1 - - - -------------------------------------------------------------------------------- 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 April 30, 1994 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 0-8088______________________________________________ FURON COMPANY EMPLOYEES' PROFIT-SHARING-RETIREMENT PLAN (Title of the plan) FURON COMPANY 29982 Ivy Glenn Drive Laguna Niguel, California 92677 (Name and address of principal executive office of the issuer of the securities held pursuant to the plan) - - - -------------------------------------------------------------------------------- 2 FURON COMPANY EMPLOYEES' PROFIT-SHARING-RETIREMENT PLAN INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES (ITEM 4(a)) Page ---- Report of Independent Auditors 1 Financial Statements: Statements of Net Assets Available for Plan Benefits at April 30, 1994 and 1993 2-3 Statements of Changes in Net Assets Available for Plan Benefits for the years ended April 30, 1994 and 1993 4-5 Notes to Financial Statements 6-10 Financial Statement Schedules: Item 27a Schedule of Assets Held for Investment Purposes at April 30, 1994 11 Item 27d Schedule of Reportable Transactions for the year ended April 30, 1994 12 Schedule of Party-in-Interest Transactions for the year ended April 30, 1994 13 3 FURON COMPANY EMPLOYEES' PROFIT-SHARING-RETIREMENT PLAN ITEM 1. Not applicable. ITEM 2. Not applicable. ITEM 3. Not applicable. ITEM 4. Financial statements and exhibits (a) Financial statements: Financial Statements and Financial Statement Schedules prepared in accordance with the financial reporting requirements of ERISA filed hereunder are listed in the Index to Financial Statements and Financial Statement Schedules, in lieu of the requirements of Items 1 to 3 above. (b) Exhibits: 23 Consent of Independent Auditors 4 REPORT OF INDEPENDENT AUDITORS The Administrative Committee Furon Company Employees' Profit- Sharing-Retirement Plan We have audited the financial statements of the Furon Company Employees' Profit-Sharing-Retirement Plan (the Plan) listed in the accompanying index to financial statements and financial statement schedules (Item 4 (a)). 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 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 listed in the accompanying index to financial statements and financial statement schedules present fairly, in all material respects, the net assets available for plan benefits of the Plan at April 30, 1994 and 1993, and the changes in net assets available for plan benefits for the years then ended, 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 accompanying financial statement schedules are presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and are not a required part of the basic financial statements. The financial statement schedules have been subjected to the auditing procedures applied in our audit of the 1994 financial statements and, in our opinion, are fairly stated in all material respects in relation to the 1994 basic financial statements taken as a whole. ERNST & YOUNG Orange County, CA June 24, 1994 5 FURON COMPANY EMPLOYEES' PROFIT-SHARING-RETIREMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS APRIL 30, 1994 Retirement Furon Government Company Managed Money Common Income Fidelity Fidelity Market Stock Portfolio Magellan Puritan Portfolio Fund Fund Fund Fund Fund ---------- ---------- ---------- ---------- ---------- Assets: Investments, at fair value $3,971,909 $7,672,384 $9,902,029 $4,898,733 $4,944,150 Loans receivable - - - - - ---------- ---------- ---------- ---------- ---------- Net assets avail- able for plan benefits $3,971,909 $7,672,384 $9,902,029 $4,898,733 $4,944,150 ========== ========== ========== ========== ========== Fidelity Fidelity Fidelity Investment Asset OTC Fidelity Grade Bond Manager Portfolio Contra- Participant Fund Fund Fund fund Loans Total ---------- -------- --------- -------- ----------- ----------- Assets: Investments, at fair value $176,589 $455,017 $138,796 $694,097 $ - $32,853,704 Loans receivable - - - - 534,670 534,670 -------- -------- -------- -------- -------- ----------- Net assets avail- able for plan benefits $176,589 $455,017 $138,796 $694,097 $534,670 $33,388,374 ======== ======== ======== ======== ======== =========== See accompanying notes. 2 6 FURON COMPANY EMPLOYEES' PROFIT-SHARING-RETIREMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS April 30, 1993 Furon Retirement Company Managed Government Common Income Fidelity Fidelity Money Market Stock Portfolio Magellan Puritan Portfolio Participant Fund Fund Fund Fund Fund Loans Total ---------- ---------- ---------- ---------- ------------ ----------- ----------- Assets: Investments, at fair value $4,591,208 $8,731,713 $8,642,050 $4,869,677 $5,895,459 $ - $32,730,107 Loans receivable - - - - - 342,297 342,297 ---------- ---------- ---------- ---------- ---------- -------- ----------- Net assets available for plan benefits $4,591,208 $8,731,713 $8,642,050 $4,869,677 $5,895,459 $342,297 $33,072,404 ========== ========== ========== ========== ========== ======== =========== See accompanying notes. 