-----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, UP4CtAJQxWm/Gq6xvK3r0elezsT6qVvH57Il2ek66qUD9Ue9xK1O1lJdW9WxYTlp 6y/76gMV0R+PcTTj5vOoAw== 0000912057-97-022271.txt : 19970630 0000912057-97-022271.hdr.sgml : 19970630 ACCESSION NUMBER: 0000912057-97-022271 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970627 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FLOW INTERNATIONAL CORP CENTRAL INDEX KEY: 0000713002 STANDARD INDUSTRIAL CLASSIFICATION: GENERAL INDUSTRIAL MACHINERY & EQUIPMENT, NEC [3569] IRS NUMBER: 911104842 STATE OF INCORPORATION: DE FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-12448 FILM NUMBER: 97631891 BUSINESS ADDRESS: STREET 1: 23500 64TH AVE S STREET 2: P O BOX 97040 CITY: KENT STATE: WA ZIP: 98032 BUSINESS PHONE: 2068503500 MAIL ADDRESS: STREET 1: 23500 64TH AVENUE SOUTH CITY: KENT STATE: WA ZIP: 98032 FORMER COMPANY: FORMER CONFORMED NAME: FLOW SYSTEMS INC DATE OF NAME CHANGE: 19890320 11-K 1 FORM 11-K SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 11-K (X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [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 2-81315 Flow International Corporation Voluntary Pension and Salary Deferral Plan Flow International Corporation 23500 64th Ave. S. Kent, WA 98032 (206) 850-3500 FLOW INTERNATIONAL CORPORATION VOLUNTARY PENSION AND SALARY DEFERRAL PLAN FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES DECEMBER 31, 1996 FLOW INTERNATIONAL CORPORATION VOLUNTARY PENSION AND SALARY DEFERRAL PLAN FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES DECEMBER 31, 1996 INDEX PAGE Report of Independent Accountants 1 Statement of Net Assets Available for Plan Benefits 2 Statement of Changes in Net Assets Available for Plan Benefits 3 Notes to Financial Statements 4-8 SUPPLEMENTAL SCHEDULES (1) Schedule of Assets Held for Investment Purposes 9-10 Schedule of Reportable Transactions 11 (1) Other schedules required by Section 2520.103-10 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under ERISA have been omitted because such schedules are not applicable. REPORT OF INDEPENDENT ACCOUNTANTS June 27, 1997 To the Participants and Administrative Committee of the Flow International Corporation Voluntary Pension and Salary Deferral Plan In our opinion, the accompanying statement of net assets available for plan benefits and the related statement of changes in net assets available for plan benefits present fairly, in all material respects, the net assets available for plan benefits of the Flow International Corporation Voluntary Pension and Salary Deferral Plan at December 31, 1996 and 1995, and the changes in its net assets available for plan benefits for the year ended December 31, 1996, in conformity with generally accepted accounting principles. 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 of these statements in accordance with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The additional information listed in the accompanying supplemental schedules is presented for purposes of additional analysis and is not a required part of the basic financial statements but is additional information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. 1 FLOW INTERNATIONAL CORPORATION VOLUNTARY PENSION AND SALARY DEFERRAL PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS - --------------------------------------------------------------------------------
DECEMBER 31, 1996 1995 ASSETS Investments, at market Large Company Fund $ 4,114,970 $ 3,813,819 Small Company Fund 4,155,005 3,439,411 International Fund 3,292,159 2,703,048 Money Market Fund 1,397,208 1,699,764 Bond Fund 1,285,085 1,240,808 Vanguard 500 Fund 1,147,954 Vanguard Small Cap Fund 581,036 Portico Bond Fund 142,032 FLOW Fund 741,883 799,131 Participant loans 43,377 122,024 Contributions receivable 160,936 162,956 Loan payments receivable 3,377 5,340 Interest and dividends receivable 11,073 35,690 --------------- --------------- 17,076,095 14,021,991 Liabilities Due to broker for securities purchased, net 20,028 Accrued liabilities 6,824 13,918 --------------- --------------- Net assets available for plan benefits $ 17,069,271 $ 13,988,045 --------------- --------------- --------------- ---------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 2 FLOW INTERNATIONAL