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UNITED STATES
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
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ___________ TO _________
COMMISSION FILE NUMBER 0-24068
__________________
A. FULL TITLE OF THE PLAN AND ADDRESS OF THE PLAN, IF DIFFERENT FROM THAT OF
THE ISSUER NAMES BELOW: CONSOLIDATED GRAPHICS, INC. EMPLOYEE 401(K)
SAVINGS PLAN.
B. NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN AND THE ADDRESS
OF ITS PRINCIPAL EXECUTIVE OFFICE: CONSOLIDATED GRAPHICS, INC., 5858
WESTHEIMER, SUITE 200, HOUSTON, TEXAS 77057.
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CONSOLIDATED GRAPHICS, INC.
EMPLOYEE 401(k) SAVINGS PLAN
INDEX
PAGE
------
Independent Auditors' Report........................................1
Statement of Net Assets Available for Benefits -
December 31, 1997...............................................2
Statement of Changes in Net Assets Available for Benefits with
Fund Information - Year ended December 31, 1997.................3
Notes to Financial Statements.......................................4
SUPPLEMENTAL SCHEDULES
1 Item 27(a) - Schedule of Assets Held for Investment Purposes....9
2 Item 27(d) - Schedule of Reportable Transactions...............10
Signatures.........................................................11
INDEPENDENT AUDITORS' REPORT
The Plan Administrator
Consolidated Graphics, Inc.
Employee 401(k) Plan:
We have audited the accompanying statement of net assets available for benefits
of Consolidated Graphics, Inc. Employee 401(k) Savings Plan (the Plan) as of
December 31, 1997, and the related statement of changes in net assets available
for benefits with fund information for the year ended December 31, 1997. 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 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 Plan as of
December 31, 1997, and the changes in net assets available for benefits with
fund information for the year ended December 31, 1997, in conformity with
generally accepted accounting principles.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of (1) assets
held for investment purposes and (2) reportable transactions 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 supplemental
schedules are the responsibility of the Plan's management. The fund information
in the statement of changes in net assets available for benefits is presented
for purposes of additional analysis rather than to present the changes in net
assets available for plan benefits of each fund. The supplemental schedules and
fund information have been subjected to the auditing procedures applied in the
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/ KPMG LLP
Houston, Texas
September 25, 1998
CONSOLIDATED GRAPHICS, INC.
EMPLOYEE 401(k) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
1997
------------
Assets:
Cash - interest bearing .................................. $ 1,036
Investments:
At fair value:
Consolidated Graphics, Inc.
Common Stock Account ......................... 728,292*
Janus Worldwide ..................................... 1,100,610*
U.S. Global Resources ............................... 205,229
Bonnel Growth ....................................... 1,052,498*
Dreyfus S&P 500 Index ............................... 792,155*
Janus Flexible Income ............................... 275,747
U.S. Government Securities Savings .................. 1,309,074*
----------
5,463,605
Participant notes receivable - at cost ................... 141,136
----------
Total investments ........................... 5,604,741
Participants' contributions receivable ................... 111,611
----------
Total assets ................................ 5,717,388
Liabilities:
Trustee fees payable ..................................... 455
----------
Net assets available
for benefits .............................. $5,716,933
==========
*Represents 5% or more of net assets available for benefits.
See accompanying notes to financial statements.
2
CONSOLIDATED GRAPHICS, INC.
EMPLOYEE 401(k) SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits with Fund Information
Year ended December 31, 1997
CONSOLIDATED
GRAPHICS, INC.
