<PAGE> 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 (Fee Required)
For the fiscal year ended: June 30, 1996
OR
Transition report pursuant to Section 15(d) of the Securities Exchange
- - Act of 1934 (No Fee Required)
For the transition period from:
Commission file number 0-5888
A. Full title of the Plan and the address of the Plan, if different from
that of the issuer named below:
Waxman Industries, Inc.
Profit Sharing and 401(K) Retirement Plan
B. Name of issuer of the Securities held pursuant to the Plan and the
address of its principal executive office:
Waxman Industries, Inc.
24460 Aurora Road
Bedford Heights, Ohio 44146
<PAGE> 2
WAXMAN INDUSTRIES, INC.
PROFIT SHARING AND 401(K) RETIREMENT PLAN
FINANCIAL STATEMENTS
AS OF JUNE 30, 1996, 1995 AND 1994
TOGETHER WITH REPORT OF
INDEPENDENT PUBLIC ACCOUNTANTS
<PAGE> 3
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Waxman Industries, Inc.:
We have audited the accompanying statements of participants' equity, including
the schedule of assets held for investment purposes, of the Waxman Industries,
Inc. Profit Sharing and 401(K) Retirement Plan (the Plan) as of June 30, 1996
and 1995, and the related statements of changes in participants' equity for each
of the three years in the period ended June 30, 1996. These financial statements
and the schedules referred to below are the responsibility of the plan
administrator. Our responsibility is to express an opinion on these financial
statements and schedules 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 participants' equity of the Plan as of June 30, 1996
and 1995, and the changes in participants' equity for each of the three years in
the period ended June 30, 1996, in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions 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 fund information in the
statements of changes in participants' equity is presented for purposes of
additional analysis rather than to present the changes in participants' equity
of each fund. The supplemental schedules and fund information 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.
As explained in Note 2, information certified by the trustee and presented in
the schedules of assets held for investment purposes and reportable transactions
does not disclose the historical cost of the investments. Disclosure of this
information is required by the Department of Labor's Rules and Regulations for
<PAGE> 4
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974.
/s/ Arthur Andersen LLP.
Cleveland, Ohio,
December 13, 1996.
<PAGE> 5
WAXMAN INDUSTRIES, INC.
PROFIT SHARING AND 401(K) RETIREMENT PLAN
INDEX
JUNE 30, 1996, 1995, AND 1994
Statements of Participants' Equity as of June 30, 1996 and 1995
Statements of Changes in Participants' Equity for the Years Ended
June 30, 1996, 1995 and 1994
Notes to Financial Statements
Consent of Arthur Andersen LLP. - Item 23
Schedule I - Item 27a - Schedule of Assets Held for Investment Purposes as of
June 30, 1996
Schedule II - Item 27d - Schedule of Reportable Transactions for the Year Ended
June 30, 1996
<PAGE> 6
WAXMAN INDUSTRIES , INC.
PROFIT SHARING AND 401(K) RETIREMENT PLAN
STATEMENTS OF PARTICIPANTS' EQUITY
JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
June 30, 1996 June 30, 1995
------------- -------------
<S> <C> <C>
INVESTMENTS, at market value:
Waxman Industries, Inc. common stock $1,412,700 $405,946
CIGNA funds:
Fidelity Contrafund 111,018 63,649
Fidelity Income & Growth Fund 100,060 63,900
Guaranteed CIGNA fund 526,730 409,478
INVESCO Industrial Fund 23,177 13,110
Lifetime 20 Fund 46,824 27,801
Lifetime 30 Fund 130,001 86,786
Lifetime 40 Fund 173,182 104,848
Lifetime 50 Fund 140,283 88,753
Lifetime 60 Fund 7,744 10,998
20th Century Ultra Fund 85,603 43,948
Warburg Pincus Growth & Income Fund 111,730 91,869
Warburg Pincus International Equity Fund 120,263 87,136
Cash Account 42,955 --
Participant Loans 5,369 --
========== ==========
Participants' Equity $3,037,639 $1,498,222
========== ==========
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
<PAGE> 7
WAXMAN INDUSTRIES, INC.
