-----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, J0kK9WzBJxFLsvhvlT9bI2DLveLYHDHH6ZYi4MYGhzfeezCl++i70DNSoyA+dzuA m73CwzCOd7iCMis9LkKL3A== 0000950129-97-002541.txt : 19970625 0000950129-97-002541.hdr.sgml : 19970625 ACCESSION NUMBER: 0000950129-97-002541 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: 97628894 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 (NICHOLS HOMESHIELD/DAVENPORT) 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: Nichols-Homeshield 401(k) Savings Plan - Davenport 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: Nichols-Homeshield 401(k) Savings Plan - Davenport We have audited the accompanying statements of net assets available for benefits of the Nichols-Homeshield 401(k) Savings Plan Davenport (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 May 9, 1997 3 QUANEX CORPORATION NICHOLS-HOMESHIELD 401(K) SAVINGS PLAN - DAVENPORT STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, ------------------------- 1996 1995 ----------- ----------- Assets: Investments at fair value - Mutual fund assets: Fidelity Puritan Fund $ 110,980 $ 51,298 Fidelity Magellan Fund 1,760,422 1,434,825 Fidelity Contrafund 1,246,208 711,513 Fidelity Growth and Income Fund 2,559,618 1,755,359 Fidelity Overseas Fund 137,732 88,561 Fidelity Balanced Fund 596,493 614,803 Fidelity Government Money Market Fund 2,734,735 2,820,968 Templeton Foreign Fund 6,157 -- Quanex Corporation common stock 133,135 103,640 Common/commingled trust 54,097 20,374 ----------- ----------- 9,339,577 7,601,341 Participant loans 648,344 490,166 ----------- ----------- Total 9,987,921 8,091,507 ----------- ----------- Employee contributions receivable 58,327 60,444 Employer contributions receivable 64,956 45,130 ----------- ----------- Total 123,283 105,574 ----------- ----------- Net assets available for benefits $10,111,204 $ 8,197,081 =========== ===========
See notes to financial statements 4 QUANEX CORPORATION NICHOLS-HOMESHIELD 401(k)SAVINGS PLAN - DAVENPORT STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
December 31, ------------------------- 1996 1995 ----------- ----------- Investment income: Interest and dividends $ 650,015 $ 397,598 Net appreciation in fair value of investments 383,311 763,389 ----------- ----------- Total 1,033,326 1,160,987 ----------- ----------- Contributions: Employer 650,140 519,252 Less forfeitures 6,058 10,999 ----------- ----------- 644,082 508,253 Employee 656,881 554,454 ----------- ----------- Total 1,300,963 1,062,707 ----------- ----------- Interest on participant loans 43,543 33,277 ----------- ----------- Total additions 2,377,832 2,256,971 ----------- ----------- Benefit payments 460,800 194,297 Administrative fees 2,909 1,884 ----------- ----------- Total deductions 463,709 196,181 ----------- ----------- Increase in net assets available for benefits 1,914,123 2,060,790 Net assets available for benefits: Beginning of year 8,197,081 6,136,291 ----------- ----------- End of year $10,111,204 $ 8,197,081 =========== ===========
See notes to financial statements 5 QUANEX CORPORATION NICHOLS-HOMESHIELD 401(K) SAVINGS PLAN - DAVENPORT NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1996 AND 1995 A. DESCRIPTION OF THE PLAN The following description of the Nichols-Homeshield 401(k) Savings Plan - Davenport (the "Plan") is provided for general information purposes only. Participants should refer to the Plan document for more complete information. (1) General. The Plan, sponsored by Quanex Corporation (the "Company"), was established on October 1, 1987 and was amended and restated in its entirety in January 1993. The Plan is a defined contribution plan, which covers substantially all union hourly employees of the Davenport, Iowa facilities. The Plan permits eligible employees to elect a deferral of compensation under Section 401(k) of the Internal Revenue Code ("IRC"). 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. Participants may contribute to the Plan by electing salary deferrals between 1% and 15% of compensation as defined by the Plan agreement. Participants may also contribute in half percentages. Company contributions are made based on a percentage of the employee's compensation for each individual with at least 1,000 hours of employment service. (3) Participant Accounts. Each participant's account is credited with the participant's contribution, the employer's contribution, and the participant's pro rata share of investment earnings. Investment earnings 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 allocations of their contributions to the following funds: 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 issued by insurance companies, banks and other financial institutions. 6 (5) Vesting. Participants are immediately vested in their 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. In accordance with the IRC, upon termination of service, a 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 $0 and $5,270, respectively, due to participants who have withdrawn from participation in the Plan. (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 for the purchase of 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 using the last recorded sales price. The fair value of the common/commingled trust is at face value. (4) 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. (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 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 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 June 18, 1993. 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 2,080 $47,343 6,171 $130,522 Sales 2,566 57,083 $68,951 3,416 73,665 $75,227
