SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 for the fiscal year ended June 30, 1999
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the transition period from _____ to _____.
Commission File Number 0-21728
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
BARNETT INC.
Profit Sharing and 401(k) Retirement Plan
3333 Lenox Avenue
Jacksonville, Florida 32254
(904) 384-6530
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
BARNETT INC.
3333 Lenox Avenue
Jacksonville, Florida 32254
(904) 384-6530
The following financial statements and schedules have been prepared in
accordance with the financial reporting requirements of the Employee Retirement
Income Security Act of 1974, as amended:
1. Statements of Net Assets Available for Benefits - June 30, 1999 and
1998
2. Statement of Changes in Net Assets Available for Benefits for the
Year Ended June 30, 1999
<PAGE>
Barnett Inc.
Profit Sharing and 401(k) Retirement Plan
Financial Statements and Schedules
As of June 30, 1999 and 1998
Together With
Auditors' Report
<PAGE>
BARNETT INC.
PROFIT SHARING AND 401(k) RETIREMENT PLAN
FINANCIAL STATEMENTS AND SCHEDULES
JUNE 30, 1999 AND 1998
TABLE OF CONTENTS
REPORT OF INDENPENDENT CERTIFIED PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS
Statements of Net Assets Available for Benefits--June 30, 1999 and 1998
Statement of Changes in Net Assets Available for Benefits for the Year
Ended June 30, 1999
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
SCHEDULES SUPPORTING FINANCIAL STATEMENTS
Schedule I: Item 27a--Schedule of Assets Held for Investment Purposes
--June 30, 1999
Schedule II: Item 27d--Schedule of Reportable Transactions for the
Year Ended June 30, 1999
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Plan Administrator of
Barnett Inc. Profit Sharing and
401(k) Retirement Plan:
We have audited the accompanying statements of net assets available for benefits
of Barnett Inc. Profit Sharing and 401(k) Retirement Plan as of June 30, 1999
and 1998 and the related statement of changes in net assets available for
benefits for the year ended June 30, 1999. These financial statements and the
schedules referred to below are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
June 30, 1999 and 1998 and the changes in net assets available for benefits for
the year ended June 30, 1999 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 of assets held
for investment purposes and reportable transactions 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 and fund information
have been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Jacksonville, Florida
December 22, 1999
<PAGE>
BARNETT INC.
PROFIT SHARING AND 401(k) RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
JUNE 30, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
------------ -------------
<S> <C> <C>
ASSETS:
Investments, at fair value (Note 2):
Money market funds:
Money Market Account $ 651 $ 405
Mutual funds, at fair value:
American Century: 20th Century Ultra 777,199 274,550
U.S. Stock Account 686,420 444,369
Vanguard Wellington 425,669 300,553
Bond & Mortgage Account 419,740 300,580
INVESCO Total Return 337,235 268,894
Small Company Blend Account 242,358 197,310
International Stock Account 231,953 181,109
Stock Index 500 Account 65,836 0
Common stock, at fair value:
Barnett Inc. Stock 78,761 115,935
Guaranteed investment contracts, at fair value:
Guaranteed Interest Account, maturity June 30, 2002 353,228 349,819
Guaranteed Interest Account, maturity June 30, 2003 136,873 0
Participant loans, at contract value:
Participants loans 35,552 26,313
---------- ----------
Total investments 3,791,475 2,459,837
---------- ----------
Receivables:
Participant's contributions 6,072 20,224
Employer's contributions 1,229 6,849
Other 0 212
---------- ----------
Total receivables 7,301 27,285
---------- ----------
Net assets available for benefits $ 3,798,776 $ 2,487,122
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
BARNETT INC.
