<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE
STOCK PURCHASE, SAVINGS AND SIMILAR
PLANS PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
---------------------------------
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995.
[ ] 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 1-2299
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
Bearings, Inc. Retirement Savings Plan
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
Bearings, Inc.
3600 Euclid Avenue
Cleveland, Ohio 44115
<PAGE> 2
Financial Statements and Exhibit(s)
<TABLE>
<CAPTION>
Page No.
(a) Financial Statements (in this Report)
-------------------- ----------------
<S> <C>
Independent Auditors' Report 5
Statement of Net Assets Available 6
for Benefits --
December 31, 1995 and 1994
Statement of Changes in Net Assets 7
Available for Benefits --
Year Ended December 31, 1995
Statement of Changes in Net Assets 8
Available for Benefits --
Year ended December 31, 1994
Notes to Financial Statements -- 9
Years Ended December 31,
1995 and 1994
Supplemental Schedules 14
(b) Exhibit(s)
---------
Independent Auditors' Consent 16
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Plan has duly caused this annual report to be signed on its behalf by
the undersigned, hereunto duly authorized.
BEARINGS, INC. RETIREMENT
SAVINGS PLAN
By: Bearings, Inc., as Plan
Administrator
By: /s/ John C. Dannemiller
----------------------------------
Signature
John C. Dannemiller
----------------------------------
Printed Name
Chairman & Chief Executive Officer
----------------------------------
Title
Date: June 28, 1996
<PAGE> 3
BEARINGS, INC. RETIREMENT SAVINGS PLAN
(FORMERLY BEARINGS, INC. 401-K SAVINGS PLAN)
Financial Statements
for the Years Ended
December 31, 1995 and 1994,
Supplemental Schedules
for the Year Ended
December 31, 1995,
and Independent Auditors' Report
BEARINGS, INC.
<PAGE> 4
BEARINGS, INC. RETIREMENT SAVINGS PLAN
(FORMERLY BEARINGS, INC. 401-K SAVINGS PLAN)
TABLE OF CONTENTS
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1995 AND 1994
AND FOR THE YEARS THEN ENDED:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available
for Benefits 3 - 4
Notes to Financial Statements 5
SUPPLEMENTAL SCHEDULES AS OF DECEMBER 31, 1995 AND FOR THE YEAR THEN ENDED:
Item 27a - Schedule of Assets Held for Investment Purposes 10
Item 27d - Schedule of Reportable Transactions 11
</TABLE>
<PAGE> 5
[Deloitte & Touche LLP Letterhead]
INDEPENDENT AUDITORS' REPORT
Bearings, Inc. Retirement Savings Plan
We have audited the accompanying statements of net assets available for benefits
of the Bearings, Inc. Retirement Savings Plan (formerly Bearings, Inc. 401-K
Savings Plan) (the "Plan") as of December 31, 1995 and 1994, and the related
statements of changes in net 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, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1995 and 1994, and the changes in net assets available for benefits for the
years then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes as of December 31, 1995 and reportable
transactions for the year ended December 31, 1995 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 information by fund in
the statements of net assets available for benefits and the statements of
changes in net assets available for benefits is presented for the purpose of
additional analysis rather than to present the net assets available for benefits
and changes in net assets available for benefits of the individual funds. The
supplemental schedules and supplemental information by fund are the
responsibility of the Plan's management. Such supplemental schedules and
supplemental information by fund have been subjected to the auditing procedures
applied in our audits of the basic financial statements and, in our opinion, are
fairly stated in all material respects when considered in relation to the basic
financial statements taken as a whole.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Cleveland, Ohio
June 7, 1996
<PAGE> 6
BEARINGS, INC. RETIREMENT SAVINGS PLAN
(FORMERLY BEARINGS, INC. 401-K SAVINGS PLAN)
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1995 AND 1994
