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, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ____________________ to ____________________
Commission file number 0-8493
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
STEWART & STEVENSON 401(k) SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive offices:
STEWART & STEVENSON SERVICES, INC.
2707 North Loop West
Houston, Texas 77008
FINANCIAL STATEMENTS
In accordance with Item 4 of the Required Information for Form 11-K, the
following statements of financial condition for the Stewart & Stevenson 401(k)
Savings Plan have been prepared in accordance with the financial reporting
requirements of the Employee Retirement Income Security Act of 1974, as amended,
and the regulations promulgated thereunder.
INDEX TO THE FINANCIAL STATEMENTS AND SCHEDULE
Report of Independent Public Accountants
Item 1. Statement of Net Assets Available for Benefits as of December 31, 1994
Item 2. Statement of Changes in Net Assets Available for Benefits for the Year
Ended December 31, 1994
Notes to Financial Statements as of December 31, 1994
Schedule I - Item 27a - Schedule of Assets Held for Investment Purposes as of
December 31, 1994
Schedule II - Item 27d - Schedule of Reportable Transactions for the year ended
December 31, 1994
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee of the
Stewart & Stevenson 401(k) Savings Plan:
We have audited the accompanying statement of net assets available for benefits
of the Stewart & Stevenson 401(k) Savings Plan as of December 31, 1994, and the
related statement of changes in net assets available for benefits for the year
then ended. These financial statements and the schedules referred to below are
the responsibility of the Plan's administrator. Our responsibility is to
express an opinion on these financial statements and schedules based on our
audit.
We conducted our audit 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 audit provides 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 Stewart &
Stevenson 401(k) Savings Plan as of December 31, 1994, and the changes in its
net assets available for benefits for the year then ended in conformity with
generally accepted accounting principles.
Our audit was 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'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 our 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.
/s/ Arthur Andersen, LLP
Houston, Texas
June 12, 1995
STEWART & STEVENSON 401(k) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1994
<TABLE>
<S> <C>
ASSETS:
Investments, at fair value-
Common stock of Stewart & Stevenson Services, Inc. $ 326,391
Mutual funds 2,187,852
Money market 232,640
Participant loans 29,048
__________
2,775,931
Receivables-
Employer contributions 10,200
Participant contributions 56,456
__________
66,656
__________
Total assets 2,842,587
LIABILITIES:
Excess contributions refundable 264,914
__________
NET ASSETS AVAILABLE FOR BENEFITS $2,577,673
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
STEWART & STEVENSON 401(k) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1994
<TABLE>
<S> <C>
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income-
Dividends $ 50,679
Interest 22,110
__________
72,789
Contributions-
Employer 430,702
Participant 2,335,457
Participant rollovers 160,357
__________
Total contributions 2,926,516
__________
Total additions 2,999,305
__________
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Distributions to participants 293,827
Withdrawals 3,551
Realized loss on sale of investments, net 4,034
Unrealized depreciation in fair value of investments, net 120,220
__________
Total deductions 421,632
__________
NET INCREASE 2,577,673
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year -
__________
End of year $2,577,673
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
STEWART & STEVENSON 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN:
General
The Stewart & Stevenson 401(k) Savings Plan (the Plan), adopted effective
January 1, 1994, is a trusteed, defined contribution plan established for the
benefit of all eligible employees of Stewart & Stevenson Services, Inc., and its
subsidiaries, C. Jim Stewart & Stevenson, Inc., Stewart & Stevenson Power, Inc.,
Stewart & Stevenson Operations, Inc., Stewart & Stevenson Transportation, Inc.,
Stewart & Stevenson International, Inc., Stewart & Stevenson Technical Services,
Inc., and Pow-R-Quik Limited. These entities are collectively referred to as
"the Company."
Effective September 1, 1994, and November 19, 1994, respectively, the Plan has
been amended to include all eligible employees of Creole International, Inc.,
and Power Application & Mfg. Co.
