UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-10219
VULCAN INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 31-0810265
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
300 Delaware Avenue, Suite 1704, Wilmington, Delaware 19801
(Address of principal executive offices) (Zip Code)
(302) 427-5804
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding shares of no par value common stock at March 31, 2001:
1,102,105 shares
VULCAN INTERNATIONAL CORPORATION
INDEX
Part I. FINANCIAL INFORMATION PAGE
Item 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets 1
Condensed Consolidated Statements of Income 2
Condensed Consolidated Statements of Cash Flows 3
Schedule Supporting Net Income Per Common
Share and Dividends Per Common Share 4
Notes to Condensed Consolidated Financial
Statements 5-9
Independent Accountants' Report 10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11-12
Item 3. Quantitative and Qualitative Disclosures
About Market Risks 12
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 13-14
Item 6. Exhibits and Reports on Form 8-K 15
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31,
2002 2001
UNAUDITED
-ASSETS-
CURRENT ASSETS:
Cash $ 2,678,726 2,493,733
Marketable securities (At fair market value) 38,361,565 39,981,369
Accounts receivable 1,621,128 1,428,693
Inventories 423,480 356,290
Prepaid expense and tax 107,736 73,610
---------- ----------
TOTAL CURRENT ASSETS 43,192,635 44,333,695
---------- ----------
PROPERTY, PLANT AND EQUIPMENT-at cost 11,812,397 11,688,951
Less-Accumulated depreciation and depletion 9,613,182 9,571,475
---------- ----------
NET PROPERTY, PLANT AND EQUIPMENT 2,199,215 2,117,476
---------- ----------
OTHER ASSETS:
Investment in joint venture 138,007 69,010
Marketable securities (At fair market value) 40,527,444 37,040,858
Deferred charges and other assets 5,579,268 5,536,448
---------- ----------
TOTAL OTHER ASSETS 46,244,719 42,646,316
---------- ----------
TOTAL ASSETS $91,636,569 89,097,487
========== ==========
-LIABILITIES AND SHAREHOLDERS' EQUITY-
CURRENT LIABILITIES:
Deferred income tax $ 9,951,589 10,480,454
Other 6,794,251 6,552,174
---------- ----------
TOTAL CURRENT LIABILITIES 16,745,840 17,032,628
---------- ----------
OTHER LIABILITIES:
Deferred income tax 13,945,700 12,791,949
Commitments and contingencies - -
Minority interest in partnership 15,746 15,251
Other liabilities 37,470 37,470
---------- ----------
TOTAL OTHER LIABILITIES 13,998,916 12,844,670
---------- ----------
SHAREHOLDERS' EQUITY:
Capital stock 249,939 249,939
Additional paid-in capital 8,205,825 8,191,065
Retained earnings 26,983,479 26,562,597
Accumulated other comprehensive income 47,834,713 46,599,325
---------- ----------
83,273,956 81,602,926
Less-Common stock in treasury-at cost 22,382,143 22,382,737
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 60,891,813 59,220,189
---------- ----------
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY $91,636,569 89,097,487
========== ==========
The accompanying notes to condensed consolidated financial statements are an
integral part of these statements.
1
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the three months ended
UNAUDITED
MARCH 31, MARCH 31,
2002 2001
REVENUES:
Net sales $ 2,366,706 2,193,172
Dividends 571,631 532,999
--------- ---------
TOTAL REVENUES 2,938,337 2,726,171
--------- ---------
COST AND EXPENSES:
Cost of sales 2,139,924 2,255,959
General and administrative 479,514 406,706
Interest expense 47,326 98,744
--------- ---------
TOTAL COST AND EXPENSES 2,666,764 2,761,409
--------- ---------
EQUITY IN JOINT VENTURE INCOME AND
MINORITY INTEREST 68,503 65,670
--------- ---------
INCOME BEFORE GAIN ON SALE OF ASSETS 340,076 30,432
NET GAIN ON SALE OF PROPERTY AND EQUIPMENT 426,702 835,136
--------- ---------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 766,778 865,568
INCOME TAX PROVISION 125,475 166,431
--------- ---------
NET INCOME $ 641,303 699,137
========= =========
NET INCOME PER COMMON SHARE $ .58 .62
========= =========
DIVIDENDS PER COMMON SHARE $ .20 .20
========= =========
The accompanying notes to condensed consolidated financial statements are an
integral part of these statements.
