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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended August 31, 1996 Commission file number 1-9967
--------------- ------
AMCAST INDUSTRIAL CORPORATION
(Exact name of registrant as specified in its charter)
OHIO 31-0258080
-------------------------------- ------------------------------
(State of Incorporation) (I.R.S. employer
identification no.)
7887 Washington Village Drive, Dayton, Ohio 45459
- --------------------------------------------------------------------------------
(Address of principal executive officers) (Zip Code)
291-7000 (Area Code 937)
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(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
------------------- -------------------
Common Shares, without par value New York Stock Exchange
Preferred Share Purchase Rights
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 and 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
---- ----
Aggregate market value of common stock, no par value, held by
non-affiliates of the registrant (assuming only for the purposes of this
computation that directors and officers may be affiliates) as of October 21,
1996--$163,163,072.
Number of common shares outstanding, without par value, as of October 21,
1996--8,618,491 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I, II and IV--Portions of Annual Report to Shareholders for the year
ended August 31, 1996.
Part III--Portions of Proxy Statement for the Annual Meeting of
Shareholders to be held on December 17, 1996 filed November 6, 1996.
Index to exhibits at page 16 of this report.
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PART I
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ITEM 1 - BUSINESS
- -----------------
Amcast Industrial Corporation, an Ohio corporation organized in 1869, and
its subsidiaries (called collectively "Amcast" or the "Company") are engaged in
the business of producing fabricated metal products, valves and controls, and
cast and tubular metal products, in a variety of shapes, sizes, and metals for
sale to end users directly and through sales representatives and distributor
organizations and to original equipment manufacturers. Manufacturing facilities
are located in six states, primarily in the eastern half of the United States.
The Company's business operations are conducted through three divisions and ten
wholly-owned subsidiaries. Its subsidiaries include Amcast Industrial Ltd., an
Ontario, Canada corporation; Elkhart Products Corporation (Elkhart), an Indiana
corporation; WheelTek, Inc., an Indiana corporation; Amcast Investment Services
Corporation (formerly Amcast Industrial Investment Corporation), a Delaware
corporation; Amcast Automotive, Inc., a Michigan corporation; Amcast Industrial
Financial Services, Inc., an Ohio corporation; Amcast Industrial Sales
Corporation, a U.S. Virgin Islands corporation; Flagg Brass, Inc., an Ohio
corporation; Amcast Casting Technologies, Inc., an Indiana Corporation and
Amcast Precision Products, Inc., a California corporation. Amcast Casting
Technologies, Inc. owns 60% of a jointly controlled partnership formed with
Izumi Industries, Ltd. of Japan.
The Company operates in two business segments--1) Flow Control Products
and (2) Engineered Components. Information concerning the net sales, operating
profit and identifiable assets of each segment for years 1994 through 1996
appears under "Business Segments" in the Notes to Consolidated Financial
Statements in the Company's Annual Report to Shareholders for the year ended
August 31, 1996, such information is incorporated herein by reference and is
filed as Exhibit 13.1 to this report. Amcast has no foreign manufacturing
operations and export sales to customers in foreign countries are not material.
FLOW CONTROL PRODUCTS
- ---------------------
The Flow Control Products segment (Flow Control) includes the business of
the Superior Valve division (Superior Valve), the Elkhart subsidiary, Flagg
Brass Inc., and Amcast Industrial Ltd. Superior Valve manufactures valves and
accessories used in air conditioning and refrigeration systems, and compressed
gas cylinder valves for the welding, specialty, carbonic, and medical gas
industries. Elkhart produces wrot copper fittings for use in residential and
commercial water systems and markets brass pipe fittings. Flagg Brass produces
brass pipe fittings for the marine and industrial markets. Amcast Industrial
Ltd. is the common Canadian marketing arm for Amcast's Flow Control segment
manufacturing units.
The Company's Flow Control business is a leading supplier of pipe
fittings for the industrial, commercial, and residential construction markets,
valves utilized in air conditioning and refrigeration systems, and industrial
compressed gas applications. These products are sold through distributors and
wholesalers. Shipments are made by truck from Company locations directly to
customers. The competition is comprised of a number of manufacturers of parts
for air conditioning, refrigeration, and plumbing systems, and valves and
controls. The Company believes that competition in this segment is based on a
number of factors including product quality, service, delivery, and value.
The Company is one of three major suppliers of copper and brass fittings
to the North American commercial and residential plumbing markets. Products are
sold primarily through
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ITEM 1 - BUSINESS (cont'd)
- -----------------
FLOW CONTROL PRODUCTS (cont'd)
- ---------------------
plumbing wholesalers, retail hardware stores and home centers and to original
equipment manufacturers and replacement parts distributors in the air
conditioning and commercial refrigeration business. Competition is based on
service levels, pricing and breadth of product offering. The Company's prime
competitors are Mueller Industries, Inc., a publicly owned company listed on the
New York Stock Exchange, and NIBCO Inc., a privately held company headquartered
in Elkhart, Indiana. Both Mueller Industries, Inc. and NIBCO Inc. may have total
financial resources greater than the Company's.
Most of the Flow Control business is based on customer purchase orders
for their current product requirements and such orders are filled from Company
inventory. Orders are not considered firm beyond a 90-day period.
