-----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, U9azGLIsbfvb55uYaIB+ecHq9cOEEuAPMzuOXiGCW6ZVbzzJkAN5gsNJwxLFZa1Y VrZ0RMg+noNazptk4os+NQ== 0000914317-05-002661.txt : 20050815 0000914317-05-002661.hdr.sgml : 20050815 20050815144221 ACCESSION NUMBER: 0000914317-05-002661 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20050630 FILED AS OF DATE: 20050815 DATE AS OF CHANGE: 20050815 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RONSON CORP CENTRAL INDEX KEY: 0000084919 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS CHEMICAL PRODUCTS [2890] IRS NUMBER: 220743290 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-01031 FILM NUMBER: 051025702 BUSINESS ADDRESS: STREET 1: CORPORATE PARK III CAMPUS DR STREET 2: PO BOX 6707 CITY: SOMERSET STATE: NJ ZIP: 08875-6707 BUSINESS PHONE: 7324698300 FORMER COMPANY: FORMER CONFORMED NAME: ART METAL WORKS INC DATE OF NAME CHANGE: 19680429 10-Q 1 form10q-70337_ronson.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549-1004 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2005 ------------- Commission File Number 1-1031 ------ RONSON CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) New Jersey 22-0743290 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Corporate Park III-Campus Drive, P.O. Box 6707, Somerset, NJ 08875 - -------------------------------------------------------------------------------- (Address of principal executive offices) (732) 469-8300 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) 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 whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes |_| No |X| As of June 30, 2005, there were 4,321,194 shares of the registrant's common stock outstanding. RONSON CORPORATION FORM 10-Q INDEX --------------- PAGE ---- PART I - FINANCIAL INFORMATION: ITEM 1 - FINANCIAL STATEMENTS: CONSOLIDATED BALANCE SHEETS: JUNE 30, 2005 AND DECEMBER 31, 2004 3 CONSOLIDATED STATEMENTS OF OPERATIONS: QUARTER ENDED JUNE 30, 2005 and 2004 4 SIX MONTHS ENDED JUNE 30, 2005 AND 2004 5 CONSOLIDATED STATEMENTS OF CASH FLOWS: SIX MONTHS ENDED JUNE 30, 2005 AND 2004 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 13 ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 16 ITEM 4 - CONTROLS AND PROCEDURES 17 PART II - OTHER INFORMATION: ITEM 1 - LEGAL PROCEEDINGS 17 ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K 19 SIGNATURES 20 2 PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES ---------------------------------------------------- CONSOLIDATED BALANCE SHEETS (in thousands of dollars) June 30, December 31, 2005 2004 -------- ------------ (unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 211 $ 599 Accounts receivable, net 1,654 1,876 Inventories: Finished goods 1,882 1,625 Work in process 28 88 Raw materials 957 621 -------- -------- 2,867 2,334 Asset held for sale 1,600 -- Other current assets 1,133 1,302 -------- -------- TOTAL CURRENT ASSETS 7,465 6,111 -------- -------- Property, plant and equipment, at cost: Land 6 6 Buildings and improvements 5,354 5,333 Machinery and equipment 6,134 8,707 Construction in progress 381 261 -------- -------- 11,875 14,307 Less accumulated depreciation and amortization 8,009 8,791 -------- -------- 3,866 5,516 Other assets 2,866 2,315 -------- -------- $ 14,197 $ 13,942 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Short-term debt $ 1,989 $ 1,439 Current portion of long-term debt and leases 840 926 Accounts payable 2,491 1,786 Accrued expenses 2,810 3,020 -------- -------- TOTAL CURRENT LIABILITIES 8,130 7,171 -------- -------- Long-term debt and leases 2,395 2,491 Other long-term liabilities 253 407 STOCKHOLDERS' EQUITY: Common stock 4,398 4,398 Additional paid-in capital 29,627 29,651 Accumulated deficit (27,635) (27,138) Accumulated other comprehensive loss (1,374) (1,441) -------- -------- 5,016 5,470 Less cost of treasury shares 1,597 1,597 -------- -------- TOTAL STOCKHOLDERS' EQUITY 3,419 3,873 -------- -------- $ 14,197 $ 13,942 ======== ======== See notes to consolidated financial statements. 3 RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS ------------------------------------- (in thousands of dollars, except per share data) (Unaudited) Quarter Ended June 30, ------------------------ 2005 2004 ------- ------- NET SALES $ 6,069 $ 6,376 ------- ------- Cost and expenses: Cost of sales 3,998 4,114 Selling, shipping and advertising 876 866 General and administrative 972 1,037 Depreciation and amortization 199 194 Other charges 55 50 ------- ------- 6,100 6,261 ------- ------- EARNINGS (LOSS) FROM OPERATIONS (31) 115 ------- ------- Other expense: Interest expense 103 81 Other-net 435 14 ------- ------- 538 95 ------- ------- EARNINGS (LOSS) BEFORE INCOME TAXES (569) 20 Income tax provision (benefit) (244) 94 ------- ------- NET LOSS $ (325) $ (74) ======= ======= LOSS PER COMMON SHARE: Basic $ (0.08) $ (0.02) ======= ======= Diluted $ (0.08) $ (0.02) ======= ======= See notes to consolidated financial statements. 4 RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS ------------------------------------- (in thousands of dollars, except per share data) (Unaudited) Six Months Ended June 30, ------------------------- 2005 2004 -------- ------- NET SALES $ 12,506 $13,425 -------- ------- Cost and expenses: Cost of sales 8,288 8,443 Selling, shipping and advertising 1,788 1,697 General and administrative 2,009 2,146 Depreciation and amortization 418 363 Other charges 55 100 -------- ------- 12,558 12,749 -------- ------- EARNINGS (LOSS) FROM OPERATIONS (52) 676 -------- ------- Other expense: Interest expense 202 153 Other-net 456 25 -------- ------- 658 178 -------- ------- EARNINGS (LOSS) BEFORE INCOME TAXES (710) 498 Income tax provision (benefit) (297) 297 -------- ------- NET EARNINGS (LOSS) $ (413) $ 201 ======== ======= EARNINGS (LOSS) PER COMMON SHARE: Basic $ (0.10) $ 0.05 ======== ======= Diluted $ (0.10) $ 0.05 ======== ======= See notes to consolidated financial statements. 