CORPORATION VOLUNTARY PENSION AND SALARY DEFERRAL PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS - -------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 1996 Additions to net assets attributed to Investment income Net appreciation in fair value of investments $ 2,122,757 Interest 199,164 Dividends 161,603 ------------- 2,483,524 Employer contributions 705,678 Employee contributions 1,421,273 ------------- Total additions 4,610,475 ------------- Deductions from net assets attributed to Benefits paid to participants 1,338,224 Administrative expenses 191,025 ------------- Total deductions 1,529,249 ------------- Net increase 3,081,226 Net assets available for plan benefits Beginning of year 13,988,045 ------------- End of year $ 17,069,271 ------------- ------------- THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 3 FLOW INTERNATIONAL CORPORATION VOLUNTARY PENSION AND SALARY DEFERRAL PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 - -------------------------------------------------------------------------------- 1. DESCRIPTION OF THE PLAN The Flow International Corporation Voluntary Pension and Salary Deferral Plan (the Plan) is a defined contribution plan for the benefit of nonbargaining employees of Flow International Corporation (the Company), effective October 1, 1986. The Plan is administered by the Advisory Committee appointed by the Board of Directors of the Company. Qualified employees may elect to contribute any amount between 1% and 15% of their salary. The Company shall contribute an amount equal to 50% of the first 6% of employee compensation contributed for employees with less than five years of service with the Company or 75% of the first 6% of employee compensation contributed for employees with five years or more of service. Contributions to the Plan are paid to a trust administered by the plan trustees under the terms of a trust agreement. The funds must be used for the exclusive benefit of plan participants and their beneficiaries. Employees are eligible for participation in the Plan upon the first quarterly open enrollment period after commencement of employment and are eligible for the employer match one year following that date. Employer contributions and earnings thereon vest with individual participants based upon years of service with the Company; participants achieve 100% vesting after five years of service or at a normal retirement age. Unvested employer contributions relating to terminated participants are forfeited and used to reduce the Company's future contributions to the Plan. Participants are immediately vested in their voluntary contributions plus actual earnings thereon. Vested benefits are payable upon the retirement, death, disability or request at termination of a participant's employment with the Company. 2. SIGNIFICANT ACCOUNTING POLICIES VALUATION OF INVESTMENTS The accompanying financial statements have been prepared using the accrual basis of accounting. Deposit administration contracts (Note 4) are stated at contract value which approximates market value. Contract values represent contributions made under the contracts, plus interest on the contracts, less funds used to purchase annuities and pay related administrative expenses. Other investments are stated at the quoted market value. RECOGNITION OF INCOME AND EXPENSES Administrative expenses, including trustee and investment manager fees, are charged to the Plan and are reflected in these financial statements. These expenses totaled $191,025 for the year ended December 31, 1996. Investment transactions are recorded on the date of the purchase or sale. Gains or losses are determined based on the fair market value of investments on the date of a transaction. 4 ROLLOVERS The Plan allows transfers in from other qualified retirement plans. Rollovers or plan-to-plan transfers are included in contributions. PARTICIPANT LOANS Effective September 30, 1992, the Company acquired all the stock in Spider Staging Corporation (Spider) which maintained the Spider Staging Corporation 401(k) Savings Plan (the Spider Plan) for its employees. An amendment allowed the Company and Spider to merge the Spider Plan into the Plan effective January 1, 1993. The Spider Plan provided loans to participants, which were considered a participant directed investment of their account. The loans represent a trust investment, but only the borrowing participants' accounts shall share in the interest paid on the loans or bear any expense or risk of loss because of the loans. Participant loans are secured by the vested portion of each borrower's account. The rate charged on the loan is the prime rate as of the date of the loan's approval. The Plan does not provide for any new loans to participants. Repayments totaled $50,386 for the year ended December 31, 1996. 