See Properties at Item 2 of this report for information on the Company's
facilities which operate in this segment.
ENGINEERED COMPONENTS
- ---------------------
The Engineered Components segment produces cast and fabricated metal
products principally for sale to original equipment manufacturers in the
transportation, construction, air conditioning, refrigeration, and aerospace
industries. The Company's manufacturing processes involve the melting of raw
materials for casting into metal products having the configuration, flexibility,
strength, weight, and finish required for the customer's end use. The Company
also custom fabricates copper and aluminum tubular parts. The Company
manufactures products on a high-volume, medium-volume, and specialized basis and
its metal capabilities include aluminum, steel, brass, and copper. Products
manufactured by this segment include castings for suspension, air conditioning
and anti-lock braking systems, master cylinders, differential carriers and cast
aluminum wheels for use on automobiles and light trucks, and parts for use in
heating and air conditioning systems. The Company also designs and manufactures
close-tolerance aluminum and specialty steel investment castings and related
items for sale to aviation and aerospace companies. Delivery is mostly by truck
from Amcast locations directly to customers.
Amcast is not solely dependent on a single customer. However, a
significant portion of the Company's Engineered Components business is directly
or indirectly dependent on the major automobile manufacturers. The Company's net
sales to various divisions of General Motors Corporation in 1996 were $114.5
million. No other customer accounted for more than 10% of consolidated sales in
1996.
The Company is a leading supplier of aluminum automotive components and
aluminum wheels for automotive original equipment manufacturers in North
America. Competition in the automotive components industry is global with
numerous competitors. The basis of competition is generally design and
engineering capability, price and quality.
There are approximately 25 competitors in the aluminum automotive
component business serving the North American market. Principal competitors
include Alcoa, CMI International Inc., A-CMI, Stahl Specialty Company, Reliable
Castings Corporation and Kaiser Aluminum Corp., a subsidiary of MAXXAM Inc.,
some of which have significantly greater financial resources than the Company.
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ITEM 1 - BUSINESS (cont'd)
- -----------------
ENGINEERED COMPONENTS (cont'd)
- ---------------------
There are approximately 18 producers of aluminum wheels which service the
North American market. The largest of these are Superior Industries
International, Inc. and Hayes Wheels International, Inc.. The next tier of
suppliers includes the Company, Reynolds Metals Company, Alcoa and Enkie America
Inc. Some of the Company's competitors in the aluminum wheel business have
significantly greater financial resources than the Company.
The Company's non-aerospace business of the Engineered Components segment
is on a "blanket" order basis and is generally based on supplying a percentage
of the customer's annual requirements for a particular part. Customers issue
firm releases and shipping schedules each month against their blanket orders
depending on their current needs. As a result, order backlog varies from month
to month and is not considered firm beyond a 30-day period. Amcast believes that
price, product quality, and delivery are the principal bases of competition
within the industry.
The order backlog of the aerospace business was $11.2 million at August
31, 1996, and $19.6 million at August 31, 1995. The backlog at August 31, 1996,
is expected to result in revenue of $9.5 million during 1997.
See Properties at Item 2 of this report for information on the Company's
facilities which operate in this segment.
GENERAL INFORMATION
- -------------------
Raw materials essential to the business are purchased from suppliers
located in the general vicinity of each operating facility. Availability of
these materials is judged to be adequate. The Company does not anticipate any
material shortage that will alter production schedules during the coming year.
Aluminum and copper are basic commodities traded in international
markets. Changes in aluminum and copper costs are generally passed through to
the customer. Changes in the cost of aluminum are currently passed through to
the customer based on various formulas as is the custom in the segment of the
automotive industry the Company serves. Copper cost increases and decreases are
generally passed through to the customer in the form of price changes as
permitted by prevailing market conditions. The Company is unable to project
whether these costs will increase or decrease in the future. The Company's
ability to pass through any increased costs to the customer in the future will
be determined by market conditions at that time.
Amcast owns a number of patents and patent applications relating to the
design of its products. While Amcast considers, in the aggregate, these patents
are important to operations, it believes that the successful manufacture and
sale of its products generally depend more on the Company's technological
know-how and manufacturing skills.
Capital expenditures related to compliance with federal, state, and local
environmental protection regulations for 1997 and 1998 are not expected to be
material. Management believes that operating costs related to environmental
protection will not have a materially adverse effect on future earnings or the
Company's competitive position in the industry.
At August 31, Amcast employed approximately 2,600 persons in 1996, 2,400
in 1995, and 2,300 in 1994.
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ITEM 1 - BUSINESS (cont'd)
- -----------------
No material portion of Amcast's business is seasonal.
