Annual Report (Form 10-K), fiscal year 1994

Item 1. Business
General
The registrant, an Indiana corporation (hereinafter, the "Company"), is the leading independent designer, manufacturer and supplier of window systems to the combined automobile, light truck and van, bus, heavy truck and recreational vehicle markets in North America. The Company's window systems include various types of automotive windshields; rear, vent, quarter, push out and sliding windows; and window regulator systems, latches, door frames and related components. The Company also manufactures door systems for military and recreational vehicles and injection molded thermoplastic products and other products primarily for sale to the automotive industry. The Company's products are sold to major North American transportation original equipment manufacturers ("OEMs") including Ford, Chrysler, General Motors, AutoAlliance International, Inc. (a joint venture between Ford and Mazda), Mitsubishi, Nissan, Fleetwood, Winnebago, Navistar, Paccar (Peterbilt and Kenworth trucks) and the manufacturers of virtually all of the intra and intercity buses in the United States and Canada.
Business Strategy
The Company's business objective is to expand profitably its position as the leading independent supplier of window systems to the combined automotive, light truck and van, bus, heavy truck and recreational vehicle markets in North America. It also intends to broaden its product offerings to these markets, as well as expand its capabilities to complementary markets. Continued focus on achieving recognition as a world class manufacturer is a key component of this strategy. The Company continually strives for world class status through technical innovation, quality excellence, cost competitiveness and strategic alliances and acquisitions.
Technical Innovation. The Company's most significant innovative achievement has been the development of reaction injection molded ("RIM") modular windows in the mid-1980's. This value-added product resulted from a long internal development effort and accounted for 35% of net sales in 1994. In recent years, as automotive OEMs increasingly shifted design, innovation, quality and product improvement responsibility to their suppliers, the Company increased its research, engineering and development expenditures (from $2.7 million in 1989 to $10.9 million in 1994), including the addition of an advanced design group and Company-wide computer-aided design capability. The Company has also added more sophisticated program management and complex manufacturing information systems. The Company's capabilities now include prototype and product development, specification testing and manufacturing engineering assistance. This has resulted in increased opportunities for the Company to participate earlier in the product planning process and to add value by furnishing engineering and design services and providing a broader range of parts required for vehicle assembly.
Quality Excellence. The Company emphasizes a continuous improvement philosophy to its employees on all facets of operations including product quality. As a result of its commitment to quality, the Company has achieved Q1 and Pentastar quality ratings at its key manufacturing plants from Ford and Chrysler, respectively, and has received quality awards from Fleetwood (a recreational vehicle OEM), Nissan and other OEMs. At the corporate technical center, engineers examine the Company's and its competitors' products to evaluate alternative designs, suggest marketing opportunities and solve potential production problems, all of which serve to improve and maintain the Company's stringent quality standards.
Competitive Cost. The Company strives to achieve a competitive cost to its customers through its emphasis on quality excellence and its involvement in the early stages of product development. The Company is a highly reliable and timely supplier able to meet its customers' demanding delivery requirements, while constantly focusing on reducing OEM inventory levels.
Strategic Alliances. In 1986, Ford entered into a supply agreement (the "Supply Agreement") with the Company. Pursuant to the Supply Agreement, Ford agreed to purchase from the Company at least 70% of the requirements by dollar volume of Ford and Ford Canada for modular framed glass parts using RIM and polyvinyl chloride ("PVC") technology, commencing with the 1990 model year. Ford's purchase obligations are contingent upon the Company being competitive as to technology, quality, service, price and delivery. The Supply Agreement, which is currently scheduled to expire at the end of the 1998 model year, has been complemented by a supply agreement between Ford and the Company dated January 31, 1994 (the "1994 Supply Agreement"), which extends through the 1998 calendar year and which provides for Ford to purchase 100% of its requirements for those parts currently supplied by the Company (including parts other than modular windows), subject to specified annual price reductions. Since 1990, the Company has and is continuing to supply at least 70% of Ford's requirements for modular framed glass, which have predominately been modular windows using RIM technology. The Company works closely with Ford during the development and production by Ford of new products utilizing parts supplied by the Company, and net sales to Ford have increased from $26.7 million in 1985 to $434.2 million in 1994.
The Company also benefits from an exclusive purchase and supply agreement with H.S. Die & Engineering of Grand Rapids, Michigan. H.S. Die supplies the molds (i.e., tooling) to the Company necessary to manufacture modular windows. Working closely with OEMs and H.S. Die, the Company is able to move rapidly from design to finished tooling for modular windows. As a result of this alliance, preproduction lead-times on new programs have been decreased by more than a year, which was demonstrated in Ford's development of the recently introduced Mustang model.
Another strategic alliance links the Company with Schade KG, a modular and conventional window and door systems supplier located in Plettenberg, Germany. Pursuant to a Reciprocal Technology License and Cooperative Venture Agreement, both companies have cooperated in developing new business proposals. Schade helped the Company develop technical capabilities in PVC modular windows. The Company commenced production of PVC modular windows in 1993 and currently supplies PVC modular windows for several models. In addition, technology acquired from the Company's alliance with Schade has enabled the Company to supply door frames for General Motors' 1995 Saturn Coupe and Sedan.
In 1992, the Company formed a joint venture with Pollone S.A., a Brazilian automotive parts supplier, for the purpose of supplying encapsulated window assemblies to South American automakers. Located near Sao Paulo, Brazil, the joint venture, Pollexco, is owned 49% by the Company and 51% by Pollone, S.A. Production of products for Autolatina, a joint venture between Ford and Volkswagen, began in late 1993.
Strategic Acquisitions. In acquisitions, the Company seeks processes, products or markets which complement the Company's existing businesses. The Company added high volume conventional window capacity to its product line as a result of a 1986 acquisition from Irvin Industries. In the mid-1980's, Ford--initially the Company's only RIM window customer--started its own subsidiary to manufacture RIM windows in Fulton, Kentucky. In 1986, the Company acquired Ford's RIM window subsidiary and manufacturing facility. In 1988, the Company acquired Nyloncraft, Inc., which manufactures injection molded thermoplastic products primarily for the automotive industry. Nyloncraft also supplies plastic components to six of the Company's manufacturing facilities. In 1990, the Company acquired the window regulator business operated by Hoover Universal, Inc., a subsidiary of Johnson Controls, Inc. The Company's technical capabilities, in particular the corporate technical center, have enabled it to redesign several products, reduce operating expenses and improve overall operations in the window regulator business.
Market Description and Industry Factors
Automotive Market
General. The overall market for new cars and light trucks in North America is large and cyclical, with average annual growth of 1% to 2%. However, considerable growth or decline routinely occurs within specific product segments or model lines. In particular, light truck sales have grown rapidly over the last 15 years as compared to the demand for cars. This growth in light truck demand primarily reflects the increased use of mini-vans and sport utility vehicles. The Company believes it will continue to be well-positioned as a supplier of window systems to OEMs in this higher growth market segment.
Changing Supplier Policies. Several developments have substantially altered the competitive environment for automotive suppliers, including consolidation among suppliers and increased outsourcing of key components by OEMs. During the 1980s, Ford, Chrysler and General Motors began to reduce their supplier base, focusing on long-term sole-source contracts with more capable suppliers. Increasingly, the criteria for selection include not only cost, quality and responsiveness, but also certain full-service capabilities including design, engineering and project management support. OEMs now have rigorous programs for evaluating and rating suppliers which encompass quality, cost control, reliability of delivery, new technology implementation, engineering competence, continuous improvement programs and overall management. Under these programs, each facility operated by a supplier is evaluated independently. The suppliers who obtain superior ratings are favorably considered for new business; those who do not may continue their existing contracts, but normally do not receive additional business. As a result, these new supplier policies have sharply reduced the number of component suppliers. In the 1990's, OEM supply agreements have incorporated productivity provisions which specify annual price reductions which may be offset by product improvements, manufacturing improvements and/or various other mutually agreed upon methods.
Transplants. Over the last ten years, Japanese manufactured vehicles have gained an increasing share of the North American market. In addition, a growing percentage of such vehicles are being made at North American operations of Japanese manufacturers ("Transplants"). Transplants receive component parts from a variety of sources including suppliers in Japan, Japanese suppliers who establish U.S. facilities and existing U.S. component suppliers. Because of the current market share of the Transplants, supplying them is an attractive opportunity. To date, the Company has been selected to supply window systems for certain Nissan, Mazda and Mitsubishi models manufactured in North America. The Company has also been selected to supply fixed vent windows for the new BMW model scheduled to be built in South Carolina in 1995.
Non-Automotive Market
The market for heavy trucks in North America is cyclical, and the Company believes it is well positioned to take advantage of supply opportunities which arise as aging fleets are replaced with new models. The availability of federally funded programs and the price of gasoline and diesel fuel are factors which affect the demand for intracity buses purchased for municipal mass transit systems. The market for recreational vehicles is influenced significantly by the strength of the economy and the level of consumer discretionary spending. Recent growth trends in the sale of recreational vehicles have been positive.
Products
The Company designs, engineers, manufactures and supplies plastic and metal framed window assemblies, manual and power glass regulator systems and injection molded thermoplastic products principally for North American car, light truck and van, heavy truck, bus, military and recreational vehicle OEMs. The Company does not manufacture or sell primary glass.
Modular Window Systems. The Company's modular, plastic framed windows are value-added parts because clips, weatherstripping and bright trim are attached during the molding process. The module-manufacturing processes used by the Company give the OEM designers great flexibility in window shape, sealing and aerodynamics. The module supplied to the OEM also lowers its parts inventory, reduces part weight and reduces assembly efforts. The Company produces modular windshields and rear windows, as well as fixed quarter, sliding and push out modular windows.
