-----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, GjMm3jFDdpYvKu1aSUgwmAfs+t1umTAipweB/KuXZO4A8KX8GVPOrFTSgHX5bgct eHQ7AGOv9z4VTXfRBzP/wg== 0000950129-96-001290.txt : 19960625 0000950129-96-001290.hdr.sgml : 19960625 ACCESSION NUMBER: 0000950129-96-001290 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: 96584482 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 NICHOLS-HOMESHIELD 401(K) SAVINGS PLAN 1 SECURITY 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: Nichols-Homeshield 401(k) 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: Nichols-Homeshield 401(k) Savings Plan We have audited the accompanying statements of net assets available for benefits of the Nichols-Homeshield 401(k) 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 NICHOLS-HOMESHIELD 401(k) SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, ------------------------------- 1995 1994 ----------- ----------- Investments at fair value: Mutual fund assets: Fidelity Puritan Fund $ 127,812 $ 73,423 Fidelity Magellan Fund 4,590,045 3,043,570 Fidelity Contrafund 2,281,286 1,496,428 Fidelity Growth & Income Fund 4,483,709 3,140,449 Fidelity Overseas Fund 495,052 343,791 Fidelity Balanced Fund 1,255,353 836,053 Fidelity Government Money Market Fund 6,416,031 6,765,969 Quanex Corporation common stock 611,774 235,079 Common/commingled trust 439,555 301,399 Loans to participants 752,684 754,101 ----------- ----------- Total investments 21,453,301 16,990,262 ----------- ----------- Contributions Receivable: Employer 102,285 99,021 Employee 139,177 92,359 ----------- ----------- Total 241,462 191,380 ----------- ----------- Net assets available for benefits $21,694,763 $17,181,642 =========== ===========
See notes to financial statements 4 QUANEX CORPORATION NICHOLS-HOMESHIELD 401(k) SAVINGS PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
December 31, ------------------------------- 1995 1994 ----------- ----------- Investment income: Interest and dividends $ 1,135,097 $ 687,316 Net appreciation (depreciation) in fair value of investments 2,291,096 (571,943) ----------- ----------- Total income 3,426,193 115,373 ----------- ----------- Contributions: Employer 1,202,902 1,120,702 Less forfeitures 25,176 20,055 ----------- ----------- 1,177,726 1,100,647 Employee 1,496,737 1,178,336 ----------- ----------- Total contributions 2,674,463 2,278,983 ----------- ----------- Interest on participant loans 61,206 51,773 ----------- ----------- Total additions 6,161,862 2,446,129 ----------- ----------- Benefit payments 1,643,823 1,672,433 Administrative fees 4,918 3,449 ----------- ----------- Total deductions 1,648,741 1,675,882 Increase in net assets available for benefits 4,513,121 770,247 Net assets available for benefits: Beginning of year 17,181,642 16,411,395 ----------- ----------- End of year $21,694,763 $17,181,642 =========== ===========
See notes to financial statements 5 QUANEX CORPORATION NICHOLS-HOMESHIELD 401(k) SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1995 AND 1994 A. DESCRIPTION OF THE PLAN The following description of the Nichols-Homeshield 401(k) 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 was established on October 1, 1987, and was amended and restated effective January 1, 1989, as a defined contribution plan under Section 401(k) of the Internal Revenue Code ("IRC") which covers substantially all salaried and non-union hourly employees at the Nichols-Homeshield division of Quanex Corporation (the "Company") and bargaining unit employees at the Lincolnshire, Illinois plant. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). 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. Employees are eligible to make salary deferral contributions to the Plan on the entry date next following the date that the employee completes one month of service. Participants may elect salary deferrals between 1% and 15% of compensation as defined by the Plan agreement. The Company makes contributions on behalf of employees who have at least one year of service. The Company contribution is based on Company profits and is calculated based on a percentage of the employee's compensation. (3) Participant Accounts. Each participant's account is credited with the participant's contribution, the employer's contribution, and an allocation of investment income. Investment income allocations are based upon individual participant account balances as of the end of the period in which the income was earned. (4) Investment Options. Participants may direct allocation of their contributions to eight investment funds and Quanex stock 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. 