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
For the year ended December 31, 1999
[ ] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the transition period from ___________to___________
Commission file number 0-3041
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below.
JUSTIN INDUSTRIES, INC. EMPLOYEE STOCK OWNERSHIP PLAN
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
JUSTIN INDUSTRIES, INC.
2821 West 7th Street
Fort Worth, Texas 76107
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
JUSTIN INDUSTRIES, INC. EMPLOYEE STOCK OWNERSHIP PLAN
(Name of Plan)
/S/ RICHARD J. SAVITZ
Richard J. Savitz
Chief Financial Officer
June 27, 2000
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ERNST & YOUNG LLP
REPORT OF INDEPENDENT AUDITORS
Plan Participants
Justin Industries, Inc.
Employee Stock Ownership Plan
We have audited the accompanying statements of net assets available for benefits
of Justin Industries, Inc. Employee Stock Ownership Plan as of December 31, 1999
and 1998, and the related statement of changes in net assets available for
benefits for the year ended December 31, 1999. 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 auditing standards generally accepted
in the United States. 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 Plan at
December 31, 1999 and 1998, and the changes in its net assets available for
benefits for the year ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed 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 at end of year December 31, 1999, and
reportable transactions and non-exempt transactions for the year then ended, are
presented for purposes of additional analysis and are not a required part of the
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. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules 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 basic financial statements taken as a
whole.
/S/ ERNST & YOUNG LLP
Fort Worth, Texas
June 14, 2000
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JUSTIN INDUSTRIES, INC. EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Net Assets Available for Benefits
December 31,
------------------------------
1999 1998
------------- -------------
Assets:
Cash $ 1,361 $ -
Investments, at fair value 54,011,953 44,709,739
Participants' contributions receivable 396,689 311,522
Company contribution receivable 107,789 672,847
Dividends and interest receivable 158,443 151,972
------------- -------------
Total assets 54,676,235 45,846,080
Liabilities:
Participants' contributions refundable 92,489 -
------------- -------------
Net assets available for benefits $ 54,583,746 $ 45,846,080
============= =============
Statement of Changes in Net Assets Available for Benefits
Year Ended
December 31, 1999
-----------------
Investment income:
Dividends and interest $ 1,472,473
Net appreciation in fair value of investments 6,562,881
-----------------
Total investment income 8,035,354
Contributions:
Participants 3,198,810
Company 1,300,736
-----------------
Total contributions 4,499,546
Participants' withdrawals (3,797,234)
-----------------
8,737,666
Net assets available for benefits at
beginning of year 45,846,080
-----------------
Net assets available for benefits at
end of year $ 54,583,746
=================
See accompanying notes.
===============================================================================
JUSTIN INDUSTRIES, INC. EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1999
1. DESCRIPTION OF PLAN
The following description of the Justin Industries, Inc. (the Company) Employee
Stock Ownership Plan (the Plan) provides only general information. Participants
should refer to the Plan documents for a more complete description of the Plan's
provisions.
a. General. All employees (except those employees covered under collective
bargaining agreements that do not provide for plan participation) of
participating employers are eligible to participate in the Plan beginning on
January l or July l after each employee has completed one year of service
and reached the age of twenty-one. The Plan is subject to the provisions
of the Employee Retirement Income Security Act of 1974 (ERISA).
b. Contributions. The Plan is primarily funded by two types of contributions:
Employee voluntary pre-tax contributions through salary deferrals, limited
to 15 percent of each employee's eligible earnings, but not more than the
maximum allowed by law. Employee contributions are subject to Internal
Revenue Code (the Code) limitations. The maximum contribution allowed by
the Company was $8,000 in 1999 and 1998.
Company matching contributions are equal to a percentage of each employee's
voluntary pre-tax contributions up to 5 percent of the employee's eligible
earnings. The Board of Directors annually determines the matching
percentage. In 1999, all employees' contributions were matched at 50
percent up to a maximum of $4,000.
Any employee of the Company may roll over into the Plan distributions made
from a previous employer's qualified retirement plan.
c. Participants' Accounts. Each participant's account is credited with the
employee's contribution and an allocation of the Company's contribution and
investment earnings. Allocations are based on participants' earnings or
account balances, as defined. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's account.
d. Vesting. Participants have a fully vested, nonforfeitable right to employee
contributions. Company matching contributions are fully vested and
nonforfeitable once allocated.
e. Investment Options. Employee contributions prior to September 1, 1994 and
all Company matching contributions are invested in Company common stock.
Subsequent to September 1, 1994, participants direct investments from
employee contributions among a combination of Company common stock and
investment funds. There are nine available investment funds participants
may choose from.
f. Payment of Benefits. Withdrawals of employer contributions from the Plan by
participants can be made at normal retirement (age 65), early retirement
(age 55), when a participant dies, becomes disabled or a break in service
occurs. Distributions upon withdrawal are made in accordance with the Plan
document. The Plan document does not allow participant loans.
