<PAGE>
FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
X Annual Report Pursuant to Section 15(d) of the
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Securities Exchange Act of 1934 [Fee Required]
For the Fiscal Year Ended December 31, 1997
___ Transition Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934 [No Fee Required]
Forc the Transition Period From ___________ To __________
Commission File Number 1-5502
ZURN RETIREMENT SAVINGS PLAN
(Full title of the Plan)
ZURN INDUSTRIES, INC.
14801 Quorum Drive, Addison, Texas 75240-7584
(Name and address of issuer of securities held pursuant to the Plan)
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Pension Committee
Zurn Industries, Inc.
Dallas, Texas
We have audited the accompanying statements of net assets available for benefits
of the Zurn Retirement Savings Plan as of December 31, 1997 and 1996, and the
related statements of changes in net assets available for benefits with fund
information 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 benefits of the Zurn
Retirement Savings Plan as of December 31, 1997 and 1996, and the changes in its
net assets available for benefits for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of expressing an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes at December 31, 1997, and loans or fixed income
obligations for the year then ended, are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedules have been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ The Pashke Group
Erie, Pennsylvania
May 21, 1998
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STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
ZURN RETIREMENT SAVINGS PLAN
<TABLE>
<CAPTION>
December 31
1997 1996
----------- -----------
<S> <C> <C>
ASSETS
Investments in T. Rowe Price Funds:
U.S. Treasury Money $ 2,179,526 $ 2,458,129
U.S. Treasury Intermediate 121,312 99,049
New Income 579,789 712,818
Balanced 511,015 355,925
Capital Appreciation 3,378,413 3,294,948
Equity Index 4,683,894 3,534,246
International Stock 627,963 546,469
Small-Cap Stock 1,092,405 588,538
Zurn Stock Fund 638,521 50,718
----------- -----------
13,812,838 11,640,840
Contributions receivable:
Participants' 50,963 31,537
Employers' 9,728
Participants' loans 230,449 258,072
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $14,103,978 $11,930,449
=========== ===========
</TABLE>
See notes to financial statements.
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STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
ZURN RETIREMENT SAVINGS PLAN
Year Ended December 31, 1997
<TABLE>
<CAPTION>
T. Rowe Price Funds
---------------------------------------------------------------
U.S. Treasury
-------------------------- New Capital
Money Intermediate Income Balanced Appreciation
----------- ------------- ---------- -------- -------------
<S> <C> <C> <C> <C> <C>
ADDITIONS
Investment income:
Dividends $ 107,971 $ 6,206 $ 43,016 $ 18,197 $ 417,931
Net appreciation in
value of investments 1,985 11,742 50,645 71,629
---------- -------- --------- -------- ----------
107,971 8,191 54,758 68,842 489,560
Participants' contributions 298,087 31,045 85,374 121,229 341,940
Participants' loan interest 3,391 352 395 481 3,324
---------- -------- --------- -------- ----------
TOTAL ADDITIONS 409,449 39,588 140,527 190,552 834,824
BENEFITS PAID TO PARTICIPANTS 526,127 36,618 146,929 126,029 518,555
---------- -------- --------- -------- ----------
NET ADDITIONS (DEDUCTIONS) (116,678) 2,970 (6,402) 64,523 316,269
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 2,458,129 99,049 712,818 355,925 3,294,948
Transfers (161,925) 19,293 (126,627) 90,567 (232,804)
---------- -------- --------- -------- ----------
End of year $2,179,526 $121,312 $ 579,789 $511,015 $3,378,413
========== ======== ========= ======== ==========
</TABLE>
See notes to financial statements.
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STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS - Continued
ZURN RETIREMENT SAVINGS PLAN
Year Ended December 31, 1997
<TABLE>
<CAPTION>
T. Rowe Price Funds
--------------------------------------- Zurn
Equity International Small-Cap Stock
Index Stock Stock Fund Other Total
---------- ----------- -------------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS
Investment income:
Dividends $ 101,036 $ 33,384 $ 49,282 $ 891 $ 777,914
Net appreciation (depreciation)
in value of investments 1,026,569 (20,229) 151,292 (21,913) 1,271,720
---------- ---------- ---------- -------- -----------
1,127,605 13,155 200,574 (21,022) 2,049,634
Participants' contributions 552,236 139,754 167,294 310,654 $ 19,426 2,067,039
Employers' contributions 239,708 9,728 249,436
Participants' loan interest 3,413 1,080 1,120 135 13,691
---------- ---------- ---------- -------- -------- -----------
TOTAL ADDITIONS 1,683,254 153,989 368,988 529,475 29,154 4,379,800
BENEFITS PAID TO PARTICIPANTS 674,254 69,705 59,040 3,470 45,544 2,206,271
---------- ---------- ---------- -------- -------- -----------
NET ADDITIONS (DEDUCTIONS) 1,009,000 84,284 309,948 526,005 (16,390) 2,173,529
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 3,534,246 546,469 588,538 50,718 289,609 11,930,449
Transfers 140,648 (2,790) 193,919 61,798 17,921
---------- ---------- ---------- -------- -------- -----------
End of year $4,683,894 $ 627,963 $1,092,405 $638,521 $291,140 $14,103,978
========== ========== ========== ======== ======== ===========
</TABLE>
See notes to financial statements.
