-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ViAmCoNPs6N2f9sN+Y8zKWMTGIIeS+2ICjpoyxNAcT3xlLPCwc2To0jIFg4rs20W qJr3mN4gyx/aKAxFIisZ4w== 0000069960-96-000011.txt : 19960725 0000069960-96-000011.hdr.sgml : 19960725 ACCESSION NUMBER: 0000069960-96-000011 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960430 FILED AS OF DATE: 19960724 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NCH CORP CENTRAL INDEX KEY: 0000069960 STANDARD INDUSTRIAL CLASSIFICATION: SPECIALTY CLEANING, POLISHING AND SANITATION PREPARATIONS [2842] IRS NUMBER: 750457200 STATE OF INCORPORATION: DE FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05838 FILM NUMBER: 96598149 BUSINESS ADDRESS: STREET 1: 2727 CHEMSEARCH BLVD STREET 2: P O BOX 152170 CITY: IRVING STATE: TX ZIP: 75015 BUSINESS PHONE: 2144380211 FORMER COMPANY: FORMER CONFORMED NAME: NATIONAL CHEMSEARCH CORP DATE OF NAME CHANGE: 19781009 10-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended April 30, 1996 Commission file number 1-5838 -------------- ------ NCH CORPORATION - ----------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 75-0457200 - --------------------------------------- --------------------------------- (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) P.O. Box 152170 2727 Chemsearch Boulevard Irving, Texas 75015 - ---------------------------------------- --------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (214)438-0211 -------------------------- Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on Title of each class which registered ------------------- ---------------- COMMON STOCK, $1 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 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. (X) Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: Approximate Aggregate Market Value* Total Shares of Shares Held by Outstanding Class Non-affiliates at July 18, 1996 - -------------------------- -------------- ---------------- COMMON STOCK, $1 PAR VALUE $ 418,789,900 7,528,807 - -------------------------- -------------- ---------------- *The approximate aggregate market value of the common stock held by non- affiliates is based on the closing price of these shares on the New York Stock Exchange on July 18, 1996. DOCUMENTS INCORPORATED BY REFERENCE: Portions of the Registrant's 1996 Annual Report to the Shareholders and definitive Proxy Statement relating to the Registrant's 1996 Annual Shareholders Meeting are incorporated by reference in Parts II and III of this Form 10-K. DOCUMENTS INCORPORATED BY REFERENCE Location in Form 10-K Incorporated Document PART II Item 5 - Market for the Registrant's Page 32 of the 1996 Common Equity and Related Shareholder Annual Report. Matters. Item 6 - Selected Financial Data. Page 18 of the 1996 Annual Report. Item 7 - Management's Discussion and Pages 18-20 of the 1996 Analysis of Financial Condition and Annual Report. Results of Operations. Item 8 - Financial Statements and Pages 21-32 of the 1996 Supplementary Data. Annual Report. PART III Item 10 - Directors and Executive Pages 2-4 of the Company's Officers of the Registrant. Proxy Statement dated June 25, 1996, in connection with its Annual Meeting to be held on July 25, 1996. Item 11 - Executive Compensation. Pages 4-7 of the Company's Proxy Statement dated June 25, 1996, in connection with its Annual Meeting to be held on July 25, 1996. Item 12 - Security Ownership of Certain Pages 10-11 of the Company's Beneficial Owners and Management. Proxy Statement dated June 25, 1996, in connection with its Annual Meeting to be held on July 25, 1996. Item 13 - Certain Relationships and Pages 3 and 9 of the Company's Related Transactions. Proxy Statement dated June 25, 1996, in connection with its Annual Meeting to be held on July 25, 1996. PART I Item 1. Business -------- NCH Corporation, a Delaware corporation, and its subsidiaries (herein collectively referred to as the "Company" or "NCH" unless the context requires differently) markets an extensive line of maintenance, repair and supply products to customers throughout the world. Products include specialty chemicals, fasteners, welding supplies, plumbing and electronic parts, and safety supplies. These products are marketed principally through the Company's own sales force. There have been no significant changes in the kind of products produced or marketed by the Company since the beginning of the last fiscal year, although individual products are continually added to and deleted from the product line. Sales are generally consistent throughout the year, with no significant seasonal fluctuations. Competitive conditions in the industry involved are severe and the Company believes that no one enterprise or group of enterprises has a dominant or preeminent position in the market. Further, the Company believes that no enterprise has a significant percentage of the market. No informative statement can be made as to the Company's rank in its industry. Not only do other concerns compete in the broad general range of maintenance, repair or supply products, but there are also many competitors who produce one or more products which compete with specific products sold by the Company. Competition in the industry is primarily on the basis of price, service and product performance. The Company's main emphasis is on service and product performance rather than price. Sales of Company products are not dependent upon a limited number of customers, and no particular customer accounts for more than 1.5% of sales. Qualified sales representatives are crucial to the Company's operations. In addition to industry competition, the Company competes with the entire business community for qualified sales representatives. This competition has been, and remains, severe. The Company has a required formal training program for its sales representatives consisting of in-house and field training. Turnover of new sales representatives in the first year is estimated to be approximately 82%, based on the Company's experience in the last three years. The cost of recruiting and training sales representatives was approximately $48 million, $46 million and $48 million for the years ended April 30, 1996, 1995 and 1994, respectively. The products that the Company markets are readily available from numerous sources. The Company buys raw materials and finished products from a large number of suppliers, none of whom would materially impact the sales or earnings of the Company should they cease to be a source of supply. In some foreign countries, licensees manufacture specialty chemical products for marketing by the Company's subsidiaries. Patents, franchises and concessions have not played an important role in the Company's business. Trademarks are extensively used on products, and are useful but not of paramount importance. As of the end of its last fiscal year the Company employed 10,543 persons. The Company employs 71 professional or technical persons on its laboratory staff ranging from Ph.D's to nongraduate chemical technicians. Although the laboratory staff spends time on research activities relating to the development of new products or services and the improvement of existing products or services, the staff is also engaged in quality control and customer service activities. Costs cannot be broken down between these various activities. The approximate amounts spent on laboratory operations in the years ended April 30, 1996, 1995 and 1994, were $4.6 million, $4.6 million and $4.4 million, respectively. All laboratory costs, including research and development, are expensed as incurred. The Company is subject to various federal, state and local laws and regulations affecting businesses in general, including environmental laws and regulations. Complying with all laws and regulations has not materially affected the Company's competitive position, earnings or capital expenditures. All laws and regulations are subject to change and the Company cannot predict what effect, if any, changes might have on its business. International sales are conducted through subsidiaries in Europe, Canada, Latin America, Australia and the Far East. Intercompany sales and profits have been eliminated from the following schedule. Corporate expenses are allocated between the geographic areas. Identifiable assets are those identified with the operations in each geographic area. Corporate assets includes portions of cash and cash equivalents and marketable securities. Financial information by geographic area, in thousands of dollars, follows for the years ended April 30: Latin United Pacific & America Consoli- States Europe Far East & Canada dated -------- ------- -------- -------- -------- 1996 Net Sales $412,027 $275,353 $35,727 $49,727 $772,834 Net Income 20,341 15,247 247 472 36,307 Identifiable Assets 256,625 126,041 17,789 21,094 421,549 Corporate Assets 92,855 1995 Net Sales $408,668 $244,517 $31,837 $50,076 $735,098 Net Income (Loss) 22,294 13,354 313 (379) 35,582 Identifiable Assets 246,926 123,659 17,792 20,383 408,760 Corporate Assets 120,377 1994 Net Sales $381,949 $222,214 $28,134 $47,690 $679,987 Net Income (Loss) 20,474 12,818 (310) (1,775) 31,207 Identifiable Assets 218,573 117,316 14,690 21,359 371,938 Corporate Assets 113,285 Sales between geographic areas and export sales from the United States are immaterial and are therefore not included in net sales disclosed in the above table. In the Company's experience, other than currency fluctuations, the overall risk of international operations has not been appreciably higher than domestic operations, although the risk of operations in any one country may be greater than in the United States. The Company is subject to the risks inherent in operating in foreign countries, including government regulation, currency restrictions and other restraints, risk of expropriation and burdensome taxes. Item 2. Properties ---------- The Company owns its world headquarters and domestic administrative center complex in Irving, Texas, containing approximately 319,000 square feet. The Company owns and operates 20 manufacturing facilities in 7 states and 11 foreign countries, located in Canada, Europe, Latin America and the Far East, containing approximately 1,234,000 square feet. These facilities also include related office and warehouse space. The Company owns and occupies a total of 17 office or office/warehouse combinations in 4 states and 6 foreign countries, located in Europe and Latin America, containing approximately 679,000 square feet. In addition, the Company leases additional warehouse space, manufacturing plants, and office space at various locations in the United States and abroad, none of which is material in relation to the Company's overall assets. During the last fiscal year the Company made investments, net of dispositions, of $17,573,000 ($18,396,000 gross) in capital property, plant and equipment. The plants and properties owned and operated by the Company are maintained in good condition and are believed to be suitable and adequate for the next several years. Item 3. Legal Proceedings ----------------- There are no material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which the Company or any of its subsidiaries is a party or of which any of their property is subject. From time to time, the Company is named as a potentially responsible party in proceedings involving compliance with environmental laws and regulations. Currently, there are no such proceedings involving monetary sanctions pending against the Company, or proceedings, singularly or in the aggregate, involving potential damages or expenditures in excess of 10% of the current assets of the Company. Item 4. Submission of Matters to a Vote of Security Holders --------------------------------------------------- No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report. Executive Officers of the Registrant ------------------------------------ The following are the executive officers of the Company as of June 1, 1996: Name Office Age - ---- ------ --- Lester A. Levy Chairman of the Board; Director 73 Milton P. Levy, Jr. Chairman of the Executive Committee; Director 70 Irvin L. Levy President; Director 67 Earl Nicholson Senior Vice President 74 James A. Stone Senior Vice President 74 Joe Cleveland Vice President and Secretary 62 Tom Hetzer Vice President - Finance 59 Glen Scivally Vice President and Treasurer 55 Messrs. Lester A. Levy, Milton P. Levy, Jr. and Irvin L. Levy are brothers. Each of the Company's executive officers has been an executive officer of the registrant for more than five years as his principal employment. PART II Item 5. Market for the Registrant's Common Equity and --------------------------------------------- Related Stockholder Matters --------------------------- Market and Dividend Information, appearing on page 32 of the 1996 Annual Report, is incorporated by reference herein. Item 6. Selected Financial Data ----------------------- Selected Financial Data, appearing on page 18 of the 1996 Annual Report, is incorporated by reference herein. Item 7. Management's Discussion and Analysis of --------------------------------------- Financial Condition and Results of Operations --------------------------------------------- Management's Discussion and Analysis of Financial Condition and Results of Operations, appearing on pages 18-20 of the 1996 Annual Report, is incorporated by reference herein. Item 8. Financial Statements and Supplementary Data ------------------------------------------- The Financial Statements and Supplementary Data, appearing on pages 21-32 of the 1996 