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| Cooper Industries, Incorporated 1995 10-K Report (Partial 10-K shown; subscribers can see the entire 10-K report.) |
0000950129-96-000529.hdr.sgml : 19960402
ACCESSION NUMBER: 0000950129-96-000529
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 10
CONFORMED PERIOD OF REPORT: 19951231
FILED AS OF DATE: 19960401
SROS: NYSE
SROS: PSE
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: COOPER INDUSTRIES INC
CENTRAL INDEX KEY: 0000024454
STANDARD INDUSTRIAL CLASSIFICATION: SWITCHGEAR & SWITCHBOARD APPARATUS [3613]
IRS NUMBER: 314156620
STATE OF INCORPORATION: OH
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-01175
FILM NUMBER: 96542529
BUSINESS ADDRESS:
STREET 1: 1001 FANNIN STE 4000
STREET 2: FIRST CITY TWR
CITY: HOUSTON
STATE: TX
ZIP: 77002
BUSINESS PHONE: 7137395400
MAIL ADDRESS:
STREET 1: P.O. BOX 4446
CITY: HOUSTON
STATE: TX
ZIP: 77210
FORMER COMPANY:
FORMER CONFORMED NAME: COOPER BESSEMER CORP
DATE OF NAME CHANGE: 19710505
10-K
1
COOPER INDUSTRIES, INC. - 12/31/95
1
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, 1995
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 1-1175
Cooper Industries, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Ohio 31-4156620
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
First City Tower, Suite 4000, Houston, Texas 77002
(Address of Principal Executive Offices) (Zip Code)
713/739-5400
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
------------------- ---------------------
Common Stock, $5 par value The New York Stock Exchange
The Pacific Stock Exchange
6.0% Exchangeable Notes due
January 1, 1999 The New York Stock Exchange
7.05% Convertible Subordinated
Debentures due 2015 The New York Stock Exchange
Rights to Purchase Preferred Stock The New York Stock Exchange
The Pacific Stock Exchange
7% Convertible Subordinated
Debentures due 2012 The New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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
------ ------
2
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. [ ]
The aggregate value of the registrant's voting stock held by
non-affiliates of the registrant as of March 4, 1996 was $4,165,361,268.
Number of shares outstanding of registrant's Common Stock as of
March 4, 1996 - 107,929,157
DOCUMENTS INCORPORATED BY REFERENCE
Cooper Industries, Inc. Proxy Statement for the Annual Meeting of Shareholders
to be held on April 30, 1996 (Part I - Item 1, Part II - Items 6, 7 and 8, Part
III - Items 10, 11 and 12 and Part IV - Item 14(a)(1))
-2-
3
PART I
ITEM 1. BUSINESS; ITEM 2. PROPERTIES
GENERAL
The terms "Cooper" or "Company" refer to the registrant, Cooper
Industries, Inc. Cooper was incorporated under the laws of the State of Ohio
on January 8, 1919.
The Company's continuing businesses operate in three business
segments: Electrical Products, Tools & Hardware and Automotive Products. On
June 30, 1995, the Company divested its Petroleum & Industrial Equipment
segment, which was being carried on the Company's books as a discontinued
operation, through an exchange offer with the Company's shareholders. Pursuant
to the exchange offer, the Company distributed 85.5 percent (21,375,000 shares)
of the common stock of its wholly-owned subsidiary Cooper Cameron Corporation
in exchange for 9,500,000 shares of Cooper Common Stock tendered by the
Company's shareholders. On January 1, 1995, Cooper had transferred to Cooper
Cameron the businesses that comprised the Company's former Petroleum &
Industrial Equipment segment at September 30, 1994. The discussion of the
Company's business under Items 1 and 2 hereof includes only the Company's
continuing operations.
