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 For the fiscal year ended December 31, 2001
or
|_| TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ____________ to ____________
Commission File Number: 0-795
A. Full title of the plan and address of the plan, if different from
that of the issuer named below:
BADGER PAPER MILLS, INC.
PROFIT SHARING PLAN AND TRUST FOR NON-UNION EMPLOYEES
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
BADGER PAPER MILLS, INC.
200 West Front Street
Peshtigo, Wisconsin 54157
REQUIRED INFORMATION
The following financial statements and schedules of the Badger Paper
Mills, Inc. Profit Sharing Plan and Trust for Non-Union Employees, prepared in
accordance with the financial reporting requirements of the Employee Retirement
Income Security Act of 1974, as amended, are filed herewith.
2
Financial statements and report of independent certified public accountants
Badger Paper Mills, Inc. Profit Sharing Plan and Trust for Non-Union Employees
December 31, 2001 and 2000
3
C O N T E N T S
Page
Report of Independent Certified Public Accountants 5
Financial Statements
Statements Of Net Assets Available For Benefits 6
Statements Of Changes In Net Assets Available For Benefits 7
Notes To Financial Statements 8
Supplementary Information
Report Of Independent Certified Public Accountants
On Supplementary Information 14
Schedule H, Line 4(i) - Schedule Of Assets Held At End Of Year 15
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Trust Administrative Committee
Badger Paper Mills, Inc. Profit Sharing Plan
and Trust For Non-Union Employees
We have audited the accompanying statements of net assets available for benefits
of Badger Paper Mills, Inc. Profit Sharing Plan and Trust for Non-Union
Employees as of December 31, 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 our audits provide 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 Badger Paper
Mills, Inc. Profit Sharing Plan and Trust for Non-Union Employees as of December
31, 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.
/s/ Grant Thornton LLP
Appleton, Wisconsin
May 21, 2002
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Badger Paper Mills, Inc.
Profit Sharing Plan and Trust for Non-Union Employees
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
ASSETS 2001 2000
------------------ ------------------
Investments, at fair value
Common trust funds $1,097,794 $878,946
Mutual funds 7,606,853 8,525,937
Common stock 25,934 10,294
------------------ ------------------
8,730,581 9,415,177
Employer contributions receivable 275,949 203,180
Accrued income 6 7
------------------ ------------------
Total assets 9,006,536 9,618,364
------------------ ------------------
LIABILITIES
Miscellaneous payable 7,821 8,279
------------------ ------------------
Total liabilities 7,821 8,279
------------------ ------------------
NET ASSETS AVAILABLE FOR BENEFITS $8,998,715 $9,610,085
================== ==================
The accompanying notes are an integral part of these statements.
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Badger Paper Mills, Inc.
Profit Sharing Plan and Trust for Non-Union Employees
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended December 31,
2001 2000
------------------ -------------------
Additions to net assets available for benefits:
Investment income:
Interest income and dividends $64,283 $116,378
Contributions:
Employee contributions 258,010 305,478
Employer contributions 275,949 203,180
Rollovers - 9,176
------------------ -------------------
533,959 517,834
------------------ -------------------
Total additions 598,242 634,212
Deductions from net assets available for benefits:
Net depreciation in fair value of investments 737,619 241,944
Benefits paid to participants 586,730 1,863,333
Trust and other fees 11,103 12,328
------------------ -------------------
Total deductions 1,335,452 2,117,605
------------------ -------------------
DECREASE IN NET ASSETS AVAILABLE
FOR BENEFITS (737,210) (1,483,393)
Net assets available for benefits:
Beginning of year 9,610,085 11,049,791
Transfer from Badger Paper Mills, Inc.
Profit Sharing Plan and Trust
for Union Employees 125,840 43,687
------------------ -------------------
Net assets available for benefits at end of year $8,998,715 $9,610,085
================== ===================
The accompanying notes are an integral part of these statements.
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Badger Paper Mills, Inc.
Profit Sharing Plan and Trust for Non-Union Employees
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 and 2000
NOTE A - PLAN DESCRIPTION
The following brief description of Badger Paper Mills, Inc. Profit Sharing Plan
and Trust for Non-Union Employees (the "Plan") is provided for general
information purposes only. Participants should refer to the Plan agreement for
more complete information.