3 7 FURON COMPANY EMPLOYEES' PROFIT-SHARING-RETIREMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS Year ended April 30, 1994 Retirement Furon Government Fidelity Company Managed Money Investment Common Income Fidelity Fidelity Market Grade Stock Portfolio Magellan Puritan Portfolio Bond Fund Fund Fund Fund Fund Fund ---------- ---------- ----------- ---------- ---------- -------- Contributions: Employer $ 179,760 $ 266,153 $ 357,919 $ 184,126 $ 112,812 $ 7,065 Participants 421,282 622,744 915,202 479,855 518,445 18,921 Rollover contributions 5,053 546 16,098 7,298 10,111 903 ---------- ---------- ----------- ---------- ---------- -------- Total contributions 606,095 889,443 1,289,219 671,279 641,368 26,889 Net investment income (loss): Interest - 444,592 - - 151,163 - Interest on loans to participants 2,942 4,606 7,901 4,263 7,805 267 Dividends 64,223 - 886,665 579,035 - 8,447 Net appreciation (depreciation) in fair value of investments (342,165) - 192,790 (138,268) - (11,938) ---------- ---------- ----------- ---------- ---------- -------- Net investment income (loss) (275,000) 449,198 1,087,356 445,030 158,968 (3,224) ---------- ---------- ----------- ---------- ---------- -------- Total contributions and net investment income (loss) 331,095 1,338,641 2,376,575 1,116,309 800,336 23,665 Benefits paid to participants of divested divisions (204,120) (611,369) (478,782) (295,279) (182,260) - Benefits, terminations and withdrawals (364,064) (1,061,081) (1,114,593) (792,889) (738,345) (53) Fees on loans to participants - (131) (332) (369) (1,124) - ---------- ---------- ----------- ---------- ---------- -------- Increase (decrease) in net assets available for plan benefits (237,089) (333,940) 782,868 27,772 (121,393) 23,612 Account transfers (382,210) (725,389) 477,111 1,284 (829,916) 152,977 Net assets available for plan benefits: Beginning of year 4,591,208 8,731,713 8,642,050 4,869,677 5,895,459 - ---------- ----------- ----------- ---------- ---------- -------- End of year $3,971,909 $ 7,672,384 $ 9,902,029 $4,898,733 $4,944,150 $176,589 ========== =========== =========== ========== ========== ======== Fidelity Fidelity Asset OTC Fidelity Manager Portfolio Contra- Participant Fund Fund fund Loans Total -------- -------- -------- -------- ----------- Contributions: Employer $ 18,345 $ 6,893 $ 34,933 $ - $ 1,168,006 Participants 56,187 18,677 98,267 - 3,149,580 Rollover contributions 1,047 3,935 15,888 - 60,879 -------- -------- -------- -------- ----------- Total contributions 75,579 29,505 149,088 - 4,378,465 Net investment income (loss): Interest - - - - 595,755 Interest on loans to participants 31 62 867 - 28,744 Dividends 23,286 9,698 37,503 - 1,608,857 Net appreciation (depreciation) in fair value of investments 2,153 (10,249) (18,203) - (325,880) -------- -------- -------- -------- ----------- Net investment income (loss) 25,470 (489) 20,167 - 1,907,476 -------- -------- -------- -------- ----------- Total contributions and net investment income (loss) 101,049 29,016 169,255 - 6,285,941 Benefits paid to participants of divested divisions - (316) (17,088) - (1,789,214) Benefits, terminations and withdrawals (2,606) (2,495) (9,298) (93,377) (4,178,801) Fees on loans to participants - - - - (1,956) -------- -------- -------- -------- ----------- Increase (decrease) in net assets available for plan benefits 98,443 26,205 142,869 (93,377) 315,970 Account transfers 356,574 112,591 551,228 285,750 - Net assets available for plan benefits: Beginning of year - - - 342,297 33,072,404 -------- -------- -------- -------- ----------- End of year $455,017 $138,796 $694,097 $534,670 $33,388,374 ======== ======== ======== ======== =========== See accompanying notes. 4 8 FURON COMPANY EMPLOYEES' PROFIT-SHARING-RETIREMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS Year ended April 30, 1993 Furon Retirement Company Managed Government Common Income Fidelity Fidelity Money Market Stock Portfolio Magellan Puritan Portfolio Participant Fund Fund Fund Fund Fund Loans Total ----------- ----------- ---------- ---------- ----------- ---------- ----------- Contributions: Employer $ 223,424 $ 321,095 $ 375,887 $ 181,045 $ 95,733 $ - $ 1,197,184 Participants 524,827 751,723 940,991 448,707 620,997 - 3,287,245 Rollover contributions 1,480 4,227 2,522 3,097 4,000 - 15,326 ---------- ---------- ---------- ---------- ---------- -------- ----------- Total contributions 749,731 1,077,045 1,319,400 632,849 720,730 - 4,499,755 Net investment income: Interest - 501,768 - - 181,265 - 683,033 Interest on loans to participants 690 4,713 3,176 2,415 5,501 - 16,495 Dividends 