all material respects with the environmental laws and
regulations affecting its operations. Capital expenditures for the purpose of
environmental protection are not expected to be material in amount for 1997 or
thereafter.
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Item 2. PROPERTIES
The Company owns or leases the following properties in its operations:
Owned
Location Size (sq. ft.) Use or Leased
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Addison, IL 112,230 (Bldg.) Office, manufacturing,
254,300 (Land) Warehouse, sales, service Owned
Villa Park, IL 6,135 (Bldg.) Warehouse, sales service Leased
Hampshire, IL 100,000 (Bldg.) Manufacturing, warehouse
871,200 (Land) Owned
Shoreview, MN 34,952 (Bldg.) Office, manufacturing,
133,830 (Land) Warehouse, sales, service Owned
Glendale, CA 7,320 (Bldg.) Warehouse, sales, service
15,000 (Land) Owned
Dollard des Ormeaux, Quebec
9,000 (Bldg.) Warehouse, sales, service Leased
Mississauga, Ontario
5,120 (Bldg.) Warehouse, sales, service Leased
Approximately 90% of the Company's Addison and Hampshire, Illinois facilities
and 85% of the Company's Shoreview, Minnesota facility are devoted to
manufacturing.
In October, 1993, the Company purchased 20 acres of vacant land in Hampshire,
Illinois. In July of 1994, a 50,000 square foot facility was completed and was
fully operational in December 1994 when manufacturing of Parker Sweeper
products were relocated from the former Springfield, Ohio location. In August
of 1995, a 50,000 square foot addition to this facility was completed. With
the acquisition of this property, the Company anticipates expanding the
services currently provided.
The Villa Park, Illinois lease term expires December 31, 2000. The Dollard des
Ormeaux, Quebec lease term expires December 31, 1997. The Mississauga, Ontario
lease term expires on January 31, 1998. The Company believes that failure to
obtain the renewal of any lease would not have a material adverse effect on
its business.
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Item 3. LEGAL PROCEEDINGS
The Company is a party to various legal proceedings arising in the ordinary
course of its business. The outcome of these matters will not, in the opinion
of Management, have a material adverse effect on the business or financial
condition of the Company.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of the fiscal year ended December 31, 1996, the
Company did not submit any matter to a vote of shareholders through the
solicitation of proxies or otherwise.
Part II
Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS
Common stock market prices and dividends on page 24 of the Annual Report for
the year ended December 31, 1996, are incorporated herein by reference.
Item 6. SELECTED CONSOLIDATED FINANCIAL DATA
The Selected Consolidated Financial Data on page 24 and the Notes to
Consolidated Financial Statements on pages 21 through 23 of the Annual Report
for the year ended December 31, 1996, are incorporated herein by reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
"Management's Discussion and Analysis of Results of Operations and Financial
Condition" on pages 17 and 18 of the Annual Report for the year ended December
31, 1996, are incorporated herein by reference.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements included on pages 18 through 20 and the
Notes to Consolidated Financial Statements on pages 21 through 23 of the Annual
Report for the year ended December 31, 1996, are incorporated herein by
reference.
Quarterly Results of Operations on page 23 of the Annual Report for the year
ended December 31, 1996, is incorporated herein by reference.
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Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no changes in or disagreements with the Company's auditors on
accounting and financial disclosure.
Part III
Item 10. DIRECTORS AND OFFICERS OF THE COMPANY
The information contained on pages 2 through 4 of Minuteman International,
Inc.'s Proxy Statement dated March 15, 1997, with respect to directors and
executive officers of the Company is incorporated herein by reference in
response to this item.
Item 11. EXECUTIVE COMPENSATION
The information contained on pages 5 and 6 of Minuteman International Inc.'s
Proxy Statement dated March 15, 1997, with respect to Executive Compensation
and transactions, is incorporated herein by reference in response to this item.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The information contained on page 2 of Minuteman International Inc.'s Proxy
Statement dated March 15, 1997, with respect to security ownership of certain
beneficial owners and management, is incorporated herein by reference in
response to this item.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information contained on pages 2 through 7 of Minuteman International
Inc.'s Proxy Statement dated March 15, 1997, with respect to certain
relationships and related transactions, are incorporated herein by reference in
response to this item.
Part IV.
Item 14. EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULE AND
REPORTS ON FORM 8-K
(a) (1. and 2.) Financial Statements
The financial statements listed in the accompanying index to financial
statements are filed herewith.
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(a) (3) and (c) Exhibits
The Exhibits required by Item 601 of Regulation S-K and filed
herewith are listed in the Exhibit Index which follows the financial
statements and immediately precedes the exhibits filed.
(b) Reports on Form 8-K
No Reports on Form 8-K were filed in the fourth quarter of 1996;
(d) Financial Statement Schedule
The financial statement schedule listed in the accompanying index
to financial statements is filed herewith.
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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.
Minuteman International, Inc.
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(Registrant)
Date: March 15, 1997 By:
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Jerome E. Rau, President and
Chief Executive Officer
By:
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Thomas J. Nolan,
Chief Financial Officer,
Secretary and Treasurer
Pursuant to the requirements of the Securities and Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
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Jerome E. Rau
President, Chief Executive Officer,
and Director
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Tyll Necker, Director
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Frederick W. Hohage, Director
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Frank Reynolds, Director
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James C. Schrader, Jr. Director
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ANNUAL REPORT ON FORM 10-K
ITEM 14(a) (1) AND (2), (c) and (d)
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENTS SCHEDULE
CERTAIN EXHIBITS
FINANCIAL STATEMENT SCHEDULE
YEAR ENDED DECEMBER 31, 1996
MINUTEMAN INTERNATIONAL, INC.