-----------------------
PROFIT SHARING AND 401(K) RETIREMENT PLAN
-----------------------------------------
STATEMENT OF CHANGES IN PARTICIPANTS' EQUITY
--------------------------------------------
FOR THE YEAR ENDED JUNE 30, 1996
--------------------------------
<TABLE>
<CAPTION>
WAXMAN
INDUSTRIES, INC. FIDELITY INVESCO
COMMON STOCK FIDELITY INCOME & GUARANTEED INDUSTRIAL LIFETIME LIFETIME
FUND CONTRAFUND GROWTH FUND CIGNA FUND FUND 20 FUND 30 FUND
-------------- ------------ ----------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
INCREASES:
CONTRIBUTIONS-
WAXMAN INDUSTRIES, INC $ 917 $ 1,050 $ 1,132 $ 5,440 $ 318 $ 589 $ 1,577
PARTICIPANTS 24,423 37,673 43,621 161,965 8,574 16,967 48,881
LOAN REPAYMENT-
PRINCIPAL -- 72 72 12 68 -- 21
INTEREST INCOME -- 9 8 6 7 -- 10
MARKET VALUE CHANGES OF
INVESTMENTS 1,054,946 16,887 3,147 26,477 2,658 6,608 18,107
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL INCREASES 1,080,286 55,691 47,980 193,900 11,625 24,164 68,596
---------- ---------- ---------- ---------- ---------- ---------- ----------
DECREASES:
DISTRIBUTIONS TO FORMER
PARTICIPANTS 70,841 13,904 5,858 77,946 1,697 4,414 25,388
TRANSACTION COSTS 3,442 21 180 1,270 17 440 659
LOANS TO PARTICIPANTS -- 260 682 1,834 211 -- 191
---------- ---------- ---------- ---------- ---------- ---------- ----------
TOTAL DECREASES 74,283 14,185 6,720 81,050 1,925 4,854 26,238
---------- ---------- ---------- ---------- ---------- ---------- ----------
TRANSFERS BETWEEN FUNDS 751 5,863 (5,100) 4,402 367 (287) 857
---------- ---------- ---------- ---------- ---------- ---------- ----------
NET INCREASE (DECREASE) 1,006,754 47,369 36,160 117,252 10,067 19,023 43,215
PARTICIPANTS' EQUITY, BEGINNING
OF YEAR 405,946 63,649 63,900 409,478 13,110 27,801 86,786
---------- ---------- ---------- ---------- ---------- ---------- ----------
PARTICIPANTS' EQUITY, END
OF YEAR $1,412,700 $ 111,018 $ 100,060 $ 526,730 $ 23,177 $ 46,824 $ 130,001
========== ========== ========== ========== ========== ========== ==========
</TABLE>
The accompanying notes to financial statements are an integral part
<PAGE> 8
<TABLE>
<CAPTION>
WARBURG WARBURG
20TH PINCUS PINCUS
LIFETIME LIFETIME LIFETIME CENTURY GROWTH & INTERNATIONAL CASH PARTICIPANT
40 FUND 50 FUND 60 FUND ULTRA FUND INCOME FUND EQUITY FUND ACCOUNT LOANS TOTAL
- ----------- ------------ ------------ ------------- ----------- ------------- ------------ -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 1,501 $ 1,000 $ 126 $ 659 $ 1,408 $ 1,504 $ 3,359 $ -- $ 20,580
50,342 40,927 2,840 26,629 48,885 40,934 39,437 -- 592,098
582 211 -- 64 72 166 141 (141) 1,340
7 66 -- 8 9 39 18 -- 187
20,448 15,229 799 11,850 7,521 20,483 -- -- 1,205,160
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
72,880 57,433 3,765 39,210 57,895 63,126 42,955 (141) 1,819,365
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
4,181 5,137 6,877 12,963 20,731 21,910 -- -- 271,847
235 213 120 19 20 125 -- -- 6,761
589 1,656 -- 230 244 953 -- (5,510) 1,340
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
5,005 7,006 6,997 13,212 20,995 22,988 -- (5,510) 279,948
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
459 1,103 (22) 15,657 (17,039) (7,011) -- -- --
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
68,334 51,530 (3,254) 41,655 19,861 33,127 42,955 5,369 1,539,417
104,848 88,753 10,998 43,948 91,869 87,136 -- -- 1,498,222
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
$ 173,182 $ 140,283 $ 7,744 $ 85,603 $ 111,730 $ 120,263 $ 42,955 $ 5,369 $3,037,639
========== ========== ========== ========== ========== ========== ========== ========== ==========
</TABLE>
of this statement.