2
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31,
UNAUDITED
2002 2001
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers $ 2,166,271 2,291,062
Cash paid to suppliers and employees (2,641,010) (2,641,490)
Dividends received 571,631 532,999
Interest paid (15,298) (34,451)
--------- ---------
NET CASH FLOWS FROM OPERATING ACTIVITIES 81,594 148,120
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property, equipment
and securities 432,865 799,353
Purchase of property and equipment (164,052) (1,329)
Collections on notes receivable and other 39,653 27,899
Cash distribution from joint venture - 100,000
--------- ---------
NET CASH FLOWS FROM INVESTING ACTIVITIES 308,466 925,923
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayments) under credit
agreement - (350,000)
Sale of treasury shares 19,885 -
Purchase of common shares (4,531) (166,811)
Cash dividends paid (220,421) (226,945)
--------- ---------
NET CASH FLOWS FROM FINANCING ACTIVITIES (205,067) (743,756)
--------- ---------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 184,993 330,287
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 2,493,733 1,008,649
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $2,678,726 1,338,936
========= =========
RECONCILIATION OF NET INCOME TO
NET CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 641,303 699,137
Adjustments-
Depreciation and amortization 81,482 96,672
Deferred income taxes (11,527) 24,759
Equity in joint venture income and minority
interest (68,503) (65,670)
Net gain on sale of property and marketable
securities (426,702) (806,233)
(Increase) decrease in accounts receivable (200,435) 97,890
(Increase) decrease in inventories (67,190) 132,589
Increase (decrease) in accounts payable,
accrued expenses and other assets 133,166 (31,024)
--------- ---------
NET CASH FLOWS FROM OPERATING ACTIVITIES $ 81,594 148,120
========= =========
The accompanying notes to condensed consolidated financial statements are an
integral part of these statements.
3
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
SCHEDULE SUPPORTING NET INCOME PER COMMON SHARE AND
DIVIDENDS PER COMMON SHARE
UNAUDITED
Exhibit "1"
Three months ended
March 31,
2002 2001
a) Net income $ 641,303 699,137
========= =========
b) Cash dividends on common shares $ 220,421 226,945
========= =========
Weighted Average Shares:
c) Common shares issued 1,999,512 1,999,512
d) Common treasury shares 897,425 864,491
--------- ---------
e) Common shares outstanding 1,102,087 1,135,021
========= =========
f) Income per common share (a/e): $ .58 .62
g) Dividends per common share $ .20 .20
The accompanying notes to condensed consolidated financial statements are an
integral part of these statements.
4
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended March 31, 2002 and 2001
On March 1, 1990 the United States of America filed a complaint against the
Company and others in the United States District Court for the District of
Massachusetts claiming that the Company was a potentially responsible party
with respect to the Re-Solve, Inc. Superfund Site in North Dartmouth,
Massachusetts seeking to recover response costs incurred and to be incurred
in the future in connection with this site.
Although the Company had engaged counsel to represent it in that action, the
Company was first informed on March 28, 2001 that the Court had entered,
pursuant to prior rulings, an unopposed "Final Judgment" against the Company
on September 22, 1999. The "Final Judgment" awarded damages against the
Company in favor of the United States in the amount of $3,465,438, plus
interest, for unreimbursed response costs, plus any additional past
unreimbursed response costs, interest and certain future costs the United
States incurs at the site.
The Company recorded an estimated liability of $2,981,000, net of $1,734,000
tax, for the judgment, accrued interest for past costs and a discounted present
value for estimated future costs in connection with the site. This estimated
liability was calculated based on the "Final Judgment" and using other
information provided by the U.S. EPA. The Company expensed $151,000, after
tax, for the year ended December 31, 2001 and $31,000, after tax, for the
three months ended March 31, 2002, for accrued interest and amortization of
estimated future costs related to this matter.
The liability for future costs is a significant estimate of the future costs
and it is subject to change as actual costs are incurred and reported by the
Environmental Protection Agency.
The Company is presently continuing an investigation into this matter and
intends to vigorously pursue all available legal remedies to set aside all
orders and liens relating to the asserted liability and to defend itself
against the underlying allegations. Counsel for the Company is also vigorously
pursuing settlement negotiations with counsel for the United States. To the
extent that the Company is able to settle this liability, or to obtain judicial
relief, for an amount less than it has accrued, the difference will be recorded
as income in the year the obligation is settled.