RECENT DEVELOPMENTS
- -------------------
None
ITEM 2 - PROPERTIES
- -------------------
The following table provides certain information relating to the Company's
principal facilities as of October 21, 1996:
SQUARE
FACILITY FOOTAGE USE
- ------------------------------ ------- ---------------------------------
Flow Control Products Segment
- -----------------------------
SUPERIOR VALVE DIVISION 105,600 High and low pressure specialty
Washington, Pennsylvania valve manufacturing plant,
warehouse, sales and general
offices
ELKHART PRODUCTS 222,000 Copper fittings manufacturing
CORPORATION SUBSIDIARY plant, warehouse, and sales and
Elkhart, Indiana general offices
Fayetteville, Arkansas 107,800 Copper fittings manufacturing
plant
AMCAST INDUSTRIAL LTD. 20,214 Distribution warehouse and branch
SUBSIDIARY sales office for Flow Control
Burlington, Ontario Canada Products
FLAGG BRASS, INC. SUBSIDIARY 250,000 Brass foundry, machining
Stowe, Pennsylvania operations, warehouse, and sales
and general offices
Engineered Components Segment
- -----------------------------
ELKHART PRODUCTS 105,748 Custom fabricated copper and
CORPORATION SUBSIDIARY aluminum tubular products
Geneva, Indiana manufacturing plant
AMCAST PRECISION 70,000 Aluminum and specialty steel
PRODUCTS, INC. SUBSIDIARY investment casting foundry
Rancho Cucamonga, California
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ITEM 2 - PROPERTIES (cont'd)
- -------------------
SQUARE
FACILITY FOOTAGE USE
- --------------------------- ------- ---------------------------------
BRAKE & CHASSIS DIVISION 133,000 High-volume, aluminum alloy
Cedarburg, Wisconsin permanent-mold foundry
Richmond, Indiana 97,300 High-volume, aluminum alloy
permanent-mold foundry
WHEELTEK, INC. SUBSIDIARY 139,788 Cast aluminum automotive wheels
Fremont, Indiana
Gas City, Indiana 152,000 Cast aluminum automotive wheels
SUSPENSION DIVISION 188,000 Cast, machined and assembled
Wapakoneta, Ohio aluminum suspension components.
AMCAST AUTOMOTIVE, INC. 8,840 Automotive component sales,
SUBSIDIARY product development and
Southfield, Michigan engineering center offices
Corporate
- ---------
CORPORATE CENTER 16,281 Executive and general offices
Dayton, Ohio
The land and building in Rancho Cucamonga, California, are leased under a
5-year lease, with a requirement that Amcast purchase the property at the fair
market price at the lease expiration in 1997. The Company is currently in the
process of exercising its purchase option. The land and building in Burlington,
Ontario, are leased under a 3-year lease expiring in 1998. The land in Richmond
and Gas City, Indiana is leased under 99 year leases, expiring in 2091. The
Corporate offices are being leased for five years expiring in 1998. The Amcast
Automotive offices are being leased for five years expiring in the year 2000,
with an option for a five year renewal. All other properties are owned by the
Company.
A portion of the land and building at Fayetteville, Arkansas is subject
to a mortgage in favor of Bank One, Dayton, NA, to secure the payment of a
$5,050,000 bond issue dated December 1, 1991, and maturing December 1, 2004.
The Company's operating facilities are in good condition and are suitable
for the Company's purposes. Utilization of capacity is dependent upon customer
demand. During 1996, productive capacity utilization ranged from 66% to 86%, and
averaged 78% of the Company's total capacity.
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ITEM 3 - LEGAL PROCEEDINGS
- --------------------------
Refer to "Commitments and Contingencies" in the Notes to Consolidated
Financial Statements of the Company's Annual Report to Shareholders for the year
ended August 31, 1996, Exhibit 13.1, page 191 herein.
The Company's Flagg Brass business resolved its labor negotiations with
the United Steelworkers of America. The National Labor Relations Board complaint
(Case No. 4-CA-23069) relating to these negotiations, was dismissed at the same
time.
Allied Signal, Inc. has brought a superfund private cost recovery and
contribution action against the Company in the United States District Court for
the Southern District of Ohio, Western Division, which is captioned
ALLIED-SIGNAL, INC. V. AMCAST INDUSTRIAL CORPORATION (Case No. C-3-92-013). The
action involves the Goldcamp Disposal Site in Ironton, Ohio. Allied-Signal has
taken the lead in remediating the site and has estimated that its total costs
for the remediation may reach $30 million. Allied is seeking a contribution from
the Company in an amount equal to 50 percent of the final remediation costs. A
trial in this proceeding was completed in February 1995, but no judgment is
anticipated until after certain post-trial proceedings are completed. The
Company believes its responsibility with respect to the Goldcamp Site is
limited, primarily due to the nature of the foundry sand waste it disposed of at
the site. The Company believes that if it has any liability at all in regard to
the Goldcamp Site, that liability would not be material to its financial
position or results of operations.
The lawsuit captioned PUBLIC INTEREST RESEARCH GROUP, INC. ET AL. V.
STANLEY G. FLAGG & CO., ET AL, filed in the United States District Court for the
Eastern District of Pennsylvania (Case No. 89-2137), was concluded by settlement
during the fiscal year. The terms of the settlement require the Company to
donate certain of its property, which is not currently in use or anticipated to
be used in the future by the Company in its operations, to charitable
organizations over a two-year period, and to pay legal expenses and costs
incurred by Pennpirg. The settlement does not have a material adverse effect on
the Company and its operations.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
None
ITEM 4A - EXECUTIVE OFFICERS OF REGISTRANT
- ------------------------------------------
John H. Shuey, age 50, has been President and Chief Executive Officer since
March 1995 and a Director since March 1994. Mr. Shuey was President and Chief
Operating Officer from December 1993 to March 1995. Mr. Shuey was Executive Vice
President from February 1991 to December 1993.