5 RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS ------------------------------------- (in thousands of dollars) (Unaudited) Six months ended June 30, -------------------- 2005 2004 ------- ------- Cash Flows from Operating Activities: Net earnings (loss) $ (413) $ 201 Adjustments to reconcile net earnings (loss) to net cash used in operating activities: Depreciation and amortization 418 363 Deferred income tax expense (benefit) (326) 170 Reduction in carrying value of asset held for sale 97 -- Decrease in cash from change in inventories (533) (1,678) Increase (decrease) in cash from changes in: Current assets and current liabilities 1,174 308 Other non-current assets and other long-term liabilities (290) (279) Net change in pension-related accounts (312) (144) Effect of exchange rate changes (8) 22 ------- ------- Net cash used in operating activities (193) (1,037) ------- ------- Cash Flows from Investing Activities: Net cash used in investing activities, capital expenditures (351) (790) ------- ------- Cash Flows from Financing Activities: Proceeds from short-term debt 889 1,572 Proceeds from long-term debt -- 501 Payments of short-term debt (339) (99) Payments of long-term debt (170) (159) Payments of long-term lease obligations (116) (33) Proceeds from issuance of commom stock -- 20 Redemption of preferred stock -- (46) Payments of dividends (84) (43) Cost of stock option agreement (24) (24) ------- ------- Net cash provided by financing activities 156 1,689 ------- ------- Net decrease in cash and cash equivalents (388) (138) Cash and cash equivalents at beginning of period 599 664 ------- ------- Cash and cash equivalents at end of period $ 211 $ 526 ======= ======= See notes to consolidated financial statements. 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ FOR THE QUARTER ENDED JUNE 30, 2005 (UNAUDITED) ----------------------------------------------- Note 1: ACCOUNTING POLICIES ------------------- Basis of Financial Statement Presentation - The information as of and for the three and six month periods ended June 30, 2005 and 2004, is unaudited. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the results of such interim periods have been included. This quarterly report should be read in conjunction with the Company's Annual Report on Form 10-K. Note 2: PER COMMON SHARE DATA --------------------- The calculation and reconciliation of Basic and Diluted Earnings (Loss) per Common Share were as follows (in thousands except per share data):
Quarter Ended June 30, ---------------------------------------------------------------------- 2005 2004 -------------------------------- -------------------------------- Per Per Share Share Loss Shares Amount Loss Shares(2) Amount ----- ------ -------- ----- --------- -------- Net loss ................... $(325) $ (74) Less accrued dividends on preferred stock .......... -- -- ----- ----- BASIC .................... $(325) 4,321 $ (0.08) $ (74) 4,266 $ (0.02) ===== ===== ======== ===== ===== ======== Effect of dilutive securities (1): Stock options ............ -- -- Cumulative convertible preferred stock ........ $ -- -- $ -- -- ----- ----- ----- ----- DILUTED .................. $(325) 4,321 $ (0.08) $ (74) 4,266 $ (0.02) ===== ===== ======== ===== ===== ======== Six Months Ended June 30, ---------------------------------------------------------------------- 2005 2004 -------------------------------- -------------------------------- Per Per Share Share Loss Shares Amount Earnings Shares(2) Amount ----- ------ -------- -------- --------- -------- Net earnings (loss) ........ $(413) $ 201 Less accrued dividends on preferred stock .......... -- (2) ----- ----- BASIC .................... $(413) 4,321 $ (0.10) $ 199 4,262 $ 0.05 ===== ===== ======== ===== ===== ======== Effect of dilutive securities (1): Stock options ............ -- 74 Cumulative convertible preferred stock ......... $ -- -- $ 2 35 ----- ----- ----- ----- DILUTED ................... $(413) 4,321 $ (0.10) $ 201 4,371 $ 0.05 ===== ===== ======== ===== ===== ========
7 (1) Stock options were anti-dilutive for the quarters ended June 30, 2004 and June 30, 2005 and for the six months ended June 30, 2005, and, therefore, were excluded from the computation and reconciliation of Diluted Earnings (Loss) per Common Share for those periods. (2) Information as to the number of shares and per share amounts has been retroactively adjusted to reflect the 5% stock dividend on common stock declared February 15, 2005. Note 3: SHORT-TERM DEBT --------------- In 1995 Ronson Consumer Products Corporation ("RCPC") entered into an agreement with Bank of America, successor by merger to Fleet National Bank, for a Revolving Loan due to expire on June 30, 2005. On June 30, 2005, RCPC entered into an Amended Loan and Security Agreement with Bank of America extending the date of expiration to September 30, 2005. Other than the extended expiration date, the terms of the Agreement remain substantially unchanged. The Revolving Loan of $1,550,000 at June 30, 2005, provides a line of credit up to $2,500,000 to RCPC based on accounts receivable and inventory. In 1995 Ronson Corporation of Canada Ltd. ("Ronson-Canada") entered into an agreement with Canadian Imperial Bank of Commerce ("CIBC") for a line of credit of C$250,000. Ronson-Canada's line of credit is secured by its accounts receivable and inventory. At June 30, 2005, Ronson-Canada utilized no borrowings under the Revolving Loan. In 1997 Ronson Aviation, Inc. ("Ronson Aviation") entered into an agreement with Bank of America for a Revolving Loan. On June 30, 2005, Ronson Aviation entered into an Amended Loan and Security Agreement with Bank of America extending the date of expiration to September 30, 2005. Other than the extended expiration date, the terms of the Agreement remain substantially unchanged. The Revolving Loan provides a line of credit up to $500,000 to Ronson Aviation based on the level of its accounts receivable. At June 30, 2005, Ronson Aviation had a revolving loan balance of $300,000. Note 4: LONG-TERM DEBT -------------- On December 1, 2003, the Company, RCPC and Bank of America amended the Company's Mortgage Loan, extending the expiration to December 1, 2008. The Mortgage Loan balance was $1,288,000 at June 30, 2005. The Mortgage Loan agreement is payable in monthly installments of $7,951, plus interest, with a final installment