1
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 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
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 2-81315
Flow International Corporation Voluntary Pension and Salary Deferral Plan
Flow International Corporation
Post Office Box 97040
Kent, WA 98064-9740
(206) 850-3500
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Flow International Corporation
Voluntary Pension and Salary Deferral Plan
Financial Statements and Supplemental Schedules - Index
December 31, 1995
Page
Report of Independent Accountants 3
Statements of Net Assets Available for Plan Benefits 4
Statement of Changes in Net Assets Available for Plan
Benefits 5
Notes to Financial Statements 6
Supplemental Schedules (1):
Assets Held for Investment Purposes 12
Reportable Transactions 13
Signatures 14
Consent of Independent Accountants 15
(1) Other schedules required by Section 2520.103-10 of the Department
of Labor Rules and Regulations for Reporting and Disclosure
under ERISA have been omitted because such schedules are not
applicable.
3
Report of Independent Accountants
To the Participants and Administrative Committee of the
Flow International Corporation Voluntary Pension and
Salary Deferral Plan
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statement of changes in net assets available for
plan benefits present fairly, in all material respects, the net assets
available for plan benefits of the Flow International Corporation Voluntary
Pension and Salary Deferral Plan at December 31, 1995 and 1994, and the changes
in net assets available for plan benefits for the year ended December 31,
1995, in conformity with generally accepted accounting principles. 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 of these statements in accordance
with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion
expressed above.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
the accompanying supplemental schedules is presented for purposes of additional
analysis and is not a required part of the basic financial statements but is
additional information required by ERISA. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/S/ Price Waterhouse LLP
Seattle, Washington
June 27, 1996
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Flow International Corporation
Voluntary Pension and Salary Deferral Plan
Statements of Net Assets Available for Plan Benefits
December 31,
1995 1994
Assets:
Investments, at market
Large Company Fund $ 3,813,819 $ 2,678,141
Small Company Fund 3,439,411 2,374,517
International Fund 2,703,048 1,909,577
Money Market Fund 1,699,764 1,580,497
Bond Fund 1,240,808 1,113,007
FLOW Fund 799,131 474,162
Participant loans 122,024 185,142
Contributions receivable 162,956 127,367
Loan payments receivable 5,340 6,184
Interest and dividends receivable 35,690 20,501
----------------------
14,021,991 10,469,095
Liabilities:
Due to broker for securities
purchased, net 20,028
Accrued liabilities 13,918 15,690
----------------------
Net assets available for
plan benefits $13,988,045 $10,453,405
=========================
The accompanying notes are an integral part of these financial statements
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Flow International Corporation
Voluntary Pension and Salary Deferral Plan
Statement of Changes in Net Assets Available for Plan Benefits
Year ended
December 31, 1995
Additions to net assets attributed to:
Investment income:
Net appreciation in fair
value of investments $1,800,149
Interest 236,693
Dividends 198,870
---------
2,235,712
Employer contributions 661,355
Employee contributions 1,384,731
Rollovers from other qualified
retirement plans 738,590
-----------
Total additions 5,020,388
-----------
Deductions from net assets attributed to:
Benefits paid to participants 1,334,544
Administrative Expenses and other 151,204
-----------
Total deductions 1,485,748
-----------
Net increase 3,534,640
Net assets available for plan benefits
Beginning of year 10,453,405
-------------
End of year $13,988,045
=============
The accompanying notes are an integral part of these financial statements
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Flow International Corporation
Voluntary Pension and Salary Deferral Plan
Notes to Financial Statements
December 31, 1995 and 1994
Note 1 - Description of the Plan:
The Flow International Corporation Voluntary Pension and Salary Deferral Plan
(the "Plan") is a defined contribution plan for the benefit of the
non-bargaining employees of Flow International Corporation (the "Company"),
effective October 1, 1986.
