ITEM 2. PROPERTIES
The following table sets forth information with respect to the Company's principal facilities. These facilities have approximately 3 million square feet of floor space and, unless otherwise indicated, the Company owns these facilities. The Company believes that its current facilities are suitable and adequate to meet its current and anticipated future needs. Substantially all of the Company's facilities are operating at normal levels based on capacity.
CORPORATE HEADQUARTERS: Milwaukee, Wisconsin (1)
MOTOR VEHICLE PRODUCTS: JANESVILLE PRODUCTS Norwalk, Ohio (3) Old Fort, North Carolina (1) Burns Flat, Oklahoma (1) Janesville, Wisconsin (1) Colne, Great Britain (1) SUROFLEX GMBH Sulzbach-Rosenberg, Germany MILSCO MANUFACTURING COMPANY Milwaukee, Wisconsin Redgranite, Wisconsin Coventry, Great Britain (1)
SACKNER PRODUCTS Grand Rapids, Michigan (2) Statesville, North Carolina (1) Verona, Mississippi (1) Los Angeles, California (1)
INDUSTRIAL PRODUCTS: JACKSONLEA Conover, North Carolina Santa Fe Springs, California (1) Waterbury, Connecticut (1) Cincinnati, Ohio (1) Cambridge, Ontario, Canada (1) Mississauga, Ontario, Canada (1) Mexico City, Mexico (1) Shanghai, Peoples Republic of China (1) JASON COMPONENTS GROUP Hartland, Wisconsin (1) Koller Stamped Components Milwaukee, Wisconsin (1) Assembled Products Wheeling, Illinois (1) Jason Precision Components Shanghai, Peoples Republic of China (1) Shenzhen, Peoples Republic of China (1) Advance Wire Products Addison, Illinois (1) Metalex Libertyville, Illinois (1) OSBORN INTERNATIONAL Cleveland, Ohio Nogales, Sonora, Mexico (1) Burgwald, Germany Chepstow, Great Britain Sexdraga, Sweden Gura Humoruli, Romania Sao Paulo, Brazil (1) Ningbo, Peoples Republic of China (1) Beco das Lages, Portugal (1) Gonesse, France (1) SEALEZE Richmond, Virginia (1) Leased (2) 2 Plants -- Both leased (3) 3 Plants , 1 office -- 3 leased
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
As of December 25, 1998, the Company was not subject to any legal proceedings which management believes would have a material effect on the Company's business or financial condition.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of the Company's security holders during the fourth quarter of the year ended December 25, 1998.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
(a) and (b)
The Company's stock is traded on The NASDAQ Stock Market under the symbol JASN. As of February 15, 1999, there were 233 shareholders of record and approximately 1,000 beneficial shareholders. (c) The Company's current financing agreements contain restrictions on the payment of dividends as more fully described in Note 7 of the Notes to Financial Statements, (which appears under ITEM 8).
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
No cash dividends have been declared on the Company's common stock for the years presented.
(1) Historical amounts have been restated to reflect the reclassification of the power generation businesses as discontinued operations.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On June 5, 1998, the Company completed the sale of its power generation business to a management led group backed by Saw Mill Capital L.L.C. As such, the financial statements and related notes within Item 8 have been reclassified to reflect the power generation business as discontinued operations. Net cash proceeds from the sale approximated $30.1 million; there was no gain or loss on the sale. Sales and operating profit of the power generation businesses for the period ended June 5, 1998 were $61 million and $2.6 million, respectively. Sales of the power generation businesses were $142.7 million and $151.7 million for the years ended December 26, 1997 and December 27, 1996, respectively. Operating profit was $4.2 million and $2.1 million for the years ended December 26, 1997 and December 27, 1996, respectively.
RESULTS OF OPERATIONS 1998 COMPARED TO 1997
Sales for 1998 increased by 15% from $338,666,000 in 1997 to $390,853,000. Sales of motor vehicle products increased by 7% from $198,562,000 to $212,416,000. Sales of industrial products increased by 27% from $140,104,000 to $178,437,000.
The higher motor vehicle products sales were the result of an increase in both the automotive products business and the seating business. Automotive products sales increased by 8%. This increase in sales was due to an increase in sales of the Company's German subsidiary, Suroflex GmbH, as well as an increase in the Company's content per vehicle resulting from improved sales of the Company's Marabond (R) moldable insulation product, plus increased sales of door insert products. These increases more than offset the effect of a less than one percent decrease in North American automobile industry production for 1998 compared to last year. The strike at General Motors had only a minor negative impact on 1998 sales and operating income. The Company's seating products business was up 11% in 1998 compared to the prior year. This was primarily the result of an increase in Harley-Davidson original equipment and parts and accessories business.
Industrial products sales in 1998 were higher due to an increase in sales of finishing products of 44%. Component sales were relatively consistent with the prior year. The Osborn International brush business showed the most significant increase due primarily to the acquisition of Power Brushes Ltd. in March 1998, but increases were also achieved for the JacksonLea buff and compound businesses. Sales for the components business were stronger for assembled products and wire forms but weaker for stampings, video springs and expanded metal.
Operating income increased in 1998 from $23,499,000 in 1997 to $28,301,000. Operating income for the motor vehicle products segment improved from $17,065,000 in 1997 to $20,034,000. This was due primarily to higher volume and margins in the automotive businesses, as mentioned above, including improved volume and operating results from the Company's German subsidiary, Suroflex GmbH. These results more than offset reduced profitability in the seating business due to one time costs incurred in the conversion to cellular manufacturing. Management believes this conversion is necessary to enable the Company to meet an expected increase in customer volume levels in the future.
Operating income for the industrial products segment increased from $8,740,000 in 1997 to $10,845,000. This increase in operating income was primarily a result of an increase in operating income at Osborn International due to the acquisition of Power Brushes Ltd. in March 1998 as well as an increase in operating income for the JacksonLea buff and compound business. This was partially offset by lower operating earnings for the components businesses.