Thomas K. Walker, age 55, has been President of Amcast Automotive since
August 1995. From 1992 to 1995, Mr. Walker was President of ITT Automotive's
North American operations. Mr. Walker was also President of Allied Signal
Automotive Catalyst Co. in Tulsa, Oklahoma from 1985 to 1992.
Dennis A. Bertram, age 59, has been Senior Vice President, Operations of
Amcast Automotive since August 1995. From May 1992 until his recent appointment,
he was President and General Manager of the same group. Prior to that, he was
Vice President of Operations for WheelTek.
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ITEM 4A - EXECUTIVE OFFICERS OF REGISTRANT (cont'd)
- ------------------------------------------
J. Randall Caraway, age 45, has been President of Amcast Precision since
March 1991. From August 1990 to March 1991 he was Vice President/General Manager
of the Ontario Division. From 1988 to 1990 Mr. Caraway was President of
Coastcast in California. Prior to his role of President he was Vice President of
Operations of Coastcast.
Michael N. Powell, age 49, was appointed President of the Flow Control
Products Group, beginning May 1996. From April 1994 until his recent
appointment, he was Vice President/General Manager of Superior Valve Company.
Mr. Powell was President and Chief Operating Officer of Versa Technologies, Inc.
in Racine, Wisconsin from May 1991 to December 1993. Prior to that, he was a
Senior Vice President for Mark Controls Corporation in Skokie, Illinois.
Douglas D. Watts, age 51, has been Vice President, Finance since August
1994. From 1987 to August 1994 Mr. Watts held various financial management
positions with General Cable Corporation, of which the most recent post was Vice
President and Controller. Prior to that, he was Vice President, Finance and
Chief Financial Officer of LCP Chemicals and Plastics Inc., Edison, New Jersey.
William L. Bown, age 50, has been Vice President and Controller since June
1992. From November 1983 to May 1992 Mr. Bown was Controller of Worthington
Industries, Inc. in Columbus, Ohio.
Denis G. Daly, age 54, has been Vice President, General Counsel and
Secretary, since January 1990. From January 1986 to December 1989 he worked in
private practice at the law firm of Thompson, Hine, and Flory.
Robert C. Collevechio, age 44, was appointed Vice President, Human
Resources, beginning September 1996. From 1986 until his recent appointment, he
was Director of Human Resources for Carrier Corporation's Residential Products
Group in Indianapolis, Indiana.
Myron E. Frye, age 57, has been Vice President of Purchasing since November
1992. From March 1983 to November 1992 he was President of Purchasing /
Materials Group, Inc. in Naperville, Illinois.
Michael R. Higgins, age 50, has been Treasurer since January 1987.
Officers of Amcast are elected at the Board of Directors' first meeting
following the annual meeting of shareholders and hold office until the first
meeting of the board following the next Annual Meeting of Shareholders.
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PART II
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ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
- --------------------------------------------------------------
STOCKHOLDER MATTERS
-------------------
Amcast common stock is listed on the New York Stock Exchange, ticker
symbol AIZ. As of August 31, 1996, there were 8,618,491 of the Company's common
shares outstanding, and there were approximately 7,400 shareholders of Amcast's
common stock, including shareholders of record and the Company's estimate of
beneficial holders.
Range of Stock
Prices
------------------------ Dividends
High Low Per Share
---- --- ---------
1996
- ----
First Quarter $ 20 1/8 $ 16 7/8 $ .14
Second Quarter 19 3/8 17 1/2 .14
Third Quarter 20 1/4 16 3/8 .14
Fourth Quarter 20 1/4 17 .14
1995
- ----
First Quarter $ 23 3/8 $ 19 3/8 $ .13
Second Quarter 22 1/4 18 3/8 .13
Third Quarter 20 5/8 17 1/2 .13
Fourth Quarter 20 16 3/4 .14
See Long-Term Debt and Credit Arrangement note in the Company's Annual
Report to Shareholders for the year ended August 31, 1996, Exhibit 13.1, page
187 herein for other information required by this item.
ITEM 6 - SELECTED FINANCIAL DATA
- --------------------------------
See "Selected Data" of the Company's Annual Report to Shareholders for
the year ended August 31, 1996, Exhibit 13.1, page 178 herein.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
- ----------------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
($ in thousands except per share amounts)
Results of Operations
- ---------------------
Net sales in 1996 were $343,934, up 4.8% from the prior year. Flow
Control Products sales rose 8.6% due to higher unit volumes, and Engineered
Components sales were slightly ahead of last year. In 1995, sales increased
20.7% to $328,231 from $271,856 in 1994, as higher unit volumes led to increased
sales of Engineered Components and escalating material costs drove higher
pricing in Flow Control.
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ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
- ----------------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS (cont'd)
-----------------------------------
Results of Operations (cont'd)
- ---------------------
Gross profit increased to $70,596 in 1996 from $68,111 in 1995 due to
increased sales. In 1996, the gross profit percentage was 20.6%, down slightly
from 20.8% in the prior year, primarily due to a less favorable sales mix. In
1995, gross profit increased due to higher sales volume. The gross profit
percent declined in 1995 to 20.8% from 21.8% in 1994 as higher aluminum and
copper costs were passed through to customers. Material costs as a percentage of
sales increased, resulting in a lower gross profit percent.