The Company utilizes RIM technology and also PVC injection molding technology to manufacture modular windows. In RIM technology, liquids are mixed and fed into a mold that holds glass, framing and fastening components. The mixture polymerizes, and the completed module is removed, trimmed, cleaned, inspected and packed for shipment. In PVC injection molding, solid plastic subjected to high temperature and pressure flows in liquid form into the mold where it reverts without chemical reaction to a solid.
Conventional Windows. The Company also produces conventionally framed window assemblies utilizing painted cold-rolled steel, stainless steel, rubber and/or aluminum. The glass or plastic glazed window assemblies supplied for mass transit systems have durable aluminum frames and non-leak weatherstripping. The Company supplies a wide variety of conventional windows to car, light truck and heavy truck OEMs, including pivoting wing ventilator windows, fixed and movable quarter windows and swing-out and sliding windows. The Company's flush-mount recreational vehicle windows seal tightly and feature independent sliding screens, removable storm windows and an anti-theft locking mechanism.
Window Regulator Systems. The Company supplies manual and electrically powered versions of regulators (the mechanisms for lifting and lowering windows) for front and rear side windows and tailgate windows. The Company stresses safety, weight, glass stability, window system integration, parts reduction and enhanced vehicle design flexibility in its window regulators.
Injection Molded Thermoplastic Products. The Company's Nyloncraft division manufactures injection molded inside and outside door handles, door latch components, fan shrouds, airspring pistons, window crank handles and a variety of other custom engineered products. The Company molds parts from nylons, polyesters, acetal and other engineered thermoplastic materials.
Door Systems. The Company designs and manufactures preassembled doors for Class A motorhomes and ballistic door/window systems for the Hummer tactical military vehicle. The Company's preassembled door systems improve the OEMs' installation productivity and assist in design flexibility.
Customers and Marketing
The Company supplies its products primarily to Ford, Chrysler and General Motors. Historical sales of the Company by customer group are set forth below. The loss of Ford, Chrysler or General Motors as a customer would have a material adverse effect on the Company.
Sales of the Company's products to OEMs are made directly by the Company's sales and engineering personnel located at the Company's offices in the Detroit area and Elkhart, Indiana. Through these sales and engineering offices, the Company services its OEM customers and manages its continuing programs of product design improvement and development.
The Company's customers award contracts that normally cover parts to be supplied for a particular vehicle model. Such contracts typically extend over the life of the model, which is generally four to seven years. The primary risk to the Company is that an OEM will produce fewer units of a model than anticipated. In addition, the Company competes for new business to supply parts for successor models and therefore runs the risk that the OEM will not select the Company to produce parts on a successor model. In order to reduce its reliance on any one model, the Company produces parts for a broad cross- section of both new and more mature models. The Company has been chosen as a supplier on a variety of generally successful car, light truck and van models.
Based on its ability to service its OEM customers' needs effectively, the Company believes it will be able to maintain its position on most existing models, while also expanding into new models as further consolidation in the OEM supplier base occurs. The Company believes that the presence of Transplants represents an attractive growth opportunity over the next decade. The Company is currently supplying products for Mazda, Nissan and Mitsubishi models. The Company believes that it is favorably positioned to increase its business with the Transplants because of the Company's reputation for technical innovation, quality excellence, reliability and competitive cost.
In the non-automotive markets, the Company sells various types of conventional window systems to North American OEMs of medium and heavy trucks, recreational vehicles and buses. The Company is the dominant supplier of wing ventilator windows for medium and heavy trucks manufactured in the United States and Canada. The Company's customers include Navistar, Freightliner, Volvo GM Heavy Truck Corp., Mack Truck, Paccar (Kenworth and Peterbilt models) and Ford. The Company supplies aluminum framed window systems to Fleetwood and Winnebago, the leading recreational vehicle OEMs in North America, as well as a number of other recreational vehicle manufacturers. The Company is the dominant supplier of metal framed window systems to intra and intercity bus OEMs.
The Company also manufactures preassembled doors for certain recreational vehicle OEMs and door systems for the Hummer tactical military vehicle.
The Company maintains separate sales and engineering groups at its corporate offices in Elkhart, Indiana to service these non-automotive markets. The Company has received "Supplier of the Year" and "Master of Quality" awards from Fleetwood and Freightliner, respectively, as well as recognition for quality and delivery accomplishments from other non-automotive OEMs. The Company believes that its cost competitiveness, quality excellence and design and engineering capabilities obtained in the automotive supply markets enable it to compete effectively in non-automotive markets as well.
Competition
The Company operates in a highly competitive environment in each of its markets. The number of the Company's competitors in the automotive markets is expected to decrease due to the supplier consolidation resulting from changing OEM policies. The Company's major competitors include Donnelly Corporation, Libbey-Owens-Ford Co., Guardian Industries, Dura, Inc., Rockwell International, Hehr International, OEM internal operations and a large number of smaller operations.
The Company principally competes for new business both at the beginning of the development of new models and upon the redesign of existing models by its major customers. New model development generally begins two to four years prior to the marketing of such models to the public. Once a producer has been designated to supply parts to a new program, an OEM will generally continue to purchase those parts from the designated producer for the life of the program. Competitive factors in the market for the Company's products include product quality, design and engineering competence, customer service, product mix, new product innovation, cost and timely delivery. The Company believes that its business strategy allows it to compete effectively in the markets for its products.
The Company believes that it is well-positioned to succeed in this highly competitive supplier environment. The Company's size, emphasis on quality, customer service orientation, manufacturing expertise and technological leadership all contribute to the Company's success in the transportation supply industry.
Research, Engineering and Development
The Company expended approximately $7.3 million, $9.8 million and $10.9 million on research, engineering and development during 1992, 1993 and 1994, respectively. (Amounts for 1992 and 1993 have been restated to include value engineering expenses consistent with the 1994 classification.) These increased expenditures have improved significantly the Company's capacity to provide complete engineering and design services to support its product lines. The Company also has a corporate technical center in Elkhart, Indiana for basic research and development, as well as a large engineering and design staff in the Detroit area which works closely with automotive OEMs during all phases of new product development and production.
Foreign Operations
In addition to its domestic facilities described below, the Company owns a manufacturing facility in Aurora, Ontario, Canada. The financial information concerning the Canadian operations of the Company is set forth in Notes 9, 10 and 14 to the Company's Consolidated Financial Statements included elsewhere herein. In June, 1994, the Company terminated its lease for a manufacturing facility in Juarez, Mexico and consolidated its operations in Pikeville, Tennessee.
Employees
The Company employs a total of approximately 4,100 persons, of whom approximately 19% are covered by collective bargaining agreements. The Company believes its relationship with its employees is good.
Environmental Matters
The Company believes it is in substantial compliance with federal, state, local and foreign laws regarding discharge of materials into the environment and does not anticipate any material adverse effect on its future earnings, capital expenditures or competitive position as a result of compliance with such laws.
For a discussion of potential environmental liabilities, see "Management's Discussion and Analysis of Financial Condition and Results of Operations-- Liquidity and Capital Resources" and Note 7 to the Company's Consolidated Financial Statements included elsewhere herein.
Item 2.



Item 2. Properties
The Company operates 10 manufacturing facilities, all of which are in good condition. The Company manufactures framed window assemblies at its Elkhart, Jacksonville, LaGrange, Lawrenceburg, Fulton and Toledo manufacturing facilities. Injection molded thermoplastic parts are manufactured at the Bowling Green and Mishawaka facilities. Window regulator systems, latches and related components are manufactured at the Jacksonville and Pikeville facilities. Except as noted below, the Company owns all of these facilities.
Approximate Building Size Location (in square feet)
Elkhart 270,000 (1) Jacksonville, Florida 260,000 LaGrange, Indiana 140,000 Lawrenceburg, Tennessee 150,000 Fulton, Kentucky 80,000 (2) Bowling Green, Kentucky 32,000 Mishawaka, Indiana 120,000 (3) Toledo, Ohio 61,000 (4) Pikeville, Tennessee 101,900 (5) Aurora, Ontario, Canada 140,000 _________________________________
(1) Approximately 35,000 square feet of this facility houses the Company's executive offices and approximately 140,000 square feet of the facility are used in manufacturing.
(2) The Company leases the Fulton, Kentucky facility pursuant to a lease which expires in 1997. The Company is entitled to extend the term of the lease for five (5) additional terms of three (3) years each and may, at its option, purchase the facility at any time during the lease.
(3) The Company leases the Mishawaka, Indiana facility pursuant to a lease which expires in 1998. The Company is entitled to extend the term of such lease until 2003 and may, at its option, purchase such facility at any time during the term of the lease.
(4) The Company leases the Toledo, Ohio facility pursuant to a lease which expires on May 31, 1998.
(5) The Company leases the Pikeville, Tennessee facility pursuant to a Lease Purchase Contract entered into as part of agreements for the issuance of two series of industrial development bonds. Title to the facility will be transferred to the Company for Ten Dollars ($10.00) on completion of payment on the bond issues on July 1, 1999. Rent is payable semi- annually with respect to the Series A bonds and is equal to the principal and interest due on the bonds. Semi-annual principal payments on the Series A bonds currently are $75,000.
Item 3.

Item 3. Legal Proceedings
On February 22, 1993, the United States filed a lawsuit in the United States District Court for the Northern District of Indiana against the Company and certain other parties. On July 20, 1993, the Indiana Department of Environmental Management ("IDEM") joined the lawsuit. The lawsuit seeks recovery of the costs of enforcement, prejudgment interest and an amount in excess of $6.8 million, which represents costs incurred to date by the United States Environmental Protection Agency ("EPA") and IDEM in connection with the contamination of soil and groundwater on the Company's property in Elkhart, Indiana, and a well field of the City of Elkhart in close proximity to the Company's facility. The lawsuit also seeks a declaration that the Company and the other defendants are liable for any future costs incurred by the EPA and IDEM in connection with the site.