================================================================================
<TABLE>
<CAPTION>
-----------------------------SUPPLEMENTAL INFORMATION BY FUND-------------------------------
COMPANY EMPLOYEE FIXED AMERICAN AMERICAN INCOME
STOCK STOCK INCOME FUNDAMENTAL FIDELITY EUROPACIFIC FUND OF
DECEMBER 31, 1995 FUND FUND FUND INVESTORS GROWTH GROWTH AMERICA
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments at fair value:
Bearings, Inc. common stock $11,232,322 $4,469,488
Investment funds 267 42,042 $4,352,820 $ 6,968,276 $6,932,115 $ 4,029,866 $ 3,881,238
Loans to participants
----------- ---------- ---------- ----------- ---------- ----------- -----------
Total investments 11,232,589 4,511,530 4,352,820 6,968,276 6,932,115 4,029,866 3,881,238
Receivables:
Contributions 375,210
Transfer from Profit-Sharing Trust
Other 57 6,506 158
----------- ---------- ---------- ----------- ---------- ----------- -----------
Total assets 11,607,856 4,518,036 4,352,978 6,968,276 6,932,115 4,029,866 3,881,238
LIABILITIES:
Accrued administrative expenses and
other liabilities 4 14,907 1,158 1,155 658 642
----------- ---------- ---------- ----------- ---------- ----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $11,607,852 $4,503,129 $4,352,978 $ 6,967,118 $6,930,960 $ 4,029,208 $ 3,880,596
=========== ========== ========== =========== ========== =========== ===========
DECEMBER 31, 1994
ASSETS:
Investments at fair value:
Bearings, Inc. common stock $ 6,512,964 $2,701,139
Investment funds 24,557 137,009 $4,578,588 $ 4,504,149 $4,177,819 $ 3,298,763 $ 2,723,200
Loans to participants
----------- ---------- ---------- ----------- ---------- ----------- -----------
Total investments 6,537,521 2,838,148 4,578,588 4,504,149 4,177,819 3,298,763 2,723,200
Cash (14,150) (7,561) (14,061)
Receivables:
Contributions 238,804 52,302 60,905 71,753 65,518 55,017 37,669
Other 62 743 359 112,681 2,783 84,220 76,271
----------- ---------- ---------- ----------- ---------- ----------- -----------
Total assets 6,776,387 2,891,193 4,639,852 4,674,433 4,246,120 3,430,439 2,823,079
LIABILITIES:
Accrued administrative expenses and
other liabilities 1,198 2,630 2,421 2,027 2,036
----------- ---------- ---------- ----------- ---------- ----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $ 6,776,387 $2,891,193 $4,638,654 $ 4,671,803 $4,243,699 $ 3,428,412 $ 2,821,043
=========== ========== ========== =========== ========== =========== ===========
<CAPTION>
------------SUPPLEMENTAL INFORMATION BY FUND------------
BOND EMPLOYEE PROFIT
FUND OF LOAN SHARING
DECEMBER 31, 1995 AMERICA FUND TRUST TOTAL
<S> <C> <C> <C> <C>
ASSETS:
Investments at fair value:
Bearings, Inc. common stock $ 15,701,810
Investment funds $ 1,087,136 27,293,760
Loans to participants $ 1,080,344 1,080,344
----------- ----------- ----------- ------------
Total investments 1,087,136 1,080,344 44,075,914
Receivables:
Contributions 375,210
Transfer from Profit-Sharing Trust $50,896,948 50,896,948
Other 6,721
----------- ----------- ----------- ------------
Total assets 1,087,136 1,080,344 50,896,948 95,354,793
LIABILITIES:
Accrued administrative expenses and
other liabilities 177 18,701
----------- ----------- ----------- ------------
NET ASSETS AVAILABLE FOR BENEFITS $ 1,086,959 $ 1,080,344 $50,896,948 $ 95,336,092
=========== =========== =========== ============
DECEMBER 31, 1994
ASSETS:
Investments at fair value:
Bearings, Inc. common stock $ 9,214,103
Investment funds $ 918,585 20,362,670
Loans to participants $ 45,440 45,440
----------- ----------- ----------- ------------
Total investments 918,585 45,440 29,622,213
Cash (4,927) (40,699)
Receivables:
Contributions 11,982 1,186 595,136
Other 5,336 147 282,602
----------- ----------- ----------- ------------
Total assets 930,976 46,773 30,459,252
LIABILITIES:
Accrued administrative expenses and
other liabilities 553 2,373 13,238
----------- ----------- ----------- ------------
NET ASSETS AVAILABLE FOR BENEFITS $ 930,423 $ 44,400 $ 0 $ 30,446,014
=========== =========== =========== ============
</TABLE>
See notes to financial statements.
