<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1993
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 0-10181
ELJER TAX REDUCTION INVESTMENT PLAN
(Full Title of Plan)
ELJER INDUSTRIES, INC.
17120 DALLAS PARKWAY
DALLAS, TEXAS 75248
(Name of Issuer of the Securities Held Pursuant to the Plan
and
the Address of its Principal Executive Office)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Administrative and Investment Committee has duly caused
this annual report to be signed by the undersigned thereunto duly
authorized.
Eljer Tax Reduction Investment Plan
June 29, 1994
By: /s/ Henry W. Lehnerer
---------------------
Henry W. Lehnerer
Member of the Administrative
and Investment Committee
By: /s/ Charles R. Wackenhuth
-------------------------
Charles R. Wackenhuth
Member of the Administrative
and Investment Committee
By: /s/ Brooks F. Sherman
---------------------
Brooks F. Sherman
Member of the Administrative
and Investment Committee
<PAGE>
ELJER INDUSTRIES, INC.
TAX REDUCTION INVESTMENT PLAN
Financial Statements
As Of December 31, 1993 And 1992
Together With Report Of Independent Public Accountants
<PAGE>
ELJER INDUSTRIES, INC.
TAX REDUCTION INVESTMENT PLAN
-----------------------------
TABLE OF CONTENTS
-----------------
Page
----
Report of Independent Public Accountants F-1
Financial Statements:
Statements of Net Assets and Participants' Equity F-2
Statements of Changes in Net Assets
and Participants' Equity F-3
Notes to Financial Statements F-4
Schedules:
I - Supplemental Schedule of Assets Held for Investment
Purposes at December 31, 1993 (Item 27a) F-8
II - Supplemental Schedule of Reportable Transactions
for the Year Ended December 31, 1993 (Item 27d) F-9
Exhibit 24 - Consent of Independent Public Accountants,
Arthur Andersen & Co. F-11
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Participants and the Administrative and Investment Committee
of the Eljer Tax Reduction Investment Plan:
We have audited the accompanying statements of net assets and
participants' equity of the Eljer Tax Reduction Investment Plan
(the "Plan") as of December 31, 1993 and 1992, and the related
statements of changes in net assets and participants' equity for
each of the three years in the period ended December 31, 1993.
These financial statements and the schedules referred to below
are the responsibility of the Administrative and Investment
Committee of the Plan. Our responsibility is to express an
opinion on these financial statements and schedules 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 and
participants' equity of the Plan as of December 31, 1993 and
1992, and the changes in its net assets and participants' equity
for each of the three years in the period ended December 31,
1993, in conformity with generally accepted accounting
principles.
Our audits were made for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental
schedules listed in the table of contents 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 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.
ARTHUR ANDERSEN & CO.
Dallas, Texas,
June 6, 1994
<PAGE>
ELJER INDUSTRIES, INC.
TAX REDUCTION INVESTMENT PLAN
-----------------------------
STATEMENTS OF NET ASSETS AND PARTICIPANTS' EQUITY
-------------------------------------------------
AS OF DECEMBER 31, 1993 AND 1992
--------------------------------
(In thousands of dollars)
<TABLE>
<CAPTION>
1993 1992
-------- --------
<S> <C> <C>
ASSETS:
Investments at market value-
Eljer Industries, Inc., common stock $ 2,429 $ 2,610
Household International, Inc., common stock 1,340 1,473
Fixed Income Fund 6,573 6,938
Balanced Fund 1,874 -
Equity Fund 2,075 -
Fidelity Equity Income Fund - 707
Fidelity Equity Index Fund - 573
Fidelity Intermediate Bond Fund - 79
Loans to Participants 682 644
------- -------
Total investments 14,973 13,024
------- -------
Receivables-
Employer contributions 179 188
Participant contributions 158 149
Accrued dividends and interest 28 32
Loan repayments 115 22
------- -------
Total receivables 480 391
Total assets 15,453 13,415
LIABILITIES:
Refunds to participants 100 -
Loans payable to participants 102 23
Unrecognized loss 14 -
------- -------
Total liabilities 216 23
------- -------
NET ASSETS AND PARTICIPANTS' EQUITY $15,237 $13,392
======= =======
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
ELJER INDUSTRIES, INC.
