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1
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-5869-1
SUPERIOR SURGICAL MFG. CO., INC.
Incorporated - New York I.R.S. Employer Identification
No. 11-1385670
10099 Seminole Blvd.
Seminole, Florida 34642
Telephone (813) 397-9611
Securities registered pursuant to Section 12 (b) of the Act:
Common Shares with a par value Listed on
of $1.00 each American Stock Exchange
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 22, 1996, 8,133,552 common shares were outstanding, and the
aggregate market value of the registrant's common shares held by non-affiliates
was approximately $53.2 million (based on the closing price of the
registrant's common shares on the American Stock Exchange on said date).
Documents Incorporated by Reference:
Registrant's Proxy Statement to be filed on or before March 30, 1996, for
its Annual Meeting of Shareholders to be held May 3, 1996, is incorporated by
reference to furnish the information required by Items 10, 11, 12 and 13 of
Part III.
Exhibit index may be found on Page 22.
Page 1 of 95
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PART I
Item 1. Business
(a) Superior Surgical Mfg. Co., Inc. ("registrant" or the "Company") was
organized as a New York corporation in 1920. Registrant's
business has not changed in any significant way during the past
five years.
(b) Although registrant operates, for selling, promotional and other
reasons through various divisions, nevertheless there are no
distinct segments or lines of business; registrant's entire
business consists of the sale of uniforms and service apparel,
and miscellaneous products directly related thereto.
(c) Registrant manufactures and sells a wide range of apparel and
accessories for the medical and health fields as well as for
the industrial, commercial, leisure, and public safety markets.
Its principal products are:
1. Uniforms and service apparel for personnel of:
A) Hospitals and health facilities;
B) Hotels, commercial buildings, residential
buildings, and food service facilities;
C) General and special purpose industrial uses;
D) Commercial enterprises (career apparel for banks,
airlines, etc.);
E) Public and private safety and security
organizations;
F) Miscellaneous service uses.
2. Miscellaneous products directly related to:
A) Uniforms and service apparel specified
above (e.g. operating room masks, boots, and
sheets);
B) Linen suppliers and industrial launderers,
to whom a substantial portion of the registrant's
uniforms and service apparel are sold; such
products being primarily industrial laundry bags.
Uniforms and service apparel account for 90-95% of total sales
and revenues; no single class of product listed above as a
miscellaneous product of the registrant accounts for more than 10% of
total sales and revenues.
Registrant competes with national and regional manufacturers and
also with local firms in most major metropolitan areas. Industry
statistics are not available, but the registrant believes that it is
one of the leading suppliers of garments to hospitals and industrial
clean rooms, hotels and motels, food service establishments and
uniforms to linen suppliers. Registrant experiences competition
primarily in the areas of product development, styling and pricing.
Registrant competes with more than three dozen firms including
divisions of larger corporations. The nature and degree of
competition varies with the customer and market where it occurs.
I-1 Page 2 of 95
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Registrant has a substantial number of customers, the
largest of which accounted for no more than 4% of registrant's
1995 sales. Although registrant at all times has a
substantial backlog of orders, registrant does not consider
this significant since its backlog of orders at any time
consists primarily of recurrent firm orders being processed
and filled. Registrant normally completes shipments of orders
from stock between 1 and 2 weeks after their receipt. As of
February 29, 1996, the backlog of all orders was approximately
$7,300,000, compared to approximately $9,300,000 a year
earlier.
Registrant markets itself to its customers as a "stock
house". Therefore, registrant at all times carries
substantial inventories of raw materials (principally piece
goods) and finished garments which requires substantial
working capital. Registrant's principal raw materials are
textile products, generally available from a number of
sources.
While registrant owns and uses several trademarks, its
mark "Fashion Seal Uniforms" (presently registered to August
7, 2007, subject to renewal) is important since more than 50%
of registrant's products are sold under that name. In view of
the nature of registrant's business, compliance with Federal,
state, or local laws regulating the discharge of materials
into the environment, or otherwise relating to the protection
of the environment, has had no material effect upon its
operations or earnings. Substantially all of registrant's
business is non-seasonal in nature. The registrant has
approximately 1,900 employees.
Item 2. Properties
The Company has an ongoing program designed to maintain and improve its
facilities. Generally, all Properties are in satisfactory condition. The
Company's Properties are currently fully utilized (except as otherwise noted),
and have aggregate productive capacity to meet registrant's present needs as
well as those of the foreseeable future. The material manufacturing locales
are rented for nominal amounts due to cities providing incentives for
manufacturers to locate in their area - all such properties may be purchased
for nominal amounts. As a result, it is believed that the subject lease
expirations and renewal terms thereof are not material.
(a) Seminole, Florida - Plant of approximately 60,000 square feet owned
by the registrant; used as principal administrative
office and for warehousing and shipping, as well as the
corporate design center.
(b) Eudora, Arkansas - Plant of approximately 217,000 square feet,
partially leased from the City of Eudora under lease
requiring payment of only a nominal rental; used for
manufacturing, warehousing, and shipping.
(c) Leesburg, Georgia - Plant of approximately 85,000 square feet, leased
from Development Authority of Leesburg, Georgia under
lease requiring payment of only a nominal rental; used for
manufacturing, warehousing, and shipping.
(d) Lake Village, Arkansas - Plant of approximately 35,000 square feet,
leased the City of Lake Village under lease requiring
payment of only a nominal amount; used for manufacturing.
(e) Tampa, Florida - Plant of approximately 111,000 square feet, owned
by the registrant; used for regional administrative
offices, warehousing, shipping, and small retail operation.
(f) Miami, Florida - Plant of approximately 9,000 square feet, leased
from private owners under a lease expiring in 1997;
used for regional sales office, warehousing, shipping, and
small retail operation.
I-2 Page 3 of 95
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(g) McGehee, Arkansas - Plant of approximately 26,000 square feet, leased from
the City of McGehee under lease requiring payment of only a nominal
rental; used for manufacturing.
(h) Memphis, Tennessee - Plant of approximately 4,000 under lease expiring
2002; used for warehousing, square feet, leased from private owners
shipping and retail sales.
(i) Miscellaneous -
New Orleans, Louisiana, sales office - leased; Burbank,
California, sales office - leased; Las Vegas, Nevada,
warehouse and sales office - leased; Atlanta, Georgia,
warehouse and sales office - leased; San Antonio, Texas, sales
office - leased; Yazoo City, Mississippi, used for
manufacturing - leased; Hamburg, Arkansas, used for
manufacturing - owned; Delhi, Louisiana, used for
manufacturing - leased; Lexington, Mississippi, used for
manufacturing - owned; Tallulah, Louisiana, used for
manufacturing - leased; Pine Bluff, Arkansas, used for
manufacturing - owned.