Cooper manufactures, markets and sells its products and provides
services throughout the world, operating facilities in 25 countries and
currently employs approximately 40,400 people. On December 31, 1995, the
plants and other facilities used by Cooper throughout the world contained an
aggregate of approximately 30,876,000 square feet of space, of which
approximately 80 percent was owned and 20 percent was leased. The charts on
the next page show the number of employees, square footage of facilities owned
and leased and location of manufacturing facilities for each industry segment.
Cooper believes its facilities are adequate and suitable for its current and
anticipated level of operations. Certain equipment and production facilities
have been financed by industrial revenue or pollution control bonds issued by
local government authorities and are subject to security arrangements customary
in such financings.
-3-
4
Square Footage of
Number and Nature of Facilities Plants and Facilities
------------------------------- ---------------------
Number of
Segment Employees Manufacturing Warehouse Sales Other Owned Leased
------- --------- ------------- --------- ----- ----- ----- ------
Electrical 15,300 45 8 75 2 9,272,000 1,343,000
Products
Tools & 9,400 35 21 8 2 7,485,000 988,000
Hardware
Automotive 15,400 48 14 15 7 7,973,000 3,616,000
Products
Other 300 - - - 1 - 199,000
------- ------ -------- -------- ----- --------- ----------
Total 40,400 128 43 98 12 24,730,000 6,146,000
Manufacturing Plant Locations
Europe
United South United (Other
Segment States Canada Mexico America Kingdom Than UK) Australia Other
------- ------ ------ ------ ------- ------- -------- --------- -----
Electrical 29 2 5 1 3 3 1 1
Products
Tools & 22 1 0 2 1 7 2 0
Hardware
Automotive 32 2 3 1 1 6 1 2
Products
---- ----- ------ ------- ------- ------- ------ -----
Total 83 5 8 4 5 16 4 3
-4-
5
Operations in the United States are conducted by unincorporated divisions
and subsidiaries of the Company, organized by the three business segments.
Activities outside the United States contribute significantly to the revenues
and operating earnings of all segments of Cooper. These activities are
conducted in major commercial countries by wholly-owned subsidiaries and
jointly-owned companies, the management of which is structured through the
Company's three business segments. As a result of these international
operations, sales and distribution networks are maintained throughout most of
the industrialized world. Except as noted below, Cooper believes that there
are generally no substantial differences in the business risks associated with
these international operations compared with domestic activities, although
Cooper is subject to certain political and economic uncertainties encountered
in activities outside the United States, including trade barriers, restrictions
on foreign exchange and currency fluctuations. Specifically, during 1995,
Cooper's operations in Mexico were affected by the economic situation which
followed the December 1994 devaluation of the Mexican currency. In addition,
the Company has been negotiating and finalizing several joint ventures with
operations in China. Investments in China are subject to greater risks related
to economic and political uncertainties as compared to most countries where the
Company has operations. Exhibit 21.0 is a list of Cooper's subsidiaries.
Data with respect to Cooper's industry segments, domestic and
international operations and export sales are contained in Note 15 of the Notes
to Consolidated Financial Statements, incorporated herein by reference to pages
A-29 through A-31 of Appendix A to the Cooper Proxy Statement for the 1996
Annual Meeting of Shareholders. A discussion of acquisitions and divestitures
is included in Notes 2, 3, 17 and 18 of the Notes to Consolidated Financial
Statements, incorporated herein by reference to pages A-16 through A-17 and
A-32 through A-34 of Appendix A to the Cooper Proxy Statement for the 1996
Annual Meeting of Shareholders.
With its three business segments, Cooper serves four major markets:
industrial, construction, electrical power and automotive. Markets for
Cooper's products and services are worldwide, though the United States is the
largest market. Within the United States, there is no material geographic
concentration by state or region. Most operating units experience significant
competition from both larger and smaller companies with the key competitive
factors being price, quality, brand name and availability. Cooper believes
that it is among the leading manufacturers in the world of primary electrical
power equipment; hazardous duty electrical equipment; lighting fixtures and
fuses; nonpower hand tools; industrial power tools; chain products; drapery
hardware and window coverings; automotive and heavy-duty brake products;
automotive lamps, wire sets, spark plugs, wiper blades, steering, suspension,
driveline and temperature control products; and aviation ignition components.
