ITEM 1. BUSINESS - ---------------- General -------
Crown Andersen Inc. (the "Company" or the "Registrant"), through its subsidiaries, designs, manufactures, sells and installs a wide range of industrial air pollution control and air handling systems, and a complete line of medical, chemical and industrial waste treatment equipment and systems. The Company is a Delaware corporation formed in October 1985 to acquire and own all of the stock of Andersen 2000 Inc. (hereinafter referred to as "Andersen") and Crown Rotational Molded Products, Inc. (hereinafter referred to as "Crown"). The Company served as a holding company for these two subsidiaries starting in January 1986. At that time, it issued shares of its Common Stock to the shareholders of Andersen and Crown in exchange for their shares of Andersen and Crown Common Stock, respectively. Late in fiscal year 1994, the Company sold the assets of Crown Rotational Molded Products, Inc. and Roanoke Industries, Inc. (collectively "plastics") and is thus no longer involved in plastics molding or high integrity tanks and containers.
Andersen is engaged in the design, manufacture, sale, and installation of specialized industrial pollution control equipment and systems and of medical, chemical and industrial waste treatment equipment and systems, heat exchanger and boiler systems, and industrial fans and blowers. Additionally, Andersen's wholly-owned subsidiary, Montair Andersen bv in Sevenum, Holland ("Montair Andersen") manufactures and installs industrial equipment similar to the Andersen equipment for the European, African, Middle Eastern and Far Eastern markets.
As used hereinafter, unless otherwise indicated, the term "Company" refers to Crown Andersen Inc. and its subsidiaries, the term "Andersen" refers to Andersen 2000 Inc. and Montair Andersen bv.
Business and Products ---------------------
Andersen began operations in 1971 as a manufacturer of particle sizing instrumentation used primarily in the air pollution control field. In fiscal 1975, Andersen acquired a limited industrial air pollution control equipment line. During fiscal 1978, Andersen sold the particle sizing instrumentation segment of its business and expanded its industrial pollution control equipment segment. In fiscal 1982, Andersen embarked on a program designed to expand its industrial manufacturing capabilities into related product areas. As a result of that program, Andersen began to manufacture and sell heavy duty industrial fans and condensing heat exchange equipment in fiscal 1983. In fiscal 1984, Andersen began to design, manufacture, and sell chemical and industrial waste incineration systems as well as spray dryers and began to offer contract chemical and mechanical engineering services. In fiscal 1990, Andersen began offering turnkey medical waste incineration plants to its customers and expanded that business in 1991 and 1992. In fiscal 1994, Andersen expanded its incineration product line to include a new line of solid waste incinerators. Materials handling products were also added for waste processing. In fiscal 1996, Andersen purchased from a former competitor the technology to manufacture a line of small vertical incinerators, controlled air incinerators and rotary kiln incinerators.
Andersen's pollution control systems include high efficiency filtration systems, wet scrubbers for particulate and gaseous emission collection, sulfur dioxide removal systems for oil and coal-fired steam boilers and steam generators, odor control systems, gas coolers and condensers, mechanical collectors for product recovery, industrial water and waste water treatment systems, spray dryer systems to produce dry powders from waste liquids which are produced in gas treating systems, heavy duty industrial fans and blowers used primarily in high pressure and alloy steel applications in industrial plants, and heat recovery systems which allow heat recovery from gas streams which previously could not utilize heat recovery
equipment because of their dirty or corrosive nature. These heat recovery systems are used primarily by the chemical industries and food processing industries.
Andersen's chemical and industrial waste treatment systems include thermal oxidation systems (incinerators), waste liquid fired boilers, and chemical treatment systems for which the company furnishes both engineering designs and equipment as well as turnkey installation services. All of Andersen's medical waste processing systems are based on thermal oxidation.