<PAGE> 9
WAXMAN INDUSTRIES, INC.
PROFIT SHARING AND 401(K) RETIREMENT PLAN
STATEMENT OF CHANGES IN PARTICIPANTS' EQUITY
FOR THE YEAR ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
Fidelity INVESCO
Fidelity Income & Guaranteed Industrial Lifetime Lifetime Lifetime Lifetime Lifetime
Contrafund Growth Fund CIGNA Fund Fund 20 Fund 30 Fund 40 Fund 50 Fund 60 Fund
---------- ----------- ---------- ---- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCREASES:
Contributions-
Waxman Industries, Inc. 9,328 11,463 53,741 2,566 6,240 15,784 14,995 9,866 1,296
Participants 25,386 35,581 137,052 5,794 15,760 41,272 35,821 35,699 4,209
Transfer from previous
trustee 20,068 15,721 218,817 3,506 3,979 23,996 48,075 37,769 4,825
Investment Income-
Dividend income -- -- -- -- -- -- -- -- --
Interest income -- -- -- -- -- -- -- -- --
Realized appreciation
of investments -- -- -- -- -- -- -- -- --
Market value changes of
investments 9,144 2,932 10,944 1,173 2,216 6,940 8,119 6,909 668
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Total increases 63,926 65,697 420,554 13,039 28,195 87,992 107,010 90,243 10,998
--------- --------- --------- --------- --------- --------- --------- --------- ---------
DECREASES:
Distributions to former
participants 322 1,177 14,190 -- 347 1,025 1,838 1,410 --
Transfer to new trustee -- -- -- -- -- -- -- -- --
Transaction costs -- -- 1,061 -- 47 200 160 80 --
Market value changes of
investments -- -- -- -- -- -- -- -- --
Realized depreciation
of investments -- -- -- -- -- -- -- -- --
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Total decreases 322 1,177 15,251 -- 394 1,225 1,998 1,490 0
--------- --------- --------- --------- --------- --------- --------- --------- ---------
TRANSFERS BETWEEN FUNDS 45 (620) 4,175 71 -- 19 (164) -- --
--------- --------- --------- --------- --------- --------- --------- --------- ---------
NET INCREASE (DECREASE) 63,649 63,900 409,478 13,110 27,801 86,786 104,848 88,753 10,998
PARTICIPANTS' EQUITY, beginning
of year -- -- -- -- -- -- -- -- --
--------- --------- --------- --------- --------- --------- --------- --------- ---------
PARTICIPANTS' EQUITY, end
of year $ 63,649 $ 63,900 $ 409,478 $ 13,110 $ 27,801 $ 86,786 $ 104,848 $ 88,753 $ 10,998
========= ========= ========= ========= ========= ========= ========= ========= =========
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
<PAGE> 10
<TABLE>
<CAPTION>
Waxman Warburg Warburg
20th Industries, Inc. Pincus Pincus Waxman Fixed Money
Century Common Stock Growth & International Diversified Industries Income Market
Ultra Fund Fund Income Fund Equity Fund Fund Fund Fund Fund TOTAL
- ---------- ---- ----------- ----------- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6,127 8,973 12,771 15,506 $ -- $ -- $ -- $ -- $ 168,656
17,117 18,639 36,030 41,841 15,069 2,361 6,444 18,147 492,222
13,227 581,748 39,260 37,531 -- -- -- -- 1,048,522
-- -- -- -- 631 -- -- -- 631
-- -- -- -- 2,578 52 1,522 165 4,317
-- -- -- -- 2,699 -- -- -- 2,699
6,648 -- 5,847 -- -- -- -- -- 61,540
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
43,119 609,360 93,908 94,878 20,977 2,413 7,966 18,312 1,778,587
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
515 6,362 760 922 28,892 44,406 6,720 607 109,493
-- -- -- -- 191,687 634,958 99,579 122,298 1,048,522
-- 2,394 -- 12 -- -- -- -- 3,954
-- 194,387 -- 3,488 -- -- -- -- 197,875
-- -- -- -- -- 81,122 -- -- 81,122
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
515 203,143 760 4,422 220,579 760,486 106,299 122,905 1,440,966
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
1,344 (271) (1,279) (3,320) -- -- -- -- --
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
43,948 405,946 91,869 87,136 (199,602) (758,073) (98,333) (104,593) 337,621
-- -- -- -- 199,602 758,073 98,333 104,593 1,160,601
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
$ 43,948 $ 405,946 $ 91,869 $ 87,136 $ -- $ -- $ -- $ -- $1,498,222
========== ========== ========== ========== ========== ========== ========== ========== ==========
</TABLE>
<PAGE> 11
WAXMAN INDUSTRIES, INC.