2
<PAGE> 7
BEARINGS, INC. RETIREMENT SAVINGS PLAN
(FORMERLY BEARINGS, INC. 401-K SAVINGS PLAN)
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1995
================================================================================
<TABLE>
<CAPTION>
-----------------------------SUPPLEMENTAL INFORMATION BY FUND-------------------------------
COMPANY EMPLOYEE FIXED AMERICAN AMERICAN INCOME
STOCK STOCK INCOME FUNDAMENTAL FIDELITY EUROPACIFIC FUND OF
FUND FUND FUND INVESTORS GROWTH GROWTH AMERICA
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Contributions:
Employees $ 734,343 $ 930,240 $ 1,156,597 $1,229,711 $ 827,024 $ 619,894
Employer:
Cash $ 31
Bearings, Inc. common stock 2,696,649
Net assets to be received from the
Profit-Sharing Trust
Investment income 166,170 83,288 608 14,586 39,421 48,912 211,218
Net appreciation in market value
of investments 2,686,038 1,119,037 305,697 1,540,307 1,748,986 390,614 657,192
----------- ---------- ---------- ----------- ---------- ----------- -----------
Total additions 5,548,888 1,936,668 1,236,545 2,711,490 3,018,118 1,266,550 1,488,304
DEDUCTIONS:
Distributions to participants 697,522 209,688 747,279 508,039 395,766 287,506 433,924
Administrative expenses 19,901 8,677 19,756 21,456 20,495 14,206 11,960
----------- ---------- ---------- ----------- ---------- ----------- -----------
Total deductions 717,423 218,365 767,035 529,495 416,261 301,712 445,884
INTERFUND TRANSFERS (106,367) (755,186) 113,320 85,404 (364,042) 17,133
----------- ---------- ---------- ----------- ---------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
FOR THE YEAR 4,831,465 1,611,936 (285,676) 2,295,315 2,687,261 600,796 1,059,553
NET ASSETS AVAILABLE FOR BENEFITS,
DECEMBER 31, 1994 6,776,387 2,891,193 4,638,654 4,671,803 4,243,699 3,428,412 2,821,043
----------- ---------- ---------- ----------- ---------- ----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS,
DECEMBER 31, 1995 $11,607,852 $4,503,129 $4,352,978 $ 6,967,118 $6,930,960 $ 4,029,208 $ 3,880,596
=========== ========== ========== =========== ========== =========== ===========
<CAPTION>
------------SUPPLEMENTAL INFORMATION BY FUND------------
BOND EMPLOYEE PROFIT
FUND OF LOAN SHARING
AMERICA FUND TRUST TOTAL
<S> <C> <C> <C> <C>
ADDITIONS:
Contributions:
Employees $ 190,181 $ 5,687,990
Employer:
Cash 31
Bearings, Inc. common stock 2,696,649
Net assets to be received from the
Profit-Sharing Trust $50,896,948 50,896,948
Investment income 82,151 $ 31,515 677,869
Net appreciation in market value
of investments 86,366 8,534,237
----------- ----------- ----------- ------------
Total additions 358,698 31,515 50,896,948 68,493,724
DEDUCTIONS:
Distributions to participants 201,992 1,844 3,483,560
Administrative expenses 3,635 120,086
----------- ----------- ----------- ------------
Total deductions 205,627 1,844 3,603,646
INTERFUND TRANSFERS 3,465 1,006,273
----------- ----------- ----------- ------------
INCREASE (DECREASE) IN NET ASSETS
FOR THE YEAR 156,536 1,035,944 50,896,948 64,890,078
NET ASSETS AVAILABLE FOR BENEFITS,
DECEMBER 31, 1994 930,423 44,400 30,446,014
----------- ----------- ----------- ------------
NET ASSETS AVAILABLE FOR BENEFITS,
DECEMBER 31, 1995 $ 1,086,959 $ 1,080,344 $50,896,948 $ 95,336,092
=========== =========== =========== ============
</TABLE>
See notes to financial statements.
