-----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, K9StHedcbazQq3zFy+PT42AQ650sEkz8MqkS0EGQXf2OwS6d44qHPfYxWL7dGwlj Ipi+8gElufvVbI5MglyrTw== 0000950129-96-001293.txt : 19960625 0000950129-96-001293.hdr.sgml : 19960625 ACCESSION NUMBER: 0000950129-96-001293 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960624 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: QUANEX CORP CENTRAL INDEX KEY: 0000276889 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 381872178 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05725 FILM NUMBER: 96584488 BUSINESS ADDRESS: STREET 1: 1900 W LOOP SOUTH STE 1500 STREET 2: ATTN THOMAS M BEWLEY CITY: HOUSTON STATE: TX ZIP: 77027 BUSINESS PHONE: 7139614600 MAIL ADDRESS: STREET 1: 1900 WEST LOOP SOUTH STREET 2: SUITE 1500 CITY: HOUSTON STATE: TX ZIP: 77027 11-K 1 QUANEX CORP. HOURLY UNIT EMPLOYEE SAVINGS PLAN 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 December 31, 1995 OR / / Transition Report Pursuant To Section 15(d) of the Securities Exchange Act of 1934 [No Fee Required] For the transition period from __________ to __________. Commission file number 1-5725 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: Quanex Corporation Hourly Bargaining Unit Employees Savings Plan B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Quanex Corporation 1900 West Loop South, Suite 1500 Houston, Texas 77027 Phone: (713) 961-4600 2 INDEPENDENT AUDITORS' REPORT The Benefits Committee Quanex Corporation Houston, Texas Re: Quanex Corporation Hourly Bargaining Unit Employees Savings Plan We have audited the accompanying statements of net assets available for benefits of the Quanex Corporation Hourly Bargaining Unit Employee Savings Plan (the "Plan") as of December 31, 1995 and 1994, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements 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 management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 1995 and 1994, and the changes in net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedules of (1) investments as of December 31, 1995 and (2) 5% reportable transactions for the year ended December 31, 1995 are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These schedules are the responsibility of the Plan's management. Such schedules have been subjected to the auditing procedures applied in our audit of the basic 1995 financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. /s/ DELOITTE & TOUCHE LLP - ------------------------- DELOITTE & TOUCHE LLP May 3, 1996 3 QUANEX CORPORATION HOURLY BARGAINING UNIT EMPLOYEES SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, ---------------------------------------- 1995 1994 ------------ ------------ Assets: Investments, at fair value - Mutual fund assets: Fidelity Puritan Fund $ 835,000 $ 479,342 Fidelity Magellan Fund 1,843,510 990,913 Fidelity Contrafund 127,661 21,161 Fidelity Growth and Income Fund 328,455 126,277 Fidelity Overseas Fund 369,562 221,045 Fidelity Balanced Fund 74,250 16,594 Fidelity Government Money Market Fund 2,119,423 1,551,467 Quanex Corporation common stock 187,886 132,707 Common/commingled trust 95,257 20,091 Deposits with insurance company, at contract value - 131,294 ---------- ---------- Total 5,981,004 3,690,891 ---------- ---------- Employee contributions receivable 136,120 117,866 Employer contributions receivable 10,191 6,951 ---------- ---------- Total 146,311 124,817 ---------- ---------- Net assets available for benefits $6,127,315 $3,815,708 ========== ==========
See notes to financial statements. 4 QUANEX CORPORATION HOURLY BARGAINING UNIT EMPLOYEES SAVINGS PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
December 31, ---------------------------------------- 1995 1994 ------------ ------------ Investment income: Interest and dividends $ 298,232 $ 142,094 Net appreciation (depreciation) in fair value of investments 467,045 (80,190) ---------- ---------- Total 765,277 61,904 ---------- ---------- Contributions: Employee 1,637,214 1,157,814 Employer 98,350 72,075 ---------- ---------- Total 1,735,564 1,229,889 ---------- ---------- Total additions 2,500,841 1,291,793 Benefit payments 189,234 96,950 ---------- ---------- Increase in net assets available for benefits 2,311,607 1,194,843 Net assets available for Beginning of year 3,815,708 2,620,865 ---------- ---------- End of year $6,127,315 $3,815,708 ========== ==========
