<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One):
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1996.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from ______________ to ______________.
Commission file number 1-1363
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
EnviroSource, Inc. Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
EnviroSource, Inc.
1155 Business Center Drive
Horsham, Pennsylvania 19044-3454
<PAGE>
EnviroSource, Inc. Savings Plan
Financial Statements and Supplemental Schedules
Years ended December 31, 1996 and 1995
CONTENTS
--------
Report of Independent Auditors. . . . . . . . . . . . . . . . . . . . . 1
Audited Financial Statements
Statement of Assets Available for Benefits,
With Fund Information as of December 31, 1996 . . . . . . . . . 2
Statement of Assets Available for Benefits,
With Fund Information as of December 31, 1995 . . . . . . . . . 3
Statement of Changes in Assets Available for Benefits,
With Fund Information - Year ended December 31, 1996. . . . . 4
Statement of Changes in Assets Available for Benefits,
With Fund Information - Year ended December 31, 1995. . . . . 5
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . 6
Supplemental Schedules
Schedule of Assets Held for Investment Purposes . . . . . . . . . . . . 10
Schedule of Reportable Transactions. . . . . . . . . . . . . . . . . 11
<PAGE>
Supplemental Schedules
<PAGE>
Report of Independent Auditors
The Savings Plan Administrative Committee
EnviroSource, Inc.
We have audited the accompanying statements of assets available for benefits of
the EnviroSource, Inc. Savings Plan as of December 31, 1996 and 1995, and the
related statements of changes in assets available for 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 assets available for benefits of the Plan at December
31, 1996 and 1995, and the changes in its assets available for benefits for the
years then ended, in conformity with generally accepted accounting principles.
Our audits were performed 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, 1996, and reportable
transactions for the year then ended, are presented for purposes of complying
with the Department of Labor's Rules 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 Fund Information in the
statement of assets available for benefits and the statement of changes in
assets available for benefits is presented for purposes of additional analysis
rather than to present the assets available for benefits and changes in assets
available for benefits of each fund. The supplemental schedules and fund
information have been subjected to the auditing procedures applied in our audits
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
May 22, 1997
<PAGE>
<TABLE>
<CAPTION>
ENVIROSOURCE, INC. SAVINGS PLAN
STATEMENT OF ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1996
VANGUARD BOND INDEX VANGUARD VANGUARD ENVIROSOURCE,
MONEY MARKET TOTAL BOND WELLESLEY WINDSOR INC. COMMON PARTICIPANT
PRIME FUND MARKET FUND INCOME FUND FUND STOCK FUND LOANS TOTAL
----------------------------------------------------------------------------------------------------
ASSETS
- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair value $ 3,936,479 $ 517,028 $ 2,521,673 $ 9,624,238 $ 1,616,835 $ 753,849 $ 18,970,102
Cash and cash equivalents 30,097 2,480 12,818 24,174 36,830 - 106,399
Receivables:
Participants' contributions 1,395 647 2,692 6,868 3,938 - 15,540
Employer contributions 597 244 1,038 2,672 3,230 - 7,781
Accrued income - - 101,635 - - - 101,635
-------------------------------------------------------------------------------------------------
Total receivables 1,992 891 105,365 9,540 7,168 - 124,956
-------------------------------------------------------------------------------------------------
Assets available for benefits $ 3,968,568 $ 520,399 $ 2,639,856 $ 9,657,952 $ 1,660,833 $ 753,849 $ 19,201,457
=========== ========= =========== =========== =========== ========= ============
</TABLE>
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
ENVIROSOURCE, INC. SAVINGS PLAN
STATEMENT OF ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1995
VANGUARD BOND INDEX VANGUARD VANGUARD ENVIROSOURCE,
MONEY MARKET TOTAL BOND WELLESLEY WINDSOR INC. COMMON PARTICIPANT
PRIME FUND MARKET FUND INCOME FUND FUND STOCK FUND LOANS TOTAL
--------------------------------------------------------------------------------------------------------
ASSETS
- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Investments, at fair value $ 3,755,565 $ 538,656 $ 2,344,388 $ 7,378,917 $ 1,780,543 $ 714,222 $ 16,512,291
Receivables:
Participants' contributions 10,562 2,905 11,394 27,710 11,626 - 64,197
Employer contributions 1,899 1,141 4,730 10,870 8,522 - 27,162
Other 4,574 348 1,887 6,844 966 - 14,619
Total receivables 17,035 4,394 18,011 45,424 21,114 - 105,978
Assets available for benefits $ 3,772,600 $ 543,050 $ 2,362,399 $ 7,424,341 $ 1,801,657 $ 714,222 $ 16,618,269
