ITEM 1. BUSINESS
The Registrant was incorporated in Iowa in 1951 and reincorporated in Delaware on April 3, 1968.
Additional information required by this item appears under the heading "Description of Business" on pages 14 and 15 of the 1997 Annual Report and as Note 7 of the Notes to Consolidated Financial Statements, "Segment Information," on pages 26 and 27 of the 1997 Annual Report.
The Company operates primarily in a single industry segment encompassing laboratory instruments, process analyzers and test kits which analyze the chemical content and other properties of water and other aqueous solutions. This segment also encompasses the chemicals manufactured and sold by the Company, most of which are used with the instruments and test kits manufactured by the Company.
Sales for the Company's European subsidiary are made to European dealers and to customers in the Middle East and Mediterranean Africa in Belgium francs and U.S. dollars, respectively. Payments from the European subsidiary to the U.S. parent are made in U.S. dollars and are subject to the exchange rate in effect at the time of payment. Export transactions made to all other parts of the world by the international staff based in Loveland, Colorado, are conducted primarily in U.S. dollars.
The amount of sales made into the international marketplace is influenced to some degree by the strength of the U.S. dollar against other currencies. Other conditions which to some extent affect the sales of the Company's products in international markets include restrictive tariff and trade policies imposed by foreign countries, and domestic and foreign tax and economic policies.
ITEM 2.
ITEM 2. PROPERTIES
The principal physical properties of the Registrant are as follows:
The Registrant owns a 150,000 square foot steel frame, concrete building situated on 50 acres adjacent to the Loveland, Colorado airport at 5600 Lindbergh Drive in Loveland, Colorado. This building contains the Registrant's executive and administrative offices and its research, development, engineering and instrument manufacturing operations.
The Registrant also owns a 169,000 square foot building complex situated on 45 acres at 100 Dayton Avenue in Ames, Iowa. These facilities contain chemical manufacturing operations, a chemical research laboratory, the home office service function and the shipping department and warehouse for all of the products manufactured and sold by the Registrant.
The Registrant also owns two buildings totaling 45,000 square feet located in Loveland, Colorado. These buildings contain the Registrant's plastic component manufacturing operation, part of the Registrant's component assembly operation and an employee training center.
The Registrant's wholly-owned subsidiary, Hach Europe, S.A., owns a distribution and manufacturing plant containing approximately 44,000 square feet in Namur, Belgium.
All of the Registrant's principal physical properties are modern and were designed and constructed to the Registrant's specifications specifically for use in its business.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
None
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted during the fourth quarter of the fiscal year covered by this report to a vote of security holders, through the solicitation of proxies or otherwise.
EXECUTIVE OFFICERS OF REGISTRANT
Name Age Title
Kathryn Hach-Darrow 74 Chairman of the Board, Chief Executive Officer, Chairman of the Executive Committee and Director
Bruce J. Hach 51 President and Chief Operating Officer and Director
Robert O. Case 75 Secretary and General Counsel
Gary R. Dreher 44 Vice President and Chief Financial Officer and Director
Loel J. Sirovy 58 Senior Vice President, Operations
Jerry M. Churchill 57 Vice President, Domestic Sales
Randall A. Petersen 45 Vice President, Human Resources
John C. Privette 42 Vice President, Sales and Marketing
Larry D. Thompson 53 Vice President, Ames Operations
Kenneth Ogan 52 Vice President, Research and Development and Chief Technical Officer
Brian K. Bowden 32 Vice President, Information Services
Kathryn Hach-Darrow has been active in the business of the Registrant since its inception. She has served on the Board of Directors and was responsible, prior to May 6, 1977, as Executive Vice President for certain of the Registrant's administrative and marketing matters. On May 5, 1977, the Board of Directors elected Mrs. Hach-Darrow President and Chief Operating Officer. On April 28, 1983, she was elected Vice Chairman of the Board of Directors and on February 28, 1986, she was elected Chairman of the Board, Chief Executive Officer and Chairman of the Executive Committee and Director, and has served in these capacities since that date.
