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
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission File # 1-4252
UIC 401(K) RETIREMENT SAVINGS PLAN
(Full title of the plan)
UNITED INDUSTRIAL CORPORATION
(Name of the issuer of the securities held pursuant to the plan)
United Industrial Corporation
570 Lexington Avenue
New York, New York 10022
(Address of principal executive office)
NYFS11...:\95\78495\0001\1708\FRM6298J.590
<PAGE>
REQUIRED INFORMATION
Item 4.
The financial statements and schedules of the UIC 401(k) Retirement
Savings Plan for the year ended December 31, 1997 (attached).
Exhibits
23.1 Consent of Ernst & Young LLP.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the 401(k) Committee of the United Industrial Corporation 401(k) Retirement
Savings Plan (the "Plan"), which administers the Plan, has duly caused this
annual report to be signed on its behalf by the undersigned, thereunto duly
authorized, on the 29th day of June, 1998.
By: /s/ James H. Perry
--------------------------------
James H. Perry
Committee Member
3
<PAGE>
AUDITED FINANCIAL STATEMENTS AND SCHEDULES
UIC 401(K) RETIREMENT SAVINGS PLAN
Years ended December 31, 1997 and 1996
with Report of Independent Auditors
<PAGE>
UIC 401(k) Retirement Savings Plan
Audited Financial Statements and Schedules
Years ended December 31, 1997 and 1996
CONTENTS
Report of Independent Auditors..............................................1
Financial Statements
Statements of Net Assets Available for Plan Benefits........................2
Statements of Changes in Net Assets Available for Plan Benefits.............3
Notes to Financial Statements...............................................4
Supplemental Schedules
Line 27a--Schedule of Assets Held for Investment Purposes...................9
Line 27d--Schedule of Reportable Transactions..............................10
<PAGE>
Report of Independent Auditors
Administrative Committee
UIC 401(k) Retirement Savings Plan
We have audited the accompanying statements of net assets available for plan
benefits of the UIC 401(k) Retirement Savings Plan (the "Plan") as of December
31, 1997 and 1996, and the related statements of changes in net assets available
for plan 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, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan at
December 31, 1997 and 1996, and the changes in its net assets available for plan
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1997 and reportable transactions
for the year then ended are presented for purposes of complying with the
Department of Labor's Rule and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974, and are not a required part
of the financial statements. The supplemental schedules have been subjected to
the auditing procedures applied in our audit of the 1997 financial statements
and, in our opinion, are fairly stated in all material respects in relation to
the 1997 financial statements taken as a whole.
/s/ Ernst & Young LLP
Baltimore, Maryland
May 29, 1998
1
<PAGE>
UIC 401(k) Retirement Savings Plan
Statements of Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
DECEMBER 31
1997 1996
------------------------------------
<S> <C> <C>
ASSETS
Cash $ 18,894 $ 36,697
Investments, stated at fair value:
Fidelity Magellan Fund 29,569,273 25,130,876
Fidelity Managed Income Portfolio 18,245,430 18,669,141
Fidelity Retirement Government Money Market Fund 1,776,549 1,532,499
Fidelity Growth & Income Fund 14,254,151 9,519,034
Fidelity Contrafund 8,190,740 5,183,449
Fidelity Investment Grade Bond Fund 754,347 481,517
United Industrial Corporation Common Stock 801,651 281,075
Participant loans 1,707,539 1,553,359
------------------------------------
Total investments 75,299,680 62,350,950
------------------------------------
Net assets available for Plan benefits $75,318,574 $62,387,647
====================================
</TABLE>
See accompanying notes.
2
<PAGE>
UIC 401(k) Retirement Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1997 1996
------------------------------------
<S> <C> <C>
ADDITIONS
Employee contributions $ 5,138,123 $ 4,746,692
Employer contributions 1,491,546 1,374,153
Rollover contributions 135,149 142,971
Investment income:
Fidelity Magellan Fund 1,931,746 3,881,615
Fidelity Managed Income Portfolio 1,089,631 1,067,628
Fidelity Growth & Income Fund 653,678 432,968
Fidelity Retirement Government Money Market Fund 83,322 65,489
Fidelity Contrafund 767,190 342,958
Fidelity Investment Grade Bond Fund 39,013 32,184
United Industrial Corporation Stock Fund 20,466 9,350
Interest on loans to participants 159,329 131,151
------------------------------------
Total investment income 4,744,375 5,963,343
------------------------------------
11,509,193 12,227,159
DEDUCTIONS
Withdrawals (6,606,396) (3,969,114)
Net realized and unrealized appreciation in aggregate fair value
of investments 8,028,130 184,661
------------------------------------
Net increase 12,930,927 8,442,706
Net assets available for Plan benefits at beginning of year 62,387,647 53,944,941
------------------------------------
Net assets available for Plan benefits at end of year $75,318,574 $62,387,647
====================================
</TABLE>
See accompanying notes.
