-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Oapnp2MXkdDU8Qo4H+zB5oCzg+n2k8PLUfFzinrmafUV/kn4TOZmsKD41YvBFxl7 BOWsfduLCd/zoFBKuDQsVQ== 0000090185-94-000003.txt : 19940404 0000090185-94-000003.hdr.sgml : 19940404 ACCESSION NUMBER: 0000090185-94-000003 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940331 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SIGMA ALDRICH CORP CENTRAL INDEX KEY: 0000090185 STANDARD INDUSTRIAL CLASSIFICATION: 5160 IRS NUMBER: 431050617 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 34 SEC FILE NUMBER: 000-08135 FILM NUMBER: 94519416 BUSINESS ADDRESS: STREET 1: 3050 SPRUCE ST CITY: ST LOUIS STATE: MO ZIP: 63103 BUSINESS PHONE: 3147715765 FORMER COMPANY: FORMER CONFORMED NAME: SIGMA INTERNATIONAL LTD DATE OF NAME CHANGE: 19750925 FORMER COMPANY: FORMER CONFORMED NAME: ALDRICH CHEMICAL CO INC DATE OF NAME CHANGE: 19750908 10-K 1 FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1993 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) [x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1993 ----------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ------------- ------------ Commission file number 0-8135 SIGMA-ALDRICH CORPORATION ----------------------------------------------------- (Exact name of Registrant as specified in its charter) Delaware 43-1050617 - ------------------------------ --------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 3050 Spruce Street, St. Louis, Missouri 63103 - --------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 314-771-5765 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, $1.00 par value ----------------------------- (Title of Class) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] Aggregate market value of the voting stock held by non-affiliates of the Registrant: $2,422,561,948 March 4, 1994 -------------- ----------------- Value Date of Valuation Number of shares outstanding of each of the Registrant's classes of common stock, as of March 4, 1994: Common Stock, $1.00 par value, 49,827,529 shares outstanding The following documents are incorporated by reference in the Parts of Form 10-K indicated below: Parts of Form 10-K into Documents Incorporated by Reference: which Incorporated: - ------------------------------------ ----------------------- Pages 11-24 of the Annual Report to Shareholders for the year ended December 31, 1993 Parts I, II and IV Proxy Statement for the 1994 Annual Meeting of Shareholders Part III The Index to Exhibits is located on page F- of this report. PART I Item 1. Business. Sigma-Aldrich Corporation engages through subsidiaries in two lines of business: the production and sale of a broad range of biochemicals, organic and inorganic chemicals, radiolabeled chemicals, diagnostic reagents, chromatography products and related products (hereinafter referred to as "chemical products"), and the manufacture and sale of metal components for strut, cable tray, pipe support and telecommunication systems and electrical enclosures (hereinafter referred to as "metal products" or "B-Line"). Its principal executive offices are located at 3050 Spruce Street, St. Louis, Missouri 63103. Sigma-Aldrich Corporation (hereinafter referred to as the "Company", which term includes all consolidated subsidiaries of the Company) was incorporated under the laws of the State of Delaware in May 1975. Effective July 31, 1975 ("Reorganization"), the Company succeeded, as a reporting company, Sigma International, Ltd., the predecessor of Sigma Chemical Company ("Sigma"), and Aldrich Chemical Company, Inc. ("Aldrich"), both of which had operated continuously for more than 20 years prior to the Reorganization. Effective December 9, 1980, B-Line Systems, Inc., previously a subsidiary of Sigma, became a subsidiary of the Company. Effective June 23, 1989, the Company purchased all of the issued and outstanding capital stock of Fluka Chemie AG ("Fluka"), a Swiss corporation, from Ciba-Geigy International AG, F. Hoffman- LaRoche & Co. Limited and eleven minority shareholders. Effective May 5, 1993, the Company acquired the net assets and business of Supelco, Inc.("Supelco"), a worldwide supplier of chromatography products used in chemical research and production, from Rohm and Haas Company. (a) Chemical Products. 1) Products: The Company distributes approximately 71,000 chemical products for use primarily in research and development, in the diagnosis of disease, and as specialty chemicals for manufacturing. In laboratory applications, the Company's products are used in the fields of biochemistry, synthetic chemistry, quality control and testing, immunology, hematology, pharmacology, microbiology, neurology, and endocrinology, and in the studies of life processes. Sigma diagnostic products are used in the detection of heart, liver and kidney diseases and various metabolic disorders. Certain of these diagnostic products are used in measuring concentrations of various naturally occurring substances in the blood, indicative of certain pathological conditions. The diagnostic products are used in manual, semi-automated and automated testing procedures. Supelco offers a full line of chromatography products and application technologies for analyzing and separating complex chemical mixtures. The line includes items for the collection and preparation of various samples for further chemical analysis, gas and liquid chromatography, reference standards and related laboratory products. Aldrich also offers approximately 38,000 esoteric chemicals as a special service to customers interested in screening them for application in many areas (such as medicine and agriculture). This area accounts for less than 1% of the Company's sales. Because of continuing developments in the field of research, there can be no assurance of a continuing market for each of the Company's products. However, through a continuing review of technical literature, along with constant communications with customers, the Company keeps abreast of the trends in research and diagnostic techniques. This information, along with its own research technology, determines the Company's development of improved and/or additional products. 2) Production and Purchasing: The Company has chemical production facilities in Milwaukee and Sheboygan, Wisconsin (Aldrich); St. Louis, Missouri (Sigma); Bellefonte, Pennsylvania (Supelco); Germany (Aldrich Chemie GmbH and Co. K.G.); Israel (Makor Chemicals Limited); Switzerland (Fluka) and the United Kingdom (Sigma Chemical Company Ltd.). A minor amount of production is done by some of the Company's other subsidiaries. Biochemicals and diagnostic reagents are primarily produced by extraction and purification from yeasts, bacteria and other naturally occurring animal and plant sources. Organic and inorganic chemicals and radiolabeled chemicals are primarily produced by synthesis. Chromatography media and columns are produced using proprietary chemical synthesis and proprietary preparation processes. Similar processes are used for filtration and sample collection processes. Of the approximately 71,000 products listed in the Sigma, Aldrich, Fluka and Supelco catalogs, the Company produced approximately 31,000 which accounted for 44% of the net sales of chemical products for the year ended December 31, 1993. The remainder of products were purchased from a large number of sources either under contract or in the open market. No one supplier accounts for as much as 10% of the Company's chemical purchases. The Company has generally been able to obtain adequate supplies of products and materials to meet its needs. Whether a product is produced by the Company or purchased from outside suppliers, it is subjected to quality control procedures, including the verification of purity, prior to final packaging. This is done by a combined staff of 201 chemists and lab technicians utilizing sophisticated scientific equipment. 3) Distribution and Sales: The Company markets its chemical products primarily through Sigma, Aldrich, Fluka and Supelco under their own trademarks and labels. Marketing of products is primarily done through the distribution of over 2,600,000 comprehensive catalogs to customers and potential customers throughout the world. This is supplemented by certain specialty catalogs, by advertising in chemical and other scientific journals, by direct mail distribution of in-house publications and special product brochures and by personal visits by technical and sales representatives with customers. For customer convenience, Sigma packages approximately 300 combinations of certain of its individual products in diagnostic kit form. A diagnostic kit will include products which, when used in a series of manual and/or automated testing procedures, will aid in detecting particular conditions or diseases. The sale of these kits is promoted by a field sales unit. Diagnostic kits accounted for less than 10% of the Company's net sales of chemical products in the year ended December 31, 1993. During the year ended December 31, 1993, products were sold to approximately 129,000 customers, including hospitals, universities, clinical laboratories as well as private and governmental research laboratories. The majority of the Company's sales are small orders in laboratory quantities averaging less than $200. The Company also makes its chemical products available in larger-than-normal laboratory quantities for use in manufacturing. Sales of these products accounted for approximately 15% of chemical sales in 1993. During the year ended December 31, 1993, no one customer and no one product accounted for more than 1% of the net sales of chemical products. Sigma, Aldrich, Fluka and Supelco encourage their customers and potential customers, wherever located, to contact them by telephone "collect" or on "toll-free" WATS lines for technical staff consultation or for placing orders. Order processing, shipping, invoicing and product inventory are computerized. Shipments are made seven days a week from St. Louis, six days a week from Milwaukee, England, Germany, Israel and Japan and five days a week from all other locations. The Company strives to ship its products to customers on the same day an order is received and carries significant inventories to maintain this policy. 4) International Operations: In the year ended December 31, 1993, approximately 50% of the Company's net sales of chemical products were to customers located in foreign countries. These sales were made directly by Sigma, Aldrich, Fluka and Supelco, through distributors and by subsidiaries organized in Australia, Belgium, Brazil, Canada, Czech Republic, England, France, Germany, Holland, Hungary, India, Israel, Italy, Japan, Mexico, Scotland, Singapore, South Korea, Spain and Switzerland. Several foreign subsidiaries also have production facilities. For sales with final destinations in a foreign market, the Company has a Foreign Sales Corporation ("FSC") subsidiary which provides the Company certain Federal income tax advantages. The effect of the tax rules governing the FSC is to lower the effective Federal income tax rate on export income. The Company intends to continue to comply with the provisions of the Internal Revenue Code relating to FSCs. The Company's foreign operations and domestic export sales are subject to currency revaluations, changes in tariff restrictions and restrictive regulations of foreign governments, among other factors inherent in these operations. The Company is unable to predict the extent to which its business may be affected in the future by these matters. During the year ended December 31, 1993, approximately 10% of the Company's domestic operations' chemical purchases were from foreign suppliers. Additional information regarding international operations is included in Note 9 to the consolidated financial statements on pages 21 and 22 of the 1993 Annual Report which is incorporated herein by reference. 