Annual Report, is incorporated by reference 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 -------------------------------------------------- Information on directors of the registrant, found on pages 2-4 of the Company's Proxy Statement dated June 25, 1996, in connection with its Annual Meeting to be held July 25, 1996, is incorporated by reference herein. Information on executive officers of the registrant, found on page 10 of this report, is incorporated by reference herein. Item 11. Executive Compensation ---------------------- Information on executive compensation and transactions, found on pages 8-9 of the Company's Proxy Statement dated June 25, 1996, in connection with its Annual Meeting to be held July 25, 1996, is incorporated by reference herein. Item 12. Security Ownership of Certain Beneficial Owners and Management -------------------------------------------------------------- Information on security ownership of principal stockholders and management, found on pages 11-12 of the Company's Proxy Statement dated June 25, 1996, in connection with its Annual Meeting to be held on July 25, 1996, is incorporated by reference herein. Item 13. Certain Relationships and Related Transactions ---------------------------------------------- Information on certain relationships and related transactions, found on pages 3 and 9 of the Company's Proxy Statement dated June 25, 1996, in connection with its Annual Meeting to be held on July 25, 1996, is incorporated by reference herein. PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K ---------------------------------------------------------------- (a)(1) and (2): The response to this portion of Item 14 is submitted as a separate section of this report on pages 16-17. The information set forth on pages 16-17 of this report is incorporated by reference. The consolidated financial statements set forth on page 16 of this report are filed as part of this Form 10-K by incorporation by reference to pages 21-32 of the 1996 Annual Report. (a)(3) and (c): Exhibits. For a list of the exhibits filed as a part of this report, see the Index to Exhibits on page 20 of this report, which is incorporated by reference. (b) Reports on Form 8-K: No reports on Form 8-K were filed during the quarter ended April 30, 1996. (d) Not applicable. SIGNATURES The Issuer - ---------- Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, NCH Corporation has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Irving, and the State of Texas, on this 7th day of June, 1996. NCH CORPORATION, Registrant By /s/ Irvin L. Levy ------------------------------------ Irvin L. Levy, President Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of NCH Corporation and in the capacities and on the date indicated. Signature Capacity at Registrant Date - --------- ---------------------- ----------- /s/ Lester A. Levy Chairman of the Board; June 7, 1996 - ----------------------------- Director Lester A. Levy /s/ Milton P. Levy, Jr. Chairman of the Executive June 7, 1996 - ----------------------------- Committee; Director Milton P. Levy, Jr. /s/ Irvin L. Levy President; Director June 7, 1996 - ----------------------------- (Principal Executive Officer) Irvin L. Levy /s/ Tom Hetzer Vice President - Finance June 7, 1996 - ----------------------------- (Principal Accounting Officer) Tom Hetzer /s/ Robert L. Blumenthal Director June 7, 1996 - ----------------------------- Robert L. Blumenthal /s/ Rawles Fulgham Director June 7, 1996 - ----------------------------- Rawles Fulgham /s/ Jerrold M. Trim Director June 7, 1996 - ----------------------------- Jerrold M. Trim Thomas B. Walker Jr. * Director June 7, 1996 - ----------------------------- Thomas B. Walker Jr. * By: /s/ Lester A. Levy ----------------------- Lester A. Levy, as Attorney-In-Fact NCH CORPORATION AND SUBSIDIARY COMPANIES FORM 10-K ITEMS 8, 14(a)(1) and (2) and (a)(3) and (c) INDEX OF FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS The following consolidated financial statements are filed as part of this Form 10-K by incorporation by reference to pages 21-32 of the 1996 Annual Report. Consolidated Financial Statements: Statements of Income, Years Ended April 30, 1996, 1995 and 1994 Balance Sheets, April 30, 1996 and 1995 Statements of Cash Flows, Years Ended April 30, 1996, 1995 and 1994 Statements of Stockholders' Equity, Years Ended April 30, 1996, 1995 and 1994 Notes to Consolidated Financial Statements Independent Auditors' Report Selected Unaudited Quarterly Data, Years Ended April 30, 1996 and 1995 The following consolidated financial statement schedules of the registrant and its subsidiaries are included in Item 14(a)(2): Page ---- Consolidated Financial Statement Schedules Independent Auditors' Report 18 II - Valuation and Qualifying Accounts 19 Schedules other than those listed above are omitted because they are not required or are not applicable, the information required is immaterial in relation to the registrant's consolidated financial statements, or the required information is shown in the consolidated financial statements or notes thereto. Columns omitted from schedules filed have been omitted because the information is not applicable. INDEPENDENT AUDITORS' REPORT The Stockholders and Board of Directors NCH Corporation: Under date of June 5, 1996, we reported on the consolidated balance sheets of NCH Corporation and subsidiaries as of April 30, 1996 and 1995, and the related consolidated statements of income, stockholders' equity and cash flows for each of the years in the three-year period ended April 30, 1996, as contained in the 1996 Annual Report to Shareholders. These consolidated financial statements and our report thereon are incorporated by reference in the annual report on Form 10-K for the year ended April 30, 1996. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related consolidated financial statement schedule as listed in the accompanying index. This consolidated financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on this consolidated financial statement schedule based on our audits. In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. /s/ KPMG Peat Marwick LLP Dallas, Texas June 5, 1996 NCH CORPORATION AND SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (In Thousands)
Balance at Charged to Foreign Deductions-- Balance Beginning Costs and Currency Accounts at End of Description of Period Expenses Translation Written-Off Period - --------------------------- --------- ---------- ----------- ------------ -------- Reserves Deducted in the Balance Sheet from Assets to Which They Apply Allowances for Doubtful Accounts Year Ended April 30, 1996 $16,879 $7,697 $ (284) $8,033 $16,259 ======= ====== ====== ====== ======= Year Ended April 30, 1995 $16,469 $7,100 $ 713 $7,403 $16,879 ======= ====== ====== ====== ======= Year Ended April 30, 1994 $16,045 $8,568 $ (901) $7,243 $16,469 ======= ====== ====== ====== =======
INDEX TO EXHIBITS ----------------- Exhibit Sequentially Number Exhibit Numbered Page ------ ------- ------------- Exhibit 3.1 (1) Restated Certificate of Incorporation Exhibit 3.2 (1) Bylaws, as amended Exhibit 10.1 (1) (3) Form of 1980 Non-Qualified Stock Option Plan, as amended Exhibit 10.2 (1) (3) Form of Non-Qualified Stock Option Agreement Exhibit 10.5 (1) (3) Forms of Deferred Compensation Agreements with Messrs. Irvin, Lester, and Milton Levy Exhibit 10.7 (3) (4) Fourth and Fifth Amendments to Deferred Compensation Agreements with Messrs. Irvin, Lester, and Milton Levy Exhibit 10.8 (3) (5) Executive Committee Incentive Bonus Plan Exhibit 13 (2) Annual Report for the year ended April 30, 1996 (for information only and not filed) Exhibit 21 (2) Subsidiaries of the Registrant Exhibit 23 (2) Independent Auditors' Consent Exhibit 99 (2) Definitive Proxy Statement regarding the Company's 1996 Annual Meeting of Stockholders (1) Incorporated herein by reference to the exhibits with the same exhibit number and designation in the Registrant's report on Form 10-K for the fiscal year ended April 30, 1987, filed with the Securities and Exchange Commission. (2) Filed herewith. (3) Management contract or compensatory plan or arrangement required to be filed as an exhibit to this report pursuant to Item 14(c) of Form 10-K. (4) Incorporated herein by reference to the exhibit with the same exhibit number and designation in the Registrant's report on Form 10-K for the fiscal year ended April 30, 1995, filed with the Securities and Exchange Commission. (5) Incorporated herein by reference to the exhibit with the same exhibit number and designation in the Registrant's report on Form 10-K for the fiscal year ended April 30, 1994, filed with the Securities and Exchange Commission. NCH CORPORATION AND SUBSIDIARIES EXHIBIT 13 ANNUAL REPORT FOR THE YEAR ENDED APRIL 30, 1996 Selected Financial Data NCH Corporation and Subsidiaries (In Thousands Except Per Share Data) Years Ended April 30, 1996 1995 1994 1993 1992 -------- -------- -------- -------- -------- Net Sales $772,834 $735,098 $679,987 $679,937 $670,805 Net Income $ 36,307 $ 35,582 $ 31,207 $ 37,613 $ 39,435 Earnings Per Share $4.51 $4.29 $3.77 $4.53 $4.77 Current Ratio 3.3 to 1 3.5 to 1 3.6 to 1 3.7 to 1 3.2 to 1 Total Assets $514,404 $529,137 $485,223 $467,376 $470,827 Long-Term Debt $ 49 $ 4,761 $ 6,790 $ 8,795 $ 10,472 Retirement and Deferred Compensation Plans $ 99,915 $ 92,157 $ 83,986 $ 80,026 $ 78,628 Cash Dividends Declared Per Share $2.20 $2.15 $2.00 $2.00 $1.00 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND - --------------------------------------------------------------- RESULTS OF OPERATIONS - --------------------- Liquidity and Capital Resources - ------------------------------- In the fiscal year ended April 30, 1996, working capital decreased to $267.4 million from $288.0 million at April 30, 1995. The current ratio was 3.3 to 1 at April 30, 1996, compared to 3.5 to 1 at April 30, 1995. The total of cash, cash equivalents and marketable securities decreased by $24.5 million to $103.9 million at April 30, 1996. Net cash flow from operations totaled $48.3 million for fiscal 1996. Principal uses of cash consisted of treasury stock purchases of $37.3 million, payment of dividends of $17.7 million and net capital expenditures of $17.6 million. Management expects that operating cash flows will continue to generate sufficient funds to finance operating needs, capital expenditures and the payment of dividends. Long-term and short-term indebtedness has usually been limited to the borrowing of local country currencies by the Company's international subsidiaries to finance working capital requirements, although the Company has incurred debt domestically at various times when financially advantageous. The Company's international subsidiaries operate on a fiscal year ending on the last day of February. At February 29, 1996, the value of the U.S. dollar had increased nominally relative to most of the currencies in which the Company's international subsidiaries operate. As a result, the reported values of both assets and liabilities of the Company's international subsidiaries decreased slightly as a result of the change in the Company's composite spot rate at February 29, 1996, compared to February 28, 1995. This is reflected by the foreign currency translation component of stockholders' equity, which increased only $.3 million to an $18.7 million reduction of equity at April 30, 1996. As reported on the Consolidated Balance Sheets, accounts receivable decreased by $.6 million and inventories increased by $1.0 million in the year ended April 30, 1996. The decrease in accounts receivable was primarily the result of lower sales in certain of the domestic operations during the fourth quarter of the current year compared to the previous year. The change in accounts receivable presented in the Consolidated Statements of Cash Flows excludes the effect of exchange rates on the reported asset values and shows that accounts receivable decreased by $1.9 million compared to the end of the prior year. The $1.3 million difference is primarily in Europe where accounts receivable decreased when measured on a local currency basis, but increased when reported in U.S. dollars. Inventories increased in the current year in certain of the domestic operations, due to higher inventory requirements as a result of a trend of increasing sales and new products within existing product lines in several of the Company's domestic operations. Accounts payable, accrued expenses and income taxes payable decreased by $3.9 million as reported on the Consolidated Balance Sheets. Accounts payable and accrued expenses increased primarily in the Company's domestic operations as a result of increased inventory purchases and timing of certain payments, and was offset by a larger decrease in income taxes payable. Income taxes payable decreased in both the domestic and international operations due to the timing of payments in the current year as compared to the prior year and decreased pre-tax income during the current year in the domestic operations. Net capital expenditures for property, plant and equipment, were $17.6 million for the year ended April 30, 1996. These consisted of the installation and update of worldwide computer systems, other normal additions of data processing and operating equipment, and the initial construction phases of a $4.5 million warehouse/office facility for a domestic subsidiary. Capital expenditures for the upcoming year are anticipated to be less than current year expenditures. Deferred tax benefits represent future