-----------------------
PROFIT SHARING AND 401(K) RETIREMENT PLAN
-----------------------------------------
STATEMENT OF CHANGES IN PARTICIPANTS' EQUITY
--------------------------------------------
FOR THE YEAR ENDED JUNE 30, 1994
--------------------------------
<TABLE>
<CAPTION>
------------------------------------------------------------------------
Waxman Fixed Money
Diversified Industries Income Market
Fund Fund Fund Fund Total
----------- ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
INCREASES:
Contributions-
Waxman Industries, Inc. $ -- $ 55,000 $ -- $ -- $ 55,000
Participants 42,908 15,291 33,442 20,844 112,485
Investment Income-
Dividend income 1,625 -- -- -- 1,625
Interest income 4,912 108 4,302 2,935 12,257
Gain (loss) on sale of
investments 241 (8,950) 29 -- (8,680)
----------- ----------- ----------- ----------- -----------
Total increases 49,686 61,449 37,773 23,779 172,687
----------- ----------- ----------- ----------- -----------
DECREASES:
Distributions to former
participants 21,688 36,251 6,561 3,933 68,433
Unrealized depreciation
of investments 6,868 368,735 5,680 -- 381,283
----------- ----------- ----------- ----------- -----------
Total decreases 28,556 404,986 12,241 3,933 449,716
----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) 21,130 (343,537) 25,532 19,846 (277,029)
PARTICIPANTS' EQUITY, beginning
of year 178,472 1,101,610 72,801 84,747 1,437,630
----------- ----------- ----------- ----------- -----------
PARTICIPANTS' EQUITY, end
of year $ 199,602 $ 758,073 $ 98,333 $ 104,593 $ 1,160,601
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
<PAGE> 12
WAXMAN INDUSTRIES, INC.
-----------------------
PROFIT SHARING AND 401(K) RETIREMENT PLAN
-----------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
JUNE 30, 1996, 1995 AND 1994
----------------------------
1. SUMMARY OF PLAN:
---------------
The following description of the Waxman Industries, Inc. (the Company) Profit
Sharing and 401(K) Retirement Plan (the Plan) provides only general information.
Participants should refer to the plan agreement for a more comprehensive
description of the Plan's provisions.
General
- -------
The Plan is a defined-contribution plan. It is subject to the provisions of the
Employee Retirement Income Security Act of 1974.
Trustee
- -------
Effective October 1, 1994, the trustee, recordkeeper, disbursement agent and
investor of the Plan was changed from National City Bank to Connecticut General
Life Insurance Company (CIGNA). Plan assets were transferred to CIGNA on October
3, 1994. The Plan's trustee maintains all records of investment transactions and
determines the valuation of the investment portfolio.
Eligibility
- -----------
Certain employees of the Company are eligible to participate in the Plan
provided they are at least 21 years of age and have completed one year of
service with the Company, as defined in the plan agreement.
Participant and Employer Contributions
- --------------------------------------
Participants may defer up to 15% of their pretax compensation by making
contributions to the Plan, subject to certain limitations. Also, participants
may direct the investment of their post September 1994 contributions to thirteen
investment options. Participants have the option to transfer cumulative
balances, except those relating to prior Company contributions, between
investment options.
