ITEM 2. PROPERTIES ------ ---------- The Company owns and operates five plastics compounding plants in North America and four in Europe. The following Table
indicates the location of each plastics compounding plant and the approximate annual plastics compounding capacity and approximate floor area, including warehouse space:
(d) The Company recently commenced construction in central Mexico of a new production facility. The total investment including land, building, equipment and working capital, will be approximately $15 million. This facility is expected to have an initial annual capacity of approximately 40 million pounds and is scheduled to commence operations in late fiscal 1995.
(e) The Company plans to invest $6 million in a new manufacturing facility in Indonesia. This facility is expected to have an initial annual capacity of approximately 13 million pounds and is scheduled to commence operations in fiscal 1996.
(3) Includes approximately 28,000 square feet of sales and administrative office space, 196,000 square feet of warehouse space, and 96,000 square feet for manufacturing.
The approximate annual plastics compounding capacity set forth in the preceding Table is based upon several factors, including the weekly five-day, three-shift basis on which the Company customarily operates. Another factor is the approximate historical mix of specific types of plastic compounds manufactured at each plant, as a plant operating at full capacity will produce a greater or lesser quantity (in pounds) depending upon the specific plastic compound then being manufactured. The annual pounds of plastic compounds manufactured does not, in itself, reflect the extent of utilization of the Company's plants or the profitability of the plastic compounds produced. The Company also owns and operates a rubber shim and tie pad plant in East St. Louis, Illinois having a floor area of approximately 65,000 square feet. The Company considers each of the foregoing facilities to be in good condition and suitable for its purposes. Public warehouses are used wherever needed to store the
Company's products conveniently for shipment to customers. The number of public warehouses in use varies from time to time, but a yearly average approximates 35. The Company also leases approximately 100,000 square feet of warehouse space located in Sindorf and Horrem, Germany. The Company owns its corporate headquarters which is located in Akron, Ohio and which contains approximately 48,000 square feet of usable floor space. The Company leases sales offices in various locations in the United States, Canada, the United Kingdom, Mexico and Europe. ITEM 3.
ITEM 3. PENDING LEGAL PROCEEDINGS - - - ------ ------------------------- The Company is not a party to any material pending legal proceedings. ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - - - ------ --------------------------------------------------- No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year ended August 31, 1994. EXECUTIVE OFFICERS OF THE COMPANY --------------------------------- The age (as of October 24, 1994), business experience during the past five years and offices presently held by each of the Company's Executive Officers are reported below. The Company's By-Laws provide that officers shall hold office until their successors are elected and qualified. Terry L. Haines: Age 48; President and Chief Executive Officer of the Company since January, 1991; formerly Chief Operating Officer, 1990-1991 and Vice President--North American Sales, 1989-1990; and prior to that time General Manager of A. Schulman
Canada Ltd. since 1986. Robert A. Stefanko: Age 51; Chairman of the Board since January, 1991; Executive Vice President--Finance and Administration of the Company since 1989; Chief Financial Officer of the Company since 1979; and formerly Vice President--Finance since 1979. Larry A. Kushkin: Age 54; Executive Vice President--International Automotive Operations of the Company since 1989 and prior to that time Vice President--Automotive Sales of the Company since 1977. Brian R. Colbow: Age 47; Treasurer of the Company since 1984. Alain C. Adam: Age 46; Vice President--Automotive Marketing since 1990; formerly General Manager--Automotive Marketing since 1989 and prior to that time Manager--Automotive Marketing since 1985. Leonard E. Emge: Age 64; Vice President--Manufacturing since 1993 and prior to that time General Plant Manager--North America since 1985. James H. Berick: Age 61; Secretary of the Company since 1979 and Chairman, Berick, Pearlman & Mills Co., L.P.A., Cleveland, Ohio (attorneys). PART II ------- ITEM 5.
ITEM 5. MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED - - - ------ ------------------------------------------------- STOCKHOLDER MATTERS ------------------- The Company's Common Stock is traded in the over-the-counter market and is quoted through the NASDAQ National Market System.
Additional information in response to this Item is set forth on page 1 of the Company's 1994 Annual Report to Stockholders, which information is incorporated herein by reference. ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA - - - ------ ----------------------- Information in response to this Item is set forth on pages 28 and 29 of the Company's 1994 Annual Report to Stockholders, which information is incorporated herein by reference. ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF - - - ------ --------------------------------------- FINANCIAL CONDITION AND RESULTS OF OPERATIONS --------------------------------------------- Information in response to this Item is set forth on pages 26 and 27 of the Company's 1994 Annual Report to Stockholders, which information is incorporated herein by reference. ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - - - ------ ------------------------------------------- (a) Financial Statements -------------------- The financial statements, together with the report thereon of Price Waterhouse dated October 14, 1994, appearing on pages 14 through 25 of the Company's 1994 Annual Report to Stockholders, are incorporated herein by reference. (b) Supplementary Data ------------------ Information in response to this Item is set forth in the financial statement schedules set forth on pages through of this Form 10-K. ITEM 9.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURES - - - ------ ----------------------------------------------------- None.