income tax deductions and, therefore, impact future cash flows by reducing federal income taxes to be paid in future years in which the temporary differences are expected to be recovered or settled. Management believes the Company will have sufficient future taxable income to make it more likely than not that the net deferred tax assets will be realized. Total bank indebtedness, comprised of long-term debt, current maturities of long-term debt and notes payable, decreased $1.1 million as reported on the Consolidated Balance Sheets. During the year, short-term borrowings, primarily in Europe, were repaid, and annual debt payments on domestic borrowings were made. Of the $3.8 million in long-term debt and current maturities, $3.7 million is currently domestic borrowing, principally an industrial revenue bond, for the purpose of financing a domestic facility. This industrial revenue bond is due in 2006, but is classified as a current liability as of April 30, 1996, due to redemption provisions in the loan agreement. The remaining long-term debt and current maturities and all $7.4 million of notes payable consist of international subsidiary borrowings in local country currencies used primarily to finance working capital requirements. The retirement and deferred compensation plan liability on the Consolidated Balance Sheets represents compensation deferred by employees and accrued interest on such deferrals, as well as accrued retirement benefits under non-qualified retirement plans. Deferred compensation is expensed as earned with a liability recorded for payment in future years. During fiscal year 1996, cash dividends paid amounted to $17.7 million ($2.20 per share) compared to $17.4 million in 1995 ($2.10 per share). The directors of the Company declared an extra cash dividend of $1.00 per share on September 13, 1995, which was paid December 15, 1995. On April 10, 1996, the directors of the Company declared a regular quarterly cash dividend of $.30 per share of Common Stock to be paid June 17, 1996, to shareholders of record June 3, 1996. As of April 30, 1996, dividends of $2.3 million had been declared, but not paid. Operating Results - ----------------- Net sales of $772.8 million in fiscal 1996 were 5% higher than net sales of $735.1 million in fiscal 1995. Net sales in fiscal year 1995 were 8% higher than fiscal 1994 net sales of $680.0 million. Domestic net sales increased 7% from fiscal 1994 to 1995, and 1% from fiscal 1995 to 1996. Net sales from total international operations increased 11% from fiscal 1995 to 1996 as reported in U.S. dollars and 6% when measured on a local currency basis. Total international net sales in fiscal 1995 increased 10% from 1994 as reported in U.S. dollars and 7% when measured on a local currency basis. Net sales in Europe increased 5% on a local currency basis from fiscal 1995 to 1996, as compared to a 6% increase in local currency net sales from fiscal 1994 to 1995. When reported in U.S. dollars, net sales in Europe increased 13% from fiscal 1995 to 1996. Net sales in the Pacific and Far East increased 9% on a local currency basis from fiscal 1995 to 1996 as compared to a 10% increase in local currency net sales from fiscal 1994 to 1995. Net sales in the Pacific and Far East increased 12% from fiscal 1995 to 1996 as reported in U.S. dollars. Net sales in Latin America and Canada increased 14% on a local currency basis from fiscal 1995 to 1996 compared to a 10% increase from 1994 to 1995. In fiscal 1996, net sales in Latin America and Canada were negatively affected by the increasing value of the U.S. dollar in relation to the currencies of Mexico and Venezuela. Net sales in Latin America and Canada as reported in U.S. dollars decreased 1% from fiscal 1995 to 1996. Operating income increased to $61.0 million in fiscal 1996 compared to $56.9 million in 1995 and $50.4 million in 1994. Domestic operating margins improved from fiscal 1995 to 1996, reflecting lower cost of sales and administrative expenses. Internationally, operating margins decreased slightly due to increased cost of sales and administrative expenses in fiscal 1996 compared to 1995. Operating income increased to $56.9 million in fiscal 1995 from $50.4 million in 1994. Domestically, operating margins in fiscal 1995 decreased from 1994 due to higher cost of sales and marketing expenses. International operating margins in fiscal 1995 improved due to cost reduction efforts and a turnaround in the Brazilian operation from a loss in 1994 to an operating profit in 1995. In fiscal year 1996, the Company reported net interest income of $1.2 million compared to net interest income of $2.5 million in 1995. There was a reduction in marketable securities during the current fiscal year which reduced interest income from the prior year. The $2.5 million in net interest income in fiscal 1995 compared to net interest income of $2.0 million in 1994. Loss on revaluation of foreign currencies was $.8 million in fiscal 1996 compared to a negligible gain in 1995, due to changes in the average net financial position of the Company's Latin American subsidiaries during 1996. In fiscal 1995, gain on currency revaluation was negligible compared to a loss of $.3 million in 1994. The Company enters into foreign exchange contracts and foreign currency option contracts from time to time to manage its exposure to foreign currency rate changes. The overall corporate tax rate for fiscal 1996 was 40.9% of pre-tax income compared to 40.2% in 1995 and 40.1% in 1994. Excluding the effect of foreign currency translation which is non- deductible, the tax rate for fiscal 1996 would be 40.4% compared to 40.2% in 1995. A reconciliation of the effective tax rates to U.S. statutory rates is contained in the Notes to Consolidated Financial Statements. Net income in fiscal year 1996 increased 2% to $36.3 million from $35.6 million in 1995. Net income in fiscal 1995 was 14% higher than the $31.2 million reported in 1994. Earnings per share increased 5% to $4.51 per share in fiscal 1996 due to the decrease in the weighted average number of common shares outstanding and the increase in net income during the current year. Earnings per share in fiscal 1995 were $4.29, a 14% increase from the $3.77 reported in 1994, due to higher net income in 1995. On a geographic area basis, net income for the United States decreased 9% to $20.3 million in fiscal year 1996, due to lower interest income and a higher effective income tax rate in 1996 compared to 1995. Net income of $22.3 million in fiscal 1995 was higher than the $20.5 million reported in 1994, primarily due to increased sales, higher interest income and a lower effective income tax rate in 1995 compared to 1994. Net income in Europe increased 14% from $13.4 million in fiscal 1995 to $15.2 million in 1996. The increase in net income from fiscal 1995 to 1996 was primarily attributable to increased sales in 1996 compared to 1995. Net income in fiscal 1994 was $12.8 million. The increase in net income from fiscal 1994 to 1995 was primarily attributable to the favorable effects of translation rates and increased sales in 1995 compared to 1994. Net income in the Pacific and Far East operations was $.2 million in fiscal 1996 compared to $.3 million in 1995. Net income of $.3 million was reported in fiscal 1995 compared to a net loss of $.3 million reported in 1994. The increase in net income from fiscal 1994 to 1995 was primarily attributable to a 13% increase in sales in 1995 compared to 1994. Latin America and Canada had net income of $.5 million in fiscal 1996 compared to a loss of $.4 million in 1995. A net loss of $.4 million was reported in fiscal 1995 compared to a net loss of $1.8 million reported in 1994. Income improvement in this area is primarily the result of a turnaround in the Brazilian operation. Recent Accounting Pronouncements - -------------------------------- In March 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long- Lived Assets to be Disposed Of." This statement requires that long-lived assets and certain identifiable intangibles to be held and used be reviewed for impairment, and an impairment loss be recognized under certain conditions. This statement also requires that long-lived assets and certain identifiable intangibles to be disposed of be reported at the lower of carrying amount or fair value less cost to sell. This statement must be adopted no later than the first quarter of fiscal 1997. Implementation of this statement is not expected to have a material effect on the Company's financial position or results of operations. In October 1995, the Financial Accounting Standards Board issued SFAS No. 123, "Accounting for Stock-Based Compensation." This statement allows a company to continue to measure compensation cost for employee stock compensation plans using the intrinsic value based method of accounting prescribed by APB Opinion No. 25, "Accounting for Stock Issued to Employees." Pro forma disclosures of net income and earnings per share are required, however, using the fair value based method of accounting defined in SFAS No. 123. The disclosure requirements of this statement are effective for fiscal year 1997. Implementation of this statement will not affect the Company's financial position or results of operations. Consolidated Statements of Income NCH Corporation and Subsidiaries (In Thousands Except Per Share Data) Years Ended April 30,
1996 1995 1994 -------- -------- -------- Net Sales $772,834 $735,098 $679,987 -------- -------- -------- Operating Expenses Cost of sales, including warehousing and commissions 407,141 388,620 358,317 Marketing and administrative expenses 304,692 289,534 271,286 -------- -------- -------- 711,833 678,154 629,603 -------- -------- -------- Operating Income 61,001 56,944 50,384 Other (Expenses) Income Revaluation of foreign currencies (789) 41 (340) Net interest 1,171 2,506 2,046 -------- -------- -------- Income before Income Taxes 61,383 59,491 52,090 Provision for Income Taxes 25,076 23,909 20,883 -------- -------- -------- Net Income $ 36,307 $ 35,582 $ 31,207 ======== ======== ======== Earnings Per Share $4.51 $4.29 $3.77 ===== ===== =====
The accompanying notes are an integral part of these financial statements. Consolidated Balance Sheets NCH Corporation and Subsidiaries (In Thousands Except Share and Per Share Data) As of April 30,
1996 1995 -------- -------- Assets Current Assets Cash and cash equivalents $ 21,806 $ 16,264 Marketable securities 82,077 112,074 Accounts receivable (less allowance for doubtful accounts of $16,259 and $16,879) 146,744 147,333 Inventories 106,907 105,864 Prepaid expenses 6,862 6,669 Deferred income taxes 18,471 15,853 -------- -------- Total Current Assets 382,867 404,057 -------- -------- Property, Plant and Equipment 199,700 187,030 Accumulated depreciation 110,983 101,812 -------- -------- 88,717 85,218 -------- -------- Deferred Income Taxes 26,105 23,940 -------- -------- Other 16,715 15,922 -------- -------- Total $514,404 $529,137 ======== ======== Liabilities and Stockholders' Equity Current Liabilities Notes payable to banks $ 7,448 $ 5,405 Current maturities of long-term debt 3,743 2,203 Accounts payable 54,194 54,330 Accrued expenses 29,824 27,464 Income taxes payable 17,997 24,148 Dividends payable 2,299 2,493 -------- -------- Total Current Liabilities 115,505 116,043 -------- -------- Long-Term Debt, less current maturities 49 4,761 -------- -------- Retirement and Deferred Compensation Plans 99,915 92,157 -------- -------- Stockholders' Equity Common stock, par value $1 per share, authorized 20,000,000 shares. Issued 11,769,304 shares 11,769 11,769 Additional paid-in capital 7,912 7,348 Retained earnings 429,687 410,932 Foreign currency translation adjustment (18,720) (18,412) Unrealized gains (losses) on investments 110 (255) -------- -------- 430,758 411,382 Less treasury stock (4,105,057 and 3,458,202 shares) 131,823 95,206 -------- -------- 298,935 316,176 -------- -------- Total $514,404 $529,137 ======== ========
The accompanying notes are an integral part of these financial statements. Consolidated Statements of Cash Flows NCH Corporation and Subsidiaries (In Thousands) Years Ended April 30,
1996 1995 1994 -------- -------- -------- Cash Flows from Operating Activities Net income $36,307 $35,582 $31,207 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 14,981 13,854 13,169 Provision for losses on accounts receivable 7,697 7,100 8,568 Deferred income taxes (5,150) (4,229) (4,576) Retirement and deferred compensation plans 8,143 7,536 4,066 Other noncash items (486) (2,120) 482 Change in assets and liabilities, excluding net assets acquired in the purchase of businesses: Accounts receivable (5,824) (13,535) (14,574) Inventories (995) (20,481) (11,584) Prepaid expenses (183) (34) (189) Accounts payable, accrued expenses and income taxes payable (4,020) 15,395 3,339 Other noncurrent assets (2,132) (1,079) (1,044) -------- -------- -------- Net cash provided by operating activities 48,338 37,989 28,864 -------- -------- -------- Cash Flows from Investing Activities Sales of property, plant and equipment 823 1,880 1,095 Purchases of property, plant and equipment (18,396) (13,455) (14,219) Redemptions of marketable securities 52,590 51,660 39,874 Purchases of marketable securities (22,031) (58,468) (50,781) Acquisitions of businesses - - (3,654) Other (1,012) (1,547) (1,655) -------- -------- -------- Net cash provided by (used in) investing activities 11,974 (19,930) (29,340) -------- -------- -------- Cash Flows from Financing Activities Proceeds from notes payable 2,487 106 7,886 Payments of notes payable (480) (5,048) (1,184) Additional long-term debt - 35 - Payments of long-term debt (3,275) (1,912) (1,963) Borrowing of cash surrender values 1,887 1,708 7,758 Payments of dividends (17,746) (17,419) (16,544) Purchases of treasury stock (37,283) - (3,422) Proceeds from exercise of stock options 1,077 1,649 430 -------- -------- -------- Net cash used in financing activities (53,333) (20,881) (7,039) -------- -------- -------- Effect of Exchange Rate Changes on Cash and Cash Equivalents (1,437) 332 (2,351) -------- -------- -------- Net Increase (Decrease) in Cash and Cash Equivalents 5,542 (2,490) (9,866) Cash and Cash Equivalents at Beginning of Year 16,264 18,754 28,620 -------- -------- -------- Cash and Cash Equivalents at End of Year $21,806 $16,264 $18,754 ======== ======== ========
