<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended August 31, 1998
------------------------------------------------------
OR
[_] 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 .... 1-11288 .... [Applied Power Inc.]
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
APPLIED POWER INC. 401(k) PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
APPLIED POWER INC.
13000 WEST SILVER SPRING DRIVE
BUTLER, WI 53007-1083
<PAGE>
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.
APPLIED POWER INC.
401(k) PLAN
Date: February 26, 1999 /s/ Robert C. Arzbaecher
------------------------------------
Robert C. Arzbaecher
Plan Administrative Committee Member
<PAGE>
APW 401(k) PLAN
REPORT ON AUDITS OF FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED AUGUST 31, 1998 AND 1997
AND SUPPLEMENTAL SCHEDULES
FOR THE YEAR ENDED AUGUST 31, 1998
<PAGE>
APW 401(k) Plan
Index
<TABLE>
<CAPTION>
Pages
<S> <C>
Report of Independent Accountants 2
Financial Statements:
Statements of Net Assets Available for Plan Benefits,
August 31, 1998 and 1997 3
Statements of Changes in Net Assets Available
for Plan Benefits for the years ended
August 31, 1998 and 1997 4-6
Notes to Financial Statements 7-13
Supplemental Schedules:
Item 27(a) - Schedule of Assets Held for Investment Purposes
as of August 31, 1998 14
Item 27(d) - Schedule of Reportable Transactions
for the year ended August 31, 1998 15
</TABLE>
<PAGE>
Report of Independent Accountants
APW 401(k) Plan
We were engaged to audit the financial statements and supplemental schedules of
the APW 401(k) Plan (the "Plan") as of August 31, 1998 and 1997, and for the
years then ended, as listed in the accompanying index. These financial
statements and supplemental schedules 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 plan benefits as of August
31, 1998 and 1997, and the changes in net assets available for plan benefits for
the years then ended in conformity with generally accepted accounting
principles.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of (1) assets
held for investment purposes as of August 31, 1998, and (2) reportable
transactions for the year ended August 31, 1998, are presented for purposes 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 audits 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.
PricewaterhouseCoopers LLP
Milwaukee, Wisconsin
February 19, 1999
2
<PAGE>
APW 401(k) Plan
Statements of Net Assets Available for Plan Benefits
August 31, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
Assets
Investments:
Fidelity Equity Growth (Magellan) Fund $14,952,379 $ -
Fidelity Growth Company Fund 1,579,576 -
Fidelity Intermediate Bond Fund 944,154 -
Fidelity Balanced Fund 6,814,290 -
Fidelity International Growth and Income Fund 887,585 -
Fidelity Low-Priced Stock Fund 1,730,952 -
Fidelity Managed Income Portfolio Fund 11,213,210 -
Fidelity Spartan U.S. Equity Index Portfolio Fund 6,084,184 -
APW Stock Fund 31,790,606 42,362,882
Equity and other mutual funds - 523,097
Balanced mutual fund - 68,992
Common trust fund - 47,968
Money market fund - 3,164
Fixed income mutual fund - 21,847
Participant loans 1,423,312 -
----------- -----------
Total investments 77,420,248 43,027,950
Contributions receivable - employer 3,819,311 -
Contributions receivable - participants 155,682 -
Cash - 24,118
----------- -----------
Net assets available for plan benefits $81,395,241 $43,052,068
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
APW 401(k) Plan
Statements of Changes in Net Assets Available for Plan Benefits
for the years ended August 31, 1998 and 1997
<TABLE>
<CAPTION>
Fidelity
1998 Fidelity Fidelity Fidelity International
Equity Growth Growth Intermediate Fidelity Growth and
(Magellan) Fund Company Fund Bond Fund Balanced Fund Income Fund
--------------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Additions:
Investment income:
Dividend income $ 455,039 $ 10,638 $ 36,101 $ 115,841 $ -
Interest income 37 - 4 14 -
Net appreciation (depreciation)
in fair value of investments (593,746) (114,377) 6,254 (66,505) (61,698)
--------------- ------------ ------------ ------------- -------------
Total investment income (loss) (138,670) (103,739) 42,359 49,350 (61,698)
--------------- ------------ ------------ ------------- -------------
Contributions:
Employer - - - - -
Rollovers 197,379 108,059 18,492 102,044 89,398
Participants 1,124,721 297,722 136,538 499,094 170,672
--------------- ------------ ------------ ------------- -------------
Total contributions 1,322,100 405,781 155,030 601,138 260,070
--------------- ------------ ------------ ------------- -------------
Total additions (reduction) 1,183,430 302,042 197,389 650,488 198,372
