-----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, Me7cr5AkSfNv9UN+xH3EjPcx6aBcNGptHUfoD3oj+PvqrlReTVUhM3/a6+CSPuEY asERyVtxj3sebTNVXDfKPg== 0000914317-09-002190.txt : 20091201 0000914317-09-002190.hdr.sgml : 20091201 20091201154412 ACCESSION NUMBER: 0000914317-09-002190 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20090331 FILED AS OF DATE: 20091201 DATE AS OF CHANGE: 20091201 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/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-01031 FILM NUMBER: 091214835 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/A 1 form10qa-103977_ronc.txt 10-Q/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549-1004 FORM 10-Q/A (Amendment No.1) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2009 -------------- 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.) 3 Ronson Rd., P.O. Box 3000, Woodbridge, NJ 07095 ================================================================================ (Address of principal executive offices) (732) 636-2430 ================================================================================ (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 has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [_] No [_] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act (Check one): Large accelerated filer [_] Accelerated filer [_] Non-accelerated filer [X] Smaller reporting company [_] (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [_] No [X] As of March 31, 2009, there were 5,083,539 shares of the registrant's common stock outstanding. EXPLANATORY NOTE Ronson Corporation (the "Company") is filing this Amendment No. 1 (this "Form 10-Q/A") to its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2009 ("1st Quarter 10-Q"), which was originally filed on May 20, 2009, to address comments from the staff (the "Staff") of the Securities and Exchange Commission in connection with the Staff's regular periodic review of the Company's filings and to provide consistent presentation of financial information in the Company's periodic filings. As a result of comments received from the Staff, the Company has reevaluated its classification of debt and has determined that the Company should restate its consolidated financial statements for the year ended December 31, 2008 included in our Annual Report on Form 10-K ("2008 10-K") to reclassify certain Long-term Debt as Current Liabilities and to make corresponding revisions to other portions of the 2008 10-K including, without limitation, Management's Discussion and Analysis of Financial Condition and Results of Operations and Controls and Procedures. The Company has filed an Amendment No. 1 to the 2008 10-K to effect such revisions. In order to provide consistent presentation of financial information in our periodic filings we are filing this Form 10-Q/A to make comparable revisions to the 1st Quarter 10-Q. The Form 10-Q/A restates the consolidated financial statements, as discussed above, to reclassify certain Long-term Debt as Current Liabilities, revises Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations, Item 4T - Controls and Procedures and the Certifications which are dated currently. Except as discussed above, the Company has not modified or updated disclosures presented in the 1st Quarter 10-Q except as required to reflect the effects of the items discussed above. Accordingly, this Form 10-Q/A does not reflect events occurring after the filing of the 1st Quarter 10-Q or modify or update those disclosures affected by subsequent events or discoveries and information contained in the 1st Quarter 10-Q and not affected by these restatements and reclassifications are unchanged. Events occurring after the filing of the 1st Quarter 10-Q or other disclosures necessary to reflect subsequent events have been or will be addressed in the Company's reports filed subsequent to the 1st Quarter 10-Q. This Form 10-Q/A should be read in conjunction with the Company's filings made with the Securities and Exchange Commission subsequent to the filing of the 1st Quarter 10-Q, including any amendments to those filings. 2 RONSON CORPORATION FORM 10-Q/A INDEX ----------------- PART I - FINANCIAL INFORMATION: PAGE ---- ITEM 1 - FINANCIAL STATEMENTS: CONSOLIDATED BALANCE SHEETS: MARCH 31, 2009 AND DECEMBER 31, 2008 4 CONSOLIDATED STATEMENTS OF OPERATIONS: QUARTER ENDED MARCH 31, 2009 AND 2008 5 CONSOLIDATED STATEMENTS OF CASH FLOWS: QUARTER ENDED MARCH 31, 2009 AND 2008 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 15 ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 21 ITEM 4T - CONTROLS AND PROCEDURES 21 PART II - OTHER INFORMATION: ITEM 6 - EXHIBITS 22 SIGNATURES 23 3 PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES CONSOLIDATED BALANCE SHEETS --------------------------- (in thousands of dollars) March 31, December 31, 2009 2008 ------------ ------------ (unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ -- $ 7 Accounts receivable, net 608 973 Inventories: Finished goods 588 1,120 Work in process 11 12 Raw materials 472 435 ------------ ------------ 1,071 1,567 Other current assets 445 446 Current assets of discontinued operations 964 1,115 ------------ ------------ TOTAL CURRENT ASSETS 3,088 4,108 ------------ ------------ Property, plant and equipment, at cost: Land 6 6 Buildings and improvements 2,189 2,193 Machinery and equipment 5,911 5,918 Construction in progress 125 125 ------------ ------------ 8,231 8,242 Less accumulated depreciation and amortization 6,036 5,961 ------------ ------------ 2,195 2,281 Other assets 4,281 3,441 Other assets of discontinued operations 4,971 5,007 ------------ ------------ $ 14,535 $ 14,837 ============ ============ LIABILITIES AND STOCKHOLDERS' DEFICIENCY CURRENT LIABILITIES: Short-term debt $ 1,317 $ 1,689 Current portion of long-term debt and leases 2,885 2,934 Accounts payable 3,135 2,326 Accrued expenses 1,728 1,104 Current liabilities of discontinued operations 4,445 4,392 ------------ ------------ TOTAL CURRENT LIABILITIES 13,510 12,445 ------------ ------------ Long-term debt and leases 141 151 Other long-term liabilities 2,133 2,146 Other long-term liabilities of discontinued operations 188 189 STOCKHOLDERS' DEFICIENCY: Common stock 5,173 5,173 Additional paid-in capital 30,004 29,998 Accumulated deficit (32,304) (30,893) Accumulated other comprehensive loss (2,713) (2,775) ------------ ------------ 160 1,503 Less cost of treasury shares 1,597 1,597 ------------ ------------ TOTAL STOCKHOLDERS' DEFICIENCY (1,437) (94) ------------ ------------ $ 14,535 $ 14,837 ============ ============ 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) Three