Montair Andersen designs, manufactures and sells industrial pollution control systems, heat exchangers, incineration systems, and small animal isolators and glove boxes for radioactive and chemically active materials handling. The small animal isolators are used for animals such as chickens and guinea pigs by medical research facilities, pharmaceutical research facilities and animal husbandry facilities. The radioactive and chemically active materials handling glove boxes are used by nuclear fuels processing facilities, nuclear research facilities, and medical isotope manufacturing operations. These products are sold to both industrial plants and research facilities. Montair Andersen also builds specialized industrial machinery for the electronics, aerospace and chemical process industries and in 1992 began the manufacture of incinerators as well. The Montair Andersen product line now includes all of the same incineration systems as Andersen.
Sales and Distribution ----------------------
In general, Andersen's products are marketed to various industrial manufacturing concerns in the United States by independent sales representatives in exclusive territories. Sales of Andersen products are made in all regions of the country, with no one region serving as a dominant market for Andersen products. International sales result from the efforts of Andersen and Montair Andersen employees, independent sales representatives in many countries, and by licensee companies in those countries where the technology has been licensed. Montair now uses sales agents in most countries which it serves.
Facilities And Manufacturing ----------------------------
The corporate offices of the Company are located in a building owned by Andersen in Peachtree City, Georgia. The corporate offices occupy approximately 2,000 square feet of the building, and the Company makes no payments to Andersen for the use of this space. The manufacturing facilities operated by each of the subsidiary companies are described below.
Andersen's manufacturing operations in North America are conducted in Peachtree City, Georgia. This facility, which is owned by Andersen, has 29,000 square feet of inside manufacturing and office space and 30,000 square feet of outdoor assembly area. This facility is equipped for heavy steel fabrication and is located on a three acre tract of property in an industrial park. Andersen purchased an adjacent property in Peachtree City in 1992 with a 5,000 square feet office building on one acre of property. In 1996, Andersen purchased another adjacent property with a 3,600 square feet manufacturing building on 1.5 acres of land.
Andersen, through Montair Andersen b.v., now owns its manufacturing facility in the Netherlands, which is larger and more modern than the one which it operates in Peachtree City, Georgia. This plant contains approximately 40,000 square feet of space and is located on 4.8 acres of industrial property in Sevenum, The Netherlands. This facility was certified under the new world standard ISO-9001. Certification was attained in fiscal year 1994.
Manufacturing equipment in the Peachtree City location and in the Sevenum, The Netherlands location is owned by Andersen and Montair Andersen, respectively. With the exception of extremely heavy plate fabrication (over 1/2" thick), these two facilities are capable of manufacturing all of the products offered by Andersen and Montair Andersen. Where use of a subcontract manufacturing facility is financially more attractive than manufacturing in company owned facilities, a number of subcontractors are used. Andersen has adopted the
practice of purchasing from more than one of these suppliers on a routine basis in an effort to insure adequate continuing sources of supply for subcontracted items in the future. The Company has trained a number of employees in inspection procedures and in quality control to ensure that these products are properly manufactured before shipment by the subcontractors.
Most of the products sold by Andersen must be custom engineered for a specific application. For this reason, Andersen normally does not maintain finished product in inventory. However, during fiscal 1996, Andersen purchased certain inventory from a former competitor. Included in this purchase were certain finished goods that are available for sale as a completed unit. Andersen inventories some raw materials which can be purchased more economically in large quantities, particularly some of the high alloy stainless steels. Andersen believes that its facilities are adequate for its current and anticipated foreseeable manufacturing needs.
Foreign Operations And Export Sales -----------------------------------
Montair Andersen manufactures and ships products to all European countries and to some countries in the Middle East, Africa and Asia. Montair Andersen also exports small animal isolators and some of its glove boxes to the United States and Canada for sale by Andersen.
Andersen uses subcontract manufacturers in some foreign countries when sales are made into those countries. In particular, it is common for Andersen to use Canadian subcontract manufacturers for sales in Canada. Most of Andersen's foreign sales in 1998, however, were manufactured in Andersen's plant in the United States.