--------------- ------------ ------------ ------------- -------------
Deductions:
Distributions to participants (1,017,633) (171,380) (37,914) (505,529) (123,133)
Administrative expenses (717) (75) (58) (326) (103)
--------------- ------------ ------------ ------------- -------------
Total deductions (1,018,350) (171,455) (39,972) (505,855) (123,236)
--------------- ------------ ------------ ------------- -------------
Interfund transfers (537,837) 377,312 (23,427) 186,434 73,967
Transfers from terminated plan 15,325,136 1,071,677 808,164 6,483,223 738,482
--------------- ------------ ------------ ------------- -------------
Total transfers 14,787,299 1,448,989 784,737 6,669,657 812,449
--------------- ------------ ------------ ------------- -------------
Net increase (decrease) 14,952,379 1,579,576 944,154 6,814,290 887,585
Net assets available for plan benefits:
Beginning of year - - - - -
--------------- ------------ ------------ ------------- -------------
End of year $ 14,952,379 $ 1,579,576 $ 944,154 $ 6,814,290 $ 887,585
=============== ============ ============ ============= =============
</TABLE>
<TABLE>
<CAPTION>
Fidelity Fidelity
1998 Fidelity Managed Spartan U.S.
Low-Priced Income Portfolio Equity Index APW
Stock Fund Fund Portfolio Fund Stock Fund
----------- ---------------- -------------- ------------
<S> <C> <C> <C> <C>
Additions:
Investment income:
Dividend income $ - $ 399,920 $ 102,347 $ 19,456
Interest income 10 5 1,230
Net appreciation (depreciation)
in fair value of investments (260,301) - (199,935) (8,590,563)
----------- ---------------- -------------- ------------
Total investment income (loss) (260,301) 399,930 (97,583) (8,569,877)
----------- ---------------- -------------- ------------
Contributions:
Employer - 900,000 - 811,829
Rollovers 72,694 52,072 72,393 87,028
Participants 262,152 552,585 574,502 143,967
----------- ---------------- -------------- ------------
Total contributions 334,846 1,504,657 646,895 1,042,824
----------- ---------------- -------------- ------------
Total additions (reduction) 74,545 1,904,587 549,312 (7,527,053)
----------- ---------------- -------------- ------------
Deductions:
Distributions to participants (181,453) (992,201) (427,469) (4,163,851)
Administrative expenses (482) (602) (219) (2,872)
----------- ---------------- -------------- ------------
Total deductions (181,935) (992,803) (427,688) (4,166,723)
----------- ---------------- -------------- ------------
Interfund transfers (33,592) 129,824 681,105 1,121,500
Transfers from terminated plan 1,871,934 10,171,602 5,281,455 -
----------- ---------------- -------------- ------------
Total transfers 1,838,342 10,301,426 5,962,560 1,121,500
----------- ---------------- -------------- ------------
Net increase (decrease) 1,730,952 11,213,210 6,084,184 (10,572,276)
Net assets available for plan benefits:
Beginning of year - - - 42,362,882
----------- ---------------- -------------- ------------
End of year $ 1,730,952 $ 11,213,210 $ 6,084,184 $ 31,790,606
=========== ================ ============== ============
(continued)
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
APW 401(k) Plan
Statements of Changes in Net Assets Available for Plan Benefits, Continued
for the years ended August 31, 1998 and 1997
<TABLE>
<CAPTION>
1998 Equity
and Other Balanced Common Money Fixed Income
Additions: Mutual Funds Mutual Fund Trust Fund Market Fund Mutual Fund
------------ ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Investment income:
Dividend income $ 2,585 $ 957 $ -- $ -- $ --
Interest income -- -- -- 858 482
Net appreciation (depreciation) in
fair value of investments 30,830 2,675 814 -- 493
------------ ----------- ---------- ----------- ------------
Total investment income
(loss) 33,415 3,632 814 858 975
------------ ----------- ---------- ----------- ------------
Contributions:
Employer -- -- -- -- --
Rollover -- -- -- -- --
Participants -- -- -- -- --
------------ ----------- ---------- ----------- ------------
Total contributions -- -- -- -- --
------------ ----------- ---------- ----------- ------------
Total additions 33,415 3,632 814 858 975
------------ ----------- ---------- ----------- ------------
Deductions:
Distributions to participants (4,222) -- -- -- --
Administrative expenses -- -- -- -- --
------------ ----------- ---------- ----------- ------------
Total deductions (4,222) -- -- -- --
------------ ----------- ---------- ----------- ------------
Interfund transfers (552,290) (72,624) (48,782) (4,022) (22,822)
Transfers from terminated plan -- -- -- -- --
------------ ----------- ---------- ----------- ------------