Months Ended March 31, ------------------------ 2009 2008 ---------- ---------- NET SALES $ 1,742 $ 3,345 ---------- ---------- Cost and expenses: Cost of sales 1,533 2,150 Selling, shipping and advertising 649 906 General and administrative 1,191 735 Depreciation and amortization 90 105 ---------- ---------- 3,463 3,896 ---------- ---------- LOSS FROM CONTINUING OPERATIONS BEFORE INTEREST AND OTHER ITEMS (1,721) (551) ---------- ---------- Other expense: Interest expense 104 134 Other-net 628 98 ---------- ---------- 732 232 ---------- ---------- LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (2,453) (783) Income tax benefits (875) (153) ---------- ---------- LOSS FROM CONTINUING OPERATIONS (1,578) (630) Earnings from discontinued operations (net of tax benefits of $(72) and $(9)) 167 369 ---------- ---------- NET LOSS $ (1,411) $ (261) ========== ========== NET EARNINGS (LOSS) PER COMMON SHARE: Basic: Loss from continuing operations $ (0.31) $ (0.12) Earnings from discontinued operations 0.03 0.07 ---------- ---------- Net loss $ (0.28) $ (0.05) ========== ========== Diluted: Loss from continuing operations $ (0.31) $ (0.12) Earnings from discontinued operations 0.03 0.07 ---------- ---------- Net loss $ (0.28) $ (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) Three Months Ended March 31, -------------------- 2009 2008 -------- -------- Cash Flows from Operating Activities: Net loss $ (1,411) $ (261) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 109 142 Stock option expense 6 -- Deferred income tax benefits (913) (187) Increase (decrease) in cash from changes in: Current assets and current liabilities 2,291 724 Other non-current assets and other long-term liabilities 10 (42) Net change in pension-related accounts 95 20 Discontinued operations 239 86 -------- -------- Net cash provided by operating activities 426 482 -------- -------- Cash Flows from Investing Activities: Capital expenditures -- (18) -------- -------- Net cash used in investing activities -- (18) -------- -------- Cash Flows from Financing Activities: Proceeds from short-term debt 25 40 Payments of short-term debt (397) (402) Payments of long-term debt (56) (70) Payments of long-term lease obligations (3) (63) -------- -------- Net cash used in financing activities (431) (495) -------- -------- Effect of exchange rate changes on cash and cash equivalents (2) (13) -------- -------- Net decrease in cash and cash equivalents (7) (44) Cash and cash equivalents at beginning of period 7 78 -------- -------- Cash and cash equivalents at end of period $ -- $ 34 ======== ======== See notes to consolidated financial statements. 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ FOR THE QUARTER ENDED MARCH 31, 2009 (UNAUDITED) ------------------------------------------------ Note 1: ACCOUNTING POLICIES ------------------- Basis of Financial Statement Presentation - The information as of and for the three months ended March 31, 2009 and 2008, 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. Going Concern and Management's Response - The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the Quarter ended March 31, 2009, the Company had a Loss from Continuing Operations of $1,578,000 and a Net Loss of $1,411,000 and had a Net Loss of $1,652,000 for the year ended December 31, 2008. At March 31, 2009, the Company had both a deficiency in working capital and a Stockholders' Deficit. In addition, the Company was in violation of certain provisions of certain short-term and long-term debt covenants at March 31, 2009 and December 31, 2008, (refer to Note 3). As a result of the violations of certain debt covenants, the long-term portions ($3,118,000 and $5,296,000 at March 31,2009 and December 31, 2008, respectively) of term loans was classified as Current Portion of Long-term Debt (refer to Note 10 below). The Company's losses and difficulty in generating sufficient cash flow to meet its obligations and sustain its operations, as well as existing events of default under its credit facilities and mortgage loans, raise substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. On March 30, 2009, the Company and its wholly-owned subsidiaries entered into a forbearance agreement with their principal lender, Wells Fargo Bank, National Association ("Wells Fargo"), under which, as subsequently amended, Wells Fargo has agreed not to assert existing events of default under the Company's credit facilities with Wells Fargo through June 12, 2009, or such earlier date determined under the forbearance agreement. The forbearance period may terminate earlier if, among other events, the Company breaches the forbearance agreement, additional events of default occur under the credit facilities with Wells Fargo, the Company fails to employ a Chief Restructuring Officer or the Company fails actively to pursue alternative financing or divestiture of the Company's aviation division. During the forbearance period, Wells Fargo will make available to the domestic borrowers an overadvance facility in the amount of up to $500,000 to supplement the Company's credit line, the maximum amount of which has been adjusted to $2.5 million. During the forbearance period, the Company will continue to be obligated for interest at the default rate under the credit and term loan facilities with Wells Fargo, except for interest on overadvances that accrue at the bank's prime rate plus 8% per annum, in addition to a forbearance fee in the amount of $450,000 which will be charged as an advance under the credit line upon the earlier of the end of the forbearance period or repayment of all amounts owed to Wells Fargo. On May 15, 2009, the Company entered into an agreement to sell substantially all of the assets of Ronson Aviation, Inc. ("Ronson Aviation"), its wholly-owned subsidiary engaged as a fixed-base operator at Trenton-Mercer Airport. Ronson Aviation provides aircraft fueling and servicing, avionics sales, aircraft repairs 7 and maintenance, hangar and office leasing and related services. The Company procured purchasers so as to maximize the value of Ronson Aviation, permit it to satisfy outstanding indebtedness, including to Wells Fargo, and provide working capital to support and focus on its consumer products business. The Company's objective is to consummate a transaction prior to the end of the third quarter of 2009, subject to obtaining shareholder approval and meeting other conditions contained in the purchase agreement. In 2008 and to date in 2009, the Company has taken steps to reduce its costs and expenses. Certain salaries to officers were reduced. The Company's officers accepted reductions