3
<PAGE> 8
BEARINGS, INC. RETIREMENT SAVINGS PLAN
(FORMERLY BEARINGS, INC. 401-K SAVINGS PLAN)
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1994
================================================================================
<TABLE>
<CAPTION>
-----------------------------SUPPLEMENTAL INFORMATION BY FUND-------------------------------
COMPANY EMPLOYEE FIXED AMERICAN AMERICAN INCOME
STOCK STOCK INCOME FUNDAMENTAL FIDELITY EUROPACIFIC FUND OF
FUND FUND FUND INVESTORS GROWTH GROWTH AMERICA
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS:
Contributions:
Employees $ 634,485 $ 950,485 $ 874,828 $ 826,917 $ 660,486 $ 477,437
Employer:
Cash $ 265,811
Bearings, Inc. common stock 1,750,899
Investment income 113,014 49,535 1,579 180,835 44,592 83,266 94,033
Net appreciation in market value
of investments 854,349 295,688 343,139 96,415 51,056
----------- ---------- ---------- ----------- ---------- ----------- -----------
Total additions 2,984,073 979,708 1,295,203 1,152,078 922,565 743,752 571,470
DEDUCTIONS:
Distributions to participants 568,475 152,311 1,090,206 241,545 127,736 146,435 185,458
Net depreciation in market value
of investments 11,752 55,056
Administrative expenses 7,626 3,148 11,425 12,530 10,746 9,244 8,058
----------- ---------- ---------- ----------- ---------- ----------- -----------
Total deductions 576,101 155,459 1,101,631 254,075 138,482 167,431 248,572
INTERFUND TRANSFERS 539,329 (1,334,112) 3,773,800 3,459,616 2,852,091 2,498,145
----------- ---------- ---------- ----------- ---------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
FOR THE YEAR 2,407,972 1,363,578 (1,140,540) 4,671,803 4,243,699 3,428,412 2,821,043
NET ASSETS AVAILABLE FOR BENEFITS,
DECEMBER 31, 1993 4,368,415 1,527,615 5,779,194 0 0 0 0
----------- ---------- ---------- ----------- ---------- ----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS,
DECEMBER 31, 1994 $ 6,776,387 $2,891,193 $4,638,654 $ 4,671,803 $4,243,699 $ 3,428,412 $ 2,821,043
=========== ========== ========== =========== ========== =========== ===========
<CAPTION>
------------SUPPLEMENTAL INFORMATION BY FUND------------
BOND EMPLOYEE
FUND OF LOAN EQUITY MONEY MARKET
AMERICA FUND FUND FUND TOTAL
<S> <C> <C> <C> <C> <C>
ADDITIONS:
Contributions:
Employees $179,244 $ 48,766 $ 357,081 $ 185,287 $ 5,195,016
Employer:
Cash 265,811
Bearings, Inc. common stock 1,750,899
Investment income 36,463 2,683 39,218 43,266 688,484
Net appreciation in market value
of investments 1,640,647
-------- -------- ----------- ----------- -----------
Total additions 215,707 51,449 396,299 228,553 9,540,857
DEDUCTIONS:
Distributions to participants 125,699 2,316 281,216 286,681 3,208,078
Net depreciation in market value
of investments 48,801 392,124 507,733
Administrative expenses 2,556 65,333
-------- -------- ----------- ----------- -----------
Total deductions 177,056 2,316 673,340 286,681 3,781,144
INTERFUND TRANSFERS 891,772 (16,834) (7,707,532) (4,956,275)
-------- -------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
FOR THE YEAR 930,423 32,299 (7,984,573) (5,014,403) 5,759,713
NET ASSETS AVAILABLE FOR BENEFITS,
DECEMBER 31, 1993 0 12,101 7,984,573 5,014,403 24,686,301
-------- -------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS,
DECEMBER 31, 1994 $930,423 $ 44,400 $ 0 $ 0 $30,446,014
======== ======== =========== =========== ===========
</TABLE>
See notes to financial statements.
4
<PAGE> 9
BEARINGS, INC. RETIREMENT SAVINGS PLAN (FORMERLY BEARINGS, INC. 401-K
SAVINGS PLAN)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994
- ------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
Effective July 1, 1995 the Bearings, Inc. Profit-Sharing Trust was
merged into the Bearings, Inc. 401-K Savings Plan. The merged plan is
known as the Bearings, Inc. Retirement Savings Plan (the "Plan"). The
following description of the Plan is provided for general information
purposes only. Participants and users of the financial statements
should refer to the Plan document for more complete information.