For further information, see "Management's Discussion and Analysis of Results of Operations and Financial Condition" and Note 7 to the Company's Consolidated Financial Statements included elsewhere herein.
Item 4.

Item 4. Submission of Matters to Vote of Security Holders
None
Executive Officers of the Company
The names and ages of all executive officers of the Company, all positions and offices held by each of them and the period during which each such person has served in these offices and positions is set forth below:
Name Age Position and Offices
James J. Lohman 53 Chairman of the Board and Chief Executive Officer
James O. Futterknecht, Jr.48 President and Chief Operating Officer
Joseph A. Robinson 56 Secretary, Treasurer and Chief Financial Officer
James E. Crawford 48 Vice President and Managing Director-Value Management and Product Research and Development
Louis R. Csokasy 47 Vice President and Managing Director- Automotive Window and Door Systems
Terrance L. Lindberg 52 Vice President and Managing Director-RV, Mass Transit and Heavy Truck Window and Door Systems
Mr. Lohman has been the Chairman of the Board of Directors since 1985 and Chief Executive Officer since 1983. He joined the Company in 1964 and was Group Vice President from 1978 to 1981 and was President from 1981 to 1992. He has been a director of the Company since 1978.
Mr. Futterknecht joined the Company in 1970, was Vice President - Corporate Sales from 1976 until 1984, was Vice President - Automotive Products from 1984 until 1987, was Vice President - Automotive Sales and Engineering from 1987 to 1990, and was Executive Vice President from 1990 to 1992. He was elected as President and Chief Operating Officer and was appointed as a director in 1992.
Mr. Robinson joined the Company as Secretary, Treasurer and Chief Financial Officer in December 1991 and was appointed as a director in 1992. Prior to that time, he was employed by the Standard Products Co., a manufacturer of automotive parts as Vice President from 1990 to 1991 and as Vice President - Finance from 1976 to 1990.
Mr. Crawford joined the Company in 1978, was Product Engineering Manager from 1979 until 1984, was Vice President - Engineering/Research from 1984 until 1987, Vice President - Modular Operations from 1987 to 1988, Vice President - Group Operations/ Modular Products from 1988 to 1992, and Vice President - Product Development and Value Engineering from 1992 to 1995. He is currently Vice President and Managing Director - Value Management and Product Research and Development.
Mr. Csokasy joined the Company in 1972. He was General Manager - Recreational Vehicles from 1985 to 1987, Manager of Corporate Engineering from 1987 to 1990, Vice President - Engineering from 1990 to 1992, and Vice President - Engineering and Quality from 1992 to 1995. He is currently Vice President and Managing Director - Auto Window and Door Systems.
Mr. Lindberg joined the Company in 1983, was Manager of Mass Transit and Heavy Truck Products from 1984 to 1987, was Manager of Group Operations from 1987 until 1990, was Vice President - Group Operation from 1990 to 1992. Mr. Lindberg was Vice President - Specialty Products and General Manager - Nyloncraft from 1992 to 1995. He is currently Vice President and Managing Director - RV, Mass Transit and Heavy Truck Window and Door Systems.
PART II.
Item 5.

Item 5. Market for the Registrant's Common Stock and Related Shareholder Matters
The Common Shares are traded on the American Stock Exchange under the symbol EXC. The following table sets forth for the fiscal periods indicated the high and low sale prices of the Common Shares, as reported by the American Stock Exchange, and dividends declared per share.
Dividends Share Prices Declared High Low Per Share
Fiscal Year Ended December 31, 1993: 1st Quarter $18.250 $13.875 $.06 2nd Quarter 19.625 15.500 .08 3rd Quarter 21.000 16.375 .08 4th Quarter 19.875 15.750 .08 Fiscal Year Ended December 31, 1994: 1st Quarter 20.250 16.250 .08 2nd Quarter 19.250 14.875 .09 3rd Quarter 17.875 14.750 .09 4th Quarter 15.875 13.000 .11
As of March 10, 1995, there were 507 holders of record of the Common Shares.
The Company has paid cash dividends every quarter since becoming a public company in April 1984. The Company intends to continue to pay quarterly cash dividends on its Common Shares, but the payment of dividends and the amount and timing of such dividends will depend upon the Company's earnings, capital requirements, financial condition and other factors deemed relevant by the Company's Board of Directors.
Item 6.

Item 6. Selected Financial Data
SELECTED CONSOLIDATED FINANCIAL INFORMATION (Amounts in thousands, except per share amounts)
The following table presents selected consolidated financial data of the Company as of and for the five fiscal years ended December 31, 1994. The selected consolidated financial data have been derived from audited consolidated financial statements of the Company. Such selected consolidated financial data should be read in conjunction with "Management's Discussion and Analysis of Results of Operations and Financial Condition" and the Consolidated Financial Statements of the Company and the notes thereto included elsewhere herein. The comparability of the results for the periods presented is significantly affected by certain events, as described in "Management's Discussion and Analysis of Financial Condition and Results of Operations--General."
Item 7.

Item 7. Management's Discussion and Analysis of Results of Operations and Financial Condition
General
The Company was founded in 1928 and became a public company in April 1984. Since 1984, the Company has expanded sales internally and through several strategic acquisitions designed to complement the Company's businesses. In January 1986, the Company acquired Irvin Industries, Inc.'s wing ventilator window business operated in Jacksonville, Florida. Later in 1986, the Company consummated a private placement of Common Shares to Ford in exchange for cash, a long-term supply contract and a Ford subsidiary engaged in the manufacture and sale of modular window systems. In 1988, the Company acquired Nyloncraft, Inc. which manufactures injection molded thermoplastic products primarily for the automotive industry. In 1990, the Company acquired the window regulator business operated by Hoover Universal, Inc., a subsidiary of Johnson Controls, Inc., which the Company now operates under the name "Excel Systems". The comparability of the Company's results on a period-to-period basis is significantly affected by such acquisitions.
Results of Operations
1994 Compared to 1993
Sales for the year ended December 31, 1994 totaled a record $607.2 million, an increase of $91.5 million, or 18%, over the preceding year. This increase in sales resulted from generally more favorable economic conditions in North America as total light vehicle production increased 11% and light vehicle production of Ford in North America also increased 11%. Specifically, sales of Ford Explorer, Aerostar, Ford/Nissan mini-vans, Ford F-Series trucks, Chrysler LH sedans and Dodge trucks, helped account for improved sales volume.
Gross profit totaled $61.4 million, or 10.1% of sales, as compared with $51.7 million, or 10.0% of sales for the prior year. Gross profit in dollars improved as a result of the higher marginal contribution on increased sales. Such marginal contribution was sufficient to offset the impact of price reductions in accordance with supply agreements, the effect of start-up costs on new programs and inflationary cost increases.
Selling, administrative and engineering expenses totaled $32.7 million for 1994, an increase of 9%, or $2.7 million, from 1993. 1994 expenses reflect higher costs in the engineering and development areas consisting of additional personnel, increased research and development activities and costs of support facilities. As a percent of sales, selling, administrative and engineering expenses declined to 5.4% in 1994 as compared to 5.8% in 1993.
Interest costs of $3.4 million for 1994 was similar to the $3.5 million incurred in 1993, and other income of $2.1 million in 1994 was similar to the $2.0 million in 1993. Interest income (included in other income) dropped from $1.9 million in 1993 to $1.8 million in 1994 due to switching investments from taxable to tax-free securities.
The income tax provision was 37% of pre-tax income in 1994, down from 38.5% in the preceding year. The 1994 percentage reflected the impact of certain tax credits and investing in tax-free securities.
In 1992, the Company provided an allowance of $4.5 million for restructuring costs. This charge represented estimated costs to downsize its Excel Metalcraft, Ltd. (Metalcraft) plant and relocate production of certain light truck and van windows to other manufacturing plants of the Company. Totals of $1.8 million in 1994, and $1.0 million in 1993 were incurred to relocate a portion of the production and downsize this facility.
1993 Compared to 1992
Sales for the year ended December 31, 1993 totaled a record $515.7 million, an increase of $88.8 million, or 21%, over the preceding year. This increase in sales resulted from generally more favorable economic conditions in North America as total light vehicle production increased 12% and light vehicle production of Ford in North America increased 15%. Specifically, sales of new programs, including Ford/Nissan mini-vans, Ford F-Series and Ranger trucks, Chrysler LH sedans and Dodge trucks, helped account for improved sales volume.
Gross profit totaled $51.7 million, or 10.0% of sales, as compared with $43.6 million, or 10.2% of sales for the prior year. Gross profit in dollars improved with the improved level of sales. Gross profit as a percent of sales declined due to a change in product mix and start-up costs related to new programs.
Selling, administrative and engineering expenses totaled $30.1 million for 1993, an increase of 6%, or $1.8 million, from 1992. The increase reflected, among other items, an increase in engineering personnel costs, amounts for outside consultants and an increase in the provision for incentive compensation. As a percent of sales, selling, administrative and engineering expenses declined to 5.8% in 1993 as compared to 6.6% in 1992.
Interest costs of $3.5 million for 1993 compared to the $5.6 million incurred in 1992. The decline in interest expense reflected the reduction in interest and the prepayment penalty incurred in 1992 related to Senior Notes which were retired in 1992.
Other income in 1993 totaled $2.0 million, an increase of $1.3 million from 1992. Other income in 1993 included $1.9 million of interest income arising from the investment of proceeds of the Company's Common Share offerings in March 1993 and June 1992.
The income tax provision was 38.5% of pre-tax income in 1993, down from 40.5% in the preceding year. The 1993 percentage reflected the impact of certain tax credits and lower effective state tax rates.