on December 1, 2008, of approximately $962,000. The loan bears interest at the rate of 0.5% above Bank of America's prime rate. The Company and Bank of America have entered into an interest rate swap contract which effectively fixes the interest rate on the Mortgage Loan at 7.45%. Ronson Aviation has two term loans payable to Bank of America with balances at June 30, 2005, totaling approximately $492,000. The loans are collateralized by specific aircraft and have been extended to September 30, 2005. In March 2004 a lease agreement became effective for a warehouse facility utilized by RCPC for finished goods storage and product shipments. In connection with the lease, the landlord provided improvements totaling $440,000. The landlord provided RCPC with a long-term loan for the improvements, bearing interest at 8.25%, payable at $4,800 per month, including interest, with a final payment of $150,000 due at the end of the initial nine-year term, and secured by a 8 letter of credit in the amount of $150,000. At June 30, 2005, the total balance payable on this lease agreement was $410,000. Note 5: CONTINGENCIES ------------- In 1999 Ronson Aviation completed the installation of a new fueling facility and ceased use of most of its former underground storage tanks. The primary underground fuel storage tanks formerly used by Ronson Aviation were removed in 1999 as required by the New Jersey Department of Environmental Protection ("NJDEP"). Related contaminated soil was removed and remediated. In 2000 initial groundwater tests were completed. Ronson Aviation's environmental consultants have advised the Company that the preliminary results of that testing indicate that no further actions should be required. The extent of groundwater contamination cannot be determined until final testing has been completed and accepted by the NJDEP. The Company intends to vigorously pursue its rights under the leasehold and under the statutory and regulatory requirements. Since the amount of additional costs, if any, and their ultimate allocation cannot be fully determined at this time, the effect on the Company's financial position or results of future operations cannot yet be determined, but management believes that the effect will not be material. In 2002 Prometcor completed the environmental clearance of its property in Newark, N.J. The final parcel of the property was sold in May 2002 with the Company retaining responsibility for the groundwater-related activities. The Company's plan to resolve groundwater issues has not yet been approved by the NJDEP. Testing completed in 2000 resulted in increased estimates of the range of costs to be incurred. These costs will be incurred over an extended number of years. In calculating and accruing these costs, the Company has discounted the costs to the present value. The liability for these estimated costs and expenses as recorded in the financial statements was based, in accordance with normal accounting practices, on the lower limit of the range of costs as projected by the Company and its consultants. The estimated upper limit of the range of costs is approximately $600,000 above the lower limit. The full extent of the costs and time required for completion of the NJDEP environmental clearance is not determinable until the remediation and confirmatory testing of the properties have been completed and accepted by the NJDEP. The Company is involved in a State of New Jersey Gross Income Tax audit for the years ended December 31, 1997 through December 31, 2000. The total claimed by the State of New Jersey is $179,000, tax of $122,000 and interest and penalties of $57,000 related to availability of net operating loss carryforwards from 1995. In June 2004, the Company's appeal of the determination by the New Jersey Division of Taxation was denied by the Tax Court of New Jersey. The Company has appealed the decision to the Superior Court of New Jersey, Appellate Division. Management believes that the Company should not be liable for the assessment because the Company offered to settle the matter for the amount of the tax, $122,000. The Company has accrued the amount of the tax and the expected cost of defense in the matter. The Company is involved in a shareholder derivative lawsuit filed in 2003 and a second lawsuit against the Company's directors and chief financial officer filed in April 2005, both filed by the same shareholder. The Company has incurred a total of approximately $660,000 to date in net legal costs related to the matter. These costs are net of the associated insurance reimbursements. The Company believes that its directors' and officers' liability coverage is adequate to meet the future direct costs of the litigation, however, the Company is not able to 9 estimate, at this time, the extent to which it will incur additional legal or other expenses, which may be substantial, in connection with these proceedings. The Company is involved in various other lawsuits and claims. While the amounts claimed may be substantial, the ultimate liability cannot now be determined because of the considerable uncertainties that exist. Therefore, it is possible that results of operations or liquidity in a particular period could be materially affected by certain contingencies. However, based on facts currently available including the insurance coverage that the Company has in place, management believes that the outcome of these lawsuits and claims will not have a material adverse effect on the Company's financial position. Note 6: INDUSTRY SEGMENTS INFORMATION ----------------------------- The Company has two reportable segments: consumer products and aviation services. The Company's reportable segments are strategic business units that offer different products and services. Financial information by industry segment is summarized below (in thousands):