3
<PAGE>
UIC 401(k) Retirement Savings Plan
Notes to Financial Statements
1. SIGNIFICANT ACCOUNTING POLICIES
Investments in the Fidelity Magellan Fund, Fidelity Growth & Income Fund,
Fidelity Managed Income Portfolio, Fidelity Retirement Government Money Market
Fund, Fidelity Contrafund and Fidelity Investment Grade Bond Fund are reported
at current redemption value. The United Industrial Corporation Common Stock is
reported at market value, based on published market prices. Participant loans
represent the outstanding principal balances of the loans and are valued at
cost, which approximates current value.
The change in the difference between cost and market value is reflected in the
statements of changes in net assets available for benefits net of realized gains
and losses as net realized and unrealized appreciation (depreciation) in the
aggregate fair value of investments. The realized gain or loss on investments is
the difference between the proceeds and the specific cost of the investments.
Rollover contributions represent transfers from other qualified retirement
plans.
Administrative expenses associated with the UIC 401(k) Retirement Savings Plan
(the "Plan"), including the amount paid to Fidelity Management Trust Co. for
acting as custodian of the investments of the Plan, were paid by United
Industrial Corporation (the "Company") in 1997 and 1996.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of increases and decreases in net assets during the period.
Actual results could differ from those estimates.
2. DESCRIPTION OF THE PLAN
The Plan is a defined contribution plan. The purpose of the Plan is to encourage
employees to save regularly and to provide additional funds upon retirement.
Contributions are made by employees through payroll deductions and submitted to
Fidelity Management Trust Company Cash Reserve Fund, then subsequently deposited
in the investment option account(s) selected by the employee. The Company
matches employees' contributions and has a profit sharing provision as specified
in the Plan document. Employer contributions are vested after five years of
service. The Company is the named fiduciary which controls and manages the
operations of the Plan and acts as Administrator.
4
<PAGE>
UIC 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
All employees aged 21 or more who have completed one year of continuous
employment, consisting of at least 1,000 hours, with the Company (including its
participating subsidiaries) are eligible to participate in the Plan.
Participating employees contribute to the Plan through payroll deductions in
amounts ranging from 2% to 15% of their earnings up to the annual IRS limit.
Contributions to the Plan are invested in the available investment options in
accordance with the participants' elections. All employee contributions to the
Plan are immediately vested.
The Company has the right to terminate the Plan at any time. In the event of a
termination, the participants accounts shall be distributed to them in cash or
in property or in any combination of cash and property.
Additional information about the Plan and the vesting and benefit provisions is
contained in the Summary Plan Description of the UIC 401(k) Retirement Savings
Plan. Copies are available from the Human Resources Department of the Company.
3. INCOME TAX STATUS
The Plan obtained its latest determination letter on January 16, 1996, in which
the Internal Revenue Service stated that the Plan, as then designed, was in
compliance with the applicable requirements of the Internal Revenue Code. The
Plan has been amended since receiving the determination letter. However, the
plan administrator and the Plan's tax counsel believe that the plan is currently
designed and being operated in compliance with the applicable requirements of
the Internal Revenue Code. Therefore, no provision for income taxes has been
included in the Plan's financial statements.
4. RECONCILIATION TO FORM 5500
Total Plan earnings on investments, as reported on Form 5500 lines 32 b (1)
through (10), has been reported as Net realized and unrealized appreciation in
aggregate fair value of investments and as investment income in the accompanying
financial statements.