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENVIROSOURCE, INC. SAVINGS PLAN
STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
YEAR ENDED DECEMBER 31, 1996
VANGUARD VANGUARD
MONEY BOND INDEX VANGUARD VANGUARD ENVIROSOURCE,
MARKET PRIME TOTAL BOND WELLESLEY WINDSOR INC. COMMON PARTICIPANT
FUND MARKET FUND INCOME FUND FUND STOCK FUND LOANS TOTAL
------------------------------------------------------------------------------------------------
Additions:
Contributions:
<S> <C> <C> <C> <C> <C> <C> <C>
Participants $ 254,999 $ 57,903 $ 236,915 $ 544,855 $ 300,448 $ - $ 1,395,120
Employer 105,952 22,316 89,060 202,991 250,129 - 670,448
-------------------------------------------------------------------------------------------------
Total contributions 360,951 80,219 325,975 747,846 550,577 - 2,065,568
Investment income (loss):
Interest - - - - - 60,177 60,177
Dividends 202,202 29,945 150,111 920,967 - - 1,303,225
Net realized and unrealized
(depreciation) appreciation
in fair value of investments - (16,167) 75,567 1,066,248 (191,312) - 934,336
Total investment income (loss) 202,202 13,778 225,678 1,987,215 (191,312) 60,177 2,297,738
Transfer of participants'
assets from other plans - 19,995 933 61,672 2,709 - 85,309
-------------------------------------------------------------------------------------------------
Total additions 563,153 113,992 552,586 2,796,733 361,974 60,177 4,448,615
Deductions:
Participant withdrawals (464,735) (157,912) (421,655) (572,027) (213,354) (35,744) (1,865,427)
--------------------------------------------------------------------------------------------------
Net increase (decrease) prior
to interfund transfers 98,418 (43,920) 130,931 2,224,706 148,620 24,433 2,583,188
Interfund transfers, net 97,550 21,269 146,526 8,905 (289,444) 15,194 -
--------------------------------------------------------------------------------------------------
Net increase (decrease) in
assets available for benefits 195,968 (22,651) 277,457 2,233,611 (140,824) 39,627 2,583,188
Assets available for benefits
at beginning of year 3,772,600 543,050 2,362,399 7,424,341 1,801,657 714,222 16,618,269
---------------------------------------------------------------------------------------------------
Assets available for benefits
at end of year $3,968,568 $ 520,399 $2,639,856 $9,657,952 $1,660,833 $ 753,849 $19,201,457
========== ========= ========== ========== ========== ========= ===========
See accompanying notes.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENVIROSOURCE, INC. SAVINGS PLAN
STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
YEAR ENDED DECEMBER 31, 1995
VANGUARD VANGUARD
MONEY BOND INDEX VANGUARD VANGUARD ENVIROSOURCE,
MARKET PRIME TOTAL BOND WELLESLEY WINDSOR INC. COMMON PARTICIPANT
FUND MARKET FUND INCOME FUND FUND STOCK FUND LOANS TOTAL
------------------------------------------------------------------------------------------------
Additions:
Contributions:
<S> <C> <C> <C> <C> <C> <C> <C>
Participants $ 295,354 $ 67,913 $ 235,679 $ 506,895 $ 337,497 $ - $ 1,443,338
Employer 117,382 25,318 90,801 191,296 266,290 - 691,087
---------------------------------------------------------------------------------------------
Total contributions 412,736 93,231 326,480 698,191 603,787 - 2,134,425
Investment income (loss):
Interest - - - - - 60,031 60,031
Dividends 254,726 35,929 154,805 834,490 60 - 1,280,010
Net realized and unrealized
appreciation (depreciation)
in fair value investments - 53,796 375,038 869,605 (228,058) - 1,070,381
---------------------------------------------------------------------------------------------
Total investment income(loss) 254,726 89,725 529,843 1,704,095 (227,998) 60,031 2,410,422
Transfer of participants' assets
from other plans 11,914 - 29,072 7,073 1,116 - 49,175
---------------------------------------------------------------------------------------------
Total additions 679,376 182,956 885,395 2,409,359 376,905 60,031 4,594,022
Deductions:
Participant withdrawals (993,422) (132,662) (524,486) (1,079,781) (269,134) (44,552) (3,044,037)
----------------------------------------------------------------------------------------------
Net increase (decrease) prior
to interfund transfers (314,046) 50,294 360,909 1,329,578 107,771 15,479 1,549,985
Interfund transfers, net (86,220) (40,059) 7,117 111,574 (10,224) 17,812 -
---------------------------------------------------------------------------------------------
Net increase (decrease) in
assets available for benefits (400,266) 10,235 368,026 1,441,152 97,547 33,291 1,549,985
Assets available for benefits
at beginning of year 4,172,866 532,815 1,994,373 5,983,189 1,704,110 680,931 15,068,284
-----------------------------------------------------------------------------------------------
Assets available for benefits
at end of year $3,772,600 $ 543,050 $2,362,399 $7,424,341 $1,801,657 $ 714,222 $16,618,269
========== ========= ========== ========== ========== ========= ===========
See accompanying notes.