Quarter Ended Six Months Ended June 30, June 30, -------------------- ---------------------- 2005 2004 2005 2004 ------- ------- -------- -------- Net sales: Consumer Products $ 3,466 $ 3,900 $ 7,381 $ 8,649 Aviation Services 2,603 2,476 5,125 4,776 ------- ------- -------- -------- Consolidated $ 6,069 $ 6,376 $ 12,506 $ 13,425 ======= ======= ======== ======== Earnings (loss) from operations: Consumer Products $ 165 $ 307 $ 409 $ 1,074 Aviation Services 364 329 617 680 ------- ------- -------- -------- Total reportable segments 529 636 1,026 1,754 Corporate and others (505) (471) (1,023) (978) Other charges (55) (50) (55) (100) ------- ------- -------- -------- Consolidated $ (31) $ 115 $ (52) $ 676 ======= ======= ======== ======== Earnings (loss) before intercompany charges and income taxes: Consumer Products $ 120 $ 286 $ 309 $ 1,042 Aviation Services 347 304 591 636 ------- ------- -------- -------- Total reportable segments 467 590 900 1,678 Corporate and others (560) (520) (1,134) (1,080) Other charges (55) (50) (55) (100) Nonrecurring loss on sale of charter aircraft (421) -- (421) -- ------- ------- -------- -------- Consolidated $ (569) $ 20 $ (710) $ 498 ======= ======= ======== ========
Note 7: COMPREHENSIVE INCOME -------------------- Comprehensive Income is the change in equity during a period from transactions and other events from nonowner sources. The Company is required to classify items of other comprehensive income in financial statements and to display the accumulated balance of other comprehensive income (loss) separately in the equity section of the Consolidated Balance Sheets. 10 Changes in the components of Other Comprehensive Income (Loss) and in Accumulated Other Comprehensive Loss were as follows (in thousands):
Quarter Ended June 30, 2005 and 2004 ------------------------------------ Foreign Currency Minimum Cash Flow Accumulated Other Translation Pension Hedging Comprehensive Adjustments Liability Adjustments Loss ---------------- --------- ----------- ----------------- Balance at March 31, 2005 $ (47) $ 1,448 $ (7) $ 1,394 Current period change 7 (55) 14 (34) Income tax expense (3) 22 (5) 14 ------- ------- ------- ------- Balance at June 30, 2005 $ (43) $ 1,415 $ 2 $ 1,374 ======= ======= ======= ======= Balance at March 31, 2004 $ (7) $ 1,744 -- $ 1,737 Current period change (6) (66) -- (72) Income tax expense 3 27 -- 30 ------- ------- ------- ------- Balance at June 30, 2004 $ (10) $ 1,705 $ -- $ 1,695 ======= ======= ======= ======= Six Months Ended June 30, 2005 and 2004 --------------------------------------- Foreign Currency Minimum Cash Flow Accumulated Other Translation Pension Hedging Comprehensive Adjustments Liability Adjustments Loss ---------------- --------- ----------- ----------------- Balance at December 31, 2004 $ (51) $ 1,482 $ 10 $ 1,441 Current period change 13 (111) (13) (111) Income tax expense (5) 44 5 44 ------- ------- ------- ------- Balance at June 30, 2005 $ (43) $ 1,415 $ 2 $ 1,374 ======= ======= ======= ======= Balance at December 31, 2003 $ 12 $ 1,784 -- $ 1,796 Current period change (37) (132) -- (169) Income tax expense 15 53 -- 68 ------- ------- ------- ------- Balance at June 30, 2004 $ (10) $ 1,705 $ -- $ 1,695 ======= ======= ======= =======
Note 8: STATEMENTS OF CASH FLOWS ------------------------ Certificates of deposit that have a maturity of less than 90 days are considered cash equivalents for purposes of the accompanying Consolidated Statements of Cash Flows. Supplemental disclosures of cash flow information are as follows (in thousands): Six Months Ended June 30, ----------------- 2005 2004 ---- ---- Cash payments for: Interest $186 $150 Income Taxes 4 192 Financing & Investing Activities Not Affecting Cash: Capital lease obligations incurred 64 146 Leasehold improvements financed by lessor -- 440 Equipment purchases financed by seller 40 61 11 Note 9: RETIREMENT PLANS ---------------- The Company's Consolidated Statements of Operations included pension expense consisting of the following components (in thousands): Quarter Ended Six Months Ended June 30, June 30, ---------------- ---------------- 2005 2004 2005 2004 ----- ----- ----- ----- Service cost $ 8 $ 6 $ 16 $ 13 Interest cost 66 69 133 137 Expected return on plan assets (48) (40) (96) (80) Recognized actuarial losses 56 66 112 132 Recognized prior service cost 2 4 3 7 ----- ----- ----- ----- Net pension expense $ 84 $ 105 $ 168 $ 209 ===== ===== ===== ===== Contributions to the pension plan during 2005 are expected as follows (in thousands): Paid in the six months ended June 30, 2005 $479 Expected to be paid in the balance of 2005 367 ---- Total expected to be paid in the year ending December 31, 2005 $846 ==== Note 10: FAIR VALUE OF DERIVATIVE FINANCIAL INSTRUMENTS ---------------------------------------------- In December 2003 the Company entered into an interest rate swap agreement in order to manage interest rate exposure. Effectively, the Company converted its Mortgage Loan payable of variable-rate debt to fixed-rate debt with an effective interest rate of 7.45%. The interest rate swap is considered a cash flow hedge and is 100% effective. As a result, the mark-to-market value of both the fair value hedging instrument and the underlying debt obligation are recorded as equal and offsetting gains or losses in other expense. At June 30, 2005, the interest rate swap had a fair value of ($3,000) recorded in Other Liabilities with the corresponding adjustment to Accumulated Other Comprehensive Loss. The fair value of the interest rate swap agreement, obtained from the financial institution, is based on current rates of interest and is computed as the net present value of the remaining exchange obligations under the terms of the contract. Mr. Carl W. Dinger III has granted an option to the Company to purchase the 509,735 shares now held by Mr. Dinger at an exercise price of $6.50 per share. The cost of the option is $4,000 per month for the period of the option or until exercised. At June 30, 2005, the fair value of the option was approximately $14,000, using the Black-Scholes option pricing model. Key assumptions included: a risk-free interest rate of 3.74%, a dividend yield of 2.08%, volatility of 45.5%, and the option life of 2.00 years. The fair value of $14,000 compares to $90,000, the present value of the 24 remaining payments under the contract, discounted at the Company's incremental borrowing rate of 6.5%. (Refer to Note 15 of Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2004.) Note 11: ASSET HELD FOR SALE ------------------- In the second quarter of 2005, the Company reached an agreement for the sale of Ronson Aviation's charter aircraft and charter business for $1.6 million in cash. The closing on the sale is expected in the third quarter of 2005. The carrying value of the aircraft has been reduced by $97,000 to the expected proceeds of $1.6 12 million and is classified as an Asset Held for Sale in the Consolidated Balance Sheet. The resulting loss consisted of: 1) $97,000 due to the excess of the expected proceeds over the book value of the aircraft; and 2) approximately $324,000 in costs preparing the aircraft for sale and costs related to the sale. The Company has two term loans associated with the aircraft totaling $492,000 at June 30, 2005, which will be repaid from the proceeds. ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS ----------------------------------------------------------------------- OF OPERATIONS ------------- RESULTS OF OPERATIONS - --------------------- Second Quarter 2005 Compared to Second Quarter 2004 and First Half 2005 Compared to First Half 2004. The Company's Net Sales were $12,506,000 in the first half of 2005 as compared to $13,425,000 in the first half of 2004 and were $6,069,000 in the second quarter of 2005 compared to $6,376,000 in the second quarter of 2004. In the second quarter of 2005, the Company reached an agreement for the sale of Ronson Aviation's charter aircraft, the Citation II, and its charter business for $1.6 million in cash. The sale is expected to be completed in the third quarter of 2005. The expected sale resulted in a nonrecurring loss in the second quarter of 2005 of $421,000, before income taxes. After the nonrecurring loss, the Company had a Net Loss in the second quarter of 2005 of $325,000 as compared to a Net Loss in the second quarter of 2004 of $74,000. Ronson Consumer Products - ------------------------ (in thousands) Quarter Ended Six Months Ended June 30, June 30, ----------------- ----------------- 2005 2004 2005 2004 ------ ------ ------ ------ Net sales $3,466 $3,900 $7,381 $8,649 Earnings from operations 165 307 409 1,074 Earnings before income taxes and intercompany charges 120 286 309 1,042 Net Sales of consumer products at Ronson Consumer Products Corporation ("RCPC"), Woodbridge, New Jersey, and Ronson Corporation of Canada Ltd. ("Ronson-Canada"), Mississauga, Ontario, (together "Ronson Consumer Products") decreased by 11% in the second quarter of 2005 compared to the second quarter of 2004 and by 15% in the first half of 2005 compared to the first half of 2004. The decrease of 11% in Net Sales in the second quarter consisted of an increase of about 8% due to higher average net selling prices more than offset by a reduction of about 19% due to lower volume of products sold. The decrease of 15% in the first half consisted of an increase of about 7% due to higher average net selling prices more than offset by a reduction of about 22% due to lower volume of products sold. Cost of Sales, as a percentage of Net Sales, at Ronson Consumer Products decreased to 59% in the second quarter of 2005 from 61% in the second quarter of 2004 but increased to 60% in the first half of 2005 from 59% in the first half of 2004. The reduction in the Cost of Sales percentage in the second quarter of 2005 was primarily due to the increase in average net selling prices (discussed above) and a reduction in manufacturing costs, which more than offset increased material 13 costs because of increases in the price of oil, used in fuels for butane refills and Ronsonol as well as other components, and the effect of the lower Net Sales. The amount of the Cost of Sales at Ronson Consumer Products was reduced by 13% in the second quarter of 2005 from the second quarter 2004 and decreased in the first half of 2005 from the first half of 2004 by 12%. These decreases in the amount of Cost of Sales were composed of the following:
Quarter Ended Six Months Ended June 30, June 30, 2005 2005 ---- --- Reduced volume of products sold 14% 16% Decreased (increased) manufacturing costs 3% (1)% Increase in unit costs of products sold (4)% (3)% ---- --- Total reduction (%) in amount of Cost of Sales 13% 12% ==== ===
The increase in unit costs of product sold is due primarily to increased prices of oil. Selling, Shipping and Advertising Expenses, as a percentage of Net Sales, at Ronson Consumer Products increased to 25% in the second quarter of 2005 from 22% in the second quarter of 2004 and increased to 24% in the first half of 2005 from 19% in the first half of 2004. These increases in 2005 were primarily due to lower Net Sales, to increased shipping costs due to higher oil prices, and increased costs associated with the Company's new warehouse facility. General and Administrative Expenses, as a percentage of Net Sales, were unchanged at 8% in the first half of 2005 and in the first half of 2004 primarily because lower personnel costs were offset by the effect on the percentage of the decreased Net Sales. Ronson Aviation - --------------- (in thousands) Quarter Ended Six Months Ended June 30, June 30, -------------------- -------------------- 2005 2004 2005 2004 ------- ------- ------- ------- Net sales $ 2,603 $ 2,476 $ 5,125 $ 4,776 Earnings from operations 364 329 617 680 Earnings before income taxes and intercompany charges 347 304 591 636 Nonrecurring loss - sale of charter aircraft (421) -- (421) -- Net Sales at Ronson Aviation, Inc. ("Ronson Aviation"), Trenton, New Jersey, increased by 5% in the second quarter of 2005 from the second quarter of 2004 and by 7% in the first half of 2005 from the first half of 2004. The increase in the second quarter of 2005 was primarily due to increased aircraft fuel sales due to higher aviation fuel prices. The increase in sales in the first half of 2005 was primarily due to increased sales of aircraft fuel due to higher aviation fuel prices and to the increased sales of avionics services. Ronson Aviation's Cost of Sales, as a percentage of Net Sales, increased to 75% in the second quarter of 2005 and 76% in the first half of 2005 from 71% and 70% in the second quarter and first half of 2004, respectively. The increases in the Cost of Sales percentage in 2005 were primarily due to increases in the cost of aircraft fuel due to higher oil prices. 