in the management incentive compensation totaling $79,000 related to operating results in 2007 that had been due to be paid in 2008 and $44,000 in management incentive compensation related to operating results in 2008. In the first quarter of 2009, the Company reduced its workforce by about 15 persons, or 17% of the Company's staff. The Company reduced the health benefits provided to its employees, and deferred payment of the Company's contribution to its defined contribution pension plan. In addition, certain employees have temporarily assumed payment of costs of Company vehicles and costs of life and other insurance. All payments to directors of the Company, including officers who are directors, have been deferred. The Company continues to review its costs for additional reductions. Pending consummation of a liquidity transaction, the Company will continue to effect cost reductions and seek sources of financing, without which the Company will not be able to fund current operations beyond the forbearance period. The Company does not have a commitment from Wells Fargo to extend the forbearance period beyond its current duration. In the event of acceleration of its indebtedness to Wells Fargo and its outstanding mortgage loans as a result of existing defaults, the Company would not have sufficient cash resources to pay such amounts. There can be no assurance that the Company will be able to obtain an extension of its arrangements with Wells Fargo, arrange additional financing or complete its divestiture plans within its anticipated time frame. This quarterly report should be read in conjunction with the Company's Annual Report on Form 10-K. New Authoritative Accounting Pronouncements - The Company does not anticipate the adoption of recently issued accounting pronouncements to have a significant impact on the Company's results of operations, financial position or cash flows. 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): 8
Quarter Ended March 31, -------------------------------------------------------------------------- 2009 2008 ----------------------------------- ----------------------------------- Per Per Earnings Share Earnings Share (Loss) Shares Amount (Loss) Shares Amount --------- --------- --------- --------- --------- --------- Loss from continuing operations $ (1,578) 5,084 $ (.31) $ (630) 5,084 $ (.12) Earnings from discontinued operations 167 5,084 .03 369 5,084 .07 --------- --------- --------- --------- BASIC $ (1,411) 5,084 $ (.28) $ (261) 5,084 $ (.05) ========= ========= ========= ========= ========= ========= Effect of dilutive securities, Stock options (1) -- -- --------- --------- Continuing operations $ (1,578) 5,084 $ (.31) $ (630) 5,084 $ (.12) Earnings from discontinued operations 167 5,084 .03 369 5,084 .07 --------- --------- --------- --------- DILUTED $ (1,411) 5,084 $ (.28) $ (261) 5,084 $ (.05) ========= ========= ========= ========= ========= =========
(1) Stock options were anti-dilutive for all the periods presented, and, therefore, were excluded from the computation and reconciliation of Diluted Earnings (Loss) per Common Share for those periods. The number of potentially anti-dilutive securities was 26,000 in the three months ended March 31, 2009. Note 3: SHORT-TERM DEBT --------------- On May 30, 2008, the Company and Ronson Consumer Products Corporation ("RCPC"), Ronson Aviation, and Ronson Corporation of Canada Ltd. ("Ronson-Canada"), (collectively, the "Borrowers") entered into a secured revolving credit facility with Wells Fargo. The credit facility consisted of (1) a revolving line of credit of up to $4.0 million, now $2.5 million, (2) a Real Estate Term Loan of $2,922,500 and (3) an Equipment Term Loan of $837,500. Availability under the credit facility is determined based on the value of the Borrowers' receivables and inventory, and other factors, as set forth in the credit and security agreement. The Company is a guarantor of the obligations under the credit facility. Amounts advanced under the credit facility are secured by substantially all of the assets of the Company and its subsidiaries, other than (1) the real property owned by RCPC in Woodbridge, New Jersey and (2) 34% of the Company's interest in Ronson-Canada. The term of the credit facility is 60 months. The revolving line of credit had a balance of $984,000 at March 31, 2009. The revolving line of credit bore interest at 1/2% over the Wells Fargo prime rate (3.25% at March 31, 2009), or, at the Company's option, a portion may bear interest at LIBOR plus 3%. The Company paid fees to Wells Fargo that are customary for facilities of this type. The credit facility contains minimum tangible net worth, minimum net income, minimum net cash flow and other financing covenants, certain restrictions 9 on capital expenditures, as well as affirmative and negative covenants and events of default customary for facilities of this type. On November 21, 2008, Wells Fargo advised the Company and its subsidiaries that Events of Default under the credit agreement dated May 30, 2008, had occurred. These events of default included the Company's not meeting financial covenants as follows: 1) the minimum Tangible Net Worth as of September 30, 2008, 2) the minimum Net Income for the nine months ended September 30, 2008, and 3) the minimum Net Cash Flow for the nine months ended September 30, 2008, and the Company's not meeting all of the requirements of the Post-Closing Agreement dated May 30, 2008. As a result of the events of default, Wells Fargo increased the interest rate charged on the loans outstanding under the credit agreement by 3%. These increases were assessed retroactively to July 1, 2008. In addition, in November and December, Wells Fargo reduced the amounts available to be borrowed under the revolving line of credit. In December 2008, Wells Fargo required that the Company engage a consultant to review and monitor the Company's operation and Wells Fargo increased its monitoring of the line of credit. On March 30, 2009, the Company, its subsidiaries and Wells Fargo entered into a forbearance agreement, subsequently amended, under which Wells Fargo has agreed not to assert existing events of default under the Company's credit facilities with Wells Fargo through June 12, 2009, or such earlier date determined under the forbearance agreement. The forbearance period may terminate earlier if, among other events, the Company breaches the forbearance agreement, additional events of default occur under the credit facilities with Wells Fargo, the Company fails to employ a Chief Restructuring Officer or the Company fails actively to pursue alternative financing