-----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, IsLTo7XV8W9/ErU9VNvOzo864F2CCoZ3rkvlY+5X24grTcD2lJ4HJS5doScT9IL8 kq+YQeJWms16k/tMO01Vqg== 0000912057-02-026071.txt : 20020701 0000912057-02-026071.hdr.sgml : 20020701 20020701160916 ACCESSION NUMBER: 0000912057-02-026071 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020701 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STEWART & STEVENSON SERVICES INC CENTRAL INDEX KEY: 0000094328 STANDARD INDUSTRIAL CLASSIFICATION: ENGINES & TURBINES [3510] IRS NUMBER: 741051605 STATE OF INCORPORATION: TX FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11443 FILM NUMBER: 02693725 BUSINESS ADDRESS: STREET 1: 2707 N LOOP W CITY: HOUSTON STATE: TX ZIP: 77008 BUSINESS PHONE: 7138687700 MAIL ADDRESS: STREET 1: P O BOX 1637 CITY: HOUSTON STATE: TX ZIP: 77251-1637 11-K 1 a2083704z11-k.txt 11-K ================================================================================ UNITED STATES 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, 2001 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 1-8514 A. FULL TITLE OF THE PLAN AND THE ADDRESS OF THE PLAN, IF DIFFERENT FROM THAT OF THE ISSUER NAMED BELOW: STEWART & STEVENSON 401(K) SAVINGS PLAN B. NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN AND THE ADDRESS OF ITS PRINCIPAL EXECUTIVE OFFICE: STEWART & STEVENSON SERVICES, INC. 2707 NORTH LOOP WEST HOUSTON, TEXAS 77008 ================================================================================ Stewart & Stevenson 401(k) Savings Plan Financial Statements and Supplemental Schedules Year ended December 31, 2001 CONTENTS Report of Independent Auditors.........................................1 Audited Financial Statements Statements of Net Assets Available for Benefits........................4 Statement of Changes in Net Assets Available for Benefits..............5 Notes to Financial Statements..........................................6 Supplemental Schedules Schedule G, Part III - Schedule of Nonexempt Transactions.............11 Schedule H, Line 4(i) - Schedule of Assets (Held At End of Year)......12 The statements of net assets available for benefits and the related statement of changes in net assets available for benefits of the Stewart & Stevenson 401(k) Savings Plan included in this Form 11-K were audited by Arthur Anderson LLP, independent auditors, as set forth in their report thereon included herein, and are included herein, and incorporated by reference in the Registration Statement of Stewart & Stevenson Services Inc. on Form S-8 (No. 033-52903), in reliance upon such report given on the authority of such firm as an expert in accounting and auditing. Arthur Andersen LLP has not consented to this inclusion of their report in this Form 11-K or the incorporation by reference of their report in such Registration Statements and the Stewart & Stevenson 401(k) Savings Plan has not obtained their consent to do so in reliance on Rule 437a of the Securities Act of 1933. Because Arthur Andersen LLP has not consented to the incorporation of their report in such Registration Statements, you will not be able to recover against Arthur Andersen LLP under such Section 11 of the Securities Act of 1933 for any untrue statements of a material fact contained in the financial statements unaudited by Arthur Andersen LLP or any omissions to state material fact required to be stated therein. 1 Report of Independent Auditors Administrative Committee Stewart & Stevenson 401(k) Savings Plan We have audited the accompanying statement of net assets available for benefits of the Stewart & Stevenson 401(k) Savings Plan as of December 31, 2001, and the related statement of changes in net assets available for benefits for the year 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 audit. The financial statements of the Plan as of December 31, 2000, were audited by other auditors whose report dated June 28, 2001, expressed an unqualified opinion on those statements. We conducted our audit in accordance with auditing standards generally accepted in the United States. 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 audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2001, and the changes in its net assets available for benefits for the year then ended, in conformity with accounting principles generally accepted in the United States. Our audit was performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of nonexempt transactions for the year ended December 31, 2001, and schedule of assets (held at end of year) as of December 31, 2001, are presented for purposes of additional analysis and are not a required part of the 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 supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in our audit of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ Ernst & Young LLP Houston, Texas June 6, 2002 2 THE FOLLOWING REPORT IS A COPY OF A REPORT PREVIOUSLY ISSUED BY ARTHUR ANDERSEN LLP AND HAS NOT BEEN REISSUED BY ARTHUR ANDERSEN LLP. REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Administrative Committee of the Stewart & Stevenson 401(k) Savings Plan: We have audited the accompanying statements of net assets available for benefits of the Stewart & Stevenson 401(k) Savings Plan (the Plan) as of December 31, 2000 and 1999, and the related statement of changes in net assets available for benefits for the year ended December 31, 2000. These financial statements and supplemental schedules referred to below are the responsibility of the Plan's administrator. Our responsibility is to express an opinion on these financial statements and supplemental schedules based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. 