Foreign sales in fiscal 1998, 1997, and 1996 accounted for approximately 62%, 86% and 81%, respectively, of the Company's total revenues from continuing operations. Foreign sales for fiscal 1998, 1997 and 1996 totaled approximately $8.9 million, $19.9 million, $17.8 million, respectively.
Licensing ---------
Andersen has licensed the manufacture of its products in Japan and India. During fiscal 1976, Andersen licensed a Japanese firm to manufacture and sell HEAF(R) and CHEAF(R) gas filtration products in the Far East. Andersen was paid an initial fee of $70,000 and then established a royalty arrangement for future sales. The royalty arrangement included a minimum royalty payment on an annual basis. In late fiscal 1977, Andersen negotiated a transfer of its license to a second Japanese firm. The second Japanese firm was active in sales of the HEAF(R) and CHEAF(R) equipment and installed more than 300 systems in Japan under license from Andersen. This agreement expired in late 1991, and the Japanese licensee agreed with Andersen to maintain a formal sales cooperation arrangement in Japan and Korea whereby the Japanese licensee is still allowed use of the HEAF(R) and CHEAF(R) technologies in Japan and Korea in exchange for providing sales leads to Andersen for all other Far Eastern countries.
In fiscal 1986, Andersen negotiated a license agreement with Paramount Pollution Control Pvt Ltd in Baroda, India. Andersen licensed manufacture of all of its product lines, including those manufactured by Montair Andersen, to the Indian firm. This agreement called for an initial payment of $85,000 to Andersen for initial technical exchange and training, followed by royalties calculated as a percentage of product sales in India in the future. An extension of this agreement was signed in 1997 for five years.
Competition -----------
In the air pollution control field, Andersen competes with three or four companies of similar size which have similar product lines. In 21 years of direct competition with these firms, Company management has determined that these competitors do not have the engineering capabilities that Andersen does, and most of these companies do not routinely offer auxiliary systems and installation services with their quotations. Andersen considers the ability to
furnish auxiliary systems and installation as an advantage over its competition. There are some competitors in the field which are somewhat larger than Andersen and which may have greater financial resources. However, these larger companies tend to concentrate on large air pollution control projects associated with utility plant construction or with large municipal projects. As a result, they are not routine competitors with Andersen since Andersen does not compete in these fields.
In medical, chemical and industrial waste incineration, Andersen competes with a limited number of companies which have greater financial resources. These waste incineration systems, however, are purchased primarily on the basis of advanced design features rather than strictly on price. As a result, Andersen believes that it can be successful in capturing an increasing market share in the coming years due to its technological capabilities.
With the possible exceptions of sulfur dioxide removal scrubbing systems for small industrial boilers, scrubbing equipment for medical, chemical and industrial waste incinerators, and rotary kiln incinerators for chemical and hazardous waste, Andersen does not consider itself the dominant supplier in those industries in which it competes. In industrial boiler sulfur dioxide removal systems and in scrubbing systems for waste incinerators, Andersen believes, based on industry publications, published market surveys and trade association records, that it currently holds a 30% or greater market share in the United States. Internationally Andersen believes it has captured a 15-20% market share in rotary kiln incinerators for chemical and hazardous wastes.
In the field of condensing heat exchangers, Andersen frequently competes with two or three other manufacturers offering somewhat different products for the same purpose. In most of these cases, price is the determining factor. Demand for this product line has not been high in recent years due to relatively low energy costs in industrialized countries.
Principal Customers -------------------
During 1998 one customer accounted for approximately 26% of the Company's consolidated revenues during fiscal 1998. It is the opinion of management that the loss of such customer would not have a material adverse effect on the operations of the Company. Such business is not normally repetitive and, therefore, is not dependent upon any single customer or individual group of customers.