See notes to financial statements. 5 QUANEX CORPORATION HOURLY BARGAINING UNIT EMPLOYEES SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1995 AND 1994 A. DESCRIPTION OF THE PLAN The following description of the Quanex Corporation Hourly Bargaining Unit Employees' Savings Plan (the "Plan") is provided for general information purposes only. Participants should refer to the Plan document for more complete information. (1) General. The Plan, originally named the Quanex Corporation Hourly Employee Savings Plan, became effective January 1, 1989 and is sponsored by Quanex Corporation (the "Company"). The Plan began receiving contributions in April 1989. The Plan is a defined contribution plan which is subject to the Employee Retirement Income Security Act of 1974 ("ERISA"). The plan is a voluntary savings plan in which hourly employees of certain divisions of the Company are eligible to participate after completing three months of active service. The assets of the Plan are held in trust by Fidelity Management Trust Company ("Fidelity" or the "Trustee"). The Benefits Committee (the "Committee"), appointed by the Company's Board of Directors, serves as the Plan administrator. (2) Contributions. Participants may elect to contribute up to 15% of their before-tax or after-tax compensation as defined by the Plan agreement. The Plan was amended effective July 1, 1994 to include LaSalle Steel Company hourly employees. All plan provisions apply to the LaSalle Steel Company hourly employees with the addition of an employer matching contribution that does not exceed 5% of the member's considered compensation. During the 1994 Plan year, LaSalle Steel Company made a Supplemental Employer Contribution of $100 on behalf of each member who was employed by LaSalle Steel Company on May 15, 1994 and also on behalf of each member who was first hired by LaSalle Steel Company after May 15, 1994, and completed 720 hours of service. (3) Participant Accounts. Each participant's account is credited with the participant's contribution and an allocation of investment income, which is based upon individual participant account balances as of the end of the period in which the income was earned. (4) Investment Options. The Plan has eight investment funds and a Quanex stock fund managed by the Trustee, as follows: Government Money Market Fund - composed of short-term government obligations. Balanced Fund - invested and reinvested in common and preferred stocks and bonds. Growth and Income Fund - invested and reinvested in equity and debt securities of foreign and domestic companies. 6 Magellan Fund - invested and reinvested in equity and debt securities of foreign and domestic companies. Contrafund - invested and reinvested in equities of foreign and domestic companies. Overseas Fund - invested and reinvested in foreign securities. Common/Commingled Trust - invested and reinvested in investment contracts with insurance companies, banks and other financial institutions. Puritan Fund - invested and reinvested in common and preferred stocks and bonds. Quanex Corporation Common Stock - invested and reinvested exclusively in the common stock of Quanex Corporation. Additionally, the Plan had investments in a series of guaranteed investment contracts, which matured January 1, 1995. Refer to Note C for further discussion. (5) Vesting. Participants are immediately vested in their contributions and the related earnings. Vesting in the employer's matching contributions for employees is 0% for less than one year of services graduating to 100% for five or more years. Upon death, retirement or total permanent disability, the participant or beneficiary becomes immediately vested in the employer's contribution. In the event of termination, nonvested portions of employer's contributions are immediately forfeited by participants and utilized to reduce future employer matching contributions. (6) Payment of Benefits. Upon termination of service, the participant may elect to receive a lump sum distribution equal to the total amount of vested benefits in his or her account. See further discussion of benefits payable in Note G. B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (1) Accounting Basis. The financial statements of the Plan are prepared on the accrual basis of accounting in accordance with generally accepted accounting principles. (2) Investment Valuation. The Plan recognizes net appreciation or depreciation in the fair value of its investments. Investments are reflected at fair value in the financial statements. Fair value of mutual fund assets is determined using a quoted net asset value. Fair value for Quanex Corporation common stock, which is listed on the New York Stock Exchange, is determined using the last recorded sales price. (3) Administrative Expenses. The Company