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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________________ to _________________
Commission file number 1-5356
PENN ENGINEERING & MANUFACTURING CORP.
--------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 23-0951065
- ------------------------------- ------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
P.O. Box 1000, Danboro, Pennsylvania 18916
- ------------------------------------ ----------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (215) 766-8853
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
Class A Common Stock, $.01 par value New York Stock Exchange
Common Stock, $.01 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes __X__. No __.
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Securities Exchange Act 1934). Yes __X __. No __.
As of June 30, 2003, the aggregate market value based on the closing sales price
on that date of the voting and non-voting common equity held by non-affiliates
of the Registrant was approximately $233,111,000.
Indicate the number of shares outstanding of each of the Registrant's classes of
common stock as of the latest practicable date: 14,231,978 shares of Common
Stock and 3,350,164 shares of Class A Common Stock outstanding on March 1, 2004.
DOCUMENTS INCORPORATED BY REFERENCE:
1. Portions of the Registrant's 2003 Annual Report to Stockholders filed as
Exhibit (13) are incorporated by reference in Items 1, 3, 5, 6, 7, 7A, 8,
and 15.
2. Portions of the Proxy Statement for the Registrant's 2004 Annual Meeting
of Stockholders are incorporated by reference in Items 10, 11, 12, 13,
and 14.
PENN ENGINEERING & MANUFACTURING CORP.
____________
INDEX TO FORM 10-K REPORT
___________
PAGE
----
I. PART I
Item 1. Business.......................................................3
Item 2. Properties.....................................................7
Item 3. Legal Proceedings..............................................8
Item 4. Submission of Matters to a Vote of Security Holders............8
Executive Officers of Registrant...............................8
II. PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder
Matters, and Issuer Purchases of Equity Securities.............9
Item 6. Selected Financial Data........................................9
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.....................................10
Item 7A. Quantitative and Qualitative Disclosures About Market Risk....10
Item 8. Financial Statements and Supplementary Data...................10
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure......................................10
Item 9A. Controls and Procedures.......................................10
III. PART III
Item 10. Directors and Executive Officers of the Registrant............10
Item 11. Executive Compensation........................................11
Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters....................11
Item 13. Certain Relationships and Related Transactions................11
Item 14. Principal Accoutant Fees and Services.........................11
IV. PART IV
Item 15. Exhibits, Financial Statements and Schedules, and Reports on
Form 8-K......................................................12
2
PART I
Item 1. Business.
- ------- ---------
(a) General Development of Business.
The Registrant, a Delaware corporation, was incorporated in 1942. The
primary businesses of the Registrant are:
(i) The development, manufacture, and sale, through Registrant's
PennEngineering Fastening Technologies division ("Fastening Technologies"), of
PEM(R) self-clinching and broaching fasteners, automatic insertion equipment for
such fasteners sold under the PEMSERTER(R) trademark, inserts for plastics sold
under the SI(R) trademark, small screw insertion systems sold under the
StickScrew(R) trademark, and blind-threaded inserts sold under the Atlas(R)
trademark;
(ii) The development, manufacture, and sale through the
Registrant's PennEngineering Motion Technologies division ("Motion
Technologies"), of permanent magnet brush-commutated dc motors under the
Pittman(R) brand and Lo-Cog(R) trademark, electronically commutated brushless dc
servomotors under the Elcom(R) trademark, and stepper, brush, and brushless dc
motors under the MAE(TM) trademark; and
(iii) The distribution of fasteners and other components utilized
by original equipment manufacturers ("OEMs") and the provision of comprehensive
logistical and inventory management services, through Arconix Group, Inc. and
its subsidiaries ("Arconix Group").
On February 5, 2003, the Registrant acquired all of the issued and
outstanding capital stock of Maelux S.A. and its sole operating company, MAE
S.p.A. ("MAE"), of Offanengo, Italy, for approximately $10.7 million. MAE is a
manufacturer of stepper, brush, and brushless dc motors serving customers
throughout Europe and Asia. The purchase price was paid in cash.
(b) Financial Information About Industry Segments.