14 Ronson Aviation's Selling, Shipping and Advertising Expenses and General and Administrative Expenses, as a percentage of Net Sales, decreased to 7% in the second quarter of 2005 from 11% in the second quarter of 2004 and to 8% in the first half of 2005 from 11% in the first half of 2004 primarily due to reduced personnel costs in 2005. The Nonrecurring Loss of $421,000 in the second quarter of 2005 was due to the expected sale of Ronson Aviation's charter aircraft, the Citation II, and the related charter business. In the second quarter of 2005, the Company reached an agreement for the sale of the charter aircraft and business for $1.6 million in cash. The closing on the sale is expected in the third quarter of 2005. The Nonrecurring Loss consisted of: 1) $97,000 due to the excess of the expected proceeds over the book value of the aircraft; and 2) approximately $324,000 in costs preparing the aircraft for sale and costs related to the sale. The carrying value of the aircraft has been reduced to the expected proceeds of $1.6 million and is classified as an Asset Held for Sale in the Consolidated Balance Sheet. The Company has two term loans associated with the aircraft totaling $492,000 at June 30, 2005, which will be repaid from the proceeds. In the first halves of 2005 and 2004, the charter business had revenues of $348,000 and $340,000, respectively, and operating losses of $96,000 and $32,000, respectively. Other Items - ----------- The Other Charges in the second quarter and first half of 2005 were the Nonrecurring Loss related to the sale of the charter aircraft (discussed above) and the legal fees incurred related to stockholder litigation. The Other Charges in the second quarter and first half of 2004 were the legal fees incurred related to stockholder litigation. (Refer to Item 1 of Part II of this Form 10-Q.) Interest Expense increased in the second quarter and first half of 2005 from the same periods in 2004 primarily due to higher average debt levels. FINANCIAL CONDITION The Company's Stockholders' Equity decreased to $3,419,000 at June 30, 2005, from $3,873,000 at December 31, 2004. The decrease of $454,000 in Stockholders' Equity was primarily due to the Net Loss in the first half of 2005. The Company had a deficiency in working capital of $665,000 at June 30, 2005, as compared to $1,060,000 at December 31, 2004. The improvement in working capital was primarily due to the classification of the expected proceeds of $1.6 million for the sale of the Citation II as an Asset Held for Sale in current assets, partially offset by the Net Loss in 2005. Based on the amount of the loans outstanding and the levels of accounts receivable and inventory at June 30, 2005, Ronson Consumer Products and Ronson Aviation had total unused borrowings available at June 30, 2005 of about $285,000 under the Bank of America and Canadian Imperial Bank of Commerce lines of credit. The Bank of America lines of credit with RCPC and Ronson Aviation and the term loans between Bank of America and Ronson Aviation had been scheduled to expire on June 30, 2005. Bank of America and the Company extended these lines of credit and term loans to September 30, 2005. The extensions also replaced a financial ratio covenant in the lines of credit with a covenant providing for a minimum consolidated earnings before interest, taxes, depreciation, and amortization. Discussions between Bank of America and the Company regarding renewal of the lines of credit are continuing. 15 The Company's Inventories increased in the first half of 2005 primarily due to increases in inventories of the Company's imported consumer products, it's lighters and torches. Inventories and Short-term Debt increased in the first half of 2004 due to the delivery of an aircraft to Ronson Aviation, at a cost of $946,000 for resale, and due to increases in inventory at Ronson Consumer Products related to new products and to timing of purchases. The Company's net Property, Plant, and Equipment decreased primarily due to the classification of the Citation II as an Asset Held for Sale in Current Assets. The Company's Short-Term Debt increased in the first half of 2005 primarily due to increased borrowings under the Company's lines of credit. The Company's Accounts Payable increased in the first half of 2005 primarily due to the timing of purchases and payments. On February 15, 2005, the Company's Board of Directors declared a 5% stock dividend on the Company's common stock. The 5% stock dividend was issued on April 15, 2005, to stockholders of record April 1, 2005. Information as to the number of shares and per share amounts has been retroactively adjusted to reflect this stock dividend. The Company has continued to meet its obligations as they have matured and management believes that the Company will continue to meet its obligations through internally generated funds from future net earnings and depreciation, established external financial arrangements, potential additional sources of financing and existing cash balances. FORWARD-LOOKING STATEMENTS This Management's Discussion and Analysis of Financial Condition and Results of Operations and other sections of this report contain forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause the results of the Company to differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any projections of earnings, revenue, margins, costs or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statement concerning new products, services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. The risks, uncertainties and assumptions referred to above include the success of new products; competition; prices of key materials, such as petroleum products; the challenge of managing asset levels, including inventory; the difficulty of aligning expense levels with revenue changes; assumptions relating to pension costs; and other risks that are described herein and that are otherwise described from time to time in the Company's Securities and Exchange Commission reports. The Company assumes no obligation and does not intend to update these forward-looking statements. ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ---------------------------------------------------------- There has been no significant change in the Company's exposure to market risk during the first six months of 2005. For discussion of the Company's exposure to market risk, refer to Item 7A, Quantitative and Qualitative Disclosure about Market 16 Risk, contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2004, incorporated herein by reference. ITEM 4 - CONTROLS AND PROCEDURES ----------------------- (a) Evaluation of Disclosure Controls and Procedures. The Company's Chief Executive Officer and Chief Financial Officer, after the evaluation of the effectiveness of the Company's "disclosure controls and procedures" (as defined in Rules 13a-4(c) and 15-14(c) under the Securities Exchange Act of 1934) as of the end of the period covered by this quarterly report, have concluded that, as of the end of the period covered by this quarterly report, the Company's disclosure controls and procedures were adequate, are designed to ensure that material information related to the Company and its consolidated subsidiaries would be made known to the above officers, are effective and provide reasonable assurance that they will meet their objectives. (b) Changes in Internal Controls. There were no significant changes in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. PART II - OTHER INFORMATION ITEM 1 - LEGAL PROCEEDINGS ----------------- The Company is involved in various product liability claims. The claimants have claimed unspecified damages. The ultimate liability cannot now be determined because of the considerable uncertainties that exist. Therefore, it is possible that results of operations or liquidity in a particular period could be materially affected by these matters. However, based on facts currently available, management believes that damages awarded, if any, would be well within existing insurance coverage. Steel Partners II, L.P., et al v. Louis V. Aronson II, Robert A. Aronson, - ------------------------------------------------------------------------- Erwin M. Ganz, I. Leo Motiuk, Gerard J. Quinnan, Justin P. Walder, - ------------------------------------------------------------------ Saul H. Weisman, Carl W. Dinger III and Ronson Corporation - ---------------------------------------------------------- On March 25, 2003, a derivative lawsuit was filed against the directors of Ronson in the Superior Court of New Jersey, Chancery Division, Essex County by Steel Partners II, L.P. and Warren G. Lichtenstein. The lawsuit alleges, among other matters, breach of fiduciary duty and an absence of disinterestedness by the defendants, and use of corporate control to advance their own interests. The lawsuit seeks monetary damages on behalf of Ronson as well as equitable relief to invalidate the Company's shareholder rights agreement and certain consulting agreements, to enjoin performance of agreements with certain directors and to require the Company's President and C.E.O. to divest those shares acquired, and not to acquire additional shares while the shareholder rights agreement has been or remains in place. A special committee of two independent directors was created by the Board of Directors of the Company to investigate and evaluate the allegations made in the lawsuit. The committee concluded that none of the directors breached any fiduciary duty owed to the Company or its shareholders, that it is not in the best interests of the Company or its shareholders to continue legal action against the directors on any of the claims asserted in the derivative complaint and that the Company seek to dismiss the derivative action. 17 The Company's directors have vigorously denied the claims and have moved to have the complaint dismissed. That motion to dismiss was denied in February 2004. The Company's directors will continue to contest and to vigorously defend against the claims. On June 21, 2004, the Superior Court of New Jersey granted the motion of the Ronson directors, over the objection of Steel Partners II, L.P., to bifurcate the case. As a result, trial of all claims and defenses in the derivative suit, other than the defense based upon the report and findings of the Special Litigation Committee, will be held in abeyance pending trial of the Special Litigation Committee defense. The trial of the Special Litigation Committee defense was conducted in March, 2005. The parties have submitted post-trial memoranda, and await the Superior Court's determination of the Special Litigation Committee defense. On July 23, 2004, Ronson Corporation and certain of its directors filed a Counterclaim and Third-Party Complaint against Steel Partners II, L.P., Warren G. Lichtenstein and certain close associates -- namely, Jack Howard, Howard M. Lorber and Ronald Hayes. The Counterclaim and Third-Party Complaint is based upon the New Jersey Shareholders Protection Act, and seeks compensatory and punitive damages, costs of suit and interest, as well as entry of a judgment directing the public disclosure of all limited partners of Steel Partners II, L.P., and persons acting directly or indirectly in concert with them in connection with the acquisition or attempted acquisition of stock in, or control of, Ronson Corporation. All discovery and other proceedings in connection with the Counterclaim and Third-Party Complaint are being held in abeyance pending completion of the trial of the Special Litigation Committee defense. Steel Partners II, L.P. v. Louis V. Aronson II, Robert A. Aronson, Barbara L. - ----------------------------------------------------------------------------- Collins, Carl W. Dinger III, Paul H. Einhorn, Erwin M. Ganz, Daryl K. Holcomb, - ------------------------------------------------------------------------------ I. Leo Motiuk, Gerard J. Quinnan, Justin P. Walder, and Saul H. Weisman - ----------------------------------------------------------------------- On or about April 14, 2005, Steel Partners II, L.P. commenced an action, on its own behalf as a shareholder of the