1. General
The Plan is a defined contribution pension plan which covers substantially all
salaried employees of Badger Paper Mills, Inc. (the "Company") who have attained
the age of 18. Employees who have completed at least ninety days of service with
the Company are eligible to make 401(k) contributions. Employees are eligible to
receive an allocation of the Company's contribution after the completion of one
year of service. It is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA) and subsequent legislation.
2. Contributions
The Company contributes to the Plan each year 4% of the total compensation paid
to plan participants during such year plus 4% of the excess compensation over
the social security wage base. In addition, the Company reserves the right to
make contributions in any year in excess of the above determined amount.
A cash or deferred arrangement plan, as authorized by Section 401(k) of the
Internal Revenue Code (IRC), allows employees to defer a portion of their
compensation up to the applicable IRC limits by having it contributed by the
Company to their individual account in the Plan.
3. Vesting
Participants are at all times fully vested in the value of their accounts
attributable to their voluntary contributions.
For 2001 and 2000, participants became 20% vested in the Company's profit
sharing contribution following three years of service and are additionally
vested at 20% for each year of additional service up to seven years of service,
at which time participants are fully vested. Upon death, disability or
retirement, participants are automatically 100% vested regardless of years of
service.
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Badger Paper Mills, Inc.
Profit Sharing Plan and Trust for Non-Union Employees
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
December 31, 2001 and 2000
NOTE A - PLAN DESCRIPTION - Continued
Effective January 1, 2002, vesting is in accordance with the following graduated
vesting schedule:
Years of service Nonforfeitable percentage
---------------------- ---------------------------
Less than 1 0%
1 33
2 66
3 or more 100
4. Benefits
On termination of service due to death, disability or retirement, the
participant or beneficiary is entitled to receive the full value of the
participant's account. Upon a participant's termination from employment with the
Company for a reason other than death, disability or retirement, the participant
is entitled to the vested balance in their account.
The method of distribution for account balances exceeding $5,000 will be
determined by an election made by the Plan participant. The methods available
are lump sum, direct rollover, installment payments or part installments and
lump sum. The standard method for account balances less than $5,000 is lump sum
payments.
5. 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. Participants will become fully vested
upon termination of the Plan.
6. Participant Accounts
Each participant's account is credited with the participant's contribution, an
allocation of the Company's profit sharing contribution, Plan earnings and
forfeitures of terminated participants' nonvested accounts. The allocation of
the Company's contributions and forfeitures to individual participant accounts
is integrated with social security, according to the Plan provisions, and is
based upon participant compensation.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Plan have been prepared in conformity with
accounting principles generally accepted in the United States of America as
applied to profit sharing plans.
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Badger Paper Mills, Inc.
Profit Sharing Plan and Trust for Non-Union Employees
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
December 31, 2001 and 2000
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
A summary of the significant accounting policies consistently applied in the
preparation of the accompanying financial statements follows.
1. Use of Estimates
In preparation of the financial statements in conformity with accounting
principles generally accepted in the United States of America, management is
required to make estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reported period. Actual results could differ from those
estimates.
2. Basis of Accounting
The financial statements of the Plan are prepared on an accrual basis.
3. Valuation of Investments
The Plan's investments are held by Wells Fargo Bank Minnesota, N.A. (the
"Trustee"). Plan investments are stated at market value as reported by the Plan
Trustee.
Investments in securities traded on a national securities exchange are valued at
the last reported sales price on the last business day of the year; securities
traded in the over-the-counter market and listed securities for which no sale
was reported on that date are valued at the mean between the last reported bid
and asked prices. Investments in mutual funds are stated at a value based upon
the per unit allocation of the funds' net assets, stated at fair value on the
last business day of the year.
NOTE C - INVESTMENTS
The following schedule presents the investments held by the Trustee in each fund
at December 31, 2001 and 2000. Investments that represent 5% or more of the
Plan's net assets are separately identified.
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Badger Paper Mills, Inc.
