-----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, FNkiYg4VjaZJdXJ9PmeO8kOy8Q0cBGX/2e7blCTtNCQ1N+bPaN+m8Gm/4EOmVwc4 Cf5+P4Muz0nSnLJzVeehpQ== 0000950129-97-002540.txt : 19970625 0000950129-97-002540.hdr.sgml : 19970625 ACCESSION NUMBER: 0000950129-97-002540 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970624 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: 97628892 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 CORPORATION (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 (NO FEE REQUIRED) For the fiscal year ended December 31, 1996 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 name below: Quanex Corporation Employee 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 (713) 961-4600 2 INDEPENDENT AUDITORS' REPORT The Benefits Committee Quanex Corporation Houston, Texas Re: Quanex Corporation Employee Savings Plan We have audited the accompanying statements of net assets available for benefits of the Quanex Corporation Employee Savings Plan (the "Plan") as of December 31, 1996 and 1995, 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, 1996 and 1995, 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, 1996 and (2) 5% reportable transactions for the year ended December 31, 1996 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 1996 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 March 28, 1997 3 QUANEX CORPORATION EMPLOYEE SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, -------------------------- 1996 1995 ----------- ----------- Assets: Investments at fair value - Mutual fund assets: Fidelity Puritan Fund $ 7,990,942 $ 6,212,219 Fidelity Magellan Fund 9,025,079 8,297,683 Fidelity Contrafund 3,106,854 1,126,654 Fidelity Growth and Income Fund 4,187,289 2,098,750 Fidelity Overseas Fund 2,151,256 1,573,296 Fidelity Balanced Fund 272,553 158,122 Templeton Foreign Fund 476,234 -- Fidelity Government Money Market Fund 10,265,488 10,910,320 Quanex Corporation common stock 1,822,006 1,519,737 Common/commingled trust 807,949 1,244,993 ----------- ----------- 40,105,650 33,141,774 Employee contributions receivable 446,619 449,920 Employer contributions receivable 142,213 128,560 ----------- ----------- Total 588,832 578,480 Net assets available for benefits $40,694,482 $33,720,254 =========== ===========
See notes to financial statements. 4 QUANEX CORPORATION EMPLOYEE SAVINGS PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
December 31, -------------------------- 1996 1995 ----------- ----------- Investment income: Interest and dividends $ 3,420,494 $ 1,708,988 Net appreciation in fair value of investments 1,154,013 2,926,558 ----------- ----------- Total 4,574,507 4,635,546 ----------- ----------- Contributions: Employer 1,003,456 969,303 Less forfeitures 13,691 8,913 ----------- ----------- 989,765 960,390 Employee 3,671,185 3,734,966 ----------- ----------- Total 4,660,950 4,695,356 ----------- ----------- Total additions 9,235,457 9,330,902 Benefit payments 2,261,229 2,278,666 ----------- ----------- Increase in net assets available for benefits 6,974,228 7,052,236 Net assets available for benefits: Beginning of year 33,720,254 26,668,018 ----------- ----------- End of year $40,694,482 $33,720,254 =========== ===========
See notes to financial statements. 5 QUANEX CORPORATION EMPLOYEE SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1996 AND 1995 A. THE PLAN The following brief description of the Quanex Corporation Employee Savings Plan (the "Plan") is provided for general information purposes only. Participants should refer to the Plan agreement for more complete information. (1) General. The Plan became effective April 1, 1986, as amended and restated effective January 1, 1989, and is sponsored by Quanex Corporation (the "Company"). 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 employees of the Company and its subsidiaries, excluding the Nichols-Homeshield division and Piper Impact subsidiary, and those Quanex employees who are covered by a collective bargaining agreement, 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 Board of Directors of the Company, serves as the Plan administrator. (2) Contributions. Participants may elect to contribute up to 15% of their pre-tax annual compensation or up to 15% of their after-tax annual compensation limited to 15% of considered compensation as defined by the Plan agreement. The Company matches 50% of the employee's contribution up to, but not in excess of, 2.5% of the employee's annual compensation. (3) Participants Account. Each participant's account is credited with the participant's contribution, the