UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2001
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[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________________ to
Commission file number 1-12541
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A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
QUAKER ALLOY, INC. 401(k) PROFIT SHARING PLAN FOR UNION EMPLOYEES
B. Name of the issuer of the securities held pursuant to the plan and the
address of its principal executive office:
ATCHISON CASTING CORPORATION
400 South Fourth Street
Atchison, Kansas 66002
Quaker Alloy, Inc.
401(k) Profit Sharing
Plan for Union
Employees
Financial Statements as of and for the Years
Ended June 30, 2001 and 2000, and Supplemental
Schedules as of and for the Year Ended
June 30, 2001, and Independent Auditors' Report
QUAKER ALLOY, INC.
401(k) PROFIT SHARING PLAN FOR UNION EMPLOYEES
TABLE OF CONTENTS
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Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED JUNE 30, 2001 AND 2000:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-8
SUPPLEMENTAL SCHEDULES AS OF AND FOR THE YEAR ENDED JUNE 30, 2001:
Form 5500, Schedule G, Part III - Schedule of Nonexempt Transactions 9
Form 5500, Schedule H, Part IV, Line 4i - Schedule of Assets Held for Investment Purposes 10
at the End of Year
Note: Certain supplemental schedules required by rules and regulations of the Department of Labor are
omitted because of the absence of conditions under which they are required.
INDEPENDENT AUDITORS' REPORT To the Trustees and Participants of Quaker Alloy, Inc. 401(k) Profit Sharing Plan for Union Employees Myerstown, Pennsylvania We have audited the accompanying statements of net assets available for benefits of the Quaker Alloy, Inc. 401(k) Profit Sharing Plan for Union Employees (the "Plan") as of June 30, 2001 and 2000, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of June 30, 2001 and 2000, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America. Our audits were conducted 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 the purpose 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. These schedules are the responsibility of the Plan's management. Such schedules have been subjected to the auditing procedures applied in our audit of the basic financial statements for the year ended June 30, 2001, and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. /s/ Deloitte & Touche LLP Kansas City, Missouri December 27, 2001
QUAKER ALLOY, INC.
401(k) PROFIT SHARING PLAN FOR UNION EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
JUNE 30, 2001 AND 2000
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2001 2000
ASSETS
INVESTMENTS:
Mutual funds $ 815,499 $ 783,287
Guaranteed interest account 633,242 702,228
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Total investments 1,448,741 1,485,515
CONTRIBUTIONS RECEIVABLE:
Employer 69,031 62,973
Participant 9,180 3,965
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Total contributions receivable 78,211 66,938
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NET ASSETS AVAILABLE FOR BENEFITS $1,526,952 $1,552,453
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See notes to financial statements.
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QUAKER ALLOY, INC.
401(k) PROFIT SHARING PLAN FOR UNION EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED JUNE 30, 2001 AND 2000
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2001 2000
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income:
Interest and dividend income $ 47,882 $ 42,705
Net (depreciation) appreciation in fair value of investments (89,860) 70,757
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Net investment (loss) income (41,978) 113,462
Contributions:
Employer, net of forfeitures 112,822 109,432
Participant 117,306 112,944
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Total contributions 230,128 222,376
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Total additions 188,150 335,838
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DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO -
Distributions to participants 175,012 102,151
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NET INCREASE PRIOR TO TRANSFERS 13,138 233,687
TRANSFER TO ATCHISON CASTING CORPORATION
401(k) PLAN (38,639) --
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NET (DECREASE) INCREASE (25,501) 233,687
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 1,552,453 1,318,766
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End of year $ 1,526,952 $ 1,552,453
=========== ===========
See notes to financial statements.
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QUAKER ALLOY, INC.
401(k) PROFIT SHARING PLAN FOR UNION EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2001 AND 2000
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1. DESCRIPTION OF THE PLAN
The following description of the Quaker Alloy, Inc. 401(k) Profit Sharing
Plan for Union Employees (the "Plan") provides only general information.
Participants should refer to the Plan document for a more complete
description of the Plan's provision.
General - The Plan is a defined contribution plan sponsored by Quaker
Alloy, Inc. (the "Company" or the "Plan Sponsor"). The Plan was
established on June 1, 1994. Prudential Investments ("Prudential") serves
as custodian of the Plan. Individuals employed by the Company serve as
trustees (the "Trustees") of the Plan. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
("ERISA").
