-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DnTy0TacspgXRFLY4iy5ws9t6PYqxBV9QcOmDvH/1rzfAHzWJMpDRnkQzq5xEqqc Dp2wXHMUJPB8aB3Ykhw3Eg== 0000950152-98-000370.txt : 19980123 0000950152-98-000370.hdr.sgml : 19980123 ACCESSION NUMBER: 0000950152-98-000370 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19980122 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WAXMAN INDUSTRIES INC CENTRAL INDEX KEY: 0000105096 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-HARDWARE & PLUMBING & HEATING EQUIPMENT & SUPPLIES [5070] IRS NUMBER: 340899894 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-10273 FILM NUMBER: 98511096 BUSINESS ADDRESS: STREET 1: 24460 AURORA RD CITY: BEDFORD HEIGHTS STATE: OH ZIP: 44146 BUSINESS PHONE: 2164391830 MAIL ADDRESS: STREET 1: 24460 AURORA ROAD CITY: BEDFORD HEIGHTS STATE: OH ZIP: 44146 11-K 1 WAXMAN INDUSTRIES, INC. FORM 11-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K (Mark One) X Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934 (Fee Required) For the fiscal year ended: June 30, 1997 OR - - Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934 (No Fee Required) For the transition period from: Commission file number 0-5888 A. Full title of the Plan and the address of the Plan, if different from that of the issuer named below: Waxman Industries, Inc. Profit Sharing and 401(K) Retirement Plan B. Name of issuer of the Securities held pursuant to the Plan and the address of its principal executive office: Waxman Industries, Inc. 24460 Aurora Road Bedford Heights, Ohio 44146 2 WAXMAN INDUSTRIES, INC. PROFIT SHARING AND 401(K) RETIREMENT PLAN FINANCIAL STATEMENTS AS OF JUNE 30, 1997, 1996 AND 1995 TOGETHER WITH REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 3 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors of Waxman Industries, Inc.: We have audited the accompanying statements of participants' equity of the Waxman Industries, Inc. Profit Sharing and 401(K) Retirement Plan (the Plan) as of June 30, 1997 and 1996, and the related statements of changes in participants' equity for each of the three years in the period ended June 30, 1997, as listed in the accompanying index. These financial statements and the schedules referred to below are the responsibility of the Plan's administrator. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards 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. An audit also includes assessing the accounting principles used and significant estimates made by the Plan's administrator, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the participants' equity of the Plan as of June 30, 1997 and 1996, and the changes in participants' equity for each of the three years in the period ended June 30, 1997, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes as of June 30, 1997 (Schedule I) and reportable transactions for the year ended June 30, 1997 (Schedule II), are presented for purposes of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The fund information in the statements of changes in participants' equity is presented for purposes of additional analysis rather than to present the changes in participants' equity of each fund. The supplemental schedules and fund information have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. 4 As explained in Note 5, information certified by the custodian and presented in Item 27-a -- Schedule of Assets Held for Investment Purposes (Schedule I) and Item 27-d -- Schedule of Reportable Transactions (Schedule II) does not disclose the historical cost of certain investments. Disclosure of this information is required by the Department of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. /s/ ARTHUR ANDERSEN LLP Cleveland, Ohio, December 13, 1997. 5 WAXMAN INDUSTRIES, INC. PROFIT SHARING AND 401(K) RETIREMENT PLAN INDEX JUNE 30, 1997, 1996 AND 1995 Statements of Participants' Equity as of June 30, 1997 and 1996 Statements of Changes in Participants' Equity for the Years Ended June 30, 1997, 1996 and 1995 Notes to Financial Statements Consent of Arthur Andersen LLP - Item 23 Schedule I - Item 27a - Schedule of Assets Held for Investment Purposes as of June 30, 1997 Schedule II - Item 27d - Schedule of Reportable Transactions for the Year Ended June 30, 1997 6 WAXMAN INDUSTRIES, INC. PROFIT SHARING AND 401(K) RETIREMENT PLAN STATEMENTS OF PARTICIPANTS' EQUITY JUNE 30, 1997 AND 1996