The answer to this Item is incorporated by reference to Note 13 of the
Notes to Consolidated Financial Statements "Financial Reporting for Business
Segments of the Registrant" on pages 26, 27, and 28 of the Registrant's 2003
Annual Report to Stockholders (the "Annual Report"), which is included as
Exhibit (13) to this Form 10-K Annual Report.
(c) Narrative Description of Business.
Fastening Technologies is the world's leading manufacturer of
self-clinching fasteners, which are used principally by the computer, data
communications, telecommunications, general electronics, automotive, and
avionics industries. PEM(R) self-clinching fasteners were first developed by the
Registrant's founder in 1942. Self-clinching fasteners become an integral part
of the material in which they are installed and provide a reliable means of
attaching components to sheet metal and other thin materials. Typical
applications for the Registrant's fastener products include personal computers,
computer cabinetry, power supplies, instrumentation, telecommunications
equipment, and certain automobile components, such as air bags, sun roofs, and
windshield wipers.
3
The Registrant's fasteners are primarily used by sheet metal
fabricators, which utilize the Registrant's fasteners to produce sub-assemblies
for OEMs. Both OEMs and their subcontractors seek fastening solutions that
provide lower total installed cost and are highly reliable, thereby lowering
production and service costs. The Registrant's application engineers, its
distributors, and its independent distributors continually work in close
collaboration with OEMs and their subcontractors early in the design process to
determine appropriate fastener applications and to engineer fastening solutions.
This collaboration often results in OEMs specifying the Registrant's fasteners
in their products. Self-clinching fasteners generally compete against loose
hardware, such as nuts and bolts. Even though the Registrant's fasteners
typically sell at a premium to loose hardware, its fasteners generally result in
lower overall manufacturing costs.
Fastening Technologies also manufactures and sells manual and automated
presses for fastener installation under the PEMSERTER(R) trademark, small screw
insertion systems sold under the StickScrew(R) trademark, and blind-threaded
inserts sold under the Atlas(R) trademark. The rapid and accurate installation
provided by PEMSERTER(R) presses, together with the Registrant's broad range of
fastener products, provides the Registrant's customers with a complete fastening
system.
Motion Technologies, under the Pittman(R) and Lo-Cog(R) trademarks,
produces high-quality, high-performance, permanent magnet dc motors and
electronically commutated brushless dc servomotors used in light-weight
precision electronics, medical, and manufacturing applications such as archival
storage, printing, copying, robotics, and medical diagnostic equipment and
centrifuges, and, under the MAE trademark, produces high quality, high
performance stepper, brush, and brushless dc motors serving similar applications
and markets in Europe and Asia. Motion Technologies' broad range of products are
typically adapted to the specific requirements of individual customers.
Arconix Group is a global distribution organization that offers a
single source of supply for fastening and electronic hardware products and other
components utilized by OEMs and their subcontractors. Arconix Group also
provides a broad range of logistical and on-site inventory management services.
The following table sets forth information with respect to the
percentage of total sales attributable to each of the Registrant's principal
segments that accounted for 10% or more of consolidated revenues in each of the
fiscal years ended December 31, 2001, 2002, and 2003:
Percentage of Total Sales
-------------------------
Year Ended
December 31, Fasteners Motors Distribution
------------ --------- ------ ------------
2001 60% 18% 22%
2002 51 21 28
2003 50 23 27
The Registrant's fastener products are sold through a worldwide network
of approximately 60 authorized independent distributors located in approximately
40 countries, including the Registrant's own subsidiaries in California, China,
England, Singapore, and Mexico. Many of the independent distributors and
engineering representative organizations have been affiliated with the
Registrant for more than 20 years. The Registrant's independent
4
distributors, which maintain their own inventories of the Registrant's products,
typically sell other complementary industrial components. The Registrant's
return allowances, which are made through the exchange of inventory, have
generally averaged less than 1% of sales. The Registrant supplies its customers
and distributors through warehouses in: Oxnard, California; Shanghai, China;
Doncaster, England; Singapore; and Guadalajara, Mexico, in addition to
maintaining inventory at its facilities in Danboro, Pennsylvania, Winston-Salem,
North Carolina, and Kent, Ohio.