CASH - COMMON U.S. DREYFUS
INTEREST- STOCK JANUS GLOBAL BONNEL S&P 500
BEARING ACCOUNT WORLDWIDE RESOURCES GROWTH INDEX
------------ ------------- ----------- ------------ ----------- ------------
Additions to net assets attributed to:
Investment income ..................... $ 8,077 $ 225 $ 74,565 $ 1 $ 144,800 $ 19,803
Realized gains ........................ -- 10,360 9,331 809 1,593 3,665
Unrealized gains (losses) ............. -- 123,580 (19,831) (26,303) (98,595) 41,998
Contributions:
Employees ........................... 512,585 -- 933,076 214,275 855,347 567,493
Rollover from plan mergers .......... -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total additions ................... 520,662 134,165 997,141 188,782 903,145 632,959
----------- ----------- ----------- ----------- ----------- -----------
Deductions from net assets attributed to:
Benefits and withdrawals .............. 2 19,593 20,448 6,901 13,876 9,524
Trustee fees .......................... -- 64 347 72 246 --
----------- ----------- ----------- ----------- ----------- -----------
Total deductions .................. 2 19,657 20,795 6,973 14,122 9,524
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) before
interfund transfers ............. 520,660 114,508 976,346 181,809 889,023 623,435
Interfund transfers ..................... (519,624) 613,784 124,264 23,420 163,475 168,720
----------- ----------- ----------- ----------- ----------- -----------
Net increase ...................... 1,036 728,292 1,100,610 205,229 1,052,498 792,155
Net assets available for benefits:
Beginning of year ..................... -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
End of year ........................... $ 1,036 $ 728,292 $ 1,100,610 $ 205,229 $ 1,052,498 $ 792,155
=========== =========== =========== =========== =========== ===========
U.S.
JANUS GOVERNMENT PARTICIPANT
FLEXIBLE SECURITIES NOTES
INCOME SAVINGS RECEIVABLE OTHER TOTAL
------------ ------------- ------------- --------- ---------
Additions to net assets attributed to:
Investment income ..................... $ 10,817 $ 109,055 $ 2,491 $ -- $ 369,834
Realized gains ........................ 431 -- -- 26,189
Unrealized gains (losses) ............. (346) -- -- 20,503
Contributions:
Employees ........................... 196,852 226,380 -- 111,611 3,617,619
Rollover from plan mergers .......... -- 1,856,758 139,370 -- 1,996,128
----------- ----------- ----------- ----------- -----------
Total additions ................... 207,754 2,192,193 141,861 111,611 6,030,273
----------- ----------- ----------- ----------- -----------
Deductions from net assets attributed to:
Benefits and withdrawals .............. 1,449 239,532 725 -- 312,050
Trustee fees .......................... 21 85 -- 455 1,290
----------- ----------- ----------- ----------- -----------
Total deductions .................. 1,470 239,617 725 455 313,340
----------- ----------- ----------- ----------- -----------
Net increase (decrease) before
interfund transfers ............. 206,284 1,952,576 141,136 111,156 5,716,933
Interfund transfers ..................... 69,463 (643,502) -- -- --
----------- ----------- ----------- ----------- -----------
Net increase ...................... 275,747 1,309,074 141,136 111,156 5,716,933
Net assets available for benefits:
Beginning of year ..................... -- -- -- -- --
----------- ----------- ----------- ----------- -----------
End of year ........................... $ 275,747 $ 1,309,074 $ 141,136 $ 111,156 $ 5,716,933
=========== =========== =========== =========== ===========
See accompanying notes to financial statements.
3
CONSOLIDATED GRAPHICS, INC.
EMPLOYEE 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
(1) DESCRIPTION OF PLAN
The following description of the Consolidated Graphics, Inc. (the
"Company") Employee 401(k) Plan (the "Plan") provides only general
information. Participants should refer to the Plan agreement for a more
complete description of the Plan's provisions.
(A) GENERAL
The Plan was established effective January 1, 1997, as a defined
contribution plan covering all full-time employees of the Company who
have one year of service or at least 1,000 hours of service and are
age nineteen or older. The Plan is subject to the provisions of the
Employees Retirement Income Security Act of 1974 ("ERISA").
During 1997, the Company executed three asset transfer agreements to
merge the 401(k) plans of acquired printing businesses into the Plan.
The following plans were merged into the Plan as of the following
dates:
PLAN NAME DATE
Theo Davis 401(k) Profit Sharing Plan October 1, 1997
Tulsa Litho Company Profit Sharing and 401(k) Plan October 3, 1997
Direct Color 401(k) Plan November 5, 1997
The Plan is administered by the Company's Retirement Committee.
Security Trust & Financial Company serves as the Plan trustee and
custodian. Plan administrative expenses are paid by the Company.
(B) CONTRIBUTIONS
Each year, participants may contribute from 1 percent to 15 percent of
their pretax annual compensation not to exceed $9,500, as defined in
the Plan agreement. Participants may also contribute amounts
representing distributions from other qualified defined benefit or
contribution plans. The Plan also provides for discretionary employer
matching, not exceeding 6% of annual compensation. Additional amounts
may also be contributed by the employer at the option of the Company's
board of directors. During 1997, the Company made no discretionary
contributions to the Plan.