Corporate expenses increased from $2,306,000 in 1997 to $2,578,000. This increase is primarily due to personnel additions. The increase in other income in 1998 is due to an increase in royalty income. Minority interests in subsidiaries decreased in 1998 due to improved operating results at the Company's German subsidiary, Suroflex GmbH.
Interest expense decreased in 1998 from $7,837,000 in 1997 to $6,661,000 which is a result of cash flow received from the sale of the Company's power generation businesses.
The Company's effective income tax rate for 1998 was 39% which is the same as the rate for 1997.
RESULTS OF OPERATIONS 1997 COMPARED TO 1996
Sales for 1997 increased by 16% from $291,676,000 in 1996 to $338,666,000. Sales of motor vehicle products increased by 26% from $157,276,000 to $198,562,000. Sales of industrial products increased by 4% from $134,400,000 to $140,104,000.
The higher motor vehicle products sales was a result of sales increases at both the automotive products business and the seating business. Excluding Suroflex GmbH, the European manufacturer of automotive insulation products acquired in the
fourth quarter of 1996, automotive product sales increased by 26%. This increase in sales was due to an increase in the Company's content per vehicle which was due to improved sales of the Company's Marabond (R) moldable insulation product, plus a 2% increase in U.S. automobile industry production for 1997 compared to 1996. The Company's seating products business was up 20% in 1997 compared to 1996. This was primarily the result of an increase in Harley-Davidson original equipment and parts and accessories business as well as an increase in the Company's content per motorcycle produced.
Industrial products experienced a relatively strong economy and sales in 1997 were up compared to 1996 with the Osborn brush business showing the most significant increase, but increases were also achieved for the JacksonLea buff and compound businesses and the components businesses.
Operating income increased in 1997 from $21,858,000 in 1996 to $23,499,000. Operating income for the motor vehicle products segment improved from $14,481,000 in 1996 to $17,065,000 due primarily to higher volume in both the automotive and seating businesses, as mentioned above.
Operating income for the industrial products segment declined from $9,473,000 in 1996 to $8,740,000. This decrease in operating income was a result of higher material costs combined with price level pressures in the components businesses.
Corporate expenses for 1997 were $2,306,000 compared to $2,096,000 in 1996. This increase was primarily due to an increase in management incentive compensation. Other income for 1997 represents deferred financing cost amortization more than offset by royalty income from foreign licensees of the Company's industrial products plus minority interest in losses at Suroflex GmbH. Other income for 1996 represents deferred financing cost amortization more than offset by royalty income from foreign licensees of the Company's industrial products.
Interest expense increased in 1997 from $7,375,000 in 1996 to $7,837,000 which is a result of working capital requirements and capital expenditures in 1996 and 1997.
The Company's effective income tax rate for 1997 was 39% which was the same as the rate for 1996.
NEW ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income," which established standards for reporting and display of comprehensive income and its components. This standard requires that certain items recognized under accounting principles as components of comprehensive income be reported in an annual financial statement that is displayed with the same prominence as other financial statements. The Company has adopted this standard in 1998.
In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information." This standard requires that companies disclose "operating segments" based on the way management disaggregates the Company for making internal operating decisions. The Company has adopted this standard in 1998.
In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures about Pensions and Other Postretirement Benefits." This standard's objective is to improve pension and other postretirement benefits disclosure. The Company has adopted this standard in 1998.
FUTURE ACCOUNTING CHANGES
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." This statement requires all derivative instruments to be recorded in the Consolidated Balance Sheets at their fair value. Changes in fair value of derivatives are required to be recorded each period in current earnings or other comprehensive income, depending on whether the derivative is designated as part of a hedge transaction and if it is, the type of hedge transaction. This statement is effective for all fiscal quarters of fiscal years beginning after June 15, 1999. The effect of adoption of this statement on the Company's earnings or statement of financial position is expected to be minimal.
LIQUIDITY AND CAPITAL RESOURCES
During 1998, the Company satisfied the capital requirements of its operations with internally generated funds and approximately $30.1 million of net proceeds received from the sale of the power generation businesses. In addition, the net proceeds from the sale of the power generation businesses enabled the Company to pay off its revolving loan with its banks and end the year with $30.7 million of cash on its balance sheet. Subsequent to year end 1998, the Company used this cash to finance new acquisitions and to pay down additional debt. For the foreseeable future, the Company believes it will generate funds from operations to meet the capital requirements of its existing operations. Also, subsequent to year end 1998, the Company completed a new $50 million bank loan agreement which reflects the requirements of both its domestic and international operations. As of December 25, 1998, the Company had no borrowings against its bank facility and letters of credit outstanding of $2,765,000. During 1997, the Company also satisfied the capital requirements of its operations with internally generated funds.
During 1998, working capital decreased by $22,962,000 from $68,054,000 at December 26, 1997 to $45,092,000. This decrease was primarily the result of a reclassification of $17.1 million of convertible notes due in January 1999 to current portion of long-term debt and the elimination of the net assets of discontinued operations. During 1998, the Company generated $26,404,000 in cash from continuing operations.
During 1998 and 1997, the Company made capital expenditures of $16,691,000 and $12,785,000, respectively. The major 1998 expenditures were in the motor vehicle products segment for equipment at Milsco to support the conversion to cellular manufacturing, at Janesville Products to support new programs and to improve efficiency, and in the industrial products segment for equipment at JacksonLea, Osborn and the components business to support new programs at those locations. The major 1997 expenditures were in the motor vehicle products segment for equipment at Milsco, Janesville Products and Sackner to support new programs and to improve efficiency and in the industrial products segment for equipment at the components businesses, Osborn and JacksonLea to support new programs at those locations. Capital expenditures for 1999 are anticipated to more than double due to the requirements of new programs and to provide for plant modernization. No significant commitments are outstanding as of December 25, 1998.