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 2,530,179 $6,546,751 1,229,689 $2,945,250 Sales 2,579,692 5,143,714 $5,203,939 828,604 1,761,256 $1,825,834
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 41,203 $41,203 9,350 $9,350 Sales 7,481 7,481 $7,481 - - -
8 F. 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 $ 16,657 $ 8,238 Fidelity Magellan Fund 118,572 88,077 Fidelity Contrafund 106,112 44,752 Fidelity Growth and Income Fund 145,427 127,054 Fidelity Overseas Fund 14,133 20,838 Fidelity Balanced Fund 55,282 61,072 Fidelity Government Money Market Fund 159,436 182,325 Templeton Foreign Fund 321 -- Quanex Corporation common stock 15,366 14,350 Common/commingled trust 25,575 7,748 -------- -------- $656,881 $554,454 ======== ========
1996 1995 -------- -------- Employer Contributions: Fidelity Puritan Fund $ 11,933 $ 3,814 Fidelity Magellan Fund 101,857 85,071 Fidelity Contrafund 70,259 52,740 Fidelity Growth and Income Fund 157,327 111,238 Fidelity Overseas Fund 13,193 11,723 Fidelity Balanced Fund 54,252 57,963 Fidelity Government Money Market Fund 212,614 179,518 Templeton Foreign Fund 144 -- Quanex Corporation common stock 11,896 5,457 Common/commingled trust 10,607 729 -------- -------- $644,082 $508,253 ======== ========
9
1996 1995 ----------- ----------- Benefit payments: Fidelity Puritan Fund $ 130 $ -- Fidelity Magellan Fund 39,625 28,971 Fidelity Contrafund 3,339 16,482 Fidelity Growth and Income Fund 115,206 9,760 Fidelity Overseas Fund 150 13,092 Fidelity Balanced Fund 1,525 7,498 Fidelity Government Money Market Fund 297,894 118,494 Templeton Foreign Fund -- -- Quanex Corporation common stock 2,931 -- Common/commingled trust -- -- ----------- ----------- $ 460,800 $ 194,297 =========== ===========
1996 1995 ----------- ----------- Investment income: Fidelity Puritan Fund $ 11,416 $ 6,041 Fidelity Magellan Fund 162,646 321,280 Fidelity Contrafund 193,172 161,934 Fidelity Growth and Income Fund 403,556 441,618 Fidelity Overseas Fund 12,496 12,960 Fidelity Balanced Fund 51,461 72,510 Fidelity Government Money Market Fund 141,568 152,296 Templeton Foreign Fund 280 -- Quanex Corporation common stock 54,625 (8,540) Common/commingled trust 2,106 888 ----------- ----------- $ 1,033,326 $ 1,160,987 =========== ===========
10 ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES EIN: 38-1872178; PN 016 QUANEX CORPORATION NICHOLS-HOMESHIELD 401(K) SAVINGS PLAN - DAVENPORT SUPPLEMENTAL SCHEDULE OF INVESTMENTS DECEMBER 31, 1996
Shares/ Current Mutual Fund Assets - Fidelity Investments: Par Value Cost Value - ------------------------------------------ ----------- ---------- ---------- Contrafund* 29,566 $1,052,147 $1,246,208 Government Money Market Fund* 2,734,735 2,734,735 2,734,735 Puritan Fund* 6,437 107,699 110,980 Growth and Income Fund* 83,294 2,003,906 2,559,618 Magellan* 21,828 1,622,495 1,760,422 Overseas Fund* 4,466 131,576 137,732 Balanced Fund* 42,365 557,656 596,493 Templeton Fund* 594 6,040 6,157 ---------- ---------- Total mutual fund assets 8,216,254 9,152,345 Quanex Corporation Common Stock* 4,863 106,100 133,135 Common Commingled Trust* 54,097 54,097 54,097 Participant Loans (bearing interest rates from 7.85% to 11%) 648,344 648,344 ========== ========== Total investments $9,024,795 $9,987,921 ========== ==========
* Party-in-interest 11 ITEM 27d - SCHEDULE OF REPORTABLE (5%) TRANSACTIONS EIN 38-1872178; PN 016 NICHOLS-HOMESHIELD 401(k) SAVINGS PLAN - DAVENPORT SUPPLEMENTAL SCHEDULE OF 5% REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1996
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) - ----------- ----------- ------- ----------- ------- ------- ------ ------ 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) - ----------- ----------- ------- ----------- ------- ------- ------ ------ *Magellan Fund 97 $2,399,699 63 $1,993,180 $1,998,379 $1,993,180 $ (5,199) *Contrafund 53 524,361 25 91,320 83,227 91,320 8,093 *Growth & Income 83 828,680 44 303,724 259,051 303,724 44,673 *Balanced Fund 51 187,239 30 231,049 222,172 231,049 8,877 *Government Money Market Fund 82 2,435,802 77 2,522,035 2,522,035 2,522,035 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. Nichols-Homeshield 401(k) Savings Plan - Davenport 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. 33-54085 of Quanex Corporation on Form S-8 of our report dated May 9, 1997 appearing in the Annual Report on Form 11-K of the Nichols-Homeshield, Inc. 401(k) Savings Plan - Davenport for the year ended December 31, 1996. /s/ DELOITTE & TOUCHE LLP DELOITTE & TOUCHE LLP Houston, Texas June 24, 1997 -----END PRIVACY-ENHANCED MESSAGE-----