GENERAL - The Plan was established by Bearings, Inc. and its
subsidiaries (the "Company") for the purpose of encouraging and
assisting employees to provide long-term, tax-deferred savings for
retirement. The Plan is subject to the reporting and disclosure
requirements, the minimum participation and vesting standards, and the
fiduciary responsibility requirements of the Employee Retirement Income
Security Act of 1974.
ADMINISTRATION - The Plan is administered by the Company. The Company's
powers and duties relate to making employee and employer contributions
to the Trustee, establishing investment objectives, authorizing
disbursements from the Trust, and resolving any questions of Plan
interpretation.
The assets of the Plan are maintained and administered by Key Trust Co.
of Ohio, N.A. acting as Trustee. The Trustee is responsible for the
custody of assets.
PARTICIPATION AND CONTRIBUTIONS - All employees are eligible to
participate in the Plan on the first day of the month following their
hire.
Eligible employees may elect to make Salary Savings Contributions to
the Plan ranging from 1% to 15% of compensation (maximum Salary Savings
Contributions increased from 10% to 15% effective July 1, 1995). The
Company makes a Matching Employer Contribution to the Plan equal to a
percentage of the Salary Savings Contributions not in excess of 6% of
the participant's compensation. Matching Employer Contributions are
determined based upon the Company's earnings per share for the
immediately preceding calendar-year quarter and the participants'
investment elections. The Matching Employer Contribution is updated
annually and is currently determined using the following schedule:
<TABLE>
<CAPTION>
CORPORATE EARNINGS PER QUARTERLY MATCHING
SHARE FOR IMMEDIATELY CONTRIBUTION
PRECEDING QUARTER EMPLOYEE STOCK FUND OTHER FUNDS
<S> <C> <C>
$.36 or less 35% 25%
$.37 to $.43 45% 35%
$.44 to $.48 60% 50%
$.49 to $.53 85% 75%
$.54 and above 110% 100%
</TABLE>
5
<PAGE> 10
The employer match on participant contributions to other funds was 35%,
50%, 100%, and 35% for the four 1995 quarters, and 35%, 35%, 100%, and
25% for the four 1994 quarters, respectively.
Matching Employer Contributions are made primarily in shares of
Bearings, Inc. common stock.
The Company may also make a Profit-Sharing Contribution to the Plan
annually. Participants must be employed on June 30 of such Plan year
and completed at least one year of service, as defined in the Plan
agreement, as of June 30 to be eligible to receive an allocation of the
Profit-Sharing Contribution. Profit-Sharing Contributions are allocated
to each participant's Profit-Sharing Contribution Account based upon
the ratio of each participant's total compensation to the aggregate
compensation of all participants eligible to receive a Profit-Sharing
Contribution. There was no Profit-Sharing Contribution made to the Plan
for the six months ended December 31, 1995.
Contributions are excluded from participants' taxable income until such
amounts are received by them as a distribution from the Plan.
The Plan provides for Rollover Contributions (amounts previously
distributed to the participants from certain other tax-qualified plans)
and Transfer Contributions (assets transferred from certain other
tax-qualified plans) by or on behalf of an employee in accordance with
procedures established by the Company.
INVESTMENT OF CONTRIBUTIONS - Participants elect investment of their
Salary Savings Contributions in 10% increments in the Plan's Fixed
Income Fund, American Fundamental Investors Fund, Fidelity Growth Fund,
American EuroPacific Growth Fund, Income Fund of America, Bond Fund of
America or the Employee Stock Fund. All Matching Employer Contributions
are invested in the Company Stock Fund. Participants may elect to
change their investment elections as to future contributions and may
also elect to reallocate a portion or all of their account balances
among the investment funds in increments of 10% of the total amount to
be reallocated. All such elections are filed with the Trustee and
become effective daily.
Effective January 1996, participants also elect investment of their
Past Profit-Sharing Contributions in a manner similar to and among the
same investment fund options as their Salary Savings Contributions.
The value of the funds and the interest of individual participants
under each fund, are calculated daily (daily valuation).
VESTING AND DISTRIBUTIONS - Each participant is immediately and fully
vested in all Salary Savings Contributions and earnings thereon.