Total transfers (552,290) (72,624) (48,782) (4,022) (22,822)
------------ ----------- ---------- ----------- ------------
Net increase (decrease) (523,097) (68,992) (47,968) (3,164) (21,847)
Beginning of year 523,097 68,992 (47,968) 3,164 21,847
------------ ----------- ---------- ----------- ------------
End of year $ -- $ -- $ -- $ -- $ --
============ =========== ========== =========== ============
</TABLE>
<TABLE>
<CAPTION>
1998
Participant
Additions: Cash Loans Other Total
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Investment income:
Dividend income $ -- $ -- $ -- $ 1,142,884
Interest income -- 66,673 -- 69,313
Net appreciation (depreciation) in
fair value of investments -- -- -- (9,846,059)
------------ ----------- ----------- -----------
Total investment income
(loss) -- 66,673 -- (8,633,862)
------------ ----------- ----------- -----------
Contributions:
Employer -- -- 3,819,311 5,531,140
Rollover -- -- -- 799,559
Participants -- -- 155,682 3,917,635
------------ ----------- ----------- -----------
Total contributions -- -- 3,974,993 10,248,334
------------ ----------- ----------- -----------
Total additions -- 66,673 3,974,993 1,614,472
------------ ----------- ----------- -----------
Deductions:
Distributions to participants (134) (43,840) -- (7,668,759)
Administrative expenses -- -- -- (5,454)
------------ ----------- ----------- -----------
Total deductions (134) (43,840) -- (7,674,213)
------------ ----------- ----------- -----------
Interfund transfers (23,984) 268,671 (1,519,433) --
Transfers from terminated plan -- 1,131,808 1,519,433 44,402,914
------------ ----------- ----------- -----------
Total transfers (23,984) 1,400,479 -- 44,402,914
------------ ----------- ----------- -----------
Net increase (decrease) (24,118) 1,423,312 3,974,993 38,343,173
Beginning of year 24,118 -- -- 43,052,068
------------ ----------- ----------- -----------
End of year $ -- $ 1,423,312 $ 3,974,993 $81,395,241
============ =========== =========== ===========
(concluded)
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
APW 401(k) Plan
Statements of Changes in Net Assets Available for Plan Benefits, Continued
for the years ended August 31, 1998 and 1997
<TABLE>
<CAPTION>
Equity
APW and Other Balanced Common Money Fixed Income
1997 Stock Fund Mutual Funds Mutual Fund Trust Fund Market Fund Mutual Fund
------------ ------------ ----------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Additions:
Investment income:
Dividend income $ 80,988 $ 5,244 $ 1,478 $ 3,905 $ -- $ 1,205
Interest income -- -- -- -- 4,613 --
Net appreciation in fair value
of investments 22,642,469 128,475 10,957 2,540 -- 663
------------ ------------ ----------- ---------- ----------- ------------
Total investment income 22,723,457 133,719 12,435 6,445 4,613 1,868
------------ ------------ ----------- ---------- ----------- ------------
Employer contributions -- -- -- -- 1,600,000 --
------------ ------------ ----------- ---------- ----------- ------------
Total additions 22,723,457 133,719 12,435 6,445 1,604,613 1,868
Deductions:
Distributions to participants (2,573,210) (39,736) -- -- -- --
Interfund transfers 2,124,275 82,551 (1,133) 3,867 (1,620,852) 3,341
------------ ------------ ----------- ---------- ----------- ------------
Net increase (decrease) 22,274,522 176,534 11,302 10,312 (16,239) 5,209
Net assets available for plan benefits
Beginning of year 20,088,360 346,563 57,690 37,656 19,403 16,638
------------ ------------ ----------- ---------- ----------- ------------
End of year $ 42,362,882 $ 523,097 $ 68,992 $ 47,968 $ 3,164 $ 21,847
============ ============ =========== ========== =========== ============
</TABLE>
<TABLE>
<CAPTION>
1997 Cash Total
------------ -----------
<S> <C> <C>
Additions:
Investment income:
Dividend income $ -- $ 92,820
Interest income -- 4,613
Net appreciation in fair value
of investments -- 22,785,104
------------ ------------
Total investment income -- 22,882,537
------------ ------------
Employer contributions 600,000 2,200,000
------------ ------------
Total additions 600,000 25,082,537
Deductions:
Distributions to participants (250) (2,613,196)
Interfund transfers (592,049) --
------------ ------------
Net increase (decrease) 7,701 22,469,341
Net assets available for plan benefits
Beginning of year 16,417 20,582,727
------------ ------------
End of year $ 24,118 $ 43,052,068
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
APW 401(k) Plan
Notes to Financial Statements
1. Plan Description:
The following description of the APW 401(k) Plan provides only general
information. Participants should refer to the Summary Plan Description for a
more complete description of the Plan's provisions.