Cooper's research and development activities are for purposes of improving
existing products and services and originating new products. During 1995,
approximately $32.1 million was spent for research and development activities
as compared with approximately $26.3 million in 1994 and $29.8 million in 1993.
Cooper obtains and holds patents on products and designs in the United States
and many foreign countries where operations are conducted. Although in the
aggregate Cooper's patents are important in the operation of its businesses,
the loss by expiration or otherwise of any one patent or group of patents would
not materially affect its business.
Cooper does not presently anticipate that compliance with currently
applicable environmental regulations and controls will significantly change its
competitive position, capital spending or earnings during 1996. Cooper has
been a party to
-5-
6
administrative and legal proceedings with governmental agencies that have
arisen under statutory provisions regulating the discharge or potential
discharge of material into the environment. Orders and decrees consented to by
Cooper have contained agreed-upon timetables for fulfilling reporting or
remediation obligations or maintaining specified air and water discharge levels
in connection with permits for the operations of various plants. Cooper
believes it is in compliance with the orders and decrees and such compliance is
not material to the business or financial condition of Cooper. For additional
information concerning accruals for environmental liabilities of the Company,
see Notes 1 and 7 of the Notes to Consolidated Financial Statements,
incorporated herein by reference to pages A-15 through A-16 and A-19 through
A-21 of Appendix A to the Cooper Proxy Statement for the 1996 Annual Meeting of
Shareholders.
Approximately 58 percent of the United States hourly production work force
of Cooper is employed in 70 manufacturing facilities, distribution centers and
warehouses not covered by labor agreements. Numerous agreements covering
approximately 42 percent of the hourly production employees exist with 33
bargaining units at 34 operations in the United States and with various unions
at 42 international operations. During 1995, new agreements were concluded
covering hourly production employees at five operations in the United States.
Cooper believes its current relations with employees are excellent.
Sales backlog at December 31, 1995 was approximately $442 million (all of
which is for delivery during 1996) compared with backlog of approximately $350
million at December 31, 1994.
The following describes the business conducted by each of the Company's
business segments. Additional information regarding the products, markets and
distribution methods for each segment is set forth on the table at the end of
this Item. Information concerning market conditions, as well as information
concerning revenues, earnings and results of operations for each segment is
incorporated herein by reference to pages A-1 through A-9 of Appendix A to the
Cooper Proxy Statement for the 1996 Annual Meeting of Shareholders.
Electrical Products
The Electrical Products segment manufactures, markets and sells electrical
and circuit protection products, including fittings, enclosures, plugs,
receptacles, lighting fixtures and fuses, for use in residential, commercial
and industrial construction, maintenance and repair applications. The segment
also manufactures, markets and sells products for use by utilities and
industries for primary electrical power transmission and distribution,
including distribution switchgear, transformers, transformer terminations and
accessories, capacitors, voltage regulators, surge arrestors, pole-line
hardware and other related power systems components.
The principal raw material requirements include copper, tin, lead,
plastics, insulating materials, pig iron, aluminum ingots, steel, aluminum and
brass. These raw materials are available from and supplied by numerous sources
located in the United States and abroad.
Demand for Electrical Products follows general economic conditions and is
generally sensitive to activity in the construction market, industrial
production levels and spending by utilities for replacements, expansions and
efficiency improvements. The segment's product lines are marketed directly to
original
-6-
7
equipment manufacturers and utilities and through major distributor chains and
thousands of independent distributors to a variety of end users.
Tools & Hardware
The Tools & Hardware segment manufactures, markets and sells hand tools
and chain and clamp products for industrial, construction and consumer markets;
air-powered and electric tools for general industry, primarily automotive and
aerospace manufacturers; and drapery hardware and custom window coverings for
residential and commercial window treatment markets.