Item 3. Legal Proceedings
As previously reported, the Company has been a target of a federal
criminal investigation relating to a previously reported dispute involving
alleged false statements and false claims purportedly made in connection with
contracts ostensibly awarded by the U. S. Department of Veterans Affairs. The
investigation has also evaluated actions by agents of the Company in connection
with the matter, including those of Gerald M. Benstock, a Director of the
Company. A former vice president of the Company has entered into a plea
agreement with federal authorities in connection with this matter; the specific
terms and conditions of which are not known to the Company. Federal
authorities have also conducted a civil investigation of the Company relating
to these matters. The dispute does not involve the integrity of the Company's
products.
The Company has reached tentative agreements with the Department of
Justice and the United States Attorney's Office in Tampa, Florida, to resolve
these previously announced disputes. The tentative agreements are subject to
additional approvals within the government and by the court. If finalized, the
agreements will resolve the disputes and criminal and civil investigations of
the Company arising from the VA contracts. The agreements provide for a
$6,200,000 payment to settle civil and contractual disputes and a $300,000 fine
coupled with a guilty plea by the Company for one count for a violation of the
Federal False Statements Act. The Company is not certain whether or not a
previously terminated officer will be charged in connection with the matter.
However, upon finalization of the agreements, the investigations are expected
to be concluded with none of the Company's existing officers or directors being
charged. The Company is in active discussions with the Department of Veterans
Affairs (formerly the Veterans Administration) with regard to the Company's
ability to receive future Federal contracts and other benefits. Management
expects that no restrictions will be placed on the Company upon finalization of
the agreements and resulting plea. The Company charged $4,250,000, or
approximately $.51 per share against its earnings in the fourth quarter of 1995
in anticipation of the dispute settlement. Management is not aware of any
additional charges that may result should a finalization of the settlement
occur.
While there can be no assurances, the Company believes the settlement will
be finalized. Should settlement not occur, the Company will vigorously assert
specific defenses in the matter. However, in such event, the Company is unable
to estimate the outcome or the potential effect on the Company.
Additionally, in the event the settlement is not effected and the Company
is indicted or convicted on criminal charges, or if significant civil damages
are pursued, certain collateral consequences would be likely to result, such as
suspension or debarment from the award of future federal government contracts.
The Company believes that a suspension or debarment in connection with federal
government contracts would not have a material adverse effect on the Company;
however, such action may also impede the Company's ability to receive certain
contracts awarded under various federal grant and other non-procurement
programs. The precise impact of any potential exclusion under various federal
grant and other non-procurement programs is not clear.
I-3 Page 4 of 95
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Item 4. Submission of Matters to a Vote of Security Holders
(a) None
PART II
Item 5. Market Price of and Dividends on Registrant's Common Equity and
Related Stockholder Matters.
The principal market on which registrant's common shares are
traded is the American Stock Exchange; said shares have also
been admitted to unlisted trading on the Midwest Stock Exchange.
The table below presents, for registrant's common shares,
dividend information and high and low sales prices as reported
in the consolidated transaction reporting system of the
American Stock Exchange.
QUARTER ENDED
---------------------------------------------------------------------------------------
1995 1994
------------------------------------------ -----------------------------------------
Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31
Common Shares: ------- ------- -------- ------- ------- ------- -------- -------
High $14-3/4 $13 $11 $10-3/8 $16 $14-1/2 $15-1/8 $15-1/8
Low $10-3/4 $10-3/4 $9-1/2 $ 8-3/4 $13-5/8 $12-3/8 $11-3/4 $12-3/8
Dividends (total
for 1995-$.36;
1994-$.32) $ .09 $ .09 $ .09 $ .09 $ .08 $ .08 $ .08 $ .08
Long-term debt agreements of the registrant include covenants which, among
other things, restrict dividends payable. Under the most restrictive debt
agreement, retained earnings of approximately $9,630,000 were available at
December 31, 1995 for declaration of dividends. Registrant expects that, so
long as earnings and business conditions warrant, it will continue to pay
dividends and that the amount thereof, as such conditions permit, and as the
Directors approve, will increase from time to time.
On March 22, 1996, registrant had 567 shareholders of record and the
closing price for registrant's common shares on the American Stock Exchange was
$10 per share.
I-4, II-1 Page 5 of 95
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Item 6.
SELECTED FINANCIAL DATA
Years Ended December 31, 1995 1994 1993 1992 1991
------------ ------------ ------------ ------------ ------------
Net sales ........................ $135,197,798 $135,067,397 $130,126,690 $128,665,516 $117,502,780
------------ ------------ ------------ ------------ ------------
Costs and expenses:
Cost of goods sold ............ $ 91,169,728 $ 89,308,729 $ 87,280,624 $ 85,250,260 $ 78,059,449
Selling and administrative
expenses .................... 30,162,203 28,537,946 27,835,521 26,964,446 25,779,480
Provision for dispute
settlement .................. 4,250,000 -- 2,250,000 --
Interest expense - net ........ 968,830 959,715 641,669 586,628 823,623
------------ ------------ ------------ ------------ ------------
$126,550,761 $118,806,390 $118,007,814 $112,801,334 $104,662,552
------------ ------------ ------------ ------------ ------------
Earnings before taxes on
income ......................... $ 8,647,037 $ 16,261,007 $ 12,118,876 $ 15,864,182 $ 12,840,228
Taxes on income .................. 4,885,000 6,180,000 4,415,000 5,950,000 4,815,000
------------ ------------ ------------ ------------ ------------
Net earnings ..................... $ 3,762,037 $ 10,081,007 $ 7,703,876 $ 9,914,182 $ 8,025,228
------------ ------------ ------------ ------------ ------------
Net earnings per common
share .......................... $ .45 $ 1.17 $ .89 $ 1.15 $ .94
============ ============ ============ ============ ============
Cash dividends per common
share .......................... $ .36 $ .32 $ .28 $ .25 $ .22
============ ============ ============ ============ ============
At year end:
Total assets .................. $106,133,637 $104,864,385 $ 87,168,003 $ 80,585,153 $ 74,470,776
------------ ------------ ------------ ------------ ------------
Long-term debt ................ $ 18,000,000 $ 18,600,000 $ 4,200,000 $ 4,955,000 $ 7,110,385
------------ ------------ ------------ ------------ ------------
Working capital ............... $ 55,081,842 $ 64,295,804 $ 53,096,945 $ 51,353,415 $ 47,873,560
------------ ------------ ------------ ------------ ------------
Shareholders' equity .......... $ 69,517,878 $ 70,937,920 $ 68,568,495 $ 63,082,410 $ 54,659,128
------------ ------------ ------------ ------------ ------------
=============================================================================================================
Item 7.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
OPERATIONS: Net sales for 1993 increased by 1% over 1992, due to the
continuation of new uniform programs (the Company manufactures and sells a wide
range of uniforms, career apparel and accessories for the hospital and
healthcare fields; hotels; fast food and other restaurants; and public safety,
industrial, transportation and commercial markets) and new customers for
non-health care products offset by the uncertain and sluggish healthcare market
which negatively affected those sales in 1993. Sales increased by 4% in 1994
over 1993 due to increased demand, resulting principally from a continuation of
those factors increasing sales in 1993. Sales in 1995 were essentially the same
as those in 1994, which the Company believes were primarily due to general
business conditions in the market in which the Company sold in 1995.