ADDISON, ILLINOIS
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REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
Minuteman International, Inc.
We have audited the accompanying consolidated balance sheets of Minuteman
International, Inc. and subsidiaries as of December 31, 1996 and 1995 and the
related consolidated statements of income, shareholders' equity and cash flows
for each of the three years in the period ended December 31, 1996. Our audits
also include the financial statement schedule listed in the Index at Item
14(a). These financial statements and schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Minuteman International, Inc. and subsidiaries at December 31, 1996 and 1995,
and consolidated results of their operations and their cash flows for each of
the three years in the period ended December 31, 1996, in conformity with
generally accepted accounting principles. Also, in our opinion, the related
financial statements schedule, when considered in relation to the basic
financial statements taken as a whole, present fairly in all material respects
the information set forth therein.
Ernst & Young LLP
Chicago, Illinois
February 13, 1997
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ITEM 14(a) (1) AND (2)
LIST OF FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULE
MINUTEMAN INTERNATIONAL, INC. AND SUBSIDIARIES
December 31, 1996
The following consolidated financial statements of Minuteman International,
Inc. and subsidiaries, included in the Annual Report of the Registrant to its
shareholders for the year ended December 31, 1996, are incorporated by
reference in Item 8:
Consolidated Balance Sheets - December 31, 1996
and 1995
Consolidated Statements of Income - Years ended
December 31, 1996, 1995 and 1994
Consolidated Statements of Shareholders' Equity -
Years Ended December 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flows -
Years Ended December 31, 1996, 1995 and 1994
Notes to Consolidated Financial Statements
The following consolidated financial statement schedule of Minuteman
International, Inc. and subsidiaries are included in Item 14(d):
Schedule II -- Valuation and Qualifying Accounts 14
All other schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under the
related instructions or are inapplicable, and therefore have been omitted.
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SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
MINUTEMAN INTERNATIONAL, INC. AND SUBSIDIARIES
COL. A COL. B COL. C COL. D COL. E
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Additions Deductions
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Charged to
Balance at Charged to Other Balance
Beginning of Costs and Accounts - at End of
Description Period Expenses Describe Describe(1) Period
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Year Ended December 31, 1996
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Reserves and allowances deducted from
asset accounts:
Allowance for uncollectible accounts $372,000 104,000 ------ 125,000 $351,000
Year Ended December 31, 1995
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Reserves and allowances deducted from
asset accounts:
Allowance for uncollectible accounts $400,000 66,000 ------ 94,000 $372,000
Year Ended December 31, 1994
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Reserves and allowances deducted from
asset accounts:
Allowance for uncollectible accounts $385,000 213,000 ------ 198,000 $400,000
Note 1 --Uncollectible accounts written off, net of recoveries.
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MINUTEMAN INTERNATIONAL, INC.
EXHIBIT INDEX
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(Pursuant to Item 601 of Regulations S-K)
NO. DESCRIPTION AND PAGE OR INCORPORATION REFERENCE
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Certificate of Incorporation and By-Laws
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3 (a) Certificate of Incorporation (incorporated herein by reference to
Exhibit 3 (a) of the Registrant's Form S-18 Registration Statement,
Registration Number 33-11858).
3 (b) By-laws (incorporated herein by reference to Exhibit 3 (b) of the
Registrant's Form S-18 Registration Statement, Registration Number
33-11858).
Instruments Defining the Rights of Security Holders,
Including Indentures
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4 (a) Specimen Certificate for Common Stock, no par value (incorporated herein
by reference to Exhibit 4 of the Registrant's For S-18 Registration
Statement, Registration Number 33-11858).
Material Contracts
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10 (a) Employment Agreement dated as of January 20, 1987, between the Company
and Jerome E. Rau (incorporated herein by reference to Exhibit 10 (a) of
the Registrant's Form S-18 Registration Statement, Registration Number
33-11858).
10 (b) Amendment to Employment Agreement dated as of February 27, 1990, between
the Company and Jerome E. Rau (incorporated herein by reference to
Exhibit 10 (h) at Page 20 of Form 10K Annual Report for fiscal year ended
December 31, 1989).
10 (c) Specimen form of Employment Agreement between the Company and its
executive officers (with the exception of the president) (incorporated
herein by reference to Exhibit 10 (c) at Page 18 of Form 10K Annual
Report for fiscal year ended December 31, 1991).
10 (d) Employment Agreement dated as of March 22, 1990, between the Company and
Michael Gravelle (incorporated herein by reference to Exhibit 10 (d) at
Page 22 of Form 10K Annual Report for fiscal year ended December 31,
1991).
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10 (e) Agreement dated as of February 9, 1987, with respect to trademark between
the Company and Hako-Werke International GmbH (incorporated herein by
reference to Exhibit 10 (c) of the Registrant's Form S-18 Registration
Statement, Registration Number 33-11858).
10 (f) Agreement dated March 1, 1994 with respect to worldwide distribution/
marketing and trademarks between the Company and Hako-Werke
International GmbH. Incorporated herein by reference to Exhibit 10 (f)
at Page 18 of Form 10-K Annual Report for fiscal year ended December 31,
1994.
Statement re. Computation of Per Share Earnings
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11 Statement re. computation of per share earnings. See Note B of the
Notes to Consolidated Financial Statements on Page 21 of the Annual
Report for the year ended December 31, 1996 (incorporated herein by
reference).
Annual Report to Security Holders
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13 The Company's Annual Report to Shareholders for the year ended December
31, 1996, is incorporated herein by reference.
Subsidiaries of the Registrant
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22 (a) Subsidiaries of the Registrant
(included herein at Page 17).
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Minuteman International, Inc. will furnish any of the aforementioned exhibits
indicated above to requesting security holders upon written request.
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