Effective October 1, 1994, the Company may make discretionary matching
contributions to the Plan of $.50 per every $1.00 contributed by the participant
with the maximum Company match being 4% of the participants' compensation. The
amount of Company contributions made to the Plan is limited by the Code and is
determined at the discretion of the Board of Directors of the Company.
Participants may direct the investment of the Company's year-end contributions.
Company contributions are allocated to the accounts of eligible participants on
a monthly basis, as established in Section 4.2 of the Plan.
Investment Options
- ------------------
<PAGE> 13
Investment options as of June 30, 1996 and 1995 include the following:
Fidelity Contrafund
- -------------------
The Fidelity Contrafund is invested primarily in common stock and
securities convertible into common stocks of both domestic and
foreign companies.
Fidelity Income & Growth Fund
- -----------------------------
Fidelity Income & Growth Fund is invested in a diversified portfolio of
equity and fixed-income securities.
Guaranteed CIGNA Fund
- ---------------------
Guaranteed CIGNA Fund is invested primarily in commercial mortgages and
private bond placements. This fund has a full guarantee by CIGNA
against loss of principal and credited interest. This interest rate
is periodically reviewed and revised to reflect current investment
conditions.
INVESCO Industrial Fund
- -----------------------
INVESCO Industrial Fund is invested primarily in dividend-paying common
stocks of domestic industrial companies. It may also invest in
fixed-income securities.
Lifetime 20, 30, 40, 50, & 60 Funds ("CIGNA LIFETIME FUNDS")
- ------------------------------------------------------------
The "CIGNA LIFETIME FUNDS" are a family of five distinct investment
portfolios structured to maximize return and minimize risk over a
specific time period based on the participant's approximate age.
Each fund primarily is invested in a diversified mix of stock and
bond funds, designed to fit the time horizons and risk tolerances of
investors at different stages of their lives.
20th Century Ultra Fund
- -----------------------
20th Century Ultra Fund is invested primarily in common stocks of
medium-sized companies that meet certain technical and fundamental
criteria.
Waxman Industries, Inc. Common Stock
- ------------------------------------
The Waxman Industries, Inc. Common Stock is invested only in common stock
of the Company.
<PAGE> 14
Warburg Pincus Growth & Income Fund
- -----------------------------------
Warburg Pincus Growth & Income Fund is invested primarily in common stocks
and securities which derive their value from common stocks.
Warburg Pincus International Equity Fund
- ----------------------------------------
Warburg Pincus International Equity Fund is invested primarily in common
stocks of companies that are generally non-U.S. based.
Investment options as of June 30, 1994 included the following:
Diversified Fund
- ----------------
The Diversified Fund was invested in securities, bonds, obligations, notes,
debentures, mortgages, or other tangible or intangible property or
interests in property, either real or personal. No part of such fund
was invested in capital stock of the Company.
Waxman Industries Fund
- ----------------------
The Waxman Industries Fund was invested only in common stock of the
Company. This fund option is still available under the current Plan
investment options.
Fixed Income Fund
- -----------------
The Fixed Income Fund was invested in high-quality bonds with heavy
emphasis on U.S. Government securities. The maturity of these
securities usually ranged from five to twelve years.
Money Market Fund
- -----------------
The Money Market Fund was invested in short-term securities (generally
under 90-day maturities) such as certificates of deposit, repurchase
agreements and treasury bills, which preserve capital. Earnings on
this fund followed standard money market interest rate patterns.
The Plan provides for the establishment and maintenance of several accounts for
each participant which represent, in total, the participants' equity in the net
assets of the Plan. The individual participants' accounts shall distinguish
funds attributable to participant deferral contributions and Company
contributions. Participants are immediately vested in the value of their
contributions. Participants are vested in Company contributions ratably over
five years of service and fully vest after five years of service.
Realized and unrealized appreciation (depreciation) and market value changes of
investments and investment income of the Plan are allocated on a pro-rata basis
to the accounts of participants on a daily basis.