As a percent of sales, cost of goods sold were 67.4% in 1995, 66.1% in 1994 and
67.1% in 1993. The increases in 1993 and 1995 were due to increased costs and
the inability to raise sales prices sufficiently to cover increased costs.
Selling and administrative expenses increased by 6% in 1995 and by 3% in each
of 1994 and 1993. The increases were attributable to increases in costs. As a
percentage of sales, selling and administrative expenses have not changed
significantly over the past several years and no material change is expected in
1996.
The total of the provision for dispute settlement in the amount of $2,250,000
in 1993 and $4,250,000 in 1995 represent the sum of the payment to be made
under tentative agreements with the Department of Justice and the United States
Attorney's Office in Tampa, Florida to resolve the previously-announced dispute
with the federal government arising out of certain contractual relations. (See
Note 11 of Notes to Financial Statements.)
Interest expense as a percentage of sales was 0.7% in 1995 and 1994; it was
0.5% in 1993. The reduction in 1993 as a percentage of sales was principally
due to reduced borrowings by the Company.
The effective income tax rate in 1995 was 56.5%; in 1994, it was 38.0% and in
1993, it was 36.4%. Included in the 1995 calculations is the non-deductible
portion of the dispute charge. The effective tax rate for 1995 with-
II-2 Page 6 of 95
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (cont'd)
out this charge would have been 37.9%. Included in the income tax provision for
1993 is the effect of recalculating the effective income tax rate for 1993,
based on the Revenue Reconciliation Act of 1993, which raised corporate income
tax rates retroactive to January 1, 1993. Also included is the adjustment to
the deferred income tax provision necessary to comply with the Financial
Accounting Standards Board Statement No. 109 (FAS No. 109), requiring deferred
tax calculations on the liability method. The aggregate effect of these changes
was to decrease the income tax provision and increase net earnings for 1993 by
approximately $.02 per share.
In 1995, the Company showed net income (after taxes) of 2.8% of sales, with a
return of 5.4% on average equity; for 1994, net income was 7.5% of sales, with
a return of 14.5% on average equity, while for 1993, the corresponding figures
were 5.9% and 11.7%.
LIQUIDITY AND CAPITAL RESOURCES: The Company uses a number of standards for its
own purposes in measuring its liquidity: working capital, profitability ratios;
long-term debt as a percentage of long-term debt and equity, and activity
ratios. In its computations, as in this report, all inventory figures are on a
FIFO basis.
The working capital of the Company in 1995 was $55,081,842 and the working
capital ratio 4.2:1; for 1994, it was $64,295,804 and the ratio 6.3:1; while
for 1993, the figures were $53,096,945 and 5.8:1. The Company has operated
without hindrance or restraint with its present working capital, believing that
income generated from operations and outside sources of credit, both trade and
institutional, are more than adequate.
In 1995, the Company's percentage of long-term debt to long-term debt and
equity was 20.6%; in 1994, it was 20.8% and in 1993, it was 5.8%.
The Company has an on-going capital expenditure program designed to maintain
and improve its facilities. Capital expenditures were approximately $9,750,000,
$9,100,000 and $6,800,000 in the years 1995, 1994 and 1993, respectively.
Projected capital expenditures for 1996, while different from those of the last
several years, are expected to be lower in 1996 than in 1995 or 1994. The
Company at all times evaluates its capital expenditure programs in light of
prevailing economic conditions.
In 1993, the Company's cash and certificates of deposit balance increased by
approximately $400,000 due to a decelerating rate of increase in accounts
receivable and inventories compared to 1992, increases in depreciation, offset
by a decrease in net earnings and increases in capital expenditures. In 1994,
the Company's cash and certificates of deposit balance increased by
approximately $8,200,000, principally due to new borrowings in the amount of
$15,000,000 offset by the repurchase of 550,000 shares of its common stock for
an aggregate consideration of $6,765,000. In 1995, the Company's cash and
certificates of deposit balance decreased by approximately $5,800,000,
principally due to capital expenditures, expenditures in financing activities
(dividends and repurchase of 230,000 shares of its common stock) offset by cash
flows from operating activities.
As of December 31, 1995, under its existing revolving credit agreement, the
Company had $9,000,000 available to it. In addition, under the most restrictive
terms of its agreements with its lenders, the Company could avail itself of
$6,000,000 in short-term credit (see Note 4 of Notes to Financial Statements).
The revolving credit agreement and the agreements with Massachusetts Mutual
Life Insurance Company contain restrictive provisions concerning minimum
working capital ($20,000,000), debt to net worth ratios, other borrowing,
capital expenditures, rental commitments, tangible net worth ($55,000,000),
working capital ratio (2.5:1) and payment of dividends. On December 31, 1995,
under the most restrictive terms of the debt agreements, retained earnings of
approximately $9,630,000 were available for declaration of dividends. The
Company is in full compliance with all terms, conditions and covenants of the
various credit agreements. On January 31, 1996, the Company entered into a
7-year Credit Agreement, which made available to the Company up to $10,000,000
for 4 years on a revolving credit basis and thereafter for 3 years as a term
loan with installment repayments of principal. The new credit agreement, which
replaces the agreement entered into December 1, 1990, is written with
substantially the same terms and conditions as the terminated agreement. With
funds from such credit facility, anticipated cash flows generated from
operations and other available credit sources readily available, the Company
believes for the foreseeable future that its liquidity is satisfactory, its
working capital adequate and its capital resources sufficient for funding its
ongoing capital expenditure program and its operations, including planned
expansion.
Page 7 of 95
II-3
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Item 8 - Financial Statements and Supplementary Data
SUPERIOR SURGICAL MFG. CO., INC.
