-----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, JkzdunOv7pCvWz/pSaoml0S2a2/e2b4EK9HI1FfBsBgltdXt3G8dmETtQCXkN1U9 P8CLvHMO5IQGiDdsARI7WA== 0001047469-98-025720.txt : 19980630 0001047469-98-025720.hdr.sgml : 19980630 ACCESSION NUMBER: 0001047469-98-025720 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980629 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: SEC FILE NUMBER: 000-12448 FILM NUMBER: 98656185 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, 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 0-12448 Flow International Corporation Voluntary Pension and Salary Deferral Plan Flow International Corporation 23500 64th Ave. S. Kent, WA 98032 (253) 850-3500 FLOW INTERNATIONAL CORPORATION VOLUNTARY PENSION AND SALARY DEFERRAL PLAN FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES DECEMBER 31, 1997 FLOW INTERNATIONAL CORPORATION VOLUNTARY PENSION AND SALARY DEFERRAL PLAN FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES DECEMBER 31, 1997 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 12, 1998 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, 1997 and 1996, and the changes in its net assets available for plan benefits for the year ended December 31, 1997, 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. PRICE WATERHOUSE LLP 1 FLOW INTERNATIONAL CORPORATION VOLUNTARY PENSION AND SALARY DEFERRAL PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS - --------------------------------------------------------------------------------
DECEMBER 31, 1997 1996 ASSETS Investments, at market Large Company Fund $ 4,164,210 $ 4,114,970 Small Company Fund 4,226,110 4,155,005 International Fund 3,201,141 3,292,159 Money Market Fund 1,105,798 1,397,208 Bond Fund 979,337 1,285,085 Vanguard 500 Fund 1,363,320 1,147,954 Vanguard Small Cap Fund 824,259 581,036 Portico Bond Fund 133,297 142,032 FLOW Fund 588,938 741,883 Participant loans 88,518 43,377 Contributions receivable 134,748 160,936 Loan payments receivable 1,971 3,377 Interest and dividends receivable 114,926 11,073 ------------ ------------ 16,926,573 17,076,095 LIABILITIES Accrued liabilities 11,616 6,824 ------------ ------------ Net assets available for plan benefits $ 16,914,957 $ 17,069,271 ------------ ------------ ------------ ------------
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, 1997 Additions to net assets attributed to: Investment income Net appreciation in fair value of investments $ 2,208,799 Interest 235,476 Dividends 429,375 ----------- 2,873,650 Employer contributions 760,216 Employee contributions 1,652,878 Participant rollovers from other qualified retirement plans 414,046 ----------- Total additions 5,700,790 ----------- Deductions from net assets attributed to: Benefits paid to participants 1,394,498 Distributions resulting from divestiture (Note 2) 4,240,503 Administrative expenses 220,103 ----------- Total deductions 5,855,104 ----------- Net decrease (154,314) Net assets available for plan benefits: Beginning of year 17,069,271 ----------- End of year $16,914,957 ----------- -----------
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, 1997 - -------------------------------------------------------------------------------- 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. For employees meeting certain employment criteria, 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 $220,103 for the year ended December 31, 1997. 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 FLOW INTERNATIONAL CORPORATION VOLUNTARY PENSION AND SALARY DEFERRAL PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 - -------------------------------------------------------------------------------- ROLLOVERS The Plan allows transfers in from other qualified retirement plans. Rollovers or plan-to-plan transfers are included as a separate line item in the accompanying statement of changes in net assets available for plan benefits. PARTICIPANT LOANS The Plan provides loans to participants, which are 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. Net borrowings totaled $45,141 for the year ended December 31, 1997. TRANSFER OF PLAN ASSETS During 1997 the Company sold certain operating divisions. The Plan assets and obligations related to employees of these divisions were transferred out of the Plan to a successor plan. 3. INVESTMENTS All plan investments are held in trust by Northwestern Trust and Investors Advisory Company (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 Morgan Stanley. 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 Fidelity Institutional Cash Domestic Money Market Class 1 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 5 FLOW INTERNATIONAL CORPORATION VOLUNTARY PENSION AND SALARY DEFERRAL PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 - ------------------------------------------------------------------------------- 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 for the year ended December 31, 1997:
LARGE SMALL COMPANY COMPANY INTERNATIONAL FUND FUND FUND Additions to net assets attributed to: Investment income Net appreciation (depreciation) in fair value of investments $ 896,405 $ 795,958 $ 49,208 Interest 18,490 34,129 54 Dividends 56,016 17,827 291,922 ---------- ----------- ----------- 970,911 847,914 341,184 Employer contributions 179,130 185,467 154,283 Employee contributions 376,986 396,503 328,026 Participant rollovers from other qualified retirement plans 88,130 115,956 69,023 ---------- ----------- ----------- Total additions 1,615,157 1,545,840 892,516 ---------- ----------- ----------- Participant transfers, net 25,814 (56,016) (93,365) ---------- ----------- ----------- Loan transactions, net 152 (19,494) (13,912) ---------- ----------- ----------- Deductions from net assets attributed to: Benefits paid to participants 403,432 282,117 217,068 Distributions resulting from divestiture 1,121,918 1,011,636 646,463 Administrative expenses 54,601 118,133 16,356 ---------- ----------- ----------- Total deductions 1,579,951 1,411,886 879,887 ---------- ----------- ----------- Net increase (decrease) 61,172 58,444 (94,648) Net assets available for plan benefits: Beginning of year 4,150,571 4,197,093 3,324,010 ---------- ----------- ----------- End of year $4,211,743 $ 4,255,537 $ 3,229,362 ---------- ----------- ----------- ---------- ----------- ----------- MONEY VANGUARD MARKET BOND 500 FUND FUND FUND SUBTOTAL Investment income Net appreciation (depreciation) in fair value of investments $ 9,502 $ 353,155 $ 2,104,228 Interest $ 81,620 48,783 10,060 193,136 Dividends 20,934 22,590 409,289 ----------- ----------- ----------- ----------- 81,620 79,219 385,805 2,706,653 Employer contributions 46,140 41,978 58,707 665,705 Employee contributions 98,260 85,577 144,312 1,429,664 Participant rollovers from other qualified retirement plans 45,322 44,028 36,863 399,322 ----------- ----------- ----------- ----------- Total additions 271,342 250,802 625,687 5,201,344 ----------- ----------- ----------- ----------- Participant transfers, net 68,454 (155,085) (18,968) (229,166) ----------- ----------- ----------- ----------- Loan transactions, net (4,292) (4,808) (1,144) (43,498) ----------- ----------- ----------- ----------- Deductions from net assets attributed to: Benefits paid to participants 246,734 18,234 48,257 1,215,842 Distributions resulting from divestiture 379,030 356,940 281,597 3,797,584 Administrative expenses 5,280 6,041 8,897 209,308 ----------- ----------- ----------- ----------- Total deductions 631,044 381,215 338,751 5,222,734 ----------- ----------- ----------- ----------- Net increase (decrease) (295,540) (290,306) 266,824 (294,054) Net assets available for plan benefits: Beginning of year 1,413,929 1,294,693 1,159,086 15,539,382 ----------- ----------- ----------- ----------- End of year $ 1,118,389 $ 1,004,387 $ 1,425,910 $ 15,245,328 ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
6 FLOW INTERNATIONAL CORPORATION VOLUNTARY PENSION AND SALARY DEFERRAL PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 - -------------------------------------------------------------------------------- Changes in net assets available for plan benefits by investment account for the year ended December 31, 1997 (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 $ 2,104,228 $ 87,967 $ (20,103) $ 36,707 $ 2,208,799 Interest 193,136 36,553 779 224 $ 4,784 235,476 Dividends 409,289 12,534 7,552 429,375 ------------ --------- --------- --------- ---------- ---------- 2,706,653 137,054 (11,772) 36,931 4,784 2,873,650 Employer contributions 665,705 38,317 7,962 48,232 760,216 Employee contributions 1,429,664 96,469 18,375 108,370 1,652,878 Participant rollovers from other qualified retirement plans 399,322 5,812 8,912 414,046 ------------ --------- --------- --------- ---------- ---------- Total additions 5,201,344 277,652 14,565 202,445 4,784 5,700,790 ------------ --------- --------- --------- ---------- ---------- Participant transfers, net (229,166) 228,123 14,791 (13,748) -- -- ------------ --------- --------- --------- ---------- ---------- Loan transactions, net (43,498) (3,595) -- (1,849) 48,942 -- ------------ --------- --------- --------- ---------- ---------- Deductions from net assets attributed to: Benefits paid to participants 1,215,842 55,588 31,277 89,894 1,897 1,394,498 Distributions resulting from divestiture 3,797,584 156,795 29,393 250,043 6,688 4,240,503 Administrative expenses 209,308 5,309 1,341 4,145 220,103 ------------ --------- --------- --------- ---------- ---------- Total deductions 5,222,734 217,692 62,011 344,082 8,585 5,855,104 ------------ --------- --------- --------- ---------- ---------- Net (decrease) increase (294,054) 284,488 (32,655) (157,234) 45,141 (154,314) Net assets available for plan benefits: Beginning of year 15,539,382 589,636 143,969 752,907 43,377 17,069,271 ------------ --------- --------- --------- ---------- ---------- End of year $ 15,245,328 $ 874,124 $ 111,314 $ 595,673 $ 88,518 $16,914,957 ------------ --------- --------- --------- ---------- ---------- ------------ --------- --------- --------- ---------- ----------