or divestiture of the Company's aviation division. During the forbearance period, Wells Fargo will make available to the Company an overadvance facility in the amount of up to $500,000 to supplement the Company's credit line, the maximum amount of which has been adjusted to $2.5 million. During the forbearance period, the Company will continue to be obligated for interest at the default rate under the credit and term loan facilities with Wells Fargo, except for interest on overadvances that accrue at the bank's prime rate plus 8% per annum, in addition to a forbearance fee in the amount of $450,000 which will be charged as an advance under the credit line upon the earlier of the end of the forbearance period or repayment of all amounts owed to Wells Fargo. In the third quarter of 2008 and first quarter of 2009, the Company's President and CEO provided loans to the Company totaling $300,000, due on demand with interest at the prime rate minus one-half percent (2.75% at March 31, 2009). Note 4: LONG-TERM DEBT -------------- In September 2006, RCPC entered into a mortgage loan agreement with Capital One, N.A. ("Capital One"),for $2,200,000. The mortgage loan had a balance of $2,131,000 at March 31, 2009 and is secured by a first mortgage on the property of RCPC at 3 and 6 Ronson Road, Woodbridge, NJ and the guarantees of the Company and Ronson Aviation. In connection with a waiver of a covenant violation at December 31, 2007 provided to the Company by Capital One, effective April 1, 2008, the interest rate on the mortgage loan was increased to 8.00%, monthly installments were increased to $17,081, the final installment on November 1, 2016 was increased to $1,746,000, and the debt service coverage ratio was modified. 10 On August 12, 2008, Capital One provided the Company with a modification of the mortgage loan because the Company did not meet a minimum Earnings before Income Taxes covenant for the six months ended June 30, 2008. In connection with the modification, the interest rate on the mortgage loan was increased to 9.00% effective 9/1/08, 9.50% effective 1/1/09, 10.00% effective 4/1/09, 10.50% effective 7/1/09, and 11.00% effective 10/1/09. The final due date of the mortgage was changed to January 1, 2010, from the prior due date of November 1, 2016. The mortgage modification also eliminated the prepayment penalty on the agreement until April 1, 2009, when it was partially reinstated. Based on current interest rates, under the terms of the original mortgage loan prior to the modification, the prepayment penalty would have been as much as $700,000. As stated in Note 3 above, the Company was notified in November 2008 that Events of Default under the Wells Fargo Credit agreement had occurred. Under cross default provisions of the Capital One mortgage loan agreement, these Events of Default under the Wells Fargo agreement could result in an event of default under the Capital One mortgage loan agreement. On May 30, 2008, the Company obtained two term loans from Wells Fargo as part of the new credit facility (refer to Note 3 above), an Equipment Term Loan in the original amount of $837,500 with a balance of $703,000 as of March 31, 2009, and a Real Estate Term Loan in the original amount of $2,922,500 with a balance of $2,777,000 as of March 31, 2009. The Equipment Term Loan is payable in 60 equal monthly principal payments of about $14,000 plus interest. The Real Estate Term Loan is payable in 60 equal monthly principal payments of about $16,000 plus interest. The interest rate for the Equipment Term Loan, originally the prime rate plus .75%, was increased in the fourth quarter 2008, to the prime rate plus 3.75%, effective July 1, 2008. Similarly, the interest rate for the Real Estate Term Loan, originally the prime rate plus 1%, was increased to the prime rate plus 4%, effective July 1, 2008. As a result of the Events of Default discussed in Note 3 above and the likelihood that the Company would not attain compliance with the financial covenants within one year, the long-term portion of the Equipment Term Loan ($536,000) and the long-term portion of the Real Estate Term Loan ($2,582,000) have been included in the Current Portion of Long Term Debt. Note 5: CONTINGENCIES ------------- In December 1989 the Company adopted a plan to discontinue the operations of its wholly owned subsidiary, Ronson Metals Corporation, subsequently renamed Prometcor, Inc. ("Prometcor"). Upon the cessation of operations, Prometcor began its compliance with the environmental requirements of all applicable laws with the objective of selling the property previously used in the discontinued operations. The full extent of the costs and the time required for the completion is not determinable until the remediation, if any is required, and confirmatory testing related to the remaining groundwater matter have been completed and accepted by the New Jersey Department of Environmental Protection ("NJDEP"). The liability for these estimated costs and expenses as recorded in the financial statements at March 31, 2009, and December 31, 2008, was approximately $500,000 based 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 was discounted at approximately $600,000 above the lower limit. 11 The long-term portion of the environmental liability related to Prometcor was discounted at the rate of 6% per annum. The aggregate undiscounted amount was approximately $273,000 as compared to the discounted amount of $181,000. The current portion, which would be expended in the year a plan is approved by the NJDEP, is $317,000. The undiscounted amount of the long-term portion is expected to be expended at the rate of about $24,000 in the first year following the approval by the NJDEP of a plan; about $11,000/year for an additional eighteen years; and about $10,000/year for an additional ten years. 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 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 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, an estimate of additional loss, or range of loss, if any, that is reasonably possible, cannot be made. Thus, 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. 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 had two reportable segments: consumer products and aviation services. As discussed above, on March 30, 2009, the Company announced that it has initiated plans to divest its aviation services segment and, therefore, all operations of the aviation services segment have been reclassified as discontinued operations. Note 7: COMPREHENSIVE INCOME -------------------- Comprehensive (income) loss is the change in equity during a period from transactions and other events from non-owner sources. The Company is required to classify items of other comprehensive (income) loss in financial statements and to display the accumulated balance of other comprehensive (income) loss separately in the equity section of the Consolidated Balance Sheets. Changes in the components of Other Comprehensive (Income) Loss and in Accumulated Other Comprehensive Loss were as follows (in thousands): 12
