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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period _____ to _____
COMMISSION FILE NUMBER
0-27222
CFC INTERNATIONAL, INC.
EMPLOYEES' SAVINGS AND INVESTMENT PLAN
CFC INTERNATIONAL, INC.
500 State Street
Chicago Heights, IL 60411
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REQUIRED INFORMATION
Page
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(a) Financial Statements - Plan financial 3-12
statements and schedule prepared in
accordance with financial reporting
requirements of ERISA.
See accompanying Contents of Financial
Statements and Supplemental
Schedule attached hereto, which is
incorporated herein by reference.
(b) Signatures 13
(c) Exhibits 14
23 Consent of Independent Auditors
CFC International, Inc.
Employees' Savings and
Investment Plan
Report on Audits of Financial Statements and
Supplemental Schedule
December 31, 2002 and 2001
CFC International, Inc.
Employees' Savings and Investment Plan
Contents
December 31, 2002 and 2001
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Page(s)
Report of Independent Auditors..................................... 5
Financial Statements
Statements of Net Assets Available for Benefits.................... 6
Statement of Changes in Net Assets Available for Benefits.......... 7
Notes to Financial Statements...................................... 8-11
Supplemental Schedule
Schedule I: Schedule H, line 4i - Schedule of Assets
(Held at End of Year)............................................ 12
Note: Other schedules required by 29 CFR 2520.103-10 of the Department of
Labor's Rules and Regulations for Reporting and Disclosure under ERISA
have been omitted because they are not applicable.
Report of Independent Auditors
To the Participants and Administrator of the
CFC International, Inc. Employees' Savings
and Investment Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the CFC International, Inc. Employees' Savings and Investment Plan (the
"Plan") at December 31, 2002 and 2001, and the changes in net assets available
for benefits for the year ended December 31, 2002 in conformity with accounting
principles generally accepted in the United States of America. 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 auditing standards
generally accepted in the United States of America, 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 our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental Schedule of Assets (Held
at End of Year) 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. This
supplemental schedule is the responsibility of the Plan's management. The
supplemental schedule 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.
May 2, 2003
CFC International, Inc.
Employees' Savings and Investment Plan
Statements of Net Assets Available for Benefits
December 31, 2002 and 2001
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2002 2001
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Assets
Investments
Participant directed investments, at fair value $6,595,046 $7,466,623
Loans to participants 133,097 69,486
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Total investments 6,728,143 7,536,109
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Receivables
Employer contributions 12,231 9,469
Employee contributions 41,225 32,138
Interest from participant loans 202 448
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Total receivables 53,658 42,055
Net assets available for benefits $6,781,801 $7,578,164
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The accompanying notes are an integral part of
these financial statements.
CFC International, Inc.
Employees' Savings and Investment Plan
Statement of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 2002
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Additions
Investment income
Dividend income $ 68,456
Interest income 5,503
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73,959
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Contributions
Employer 152,139
Employee 742,700
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894,839
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Total additions 968,798
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Deductions
Net depreciation in fair value of investments 1,098,953
Benefits paid to participants 661,443
Loan, distribution and asset and management fees 4,765
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Total deductions 1,765,161
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Net decrease (796,363)
Net assets available for benefits, beginning of year 7,578,164
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Net assets available for benefits, end of year $ 6,781,801
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The accompanying notes are an integral part of
these financial statements.
CFC International, Inc.
Employees' Savings and Investment Plan
Notes to Financial Statements
December 31, 2002 and 2001
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1. Plan Description
The following description of the CFC International, Inc. Employees' Savings
and Investment Plan (the "Plan") is provided for general information
purposes only. Interested parties should refer to the summary plan
description or plan agreement for more complete details of the Plan's
provisions. The Plan is a defined contribution plan whose purpose is to
provide retirement benefits for eligible employees of CFC International,
Inc. (the "Employer") who have completed one year of service and attained
age 21. Effective January 1, 2002, eligible employees must complete one
hour of service. It is subject to the provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA").
Through November 27, 2001, LaSalle National Trust, N.A. was the trustee of
the Plan. On November 27, 2001, all assets were transferred to the Chicago
Trust Company, a related company to ABN AMRO Trust Services Company
("Trustee"), and LaSalle National Trust, N.A. The Trustee holds the Plan's
investment assets and executes investment transactions.