7 FLOW INTERNATIONAL CORPORATION VOLUNTARY PENSION AND SALARY DEFERRAL PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 - -------------------------------------------------------------------------------- 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, 1997 and 1996, the values of the contracts with the Insurance Companies were as follows:
DECEMBER 31, 1997 1996 Aetna Life Insurance and Annuity Company $ 424,941 $ 594,769 Ameritas Financial Services 122,672 170,532 ------------ ------------ $ 547,613 $ 765,301 ------------ ------------ ------------ ------------
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. 6. BENEFIT OBLIGATIONS The Plan has properly excluded obligations totaling $195,186 and $0 for benefits payable to participants who have withdrawn from the Plan but were not paid at December 31, 1997 and 1996, respectively. This exclusion results in a difference between the Plan's financial statements and the Plan's December 31, 1997 Form 5500. 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, 1997 - --------------------------------------------------------------------------------
DESCRIPTION COST FAIR VALUE Large Company Fund Kunath, Karren, Rinne & Atkin $ 1,841,018 $ 2,058,123 Morgan Stanley 2,168,741 2,081,905 Cash equivalents 24,182 24,182 ----------- ----------- $ 4,033,941 $ 4,164,210 ----------- ----------- ----------- ----------- Small Company Fund Crestone Capital Management $ 1,161,491 $ 1,257,967 ICM Asset Management 1,227,603 1,476,775 McKinley Capital Management 969,477 1,112,105 Cash equivalents 379,263 379,263 ----------- ----------- $ 3,737,834 $ 4,226,110 ----------- ----------- ----------- ----------- International Fund Euro-Pacific Growth Mutual Fund $ 2,020,348 $ 2,398,403 American Small Cap World Mutual Fund 792,738 802,738 ----------- ----------- $ 2,813,086 $ 3,201,141 ----------- ----------- ----------- ----------- Money Market Fund Fidelity Institutional Cash Domestic Money Market Class I Fund $ 1,105,798 $ 1,105,798 ----------- ----------- ----------- ----------- Bond Fund Aetna Life Insurance Group Annuity $ 419,313 $ 424,941 Ameritas Life Insurance Group Annuity 120,722 122,672 Strong Government Securities Fund 234,614 236,897 Cash equivalents 194,827 194,827 ----------- ----------- $ 969,476 $ 979,337 ----------- ----------- ----------- ----------- Vanguard 500 Fund Vanguard Index Trust 500 Portfolio $ 1,032,661 $ 1,363,320 ----------- ----------- ----------- ----------- Vanguard Small Cap Fund Vanguard Index Trust Small Capitalization Portfolio $ 737,009 $ 824,259 ----------- ----------- ----------- -----------
9 FLOW INTERNATIONAL CORPORATION VOLUNTARY PENSION AND SALARY DEFERRAL PLAN ADDITIONAL INFORMATION - SCHEDULE I (CONTINUED) SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 1997 - --------------------------------------------------------------------------------
DESCRIPTION COST FAIR VALUE Portico Bond Fund Portico Funds $131,859 $133,297 -------- -------- -------- -------- FLOW Fund FLOW International Common Stock $532,493 $588,926 Cash equivalents 12 12 -------- -------- $532,505 $588,938 -------- -------- -------- -------- Participant loans Due through 10/15/2016 Interest rates 6%-9% $88,518 $88,518 -------- -------- -------- --------
10 FLOW INTERNATIONAL CORPORATION VOLUNTARY PENSION AND SALARY DEFERRAL PLAN ADDITIONAL INFORMATION - SCHEDULE II SCHEDULE OF REPORTABLE TRANSACTIONS YEAR ENDED DECEMBER 31, 1997 - --------------------------------------------------------------------------------
COST OF ASSETS SALES/ SOLD/ GAIN/ PURCHASES MATURITIES MATURED (LOSS) 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 $ 7,537,797 $ 6,987,921 $ 6,514,725 $ 473,196 Small Company Fund 14,351,868 14,746,949 13,864,047 882,902 International Fund 1,123,404 1,005,847 934,968 70,879
11 EX-23.1 2 EXHIBIT 23.1 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 12, 1998 appearing on page 4 of this Form 11-K. /s/ PRICE WATERHOUSE LLP Price Waterhouse LLP Seattle, Washington June 26, 1998 -----END PRIVACY-ENHANCED MESSAGE-----