3. INVESTMENTS All plan investments are held in trust by Bank of New York (the Trustee). Plan participants may direct their salary deferral and employer matching contributions to one or a combination of nine investment selections, known as the Large Company Fund, the Small Company Fund, the International Fund, the Money Market Fund, the Bond Fund, the Vanguard 500 Fund, the Vanguard Small Cap Fund, the Portico Bond Fund and the FLOW Fund. The Large Company Fund consists of two investment groups, Kunath, Karren, Rinne & Atkin and Sirach Capital Management. Each of these investment groups invest in large companies that exhibit the potential for a high rate of earnings growth. The Small Company Fund consists of three investment groups, Crestone Capital Management, ICM Asset Management, and McKinley Capital Management. Each of these investment groups invest in stock of small to medium size companies that exhibit the potential for a high rate of earnings growth. The International Fund consists of the Euro-Pacific Growth Mutual Fund and the American Small Cap World Mutual Fund. Each of these funds invest in securities of companies located outside the United States. These funds are managed by American Funds. The Money Market Fund consists of investments in high-quality corporate and U.S. Government securities that have maturities of less than one year which are held in the Bank of New York Collective Short Term Investment Fund. The Bond Fund invests in U.S. Government and Agency securities, corporate bonds issued by high-quality companies and deposit administration contracts with insurance companies. The Vanguard 500 Fund invests in securities included in the S&P 500 Index. The Vanguard Small Cap Fund consists of stock of small to medium size companies included in the Russell 2000 Index. The Portico Bond Fund consists primarily of fixed income securities with an average portfolio maturity of greater than five years. The FLOW Fund consists of FLOW International Corporation common stock which is publicly traded in the NASDAQ National Market. The investment in FLOW stock is managed directly by the Trustee. Participants may transfer balances between funds as well as change the investment allocation up to four times per year, but not more frequently than every 90 days. Changes in net assets available for plan benefits by investment account from December 31, 1995 to December 31, 1996 are shown on the following pages. 5 Changes in net assets available for plan benefits by investment account for the year ended December 31, 1996:
LARGE SMALL MONEY VANGUARD COMPANY COMPANY INTERNATIONAL MARKET BOND 500 FUND FUND FUND FUND FUND FUND SUBTOTAL Additions to net assets attributed to Investment income Net appreciation (depreciation) in fair value of investments $ 788,498 $ 798,958 $ 452,975 $ (6,971) $ 115,780 $ 2,149,240 Interest 6,045 16,016 11,205 $ 77,364 47,427 728 158,785 Dividends 46,663 18,516 36,444 26,929 19,689 148,241 ----------- ----------- ----------- ----------- ----------- ----------- ------------ 841,206 833,490 500,624 77,364 67,385 136,197 2,456,266 Employer contributions 171,580 174,457 139,281 41,486 46,398 42,118 615,320 Employee contributions 329,850 349,701 278,144 85,653 88,105 94,471 1,225,924 ----------- ----------- ----------- ----------- ----------- ----------- ------------ Total additions 1,342,636 1,357,648 918,049 204,503 201,888 272,786 4,297,510 ----------- ----------- ----------- ----------- ----------- ----------- ------------ Participant transfers, net (685,956) (179,291) (182,763) (181,280) (110,170) 892,552 (446,908) ----------- ----------- ----------- ----------- ----------- ----------- ------------ Loan transactions, net 13,660 10,039 11,222 7,113 4,264 686 46,984 ----------- ----------- ----------- ----------- ----------- ----------- ------------ Deductions from net assets attributed to Benefits paid to participants 332,124 374,595 144,876 331,008 49,859 1,464 1,233,926 Administrative expenses 48,687 95,440 13,212 7,947 6,765 5,474 177,525 ----------- ----------- ----------- ----------- ----------- ----------- ------------ Total deductions 380,811 470,035 158,088 338,955 56,624 6,938 1,411,451 ----------- ----------- ----------- ----------- ----------- ----------- ------------ Net increase (decrease) 289,529 718,361 588,420 (308,619) 39,358 1,159,086 2,486,135 Net assets available for plan benefits Beginning of year 3,861,042 3,478,732 2,735,590 1,722,548 1,255,335 13,053,247 ----------- ----------- ----------- ----------- ----------- ----------- ------------ End of year $ 4,150,571 $ 4,197,093 $ 3,324,010 $ 1,413,929 $ 1,294,693 $ 1,159,086 $ 15,539,382 ----------- ----------- ----------- ----------- ----------- ----------- ------------ ----------- ----------- ----------- ----------- ----------- ----------- ------------
6 Changes in net assets available for plan benefits by investment account for the year ended December 31, 1996 (continued):
VANGUARD PORTICO CARRY-FORWARD SMALL CAP BOND FLOW PARTICIPANT SUBTOTAL FUND FUND FUND LOANS TOTAL Additions to net assets attributed to Investment income Net appreciation (depreciation) in fair value of investments $ 2,149,240 $ 21,873 $ (2,076) $ (46,280) $ 2,122,757 Interest 158,785 34,998 200 689 $ 4,492 199,164 Dividends 148,241 7,189 6,173 161,603 ------------ --------- --------- ---------- -------- ------------- 2,456,266 64,060 4,297 (45,591) 4,492 2,483,524 Employer contributions 615,320 28,769 7,020 54,569 705,678 Employee contributions 1,225,924 66,266 15,215 113,868 1,421,273 ------------ --------- --------- ---------- -------- ------------- Total additions 4,297,510 159,095 26,532 122,846 4,492 4,610,475 ------------ --------- --------- ---------- -------- ------------- Participant transfers, net (446,908) 439,578 118,501 (111,171) - - ------------ --------- --------- ---------- -------- ------------- Loan transactions, net 46,984 107 - 3,295 (50,386) - ------------ --------- --------- ---------- -------- ------------- Deductions from net assets attributed to Benefits paid to participants 1,233,926 994 70,551 32,753 1,338,224 Administrative expenses 177,525 8,150 1,064 4,286 191,025 ------------ --------- --------- ---------- -------- ------------- Total deductions 1,411,451 9,144 1,064 74,837 32,753 1,529,249 ------------ --------- --------- ---------- -------- ------------- Net increase (decrease) 2,486,135 589,636 143,969 (59,867) (78,647) 3,081,226 Net assets available for plan benefits Beginning of year 13,053,247 812,774 122,024 13,988,045 ------------ --------- --------- ---------- -------- ------------- End of year $ 15,539,382 $ 589,636 $ 143,969 $ 752,907 $ 43,377 $ 17,069,271 ------------ --------- --------- ---------- -------- ------------- ------------ --------- --------- ---------- -------- -------------
7 4. DEPOSIT ADMINISTRATION CONTRACTS WITH INSURANCE COMPANIES The Plan has deposit administration contracts with Ameritas Financial Services and Aetna Life Insurance and Annuity Company (the Insurance Companies), which are included in the Bond Fund. As of December 31, 1996 and 1995, the value of the contracts with the Insurance Companies was as follows: DECEMBER 31, 1996 1995 Aetna Life Insurance and Annuity Company $ 594,769 $ 562,776 Ameritas Financial Services 170,532 159,608 ------------ ------------ $ 765,301 $ 722,384 ------------ ------------ ------------ ------------ 5. FEDERAL INCOME TAXES The Plan received an updated favorable determination letter from the Internal Revenue Service dated February 10, 1995 as to the qualified status of the Plan. The Company is of the opinion that the Plan continues to fulfill the requirements of a qualified plan under Section 401(a) of the Internal Revenue Code and that the trust which forms a part of the Plan is not subject to tax. Accordingly, no provision for federal or state income taxes has been provided. 8 SUPPLEMENTAL SCHEDULES FLOW INTERNATIONAL CORPORATION VOLUNTARY PENSION AND SALARY DEFERRAL PLAN ADDITIONAL INFORMATION - SCHEDULE I SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 1996 - --------------------------------------------------------------------------------