Participants vest in Matching Employer Contributions and Profit-Sharing
Contributions at a rate of 25% for each year of eligible service,
becoming completely vested after four years, or at death, termination
of employment due to permanent and total disability, or normal or early
retirement as defined in the Plan.
Upon termination of service, participants may receive lump sum
distributions of their vested account balances no later than 60 days
after the end of the Plan year in which they terminate employment with
the Company. Distributions upon retirement may be received as a lump
sum or as installments in accordance with the participant's election.
Participants may also apply for hardship withdrawals from their Salary
Savings Contributions, subject to adherence to Internal Revenue Service
regulations and approval by the Company.
6
<PAGE> 11
Forfeitures of nonvested amounts are applied to reduce future Matching
Employer Contributions.
LOANS - Beginning July 1, 1995, participants may borrow from their
401(k) Contribution Accounts a minimum of $1,000 up to a maximum equal
to the lesser of $50,000 or 50 percent of the aggregate sum of the
participant's accounts. Loan transactions are treated as a transfer to
(from) the investment funds from (to) the Employee Loan Fund. Loan
terms range from 1-5 years or up to ten years, if for the purchase of a
primary residence. Loans originating from merged plans (the King
Bearing Profit Sharing and Savings Plan and the IBT 401k Plan) are also
reflected in the Employee Loan Fund in the Plan's financial statements.
These loans are to be repaid to the Plan in accordance with their
original terms. The loans are secured by the balance in the
participant's accounts and bear interest at rates prevailing at the
time the loans were made. Principal and interest are paid ratably
through bi-weekly payroll deductions. Interest rates range from 7.00%
to 10.00%. Investments in participant loans are stated at estimated
fair value based on amounts estimated to be recoverable.
PLAN TERMINATION - The Plan was adopted with the expectation that it
will continue indefinitely. The Company may, however, terminate the
Plan at any time and may amend the Plan from time to time. In the event
of termination of the Plan, all participants will immediately become
fully vested in the value of all Matching Employer Contributions and
Profit Sharing Contributions made on their behalf.
TAX STATUS OF THE PLAN - The Plan obtained its latest determination
letter dated May 24, 1989, in which the Internal Revenue Service stated
that the Plan, as then designed, was in compliance with the applicable
requirements of the Internal Revenue Code. The Plan has been amended
and restated since receiving this determination letter. The Plan
administrator and the Plan's tax counsel believes that the Plan is
designed and is currently being operated in compliance with the
applicable requirements of the Internal Revenue Code. Therefore, no
provision for income taxes has been included in the Plan's financial
statements. The Plan sponsor has filed an application with the Internal
Revenue Service for a new determination letter.
2. DESCRIPTION OF THE SEPARATE FUNDS
Effective April 1994, the Plan's investment options were changed to
provide seven separate investment funds. The Trustee maintains separate
accounts for each Plan participant and invests such participant's
contributions, as directed by the participant, in one or more of the
following funds:
- Employee Stock Fund consists of investments in the common
stock of Bearings, Inc. and temporary investments in the
Trustee's EB Money Market Fund.
- The Fixed Income Fund consists of units of the Trustee's PRISM
MaGIC Fund, which invests in a combination of guaranteed
investment contracts and cash equivalents, and temporary
investments in the Trustee's EB Money Market Fund.
- The American Fundamental Investors Fund consists of shares of
Fundamental Investors, Inc. common stock, which invest in
mature stocks designed with the objective of growth from price
appreciation and income from dividends.
- The Fidelity Growth Fund consists of shares of Advisors
Institutional Equity Growth Fund, which invests in stocks with
the objective of capital appreciation.
7
<PAGE> 12
- The American EuroPacific Growth Fund consists of shares of the
EuroPacific Growth Fund, which invests in stocks from
companies located outside the U. S. with the objective of
capital appreciation.
- The Income Fund of America Fund consists of shares of Income
Fund of America, which invests in stocks and bonds with the
objective of maximizing current income from dividends and
interest.
- The Bond Fund of America Fund consists of shares of the Bond
Fund of America, which invests in government and corporate
bonds.
The following funds were closed during the year ended December 31,
1994:
- The Equity Fund consisted of units of the Society Diversified
Stock Fund, a broadly diversified portfolio consisting
primarily of the common stocks of high quality companies and
temporary investments in the Trustee's EB Money Market Fund.
