Item 1. BUSINESS
(a) GENERAL DEVELOPMENT OF BUSINESS.
Premier Industrial Corporation was incorporated in Ohio in 1946 as the successor to a partnership formed in 1940. Its executive offices are located at 4500 Euclid Avenue, Cleveland, Ohio 44103. As used herein, the term "Premier" or the "Corporation" means Premier Industrial Corporation and its subsidiaries, unless the context indicates otherwise.
Premier is a leading distributor of electronic components and also distributes, and in some cases manufactures, a wide range of products used to repair and maintain equipment, machinery, vehicles and buildings. In addition, Premier is a leading producer of high performance fire-fighting components for the original equipment and replacement markets.
(b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS.
Financial information about each of Premier's industry segments for the last three fiscal years, which is included in the table under the heading "Industry Segment Information" on page 10 of the Corporation's 1994 Annual Report to its shareholders, which is incorporated herein by reference.
(c) NARRATIVE DESCRIPTION OF THE BUSINESS.
ELECTRONICS DISTRIBUTION. The Electronics Distribution Group distributes a wide array of electronic and electrical products. Its product line consists of microprocessors, switches, relays, semiconductors, hand tools, electronic interconnection devices, integrated circuits, factory automation components, capacitors, resistors, connectors, test equipment, heat sinks, terminals, coils, motor controls, cable ties, clamps, mounts, alligator clips, electrical terminals, and associated equipment.
The Electronics Distribution Group services a diverse customer base in the original equipment and maintenance/repair/operations markets and manufacturers of computer and data processing equipment, communications equipment, industrial controls and processing equipment, and test and measuring equipment, as well as radio and television broadcast stations, schools, governmental agencies, electrical contractors, electronic service dealers, and industrial customers.
Each of the divisions within the Electronics Distribution Group maintains its own sales force. Inside and outside sales personnel, and in certain cases, manufacturers' representatives, conduct sales by telephone, direct contact or mail order. Comprehensive catalogs are published by several divisions for use as data and purchasing references by engineers, purchasing agents and maintenance personnel in a wide range of businesses. GENERAL PRODUCTS. The principal products included within the General Products Group are: high performance cap screws, nuts, washers, screws, specialty fasteners and industrial shop supplies; replacement parts and special hardware for cars and trucks, including heavy-duty fasteners, special hardware and parts for construction equipment; special welding electrodes, brazing alloys, fluxes, solders and welding aids; electrical systems components, such as terminals, connectors, fittings, clamps and building hardware; cleaners, floor care products, drain maintenance systems; pavement maintenance products and accessories for parking lots and recreational areas; adhesives, chemicals for the automotive industry; plastic repair products, engine oils and greases for heavy-duty diesel-driven equipment; specialty greases and gear lubricants for heavy industry; heavy-duty electrical cord, cable and associated devices; and fire-fighting components, including nozzles, valves, and specialized fire-fighting equipment.
The General Products Group serves a wide range of customers and markets. Products are sold to original equipment, industrial, construction and transportation companies, and commercial, public and institutional users, primarily for maintenance and repair. Markets also include municipal fire departments, the military services and fire truck manufacturers.
The product lines mentioned above are marketed through separate divisions. Each division has its own distinct sales force. Products are sold by field representatives, inside sales personnel and outside dealers and distributors.
OTHER. In addition to the foregoing, Premier has interests in limited partnerships which own and manage rental properties, as described under Item 2
Item 2. PROPERTIES
Premier has facilities, including general and sales offices, distribution centers, manufacturing plants and research facilities, in 207 locations in the United States, Canada and Europe. Of these facilities, those owned in fee by Premier contain approximately 2,100,000 square feet and are located on sites consisting of approximately 155 acres of land. Premier also owns vacant land adjacent to some of its facilities for future expansion.
Facilities leased by Premier contain approximately 528,000 square feet. No single lease is material to the business of any industry segment.