5) Patents and Trademarks: The Company's patents are not material to its operations. The Company's significant trademarks are the brand names "Sigma", "Aldrich", "Fluka", "Supelco" and "B-Line" and their related logos which have various expiration dates and are expected to be renewed indefinitely. 6) Regulations: The Company engages principally in the business of selling products which are not foods or food additives, drugs, or cosmetics within the meaning of the Federal Food, Drug and Cosmetic Act, as amended (the "Act"). A limited number of the Company's products, including in-vitro diagnostic reagents, are subject to labeling, manufacturing and other provisions of the Act. The Company believes it is in compliance in all material respects with the applicable regulations. The Company believes that it is in compliance in all material respects with Federal, state and local environmental and safety regulations relating to the manufacture, sale and distribution of its products. The following are brief summaries of some of the Federal laws and regulations which may have an impact on the Company's business. These summaries are only illustrative of the extensive regulatory requirements of the Federal, state and local governments and are not intended to provide the specific details of each law or regulation. The Clean Air Act (CAA), as amended, and the regulations promulgated thereunder, regulates the emission of harmful pollutants to the air outside of the work environment. Federal or state regulatory agencies may require companies to acquire permits, perform monitoring and install control equipment for certain pollutants. The Clean Water Act (CWA), as amended, and the regulations promulgated thereunder, regulates the discharge of harmful pollutants into the waters of the United States. Federal or state regulatory agencies may require companies to acquire permits, perform monitoring and to treat waste water before discharge to the waters of the United States or a Publicly Owned Treatment Works (POTW). The Occupational Safety and Health Act of 1970 (OSHA), including the Hazard Communication Standard ("Right to Know"), and the regulations promulgated thereunder, requires the labeling of hazardous substance containers, the supplying of Material Safety Data Sheets ("MSDS") on hazardous products to customers and hazardous substances the employee may be exposed to in the workplace, the training of the employees in the handling of hazardous substances and the use of the MSDS, along with other health and safety programs. The Resource Conservation and Recovery Act of 1976 (RCRA), as amended, and the regulations promulgated thereunder, requires certain procedures regarding the treatment, storage and disposal of hazardous waste. The Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) and the Superfund Amendments and Reauthorization Act of 1986 (SARA), and the regulations promulgated thereunder, require notification of certain chemical spills and notification to state and local emergency response groups of the availability of MSDS and the quantities of hazardous materials in the Company's possession. The Toxic Substances Control Act of 1976 (TSCA), requires reporting, testing and pre-manufacture notification procedures for certain chemicals. Exemptions are provided from some of these requirements with respect to chemicals manufactured in small quantities solely for research and development use. The Department of Transportation (DOT) has promulgated regulations pursuant to the Hazardous Materials Transportation Act, referred to as the Hazardous Material Regulations (HMR), which set forth the requirements for hazard labeling, classification and packaging of chemicals, shipment modes and other goods destined for shipment in interstate commerce. Approximately 700 products, for which sales are immaterial to the total sales of the Company, are subject to control by either the Drug Enforcement Administration ("DEA") or the Nuclear Regulatory Commission ("NRC"). The DEA and NRC have issued licenses to several Company sites to permit importation, manufacture, research, analysis, distribution and export of certain products. The Company screens customer orders involving products regulated by the NRC and the DEA to verify that a license, if necessary, has been obtained. (b) Metal Products. Components for strut, cable tray and pipe support systems are manufactured by B-Line at its facilities in Highland and Troy, Illinois; Norcross, Georgia and Reno, Nevada. Components and complete systems used to support telecommunications apparatus and cabling are manufactured and sold by B-Line through its Saunders Communications unit, which is located in Santa Fe Springs, California. Circle AW Products Company, which was acquired on June 16, 1993 and operates as a wholly-owned subsidiary of B-Line, manufactures electrical enclosures at its facilities in Portland, Oregon and Modesto, California. Strut and pipe support systems are metal frameworks and related accessories used in industry to support pipes, lighting fixtures and conduit. Strut systems can be easily assembled with bolts and spring-loaded nuts, eliminating the necessity of drilling or welding associated with other types of frameworks. B-Line manufactures and sells a wide variety of components for these systems, including steel struts rolled from coils, stamped steel fittings for interconnecting struts, shelf-supporting brackets, pipe and conduit supporting clamps, and accessories for the installation of strut systems on location. Pipe hangers are generally used in conjunction with strut systems to support heavy and light duty piping runs in the mechanical, plumbing and refrigeration industry. The principal materials used by B-Line in manufacturing are coils of steel and extruded aluminum which B-Line purchases from a number of suppliers. No one supplier is essential to B-Line's production. A limited number of components for strut and pipe support systems, including bolts and nuts and certain forged and cast components, are purchased from numerous sources and sold by B-Line as accessories to its own manufactured products. Cable tray systems are continuous networks of ventilated or solid trays used primarily in the routing of power cables and control wiring in power plant or industrial installations. The systems are generally hung from ceilings or supported by strut frameworks. Cable tray is produced from either extruded aluminum or roll-formed steel in various configurations to offer versatility to designers and installers. Non-metallic strut and cable tray products, which are used primarily in corrosive environments, are also available. Telecommunications equipment racks and cable runways are manufactured from aluminum or steel. The systems are installed in the central offices of telephone operating companies. As switching equipment is changed and upgraded, the systems are replaced. Electrical enclosures are metal enclosure boxes, generally manufactured with steel, that are used to contain and protect electric meters, fuse and circuit breaker boards and electrical panels. These products are used in industrial, commercial and residential installations. B-Line also manufactures a line of lightweight support fasteners to be used in commercial and industrial facilities to attach electrical and acoustical fixtures. B-Line sells primarily to electrical, mechanical and telecommunications wholesalers. Products are marketed directly by district sales offices and by regional sales managers through independent manufacturers' representatives. Products are shipped to customers from the Highland and Troy, Illinois; Norcross, Georgia; Reno, Nevada; Portland, Oregon; and Modesto and Santa Fe Springs, California plants, from two regional warehouses and 42 consigned stock locations. B-Line's products are advertised in trade journals and by circulation of comprehensive catalogs. (c) Competition. Substantial competition exists in all the Company's marketing and production areas. Although no comprehensive statistics are available, the Company believes it is a major supplier of organic chemicals and biochemicals for research and for diagnostic testing procedures involving enzymes and of chromatography products for analyzing and separating complex chemical mixtures. A few competitors, like the Company, offer thousands of chemicals and stock and analyze most of their products. While the Company generally offers a larger number of products, some of the Company's products are unusual and have relatively little demand. In addition, there are many competitors who offer a limited quantity of chemicals, and several companies compete with the Company by offering thousands of chemicals although few of them stock or analyze substantially all of the chemicals they offer for sale. The Company believes its B-Line subsidiary to be among the three largest producers of metal strut framing, pipe hangers and cable tray component systems, although reliable industry statistics are not available. In all product areas the Company competes primarily on the basis of customer service, quality and price. (d) Employees. The Company employed 5,110 persons as of December 31, 1993. Of these, 4,198 were engaged in production and distribution of chemical products. The B-Line subsidiary employed 912 persons. The total number of persons employed within the United States was 3,792, with the balance employed by the foreign subsidiaries. The Company employed over 1,400 persons who have degrees in chemistry, biochemistry, engineering or other scientific disciplines, including approximately 235 with Ph.D. degrees. Employees engaged in chemical production, research and distribution are not represented by any organized labor group. B-Line's production workers at the Highland and Troy, Illinois facilities are members of the International Association of Machinists and Aerospace Workers, District No. 9 (AFL-CIO). The labor agreement covering these employees expires November 12, 1995. B-Line's production workers at the Norcross, Georgia facility are members of the United Food and Commercial Workers International (AFL-CIO), Retail Clerks Union Local 1063. The labor agreement covering these employees expires June 11, 1994. (e) Back-log of Orders. The majority of orders for chemical products in laboratory quantities are shipped from inventory, resulting