June 30, 1997 June 30, 1996 ------------- ------------- PARTICIPANT - DIRECTED INVESTMENTS, at market values: Waxman Industries, Inc. Common Stock $1,113,418 $1,412,700 CIGNA Funds: Fidelity Contrafund 203,050 111,018 Fidelity Advisor Balanced Fund* 191,193 100,060 Guaranteed Long Term Fund 987,154 526,730 INVESCO Industrial Fund 56,407 23,177 Lifetime 20 Fund 78,185 46,824 Lifetime 30 Fund 206,009 130,001 Lifetime 40 Fund 273,016 173,182 Lifetime 50 Fund 214,546 140,283 Lifetime 60 Fund 12,516 7,744 20th Century Ultra Fund 187,356 85,603 Warburg Pincus Growth & Income Fund 169,070 111,730 Warburg Pincus International Equity Fund 180,781 120,263 Cash Account 707 42,955 Participant Loans 11,802 5,369 ---------- ---------- Participants' Equity $3,885,210 $3,037,639 ========== ==========
The accompanying notes to financial statements are an integral part of these statements. *previously, Fidelity Income & Growth Fund 7 WAXMAN INDUSTRIES, INC. PROFIT SHARING AND 401(K) RETIREMENT PLAN STATEMENT OF CHANGES IN PARTICIPANTS' EQUITY FOR THE YEAR ENDED JUNE 30, 1997
Participant - Directed Investments ------------------------------------------------------------------------------------------- Fidelity Advisor INVESCO Fidelity Balanced Guaranteed Industrial Lifetime Lifetime Lifetime Contrafund Fund* Long Term Fund Fund 20 Fund 30 Fund 40 Fund ----------- ----------- ------------- ----------- ----------- ----------- ----------- INCREASES: Contributions- Waxman Industries, Inc. $ 14,208 $ 13,199 $ 55,100 $ 4,791 $ 7,522 $ 17,357 $ 18,264 Participants 48,304 49,063 160,774 14,589 21,122 48,962 49,497 Investment Income (Note 2) 34,157 32,054 32,936 9,062 9,295 24,443 32,342 Loan Repayment- Principal 154 347 943 120 169 Interest 6 32 267 4 7 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total increases 96,829 94,695 250,020 28,566 37,939 90,938 100,103 DECREASES: Distributions 9,714 5,245 74,490 3,627 4,699 6,144 2,381 Transaction costs 80 40 2,834 400 280 189 Loans to participants 7,191 Other ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total decreases 9,794 5,285 84,515 3,627 5,099 6,424 2,570 TRANSFERS BETWEEN FUNDS 4,997 1,723 294,919 8,291 (1,479) (8,506) 2,301 ----------- ----------- ----------- ----------- ----------- ----------- ----------- NET INCREASE (DECREASE) 92,032 91,133 460,424 33,230 31,361 76,008 99,834 PARTICIPANTS' EQUITY, beginning of year 111,018 100,060 526,730 23,177 46,824 130,001 173,182 ----------- ----------- ----------- ----------- ----------- ----------- ----------- PARTICIPANTS' EQUITY, end of year $ 203,050 $ 191,193 $ 987,154 $ 56,407 $ 78,185 $ 206,009 $ 273,016 =========== =========== =========== =========== =========== =========== ===========
The accompanying notes to financial statements are an integral part of this statement. * previously, Fidelity Income & Growth Fund 8
Participant - Directed Investments ------------------------------------------------------------------------------- Warburg Warburg 20th Waxman Pincus Pincus Lifetime Lifetime Century Industries, Inc. Growth & International Cash Participant 50 Fund 60 Fund Ultra Fund Common Stock Income Fund Equity Fund Account Loans Total -------- -------- ---------- ---------------- ----------- ------------- ------- ----------- ----- $ 10,547 $ 1,290 $ 12,334 $ 10,926 $ 16,087 $ 13,132 $ 194,757 39,093 3,743 57,706 23,990 47,233 39,497 603,573 25,421 1,286 27,715 36,286 20,140 22,856 307,993 547 144 165 328 ($ 2,917) 0 134 5 10 41 506 