<PAGE>
FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
X Annual Report Pursuant to Section 15(d) of the
- --- 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]
For the Transition Period From ___________ To __________
Commission File Number 1-5502
ZURN/NEPCO 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/NEPCO 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/NEPCO
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 Paske Group
Erie, Pennsylvania
May 21, 1998
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STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
ZURN/NEPCO RETIREMENT SAVINGS PLAN
December 31
1997 1996
---------- ----------
ASSETS
Investments in T. Rowe Price Funds:
U.S. Treasury Money $ 974,202 $1,097,515
U.S. Treasury Intermediate 86,857 59,212
New Income 331,508 391,234
Balanced 362,736 206,872
Capital Appreciation 2,632,637 2,992,055
Equity Index 2,900,338 2,731,746
International Stock 570,465 768,724
Small-Cap Stock 493,909 491,591
Zurn Stock Fund 1,756 48,676
---------- ----------
8,354,408 8,787,625
Participants' loans 157,573 352,036
Contributions receivable:
Participants' 40,779
Employers' 10,366
---------- ----------
TOTAL ASSETS 8,511,981 9,190,806
FORFEITED EMPLOYERS' CONTRIBUTIONS 16,456 70,043
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $8,495,525 $9,120,763
========== ==========
See notes to financial statements.
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STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
ZURN/NEPCO 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 $ 50,665 $ 4,509 $ 24,467 $ 10,625 $ 325,668
Net appreciation in
value of investments 1,685 6,001 34,133 129,046
---------- ------- -------- -------- ----------
50,665 6,194 30,468 44,758 454,714
Participants' contributions 102,858 5,710 46,897 36,033 193,757
Employers' contributions 27,547 1,938 11,808 8,256 48,170
Participants' loan interest 2,849 60 603 817 4,629
---------- ------- -------- -------- ----------
TOTAL ADDITIONS 183,919 13,902 89,776 89,864 701,270
DEDUCTIONS
Benefits paid to participants 323,857 2,281 135,886 32,725 994,712
Forfeited employers' contributions 58,658 1,210 583
---------- ------- -------- -------- ----------
TOTAL DEDUCTIONS 382,515 2,281 137,096 32,725 995,295
---------- ------- -------- -------- ----------
NET (DEDUCTIONS) ADDITIONS (198,596) 11,621 (47,320) 57,139 (294,025)
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 1,097,515 59,212 391,234 206,872 2,992,055
Transfers 75,283 16,024 (12,406) 98,725 (65,393)
---------- ------- -------- -------- ----------
End of year $ 974,202 $86,857 $331,508 $362,736 $2,632,637
========== ======= ======== ======== ==========
</TABLE>
See notes to financial statements.
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STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS - Continued
ZURN/NEPCO 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 $ 73,411 $ 30,188 $ 22,280 $ 6 $ 541,819
Net appreciation (depreciation)
in value of investments 810,501 (7,248) 123,838 3,897 1,101,853
---------- --------- -------- -------- -------- ----------
883,912 22,940 146,118 3,903 1,643,672
Participants' contributions 216,967 92,525 84,944 712 $(40,779) 739,624
Employers' contributions 53,351 22,675 18,644 101 48,124 240,614
Participants' loan interest 5,216 1,874 1,235 17,283
---------- --------- -------- -------- -------- ----------
TOTAL ADDITIONS 1,159,446 140,014 250,941 4,716 7,345 2,641,193
DEDUCTIONS
Benefits paid to participants 1,103,855 273,108 228,971 5,481 94,618 3,195,494
Forfeited employers' contributions 554 870 110 8,952 70,937
---------- --------- -------- -------- -------- ----------
TOTAL DEDUCTIONS 1,104,409 273,978 229,081 5,481 103,570 3,266,431
---------- --------- -------- -------- -------- ----------
NET (DEDUCTIONS) ADDITIONS 55,037 (133,964) 21,860 (765) (96,225) (625,238)
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 2,731,746 768,724 491,591 48,676 333,138 9,120,763
Transfers 113,555 (64,295) (19,542) (46,155) (95,796)
---------- --------- -------- -------- -------- ----------
End of year $2,900,338 $ 570,465 $493,909 $ 1,756 $141,117 $8,495,525
========== ========= ======== ======== ======== ==========
</TABLE>
See notes to financial statements.
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STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
ZURN/NEPCO 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 $ 50,081 $ 2,897 $ 23,249 $ 9,074 $ 280,414
Net appreciation (depreciation)
in value of investments (1,405) (14,584) 18,522 152,518
---------- ------- -------- -------- ----------
50,081 1,492 8,665 27,596 432,932
Contributions:
Participants' 164,317 17,258 83,278 70,588 419,462
Employers' 41,852 2,911 19,835 13,042 88,590
Participants' loan interest 3,939 44 991 1,258 6,397
---------- ------- -------- -------- ----------
TOTAL ADDITIONS 260,189 21,705 112,769 112,484 947,381
DEDUCTIONS
Benefits paid to participants 203,155 3,113 20,870 47,233 242,645
Forfeited employers' contributions (32,101) 1,053 7,529 1,915 22,767
---------- ------- -------- -------- ----------
TOTAL DEDUCTIONS 171,054 4,166 28,399 49,148 265,412
---------- ------- -------- -------- ----------
NET ADDITIONS 89,135 17,539 84,370 63,336 681,969
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 1,034,694 29,088 329,704 156,206 2,549,859
Transfers (26,314) 12,585 (22,840) (12,670) (239,773)
---------- ------- -------- -------- ----------
End of year $1,097,515 $59,212 $391,234 $206,872 $2,992,055
========== ======= ======== ======== ==========
</TABLE>
See notes to financial statements.