The following description of the Plan provides a summary of the Plan.
Participants should refer to the Plan document for a more complete description
of the Plan's provisions.
Basis of Accounting
The financial statements of the Plan have been prepared on the accrual basis of
accounting.
Plan Administration
The Plan is administered by a committee (the Administrative Committee) which is
appointed by the board of directors of Stewart & Stevenson Services, Inc. This
committee is empowered to act on all matters affecting the Plan including, among
other things, interpreting the Plan's provisions, determining the eligibility of
employees to become participants in the Plan, selecting the funds to be made
available in the Plan and determining any person's right to a benefit under the
Plan. Committee members do not receive compensation for services rendered to
the Plan.
Custodial safekeeping of Plan assets is performed by Merrill Lynch Trust Company
(the Trustee). Individual participant record keeping is performed under Merrill
Lynch, Pierce, Fenner & Smith Incorporated (the Recordkeeper). Among other
duties, the Trustee is to receive contributions, collect the income from the
Plan's assets and make disbursements from the Plan's assets as directed by the
administrative committee. The Recordkeeper's duties include processing and
maintaining participant data, participant statements, and contributions and
distributions for purposes of record keeping.
Participation
Employee participation in the Plan is voluntary. All employees who are at least
21 years of age are eligible to participate in the Plan after completion of one
year of service during which 1,000 or more hours are worked. There are
943 active participants in the Plan at December 31, 1994.
Investments
The following details the investment options available to each Plan participant:
Fund 1 Merrill Lynch Global Allocation Fund, Inc., Class A
Fund 2 Merrill Lynch Corporate Bond Fund, Inc., Intermediate Term,
Class A
Fund 3 Merrill Lynch Retirement Preservation Trust
Fund 4 AIM Value Fund
Fund 5 American Balanced Fund
Fund 6 Stewart & Stevenson Services, Inc., Common Stock
The Plan's investments are recorded at cost when purchased but are adjusted to
market value based upon published data, by the Trustee, for financial reporting
purposes. The net change in the difference between market value and revalued
cost of the investments on hand at December 31, 1994, is included as unrealized
depreciation of investments in the statement of changes in net assets available
for plan benefits. Realized gains or losses on the disposition of Plan
investments and withdrawals of investments are based on the value of the assets
as of the beginning of the year or the time of purchase during the year, if
later.
Contributions
Participants may elect to contribute 1 percent to 15 percent of their wages as
reported to the Internal Revenue Service, subject to certain limitations, as
defined, in any or all six funds. Contributions from employees are recorded in
the period in which the Company makes payroll deductions from Plan participants.
The matching employer contribution is 25 percent of the first 6 percent of the
participant's contribution. Matching contributions from the Company are
recorded in the same period as the corresponding employee contributions.
Participant and employer contributions are remitted by the employer to the
Trustee every two weeks and are credited directly to the participants' employee
accounts by the Recordkeeper. Participants may also make rollover contributions
to the Plan representing distributions from other qualified defined benefit or
contribution plans. Participants can change the allocation of their
contributions in these six funds or they can discontinue, increase or decrease
their contribution rate within the 1 percent to 15 percent range as permitted by
the Plan. All changes are performed over an automated benefits system.
Participants' Benefits
Participants are fully vested in their participant contributions, rollovers and
earnings thereon at all times. Participants shall have a 100 percent vested
interest in their employer contributions upon attaining age 65, the normal
retirement age according to the Plan. Those participants who terminate prior to
normal retirement age are entitled to a benefit pursuant to the value of their
vested interests in their accounts as follows:
Vested
Years of Vesting Service Interest
________________________ ________
Less than 3 0%
3 20
4 40
5 60
6 80
7 or more 100
Forfeited employer contributions are applied as a reduction of future employer
matching contributions but will be restored to the participants who previously
forfeited the contribution upon reemployment within five years of termination.