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<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
ZURN RETIREMENT SAVINGS PLAN
Year Ended December 31, 1996
<TABLE>
<CAPTION>
T. Rowe Price Funds
---------------------------------------------------------------
U.S. Treasury
--------------------------- New Capital
Money Intermediate Income Balanced Appreciation
----------- -------------- --------- -------- -------------
<S> <C> <C> <C> <C> <C>
ADDITIONS
Investment income:
Dividends $ 116,946 $ 5,162 $ 45,589 $ 13,808 $ 309,502
Net appreciation (depreciation)
in value of investments (2,713) (28,403) 24,903 168,524
---------- ------- -------- -------- ----------
116,946 2,449 17,186 38,711 478,026
Participants' contributions 433,845 35,603 147,238 113,200 482,575
Participants' loan interest 3,279 1,304 677 1,983 4,098
---------- ------- -------- -------- ----------
TOTAL ADDITIONS 554,070 39,356 165,101 153,894 964,699
BENEFITS PAID TO PARTICIPANTS 431,483 542 73,789 61,938 348,733
---------- ------- -------- -------- ----------
NET ADDITIONS 122,587 38,814 91,312 91,956 615,966
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 2,608,541 69,515 658,843 223,059 2,871,205
Transfers (272,999) (9,280) (37,337) 40,910 (192,223)
---------- ------- -------- -------- ----------
End of year $2,458,129 $99,049 $712,818 $355,925 $3,294,948
========== ======= ======== ======== ==========
</TABLE>
See notes to financial statements.
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STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS - Continued
ZURN RETIREMENT SAVINGS PLAN
Year Ended December 31, 1996
<TABLE>
<CAPTION>
T. Rowe Price Funds
----------------------------------- Zurn
Equity International Small-Cap Stock
Index Stock Stock Fund Other Total
---------- -------- ------------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS
Investment income:
Dividends $ 119,082 $ 14,639 $ 49,750 $ 674,478
Net appreciation in
value of investments 517,788 54,199 19,899 $ 4,341 758,538
---------- -------- -------- ------- -------- -----------
636,870 68,838 69,649 4,341 1,433,016
Participants' contributions 448,986 129,052 118,209 11,740 $ 7,457 1,927,905
Participants' loan interest 5,833 577 341 18,092
---------- -------- -------- ------- -------- -----------
TOTAL ADDITIONS 1,091,689 198,467 188,199 16,081 7,457 3,379,013
BENEFITS PAID TO PARTICIPANTS 286,908 79,704 13,538 29,943 1,326,578
---------- -------- -------- ------- -------- -----------
NET ADDITIONS (DEDUCTIONS) 804,781 118,763 174,661 16,081 (22,486) 2,052,435
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 2,582,553 424,092 205,270 234,936 9,878,014
Transfers 146,912 3,614 208,607 34,637 77,159
---------- -------- -------- ------- -------- -----------
End of year $3,534,246 $546,469 $588,538 $50,718 $289,609 $11,930,449
========== ======== ======== ======= ======== ===========
</TABLE>
See notes to financial statements.
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NOTES TO FINANCIAL STATEMENTS
ZURN RETIREMENT SAVINGS PLAN
December 31, 1997
PLAN DESCRIPTION
The Zurn Retirement Savings Plan is a defined contribution plan providing
retirement benefits through participant-directed investments to certain
employees of Zurn Industries, Inc. and its subsidiaries. It is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
The Company has agreed to contribute participants' elective deferrals of
eligible compensation plus, effective April 1, 1997, 25% to 100% of such amounts
up to 6% of eligible compensation based on the percentage increase in the
Company's basic earnings per share. Effective April 1, 1998, the Company's
contributions will be 50% of participants' elective deferrals up to 6% of
eligible compensation. Participants also may contribute non-taxed distributions
from other employers' qualified plans and they may borrow from their accounts
subject to specified limitations.
The Company's contributions are required to be invested in the Zurn Stock Fund
until a participant attains age 57 or terminates employment. Contributions on
behalf of those who were participants in the Plan on August 1, 1997 are 100%
vested. Others are 50% vested after one year of service and 100% after three
years.
Effective January 1, 1998, the Zurn/NEPCO Retirement Savings Plan having no
active employee participants and $8,495,525 in net assets available for benefits
was merged into the Plan.