Quarter Ended March 31, 2009 and 2008 ------------------------------------- Accumulated Foreign Currency Net Prior Other Translation Pension Service Comprehensive Adjustments Loss Cost Loss ------------ ------------ ------------ ------------ Balance at December 31, 2008 $ (4) $ 2,752 $ 27 $ 2,775 Current period loss 2 -- -- 2 Recognized as components of net periodic benefit cost -- (104) (1) (105) Income tax expense (benefits) (1) 41 1 41 ------------ ------------ ------------ ------------ Balance at March 31, 2009 $ (3) $ 2,689 $ 27 $ 2,713 ============ ============ ============ ============ Balance at December 31, 2007 $ (41) $ 1,354 $ 32 $ 1,345 Current period loss 13 -- -- 13 Recognized as components of net periodic benefit cost -- (60) (1) (61) Income tax expense (benefits) (4) 25 (1) 20 ------------ ------------ ------------ ------------ Balance at March 31, 2008 $ (32) $ 1,319 $ 30 $ 1,317 ============ ============ ============ ============
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): Quarter Ended March 31, ----------------------- 2009 2008 ---------- ---------- Cash Payments for: Interest $ 185 $ 146 Income Taxes -- -- Financing & Investing Activities Not Affecting Cash: None Note 9: RETIREMENT PLANS ---------------- The Company's Consolidating Statements of Operations included pension expense consisting of the following components (in thousands): Quarter Ended March 31, ------------------------ 2009 2008 ---------- ---------- Service cost $ 6 $ 5 Interest cost 81 67 Expected return on plan assets (39) (64) Recognized actuarial losses 104 60 Recognized prior service cost 1 1 ---------- ---------- Net pension expense $ 153 $ 69 ========== ========== 13 Contributions to the pension plan during 2009 are expected to be as follows (in thousands): Paid in the three months ended March 31, 2009 $ 59 Expected to be paid in the balance of 2009 183 ----- Total expected to be paid in the year ending December 31, 2009 $ 242 ===== The Company's contributions to the pension plan in the three months ended March 31, 2008 were $48,000. Note 10: RESTATEMENT ----------- The Company has reviewed and revised its classification as Long-term debt of the portion of the loans from Wells Fargo that would have been due, according to the terms of the agreements, after March 31, 2010. Because of the existing Events of Default related to the Wells Fargo credit agreement and the likelihood that the Company would not attain compliance within one year with the financial covenants under the Wells Fargo agreement, the Company adjusted the Current Portion of Long-term Debt and Long-term Debt in the Consolidated Balance Sheets at March 31, 2009 and by December 31, 2008. Classifying as current the amount previously classified as long-term as follows (in thousands): MARCH 31, 2009 As Previously Reported Adjustment Restated -------- ---------- -------- Current Portion of Long-term Debt and Leases $ 2,349 $ 536 $ 2,885 Current Liabilities of Discontinued Operations 1,863 2,582 4,445 Total Current Liabilities 10,392 3,118 13,510 Long-term Debt and Leases 677 (536) 141 Other Long-term Liabilities of Discontinued Operations 2,770 (2,582) 188 The adjustment is composed of the previously reported long-term portion of the Long-term Debt, as follows (in thousands): Wells Fargo Equipment $ 536 Real Estate 2,582 ------ $3,118 ====== 14 DECEMBER 31, 2008 As Previously Reported Adjustment Restated -------- ---------- -------- Current Portion of Long-term Debt and Leases $ 268 $ 2,666 $ 2,934 Current Liabilities of Discontinued Operations 1,762 2,630 4,392 Total Current Liabilities 7,149 5,296 12,445 Long-term Debt and Leases 2,817 (2,666) 151 Other Long-term Liabilities of Discontinued Operations 2,819 (2,630) 189 The adjustment is composed of the previously reported long-term portion of the Long-term Debt, as follows (in thousands): Wells Fargo Equipment $ 578 Real Estate 2,630 ------ 3,208 ------ Capital One 2,088 ------ $5,296 ====== The following Notes to the Consolidated Financial Statements have been restated to reflect the above adjustments. Note 1: Accounting Policies Note 4: Long-term Debt ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS ----------------------------------------------------------------------- OF OPERATIONS ------------- RESULTS OF OPERATIONS - --------------------- First Quarter 2009 compared to First Quarter 2008. In March 2009, the Company announced its plan to divest its wholly-owned subsidiary, Ronson Aviation, Inc. ("Ronson Aviation"). On May 15, 2009, the Company announced it entered into an agreement to sell substantially all of the assets of Ronson Aviation. Therefore, the operations of Ronson Aviation have been classified as discontinued in the Consolidated Statements of Operations below. The results of continuing operations include the Company and Ronson Consumer Products. The Company's continuing operations had Net Sales of $1,742,000 in the first quarter of 2009 as compared to $3,345,000 in the first quarter of 2008. The Company's Loss from Continuing Operations of $1,578,000 in the first quarter of 2009 compares to a loss of $630,000 in the first quarter of 2008. The Loss from Continuing Operations before Taxes in the first quarter of 2009 of $2,453,000 includes professional fees of $614,000 ($32,000 charged to discontinued operations) related to the Company's financing with its principal lender, Wells Fargo. In addition, the Loss from Continuing Operations before Taxes in the first quarter of 2009 includes a forbearance fee earned by Wells Fargo of $450,000. 