The Electronics Distribution segment, headquartered in Chicago, Illinois, has 142 locations, the majority of which are leased sales offices. Major distribution centers are located in Chicago, Illinois and Gaffney, South Carolina, with smaller distribution centers located elsewhere in the United States and in Canada and the United Kingdom. The General Products segment, with headquarters in Cleveland, Ohio, maintains numerous distribution centers and sales offices in the United States, Canada and Europe, along with manufacturing facilities located in Indianapolis, Indiana, Cleveland, Ohio and Wooster, Ohio. The Premier executive offices, corporate staff and principal research and development activities are located in its Cleveland, Ohio facilities.
Premier has interests in limited partnerships which own and operate rental properties located in Arlington, Virginia, consisting of residential units and an office building.
Management believes that the facilities utilized by Premier in the conduct of its business are suitable for their intended use.
Item 3.
Item 3. LEGAL PROCEEDINGS
There are at the date of this report no material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which Premier is a party or to which any of its property is subject.
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 quarter ended May 31, 1994.
Item 4a. EXECUTIVE OFFICERS OF THE REGISTRANT
The following table and accompanying text set forth the names, ages and positions held by each of the executive officers of Premier as of July 8, 1994, as well as information about each such person's principal occupations and employment during the past five years:
With the exception of Deidra D. Dixon and Stuart D. Neidus, each of the executive officers has been employed by Premier in the positions listed above for the last five years. Deidra D. Dixon was an attorney with the law firm of Jones, Day, Reavis and Pogue from September, 1983 through November, 1991 and a partner of that firm from January, 1988. Ms. Dixon joined Premier in December, 1991. Stuart D. Neidus has been employed by Premier since November, 1992. Prior to joining Premier, Mr. Neidus was an accountant with the accounting firm of KPMG Peat Marwick from June, 1973 through October, 1992 and a partner in that firm from July, 1984.
Morton L., Jack N. and Joseph C. Mandel are brothers and co-founders of the Corporation. There are no family relationships between any other director, director nominee and/or executive officer of the Corporation.
Each of the officers of the Corporation is elected annually by the Board of Directors to serve until the next annual meeting of the Board and until his or her successor is elected and qualified.
PART II
Item 5.
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Premier Common Stock is listed for trading on the New York Stock Exchange. As of July 8, 1994, there were approximately 8,100 holders of Premier Common Stock (including individual participants in security position listings and accounts, as well as holders of record).
The reported high and low sales prices of Premier Common stock and the amount of dividends per share paid by quarter for the two most recent fiscal years are contained on
page 10 of the Corporation's 1994 Annual Report to its shareholders under the caption "Highlights by Quarter" and such information is incorporated herein by reference.
The last reported sale price of Premier Common Stock on July 8, 1994, based on the closing price on the New York Stock Exchange on that date, was $20.00.
Item 6.
Item 6. SELECTED FINANCIAL DATA
Information with respect to selected financial data for each of the last five fiscal years, which is included in the "Ten Year Financial Summary" contained on pages 8 and 9 of Premier's 1994 Annual Report to its shareholders, is incorporated herein by reference.
Item 7.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The "Management's Review" contained on pages 18 and 19 of Premier's 1994 Annual Report to its shareholders is incorporated herein by reference.
Item 8.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements and accompanying notes of Premier and its subsidiaries contained on pages 11 through 17, inclusive, of Premier's 1994 Annual Report to its shareholders, together with the independent auditors' report relating thereto contained on page 19 thereof, and the unaudited quarterly financial data under the heading "Highlights by Quarter" on page 10 of such Annual Report, are incorporated herein by reference.
Item 9.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
PART III
Item 10.
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information relating to directors of Premier contained under the headings "Election of Directors" on pages 4 through 6, inclusive, "Certain Relationships and Transactions" on page 6, and the paragraph under the heading "Security Ownership of Certain Beneficial Owners and Management" appearing at the bottom of page 7 and the top of page 8 of Premier's Proxy Statement for its 1994 Annual Meeting of Shareholders is incorporated herein by reference. Information relating to executive officers of Premier is contained herein under Item 4a of Part I of this report.
Item 11.