Distributions to terminated participants generally commence at age 60 or earlier
in cases of death or disability. The form of payment is designated by the
participant. Earlier distributions of vested benefits may be made for
participants who leave the Company prior to retirement if approved by the plan
administrator. Under certain conditions, as indicated in Section 9.1 of the plan
agreement, the plan administrator
<PAGE> 15
may permit participants to withdraw a portion of their Company contribution
and/or participant deferral contribution.
Participant Loans
- -----------------
Participants may borrow from their fund accounts a maximum equal to the lesser
of $50,000 or 50 percent of their account balance. Loan transactions are treated
as a transfer to (from) the investment fund (to) the Participant Loans fund.
Loan terms range from one to five years or up to twenty-five years for the
purchase of a primary residence. The loans are secured by the balance in the
participant's account and bear interest at a rate commensurate with local
prevailing rates as determined quarterly by the Plan administrator. Interest
rates are at prime plus one percent. Principal and interest are paid ratably
through monthly payroll deductions.
Plan Termination
- ----------------
The Plan is administered by the Company acting through its Board of Directors.
Although it has not expressed any intent to do so, the Company may amend or
terminate the Plan at its discretion, subject to applicable Internal Revenue
Service and ERISA regulations. The rights of all participants to benefits
accrued prior to any such termination are nonforfeitable.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
------------------------------------------
Basis of Accounting
- -------------------
The accompanying financial statements are prepared on the accrual basis of
accounting.
Use of Estimates
- ----------------
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 during the reporting period.
Actual results could differ from those estimates.
Contributions
- -------------
Contributions due from the Company are accrued as of the end of the fiscal year.
There was no employee or employer contribution accrual as of June 30, 1996.
Administrative Expenses
- -----------------------
Fees of the Trustee, legal counsel and auditors of the Plan are paid by the
Company and thus are not reflected in the accompanying financial statements.
Costs specific to various transactions are paid directly by the Plan and are
reflected in the accompanying statement of changes in participants' equity for
the periods presented.
Investments
- -----------
The accompanying statements of participants' equity reflect investments at their
fair market values as of June 30, 1996 and 1995. The Plan's trustee maintains
all records of investment transactions and determines the valuation of the
investment portfolio. Information with respect to: (1) investments held and
their market values as presented
<PAGE> 16
in the statements of participants' equity and (2) unrealized appreciation and
depreciation as presented in the statements of changes in participants' equity
has been certified by the Plan's trustee as being complete and accurate.
The records of the Plan's trustee (CIGNA) are based solely on market value.
Accordingly, no historical cost basis information is available and is not
disclosed in the schedules of assets held for investment purposes (Schedule I)
and reportable transactions (Schedule II).
3. AMOUNTS DUE TO TERMINATED PARTICIPANTS:
--------------------------------------
Participants' equity includes $21,632 of amounts due to terminated participants
at June 30, 1996. These amounts are recorded as a liability in the Plan's Form
5500; however, these amounts are not recorded as a liability in the accompanying
statements of participants' equity in accordance with generally accepted
accounting principles.
The following table reconciles participants' equity per the accompanying
financial statements to the Form 5500 as filed by the Company for the year ended
June 30, 1996:
<TABLE>
<CAPTION>
Benefits Participants' Participants'
Payable to Benefits Equity Equity
Participants Paid June 30, 1996 June 30, 1995
------------ -------- ------------- -------------
<S> <C> <C> <C> <C>
Per financial
statements $ -- $ 271,847 $ 3,037,639 $ 1.498,222
Accrued benefit
payments 21,632 21,632 (21,632) --
Prior year
reversal -- (40,109) -- (40,109)
----------- ----------- ----------- -----------
Per Form 5500 $ 21,632 $ 253,370 $ 3,016,007 $ 1,458,113
=========== =========== =========== ===========
</TABLE>
4. FEDERAL INCOME TAXES:
--------------------
The Plan obtained its latest determination letter on November 21, 1996, in which
the Internal Revenue Service stated that the Plan, as amended and restated was
in compliance with the applicable requirements of the Code.
The plan administrator believes that the Plan is currently designed and being
operated in compliance with the applicable requirements of the Code and that the
Plan was qualified and the related trust was tax exempt as of June 30, 1996.