Information about the Plan agreement and the benefit provisions is contained in
the "Summary Plan Description" which may be obtained from Zurn Industries, Inc.,
the Plan Administrator.
SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price Investments The investments are stated at market value as
determined by the funds.
Zurn Stock Fund Zurn Industries, Inc. common stock (1997 - 20,310.797 shares;
1996 - 1,893 shares) is stated at its quoted market value. At December 31,
1996, a percentage of the Fund was invested in the T. Rowe Price Prime Reserve
Fund ($1,076) for investment diversification liquidity. For 1996, dividend
income from these investments is included in investment income as a component of
the net appreciation in the value of investments.
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Investment Transactions Investment transactions are recorded as of the date the
order to buy or sell is executed with realized gains and losses being included
in investment income as a component of the net appreciation (depreciation) in
the value of investments.
Participants' Loans Participants' loans are stated at the principal amount due
from the participants.
Company Contributions Contributions in excess of 25% of participants' elective
deferrals prior to April 1, 1998 are recognized when basic earnings per share
have been determined following the end of the Company's March 31 fiscal year
end. No contributions were forfeited during the year ended December 31, 1997.
Dividends Dividend income is recognized on the ex-dividend date.
Expenses Administrative expenses are paid by the Plan Administrator.
INCOME TAX STATUS
The Internal Revenue Service has ruled that the Plan qualifies under Section
401(a) of the Internal Revenue Code and is, therefore, not subject to tax under
present income tax law. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan Administrator
is not aware of any course of action or series of events that might adversely
affect the Plan's qualified status.
SUBSEQUENT EVENT
On February 16, 1998, the Company entered into an Agreement and Plan of Merger
with U.S. Industries, Inc. and certain of its affiliates which, if approved by
the shareholders of both companies at meetings scheduled for June 11, 1998, will
result through mergers in the companies becoming wholly-owned subsidiaries of a
new company that will change its name to U.S. Industries, Inc. (USI). At the
effective time of the mergers, each share of the Company's common stock will be
converted into the right to receive 1.6 shares of USI common stock upon
surrender of the certificates for the Company's stock.
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SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES - Item 27a
ZURN RETIREMENT SAVINGS PLAN
December 31, 1997
<TABLE>
<CAPTION>
ASSETS OWNED AT YEAR-END
Cost Current Value
---------- -------------
<S> <C> <C>
T. Rowe Price Funds:
U.S. Treasury Money $2,179,526 $2,179,526
U.S. Treasury Intermediate 119,136 121,312
New Income 571,090 579,789
Balanced 439,629 511,015
Capital Appreciation 3,094,428 3,378,413
Equity Index 2,946,497 4,683,894
International Stock 613,895 627,963
Small-Cap Stock 924,222 1,092,405
Zurn Stock Fund 656,226 638,521
Participants' loans - 7% to 10% interest -0- 230,449
</TABLE>
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SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS - Item 27b
ZURN RETIREMENT SAVINGS PLAN
Year Ended December 31, 1997
<TABLE>
<CAPTION>
Amount Received
Original During The Year Unpaid Amount Overdue
Amount Principal Interest Balance Principal Interest
-------- --------- -------- ------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Thomas A. Babineau $7,000 $-0- $-0- $-0- $2,540 $-0-
19 Appletree Green Participant loan - 8.75%
Nashua, NH 03062 Distributed to participant
Charles Collins 3,500 -0- -0- -0- 3,363 -0-
P.O. Box 66 Participant loan - 9.5%
Dayton, NV 89403 Distributed to participant
Helen M. Olson 3,500 154 31 -0- 3,346 -0-
3780 Adams Street #10 Participant loan - 9.25%
Riverside, CA 92504 Distributed to participant
Eric J. Snyer 2,500 -0- -0- -0- 1,412 -0-
39 Gloucester Participant loan - 10%
Clifton Park, NY 12065 Distributed to participant
Lela D. Sumrall 1,235 -0- -0- -0- 141 -0-
6908 1/2 S. Hoover Street Participant loan - 7%
Los Angeles 1,194 -0- -0- -0- 864 -0-
CA 90044 Participant loan - 9.5%
Distributed to participant
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Pension Committee of Zurn Industries, Inc. has duly caused this annual
report to be signed on its behalf by the undersigned thereunto duly authorized.
ZURN RETIREMENT SAVINGS PLAN
(Plan)
June 11, 1997 /s/ James A. Zurn
-----------------------------
James A. Zurn, Chairman
Pension Committee of
Zurn Industries, Inc.
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CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 No. 333-00823 pertaining to the Zurn Retirement Savings Plan of our
report dated May 21, 1998 with respect to the financial statements and
supplemental schedules included in the Annual Report on Form 11-K of the Zurn
Retirement Savings Plan.
/s/ The Pashke Group
Erie, Pennsylvania
June 11, 1998
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