in no back-log of these orders. However, individual items may occasionally be out of stock. These items are shipped as soon as they become available. Some orders for larger-than-normal laboratory quantities are for future delivery. On December 31, 1993 and 1992, the back-log of firm orders and orders for future delivery of chemical products was approximately $9,100,000 and $6,800,000, respectively. The Company estimates that substantially all of the December 31, 1993, back-log will be shipped during 1994. On December 31, 1993 and 1992, B-Line had a back-log of orders amounting to $2,400,000 and $2,200,000, respectively. B-Line estimates that substantially all of the December 31, 1993, back-log will be shipped during 1994. (f) Information as to Industry Segments. Information concerning industry segments for the years ended December 31, 1993, 1992 and 1991, is located in Note 9 to the consolidated financial statements on page 21 of the 1993 Annual Report which is incorporated herein by reference. (g) Executive Officers of the Registrant Information regarding executive officers is contained in Part III, Item 10, and incorporated herein by reference. Item 2. Properties. The Company's primary chemical production facilities are located in St. Louis, Missouri; Milwaukee and Sheboygan, Wisconsin; Bellefonte, Pennsylvania and Buchs, Switzerland. In St. Louis, the Company owns a 320,000 square foot building used for manufacturing, a complex of buildings aggregating 349,000 square feet which is currently being used for warehousing and production, a 75,000 square foot building used for warehousing and a 30,000 square foot building used for production, quality control and packaging. A 280,000 square foot building in St. Louis is being partially utilized to provide additional quality control, packaging and warehousing capacity. Also in St. Louis, the Company owns 30 acres upon which is located a 240,000 square foot administration and distribution facility, in which its principal executive offices are located, and a 175,000 square foot diagnostic production and office building. In Milwaukee, the Company owns a 165,000 square foot building which is used for manufacturing, warehousing and offices, a 110,000 square foot building which is used for additional manufacturing and warehousing and a complex of buildings aggregating 331,000 square feet which is used primarily for warehousing and distribution. Also in Milwaukee, the Company owns a 151,000 square foot building which is used for manufacturing and warehousing, a 56,000 square foot administration facility and a 615,000 square foot building which is being renovated for use as a distribution facility. The Company also owns 515 acres in Sheboygan, Wisconsin, upon which are located multiple buildings totaling 160,000 square feet for production and packaging. Fluka owns an 11 acre site in Buchs, Switzerland, upon which are located its primary production facilities. Approximately 220,000 square feet of owned production, warehousing and office facilities are at this site. In Greenville, Illinois, the Company owns 555 acres of land for future development of biochemical production facilities. Supelco owns 72 acres near Bellefonte, Pennsylvania, upon which is located a 160,000 square foot building used for manufacturing, warehousing, research and administration. The Company's B-Line manufacturing business is conducted in Highland and Troy, Illinois; Norcross, Georgia; Reno, Nevada; Portland, Oregon; and Modesto and Santa Fe Springs, California. B-Line owns a 270,000 square foot building in Highland, a 55,000 square foot building in Troy, Illinois, a 68,000 square foot building in Portland, Oregon, a 173,000 square foot building in Reno, Nevada, and a 125,000 square foot building in Modesto, California. B-Line leases a 101,000 square foot facility in Norcross, Georgia, and an 18,000 square foot building in Santa Fe Springs, California. The Company also owns warehouse and distribution facilities containing approximately 35,000 and 8,000 square feet in Metuchen, New Jersey and Ronkonkoma, New York, respectively, and leases warehouses in Chicago, Illinois and Dallas, Texas under short-term leases. Manufacturing and warehousing facilities are also owned or leased in England, Germany, Israel, Japan, Scotland and Switzerland. Sales offices are leased in all other locations. The Company considers the properties to be well maintained, in sound condition and repair, and adequate for its present needs. The Company will continue to expand its production and distribution capabilities in select markets. Item 3. Legal Proceedings. There are no material pending legal proceedings. Item 4. Submission of Matters to a Vote of Security Holders. No matters were submitted by the Registrant to the stockholders for a vote during the fourth quarter of 1993. PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters. Information concerning market price of the Registrant's Common Stock and related shareholder matters for the years ended December 31, 1993 and 1992, is located on page 11 of the 1993 Annual Report which is incorporated herein by reference. As of March 4, 1994, there were 2,356 record holders of the Registrant's Common Stock. Items 6 through 8. Selected Financial Data, Management's Discussion and Analysis of Financial Condition and Results of Operations, and Financial Statements. The information required by Items 6 through 8 is incorporated herein by reference to pages 11 - 24 of the 1993 Annual Report. See Index to Financial Statements and Schedules on page F-1 of this report. Those pages of the Company's 1993 Annual Report listed in such Index or referred to in Items 1(a)(4), 1(f) and 5 are incorporated herein by reference. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. Not applicable. PART III Item 10. Directors and Executive Officers of the Registrant. Information under the captions "Nominees for Board of Directors" and "Security Ownership of Directors, Executive Officers and Principal Beneficial Owners" of the 1994 Proxy Statement is incorporated herein by reference. The executive officers of the Registrant are: Name of Executive Officer Age Positions and Offices Held ------------------------- --- -------------------------- Carl T. Cori 57 Chairman of the Board, President and Chief Executive Officer Peter A. Gleich 48 Vice President and Secretary David R. Harvey 54 Executive Vice President and Chief Operating Officer Kirk A. Richter 47 Controller Thomas M. Tallarico 49 Vice President and Treasurer There is no family relationship between any of the officers. Dr. Harvey and Mr. Richter have held the positions indicated for more than five years. Dr. Cori has been President and Chief Executive Officer of the Company for more than five years. He was elected Chairman of the Board in May 1991. Mr. Gleich has been Vice President and Secretary of the Company for more than five years. He also served as Treasurer of the Company from 1975 to May 1991. Mr. Tallarico has served as Vice President of the Company since February 1991 and as Treasurer of the Company since May 1991. He served as publisher of the St. Louis Sun Publishing Company, St. Louis, Missouri, from March 1989 to July 1990. He served as Senior Vice President and General Manager of Pulitzer Publishing Co., St. Louis Post-Dispatch, St. Louis, Missouri, from 1986 to March 1989. The present terms of office of the officers will expire when the next annual meeting of the Directors is held and their successors are elected. Item 11. Executive Compensation. Information under the captions "Director Compensation and Transactions" and "Information Concerning Executive Compensation" of the 1994 Proxy Statement is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management. Information under the caption "Security Ownership of Directors, Executive Officers and Principal Beneficial Owners" of the 1994 Proxy Statement is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions. Information under the caption "Director Compensation and Transactions" of the 1994 Proxy Statement is incorporated herein by reference. PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K. (a) Documents filed as part of this report: 1. Financial Statements. See Index to Financial Statements on page F-1 of this report. Those pages of the Company's 1993 Annual Report listed in such Index or referred to in Items 1(a)(4), 1(f) and 5 are incorporated herein by reference. 2. Financial Statement Schedules. See Index to Financial Statement Schedules on page F-1 of this report. 3. Exhibits. See Index to Exhibits on page F-5 of this report. (b) Reports on Form 8-K: No reports on Form 8-K have been filed during the last quarter of the period covered by this report. SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SIGMA-ALDRICH CORPORATION (Registrant) By /s/ Thomas M. Tallarico March 30, 1994 -------------------------------------- -------------- Thomas M. Tallarico, Vice President and Date Treasurer KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Carl T. Cori, Peter A. Gleich, David R. Harvey, Kirk A. Richter and Thomas M. Tallarico and each of them (with full power to each of them to act alone), his true and lawful attorneys-in- fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments (including post-effective amendments) to this report, and to file the same, with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. By /s/ Carl T. Cori March 30, 1994 -------------------------------------- -------------- Carl T. Cori, Director, Chairman of the Date Board, President and Chief Executive Officer By /s/ David R. Harvey March 30, 1994 ----------------------------------------- -------------- David R. Harvey, Director, Executive Vice Date President and Chief Operating Officer By /s/ Peter A. Gleich March 30, 1994 -------------------------------------- -------------- Peter A. Gleich, Vice President and Date Secretary By /s/ Kirk A. Richter March 30, 1994 -------------------------------------- -------------- Kirk A. Richter, Controller Date By /s/ Thomas M. Tallarico March 30, 1994 --------------------------------------- -------------- Thomas M. Tallarico, Vice President and Date Treasurer By /s/ David M. Kipnis March 30, 1994 -------------------------------------- -------------- David M. Kipnis, Director Date By /s/ Andrew E. Newman March 30, 1994 --------------------------------------- -------------- Andrew E. Newman, Director Date By /s/ Jerome W. Sandweiss March 30, 1994 --------------------------------------- -------------- Jerome W. Sandweiss, Director Date SIGMA-ALDRICH CORPORATION AND SUBSIDIARIES INDEX TO FINANCIAL STATEMENTS AND SCHEDULES Page Number Reference Annual Report Form 10-K to Shareholders Comparative financial data for the years 1993, 1992, 1991, 1990, and 1989 11 Management's discussion of financial condition and results of operations 12 FINANCIAL STATEMENTS: Consolidated Balance Sheets December 31, 1993 and 1992 15 Consolidated statements for the years ended December 31, 1993, 1992 and 1991 Income 14 Stockholders' Equity 16 Cash Flows 17 Notes to consolidated financial statements 18 Reports of independent public accountants EX-23 FINANCIAL STATEMENT SCHEDULES: V Property, plant and equipment for the years ended December 31, 1993, 1992 and 1991 F-3 VI Accumulated depreciation of property, plant and equipment for the years ended December 31, 1993, 1992 and 1991 F-3 IX Short-term borrowings for the years ended December 31, 1993, 1992 and 1991 F-4 X Supplementary income statement information for the years ended December 31, 1993, 1992 and 1991 F-4 All other schedules are not submitted because they are not applicable, not required or because the information is included in the consolidated financial statements or notes thereto. SCHEDULE V