Bruce J. Hach, son of Kathryn Hach-Darrow, joined the Registrant November 1, 1970 and served the Company in various capacities. From August 27, 1985 to February 28, 1986, he was an Assistant Vice President in charge of Human Relations. He was elected Senior Vice President of February 28, 1986. On April 30, 1987, he was elected a Director of the Registrant, and he was elected Executive Vice President of the Registrant on August 27, 1987. In August 1988, he was elected President and Chief Operating Officer of the Registrant and has served in these capacities since that date.
Robert O. Case has been Secretary of the Registrant since May 29, 1968. He was named General Counsel to the Registrant on August 29, 1989. From September 1989 to February 1991, he was a shareholder of the Chicago, Illinois law firm of Schuyler, Roche & Zwirner and a member of its management committee. From February 1, 1991 to April 30, 1993, he was a senior member of Walsh, Case & Brown. Since May 1, 1993, Mr. Case has been of counsel to McBride Baker & Coles, a Chicago, Illinois law firm. Mr. Case was a director of the Registrant from May 29, 1968, until his retirement as a Director of the Registrant effective at the August 30, 1994 Annual Meeting of Shareholders.
Gary R. Dreher joined the Registrant on January 17, 1977. He has held a variety of positions since then. In September 1985, he was named Controller for the Company. In August 1990, he was elected Vice President and Treasurer of the Registrant. He was named Vice President and Chief Financial Officer on November 22, 1994 and has served in that capacity since that date. He was elected a Director of the Company at the Company's Annual Meeting of Shareholders on August 30, 1994.
Loel J. Sirovy joined the Registrant on October 19, 1972. He has held a number of management positions in Production and Human Relations. On September 1, 1985, he was elected Vice President of Instrument Operations. On April 28, 1989, he was elected Senior Vice President of Manufacturing. On August 25, 1992, he was elected Senior Vice President of Operations of the Registrant and has served in that capacity since that date.
Jerry M. Churchill joined the Registrant on December 1, 1977, as Marketing Manager of Carle Instruments, Inc., which was a wholly-owned subsidiary of the Registrant engaged in the manufacturing and sale of gas chromatographs. On April 2, 1981, he was elected Vice President of Carle Instruments, Inc. After Carle Instruments, Inc. was merged into Hach Company, Mr. Churchill was made Assistant Vice President of Chromatography Operations on September 18, 1983. On February 28, 1986, he was elected Vice President of Domestic Sales and Marketing. On February 27, 1990, he was elected Senior Vice President of Marketing and Sales. On August 25, 1992, he was elected Senior Vice President of Domestic Sales of the Registrant. On August 24, 1993, he was named Vice President of Domestic Sales of the Registrant and has served in that capacity since that date. Mr. Churchill was a Director of the Registrant from August 28, 1990, until his retirement as a Director of the Registrant effective at the August 29, 1995 Annual Meeting of Shareholders.
Randall A. Petersen joined the Registrant on October 14, 1974. He has held a number of positions in Manufacturing and Human Resources. On April 28, 1989, he was elected Vice President of Human Resources of the Registrant and has served in that capacity since that date.
John C. Privette joined the Registrant on December 1, 1986. He has held a number of positions in Marketing. In October 1989, he was named Director of Domestic Marketing. On August 25, 1992, he was elected Vice President of Marketing of the Registrant. On November 22, 1994, he was elected Vice President of Sales and Marketing of the Registrant. On January 7, 1997, he was named Vice President of International Sales and has served in that capacity since that date.
Larry D. Thompson joined the Registrant on April 6, 1964. He has held a variety of positions in Chemical Operations. In April 1991, he was named Plant Manager of the Ames, Iowa facility. On August 25, 1992, he was elected Vice President of Ames Operations of the Registrant and has served in that capacity since that date.
Kenneth Ogan joined the Registrant in February 1996 as Vice President of Research and Development and Chief Technical Officer and has served in that capacity since that date. He most recently served as Principal Scientist, Sales and Marketing Division and, prior to that, as Senior Manager, Advanced Technology Group for Hitachi Instruments, Inc., where he was employed from 1989 through January 1996. Prior to joining Hitachi Instruments, Inc., he was a Group Manager in Instrumentation and Research and Development for Perkin-Elmer, Inc.
Brian K. Bowden joined the Registrant on January 4, 1988. He has held a number of management positions in Research and Development, Production, Marketing and Information Services. On January 7, 1997, he was elected Vice President of Information Services of the Registrant and has served in that capacity since that date.