Domestic and European sales of the Registrant's motor products are made
through independent sales representatives and authorized independent
distributors.
During the year ended December 31, 2003, conditions in the domestic
market for fasteners continued to be highly competitive. It is not possible to
determine with accuracy the relative competitive position of Fastening
Technologies in the market for self-clinching, broaching, and insert fasteners.
The Registrant believes that Fastening Technologies has maintained its market
share during 2003. Approximately ten other companies are known to be competing
with the Registrant in the manufacture and sale of such fasteners, some of which
also manufacture products other than self-clinching, broaching, and insert
fasteners.
The Registrant also believes that Motion Technologies has maintained
its competitive position in the dc motor market in 2003, and that Arconix Group
has maintained its competitive position in the distribution and inventory
management services arena in 2003.
Among Fastening Technologies' principal customers for fasteners and
PEMSERTER(R) presses are manufacturers of business machines, personal computers,
computer peripherals, electronic and communications equipment, electrical
equipment, industrial controls instrumentation, vending machines, automotive
subcontractors, and other fabricated metal products. Motion Technologies'
principal customers for the dc motors, servomotors, and stepper motors are
manufacturers of mass data storage units, automated production equipment,
instruments, computer peripherals, business machines, medical equipment and
textile industry equipment. Arconix Group's customers are generally the same as
those of Fastening Technologies. In the opinion of the Registrant, no material
part of its business is dependent upon a single customer or a few customers, the
loss of any one or more of which would have a material adverse effect on the
business of the Registrant. For the year ended December 31, 2003, sales to one
of the Registrant's authorized distributors totaled approximately $18,900,000,
or approximately 10% of the Registrant's 2003 consolidated net sales. For the
year ended December 31, 2002, there were no sales to any one customer that
exceeded 10% of the Registrant's 2002 consolidated net sales. For the year ended
December 31, 2001, sales of fasteners to one of the Registrant's authorized
distributors totaled approximately $22,105,000, or approximately 12% of the
Registrant's 2001 consolidated net sales.
As of December 31, 2003, the Registrant had an order backlog of
$79,498,000 compared with $33,718,000 as of December 31, 2002. The Registrant
estimates that substantially all of its backlog as of December 31, 2003 will be
shipped during its fiscal year ending December 31, 2004.
The raw materials used by the Registrant are generally available in
adequate supply.
The Registrant holds a number of patents and trademarks, and has patent
applications pending in the United States and various foreign countries.
Management believes, however, that
5
the Registrant's business is not materially dependent on any patent or group of
patents. The principal trademarks of the Registrant are registered in the United
States and various foreign countries.
Research and development is carried on by the operating personnel of
the Registrant on a continuing basis. The amounts expended for research and
development for the fiscal years ended December 31, 2001, 2002, and 2003 were
approximately $5,111,000, $4,342,000, and $4,570,000, respectively.
The Registrant believes that compliance with federal, state, and local
laws and regulations that have been enacted or adopted regulating the discharge
of materials into the environment, or otherwise relating to the protection of
the environment, will not have a material adverse effect upon the earnings or
competitive position of the Registrant.
As of December 31, 2003, 1,267 persons were employed by the Registrant,
or 101 more than were employed as of December 31, 2002. The Registrant believes
that its labor rates are comparable to those of its competitors and that the
Registrant's relations with its employees are good. The Registrant does not
consider its business to be seasonal in any material respect, nor is any
material portion of the Registrant's business subject to the renegotiation of
profits or termination of contracts at the election of the Government.
(d) Financial Information About Foreign and Domestic Operations and
Export Sales.
The answer to this Item is incorporated by reference to Note 13 of the
Notes to the Consolidated Financial Statements, "Financial Reporting for
Business Segments of the Company" on pages 26, 27, and 28 of the Annual Report.