SEASONALITY
U.S. auto makers traditionally shut down for the annual model changeover in the third quarter. In addition, adjustments to production schedules are made throughout the year based on retail auto sales and the level of dealer inventories. These seasonal patterns affect the Company's motor vehicle products operations most significantly but also have somewhat of an impact on industrial products due to the effect on automotive suppliers which use the Company's precision components and finishing products.
YEAR 2000 ISSUES
The Company's State of Readiness - The Company's main financial and manufacturing hardware and software systems have been tested and are now believed to be year 2000 compliant. This was accomplished primarily through systems upgrades and maintenance performed over the last few years to enhance functionality of the systems, not solely to achieve year 2000 compliance. The only systems that remain to be upgraded for year 2000 are certain ancillary, mostly PC based, interface systems used for shop floor control and report writing functions. Year 2000 compliance for these systems is ongoing and is expected to be completed by mid 1999. Major customers and suppliers have been surveyed and to date the Company has not been made aware of significant year 2000 issues that would materially affect its business.
Costs to Address the Company's Year 2000 Issues - The majority of the Company's year 2000 issues were corrected either through systems upgrades required for other business purposes or normal maintenance contracts. Therefore, these improvements have not resulted in costs significantly incremental to non-year 2000 planned information systems activities. The estimated costs to correct the remaining ancillary systems still not compliant are not expected to exceed $350,000.
Risks to the Company for Year 2000 Issues - With regard to systems under the Company's control, management does not believe that the Company has significant exposure to the year 2000 issue since, if necessary, systems are capable of accepting manually entered data. The believed worst case scenario is that the Company would have to revert back to certain manual systems for a small portion of its systems, for example, shop floor labor collection and certain internal reporting functions. Our customers and vendors are at various stages of compliance, but management is not aware of significant year 2000 issues that would materially affect the Company's business with them. The Company will continue to monitor year 2000 compliance with its customers and vendors throughout 1999, but will be unable to achieve the same degree of certainty that it has achieved with internal systems.
The Company's Contingency Plans - By the middle of 1999, the Company expects to be fully year 2000 compliant. To the extent that it has minor internal systems that are not year 2000 compliant by mid-year, the Company will have time to implement manual systems by year end 1999 which management believes will significantly reduce the financial risk to the Company.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risk stemming from changes in foreign exchange rates, interest rates and commodity prices. Changes in these factors could cause fluctuations in earnings and cash flows. In the normal course of business, exposure to interest rates is managed by fixing interest rates on the majority of the Company's long-term debt. Fluctuation in commodity prices, for example steel and cotton cloth, are managed by strategic purchasing which generally provides the time necessary to allow for price increases to customers, where appropriate. In rare situations where commitments are made for extended periods (more than 60 days), outside of functional currencies, for example, a commitment to purchase European equipment for use in a U.S. plant which will take six months to deliver, exposure is managed by entering into hedging transactions authorized under Company policies that place controls on these activities. Hedging transactions involve the use of
derivative financial instruments and are used only where there is an underlying exposure; not for trading or speculative purposes. At December 25, 1998, there were no outstanding hedging transaction.
Foreign Operations - The Company has significant foreign operations, for which the functional currencies are denominated primarily in German Marks and British Pounds and to a lesser extent, Canadian Dollars, Swedish Kronor, French Francs, Mexican Pesos, Brazilian Reals, Chinese Renminbi and Portuguese Escudos. As the values of the currencies of the foreign countries in which the Company has operations increases or decreases relative to the U.S. Dollar, the sales, expenses, profits, assets and liabilities of the Company's foreign operations, as reported in the Company's Consolidated Financial Statements, increase or decrease, accordingly. The Company's primary method of reducing this exposure is to approximately balance current assets and liabilities within each functional currency. The Company does not use derivative financial instruments to hedge this exposure. Because the Company has significant operations across member countries of the European Monetary Union, the introduction of the Euro on January 1, 1999 is expected to simplify the management of foreign exchange exposure by aggregating the assets and liabilities of several currencies that now have to be managed individually.
EURO CONVERSION
On January 1, 1999, member countries of the European Monetary Union (EMU) began a three-year transition from their national currencies to a new common currency, the "Euro". In the first phase, the permanent rates of exchange between the members' national currency and the Euro has been established and monetary, capital, foreign exchange, and interbank markets will be converted to the Euro. National currencies will continue to exist as legal tender and may continue to be used in commercial transactions. By January 2002, Euro currency will be issued and by July 2002, the respective national currencies will be withdrawn. The Company has operations in member countries of the EMU and, accordingly, has established action plans that are continuing to be implemented to address the Euro's impact on information systems, currency exchange rate risk, taxation, contracts, competition and pricing. Based on its current assessment, management believes that the costs of the Euro conversion will not have a material impact on the operations, cash flows or financial condition of the Company.
FORWARD-LOOKING STATEMENTS
This report contains certain statements as to the Company's belief, expectation or anticipation regarding future developments. Such statements constitute forward-looking statements and are subject to certain risks and uncertainties that could cause actual future results and developments to differ materially from those currently projected. Such risks and uncertainties include, but are not limited to, changes in capital expenditure requirements, the ability of the Company and its suppliers and customers to address Year 2000 issues and general economic conditions in the Company's market segments.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
JASON INCORPORATED CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 25, 1998 AND DECEMBER 26, 1997
JASON INCORPORATED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) - -------------------------------------------------------------------------------- ASSETS
The accompanying notes are an integral part of these financial statements.
JASON INCORPORATED CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS EXCEPT PER SHARE DATA) - --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
JASON INCORPORATED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (IN THOUSANDS) - --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
JASON INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) - --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
JASON INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) - --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
JASON INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - --------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION The consolidated financial statements and related notes have been reclassified to reflect the Company's divestiture in 1998 of the power generation products segment, accounted for as discontinued operations (see Note 3). The term "Company" as used in these consolidated financial statements refers to Jason Incorporated and its subsidiaries.
PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of all wholly-owned and majority-owned subsidiaries. All significant intercompany transactions and balances have been eliminated.
CASH AND CASH EQUIVALENTS For purposes of the Consolidated Statements of Cash Flows, the Company considers all investments with a maturity of three months or less at the time of purchase to be cash equivalents.
FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amounts in the Consolidated Balance Sheets for cash and cash equivalents, accounts receivable, accounts payable and long-term debt instruments approximate their fair market value.
INVENTORIES Inventories are stated at the lower of cost (first-in, first-out) or market.
PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are stated at cost and depreciated over their estimated useful lives using the straight-line method for financial reporting purposes and accelerated methods for income tax purposes. Leasehold improvements are amortized over the term of the respective leases using the straight-line method. Expenditures for maintenance and repairs are charged to operations as incurred. Renewals and betterments are capitalized.
REVENUE RECOGNITION Revenue is recognized from product sales at the time of shipment.
INCOME TAXES Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance is provided for deferred tax assets where it is considered more likely than not that the Company will not realize the benefit of such assets.
JASON INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - --------------------------------------------------------------------------------
INTANGIBLE ASSETS Intangible assets are comprised of the following (in thousands):
Other intangible assets include patents, computer software, trademarks and covenants not-to-compete. Intangible assets are being amortized over their respective estimated useful lives ranging from 5-30 years. The Company reviews the carrying value of intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Measurement of any impairment would include a comparison of estimated future operating cash flows anticipated to be generated during the remaining life of the intangible assets to the net carrying value of the intangible assets.
DEFERRED FINANCING COSTS Expenses associated with the issuance of debt instruments are capitalized and amortized over the respective terms of the debt instruments. Net deferred financing costs included in other assets at December 25, 1998 and December 26, 1997 were $433,000 and $689,000, respectively.
USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
EARNINGS PER SHARE Basic earnings per share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by giving effect to all dilutive potential common shares.
NEW ACCOUNTING STANDARDS In June 1997, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income," which established standards for reporting and display of comprehensive income and its components. This standard requires that certain items recognized under accounting principles as components of comprehensive income be reported in an annual financial statement that is displayed with the same prominence as other financial statements. The Company has adopted this standard in 1998.
JASON INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - --------------------------------------------------------------------------------
In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information." This standard requires that companies disclose "operating segments" based on the way management disaggregates the Company for making internal operating decisions. The Company has adopted this standard in 1998.
In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures about Pensions and Other Postretirement Benefits." This standard's objective is to improve pension and other postretirement benefits disclosure. The Company has adopted this standard in 1998.
FUTURE ACCOUNTING CHANGES In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." This statement requires all derivative instruments to be recorded in the Consolidated Balance Sheets at their fair value. Changes in fair value of derivatives are required to be recorded each period in current earnings or other comprehensive income, depending on whether the derivative is designated as part of a hedge transaction and if it is, the type of hedge transaction. This statement is effective for all fiscal quarters of fiscal years beginning after June 15, 1999. The effect of adoption of this statement on the Company's earnings or statement of financial position is expected to be minimal.
2. ACQUISITIONS
Effective March 13, 1998, the Company completed the acquisition of Power Brushes Ltd. for approximately $16.9 million, including cash and acquisition costs, plus the assumption of approximately $10.3 million of debt. Brushes International Ltd., a wholly-owned subsidiary of Power Brushes Ltd., is one of the largest producers of industrial power brushes in Europe. This business has been integrated within the Company's industrial products segment.
Effective October 31, 1996, the Company acquired 51% of the stock of Suroflex GmbH ("Suroflex") for approximately $2.9 million, including cash of $2.7 million and acquisition costs. Suroflex is a German manufacturer of nonwoven insulation products for the automotive industry. In connection with this acquisition, the Company was provided a ten year option to purchase the remaining 49% interest in Suroflex for 4 million Deutsche Marks. Effective October 25, 1998, the Company exercised its option to purchase the remaining 49% interest for approximately $2.5 million.
The aforementioned acquisitions have been accounted for using the purchase method and, accordingly, operating results are included in the consolidated financial statements since the respective acquisition dates. The respective purchase prices were allocated to the assets acquired and liabilities assumed based upon their estimated fair values.
3. DISCONTINUED OPERATIONS
Effective June 5, 1998, the Company completed the sale of its power generation businesses. Net cash proceeds from the sale approximated $30.1 million; there was no gain or loss on the sale. The provision (benefit) for income taxes on discontinued operations was $817,000, $1,159,000 and $(62,000) for 1998, 1997 and 1996, respectively.
JASON INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - --------------------------------------------------------------------------------
Sales and operating profit of the power generation businesses were $61.0 million and $2.6 million, respectively, for the period ended June 5, 1998. Sales of the power generation businesses were $142.7 million and $151.7 million for the years ended December 26, 1997 and December 27, 1996, respectively. Operating profit was $4.2 million and $2.1 million for the years ended December 26, 1997 and December 27, 1996, respectively.
4. ACCOUNTS RECEIVABLE
Accounts receivable consisted of the following (in thousands):
5. INVENTORIES
Inventories consisted of the following (in thousands):
JASON INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - --------------------------------------------------------------------------------
6. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consisted of the following (in thousands):
7. REVOLVING LOAN AGREEMENT AND OTHER LONG-TERM DEBT
The revolving loan and other long-term debt consisted of the following (in thousands):
The revolving loan facility provides for borrowings of up to $65 million at December 25, 1998. Future maximum borrowings under the revolving loan facility may not exceed $50 million as of December 31, 1999. Letters of credit outstanding ($2.8 million at December 25, 1998) on the Company's behalf reduce availability under the facility. The revolving loan agreement matures on December 31, 2000; borrowings bear interest at either a floating rate based upon the bank's prime rate or a Eurodollar rate plus 1.0%. A commitment fee of .375% per annum on the unused portion of the revolving loan facility is payable on a quarterly basis.