On June 11, 2001, assets of $38,639, were transferred to the Atchison
Casting Corporation 401(k) Plan. This amount represents two participants
who became salaried employees and were no longer eligible to participate
in the Plan.
Eligibility and Participation - Employees of the Company may begin
participation in the Plan the first day of the month following completion
of three months of service. Employees must be at least 18 years of age and
a member of the United Steelworkers of America, AFL-CIO Local 7274.
Contributions - Each year, participants may contribute up to 10% of
pre-tax annual compensation, as defined in the Plan document. The Company
makes discretionary contributions to the Plan based on annual union
contract negotiations. For the years ended June 30, 2001 and 2000, the
employer's discretionary profit sharing contribution was 3% of the
employee's straight-time earnings.
Effective July 1, 1999, the Company will make a matching contribution of
50% of a participant's pre-tax deferrals not to exceed 6% of the
participant's eligible compensation.
Participant Accounts - Each participant's account is credited with the
participant's contributions and withdrawals, as applicable, allocations of
the Company's contributions, and Plan earnings. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account balance.
Vesting - Participants are immediately vested in their contributions plus
actual earnings thereon. Vesting in the regular matching and employer
contributions of their accounts plus actual earnings thereon is based on
years of service. A participant is 100% vested in the Company's
contributions after seven years of credited service or upon retirement at
age 65. Effective June 26, 2001, a participant is vested after five years
of credited service or upon retirement at age 65.
Investment Options - Upon enrollment in the Plan, a participant may direct
contributions in investment options offered by Prudential.
-4-
During 2001 and 2000, investment options were as follows:
o The Prudential Insurance Company of America Guaranteed Interest Account
o MFS Massachusetts Investors Trust
o Oppenheimer Global Fund
o Prudential Governmental Securities Trust - Money Market Series
o AIM Balanced Fund
o Prudential Government Income Fund
o Prudential Stock Index Fund
o Fidelity Advisor Equity Income Fund
o Prudential High Yield Fund
o Van Kampen Emerging Growth Fund
o Prudential Small Company Value Fund
o Franklin Convertible Securities Fund
o Prudential Jennison Growth Fund
o Fidelity Advisor Equity Growth Fund
o MFS Massachusetts Investors Growth Stock Fund
o Atchison Casting Corporation Stock
o Prudential Value Fund
For more information regarding the Plan's investment alternatives and fund
performance, participants should refer to the Plan agreement and published
information provided by such funds.
Participants may change investment elections for future contributions at any
time and may transfer any existing balances among the offered funds, subject to
exchange limitations imposed by the funds.
Participant Loans - The Plan does not permit loans to participants or
beneficiaries.
Payment of Benefits - Distributions from the Plan are made upon death,
retirement, termination, or permanent disability pursuant to the Plan provisions
and as permitted by law. If a participant's vested account is less than $5,000,
the account balance must be distributed as a lump sum as soon as
administratively possible after separation from service. If the account balance
is $5,000 or greater, distributions may be made in the form of a lump sum, upon
request by the participant, or remain in the Plan.
Forfeitures - Forfeitures occur upon termination of employment by a participant
who is not fully vested in the Plan. Nonvested portions of a participant's
employer contribution account are forfeited and used to reduce employer
contributions for the Plan year in which the forfeitures occur. At June 30, 2001
there were no unapplied forfeited nonvested accounts. At June 30, 2000,
forfeited unallocated nonvested accounts totaled $3,464. In 2001 and 2000,
employer contributions were reduced by $15,530 and $24,950, respectively, from
forfeited nonvested accounts.
Expenses - Expenses of the Plan are paid by either the Plan or the Plan Sponsor,
as provided by the Plan document. All such expenses have been paid by the Plan
Sponsor in both 2001 and 2000.
-5-
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The financial statements of the Plan are prepared
under the accrual method of accounting.
Use of Estimates - The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect
the reported amount of assets, liabilities, and changes therein, and
disclosure of contingent assets and liabilities. Actual results could
differ from those estimates.
