<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, 1999
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:
Amended and Restated Waxman Industries, Inc.
Profit Sharing & 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
AMENDED AND RESTATED WAXMAN INDUSTRIES, INC.
PROFIT SHARING & 401(K) RETIREMENT PLAN
FINANCIAL STATEMENTS
AS OF JUNE 30, 1999 AND 1998
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 net assets available for plan
benefits of the Amended and Restated Waxman Industries, Inc. Profit Sharing &
401(K) Retirement Plan (the Plan) as of June 30, 1999 and 1998, and the related
statement of changes in net assets available for plan benefits for the year
ended June 30, 1999, as listed in the accompanying index. These financial
statements and the schedules referred to below are the responsibility of the
Plan's management. 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 the
Plan's 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 as of June 30,
1999 and 1998, and the changes in net assets available for plan benefits for the
year ended June 30, 1999, 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 as of June 30, 1999 (Schedule I) and reportable
transactions for the year ended June 30, 1999 (Schedule II), are presented for
purposes of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor 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.
As explained in Note 5, information certified by the custodian and presented in
Item 27a - Schedule of Assets Held for Investment Purposes (Schedule I) and Item
27d - Schedule of Reportable Transactions (Schedule II) does not disclose the
historical cost of certain investments. Disclosure of this information is
required by the Department of Labor Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974.
<PAGE> 4
/s/ ARTHUR ANDERSEN LLP
Cleveland, Ohio,
December 1, 1999.
<PAGE> 5
AMENDED AND RESTATED WAXMAN INDUSTRIES, INC.
PROFIT SHARING & 401(K) RETIREMENT PLAN
INDEX
JUNE 30, 1999 AND 1998
Statements of Net Assets Available for Plan Benefits as of June 30, 1999 and
1998
Statement of Changes in Net Assets Available for Plan Benefits for the Year
Ended June 30, 1999
Notes to Financial Statements
Consent of Arthur Andersen LLP - Exhibit 23
Schedule I - Item 27a - Schedule of Assets Held for Investment Purposes as of
June 30, 1999
Schedule II - Item 27d - Schedule of Reportable Transactions for the Year Ended
June 30, 1999
<PAGE> 6
<TABLE>
AMENDED AND RESTATED WAXMAN INDUSTRIES, INC.
PROFIT SHARING & 401(K) RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
<CAPTION>
AS OF AS OF
JUNE 30, 1999 JUNE 30, 1998
------------- -------------
<S> <C> <C>
Assets:
Investments $1,784,269 $2,621,911
Participant Loans 30,199 49,053
---------- ----------
Net assets available for plan benefits $1,814,468 $2,670,964
========== ==========
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
<PAGE> 7
<TABLE>
AMENDED AND RESTATED WAXMAN INDUSTRIES, INC.
PROFIT SHARING & 401(K) RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
<CAPTION>
YEAR ENDED
JUNE 30, 1999
-------------
<S> <C>
Additions:
Additions to net assets attributed to:
Investment income:
Interest 18,596
----------
18,596
----------
Contributions:
Participant 357,761
Employer 119,195
Rollover 23,982
----------
500,938
----------
Total additions 519,534
----------
Deductions:
Transfer to Barnett Plan 405,354
Deductions from net assets attributed to:
Net depreciation in fair value
of investments 475,887
Benefits paid to participants 494,175
Administrative expenses 614
----------
Total deductions 1,376,030
----------
Net increase/(decrease) (856,496)
Net assets available for plan benefits:
Beginning of year 2,670,964
----------
End of year $1,814,468
==========
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
<PAGE> 8
AMENDED AND RESTATED WAXMAN INDUSTRIES, INC.
PROFIT SHARING & 401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 AND 1998
1. SUMMARY OF PLAN:
- ---------------------
The following description of the Amended and Restated Waxman Industries, Inc.
(the Company) Profit Sharing & 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 profit sharing plan. It is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
Trustee and Custodian
- ---------------------
Effective July 1, 1997, the trustee and the custodian of the Plan were changed
from Connecticut General Trust Co. and Connecticut General Life Insurance
Company (CIGNA), respectively, to a committee designated by Waxman Industries,
Inc. and Aetna Life Insurance and Annuity Company (Aetna), respectively. The
Plan's custodian maintains all records of investment transactions and determines
the valuation of the investment portfolio.
Eligibility
- -----------
Certain employees of the Company and its subsidiaries are eligible to
participate in the Plan provided they are at least 21 years of age and have
completed three months of service with the Company, as defined in the plan
agreement.