JASON INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - --------------------------------------------------------------------------------
During 1995, in conjunction with the Company's acquisition of Milsco Manufacturing Company ("Milsco"), the Company issued $17,057,000 of convertible notes to the former Milsco shareholders. The notes bear interest at 7% payable quarterly. The principal portion of the notes are payable on January 3, 1999. At any time after January 31, 1996, and prior to payment in full of the principal amount of the notes, the holders may convert all or any portion of the outstanding notes into shares of the Company's $.10 par value common stock. The number of common shares to be received by the holder is obtained by dividing the outstanding principal balance of the notes on the date of conversion by the conversion price of $11.25 per common share. In January 1999, the Company repaid the entire principal portion of the Milsco notes.
During 1995, the Company entered into a $20,000,000 senior note agreement with an insurance company. The senior note bears interest at 7.34% payable quarterly. The principal portion of the note is payable in seven equal annual installments of $2,857,143 commencing May 31, 1999. During 1994, the Company entered into a $25,000,000 senior note agreement with an insurance company. The senior note bears interest at 7.72% payable quarterly. The principal portion of the note is payable in thirteen equal semi-annual installments of $1,923,077 which commenced April 27, 1998. During 1992, the Company entered into a $16,000,000 senior note agreement with two insurance companies. These senior notes bear interest at 7.65% payable semiannually. The notes are payable in six equal annual installments of $2,667,000 which commenced December 1, 1997.
As of December 25, 1998, the interest rate on the 1989 senior subordinated notes was 11.275%. The senior subordinated notes are payable in equal annual installments of $1,250,000 in October of each year with interest payable semiannually. Under the terms of these agreements, the interest rate decreases as the Company's leverage ratio decreases.
Long-term debt generated from the Company's acquisition of Suroflex (see Note 2) and held principally by German banks of $13.7 million at December 25, 1998 is not guaranteed by the Company and there is no requirement for the Company to repay these obligations in the event Suroflex would be unable to do so. In connection with the acquisition, the repayment terms were modified to eliminate principal repayments through 1999. Thereafter, annual payments will be required in an amount equal to the excess of 49% of the pretax income of Suroflex over interest paid on the aforementioned obligations. Amounts outstanding under the debt agreements bear interest at a weighted average interest rate of 5.83% and are secured by substantially all of the assets of Suroflex.
JASON INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - --------------------------------------------------------------------------------
Future annual maturities of long-term debt are as follows (in thousands):
All of the Company's lending agreements contain restrictions, including limitations on dividends, capital expenditures, new indebtedness and disposition of assets. The agreements also contain various leverage, interest coverage, fixed charge coverage, working capital and net worth requirements, among others. The Company's revolving loan and other long-term debt is secured by substantially all Company assets.
8. LEASE OBLIGATIONS
The Company leases machinery, transportation equipment and office, warehouse and manufacturing facilities which expire at various dates.
Future minimum lease payments under operating leases at December 25, 1998 are (in thousands):
Total rental expense under operating leases was as follows (in thousands):
JASON INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - --------------------------------------------------------------------------------
9. EARNINGS PER SHARE
A reconciliation of the income (numerator) and shares (denominator) used in the computations of basic and diluted earnings per common share from continuing operations, respectively, are as follows (in thousands except per share data):
JASON INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - --------------------------------------------------------------------------------
The impact of the assumed conversion of the $17,057,000 convertible notes, which bear interest at 7%, was included within the earnings per share calculations for those periods in which such conversion had a dilutive effect.
10. SHAREHOLDERS' EQUITY
COMMON STOCK - The Company has authorized 30,000,000 shares of $.10 par value common stock of which 20,354,633 and 20,237,705 shares were issued and outstanding at December 25, 1998 and December 26, 1997, respectively.
STOCK OPTION PLAN - On April 16, 1987, the Company adopted a nonqualified stock option plan. The plan provides for the issuance of up to 2,687,500 shares of common stock to executives and other key employees. The option price generally equals the fair market value of the common shares on the day of the grant and an option's maximum term is ten years.
JASON INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - --------------------------------------------------------------------------------
Substantially all options granted vest ratably over a three-year period. Transactions and options outstanding under this plan were:
The Company has adopted the disclosure-only provisions of SFAS No. 123, "Accounting for Stock-Based Compensation." Accordingly, no compensation cost has been recognized for options granted under the stock option plan. Had compensation cost been determined based on the fair value at the grant date for awards in 1996, 1997 and 1998 consistent with the provisions of SFAS No. 123, the Company's pro forma net income and earnings per share would have been as presented below (in thousands except per share data):
JASON INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - --------------------------------------------------------------------------------
The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing model with the following grant assumptions used:
The weighted average exercise prices per share for options outstanding at December 25, 1998, December 26, 1997 and December 27, 1996 are $6.19, $5.86 and $5.61, respectively. The weighted average exercise prices per share for options exercisable at December 25, 1998, December 26, 1997 and December 27, 1996 are $5.85, $5.34 and $4.38, respectively. The weighted average remaining contractual life of options outstanding at December 25, 1998 is 8.35 years. The weighted average fair value of options granted during 1998, 1997 and 1996 is $3.58, $3.48 and $3.05 per share, respectively.