The principal raw material requirements include rolled coiled steel, wood,
plastic pellets, flat and bar stock steel, brass, copper, tin plate,
fiberglass, greige goods, aluminum, iron castings and plastic sheet. These
materials are available from and supplied by numerous sources in the United
States and abroad.
Historically, demand for nonpowered hand tools, chain and clamp products
and industrial power tools has been relatively stable and is driven by
employment levels and industrial activity in major industrial countries.
Demand for drapery hardware and window coverings is influenced by housing
starts, turnover of existing housing units and consumer disposable income. The
segment's products are sold by a company salesforce, independent distributors
and retailers.
Automotive Products
The Automotive Products segment manufactures, markets and sells automotive
and heavy-duty brakes, automotive lights, wire and cable, spark plugs,
windshield wipers, steering, suspension, driveline and temperature control
products and other products for the automotive aftermarket; brake products,
lights, spark plugs, ignition coils and windshield wipers for original
equipment manufacturers; and aviation ignition components.
The principal raw material requirements include steel, iron, nickel,
glass, steel wool, fiberglass, carbon, aluminum, aluminum oxide, zinc, copper,
rubber, plastic and chemicals. The materials are available from and supplied
by numerous sources in the United States and abroad.
Demand for automotive aftermarket products has been relatively stable and
is driven by the age and number of vehicles on the road and the number of
vehicle miles driven. Weather conditions may affect consumer demand on a year-
to-year basis for certain replacement parts such as wiper blades. Demand for
automotive products sold to original equipment manufacturers is driven by the
number of vehicles produced. The segment's products are sold through
distributors and wholesalers to aftermarket outlets and directly to original
equipment manufacturers and retailers.
-7-
8
Products, Markets and Distribution Methods by Segment
ELECTRICAL PRODUCTS TOOLS & HARDWARE
MAJOR PRODUCTS AND BRANDS MAJOR PRODUCTS AND BRANDS
ARROW HART wiring devices. APEX screwdriver bits, impact sockets and
universal joints.
BUSS and EDISON fuses and fuse accessories. BUCKEYE, DGD, DOTCO and GARDNER-DENVER power
tools and assembly systems.
CROUSE-HINDS and CEAG explosion-proof and CAMPBELL chain and fittings.
nonexplosion-proof fittings, enclosures,
industrial lighting, and plugs and receptacles.
CROUSE-HINDS, CEAG, LUMARK, MCGRAW-EDISON and CRESCENT, DIAMOND and UTICA pliers and
EDISON indoor and outdoor lighting fixtures. wrenches.
FAIL-SAFE vandal-resistant lighting fixtures. DIAMOND farrier tools and horseshoes.
HALO recessed and track lighting fixtures. EREM precision cutters and tweezers.
KYLE distribution switchgear. KIRSCH drapery hardware and custom window
coverings.
MCGRAW-EDISON distribution transformers, LUFKIN measuring tapes.
capacitors, voltage regulators, surge
arresters, pole-line hardware and related
products.
METALUX fluorescent lighting fixtures. NICHOLSON files and saws.
RTE power and distribution transformers, PLUMB hammers.
transformer terminations and accessories.
UNGAR and WELLER soldering equipment.
WELLER torches.
WISS and H.K. PORTER cutting products.
XCELITE screwdrivers and nutdrivers.
AUTOMOTIVE PRODUCTS
MAJOR PRODUCTS AND BRANDS
ABEX, LEE, GIBSON and WAGNER brake
components, including friction material,
hydraulics, drums, rotors and hardware.
ACI electric motors.
ANCO and CHAMPION windshield wiper
products.
CHAMPION spark plugs and igniters.
EVERCO and MURRAY heating and air
conditioning products.
GENERAL DRIVESHAFT driveline products.
MOOG steering and suspension components.
POWERPATH and BELDEN automotive wire and
cable.
PRECISION universal joints.
WAGNER and ZANXX lighting products.
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