15 Ronson Consumer Products - ------------------------ (in thousands) Quarter Ended March 31, -------------------- 2009 2008 -------- -------- Net sales $ 1,742 $ 3,345 Loss from operations (775) (105) Loss before income taxes and intercompany charges (907) (237) 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 48% in the first quarter of 2009 as compared to the first quarter of 2008, primarily due to the Company's restricted lending availability. This decrease of 48% was almost entirely due to a lower volume of products sold. Cost of Sales as a percentage of Net Sales, at Ronson Consumer Products increased to 88% in the first quarter of 2009 from 64% in the first quarter of 2008 due primarily to lower volume of products sold and increased material costs. The amount of the Cost of Sales decreased by about 29%. The lower sales volume reduced the cost of sales amount by 25% and a reduction in manufacturing costs by 6% (a substantial portion of which was due to the lower volume of products sold), partially offset by an increase of 2% in the amount of cost of sales due to increased material costs. Selling, Shipping and Advertising Expense at Ronson Consumer Products, as a percentage of Net Sales, increased to 37% in the first quarter of 2009 from 27% in the first quarter of 2008 primarily because reduced expenses were more than offset by the lower sales in the first quarter of 2009. Similarly, General and Administrative Expenses, as a percentage of Net Sales, increased to 15% in the first quarter of 2009 as compared to 9% in the first quarter of 2008 primarily because reduced expenses were more than offset by the lower sales in the first quarter of 2009. Other Items - ----------- The General and Administrative Expenses increased to $1,191,000 in the first quarter of 2009 from $735,000 in the first quarter of 2008. The increase was primarily because, in the first quarter of 2009, General and Administrative Expenses included consulting fees totaling $345,000 charged by Getzler Henrich & Associates, LLC ("Getzler Henrich"), a corporate turnaround and restructuring firm. In addition, the General and Administrative Expenses included the accrual of a signing bonus to Getzler Henrich of $200,000. Joel Getzler of Getzler Henrich was engaged as Chief Restructuring Officer of the Company on March 30, 2009. The General and Administrative Expenses also included legal expenses related to the Wells Fargo financing of $69,000 in the first quarter of 2009, and $32,000 was charged against Earnings from Discontinued Operations. Other-net in the first quarter of 2009 included an accrued forbearance fee to Wells Fargo of $450,000 as a result of the forbearance agreement signed on March 30, 2009. Also, the pension expenses related to the Company's frozen pension plan 16 increased to $143,000 in the first quarter of 2009 from $68,000 in the first quarter of 2008. Discontinued Operations - ----------------------- As discussed above, the Company plans to divest Ronson Aviation and has entered into an agreement for the sale of substantially all of the assets of Ronson Aviation. Therefore, the operating results, assets and liabilities of Ronson Aviation have been classified as discontinued in all periods presented. The Earnings from Discontinued Operations, Net of Tax, were lower in the first quarter of 2009 at $167,000 as compared to $369,000 in the first quarter of 2008. The reduction was due primarily to lower sales of aircraft fuel and aviation services. FINANCIAL CONDITION The Company's Stockholders' Deficiency increased to $1,437,000 at March 31, 2009 from $94,000 at December 31, 2008. The increase in the Stockholders' Deficiency was primarily due to the Net Loss in the first quarter of 2009. The Company had a deficiency in working capital of $10,422,000 at March 31, 2009, as compared to $8,337,000 at December 31, 2008. The decline in working capital was primarily due to the Loss before Income Taxes of $2,358,000 in the first quarter of 2009. On May 15, 2009, the Company entered into an Asset Purchase Agreement (the "Asset Purchase Agreement") with Ronson Aviation and Hawthorne TTN Holding, LLC ("Hawthorne") for the sale of substantially all of the assets of the Company's aviation business (other than specified assets including cash and cash equivalents and accounts receivable). The Asset Purchase Agreement provides for a purchase price of $9.5 million in cash, $0.5 million of which would be held in escrow for a period of 15 months after closing to secure indemnification claims against the Company. Consummation of the transaction is subject to, among other things, Hawthorne obtaining necessary financing to complete the asset purchase, Hawthorne's satisfactory completion of its due diligence review, the Company receiving shareholder approval to complete the transaction and the agreement of Mercer County, New Jersey to the transfer to Hawthorne of the premises used for the Company's fixed base operation as well as other customary closing conditions. In November 2008, Wells Fargo advised the Company and its subsidiaries that Events of Default under the Credit Agreement had occurred. These events of default included the Company's not meeting financial covenants as follows: 1) the minimum Tangible Net Worth as of September 30, 2008, 2) the minimum Net Income for the nine months ended September 30, 2008, and 3) the minimum Net Cash Flow for the nine months ended September 30, 2008, and the Company's not meeting all of the requirements of the Post-Closing Agreement dated May 30, 2008. As a result of the events of default, Wells Fargo increased the interest rate charged on the loans outstanding under the credit agreement by 3%. These increases were assessed retroactively to July 1, 2008. 17 On February 20, 2009, the Company received from Wells Fargo additional notification of Wells Fargo's reservation of rights and remedies relating to previously disclosed events of default which would permit Wells Fargo to accelerate the Company's outstanding indebtedness owed to Wells Fargo. These events of default extend to maintaining financial covenant compliance relating to minimum net income, net cash flow and tangible net worth requirements of the Company's last completed fiscal quarter, failure to obtain certain waivers and other agreements with third parties required under the credit facility, and failure to meet certain financial reporting due dates. Wells Fargo has instituted certain restrictions and reduced loan availability and has required the Company to engage a consultant to review its operations and cash requirements, but has not accelerated any payments under the credit facility and has continued to lend to the Company. The revolving credit facility with Wells Fargo required the Company, for the quarter ended March 31, 2009, to maintain Tangible Net Worth (Deficit) (as defined in the facility) of not less than $(1,650,000), to achieve Net Income (Loss) (as defined in the facility) for the period from January 1, 2009 to such date of not less than $(530,000) and to achieve Net Cash Flow (as defined in the facility) for the period from January 1, 2009 to such date of $(355,000). The Company's actual performance for the quarter resulted in: o Tangible Net Worth (Deficit) of $(8,028,000) (consisting of Book Net