The Trustee is not the administrator of the Society
Diversified Stock Fund but is the investment advisor.
- The Money Market Fund consisted of units of the Trustee's EB
Money Market Fund, a managed money market fund investing in
high quality, short-term investments emphasizing liquidity.
Company Matching Employer Contributions are invested in the Company
Stock Fund which consists of investments in the common stock of
Bearings, Inc., limited to a maximum of one million shares, and
temporary investments in the Trustee's EB Money Market Fund.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - Each fund of the Trust is accounted for
separately. The accounts of these funds are maintained, and the
accompanying financial statements have been prepared, on the accrual
basis of accounting.
USE OF ESTIMATES - In preparing the financial statement in conformity
with generally accepted accounting principles, the Plan's administrator
is required to make estimates and assumption that affect the reported
amounts of assets and liabilities at the date of the financial
statements and in revenues and expenses during the reporting period.
Actual results could differ from those estimates.
VALUATION OF INVESTMENTS - Investments are accounted for at cost on the
trade-date and are reported in the statement of net assets available
for benefits at market value. The investment in Bearings, Inc. common
stock is valued using the year-end closing price listed by the New York
Stock Exchange. Investment funds are stated at values using year-end
closing price for each of the funds or quoted market prices.
8
<PAGE> 13
TRANSFER FROM PROFIT-SHARING TRUST - The receivable for net assets to
be transferred from the Profit-Sharing Trust represents the value of
the participant account balances held in the Profit-Sharing Trust at
December 31, 1995 reduced by $1,477,109 of distributions payable for
participant-initiated benefits payable that will be paid out of the
Profit-Sharing Trust prior to the final transfer to the Plan. The total
transferred to the Plan will include additional investment
earnings/losses through the date of final distribution of the
Profit-Sharing Trust.
BENEFITS PAYABLE - Benefits are recorded by the Plan when payments are
made.
ADMINISTRATIVE EXPENSES - Certain administrative expenses of the Plan
were paid by the Plan including trustee fees paid to the Plan Trustee.
The Company paid other administrative costs of the Plan, including the
salaries, benefits and other costs of Company employees involved in
administering the Plan.
4. INVESTMENTS
The Plan provides that, in accordance with the investment objectives
established by the Company, the Trustee of the Plan shall hold, invest,
reinvest, manage and administer all assets of the Plan as a trust fund
for the exclusive benefit of participants and their beneficiaries.
Plan investments are detailed in the supplemental schedule of assets
held for investment purposes which is attached to these financial
statements. Plan investments exceeding 5% of net assets available for
benefits as of December 31, 1995 and 1994 were as follows:
<TABLE>
<CAPTION>
Description of
Investment 1995 1994
- ------------------------------------------------------- ------------------ --------------------
<S> <C> <C>
Bearings, Inc. Common Stock $ 15,701,810 $ 9,214,103
PRISM MaGIC Fund $ 4,352,820 $ 4,578,486
Fundamental Investors, Inc. $ 6,968,276 $ 4,504,149
Advisors International Equity Growth Fund $ 6,932,115 $ 4,177,792
EuroPacific Growth Fund $ 4,029,866 $ 3,298,763
Income Fund of America $ 3,881,238 $ 2,723,200
</TABLE>
5. SUBSEQUENT EVENT
Effective January 1, 1996, the Mainline Industrial Distributors, Inc.
Profit Sharing and Investment Plan was merged into the Plan. Net assets
totaling $2,326,903 were transferred to the Plan in early 1996.