Backlog -------
The Company's consolidated backlog of firm orders as of the dates set forth below were as follows:
September 30, 1998 - $10,744,615 September 30, 1997 - $ 9,171,100 September 30, 1996 - $12,299,320 September 30, 1995 - $10,952,000
Prior to 1991, the entire backlog of firm orders as of the end of any fiscal year was manufactured, shipped and recognized during the following fiscal year. In late fiscal 1991, the pollution control systems segment of the business began receiving orders requiring in excess of two years to complete.
Andersen and Montair Andersen products are normally built to order and thus are not inventoried. The reduction in backlog from 1996 to 1997 was due to timing in receipt of new orders.
Raw Materials -------------
Since the beginning of fiscal 1990, Andersen has encountered no shortages of alloys used to fabricate its products. Andersen inventories high alloy steels when substantial discounts can be negotiated by purchasing large quantities and to avoid delays in fabrication and shipment caused by materials availability problems. Beyond this, however, Andersen generally purchases raw materials after orders are received for those products which will require those raw materials.
Patents And Trademarks ----------------------
Andersen owns domestic and foreign patents on its HEAF(R) and CHEAF(R) gas filtration systems, its sulfur dioxide removal scrubbing systems, a chemical waste regeneration process for the sulfur dioxide removal system, an incineration process, and improvements to these product lines which have occurred in recent years. Andersen was granted patent protection on its combination spray dryer-scrubber system for air pollution control on incinerators in 1991. The oldest of the patents expired in 1991 and the newest expires in 17 years. Andersen holds trademarks on the HEAF(R) and CHEAF(R) systems, the SUBDEW(R) condensing heat exchanger, and the ANDERSEN(R) name. The trademarks generally expire 20 years from the date of registration but may be renewed for one or more additional 20 year periods when they first expire.
While Andersen considers its patents to be valuable assets which sometimes provide a competitive advantage in the marketplace, Andersen does not believe that the loss of patent protection on any of its products as a result of the challenge to the validity of such patents would have a material impact on Andersen's revenues and earnings. In countries such as Germany and Japan, the patents on Andersen's products are considered to be substantially more important than they are on the same products in the United States. For this reason, Andersen works closely with its licensees to insure that any new patent applications anticipate potential challenges to their validity in the future. The validity of Andersen's patents on any of its products has never been challenged, either in the United States or in foreign countries. Although Andersen is not aware of any basis upon which such patents might be challenged, there is no assurance that proceedings challenging these patents will not be instituted in the future.
The Company examines every product which is developed to determine its patentability. If the equipment or process is determined to be patentable by the Company, a patent application is filed, not only in the United States but in those foreign countries where the product is considered saleable. The patents are particularly valuable when licensing of manufacturers in foreign countries is considered.
Product Warranties ------------------
In connection with most contracts for manufacture and sale of Andersen equipment, the Company warrants the equipment manufactured to be free from defects in material and workmanship under normal use and service for a period of eighteen months after shipment, or one year after completion of erection, or one year after initial operation, whichever occurs first. Andersen's obligation is generally limited to the repair or replacement of the defective parts. All equipment not manufactured by Andersen carries only such warranty, if any, as given by the manufacturer. In addition, Andersen sometimes provides performance guarantees for equipment and systems which it furnishes. Each proposed application is carefully evaluated for its potential risk before such guarantees are offered to the customer. Warranty and performance guarantee related expenses are recognized as they are incurred. As of September 30, 1998, Andersen has established a $220,000 reserve for future warranty repairs.
Research And Development ------------------------
Andersen maintains a small development laboratory in its plant. Some of the research and development activities done by Andersen are conducted in Andersen's customers' plants utilizing test equipment and systems designed and supplied by Andersen. The results of such tests enable Andersen to provide the customer with a guaranteed performance system if the development work is successful. The customer is typically charged for rental of Andersen's equipment during such activities, and the customer is allowed to use, in its own plant, any developments which result from such testing. Andersen, however, reserves all rights to patents or other proprietary benefits which might result from such tests.
Research and development expenses are expensed in the year incurred. There were no company funded research and development expenses during fiscal years 1998, 1997 and 1996.