Liquidity and Capital Resources
Working capital totaled $96.1 million as of December 31, 1994, and the current ratio was 2.20 to 1. Cash and marketable securities totaled $39.7 million as of December 31, 1994.
In 1994, cash flow from operations totaled $21.3 million, and a public offering of Common Shares in March 1994 raised an additional $7.0 million. Cash expenditures for capital equipment amounted to $25.5 million, and dividends totaled $4.0 million. In addition, payments of long-term debt totaled $1.7 million. Overall, cash and marketable securities decreased $6.9 million in 1994.
Long-term debt totaled $33.6 million as of December 31, 1994, or 21% of total capitalization. Included in this amount is $30 million of Convertible Notes issued in January 1990 to affiliates of CIGNA Corporation and Textron, Inc. The principal balance of each Convertible Note is convertible, at the option of the holder, into Common Shares at a current price of $13.214 per share.
Capital expenditures for 1995 are budgeted at $24.2 million. The Company's cash balances, operating cash flows and short-term lines of credit are expected to be adequate for anticipated operating requirements in 1995.
The Company entered into a 1994 Supply Agreement with Ford which requires the absorption of the effects of inflation and requires specified price reductions or productivity offsets to price reductions. The Company believes that this type of agreement is typical in the automotive supply business, and the Company's ability to maintain gross margins at or near their present levels will be dependent on its ability to substantially offset the effects of this and other such agreements through productivity improvements, cost reduction programs and implementation of value analysis/value engineering programs, which reduce part weight and system costs to the customer.
A chemical cleaning compound, trichloroethylene ("TCE"), has been found in the soil and groundwater on the Company's property in Elkhart, Indiana, and, in 1981, TCE was found in a well field of the City of Elkhart in close proximity to the Company's facility. The Company has been named as one of nine potentially responsible parties ("PRPs") in the contamination of this site. EPA and IDEM have conducted a preliminary investigation and evaluation of the site and have undertaken temporary remedial action in the nature of air- stripping towers. In early 1992, the EPA issued a Unilateral Order under Section 106 of the Comprehensive Environmental Response, Compensation and Liability Act which required the Company and other PRPs to undertake remedial work. The Company and the other PRPs have reached an agreement regarding the funding of groundwater monitoring and the operation of the air-strippers as required by the Unilateral Order. The Company was required to install and operate a soil vapor extraction system to remove TCE from the Company's property. The Company has installed and is operating the equipment pursuant to the Unilateral Order. In addition, the EPA and IDEM have asserted a claim for reimbursement of their investigatory costs and the costs of installing and operating the air-strippers on the municipal well field (the "EPA Costs"). On February 22, 1993, the United States filed a lawsuit in the United States District Court for the Northern District of Indiana against eight of the PRPs, including the Company. On July 20, 1993, IDEM joined in the lawsuit. The lawsuit seeks recovery of the costs of enforcement, prejudgment interest and an amount in excess of $6.8 million, which represents costs incurred to date by the EPA and IDEM, and a declaration that the eight defendant PRPs are liable for any future costs incurred by the EPA and IDEM in connection with the site.
The Company does not believe the annual cost to the Company of monitoring groundwater and operating the soil vapor extraction system and the air- strippers will be material. Each of the PRPs, including the Company, is jointly and severally liable for the entire amount of the EPA Costs. Certain PRPs, including the Company, are currently attempting to negotiate an agreed upon allocation of such liability. The Company believes that adequate provisions have been recorded for its costs and its anticipated share of EPA Costs and that its cash on hand, unused lines of credit or cash from operations are sufficient to fund any required expenditures.
The EPA has also named the Company as a PRP for costs at three other disposal sites. It has also asked the Company for information about contamination at other sites. The Company believes it either has no liability as a responsible party or that adequate provisions have been recorded for any costs to be incurred.
Inflation
The impact of inflation on operating results for the years 1994, 1993 and 1992 was not significant. Raw material costs during these periods have increased; however, use of LIFO inventory methods by the Company has minimized any impact from inflation. The majority of the Company's property, plant and equipment is of recent purchase, and depreciation charges are based on historical cost.
Item 8.


Item 8. Financial Statements and Supplementary Data
Following are the consolidated financial statements of the Company and its subsidiaries, the notes thereto, and the auditors' report.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of Excel Industries, Inc.
In our opinion, the accompanying consolidated balance sheet and the related consolidated statements of income, of shareholders' equity and of cash flows present fairly, in all material respects, the financial position of Excel Industries, Inc. and its subsidiaries at December 31, 1994 and 1993, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1994, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements 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.
As discussed in the notes to consolidated financial statements, effective January 1, 1992, the Company changed its method of accounting for postretirement health care benefits by adopting, on an immediate recognition basis, Statement of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions." The Company also changed its method of accounting for income taxes, effective January 1, 1992, by adopting Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes."
PRICE WATERHOUSE LLP South Bend, Indiana February 16, 1995
EXCEL INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS
Excel Industries, Inc. (Company) is engaged in the manufacture and sale of a broad line of window assemblies, manual and electric window regulators, upper door frames, and injection molded thermoplastic parts. The Company's products are used in the manufacture of automobiles, heavy and light trucks, buses and recreational vehicles.
2. SIGNIFICANT ACCOUNTING PRINCIPLES
Principles of consolidation
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions, profits and balances are eliminated.
Net income per share
Primary net income per share is computed using the weighted average number of shares outstanding during the period. Shares used to compute primary net income per share were 10,805,000 for 1994, 10,122,000 for 1993, and 7,553,000 for 1992.
Fully diluted earnings per share assumes, when dilutive, the conversion of the 10% convertible subordinated notes which were issued on January 2, 1990.
Short-term investments and marketable securities
Short-term investments amounting to $121,000 at December 31, 1994 and $5,771,000 at December 31, 1993 consist of investments generally in money market funds.
Marketable securities represent investments with maturities generally longer than 90 days which are classified as "available for sale" securities in accordance with SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities". All securities mature prior to December 1995. Marketable securities are carried at cost which approximates fair value and consist of the following:
December 31, 1994 1993 (000 Omitted) Government securities $18,917 $17,011 Tax-free municipal securities 17,403 12,773 Municipal fund par value preferred shares 3,200 10,002 $39,520 $39,786
Other income includes interest income of $1,812,000 in 1994, $1,916,000 in 1993, and $1,010,000 in 1992.
Inventories
Substantially all inventories are valued at the lower of cost or market using the last-in, first-out (LIFO) cost method.
Customer tooling to be billed
Customer tooling to be billed represents costs incurred by the Company on behalf of the customer and is generally covered by purchase orders and recoverable during the next twelve months.
Properties
Plant and equipment are carried at cost and include expenditures for new facilities and those which substantially increase the useful lives of existing plant and equipment. Expenditures for repairs and maintenance are expensed as incurred.
Depreciation
The Company provides for depreciation of plant and equipment using methods and rates designed to amortize the cost of such equipment over its useful life. Depreciation is computed principally on accelerated methods for new plant and equipment and the straight-line method for used equipment. The estimated useful lives range from 10 to 40 years for buildings and improvements and 2 to 20 years for machinery and equipment.
Goodwill
The excess of purchase price over the fair value of net assets of acquired businesses (goodwill) is amortized on a straight-line basis over 20 to 40 years.
Fair Value of Financial Instruments
The Company estimates the fair value of all financial instruments where the face value differs from the fair value, primarily long- term debt, based upon quoted amounts or the current rates available for similar financial instruments. If fair value accounting had been used at December 31, 1994, instead of the historic basis accounting used in the financial statements, long- term debt would exceed the reported level by approximately $1.5 million.
Income taxes
Deferred income taxes are provided using the liability method in accordance with Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes".
3. RESEARCH, ENGINEERING AND DEVELOPMENT
Research, engineering and development expenditures charged to operations approximated $10,916,000 in 1994, $9,844,000 in 1993, and $7,298,000 in 1992. Amounts for 1993 and 1992 have been reclassified to include value engineering expenses consistent with the 1994 classification.
4. INVENTORIES
Inventories consist of the following: December 31, 1994 1993 (000 Omitted) Raw materials $21,301 $17,948 Work in process and finished goods 13,037 12,378 LIFO reserve (762) (459) $33,576 $29,867
Inventories not on LIFO were $819,000 at December 31, 1994 and $1,759,000 at December 31, 1993.
5. PENSION AND OTHER EMPLOYEE BENEFIT PLANS
Pension and profit sharing plans
The Company and its subsidiaries provide retirement benefits to substantially all employees through various pension, savings and profit sharing plans. Defined benefit plans provide pension benefits that are based on the employee's final average salary for salaried employees and stated amounts for each year of credited service for hourly employees. Contributions and costs for the Company's various other benefit plans are generally determined based on the employee's annual salary. Total expense relating to the Company's various retirement plans aggregated $3,291,000 in 1994, $2,199,000 in 1993, and $2,102,000 in 1992.
Components of net pension expense for all defined benefit pension plans are as follows: Year Ended December 31, 1994 1993 1992 (000 Omitted) Service cost $1,622 $1,319 $1,312 Interest cost 1,457 1,344 1,245 Actual return on assets 133 (617) (1,242) Net amortization and deferral (1,396) (582) 190
Net defined benefit pension expense $1,816 $1,464 $1,505
The funded status of defined benefit pension plans is as follows:
December 31, 1994 1993 (000 Omitted) Plan assets at fair value $16,475 $15,844 Projected benefit obligations 20,068 20,421 (3,593) (4,577) Unrecognized costs 1,080 1,862
Net accrued pension costs $(2,513) $(2,715) Actuarial present value of: Vested benefit obligations $15,764 $15,644
Accumulated benefit obligations $16,623 $16,655
Major assumptions: Discount rate 8% 7.5% Rate of increase in compensation 5% 5% Expected rate of return on plan assets8% 8%
It is generally the Company's policy to fund the ERISA minimum contribution requirement. Plan assets are invested primarily in corporate equity securities and bonds and insurance annuity contracts.