Statements of Earnings
Years Ended December 31, 1995, 1994 and 1993
1995 1994 1993
------------ ------------ ------------
Net sales .......................................... $135,197,798 $135,067,397 $130,126,690
------------ ------------ ------------
Costs and expenses:
Cost of goods sold .............................. $ 91,169,728 $ 89,308,729 $ 87,280,624
Selling and administrative expenses ............. 30,162,203 28,537,946 27,835,521
Provision for dispute settlement ................ 4,250,000 -- 2,250,000
Interest expense - net .......................... 968,830 959,715 641,669
------------ ------------ ------------
$126,550,761 $118,806,390 $118,007,814
------------ ------------ ------------
Earnings before taxes on income .................... $ 8,647,037 $ 16,261,007 $ 12,118,876
Taxes on income .................................... 4,885,000 6,180,000 4,415,000
------------ ------------ ------------
Net earnings ....................................... $ 3,762,037 $ 10,081,007 $ 7,703,876
============ ============ ============
Net earnings per common share ...................... $ .45 $ 1.17 $ .89
============ ============ ============
Dividends per common share ......................... $ .36 $ .32 $ .28
============ ============ ============
- -------------------------------------------------------------------------------------------------
Statements of Shareholders' Equity
Years Ended December 31, 1995, 1994 and 1993
Additional Total
Common Paid-In Retained Shareholders'
Shares Capital Earnings Equity
------------ ------------- ------------ ------------
Balance, January 1, 1993 ........................... $ 8,678,352 $ 115,138 $ 54,288,920 $ 63,082,410
Net earnings .................................... 7,703,876 7,703,876
Common shares issued upon exercise
of options ...................................... 24,900 191,456 216,356
Cash dividends declared ($.28 per share) ........ (2,434,147) (2,434,147)
------------ ------------ ------------ ------------
Balance, December 31, 1993 ......................... $ 8,703,252 $ 306,594 $ 59,558,649 $ 68,568,495
Net earnings .................................... 10,081,007 10,081,007
Common shares issued upon exercise
of options ...................................... 210,300 1,604,894 1,815,194
Purchase and retirement of common shares ........ (550,000) (109,817) (6,105,183) (6,765,000)
Cash dividends declared ($.32 per share) ........ (2,761,776) (2,761,776)
------------ ------------ ------------ ------------
Balance, December 31, 1994 ......................... $ 8,363,552 $ 1,801,671 $ 60,772,697 $ 70,937,920
Net earnings .................................... 3,762,037 3,762,037
Purchase and retirement of common shares ........ (230,000) (49,541) (1,912,359) (2,191,900)
Cash dividends declared ($.36 per share) ........ (2,990,179) (2,990,179)
------------ ------------ ------------ ------------
Balance, December 31, 1995 ......................... $ 8,133,552 $ 1,752,130 $ 59,632,196 $ 69,517,878
============ ============ ============ ============
See Notes to Financial Statements.
11-4 Page 8 of 95
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SUPERIOR SURGICAL MFG. CO., INC.
Balance Sheets
December 31, 1995 and 1994
ASSETS
CURRENT ASSETS
1995 1994
------------- ------------
Cash and certificates of deposit ......................................................... $ 5,421,553 $ 11,233,700
Accounts receivable, less allowance for doubtful accounts of $250,000 .................... 24,783,217 23,356,474
Inventories .............................................................................. 41,089,948 40,991,963
Prepaid expenses and other current assets ................................................ 1,092,883 875,132
------------ ------------
TOTAL CURRENT ASSETS ................................................................... $ 72,387,601 $ 76,457,269
PROPERTY, PLANT AND EQUIPMENT ............................................................... 30,734,584 26,234,749
EXCESS OF COST OVER FAIR VALUE OF ASSETS ACQUIRED ........................................... 822,926 827,577
OTHER ASSETS ................................................................................ 2,188,526 1,344,790
------------ ------------
$106,133,637 $104,864,385
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable ........................................................................ $ 6,630,608 $ 7,471,452
Accrued expenses ........................................................................ 3,061,018 3,126,813
Liability for dispute settlement ........................................................ 6,500,000 -
Taxes on income ......................................................................... 514,133 963,200
Current portion of long-term debt ....................................................... 600,000 600,000
------------ ------------
TOTAL CURRENT LIABILITIES .............................................................. $ 17,305,759 $ 12,161,465
LONG-TERM DEBT .............................................................................. 18,000,000 18,600,000
LIABILITY FOR DISPUTE SETTLEMENT ............................................................ - 2,250,000
DEFERRED INCOME TAXES ....................................................................... 1,310,000 915,000
SHAREHOLDERS' EQUITY:
Preferred stock, $1 par value - authorized 300,000 shares (none issued) ................. $ - $ -
Common stock, $1 par value - authorized 50,000,000 shares, issued and
outstanding 8,133,552 and 8,363,552, respectively ...................................... 8,133,552 8,363,552
Additional paid-in capital .............................................................. 1,752,130 1,801,671
Retained earnings ....................................................................... 59,632,196 60,772,697
------------ ------------
TOTAL SHAREHOLDERS' EQUITY ............................................................. $ 69,517,878 $ 70,937,920
------------ ------------
$106,133,637 $104,864,385
============ ============
See Notes to Financial Statements.
II-5 Page 9 of 95
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SUPERIOR SURGICAL MFG. CO., INC.
Statements of Cash Flows
Years Ended December 31, 1995, 1994, and 1993
1995 1994 1993
------------ ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings ........................................................... $ 3,762,037 $ 10,081,007 $ 7,703,876
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization ...................................... 3,748,341 2,864,847 2,503,726
Liability for dispute settlement ................................... 4,250,000 - 2,250,000
Deferred income taxes .............................................. 395,000 (130,000) (625,000)
Changes in assets and liabilities:
Accounts receivable .............................................. (1,426,743) (2,506,295) (532,998)
Inventories ...................................................... (97,985) (1,358,970) (773,143)
Prepaid expenses and other current assets ........................ (217,751) (186,864) (257,826)
Accounts payable ................................................. (840,844) 331,988 567,010
Accrued expenses ................................................. (65,795) 531,854 37,890
Taxes on income .................................................. (449,067) 348,115 (173,135)
------------ ------------ ------------
Net cash flows provided from operating activities ...................... $ 9,057,193 $ 9,975,682 $ 10,700,400
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment ............................. $ (9,745,755) $ (9,109,599) $ (6,808,039)
Carrying amount of property, plant and equipment disposals ............. 1,502,230 887,499 82,944
Other assets ........................................................... (843,736) (83,313) (391,186)
------------ ------------ ------------
Net cash (used) in investing activities ................................ $ (9,087,261) $ (8,305,413) $ (7,116,281)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in long-term debt ............................................. $ - $ 15,000,000 $ 3,500,000
Reduction in long-term debt ............................................ (600,000) (755,000) (4,460,000)
Declaration of cash dividends .......................................... (2,990,179) (2,761,776) (2,434,147)
Proceeds received on exercise of stock options ......................... - 1,815,194 216,356
Common stock reacquired and retired .................................... (2,191,900) (6,765,000) -
------------ ------------ ------------
Net cash (used) provided in financing activities ....................... $ (5,782,079) $ 6,533,418 $ (3,177,791)
------------ ------------ ------------
Net (decrease) increase in cash and certificates of deposit .......... $ (5,812,147) $ 8,203,687 $ 406,328
Cash and certificates of deposit balance, beginning of year ............... 11,233,700 3,030,013 2,623,685
------------ ------------ ------------
Cash and certificates of deposit balance, end of year ..................... $ 5,421,553 $ 11,233,700 $ 3,030,013
============ ============ ============
See Notes to Financial Statements.