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 75,742 6,319 97,904 71,202 83,635 75,854 (2,917) 1,106,829 2,315 136 6,305 74,321 6,317 8,505 204,199 106 40 40 8,718 7 77 12,811 1,302 396 223 238 (9,350) 0 42,248 42,248 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 3,723 176 6,345 83,435 6,547 8,820 42,248 (9,350) 259,258 2,244 (1,371) 10,194 (287,049) (19,748) (6,516) 0 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 74,263 4,772 101,753 (299,282) 57,340 60,518 (42,248) 6,433 847,571 140,283 7,744 85,603 1,412,700 111,730 120,263 42,955 5,369 3,037,639 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- $ 214,546 $ 12,516 $ 187,356 $ 1,113,418 $ 169,070 $ 180,781 $ 707 $ 11,802 $ 3,885,210 =========== =========== =========== =========== =========== =========== =========== =========== ===========
The accompanying notes to financial statements are an integral part of this statement. * previously, Fidelity Income & Growth Fund 9 WAXMAN INDUSTRIES, INC. PROFIT SHARING AND 401(K) RETIREMENT PLAN STATEMENT OF CHANGES IN PARTICIPANTS' EQUITY FOR THE YEAR ENDED JUNE 30, 1996
Waxman Industries, Inc. Fidelity INVESCO Common Stock Fidelity Income & Guaranteed Industrial Lifetime Lifetime Fund Contrafund Growth Fund CIGNA Fund Fund 20 Fund 30 Fund ---------------- ---------- ----------- ---------- ---------- -------- -------- INCREASES: Contributions- Waxman Industries, Inc. $ 917 $ 1,050 $ 1,132 $ 5,440 $ 318 $ 589 $ 1,577 Participants 24,423 37,673 43,621 161,965 8,574 16,967 48,881 Loan Repayment- Principal -- 72 72 12 68 -- 21 Interest income -- 9 8 6 7 -- 10 Market value changes of investments 1,054,946 16,887 3,147 26,477 2,658 6,608 18,107 ---------- -------- --------- -------- ------- -------- -------- Total increases 1,080,286 55,691 47,980 193,900 11,625 24,164 68,596 ---------- -------- --------- -------- ------- -------- -------- DECREASES: Distributions to former participants 70,841 13,904 5,858 77,946 1,697 4,414 25,388 Transaction costs 3,442 21 180 1,270 17 440 659 Loans to Participants -- 260 682 1,834 211 -- 191 ---------- -------- --------- -------- ------- -------- -------- Total decreases 74,283 14,185 6,720 81,050 1,925 4,854 26,238 ---------- -------- --------- -------- ------- -------- -------- TRANSFERS BETWEEN FUNDS 751 5,863 (5,100) 4,402 367 (287) 857 ---------- -------- --------- -------- ------- -------- -------- NET INCREASE (DECREASE) 1,006,754 47,369 36,160 117,252 10,067 19,023 43,215 PARTICIPANTS' EQUITY, beginning of year 405,946 63,649 63,900 409,478 13,110 27,801 86,786 ---------- -------- --------- -------- ------- -------- -------- PARTICIPANTS' EQUITY, end of year $1,412,700 $111,018 $ 100,060 $526,730 $23,177 $ 46,824 $130,001 ========== ======== ========= ======== ======= ======== ========
The accompanying notes to financial statements are an integral part of this statement. 10
Warburg Warburg 20th Pincus Pincus Lifetime Lifetime Lifetime Century Growth & International Cash Participant 40 Fund 50 Fund 60 Fund Ultra Fund Income Fund Equity Fund Account Loans TOTAL -------- -------- -------- ---------- ----------- ------------- ------- ----------- ----- $ 1,501 $ 1,000 $ 126 $ 659 $ 1,408 $ 1,504 $ 3,359 $ -- $ 20,580 50,342 40,927 2,840 26,629 48,885 40,934 39,437 -- 592,098 582 211 -- 64 72 166 141 (141) 1,340 7 66 -- 8 9 39 18 -- 187 20,448 15,229 799 11,850 7,521 20,483 -- -- 1,205,160 -------- -------- -------- ------- --------- --------- ------- ------- ---------- 72,880 57,433 3,765 39,210 57,895 63,126 42,955 (141) 1,819,365 -------- -------- -------- ------- --------- --------- ------- ------- ---------- 4,181 5,137 6,877 12,963 20,731 21,910 -- -- 271,847 235 213 120 19 20 125 -- -- 6,761 589 1,656 -- 230 244 953 -- (5,510) 1,340 -------- -------- -------- ------- --------- --------- ------- ------- ---------- 5,005 7,006 6,997 13,212 20,995 22,988 -- (5,510) 279,948 -------- -------- -------- ------- --------- --------- ------- ------- ---------- 459 1,103 (22) 15,657 (17,039) (7,011) -- -- -- -------- -------- -------- ------- --------- --------- ------- ------- ---------- 68,334 51,530 (3,254) 41,655 19,861 33,127 42,955 5,369 1,539,417 104,848 88,753 10,998 43,948 91,869 87,136 -- -- 1,498,222 -------- -------- -------- ------- --------- --------- ------- ------- ---------- $173,182 $140,283 $ 7,744 $85,603 $ 111,730 $ 120,263 $42,955 $ 5,369 $3,037,639 ======== ======== ======== ======= ========= ========= ======= ======= ==========