The Plan is administered by the Advisory Committee appointed by the Board of
Directors of the Company. Qualified employees may elect to contribute any
amount between one percent and fifteen percent of their salary. The Company
shall contribute an amount equal to 50% of the first six percent of employee
compensation contributed for employees with less than five years of service
with the Company or 75% of the first six percent of employee compensation
contributed for employees with five years or more of service. Contributions
to the Plan are paid to a trust administered by the Plan trustees under the
terms of a trust agreement. The funds must be used for the exclusive benefit
of Plan participants and their beneficiaries.
Employees are eligible for participation in the Plan upon completion of one
year of service. Employer contributions and earnings thereon vest with
individual participants based upon years of service with the Company;
participants achieve one hundred percent vesting after five years of service
or at a normal retirement age. Unvested employer contributions relating to
terminated participants are forfeited and used to reduce the Company's
future contributions to the Plan. Participants are immediately vested in
their voluntary contributions plus actual earnings thereon. Vested benefits
are payable upon the retirement, death, disability or request at termination
of a participant.
Note 2 - Significant Accounting Policies:
Valuation of investments
The accompanying financial statements have been prepared using the accrual
basis of accounting.
Deposit administration contracts are stated at contract value which
approximates market value. Contract values represent contributions made
under the contracts, plus interest on the contracts, less funds used to
purchase annuities and pay related administrative expenses. Other
investments are stated at the quoted market value.
Recognition of income and expenses
Administrative expenses are charged to the Plan and are reflected in
these financial statements. The administrative expenses totaled
$145,317 for the year ended December 31, 1995.
Investment transactions are recorded on the date of the purchase or
sale. Gains or losses are determined based on the fair market value
of investments on the date of a transaction.
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Rollovers
The Plan allows transfers in from other qualified retirement plans.
Rollovers or plan-to-plan transfers are treated as contributions.
During 1995, the Company purchased certain net assets of ASI Robotics
Systems ("ASI") effective January 3, 1995. As part of the purchase
of ASI, the Company allowed participants in the ASI Robotics
Systems 401(k) Savings Plan (the "ASI Plan") to rollover account balances
into the Company's Plan. In addition the Company granted these
participants vesting rights in the Plan commensurate with their years
of service at ASI.
Participant loans
Effective September 30, 1992, the Company acquired all the stock in
Spider Staging Corporation ("Spider") which maintained the Spider
Staging Corporation 401(k) Savings Plan (the "Spider Plan") for its
employees. An amendment allowed the Company and Spider to merge the
Spider Plan into the Plan effective January 1, 1993. The Spider Plan
provided loans to participants, which were considered a participant
directed investment of their account. The loans represent
a trust investment, but only the borrowing participants' accounts shall
share in the interest paid on the loans or bear any expense or risk
of loss because of the loans. Participant loans are secured by the
vested portion of each borrower's account. The rate charged on the loan
is the prime rate as of the date of the loan's approval. Effective
January 1, 1993, the Plan does not provide for any new loans to
participants, except that loans totaling $21,986 held by former ASI
Plan participants were allowed to be rolled over into the Plan in 1995.
Repayments for the years ended December 31, 1995 and 1994 totaled
$72,615 and $101,531, respectively.
Reclassifications
Certain 1994 amounts have been reclassified to conform with the 1995
presentation.
Note 3 - Investments:
All Plan investments are held in trust by Bank of America (the "Trustee").
Plan participants may direct their salary deferral and employer matching
contributions to one or a combination of six investment selections, known
as the Large Company Fund, the Small Company Fund, the International
Fund, the Money Market Fund, the Bond Fund, and the FLOW Fund. The
Large Company Fund consists of two investment groups, Kunath, Karren,
Rinne & Atkin and Sirach Capital Management. Each of these investment
groups invest in large companies that exhibit the potential for a high
rate of earnings growth. The Small Company Fund consists of three
investment groups, Crestone Capital Management, ICM Asset Management, and
McKinley Capital Management. Each of these investment groups invest in
stock of small to medium size companies that exhibit the potential for a
high rate of earnings growth. The International Fund consists of the
Euro-Pacific Growth Mutual Fund and the American Small Cap World Mutual
Fund. Each of these funds invest in securities of companies located
outside the United States. These funds are managed by American Funds.