Selling, general and administrative expenses increased in 1996 to support
higher sales volume and future business expansion in the automotive market. In
1995, selling, general and administrative expenses increased to $41,139
reflecting higher sales and marketing costs to support business expansion.
Interest expense increased to $2,348 in 1996 from $1,387 in 1995, as the
Company borrowed $50 million of senior debt. A large portion of the proceeds
financed plant construction and expansion and accordingly, the interest related
to such long-term projects was capitalized. Interest expense decreased in 1995
as long-term debt was retired. Although borrowing increased in 1995, the
proceeds also financed construction and expansion and the incremental interest
was capitalized.
Other expense increased in 1996 reflecting the Company's equity in the
operating losses of Casting Technology Company (CTC), a joint venture of Amcast
and Izumi Industries of Japan.
The effective tax rate in 1996 was 35.6%, compared to 34.2% in 1995. The
1996 rate is higher due to lower federal tax credits in the current year. The
1995 rate is lower than the statutory rate due to federal tax credits. The 1994
rate is lower than the statutory rate due to the conversion of CTC to a
partnership.
Flow Control Products
- ---------------------
Flow Control Products sales increased 8.6% in 1996 to $159,323 while
operating income of $25,236 equaled the prior year results. Although all
businesses in this segment experienced higher volumes in 1996, the primary
increase in sales came from shipments of brass fittings which sell at lower
margins. In 1995, sales increased 18.2% while operating profits rose 27.9% due
to higher operating efficiencies and the Company's strong market position, which
allowed for improved price realization.
Engineered Components
- ---------------------
In 1996, Engineered Components sales were up slightly from the prior year
as sales of aluminum wheels were higher. This increase was partially offset by
lower demand for other automotive components and volumes lost during a third
quarter labor strike at General Motors, a major customer. Operating profits
increased 5.2% to $9,323, primarily due to improved operating efficiencies. In
1995, sales increased 22.9% due to higher volumes of aluminum wheels and
automotive components, and higher pricing driven by escalating aluminum costs.
Increased unit volumes accounted for approximately one-third of the $33.8
million sales increase. The remainder of the increase resulted from higher
pricing, primarily driven by rising aluminum costs. Operating profits decreased
11.7% due to costs related to launching several new products which offset the
improvements in sales volume. New products in the Engineered Components segment
included, among others, air conditioning components, aluminum wheels, suspension
parts, and
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ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
- ----------------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS (cont'd)
-----------------------------------
Engineered Components (cont'd)
- ---------------------
aircraft cylinder heads which incurred launch costs of approximately $4 million.
These costs were predominately scrap, and rework expenses and expenses related
to production inefficiencies.
Liquidity
- ---------
Net cash provided by operations was $33,638, $15,464 and $29,578 for the
years 1996, 1995, and 1994, respectively. In each of the three years, cash was
primarily provided by income from operations and depreciation. In 1996, accounts
receivable increased as a result of increased sales while inventories decreased
primarily due to the more efficient management of inventories. In 1995,
inventories and accounts receivables increased to support the increased sales
volume.
Net cash used by investing activities was $51,223, $42,743 and $8,848 for
the years 1996, 1995, and 1994, respectively. To support the business expansion
activities, investments were made in property, plant, and equipment, and Casting
Technology Company.
Net cash provided by financing activities was $21,712 and $13,151 for the
years 1996 and 1995, respectively. In 1996 and 1995, increased borrowings were
used to fund business expansion. In 1994, financing activities used cash of
$7,567 primarily to reduce long-term debt and pay cash dividends.
Capital Resources
- -----------------
Capital expenditures were $48,640, $41,724 and $15,596 in 1996, 1995, and
1994, respectively. In 1996 and 1995, expenditures were funded by additions to
long-term debt, cash provided by operations, and the prior year cash position.
In 1994, the expenditures were funded by cash provided by operations. At August
31, 1996, the Company had $9,624 of commitments for capital expenditures to be
made in 1997, primarily for the Engineered Components segment.
Book value per common share at August 31, 1996, was $15.80, up from
$14.52 the prior year. The ratio of long-term debt as a percent of capital
increased to 30.2% at August 31, 1996, from 19.3% at August 31, 1995. The 1996
increase is due to a private placement of $50 million in senior notes with two
insurance companies, which was used to fund business expansion.
The Company has $127.4 million of unused borrowing capacity under the
most restrictive debt covenant relating to a credit agreement which went into
effect June 7, 1995. One million preferred shares and 6.4 million common shares
are authorized and available for future issuance. Management believes the
Company has adequate financial resources to meet its future needs.
Contingencies. The Company, as is normal for the industry in which it operates,
is involved in certain legal proceedings and subject to certain claims and site
investigations that arise under the environmental laws and which have not been
finally adjudicated. To the extent possible, with the information available, the
Company regularly evaluates its responsibility with respect to environmental
proceedings. The factors considered in this evaluation are described in detail
in the Commitments and Contingencies note to the consolidated financial
statements. At August 31, 1996, the Company had accrued reserves of $2.3 million
for environmental liabilities. The Company is of the opinion that, in light of
its existing reserves, its liability in connection with environmental
proceedings should not have a material adverse effect on its financial condition
or results of operation. The Company is presently unaware of the existence of
any potential material environmental costs that are likely to occur in
connection with disposition of any of its property.