11
WAXMAN INDUSTRIES, INC. PROFIT SHARING AND 401(K) RETIREMENT PLAN STATEMENT OF CHANGES IN PARTICIPANTS' EQUITY FOR THE YEAR ENDED JUNE 30, 1995 Fidelity INVESCO Fidelity Income & Guaranteed Industrial Lifetime Lifetime Lifetime Lifetime Lifetime Contrafund Growth Fund CIGNA Fund Fund 20 Fund 30 Fund 40 Fund 50 Fund 60 Fund ---------- ----------- ---------- ---------- -------- -------- -------- -------- -------- INCREASES: Contributions- Waxman Industries, Inc. $ 9,328 $ 11,463 $ 53,741 $ 2,566 $ 6,240 $15,784 $ 14,995 $ 9,866 $ 1,296 Participants 25,386 35,581 137,052 5,794 15,760 41,272 35,821 35,699 4,209 Transfer from previous trustee 20,068 15,721 218,817 3,506 3,979 23,996 48,075 37,769 4,825 Investment Income- Dividend income -- -- -- -- -- -- -- -- -- Interest income -- -- -- -- -- -- -- -- -- Realized appreciation of investments -- -- -- -- -- -- -- -- -- Market value changes of investments 9,144 2,932 10,944 1,173 2,216 6,940 8,119 6,909 668 ------- -------- -------- ------- ------- ------- --------- ------- ------- Total increases 63,926 65,697 420,554 13,039 28,195 87,992 107,010 90,243 10,998 ------- -------- -------- ------- ------- ------- --------- ------- ------- DECREASES: Distributions to former participants 322 1,177 14,190 -- 347 1,025 1,838 1,410 -- Transfer to new trustee -- -- -- -- -- -- -- -- -- Transaction costs -- -- 1,061 -- 47 200 160 80 -- Market value changes of investments -- -- -- -- -- -- -- -- -- Realized depreciation of investments -- -- -- -- -- -- -- -- -- ------- -------- -------- ------- ------- ------- --------- ------- ------- Total decreases 322 1,177 15,251 -- 394 1,225 1,998 1,490 0 ------- -------- -------- ------- ------- ------- --------- ------- ------- TRANSFERS BETWEEN FUNDS 45 (620) 4,175 71 -- 19 (164) -- -- ------- -------- -------- ------- ------- ------- --------- ------- ------- NET INCREASE (DECREASE) 63,649 63,900 409,478 13,110 27,801 86,786 104,848 88,753 10,998 PARTICIPANTS' EQUITY, beginning of year -- -- -- -- -- -- -- -- -- ------- -------- -------- ------- ------- ------- --------- ------- ------- PARTICIPANTS' EQUITY, end of year $63,649 $ 63,900 $409,478 $13,110 $27,801 $86,786 $ 104,848 $88,753 $10,998 ======= ======== ======== ======= ======= ======= ========= ======= =======
The accompanying notes to financial statements are an integral part of this statement. 12
Waxman Warburg Warburg 20th Industries, Inc. Pincus Pincus Waxman Fixed Money Century Common Stock Growth & International Diversified Industries Income Market Ultra Fund Fund Income Fund Equity Fund Fund Fund Fund Fund TOTAL ---------- ---------------- ----------- ------------- ----------- ---------- ------ ------ ----- $ 6,127 $ 8,973 $ 12,771 $ 15,506 $ -- $ -- $ -- $ -- $ 168,656 17,117 18,639 36,030 41,841 15,069 2,361 6,444 18,147 492,222 13,227 581,748 39,260 37,531 -- -- -- -- 1,048,522 -- -- -- -- 631 -- -- -- 631 -- -- -- -- 2,578 52 1,522 165 4,317 -- -- -- -- 2,699 -- -- -- 2,699 6,648 -- 5,847 -- -- -- -- -- 61,540 ------- --------- -------- -------- --------- --------- --------- --------- ---------- 43,119 609,360 93,908 94,878 20,977 2,413 7,966 18,312 1,778,587 ------- --------- -------- -------- --------- --------- --------- --------- ---------- 515 6,362 760 922 28,892 44,406 6,720 607 109,493 -- -- -- -- 191,687 634,958 99,579 122,298 1,048,522 -- 2,394 -- 12 -- -- -- -- 3,954 -- 194,387 -- 3,488 -- -- -- -- 197,875 -- -- -- -- -- 81,122 -- -- 