(C) PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's
contribution and allocations of (i) the Company's contribution and
(ii) Plan earnings, and charged with an allocation of administrative
expenses. Allocations are based on participant earnings or account
balances, as defined. The benefit to which the participant is entitled
is the benefit that can be provided from the participant's vested
interest in his or her account.
4
CONSOLIDATED GRAPHICS, INC.
EMPLOYEE 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
(D) VESTING
Participants are immediately vested in their contributions plus actual
earnings thereon and qualified employer matching contributions. The
vesting of certain discretionary contributions made by the employer
plus earnings and losses thereon, is based on years of continuous
services. A participant vests at a rate of 20% per year until fully
vested after five years of credited service.
(E) INVESTMENT OPTIONS
Upon enrollment in the Plan, a participant may direct contributions in
1 percent increments in any of seven investment options.
o CONSOLIDATED GRAPHICS, INC. COMMON STOCK ACCOUNT - Invests in
the Company's common stock.
o JANUS WORLDWIDE FUND - A diversified fund that seeks long-term
growth of capital by investing primarily in common stocks of
foreign and domestic issues.
o U.S. GLOBAL RESOURCES FUND - Seeks long-term growth of capital,
while providing protection against inflation and monetary
instability by investing in natural resource-related companies
around the globe.
o BONNELL GROWTH FUND - Seeks long-term growth of capital by
investing primarily in the common stocks of domestic and foreign
small to midsize capital companies.
o DREYFUS S & P 500 INDEX FUND - Seeks to provide investment
results that correspond to the price and yield performance of
publicly-traded common stocks in the aggregate, as represented
by the Standard & Poor's 500 Composite Price Index.
o JANUS FLEXIBLE INCOME FUND - A diversified fund that seeks
current income and long-term growth of capital by investing
primarily in income-producing equity securities.
o U.S. GOVERNMENT SECURITIES SAVINGS FUND - Seeks to preserve
capital and generate income by investing exclusively in
short-term securities backed by the United States government or
its agencies.
Participants may change their investment options at any time.
5
CONSOLIDATED GRAPHICS, INC.
EMPLOYEE 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
(F) PARTICIPANT NOTES RECEIVABLE
Participants may borrow from their fund accounts a minimum of $1,000
up to a maximum equal to the lesser of $50,000 or 50 percent of the
participant's vested account balance. Loan transactions are treated as
a transfer to (from) the investment fund from (to) the Participant
Notes fund. Loan terms range from 1 to 5 years or up to 25 years for
the purchase of a primary residence. The loans are secured by the
balance in the participant's account and bear interest at a rate
commensurate with local prevailing rates as determined by the Plan
administrator. Principal and interest payments will be made by means
of payroll withholdings according to the terms of the promissory note.
(G) PAYMENT OF BENEFITS
Upon termination of services due to death or retirement, a participant
may elect to receive either a lump-sum amount equal to the value of
the participant's vested interest in his or her account, or annual
installments as requested by the employee. For termination of service
due to other reasons, a participant may receive the value of the
vested interest in his or her account as a lump-sum distribution.
(H) FORFEITED ACCOUNTS
At December 31, 1997, there were no forfeited nonvested accounts.
(2) SUMMARY OF ACCOUNTING POLICIES
(A) BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under the accrual
method of accounting.
(B) USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets,
liabilities, and changes therein, and disclosure of contingent assets
and liabilities. Actual results could differ from those estimates.
(C) INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value. Shares of registered
investment companies are valued at quoted market prices which
represent the net asset value of shares held by the Plan at year end.
The Company's common stock is valued at its quoted market price.
Participant notes receivable are valued at cost which approximates
fair value.
6
CONSOLIDATED GRAPHICS, INC.
EMPLOYEE 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are
recorded on the ex-dividend date.
(D) PAYMENT OF BENEFITS
Benefits are recorded when paid.
(3) RELATED PARTY TRANSACTIONS
Certain Plan investments are in funds managed by Security Trust and
Financial Company, the Plan trustee. In addition, the Plan invests in the
Company's common stock, as well as participant notes receivable. These
transactions qualify as party-in-interest transactions.