Environmental Controls ----------------------
To a large extent, the demand for the Company's products is dependent upon the enforcement of federal, state, and international regulations regarding air pollution, water pollution, and general industrial pollution. There has been a significant increase in enforcement actions related to hazardous waste disposal during the past three years outside the United States. This enforcement action has resulted in a greater demand outside the United States for incineration systems offered by Andersen. This increased enforcement activity should benefit both Andersen and Montair in fiscal 1999. On the other hand, any relaxation of environmental laws and regulations by the federal, state, or international governments or any delay in the implementation of such laws or regulations could have an adverse effect on the Company's operations.
Employees ---------
The Company and its subsidiaries employed a total of 80 individuals as of September 30, 1998, including 9 officers, 54 technical and manufacturing people, and 17 others engaged in financial, sales, and secretarial activities. Approximately 54% of these people are employed at the Peachtree City, Georgia facility by either Andersen or by the Company, and 46% are employed at Montair Andersen's Sevenum, The Netherlands plant.
Seasonal Nature of Business ---------------------------
Andersen's business has never been seasonal.
ITEM 2.
ITEM 2. PROPERTIES - -------------------
Andersen owns six acres of land in Peachtree City, Georgia, with a 20 year old, 29,000 square feet office and manufacturing facility, a separate 5,000 square feet office building, and a separate 3,600 square feet storage building located on the land. Andersen owns all of the office furniture and equipment, all of the manufacturing equipment, and all of the testing equipment at this facility. Andersen also owns an 80 acre vacant land site in a remote area of Kern County, California. Andersen processed permit requests through various state and county agencies in California in fiscal 1982 to enable use of this property for solid waste disposal from Andersen's scrubber liquid waste regeneration process. Because of the subsequent slowdown in the oil fields, Andersen decided to abandon the permit application. Andersen is now interested in selling the California property.
Montair Andersen owns its facility in Sevenum, The Netherlands, which includes 40,000 square feet of office and manufacturing space located on 4.8 acres of land. Montair owns all of its manufacturing and office equipment in Sevenum.
The Company's (through a defunct subsidiary - Strutherss Thermo-Flood Corp.) properties in Winfield, Kansas consisted of six buildings on 13 acres of land, all of which were owned
under capital leases by Thermo-Flood. These facilities contained approximately 137,400 square feet of manufacturing space and 20,000 square feet of office area. The Company abandoned the Thermo-Flood property in 1992, but received the property back in 1998 upon settlement of litigation. This property is currently leased to unrelated companies, but is also offered for sale.
Management believes that the facilities discussed above are adequate for the current needs of all of the Company's operations for the foreseeable future.
For additional information regarding the Company's property and equipment, see Note 6 to the Notes to Consolidated Financial Statements contained in the Company's 1998 Annual Report.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS - --------------------------
A discussion of the Company's pending and threatened litigation and unasserted claims or assessments is set forth under the caption "Commitments and Contingencies" (Note 12 to the Consolidated Financial Statements) in the Company's 1998 Annual Report. Such discussion is incorporated herein by reference.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - ------------------------------------------------------------
No matters were submitted to a vote of the Company's shareholders, through the solicitation of proxies or otherwise, during the fourth quarter of fiscal 1998.
ITEM 4(A). EXECUTIVE OFFICERS OF THE REGISTRANT - ------------------------------------------------
Set forth below in accordance with General Instruction G(3) to Form 10-K and Instruction 3 to Item 401(b) of Regulation S-K is information as of December 16, 1998 regarding the executive officers (including executive officers who are also directors) of the Company.
The Company has no paid officers. All officers of the Company are also officers of one or more subsidiaries and are paid by such subsidiaries. See "Item 11. Executive Compensation."
The executive officers of the Company and its subsidiaries are elected annually by the respective Boards of Directors and serve at the discretion of such Boards.