Company, in the United States District Court for the District of New Jersey, against the current directors of the Company, as well as Daryl K. Holcomb, the Company's chief financial officer, and Carl W. Dinger, a shareholder of and consultant to the Company. The Complaint alleges, among other things, that defendants should be treated collectively as an "Acquiring Person" under the Company's Shareholder Rights Agreement, and that their acquisition and ownership of more than 12% of the outstanding stock of the Company has triggered the provisions of the Shareholder Rights Agreement with respect to the offering of rights to shareholders, including Steel Partners II (notwithstanding that in its derivative action in the Superior Court of New Jersey, Steel Partners has challenged the legality and enforceability of the Company's Shareholder Rights Agreement). The Complaint alleges further that the defendants have violated reporting requirements under Section 13(d) of the Securities Exchange Act and Rule 13-d promulgated by the Securities Exchange Commission by failing to disclose an alleged agreement to coordinate their purchases of the Company's stock for the purposes of placing voting control in the hands of Louis V. Aronson II and for other undisclosed purposes. The Company's directors and its chief financial officer intend to contest the allegations of this second complaint filed by Steel Partners and vigorously defend the action. 18 Juraj Kosco and Maria Kosco vs. Ronson Consumer Products Corporation, Ronson Corporation, Industrial Waste Management, Inc., Cuno Incorporated, XYZ Corporations #1-10 (fictitious parties), John and/or Jane Does #1-10 (fictitious individuals) The plaintiffs, a former employee and his spouse, claim damages for burns and other injuries allegedly received in an accident occurring during the employee's performance of his job. The lawsuit was filed in the Superior Court of New Jersey, Law Division, Middlesex County, on February 10, 2005, and claims damages totaling $10,000,000. The claimant has received, and is receiving, workers' compensation benefits related to the incident. Management believes that damages, if any, awarded in addition to the statutory workers' compensation benefits, will be well within the Company's insurance coverage. ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K -------------------------------- (a) Exhibits. 31.1(a) and (b) Rule 13a-14(a)/15d-14(a) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Section 1350 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished but not filed for purposes of the Securities Exchange Act of 1934). (b) Reports on Form 8-K. The Company filed a report on Form 8-K with the Securities and Exchange Commission dated April 29, 2005, in response to Item 8.01 of such report. No financial statements or pro forma financial information were included in this report. The Company filed a report on Form 8-K with the Securities and Exchange Commission dated May 10, 2005, in response to Item 2.02 of such report. No financial statements or pro forma financial information were included in this report. The Company filed a report on Form 8-K with the Securities and Exchange Commission dated May 11, 2005, in response to Item 8.01 of such report. No financial statements or pro forma financial information were included in this report. The Company filed a report on Form 8-K with the Securities and Exchange Commission dated May 26, 2005, in response to Item 8.01 of such report. No financial statements or pro forma financial information were included in this report. The Company filed a report on Form 8-K with the Securities and Exchange Commission dated July 21, 2005, in response to Item 1.01 of such report. No financial statements or pro forma financial information were included in this report. The Company filed a report on Form 8-K with the Securities and Exchange Commission dated August 8, 2005, in response to Item 2.02 of such report. No financial statements or pro forma financial information were included in this report. 19 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. RONSON CORPORATION Date: August 12, 2005 /s/Louis V. Aronson II --------------------------------- Louis V. Aronson II, President & Chief Executive Officer (Signing as Duly Authorized Officer of the Registrant) Date: August 12, 2005 /s/Daryl K. Holcomb --------------------------------- Daryl K. Holcomb, Vice President & Chief Financial Officer, Controller and Treasurer (Signing as Chief Financial Officer of the Registrant) 20 EX-31.1A 2 ex31-1a.txt Exhibit 31.1(a) CERTIFICATION I, Louis V. Aronson II, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Ronson Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; c. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions): a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 12, 2005 /s/Louis V. Aronson II --------------------------- Louis V. Aronson II President and C.E.O. 21 EX-31.1B 3 ex31-1b.txt Exhibit 31.1(b) CERTIFICATION I, Daryl K. Holcomb, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Ronson Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; c. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions): a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 12, 2005 /s/Daryl K. Holcomb ------------------------ Daryl K. Holcomb Vice President and C.F.O. 22 EX-32.1 4 ex32-1.txt Exhibit 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of Ronson Corporation (the "Company"), certifies that: (1) the Quarterly Report on Form 10-Q of the Company for the quarterly period ended June 30, 2005 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78 m or 78 o(d)); and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: August 12, 2005 /s/Louis V. Aronson II ------------------------------------- Louis V. Aronson II President and Chief Executive Officer Dated: August 12, 2005 /s/Daryl K. Holcomb ------------------------------------- Daryl K. Holcomb Vice President and Chief Financial Officer This certification is made solely for the purposes of 18 U.S.C. Section 1350, subject to the knowledge standard contained therein, and not for any other purpose. 23 -----END PRIVACY-ENHANCED MESSAGE-----