Supplemental and other postretirement benefits
In addition to providing pension benefits, the Company provides certain health care benefits to substantially all active employees and postretirement health care benefits to management employees. The Company is primarily self-insured for such benefits and prior to 1992 followed the practice of expensing such benefits on a pay-as-you-go basis.
In 1992, the Company adopted the provisions of SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions." The Company elected to immediately recognize the Accumulated Postretirement Benefit Obligation (APBO) as of January 1, 1992 in the amount of $6,447,000 (approximately $4,000,000 after tax or 61 cents per share).
The Company plans to continue the policy of funding these benefits on a pay-as-you-go basis. The components of net periodic postretirement benefit cost are as follows:
Year Ended December 31,
1994 1993 1992 (000 Omitted) Service costs, benefits attributed to employee service during the year $ 909 $ 821 $ 750 Interest cost on accumulated postretirement benefit obligation 599 578 510 Amortization of deferrals (15) -- --
Net periodic postretirement benefit cost $1,493 $1,399 $1,260
Summary information on the Company's plan is as follows:
December 31, 1994 1993 (000 Omitted) Accumulated postretirement benefit obligation: Retirees $ 1,171 $1,504 Retirement-eligible actives 753 968 Other active participants 5,089 6,077 Accumulated postretirement benefit obligation: 7,013 8,549 Unrecognized prior service costs 1,048 -- Unrecognized net gain 2,286 407 Accrued postretirement benefit costs $10,347 $8,956
The discount rate used in determining the APBO was 8.25% in 1994 and 7.75% in 1993. The 1994 assumed health care cost trend rate used in measuring the accumulated postretirement benefit obligation was 9.75% declining by .5% per year to a rate of 6%. In 1993, the rate was 10.25% declining by 1% per year to a rate of 6.25%. An increase of 1% in health care cost trend rate would increase the accrued postretirement benefit cost at December 31, 1994 by $1,551,000 and the 1994 annual expense by $412,000.
6. LONG-TERM DEBT
Following is a summary of long-term debt of the Company:
December 31, 1994 1993 (000 Omitted) 10% Convertible subordinated notes $30,000 $30,000 Industrial Revenue Bonds 3,961 5,383 Capital lease obligations 975 1,264 34,936 36,647 Current maturities (1,358) (1,553)
$33,578 $35,094
The convertible notes are due on December 1, 2000 and require aggregate prepayments of $8,000,000 in 1996, $7,000,000 in 1997, $6,000,000 in 1998, $5,000,000 in 1999 and $4,000,000 in 2000. The holders of the notes have the option to convert their notes at any time into common shares of the Company at a current conversion price of $13.214 per share. The Notes are subject to prepayment at the option of the Company if the market value of the Company's common shares equals or exceeds 150% of the conversion price for a specified period. The note agreements provide for maintaining a current ratio of 1.5 to 1, restrict the amount of additional borrowings and limit the amount of dividends that can be paid. Currently the Company has available for payment of dividends $32,854,000 of retained earnings.
The Company has entered into an interest rate swap agreement which effectively converts the interest rate on $25 million of convertible notes from a fixed rate of 10% to a variable rate equal to the LIBOR rate plus 2.67%. At December 31, 1994 the variable interest rate under this swap agreement totaled 8.86%. This swap agreement expires in February, 1997. The Company estimates the fair value of this agreement to be insignificant.
The Industrial Revenue Bonds bear interest at rates of interest tied to short-term Treasury rates. Certain plant and equipment purchased with the proceeds of the bonds collateralize these obligations.
During 1992, the Company prepaid the balance owing on its guaranteed senior notes and was subject to a prepayment premium of approximately $1.3 million. Such amount is included in the accompanying income statement in 1992 in interest expense.
The Company had available unused lines of credit of approximately $5,000,000 at December 31, 1994.
Long-term debt maturities are $1,358,000 in 1995, $9,557,000 in 1996, $8,072,000 in 1997, $6,580,000 in 1998, $5,369,000 in 1999 and $4,000,000 in 2000.
7. CONTINGENCIES
A chemical cleaning compound, trichlorethylene (TCE), has been found in the soil and groundwater on the Company's property in Elkhart, Indiana, and in 1981, TCE was found in a well field of the City of Elkhart in close proximity to the Company's facility. The Company has been named as one of nine potentially responsible parties (PRPs) in the contamination of this site.
The United States Environmental Protection Agency (EPA) and the Indiana Department of Environmental Management (IDEM) have conducted a preliminary investigation and evaluation of the site and have undertaken temporary remedial action in the nature of air-stripping towers.
In early 1992, the EPA issued a Unilateral Order under Section 106 of the Comprehensive Environmental Response, Compensation and Liability Act which required the Company and other PRPs to undertake remedial work. The Company and the other PRPs have reached an agreement regarding the funding of groundwater monitoring and the operation of the air-strippers as required by the Unilateral Order. The Company was required to install and operate a soil vapor extraction system to remove TCE from the Company's property. The Company has installed and is operating the equipment pursuant to the Unilateral Order. In addition, the EPA and IDEM have asserted a claim for reimbursement of their investigatory costs and the costs of installing and operating the air-strippers on the municipal well field (the EPA Costs). On February 22, 1993, the United States filed a lawsuit in the United States District Court for the Northern District of Indiana against eight of the PRPs, including the Company. On July 20, 1993, IDEM joined in the lawsuit. The lawsuit seeks recovery of the costs of enforcement, prejudgment interest and an amount in excess of $6.8 million, which represents costs incurred to date by the EPA and IDEM, and a declaration that the eight defendant PRPs are liable for any future costs incurred by the EPA and IDEM in connection with the site.
The Company does not believe the annual cost to the Company of monitoring groundwater and operating the soil vapor extraction system and the air-strippers will be material. Each of the PRPs, including the Company, is jointly and severally liable for the entire amount of the EPA Costs. Certain PRPs, including the Company, are currently attempting to negotiate an agreed upon allocation of such liability. The Company believes that adequate provisions have been recorded for its costs and its anticipated share of EPA Costs and that its cash on hand, unused lines of credit or cash from operations are sufficient to fund any required expenditures.
The EPA has also named the Company as a PRP for costs at three other disposal sites. It has also asked the Company for information about contamination at other sites. The Company believes it either has no liability as a responsible party or that adequate provisions have been recorded for any costs to be incurred.
There are claims and pending legal proceedings against the Company and its subsidiaries with respect to taxes, workers' compensation, warranties and other matters arising out of the ordinary conduct of the business. The ultimate result of these claims and proceedings at December 31, 1994 is not determinable, but, in the opinion of management, adequate provision for anticipated costs has been made or insurance coverage exists to cover such costs.
8. LEASES
The Company leases certain of its manufacturing facilities, sales offices, transportation and other equipment. Total rental expense was approximately $2,502,000 in 1994, $3,416,000 in 1993, and $2,998,000 in 1992. Future minimum lease payments under noncancellable operating leases are $1,284,000 in 1995, $1,083,000 in 1996, $845,000 in 1997, $210,000 in 1998 and $29,000 in 1999.
9. INCOME TAXES
Effective January 1, 1992, the Company adopted SFAS No. 109, "Accounting for Income Taxes". This statement mandates the liability approach for computing deferred income taxes similar to SFAS No. 96 previously followed by the Company. The cumulative effect of the change was to increase first quarter 1992 earnings by $800,000 (12 cents per share). The change had no impact on the 1992 income tax provision.
Pre-tax income (loss) reported by U.S. and foreign subsidiaries was as follows:
Year Ended December 31, 1994 1993 1992 (000 Omitted) United States $25,517 $17,933 $8,688 Foreign 1,865 2,292 (2,677) $27,382 $20,225 $6,011
The provision (benefit) for income taxes is summarized below:
Year Ended December 31, 1994 1993 1992 (000 Omitted) Current: U.S. federal $ 8,713 $6,049 $5,007 Foreign 484 465 38 State 1,480 645 1,226 10,677 7,159 6,271
Deferred: U.S. federal (947) (317) (1,922) Foreign 132 941 (1,256) State 269 2 (659) (546) 626 (3,837) $10,131 $7,785 $2,434
Deferred income taxes are provided for the temporary differences between the financial reporting basis and tax basis of the Company's assets and liabilities. At December 31, 1994, current deferred income tax assets of $4,412,000 are classified as prepaid expenses, long-term U.S. deferred income tax assets of $4,728,000 are classified as other assets, and $299,000 of long- term foreign deferred income tax liabilities are classified as other long-term liabilities.
Deferred income taxes are comprised of the following at December 31:
1994 1993 (000 Omitted) Gross deferred tax liabilities Property, plant and equipment $ 2,079 $2,257 Inventories 170 436 Other 585 680 2,834 3,373
Gross deferred tax assets Pension and postretirement benefit obligations 6,789 6,296 Restructuring reserve 687 1,103 Other accrued liabilities 3,895 3,708 Loss carryforwards 304 619 11,675 11,726
Net deferred tax assets $ 8,841 $ 8,353
The provision for income taxes computed by applying the Federal statutory rate to income before income taxes is reconciled to the recorded provision as follows:
Year Ended December 31, 1994 1993 1992 (000 Omitted) Tax at United States statutory rate $ 9,584 $7,079 $2,044 State income taxes, net of federal benefit 1,137 421 374 Canadian rate differential on income (losses) 170 344 (134) Research and development tax credits (250) (250) -- Non-taxable interest income (393) (188) (70) Other (117) 379 220
$10,131 $7,785 $2,434
Provision has been made for U.S. and Canadian taxes on undistributed earnings of the Company's Canadian subsidiary.