PROFIT SHARING AND 401(k) RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED JUNE 30, 1999
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Contributions:
Participants $ 1,120,442
Employer 231,812
----------
Total contributions 1,352,254
----------
Investment income (loss):
Net appreciation (depreciation) in fair value 103,581
Interest/dividends 90,270
----------
Net investment income 193,851
----------
Total additions 1,546,105
----------
BENEFITS PAID TO PARTICIPANTS (223,809)
----------
ADMINISTRATIVE EXPENSES (10,642)
----------
NET INCREASE 1,311,654
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 2,487,122
----------
End of year $ 3,798,776
==========
The accompanying notes are an integral part of this statement.
<PAGE>
BARNETT INC.
PROFIT SHARING AND 401(k) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
JUNE 30, 1999 AND 1998
1. DESCRIPTION OF THE PLAN
The following description of the Barnett Inc. Profit Sharing and 401(k)
Retirement Plan (the "Plan") of Barnett Inc. (the "Company") provides only
general information. More complete information regarding the Plan's
provisions can be found in the plan document.
General
The Plan is a defined contribution plan under the provisions of Section
401(a) of the Internal Revenue Code ("IRC"), which includes a qualified
deferred arrangement as described in Section 401(k) of the IRC. Prior to
the restatement of the Company's 401(k) plan, employees of the Company
participated in the Waxman Industries profit-sharing and 401(k) plan.
These accounts were transferred to the Plan on July 1, 1997. The Plan
provides benefits to all employees of the Company. Employees of the
Company who are 21 years of age or older, have completed one year of
service with the Company, and have worked 1,000 hours in that year are
eligible to participate in the Plan. An employee may enter the Plan as of
the January 1, April 1, July 1, or October 1 following the date upon which
he/she becomes eligible to participate in the Plan.
Contributions
Each year, participants may elect to contribute up to 15% of pretax annual
compensation, as defined in the Plan and subject to certain limitations
under the IRC. Employer matching and discretionary contributions, net of
forfeitures, may be contributed to the Plan at the option of the Company's
board of directors, subject to certain limitations.
Participant Accounts
Each participant's account is credited with the participant's contribution
and allocations of plan earnings. Allocations of plan earnings are based
on account balances, as defined in the Plan.
<PAGE>
-2-
Investment Options
Upon enrollment in the Plan, a participant may direct employee
contributions in any of 12 investment options:
Money Market Account
The money market account invests in high-quality commercial paper
(short-term, unsecured corporate loans). The average maturity is
usually less than one month. The account is managed by Principal
Life Insurance Company.
American Century: 20th Century Ultra
This mutual fund invests in stocks of some of the fastest growing
companies that are considered to have better-than-average
potential for earnings. The fund invests only in the stocks of
companies that have operated continuously for three or more
years.
U.S. Stock Account
This mutual fund invests money in stocks of United States
companies of all sizes. The strategy is to target stocks that are
considered to be good values when their prices are compared to
their long-term earnings potential.
Vanguard Wellington
This mutual fund invests 60% to 70% of its assets in stocks and
the remainder in bonds to provide a combination of long-term
growth and income. The fund may invest up to 10% of assets in
foreign securities.
Bond & Mortgage Account
This mutual fund invests primarily in intermediate-term,
investment-grade fixed income securities mainly private placement
bonds, commercial mortgages, and publicly traded bonds.
INVESCO Total Return
This mutual fund invests in stocks and bonds. It owns stocks in
conservative, well-known companies that have the potential for
continued strong profit growth and are selling less expensively
as compared to their prospects and past prices. The fund also
holds short- and intermediate-term bonds.
Small Company Blend Account
This mutual fund invests in stocks of smaller, seasoned companies
where potential for long-term growth is expected to be above
average. The account looks at both "growth" and "value" stocks,
resulting in a "blended" portfolio.
<PAGE>
-3-
International Stock Account
This mutual fund invests in common stocks of companies located
outside the United States, mainly in Western Europe and Asia.
Countries and industries are selected after evaluating the
economic, social, and political factors of each market.
Stock Index 500 Account
This mutual fund invests in the common stocks of those companies
listed in the Standard and Poor's ("S&P") 500 Stock Index.