TAX REDUCTION INVESTMENT PLAN
-----------------------------
STATEMENTS OF CHANGES IN NET ASSETS AND PARTICIPANTS' EQUITY
------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
----------------------------------------------------
(In thousands of dollars)
<TABLE>
<CAPTION>
1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
CONTRIBUTIONS:
Participant $ 1,862 $ 1,711 $ 1,612
Employer 719 674 624
INTEREST INCOME 468 669 507
DIVIDEND INCOME 192 4 72
NET UNREALIZED APPRECIATION (DEPRECIATION)
OF INVESTMENTS (417) 814 235
NET REALIZED GAINS ON INVESTMENTS 135 54 93
PARTICIPANT WITHDRAWALS/DISTRIBUTIONS (1,150) (1,183) (1,086)
LOAN REPAYMENTS BY PARTICIPANTS 51 29 177
LOANS MADE TO PARTICIPANTS (15) - (210)
------- ------- -------
Increase in net assets and
participants' equity 1,845 2,772 2,024
NET ASSETS AND PARTICIPANTS' EQUITY,
beginning of year 13,392 10,620 8,596
------- ------- -------
NET ASSETS AND PARTICIPANTS' EQUITY,
end of year $15,237 $13,392 $10,620
======= ======= =======
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
ELJER INDUSTRIES, INC.
TAX REDUCTION INVESTMENT PLAN
-----------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBER 31, 1993
-----------------
1. GENERAL DESCRIPTION OF THE PLAN:
--------------------------------
The Eljer Tax Reduction Investment Plan (the "Plan"), which became effective
April 1, 1989 (see Note 5), is a defined contribution plan for eligible
employees of Eljer Industries, Inc. (the "Company") and its participating
subsidiaries. Subject to certain eligibility requirements, participants may
contribute on a pretax basis ("Tax Reduction Contributions") or after-tax basis
("Investment Plan Contributions") up to 15% of their compensation to the Plan
through employee payroll deductions. The participants are fully vested in their
contributions. Each participant's contributions may, at the Company's
discretion, be matched in whole or in part by Company contributions ("Employer
Matching Contributions") at a rate determined by the Company. The amount of a
participant's contribution eligible for matching may not exceed 6% of the
participant's compensation. Each participant will become 100% vested in
Employer Matching Contributions after five years of service, upon eligibility
for normal or early retirement, death, or permanent disability. Participants
may obtain loans from the Plan up to their individual vested balance.
In the event of Plan termination, the account balance of each affected
participant shall become 100% vested. With certain exceptions, a
participant's Investment Plan Contributions may be withdrawn at any time while
Tax Reduction Contributions may not be withdrawn except for an immediate
financial hardship, as defined in the Plan, termination of employment or
attainment of age 59 1/2. Employer Matching Contributions may be withdrawn
after five years of plan participation. Withdrawals may be subject to federal
income tax.
Participants may elect to invest their contributions and the Employer Matching
Contributions, in a combination of the Company's common stock ("Eljer"), fixed
income fund ("Fixed"), the equity fund ("Equity"), or the balanced fund
("Balanced"). At December 31, 1993, the number of participants electing total
or partial investment in each of the four funds was as follows: Eljer, 166;
Fixed, 701; Equity, 344; and Balanced, 338. In addition, the Plan also has
investments in Household International, Inc. ("Household") common stock,
which was transferred from the similar Household Manufacturing, Inc. Tax
Reduction Investment Plan ("HMI Plan") (see Note 5). No contributions are
permitted into the Household fund.
Eljer Manufacturing, Inc., the sponsor, pays all administrative
expenses of the Plan and is not reimbursed by the Plan.
2. SIGNIFICANT ACCOUNTING POLICIES:
--------------------------------
The accounts of the Plan are maintained on the accrual basis of accounting.
Investments in Eljer and Household common stock and the Equity and Balanced
funds are carried at market value determined on the basis of quoted market
prices. The guaranteed investment contracts are carried at contract value,
which represents contributions made under the contracts plus interest at the
contract rates. Short-term investments are carried at cost which approximates
market. The average cost basis is used in determining gains or losses on
securities sold or distributed. Certain prior year amounts have been
reclassified to conform with the 1993 presentation.
<PAGE>
3. FORFEITURES:
------------
Forfeitures reduced the amount of Employer Matching Contributions
and were approximately $9,000, $12,000, and $20,000 for 1993, 1992, and
1991, respectively.