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 issued by insurance companies, banks and other financial institutions. 6 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. (5) Vesting. Participants are immediately vested in their voluntary contributions and earnings thereon. Vesting in the employer contribution is based on years of credited service. A participant is 20% vested for each year of credited service and fully vested after five years. If a participant terminates employment prior to becoming fully vested, the nonvested portion of the employer contributions are immediately forfeited by the participant and utilized to reduce future employer contributions. (6) Payment of Benefits. The Plan is intended for long-term savings but provides for early withdrawals and loan arrangements under certain conditions. Upon termination of service, a participant may elect to receive a cash lump-sum distribution equal to the amount of vested benefits in his or her account. For further discussion of benefits payable, see Note F. (7) Loans. Loans may be granted to a participant of the Plan at the Committee's discretion. Any loan authorized by the Committee shall be subject to a term not to exceed five years. The Committee may agree to a longer term (up to seven years) only if the proceeds of the loan are to be used to purchase a dwelling. The loans bear a reasonable rate of interest established by the Committee. Interest on the loan is allocated to the borrower's participant account. 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) Administrative Expenses. Administrative expenses of the Plan are paid by the Company. Loan set up fees and carrying fees are paid by the participant. (3) 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 by using the last recorded sales price. (4) Payment of Benefits. Benefit payments are recorded when paid. C. 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 any time 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. D. FEDERAL INCOME TAX STATUS Management of the Company, the Plan administrator, and the Plan's legal counsel are of the opinion that the Plan is qualified under Sections 401(a) and 401(k) and exempt from federal income tax under Section 501(a) of the IRC. The Plan received a favorable letter of tax determination from the Internal Revenue Service dated December 22, 1994 as to the tax-exempt status of the Plan. 7 E. 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 ------ ---- ------ ---- 21,420 $410,186 10,964 $255,321
During the year ended December 31, 1995, the Plan sold 121 shares of Quanex Corporation common stock at $2,618 (cost $2,554). During the year ended December 31, 1994, the Plan sold 687 shares of Quanex Corporation common stock at $20,171 (cost $17,920). During the years ended December 31, 1995 and 1994, the Plan purchased shares of Fidelity mutual funds, as shown below:
1995 1994 ---- ---- Shares Cost Shares Cost ------ ---- ------ ---- 2,217,167 $9,843,629 4,518,739 $8,517,972
During the year ended December 31, 1995, the Plan sold 2,500,093 shares of Fidelity mutual fund assets valued at $8,215,994 (cost $7,931,353). During the year ended December 31, 1994, the Plan sold 2,308,717 shares of Fidelity mutual fund assets valued at $7,682,740 (cost $7,741,110). 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 ------ ---- ------ ---- 3,458,959 $3,458,959 580,428 $580,428
During the year ended December 31, 1995, the Plan sold 3,320,803 shares of Fidelity Common/Commingled Trust valued at $3,320,803 (cost $3,320,803). During the year ended December 31, 1994, the Plan sold 279,029 shares of Fidelity Common/Commingled Trust for $279,029 (cost $279,029). F. BENEFITS PAYABLE As of December 31, 1995 and 1994, net assets available for benefits included benefits of $69,484 and $553,455, respectively, due to participants who had withdrawn from participation in the Plan. As of December 31, 1994, benefits payable of $553,455 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 $17,181,642 and the net assets recorded on Form 5500 of $16,628,187. 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 $1,643,823 Amounts allocated to withdrawing participants at December 31, 1994 (553,455) ---------- Benefit payments per Form 5500 $1,090,368 ==========