The Company was advised by the U.S. Environmental Protection Agency several
years ago that it was one of at least 122 large generator potentially
responsible parties ("PRPs") with regard to remediation of the Union Chemical
Company, Inc. Site, South Hope, Maine, where the potential joint and several
liability was in the range of $15 million. The Company, along with many
other PRPs, entered into a consent agreement with U.S. EPA to remediate the
Site, and the Company is now a party to a Remedial Design/Remedial Action
Trust Agreement for the purpose of undertaking clean-up responsibilities at
the Site. Most of the remedial work has now been completed. In 2000, PRPs
estimated the additional funds in the range of $1 million would be required
5
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended March 31, 2002 and 2001
(Continued)
to complete remediation of the Site. The Company's estimated share of that
amount was approximately $5,000 and was paid in 2000. If the projected
cost of the remaining remediation tasks remains at approximately $1 million,
the Company will not have additional payments. There may be other potential
clean-up liabilities at other sites of which the Company has no specific
knowledge.
The Company has an interest in a partnership which owns certain real estate.
On August 13, 1999 a Complaint for money damages, in excess of $25,000, based
upon breach of fiduciary duty was filed by the other partner in the Court of
Common Pleas in Hamilton County, Ohio. Essentially, the plaintiff is seeking
an adjustment of the capital account balances which would result in a higher
distribution of cash flow. On March 27, 2001, the plaintiff threatened to
file an Amended Complaint that alleges damages of $1,062,000 and costs, plus
punitive damages of $2,000,000 on various grounds. The Company believes that
the suit is without merit and has been defending itself vigorously against
the issues raised.
CCBA appealed a real estate tax assessment from 1999 that had increased
the annual real estate tax by approximately $96,000. The local school
board has appealed the revision and reduced its initial appraised value
of the property. During 2001, the partnership received a $96,000 refund
of the additional tax paid in 1999. CCBA has recorded a liability of
approximately $119,000 related to this issue based on the revised value
asserted by the local school board. If CCBA is successful, this liability
will be recognized as income.
The Company is involved in other litigation matters and claims which are normal
in the course of operations. Management believes that the resolution of these
matters will not have a material effect on the Company's business or financial
condition.
The accompanying condensed consolidated financial statements reflect all
adjustments that are, in the opinion of management, necessary to reflect a
fair presentation of financial position, results of operations and cash flows
for the interim periods. All such adjustments are of a normal recurring
nature.
There were no securities of the Registrant sold by the Registrant during the
three months ended March 31, 2002, that were not registered under the
Securities Act of 1933, in reliance upon an exemption from registration
provided by Section 4(2) of the Act.
6
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended March 31, 2002 and 2001
(Continued)
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.
INVENTORIES
MARCH 31, DECEMBER 31,
2002 2001
UNAUDITED
Inventories consisted of:
Finished goods $ 109,882 142,846
Work in process 99,182 64,853
Raw materials 214,416 148,591
------- -------
Total inventories $ 423,480 356,290
======= =======
COMPREHENSIVE INCOME
During the three months ended March 31, 2002 and 2001 total other
comprehensive income (loss) was as follows:
2002 2001
Net income $ 641,303 699,137
Other comprehensive income, net of tax:
Unrealized gain (loss) on marketable
securities 1,290,388 (4,942,435)
Less: reclassification adjustment for
gains included in net income (55,000) (274,572)
--------- ---------
Total comprehensive income (loss) $ 1,876,691 (4,517,870)
========= =========
7
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended March 31, 2002 and 2001
(Continued)
Accumulated comprehensive income consists of unrealized holding gains on
securities available for sale of $47,834,713 at March 31, 2002 and
$46,599,325 at December 31, 2001.
BUSINESS SEGMENT INFORMATION
Reportable segments for the three months ended March 31 are as
follows:
2002 2001
NET SALES FROM CONTINUING OPERATIONS:
Rubber and Foam Products $1,736,152 1,533,393
Bowling Pins 532,117 610,082
Real Estate Operations 254,041 306,440
Intersegment net sales (27,352) (58,304)
--------- ---------
2,494,958 2,391,611
Timber sales reported in gain on
sale of property and equipment (128,252) (198,439)
--------- ---------
TOTAL SALES FROM CONTINUING
OPERATIONS $2,366,706 2,193,172
========= =========
OPERATING PROFIT (LOSS) FROM
CONTINUING OPERATIONS:
Rubber and Foam Products $ (43,394) (338,718)
Bowling Pins 43,128 51,535
Real Estate Operations 117,814 160,228
--------- ---------
TOTAL OPERATING (LOSS) FROM
CONTINUING OPERATIONS 117,548 (126,955)
Interest expense - net (47,326) (98,744)
Other unallocated corporate income - net 696,556 1,091,267
Income tax provision (125,475) (166,431)
--------- ---------
NET INCOME $ 641,303 699,137
========= =========
8
PART I - FINANCIAL INFORMATION
(Continued)
Item 1. Financial Statements.