Profit Sharing Plan and Trust for Non-Union Employees
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
December 31, 2001 and 2000
NOTE C - INVESTMENTS - Continued
2001 2000
------------------ -------------------
Common trust Funds:
Wells Fargo Stable Return Fund $1,094,881 $877,593
Other 2,913 1,353
Mutual Funds:
Wells Fargo Growth Balanced Fund 2,956,814 3,275,991
Wells Fargo Growth Equity Fund 1,258,421 1,473,568
Wells Fargo Diversified Equity Fund 1,040,403 1,352,382
Wells Fargo Large Company Growth Fund 569,998 858,552
Janus Overseas Fund 578,321 781,387
Wells Fargo Small Cap Fund 822,745 527,029
Other 380,151 257,028
Other 25,934 10,294
------------------ -------------------
$8,730,581 $9,415,177
================== ===================
The Plan's investments (including investments bought, sold and held during the
year) appreciated (depreciated) in value as follows for the years ended December
31:
2001 2000
------------------ -------------------
Common trust funds $67,606 $41,123
Mutual funds (813,652) (273,604)
Common stock 8,427 (9,463)
------------------ -------------------
$(737,619) $(241,944)
================== ===================
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Badger Paper Mills, Inc.
Profit Sharing Plan and Trust for Non-Union Employees
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
December 31, 2001 and 2000
NOTE D - ADMINISTRATIVE EXPENSES
All administrative expenses in connection with the operation of the Plan are
paid from Plan earnings.
NOTE E - INCOME TAX STATUS
The Plan obtained its latest determination letter on February 25, 1999, in which
the Internal Revenue Service stated that the Plan was designed in accordance
with applicable requirements of the IRC. Since receiving the determination
letter, the Plan has been amended. However, the Plan administrator and the
Plan's tax counsel believe that the amended Plan is designed and is currently
being operated in compliance with the applicable requirements of the IRC.
NOTE F - RECLASSIFICATIONS
Certain reclassifications have been made to the 2000 balances to conform to the
presentation adopted in the current fiscal year.
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SUPPLEMENTARY INFORMATION
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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
ON SUPPLEMENTARY INFORMATION
Trust Administrative Committee
Badger Paper Mills, Inc. Profit Sharing Plan
and Trust for Non-Union Employees
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole of Badger Paper Mills, Inc. Profit Sharing
Plan and Trust for Non-Union Employees as of December 31, 2001 and 2000 and for
the years then ended, which are presented in the preceding section of this
report. The supplementary schedule is presented for the purpose of additional
analysis and is not a required part of the basic financial statements but is
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. Such information has been subjected to the auditing
procedures applied in the audits 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/ Grant Thornton LLP
Appleton, Wisconsin
May 21, 2002
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Badger Paper Mills, Inc.
Profit Sharing Plan and Trust for Non-Union Employees
SCHEDULE H, LINE 4(i) - SCHEDULE OF ASSETS HELD AT END OF YEAR
Employer ID# 39-0143840 - Plan # 002
December 31, 2001
(c) Description of investment
including maturity date,
(b) Identity of issuer, borrower, rate of interest, collateral,
(a) lessor or similar party par or maturity value (e) Current value
- ---------- ------------------------------------- ------------------------------------ --------------------
* Wells Fargo Bank, N.A. Stable Return Fund $1,094,881
Short-Term Investment Fund 2,913
-----------------
1,097,794
* Wells Fargo Bank, N.A. Growth Balanced Fund 2,956,814
Growth Equity Fund 1,258,421
Large Company Growth Fund 569,998
Strategic Income Fund 187,039
Diversified Equity Fund 1,040,403
S&P 500 Collective Fund 179,646
Small Cap Fund 822,745
* Janus Overseas Fund 578,321
* MSIF Trust Mid Cap Growth Portfolio Fund 13,466
-----------------
7,606,853
* Badger Paper Mills, Inc. Common Stock 25,934
-----------------
$8,730,581
=================
* Indicates party-in-interest investment.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Profit Sharing Trust Committee for Non-Union Employees, which administers the
Plan, has duly caused this Annual Report to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Peshtigo, and State of
Wisconsin, on this 26th day of June, 2002.
BADGER PAPER MILLS, INC. PROFIT
SHARING PLAN AND TRUST FOR NON-UNION
EMPLOYEES
By: /s/ Robert A. Olah
-------------------------------------
Robert A. Olah
By: /s/ William H. Peters
-------------------------------------
William H. Peters
The foregoing persons are all of the members of the Profit Sharing Trust
Committee for Non-Union Employees which is the administrator of the Badger Paper
Mills, Inc. Profit Sharing Plan and Trust for Union Employees.
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EXHIBIT INDEX
BADGER PAPER MILLS, INC.
PROFIT SHARING PLAN AND TRUST FOR NON-UNION EMPLOYEES
FORM 11-K
Exhibit No. Exhibit Page No.
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(23.1) Consent of Grant Thornton LLP 18
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