The Company possesses approximately $6,501,000 of U.S. state income tax loss carryforwards. U.S. state loss carryforwards expire to the extent of $1,691,000 in 2006, and $4,810,000 in 2007.
10. SEGMENT INFORMATION AND MAJOR CUSTOMERS
The Company operates in predominately one industry segment: the design, engineering and manufacture of certain components sold to manufacturers in the ground transportation industry.
The Company, through its subsidiaries, operates primarily in two countries: the United States and Canada. The Company's Canadian subsidiary had net sales of $20,494,000 in 1994, $36,074,000 in 1993, and $29,421,000 in 1992. Total assets of the Canadian subsidiary were approximately $7,368,000 and $9,416,000 at December 31, 1994 and 1993, respectively. Intercompany sales were insignificant.
Sales to three major customers, Ford Motor Company, Chrysler Corporation, and General Motors Corporation, were approximately 71%, 12%, and 4%, respectively, of the Company's net sales in 1994 as compared to 72%, 11% and 4% in 1993 and 73%, 9% and 4% in 1992. Accounts receivable from Ford Motor Company, Chrysler Corporation, and General Motors Corporation approximated 88% of trade accounts receivable at December 31, 1994 and 89% at December 31, 1993. Sales to customers outside of the United States and Canada were not significant.
11. COMMON SHARES
On May 5, 1994, the shareholders approved a new 1994 Stock Compensation Plan (the "Plan"). The Plan reserves 500,000 common shares for issuance to officers, other key employees and non- employee directors. The Plan provides that options may be granted at not less than fair market value and if not exercised, expire ten years from the date of grant. Generally, the options become exercisable at the rate of 25% per year commencing one year from the date of grant.
In addition, the Company has outstanding under a 1984 Plan, incentive stock options for 15,750 shares at an average exercise price of $6.364. The 1984 Plan expired and no further options may be granted under it.
The following table sets forth stock option activity for 1994.
Range of Shares Prices Stock options outstanding at December 31, 1993 19,250 $ 5.227-$7.614 Options granted 279,000 16.125-18.125 Options exercised (3,500) 7.614 Options canceled (3,000) 18.125 Stock options outstanding at December 31, 1994 291,750 $ 5.227-18.125
The Company has an employee stock purchase plan and has reserved 337,793 common shares for this purpose. The plan allows eligible employees to authorize payroll withholdings which are used to purchase common shares from the Company at ninety percent (90%) of the closing price of the common shares on the date of purchase. Through December 31, 1994, 112,207 shares had been issued under the plan.
The Company has reserved 2,270,319 common shares for possible future issuance in connection with its $30,000,000 convertible notes issued on January 2, 1990.
12. RELATED PARTY TRANSACTIONS
On March 24, 1994, Ford Motor Company (Ford) and Ford Motor Company Fund disposed of their combined 24% ownership in the Company through a secondary public offering. Ford owned 24% of the Company's common shares at December 31, 1993 and 30% at December 31, 1992. Significant related party transactions are as follows:
Year Ended December 31, 1993 1992 (000 Omitted) Product sales $373,000 $311,000 Product purchases 124,000 77,000
December 31, (000 Omitted) Accounts receivable $ 47,168 Accounts payable 9,700
14. RESTRUCTURING CHARGE
In the fourth quarter of 1992, the Company provided an allowance of $4,500,000 for restructuring costs. The charge reduced net income by $2,900,000 or $.34 per share. This charge represented estimated costs to downsize Excel Metalcraft Ltd., located in Aurora, Ontario, Canada and relocate production of certain light truck and van windows from Aurora to the Company's other manufacturing plants. Total costs of $1,775,000 and $1,010,000 were incurred in 1994 and 1993 for transferring production and downsizing.
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 set forth under the caption "ELECTION OF DIRECTORS" in the Company's proxy statement for the 1995 annual meeting of shareholders (the "Proxy Statement") is incorporated herein by reference. The Proxy Statement has previously been filed with the Securities and Exchange Commission.
Item 11.

Item 11. Executive Compensation
The information set forth under the captions "Compensation of Directors," "Compensation Committee Interlocks and Insider Participation," "Compensation of Executive Officers," "Summary Compensation Table," "Options," "Pension Plan," and "Deferred Compensation Plans" in the Proxy Statement is incorporated herein by reference.
Item 12.

Item 12. Security Ownership of Certain Beneficial Owners and Management
The information set forth under the captions "Outstanding Shares," "Principal Shareholders," and "Security Ownership of Management" in the Proxy Statement is incorporated herein by reference.
Item 13.

Item 13. Certain Relationships and Related Transactions
The information set forth under the captions "Board Meetings and Committees" and "Compensation Committee Interlocks and Insider Participation" in the Proxy Statement is incorporated herein by reference.
PART IV
Item 14.

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) (1) Financial Statements
The following consolidated financial statements of the Company and its subsidiaries are included in Item 8 of this report.
Report of Independent Accountants Consolidated Balance Sheet - December 31, 1994 and 1993 Consolidated Statement of Income - Years ended December 31, 1994, 1993 and 1992 Consolidated Statement of Shareholders' Equity - Years ended December 31, 1994, 1993 and 1992 Consolidated Statement of Cash Flows - Years ended December 31, 1994, 1993 and 1992 Notes to Consolidated Financial Statements
(a) (2) Financial Statement Schedules
The following financial statement schedules are included with this report:
Report of Independent Accountants on Financial Statement Schedules II - Valuation and Qualifying Accounts
All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.
(a) (3) Exhibits
The list of exhibits contained in the Exhibit Index immediately following the signature page of this Form 10-K is incorporated herein by reference.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended December 31, 1994.
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.
EXCEL INDUSTRIES, INC.
March 22, 1995 By: /s/ James J. Lohman James J. Lohman Chairman of the Board and 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.
March 22, 1995 /s/ James J. Lohman James J. Lohman Chairman of the Board and Chief Executive Officer
March 22, 1995 /s/ Joseph A. Robinson Joseph A. Robinson Secretary-Treasurer and Chief Financial Officer (Principal Financial and Accounting Officer)
March 22, 1995 /s/ James O. Futterknecht, Jr. James O. Futterknecht, Jr. Director
March 22, 1995 /s/ John G. Keane John G. Keane, Director
March 22, 1995 /s/ Richard A. Place Richard A. Place, Director
March 22, 1995 /s/ James K. Sommer James K. Sommer, Director
March 22, 1995 /s/ Ralph R. Whitney Ralph R. Whitney, Jr., Director
REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULES
To the Board of Directors of Excel Industries, Inc.
Our audits of the consolidated financial statements referred to in our report dated February 16, 1995 appearing on page 23 of the 1994 Annual Report to Shareholders of Excel Industries, Inc. also included an audit of the Financial Statement Schedule listed in Item 14(a) of this Form 10-K. In our opinion, this Financial Statement Schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.
PRICE WATERHOUSE LLP South Bend, Indiana February 16, 1995
EXHIBIT INDEX
Page No. Exhibit In Manually Number Description of Exhibit Signed Copy
(3.1) The Amended Articles of Incorporation of the Company were filed as Exhibit 3.1 to the Registration Statement on Form S-1 filed on February 27, 1987 (Reg. No. 33-12282) and are incorporated herein by reference
(3.2) Amendment to the Code of By-Laws effective August 18, 1994.....
(3.3) Amendment to the Code of By-Laws effective October 20, 1994.....
(3.4) Amendment to the Code of By-Laws effective December 15, 1994.....
(3.5) The Code of By-Laws of the Company as amended effective March 15, 1995.....
(4.1) A specimen of the certificate representing the Common Stock of the Company was filed as Exhibit 4.1 to the Company's Amendment No. 1 to the Registration Statement on Form S-1 filed on April 3, 1984 (Reg. No. 2-89521) and is incorporated herein by reference
(4.2) Article VI, Section 3-5, Article VII and Article XII, Section 1 of the Articles of Incorporation of the Company are included as part of Exhibit 3.1 above
(4.3) Articles X, XI, XV, XVI, XXIV of the Code of By-Laws of the Company are included as part of Exhibit 3.2 above
(9) Not Applicable
(10.1)* The Supplemental Major Medical Expense Insurance Plan of the Company was filed as Exhibit 10.7 to the Company's Registration Statement on Form S-1 filed on February 17, 1984 (Reg. No. 2-89521) and is incorporated herein by reference
(10.2) Purchase and Supply Contract between the Company and Ford Motor Company dated October 7, 1986, was filed as part of Exhibit (e) (2) of the Company's Schedule 13E-4 filed on August 27, 1986, and is incorporated herein by reference
(10.3) Lease Agreement between Modular Concepts, Inc. and Fulton Industrial Development Authority was filed as Exhibit 10.12 to the Registration Statement on Form S-1 filed on February 27, 1987 (Reg. No. 33-12282) and is incorporated herein by reference
(10.4)* The Excel Industries, Inc. Stock Purchase Plan and Trust was filed as Exhibit 4.4 to Amendment No. 1 to the Company's Registration Statement on Form S-8 filed on June 9, 1987 (Reg. No. 33-14508) and is incorporated herein by reference
(10.5) Commercial Lease and Option to Purchase dated February 5, 1988, between the Company and P-F-P Partnership, an Indiana general partnership (for the Mishawaka facility) was filed as Exhibit 10.16 to the Company's Annual Report on Form 10-K filed on March 24, 1988, and is incorporated herein by reference
(10.6) Lease Agreement dated May 4, 1988 between the Company and Willis Day Properties, Inc. (for the Toledo, Ohio facility) was filed as Exhibit 10.18 to the Company's Annual Report on Form 10-K filed March 20, 1989, and is incorporated herein by reference
(10.7)* The 1989 Deferred Compensation Plan of the Company as amended effective October 1, 1991 was filed as Exhibit 10.12 to the Company's Annual Report on Form 10-K filed March 26, 1992 and is incorporated herein by reference
(10.8) Lease Purchase Contract dated July 1, 1979 between The Industrial Development Board for the City of Pikeville (the "Pikeville Board") and Ferro Manufacturing Corporation ("Ferro") was filed as Exhibit 10.20 to the Company's Annual Report on Form 10-K filed March 27, 1991, and is incorporated herein by reference
(10.9) First Amendment to Lease Purchase Contract, dated January 1, 1983, between the Pikeville Board and Ferro was filed as Exhibit 10.21 to the Company's Annual Report on Form 10-K filed March 27, 1991, and is incorporated herein by reference
(10.10)* Supplemental Deferred Compensation Agreement between the Company and James J. Lohman was filed as Exhibit 10.20 to the Company's Annual Report on Form 10-K filed March 26, 1992 and is incorporated herein by reference
(10.11)* Excel Industries, Inc. and Subsidiaries Incentive Compensation Plan was filed on Exhibit 10.14 to the Company's Annual Report on Form 10-K filed March 26, 1993, and is incorporated herein by reference
(10.12) Lease Extension Agreement dated September 17, 1992 between the Company and Willis Day Properties, Inc. (for the Toledo facility) was filed on Exhibit 10.15 to the Company's Annual Report on Form 10-K filed March 26, 1993, and is incorporated herein by reference
(10.13) Purchase Agreement between the Company and Ford Motor Company dated January 31, 1994 was filed on Exhibit 10.13 to the Company's Annual Report on Form 10-K filed March 29, 1994, and is incorporated herein by reference
(11) Not Applicable
(12) Not Applicable
(13) Not Applicable
(16) Not Applicable
(21) List of the Company's subsidiaries.....
