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:
EMPIRE STEEL CASTINGS, 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
Empire Steel
Castings, Inc. 401(k)
Profit Sharing Plan for
Union Employees
Financial Statements as of and for the Years
Ended June 30, 2001 and 2000, Supplemental
Schedules as of and for the Years Ended June 30,
2001 and 2000, and Independent Auditors' Report
EMPIRE STEEL CASTINGS, 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 4-7
SUPPLEMENTAL SCHEDULES:
Form 5500, Schedule G, Part III - Schedule of Nonexempt Transactions for the
Year Ended June 30, 2000 8
Form 5500, Schedule G, Part III - Schedule of Nonexempt Transactions for the
Year Ended June 30, 2001 9
Form 5500, Schedule H, Part IV, Line 4i - Schedule of Assets Held for Investment Purposes 10
at the End of Year June 30, 2001
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
Empire Steel Castings, Inc.
401(k) Profit Sharing Plan for Union Employees
We have audited the accompanying statements of net assets available for benefits
of the Empire Steel Castings, 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 audits 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, 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 June 30,
2000, 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
EMPIRE STEEL CASTINGS, 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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ASSETS 2001 2000
INVESTMENTS:
Mutual funds $ 974 $
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Total investments 974
CONTRIBUTIONS RECEIVABLE:
Employer 14,198 4,485
Participant 214
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Total contributions receivable 14,412 4,485
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NET ASSETS AVAILABLE FOR BENEFITS $15,386 $ 4,485
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See notes to financial statements.
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EMPIRE STEEL CASTINGS, 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 $ 2 $
Net appreciation in fair value of investments 17
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Net investment income 19
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Contributions:
Employer 9,713 4,485
Participant 1,169
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Total contributions 10,882 4,485
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NET INCREASE 10,901 4,485
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 4,485
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End of year $15,386 $ 4,485
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See notes to financial statements.
-3-
EMPIRE STEEL CASTINGS, 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 Empire Steel Castings, 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 provisions.
General - The Plan is a defined contribution plan sponsored by Empire
Steel Castings, Inc. (the "Company" or "Plan Sponsor"). Prudential
Investments ("Prudential") serves as custodian of the Plan. An individual
employed by the Plan Sponsor serves as trustee (the "Trustee") of the
Plan. The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA").
Eligibility and Participation - Employees are eligible to participate in
the Plan on the first day of the month immediately following the later of
three months after their first day of employment or the date they attain
age 18.
An employee is not eligible to participate in the Plan if not a member of
a collective bargaining unit, not covered by the collective bargaining
agreement or employed prior to January 1, 1998.
Contributions - Plan participants may contribute a portion of their
pre-tax base compensation, subject to certain Internal Revenue Code
("IRC") limitations. The Company makes non-elective contributions equal to
7% of the Company's net profit, defined as earnings before interest and
taxes, with a minimum of 3% of straight-time earnings.
Participant Accounts - Each participant's account is credited with the
participant's contributions and 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 Company's contribution to their
accounts plus actual earnings thereon is based on years of service. A
participant is 100% vested after seven 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.
During 2001 and 2000, the investment options were as follows:
o Prudential Government Securities Trust - Money Market Series
o Prudential Stock Index Fund
o Fidelity Advisor Equity Income Fund
o Fidelity Advisor Equity Growth Fund
o Oppenheimer Global Fund
o Prudential Government Income Fund
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o MFS Massachusetts Investors Trust
o MFS Massachusetts Investors Growth
o Prudential Jennison Growth Fund
o Van Kampen Emerging Growth Fund
o Prudential High Yield Fund
o The Prudential Insurance Company of America Guaranteed Interest Account
o Prudential Small Company Fund
o AIM Balanced Fund
o Franklin Convertible Securities Fund
o Prudential Value Fund
o Atchison Casting Corporation Stock
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 can be in the form of
a lump sum or the account balance may 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 matching contributions and nonelective contributions for
the plan year in which the forfeiture occurs. At June 30, 2001 and June
30, 2000, there were no forfeited nonvested accounts.
Expenses - Expenses of the Plan are paid by either the Plan or the Plan
Sponsor, as provided by the Plan document. No expenses were paid by the
Plan in 2001 or 2000.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The financial statements of the Plan are prepared on
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.
