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INDUSTRIAL GROUP
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The New Castle Refractories division, with plants located in Ohio,
Pennsylvania and West Virginia, manufactures various types of non-graphitic
refractory kiln furniture used by the ceramic and glass industries; firebrick,
silicon-carbide brick, various types and designs of non-graphitic refractory
special shapes for ferrous and nonferrous metal industries; refractory shapes
for furnace linings and industrial furnace construction; various grades of
insulating firebrick and graphite stopper heads.
Prior to the sale of the Company's Graphite and Lubricants division in
March 1999, the Industrial Group manufactured and sold processed natural and
synthetic bulk graphite, graphite oil, solvent and water-based lubricants and
colloidal graphitic suspensions.
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DISTRIBUTION
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Consumer products manufactured in the Company's U.S. facilities are
distributed nationally through wholesale, commercial and retail stationers,
school supply houses, industrial supply houses, blueprint and reproduction
supply firms, art material distributors and retailers. In an effort to enhance
service levels (especially with large retail customers), the Company leased a
central distribution center in Macon, Georgia. The consumer products
manufactured at the Canadian and Mexican plants are distributed nationally in
these countries through wholesalers, distributors, school supply houses and
retailers. The Mexico subsidiary has recently moved its distribution operations
to a new facility in Mexico City.
The industrial products manufactured at various plants are sold by direct
sales, manufacturers' representatives and industrial distributors in North
America.
RAW MATERIALS
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Wood slats for pencil manufacturing can be considered a strategic raw
material for the Company's business and are purchased from various suppliers in
the U.S., Indonesia and China (including the Company's wholly-owned China
subsidiary). Graphite, used in the manufacture of refractory products and leads
for wood-cased pencils, is purchased principally in the U.S. There were no
significant raw material shortages of any consequence during 2000 nor are any
expected in the near future.
TRADEMARKS, PATENTS AND COPYRIGHTS
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The Company owns a large number of trademarks, patents and copyrights in
each industry segment related to products manufactured and marketed by it, which
have been secured over many years. These have been of value in the growth of the
business and should continue to be of value in the future. However, in the
opinion of the Company, its business generally is not dependent upon the
protection of any patent or patent application or the expiration of any patent.
SEASONAL ASPECTS OF THE BUSINESS
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The Consumer Group reflects greater portions (approximately 58% in 2000)
of its sales in the third and fourth fiscal quarters of the year due to
shipments of school orders to its distribution network. This practice, which is
standard for this industry, usually causes the Company to incur additional bank
borrowings during the period between shipment and payment.
The Industrial Group has no material seasonal aspects.
COMPETITION
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Both of the Company's industry segments are engaged in a highly
competitive business with a number of competitors, some of whom are larger and
have greater resources than the Company. Important to the Company's market
position are the quality and performance of its products, its marketing and
distribution systems, and the reputation developed over the many years that the
Company has been in business.
RESEARCH AND DEVELOPMENT
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The Company employs approximately 16 full-time professional employees in
the area of quality control and product development. The Company has established
a centralized research and development laboratory in its Sandusky, Ohio
facility. For accounting purposes, research and development expenses in any year
presented in the accompanying Consolidated Financial Statements represent less
than 1% of revenues.
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EMPLOYEES
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The total number of persons employed by the Company was approximately
1,412 of which 535 were employed in the United States.