The officers of the Company serve at the pleasure of the Board of Directors.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The information required by this item appears under the heading "Common Stock Price Range and Dividends" on page 15 of the 1997 Annual Report and is incorporated herein by reference.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item appears under the heading "Comparative Financial Data - 10-Year Summary" on pages 16 and 17 of the 1997 Annual Report.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
The information required by this item appears in the Chairman's and President's letter "To Our Fellow Shareholders" on pages 2, 3 and 4 of the 1997 Annual Report and under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 13 and 14 of the 1997 Annual Report, all of which is incorporated herein by reference.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item appears in the Consolidated Financial Statements and the Notes thereto on pages 18 through 27 of the 1997 Annual Report and is incorporated herein by reference.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item appears under the heading "Election of Directors" on pages 4 through 8 in the 1997 Proxy Statement and under the caption "Executive Officers of the Registrant" at pages 3 through 5 at the end of Part I of this Report and is incorporated by reference.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item appears under the heading "Executive Compensation" on pages 8 through 16 in the 1997 Proxy Statement, and is incorporated herein by reference.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item appears under the headings "Security Ownership of Certain Beneficial Owners and Management" at pages 2 and 3 and "Election of Directors" on pages 4 through 8 in the 1997 Proxy Statement, and is incorporated herein by reference.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item appears under the headings "Certain Transactions and Business Relationships" on page 8 of the 1997 Proxy Statement and "Compensation Committee Interlocks and Insider Participation" on page 17 of the 1997 Proxy Statement, and each is incorporated herein by reference.
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 on Form 10-K:
1. FINANCIAL STATEMENTS: The information required by this item appears on the pages listed below in the 1997 Annual Report and is incorporated by reference in response to Item 14(a) 1.
Page No. in 1997 ANNUAL REPORT
Report of Independent Accountants 18
Financial Statements:
Consolidated statements of income for the years ended April 30, 1997, 1996 and 1995 19
Consolidated balance sheets, April 30, 1997 and 1996 20
Consolidated statements of stockholders' equity for the years ended April 30, 1997, 1996 and 1995 21
Consolidated statements of cash flows for the years ended April 30, 1997, 1996 and 1995 22
Notes to the consolidated financial statements 23
2. FINANCIAL STATEMENT SCHEDULES: None
3. EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-K: The following exhibits are included in this Annual Report on Form 10-K. The items identified below as Exhibits (10)c - (10)l are management contracts or compensatory plans required to be filed as an Exhibit to this Annual Report on Form 10-K pursuant to Item 14(c) on Form 10-K.
NO. ASSIGNED IN EXHIBIT TABLE ON PAGE NO. IN ITEM 601 OF REG. S-K EXHIBIT THIS REPORT
(3) a. Restated Certificate of Incorporation of the Registrant -- hereby incorporated by reference to Exhibit 99.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended October 26, 1996, Commission File No. 0-3947.
(3) b. By-laws of the Registrant, as amended and restated through October 26, 1996 -- hereby incorporated by reference to Exhibit 99.3 to the Registrant's Quarterly Report on Form 10-Q for the year ended October 26, 1996, Commission File No. 0-3947.
(10) c. Hach Company 1993 Stock Option Plan -- hereby incorporated by reference to Exhibit (10)c. to the Registrant's Annual Report on Form 10-K for the year ended April 30, 1994, Commission File No. 0-3947.
(10) d. Form of Stock Option Agreement under 1993 Stock Option Plan -- hereby incorporated by reference to Exhibit (10)d. to the Registrant's Annual Report on form 10-K for the year ended April 30, 1994, Commission file No. 0-3947.
(10) e. Hach Company Restated 1983 Stock Option Plan -- hereby incorporated by reference to Exhibit (10) d. to the Registrant's Annual Report on Form 10-K for the year ended April 30, 1993, Commission File No. 0-3947.
(10) f. Form of Stock Option Agreements for 1983 Stock Option Plan -- hereby incorporated by reference to Exhibit (10)e. of the Registrant's Annual Report on Form 10-K for the fiscal year ended April 30, 1991, Commission File No. 0-3947.