(4) PLAN TERMINATION
Although it 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 percent vested in their accounts.
(5) RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per
the financial statements to the Form 5500 at December 31, 1997:
Net assets available for benefits
per the financial statements .... $ 5,716,933
Amounts allocated to withdrawing
participants .................... (5,254)
-----------
Net assets available for
benefits per the Form 5500 $ 5,711,679
===========
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500 at December 31, 1997:
Benefits paid to participants per
the financial statements ........ $312,050
Add: Amounts allocated to
withdrawing participants at
December 31, 1997 ............... 5,254
--------
Benefits paid to participants
per the Form 5500 ........ $317,304
========
7
CONSOLIDATED GRAPHICS, INC.
EMPLOYEE 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
Amounts allocated to withdrawing participants are recorded on the Form 5500
for benefit claims that have been processed and approved for payment prior
to December 31, 1997, but not yet paid as of that date.
(6) TAX STATUS
The Internal Revenue Service has not determined or informed the Company by
letter that the Plan and related trust are designed in accordance with
applicable sections of the Internal Revenue Code ("IRC"). A determination
letter will be requested. The Plan administrator believes that the Plan is
designed and is currently being operated in compliance with the applicable
requirements of the IRC.
(7) SUBSEQUENT EVENTS
Subsequent to December 31, 1997, the Company executed three asset transfer
agreements to merge the 401(k) plans of acquired subsidiaries into the
Plan. The following plans were merged into the Plan as of the following
dates: the Garner Printing Company Savings Plan - April 9, 1998, the Walnut
Circle Press, Inc. 401(k) Plan - September 30, 1998, and the Retirement
Plan for Employees of Continental Graphics Corporation Commercial Printing
Division - October 22, 1998.
8
SCHEDULE 1
CONSOLIDATED GRAPHICS, INC.
EMPLOYEE 401(k) SAVINGS PLAN
ITEM 27(A) - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1997
CURRENT
IDENTITY OF ISSUER DESCRIPTION OF INVESTMENT COST VALUE
- --------------------------------------- ------------------------------ --------------- -----------
Security Trust and Financial Company * Cash - interest bearing $ 1,036 1,036
Consolidated Graphics, Inc. * Consolidated Graphics, Inc. 601,249 728,292
Common Stock Account
Security Trust and Financial Company * Janus Worldwide 1,115,579 1,100,610
Security Trust and Financial Company * U.S. Global Resources 231,359 205,229
Security Trust and Financial Company * Bonnel Growth 1,152,144 1,052,498
Security Trust and Financial Company * Dreyfus S&P 500 Index 747,963 792,155
Security Trust and Financial Company * Janus Flexible Income 276,262 275,747
Security Trust and Financial Company * U.S. Government Securities
Savings 1,309,074 1,309,074
-- Participant notes receivable,
with terms ranging from
1-5 years, interest at
8.50% per year* - 141,136
------------- -----------
$ 5,434,666 5,605,777
============= ===========
* Represents party-in-interest transactions.
See accompanying independent auditors' report.
9
SCHEDULE 2
CONSOLIDATED GRAPHICS, INC.
EMPLOYEE 401(k) SAVINGS PLAN
ITEM 27(D) - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1997
NET
PURCHASE SELLING CURRENT GAIN/
IDENTITY OF ISSUER DESCRIPTION OF ASSET PRICE PRICE COST VALUE (LOSS)
- ------------------ ----------------------------------- ----------- ---------- --------- ------------ -----------
Security Trust and
Financial Company* U.S. Government Securities Savings $ - - - 1,349,510 - **
Security Trust and
Financial Company* U.S. Government Securities Savings - - - 341,598 - **
* Represents party-in-interest transactions.
** Represents rollovers from plan mergers.
See accompanying independent auditors' report.
10
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
TRUSTEE (OR OTHER PERSONS WHO ADMINISTER THE PLAN) HAS DULY CAUSED THIS
ANNUAL REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED HEREUNTO DULY
AUTHORIZED.
Consolidated Graphics, Inc. Employee 401(k) Savings Plan
By: /s/ RONALD E. HALE, JR.
Ronald E. Hale, Jr.
Member of the Employee 401(k)
Savings Plan Retirement Committee
Date: March 4, 1999
11