a. General: Prior to January 1, 1998, Applied Power Inc. (the "Company")
operated two retirement savings plans, the Applied Power Inc. Employee
Stock Ownership Plan (the "ESOP Plan") which had an August 31 plan year
end, and the Applied Power Inc. Employee Savings Plan (the "Savings Plan")
which had a December 31 plan year end. The ESOP Plan operated as an
employee stock ownership plan as defined in Section 4975(e)(7) of the
Internal Revenue Code. The Savings Plan operated as a 401(k) salary
reduction plan. On January 1, 1998, the Savings Plan was merged with the
ESOP Plan to become the APW 401(k) Plan (the "Plan"). The Savings Plan and
ESOP Plan were merged to consolidate trustee and administrative functions.
Beginning January 1, 1998, The Plan operates as a 401(k) salary reduction
plan. Generally, all employees of the Company who are scheduled to work at
least 1,000 hours in a one-year period are immediately eligible to
participate in the Plan. The Plan allows participants to reduce their
taxable income by making voluntary contributions to the Plan on a "before-
tax" basis in an amount representing a fixed percent of their defined
compensation, not to exceed 19%, subject to certain Internal Revenue
Service limitations. Participants are also allowed to make additional
contributions not to exceed 5% of their defined compensation on an "after-
tax" basis, subject to certain limitations. Plan participants have the
ability to self-direct their contributions into various funds.
For the period from September 1, 1997 to December 31, 1997 and for fiscal
year 1997, the provisions of the ESOP Plan were in effect. Generally, all
employees of the Company and its domestic subsidiaries were eligible to
participate in the ESOP Plan. Employees of acquired companies were added
to the ESOP Plan at the discretion of the Company. An employee became
eligible to participate in the ESOP Plan on the first date on which the
employee completed an hour of service if such employee attained at least
1,000 hours of service during the plan year.
On January 1, 1998, $44,402,914 of net assets available for plan benefits
were transferred into the Plan from the Savings Plan. Also on January 1,
1998, Fidelity Institutional Retirement Services Company became the
trustee of the Plan.
7
<PAGE>
APW 401(k) Plan
Notes to Financial Statements, Continued
1. Plan Description, Continued:
b. Contributions: The Company matches the first $300 of pre-tax
contributions by employees who were employed on the last day of the plan
year, even if the employee was not contributing on the last day (After-
tax contributions are not matched), plus an additional 25% of
contributions between $300 and 6% of the participant's eligible
compensation.
At the end of each plan year, the Company makes a "core" contribution to
the accounts of all eligible participants. The core contribution is
equal to 3% of defined compensation for that plan year, subject to
certain limitations. Core contributions are to be used to buy shares of
the APW Stock Fund. Participants who are age 50 or older and fully
vested are eligible to invest one-half of their core contribution
account into any of the investment funds available under the Plan.