Company's matching contribution, and an allocation of investment income, which is based on the participant's account balance as of the end of the period in which the income is earned. (4) Investment Options. The Plan offers the following investment funds, all managed by the Trustee, as follows: Government Money Market Fund-composed of short-term government obligations. Puritan Fund-invested and reinvested in common and preferred stocks and bonds. Magellan Fund-invested and reinvested in equity and debt securities of foreign and domestic companies. Growth and Income Fund-invested and reinvested in equity and debt securities of foreign and domestic companies. Overseas Fund-invested and reinvested in foreign securities. Balanced Fund-invested and reinvested in common and preferred stocks and bonds. Contrafund-invested and reinvested in equities of foreign and preferred stock. Templeton Foreign Fund -invested and reinvested in foreign securities. Quanex Corporation Common Stock-invested and reinvested exclusively in the common stock of Quanex Corporation. Common/Commingled Trust-invested and reinvested in investment contracts issued by insurance companies, banks and other financial institutions. (5) Vesting. Participants are immediately vested in their voluntary contributions and the related earnings. Vesting in the employer's matching contributions for employees is 0% for less than one year of service graduating to 100% for five or more years. Upon death, retirement or total and permanent disability, the participant or beneficiary becomes immediately 100% 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 (6) Payment of Benefits. Upon termination of service, the participant may elect to receive a lump-sum amount equal to the amount of vested benefits in his or her account. As of December 31, 1996 and 1995, net assets available for benefits included benefits of $30,852 and $221,024, respectively, due to participants who have withdrawn from participation in the Plan. 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 standards. (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. The fair value of the common/commingled trust is at face value. (3) Use of Estimates. The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of changes in the net assets available for benefits during the reporting period. The Plan's financial statements include amounts that are based on management's best estimates and judgments. Actual results could differ from those estimates. (4) Administrative Expenses. The Company pays all administrative expenses. (5) Payment of Benefits. Benefit payments are recorded when paid. C. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to terminate the Plan, subject to the provisions of ERISA. In the event of termination of the Plan, 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. D. 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 ("IRS"). 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 taxation under Sections 501(a) of the Code. The Plan received a favorable determination letter from the IRS dated October 3, 1996. The Company believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the Code. Therefore, it believes the Plan was qualified and the related trust was tax-exempt as of the financial statement dates. 7 E. RELATED PARTY TRANSACTIONS During the years ended December 31, 1996 and 1995, the Plan purchased and sold shares of Quanex Corporation common stock, as shown below:
1996 1995 ---- ---- Shares Cost Sales Price Shares Cost Sales Price ------ ---- ----------- ------ ---- ----------- Purchases 18,195 $403,216 31,540 $656,408 Sales 30,076 618,301 $741,499 15,119 322,891 $368,385
During the years ended December 31, 1996 and 1995, the Plan purchased and sold shares of Fidelity mutual fund assets, as shown below:
1996 1995 ---- ---- Shares Cost Sales Price Shares Cost Sales Price ------ ---- ----------- ------ ---- ----------- Purchases 3,781,125 $ 15,764,549 5,924,023 $13,115,404 Sales 4,142,244 8,854,715 $9,179,359 3,911,470 8,630,838 $9,131,908
During the years ended December 31, 1996 and 1995, the Plan purchased and sold shares of Fidelity Common/Commingled Trust, as shown below:
1996 1995 ---- ---- Shares Cost Sales Price Shares Cost Sales Price ------ ---- ----------- ------ ---- ----------- Purchases 396,185 $396,185 952,231 $952,231 Sales 833,229 833,229 $833,229 179,211 179,211 $179,211
F. SUBSEQUENT EVENT In April 1997, Quanex Corporation announced the sale of their LaSalle Steel Company subsidiary ("LaSalle") to Niagara Corporation. 8 G. SUPPLEMENTAL FUND INFORMATION Contributions, benefit payments and investment income by fund are as follows for the years ended December 31:
1996 1995 ---------- ---------- Employee Contributions: Fidelity Puritan Fund $ 631,064 $ 667,357 Fidelity Magellan Fund 909,697 1,139,936 Fidelity Contrafund 325,350 126,372 Fidelity Growth and Income Fund 381,285 230,475 Fidelity Overseas Fund 227,957 230,121 Fidelity Balanced Fund 40,829 26,265 Fidelity Government Money Market Fund 953,608 1,109,768 Templeton Foreign Fund 17,898 -- Quanex Corporation common stock 117,769 122,282 Common/commingled trust 65,728 82,390 ---------- ---------- $3,671,185 $3,734,966 ========== ==========
1996 1995 ---------- ---------- Employer Contributions: Fidelity Puritan Fund $ 172,119 $ 178,592 Fidelity Magellan Fund 242,159 256,350 Fidelity Contrafund 83,610 31,385 Fidelity Growth and Income Fund 95,579 56,557 Fidelity Overseas Fund 60,383 61,502 Fidelity Balanced Fund 11,115 7,216 Fidelity Government Money Market Fund 268,082 313,266 Templeton Foreign Fund 4,332 -- Quanex Corporation common stock 37,089 37,418 Common/commingled trust 15,297 18,104 ---------- ---------- $ 989,765 $ 960,390 ========== ==========
9
1996 1995 ----------- ----------- Benefit payments: Fidelity Puritan Fund $ 331,862 $ 382,406 Fidelity Magellan Fund 529,329 441,687 Fidelity Contrafund 29,696 4,154 Fidelity Growth and Income Fund 116,336 78,206 Fidelity Overseas Fund 57,153 143,802 Fidelity Balanced Fund 2,476 1,628 Fidelity Government Money Market Fund 859,097 1,171,681 Templeton Foreign 292 -- Quanex Corporation common stock 92,241 42,219 Common/commingled trust 242,747 12,883 ----------- ----------- $ 2,261,229 $ 2,278,666 =========== ===========
1996 1995 ----------- ----------- Investment income: Fidelity Puritan Fund $ 1,005,808 $ 1,062,499 Fidelity Magellan Fund 977,164 2,263,096 Fidelity Contrafund 443,202 181,608 Fidelity Growth and Income Fund 591,891 489,667 Fidelity Overseas Fund 241,670 126,585 Fidelity Balanced Fund 22,680 14,721 Fidelity Government Money Market Fund 515,358 585,772 Templeton Foreign 30,573 -- Quanex Corporation common stock 685,994 (145,524) Common/commingled trust 60,167 57,122 ----------- ----------- $ 4,574,507 $ 4,635,546 =========== ===========
10 ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES EIN: 38-1872178; PN 012 QUANEX CORPORATION EMPLOYEE SAVINGS PLAN SUPPLEMENTAL SCHEDULE OF INVESTMENTS DECEMBER 31, 1996
Shares/ Current Par Value Cost Value --------- ---- ----- Mutual Fund Assets - Fidelity Investments: - ------------------------------------------ Contrafund* 73,709 $ 2,818,915 $ 3,106,854 Government Money Market Fund* 10,265,488 10,265,488 10,265,488 Puritan Fund* 463,512 7,404,337 7,990,942 Growth and Income Fund* 136,261 3,494,225 4,187,289 Magellan* 111,904 8,262,703 9,025,079 Overseas Fund* 69,755 1,957,919 2,151,256 Balanced Fund* 19,357 255,546 272,553 Templeton Foreign Fund* 45,969 462,601 476,234 ------------ ------------ Total Mutual Fund Assets 34,921,734 37,475,695 Quanex Corporation Common stock* 66,557 1,401,349 1,822,006 Common/Commingled Trust* 807,949 807,949 807,949 ---------- ---------- Total investments $37,131,032 $40,105,650 =========== ===========
* Party-in-Interest 11 ITEM 27d - SCHEDULE OF REPORTABLE (5%) TRANSACTIONS EIN 38-1872178; PN 012 QUANEX CORPORATION EMPLOYEE SAVINGS PLAN SUPPLEMENTAL SCHEDULE OF 5% REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1996
Single 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) - ----------- ----------- ------- ----------- ------- ------- ------ ------ None
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 117 $2,676,360 65 $1,037,920 $943,415 $1,037,920 $ 94,505 *Magellan Fund 122 3,466,175 84 2,324,953 2,194,773 2,324,953 130,180 *Growth & Income Fund 125 2,244,476 44 558,617 514,966 558,617 43,651 *Contrafund 116 2,391,321 38 658,318 640,714 658,318 17,604 *Government Money Market Fund 137 3,346,494 130 3,991,325 3,991,325 3,991,325 0
- ----------------------- *Party-in-interest 12 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 Employee Savings Plan Date: June 24, 1997 /s/ Joseph K. Peery --------------------------- ---------------------------------------- Joseph K. Peery, Benefits Committee 13 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. 33-38702 of Quanex Corporation on Form S-8 of our report dated March 28, 1997 appearing in the Annual Report on Form 11-K of the Quanex Corporation Employee Savings Plan for the year ended December 31, 1996. /s/ DELOITTE & TOUCHE LLP DELOITTE & TOUCHE LLP Houston, Texas June 24, 1997 -----END PRIVACY-ENHANCED MESSAGE-----