Effective January 1, 1999, the employees of U.S. Lock Corporation, a previous
indirect subsidiary of the Company, were considered terminated employees of the
Company for purposes of participation in the Plan, as U.S. Lock Corporation was
sold to Barnett Inc. Effective July 1, 1997, the employees of Barnett Inc., a
previous subsidiary and current affiliate of the Company, were considered
terminated employees of the Company for purposes of participation in the Plan.
As of the above respective dates, these employees became eligible to participate
in the Barnett Inc. Profit Sharing and 401(k) Retirement Plan. The Plan
participants that were considered to be terminated employees of the Company
became fully vested in their participant accounts as of the above respective
dates, and these accounts were transferred to the Barnett Inc.
Profit Sharing and 401(k) Retirement Plan.
<PAGE> 9
Participant and Employer Contributions
- --------------------------------------
Participants may defer up to 15% of their pretax compensation by making
contributions to the Plan, subject to certain limitations. Participants may
direct the allocation of their post-September 1994 contributions to various
investment options. Participants have the option to transfer cumulative
balances, except those relating to prior Company contributions, between
investment options.
The Company may make discretionary matching contributions to the Plan.
Currently, the match is $.50 per every $1.00 contributed by the participant,
with the maximum Company match being 4% of the participant's annual
compensation, as defined in the plan agreement. The amount of the Company
contributions made to the Plan is limited by the Internal Revenue Code and is
determined at the discretion of the Board of Directors of the Company. Company
contributions are allocated to the accounts of eligible participants, on a
monthly basis, as established in Section 3.01 of the Plan.
Participant Accounts and Vesting
- --------------------------------
The Plan provides for the establishment and maintenance of several accounts for
each participant which represent, in total, the participant's equity in the net
assets of the Plan. The individual participant accounts distinguish funds
attributable to participant deferral contributions and Company contributions
made on the participant's behalf. Participant accounts are credited with the
participant's allocation of investment earnings and are charged with the
participant's allocation of transaction costs. Allocations are based on the
ratio of the participant's balance in the fund to the total fund balance.
Participants are immediately vested in the value of their contributions plus
earnings thereon. Participants vest in Company contributions plus earnings
thereon ratably over five years of service and are fully vested after five years
of service, as defined.
Distribution of Benefits
- ------------------------
Distributions to 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.
Participant Loans
- -----------------
Participants may borrow from their accounts a maximum amount equal to the lesser
of $50,000 or 50 percent of their vested account balance. Loan terms range from
one to five years or up to twenty-five years for the purchase of a primary
residence. 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's administrator, plus one percent. Interest rates on loans
outstanding as of June 30, 1999 are between 8.5% and 9.5%. Principal and
interest payments on participant loans are paid ratably through monthly payroll
deductions.
<PAGE> 10
Forfeitures
- -----------
Forfeitures are used to reduce the contributions of the Company or to pay the
administrative expenses of the Plan, at the Company's discretion. In the current
year, forfeitures amounted to $15,994.
Plan Termination
- ----------------
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.
Investment Options
- ------------------
Investment options as of June 30, 1999 include the following:
AETNA FIXED ACCOUNT
Aetna Fixed Account is invested in interest-bearing contracts or other
arrangements issued by life insurance companies or other financial
institutions.
AETNA SERIES MONEY MARKET FUND
Aetna Series Money Market Fund is invested in high-quality money market
instruments.
AETNA ASCENT FUND
Aetna Ascent Fund is invested primarily in equity securities with some
fixed-income securities with the objective of capital appreciation.
AETNA CROSSROADS FUND
Aetna Crossroads Fund is invested primarily in equity securities with some
fixed-income securities with the objective of income and capital appreciation
(realized and unrealized).
AETNA LEGACY FUND
Aetna Legacy Fund is invested primarily in fixed-income securities with some
equity securities with the objective of providing a consistent return with
preservation of capital.
AETNA INDEX PLUS LARGE CAP FUND
Aetna Index Plus Large Cap Fund is invested in large cap equity securities with
the objective of outperforming the S&P 500.
<PAGE> 11
FIDELITY ADVISOR GROWTH OPPORTUNITIES FUND
Fidelity Advisor Growth Opportunities Fund is invested primarily in common
stocks and securities convertible into common stocks.
NEUBERGER & BERMAN GENESIS TRUST
Neuberger & Berman Genesis Trust is invested primarily in common stocks of
companies with small market capitalizations with the objective of capital
appreciation.
NEUBERGER & BERMAN GUARDIAN TRUST
Neuberger & Berman Guardian Trust is invested primarily in common stocks of
long-established, high-quality companies.