(22) Not Applicable
(23) Consent of Independent Accountants.....
(24) Not Applicable
(27) Financial Data Schedule.....
(28) Not Applicable
* Management contract or compensation plan or arrangement.
EXHIBIT 3.2
CERTIFICATE OF SECRETARY OF EXCEL INDUSTRIES, INC.
I, Joseph A. Robinson, certify that I am the duly elected Secretary of Excel Industries, Inc. a corporation organized and existing under the laws of the State of Indiana (hereinafter the "Corporation"), and that the following is a true and correct copy of certain resolutions duly adopted by the Board of Directors in accordance with law and the Code of By- Laws of the Corporation on August 18, 1994, and that such resolutions have not been rescinded or modified: RESOLVED, That the Code of By-laws of the Corporation is amended by adding a new Section 3 to Article IX thereof to read as follows:
"Section 3. No person shall be eligible to be elected or re- elected as a director, or to fill a vacancy on the Board of Directors, who at the time of such election or appointment shall have attained the age of seventy (70) years."
Dated this 18th day of August, 1994.
/s/ Joseph A. Robinson Joseph A. Robinson Secretary
EXHIBIT 3.3
CERTIFICATE OF SECRETARY OF EXCEL INDUSTRIES, INC.
I, Joseph A. Robinson, certify that I am the duly elected Secretary of Excel Industries, Inc. a corporation organized and existing under the laws of the State of Indiana (hereinafter the "Corporation"), and that the following is a true and correct copy of certain resolutions duly adopted by the Board of Directors in accordance with law and the Code of By- Laws of the Corporation on October 20, 1994, and that such resolutions have not been rescinded or modified: RESOLVED, That the Code of By-laws of the Corporation is amended as follows: (i) Section 12 of Article VIII is deleted in its entirety, and Section 13 therein is renumbered as Section 12, and (ii) Section 2 of Article XI is deleted in its entirety and the reference to Section I therein is consequently deleted.
Dated this 20th day of October, 1994.
/s/ Joseph A. Robinson Joseph A. Robinson Secretary
EXHIBIT 3.4
CERTIFICATE OF SECRETARY OF EXCEL INDUSTRIES, INC.
I, Joseph A. Robinson, certify that I am the duly elected Secretary of Excel Industries, Inc. a corporation organized and existing under the laws of the State of Indiana (hereinafter the "Corporation"), and that the following is a true and correct copy of certain resolutions duly adopted by the Board of Directors in accordance with law and the Code of By- Laws of the Corporation on December 15, 1994, and that such resolutions have not been rescinded or modified: RESOLVED, That Article XIV of the Code of Bylaws is amended to read as follows:
"The fiscal year of this corporation shall be the calendar year consisting of 52/53 weeks with the year ending on the weekend closest to December 31."
Dated this 15th day of December, 1994.
/s/ Joseph A. Robinson Joseph A. Robinson Secretary
EXHIBIT 3.5
CODE OF BY-LAWS
OF
EXCEL INDUSTRIES, INC. (the "Corporation")
ARTICLE I
Officers
Section 1. The officers of the Corporation shall consist of a Chairman of the Board, the President, one or more Vice Presidents, the Secretary, the Treasurer, and such assistant officers as the Board of Directors shall from time to time designate and elect.
Section 2. Any two offices may be held by the same person. The officers of the Corporation shall be elected by the Board of Directors at such time and in such manner and for such terms as the Board of Directors may prescribe. No officer, other than the Chairman of the Board, need be a Director of this Corporation.
ARTICLE II
Chairman of the Board of Directors
The Board of Directors shall choose from among its members a Chairman of the Board who shall also serve as the Chief Executive Officer of the Corporation. The Chairman of the Board of Directors shall preside at all meetings of the shareholders and directors. He shall perform all duties incident to the office of the Chief Executive Officer and shall perform any additional duties as from time to time may be assigned to him by the Board of Directors.
ARTICLE III
President and Vice President
Section 1. The President shall be the Chief Operating Officer of the Corporation and shall have management responsibility for the operation of the Corporation. It shall be his duty to preside at all meetings of the shareholders in the absence of the Chairman of the Board of Directors and to perform such other duties and render such other services for and in behalf of the Corporation as may be assigned to him by the Chairman of the Board.
Section 2. Each Vice President shall have such powers and perform such duties as the Board of Directors may prescribe or as the Chairman of the Board or the President may delegate to him. At the request of the Chairman of the Board or the President, any Vice President may temporarily act in the Place of the President and may perform all of the duties of the Presidency in his absence or during his disability.
ARTICLE IV
Secretary
Section 1. The Secretary shall prepare or cause to be prepared the minutes of the meetings of the shareholders and of the Board of Directors. He shall see that all notices are duly given in accordance with the provisions of the Code of By-Laws and as required by law. The Secretary shall be custodian and responsible for the authentication of the records and, in general, shall perform all duties incident to the Office of Secretary. He shall have such other powers and perform such other duties as this Code of By-Laws provides or as may, from time to time, be assigned by the Board of Directors.
Section 2. The Secretary shall procure all of the stock certificates, stock books, stock transfer books, and other similar records.
Section 3. The Secretary shall have the custody of and affix the corporate seal whenever the same is required to be affixed and shall perform such other duties and render such other services as may be assigned to him from time to time by the Board of Directors.
ARTICLE V
Treasurer
Section 1. The Treasurer shall be the Chief Financial Officer of the Corporation. He shall procure and have custody of the financial records of the Corporation and shall receive and have custody of and safely keep all of the cash and securities of the Corporation. He shall keep an accurate record of all receipts and disbursements in books and records belonging to the Corporation; shall deposit all moneys and securities in the name and to the credit of the Corporation in such banks, trust companies or other depositories as the Board of Directors may designate from time to time as the depositories of the Corporation; shall disburse the funds of the Corporation as ordered by the Board of Directors; shall render an account of all of his transactions as such Treasurer and of the financial condition of the Corporation whenever required by the Board of Directors; and, in general, shall perform all the duties incident to the office of Treasurer.
Section 2. The Treasurer shall perform such other duties and render such other services as may be assigned to him from time to time by the Board of Directors.
ARTICLE VI
Additional Duties of Officers
In addition to the duties imposed upon the several officers of the Corporation, they shall have the powers and perform the duties usually had and possessed by the respective officers of a like corporation. Assistant officers shall have such powers and duties as the officers whom they are elected to assist shall specify and delegate to them and such other powers and duties as these By-Laws or the Board of Directors may prescribe.
ARTICLE VII
Duties of Officers Delegated
In case of the absence or disability of any officer of the Corporation, the Board of Directors may delegate the powers and duties of any such officer of the Corporation for such period of time as the Board of Directors may determine.
ARTICLE VIII
Meetings of Shareholders
Section 1. All meetings of the shareholders of the Corporation shall be held at such place within or without the State of Indiana as may be specified in the notice of the meeting.
Section 2. The annual meeting of the shareholders of the Corporation shall be held on the third Thursday of April of each and every year. Failure to hold the meeting at the designated time shall not work any forfeiture or a dissolution of the Corporation or affect the validity of any corporate action.
Section 3. A complete list of the shareholders entitled to vote at any shareholders' meeting, arranged in alphabetical order and containing the address and number of shares of stock so held by each shareholder who is entitled to vote at said meeting, shall be prepared by the Secretary and shall be open to the examination of any shareholder at the office of the Corporation at the time of the meeting and for five days prior thereto.
Section 4. At all shareholders' meetings, a quorum shall consist of a majority of all of the shares of the stock outstanding and entitled by the Articles of Incorporation to vote on the business to be transacted at said meeting, but a meeting composed of less than a quorum may adjourn the meeting from day to day thereafter or until some future time.
Section 5. At the annual meeting of the shareholders, there shall be elected by plurality vote a Board of Directors who shall hold office until the next annual meeting of shareholders and until their successors have been elected and have qualified.