11. INCOME TAXES
The components of income (loss) for the Company's continuing domestic and foreign operations were as follows (in thousands):
JASON INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - --------------------------------------------------------------------------------
The consolidated provision for income taxes related to continuing operations included in the Consolidated Statements of Income consisted of the following (in thousands):
The reconciliation between the Federal statutory tax rate expressed as a percent of pre-tax income and the effective tax rate is as follows:
JASON INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - --------------------------------------------------------------------------------
Deferred income taxes are provided for the temporary differences between the financial reporting and tax bases of the Company's assets and liabilities. The Company's temporary differences which give rise to deferred tax assets and liabilities are as follows (in thousands):
The deferred tax asset valuation allowance is related entirely to certain of the Company's foreign operations, including German net operating loss carryforwards acquired in connection with the Suroflex transaction totaling approximately $26,545,000 (at December 25, 1998 exchange rates) and for which a valuation allowance was provided at the time of the acquisition. At December 25, 1998, the Company's foreign subsidiaries had approximately $30,100,000 in net operating losses available for carryforward; approximately $2,200,000 of such carryforwards expire at various times through 2001 while the remainder of these carryforwards are available for an unlimited period.
12. EMPLOYEE BENEFIT PLANS
The Company maintains defined benefit pension plans covering union employees at certain of its divisions. Additionally, the Company maintains savings and profit sharing plans for the majority of employees not covered by union defined benefit plans.
JASON INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - --------------------------------------------------------------------------------
Net periodic costs for the defined benefit plans includes the following components (in thousands):
The following provides a reconciliation of benefit obligations, plan assets and funded status of the plans (in thousands):
JASON INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - --------------------------------------------------------------------------------
The projected benefit obligation was determined using assumed discount rates of 7.25% at December 25, 1998 and ranging from 7.0% to 7.75% at December 26, 1997, and an assumed long-term rate of return on plan assets of 9.0% at December 25, 1998 and ranging from 7.0% to 9.0% at December 26, 1997. Plan assets consist principally of common stocks and government obligations.
The Company also provides postretirement health care benefits and life insurance coverage to certain eligible employees at one of its divisions. The costs of retiree health care benefits and life insurance coverage are accrued over the employee service periods.
The net postretirement benefit costs include the following components (in thousands):
Presently, the Company's postretirement benefit plans are not funded. The following provides a reconciliation of benefit obligations, plan assets and the funded status of the plans (in thousands):
JASON INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - --------------------------------------------------------------------------------
The discount rate used in determining the accumulated postretirement benefit obligation was 7.50% and 7.75% at December 25, 1998 and December 26, 1997, respectively. The assumed health care cost trend rates used in measuring the accumulated postretirement benefit obligation were 6.0% and 5.0% for the hourly and salaried plans, respectively, at December 25, 1998 and December 26, 1997. It was assumed that these rates will decline to 1% over periods of 30 years and 25 years for the hourly and salaried plans, respectively.
The health care cost trend rate assumption has a significant effect on the amounts reported. To illustrate, a one percentage-point change in the assumed health care cost trend rate would change the accumulated postretirement benefit obligation as of December 25, 1998 by approximately $347,000 and would change the net postretirement benefit expense for 1998 by approximately $34,000.
The Company maintains an incentive compensation plan which provides for incentive payments to certain employees upon the achievement of defined operating results. Incentive compensation expense totaled $2,571,000, $3,055,000 and $2,277,000 in 1998, 1997 and 1996, respectively. These amounts are included in accrued compensation and employee benefits in the accompanying Consolidated Balance Sheets.
13. SEGMENT INFORMATION
Reference is made to pages 11 through 15 for segment financial data and an unaudited description and discussion of the Company's business segments.
The Company has adopted SFAS No. 131, "Disclosures About Segments of an Enterprise and Related Information," in 1998 which changes the way the Company reports information about its operating segments. The information for 1997 and 1996 has been restated from the prior year's presentation in order to conform to the 1998 presentation.
The Company's six business units have separate management teams and infrastructures that offer different products and services. The business units have been aggregated into two reportable segments (motor vehicle products and industrial products) since the long term financial performance of these segments is affected by similar economic conditions. The Company evaluates performance based on operating earnings of the respective business units.
Motor vehicle products include businesses which are manufacturers of nonwoven fiber padding for the automotive industry and seating products for motorcycles and a broad array of other mobile equipment. The four largest customers of this segment comprised approximately 27%, 26% and 24% of consolidated sales in 1998, 1997 and 1996, respectively. Receivables outstanding with these customers represented approximately 26% of accounts receivable balances at both December 25, 1998 and December 26, 1997, respectively.
Industrial products include businesses which are manufacturers of finishing products for industrial applications and of precision components for original equipment manufacturers throughout the world.
JASON INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - --------------------------------------------------------------------------------
Information regarding the Company's geographic areas is summarized below (in thousands). Revenues are attributed to countries based on origination of sale. Amounts presented in the eliminations column represent sales between geographic areas primarily comprised of sales made by the Company's operations in the United States. Net assets of discontinued operations have been excluded from long-lived assets.
JASON INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - --------------------------------------------------------------------------------
14. INTERIM FINANCIAL INFORMATION (UNAUDITED)
Summarized quarterly financial data for 1998 and 1997 are presented below (in thousands except per share data):
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of Jason Incorporated
In our opinion, the consolidated financial statements listed in the index appearing under Item 14(a)(1) on page 41 present fairly, in all material respects, the financial position of Jason Incorporated and its subsidiaries at December 25, 1998 and December 26, 1997, and the results of their operations and their cash flows for each of the three years in the period ended December 25, 1998, in conformity with generally accepted accounting principles. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 14(a)(2) on page 41 presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP Milwaukee, Wisconsin January 29, 1999
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information on pages 2 and 3 of the Company's Proxy Statement, dated March 12, 1999, under "Nominees for Election as Directors" and "Executive Officers" is incorporated by reference in this Form 10-K Annual Report.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
The information on pages 4 through 6 of the Company's Proxy Statement, dated March 12, 1999, under "Executive Compensation" is incorporated by reference in this Form 10-K Annual Report.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information on page 7 of the Company's Proxy Statement, dated March 12, 1999, under "Security Ownership" is incorporated by reference in this Form 10-K Annual Report.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
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:
1. FINANCIAL STATEMENTS. The following financial statements of the Company provided in Item 8.
Consolidated Balance Sheets - as of December 25, 1998 and December 26, 1997.