</TABLE>
<PAGE>
ENVIROSOURCE, INC. SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
1. DESCRIPTION OF THE PLAN
- --------------------------
The following is a general description of the EnviroSource, Inc. Savings Plan
(the Plan). Participants should refer to the Plan document for a more complete
description of its provisions.
GENERAL
- -------
The Plan is a defined contribution plan available to all salaried and certain
nonunion hourly employees of EnviroSource, Inc. (the Company) who have completed
one year of service, as defined by the Plan document. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
CONTRIBUTIONS
- -------------
Participants may make tax-deferred contributions ranging from 2% to 6% of their
base salaries, with the employer contributing a matching amount equal to 50%
(100% if the contributions are invested in the EnviroSource, Inc. common stock
fund) of such contributions subject to certain limitations. Participants may
make additional tax-deferred contributions ranging from 1% to 6% of their base
salaries without further contributions by the participating employers up to the
annual limit prescribed by the Internal Revenue Code. Participants may also make
additional contributions to the Plan, subject to certain limitations, which are
not tax deferred.
VESTING
- -------
Participants have a nonforfeitable interest in 100% of their contributions.
Generally, participants become 20% vested in the matching contributions made by
the employer for each year of qualifying service. In addition, participants
become 100% vested upon reaching age 65, death or disability, termination of the
Plan, or discontinuance of matching contributions by the employer. Forfeitures
of matching account balances, by participants not fully vested at their
termination, are used to fund benefits required to be restored for formerly
terminated participants and the excess, if any, is used to reduce the employe's
obligation to make matching contributions.
<PAGE>
1. DESCRIPTION OF THE PLAN (CONTINUED)
- --------------------------------------
PAYMENT OF BENEFITS
- -------------------
Upon termination of employment, participants receive lump-sum distributions
unless they elect to receive annual benefits over a ten-year period.
Participants with account balances less than $3,500 receive lump-sum
distributions only.
PARTICIPANT LOANS
- -----------------
A qualified participant may request a loan once in any 12-month period, subject
to the approval of the Plan's Administrative Committee. The total amount of
loans outstanding at any time for a participant may not exceed the lesser of 50%
of the vested balance in the participant's account or $50,000. The loans are
payable over a period of up to five years and bear interest at market rates
prevailing when the loans are made.
INVESTMENT OPTIONS
- ------------------
Participants may direct employer and employee contributions into any of four
Vanguard mutual funds or into the EnviroSource, Inc. common stock fund.
ADMINISTRATIVE EXPENSEs
- -----------------------
Administrative expenses incurred by the Plan are paid by the Company.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------
INVESTMENT VALUATION
- --------------------
Investments in mutual funds are stated at the quoted net asset values of the
respective funds. Investments in EnviroSource, Inc. common stock are stated at
the quoted market price of the stock.
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
- ---------------------------------------------------------
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 amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
RECLASSIFICATION
- ----------------
Certain amounts in the prior year financial statements have been reclassified to
conform with current year presentation.
3. INVESTMENTS
- --------------
Plan investments are held by a bank administered trust fund. The following
reflects the fair value of investments at December 31, 1996 and 1995.
