-----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, DaVNatF1RtnFzyuj00B0RebQt5AXNmW6rkoheQgAPBrqOiPpC95opB+6sdRg1HcV WVj95VIa83RbUgPzWaBOwA== 0000950129-98-002734.txt : 19980630 0000950129-98-002734.hdr.sgml : 19980630 ACCESSION NUMBER: 0000950129-98-002734 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980629 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: SEC FILE NUMBER: 001-05725 FILM NUMBER: 98655691 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 PIPER IMPACT 401(K) 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, 1997 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: Piper Impact 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 (713) 961-4600 2 [DELOITTE & TOUCHE LLP LETTERHEAD] INDEPENDENT AUDITORS' REPORT The Benefits Committee Quanex Corporation Houston, Texas Re: Piper Impact 401(k) Savings Plan We have audited the accompanying statements of net assets available for benefits of the Piper Impact 401(k) Savings Plan (the "Plan") as of December 31, 1997 and 1996 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, 1997 and 1996 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, 1997 and (2) 5% reportable transactions for the year ended December 31, 1997 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 1997 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 22, 1998 3 QUANEX CORPORATION PIPER IMPACT 401(k) SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, ----------------------- 1997 1996 ---------- ---------- Assets: Investments, at fair value: Mutual fund assets: Fidelity Puritan Fund $ 393,816 $ 218,869 Fidelity Contrafund 522,991 234,672 Fidelity Intermediate Bond Fund 171,180 110,374 Fidelity Retirement Growth Fund 254,730 132,456 Fidelity Blue Chip Fund 1,399,981 707,914 Fidelity Asset Manager Fund 216,111 120,481 Fidelity Retirement Money Market Fund 273,551 154,004 Quanex Corporation Common Stock 42,176 -- Fidelity Common/Commingled Trust 150,845 83,199 ---------- ---------- 3,425,381 1,761,969 Participant loans 146,425 44,691 ---------- ---------- Total 3,571,806 1,806,660 ---------- ---------- Employee contributions receivable 176,609 144,214 Employer contributions receivable 27,343 24,290 ---------- ---------- Total 203,952 168,504 ---------- ---------- Net Assets Available for Benefits $3,775,758 $1,975,164 ========== ==========
See notes to financial statements. 4 QUANEX CORPORATION PIPER IMPACT 401(k) SAVINGS PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended December 31, ----------------------- 1997 1996 ---------- ---------- Investment income: Interest and dividends $ 231,919 $ 114,195 Net appreciation in fair value of investments 252,778 40,251 ---------- ---------- Total income 484,697 154,446 ---------- ---------- Contributions: Employer 240,468 198,604 Less forfeitures 9,434 2,887 ---------- ---------- 231,034 195,717 Employee 1,247,453 1,007,030 ---------- ---------- Total contributions 1,478,487 1,202,747 ---------- ---------- Interest on participant loans 6,290 555 ---------- ---------- Total additions 1,969,474 1,357,748 ---------- ---------- Benefit payments 163,966 30,777 Administrative fees 4,914 1,856 ---------- ---------- Total deductions 168,880 32,633 ---------- ---------- Increase in net assets available for benefits 1,800,594 1,325,115 Net assets available for benefits: Beginning of year 1,975,164 650,049 ---------- ---------- End of year $3,775,758 $1,975,164 ========== ==========
See notes to financial statements. 5 QUANEX CORPORATION PIPER IMPACT 401(k) SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1997 AND 1996 A. DESCRIPTION OF THE PLAN The following description of the Piper Impact 401(k) Plan (the "Plan") is provided for general informational purposes only. Participants should refer to the Plan document for a more complete description of the Plan's provisions. (1) General. The Plan is a defined contribution plan which covers substantially all full-time employees of Piper Impact, Inc. (the "Company"), a subsidiary of Quanex Corporation. The Plan permits eligible employees to elect a deferral of compensation under Section 401(k) of the Internal Revenue Code ("Code"). 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"). The Benefits Committee (the "Committee"), appointed by Quanex Corporation'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 document. The Company contributes 25% of the first 6% of base compensation that a participant contributes to the Plan. Contributions are subject to certain limitations. Additional amounts may be contributed at the option of the Company's Board of Directors. (3) Participant Accounts. Each participant's account is credited with the participant's contribution and allocations of the Company's contribution and Plan earnings, and charged with an allocation of administrative expenses. Allocations are based on participant earnings or account balances, as defined. Forfeited balances of terminated participants' non-vested accounts are used to reduce current or future Company contributions. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. (4) Investment Options. Participants may direct allocations of their contributions to the following funds: Puritan Fund - invested and reinvested in domestic and foreign common stocks, preferred stocks and bonds, and debt securities. Contrafund - invested and reinvested in equities of foreign and preferred stock. Intermediate Bond Fund - invested primarily in fixed-income obligations including corporate bonds, mortgage securities, bank obligations and U.S. government and agency securities. Retirement Growth Fund - invested and reinvested in common stocks and other types of securities. Blue Chip Fund - invested and reinvested primarily in common stocks of established domestic and foreign companies. 6 Asset Manager Fund - invested and reinvested in domestic and foreign stocks, bonds, and short-term and money market instruments. Retirement Money Market Fund - invested in short-term money market securities of U.S. and foreign issuers. 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 contributions and earnings thereon. Vesting in the Company's matching and discretionary contribution portion of their accounts plus actual earnings thereon is based on years of continuous service. A participant is 20% vested for each year of credited service beginning with his or her second year and is 100% vested after six years of credited service. (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 Code, 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, 1997 and 1996, net assets available for benefits included benefits of $9,913 and $2,890, respectively, due to participants who had withdrawn from participation in the Plan. (7) Loans. Loans may be granted to a participant of the Plan at the Committee's discretion. Loan terms range up to five years or ten years if used for the purchase of a primary residence. The loans bear a reasonable rate of interest established by the Committee. Interest on the loan is allocated to the borrower's participant account. Loan set up fees and carrying fees are paid by the participant to Fidelity. 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 by 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 these estimates. (4) Administrative Expense. The Company pays all administrative expenses. (5) Payments of Benefits. Benefit payments are recorded when paid. 7 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 of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts. 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 Code and, as a result, is exempt from taxation under Section 501(a) of the Code. 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. E. RELATED PARTY TRANSACTIONS During the years ended December 31, 1997 and 1996, the Plan purchased and sold shares of Fidelity mutual fund assets, as shown below:
1997 1996 ---- ---- Shares Cost Sales Price Shares Cost Sales Price ----------- ----------- ----------- ----------- ----------- ----------- Purchases 250,854 $ 1,705,534 164,862 $ 1,194,042 Sales 86,413 373,734 $ 408,988 15,545 106,236 $ 107,440
During the years ended December 31, 1997 and 1996, the Plan purchased and sold shares of Fidelity Common/Commingled Trust, as shown below:
1997 1996 ---- ---- Shares Cost Sales Price Shares Cost Sales Price ----------- ----------- ----------- ----------- ----------- ----------- Purchases 105,387 $ 105,387 66,192 $ 66,192 Sales 37,741 37,741 $ 37,741 13,217 13,217 $ 13,217
During the years ended December 31, 1997 and 1996, the Plan purchased and sold shares of Quanex Corporation common stock as shown below:
1997 1996 ---- ---- Shares Cost Sales Price Shares Cost Sales Price ----------- ----------- ----------- ----------- ----------- ----------- Purchases 1,555 $ 48,030 -- -- -- Sales 55 1,682 $ 1,588 -- -- --
8 F. SUPPLEMENTAL FUND INFORMATION Contributions, benefit payments and investment income by fund were as follows for the years ended December 31:
1997 1996 ----------- ----------- Employee Contributions: Fidelity Puritan Fund $ 139,215 $ 118,686 Fidelity Contrafund 204,631 142,176 Fidelity Intermediate Bond Fund 67,476 64,591 Fidelity Retirement Growth Fund 95,104 85,983 Fidelity Blue Chip Fund 444,602 388,617 Fidelity Asset Manager Fund 76,557 68,409 Fidelity Retirement Money Market Fund 121,081 88,743 Quanex Corporation Common Stock 35,632 -- Fidelity Common/Commingled Trust 63,155 49,825 ----------- ----------- $ 1,247,453 $ 1,007,030 =========== ===========
1997 1996 ----------- ----------- Employer Contributions: Fidelity Puritan Fund $ 26,783 $ 23,821 Fidelity Contrafund 37,704 26,865 Fidelity Intermediate Bond Fund 13,701 12,487 Fidelity Retirement Growth Fund 18,608 15,386 Fidelity Blue Chip Fund 87,097 76,268 Fidelity Asset Manager Fund 14,557 12,750 Fidelity Retirement Money Market Fund 14,576 18,380 Quanex Corporation Common Stock 5,045 -- Fidelity Common/Commingled Trust 12,963 9,760 ----------- ----------- $ 231,034 $ 195,717 =========== ===========
1997 1996 ----------- ----------- Benefit Payments: Fidelity Puritan Fund $ 17,800 $ 2,425 Fidelity Contrafund 15,905 6,166 Fidelity Intermediate Bond Fund 8,822 1,173 Fidelity Retirement Growth Fund 9,986 3,791 Fidelity Blue Chip Fund 55,029 15,749 Fidelity Asset Manager Fund 8,957 795 Fidelity Retirement Money Market Fund 32,630 79 Quanex Corporation Common Stock 1,419 -- Fidelity Common/Commingled Trust 13,418 599 ----------- ----------- $ 163,966 $ 30,777 =========== ===========
9
1997 1996 ----------- ----------- Investment Income: Fidelity Puritan Fund $ 62,162 $ 21,079 Fidelity Contrafund 80,320 29,620 Fidelity Intermediate Bond Fund 10,824 3,657 Fidelity Retirement Growth Fund 32,386 6,660 Fidelity Blue Chip Fund 250,281 74,190 Fidelity Asset Manager Fund 34,017 10,693 Fidelity Retirement Money Market Fund 11,626 5,173 Quanex Corporation Common Stock (3,830) -- Fidelity Common/Commingled Trust 6,911 3,374 ----------- ----------- $ 484,697 $ 154,446 =========== ===========
10 ITEM 27-a SCHEDULE OF ASSETS HELD FOR INVESTMENTS PURPOSES EIN: 76-0396886; PN 001 QUANEX CORPORATION PIPER IMPACT 401(k) SAVINGS PLAN SUPPLEMENTAL SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 1997
Shares/ Current Par Value Cost Value ---------- ---------- ---------- Mutual Fund Assets - Fidelity Investments: Puritan Fund* 20,321 $ 363,226 $ 393,816 Contrafund* 11,216 480,823 522,991 Intermediate Bond Fund* 16,832 170,105 171,180 Retirement Growth Fund* 15,118 278,500 254,730 Blue Chip Fund* 35,478 1,206,445 1,399,981 Asset Manager Fund* 11,777 199,782 216,111 Retirement Money Market Fund* 273,551 273,551 273,551 ----------------------- Total Mutual Fund Assets 2,972,432 3,232,360 Quanex Corporation Common Stock* 1,500 46,348 42,176 Fidelity Common/Commingled Trust* 150,845 150,845 150,845 Participant loans (bearing interest rates from 7.85% to 11%) 146,425 146,425 ----------------------- Total Investments $3,316,050 $3,571,806 =======================
* Party-in-Interest 11 ITEM 27-d - SCHEDULE OF REPORTABLE (5%) TRANSACTIONS EIN 76-0396886; PN 001 QUANEX CORPORATION PIPER IMPACT 401(k) SAVINGS PLAN SUPPLEMENTAL SCHEDULE OF 5% REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1997 Series of Transactions
Current Total Number of Total Number of Value on Net Purchases During Purchase Sales During the Selling Cost of Transaction Gain Description the Plan Year Price Plan Year Price Asset Date (Loss) ----------- ---------------- -------- ---------------- -------- -------- ----------- -------- Fidelity Investments: Puritan* 61 $197,986 44 $ 55,645 $ 50,913 $ 55,645 $ 4,732 Contrafund* 49 298,784 29 42,988 37,418 42,988 5,570 Intermediate Bond* 61 94,162 37 35,017 35,155 35,017 (138) Retirement Growth* 51 166,433 31 32,549 30,320 32,549 2,229 Blue Chip* 85 646,301 59 140,189 120,125 140,189 20,064 Asset Manager* 49 110,252 34 30,530 27,733 30,530 2,797 Retirement Money Mkt* 61 191,616 41 72,070 72,070 72,070 0 Common/Commingled 54 105,387 38 37,741 37,741 37,741 0 Trust*
* 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. Piper Impact 401 (k) Savings Plan Date: June 29, 1998 /s/ Wayne M. Rose ---------------------------------------- Wayne M. Rose, Benefits Committee 13 INDEX TO EXHIBITS 23.1 Independents Auditor's Consent
EX-23.1 2 CONSENT OF INDEPENDENT AUDITORS 1 EXHIBIT 23.1 INDEPENDENT AUDITOR'S CONSENT We consent to the incorporation by reference in Registration Statement No. 333-22977 of Quanex Corporation on Form S-8 of our report dated May 22, 1998 appearing in the Annual Report of Form 11-K of the Piper Impact 401 (k) Savings Plan for the year ended December 31, 1997. /s/ DELOITTE & TOUCHE LLP - ----------------------------------- DELOITTE & TOUCHE LLP Houston, Texas June 29, 1998 -----END PRIVACY-ENHANCED MESSAGE-----