II-6 Page 10 of 95
11
SUPERIOR SURGICAL MFG. CO., INC.
Notes to Financial Statements
Years Ended December 31, 1995, 1994 and 1993
NOTE 1 - Summary of Significant Accounting Policies:
a) Business description
The Company manufactures and sells a wide range of apparel and accessories for
the medical and health fields as well as for the industrial, leisure and public
safety markets. Revenue recognition from the sale of products is recorded at
the time the finished goods are shipped.
b) Inventories
Inventories are stated at the lower of cost (first-in, first-out method) or
market.
c) Property, plant and equipment
Property, plant and equipment are stated at cost. Major renewals and
improvements are capitalized, while replacements, maintenance and repairs which
do not improve or extend the life of the respective assets are expensed
currently. Costs of assets sold or retired and the related accumulated
depreciation and amortization are eliminated from accounts and the net gain or
loss is reflected in the statement of earnings.
d) Excess of cost over fair value of assets acquired
Excess costs over fair value of assets acquired arising prior to 1972
(approximately $742,000) are being carried until such time as there may be
evidence of diminution of value or the term of existence of such value becomes
limited. The Company's policy is to amortize excess costs arising subsequent to
1971 between 20 and 40 years.
e) Depreciation and amortization
Plants and equipment are depreciated on the straight-line basis at 2-1/2% to 5%
for buildings, 2-1/2% to 20% for improvements, 10% to 20% for machinery,
equipment and fixtures and 20% to 33-1/3% for transportation equipment.
Leasehold improvements are amortized over the terms of the leases inasmuch as
such improvements have useful lives equivalent to the terms of the respective
leases.
f) Employee benefits
Pension plan costs are funded currently based on actuarial estimates, with
prior service costs amortized over 20 years. The Company has no post-retirement
benefit plans other than pensions.
g) Taxes on income
The Company computes taxes currently payable upon determination of taxable
income which differs from pre-tax financial statement income. Deferred taxes are
provided on this difference, primarily the effect of computing depreciation of
plant and equipment by accelerated methods for tax purposes and by the
straight-line method for financial reporting purposes. Included in the income
tax provision for 1993 is the effect of recalculating the effective income tax
rate for 1993, based on the Revenue Reconciliation Act of 1993, which raised
corporate income taxes retroactive to January 1, 1993. Also included is the
adjustment to the deferred income tax provision necessary to comply with
Financial Accounting Standards Board Statement No. 109 (FAS No. 109), requiring
deferred tax calculations on the liability method. The aggregate effect of these
changes was to decrease the income tax provision and increase net earnings for
1993 by approximately $.02 per share.
- --------------------------------------------------------------------------------
NOTE 2 - Inventories:
December 31,
-------------------------
1995 1994
----------- -----------
Finished goods ...................................... $24,783,647 $23,887,026
Work in process ..................................... 3,515,698 4,306,872
Raw materials ....................................... 12,790,603 12,798,065
----------- -----------
$41,089,948 $40,991,963
=========== ===========
The opening inventory used in computing cost of goods sold for 1994 was
$39,632,993. General and administrative costs capitalized to inventories are
not material.
- --------------------------------------------------------------------------------
NOTE 3 - Property, Plant and Equipment:
December 31,
-------------------------
1995 1994
----------- -----------
Land ............................................... $ 2,101,351 $ 1,102,886
Buildings, improvements and leaseholds ............. 10,611,343 12,408,158
Machinery, equipment and fixtures .................. 38,292,834 32,487,680
----------- -----------
$51,005,528 $45,998,724
Accumulated depreciation and amortization........... 20,270,944 19,763,975
----------- -----------
$30,734,584 $26,234,749
=========== ===========
Depreciation and amortization charges were $3,743,690, $2,860,007, and
$2,496,718 in 1995, 1994 and 1993, respectively.
Page 11 of 95
II-7
12
NOTE 4 - Long-Term Debt:
December 31,
-------------------------
1995 1994
----------- -----------
Note payable-bank, pursuant to revolving credit and term loan agreement ...... $ -- $ --
6.65% note payable to Massachusetts Mutual Life Insurance Company, due
$1,666,667 annually, 1997-2005 ............................................ 15,000,000 15,000,000
9.9% note payable to Massachusetts Mutual Life Insurance Company, due
$600,000 annually, 1996-2001 ............................................... 3,600,000 4,200,000
----------- -----------
$18,600,000 $19,200,000
Less payments due within one year included in current liabilities ............ 600,000 600,000
----------- -----------
$18,000,000 $18,600,000
=========== ===========
On December 1, 1990, the Company entered into an 8-year Credit Agreement which
made available to the Company up to $9,000,000 for 5 years on a revolving
credit basis and thereafter for 3 years as a term loan with installment
repayments of principal. Interest is payable at the prime rate of the lender
(8-1/2% at December 31, 1995) for funds borrowed in domestic currency and at
the lender's Eurodollar rate plus 1/2% for funds borrowed in the Eurodollar
market. The Company pays a 1/10% commitment fee per annum on funds not borrowed
during the 5 year revolving credit period. The debt due under the credit
agreement may be prepaid, in part or in full at any time without penalty; in
addition, any amount prepaid during the 5 year revolving credit term may be
reborrowed without penalty. The Credit Agreement also permits additional
unsecured short-term borrowing from banks up to $6,000,000 without any
"clean-up" requirements.
The Credit Agreement and the agreements with Massachusetts Mutual Life
Insurance Company contain restrictive provisions concerning minimum working
capital ($20,000,000), debt to net worth ratios, other borrowing, capital
expenditures, rental commitments, tangible net worth ($55,000,000), working
capital ratio (2.5:1), and payment of dividends. At December 31, 1995, under
the most restrictive terms of the debt agreements, retained earnings of
approximately $9,630,000 were available for declaration of dividends. The
Company is in full compliance with all terms, conditions and covenants of the
various credit agreements.
Principal payments on long-term obligations are $2,266,667 in each of the years
1997 through 2000.
On January 31, 1996, the Company entered into a 7 year Credit Agreement which
made available to the Company up to $10,000,000 for 4 years on a revolving
credit basis and thereafter for 3 years as a term loan with installment
repayments of principal. The new Credit Agreement, which replaces the agreement
entered into December 1, 1990, is written with substantially the same terms and
conditions as the terminated agreement.