Consolidated Statements of Income - years ended December 25, 1998, December 26, 1997 and December 27, 1996.
Consolidated Statements of Shareholders' Equity - years ended December 25, 1998, December 26, 1997 and December 27, 1996.
Consolidated Statements of Cash Flows - years ended December 25, 1998, December 26, 1997 and December 27, 1996.
Notes to Consolidated Financial Statements.
Report of Independent Accountants.
2. FINANCIAL STATEMENT SCHEDULE:
Financial Statement Schedule for the years ended December 25, 1998, December 26, 1997 and December 27, 1996.
Schedule II Valuation and Qualifying Accounts and Reserves
All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions, are inapplicable or the required information is shown in the financial statements or notes thereto, and therefore have been omitted.
3. EXHIBITS:
3.1 Articles of Incorporation of the Company.
3.2 Agreement and Plan of Merger between the Company (formerly known as Jason Merger Corp.) and its predecessor Jason Incorporated, a Delaware corporation.
3.3 By-Laws of the Company.
4.1 Specimen Common Stock certificate.
10.1 Lease Agreement, dated August 30, 1985, between Norwalk Community Development Corporation and AMCA International Corporation; Assignment and Assumption of Lease dated December 31, 1985 between the Company and AMCA International Corporation.
10.2 Lease between Donald W. Helgeson and Amtel, Inc. dated July 1, 1986 of premises located in Janesville, Wisconsin; Assignment and Assumption of Lease dated December 31, 1985 between Jason Incorporated and Amtel, Inc.
10.3 Assignment and Assumption of Lease of property located in Santa Fe Springs, California dated December 31, 1985 between AMCA International Corporation and Jason Incorporated (copy of lease attached).
10.4 Jason Incorporated Deferred Compensation Plan for Employees dated September 26, 1986.
10.5 Jason Employee Savings and Profit Sharing Plan effective January 1, 1986.
10.6 Jason Incorporated Management Incentive Compensation Plan effective January 1, 1987.
10.7 Jason Incorporated Key Executive Incentive Compensation Plan effective January 1, 1987.
10.8 Lease of property located in Old Fort, North Carolina dated June 10, 1988.
10.9 Jason Incorporated 1987 Nonqualified Stock Option Plan dated April 16, 1987 as amended and restated January 30, 1989.
10.10 Jason Employee Savings and Profit Sharing Plan Modifications: subsection 7.3(a) of Article VII, section 7.2 of Article VII, section 2.1, section 3.1, section 4.2, section 2.2, section 2.3, section 2.1, section 6.4 and section 3.7.
10.11 Sublease Agreement dated September 1, 1988 between Midwestern Oklahoma Development Authority and Jason Incorporated for the Burns Flat, Oklahoma facility.
10.12 Lease Agreement dated June 21, 1988 between Southview Business Center, Ltd. and Janesville Products Co. for the Norwalk, Ohio offices.
10.13 Jason Incorporated Note Agreement dated as of October 1, 1989 re: $10,000,000 10.60% Senior Subordinated Notes Due October 15, 2000.
10.14 Purchase and Sale Agreement dated June 28, 1991 for the purchase of the assets of Sackner
10.15 Purchase and Sale Agreement dated May 31, 1991 for the purchase of the assets of Lea.
10.16 Purchase and Sale Agreement dated June 21, 1991 for the purchase of the assets of Schroeder.
10.17 Second Amendment to Lease Agreement between Southgate Eureka Associates Limited Partnership and Jason Incorporated.
10.18 Lease Agreement between Southview Business Center, Ltd. and Janesville Products Co.
10.19 Lease between Schroeder Industries, Inc., to be known as SI Properties, Inc., and Jason Incorporated.
10.20 Lease between Arrowhead Corporation and Jason Incorporated dated January 23, 1991.
10.21 Lease between Arrowhead Corporation and Jason Incorporated dated April 1, 1992.
10.22 Credit Agreement by and among Jason Incorporated, The First National Bank of Chicago and The First National Bank of Boston, as amended.
10.23 Note Agreements dated as of November 15, 1992 re: $16,000,000 7.65% Senior Secured Notes due December 1, 2002.
10.24 Stock Purchase Agreement between the Company and the majority stockholders of Koller Industries, Inc.
10.25 Stock Purchase Agreement between the Company and the minority stockholders of Koller Industries, Inc.
10.26 Form of Stock Purchase Agreement executed by the Company in connection with the January 1994 private placement of common stock.
10.27 Lease for the facility at 6800 West Calumet Road, Milwaukee, WI.
10.28 Lease for the facility at 1530 Artaius Parkway, Libertyville, IL.
10.29 Lease for the facility at 140 South Mitchell Court, Addison, IL.
10.30 Lease for the facility at 466 and 468 Diens Drive, Wheeling, IL.
10.31 Lease for the facility at 7842 North Faulkner Road, Milwaukee, WI.
10.32 Purchase and Sale Agreement between the Company and Milsco Manufacturing Company.
10.33 Form of Convertible Note issued by the Company in connection with the Purchase and Sale Agreement with Milsco Manufacturing Company.
21.1 Subsidiaries
23.1 Consent of PricewaterhouseCoopers LLP
24.1 Power of Attorney
27 Financial Data Schedule
UNDERTAKING:
Copies of the exhibits to this report will be furnished without charge to the Company's shareholders upon written request to the Company's Secretary at the Company's executive office.
(b) Reports on Form 8-K.
(c) Exhibits.
The response to this portion of Item 14 is submitted as a separate section of this report.
(d) Financial Statement Schedules.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(thousands of dollars)
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.
JASON INCORPORATED
BY /s/ Vincent L. Martin -------------------- Vincent L. Martin, Chief Executive Officer
Date: March 1, 1999
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Vincent L. Martin and Mark Train, and each of them, as 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 and all 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 to perform each and every act and thing requisite and necessary to be done in connection therewith, 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, were there or his substitute or 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.