PART II -------
ITEM 5.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS - --------------------------------------------------------------
Information relating to the market for, holders of and dividends paid on the Company's common stock is set forth under the caption "Common Stock Information" in the Company's 1998 Annual Report. Such information is incorporated herein by reference. The 1998 Annual Report is filed as Exhibit 13 to this report.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA - --------------------------------
Selected consolidated financial data for the Company for each year of the five year period ended September 30, 1998 are set forth under the caption "Selected Financial Data" in the 1998 Annual Report referred to in Item 5 above. Such financial data are incorporated herein by reference.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION - ------------------------------------------------------------------------
A discussion of the Company's financial condition and results of operations is set forth under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the 1998 Annual Report referred to in Item 5 above. Such
discussion is incorporated herein by reference.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - ----------------------------------------------------
The consolidated balance sheets of the Company as of September 30, 1998 and 1997 and the Company's consolidated statements of income, stockholders' equity and cash flows for each of the three years in the period ended September 30, 1998, together with the related notes thereto and the report of independent certified public accountants thereon dated December 12, 1998, are set forth in the 1998 Annual Report referred to in Item 5 above. Such consolidated financial statements, notes and reports are incorporated herein by reference. The Company is not required to furnish the supplementary financial information specified by Item 302 of Regulation S-K.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE - --------------------------------------------------------------------
No independent certified public accountant of the Company has, during the two fiscal years ended September 30, 1998 or subsequent thereto, resigned, indicated any intent to resign or been dismissed as the independent certified public accountants of the Company. There have been no disagreements between the Company and its independent certified public accountants.
PART III --------
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT - ------------------------------------------------------------
Information relating to the directors of the Company is set forth under the caption "Election of Directors-Nominees" in the Company's Proxy Statement for its 1999 Annual Meeting of Stockholders to be held on February 10, 1999. Such information is incorporated herein by reference. Information relating to the executive officers of the Company is, pursuant to Instruction 3 of Item 401(b) of Regulation S-K and General Instruction G(3) of Form 10-K, set forth as Part I, Item 4(A) of this report under the caption "Executive Officers of the Registrant."
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION - --------------------------------
Information relating to management compensation is set forth under the captions "Election of Directors - Director Compensation" and "Election of Directors - Executive Compensation" in the Proxy Statement referred to in Item 10 above. Such information is incorporated herein by reference.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT - ------------------------------------------------------------------------
Information relating to ownership of the Company's $0.10 par value common stock as of January 1, 1999 by (i) any person or group known to the Company to be the beneficial owner of more than 5% of the Company's outstanding common stock, (ii) each nominee for election as a director of the Company at the Company's 1999 Annual Meeting of Stockholders, and (iii) all directors and officers of the Company as a group is set forth under the captions "Voting - Principal Stockholders" and "Election of Directors - Nominees" in the Proxy Statement referred to in Item 10 above. Such information is incorporated herein by reference.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS - --------------------------------------------------------
Information regarding certain transactions between the Company, its affiliates and certain other persons is set forth under the caption "Election of Directors - Certain Relationships and Related Transactions" in the Company's Proxy Statement referred to in Item 10 above. Such information 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) Financial Statements.
The following consolidated financial statements are incorporated in Part II, Item 8 of this report from the Company's 1998 Annual Report referred to in Item 5 above:
Consolidated Balance Sheets as of September 30, 1998 and 1997;
Consolidated Statements of Income for the three fiscal years ended September 30, 1998;
Consolidated Statements of Stockholders' Equity for the three fiscal years ended September 30, 1998;
Consolidated Statements of Cash Flows for the three fiscal years ended September 30, 1998;
Summary of Accounting Policies;
Notes to Consolidated Financial Statements;
Report of Independent Certified Public Accountants.
(2) Financial Statement Schedules.
The following financial statement schedules are set forth on pages 17 and 18 of this report. All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission have been omitted because such schedules are not required under the related instructions or are inapplicable or because the
information required is included in the consolidated financial statements or notes thereto. See the Index to Financial Statement Schedules on page 16 hereof.