81,122 ------- --------- -------- -------- --------- --------- --------- --------- ---------- 515 203,143 760 4,422 220,579 760,486 106,299 122,905 1,440,966 ------- --------- -------- -------- --------- --------- --------- --------- ---------- 1,344 (271) (1,279) (3,320) -- -- -- -- -- ------- --------- -------- -------- --------- --------- --------- --------- ---------- 43,948 405,946 91,869 87,136 (199,602) (758,073) (98,333) (104,593) 337,621 -- -- -- -- 199,602 758,073 98,333 104,593 1,160,601 ------- --------- -------- -------- --------- --------- --------- --------- ---------- $43,948 $ 405,946 $ 91,869 $ 87,136 $ -- $ -- $ -- $ -- $1,498,222 ======= ========= ======== ======== ========= ========= ========= ========= ==========
The accompanying notes to financial statements are an integral part of this statement. 13 WAXMAN INDUSTRIES, INC. PROFIT SHARING AND 401(K) RETIREMENT PLAN NOTES TO FINANCIAL STATEMENTS JUNE 30, 1997, 1996 AND 1995 1. Summary Of Plan: - ------------------ The following description of the Waxman Industries, Inc. (the Company) Profit Sharing and 401(k) Retirement Plan (the Plan) provides only general information. Participants should refer to the plan agreement for a more comprehensive description of the Plan's provisions. General - ------- The Plan is a defined contribution profit sharing plan. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Trustee - ------- Effective October 1, 1994, the trustee and the custodian of the Plan were changed from National City Bank to Connecticut General Trust Co. and Connecticut General Life Insurance Company (CIGNA), respectively. The Plan's custodian maintains all records of investment transactions and determines the valuation of the investment portfolio. Eligibility - ----------- Certain employees of the Company and its subsidiaries and affiliate are eligible to participate in the Plan provided they are at least 21 years of age and have completed one year of service with the Company, as defined in the plan agreement. Participant and Employer Contributions - -------------------------------------- Participants may defer up to 15% of their pretax compensation by making contributions to the Plan, subject to certain limitations. Participants may direct the allocation of their post-September 1994 contributions to thirteen investment options. Participants have the option to transfer cumulative balances, except those relating to prior Company contributions, between investment options. Effective October 1, 1994, the Company may make discretionary matching contributions to the Plan. Currently, the match is $.50 per every $1.00 contributed by the participant with the maximum Company match being 4% of the participant's compensation. The amount of the Company contributions made to the Plan is limited by the Internal Revenue Code and is determined at the discretion of the Board of Directors of the Company. Company contributions are allocated to the accounts of eligible participants, on a monthly basis, as established in Section 4.2 of the Plan. 14 Participant Accounts and Vesting - -------------------------------- The Plan provides for the establishment and maintenance of several accounts for each participant which represent, in total, the participants' equity in the net assets of the Plan. The individual participant accounts distinguish funds attributable to participant deferral contributions and Company contributions made on the participant's behalf. Participant accounts are credited with the participant's allocation of investment earnings and are charged with the participant's allocation of transaction costs. Allocations are based on the ratio of the participant's balance in the fund to the total fund balance. Participants are immediately vested in the value of their contributions plus earnings. Participants are vested in the Company contributions plus earnings ratably over five years of service and fully vest after five years of