codewithdark/sec-edgar-rpt · Datasets at Hugging Face

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ITEM 2. PROPERTIES
----------

The properties of the Company, set forth in the following table are owned
and are collateralized or pledged under the Company's loan agreement with a
consortium of lenders (First Union Capital Corporation as agent), and its
Heathrow, Florida, property, is subject to a separate mortgage agreement. See
Note 4 to Consolidated Financial Statements. Most of the buildings are of steel
frame and masonry or concrete construction.

SQUARE FEET
LOCATION OF FLOOR SPACE
-------- ---------------

Heathrow, Florida (Corporate Headquarters) 33,000
Sandusky, Ohio (Consumer) 276,000
Versailles, Missouri (Consumer) 120,000
Deer Lake, Pennsylvania (Consumer) 150,000
New Castle, Pennsylvania (Refractories division) 131,000
Newell, West Virginia (Refractories division) 45,000
Massillon, Ohio (Refractories division) 113,000
Zoar, Ohio (Refractories division) 65,000
Acton Vale, Quebec, Canada (Dixon Ticonderoga Inc.) (Consumer) 32,000
Tlalnepantla, D.F., Mexico (Grupo Dixon, S.A. de C.V.)(Consumer) 55,000
Mexico City, D.F., Mexico (Grupo Dixon, S.A. de C.V.)(Consumer) 64,000
Beijing, China (Beijing Dixon Ticonderoga Stationery Company,
Ltd.) (Consumer) 25,000


The Company leases approximately 100,000 square feet in Macon, Georgia for
its U.S. Consumer central distribution center. The Company's Mexico subsidiary
recently entered into a lease of a 300,000 square-foot facility in Mexico City
to be used for distribution and certain manufacturing operations, as well as its
corporate headquarters.


<PAGE>


ITEM 3. LEGAL PROCEEDINGS
-------------------

In March 1986, The Dixon Venture ("Venture") (an unrelated company) filed
a civil action in the New Jersey Superior Court seeking recovery of damages and
costs allegedly incurred by Venture in connection with the clean-up of
industrial property acquired from the Company in Jersey City, New Jersey in
February, 1984. Venture's claims were brought pursuant to the New Jersey
Environmental Clean-up Responsibility Act ("ECRA"), an environmental remedial
statute dealing with the transfer of industrial property.
On April 24, 1996, a decision was rendered by the Superior Court of New
Jersey in Hudson County finding the Company responsible for $1.94 million in
certain environmental clean-up costs relating to this matter. In January 1998,
the Company paid $3.6 million to satisfy this claim in full, including all
accrued interest. The Company continued to pursue other responsible parties for
indemnification and/or contribution to the payment of this claim (including its
insurance carriers) and in fiscal 2000 the Company reached settlements with its
various insurers for reimbursement of legal costs in the amount of $653,000. In
1999, a pending malpractice suit against its former attorneys was dismissed and
the Company has appealed the decision. Also see Note 14 to Consolidated
Financial Statements.
Additionally, in May 2000 a news article alleged that the talc in all
domestic brands of crayons, including the Company's, contained trace amounts of
a fiber resembling asbestos. In response to these allegations, all domestic
crayon manufacturers, including the Company, the talc supplier and the United
States Consumer Product Safety Commission (CPSC) engaged in independent
laboratory testing for asbestos fibers in crayons. All test results reflected
the unequivocal absence of asbestos in domestically made crayons, including the
test results from the Government's own OSHA laboratory. In any event, all
domestic crayon manufacturers, including the Company, voluntarily agreed to
reformulate their crayons and discontinue the use of talc to eradicate any
persistent public concerns regarding crayon safety. The Company anticipates
releasing a reformulated crayon by late summer of 2001.
Each of the domestic crayon manufacturers, including the Company, and the
CPSC released press statements verifying the safety and non-toxicity of crayons
both on store and consumer shelves. Nevertheless, the Company became aware of
seven legal actions threatened against itself and other domestic crayon
manufacturers as a result of the erroneous report. Of the seven threatened legal
actions, six were filed against the Company, four of which have been dismissed.
The two legal actions remaining involve a class action suit and a misleading
advertising claim. The Company continues to deny the essential allegations of
these complaints and will vigorously continue its defense. Significantly, the
Company expects the class action claim to be dismissed during a hearing in
January 2001.
The Company believes that none of the pending actions will have a material
adverse effect on the Company's financial condition or results of operations.


ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
--------------------------------------------------------

None.