The accompanying notes are an integral part of these financial statements. Consolidated Statements of Stockholders' Equity NCH Corporation and Subsidiaries (In Thousands Except Per Share Data)
Foreign Unrealized Common Treasury Common Treasury Additional Currency Gains Stock Stock Stock Stock Paid-In Retained Translation (Losses) on Shares Shares Amount Amount Capital Earnings Adjustment Investments Total ------- ------ ------ ------- ------- -------- ---------- ----------- -------- Balance, April 30, 1993 11,769 (3,447) $11,769 $(93,029) $6,065 $378,518 $(17,022) - $286,301 Net income 31,207 31,207 Cash dividends on common stock, $1.75 per share (14,463) (14,463) Dividend declared, but not paid, $.25 per share (2,069) (2,069) Treasury stock acquired (56) (3,422) (3,422) Treasury stock sold under stock option plans 8 228 202 430 Treasury stock issued under stock participation plan and stock bonuses 3 74 102 176 Foreign currency translation adjustment (5,078) (5,078) ------- ------ ------ ------- ------- -------- ---------- ----------- -------- Balance, April 30, 1994 11,769 (3,492) 11,769 (96,149) 6,369 393,193 (22,100) - 293,082 Net income 35,582 35,582 Cash dividends on common stock, $1.85 per share (15,350) (15,350) Dividend declared, but not paid, $.30 per share (2,493) (2,493) Treasury stock sold under stock option plans 31 877 772 1,649 Treasury stock issued under stock participation plan and stock bonuses 3 66 207 273 Foreign currency translation adjustment 3,688 3,688 Unrealized losses on investments $(255) (255) ------- ------ ------ ------- ------- -------- ---------- ----------- -------- Balance, April 30, 1995 11,769 (3,458) 11,769 (95,206) 7,348 410,932 (18,412) (255) 316,176 Net income 36,307 36,307 Cash dividends on common stock, $1.90 per share (15,253) (15,253) Dividend declared, but not paid, $.30 per share (2,299) (2,299) Treasury stock acquired (669) (37,283) (37,283) Treasury stock sold under stock option plans 20 574 503 1,077 Treasury stock issued under stock participation plan and stock bonuses 2 92 61 153 Foreign currency translation adjustment (308) (308) Unrealized gains on investments 365 365 ------- ------ ------ ------- ------- -------- ---------- ----------- -------- Balance, April 30, 1996 11,769 (4,105) $11,769 $(131,823) $7,912 $429,687 $(18,720) $ 110 $298,935 ======= ====== ====== ======= ======= ======== ========== =========== ========
The accompanying notes are an integral part of these financial statements. Notes to Consolidated Financial Statements NCH Corporation and Subsidiaries 1. Summary of Significant Accounting Policies Principles of consolidation - The consolidated financial statements include the accounts of NCH Corporation and its majority owned subsidiaries (the "Company"). Significant intercompany transactions and balances have been eliminated. A February fiscal year-end is used for most international subsidiaries in order to meet reporting requirements. Nature of operations - The Company markets an extensive line of maintenance, repair and supply products to customers throughout the world. Products include specialty chemicals, fasteners, welding supplies, plumbing and electronic parts and safety supplies. These products are marketed principally through the Company's own sales force. Use of estimates in the financial statements - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Foreign currency translation - With the exception of hyper-inflationary countries, all assets and liabilities of operations outside the United States are translated into U.S. dollars at period-end exchange rates, and income and expenses are translated at average rates for the year. Gains and losses resulting from translation, as well as gains and losses from foreign exchange contracts hedging the net assets of foreign subsidiaries, are included in the foreign currency translation adjustment component of stockholders' equity. Gains and losses from foreign exchange contracts hedging specific intercompany foreign currency commitments are deferred and accounted for as part of the hedged transaction. The hyper-inflationary countries have been translated into U.S. dollar equivalents as follows: current assets (except for inventories), current liabilities, long-term debt and other liabilities at period-end exchange rates; inventories, property, other assets, capital stock and retained earnings at historical rates; income and expense items at average rates for the year, except for cost of sales and depreciation expense, which are translated at historical rates. Gains and losses resulting from translation are recognized in the income statement as expense or income in the current period. Exchange adjustments resulting from foreign currency transactions are recognized as expense or income in the current period for all countries. Cash and cash equivalents and marketable securities - Cash and cash equivalents include cash on hand, cash in banks and all highly liquid investments with a maturity of three months or less at the time of purchase. Cash equivalents are stated at amortized cost plus accrued interest. Marketable securities are stated at estimated fair value. Inventories - Raw materials, sales supplies and purchased finished goods are stated at a moving average cost, which approximates cost on a first-in, first-out basis and is not in excess of market value. Manufactured finished goods are stated at an amount approximating cost of manufacturing, which is not in excess of net realizable value. Property, plant and equipment - These assets are recorded at cost. When these assets are disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in income during that year. The cost of maintenance and repairs is charged to expense as incurred, whereas expenditures that substantially increase the useful lives of plant or equipment are capitalized. Depreciation - Depreciation on buildings and equipment is provided for financial statement purposes using the straight-line method over the estimated useful lives of the related assets. Depreciation on certain buildings and equipment is provided for income tax purposes using accelerated methods. Intangible assets - Intangible assets are classified as other assets in the consolidated financial statements and include patents, computer software and trademarks. Intangible assets are amortized using the straight-line method over their estimated useful lives, but not in excess of 40 years. The unamortized cost of impaired intangible assets is charged to expense when impairment occurs. Research and development - Research and development costs, which are included in the costs of laboratory operations, are charged to expense as incurred. Research and development costs, however, cannot be separately identified from the total laboratory costs. Total laboratory costs amounted to approximately $4.6 million in 1996, $4.6 million in 1995 and $4.4 million in 1994. Income taxes - Deferred income taxes result from temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. State income tax has been included in the provision for income taxes and income taxes payable. Treasury stock - Treasury stock is stated at cost. Retirement plans - The Company's policy is to fund its qualified retirement type plans as accrued. The cost of these retirement benefits for past service has been fully funded. Non-qualified retirement plans are not funded, but provision for the estimated liabilities arising from these plans has been made in the consolidated financial statements. Postretirement benefits other than pensions - The Company charges to expense the estimated future costs of retiree health care benefits during the years that employees render service. The postretirement health care benefit plan is not funded. Stock options - The Company issues shares from its treasury as options are exercised. When an option is exercised, treasury stock is credited with the average cost of the treasury shares issued, and additional paid-in capital is charged or credited for the difference between the option price and the average cost of the treasury shares. No charge to income is made in connection with the stock option plan. Earnings per share - Earnings per share is computed by dividing net incomeby the weighted average number of shares outstanding during each year. The weighted average number of shares outstanding for the years ended April 30, 1996, 1995 and 1994, was 8,052,000, 8,294,000 and 8,278,000 shares, respectively. Any dilution of earnings per share that might result from the exercise of presently outstanding stock options is not material. 2. Consolidated International Subsidiaries At April 30, 1996 and 1995, the parent Company's investment in consolidated international subsidiaries amounted to $43,931,000 and $40,402,000. The current year consolidated financial statements include international subsidiaries' assets of $164,924,000, liabilities of $72,452,000 and net income of $15,966,000, after allocation of corporate expenses and excluding intercompany sales and profits. For the prior year these subsidiaries had assets of $161,834,000, liabilities of $69,115,000 and net income of $13,288,000. 3. Income Taxes The following are the components of the provision for income taxes (in thousands of dollars): 1996 1995 1994 -------- -------- -------- U.S. Federal - ------------ Current $10,675 $ 9,810 $ 9,896 Deferred (4,075) (4,411) (4,469) Foreign - ------- Current 17,421 16,715 14,214 Deferred (721) 182 (107) State 1,776 1,613 1,349 -------- -------- -------- $25,076 $23,909 $20,883 ======== ======== ======== Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The components of deferred tax assets and liabilities as of April 30 are as follows (in thousands of dollars): Deferred tax assets: 1996 1995 -------- -------- Allowance for doubtful accounts $ 4,172 $ 3,948 Inventory related 3,672 3,710 Insurance related 3,118 1,948 Accrued expenses 6,055 5,967 Retirement and deferred compensation plans 32,281 29,204 Marketable securities (59) 138 Foreign operating loss carryforwards 760 487 Valuation allowance (94) (156) -------- -------- 49,905 45,246 -------- -------- Deferred tax liabilities: Depreciation 4,372 4,489 Other 957 964 -------- -------- 5,329 5,453 -------- -------- Net deferred tax asset $44,576 $39,793 ======== ======== A valuation allowance has been provided for certain foreign net operating loss carryforwards which are estimated to expire before they are utilized. The decreases in the valuation allowance during the years ended April 30, 1996 and 1995 were $62,000 and $87,000, respectively. The following is a reconciliation of the difference between the U.S. statutory income tax rate and the effective tax rate: 1996 1995 1994 ------ ------ ------ U.S. statutory rate 35.0% 35.0% 35.0% Tax exempt interest (2.2) (2.5) (2.3) Other .8 (.1) .2 Effect of international 5.5 6.1 5.6 operations Effect of state income 1.8 1.7 1.6 taxes ------ ------ ------ Effective tax rate 40.9% 40.2% 40.1% ====== ====== ====== The Company files a consolidated U.S. federal income tax return with its domestic subsidiaries. International subsidiaries file tax returns in countries of their incorporation. In addition, branches of certain U.S. and international companies file tax returns in countries in which they conduct business. Certain of these subsidiaries have operating loss carryforwards totaling approximately $2,615,000, which will expire between 1997 and 2001. The accumulated undistributed earnings of international subsidiaries not included in the consolidated U.S. federal income tax return approximated $69,286,000 at April 30, 1996, $73,555,000 at April 30, 1995 and $69,378,000 at April 30, 1994. No provision is made in the accompanying consolidated financial statements for the estimated taxes that would result on distribution of the accumulated undistributed earnings since the Company intends to invest indefinitely in the operations of these subsidiaries. For 1996, 1995 and 1994, worldwide income tax payments amounted to $33,668,000, $22,624,000 and $24,176,000, respectively. 4. Inventories A summary of inventories at April 30 follows (in thousands of dollars): 1996 1995 -------- -------- Raw materials $ 15,387 $ 15,551 Finished goods 89,381 88,089 Sales supplies 2,139 2,224 -------- -------- $106,907 $105,864 ======== ======== 5. Property, Plant and Equipment Property, plant and equipment at April 30 consists of the following (in thousands of dollars): 1996 1995 -------- -------- Land $ 12,047 $ 11,677 Buildings 81,212 77,825 Equipment 106,441 97,528 -------- -------- $199,700 $187,030 ======== ======== Depreciation charged to income was $13,595,000, $12,452,000 and $11,863,000 for each of the years ended April 30, 1996, 1995 and 1994, respectively. The estimated useful life of buildings is 25 to 40 years; equipment is 3 to 10 years. 