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ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
- ----------------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS (cont'd)
-----------------------------------
Impact of Recently Issued Accounting Standards. In March 1995, the FASB issued
Statement No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of, which requires impairment losses to be
recorded on long-lived assets used in operations when indicators of impairment
are present and the undiscounted cash flows estimated to be generated by those
assets are less than the assets' carrying amount. Statement 121 also addresses
the accounting for long-lived assets that are expected to be disposed of. The
Company will adopt Statement 121 in the first quarter of fiscal 1997 and, based
on current circumstances, does not believe the effect of adoption will be
material to the financial position or results of operations.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ----------------------------------------------------
See "Financial Statements and Notes", together with the report thereon of
Ernst & Young LLP and "Quarterly Financial Data (Unaudited)" of the Company's
Annual Report to Shareholders for the year ended August 31, 1996, Exhibit 13.1,
pages 179 - 197 herein.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
- ---------------------------------------------------------
ACCOUNTING AND FINANCIAL DISCLOSURE
-----------------------------------
None
PART III
--------
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- ------------------------------------------------------------
The information required by this item relating to directors of the
Company is incorporated herein by reference to that part of the information
under "Election of Directors" beginning on page 2 of the Company's Proxy
Statement for its Annual Meeting of Shareholders to be held on December 17,
1996. Information concerning executive officers of the Company appears under
"Executive Officers of Registrant" at Part I, pages 7 and 8, of this Report.
ITEM 11 - EXECUTIVE COMPENSATION
- --------------------------------
The information required by this item is incorporated herein by reference
to "Executive Compensation" on pages 6 through 12 of the Company's Proxy
Statement for its Annual Meeting of Shareholders to be held on December 17,
1996.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
- -------------------------------------------------------------
MANAGEMENT
----------
The information required by this item is incorporated herein by reference
to "Security Ownership of Directors, Nominees and Officers" on page 5 and
"Security Ownership of Certain Beneficial Owners" on page 14 of the Company's
Proxy Statement for its Annual Meeting of Shareholders to be held on December
17, 1996.
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ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- --------------------------------------------------------
The information required by this item is contained on pages 9 and 12 in
the Company's Proxy Statement for its Annual Meeting of Shareholders to be held
on December 17, 1996, which is incorporated herein by reference.
PART IV
-------
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
- --------------------------------------------------------------
ON FORM 8-K
-----------
(a) Documents filed as part of this report.
1. Financial statements:
The following financial statements of Amcast Industrial Corporation
and subsidiaries, included in the Annual Report to Shareholders for
the year ended August 31, 1996, are incorporated by reference at
Item 8 of this report.
Consolidated Statements of Operations -
Years Ended August 31, 1996, 1995, and 1994.
Consolidated Statements of Financial Condition -
August 31, 1996 and 1995.
Consolidated Statements of Shareholders' Equity -
Years Ended August 31, 1996, 1995 and 1994.
Consolidated Statements of Cash Flows -
Years Ended August 31, 1996, 1995, and 1994.
Notes to Consolidated Financial Statements
2. Consolidated financial statement schedule:
Schedule Page Number
Number Description In This Report
------ ----------------------------------------------------------- --------------
II Valuation and qualifying accounts and reserves - August 31,
1996, 1995, and 1994 15
All other financial statement schedules are omitted because they
are not applicable or because the required information is shown in
the financial statements and notes.
3. Exhibits - See Index to Exhibits (page 16 hereof).
4. Form 8-K - During the quarter ended August 31, 1996, the Company
did not file any reports on Form 8-K.
13
14
SIGNATURES
Pursuant to the requirements of Section 13 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, on the 25th day of November 1996.
AMCAST INDUSTRIAL CORPORATION
(Registrant)
By /s/John H. Shuey
----------------
John H. Shuey
President and
Chief Executive Officer
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 indicated.
Signature Title Date
- ---------------------- ------------------------------ ------------------
/s/John H. Shuey President, Chief Executive November 25, 1996
- ---------------------- Officer, Director
John H. Shuey (Principal Executive Officer)
/s/Douglas D. Watts Vice President, Finance November 25, 1996
- ------------------- (Principal Financial Officer)
Douglas D. Watts
/s/William L. Bown Vice President and Controller November 25, 1996
- ------------------------ (Principal Accounting Officer)
William L. Bown
*Leo W. Ladehoff Chairman of the Board,
Director November 25, 1996
*James K. Baker Director November 25, 1996
*Walter E. Blankley Director November 25, 1996
*Peter H. Forster Director November 25, 1996
*Ivan W. Gorr Director November 25, 1996
*Earl T. O'Loughlin Director November 25, 1996
*William G. Roth Director November 25, 1996
*R. William Van Sant Director November 25, 1996
*The undersigned John H. Shuey, by signing his name hereto, does sign and
execute this annual report on Form 10-K on behalf of each of the above-named
directors of the registrant pursuant to powers of attorney executed by each such
director and filed with the Securities and Exchange Commission as an exhibit to
this report.