The Money Market Fund consists of investments in high quality corporate
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and U.S. Government securities that have maturities of less than one year
which are held in the Bank of America Short Term Investment Fund.
The Bond Fund invests in U.S. Government and Agency securities, corporate
bonds issued by high quality companies and deposit administration contracts
with insurance companies (Note 5). The management of investing in U.S.
Government and Agency securities and corporate bonds is done by Seaboard
Investment Advisers. The FLOW Fund consists of FLOW International
Corporation common stock which is publicly traded in the NASDAQ
National Market. The investment in FLOW stock is done directly by the
Trustee. Participants may transfer balances between funds as well as
change the investment allocation up to four times per year, but not more
frequently than every ninety days.
Changes in net assets available for plan benefits by investment account
from December 31, 1994 to December 31, 1995 are shown on the following
page.
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Changes in net assets available for plan benefits by investment account
for the year ended December 31, 1995:
Large Small International
Company Company Fund
Additions to net
assets attributed to:
Investment income
Net appreciation in fair
value of investments $698,925 $733,127 $189,019
Interest 29,516 27,327 (3,120)
Dividends 50,765 17,998 130,107
----------------------------------------
779,206 778,452 316,006
Employer contributions 170,259 177,562 141,301
Employee contributions 348,776 374,866 299,510
Rollovers from other
qualified retirement plans 166,290 154,580 149,694
----------------------------------------
Total additions 1,464,531 1,485,460 906,511
Participant transfers, net (28,572) (60,412) 90,117
----------------------------------------
Loan transactions, net 21,082 14,143 14,356
----------------------------------------
Deductions from net
assets attributed to:
Benefits paid to participants 271,142 293,268 199,075
Administrative expenses
and other 39,442 75,449 10,969
----------------------------------------
Total deductions 310,584 368,717 210,044
----------------------------------------
Net increase 1,146,457 1,070,474 800,940
Net assets available
for plan benefits:
Beginning of year 2,714,585 2,408,258 1,934,650
----------------------------------------
End of year $3,861,042 $3,478,732 $2,735,590
=========================================
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Money
Market Bond FLOW Participant
Fund Fund Fund Loans Total
Additions to net
assets attributed to:
Investment income
Net appreciation in fair
value of investments $18,919 $160,159 $1,800,149
Interest $100,010 72,258 693 $10,009 236,693
Dividends 198,870
-----------------------------------------------------
100,010 91,177 160,852 10,009 2,235,712
Employer contributions 62,601 59,480 50,152 661,355
Employee contributions 133,172 118,392 110,015 1,384,731
Rollovers from other
qualified retirement
plans 150,674 32,322 63,044 21,986 738,590
-----------------------------------------------------
Total additions 446,457 301,371 384,063 31,995 5,020,388
Participant
transfers, net 38,988 (75,464) 35,343 0
-----------------------------------------------------
Loan transactions, net 12,671 6,085 4,278 (72,615) 0
-----------------------------------------------------
Deductions from net
assets
attributed to:
Benefits paid
to participants 364,536 95,264 88,761 22,498 1,334,544
Administrative expenses
and other 12,040 9,234 4,070 151,204
-----------------------------------------------------
Total deductions 376,576 104,498 92,831 22,498 1,485,748
-----------------------------------------------------
Net increase (decrease) 121,540 127,494 330,853 (63,118) 3,534,640
Net assets available
for plan benefits:
Beginning of year 1,601,008 1,127,841 481,921 185,142 10,453,405
-----------------------------------------------------
End of year $1,722,548 $1,255,335 $812,774 $122,024 $13,988,045
=====================================================
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Note 4 - Deposit Administration Contracts With Insurance Companies:
The Plan has deposit administration contracts with Ameritas Financial
Services and Aetna Life Insurance and Annuity Company
("the Insurance Companies"), which are included in the Bond Fund. As of
December 31, 1995 and 1994 the value of the contracts with the Insurance
Companies was as follows:
Contract value at
December 31,
1995 1994
Aetna Life Insurance
and Annuity Company $562,776 $530,806
Ameritas Financial Services 159,608 149,269
----------- -----------
$722,384 $680,075
=========== ===========
Note 5 - Federal Income Taxes:
The Plan received an updated favorable determination letter from the
Internal Revenue Service dated February 10, 1995 as to the qualified status
of the Plan. The Company is of the opinion that the Plan continues to
fulfill the requirements of a qualified plan under Section 401(a) of the
Internal Revenue Code and that the trust which forms a part of the Plan is
not subject to tax. Accordingly, no provision for federal or state income
taxes has been provided.