6. Long-Term Debt Long-term debt at April 30 consists of the following (in thousands of dollars): 1996 1995 ------ ------ Borrowed by domestic companies: Variable interest industrial revenue bond, secured by property, at 71.9% of prime. $3,700 $4,700 Other 40 2,210 ------ ------ 3,740 6,910 ------ ------ Borrowed by international companies 52 54 ------ ------ 3,792 6,964 Less current maturities 3,743 2,203 ------ ------ Long-term debt, less current maturities $ 49 $4,761 ====== ====== Maturities of long-term debt for the years following April 30, 1996, are as follows: 1997 - $43,000; 1998 - $40,000; 1999 - $9,000 and 2006 - $3,700,000. At April 30, 1996, the industrial revenue bond of $3,700,000 has been classified as current based on call provisions in the loan agreement. 7. Employee Benefits Retirement plans - The parent and its domestic subsidiaries have various qualified retirement type plans covering substantially all domestic employees. None of these plans have defined benefits. Some of the international subsidiaries also have non-defined benefit retirement plans. These plans are funded on a current basis, and the cost of retirement benefits for past service has been fully funded. In addition, the Company has non-qualified deferred compensation plans for the primary purpose of providing retirement benefits. These plans are not funded, but provision for the estimated liabilities arising from these plans has been made in the consolidated financial statements. Expenses for retirement plans, exclusive of interest expense, were $10,510,000, $9,877,000 and $8,343,000 in the years ended April 30, 1996, 1995 and 1994, respectively. Postretirement benefits other than pensions - The Company and several of its domestic subsidiaries initiated a postretirement health care benefit plan in fiscal 1993, covering substantially all domestic employees. Eligible retirees receive a specific contribution from the Company toward the cost of the health plan, which is a supplement to Medicare. The amount of the contribution is based on years of service with the Company at retirement. The plan is not funded; retiree health benefits are paid as covered expenses are incurred. Provision has been made in the accompanying consolidated financial statements for the net postretirement benefit expense of this plan. Net postretirement benefit expenses for the years ended April 30 are as follows (in thousands of dollars): 1996 1995 1994 ------ ------ ------ Service cost - benefits earned during the year $146 $ 98 $127 Interest cost on accumulated postretirement benefit obligation 202 179 162 Net amortization of prior service cost 176 176 176 ------ ------ ------ Net postretirement benefit expense $524 $453 $465 ====== ====== ====== The reconciliation of the accumulated postretirement benefit obligation to the recorded liability at April 30 is as follows (in thousands of dollars): 1996 1995 ------ ------ Accumulated postretirement benefit obligation Retirees $ 291 $ 233 Fully eligible active plan participants 1,422 1,234 Other active plan participants 1,396 1,333 ------ ------ Total 3,109 2,800 Unrecognized prior service cost (1,291) (1,467) ------ ------ Accrued postretirement benefit liability $1,818 $1,333 ====== ====== Measurement of the accumulated postretirement benefit obligation is based on a 7% assumed discount rate for 1996 and 1995. Certain of the Company's non-U.S. subsidiaries have health care plans for retirees, although many retirees outside of the United States are covered by government sponsored and administered programs. Under SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," the effective date for adoption for plans outside of the United States was the fiscal year beginning May 1, 1995. Implementation of this standard for non-U.S. subsidiary plans did not have a material effect on the Company's financial position or results of operations for the current year. Other - The Company has some split dollar life insurance agreements, whereby the Company pays a portion of the premiums. The Company has been granted a security interest in the cash value and death benefit of each policy,to the extent of the sum of premium payments made by the Company. Premiums paid by the Company are charged to expense to the extent they exceed the cash values of each policy. 8. Capital Stock and Options None of the Company's authorized 500,000 shares of $1 par value Preferred Stock has been issued. On April 10, 1996, the directors of the Company declared a regular quarterly cash dividend of $.30 per share of Common Stock to be paid June 17, 1996, to shareholders of record June 3, 1996. At April 30, 1996, 1995 and 1994, 710,000, 730,000 and 761,000 shares of the Company's Common Stock, respectively, were reserved for issuance under a non-qualified stock option plan which grants options to key employees and officers. The purchase price under the grant cannot be less than the market value at the date of grant. The options under such plan are exercisable in equal amounts at the beginning of the second, third and fourth year of their lives and expire after five years. Information relative to the non-qualified stock options for the three years ended April 30, 1996, is as follows: (In Thousands Except Per Share Data) Years Ended April 30, --------------------------------------------------- 1996 1995 1994 --------------- --------------- --------------- Average Average Average Number Price Number Price Number Price of Per of Per of Per Shares Share Shares Share Shares Share ------ ------ ------ ------ ------ ------ Outstanding at beginning of period 243 $59.41 212 $57.97 154 $59.22 Granted 72 55.25 64 61.00 67 53.75 Exercised (20) 54.00 (31) 53.12 (8) 47.18 Canceled or expired (15) 57.46 (2) 55.84 (1) 56.65 ------ ------ ------ ------ ------ ------ Outstanding at end of period 280 $58.81 243 $59.41 212 $57.97 ====== ====== ====== ====== ====== ====== At April 30, 1996, 1995 and 1994, 19,000, 19,000 and 20,000 shares of Treasury Stock, respectively, were reserved for issuance to employees under a stock participation plan. 9. Interest Costs During the years ended April 30, 1996, 1995 and 1994, interest costs, including interest expense on non-funded retirement plans, amounting to $5,231,000, $5,720,000 and $5,115,000, respectively, were expensed as incurred. For the same periods, interest payments were $2,951,000, $3,540,000 and $4,200,000, respectively. 10. Leases At April 30, 1996, the Company and its subsidiaries had a number of noncancellable leases for various office and warehouse facilities. The majority of these agreements expire at various times through 1999, and substantially all include renewal provisions. The amount of other obligations assumed, such as payment of property taxes and maintenance, is nominal. Total rent expense for 1996, 1995 and 1994 (including operating leases on data processing equipment, trucks and trailers, and office equipment) was approximately $11,798,000, $9,035,000 and $8,538,000, respectively. The minimum aggregate rentals under the terms of noncancellable operating leases for future years are: 1997 - $8,564,000; 1998 - $6,682,000; 1999 - $5,024,000; 2000 - $3,102,000; and a total of $8,378,000 for 2001 and thereafter. 11. Contingent Liabilities The Company and its subsidiaries are engaged in a variety of legal proceedings arising in the ordinary course of business, including some concerning environmental matters. In the opinion of Management, the ultimate liabilities resulting from these proceedings will not have a material adverse effect on the Company's financial position or operating results. Gains or losses resulting from contracts hedging net foreign currency positions have been included in the foreign currency translation adjustment component of stockholders' equity. Gains and losses from all other contracts are included in the Consolidated Statements of Income. There were no such contracts at April 30, 1996 or 1995. In addition, at April 30, 1996 and 1995, the Company had standby letters of credit outstanding totaling $5,300,000 and $8,890,000, respectively, which guarantee payment to certain insurance carriers. 12. Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, notes payable to banks and current maturities of long-term debt approximate fair value, because of the short maturities of these financial instruments. The fair values of marketable securities are based on quoted market prices obtained from an independent broker. The fair value of long-term debt, less current maturities, is estimated based on the discounted value of future cash flows, using the Company's current borrowing rate for loans of comparable terms and maturities. Using the above methods and assumptions, the estimated fair values of the Company's financial instruments at April 30 are as follows (in thousands of dollars): 1996 1995 --------------------- --------------------- Estimated Estimated Carrying Fair Carrying Fair Amount Value Amount Value -------- -------- -------- -------- Assets: Cash and cash equivalents $ 21,806 $ 21,806 $ 16,264 $ 16,264 Marketable securities 82,077 82,077 112,074 112,074 Liabilities: Notes payable to banks 7,448 7,448 5,405 5,405 Current maturities of long-term debt 3,743 3,743 2,203 2,203 Long-term debt, less current maturities 49 49 4,761 3,924 13. Marketable Securities The Company classifies all of its investments in securities which do not meet the definition of cash equivalents as marketable securities available - -for-sale. Available-for-sale securities are reported at fair value with unrealized gains and losses (net of deferred income taxes) recognized on the balance sheet as a separate component of stockholders' equity. Fair values are based on quoted market prices obtained from an independent broker. Realized gains and losses are included in other income and are immaterial. The cost of securities sold is based on the specific identification method. The following is a summary of available-for-sale marketable securities as of April 30 (in thousands of dollars): Government Bonds, Treasury Notes and Certificates Treasury Bills of Deposit Total -------------- ----------- ------- 1996 - ---- Cost $81,608 $300 $81,908 Gross Unrealized Losses (261) - (261) Gross Unrealized Gains 430 - 430 -------- ---- -------- Estimated Fair Value $81,777 $300 $82,077 ======== ==== ======== 1995 - ---- Cost $112,044 $423 $112,467 Gross Unrealized Losses (609) - (609) Gross Unrealized Gains 216 - 216 -------- ---- -------- Estimated Fair Value $111,651 $423 $112,074 ======== ==== ======== The contractual maturities of the marketable securities at estimated fair value as of April 30, 1996 are as follows: 1997-$36,548,000; 1998-$24,334,000; 1999-$17,932,000; and 2000-$3,263,000. 14. Segment and Geographic Area Information The Company's operations are predominantly within one business segment, which includes specialty chemicals, fasteners, welding supplies, plumbing and electronic parts, and safety supplies. Substantially all of these products are sold for repair, maintenance or industrial supply use. Financial information by geographic area, in thousands of dollars, follows for the years ended April 30: Latin United Pacific & America Consoli- States Europe Far East & Canada dated ------- -------- --------- -------- -------- 1996 Net Sales $412,027 $275,353 $35,727 $49,727 $772,834 Net Income 20,341 15,247 247 472 36,307 Identifiable Assets 256,625 126,041 17,789 21,094 421,549 Corporate Assets 92,855 1995 Net Sales $408,668 $244,517 $31,837 $50,076 $735,098 Net Income (Loss) 22,294 13,354 313 (379) 35,582 Identifiable Assets 246,926 123,659 17,792 20,383 408,760 Corporate Assets 120,377 1994 Net Sales $381,949 $222,214 $28,134 $47,690 $679,987 Net Income (Loss) 20,474 12,818 (310) (1,775) 31,207 Identifiable Assets 218,573 117,316 14,690 21,359 371,938 Corporate Assets 113,285 Intercompany sales and profits have been eliminated from the above schedule. Corporate expenses were allocated between the geographic areas. Identifiable assets are those identified with the operations in each geographic area. Corporate assets consist primarily of portions of cash and cash equivalents and marketable securities. INDEPENDENT AUDITORS' REPORT The Stockholders and Board of Directors NCH Corporation: We have audited the accompanying consolidated balance sheets of NCH Corporation and subsidiaries as of April 30, 1996 and 1995, and the related consolidated statements of income, stockholders' equity, and cash flows for each of the years in the three-year period ended April 30, 1996. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of NCH Corporation and subsidiaries as of April 30, 1996 and 1995, and the results of their operations and their cash flows for each of the years in the three-year period ended April 30, 1996, in conformity with generally accepted accounting principles. /s/ KPMG Peat Marwick LLP Dallas, Texas June 5, 1996 RESPONSIBILITY FOR FINANCIAL REPORTING The management of the Company is responsible for the financial information and representations contained in the financial statements and other sections of the annual report. The financial statements have been prepared in conformity with generally accepted accounting principles, and therefore include informed estimates and judgments. The Company's system of internal control is designed to provide reasonable, but not absolute, assurance as to the integrity, objectivity and reliability of the financial records and the safeguarding of assets. Management believes that, within a cost-effective framework, the Company's accounting controls provide reasonable assurance that material errors or irregularities are prevented or would be detected within a relatively short period of time. The possibility exists, however, that errors or irregularities may occur and not be detected. The Company has a program of internal audits and follow-up, covering separate Company operations and functions in the U.S. and its international subsidiaries. The Board of Directors pursues its review of the audit function, internal controls and the financial statements largely through its Audit Committee, which consists solely of directors who are not employees of the Company. The Audit Committee periodically meets with management, the independent auditors and internal auditors with regard to their respective responsibilities. Both KPMG Peat Marwick LLP and the internal auditors have full access to the Audit Committee. They meet with the committee, without management present, to discuss the scope and results of their examination, including internal control and financial reporting matters. Management also recognizes its responsibility for fostering a strong ethical climate so that the Company's affairs are conducted according to the highest standards of personal and corporate conduct. This responsibility is characterized and reflected in the Company's code of corporate conduct, which is publicized throughout the Company. The code of conduct addresses, among other things, the necessity of ensuring open communication within the Company; potential conflicts of interests; compliance with all domestic and foreign laws, including those relating to financial disclosure; and the confidentiality of proprietary information. The Company maintains a systematic program to assess compliance with these policies. /s/ Irvin L. Levy /s/ Tom Hetzer - ----------------- -------------- Irvin L. Levy Tom Hetzer Chief Executive Officer Chief Financial Officer Selected Unaudited Quarterly Data (In Thousands Except Per Share Data) Years Ended April 30, Quarter -------------------------------------------- First Second Third Fourth -------- -------- -------- -------- 1996 Net Sales $192,153 $194,424 $195,679 $190,578 Operating Income 13,550 17,777 13,483 16,191 Net Income 8,203 10,588 7,269 10,247 Earnings Per Share $1.00 $1.30 $.90 $1.31 1995 Net Sales $178,728 $184,641 $186,562 $185,167 Operating Income 13,060 16,786 12,476 14,622 Net Income 7,826 10,704 7,036 10,016 Earnings Per Share $.95 $1.29 $.85 $1.21 Earnings per share for each period is calculated based on the average number of shares outstanding during the period. Market and Dividend Information NCH Corporation stock is traded on the New York Stock Exchange. The high and low prices by quarter are shown for the past two years in the schedule below. Cash dividends paid during the fiscal year ended April 30, 1996, amounted to $17.7 million compared to $17.4 million and $16.5 million in fiscal years 1995 and 1994, respectively. On April 10, 1996, a dividend of $.30 per share was declared, payable June 17, 1996. A summary of the quarterly dividends per share for the past two years is set forth in the schedule below. Common Stock Prices Dividends Per Share ----------------------------------- -------------------------- 1996 1995 Declared Paid --------------- --------------- ------------ ------------ Quarter High Low High Low 1996 1995 1996 1995 ------ ------ ------ ------ ----- ----- ----- ----- First 64 1/4 54 1/2 62 1/8 56 5/8 $ .30 $ .25 $ .30 $ .25 Second 60 5/8 53 66 3/4 60 3/4 $1.30 $1.30 $ .30 $ .25 Third 58 1/4 52 3/4 67 59 1/2 $ .30 $ .30 $1.30 $1.30 Fourth 58 1/4 52 1/2 65 1/4 59 1/4 $ .30 $ .30 $ .30 $ .30 As of June 3, 1996, there were 645 holders of record of the Company's Common Stock, which includes several brokerage firms that hold shares of the Company's stock for an estimated 3,800 investors. NCH CORPORATION AND SUBSIDIARIES EXHIBIT 21 SUBSIDIARIES OF THE REGISTRANT NCH Corporation is the parent company of numerous wholly-owned subsidiaries engaged in the business of marketing an extensive line of maintenance, repair and supply products. At the close of the last fiscal year, sixteen of these subsidiaries were operating domestically and 126 in foreign countries. The Company is also the parent of several wholly-owned subsidiaries that market various other products. All such subsidiaries considered in the aggregate as a single subsidiary would not constitute a significant subsidiary of NCH Corporation, and therefore are not listed here. As of the close of the last fiscal year, the following corporation was not wholly-owned by NCH Corporation: Immediate Parent and Jurisdiction Name of Subsidiary Percentage of Ownership of Incorporation - ------------------ ----------------------- ---------------- NCH Hua Yang Ltd. 51% NCH Corporation People's Republic of China Sunco Chemicals Ltd. 51% NCH Corporation India NCH CORPORATION AND SUBSIDIARIES EXHIBIT 23 INDEPENDENT AUDITORS' CONSENT The Board of Directors NCH Corporation: We consent to incorporation by reference in the registration statement (No. 33-65206) on Form S-8 of NCH Corporation of our reports dated June 5, 1996, relating to the consolidated balance sheets of NCH Corporation and subsidiaries as of April 30, 1996 and 1995, and the related consolidated statements of income, stockholders' equity, and cash flows and related schedule for each of the years in the three-year period ended April 30, 1996, which reports appear in or are incorporated by reference in the April 30, 1996 annual report on Form 10-K of NCH Corporation. /s/ KPMG Peat Marwick LLP Dallas, Texas July 23, 1996 NCH CORPORATION AND SUBSIDIARIES EXHIBIT 99 DEFINITIVE PROXY STATEMENT REGARDING THE COMPANY'S 1996 ANNUAL MEETING OF STOCKHOLDERS SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant [ X ] Filed by a party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [ X ] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 NCH Corporation - ----------------------------------------------------------------- (Name of Registrant as Specified in Its Charter) NCH Corporation - ----------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement) Payment of Filing Fee (Check the appropriate box): [ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A. [ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: (2) Form, Schedule or Registration Statement No.: (3) Filing Party: (4) Date Filed: [LOGO] 2727 Chemsearch Boulevard Irving, Texas 75062 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS To Be Held July 25, 1996 NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of NCH Corporation will be held in the Gourmet Rooms I and II of the Crescent Club, 17th Floor, 200 Crescent Court (at the corner of Pearl and Cedar Springs Streets), Dallas, Texas, on Thursday, the 25th day of July, 1996, at 10:00 a.m., Central Daylight Time, for the following purposes: 1. To elect three Class II directors of NCH to hold office until the next annual election of Class II directors by stockholders or until their respective successors are duly elected and qualified. 2. To approve the amendments to the incentive bonus plan for members of the Executive Committee of the Board of Directors. 3. To ratify the appointment of KPMG Peat Marwick LLP, Certified Public Accountants, to be the independent auditors of NCH for the fiscal year ending April 30, 1997. 4. To transact such other business as may properly come before the meeting or any adjournments of the meeting. The Board of Directors has fixed the close of business on Monday, June 3, 1996, as the record date for determining stockholders entitled to vote at and to receive notice of the annual meeting. Whether or not you expect to attend the meeting in person, you are urged to complete, sign, and date the enclosed form of proxy and return it promptly so that your shares of stock may be represented and voted at the meeting. If you are present at the meeting, your proxy will be returned to you if you so request. Joe Cleveland, Secretary Dated: June 25, 1996 [LOGO] 2727 Chemsearch Boulevard Irving, Texas 75062 PROXY STATEMENT For ANNUAL MEETING OF STOCKHOLDERS To Be Held on July 25, 1996 Dated: June 25, 1996 SOLICITATION AND REVOCABILITY OF PROXIES The accompanying proxy is solicited by the management of, and on behalf of, NCH Corporation, a Delaware corporation ("NCH"), to be voted at the Annual Meeting of the Stockholders of NCH, to be held Thursday, July 25, 1996 (the "Meeting"), at the time and place and for the purposes set forth in the accompanying Notice of Annual Meeting. When properly executed proxies in the accompanying form are received, the shares represented thereby will be voted at the Meeting in accordance with the directions noted on the proxies; if no direction is indicated, then such shares will be voted for the election of the directors and in favor of the proposals set forth in the Notice of Annual Meeting attached to this Proxy Statement. The enclosed proxy confers discretionary authority to vote with respect to any and all of the following matters that may come before the Meeting: (1) matters that NCH's Board of Directors does not know a reasonable time before the Meeting are to be presented at the Meeting; and (2) matters incidental to the conduct of the Meeting. Management does not intend to present any business for a vote at the Meeting other than the matters set forth in the accompanying Notice of Annual Meeting, and it has no information that others will do so. If other matters requiring the vote of the stockholders properly come before the Meeting, then, subject to the limitations set forth in the applicable regulations under the Securities Exchange Act of 1934, it is the intention of the persons named in the attached form of proxy to vote the proxies held by them in accordance with their judgment on such matters. Any stockholder giving a proxy has the power to revoke that proxy at any time before it is voted. A proxy may be revoked by filing with the Secretary of NCH either a written revocation or a duly executed proxy bearing a date subsequent to the date of the proxy being revoked. Any stockholder may attend the Meeting and vote in person, whether or not such stockholder has previously submitted a proxy. In addition to soliciting proxies by mail, officers and regular employees of NCH may solicit the return of proxies. Brokerage houses and other custodians, nominees, and fiduciaries may be requested to forward solicitation material to the beneficial owners of stock. This Proxy Statement and the accompanying proxy are first being sent or given to NCH's stockholders on or about June 25, 1996. NCH will bear the cost of preparing, printing, assembling, and mailing the Notice of Annual Meeting, this Proxy Statement, the enclosed proxy, and any additional material, as well as the cost of forwarding solicitation material to the beneficial owners of stock. VOTING RIGHTS The record date for determining stockholders entitled to notice of and to vote at the Meeting is the close of business on June 3, 1996. On that date there were 7,600,947 shares issued and outstanding of NCH's $1.00 par value common stock ("Common Stock"), which is NCH's only class of voting securities outstanding. Each share of NCH's Common Stock is entitled to one vote in the matter of election of directors and in any other matter that may be acted upon at the Meeting. Neither NCH's certificate of incorporation nor its bylaws permits cumulative voting. The presence, in person or by proxy, of the holders of a majority of the outstanding shares of Common Stock entitled to vote at the Meeting is necessary to constitute a quorum at the Meeting, but in no event will a quorum consist of less than one-third of the shares entitled to vote at the Meeting. The affirmative vote of a plurality of the shares of Common Stock represented at the Meeting and entitled to vote is required to elect directors. All other matters to be voted on will be decided by a majority of the shares of Common Stock represented at the meeting and entitled to vote. Abstentions and broker nonvotes are each included in determining the number of shares present at the meeting for purposes of determining a quorum. Abstentions and broker nonvotes have no effect on determining plurality, except to the extent that they affect the total votes received by any particular candidate. ELECTION OF DIRECTORS NCH's Board of Directors consists of seven members, divided into three classes: Class I (two directors), Class II (three directors), and Class III (two directors). Only the Class II positions are due for nomination and election at the Meeting. The Class I and Class III positions will be due for nomination and election at the annual meetings of stockholders to be held in 1998 and 1997, respectively. The intention of the persons named in the enclosed proxy, unless such proxy specifies otherwise, is to vote the shares represented by such proxy for the election of Thomas B. Walker, Jr., Milton P. Levy, Jr., and Robert L. Blumenthal as the Class II directors. Messrs. Thomas B. Walker, Jr., Milton P. Levy, Jr., and Robert L. Blumenthal have been nominated to stand for re-election by the Board of Directors until their terms expire or until their respective successors are duly elected and qualified. Messrs. Thomas B. Walker, Jr., Milton P. Levy, Jr., and Robert L. Blumenthal are presently directors of NCH. Messrs. Irvin, Lester, and Milton Levy are brothers. Robert L. Blumenthal is a first cousin of Messrs. Irvin, Lester, and Milton Levy. Certain