SIGMA-ALDRICH CORPORATION AND SUBSIDIARIES PROPERTY, PLANT AND EQUIPMENT FOR THE YEARS ENDED DECEMBER 31, (in thousands) Balance at Balance Beginning Additions Retirements Translation at End of Period at Cost Acquisitions & Sales Adjustments of Period ----------------------------------------------------------------------------- 1993: Land $ 18,922 $ 4,523 $ 1,688 $ - $ (475) $ 24,658 Buildings and improvements 128,179 24,239 15,203 (64) (1,238) 166,319 Machinery and equipment 175,783 21,392 9,748 (2,206) (1,590) 203,127 Construction in progress 6,518 25,028 28 - (142) 31,432 -------- ------- ------- -------- -------- -------- $329,402 $75,182 $26,667 $(2,270) $(3,445) $425,536 ======== ======= ======= ======== ======== ======== 1992: Land $ 18,119 $ 1,866 $ - $ - $(1,063) $ 18,922 Buildings and improvements 121,872 9,328 - (227) (2,794) 128,179 Machinery and equipment 167,223 17,333 - (5,763) (3,010) 175,783 Construction in progress 4,365 2,359 - - (206) 6,518 -------- ------- ------ -------- -------- -------- $311,579 $30,886 $ - $(5,990) $(7,073) $329,402 ======== ======= ====== ======== ======== ======== 1991: Land $ 15,768 $ 2,771 $ - $ - $ (420) $ 18,119 Buildings and improvements 110,877 12,771 - (15) (1,761) 121,872 Machinery and equipment 160,279 9,797 - (1,385) (1,468) 167,223 Construction in progress 3,801 720 - - (156) 4,365 -------- ------- ------ -------- -------- -------- $290,725 $26,059 $ - $(1,400) $(3,805) $311,579 ======== ======= ====== ======== ======== ========
SIGMA-ALDRICH CORPORATION AND SUBSIDIARIES ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT FOR THE YEARS ENDED DECEMBER 31, (in thousands) Balance at Retire- Balance Beginning ments Translation at End of Period Additions & Sales Adjustments of Period ------------------------------------------------------------------ 1993: Buildings and improvements $ 38,009 $ 7,615 $ (28) $ (293) $ 45,303 Machinery and equipment 103,090 22,064 (1,751) (492) 122,911 -------- ------- -------- --------- -------- $141,099 $29,679 $(1,779) $ (785) $168,214 ======== ======= ======== ========= ======== 1992: Buildings and improvements $ 33,174 $ 5,794 $ (146) $ (813) $ 38,009 Machinery and equipment 86,714 21,583 (3,509) (1,698) 103,090 -------- ------- -------- --------- -------- $119,888 $27,377 $(3,655) $ (2,511) $141,099 ======== ======= ======== ========= ======== 1991: Buildings and improvements $ 28,312 $ 5,995 $ (1) $ (1,132) $ 33,174 Machinery and equipment 70,041 19,776 (1,192) (1,911) 86,714 -------- ------- -------- --------- -------- $ 98,353 $25,771 $(1,193) $ (3,043) $119,888 ======== ======= ======== ========= ========
SCHEDULE IX SIGMA-ALDRICH CORPORATION AND SUBSIDIARIES SHORT-TERM BORROWINGS FOR THE YEARS ENDED DECEMBER 31, (in thousands) Maximum Average Weighted Category of Weighted Amount Amount Average Aggregate Balance Average Outstanding Outstanding Interest Rate Short-Term at End of Interest During the During the During the Borrowings Period Rate Period Period Period (1) - --------------------------------------------------------------------------------- 1993 - ---------- Borrowings from Banks: Domestic $34,451 4.4% $38,050 $18,991 3.9% Foreign 2,296 5.5 6,051 3,484 6.0 1992 - ---------- Borrowings from Banks: Domestic 875 2.6 1,250 1,019 2.8 Foreign 5,471 8.7 12,915 10,550 9.3 1991 - ---------- Borrowings from Banks: Domestic 1,250 4.6 27,100 11,669 6.8 Foreign 12,351 9.9 14,502 11,491 9.3 (1) Computation based on average monthly outstanding borrowings.
SCHEDULE X SIGMA-ALDRICH CORPORATION AND SUBSIDIARIES SUPPLEMENTARY INCOME STATEMENT INFORMATION FOR THE YEARS ENDED DECEMBER 31, (in thousands) Charged to Costs and Expenses 1993 1992 1991 ------- ------- ------- Maintenance and repairs $10,575 $ 8,857 $ 8,902 Depreciation and amortization 32,505 28,863 26,826 Advertising 28,674 25,274 24,466 Royalties and taxes, other than payroll and income taxes, incurred during 1993, 1992 and 1991 were less than 1% of sales. INDEX TO EXHIBITS These Exhibits are numbered in accordance with the Exhibit Table of Item 6.01 of Regulation S-K: Exhibit Reference (3) Certificate of Incorporation and By-Laws: (a) Certificate of Incorporation and Amendments Incorporated by reference to Exhibit 3(a) of Form 10-K filed for the year ended December 31, 1991, Commission File Number 0-8135. (b) By-Laws as amended February 1993 Incorporated by reference to Exhibit 3(b) of Form 10-K filed for the year ended December 31, 1992, Commission File Number 0-8135. (4) Instruments Defining the Rights of Shareholders, Including Indentures: (a) Certificate of Incorporation and Amendments See Exhibit 3(a) above. (b) By-Laws as amended February 1993 See Exhibit 3(b) above. (c) The Company agrees to furnish to the Securities and Exchange Commission upon request pursuant to Item 601(b)(4)(iii) of Regulation S-K copies of instruments defining the rights of holders of long-term debt of the Company and its consolidated subsidiaries. (10) Material Contracts: (a) Incentive Stock Bonus Plan* Incorporated by reference to Exhibit 10(a) of Form 10-K filed for the year ended December 31, 1992, Commission File Number 0-8135. (b) First Amendment to Incentive Incorporated by reference to Exhibit Stock Bonus Plan* 10(b) of Form 10-K filed for the year ended December 31, 1992, Commission File Number 0-8135. (c) Second Amendment to Incentive Incorporated by refence to Exhibit Stock Bonus Plan* 10(c) of Form 10-K filed for the year ended December 31, 1992, Commission File Number 0-8135. (d) Share Option Plan of 1987* Incorporated by reference to Exhibit 10(d) of Form 10-K filed for the year ended December 31, 1992, Commission File Number 0-8135. (e) First Amendment to Share Option Incorporated by refence to Exhibit Plan of 1987* 10(e) of Form 10-K filed for the year ended December 31, 1992, Commission File Number 0-8135. (f) Employment Agreement with Carl T. Incorporated by reference to Exhibit Cori* (Similar Employment Agreements 10(f) of Form 10-K filed for the also exist with Peter A. Gleich, year ended December 31, 1992, David R. Harvey, Kirk A. Richter Commission File Number 0-8135. and Thomas M. Tallarico) (g) Letter re: Consultation Services Incorporated by reference to Exhibit with Dr. David M. Kipnis* 10(g) of Form 10-K field for the year ended December 31, 1992, Commission File Number 0-8135. (11) Statement Regarding Computation Incorporated by reference to the of Per Share Earnings information on net income per share included in Note 1 to the Company's 1993 financial statements filed as Exhibit 13 below. (13) Pages 11-24 of the Annual Report to Shareholders for the year ended December 31, 1993 (21) Subsidiaries of Registrant (23) Consent of Independent Public Accountants *Represents management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 14(c) of Form 10-K.
EX-13 2 PAGES 11-24 OF THE 1993 ANNUAL REPORT (Page 11 of 1993 annual report to shareholders) SELECTED FINANCIAL DATA ----------------------- (unaudited) COMMON STOCK DATA: (per share) PRICE RANGE 1993 1992 DIVIDENDS ---------------- ----------------- ----------------- HIGH LOW HIGH LOW 1993 1992 ------- ------- -------- ------- ------ ------ 1st Quarter $58 $46-1/4 $52-1/2 $41-3/4 $.0725 $.0625 2nd Quarter 51-1/2 45 50-1/4 42 .0725 .0625 3rd Quarter 50-3/4 44-1/2 51-1/4 47-1/4 .0725 .0625 4th Quarter 50 45-1/2 59-1/4 49 .0825 .0725 The common stock is traded on the National Market System ("NMS") of the National Association of Securities Dealers Automated Quotation System ("NASDAQ"). The trading symbol is SIAL. Options in the Company's common stock are traded on the Chicago Board Options Exchange. COMPARATIVE FINANCIAL DATA: (in millions except per share data) 1993 1992 1991 1990 1989 ------ ------ ------ ------ ------ Net sales $739.4 $654.4 $589.4 $529.1 $441.1 Income before cumulative effect of accounting changes 107.1 95.5 79.8 71.2 64.0 Net income 96.3 95.5 79.8 71.2 64.0 Per share: Income before cumulative effect of accounting changes 2.15 1.92 1.60 1.44 1.29 Net income 1.93 1.92 1.60 1.44 1.29 Dividends .3000 .2600 .2275 .2050 .1850 Total assets 753.4 615.8 596.5 546.2 472.4 Long-term debt 17.3 18.7 69.3 70.8 61.5
QUARTERLY FINANCIAL DATA: (in millions except per share data) 1993 QUARTER ENDED March 31 June 30 Sept 30 Dec 31 -------- ------- ------- ------- Net sales $180.0 $183.8 $190.8 $184.8 Gross profit 98.4 100.3 101.4 102.7 Income before cumulative effect of accounting changes 26.9 26.9 26.7 26.6 Net income 16.1 26.9 26.7 26.6 Income per share before cumulative effect of accounting changes .54 .54 .54 .53 Net income per share .32 .54 .54 .53 1992 QUARTER ENDED March 31 June 30 Sept 30 Dec 31 -------- ------- ------- ------- Net sales $168.6 $162.2 $165.9 $157.7 Gross profit 89.7 89.3 90.1 86.7 Net income 23.9 24.1 24.9 22.6 Net income per share .48 .48 .50 .46 (Page 12-13 of 1993 Annual Report to Shareholders) MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ----------------------------------- RESULTS OF OPERATIONS During the three years ended December 31, 1993, the Company's sales and earnings continued to grow. The Company acquired the net assets and business of Supelco, Inc. ("Supelco") and the stock of Circle AW Products Company ("Circle AW") in the second quarter of 1993 as described in Note 11 to the consolidated financial statements. The operating results for these businesses are included in the consolidated statement of income from their respective acquisition dates. Chemical sales increased 10.8%, 11.1% and 13.2% for 1993, 1992 and 1991, respectively. This sales growth is attributed to selective price increases, the annual addition of new products, wider distribution of catalogs and literature and the opening of new foreign sales offices. Price increases for products listed in the Company's general chemical catalogs averaged 5.0% per year in each of the last three years. New product sales are not material in the year introduced, but do contribute to annual sales growth in subsequent years. Export sales from the United States increased 13.5% after remaining even in 1992, with 1993 levels reflecting the benefits of the Supelco acquisition and the opening of sales offices in additional foreign countries to serve as liaisons with United States operations. Increased emphasis on foreign markets and new sales offices helped achieve growth in foreign direct sales of approximately 17% in 1993 and 15% in 1992 and 1991, after eliminating the effect of changes in foreign currency exchange rates. The effect of translating foreign currency