Section 6. Except as otherwise provided by law or by the provisions of the Articles of Incorporation, each outstanding share of Common Stock is entitled to one vote on each matter voted on at a shareholders' meeting.
Section 7. A shareholder may vote, either in person or by proxy executed in writing by the shareholder or a duly authorized attorney-in-fact. No proxy shall be valid after eleven (11) months, unless a shorter or longer time is expressly provided in the appointment form.
Section 8. Special meetings of the shareholders of the Corporation may be called by the Chairman of the Board, the President, by the Board of Directors, or by shareholders holding not less than one-fourth (1/4) of all shares of stock outstanding and entitled, by the Articles of Incorporation, to vote on the business to be transacted at said special meeting, and shall be called by the Chairman of the Board, the President or a Vice President at the request of a majority of the Board of Directors.
Whenever a special meeting of the shareholders shall be called, the call shall be delivered to the Secretary who shall issue the notice of said special meeting which is required to be given.
Section 9. Written notice of each meeting of shareholders shall be given by the Secretary, to each shareholder of record who is entitled to vote at said meeting, at least ten days prior to the time fixed for the holding of said meeting, which said notice shall state the place, day and hour and the purpose for which said meeting is called, and said notice shall be addressed to the last known place of residence of each shareholder, as shown on the records of the Corporation; the ten days shall be computed from the date upon which said notice is deposited in the mails.
Section 10. Notice of any shareholders' meeting may be waived in writing by any shareholder if the waiver sets forth in reasonable detail the purpose or purposes for which the meeting is called and the time and place thereof.
Section 11. No shares of stock shall be voted at any annual or special meeting of shareholders upon which any installment is due and unpaid or which are owned by the Corporation.
Section 12. Chapter 42 of the Indiana Business Corporation Law (IND. CODE Sec. 23-1-42) shall not apply to any control share acquisitions as defined in IND. CODE Sec. 23-1-42-2 by CIGNA Mezzanine Partners II, L.P., Connecticut General Life Insurance Company, Life Insurance Company of North America, The Paul Revere Life Insurance Company, The Paul Revere Protective Life Insurance Company, Rhode Island Hospital Investment Trust Fund B and Balboa Insurance Company and their respective nominees, affiliates, successors and assigns as a result of the sale and issuance by the Corporation of certain 10% Convertible Subordinated Notes due December 1, 2000 in the aggregate principal amount of $30,000,000 (the "Notes") and any issuance of shares of the common stock of the Corporation upon any subsequent conversion of the Notes.
ARTICLE IX
DIRECTORS
Section 1. The property and business affairs of the Corporation shall be managed and controlled by a Board of Directors, none of whom need be a shareholder of the Corporation. The Board of Directors shall consist of a minimum of six and a maximum of eight members, the actual number of directors to be fixed from time to time by resolution of the Board of Directors. The members of the Board of Directors shall be elected at the annual meeting of the shareholders, shall hold office until the next annual meeting of the shareholders and until their successors have been elected and have qualified. In case of the failure to hold the annual meeting on the date fixed herein for the same to be held, the Directors shall hold over until the next meeting of the shareholders for the purpose of electing Directors.
Section 2. Vacancies in the Board of Directors, caused by resignation, death or other incapacity or by increase in the number of Directors, shall be filled for the unexpired term by a majority vote of the remaining members of the Board of Directors.
Section 3. No person shall be eligible to be elected or re-elected as a director, or to fill a vacancy on the Board of Directors, who at the time of such election or appointment shall have attained the age of seventy (70) years.
ARTICLE X
Meeting of Directors
Section 1. Immediately following the annual meeting of the shareholders, the annual meeting of the Board of Directors shall be held, without notice, at the place at which the annual meeting of the shareholders is held.
Section 2. Special meeting of the Board of Directors may be called by the Chairman of the Board of Directors, by the President, or by any two members of the Board of Directors, at any place within or without the State of Indiana, upon twenty- four hours' notice, specifying the date, time and place of the meeting, given to each director, either personally, by mailing, or by telegram.
Section 3. A majority of the whole Board of Directors shall constitute a quorum for the transaction of any business except the filling of vacancies, but a smaller number may adjourn from time to time until a future date or until a quorum is secured.
For the purpose only of filling a vacancy or vacancies in the Board of Directors, a quorum shall consist of a majority of the whole Board of Directors, less the vacancy or the vacancies therein.
The act of a majority of the Directors present at a meeting duly called at which a quorum is present shall be the act of the Board of Directors.
Section 4. Notice of any special meeting of the Board of Directors may be waived in writing by any Director, before or after the date and time stated in the notice, if the waiver is signed by the Director and filed with the Corporation's minutes or records. In addition, a Director's attendance at or participation in a meeting waives any required notice of the meeting unless the Director at the beginning of the meeting (or promptly upon his arrival) objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting.
Section 5. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if a written consent to such action is signed by all members of the Board of Directors or such committee, as the case may be, and such written consent is filed with the minutes of the proceedings of the Board of Directors.
ARTICLE XI
Powers of Directors
The Board of Directors shall have all such powers as may be exercised by the Corporation, subject to the provisions of the statutes of the State of Indiana, the Articles of Incorporation and these By-Laws, and subject to such further regulations as may be, from time to time, made by the shareholders.
ARTICLE XII
Compensation of Directors and Members of Committees
The members of the Board of Directors and members of committees of the Corporation, who are not salaried employees of the Corporation, shall receive such compensation for their services to be rendered for and in behalf of the Corporation as may, from time to time, be fixed by the Board of Directors, and the compensation so fixed shall continue to be payable until the Board of Directors shall have thereafter fixed a different compensation, which it may do at any regular or special meeting.
ARTICLE XIII
Shares
Section 1. The shares of stock of the Corporation shall be represented by certificates signed by the Chairman of the Board or the President and the Secretary or an Assistant Secretary of the Corporation and may be sealed with a seal of the Corporation or a facsimile thereof. The signatures of the officers upon a certificate may be facsimiles if the certificate is countersigned by a Transfer Agent or registered by a Registrar other than the Corporation itself or an employee of the Corporation. In the event any officer who has signed or whose facsimile signature has been placed upon a certificate shall cease to be such officer before the certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer at the time of the issue of such certificate.
Section 2. The Board of Directors may, at its discretion, appoint a Transfer Agent and a Registrar for the shares of common stock of the Corporation. The Transfer Agent shall be in charge of the issue, transfer, and cancellation of shares of stock and shall countersign all stock certificates; and, in the event the Transfer Agent and Registrar shall be the same, then such stock certificates shall be countersigned by it as Transfer Agent and Registrar. The Transfer Agent shall maintain stock transfer books which shall include a record of the shareholders, giving the names and addresses of all shareholders and the number and class of shares held by each; shall prepare voting lists for meetings of shareholders; shall produce and keep open these lists at the meetings, and shall perform such other duties as may be delegated by the Board of Directors. The Registrar shall be in charge of preventing the overissue of shares, shall register all stock certificates, and shall perform such other duties as may be delegated by the Board of Directors.
Section 3. The Corporation shall have a first lien on all of the shares of the capital stock, and upon all dividends declared upon the same, for any indebtedness of any character or description owing to it from the respective holders of any such share or shares.
Section 4. The shares of the Corporation shall be transferable on the books of the Corporation upon surrender of the certificate or certificates representing the same, properly endorsed by the registered holder or by her/his duly authorized attorney.
Section 5. The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the legal owner thereof and accordingly shall not be bound to recognize any equitable claim to or interest in such share or shares on the part of any other persons, whether or not it shall have express or other notice thereof, save as expressly provided by the laws of the State of Indiana.
ARTICLE XIV
Fiscal year
The fiscal year of this Corporation shall be the calendar year consisting of 52/53 weeks with the year ending on the weekend closest to December 31.
Article XV
Checks for Money
All checks, drafts or other orders for the payment of the funds of the Corporation shall be signed by the Treasurer, or by such other individual or individuals as may hereafter from time to time be designated by the Board of Directors.
ARTICLE XVI
Dividends
Section 1. The Board of Directors may, at any annual or special meeting, declare and authorize the distribution of a dividend to the shareholders of the Corporation.
Section 2. When the Board of Directors declares a dividend, it shall fix a date as the record date for the determination of the shareholders who shall be entitled to receive said dividend, and said dividend shall be paid only to the shareholders of record on said record date as shown by the books of the Corporation.
ARTICLE XVII
Compensation of Officers
The officers of the Corporation shall receive such compensation for their services as may be, from time to time, fixed by the Board of Directors, and the compensation so fixed shall continue to be payable until the Board of Directors shall have fixed a different compensation, which it may do at any regular or special meeting.
ARTICLE XVIII
Execution of Negotiable Instruments and Contracts
The promissory notes, debentures, certificates of indebtedness, written contracts, and other similar instruments which the Corporation may hereafter issue or execute, shall be the valid obligations of the Corporation, if signed in its behalf by the Chairman of the Board, the President, a Vice President, the Secretary, the Treasurer, or any other officer or agent designated and authorized by the Board of Directors.
EXHIBIT 21
NAME OF SUBSIDIARY STATE OF INCORPORATION
Excel Corporation Indiana
Excel Metalcraft, Ltd. Canada
Excel Industries of Michigan, Inc. Michigan
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 2-91986) effective July 19, 1984, the Registration Statement on Form S-8 (No. 33- 14508) effective June 11, 1987 and the Registration Statement on Form S-8 (No. 33-53543) effective May 9, 1994 of Excel Industries, Inc. of our report dated February 16, 1995 appearing on page 15 of this Form 10-K. We also consent to the incorporation by reference of our report on the Financial Statement Schedule, which appears on page 34 of this Form 10-K.
PRICE WATERHOUSE LLP
South Bend, Indiana March 22, 1995