-----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, VswYmxwqlYMYydtU0iTpqW8d7CfYD4IJqn5tkAYUcajqcBhb/+R1YaNKVjxn6pH3 xMFN4OFZ7xBPx0nsZbUP3g== 0000950129-97-002539.txt : 19970625 0000950129-97-002539.hdr.sgml : 19970625 ACCESSION NUMBER: 0000950129-97-002539 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: 97628888 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 (HOURLY BARGAINING UNIT) 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 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 (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, 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 HOURLY BARGAINING UNIT EMPLOYEES SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, ----------------------------- 1996 1995 ---------- ---------- Assets: Investments, at fair value - Mutual fund assets: Fidelity Puritan Fund $1,268,634 $ 835,000 Fidelity Magellan Fund 2,326,232 1,843,510 Fidelity Contrafund 399,810 127,661 Fidelity Growth and Income Fund 624,189 328,455 Fidelity Overseas Fund 562,072 369,562 Fidelity Balanced Fund 143,087 74,250 Templeton Foreign Fund 41,980 -- Fidelity Government Money Market Fund 2,450,167 2,119,423 Quanex Corporation common stock 291,588 187,886 Common/commingled trust 147,525 95,257 ---------- ---------- Total 8,255,284 5,981,004 ---------- ---------- Employee contributions receivable 162,502 136,120 Employer contributions receivable 12,396 10,191 ---------- ---------- Total 174,898 146,311 ---------- ---------- Net assets available for benefits $8,430,182 $6,127,315 ========== ==========
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, ----------------------------- 1996 1995 ---------- ---------- Investment income: Interest and dividends $ 672,045 $ 298,232 Net appreciation in fair value of investments 143,494 467,045 ---------- ---------- Total 815,539 765,277 ---------- ---------- Contributions: Employee 1,786,138 1,637,214 Employer 105,510 98,350 ---------- ---------- Total 1,891,648 1,735,564 ---------- ---------- Total additions 2,707,187 2,500,841 Benefit payments 404,320 189,234 ---------- ---------- Increase in net assets available for benefits 2,302,867 2,311,607 Net assets available for benefits: Beginning of year 6,127,315 3,815,708 ---------- ---------- End of year $8,430,182 $6,127,315 ========== ==========
See notes to financial statements. 5 QUANEX CORPORATION HOURLY BARGAINING UNIT EMPLOYEES SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1996 AND 1995 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. (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 the following investment funds managed by the Trustee: 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. Puritan Fund - invested and reinvested in common and preferred stocks and bonds. 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 with insurance companies, banks and other financial institutions. 6 (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 service graduating to 100% for five or more years. Upon death, retirement or total and 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. As of December 31, 1996 and 1995, net assets available for benefits included benefits of $5,632 and $16,875, 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 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. 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 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. 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 (the "IRS"). The Plan has received a favorable letter of tax determination dated October 24, 1996. 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. 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 3,306 $75,789 4,243 $92,529 Sales 2,351 50,315 $54,568 347 7,997 $7,457
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 711,273 $2,842,364 879,682 $2,278,180 Sales 320,094 754,693 $785,068 270,825 456,173 $484,054
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 87,559 $87,559 82,554 $82,554 Sales 35,292 35,292 $35,292 7,387 82,554 $82,554
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 were as follows for the years ended December 31:
1996 1995 ---------- ---------- Employee Contributions: Fidelity Puritan Fund $ 258,650 $ 225,346 Fidelity Magellan Fund 453,847 419,024 Fidelity Contrafund 91,666 44,860 Fidelity Growth and Income Fund 146,079 114,399 Fidelity Overseas Fund 148,714 144,420 Fidelity Balanced Fund 59,839 48,443 Fidelity Government Money Market Fund 491,386 508,585 Templeton Foreign Fund 4,812 -- Quanex Corporation common stock 63,562 62,267 Common/commingled trust 67,583 69,870 ---------- ---------- $1,786,138 $1,637,214 ========== ==========
1996 1995 -------- ------- Employer Contributions: Fidelity Puritan Fund $ 15,152 $13,810 Fidelity Magellan Fund 21,803 19,431 Fidelity Contrafund 6,119 4,379 Fidelity Growth and Income Fund 10,918 9,598 Fidelity Overseas Fund 10,289 10,578 Fidelity Balanced Fund 7,296 6,954 Fidelity Government Money Market Fund 18,902 18,045 Templeton Foreign Fund 104 -- Quanex Corporation common stock 6,047 6,177 Common/commingled trust 8,880 9,378 -------- ------- $105,510 $98,350 ======== =======
9
1996 1995 -------- -------- Benefit payments: Fidelity Puritan Fund $ 41,028 $ 26,984 Fidelity Magellan Fund 121,150 51,315 Fidelity Contrafund 5,210 -- Fidelity Growth and Income Fund 14,286 5,381 Fidelity Overseas Fund 9,593 2,595 Fidelity Balanced Fund 7,915 2,498 Fidelity Government Money Market Fund 171,595 94,128 Templeton Foreign Fund -- -- Quanex Corporation common stock 4,863 3,993 Common/commingled trust 28,680 2,340 -------- -------- $404,320 $189,234 ======== ========
1996 1995 -------- --------- Investment income: Fidelity Puritan Fund $149,359 $ 129,241 Fidelity Magellan Fund 243,707 431,859 Fidelity Contrafund 51,197 17,439 Fidelity Growth and Income Fund 86,323 69,343 Fidelity Overseas Fund 58,357 26,530 Fidelity Balanced Fund 11,564 6,251 Fidelity Government Money Market Fund 115,993 105,725 Templeton Foreign Fund 3,593 -- Quanex Corporation common stock 88,680 (24,578) Common/commingled trust 6,766 3,467 -------- --------- $815,539 $ 765,277 ======== =========
10 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, 1996
Shares/ Current Par Value Cost Value --------- ---- ------- Mutual Fund Assets - Fidelity Investments: Government Money Market Fund* 2,450,167 $2,450,167 $2,450,167 Balanced Fund* 10,162 133,855 143,087 Puritan Fund* 73,587 1,193,292 1,268,634 Growth and Income Fund* 20,312 519,062 624,189 Magellan* 28,844 2,140,420 2,326,232 Contrafund* 9,485 364,846 399,810 Overseas Fund* 18,225 515,693 562,072 Templeton Foreign Fund* 4,052 39,972 41,980 ----------------------------- Total Mutual Fund Assets 7,357,307 7,816,171 Quanex Corporation Common Stock* 10,656 233,902 291,588 Common/Commingled Trust* 147,525 147,525 147,525 ----------------------------- Total investments $7,738,734 $8,255,284 ========== ==========
*Party-in-Interest 11 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, 1996 Single 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 45 $474,444 17 $ 55,974 $ 52,419 $ 55,974 $ 3,555 *Magellan Fund 56 851,371 36 296,052 272,627 296,052 23,425 *Contrafund 46 305,355 10 60,227 60,772 60,227 (545) *Government Money Market Fund 61 639,600 48 308,856 308,856 308,856 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 Hourly Bargaining Unit Employees 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. 33-46824 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 Hourly Bargaining Unit Employees 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-----