service, as defined. Distribution of Benefits - ------------------------ Distributions to participants generally commence at age 60 or earlier in cases of death or disability. The form of payment is designated by the participant. Earlier distributions of vested benefits may be made for participants who leave the Company prior to retirement. Participant Loans - ----------------- Participants may borrow from their accounts a maximum amount equal to the lesser of $50,000 or 50 percent of their account balance. Loan transactions are treated as a transfer to (from) the investment fund from (to) the Participant Loans Fund. Loan terms range from one to five years or up to twenty-five years for the purchase of a primary residence. The loans are secured by the balance in the participant's account and bear interest at a rate commensurate with local prevailing rates, as determined quarterly by the plan administrator, plus one percent. Interest rates on loans outstanding as of June 30, 1997 are 8.5%. Principal and interest payments on participant loans are paid ratably through monthly payroll deductions. Forfeitures - ----------- Forfeitures are used to reduce the contributions of the Company or to pay the administrative expenses of the Plan, at the Company's discretion. In the current year, forfeitures amounted to $3,146. Plan Termination - ---------------- Although it has not expressed any intent to do so, the Company may amend or terminate the Plan at its discretion, subject to applicable Internal Revenue Service and ERISA regulations. The rights of all participants to benefits accrued prior to any such termination are nonforfeitable. 15 Investment Options - ------------------ Investment options as of June 30, 1997, 1996 and 1995 include the following: Fidelity Contrafund - ------------------- Fidelity Contrafund is invested primarily in common stock and securities convertible into common stocks of both domestic and foreign companies. Fidelity Advisor Balanced Fund (previously, Fidelity Income & Growth Fund) - ------------------------------ Fidelity Advisor Balanced Fund is invested in a diversified portfolio of equity and fixed-income securities. Guaranteed Long Term Fund - ------------------------- Guaranteed Long Term Fund is invested primarily in commercial mortgages and private bond placements. Invesco Industrial Fund - ----------------------- INVESCO Industrial Fund is invested primarily in dividend-paying common stocks of domestic companies. It may also invest in fixed-income securities. Lifetime 20, 30, 40, 50 & 60 Funds ("Cigna Lifetime Funds") - ----------------------------------------------------------- CIGNA LIFETIME FUNDS are a family of five distinct investment portfolios structured to maximize return and minimize risk over a specific time period based on the participant's approximate age. Each fund primarily is invested in a diversified mix of stock and bond funds, designed to fit the time horizons and risk tolerances of investors at different stages of their lives. 20th Century Ultra Fund - ----------------------- 20th Century Ultra Fund is invested primarily in common stocks of medium-sized companies that meet certain technical and fundamental criteria. Waxman Industries, Inc. Common Stock - ------------------------------------ Waxman Industries, Inc. Common Stock is invested only in common stock of the Company. Warburg Pincus Growth & Income Fund - ----------------------------------- Warburg Pincus Growth & Income Fund is invested primarily in common stocks and securities which derive their value from common stocks. Warburg Pincus International Equity Fund - ---------------------------------------- Warburg Pincus International Equity Fund is invested primarily in common stocks of companies that are generally non-U.S. based. 