68,831 - 1,040,476 378,447 - - 1,487,754 Net appreciation (depreciation) in fair value of investments 1,209,553 - 132,668 393,144 - - 1,735,365 ---------- ---------- ---------- ---------- ---------- -------- ----------- Net investment income 1,279,074 506,481 1,176,320 774,006 186,766 - 3,922,647 ---------- ---------- ---------- ---------- ---------- -------- ----------- Total contributions and net investment income 2,028,805 1,583,526 2,495,720 1,406,855 907,496 - 8,422,402 Benefits, terminations and withdrawals (658,018) (871,184) (643,473) (419,583) (555,427) - (3,147,685) Fees on loans to participants - (193) (237) (427) (639) - (1,496) ---------- ---------- ---------- ---------- ---------- -------- ----------- Increase in net assets available for plan benefits 1,370,787 712,149 1,852,010 986,845 351,430 - 5,273,221 Account transfers (627,331) 190,873 16,092 306,461 (228,392) 342,297 - Net assets available for plan benefits: Beginning of year 3,847,752 7,828,691 6,773,948 3,576,371 5,772,421 - 27,799,183 ---------- ---------- ---------- ---------- ---------- -------- ----------- End of year $4,591,208 $8,731,713 $8,642,050 $4,869,677 $5,895,459 $342,297 $33,072,404 ========== ========== ========== ========== ========== ======== =========== See accompanying notes. 5 9 1. Summary of significant accounting policies Basis of presentation The accompanying financial statements of the Furon Company Employees' Profit-Sharing-Retirement Plan (the Plan) have been prepared on the accrual basis of accounting. The Plan is a defined contribution profit sharing plan and is sponsored by Furon Company (the Company). Investment valuation The Plan values investments in marketable securities at the last reported sale price on the last business day of the Plan's year. Securities not traded on the last business day are valued at the last reported bid price. Money market funds are valued at cost, which approximates market. The Managed Income Portfolio Fund is valued at fair value as determined in good faith by the Trustee. Income tax status The Internal Revenue Service has issued a determination letter indicating that the Plan is qualified, in form, under Sections 401(a) and 401(k) of the Internal Revenue Code (the Code), and the underlying trust is, therefore, exempt from federal income taxes under Section 501(a) of the Code. The Administrative Committee (the Committee) of the Plan has indicated that it is not aware of any events which would cause the Plan to become disqualified in operation. Contributions Company contributions are accrued in the period in which they are authorized by the Board of Directors of the Company. Contributions by participants are recorded when payroll deductions are made. Other Purchases and sales of investments are reflected on the trade dates. Gains or losses on sales or distributions of investments are based on average cost. 6 10 2. Contributions and benefits Contributions to the Plan can be in the form of: (1) compensation deferral contributions which are withheld from the participant's pay and are limited to 10% of total compensation or the current IRS limitation, whichever is less; (2) voluntary after-tax contributions, also limited to 10% of compensation, which can either be withheld from the participant's pay or contributed directly by the participant; (3) Company primary contributions which are a percentage of total compensation, as defined, as determined by the Board of Directors and (4) Company matching contributions which are a percentage of the participant's compensation deferral contributions as determined by the Board of Directors. Participants are also allowed to make "rollover contributions" from other qualified plans, if such contributions are made in accordance with the Plan document. The following table summarizes amounts contributed by the Company: For the year For the year ended ended April 30, 1994 April 30, 1993 -------------- -------------- Company primary contribution, as a percent of compensation 1% 1% Company matching contribution, as a percent of participant compensation deferral contributions 25% 25% On March 22, 1994, the Board of Directors approved an increase in the Company matching contribution to 35% for the plan year ending April 30, 1995. Participants have nine funds from which to invest their contributions and those of the Company. These funds consist of a Managed Income Portfolio Fund, Retirement Government Money Market Portfolio Fund, the Fidelity Puritan Fund, the Fidelity Magellan Fund, the Furon Company Common Stock Fund, the Fidelity Investment Grade Bond Fund, the Fidelity Asset Manager Fund, the Fidelity Contrafund, and the Fidelity OTC Portfolio Fund. All of these funds except for the Fidelity Magellan Fund, the Fidelity Puritan Fund and the Fidelity Contrafund are components of other investment trust funds managed by Fidelity. Participant