<PAGE>


PART II

ITEM 2. PROPERTIES

----------

The properties of the Company, set forth in the following table are owned

and are collateralized or pledged under the Company's loan agreement with a

consortium of lenders (First Union Capital Corporation as agent), and its

Heathrow, Florida, property, is subject to a separate mortgage agreement. See

Note 4 to Consolidated Financial Statements. Most of the buildings are of steel

frame and masonry or concrete construction.

SQUARE FEET

LOCATION OF FLOOR SPACE

-------- ---------------

Heathrow, Florida (Corporate Headquarters) 33,000

Sandusky, Ohio (Consumer) 276,000

Versailles, Missouri (Consumer) 120,000

Deer Lake, Pennsylvania (Consumer) 150,000

New Castle, Pennsylvania (Refractories division) 131,000

Newell, West Virginia (Refractories division) 45,000

Massillon, Ohio (Refractories division) 113,000

Zoar, Ohio (Refractories division) 65,000

Acton Vale, Quebec, Canada (Dixon Ticonderoga Inc.) (Consumer) 32,000

Tlalnepantla, D.F., Mexico (Grupo Dixon, S.A. de C.V.)(Consumer) 55,000

Mexico City, D.F., Mexico (Grupo Dixon, S.A. de C.V.)(Consumer) 64,000

Beijing, China (Beijing Dixon Ticonderoga Stationery Company,

Ltd.) (Consumer) 25,000

The Company leases approximately 100,000 square feet in Macon, Georgia for

its U.S. Consumer central distribution center. The Company's Mexico subsidiary

recently entered into a lease of a 300,000 square-foot facility in Mexico City

to be used for distribution and certain manufacturing operations, as well as its

corporate headquarters.

<PAGE>

ITEM 3. LEGAL PROCEEDINGS

-------------------

In March 1986, The Dixon Venture ("Venture") (an unrelated company) filed

a civil action in the New Jersey Superior Court seeking recovery of damages and

costs allegedly incurred by Venture in connection with the clean-up of

industrial property acquired from the Company in Jersey City, New Jersey in

February, 1984. Venture's claims were brought pursuant to the New Jersey

Environmental Clean-up Responsibility Act ("ECRA"), an environmental remedial

statute dealing with the transfer of industrial property.

On April 24, 1996, a decision was rendered by the Superior Court of New

Jersey in Hudson County finding the Company responsible for $1.94 million in

certain environmental clean-up costs relating to this matter. In January 1998,

the Company paid $3.6 million to satisfy this claim in full, including all

accrued interest. The Company continued to pursue other responsible parties for

indemnification and/or contribution to the payment of this claim (including its

insurance carriers) and in fiscal 2000 the Company reached settlements with its

various insurers for reimbursement of legal costs in the amount of $653,000. In

1999, a pending malpractice suit against its former attorneys was dismissed and

the Company has appealed the decision. Also see Note 14 to Consolidated

Financial Statements.

Additionally, in May 2000 a news article alleged that the talc in all

domestic brands of crayons, including the Company's, contained trace amounts of

a fiber resembling asbestos. In response to these allegations, all domestic

crayon manufacturers, including the Company, the talc supplier and the United

States Consumer Product Safety Commission (CPSC) engaged in independent

laboratory testing for asbestos fibers in crayons. All test results reflected

the unequivocal absence of asbestos in domestically made crayons, including the

test results from the Government's own OSHA laboratory. In any event, all

domestic crayon manufacturers, including the Company, voluntarily agreed to

reformulate their crayons and discontinue the use of talc to eradicate any

persistent public concerns regarding crayon safety. The Company anticipates

releasing a reformulated crayon by late summer of 2001.

Each of the domestic crayon manufacturers, including the Company, and the

CPSC released press statements verifying the safety and non-toxicity of crayons

both on store and consumer shelves. Nevertheless, the Company became aware of

seven legal actions threatened against itself and other domestic crayon

manufacturers as a result of the erroneous report. Of the seven threatened legal

actions, six were filed against the Company, four of which have been dismissed.

The two legal actions remaining involve a class action suit and a misleading

advertising claim. The Company continues to deny the essential allegations of

these complaints and will vigorously continue its defense. Significantly, the

Company expects the class action claim to be dismissed during a hearing in

January 2001.

The Company believes that none of the pending actions will have a material

adverse effect on the Company's financial condition or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

--------------------------------------------------------

None.

<PAGE>

PART II