sales into the U.S. dollar reduced sales growth by 3.8% in 1993 while increasing growth by 0.7% in 1992. Sales for 1993 benefited from the acquisition of Supelco in May. After consideration of the Supelco acquisition and the impact of currency translation, the chemical sales growth rate has slowed in 1993 and 1992 due to weaker economic conditions in several markets. Metal sales increased 24.8%, 10.9% and 2.5% for 1993, 1992 and 1991, respectively. The higher growth rate in 1993 was due to both increased volume from stronger construction demand and the acquisition of Circle AW in June 1993. Average prices increased 2% in 1993 over 1992 while 1992 prices were unchanged from 1991. The 10.9% sales increase in 1992 reflects volume increases and a full year of sales from the telecommunications product line acquired in September 1991. Cost of products sold was 45.5%, 45.6% and 47.2% of sales in 1993, 1992 and 1991, respectively. The improved rate in both 1993 and 1992 relative to 1991 was due to increased utilization of newer facilities and productivity gains in manufacturing for both chemical and metal products. These improvements raised chemical gross profit margins by 0.4% and 1.4% in 1993 and 1992, respectively. For metal products, 1993 sales price increases offset higher raw material costs, resulting in the gross margin level being unchanged from 1992, while in 1992, the gross profit margin improved by 1.8% due to lower raw material costs. The gross profit margin in 1993 also reflects higher product cost levels for the acquisitions. Selling, general and administrative expenses were 32.1%, 31.9% and 31.8% of sales in 1993, 1992 and 1991, respectively. In both 1993 and 1992, the Company's expanding foreign operations increased expenses by approximately $11.0 million, some of which were of a start-up nature. Fringe benefit costs increased in 1993 and 1992, primarily due to increased postretirement benefit costs of $2.2 million in 1993 and a one-time expense of $1.2 million in 1992 related to employee enrollment in a new 401(k) plan. The Company increased its catalog and promotional expenses by $2.7 million in 1993. Depreciation and amortization expense increased $3.6 million, primarily due to the Supelco and Circle AW acquisitions. Offsetting these increases, net interest expense declined by $2.1 million due to reduced borrowing levels during most of the year and lower interest rates. Management expects future sales growth from price increases, the continued introduction of new products, more effective distribution of catalogs and added promotional and marketing programs. Additionally, 1994 sales will benefit from the inclusion of Supelco and Circle AW results for a full year and from new offices opened in Hungary, South Korea and Mexico. LIQUIDITY AND CAPITAL RESOURCES Cash and temporary cash investments decreased $34.7 million in 1993 and short-term borrowings increased $30.6 million, primarily due to the acquisitions of Supelco and Circle AW, as described in Note 11 to the consolidated financial statements, and increased capital expenditures. During 1992, cash and temporary cash investments increased $16.8 million and total borrowings were reduced by $55.6 million. Cash provided by operating activities was $98.7 million in 1993, a decrease of $15.7 million from 1992. The decline resulted mainly from increased inventory levels of $28.6 million partially offset by a $17.1 million increase in income before cumulative effect of accounting changes, including a $5.4 million increase in depreciation, amortization and other noncash expenses. Cash generated by operations and available from credit facilities continues to provide sufficient liquidity for present and future operating and capital needs. Cash in excess of operating and capital needs in 1994 is expected to be used to repay existing borrowings or to be invested on a temporary basis. At December 31, 1993, there was $36.7 million of borrowings outstanding under the Company's credit arrangements, which include domestic bank facilities of $70 million and multi-currency facilities of $30 million. Capital expenditures increased to $75.2 million in 1993. Expenditures were made to increase production and distribution capabilities and improve plant efficiencies, including expansion of large-scale production capacity in the United States and Switzerland and the acquisition of a manufacturing plant in Scotland. Capital expenditure levels are expected to be comparable in 1994. The Company has not made any significant commitments for or acquisitions of facilities early in 1994. ACCOUNTING CHANGES The Company adopted two new Financial Accounting Standards effective January 1, 1993, and elected to recognize the prior years' effect of adoption as the cumulative effect of changes in accounting principles. As described in Note 10 to the consolidated financial statements, the cumulative effect of adopting the standard on accounting for postretirement benefits other than pensions reduced net income by $13.8 million. The cumulative effect of adopting the new accounting standard for income taxes increased net income by $3.0 million, as described in Note 7 to the consolidated financial statements. The net impact of the adoption of both standards was to reduce 1993 net income by $10.8 million. These changes have no effect on current or future cash flows. (Five bar graphs appear on pages 12-13 depicting the following data) 1993 1992 1991 ------ ------ ------ Chemical sales (millions of dollars) $613.1 $553.1 $498.1 Metal sales (millions of dollars) 126.3 101.3 91.3 Cost of sales (percent of sales) 45.5% 45.6% 47.2% Operating expenses (percent of sales) 32.1% 31.9% 31.8% Capital expenditures (millions of dollars) 75.2 30.9 26.1 (Page 14 of 1993 Annual Report to Shareholders) CONSOLIDATED STATEMENTS OF INCOME --------------------------------- (in thousands except per share data) Years Ended December 31, 1993 1992 1991 -------- -------- -------- Net sales $739,435 $654,406 $589,371 Cost of products sold 336,639 298,648 277,970 ------- ------- ------- Gross profit 402,796 355,758 311,401 Selling, general and administrative expenses 237,179 208,446 187,523 ------- ------- ------- Income before income taxes and cumulative effect of accounting changes 165,617 147,312 123,878 Provision for income taxes 58,463 51,854 44,085 ------- ------- ------- Income before cumulative effect of accounting changes 107,154 95,458 79,793 Cumulative effect of accounting changes (10,806) -- -- ------- ------- ------- Net income $96,348 $95,458 $79,793 ======= ======= ======= Weighted average number of shares outstanding 49,802 49,770 49,716 ======= ======= ======= Income per share before cumulative effect of accounting changes $2.15 $1.92 $1.60 Cumulative effect of accounting changes (0.22) -- -- -------- ------- ------- Net income per share $1.93 $1.92 $1.60 ======== ======= ======= The accompanying notes are an integral part of these statements. REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ---------------------------------------- To Sigma-Aldrich Corporation: We have audited the accompanying consolidated balance sheets of Sigma-Aldrich Corporation (a Delaware Corporation) and subsidiaries (the "Company") as of December 31, 1993 and 1992, and the related consolidated statements of income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 1993. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Sigma-Aldrich Corporation and subsidiaries as of December 31, 1993 and 1992, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1993, in conformity with generally accepted accounting principles. As discussed in Notes 7 and 10 to the consolidated financial statements, effective January 1, 1993, the Company changed its method of accounting for income taxes and postretirement benefits other than pensions. /s/ ARTHUR ANDERSEN & CO. ARTHUR ANDERSEN & CO. St. Louis, Missouri February 11, 1994 (Page 15 of 1993 Annual Report to Shareholders) CONSOLIDATED BALANCE SHEETS --------------------------- (in thousands) December 31, ASSETS 1993 1992 Current assets: -------- -------- Cash $ 989 $ 7,590 Temporary cash investments 9,263 37,342 Accounts receivable, less allowance for doubtful accounts of $6,684 and $5,208, respectively 113,439 91,927 Inventories 305,487 260,145 Other current assets 21,629 18,772 ------- ------- Total current assets 450,807 415,776 Property, plant and equipment: ------- ------- Land 24,658 18,922 Buildings and improvements 166,319 128,179 Machinery and equipment 203,127 175,783 Construction in progress 31,432 6,518 Less - Accumulated depreciation (168,214) (141,099) -------- -------- Net property, plant and equipment 257,322 188,303 -------- -------- Other assets 45,302 11,711 -------- -------- $753,431 $615,790 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable $ 36,747 $ 6,346 Current maturities of long-term debt 955 598 Accounts payable 43,967 32,459 Accrued payroll and other expenses 25,479 22,665 Accrued income taxes 4,209 4,091 ------ ------ Total current liabilities 111,357 66,159 ------- ------ Long-term debt 17,266 18,737 ------- ------ Deferred postretirement benefits 24,559 -- ------- ------ Deferred compensation 9,109 6,675 ------- ------ Deferred income taxes -- 12,442 ------- ------ Stockholders' equity: Common stock 49,805 49,776 Capital in excess of par value 8,883 7,488 Retained earnings 538,111 456,704 Cumulative translation adjustments (5,659) (2,191) ------- ------- Total stockholders' equity 591,140 511,777 ------- ------- $753,431 $615,790 ======= ======= The accompanying notes are an integral part of these balance sheets. (Page 16 of 1993 Annual Report to Shareholders)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY ---------------------------------------------- (in thousands except per share data) Common Stock 100,000 Shares Authorized ($1.00 Par) Capital in Cumulative --------------------- Excess of Retained Translation Shares Amount Par Value Earnings Adjustments ------ ------- --------- -------- ----------- Balance, December 31, 1990 49,658 $49,658 $5,477 $305,705 $ 7,628 Net income -- -- -- 79,793 -- Dividends ($.2275 per share) -- -- -- (11,311) -- Awards under deferred compensation plan 29 29 432 -- -- Exercise of stock options 59 59 937 -- -- Translation adjustment -- -- -- -- 2,546 ------ ------ ----- ------- ------ Balance, December 31, 1991 49,746 49,746 6,846 374,187 10,174 Net income -- -- -- 95,458 -- Dividends ($.26 per share) -- -- -- (12,941) -- Awards under deferred compensation plan 20 20 455 -- -- Exercise of stock options 10 10 187 -- -- Translation adjustment -- -- -- -- (12,365) ------ ------ ----- ------- ------- Balance, December 31, 1992 49,776 49,776 7,488 456,704 (2,191) Net income -- -- -- 96,348 -- Dividends ($.30 per share) -- -- -- (14,941) -- Awards under deferred compensation plan 21 21 1,175 -- -- Exercise of stock options 8 8 220 -- -- Translation adjustment -- -- -- -- (3,468) ------ -------- ------ -------- -------- Balance, December 31, 1993 49,805 $49,805 $8,883 $538,111 $ (5,659) ====== ======== ====== ======== ========= The accompanying notes are an integral part of this statement.