Barnett Inc. Stock
This investment option invests in the common stock of Barnett
Inc.
Guaranteed Interest Account (Maturity June 30, 2002 or June 30,
2003)
The Guaranteed Interest Account investments are private market
bonds, commercial mortgages, and mortgage-backed securities.
Money placed in this account earns a guaranteed interest rate for
a specific number of years.
Real Estate Account
The Plan does not hold any assets in this investment as of June
30, 1999, however, it is an investment option.
Benefits Payments
Participants in service may make hardship withdrawals from their voluntary
contributions upon demonstrating immediate and heavy financial need. No
withdrawals may be made from company contributions.
Upon termination of service due to death, disability, or retirement, a
participant may elect to receive either a lump-sum amount equal to the
value of the participant's vested interest in his/her account or annual
installments over a ten-year period. For termination of service due to
other reasons, a participant may receive the value of the vested interest
in his/her account as a lump-sum distribution.
Participant Loans
The Plan permits a participant to borrow a percentage of his/her vested
account balance, subject to certain limitations. Interest rates on
outstanding loans at June 30, 1999 range from 8.5% to 10.5%.
Vesting
Participants are immediately vested in their contributions plus actual
earnings thereon. Vesting in the Company's matching and discretionary
contribution portion of their accounts plus actual earnings thereon is
based on years of continuous service. Employees
<PAGE>
-4-
vest in Company contributions ratably over five years of service based on
the following schedule:
Vesting
Years of Service Percentage
------------------------------------------ -----------
Less than one year 0%
One year but less than two 20
Two years but less than three 40
Three years but less than four 60
Four years but less than five 80
Five years or more 100
2. SUMMARY OF ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Plan are prepared using the accrual method
of accounting.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, and
changes therein, and the disclosure of contingent assets and liabilities.
Actual results could differ from those estimates.
Investment Valuation and Income Recognition
The Plan's investments are stated at fair value as determined by quoted
market prices on the last day of the plan year.
Purchases and sales of securities are recorded on a settlement date basis
which does not materially differ from the trade date. Interest income is
recorded on the accrual basis. Dividends are recorded on the ex-dividend
date.
Plan Expenses
Substantially, all administrative plan expenses are paid by the Plan.
<PAGE>
-5-
3. INVESTMENTS
The carrying values of individual investments that represent 5% or more of
the Plan's net assets as of June 30, 1999 are as follows:
Fair
Value
----------
Fair value as determined by quoted market value:
American Century: 20th Century Ultra $ 777,199
U.S. Stock Account 686,420
Vanguard Wellington 425,669
Bond & Mortgage Account 419,740
INVESCO Total Return 337,235
Small Company Blend Account 242,358
International Stock Account 231,953
Guaranteed Interest Account, maturity June 30, 2002 353,228
Guaranteed Interest Account, maturity June 30, 2003 136,873
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.
5. TAX STATUS
The Plan obtained its determination letter on April 16, 1998 in which the
Internal Revenue Service stated that the Plan, as then designed, was in
compliance with the applicable requirements of the IRC. The plan
administrator believes that the Plan is currently designed and is being
operated in compliance with the applicable requirements of the IRC and
that the trust continues to be tax-exempt under Section 501(a) of the IRC.
6. RECONCILIATION TO FORM 5500
The following is a reconciliation of net assets available for benefits per
the financial statements to the Form 5500 at June 30, 1999 and 1998:
<TABLE>
<CAPTION>
1999 1998
----------- ----------
<S> <C> <C>
Net assets available for benefits per financial statements $ 3,798,776 $2,487,122
Amounts allocated to withdrawing participants (137) 0
Net assets available for benefits per Form 5500 $ 3,798,639 $2,487,122
</TABLE>
<PAGE>
-6-
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500 at June 30, 1999:
<TABLE>
<CAPTION>
<S> <C>
Benefits paid to participants per the financial statements $ 223,809
Add:
Amounts allocated to withdrawing participants at June 30, 1999 137
Less:
Amounts allocated to withdrawing participants at June 30, 1998 0
--------
Benefits paid to participants per Form 5500 $ 223,946
========
</TABLE>
Amounts allocated to withdrawing participants are recorded on the Form
5500 for benefit claims that have been processed and approved for payment
prior to June 30 but have not yet been paid as of that date.