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Supplemental Schedules
Flow International Corporation
Voluntary Pension and Salary Deferral Plan
Schedule of Assets Held for Investment Purposes
December 31, 1995
Description Shares Cost Fair value
Large Company Fund:
Kunath, Karren, Rinne & Atkin $1,730,543 $1,929,638
Regis Sirach Growth Fund 152,991 1,551,299 1,822,124
Cash Equivalents 62,057 62,057
---------- ----------
Total 3,343,899 3,813,819
Small Company Fund:
Crestone Capital Management 1,088,517 1,218,303
ICM Asset Management 1,057,089 1,123,800
McKinley Capital Management 606,666 730,998
Cash Equivalents 366,310 366,310
--------- ---------
Total 3,118,582 3,439,411
International Fund:
Euro-Pacific Growth Mutual Fund 87,100 1,893,465 2,014,628
Am. Small Cap World Mutual Fund 28,817 631,738 677,209
Cash Equivalents 11,211 11,211
--------- ---------
Total 2,536,414 2,703,048
The Money Market Fund:
Bank of America Short Term
Investment Fund 1,699,764 1,699,764
The Bond Fund:
Aetna Life Insurance
Group Annuity 562,776 562,776
Ameritas Life Insurance
Group Annuity 159,608 159,608
Bank of America Short Term
Investment Fund 518,424 518,424
--------- ---------
Total 1,240,808 1,240,808
FLOW Fund:
FLOW International Common Stock 85,132 654,941 798,113
Cash Equivalents 1,018 1,018
--------- ---------
Total 655,959 799,131
Participant Loans:
Due 3/27/1996 - 10/15/2016 122,024 122,024
Interest Rates 6% - 9%
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Flow International Corporation
Voluntary Pension and Salary Deferral Plan
Schedule of Reportable Transactions
For the Year Ended December 31, 1995
Cost of
Assets
Sales/ Sold/ Gain/
Purchases(1) maturities(1) matured (loss)
Large Company Fund $3,151,610 $2,714,827 $2,568,815 $146,012
Small Company Fund 5,664,985 5,319,505 4,869,606 449,899
International Fund 2,048,700 1,444,242 1,448,453 (4,211)
Bond Fund 2,139,111 2,030,201 2,025,260 4,941
(1) Series of transactions involving an amount in excess of 5% of the
current value of plan net assets at January 1, 1995.
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Signatures
The Flow International Corporation Voluntary Pension and Salary Deferral
Plan. 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 by the undersigned
thereunto duly authorized.
The Flow International Corporation
Voluntary Pension and Salary Deferral Plan
Date: June 27, 1996
By ________________________________
Jan Canon
Plan Advisor Committee Member
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Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
consituting part of the Registration Statement on Form S-3 (No. 33-57100)
and in the Registration Statement on Form S-8 (No. 33-40397 and No. 33-44776)
of Flow International Corporation of our report dated June 27, 1996 appearing
on page 3 of this Form 11-K.
/S/ Price Waterhouse LLP
Seattle, Washington
June 27, 1996