Contributions
Eligible employees ("Participants") may contribute between 2% and 18% of
their annual compensation under a salary deferral agreement, subject to
limits imposed by the Internal Revenue Code. Until December 31, 2001, the
maximum amount of pre-tax and post-tax contributions is 18% of their annual
compensation. Effective January 1, 2002, participants may contribute 18% of
their annual pre-tax compensation and 14% of their annual post-tax
compensation. For each participant's salary deferral contribution up to a
maximum of 4% of annual compensation, as defined, the Employer will make
matching contributions of 50% of such participant's pre-tax contribution.
In addition, the Employer can make a discretionary contribution to the Plan
each year.
Participant Accounts, Vesting and Forfeitures
Participant accounts are credited with each participant's current
contribution, Employer matching contributions and a share of the Plan's
earnings. The Employer's matching contributions are credited monthly. The
allocation of Plan earnings are based on the proportion that the balance of
each participant's account invested in an investment fund bears to the
total balance of all participants' accounts invested in that investment
fund. Until January 1, 2002, participants immediately vest in their own
contributions plus earnings thereon and in the Employer's matching
contributions. Effective January 1, 2002, the Plan was amended and the
Employer's matching contributions vest after one year of service. Employees
must complete 1,000 hours (one year) of service and be employed on the last
day of the plan year to receive a discretionary contribution. There were no
Employer discretionary contributions in 2002 or 2001. Forfeitures of
non-vested balances are used to reduce the Employer's contribution for the
Plan year. Forfeitures were $22,409 and $2,939 in 2002 and 2001,
respectively.
Payment of Benefits
On termination of service due to retirement, death or disability,
participants become 100% vested in their account balance. For termination
of service for other reasons, participants may receive the vested balance
in their account. Vested balances less than $5,000 are automatically
distributed after employment is terminated. Vested balances greater than
$5,000 are distributed upon election by the participant. A 2002 plan
amendment requires all amounts to be distributed as lump-sum distributions.
Prior to the amendment, participants could elect to receive his or her
vested account balance either in lump-sum or in installments over periods
specified in the Plan.
Participant Loans
The Plan provides that a participant may borrow a minimum of $1,000 and up
to a maximum of the lessor of 50% of the participant's vested account
balance or $50,000 less the excess of the highest outstanding loan balance
during the previous one year period over the outstanding balance as of the
date of the loan. The loans are secured by the balance in the participant's
account and bear interest at the prime rate at the time of the loan plus
1%. Repayment occurs through payroll withholding over a period not to
exceed 60 months, unless the loan is for the purchase or construction of a
home, in which case the repayment period may extend to 180 months.
Expenses
All recordkeeping expenses incurred by the Plan were paid by the Employer
in 2002 and 2001.
2. Summary of Significant Accounting Policies
Basis of Accounting
The Plan's financial statements are prepared on the accrual basis of
accounting.
Investment Valuation and Investment Income
Under provisions of the plan, participants may direct the Trustee to invest
their contributions, as well as employer contributions, in any of the
investment options available under the Plan. Investment options are mutual
funds, a money market fund and certain equity securities, valued at fair
value as determined by the Trustee, using quoted market prices when
available. Loans to participants are carried at the outstanding principal
amount which is estimated to approximate fair value.
Purchases and sales of securities, including related gains and losses, are
recorded on a trade-date basis.
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation (depreciation) in the fair value of its
investments which consists of the realized gains or losses and the
unrealized appreciation (deprecation) on those investments.
Payment of Benefits
Benefits are recorded when paid.
Contributions
Employer matching and employee contributions are recognized during the
period in which the participant's related compensation is earned. Employer
discretionary contributions are recognized during the period in which
approved by the Employer's board of directors. No discretionary
contributions were made during the years ended December 31, 2002 and 2001.
Risks and Uncertainties
The Plan provides for investment in various mutual funds, a money market
fund and certain equity securities. Such investments are exposed to various
risks, such as interest rate, market and credit. Due to the level of risk
associated with such investments, it is at least reasonably possible that
changes in the values of investment securities will occur in the near term
and that such changes could materially affect participants' account
balances and amount reported in the statements of net assets available for
benefits and the statement of changes in net assets available for benefits.
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 and liabilities and
changes therein, and disclosure of contingent assets and liabilities.
Actual results could differ from those estimates.