Accordingly, income taxes have not been provided in the accompanying financial
statements. Annually, informational returns are prepared and filed with the
Internal Revenue Service.
5. PARTY-IN-INTEREST TRANSACTIONS:
------------------------------
There were no prohibited transactions with a party in interest, as defined by
ERISA.
6. REPORTABLE TRANSACTIONS:
-----------------------
Schedule II summarizes the Plan's reportable transactions for the year ended
June 30, 1996. As defined, a reportable transaction is a transaction or
accumulation of transactions in one security in amounts in excess of 5% of the
fair value of the Plan's assets at the beginning of the plan year.
<PAGE> 17
SCHEDULE I
WAXMAN INDUSTRIES, INC.
-----------------------
PROFIT SHARING AND 401(K) RETIREMENT PLAN
-----------------------------------------
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
----------------------------------------------------------
JUNE 30, 1996
-------------
EMPLOYER IDENTIFICATION NUMBER: 34-0899894
------------------------------- ----------
PLAN NUMBER: 001
-----------------
<TABLE>
<CAPTION>
MARKET VALUE (a)
------------
<S> <C>
313,933 Shares of Waxman Industries, Inc.
Common Stock $1,412,700
2,534 Units of Fidelity Contrafund 111,018
4,896 Units of Fidelity Income
& Growth Fund 100,060
18,642 Units of Guaranteed CIGNA
Fund 526,730
1,509 Units of INVESCO Industrial Fund 23,177
3,464 Units of Lifetime 20 Fund 46,824
9,756 Units of Lifetime 30 Fund 130,001
13,389 Units of Lifetime 40 Fund 173,182
11,027 Units of Lifetime 50 Fund 140,283
650 Units of Lifetime 60 Fund 7,744
2,843 Units of 20th Century Ultra
Fund 85,603
6,755 Units of Warburg Pincus
Growth & Income Fund 111,730
5,244 Units of Warburg Pincus International
Equity Fund 120,263
Cash Account 42,955
Participant Loans 5,369
----------
$3,037,639
==========
<FN>
(a) The Plan has requested historical cost information related to the above
investments, however, this information has not been provided because of the
nature of the trustee's recordkeeping system.
</TABLE>
The accompanying notes to financial statements are an integral part of this
schedule.
<PAGE> 18
SCHEDULE II
WAXMAN INDUSTRIES, INC.
-----------------------
PROFIT SHARING AND 401(K) RETIREMENT PLAN
-----------------------------------------
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
----------------------------------------------
FOR THE YEAR ENDED JUNE 30, 1996
--------------------------------
EMPLOYER IDENTIFICATION NUMBER: 34-0899894
-------------------------------------------
PLAN NUMBER: 001
-----------------
<TABLE>
<CAPTION>
PURCHASE SELLING HISTORIC GAIN/
PRICE PRICE COST (LOSS)
-------- ------- --------- -------
<S> <C> <C> <C> <C>
Purchases -
Guaranteed CIGNA
Fund $181,266 - $181,266 $ -
Lifetime 30 Fund 59,306 - 59,306 -
Warburg Pincus Growth & Income Fund 56,444 - 56,444 -
Warburg Pincus International
Equity Fund 54,378 - 54,378 -
Waxman Industries, Inc. Common
Stock 28,690 - 28,690 -
Sales -
Guaranteed CIGNA Fund $ - $90,491 (a) $ (a)
Lifetime 30 Fund - 27,255 (a) (a)
Warburg Pincus Growth & Income Fund - 38,246 (a) (a)
Warburg Pincus International
Equity Fund - 35,146 (a) (a)
Waxman Industries, Inc. Common
Stock - 76,433 (a) (a)
<FN>
(a) The Plan has requested historical cost information related to the above
investments, however, this information has not been provided because of the
nature of the trustee's recordkeeping system.
</TABLE>
The accompanying notes to financial statements are an integral part of this
schedule.
<PAGE> 19
[ARTHUR ANDERSEN LOGO]
Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our report included in this Form 11-K into the Company's previously filed
Form S-8 Registration Statement No. 33-57477.
/s/ Arthur Andersen LLP.
Cleveland, Ohio
December 20, 1996.