Report of Independent Certified Public Accountants on Financial Statement Schedules. Schedule II - Valuation and Qualifying Accounts and Reserves
(3) Exhibits.
The exhibits listed on the following pages are filed as part of or are incorporated by reference in this report. Where such filing is made by incorporation by reference to a previously filed registration statement or report, such registration statement or report is identified in parentheses.
Exhibit No. Description - ----------- ----------------------------------------------------------------- 13(a) Certificate of Incorporation of the Company (Exhibit 3(a) to the Company's Registration Statement on Form S-4, No. 33-684 (the "Form S-4 Registration Statement") 3(b) Certificate of Amendment of the Certificate of Incorporation of the Company filed with the Secretary of State of Delaware on March 18, 1987 (Exhibit 3(b) to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1987) 3(c) Bylaws of the Company (Exhibit 3(b) to the Form S-4 Registration Statement) 4 Common Stock Certificate (Exhibit 4(a) to the Form S-4 Registration Statement) 10(a) Agreement and Plan of Reorganization dated as of September 30, 1985 among the Company, Andersen and Crown (Exhibit 2 to the Form S-4 Registration Statement) 10(b) 1985 Incentive Stock Option Plan and related form of Option Agreement (Exhibit 10(a) to the Form S-4 Registration Statement) 10(c) First 1987 Amendment to the 1985 Incentive Stock Option Plan (Exhibit 10(c) to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1987) 10(d) Executive Option Plan (Exhibit 10(d) to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1987) 10(e) Key Employee Stock Option Plan (Exhibit 10(e) to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1987) 10(f) 1985 Directors Stock Warrant Plan and related form of Stock Purchase Warrant (Exhibit 10(b) to the Form S-4 Registration Statement) 10(g) Cash Incentive Program For Key Employees (Exhibit 10(g) to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1987) 10(h) Employment Agreement dated October 1, 1992 between Jack D. Brady and the Company 10(i) Employment Agreement dated October 1, 1992 between Crown and Jack C. Hendricks 10(j) Lease between the City of Winfield, Kansas and the City of Arkansas City, Kansas, as landlord, and Thermo-Flood, as tenant, dated as of October 1, 1980 and related documents regarding industrial revenue bonds issued for Thermo-Flood's properties in Winfield, Kansas (Exhibit 10(p) to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1988) 10(k) Revolving Credit Agreement dated as of July 25, 1989 among the Company, Andersen, Crown, Thermo-Flood and The Citizens and Southern National Bank, together with the related Pledge Agreement, Security Agreement, Special Revolving Credit Note and Working Capital Revolving Credit Note (Exhibit 10(s) to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1989) 10(l) Purchase Agreement dated April 30, 1991 between the Company and Josef A.C. van Stratum for the acquisition by the Company of the remaining 19% of Montair Andersen stock (Exhibit 2 to the Company's Report on Form 8-K dated April 30, 1991) 10(m) Agreement for the Purchase of Stock dated as of September 13, 1991 among George T. Condy, Lawrence E. Wiegman, Kenneth Kirby and Crown for the acquisition of the stock of Roanoke by Crown (Exhibit 2 to the Company's Report on Form 8-K dated September 13, 1991) 10(n) Revolving Credit Agreement Amendment dated as of March 31, 1992 among the Company, Andersen, Crown and Thermo-Flood and NationsBank of Georgia, N.A. (formerly known as The Citizens and Southern National Bank)- (See Exhibit 10p) 10(o) Second Amendment to Revolving Credit Agreement among the Company, Andersen, Crown, Thermo-Flood and NationsBank of Georgia, N.A. (Formerly known as The Citizens and Southern National Bank) -(See Exhibit 10p) 10(p) Loan agreement dated as of March 31, 1993 among the Company, Andersen and Crown and NationsBank of Georgia N.A. (Exhibit 10(u) to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1993) 10(q) Agreement for Sale of Roanoke Industries, Inc. assets, dated