balances are invested at the participant's discretion and may be allocated among all funds. The allocation between funds may be changed at the participants discretion at any time. All amounts allocated to a participant's compensation deferral account, voluntary contribution account, rollover account, and matching contribution account (subject to certain annual eligibility requirements) are fully vested at all times. A participant's primary company contribution does not vest until the completion of five years of service at which time the contributions become fully vested. Notwithstanding the above, a participant shall become fully vested upon retirement at age 60 or older, death, permanent disability or plan termination. Participants may request a withdrawal of all or part of their voluntary contributions made prior to December 31, 1986. In addition, participants are entitled to request all or a portion of their salary deferral contributions, or all or part of their voluntary contributions made after December 31, 1987, if it is determined by the Committee that the request meets the IRS defined hardship withdrawal requirements. Such payments to participants are made in a lump sum. 7 11 2. Contribution and benefits (continued) Separate investment accounts are maintained for each participant and adjusted at least annually as follows: (a) For a pro rata share of income, expenses, and net appreciation (depreciation) in the fair value of investments of each respective Fund on the ratio of each participant's balance to the total of the respective Fund balance as of the date of the previous allocation. (b) For a pro rata share of the Company's primary contribution determined by the percentage which the participant's qualified compensation bears to the total qualified compensation of all participants through the last day of the Plan year. (c) At the Company's discretion unvested forfeitures may be allocated to remaining participants based upon the percentage of the remaining participant's compensation to the total compensation of all participants as described in (b). The amounts forfeited by terminated employees and used to reduce Company contributions for the years ended April 30, 1994 and 1993 were $130,000 and $200,000, respectively. Included in net assets available for plan benefits at April 30, 1994 and 1993 were $86,323 and $100,212, respectively, of terminated participants' nonvested benefits which will be reallocated, at the Company's discretion, to remaining participants or used to reduce future Company contributions. In accordance with the Retirement Equity Act of 1984 (REACT), former participants who return to employment with the Company prior to incurring a five consecutive year break in service, are entitled to have their previously forfeited amounts restored to their individual account. Amounts required to restore such account balances are provided by the Company. No current income tax liability accrues to the participants in connection with the Company's contributions, interest, dividends or capital gains (losses) realized by the Plan. Amounts distributed to the participants are taxable to the participants in accordance with tax laws governing qualified plan distributions. Also included in net assets available for plan benefits were $1,783,987 and $2,213,921 of nondistributed vested benefits related to participants who have terminated or retired from the Company at April 30, 1994 and 1993, respectively. Participants may borrow from their individual accounts, subject to approval of the Committee. The maximum amount which may be borrowed is limited to the lesser of 50% of the vested portion of the participant's account, or $50,000, with a minimum loan amount of $1,000. Generally, loan terms are over a five year period with payments to be made at least quarterly. However, if the loan is for the purchase of the participant's principal residence the Committee may permit the loan to be repaid over a ten year period. The loans bear interest at a fixed rate, established by the Committee, which must be at least equal to the prime rate in effect at the date of loan approval, plus 1%. In the event of a borrower's termination, final distribution, or death the participant's loan must be immediately repaid. 