- --------------------------------------------------------------------------------
NOTE 5 - Taxes on Income:
Aggregate income tax provisions (benefits) consist of the following:
1995 1994 1993
----------- ----------- -----------
Current:
Federal ..................................................... $ 3,865,000 $ 5,520,000 $ 4,340,000
State and local ............................................. 625,000 790,000 700,000
----------- ----------- -----------
$ 4,490,000 $ 6,310,000 $ 5,040,000
Deferred ....................................................... 395,000 (130,000) (625,000)
----------- ----------- -----------
$ 4,885,000 $ 6,180,000 $ 4,415,000
=========== =========== ===========
The difference between the total statutory Federal income tax rate and the
actual effective tax rate is accounted for as follows:
1995 1994 1993
---- ---- ----
Statutory Federal income tax rate .............................. 34.0% 34.5 % 34.2 %
State and local income taxes, net of Federal income tax benefit 3.2% 3.0 3.2
FAS No. 109 implementation ..................................... - - (1.3)
Non deductible dispute settlement costs ........................ 18.7% - -
Other items .................................................... 0.6% 0.5 0.3
---- ---- ----
Effective tax rate ............................................. 56.5% 38.0 % 36.4 %
===== ====== ======
II-8 Page 12 of 95
13
NOTE 6 - Pension Plans:
Noncontributory qualified defined benefit pension plans, providing for normal
retirement at age 65, cover all eligible employees (as defined). Periodic
benefit payments on retirement are determined based on a fixed amount applied
to service or determined as a percentage of earnings prior to retirement.
Pension plan assets for retirement benefits consist primarily of fixed income
securities and common stock equities.
Net periodic pension cost for 1995, 1994 and 1993 included the following
components:
1995 1994 1993
----------- ----------- -----------
Service cost - benefits earned during the period .......... $ 651,000 $ 640,000 $ 687,000
Interest cost on projected benefit obligation ............. 960,000 824,000 865,000
Actual (return) loss on assets ............................ (2,107,000) 199,000 (1,397,000)
Net amortization and deferral ............................. 1,593,000 (970,000) 780,000
Effect of settlement distributions ........................ - - (15,000)
----------- ----------- -----------
Net periodic pension cost ................................. $ 1,097,000 $ 693,000 $ 920,000
=========== =========== ===========
Assumptions used in the pension accounting (one corporate plan and four
plant/factory plans) for the three years ended December 31, 1995 were:
Long Term Rate
Discount Rate of Return Salary Scale
--------------- -------------------- ----------------
Corp. Plants Corp. Plants Corp. Plants
----- ------ ----- ------ ----- ------
1993 7.00% 7.50% 8.00% 8.00% 6.00% N/A
1994 8.00% 8.00% 8.00% 8.00% 6.00% N/A
1995 7.00% 7.00% 8.00% 8.00% 4.50% N/A
The following table sets forth the plans' funded status and amounts recognized
in the Company's balance sheets at December 31, 1995 and 1994, for its pension
plans:
December 31, 1995 December 31, 1994
----------------------------- ------------------------------
Assets Exceed Accumulated Assets Exceed Accumulated
Accumulated Benefits Accumulated Benefits
Benefits Exceed Assets Benefits Exceed Assets
------------- ------------- ------------- --------------
Actuarial present value of benefit obligations:
Vested benefit obligation ............................... $ (7,529,000) $ (3,960,000) $ (5,101,000) $ (2,838,000)
============ ============ ============ ============
Accumulated benefit obligation .......................... $ (7,812,000) $ (4,010,000) $ (5,405,000) $ (2,874,000)
============ ============ ============ ============
Projected benefit obligation ............................ $(10,197,000) $ (4,358,000) $ (8,158,000) $ (2,874,000)
Plan assets at fair value .................................. 9,192,000 3,113,000 7,742,000 2,362,000
------------ ------------ ------------ ------------
Projected benefit obligation
over plan assets ........................................ $ (1,005,000) $ (1,245,000) $ (416,000) $ (512,000)
Unrecognized net (gain) or loss ............................ (1,155,000) 289,000 (564,000) 122,000
Prior service cost not yet recognized in net
periodic pension cost ................................... 2,052,000 734,000 917,000 177,000
Unrecognized net (asset) obligation at date of
initial application ..................................... - 231,000 (58,000) 284,000
Adjustment required to recognize minimum
liability ............................................... - (906,000) - (583,000)
------------ ------------ ------------ ------------
Prepaid pension cost (pension liability) ................... $ (108,000) $ (897,000) $ (121,000) $ (512,000)
============ ============ ============ ============
II-9 Page 13 of 95
14
NOTE 7 - Quarterly Results for 1993, 1994 and 1995:
Quarter Ended
----------------------------------------------------------
March 31, June 30, September 30, December 31,
1993 1993 1993 1993
------------ ------------ ------------ -------------
(Unaudited)
Net sales ......................................... $ 31,578,095 $ 33,751,918 $ 32,382,493 $ 32,414,184
------------ ------------ ------------ ------------
Gross profit ...................................... $ 10,639,493 $ 11,205,813 $ 10,362,782 $ 10,637,978
------------ ------------ ------------ ------------
Earnings before taxes on income ................... $ 3,585,072 $ 4,001,685 $ 3,328,443 $ 1,203,676
------------ ------------ ------------ ------------
Net earnings ...................................... $ 2,465,072 $ 2,506,685 $ 1,993,443 $ 738,676
============ ============ ============ ============
Net earnings per common share ..................... $ .28 $ .29 $ .23 $ .09
============ ============ ============ ============
Dividends per common share ........................ $ .07 $ .07 $ .07 $ .07
============ ============ ============ ============
Average outstanding shares ........................ 8,686,233 8,691,775 8,692,413 8,699,593
============ ============ ============ ============
Quarter Ended
----------------------------------------------------------
March 31, June 30, September 30, December 31,
1994 1994 1994 1994
------------ ------------ ------------ -------------
(Unaudited)
Net sales ......................................... $ 31,907,441 $ 35,873,454 $ 33,247,093 $ 34,039,409
------------ ------------ ------------ ------------
Gross profit ...................................... $ 10,591,394 $ 12,050,846 $ 11,312,800 $ 11,803,628
------------ ------------ ------------ ------------
Earnings before taxes on income ................... $ 3,209,622 $ 4,598,653 $ 3,971,762 $ 4,480,970
------------ ------------ ------------ ------------
Net earnings ...................................... $ 1,989,622 $ 2,853,653 $ 2,461,762 $ 2,775,970
============ ============ ============ ============
Net earnings per common share ..................... $ .23 $ .32 $ .29 $ .33
============ ============ ============ ============
Dividends per common share ........................ $ .08 $ .08 $ .08 $ .08
============ ============ ============ ============
Average outstanding shares ........................ 8,818,554 8,897,552 8,509,791 8,363,552
============ ============ ============ ============
Quarter Ended
----------------------------------------------------------
March 31, June 30, September 30, December 31,
1995 1995 1995 1995
------------ ------------ ------------ -------------
(Unaudited)
Net sales ......................................... $ 34,116,921 $ 33,045,056 $ 33,267,467 $ 34,768,354
------------ ------------ ------------ ------------
Gross profit ...................................... $ 11,430,126 $ 10,969,725 $ 11,045,624 $ 10,582,595
------------ ------------ ------------ ------------
Earnings (loss) before taxes on income ............ $ 3,601,317 $ 3,243,626 $ 3,246,434 $ (1,444,340)
------------ ------------ ------------ ------------
Net earnings (loss) ............................... $ 2,231,317 $ 2,013,626 $ 2,011,434 $ (2,494,340)
============ ============ ============ ============
Net earnings (loss) per common share .............. $ .27 $ .24 $ .24 $ (.30)
============ ============ ============ ============
Dividends per common share ........................ $ .09 $ .09 $ .09 $. 09
============ ============ ============ ============
Average outstanding shares ........................ 8,363,552 8,363,552 8,363,552 8,193,552
============ ============ ============ ============
The independent certified public accountants made a limited review of the 1993,
1994 and 1995 quarterly financial information in accordance with standards
established by the American Institute of Certified Public Accountants. Such
review was substantially less in scope than an examination in accordance with
generally accepted auditing standards, the objective of which is the expression
of opinion regarding the financial statements taken as a whole, and
accordingly, no such opinion was expressed.