(10) g. Hach Company Restated director's Bonus Compensation Plan -- hereby incorporated by reference to Exhibit (10)f. of the Registrant's Annual Report on Form 10-K for the fiscal year ended April 30, 1991, Commission File No. 0-3947; Fifth Amendment to Directors Bonus Compensation Plan -- hereby incorporated by reference to Exhibit (10)g. to the Registrant's Annual Report on Form 10-K. for the year ended April 30, 1996, Commission File No. 0-3947.
(10) h. Executive Employment Agreements between the Company and each of Bruce J. Hach, Richard D. Vanous, Loel J. Sirovy, Jerry M. Churchill, Gary R. Dreher, Randall A. Petersen, Larry D. Thompson and John C. Privette -- hereby incorporated by reference to Exhibit 10(h). to the Registrant's Annual Report on Form 10-K for the year ended April 30, 1994, Commission File No. 0-3947; Executive Employment Agreement between the Company and Kenneth Ogan -- hereby incorporated by reference to Exhibit (10)h. to the Registrant's Annual Report on Form 10-K for the year ended April 30, 1996, Commission File No. 0-3947.
(10) i. Hach Company 1995 Employee Stock Purchase Plan-- hereby incorporated by reference to Exhibit (10)j. of the Registrant's Annual Report on Form 10-K for the fiscal year ended April 30, 1995, Commission File No. 0-3947.
(10) j. Hach Company Deferred Compensation Plan (as amended through March 1, 1995) -- hereby incorporated by reference to Exhibit (10)j. of the Registrant's Annual Report on Form 10-K for the fiscal year ended April 30, 1995, Commission File No. 0-3947.
(10) k. Trust Under Hach Company Deferred Compensation Plan dated as of April 10, 1995 between the Company and the Dauphin Deposit Bank and Trust Company, as trustee hereby incorporated by reference to Exhibit (10)k. of the Registrant's Annual Report on Form 10-K for the fiscal year ended April 30, 1995, Commission File No. 0-3947.
(10) l. Hach Company 1995 Non-Employee Director Stock Plan -- hereby incorporated by reference to Exhibit (10)l. to the Registrant's Annual Report on Form 10-K for the year ended April 30, 1996, Commission File No. 0-3947.
(10) m. Revolving Credit Agreement dated as of July 7, 1997 among the Registrant, Hach Europe S.A. and Colorado National Bank.
(13) n. Pages 2, 3, 4 and 13 through 27 of the Registrant's Annual Report to Stockholders for the year ended April 30, 1997.
(21) o. Subsidiaries of the Registrant.
(23) p. Consent of Coopers & Lybrand L.L.P.
(27) q. Financial Data Schedule (electronic filing only)
(b) No reports on Form 8-K were filed during the quarter ended April 30,1997.
(c) and (d) The exhibits and financial statement schedules required to be filed by this item are attached to or incorporated by reference in this report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
HACH COMPANY
JULY 29, 1997 By: /S/ KATHRYN HACH-DARROW - ------------- ------------------------------------------------- Date Kathryn Hach-Darrow, Chairman of the Board, Chief Executive Officer
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.
JULY 29, 1997 By: /S/ KATHRYN HACH-DARROW - ------------- ----------------------------------------------- Date Kathryn Hach-Darrow, Chairman of the Board, Chief Executive Officer and Director
JULY 29, 1997 By: /S/ GARY R. DREHER - ------------- ----------------------------------------------- Date Gary R. Dreher, Vice President, Chief Financial Officer, Principal Accounting Officer and Director
JULY 29, 1997 By: /S/ BRUCE J. HACH - ------------- ----------------------------------------------- Date Bruce J. Hach, Director
JULY 29, 1997 By: /S/ FRED W. WENNINGER - ------------- ----------------------------------------------- Date Fred W. Wenninger, Director
JULY 29, 1997 By: /S/ JOSEPH V. SCHWAN - ------------- ----------------------------------------------- Date Joseph V. Schwan, Director
JULY 29, 1997 By: /S/ JOHN N. MCCONNELL - ------------- ----------------------------------------------- Date John N. McConnell, Director
JULY 29, 1997 By: /S/ LINDA O. DOTY - ------------- ----------------------------------------------- Date Linda O. Doty, Director
INDEX TO EXHIBITS
NO. ASSIGNED IN EXHIBIT TABLE ON PAGE NO. IN ITEM 601 OF REG. S-K EXHIBIT THIS REPORT
(3) a. Restated Certificate of Incorporation of the Registrant -- hereby incorporated by reference to Exhibit 99.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended October 26, 1996, Commission File No. 0-3947.