VULCAN INTERNATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months ended March 31, 2002 and 2001
(Continued)
REVIEW BY INDEPENDENT ACCOUNTANTS
The condensed consolidated financial statements at March 31, 2002, and for
the three-month period then ended have been reviewed, prior to filing, by
the Registrant's independent accountants, J.D. Cloud & Co. L.L.P., whose
report covering their review of the financial statements is included in
this report.
9
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors
Vulcan International Corporation
Wilmington, Delaware
We have reviewed the accompanying condensed consolidated balance sheet of
Vulcan International Corporation and subsidiaries as of March 31, 2002, and
the related condensed consolidated statements of income and cash flows for the
three-month periods ended March 31, 2002 and 2001. These financial statements
are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying condensed consolidated financial statements
for them to be in conformity with generally accepted accounting principles.
We have audited, in accordance with U.S. generally accepted auditing
standards, the consolidated balance sheet of Vulcan International Corporation
and subsidiaries as of December 31, 2001, and the related consolidated
statements of income, shareholders' equity, and cash flows for the year then
ended (not presented herein); and in our report dated February 14, 2002, we
expressed an unqualified opinion on those consolidated financial statements.
In our opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of December 31, 2001, is fairly stated, in all
material respects, in relation to the consolidated balance sheet from which
it has been derived.
J.D. CLOUD & CO. L.L.P.
Certified Public Accountants
Cincinnati, Ohio
May 2, 2002
10
PART I - FINANCIAL INFORMATION
(Continued)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Net sales revenue from continuing operations for the three months ended
March 31, 2002, increased $173,534 or 7.9% over the corresponding period in
2001. Cost of sales decreased $116,035 or 5.1% during the three months ended
March 31, 2002 compared to the corresponding period in 2001. These changes
are primarily due to increased sales and decreased costs in the Company's
Rubber and Foam segment.
General and administrative expenses increased $72,808 or 17.9% in the
three months ended March 31, 2002, as compared to the corresponding period
in 2001. This increase is primarily due to increased professional fees
relating to environmental matters.
Interest expense decreased $51,418 for the three months ended March 31, 2002.
This decrease is due to decreased borrowings under the Company's line of
credit agreement. Interest of $32,028 was incurred for the accrued EPA
liabilities.
Gains on the sale of property, equipment and securities were $426,702 for
the three months ended March 31, 2002, as compared to $835,136 for the
corresponding period in 2001. Gains in 2002 and 2001 were the result of
sales of marketable securities, timber and equipment.
The Company has a 50% interest in a joint venture, Vulcan Brunswick Bowling
Pin Company (VBBPC) which manufactures bowling pins in Antigo, Wisconsin for
Brunswick and the Company. The Company's investment in VBBPC is included in
other assets at March 31, 2002.
Summarized income statement information for VBBPC consists of the following:
Three Months ended
March 31,
2002 2001
Net sales $1,517,939 1,315,901
Costs and expenses 1,379,945 1,185,085
--------- ---------
Net income $ 137,994 130,816
========= =========
Company's 50% equity in net income $ 68,997 65,408
========= =========
11
PART I - FINANCIAL INFORMATION
(Continued)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash requirements during the first quarter of 2002 were funded
in part through earnings and noncash charges such as depreciation and
amortization and from the sale of timber and equipment. The cash from these
transactions was primarily used in operations. The Company expects to
continue, when necessary, to use short-term borrowings to meet cash
requirements not fully provided by earnings, depreciation and amortization.
During the three months ended March 31, 2002, 114 shares of treasury stock
were acquired for $4,532 and 500 shares of treasury stock were sold to a
director for $19,885 pursuant to the right of any director to purchase up
to 25,000 shares at market price in any 12 month period. There were
approximately $14,500 of commitments for capital expenditures as of
March 31, 2002.
Item 3. Quantitative and Qualitative Disclosures about Market Risks.
There have been no significant changes in the Company's market risk,
primarily associated with marketable securities, since December 31, 2001.
12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
On March 1, 1990 the United States of America filed a complaint against the
Company and others in the United States District Court for the District of
Massachusetts claiming that the Company was a potentially responsible party
with respect to the Re-Solve, Inc. Superfund Site in North Dartmouth,
Massachusetts seeking to recover response costs incurred and to be incurred
in the future in connection with this site.