For the period from September 1, 1997 to December 31, 1997 and for
fiscal year 1997, under the ESOP Plan provisions, eligible participants
received contributions equaling 3% of qualified compensation for each
plan year, plus such additional amounts as the Board of Directors of the
Company determined from time to time. The percentage of pay and any
discretionary contributions were made in cash or qualifying employer
securities; however, all contributions were to be made in cash if there
was a stock obligation outstanding.
c. Investment Options: The Plan allows participants to direct the
investment of their contributions among several investment funds. The
funds are maintained by Fidelity Institutional Retirement Services
Company. As of August 31, 1998, the Plan provided the following
investment funds in which participant contributions to the Plan could be
invested:
Equity Growth (Magellan) Fund: Invests in common stocks seeking long-
term capital appreciation.
Growth Company Fund: Invests in stocks of companies with above-average
growth potential, aggressively seeking investment growth.
Intermediate Bond Fund: Invests in fixed income obligations with
intermediate maturities, seeking high levels of current income.
Balanced Fund: Invests in common and preferred stocks and bonds seeking
as much income as possible, consistent with preservation of capital.
International Growth and Income Fund: Invests in foreign securities
seeking capital growth and current income.
Low-Priced Stock Fund: Invests in equity securities that are considered
by the fund's management to be low-priced at the time of purchase ($25
or less per share), seeking long-term capital appreciation.
8
<PAGE>
APW 401(k) plan
Notes to Financial Statements, continued
1. Plan Description, Continued:
c. Investment Options, Continued: Managed Income Portfolio Fund: Invests in
short and long-term investment contracts, seeking preservation of
capital and a competitive level of income over time.
Spartan U.S. Equity Index Portfolio Fund: Invests in stocks of companies
on the Standard & Poor's 500 Index, and seeks as much income as
possible, consistent with preservation of capital.
Under the provisions of the ESOP Plan for the period from September 1,
1997 to December 31, 1997 and fiscal year 1997, participants who were 50
years of age or older and 100% vested were provided the following
investment options, in addition to the APW Stock Fund, to provide
diversification. The funds were maintained by Firstar Trust Company:
Equity and Other Mutual Funds: Invests in stocks which provide
investment returns that mirror the Standard & Poor's 500 Index.
Balanced Mutual Fund: Invests in stocks, bonds, and money market
instruments with the objective to have the investment grow in value over
time, while also generating some immediate income. The fixed income
portion of the fund is invested in investment-grade quality bonds.
Common Trust Fund: Invests in the stock of small-to-medium-sized US
companies whose stock, the fund manager believes, has the potential to
increase in value.
Money Market Fund: Invests in a broad range of government, bank and
commercial money market securities.
Fixed Income Mutual Fund: Invests in bonds which have intermediate and
longer maturity dates and, in theory, offer moderate risk. The goal is
to produce an annual rate of total return that is comparable, before
fund expenses, to that of the Lehman Brothers Government/Corporate Bond
Index.
d. Participant Accounts: Each participant's account is credited with the
participant's contribution, the Company's matching contribution, and any
additional Company contributions, an allocation of Plan earnings, and
charged with an allocation of administrative expenses. Allocations of
Plan earnings and administrative expenses are determined in accordance
with the proportion of a participant's account to all accounts. The
benefit to which a participant is entitled is the benefit that can be
provided from the participant's vested account.
9
<PAGE>
APW 401(k) Plan
Notes to Financial Statements, Continued
1. Plan Description, Continued:
e. Vesting: Participants are immediately vested in their salary deferred
and voluntary contributions. As of January 1, 1998, vesting in the
Company's matching contribution portion of their accounts plus actual
earnings thereon is based on years of continuous service. Benefits from
employer contributions are vested at 50% after three years of credited
service and 100% after five years of credited service.
As of January 1, 1998, participant accounts under the Savings Plan and
ESOP Plan are subject to special vesting provisions as follows:
<TABLE>
<CAPTION>
Years of Vesting Savings Plan Company Plan Matching "Care" Contribution
Service Contribution Account Contribution Account Account
- ---------------- -------------------- -------------------- -------------------
<S> <C> <C> <C>
Less than 3 100% vested 50% after 3 years; 50% after 3 years;
100% after 5 years 100% after 5 years
3 or more 100% vested 100% vested 50% after 3 years;
100% after 5 years
</TABLE>
f. Payment of Benefits: Withdrawals are subject to the limitations of
Section 401(k) of the Internal Revenue Code. Upon retirement or death,
the participant or his beneficiary is entitled to 100% of the
participant's and vested employer contributions plus allocated earnings
of the Plan. Participants or their beneficiaries can elect to receive
their benefit payments either in a lump sum or in installments. Benefit
payments requested but unprocessed amounted to approximately $420,000
and $134,000 at August 31, 1998 and 1997, respectively.