The Company anticipates and believes that the Plan will continue without
interruption but reserves the right to terminate the Plan. In the event of
termination, the assets of the Plan, less expenses of liquidation, will be
allocated to the participants in accordance with the terms of the Plan.
Withdrawals and Loans
Participant benefits are payable to participants or to a designated beneficiary
in the event of their retirement, death or termination of employment. In
limited circumstances, account withdrawals may be made for financial hardship in
accordance with the Plan.
Benefit payments to withdrawing employees are made in lump-sum payments. As of
December 31, 1994, the amount payable to persons who have withdrawn from the
Plan was $43,420. This amount is reported as a liability on the Form 5500.
A participant may borrow from his account up to a maximum equal to the lesser of
$50,000 or 50 percent of his vested account balance. Loan transactions are
treated as a transfer to (from) the investment fund from (to) the participant
loan fund. The minimum loan is $1,000 and will bear interest at a rate of prime
plus 1 percent. Outstanding loans currently bear interest rates from 8-
3/4 percent to 9-1/2 percent. The loans shall not exceed five years, except for
loans for the purpose of acquiring a principal residence. The loans are secured
by the balance in the participant's account. Principal and interest are paid
ratably through monthly payroll deductions.
Recognition of Income and Expenses
Interest income is reported daily on an accrual basis. Plan income or loss is
allocated to the participants daily in the ratio that each participant's account
balance bears to all account balances. Although not required by the Plan, all
administrative expenses relating to the Plan have been paid by the Company.
Excess Contributions Refundable
At December 31, 1994, the Plan did not comply with the requirements of the
actual deferral percentage and actual contribution percentage test. These tests
ensure that total annual contributions made by highly compensated employees and
their respective matching employer contribution are in proportion to the same
annual contributions of nonhighly compensated employees. This determination
resulted in a refund of approximately $265,000 of contributions, which was made
subsequent to the Plan's year-end, to certain highly compensated participants.
2. FEDERAL INCOME TAXES:
The Plan obtained its latest determination letter on September 3, 1994, in which
the Internal Revenue Service stated that the Plan, as originally established,
was in compliance with the applicable requirements of the Internal Revenue Code
(the Code). Although the Plan has been amended since receiving the
determination letter, the Plan administrator believes that the Plan is currently
designed and being operated in compliance with the applicable requirements of
the Code.
3. ALLOCATION TO INVESTMENT PROGRAMS:
The following statements reflect the allocation of net assets available for
benefits and changes in net assets available for benefits to the separate
investment funds as of and for the year ended December 31, 1994:
<TABLE>
Statement of Net Assets Available for Benefits by Investment Program
December 31, 1994
Part. Unalloc.
Fund 1 Fund 2 Fund 3 Fund 4 Fund 5 Fund 6 Loans Cash Total
________ ________ ________ ________ ________ ________ _______ __________ __________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets-
Investments, at fair value-
Common stock $ - $ - $ - $ - $ - $326,391 $ - $ - $ 326,391
Mutual Funds 771,631 180,578 - - - - - - 952,209
Money Market - - 232,640 - - - - - 232,640
Other Investments - - - 944,940 290,703 - - - 1,235,643
Participant Loans - - - - - - 29,048 - 29,048
________ ________ ________ ________ ________ ________ _______ __________ __________
771,631 180,578 232,640 944,940 290,703 326,391 29,048 - 2,775,931
Receivables-
Employer contributions 2,840 650 1,198 3,175 1,170 1,167 - - 10,200
Participant contributions 15,819 3,304 6,634 17,837 6,126 6,736 - - 56,456
________ ________ ________ ________ ________ ________ _______ __________ __________
18,659 3,954 7,832 21,012 7,296 7,903 - - 66,656
________ ________ ________ ________ ________ ________ _______ __________ __________
Total assets 790,290 184,532 240,472 965,952 297,999 334,294 29,048 - 2,842,587
Liabilities-
Excess contributions
refundable - - - - - - - 264,914 264,914
________ ________ ________ ________ ________ ________ _______ __________ __________
Net assets available for benefits $790,290 $184,532 $240,472 $965,952 $297,999 $334,294 $29,048 $(264,914) $2,577,673
======== ======== ======== ======== ======== ======== ======= ========== ==========
</TABLE>
<TABLE>
Statement of Changes in Net Assets Available for Benefits Investment Program
For the Year Ended December 31, 1994
Part. Unalloc.