(Page 17 of 1993 Annual Report to Shareholders)
CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Years Ended December 31, 1993 1992 1991 ------ ------ ------ Cash flows from operating activities: Net income $ 96,348 $ 95,458 $ 79,793 Adjustments to reconcile net income to net cash provided by operating activities: Cumulative effect of accounting changes 10,806 -- -- Depreciation and amortization 32,505 28,863 26,826 Deferred tax provision (252) 1,848 715 Postretirement benefits expense 2,789 -- -- Deferred compensation expense 3,244 2,150 1,335 Deferred compensation payments (810) (465) (888) Increase in accounts receivable (12,604) (12,605) (5,877) Increase in inventories (34,144) (5,588) (25,616) (Increase) decrease in other current assets (2,537) (1,331) 4,110 Increase (decrease) in accounts payable 9,949 6,069 (5,323) Increase (decrease) in accrued payroll and other expenses (3,900) 4,383 95 Increase (decrease) in accrued income taxes (2,663) (4,377) 499 -------- -------- ------- Net cash provided by operating activities 98,731 114,405 75,669 -------- -------- ------- Cash flows from investing activities: Property, plant and equipment additions (75,182) (30,886) (26,059) Sale of equipment 588 873 207 Acquisition of businesses, net of cash acquired (64,015) -- -- Other, net (410) 348 (2,931) --------- -------- -------- Net cash used in investing activities (139,019) (29,665) (28,783) --------- -------- --------- Cash flows from financing activities: Issuance (repayment) of notes payable 30,649 (6,588) (16,601) Issuance of long-term debt 1,154 1,946 1,990 Repayment of long-term debt (10,087) (49,049) (893) Payment of dividends (14,941) (12,941) (11,311) Exercise of employee stock options 228 197 996 Net cash provided by (used in) -------- -------- -------- financing activities 7,003 (66,435) (25,819) -------- -------- -------- Effect of exchange rate changes on cash (1,395) (1,492) 474 -------- -------- -------- Net change in cash and cash equivalents (34,680) 16,813 21,541 Cash and cash equivalents at beginning of year 44,932 28,119 6,578 -------- -------- -------- Cash and cash equivalents at end of year $ 10,252 $ 44,932 $ 28,119 ======== ======== ======== Supplemental disclosures of cash flow information: Income taxes paid $61,187 $54,385 $42,852 Interest paid, net of capitalized interest 2,320 5,269 8,285 The accompanying notes are an integral part of these statements
(Pages 18-24 of 1993 Annual Report to Shareholders) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation: The consolidated financial statements include the accounts of the Company and all majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. Accounting Changes: The Company adopted Financial Accounting Standards Nos. 106 and 109 effective January 1, 1993, and elected to recognize the prior years' effect as the cumulative effect of changes in accounting principles. See Note 7 - Income Taxes and Note 10 - Pension and Other Postretirement Benefit Plans for further information regarding these accounting changes. Financial Instruments: The Company considers its temporary cash investments, which have original maturities of three months or less, to be cash equivalents for purposes of the consolidated statements of cash flows. The Company has no financial instruments that have material off-balance sheet risk or a materially different fair value than the respective instrument's carrying value. Property, Plant and Equipment: The cost of property, plant and equipment is depreciated over the estimated useful lives of the assets on the straight-line method using lives ranging from three to twelve years for machinery and equipment and fifteen to forty years for buildings and improvements. The Company capitalizes interest as part of the cost of constructing major facilities and equipment. Net Income Per Share: Net income per share is based on the weighted average number of shares outstanding during each period. Foreign Currency Translation: Foreign currency assets and liabilities are translated at current exchange rates and profit and loss accounts at weighted average exchange rates. Resulting translation gains and losses are included as a separate component in stockholders' equity. NOTE 2 - INVENTORIES The principal categories of inventories are (in thousands): December 31, ---------------------- 1993 1992 -------- -------- Finished goods $233,833 $201,542 Work in process 19,457 14,909 Raw materials 52,197 43,694 -------- -------- Total $305,487 $260,145 ======== ======== Chemical products are valued at the lower of cost or market. Costs for certain domestic chemical inventories (20% of total chemical inventories) are determined using the last-in, first-out method. Costs for other chemical inventories are determined by specific lot using purchase price and cost to manufacture, which includes material, labor and overhead. If the cost of all chemical inventories had been determined using the specific cost method, inventories would have been $7,327,000, $7,472,000, $4,514,000 and $3,229,000 higher than reported at December 31, 1993, 1992, 1991 and 1990, respectively. Metal inventories are valued at the lower of cost or market, cost being determined using the first-in, first-out method, which includes material, labor and overhead. NOTE 3 - NOTES PAYABLE The Company has three unsecured domestic bank revolving credit facilities totaling $70,000,000. A $40,000,000 facility expires April 30, 1994, with two other facilities of $15,000,000 each expiring in April 1994, or earlier upon notice by either party. The Company also has two $15,000,000 unsecured multi-currency bank commitments. One facility expires in June 1995 and the other in June 1996. Interest rates for all facilities are based on federal funds, LIBOR, prime or other rates offered by the lending banks. Borrowings outstanding under the domestic arrangements amounted to $24,850,000 at December 31, 1993, with an average interest rate of 3.4%. Borrowings under the multi-currency commitments amounted to $9,601,000 at an average interest rate of 6.8%. There were no borrowings outstanding at December 31, 1992. The Company intends to renew all of these facilities as they expire. At December 31, 1992, the Company had an unsecured $875,000 note outstanding at an interest rate of 2.55% which was repaid in May 1993. Notes payable by foreign subsidiaries amounted to $2,296,000 and $5,471,000 at December 31, 1993 and 1992, respectively, and are payable in local currencies with weighted average interest rates of 5.5% and 8.7% at December 31, 1993 and 1992, respectively. NOTE 4 - LONG-TERM DEBT Long-term debt consists of the following (in thousands): December 31, ---------------------- 1993 1992 ------- ------- 6.0% Industrial Revenue Bonds due April 1, 2010....... $ 5,775 $ 5,775 5.875% Industrial Revenue Bonds due July 1, 2004....... 3,550 3,550 7.0% Industrial Revenue Bonds due Nov. 1, 2014....... 2,700 2,700 Unsecured Swiss debt............. 2,294 3,278 Other.................. 3,902 4,032 ------- ------- . 18,221 19,335 Less-Current maturities............. (955) (598) ------- ------- $17,266 $18,737 ======= ======= Both the 6.0% and 5.875% Industrial Revenue Bonds are subject to optional redemption by the Company or bondholder in 1997, at which time the interest rate will be adjusted and the next interest rate calculation period will be determined. At the conclusion of each subsequent calculation period, the bonds will again be subject to optional redemption by the Company or bondholder, the interest rate will be adjusted and the next calculation period will be determined. Any such bonds that are redeemed can be reissued by the Company. The 7.0% Industrial Revenue Bonds are subject to optional annual redemption at par value by the Company in 1994 or the bondholder in 2000. At December 31, 1993 and 1992, SFr. 3,407,000 and SFr. 4,796,000 respectively, were borrowed from the pension fund of Fluka Chemie AG, a wholly-owned subsidiary. The interest rate on this debt was 6.0% and 7.0% at December 31, 1993 and 1992, respectively. There is no specified repayment schedule for this borrowing. During the year ended December 31, 1992, the Company repaid SFr. 66,000,000 borrowings that had been outstanding under unsecured credit facilities maintained with three Swiss banks. These borrowings were treated as a hedge of the Company's investment in Swiss assets and, accordingly, gains or losses were included in cumulative translation adjustments in stockholders' equity. Total interest expense incurred by the Company, net of immaterial amounts capitalized, was $2,442,000, $5,375,000 and $7,605,000 in 1993, 1992 and 1991, respectively. NOTE 5 - INSURANCE The Company's general and products liability insurance coverage, which provides for risks up to $200 million, was renewed during 1993. As is the case with other chemical companies, the current policies exclude coverage for environmental damage and are written on a claims-made basis. NOTE 6 - LEASE COMMITMENTS The Company's subsidiaries lease manufacturing and warehouse facilities and computer equipment under non-cancelable leases expiring at various dates through 2021. Rent charged to operations was $8,222,000, $6,357,000 and $6,981,000 in 1993, 1992 and 1991, respectively. Minimum rental commitments for non-cancelable leases in effect at December 31, 1993, are as follows (in thousands): 1994....... $5,515 1995....... 