information regarding each nominee and director is set forth below. The number of shares beneficially owned by each nominee is listed under "Security Ownership of Principal Stockholders and Management." Class I Directors Rawles Fulgham, 68, has been a director of NCH since 1981. Mr. Fulgham was an executive director of Merrill Lynch Private Capital Inc. from 1982 until 1989, when he assumed his current position as a Senior Advisor to Merrill Lynch & Co., Inc. He is also a director of Dresser Industries, Inc., Global Industrial Technologies, Inc., BancTec, Inc., and an Advisor to Dorchester Hugoton, Ltd., all of which are located in Dallas, Texas. He is a member of the Audit Committee and the Compensation Committee. Lester A. Levy, 73, has been a director and officer of NCH since 1947, and since 1965 has served as Chairman of the Board of Directors of NCH. He is either the president or a vice president of substantially all of NCH's subsidiaries. Mr. Levy is also a director of A.H. Belo Corporation, Dallas, Texas. Mr. Levy is a member of the Stock Option Committee and the Executive Committee. Class II Directors and Nominees Robert L. Blumenthal, 65, has engaged in the practice of law since 1957. He is a partner at the Dallas law firm of Carrington, Coleman, Sloman & Blumenthal, L.L.P., which serves as NCH's legal counsel. Thomas B. Walker, Jr., 72, has been a director of NCH since 1987. He was a general partner of Goldman, Sachs & Co. from 1968 until 1984 when he assumed his current position as a limited partner of The Goldman Sachs Group, L.P. Mr. Walker is also a director of Sysco Corporation, A.H. Belo Corporation, and Riviana Foods, Inc. He is a member of the Audit Committee and the Compensation Committee. Milton P. Levy, Jr., 70, has been a director and officer of NCH since 1947, and since 1965 has served as Chairman of the Executive Committee of NCH. He is either the president or a vice president of substantially all of NCH's subsidiaries. Mr. Levy is a member of the Stock Option Committee and the Executive Committee. Class III Directors Jerrold M. Trim, 59, has been a director of NCH since 1980 and is the president and majority shareholder of Windsor Association, Inc., which is engaged primarily in investment consulting services. He is also a general partner of Chiddingstone Management Company and The Penshurst Fund, which are limited partnerships that invest in marketable securities. He is a member of the Audit Committee and the Compensation Committee. Irvin L. Levy, 67, has been a director and an officer of NCH since 1950, and has served as NCH's President since 1965. He is either president or a vice president of substantially all of NCH's subsidiaries. Mr. Levy is a member of the Stock Option Committee and the Executive Committee. If any of the above nominees for Class II directors should become unavailable to serve as a director, then the shares represented by proxy will be voted for such substitute nominees as may be nominated by the Board of Directors. NCH has no reason to believe that any of the above nominees are, or will be, unavailable to serve as a director. Meeting Attendance and Committees of the Board NCH has audit, compensation, executive, and stock option committees of the Board, whose members are noted above. During the last fiscal year, the Board of Directors met on five occasions, the Compensation Committee met once, the Audit Committee met once, the Executive Committee met or acted by consent at least 28 times, and the Stock Option Committee met once. NCH does not have a standing nominating committee of the Board. Nominees to the Board are selected by the entire Board. The Audit Committee of the Board reviews the scope of the independent auditors' examinations and the scope of activities of NCH's internal auditors. Additionally, it receives and reviews reports of NCH's independent auditors and internal auditors. The Audit Committee also meets (without management's presence, if the Audit Committee so desires) with the independent auditors and members of the internal auditing staff, receives recommendations or suggestions for change, and may initiate or supervise any special investigations it may choose to undertake. The Compensation Committee recommends to the Board of Directors the salaries of Messrs. Irvin, Lester, and Milton Levy. The Executive Committee possesses all of the powers of the Board of Directors between meetings of the Board. The Stock Option Committee of the Board determines those employees of NCH and its subsidiaries who will receive stock options and the amount of such options. PROPOSAL TO APPROVE AMENDMENTS TO EXECUTIVE COMMITTEE INCENTIVE BONUS PLAN Section 162(m) of the Internal Revenue Code (the "Code") denies the deduction for compensation over $1 million per year paid by a publicly traded company to the chief executive or the four other most highly compensated officers. Compensation based on performance goals and approved by the stockholders is excluded from the limitation on deductions over $1 million. To qualify all compensation paid to the Executive Committee of the Board of Directors as a deductible expense under section 162(m) of the Code, on April 28, 1994, the Compensation Committee of the Board of Directors adopted an incentive bonus plan (the "Bonus Plan"), for members of the Executive Committee, which was approved by stockholders at the 1994 Annual Meeting. The Bonus Plan provides a formula for determining the amounts of annual bonuses to be paid to each member of the Executive Committee. Bonus amounts will depend on the amount by which NCH's net income after taxes, but before accrual for any bonus under the Bonus Plan, for a particular fiscal year increases over its net income before accrual for any bonus for the preceding fiscal year. The Bonus Plan originally provided that increases from 10% to less than 14% would result in payment of a $225,000 bonus to each member of the Executive Committee, increases from 14% to less than 16% would result in payment of a $300,000 bonus to each Executive Committee member, and increases of 16% or more would result in payment of a $375,000 bonus to each member of the Executive Committee. For fiscal 1996, no bonus was payable because NCH's net income did not increase by 10% or more over its net income for fiscal 1995. On June 7, 1996, the Compensation Committee of the Board of Directors adopted an amendment to the formula for determining the amounts of annual bonuses to be paid to each member of the Executive Committee, subject to stockholder approval. As amended, the formula provides as follows. Increases from 10% to less than 15% will result in payment of a $225,000 bonus to each member of the Executive Committee. Increases of 15% or greater will result in payment of a $325,000 bonus to each Executive Committee member. No bonus would have been payable in fiscal 1996 if the Bonus Plan, as amended, had been in effect. The Bonus Plan prohibits amendment of its terms to increase the cost of the Bonus Plan to NCH or to change the persons to whom bonuses will be paid under the Bonus Plan without a vote of NCH's stockholders. COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS Director Compensation Directors who are not executive officers of NCH receive compensation of $25,000 per annum and $1,000 for each meeting of the Board of Directors or Board committee attended. All other directors receive $1,000 for each such meeting attended. Members of the Stock Option Committee and Executive Committee are not compensated separately for their services on such committees. Report on Executive Compensation Responsibility for Executive Compensation Three outside directors, as the Compensation Committee of NCH (Messrs. Fulgham, Trim, and Walker), have primary responsibility for recommending to the Board the executive compensation program for Messrs. Irvin, Lester, and Milton Levy. The Compensation Committee recommends to the Board an annual aggregate base compensation for the Office of the Executive Committee and is responsible for administering and approving incentive compensation for the Office of the Executive Committee. After Board approval of the Compensation Committee's recommendation for aggregate base compensation (with Messrs. Irvin, Lester, and Milton Levy abstaining), the Messrs. Levy divide the compensation of the Executive Committee among themselves. The Executive Committee is responsible for setting the compensation for all other officers of NCH. Executive Compensation Strategy With respect to compensation of all key executives other than Messrs. Irvin, Lester, and Milton Levy, NCH's strategy is generally as follows: * Attract and retain key executives by delivering a market competitive rate of base pay. Market competitive rates of pay are determined by reviewing compensation data from other companies that resemble NCH in terms of lines of business, size, scope, and complexity. * Provide salary increases to key executives based on their individual effort and performance. In addition to the individual's experience, job duties, and performance, annual increases are influenced by NCH's overall performance. * Provide annual incentive opportunities based on objectives that NCH feels are critical to its success during the year. Target incentive levels are set on an individual basis and actual awards are made at the Executive Committee's discretion. * Provide long-term incentives to key employees so that employees are focused on activities and decisions that promote NCH's long-term financial and operational success. To meet this objective, NCH offers stock options to certain key employees. Options are generally granted for a period of five years at a price that is at least equal to the fair market value of the Common Stock at the time of grant. Options vest in equal increments over a three-year period from the time of grant. Compensation of Messrs. Irvin, Lester, and Milton Levy The Compensation Committee occasionally seeks assistance from an outside compensation consulting firm to determine the competitiveness of NCH's compensation programs. Based on survey and proxy analyses performed by the consulting firm, the Compensation Committee in 1994 adopted a fixed compensation plus an incentive bonus for 1996 based on Company performance which has been retained for fiscal 1997. Given the tenure and depth of experience of the Office of the Executive Committee, the Compensation Committee feels that this is an appropriate competitive level of compensation. All of the companies in the peer group in NCH's performance graph on page 9 of this Proxy Statement were included in the proxy analysis performed by the consulting firm. NCH's performance in sales and earnings in the then current economic and competitive environment, adjusted for currency fluctuations, was considered in setting the base executive compensation, although no formula or preset goal is used. NCH has adopted a separate strategy with respect to the incentive compensation of the Office of the Executive Committee (Messrs. Irvin, Lester, and Milton Levy). Since these individuals are very significant long-term stockholders of NCH, some of the typical approaches to executive compensation that exist in the marketplace are not necessarily relevant at NCH. Long-term incentive programs are implemented for senior executives to create a link between the corporation's performance and the executive's own personal wealth. In light of the shareholding of Messrs. Irvin, Lester, and Milton Levy, they are already significantly impacted financially by NCH's overall performance. The Compensation Committee generally feels that in this situation any long-term incentive program should be tied to salary or bonus. The Bonus Plan provides for short-term incentive compensation for members of the Executive Committee. Since aggregate compensation for the Office of the Executive Committee could result in a member receiving over $1 million in annual compensation, NCH finds it necessary to comply with the provisions of section 162(m) of the Code to qualify for tax deductibility all compensation paid to the Executive Committee. NCH's policy is to qualify to the extent practicable all compensation paid to its executive officers for tax deductibility in accordance with section 162(m). The stockholders must approve the amendments to the Bonus Plan before they go into effect. Conclusion The Compensation Committee believes that current compensation arrangements in place at NCH are reasonable and competitive given NCH's size and status and the current regulatory environment surrounding executive compensation. The base salary program allows NCH to attract and retain management talent. In addition, for those employees who are incentive eligible, such systems continue to provide the necessary link between the attainment of NCH's performance objectives and the compensation received by executives. Executive Committee & Compensation Committee Stock Option Committee ---------------------- ---------------------- Rawles Fulgham Irvin L. Levy Jerrold M. Trim Lester A. Levy Thomas B. Walker, Jr. Milton P. Levy, Jr. The report on executive compensation will not be deemed to be incorporated by reference into any filing by NCH under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that NCH specifically incorporates the above report by reference. Compensation Committee Interlocks and Insider Participation in Compensation Decisions Messrs. Irvin, Lester, and Milton Levy are members of the Executive Committee of NCH's Board of Directors, which committee determines most salaries and promotions