16 2. Summary Of Significant Accounting Policies: - --------------------------------------------- Basis of Accounting - ------------------- The accompanying financial statements are prepared on the accrual basis of accounting. Use of Estimates - ---------------- The preparation of financial statements in conformity with generally accepted accounting principles requires the plan administrator to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases during the reporting period. Actual results could differ from those estimates. Administrative Expenses - ----------------------- Fees of the trustee, custodian, legal counsel, and auditors of the Plan are paid by the Company and thus are not reflected in the accompanying financial statements. Costs specific to various investment transactions are paid directly by the Plan and are reflected in the accompanying statements of changes in participants' equity. Investments - ----------- The investments of the Plan are maintained by CIGNA. The investments are valued at their market values in the accompanying financial statements. In general, market values are estimated by CIGNA based on market conditions and the characteristics of the funds' holdings, such as quality ratings. The investment vehicles are credited with actual earnings on the underlying investments and charged for distributions and transaction costs on a daily basis. As a result, the records of CIGNA are based solely on the market values of the investments. Therefore, the accompanying statements of changes in participants' equity do not reflect separate accounting for unrealized appreciation or depreciation of investments and realized gains or losses. In addition, Schedules I and II do not include information on the historical costs of the investments as required by ERISA. 3. Amounts Due To Terminated Participants: - ----------------------------------------- Participants' equity includes $113,904 and $21,632 of amounts due to terminated participants at June 30, 1997 and 1996, respectively. These amounts are recorded as a liability in the Plan's Form 5500 for the respective year. However, these amounts are not recorded as a liability in the accompanying statements of participants' equity in accordance with generally accepted accounting principles. 17 The following table reconciles participants' equity per the accompanying financial statements to the Form 5500 as filed by the Company for the years ended June 30, 1997 and 1996:
Benefits Participants' Participants' Payable to Benefits Equity Equity Participants Paid June 30, 1997 June 30, 1996 --------------- ---------------- ---------------- --------------- Per financial statements $ -- $ 204,199 $ 3,885,210 $ 3,037,639 Accrued benefit payments 113,904 113,904 (113,904) (21,632) Prior year reversal -- (21,632) -- -- -------- --------- ----------- ----------- Per Form 5500 $113,904 $ 296,471 $ 3,771,306 $ 3,016,007 ======== ========= =========== ===========
4. Income Tax Status: - -------------------- The Plan obtained its latest determination letter on November 21, 1996, in which the Internal Revenue Service stated that the Plan, as amended and restated, was in compliance with the applicable requirements of the Internal Revenue Code. The plan administrator believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code and that the Plan was qualified and the related trust was tax exempt as of June 30, 1997. Accordingly, income taxes have not been provided in the accompanying financial statements. Annually, informational returns are prepared and filed with the Internal Revenue Service. 5. Information Certified By The Custodian: - ----------------------------------------- Information on investments held and their market values as presented in the accompanying statements of participants' equity and on investment income as presented in the accompanying statements of changes in participants' equity has been certified by CIGNA as being accurate and complete. 6. Party-In-Interest Transactions: - --------------------------------- There were no prohibited transactions with a party in interest, as defined by ERISA. 