<PAGE>
SCHEDULE I
BARNETT INC.
PROFIT SHARING AND 401(k) RETIREMENT PLAN
ITEM 27a--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
JUNE 30, 1999
<TABLE>
<CAPTION>
Current
Identity of Party Involved Description of Investment Cost Value
------------------------------------- --------------------------------------------------------- ------------ -------------
<S> <C> <C> <C>
* PRINCIPAL LIFE INSURANCE COMPANY U.S. Stock Account $ 543,870 $ 686,420
Guaranteed Interest Account
(maturity June 30, 2002 and June 30, 2003) 498,553 490,101
Bond & Mortgage Account 396,862 419,740
Small Company Blend Account 234,151 242,358
International Stock Account 213,411 231,953
Stock Index 500 Account 62,354 65,836
Money Market Account 617 651
INVESCO INVESCO Total Return 302,463 337,235
AMERICAN CENTURY American Century: 20th Century Ultra 718,252 777,199
VANGUARD Vanguard Wellington 416,024 425,669
* BARNETT INC. Common stock 173,517 78,761
* PLAN PARTICIPANTS Participant loans with varying maturities and
interest rates ranging from 8.5% to 10.5% 35,552 35,552
----------- -----------
$ 3,595,626 $ 3,791,475
=========== ==========
</TABLE>
*Represents a party in interest.
The accompanying notes are an integral part of this schedule.
<PAGE>
SCHEDULE II
BARNETT INC.
PROFIT SHARING AND 401(k) RETIREMENT PLAN
ITEM 27d--SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED JUNE 30, 1999
<TABLE>
<CAPTION>
Purchases Sales
----------------- -------------------------------------
Number Number
of of Cost Net
Identity of Issuer, Borrower, Trans- Purchase Trans- Selling of Gain
Lessor, or Similar Party Description of Investment actions Price actions Price Asset (Loss)
- --------------------------------------- ----------------------------- -------- ---------- -------- --------- ------ ------
<S> <S> <C> <C> <C> <C> <C> <C>
* PRINCIPAL LIFE INSURANCE COMPANY U.S. Stock Account 112 213,714 86 74,182 65,170 9,012
Bond & Mortgage Account 120 169,176 80 58,351 53,914 4,437
Guaranteed Interest Account 104 145,948 75 20,209 20,209 0
Small Company Blend Account 92 114,405 81 63,750 70,786 (7,036)
International Stock Account 99 87,570 77 41,749 40,315 1,434
INVESCO INVESCO Total Return 94 110,084 64 57,975 54,440 3,535
AMERICAN CENTURY American Century: 20th Century
Ultra 104 496,238 63 44,817 44,690 127
VANGUARD Vanguard Wellington 95 170,687 67 43,183 44,046 (863)
</TABLE>
*Represents a party in interest.
The accompanying notes are an integral part of this schedule.
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference of our report included in this Form 11-K into Barnett
Inc.'s previously filed Registration Statement on Form S-8 File No. 333-23431.
ARTHUR ANDERSEN LLP
Jacksonville, Florida
December 22, 1999
<PAGE>
SIGNATURES
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,
thereunto duly authorized, in the City of Jacksonville, in the State of Florida,
on December 22, 1999.
BARNETT INC.
PROFIT SHARING AND 401(k)
RETIREMENT PLAN
PAUL JANKE, TRUSTEE
By: /s/ Paul Janke
Paul Janke
Vice President