4. TAX STATUS OF THE PLAN:
-----------------------
The Plan operates as a qualified plan under Sections 401(a) and 401(k) of the
Internal Revenue Code (the "Code"). Qualification of the Plan means that a
participant will not be subject to federal income taxes on Tax Reduction
Contributions and Employer Matching Contributions, or on earnings or
appreciation on all account balances held in the Plan, until such amounts either
are withdrawn by or distributed to the participant, or are distributed to the
participant's beneficiary in the event of the participant's death. The Plan has
received a favorable determination letter, dated March 25, 1991, from the
Internal Revenue Service that indicates that the Plan meets the requirements
of the Code so as to be exempt from taxation under Section 401(a) and 501(a)
of the Code.
5. PLAN INCEPTION:
---------------
Prior to April 14, 1989, the Company and its subsidiaries were wholly owned
subsidiaries of Household. On April 14, 1989, Household distributed to its
shareholders all of the outstanding shares of common stock of the Company.
In preparation for the April 14, 1989, distribution, on April 1, 1989, the
equity of the Plan for the participating employees of the Company was
transferred from the HMI Plan to the Plan adopted by the Company effective as of
April 1, 1989.
6. SIGNIFICANT INVESTMENTS:
------------------------
The following investments represent 5% or more of the net assets
and participants' equity at December 31, 1993 and 1992 (in thousands):
<TABLE>
<CAPTION>
1993 1992
-------- --------
<S> <C> <C>
Eljer Industries, Inc., common stock $2,429 $2,610
Household International, Inc., common stock 1,340 1,473
Fixed Income Fund 6,573 6,938
Balanced Fund 1,874 -
Equity Fund 2,075 -
Fidelity Equity Income Fund - 707
</TABLE>
7. RECONCILIATION TO FORM 5500:
----------------------------
These financial statements and Schedules I and II do not include $414,000
in benefits payable for 1993, which are included on Form 5500, in order to
conform with generally accepted accounting principles.
8. CONTINGENCIES:
--------------
Shares of the common stock of the Company represent 5% or more of the Plan's net
assets and participants' equity at December 31, 1993. The Company and certain
of its subsidiaries are involved in litigation related to the Qest polybutylene
plumbing systems, environmental matters, Kowin Development Corporation,
shareholder suits, and other matters which, if determined adversely to the
Company, may have a material adverse effect on its financial condition or
results of operations. On May 23, 1994, United States Brass Corporation
("U.S. Brass"), an indirect, wholly owned subsidiary of the Company,
filed a voluntary petition for reorganization under Chapter 11 of the Federal
Bankruptcy Code in the United States Bankruptcy Court for the Eastern District
of Texas, Plano Division. The U.S. Brass Chapter 11 filing was necessitated by
the substantial contingent liabilities associated with claims and lawsuits filed
against U.S. Brass alleging defects in its Qest polybutylene plumbing system.
Reference is made to Note 13 "Contingencies" to the Consolidated Financial
Statements in the Company's Annual Report on Form 10-K for the year ended
January 2, 1994, the Company's Quarterly Report on Form 10-Q for the
quarterly period ended April 3, 1994, and the Company's current report on
Form 8-K dated May 27, 1994, as filed with the Securities and Exchange
Commission.
In the event the above items have a material adverse effect on the Company, it
could affect the market value of the shares of common stock of the Company held
in the Plan. However, it will have no impact on any other assets of the
Plan, nor any employee's rights to such assets, as the Plan is a separate,
distinct entity from the Company.
9. ALLOCATION OF NET ASSETS AND PARTICIPANTS' EQUITY:
--------------------------------------------------
The following table presents the allocation of net assets and participants'
equity as of December 31, 1993 (in thousands):
<TABLE>
<CAPTION>
Participant Directed
---------------------------------------------------------------
Eljer Household
Common Common Fixed Plan
Stock Stock Income Balanced Equity Loan
Fund Fund Fund Fund Fund Fund Total
--------- --------- -------- -------- --------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments at market value-
Eljer Industries, Inc.,
common stock $2,429 $ - $ - $ - $ - $ - $ 2,429
Household International, Inc.