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STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS - Continued
ZURN/NEPCO 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 $ 91,593 $ 20,401 $ 41,555 $ 519,264
Net appreciation in
value of investments 397,387 76,109 19,417 $ 1,916 649,880
---------- -------- -------- ------- -------- ----------
488,980 96,510 60,972 1,916 1,169,144
Contributions:
Participants' 321,986 138,597 98,944 704 $ (1,126) 1,314,008
Employers' 76,201 30,997 20,302 71 195 293,996
Participants' loan interest 8,154 2,252 1,220 24,255
---------- -------- -------- ------- -------- ----------
TOTAL ADDITIONS 895,321 268,356 181,438 2,691 (931) 2,801,403
DEDUCTIONS
Benefits paid to participants 242,550 29,558 7,864 46,075 843,063
Forfeited employers' contributions 20,984 4,355 1,607 45,891 74,000
---------- -------- -------- -------- ----------
TOTAL DEDUCTIONS 263,534 33,913 9,471 91,966 917,063
---------- -------- -------- ------- -------- ----------
NET ADDITIONS (DEDUCTIONS) 631,787 234,443 171,967 2,691 (92,897) 1,884,340
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 2,019,045 514,214 201,807 401,806 7,236,423
Transfers 80,914 20,067 117,817 45,985 24,229
---------- -------- -------- ------- -------- ----------
End of year $2,731,746 $768,724 $491,591 $48,676 $333,138 $9,120,763
========== ====== ======== ======= ======== ==========
</TABLE>
See notes to financial statements.
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NOTES TO FINANCIAL STATEMENTS
ZURN/NEPCO RETIREMENT SAVINGS PLAN
December 31, 1997
PLAN DESCRIPTION
The Zurn/NEPCO Retirement Savings Plan is a defined contribution plan providing
retirement benefits through participant-directed investments to participants in
the National Energy Production Corporation Pension Plan. It is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
In 1997, the operations of the Company were sold and there were no active
employee participants as of December 31, 1997. On January 1, 1998, the Plan was
merged into the Zurn Retirement Savings Plan. Previously, the Company had
agreed to contribute participants' elective deferrals of up to 18% of eligible
compensation plus one-half of such amounts up to 2% of eligible compensation.
Participants could also contribute non-taxed distributions from other employers'
qualified plans and they could borrow from their accounts subject to specified
limitations.
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 - 55.852 shares; 1996
- - 1,817 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
($1,032) 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.
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.
Dividends Dividend income is recognized on the ex-dividend date.
Expenses Administrative expenses are paid by the Plan Administrator.
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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, Zurn Industries, Inc. 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 Zurn common stock
will be converted into the right to receive 1.6 shares of USI common stock upon
surrender of the certificates for the Zurn stock.
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SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES - Item 27a
ZURN/NEPCO RETIREMENT SAVINGS PLAN
December 31, 1997
ASSETS OWNED AT YEAR-END
Cost Current Value
---- -------------
T. Rowe Price Funds:
U.S. Treasury Money $ 974,202 $ 974,202
U.S. Treasury Intermediate 85,853 86,857
New Income 326,436 331,508
Balanced 313,148 362,736
Capital Appreciation 2,413,587 2,632,637
Equity Index 1,762,087 2,900,338
International Stock 544,735 570,465
Small-Cap Stock 397,365 493,909
Zurn Stock Fund 1,373 1,756
Participants' loans - 7% to 10% interest -0- 157,573
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SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS - Item 27b
ZURN/NEPCO RETIREMENT SAVINGS PLAN
Year Ended December 31, 1997
Amount Received
Original During The Year Unpaid Amount Overdue
Amount Principal Interest Balance Principal Interest
------ --------- -------- ------- --------- --------
Ralph A. Fisher $3,000 $-0- $-0- $-0- $2,025 $-0-
12906 NE 30th Street Participant loan - 10%
Bellevue, WA 98005 Distributed to participant
James L. Hewitt 2,000 734 16 -0- 1,023 -0-
151 Trinity Street Participant loan - 9.25%
Cedarcreek, TX 78612 Distributed to participant
Aileen C. Kiwior 2,000 153 26 -0- 1,023 -0-
P.O. Box 164 Participant loan - 10%
Gary, ME 04039 Distributed to participant
Albert A. Lawrence 3,000 -0- -0- -0- 2,138 -0-
RD #3 Box 528 Participant loan - 9.75%
Gorham, ME 04038 Distributed to participant
Mark R. Lowell 2,118 -0- -0- -0- 1,404 -0-
8 Bridle Court Participant loan - 10%
Scarborough, ME 04074 Distributed to participant
Debra M. Magginetti 3,500 -0- -0- -0- 1,444 -0-
698-630 Cameron Way Participant loan - 8.25%
Susanville, WA 96130 Distributed to participant
James E. Mulgrew 8,000 -0- -0- -0- 5,592 -0-
405 Western Avenue #299 Participant loan - 10%
South Portland, ME 04106 Distributed to participant
Aniekan U. Usoro 4,600 -0- -0- -0- 3,212 -0-
3120 201st Street SE Participant loan - 8.25%
Bothell, WA 98012 Distributed to participant
Kenneth C. Yunker 3,500 -0- -0- -0- 3,243 -0-
6A Old County Road Ext. Participant loan - 8.25%
Freeport, ME 04032 Distributed to participant
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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/NEPCO RETIREMENT SAVINGS PLAN
(Plan)
June 11, 1998 /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. 333-00813 pertaining to the Zurn/NEPCO 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/NEPCO Retirement Savings Plan.
/s/ The Pashke Group
Erie, Pennsylvania
June 11, 1998
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