By /s/John H. Shuey
---------------------
John H. Shuey
Attorney in Fact
14
15
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
AMCAST INDUSTRIAL CORPORATION AND SUBSIDIARIES
(Thousands of dollars)
- ---------------------------------------- ----------------- --------------------------------- --------------- -----------------
Col. A Col. B Col. C Col. D Col. E
- ---------------------------------------- ----------------- --------------------------------- --------------- -----------------
Additions
---------------------------------
Balance Charged to Charged to
Beginning Costs and Other Balance at
Description of Period Expenses Accounts Deductions End of Period
- ---------------------------------------- ----------------- --------------- ----------------- --------------- ------------------
Deducted From Asset Accounts
Reserves for unrealized
losses on properties and other
assets held for sale:
Year ended August 31, 1996 $ 3,071 $ 3,071
Year ended August 31, 1995 $ 3,073 $ 1,136(2) $ (1,138)(3) $ 3,071
Year ended August 31, 1994 $ 11,370 $ (8,297)(1) $ 3,073
(1) Includes loss on the sale of assets ($2.2 million) and a revised estimate of
operating losses to disposal ($6.1 million) of the discontinued operations.
(2) Revised estimate of unrealized loss on sale of assets.
(3) Loss on sale of assets.
15
16
INDEX OF EXHIBITS
-----------------
Exhibit Located at
Number Description Numbered Page
- ------ ------------------------------------------ -------------
3 ARTICLES OF INCORPORATION AND BY-LAWS:
3.1 Articles of Incorporation of Amcast Industrial
Corporation. 21
3.2 Code of Regulations of Amcast Industrial
Corporation. 36
4 INSTRUMENTS DEFINING THE RIGHTS OF SECURITY
HOLDERS, INCLUDING INDENTURES:
4.1 $60,000,000 amended and restated Revolving Credit
Agreement between Amcast Industrial Corporation and Star
Bank, The First National Bank of Chicago, Bank One,
Dayton, NA, Society National Bank, and National Bank of
Detroit dated June 7, 1995 - incorporated by reference
from Form 10-K for the year ended August 31, 1995.
4.2 Loan Agreement between the City of Elkhart, Indiana,
and Elkhart Products Corporation, dated as of February
1, 1988, for $2,050,000, Economic Development
Revenue Refunding Bonds, Series 1988. +
4.3 $10,000,000 Senior Note Agreement between
Amcast Industrial Corporation and Principal
Mutual Life Insurance Company dated
September 1, 1989, as amended. 41
4.4 Amendment Agreement, dated July 24, 1995, to the
$10,000,000 Senior Note Agreement between Amcast
Industrial Corporation and Principal Mutual Life
Insurance Company, dated September 1, 1989 -
incorporated by reference from Form 10-K for the year
ended August 31, 1995.
4.5 Loan Agreement by and between the City of Fayetteville,
Arkansas, and Amcast Industrial Corporation, dated as of
December 1, 1991, for $5,050,000 City of Fayetteville,
Arkansas, variable/fixed rate demand Industrial
Development Revenue Refunding Bonds, Series 1992. +
4.6 Lease Agreement between PNC Leasing Corp., lessor, and
Amcast Industrial Corporation, lessee, dated July 15,
1992 incorporated by reference from Form 10-K for the
year ended August 31, 1993.
16
17
INDEX TO EXHIBITS (cont'd)
-----------------
Exhibit Located at
Number Description Numbered Page
- ------ --------------------------------------------------------- -------------
4.7 Lease Agreement between PNC Leasing Corp., lessor,
and Amcast Industrial Corporation, lessee, dated
August 8, 1996. +
4.8 Amcast guarantee of $15,000,000 of the $25,000,000 Credit
and Intercreditor Agreement between Casting Technology
Company (a joint venture partnership between Amcast
Industrial Corporation and Izumi Industries, Ltd.) and
National Bank of Detroit and The Asahi Bank,
Ltd., and a copy of the Creditor and Intercreditor
Agreement, dated July 28, 1995 - incorporated by
reference from Form 10-K for the year ended August 31,1995.
4.9 Amendment Agreement, dated January 5, 1996, to the
$25,000,000 Credit and Intercreditor Agreement between
Casting Technology Company and National Bank of
Detroit and The Asahi Bank, Ltd., dated July 28, 1995. 82
4.10 Amendment Agreement, dated May 31,1996, to the
$25,000,000 Credit and Intercreditor Agreement between
Casting Technology Company and National Bank of Detroit
and The Asahi Bank, Ltd., dated July 28,1995, and amended
Guarantee Agreement which increased Amcast's guarantee
to $21,000,000 of the revised credit amount of $35,000,000. 85
4.11 $50,000,000 Note Agreement between Amcast Industrial
Corporation and Principal Mutual Life Insurance Company
and The Northern Mutual Life Insurance Company, dated
November 1, 1995 - incorporated by reference from Form
. 10-K for the year ended August 31,1995.
10 MATERIAL CONTRACTS:
10.1 Amcast Industrial Corporation Employee Share-
builder Plan effective August 26, 1987. 93
10.2 Amcast Industrial Corporation Annual Incentive
Plan effective September 1, 1982. 103
10.3 Deferred Compensation Agreement for Directors
of Amcast Industrial Corporation. 115
10.4 Executive Agreement between Amcast Industrial
Corporation and Leo W. Ladehoff, Chairman of the Board
and former Chief Executive Officer of the Company,
dated March 3, 1995 incorporated by reference from Form
10-Q for the quarter ended May 28, 1995.