common stock - 1,340 - - - - $ 1,340
Fixed Income Fund - - 6,573 - - - 6,573
Balanced Fund - - - 1,874 - - 1,874
Equity Fund - - - - 2,075 - 2,075
Loans to participants - - - - - 682 682
------ ------ ------ ------ ------ ---- -------
Total investments 2,429 1,340 6,573 1,874 2,075 682 14,973
Receivables-
Employer contributions 98 - 36 22 23 - 179
Participant contributions 14 - 70 30 44 - 158
Accrued dividends and interest - - 28 - - - 28
Loan repayments 4 - 7 7 6 91 115
Transfers 4 (11) (47) 17 37 - -
------ ------ ------ ------ ------ ---- -------
Total receivables 120 (11) 94 76 110 91 480
------ ------ ------ ------ ------ ---- -------
Total assets 2,549 1,329 6,667 1,950 2,185 773 15,453
LIABILITIES:
Refunds to participants 8 - 53 13 26 - 100
Loans payable to participants 4 1 22 6 - 69 102
Unrecognized loss 14 - - - - - 14
------ ------ ------ ------ ------ ---- -------
Total liabilities 26 1 75 19 26 69 216
------ ------ ------ ------ ------ ---- -------
NET ASSETS AND PARTICIPANTS'
EQUITY $2,523 $1,328 $6,592 $1,931 $2,159 $704 $15,237
====== ====== ====== ====== ====== ==== =======
<PAGE>
10. ALLOCATION OF CHANGES IN NET ASSETS AND PARTICIPANTS' EQUITY:
-------------------------------------------------------------
The following table presents the allocation of changes in net assets and
participants' equity for the year ended December 31, 1993 (in thousands):
</TABLE>
<TABLE>
<CAPTION>
Participant Directed
------------------------------------------------------------------------------
Eljer Household Fidelity Fidelity
Common Common Fixed Equity Equity Fidelity Plan
Stock Stock Income Balanced Equity Income Index Bond Loan
Fund Fund Fund Fund Fund Fund Fund Fund Fund Total
------ --------- ------ -------- ------ -------- -------- -------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CONTRIBUTIONS:
Participant $ 214 $ - $ 996 $ 180 $ 253 $ - $ 175 $ 44 $ - $ 1,862
Employer 518 - 110 44 45 - 1 1 - 719
INTEREST INCOME - - 468 - - - - - - 468
DIVIDEND INCOME 52 - - 15 92 12 17 4 - 192
NET UNREALIZED APPRECIATION
(DEPRECIATION) OF INVESTMENTS (601) 151 - 4 29 - - - - (417)
NET REALIZED GAINS (LOSSES) ON
INVESTMENTS (15) 9 10 45 - 72 11 3 - 135
PARTICIPANT WITHDRAWALS/
DISTRIBUTIONS (314) (86) (623) (20) (36) (15) (55) (3) 2 (1,150)
INTERFUND TRANSFERS (109) (189) (1,359) 1,641 1,762 (766) (839) (141) - -
LOAN REPAYMENTS BY PARTICIPANTS 40 - 184 46 33 - 26 5 (283) 51
LOANS MADE TO PARTICIPANTS (58) (5) (244) (24) (19) (1) (4) (1) 341 (15)
------ ------ ------ ------ ------ ----- ----- ----- ----- -------
Increase (decrease) in net
assets and participants'
equity (273) (120) (458) 1,931 2,159 (698) (668) (88) 60 1,845
NET ASSETS AND PARTICIPANTS'
EQUITY, beginning of year 2,796 1,448 7,050 - - 698 668 88 644 13,392
------ ------ ------ ------ ------ ----- ----- ----- ----- -------
NET ASSETS AND PARTICIPANTS'
EQUITY, end of year $2,523 $1,328 $6,592 $1,931 $2,159 $ - $ - $ - $ 704 $15,237
====== ====== ====== ====== ====== ===== ===== ===== ===== =======
</TABLE>
<PAGE>
SCHEDULE I
ITEM 27(a) - SUPPLEMENTAL SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
- - -------------------------------------------------------------------------
AT DECEMBER 31, 1993
--------------------
(In thousands of dollars, except per share amounts)
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Description
Party in of Market
Interest Identity of Party Involved Investment Cost Value
- - -------- -------------------------- --------------------- ------- -------
<S> <C> <C> <C> <C>
* Eljer Industries, Inc. Eljer Industries, Inc. $ 3,789 $ 2,429
Common Stock, par value $1
Acct # 30-06-100-3103645
* NationsBank Trust Household International, Inc. 500 1,340
Common Stock, par value $1
Acct # 30-06-100-3103611
* NationsBank Trust Fixed Income Fund ** 6,573 6,573
Acct #30-06-100-3103629
* NationsBank Trust Balanced Fund 1,879 1,874
Acct # 30-06-100-0075390
* NationsBank Trust Equity Fund 2,060 2,075
Acct # 30-06-100-0075382
* Eljer Tax Reduction Loans to Participants - 682
Investment Plan Maturity 1 to 25 years ------- -------
Interest rates 7% to 13%
Acct # 30-06-100-3103652
$14,801 $14,973
======= =======
<FN>
* Each identified person/entity known to be a
party-in-interest.