PART III -------- ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY - - - ------- ----------------------------------------------- The information required in response to this Item in respect of Directors is set forth under the captions "Election of Directors" and "Compliance with Section 16(a) of The Securities Exchange Act of 1934" in the Company's proxy statement dated November 11, 1994, previously filed with the Commission, which information is incorporated herein by reference. The information required by this Item in respect of Executive Officers is set forth on pages 19 and 20 of this Form 10-K and is incorporated herein by reference. ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION - - - ------- ---------------------- Information in response to this Item is set forth under the caption "Compensation of Executive Officers" in the Company's proxy statement dated November 11, 1994, previously filed with the Commission, which information is incorporated herein by reference. ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL - - - ------- ---------------------------------------- OWNERS AND MANAGEMENT --------------------- Information in response to this Item is set forth under the caption "Election of Directors" in the Company's proxy statement dated November 11, 1994, previously filed with the Commission, which information is incorporated herein by reference.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS - - - ------- ---------------------------------------------- Information in response to this Item is set forth under the caption "Compensation Committee Interlocks and Insider Participation" in the Company's proxy statement dated November 11, 1994, previously filed with the Commission, which information is incorporated herein by reference.
PART IV ------- ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS - - - ------- --------------------------------------------------- ON FORM 8-K ----------- (a) The following documents are filed as part of this report:
Page ---- (1) Financial Statements: --------------------- Report of Independent Accountants 25*
Consolidated Statement of Income for the three years ended August 31, 1994 14*
Consolidated Balance Sheet at August 31, 1994 and 1993 16*
Consolidated Statement of Cash Flows for the three years ended August 31, 1994 18*
Consolidated Statement of Stockholders' Equity for the three years ended August 31, 1994 15*
Notes to Consolidated Financial Statements 19* ___________ *Incorporated by reference from the indicated page of the Company's 1994 Annual Report to Stockholders. With the exception of this information and the information incorporated in Items 1, 5, 6, 7 and 8, the 1994 Annual Report to Stockholders is not deemed filed as part of this report.
(2) Financial Statement Schedules: ------------------------------ Report of Independent Accountants on Financial Statement Schedules
V-Property, Plant and Equipment
VI-Reserves for Depreciation of Property, Plant and Equipment
VIII-Valuation and Qualifying Accounts
IX-Short-Term Borrowings
X-Supplementary Income Statement Information
All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.
(3) Exhibits: --------- Exhibit Number ------ 3(a) Restated Certificate of Incorporation (incorporated by reference to Exhibit 3(a) of the Company's Form 10-K for fiscal year ended August 31, 1990).
3(b) Certificate of Amendment of Certificate of Incorporation filed January 14, 1987 (incorporated by reference to Exhibit 3(b) of the Company's Form 10-K for fiscal year ended August 31, 1991).
3(c) Certificate of Amendment of Certificate of Incorporation filed December 14, 1987.
3(d) Certificate of Amendment of Certificate of Incorporation filed December 12, 1990 (incorporated by reference to Exhibit 3(d) of the Company's Form 10-K for fiscal year ended August 31, 1991).
3(e) By-Laws (incorporated by reference to Exhibit 3(c) of the Company's Form 10-K for fiscal year ended August 31, 1990).
3(f) Amendment to By-Laws dated October 20, 1986 (incorporated by reference to Exhibit 3(f) of the Company's Form 10-K for fiscal year ended August 31, 1991).
10(a)* 1981 Incentive Stock Option Plan (incorporated by reference to Exhibit 10(b) of the Company's Form 10-K for fiscal year ended August 31, 1990).
10(b)* A. Schulman, Inc. 1991 Stock Incentive Plan (incorporated by reference to Exhibit 10(b) of the Company's Form 10-K for fiscal year ended August 31, 1991).
10(c)* A. Schulman, Inc. 1992 Non-Employee Directors' Stock Option Plan (incorporated by reference to Exhibit A of the Company's Proxy Statement dated November 12, 1992 filed as Exhibit 28 of the Company's Form 10-K for fiscal year ended August 31, 1992).
10(d)* Employment Agreement between the Company and Robert A. Stefanko dated December 28, 1990 (incorporated by reference to Exhibit 10(c) of the Company's Form 10-K for fiscal year ended August 31, 1991).