17
18
INDEX TO EXHIBITS (cont'd)
-----------------
Exhibit Located at
Number Description Numbered Page
- ------ --------------------------------------------------- -------------
10.5 Indemnification Agreement for Directors of
Amcast Industrial Corporation, effective
October 30, 1987. 120
10.6 First Master Benefit Trust Agreement between
Amcast Industrial Corporation and Bank One,
Dayton, NA, effective March 11, 1988. 127
10.7 Amcast Industrial Corporation 1989 Stock
Incentive Plan, effective October 19, 1988 -
as amended, effective December 9, 1992 -
incorporated by reference from Form 10-Q
for the quarter ended February 28, 1994.
10.8 Amcast Industrial Corporation 1989 Director
Stock Option Plan, effective October 19, 1988. 150
10.9 Amcast Industrial Corporation Change of Control
Agreements effective September 1, 1996. 164
10.10 Amcast Industrial Corporation Long-Term Incentive Plan
effective September 1, 1991 - incorporated by reference
from Form 10-K for the year ended August 31, 1992.
10.11 Amcast Industrial Corporation Nonqualified
Supplementary Benefit Plan, effective May 29, 1991 -
incorporated by reference from Form 10-K for the year
ended August 31, 1994.
10.12 Change of Control Agreement between Amcast Industrial
Corporation and John H. Shuey, Chief Executive Officer,
effective August 14, 1995 - incorporated by reference
from Form 10-K for the year ended August 31,1995.
13 ANNUAL REPORT TO SECURITY HOLDERS:
13.1 Amcast Industrial Corporation Annual Report to
Shareholders for year ended August 31, 1996. Those
portions of the Annual Report as are specifically
referenced under Parts I, II, and IV of
this report are filed herein. 178
18
19
INDEX TO EXHIBITS (cont'd)
-----------------
Exhibit Located at
Number Description Numbered Page
- ------ -------------------------------------------------------------- -------------
21 SUBSIDIARIES OF THE REGISTRANT:
Amcast Industrial Corporation has ten wholly-owned
subsidiaries which are included in the consolidated financial
statements of the Company. Information regarding these
subsidiaries is set forth below:
Amcast Industrial Limited
Jurisdiction of Incorporation: Ontario, Canada
Name Under Which Business Is Done: Amcast Industrial Limited
Elkhart Products Corporation
Jurisdiction of Incorporation: Indiana
Name Under Which Business Is Done: Elkhart Products Corporation
WheelTek, Inc.
Jurisdiction of Incorporation: Indiana
Name Under Which Business Is Done: WheelTek, Inc. and Amcast
Automotive Wheel Division
Amcast Precision Products, Inc.
Jurisdiction of Incorporation: California
Name Under Which Business Is Done: Amcast Precision Products, Inc.
Amcast Investment Services Corporation
Jurisdiction of Incorporation: Delaware
Name Under Which Business Is Done: Amcast Investment Services
Corporation
Amcast Industrial Financial Services, Inc.
Jurisdiction of Incorporation: Ohio
Name Under Which Business is Done: Amcast Industrial
Financial Services, Inc.
Amcast Industrial Sales Corporation
Jurisdiction of Incorporation: U.S. Virgin Islands
Name Under Which Business is Done: Amcast Industrial Sales Corporation
Amcast Automotive, Inc.
Jurisdiction of Incorporation: Michigan
Name Under Which Business is Done: Amcast Automotive, Inc.
Flagg Brass, Inc.
Jurisdiction of Incorporation: Ohio
Name Under Which Business is Done: Flagg Brass, Inc.
Amcast Casting Technologies, Inc.
Jurisdiction of Incorporation: Indiana
Name Under Which Business is Done: Amcast Casting Technologies, Inc.
19
20
INDEX TO EXHIBITS (cont'd)
-----------------
Exhibit Located at
Number Description Numbered Page
- ------ ------------------------------------------------------------- -------------
23 CONSENTS OF EXPERTS AND COUNSEL:
23.1 Consent of Ernst & Young LLP dated
November 22, 1996, with respect to the
incorporation by reference of
their report dated October 8, 1996 into this
Annual Report (Form 10-K), the inclusion of the
financial statement schedule listed in Item 14(a)(2)
to the financial statements covered by their report
dated October 8, 1996, and material incorporated by
reference into Amcast Industrial Corporation's
Post-Effective Amendment No. 1 to Registration
Statement No. 33-2876 on Form S-8, on Registration
Statements on Form S-8 (Registration Nos. 33-18690,
33-28080, 33-28084, 33-38176, 33-61290 and 333-00133),
and on Registration Statement No. 33-28075 on
Form S-3 198
24 POWER OF ATTORNEY:
24.1 Powers of attorney of persons who are indicated
as having executed this Annual Report Form 10-K
on behalf of another. 199
27 FINANCIAL DATA SCHEDULE:
27.1 Article 5 of Regulation S-X Financial Data Schedule
Form 10-K for the year ended August 31, 1996 207
+ Indicates that the document relates to a class of indebtedness that does not
exceed 10% of the total consolidated assets of the Company and that the
Company will furnish a copy of the document to the Commission upon its
request.
20