** Interest rates vary
</TABLE>
This supplemental schedule lists assets held for investment purposes at
December 31, 1993, as required by the Department of Labor Rules and Regulations
for Reporting and Disclosure.
<PAGE>
SCHEDULE II
Page 1 of 2
ELJER INDUSTRIES, INC.
TAX REDUCTION INVESTMENT PLAN
-----------------------------
ITEM 27(d) - SUPPLEMENTAL SCHEDULE OF REPORTABLE TRANSACTIONS
-------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1993
------------------------------------
EIN: 36-3114796
<TABLE>
<CAPTION>
(a) (b) (c) (d) (g) (i)
Net
Identity of Description Purchase Selling Cost of Gain/
Party Involved of Asset Price Price Asset (Loss)
- - ------------------ -------------------- ---------- ---------- ---------- --------
INDIVIDUAL TRANSACTIONS:
<S> <C> <C> <C> <C> <C>
NationsBank Trust Fixed Income Fund * $3,261,170 $ - $3,261,170 $ -
NationsBank Trust Fixed Income Fund * 2,198,964 - 2,198,964 -
NationsBank Trust Fixed Income Fund * - 947,518 937,705 9,813
NationsBank Trust Fixed Income Fund * - 4,283,156 4,171,333 111,823
NationsBank Trust Fixed Income Fund * - 2,080,043 2,080,043 -
NationsBank Trust Fixed Income Fund * - 4,350,740 4,350,740 -
NationsBank Trust Fidelity Equity Index Fund - 766,143 719,023 47,120
NationsBank Trust Fidelity Equity Income Fund - 770,657 594,047 176,610
<FN>
* Interest rates vary
Categories (e) Lease Rental and (f) Transaction Expense do not apply to any of
these transactions. Category (h) Current Value is the same as Purchase Price or
Selling Price.
</TABLE>
This supplemental schedule lists individual and series transactions in
excess of 5% of the fair market value of the respective fund assets
at the beginning of the year as required by the Department of Labor Rules
and Regulations for Reporting and Disclosure.
<PAGE>
SCHEDULE II
Page 2 of 2
ELJER INDUSTRIES, INC.
TAX REDUCTION INVESTMENT PLAN
-----------------------------
ITEM 27(d) - SUPPLEMENTAL SCHEDULE OF REPORTABLE TRANSACTIONS (CONTINUED)
-------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1993
------------------------------------
EIN: 36-3114796
<TABLE>
<CAPTION>
(a) (b) (c) (d) (g) (i)
Net
Identity of Description Purchase Selling Cost of Gain/
Party Involved of Asset Price Price Asset (Loss)
- - -------------------- --------------- ---------- --------- --------- --------
SERIES TRANSACTIONS:
<S> <C> <C> <C> <C> <C>
Eljer Industries, Inc. Eljer Industries, Inc.
Common Stock
27 Purchases $ 970,410 $ - $ 970,410 $ -
44 Sales - 325,856 497,333 (171,477)
Fidelity Investments Fidelity
Investments
Equity Index Fund
9 Purchases 290,681 - 290,681 -
13 Sales - 858,829 804,773 54,056
Fidelity Investments Fidelity
Investments
Equity Income Fund
8 Sales - 790,435 609,897 180,538
NationsBank Trust Fixed Income Fund
13 Purchases 10,133,349 - 10,133,349 -
9 Sales - 7,892,213 7,763,602 128,611
NationsBank Trust Balanced Fund
9 Purchases 920,550 - 920,550 -
NationsBank Trust Equity Fund
18 Purchases 1,363,986 - 1,363,986 -
8 Sales - 37,129 35,543 1,586
<FN>
Categories (e) Lease Rental and (f) Transaction Expense do not apply to any of
these transactions. Category (h) Current Value is the same as Purchase Price or
Selling Price.
</TABLE>
This supplemental schedule lists individual and series transactions in
excess of 5% of the fair market value of the respective fund assets at the
beginning of the year as required by the Department of Labor Rules and
Regulations for Reporting and Disclosure.
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our report dated June 6, 1994, included in this Form 11-K, into Eljer
Industries, Inc.'s previously filed Registration Statement File No. 33-29009 on
Form S-8.
ARTHUR ANDERSEN & CO.
Dallas, Texas,
June 28, 1994