4,196 1996....... 2,817 1997....... 1,125 1998....... 527 1999-2021.. 1,361 NOTE 7 - INOME TAXES The provision for income taxes consists of the following (in thousands): 1993 1992 1991 Current: ------- ------- ------- Federal $50,470 $39,519 $32,859 State 4,654 3,972 3,541 Foreign 3,591 6,515 6,970 ------- ------- ------- Total current 58,715 50,006 43,370 ------- ------- ------- Deferred: Federal 904 1,950 505 State (48) (39) 49 Foreign (1,108) (63) 161 ------- ------- ------- Total deferred (252) 1,848 715 ------- ------- ------- Total tax provision $58,463 $51,854 $44,085 ======= ======= ======= A reconciliation of statutory and effective tax rates is as follows: 1993 1992 1991 ------ ------ ------ Statutory tax rate 35.0% 34.0% 34.0% FSC benefits (1.7) (1.5) (1.5) State income taxes, net of federal benefits 2.0 1.9 1.8 Foreign taxes (1.6) (0.5) 0.9 Other, net 1.6 1.3 0.4 ------ ------ ------ 35.3% 35.2% 35.6% ====== ====== ====== The Company adopted Financial Accounting Standard No. 109, "Accounting for Income Taxes", effective January 1, 1993, which resulted in a cumulative adjustment that increased net income by $3,000,000, or $.06 per share. This was due to deferred income taxes being recorded under prior accounting standards at the tax rate in effect when the deferrals arose (generally 46% and 40%), whereas the new accounting standard requires that deferred income taxes be recorded at the rate that will be in effect when the income taxes are expected to be paid (35% under current tax law). Deferred income tax provisions reflect the effect of temporary differences between financial statement and tax reporting of income and expense items. The net deferred tax assets at December 31, 1993, which are included in other assets on the consolidated balance sheet, result from the following temporary differences (in thousands): Gross deferred assets: Inventories $12,936 Pension and post- retirement benefit plans 9,679 ------- Total 22,615 ------- Gross deferred liabilities: Depreciation (14,886) Other (3,605) ------- Total (18,491) ------- Net deferred tax assets $ 4,124 ======= No valuation allowance for the deferred tax assets was required at December 31, 1993. United States taxes are not provided on unremitted earnings and related cumulative translation adjustments of foreign subsidiaries (approximately $67,212,000 at December 31, 1993) because the Company intends to reinvest the earnings indefinitely. The amount of estimated income taxes that would be incurred should such earnings be distributed is not significant due to the availability of foreign tax credits. The Company has a Foreign Sales Corporation ("FSC") subsidiary which is taxed at a lower effective tax rate on its income from export sales from the United States. NOTE 8 - COMMON STOCK The Company's deferred compensation plan provides for cash and common stock payments to certain key employees. Under this plan a bonus pool is calculated by a formula based on the amount of increase in profitability. Bonus units are then awarded. Bonus units are distributed five years after being awarded in the form of one share of common stock for each bonus unit. In addition, the Company makes cash payments equal to the amount of Federal income taxes the employee would be required to pay for the receipt of such stock and cash at the highest marginal Federal income tax rate. Expenses for this plan are recorded during the period for which the calculation is made. During 1993, 1992 and 1991, 20,800, 20,278 and 28,586 shares of common stock, respectively, were issued under this plan. At December 31, 1993, 78,317 bonus units were awarded but not distributed. This plan permits issuance of a maximum of 1,200,000 shares of the Company's common stock, of which 841,705 shares remain to be awarded. The Company's Share Option Plan of 1987 permits the granting of incentive stock options or non-qualified options to purchase up to 1,000,000 shares of the Company's common stock through 1997. Incentive stock options may not have an option price of less than the fair market value of the shares at the date of the grant. Options generally become exercisable one year following the grant date, however, options granted in 1993 to purchase 193,000 shares become exercisable ratably over a five year period. Options to purchase 186,790 shares were exercisable at December 31, 1993. Options to purchase 397,700 shares of the Company's common stock under this plan remain to be granted at December 31, 1993. Changes in the number of shares subject to option are as follows: Shares Subject Price Range to Option ---------------- --------- Balance, December 31, 1991 $20.38 - $42.75 92,270 Options granted 46.75 - 50.25 116,500 Options exercised 20.38 (9,660) Options cancelled 46.75 (3,000) ------- Balance, December 31, 1992 20.38 - 50.25 196,110 Options granted 48.00 - 55.25 370,000 Options exercised 20.38 - 46.75 (8,420) Options cancelled 46.75 - 55.25 (20,900) ------- Balance, December 31, 1993 $20.38 - $55.25 536,790 ======= NOTE 9 - COMPANY OPERATIONS BY SEGMENT The Chemical Products segment distributes biochemicals, organic chemicals, chromatography products, diagnostic reagents and related products for use in research and development, in the diagnosis of disease and in manufacturing. These products are both manufactured by the Company and purchased for resale. The Metal Products segment manufactures and distributes components for metal frameworks used in industry to support pipes, lighting fixtures and conduit, continuous networks of trays used in routing power and telecommunications cabling and electrical enclosures. Sales between these two industry segments are not significant. Cash and temporary cash investments are considered available for general corporate purposes and, accordingly, are not allocated to the identifiable assets of either segment. The United States sales to unaffiliated customers presented in the summary of operations by geographic segment on page 22 includes sales to foreign markets as follows (in thousands): Year Amount ----- ------- 1993 $99,876 1992 88,035 1991 88,705 The Company's operations by industry segment are as follows (in thousands): 1993 1992 1991 -------- -------- -------- Net sales to unaffiliated customers: Chemical Products $613,083 $553,127 $498,063 Metal Products 126,352 101,279 91,308 -------- -------- -------- Total $739,435 $654,406 $589,371 ======== ======== ======== Income before provision for income taxes and cumulative effect of accounting changes: Chemical Products $148,491 $136,913 $118,391 Metal Products 18,649 14,018 12,568 Interest expense, net of interest income (1,523) (3,619) (7,081) -------- -------- -------- Total $165,617 $147,312 $123,878 ======== ======== ======== Depreciation: Chemical Products $26,063 $23,916 $22,833 Metal Products 3,616 3,461 2,938 ------- ------- ------- Total $29,679 $27,377 $25,771 ======= ======= ======= Capital expenditures: Chemical Products $65,767 $27,164 $23,491 Metal Products 9,415 3,722 2,568 ------- ------- ------- Total $75,182 $30,886 $26,059 ======= ======= ======= Identifiable assets at December 31: Chemical Products $658,393 $517,446 $514,794 Metal Products 84,786 53,412 53,600 Cash and cash equivalents 10,252 44,932 28,119 -------- -------- -------- Total $753,431 $615,790 $596,513 ======== ======== ======== The Company's operations by geographic segment are as follows (in thousands): 1993 1992 1991 ------ ------ ------ Net sales to unaffiliated customers: United States $530,133 $457,275 $421,318 Foreign 209,302 197,131 168,053 Net intercompany sales between geographic areas: United States 85,521 74,362 57,575 Foreign 27,276 26,709 25,272 Eliminations (112,797) (101,071) (82,847) -------- -------- -------- Total $739,435 $654,406 $589,371 ======== ======== ======== Income before provision for income taxes and cumulative effect of accounting changes: United States $158,908 $131,094 $110,760 Foreign 9,096 19,797 19,338 Eliminations (2,387) (3,579) (6,220) -------- -------- -------- Total $165,617 $147,312 $123,878 ======== ======== ======== Identifiable assets at December 31: United States $551,736 $461,860 $444,180 Foreign 225,035 175,244 169,010 Eliminations (23,340) (21,314) (16,677) -------- -------- -------- Total $753,431 $615,790 $596,513 ======== ======== ======== NOTE 10 - PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS Pension and Retirement Savings Plans The Company and its subsidiaries have several retirement plans covering substantially all domestic employees and certain employees of foreign subsidiaries. The Company's defined benefit plans provide all eligible employees with a monthly retirement benefit based upon compensation and years of service with the Company.