Fund 1 Fund 2 Fund 3 Fund 4 Fund 5 Fund 6 Loans Cash Total
________ ________ ________ ________ ________ ________ _______ __________ __________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to-
Investment income-
Dividends $ 37,936 $ 6,846 $ 5,024 $ - $ - $ 873 $ - $ - $ 50,679
Interest 508 11 - 14,487 7,088 16 - - 22,110
-------- ------- ------- ------- ------- -------- ------ --------- ----------
Total investment income 38,444 6,857 5,024 14,487 7,088 889 - - 72,789
Contributions
Employer 128,106 32,189 32,923 141,696 44,997 50,791 - - 430,702
Participant 688,997 172,214 180,931 769,898 237,244 286,173 - - 2,335,457
Participant rollovers 29,833 5,837 24,413 60,174 27,206 12,894 - - 160,357
________ ________ ________ ________ ________ ________ _______ __________ __________
Total contributions 846,936 210,240 238,267 971,768 309,447 349,858 - - 2,926,516
-------- -------- -------- --------- -------- --------- ------- ---------- ----------
Total additions 885,380 217,097 243,291 986,255 316,535 350,747 - - 2,999,305
-------- -------- -------- --------- ------- --------- ------- --------- ----------
Deductions from net assets
attributed to-
Distributions to participants 6,824 4,422 10,833 3,160 1,609 2,065 - 264,914 293,827
Withdrawals - 1,086 101 944 79 1,341 - - 3,551
Realized (gain) loss on sale
of investments 1,215 1,167 - (13) 130 1,535 - - 4,034
Unrealized depreciation in
fair value of investments 58,780 6,492 - 8,401 3,536 43,011 - - 120,220
Loan activity, net 7,796 1,707 2,415 10,988 3,780 2,362 (29,048) - -
Interfund transfers, net 20,475 17,691 (10,530) (3,177) 9,402 (33,861) - - -
________ ________ ________ ________ ________ ________ _______ __________ __________
Total deductions 95,090 32,565 2,819 20,303 18,536 16,453 (29,048) 264,914 421,632
-------- -------- -------- -------- -------- -------- ------- ---------- ----------
Net increase (decrease) 790,290 184,532 240,472 965,952 297,999 334,294 29,048 (264,914) 2,577,673
Net assets available for benefits-
Beginning of year - - - - - - - - -
________ ________ ________ ________ ________ ________ _______ __________ __________
End of year $790,290 $184,532 $240,472 $965,952 $297,999 $334,294 $29,048 $(264,914) $2,577,673
======== ======== ======== ======== ======== ======== ======= ========= ==========
</TABLE>
SCHEDULE I
<TABLE>
STEWART & STEVENSON 401(k) SAVINGS PLAN
ITEM 27(a) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1994
Number of
Shares or
Principal Current
Identity of Issue Description Amount Cost Value
- -------------------------------------- ------------------------------- --------- ---------- ----------
<S> <S> <C> <C> <C>
Stewart & Stevenson Services, Inc.<F1> Common stock 9,460 $ 369,402 $ 326,391
Merrill Lynch Trust Company<F1> Merrill Lynch Global Allocation
Fund, Inc., Class A 63,093 830,411 711,631
Merrill Lynch Trust Company<F1> Merrill Lynch Corporate Bond
Fund, Inc., Intermediate Term,
Class A 16,876 187,070 180,578
AIM Family of Funds AIM Value Fund 44,699 953,341 944,940
American Funds Group American Balanced Fund 24,225 294,239 290,703
Merrill Lynch Trust Company<F1> Merrill Lynch Retirement
Preservation Trust 232,640 232,640 232,640
Participant loans (ranging from
8-3/4% to 9-1/2%)<F1> 29,048 29,048 29,048
---------- ----------
Total assets held for investment purposes $2,896,151 $2,775,931
========== ==========
<FN>
<F1> Identified party in interest.