8 G. SUPPLEMENTAL FUND INFORMATION Contributions, benefit payments and investment income by fund were as follows for years ended December 31:
1995 1994 ----------- ------------ Employee Contributions: Fidelity Puritan Fund $ 34,362 $ 4,693 Fidelity Magellan Fund 353,686 271,963 Fidelity Contrafund 236,354 179,701 Fidelity Growth and Income Fund 297,674 235,006 Fidelity Overseas Fund 35,253 15,923 Fidelity Balanced Fund 157,288 133,354 Fidelity Government Money Market Fund 314,095 237,777 Fidelity Short-Intermediate Government Fund - 40,399 Quanex Corporation common stock 19,116 50,706 Common/commingled trust 48,909 8,814 ----------- ------------ $1,496,737 $1,178,336 =========== ============ 1995 1994 ----------- ------------ Employer Contributions: Fidelity Puritan Fund $ 17,977 $ 2,845 Fidelity Magellan Fund 265,178 247,497 Fidelity Contrafund 164,793 159,420 Fidelity Growth and Income Fund 221,139 209,866 Fidelity Overseas Fund 18,633 10,892 Fidelity Balanced Fund 141,918 133,866 Fidelity Government Money Market Fund 312,536 287,442 Fidelity Short-Intermediate Government Fund - 42,381 Quanex Corporation common stock 16,809 2,686 Common/commingled trust 18,743 3,752 ----------- ------------ $1,177,726 $1,100,647 =========== ============
9
1995 1994 ----------- ------------ Benefit payments: Fidelity Puritan Fund $ 4,042 $ 724 Fidelity Magellan Fund 395,607 173,120 Fidelity Contrafund 209,350 114,938 Fidelity Growth and Income Fund 348,748 231,561 Fidelity Overseas Fund 402 14,196 Fidelity Balanced Fund 24,874 147,526 Fidelity Government Money Market Fund 659,346 733,507 Fidelity Short-Intermediate Government Fund - 251,569 Quanex Corporation common stock 122 2,320 Common/commingled trust 1,332 2,972 ----------- ------------ $1,643,823 $1,672,433 =========== ============ 1995 1994 ----------- ------------ Investment income: Fidelity Puritan Fund $ 19,349 $ (637) Fidelity Magellan Fund 1,151,140 (57,133) Fidelity Contrafund 525,713 (21,639) Fidelity Growth and Income Fund 1,147,352 55,544 Fidelity Overseas Fund 51,666 (1,692) Fidelity Balanced Fund 156,063 (47,397) Fidelity Government Money Market Fund 362,824 224,906 Fidelity Short-Intermediate Government Fund - (43,239) Quanex Corporation common stock (21,219) (655) Common/commingled trust 33,305 7,315 ----------- ------------ $3,426,193 $ 115,373 =========== ============
10 Item 27a - Schedule of Assets Held for Investment Purposes EIN: 38-1872178; PN 017 QUANEX CORPORATION NICHOLS-HOMESHIELD 401(K) SAVINGS PLAN SUPPLEMENTAL SCHEDULE OF INVESTMENTS DECEMBER 31, 1995
Shares/ Current Par Value Cost Value --------- ---- ------- Mutual Fund Assets - Fidelity Investments: - ------------------------------------------- Contrafund* 60,002 $ 1,948,559 $ 2,281,286 Government Money Market Fund* 6,416,031 6,416,031 6,416,031 Puritan Fund* 7,514 119,111 127,812 Growth and Income Fund* 165,756 3,638,444 4,483,709 Magellan* 53,385 3,867,994 4,590,045 Overseas Fund* 17,030 486,095 495,052 Balanced Fund* 92,852 1,202,954 1,255,353 ----------- ----------- Total Mutual Fund Assets 17,679,188 19,649,288 Quanex Corporation Common Stock* 31,575 647,285 611,774 Common/Commingled Trust* 439,555 439,555 439,555 Participant loans (bearing interest rates from 7.85% to 11%) 752,684 752,684 ----------- ----------- Total investments $19,518,712 $21,453,301 =========== ===========
*Party-in-Interest 11 Item 27d - Schedule of Reportable (5%) Transactions EIN 38-1872178; PN 017 NICHOLS-HOMESHIELD 401(K) 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) - ----------- ----------------- --------- --------------- ------- ------- ------------ ------ Magellan Fund 108 $1,895,417 66 $1,234,925 $1,118,069 $1,234,925 $116,856 Contrafund 87 1,372,327 53 935,051 882,613 935,051 52,438 Growth & Income Fund 102 1,210,975 65 794,612 715,917 794,612 78,695 Overseas Fund 58 2,624,733 29 2,517,434 2,486,944 2,517,434 30,490 Government Money Market Fund 96 1,956,550 95 2,306,488 2,306,488 2,306,488 0 Common/Commingled Trust 73 3,458,959 34 3,320,803 3,320,803 3,320,803 0
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. Nichols-Homeshield 401(k) Savings Plan Date June 24, 1996 /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. 33-54081 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 Nichols - Homeshield 401(k) 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-----