The Plan invests in mutual funds that hold various securities including
U.S. Government securities, corporate debt instruments, and corporate
stocks. Investment securities, in general, are exposed to various risks,
such as interest rate, credit, and overall market volatility. Due to the
level of risk associated with certain investment securities, it is
reasonably possible that changes in the values of investment securities
will occur in the near term and that such changes could materially affect
the amounts reported in the statements of net assets available for plan
benefits.
Investment Valuation and Income Recognition - The Plan's investments,
excluding the guaranteed interest account, are stated at fair value as
determined by quoted market prices. Purchases and sales of securities are
recorded on a trade date basis. Interest is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. See Note 3 regarding
the valuation of the guaranteed interest contract.
Payment of Benefits - Benefit payments are recorded when paid.
Reclassifications - Certain prior year balances have been reclassified to
conform with current year presentation.
3. INVESTMENT CONTRACT WITH INSURANCE COMPANY
The Plan follows the provisions of Statement of Position ("SOP") 94-4,
"Reporting of Investment Contracts Held by Health and Welfare Benefit
Plans and Defined Contribution Pension Plans." SOP 94-4 requires a defined
contribution plan to report investment contracts at fair value unless such
contract is fully benefit responsive. The contract for this Plan has been
deemed to be fully benefit responsive, according to the provisions of SOP
94-4. As such, the contract is presented at contract value, which
approximates fair value, on the statement of net assets available for
benefits as of June 30, 2001 and 2000. The average yield for the years
ended June 30, 2001 and 2000 are 4.85% and 5.98%, respectively. The
crediting interest rate as of June 30, 2001 and 2000 is 4.35% and 6.30%,
respectively. The crediting interest rate is reset upon the maturity of
the contract.
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4. INVESTMENTS
The following tables present the fair values of those investments that
exceeded 5% of the Plan's net assets available for benefits at June 30,
2001 and 2000:
2001
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Value per
Shares Share Fair
(rounded) (rounded) Value
The Prudential Insurance Company of America
Guaranteed Interest Account N/A N/A $ 633,242
MFS Massachusetts Investors Trust 13,798 $ 17.80 245,598
Oppenheimer Global Fund 2,692 48.68 131,056
Prudential Government Securities Trust -
Money Market Series 88,504 1.00 88,504
AIM Balanced Fund 2,784 27.67 77,020
2000
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Value per
Shares Share Fair
(rounded) (rounded) Value
The Prudential Insurance Company of America
Guaranteed Interest Account N/A N/A $ 702,228
MFS Massachusetts Investors Trust 13,437 $ 20.94 281,376
Oppenheimer Global Fund 2,149 68.65 147,506
Prudential Government Securities Trust -
Money Market Series 91,846 1.00 91,846
AIM Balanced Fund 2,673 32.95 88,074
During the years ended June 30, 2001 and 2000, the Plan's investments in
mutual funds (including gains and losses on investments bought and sold,
as well as held during the year) (depreciated) appreciated in value by
$(89,860) and $70,757, respectively.
5. PARTY-IN-INTEREST
Certain Plan investments are shares of mutual funds and a guaranteed
interest account managed by Prudential. Prudential is the custodian as
defined by the Plan, and, therefore, these transactions qualify as
party-in-interest.
6. PLAN TERMINATION
Although it has not expressed any intention 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 set forth in ERISA. In the
event of Plan termination, participants will become 100% vested in their
accounts.
7. PLAN TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated July 24, 1995 that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code ("IRC").
The Plan has been amended since receipt of this determination letter.
However, the Plan Sponsor believes that the Plan is currently designed and
being operated in compliance with the applicable provisions of the IRC.
8. NONEXEMPT TRANSACTIONS
During the years ended June 30, 2001 and 2000, employee deferrals of
$4,572 and $19,849, respectively, were withheld from certain payrolls and
not remitted on a timely basis (as defined by the Department of Labor (the
"DOL")) by the Plan Sponsor. All such deferrals were subsequently remitted
to the trust by the Plan Sponsor. These transactions were prohibited
according to the provisions of the DOL.
9. SUBSEQUENT EVENT
Subsequent to June 30, 2001, the domestic and international capital
markets have experienced significant volatility with respect to certain
investments and, as a result, Plan management believes that there has been
significant fluctuations in the values of the Plan's investments.