with respect to officers of NCH and its subsidiaries, and of the Stock Option Committee, which determines those employees of NCH and its subsidiaries who will receive stock options and the amount of such options. Messrs. Irvin, Lester, and Milton Levy are executive officers and employees of NCH. NCH's Board of Directors (with the subject members abstaining) determines the salaries of Messrs. Irvin, Lester, and Milton Levy after recommendation of the Compensation Committee, whose members are Rawles Fulgham, Jerrold M. Trim, and Thomas B. Walker, Jr. Executive Compensation The following table summarizes the compensation paid to Messrs. Irvin, Lester, and Milton Levy, who together hold the office of the Executive Committee, and to NCH's two other most highly compensated executive officers (whose compensation exceeded $100,000 in fiscal 1996) for services rendered in all capacities to NCH during the fiscal years ended April 30, 1996, 1995, and 1994. SUMMARY COMPENSATION TABLE Name and Annual Compensation(1) All Other Principal Fiscal ---------------------- Compensa- Positions Year Salary(2) Bonus tion (3) ------------------- ----- --------- -------- --------- Irvin L. Levy, President 1996 $859,228 $ - $3,700 1995 857,539 300,000 3,700 1994 815,734 - 6,016 Lester A. Levy, Chairman of the Board 1996 863,430 - 3,000 1995 863,572 300,000 3,700 1994 822,635 - 5,316 Milton P. Levy, Jr., Chairman of the Executive Committee 1996 865,281 - 3,700 1995 865,936 300,000 3,700 1994 963,877 - 6,016 Thomas F. Hetzer, Vice President - Finance 1996 192,204 - 3,700 1995 170,732 10,000 3,700 1994 153,410 5,725 3,416 Glen L. Scivally, Vice President and Treasurer 1996 175,114 - 3,700 1995 164,927 10,000 3,700 1994 151,352 5,250 3,421 - ----------------------- (1) Certain of NCH's executive officers receive personal benefits in addition to annual salary and bonus. The aggregate amounts of the personal benefits, however, do not exceed the lesser of $50,000 or 10% of the total of the annual salary and bonus reported for the named executive officer. (2) Includes compensation for services as a director (other than Mr. Hetzer and Mr. Scivally). (3) The amounts included in this column were contributed to the accounts of the executives included in the table under NCH's qualified profit sharing and savings plan. Retirement Agreements NCH has entered into retirement agreements allowing retirement at any time after age 59-1/2 with Messrs. Irvin, Lester, and Milton Levy that provide for lifetime monthly payments and guarantee 120 monthly payments beginning at death, retirement, or disability. Payments under these agreements will be $385,000 per year for Messrs. Irvin L. Levy and Lester A. Levy and $535,000 per year for Mr. Milton P. Levy, Jr., subject to adjustment each year after 1993 for increases in the United States Consumer Price Index for the preceding year. CERTAIN TRANSACTIONS NCH entered into split dollar life insurance agreements with the sons and former son-in-law of Lester A. Levy and sons of Irvin L. Levy who are, or were, NCH employees concerning the purchase of life insurance policies insuring Irvin L. Levy, Lester A. Levy, and Milton P. Levy, Jr. There was no impact of these policies on after-tax earnings of NCH in fiscal 1996. The insurance provides benefits to the above indicated employees (or child of a former employee) totalling $10,000,000 on the death of combinations of insureds. NCH has been granted a security interest in the cash value of each policy to the extent of the sum of premium payments made by NCH. These arrangements are designed so that if the assumptions made as to mortality experience, policy earnings, and other factors are realized, then NCH will recover all of its premium payments. The purpose of the arrangement in addition to providing benefits to the employees is to provide cash to the families of Messrs. Lester and Irvin Levy at the approximate time of death of the senior Levys to avoid their Common Stock being forced on to the market at a potentially inappropriate time. FIVE YEAR COMPARISON OF CUMULATIVE TOTAL RETURN The following graph presents NCH's cumulative stockholder return during the period beginning April 30, 1991, and ending April 30, 1996. NCH is compared to the S&P 500 and a peer group consisting of companies that collectively represent lines of business in which NCH competes. The companies included in the peer group index are Betz Laboratories, Inc., The Dexter Corporation, Ecolab Inc., Lawson Products, Inc., Nalco Chemical Company, National Service Industries, Inc., Petrolite Corporation, Premier Industrial Corporation, Quaker Chemical Corporation, Safety-Kleen Corp., and Snap-On Tools Corporation. Each index assumes $100 invested at the close of trading on April 30, 1991, and is calculated assuming quarterly reinvestment of dividends and quarterly weighting by market capitalization. [STOCK PERFORMANCE GRAPH FILED UNDER COVER OF FORM S-E] The stock price performance depicted in the graph above is not necessarily indicative of future price performance. The graph will not be deemed to be incorporated by reference in any filing by NCH under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that NCH specifically incorporates the graph by reference. SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT The following table sets forth certain information regarding the beneficial ownership of NCH's Common Stock as of June 3, 1996, by: (i) persons known to management to beneficially own more than 5% of NCH's Common Stock; (ii) each director and nominee for director; (iii) the three persons holding the office of the Executive Committee and NCH's two other most highly compensated executive officers (whose compensation exceeded $100,000 in fiscal 1996); and (iv) all directors and executive officers of NCH as a group. Except as noted below, each person included in the table has sole voting and investment power with respect to the shares that the person beneficially owns. Name of Amount & Nature Beneficial Owner of Beneficial Ownership Percent of Class ------------------------- ----------------------- ---------------- Robert L. Blumenthal 2,683 * Rawles Fulgham (1) 2,000 * Thomas F. Hetzer 0 - Irvin L. Levy (2)(3) 1,563,532 20.6% Lester A. Levy (2)(4) 1,495,853 19.7% Milton P. Levy, Jr. (2)(5) 1,115,119 14.7% Glen L. Scivally 0 - Jerrold M. Trim (6) 0 - Thomas B. Walker, Jr. 10,000 * All directors and executive 4,198,855 55.2% officers as a group (12 people) Systematic Financial Management, L.P. (7) 580,638 7.6% - -------------------- * Less than 1% of class. (1) Of these shares, 700 are held by a Dallas bank in trust for the retirement plan and benefit of Mr. Fulgham. (2) The address of Messrs. Irvin, Lester, and Milton Levy is P.O. Box 152170, Irving, Texas 75015. The definition of beneficial ownership under the rules and regulations of the Securities and Exchange Commission requires inclusion of the same 29,000 shares held as cotrustees by Messrs. Irvin, Lester, and Milton Levy for a family trust in the totals listed above for each of Messrs. Irvin, Lester, and Milton Levy. (3) Irvin L. Levy owns a life estate interest in 1,000,000 shares included in the table over which he has sole voting and investment power, and his children own a remainder interest in such 1,000,000 shares. The table includes the following shares, beneficial ownership of which Irvin L. Levy disclaims: 31,520 shares held as trustee for his grandnephews and grandniece over which he has sole voting and investment power, and 29,000 shares held as cotrustee with his brothers for a family trust over which he shares voting and investment power. (4) Lester A. Levy owns a life estate interest in 625,194 shares included in the table over which he has sole voting and investment power, and his children own a remainder interest in such 625,194 shares. The table includes the following shares, beneficial ownership of which Lester A. Levy disclaims: 19,261 shares held as trustee for his grandnieces over which he has sole voting and investment power, and 29,000 shares held as cotrustee with his brothers for a family trust over which he shares voting and investment power. (5) The table includes the following shares beneficial ownership of which Milton P. Levy, Jr. disclaims: 34,448 shares owned by his wife over which he has no voting or investment power, 29,000 shares held as cotrustee with his brothers for a family trust over which he shares voting and investment power, and 2,106 shares held as cotrustee with his daughters for their benefit over which he shares voting and investment power. (6) Windsor Association, Inc., of which Mr. Trim is president, has a corporate policy against its employees owning any publicly traded securities. (7) The table sets forth Systematic Financial Management, L.P.'s stockholding based on its latest Schedule 13G filed with the SEC dated as of February 12, 1996. Systematic Financial Management, L.P. reports its address as Two Executive Drive, Fort Lee, New Jersey 07024. It has sole dispositive power over 580,638 shares and shared voting power over 59,745 shares and sole voting power of 0 shares. SELECTION OF AUDITORS The Board of Directors has appointed KPMG Peat Marwick LLP, Certified Public Accountants, to continue to be the principal independent auditors of NCH, subject to stockholder ratification at the Meeting. A representative of that firm has been requested to be present at the Meeting and will have an opportunity to make a statement if the representative desires to do so and to respond to appropriate questions. PROPOSALS OF STOCKHOLDERS Stockholders of NCH who intend to present a proposal for action at the 1997 Annual Meeting of Stockholders of NCH must notify NCH's management of such intention by notice received at NCH's principal executive offices not less than 120 days in advance of June 25, 1997, for such proposal to be included in NCH's proxy statement and form of proxy relating to such meeting. ANNUAL REPORT The Annual Report for the year ended April 30, 1996, is being mailed to stockholders with this Proxy Statement. The Annual Report is not to be regarded as proxy soliciting material. NCH will provide without charge to each stockholder to whom this Proxy Statement and the accompanying form of proxy are sent, on the written request of such person, a copy of NCH's annual report on Form 10-K for the fiscal year ended April 30, 1996, including the financial statements and the financial statement schedules, required to be filed with the Securities and Exchange Commission. Requests should be directed to NCH Corporation, Attention: Secretary, P. O. Box 152170, Irving, Texas 75015. /s/ Irvin L. Levy ----------------- Irvin L. Levy, President Irving, Texas Dated: June 25, 1996 PROXY CARD NCH CORPORATION ANNUAL MEETING OF STOCKHOLDERS - JULY 25, 1996 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned, revoking all prior proxies, hereby appoints James H. Stone, Tom Hetzer, and Joe Cleveland, and any one or more of them, proxy or proxies, with full power of substitution in each, and hereby authorizes them to vote for the undersigned and in the undersigned's name, all shares of common stock of NCH Corporation (the "Company") standing in the name of the undersigned on June 3, 1996, as if the undersigned were personally present and voting at the Company's annual meeting of stockholders to be held on July 25, 1996, in Dallas, Texas, and at any adjournment thereof, upon the matters set forth on the reverse side hereof. This proxy when properly executed will be voted in the manner directed herein by the undersigned stockholder. IF NO DIRECTION IS MADE, THEN THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3, AND IN THE PROXIES' DISCRETION ON ALL OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING, INCLUDING MATTERS INCIDENT TO THE CONDUCT OF SUCH MEETING. (Continue and to be signed on reverse side.) /X/ Please mark your votes as indicated in this example. FOR WITHHOLD AUTHORITY 1. Election of Directors / / / / Nominees: Thomas B. Walker, Jr., Milton P. Levy, Jr. and Robert Blumenthal Instruction: To withhold authority to vote for all nominees, mark the Withhold Authority box. To withhold authority to vote for any individual nominee, write the nominee's name on the line above. 2. Proposal to approve the amendments to the inventive bonus plan for members of the Executive Committee of the Board of Directors as described in the proxy statement for the 1996 annual meeting of stockholders. FOR / / AGAINST / / ABSTAIN / / 3. Proposal to ratify the appointment of KPMG Peat Marwick LLP as independent auditors of NCH Corporation. FOR / / AGAINST / / ABSTAIN / / 4. In their discretion, the proxies are authorized to vote upon any other matters that may properly come before the meeting or any adjournment thereof, subject to the limitations set forth in the applicable regulations under the Securities Exchange Act of 1934. DATED: , 1996 ---------------------------------------------- ---------------------------------------------- SIGNATURE ---------------------------------------------- SIGNATURE IF HELD JOINTLY NOTE: Please sign exactly as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee, guardian, officer or partner, please indicate full title and capacity. EX-27 2
5 1,000 U.S. YEAR APR-30-1996 MAY-01-1995 APR-30-1996 1.00000 21,806 82,077 163,003 16,259 106,907 382,867 199,700 110,983 514,404 115,505 0 11,769 0 0 287,166 514,404 772,834 772,834 407,141 711,833 789 0 (1,171) 61,383 25,076 36,307 0 0 0 36,307 4.51 4.51
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