EXHIBIT INDEX
Exhibit Sequential Page Number Number - ------ ---------------
3.1 Articles of Incorporation of (1) the Company, as amended
3.2 Agreement and Plan of Merger (1) between the Company (formerly known as Jason Merger Corp.) and its predecessor, Jason Incorporated, a Delaware corporation
3.3 By-Laws of the Company (1)
4.1 Specimen Common Stock (2) certificate
10.1 Lease Agreement, dated (2) August 30, 1985 between Norwalk Community Development Corporation and AMCA International Corporation; Assignment and Assumption of Lease dated December 31, 1986 between the Company and AMCA International Corporation
10.2 Lease between Donald W. Helgeson (2) and Amtel, Inc. dated July 1, 1986 of premises located in Janesville, Wisconsin; Assignment and Assumption of Lease dated December 31, 1985 between Jason Incorporated and Amtel, Inc.
10.3 Assignment and Assumption of (2) Lease of property located in Santa Fe Springs, California
dated December 31, 1985 between AMCA International Corporation and Jason Incorporated (copy of lease attached).
10.4 Jason Incorporated Deferred (2) Compensation Plan for Employees dated September 26, 1986.
10.5 Jason Employee Savings & Profit (2) Sharing Plan effective January 1, 1986.
10.6 Jason Incorporated Management (2) Incentive Compensation Plan effective January 1, 1987.
10.7 Jason Incorporated (2) Executive Incentive Compensation Plan effective January 1, 1987.
10.8 Lease of property located in (3) Old Fort, North Carolina dated June 10, 1988.
10.9 Jason Incorporated 1987 (3) Nonqualified Stock Option Plan dated April 16, 1987 as amended and restated January 30, 1989.
10.10 Jason Employee Savings and Profit (3) Sharing Plan Modifications: subsection 7.3(a) of Article VII, section 7.2 of Article VII, section 2.1, section 3.1, section 4.2, section 2.2, section 2.3, section 2.1, section 6.4 and section 3.7
10.11 Sublease Agreement dated (3) September 1, 1988 between Midwestern Oklahoma Development Authority and Jason Incorporated for the Burns Flat, Oklahoma facility.
10.12 Lease Agreement dated (3) June 21, 1988 between Southview Business Center, Ltd. and Janesville Products Co. for the Norwalk, Ohio offices.
10.13 Jason Incorporated Note Agreement (4) dated as of October 1, 1989 re: $10,000,000 10.60% Senior Subordinated Notes Due October 15, 2000.
10.14 Purchase and Sale Agreement dated (5) June 28, 1991 for the purchase of the assets of Sackner.
10.15 Purchase and Sale Agreement dated (5) May 31, 1991 for the purchase of the assets of Lea.
10.16 Purchase and Sale Agreement dated (5) June 21, 1991 for the purchase of the assets of Schroeder.
10.17 Second Amendment to Lease Agreement (6) between Southgate Eureka Associates Limited Partnership and Jason Incorporated.
10.18 Lease Agreement between Southview (6) Business Center, Ltd. and Janesville Products Co.
10.19 Lease between Schroeder Industries, (6) Inc., to be known as SI Properties, Inc., and Jason Incorporated.
10.20 Lease between Arrowhead Corporation (6) and Jason Incorporated dated January 23, 1991.
10.21 Lease between Arrowhead Corporation (6) and Jason Incorporated dated April 1, 1992.
10.22 Credit Agreement by and among Jason (6) Incorporated, The First National Bank of Chicago and the First National Bank of Boston, as amended.
10.23 Note Agreements dated as of November 15, (6) 1992 re: $16,000,000 7.65% Senior Secured Notes due December 1, 2002
10.24 Stock Purchase Agreement between the (7) Company and the majority stockholders of Koller Industries, Inc.
10.25 Stock Purchase Agreement between the (7) Company and the minority stockholders of Koller Industries, Inc.
10.26 Form of Stock Purchase Agreement executed (8) by the Company in connection with the January 1994 private placement of common stock.
10.27 Lease for the facility at 6800 West Calumet (8) Road, Milwaukee, WI.
10.28 Lease for the facility at 1530 Artaius (8) Parkway, Libertyville, IL.
10.29 Lease for the facility at 140 South Mitchell (8) Court, Addison, IL.
10.30 Lease for the facility at 466 and 468 Diens (8) Drive, Wheeling, IL.
10.31 Lease for the facility at 7842 North Faulkner (8) Road, Milwaukee, WI.
10.32 Purchase and Sale Agreement between the (9) Company and Milsco Manufacturing Company.
10.33 Form of Convertible Note issued by the (9) Company in connection with the Purchase and Sale Agreement with Milsco Manufacturing Company.
21.1 Subsidiaries
23.1 Consent of PricewaterhousehouseCoopers LLP.
24.1 Power of Attorney (10)
27 Financial Data Schedule
(1) Exhibit incorporated by reference to the Company's Proxy Statement dated (and filed with the Commission) March 19, 1993.
(2) Exhibit incorporated by reference to the Company's Registration Statement filed on Form S-1, Registration No. 33-13717, effective June 16, 1987.
(3) Exhibit incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 30, 1988.
(4) Exhibit incorporated by reference to the Company's Current Report on Form 8-K dated June 30, 1989.
(5) Exhibit incorporated by reference to the Company's Current Report on Form 8-K filed with the Commission July 12, 1991.
(6) Exhibit incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 25, 1992.
(7) Exhibit incorporated by reference to the Company's Current Report on Form 8-K filed with the Commission December 8, 1993.
(8) Exhibit incorporated by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1993.
(9) Exhibit incorporated by reference to the Company's Current Report on Form 8-K filed with the Commission January 12, 1995.
(10) Appears on signature page to this report.