DESCRIPTION COST FAIR VALUE Large Company Fund Kunath, Karren, Rinne & Atkin $ 1,845,465 $ 2,174,150 Sirach Capital Management 1,532,332 1,940,612 Cash equivalents 208 208 -------------- -------------- $ 3,378,005 $ 4,114,970 -------------- -------------- -------------- -------------- Small Company Fund Crestone Capital Management $ 1,183,377 $ 1,414,771 ICM Asset Management 1,068,493 1,274,509 McKinley Capital Management 1,005,209 1,143,611 Cash equivalents 322,114 322,114 -------------- -------------- $ 3,579,193 $ 4,155,005 -------------- -------------- -------------- -------------- International Fund Euro-Pacific Growth Mutual Fund $ 2,134,339 $ 2,459,688 American Small Cap World Mutual Fund 747,817 832,400 Cash equivalents 71 71 -------------- -------------- $ 2,882,227 $ 3,292,159 -------------- -------------- -------------- -------------- Money Market Fund Bank of New York Collective Short Term Investment Fund $ 1,397,208 $ 1,397,208 -------------- -------------- -------------- -------------- Bond Fund Aetna Life Insurance Group Annuity $ 594,769 $ 594,769 Ameritas Life Insurance Group Annuity 170,532 170,532 Strong Government Securities Fund 523,019 519,659 Cash equivalents 125 125 -------------- -------------- $ 1,288,445 $ 1,285,085 -------------- -------------- -------------- -------------- Vanguard 500 Fund Vanguard Index Trust 500 Portfolio $ 1,036,113 $ 1,147,860 Cash equivalents 94 94 -------------- -------------- $ 1,036,207 $ 1,147,954 -------------- -------------- -------------- -------------- Vanguard Small Cap Fund Vanguard Index Trust Small Capitalization Portfolio $ 561,889 $ 581,036 -------------- -------------- -------------- --------------
9 FLOW INTERNATIONAL CORPORATION VOLUNTARY PENSION AND SALARY DEFERRAL PLAN ADDITIONAL INFORMATION - SCHEDULE I (CONTINUED) SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 1996 - -------------------------------------------------------------------------------- DESCRIPTION COST FAIR VALUE Portico Bond Fund Portico Funds $ 144,076 $ 142,032 ------------ ------------ ------------ ------------ FLOW Fund FLOW International Common Stock $ 635,767 $ 731,159 Cash equivalents 10,724 10,724 ------------ ------------ $ 646,491 $ 741,883 ------------ ------------ ------------ ------------ Participant loans Due through 10/15/2016 Interest rates 6%-9% $ 43,377 $ 43,377 ----------- ------------ ----------- ------------ 10 FLOW INTERNATIONAL CORPORATION VOLUNTARY PENSION AND SALARY DEFERRAL PLAN ADDITIONAL INFORMATION - SCHEDULE II SCHEDULE OF REPORTABLE TRANSACTIONS YEAR ENDED DECEMBER 31, 1996 - --------------------------------------------------------------------------------
COST OF ASSETS SALES/ SOLD/ GAIN/ PURCHASES MATURITIES MATURED (LOSS) Single transaction in excess of 5% of the current value of plan assets at the beginning of the plan year Money Market Fund $ 2,463,270 $ 2,463,270 $ 2,463,270 Vanguard 500 Fund 763,506 Series of transactions with respect to securities when aggregated, involving in excess of 5% of the current value of plan assets at the beginning of the plan year Large Company Fund 498,876 737,152 426,223 $ 310,929 International Fund 408,383 289,766 210,801 78,965 Money Market Fund 13,822,731 14,750,925 14,750,925 Bond Fund 708,736 182,106 185,724 (3,618) Vanguard 500 Fund 1,042,409 10,214 6,304 3,910
11 Signatures The Flow International Corporation Voluntary Pension and Salary Deferral 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 by the undersigned thereunto duly authorized. The Flow International Corporation Voluntary Pension and Salary Deferral Plan Date: June 27, 1997 By /s/ Steve Reichenbach -------------------------------- Steve Reichenbach Plan Advisor Committee Member Consent of Independent Accountants We hereby consent to the incorporation by reference in the Prospectus constituting part of the Registration Statement on Form S-3 (No. 33-57100) and in the Registration Statements on Form S-8 (No. 33-40397 and No. 33-44776) of Flow International Corporation of our report dated June 27, 1997 appearing on page 3 of this Form 11-K. By /s/ Price Waterhouse LLP ------------------------- Price Waterhouse LLP Seattle, Washington June 27, 1997 -----END PRIVACY-ENHANCED MESSAGE-----