8 12 3. Net appreciation (depreciation) in fair value of investments Net appreciation (depreciation) in fair value of investments consist of both realized and unrealized gains and losses. Realized gains and losses are measured as the difference between historical cost of investments sold or redeemed during the year and the proceeds received from their redemption. Unrealized gains and losses are measured as the difference in fair market value at the beginning and end of the period as compared to historical cost. 4. Administration of the Plan The Plan is administered by the Committee which is appointed by the Company's Board of Directors. The Trustee of the Plan is Fidelity Management Trust Company. The trust agreement requires that the Trustee hold, administer and distribute the funds of the Plan in accordance with the text of the Plan and the instructions of the Committee. While the Company has not expressed any intent to terminate the Plan, it is free to do so at any time. In the event of such termination, each participant will automatically become fully vested to the extent of the balance in his separate account. The valuation and performance of the Plan's investment funds are subject to changes in market prices and credit risk. The investments held by the Funds, excluding the Furon Company Common Stock Fund, are made at the discretion of the Fund investment managers and are subject to ERISA regulations. In the event of non-performance by other parties, the Plan's exposure to credit loss on investments is limited to the carrying value of such investments. Except for the Furon Company Common Stock Fund, the Committee believes that no significant concentration of credit risk exists within each fund at April 30, 1994. The Company pays all expenses for the Plan incurred in the administration of the Plan. 9 13 5. Investments Investments at April 30, 1994 and 1993 are as follows: 1994 1993 ---------------------- ---------------------- Unit, shares Unit, shares or face Fair or face Fair amount value amount value ------ ----- ------ ----- Investments at fair value: Furon Company Common stock 260,453 $ 3,971,909 278,255 $ 4,591,208 Managed Income Portfolio 7,672,384 7,672,384 8,731,713 8,731,713 Fidelity Magellan Fund 140,614 9,902,029 125,048 8,642,050 Fidelity Puritan Fund 312,220 4,898,733 300,580 4,869,677 Retirement Government Money Market Portfolio 4,944,150 4,944,150 5,895,459 5,895,459 Fidelity Investment Grade Bond Fund 24,190 176,589 - - Fidelity Asset Manager 31,337 455,017 - - Fidelity OTC Portfolio 6,061 138,796 - - Fidelity Contrafund 22,765 694,097 - - ----------- ----------- Total investments at fair value $32,853,704 $32,730,107 =========== =========== 10 14 Financial Statement Schedules 15 SCHEDULE I FURON COMPANY EMPLOYEES' PROFIT-SHARING-RETIREMENT PLAN ITEM 27a SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES April 30, 1994 Description of Units, shares Fair Identity of Issue Investment or face amount Cost value ----------------- -------------- -------------- ---- ----- Furon Company Common Stock* Common Stock 260,453 $ 3,534,717 $ 3,971,909 Managed Income Portfolio* Commingled 7,672,384 7,672,384 7,672,384 Pension Fund Fidelity Magellan Fund* Mutual Fund 140,614 9,201,084 9,902,029 Fidelity Puritan Fund* Mutual Fund 312,220 4,577,396 4,898,733 Retirement Government Money Market Portfolio* Mutual Fund 4,944,150 4,944,150 4,944,150 Fidelity Investment Grade Bond Fund* Mutual Fund 24,190 188,191 176,589 Fidelity Asset Manager* Mutual Fund 31,337 466,459 455,017 Fidelity OTC Portfolio* Mutual Fund 6,061 148,941 138,796 Fidelity Contrafund* Mutual Fund 22,765 713,404 694,097 ----------- ----------- Total investments in securities $31,446,726 $32,853,704 =========== =========== * Party-in-interest 11 16 SCHEDULE II FURON COMPANY EMPLOYEES' PROFIT-SHARING RETIREMENT PLAN ITEM 27d SCHEDULE OF REPORTABLE TRANSACTIONS Year ended April 30, 1994 Current Expense value at Purchase Selling incurred with Cost of transaction Description of asset price price transaction asset sold date Net gain - - - -------------------- -------- ------- ------------- ---------- ----------- -------- Managed Income Portfolio $2,031,830 $ - $ - $ - $2,031,830 $ - Managed Income Portfolio - 3,091,158 - 3,091,058 3,091,158 - Fidelity Puritan Fund 1,909,546 - - - 1,909,546 - Fidelity Puritan Fund - 1,741,518 - 1,570,660 1,741,518 170,858 Fidelity Magellan Fund 4,363,783 - - - 4,363,783 - Fidelity Magellan Fund - 3,296,489 - 3,055,607 3,296,489 240,882 Retirement Government Money Market Portfolio 1,998,342 - - - 1,998,342 - Retirement Government Money Market Portfolio - 2,938,340 - 2,938,340 2,938,340 - The above schedule is a listing of transactions in the year ended April 30, 1994 that were greater than 5% of the net assets of the Plan at May 1, 1993. 12 17 SCHEDULE III FURON COMPANY EMPLOYEES' PROFIT-SHARING-RETIREMENT PLAN SCHEDULE OF PARTY-IN-INTEREST TRANSACTIONS Year ended April 30, 1994 A schedule of party-in-interest transactions has not been presented because there were no party-in-interest transactions which are prohibited by ERISA Section 406 and for which there is no statutory or administrative exemption. 13 18 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrative Committee has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. FURON COMPANY EMPLOYEES' PROFIT-SHARING-RETIREMENT PLAN By: JOHN V. MAY -------------------------------- John V. May Chairman of Plan Administrative Committee Dated: July 13, 1994