-7-
10. MANAGEMENT PLANS
The financial statements and supplemental schedules have been prepared
assuming that the Plan will continue as a going concern. Atchison Casting
Corporation (the "Parent"), the parent company of the Plan Sponsor, has
incurred losses in operations, has a deficiency in working capital and is
not in compliance with certain terms of its debt agreements. Should the
Parent not be able to continue as a going concern, the Plan may not be
able to operate as an ongoing plan.
Management of the Parent has taken steps in an effort to improve operating
performance and continues to pursue new or revised debt arrangements.
Management believes, however, that certain of the existing loan
arrangements will need to be revised or replaced to provide the Parent
with additional borrowing capacity and with financial covenants within
such arrangements that are achievable by the Parent. Management has
recently extended and modified their credit agreements through June 30,
2002 and continues to pursue a long-term credit facility.
******
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QUAKER ALLOY, INC.
401(k) PROFIT SHARING PLAN FOR UNION EMPLOYEES
FORM 5500, SCHEDULE G, PART III - SCHEDULE OF NONEXEMPT TRANSACTIONS
YEAR ENDED JUNE 30, 2001
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(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
Description of Transactions
Relationship of Plan, Including Maturity Date, Rate Expenses Current Net Gain (Loss)
Identity of Employer, or Other of Interest, Collateral, Par or Purchase Selling Lease Incurred With Cost of Value of on Each
Party Involved Party-in-Interest Maturity Value Price Price Rental Transaction Asset Asset Transaction
Quaker Alloy, Inc. Plan Sponsor Employee contributions not timely
remitted to the Trust $4,572* $ 4,572 $ 4,572
* This represents the total amount of contributions that were withheld from
employees, but not remitted timely to the trust by the Plan Sponsor.
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QUAKER ALLOY, INC.
401(k) PROFIT SHARING PLAN FOR UNION EMPLOYEES
FORM 5500, SCHEDULE H, PART IV, LINE 4i - SCHEDULE OF ASSETS HELD FOR
INVESTMENT PURPOSES AT THE END OF YEAR JUNE 30, 2001
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(a) (b) (c) (d)
Description of Investment
Including Maturity Date, Rate of
Identity of Issue, Borrower, Lessor Interest, Collateral, Par or Current
or Similar Party Maturity Value Value
* The Prudential Insurance Company of America Guaranteed Interest Account $ 633,242
MFS Massachusetts Investors Trust Mutual fund
(13,798 shares) 245,598
Oppenheimer Global Fund Mutual fund
(2,692 shares) 131,056
* Prudential Government Securities Trust - Mutual fund
Money Market Series (88,504 shares) 88,504
AIM Balanced Fund Mutual fund
(2,784 shares) 77,020
* Prudential Stock Index Fund Mutual fund
(2,420 shares) 66,305
Fidelity Advisor Equity Income Fund Mutual fund
(2,065 shares) 52,398
* Prudential High Yield Fund Mutual fund
(7,199 shares) 42,908
Van Kampen Emerging Growth Fund Mutual fund
(673 shares) 32,923
* Prudential Government Income Fund Mutual fund
(3,590 shares) 31,482
* Prudential Small Company Value Fund Mutual fund
(1,452 shares) 22,371
* Prudential Value Fund Mutual fund
(582 shares) 10,599
Franklin Convertible Securities Fund Mutual fund
(517 shares) 7,605
* Prudential Jennison Growth Fund Mutual fund
(187 shares) 2,914
MFS Massachusetts Investors Growth Stock Fund Mutual fund
(173 shares) 2,465
Fidelity Advisor Equity Growth Fund Mutual fund
(25 shares) 1,351
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Total investments $ 1,448,741
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* Represents a party-in-interest to the Plan.
-10-
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 hereunto
duly authorized.
QUAKER ALLOY, INC.
401(k) PROFIT SHARING PLAN
FOR UNION EMPLOYEES
Date January 11, 2002 By: Atchison Casting Corporation, the parent of
---------------- Quaker Alloy, Inc., its Administrator
By: /s/ Kevin T. McDermed
-----------------------------------------
Kevin T. McDermed
Vice President, Chief Financial Officer,
Treasurer and Secretary
EXHIBIT INDEX
Exhibit Number Description
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23 Consent of Deloitte & Touche LLP