7. Reportable Transactions: - -------------------------- Schedule II summaries the Plan's reportable transactions for the year ended June 30, 1997. As defined, a reportable transaction is a transaction or series of transactions in one fund involving amounts in excess of 5% of the market value of the Plan's assets at the beginning of the plan year. 18 8. Subsequent Events: - -------------------- Effective July 1, 1997, the employees of Barnett Inc., a previous subsidiary of the Company, were considered terminated employees of the Company for purposes of participation in the Plan. As of that date, these employees became eligible to participate in the Barnett Inc. Profit Sharing and 401(k) Retirement Plan. Subsequent to the Plan year-end, the trustee of the Plan was changed from Connecticut General Trust Co. to a committee designated by Waxman Industries, Inc. and the custodian of the Plan was changed from CIGNA to AETNA Retirement Services. All record keeping, custodial services and investment activities are now managed by AETNA Retirement Services. 19 SCHEDULE I WAXMAN INDUSTRIES, INC. PROFIT SHARING AND 401(K) RETIREMENT PLAN ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES JUNE 30, 1997 EMPLOYER IDENTIFICATION NUMBER: 34-0899894 PLAN NUMBER: 001
IDENTITY OF MARKET ISSUER DESCRIPTION OF INVESTMENT VALUE(a) - -------------- ----------------------------------------------------------- ----------- Waxman 234,404 Shares of Waxman Industries, Inc. $1,113,418 Industries: Common Stock CIGNA: 3,628 Units of Fidelity Contrafund 203,050 7,356 Units of Fidelity Advisor Balanced Fund 191,193 33,100 Units of Guaranteed Long Term Fund 987,154 2,802 Units of INVESCO Industrial Fund 56,407 5,024 Units of Lifetime 20 Fund 78,185 13,447 Units of Lifetime 30 Fund 206,009 18,371 Units of Lifetime 40 Fund 273,016 14,652 Units of Lifetime 50 Fund 214,546 932 Units of Lifetime 60 Fund 12,516 4,972 Units of 20th Century Ultra Fund 187,356 8,833 Units of Warburg Pincus Growth & Income Fund 169,070 6,716 Units of Warburg Pincus International Equity Fund 180,781 Cash Account 707 Participant Loans: Participant Loans 11,802 ---------- $3,885,210 ==========
(a) The Plan has requested historical cost information related to the above investments; however, this information has not been provided because of the nature of the custodian's recordkeeping system. The accompanying notes to financial statements are an integral part of this schedule. 20 SCHEDULE II WAXMAN INDUSTRIES, INC. PROFIT SHARING AND 401(K) RETIREMENT PLAN ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED JUNE 30, 1997 EMPLOYER IDENTIFICATION NUMBER: 34-0899894 PLAN NUMBER: 001
Current Value of Number of Asset on Trans Purchase Selling Historic Transaction Gain/ -actions Price Price Cost Date (Loss) - ------------------------ --------------- ------------- ------------ ------------- --------------- ------ PURCHASES - CIGNA Guaranteed -- Long Term Fund (b) $538,607 -- $538,607 $538,607 Waxman Industries, Inc. Common Stock 25 38,239 -- 38,239 38,239 -- SALES- CIGNA Guaranteed Long Term Fund (b) -- $111,098 (a) $111,098 (a) Waxman Industries, Inc. Common Stock 47 -- 377,478 (a) 377,478 (a)
(a) The Plan has requested historical cost information related to the above investments; however, this information has not been provided because of the nature of the custodian's recordkeeping system. As a result, the gain or loss cannot be determined. (b) The Plan has requested the number of transactions information, but currently it is not available. The accompanying notes to financial statements are an integral part of this schedule. EX-23 2 EXHIBIT 23 1 ARTHUR ANDERSEN LLP Exhibit 23 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report included in this Form 11-K, into the Company's previously filed Form S-8 Registration Statement No. 33-57477. /s/ Arthur Andersen LLP Cleveland, Ohio, January 22, 1998 -----END PRIVACY-ENHANCED MESSAGE-----