g. Participant Loans: Participants may borrow from their fund accounts,
with the exception of amounts designated as core contributions, a
minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50%
of their account balance. Loan transactions are treated as a transfer to
(from) the investment fund from (to) the Participant Loans fund. Loan
terms range from 1 to 5 years or up to 20 years for the purchase of a
primary residence. The loans are collateralized by the balance in the
participant's account and bear interest at prime plus one percent.
Principal and interest are payable ratably through payroll deductions.
h. Forfeited Accounts: Any non-vested portions of terminated accounts will
be used to reduce future employer contributions. Forfeitures amounted
to $689,000 for the Plan year ended August 31, 1998.
10
<PAGE>
APW 401(k) Plan
Notes to Financial Statements, Continued
2. Summary of Significant Accounting Policies:
The following is a summary of the Plan's significant accounting policies.
a. Estimates: The Plan prepares its financial statements in conformity with
generally accepted accounting principles, which requires management to
make estimates and assumptions which affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
b. Basis of Presentation: The accompanying financial statements have been
prepared on the accrual basis of accounting, including investment
valuation and income recognition. Investments of the Plan are stated at
fair market value determined by quoted prices in an active market.
Purchases and sales of investments are recorded on a trade date basis.
c. Investment Income: In accordance with the policy of stating investments
at fair value, net appreciation or depreciation in the fair value of
investments includes realized and unrealized gains and losses for the
year. Interest income is recorded on the accrual basis and dividend
income is recorded when reported as received by the trustee.
d. Contributions: Contributions from employees are recorded in the period
the Company makes payroll deductions from the Plan participants.
Employer contributions are funded in the year following the plan year.
e. Payment of Benefits: Benefits are recorded when paid.
f. Administrative Expenses: Certain fees charged by the trustee are paid by
the Plan. All other administrative expenses are paid by the Company at
no cost to the Plan.
Under the provisions of the ESOP Plan for the period from September 1,
1997 to December 31, 1997 and fiscal year 1997, all expenses incurred by
the ESOP Plan, including periodic fees charged by the service providers
to the ESOP Plan, were reimbursed or paid directly by the Company.
11
<PAGE>
APW 401(k) Plan
Notes to Financial Statements, Continued
3. Tax Status:
The Plan obtained its latest determination letter as of May 8, 1998, 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 since receiving that determination letter
and applied for a new determination. However, the plan administrator
believes that the Plan is currently designed and being operated in
compliance with the applicable requirements of the Internal Revenue Code.
Therefore, they believe that the Plan was qualified and the related trust
was tax-exempt as of the financial statement date.
4. 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. In the event of
Plan termination, participants will become fully vested in their accounts.
5. Related Party Transactions:
Plan investments are held and managed by Fidelity Institutional Retirement
Services Company. Fidelity is the custodian of the assets of the Plan and
processes the daily transactions of the Plan. The APW Stock Fund invests in
the stock of the Company. Therefore, transactions with Fidelity and the
Company qualify as party-in-interest transactions. These transactions are
not, however, considered prohibited transactions under section 408(b) of
the ERISA regulations. At August 31, 1998 and 1997, 41% and 98%,
respectively, of the Plan's total investments were invested in the APW
Stock Fund.
6. Reconciliation of Financial Statements to Form 5500:
The following is a reconciliation of net assets available for plan benefits
per the financial statements to the Form 5500 at August 31, 1998 and 1997.
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
Net assets available for pain benefits per the financial statements $81,395,241 $43,052,068
Amounts allocated to withdrawing participants (420,655) (133,941)
----------- -----------
Net assets available for plan benefits per Form 5500 $80,974,586 $42,918,127
=========== ===========
</TABLE>
12
<PAGE>
APW 401(k) Plan
Notes to Financial Statements, Continued
6. Reconciliation of Financial Statements to Form 5500, Continued:
The following is a reconciliation of distributions to participants per the
financial statements to benefits paid to participants per the Form 5500 for the
year ended August 31, 1998.