(3) b. By-laws of the Registrant, as amended and restated through October 26, 1996 -- hereby incorporated by reference to Exhibit 99.3 to the Registrant's Quarterly Report on Form 10-Q for the year ended October 26, 1996, Commission File No. 0-3947.
(10) c. Hach Company 1993 Stock Option Plan -- hereby incorporated by reference to Exhibit (10)c. to the Registrant's Annual Report on Form 10-K for the year ended April 30, 1994, Commission File No. 0-3947.
(10) d. Form of Stock Option Agreement under 1993 Stock Option Plan -- hereby incorporated by reference to Exhibit (10)d. to the Registrant's Annual Report on form 10-K for the year ended April 30, 1994, Commission file No. 0-3947.
(10) e. Hach Company Restated 1983 Stock Option Plan -- hereby incorporated by reference to Exhibit (10) d. to the Registrant's Annual Report on Form 10-K for the year ended April 30, 1993, Commission File No. 0-3947.
(10) f. Form of Stock Option Agreements for 1983 Stock Option Plan -- hereby incorporated by reference to Exhibit (10)e. of the Registrant's Annual Report on Form 10-K for the fiscal year ended April 30, 1991, Commission File No. 0-3947.
(10) g. Hach Company Restated director's Bonus Compensation Plan -- hereby incorporated by reference to Exhibit (10)f. of the Registrant's Annual Report on Form 10-K for the fiscal year ended April 30, 1991, Commission File No. 0-3947; Fifth Amendment to Directors Bonus Compensation Plan -- hereby incorporated by reference to Exhibit (10)g. to the Registrant's Annual Report on Form 10-K. for the year ended April 30, 1996, Commission File No. 0-3947.
(10) h. Executive Employment Agreements between the Company and each of Bruce J. Hach, Richard D. Vanous, Loel J. Sirovy, Jerry M. Churchill, Gary R. Dreher, Randall A. Petersen, Larry D. Thompson and John C. Privette -- hereby incorporated by reference to Exhibit 10(h). to the Registrant's Annual Report on Form 10-K for the year ended April 30, 1994, Commission File No. 0-3947; Executive Employment Agreement between the Company and Kenneth Ogan -- hereby incorporated by reference to Exhibit (10)h. to the Registrant's Annual Report on Form 10-K for the year ended April 30, 1996, Commission File No. 0-3947.
(10) i. Hach Company 1995 Employee Stock Purchase Plan-- hereby incorporated by reference to Exhibit (10)j. of the Registrant's Annual Report on Form 10-K for the fiscal year ended April 30, 1995, Commission File No. 0-3947.
(10) j. Hach Company Deferred Compensation Plan (as amended through March 1, 1995) -- hereby incorporated by reference to Exhibit (10)j. of the Registrant's Annual Report on Form 10-K for the fiscal year ended April 30, 1995, Commission File No. 0-3947.
(10) k. Trust Under Hach Company Deferred Compensation Plan dated as of April 10, 1995 between the Company and the Dauphin Deposit Bank and Trust Company, as trustee hereby incorporated by reference to Exhibit (10)k. of the Registrant's Annual Report on Form 10-K for the fiscal year ended April 30, 1995, Commission File No. 0-3947.
(10) l. Hach Company 1995 Non-Employee Director Stock Plan -- hereby incorporated by reference to Exhibit (10)l. to the Registrant's Annual Report on Form 10-K for the year ended April 30, 1996, Commission File No. 0-3947.
(10) m. Revolving Credit Agreement dated as of July 7, 1997 among the Registrant, Hach Europe S.A. and Colorado National Bank.
(13) n. Pages 2, 3, 4 and 14 through 27 of the Registrant's Annual Report to Stockholders for the year ended April 30, 1997.
(21) o. Subsidiaries of the Registrant.
(23) p. Consent of Coopers & Lybrand L.L.P.
(27) q. Financial Data Schedule (electronic filing only)
(b) No reports on Form 8-K were filed during the quarter ended April 30, 1997.
(c) and (d) The exhibits and financial statement schedules required to be filed by this item are attached to or incorporated by reference in this report.