******
9
<PAGE> 14
BEARINGS, INC. RETIREMENT SAVINGS PLAN (FORMERLY
BEARINGS, INC. 401-K SAVINGS PLAN)
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
IDENTITY OF ISSUER, BORROWER, DESCRIPTION OF INVESTMENT COST CURRENT
LESSOR OR SIMILAR PARTY VALUE
COMPANY STOCK FUND
------------------
<S> <C> <C> <C>
* Bearings, Inc. Common Stock - 384,011 shares $ 6,982,014 $11,232,322
* Key Trust EB Money Market Fund - 267 units 267 267
-------------- ---------------
6,982,281 11,232,589
EMPLOYEE STOCK FUND
-------------------
* Bearings, Inc. Common Stock - 152,803 shares 2,850,996 4,469,488
* Key Trust EB Money Market Fund - 42,041
units 42,042 42,042
------------- ------------
2,893,038 4,511,530
FIXED INCOME FUND
-----------------
* Key Trust PRISM MaGIC Fund - 403,453 units 4,248,666 4,352,820
AMERICAN FUNDAMENTAL INVESTORS
------------------------------
Fundamental Investors, Inc. Common Stock - 312,618 shares 5,714,953 6,968,276
FIDELITY ADVISOR GROWTH FUND
----------------------------
Advisors Institutional Equity Advisors Instl. Equity Growth Fund -
Growth Fund 182,905 shares 5,612,925 6,932,115
AMERICAN EUROPACIFIC GROWTH FUND
--------------------------------
EuroPacific EuroPacific Growth Fund - 174,226
shares 3,809,379 4,029,866
INCOME FUND OF AMERICA
----------------------
Income Fund of America Income Fund of America - 244,563
units 3,376,856 3,881,238
BOND FUND OF AMERICA
--------------------
Bond Fund of America Bond Fund of America - 78,323
shares 1,045,585 1,087,136
EMPLOYEE LOAN FUND Participant Loans (with interest rates
------------------ ranging from 7.00% to 10.00% and
* Various Plan Participants maturity dates ranging from August
1996 to July 2010) 1,080,344 1,080,344
------------- -------------
TOTAL INVESTMENTS $34,764,027 $44,075,914
============= =============
<FN>
* Represents a party-in-interest.
</TABLE>
<PAGE> 15
BEARINGS, INC. RETIREMENT SAVINGS PLAN
(FORMERLY BEARINGS, INC. 401-K SAVINGS PLAN)
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
================================================================================
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e) (f) (g) (h) (i)
EXPENSE
INCURRED COST CURRENT VALUE
IDENTITY OF PURCHASE SELLING LEASE WITH OF OF ASSET ON NET GAIN
PARTY INVOLVED DESCRIPTION OF ASSET PRICE PRICE RENTAL TRANSACTION ASSETS TRANSACTION DATE OR (LOSS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
COMPANY STOCK FUND
- ------------------
Key Trust EB Money Market Fund
(Series of Transactions) $ 922,104 None $ 922,104 $ 922,104 N/A
(Series of Transactions) $ 946,394 None 946,394 946,394 None
EMPLOYEE STOCK FUND
- -------------------
Key Trust EB Money Market Fund
(Series of Transactions) 1,144,271 None 1,144,271 1,144,271 N/A
(Series of Transactions) 1,239,238 None 1,239,238 1,239,238 None
FIXED INCOME FUND
- -----------------
Key Trust EB Money Market Fund
(Series of Transactions) 1,938,573 None 1,938,573 1,938,573 None
Key Trust EB MaGIC Fund
(Single Transaction) 4,899,092 None 4,674,294 4,899,092 $224,798
(Series of Transactions) 5,425,486 None 5,190,802 5,425,486 234,684
Key Trust Prism MaGIC Fund
(Single Transaction) 4,899,092 None 4,899,092 4,899,092 N/A
(Series of Transactions) 5,218,261 None 5,218,261 5,218,261 N/A
AMERICAN FUNDAMENTAL INVESTORS FUND
- -----------------------------------
Fundamental Fundamental Investors Inc.
Investors Inc. Common Stock
(Series of Transactions) 1,688,294 None 1,688,294 1,688,294 N/A
FIDELITY GROWTH FUND
- --------------------
Fidelity Advisors Advisors Instl. Equity
Growth Fund
(Series of Transactions) 1,668,639 None 1,668,639 1,668,639 N/A
<FN>
NOTE - Reportable transactions are single transactions or a series of
transactions in the same issue that, when aggregated, are in excess of 5%
of the current value of plan assets at the beginning of the plan year.
</TABLE>
11
<PAGE> 16
INDEPENDENT AUDITORS' CONSENT
Bearings, Inc.
We consent to the incorporation by reference in Registration Statement No.
33-65513 of Bearings, Inc. on Form S-8 of our report dated June 7, 1996,
appearing in this Annual Report on Form 11-K of the Bearings, Inc. Retirement
Savings Plan for the year ended December 31, 1995.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Cleveland, Ohio
June 25, 1996