Item 11. EXECUTIVE COMPENSATION
The information contained under the headings "Compensation of the Board of Directors" on page 7, "Compensation of Executive Officers" on page 9 through 12, inclusive, "Compensation Committee Report on Executive Compensation" on pages 12 through 14, inclusive, "Compensation Committee Interlocks and Insider Participation" on page 15 and "Five-year
Shareholder Return Comparison" on pages 15 and 16 of Premier's Proxy Statement for its 1994 Annual Meeting of Shareholders is incorporated herein by reference.
Item 12.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information relating to security ownership set forth under the headings "Election of Directors" on pages 4 through 6, inclusive, and "Security Ownership of Certain Beneficial Owners and Management" on pages 7 and 8 of Premier's Proxy Statement for its 1994 Annual Meeting of Shareholders is incorporated herein by reference.
Item 13.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information under the headings "Certain Relationships and Transactions" on page 6 and "Compensation Committee Interlocks and Insider Participation" on page 15 of Premier's Proxy Statement for its 1994 Annual Meeting of Shareholders is incorporated herein by reference.
PART IV
Item 14.
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) DOCUMENTS FILED AS PART OF THIS REPORT:
(1) The following consolidated financial statements of Premier Industrial Corporation and Subsidiaries, together with the independent auditors' report relating thereto, contained on pages 11 through 17, inclusive, and page 19 of Premier's 1994 Annual Report to its shareholders, and the unaudited quarterly financial data set forth under the heading "Highlights by Quarter" on page 10 of such Annual Report, are incorporated herein by reference:
Consolidated Balance Sheet at May 31, 1994 and 1993
Consolidated Statement of Earnings for the years ended May 31, 1994, 1993 and 1992
Consolidated Statement of Shareholders' Equity for the years ended May 31, 1994, 1993 and 1992
Consolidated Statement of Cash Flows for the years ended May 31, 1994, 1993 and 1992
Notes to Consolidated Financial Statements
Auditors' Report
Highlights by Quarter (unaudited)
(2) Financial Statement Schedules of Premier Industrial Corporation and Subsidiaries:
Independent Auditors' Report on Financial Statement Schedules
Schedule I - Temporary Investments
Schedule VIII - Valuation Accounts
All other schedules are omitted because they are not required, not applicable, or the information is given in the consolidated financial statements or the notes thereto.
(3) Exhibits Required to be Filed by Item 601 of Regulation S-K
The information called for by this paragraph is contained in the Exhibit Index of this report on page 18, which is incorporated herein by reference.
(b) Reports on Form 8-K
No Current Reports on Form 8-K were 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.
PREMIER INDUSTRIAL CORPORATION
Date: July 21, 1994 BY /s/ Morton L. Mandel ---------------------------------- Morton L. Mandel Chairman of the Board
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 indicated on the 21st day of July, 1994.
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENT SCHEDULES -------------------------------------------------------------
The Shareholders and Board of Directors Premier Industrial Corporation:
Under date of July 21, 1994, we reported on the consolidated balance sheets of Premier Industrial Corporation and subsidiaries as of May 31, 1994 and 1993, and the related consolidated statements of earnings, shareholders' equity, and cash flows for each of the years in the three-year period ended May 31, 1994, as contained in the 1994 annual report to shareholders. These consolidated financial statements and our report thereon are incorporated by reference in the annual report on Form 10-K for the year ended May 31, 1994. In connection with our audits of the aforementioned consolidated financial statements, we also have audited the related financial statement schedules as listed in Part IV, Item 14(a)(2). These financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statement schedules based on our audits.
In our opinion, the related financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein.
/s/ KPMG PEAT MARWICK KPMG PEAT MARWICK
Cleveland, Ohio July 21, 1994
SCHEDULE VIII
EXHIBIT INDEX
number. Exhibits 10c, 10d and 10e were contained in the Annual Report on Form 10-K, which was filed on August 30, 1993, under the corresponding exhibit number.
** Represents a management contract or compensatory plan or arrangement required to be filed as an exhibit to this Annual Report on Form 10-K.