Approximately 37% of the Registrant's foreign sales in 2003 were payable in U.S.
dollars. Of the remaining foreign sales, sales by certain of the Registrant's
wholly owned subsdiaries are denominated as follows: (i) sales in the United
Kingdom and Western Europe through Arconix/UK Ltd. and PennEngineering Fastening
Technologies (Europe) Ltd. are denominated in pounds sterling, U.S. dollars, and
Euros; (ii) sales in the Pacific Rim through Arconix/Singapore Pte Ltd. and
Arconix Fastening & Inventory Management Solutions (Shanghai) Co., Ltd. are
denominated in Chinese yuan, Singapore dollars, and U.S. dollars; and (iii)
sales in Mexico through Arconix/Mexico, S. de R.L. de C.V., are denominated in
Mexican pesos and U.S. dollars.
(e) Available Information.
The Registrant maintains an Internet web site at
http://www.penn-eng.com and makes available free of charge on or through the web
site its Annual Report on Form 10-K, its quarterly reports on Form 10-Q and its
current reports on Form 8-K as soon as reasonably practicable after it
electronically files such material with, or furnishes it to, the Securities and
Exchange Commission (the "Commission"). The Registrant will comply with the
requirements of the New York Stock Exchange to make available on the
Registrant's website and in printed form upon request the Registrant's Code of
Business Conduct and Ethics, the respective charter of its Audit, Compensation,
and Nominating/Corporate Governance Committees.
6
Risk Factors
Many of the Registrant's customers are in cyclical industries, and
their purchases from the Registrant may decline substantially during periods of
economic slowdown.
A majority of the Registrant's revenues are derived from customers and
OEMs that are in industries and businesses that are cyclical in nature and
subject to change in general economic conditions, such as business machines,
personal computers, computer peripherals, electronic and communications
equipment, and other electronic equipment. Demand for the Registrant's products
is affected by the business success of the Registrant's OEM and indirect
customers who purchase products from those OEM customers. General economic or
industry-specific downturns, particularly such as those in the telecommunication
and datacommunications industries, have had, and in the future could have, a
material adverse effect on the Registrant and its business, results of
operations, and financial condition.
The Registrant's foreign operations are subject to numerous risks,
including currency fluctuations and other risks that may impact the Registrant's
results of operations.
Foreign sales accounted for approximately 40% of the Registrant's 2003
consolidated sales. Because approximately 37% of the Registrant's foreign sales
and expenses were incurred in U.S. dollars, the Registrant's operations have
been and may continue to be affected by fluctuations in currency exchange rates.
Furthermore, currency fluctuations may cause reported sales to fluctuate from
period to period regardless of the fluctuation in the volume of such sales in
foreign currencies. The Registrant purchases forward foreign currency exchange
contracts to attempt to insulate the Registrant from the impact of foreign
currency exchange rate fluctuations.
Foreign sales are subject to numerous other risks, including political
and economic instability in foreign markets, restrictive trade policies of
foreign governments, economic conditions in local markets, the imposition of
product tariffs, and the burdens of complying with a wide variety of
international and U.S. export laws.
Forward-Looking Statements
Forward-looking statements, within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), under the Private Securities Litigation Reform
Act of 1995, are made throughout this Form 10-K. The Registrant's results may
differ materially from those in the forward-looking statements. Forward-looking
statements are based on management's current views and assumptions, and involve
risks and uncertainties that significantly affect expected results. For example,
operating results may be affected by external factors such as: changes in laws
and regulations, changes in accounting standards, fluctuations in demand in
markets served by the Registrant, particularly the computer and
telecommunications markets, fluctuations in the cost and availability of the
supply chain resources, and foreign economic conditions, including currency rate
fluctuations.
Item 2. Properties.