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, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Stewart & Stevenson 401(k) Savings Plan as of December 31, 2000 and 1999, and the changes in net assets available for benefits for the year ended December 31, 2000, in conformity with accounting principles generally accepted in the United States. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) as of December 31, 2000 (Schedule I), and schedule of nonexempt transactions for the year ended December 31, 2000 (Schedule II), 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. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Arthur Andersen LLP ARTHUR ANDERSEN LLP Houston, Texas June 28, 2001 3 Stewart & Stevenson 401(k) Savings Plan Statements of Net Assets Available for Benefits DECEMBER 31 2001 2000 ---------------------------- ASSETS Cash $ 1,113 $ 6,968 Receivables: Employer contributions 194,975 310,016 Participant contributions 587,419 1,418,271 Accrued income 28,070 22,548 Pending sale 24 22,375 ---------------------------- Total receivables 810,488 1,773,210 Investments 55,139,404 49,135,494 ---------------------------- Total assets 55,951,005 50,915,672 LIABILITIES Accrued expenses 51,838 34,706 ---------------------------- Net assets available for benefits $55,899,167 $50,880,966 ============================= SEE ACCOMPANYING NOTES. 4 Stewart & Stevenson 401(k) Savings Plan Statement of Changes in Net Assets Available for Benefits Year ended December 31, 2001 Additions: Employer contributions $ 2,670,798 Participant contributions 8,521,636 Rollover contributions 769,172 Investment income 1,721,509 ----------- Total additions 13,683,115 Deductions: Benefit payments 4,257,566 Net depreciation in fair value of investments 4,302,184 Administrative expenses 105,164 ----------- Total deductions 8,664,914 ----------- Net increase 5,018,201 Net assets available for benefits at: Beginning of year 50,880,966 ----------- End of year $55,899,167 =========== SEE ACCOMPANYING NOTES. 5 Stewart & Stevenson 401(k) Savings Plan Notes to Financial Statements December 31, 2001 1. DESCRIPTION OF PLAN GENERAL The Stewart & Stevenson 401(k) Savings Plan (the "Plan") is a defined contribution plan established effective January 1, 1994 for the benefit of eligible employees of Stewart & Stevenson, Inc. and certain adopting subsidiaries (collectively, the "Company") who have completed at least 30 days of service. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). The following description of the Plan is provided for general information only. Participants should refer to the SUMMARY PLAN DESCRIPTION for a more complete description of the Plan's provisions, a copy of which is available from the Company. CONTRIBUTIONS Eligible employees are automatically enrolled for a 1% participant contribution of their eligible compensation unless otherwise elected. Participants may elect to make an additional contribution from 2% to 20% of their eligible compensation, subject to certain limitations, as defined by the Internal Revenue Code ("IRC"). The first 1% of participant contributions is matched dollar for dollar ("Basic Match") by the Company, and participant contributions in excess of 1% of compensation but no more than 6% are matched at 25% ("Supplemental Match") by the Company. Participants may also make rollover contributions to the Plan representing distributions from other qualified plans. Participants may direct the investment of all contributions into one or more of the investment options offered by the Plan. VESTING Participants are fully vested in their participant contributions, rollovers, Basic Match, and the related earnings which have been credited to their accounts. Participants shall have a 100% vested interest in their Supplemental Match contributions upon attainment of age 65, the normal retirement age, or upon death or disability, as defined by the Plan. Participants who terminate for any other reason vest in their Supplemental Match contributions and related earnings at a rate of 20% per year with full vesting after five years of service. Forfeited amounts of nonvested accounts are used to reduce future Supplemental Match or administrative expenses of the Plan. 6 Stewart & Stevenson 401(k) Savings Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF PLAN (CONTINUED) BENEFIT PAYMENTS Benefits are payable to participants or to a designated beneficiary in the event of their retirement, death, or termination of employment in the form of a lump sum payment. In limited circumstances, account withdrawals may be made upon the attainment of age 59 1/2 or in the event of financial hardship as defined in the Plan. PARTICIPANT LOANS Participants may borrow from their accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance. The loan term may not exceed five years, except for loans used for the purchase of a principal residence, which may be repaid over a longer period of time. Principal and interest are paid ratably through payroll deductions. ADMINISTRATIVE EXPENSES The Company pays certain administrative expenses of the Plan. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions set forth in ERISA. In the event of Plan termination, participants will become 100% vested in their account balances. 