Worth (Deficit) of $(1,437,000) minus Intangible Assets of $6,591,000, as defined in the facility); o Net Income (Loss) for the three-month period of $(1,411,000) (consisting of net income from continuing operations, including extraordinary losses but excluding extraordinary gains); o Net Cash Flow for the three-month period of $(1,261,000) (consisting of Net Income, plus depreciation and amortization of $167,000 and periodic pension expense of $154,000, minus unfinanced capital expenditures of $4,000, pension plan payments of $59,000 and current maturities of long-term debt of $108,000, as defined in the facility). Accordingly, the Company was not in compliance with its covenants to Wells Fargo as of March 31, 2009, regarding Tangible Net Worth, Net Income and Net Cash Flow. As a result of the Events of the Default under the Wells Fargo agreement discussed above and the likelihood that the Company would not attain compliance with the Wells Fargo financial covenants within one year, the long-term portion of the Equipment Term Loan $(536,000) and the long-term portion of the Real Estate Term Loan $(2,582,000) have been included in Current Liabilities. Under cross-default provisions in the Company's mortgage loan from Capital One, the events of default under the Wells Fargo facility are an event of default under the mortgage loan. Capital One has not accelerated any payments under the mortgage loan. At March 31, 2009, 18 the amounts of the outstanding indebtedness to Wells Fargo and Capital One were $4,464,000 and $2,131,000, respectively. On March 30, 2009, the Company and RCPC, Ronson Aviation, and Ronson-Canada entered into a forbearance agreement with Wells Fargo, under which Wells Fargo has agreed not to assert existing events of default under the Company's credit facilities with Wells Fargo. The forbearance agreement, as amended, extends through June 12, 2009, or such earlier date determined under the forbearance agreement. The forbearance period may terminate earlier if, among other events, the Company breaches the forbearance agreement, additional events of default occur under the credit facilities with Wells Fargo, the Company fails to employ a Chief Restructuring Officer or the Company fails actively to pursue alternative financing or divestiture of the Company's aviation division. During the forbearance period, Wells Fargo will make available to the Company an overadvance facility in the amount of up to $500,000 to supplement the Company's credit line, the maximum amount of which has been adjusted to $2.5 million. During the forbearance period, the Company will continue to be obligated for interest at the default rate under the credit and term loan facilities with Wells Fargo, except for interest on overadvances that accrue at the bank's prime rate plus 8% per annum, in addition to a forbearance fee in the amount of $450,000 which will be charged as an advance under the credit line upon the earlier of the end of the forbearance period or payment of all amounts owed to Wells Fargo. On March 30, 2009, the Company retained Joel Getzler, of Getzler Henrich & Associates LLC ("Getzler Henrich"), as Chief Restructuring Officer, with responsibility for operations, finance, accounting and related administrative issues, subject to the authority and reporting to the Company's Board of Directors. Getzler Henrich is a corporate turnaround and restructuring firm which, in addition to its operational restructuring focus, is experienced in restructuring, lender/credit relationship management and financing. Mr. Getzler will act as Chief Restructuring Officer for the period during which Wells Fargo continues to make revolving advances to the Company in an amount sufficient to fund its cash flow needs. The Company will be obligated for fees and expenses to Getzler Henrich in connection with services provided by Mr. Getzler and his associates. Under the engagement letter, the Company will pay to Getzler Henrich a fee in the amount of $15,000 per week for the services of Mr. Getzler as Chief Restructuring Officer and hourly fees for Mr. Getzler's associates, the aggregate amount of which will not exceed $130,000 for the initial four-week term under the engagement letter. In addition, Getzler Henrich will be entitled to a signing bonus in the amount of $200,000. During the term of the engagement letter, payments against accrued amounts, including the signing bonus, will be made to Getzler Henrich in the amount of $10,000 each week. All accrued amounts, together with the amount of $190,000 owed to Getzler Henrich in fees prior to the appointment of Mr. Getzler, will become due upon specified liquidity events, but no later than August 31, 2009, or earlier, if the Company is not in compliance under the engagement letter. All amounts owed to Getzler Henrich are 19 secured by a collateral interest in those assets pledged to Wells Fargo, subordinated to the interest of Wells Fargo. During the term of the engagement letter, payment of salaries, fees, perks and expenses to members of the Company's Board of Directors, including its President and Chief Executive Officer, will be deferred. In 2008 and to date in 2009, the Company has taken steps to reduce its costs and expenses. Certain salaries to officers were reduced. The Company's officers accepted reductions in the management incentive compensation totaling $79,000 related to operating results in 2007 that had been due to be paid in 2008 and $44,000 in management incentive compensation related to operating results in 2008. In the first quarter of 2009, the Company reduced its workforce by about 15 persons, or 17% of the Company's staff. The Company reduced certain of the health benefits provided to its employees, and the Company deferred payment of the Company's contribution to its defined contribution pension plan. In addition, certain employees have temporarily assumed payment of costs of Company vehicles and costs of life and other insurance. All payments to directors of the Company, including officers who are directors, have been deferred. The Company continues to review its costs and expenses in order to implement additional reductions. Pending consummation of a liquidity transaction, the Company will continue to effect cost reductions and seek sources of financing, without which the Company will not be able to fund current operations beyond the forbearance period. The Company does not have a commitment from Wells Fargo to extend the forbearance period beyond its current duration. In the event of acceleration of its indebtedness to Wells Fargo and its outstanding mortgage loans, as a result of existing