II-10 Page 14 of 95
15
NOTE 8 - Stock Options:
In 1993 the Company adopted an Incentive Stock Option Plan under which options
on 1,500,000 shares were reserved for grant. All options under the Plan have or
will be granted at prices at least equal to the fair market value of the shares
on the date of grant. Options (all of which are exercisable at each respective
year end) granted to date under the Plan are exercisable in part or in full
within five years of grant date. Proceeds from the exercise of options are
credited to common stock to the extent of par value, and the balance is
credited to additional paid-in capital. A summary of option transactions
during the three years ended December 31, 1995 (including option transactions
from a 1983 Plan which expired in 1993) follows:
Option Prices
--------------------------------------------------------
No. of Range Per Market
Shares Share Total Price
-------- ------------------- ------------- ------------
Outstanding January 1, 1993 .............................. 575,600 $ 8.56 - $ 18.08 $ 7,653,862
Exercised.............................................. (24,900) $ 8.56 - $ 16.44 (216,356) $ 435,750
Cancelled.............................................. (6,000) $ 8.56 - $ 16.44 (82,875)
------- -------------
Outstanding December 31, 1993 ............................ 544,700 $ 8.56 - $ 18.08 $ 7,354,631
Granted................................................ 104,925 $ 13.75 - $ 15.13 1,451,794 $ 1,442,719
Exercised.............................................. (210,300) $ 8.56 - $ 9.47 (1,815,194) $ 3,032,588
Cancelled.............................................. (15,100) $ 13.75 - $ 16.44 (246,325)
------- -------------
Outstanding December 31, 1994 ............................ 424,225 $ 13.75 - $ 18.08 $ 6,744,906
Granted................................................ 145,400 $ 10.75 - $ 11.83 1,571,865 $ 1,563,050
Cancelled.............................................. (19,575) $ 10.75 - $ 16.44 (289,243)
------- -------------
Outstanding December 31, 1995 ............................ 550,050 $ 10.75 - $ 18.08 $ 8,027,528
======= =============
- --------------------------------------------------------------------------------
NOTE 9 - Rentals:
Aggregate rent expense, including month-to-month rentals, approximated
$567,000, $619,000, and $669,000 for the years ended December 31, 1995, 1994
and 1993, respectively. Long-term lease commitments, the last of which expire
in 2002, are not material.
- --------------------------------------------------------------------------------
NOTE 10- Earnings per Share:
Historical per share data is based on the weighted average number of shares
outstanding. The exercise of outstanding stock options would not have a
significant effect on earnings per share. The weighted average number of shares
outstanding during 1995, 1994 and 1993 was 8,320,703, 8,645,739 and 8,692,540,
respectively.
- --------------------------------------------------------------------------------
NOTE 11 - Dispute with Governmental Agency:
The Company has reached tentative agreements with the Department of Justice and
the United States Attorney's Office in Tampa, Florida, to resolve its
previously announced disputes with the federal government arising out of
certain contractual relations with the Veterans Administration from 1983 to
1992. The tentative agreements are subject to additional approvals within the
government and by the court. If finalized, the agreements will resolve the
disputes and the criminal and civil investigations of the Company arising from
the VA contracts. The agreements provide for a $6,200,000 payment to settle
civil and contractual disputes and a $300,000 fine coupled with a guilty plea
by the Company for one count for a violation of the Federal False Statements
Act. The Company is not certain whether or not a previously terminated officer
will be charged in connection with the matter. However, upon finalization of
the agreements, the investigations are expected to be concluded with none of
the Company's existing officers or directors being charged. The Company is in
active discussions with the Department of Veterans Affairs (formerly the
Veterans Administration) with regard to the Company's ability to receive future
federal contracts and other benefits. Management expects that no restrictions
will be placed on the Company as a result of the agreements and resulting plea.
The Company charged $4,250,000, or approximately $.51 per share against its
earnings in the fourth quarter of 1995 in anticipation of the dispute
settlement. Management is not aware of any additional charges that may result
should a finalization of the settlement occur.
II-11 Page 15 of 95
16
NOTE 12 - Accrued Expenses:
December 31,
-----------------------
1995 1994
---------- ----------
Salaries, wages, commissions and vacation pay.......... $1,348,561 $1,812,730
Other accrued expenses................................. 1,712,457 1,314,083
---------- ----------
$3,061,018 $3,126,813
========== ==========
NOTE 13 - Supplemental Information:
Year Ended December 31,
----------------------------------
1995 1994 1993
---------- ---------- ----------
Income taxes paid...................... $4,939,067 $5,961,885 $5,213,135
========== ========== ==========
Interest paid.......................... $1,411,805 $1,436,998 $ 680,083
========== ========== ==========
II-12 Page 16 of 95
17
SUPERIOR SURGICAL MFG. CO., INC.
INDEPENDENT AUDITORS' REPORT
Board of Directors and Shareholders
Superior Surgical Mfg. Co., Inc.
Seminole, Florida
We have audited the accompanying balance sheets of Superior Surgical Mfg. Co.,
Inc. as of December 31, 1995 and 1994, and the related statements of earnings,
shareholders' equity and cash flows for each of the three years in the period
ended December 31, 1995. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements 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 financial statements referred to above present fairly, in
all material respects, the financial position of Superior Surgical Mfg. Co.,
Inc. as of December 31, 1995 and 1994, and the results of its operations and
its cash flows for each of the three years in the period ended December 31,
1995, in conformity with generally accepted accounting principles.
/s/ DELOITTE & TOUCHE, LLP
- ----------------------------
Deloitte & Touche, LLP
Certified Public Accountants
Tampa, Florida
March 8, 1996
II-13 Page 17 of 95
18
PART II
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
NONE
PART III
Items 10, 11, Directors and Executive Officers; Executive Compensation;
12 and 13 Security Ownership of Management and others; Certain
Transactions.