The net periodic pension cost for the Company's defined benefit plans is as follows (in thousands): December 31, Domestic Foreign --------------------------- ------------------------ 1993 1992 1991 1993 1992 1991 ------ ------ ------ ------ ------ ----- Service cost $1,429 $1,396 $1,214 $1,580 $ 334 $294 Interest cost 1,956 1,722 1,433 1,264 265 272 Actual return on plan assets (2,419) (1,067) (4,387) (2,565) (706) (641) Net amortization and deferral 652 (366) 3,220 936 281 297 ------ ------ ------ ------ ----- ---- Net periodic pension cost $1,618 $1,685 $1,480 $1,215 $ 174 $222 ====== ====== ====== ====== ===== ====
The Company's policy is to fund its domestic defined benefit plan with the minimum contribution required under the Internal Revenue Code. Foreign plans are funded at a level to maintain the solvency of the plans as defined by local law. A plan that covers all eligible employees of Fluka Chemie AG, which was previously reported as a defined contribution plan, has been reflected as a defined benefit plan in 1993. At December 31, 1993, assets of the Company's defined benefit plans were invested in listed common stocks, stock mutual funds, government and corporate bonds and money market instruments. No common stock of the Company is held by these plans. The funding status of the Company's defined benefit plans and amounts recognized with respect to these plans in the consolidated balance sheets are as follows (in thousands): December 31, Domestic Foreign ----------------- ---------------- 1993 1992 1993 1992 Actuarial present value of benefit obligations: ------- ------- ------- ------ Vested $23,563 $19,222 $23,038 $2,838 ======= ======= ======= ====== Accumulated $25,111 $20,569 $23,038 $2,838 ======= ======= ======= ====== Projected $27,951 $24,124 $28,982 $3,437 Plan assets at fair value 30,298 24,140 28,257 4,396 ------- ------- ------- ------ Deficiency (excess) of plan assets over projected benefit obligations (2,347) (16) 725 (959) Unrecognized net gain (loss) (297) 1,207 (1,478) 71 Unrecognized prior service cost (2,726) (3,971) (1,181) (315) Unrecognized net assets 998 1,089 347 394 ------- ------- ------- ----- Pension (assets) $(4,372) $(1,691) $(1,587) $(809) ======= ======= ======= =====
Assumptions used in the preceding determinations, which reflect average long-term expectations and may not represent current experience, are as follows: December 31, Domestic Foreign -------------- -------------- 1993 1992 1993 1992 ---- ---- ---- ---- Discount rate in determining benefit obligations 7.5% 8.0% 5.0% 9.0% Compensation rate increase 5.5% 6.0% 4.0% 7.5% Return on plan assets 8.5% 8.5% 6.8% 9.0%
The Company's domestic defined contribution plan, which was changed to a 401(k) retirement savings plan effective January 1, 1993, provides eligible employees with retirement benefits in addition to those provided by the defined benefit plan. The plan permits participants to voluntarily contribute up to 15% of their compensation, subject to Internal Revenue Code limitations. The Company also contributes a fixed amount per year for each eligible employee plus a percentage of the employee's contribution. The Company's policy is to fully fund its defined contribution plan. The cost for this plan was $2,032,000, $2,825,000 and $2,489,000 for the years ended December 31, 1993, 1992 and 1991, respectively. Other Postretirement Benefits Certain employees of U.S. operations who retire on or after attaining age 55 with at least 7 years of service with the Company are entitled to postretirement health, dental and life coverages. These benefits are subject to deductibles, co-payment provisions and coordination with benefits available under Medicare. The Company may amend or change the plan periodically. Financial Accounting Standards No. 106, Employers' Accounting for Postretirement Benefits Other Than Pensions , requires that the expected future cost of these benefits be expensed during the years that the employees render service. The Company adopted this accounting principle effective January 1, 1993, and recorded a charge to expense of $21,306,000 ($13,806,000 after tax, or $.28 per share) as the cumulative effect of a change in accounting principle to recognize the prior years' costs. Prior to 1993, benefit costs were recognized as claims were paid. The total cost of postretirement benefits charged to operations was $446,000 and $178,000 in 1992 and 1991, respectively. The components of expense exclusive of the cumulative effect of the change in accounting principle in 1993 were as follows (in thousands): Service cost $1,039 Interest cost 1,750 ------ Net postretirement benefit cost $2,789 ====== Future benefit costs were estimated assuming medical costs increase at a 14.0% annual rate in 1993 decreasing ratably until the year 2000 to a 7.0% growth rate and remaining at 7.0% per year thereafter. A 1.0% increase in this annual trend rate would have increased the accumulated postretirement benefit obligation at December 31, 1993 by $2,440,000 and 1993 postretirement benefit expense by $320,000. The weighted average discount rate used to estimate the accumulated postretirement benefit obligation is 7.5%. Benefits are funded as claims are paid. The accounting change does not impact the Company's cash flows. In connection with the acquisition of Supelco, Inc., an accumulated postretirement benefit obligation of $1,704,000 was assumed on May 6, 1993. A reconciliation of the plan's funded status to the accrued postretirement benefit liability included in the consolidated balance sheet at December 31, 1993, is as follows (in thousands): Accumulated postretirement benefit obligation: Retirees $ 8,139 Active - fully eligible 5,613 Active - other 14,486 ------ Total 28,238 Plan assets at fair value -- ------ Unfunded postretirement benefit obligation 28,238 Unrecognized net loss (3,000) ------ Accrued postretirement benefit liability 25,238 Less-Current portion included in accrued payroll and other expenses (679) ------- Deferred postretirement benefits liability $24,559 ======= NOTE 11 - ACQUISITIONS On May 6, 1993, the Company acquired the net assets and business of Supelco, Inc., a worldwide supplier of chromatography products used in chemical research and production, for $54,700,000 in cash. On June 16, 1993, the Company acquired all of the stock of Circle AW Products Company, a supplier of electrical and electronic metal enclosures to industrial, residential and commercial markets, for $10,800,000 in cash. The net tangible assets of these businesses were recorded based upon fair market values as of the respective acquisition dates. The excess of the purchase prices over these values aggregated $30,500,000 and was recorded as intangible assets, with the unamortized balance included in other assets in the consolidated balance sheet. The results of operations for these businesses from their respective acquisition dates are included in the Company's consolidated statement of income for the period ended December 31, 1993, including amortization of the intangible assets over periods ranging from 5 to 40 years. The following presents (in thousands, except net income per share) the unaudited pro forma consolidated results of operations as if these acquisitions had occurred at the beginning of the years presented. The unaudited pro forma results do not purport to be indicative of the actual results that would have been achieved had these acquisitions occurred as of January 1, 1992, or of results which may occur in the future. Year ended December 31, ----------------------- 1993 1992 -------- -------- Net sales $765,519 $723,517 ======== ======== Net income $107,825* $ 95,284 ======== ======== Net income per share $ 2.17* $ 1.91 ======== ======== *Before cumulative effect of accounting changes.
EX-21 3 PRINCIPAL SUBSIDIARIES SIGMA-ALDRICH CORPORATION PRINCIPAL SUBSIDIARIES Sigma-Aldrich Corporation (Delaware), the Registrant: 1. Sigma Chemical Company (Delaware) (A) Sigma F & D Division, Inc. (Missouri) (B) Sigma Redevelopment Corporation (Missouri) (C) Sigma Second Street Redevelopment Corporation (Missouri) (D) Sigma Israel Chemical Company, Ltd. (Israel) (E) Makor Chemicals Limited (Israel) (F) Sigma-Aldrich Chemie Holding GmbH (Germany) (G) Sigma-Aldrich (Vertriebs) GmbH (Germany) 2. Aldrich Chemical Company, Inc. (Delaware) (A) Sigma-Aldrich N.V./S.A. (Belgium) (B) Aldrich-Chemie Verwaltungs GmbH (Germany) (C) Aldrich-Chemie GmbH and Co. K.G. (Germany) (D) Aldrich-Japan, Inc. (Delaware) (E) Sigma-Aldrich, S.r.l. (Italy) 3. B-Line Systems, Inc. (Missouri) (A) Circle AW Products Company (Delaware) 4. Sigma-Aldrich Company, Ltd. (United Kingdom) (A) Sigma-Aldrich Holding Limited (United Kingdom) (B) Sigma Chemical Company Ltd. (United Kingdom) (C) Aldrich Chemical Company Ltd. (United Kingdom) (D) B-Line Systems Limitd (United Kingdom) 5. Sigma-Aldrich Foreign Sales Corporation (U.S. Virgin Islands) 6. Fluka Chemie AG (Switzerland) (A) Fluka Chemical Corporation (New Jersey) (B) Fluka Feinchemikalien GmbH (Germany) (C) Fluka Chemical Ltd. (United Kingdom) 7. Sigma-Aldrich Foreign Holding Company (Missouri) (A) Sigma-Aldrich Quimica S.A. (Spain) (B) Sigma-Aldrich Pty., Limited (Australia) (C) Sigma-Aldrich Canada, Ltd. (Canada) (D) Sigma-Aldrich s.r.o. (Prague) (E) Sigma-Aldrich Chemical Representacoes, Ltd. (Brazil) (F) Sigma-Aldrich Quimica S.A. de C.V. (Mexico) (G) Sigma-Aldrich Handels GmbH (Austria) (H) Sigma-Aldrich Kft. (Hungary) 8. Supelco, Inc. (Delaware) (A) Supelco S.A. (Switzerland) (B) Supelco France (France) (C) Supelco Japan Limited (Japan) (D) Supleco Canada Ltd/Ltee (Canada) 9. Sigma-Aldrich Chimie S.N.C. (France) (A) Sigma-Aldrich Chemie France S.a.r.l. (France) (B) Aldrich-Chimie S.a.r.l. (France) (C) Fluka Chimie S.a.r.l. (France) All subsidiaries are directly or indirecly 100% owned. EX-23 4 ACCOUNTANTS CONSENTS REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULES To Sigma-Aldrich Corporation: We have audited, in accordance with generally accepted auditing standards, the consolidated financial statements included in SIGMA-ALDRICH CORPORATION and subsidiaries' annual report to shareholders incorporated by reference in this Form 10-K, and have issued our report thereon dated February 11, 1994. Our audit was made for the purpose of forming an opinion on those statements taken as a whole. The schedules listed in the index on Page F-1 are the responsibility of the Company's management and are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly state in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. /s/ ARTHUR ANDERSEN & CO. ARTHUR ANDERSEN & CO. St. Louis, Missouri February 11, 1994 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report incorporated by reference in this Form 10-K, into the Company's previously filed registration statements on Form S-8, file numbers 2-95937 and 33-24415. /s/ ARTHUR ANDERSEN & CO. ARTHUR ANDERSEN & CO. St. Louis, Missouri March 30, 1994
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