July 19, 1994 10(r) Agreement for Sale of Crown Rotational Molded Products, Inc. assets, dated July 19, 1994 (Exhibit A to the Company's Notice of Special Meeting and Proxy Statement 1994) 10(s) Asset Purchase Agreement dated December 21, 1995 between the Cleaver-Brooks Division of Aqua-Chem and Andersen 2000 Inc. filed with Form 10Q for quarter ended December 31, 1995 10(t) Commercial Loan Agreement, General Security Agreement, Commercial Promissory Note, and Revolving Note dated June 28, 1996 between South Trust Bank of Georgia, N.A. and Crown Andersen Inc. and Andersen 2000 Inc. filed with Form 10Q for the quarter ended June 30, 1996. 10(u) Loan Documents Modification Agreement dated February 28, 1997 between Crown Andersen Inc., Andersen 2000 Inc., and SouthTrust Bank of Georgia, N.A., filed with Form 10Q for the quarter ended March 31, 1997. 10(v) 1998 Directors Warrant Plan 10(w) 1998 Incentive Stock Option Plan 10(x) Loan Documents Modification Agreement dated February 21, 1998 and March 29, 1998 between Crown Andersen Inc., Andersen 2000 Inc and SouthTrust Bank of Georgia N.A., filed with Form 10Q for quarter ended March 31, 1998. 13* 1998 Annual Report - Filed herewith 21 Subsidiaries - Filed herewith 27 Financial Data Schedule - Filed herewith *Portions of the Company's 1998 Annual Report, as indicated in this Annual Report on Form 10-K, are incorporated herein by reference. Other than as so noted herein, the 1998 Annual Report is furnished to the Commission solely for its information and is not deemed to be "filed" with the Commission or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the fiscal quarter ended September 30, 1998.
(c) Exhibits:
See Item 14 (a)(3) above.
(d) Financial Statement Schedules:
See Item 14 (a)(2) above.
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.
CROWN ANDERSEN INC. ------------------- (Registrant)
Date: December 15, 1998 By: /s/Jack D. Brady --------------------------------- Jack D. Brady, 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 and on the dates indicated:
CROWN ANDERSEN INC. INDEX TO FINANCIAL STATEMENT SCHEDULES
Page ----
Report of Independent Certified Public Accountants on Financial Statement Schedules 17
Schedule Schedule No. -------- ------------
Valuation and Qualifying Accounts and Reserves II 18
All other schedules have been omitted because they are either not required, not applicable, or the information has otherwise been supplied.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors and Stockholders of Crown Andersen Inc. Peachtree City, Georgia
The audits referred to in our report dated December 11, 1998, relating to the consolidated financial statements of Crown Andersen Inc. and Subsidiaries, which is incorporated in Item 8 of the Form 10-K by reference to the Annual Report to Stockholders for the year ended September 30, 1998, included the audit of the financial statement schedule listed in the accompanying index. This financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement schedule based on our audits.
In our opinion, such financial statement schedule presents fairly, in all material respects, the information set forth therein.
BDO SEIDMAN, LLP
Atlanta, Georgia December 11, 1998
SCHEDULE II ----------- CROWN ANDERSEN INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS AND RESERVES FOR THE YEARS ENDED SEPTEMBER 30, 1998, 1997 AND 1996 =====================================================
CROWN ANDERSEN INC. INDEX TO EXHIBITS -----------------
*Portions of the Company's 1998 Annual Report, as indicated in this Annual Report on Form 10-K, are incorporated herein by reference. Other than as so noted herein, the 1998 Annual Report is furnished to the Commission solely for its information and is not deemed to be "filed" with the Commission or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934.
Any exhibit will be furnished upon written request to the Company. There is a charge of $.50 per page to cover expenses for copying and mailing. Requests should be addressed to Milton Emmanuelli, Crown Andersen Inc., 306 Dividend Drive, Peachtree City, Georgia 30269.