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Investments Valuation and Income Recognition - The Plan's investments are
stated at fair value as determined by quoted market prices. Purchases and
sales of securities are recorded on a trade-date basis. Interest income is
recorded on the accrual basis. Dividend income is recorded on the
ex-dividend date.
Payment of Benefits - Benefit payments are recorded when paid.
3. INVESTMENTS
The following table presents the fair values of those investments that
exceeded 5% of the Plan's net assets available for benefits at June 30,
2001:
2001
Value Per
Shares Share Fair
(Rounded) (Rounded) Value
Prudential Government Securities Trust -
Money Market Series 540 $ 1.00 $ 540
Prudential Stock Index Fund 16 27.13 434
During 2001, the Plan's investments in mutual funds (including gains and
losses on investments bought and sold, as well as held during the year)
appreciated in value by $17.
4. PARTY-IN-INTEREST
Certain Plan investments are shares of mutual funds managed by Prudential.
Prudential is the custodian as defined by the Plan, therefore, these
transactions qualify as party-in-interest.
5. PLAN TERMINATION
Although the Company 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 100% vested in their
accounts.
6. PLAN TAX STATUS
The Company has adopted a nonstandardized prototype plan, which has
received a favorable opinion letter from the Internal Revenue Service,
dated March 11, 1994, stating that the prototype plan complied with the
applicable sections of the IRC. However, the Company has not requested a
determination letter, but the Plan Sponsor believes the Plan, as currently
operated, is qualified and tax-exempt. Therefore, no provision for income
taxes has been included in the Plan's financial statements.
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7. NONEXEMPT TRANSACTIONS
During the year ended June 30, 2001 and 2000, employee deferrals of $427
were withheld from certain payrolls and not remitted on a timely basis and
employer contributions of $4,485, respectively, were 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 were prohibited transactions according to the
provisions of the DOL.
8. SUBSEQUENT EVENTS
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.
The Empire Steel Castings, Inc. plant closed October 31, 2001, but there
has been no board resolution to terminate or freeze the plan.
9. 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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EMPIRE STEEL CASTINGS, INC.
401(k) PROFIT SHARING PLAN FOR UNION EMPLOYEES
FORM 5500, SCHEDULE G, PART III - SCHEDULE OF NONEXEMPT TRANSACTIONS
YEAR ENDED JUNE 30, 2000
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(a) (b) (c) (d) (e) (f) (g) (h) (I) (j)
Relationship of Description of Transactions Net Gain/
Plan, Employer Including Maturity Date, Rate Expenses (Loss)
Identity of or Other of Interest, Collateral, Par or Purchase Selling Lease Incurred with Cost of Current Value on Each
Party Involved Party-in-Interest Maturity Value Price Price Rental Transaction Asset of Asset Transaction
Empire Steel Castings, Inc. Plan Sponsor Employer contributions not
timely remitted to the Trust $4,485* $ 4,485 $ 4,485
*This represents the total amount of employer contributions that were not
remitted timely to the trust by the Plan Sponsor.
-8-
EMPIRE STEEL CASTINGS, 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)
Relationship of Description of Transactions Net Gain/
Plan, Employer Including Maturity Date, Rate Expenses (Loss)
Identity of or Other of Interest, Collateral, Par or Purchase Selling Lease Incurred with Cost of Current Value on Each
Party Involved Party-in-Interest Maturity Value Price Price Rental Transaction Asset of Asset Transaction
Empire Steel Castings, Inc. Plan Sponsor Employee contributions not
timely remitted to the Trust $427* $427 $ 427
*This represents the total amount of contributions that were withheld from
employees, but not remitted timely to the trust by the Plan Sponsor.
-9-
EMPIRE STEEL CASTINGS, 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,
Identity of Issue, Borrower, Rate of Interest, Collateral, Current
Lessor or Similar Party Par or Maturity Value Value
* Prudential Government Securities Trust - Mutual fund
Money Market Series (540 shares) $ 540
* Prudential Stock Index Fund Mutual fund
(16 shares) 434
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Total investments $ 974
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* Represents 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.
EMPIRE STEEL CASTINGS, INC.
401(k) PROFIT SHARING PLAN
FOR UNION EMPLOYEES
Date January 11, 2002 By: Atchison Casting Corporation, the parent of
---------------- Empire Steel Castings, Inc., its Administrator
By: /s/ Kevin T. McDermed
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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