===============================================================================
2. SUMMARY OF ACCOUNTING POLICIES
The Plan's investments are stated at fair value. Shares of registered
investment companies are valued at quoted market prices, which represent the net
asset value of shares held by the Plan at end of year. The Company stock is
valued at its quoted market price. Gains and losses on the sale of investments
are accounted for on an average cost basis.
Shares in Merrill Lynch Retirement Preservation Trust are valued at cost which
approximates fair value. Purchases and sales of securities are recorded on a
trade-date basis. Dividends are recorded on the ex-dividend date.
The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates that affect the amounts reported in the financial statements and
supplemental schedules and accompanying notes. Actual results could differ from
those estimates.
Contributions by participants and participating employers are accounted for on
the accrual basis once determined. Benefit payments are recorded when paid.
Certain 1998 amounts have been reclassified to conform to the 1999 presentation.
3. TAX STATUS OF PLAN
The Plan has received a determination letter from the Internal Revenue Service
dated October 26, 1994, stating that the Plan is qualified under Section 401(a)
of the Code and, therefore, the related trust is exempt from taxation. Once
qualified, the Plan is required to operate in conformity with the Code to
maintain its qualification. The Plan's Administrative Committee believes the
Plan is being operated in compliance with the applicable requirements of the
Code and, therefore, believes that the Plan is qualified and the related trust
is tax exempt. The Plan has been amended since receiving the determination
letter. However, the Plan administrator and the Plan's tax counsel believe that
the Plan is designed and is currently being operated in compliance with the
applicable provisions of the Code.
4. PARTICIPANTS' CONTRIBUTIONS REFUNDABLE
As a result of nondiscrimination requirements relating to contributions, certain
"highly compensated" employees received refunds in 2000 of excess 1999
contributions. Such amounts have been accrued in the accompanying financial
statements for 1999 as a liability of the Plan as of the end of the Plan year.
5. ADMINISTRATIVE EXPENSES
All expenses of Plan administration may be paid out of Plan assets unless paid
by the Company at its discretion. In 1999, the Company elected to pay directly
all administrative expenses of the Plan with the exception of brokerage
commissions and transfer taxes on stock purchases, which are included in the
cost of the stock purchased.
===============================================================================
6. INVESTMENT ACTIVITY
Net assets available for benefits at December 31, 1999 and 1998 and changes in
net assets available for benefits for the year ended December 31, 1999 for non-
participant and participant directed investment activity are as follows:
<TABLE>
Year Ended December 31, 1999
-----------------------------------------------------------------------------------------
<CAPTION>
Justin
Industries Inc. All
Common Stock Participant
(Non-Participant Directed
Directed Portion) Investments Total
----------------- --------------- ---------------
<S> <C> <C> <C>
Dividends and interest income $ 450,838 $ 1,021,635 $ 1,472,473
Net appreciation in fair
value of investments 3,530,611 3,032,270 6,562,881
Contributions:
Participants - 3,198,810 3,198,810
Company 1,300,736 - 1,300,736
Participants' withdrawals (2,218,159) (1,579,075) (3,797,234)
Interfund transfers (160,142) 160,142 -
----------------- --------------- ---------------
2,903,884 5,833,782 8,737,666
Net assets available for benefits
at beginning of year 29,603,126 16,242,954 45,846,080
----------------- --------------- ---------------
Net assets available for benefits
at end of year $ 32,507,010 $ 22,076,736 $ 54,583,746
================= =============== ===============
</TABLE>
The fair values of individual investments that represent 5% or more of the
Plan's net assets available for benefits are as follows:
December 31,
---------------------------
1999 1998
------------ ------------
Van Kampen Emerging Growth Fund Cl A $ 5,220,200 $ -
Justin Industries, Inc. Common Stock 44,054,523 37,926,089
Growth Fund for Investment and Retirement - 2,963,736
During 1999 the Plan's investments (including purchased and sold as well as held
during the year) appreciated in fair value as determined by quoted market prices
as follows:
Net
Appreciation
------------
Investment Funds $ 1,624,900
Company Common Stock 4,937,981
------------
$ 6,562,881
============
===============================================================================
7. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA.
8. PLAN AMENDMENT
The Plan was amended in 1999 to provide a special mid-year matching ESOP
employer contribution to certain participants who were employees of Nocona Boot
Company whose employment was terminated due to the 1999 closing of the plant in
Nocona, Texas.
9. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The Department of Labor (DOL) requires realized and unrealized gains and losses
to be calculated in a different manner than required by generally accepted
accounting principles. Realized and unrealized losses using the DOL's method
for 1999 amounted to $248,273 and $6,314,608, respectively.