10(e)* Employment Agreement between the Company and Terry L. Haines dated December 28, 1990 (incorporated by reference to Exhibit 10(d) of the Company's Form 10-K for fiscal year ended August 31, 1991).
10(f)* Employment Agreement between the Company and Larry A. Kushkin dated December 28, 1990 (incorporated by reference to Exhibit 10(e) of the Company's Form 10-K for fiscal year ended August 31, 1991).
10(g)* Employment Agreement between the Company and Brian R. Colbow dated December 28, 1990 (incorporated by reference to Exhibit 10(f) of the Company's Form 10-K for fiscal year ended August 31, 1991).
10(h)* Employment Agreement between the Company and Alain C. Adam dated December 28, 1990 (incorporated by reference to Exhibit 10(g) of the Company's Form 10-K for fiscal year ended August 31, 1991).
10(i)* Agreement between the Company and Robert A. Stefanko dated as of August 1, 1985 (incorporated by reference to Exhibit 10(h) of the Company's Form 10-K for fiscal year ended August 31, 1991).
10(j)* Agreement between the Company and Larry A. Kushkin dated as of August 1, 1985 (incorporated by reference to Exhibit 10(i) of the Company's Form 10-K for fiscal year ended August 31, 1991).
10(k)* Agreement between the Company and Robert A. Stefanko dated as of March 21, 1991 (incorporated by reference to Exhibit 10(l) of the Company's Form 10-K for fiscal year ended August 31, 1992).
10(l)* Agreement between the Company and Terry L. Haines dated as of March 21, 1991 (incorporated by reference to Exhibit 10(m) of the Company's Form 10-K for fiscal year ended August 31, 1992).
10(m)* Agreement between the Company and Larry A. Kushkin dated as of August 31, 1993 (incorporated by reference to Exhibit 10(n) of the Company's Form 10-K for fiscal year ended August 31, 1993).
10(n) Credit Agreement between the Company, Society National Bank, First National Bank of Ohio and Union Bank of Switzerland dated as of June 30, 1993 (incorporated by reference to Exhibit 10(o) of the Company's Form 10-K for fiscal year ended August 31, 1993).
10(o) Amendment Agreement between the Company, Society National Bank, First National Bank of Ohio and Union Bank of Switzerland dated as of May 31, 1994.
11 Computation of Earnings Per Common Share
13 Company's 1994 Annual Report to Stockholders
21 Subsidiaries of the Company
23 Consent of Independent Accountants
24 Powers of Attorney
27 Financial Data Schedule
99 Notice of Annual Meeting and Proxy Statement Dated November 11, 1994
*Management contract or compensatory plan or arrangement required to be filed as an Exhibit hereto.
(b) Reports on Form 8-K.
No reports on Form 8-K have been filed during the last quarter of the Company's fiscal year ended August 31, 1994.
SIGNATURES ---------- Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
A. SCHULMAN, INC.
By: /s/ Robert A. Stefanko ------------------------------- Robert A. Stefanko Chairman of the Board of Directors and Executive Vice President - Finance and Administration
Dated: November 23, 1994
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 date indicated.
Signature Title Date - - - --------- ----- ---- /s/ Terry L. Haines Director and Principal November 23, 1994 - - - ---------------------- Executive Officer Terry L. Haines
/s/ Robert A. Stefanko Director, Principal November 23, 1994 - - - ---------------------- Financial Officer and Robert A. Stefanko Principal Accounting Officer
James H. Berick* Director Lucille G. Ford* Director Gordon E. Heffern* Director Larry A. Kushkin* Director Franz A. Loehr* Director Alan L. Ockene* Director Charles J. Pilliod* Director Paul Craig Roberts* Director Rene C. Rombouts* Director Robert G. Wallace* Director Peggy Gordon Elliott* Director
*By: /s/ Robert A. Stefanko November 23, 1994 ---------------------- Robert A. Stefanko Attorney-in-Fact
*Powers of attorney authorizing Robert A. Stefanko to sign this annual report on Form 10-K on behalf of certain Directors of the Company are being filed with the Securities and Exchange Commission herewith.
REPORT OF INDEPENDENT ACCOUNTANTS ON ------------------------------------ FINANCIAL STATEMENT SCHEDULES -----------------------------
To the Board of Directors of A. Schulman, Inc.
Our audits of the consolidated financial statements referred to in our report dated October 14, 1994 appearing on page 25 of the 1994 Annual Report to the Stockholders of A. Schulman, Inc. (which report and consolidated financial statements are incorported by reference in this Annual Report on Form 10-K) also included an audit of the Financial Statement Schedules listed in Item 14(a) of this Form 10-K. In our opinion, these Financial Statement Schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.
As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for income taxes and its method of accounting for postretirement health care benefits and life insurance, effective September 1, 1992.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Cleveland, Ohio October 14, 1994