<TABLE>
<CAPTION>
1996 1995
----------------------- ----------------------
SHARES FAIR VALUE SHARES FAIR VALUE
----------------------- ----------------------
INVESTMENTS
- -----------
<S> <C> <C> <C> <C>
Vanguard Money Market Prime Fund* 3,936,479 $ 3,936,479 3,755,565 $ 3,755,565
Vanguard Bond Index Total Bond
Market Fund 52,544 517,028 53,039 538,656
Vanguard Wellesley Income Fund* 122,949 2,521,673 114,643 2,344,388
Vanguard Windsor Fund* 580,123 9,624,238 507,636 7,378,917
--------- ---------
Total mutual funds 16,599,418 14,017,526
EnviroSource Inc., Common Stock Fund* 601,501 1,616,835 587,533 1,780,543
Participant loans 753,849 714,222
---------- ----------
Total investments $18,970,102 $16,512,291
=========== ===========
</TABLE>
*Represents 5% or more of plan assets available for benefits at the end of the
year.
<PAGE>
4. PLAN TERMINATION
- -------------------
Although the Company has not expressed any intent to terminate the Plan, it may
do so at any time. In the event the Plan is terminated, participants become
fully vested in their accounts and such amounts will be distributed to them as
described in the Plan.
5. INCOME TAX STATUS
- --------------------
The Internal Revenue Service has ruled that the Plan qualifies under Section
401(a) of the Internal Revenue Code (IRC) and, therefore, the related trust is
not subject to tax under present income tax law. Once qualified, the Plan is
required to operate in conformity with the IRC to maintain its qualification.
The Plan's Administrative Committee is not aware of any course of action or
series of events that have occurred that might adversely affect the Plan's
qualified status.
<PAGE>
<TABLE>
<CAPTION>
ENVIROSOURCE, INC. SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
Identity of Issue Investment Cost Fair Value
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Vanguard Money Market Prime Fund 3,936,479 shares $ 3,936,479 $ 3,936,479
Vanguard Bond Index Total Bond
Market Fund 52,544 shares 511,875 517,028
Vanguard Wellesley Income Fund 122,949 shares 2,309,425 2,521,673
Vanguard Windsor Fund 580,123 shares 8,204,333 9,624,238
EnviroSource, Inc.* Common
Stock Fund 601,501 shares 2,111,559 1,616,835
Participant loans Interest rates
ranging from 7.6%
to 12.0% - 753,849
---------------------------
$17,073,671 $18,970,102
=========== ===========
*Indicates party-in-interest to the Plan.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ENVIROSOURCE, INC. SAVINGS PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1996
PURCHASE SELLING NET GAIN
DESCRIPTION OF ASSETS PRICE (A) PRICE (A) COST (LOSS)
- -----------------------------------------------------------------------------------------
Category (iii) - Series of transactions in excess of 5% of plan assets
- ----------------------------------------------------------------------
Vanguard Money Market Prime Fund
<S> <C> <C> <C> <C>
132 Purchases $1,140,810 $ - $1,140,810 $ -
48 Sales
- 895,893 895,893 -
Vanguard Wellesley Income Fund
123 Purchases 704,720 - 704,720 -
44 Sales - 573,572 527,443 46,129
Vanguard Windsor Fund
133 Purchases 2,214,326 - 2,214,326 -
43 Sales - 1,060,219 917,353 142,866
EnviroSource, Inc.* Common Stock Fund
126 Purchases 691,485 - 691,485 -
42 Sales - 478,933 483,134 (4,201)
*Party-in-interest (not a "prohibited transaction").
(A) Purchase and selling prices are equal to current (fair value) on trade dates.
There were no Category (i), (ii), or (iv) reportable transactions during the year
ended December 31, 1996.
</TABLE>
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employees' benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: June 23, 1997
ENVIROSOURCE SAVINGS PLAN
By:/s/James C. Hull
----------------
James C. Hull
Member of the EnviroSource, Inc.
Savings Plan Administrative
Committee
<PAGE>
EXHIBIT INDEX
Number Exhibit Page
------ ------- ----
23.1 Consent of Independent Auditors EX-23.1
<PAGE>
Consent of Independent Auditors
We consent to the incorporation by reference in Post-Effective Amendment No. 1
to the Registration Statement (Form S-8 No. 33-34566) pertaining to the
EnviroSource, Inc. Savings Plan and in the related Prospectus of our report
dated May 22, 1997, with respect to the financial statements and schedules of
the EnviroSource, Inc. Savings Plan included in the Annual Report (Form 11-K)
for the year ended December 31, 1997.
/s/ ERNST & YOUNG LLP
June 23, 1997