pays all administrative expenses. (4) Payment of Benefits. Benefit payments are recorded when paid. 7 C. DEPOSITS WITH INSURANCE COMPANY In 1989, the Plan entered into a series of guaranteed investment contracts with Metropolitan Life Insurance Company ("Metropolitan"). The contracts provided a guaranteed rate of return on principal invested which was credited to the Plan for the length of the contracts. The contracts were reduced for Plan withdrawals. The contracts are included in the financial statements at the December 31, 1994 contract values as reported to the Plan by Metropolitan. The contracts matured on January 1, 1995. The contracts provided an interest rate of 8.3%. D. PLAN TERMINATION Although it has not expressed any intention to do so, the Company has the right under the Plan to terminate the Plan at anytime subject to the provisions set forth in ERISA. In the event of plan termination, the assets held by the Trustee under the Plan will be valued and fully vested, and each participant will be entitled to distributions respecting his or her account. E. FEDERAL INCOME TAX STATUS The Plan is subject to specific rules and regulations related to employee benefit plans under the Department of Labor and the Internal Revenue Service (the "IRS"). The Plan has received a favorable letter of tax determination dated September 15, 1995. As such, the Plan is a qualified trust under Sections 401 (a) and 401 (k) of the Internal Revenue Code (the "Code") and, as a result, is exempt from federal income tax under Section 501 (a) of the Code. The Company believes the Plan is currently designed and being operated in compliance with the applicable requirements of the Code. The Company believes the Plan was qualified and the related trust was tax-exempt as of the financial statement dates. Subsequent to year-end, the Plan received a favorable determination letter dated January 29, 1996, which supersedes the letter dated September 15, 1995. F. RELATED PARTY TRANSACTIONS During the years ended December 31, 1995 and 1994, the Plan purchased shares of Quanex Corporation common stock, as shown below:
1995 1994 ---- ---- Shares Cost Shares Cost -------- -------- -------- -------- 4,243 $92,529 5,096 $110,023
During the years ended December 31, 1995 and 1994, the Plan sold 347 and 194 shares of Quanex Corporation common stock for $7,457 (cost $7,997) and $5,392 (cost $4,682), respectively. During the years ended December 31, 1995 and 1994, the Plan purchased shares of Fidelity mutual fund assets as shown below:
1995 1994 ---- ---- Shares Cost Shares Cost -------- -------- -------- -------- 879,682 $2,278,180 824,831 $1,914,365
8 During the years ended December 31, 1995 and 1994, the Plan sold 270,825 and 321,719 shares of Fidelity mutual fund assets for $484,054 (cost $456,173) and $819,960 (cost $825,438), respectively. During the years ended December 31, 1995 and 1994, the Plan purchased shares of Fidelity Common/Commingled Trust as shown below:
1995 1994 ---- ---- Shares Cost Shares Cost ------ ---- ------ ---- 82,554 $82,554 20,091 $20,091
During the year ended December 31, 1995, the Plan sold 7,387 shares of Fidelity Common/Commingled Trust for $7,387 (cost $7,387). No shares were sold during the year ended December 31, 1994. G. BENEFITS PAYABLE As of December 31, 1995 and 1994, net assets available for benefits included benefits of $16,875 and $22,867, respectively, due to participants who had withdrawn from participation in the Plan. As of December 31, 1994, benefits payable of $22,867 were reported as a liability on the ERISA Form 5500, resulting in a difference between net assets available for benefits presented within this report of $3,815,708 and the net assets recorded on Form 5500 of $3,792,841. During 1995, the Department of Labor clarified its definition of benefits payable, which resulted in no liability for benefits payable on Form 5500 as of December 31, 1995. The following is a reconciliation of benefit payments according to the financial statements to Form 5500 for the year ended December 31, 1995: Benefit payments per the financial statements $189,234 Amounts allocated to withdrawing participants at December 31, 1994 (22,867) -------- Benefit payments per Form 5500 $166,367 ========
9 H. SUPPLEMENTAL FUND INFORMATION Contributions, benefit payments and investment income by fund were as follows for the years ended December 31:
1995 1994 ------------ ------------ Employee Contributions: Fidelity Puritan Fund $ 225,346 $ 174,607 Fidelity Magellan Fund 419,024 331,770 Fidelity Contrafund 44,860 14,595 Fidelity Growth and Income Fund 114,399 59,278 Fidelity Overseas Fund 144,420 90,740 Fidelity Balanced Fund 48,443 14,912 Fidelity Government Money Market Fund 508,585 384,265 Fidelity Short-Intermediate Government Fund - 26,042 Quanex Corporation common stock 62,267 40,789 Common/commingled trust 69,870 20,816 ------------ ------------ $ 1,637,214 $ 1,157,814 ============ ============
1995 1994 ------------ ------------ Employer Contributions: Fidelity Puritan Fund $ 13,810 $ 5,164 Fidelity Magellan Fund 19,431 7,337 Fidelity Contrafund 4,379 1,596 Fidelity Growth and Income Fund 9,598 3,637 Fidelity Overseas Fund 10,578 4,515 Fidelity Balanced Fund 6,954 2,602 Fidelity Government Money Market Fund 18,045 40,897 Quanex Corporation common stock 6,177 2,628 Common/commingled trust 9,378 3,699 ------------ ------------ $ 98,350 $ 72,075 ============ ============
See notes to financial statements. 10
1995 1994 ------------ ------------- Benefit payments: Fidelity Puritan Fund $ 26,984 $ 13,530 Fidelity Magellan Fund 51,315 28,461 Fidelity Contrafund 214 Fidelity Growth and Income Fund 5,381 523 Fidelity Overseas Fund 2,595 4,168 Fidelity Balanced Fund 2,498 Fidelity Government Money Market Fund 94,128 41,686 Fidelity Short-Intermediate Government Fund - 958 Quanex Corporation common stock 3,993 3,574 Common/commingled trust 2,340 - Guaranteed investment contract - 3,836 ------------ ------------ $ 189,234 $ 96,950 ============ ============
1995 1994 ------------- ------------- Investment income: Fidelity Puritan Fund $ 129,241 $ 4,259 Fidelity Magellan Fund 431,859 (15,476) Fidelity Contrafund 17,439 231 Fidelity Growth and Income Fund 69,343 1,881 Fidelity Overseas Fund 26,530 (102) Fidelity Balanced Fund 6,251 (175) Fidelity Government Money Market Fund 105,725 50,313 Fidelity Short-Intermediate Government Fund - (3,306) Quanex Corporation common stock (24,578) 13,729 Common/commingled trust 3,467 218 Guaranteed investment contract - 10,332 ------------- ------------- $ 765,277 $ 61,904 ============= =============
See notes to financial statements. 11 Item 27a - Schedule of Assets Held for Investment Purposes EIN: 38-1872178; PN 015 QUANEX CORPORATION HOURLY BARGAINING UNIT EMPLOYEES SAVINGS PLAN SUPPLEMENTAL SCHEDULE OF INVESTMENTS DECEMBER 31, 1995
Shares/ Current Par Value Cost Value --------- -------- ------- Mutual Fund Assets - Fidelity Investments: - ------------------------------------------ Government Money Market Fund* 2,119,423 $2,119,423 $2,119,423 Balanced Fund* 5,492 70,877 74,250 Puritan Fund* 49,089 771,267 835,000 Growth and Income Fund* 12,143 279,626 328,455 Magellan* 21,441 1,561,677 1,843,510 Contrafund* 3,358 120,263 127,661 Overseas Fund* 12,713 346,504 369,562 ---------- ---------- Total Mutual Fund Assets 5,269,637 5,697,861 Quanex Corporation Common Stock* 9,697 208,427 187,886 Common/Commingled Trust* 95,257 95,257 95,257 ---------- ---------- Total investments $5,573,321 $5,981,004 ========== ==========
*Party-in-Interest 12 Item 27d - Schedule of Reportable (5%) Transactions EIN 38-1872178; PN 015 QUANEX CORPORATION HOURLY BARGAINING UNIT EMPLOYEES SAVINGS PLAN SUPPLEMENTAL SCHEDULE OF 5% REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1995 Series of Transactions
Current Total Number of Total Number Value on Net Purchases During Purchase of Sales During Selling Cost of Transaction Gain Description Plan Year Price Plan Year Price Asset Date (Loss) - ----------- ---------------- -------- -------------- ------- -------- ----------- --------- Puritan Fund 42 $316,129 16 $48,047 $45,811 $48,047 $2,236 Magellan Fund 54 640,704 25 113,644 92,232 113,644 21,412 Overseas Fund 31 167,351 15 36,872 34,637 36,872 2,235 Government Money 67 832,186 Market Fund 49 264,231 264,231 264,231 0
13 SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. Quanex Corporation Hourly Bargaining Unit Employee Savings Plan Date June 24, 1996 /s/ JOSEPH K. PEERY ---------------------------- --------------------------------------- Joseph K. Peery, Benefits Committee 14 INDEX TO EXHIBITS 23.1 -- Independent Auditor's Consent EX-23.1 2 INDEPENDENT AUDITOR'S CONSENT 1 EXHIBIT 23.1 INDEPENDENT AUDITOR'S CONSENT We consent to the incorporation by reference in Registration Statement No. 33-46824 of Quanex Corporation on Form S-8 of our report dated May 3, 1996 appearing in the Annual Report of Form 11-K of the Quanex Corporation Hourly Bargaining Unit Employee Savings Plan for the year ended December 31, 1995. /s/ DELOITTE & TOUCHE LLP - ------------------------------- Deloitte & Touche LLP Houston, Texas June 24, 1996 -----END PRIVACY-ENHANCED MESSAGE-----