defaults, the Company would not have sufficient cash resources to pay such amounts. Should the sale of Ronson Aviation be consummated at or near the value agreed to in the Asset Purchase Agreement, the Company will substantially reduce its outstanding debt and improve working capital. However, there can be no assurance that the Company will be able to obtain an extension of its arrangements with Wells Fargo, arrange additional financing or complete its divestiture plans within its anticipated time frame. Based on the amount of the loans outstanding and the levels of accounts receivable and inventory at March 31, 2009, the Company's subsidiaries had unused borrowings available at March 31, 2009 of about $69,000 under the Wells Fargo line of credit. The Company's Accounts Receivable and Inventories were reduced in the first quarter primarily because the lack of sufficient liquidity substantially reduced the Company's ability to purchase the materials needed for inventory and to fill the orders received from customers. The Other Assets increased in the first quarter due to the increased deferred tax assets as a result of the tax benefits of the loss before income taxes. 20 The Company's Accounts Payable and the Accrued Expenses increased due primarily to deferred costs of: professional and consulting fees, the Wells Fargo forbearance fee, the Getzler Henrich signing bonus, and certain salaries and benefits. 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 progress of the Company's plans to divest its aviation division; the continued forbearance of lenders in asserting existing events of default under the Company's credit arrangements; the Company's ability to procure alternative sources of financing; 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, including the Company's ability to continue as a going concern. 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 three months of 2009. For discussion of the Company's exposure to market risk, refer to Item 7A, Quantitative and Qualitative Disclosure about Market Risk, contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2008, incorporated herein by reference. ITEM 4T - CONTROLS AND PROCEDURES ----------------------- a) Evaluation of Disclosure Controls and Procedures. The Company's Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") have evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of 21 the end of the period covered by this quarterly report. Based on such evaluation, such officers 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 (including its consolidated subsidiaries) would be made known to the above officers, are effective and provide reasonable assurance that they will meet their objectives. The Company's CEO and CFO reviewed whether the restatement of the Company's consolidated financial statements for the quarter ended March 31, 2009 and the fiscal year ended December 31, 2008, as described in the Explanatory Note above and Note 10 to the consolidated financial statements, affected their conclusions that the Company's disclosure controls and procedures, as of March 31, 2009, were effective in timely alerting them to material company information required to be included in our periodic filings with the SEC. In connection with their review, our CEO and CFO noted that our decision to restate our financial results did not call into question whether the relevant information was recorded, processed, summarized or reported within the time periods specified in the SEC's rules and forms. It also did not involve any issue about whether information required to be disclosed was accumulated and communicated to our CEO and CFO to allow timely decisions regarding required disclosure. Rather, the restatements resulted from an interpretation of the guidance provided in Emerging Issues Task Force Statement 86-30 that resulted in the incorrect classification of certain liabilities as long-term when they properly should have been classified as current. Therefore, based on that review, the Company's management, including the CEO and CFO determined that its prior conclusions, that the Company's disclosure controls and procedures were effective as of March 31, 2009, had not changed. 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 in the first fiscal quarter or subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. PART II - OTHER INFORMATION ITEM 6 - EXHIBITS -------- 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). 22 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: November 23, 2009 /s/ Louis V. Aronson II --------------------------------- Louis V. Aronson II, President & Chief Executive Officer (Signing as Duly Authorized Officer of the Registrant) Date: November 23, 2009 /s/ Daryl K. Holcomb --------------------------------- Daryl K. Holcomb, Vice President, Chief Financial Officer and Controller (Signing as Chief Financial Officer of the Registrant) 23 EX-31.1A 2 ex31-1a.txt EX-31.1A Exhibit 31.1(a) CERTIFICATION I, Louis V. Aronson II, certify that: 1. I have reviewed this quarterly report on Form 10-Q/A 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; 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)and 15d-15(f) 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. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c. 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; d. 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: November 23, 2009 /s/ Louis V. Aronson II ------------------------------ Louis V. Aronson II President and C.E.O. 24 EX-31.1B 3 ex31-1b.txt EX-31.1B Exhibit 31.1(b) CERTIFICATION I, Daryl K. Holcomb, certify that: 1. I have reviewed this quarterly report on Form 10-Q/A 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; 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))and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) 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. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c. 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; d. 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: November 23, 2009 /s/ Daryl K. Holcomb -------------------------- Daryl K. Holcomb Vice President and C.F.O. 25 EX-32.1 4 ex32-1.txt EX-32.1 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/A of the Company for the quarterly period ended March 31, 2009 (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. Date: November 23, 2009 /s/ Louis V. Aronson II ------------------------------------------ Louis V. Aronson II President and Chief Executive Officer Date: November 23, 2009 /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. 26 -----END PRIVACY-ENHANCED MESSAGE-----