NEUBERGER & BERMAN FOCUS TRUST
Neuberger & Berman Focus Trust is invested primarily in value-oriented common
stocks, selected from 13 multi-industry sectors of the economy, with no more
than 6 sectors selected which are believed to be undervalued.
TEMPLETON FOREIGN FUND
Templeton Foreign Fund is invested primarily in equity securities and debt
obligations of companies and governments located outside the United States
with the objective of long-term capital growth.
AMERICAN CENTURY-TWENTIETH CENTURY INTERNATIONAL GROWTH FUND
American Century-Twentieth Century International Growth Fund is invested
primarily in securities of foreign companies located in developed markets
that are experiencing acceleration of earnings and revenues.
JANUS FLEXIBLE INCOME FUND
Janus Flexible Income Fund is invested primarily in a wide variety of income-
producing securities such as corporate bonds and notes, government
securities, preferred stocks, income-producing common stocks and debt
securities that are convertible or exchangeable into equity securities.
WAXMAN INDUSTRIES, INC. COMMON STOCK
Waxman Industries, Inc. Common Stock is invested only in common stock of the
Company.
<PAGE> 12
The following investment options make up 5% or greater of the total net assets
available for plan benefits as of June 30, 1999:
<TABLE>
<S> <C>
Aetna Fixed Account $230,233
Aetna Ascent Fund $187,004
Aetna Crossroads Fund $229,356
Aetna Index Plus Large Cap Fund $311,881
Fidelity Advisor Growth Opportunities Fund $255,944
Neuberger & Berman Genesis Trust $126,007
Neuberger & Berman Guardian Trust $ 91,109
Templeton Foreign Fund $151,103
Waxman Industries, Inc. Common Stock $ 96,057
</TABLE>
During the year ended June 30, 1999, the Plan's investment options appreciated
(depreciated) in value, including interest earnings, as follows:
<TABLE>
<S> <C>
Aetna Fixed Account $ 15,305
Aetna Series Money Market Fund 3,285
Aetna Ascent Fund 4,332
Aetna Crossroads Fund (1,652)
Aetna Legacy Fund 483
Aetna Index Plus Large Cap Fund 96,136
Fidelity Advisor Growth Opportunities Fund 49,717
Neuberger & Berman Genesis Trust (11,724)
Neuberger & Berman Guardian Trust 6,516
Neuberger & Berman Focus Trust 1,239
Templeton Foreign Fund 21,009
American Century-Twentieth Century
International Growth Fund 140
Janus Flexible Income Fund 140
Waxman Industries, Inc. Common Stock (645,509)
---------
$(460,583)
=========
</TABLE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
- ------------------------------------------------
Basis of Accounting
- -------------------
The accompanying financial statements are prepared on the accrual basis of
accounting.
Early Adoption of New Authoritative Literature
- ----------------------------------------------
The Accounting Standards Executive Committee issued Statement of Position
(SOP)99-3, "Accounting for and Reporting of Certain Defined Contribution Plan
Investments and Other Disclosure Matters," which eliminates the requirement for
a defined contribution plan to disclose participant directed investment
programs. SOP 99-3 was adopted early for the June 30, 1999 financial statements
and as such, the June 30, 1998 financial statements have been reclassified to
eliminate the participant directed investment program disclosures.
<PAGE> 13
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires the Plan's management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of additions and deductions during the
reporting period. Actual results could differ from those estimates.
Administrative Expenses
- -----------------------
Fees of the custodian, 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 investment transactions are paid directly by the Plan
and are reflected in the accompanying statement of changes in net assets
available for plan benefits.
Investments
- -----------
The investments of the Plan are maintained by Aetna. Except for the Aetna Fixed
Account (Note 3), investments are valued at their market values in the
accompanying financial statements. In general, market values are estimated by
Aetna based on market conditions and the characteristics of the funds' holdings,
such as quality ratings, quotations obtained from national securities exchanges,
brokerage houses or other investment authorities. The investment vehicles are
credited with actual earnings on the underlying investments and charged for
distributions and transaction costs on a daily basis. As a result, the records
of Aetna are based solely on the market values of the investments. Therefore,
the accompanying statement of changes in net assets available for plan benefits
does not reflect separate accounting for unrealized appreciation or depreciation
of investments, investment earnings and realized gains or losses. In addition,
Schedules I and II do not include information on the historical costs of the
investments as required by ERISA.
3. INVESTMENT CONTRACTS:
- --------------------------
The Aetna Fixed Account invests in investment contracts that are fully
benefit-responsive. In accordance with the American Institute of Certified
Public Accountants' Statement of Position 94-4, " Reporting of Investment
Contracts Held by Health and Welfare Benefit Plans and Defined Contribution
Pension Plans," the Plan values these investment contracts at contract value. As
of June 30, 1999, the contract value of these investment contracts approximates
fair value. The average yield for the investment contracts was 5.64% for the
period from July 1,1998 to June 30, 1999 and the crediting interest rate as of
June 30, 1999 was 5.60%.