Although the Company had engaged counsel to represent it in that action, the
Company was first informed on March 28, 2001 that the Court had entered,
pursuant to prior rulings, an unopposed "Final Judgment" against the Company
on September 22, 1999. The "Final Judgment" awarded damages against the
Company in favor of the United States in the amount of $3,465,438, plus
interest, for unreimbursed response costs, plus any additional past
unreimbursed response costs, interest and certain future costs the United
States incurs at the site.
The Company recorded an estimated liability of $2,981,000, net of $1,734,000
tax, for the judgment, accrued interest for past costs and a discounted present
value for estimated future costs in connection with the site. This estimated
liability was calculated based on the "Final Judgment" and using other
information provided by the U.S. EPA. The Company expensed $151,000, after
tax, for the year ended December 31, 2001 and $31,000, after tax, for the three
months ended March 31, 2002, for accrued interest and amortization of estimated
future costs related to this matter.
The liability for future costs is a significant estimate of the future costs
and it is subject to change as actual costs are incurred and reported by the
Environmental Protection Agency.
The Company is presently continuing an investigation into this matter and
intends to vigorously pursue all available legal remedies to set aside all
orders and liens relating to the asserted liability and to defend itself
against the underlying allegations. Counsel for the Company is also vigorously
pursuing settlement negotiations with counsel for the United States. To the
extent that the Company is able to settle this liability, or to obtain judicial
relief, for an amount less than it has accrued, the difference will be recorded
as income in the year the obligation is settled.
The Company was advised by the U.S. Environmental Protection Agency several
years ago that it was one of at least 122 large generator potentially
responsible parties ("PRPs") with regard to remediation of the Union Chemical
Company, Inc. Site, South Hope, Maine, where the potential joint and several
liability was in the range of $15 million. The Company, along with many
other PRPs, entered into a consent agreement with U.S. EPA to remediate the
Site, and the Company is now a party to a Remedial Design/Remedial Action
Trust Agreement for the purpose of undertaking clean-up responsibilities at
the Site. Most of the remedial work has now been completed. In 2000, PRPs
estimated the additional funds in the range of $1 million would be required
13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. (Continued)
to complete remediation of the Site. The Company's estimated share of that
amount was approximately $5,000 and was paid in 2000. If the projected cost
of the remaining remediation tasks remains at approximately $1 million, the
Company will not have additional payments. There may be other potential
clean-up liabilities at other sites of which the Company has no specific
knowledge.
The Company has an interest in a partnership which owns certain real estate.
On August 13, 1999 a Complaint for money damages, in excess of $25,000, based
upon breach of fiduciary duty was filed by the other partner in the Court of
Common Pleas in Hamilton County, Ohio. Essentially, the plaintiff is seeking
an adjustment of the capital account balances which would result in a higher
distribution of cash flow. On March 27, 2001, the plaintiff threatened to
file an Amended Complaint that alleges damages of $1,062,000 and costs, plus
punitive damages of $2,000,000 on various grounds. The Company believes
that the suit is without merit and has been defending itself vigorously
against the issues raised.
CCBA appealed a real estate tax assessment from 1999 that had increased
the annual real estate tax by approximately $96,000. The local school
board has appealed the revision and reduced its initial appraised value
of the property. During 2001, the partnership received a $96,000 refund
of the additional tax paid in 1999. CCBA has recorded a liability of
approximately $119,000 related to this issue based on the revised value
asserted by the local school board. If CCBA is successful, this liability
will be recognized as income.
The Company and its subsidiaries are party to other matters and claims
which are normal in the course of operations. While the results of
litigation and claims cannot be predicted with certainty, based on advice of
counsel, the Company believes that the final outcome of such matters will
not have a materially adverse effect on its consolidated financial condition.
14
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits
None
b. The Company was not required to file Form 8-K for the quarter
ended March 31, 2002.
15
PART II - OTHER INFORMATION
(Continued)
SIGNATURES
Pursuant to the requirements 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.
VULCAN INTERNATIONAL CORPORATION
By: /s/ Benjamin Gettler
----------------------------------
Date May 13, 2002 Benjamin Gettler
Chairman of the Board, President
and Chief Executive Officer
By: /s/ Vernon E. Bachman
-----------------------------------
Date May 13, 2002 Vernon E. Bachman
Vice President, Secretary-Treasurer
and Principal Accounting Officer
16