Distributions to participants per the financial statements $7,668,759
Add: Amounts allocated to withdrawing participants at
August 31, 1998 420,655
Less: Amounts allocated to withdrawing participants at
August 31, 1997 (133,941)
----------
Benefits paid to participants per the Form 5500 $7,955,473
==========
Amounts allocated to withdrawing participants are recorded on Form 5500 for
benefit claims that have been processed and approved for payment prior to August
31 but not yet paid as of that date.
13
<PAGE>
APW 401(k) Plan
Item 27a -- Schedule of Assets Held for Investment Purposes
August 31, 1998
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
- -------- ---------------------------------- ----------------------------- ------------ ------------
Identity of Issuer,
Borrower, Lessor Current
or Similar Party Description of Investment Cost Value
- -------- ---------------------------------- ----------------------------- ------------ ------------
<S> <C> <C> <C> <C>
* Fidelity Investments Institutional Equity Growth (Magellan) Fund
Service Company $ 12,304,659 $ 14,952,379
* Fidelity Investments Institutional Growth Company
Service Company 1,727,286 1,579,576
* Fidelity Investments Institutional Intermediate Bond Fund
Service Company 918,561 944,154
* Fidelity Investments Institutional Balanced Fund
Service Company 6,073,920 6,814,290
* Fidelity Investments Institutional Intermediate Growth and Income
Service Company Fund 935,063 887,585
* Fidelity Investments Institutional Low-Priced Stock
Service Company 1,826,651 1,730,952
* Fidelity Investments Institutional Managed Income Portfolio
Service Company Fund 11,007,870 11,213,210
* Fidelity Investments Institutional Spartan U.S. Equity Index
Service Company Portfolio Fund 4,547,094 6,084,184
* Applied Power Inc. APW Stock Fund 47,710,438 31,790,606
* Plan Participants Participants loans, interest
from 8 - 11% 1,423,312
------------
$ 77,420,248
============
</TABLE>
* Party-in-interest transactions, which are exempt from prohibited transaction
rules under Section 408(b) ERISA
See Report of Independent Accountants.
14
<PAGE>
APW 401 (K) Plan
Item 27d - Schedule of Reportable Transactions
for the year ended August 31, 1998
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column G Column I
- ---------------------------- ------------------- ------------ ----------- ------------ -----------
Description of Purchase Selling Cost of Net Gain
Identity of Party Involved Asset Price Price Asset or (Loss)
- ---------------------------- ------------------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Fidelity Equity Growth $ 2,697,440 $ 2,476,450 $ 1,995,163 $ 481,287
(148) purchases (Magellan) Fund
(123) sales
Fidelity Balanced Fund 1,365,789 968,215 858,199 110,016
(136) purchases
(110) sales
Fidelity Managed Income 3,296,099 2,254,491 2,254,491 -
(130) Portfolio Fund
(126)
Fidelity Spartan U.S. 2,007,866 1,005,200 753,751 251,449
(131) purchases Equity Index Fund
(99) sales
Applied Power Inc. APW Stock Fund 2,796,204 4,213,230 1,721,015 2,492,215
(146) purchases
(137) sales
</TABLE>
(A) The numbers disclosed in parentheses represent the number of transactions in
a series of transactions. A single transaction is reported as a part of a
series of transactions, whenever possible.
(B) Column E, Lease Rental, is omitted as it is not applicable.
(C) Column F, Expense Incurred with Transaction, is omitted, as the price
reported is net of commission or expense, if any.
(D) Column H, Current Value of Asset on Transaction Date, is omitted, as there
are no deviations of purchase price and selling price from the current value
on the transaction date.
See Report of Independent Accountants.
15
<PAGE>
Exhibit 23.1
CONSENT OF PRICEWATERHOUSECOOPERS LLP
We consent to the incorporation by reference in Registration Statements of
Applied Power, Inc. on Form S-3 No. 333-47493, Forms S-8 No. 33-18140, No. 33-
21250, No. 33-24197, No. 33-38719, No. 33-38720,. No. 33-62658, No. 333-42353,
No. 333-46469, No. 333-61279, No. 333-61281, and No. 333-61389 of our report
dated February 19, 1999, appearing in this report on Form 11-K of APW 401(k)
Plan for the year ended August 31, 1998.
/s/ PricewaterhouseCoopers LLP
Milwaukee, Wisconsin
February 25, 1999