Management's Proxy Statement to be filed on or before March 30, 1996 for the
Annual Meeting of Shareholders to be held May 3, 1996, is herein incorporated
by reference to furnish substantially all the information required by the above
items.
II-14, III-1 Page 18 of 95
19
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) 1. Financial Statements Page
The following financial statements of Superior Mfg. Co., Inc.
are included in Part II, Item 8:
Statements of earnings - years ended
December 31, 1995, 1994 and 1993 . . . . . . . . . . . . . II-4
Statements of shareholders' equity - years ended
December 31, 1995, 1994 and 1993 . . . . . . . . . . . . . II-4
Balance sheets - December 31, 1995 and 1994 . . . . . . . . II-5
Statements of cash flows - years ended
December 31, 1995, 1994 and 1993 . . . . . . . . . . . . . II-6
Notes to financial statements . . . . . . . . . . . . . . . II-7 to II-12
Opinion of independent certified public accountants . . . . II-13
(a) 2. Financial Statement Schedules
All schedules are omitted because they are not applicable, or
not required, or because the required information is included in the
financial statements or notes thereto.
(a) 3. Exhibits
Exhibit No.:
3.2 By-Laws of the Registrant filed as Exhibit
3.2 to the Registrant's 1992 Annual Report
on Form 10-K and incorporated herein by
reference.
4.1 Credit Agreement dated January 31, 1996,
between the Registrant and Chemical Bank. IV-5
4.2 Note Agreement dated January 5, 1994 between
the registrant and Massachusetts Mutual Life
Insurance Company filed with the Commission
as Exhibit 4.2 in registrant's 1994 Form 10-
Q for the three months ended March 31, 1994
which is hereby incorporated herein by
reference.
4.3 The Registrant, by signing this Registration
Statement, agrees to furnish the Commission
upon its request a copy of any instrument
which defines the rights of holders of long-
term debt of the Registrant and which
authorizes a total amount of securities not
in excess of 10% of the total assets of the
Registrant.
IV-1 Page 19 of 95
20
10.1 Description of the informal bonus plan for
officers of the Registrant filed as Exhibit
10 to the Registrant's 1992 Annual Report on
Form 10-K and incorporated herein by
reference.
10.2 1993 Incentive Stock Option Plan of the
Registrant filed as Exhibit 4.3 to the
Registrant's August 18, 1993 Registration
Statement on Form S-8 and incorporated
herein by reference.
10.3 1994 Superior Surgical Mfg. Co., Inc.
Supplemental Pension Plan filed as Exhibit
10.3 to the Registrant's 1994 Annual Report
on Form 10-K and incorporated herein by
reference.
13. Forms 10-Q for the first three quarters of
1995 - herein incorporated by reference to
Registrant's filings thereof with the
Securities and Exchange Commission.
23. Consent of independent accountants. IV-6
99. The information contained under the headings
"Directors and Executive Officers, Executive
Compensation";"Security Ownership of Certain
Beneficial Owners and Management"; and
"Certain Relationships and Related
Transactions" in the definitive Proxy
Statement of the Registrant to be used
in connection with the Registrant's 1996
Annual Meeting of Stockholders, to be filed
on or before March 30, 1996, is hereby
incorporated herein by reference.
(b) Reports on Form 8-K:
There were no reports on Form 8-K for the three months ended
December 31, 1995.
(c) See (a)3. above.
(d) None
IV-2 Page 20 of 95
21
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
SUPERIOR SURGICAL MFG. CO., INC.
/s/ Gerald M. Benstock
---------------------------------------
BY: Gerald M. Benstock
(Chairman and Chief Executive
Officer)
/s/ John W. Johansen
---------------------------------------
BY: John W. Johansen
(Chief Financial Officer and Principal
Accounting Officer, Sr. Vice President,
Treasurer and Secretary)
DATE: March 28, 1996
Pursuant to the requirements of the Securities 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 dates indicated:
/s/ Saul Schechter /s/ Alan D. Schwartz
- ------------------------------ ----------------------------------------
Saul Schechter, March 28, 1996 Alan D. Schwartz, March 28, 1996
(Director) (Director)
/s/ Manuel Gaetan /s/ Michael Benstock
- ------------------------------ ----------------------------------------
Manuel Gaetan, March 28, 1996 Michael Benstock, March 28, 1996
(Director) (Director)
/s/ Thomas K. Riden /s/ Peter Benstock
- ------------------------------ ----------------------------------------
Thomas K. Riden, March 28, 1996 Peter Benstock, March 28, 1996
(Director) (Director)
IV-3 Page 21 of 95
22
SUPERIOR SURGICAL MFG. CO., INC.
EXHIBIT INDEX
(a) 3. Exhibits
Exhibit No.:
- ------------
3.2 By-Laws of the Registrant filed as Exhibit 3.2 to the Registrant's 1992
Annual Report on Form 10-K and incorporated herein by reference.
4.1 Credit Agreement dated January 31, 1996, between the Registrant and
Chemical Bank. IV-5
4.2 Note Agreement dated January 5, 1994 between the registrant and
Massachusetts Mutual Life Insurance Company filed with the Commission as
Exhibit 4.2 in registrant's 1994 Form 10-Q for the three months ended
March 31, 1994 which is hereby incorporated herein by reference.
4.3 The Registrant, by signing this Registration Statement, agrees to furnish
the Commission upon its request a copy of any instrument which defines
the rights of holders of long-term debt of the Registrant and which
authorizes a total amount of securities not in excess of 10% of the total
assets of the Registrant.
10.1 Description of the informal bonus plan for officers of the Registrant
filed as Exhibit 10 to the Registrant's 1992 Annual Report on Form 10-K
and incorporated herein by reference.
10.2 1993 Incentive Stock Option Plan of the Registrant filed as Exhibit 4.3
to the Registrant's August 18, 1993 Registration Statement on Form S-8
and incorporated herein by reference.
10.3 1994 Superior Surgical Mfg. Co., Inc. Supplemental Pension Plan filed as
Exhibit 10.3 to the Registrant's 1994 Annual Report on Form 10-K and
incorporated herein by reference.
13. Forms 10-Q for the first three quarters of 1995 -- herein incorporated by
reference to Registrant's filings thereof with the Securities and
Exchange Commission.
23. Consent of independent accountants. IV-6
99. The information contained under the headings "Directors and Executive
Officers, Executive Compensation"; "Security Ownership of Certain
Beneficial Owners and Management"; and "Certain Relationships and Related
Transactions" in the definitive Proxy Statement of the Registrant to be
used in connection with the Registrant's 1996 Annual Meeting of
Stockholders, to be filed on or before March 30, 1996, is hereby
incorporated herein by reference.
IV-4 Page 22 of 95