</TABLE>
The foregoing notes to the financial statements are an integral part of this
schedule.
SCHEDULE II
<TABLE>
STEWART & STEVENSON 401(k) SAVINGS PLAN
ITEM 27(d) - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
Current
Value of
Number Asset on
Identity of of Purchase Selling Cost of Trans. Gain
Party Involved Description Trans. Price<F2> Price<F2> Asset Date (Loss)
- ------------------- ------------------------------- ------ --------- --------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Stewart & Stevenson
Services, Inc.<F1> Common stock 111 $381,242 $ - $ - $ - $ -
Stewart & Stevenson
Services, Inc.<F1> Common stock 20 - 10,304 11,839 10,304 (1,535)
Merrill Lynch Merrill Lynch Global
Trust Company<F1> Allocation Fund, Inc., Class A 106 875,570 - - - -
Merrill Lynch Merrill Lynch Global
Trust Company<F1> Allocation Fund, Inc., Class A 36 - 43,944 45,159 43,944 (1,215)
Merrill Lynch Merrill Lynch Corporate Bond
Trust Company<F1> Fund, Inc., Intermediate Term,
Class A 101 215,063 - - - -
Merrill Lynch Merrill Lynch Corporate Bond
Trust Company<F1> Fund, Inc., Intermediate Term,
Class A 32 - 26,847 28,014 26,847 (1,167)
Merrill Lynch Merrill Lynch Retirement
Trust Company<F1> Preservation Trust 119 256,312 - - - -
Merrill Lynch Merrill Lynch Retirement
Trust Company<F1> Preservation Trust 24 - 23,671 23,671 23,671 -
AIM Family of Funds AIM Value Fund 111 986,572 - - - -
AIM Family of Funds AIM Value Fund 36 - 33,244 33,231 33,244 13
American Funds Group American Balanced Fund 100 313,254 - - - -
American Funds Group American Balanced Fund 30 - 18,885 19,015 18,885 (130)
<FN>
<F1> Identified party in interest.
<F2> Amounts are net of purchase/selling expenses.
</TABLE>
NOTE: This schedule presents all reportable transactions of the Plan for the
year ended December 31, 1994.
The foregoing notes to the financial statements are an integral part of this
schedule.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Stewart & Stevenson 401(k) Savings Plan Administrative Committee which
administers the Stewart & Stevenson 401(k) Savings Plan has duly caused this
annual report to be signed on its behalf by the undersigned thereunto duly
authorized in the City of Houston and the State of Texas, on the 29th day of
June, 1995.
Stewart & Stevenson 401(k) Savings Plan
Administrative Committee
/s/ Robert L. Hargrave
_________________________ _________________________
Bob H. O'Neal Robert L. Hargrave
Member Member
/s/ Donald E. Stevenson /s/ Jack T. Currie
_________________________ _________________________
Donald E. Stevenson Jack T. Currie
Member Member
/s/ Bobby W. Brown /s/ David R. Stewart
_________________________ _________________________
Bobby W. Brown David R. Stewart
Member Member
EXHIBIT 23-1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated June 12, 1995 on the financial statements and
schedules of Stewart & Stevenson 401(k) Savings Plan as of and for the year
ended December 31, 1994, included in this Form 11-K, into the previously filed
Stewart & Stevenson Services, Inc. Form S-8 Registration Statement File No. 33-
52903.
/s/ Arthur Andersen, LLP
Houston, Texas
June 29, 1995