3. Investments
The following table presents individual participant directed investment
options that represent 5% or more of the Plan's net assets as of December
31:
2002 2001
ABN AMRO S&P 500 Index Collective Fund $2,940,882 $4,133,732
ABN AMRO Chicago Capital Bond Fund 1,435,471 1,228,769
ABN AMRO Income Plus Collective Fund 1,387,481 1,081,726
Veredus Aggressive Growth Fund - 490,651
During 2002, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) depreciated
in value by $1,098,953 as follows:
2002
Mutual funds $ (300,242)
Common stock 14,252
Collective trusts (812,963)
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$(1,098,953)
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4. Party-in-Interest Transactions
Party-in-interest transactions consisted of loans made to participants and
investments in the CFC International Unitized Stock Fund. In addition,
since all investments other than loans to participants are held by the
Trustee, such investments constitute party-in-interest transactions.
5. Tax Status
The Plan is a Prototype Non-standardized Profit Sharing Plan ("Prototype
Plan") sponsored by Chicago Trust Company and adopted by the Company. The
Prototype Plan obtained its latest determination letter on August 30, 2001,
in which the Internal Revenue Service ("IRS") stated that the Prototype
Plan, as then designed, was in compliance with the applicable requirements
of the Internal Revenue Code ("IRC"). The Plan has not requested its own
determination letter from the IRS. The plan administrator believes that the
Plan is currently designed and being operated in compliance with the
applicable requirements of the IRC. Therefore, the plan administrator
believes that the Plan was qualified and the related trust was tax-exempt
as of the financial statement dates.
6. Termination of Plan
The Employer believes the Plan will continue without interruption, however,
it has the right to amend or terminate the Plan at any time. Should the
Plan be terminated, participant account balances become 100% vested and
Plan assets, after allowances for expenses of administration or
liquidation, are to be allocated proportionately to each participant based
on the net aggregate value of the participants' investments determined as
of the date of Plan discontinuance.
7. Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of benefits paid to participants per the
financial statements for the year ended December 31, 2002, to the Form
5500:
2002
Benefits paid to participants per the financial statements $ 661,443
Less: Amounts allocated to withdrawing participants
at December 31, 2001 293,144
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Benefits paid to participants per the Form 5500 $ 368,299
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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, 2002, but not yet paid as of that date.
SUPPLEMENTAL SCHEDULE
CFC International, Inc.
Employees' Savings and Investment Plan
Schedule H, line 4i - Schedule of Assets (Held at End of Year)
December 31, 2002 Schedule I
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(c)
(b) Description of ** (e)
Identity of Issue, Investment Including
Borrower, Maturity Date, Rate (d) Current
(a) Lessor, or of Interest, Cost Value
Similar Party Collateral, Par or
Maturity Value
* ABN AMRO Treasury ABN AMRO S&P 500 $ - $2,940,882
Index Collective Fund
* ABN AMRO Treasury ABN AMRO - 1,435,471
Chicago Capital Bond Fund
* ABN AMRO Treasury ABN AMRO - 1,387,481
Income Plus Collective Fund
* ABN AMRO Treasury Veredus Aggressive Growth Fund - 268,521
* ABN AMRO Treasury American Century - 237,794
International Growth Fund
* ABN AMRO Treasury ABN AMRO - 84,481
Chicago Capital Growth Fund
* ABN AMRO Treasury Artisan Mid-Cap Growth Fund - 57,149
* ABN AMRO Treasury ABN AMRO Money Market - 57
Liquidity Fund
* CFC International, CFC Unitized Stock Fund - 183,210
Inc.
* Participant loans 5.75% to 10.5% interest per
annum with maturity
dates between February 2004
and November 2017 - 133,097
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Total assets $ 6,728,143
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* Indicates a party-in-interest
**Cost information has been omitted as investments are participant directed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this annual
report to be signed by the undersigned hereunto duly authorized.
CFC INTERNATIONAL, INC. EMPLOYEES'
SAVINGS AND INVESTMENT PLAN
BY: /s/ Dennis W. Lakomy
Dennis W. Lakomy
Plan Administrator
Date: June 30, 2003
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (No. 333-2978, 333-32481 and 333-60018), and in the
prospectus constituting part of the Registration Statement on Form S-3 (No.
333-47719) of CFC International, Inc. of our report dated May 2, 2003 relating
to the financial statements of the CFC International, Inc. Employees' Savings
and Investment Plan, which appears in this Form 11-K.
PricewaterhouseCoopers, LLP
Chicago, Illinois
June 26, 2003