5
<PAGE>
UIC 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
5. STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
<TABLE>
<CAPTION>
DECEMBER 31, 1997
------------------------------------------------------------------------------------------------------------------------
FIDELITY
FIDELITY RETIREMENT FIDELITY
FIDELITY MANAGED GOVERNMENT FIDELITY INVESTMENT UIC
MAGELLAN INCOME MONEY MARKET GROWTH & FIDELITY GRADE BOND COMMON STOCK
FUND PORTFOLIO FUND INCOME FUND CONTRAFUND FUND FUND LOAN FUND TOTAL
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cash $ - $ - $ - $ - $ - $ - $ 18,894 $ - $ 18,894
Investments
at fair
value 29,569,273 18,245,430 1,776,549 14,254,151 8,190,740 754,347 801,651 - 73,592,141
Participant
loans - - - - - - - 1,707,539 1,707,539
------------------------------------------------------------------------------------------------------------------------
Net assets
available
for Plan
benefits $29,569,273 $ 18,245,430 $1,776,549 $14,254,151 $8,190,740 $754,347 $820,545 $1,707,539 $75,318,574
========================================================================================================================
DECEMBER 31, 1996
------------------------------------------------------------------------------------------------------------------------
FIDELITY
FIDELITY RETIREMENT FIDELITY
FIDELITY MANAGED GOVERNMENT FIDELITY INVESTMENT UIC
MAGELLAN INCOME MONEY MARKET GROWTH & FIDELITY GRADE BOND COMMON STOCK
FUND PORTFOLIO FUND INCOME FUND CONTRAFUND FUND FUND LOAN FUND TOTAL
------------------------------------------------------------------------------------------------------------------------
Cash $ - $ - $ - $ - $ - $ - $ 36,697 $ - $ 36,697
Investments
at fair
value 25,130,876 18,669,141 1,532,499 9,519,034 5,183,449 481,517 281,075 - 60,797,591
Participant
loans - - - - - - - 1,553,359 1,553,359
------------------------------------------------------------------------------------------------------------------------
Net assets
available
for Plan
benefits $25,130,876 $18,669,141 $1,532,499 $9,519,034 $5,183,449 $481,517 $317,772 $1,553,359 $62,387,647
========================================================================================================================
</TABLE>
6
<PAGE>
UIC 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
6. STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND
INFORMATION
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
------------------------------------------------------------------------------------------------------------------
FIDELITY
FIDELITY RETIREMENT FIDELITY
FIDELITY MANAGED GOVERNMENT FIDELITY INVESTMENT UIC
MAGELLAN INCOME MONEY GROWTH & FIDELITY GRADE BOND COMMON
FUND PORTFOLIO MARKET FUND INCOME FUND CONTRAFUND FUND STOCK FUND LOAN FUND TOTAL
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS
Employee
contributions $ 1,711,164 $ 1,125,415 $ 198,524 $ 1,161,161 $ 738,627 $131,652 $ 71,580 $ - $ 5,138,123
Employer
contributions 474,114 339,193 104,766 301,981 207,041 43,912 20,539 - 1,491,546
Rollover
contributions 48,493 261 11,900 49,131 24,639 725 - - 135,149
Investment income 1,931,746 1,089,631 83,322 653,678 767,190 39,013 20,466 159,329 4,744,375
------------------------------------------------------------------------------------------------------------------
4,165,517 2,554,500 398,512 2,165,951 1,737,497 215,302 112,585 159,329 11,509,193
DEDUCTIONS
Withdrawals (2,897,011) (2,094,884) (214,493) (827,567) (459,255) (29,029) (29,037) (55,120) (6,606,396)
Net realized and
unrealized
appreciation in
aggregate fair
value of
investments 4,536,295 - - 2,518,129 613,067 16,639 344,000 - 8,028,130
Interfund
transfers (1,366,404) (883,327) 60,031 878,604 1,115,982 69,918 75,225 49,971 -
------------------------------------------------------------------------------------------------------------------
Net increase 4,438,397 (423,711) 244,050 4,735,117 3,007,291 272,830 502,773 154,180 12,930,927
Net assets
available for
Plan benefits
at beginning
of year 25,130,876 18,669,141 1,532,499 9,519,034 5,183,449 481,517 317,772 1,553,359 62,387,647
------------------------------------------------------------------------------------------------------------------
Net assets
available for
Plan benefits
at end of year $29,569,273 $18,245,430 $1,776,549 $14,254,151 $8,190,740 $754,347 $820,545 $1,707,539 $75,318,574
==================================================================================================================
</TABLE>
7
<PAGE>
UIC 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
6. STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND
INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
------------------------------------------------------------------------------------------------------------------
FIDELITY
FIDELITY RETIREMENT FIDELITY
FIDELITY MANAGED GOVERNMENT FIDELITY INVESTMENT UIC
MAGELLAN INCOME MONEY GROWTH & FIDELITY GRADE BOND COMMON
FUND PORTFOLIO MARKET FUND INCOME FUND CONTRAFUND FUND STOCK FUND LOAN FUND TOTAL
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS
Employee
contributions $ 1,842,868 $ 1,153,351 $ 172,518 $ 878,040 $ 542,811 $110,817 $ 46,287 $ - $ 4,746,692
Employer
contributions 504,701 358,276 74,249 239,219 144,180 39,429 14,099 - 1,374,153
Rollover
contributions 28,486 7,215 1,476 63,806 24,061 12,687 5,240 - 142,971
Investment income 3,881,615 1,067,628 65,489 432,968 342,958 32,184 9,350 131,151 5,963,343
------------------------------------------------------------------------------------------------------------------
6,257,670 2,586,470 313,732 1,614,033 1,054,010 195,117 74,976 131,151 12,227,159
DEDUCTIONS
Withdrawals (1,701,167) (1,548,454) (148,654) (257,805) (191,953) (50,787) (2,015) (68,279) (3,969,114)
Net realized and
unrealized
(depreciation)
appreciation in
aggregate fair
value of
investments (1,199,157) - - 988,863 405,381 (17,121) 6,695 - 184,661
Interfund
transfers (2,123,776) (996,270) 185,790 1,228,098 1,538,854 (52,998) 6,651 213,651 -
------------------------------------------------------------------------------------------------------------------
Net increase 1,233,570 41,746 350,868 3,573,189 2,806,292 74,211 86,307 276,523 8,442,706
Net assets
available for
Plan benefits
at beginning
of year 23,897,306 18,627,395 1,181,631 5,945,845 2,377,157 407,306 231,465 1,276,836 53,944,941
------------------------------------------------------------------------------------------------------------------
Net assets
available for
Plan benefits
at end of year $25,130,876 $18,669,141 $1,532,499 $9,519,034 $5,183,449 $481,517 $317,772 $1,553,359 $62,387,647
==================================================================================================================
</TABLE>
8
<PAGE>
Supplemental Schedules
<PAGE>
UIC 401(k) Retirement Savings Plan
Line 27a--Schedule of Assets Held for Investment Purposes
December 31, 1997
<TABLE>
<CAPTION>
DESCRIPTION CURRENT
IDENTITY OF ISSUE OF INVESTMENT COST VALUE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fidelity Magellan Fund 310,373 shares $23,493,690 $29,569,273
Fidelity Managed Income Portfolio 18,245,430 shares 18,245,430 18,245,430
Fidelity Retirement Government Money Market
Fund 1,776,549 shares 1,776,549 1,776,549
Fidelity Growth & Income Fund 374,125 shares 10,448,135 14,254,151
Fidelity Contrafund 175,654 shares 7,196,028 8,190,740
Fidelity Investment Grade Bond Fund 103,619 shares 737,796 754,347
United Industrial Corporation Common Stock
73,715 shares 538,608 801,651
Participant loans $1,707,539 principal
balance; interest
rates from 7% to
14.5%; maturities to
October, 2012 0 1,707,539
------------------------------------
Total assets held for investment purposes $62,436,236 $75,299,680
====================================
</TABLE>
9
<PAGE>
UIC 401(k) Retirement Savings Plan
Line 27d--Schedule of Reportable Transactions
Year Ended December 31, 1997
<TABLE>
<CAPTION>
TOTAL DOLLAR VALUE TOTAL DOLLAR
IDENTITY OF PARTY NUMBER OF OF NUMBER OF VALUE OF
INVOLVED DESCRIPTION OF ASSETS PURCHASES PURCHASES SALES SALES NET GAIN
- ----------------------------------------------------------------------------------------------------------------------------------
Category (iii)--Series of transactions in excess of 5% of plan assets
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Fidelity Investments Magellan Fund 207 $5,409,725 166 $5,507,623 $1,007,441
Fidelity Investments Contrafund 182 3,845,984 91 1,451,760 190,798
Fidelity Investments Growth & Income Fund 204 5,231,110 125 3,014,122 535,218
Fidelity Investments Managed Income Portfolio 181 5,095,823 183 5,519,534 -
</TABLE>
There were no category (i), (ii) or (iv) reportable transactions during 1997.
10
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
23.1 Consent of Independent Auditors
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8, Reg. No. 33-57065) pertaining to the UIC 401(k) Retirement Savings Plan of
United Industrial Corporation and in the related Prospectus of our report dated
May 29, 1998, with respect to the financial statements and supplemental
schedules of the UIC 401(k) Retirement Savings Plan included in this Annual
Report (Form 11-K) for the year ended December 31, 1997.
/s/ Ernst & Young LLP
Baltimore, Maryland
June 25, 1998