- ------- -----------
The Registrant's principal plants and offices, all of which (other than
the Singapore, China, and Mexico offices) are owned by the Registrant, were as
follows at December 31, 2003:
7
Location Size of Facility Use of Facility
-------- ---------------- ---------------
Danboro, Pennsylvania 230,000 sq. ft building on 107 Executive offices and
acres manufacture of fasteners
Winston-Salem, 120,000 sq. ft. building on 16.3 Manufacture of fasteners
North Carolina acres; and 58,280 sq. ft.
building on 6 acres
Kent, Ohio 75,000 sq. ft. building on 10 Manufacture of fasteners
acres
Galway, Ireland 55,000 sq. ft. building on Manufacture of fasteners
2 acres
Pipersville, Pennsylvania 51,000 sq. ft. building on 10 Manufacture of installation
acres presses and tooling
Harleysville, Pennsylvania 58,000 sq. ft. building on Manufacture of dc motors
6 acres
Offanengo, Italy 129,000 sq. ft. building on 8 Manufacture of dc motors
acres
Oxnard, California 30,600 sq. ft. building on Office and warehouse for the
2 acres distribution of fasteners and
related components
Doncaster, England 33,250 sq. ft. building on Office and warehouse for the
5 acres distribution of fasteners and
related components
The Registrant also has leased 8,000 sq. ft. of office and warehouse
space in Shanghai, China, 9,758 sq. ft. of office and warehouse space in
Guadalajara, Mexico, and 7,000 sq. ft. of office and warehouse space in
Singapore. The Registrant's 50,000 sq. ft. facility in Suffolk, Virginia is
currently vacant and for sale. The Registrant carries fire, casualty, business
interruption, and public liability insurance for all of its facilities in
amounts which it deems adequate.
Item 3. Legal Proceedings.
- ------- ------------------
The answer to this Item is incorporated by reference to Note 12 of
Notes to Consolidated Financial Statements "Commitments & Contingencies" on page
26 of the Annual Report.
Item 4. Submission of Matters to a Vote of Security Holders.
- ------- ----------------------------------------------------
None.
Executive Officers of the Registrant
Certain information about the executive officers of the Registrant is
as follows:
8
Name Age Position Held with the Registrant
- ---- --- ---------------------------------
Kenneth A. Swanstrom 64 Chairman of the Board and
Chief Executive Officer
Martin Bidart 67 President and
Chief Operating Officer
Mark W. Simon 65 Senior Vice President,
Chief Financial Officer, and
Corporate Secretary
Richard F. Davies 54 Treasurer and Assistant Secretary
William E. Sarnese 50 Corporate Controller and
Assistant Secretary
Ronald J. Bean 48 Vice President and General
Manager - Motion Technologies
Alan M. Kay 56 President - Arconix Group
Francis P. Wilson 64 President - Fastening Technologies
All of the executive officers of the Registrant have been principally
employed as officers or employees of the Registrant for more than the past five
years.
The executive officers of the Registrant are elected each year at the
organization meeting of the Board of Directors of the Registrant, which is held
following the Annual Meeting of Stockholders (the "Annual Meeting").
PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters,
- ------- -------------------------------------------------------------------
and Issuer Purchases of Equity Securities.
------------------------------------------
The Registrant's Common Stock (non-voting), par value $0.01, is traded
on the New York Stock Exchange under the symbol "PNN." The Registrant's Class A
Common Stock (voting), par value $0.01, is traded on the New York Stock Exchange
under the symbol "PNNA." As of March 1, 2004, there were 827 holders of record
of the Registrant's Common Stock and 324 holders of record of the Registrant's
Class A Common Stock. Additional information with respect to this Item 5 is
incorporated by reference to page 14 of the Annual Report.
Item 6. Selected Financial Data.
- ------- ------------------------
The Five-Year Financial Data and other financial information for the
Registrant is incorporated by reference to page 13 of the Annual Report.
9
Item 7. Management's Discussion and Analysis of Financial Condition
- ------- -----------------------------------------------------------
and Results of Operations.
--------------------------
The answer to this Item is incorporated by reference to pages 9 through
13 of the Annual Report.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
- -------- -----------------------------------------------------------
The answer to this Item is incorporated by reference to pages 12
through 13 of the Annual Report.
Item 8. Financial Statements and Supplementary Data.
- ------- --------------------------------------------
The answer to this Item is incorporated by reference to pages 15
through 28 of the Annual Report.
Item 9. Changes in and Disagreements with Accountants on Accounting and
- ------- ---------------------------------------------------------------
Financial Disclosure.
---------------------
None.
Item 9A. Controls and Procedures.