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
Year Ended December 31,
-------------------------
1999 1998
----------- -----------
Net assets available for benefits per the
financial statements $54,583,746 $45,846,080
Amounts allocated to withdrawing participants (3,352,238) (691,698)
----------- -----------
Net assets available for benefits per the
Form 5500 $51,231,508 $45,154,382
=========== ===========
Year Ended
December 31,
1999
-------------
Participants' withdrawals per the financial statements $ 3,797,234
Add amounts allocated to withdrawing participants at
December 31, 1999 3,352,238 (1)
Less amounts allocated to withdrawing participants at
December 31, 1998 (691,698)
------------
Participants' withdrawals per the Form 5500 $ 6,457,774
============
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
December 31 but not yet paid as of that date.
(1) Includes withdrawal payments related to employees terminated during the
last half of 1999 in connection with the closure of two company
manufacturing facilities.
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JUSTIN INDUSTRIES, INC. EMPLOYEE STOCK OWNERSHIP PLAN
EIN: 75-0102185 Plan Number: 014
Schedule G, Part IV - Schedule of Nonexempt Transactions
Year Ended December 31, 1999
(c) Description of
(b) Relationship to Transactions Including
Plan, Employer or Maturity Date, Rate of
a) Identity of Other Party-in- Interest, Collateral
Party Involved Interest Par or Maturity value
----------------------- ---------------------- -----------------------------
Justin Industries, Inc. Employer/Plan Sponsor Contributions of $265,630 for
the January payroll were
deposited on March 11, 1999.
Justin Industries, Inc. Employer/Plan Sponsor Contributions of $161,550 for
the February payroll were
deposited on March 24, 1999.
Justin Industries, Inc. Employer/Plan Sponsor Contributions of $135,338 for
the February payroll were
deposited on March 29, 1999.
Justin Industries, Inc. Employer/Plan Sponsor Contributions of $53,717 for
the February payroll were
deposited on April 1, 1999.
Justin Industries, Inc. Employer/Plan Sponsor Contributions of $150,944 for
the July payroll were
deposited on August 25, 1999.
===============================================================================
<TABLE>
JUSTIN INDUSTRIES, INC. EMPLOYEE STOCK OWNERSHIP PLAN
EIN: 75-0102185 Plan Number: 014
Schedule H; Line 4i - Schedule of Assets Held for Investment Purposes at End of Year
December 31, 1999
<CAPTION>
(c) Description
of Investments
Including
Maturity Date,
Rate of Interest,
(b) Identity of Collaterial (e)
Issue, Borrower, Par, or Current
(a) Lessor or Similar Party Maturity Value (d) Cost Value
--- ------------------------------ ------------------ ----------- -----------
<S> <C> <C> <C> <C>
Van Kampen American Value Fund 4,371 shares ** $ 102,861
Blackrock Balanced Port Cl A 2,781 shares ** 57,751
Merrill Lynch S&P 500 Index
Fund Cl A 13,670 shares ** 246,333
Merrill Lynch Aggregate
Bond Index 617 shares ** 6,076
Oppenheimer Quest Balanced
Value Cl A 25,600 shares ** 404,229
Van Kampen Emerging Growth
Fund Cl A 59,748 shares ** 5,220,200
AIM Global Growth & Income
Fund Cl A 208,406 shares ** 1,563,045
Merrill Lynch Capital Fund
Class A 42,357 shares ** 1,358,404
Merrill Lynch Retirement
Preservation Trust 998,531 shares ** 998,531
* Justin Industries, Inc.
Common Stock (Directed and
Non-Directed Investments) 2,961,649 shares $24,267,880 44,054,523
-----------
$54,011,953
===========
<FN>
* Indicates party-in-interest to the plan.
** Participant directed investment, therefore cost information not required.
</FN>
</TABLE>
===============================================================================
<TABLE>
JUSTIN INDUSTRIES, INC. EMPLOYEE STOCK OWNERSHIP PLAN
EIN: 75-0102185 Plan Number: 014
Schedule H; Line 4j - Schedule of Reportable Transactions
Year Ended December 31, 1999
<CAPTION>
(c) (i) Net
(a) Identity of (b) Description Purchase (d) Selling (g) Cost of Gain or
Party Involved of Assets Price Price Asset (Loss)
------------------------ ----------------------- ----------- ----------- ----------- ----------
Category (iii) - series of transactions in excess of 5% of plan assets:
<S> <C> <C> <C> <C> <C>
Justin Industries, Inc. Justin Industries, Inc.
Common Stock $4,540,971 $ - $4,540,971 $ -
Justin Industries, Inc. Justin Industries, Inc.
Common Stock $ - $2,615,049 $1,830,912 $ 784,137
<FN>
Sections (e) and (f) are not applicable.
Section (h) values were equal to the corresponding purchase or selling price.
Note: There were no category (i), (ii), or (iv) reportable transactions
during 1999.
Note: The above amounts for Justin Industries, Inc. Common Stock include both
participant and non-participant directed investment purchases and sales.
The non-participant directed activity included in this fund was not
separately determinable.
</FN>
</TABLE>
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