2. SUMMARY OF ACCOUNTING POLICIES BASIS OF ACCOUNTING The accompanying financial statements of the Plan have been prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States. Benefit payments are recorded when paid. 7 Stewart & Stevenson 401(k) Savings Plan Notes to Financial Statements (continued) 2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED) USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes and schedules. Actual results could differ from those estimates. INVESTMENT VALUATION AND INCOME RECOGNITION Investments in mutual funds and common stock are stated at fair value, based on quotations obtained from national security exchanges. The investment in the common collective trust fund is stated at fair value as determined by the issuer, based on the fair value of the underlying investments. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. RISKS AND UNCERTAINTIES The Plan provides for various investments in a common collective trust fund, mutual funds, and common stock. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility risk. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such change could materially affect the amounts reported in the statement of net assets available for benefits and participant account balances. 8 Stewart & Stevenson 401(k) Savings Plan Notes to Financial Statements (continued) 3. INVESTMENTS Individual investments that represent 5% or more of the Plan's net assets are as follows:
DECEMBER 31 2001 2000 ------------------------------- AIM Value Fund $14,062,515 $14,346,645 American Balanced Fund 5,201,360 4,297,325 Stewart & Stevenson Services, Inc. common stock 3,268,435 3,656,044 Franklin Small Cap Growth Fund 4,408,400 3,921,656 Massachusetts Investors Trust 3,923,704 3,180,118 Merrill Lynch Corporate Bond Fund, Inc. Intermediate Term 6,179,431 4,289,942 Merrill Lynch Global Allocation Fund, Inc. 7,154,706 6,738,359 Merrill Lynch Retirement Preservation Trust 6,514,535 5,140,003 During 2001, the Plan's investments (including investments bought, sold, and held during the year) depreciated in value as follows: Common stock $ 551,832 Mutual funds 3,750,352 ----------- $ 4,302,184 ===========
4. INCOME TAX STATUS The Plan has received a determination letter from the Internal Revenue Service dated January 20, 2000, stating that the Plan is qualified under section 401(a) of the IRC and, therefore, the related trust is exempt from taxation. Subsequent to this issuance of the determination letter, the Plan was amended. Once qualified, the Plan is required to operate in conformity with the IRC to maintain its qualification. The Plan administrator believes the Plan is being operated in compliance with the applicable requirements of the IRC and, therefore, believes that the Plan, as amended, is qualified and the related trust is tax exempt. 9 Supplemental Schedules Stewart & Stevenson 401(k) Savings Plan Schedule G, Part III - Schedule of Nonexempt Transactions EIN: 74-1051605 PN: 002 Year ended December 31, 2001
RELATIONSHIP TO PLAN, EMPLOYER, OR OTHER CURRENT VALUE IDENTITY OF PARTY INVOLVED PARTY-IN-INTEREST DESCRIPTION OF TRANSACTIONS OF ASSET - ----------------------------------------------------------------------------------------------------------------------------- Stewart & Stevenson Employer/Plan Sponsor Failure to timely remit $ 1,062,740 Services, Inc. participant deferrals for various pay periods in 2000 (contributions and loan repayments returned to employer in error and subsequently remitted in 2001 along with interest).
Stewart & Stevenson 401(k) Savings Plan Schedule H, Line 4(i) - Schedule of Assets (Held At End of Year) EIN: 74-1051605 PN: 002 December 31, 2001
IDENTITY OF ISSUE, BORROWER, LESSOR, CURRENT OR SIMILAR PARTY DESCRIPTION OF INVESTMENT VALUE - ------------------------------------------------------------------------------------------------------------------- AIM Family of Funds AIM Value Fund $ 14,062,515 American Funds Group American Balanced Fund 5,201,360 Franklin Investments Franklin Small Cap Growth Fund 4,408,400 Massachusetts Financial Services Massachusetts Investors Trust 3,923,704 Merrill Lynch Corporate Bond Fund, Inc. *Merrill Lynch Intermediate Term 6,179,431 Merrill Lynch Global Allocation Fund, Inc. *Merrill Lynch 7,154,706 Merrill Lynch Retirement Preservation Trust *Merrill Lynch 6,514,535 Olympic Trust Hotchkis & Wiley International Fund 2,003,236 *Stewart & Stevenson Services, Inc. 173,761 shares of common stock 3,268,435 Various maturities and interest rates *Participant loans ranging from 6.0% to 10.5% 2,423,082 ------------ $ 55,139,404 ============
*Party-in-interest. SIGNATURES THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934, the Stewart & Stevenson 401(k) Savings Plan Administrative Committee has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. STEWART & STEVENSON 401(k) SAVINGS PLAN ADMINISTRATIVE COMMITTEE Date: June 28, 2002 /s/ DAVID STEWART ------------------------------------------ David Stewart Chairman /s/ JOHN SIMMONS ------------------------------------------ John Simmons Member /s/ BILL MOLL ------------------------------------------ Bill Moll Member /s/ STEVE HINES ------------------------------------------ Steve Hines Member /s/ LESLEY ROTH ------------------------------------------ Lesley Roth Member INDEX TO EXHIBIT EXHIBIT NO. DESCRIPTION - ----------- ------------ 23.1 Consent of independent accountants EX-23.1 3 a2083704zex-23_1.txt EXHIBIT 23.1 Exhibit 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 033-52903) pertaining to the Stewart & Stevenson 401(k) Savings Plan of our report dated June 6, 2002, with respect to the financial statements and schedules of the Stewart & Stevenson 401(k) Savings Plan included in this Annual Report (Form 11-K) for the year ended December 31, 2001. /s/ Ernst & Young LLP Houston, Texas June 26, 2002 -----END PRIVACY-ENHANCED MESSAGE-----