- -------- ------------------------
Disclosure Controls and Procedures
The Registrant's management, with the participation of its Chief
Executive Officer and Chief Financial Officer, has evaluated the effectiveness
of the Registrant's disclosure controls and procedures (as such term is defined
in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the
period covered by this report. Based on such evaluation, the Registrant's Chief
Executive Officer and Chief Financial Officer have concluded that, as of the end
of such period, the Registrant's disclosure controls and procedures are
effective in recording, processing, summarizing, and reporting, on a timely
basis, information required to be disclosed by the Registrant in the reports
that the Registrant files or submits under the Exchange Act.
Internal Control over Financial Reporting
There have not been any changes in the Registrant's internal control
over financial reporting (as such term is defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act) during the fourth quarter of 2003 that have
materially affected, or are reasonably likely to materially affect, the
Registrant's internal control over financial reporting.
PART III
Item 10. Directors and Executive Officers of the Registrant.
- -------- ---------------------------------------------------
The response to this Item with respect to the Registrant's directors is
incorporated by reference to the proxy statement to be filed with the Commission
relating to the Registrant's 2004 Annual Meeting to be held April 29, 2004 (the
"Proxy Statement") under the caption "Election of Directors." Information with
respect to executive officers of the Registrant is included in Part I of this
Form 10-K Annual Report.
10
Item 11. Executive Compensation.
- -------- -----------------------
The response to this Item is incorporated by reference to the Proxy
Statement under the caption "Executive Compensation," other than the "Report of
the Compensation Committee of the Board of Directors" and the "Performance
Graph," which are not incorporated by reference into this Form 10-K Annual
Report.
Item 12. Security Ownership of Certain Beneficial Owners and
- -------- ---------------------------------------------------
Management and Related Stockholder Matters.
-------------------------------------------
The response to this Item is incorporated by reference to the Proxy
Statement under the caption "Beneficial Ownership of Common Stock and Class A
Common Stock."
The following table sets forth information regarding equity
compensation plans of the Registrant as of December 31, 2003. Only shares of the
Registrant's common stock (non-voting) may be issued under the Registrant's
equity compensation plans. The Registrant does not have any equity compensation
plans that have not been approved by the stockholders of the Registrant.
Equity Compensation Plan Information
Number of securities
remaining available for
future issuance under
Number of securities to be Weighted-average equity compensation plans
issued upon exercise of exercise price of (excluding securities
outstanding options, outstanding options, reflected
Plan category warrants and rights warrants and rights in column (a))
- ------------- ------------------- ------------------- --------------
(a) (b) (c)
Equity compensation plans 2,329,864 $14.50 536,443
approved by security holders
Equity compensation plans not
approved by security holders -- -- --
--------- ------ -------
Total 2,329,864 $14.50 536,443
========= ====== =======
Item 13. Certain Relationships and Related Transactions.
- -------- -----------------------------------------------
None.
Item 14. Principal Accountant Fees and Services.
- -------- ---------------------------------------
The response to this Item is incorporated by reference to the Proxy
Statement under the caption "Independent Auditors."
11
PART IV
Item 15. Exhibits, Financial Statements and Schedules, and Reports on Form 8-K.
- -------- ----------------------------------------------------------------------
(a) Financial Statements, Financial Schedules and Exhibits Filed.
1. Consolidated Financial Statements.The following
Consolidated Financial Statements of the Registrant and its subsidiaries are
filed as part of this Form 10-K Report:
Page
----
Consolidated Balance Sheets at December 31, 2003 and 2002 15*
Statements of Consolidated Income for the years ended
December 31, 2003, 16*
2002, and 2001.
Statements of Changes in Consolidated Stockholders' Equity
for the years ended December 31, 2003, 2002, and 2001. 17*
Statements of Consolidated Cash Flows for the years ended 18*
December 31, 2003, 2002, and 2001.