4. INCOME TAX STATUS:
- -----------------------
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 Internal Revenue Code to
qualify for tax exempt status.
The Plan's management believes that the Plan is currently designed and being
operated in compliance with the applicable requirements of the Internal Revenue
Code and that the Plan was qualified and the related trust was tax exempt as of
June 30, 1999. Accordingly, income taxes have not been provided in the
accompanying financial statements. Annually, informational returns are prepared
and filed with the Internal Revenue Service.
<PAGE> 14
5. INFORMATION CERTIFIED BY THE CUSTODIAN:
- --------------------------------------------
Information on investments held and their market/contract values as presented in
the accompanying statements of net assets available for plan benefits and on
interest income and investment depreciation as presented in the accompanying
statement of changes in net assets available for plan benefits has been
certified by the custodian as being accurate and complete.
6. PARTY-IN-INTEREST TRANSACTIONS:
- ------------------------------------
There were no prohibited transactions with a party in interest, as defined by
ERISA.
7. REPORTABLE TRANSACTIONS:
- -----------------------------
Schedule II summarizes the Plan's reportable transactions for the year ended
June 30, 1999. As defined, a reportable transaction is a transaction or series
of transactions in one fund involving amounts in excess of 5% of the market
value of the Plan's assets at the beginning of the plan year.
<PAGE> 15
SCHEDULE I
AMENDED AND RESTATED WAXMAN INDUSTRIES, INC.
PROFIT SHARING & 401(K) RETIREMENT PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
JUNE 30, 1999
EMPLOYER IDENTIFICATION NUMBER: 34-0899894
PLAN NUMBER: 001
<TABLE>
<CAPTION>
MARKET/
IDENTITY OF CONTRACT
ISSUER DESCRIPTION OF INVESTMENT VALUE(a)
- ------------ --------------------------------------------------- -----------
<S> <C> <C>
Waxman 184,324 shares of Waxman Industries, Inc.
Industries:* Common Stock $ 96,057
Aetna: * Aetna Fixed Account 230,233
Aetna Series Money Market Fund 75,036
Aetna Ascent Fund 187,004
Aetna Crossroads Fund 229,356
Aetna Legacy Fund 21,229
Aetna Index Plus Large Cap Fund 311,881
Fidelity Advisor Growth Opportunities Fund 255,944
Neuberger & Berman Genesis Trust 126,007
Neuberger & Berman Guardian Trust 91,109
Neuberger & Berman Focus Trust 9,011
Templeton Foreign Fund 151,103
American Century-Twentieth Century
International Growth Fund 67
Janus Flexible Income Fund 232
Participant
Loans: * Participant Loans (8.5% to 9.5% interest
rates) 30,199
----------
$1,814,468
</TABLE>
(a) The Plan has requested historical cost information related to the above
investments; however, this information has not been provided by the custodian
due to the nature of its recordkeeping system.
* Indicates a party in interest
The accompanying notes to financial statements are an integral part of this
schedule.
<PAGE> 16
SCHEDULE II
AMENDED AND RESTATED WAXMAN INDUSTRIES, INC.
PROFIT SHARING & 401(K) RETIREMENT PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED JUNE 30, 1999
EMPLOYER IDENTIFICATION NUMBER: 34-0899894
PLAN NUMBER: 001
<TABLE>
<CAPTION>
Cost of
Asset/
Current Current
Value of Value of
Asset on Asset on Net
Purchase Trans. Selling Cost of Trans. Gain
Price Date price Asset Date (Loss)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aetna Fixed Account $ 74,704 $ 74,704 $143,179 (a) $143,179 (a)
Aetna Ascent Fund 89,014 89,014 86,061 (a) 86,061 (a)
Aetna Index Plus Large
Cap Fund 118,521 118,521 272,646 (a) 272,646 (a)
Fidelity Advisor
Growth
Opportunities
Fund 103,678 103,678 139,791 (a) 139,791 (a)
Neuberger & Berman
Genesis Trust 69,071 69,071 106,403 (a) 106,403 (a)
</TABLE>
(a) The Plan has requested historical cost information related to the above
investments; however, this information has not been provided by the custodian
due to the nature of its recordkeeping system. As a result, the net gain or loss
cannot be determined.
The accompanying notes to financial statements are an integral part of this
schedule.
<PAGE> 1
ARTHUR ANDERSEN LLP
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 14, 1999.