Notes to Consolidated Financial Statements. 19-28*
Report of Independent Auditors. 28*
- -------------------
* Refers to the respective pages of the Annual Report. With the exception of
the portions of such Annual Report specifically incorporated by reference
in this Item, and in Items 1, 3, 5, 6, 7, 7A, 8, and 15 hereof, such Annual
Report shall not be deemed filed as a part of this Form 10-K Report or
otherwise deemed subject to the liabilities of Section 18 of the Exchange
Act.
2. Financial Schedules.
None.
3. Exhibits.
Reference is made to the Exhibit Index on pages 14-15 of
this Form 10-K.
(b) Reports on Form 8-K.
The Registrant filed a Form 8-K Current Report with the Commission
on October 29, 2003 furnishing information under Item 12 regarding its press
release announcing earnings for the quarter ended September 30, 2003.
12
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
PENN ENGINEERING &
MANUFACTURING CORP.
Date: March 15, 2004 By: /s/ Kenneth A. Swanstrom
--------------------------------
Kenneth A. Swanstrom,
Chairman 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 and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Kenneth A. Swanstrom Chairman of the Board, March 15, 2004
- ------------------------ Chief Executive Officer, and
Kenneth A. Swanstrom Director (Principal Executive
Officer)
/s/ Martin Bidart President, Chief Operating Officer, March 15, 2004
- ------------------------ and Director (Principal Operating
Martin Bidart Officer)
/s/ Mark W. Simon Senior Vice President, Chief March 15, 2004
- ------------------------ Financial Officer, Corporate
Mark W. Simon Secretary, and Director (Principal
Financial and Accounting Officer)
/s/ Maurice D. Oaks Director March 15, 2004
- ------------------------
Maurice D. Oaks
/s/ John J. Sickler Director March 15, 2004
- ------------------------
John J. Sickler
/s/ Charles R. Smith Director March 15, 2004
- ------------------------
Charles R. Smith
/s/ Daryl L. Swanstrom Director March 15, 2004
- ------------------------
Daryl L. Swanstrom
/s/ Andrew B. Williams Director March 15, 2004
- ------------------------
Andrew B. Williams
13
EXHIBIT INDEX
-------------
Item Description
- ---- -----------
(3)(i) Restated Certificate of Incorporation of the Registrant.
(Incorporated by reference to Exhibit 3.1 of the Registrant's
Form 10-Q Quarterly Report for the quarter ended March 31, 2001.)
(3)(ii) By-laws of the Registrant, as amended. (Incorporated by reference
to Exhibit 3(ii) of the Registrant's Form 10-K Annual Report for
the year ended December 31, 2001.)
(10)(i) Right of First Refusal dated as of September 5, 1986 between the
Registrant and Lawrence W. Swanstrom and Daryl L. Swanstrom.
(Incorporated by reference to Exhibit A to the Registrant's
Form 8-K Current Report dated September 5, 1986.)
(10)(ii) 1996 Equity Incentive Plan. (Incorporated by reference to the
Registrant's Form S-8 Registration Statement No. 333-20101
filed on January 21, 1997.)
(10)(iii) 1996 Employee Stock Purchase Plan. (Incorporated by reference to
the Registrant's Form S-8 Registration Statement No. 333-13073
filed on September 30, 1996.)
(10)(iv) 1998 Stock Option Plan for Non-Employee Directors. (Incorporated
by reference to the Registrant's Form S-8 Registration
Statement No. 333-92907 filed on December 16, 1999.)
(10)(v) 1999 Employee Stock Option Plan. (Incorporated by reference to
the Registrant's Form S-8 Registration Statement No. 333-92903
filed on December 16, 1999.)
(13) 2003 Annual Report to Stockholders. (Only those pages expressly
incorporated by reference in Items 1, 3, 5, 6, 7, 7A, 8, and
15 of this Form 10-K report.)
(14) Code of Ethics.
(21) Subsidiaries of the Registrant.
(23) Consent of Independent Auditors.
(31.1) Rule 13a-14(a)/15(d)-14(a) Certification of Chief Executive Officer
(31.2) Rule 13a-14(a)/15(d)-14(a) Certification of Chief Financial Officer
(32.1) Section 1350 Certification of Chief Executive Officer
(32.2) Section 1350 Certification of Chief Financial Officer